Serbian Law on Unfair Trading Practices

Alignment of trading companies’ general terms and conditions, contracts, internal guidelines and practices by 1 September 2026 –

The Serbian legislator is seeking to implement EU Directive, 2019/633 on unfair trading practices into Serbian law through the adoption of the Law on Trading Practices in Respect of Certain Categories of Products („Serbian Law on Unfair Trading Practices”), which entered into force on 1 May 2026, and the Instruction of the Serbian Commission for Protection of Competition further regulating unfair trading practices, which entered into force on 4 July 2026.

The main difference from the EU UTP Directive is that the Serbian Law on Unfair Trading Practices regulates a considerably broader range of products than the Directive, since it introduces additional categories of products falling within the scope of its provisions, in addition to agricultural and food products.

It is important to note a further difference to the EU UTP Directive, is that the Serbian Law on Unfair Trading Practices applies to trade carried out on the territory of the Republic of Serbia, irrespective of the seat of the buyer or supplier, as a contracting party. In addition, the Serbian Act expressly provides, in its text, that all provisions of the Act are to be regarded as overriding mandatory provisions, irrespective of the law agreed between the buyer and the supplier.

The Serbian Law on Unfair Trading Practices implements the principle of equal treatment, as well as the principle of good faith and fair dealing in trade in the regulated products, through a series of rules governing the relationship between suppliers and buyers carrying on trade on the territory of the Republic of Serbia.

Significant updates are introduced in the area of trade in agricultural and food products, but also in household chemicals, paper goods and kitchenware, personal hygiene products, cosmetics and nappies, as well as products of particular importance for agricultural production in the Republic of Serbia. In addition, the Serbian Law on Unfair Trading further applies to trade in products of particular importance for the supply of the market.

The legislator treats the following two categories as products of particular importance for the supply of the market:

1. products of particular importance for the supply of consumers: household chemicals, paper goods and kitchenware, personal hygiene products, cosmetics and nappies;
2. products of particular importance for agricultural production, namely: plant nutrition and protection products and soil improvers.

A full list of the products covered by the Law on Trading Practices in Respect of Certain Categories of Products will be further regulated by decision of the Serbian Government.

In order to protect suppliers with regard to the collection of receivables arising from sale contracts for products covered by this law, the legislator has expressly provided that the payment term for perishable products is 30 days, while for other agricultural and food products the payment term is 60 days. The payment terms applicable to products of particular importance for the supply of the market are those set out in the Law on the Settlement of Monetary Obligations in Commercial Transactions.

As an additional form of protection, the legislator has now provided, under this Act, that buyers and suppliers are required to conclude sale contracts for the products in question in written form.

The legislator defines which conducts are to be regarded as unfair trading practices by laying down a legal standard, providing, among other things, that unfair trading practices are those practices which, on account of a marked imbalance in negotiating power between supplier and buyer, through unilateral imposition and conduct, depart from good commercial practice, contrary to the principle of good faith and fair dealing. This provision also covers situations involving a disproportionate transfer of economic risk from one trading partner to another (Article 4 of the Law on Trading Practices in Respect of Certain Categories of Products).

It is specified that significant negotiating power is assessed by comparing the thresholds of the total annual turnover of the supplier and the buyer. However, significant negotiating power should not be equated with the level of the buyer’s annual turnover.

The Commission for Protection of Competition has issued an Instruction further regulating significant negotiating power. In that Instruction, the Commission for Protection of Competition defines significant negotiating power as the ability of one contracting party to impose its own terms on the other contracting party as a result of an imbalance in their respective economic positions. Accordingly, the level of the buyer’s annual turnover is not the sole factor in determining significant negotiating power. It is also determined by reference to the buyer’s actual market strength relative to the supplier.

The legislator provides that unfair trading practices may arise before, during or after completion of the sale of a given product, irrespective of whether a written contract exists.

The legislator further elaborates these legal standards through lists of conduct which it regards as specifically prohibited, or conditionally prohibited, namely:

1. a black list – examples of practices that are absolutely prohibited, and
2. a grey list – examples of practices that are conditionally prohibited.

The black list of unfair trading practices covers conduct that is always prohibited, regardless of the circumstances of the individual case, the existence of an agreement, or a commercially justifiable reason, and in particular concerns cases such as: unilateral amendment by the buyer of the terms of the contract (in particular as regards the duration of the contract, delivery conditions, the quantity and quality standards of the goods, the method of payment and the price), as well as demands for payment from the supplier that are not connected with the sale of the product.

