LAWON PRIVATIZATION("Official Herald of the Republic of Serbia", Nos. 38/2001,18/2003, 45/2005, 123/2007, 123/2007 - other Law and 30/2010 - other Law) |
1. Subject of the Law and General Principles
Article 1
The present Law governs the conditions and the procedure for changing the ownership of socially and state owned capital (hereinafter: privatization).
Article 2
Privatization shall be based on the following general principles:
1) Creation of conditions for economic development and social stability;
2) Transparency;
3) Flexibility;
4) Formation of sale price in accordance with market conditions.
2. Scope of Privatization and Entities to Be Privatized
Article 3
The scope of privatization consists of socially owned and state owned capital (hereinafter: capital) of enterprises, institutions, and other legal entities (hereinafter: entities to be privatized), unless otherwise provided for in special regulations.
The subject of privatization shall be the State owned-capital as well, in the form of shares or portions, unless otherwise specified for the conditions and procedure of sale of that capital.
The privatization procedure may also involve the sale of property, in whole or in part, or sale of certain parts of the entities to be privatized.
Provisions of the present Law shall apply to entities to be privatized, which have their registered office located in the territory of the Republic of Serbia.
The provisions of the present Law shall govern the privatization of capital and property in socially-owned enterprises founded from the parts of enterprises in the Republic of Serbia which have their registered office located in the territory of former SFRY.
Natural resources and goods in public use, as well as goods of general interest, shall not be included in the scope of privatization.
3. Entities Responsible for Implementing Privatization
Article 4
The entities responsible for implementing privatization shall be:
1) Agency for Privatization;
2) ** Ceased to be valid
3) Central Registry for Securities.
During the privatization procedure, the Privatization Registry shall be maintained.
Article 5
The Agency for Privatization (hereinafter: the Agency) is a legal entity that sells capital and/or property, initiates, carries out and controls the implementation of privatization in accordance with the law.
In addition to tasks specified in paragraph 1 of the present Article, the Agency for Privatization (hereinafter: Agency) shall also perform the tasks of the public receiver, directly or through an authorized person (commissioner of the Agency), in conformity with the present Law.
In performing the tasks of control of the privatization procedure, the Agency shall check up: the assessed value of capital or property of entities to be privatized; the coordination of the program of privatization or the restructuring program with the regulations; the coordination between the inflow of resources on the ground of the effected sale with the contract of sale, and the execution of the contract of sale where the Agency is a contracting party, as well as the transfer of shares issued free of charge to the employees.
A separate law shall specify the status, rights and duties of the Privatization Agency as well as other issues of importance for its work.
Article 6**
(Ceased to be valid)
Article 7
The Central Registry for Securities (hereinafter: the Central Registry) maintains a comprehensive database of all issued shares, as well as of any changes to this data in accordance with the law.
Article 8
The Privatization Registry shall record the part of capital of the entities to be privatized, expressed in shares, which shall be transferred to citizens free of charge in accordance with the present Law (hereinafter: Privatization Registry).
The Privatization Registry shall be maintained within the ministry in charge of privatization affairs.
The Privatization Registry shall contain: name of the entity to be privatized whose portion of capital shall be recorded in Privatization Registry, data on the value of capital and number of shares which shall be recorded, and other data.
Minister in charge of privatization affairs shall specify the content and mode of keeping of the Privatization Registry.
Article 9
The models of privatization are:
1) Sale of capital;
2) Transfer of capital free of charge.
Article 10
The sale of capital and property of the entity to be privatized shall be undertaken by the following methods:
1) Public tender;
2) Public auction.
Article 11
The transfer of capital free of charge shall be implemented upon completion of the sale of the capital through:
1) Transfer of shares to employees;
2) Transfer of shares to citizens.
5. Buyers in Privatization Procedure
Article 12
The buyer of capital or property may be a domestic or a foreign legal entity or an individual, in accordance with the Law.
Domestic or foreign legal entities or individuals may become associated for the purpose of buying capital or property of the entity to be privatized, and may authorize one person to represent them.
A buyer of capital or property may not be:
1) a domestic legal entity doing business by using the majority of socially-owned capital;
2) an individual, legal entity and a founder of a legal entity with unsettled commitments towards the entity to be privatized until the day of submitting the offer to a tender, and/or the application for taking part in public auction;
3) a natural person, legal entity and the founder of the legal entity with whom a contract of sale of capital and/or property has been rescinded due to failure to carry out contractual duties;
4) a natural person condemned or presently prosecuted for the following criminal offences:
- commercial criminal offences;
- criminal offences against the line of duty;
- first degree murder;
- grand larceny, robbery, embezzlement, fraud, ungrounded use of credit and other advantages, extortion, blackmail, and usury;
- unauthorized manufacture and trading in narcotics, providing opportunity for taking narcotics, manufacture and trading in harmful products, polluting of drinking water and food, and serious and serious offences against the health of people;
- environmental pollution, failing to take environment protection measures, unlawful construction and putting in operation of facilities and installations apt to pollute the environment, bringing into Serbia dangerous matters, and wrongful possession and laying away and storage of dangerous matters and unauthorized construction of nuclear installation;
- criminal association, making and acquiring arms and means intended for committing criminal offences, unauthorized keeping of arms and explosive matters, not permitted crossing of state border and smuggling of people, unauthorized organizing of games of chance and unauthorized engagement in a specific activity,
- organized crime;
- criminal offence specified in Article 149, paragraph 2 of the Law on Planning and Construction ("Official Herald of the RS", Nos. 47/2003 and 34/2006).
Precluded to be a buyer of capital or property shall also be a commercial company where, in terms of the Law regulating commercial companies, the person specified in paragraph 3, items 2), 3) and 4) of the present Article is considered as a controlling member or a controlling shareholder.
A buyer of capital or property of a parent and/or dependent company where the privatization procedure is in course, may not be its dependent and/or parent company.
Article 12a
A participant to public auction, proclaimed as a buyer or the one making the second best offer, who fails to sign the minutes or to make payment within the time limit, shall forfeit the capacity of a buyer and the right to take part in future public auctions to be organized for such entity to be privatized, as well as the right to the refund of the deposit.
The person specified in paragraph 1 of the present Article shall pay to the account of the Agency, in virtue of damage suffered by the entity to be privatized and the Agency, a sum amounting to 30% of the sale price, 15% of which shall belong to the entity to be privatized.
The right to take part in future public auctions to be organized for the entity to be privatized, referred to in paragraph 1 of the present Article, shall as well not pertain to a member of the family of person who has lost the capacity of a buyer, as well as to a legal entity founded by him.
Considered as members of the family in terms of paragraph 3 of the present Article shall be descendants, a spouse or an out-of-wedlock partner, and parents of the buyer.
Article 12b
A person who lost the capacity of buyer and members of his family, in conformity with Article 12a of the present Law, shall not be entitled to take part in future public auctions organized for any entity to be privatized, in the six month period from the day of effecting the public auction at which he has lost the capacity of buyer.
The person who looses again the capacity of a buyer, after the expiration of the time limit specified in paragraph 1 of the present Article, shall have no more right to take part in future public auctions to be organized for any entity to be privatized.
6. Payment Instruments in Privatization
Article 13
Payment in privatization may be effected by either domestic or foreign convertible currency.
Payment may also be effected by bonds issued on account of unpaid foreign currency citizens' savings to individuals who are citizens of the Republic of Serbia, and which mature on or before the date of the sale of capital or property.
Except as provided in paragraphs 1 and 2 of the present Article, payment may also be effected by bonds on account of unpaid foreign currency citizens' savings to individuals who are citizens of the Republic of Serbia, irrespective of their maturity date, where, in the sale through public auction, the property or capital was not sold by means of payment referred to in paragraphs 1 and 2 of the present Article.
