LAWON FOREIGN CURRENCY TRANSACTIONS("Official Herald of the Republic of Serbia", Nos. 62/2006 and 31/2011) |
Article 1
The present Law shall govern:
1) payments, collections and transfers between residents and non-residents in foreign means of payment and dinars;
2) payments, collections and transfers between residents in foreign means of payment;
3) purchase and sale of means of payment between residents and non-residents, as well as purchase and sale of foreign means of payment between residents;
4) unilateral transfers of means of payment from and into the Republic of Serbia (hereinafter referred to as: the Republic) which do not have the characteristics of transactions performed between residents and non-residents;
5) current and deposit accounts of residents abroad and of residents and non-residents in the Republic;
6) credit facility operations in the Republic between banks and residents in foreign exchange, and between banks and non-residents in dinars, as well as international credit facility operations.
The establishment of Foreign Currency Inspectorate, as an administration body within the ministry in charge of finance, and its competences and organization are stipulated by the present Law.
Article 2
For the purposes of the present Law:
(1) Residents shall be:
1) legal entity registered in accordance with regulations and headquartered in the Republic;
2) entrepreneur - physical entity registered in the Republic and pursuing a legally allowed activity as a form of profession for the purpose of making profit;
3) branch of a foreign legal entity entered into the register with the competent body in the Republic;
4) physical entity residing in the Republic, except for a physical entity with temporary residence abroad for over a year;
5) physical entity - foreign citizen residing in the Republic on the basis of residence permit, and/or work visa for over a year, except for diplomatic and consular representatives of foreign countries and members of their families;
6) state body and organization, beneficiaries of budget funds of the Republic, beneficiaries of funds of mandatory social insurance organizations, and beneficiaries of local government budget funds;
7) diplomatic, consular or other representative office abroad financed from the budget of the Republic, domestic citizens employed in these offices, as well their family members.
(2) Non-residents shall be all persons not listed in Item (1) of the present Article.
(3) Bank shall be a resident - a joint stock company headquartered in the Republic, which is licensed for work by the National Bank of Serbia and carries out deposit and credit facility transactions, payment and credit facility transactions with foreign countries, as well as other activities in accordance with the law.
(4) Means of payment shall be dinars and foreign means of payment.
(5) Foreign means of payment shall be:
1) foreign currency - external claims denominated in foreign currency;
2) foreign cash - claims in cash, and/or banknotes and coins denominated in foreign currency.
(6) Payment instruments shall be: cheques, bills of exchange, letters of credit, remittances, payment cards and other payment instruments - claims from the issuer - non-resident, denominated in foreign currency and cashable in foreign currency.
(7) Securities shall be securities determined by the law governing the market of securities and other financial instruments.
(8) Domestic securities shall be securities issued by the resident in the domestic and foreign market, and may also be denominated in foreign currency if prescribed by a special law.
(9) Foreign securities shall be securities issued by a non-resident.
(10) Long-term securities shall be debt securities with maturity longer than one year.
(11) Short-term securities shall be debt securities with maturity up to one year.
(12) Financial derivates shall be financial instruments as defined by the law governing the market of securities and other financial instruments.
(13) Foreign currency market shall be the market where foreign currency and foreign cash are purchased and sold.
(14) Exchange operations shall be the activities of purchase and sale of foreign cash and cheques denominated in foreign currency, from and to physical entities.
(15) Current transactions shall be transactions concluded between residents and non-residents and the purpose of which is not the transfer of capital.
(16) Capital transactions shall be transactions between residents and non-residents and the purpose of which is the transfer of capital.
Capital transactions referred to in paragraph 1 of the present Item shall be the following:
- direct investments,
- investments in real estate,
- transactions with securities,
- transactions with financial derivatives,
- transactions with investment and voluntary pension funds,
- credit facility operations,
- guarantee transactions,
- deposit operations,
- operations based on insurance contract in line with the law governing insurance,
- unilateral transfers of means of payment (personal and physical).
(17) Direct investments shall be resident’s investments into legal entity abroad and non-resident’s investments into legal entity in the Republic for the purpose of getting included in the management of such legal entity’s activities.
For the purposes of paragraph 1 of the present Item, investments shall be understood as: incorporation of legal entity, branch or representative office, purchase of shares or stake in the capital of legal entity, additional capital formation of the legal entity as well as any other form of investment whereby the investor acquires more than a 10% stake in share capital, and/or more than 10% of voting rights, in a period not longer than one year after the first investment into that legal entity in the event of successive investments (for the purpose of reaching the threshold of 10%).
Investments in terms of Paragraph 1 of this Item shall also include credit facilities and loans with a maturity of five years or longer if they have the characteristics of a subordinated claim (subordinated credit facilities and loans).
(18) Transactions with securities shall be transactions with long-term and short-term securities and equity securities.
(19) Credit facility operations shall be credit facility operations in the Republic and international credit facility operations.
(20) Credit facility operations in the Republic shall be credit facilities that the bank approves to a resident in foreign currency.
(21) International credit facility operations shall be credit facilities and loans between resident and non-resident concluded in foreign currency, whereby the credit facilities shall be approved by a bank or foreign bank.
Credit facility operations in Paragraph 1 of this Item are:
- Commercial loans that the seller approves to the buyer in the sale of goods or provision of services in foreign trade with the agreed deferred payment up to one year with interest, or with the agreed deferred payment over one year;
- Commodity credit facilities and loans that the creditor or the lender approves the debtor to finance foreign trade of goods and services. The creditor or lender shall execute such commodity credit facilities and loans by direct payment to the supplier of goods, or provider of services in foreign trade, at the order of the debtor;
- Financial credit facilities and loans which the creditor, or lender approves the debtor by making the funds available by payment to the account of debtor.
Commodity and financial credit facilities and loans to the debtor may be approved by one creditor, or lender or group of creditors or lenders (syndicated commodity or financial credit or loan).
Foreign credit operations under Paragraph 1 of this Item are also:
- Subordinated credit facilities and loans and loans under Item (17), Paragraph 3 of this article,
- Short-term termed bank deposits with maturities up to one year between the bank and foreign bank. Such bank deposits shall be used in a way that the bank - creditor pays funds to the account of the bank - debtor,
- Short-term bank credit facility lines with maturities up to one year between the bank and foreign bank. Such bank deposits shall be used in a way that the bank - creditor makes payments by order of the bank - debtor,
- Exports and imports of goods and services, which are under this law, considered as foreign credit facility transactions,
- Other operations that have features of a foreign credit facility transaction.
Following operations shall also be considered as foreign credit facility operations under Paragraph 1 of this Item:
- Bank guarantees, endorsements and other forms of surety that the bank gives the non-residents - creditors for credit facilities taken by residents from abroad and for credit facility transactions between two non-residents abroad,
- Sureties and other collaterals that the resident - legal entity and entrepreneur gives to the non-resident - creditor under credit facilities taken abroad by residents, as well as sureties and other collaterals that a resident - legal entity gives under credit facility transactions between two non-residents abroad.
Credit facilities and loans in dinars, which, in accordance with the provisions of this Law, international financial organizations and development banks or financial institutions whose founders are foreign states approve to residents, as well as loans in dinars that the banks approve to non-residents, shall also be considered as foreign credit facility transactions.
Credit facility operations referred to in this Item are filed at the National Bank of Serbia.
(21a) Guarantee operations that the bank conducts in accordance with the regulations on banks also include:
- Issuance of guarantees, endorsements and other forms of surety at the order of a resident or nonresident under current and capital transactions with foreign countries, except the guarantees referred to in Item (21) Paragraph 5, first line of this Article, and obtaining guarantees of foreign banks and guarantees and sureties of non-residents under these transactions,
- Obtaining guarantees from foreign banks and guarantees and sureties of non-residents as collaterals for bank’s receivable from a resident.
Following operations shall also be considered as guarantee operations:
- Sureties given by the resident legal entity to non-resident under foreign trade of goods and services and execution of investment works in the Republic,
- Guarantees and sureties obtained by a resident legal entity from non-resident under foreign trade of goods and services and execution of investment works abroad, as well as under a transaction with another resident legal entity in the Republic.
(22) For the purposes of the present Law, deposit operations shall be operations based on the deposit contract concluded between the non-resident and the bank, as well as between the resident and the bank abroad.
(23) Operations based on insurance contract shall encompass payments of premiums and insured sums on the basis of contract concluded between the insurance company - non-resident and resident as the insured, as well as between the insurance company - resident and non-resident as the insured, in line with the law governing insurance.
(24) Currency clause shall mean contracting the value of liability in foreign currency (liability currency) in the Republic, whereas payment and collection under such contracts are executed in dinars (payment currency).
(25) Personal transfer of means of payment shall be the transfer of funds from the Republic to abroad or from abroad to the Republic which is not based on the execution of the activity - it shall be performed between a resident physical entity and non-resident, and shall include gifts and aid, inheritance, annuities, settlement of debt of immigrants in the Republic and the transfer of immigrants’ funds to abroad.
(26) Physical transfer of means of payment shall be any transfer of cash in dinars, as well as transfer of foreign cash and securities from the Republic and into the Republic.
Article 3
Payment, collection and transfers under current transactions between residents and non-residents shall be executed freely, in line with the present Law.