The grey list of unfair trading practices covers trading practices that are prohibited unless the buyer demonstrates that the practice is justified and that the written consent of the other contracting party has been obtained. It is important to note that the written consent of the other contracting party must be given clearly, unambiguously, in advance and in writing, so that consent cannot be given by means of a clause in the general terms and conditions of business, nor in any other manner amounting to unilateral imposition as a result of a significant imbalance in negotiating power. The grey list includes, for example, situations in which the buyer: charges fees for a decrease in turnover, makes the supplier’s participation conditional on bonuses or rewards during performance of the contract, or charges fees for the customary and reasonable display of products at the point of sale (e.g. a slotting fee), unless the supplier has requested a service involving genuine, additional promotional display exceeding the customary display for that product category and the fee is proportionate to, and based on, the actual costs of that activity.

The Serbian Law on Unfair Trading also introduces a third category of unfair trading practices: commercial retaliation. This covers conduct on the part of the buyer amounting to commercial retaliation against the supplier, or threats of retaliation, on the ground that the supplier seeks to exercise its contractual or statutory rights and obligations, or that it refuses to accept the buyer’s formal or informal offers and terms. Unlike the Directive, the Serbian Act sets out specific forms of commercial retaliation, such as: the removal of the supplier’s products from the buyer’s product range or promotional campaigns.

For the purpose of further defining the trading practices set out on the black and grey lists, as well as the concept of commercial retaliation, the Commission for Protection of Competition has adopted the Instruction whereby it further regulates the above stated unfair trading practices.

The authority to establish the existence of unfair trading practices, and to impose penalties for them, is conferred upon the Commission for Protection of Competition. The Commission initiates proceedings to examine the existence of an unfair trading practice either of its own motion or upon a complaint lodged by any legal or natural person, a state administration body, a body of local self-government or territorial autonomy, an organisation entrusted with public powers, an association of market participants, a consumer association, a market participant, or any other person having knowledge of unfair trading practices. Such a complaint is to be lodged in writing, and may, exceptionally, be lodged in person at the Commission’s premises.

If the existence of an unfair trading practice from the black list, or if commercial retaliation is being determined in the proceedings, burden of proof for the existence of the prohibited conduct lies with the Commission for Protection of Competition. If the existence of an unfair trading practice from the grey list is determined, the burden of proof that the conduct was justified and that the written consent of the other party was obtained lies with the party to the proceedings, i.e. with the buyer holding significant negotiating power, or against whom the examination proceedings have been initiated.

Upon completion of the examination proceedings, the Commission for Protection of Competition issues a decision concluding the proceedings and establishing whether, in the specific case, the buyer’s conduct is to be regarded as an unfair trading practice. The parties have no right of appeal against the Commission’s decision; the decision is final and enforceable, but administrative proceedings may be brought against it.

The penalties imposed by the Commission for Protection of Competition range from 0.1% of the buyer’s total annual revenue generated on the territory of the Republic of Serbia in the year preceding the initiation of proceedings, when it is established that the buyer has imposed an unfair trading practice from the grey list. Where it is established that the buyer has imposed an unfair trading practice from the black list, or has engaged in commercial retaliation, the starting penalty is 0.2% of the buyer’s total annual revenue. Where the buyer repeats the same unfair trading practice, the amount of the penalty is increased by 100% in relation to the starting penalty.

The legislator sets a relatively short period for the implementation of these commercially complex novelties, by 1 September 2026.

Accordingly, all trading companies and suppliers trading on the territory of the Republic of Serbia, irrespective of where they have their seat, need to align their general terms and conditions of business, contracts, internal rulebooks, guidelines and practices with the Law on Trading Practices in Respect of Certain Categories of Products by 1 September 2026.

Considering the number and complexity of the updates introduced by the new Serbian Law on Unfair Trading Practices we will gladly assist you to align your general terms and conditions of business, contracts, rulebooks, internal guidelines and procedures with the Law on Trading Practices in Respect of Certain Categories of Products and the Instruction of the Commission for Protection of Competition.

For support in regard to complying with the Serbian Law on Unfair Trading Practices in the Republic of Serbia, please feel free to contact us at: dimitrije.stepanovic@tsg.rs or office@tsg.rs.