Payment may not be effected by bonds on account of unpaid foreign currency citizens' savings issued to individuals who are citizens of the Republic of Serbia which bonds are not due for payment on the day of sale of capital and/or property, where the contracted price is to be paid in six annual installments, at the most.
7. Time Limits in Carrying out of Privatization
Article 14
Public invitation for taking part in the public tender and/or public auction for privatization of a non-privatized socially owned capital must be announced until 31 December 2008, at the latest.
If the public invitation is not announced within the time limit specified in paragraph 1 of the present Article, the Agency shall render a decision on instituting compulsory liquidation of the entity to be privatized (hereinafter: liquidation).
The liquidation of the entity to be privatized shall be instituted also if:
1) the socially-owned capital and/or property of the entity to be privatized was not sold even after carrying out of the third public tender and/or public auction;
2) the entity to be privatized has failed for two consecutive years to submit an annual financial report to the agency in charge of keeping the Privatization Entities Registry.
Article 14a
Procedure of liquidation of the entity to be privatized shall be carried out by the Agency in conformity with the present Law.
If the entity to be liquidated fails to adopt the liquidation balance sheet (position balance sheet, preliminary report regarding the actions taken, financial report, report of carrying out the liquidation, and the final liquidation balance sheet), the liquidation receiver shall complete the liquidation procedure even without approving the balance sheet.
Proceeds remaining after completing the liquidation procedure shall become the revenue of the budget of the Republic of Serbia, except for the privately owned funds.
The liquidation receiver shall be entitled to remuneration for his work and to reimbursement of actual expenses (hereinafter: remuneration and reimbursement).
The amount of remuneration and reimbursement specified in paragraph 4 of the present Article shall be prescribed by the minister in charge of privatization affairs.
Liquidation of the entity to be privatized shall be governed accordingly by provisions of the Law on Commercial Companies covering the liquidation of commercial companies.
8. Compensation for Nationalized Property
Article 15
Where property expropriated from individuals or legal entities by the regulations governing the expropriation of property is included in the privatization, and which is determined by the separate regulations on restitution of property (hereinafter: nationalized property), the former owners of such nationalized property shall be compensated solely from the funds to be allocated for such purposes by the Republic of Serbia.
II PREPARATION FOR PRIVATIZATION
1. Instituting of Privatization Procedure
Article 16
The privatization procedure shall commence by the initiative of the competent body of the entity to be privatized (hereinafter: the initiative for privatization) and the drafting of the prospectus for privatization (hereinafter: the prospectus).
Initiative for privatization, in terms of the present Law, is an act of the entity to be privatized expressing its intention to carry out the privatization and shall be submitted in a written form.
The initiative shall be submitted to the workers' union of the entity to be privatized, and the employees shall be informed in accordance with the general act of the entity to be privatized.
The initiative for privatization and the prospectus shall be submitted to the Privatization Agency within five days of the date of the initiative.
The Privatization Agency or the ministry in charge of privatization affairs may also launch the initiative.
In the case referred to in paragraph 5 of the present Article, the entity to be privatized is obliged to deliver to the ministry in charge for privatization the prospectus within seven days from the date on which it receives the initiative for privatization.
Article 17
Initiative for the privatization in entities with majority state-owned capital shall be submitted by the ministry in charge of privatization to the Government of the Republic of Serbia for the purpose of obtaining approval.
Article 18
The prospectus, in accordance with this law, is a description of the main data on the entity to be privatized, according to the latest financial report.
Prospectus form shall be prescribed by the Minister in charge of privatization affairs.
The Agency shall advertise the prospectus in the mass media (press, television and Internet) within 15 days from the date on which the prospectus was delivered.
The advertising referred to in paragraph 3 of the present Article shall be for the purpose of gathering data on the number of potential purchasers.
A potential purchaser shall express its interest in buying the capital and/or the property of the entity to be privatized in writing and notify both the entity to be privatized and the Agency, within the period determined by the Agency in the public notice.
The cost of advertising the prospectus shall be born by the entity undergoing privatization.
The Agency shall, within 5 days after the expiration of the deadline for collecting data on the number of potential buyers, notify the entities to be privatized about the method of privatization or on need for restructuring, in accordance with this Law.
3. Restructuring in Privatization Procedure
Article 19
If the Agency evaluates that the capital and property of the entity to be privatized cannot, without prior restructuring, be privatized according to the methods of public tender or public auction, the Agency shall make a decision on restructuring in the privatization procedure in accordance with the present Law.
The restructuring in privatization procedure (hereinafter: restructuring) in terms of the present Law shall mean changes relating to the entity to be privatized and its dependent companies, which enable the sale of its capital or property, and especially:
1) status changes, legal form changes, changes of internal organization and other organizational changes;
2) writing off a principal debt, interest due or other due claims, totally or partially;
3) forgiving a debt totally or partially for the purpose of settling creditors from the resources effected by the sale of capital of the entity to be privatized.
In the entities to be privatized where restructuring has been effected, the Agency shall sell capital and/or property by applying the method of public tender or public auction.
Article 19a
The decision on restructuring shall include: business name and head office of the entity to be privatized, the mode of restructuring, time limit in which creditors are obliged to report their claims, as well as other data relevant in carrying out the restructuring.
The decision specified in paragraph 1 of the present Article shall be filed in the registry in conformity with the law regulating the registration of commercial entities.
The decision on restructuring shall be published in the public information media (a daily newspaper, Internet or television) within 15 days from the date of its enactment.
Article 20
In the procedure of restructuring of the entity to be privatized which operates entirely or in the major part with socially- or State-owned capital, a public enterprise, the Taxation Office, the Republic Fund of Pension and Disabled Persons' Insurance, the Republic Institution for Health-Care Insurance, the Republic Directorate of Commodity Reserves, the Fund for Development of the Republic of Serbia and other republic agencies and organizations (hereinafter: State creditor), shall be obliged to totally write off a debt relating to the entity to be privatized, and to settle their claim by using proceeds effected from the sale of capital of the entity to be privatized.
State creditors shall be obliged to write off the debt to a subordinated (dependent) company as well, which company:
1) owns in the structure of capital a major part of capital of the controlling (parent) company;
2) and where socially- or State-owned capital, together with the controlling company’s capital, makes its major part.
Considered as State creditor shall also be the Agency for Deposit Insurance when performing the function of public receiver in the banks going bankrupt and when managing claims on behalf and for the account of the Republic of Serbia on the ground of foreign obligations it has assumed.
The remaining creditors may write off a debt relating to the entity to be privatized, for the purpose of settling claims by using proceeds effected from the sale of capital or property of the entity to be privatized (hereinafter: remaining creditors).
Should the remaining creditors fail to write off the debt relating to the entity to be privatized, the conditions and mode of settlement of their claims shall be stipulated in agreement with the buyer of capital of the entity to be privatized.
Article 20a
A State creditor shall be obliged to report, in writing, its claim within 15 days from the date of publishing the decision on restructuring in a daily newspaper.
The reporting form shall particularly include the name of a State creditor, the legal ground of the claim, as well as the amount of claim, and especially the amount of the calculated interest.
Should the entity to be privatized fail to agree with the amount of claim reported by the State creditor, the reported claim may be challenged by filing an objection to the arbitration chamber, within eight days from the day of dispatching the report.
Should the State creditor deny the objection specified in paragraph 3 of the present Article, the issue of the amount of State creditor's claim shall be decided by the arbitration bench.
Article 20b
The arbitration bench specified in Article 20a of the present Law shall have three members.
Composition of the arbitration bench shall be determined by the parties, so that one arbitrator shall be proposed by the State creditor, the second by the entity to be privatized, and the chairman of the bench shall be the representative of the Chamber of Commerce of Serbia.
The decision on the amount of the State creditor's claim shall be made by the arbitration bench within15 days from the date of filing the objection against the amount of claim.
In the procedure before the arbitration bench, the provisions of the law regulating the litigation procedure shall accordingly apply.
