Date: 10/06/2015

AmCham, NALED, FIC and Ministry of Construction Work Together on Resolving Conversion

On June 9, representatives AmCham, FIC and NALED had a consultative meeting at the Ministry of Construction, Transport and Infrastructure with Aleksandra Damnjanović (State Secretary) and Ljubiša Aksentijević (Special Counsel to the Minister) with aim to discuss comments and stances of three business associations on Draft Law on Conversion

Although initial Draft contained several good solutions, primarily regarding developed land and determining land for regular use for the purposes of conversion, several other key issues were not defined in a way that would be acceptable for a private sector. Hence, discussion focused on these issues and ended in finding alternative solutions that would satisfy both state and companies. Participants agreed on the following proposals that’s should be approved by the Minister:

•treatment of non – developed land and obligation to pay full fee for the conversion through lease amount –to allow possibility to convert the land free of charge once the object is constructed and the occupancy permit is issued

•treatment of land serving for regular use of objects located around the object –to include such land as a land for regular use, hence having possibility not to pay conversion fee. The existing formula covering the land beneath the object would be extended to include all surrounding objects (infrastructure, traffic roads, green areas, fountains, etc. - to be listed as examples in the law, the more extensive list the better)

•recognition of costs for acquiring right to use land – recognition of costs for acquisition of land in some specific cases, for example if it relates to undeveloped land and the value of land was recorded in the books at the time of acquisition; the procedure for recognition of costs still to be defined.

•right to build for those who had already submitted request for /acquired construction permit would be explicitly allowed in the final provisions for all persons who are subject to conversion procedure but have filed requests for issuing construction permits until adoption of the Law or have obtained the permit but has not commenced construction yet.

•persons to whom the Law applies – to clarify provision re persons who had acquired the assets of the privatized entities, so that it will be explicitly stated that they should be subject to conversation free of charge.

The Minister would announce whether the proposals are approved or not at the upcoming AmCham Business Luncheon.