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The single bank licence concept has been introduced into Czech law through the Banking Act. As a result, foreign banks, as well as certain other financial institutions that have their registered seat in an EU member country, may conduct business through branch offices in the Czech Republic without a licence from the Czech National Bank.
Although the government has indicated that the country's recent floods will not impact significantly on the country’s economy, the fact remains that many Czech businesses and citizens suffered considerable damage. In response to the situation, certain Czech banks are offering special products such as reduced-rate purpose-specific loans and interest-free bridge loans.
Including: Introduction; Act on Public Auctions; Voluntary Public Auction; Involuntary Public Auction; Comment; Conclusion.
A Czech National Bank regulation that prescribes new capital adequacy rules for banks has taken effect. The regulation requires banks to consider credit risk, as well as market risks including risks related to derivative instruments.
Following a week of bank-runs by depositors, the Czech National Bank imposed receivership on Investicni a Postovni Banka, the third largest Czech bank. The bank has been taken over by Ceskoslovenska Obchodni Banka, which as a result has become the country's largest bank.
An act due to come into force at the start of 2007 will make the state responsible for damage caused by its employees serving as members of company corporate bodies. The amendments address situations where a state employee is assigned to work as a state representative for a corporate body of a legal entity.
Recent amendments to the Commercial Code and the Act on Accounting impose new publication duties on companies. Joint stock companies with bearer shares must now convene a general meeting by publication of a notice of convocation in the Commercial Gazette.
The Czech government has adopted legislation in the form of three separate laws to introduce the societas Europaea into the legal environment. As of December 14 2004, it is possible to establish a societas Europaea in the Czech Republic and transfer it to or from the Czech Republic.
Pursuant to a legislative amendment, a resolution on the squeeze-out of minority shareholders may be adopted provided that the majority shareholder holds shares of a total nominal value exceeding 90% of the company’s registered capital. Most importantly, a majority shareholder may now vote on the squeeze-out resolution.
A shareholder in a joint stock company whose stake reaches or exceeds a certain threshold may request the board of directors to convene a general meeting and include certain items on the agenda. The Supreme Court has ruled that this right is not extinguished if the shareholder's stake subsequently drops below the threshold, as long as the shortfall is made up before the meeting is convened.
The Trade Licence Office has clarified the issue of when certain legal entities must notify it of corporate changes. Previously, it was unclear whether the notification period commenced on the date of (i) the decision of the relevant body or (ii) registration of the relevant change in the Commercial Register.
The Office for the Protection of Competition has invited the general public to provide comments on its draft guidelines regarding the calculation of turnover for the purposes of merger control notification. The aim is to help merging undertakings to determine whether a transaction requires clearance from the Office for the Protection of Competition.
The Czech Office for Protection of Competition has decided to assist officially merging undertakings in their merger notification. The aim of the newly established process is to facilitate and accelerate merger control proceedings. However, the pre-notification process works on a purely voluntary basis and is not a condition precedent to granting a clearance.
The Competition Office recently found a company active in natural gas import and trade liable for abuse of its dominant position, and thus in breach of both national and EU competition legislation. The Competition Office imposed a fine of Kr240 million. However, in judicial review proceedings the court abolished the Competition Office’s decision.
In June 2007 the Competition Authority issued a new leniency programme. The programme was inspired by the model programme set out by the European Competition Network, as well as the new leniency programme of the European Commission. The new programme introduces various changes, including more detailed conditions for its application.
The European Commission has issued a reasoned opinion formally requesting that the Czech Republic amend a provision of the Czech Competition Act that limits the Competition Authority's power to apply Articles 81 and 82 of the EC Treaty to anti-competitive behaviour in the electronic communications sector.
The Ministry of Work and Social Affairs has received a fine of Kr500,000 from the Office for the Protection of Economic Competition for breaching provisions of the public procurement legislation in failing to open a tender for the delivery of services.
Serbia and Montenegro
Recent amendments to the Privatization Law are the first significant changes to the law since its enactment in 2001. Among other things, they simplify the privatization procedure, define eligible and ineligible buyers, specify the obligations of the companies undergoing privatization, and set out how the privatization proceeds must be allocated.
Withholding tax on dividends, profit distributions, liquidation distributions and interest income from bonds, deposits, loans and credits received by non-residents has been reduced from 25% to 15%.
The Supreme Court recently ruled that a creditor may have standing to sue for a declaration that a transfer of its debtor’s shares to a new sole shareholder is invalid. The judgment aims to provide a new remedy for dishonest debtors, but at the same time may have an unwanted side effect.
In a recent case the Supreme Court ruled that although a real estate lease lasting 100 years is a valid arrangement, it does not qualify as a contract for a definite period of time. The reasoning behind the ruling was the fact that such a long period of time exceeds the average human lifespan.
Due to a conflict with a Czech constitutional order, the Constitutional Court has repealed part of the Courts and Judges Act. The repealed section allowed the president to remove judges from their positions as chairpersons and vice chairpersons of courts.
On April 1 2005 a new amendment to the Civil Procedure Code modifying the regulation of preliminary injunctions in civil proceedings came into force. A claimant requesting a preliminary injunction is now obliged to pay an advance payment of Kr50,000 (or Kr100,000 in commercial disputes) as security for potential damages which the preliminary injunction may cause the defendant.
The European Court of Human Rights has issued a decision relating to an application lodged with the court by a Czech citizen against the Czech Republic. The court adjudicated on the appropriate length of two judicial proceedings before the Czech courts to which the claimant was a party.
A shareholder in a joint stock company whose stake reaches or exceeds a certain threshold may request the board of directors to convene a general meeting and include certain items on the agenda. The Supreme Court has ruled that this right is not extinguished if the shareholder's stake subsequently drops below this threshold, as long as the shortfall is made up before the meeting is convened.