Issuu

SERBIAN ECONOMY OVERCOMING CHALLENGES

RETURNING TO Regular Flows

VOL. 3

CONTENTS

IT NEVER WAS SIMPLE COMMENT

WE MUST BE PROACTIVE

MARKO ČADEŽ, PRESIDENT OF THE CHAMBER OF COMMERCE & INDUSTRY OF SERBIA, CCIS

CONTINUING COOPERATION WITH THE GOVERNMENT

VLADIMIR NOVAKOVIĆ, PRESIDENT OF THE NALED MANAGING BOARD AND GENERAL MANAGER OF MOLSON COORS INDIA

WE EASE BUSINESS OPERATIONS

MILAN LUČIĆ, DIRECTOR OF THE SERBIAN BUSINESS REGISTERS AGENCY

RETURNING TO Regular Flows

TERRALEX & GECIĆ LAW RECONNECTING A PANDEMIC STRICKEN WORLD BOGDAN GECIĆ, FOUNDING PARTNER AT GECIĆ LAW TERRI PEPPER GAVULIC, CHIEF BUSINESS OFFICER AT TERRALEX

VERKAT WINE OASIS

SONJA AND NATAŠA VRKATIĆ, OWNERS OF THE VERKAT WINERY

PRESTIGE WITH COVERAGE

ANA VRANEŠ, TRI ORAHA WINERY

MORE THAN A WORKPLACE

ZORANA BURLIĆ, DELTA REAL ESTATE CEO

18 2

September

HOW WE EXPLORED SERBIA FEATURE

COMMENT

It Never Was Simple

Long before the country was confronted by the pandemic, international and domestic experts considered Serbia as being at a crossroads, with one road leading to slow growth and an average standard of living far below that of the EU, and the other leading to accelerated growth and greater prosperity. Now the need to switch to a new economic growth model is even more pronounced, while the conditions are more complex

he pandemic continues to impact strongly on the reshaping of economies, with no indication that the global and domestic markets could return to normal flows. The Serbian economy, which has faced limited activity in many industries since COVID-19 became our reality in March, has to date largely managed to keep its head above water thanks to successive aid packages administered to the economy by the Government of Serbia. Space for the state to make new interventions is more or less exhausted. The fiscal

external deficit to be financed through additional government borrowing abroad, which will further raise the level of external debt to perhaps 70 per cent of GDP. As a result of reduced imports and slightly better exports, the current account deficit is likely to be significantly lower, while inflation will remain low and the exchange rate of the dinar against the euro will probably remain unchanged, which will favour the continuation of a stable macroeconomic situation. Under the conditions of COVID-19, and considering its long-term ramifications for economic flows, it won’t be easy at all to tran-

As things stand, the new government will face a series of proposals to overcome the challenges posed by the pandemic

deficit is expected to total between seven and eight per cent of GDP in 2020, with public debt growing to almost 28 billion euros by the end of the year, or more than 60 per cent of GDP. It is highly likely that the inflow of foreign direct investments and remittances will be insufficient to cover the current account deficit, as can be seen from the trends recorded so far, and that the strong impact of FDI on economic growth that has been evident to date will be absent. Under such conditions, all the remains is for the

sition to a new model of economic growth that would be based on strengthening domestic SMEs, which both domestic and international experts are advocating for. First, the course of the crisis has begun impacting on large domestic companies, and in the period ahead the Government’s measures will certainly be weighed in such a way as to primarily help larger companies with longer production chains, and only then smaller ones. Second, the champions of the domestic economy

have mostly been exporters, and now they’ve been significantly affected by the lack of demand on the world market. Domestic demand is simultaneously weak, so it is difficult for companies to find support on any side. One possible response is increasing public investment to five per cent of GDP. However, this goal has not been achieved in all previous years, despite limited progress. The economy, on the other hand, proposes the greater involvement of domestic construction companies and the processing industry in the implementation of infrastructure and other state projects, but that won’t be easy given that the construction sector is slowly beginning to feel the burden of the crisis. At the same time, in the face of slowing global demand, challenges are also being faced by the extremely positive trend of including local companies in the supply chains of both large domestic and foreign exporters. The most promising aspect is perhaps the accelerated trend of the digital transformation of the economy, which represents the route to transitioning from the current inefficient structure to that of a sophisticated, modern economy. In short, both the new government and the economy are facing challenging times, and there is an even more pronounced need to remain committed to reforms and to move boldly towards conquering the future. ■

September

INTERVIEW MARKO ČADEŽ, PRESIDENT OF THE CHAMBER OF COMMERCE & INDUSTRY OF SERBIA, CCIS

We Must Be Proactive The Chamber of Commerce & Industry of Serbia has proposed to the government an entire set of measures that would provide our companies with more work and better positioning on both the domestic and foreign markets. This is now the most important next step, because there is no state money that could be pumped in to help the economy if the markets are not functioning, if there is no demand for products and if there are no new jobs

e have preserved the backbone of the economy, says Marko Čadež, president of the Chamber of Commerce & Industry of Serbia (CCIS), succinctly assessing the effects of the measures taken to date by the Government of Serbia in order to help the economy overcome the first blow of COVID-19. However, he notes, this is only one of the necessary steps. We discussed other measures in detail with the CCIS

