National Bank of Serbia Tightens Control Over Foreign Exchange Operations, Introduces Temporary Asset Seizure

The National Bank of Serbia (NBS) has implemented stricter measures for monitoring foreign exchange operations in order to improve financial discipline and curb potential abuses in international financial flows. The new regulation clearly outlines how transactions between domestic and foreign individuals and entities will be controlled.

What Do the New Rules Entail?

The new NBS decision covers all foreign exchange activities – from international payments and money transfers to the use of foreign accounts, payment cards, electronic money, and digital assets. These rules apply to everyone – both residents and non-residents, as well as individuals and legal entities.

The NBS has introduced a dual control system for monitoring foreign exchange operations, consisting of indirect and direct control methods. Indirect control requires entities to voluntarily submit documentation, such as reports, contracts, statements, and other data related to their international financial activities. Direct control, on the other hand, involves field inspections where authorized NBS inspectors or experts visit the premises of the entity being inspected and gain access to business records, contracts, IT systems, and other relevant documentation. Special attention is given to companies that are connected to the entity under scrutiny, whether through ownership or business relationships.

If there is suspicion that assets have been acquired unlawfully, the NBS has the authority to temporarily seize various assets, including cash, foreign currencies, payment cards, digital wallets, cryptocurrencies, electronic data, and relevant business documentation. The NBS can also block accounts, order the forced conversion of electronic money, or transfer digital assets to a special control account.

The NBS will carry out these oversight activities in cooperation with the Tax Administration, Customs, Police, and other relevant institutions. In cases of suspicious transactions, there will be data exchanges and joint inspections between these authorities.

Entities under scrutiny have specific obligations. They must provide access to their documentation and databases, submit requested information within the given deadlines, and ensure that employees are available for interviews to gather additional information. Failing to comply with these obligations will be considered obstruction of control.

Control is considered obstructed if the entity is unavailable or fails to respond to calls, provides inaccurate or incomplete information, misses deadlines for submitting documents, or actively hinders inspectors during oversight activities.

In these cases, the NBS may issue a ruling imposing a fine and ordering the entity to allow the inspection to proceed. If the entity still does not comply within three working days, all assets may be blocked – except those intended for paying fines or taxes. Such a ruling is enforceable and may serve as a basis for forced collection.

These changes clearly demonstrate the National Bank of Serbia’s determination to increase oversight over international financial flows and combat abuses in foreign exchange operations.