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<h2>Right to temporarily suspend the performance of the contract</h2>Two years have passed since the Supreme Court of the Republic of Slovenia ruled that consumer loan agreements denominated in Swiss francs (CHF) are null and void. Following this landmark decision, lower courts have since consistently and uniformly held that CHF loan agreements are invalid, ordering banks to reimburse borrowers for overpaid amounts. However, the evolution of case law has not stopped at the question of nullity alone. Significant progress has also been made in the protection of <a href="https://www.krizanecpartners.com/en/cat/consumer-law">consumers’ rights</a> during ongoing proceedings. According to the current, consistent judicial practice, a consumer who is still repaying a CHF loan at the time of filing a claim against the bank—and who has by that point already repaid more than they originally received under the loan agreement—may request that the effects of the loan agreement (and all related legal transactions) be temporarily suspended until the final conclusion of the court proceedings. In other words, upon the consumer’s request, the court may temporarily “freeze” the performance of the loan contract. In practice, this means that the consumer is no longer obliged to make further payments under a contract whose validity is being challenged in court, while the bank is prevented from enforcing repayment through execution or other coercive measures until a final judgment is issued. <h2>Regulatory interim injunction</h2>This measure constitutes a regulatory interim injunction, originally grounded in a 1997 Constitutional Court decision, which courts had historically applied cautiously and restrictively. A decisive turning point in favor of consumers came with the judgment of the Court of Justice of the European Union (CJEU) in case <a href="https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:62022CJ0287">C-287/22</a>, which clearly defined the criteria for issuing interim injunctions in consumer <a href="https://www.krizanecpartners.com/en/cat/dispute-resolution">disputes</a> such as those concerning CHF loans. The assessment of unfair contractual terms in consumer credit agreements under the Consumer Protection Act must take into account the minimum standards laid down in Council <a href="https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:31993L0013">Directive 93/13/EEC</a> on Unfair Terms in Consumer Contracts, as well as the interpretative principles developed by the CJEU. According to the judgment in case C-287/22, consumers must be ensured effective judicial protection, meaning that an interim injunction should be granted when the court finds sufficient indications of unfair contractual terms and a reasonable probability that the agreement is null or that the consumer will be entitled to restitution of instalments already paid. Only by suspending the performance of the contract can the court ensure that a final decision on the nullity of unfair terms has real, not merely formal, effect. In Slovenian law, this standard is reflected in Article 272 of the Enforcement and <a href="https://pisrs.si/pregledPredpisa?id=ZAKO1008">Security Act</a> (ZIZ):-           the first condition, the probability of the claim’s existence, corresponds to the assessment of whether there are indications of unfair contractual terms and thus of contract nullity;-          the second condition, the risk of irreparable harm, means that without the injunction, the consumer would continue to bear the consequences of a contract that may later be declared void, resulting in damage that cannot be fully remedied. <h2>An important milestone for consumers</h2>A fundamental shift in Slovenian case law has occurred with the recognition that the standard of irreparable harm, previously interpreted primarily through the prism of the applicant’s financial hardship, must now be understood in a loyal and EU-compliant manner, consistent with the CJEU’s reasoning. This approach shifts the focus from purely financial risk to the effectiveness of judicial protection and the substantive significance of the final decision on nullity. The previous restrictive interpretation of “irreparable harm,” traditionally applied in ordinary civil disputes, can therefore no longer be used in consumer cases. These disputes require an EU-conforming interpretation that prioritises consumer protection and the effectiveness of judicial remedies. For instance, the Ljubljana Higher Court, in its decision VSL Sklep <a href="https://sodnapraksa.si/?q=id:2015081111486075&amp;database%5bSOVS%5d=SOVS&amp;database%5bIESP%5d=IESP&amp;database%5bVDSS%5d=VDSS&amp;database%5bUPRS%5d=UPRS&amp;_submit=i%C5%A1%C4%8Di&amp;page=0&amp;id=2015081111486075">II Cp 178/2025</a> of 27 May 2025, expressly held that interpreting the standard such that an interim injunction could only be granted where financial hardship is proven would be inconsistent with an EU-compliant interpretation of the consumer’s position. This development in judicial practice represents a major milestone after years of uncertainty and inconsistency in the handling of CHF loan disputes. Consumers, who for years bore the burden of unfair contractual terms and currency fluctuations, have now gained clearer and more effective protection. The regulatory interim injunction has thus become a key instrument of consumer protection, allowing them to maintain legal and financial security throughout the proceedings until the court’s final decision. <h2>Legal assistance</h2><a href="https://www.krizanecpartners.com/en">Križanec &amp; Partners</a> Law Firm in Slovenia provides comprehensive legal representation in proceedings for declaring CHF-denominated loan agreements null and void, as well as expert preparation of motions for regulatory interim injunctions—ensuring full and effective protection of our clients’ rights and interests. For further information and legal advice regarding disputes over Swiss franc (CHF) loans, please contact our dispute resolution expert, <a href="https://www.krizanecpartners.com/en/experts/lara-amrsek">Lara Amršek</a>.

In recent months, Slovenian courts have increasingly issued regulatory interim injunctions that temporarily “freeze” the repayment of Swiss franc (CHF) loans until a final judgment is rendered. This marks an important development in judicial practice, as it provides consumers with effective legal protection already during the proceedings— relieving them from the obligation to pay instalments under a disputed contract and preventing banks from enforcing repayment through execution or other coercive measures during that period.

Regulatory Interim Injunction as a “Judicial Freeze” of CHF Loan Payments Pending Final Judgment – an Increasingly Common Judicial Practice

