Robert Schuman Centre for Advanced Studies
The 13th Mediterranean Research Meeting
Workshop 11:
Political Governance and Regulatory Enforcement Activity in Competition
and Consumer Protection Regulation:
Comparing Experiences
THE NEW SERBIAN LAW ON CONSUMER PROTECTION AND
THE POSITION OF THE SERBIAN CONSUMER
Authors:
Mateja Djurovic
Nebojsa Lazarevic
Montecatini Terme, Pistoia
1
21 - 24 March 2012
CONTENTS
I.
Introduction .............................................................................................................................. 3
II. The SAA – Article 78 legal regime..................................................................................... 4
III.
IV.
Development of Consumer Protection in the Serbian Legal System .............. 6
Analysis of the CPL from the Aspect of Article 78 of the SAA......................... 10
IV.1 Policy of Active Consumer Protection..................................................................... 10
IV.2 Harmonisation of Legislation on Consumer Protection................................... 16
IV.3 Effective Legal Protection for Consumers ............................................................. 18
IV.4 Monitoring of Rules and Access to Justice............................................................. 20
V.
IV.5 Exchange of Information.............................................................................................. 22
Conclusion............................................................................................................................... 23
2
I. INTRODUCTION
In October 2010, the Parliament of the Republic of Serbia adopted new
Consumer Protection Law (“the CPL”).1 Its application commenced as of 1
January 2011. As one of the principal strategic goals of Serbia is to become a
member state of the European Union, the adoption of this law has its place in the
harmonisation process of the Serbian legislation with the EU law. The CPL
transposes a large portion of the consumer acquis into the Serbian legal system.
Serbia is currently a (potential) candidate for EU membership, which has a
signed Stabilisation and Association Agreement, which regulates its relations
with the European Union until the entry into force of a future Accession Treaty.
Although the Serbian SAA has not yet been ratified by all EU member states, an
Interim Agreement entered into force in February 2010, regulating mainly
economic relations between the parties, as well as the issues of harmonisation of
Serbian legal system with the EU one. This obligation by the associated country
is contained in the Articles 72 and 78 of the SAA, which require Serbia to align its
rules of consumer protection with those of the EU, but also contain additional
obligations for Serbia.2 The overall “deadline” for approximating Serbian
legislation “in all elements of the Community acquis referred to in [the]
Agreement” is six years from the entry into force of the Interim Agreement.3
The main thesis of this paper is that the Serbian government has not adequately
satisfied the requirements contained in these two Articles, resulting in a position
of consumers in the Serbian market which is not satisfactory when observed
from the aspect of the requirements under the SAA regime. The analysis of the
currently existing system in Serbia is presented according to the key elements of
the Article 78 of the SAA, which sets out in detail the requirements in the field of
consumer protection.
Official Gazette RS No 73/2010
Article 78 of the SAA with Serbia, available at
http://ec.europa.eu/enlargement/pdf/serbia/key_document/saa_en.pdf
3 Article 72 of the SAA, Article 8 of the SAA.
1
2
3
II. THE SAA – ARTICLE 78 LEGAL REGIME
The obligation of legal harmonisation is contained in the Article 72 of the Serbian
SAA. This Article contains the “general” harmonisation regime, which is further
elaborated for the different policy areas in the following seven articles of the
Agreement. At the same time, the Article 72 not only specifies a general
obligation of legal harmonisation with the acquis communautaire, but also
specifies a number of priority areas, on which harmonisation should focus “at an
early stage”.4 Harmonisation of legislation with the EU acquis in the consumer
policy area falls among these priority areas identified in the Article 72. Although
consumer protection is not explicitly mentioned as such in this paragraph, it
does refer to “fundamental elements of the Internal Market acquis”, to which
consumer acquis indisputably belongs.5 The importance of consumer protection
to the internal market is confirmed by dedicating a separate Article 78 to this
field. Prior to elaborating on the elements of the Article 78, which constitute the
basis for the analysis in this Paper, it should also be emphasised that Article 72
already states an additional requirement for Serbia to that of simply
approximating its legislation with the EU law. The Article explicitly requires
proper implementation and enforcement of the adopted harmonised legislation,
which is further elaborated and broken down into several elements of
implementation and enforcement in the Article 78.
The starting point of the Article 78 is that of obliging the parties to cooperate in
order to align the standards of consumer protection in Serbia to those of the
Community. This introductory, general obligation is supporting by reiterating
the significance of consumer protection for the Internal Market of the EU:
Effective consumer protection is necessary in order to ensure the proper
functioning of the market economy, and this protection will depend on
4
5
Article 72(3) of the SAA.
Article 72(3) of the SAA.