Should the arbitration bench fail to render a decision on the amount of claim within the time limit specified in paragraph 3 of the present Article, reliable and final shall be considered the data relating to the amount of claim as contained in the restructuring program.
Article 20c
(Deleted)
Article 20d
The State creditor shall settle its due and unsettled claim from the proceeds effected in the sale of capital of the entity to be privatized, in the amount that is proportionate to its claim within the total claims of all the creditors to be settled from the proceeds effected in the sale of capital of the entity to be privatized.
The claim of a State creditor shall be settled, at the most, up to the amount of nominal amount of claim, increased by the corresponding interest, and prior to the distribution of proceeds effected in the sale of capital in conformity with Article 60 of the present Law.
Due claims referred to in paragraph 1 of the present Article, shall be understood to mean the unsettled claims as of 31 December 2004.
Article 20e
Provisions regarding total writing off a debt by the State creditor relating to the entity to be privatized shall be valid if the capital of the entity in course of restructuring within privatization procedure is sold by applying the method of public tender or the method of public auction.
The State creditor's claim shall be considered as entirely settled, if settled in the mode prescribed by Article 20d of the present Law.
Article 20f
The Government of the Republic of Serbia shall prescribe details of the procedure and mode of restructuring of an entity to be privatized.
Article 20g
Provisions on writing off a debt relating to the entity to be privatized, which is in course of restructuring within the process of privatization, shall also apply to the entity to be privatized which is in course of privatization by applying the method of public tender and/or public auction.
Article 20h
From the day of rendering the decision on restructuring until the day of rendering the decision on completing the restructuring, the entity to be privatized and/or its property may not be the subject either of an order relating to compulsory enforcement and its carrying out, or of any other measure of execution aimed at settling of claims.
The decision on restructuring shall have the force of an enforceable instrument.
The decision on restructuring shall be dispatched by the Agency within five days from the day of its enactment to the agency in charge of enacting a ground and an order of compulsory collection.
The agency in charge of carrying out the compulsory collection shall suspend, on the ground of decision on restructuring, the performance of recorded grounds and orders, while the courts and other agencies in charge of enacting compulsory collection grounds and orders shall enact no new compulsory collection grounds and orders.
State creditors may not request compulsory collection or any other execution procedure measure against entities to be privatized by applying the method of public tender and/or public auction, intended for collecting claims which originated until 31 December 2007.
The ban specified in paragraph 5 of the present Article shall apply until the day of payment of the sale price or the first installment, if the sale price is paid by installments.
Any procedure of compulsory enforcement that is in course shall be suspended.
After completing the restructuring and/or after the sale by applying the method of public tender or public auction, the Agency shall notify the courts and agencies specified in paragraph 4 of the present Article on the payment of sale price and on creditors who have to settle their claims out of that price.
Article 21
The entity to be privatized by public tender shall prepare the documentation in compliance with the regulation specified in Article 33 of the present Law.
The entity to be privatized by public auction shall prepare the privatization program in compliance with the regulation specified in Article 40 of the present Law.
The Agency shall make a restructuring program or entrust the making of program to the entity to be privatized, and/or to a legal or financial advisor, in compliance with the provisions specified in Article 20f of the present Law, that are mandatory for the entity.
The entity making a restructuring program shall be obliged, prior to developing the program, to make a comprehensive analysis of business operations of the entity to be privatized, within a time limit determined by the Agency.
The Agency may prepare the documentation specified in paragraph 1 of the present Article or the program specified in paragraph 2 of the present Article, which shall be obligatory for the entity to be privatized.
Article 22
The privatization program shall specifically contain: data on business operations, the value of capital or property, and organizational structure of the entity to be privatized.
The privatization program shall be enacted by the competent body of the entity to be privatized.
The privatization program shall be submitted to the Agency no later than 90 days from the date of forwarding the decision on the method of privatization.
The Agency shall control the program specified in paragraph 1 of the present Article and shall accept that program if it includes the prescribed data.
Enclosed to the program specified in paragraph 3 of the present Article shall be a statement by the person responsible in the entity to be privatized, relating to accuracy of data included in the program of privatization. The person responsible shall be liable for damage caused to the entity to be privatized or to the buyer of capital by his statement, if the statement is given with gross negligence or with intent to cause harm.
Within 30 days from the date on which the privatization program is submitted, the Agency shall make a decision relating to acceptance, returning the program for corrections and/or amending it in accordance with regulations on the content and mode of preparation of privatization program.
The entity to be privatized shall be obliged to effect any change or amendment to the privatization program within the period indicated by the Agency, which can not exceed 60 days from the date the decision specified in paragraph 4 of the present Article was made.
Should the Agency fail to make the decision referred to in paragraph 4 of the present Article, the privatization program shall be deemed accepted.
The entity to be privatized shall be obliged to comply with the decision of the Agency.
Should the entity to be privatized fail to forward the privatization program or to comply with the decision of the Agency, the Agency shall carry out further procedure of privatization in accordance with the law.
Article 23
The restructuring program shall contain, in particular: data on business operations, internal organization and the value of capital and property; annual statement of accounts; consolidated annual statement of accounts; the mode of paying off of debts; opening balance sheet; position of separate parts and/or organizational units; welfare program; environmental protection program, as well as other data relevant for carrying out the restructuring of the entity to be privatized.
The restructuring program specified in paragraph 1 of the present Article shall be enacted by the competent body of the entity to be privatized.
The entity to be privatized shall be obliged to forward the restructuring program to the Agency within 90 days from the date the Agency has approved the comprehensive analysis of business operations of the entity to be privatized.
At the request by the entity to be privatized or a creditor as a legal and/or financial advisor, the Agency may extend the time limit for forwarding the restructuring program for another 90 days, at the most, should justified reasons thereof exist.
Within 30 days, at the most, from the date the restructuring program was submitted, the Agency shall be obliged to make a decision on acceptance, rejection, returning for correction, or amending the program.
The entity to be privatized shall be obliged to effect correction of or amendment to the restructuring program within the time limit determined by the Agency which can not exceed 60 days from the date of forwarding the decision specified in paragraph 5 of the present Article.
Should the entity to be privatized fail comply with the decision of the Agency within the time limit specified in paragraph 6 of the present Article, the Agency shall carry out further procedure of privatization in accordance with the present Law.
The restructuring program shall be considered enacted after the Agency has rendered the decision on accepting that program.
Article 23a
The restructuring program enacted in conformity with the present Law shall have the force of an executive document and shall be considered as a contract specifying the amount and mode of settlement of creditors' claims established in it.
Should after making the restructuring program the proceedings be instituted before a competent agency against the entity to be privatized and/or the buyer of capital, the competent agency shall - where the claim is founded - to oblige the entity to be privatized and/or the buyer of capital, to settle the claim in the way provided for in the restructuring program.
5. Assessment of Value of Capital and Property
Article 24
The range for the value of capital or property shall be determined in the entity to be privatized by applying the method of public auction.
The price at which the capital or property will be sold by applying the method referred to in Article 10 of this Law shall be formed on the basis of market conditions.
The Government of the Republic of Serbia shall set forth the methodology for valuing capital or property of the entity to be privatized.
Article 25
The subject of sale shall be 70% of the capital to be privatized, unless otherwise provided for by regulations specifying the status of commercial entities and/or terms and mode of performing specific business and other activities.
The percentage of capital to be sold in entities to be privatized which operate with the majority state capital and whose legal status and/or conditions and mode of performing specific commercial and other activities are not covered by special regulations, shall be determined by the Government.
In the entity to be privatized, which is in the restructuring procedure pursuant to the present Law, all of the capital or property shall be sold.
Article 25a
Should in course of privatization procedure circumstances take place that make impossible the sale of capital and/or property of the entity to be privatized, which circumstances were not known at the time of initiating the procedure, the Agency may order the suspension of the procedure, which suspension shall continue until the reasons thereof do exist, and at the most for 180 days from the date of rendering the decision on suspension of the procedure. In course of the suspension of procedure, the prescribed time limits shall stop running.