September

president, which first and foremost implies the creation of measures that will contribute to strengthening demand for the goods and services of our companies, both in the country and abroad. In this interview, Čadež - who is also Chairman of the Board of the Western Balkans Chamber Investment Forum and a member of the Board of Directors of EUROCHAMBRES and Chairman of the Eurochambres Digitalisation Committee - also talks about the ways in which,

under the conditions of strict health measures, members of chambers in the Western Balkans continue to strengthen their connections, but also how trends in digitalisation have impacted on all European economies, including Serbia’s. • Under conditions when the pandemic is not subsiding, to what extent can another aid package to the economy be effective in attempting to overcome the crisis? - Relying on the first, large package of emergency support to the economy in spring, then the additional July measures of direct aid, cushioned the economy against the unexpected impact of the Coronavirus this summer and represent another injection that’s particularly important for the most vulnerable part of the economy - micro firms, SMEs and entrepreneurs. They will enable business leaders to maintain the liquidity of companies achieved in past months and save jobs, to breathe more easily, to settle their other obligations regularly, not to lay off workers and to find new works in a more financially relaxed position and welcome autumn better prepared… Alongside additional measures of direct support, it is important to make maximum use of existing (from the first package) loans for liquidity and working capital of the Development Fund, and loans from commercial banks with state guarantees, which will be available to them until the end of the year. • What do business surveys say? Where is help hitting the mark and where do they lack support? - Direct state aid measures to date, in the form of minimum wages, deferrals of tax payments and the moratorium on loan repayments, have -along with additional credit support - targeted and preserved the backbone of the economy: company liquidity and jobs. Business leaders are grateful for that to both the state and the Chamber of Commerce & Industry of Serbia, which represented their interests and helped them to use the help as positively and efficiently as possible. At the same time, the majority of surveyed business leaders see reduced demand on domestic and foreign markets as the main constraint in the period ahead. That’s because there is no state money that could be pumped in to help the economy if the markets are not functioning, if there is no demand for products and if there are no new jobs. That’s why the CCIS

has proposed an entire set of measures to the government that would provide our companies with more works and better positioning on both domestic and foreign markets, ease operations in the country and realise export arrangements with foreign partners. • What does the CCIS propose specifically? - The economy considers that significant effects would be achieved through the greater involvement of domestic construction companies and the processing industry in the implementation of infrastructure works and other state projects, then through the inclusion of local companies in the supply chains of large domestic and foreign exporters, as well as in production that would replace imports wherever possible. In this context, it is very important that we now also support our large companies, which have mostly handled the burden of the crisis on their own, in order for us to also preserve the smaller

reduced orders in the tourism and hospitality sectors. Our position, as a business association, is that it is essential to help the most vulnerable as soon as possible, but also that it is equally important for support measures to be well-balanced and directed towards those who need help the most, in accordance with clear criteria. That’s because not all sectors, nor all those operating within the scope of certain activities, are impacted equally. For example, spa and mountain tourism managed to overcome the consequences of the pandemic through income generated from domestic guests, but the epidemiological situation continues to block congress and city break tourism. • Which sectors have so far proved most resistant to the crisis and do they have sufficient potential to raise GDP or exports? - Great vitality has primarily been shown by agriculture and the food industry, but also by

We will pay special attention to communication with European companies that will certainly move their production operations from distant markets closer to their home countries, but also to the parallel attracting of FDI from other fast-growing, non-European economies

companies that form parts of their supply chains. Additional relief would be brought by a reduction in customs duties on equipment, parts and components that must be imported. Exporters would benefit greatly from new free trade agreements, greater support, i.e. an increase in the export insurance fund and assistance in entering non-European, fast-growing markets. • Does the state have space to provide stronger assistance in the coming period for the most endangered sectors, such as tourism, hospitality and passenger transport? - After the broadly set, linear measures taken to date, the government has launched measures of sector-based support to the most endangered, with the decision to help city hotels with one-off budget subsidies. By helping tourism, hospitality or passenger transport, the state will indirectly help related activities that are suffering the most as a result of, for instance,

sectors and branches such as the chemical and pharmaceutical industry, the products of which have been in great demand in past months, especially during the state of emergency, both in the country and across the region. It is especially important that the state and the chamber jointly support companies from the industries of the largest exporters and sectors with the greatest export potential - processing companies from the food, metals, chemical and rubber and plastics industries. We will ease their operations in the country and abroad with targeted measures, stimulate demand, remove obstacles to the resumption of exports to already conquered markets and open the doors to new ones. For Serbian companies - manufacturers of auto parts and components - news about the start of the recovery of the German automobile industry is particularly good. Given that services, together with construction, account for 58% of Serbia’s GDP, it is important for the recovery

September

week together with German Economy Minister Altmaier, the implementation of which we’ve already started working on. The operational implementing of that partnership agreement in practise will bring new German investments, works for Serbian companies and new jobs for our people, and will do so in the mutual interest of both German and Serbian companies. I believe this model of further strengthening cooperation with the German economy, as our number one foreign trade partner and one of the largest investors in Serbia, can also be applied in relations with other countries... When it comes to attracting foreign investment, we will pay special attention to communication with European companies that will certainly move their production operations from distant markets closer to their home countries, but also to the parallel attracting of FDI from other fast-growing, non-European economies. • Under these conditions, to what extent can the CCIS act as a bridge in connections between business leaders? - In all surveys conducted in recent months, our member companies pointed out that it is particularly important for recovery and increasing production and exports that - in addition of the Serbian economy that construction activities recover and that there is greater engagement of construction operations and the accompanying construction materials industry, as well as exports of services, especially for the growing ICT sector. • How do you communicate with potential foreign investors under current conditions? Are other approaches needed in order to attract them today? - It’s important that we also continue including our companies in the supply chains of large, foreign companies and that we actively attract foreign investment, specifically investment in the production of higher value-added goods that would engage the domestic economy and contribute to increasing our export performance. As a business association, we are also working on that together with the state - with the teams of the president and the prime minister. The best example of the state’s support to the economy in the area of internationalisation is the document that President Vučić signed this