4
the development of an administrative infrastructure in order to ensure
market surveillance and law enforcement in this field.6
The main elements of this more general requirement are spelled out in
paragraph 2, points a) to e) of this Article. Thus, Serbia needs to ensure:
a) policy of active consumer protection, in accordance with Community law,
including the increase of information and development of independent
organisations;
b) the harmonisation of legislation of consumer protection in Serbia on that
in force in the Community;
c) effective legal protection for consumers in order to improve the quality of
consumer goods and maintain appropriate safety standards;
d) monitoring of rules by competent authorities and providing access to
justice in case of disputes;
e) exchange information on dangerous products.
It can be summarised that while point b) focuses on the legal harmonisation
aspect, the remaining points specifically address various aspects of
implementation of the harmonised legislation, including the institutional aspects
(a, c, d and e) as well as the enforcement aspect (point c, as well as point d in
particular).
6
Article 78(1) of the SAA.
5
III. DEVELOPMENT OF CONSUMER PROTECTION IN THE SERBIAN LEGAL SYSTEM
The idea of the existence of a separated legal regime for consumers, as particular
subjects in private law, represents a relatively innovative concept in the Serbian
law. The most important source of private law, the Serbian Law on Obligations of
1978 (“the SLO”),7 as the principal source of the law on obligations and general
rules of private law, contains no particular regulation applicable for the relations
between the consumer, on one side, and trader, on the other side. 8
It was only in 2002, with the onset of the economic transition and first activities
aimed at the country’s EU integration, that Serbia passed its first Law on
Consumer Protection.9 This first CPL provided a very basic and fragmented
protection for consumers and was not harmonised with the EU law. In practice, it
produced hardly any results. There is no case law of the courts on the basis of
this law. The inspectorates of the responsible ministries, as administrative
authorities in charge of enforcement, based their actions almost exclusively on
the general laws regulating trade rather than the Law on Consumer Protection of
2002.
The 2002 CPL was repealed in 2005 by the second Serbian Law of Consumer
Protection.10 In comparison to its predecessor, this second piece of legislation
represented a step forward for consumers in Serbia. The level of harmonisation
with the EU law was higher, as the Law incorporated, partially or fully, the
provisions of some of the EU consumer protection directives such as Directive
93/13/EEC on unfair contract terms or Directive 94/47/EC on timesharing.11
This improvement of legal protection was noticeable in practice, too. For the first
time, Serbian consumers started profiting from their rights as defined by the law
Official Gazette of the SFRY No 29/78, 39/85, 57/89 and Official Gazette of FRY No 31/93
for a detailed examination of the develoment of Serbian contract and consumer law, see: M.
Djurovic, Serbian contract law: its development and new Serbian Civil Code, ERCL 2011
9 Official Gazette of FRY No 37/02
10 Official Gazette of RS No 79/2005
11 for a more detailed overview of this Law, see: Consumer Protection Law and Policy in Serbia:
The Current State and Projections for the Future, u: C. Twigg-Flesner et al.: The Yearbook of
Consumer Law, Ashgate, 2007, 465; M. Karanikic Miric, Serbia – legislative techiques, in: Civil
Law Forum for South East Europe, Cavtat 2010, Volume III, pp 436 -440
7
8
6
which aimed at protecting them. The enforcement mechanism primarily relied
on the market inspectors of the Serbian Ministry of Trade which had the
prevailing competence in the area of consumer protection.
However, again as in the case of the previous Law of 2002, there was no case law
before general Serbian civil law courts based on this law.12 The only cases were
the ones brought before the misdemeanour courts.
Moreover, with the
exception of the area of consumer credit where the National Bank of Serbia
established a functional system of mediation,13 an alternative system for the
settlement of consumer disputes was not established.
In spite of the fact that the Law of 2005 showed an increased level of
harmonisation with the EU law in comparison to the Law of 2002, the achieved
level was still not satisfactory. Furthermore, since 2005, the EU consumer law
developed immensely, especially with the adoption of Directive 2005/29/EC on
unfair commercial practices and a new Timeshare Directive 2008/122/EC.
Eventually, the Proposal for a new Directive on Consumer Rights was published
in 2008 which was in a modified form adopted in October 2011 as Directive
2011/83/EU. All of these factors led to the need for the adoption of a new CPL in
Serbia, in order to fulfil the basic requirement of legal harmonisation set out in
the SAA.
Consequently, under strong EU support, in 2008 Serbia initiated the work on a
new CPL with the main objective of harmonisation with the consumer acquis.14
After more than two years of work, the Parliament of the Republic of Serbia
finally passed the new Law on Consumer Protection on 12 October 2010. The
CPL represents for the most part a product of the work of a group of foreign and
domestic legal experts in the area of consumer protection and private law. The
main goal of the experts’ team was to draft a law which would be fully
C. Jessel-Holst and G. Galev, Introduction, in: Civil Law Forum for South East Europe, Cavtat
2010, Volume III, p 412
13 http://www.nbs.rs/internet/cirilica/63/63_2/index.html
14 The entire project was organised and run by a consortium ZAP – Serbia, see: www.zapserbia.com
12
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harmonised with the EU law, but which would also fit best in the particularities
of the Serbian legal system.
