Report for the second quarter of 2012 on regulatory reform status. The report contains recommendations from NALED's Grey Book and the Comprehensive Regulatory Reform, and the status of their implementation.

1. II Quarterly report /Regulatory reform status
REGULATORY
REFORM
STATUS
Report for the II quarter of 2012

2. II Quarterly report /Regulatory reform status 1
Regulatory reform status in the II quarter of 20121
Introduction
For the second year in a row, NALED has been monitoring the regulatory activity in Serbia,
and preparing quarterly reports on the progress and results of the Comprehensive Regulatory Reform
and the campaign Out of the Maze, in order to inform the business and professional public in Serbia
on the regulatory reform status and pace and encourage responsible institutions to act responsibly.
Quarterly report is being published on NALED website and submitted electronically to more
than 3,000 contacts, including decision-makers from private, public and civil sector. This way,
transparency is introduced into the process of conducting regulatory reform and the responsible
institutions are encouraged to work more efficiently.
Report summary
The trend of regulatory reform spotted in two previous quarters, occurred due to the pre-
election activities, has not changed. We may freely say that it has culminated in the II quarter of 2012.
Regulatory activities of the Parliament were almost non-existing, due to the scheduled
elections and post-election agreements on the formation of the new Government. The continuation of
this trend may be expected in the beginning of the next quarter, given that most of the third quarter
will be spent in forming the Parliamentary majority and forming the Government of the Republic of
Serbia.
The mentioned inertia of the pre-election and post-election period, when it comes to
regulatory reform, can be particularly noticed with the executive authorities, which can be seen
through the examples of law implementation monitoring and adoption of by-laws.
The slowness of reform process was particularly one of the reasons NALED started a media
campaign for the improvement of business environment titled Ask WHEN, in partnership with
National Broadcasting Service (RTS) and with the support of USAID Business Enabling Project
(BEP)and the Open Society Foundation. During the period of six months, which is the duration of the
campaign, NALED and RTS will broadcast short videos dealing with various bureaucratic problems
faced by the businesses in Serbia (complicated procedures, high and unnecessary taxes, unenforceable
laws) and inform the public on the status and importance of conducting regulatory reforms in our
country.
The idea of the campaign is to draw public attention and make positive pressure to the
responsible institutions to promise not only what, but WHEN certain bureaucratic problems will be
1 Report was prepared by NALED Executive Office.
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3. II Quarterly report /Regulatory reform status 2
solved. Business people and citizens will be able to report the complicated procedures that impede
their business or daily functioning and ask the elected representatives when these problems would be
solved. The questions may be asked on NALED website and on social networks with the support of Web
Sistem Media. All the collected proposals will be published on NALED website, and the most relevant
questions will be addressed in the Grey Book of Regulations and submitted as a petition to the new
Prime Minister and responsible ministries, who will be asked to provide a concrete answer. NALED will
monitor the work of institutions and report on their readiness to remove the administrative obstacles
for doing business, in order to inform the business and professional public in Serbia about the
regulatory reform status and pace, and encourage the responsible institutions to responsible actions.
75 laws were withdrawn from the Parliament procedure
The new parliamentary session, in accordance with the Law, has withdrawn all legal
proposals from the parliamentary procedure and returned them to their proposers, a total of 75.
Most of the withdrawn acts were submitted to the National Parliament in 2012, nine of them
being submitted after the parliamentary elections, including two which were submitted between the
two rounds of presidential elections.
It is important to note that these are very important laws, of crucial importance for the
businesses. Some of the withdrawn proposals have been articulated through previous public debate
with relevant organizations and stakeholders, and some were passed to the Parliament as urgent
procedure, despite the fact that it was clear that they wouldn't make it to the agenda of the previous
session and that they would be returned to the proposer upon the election of the new session.
This is another contribution to the politicization of regulatory reform for the purpose of pre-
election campaign in the previous period, which should certainly not be allowed in the future, since the
consequence is non-adoption of important regulations, which leads to additional burdens and losses
for businesses.
