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BRITISHNational Day

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01 NOT THE FIRST TIME TO SAY GOODBYE TO BRUSSELS

The UK will be the 4th territory leaving the EU, after Algeria (1962), Greenland (1985), Saint-Barthélémy (2012), but the first country ever to to do.

02 BY THE SEA

There is nowhere in Britain that is more than 74.5 miles from the sea.

03 BIG BELL Big Ben does not

refer to the clock, not the tower, but actually the bell. The tower is officially known as Elizabeth Tower.

04 DOWN UNDER

London is the first city in the world to have an underground subway system.

05 DISUNITED KINGDOM WHEN IT COMES TO FOOTBALL

The UK has four independent national football teams (England, Scotland, Wales and Nothern Ireland), since the FA of the UK was never established.

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YOU KNOW WHO WE ARE, RIGHT?

The UK is the only country not required to name itself on its postage stamps.


C O M M E N T

We Continue to SupportREFORMS IN SERBIA!

H .E. Dennis Keefe, British Am-bassador to Serbia, gave his opinion on the (un)surprising result of the vote on the UK’s

membership in the European Union, which resulted in the so-called Brexit, thus triggering the bumpy process of withdrawal from the EU, the first case of its kind when it comes to full member countries. British PM David Cameron announced his resignation as of Sep-tember, and now the race is on to find the new leader of the Conservative Par-ty, with four candidates currently in the running. The top choice will take over the helm of the UK Government as of 9th September, thus kick-starting a new era in British history.

According to Ambassador Keefe, “This was an important democratic de-cision of the British people in a referen-dum, and the British Prime Minister has presented his view on how the British Government should implement the aforementioned decision. The Prime Minister also made it clear that our goal is to work constructively with our friends and partners and to ensure we have a constructive relationship with them in the future”.

Ambassador Keefe also added that: “Our policy in the Balkans is based, and always will be based, on the promotion of stability, prosperity and good neigh-bourly relations. We want to see the Bal-kan countries achieve success. We want to see Serbia achieve success and pros-perity, and to that end we will continue to provide genuine support for genuine reform. We will continue to encourage Serbia along the right path, whether we are an EU member country or not”.

The first session of the European Parliament has been held following the UK referendum which saw the majority decide to quit the EU. After the recent EU membership referendum, the impli-cations for Serbia are still unknown. Some say that Brexit has not yet impact-ed on Serbia and its economy, nor that Serbia’s prospects of entering the EU will be affected much. Basically, all the financial panic lasted for just a day or so. Some say that the European Union will have to be concerned for quite a few years with the Brexit issues and forging

a new trade partnership with the United Kingdom, meaning that it will have no time for enlargement. Divergent cur-rents regarding how the European Union should look, more or less united, are emerging, while on the other hand there are opinions that the “exit strategy” for the European Union might be to inte-grate the remaining Eastern European non-members as soon as possible, in or-der to recover self-dignity and enlarge the common market area.

Reuters reports claims that difficul-ties will emerge sooner or later. “Our fear is that following Brexit the enlarge-ment process could be slowed down,” said Maja Bobić, Secretary-General of the European Movement in Serbia, a group that promotes EU values. Bobić emphasised that while the EU negoti-ates on Britain’s exit, Brussels will be focused on how the bloc can be consol-idated rather than enlarged.

Difficulties for Serbia emerged as early as 4th July, when it failed to gain the support it needed from the UK to launch the next stage in accession negotiations. Serbian officials said that technical is-sues related to Brexit were the cause. The same applies for all other Balkan countries. Bosnian-Serb Prime Minister Željka Cvijanović told Reuters that “as-piring members must accept that joining the EU will be delayed by Brexit”, mainly “because it will take several years for the

EU to consolidate and carry out the re-forms it should have done years ago to prevent such things from happening”.

According to other estimates, Ser-bia’s most important issue is whether this disorder will stop the restoration of economic activity in the EU and, indi-rectly, in Serbia too, with the accelera-tion of economic growth in Serbia having already been registered. This develop-ment can be considered pessimistic, but not impossible. According to analysis carried out by MAT, economic analysts

estimate that the probability of this sce-nario would be increased if the process is delayed and the challenges increase uncertainty and risk.

MAT emphasises that “when we dis-cuss the consequences of the UK leaving the EU, we forget that we export hardly anything there. The value of total exports

to the UK isn’t even a 20th of what is be-ing exported to Bosnia-Herzegovina.” The United Kingdom is not our principal part-ner. The withdrawals of Italy, Austria or Germany would be really problematic, while Brexit is not. The UK will be now more orientated towards the Asia-Pacif-ic region and the Americas, along with a growing African market, and therefore it could be our hub for trade with others, but we could effectively do that our-selves, since we are in good relations with Russia, the Eurasian Union and China.

Also, as B92 reports, Fiscal Council member Nikola Altiparmakov said im-mediately after the vote that “Britain leaving the EU will not force Serbia to implement additional austerity meas-ures”. However, Altiparmakov did con-cede that Brexit could lead to a mild recession in the EU, which could in turn have a negative impact on Serbia's eco-nomic growth “in the grim scenario”.

“What we have seen is a reaction in European markets that is also being felt in Serbia. It will not necessarily have a long-term impact but, in the grim sce-nario, it could cause a mild recession in the EU, which could have a negative im-pact on our economic growth,” Altipar-makov told N1 TV, noting that it is still too early to talk about this.

