Republic of Srpska Law on Gifts by Publicly Owned or Controlled Enterprises

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Law on Gifts by Publicly Owned or Controlled Enterprises in the Republik
a SrpskaOffice
of the High RepresentativeHR`s Decisions
Thursday, March 06, 2003

Decisions in the Economic Field
Law on Gifts by Publicly Owned or Controlled Enterprises in the Re
publika
Srpska

Article 1
Objective and Scope of the Law
This Law sets out the limits and procedures for a publicly owned o
r
controlled enterprise (as is defined hereinafter) to make gifts.
Article 2
Definitions
For the purposes of this Law, a publicly owned or controlled enter
prise
shall mean an enterprise in which Republika Sprska government,
governmental bodies, municipalities, or cities either (a) wholly
own the
enterprise; or (b) own more than fifty (50) percent of the sha
res or share
capital of the enterprise; or (c) have less than 50% of the shar
es or
share capital but control the management and/or supervision of the

enterprise (hereinafter referred to as “Public Enterprise”)
.
For the purposes of this Law, a transaction at an undervalue is on
e in
which the Public Enterprise makes a disposition (including a disp
osition
by the sale of goods or services) on terms (i) where the sale p
rice is
below market value and the terms of such sale are intended to favo
ur the
recipient of the disposition or other third party and cannot objec
tively
be said to be for the benefit or in the interests of the Public
Enterprise; or (ii) where a Public Enterprise makes a payment wh
ich is not
for goods or services provided to it by the recipient of the payme
nt.
Article 3
Limits for making gifts
1. A Public Enterprise may only make gifts out of
profits
and such gifts may only be made for the purposes of sports, cultur
e,
social welfare and humanitarian purposes.
2. A transaction at an undervalue made by a Publi
c
Enterprise shall be considered a gift.
3. A gift by a Public Enterprise shall only be co
nsidered
validly made where the provisions of this Law are fully satisfied.

Article 4
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Annual Allocation for gifts
1. In each financial year, the Management Board of the Public

Enterprise based on the profits disclosed in its audited financial

statement prepared in accordance with the applicable laws, shall d
ecide on
the amount (if any) to be allocated in its budget for gifts in t
hat
financial year. In deciding on the amount to allocate for gifts,
the
Management Board shall have due regard to the overall financial
commitments of the Public Enterprise in the financial year in whic
h the
allocation is made including (i) amounts required by the Public
Enterprise
in that financial year for fulfilling any business plan of the Pub
lic
Enterprise; and (ii) the capital and other investments required
for the
proper maintenance and/or growth of the Public Enterprise.
2. Upon the Management Board of the Public Enterprise decidin
g on the
amount to be allocated for gifts in any one financial year, the Mi
nistry
or other government/public body under whose portfolio the Public
Enterprise falls, shall be required to approve the annual allocati
on for
gifts in the budget of the Public Enterprise.
3. Where the Public Enterprise proposes to increase the annual
allocation referred to in paragraph 1 of this Article, for such in
crease
to be valid, it must have the unanimous approval of the members of
the
Management Board and based on that decision, the Ministry or other

government/public body under whose portfolio the Public Enterprise
falls,
shall make a determination as to whether such increase in allocati
on is
justified (in light of the financial standing of the Public Enter
prise)
and thereafter, where it deems fit, may give its consent to the pr
oposal.
Article 5
Procedures for making gifts
1. The Statute of the Public Enterprise must expr
essly
permit gifts to be made.
2. The beneficiary of such gifts must be a lawful
ly
constituted body with legal personality recognised under the laws
of BiH
and such gifts must not be for political party financing or politi
cal end.
3. The Public Enterprise must be solvent at the t
ime of
making the gift. This must be certified by an independent auditor
or an
auditor authorized under the Law on Auditing the Public Sector of
Republika Srpska (Official Gazette of Republika Srpska, 18/99).
The
auditors shall issue a Certificate of Solvency for these purposes
and
shall make a declaration therein as to whether or not, in the fin
ancial
year concerned, the proposed gift is within the annual allocation
provided
for under Article 4 hereof.
4. For a gift to be validly made, it must have th
e
unanimous approval of the Management Board of the Public Enterpris
e. This
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approval must be evidenced by a written decision of the said Manag
ement
Board and clearly identify the proposed beneficiary, the amount of
the
gift and the justification for making the gift.
5. No member of the Management Board shall partic
ipate in
a decision to make a gift where s/he has a personal interest in th
e
matter.
6. Where the Public Enterprise is not privatized
and
transformed into another type of enterprise under the applicable l
aws, the
Ministry or other government/public body under whose portfolio the
Public
Enterprise falls, shall be required to approve the decision of the

Management Board to make such a gift.
7. The Ministry or other government/public body r
eferred
to in the preceding paragraph may only approve the gift where (i)
it is
presented with a Certificate of Solvency; and (ii) it is present
ed with
the written unanimous decision of the Management Board; and (iii)
it is
satisfied that the gift is to a lawfully constituted body and for
lawful
purposes and based on the financial standing of the Public Enterpr
ise,
commercially justified.
8. After the Public Enterprise is privatized and
transformed pursuant to the applicable laws, the Ministry or other

government/public body referred to in paragraph 6 of this Article,
shall
not be required to approve the gift but the Management Board shall
put the
decision on any gifts to the General Assembly of Shareholders for
approval. The Decision so put shall be considered adopted by the G
eneral
Assembly of Shareholders where seventy-five (75) percent of thos
e present
and voting approve the decision.
9. Before the transfer of any gift to the benefic
iary
identified in the decision on the gift, the Decision on the propos
al to
make a gift shall be published in the Official Gazette of the Repu
blika
Srpska. A period of one month shall have elapsed between the publ
ication
in the Official Gazette and the transfer of the gift to the benefi
ciary.
10. At the end of each financial year, the Enterprise
shall
disclose to the public in at least one newspaper widely distribute
d in the
Republika Srpska, full details of all gifts made by the enterprise

including the total amount made in that financial year and the
beneficiary/ beneficiaries of same with a statement of
compliance/non-compliance with the annual allocation provided for
in
Article 4 hereof
Article 6
Individual Responsibility for breach of the provisions of this Law
The members of the Management Board shall have joint and several
liability, for any breach of the provisions of this Law. In the e
vent
that a Public Enterprise makes a disposition by way of gift, contr
ary to
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the provisions of this Law, and without prejudice to any other mea
sures
prescribed under the applicable laws, each member of the Managemen
t Board
shall be responsible for reimbursing all amounts unlawfully dispos
ed of by
the Public Enterprise by way of gift with a statement of complianc
e with
the annual allocation provided for in Article 4 hereof.
Article 7
Entry into force and Publication
This Law shall enter into force immediately.

Emerika Bluma 1, 71000 Sarajevo; Tel: +387 33 283 500, Fax: +387 3
3 283
501www.ohr.int

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