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The Government of the Republic of Serbia

In the service of citizens

Bill on free zones aligned with WTO and EU standards

Belgrade, 31 May 2006

Serbian Assistant Minister of Finance Vesna Hreljac-Ivanovic said today that the new bill on free trade zones, drafted under World Trade Organisation (WTO) and EU standards, removes limiting factors which existed in this area so far.

In a press conference today Hreljac-Ivanovic presented new bills on free trade zones and foreign currency operations that the government approved in its last session. She noted that the founder makes a decision to set up a free trade zone, after which the company for managing the zone is established and a request is sent to state authorities.

The founder can establish only one company for managing a zone so as to prevent a monopoly, she explained adding that the company needs to submit evidence on technical and economic conditions. She also said that a special commission will be in charge of grading these conditions and added that the company will also have to submit a report on free trade zone feasibility.

There will be tax incentives for setting up free trade zones, Hreljac-Ivanovic said. According to her, a report on operations will be submitted once a year.

She also added that there are three zones in Serbia at the moment: in Subotica, Zrenjanin and Pirot, which are obliged to submit demands for new licences within 90 days after the law comes into effect. However, these three zones will not be obliged to submit new reports, she added.

Assistant Minister responsible for foreign currency inspection Lidija Smiljanic said that the bill on foreign currency operations was drafted in cooperation with the National Bank of Serbia (NBS).

This law will liberalise financial transactions and will allow the purchase of securities issued by foreign issuers, she said. The new regulations on financial transactions should put an end to foreign currency operations by presenting fake invoices, Smiljanic said expressing hope that the bill will be passed by parliament in June.