Payments and transfers under current transactions shall include, without restrictions, the following:
1) payments under external trade activities and other external current transactions as provided by the law governing foreign trade;
2) payments with regard to the repayment of a part of the principal and interests on credit facilities;
3) return of investment funds, as well as transfer abroad and repatriation of profit from direct investments;
4) transfers in favour of physical persons with regard to: pensions, disability pensions and other social contributions, transfers with regard to taxes and fees, interstate cooperation, liquidated damages with regard to the insurance contract, transfers with regard to valid and enforceable decisions, transfers with regard to gains from lotteries, concession compensations, subscriptions and penalties, and other transfers, as well as transfers with regard to the amount of costs for family sustenance.
Article 4
Export and import of goods or services that were not billed or paid within a period longer than one year from the day of performed export or import, as well as charged in advance, or paid goods or services that have not been exported, or imported within a period longer than one year from the day of charging or payment, shall be considered as foreign credit facility operations.
National Bank of Serbia on the proposal of the Ministry in charge of finance operations shall prescribe the conditions and manner of filing credit facility operations under Paragraph 1 of this Article.
Article 5
(Erased)
Article 6
Resident - legal entity and entrepreneur may set off debts and claims on the basis of realized foreign trade transactions of goods and services.
The Government shall prescribe the conditions, manner of conducting and reporting to the Foreign Currency Inspectorate on transactions in Paragraph 1 of this Article.
Bank, resident - legal entity and entrepreneur may set-off debts and claims arising from credit facility transactions with foreign countries in foreign currency with a claims and debts arising from these transactions, realized foreign trade of goods and services as well as from direct investments and investments in real estate in Articles 11 and 12 of this law, under conditions and in the manner prescribed by the Government on the proposal of the National Bank of Serbia.
Ministry in charge of finance affairs shall decide by decree on fulfillment of the conditions for set-off mentioned in Paragraph 3 of this Article, based on of confirmation of the National Bank of Serbia on the amount of debts and claims in these matters.
Decree of the Ministry in charge of finance affairs in Paragraph 4 of this Article is final and no administrative litigation could be brought against it.
Article 7
Banks, and/or residents, except for residents - physical entities, may purchase or sell, and/or pay or collect claims and payables arising from residents’ foreign trade activities.
Activities referred to in paragraph 1 of the present Article may be performed only on the basis of contract concluded in writing between all participants in the activity.
Banks shall be obligated to inform the National Bank of Serbia on the activities referred to in paragraph 1 of the present Article in the manner and deadlines prescribed by the National Bank of Serbia.
The Government shall prescribe to residents detailed conditions and manner of executing the activities referred to in paragraph 1 of the present Article and reporting on them to the Foreign Currency Inspectorate.
Non-residents may purchase claims and payables arising from foreign trade activities only under terms and conditions prescribed by the Government.
Article 8
Resident cannot execute collection, payment or issue a payment order, and/or execute transfer to non-resident, on the basis of contract where the actual price has not been stated or on the basis of untrue document.
Article 8a
The Government regulates in detail the conditions and manner under which residents - legal entities and entrepreneurs, who operate with non-residents based in countries or territories that have privileged tax systems, or with which there is no adequate exchange of information, or wherein the business and property information are protected by strict confidentiality rules, report to the Foreign Currency Inspectorate on payments, collections and transfer of funds.
List of countries or territories referred to in Paragraph 1 of this Article shall be determined by the Government on the proposal of the Ministry in charge of finance affairs, based on the list of relevant international organizations.
Article 9
A resident reports to the Foreign Currency Inspectorate on profit earned on the basis of direct investment, as well as on the financial effect per each sale transaction of paid goods positioned abroad and is delivered directly abroad.
The Government shall prescribe more detailed conditions, terms and manner of reporting under Paragraph 1 of this Article.
Article 10
Payment, collection and transfer under capital transactions between residents and non-residents shall be executed freely, unless otherwise stipulated by the present Law.
1. Direct Investments of Residents and Non-Residents
Article 11
Payment and transfer of capital with regard to direct investments of residents - legal entities, entrepreneurs and physical entities to abroad shall be executed freely, in line with the law governing foreign trade.
Payment and transfer of capital with regard to direct investments of non-residents in the Republic shall be executed freely in line with the law governing foreign investments.
Article 12
Payments for the purpose of acquiring ownership of real estate of residents abroad and non-residents in the Republic shall be executed freely, in line with the law governing legal ownership relations.
The National Bank of Serbia shall prescribe the deadlines and manner of reporting on the activities referred to in the present Article.
3. Transactions with Securities
Article 13
Residents - legal entities, entrepreneurs and natural persons may effect payment for the purchase of foreign equity securities that are not direct investments.
Residents in Paragraph 1 of this Article may effect payment for the purchase of long-term debt securities issued by member states of the European Union, OECD, international financial institutions and development banks or financial institutions founded by foreign states.
Residents referred to in paragraph 1 of the present Article may effect payment for the purpose of purchasing other long-term debt securities abroad whose level of risk (rating) and issuer country shall be prescribed by the National Bank of Serbia.
Residents may effect payment for the purpose of purchasing domestic securities denominated in foreign currency and issued abroad.
The National Bank of Serbia shall prescribe the deadlines and manner of reporting on the activities referred to in the present Article.
Article 14
Non-residents may effect payment for the purpose of purchasing long-term debt securities in the Republic, as well as equities in line with the law governing the market of securities.
The National Bank of Serbia shall prescribe the deadlines and manner of reporting on the activities referred to in paragraph 1 of the present Article.
Article 15
Payments for the purpose of purchasing foreign short-term securities in the foreign and domestic market shall be effected by the National Bank of Serbia, whereas banks shall effect such payments under terms and conditions prescribed by the National Bank of Serbia.
Residents, except for residents referred to in paragraph 1 of the present Article, cannot effect payment for the purpose of purchasing foreign short-term securities.
Non-residents cannot make payments for the purchase of short-term securities in the Republic.
4. Transactions with Financial Derivates
Article 16
Payment, collection, transfer, set-off, as well as reporting on transactions with financial derivatives are carried out under conditions and in the manner prescribed by the National Bank of Serbia.
5. Operations with Investment and Voluntary Pension Funds
Article 17
Residents - investment and voluntary pension fund management companies may effect payment for the purpose of investing abroad, in line with the provisions of the law governing activities with investment and voluntary pension funds.
Non-residents may effect payment for the purpose of investing into investment funds and voluntary pension funds in the Republic, in line with the provisions of laws governing activities with investment and voluntary pension funds.
6. International Credit facility Operations
Article 18
Credit facility transactions in foreign currency in Article 2 Item (21) Paragraphs 1 to 3, Paragraph 4 in the first and third lines and Paragraph 5 of this law, a bank, a resident - legal entity or entrepreneur conclude in written form with a non-resident - a bank, a legal entity and natural person.
International financial organizations and development banks or financial institutions founded by foreign states can approve the bank, resident - legal entity and entrepreneur credit facilities and loans in dinars in Article 2 Item (21) Paragraph 6 of this law, under conditions and in manner prescribed by the National Bank of Serbia. Banks may approve credit facilities to non-residents in dinars under the conditions and in manner prescribed by the National Bank of Serbia.
Bank may enter into credit facility transactions with foreign countries in Article 2 Item (21) of this law in its name and for its own account, in its name and for the account of others, and in others’ name and for the others’ account. The Bank may issue bank guarantees, endorsements and other forms of surety for the benefit of non-resident - creditor for credit facilities taken by residents from abroad and to obtain guarantees, sureties and other for of collateral from non-residents for credit facilities that it approves to non-residents, while guarantees, endorsements and other forms of surety for credit facility transactions between two non-residents abroad it may approve under the condition that it contracts and obtains from the non-resident instruments of payment collateral.
Bank may participate in the syndicated financial credit facility or loan which a group of foreign creditors approves to the non-resident provided that it contracts and obtains from the non-resident instruments of payment collateral, under the terms of Article 21 of this law in such credit facility or loan that is approved a resident.
Bank may participate in the syndicated financial credit facility or loan which a group of foreign creditors approves to the resident - legal entity or entrepreneur up to the amount that would be used to pay for imports of goods and services from abroad, while a bank whose participation is not less than 10% of the total amount of syndicated credit facility or loan, may participate without restriction in this syndicated financial credit facility or loans for other purposes too.
Bank may purchase receivables from non-residents - participants in the syndicated financial credit facility or loan which a group of foreign creditors approves to the debtor, subject to Paragraphs 4 and 5 of this Article, as well as sell to the non-resident its receivable on this basis.
Bank may participate in the syndicated commodity credit facility approved to resident or nonresident, purchase receivable from non-resident - participant in such syndicated credit facility and sell to the non-resident to its receivable on this basis.
Resident - legal entity can take credit facilities and loans from abroad and approve to non-residents commercial loans in its name and for its own account, and in its name and for the account of others, while it may approve the financial loans to non-residents in its name and for its own account in accordance with Article 23 of this law. Resident - legal entity may provide surety and other forms of collateral in favor of non-resident - creditor for loans taken by residents from abroad and obtain guarantees, sureties and other form of collateral from non-residents for credit facilities that it approves to non-residents, while sureties and other means of collateral under credit facility transactions between two non-residents abroad it make approve in accordance with Article 23 of this law.
Resident - legal entity, established by the Republic in line with a special law with the purpose to finance exports, may conduct credit facility transactions with foreign countries in accordance with that special law.
