Since its establishment in June, 2006, AmCham's Finance Committee has striven to reduce administrative obstacles and the compliance burden stemming from financial sector regulations. It has presented the private sector view on rules and procedures, together with recommendations and examples of international best practices to relevant counterpart organizations.
For Finance Committee Charter please click here..
1. Foreign Account Tax Compliance Act (FATCA) - initiative for international treaty
2. FOREX Law – clarifications, implementing regulations and enforcement tracking
3. Financial derivatives – NBS interpretation of the Law and tax treatment
4. Ceding of banks claims – interpretation of the Article 39 of the Law on protection of users of financial services
5. Application of the Law on deadlines for payments of pecuniary claims on financial services.
The two most notable achievements of the Committee in 2012 was adoption of the Amendments to the FOREX Law and Amendments to the Corporate Income Tax Law pertaining to financial services taxation.Specifically, FOREX amendments remove the administrative burden on double reporting of transactions with tax havens to the FOREX Inspectorate and the Anti-Money-Laundering Agency. In addition, the adopted provisions allow and facilitate cross-border electronic payments vital for the development of electronic trade. Amendments to the Corporate Income Tax Law clarified inconsistent application and misconceptions in the implementation that were evident in the financial sector (e.g. liabilities write-off and the possibility for separate OECD-based transfer pricing treatment of overnight loans).
Despite active advocacy for the removal of provision on imposed control on taxes and contribution payments on banks from the Law on Tax Procedure and Tax Administration, no changes were passed.
The Finance Committee produced and submitted a Finance Policy Brief for the new Government which contains assessments and recommendations in the area of foreign exchange regulations, capital markets and financial derivatives regulations, tax policy of the banking sector and factoring..
Bearing in mind that two major financial laws were adopted in 2010, theLaw on Foreign Exchange (FOREX) and theLaw on Capital Markets, Committee activities in 2011 were mainly directed toward providing input for draft by-laws to those laws. The Committee was active early on in the drafting of the by-law on intra-corporative netting, which is particularly important for multinational companies. This by-law is especially important for AmCham members since it provides details of one of the liberalized channels in forex transactions brought by the amendments to the FOREX law.
Furthermore, the Committee commented on the National Bank of Serbia’s Draft decision on registration of foreign credit operations and submitted a collection of constructive comments on theDecree on netting and theDecree on FOREX control. Both are in the process of being adopted.
Also, the Finance Committee addressed the Ministry of Environment, Mining and Spatial Planning regarding the implementation of the Mortgage Law by the Republic Geodetic Authority (RGA), emphasizing the problem of the RGA interpreting the Law in a manner conducive to abuses by borrowers, which creates legal uncertainty in practice. The same issue has also been raised by other professional associations, so far without tangible result.
In the meantime, the Securities Commission has adopted 17 by-laws to the Law on Capital Markets, and one of the issues raised by companies has been elimination of ceilings for Central Registry’s tariffs for dealings with securities pertaining to ownership change, thus increasing transactions costs.
The Committee’s Agenda for 2010 listed the following activities:
• Advocating for amendments to the Securities Act in line with AmCham comments
• Advocating for amendments to the Foreign Exchange (hereinafter FOREX) Law in line with AmCham comments
• Amendments to the Company Law, in compliance with the amended Securities Act.
In August, Tax and Finance Committee representatives hosted a delegation of the International Monetary Fund Mission (IMF) to Serbia, emphasizing their most important suggestions for amending financial regulations and urging amendments to the Securities Act and FOREX Law.
A year and a half since its first draft and three batches of AmCham comments later, the Draft Amendments to the FOREX Law were adopted by the Government in late December. Amendments, among other impacts, address some of the key administrative burdens borne by businesses when making transactions abroad, to which AmCham has been objecting.
Earlier this year, AmCham succeeded in advocating amendment of the by-law of the National Bank of Serbia that allowed banks to release payments without paper documentation on each transaction while obliging payees to keep internal records.
Finally, three years after the beginning of the AmCham Finance Committee’s initiative for overhaul of the regulations pertaining to capital markets, the Law on Capital Markets was adopted by the Government and sent to the Parliamentary procedure. This law encompasses all key AmCham suggestions for improvement of current regulations and, when adopted, is intended to replace the current Law on the Securities Market and Other Financial Instruments. In addition, the new Proposal of the Company Law contains additional improvement of the public offering process in line with Finance Committee suggestions from three years ago..