Regional disqualifications - Zvonko Obradovic & Andon Rumenov

1. Regional disqualifications
CRF 2015 Zvonko Obradovic & Andon Rumenov

2. Background
Regional Disqualifications
In 2005 both Macedonia and Serbia reformed the business registration process
by moving it from a judicial procedure to an administrative procedure within a
specialized agencies – Central Register of Republic of Macedonia and the
Serbian Business Registry Agency
Disqualifications remained within the judicial system and since the
information was not systematically exchanged with the Registries
disqualifications were seldom if ever enforced.
This created a legal uncertainty and information void related to protection of
creditors and third party interest

3. Regional Disqualifications
The Reform
Macedonia
2009
Legacy of old System
2011+
Platform
2010
Establishment
Establishment of the
Register of disqualified
entities within the
Central Register
Platform for exchange
of information
Register put in
operation
2011
Achievement
2011+
Managing authority
Central Register as
managing
authority
• Courts (Criminal and
misdemeanor charges and
bankruptcies /liquidations)
• Tax authority – unpaid taxes
• Banks (via Clearinghouse) –
locked bank accounts

4. Regional Disqualifications
Central Register
Blocked Accounts
The Reform
Macedonia
Courts
Unpaid Taxes
•Criminal/ misdemeanor charges
•Bankruptcies/ liquidations

5. Regional Disqualifications
Scope of disqualifications
Ban on opening a new company
In the duration of the
disqualification
Ban on acting in certain capacity
(director, board member, etc.), in a
company in the duration of the
disqualification
Ban on participation as a
shareholder (with majority rights)
and or being a founder in a new
company (for legal entities) in the
duration of the disqualification
Scope
Depending on the grounds for
the disqualifications

6. Results
Macedonia
Regional Disqualifications
Macedonia
37.000
95%
Due to blocked accounts
Certificates of non-
disqualification are
used for protection of
third party interest
and as a condition for
participation in public
procurement
processes
The disqualifications
are updated real time
and the numbers vary
around 30.000 entities
MK - SRB
337.477
7.5%
Imports / Exports ($)
498.157

7. The Reform - Serbia
Regional Disqualifications
Similar to Macedonia, the reform of the commercial registration was not
initially followed up with the regime for disqualifications which were left in the
courts
No institutional exchange of the information related to the disqualifications
meant no real mechanism for enforcement of the disqualifications
April 2014, though a Norwegian funded project, SBRA launched the project for
the implementation of the Register of disqualified entities

8. Regional Disqualifications
The Reform
Serbia
Law on
disqualifications
Governmental
procedure (expected
to pass parliament in
March/April 2015)
SBRA
Company Register and
managing authority of
the Register of
disqualifications
Tax
Tax Authority
Institutions
National Bank of Serbia
Courts (SupremeCourt)
Central Register of
Stakeholders
The System
Expected
2015

9. Grounds for disqualifications
Serbia
Regional Disqualifications
1
Misdemeanor and criminal charges
(Court appointed)
2 Bankruptcy and liquidations (Courts)
3 Unpaid taxes (Tax Authority)
4
Blocked bank accounts over 120 days –
National Bank
5
Shareholder information – Central
Register of shareholders
The foreseen grounds for
disqualifications

10. Regional Disqualifications
Regional Cooperation
Cross-border
Success
Exchange of corporate data
Exchange of financial data
Cross-Border initiative for
mutual recognition
Information on
disqualifications

11. Rationale
Regional Disqualifications
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Value of economic
exchange between
Macedonia and Serbia
in the thousands of
USD
Historical economic
ties
Number of companies
trading cross-border
and establishing
subsidiaries in the other
country in the
thousands
Institutional data
exchange on a “need”
basis, creating climate
conducive for spill-over
of “doubtful and
fraudulent” business
practices

12. Regional Disqualifications
Regional disqualifications
Disqualifications as
preventive measures on
national level
Disqualifications as
preventive tools on
regional level
Project initiation –
second half for 2015
Work started on drafting
an inter-registry
agreement on
cooperation
Article 33 EU Service
Directive
Ultimate goal: cross-
border recognition of
disqualifications

13. Thank you