It is noticeable that in terms of the form of regulating of consumer law, Serbia
has always opted for the ‘dualistic approach’ whereby consumer law is regulated
separately from general private law. Opposite to the examples of Germany or the
Netherlands whose Civil Codes incorporate consumer law, Serbia followed the
French and Italian model by not incorporating consumer law provisions into the
general private law codification, i.e. the Law on Obligations of 1978. The other
countries of the Balkan region have followed the same approach.
Parallel to the process of the drafting of the CPL, a separate commission of the
Serbian Government was working on the draft of a new Serbian Civil Code. There
was no communication between the Civil Code commission and the working
group that was drafting the CPL. Furthermore, the published materials of the
Commission show that the alternative of including the rules of consumer law
into the future Serbian Civil Code was not even considered. 15
The CPL provides a legal basis for the entire system of consumer protection in
Serbia. Besides the rules of the substantive character, it provides rules regarding
establishment and activities of consumer associations, relevant sanctions for
breach of the law, including fines, defines the alternative systems of resolution of
consumer disputes and awards necessary competence to diverse bodies in
charge of the application and enforcement of the CPL.
Whereas a very comprehensive approach was taken when drafting the CPL, thus
transposing a huge part of the EU consumer acquis into the Serbian legal system
by means of this law, its final draft did not include provisions on consumer credit
and distance marketing of financial services. A detailed account of the extent to
which the task of harmonising the Serbian consumer legislation with the EU
rules was accomplished with the new CPL is given in the next chapter, dedicated
to the analysis of the CPL from the perspective of the requirements under Article
78 of the SAA.
15
http://www.mpravde.gov.rs/images/obrazlozenje(1).pdf
8
At this point it should also be noted that the CPL protects consumers in the case
of services of general economic interest which include supply of electricity,
water, telecommunication sector and other types of services that consumers in
the 21st century necessarily need. In that aspect, particular protection is given to
vulnerable consumers which include primarily consumers who are facing
material financial difficulties. However, the National programme for the
protection of vulnerable consumers, whose legal basis is defined by the CPL and
whose purpose is to develop further these rules, has not been yet adopted.
9
IV. ANALYSIS OF THE CPL FROM THE ASPECT OF ARTICLE 78 OF THE SAA
This chapter of the paper examines the consumer policy in Serbia in its totality –
both the legislative framework and the state of implementation and enforcement
– from the aspect of the requirements set out in Article 78 of the SAA. The
purpose thereby is to examine to which extent the “standards of consumer
protection” are aligned to those of the EU and how far the consumers in Serbia
are from the level of protection existing in the EU member states. Therefore, the
following sections are structured so as to follow points a) to e) of Article 78 and
the requirements thereof.
IV.1 Policy of Active Consumer Protection
Point a) requires from Serbia to pursue a policy of active consumer protection, in
accordance with Community law, including the increase of information and
development of independent organisations. Whereas the aspect of “accordance
with the Community law” in terms of legislative provisions is treated in the next
section, this section focuses on the issues of how “active” the consumer policy is
in Serbia, how the information of consumers is done, as well as how independent
organisations are supported.
The Policy Institutions for Consumer Protection
There seems to be insufficient support for pursuing the consumer policy as
proclaimed by the new CPL. The interest of the responsible Ministry in the
subject matter of consumer protection seems to be considerably lower than it
used to be in the years preceding 2011. There used to be a large number of
activities in the area of consumer protection until 2011, while in 2011 very little
has been done. This problem is, inter alia, a result of the merger of the Ministry
of Trade and Services with the much larger Ministry of Agriculture, Forestry and
Water Management, which caused a shift of attention by the policy makers to the
agriculture part of the ministry’s portfolio. The Commission also stated that the
10
capacity of the Consumer Protection Department in the Ministry remains weak,
despite the fact that additional staff has been employed there. 16
Furthermore, the National Council for Consumer Protection has not been
constituted yet. The Council is to be comprised of the representatives of line
ministries and other public authorities, associations and unions for consumer
protection, business and professional chambers and other actors on the market,
as well as independent experts in the consumer protection field. 17 This Council is
supposed to adopt the future Strategy for consumer protection in Serbia.
Currently, it is still the old Strategy of consumer protection that applies, which
was adopted on the basis of previous CPL of 2005.
Hence, the capacity for policy making and implementation in the area of
consumer protection is currently rather weak and the relevant institutional
framework unfinished.
The lack of education of consumers in Serbia about their rights
The right to information and education represents one of the fundamental rights
of consumers.18 Consumers need to be educated about their rights, how to
behave in their best interest while interacting with the traders on the market
and how to exercise their rights when they are breached. It is primarily the
responsibility of the state and relevant state bodies to secure a functional system
of consumer education.