Resident - entrepreneur may in its own and for its own account take credit facilities and loans from abroad, give surety and other forms of collateral in favor of non-resident - creditor for credit facilities taken by residents from abroad, approve to non-resident commercial loans and obtains guarantees, sureties and other forms of collateral from non-residents for credit facilities it approves to non-residents.
Bank, resident - legal entity and entrepreneur can enter into other transactions that have the characteristics of foreign credit facility transactions under Article 2 Item (21) Paragraph 4 in the fifth line of this law in conformity with the regulation of the National Bank of Serbia adopted on the basis of Article 24 of this law.
Resident - a branch of a foreign legal entity may take from the non-resident - founder only subordinated credit facilities and loans from Article 2 Item (17) Paragraph 3 of this law, while a resident - natural person may not enter into foreign credit facility transactions.
Non-resident may give guarantee, surety and other forms of collateral without limitation, in favor of non-resident - creditor for credit facilities taken by residents abroad.
Guarantees, sureties and other forms of collateral in this Article are provided in the currency form the main credit facility transaction, whose proper performance they ensure.
Article 19
Resident who concludes international credit facility operations contract shall be responsible for the execution of obligations arising from the contract, as well as resident under whose authorization and for whose account the contract was concluded, and/or the bank and resident - legal entity that purchases claims from the resident and/or assumes debt towards the non-resident with regard to international credit facility operations.
The Republic and the National Bank of Serbia shall not guarantee for the execution of obligations arising from international credit facility operations, except in cases envisaged by law.
The international credit facility operations contract shall be considered null and void if concluded in breach of provisions of paragraph 2 of the present Article.
Article 20
The bank, as well as resident - legal entity may purchase from the resident claims with regard to credit facility approved to non-resident, and assume resident’s debt towards the non-resident with regard to international credit facility operations.
Operations referred to in paragraph 1 of the present Article may be performed only on the basis of contract concluded in writing between all participants in the activity.
Non-residents may purchase from residents claims and payables with regard to international credit facility operations, only under the conditions and in the manner prescribed by the National Bank of Serbia.
Article 21
Financial credit facilities taken from abroad may be used for the payment of import of goods and services and financing of the performance of construction works abroad, concluded by residents within the scope of their activity, and for the repayment of previously used external credit facilities (refinancing).
Residents may take financial credit facilities from abroad for other purposes as well, in the manner and under the conditions determined by the National Bank of Serbia.
Article 22
The National Bank of Serbia may determine the volume and conditions under which banks may take short-term termed bank deposits and short-term bank credit facility lines from foreign banks.
Article 23
Residents - legal entities may approve financial credit facilities to non-residents from the profit realized by the residents’ business abroad, under the condition that the non-resident - debtor in credit facility operations is in majority ownership of the resident.
Under the conditions referred to in paragraph 1 of the present Article, residents - legal entities may grant warranties for credit facility operations between two non-residents abroad.
When performing international credit facility operations referred to in paragraphs 1 and 2 of the present Article, the resident - legal entity shall be obliged to contract and acquire from the non-resident payment collateral instruments.
Provisions of paragraph 3 of the present Article shall also apply to the bank that approves a credit facility to the foreign person or issues a bank guarantee for credit facility operations between two non-residents abroad.
The National Bank of Serbia may prescribe the manner and conditions under which banks and residents - legal entities may approve financial credit facilities to non-residents, and issue bank guarantees and warranties for credit facility operations between two non-residents abroad.
Article 24
The National Bank of Serbia shall prescribe the manner, deadlines and forms for recording international credit facility operations.
Lending in Foreign Currency between Residents in the Republic
Article 25
Banks may approve to residents - legal entities and entrepreneurs credit facilities in foreign currency for the payment of import of goods and services from abroad.
Banks may approve to residents - physical entities credit facilities in foreign currency for the purchase of real estate in the country.
Guarantee transactions
Article 26
Bank, in accordance with the regulations on banks and this law, issues guarantees, endorsements and other forms of surety for current and capital transactions between residents and non-residents and obtains guarantees of foreign banks, and guarantees and sureties of non-residents under these transactions.
Bank may, in accordance with the regulations on banks, obtain guarantees of foreign banks, as well as guarantees, sureties and other means of collateral from non-residents for its claims from residents.
Exceptionally, the bank can not obtain guarantees and sureties specified in Paragraph 2 of this Article for its claims in the Republic, arising from foreign credit facility for which the state assumed the obligation of foreign repayment.
Resident - legal entity can provide a surety to non-resident as per transaction of import of goods and services of another resident, as well as to non-resident who performs in investment works in the Republic.
Resident - a public company and legal entity with state capital may give surety to non-resident under transactions from Paragraph 4 of this Article under the terms and in manner prescribed by the Government.
Resident - legal entity can obtain guarantee and surety from non-resident per transaction of export of goods and services and performance of investment works in a foreign country for another non-resident, as well as per transaction between the resident and another resident - legal entity in the Republic.
The provisions of this Article shall not apply to guarantees and sureties under Article 2 Item (21) Paragraph 5 of this law, which are considered as a foreign credit facility transaction, and are conducted in accordance with Article 18 of this law.
Residents’ External Deposit Operations
Article 27
The bank shall, without any restrictions, keep foreign currency on the accounts of banks abroad.
Residents may keep foreign currency on the accounts of banks abroad in the manner and under conditions prescribed by the National Bank of Serbia.
Non-Residents’ Deposit Operations in the Republic
Article 28
Non-resident may keep foreign currency and dinars on the account with a bank without restrictions in accordance with the present Law.
The National Bank of Serbia shall prescribe conditions under which banks may open accounts for non-residents and the manner of keeping such accounts.
Transfer of Funds from Accounts to Abroad
Article 29
Non-resident who operates through a non-resident account and a resident - branch of a foreign legal entity that operates through a resident account, perform transfer from these accounts to abroad provided that they have previously settled the tax liabilities from that transaction to the Republic. Such non-resident and resident shall submit the confirmation of the competent tax authority on paid tax obligations.
The transfer of funds to abroad from the foreign currency and dinar savings account of a non-resident shall be executed freely.
Foreign bank that keeps funds in the account with the bank in the Republic shall not be liable to the obligation referred to in paragraph 1 of the present Article.
The transfer of funds abroad from the special-purpose accounts of non-residents opened for trading in securities is not subject to the obligation under Paragraph 1 of this Article, if so is regulated by international agreement on avoidance of double taxation.
8. Payments under Insurance Contract
Article 30
Residents - insurance companies may effect payment for the purpose of depositing and investing abroad, in line with the provisions of the law governing insurance activities.
Resident may pay insurance premiums based on the insurance contract concluded with non-resident - insurance company, under the condition that such contract is allowed by the law governing insurance activities.
9. Unilateral Transfers of Means of Payment - Personal and Physical
Article 31
The National Bank of Serbia shall prescribe more detailed conditions for personal and physical transfers of means of payment to and from abroad.
Article 31a
Ministry in charge of finance affairs shall prescribe the conditions for conducting money transfer services in international payments to residents - legal entities and entrepreneurs.
Foreign Currency Inspectorate shall decide on fulfillment of the requirements in Paragraph 1 of this Article for the issuance and revocation of licenses for conducting money transfer services in the international payment system, by a decree in accordance with the law governing general administrative procedure.
Decree of the Foreign Currency Inspectorate in Paragraph 2 of this Article is final and no administrative litigation could be brought against it.
Article 32
International payment transactions shall be performed in foreign currency and dinars through the bank.
Residents referred to in Article 36 of the present Law shall perform international payment transactions through the National Bank of Serbia.
Bank may carry out payment transactions under foreign credit facility operations, only if those operations have been previously filed at the National Bank of Serbia in accordance with this law.
Bank may perform payments under short term fixed-term bank deposits, exports and imports of goods and services which, under this law are considered to be foreign credit facility transactions and other transactions that have features of a foreign credit facility transaction from the Article 18 Paragraph 11 of this law, as well as under loans that a bank approves to non-residents in dinars and without previous filing of such activities at the National Bank of Serbia.
The National Bank of Serbia shall prescribe more detail conditions and manner of performing international payment transactions with regard to current and capital transactions.
Article 33
Resident may also effect the collection and/or payment in respect of non-resident other than the one with regard to whom the resident has any debt or claims, under current or capital transactions, provided that such transaction is allowed by the present Law.
Resident - debtor under dinars credit facility taken from the international financial organization and development bank or financial institution founded by foreign states may also make the payment to another international financial organization and development bank or financial institution founded by foreign states, and not to the one to which is indebted under that transaction.
Transactions referred to in Par. 1 and 2 of the present Article shall be performed solely on the basis of contract concluded in writing, between all participants in the transaction.
Banks shall be obliged to inform on transactions from Par. 1 and 2 on this Article the National Bank of Serbia in the manner and within deadlines that it prescribes.
The government prescribes to residents the conditions, methods of performing and reporting to the Foreign Currency Inspectorate on the transactions under Par. 1 and 2 of this Article.
Residents are required to file the changes under the foreign credit facility transactions determined in Para. 1 and 2 of this Article at the National Bank of Serbia in accordance with the regulation issued pursuant to Article 24 of this law.
Article 34
Payment, collection and transfer between residents and between residents and nonresidents in the Republic are made in dinars.
