Offences are split into three main categories: criminal offences, commercial offences and misdemeanours.
Criminal Offences
A criminal offence is constituted by the presence of a specific action that is prescribed as a criminal offence by the law, and that is committed with criminal intent (or, where specifically prescribed, out of negligence).
Each criminal offence has its own special substantive elements prescribed either by a particular law or by the Criminal Code.
Criminal intent (culpability)
Criminal intent exists if the offender was mentally competent, acted with premeditation and was aware (or should or could have been aware) that their action was prohibited.
If so prescribed by the law, the offender may also be guilty when acting with negligence. Negligence is defined as follows:
Action and omission
A criminal offence is usually perpetrated by active behaviour. Omission as a manner of perpetrating criminal offence is exceptional and exists only where it is specifically provided for.
Attempted criminal offences, inappropriate attempts and voluntary abandonment
An attempt represents an incomplete criminal offence (with all its attributes and constituent elements) – ie, where an offender failed to complete a criminal offence. If such offence is punishable by law, an attempt could be punished by a prison sentence of five years or more. In the case of other criminal offences, an attempt can only be punished if the law explicitly prescribes punishment of such an attempt.
An inappropriate attempt occurs when an offender attempts to execute a criminal offence with inappropriate means or against an inappropriate object. In such cases, punishment of the offender may be remitted.
An offender who voluntarily abandoned the act of executing a criminal offence, or who prevented its consequences, may also be remitted from punishment.
Commercial Offences
A commercial offence is a socially harmful violation of the regulations on economic or financial operations, which has caused or could have caused graver consequences, and which is defined as a commercial offence by a regulation.
A legal entity may be liable for a commercial offence, as may the person responsible for economic or financial operations within that legal entity.
Generally, a person is responsible for a commercial offence if it was committed by the person՚s action or failure to exercise due supervision, regardless of whether the person acted intentionally or negligently. In exceptional cases, regulation may determine that a commercial offence can only be committed with intent.
Liability for an attempted commercial offence exists if the regulation defining the offence expressly stipulates that an attempt will be punished.
Misdemeanour
A misdemeanour is an illegal act for which a misdemeanour sanction is prescribed. A misdemeanour may be committed by action or omission when the regulation so stipulates. An attempt at a misdemeanour is punishable only if explicitly prescribed as such.
A person (natural or natural person-entrepreneur) or legal entity (including all companies, government bodies, governmental agencies and local authorities), or a person responsible for a legal entity, may be liable for a misdemeanour if, at the time of committing the misdemeanour, they:
Negligence is deemed sufficient for a misdemeanour liability to exist, except where intent is explicitly required by regulation.
Criminal Offences
There are statutes of limitations for criminal prosecution and for the enforcement of criminal punishment.
There is further distinction between absolute and relative statutes of limitations. The relative statute of limitations may be interrupted by any action from the prosecutor, in which case it starts again from the beginning. The absolute statute of limitations is based on the lapse of a prescribed period of time, after which it is no longer possible to undertake criminal prosecution.
The statute of limitations for criminal prosecution expires automatically when twice the time required by law for the statute of limitations for criminal prosecution has passed. It begins from the date the criminal offence took place or the date the consequence of the offence occurred, whichever is later.
There is no separate statute of limitations for concealed criminal offences. For continuing offences, the statute of limitations starts from the last committed offence.
Misdemeanours
There are statutes of limitations for the prosecution of misdemeanours and for the enforcement of punishment for misdemeanours.
The statute of limitations for misdemeanour prosecution starts to run from the date when the misdemeanour was committed.
The statute of limitations for the enforcement of misdemeanour punishment begins from the date the judgment becomes final and binding.
There are absolute and relative statutes of limitations for both the prosecution of misdemeanours and the enforcement of punishment for misdemeanours. The relative statute of limitations lasts for one year from the date the misdemeanour was committed, and the absolute statute of limitations is calculated in the same manner as per criminal offences.
A special law may prescribe longer deadlines for statutes of limitations for offences in the field of customs, foreign trade, foreign exchange operations, public revenues and finances, public procurement, trade in goods and services, environment, prevention of corruption and air traffic offences, but no longer than five years.
Commercial Offences
The (relative) statute of limitations for the prosecution of commercial offences lasts for three years from the date the offence was committed.
Exceptionally, for commercial offences in the field of foreign trade, foreign exchange and customs operations, the statute of limitations for prosecution lasts for five years from the date the commercial offence was committed.
The Law on Commercial Offences prescribes the application of the relevant parts of the Criminal Code to the statute of limitations for prosecution. Consequently, the absolute statute of limitations for the prosecution of commercial offences expires after a period of six years. Identical rules apply to the statute of limitations for the execution of a sentence.
Criminal Offences
Extraterritorial reach may be applied to white-collar offences where:
Domestic and foreign legal entities are liable for criminal offences committed on Serbian territory. Foreign legal entities are liable for criminal offences committed abroad to the detriment of Serbia, its citizens or a Serbian legal entity. Domestic legal entities are liable for a criminal offence committed abroad.
Misdemeanours
Foreign natural and legal persons and foreign persons responsible for legal entities are liable for misdemeanours, as are domestic natural, legal and responsible persons. However, a foreign legal entity and a responsible person may only be punished for a misdemeanour committed on Serbian territory if:
In exceptional circumstances, offenders may be punished for misdemeanours committed abroad if such punishment is explicitly provided for by regulations ‒ eg, in the case of certain customs offences.
Commercial Offences
A foreign legal entity and a person responsible for a foreign legal entity may be liable for a commercial offence only if the foreign legal entity has a representative office on Serbian territory or if the commercial offence was committed by means of transport.