In Serbia, the right to education of a consumer is recognised by article 2(7) of the
CPL as one of the consumer’s basic rights. However, lack of adequate consumer
education seems to represent one of the biggest obstacles for the effective
application of the CPL. The same was the case with the two previous Serbian
laws of consumer protection. Besides the fact that they did not provide a perfect
Commission Opinion on Serbia’’s application for membership of the European Union –
Analitical Report, p. 121.
17 Article 126 of the CPL.
18 The Preliminary Programme of the European Community for consumer protection and
information policy, OJ C 92, 25.4.1975, p. 2-16; art 169 TFEU; United Nations Guidelines for
Consumer Protection (as expanded in 1999), the Decision of UN General Assembly 54/449.
16
11
legal framework of consumer protection, in any case they granted consumers a
certain level of consumer protection. Nevertheless, one of the main reasons why
consumers did not sufficiently profit from these laws lied in the fact that, in
many cases, the consumers were simply not familiar with the existence of a law
and the rights granted by it.
In the last couple of years, the situation has been somewhat improved. First, the
entire process of the drafting and adoption of the CPL was characterised by a
significant level of transparency, so that consumers could read or hear that a law,
which would provide them with a new system of protection, would be adopted.
Most of major Serbian daily newspapers, as well as TV channels followed the
drafting process and examined the novelties that new Law was going to bring.
In 2010, the Ministry of Trade published a set of seven leaflets on information
and education of the consumer. The goal of these brochures is to educate Serbian
consumers about some of the most common problems faced by the consumers,
such as hidden costs,19 or aggressive selling methods.20 These leaflets were
distributed in all municipalities in Serbia through the daily newspapers.
Additional education activities were performed specifically targeting the youth
in 497 high schools around Serbia.21 Furthermore, the newspaper “Politika” – the
oldest daily newspaper in Serbia as well as one of the most popular and read
ones – has been publishing for the last two years a weekly free extra exclusively
dealing with consumer rights, under the name “Potrosac” (Consumer).22 The
Ministry of Trade also prepared and distributed several brochures and leaflets:
“Consumer Protection and the SAA”, “Product Safety and the SAA”, “Internet
Purchase Guide”, “Unfair Commercial Practice”, “Guarantees”, etc.
The EU is also helping with the development of the education of the consumers
in Serbia. Consequently, all high-school students in Serbia have been receiving
http://www.mpt.gov.rs/postavljen/163/skriveni_troskovi.pdf
http://www.mpt.gov.rs/postavljen/163/iznudjena_kupovina.pdf
21 Responses to the Questionnaire of the European Commission, Chapter 28,, available at:
<www.seio.gov.rs> (10 February 2012)
22 http://www.politika.rs/rubrike/potrosac/index.1.sr.html
19
20
12
already for the third time a copy of Europa Diary,23 which extensively deals with
consumer protection.
Nevertheless, despite these numerous but fragmented activities in the area of
consumer education, what is still missing is collective action primarily organised
by relevant state authorities aimed at ensuring a long term strategy of consumer
education and information. Particular attention should be paid to the most
vulnerable consumers, such as the elderly. Such an approach seems still to be
missing.
The other type of education that is also necessary is the education of relevant
professional subjects such as judges of the court and practicing lawyers, so as to
make them fully aware of what is understood under the concept of consumer
protection that has been transposed from the EU law into Serbian law.
Consumer organisations in Serbia
In the EU, consumer organisations represent one of the principal pillars of
consumer protection. The consumer organisations are the necessary link
between consumers, on the one side, and the competent authorities for
enforcement on the other side. Collective actions which are taken primarily
through consumer organisations represent one of the most efficient means for
sanctioning of the behaviour of traders who breach the rules of consumer
protection.
The situation with the consumer organisations in Serbia is very complex. Prior to
the adoption of the CPL, more than sixty consumer organisations existed in
Serbia, most of which had only a couple of members and lacked logistic and
institutional capacities. This was a consequence of the inadequate regulatory
framework on consumer organisations as provided by the Law on Consumer
Protection of 2005. The procedure for establishing a consumer organisation was
quite simple, as no necessary conditions were provided, other than the general
provisions on the establishing of non-governmental organisations (associations).
23
http://ec.europa.eu/consumers/europadiary/uk/index_en.htm
13
Consumers did not know where to address their complaints, while the
competition among the numerous consumer organisations was intense and
rather negative.
One of the main goals of the CPL was to resolve the mentioned problems
pertaining to consumer organisations, which is why it provided a detailed set of
rules on consumer organisations in its Chapter XI. The competences of the
organisations are defined, so that the consumer organisations are authorised to:
1) inform, educate and help consumers with solving diverse consumer related
problems;
2) conduct surveys and comparative analyses of the goods and services
offered to consumers;
3) cooperate with relevant authorities in Serbia and abroad.
The CPL now sets up the criteria for establishment of consumer organisations.