Notwithstanding the provisions of Paragraph 1 of this Article, payment, collection and transfer in the Republic can be made in foreign currency on the basis of:
1) Foreign credit facilities in the country for the purposes from Article 25 of this law;
2) Purchase of claims and assuming of debts from Art. 7 and 20 of this law - on the basis of a contract;
3) Payment of deposits as means of collateral;
4) Insurance premiums and transfer on the basis of life insurance;
5) On bases of the sale and leasing of real estate;
6) Donations for humanitarian, scientific and cultural purposes, in accordance with the regulations governing donations;
7) Bank guaranties if such guarantee is a condition to realize the main transaction which can be performed in foreign currency in the Republic;
8) Reimbursement of expenses of official travel abroad, which can be done in effective foreign currency too;
9) Payment of salaries to employees of diplomatic and consular missions, organizations within the UN and international financial organizations in the Republic.
Payment, collection and transfer can be also be made in foreign currency on the basis of programs and projects financed by the European Union Development Aid involving the Republic, where funds may be sent to contractors or beneficiaries and project partners in accordance with the relevant agreement for the implementation of activities based on European Union Development Aid.
Bank may by order of non-resident - the buyer of goods or services, to which it approves the commodity credit facility, perform payment in the Republic in foreign currency to the resident - the seller of that goods or provider of services in foreign trade.
Payment, collection and transfer in the Republic can be made in foreign currency also for transactions that are governed by the laws governing the securities market and other financial instruments and insurance of deposits as well as in other cases prescribed by law.
Bank at the request of a resident may perform transfer of funds in foreign currency from foreign currency account of that resident to his foreign currency account at another bank.
Contracting with usage of foreign currency is allowed in the Republic whereby payment and collection under those contracts shall be made in dinars.
The National Bank of Serbia shall prescribe the instances and conditions under which the payment, collection, deposits and withdrawals may be done in foreign cash as well.
Article 35
The bank shall keep foreign currency with another bank as well, and/or with the National Bank of Serbia.
Resident - legal entity and entrepreneur shall keep foreign currency on the foreign currency account with the bank or they shall sell foreign currency to bank.
The National Bank of Serbia shall prescribe to banks the conditions for opening and the manner of maintaining foreign currency accounts and residents’ foreign currency savings deposits.
National Bank of Serbia shall prescribe to banks the manner and deadlines for submitting data on foreign currency accounts of residents - legal entities and entrepreneurs, on the basis of which it runs a single register of foreign currency accounts.
Register in Paragraph 4 of this Article is a public book, and data from that register are public, except for data determined by another law as confidential.
The level, manner of calculation and payment of interest, and the currency in which interests and the principal are paid shall be determined by the contract between the bank and the resident.
Article 36
Residents - state bodies and organizations, beneficiaries of budget funds of the Republic, beneficiaries of funds of mandatory social insurance organizations and beneficiaries of local government’s budget funds may have foreign currency accounts only with the National Bank of Serbia, unless otherwise stipulated by a special law or an international agreement, and they may sell to the National Bank of Serbia foreign currency and foreign cash generated by their operations.
By way of exception to the provision of paragraph 1 of the present Article, the minister in charge of finance may approve to the beneficiary referred to in paragraph 1 of the present Article the opening of a foreign currency account with an authorized bank for payments that cannot be effected through the National Bank of Serbia, provided this is required by the specific characteristics of beneficiary’s activities.
Reporting on Payment Transactions
Article 37
The National Bank of Serbia shall prescribe to residents the obligation to report on the payment, collection and transfer with regard to payment transactions referred to in Articles 32 and 34 of the present Law.
Using the data from reports referred to in paragraph 1 of the present Article, the National Bank of Serbia shall prepare the projection of the balance of payments of the Republic which serves as the analytical basis for determining monetary policy objectives and tasks, and it shall monitor the realization of the projection made.
VI FOREIGN CURRENCY MARKET AND DINAR EXCHANGE RATE
Article 38
Foreign currency and foreign cash may be purchased and sold only in the foreign currency market and for the purposes allowed by the present Law.
Purchase and sale of foreign currency and foreign cash in the foreign currency market in the Republic shall be performed:
1) directly:
- between banks and residents, as well as between banks and non-residents;
- between banks;
- between banks and the National Bank of Serbia;
- between residents authorized to perform exchange operations and the National Bank of Serbia;
- between banks and residents authorized to perform exchange operations;
- between residents referred to in Article 2, Item (1), indent 6) and the National Bank of Serbia.
2) at the session of the interbank foreign exchange market:
- between banks;
- between banks and the National Bank of Serbia.
Purchase and sale of foreign cash in the foreign currency market shall be performed by the bank, the National Bank of Serbia, as well as by other residents that perform exchange operations in line with the present Law.
The National Bank of Serbia shall prescribe the conditions and procedures in the foreign currency market operations.
Article 39
Exchange operations may be performed by banks, residents - legal entities and entrepreneurs which have the authorization to conduct exchange operations were issued by the Foreign Currency Inspectorate.
Decree on approving authorization for performing exchange operations (hereinafter referred to as: authorization), based on submitted request shall be issued by the Foreign Currency Inspectorate when it determines that the applicant meets the following requirements:
1) That as a business entity is registered with the competent authority;
2) That it has concluded contract with a bank for exchange operations, which has no legal effect if a commercial entity has no authorization;
3) That the owner or founder of the commercial entity, or the general manager of the founder of the commercial entity and the employee who will directly perform exchange operations is not legally convicted of crimes against the economy, property, life and body, against public order and legal transactions;
4) That it has trained personnel, adept organization and technical equipment to perform exchange operations.
Trained personnel to carry out exchange operations means that employees who directly perform exchange operations in the commercial entity by have at least high school education and a certificate for exchange operations.
Adept organization means provision of adequate office space.
Having technical equipment means the provision of adequate equipment and information system that allows the performance of exchange operations in the prescribed manner.
Detailed requirements and manner of performing exchange operations shall be prescribed by the National Bank of Serbia.
In the event that the requirements for the issuance of authorization referred to in Paragraph 2 of this Article have not been fulfilled, Foreign Currency Inspectorate shall issue a decree to refuse the issuance of authorization.
Foreign Currency Inspectorate shall decide on the submitted request within 30 days of receipt of request with complete documentation.
Minister in charge of finance affairs shall prescribe in more detail the procedure and conditions for obtaining a certificate for performance exchange operations, establishes a unique training program for performance of exchange operations and conditions to be met by teachers who carry out training.
Certificate for exchange operations shall be issued by the Foreign Currency Inspectorate. The appropriate register on such certificates shall be kept by the Foreign Currency Inspectorate.
Decree of the Foreign Currency Inspectorate from Paragraphs 2 and 7 of this Article is final and against it no administrative litigation can be led.
Article 39a
Foreign Currency Inspectorate shall issue a decree on revoking the authorization for exchange operations after finding:
1) That the authorized exchange office ceases to fulfill the conditions for performance of exchange operations provided for in this law and in the regulation of the National Bank of Serbia;
2) That the authorized exchange office does not start working within 30 days of receiving authorization to conduct exchange operations;
3) That the authorization was issued on the basis of false and inaccurate information;
4) That the authorized exchange office has not complied with an order to remedy irregularities or illegal acts described in the decree of the foreign currency inspector;
5) That the authorized exchange office informs in writing the Foreign Currency Inspectorate that it no longer intends to perform exchange operations;
6) That the authorized exchange office fails to perform exchange operations more than five working days without a justifiable cause.
Foreign Currency Inspectorate shall issue a decree on revoking the authorization for performance of exchange operations for a period of five years upon an authorized exchange office from which the authorization has previously been revoked at least twice in one year in one exchange spot or in all exchange spots, except for reasons specified in Paragraph 1 Item 5) of this Article.
Foreign currency inspector shall issue a decree to temporarily suspend the performance of exchange operations of the authorized exchange office in the period of up to 30 working days when the authorized exchange office does not allow inspectors to perform a supervision, or does not allow the foreign currency inspector to temporarily seize the foreign cash, checks and dinars, in accordance with the law.
The Government shall prescribe the conditions and manner of control of exchange operations.
The decree of the Foreign Currency Inspectorate from Paragraphs 1, 2 and 3 of this Article is final and no administrative litigations can be brought against it.
Article 40
The dinar exchange rate against foreign currencies shall be established freely in the foreign currency market, in line with the foreign currency demand and supply.
Article 41
The official middle dinar exchange rate shall be formed in the manner determined by the regulation of the National Bank of Serbia.
The official middle dinar exchange rate shall be applied for the needs of bookkeeping and statistics.
The official middle dinar exchange rate, determined on the last business day in the week preceding the week in which the amount of customs and other import dues is determined, shall be applied for the calculation of customs and other import dues, in line with the law governing customs.
Article 42
In the event of serious disturbances in the balance of payments, when the movement of capital cause or threaten to cause serious difficulties in implementing monetary policy and exchange rate policies that result from excessive inflow or outflow of capital from the Republic, the Government at the proposal of the National Bank of Serbia may adopt some necessary protective measures in matters regulated by this law.
Protective measures from Paragraph 1 of this Article may be applied as long as the disturbances due to which they were adopted last, but for a maximum of six months from the date of their adoption.