A legal entity is responsible for any criminal offences that are committed by the persons in charge, with the intention of gaining benefits for said legal entity, while they are working within the scope of its operations or authorisation. The legal entity is also responsible if a person in charge fails to exercise supervision or control over the actions of any other natural person who is under their supervision or control and, as a result, such failure enables the natural person to commit a criminal offence with the intention of gaining benefits for the legal entity.
Both legal entities and responsible persons therein may be held liable for the same offence.
There is no policy preference regarding whether to pursue a legal entity or a natural person (or both), but prosecutors hesitate to prosecute legal entities because of a general fear that this will have a negative impact on the economy.
A legal entity formed through a merger or acquisition is not a universal successor of the legal entities that participated in the merger or acquisition. If the legal entity that participated in the merger or acquisition had benefited from criminal activities, and if those benefits were entered into the newly formed legal entity during the M&A process, then the newly formed legal entity would be criminally liable. Otherwise, a successor entity is not liable for criminal offences committed by the target entity that occurred prior to the merger or acquisition.
If the legal entity is found guilty of a criminal offence owing to the actions or omissions of the person responsible for or in charge of said legal entity (eg, failure to control and supervise), and the legal entity is obliged to compensate a third party for damages as a result, the legal entity may then sue the responsible person in a recourse action.
The legal framework for damage compensation in cases of white-collar criminal offences includes:
Victims of white-collar crimes may claim compensation in both criminal and civil proceedings. Legal grounds for damage compensation may be:
In existing case law, victims are usually directed to pursue their compensation claims via civil proceedings if there has been a conviction.
Because the parties involved in these proceedings are legal entities, commercial courts are usually the competent courts when it comes to damage compensation for white-collar crimes. In rarer cases, basic or higher courts may be competent, depending on the financial census of the case in question.
However, even in cases where there is no conviction (eg, not-guilty verdict, acquittal or statute of limitations application) for a criminal/commercial/misdemeanour offence, it is still possible to claim for damages in a civil court because civil liability is generally much broader than criminal liability.
In Serbia, there are no class action lawsuits. However, there are circumstances in which compensation for damage can be claimed in much the same way as a class action lawsuit – for example, in some criminal cases, the victims will be hundreds of thousands of minor shareholders. In such cases, the court will order one sum to be paid as compensation, and this sum will be distributed to all shareholders according to their participation in the shareholder structure. In addition, Serbia recognises the concept of derivative claims, in which the plaintiff requests damages for third-party victims.
In the past year, there was one significant development in terms of new legislation adopted in the field of white-collar crime: the new Law on Public Prosecutor Offices and the Law on High Prosecutor Council with Constitutional laws were enacted as part of a package of judicial laws that also included the Law on the Organisation of Courts, the Law on Judges and the Law on High Judiciary Council.
The government of the Republic of Serbia published a Proposal of the National Strategy for the fight against corruption for the period 2023–2028 with an Action Plan, in an effort to implement the recommendations of GRECO (Group of States against Corruption).
Serbia entered the Western Balkans Criminal Justice project dedicated to enhancing cross-border judicial co-operation in the Western Balkans, implemented by European Union Agency for Criminal Justice Cooperation (Eurojust) and funded by the European Union Instrument of Pre-accession Assistance (IPA III).
There has been increased co-operation with Eurojust and Europol in the past year, to combat organised crime.
The main authorities responsible for the investigation and prosecution of white-collar offences are:
Essentially, the only difference in competence between authorities that battle corruption and authorities that battle organised crime in the field of white-collar criminal offences is monetary census. If the amount of illegal gain exceeds RSD200 million (or if the value of public procurement exceeds RSD800,000), the authorities for combating organised crime will be competent; if it is less, the authorities for combating corruption will be competent.
Basic prosecutors' offices, local police departments dedicated to commercial crime and basic courts are competent for tax evasion, damaging creditors and some other minor white-collar criminal offences.
The misdemeanour procedure is initiated at the request of the authorised authorities, which are determined by special laws or other by-laws that also prescribe a particular misdemeanour. They can be various civil and administrative authorities, such as investigative authorities, tax authorities, customs authorities and prosecutors’ offices.
Conflict of jurisdiction between prosecutors and civil/administrative authorities exists in cases where the same event contains constituent elements of both criminal offences and misdemeanour/commercial offences ‒ for example, in cases of tax evasion, in which the difference is essentially determined by the amount of tax evaded. In such events, if someone has been found guilty of a misdemeanour, they cannot also be tried for a criminal offence, as the ne bis in idem principle applies.
Rules on initiating white-collar investigations are determined by the powers and legal standing of the competent authorities, whether civil or criminal.
Criminal offence proceedings may be initiated only by the competent prosecutor's office, following a criminal application by police, victims, civil or enforcement authorities. Commercial offence proceedings may be initiated only by the competent prosecutor's office, although the application may come from any civil or administrative enforcement authority. Misdemeanour proceedings may be initiated by any competent investigative authority (or other state, province or local authority with public authority or any civil authority).
Public prosecutors are obliged to perform their duties professionally, conscientiously, impartially, fairly and without undue delay, taking particular care to protect victims and prevent discrimination on any basis.
The police force, tax authority and various investigative authorities have their own specific scopes of authority and are not directly subordinate to the Public Prosecutor's Office (in a hierarchical sense), which is a problem in Serbia. Although the Public Prosecutor has the principle of proactivity, it is bound by the results of police work.
The powers of the police in the pre-investigation procedure should be distinguished from the taking of evidentiary actions. Evidentiary actions refer to the efforts of the Public Prosecutor and the police to gather evidence.
The police have the general authority to:
Investigators within the various ministries are authorised to:
The authority will temporarily confiscate and ensure the safekeeping of objects that under the law must be confiscated or that can be used as evidence in criminal proceedings. All persons must hand over the items, except the defendant and persons who are excluded from testifying.