<h2>Historical Development and Adoption of ZInfV-1</h2>The Republic of Slovenia has been actively addressing digital protection challenges for several years. The process began in 2016 with the creation of a cybersecurity resilience strategy, laying the groundwork for safeguarding critical digital networks. In 2018, the Information Security Act (ZInfV) was introduced, implementing the initial European directive in this field, covering essential services, the public sector, and selected digital platforms. In 2020, the National Security Council highlighted a rising level of cyber risks, particularly evident during Slovenia’s EU Council Presidency when digitalization and security were key priorities. This assessment revealed the inadequacy of the existing framework, prompting a 2021 overhaul (ZInfV-A). This led to the establishment of the Government Office for Information Security (URSIV) as an independent entity, emphasizing the need for autonomy in effective oversight.In 2022, the European Union adopted the new <a href="https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32022L2555">NIS 2 Directive</a>, mandating its incorporation into national laws by October 2024. Slovenia responded in 2023 by drafting the Information Security Act (ZInfV-1), which integrates EU requirements with additional provisions. After months of negotiations, the law was approved by the National Assembly in May 2025, published on June 4, 2025, and took effect on June 19, 2025. The NIS 2 Directive serves as the central European legal framework for cybersecurity, updating existing regulations like eIDAS and the electronic communications code, while expanding its scope across multiple sectors to ensure a uniformly high security standard. Key requirements include risk management, incident reporting, supply chain security, and cross-border cooperation.<h2>Key Features and Organizational Structure</h2>ZInfV-1 builds on prior legislation with a more comprehensive approach, incorporating security strategies, response plans, and training programs. The NIS 2 Directive requires member states to designate competent authorities, and Slovenia has opted for a centralized model with URSIV as the lead body, supported by the SI-CERT team and the governmental SIGOV-CERT unit for public administration. URSIV ensures compliance, issues guidelines, and enforces penalties, including corrective measures or fines reaching up to 10 million euros or 2% of annual turnover for critical entities, and up to 7 million euros or 1.4% for significant entities. The law also incorporates other European regulations, such as the Cybersecurity Act and the European Cybersecurity Competence Centre Regulation.While ZInfV-1 largely aligns with the NIS 2 Directive, it introduces specific adaptations reflecting Slovenia’s context, such as consolidating multiple rules into one document for ease of use, though this may complicate alignment with other EU frameworks. The Directive outlines general supervisory powers, whereas ZInfV-1 grants URSIV more detailed authority, including on-site inspections and broader sanctions. The law limits its application, excluding financial institutions, which fall under the Digital Resilience Act (DORA), and specifically addresses the defense sector, exceeding minimal EU requirements.The NIS 2 Directive emphasizes supply chain resilience but leaves methods open, while ZInfV-1 imposes specific demands, such as certifying ICT products and continuously monitoring suppliers. This requires entities to maintain detailed supplier records and include security clauses in contracts, posing challenges for smaller businesses amid rising supply chain attacks. Additionally, it introduces the concept of &quot;protected data,&quot; enabling URSIV to handle sensitive information more flexibly, though this may lead to legal or operational overlaps with other regulations.<h2>Obligations for Stakeholders and Reporting</h2>Stakeholders must implement measures to mitigate risks, develop response protocols, ensure supply chain security, and train personnel. Serious incidents must be promptly reported to URSIV or the national CSIRT, with mandatory public disclosure if public safety is at risk. The law also encourages voluntary reporting of minor incidents to enhance information sharing. Oversight is conducted by URSIV, which can conduct inspections and impose measures, with fines reaching 10 million euros for critical entities.Stakeholders are defined in Articles 6 and 7, covering essential entities from sectors like energy and healthcare, as well as significant ones from areas like postal services. Criteria include at least 50 employees and 10 million euros in annual revenue, though some, such as communication service providers, are obligated regardless of size. Status is determined through <a href="https://ursiv.si/">self-registration</a> and EU guidelines on affiliated companies.The law applies to approximately 1,000 entities, a significant increase from the previous law’s coverage of around 100, driven by the broader NIS 2 criteria. Entities must register with URSIV within six months of the law’s enactment, with risk management measures to be implemented within 12 to 18 months, setting a deadline of late 2026.ZInfV-1 marks a significant advancement in protecting Slovenia from cyber threats, but its success hinges on effective implementation. Integrating EU rules offers simplifications yet presents challenges requiring caution, with URSIV playing a pivotal role in providing clear guidance and support during the transition.<h2>Recommendations and Legal Assistance</h2>Companies should assess their obligations under the law, complete self-registration, and adopt risk management measures. We also recommend reviewing policies, training programs, and supply chains. <a href="https://www.krizanecpartners.com/en">Križanec &amp; Partners</a> Law Firm in Slovenia brings extensive expertise in information and cybersecurity. Our lawyers provide professional advice and legal representation in all procedures related to ZInfV-1, including self-registration, risk management, and asserting rights and duties before competent authorities. For further details and legal guidance on the new law, contact our information law specialist, attorney at law <a href="https://www.krizanecpartners.com/en/strokovnjaki/dinar-rahmatullin">Dinar Rahmatullin</a>.

The Information Security Act (ZInfV-1) enhances cybersecurity protection for stakeholders against escalating threats.

New Information Security Act (ZInfV-1): Key Innovations and Obligations for Stakeholders

<h2>Succession contracts: transfer of property inter vivos</h2>By making a testament, the testator ensures that his property will be distributed among his heirs after his death in accordance with his will. However, you can distribute your property during your lifetime to your descendants or other persons whom you wish to receive your property.By concluding a succession contract, you can ensure that your property is distributed in accordance with your wishes, while at the same time avoiding any <a href="https://www.krizanecpartners.com/en/cat/dispute-resolution">disputes</a> that may arise in the succession proceedings between your heirs in relation to your property.  However, you will have to conclude each of the succession contracts in a notarial deed.Contract for the delivery and distribution of property (&quot;delivery contract&quot;)The conclusion of a delivery contract enables the deliverer to transfer his immovable or movable property, which he has at that moment, free of charge to one or more of his descendants immediately after the conclusion of the contract. It has the peculiarity that it will be valid only if all the descendants agree to it. So, if you have two descendants and you want to give your real estate to only one descendant by means of a delivery contract, the other descendant must agree to it. Otherwise, the contract will be void and the part of the property (in this case, the real estate) will be considered as a gift, in respect of which the other descendant who did not agree to the contract may have a claim in the succession proceedings.Contract of subsistenceIn a contract of subsistence, a person transfers ownership of immovable property to another person, who in return must provide certain benefits and services to this person or to someone else - in practice, this is most often seen as a lifetime easement of the home, and care, nursing and similar assistance in the event of sickness and old age. Unlike a contract of delivery, which can only transfer property to your descendants, you can also enter into a contract of subsistence with a third party, without needing the consent of your descendants. Moreover, it is considered a contract for remuneration because the acquirer of the property repays it with his/her benefits and services.Contract of lifetime maintenanceThis is a contract whereby the maintaining party undertakes to take care of the maintained party until the latter&#039;s death and, in return, the maintained party leaves certain property to the maintaining party after death. Like a contract of subsistence, it is considered to be a contract for remuneration. Even if they are similar in substance, there is a notable difference with a contract of subsistence. If you enter into a contract of subsistence with someone, that person will become the owner of your property upon its conclusion, whereas if you enter into a contract of lifetime maintenance, your contracting party will become the owner of the property only after your death.<h2>Legal advice and further information</h2>As each succession contract has its own peculiarities, it is advisable to consult a professional to find out which type of contract is best suited to your wishes and needs. <a href="https://www.krizanecpartners.com/en">Križanec &amp; Partners</a> Law firm in Slovenia, offers professional advice and legal representation in the conclusion of succession contracts. For further information, please contact our expert in succession law, associate <a href="https://www.krizanecpartners.com/en/experts/lara-amrsek">Lara Amršek</a>. On our website you can find out more about succession contracts and other legal solutions that can help you to distribute your property in accordance with your wishes.

Succession contracts allow property to be distributed to descendants or other persons during the lifetime of the deceased, thus avoiding disputes between heirs after the deceased's death.