The Agency shall suspend the procedure after becoming aware of circumstances that were unknown to it at the time of instituting the procedure and which completely prevent the sale of capital and/or property of the entity to be privatized.
An enterprise doing business by using majority of socially-owned capital may, in course of the privatization procedure alter specific provisions of the individual collective agreement relating to the amount of earnings of the employees only after obtaining the consent of the Agency, if by such provisions the earnings of the employees are increased at a percentage that is higher than the planned retail prices growth or if the enterprise has terminated the preceding business year with a loss.
Article 26
The sale of capital and property by public tender is the method of privatization whereby offers of potential buyers are publicly collected in compliance with determined conditions of sale.
Public tender sale shall be organized and conducted by the Agency.
Article 27
The public tender sale procedure encompasses: preparation of tender sale, public invitation for offer submission, submission and acceptance of offers, opening and evaluation of offers, contract signing, and other operations of importance for public tender procedure.
Article 28
The Agency shall announce public invitation for participation in the public tender.
Public invitation referred to in paragraph 1 of the present Article shall contain: name and other information regarding the entity to be privatized, ownership structure of capital, percentage of capital offered for sale, and other data relevant in informing of participants of the public tender.
Article 29
Minister in charge of privatization affairs shall form a commission, charged with monitoring the implementation of public tender sale (hereinafter: the tender commission).
The tender commission shall have a chairman and four members.
Upon Agency's proposal, the tender commission shall approve the results of the public tender sale within 15 days from the day of receipt of the proposal.
The tender commission shall make and submit a report of its activity to the Agency, within 15 days from the date of public tender sale completion.
The report, specified in paragraph 4 of the present Article, shall be submitted to the ministry in charge of privatization affairs, which, in turn, is required, upon its receipt, to inform the Government of the Republic of Serbia.
Article 30
The bidder shall pay a deposit for participation in the tender.
The bidder participating in the tender whose offer is proclaimed as the most favorable one, who fails to conclude the contract or pay the stipulated price, shall forfeit the right to the refund of the deposit, and the Agency shall call the second bidder in order to sign the contract.
Ministry in charge of privatization shall determine the value of deposit and the method of payment of deposit set forth in paragraph 1 of the present Article.
Article 31
(Deleted)
Article 32
After the public tender sale procedure has been conducted, the Agency shall inform all participants of the public tender of the results of the procedure and/or about determining the most favorable bidder.
A participant in the public tender has the right to object to the legality of conducted procedure.
The objection shall be submitted to the ministry in charge of privatization affairs, within 8 days from the date when the participant received notification of the results of the public tender.
Decision will be made within 8 days after the submission of the objection.
Decision reached on the objection is final.
Article 33
The Government of the Republic of Serbia shall prescribe a detailed procedure and mode for the sale of capital and property by applying the method of public tender.
Article 34
The sale of capital and/or property by public auction is the method of privatization through public contest of possible buyers in compliance with the determined conditions of sale.
Auction sale shall be organized by the Agency.
Article 35
The procedure of sale of capital and property by public auction contains: preparation of auction, submission and registration of participants, conducting the auction, contract conclusion and other operations relevant for the auction.
Article 36
Sale by means of public auction shall be conducted by the Auction Commission, which shall be formed by the Agency.
Auction Commission shall have a president and two members.
Article 37
Auction Commission shall conduct an auction, registry all entities that are entitled to participate at the auction, declare the auction unsuccessful, sign the record of auction and perform other operations of importance for auction.
Auction Commission shall compose a record about its work, as well as the report about the results of public auction and shall deliver this report to the Agency, the ministry in charge of privatization affairs, and the Government of the Republic of Serbia, within 15 days from the date of completion of sale by public auction.
Article 38
Agency shall announce a public invitation for the participation in auction.
Public invitation shall be announced at the earliest 30 days prior to the date of the auction.
Public invitation specified in paragraph 1 of the present Article shall contain: name of the entity to be privatized, location, address, date and time of the auction, amount and mode of paying a deposit for participation in auction, and other data relevant for conducting the auction.
Public invitation specified in paragraph 1 of the present Article may contain the obligation of buyer regarding investment in privatization subject, resolution of employees' issues, securing continuity of business operations, and environmental protection.
Public invitation is published via Internet on a special web site of the Government of the Republic of Serbia, in domestic and foreign mass media, which will be determined by the minister in charge of privatization affairs.
Article 39
Auction participants are obliged to pay the deposit.
The Ministry in charge of privatization affairs determines the amount and mode of payment of deposit specified in paragraph 1 of the present Article.
Article 39a
Public auction participant shall be entitled to object to the legality of the procedure that has been carried out, within eight days from the date on which the auction has been carried out.
The objection shall be submitted to the ministry in charge of privatization affairs, which shall be obliged to decide on the objection within eight days after the receipt of the objection.
The act by which the decision is rendered relating to the objection shall be final.
Article 40
The Government of the Republic of Serbia shall prescribe detailed procedure and mode for the sale of capital and property by applying the method of public auction.
Article 41
Contract of sale of capital and/or property shall contain provisions indicating the following: contracting parties, subject of sale, agreed price, payment period, the usage of the land, the mode, forms and time limit for investing by the buyer into the entity to be privatized for the purpose of performing the registered business activity, the mode of solving the issues of the employees, and other provisions agreed upon by the contracting parties.
The shares acquired by the buyer from new issues on the ground of the increase of capital of the entity to be privatized in course of performing contractual obligations shall be understood to mean the shares possessed by the entity to be privatized which are entirely paid for.
After the buyer of capital and/or property has fulfilled his obligations relating to the contract of sale of capital and/or property, which fact has to be proved by a certificate of the Agency, the entity to be privatized which acquired its own shares shall be obliged to transfer them without charge to the buyer of capital and/or property from whom he has acquired them.
The Agency shall forward to the registry in charge of keeping the account of securities the decision on the ground of which the own shares have to be recorded for the benefit of the entity to be privatized, as well as the decision on the ground of which the transfer of own shares has to be effected for the benefit of the buyer.
Should the contract of sale of capital and/or property be rescinded, shares specified in paragraph 2 of the present Article shall be transferred to the Share Fund, which shall sell them together with shares of the entity to be privatized that have been transferred to it in conformity with law. Proceeds effected through the sale of own shares acquired on the ground of the increase of capital by using new deposits, after deduction of sale expenditures, shall be transferred by the Share Fund to the buyer with whom the contract of sale of capital and/or property has been rescinded.
Disposal, regime and other legal transactions relating to own shares shall accordingly be subjected to provisions of the law regulating commercial companies.
The contract referred to in paragraph 1 of the present Article shall be understood to be concluded after being signed by the buyer and the Agency, and shall be certified in court.
The contract of sale of capital and/or property shall be dispatched by the Agency to the ministry in charge of finances for the purpose of records, and to the employees and the minority shareholders - at their request, for the purpose of information.
Article 41a
The contract of sale of capital and/or property shall be deemed rescinded due to failure to be executed, should the buyer even within a subsequently determined time limit:
1) fail to pay the stipulated price and/or any of the due installments;
2) fail to invest into the entity to be privatized in the mode, the form and the time limit stipulated in the contract;
3) handle the property of the entity to be privatized contrary to provisions of the contract;
4) fail to ensure the continuity in performing the registered business activity that has been the reason for establishing the entity to be privatized;
5) fail to produce a guarantee for the investment in the mode stipulated by the contract;
6) fail to carry out the provisions relating to the mode of solving the issues of the employees;
6a) fail, in course of a calendar year, to pay to employees in the entity to be privatized the total amount of minimal earnings, together with due contributions, for the nine month period at the least;
7) in other cases provided for by the contract.
