Managing the Impact of Coronavirus (COVID-19) – Update No. 7

April 29, 2020

Managing the Impact of Coronavirus (COVID-19) – Update No. 7

April 29, 2020

In the latest update of our FAQ, you will find the most recent information related to the measures taken by the Government of Serbia during state of emergency due to COVID-19 pandemic.

Should you require legal support in connection with COVID-19, feel free to get in touch with us. SOG has formed a special work group that focuses specifically on legal and business implications of the epidemic, the current state of emergency, and its effects on your everyday business.

 

Important novelties since our last update:

  • all retired citizens shall receive an amount of EUR 100 as a part of economic state aid measures, as will all other citizens over the age of 18 that file an online application or call the phone number yet to be announced;
  • additional economic aid measures have been adopted to include a Government guarantee scheme, subsidized loans for maintenance of liquidity and operating capital of private companies and direct fiscal aid (click to read our separate announcement);
  • certain deadlines have been extended until the suspension of the state of emergency, such as: (i) deadline for holding an annual General meeting of the company; (ii) deadline for submitting annual financial report; (iii) audit of annual fiscal reports; (iv) filing corporate profit tax returns;

Please find our updated FAQ bellow (new information is underlined):

Q1: Are there any specific obligations imposed on employers in light of the declared State of Emergency due to COVID-19?

Yes. Employers must enable remote work or work from home to all employees whose work can be performed in such a manner. If the Employment Agreement or the Employment Rulebook do not stipulate remote work or work from home as a manner of performing work activities, the Employer must enact a decision for each employee to enable remote work or work from home. Employers must keep specific records of employees who work remotely or from home.

If Employers cannot organize remote work or work from home due to the nature of employee’s work activities, Employers should:

  • if possible, organize work in shifts so that the employees do not overlap;
  • enable business meetings to be held electronically (video link, video call, etc);
  • postpone official travel in the country and abroad;
  • implement enhanced hygienic measures at facilities;
  • secure protective equipment for employees.

Government of Serbia has enacted a conclusion which simplifies the process of sending employees on paid leave for a period longer than 45 days.

In relation to the ban on movement of citizens between 6 p.m. and 5 a.m. (explained in detail in Q4), Employers which have organized work within the aforementioned period must obtain a permit for the movement of each employee between 6 p.m. and 5 a.m. The movement permits are issued by the Ministry of Internal Affairs based on the filled in form (download here) that needs to be submitted to the following e-mail address: vanrednostanje@privreda.gov.rs.

Besides the movement permit, the Employer must issue a work order to each employee on a daily basis if the employer has up to 100 employees and on a weekly basis if the employer has more than 100 employees. Employers will be held responsible for the accuracy of information contained therein. There is a higher degree of responsibility of Employers for employees older than 65 years working within the aforementioned period.

Unrelated to the above, it is worth to be noted:

  • sick leaves have automatically been extended for 30 days;
  • there are three recommendations to employers from the Government of Serbia: (i) to compensate full salary (not just 65%) to employees who are on sick leave because of COVID-19, due to a work related contact; (ii) to allow employees whose workplace is required during the state of emergency, to utilize the 2019 annual leave by 31 December 2020 instead of 30 June 2020; and (iii) a recommendation to employers to allow employees to exhaust annual leave before sending the employees to forced leave of absence.

Q2: I am a foreign national currently residing in Serbia and my stay and/or work permit is about to expire? Am I required to initiate any special proceeding?

No. All foreign nationals that were legally residing in Republic of Serbia at the time when a state of emergency had been declared, may continue to reside and work  on the territory of Republic of Serbia during state of emergency (if their work permits were valid on 16 March 2020), while all personal documents of such individual shall be considered valid during this time without the need to initiate any prior proceeding.

 

 

Q3: Are there any restrictions related to movement of goods?

Movement of goods remains generally free, except for the ban on export of:

  • whole sunflower seeds, sunflower seed oil, sugar beet molasses, sanitizers, asepsol, alcohol, soap, gloves (rubber, surgical and other), masks (except for textile), protective suits (rubber, textile and surgical), protective glasses, diapers;
  • Ban on export of medications has been lifted, so there are no more restrictive measures in this regard.

 

 

Q4: Are there any restrictions related to movement of people?

Total ban on movement of senior citizens (citizens older than 65 years in urban areas with more than 5,000 inhabitants and citizens older than 70 years in areas with less than 5,000 inhabitants) from 6 p.m. until 1 a.m. the next day for a duration of 60 minutes within the 600m radius from their place of residence, except on Friday, when senior citizens can purchase groceries on the territory of Serbia between 4 a.m. and 7 a.m. A limited ban on movement of other citizens between 6 p.m. and 5 a.m. on workdays, except during the weekend, when the ban lasts from 6 p.m. Friday until Monday 5 a.m. (movement on Saturday and Sunday is restricted). Citizens may walk their pets between 11 p.m. and 1 a.m. on workdays and between 8 a.m. and 10 a.m. on weekends for up to 20 minutes. Outdoor sports activities are permitted and public parks are reopened while social distancing measures still apply.

The aforementioned restrictions do not apply to: (i) licensed healthcare workers; (ii) officers on duty; (iii) persons granted a special permit for movement by the Ministry of Internal Affairs; (iv) persons in urgent need of medical assistance and two persons accompanying such person, (v) persons who are crew members of motorized vehicles, cargo ships, railway vehicles, and airplanes, by which international transport is undertaken, and (vi) construction workers registered at the existing construction site.

Country borders have been closed for passenger transport in road, railroad and river transport, except for transport crews and other persons with special permit. Foreign crew transiting through Serbia by waterways cannot be replaced within Serbia. Serbian members of the crew, must be isolated in quarantine for 14 days if they continue travel thereafter or otherwise 28 days upon disembarking. Exceptionally, temporary entry may be allowed in accordance with national interests and due to humanitarian reasons.