Succession contracts

<h2>Extraordinary termination</h2>The concept of extraordinary termination of an employment contract is an important legal mechanism in <a href="https://www.krizanecpartners.com/en/cat/employment-law">employment law</a> that allows an employee to terminate their employment contract, and thus their employment relationship, in the event of serious breaches of obligations by their employer, by unilateral declaration of will, with the right to severance pay and compensation. Article 111 of the Employment Relationships Act (ZDR-1) specifies in detail which cases of serious misconduct by the employer allow the employee to give extraordinary notice of termination.Extraordinary termination of the employment contract for misconduct by the employer thus has a significant impact on working conditions. Employees are increasingly aware of their rights and of the possibility to take action when their rights are violated. This also increases the responsibility of employers to fulfil their obligations towards workers and to comply with employment legislation.Examples of serious misconduct by the employerRecently, there has been an increase in the number of cases where employers are late in paying wages. Wages are often paid in several instalments after the due date, and in some cases employees do not receive their wages at all. The amendment to the <a href="https://www.uradni-list.si/glasilo-uradni-list-rs/vsebina/2023-01-3325">ZDR-1D</a> has provided for the right to extraordinary termination by the employee also in cases where the employer fails to pay wage compensation, and not only in cases where the employer fails to pay wages.Such practices by employers constitute serious breaches of obligations and justify workers to give extraordinary termination of their employment contract. In all cases, the employment relationship is terminated immediately, without period of notice, and the worker is entitled to severance pay and compensation for loss of pay during the notice period.<h2>Extraordinary termination procedure</h2>Before giving an extraordinary termination, the employee must inform the employer in writing of the breaches and request that they be remedied. He or she must also inform the Labour Inspectorate of the breaches. If the employer fails to remedy the breaches within three working days, the worker may give extraordinary termination within 30 days.<h2>Employer’s liability for damages</h2>If the employer still owes the employee payments after the extraordinary termination, the employee must take <a href="https://www.krizanecpartners.com/en/cat/dispute-resolution">judicial action</a> to recover the debt. Article 135 of the Employment Relationships Act provides that a pay slip is an authentic instrument on the basis of which the employee may bring a direct enforcement action without bringing an action before the labour court.Payment of debts after termination Even if the employer settles arrears, including wage arrears, recourse payments, untaken leave and any compensation claims, after receiving an extraordinary termination notice, this does not affect the lawfulness of the termination. The courts have clarified that the written warning is only intended to inform the employer of the breaches, not to remove the reason for the termination.<h2>More information and legal advice</h2><a href="https://www.krizanecpartners.com/en">Križanec &amp; Partners</a> Law Firm in Slovenia has extensive experience in the field of employment law. Our lawyers provide expert advice and legal representation to employers and employees in all employment law proceedings. For further information please contact our employment law experts, Attorney at law <a href="https://www.krizanecpartners.com/en/strokovnjaki/dinar-rahmatullin">Dinar Rahmatullin</a> and Attorney at laws <a href="https://www.krizanecpartners.com/en/experts/janja-koncan">Janja Končan</a>. We also invite you to read on our <a href="https://www.krizanecpartners.com/en">website</a> the key changes introduced by the latest <a href="https://www.krizanecpartners.com/en/insights/important-changes-to-ordinary-termination-for-reasons-of-misconduct">amendment to the ZDR-1</a>, including important changes to <a href="https://www.krizanecpartners.com/en/insights/important-changes-to-ordinary-termination-for-reasons-of-misconduct">ordinary termination of an employment contract for reasons of misconduct</a>.

The extraordinary termination allows the employee to terminate their employment immediately in the event of serious misconduct on the part of the employer.

Extraordinary termination of an employment contract for serious misconduct by the employer

In case ref. <a href="https://www.us-rs.si/odlocba-ustavnega-sodisca-st-up-1514-22-z-dne-18-4-2024/">Up-1514/22</a> of 18 April 2024, the Constitutional Court adopted an important decision in the field of <a href="https://www.krizanecpartners.com/en/cat/employment-law">employment law</a>, as it assessed the liability for damages of a formal employer who, in accordance with the employment contract, had sent an employee to work abroad. On that issue, the Constitutional Court took the view that the formal employer in such a case could not be relieved of its liability for damages on the grounds that it was not present at the work site, did not supervise the work on the construction site and did not otherwise have direct control over the worker&#039;s work.This judgment will have an important impact on <a href="https://www.krizanecpartners.com/en/cat/dispute-resolution">dispute resolution</a> between workers and employers in cases of accidents at work abroad. Workers will now have easier access to their rights. For further information and legal advice on employer&#039;s liability and other labour law issues, please contact <a href="https://www.krizanecpartners.com/en/cat/dispute-resolution">Križanec &amp; Partners Law firm in Slovenia</a>.<h2>Secondment abroad</h2>Posting an employee abroad under <a href="https://pisrs.si/pregledPredpisa?id=ZAKO5944">Article 208 of the Labour Relations Act</a> (ZDR-1) means that the employer temporarily sends the employee to work outside Slovenia, if this is agreed in the employment contract. An employee has the right to refuse to be posted abroad if there are legitimate reasons for doing so, such as pregnancy, care of a child under a certain age, disability, health reasons or other reasons laid down in the employment contract or collective agreement.If the employment contract does not provide for the possibility of working abroad, a new employment contract must be concluded in the event of secondment for duration of the project or the work abroad. When the work abroad ends, the employer must ensure the employee&#039;s return to Slovenia. The contract of employment for work abroad must contain provisions on the duration of the work abroad, public holidays, minimum annual leave, remuneration for the work, additional insurance for health services abroad, other benefits and the conditions for returning to Slovenia.<h2>Employers&#039; liability for an accident at work abroad</h2>Decision of the lower courtsIn the present case, the Court of First Instance, in the fourth trial, dismissed the claim of a worker who had been posted to Turkey for compensation for an accident at work, concluding that the worker must reimburse the formal employer for the costs of the proceedings, as the formal employer did not organise the work at the construction site abroad. The Court of Second Instance upheld the employee&#039;s appeal in part and reduced the costs awarded, but dismissed the remainder and upheld the judgment of the Court of First Instance. The Supreme Court dismissed the application for leave to review.Right to a safe and healthy working environmentThe Constitutional Court reconsidered the opinion of the lower courts primarily in the context of the right to protection of labour under Article 66 of the <a href="https://nasodiscu.si/ustava-republike-slovenije">Constitution</a>, which obliges the state to ensure a safe and healthy working environment. The legislator fulfilled this obligation in Article 43 of the ZDR-1 and further specified it in the <a href="https://pisrs.si/pregledPredpisa?id=ZAKO5537">Act on Safety and Health at Work</a> (ZVZD-1). According to this legislation, the provision of a safe working environment is a fundamental obligation of the employer. In this respect, the employer cannot relieve itself of this obligation by delegating professional tasks to an expert or an external service. It is the employer who is responsible for the choice of measures, organisation and provision of material resources. In order to ensure a safe and healthy working environment, the legislator has also provided that the employer is liable in damages for harm caused to the worker at work or in connection with work, including accidents at work.The Constitutional Court&#039;s assessmentIn the present case, the lower courts interpreted the concept of employer as a formal employer with whom the worker has a contract and, more broadly, as a de facto employer who directly organises the work and ensures safety in the performance of work. According to the reasoning of the lower courts, only the actual employer who organises the work on the construction site, has direct control over the work of the worker by giving him instructions for safe work on the site and by warning him of the dangers before starting work, can be held liable for an accident at work abroad. The Constitutional Court found that such an interpretation exempts the formal employer from responsibility for ensuring safe work, which is contrary to the provisions of ZDR-1 and ZVZD-1 and the constitutional requirement to ensure a safe working environment under Article 66 of the Constitution. Such an interpretation allows the formal employer to avoid responsibility even though the worker has an employment contract with the formal employer.Accordingly, the Constitutional Court has taken the view that a formal employer must fulfil its obligations with regard to the safety and health of workers, regardless of its physical presence at the workplace. Since in the present case the lower courts violated the worker&#039;s right under Article 66 of the Constitution, the Constitutional Court annulled the contested judgments and referred the case back to the lower courts for reconsideration.<h2>More information and legal advice</h2>Križanec &amp; Partners Law Firm in Slovenia has extensive experience in the field of employment law. Our lawyers provide expert advice and legal representation to employers and employees in all employment law proceedings. For further information and legal advice on employers&#039; liability and other employment law issues, please contact our employment law experts, Attorney at law <a href="https://www.krizanecpartners.com/en/strokovnjaki/dinar-rahmatullin">Dinar Rahmatullin</a> and Attorney at law <a href="https://www.krizanecpartners.com/en/experts/janja-koncan">Janja Končan</a>. We also invite you to read on our <a href="https://www.krizanecpartners.com/en">website</a> the key changes introduced by the latest <a href="https://www.krizanecpartners.com/en/insights/important-changes-to-ordinary-termination-for-reasons-of-misconduct">amendment to the ZDR-1</a>, including important changes to <a href="https://www.krizanecpartners.com/en/insights/important-changes-to-ordinary-termination-for-reasons-of-misconduct">ordinary termination of an employment contract for reasons of misconduct</a>.

