Serbia: Four New Block Exemptions on the Cards

Serbia

Serbia: Four New Block Exemptions on the Cards

The Serbian Competition Commission has recently published its annual report for 2016. Among the parts of the report catching the eye is the Commission’s announcement that during this year it plans to draft four new block exemption regulations for restrictive agreements. Once the drafting is completed, the Commission would submit the regulations to the Government for adoption.

Block exemptions in place

The Serbian system of block exemption is comparable to the one in place in the EU. Based on the Competition Act, the Government may adopt block exemption regulations for certain categories of agreements. Agreements satisfying the conditions for block exemption are automatically exempt from prohibition and do not need to be notified to the Commission.

So far, the Government has adopted three block exemption regulations, pertaining to:

  • Vertical agreements,
  • Horizontal agreements on specialization, and
  • Horizontal agreements on research and development.

All of these are based on the relevant EU regulations, with some minor deviations. For instance, in the Serbian vertical block exemption the block exemption threshold is set at 25% instead of 30%.

Block exemptions in the pipeline

If the Commission’s plans go through, Serbia will soon get four more block exemptions, covering:

  • Agreements in the insurance sector,
  • Technology transfer agreements,
  • Vertical agreements in the motor vehicle sector, and
  • Agreements in the sectors of transport by road, rail, and inland waterway.

The adoption of these block exemptions would be very much welcome from a policy perspective, as they would fill in certain voids which exist in the current framework and bring that framework even more in line with the EU acquis.

Individual exemption by notification soon to be history?

Unlike its block exemption system,  Serbia’s system of individual exemption is different from the one in the EU. Actually, it is comparable to the system which in the EU existed under EC Regulation 17/62.

Specifically, in order for an agreement to benefit from an individual exemption from prohibition, it needs to be notified to the Competition Commission, which then assesses whether the conditions for exemption are met. The Commission can grant an exemption for a period of up to eight years.

A downside of this system of individual exemption is that it mobilizes the Commission’s resources which could be utilized in other ways, which is an argument for its scrapping. And once the new block exemptions are adopted the arguments for dispensing with the notification will be even stronger. This is since then there will be less agreements not covered by block exemptions, which would diminish the significance of individual exemption.

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