Where there are grounds to suspect that an offence has been committed that is per law prosecuted ex officio, the police are obliged to take the necessary measures to discover and secure traces of the offence and objects that can serve as evidence, and to collect all information that could be useful for the successful conduct of proceedings. This includes the authority to investigate the premises of legal entities in the presence of the responsible person, and to inspect their documentation and confiscate it.
Under the same conditions, any employee, officer or director of a company may be summoned for questioning.
Internal investigations are not deemed necessary or mandatory. In practice, whether internal investigations are considered by enforcement authorities and courts will depend on whether the evidence gathered as a result is permissible according to the Criminal Procedure Code.
The benefit of conducting an internal investigation and presenting the results (self-reporting) is that it makes it possible to enter a non-prosecution agreement with the competent prosecuting authority.
During the internal investigation, attention should be paid to personal data as per the Data Protection Law.
The person leading the investigation should always be aware that conducting interviews and taking statements is entirely voluntary. If the employee agrees, their statement may be taken in accordance with the provisions of the Civil Code.
There is no obligation for the employees to co-operate. Usually, during the introductory part of an internal investigation, it is suggested to employees that they will have certain legal benefits if they co-operate, whatever the result of the investigation may be. If an employee agrees to co-operate during the internal investigation, they can engage legal counsel at their own expense; however, the presence of legal counsel is not mandatory.
When conducting an internal investigation and taking statements from the employee, best practice includes three main steps:
The Republic of Serbia has signed 52 bilateral international agreements that regulate international legal assistance in criminal matters with 31 countries.
The enforcement of foreign criminal judgments is regulated exclusively by special agreements. The assignment and taking over of criminal prosecution are not regulated by any special contract. This type of legal aid is already regulated in a number of countries, along with general types of international legal assistance.
The Republic of Serbia is a member of 24 Council of Europe conventions on providing international legal assistance in criminal matters, and is a member of more than 30 UN conventions.
The most significant treaties that apply include:
Other conventions of the Council of Europe regulate cross-border co-operation in certain criminal matters, including corruption. There are also UN conventions that regulate cross-border co-operation regarding criminal activities such as corruption.
It is also worth noting that the Republic Public Prosecutor's Office participates in the work of international prosecutorial networks and bodies such as Eurojust, the Southeast European Prosecutors Advisory Group (SEEPAG), the Consultative Council of European Prosecutors, and others. The Republic Public Prosecutor's Office has intensified its co-operation with Eurojust of late. Serbia has also entered the Western Balkans Criminal Justice project dedicated to enhancing cross-border judicial co-operation in the Western Balkans, implemented by Eurojust.
Serbia does not have blocking statutes or equivalent regulation.
Extradition
Serbia has signed bilateral agreements with 28 countries. Additional legal instruments that apply are the aforementioned European Convention on Extradition of 1957 and additional protocols from 1975, 1978, 2001 and 2012.
It is important to note that the state requesting the extradition is not a party in the extradition proceedings and does not have any rights (such as the right to inspect the file or to file motions or remedies).
There are no special rules that govern or distinguish the matter of extradition in the case of white-collar crimes, so general rules are applied.
Extradition will not be permitted if:
Extradition may be postponed until:
Extradition of Serbian citizens
The extradition of Serbian citizens is only possible in exceptional circumstances.
The Republic of Serbia's existing Constitution does not regulate the matter of extraditing its own citizens. Serbia has reached agreements that foresee the extradition of its own citizens with the Republic of Croatia, Montenegro, North Macedonia, Bosnia and Herzegovina, Italy and the USA, among others. Bearing this in mind, the Law on International Legal Assistance in Criminal Matters provides that the Law will only be applied if there is no agreement or if certain issues are not regulated within the agreement.
For white-collar offences, prosecution is initiated by the Public Prosecutor's Office filing an indictment proposal for offences punishable by a fine or imprisonment of up to eight years, or by indictments for offences punishable by imprisonment for more than eight years.
Enforcement bodies and courts have no rights to exercise their discretion when deciding whether a company or an individual will be charged with a white-collar offence.
The only possible “exceptions” are where certain persons have entered into a special type of a plea agreement with the Public Prosecutor’s Office that, for example, grants them the status of:
This plea agreement is made by the Public Prosecutor's Office but needs to be approved by the court. The court can only refuse to approve the agreement if:
The only guidelines in this respect concern what evidence the Public Prosecutor's Office will receive from the offender by concluding the plea agreement, and what evidence can be considered when deciding whether to drop the charges.
“Postponement of criminal prosecution” has been introduced into Serbian law relatively recently as an alternative means of resolving a criminal investigation; in its essence, this constitutes a deferred prosecution agreement. The prosecutor agrees to drop the charges if the defendant agrees to fulfilling certain conditions, such as:
This mechanism is applicable to all criminal offences that are punishable by a monetary penalty or a maximum of five years in prison.
The prosecutor has the discretionary right to apply this alternative mechanism as it is not obligatory and is only prescribed as a possibility.
A defendant may voluntarily admit to the charges, in which case the prosecutor and the defendant may reach a plea agreement. This is possible from the beginning of the investigation until the end of the trial. The defendant will voluntarily acknowledge charges in exchange for:
This plea agreement must be approved by the court, which will check and control all elements of the agreement and its compliance with the law before granting approval.
There are no plea agreements in the case of commercial offences.
Plea agreements do exist for misdemeanour offences. In the context of white-collar misdemeanours, it is worth mentioning the guidelines issued by the Ministry of Finance concerning plea agreements in tax-related offences.
Plea agreements may be reached following the acknowledgement of the tax-related misdemeanour offence, based on the pre-condition that the taxpayer will eliminate the illegality/irregularity and the consequence of the violation and pay the tax.
