SERBIA Law and Practice Contributed by: Milica Subotić and Julijana Jevtić, Subotić Law
understood that there has been no such case before the Serbian NCA. 2.2 Failure to Notify A failure to notify the Serbian NCA of a notifiable trans - action and/or its implementation without obtaining a prior clearance decision is subject to a fine of up to 10% of the total annual turnover generated in Serbia in the preceding year. There has been a significant increase in the opening of ex officio investigation proceedings for breaches of the Competition Act. In that context, since 2017, the Serbian NCA has initiated ten investigations relating to concentrations implemented without prior notification and consequently without a prior clearance decision (a so-called gun-jumping violation). Four concentrations were later cleared by the Ser - bian NCA. However, within the same decision, the said authority imposed a monetary fine against the acquirer. These decisions have been made public. As to the other four investigations, in one it was deter - mined that the relevant jurisdictional thresholds were not fulfilled, while the five remaining investigations are still ongoing. In most of these cases, both parties to the concentration generated a turnover on the Serbian market, so the transaction theoretically could affect competition in Serbia. In two cases, an investigation proceeding was initiated against an acquirer that is a foreign company. 2.3 Types of Transactions Pursuant to the Competition Act, the following types of transactions are to be considered as concentra - tions: • mergers and other statutory changes leading to consolidation of undertakings; • acquisitions by one (sole control) or more (joint control) undertakings of direct or indirect control over another undertaking or undertakings, or parts of undertakings that can be considered to consti - tute an individual business unit; and • establishments of joint ventures or acquisitions of joint control over existing undertakings, performing on a long-term basis all functions of an autono - mous undertaking.
Based on the practice of the Serbian NCA, acquisi - tion of control over the assets shall be considered as a concentration only if such assets constitute a busi - ness with a market presence to which a turnover can be attributed. The Competition Act does not cover internal restruc - turings or reorganisations, provided they do not result in a change of control. Transactions not involving the transfer of shares or assets (eg, shareholders’ agreements, changes to arti - cles of association) may be notifiable if they involve a change of control. The Competition Act specifies that there is no obliga - tion to file a merger notification in the following situ - ations: • where banks, other financial undertakings or insur - ance companies whose normal activities include transactions and dealing in securities are tempo - rarily in possession of interests in an undertak - ing acquired with the intention to resell, provided that they do not exercise ownership rights for the purpose of determining the competitive conduct of that undertaking and that the disposal takes place within one year of the date of acquisition; • where control is acquired by a bankruptcy admin - istrator; • where an investment fund or investment fund holding company acquires an undertaking, pro - vided that the voting rights held by such company are only exercised to retain the full value of the acquired undertaking and not to determine its competitive conduct; or • the creation of a joint venture that has as its aim the co-ordination between two or more undertak - ings that retain their independence, whereby each joint venture will be assessed in accordance with the rules on restrictive agreements. 2.4 Definition of “Control” Pursuant to the Competition Act, an undertaking is deemed to have control over another undertaking if it has the potential to exercise decisive influence on the latter’s activities. Such influence can be based on:
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