As the whole world is struggling to manage the COVID-19 pandemic and the consecutive economic fallout, the Croatian banking and financial sector has introduced a number of measures to alleviate the pressure on struggling companies as well as citizens affected by the crisis. The Croatian National Bank has taken several actions with the purpose of increasing the liquidity of the financial system and provided additional liquidity for commercial banks, which have also introduced their own measures.
This article provides an overview of banking regulation in Croatia, including which authorities govern banking regulation and what the central bank's role is therein, the type of licence required to conduct banking services and what the application process is like, the forms of bank which can operate in Croatia and how are they regulated and how the Croatian regulatory regime distinguishes between different forms of bank.
The government recently announced a phased plan to lift restrictions that were imposed in Croatia as a result of the COVID-19 pandemic. While many sectors prepare to resume operations, the Croatian Competition Authority has been fully operational since 11 May 2020.
Over the past few years, European and national institutions have warned about the negative effects of unfair trading practices in the supply chain. In order to tackle these and regulate the risk of abuse, several countries have enacted distinct trade laws. Croatia recently followed suit by adopting a new Act on the Prohibition of Unfair Trading Practices in the Business-to-Business Food Supply Chain. The act defines the concept of 'significant buyer power', as well as different types of illegal behaviour.
In July 2015 the Competition Agency received an initiative to initiate proceedings against Ytong porobeton (YP) for alleged abuse of its dominant position. YP rejected all of the assertions against it, arguing that the relevant market had been incorrectly determined. Based on expert opinions, the agency concluded that YP was not dominant on the relevant market and thus that it had not abused its dominant position.
In a recent case the Competition Agency for the first time accepted the proposed commitments in a case conducted under the qualification of a prohibited agreement, even though all the characteristics of a prohibited horizontal agreement limiting competition were present. By accepting the commitments, the agency abandoned its previous position in favour of a more lenient one.
In a recent ruling by the Croatian Competition Agency (CCA), a decision by the Croatian Insurance Bureau to revoke the power of an insurer to issue motor certificates was found not to constitute a prohibited agreement. Irrespective of this, the CCA noted that it is not the role of undertakings to control the operation of their competitors, and that the parties involved should have reported the insurer if they thought it had breached the law.
On 20 March 2020 Parliament almost unanimously passed amendments to 19 laws enabling the government to implement rules and regulations for 63 different measures which aim to help and protect domestic businesses, companies and citizens whose business activities have been affected by the COVID-19 pandemic. This article provides an overview of the most important measures.
The second package of government measures for mitigating the effects of the COVID-19 pandemic on the Croatian economy, which recently entered into force, includes a number of tax exemptions for companies. For example, companies whose revenue in April 2020, May 2020 and June 2020 has fallen by 50% or more compared with the respective month in 2019 will be completely exempt from their tax liabilities – namely, from paying profit tax, income tax and contributions.
A second package of government measures for mitigating the effects of the COVID-19 pandemic on the Croatian economy recently entered into force. The measures for reducing the rate of unemployment include subsidised salaries for employees in affected sectors, the discontinuation of existing employment and self-employment subsidies to secure additional funds to preserve employment in affected sectors and the extension of subsidies for permanent seasonal workers.