E-signatures in finance and NPL transactions in Serbia

  1.  E-contracting, e-statements and e-signatures in banking & finance transaction contracts and legal statements
    1. Which are the typical documents (contracts, legal statements, etc.) where written form, paper format and wet-ink signatures are mandatory?
    2. Which are the typical documents where written form is mandatory, and electronic form and e-signature are allowed?
    3.  If the written form is mandatory and electronic form and electronic signature is allowed in banking & finance transactions and agreements, what kind of e-signature is sufficient?
    4. Is there any other electronic signing/acceptance/ statement making method which meets the criteria of written documents in banking & finance transactions and agreements?
    5.  If written form is not mandatory, what kind of e-signature or other e-acceptance method is sufficient?
  2.  Electronic attorney countersigning, notarial deed and Apostille
    1.  Is the attorney countersigning accepted in electronic form? If yes, in what form and on what conditions?
    2.  Is the notarial deed accepted in electronic form? If yes, with what conditions? 
    3.  Is the Apostille accepted in electronic form (e-Apostille)? Is your jurisdiction member of the e-Apostille Program (e-APP)?
  3. Electronic AML customer authentication/identification
    1.  Is the AML customer authentication/identification allowed in electronic way?
    2. Which electronic AML customer authentication (verification)/identification methods are accepted? 
    3.  Are the beneficiary owner declaration and PEP declaration accepted in electronic form? If yes, with what kind of formalities?

As a rule, contracts can be concluded electronically and their validity cannot be disputed due to the mere fact of conclusion in electronic form. However, this does not apply to contracts for which a certain law stipulates otherwise, or to contracts and other legal statements for which a certain law requires notarisation, e.g. signature verification, solemnisation, notarial deed. If, in addition to the written form, notarisation is mandatory, the qualified electronic signature will not suffice and paper form and wet-ink signatures are required.

The written form on paper and wet-ink signatures are mandatory for the following:

  • legal transactions on the transfer of ownership rights (or similar rights) to real estate;
  • surety agreements and statements of will of the signee to a surety agreement (if the signee is a person acting outside the scope of trade, business or professional activity);
  • legal transactions involving individual persons only (contracts of inheritance law, contracts regulating property relations between spouses, as well as contracts on the disposal of property of persons deprived of legal capacity);
  • share purchase agreements and share pledge agreements;
  • mortgage agreements, mortgage waivers, etc.
  • bills of exchange, which must be submitted on paper with wet-ink signatures to the National Register of Bills of Exchange to be enforceable. However, the introduction of a digital bill of exchange is an initiative currently being considered by the authorities.

That being said, in practice not all authorities are completely technically capable of dealing with electronic documents. Therefore, even documents that legally have no obstacles to being signed with a Qualified Electronic Signature (“QES”) may in practice still have to be submitted in paper with a wet-ink signature.

1.2 Which are the typical documents where written form is mandatory, and electronic form and e-signature are allowed?

Under Serbian law, when the written form is mandatory the document is valid if it is both in an electronic form and signed with a QES.

Legal statements and contracts where the written form is required (but electronic form with a QES signature is also allowed) include the following:

  • construction agreements;
  • licensing agreements for intellectual property; 
  • financial security agreements;
  • commercial agency agreements;
  • allotment agreements;
  • insurance agreements;
  • international credit facility operations (under the Law on Foreign Currency Transactions);
  • bank guarantee agreements;
  • digital property agreements;
  • agreements to open a bank account;
  • credit agreements (bank loans);
  • leasing agreements;
  • letters of credit, etc.

1.3 If the written form is mandatory and electronic form and electronic signature is allowed in banking & finance transactions and agreements, what kind of e-signature is sufficient?

As stated above, if the written form is mandatory and the electronic form and electronic signature is allowed, the standard (non-qualified) electronic signature does not suffice and a QES is required. The difference between the first and second is that while an electronic signature confirms the identity of the signatory of an electronic document, a QES, created by a qualified means of creating an electronic signature, not only confirms but also guarantees the identity of the signatory, and has the same legal effects as a handwritten signature.

1.4 Is there any other electronic signing/acceptance/ statement making method which meets the criteria of written documents in banking & finance transactions and agreements?

The National Bank of Serbia launched the Instant Payment System (IPS) in October 2018, which allows payment service providers to execute a transaction instantly, making funds available to the recipient almost immediately. In 2020, instant payments using QR codes were introduced to toll (POS) terminals using the “IPS Scan”/“IPS Show” option, which banks implemented in their mobile banking (m-banking) applications. This feature allows customers to make payments at POS terminals via mobile phone, using a QR code, which is generated by the seller or the customer him/herself through the mobile application.

Furthermore, there are initiatives for contractors to introduce the possibility of biometric signing in electronic form, but the authorities have yet to consider this possibility.