The type and amount of the misdemeanour sanction are determined in the plea agreement and are based on:
Two sub-criteria, depending on the nature of the offence, are:
The following criminal company law and corporate fraud offences are recognised in the Serbian Criminal Code.
Fraud in Conducting Business Activity
Basic constituent elements
This criminal offence consists of the following:
Sanctions
The basic form of this offence is punishable by a monetary fine and imprisonment for a term of between six months and five years. Qualified forms of this criminal offence depend on the amount of illegal gain/damage incurred.
Fraud in Insurance
Basic constituent elements
This criminal office consists of destroying, damaging or hiding an insured object, and then reporting damage with the intention of collecting an agreed sum from an insurance company.
Sanctions
The basic form of this offence is punishable by imprisonment for a term of between three months and three years. Qualified forms of this criminal offence depend on the amount of illegal gain/damage incurred. Attempts are also punishable.
Embezzlement in Conducting Business Activity
Basic constituent elements
This crime is committed when the offender:
Sanctions
The basic form of this offence is punishable by imprisonment for a term of between three months and five years. Qualified forms of this criminal offence depend on the amount of illegal gain/damage incurred.
Abuse of the Position of a Responsible Person
Basic constituent elements
This criminal offence occurs when, by abusing their position or powers, the responsible person exceeds the limits of their powers or fails to perform their duties, and in doing so (and providing this does not constitute another criminal offence or parts thereof)obtains unlawful material gain for themselves or for another natural person or legal entity, or incurs material damage to another person.
Sanctions
The basic form of this offence is punishable by imprisonment for a term of between three months and three years. Qualified forms of this criminal offence depend on the amount of illegal gain/damage incurred.
Additional Criminal Offences
The following also constitute white-collar criminal offences in the Republic of Serbia:
The Serbian Criminal Code outlines the following main bribery and influence peddling offences.
Abuse of Office
Basic constituent elements
This offence can only be committed by an official who does the following by exercising their official position or authority, exceeding the limits of their official authority or failing to perform their official duty:
Sanctions
The basic form of this offence is punishable by imprisonment for a term of between six months and five years. Qualified forms of this criminal offence depend on the amount of illegal gain/damage incurred.
Trading in Influence
There are several different forms of this criminal offence.
Basic constituent elements
The request for or receipt of a gift (or any other benefit) for one's self or another ‒ directly or through a third party ‒ in exchange for the use of an official or social position or actual or presumed influence to mediate in the performance or non-performance of an official action.
Sanctions
The basic form of this offence is punishable by imprisonment for a term of between six months and five years. There are additional forms of this criminal offence (with varying sanctions), which include variations on the basic constituent elements.
Soliciting and Accepting Bribes
There are also several forms of this criminal offence.
Basic constituent elements
This offence is committed when:
Sanctions
The basic form of this offence is punishable by imprisonment for a term of between two and 12 years. There are additional forms of this criminal offence (with varying sanctions), which include variations on the basic constituent elements.
Bribery
There are also several forms of this criminal offence.
Basic constituent elements
This offence is committed by:
Sanctions
This offence is punishable by imprisonment for a term of between six months and five years.
The main regulation in the field of Serbian anti-bribery legislation is the Law on Prevention of Corruption, which established the Anti-Corruption Department, as well as sector-specific regulation (financial, public, etc). The primary task of the Anti-Corruption Department is the monitoring of property and any conflict of interest among public officials.
In addition, the ISO 37001 Anti-Bribery Management System has been translated and adopted.
In heavily regulated industries such as finance, insurance and energy, there is an obligation to maintain a compliance programme, as stipulated by regulations including:
Although these laws do not state that failing to maintain a compliance programme is a criminal offence, they do foresee misdemeanour offences, commercial offences and various monetary penalties rendered by the National Bank of Serbia (NBS) in case of violation of such obligations.
A compliance programme comprises a system of internal controls within which appropriate administrative and other procedures are agreed. Management is then obliged to organise and apply these policies and actions in a way that corresponds to the nature, complexity and risk of the work and the framework of internal control. A compliance programme also entails procedures for the purpose of:
The main offences and sanctions in relation to insider dealing, market abuse and criminal banking law are detailed in the following Serbian laws.
The Law on Capital Markets
The Law on Capital Markets prescribes the following criminal offences and sanctions:
The Law on Digital Assets
The Law on Digital Assets prescribes sanctions of a fine or up to one year in prison for anyone who, with the intention of obtaining material gains or causing damage to other persons, uses insider information:
The Law on Digital Assets also prescribes sanctions of a fine and between six months and five years in prison for anyone who engages in market manipulation for their own or another's benefit or who harms other persons by:
The Law on Banks
The Law on Banks prescribes a prison sentence of between three months and five years for anyone who engages in the following criminal offences:
In cases where the amount of material gain obtained by committing these offences exceeds certain amounts provided by the Law, the sanctions may be stricter.
The Law on Foreign Currency Operations
The Law on Foreign Currency Operations prescribes the following actions as criminal offences, and includes the accompanying sanctions:
The Law on Open Investment Funds with Public Offerings
The Law on Open Investment Funds with Public Offerings prescribes the following actions as criminal offences, and includes the accompanying sanctions:
The Criminal Code prescribes two types of tax fraud, which are essentially differentiated by the type of public income that is defrauded.
Tax Evasion
The first offence occurs where the offender intends to fully or partially avoid paying more than RSD1 million in taxes by:
Criminal intent must be proven.
The prescribed sanctions are a fine and between one and five years in prison. Qualified forms of this criminal offence exist and incur longer prison terms, depending on the amount of tax evaded.
The relevant tax laws provide penalties for misdemeanours or commercial offences in cases of tax evasion (and other prescribed duties or liabilities) where the amounts evaded are less than RSD1 million.
