New Regulations for Currency Exchange Operations in Serbia
Serbia's National Bank implements stricter controls and penalties for non-compliance in currency exchange business.
The National Assembly of Serbia has approved amendments to the Law on Foreign Exchange Operations, introducing significant changes to the operations of authorized currency exchange offices.
These changes include stringent controls, electronic record-keeping, and harsher penalties for non-compliance.
A key provision mandates the National Bank of Serbia (NBS) to maintain a public electronic register of authorized currency exchange offices.
These offices are required to report any changes to their data without delay.
Additionally, the law introduces a new sanctioning system for currency exchange houses that fail to comply with regulations.
Depending on the severity of violations, the NBS will have the authority to issue a written warning for minor infractions, a compliance order for more serious breaches, or to temporarily revoke operational licenses for up to 30 days in cases of serious violations.
Non-compliant currency exchange offices may face fines ranging from 100,000 to three million dinars for legal entities, and 50,000 to two million dinars for individual entrepreneurs.
Fines may be increased if the penalties exceed ten percent of the entity's annual revenue.
The most severe measure outlined in the law is the revocation of operating licenses.
This sanction will be applied when currency exchange offices fail to meet statutory conditions, do not commence operations within 30 days of receiving their license, obtain licenses based on inaccurate information, or violate regulations aimed at preventing money laundering and terrorism financing.
The revocation of a license will last a minimum of five years, during which former owners, founders, or directors of such firms will be prohibited from establishing a new currency exchange office.
Under the new regulations, the NBS will monitor foreign exchange activities of both residents and non-residents, as well as currency exchange operations, using both direct and indirect control methods.
Authorized inspectors will be empowered to temporarily seize foreign currencies, checks, digital assets, and business documentation if there are suspicions of illegal transactions.
Entities under inspection that do not cooperate could face fines ranging from 10,000 to three million dinars, depending on the size of the legal entity.
Continued violations may lead to account freezes and forced liquidations.
A particular focus is placed on combating illegal currency exchange activities.
The NBS will be able to identify and sanction anyone conducting currency exchange activities without approval, regardless of the scope or nature of the services.
For legal entities, a prohibition on operations may be enforced.
Furthermore, all information obtained during the control process will be classified as confidential or internal, with strict legal regulations governing its disclosure to third parties.
This new regulatory framework aims to enhance transparency and safety in Serbia's financial system, prevent illegal transactions, and improve compliance with foreign exchange laws.
Control agencies are now mandated to closely collaborate in monitoring both residents and non-residents engaged in foreign exchange and currency exchange operations.
If there is reasonable suspicion that those being monitored may obstruct the process, the National Bank of Serbia may enlist police assistance to ensure the control is conducted effectively.
The police are required to provide support to the NBS request promptly.
Additionally, the business registrar is prohibited from removing any legal entity or entrepreneur from the register until any control procedures or potential legal actions concerning identified irregularities are completed.
The law also mandates the seizure of assets obtained through violations, including foreign currencies, checks, digital property, and other valuables implicated in illegal activities.
In special circumstances, partial asset seizure may also be undertaken, depending on the severity of the violations and evidence of legal origin.
The National Bank of Serbia has been given a three-month deadline to implement new regulations detailing the execution of these amendments.
Until then, existing regulations will remain in effect, except where they conflict with the new law.
These changes include stringent controls, electronic record-keeping, and harsher penalties for non-compliance.
A key provision mandates the National Bank of Serbia (NBS) to maintain a public electronic register of authorized currency exchange offices.
These offices are required to report any changes to their data without delay.
Additionally, the law introduces a new sanctioning system for currency exchange houses that fail to comply with regulations.
Depending on the severity of violations, the NBS will have the authority to issue a written warning for minor infractions, a compliance order for more serious breaches, or to temporarily revoke operational licenses for up to 30 days in cases of serious violations.
Non-compliant currency exchange offices may face fines ranging from 100,000 to three million dinars for legal entities, and 50,000 to two million dinars for individual entrepreneurs.
Fines may be increased if the penalties exceed ten percent of the entity's annual revenue.
The most severe measure outlined in the law is the revocation of operating licenses.
This sanction will be applied when currency exchange offices fail to meet statutory conditions, do not commence operations within 30 days of receiving their license, obtain licenses based on inaccurate information, or violate regulations aimed at preventing money laundering and terrorism financing.
The revocation of a license will last a minimum of five years, during which former owners, founders, or directors of such firms will be prohibited from establishing a new currency exchange office.
Under the new regulations, the NBS will monitor foreign exchange activities of both residents and non-residents, as well as currency exchange operations, using both direct and indirect control methods.
Authorized inspectors will be empowered to temporarily seize foreign currencies, checks, digital assets, and business documentation if there are suspicions of illegal transactions.
Entities under inspection that do not cooperate could face fines ranging from 10,000 to three million dinars, depending on the size of the legal entity.
Continued violations may lead to account freezes and forced liquidations.
A particular focus is placed on combating illegal currency exchange activities.
The NBS will be able to identify and sanction anyone conducting currency exchange activities without approval, regardless of the scope or nature of the services.
For legal entities, a prohibition on operations may be enforced.
Furthermore, all information obtained during the control process will be classified as confidential or internal, with strict legal regulations governing its disclosure to third parties.
This new regulatory framework aims to enhance transparency and safety in Serbia's financial system, prevent illegal transactions, and improve compliance with foreign exchange laws.
Control agencies are now mandated to closely collaborate in monitoring both residents and non-residents engaged in foreign exchange and currency exchange operations.
If there is reasonable suspicion that those being monitored may obstruct the process, the National Bank of Serbia may enlist police assistance to ensure the control is conducted effectively.
The police are required to provide support to the NBS request promptly.
Additionally, the business registrar is prohibited from removing any legal entity or entrepreneur from the register until any control procedures or potential legal actions concerning identified irregularities are completed.
The law also mandates the seizure of assets obtained through violations, including foreign currencies, checks, digital property, and other valuables implicated in illegal activities.
In special circumstances, partial asset seizure may also be undertaken, depending on the severity of the violations and evidence of legal origin.
The National Bank of Serbia has been given a three-month deadline to implement new regulations detailing the execution of these amendments.
Until then, existing regulations will remain in effect, except where they conflict with the new law.
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