Professional Supervision Procedure
The Law Amending the Law on Bankruptcy Supervision Agency regulates more closely the conduct of professional supervision.
Article 3a of this Law prescribes that in discharging the duty of professional supervision the Agency assesses the bankruptcy administrators’ compliance with regulations governing bankruptcy.
Professional supervision includes:
- 1) Review and analysis of reports and other documents that the bankruptcy administrator is required to submit under the regulations governing bankruptcy, or as requested by the Agency;
- 2) Direct supervision, by visiting bankruptcy administrators’ offices and reviewing documents, business books, databases, statements of accounts, correspondence, etc;
- 3) Taking statements from bankruptcy administrators and persons employed or engaged in bankruptcy administrators’ offices, as well as from persons employed with the debtor or otherwise engaged in the bankruptcy proceeding, unless such persons are under a statutory or other regulatory obligation to keep confidential the business or other secret;
- 4) Performing other activities that the Agency may deem necessary for conducting professional supervision.
If it is determined during the course of professional supervision that the bankruptcy administrator has not complied with regulations governing bankruptcy, the Agency will take one or more measures prescribed under the law governing bankruptcy, such as: reprimand, public reprimand, fine, licence revocation.
Article 3b of this Law provides that persons and bodies authorised to carry out professional supervision are the Supervisor, the Disciplinary Panel and the Director of the Agency.
The duties of a Supervisor may be performed by a person being employed in the Agency and meeting the following requirements:
- 1) Having a university degree;
- 2) Having at least three-year working experience;
- 3) Having passed the bankruptcy administrator licensing examination.
The Regulation on Internal Organisation and Systematisation of Posts within the Agency may also prescribe other requirements that the Supervisor must meet.
Supervisors have official identity cards issued by the Director of the Agency.
The Disciplinary Panel consists of five members. Its constitution and appointment is specified in a Regulation on the Constituiton and Appointment of Disciplinary Panel passed by the Managing Board of the Agency (I No 01-129/2010-7 of 26.02.2010). The Disciplinary Panel consists of five members and their substitutes, whereby two of the members are nominated by the Ministry in charge of bankruptcy matters, another two by the Director of the Agency from the Agency employees, and one member by random selection from the list of bankruptcy administrators being assigned the highest compliance rating during the direct supervision in the past two years. The Supervisor may not be a member of the Disciplinary Panel dealing with the same case which he was assigned to supervise.
Members of the Disciplinary Panel are appointed by the decision of the Agency’s Managing Board for a term of one year.
The provisions of Article 3c of this Law provide that the bankruptcy administrator and persons employed or engaged in the office of the bankruptcy administrator must:
- 1) Enable the Supervisor an unimpeded performance of tasks referred to in Article 3a of this Law;
- 2) In a procedure before the Disciplinary Panel, provide all necessary data and enable access to all documents of relevance for the conduct of the proceeding.
The provisions of Article 3d of this Law provide that the Supervisor undertakes the inspection of work of a bankruptcy administrator ex officio or on the complaint by a third party and that, following such inspection, the Supervisor compiles a report stating that there were no irregularities in the work of the bankruptcy administrator, or, in case certain irregularities are identified, proposes the initiation of the disciplinary proceeding or the removal of those irregularities within a due course if they are of minor significance and remediable. If the bankruptcy administrator complies with the order, the Supervisor will state in his report that the identified irregularities were remedied and that no grounds exist for initiating a disciplinary proceeding.
Disciplinary Proceeding: Article 3e of this Law provides that if the Supervisor’s Report identifies irregularities in the bankruptcy administrator’s work and proposes the initiation of the disciplinary proceeding, the Supervisor will serve the Report on the bankruptcy administrator concerned and the Disciplinary Panel, as well as the complainant if the inspection was initiated on the complaint of a third party. The Supervisor’s Report to the Disciplinary Panel should be accompanied by case file for the purpose of disciplinary proceeding.
Based on the Supervisor’s Report the Disciplinary Panel initiates the disciplinary proceeding against the bankruptcy administrator concerned.
During the disciplinary proceeding the bankruptcy administrator must be allowed to make a statement on the allegations in the Supervisor’s Report and present facts and circumstances relevant to the decision of the Disciplinary Panel. If the Disciplinary Panel establishes that there have been no irregularities in the bankruptcy administrator’s work, it will render the decision dismissing the proceeding, but if it establishes that the irregularities do exist, it will render the decision imposing one or more disciplinary measures. These decisions are served on the bankruptcy administrator and the Supervisor performing professional supervision, as well as the complainant if the inspection was initiated on the complaint of a third party. These decisions are final and may be subject of administrative dispute.
The Disciplinary Panel acts on the majority vote of its members, except in case of the decision revoking the licence which shall be unanimous.
Article 3f of this Law distinguishes minor and major violations of duties of a bankruptcy administrator. Minor violations are considered to be those minor omissions or irregularities in the bankruptcy administrator’s work as well as breaches of regulations governing bankruptcy that do not have significant adverse effects on or consequences for the estate, creditors, or third parties. Major violations within the meaning of this Law are considered to be those major omissions or irregularities in work and beaches of regulations governing bankruptcy that have significant adverse effects on and consequences for the estate, creditors or third parties. The major violation of duty is also considered to be any failure to comply with Supervisor’s instructions, as well as a repetitive or continuing denial of cooperation with authorised persons from the Agency, or disallowing the Agency to undertake professional supervision.
Pursuant to Article 3g of this Law, if minor violation of the bankruptcy administrator duty was committed, the Disciplinary Panel may impose a reprimand, public reprimand, or a fine. The fine may range from RSD 10,000 to RSD 100,000 RSD, and in case of repetitive minor violation up to RSD 200,000. In case of committing a major violation, the Disciplinary Panel may impose such measures as a public reprimand, fine or licence revocation. The fine may range from RSD 100,000 to RSD 1,000,000.
Revocation of bankruptcy administrator licence and striking off the list of bankruptcy administrators is prescribed under Article 3h of this Law and may occur if the bankruptcy administrator:
- 1) Files a request to be stricken off the List of Bankruptcy Administrators;
- 2) Ceases to hold citizenship of the Republic of Serbia;
- 3) Is deprived of contractual capacity by a final decision;
- 4) Is charged, by absolute judgement, for criminal offence that makes him untrustworthy to act as a bankruptcy administrator or a criminal offence carrying a penalty exceeding five years’ imprisonment.
The Director of the Agency renders a decision to strike the bankruptcy administrator off the List of Bankruptcy Administrators in case of death. The decisions referred to above are final and may be subject of administrative dispute.
Article 3i of this Law provides that the provisions of the law governing administrative proceedings shall apply accordingly to the procedure of professional supervision, unless otherwise prescribed by this Law.