“If it is not a serious recession, it will not require additional austerity meas-ures. It would be sufficient to continue the measures agreed with the IMF, complete the reform of public enterprises and put in order the local self-government au-thorities, as well as everything else planned under the arrangement with the IMF for the next two years,” Altiparmakov said, according to our source at B92.

H.E. Denis Keefe British Ambassador to Serbia

Our policy in the Balkans is based, and always will be based, on the promotion of stability,

prosperity and good neighbourly relations

www.diplomacyandcommerce.rs 3 3

E C O N O M Y

Consumer Spending the MAIN DRIVER OF GROWTH

The UK recovery since mid-2009 has been relatively slow by historical standards, but faster than in most other G7 economies over this period. It is unclear whether current slowdown should be attributed to the Brexit vote or whether it is instead related to underlying weakness of the economy

T he UK ended 2015 as one of the fastest growing developed economies, with very low un-employment, robust housing

market and consumers ready to spend. For at least the first half of 2016 it will be more of the same, mostly due to al-most seven years of zero interest rates, rising living standards, low oil prices and government incentives to buy property.

However, the overall pace of economic growth slowed in 2015, and in the first quarter of 2016 economy registered just 0.4% of GDP growth quarter on quarter. Economists predict BDP growth of 2% in 2016 and 2,2% in 2017. The current account deficit has reached 7% of GDP, the highest level on record, increasing vulnerabilities.

According to the latest OECD prog-nosis, BDP growth is projected to be 1¾ per cent in 2016. Uncertainty about the outcome of the end-June 2016 referen-dum, which could lead to an exit of the United Kingdom from the European Un-ion (Brexit), has undermined growth. This projection assumes that the United Kingdom remains in the European Union, in which case growth is projected to pick up in the second half of 2016 and then stabilise in 2017.

According to PWC risks to growth are weighted to the downside in the short term due to international risks, particularly in relation to emerging mar-kets, as well as uncertainties relating to the EU referendum. But there are also upside possibilities if the global environ-ment improves and productivity growth rates accelerate in the UK.

London continues to lead the recov-ery with projected growth of around 3% in 2016 but all other UK regions should also register positive real growth of

around 1.4-2.3% per annum this year.The economy increased by 7,3%

compared to pre-downturn peak, which is 2,1% annual change.

There are now concerns that the eco-nomic recovery may be losing momen-tum. Sector performance is mixed, with services growing robustly while manufac-turing and construction are struggling.

Services account for more than 75 per cent of GDP, and is one of the few parts of the economy to have surpassed its pre-recession peak. Service output in March grew for 2.6% on the annual basis.

Manufacturing on the other hand is contributing about 10 percent of GDP to-day and is struggling to move back to its pre-crisis level. The number of people em-

ployed in the sector has declined even faster than its share of output but new technology has made the sector more pro-ductive as it focuses on higher value goods. However, annual change in industrial pro-duction output in April 2016 was 1.6%.

Construction accounts for about 6 per cent of the economy, and hasn’t re-covered from recession yet. It contract-ed by 17 per cent from peak to trough and remains below its pre-downturn peak. After a period of growth, mainly driven by housebuilding, the sector has begun falling again, but the data remains very volatile. Annual change in construc-tion output in April was -3.7%.

Before the financial crisis of 2008-09, productivity was growing steadily,

whether measured by output per work-er, output per hour worked or the effi-ciency of both labour and capital used, but since the crisis productivity has been flat. The UK has one of the least productive workforces among the Group of Seven (G7), Ireland, Spain, Bel-gium, and the Netherlands. Of these countries, only Japan has lower econom-ic output per hour worked. In 2014, out-put in the UK was 18% below the average for the rest of the G7.

The UK’s rapidly falling unemployment rate has been one of the major economic success stories of the past year. Initially led by part-timers and the self-employed, the growth has broadened to include full time employees, but the pace of improve-ment has slowed notably. At present the unemployment rate is 5.1%

Bank lending to businesses is still weak. For example annual growth rate in lending to SMEs is -0.9% while annual growth rate in lending to all businesses is 0.3%. Although interest rates are at present very low with base rate of 0,5% in case of recovery of the economy, they will increas albeit gradually.

Consumer spending has been one of the driving forces of the UK recovery. Low inflation, driven largely by falling oil prices, tough competition between su-permarkets and the strength of sterling keeping down the costs of imports, were adding to strength of household financ-es. April retail sales, grew by 4,3% on annual basis. However, there are some concerns that the source of consumer spending are either savings or loans, which might cause problems in future. Real wages, which dropped about 8 per cent since the financial crisis began, are recovering but slowly.

Manufacturing on the other hand is contributing about 10 percent of GDP

today and is struggling to move back to its pre-crisis level


C O R P O R A T E

COOPERATION OF PETERS & PETERS LONDON AND THE LAW OFFICE OF

TOMISLAV ŠUNJKA – U.K. BRIBERY ACT

S ince July 1st 2011, there have been new laws in place which can see businesses investi-gated (with collateral reputa-

tional damage), prosecuted, fined, debarred, made subject to civil recovery orders, or the subject of deferred pros-ecution agreements, if they bribe their way to profit anywhere in the world. There are both certainties and uncer-tainties for both business and compli-ance professionals. One notable certainty is that the U.K. has robust, if not always efficient, anti-money laun-dering laws and regulations, with more than 350,000 suspicious activity re-ports being made each year. Companies in the so-called "regulated sector" face prosecution for failing to report suspi-cion or knowledge of money laundering. This is one way in which intelligence reaches agencies like the Serious Fraud Office who are the lead anti-corruption prosecutors. Other intelligence arises from whistleblowing, due diligence in the M&A process and of course discov-ery by overseas agencies. The moment the mere fact of an investigation reach-es the public domain there is lasting rep-utational damage even if the outcome is favourable for the company.

