March 12, 2014 11:37 pm

Doing business in Serbia is alarmingly uncertain

From Ian S Forrester QC.

Sir, Your thoughtful editorial “Serbia deserves its EU dream” (March 10), about the merits of Serbian accession to the EU, does not mention the politicisation of law enforcement.

Hundreds of Serbian men and women (possibly as many as 3,000) are accused under the notorious Article 234 of the Serbian Criminal Code of making a profit from their position as a corporate officer. The old statute made sense in the days of Tito: if the manager of the state farm sold apples and pocketed the money, the offence of “abuse of office” was legitimate and understandable. But it makes no sense to define as an abuse of office the making of a profit in a legitimate transaction by a company executive.

I know a number of legitimate businessmen and women who have been arrested and detained for months with their children or employees, in theory for investigation but probably to intimidate. In some cases, the victims are guilty of nothing more than objecting to official misconduct (complaining about being cheated in a privatisation, for example), making a loan, or other non-existent offences. The accusations can remain pending for years.

Where prosecution is abused to harm enemies or reward friends, the judiciary becomes crucial. But ministers criticise judges, even the Constitutional Court, if they render unwelcome rulings. Judges can risk demotion or career setbacks, and it is a bold judge who formally complains.

The consequence of these many prosecutions is that doing business in Serbia is alarmingly uncertain, not because of corruption (though that may exist) but because of the state’s use of the courts to pursue as abuses of office normal business operations by selected targets. Investment will flourish where the rule of law is certain. This is why the European Commission has wisely chosen to begin the accession negotiations with the chapters on the rule of law.

Serbia has rich resources, and Belgrade is a lovely city which is a natural regional capital. The Kosovo breakthrough is immense. There are multiple reasons for optimism about Serbian accession. But in a democracy, the government has to accept that it cannot always win in its own courts.

Ian S Forrester, Honorary Professor in European Law, University of Glasgow, Belgium

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