September

and gatherings of our business leaders with partners from the region and around the world, using existing platforms and creating new ones for them to connect and communicate. I would emphasise in particular the commitment and activities of the Chamber Investment Forum of the Western Balkans, i.e. our joint regional chamber of commerce, aimed at building a common market of this region of almost 20 million consumers, as well as connecting our businesspeople in order to increase their mutual trade and trade with the world, through the unifying of the regional offer for buyers and investors. • Covid-19 is believed to have done more for the digitalisation and digital transformation of the economy than any other process. Where do you see the most remarkable shifts when it comes to our economy? - Confronted by the challenges posed by the global health crisis, we were compelled to skip five years when it comes to digital operations, for us to live and work today, everywhere in the world, as though it’s 2025. When it comes to our economy, in just the first few months after the Coronavirus pandemic arrived in Serbia, more than a third of companies had switched to digital

It is especially important that the state and the chamber jointly support companies from the industries of the largest exporters and sectors with the greatest export potential - processing companies from the food, metals, chemical and rubber and plastics industries to government incentives for producers and consumers, subsidies and soft loans - they receive assistance in the internationalisation of business, and that the CCIS plays its role in that, as their business association. In order for us - in a situation when fairs have been cancelled, when there are no opportunities for direct B2B conversations and when it is difficult to travel - to enable businesspeople to maintain and establish contacts with partners abroad, to take advantage of the opportunities provided to them with the slow opening of economies, we are working, independently and with partner organisations, on organising, among other things, a series of online meetings

operations, opened online shops or upgraded existing channels of online sales. Just as many companies are planning or already working on the digitalisation of their business processes, adapting rapidly to the new situation. In this process, the Serbian economy - especially SMEs - are enjoying and can continue to count on the great support of the Centre for Digital Transformation of the Chamber of Commerce & Industry of Serbia, which works independently, but also together with colleagues from other European chambers within Eurochambres, on the creation of new digital services and platforms, and the improvement of existing ones, to help member companies. ■

September

INTERVIEW VLADIMIR NOVAKOVIĆ, PRESIDENT OF THE NALED MANAGING BOARD

AND GENERAL MANAGER OF MOLSON COORS INDIA

Continuing Cooperation With The Government The common denominator of the top three reforms that NALED will advocate for has crystallised more than ever during the Covid-19 crisis. Those are the digitalisation of procedures, reduction of the grey economy and the improvement of the tax system and the development of healthcare

fter several aid packages to the economy, it is time to consider the next steps that would help the Serbian economy. We discussed that with Vladimir Novaković, President of the Managing Board of NALED and General Manager of Molson Coors India. “The first package, which amounted to more than five billion euros, gave a much-needed infusion to the economy, without which it would not have withstood

September

the blow of the previously unknown crisis. The measures arrived relatively quickly, were easily accessible administratively, but due to the speed of their adoption there was no better targeting of those most under threat. As the virus did not back down, a new package of around 66 billion dinars was adopted at the end of July, with the measures also able to be utilised by entrepreneurs, micro firms, and SMEs established after 16th March. Now

the first measures are arriving for the most endangered sectors, for which the support previously provided to them turned out not to be enough,” says Novaković. • What do you see as the top tasks of the new cabinet? - At our annual assembly, NALED members from the ranks of the economy, the public and civil sectors, voted on the most important reforms that we will identify for the new government. The common denominator of the top three reforms that NALED will advocate for has crystallised more than ever during the Covid-19 crisis, and that includes the need to digitalise procedures. Thus the first priority, which 77% of our members voted for, is the improvement of e-government and e-business. Next comes the reduction of the grey economy and the improvement of the tax system, for which 76% of members voted, followed by the development of healthcare, with 65% of votes. We will also advocate for the establishment and development of various electronic systems, such as eSpace for the adoption of spatial and urban plans, eAgrar for the electronic registration of agricultural holdings and the allocation of subsidies, eRegister for non-tax charges and eHealth, through the improvement of IZIS [integrated health information system]. We will propose the broadening of

good results, if not higher turnovers, even during the crisis, such as trade, the chemical industry, i.e. manufacturers of disinfectants and hygiene products. On the other hand, small businesses, such as craft firms, were the weakest, along with passenger transport, travel agencies and the tourism sector in some segments. • A significant expert debate has developed in public about whether it makes

GERMAN AMBASSADOR THOMAS SCHIEB, AND VLADIMIR NOVAKOVIĆ

NALED has to date proven to be a reliable partner to the Government of Serbia, and we are hopeful of successful cooperation in the next term as well

the system for the online registration of seasonal workers to encompass other activities besides agriculture, because that system has proven itself to be excellent. • At this juncture, which sectors can be said to have found a modality to deal with the crisis and which will continue to be under threat over the long run? - It turned out that some sectors had quite

sense to help tourism, considering its contribution to GDP. What is your stance on this? - Tourism’s contribution to the GDP of Serbia is still lower than it is in Croatia, Montenegro or Albania, which have coastlines and where the income from tourism accounts for around 25 per cent of GDP. However, this branch isn’t negligible in our country either, considering that last year’s

income from tourism amounted to around 1.4 billion euros. In the initial outbreak of the crisis, the turnover in the tourism sector fell, but now the situation is better in some segments. For example, due to the closure of borders, more citizens than in the ordinary situation are visiting domestic spas, mountains, ethno villages and lake resorts. On the other hand, hoteliers in major cities have almost no work, because there are no so-called city break tours. • It seems that business leaders are having a lot of trouble collecting their receivables. What is the scale of this problem today and what do you consider as a possible solution? - Previous research showed that companies

September

to be and what lessons have been learnt? - Around 80,000 seasonal workers are engaged in agriculture annually. Of that total, the average number of applicants for days of engagement was around 3,500 annually. Since the possibility of applying through an application was introduced, as of January 2019, some 37,000 seasonal workers have been registered. Everyone benefited from that - employers enabled their workers, according to a simple procedure, to exercise their right to a pension and protection against injuries at work for the days of their engagement, while the state earned about 3.3 million euros from their taxes and contributions. This huge and noteworthy success encouraged us to continue thinking in that direction. That’s why we will, I hope, work with the new Government on expanding the scope to other forms of engagement - home help and auxiliary jobs, as well as temporary and casual jobs in the sectors of construction, hospitality and tourism.