As Tomislav Sunjka wrote in the March issue, the key note of any compli-

ance programme must be the preserva-tion of corporate integrity. The Bribery Act punishes both public and private bribery, the giver as well as the receiver.

In compliance with the OECD Convention, the Bribery Act specifically criminalises the bribery of a foreign public official.

The immediate effect of this radical legislation was to persuade businesses to introduce and implement bespoke compliance programmes. Since 2011 we at Peters & Peters have been called upon to advise SMEs as well as multina-tionals on the adequacy of their controls and to devise new codes of practice.

Back in 2011, U.K. boardrooms were fearful that there would be a tsunami of prosecutions and sanctions on busi-ness, which would make U.K. compa-nies globally uncompetitive. This has not been the case. For example, provid-ed corporate hospitality is kept within reasonable bounds and is not so exces-

sive as to be self-evidently a bribe, it is unlikely to attract the attention of the Serious Fraud Office. There is no obligation to prosecute, even where evidence exists, unless it is in the pub-lic interest so to do. The prosecuting authorities have issued guidance which, while promising no certainty of outcomes, encourages self-reporting by companies and total cooperation in investigation if they are to have a chance of avoiding prosecution. In-stead, they might hope to be offered a Deferred Prosecution Agreement with a financial payment, or a non-penal solution like a Civil Recovery Order. Of course, individuals who have trans-gressed remain at risk of prosecution, DPAs are not available to them. The un-certainties arise because it can be

months or years after the discovery of bribery that the company learns of the outcome preferred by the agency and, in the case of a DPA, any arrangement

is subject to judicial scrutiny.One of the problems facing those ad-

vising businesses in those circumstanc-es is how to proceed. Should there be an internal investigation, possibly in collab-oration with the prosecuting agency. Should senior executives be sacrificed or supported, and when this decision should be made. Lastly what should be done when faced with investigations in more than one jurisdiction, all with dif-ferent laws and different policies.

Some of these uncertainties could have been removed by now, had there been a significant number of cases in the last five years, but this has not been the case. At the time of writing, while there are a number of companies awaiting the discovery of their fate with at least one awaiting trial, there has so far only been one prosecution, met with a plea of guilty, one Deferred Prosecution Agree-ment sanctioned by the court and one Civil Recovery Order.

There have of course been other cas-es dealing with delinquent conduct un-der the pre Bribery Act law. Companies doing business in or with the U.K. will need to seek immediate legal assistance when bribery is suspected, let alone dis-covered, in the hope that those advising them can at least give them some idea of the possibilities or even probabilities, if not the certainties.

Monty Raphael QC Peters & Peters London

Monty Raphael QC is the author of Bribery Law and Practice published by the OUP, March 2016. He is Special Counsel at Peters & Peters and is happy to acknowledge that this article was read by two colleagues in the Business Crime Team, Maria Cronin and Nick Querée.

Those Doing Business in or With the U.K. Need to be Aware The most controversial section of the 2010 Bribery Act (the Bribery Act) is that which makes it a crime for companies to have benefited from bribery, which the state believes was preventable

The burden then shifts to the company to demonstrate that the bribery occurred notwithstanding that there were adequate procedures in place. What procedures are to be considered adequate? The U.K. Government has published guidance of a generic nature setting out six principles, which any guidance programme needs to possess if it is to have a chance of being regarded as adequate: • The procedures must be proportionate; • The company must demonstrate a top down commitment to preventing bribery; • The business must make a realistic assessment of risk; • Due diligence enquiries must be searching; • The compliance programme must be communicated throughout the business

and training must be of a sufficiently high quality and repeated at appropriate intervals; and

• Any compliance programme must be subject to constant monitoring and review.

Since 2011 we at Peters & Peters have been called upon to advise SMEs as well as

multinationals on the adequacy of their controls and to devise new codes of practice


COOPERATION OF PETERS & PETERS LONDON AND THE LAW OFFICE OF

TOMISLAV ŠUNJKA – U.K. BRIBERY ACT

F rom July 1st, 2011 the answer is YES. I would like to explain the public function or activities to which bribe relates. The bribe

relates to any function of a public mat-ter, any activity connected with a busi-ness, trade and professions, any activity performed in course of a person`s em-ployment and any activity performed by or on behalf of a body of persons, cor-porate or unincorporated. A person – public official or another by his request is guilty for bribe if requests or accepts a financial or other advantage intending that, in consequence, perform a relevant function or activity improperly.

It is important to say that function or activity is relevant even if it has no con-nection with the U.K., and is performed outside the U.K.

Who are foreign public officials? “Foreign public official” is an individual who holds a legislative, administrative or judicial position of any kind, whether appointed or elected, of a country or territory outside the U.K., exercises pub-lic function, for or on behalf of a country or territory outside the U.K., or for any public agency or public enterprise of that country or territory, or is an official or agent of a public international organ-ization. Hence Serbian appointed or elected individuals, too?

Does business people and commer-cial organizations have obligation to prevent bribery? Absolutely!

Commercial organization is guilty for bribe if its legal representative and re-sponsible person fails to prevent bribery and/or bribes another person intending to obtain or retain business for commercial organization, or to obtain and/or retain an advantage in the conduct of business.

In own defense and to prevent the bribery, commercial organization is obliged to place adequate procedures designed to prevent persons associated with them from undertaking such con-duct and bribes.