Article 43
The National Bank of Serbia or the Government may introduce additional protective measures, if necessary, with a view to implementing sanctions of the United Nations or other international organizations, of which the Republic of Serbia is a member, these sanctions being imposed by the said organizations against other countries.
VIII FOREIGN CURRENCY SUPERVISION
Article 44
Activities referred to in the present Law shall be subject to foreign currency supervision.
Foreign currency supervision shall be conducted by supervision bodies - National Bank of Serbia, Foreign Currency Inspectorate, customs authority, and/or other competent bodies that have the right to require, for the purpose of verification, all documentation on foreign currency operations, as well as other documentation needed for foreign currency supervision.
Article 45
The National Bank of Serbia shall conduct supervision of foreign exchange operations of banks and other financial organizations, as well as residents and non-residents connected with banks and other financial organizations by property, management and business relations.
Article 46
The Foreign Currency Inspectorate shall conduct supervision of foreign currency operations of residents and non-residents and of exchange operations.
The Foreign Currency Inspectorate shall conduct control of foreign currency operations of persons referred to in Article 45 of the present Law if such persons are connected to persons referred to in paragraph 1 of the present Article by property, management and business relations.
Article 47
Customs authority shall conduct supervision of the taking out from the Republic and bringing into the Republic foreign cash, dinars, cheques and securities in passenger, commodity and mail transport.
Article 48
Customs authority at the customs border shall temporarily seize from residents and non-residents the amount of dinars, foreign cash, cheques and securities denominated in foreign currency exceeding the amount prescribed by the National Bank of Serbia, and shall issue an appropriate certificate.
Article 49
Supervision bodies shall be under obligation to cooperate in conducting foreign currency supervision and to make available all data, findings and information that they have and that are needed for foreign currency supervision, and when necessary, to engage other competent bodies.
IX FOREIGN CURRENCY INSPECTORATE
Article 50
Foreign Currency Inspectorate shall be established as an administrative body within the ministry in charge of finance affairs, to carry out inspection tasks, tasks of running the administrative proceedings and related professional activities.
Foreign Currency Inspectorate shall supervise the implementation of regulations in the field of foreign currency operations, including currency exchange and credit facility operations with foreign countries, foreign trade and preventing money laundering and financing of terrorism, in accordance with statutory powers.
Foreign Currency Inspectorate is competent to carry out tasks and duties from Para. 1 and 2 of this Article, and to:
1) Independently and in cooperation with other competent authorities plan, organize and implement supervision in order to detect criminal acts and collect evidence in relation thereto;
2) At the request of the court, public prosecutor and other relevant authorities, assist in conducting financial investigations, especially in cases where it is necessary to obtain data on financial transactions and business documents of the defendant and proceeds from crime;
3) Propose to the competent authority amendments to regulations governing the conduct within its competences and take part their creation;
4) Together with the Directorate for Money Laundering Prevention and in collaboration with other bodies, adopt recommendations or guidelines for the implementation of certain provisions of the law governing the prevention of money laundering and financing of terrorism for the addressees of this law;
5) Participate in drawing up the list of indicators according to the law governing prevention of money laundering and financing of terrorism;
6) Determine fulfillment of conditions for issuance of a license for conducting money transfer services in international payments, issue and revoke licenses and maintain a register of the same;
7) Provide training and issue certificates for performance of exchange operations;
8) Prepare and issue permits and authorizations, keep records prescribed by this law and regulations issued there under;
9) Prepare and propose a regulation that prescribes the form of official identity card, the appropriate type of clothing, footwear and equipment used by foreign currency inspectors in carrying out activities within their jurisdiction. This regulation shall be adopted by the minister in charge of finance affairs;
10) Perform other duties in accordance with the law.
Foreign Currency Inspectorate shall apply by analogy the law governing general administrative procedure in the process of making decrees in administrative matters under the authority of this law, unless this law provides otherwise.
The decree of the Foreign Currency Inspectorate in Paragraph 4 of this Article is final no administrative litigation could be brought against it.
The headquarters of the Foreign Currency Inspectorate is in Belgrade.
Article 51
Foreign Currency Inspectorate shall be managed by director.
Article 52
Foreign currency supervision referred to in Article 46 of the present Law shall be conducted by foreign currency inspector.
When conducting on-site supervision, foreign currency inspector must possess an official identity document.
Foreign currency inspector shall issue a decision whereby the removal of irregularities and/or illegalities is ordered, and shall order the execution of measures, under the threat of forced execution.
The decree referred to in Paragraph 3 of this Article may be appealed to the ministry in charge of finance affairs within 15 days from the date of delivery of the decree.
An appeal does not stay the execution of the decree.
Foreign currency supervision shall be conducted in line with the law governing administrative procedure.
Article 52a
In carrying out control a foreign currency inspector has the authority to do the following in the premises of the subject of control:
1) Examine the business books, banking and financial documents, contracts, business records of activity at home and abroad, and other documents, in any form, and to request their copies;
2) Examine the business premises, goods, facilities and equipment;
3) Establish the identity of persons working in jobs that are subject of control, and identity of the responsible person in legal entity whose business activity is under control;
4) Request information and take statements from persons who have information important to control;
5) Require abstaining from any act which is contrary to the provisions of the law.
Foreign currency inspector during control may, with a receipt, temporarily seize the foreign currency, foreign cash, checks, securities, dinars, objects, deeds and documents, if there is reasonable suspicion that they were used or intended for use or generated by criminal act or offense.
Article 53
Residents and non-residents shall keep records of the operations prescribed by the provisions of the present Law.
The Government shall prescribe the conditions and manner of conducting supervision of foreign currency operations of residents and non-residents, as well as the conditions and manner of reporting and keeping records referred to in paragraph 1 of the present Article.
Article 54
(Erased)
Article 55
Supervision bodies shall be under obligation to deposit foreign exchange, foreign cash, cheques and securities, temporarily seized under founded suspicion that a criminal act or offence has been committed, on the special-purpose account of the Foreign Currency Inspectorate maintained with the National Bank of Serbia or on the custody account with the National Bank of Serbia, whereas dinars shall be deposited on a special-purpose account of the Foreign Currency Inspectorate maintained with the ministry in charge of finance, no later than two business days following the day of seizure.
Article 56
Funds generated from issuing permits for providing money transfer services in international payments, issuance of certificates for performance of exchange operations, charged costs of training for performance of exchange operations and other charged costs of administrative proceedings are revenue of the budget of the Republic.
Article 57
Any person buying from or selling to physical entities foreign cash and cheques denominated in foreign currency without the authorization of the Foreign Currency Inspectorate shall be punished for criminal offence by a prison sentence lasting from six months to five years.
Any attempt of committing the offence referred to in paragraph 1 of the present Article, shall be punished.
Article 58
Any person who effects collection and payment or issues a payment order, and/or executes to non-resident a transfer of amount exceeding EUR 100,000 on the basis of contract where no actual price is stated or on the basis of untrue document, shall be punished for criminal offence by a prison sentence lasting from one to ten years.
Any attempt of committing the offence referred to in paragraph 1 of the present Article shall be punished.