in Serbia collect receivables in an average of one year and seven months. It is quite certain that the Coronavirus pandemic will have a negative impact on these statistics, because in the first moment the courts and other state bodies functioned, so it was then impossible to initiate payment procedures. We consider that the state could alleviate the problem if it regularly settles its obligations to the economy. On the other hand, we expect the digitalisation of forced collection to ease this problem. Amendments to the Law on Enforcement and Security enable all sales

We'll advocate for the legal regulating of flexible forms of employment, for support for SMEs in business transformation and the introduction of cashless and online payments and trade of property in enforcement proceedings to be made through the eAuctions portal as of 1st September. • You’ve announced that you will propose that the new Government make adoptions or amendments relating to three laws that concern workers whose work is relatively marginalised and rarely in the focus of the government. What do you propose? - As soon as the new Government is formed, we will submit a proposal for the adoption of the laws on gender equality, social entrepreneurship and craftsmanship. NALED, in cooperation with the Coordination Body for Gender Equality and the departments of labour and economy, has already worked on the drafts of each of these pieces of

September

legislation. Craftsmen haven’t had a defined status for a long time, and women from rural areas aren’t in a better position either. Their products have potential for tourism and economics, which they could realise with adequate support. The Law on Social Entrepreneurship, for example, creates preconditions for public works in culture and social activities, which would be a transitional solution for many left jobless due to the Coronavirus. • Among the laws you are advocating for is the new law on the simplified engagement of seasonal workers in tourism and hospitality, construction and home help jobs. How successful has the version of this law for agricultural workers proved

• Last but certainly not least, there has been much talk in public about the need for Serbia to change its growth model so that it is based on the growth of domestic companies. What is your position on that? - The recovery of the economic image of Serbia will depend primarily on our ability to preserve the economy and jobs. The balance is positive for now, because in the first six months the lead is held by the number of open companies compared to the closed ones, for the 6,313 of them. Further growth will depend primarily on the ability to encourage entrepreneurship, new hiring of workers and innovation. Contributing to this goal is the tax exemption for business start-ups, which is a measure that was adopted at the initiative of NALED. In order to further motivate entrepreneurs, NALED, together with the Serbian Government and Germany’s GIZ, organised the “Entrepreneurship Champions” competition for local governments in 2020. We will soon present the results for the first half of the year, as well as a ranking list of cities and municipalities that most successfully encouraged entrepreneurship during the Covid-19 crisis. ■

MILAN LUČIĆ, DIRECTOR OF THE SERBIAN BUSINESS REGISTERS AGENCY BUSINESS

We Ease Business Operations

Over the previous years, the Serbian Business Registers Agency (SBRA) has been continuously introducing numerous new electronic services for businesses and other customers. With the introduction of the electronic submission of financial statements, which is mandatory for all companies, some sole proprietors and other legal entities, the Agency has been recognised as a catalyst for the use of digital signatures

t now takes just one or two working days to register a new business with the SBRA. Citizens can submit electronic applications for the establishment of a soleproprietorship or a limited liability company, without having to come to the Agency. This month CorD discussed this and other innovations with SBRA Director Milan Lučić. • The 2019 SIGMA Monitoring Report has recognised the Agency as one of the “digital

the Central Register of Integrated Procedures for the electronic issuance of construction and other permits in the domain of construction. With the introduction of the Register of Integrated Procedures, construction permit issuance became easier, while the administrative costs of conducting procedures were reduced, which is why the last annual report of the World Bank that measures business regulations ranked Serbia 9th on the Doing Business list according to the indicator ‘Dealing with construction permits’.

As of this October, the SBRA will also launch the electronic registration of health institutions, so we are continuing the digitalisation of our services champions” in Serbia in the area of the provision of public administrative services. How did the Agency deserve this flattering title? - One of the SBRA’s digital services mentioned in the SIGMA Report is the e-filing of information about beneficial owners. So far, 80% of registered entities have submitted the required information electronically to the Central Records of Beneficial Owners kept by the SBRA. The Report also mentions the Agency’s leading role in abolishing the requirement of the stamp (or seal) on documents, as an important reform step that saves companies both time and money. Thanks to our strong IT capacities, we were entrusted with the task of establishing the information system of

• You work systematically, continuously and with great dedication to ease procedures for businesses. Are you working on the further digitalisation of administrative services? - At the beginning of this year, we made it possible to submit electronic applications for the registration of financial leasing contracts. Leasing companies are currently adapting to the new system, so we have yet to implement this innovation fully. The new software supports work with documentation in both analogue and digital form, and citizens can easily search registered data on the basis of various criteria. In the year in which we celebrate the 15th anniversary of our operations, we are also preparing

the Register of Pledges on Movable Property and Rights to shift to a digital mode of operation, with the online registration of pledge rights to begin in the third quarter of next year. As of this October, the SBRA will also launch the electronic registration of healthcare institutions, so we are continuing to improve the area of registration and the digitalisation of our services. • You recently signed a Memorandum of Understanding with the Chamber of Commerce & Industry of Serbia. Tell us more about that... - That’s a natural continuation of our cooperation, which relates to easing access to business data and creating new services. On the international front, the SBRA and the CCIS lead two very important regional projects that are supported by the EBRD. Both projects provide support for the regional economic integration of the Western Balkans. The SBRA, together with the Central Register of the Republic of North Macedonia, has established the SEE Regional Business Registries Portal — BIFIDEX, (www.bifidex.com), which provides business information about companies and sole proprietors registered in the official business registration authorities of the Western Balkans, in a transparent and easily accessible digital way. We are united around a common goal - easing cross-border connections and establishing stronger regional cooperation for the joint participation of businesses operating in the single market of the Western Balkans, which encompasses 18 to 20 million people. ■