As Mr. Raphael Monty QC said, those companies – commercial organizations commits criminal act if they have bene-fit from bribery. Companies have burden of proof to demonstrate that they have adequate policy and procedures.

Since 2011 Law Office of Tomislav Šunjka is engaged to advise companies who planed and performed business from U.K. to Serbian and Balkan market on the adopting adequate policy and pro-cedure, internal investigation and proce-dure as a consequence of this as a criminal procedure, damage procedure, employment issues and etc. We did it

through assessment of risks, due dili-gence, integrity check and compliance programs. U.K. companies from regulat-ed sectors (financials services, pharma-ceutical sector, energy sector and others) were especially interested. Par-ticular difficulties occur in cases where there are more than two jurisdictions. Due to a favorable Agreement on avoid-ance of double taxation between Serbia and the Netherlands, the majority of in-vestors, commercial organizations and companies from U.K. operating in Serbia,

form a holding company in the Nether-lands, which then operates in Serbia. This type of complex organizational structure requires a more complex legal support. This type of structure is also used by the institutional investors as well as inves-tors that have the status of an interna-tional organization such as EBRD and other. Usage of this type of structure is legal and legitimate, yet, I have to point out that U.K. Bribery Act also has effect towards structures which use more than one jurisdiction for doing business. Hence, prevention and adequate policy and procedure are absolutely necessary

for doing integrity business in each level of this kind of structure.

Serbia does not have such a relevant Law or Act. Criminal offence of bribery is regulated in Serbian Criminal Code ("Of-ficial Gazette of RS", No. 85/2005, … 108/2014). Criminal responsibility of com-panies as legal entities is regulated by a special law – Commercial offences act ("Official Gazette of the SFRY", Nos. 4/77 … 3/90, "Official Gazette of the FRY", Nos. 27/92…64/2001 and "Official Ga-zette of RS", No. 101/2005 - other law). In my opinion, in this phase of development of legal system in Serbia and its harmo-nization with internationally recognized legal standards and standards of EU, it is very important to adopt a special, elabo-rated law, which would define the offenc-es of bribery and which are the functions or activities to which bribery relates. When looking at entire criminal legisla-tive in Serbia, it is needed to say that appropriate legal institutes and instru-ments appear in several sources and laws, yet their usage is not primary. Primary responsibility of an individual is still wide-spread, while victims are usually referred to civil procedure, which can last for years after the criminal procedure. Criminal li-ability of companies occurs in very few cases in practice and there is no publicly available records and practice of such cases. Also, there is no official statistics of such cases. This can have two mean-ings: that the statistics or cases register does not exist, or that there are no cases of foreign investment/investment bribes, or that said cases exist, however they are not processed for different reasons.

It is desirable to establish a case da-tabase similar to one of the World Bank, where the cases of corruption, explana-tions and way of completion of the case, sanctions, enforcement, fines and other, would be presented to public. This would reduce the arbitrariness and establish binding jurisprudence which would have its origin in the new law / act.

Tomislav Šunjka Law office of Tomislav Šunjka

Tomislav Šunjka is a regional representative of Anti-Corruption Committee of the International Bar Association (IBA) and country

member of ICC FraudNet asset recovery network.

U.K. Bribery Act – Does it Apply to Serbia, Serbian Public Officials and Businessmen at All?In own defense and to prevent the bribery, commercial organization is obliged to place adequate procedures designed to prevent persons associated with them from undertaking such conduct and bribes

Since 2011 Law Office of Tomislav Šunjka is engaged to advise companies who planed

and performed business from UK to Balkan market on the adopting adequate policy and procedure


E C O N O M I C C O O P E R A T I O N

Growing Interest Among British COMPANIES IN SERBIAAlthough the volume of trade and British investments in Serbia have been relatively moderate, Serbia’s political and economic stability has contributed to growing interest in cooperating and investing among British companies. Both the 2015 and early 2016 trends testify to this

T he UK and Serbia have tradition-ally good bilateral relations, al-tough economic cooperation between the two countries has

been relatively moderate. However, mu-tual trade and new investments by British investors have been on the up.

Budding political and economic rela-tions are partly due to Serbia becoming an EU candidate, which resulted in Brit-ish companies expressing greater inter-est in the Serbian market. There is growing interest among investment funds to invest in Serbia, as well as in-terest in cooperating with Serbia among business associations from var-ious British counties.

In 2015, trade between the two coun-tries reached its peak, as did exports. The deficit was at its lowest ever and the export to import ratio was the highest in the last 15 years. Total trade amounted to €377.1 million, with a Serbian deficit of €22.5 million and an export-import ra-tio of 88.7%. Total trade grew by 26.6% compared to 2014. Serbian exports to the UK were up by 53.2%, marking a 9.7% rise relative to 2014. In 2013, for the first time ever, the value of trade be-tween the two countries exceeded €300 million. In 2014, the value was €2 million less than in 2013, while in 2015 it was the highest ever.

In the first four months of 2016, the total value of trade stood at €127 million, with Serbia’s exports worth €71.5 million and imports €55.5 million. The €16-mil-lion surplus in favour of Serbia is a nov-elty in trade between the two countries.

In terms of the structure of goods ex-ported to the UK in 2016, Serbia mostly exported products classified on the ba-sis of their material (€62.3 million), ma-chines and transport devices (€42.3 million), food and live animals (€27 mil-lion) and miscellanous finished products

(€24.3 million). In 2015, Serbia mostly imported from the UK machines and transport devices (€63.8 million), chem-ical and related products (€45.4 million), finished products classified on the basis of their material (€29.8 million) and products / transactions not mentioned in the SITC (€27.3 million).

