Slovakia: Changes In The Regulation Of Public Sector Partners

Last Updated: 10 September 2019
Article by Michaela Stessl, Daniela Koncierova, Eva Skottke and Jan Farbiak

Recently, the Slovak Parliament approved an amendment of the Act on Register of Public Sector Partners and other related acts governing handling with public resources (the Amendment). The first part of the Amendment will become effective on 1 September 2019 and the second part on 1 November 2019.

Below we summarize the most significant changes that could have an impact on your registration in the Register of Public Sector Partners (the Register):

1. Thresholds determining the Public Sector Partner

The Amendment clarifies the thresholds decisive for the determination whether an entity fulfils the legal definition of the Public Sector Partner. According to new rules, the following subjects will not be considered Public Sector Partners:

  • who receives a one-time consideration not exceeding EUR100,000 based on the contract concluded with public sector, or
  • who receives a number of partial or recurrent considerations not exceeding EUR250,000 in total based on the contract concluded with public sector.

The above values of the contractual consideration will be determined as a sum of the funds provided from public sector to the Public Sector Partners, including any proprietary values, proprietary rights, other property rights or their combination.

The Amendment prescribes also specific rules to determine the value of consideration, amongst others:

  • the value of contractual consideration does not include VAT, 
  • the values of considerations received under 2 or more contracts are not aggregated,
  • recurrent consideration must be aggregated for the entire duration of the contract, including the extended duration of a fixed term contract.

2. Presumed correctness of the registered information

The information registered in the Register does not have to be proven towards public authorities or within business relations anymore. The registered information is presumed to be correct. Each subject must verify on its own whether the Public Sector Partner is registered with the Register.

3. Mandatory duration of the Public Sector Partner's registration

The Public Sector Partner must be registered with the Register during the entire period of receiving funds or acquiring property, proprietary rights or other property rights from public resources.

4. Top Management and requirement to consolidate its registration

As of 1 September 2019, the Top Management is considered to be only the statutory body resp. member(s) of the statutory body (i.e. managing directors, members of the board of directors) of the Public Sector Partner. Leading employees or proxy holders (procurist) will no longer be considered Top Management.

Each Public Sector Partner who registered its Top Management, including leading employees or proxies, as ultimate beneficial partners (the UBO) in the Register must update the registration and register only its statutory body or member(s) of statutory body until 29 February 2020 at the latest.

In addition, the Public Sector Partner's registered Top Management as UBO and the UBO will be considered equal. As a result, all statutory provisions concerning the UBOs will be equally applicable also to Top Management.

5. Possibility to not register the permanent residence of the UBOs

The Amendment allows to register the registered seat of the Public Sector Partner instead of permanent residence of the UBO provided there are objectively justified circumstances that the publicly registered permanent residence of the UBO could jeopardize the UBO's or its close person´s safety or interfere the protection of personality. Such circumstances must be proven to the registered authorized person and submitted to the registration court by its sworn affidavit.

6. Verification occurrences

The Amendment prolongs the periods for the verification of the UBO. The verification procedure must be performed not earlier than 10 days before the:

  • conclusion or change of the contract concluded with public sector with a one-time consideration exceeding EUR100,000 or with a number of partial or recurrent considerations amounting to EUR250,000 in total; or
  • consideration under the contract concluded with public sector exceeding EUR1,000,000 in total within 30 days.

7. Voluntary verification of the UBO

The Amendment introduces also a voluntary verification of the UBO. Newly, the authorized person may verify the UBO of the Public Sector Partner any time and regardless of the fulfilment of any statutory verification occurrence.

8. Acquisition and use of the public property

The Amendment explicitly stipulates that only the registered Public Sector Partners may be the acquirers or users of the property belonging to the:

  • state
  • municipalities
  • higher territorial units
  • public institutions

9. Annual mandatory verification of the UBO

The annual mandatory verification process of the UBO to 31 December must be notified to the registration court until 28 February at the latest.

Such notification will not be required if any change concerning the UBO occurs and will be registered with the Register within the period from 1 January to 28 February.

10. New sanction: Inability to conduct business with public sector for 2 years

The registration court may erase the registered Public Sector Partner from the Register if:

  • during verification process the Public Sector Partner does not plausibly prove the accuracy and completeness of the information concerning its registered UBO;
  • the registration court imposed a fine for failure to fulfil the obligation to submit the motion on registration of change(s) concerning the UBO within 60 days as of the change and such fine was not paid within the period ordered by the registration court.

The Amendment stipulates that if the registration court deletes (deregisters) the Public Sector Partner based on any of the above-mentioned grounds, the deleted Public Sector Partner cannot be registered with the Register within 2 years. As a result, such Public Sector Partner will be unable to conduct business with public sector within the 2 years period.

This alert contains only the most important information regarding the Amendment.

We will inform you and approach you individually if your registration must be updated in order to be compliant with the new legislation.

Please let us know in case of any further questions.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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