September

BUSINESS

BOGDAN GECIĆ, FOUNDING PARTNER AT GECIĆ LAW TERRI PEPPER GAVULIC, CHIEF BUSINESS OFFICER AT TERRALEX

TerraLex & Gecić Law Reconnecting A Pandemic Stricken World Gecić Law aspires to be the foremost innovative law firm by building long-term relationships with clients based on reciprocity, trust and highest standards of professional ethics. It strives to redefine the role that a law firm plays in an emerging regional market, in order to produce exceptional results for clients

ith its Belgrade hub covering the Western Balkans, Gecić Law offer clients global reach through exclusive membership in the ‘elite’ global network TerraLex. TerraLex members collaborate on virtual litigation/ arbitration, trade and transport challenges, investment opportunities, employment issues, supply chain issues etc. • How did your firm step into the new normal? - Bogdan: The digital era, and especially COVID-19, have put our abilities to the test in terms of adapting quickly to new circumstances. To be on point with the new normal, the firm employed an innovative approach to its day-to-day organisation by striking a balance between office-based work and remote working. This approach, coupled with an upgrade to our IT systems at the start of the pandemic, gave us the perfect platform to guide our international and local clients

September

through a complex and shifting legal landscape, and to establish and maintain their business presence in the region. Our team is knowledge-hungry and looks to advance through the sharing and exchange of best practices thanks to its membership in the 150-plus strong global TerraLex law firm network. The goal is to transfer this versatile legal knowledge to our clients and the wider business community via online webinars and workshops. Terri: Bogdan and the team stepped into the new normal by leveraging their membership in TerraLex, an elite global organisation of law firms in more than 100 countries.

TerraLex’s platform enables its members to support their multijurisdictional clients wherever their needs arise. This is not dependent on being able to travel, but rather on ensuring that members are top-end firms in their local jurisdiction who willingly adhere to a common set of strict client-service principles and practices. As the pandemic progressed, members found creative ways to connect and collaborate: • In June over 640 members participated in a Virtual Global Meeting. Lawyers and other professionals, including Gecić Law, shared ideas and information to meet the challenges of the pandemic and better support their clients.

TerraLex’s platform enables its members to support their multijurisdictional clients wherever their needs arise

• Many firms, including Gecić Law, worked to form a virtual team to serve these clients, sometimes across many jurisdictions at once. This helped clients to have seamless services with no need to travel. • TerraLex members also banded together to provide critical business information to the client community without delay, by developing cross-border guides on the TerraLex website, covering sensitive location-specific information ranging from crisis management to corporate issues and more. • What are the challenges for multinational clients during this time of the pandemic? - Bogdan: The COVID-19 pandemic led to abrupt border controls and restrictions on free movement worldwide, the knock-on effect of which remains a cause for concern as they continue to hamper businesses from operating at full tilt. In particular, labour relations and corporate governance arrangements have had to be reworked, including those for international trade and the distribution of goods. With our Belgrade hub covering the Western Balkans, we offer clients global reach through our exclusive membership in the ‘elite’ TerraLex global network. This rewarding alliance is an ideal vehicle for providing clients with access to indispensable overviews covering various areas of law across multiple jurisdictions and

challenges and opportunities that our members collaborate on include: virtual litigation/ arbitration, trade and transport challenges, investment opportunities, employment issues, supply chain issues and industry specific challenges across a wide range of sectors, such as telecommunications, technology, hospitality and aviation, to name a few. • Why is innovation the key to future success? - Bogdan: Our law firm recognised the stress that the current situation has placed everyone under, especially entrepreneurs and business leaders. This has driven our commitment to

Our law firm has driven our commitment to bring our clients’ concerns about business continuity to the fore, while availing of innovative approaches to help them safely navigate many diverse challenges supporting them anywhere their business ideas take them. Terri: While there are many unique challenges facing multinational companies right now, there are also unique opportunities. TerraLex members are helping these companies address both. Our members are striving to help their clients get back to business as quickly as possible, even if they cannot travel, demonstrating the advantage of having a well-established network and infrastructure to draw on during these turbulent times. Some

bring our clients’ concerns about business continuity to the fore, while availing of innovative approaches to help them safely navigate many diverse challenges. The most recent example of our dedication to the business community in these times of need is our Coronavirus GLaw Hub portal, which provides thought-leading updates and commentary on measures imposed in four jurisdictions (Serbia, Montenegro, North Macedonia and Bosnia-Herzegovina) and their legal implications across 17 practices,

from European Law to GDPR. Our new Hub is widely consulted and attracted praise from TerraLex, hitting record visits that saw it top Google’s rankings for several weeks running in all four jurisdictions. Terri: This pandemic proved that those businesses that were adept at innovation were quickly able to gain a competitive advantage. TerraLex is a good example of this. For the past few years, our continuous drive towards innovation meant that the organisation was able to quickly adapt and provide more value than ever to members and clients over these past several months.

Since members cannot easily travel, they found it essential to have their network of vetted premium TerraLex colleagues ready and able to assist their clients wherever the need arose. Clients appreciate the fact that they can call their outside lawyer and, with a short turnaround, get answers to their legal and business queries from jurisdictions around the world, all coordinated by their own lawyer. This allows them to spend time and focus their attention on other important matters instead of vetting external counsel. As the world has collectively seen the impact of this unprecedented global crisis, it is evident that companies which lack the framework and mind-set for innovation are struggling the most. Despite not knowing what’s around the corner, we can prepare for any eventuality by being nimble, flexible and innovative. ■

September

BUSINESS

SONJA AND NATAŠA VRKATIĆ, OWNERS OF THE VERKAT WINERY

Verkat Wine Oasis Verkat is a small family winery located in the village of Čerević, on the northern side of Mount Fruška Gora, in the close proximity to its own vineyards. It emerged out of a unique, unusual plantation of Istrian Malvasia, which is also why Verkat wines are unique and unusual

he Verkat winery is run by two sisters who every year carefully select handpicked grapes for production in order to develop specific aromas and flavours. Their assortment is somewhat unusual, as is their desire to remain in the segment of small wineries, but that makes Verkat authentic.

