New Trade Practices Act for Certain Types of Products in Serbia: Upcoming Changes and Practical Implications

Executive Summary

The Republic of Serbia is preparing to introduce, for the first time, a legal framework to prevent unfair trading practices in supply chains.

The Draft Trade Practices Act for Certain Types of Products (the “Draft Act” and/or the “Act”), approved by the Government of Serbia and now pending before the Serbian National Assembly, would establish certain new rules in relationships between buyers and suppliers.  The Act is largely based on EU Directive 2019/633 on unfair trading practices in agricultural and food supply chains, though it goes beyond the EU’s minimum standard in several respects.

Once the Trading Practices Act enters into force, businesses will have four months to comply.  The key points for companies preparing for these changes are set out below.

• The Act applies to agricultural and food products, as well as certain essential non-food goods of particular importance for market supply.  It applies whenever the buyer and the supplier trade in Serbia, regardless of the contract’s governing law.
• Supply contracts would have to be in writing, and non-compliance would result in a fine of RSD 300,000.
• All key financial terms would have to be consolidated in a single, up-to-date financial overview throughout the life of the contract.
• The Act includes a “Black List” of practices prohibited outright, including agreement of payment terms exceeding 30 days for perishable products and 60 days for other agricultural and food products, late cancellation of perishable orders, unilateral contract changes, shifting loss risk on the buyer’s premises, and fees linked to retail buyer’s network expansion or restructuring.
• The Act also includes a “Grey List” of practices prohibited unless clearly agreed in writing in advance, including returns of unsold expired products, various service and personnel charges, termination without 30 days’ notice, set-off requirements, turnover-related fees, and additional bonuses imposed during performance.
• The Commission for Protection of Competition would be the competent authority for the enforcement of the Act.  It would be able to investigate ex officio, carry out announced or unannounced inspections, impose protection measures equal to 0.1%- 0.2% of the infringing party’s annual turnover in Serbia, and reward whistleblowers with 5% of the sanction if they provide decisive evidence.

For a more detailed discussion of each of these points, please see the full article below.

Background

Only a few days after the Regulation on the Limitation of Trade Margins[1] ceased to apply on March 1, 2026, major retailers reinstated “off-invoice rebates” to the levels that had applied before September 1, 2025, and in certain cases even increased them.  Following this development, the Ministry of Internal and Foreign Trade of the Republic of Serbia (the “Ministry”) announced that three new laws regulating market functioning are to be adopted by the end of March 2026.  According to the Ministry, these laws are to replace the Regulation on the Limitation of Trade Margins.  One of these laws is the Trade Practices Act for Certain Types of Products, the draft of which was adopted by the Government of the Republic of Serbia on March 5 (the “Draft Act” and/or the “Act”).  This will be the first Trade Practices Act adopted in Serbia and represents an important step toward regulating the functioning of the domestic market and creating conditions for more transparent price formation.

The Draft Act is largely modeled on European Union law, particularly Directive (EU) 2019/633 (the “UTP Directive”).  The UTP Directive introduces a minimum level of harmonization at the EU level while allowing stricter national laws.  This explains why the Serbian Act goes beyond the European regulatory minimum in certain respects.  The adoption of a legal framework to prevent and combat unfair trading practices in Serbia may also be viewed in the broader context of Serbia’s EU accession process, particularly in relation to Chapter 11 on agriculture and rural development.  In this regard, the adoption of the Act may represent a form of voluntary regulatory alignment with EU legal frameworks even before the formal opening of negotiations in this area.

Key Features of the Act and Comparison With Certain Provisions of the UTP Directive

Scope of Application

Unlike the UTP Directive, which applies exclusively to relationships between buyers and suppliers within the agricultural and food supply chain, the Draft Act provides for a broader scope of application.  It covers not only agricultural and food products, but also “products of particular importance for market supply”, which include: (i) products of particular importance for consumer supply (such as household cleaning products, paper and kitchen goods, personal hygiene products and cosmetics and diapers), and (ii) products of particular importance for agricultural production (such as plant nutrition products, plant protection products and soil improvers).

Another significant feature of the Draft Act is that it would apply on a mandatory basis, irrespective of the governing law chosen by the contractual parties.  In other words, if the buyer and supplier are trading in Serbia, the Act’s provisions shall apply, even if the contract says otherwise.

Mandatory Written Form of Contracts

The Draft Act introduces a requirement that contracts between buyers and suppliers must be concluded in writing (except where a supplier of agricultural products accepts the buyer’s general terms and conditions).  Failure to comply with this requirement constitutes a misdemeanor punishable by a monetary fine of RSD 300,000 for a legal entity and RSD 50,000 for the person responsible within the legal entity.

This is a stricter approach than the UTP Directive, which makes it clear that “there should be no obligation to use written contracts”.  However, the UTP Directive does recognize that written contracts may help prevent unfair trading practices and that suppliers should have the right to request written confirmation of the agreed supply terms.

Prohibition of Vague or Conditional Contractual Clauses

The Draft Act also prohibits the use of vague or conditional contractual provisions that leave one party with the discretion to determine the other party’s final financial obligations at a later time.  In particular, it prohibits provisions that use indeterminate or relative expressions, clauses referring to future decisions or criteria not incorporated into the contract, or make obligations dependent on subjective or undefined criteria.