Article 59
A fine of 100,000 to 2,000,000 dinars shall be imposed on a resident - legal entity, bank and non-resident - legal entity:
1) If it fails to comply with the regulation of the National Bank of Serbia which prescribes the conditions and manner of filing of the credit facility transactions from Article 4 of this law (Article 4, Paragraph 2);
2) If it does not set-off debts and claims on the basis of realized foreign trade of goods and services under the terms and in manner prescribed by the Government (Article 6 Par. 1 and 2);
3) If it does not set-off debts and claims based on foreign credit facility transactions under the terms and in manner prescribed by the Government (Article 6 Paragraph 3);
4) If it buys or sells, or pays or collects receivables and payables which are not created on the basis of residents’ foreign trade of goods and services (Article 7 Paragraph 1);
5) If it does not carry out the activities specified in Article 7 Paragraph 1 on the basis of a contract concluded in written form between all participants in the activity (Article 7 Paragraph 2);
6) If it fails to comply with the prescribed reporting requirement (Article 6 Paragraph 2, Article 7 Paragraph 3, Article 12 Paragraph 2, Article 13 Paragraph 5, Article 14 Paragraph 2, Article 33 Paragraph 4, Article 37 Paragraph 1);
7) If it fails to comply with the regulation of the Government (Article 7 Paragraph 4);
8) If it buys claims and debts arising from foreign trade of goods and services contrary to the conditions and manner prescribed by the Government (Article 7 Paragraph 5);
9) If it executes collections, payment or issues order for payment, or executes a transfer to a non-resident, based on a contract in which the real price is not listed or on the basis of a false document (Article 8);
10) If it does not act in line with the regulation of the Government (Article 8a);
11) If it does not inform the Foreign Currency Inspectorate in accordance with Government regulation (Article 9);
12) If it effectuates payment and transfer of capital based on direct investments contrary to Article 11 of this law;
13) If it effectuates payment in order to acquire ownership on real estate abroad, or in the Republic, contrary to the law governing ownership matters (Article 12 Paragraph 1);
14) If it effectuates payment in order to purchase foreign long-term debt securities contrary to Article 13 Par. 2, 3 and 4 this law;
15) If it effectuates payment for purchases in the Republic of long-term debt and equity securities, contrary to the law governing the securities market (Article 14 Paragraph 1);
16) If it buys foreign short-term securities in foreign and domestic market contrary to the regulation of the National Bank of Serbia (Article 15 Paragraph 1);
17) If it effectuates payment in order to purchase foreign short-term securities (Article 15 Paragraph 2);
18) If it effectuates payment in order to purchase short-term securities in the Republic (Article 15 Paragraph 3);
19) If it executes payment, collection, transfer, set-off, as well as reporting on transactions with financial derivatives contrary to the conditions and manner prescribed by the National Bank of Serbia (Article 16);
20) If it effectuates payment in order to invest abroad contrary to the provisions of law regulating transactions with investment and voluntary pension funds (Article 17 Paragraph 1);
21) If it effectuates payment in order to invest in investment funds and voluntary pension funds in the Republic contrary to the law which governs transactions with investment and voluntary pension funds (Article 17 Paragraph 2);
22) If it concludes a foreign credit facility transaction contrary to the provisions of Article 18 of this Law;
23) If it approves a dinars credit facility or loan from Article 18 Paragraph 2 of this law, contrary to the terms and manner prescribed by the National Bank of Serbia (Article 18 Paragraph 2);
24) If it gives bank guarantees, endorsements and other forms of security in favor of the non-resident creditor under credit facilities taken by residents from abroad, provides guarantees, sureties and other means of collateral from non-residents under credit facilities it approves to non-residents and gives guarantees, endorsements and other forms of sureties under credit facility transactions between two non-residents abroad in contravention of provisions of Article 18 Paragraph 3 of this law;
25) If it participates in a syndicated financial credit facility or loan contrary to the provisions of Article 18 of this law;
26) If it approves a syndicated financial credit facility or loan from Article 18 Par. 4 and 5 of this law, whereby the conditions of this Article have not been met (Article 18 Paragraphs 4 and 5);
27) If it buys the claim from a non-resident - participant in a syndicated financial credit facility or loan which a group of foreign creditors approves to the debtor, contrary to the terms of Article 18 Par. 4 and 5 of this law (Article 18 Paragraph 6);
28) If it acts contrary to Article 18 Paragraph 7 of this Law;
29) If it gives sureties and other forms of collateral in favor of non-resident creditor under credit facilities taken by residents from abroad, obtains guarantees, sureties and other forms of collateral from non-residents under credit facilities it approves to non-residents, and gives sureties and other forms of collateral under credit facility transactions between two nonresidents abroad in contravention of the provision from Article 18 Paragraph 8 of this law;
30) If it carries out foreign credit facility transactions contrary to the provisions of the special law (Article 18 Paragraph 9);
31) If it acts contrary to the provision from Article 18, Paragraph 11 of this Law;
32) If it acts contrary to the provision of Article 18 Paragraph 12 this Law;
33) If it does not give the guarantees, sureties and other means of collateral from Article 18 of this law in the currency of main credit facility transaction whose orderly execution they ensure (Article 18 Paragraph 14);
34) If it concludes a contract of a foreign credit facility contrary to the provisions of Article 19 of this law;
35) If it does not perform the transactions from Article 20 Paragraph 1 of this law based on a contract concluded in written form between all participants in the transaction (Article 20 Paragraph 2);
36) If it buys claims and debts arising from foreign credit facility transactions contrary to the regulation of the National Bank of Serbia (Article 20 Paragraph 3);
37) If it uses financial credit facilities taken abroad contrary to the provision of Article 21 Paragraph 1 of this law (Article 21 Paragraph 1);
38) If it takes financial credit facilities abroad contrary to the regulation of the National Bank of Serbia, which defines the purposes, method and conditions of taking these credit facilities (Article 21 Paragraph 2);
39) If it takes short-term fixed term bank deposits and short-term bank credit facility lines from foreign banks in contravention to the provision of Article 22 of this law;
40) If it approves the financial credit facilities to a non-resident in contravention of provision of Article 23 Paragraph 1 of this law (Article 23 Paragraph 1);
41) If it gives sureties under credit facility transactions between two non-residents abroad under conditions contrary to the provision of Article 23 Paragraph 1 of this law (Article 23 Paragraph 2);
42) If it does not contract and does not provide from a non-resident instruments of payment collateral in the performance of credit facility transactions under Article 23 Par. 1 and 2 of this law (Article 23 Paragraph 3);
43) If it fails to act in accordance with the Article 23 Paragraph 4 of this law (Article 23 Paragraph 4);
44) If it approves financial credit facilities to non-residents and gives bank guarantees and sureties for credit facility transactions between two non-residents abroad, contrary to the regulation of the National Bank of Serbia (Article 23 Paragraph 5);
45) If it does not file a foreign credit facility transaction in the manner and within deadlines prescribed by the National Bank of Serbia (Article 24);
46) If it approves credit facilities in foreign currency contrary to the provisions of Article 25 of this law;
47) If it performs the guarantee transactions from Article 26 Paragraph 1 of this law contrary to this law and regulations on banks;
48) If it obtains guarantees of foreign banks as well as guarantees, sureties and other means of collateral from non-residents for its claims from residents in contravention of regulations on banks (Article 26 Paragraph 2);
49) if it obtains guarantees and sureties from the Article 26 Paragraph 2 of this law for the claims in the Republic arising from foreign credit facilities for which the state assumed the obligation of foreign repayment (Article 26 Paragraph 3);
50) If it gives surety to a non-resident contrary to Article 26 Paragraph 4 of this law;
51) If it gives surety to a non-resident contrary to the regulation of the Government (Article 26 Paragraph 5);
52) If it obtains guarantees or sureties of a non-resident contrary to Article 26 Paragraph 6 of this law;
53) If it keeps foreign currency in the account at a foreign bank contrary to the regulation of the National Bank of Serbia (Article 27 Paragraph 2);
54) If it keeps foreign currency and dinars in the account at a bank contrary to this law (Article 28 Paragraph 1);
55) If it does not comply with the regulation of the National Bank of Serbia (Article 28 Paragraph 2);
56) If the persons referred to in Article 29 Paragraph 1 of this law conduct transfer of funds from non-resident, or resident account to a foreign country, and have not previously settled tax obligations to the Republic from the transaction based on which these funds were (Article 29 Paragraph 1);
57) If it makes payments for deposits and investments abroad contrary to the provisions of the law governing the insurance business (Article 30 Paragraph 1);
58) If it makes payments of insurance premium on the basis of insurance contracts concluded with non-resident - an insurance company, that is not allowed by the law that regulates insurance business (Article 30, Paragraph 2);
59) If it does not comply with the regulation of National Bank of Serbia, which regulates the more detailed requirements for personal and physical transfers of means of payment to a foreign country and from a foreign country (Article 31);
60) If it performs the activity of providing money transfer services in international payments contrary to the conditions imposed and determined by the Ministry in charge of Finance affairs (Article 31a);
61) If it does not conduct foreign payment in foreign currency and dinars through a bank (Article 32 Paragraph 1);
62) If it does not conduct foreign payment through National Bank of Serbia (Article 32 Paragraph 2);
63) If it conducts payment under foreign credit facility transaction contrary to the provision Article 32 Paragraph 3 of this law;
64) If it performs foreign payments under current and capital operations transactions contrary to the regulation of the National Bank of Serbia (Article 32 Paragraph 5);
65) If it executes collection, or payment to other non-resident and not to non-resident to whom it is indebted, or from whom it has a claim, under current or capital transaction not allowed by this law (Article 33 Paragraph 1);
66) If it Acts contrary to Article 33 Paragraph 2 of this law;
67) If it does not carry out the activities from Article 33 Para. 1 and 2 of this law based on a contract concluded in written form between all participants in the activity (Article 33 Paragraph 3);
68) If it does not carry out the activities from Article 33 Para. 1 and 2 of this law under the terms and conditions set by the Government (Article 33 Paragraph 5);
69) If it does not report to the Foreign Currency Inspectorate on activities referred to in Article 33 Para. 1 and 2 of this in the manner and deadlines prescribed by the Government (Article 33 Paragraph 5);
70) If it does not file the changes under the foreign credit facility transactions from Article 33 Para. 1 and 2 of this law to the National Bank of Serbia in accordance with regulation issued pursuant to Article 24 of this law (Article 33 Paragraph 6);
71) If it conducts payment, collection and transfer in the Republic contrary to the provisions of Article 34 of this law;
72) If it conducts payment, collection, depositing and withdrawal of foreign currency cash contrary to the regulation of the National Bank of Serbia (Article 34 Paragraph 8);
73) If it does not keep foreign currency at a bank, or the National Bank of Serbia (Article 35 Paragraph 1);
74) If it does not keep foreign currency in the foreign currency account at a bank or if it does not sell them to the bank (Article 35 Paragraph 2);
75) If it does not comply with the regulation of the National Bank of Serbia (Article 35 Paragraph 3);
76) If it does not provide data on foreign currency accounts of residents - legal entities and entrepreneurs in the manner and within deadlines prescribed by the National Bank of Serbia (Article 35 Paragraph 4);
77) If it does not keep foreign currency accounts at the National Bank of Serbia (Article 36 Paragraph 1);
78) If it acts contrary to the provisions of Article 36 Paragraph 2 of this law;
79) If it buys and sells the foreign currency cash off the foreign exchange market (Article 38 Paragraph 1);
80) If it does not comply with the regulation of the National Bank of Serbia (Article 38 Paragraph 4);
81) If it does not comply with the regulation of the National Bank of Serbia (Article 39 Paragraph 6);
82) If it acts contrary to the Government's regulation (Article 39a Paragraph 4);
83) If it does not apply the official middle exchange rate of dinars for the purposes of accounting and statistics (Article 41 Paragraph 2);
84) If it does not apply, for the purposes of the calculation of customs and other import duties, the official middle exchange rate of dinars determined on the last working day of the week preceding the week in which the amount of customs and other import duties is determined in accordance with the law governing customs duties (Article 41 Paragraph 3);
85) If it acts contrary to the measures specified in Article 42 of this law;
86) If it acts contrary to the measures specified in Article 43 of this law;
87) If it does not issue a certificate at the border crossing for temporarily confiscated dinars and foreign cash, checks and securities denominated in foreign currency, exceeding the amount prescribed by the National Bank of Serbia (Article 48);
88) If it does not keep records on foreign currency operations (Article 53 Paragraph 1);
89) If it acts contrary to the Government's regulation (Article 53 Paragraph 2);
90) If it does not deposit temporarily seized foreign currency, foreign cash, dinars, checks and securities in the special purpose account of the Foreign Currency Inspectorate maintained by the National Bank of Serbia or does not put them in storage at the National Bank of Serbia within two business days from the date of seizure (Article 55).