The biggest export growth, recorded in 2015, was attributed to chemical prod-ucts (526.3%), inedible crude materials except fuels (370.5%), food and live ani-mals (104.1%), machines and transport de-vices (98.7%) and miscellanous finished products (74.3%). In terms of imports in 2015, almost all categories recorded growth as following – products and trans-actions not mentioned in the SITC (53.5%), animal and vegetable oils, fats and waxes (38.4%) and finished products classified on the basis of their material (34.7%).

According to data collated by the Na-tional Bank of Serbia (using the old methodology), total British net direct cash investments in Serbia in the period from 2005 to 2013 amounted to €289.9 million. This makes the UK the 14th big-gest investor in Serbia. In 2014, NBS data collated using the new methodolo-gy showed that the UK invested €57.3 million worth of net investments in Ser-

bia in 2014 and €15.7 million in 2015.British investments in Serbia mostly

involve institutional investors (invest-ment funds), which were also active dur-ing the privatisation period from 2001 to 2005. At a later stage, these funds sold the companies they bought here. For instance, Midland Resources Hold-ing Ltd sold the Stari Grad Hospitality Company and the Port of Pančevo, while Ashmore Fund sold Carnex. Many of the investment funds founded with British capital that are still active in Serbia are registered in Switzerland, Cyprus and The Netherlands (tax havens), so the real value of British investments to date definitely exceeds the value stated by the NBS (in 75% of cases it has been British funds and banks that have bought securities at auctions).

British investors are present in var-

ious sectors – from the tobacco indus-try, telecommunications and real estate, to financial mediation and the automobile industry.

One of the biggest British invest-ments in Serbia is British-American To-bacco (BAT), which acquired the Vranje Tobacco Company in 2003, making BAT one of the most important foreign inves-tors in Serbia and the single biggest Brit-

ish investor in the country. To date, BAT has invested over €200 million in Serbia, of which €115 million was spent on buying and modernising the tobacco factory in Vranje, which now produces some of the company's leading global brands. Corpo-ration Agena Technology was founded by British company Albon Engineering & Manufacturing Plc. in Šimanovci in 2005. Albon produces car parts and machines for the production of car parts. Serbia is the third country in the world, after the U.S. and the UK, where the company has opened production facilities. The facto-ry in Šimanovci, spanning 7,000 square metres, produces machines for connect-ing rods and crankshafts for diesel en-gines used in Volvo, Renault, Iveco and Caterpillar lorries, as well as inboard en-gines. Everything produced here is ex-ported to the U.S. and the UK.

British companies recognise Serbia as an investment destination for real es-tate, infrastructure, car parts’ produc-tion, telecommunications and the pharmaceutical industry. They are also interested in investing in the service sector, namely legal services, financial services, public-private partnerships, public relations, engineering, waste management and energy efficiency. Ac-cording to British companies, the sec-tors best suited for cooperation are energy, environmental protection, the automobile industry (car parts), agricul-ture, IT, spas, the textile industry, mining and infrastructure.

Up to 2013, British companies spent €79.43 million on different assistance programmes in Serbia, including public administration reform, macroeconomic and fiscal policies & security, safety, ju-dicial matters and others. As part of a coordinated EU effort, the British gov-ernment provided assistance to Serbia during the catastrophic floods of 2014

In 2015, trade between the two

countries reached its peak, as did exports. The deficit was at its lowest ever and the export-import ratio was the highest for the last 15 years

www.diplomacyandcommerce.rs 37

I N T E R V I E W

Friendship LeadsTO BUSINESS OPPORTUNITIES

J ames Gunn one of the founders of The British Society of Serbia in this interview speaks about how the Society contributes to

building friendships, charitable activi-ties and business opportunities be-tween two countries.

Those with experience working with you described you as: "In an industry overrun by people executing stand-ard communications strategies with few results, I found working with James to be a welcome breath of fresh air". Do you think that many profes-sionals today are overpromising and underachieving?— No more or no less than anywhere else. After living and working in Cape Town, Bangkok, Madrid, New York, Brussels and now Belgrade for global brands and lead-ing public affairs consultancies, I can say there are two groups of professionals: those ready to cut corners and those ready to excel. Overpromising and under-achieving are in reality questions of in-tegrity, both personal and professional.

We have wonderful professionals in Serbia who would put many to shame in London or NYC. But that is just one part of the equation. Due to a number of lim-iting factors – such as small budgets, lack of experience and so on – business-es often compromise between hiring a professional and a cheaper option. This can encourage all sorts of less-than-pro-fessional behaviour which diminishes the chance of things being done proper-ly. But that is the way it is and there’s no point lamenting it.

The important thing is to say things how they are, expect high standards and maintain a sense of humour. A pro-fessional is not a mere executive, they aim to change the game, provide prag-matic counsel, defend their clients’ in-terests vigorously and in a true sense of partnership.

The British Society of Serbia is a vol-untary, not-for-profit association of expatriates, diplomats, and cultural and educational professionals with links to the United Kingdom. How can the Society help strengthen political, cultural and business ties with the UK?

— We do a lot. I funded the establish-ment of the Society as such organisa-tions crucially bridge a gap that developed since the 1990s. Our 1,500 members from the UK, Commonwealth and Serbia support each other in provid-ing advice and practical support. We fundraise for charity including the Red Cross and Blazing to Serbia, help mem-bers find employment and develop busi-ness opportunities. We educate new arrivals in Serbia about how to settle into life here and learn about their new home. Most importantly, we build friendships with our Serbian hosts, many of whom have studied and worked in the UK.