In the event of the rescission of contract specified in paragraph 1 of the present Article, the employees of the entity to be privatized shall keep the ownership rights on the capital, acquired in conformity with the provisions of Articles 42 through 44 of the present Law, and the capital that was the subject of sale shall be transferred to the Share Fund.
In the event of rescission of contract of the sale of capital and/or property due to failure of the buyer of capital to fulfill contractual obligations, the buyer of capital, as the unfair party, shall have no right to the refund of amount paid as the price contracted, in order to protect the public interest.
Article 41b
Proceeds effected through the sale of capital in the privatization procedure shall be paid to the account of the Agency.
After covering the expenses of sale in the privatization procedure and particular compensation effected by concluding the contract of sale of capital and/or property (commission), as well as the priority settlement of creditors of the entity to be privatized where the restructuring has been carried out, the proceeds referred to in paragraph 1 of the present Article shall be paid in to the payment account of the budget of the Republic of Serbia.
The expenses of sale in terms of paragraph 2 of the present Article shall be deemed to understand the expenditures for engaging financial and legal advisers in the privatization procedure, costs of announcing of the public invitation and other information relevant for carrying out the privatization procedure, that are not at the charge of the entity to be privatized pursuant to the Law, as well as other expenditures.
Exceptionally, the proceeds effected from the sale of capital and property specified in Article 3, paragraph 5 of the present Law, after settling the sale expenditures specified in paragraph 3 of that Article, shall be paid to the special account of the budget of the Republic of Serbia.
The amount of commission specified in paragraph 1 of the present Article shall be prescribed by the minister in charge of privatization affairs.
Article 41c
The Government of the Republic of Serbia shall set fort the details of mode and conditions for settling commitments towards banks and other creditors of the legal entities that have commenced the privatization procedure, as well as the ones of legal entities that are in course of the restructuring in the privatization procedure.
Article 41d
Proceeds allocated for the elimination of damage inflicted by the entity to be privatized to the environment, prior to conclusion of the contract of sale of capital and/or property, shall be provided in the budget of the Republic of Serbia.
The Government of the Republic of Serbia shall set forth the details of mode and conditions for the use of proceeds specified in paragraph 1 of the present Article.
1.4. Temporary Representative of Capital
Article 41e
On the day of rescission of the contract of sale of capital and/or property, all ownership and management rights of the buyer shall cease to exist and the Share Fund shall nominate a temporary representative of capital (hereinafter: representative of capital) for the purpose of managing the entity to be privatized until the completion of sale of capital of the entity to be privatized.
The managing body of the entity to be privatized shall be obliged to render possible to the temporary representative of capital to manage the entity to be privatized, as well as to take all steps necessary for filing the changes into the Commercial Entity Registry and other appropriate registry.
The managing body of the entity to be privatized may not, until the election of a new managing body, render decisions relating to:
1) decrease and/or increase the capital of the commercial company;
2) acquisition and/or disposal of immovable property or property of considerable value;
3) reorganization of the commercial company;
4) pawn broking, mortgaging, and applying other kinds of property encumbrance;
5) renting or leasing property on a long-term basis;
6) set-off with creditors.
The decision rendered contrary to paragraph 3 of the present Article shall be null and void.
To be nominated as a representative of capital may be an individual among the shareholders in the entity to be privatized, as well as among persons outside the entity to be privatized.
The representative of capital shall manage the entity to be privatized in proportion to participation of capital that was the subject of sale in the total capital of the entity to be privatized, at the time of rescission of the contract of sale.
The representative of capital shall be entitled to remuneration for work and the refund of real expenses (hereinafter: remuneration and refund). The remuneration and the refund of expenses of the representative of capital shall be born by the entity to be privatized at the amount to be determined by the minister in charge for privatization affairs.
Registration of data on the temporary representative of capital and making public the registration shall be effected in conformity with the law regulating registration of commercial entities.
Article 41f
The representative of capital shall particularly be obliged to:
1) take necessary measures for protecting the property of the entity to be privatized;
2) take care as a good businessman about completion of the initiated and not completed affairs of the entity to be privatized, as well as about affairs that are necessary to prevent damage to the proceeds of the entity to be privatized;
3) perform, as the need be, other tasks.
The representative of capital shall perform the entrusted tasks independently and with the care of a good businessman, in conformity with the present Law.
The representative of capital shall submit to the Share Fun monthly reports on the condition of property and on running of business of the entity to be privatized. At the request by the Share Fund, the representative shall submit other reports as well, including financial reports.
Article 41g
The representative of capital shall be directly accountable by his own property for damage caused to the entity to be privatized, where the damage has taken place with intent or by gross negligence.
The claim for compensation of the damage caused shall fall under the statute of limitations five years after the date the damage has taken place.
The Share Fund shall acquit of duty the representative of capital after finding that the representative has failed to meet the obligations prescribed by the present Law. The representative may as well be acquitted of duty at his own request.
1.5. Ceding of Contract of Sale of Capital and/or Property
Article 41h
A buyer of capital (hereinafter: cession grantor), after obtaining agreement of the Agency, may cede the contract of sale of capital and/or property to a third party (hereinafter: receiver) under the conditions prescribed by the present Law and the law regulating contracts and torts.
The receiver may be a person meeting the prescribed conditions relating to the buyer of capital or property.
The cession grantor shall guarantee to the Agency that the receiver will meet his obligations on the ground of the ceded contract of sale of capital and/or property.
After the cessation of contract of sale of capital and/or property, the receiver shall become a holder of all the rights and obligations stemming from the contract of sale.
2. Transfer of Capital Free of Charge
2.1. Transfer of Shares to Employees
Article 42
Part of the capital of the entity to be privatized shall be transferred to employees, free of charge in the form of shares.
The employees, in terms of paragraph 1 of the present Article, shall mean citizens of the Republic of Serbia who are:
1) Current employees, or those who had previously been employed in the entity to be privatized;
2) Employees of a parent enterprise or subsidiary if the entity to be privatized is a subsidiary and/or a parent enterprise.
Previously employed persons in terms of paragraph 2. item 1. of et present Article shall include pensioners.
Article 43
The employees shall be entitled to acquire shares free of charge based upon each full year of employment in such entity.
The right to acquire shares free of charge may be exercised up to a maximum of 35 years of employment.
The right to acquire shares free of charge cannot be exercised:
1) in the entity to be privatized where restructuring has not been carried out;
2) on the ground of capital created in the entities to be privatized through conversion of claims of the Republic of Serbia into permanent deposit.
Employees in the entity to be privatized where restructuring has been carried out shall be entitled to money consideration out of the proceeds effected by the sale of capital in the privatization procedure which remained after the distribution specified in Article 41b, paragraph 2 of the present Law, and before making payment to the paying-in account of the budget of the Republic of Serbia.
In the case of bankruptcy or liquidation of the entity to be privatized where restructuring was been carried out, the employees shall be entitled to money consideration out of proceeds effected by the sale of socially-owned property representing the surplus of bankruptcy and/or liquidation estate.
Employees in terms of paragraphs 4) and 5) of the present Article shall be understood to mean the employees specified in Article 42 of the present Law.
The Government shall prescribe details of the mode of sale of the remaining socially owned property, as well as the criteria and mode of payment of money consideration specified in paragraphs 4) and 5) of the present Article.
Article 44
The entity to be privatized shall reach the decision on issuing the shares free of charge and shall inform the employees through a public invitation.
The decision on issuing the shares free of charge shall be rendered by entity to be privatized within the time limit determined by the Agency.
The public invitation specified in paragraph 1 of the present Article shall contain information on the date, time and location of registering of shares, the number of shares, the nominal value of the shares as well as other information in accordance with the decision on free of charge issuance of shares.
The public invitation specified in paragraph 1 of the present Article shall be announced on the notice board of the entity to be privatized, in the Official Herald of the Republic of Serbia, and in one daily newspaper.