In case ref. no. Up-1514/22, the Constitutional Court ruled that the formal employer is liable for the damage suffered by the posted worker while working at a workplace abroad.

The formal employer is liable for damage suffered by the posted worker while working abroad

The amendment to the Employment Relationships Act (ZDR-1D) introduces an important novelty into the Slovenian legal order - the right to disconnect. This <a href="https://www.krizanecpartners.com/en/cat/employment-law">employment law right</a> allows workers to disconnect from the work process and work-related communication outside working hours, which contributes to their physical and mental health, better reconciliation of work and private life and greater gender equality.Although some employers may see the right to disconnect as a constraint, this novelty also has positive effects for businesses in the long term. Rested and happy workers are more productive, less likely to miss work due to sickness and more committed to their work. Measures to enforce the right to disconnect can lead to better work organisation, clearer communication channels and more efficient time management.The challenge for employers is how to take measures to ensure a smooth working process on the one hand and respect the right to disconnect on the other. The right to disconnect may not be respected only in exceptional circumstances, which must be justified and foreseen in advance. In the event of a <a href="https://www.krizanecpartners.com/en/cat/dispute-resolution">dispute</a> between the employee and the employer concerning the right to disconnect, the burden of proof will be on the employer.<h2>Exercising the right to disconnect</h2>According to <a href="https://www.uradni-list.si/glasilo-uradni-list-rs/vsebina/2023-01-3325">Article 142.a of ZDR-1</a> , which entered into force on 16 November 2023, employers must provide workers with the right to disconnect. This means that the worker is not at the employer&#039;s disposal during the exercise of the right to rest or during justified absences from work. The employer must take the appropriate measures provided for in the collective agreement, which must be notified in writing to the workers. The measures must be taken by 16 November 2024 at the latest.The employer must describe the right to disconnect and any measures taken in an appropriate way (internal website, notice board). The right to disconnect must be particularly respected during holidays, weekends, periods of sickness and annual leave. Meetings must be organised within working hours, taking into account lunch breaks and with sufficient notice (at least 48 hours in advance). When dealing with e-mail, it is recommended to use automated answering machines in the event of absence, to send delayed e-mails after working hours, to fix the time of use of company e-mails and to avoid sending messages outside working hours.<h2>The importance of the right to disconnect for workers</h2>The right to disconnect has a number of positive effects on workers. It reduces stress and prevents burnout, which are common consequences of being constantly tied to work. It improves quality of life, as workers can spend quality time with their families and pursue hobbies and personal interests. The right to disconnect also contributes to gender equality as it often allows for a better reconciliation of work and family responsibilities, which is particularly important for women workers who often bear a greater share of the burden of household chores and caring for the family.<h2>For more information and legal advice</h2><a href="https://www.krizanecpartners.com/en/cat/dispute-resolution">Križanec &amp; Partners</a> Law Firm in Slovenia has extensive experience in employment law. Our lawyers provide expert advice and legal representation to employers and employees in all employment law proceedings. For further information and legal advice on the right to disconnect and other questions related to employment law, please contact our employment law expert, Attorney at law <a href="https://www.krizanecpartners.com/en/experts/dinar-rahmatullin">Dinar Rahmatullin</a>. You can read about all the key changes introduced by the amendment to the ZDR-1 on our <a href="https://www.krizanecpartners.com/en/insights/amendment-to-the-employment-relationships-act">website</a>, including important changes to <a href="https://www.krizanecpartners.com/en/insights/important-changes-to-ordinary-termination-for-reasons-of-misconduct">ordinary termination of an employment contract for reasons of misconduct</a>.

With the adoption of the amendment to the Employment Relationships Act (ZDR-1D), a novelty was introduced into the Slovenian legal order, which guarantees employees the right to disconnect. This is an important right that allows workers to limit their working time and to better reconcile their professional and private life.

Introduction of the right to disconnect

The Slovenian Market Inspectorate (hereinafter referred to as: the »TIRS«) has recently issued a <a href="https://www.gov.si/novice/2024-05-16-pozor-ne-placujte-dostavljenih-nenarocenih-paketov/">notice</a> warning Slovenian consumers about an unusual increase of unsolicited offers of goods which consumers are receiving without prior consent or order.There is a growing trend of Slovenian as well as foreign companies sending offers of goods to Slovenian consumers without them having ordered or consented to such offers.In this respect, it is therefore crucial that Slovenian consumers are aware of their rights under <a href="https://www.krizanecpartners.com/en/cat/consumer-law">consumer law</a> and make informed choices both when shopping online and when picking up packages.<h2>Unsolicited offers of goods</h2>Such offers, which call for immediate or deferred payment, constitute a breach of Article 35 of the Consumer Protection Act. This Article provides that unsolicited offers of goods, services or digital content which call on the consumer to pay immediately or defer payment are not permitted. The consumer is therefore under no obligation to pay in the event of an unsolicited offer of goods, services or digital content. If the consumer does not reply to such an offer, he shall be deemed not to have accepted the offer.<h2>Slovenian consumers&#039; rights</h2>It is important to note that in the case of such deliveries, there is no obligation for the Slovenian consumer to pay. Furthermore, it is important to know that if the sender of the unsolicited goods is based in Slovenia, the Slovenian consumer can also contact TIRS directly.If the seller is based in another EU Member State, the consumer can contact the <a href="https://www.epc.si/en">European Consumer Centre</a> for assistance. Also, in the case of a large number of victims by a known consignor from the European Union, TIRS may cooperate with the competent authorities abroad to ensure that consumer rights are respected.<h2>Penalties for offenders</h2>TIRS may impose a fine of between EUR 5,000 and EUR 50,000 on a company offering unsolicited goods to consumers with immediate or deferred payment, but it should be added that the TIRS cannot also impose on such a company the reimbursement of the purchase price already paid by the Slovenian consumer.<h2>Advice and legal assistance</h2><a href="https://www.krizanecpartners.com/en">Law firm Križanec &amp; Partners</a> in Ljubljana, has extensive experience in consumer law. For more detailed information and advice in the field of consumer law, please contact our consumer law experts, Attorney at law <a href="https://www.krizanecpartners.com/en/experts/dinar-rahmatullin">Dinar Rahmatullin</a> and legal intern <a href="https://www.krizanecpartners.com/en/experts/karin-ravnak">Karin Ravnak</a>. We will be happy to answer your questions professionally and help you enforce your rights.