Evasion of Withholding Tax
The second criminal offence is non-payment of withholding tax, which is a special type of tax evasion that refers to those taxes, mandatory social security contributions and other prescribed duties that are paid as withholding tax. A criminal offence exists simply by not paying it, with the intent of evading it. Intent is proven by the sole act of the failure to pay.
The prescribed sanctions are a fine and a prison term of between one and five years. Qualified forms of this criminal offence exist and incur longer prison terms, depending on the amount of tax evaded.
Obligations to Prevent Tax Evasion
The Law on Tax Procedure and Tax Administration (LTPTA) provides for the following criminal offences.
The LTPTA, along with other relevant regulations that prescribe liability for the payment of specific types of taxes and other duties, imposes obligations on legal entities and entrepreneurs regarding such payment in detail. Failure to comply with such obligations is sanctioned as a misdemeanour.
The LTPTA and other regulations impose a series of obligations on companies to calculate and pay taxes and to submit a tax application. Failure to meet these obligations is sanctioned as a misdemeanour or commercial offence.
Pursuant to the Law on Accounting, legal entities and entrepreneurs are obliged to keep proper accounting documents, business books and financial reports, and to decide upon specific persons and business premises responsible for their storage, as well as the manner of storage. Financial reports, audit reports and statistical reports must be kept for 20 years.
Failure to comply with the established obligations is sanctioned either as a commercial offence or a misdemeanour.
A criminal complaint or a request to initiate misdemeanour proceedings may be filed if an authorised person determines that the creator and owner has damaged or destroyed archival material or documentary material for which the storage period has not expired.
Damaging or destroying financial records may be treated as concealment of a criminal offence and is punishable as such under the general rules of criminal law. Criminal intent must be proven.
Penalties for failure to keep or disclose accurate financial records range from RSD50,000 to RSD2 million for legal entities and from RSD5,000 to RSD150,000 for responsible persons in a legal entity.
Commercial offences with regard to keeping accurate financial records are prescribed by the Law on Accounting, with monetary penalties that range from RSD100,000 up to RSD3 million for legal entities and from RSD20,000 up to RSD150,000 for responsible persons in a legal entity.
The main criminal offence relating to competition law is the signing of a restrictive agreement. Unless an individual exemption applies, any person in a business entity who enters into a restrictive agreement that fixes prices and restricts production or sales (ie, divides the market) faces a fine and between six months and five years in prison.
A company may be obliged to pay a monetary fine equivalent to up to 10% of the total annual revenue generated on Serbian territory if it:
Any company that reports the existence of a violation may be exempt from the penalty obligation.
The Criminal Code now prohibits the signing of a restrictive agreement aimed at fixing prices, limiting production or market sharing.
In relation to consumer law, it is prescribed that the production and circulation of harmful products is punishable by a monetary fine and between six months and five years in prison.
However, a series of administrative misdemeanour offences have been put in place primarily to protect consumers' rights from various violations, the most common of which are not issuing invoices to the consumer, misleading the consumer and unfair business practices.
Companies and responsible persons therein face monetary penalties for these misdemeanours, ranging from RSD50,000 to RSD2 million.
Protective measures may be issued to both companies and responsible persons within the companies.
The Criminal Code recognises the following criminal offences in relation to cybercrime, computer fraud and the breach of company secrets.
Damaging Data and Computer Programs
Basic constituent elements
Deleting, altering, damaging or concealing data without authorisation or otherwise making computer programs unusable.
Sanctions
The basic form of this offence is punishable by up to one year in prison. Stricter sanctions are prescribed for several qualified forms of this offence, depending on the amount of damage incurred by the illegal activity.
Creating and Introducing Computer Viruses
Basic constituent elements
Creating a computer virus with the intent to introduce it into another’s computer or computer network.
Sanctions
This criminal offence is punishable by a fine or imprisonment for up to six months. If damage is incurred as a result, prescribed sanctions are a fine or imprisonment for up to two years.
Computer Fraud
Basic constituent elements
This offence is committed when someone intentionally enters incorrect data, fails to enter correct data or otherwise conceals or falsely represents data in order to affect the results of the electronic processing and transfer of data, leading to:
Sanctions
Prescribed sanctions are a fine or a prison sentence of up to three years. Qualified forms of this offence with stricter sanctions exist, depending on the amount of damage.
Unauthorised Access to Computers, Computer Networks or Electronic Data Processing
Basic constituent elements
Accessing a computer or computer network without authorisation by circumventing protection measures, or accessing electronic data processing without authorisation by circumventing protection measures.
Sanctions
Prescribed sanctions are a fine or imprisonment for up to six months. If certain special criteria are fulfilled, the sanction may be more strict.
Additional Cyber-offences
The following cyber-offences are also included in the Criminal Code:
Disclosing a Business Secret
The Criminal Code prescribes disclosing a business secret as a criminal offence, which is punishable by between six months and five years in prison.
If this criminal offence is committed for gain or involves particularly confidential information, prescribed sanctions are a fine and between two and ten years in prison. The Criminal Code defines a “business secret” as information and documents declared by law, other regulations or the competent authority as a business secret whose disclosure would or could cause harmful consequences for the enterprise or other business entity.
The Law on the Protection of Trade Secrets also prescribes the unlawful obtaining, using or disclosing of a business secret as a criminal offence, with a monetary penalty in the range of RSD100,000 to RSD3 million.
Financial, trade and customs offences are prescribed by various different laws, including the Criminal Code, the Law on Foreign Exchange Operations, the Customs Law and the Law on the National Bank of Serbia.
The main financial crimes are foreseen by the Criminal Code:
The only customs criminal offence that is prescribed by the Criminal Code is smuggling. This is also a matter of misdemeanour regulation.
