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With the judgement case no. C-555/21 the Court of Justice of the European Union (“CJEU”) answered a preliminary question addressed to it by the Austrian Supreme Court regarding the interpretation of Directive 2014/17 on credit agreements for consumers relating to residential immovable property.The Austrian Supreme Court addressed the request for the preliminary ruling in relation to ongoing court proceedings in which the local association for the protection of the interests of consumers (Ger. Verein für Konsumenteninformation) challenged the general condition used by UniCredit Bank Austria in its credit agreements secured by mortgages. With the disputed general term, the bank, in the case of early repayment of a credit agreement, proportionally reduces only the interest and costs of the credit which are linked to the duration of the credit and does not take into account the proportional reduction for those costs that do not depend on the duration of the agreement (e.g. credit processing costs).With respect to the addressed question whether Directive 2014/17 precludes the national legislation, which grants a consumer with a right to reduce the total cost of credit in the event of early repayment, namely reduction of interests and costs which depend on the duration of the agreement, the CJEU answered that the directive does not preclude such legislation. In case of early repayment, the consumer can therefore only request a reduction of interest and costs which depend on the duration of the agreement.The CJEU emphasized that the purpose of the right to reduce the total costs of the credit is to adjust the credit agreement according to the circumstances of an early repayment. This right, therefore, does not include the right to reduce the costs (i) that the consumer bears regardless of the duration of the agreement and (ii) of services that have already been completed at the time of the early repayment. Furthermore, the CJEU also emphasized that national courts must ensure that the costs borne by the consumer in the event of early repayment do not objectively represent a remuneration of the creditor for temporary use of the capital or payment for services which have not yet been performed.

With the judgment case no. C-555/21 the Court of Justice of the European Union (“CJEU”) answered a preliminary question addressed to it by the Austrian Supreme Court regarding the interpretation of Directive 2014/17 on credit agreements for consumers relating to residential immovable property.

Early repayment of a consumer mortgage loan and reduction of costs that do not depend on the duration of the credit agreement

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Since the beginning of the war in Ukraine, 219,153 Russian citizens have immigrated to Serbia. In contrast, over the past year, more than four thousand Russian entrepreneurs and companies have been established in Serbia. In response to the newly emerging market circumstances, the Government of Serbia adopted the Decree on the criteria for awarding incentives to employers who employ foreign nationals in mid-June of last year. Under the conditions defined by the Regulation, for each employed foreigner, employers can obtain subsidies of 70% of the paid salary tax and 100% of the paid contributions for the Republic Fund for Pension and Disability Insurance.One of the primary criteria for awarding incentives is that the employer and the foreign citizen conclude an employment contract for an indefinite period, with a monthly salary of at least 300,000 dinars. However, this type of engagement is not following the Labor Law, which stipulates that an employer with a foreign citizen can only establish an employment relationship for a certain period for the validity of the work permit issued to the foreigner.Since the provisions of the Labor Law have a more vital legal force than the Regulation, the question of the practical scope of the Regulation itself is justified. The creator of the Regulation did not think to read the provisions of the Labor Law beforehand or at least consult with the relevant Ministry before the Regulation was adopted.In light of such circumstances, the Ministry of Labor issued an official opinion on this topic at the request of an employer who hired Russian citizens in February of this year. In its opinion, the Ministry notes that a foreigner can establish a working relationship for a fixed period but that a public discussion is underway on the amendments to the Law on the Employment of Foreigners, which will stipulate that the employer can conclude an employment contract with a foreigner for an indefinite period.Only after the entry into force of the changes mentioned above will employers be able to legally employ foreigners indefinitely and apply for the award of incentives provided for in the Regulation. In the meantime, may the creator of the Regulation think of passing a new regulation?This text is for informational purposes only and should not be considered legal advice. Should you require any additional information, feel free to contact us.Contact:Kristina Pavlović, Associate <a href="mailto:kristina.pavlovic@sog.rs">kristina.pavlovic@sog.rs</a>

Since the beginning of the war in Ukraine, 219,153 Russian citizens have immigrated to Serbia. In contrast, over the past year, more than four thousand Russian entrepreneurs and companies have been established in Serbia. In response to the newly emerging market circumstances, the Government of Serbia adopted the Decree on the criteria for awarding incentives to employers who employ foreign nationals in mid-June of last year.

Employment of Foreign Nationals – Current Conflict of Regulations

Energy

The European Union has set ambitious targets for the development of renewable energy sources, aiming to reach 32% of total energy consumption by 2030. Furthermore, energy from from renewable sources can reduce the EU’s demand for fossil fuels and thanks to their low operational costs, more renewables in the EU’s energy system can lower energy prices. To achieve this goal, a significant increase in the deployment of renewable energy projects is necessary. However, the permit-granting process for these projects can be lengthy and complex, often involving multiple agencies and levels of government.To address this issue, the European Council has adopted a regulation establishing a temporary framework to accelerate the permit-granting process for renewable energy projects. The regulation applies to all EU member states and covers a wide range of renewable energy technologies, including solar, wind, geothermal, and hydropower.Maximum deadlinesUnder the temporary framework established by the Council Regulation, member states are required to ensure that the permit granting process for renewable energy projects is completed within certain time limits. These maximum time limits are as follows:<ul><li>a deadline of one monthfor the installation of heat pumps below 50MW and three months in case of ground source heat pumps;</li><li>a deadline of three months permit-granting process for the installation of solar energy equipment and co-located energy storage assets,</li><li>a deadline of six monthsfor the permit-granting process for repowering projects including all relevant environmental assessments. Where repowering results in an increase of up to 15 % in the capacity of the power plant, grid connections will be permitted within three months.</li></ul>Presumption of overriding public interestThe planning, construction and operation of plants and installations for the production of energy from renewable sources, and their connection to the grid, the related grid itself and storage assets is presumed to be in the overriding public interest and serving public health and safety when balancing legal interests in the individual case.Projects which are recognised as being of overriding public interest are given priority when balancing legal interests in the individual case during the planning and permit-granting process, the construction and operation of plants and installations for the production of energy from renewable sources and the related grid infrastructure development are given priority when balancing legal interests in the individual case.The regulation is valid for a period of 18 months from its entry into force.Overall, the regulation represent  a positive step towards meeting the EU’s renewable energy targets and supporting the transition to a low-carbon economy. It will help to remove barriers to the development of renewable energy projects, encourage the growth of this important sector and hopfully soone have an impact on the market energy prices.

