The National Assembly of Republic of Srpska adopted a Law that regulates the deadlines for settlement of financial obligations and penalties applicable in case of failure to comply. The law – published in the Official Gazette no. 31/18 – is effective as of 24th April 2018.
The Law applies to legal entities on the territory of Bosnia and Herzegovina, with the exception of financial institutions, economic entities under insolvency proceedings or economic entities under garnishment or foreclosure.
The main novelties introduced by the Law concerning commercial transactions are as follows:
- The payment period must not be longer than 60 days (unless the debtor provides adequate means of securing – a bank guarantee containing the terms “irrevocable”, “unconditional”, “debit-free at first call without objection” as well as bills of exchange issued by the bank. )
- In cases when a contract does not specify a payment period, a default payment period of 30 days will apply.
The deadlines for fulfillment of a financial obligation commence from:
- The day when the debtor received the invoice or other official document;
- The day when the creditor fulfilled his obligation – in cases when it’s not possible to determine the day of receiving an invoice;
- The expiry date for the inspection of the subject of the purchase – if the contract or the law prescribes that deadline.
It is important to note that the creditor is entitled to default interest in case of delays in settling the obligation.
A fine ranging between KM 5,000 and KM 15,000 shall be imposed on the business entity – debtor – which fails to meet the financial obligation towards suppliers within the stated deadlines.
A fine between KM 1,000and KM 3,000 shall be imposed on the responsible physical person in the debtor entity.
The provisions of the Law do not apply to agreements concluded before the Law came into force.
Eurofast advises clients active in the market in Bosnia to carefully review their current settlement and collection practices as well as future business transaction plans. Our team is ready to assist with any advisory required to ensure compliance with the new law.
Irena Jokic (email@example.com)
Eurofast Global d.o.o. Banja Luka
Gunduliceva 4, 78000 Banja Luka