Serbia

The Law on Bankruptcy Procedure (the new one) was passed in 2004 and came into effect in 2005. Prior to this there was a Law on Forced Settlement, Bankruptcy and Liquidation (the old one), passed in 1989. The Law on Bankruptcy Procedure introduced the following novelties: only individuals who have a license may be bankruptcy administrators; it establishes a new institution – The Bankruptcy Supervision Agency; and it introduces a possibility that a separate institution, the Bankruptcy Center Agency, may act as a bankruptcy administrator.

The Bankruptcy Supervision Agency is an institution in charge of formation of the bankruptcy administrator profession in Serbia. The main tasks of the Agency, among other things, are issuing, renewing and revoking of licenses required for bankruptcy administrators; activities in relation to supervision of their work; and statistics of various bankruptcy procedures.

The Bankruptcy Center Agency acts as a bankruptcy administrator for those economic entities whose majority capital is owned by the state – that is, state owned enterprises.

Key Legislation

• The Law on Bankruptcy Procedure
• The Law on Bankruptcy and Liquidation of Banks and Insurance Companies
• The Law on Bankruptcy Supervision Agency
• Manual for Constitution of National Standards for Management of Bankruptcy Estates

Insolvency Procedures

The Law on Bankruptcy Procedure provides a legal framework for closing insolvent economic entities. A bankruptcy debtor may be a company, a private enterpreneur, a bank or an insurance company.

A bankruptcy procedure can end in two ways: one is reorganization, that is ‘’recuperation’’ of the entity; or bankruptcy, that is partial or total sale of the bankruptcy debtor’s assets. This Law also provides the procedure that the creditors follow when they declare their claims, as well as the procedure for order in which the claims are to be paid.

The Law on Bankruptcy and Liquidation of Banks and Insurance Companies is a special piece of legislation that regulates the bankruptcy procedure for banks and insurance companies and acts as an addition to the Law on Bankruptcy Procedure.

Roles

The bodies involved in the bankruptcy procedure are:

The Court (Bankruptcy Panel and bankruptcy judge); licensed bankruptcy administrators; and bodies of the creditors (creditors commission and assembly).

The role of the court is to make sure that the procedure provided by the Law is followed. A bankruptcy administrator has an operative function and his/her duty is to manage the bankruptcy procedure with the assent of the Court and the bodies of the creditors. The bodies of the creditors control the work of the bankruptcy administrator and give their approval to the bankruptcy administrator for the most relevant activities within the procedure.

At a Glance

Does the insolvency system in Serbia allow for:

1.	Different procedures for the insolvency of individuals and the insolvency of companies?
2.	Creditors to accept an arrangement outside of formal bankruptcy/liquidation proceedings?
3.	Priority payment for employee creditors?
4.	Priority payment for taxation debts?
5.	Automatic disqualification of directors of failed companies from managing other companies?
6.	Recognition of insolvency proceedings being conducted in another jurisdiction?
7.	A government agency to undertake insolvency administration work?
8.	Some form of licensing of private sector practitioners?
9.	A review of the remuneration claimed by an insolvency practitioner by either a court or other government regulator?
10.	A mandatory scale of fees applicable to insolvency practitioner remuneration?
11.	Surveillance of the work of private sector practitioners by a government regulator?
12.	Collation of insolvency statistics by a government regulator?