The main trade criminal offences prescribed by the Criminal Code are illegal trade and illegal production.
There are also numerous commercial offences and misdemeanour offences prescribed in relation to finance, trade and customs.
Concealment is prescribed as a criminal offence and is punishable by a fine or imprisonment of up to three years. The penalty may not exceed the statutory penalty for the offence through which the object was acquired.
In addition, concealment may be treated as an act of aiding and abetting in the execution of a criminal offence.
Two criminal offences relate to concealment as a white-collar crime:
Concealment predicate offences can vary – for example, giving a false statement to the competent authority in order to conceal the exact order of a company's finances may be a predicate offence as fraud in conducting business activity.
Giving a false statement may also appear as a predicate offence in tax avoidance. In order to facilitate tax evasion, false information on legal income/expenditures is usually supplied.
The general rules of criminal law are applied to aiding and abetting with regard to corporate criminal offences, and anyone whose actions fall under these general rules may be punished for aiding and abetting in corporate criminal offences.
An abettor will be sanctioned by the prescribed punishment for the criminal offence to which the abetting relates, but with the possibility of penalty mitigation.
A person conspiring or abetting in a criminal offence is judged on their own intent, which can be separate from the intent of the offender. Also, a conspirator or abettor who wilfully prevents the execution of the criminal offence may be exempted from punishment.
Money laundering is defined as:
The above-mentioned elements must be proven. Prescribed sanctions are a fine and imprisonment for between six months and five years. Qualified forms of this criminal offence depend on the amount of laundered funds and other qualifying circumstances, with sanctions varying from one to 12 years of imprisonment.
Predicate offences and events usually include all types of corporate frauds offences (see 3.1 Criminal Company Law and Corporate Fraud), bribery (see 3.2 Bribery, Influence Peddling and Related Offences), insider trading (see 3.4 Insider Dealing, Market Abuse and Criminal Banking Law) and tax fraud (see 3.5 Tax Fraud).
In terms of specific obligations to prevent money laundering, the Law on the Prevention of Money Laundering and the Financing of Terrorism obliges banks, currency exchange offices and providers of money transaction services to undertake the necessary checks (eg, KYC and verifying the legal basis of a transaction) when opening bank accounts and transferring money. The NBS has rendered several by-laws that prescribe in detail the procedure and steps for how to fulfil the obligations of said law.
Violation of these obligations (ie, failure to fulfil them) constitutes a commercial offence (punishable with monetary penalties in the range of RSD100,000 to RSD3 million for legal entities, or from RSD10,000 to RSD200,000 for responsible persons) or a misdemeanour offence (punishable with monetary penalties in the range of RSD10,000 to RSD500,000, and penalties for responsible persons ranging from RSD5,000 to RSD50,000). The NBS, the Basic Prosecutor's Office (in the case of commercial offences) and the Administration for the Prevention of Money Laundering are the main prosecuting authorities for these violations.
The Administration for the Prevention of Money Laundering is established in Serbia as the principal authority in the field of conducting anti-money laundering activities. It collects, processes and analyses information, data and documentation obtained in accordance with the law and forwards it to the competent authorities. It also performs other tasks related to the prevention and detection of money laundering and terrorist financing.
The defence depends on the type and circumstances of the white-collar offence in question and on the specific case.
Where there are criminal, misdemeanour or commercial offence charges of tax evasion, the defence would primarily try to prove that there was no criminal intent and that the omission in the tax application resulted from a different interpretation of the applicable regulation in cases where there is any arbitrary element in tax regulation. In addition, the tax due should be paid (even if a criminal/commercial/misdemeanour offence is initiated and ongoing) in order for the prosecutor to accept that there was no intent and drop the charges.
In most cases, the defence may try to present evidence of strong internal procedures and compliance programmes that were actually carried out. The existence and application of such a programme can lead to a not guilty verdict for the company directors or it can be viewed as a mitigating factor, especially in heavily regulated sectors such as banking, insurance and pharmacy, but this is not automatic.
There are a few significant exceptions for white-collar offences in Serbia. For example, tax evasion does not constitute a criminal offence if the amount of evaded tax is less than RSD1 million; it is a misdemeanour offence.
In accordance with the Law on Health Care, it is possible to give a non-monetary gift of thanks to medical staff if the individual value does not exceed 5% and the total value does not exceed the amount of one average monthly salary without taxes and contributions in the Republic of Serbia; this will not be considered corruption, conflict of interest or private interest.
Both self-disclosure and co-operation with authorities are considered mitigating factors. Reparation of damage to victims is also considered a mitigating factor.
The list of leniency measures is not strictly defined and tends to differ on a case-by-case basis. Some criteria for leniency measures are highlighted, such as the behaviour of the offender post festum and the significance of the protected object in the criminal offence in question.
A special law has been introduced regarding whistle-blowers, but the protection offered by this law is somewhat limited and mostly concentrated on the employment aspect (protection against termination, decrease of salary, etc). However, it does not encompass protection from criminal charges if the whistle-blower was a participant in the execution of the criminal offence.
The whistle-blower is entitled to protection if they disclose information in due process within prescribed deadlines and if the information is considered truthful.
Where the whistle-blower was a participant in a criminal offence, the whistle-blowing would potentially be considered as a mitigating circumstance in a criminal case.
No incentives are offered to whistle-blowers.
Criminal Offences
The burden of proof is placed strictly on the prosecutor, who must defend their indictment before the court.
The court can base its judgment, or a decision corresponding to a judgment, only on facts of which certainty it is convinced.
If there are any doubts concerning the existence of elements of a criminal office ‒ ie, the facts on which the conduct of criminal proceedings depends ‒ then the court will resolve in favour of the defendant.