From friendship comes business. We also serve as a first point of contact when business leaders investigate new locations to expand their operations. In this capacity we have played a pivotal role in helping certain investors decide to move to Serbia as well as in providing export advice to Serbian entrepreneurs. It is very reassuring to see Brits and Serbs share the same mission.

We are particularly interested in the Society’s involvement in projects in Serbia. What have you done so far and what are your concrete plans?— Serbia and the UK have a long history together. At this time, for example, we re-member the Great War and the British nurses and doctors that came to help Ser-bia, and refugees hosted in Scotland one hundred years ago. We are highlighting such moments and use them as a corner-

stone to strengthen the British-Serbian relationship in this century. Dr Elisabeth Ross, Scotland’s first female physician is buried in Kragujevac. Therefore, our events are used to fundraise for the Red Cross in Sumadija in memory of the med-ics that served there.

We also work to introduce Serbian

businesses and their services to mem-bers of the foreign community in Ser-bia, provide free-of-charge advice to young Serb talent interested in contin-uing their education in Britain or explor-ing internships in UK companies. The past few months saw British citizens

seeks advice on how to vote in the Brex-it Referendum. We have been operat-ing for a year and so our intention is to increase these activities, hold more regular fundraising and networking events, promote Britain in Serbia, and provide a hub to support the activities of likeminded organisations.

How much could the foreign experi-ence that is brought by the British So-ciety of Serbia contribute to positive change in the overall business and cultural climate in Serbia, and to the improvement of people’s attitudes to-wards Western and British values?— The Society is not simply an organisa-tion representing foreign residents in Ser-bia, some of whom live in an expat “bubble” with little interaction with their Serbian hosts. We have many Serbian members who have held responsible positions in the UK and are bringing their experience of British business and culture back to Ser-bia. So, I would suggest that these are our biggest ambassadors. It is a two way street as we have much to learn from each other. We will monitor with interest the UK’s plans to exit the European Union and the partnership it will offer to accession countries like Serbia. Both Britons living in Serbia and Serbs with UK connections will be seeking much reassurance in the months and years ahead.

The Society serves as a first point of contact when business leaders investigate

new locations to expand their operations, and it has played a pivotal role in helping certain investors decide to move to Serbia

The British Society of Serbia Society is not simply an organisation representing foreign residents in Serbia, living in the “bubble” with little interaction with their Serbian hosts. On the contrary, it backs its 1,500 members from the UK, Commonwealth and Serbia by providing advice and practical support and build friendships with Serbian hostsJames Alistair Gunn Vice-Chair, British Society of Serbia


C O R P O R A T E

G laxoSmithKline’s priority is to transfer the results of our glob-al, 150-year-old scientific herit-age to Serbia which has greatly

contributed to improving health, life and future of millions of people worldwide – says Marija Krstić, the newly appointed General Manager of GlaxoSmithKline (GSK) Serbia and Montenegro.

We have read recently that, in terms of use of innovative medication, Ser-bia is seriously lagging behind other European countries. What can be done to rectify this situation consid-ering the very limited budget of the Serbian healthcare system?— We should bear in mind that good health is a basic human right. Further-more, health significantly affects eco-nomic and business development – only

a healthy population can be a productive population. Hence, it is understandable why healthcare is mentioned in at least four goals of the 2020 European Devel-opment Agenda and why it is one of the key chapters in Serbia’s accession nego-tiations with the EU.

As an innovative, global pharmaceu-tical company, which has investments in research and development of new med-

icines and vaccines at its core, we are quite aware of how much we are contrib-uting to improving health and quality of life of millions of people worldwide, in-cluding Serbian citizens. The value of in-novative medicines is primarily reflected in their substantial contribution to longer life expectancy and mortality re-duction. According to the data collated by the OECD from 30 of its member countries, innovative medication con-tributed to 73% of the actual increase in life expectancy at birth while the re-maining 27% is attributed to education, reducing risk factors, availability of healthcare and other. There is no substi-tute for long-term health outcome, and this outcome is based on innovative pharmaceutical products and their avail-ability to patients.

Thus it is our priority in Serbia to make innovative therapy available to everyone who needs it regardless of where they live or their ability to pay or

ability to pay for it. In the last five years, marketing authorization was granted for over 20 new medications, vaccines and consumer healthcare products in Serbia. In the following period, we expect to pro-vide patients in Serbia with access to additional innovative therapies, namely in respiratory, immunization and HIV area, where we are market leaders.

However, we are aware that we op-

erate in an environment where health-care budgets are exposed to great pressure. This is true not only of Serbia, but also of entire Europe. Short-term and irrational healthcare cuts cause only negative outcome for the popula-tion’s health and sustainability of the healthcare system which, in turn, is closely related to the country’s reforms and economic development.

According to the results of the latest survey about Serbia’s healthcare sys-tem, conducted by the analytical team from the London-based magazine The Economist, our country is at the very bottom in Europe in terms of availability of therapies despite Serbia having the biggest healthcare spending per capita in the region. Patients are facing delay in access to innovative medicines. To corroborate this, let me just say that very few medicines, with limited access for patients, entered the Reimburse-ment List while, for instance, Bulgaria broadened its national list with more than 40 and Croatia with over 25.