The most significant withdrawn proposals we would like to point out are the following:
- Draft Law on Officers in Local Government Units;
- Draft Administrative Procedure Law;
- Proposals for approval of additional government borrowing – meaning that the new
Government will once again consider the proposal for borrowing from Volksbаnk a.d. Beogrаd, for the
needs of constructing new irrigation systems, construction of secondary network and rehabilitation of
the existing canal network.
- Draft Law on the Development Bank – the draft law is expected to be placed for voting in the
Parliament
- Draft Law on the Conversion of Accrued and Unpaid Obligations Towards the Beneficiaries of
Military Pensions into Public Debt,
- Draft Law on Private Security and Draft Foreign Labor Law,
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4. II Quarterly report /Regulatory reform status 3
- Draft Law on the write-off of interest for obligations of paying certain taxes and mandatory
social insurance contributions,
-Draft Law on Adult Education, Elementary and High-School Education
As one of the most significant changes of laws, we point out the Public Procurement Law,
which will definitely not be returned to the Parliament in any form, bearing in mind that the
representatives of the new Government emphasized adoption of a new law on public procurement as
their priority. According to the announcements in front of the MPs, the new law should be adopted
already in September.
We will also mention the Law on Amendments and Supplements to the Law on Copyright and
Related Rights. Namely, the necessity of changing the previous law and proposing a new draft law can
be clearly seen when we analyze the example of the so-called „music dinar“ - the best indicator of how
a badly- designed and imprecisely determined para-fiscal charge may cause more harm than good, for
the direct payers of this charge, but also for the legislator who determined this charge and those
determined as direct beneficiaries of this income.
Speaking about harm, firstly we mean the disputes that arose from the very beginning of the
implementation of this charge, for various reasons – disagreements regarding the established rates,
establishment of associations which are entitled to collect charges for public broadcast of musical
works, interpretations and phonograms, as well as special fees etc. There were also individual cases
where the collection of these charges directly burdened business operations, i.e. it questioned a wide
range of business activities, starting from small craft shops, to large IT companies.
The greatest number of withdrawn laws are proposals for the ratification of international
contracts and agreements, for example, proposals for ratification of agreements of avoiding double
income and property taxation of Serbia with Georgia, Tunisia and Canada.
It is assumed that the ministries where the ministers remained the same will most probably
submit the proposals to the Government again, and they will probably be found in front of the MPs for
voting, in the same form.
Grey Book – overview of results
The Grey Book IV contains 80 recommendations for eliminating administrative obstacles for
doing business. During the past four years, institutions have eliminated or simplified 31 inefficient
procedures to NALED initiative. Bearing in mind the period of institutions forming, there was no
progress in solving problems in the previous period (for detailed overview of the status of
recommendations made to responsible institutions and potential savings, see Appendix 1).
This way, today we have 19 solved problems, 14 problems in the process of being solved or
partially solved, 12 new problems and 35 unsolved.
On this occasion we will repeat the key conclusions made at the meeting held with the
representatives of Tax Administration, which will definitely make doing business easier. It is planned
to enable access to the tax account through e-administration portal and submission of request for
submitting the tax account balance to an e-mail address. Within this procedure, the only obligation of
taxpayers will be stated in the note of the document itself, saying that, in case of non-compliance of
data, the taxpayer is referred to the responsible branch office in order to harmonize and update the
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data. Also, starting from April 1, submission of electronic VAT applications via the e-Tax
administration portal has been enabled.
According to the information provided by representatives of Tax Administration, the
businesses can expect additional services in the field of electronic business in the following period. The
following services have been announced:
 insight into the balance via the portal of Tax Administration
 introduction of electronic certificates of tax paid
 introduction of electronic application for mandatory social insurance contributions
 introduction of electronic application for contributions – individual application
By-Law Barometer
We continue monitoring the dynamics of adopting by-laws through the By-Law Barometer,
related to 17 laws adopted in the past two years that are important for improving the economic
competitiveness of the country.
