New consequences for late payments in commercial transaction
The Serbian Parliament passed the Law on the Terms for the Settlement of Monetary Obligations in Commercial Transactions on 15 December 2012 (the “Law”). The Law is based on Directive 2011/7/EU. The Law will come into force tomorrow the 25 December 2012 and will be practically applied from 31 March 2013.
The most important provisions of the Law include the following which you should pay attention to:
The Law applies to the settlement of monetary obligations arising from commercial transactions between business entities and between business entities and the public sector;
It introduces a limitation of contractual freedom in commercial transactions: The maximum period for payments in commercial transactions between business entities is limited to 60 days. The Law makes two exceptions to this general rule: (i) where the payment is agreed in installments, the payment period is extended to 90 days, whereby at least 50% of the monetary obligation has to be paid within the first half of the agreed payment period; and (ii) if the agreed period exceeds 60 days, then the debtor is obliged to provide a bank guaranty (unconditional, irrevocable and payable on first demand without the right to object) or a bill of exchange guaranteed by the bank, as a form of security for the payment of the debt…
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