Unfair Trading Practices

The Draft Act sets out what counts as unfair trading practices.  The key elements are: (i) the existence of a significant imbalance in bargaining power between the supplier and the buyer; and (ii) unilateral conduct by the buyer that departs from good commercial practice and the principles of good faith and fair dealing, unjustifiably transfers economic risk to the other party, or creates a significant imbalance in the contractual rights and obligations of the parties.

• In relations between suppliers and buyers, the Draft Act introduces a rebuttable presumption of significant buyer bargaining power.  The presumption applies where the prescribed annual thresholds are met, which correspond to those in the UTP Directive and are as follows:
• the supplier’s annual turnover does not exceed EUR 2,000,000, while the buyer’s turnover exceeds EUR 2,000,000;
• the supplier’s turnover is between EUR 2,000,000 and EUR 10,000,000, while the buyer’s turnover exceeds EUR 10,000,000;
• the supplier’s turnover is between EUR 10,000,000 and EUR 50,000,000, while the buyer’s turnover exceeds EUR 50,000,000;
• the supplier’s turnover is between EUR 50,000,000 and EUR 150,000,000, while the buyer’s turnover exceeds EUR 150,000,000; and
• The supplier’s turnover is between EUR 150,000,000 and EUR 350,000,000, while the buyer’s turnover exceeds EUR 350,000,000.

The Draft Act further lists unfair trading practices that are: (i) always prohibited (the “Black List”), and (ii) conditionally permitted only if clearly agreed in advance (the “Grey List”):

(i) The Black List includes:

• payment terms exceeding 30 days for perishable agricultural and food products;
• payment terms exceeding 60 days for other agricultural and food products;
• cancellation of orders for perishable agricultural and food products within less than 30 days before the agreed delivery date, or within such a short period that it would be unreasonable to expect the supplier to find an alternative way to place those products on the market or otherwise use them;
• unilateral modification of contract terms by the buyer;
• requiring the supplier to make payments that are not related to the sale of the supplier’s products;
• requiring the supplier to bear the costs of the deterioration or loss of agricultural and food products occurring on the buyer’s premises, unless such deterioration or loss is attributable to the supplier’s fault;
• refusal by the buyer to confirm agreed contract terms in writing;
• charging suppliers for handling consumer complaints where the supplier is not responsible;
• charging fees for the expansion or restructuring of the buyer’s retail network;
• charging suppliers for additional quality controls, confirming that products meet agreed quality standards.
• requiring the supplier to provide a security instrument for the received agricultural inputs, while releasing the buyer from the obligation to provide security for agricultural and food products received but not yet paid for;
• conditioning the supplier on making payments in the form of multilateral set-off involving the transfer of the buyer’s debt to a third party, or requiring the supplier to conclude a contract with or make a payment to a third party to circumvent the application of the Act;
• the unlawful acquisition, use, or disclosure of the supplier’s trade secrets.

The prohibition on late payment for perishable agricultural and food products (see above) is one of the key rules set out in the UTP Directive.

In the EU, payment terms in commercial transactions more generally – that is, beyond the agricultural sector – are governed by Directive 2011/7/EU on combating late payment (“Late Payment Directive”).  The European Commission’s 2025 Progress Report on Serbia notes that the legal framework for late payments is largely aligned with EU provisions.  However, the 30-day payment term reflected in the Draft Act and in the UTP Directive is significant, as it imposes a stricter standard than the general regime under the Late Payment Directive.  Whether this tighter framework will improve payment discipline and suppliers’ liquidity in practice, or instead create additional strain for market participants, remains to be seen.

(ii) The Grey List covers practices that are not automatically prohibited if they are clearly and unambiguously agreed in advance in writing, either in a separate agreement or in an annex to the contract.  If there is no such agreement, unfair trading practices are deemed to exist where the buyer:

• returns unsold agricultural and food products to the supplier without paying for them;
• charges a fee for storage/standard display/listing in the product assortment or placing products on the market, except in cases expressly provided for by the Act;
• passes on to the supplier the costs of sales promotions independently decided and implemented by the buyer, as well as requires compensation for advertising and promotional activities carried out by the buyer;
• passes on to the supplier the monetary amount of a fine imposed on the buyer by a competent authority;
• requires the supplier to compensate the buyer for the buyer’s personnel costs;
• without a justified reason and without prior written notice of at least 30 days, significantly reduces the agreed quantity;
• unilaterally terminates the contractual relationship with the supplier without observing a minimum notice period of 30 days and without providing written justification;
• conditions the supplier to make payments in a non-monetary form (set-off/compensation);
• requests, agrees upon, or charges the supplier a fee for reduced turnover;
• requires or conditions the supplier to grant subsequent bonuses, rewards, or other payments that were not previously agreed upon; or
• refuses to accept a perishable agricultural product from the supplier without providing adequate evidence thereof.