• There can be no wine without passion and love, whether you produce it or truly enjoy its taste. What’s the source of your passion for wine? - Wine has always occupied an important place in our lives, both privately and as a family, but also as part of the culture of the area from which we hail. Viticulture and winemaking occupy an extremely important place in the history of the private life of the region of Srem, in the culture, customs and rituals, and even in the annual calendar that follows the rhythm of vineyard cultivation. The vineyard is a place that seems close to you when you grow up in Srem, and it is a given that wine is an important part of all stories and events. In that specific context, respect and love for wine were not strange to us, and they are certainly part of the reason why we started our own wine story. On the other hand, our father started a small production of Malvasia in Čerević, based on his personal passion for wine, so private winemaking has always been part of our lives, and the vineyard is a place of very fond memories of our

September

upbringing. In a way, Verkat is the realisation of a desire that we’ve had for many years. • The history of your winery is connected to a Malvasia plantation from 1957, which was found on Fruška Gora by your father Lazar. How come he opted for this Mediterranean grape variety in Vojvodina? How did those vines lead to you establishing Verkat? - Malvasia somehow just happened to find its way to Fruška Gora. Connected to its journey are stories from the village that explain how this strange thing happened. Cuttings arrived

• And while we’re mentioning the name Verkat, how did it come about? Is the name of the winery somehow associated with your surname? - Our surname comes from Berksovo, a village near Šid. We believe that Verkat is the root of our surname from the German language, which was given a Slavic adaptation over time. In the Austro-Hungarian administrations censuses from the end of the 18th century, which we found, one Verkat appears and then later disappears, only to become Vrkatić. It is also interesting that the first Vrkatić paid his ten per cent tax in wine.

Making our wine from our own grapes is extremely important to us, as it enables us to control the entire production by train from Istria and the cooperative planted them in the place where we found them. Due to a combination of circumstances or the experience of Banoštor winegrowers, Malvasia was planted in a place that turned out to be perfect, in a mild high valley that protected it from winds and frost. Here this variety not only succeeded in taking root, but also to thrive and bear fruit throughout all these years. Our father founded his vineyard there, which later became the backbone of our winery.

• You make all your wines exclusively from grapes grown in your own plantations. Do you plan to gradually increase production while remaining in the segment of small wineries? - Making our wine from our own grapes is extremely important to us. This gives us an opportunity to control the entire production and we are able to develop a special quality and aroma related to the region from which the wines come. We currently have more plantations than required for our

for our visitors in the best possible way. We would hereby like to invite everyone to visit our oasis of wine. • The winery is run by the two of you as sisters, while your chief oenologist is also a woman. Are we approaching a time when ladies will be increasingly present in this business? - This question is often mentioned, given that it is rare for women to be the owners of vineyards and wineries, but they are actually very much present. We always note that taking care of vineyards was traditionally a woman’s job and that the female workforce remains extremely important in that segment. The number of women on our wine scene, as technologists and winegrowers, is not negligible, nor is their contribution to improving the quality of Serbian wines. On the annual wine production, but we are increasing production slightly every year. In addition to their annual capacity, small wineries are characterised by their approach to wine production. It is primarily orientated towards and related to the locality where we are situated, responsible processing and care for the vineyard, developing the local quality of wine, aromatics, but also the possibilities brought by smaller production for experimentation and smaller series that can yield exceptional results. Regardless, we would like to always remain a small winery. • You have decided to advance step-by-step, to conquer the market with quality. Is that why you’ve limited yourself to two white wines and one rosé? Would one variety of red grape round off your authentic story? - The production of white wine is closer to us privately, so that’s what we’ve primarily concentrated on. We also wanted to make an interesting story and exceptional wines from three varieties that are traditionally some kind of house wines, Malvasia in Istria, Grašac and Muscat Hamburg in Srem, without planting large international varieties. When it comes to red wine, we would also like that to be something interesting and local. The plan is to raise plantations that would round off our offer. Considering that our assortment is perhaps slightly unusual, the search for a variety that would complete it taking quite a long time. We hope this search will be completed soon and that we’ll be able to offer a very interesting red wine.

Apart from better-supplied wine shops in Belgrade and Novi Sad, you can always find and taste our wines at our wine house in Čerević • Wines with the Verkat label are available in better-supplied wine shops and selected restaurants. Where else can they be found? - Apart from better-supplied wine shops in Belgrade and Novi Sad, you can always try our wines at our wine house in Čerević. We are lucky that our winery is housed in an old building dating back to the beginning of the 20th century, with a beautiful yard that complements the experience of wine tasting

contrary! Their contribution is great, but they lack visibility, so we also hope that this will change. The Wine Talks series, about ladies in the wine world, should also contribute to this and can be watched by anyone who is interested in this topic. The experience, knowledge and number of ladies on the wine scene in Serbia is large, and that’s perhaps surprising at first glance, but is certainly commendable. ■