International airports in Serbia will be temporarily closed for international passenger transport, although it was announced that they might be reopening soon. This prohibition does not refer to flights: (i) carrying goods and mail, (ii) performing search and rescue, (iii) humanitarian flights, (iv) performing urgent medical transport, (v) performing technical landing and positioning of flights registered with Flights Registry, (vi) in emergency landing and (vii) state flights and special purpose flights. Exceptionally, Minister of transport may provide exception to the aforementioned rules depending on the epidemic circumstances.

Public passenger transportation by bus, railway and water transport will be reopened as of 4 May with certain restrictions to ensure the health and safety of the passengers (e.g. air condition will be turned off).

Public gatherings in indoor public spaces with more than 5 people (including sport events, theatres and cinemas, concerts, public debates, exhibitions and seminars, restaurants, night clubs) has been prohibited, with an exception concerning gatherings organized by a competent authority. Gatherings of more than 2 people outdoors, except for parents/caretakers with underage children has been prohibited.

Movement of asylum seekers and irregular migrants housed in asylum centers and reception centers in Serbia is temporarily restricted, and an increased surveillance and security of these facilities established. These categories of people will be allowed to leave the facilities exceptionally and in justified cases (e.g. visit to a doctor o), for a limited period, and with a special permission of the Commissariat for Refugees and Migration of the Republic of Serbia.

 

 

Q5: My business is significantly affected by the epidemic – are financial reliefs, subsidies or state aid available? Are there any tax reliefs?

On 31 March 2020, Serbian government announced a stimulus package total value of 5.1 billion euros. We covered the most important aspects of those measures in our separate article.

Besides the stimulus package, the National Bank of Serbia introduced the moratorium on loans and financial leasing (re)payments. There is also a moratorium on loans granted by the Republic Development Fund until 30 September 2020. Moreover, in order to secure the stability of the financial market, the National Bank of Serbia has reduced the reference interest rate to 1.5%.

With respect to tax, Government of Serbia has introduced a moratorium on enforcement and interest calculation on tax debt under reprogram. Interest on tax debt has been reduced to annual reference interest rate of the National Bank of Serbia (normally, the interest rate is equal to NBS reference rate plus 10 percentage points). Additionally, corporate profit tax returns may be filed up to 90 days upon termination of the state of emergency.

Deadline for holding an annual General meeting of the company is extended to 90 days upon termination of the state of emergency.

Payment of Customs duty on import of ethyl-alcohol and alcohol potency of 80% or stronger (customs no.  2207 10 00 00) has been suspended.

Prohibition of dividend payments until the end of 2020 for companies who apply for financial aid.

 

 

Q6: Can COVID-19 be considered a case of force majeure and how does it affect obligations of parties to perform under contracts?

A pandemic, such is the one caused by COVID-19, is a typical force majeure event which may cause impossibility to perform under contracts or frustration of purpose of contracts. If this is the case, obligations of parties to perform may be affected in different ways.

Each contract must be assessed on its own terms and no general advice can be provided in this respect.

 

 

Q7: What is the current status of courts and other authorities?

Court hearings have been adjourned, except in cases requiring urgent action (e.g. temporary measures, domestic violence hearings etc.). Debt collection and other enforcement actions suspended (with some exceptions). Procedural deadlines have been suspended for the duration of the state of emergency (read more on: Coronavirus legal alert suspension of procedural deadlines during the state of emergency). Deadlines for submitting briefs and documents in administrative proceedings have been suspended for the duration of the state of emergency. Judge of the presiding council in a criminal proceeding held before the Basic Court, may decide that the main hearing is held via skype video call between the defendant and the court, if it is assessed that defendant’s personal presence is difficult to secure due to the danger of the spread of infectious diseases.

Certification of signatures, manuscripts and transcripts before notaries, as well as hearings in non-contentious cases suspended, except in particularly urgent and justified cases. Solemnization and notary public records (in Serbian: javnobeležnički zapis) of documents are still being conducted.

All competent authorities, except for the Customs Administration, certain counters of Tax Administration and Treasury Administration, public post service (PE “Pošta Srbija”) and public electricity company (PE “Elektroprivreda Srbije”), have ceased direct work with citizens and other entities and are now only working by post and email correspondence.

 

 

Q8: Are there any market restrictions imposed by the Government due to the State of emergency?

Betting sites and other games of chance may be organized in indoor spaces so long as all preventive measures are being applied. Hairdressing beauty salons, fitness clubs, gyms and similar businesses may continue to operate in the same manner as well.

Limitation on purchases of protective equipment (10 masks/20 protective gloves per person). Limitation on price of masks to maximum price of 120 RSD with VAT (approx. EUR 1), on epidemiological masks 200 RSD with VAT (approx. EUR 2) and on gloves 40 RSD with VAT (approx. EUR 0.3).

For the purpose of preventing market disruption, price control has been imposed for essential basic foodstuffs, protective equipment, disinfectants and cosmetics. Prices can only be raised within the limits of the annual inflation rate.

Export bans for certain goods as explained in detail within Q3.

It has been announced that the direct sales of goods and direct provision of services in shopping malls and similar objects in which retail activities are performed will become permitted as of 8 May. On the same date, hangout venues (restaurants, cafes and similar) may open under condition that all preventive and sanitary measures are applied.

 

Note: the measures undertaken by the Government of Serbia explained above are being adopted and/or amended on a daily basis, and in most cases with immediate effect. While we believe that our answers above are well founded and justifiable, we cannot exclude the possibility that due to the state of emergency the Government of Serbia or other authorities may take views which will that deviate from our current findings.

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