The time limit for subscription of shares free of charge shall begin to run on the day of making public the invitation in a daily newspaper.
2.1.1. Transfer of Shares to the Employees in the Procedure of Sale by Public Auction
Article 45
The capital set apart for acquiring shares free of charge in the procedure of public auction sale of capital shall not exceed 30 per cent of the value of the capital to be privatized.
Article 46
The employees shall be entitled to acquire shares free of charge, in the procedure of sale through a public auction, in accordance with Article 43, paragraph 2 of the present Law, where the total nominal value equals to the Dinar equivalent of 200 EURO, using the official exchange rate on the date of announcing of the public invitation specified in Article 44, paragraph 1 of the present Law, for each full year of employment.
Article 47
(Deleted)
Article 48
The shares that remain after the sale through the method of public auction, as well as after the transfer of free shares under the conditions and in the mode prescribed in Article 45 and Article 46 of the present Law, shall be transferred to the Share Fund for sale.
2.1.2. Transfer of Shares to Employees in the Procedure of Sale by Public Tender
Article 49
The capital set apart for acquiring shares free of charge by the employees of the entity to be privatized by means of public tender, shall amount to a maximum of 15% of the capital being privatized.
In case referred to in paragraph 1 of this Article, the employees shall be entitled to free of charge acquisition of shares in the total nominal value of the Dinar equivalent of 200 EURO for each full year of employment, using the official exchange rate at the date of announcing the public invitation referred to in Article 44. paragraph 1 of the present Law, but for no more than 35 years of employment, regardless of the period in which the entity is privatized.
The shares that shall remain after the completion of the sale by public tender, as well as after the transfer of free shares, shall be recorded in the Privatization Registry.
2.1.3. Proportional Reduction of Entitlement to Acquisition of Shares Free of Charge
Article 50
If the value of capital allocated for acquisition of shares free of charge is less than the total nominal value of shares to be acquired by employees free of charge, the employees are entitled to a lesser number of shares, in proportion to the ratio of those values.
2.1.4. Rights Arising from Shares Transferred Free of Charge to Employees
Article 51
The shares transferred to employees free of charge are ordinary shares and shall be registered in the name of acquirer.
The shares shall bear the rights to:
1) Management;
2) Dividends;
3) Participation in the division of the bankruptcy estate of the entity after payments to creditors.
2.2. Transfer of Shares to Citizens
2.2.1. Recording of Shares in the Privatization Registry
Article 52*
The shares of the entity to be privatized through public tender shall be recorded in the Privatization Registry in an amount of at least 15% of the capital to be privatized.
The entity to be privatized is obliged, within 15 days from the date of fulfilling the conditions for registering of the shares, to inform the ministry in charge of privatization affairs for the purpose of registering the shares in the Privatization Registry.
Articles 53 and 54*
(Have ceased to be valid)
3. Decision on the Change of Form of Organization of Entities to Be Privatized
Article 55
After the completion of the sale of capital and the recording of shares in the Privatization Registry, the entity to be privatized that is not organized as a company of capital shall enact a decision on the change of form of organization into a company of capital.
The provision of paragraph 1 of the present Article shall not apply to the entity to be privatized whose organization form has been prescribed by law as a compulsory one.
The decision referred to in paragraph 1 of the present Article, apart from the Articles of association, set forth in the founding document, in accordance with the law regulating the legal status of companies, shall also contain provisions on other matters, which are relevant in organizing the entity to be privatized into a company of capital.
4. Costs of Privatization Procedure
Article 56
The costs of the Privatization Agency in the privatization procedure shall be borne by the entity to be privatized.
Minister in charge of privatization affairs shall determine the level of the costs referred to in paragraph 1 of the present Article.
Article 57
The provisions of the present Law relating to shares are equally applicable to stakes.
The Agency shall keep the files relating to portions and shall issue certificates to the entity to be privatized that is organized as a limited liability company.
Article 58
The Central Registry shall issue certificates to the entities that have been privatized, based on which the Book of Shareholders shall be kept.
The entity specified in paragraph 1 of this Article, on the basis of a certificate issued by the Central Registry, is required to make an entry of the new shareholder into the Book of Shareholders.
Rights from shares shall be proven by the certificate issued by the Central Registry.
Article 59
A commercial company whose share structure includes shares owned by the Share Fund or shares sold by that Fund pursuant to law, may not effect the change of legal form, and an open type joint-stock company may not become a closed type joint-stock company without consent of the Share Fund.
IV ALLOCATION OF PROCEEDS FROM PRIVATIZATION
Article 60
The proceeds referred to in Article 41b, paragraph 2 of the present Law shall be used to finance:
1) Republic's Fund in charge of Pension and Disability Insurance;
2) Stimulation of development;
3) Paying out of compensation to persons whose property was nationalized;
4) Repayment of debts incurred or guaranteed by the Republic of Serbia;
5) Special development program for economy and environmental protection, which is established by the local authority body;
6) Other purposes.
Article 61
Proceeds referred to in Article 41b, paragraph 2 of the present Law shall be distributed in the following mode:
1) 10 per cent of the proceeds shall be paid to the account of the Republic Fund in charge of Pension and Disability Insurance;
2) 50 per cent of the proceeds shall be allocated for the purpose of financing the restructuring and development of economy in the territory of the Republic of Serbia.
If the head office of the entity to be privatized is situated in the territory of the Autonomous Province of Vojvodina, 50 per cent of the proceeds shall be allocated for financing the restructuring and development of economy in the territory of the Autonomous Province of Vojvodina.
3) 5 per cent of the proceeds shall be allocated to the payment of compensation of persons whose property was nationalized;
4) 5 per cent of the proceeds shall be allocated for financing the development of infrastructure of the local self-government where the head office of the entity to be privatized is located.
Proceeds effected by the sale of capital and property specified in Article 3, paragraph 5 of the present Law shall be used for implementing the agreement relating to the matter of succession with former republics of the SFRY.
The Government of the Republic of Serbia shall determine the amount of proceeds to be allocated to financing the settling of debts incurred or guaranteed by the Republic of Serbia, and shall determine other allocations specified in Article 60, item 7 of the present Law, as well as the amount of proceeds assigned to these allocations.
V SUPERVISION OVER IMPLEMENTATION OF THE LAW
Article 62
The supervision over the implementation of the present Law and regulations enacted on the ground of the present Law shall be carried out by the ministry in charge of privatization affairs.
Supervision over the functioning of the Government of the Republic of Serbia and the ministry in charge of privatization affairs during the procedure of privatization shall be administered by the appropriate committee of the National Assembly of the Republic of Serbia.
Ministry in charge of privatization affairs is required to submit to the appropriate committee of the National Assembly of the Republic of Serbia, regular monthly reports on: progress of the privatization procedure, signed contracts on capital and property sale with submitted contracts, initiated privatization procedures, work of institutions in charge of carrying out of privatization procedure as set forth in Article 4 of the present Law, as well as to provide all necessary data and information upon request by the appropriate committee.
Article 63
The supervision specified in Article 62 paragraph 1 of the present Law includes the control over operations related to sale of shares from privatization procedure over the stock exchange, until the shares are not listed on the stock exchange.
Article 63a
The person responsible in the entity to be privatized who has reported untrue or incomplete data included in the privatization program shall be punished by imprisonment of from three months to five years and a fine up to 800,000 Dinars.