The Slovenian Market Inspectorate has issued a notice warning Slovenian consumers about an unusual increase in unsolicited offers of goods that Slovenian consumers are receiving without their prior consent or order.

Market Inspectorate of the Republic of Slovenia on the increase of unsolicited deliveries

The amendment to the Slovenian Employment Relationships Act (ZDR-1D) introduces important changes to the written warning before ordinary termination for reasons of misconduct. A key novelty is the introduction of a mandatory statement concerning the alleged misconduct at the request of the employee before the employer takes a final decision on termination of the employment contract.The amendment thus protects employees from unfounded terminations and allows them to make a statement on the alleged misconduct. It should also encourage better communication between employers and employees and prevent future misconduct. Some employers are unhappy about the new rules, as they believe it will make the dismissal process more difficult. Trade unions and <a href="https://www.krizanecpartners.com/en/cat/employment-law">employment law</a> experts, however, welcome the new legislation as a step forward in guaranteeing employees&#039; rights.Law firm <a href="https://www.krizanecpartners.com/en">Križanec &amp; Partners</a> in Slovenia has extensive experience in all employment law matters. Our lawyers provide expert advice and legal representation to employers and employees in employment termination proceedings, including the revised procedure of written warning prior to ordinary termination for reasons of misconduct and enforcing rights and obligations under the employment relationship before the <a href="https://www.krizanecpartners.com/en/cat/dispute-resolution">courts</a>.<h2>Ordinary termination for reasons of misconduct and extraordinary termination</h2>Ordinary termination for reasons of misconduct is one of the forms of termination that employers can use when an employee breaches contractual or other obligations under the employment relationship. Culpable cause refers to (relatively) minor breaches of the employee&#039;s obligations, which may lead to termination of the employment relationship. The lawfulness of such termination requires that the employee has been warned in advance of the obligations to be fulfilled and of the possibility of termination if they breach contractual or other obligations under the employment relationship again.The difference between ordinary termination for reasons of misconduct and extraordinary termination lies in the procedure and conditions for their application. In the case of ordinary termination for reasons of misconduct, the employee must first be given written notice, whereas in the case of extraordinary termination, no such notice is required. Extraordinary termination is envisaged as a measure of last resort for the most serious breaches of work obligations, which are explicitly listed in the law and require immediate termination of the employment relationship, while ordinary termination for reasons of misconduct allows for a certain degree of corrective action before the final termination of the employment contract.<h2>Employee&#039;s statement concerning the alleged misconduct in the employer&#039;s written warning</h2>Under the <a href="https://www.uradni-list.si/glasilo-uradni-list-rs/vsebina/2023-01-3325">amendment to the Slovenian Employment Relationships Act</a> (ZDR-1D), an employee has the right to respond to the alleged misconduct within a reasonable period, which may not be shorter than three working days and not longer than 30 days, after receiving a written warning to comply with the obligations and the possibility of termination. The defense may be oral or written, whereby the employer must deliver a reasoned decision on the written warning within eight days following the defense. The decision must include and address any arguments put forward by the employee. The trade union, works council, worker representative or other authorized person may participate in the defense procedure.<h2>Reduced period for repeated infringement of work duties and obligations</h2>The period of time for an employer to bring an alleged misconduct against an employee is also shortened. An employee who has been served with a written warning has six months to avoid a repeated misconduct, otherwise the employer may ordinarily terminate their contract for reasons of misconduct. A longer period, but not more than 18 months, may be laid down in a collective agreement at sector level.<h2>For more information</h2>For more detailed information on the amended written notice before termination procedure and other employment law issues, please contact our employment law expert, Attorney at law <a href="https://www.krizanecpartners.com/en/experts/dinar-rahmatullin">Dinar Rahmatullin</a>. We will be happy to answer your questions professionally and help you exercise your rights. We also invite you to read on our <a href="https://www.krizanecpartners.com/en">website</a> the key changes introduced by the latest <a href="https://www.krizanecpartners.com/en/insights/important-changes-to-ordinary-termination-for-reasons-of-misconduct">amendment to the ZDR-1</a>.

The amendment to the Slovenian Employment Relationships Act (ZDR-1D) introduces important changes to ordinary termination for reasons of misconduct. The employer must warn the employee in writing of the misconduct, give the employee an opportunity to respond to the alleged misconduct and consider the employee’s arguments before terminating the employment contract.

Important changes to ordinary termination for reasons of misconduct

The Slovenian Competition Protection Agency (AVK) <a href="https://www.varstvo-konkurence.si/informacije/novica/agencija-izvedla-nenapovedane-preiskave-1/">conducted unannounced inspections</a> at the business premises of several IT companies (Unistar lc, Lancom d.o.o., Acord-92 d.o.o., and Gambit Trade d.o.o.) on April 11, 2024. The inspection was carried out due to substantiated reasons to suspect that the companies had colluded on prices of personal computers in public procurement processes, subsequently divided the orders, and thereafter acted in concern in submitting bids in these processes.Cartels are a form of restrictive conduct where providers of certain services or products agree on prices or other terms and conditions in order to restrict competition. Cartel collusions are illegal because they lead to less competition, lower quality goods at a higher price and unfair market practices. However, cartels are difficult to expose because they are hidden from the public, so the penalties for proven cartel collusion are extremely high.The AVK&#039;s inspection represents one of the means available to the AVK in the investigative process, in which it investigates alleged violations of <a href="https://www.krizanecpartners.com/en/cat/competition-and-antitrust">competition law</a> (prohibition of restrictive agreements and cartel collusions, prohibition of abuse of dominant position). In accordance with Article 54 of the Prevention of Restriction of Competition Act (ZPOmK-2), the AVK can conduct unannounced inspections of all companies, either based on the consent of the company or a reasoned written order from the competent court. Within the scope of the inspection, authorized persons of the AVK may enter the premises, land, and vehicles of the company, inspect and seize business books and all other documentation related to the company&#039;s operations, request written or oral explanations from any person, and perform other actions in accordance with the purpose of the inspection.It is important for companies, in their operations and business transactions (including contracts), to be aware of the significance of risks arising from competition law. In cases such as the one described above, it is also important for companies to be familiar with the conduct of inspections, their procedural rights (e.g., exclusion of privileged communication from the documents under investigation, etc.) in inspection proceedings, and most importantly, how to act in the event of an unannounced inspection by the AVK.The <a href="https://www.krizanecpartners.com/en">Law firm Križanec &amp; Partners</a> in Slovenia has extensive experience in the field of competition law. Our attorneys regularly advise companies on competition law issues, alert them to potential competition law risks in concluding transactions, and can also assist you in procedural actions in administrative offense proceedings conducted by the AVK. For further information and legal advice on any questions related to competition law, please contact our competition law expert, Attorney at law <a href="https://www.krizanecpartners.com/en/experts/dinar-rahmatullin">Dinar Rahmatullin</a>.