These conditions include, inter alia, the requirement that a consumer
organisation has to gather at least 50 members (as opposed to only 3, which is
the general rule for “ordinary” NGOs) and that it needs to possess the necessary
human resources with the adequate professional knowledge and skills in the
area of consumer protection. This means that at least one lawyer, who has
previously passed the bar exam, has to be permanently employed by the
organisation, as well as one other employee with the experience in the area of
consumer protection.
Only an organisation which possesses these capacities can be registered in the
public register of consumer organisations kept by the Ministry which is in charge
of consumer protection. The registration is important primarily for financial
reasons since only those organisations which are duly registered can be financed
by the competent state, regional and local authorities.
These rules were further developed by the Rulebook adopted by the Minister in
charge of consumer protection in 2011. In accordance with that, the already
existing consumer organisations had to re-register and prove that they fulfil the
required conditions. The Register is public and available on the official site of the
14
Ministry which is in charge of consumer protection.24 According to the register,
ten consumer associations have been registered so far [February 2012].
However, the situation with the consumer organisation remains unsatisfactory.
What seems to be particularly missing is the transparency of the work of
consumer organisations, especially regarding financing. It has not been made
clear how the organisation are financed and what is the criteria on the basis of
which they should receive financial aid from the state. Consequently, in 2011,
only some of the organisations were awarded certain sums of money without
any clear explanations.25
The European Commission emphasises that the organisations lack adequate
resources and that they are still weak, which continues to hamper their
effectiveness.26 The financial resources indeed are insufficient, as the annually
allocated amounts by the Government have ranged from €35,000 to 75,000.
As it has been pointed out, the rules on consumer organisations provide some
conditions for members of the consumer organisation, but this still does not
sufficiently clarify what is required for an organisation in order for it to become
representative. Furthermore, since the CPL has not envisaged the establishment
of local and regional counselling services for consumers, the Ministry in charge
of consumer protection transferred this duty of consumer counselling services
on some of the consumer organisations and provided financial assistance for
that. Additional research is needed to assess the effectiveness of the work of the
organisations which have been entrusted with this role.
One of the important roles of consumer organisations according to the CPL is to
bring collective actions on behalf of consumers to the courts (although this role
is not granted exclusively to them). Nevertheless, so far there have been no
collective actions brought by a consumer organisation, which is also illustrative
Currently the Ministry of Agriculture, Trade, Forestry and Water Management.
Based on the interviews with the representatives of several consumer organizations.
26 Commission Opinion on Serbia’’s application for membership of the European Union –
Analitical Report, p. 122.
24
25
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of their capacities to contribute to a policy of active consumer protection, as
required by the Article 78 of the SAA.
IV.2 Harmonisation of Legislation on Consumer Protection
As already mentioned, one of the main reasons for drafting a new Law on
Consumer Protection was the need to transpose the EU consumer acquis into the
Serbian legal system. The CPL shows a high level of harmonisation with the EU
law. In its 135 articles, the CPL has duly incorporated fifteen European directives
in the area of consumer protection. Besides these directives, some of the
provisions of the Proposal of the Directive on Consumer Rights of 8 October
2008 were used as models for some of the provisions of the CPL, for instance the
rules dealing with the information requirements as defined by articles 16 and 28
of the CPL. This Proposal of the Directive was subsequently (in October 2011),
following some modifications, adopted as the new Directive 2011/83/EU on
consumer rights. From that aspect, it can even be said that the CPL is one of the
first laws in Europe to be, at least partially, in accordance with the Directive
2011/83/EU.
The following EU directives are transposed into Serbian law through the
provisions of the CPL:
1) Directive 93/13/EEC on unfair contract terms
2) Directive 99/44/EC on consumer sales and guarantees
3) Directive 85/577/EEC on off-premises contracts
4) Directive 97/7/EC on distance contracts
5) Directive 2005/29/EC on unfair commercial practices
6) Directive 98/6/EC on price indication
7) Directive 2009/136/EC, Directive 2009/72/EC and Directive 2009/73/EC on
services of general economic interest
8) Directive 2008/122/EC on timeshare
9) Directive 90/314/EC on package travel
10) Directive 2009/22/EC on injunctions
11) Directive 2000/31/EC on e-commerce
12) Directive 85/374/EEC on product liability
The final version of the proposal of the CPL included also the rules on consumer
credit as provided by Directive 2008/48/EC on consumer credit and Directive on
16
2002/65/EC on distance marketing of financial services. The purpose of such an
approach was to have a unified piece of legislation that will encompass all of the
rules relevant for consumer protection and thus to include also rules on financial
services. However, due to a disagreement between the line ministry and the
Central Bank regarding the constitutional competence over this area, in the last
moment these provisions were taken out of the draft law in spite of the strong
opposition by some of the stakeholders. As a consequence, the CPL does not
contain the rules on consumer credit, which was instead subsequently regulated
by a separate Law on protection of users of financial services.27 This Law was
adopted in May 2011 and its application started in December 2011. However, the
analysis of its text shows that the drafters of this law did not follow the model
provided by the erased chapter on consumer credit from the final draft of the
CPL. As a consequence, it can be noticed that the provisions of this law are not
aligned with Directive 2008/48/EC on consumer credit, which is confirmed by
the European Commission, too.28
Some of the provisions of the CPL show that Serbia profited from the minimum
harmonisation clauses in order to protect consumers in situations which are not
covered by the consumer acquis. Some of the examples include the chapter on
price indication that transposed the rules of minimum harmonisation Directive
98/6/EC where separate articles of the CPL provide the particular rules for price
indication in the case of petrol stations, restaurants and different types of
accommodations as provided by articles 11 and 12 of the CPL. Nevertheless,
Serbia has not used the possibility stemming from Article 5(1) of the Directive
98/6/EC which allows for a “negative list” of products for which a member state
can waive the obligation to indicate the unit price of products. Similarly, the
possibility from the Article 5(2) regarding a “positive list” of non-food products
where the unit price must be indicated has not been used.
