The major challenge faced by Serbia’s recently elected parliament is dealing with the war-related crisis, in particular, in the field of energy, according to Vulic Law Managing Partner Milos Vulic.
"In Serbia, general elections were held on April 3, to elect both the president and the members of the legislative body," Vulic begins. "We have not witnessed any big reforms or legal updates, due to the pre-election-related stagnation. Usually, during the election period, there are rather few legislative developments in the country."
According to Vulic, due to the political situation caused by the war-related crisis, the major issue in Serbia, in terms of impact on business activities, is energy. "Nevertheless," he explains, "the Government of the Republic of Serbia passed a decree on limiting the price of oil derivates and limiting the retail price of fuel in Serbia, in order to protect domestic consumers from the major price disturbances in the global market of oil and derivates."
"At the moment, Serbia is facing difficulties in carrying out trade and conducting business with Ukraine, the Russian Federation, and Belarus." He points out "it is not possible to continue business activities in the same manner, especially since we are not sure how long the crisis will last. This creates challenges from the perspective of entrepreneurs, legal entities, employees, etc."
In addition, Vulic notes that "sanctions imposed by the EU on the Russian Federation now have an effect on every country, including non-member states. It is estimated that the energy crisis, primarily in terms of gas – which balances electricity production in most EU member states, including Germany – could seriously contribute to a recession and decline in production, as recently stated by the Chairman of the Chamber of Commerce and Industry of Serbia." He adds that, "bearing all this in mind, it seems that this also could have an impact on Serbia since the German market is the market to which Serbia exports the most." Furthermore, he indicates that inflation in Serbia increased by 0.8% in the month of March, compared to the month of February, thus now amounting to 9.1%, according to the Republic's Bureau of Statistics.
Vulic adds that, "with the fourth package of sanctions that EU member states imposed on the Russian Federation, 12 large Russian companies are facing termination of all transactions. Keeping in mind that one of those companies is Gazpromneft – the majority owner of NIS (Petroleum Industry of Serbia) – it gave rise to questions as to whether Serbia would be able to import oil, which arrives in Serbia via Croatia and the Adriatic oil pipeline (JANAF)." He concludes that, in the end, "this was avoided since the EU sanctions currently do not include the subsidiary of Gazprom in Serbia, nor are there plans for it to be included."