Foreign Trade Act

Measures of protection from unfair competiton according to Foreign Trade Act

Foreign Trade Act (“Off. Herald of RS”, Nos. 36/2009, 36/2011 – other act, 88/2011 and 89/2015 – other act) contains certain protection against unfair competition in a broader sense. In this sense by this law shall be predicted that the Government of the Republic of Serbia may prescribe the following measures of protection:

  1. Antidumping measures
  2. Compensatory measures
  3. Measures for the protection against excessive importing
  4. Measures for the protection of the balance of payments equilibrium.

Antidumping Measures

For the purposes of the Foreign Trade Act (“Off. Herald of RS”, Nos. 36/2009, 36/2011 – other act, 88/2011 and 89/2015 – other act):

  1. An “antidumping measure” is a special levy on the import of products, which is introduced for the purpose of removing the negative impacts of dumping
  2. “Dumping” is an import of products into Serbia for a price which is lower than the normal value of similar products in the exporting state or customs territory
  3. “Normal value” is a price of a similar product in the market of the exporting country or customs territory, as fixed under normal trading conditions in that exporting state or customs territory, or in the case of insufficient sale in the domestic market, the cost price plus the sale, general and administrative costs.

Application of Antidumping Levies

The Government of the Republic of Serbia introduces antidumping levies at the Ministry’s competent for foreign trade relations recommendation and upon completion of the investigation procedure conducted by the Ministry, if the following are found to be existent:

  1. Dumping
  2. Damage suffered by domestic industry, and
  3. Causal relationship between dumping and damage.

In terms of the previous paragraph:

  1. “Domestic industry” is a total output of all domestic producers of similar products or those whose total output in similar products makes up the major part of the total domestic output in such products
  2. “Damage” is a material damage done to the domestic industry, hazard of the occurrence of material damage or considerable slowing-down in incorporation of such industry.

The Government of the Republic of Serbia sets in greater detail the requirements for the application of antidumping measures by the Regulation of detailed conditions for the application of antidumping measures (“Off. Herald of RS”, No. 112/2009).

Compensatory Measures

In terms of the Foreign Trade Act (“Off. Herald of RS”, Nos. 36/2009, 36/2011 – other act, 88/2011 and 89/2015 – other act):

  1. A “compensatory measure” is a special levy on the import of products, which is introduced for the purpose of removing the negative impacts of the subsidizing done in the state or customs zone of origin, i.e. export of products
  2. A “subsidy” is a direct or indirect financial contribution or any support to prices or income provided by the government in the state or customs territory of origin, i.e. export of products, in favour of producers, production, export or transport of such products to the Republic of Serbia, whereby the subsidy recipients achieve benefit.

Application of the Compensatory Levy

The Government of the Republic of Serbia introduces a compensatory levy at the proposal of the Ministry competent for foreign trade relations and upon completion of the investigation procedure conducted by the Ministry competent for foreign trade relations, if it finds that the following exists:

  1. A subsidy
  2. A damage for domestic industry, and
  3. Existence of a causal relationship between subsidy and damage.

The Government of the Republic of Serbia sets in greater detail the conditions for the application of compensatory measures by the Regulation of detailed conditions for the application of compensatory measures (“Off. Herald of RS”, No. 112/2009).

Measures of Protection against Excessive Importing

A measure of protection against excessive importing may be applied to a product only if it has been established that such product is being imported in such increased quantities, in absolute and relative values in relation to domestic production, and under such conditions, as will cause or threat to cause serious damage to domestic industries which are producing similar or directly competitive products.

In terms of the foregoing:

  1. “Serious damage” is a considerable general deterioration of the domestic industry’s position.
  2. “Threat to cause serious damage” is an unambiguous threat of the occurrence of serious damage. The determination of the existence of a threat to cause serious damage shall be based on facts, not on statements, guesses or possibilities.
  3. “Domestic industry” is the total output of all domestic producers of similar or directly competitive products or of those producers whose total joint output in such products makes up the major portion of domestic output in such products.

The Government of the Republic of Serbia sets in greater detail the conditions for application of the measures of protection against excessive importing by the Regulation of detailed conditions for application of the measures of protection against excessive importing (“Off. Herald of RS”, No. 112/2009).

Measures for the Protection of the Balance of Payments Equilibrium

A measure for the protection of the balance of payment equilibrium may be introduced if it is necessary to:

  1. Stop a considerable decline in the foreign currency reserves or prevent an immediate threat of a considerable decline in the foreign currency reserves, or
  2. Increase the very low foreign currency reserves.

Measures based on price may be introduced for the purpose of protection of the balance of payments equilibrium, in accordance with the law.

The measures based on price include the import duties, import deposit requirements and other trade measures that affect the price of imported goods.

Measures for the protection of the balance of payments equilibrium shall be applied only to the extent which is justified under the circumstances specified in the Foreign Trade Act (“Off. Herald of RS”, Nos. 36/2009, 36/2011 – other act, 88/2011 and 89/2015 – other act), and the extent of measures shall gradually be reduced as balance of payments improves.

The criteria for selecting the products which are subject to measures for the protection of the balance of payments equilibrium must contain an explanation. Certain basic products may be exempted from the application of measures for the protection of the balance of payments equilibrium.

Measures for the protection of the balance of payments equilibrium may neither be introduced nor applied for the purpose of protection of domestic manufacturers.

The Government of the Republic of Serbia prescribes the more detailed conditions for the implementation of measures to protect the balance of payments equilibrium at the proposal of the competent Ministry, i.e. the National Bank of Serbia, in accordance with the law.

Other regimes and measures of protection

Collection, i.e. Payment in Goods, i.e. Services

A domestic person may charge or pay for the exported i.e. imported goods and services, in goods i.e. services, especially if it involves the procurement of equipment, intermediate materials and raw materials earmarked for the production of goods and provision of services, and if it involves the services provided in the process of active or passive outward processing, in keeping with customs regulations, and the payment or collection is made in the goods which are being subject to outward processing, i.e. in outward processed goods.

The Government of the Republic of Serbia may set in greater detail the conditions of payment and collection in goods, i.e. services.

Exporting and Importing without Collection, i.e. Payment

Goods and services may be exported, i.e. imported without collection, i.e. payment for the purpose of performance of contractual commitments and in other cases provided by the Government of the Republic of Serbia.

Exceptions related to the Goods Purchased in another State or Customs Territory

A domestic person does not have to do the following with the goods purchased by in another state or customs territory:

  1. Import them, if such goods are, under a contract, directly delivered to another state or customs territory, or
  2. Put them in free circulation on the market, if such goods, after the appropriate customs procedure, are dispatched beyond the territory of the Republic of Serbia.

Tracking of Some Foreign Trade Transactions

For the purpose of upgrading the foreign trade operations and for the sake of more efficient implementation of the Foreign Trade Act (“Off. Herald of RS”, Nos. 36/2009, 36/2011 – other act, 88/2011 and 89/2015 – other act), and other regulations affecting the foreign trade operations, the Government of the Republic of Serbia may impose the obligation of keeping a record of or reporting on some foreign trade transactions and set the contents of such records and reports. A goal or a consequence of the application of this measure may not be the additional limitation to the freedom of foreign trade.

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