It is important to notice that the CPL has introduced some legal concepts into the
Serbian law for the first time. That is particularly the case with the Chapter III
Official Gazette of RS No 36/2011
Commission Opinion on Serbia’’s application for membership of the European Union –
Analitical Report, p. 122.
27
28
17
which regulates unfair commercial practices, thus transposing the Directive
2005/29/EC on unfair commercial practices. This Directive has provided a
general legal framework for fair trade and fair behaviour of the traders towards
consumers in the EU and has now been incorporated into Serbian legal system.
The CPL provides a comprehensive and effective system of sanctions in case of
unfair commercial practice which includes injunctions and high pecuniary fines.
Where this chapter of the CPL mainly retains the “old” enforcement mechanisms,
which include a strong role of the market inspectorate and misdemeanour
courts, the rules on guarantees do not, thus causing a number of implementation
problems, which are discussed below (section IV.4).
Although the CPL represents an example of successful transposition of the acquis
communautaire, especially having in mind the sheer number of directives which
it has transposed, certain areas where approximation is not fully accomplished
do exist. Examples of such areas are neither numerous nor serious, but future
amendments to the CPL should attempt to address them. Some of them are
simply a consequence of inadequate translation. Such is the case of the definition
of the consumer itself (e.g. translation of a product as a good, translation of the
term “buys” as “acquires”, etc.). Similarly, the term “seller” in the Directive
1999/44/EC has been translated as “trader”, which cannot be considered as a
negligible error.29 Other omissions in the transposition of the EU consumer
acquis have to do with the fact that the ECJ case law has not been taken into
account when drafting the new CPL. A good example for this type of an omission
is the failure to give the definition of an average consumer which the ECJ
introduced in its judgments in the cases C-315/92, C-210/96 and C-220/98.30
IV.3 Effective Legal Protection for Consumers
Point c) of Article 78 refers to the effective legal protection for consumers in
order to improve the quality of consumer goods and maintain appropriate safety
Articles 51-58 of the CPL.
The ECJ thereby defined an average consumer as “the one who is reasonably well informed and
reasonably observant and circumspect” [...] “taking into account social, cultural and linguistic
factors.”
29
30
18
standards. This point makes an explicit reference to the safety aspects of the
consumer policy, which are regulated by a separate law in the Serbian legal
system – Law on General Product Safety (2009).31 In the Serbian legal system,
product safety is not considered as part of the consumer legislation stricto sensu,
but the fact that the EU links it tightly with the consumer acquis (which is
confirmed by inclusion of the safety issues in the Consumer and Health
Protection chapter for negotiations on EU membership) will necessitate a further
understanding of the role that safety issues play in an effective consumer policy.
Until the passing of the Law on General Product Safety, important requirements
pertaining to the safety of products in Serbia were defined exclusively by
sectoral technical and other regulations, which means that safety requirements
existed only for certain groups of products. Ergo, there was no legal framework
in place for guaranteeing general safety of all products, including those which are
not subjects of technical and other regulations. Furthermore, until the passing of
the Law on General Product Safety there were no legal acts which explicitly and
precisely defined the duties of producers and distributors to place only safe
products on the market, from the aspect of all known risks that a product could
pose in the sense of the accomplished level of scientific, technological and
technical knowledge.
The Law on General Product Safety transposed a number of EU directives into
the Serbian legal system. However, in its Avis, published in October 2011, the
European Commission encouraged Serbia to take additional steps to ensure full
alignment with the EU acquis in this area.32 Nevertheless, despite certain obvious
shortcomings in terms of full approximation with the EU law, this law has
substantially improved the legal framework and practice regarding safety of
products placed on the Serbian market. It also represented the legal basis for the
Zakon o opštoj bezbednosti proizvoda, „Official Gazette of the RS“ No. 41/2009.