The court evaluates the evidence according to its free will.
Which facts will be taken as proven is decided by conscientious and careful evaluation of each piece of evidence separately and all pieces of evidence together.
There is no legally established presumption of guilt mechanism.
Commercial Offences
The rules for criminal offences also apply to commercial offences.
Misdemeanour Proceedings
The burden of proving the features of the misdemeanour and misdemeanour liability is on the applicant for the initiation of misdemeanour proceedings.
The standard of proof is identical to criminal offences.
The assessment of penalties and penal policy is primarily created by the legislature to determine the type and range of punishment. The legislature restricts the judge’s discretion in sentencing by:
When the judge assesses the punishment, they do so within the limits prescribed by the law. They must consider the purpose of the punishment (ie, special or general prevention), but also all the circumstances (both mitigating and aggravating) of the specific case that may influence the severity of the punishment. The punishment can only be reduced or increased in exceptional cases that meet conditions expressly prescribed by law.
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office@sunjkalawoffice.com www.sunjkalawoffice.comRecent Developments in Combatting White-Collar Crime
In the past year, there was one significant development in terms of new legislation adopted in the field of white-collar crime: the new Law on Public Prosecutor Offices and the Law on High Prosecutor Council with Constitutional laws were enacted as part of a package of judicial laws that also included the Law on the Organisation of Courts, the Law on Judges and the Law on High Judiciary Council.
In terms of white-collar crime, the most significant development is the Law on Public Prosecutor Offices and the changes and solutions it introduced, including the following.
The practical implementation of this law and how much it will contribute to the effectiveness and quality of investigations and the conduct of criminal proceedings in general are yet to be seen.
The government of the Republic of Serbia published a Proposal of the National Strategy for the fight against corruption for the period 2023–2028 with an Action Plan for the same period. It identifies comprehensive key areas that have been recognised as being sensitive to corruption, including privatisation, construction and spatial planning, public procurement, the customs system, the tax system, the financing of political activities, local self-government, public sector management, public and state enterprises, the police, health and education. At the time of writing, public debate is ongoing.
These draft documents represent an attempt to incorporate recommendations provided by the Group of States against Corruption (GRECO) to combat corruption. The extent of their practical effect is difficult to say at this moment, especially since these are only drafts and not final documents.
In parallel, the state authorities made noted significant efforts to implement the existing legislative framework and increase international co-operation in combatting organised crime with a view to harmonising with European security systems.
As a country of the Western Balkans, Serbia is increasingly important as a beneficiary of EU funds as a candidate member state, so it is of utmost importance that Serbia co-operates with EU and regional actors in the protection of financial resources from fraud, corruption and other illegal activities, and in the connection of EU administrative investigations with national criminal investigations. In this sense, there have been increased efforts in co-operation and training in co-operation with the European Anti-Fraud Office (OLAF).
Serbia entered the Western Balkans Criminal Justice project dedicated to enhancing cross-border judicial co-operation in the Western Balkans, implemented by the European Union Agency for Criminal Justice Cooperation (Eurojust) and funded by the European Union Instrument of Pre-accession Assistance (IPA III). This project was meant to enhance the capacities of Western Balkans states (including Serbia as an EU candidate member state) to combat serious crimes, including white-collar crimes.
In addition to this, there has been noted increased co-operation with Eurojust and Europol in the past year. One of the most high-profile cases involved the multinational co-operation of law enforcement agencies (from Germany, Serbia, Bulgaria and Cyprus), co-ordinated by Eurojust and Europol, in a takedown of an organised criminal group when 26 persons were arrested for suspicion of fraud in connection with cryptocurrencies, with damage worth tens of millions of US dollars suspected.
Recent trends in white-collar crime – the rise of cyber fraud
This specific case represents a recent trend in white-collar crime in Serbia: hi-tech crimes such as crypto and cyber fraud.
Online platforms were utilised to attract victims to invest in cryptocurrencies with the mediation of three companies from Belgrade; the target victims were foreign citizens mainly from Germany, Canada, Switzerland and Australia (but not exclusively). Suspects falsely portrayed that they deal with cryptocurrencies on fake online platforms (although there was no real trade in fact), for which they used modern technologies like the “VoiceSpin” program.
This trend is certain to continue with the expansion of modern technologies like generative artificial intelligence models, for example, which fraudsters utilise to their benefit in different ways – one of them being deepfakes, which is expected to rise in the year ahead.
Deepfakes
Fraud
Deepfake technology is used for the impersonation of a real existing person with the goal of authorising and authenticating activities, such as impersonating a company CEO or CFO to authorise financial transactions for the benefit of fraudsters. It has been suggested that this will be the most frequent type of fraud in the future, due to its time efficiency.
Fraudsters even use deepfakes to circumvent biometric security measures for online payments, such as facial recognition.
Stock price manipulation
Deepfake news and headlines are already very well known, and there is a clear and present danger that they will be further and more frequently used in market manipulation. For example, a deepfake video of a purported explosion near the Pentagon recently went viral after it was retweeted by outlets such as Russia Today, causing some destabilisation in the US stock markets.
The high demand for deepfake videos significantly outweighs the supply, which is highly worrying. Their prices range between USD300 and USD20,000 per minute of video, depending on the quality.
Political election manipulation
These deepfake technologies can be used to manipulate political elections, by influencing voters. A major media outlet in the Republic of Serbia recently released deepfake video of one of the local politicians, with significant effects. It was quickly withdrawn, but it goes to show that it is very easy for deepfakes to be used as an instrument to influence the outcome of elections.
Social media cryptocurrency scams
“We are celebrating and giving away N bitcoins to our fans! Just transfer 0.01 BTC to the wallet below and we’ll return 0.1 BTC!” This is an example of a classic cryptocurrency scam.
