TerraLex Guide to Anticorruption Legislation

Serbia is not a signatory to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.

Serbian anti-corruption rules are embodied in:

• the Criminal Code (“Official Gazette of the Republic of Serbia”, Nos. 85/2005, 88/2005, 107/2005, 72/2009, 111/2009, 121/2012, 104/2013, 108/2014, 94/2016 and 35/2019);
• the Anti-Corruption Act (“Official Gazette of the Republic of Serbia”, No. 35/2019, 88/2019, 11/2021 - authentic interpretation, 94/2021 and 14/2022);
• the Act on the Liability of Legal Entities for Criminal Offences (“Official Gazette of the Republic of Serbia”, no. 97/2008);
• the Prevention of Money Laundering and Terrorist Financing Act (“Official Gazette of the Republic of Serbia”, Nos. 113/2017, 91/2019, 153/2020 and 92/2023);
• the Lobbying Act (“Official Gazette of the Republic of Serbia”, Nos. 87/2018 and 86/2019);
• the Act on Financing Political Activities (“Official Gazette of the Republic of Serbia”, no. 14/2022);
• the Act on Organization and Jurisdiction of the Government Authorities in Suppressing Organized Crime, Terrorism and Corruption (“Official Gazette of the Republic of Serbia”, Nos. 94/2016, 87/2018 – other law and 10/2023).

The Criminal Code sets out several corruption offences against (i) economic interests and (ii) official duty. The main offences to be considered are:

• the malfeasance to acquire unlawful material gain (Article 227 of the Criminal Code);
• the malfeasance related to public procurement (Article 228 of the Criminal Code);
• the malfeasance in the privatization procedure (Article 228 (a) of the Criminal Code);
• offering and taking bribe in performing economic activity (Articles 230 and 231 of the Criminal Code respectively);
• offering and taking bribes when performing official duty (Articles 367 and 368 of the Criminal Code).

The Anti-Corruption Act (“Act”) prohibits various actions to public officials, as follows:

• subordination of public interests to personal interests (Article 40 of the Act); performing other work or business activity at the time of assuming public office (Article 45 of the Act);
• performing other work or business activities while discharging a public office that requires full-time or permanent work (Article 46 of the Act);
• establishing a company or public service or entrepreneurship, as well as representation, membership, or exercising management rights in a privately owned company (Article 48 of the Act);
• accumulation of public offices, unless necessary to hold two or more (Article 56 of the Act);
• reporting false information on the property and/or failing to report property (Article 101 of the Act).

Yes, the Criminal Code covers bribes to foreign officials (Articles 367 (5) and 368 (3)).

Yes, the Criminal Code covers business-to-business corruption (Articles 230 and 231).

Facilitation payments are not allowed by Serbian legislation. Moreover, the Anti-Corruption Act does not allow public officials to receive gifts, except for protocol gifts and appropriate gifts.

Pursuant to the Act on the Liability of Legal Entities for Criminal Offences, a company can be liable for acts of third persons, only if: (i) a third person operates under the supervision or control of the responsible person in the company, (ii) the offense is committed for the benefit of the company, (iii) there is lack of control or supervision by the responsible person.

The Criminal code shall apply to:

• Anyone who commits a criminal offence abroad if committed against the Republic of Serbia or its citizen;
• Anyone who commits a criminal offence of forgery in case the forgery relates to domestic money;
• Any Serbian citizen when he/she commits a criminal offence abroad if found in the territory of the Republic of Serbia or is extradited to Serbia (also applied to the perpetrator of a criminal offence who became a Serbian citizen after having committed the criminal offence);
• A foreigner who commits a criminal offence outside Serbian territory against the Republic of Serbia or a Serbian citizen if that person is found on the Serbian territory or is extradited to the Republic of Serbia; and
• A foreigner who commits a criminal offence against a foreign country or a foreign citizen, outside the Serbian territory, when such offence is punishable by five year imprisonment or a heavier penalty, pursuant to laws of the country of commission, and in case such person is found on the Serbian territory and is not extradited to the foreign state.

Yes, directors can be found personally liable. Responsible person, as defined under Article 112 (5) of the Criminal Code, is liable for malfeasances (see Article 227 of the Criminal Code).

