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Nenad Stanković, NST Law

Great to Have Many Companies Exploring In Serbia

The Mining Law has created a framework for market business and facilitated direct investment in this sector

The problem for companies is the disharmony of regulations. Sometimes it seems that simple legal solutions are extremely difficult to put into practice, says lawyer Nenad Stankovic to CorD.

Since you are involved in investment law, project financing, mining and commercial law, what is your experience with mining companies?

– I would say that the Mining Law has created a framework for market business operations and enabled direct investment into this sector.

In addition to the successfully completed PPRP of RTB Bor and entering into a JV with a Chinese partner, other companies in this sector are also very active and their experiences are better than good. It is extremely good that there is a large number of companies doing research quite successfully. Some companies have reached the foreign exchange markets and found so-called “large partners”, all thanks to results from Serbia, which was a real challenge in this area. International commercial associations such as CANSEE and professional chambers such as GRAS have taken a very active role in this, which is very constructive.

What are the greatest difficulties in practice?

– Local legislation is constantly developing and there is a lot more space for growth.

In my opinion, the greatest problem is the mutual (dis)harmony of regulations, while the application of regulations seems to be an even bigger issue. It sometimes seems as if simple legal solutions are extremely difficult to implement. For example, there is the question of solving proprietary relations, the manner of pledging future things, and the possibility of retention and extension of certain rights. This includes not only the issue of issuing licenses but also issues regarding property, financing and obtaining exploitation licenses. Finally, the financial aspect of mining activity is related to the matter of environmental protection. This is a sensitive topic, and we face the need to invest funds into improvement of business processes enabling mitigation of any damaging impact on the environment.

Some companies have reached the foreign exchange market and found large partners, thanks to results in Serbia

What legal advice are you asked for most and how difficult is it to advise multinationals?

– This is a difficult question to answer since it all depends on the client’s project phase and the project size.

It begins with basic questions about company establishment and getting the proper permits, and in the later phase, we respond to questions regarding preservation of certain rights, financing, drafting agreements with strategic partners as well as financing agreements. As far as financing goes, it seems to me that we lack established practices. Therefore, the knowledge of international institutions like EBRD in this area is important. In short, the questions vary from requests for interpretation of regulations to inquiries about the protection of investor’s rights, optimization of tax costs, obtaining permits and environmental protection. Advising can be challenging when dealing with companies that must obey certain compliance rules that deviate from Serbian regulations. Compliance related to the UK Anti-Bribery act and FCPA is a particular aspect of counselling.

What are the most complex business transactions you have undertaken as part of the NST LAW legal team in the mining industry?

– The most challenging were those transactions involving the registration of companies in foreign stock exchanges, joint venture contracts with so-called “large partners” and certain M&A projects. In addition, project financing, which includes financing research companies, is one of the most current issues, especially when it comes to defining collateral.

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