In the second quarter of 2012, 8 by-laws were adopted related to the previously stated laws.
We can conclude that, the same as in the I quarter, the most active institution was the Ministry
of Justice with 4 adopted Regulations, whose adoption was necessary for the implementation of the
Law on Enforcement and Security. The Ministry of Economy and Regional Development and the
Securities Commission adopted one by-law each, while the Ministry of Environment, Mining and
Spatial Planning adopted 2 by-laws related to the Law on Planning and Construction.
If we observe the dynamics of adopting subject by-laws, we may conclude that all by-laws were
adopted late compared to the deadline specified in the law whose implementation they concern.
When it comes to delay in the adoption of relevant by-laws, the Ministry of Environment,
Mining and Spatial Planning is still the leader. In the process of implementing the Law on Planning
and Construction, they have adopted Regulation on the manner and procedure for opening and
implementing urbanistic-architectural open calls, 824 late compared to, in NALED's opinion, a
reasonable deadline of 6 months.
The field of construction and spatial planning has the largest number of by-laws that haven't
been adopted even two and a half years after the adoption of the relevant Law, which was stated in the
previous quarterly report as well.
For a detailed overview of adopted by-laws and the delays in their adoption, see Appendix 2.
Comprehensive Regulatory Reform – Overview of results
By the end of the II quarter of 2012, a total of 205 recommendations have been implemented,
which means that 2 recommendations have been implemented during the II quarter.
The calculated savings for businesses based on the implemented recommendations of CRR
have remained the same. We should point out that only one part of the CRR recommendations have
been quantified, while a large number of recommendations, even though they would provide potential
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savings, have not been quantified since there were no adequate data, or the calculation would be hard
to perform.
For the first time, we have classified the proposed recommendations of CRR, which have been
under the jurisdiction of the Office for Regulatory Reform and Regulatory Impact Assessment since
2010, by the criterion of jurisdiction based on the newly-established scheme of ministries within the
new Government.
Looking at the new scheme of ministries, most of the recommendations relate to the Ministry
of Finance and Economy, a total of 207. We can say that 4/5 of the recommendations have been
implemented, but that the largest number of recommendation that haven't been implemented, a total
of 42, are under the jurisdiction of this Ministry.
There are 10 non-implemented recommendations under the jurisdiction of the Ministry of
Labor, Employment and Social Policy, while the new Ministry of Construction and Urbanism will be in
charge of 3 non-implemented recommendations.
For a detailed overview of the status of CRR recommendations towards the regulatory
authorities and the new scheme of ministries, see Appendix 3.
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ANNEXES
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8. II Quarterly report /Regulatory reform status 7
Appendix 1.
Considering the responsible institutions, the status of Grey Book IV recommendations at the
end of II quarter of 2012 is as follows:
OVERVIEW OF RESULTS, JUNE 2012
RESPONSIBLE PROBLEMS / RESOLVED PARTIALLY UNRESOLVED NEW
INSTITUTIONS RECOMMEN PROBLEMS RESOLVED PROBLEMS RECOMME
DATIONS PROBLEMS / NDATIONS
IN PROCESS
Ministry of Finance 37 7 6 18 5
Ministry of Health 5 1 - 4 -
Ministry of Environment 7 1 1 2 3
and Spatial Planning
Ministry of Agriculture, 4 2 - 2 -
Trade, Forestry and
Water Management
Ministry of Economy and 3 2 - - 1
Regional Development
Ministry of Infrastructure 4 1 1 2 -
and Energy
Ministry of Human and 3 1 - 2 -
Minority Rights, Public
Administration and Local
Self-Government
Local government 2 - - 2 -
authorities
Ministry of Interior 2 - 2 - -
Ministry of Labor and 2 - - 1 1
Social Policy
Ministry of Culture, Media 1 - - 1 -
and Information Society
Ministry of Justice 2 1 - - 1
Problems under 6 2 3 1 -
jurisdiction of several
ministries
National Bank of Serbia 2 - 1 - 1
TOTAL 80 19 14 35 12
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Appendix 2.