The sanctions for directors include imprisonment and fines. In particular, the sanctions that may be imposed are:

• the imprisonment from 3 months to 3 years for the malfeasance prescribed under Article 227 of the Criminal Code. In case the acquired gain exceeds the amount of ≈4,150 USD, the sanction ranges from 6 months to 5 years of imprisonment. If the gain acquired exceeds ≈13,800 USD, the sanction is 2 to 10 years of imprisonment;
• the imprisonment from 2 to 12 years for receiving bribe when performing official duty (up to 15 years if this offense is done in connection with the criminal procedure). For offering a bribe in the performance of official duty, the sanction is 6 months to 5 years of imprisonment;
• the imprisonment from 1 to 8 years for receiving bribe in the performance of a business activity. For offering a bribe in performing a business activity, the sanction is 3 months to 3 years of imprisonment.

Corporations are subject to sentences and security measures. Sentences include (i) fines calculated with respect to the duration of the prescribed prison sentence (e.g. if 1-year imprisonment is prescribed for an offense, the company will be sanctioned with a fine ranging from ≈925 USD – ≈9,250 USD) and (ii) termination of a legal entity.

Yes, companies in Serbia can be held liable for corruption offences. A legal entity can be held accountable if a responsible person within the entity commits a criminal offence (e.g., corruption) within the scope of their duties or authority, with the intent to procure a benefit for the entity. This liability extends to situations where inadequate supervision or control by the responsible person enables another individual, acting under their supervision, to commit an offence that benefits the entity.

The liability of the legal entity is premised on the culpability of the responsible person. This liability persists even if criminal proceedings against the responsible person are discontinued or if the charges are dismissed. Additionally, in the event of the legal entity's termination or a status change, such as a merger or acquisition, the liability can transfer to the legal successor, provided it is feasible.

Whistleblowing mechanisms

There is an obligation to protect whistleblowers in accordance with the provisions of the Whistleblowing Act. Whistleblowing can be internal (when the information is disclosed to the employer), external (when the information is disclosed to an authorized body), or public whistleblowing.

In the case of internal whistleblowing, the employer's obligations are to:

(i) protect the whistleblower and their identity,

(ii) take measures to rectify any identified irregularities related to the information disclosed,

(iii) take necessary measures to stop harmful actions and eliminate the consequences of such actions.

The general obligations of the employer under the Whistleblowing Act are:

(i) upon the employee's commencement of work, to provide the employee with written notification of the whistleblower's rights as prescribed by the Whistleblowing Act,

(ii) to adopt a decision appointing a responsible person for managing the internal whistleblowing process,

(iii) to adopt a general act on internal whistleblowing if the employer has more than 10 employees.

Sanctions

 Violations of the provisions of the Whistleblowing Act are classified as misdemeanors. Accordingly:

(i) A fine of ≈450 USD to ≈4,500 USD will be imposed on an employer – a legal entity with more than ten employees – if it fails to adopt or prominently display the general act on the internal whistleblowing process. The responsible person in the legal entity will be fined 92 USD to 920 USD in this case.

(ii) On the other hand, an employer – an entrepreneur will be fined 185 USD to 1,850 USD for the same misdemeanor.

The same amounts of fines are prescribed if the employer (whether a legal entity or an entrepreneur):

(i) fails to protect the whistleblower from harmful actions or does not take necessary measures to stop such actions and eliminate their consequences, within their authority;

(ii) does not provide all engaged personnel with written notification of the rights under this law;

(iii) fails to appoint a person authorized to receive information on whistleblowing and manage the whistleblowing process;

(iv) fails to act on the whistleblowing information within the prescribed period;

(v) fails to notify the whistleblower of the outcome of the process in accordance with the law within the prescribed period;

(vi) fails to provide the whistleblower, upon their request, with information on the progress and actions taken in the process or does not allow the whistleblower to inspect the case files and attend actions in the process in accordance with the law.

The implementation of a compliance program is not specifically regulated by the law as a mitigating circumstance in case of an established offense. Nevertheless, in each case, the court will determine the punishment within the limits prescribed by law for that offense, considering the purpose of punishment and taking into account all circumstances that may warrant a lesser penalty, i.e., mitigating circumstances.

Corporate settlement procedures for corruption offenses are not specifically regulated. In general, a plea agreement can be reached between the public prosecutor and the defendant before the conclusion of the main trial, provided the defendant is represented by legal counsel. This agreement must be submitted to the judge by the public prosecutor.