The European Union has set ambitious targets for the development of renewable energy sources, aiming to reach 32% of total energy consumption by 2030. Furthermore, energy from renewable sources can reduce the EU’s demand for fossil fuels and thanks to their low operational costs, more renewables in the EU’s energy system can lower energy prices. To achieve this goal, a significant increase in the deployment of renewable energy projects is necessary.

Council Regulation (EU) 2022/2577 – introducing a new temporary emergency regulation to accelerate the permit-granting process and the deployment of renewable energy projects

At the end of 2021, the total number of active banks in the Serbian market was 23. The consolidation trend continued and financial results on the sector level in 2021 indicate the same trend for the next years.Total assets on a sector level on 31 December 2021 were EUR 42.9bn. The concentration is increasing. The top 10 banks have assets of EUR 36.4bn, which is 84.8% of the total assets. The top 5 banks have assets of EUR 24.4bn, which is 56.9% of the total assets in the Serbian banking sector.

The number of systematically important banks, meaning banks that participate with at least 5% of the total assets is 9.A very similar situation is on the deposit side, hence top 10 banks participate with 85.5% of the total deposit level on a sector level.In terms of size measured by the number of employees, over 2000 employees on 31 December 2021, have: Intesa (3059), OTP (2916), Komercijalna (2350), and Postanska (2557). This data is mostly in close correlation with the number of branches. Over 100 branches have the following banks: Intesa (178), Komercijalna (206), and Postanska (236).Only the top 9 banks by assets on 31 December 2021 realized net interest income above EUR 50.

Regarding profits on 31 December 2021, the results for the top 10 are the following.

The situation here is the most extreme because only one of the banks below the top 10 by assets made a profit above EUR 10m. The total profit for the top 10 banks made EUR 417.9m, which is 91.2% of the total sector in 2021.The profitability of the whole sector analyzed through the ROAE ratio is as follows.

As we can see 12 banks has this ratio above 5%, and 5 banks have 10% or more.When it comes to CIR (cost/income) ratio, the status among the top 10 is very different.

The years 2021 and 2022 are still significantly marked by M&amp;A activities. Some of the processes have come to an end, and some are still ongoing. After acquiring Vojvodjanska bank, Hungarian OTP subsequently acquired the Serbian branch of the Societe Generale Bank. On 1st July 2021, the state-owned Banka Poštanska štedionica concluded the acquisition of MTS Banka. In April 2022 the merger of the Komercijalna bank and the Slovenian NLB bank took place. One more french banking group abandoned the Serbian market. Raiffeisen acquired in April 2022 the Serbian branch of Credit Agricole banking group. Eurobank and Direktna bank merged into one bank in December 2021. Russian Sberbank sold its branch to the Serbian AIK bank in March 2022.Currently, at least 3 banks in Serbia are up for sale. The exit of the 2 global banking groups already happened. A huge part of the market is now in the hands of the regional banking groups NLB and OTP, while Austria and Italy still traditionally keep their significant influence on the market. There are 2 Serbian banks among the top 10. The state still has the opportunity to support and develop Postanska bank, while AIK bank confidently keeps its momentum and position.This text is for informational purposes only and should not be considered legal advice. Should you require any additional information, feel free to contact us.Contact:Miloš Velimirović , Managing Partner <a href="mailto:milos.velimirovic@sog.rs">milos.velimirovic@sog.rs</a>

At the end of 2021, the total number of active banks in the Serbian market was 23. The consolidation trend continued and financial results on the sector level in 2021 indicate the same trend for the next years. Total assets on a sector level on 31 December 2021 were EUR 42.9bn. The concentration is increasing. The top 10 banks have assets of EUR 36.4bn, which is 84.8% of the total assets. The top 5 banks have assets of EUR 24.4bn, which is 56.9% of the total assets in the Serbian banking sector.

Biljana
Miloševska

Early repayment of a consumer mortgage loan and reduction of costs that do not depend on the duration of the credit agreement

Employment of Foreign Nationals – Current Conflict of Regulations

Council Regulation (EU) 2022/2577 – introducing a new temporary emergency regulation to accelerate the permit-granting process and the deployment of renewable energy projects

A Brief Analysis of The Serbian Banking Sector 2022: Current Trends and Perspectives

Let’s work together.

Konstantinović Miloševski Law firm

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Address

BiljanaMiloševska

Early repayment of a consumer mortgage loan and reduction of costs that do not depend on the duration of the credit agreement

Employment of Foreign Nationals – Current Conflict of Regulations

Council Regulation (EU) 2022/2577 – introducing a new temporary emergency regulation to accelerate the permit-granting process and the deployment of renewable energy projects

A Brief Analysis of The Serbian Banking Sector 2022: Current Trends and Perspectives

Let’s work together.

Konstantinović Miloševski Law firm

Contact

Address

Biljana
Miloševska