On 11 April 2024, the Slovenian Competition Protection Agency (AVK) investigated several IT companies for suspected cartel collusion on computer prices in public procurement. The investigation was carried out unannounced and is one of the AVK's tools for investigating competition law infringements. Companies should be aware of the risks in this area when doing business and make themselves aware of their rights in the event of an investigation. Law firm Križanec & Partners in Slovenia can provide you with expert assistance in the field of competition law.

Unannounced Inspections by the Slovenian Competition Protection Agency (AVK) into suspected cartel collusion

The Higher Court in Ljubljana, in case reference no. II Cp 138/2024 dated 27th February 2024 (the &quot;Judgment&quot;), has taken a stance regarding the conditions for issuing a temporary (regulatory) injunction in the case of a lawsuit to establish the nullity of a loan agreement in Swiss francs (CHF), namely in connection with a moratorium on loan installment payments. The condensed conditions for issuing a regulatory interim injunction in the specific case are as follows: <ol><li>the creditor sufficiently demonstrates indications of unfairness in the contractual terms of the loan agreement in Swiss francs (CHF);</li><li>the creditor demonstrates either (i) a worsening of their financial position and thus the occurrence of difficult-to-remedy damage they would suffer if they continued paying loan installments, or (ii) that the debtor (i.e., the bank) would not suffer more severe adverse consequences from the issuance of the interim injunction than the creditor would have suffered without the interim measure, if it were to prove unfounded in the course of the proceedings.</li><li>reversibility, meaning that in the event of rejection of the debtor&#039;s (i.e., the bank&#039;s) lawsuit, it is possible to restore the previous state.</li></ol> We invite you to continue reading for a detailed analysis of the content of the Judgment. The subject of decision in this particular case was a ruling on the issuance of an interim injunction, by which the court temporarily suspended the effects of two loan agreements until the final resolution of the dispute (a so-called moratorium on repayment of loan installments). Although the appellate court granted the bank&#039;s appeal, annulled the contested part of the order, and referred the case to the court of first instance for reconsideration due to insufficient and incomplete assessment. However, regardless of the aforementioned, the appellate court, as will be explained further, upheld the reasons for issuing the interim injunction in the specific case. For a comprehensive understanding of the Judgment, it is necessary to first clarify the conditions that must be met for the issuance of the interim injunction under consideration. In accordance with the provisions of Article 272 of the Enforcement and Security Act (the &quot;ZIZ&quot;), the court may issue an interim injunction to secure a non-monetary claim if the creditor demonstrates that it is likely that the claim exists or will arise against the debtor. In doing so, the creditor must also demonstrate one of the assumptions of the second paragraph of Article 272 of the ZIZ, namely (a) the danger that the enforcement of the claim will be impossible or significantly hindered, (b) that the injunction is necessary to prevent the use of force or the occurrence of irreparable harm; (c) that the debtor, if the interim injunction were to prove unfounded during the proceedings, would not suffer more severe adverse consequences than those that would occur to the creditor without the issuance of the interim injunction. The creditor is not obliged to prove danger if it is likely that the debtor would suffer only minor damage with the proposed injunction. On the other hand, according to the case law of the Constitutional Court, an additional condition of reversibility must also be demonstrated in the case of a regulatory interim injunction, i.e., the condition that in the event of rejection of the claim, it is possible to restore the previous state for the debtor. In the discussed Judgment, the Higher Court in Ljubljana, among other things, specifically addressed the condition of the likelihood of the existence of the claimed claim and other conditions under the second paragraph of Article 272 of the Enforcement and Security Act (ZIZ) in connection with Article 7 of Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts (the &quot;Directive&quot;) and the judgment of the European Court of Justice, case no. C-287/22 of 15 June 2023 (the &quot;Judgment C-287/22&quot;). The Higher Court in Ljubljana, through the discussed Judgment, affirmed the position of the court of first instance that the relevant legal basis for the issuance of interim measures in proceedings concerning unfair consumer contracts is the Directive, where it is also necessary to consider Judgment C-287/22 as a mandatory legal source for the interpretation of the said directive regarding the issuance of interim injunctions. In accordance with Judgment C-287/22, national courts must have sufficient indicators of the unfairness of contractual terms (i.e., the likelihood that the loan agreement is null and void) when issuing interim injunctions. On the other hand, national courts must also determine whether the moratorium in favor of the consumer for the duration of the proceedings is necessary to restore the actual and legal position in which the consumer would be if not bound by the (unfair) currency clause. In doing so, the court must also consider the financial position of the consumer and the risk that the consumer may have to repay an amount to the bank exceeding the principal amount of the loan. As essential for the probable existence of the claim, i.e., whether the disputed loan agreements are void, the court in the Judgment emphasized the determination of whether the bank adequately explained to the borrowers the long-term economic burden they assumed by entering into the contracts. Inadequate and insufficient explanatory obligations on the one hand indicate the bank&#039;s bad faith, and on the other hand, they indicate such an informational gap between the contracting parties that borrowers, due to insufficient information at the time of contract formation, did not have the opportunity to make informed and reasonable decisions, even though the burden of their decisions may have only become apparent in the period (of several years) after the conclusion of the contracts. The content of the explanatory obligation must be such that an average consumer can understand the specific operation of the contractual term (i.e., the currency clause) and can assess, based on the information received, the potential economic consequences of such a term for their financial obligations and the real extent of the risk assumed. In Judgement the Higher Court in Ljubljana emphasized that Judgment C-287/22 does not constitute an automatic direct basis for the issuance of an interim injunction. Therefore, it is always necessary to assess the specific factual situation in each case in light of the relevant provisions of the Enforcement and Security Act (ZIZ), always considering the positions taken in Judgment C-287/22. Additionally, in the discussed Judgment the court highlighted that the temporary regulation under consideration, which proposes a moratorium on loan installment payments, constitutes a regulatory interim injunction, thereby necessitating a restrictive approach to the fulfillment of the conditions for the issuance of such an injunction. Regarding the weighing of conditions from the second paragraph of Article 272 of the Enforcement and Security Act (ZIZ), the Higher Court in Ljubljana highlighted that borrowers can demonstrate a deterioration in their financial situation and thus the occurrence of irreparable harm they would suffer if they continued to repay loan installments (the second clause of the second paragraph of Article 272 of the ZIZ). However, in any case, the court is also obliged to conduct a balancing act according to the third clause of the second paragraph of Article 272 of the ZIZ regarding the harmful consequences on both sides, taking into account not only the financial situation of the borrowers, the monthly burden of repaying loan installments, and the fact that the principal has already been repaid but also the fact that the bank is a financial institution with its claims secured by mortgages on the loan agreements. In relation to the condition of reversibility, the Higher Court concluded that such condition is fulfilled in the case where the bank has established a mortgage as security for the loan. In this situation, it is not possible to argue that the bank would be unable to recover its claims in the event that the borrowers were unsuccessful in their lawsuit. The established mortgage enables the bank to restore the previous state in the event of rejection of the lawsuit by the borrowers. If you have any additional questions regarding the process of issuing interim injunctions or the moratorium on loan repayments, we kindly invite you to email Law firm Križanec &amp; Partners in Slovenia at <a href="mailto:info@krizanecpartners.com">info@krizanecpartners.com</a>. We&#039;ll be happy to assist you further.