For the acts referred to in Paragraph 1 of this Article the responsible person in the resident - legal entity or non-resident, responsible person in a bank shall be punished for a misdemeanor with a fine of 5,000 to 150,000 dinars.
For the acts referred to in Paragraph 1 of this Article the responsible person in the resident from Article 36 Paragraph 1 of this law shall be punished for a misdemeanor with a fine of 5,000 to 150,000 dinars.
For the acts referred to in Paragraph 1 of this Article the responsible person in the resident - the branch of a foreign legal entity shall be punished for a misdemeanor with a fine of 5,000 to 150,000 dinars.
Article 60
(Erased)
Article 61
A resident - entrepreneur shall be punished for a misdemeanor with the fine ranging from 10,000 to 500,000 dinars:
1) If it fails to comply with the regulation of the National Bank of Serbia, which prescribes the conditions and manner of recording credit facility transactions under Article 4 of this law (Article 4 Paragraph 2);
2) If it does not set-off debts and claims on the basis of realized foreign trade of goods and services under conditions and in manner prescribed by the Government (Article 6 Para. 1 and 2);
3) If it does not set-off debts and claims based on foreign credit facility transactions under conditions and in manner prescribed by the Government (Article 6 Paragraph 3);
4) If it buys or sells, or pays or collects claims and debt, which was not created by foreign trade activities of residents (Article 7 Paragraph 1);
5) If it does not conduct the activities specified in Article 7 Paragraph 1 of this law based on a contract concluded in written form between all participants in the activity (Article 7 Paragraph 2);
6) If it fails to comply with Government’s regulation (Article 7 Paragraph 4);
7) If it executes collection, payment or issues an order for payment, or performs transfer to a non-resident, under a contract in which the actual cost is not listed or on the basis of a false public document (Article 8);
8) If it fails to comply with the regulation of the Government (Article 8a);
9) If it does not inform the Foreign Currency Inspectorate in accordance with Government’s regulation (Article 9);
10) If it executes payment and transfer of capital based on direct investments abroad contrary to the law governing the foreign trade operations (Article 11 Paragraph 1);
11) If it executes payment to acquire ownership of real estate abroad, contrary to the law governing the ownership matters (Article 12 Paragraph 1);
12) If it fails to comply with the prescribed reporting obligation (Article 6 Paragraph 2, Article 12 Paragraph 2, Article 13 Paragraph 5, Article 37 Paragraph 1);
13) If it executes payment for the purchase of foreign long-term debt securities contrary to Article 13 Para. 2 and 3 of this Law;
14) If it executes payment for the purchase of foreign short-term securities (Article 15 Paragraph 2);
15) If it executes payment, collection, transfer, set-off, as well as reporting on transactions with financial derivatives contrary to the conditions and manner prescribed by the National Bank of Serbia (Article 16);
16) If it concludes a foreign credit facility transaction contrary to the provisions of Article 18 of this law;
17) If it gives sureties and other means of collateral in favor of a non-resident creditor for credit facilities taken by residents from abroad, approves to a non-resident commercial loans and provides guarantees, sureties and other forms of collateral from non-residents for credit facilities it approves to non-residents, contrary to the provisions of Article 18 Par. 10 and 14 of this law;
18) If it concludes a contract on a foreign credit facility transaction contrary to the provisions of Article 19 of this law;
19) If it uses the financial credit facilities taken abroad contrary to the provisions of Article 21 Paragraph 1 this law (Article 21 Paragraph 1);
20) If it takes financial credit facilities abroad contrary to the regulation of the National Bank of Serbia, which defines the purposes, method and conditions of taking these credit facilities (Article 21 Paragraph 2);
21) If it does not file a foreign credit facility transaction in the manner and within deadlines prescribed by the National Bank of Serbia (Article 24);
22) If it keeps foreign currency on the account with a foreign bank contrary to the regulation of the National Bank of Serbia (Article 27 Paragraph 2);
23) If it executes payment of insurance premium based on insurance contract concluded with a non-resident - insurance company, which is not allowed by the law that regulates insurance operations (Article 30 Paragraph 2);
24) If it performs the activity of providing the money transfer services in international payment operations contrary to the conditions imposed by and determined by the ministry in charge of finance affairs (Article 31a);
25) If it does not carry out the foreign payment operations in foreign currency and in dinars through a bank (Article 32 Paragraph 1);
26) If it performs foreign payment operations in current and capital operations contrary to the regulation of the National Bank of Serbia (Article 32 Paragraph 5);
27) If it performs the collection or payment to another non-resident and not to a non-resident to whom is indebted, or from whom it is claiming, in current or capital operation which is not allowed by this law (Article 33 Paragraph 1);
28) If it acts contrary to Article 33 Paragraph 2 of this law;
29) If it does not conduct the activities from Article 33 Par. 1 and 2 of this law based on a contract concluded in written form between all participants in the activity (Article 33 Paragraph 3);
30) If it does not carry out the activities from Article 33 Par. 1 and 2 of this law under the terms and in manner set by the Government (Article 33 Paragraph 5);
31) If it does not inform the Foreign Currency Inspectorate on activities referred to in Article 33 Par. 1 and 2 of this law in the manner and within deadlines prescribed by the Government (Article 33 Paragraph 5);
32) If it does not file the changes under foreign credit facility operations from the Article 33 Par. 1 and 2 of this law to the National Bank of Serbia in accordance with the regulation issued pursuant to Article 24 of this law (Article 33 Paragraph 6);
33) If it conducts payment, collection and transfer in the Republic contrary to the provisions of Article 34 of this Law;
34) If it conducts payment, collection, deposit and withdrawal in foreign cash contrary to the regulation of the National Bank of Serbia (Article 34 Paragraph 8);
35) If it does not keep the foreign currency in the foreign currency account at a bank or if it does not sell them to a bank (Article 35 Paragraph 2);
36) If it buys or sells the foreign currency and foreign cash off the foreign exchange market (Article 38 Paragraph 1);
37) If it does not comply with the regulation of the National Bank of Serbia (Article 39 Paragraph 6);
38) If it acts contrary to the Government's regulation (Article 39a Paragraph 4);
39) If it does not apply the official middle exchange rate for accounting and statistics purposes (Article 41 Paragraph 2);
40) If it acts contrary to the measures specified in Article 42 of this Law;
41) If it acts contrary to the measures specified in Article 43 this Law;
42) If it does not keep records on foreign currency operations (Article 53 Paragraph 1);
43) If it acts contrary to the Government's regulation (Article 53 Paragraph 2).
Article 62
A fine of 5,000 to 150,000 dinars shall be imposed on a resident - natural person for a misdemeanor if he:
1) Acts contrary to Article 7 Paragraph 1 of this law (Article 7);
2) Executes collection, payment or issues order for payment, or performs transfer, on the basis of a contract in which the actual cost is not listed or on the basis of a false public document (Article 8);
3) Executes payment and transfer of capital based on direct investments abroad contrary to the law governing the foreign trade operations (Article 11 Paragraph 1);
4) Executes payment to acquire ownership of real estate abroad, contrary to the law governing ownership matters (Article 12 Paragraph 1);
5) Fails to comply with the prescribed reporting obligation (Article 12 Paragraph 2, Article 13 Paragraph 5, Article 37 Paragraph 1);
6) Makes payments for purchases of foreign long-term debt securities contrary to Article 13 Par. 2 and 3 this law;
7) Makes payment for the purchase of foreign short-term securities (Article 15 Paragraph 2);
8) Makes payment, collection, transfer, set-off, and reporting on transactions with financial derivatives contrary to the conditions and manner prescribed by the National Bank of Serbia (Article 16);
9) Concludes a foreign credit facility transaction (Article 18 Paragraph 12);
10) Keeps foreign currency in the account with a foreign bank contrary to the regulation of the National Bank of Serbia (Article 27 Paragraph 2);
11) Performs payment of insurance premium based on insurance contract concluded with a non-resident - insurance company, which is not allowed by the law that regulates insurance operations (Article 30 Paragraph 2);
12) Fails to comply with the regulation of the National Bank of Serbia which governs more detailed requirements for personal and physical transfers of means of payment to and from abroad (Article 31);
13) Performs the activity of providing money transfer services in international payments operations (Article 31a);
14) Does not conduct the foreign payment operations in foreign currency and dinars through a bank (Article 32 Paragraph 1);
15) Performs foreign payment operations under current and capital operations contrary to the regulation of the National Bank of Serbia (Article 32 Paragraph 5);
16) Carries out collection, or payment to another non-resident and not to the non-resident to whom he is indebted to, or against whom it has a claim, under current or capital transaction not allowed by this law (Article 33 Paragraph 1);
17) Does not carry out activities from Article 33 Paragraph 1 of this law based on a contract concluded in written form between all participants in the activity (Article 33 Paragraph 3);
18) Does not conduct the activities from Article 33 Paragraph 1 of this law under the terms and in manner set by the Government (Article 33, Paragraph 5);
19) Does not inform the Foreign Currency Inspectorate on the activities referred to in Article 33 Paragraph 1 of this law in the manner and within deadlines prescribed by the Government (Article 33 Paragraph 5);
20) Conducts payment, collection and transfer in the Republic contrary to the provisions of Article 34 of this law;
21) Conducts payment, collection, payment, deposit and withdrawal in foreign cash contrary to the regulation of the National Bank of Serbia (Article 34 Paragraph 8);
22) Buys and sells the foreign currency and foreign cash off the foreign exchange market (Article 38 Paragraph 1);
23) Acts contrary to the measures specified in Article 42 of this law;
24) Acts contrary to the Government's regulation (Article 53 Paragraph 2).