September

BUSINESS

ANA VRANEŠ, TRI ORAHA WINERY

Prestige With Coverage At the Tri Oraha (Three Walnuts) Winery, wine is produced in a specific way, with a special relationship towards quality, an uncompromising approach and a lot of respect. The result is a truly great wine, of world premium quality, and the most expensive Serbian wine. The opportunity to taste and enjoy it is truly priceless

na Vraneš, owner, marketing and sales expert at Tri Oraha, explains the history, specificities and success of this family winery, which has a team that also includes father Radisav Šćepanović, the creator of the idea, and brother Petar, a master in the production of premium wine from the Negotin Frontier region. • Every country has its own wine region, while Serbia has several. What distinguishes wines from the Negotin Frontier region? - The passion for good wine compelled our father, wine guru Radisav Šćepanović Prof. Dr, to head for Negotin, where he managed to find the quality of wine closest to that of French wine. The Negotin Frontier region is associated with Bordeaux due to the specificity of the terrain, which yields a high quality of the international red grape varieties that we also planted here 15 years ago. The vineyard was purposefully raised on territory that contains strata of rich black soil, limestone of different colours that show the richness of different minerals and trace elements needed for growing high quality grapes on the right bank of the River Timok. That’s how the family story about the ‘Three Walnuts’ and ‘great wine’ emerged. • There are many wineries, and yours is different in many ways. Tell us about some of your peculiarities...

September

-The special quality of theTri Oraha Winery is that it provides quality, flavour and prestige, because profit is not the top priority. Our specificity is in the many years of aging and cultivating wine in barrique barrels (225L) and without any kind of technological intervention. It is common for wine to age in oak barrels for several months, up to a year, but Tri Oraha wines are aged for a minimum of five years. We take new barrels for each harvest, which are used only for that vintage and exclusively for grapes from our vineyard. Our cellar is the only place where you can see

Even despite many years of aging, Tri Oraha wine has unexpected freshness, strength and vitality, with all aromas: from green bell peppers, through berry fruits and plums, to fruit jam and nuts. • You have production facilities in the village of Crnomasnica and in the vicinity of Veliko Gradište. Which varieties dominate there? - Our vineyard is located near village Crnomasnica in Negotinska Krajna. There we planted red international varieties of Cabernet Sauvignon,

Thanks to the state's efforts aimed at encouraging the planting of new vineyards and the opening and equipping of new wineries, Serbia is moving on an upward trajectory when it comes to winemaking and viticulture and sample verticals of wine that have aged in barrels for the past 10 years, and we are also specific because, in addition to cabernet and merlot, we can also make a blend of verticals. The unique “blend 500” is made of samples from 500 barrels in the cellar from different vintages, with aging from one to eight years. It is an incredible fusion of the freshness of more recent vintages and the maturity of aged wines, made in a limited series of 500 bottles. The next endeavour is “blend 750” barriques, followed by “blend 1000” barriques.

Merlot and Cabernet Franc on 12 hectares. Our winery with cellar was built in Veliko Gradiste, and the winery has an annual capacity of 50,000 litres. Alongside the winery is a salon intended for tastings and relaxed enjoyment of these unique and exceptional wines that are consumed slowly, in small sips, from selected glasses. Serbia is moving on an upward trajectory when it comes to winemaking and viticulture. We must give thanks for the state’s efforts to encourage the planting of new vineyards and the opening and equipping of new wineries. ■

ZORANA BURLIĆ, DELTA REAL ESTATE CEO BUSINESS

More Than A Workplace Delta Real Estate Group is one of the leading regional companies in the real estate sector, with a focus on Serbia, Montenegro and Slovenia. The group’s comprehensive and diverse portfolio includes shopping centres, retail parks and hotels, as well as retail, office and residential properties in Serbia and the region

It will offer premium office space for rent and other contents that businesspeople expect from their workplace. This is the main reason why we say that Delta House is going to be ’More than a Workplace’.

• How are construction works progressing on your business building in New Belgrade? Will it be something completely new, more technologically advanced, unusual and different to everything that currently exists in our country?

• Can you tell us what’s happening with what are perhaps your most important projects – the Delta Planet developments in both Niš and Belgrade? - Delta already owns two shopping malls: the Delta Planets in Banja Luka, Bosnia-Herzegovina, and in Varna, Bulgaria. The shopping mall in Varna is currently preparing for the grand opening of an Ikea store, which will be the first Ikea store to be opened

his company assesses investments with the support of international consultants and avoids engaging in projects that lack long-term sustainability, as doing so would be irresponsible towards stakeholders, owners, employees and the wider community. This is the case with all investments, including when it comes to the Sava Centre

Delta House will offer premium office space for rent and other contents that business people expect from their workplace - The construction of Delta House was not stopped even when the state of emergency was declared, so we expect it to be completed as planned – by the end of the first half of next year. We truly believe that this business building is going to be something special, as it is entirely focused on the comfort, habits and health of its residents, as well as the protection of the surrounding environment.

in a shopping centre in Eastern Europe. The construction of Delta Planet in Niš is underway and is expected to be finalised in the first half of 2021. As far as Delta Planet Belgrade is concerned, our company is ready for its construction, both financially and in terms of personnel. Conditions are still to be fulfilled regarding urban planning.

• You abandoned plans to buy Belgrade’s Sava Centre because you consider it an investment that wouldn’t pay off under the prescribed conditions. That’s too bad, right, given that you had a great vision for that facility, which could represent an important link for the development of the city’s congress tourism and culture? - Delta is strategically interested in purchasing the Sava Centre, and this is something that we’ve stated publically several times. We believe that this particular facility plays an important role in Belgrade’s congress tourism, considering its location and tradition. Delta is interested in it because of the fact that it is in the domain of one of our core businesses – the hotel industry. It is physically connected to our Crowne Plaza hotel and near the location where the new Hotel InterContinental is to be built. This implies that we are planning on forming something that wouldn’t only be of benefit to Delta, but also other hotels, restaurants, taxi drivers, vendors and many others. Of course, under the condition that we see profitability and business interest in it. The decision to invest in something is made with the help of international consultants and we don’t start a project that isn’t sustainable over the long term. That would be irresponsible to our stakeholders, employees and the community that rightfully expects the kind of high-end events to which the Sava Centre is accustomed. ■

September

FEATURE

Against all odds, it turned out that the pandemic had one positive effect - we spent the summer getting to know Serbia, as the majority of the countries we traditionally choose as our go-to destinations closed their borders. The money was spent at home, but, unfortunately, this didn't help our economy and tourism much

September

How we Explored Serbia

he fact that the tourism industry would be most adversely hit by the pandemic was well known even before the coronavirus reached Serbia and then, as soon as we registered the first patients, the Business Association of Hotel and Restaurant Industry (HORES) issued an official warning. Despite an early letter sent to the Government of Serbia on 13th March informing it of the lack of guests, the need for assistance as the most hard-hit industry sector, their problems have not yet been fully resolved, even though the state had intervened variously on multiple occasions.

