05. Mar 2018

The National Assembly of the Republic of Serbia adopted the Law on Amendments to the Law on Terms of Settlement of the Financial Obligations in Commercial Transactions (“Off. Gazette of the Republic of Serbia”, no. 113/2017) (hereinafter: the Law) at the fifth session of the second meeting in 2017. With that regard, as of 1 March 2018, the Central Register of Invoices shall start operating and it will enable the application of the provisions of Law which refer to the registration of invoices and other requests for payment issued by the creditors in commercial transactions between public sector entities and business entities, i.e. between the public sector entities, in which the debtors are public sector entities and where the payments are made through the accounts registered at the Ministry of Finance Treasury Administration (hereinafter: the Treasury Administration). If such payments are made through the bank accounts, it is prescribed that the provisions of the Law relating to the registration of invoices and other requests for payment shall be applied after the technical-technological conditions are met.

 

Namely, Article 2 of the Law defines a new concept – Central Register of Invoices, which represents the system (database) established and maintained by the Treasury Administration, where the invoices and other requests for payment issued by the creditors in commercial transactions between public sector entities and business entities, i.e. between the public sector entities, where the debtors are public sector entities, are being registered. Article 4a of the Law prescribes that the creditors are obliged to register the invoices and other requests for payment in commercial transactions where the debtors are public sector entities, prior to delivering them to the debtors. However, the Law does not prescribe the term in which the creditors are obliged to register the invoices and other requests for payment, which may be considered as a significant omission having in mind the aim of the newest amendments to the Law which is oriented to the improvement of the monitoring system of the issued invoices.

 

The registration of invoices and other requests for payment is done through a web application, by entering the data from the invoice or other request for payment into the information system of the Treasury Administration which registers the entered data in the Central Register of Invoices and assigns a unique identification number to such invoice or other request for payment. The creditor is obliged to deliver the registered invoice or other request for payment to the debtor within three working days from the day of registration, together with the payment instruction. It is important to note that the debtors (public sector entities) are obliged to settle their obligations based on invoices and other payment requests only if the invoices and other payment requests are properly registered in the Central Register of Invoices. The content and manner of maintaining the Central Register of Invoices, as well as the procedure of the registration of invoices are regulated, in more detail, by the Rulebook on the manner and procedure for registering the invoices and other requests for payment, as well as the manner of maintenance and contents of the Central Register of Invoices (“Off. Gazette of RS”, No. 7/2018).

 

It is prescribed that the Ministry of Finance – Department for Budget Inspection performs the supervision over the enforcement of the Law, therefore has access to all data of the Central Register of Invoices. What is particularly important to note is that misdemeanor penalties are prescribed not only for the debtors (public sector entities from commercial transactions), but also for the creditors from the commercial transactions. Thus, the creditor is not only prevented to collect his claim if he fails to properly register an invoice or other request for payment (i.e. the debtor is not obliged to pay due receivable if the same is not properly registered in the Central Register of Invoices), but there is possibility of initiation of a misdemeanor procedure if the creditor does not register issued invoices or other requests for payment in the Central Register of Invoices (irrespective of the fact whether the debtor has settled his obligation from a commercial transaction or not), which is an additional encumbrance for the creditor.

 

Certainly, the intention of the proposer of the Law was to improve the monitoring system of the issued invoices in the transactions where the debtors are public sector entities, as well as to increase the efficiency of the supervision over the settlement of financial obligations of public sector entities within the deadlines specified by the Law, but it definitely remains to be seen through the future application whether the new system of registration of invoices and other requests for payment will justify the expectations of the proposer. In this regard, we should not ignore the encumbrances imposed to the creditors relating to the collection of the receivables towards the public sector entities, which could considerably diminish the positive effects of the new provisions of the Law.