1.5 If written form is not mandatory, what kind of e-signature or other e-acceptance method is sufficient?

Under the Law on Protection of Users Of Financial Services In Distance Contracting, financial service agreements of up to RSD 600,000 can be concluded without a QES if consent was given by using at least two elements to confirm the user’s identity (authentication) or by using high-reliability electronic identification schemes, in accordance with the law. However, this law is only applicable to individual persons (including entrepreneurs).

Additionally, certain types of insurance (e.g., travel insurance) can be obtained entirely online, using an electronic signature or via a one-time password. In general, however, more complex transactions require a QES or a wet-ink signature to minimise risk. 

2. Electronic attorney countersigning, notarial deed and Apostille

2.1 Is the attorney countersigning accepted in electronic form? If yes, in what form and on what conditions?

If an attorney has a QES issued by a licenced body in the Republic of Serbia or in accordance with the law governing electronic businesses and electronic signatures, there would be no barrier for him/her to countersign a document with his/her electronic certificate, unless the law stipulates or requires a different form of signing for that particular document.

2.2 Is the notarial deed accepted in electronic form? If yes, with what conditions? 

In Serbia, a QES has the same legal effect as a handwritten signature and it can replace the notarisation of a handwritten signature if it is prescribed by a special law.

This does not apply to legal transactions for which a special law stipulates that they cannot be undertaken in electronic form. Contracts and other legal transactions for which a special law stipulates that they be made in the form of signature verification, solemnised documents, or in the form of a notarial record, cannot be made electronically. 

A notarised document made in electronic form, but not printed on paper, is considered a notarised document if the notary public and the parties have an electronic signature registered and deposited in accordance with the law, i.e., issued by a licenced body in Serbia or in accordance with the law governing electronic businesses and electronic signatures.

A foreign notarial deed made only in electronic form has, under the condition of reciprocity, the status of a public deed when determined by the law of the state whose notary public drew up the deed and the law of the Republic of Serbia, and can be used as a public deed in Serbia in electronic form provided by the law of the Republic of Serbia.

2.3 Is the Apostille accepted in electronic form (e-Apostille)? Is your jurisdiction member of the e-Apostille Program (e-APP)?

The e-Apostille Program (e-APP) is an initiative connected to the Hague Convention of 5 October 1961. Abolishing the Requirement of Legalisation for Foreign Public Documents (Apostille Convention) facilitates the issuing and use of electronic Apostilles (e-Apostilles) and the creation and operation of electronic Registers of Apostilles (e-Registers). The E-Register is able to verify the origin of an Apostille online, using the number and date of the Apostille, and it works for both e-Apostilles and paper Apostilles. The E-Apostille is an electronically created and issued Apostille, signed with a qualified electronic signature. 

Serbia has not accepted or implemented the e-Apostille programme.

3. Electronic AML customer authentication/identification

3.1 Is the AML customer authentication/identification allowed in electronic way?

The AML regulation in Serbia, the prevention and combating of money laundering and terrorist financing Act of Serbia (the “AML Act”) provides for electronic verification.

The relevant financial institutions set out in the AML Act (the “Financial Institutions”) are entitled to identify and verify their customers (including legal entities, their representatives, and individual persons). This is done with a document such as an ID or passport, but a person’s identity can also be verified by their electronic certificate issued by a licenced body in Serbia or in accordance with the law governing electronic businesses and electronic signatures. The institution may also confirm the identity of the certificate holder with the issuer of the electronic certificate.

The Financial Institutions are obliged to inform the Serbian Administration for the Prevention of Money Laundering (the “Administration”) and the supervisory body that the determination and verification of the identity of the client will be performed on the basis of the client’s QES.

3.2 Which electronic AML customer authentication (verification)/identification methods are accepted? 

When determining and verifying the identity of a party, Financial Institutions gather all the necessary data from a qualified electronic certificate (name, address of the client, etc.). If the necessary data cannot be obtained from that certificate, they are obtained from a copy of the personal document that the party sends to the Financial Institution either physically or in electronic form. If it is not possible to obtain all the prescribed data in this way, the missing data must be obtained directly from the party.

3.3 Are the beneficiary owner declaration and PEP declaration accepted in electronic form? If yes, with what kind of formalities?

Regarding the beneficiary owner declaration, the law states that the Financial institution needs to gather all the necessary data on beneficial owners from the competent state registry.

If it is not possible to obtain all data on the actual owner of the party from the official public register, i.e. the register kept by the competent authority of the state of residence, the Financial Institution is obliged to obtain the missing data from the original document, a certified copy of the document, or other business documentation of the relevant entity.

There is no specification whether any such declaration given needs to be in physical form or if it can be in electronic form. However, electronically signed and certified documents will probably be accepted. 

Registering beneficial owners in the Serbian central register of beneficial owners is done by registering on the Serbian business registers agency website, and can be done exclusively by entering the beneficial owners declaration and signing it electronically.

The PEP declarations are given to the Financial Institutions and they can be signed both physically and electronically, although the exact procedure depends on the internal policy of the Financial Institution.

Stefan Stanimirović