Under such circumstances, I think that the Government's decisions need to be based on the value they bring to healthcare users. Investments in preven-tion and adequate innovative therapies should be at the core of the strategies for healthcare institutions. However, what I am happy about is the govern-ment’s resolution to bring Serbia closer to the EU which will positively reflect on healthcare too in terms of the European regulation and faster, improved proce-dures that will give patients a direct ac-cess to innovative medicines, will improve clinical outcome and will give the citizens of Serbia an equal opportu-nity to have access to optimal treat-ment. I salute any government initiative in the previous period and hope that the

According to the data collated by the OECD, innovative medication

significantly contributes to the actual increase in life expectancy which is why we have been trying to make them available to every Serbian citizen in need

Only Healthy POPULATIONCAN BE PRODUCTIVE

We have been investing a lot of effort into providing Serbian citizens with access to the cutting-edge therapy in order for them to have the same healthcare standards as people in the EU or U.S.. However, we can succeed in this only if we partner with all healthcare stakeholdersMarija Krstić GlaxoSmithKline (GSK)


ongoing healthcare reforms would con-tinue with the new government, includ-ing the implementation of the recently adopted healthcare laws.

Which areas does GlaxoSmithKline cover with its medication and thera-pies which are essential for improving the quality of life of patients in Serbia?— GSK has a very diverse portfolio in Serbia where we have been operating for over two decades. A long tradition in successfully treating respiratory dis-eases and improving the patients’ qual-ity of life makes us a recognisable leader in this area. We are very eager to see the launch of the new medicine for respiratory diseases and we do hope that patients in Serbia will be able to ex-perience the benefits of this therapy considering the burden of respiratory diseases in our country.

Immunisation is also an area in which we are global leaders. As one of the world leading vaccine manufacturers, GSK pro-duces 30 different vaccines that are a part of the immunisation protocols in 182 coun-tries. We have recognised the state’s in-terest in long-term investing in prevention and the health of its population. The steps that the state has made in the last few months in making the latest vaccines available to children in Serbia seem en-couraging. I am confident that pharma-ceutical industry can cooperate with the state authorities in devising business models that would boost the efficiency of the healthcare here.

In the HIV area, GSK and its partners have joined their expertise and resourc-es to launch ViiV Healthcare, a global

company specialised in treating HIV with the goal of advancing the treat-ment and care people living with HIV. The result of this is the latest therapies that have demonstrated their superior-ity in treating the disease which has lead to an exceptionally important im-provement in the quality of life of the

people with HIV. Concurrently, we have been implementing the Positive Action programme which assists the HIV pa-tients through supporting numerous programmes and initiatives in their lo-cal communities.

Apart from the aforementioned, GSK’s portfolio in Serbia also comprises of medications that are used in treat-ment of systemic infections, osteopo-rosis, rare diseases, and the diseases of the nervous and genitourinary system. We also produce medications for which patients don’t need prescription, oral hy-giene products, cosmetics and dietary supplements. Some of our brands, like Panadol, Coldrex, Sensodyne, Paradon-tax, Aquafresh and a few others, are leading brands in Serbia.

Thanks to our cultural heritage and our commitment to research many of our products have completely trans-formed the approach to treatment and have improved medical practices. Our success depends on our ability to re-search and develop innovative medi-cines and vaccines in order to help change lives and the future of millions of people worldwide. Over 13,000 sci-entists are working on accomplishing this goal while using the most advanced

scientific resources in order to discov-er and develop new treatments. This is a complex process which lasts between 12 and 15 years and requires invest-ments of over £500 million in single medicine alone.

Thus we continue working on devel-oping the medicines of the future and

finding new ways to make them availa-ble to anyone who needs them.

Considering that you have been ap-pointed GM of GSK Serbia only recent-ly, could you tell us what are you going to focus on in the Serbian market?— Our priority in Serbia is to transfer the results of our global, 150-year-old scien-

tific heritage here because it has greatly contributed to advancing health, life and future of millions of people. This means investing a lot of effort into making inno-vative medicines available to everybody. By doing so, our citizens would have ac-cess to the latest therapies and would be able to have the same standards of healthcare as people in the EU or US.

Still, we are aware of the fact that we cannot travel this road alone. All health-care stakeholders need to focus on pa-tient needs, and we can achieve best results only if we act in partnership. From the standpoint of a company which has been operating in Serbia for over 20 years, I think that, despite of the instability of this market, Serbia has suf-ficient capability, expertise and invest-ment opportunities.

In accordance with that, GSK has adapted its pricing policy to the local market and our aim is to improve the co-operation with the state and the net-work of healthcare institutions through an values and transparent approach. Owing to our experience from over 100 countries that we operate in, GSK has the capacity to devise long-term, sus-tainable solutions which would balance

out financial investments and clinical outcomes in the partnership with the state. The essence of the healthcare, which is entirely focused on patients, is to have a system that, in practice, func-tions in a way to completely meets pa-tient’s needs.

In the coming period, we will continue to improve our business based on our

values, transparency and integrity in re-lation to our customers. In Serbia, as elsewhere in the world, we are working hard to transform GSK in a more com-petitive and efficient company, changing and adapting our business model to bet-ter meet society's expectations.

What CSR activities does GSK carry out in Serbia?— Among the reasons why I am proud to lead GSK in Serbia and Montenegro is a significant value that this company brings to the society. I am so glad to have the opportunity to see many changes and the progress in the company wheth-er we are talking about efforts to im-prove the availability of our medicines and vaccines, or continuous investing in local community through CSR projects, or the evolution of our operational mod-el into a structure that is better integrat-ed in local environment.

Our comprehensive approach to cor-porate social responsibility is based on four strategic pillars – health for all, eth-ical business, our people and our planet.