Article 64
The entity to be privatized shall be fined for a commercial infraction with a fine of from 200,000 to 3.000,000 Dinars if it:
1) Institutes the privatization procedure without the initiative for privatization of the competent body (Article 16 paragraph 1);
2) Fails to submit to the Agency the privatization initiative and prospectus in prescribed and timely mode (Article 16 paragraph 4);
3) Fails to submit the prospectus to the Agency within prescribed deadline (Article 16 paragraph 6);
4) Fails to submit privatization program or restructuring program to the Agency within the prescribed deadline (Article 22 paragraph 3 and Article 23 paragraph 4);
5) Fails to incorporate the correction or, respectively, the change into the privatization program within the deadline set by the Agency (Article 22 paragraph 5);
6) Fails to incorporate the correction or, respectively, the change into the restructuring program within the deadline set by the Agency (Article 23 paragraph 6);
7) After instituting the privatization procedure, proceeds contrary to the provisions of Article 25a, paragraph 2;
8) Transfers the shares free of charge to employees in violation of provisions specified in Articles 42 and 43 of the Law;
9) Violates the provisions of Article 44 of the present Law;
10) Violates the provisions of Articles 45 and 46 of the present law;
11) Violates the provisions on free of charge share transfer to the employees (Article 49 of the present Law);
12) Fails to record the shares in the Privatization Registry in the prescribed amount and deadline (Article 52 paragraphs 1 and 2.);
13) Fails to harmonize, within the deadline specified in Article 23 of the present Law, the data relating to the situation of shares with those kept in the Registry.
A fine of from 20,000 to 200,000 Dinars shall also be imposed on a person responsible in the entity to be privatized for the commercial infraction specified in paragraph 1 of the present Article.
Article 64a
A fine shall be imposed of from 100,000 to 300,000 Dinars shall be imposed for commercial infraction on a State creditor who lodges a request for compulsory collection or undertakes any other procedural measure aimed at collecting a debt from the entity to be privatized by applying the method of public tender and/or public auction (Article 20h, paragraph 5).
A fine of from 50,000 to 100,000 Dinars shall also be imposed for commercial infraction specified in paragraph 1 of the present Article on a responsible person in the State creditor.
Article 65
An individual who acquires shares free of charge, specified in Articles 42 and 54 of the present Law, based on false data, shall be punished for violation by a fine of from 5,000 to 50,000 Dinars.
In addition to the punishment for violation specified in paragraph 1 of the present Article, the property benefit acquired through violation shall be confiscated.
VII TRANSITIONAL AND CONCLUDING PROVISIONS
1. Enterprises which Carried out Privatization Pursuant to Previous Regulations
Article 66
An enterprise where privatization of a part of the socially-owned and state-owned capital has been performed in conformity with the provisions of the Law on Socially-owned Capital ("Official Gazette of the SFRY (Nos. 84/89 and 46/90), the Law on the Conditions and Procedure of Socially-owned Property Transformation Into Other Forms of Property ("Official Herald of the RS" Nos. 48/91, 75/91, 48/94 and 51/94), shall privatize the non-privatized part of socially-owned or state-owned capital in accordance with the present Law.
2. Transfer of Shares to the Share Fund and Trading of Shares
Article 67
The shares for which no public invitation has been made for their registration and sale prior to entering into force of the present Law in enterprises which have carried out the privatization of a part of socially and/or state owned capital in accordance with the Law on Ownership Transformation ("Official Herald of the RS" Nos. 32/97 and 10/2001) shall be transferred to the Share Fund.
Article 68
The shares of the shareholders who stopped payments of the subscribed shares, issued pursuant to the Law on Socially-owned Capital ("Official Gazette of the SFRY" Nos. 84/89 and 46/90), the Law on the Conditions and Procedure of the Socially-owned Property Transformation into Other Forms of Property ("Official Herald of the RS" Nos. 48/91, 75/91, 48/94 and 51/94), and the Law on Ownership Transformation ("Official Herald of the RS" Nos. 32/97 and 10/2001), shall be transferred to the Share Fund.
Article 69
The Share Fund shall sell the transferred shares, except for the shares for which the ministry in charge of privatization affairs decides to record in the Privatization registry.
Shares specified in paragraph 1 of this Article shall be sold through the public auction or through brokers at the stock exchange.
By exception to paragraph 2 of the present Article, shares may be sold through public tender or public offer in accordance with the law.
Article 70
The Share Fund shall conduct the sale of shares, which have been transferred to the Republic Fund for Pensions and Disability Insurance of Employees up to the date of entering into force of the present Law.
The proceeds from the sale of the shares of the Republic Fund for Pensions and Disability Insurance of Employees shall be transferred in their full amount to that Fund.
Article 71
The Share Fund shall be obliged to sell the shares specified under Article 67 through to Article 70 of the present Law no later than six years from the date entering into force of the present Law.
Article 72
The Share Fund may simultaneously sell all the shares in a single company, which it holds, as well as sell the shares on behalf of other shareholders.
The Share Fund simultaneously selling all the shares in a single company transferred to it, may send an invitation to other shareholders, in case they are interested in selling their shares in a joint offer.
Article 73
Trading of shares acquired pursuant to the Law on Socially-owned Capital ("Official Gazette of the SFRY" No. 84/89 and 46/90), the Law on the Conditions and Procedure of the Socially-owned Property Transformation into Other Forms of Property ("Official Gazette of the RS" Nos. 48/91, 75/91, 48/94 and 51/94) and the Law on Ownership Transformation ("Official Herald of the RS" Nos. 32/97 and 10/2001) is free and shall be conducted through the stock exchange.
The shares referred to in paragraph 1 of the present Article cannot be traded from the date of entering into force of the present Law, if the data about the condition of shares in the enterprise are not harmonized with the data in Central Registry, and/or Temporary Registry.
Enterprises shall be obliged to harmonize data referred to in paragraph 2 of the present Article within four months from the date of entering into force of the present Law.
Should the enterprises fail to harmonize the data within the deadline specified in paragraph 3 of the present Article, the Privatization Agency shall carry out the harmonization of data at the expense of the enterprise.
The shareholders who have acquired share on the ground of paragraph 1 of the present Article shall not be entitled to preferred purchase.
3. Rights to Shares Free of Charge
Article 74
The persons who exercised their right to acquiring shares free of charge in accordance with the Law on Ownership Transformation ("Official Herald of the RS" Nos. 32/97 and 10/2001) do not have the same right under the present Law.
Article 75
The entity to be privatized, which received the ruling on capital evaluation pursuant to the Law on Ownership Transformation ("Official Herald of RS" Nos. 32/97 and 10/2001), shall not be obliged to conduct capital valuation.
The provision of paragraph 1 of the present Article applies also to capital valuations, which prior to the date of entry into force of the present Law were submitted to the Directorate for Capital Valuation for the purpose of control and verification, and were found by the ministry in charge of privatization affairs to have been done in accordance with the Law specified in paragraph 1 of the present Article.
5. Temporary Registry of Shares
Article 76
Until the formation of the Central Registry, the Temporary Registry will be formed as a part of the Agency.
The Temporary Registry shall record data on shareholders, type of shares, number of shares, as well as change of this data.
The Temporary Registry shall issue certificates for recording the data referred to in paragraph 2 of the present Article into the Book of Shareholders of the entities privatized.
The Minister in charge of privatization affairs shall set forth in a detailed mode the content and mode of keeping of the Temporary Registry.
6. Abolishment of the Directorate for Evaluation of Capital
Article 77
The Directorate for evaluation of capital shall cease to work at the date of entering into force of the present Law.
The ministry in charge of privatization affairs will continue to control and to verify the procedure of ownership transformation and the procedure of capital valuation that have been started but not completed, as well as to control the capital valuation of entities subjected to status change.
7. Termination of Effectiveness of Regulations
Article 78
On the date of entering into force of the present Law, the Law on Ownership Transformation ("Official Herald of RS" Nos. 32/97 and 10/2001) and the ensuing regulations shall cease to be valid.
Article 79
The present Law shall enter into force on the eighth day following the date of its publication in the "Official Herald of the Republic of Serbia".