Commission Opinion on Serbia’’s application for membership of the European Union –
Analitical Report, p. 122.
31
32
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establishment of “a relatively comprehensive system of active coordination of
market surveillance across different ministries.” 33
IV.4 Monitoring of Rules and Access to Justice
Point d) of the Article 78 refers to the monitoring of rules by competent
authorities and providing access to justice in case of disputes. The greatest
problems in the Serbian consumer protection system currently are indeed
related to the enforcement mechanisms and access to justice.
The new enforcement mechanism
The CPL provides a new mechanism of enforcement, different than the one that
previously existed on the basis of the Law of Consumer Protection of 2005. One
of the most innovative concepts is the establishment of the out-of court manner
of settlement of consumer disputes.
The CPL provides two manners of out-court settlement of consumer disputes.
The first one is through mediation, in accordance with the law that regulates
mediation in Serbia. The second one is through arbitration in accordance with
the law that regulates arbitration. In accordance with that, the CPL provides a
detailed mechanism for this means of settlement of consumer disputes.
However, all this has remained just black letter law. No case law of this kind
exists for more than a year of the application of the CPL. In a specific area of
consumer law, the consumer credit, the alternative system of settlement existed
even before the adoption of the CPL. That was the system established by the
National Bank of Serbia and represents a successful example. It has existed for
more than five years now and the regularly published statistics shows the
constant increase of successfully resolved disputes through this instrument.
Relevant authorities can profit from this example and develop a similar system
for other areas of consumer law.
Commission Opinion on Serbia’’s application for membership of the European Union –
Analitical Report, p. 122.
33
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The new Serbian Law on Civil Procedure of 2011 introduces particular rules for
consumer dispute. However, there have been no cases so far nor has any
information regarding the case law been published by the Ministry, which is
required by the Article 141 of the CPL.
Problems regarding the application of the new enforcement mechanism
The main problem regarding the new enforcement mechanism lies in the gap
between the proclaimed policy, which includes a stronger role for consumer
organisations, arbitration, mediation and other mechanisms for out of court
dispute settlement, coupled with a diminishing role of a repressive system
mirrored in inspection and misdemeanour proceedings, and the real
performance of the government in the last couple of years. The latter has been
characterised by a chaotic reform of the judiciary, weak (to inexistent) progress
pertaining to out of court settlement, inexistence of small claims court or similar
mechanisms, weak support to the NGOs, etc.
The only mechanism which has worked to a certain extent in the past has hastily
been proclaimed as obsolete and is being phased out. The inspection system is, in
fact, frequently transformed into a kind of out-of-court settlement mechanism,
due to the looming “threat” of a fast and efficient misdemeanour procedure,
which is quickly followed by quite a high pecuniary fine, as well as the possibility
of other sanctions. Faced with this procedure, both parties have an interest in
settling the dispute without the inspection, often through mediation and advice
of a consumer organisation.
Further analysis of the successfulness of the policy as announced and proclaimed
is certainly needed. However, based on the conducted interviews it can be
concluded that all parties involved find the simple and fast procedure from the
previous CPL as more suitable, especially in cases of complaints by consumers
related to guarantees. When observing the statistics over the two years
preceding the entry into force of the new CPL (2009-2010), these complaints
constituted between 50 and 65% of all the cases by the market inspectorate. It
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could be imagined that the number of cases would have been immensely higher,
had the “threat” of this procedure not existed.
The market inspectorate was hit hard by the rationalisation of the public
administration in Serbia in the crisis stricken 2010. The envisaged 10%
reduction of the staffing levels per ministry was in most ministries conducted by
reducing the number of inspectors by 15 and more percent, while the number of
civil servants in the ministries proper would be decreased by only a few percent.
In the case of the Ministry of Trade the number of inspectors was reduced from
571 to 485 (i.e. by 15%) in 2010.34
IV.5 Exchange of Information
The system of rapid exchange of information is established on the basis of the
Law on General Product Safety.35 This system serves for rapid information and
alerting between the responsible and other institutions and organisations in
Serbia regarding the measures and activities undertaken regarding the risks that
dangerous products represent for the health and safety of consumers and other
users. This system (called NEPRO) will in fact represent the internal RAPEX of
Serbia, which will at a later stage of Serbia’s EU integration (possibly before
accession) be integrated into the EU RAPEX system.36
The European
Commission has positively evaluated the introduction of the information
exchange system in Serbia (NEPRO) in its Avis of October 2011. 37
This system is still in an early stage of development and, whereas it can generally
be observed that Serbia has made steps to fulfil its obligations under the point e)
of the Article 78 of the SAA, additional research will be needed to evaluate the
real impact of this system.
Responses to the Questionnaire of the European Commission, Chapter 28, p.4, available at:
<www.seio.gov.rs> (10 February 2012)
35 Article 14, paragraph 2 of the Law on General Product Safety
36 Article 15 of the Law on General Product Safety
37 Commission Opinion on Serbia’’s application for membership of the European Union –
Analitical Report, p.122.