It is in CSR that GSK has become re-congisable in Serbia. In the last few years, our company was the recipient of 10 pres-tigious awards for philanthropy. Last year alone, GSK received three awards – the Trag Foundation’s Virtus Award for long-term partnershp between business and non-profit sector, the Gold Plaque from the UEPS for the best charity event in the COPD awareness campaign and the award from the Responsible Busi-ness Forum for the innovative approach to volunteering, commitment and good influence in pro bono support.

GSK adapts its pricing policy to the local market and our aim is to improve the

cooperation with the state institutions and the network of healthcare institutions through an ethical and transparent approach


T O U R I S M

Marriage of Tradition andMODERNITY

T here are many spots in the United Kingdom that connect us to the world of literature, the world of film and the world

of music. Indeed, the Brits are masters of the Universe when it comes to popular culture and they have managed to “sell their story” so convincingly that, if you think carefully, probably the majority of the scenes you’ve memorised were ac-tually shot in the UK. “The Highlander” took us to rocky Scotland, “Trainspot-ting” took us to underground Edinburgh, Oasis took us to Manchester and The Beatles to Liverpool. The lavish country houses are well known from the film ad-aptations of Jane Austen’s books, Hugh Grant funnily climbed up the hill and got back from the mountain in Wales, Dr Who took us to some distant shores of “slate grey Victorian sky”, as well as Morrissey (who actually coined the expression). London is the world’s capital of music, street fashion, and urban style, where we walk in the shadows of David Bowie, Sherlock Holmes or Dorian Grey. We all want to see the United Kingdom, right?

Well, every corner has its thrills, starting from foggy London, where “Eng-lish summer rain seems to last for ages”,

as Brian Molko famously said, but we crave it. Maybe the rain endures and sometimes the sky is grey, but that is why the grass grows so lavishly bright green, and the detective cases of Her-cule Poirot took us to some of the green-est pastures and curvy Celtic roads of Central and Southern England. If you like pop music, then you want to see Man-chester or Brixton. If you like the flour-ishing art scene, then you want to go to

Bristol. The temple of tennis is, of course, in Wimbledon, where the only of four world Grand Slams is still played on

the original grass surfaces.Maybe you are more pastoral and

want to go to some countryside areas? No problem! The Cotswolds looks like a place frozen in time, with stone houses made from local Cotswolds stone. The nearby Stonehenge takes us to the world of ancient men and modern druids, while the mud and boots of Glastonbury connect this area to the modernity by way of the world’s most famous music festival. And, of course, who hasn’t heard of Oxbridge? Oxford and Cambridge might not be the two universities in the world with the best capacities or ratings, but they certainly make you dream about visiting them.

Those who like pure nature flock to Snowdonia or the Lake District, or

Northern and Western Scotland, where the mountains, lakes and seashore mix with colourful houses. And Scotland is also home to the world’s most famous monster: the charming “Nessie” from Loch Ness. The Giant’s Causeway in Northern Ireland will transport you to the world of Celtic legends. The story goes that Irish giant Fionn mac Cumhaill (Finn MacCool) was challenged to a fight by Scottish giant Benandonner and built the causeway across the North Channel so that the two giants could meet. Only the Elves are missing.

This is a country we all know so much about, and that is why it is a country that receives 36.115 million visits a year (in 2015), generating some 22.072 billion U.S. dollars. I guess we would all like to be among that 36+ million.

This is a country we all know so much about, and that is why it is a country that

receives 36.115 million visits a year (in 2015), generating some 22.072 billion U.S. dollars

There are not many places in the world where a period drama can be shot so convincingly as in the UK. And there is no place in the UK that is a long way from the sea. Lots of them are strikingly green. There are so many castles and… Oh, stop! You convinced me. I want to go to the UK as a tourist!

Text: Žikica Milošević

Bibury Cottages in the Cotswolds Giant's Causeway

Durham Millburngate Bridge

The Royal Pavilion Brighton


1 6 t h J U N E 2 0 1 6

THE QUEEN’S BIRTHDAY in Belgrade

T he British Embassy in Belgrade yesterday celebrated the 90th birthday of Queen Elizabeth II. The hosts of celebrations of the Queen’s official birthday in Belgrade were His Excellency the British Ambassador to Serbia

Denis Keefe and his wife Kate. This year’s Queen’s Birthday cele-bration was dedicated to the celebration of 400 years since the death of writer William Shakespeare. At this year’s celebration of the Queen’s official birthday of the national anthem of Great Britain and the Republic of Serbia were sung by the “Stanislav Binički” Choir of the Ministry of Defence and the Army of Serbia.

Numerous guests from the public, cultural and political life of Serbia tasted the finest wines and beers and spirits. Otherwise, Her Royal Majesty Queen Elizabeth II for 90 years has been cel-ebrating her birthday on 21st of April. However, the central cele-bration of the Queen’s official birthday is traditionally organised in the first, second, or sometimes third Saturday in June.

H.E. Denis Keefe with his spouse

H.E. Giuseppe Manzo, Italian Ambassador to Serbia and Maja Gojković, President of the Assembly

Chief of General Staff of the Serbian Army, Ljubiša Diković and Zoran Đorđević, Defence Minister

Ambassador Keefe in conversation with Nebojša Stefanović, Serbian Minister of Interior Affairs

Marija Desivojević (Delta Holding), Miroslav Mišković (Delta Holding), Nikola Papak (Delhaize) and Veljko Lalić ("Nedeljnik")H E French Ambassador Christine Moro with her husband

british national day

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