Article 63
A fine of 5,000 to 150,000 dinars shall be imposed for a misdemeanor on non-resident - natural person it he:
1) Acts contrary to Article 7 Paragraph 5 of this Law;
2) Executes payment and transfer of capital based on direct investments in the Republic contrary to Article 11 of this Law;
3) Executes payment to acquire ownership of real estate in the Republic, contrary to the law governing the ownership matters (Article 12 Paragraph 1);
4) Executes payments for purchase of long-term and equity securities in the Republic contrary to the law governing the securities market (Article 14 Paragraph 1);
5) Executes payment to purchase domestic short-term securities (Article 15 Paragraph 3);
6) Executes payments to invest in investment funds and voluntary pension funds in the Republic contrary to the law which governs transactions with investment and voluntary pension funds (Article 17 Paragraph 2);
7) Concludes a foreign credit facility transaction in foreign currency contrary to the provisions of Article 18 Paragraph 1 of this Law;
8) Acts contrary to the regulation of the National Bank of Serbia (Article 20 Paragraph 3);
9) Keeps in the account at a bank the foreign currency and dinars contrary to this law (Article 28 Paragraph 1);
10) If the persons from Article 29 Paragraph 1 of this law carry out transfer of funds from non-resident or resident accounts abroad, and have not previously settled tax obligations towards the Republic under the transaction from which they gained these funds (Article 29 Paragraph 1);
11) Fails to comply with the regulation of the National Bank of Serbia which governs the more detailed requirements for personal and physical transfer of means of payment to and from abroad (Article 31);
12) Performs the activity of providing money transfer services in international payment operations (Article 31a);
13) Conducts payment, collection and transfer in the Republic contrary to the provisions of Article 34 of this Law;
14) Conducts payment, collection, depositing and withdrawal in foreign cash contrary to the regulation of the National Bank of Serbia (Article 34 Paragraph 8);
15) Buys and sells the foreign currency and foreign cash off the foreign exchange market (Article 38 Paragraph 1);
16) Acts contrary to the measures specified in Article 42 of this law.
Article 64
With respect to offences referred to in Articles 59 - 63 of the present Law, in addition to a fine, a protective measure of seizing the items used in or intended for the perpetration of offence, or generated by the perpetration of offence, shall be pronounced.
By way of exception to paragraph 1 of the present Article, partial seizure of items used in or intended for the perpetration of offence, or generated by the perpetration of offence, may be executed, when the motives or other circumstances under which the offence was committed point to the conclusion that the seizure of item in its entirety is not justified.
Protective measure referred to in Paragraph 1 of this Article may be imposed even if the sentence for a misdemeanor has not been ruled, if the procedure for misdemeanors may not be conducted because the offender was unreachable or unknown to the body responsible for conducting the proceedings, or if the offender at the time of the committed misdemeanor was minor, or due to existence of other legal obstacles.
Article 65
Should a period of five years from the day of the perpetration of offence elapse, proceedings in respect of offences referred to in the present Law cannot be instituted.
Article 66
Fines, benefits in terms of ownership, means of payment, and the dinar equivalent arrived at through the sale of items used in or intended for the perpetration of criminal offence or offence, or generated by the perpetration of criminal offence or offence, shall be paid to the budget of the Republic.
Foreign cash seized as the item of the perpetration of criminal offence or offence may be sold to the National Bank of Serbia, which shall pay the dinar equivalent of such cash to the budget of the Republic.
XI TRANSITIONAL AND FINAL PROVISIONS
Article 67
Offence procedures launched before the effectiveness of the present Law shall be resolved according to the provisions of the present Law, should that be more favourable for the perpetrator.
Article 68
Regulations pertaining to the execution of the present Law shall be issued no later than six months following the entry into force of the present Law.
Until the enactment of regulations referred to in Paragraph 1 of the present Article, regulations issued on the basis of Foreign Currency Law ("Official Gazzete of the FRY", no. 23/02 and 34/02), Law on International Credit facility Operations ("Official Gazette of the FRY", no. 42/92, 24/94, 28/96 and 21/99), as well as Decision on Keeping Records of Concluded Foreign Trade Transactions ("Official Gazette of the FRY", no. 74 /00), shall be applied.
Article 69
As of the effectiveness of the present Law, Foreign Currency Law ("Official Gazette of the FRY", no. 23/02 and 34/02) and Law on International Credit facility Operations ("Official Gazette of the FRY", no. 42/92, 24/94, 28/96 and 21/99) shall cease to be valid.
Article 70
The present Law shall enter into force on the eighth day following its publication in the "Official Herald of the Republic of Serbia".
Independent Articles of the Law On Foreign Currency Transactions
("Official Herald of the RS", No. 31/2011)
Article 35[s1]
From 1st January 2012 the Foreign Currency Inspectorate shall take over the tasks of issuing and revoking of authorizations to conduct exchange operations and activities of control of exchange operations, and shall take over employees of the National Bank of Serbia who have been, on 31st December 2011, performing activities in connection with the issuance and revocation of authorizations to conduct exchange operations and activities of control of exchange operations, as well as operational documents, equipment and other objects used to perform these duties.
Minister in charge of finance affairs and the Governor of the National Bank of Serbia shall conclude an agreement which shall regulate, in more detail, the matters or takeover referred to in Paragraph 1 of this Article, as well as issues related to the use of office space in which the activities referred to in that Paragraph are to be performed.
Procedures for issuing and revoking of authorization to conduct exchange operations, as well as the activities of control of exchange operations, initiated by the National Bank of Serbia, which were not completed until 31st December 2011, shall be completed by the Foreign Currency Inspectorate in accordance with this law.
Residents - legal entities and entrepreneurs to whom the decree on issuance of authorization to conduct exchange operations has been issued prior to 31st December 2011 shall continue to work on the basis of that decree, in accordance with the provisions of this Law.
By-laws for implementation of this law from Articles 2, 4, 5, 6, 7, 9, 10, 11, 13, 15, 16 and 17 shall be enacted within six months from the date of this law’s entry into force, except the by-laws from Articles 18 and 19 of this law, which shall be enacted by 31st December 2011.
Until the beginning of implementation of by-laws from Paragraph 5 of this Article, the regulations adopted pursuant to the Law on Foreign Currency Transactions ("Official Herald of the RS", No. 62/06) shall apply unless inconsistent with the provisions of this law.
The provisions of the regulations from Article 2 Paragraph 2 of this law shall apply on foreign credit facility transactions from Art. 4 and 5 of the Law on Foreign Currency Transactions ("Official Herald of the RS", No. 62/06) which have been filed in accordance with the provisions of Article 4 Paragraph 4 and Article 5 Paragraph 4 of the Law on Foreign Currency Transactions ("Official Herald of the RS", No. 62/06), but whose realization has not been completed before entry into force of regulations from the Article 2 Paragraph 2 of this law.
Misdemeanor proceedings commenced before this law’s entry into force shall be completed under the provisions of this law, if that is more favorable for the offender.
The rights from the individual acts obtained on the basis of the Law on Foreign Currency Transactions ("Official Herald of the RS", No. 62/06) shall be realized within the deadlines laid down in those individual acts.
Article 36[s1]
This Law shall enter into force on the eight day after its publication in the "Official Herald of the Republic of Serbia", except that the provisions of Art. 18, 19, 21, 22, 23, 26 and 27 of this law, in part related to exchange operations, Article 28 of this law, in part related to the newly proposed Article 59 Paragraph 1 Items 81) and 82), and Article 30 of this law, in part related to the newly proposed Article 61 Items 37) and 38), shall apply from 1st January 2012, while the provisions from Article 59 Paragraph 1 Item 70) and Article 61 Item 36) of the Law on Foreign Currency Transactions ("Official Herald of the RS", No. 62/06) shall apply until 31st December 2011.