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V. CONCLUSION
The purpose of this paper was to examine the Serbian system of consumer
protection set up under the 2010 Law on Consumer Protection from the aspect
of the requirements set out in Articles 72 and 78 of the SAA. While Article 72
contains a general requirement of approximation of the associated country’s
legal system with the acquis and enumerates several priority areas where
approximation is to start from the day of the signing of the SAA, including the
consumer policy there as one of the key elements of the Internal Market acquis,
Article 78 creates a more specific consumer related regime. It necessitates
specific actions/reforms by Serbia, whose realisation in practice has been
examined in this paper.
In terms of pursuing an active policy of consumer protection, Serbia has not
achieved much progress over the last year. These problems are of an
implementation nature, which tends to be an inherent problem in the Serbian
administrative system. Even when high quality laws are produced and adopted,
follow-up activities frequently fall short of ensuring adequate implementation
and enforcement of their provisions, thus failing to accomplish the effects
intended by such legislation. In the case of the CPL, the problems are related to
insufficient capacities and lack of focus by the responsible Ministry, failure to
establish one of the most important policy institutions – the National Council for
Consumer Protection, as well as insufficient and unfocused support to consumer
organisations. The only area in which certain results were accomplished is the
information and education of consumers, though these activities were mainly
implemented in the period of the drafting and enactment of the CPL, while in the
aftermath of its adoption they have faded considerably. Despite numerous,
though fragmented, activities in the area of consumer education, what is still
missing is collective action primarily organised by relevant state authorities
aimed at ensuring a long-term strategy of consumer education and information.
The new CPL has accomplished much in terms of harmonisation of the EU
consumer acquis into the Serbian legal system, which is the second requirement
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of the Article 78. A comprehensive set of EU directives has been transposed into
the CPL, though in the case of two directives various reasons interfered in the
drafting process, resulting in the exclusion of provisions ensuring their
transposition into the CPL. Thus, the directives on consumer credit and distance
marketing of financial services were transposed into the Serbian legal system
through separate legislation. Additionally, from the legal approximation point of
view, several more or less significant omissions were made, mainly having to do
with inadequate translation of certain terms and definitions and lack of inclusion
of the ECJ case law in the approximation process. These omissions do not
significantly affect the level of alignment of the CPL with the EU consumer acquis,
but should be addressed in future amendments of this Law.
The third requirement of the Article 78 relates to effective legal protection with
the view to improve the quality of consumer goods and maintain appropriate
safety standards. This area was regulated by a separate Law on General Product
Safety, which has not ensured full harmonisation with the acquis, but has
nevertheless made significant progress in terms of general safety of products
placed on the Serbian market.
Monitoring of rules by competent authorities and providing access to justice in
case of disputes is the fourth requirement under Article 78, which has been
analysed in this paper. The CPL effectively comprises a dual system of
enforcement, with different regimes applying to different issues regulated by it.
Most of the provisions of the CPL have maintained the “old” enforcement system,
which operated under the previous CPL as well, mainly relying on the role of the
market inspectorate and the misdemeanour courts. Other provisions of the CPL
such as those dealing with guarantees, on the other hand, are to be enforced
through a rather modern and innovative enforcement mechanism, albeit one for
which Serbia seems to be unprepared. The new mechanisms of out-of-court
dispute settlement through mediation and arbitration are not yet functional and
the role of the consumer organisations in this enforcement mechanism has not
been supported by the State.
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The final requirement of the Article 78 has to do with exchange of information on
dangerous products, where a seemingly functional internal system has been
established (called the NEPRO), to simulate the EU RAPEX system and to be
integrated into it at a later stage. Whereas the European Commission seems to be
satisfied with the results achieved so far, further research will be necessary to
evaluate the real results of the NEPRO system in the long run.
Following from all of the stated above, it is possible to conclude the following:
1. Serbia has largely ensured approximation of its consumer related
legislation with the EU acquis, though several areas for improvement still
exist.
2. Main problems have been encountered in the sphere of implementation
and enforcement, due in part to the introduction of novel and advanced
mechanisms but, above all, due to limited and unfocused support and
commitment by the government and the responsible ministry.
3. Whereas the new CPL, as well as other legislation in the area of product
safety and consumer protection, largely creates the preconditions for
bringing the standards of consumer protection in Serbia in line with those
of the EU, consumers in Serbia do not yet enjoy the level of protection
existing in the Union. To a certain extent, due to the serious problems in the
sphere of implementation and enforcement, their level of protection is
nowadays even lower than it used to be under the previous CPL, which was
not harmonised with the EU acquis.
4. Serious and focused action will be necessary in the future to make full use
of the new and modern legislation through its proper enforcement, which
can be considered the true spirit of the Article 78 of Serbia’s SAA with the
EU.
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