Independent Articles of the Law on Amending
the Law on Privatization
("Official Herald of the RS", No. 18/2003)
Article 22
An enterprise that until the date of entering into force of the present Law has carried out the privatization of over 50 per cent of the socially-owned capital pursuant to provisions of the Law on the Socially-owned Capital ("Official Gazette of the SFRY", Nos. 84/89 and 46/90), and of the Law on the Conditions and Procedure of Socially-owned Property Transformation into Other Forms of Property ("Official Herald of the RS", Nos. 48/91, 75/91, 48/94, and 51/94), shall transfer the 70 per cent of the non-privatized portion of the socially-owned capital to the Share Fund.
In the case referred to in paragraph 1 of the present Article, 30 per cent of the non-privatized portion of the socially-owned capital shall be transferred free of charge to the employees, pursuant to provisions of Article 42 through 44 of the present Law, after the sale of capital from the Share Fund has been carried out.
The provisions referred to in paragraph 1 and 2 of the present Article shall not apply to entities to be privatized for which the Agency, until the entering into force of the present Law, has rendered a decision on the method of privatization of the remaining portion of the socially-owned capital.
Article 23
An enterprise shall harmonize the data relating to the situation of shares acquired pursuant to the Law on the Socially-owned Capital ("Official Gazette of the SFRY", Nos. 84/89 and 46/90), the Law on the Conditions and Procedure of Socially-owned Property Transformation into Other Forms of Property ("Official Herald of the RS", Nos. 48/91, 75/91, 48/94, and 51/94), and the Law on Property Transformation)"Official Herald of the RS", Nos. 32/97 and 10/2001), with the data kept in the Temporary Registry, within four months from the date of entering into force of the present Law.
Article 24
The procedure of sale of capital and/or property that is not completed until the date of entering into force of the present Law, shall be continued pursuant to provisions that have been in force at the time of announcing the public invitation for participating at the public tender and/or public auction.
Article 25
In the entities to be privatized where a decision on the sale of capital and/or property by applying the public auction method has been rendered within the period from 7th January 2003 through the date of entering into force of the present Law, the employees shall be entitled to shares free of charge up to 30 per cent of the capital to be privatized.
Article 26
The present Law shall enter into force on the eighth day following the date of its publication in the "Official Herald of the Republic of Serbia".
Independent Articles of the Law on Amending
the Law on Privatization
("Official Herald of the RS", No.45/2005)
Article 28
Receipts effected by selling bonds prior to the term of their maturity, if the means of payment are expressed in bonds on the ground of unpaid foreign exchange savings of citizens issued to individuals who are citizens of the Republic of Serbia, and which are not due on the day of sale of capital or property, shall be allocated in conformity with Article 61 of the Law.
Article 29
Enterprises, financial organizations or institutions where the Federal Republic of Yugoslavia or its agencies have the founding rights, that continue their work and for which the founding rights are regulated by an agreement between the member states, shall be privatized according to the regulations of a member state in whose territory such enterprise, financial organization or institution has its head office.
Article 30
The provisions of the present Law relating to writing off a debt shall apply to other creditors as well, who within the framework of privatization of the entity to be privatized write off a debt to the entity to be privatized, in order to settle claims by receipts effected from the sale of entity's capital or property.
Article 31
It shall not be possible to order or carry out a compulsory execution or any other execution procedure measure against an entity to be privatized, and/or against its property, for which a decision on restructuring is rendered until the date of entering into force of the present Law, for the purpose of settling a claim within one year from the day of its entering into force.
If a decision on restructuring the entity to be privatized is not rendered until the date of entering into force of the present Law, the compulsory execution shall not be ordered or carried out against the entity to be privatized and/or against its property, within two years from the date of rendering the decision on restructuring.
The proceedings of compulsory execution that are in course shall be suspended.
Article 32
The provisions of the present Law shall apply to an entity to be privatized which is in the course of the privatization procedure, for which the Agency, until the day of entering into force of the present Law, has not rendered a decision on accepting the restructuring program, as well as to commercial companies where the portion of shares in the total number of shares of a commercial company, transferred to the Share Fund and the Republic Old Age and Disability Insurance Fund, is equal or surpasses 33.4 %.
Article 33
The sale of capital and/or property of an entity to be privatized which is in the course of privatization procedure by applying the public tender method, and which has the commitments toward a State creditor, shall be carried out according to the provisions of the present Law, if a bid to the tender has not been put until its the entering into force.
Article 34
The sale of capital and/or property of an entity to be privatized which is in course of privatization procedure by applying the public auction method, and that has commitments toward a State creditor, for which the Agency, until the day of entering into force of the present Law, has not rendered a decision on accepting the restructuring program, shall be carried out according to the provisions of the present Law.
Article 35
The mode specified in Article 28 of the present Law shall apply also to the allocation of receipts effected through the sale of bonds on the ground of unpaid foreign currency savings of citizens issued to individuals who are citizens of the Republic of Serbia, and that are not matured on the day of sale of capital or property, which receipts have not been allocated until the day of entering into force of the present Law.
Article 36
A public enterprise, the Tax Administration, the Republic Old Age and Disability Fund, the Republic Institution for Health Service Insurance, the Republic Directorate for Commodity Reserves, the Fund for Development of the Republic of Serbia, and other republic agencies and organizations (hereinafter: State creditor) shall be obliged to write off a debt toward a commercial company whose portion of shares is transferred to the Share Fund in conformity with the Law on Ownership Transformation ("Official Herald of the RS", No. 32/97), in its entirety, and shall settle their claim from the receipts effected in the sale of shares of the commercial company owned by the Share Fund.
Considered also as a State creditor shall be the Agency for Insuring the Deposit, Financial Rehabilitation, Bankruptcy and Liquidation of Banks, when performing the function of a public receiver and/or a liquidation manager of banks going bankrupt, and/or in course of liquidation, and when managing, on behalf and for the account of the Republic of Serbia, the claims of the Republic of Serbia on the ground of assumed foreign commitments.
The provisions specified in paragraph 1 of the present Article shall apply if a portion of shares transferred to the Share Fund and the Republic Old Age and Disability Fund in the total number of shares of the commercial company is equal or surpasses 33.4%.
Article 37
The present Law shall enter into force on the eighth day of its publication in the "Official Herald of the Republic of Serbia".
Independent Articles of the Law on Amending
the Law on Privatization
("Official Herald of the RS", No. 123/2007)
Article 26
A creditor who has written off a debt to a commercial company, where the portion of shares of the Share Fund and the Republic Old Age and Disability Fund, transferred to them pursuant to the Law on Ownership Transformation ("Official Herald of the RS", No. 32/97), within the total number of shares of that commercial company is equal or surpasses 33.4%, shall settle its claim from the proceeds effected through the sale of these shares.
Article 27
Entity to be privatized which on the day of entering into force of the present Law owns the minority socially-owned capital shall transfer 70% of that capital to the Share Fund.
In the case specified in paragraph 1 of the present Article, 30% of the socially-owned capital, after carrying out the sale of capital from the Share Fund, shall be transferred free of charge to employees pursuant to provisions of Articles 42 through 44 of the Law on Privatization ("Official Herald of the RS", Nos. 38/2001, 18/2003, and 45/2005).
Provisions of paragraphs 1) and 2) of the present Law shall not apply to:
1) the subordinated (dependent) company, having in the structure of capital the minority socially-owned capital which, together with the capital owned by the controlling (parent) company with the majority socially-owned and/or State-owned capital, makes in that dependent enterprise the majority capital;
2) the entity to be privatized for which the Agency, until the day of entering into force of the present Law, has rendered a decision on the method of privatization of the socially-owned capital.
Article 28
In conformity with regulations covering the matter of registration of commercial entities, the Agency may lodge an application for entering in the Registry of Commercial Entities of the enterprises operating with socially-owned capital, which enterprises have failed to lodge such application until the date of entering into force of the present Law.
Article 29
The procedure of privatization initiated until the day of entering into force of the present Law shall be continued under the provisions of the present Law.
Article 30
The present Law shall enter into force on the eighth day of its publication in the "Official Herald of the Republic of Serbia".