The Serbian Assembly discussed the Agreement on Energy Cooperation between Serbia and the United States, signed exactly a month ago in Washington. This pertains to the Draft Law on the ratification of the agreement between the Government of the Republic of Serbia and the Government of the United States regarding strategic cooperation in the energy sector. The proposal for this law comes from the Serbian government, and its adoption is intended to confirm the signed agreement and initiate its implementation.
The agreement was signed in Washington by José V. Fernández, Under Secretary for Economic Growth, Energy, and the Environment, and Marko Đurić, Serbia’s Minister of Foreign Affairs. The contents of the agreement have now been made public, revealing mostly brief notifications about the commitments made in Washington.
Analysis and contradictions
Nemanja Nenadić, Program Director at Transparency Serbia, notes that the document contains certain contradictions. He suggests that its ratification in parliament could raise questions about its application.
Document contents
The agreement states that both parties will collaborate on organizing workshops, meetings, seminars, and conferences related to energy, including those aimed at raising public awareness about clean energy projects in Serbia. However, these projects must be of interest to U.S. companies.
Additionally, there is a provision for U.S. companies to assist in finding financing for such projects. A particularly notable legal aspect is related to the supplier selection process for energy projects.
In Article 4 of the Agreement, it is stated that “the supplier selection process for the implementation of activities and projects proposed by this agreement will be conducted by the Government in accordance with the law governing public procurement.”
Working group
Serbia will also establish a Working Group composed of members of the Serbian government. The agreement specifies that “no individual, agency, or official from the U.S. can participate in the Working Group.”
After identifying a project, Serbia will issue a public invitation to inform U.S. companies interested in bidding for the project’s implementation.
“The U.S. cannot act as an intermediary or representative for any project, nor can they forward business proposals or related documentation concerning any project in Serbia,” the Agreement states. It further clarifies that the Working Group will select one or more bidders to negotiate and/or participate in competitive bidding for each project from among the companies that responded to the public invitation, in accordance with Serbian public procurement laws. The U.S. will not have any role in selecting suppliers.
Legal concerns
Nenadić explains to Forbes Serbia that while the decision to send public invitations to U.S. companies is not controversial, the formation of the Working Group responsible for selecting among bidders raises issues.
“This is not in line with the regulations governing public procurement, which the Agreement itself emphasizes. The law stipulates a commission, not a working group composed of Serbian government members,” Nenadić clarifies.
He adds that the wording of the Agreement could be interpreted as allowing the Working Group to choose contractors only from U.S. companies that responded to the previous public invitation sent through relevant authorities in the U.S. However, it could also be interpreted to allow participation from other companies as well.
“It simply isn’t specified clearly enough and leaves room for different interpretations. It would be prudent for this to be clarified before the Agreement is ratified in the Assembly,” Nenadić advises.
Amendments and legal strength
Any potential changes to this Agreement would require consensus among the signatory parties, as the Agreement cannot be amended through amendments.
Nenadić concludes by noting that once ratified, this regulation would hold greater legal authority than domestic laws, as it is an international agreement. However, existing doubts about its application would remain since it states that it aligns with public procurement regulations, yet some provisions contradict this law.
The text of the Agreement also states that Serbia will exempt value-added tax and customs duties on all transactions related to these projects. This is standard practice for intergovernmental agreements concerning infrastructure projects.
Potential projects
In the days leading up to the signing of this Energy Cooperation Agreement, Serbian officials discussed potential projects publicly. These primarily focused on green energy initiatives, including the possibility of collaboration on the development of nuclear power plants. One of the proposed projects is the construction of the Đerdap 3 hydroelectric power plant, for which a feasibility study was financed and conducted by the American company Bechtel. Bechtel, in consortium with the Turkish company Enka, is currently building the Moravian Corridor in Serbia.