Once the unsuspecting individual has transferred cryptocurrency to the specified wallet, the fraudsters have completed their goal and got their money. Due to the certain degree of anonymity linked to cryptocurrency, it is more difficult to trace these fraudsters and recover the money.
Reputation and brand schemes
Deepfakes could be used to harm the reputation of a company or an individual. For example, they could be used to create false information about a product or service, or to create an unwanted and socially unacceptable behaviour of the targeted individual or senior executive of the company, which can range from racial and sexually abusive behaviour to something more personally disturbing. This then affects the financial and business aspect of the company/individual, with lost business opportunities, decrease in sales, etc.
Amplification
Once the “original” deepfake material is out there, fraudsters need to further the effect of the initial deepfake by giving it credibility via various further comments to the initial post, using new deepfakes (instead of bot comments, for example).
This tactic is used to further the effect of an attack on a company's brand or reputation, or to expand a social media cryptocurrency scheme, or any other scheme for that matter.
Social platforms and phishing
Other forms of cyber fraud that are expected to increase in the coming months include the abuse of social platforms.
False social platform violations have been noted as a method of attack – the target receives information on a violation of the rules of the platform and that their account/page has been suspended/deleted and that it is necessary to file an appeal, which requires the target to click on the link. However, once the target has clicked on the link, they are directed to a phishing page where user information and credentials are harvested for illegal purposes on the dark web. Generally, fraudsters use artificial intelligence language models to mimic the language that is usually expected from social platforms and the ever-increasing personalisation of e-mails, which enables them to avoid the usual obvious telltale signs of fraud.
This new level of fraud sophistication and personalisation is used to improve the results of the classic business email compromise (BEC) invoice fraud – fraudsters use generative AI models to falsely present themselves as vendors requesting payment, employees processing invoices for payment, or even(real-life existing) lawyers sending their invoices for payment for services rendered. In these cases, AI collects the accessible information on existing vendors, lawyers, their engagement by the companies and activities that have been made public, and use it against the target of the attack by mimicking credible communication.
This method has increased the sophistication level of online attacks as it becomes more and more demanding to identify and differentiate scams from legitimate online communication.
Other white-collar crime trends
Other recent trends in white-collar crime show that money laundering cases are on the rise in connection with unlawful VAT refunds from the Tax Authority, which will require steps to counter these activities.
The modus operandi in these criminal activities is that the VAT returns are filed with untrue content based on false invoices on the purchase of goods. In this way, criminals use the right to deduct previously paid VAT, thus effectively avoiding VAT payment and damaging the budget of the Republic.
A specific sort of VAT fraud has been noted of late, where the suspects establish a large number of companies and register them in the Business Registers Agency with Chinese citizens as founders and directors, in order to conceal their effective management and control over them. All companies formed in this manner share the same accounting agency, within which they organise false mutual invoicing, so that no company under their control is obliged to pay VAT. In every tax period, several business entities submit tax returns with an illegal amount of VAT for refund, thus avoiding VAT payment.
In the second phase of these frauds, fraudsters use the illegally acquired gains to buy real estate and other assets in order to launder the proceeds of criminal activities.
As a consequence and as a response, Prosecutor Offices have introduced the practice of filing charges for tax fraud and money laundering as separate criminal offences in such cases.
Due to a suspicion of the involvement of tax inspectors (and even higher ranking officials from the Tax Authority) in this specific fraud case, several tax inspectors and (for now) one branch director of the Tax Authority were recently arrested. A broader criminal organisation is suspected, but the case and investigation are ongoing at the time of writing. What is known for now is that there is a founded suspicion that the apprehended tax officials have been knowingly and intentionally verifying tax returns with untrue information filed by the fraudsters, without any (field or office) control whatsoever.
Conclusion
Taking into account that the future trends in white-collar crime include an increase in various hi-tech/ cyber frauds, it is obvious that further strengthening of international co-operation and integration into European security systems will be imperative for Serbia as a candidate for EU membership.
Increasing the capacity of law enforcement agencies is another top priority, in order to provide a robust response to the evolving and time-sensitive nature of the cyber frauds. A systematic approach to the regulation framework regarding the abuse of new technologies in criminal activities is necessary, and an immediate reaction is required. However, there have not yet been any significant efforts in that direction.
Amendments to the Criminal Code are also required, to recognise the evolving landscape of hi-tech crimes. For example, since the Criminal Code (“Official Gazette of RS”, No 85/2005, 88/2005 – corrected, 107/2005 – corrected, 72/2009, 111/2009, 121/2012, 104/2013, 108/2014 and 94/2016) does not recognise identity theft as a criminal offence, the provisions related to the falsification of documents and fraud are applied in these situations, which is highly problematic.
It is important to point out that it is still necessary to harmonise the legal regulations that regulate the work of the public prosecutor's office and the police, especially in the segment that regulates responsibility for work. The Code of Criminal Procedure prescribes the leading role of the prosecutor in the pre-investigation procedure, and it is necessary for this provision to take effect in reality so as to enable more efficient and effective proceedings. The current situation is that the prosecutor manages the work of the police, but the police are not accountable to the prosecutor office for the quality and timely execution of their work.
The new Law on Public Prosecutor Offices may be a step in the right direction, but without the prosecutors having effective control over the work of the police and their actions, it is only a step in the right direction, rather than the solution which is very much needed in practice.
In addition, the importance of asset recovery is expected to rise in the future, considering that it will be harder than ever to prevent fraud with the day-to-day evolution of modern technologies and cyberspace, combined with a lack of regulation thereof (such as AI regulation, which is still in the initial phase and is heavily lagging behind the development of AI and its application in daily operations).
Sremska 4
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+381 214 721 788
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office@sunjkalawoffice.com www.sunjkalawoffice.com