Mandatory financial overview of the contract – a new transparency obligation

One of the novelties introduced by the Draft Act is the obligation to prepare a specific overview of the financial elements of the contract between the buyer and the supplier.  Financial elements of the contract include all monetary aspects of the contractual relationship, in particular, the price of the products, benefits, fees, monetary penalties, and other agreed financial obligations arising from the contract.  The Act provides that these elements must be consolidated in a financial overview of the contract (as a single document), which represents a list of all financial obligations arising from the contractual relationship.  The overview may be incorporated into the contract, attached as an annex, or prepared as a separate document.  The importance of this requirement lies in the fact that any amendment or modification of the contract affecting any financial element must be properly reflected in this overview, which must remain complete and up-to-date at all times.  Failure to prepare the financial overview of the contract constitutes a misdemeanor punishable by a fine ranging from RSD 50,000 to RSD 2,000,000 for a legal entity, and from RSD 50,000 to RSD 150,000 for the responsible person.

This solution has two important consequences.  First, suppliers gain clearer insight into all costs arising from their business relationship with the buyer.  Second, it facilitates enforcement monitoring, as it becomes easier to determine whether certain fees constitute an unfair trading practice.  In this respect, the Draft Act goes a step further than the UTP Directive by introducing an additional transparency mechanism.

Prohibition of retaliation

The Draft Act introduces the prohibition of commercial retaliation, classifying it as a “particularly serious unfair trading practice.” Any form of commercial retaliation or threat of retaliation by the buyer against the supplier is prohibited, particularly if such refers to removal of the supplier’s products from the assortment, reduction of ordered quantities or order frequency, suspension or limitation of services such as marketing services, and other forms of retaliation that may directly affect the supplier’s business operations.

Competent authority

The Commission for Protection of Competition of the Republic of Serbia (the “Commission”) is the authority responsible for enforcement.  Its key powers include, among others: (i) deciding on administrative matters, namely determining the rights and obligations of participants in the product supply chain and imposing administrative measures, (ii) adopting by-laws necessary for the implementation of the Act, (iii) carrying out international cooperation in the field of preventing unfair trading practices, (iv) preparing annual reports on unfair trading practices, and (v) maintaining a register of buyers for whom it has been determined that they imposed unfair trading practices.

In the EU, the UTP Directive leaves enforcement to the Member States, with some countries delegating UTP powers to their national competition authorities.

Initiation and specific features of the procedure

The Commission examines the existence of unfair trading practices ex officio.  Although an initiative to open proceedings may be submitted by a broad range of persons (including any natural or legal person, market participants, and any other persons possessing relevant information about a potential unfair trading practice), the submission of such an initiative does not in itself grant the submitter the procedural status of a party to the proceedings.  In other words, the Commission independently decides whether to initiate proceedings based on the information, knowledge, or initiatives it receives from various market actors.

The Draft Act also introduces a relatively new mechanism under which a natural person (a cooperating individual in the proceedings, i.e., the whistleblower) who provides decisive evidence unknown to the Commission of an unfair trading practice is entitled to a monetary reward amounting to 5% of the protection measure imposed (see below).  The whistleblower, who by definition was or still is involved in the unfair trading practice, enjoys protection of their identity during the proceedings.

Furthermore, the Act provides for both regular and unannounced inspections (dawn raids) to secure evidence.  In the course of such inspections, the authorized officer may inspect business premises and vehicles, examine documentation, copy or scan business records, and even temporarily seize documentation or temporarily close business premises for the time necessary to conduct the inspection.

Finally, the Commission is empowered to impose certain measures against the infringing party, including:

• Interim measures – ordering the temporary cessation of the conduct in question;
• Compliance measures – where an unfair trading practice is established, the Commission may order the buyer to align its business practices with the Act;
• Protection measure against unfair trading practices (monetary amount) – the Draft Act also provides for a financial sanction in the form of a so-called protection measure.  The basic monetary amount (which may subsequently be adjusted) is set at 0.1% (for practices on the grey list) / 0.2% (for practices on the blocklist, as well as in cases of commercial retaliation) of the total annual revenue generated by the party to the proceedings in the territory of the Republic of Serbia in the preceding year.;
• Procedural and periodic penalty payments – procedural fines imposed in cases of obstruction of the proceedings, to ensure the efficient conduct of the proceedings.

Concluding Remarks and Practical Implications

By introducing a regulatory framework to prevent unfair trading practices, Serbia will, for the first time, systematically regulate relationships between buyers and suppliers in the supply chains of agricultural and other products important to market supply.

For large domestic and international retail chains active in Serbia, these changes could significantly affect how they structure contracts with local suppliers.

At the same time, greater regulatory alignment with the EU will strengthen the position of Serbian suppliers and agricultural exporters when placing their products on the European market.

All businesses active in the supply chain of products covered by the Act will have to ensure compliance within four months of the Act entering into force.  Given the short deadline, companies should already begin conducting an internal review of their existing contractual and commercial arrangements, including revising standard contract templates, general terms and conditions, and internal policies.

[1] The Regulation on the Limitation of Trade Margins entered into force on September 1, 2025, and ceased to be valid on March 1, 2026.

Authors: Nađa Gogić, Nina Raluca Bucataru, Živko Simijonović 

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