NIS Intensively Prepares for Serbia’s EU Accession

October 24, 2014

On 21 January this year, the Republic of Serbia started the accession negotiations with the European Union. The first intergovernmental conference of Serbia and the EU was held in Brussels on that day, marking the beginning of a new phase in a long and complicated process whose ultimate aim is full harmonization with the legal, economic, and social EU system, and full EU membership. The first part of this process is the so-called screening, i.e. an analytic overview of the legislation, and it includes the explanatory screening, in which the European Commission presents to the representatives of a candidate country the EU acquis communautaire in a specific chapter, and the bilateral screening, in which the candidate country presents to the European Commission its own legislation, i.e. the degree of harmonization of the domestic legal system with the EU acquis. This procedurally and organizationally highly complex process should be finalized by April 2015. NIS has been committed to the procedure of Serbia’s accession to the EU from the very start of the negotiations, and has demonstrated readiness to be actively involved in and support the state’s efforts in this process, while at the same time defending its position in matters of utmost importance for the Company’s business operations. These activities are part of the everyday operation of the Office for Cooperation with EU Institutions centring around monitoring the negotiations and modifications and upgrades of the parts of EU legislation which are relevant to our Company’s business. In this connection, the Office for Cooperation with EU Institutions as part of the Office of the CEO maintains regular contacts with experts from the competent ministries, the Office for European Integrations of the Government of the Republic of Serbia, the Serbian Chamber of Commerce, and the representatives of the European Commission, European Parliament, and other relevant parties for the purposes of timely information dissemination, promotion, and protection of our interests. The analytic part of the activities, aimed to develop a detailed analysis of the impact of EU regulation implementation on the Company’s business as well as an elaborated NIS’ positions in this respect, falls under the purview of the Standing Work Group for the analysis of EU regulations, founded as part of the Regulations Board, and managed by the Office for Cooperation with EU Institutions. In view of the fact that regulations from the area of energy and environmental protection have the greatest potential impact on our Company, expert Company representatives will be present in the negotiation groups of the Ministry of Mining and Energy and Ministry of Agriculture and Environmental Protection. Since its inception, the Standing Work Group has conducted a detailed analysis of regulations related to Chapter 15 (Energy) and adopted the Report with the analysis of risks and opportunities for NIS which result from full implementation of EU legislation. Risk quantification was carried out based on this in terms of potential loss or restricting the right to prospect and explore after 2020. Furthermore, quantification related to the identification of risks related to mandatory oil and oil product reserves is under way. Chapter 27 (Environmental Protection) imposes the obligation to carry out a great number of reforms and considerable financial investments to meet EU requirements in this area, and will be one of the greatest challenges for a country in the process of negotiations as well as for our company. This is why the Office for Cooperation with the EU has engaged consultants from reputable consultancy agencies – Hume Brophy and Jones Day -- who have drawn up a list of regulations relevant to NIS out of over 500 environmental protection regulations, and conducted preliminary analyses. The list of regulations drawn up by the consultants is the basis for further operation of the Standing Work Group, which should submit its first report before the bilateral screening, in mid-November. After the bilateral screening, detailed quantifications will ensue so that the Company is ready to influence with solid argumentation the creation and defence of the negotiation position of the Republic of Serbia.