OVERVIEW OF ADOPTED BY-LAWS IN II QUARTER OF 2012
( source: By-Law Barometer)
RESPONSIBLE LAW BY-LAW DEADLINE ADOPTED
INSTITUTIONS WITH
DELAY
(IN DAYS)
1. Ministry of Economy Company Law Regulation on activities 01/02/2012 124
and Regional considered old and artistic
Development crafts, i.e. domestic
businesses, the manner of
certification and keeping
special registry of issued
certificates (Article 88)
2. Ministry of Law on Planning Regulation on the conditions 13/06/20122 824
Environment, Mining and Construction and norms for designing
and Spatial Planning residential buildings and
apartments (Article 201)
3. Ministry of Law on Planning Regulation on the manner 13/06/20123 824
Environment, Mining and Construction and procedure for opening
and Spatial Planning and implementation of
urbanistic-architectural open
calls (Article 201)
4. Ministry of Justice Law on Regulation on the manner of 04/05/2012 168
Enforcement and keeping public record of
Security enforcement cases (Article
328, Paragraph 2)
5. Ministry of Justice Law on Regulation on the manner of 20/04/2012 154
Enforcement and enforcement officers' annual
Security reports
6. Ministry of Justice Law on Regulation on disciplinary 04/05/2012 168
Enforcement and procedure against an
Security enforcement officer (Article
355, Paragraph 4)
7. Ministry of Justice Law on Regulation on the rates and 18/05/2012 182
Enforcement and awards and fees for the work
Security of enforcement officers
Securities The Law on Regulation on the conditions 18/05/2012 182
8. Commission Capital Market for performing financial
statements audit of public
companies
2 The Law itself does not proscribe a deadline for adopting certain by-laws, so for the needs of NALED By-law
Barometer, respecting the comparative legal practice, NALED has determined a deadline of 6 months from the
date of Law entering into force, as a reasonable deadline in these cases.
3 The Law itself does not proscribe a deadline for adopting certain by-laws, so for the needs of NALED By-law
Barometer, respecting the comparative legal practice, NALED has determined a deadline of 6 months from the
date of Law entering into force, as a reasonable deadline in these cases.
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Appendix 3.
CRR
OVERBIEW OF THE STATUS OF RECOMMENDATIOS TOWARDS RESPONSIBLE REGULATORY
AUTHORITIES
RESPONSIBLE INSTITUTIONS NO. OF NO. OF NO. OF NO. OF NON-
RECOMME IMPLEMENTED RECOMMENDA IMPLEMENTED
NDATIONS RECOMMENDA TIONS IN RECOMMENDATI
TIONS PROCESS ONS
1. Ministry of Finance and Economy 207 160 5 42
2. Ministry of Construction and 4 1 0 3
Urbanism
3. Ministry of Energy, Development 1 1 0 0
and Environmental Protection
4. Ministry of Health 9 9 0 0
5. Ministry of Culture and 1 1 0 0
Information
6. Ministry of Agriculture, Forestry 4 3 0 1
and Water Management
7. Ministry of Justice and Public 7 3 1 3
Administration
8. Ministry of Education, Science and 7 3 0 4
Technological Development
9. Ministry of Labor, Employment 11 1 0 10
and Social Policy
10. Ministry of Transport 12 10 1 1
11. Ministry of Foreign and Home 8 6 0 2
Trade and Telecommunications
12. Ministry of Interior 1 1 0 0
13. Republic Geodetic Authority 2 1 1 0
14. Republic Institute for Health 1 1 0 0
Insurance
15. National Bank of Serbia 1 1 0 0
16. Intellectual Property Office 1 0 0 1
17. Tax Administration 1 0 0 1
18. Several regulatory authorities 26 3 20 3
TOTAL 304 205 28 71
SAVINGS in EUR million 124 22.9 36.2
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