The first round of state aid for citizens and businesses approved by the Government at the beginning of April amounted to 5.1 billion EUR and the second round of state aid for businesses amounted to 1.36 billion EUR. In the meantime, certain sectorial measures were prepared and adopted. Last but by no means least important of them, amounting to 1.25 billion dinars was aimed at helping about 280 hotels located in cities to “keep their heads above the water” according to the competent Minister, Dr Rasim Ljajić. Whether it will be effective and for how long, remains to be seen. ■

GENOV: WE WILL NOT SURVIVE WITHOUT STATE AID

– We have presented a proposal for the hotel and restaurant owners to be exempted from the property tax which has a very high rate and for our liabilities to Srbijagas and Elektroprivreda Srbije to be reprogrammed, the VAT rate on food to be cut from 20% down to 10% and for the legal provisions governing occasional jobs concerning seasonal workers to be applied to workers employed in tourism and hotel industry - said Georgij Genov, Director of the Business Association of Hotel and Restaurant Industry (HORES). He suggested that all educational trips for school and university students should take place in Serbia and expressed hope that business tourism too will step up in the autumn. – For now, the primary goal is to survive so that next year we could fully recover – Genov pointed out.

SENIČIĆ: TRAVEL AGENCIES FADED INTO OBSCURITY

– Tour guides and travel agencies have had no work nor income and the overall situation is nearly disastrous from the viewpoint of survival amid the global pandemic and the inability to do business. After the new government is formed, JUTA will insist on obtaining state support for tourist agencies to ensure their survival until the next year. If it were possible to expect for the borders to open in the autumn and that we would be able to work, we would not have asked for help. However, that is highly unlikely - said Aleksandar Seničić, Director of the Serbian Association of Travel Agencies (JUTA). He pointed out that state aid to rent-a-car and tourist agencies and guides amounting to 15-20 million euros would resolve some of the problems encountered by this segment of our economy and would testify to the importance of this sector to the Government.

ČADEŽ: THERE’S NO RECOVERY FOR THE ECONOMY WITHOUT THE GROWTH OF LARGE COMPANIES

To ensure the growth and recovery of our economy, large companies also need to be supported by the state and the Chamber of Commerce to mitigate the consequences of the coronavirus pandemic. – We will continue to work on the proposal of aid measures for large companies to support their investments, facilitate their operations in the country and abroad, remove obstacles to continuing import and capturing of the new markets. During the pandemic, large companies relied on their own resources when resolving issues but their further growth requires support - announced Marko Čadež, President of the Chamber of Commerce & Industry of Serbia. September

NALED: STATE AID TO THE ECONOMY LACKED FOCUS Jelena Rančić, NALED’s advisor for regulatory reforms stated that the extent of the crisis caused by the coronavirus outbreak, which penetrated all world’s economies, is estimated to be equal to the extent of the financial crisis in 2008, and maybe even greater. The success of the state’s measures does not depend merely on the size of the aid package but also the duration of the crisis, and the recovery from the current crisis is not expected to start before mid-2021. They lacked focus which was to be expected for the first package of aid measures due to their urgency, but probably such focus should have been felt in the second package. There was more time for analyses and the adoption of measures for specific industries - Jelena Rančić pointed out. Her position is backed up by Željko Tomić, President of the NALED’s e-Government Alliance. In his opinion, the advantage of these measures lies in the fast Government’s response, however, he believes that the money should have gone to those who are hardest hit by the crisis i.e. those who need it the most.

MALI: DIRECT GOVERNMENT SUBSIDIES FOR CITY HOTEL OWNERS

City hotels will get direct government subsidies of 350 euros per bed and 150 euros per room, which is a new measure and the first one aimed at mitigating the effects which the coronavirus crisis had on the hotel industry. – Out of 380 categorised city hotels in our country, only 112 of them are now open for business. In Belgrade, only 42 out of 115 hotels are open with an occupancy rate of 10%. The hotel owners will receive the funds late in September or no later than the first week of October, with the only requirement for using this state aid being that no more than 10% of employees are dismissed - said Minister Mali, adding that the state had already provided two aid packages for the businesses, which were also used by the tourism industry, and that this aid package was specifically targeting this industry.

EU: WE WILL HELP CAMPSITES, BOARDING HOUSES, WINERIES, BEEKEEPERS... Thanks to the EU For You Project, small and micro companies, family businesses, agricultural households and companies across 12 cities and municipalities in eastern and southeast Serbia were granted a million euros for the implementation of 120 projects in tourism aimed at eliminating the consequences of the pandemic. Thanks to this EU project, the funds will be received by the hardest-hit entrepreneurs in the tourism industry to help them improve their offers for tourists. The majority of future users of the grant, amounting to 10,000 euros per project, are in the business of providing private accommodation for tourists (52 entrepreneurs). This support will also include camps, restaurants and providers of various restaurant and food services, boarding houses, hotels, hostels, travel agencies, wineries and commercial beekeepers. 20

September