In case No II Cp 138/2024, the Higher Court in Ljubljana examined an appeal by a bank against an order granting a temporary injunction, by which the court suspended the effect of two loan agreements until the dispute had been finally resolved.

New judicial practice favors the issuance of interim injunctions in proceedings concerning the nullity of loans in Swiss francs (CHF)

The Court of Justice of the European Union (hereinafter: “CJEU”) has ruled in cases C-474/22 and C-54/23 (hereinafter: the “judgments”) that passengers do not have the right to compensation in cases where they do not check in for a flight with significant delay, or if purchasing a ticket for an alternative flight enables them to arrive at the final destination with less than three hours of delay.In the specific cases, there was a forecasted delay of more than three hours for two flights between Düsseldorf and Palma de Mallorca. Because the passengers were concerned that the delay of the flight for which they had a reservation would cause them to miss a business meeting, they decided not to go to the airport. The first passenger&#039;s flight then actually arrived with a delay of 3 hours and 32 minutes, while the second passenger independently booked an alternative flight, arriving at the final destination with less than three hours of delay compared to the original flight. Both passengers filed lawsuits against the airline before the German courts, claiming a compensation of EUR 250, as provided by Regulation (EC) No 261/2004 of the European Parliament and of the Council of 11 February 2004 establishing common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights, and repealing Regulation (EEC) No 295/91 (hereinafter referred to as the “Regulation”).The German Federal Court, within the framework of national proceedings, referred a request to the CJEU for a preliminary ruling, specifically addressing the question of whether an air passenger, if a flight is announced to be delayed by at least three hours compared to the originally scheduled arrival time, has the right to compensation if they do not check in for the flight or if they independently book an alternative flight, enabling them to arrive at the final destination with less than a three-hour delay.In its judgments, the CJEU clarified that the passengers in the specific cases do not have the right to compensation under the Regulation. The CJEU also pointed out the existing case law, which equates passengers with delays of three hours or more (referred to as significant delay) with passengers whose flights have been cancelled. The main connecting element between them is the fact that passengers of significantly delayed flights, like those of cancelled flights, suffer damage in the form of an irreversible loss of time equal to or in excess of three hours.Regarding the specific cases, the CJEU explained that the first passenger, who did not show up at the airport at all, likely did not suffer such a loss of time. This means that passengers with significantly delayed flights are not exempt from the obligation to check in for the flight, unlike passengers whose flights are cancelled, and for whom such exemption is expressly provided by the Regulation.Likewise, the CJEU considered that the second passenger, who voluntarily did not board the flight for which they had a confirmed reservation, and who arrived at the final destination with less than three hours of delay compared to the originally scheduled arrival time due to an alternative flight they booked on their own initiative, did not suffer a loss of time.

In its recent judgments, the Court of Justice of the European Union has ruled that passengers do not have a right to compensation in cases where they do not check in for a flight that has a long delay, or where the purchase of an alternative flight ticket allows them to arrive at their destination with a delay of less than three hours.

EU case law: Air passengers' right to compensation

On 20 September 2023, the Supreme Court of the Republic of Slovenia issued a judgment and a decision in Case No II Ips 54/2023, by which, inter alia, it found that a credit agreement granted for a loan in Swiss francs (CHF) to consumers is null and void.The Supreme Court of the Republic of Slovenia based its decision, in particular, on the conclusion that the bank had failed to fulfil its duty to provide explanations in accordance with the requirements of professional diligence. The bank should have ensured that the credit borrowers, as consumers, were made aware of the actual consequences of major currency fluctuations, whereas instead there was an uneven distribution of risks to the marked detriment of the credit borrowers, which the Supreme Court of the RS considered to be an unfair practice.Based solely on the explanations received, the Supreme Court of the Republic of Slovenia considers that the credit borrowers could not have been aware that the risk they were exposed to by entering into such a business relationship was very high. The bank must provide such information as would lead the average consumer not only to be aware in the abstract of exchange rate fluctuations and the possibility of changes in the amount of the instalments of the credit, but also to be aware in the concrete of the actual consequences of a large depreciation of the domestic currency (and of the increase in foreign interest rates) on the amount of his credit obligations for the entire period of repayment of the credit. Not only that, but the bank must also inform the consumer of the economic circumstances which could affect exchange rate fluctuations, thereby enabling him to understand in concrete terms the potentially serious consequences which the conclusion of a foreign currency loan could have on his financial situation. It is not enough for the consumer to be aware, on the basis of the bank&#039;s explanations, of the possibility of changes in the exchange rate, but it is also necessary to make it clear to him that the exchange rate, particularly in long-term contractual relationships lasting several decades, can change significantly and that this can have non-negligible negative economic effects - something which the bank has failed to do.The insufficient explanatory duty violates the principle of good faith and fair dealing and creates inequality between the contracting parties, which led the Supreme Court of the Republic of Slovenia to consider the disputed contractual terms of the credit agreement unfair and, in accordance with the provisions of the Consumer Protection Act, void. The Supreme Court of the Republic of Slovenia further held that the entire credit agreement was null and void on the ground that the disputed contractual terms constituted a central element of the contract.This is one of the decisions that is essential to overturn the previous case law, which, despite the efforts of lawyers, was extremely favourable to banks and to steer the case law of our courts in favour of the credit borrowers who, on the basis of the banks&#039; assurances (and insufficient explanations), opted for seemingly attractive Swiss francs (CHF) loans. The latter had extremely negative financial consequences due to the huge increases in credit instalments, as consumers disproportionately overpaid or continue to overpay for the loans.With the above mentioned decision, the Supreme Court of the Republic of Slovenia has opened the way for other consumers to request the annulment of credit agreements for Swiss francs (CHF) loans and, under certain conditions, the repayment of overpaid credit and the termination of the lien securing their claims.Our lawyers are already advising affected consumers on how to find a comprehensive solution and how to approach the case as efficiently as possible.

On 20 September 2023, the Supreme Court of the Republic of Slovenia issued a judgment and a decision declaring that a credit agreement granted for a loan in Swiss francs (CHF) to consumers is null and void. With the above decision, the Supreme Court of the Republic of Slovenia has opened the way for other consumers to request a declaration of nullity of credit agreements for Swiss francs (CHF) loans and, under certain conditions, the repayment of overpayments and the termination of the lien securing their claims.

Change in case-law in favour of consumers - recipients of credit in Swiss francs (CHF)

After years of successful collaboration within Law Firm Sibinčič Križanec, we are pleased to announce that Managing Partner Uroš Križanec and his team of seasoned attorneys have started a new Law Firm – Križanec &amp; Partners, committed to delivering unparalleled legal services and upholding the highest standards of professionalism and client advocacy.Led by a team of accomplished attorneys, Križanec &amp; Partners Law Firm brings together a wealth of experience across various legal disciplines. Our collective expertise spans M&amp;A, Dispute Resolution, Intellectual Property, Real Estate Law, and more, enabling us to provide comprehensive legal solutions tailored to meet the diverse needs of our clients.Driven by a shared vision for innovation and client-centric approach, the partners of Križanec &amp; Partners Law Firm have embarked on this new endeavor to better serve our clientele and pursue opportunities for growth and specialization. Our commitment to excellence remains unwavering as we transition into this exciting new chapter.With a firm foundation built on integrity, trust, and a relentless pursuit of legal excellence, we are confident that Križanec &amp; Partners Law Firm will quickly establish itself as a leader in the legal industry. We are excited to embark on this journey and look forward to serving our clients with the highest level of professionalism and dedication.For inquiries or to learn more about our services, please contact us at <a href="mailto:info@krizanecpartners.com">info@krizanecpartners.com</a>.We thank you for your continued support and trust as we take up this new and exciting chapter in our professional journey.Sincerely,Uroš Križanec and Križanec &amp; Partners team

After years of successful collaboration within Law Firm Sibinčič Križanec, we are pleased to announce that Managing Partner Uroš Križanec and his team of seasoned attorneys have started a new Law Firm – Križanec & Partners, committed to delivering unparalleled legal services and upholding the highest standards of professionalism and client advocacy.

Križanec & Partners Law Firm: New Chapter in legal excellence

On 7 November 2023, the National Assembly, in its extraordinary session, adopted the Act Amending the Employment Relationships Act (hereinafter: “Amendment to ZDR-1” or “the Amendment”), wherein the government of the Republic of Slovenia aims to align the Slovenian legal system particularly with (i) the Directive (EU) 2019/1152 of the European Parliament and of the Council of 20 June 2019 on transparent and predictable working conditions in the European Union (Directive 2019/1152/EU) and (ii) the Directive (EU) 2019/1158 of the European Parliament and of the Council of 20 June 2019 on work-life balance for parents and carers and repealing Council Directive 2010/18/EU (2019/1158/EU) in the part relating to the implementation of labor rights and obligations.Key changes and novelties introduced by the Amendment to ZDR-1 include:<ul><li>Additional mandatory elements of the employment contract. In addition to the existing mandatory elements of the employment contract, the Amendment to ZDR-1 specifies that employment contracts concluded after its enforcement must also include (i) a provision regarding the payment of additional payments and other components of the employee&#039;s salary, the payment period, payment date, and method of salary payment, and (ii) a provision regarding training provided by the employer.</li><li>Change or conclusion of a new employment contract with improved working conditions. The Amendment to ZDR-1 allows employees to propose a change to the employment contract or the conclusion of a new one to improve their employment or working conditions. Such a proposal can be made by the employee after six months from the conclusion of the employment contract or after the end of a longer probationary period. The employer must decide on the proposal and substantiate their decision in writing within 30 days.</li><li>Work life balance. The Amendment to ZDR-1 enables employees who care for children up to 8 years old or provide care to propose to the employer the conclusion of an employment contract for a shorter working time for a specified period during the employment relationship due to the needs of balancing work and private life. The employer must substantiate their decision regarding this proposal in writing within 15 days.</li><li><a href="https://www.krizanecpartners.com/en/insights/introduction-of-the-right-to-disconnect">Introduction of the right to disconnect</a>. This is the right of the employee, during the rest period or justified absences from work, not to be available to the employer.</li><li>Introduction of care leave. This allows an employee to be absent from work for up to five working days in the event of significant care for family members due to health reasons specified in the first, second, or third indent of the second paragraph of Article 26 of the ZDR-1 or a person living in the same household, when not entitled to absence from work according to health insurance regulations.</li><li>Protection of caregivers. In addition to special protection for employees due to pregnancy and parenthood, the Amendment to ZDR-1 also stipulates the protection due to caregiving. Caregiving is defined either as working shorter hours to balance work and private life according to the third paragraph of this article, or absence from work due to care leave according to the fifth paragraph of this article.</li><li>Change of the period for use of annual leave. The Amendment to ZDR-1 extends the deadline for using leave that was not taken due to absence from work due to illness or injury, maternity leave, or leave for child care until March 31 of the year following the year into which the annual leave could have been transferred.</li><li>Protection of employees who are victims of domestic violence. The Amendment to ZDR-1 includes employees who are victims of domestic violence in the category of employees entitled to special protection in the employment relationship. An individual is considered a victim of domestic violence if they have experienced one of the forms of domestic violence within the last two years, reported the violence to the police or social services, wherein the procedures related to violence and the elimination of its consequences are not yet finalized. In case of dispute, the burden of proof regarding the enforcement of such special protection is on the employer. According to the Amendment to ZDR-1, such employees may be required to perform work beyond regular working hours, have irregularly scheduled or temporarily rearranged working hours, or be assigned night work only with their prior written consent. The Amendment also stipulates the right to five paid working days of absence in each calendar year for arranging protection, legal and other proceedings, and addressing the consequences of domestic violence.</li><li>Reduced working hours for employees who are victims of domestic violence. The Amendment to ZDR-1 specifies that an employee who is a victim of domestic violence may propose the conclusion of an employment contract for reduced working hours during the employment relationship for the period of arranging protection, legal and other proceedings, and addressing the consequences of domestic violence. The employer must substantiate their decision regarding this proposal in writing within 15 days.</li><li><a href="https://www.krizanecpartners.com/en/insights/important-changes-to-ordinary-termination-for-reasons-of-misconduct">Shorter period for recurrence of misconduct in case of ordinary termination of employment for reason of misconduct and the right to comment on alleged violations</a>. According to the Amendment to ZDR-1, the period in which an employee must not repeat a violation is shorter, now six months instead of one year. Additionally, the Amendment stipulates the employer&#039;s obligation, upon written request from the employee, to provide the employee with the opportunity to comment on violations within three working days of receiving the employer&#039;s written warning. Following such a statement, the employer must make a written and reasoned decision within eight days regarding the warning given.</li><li>Additional reason for extraordinary termination by the employee. The Amendment to ZDR-1 establishes the right of the employee to terminate employment immediately if the employer fails to pay wage compensation, not just salary.</li><li>New definition of the day of termination of the employment relationship during temporary incapacity for work. According to the amendment to ZDR-1, the employment relationship of a worker whose employment contract has been terminated for a business reason or for reasons of incompetence and who is, upon the expiry of the period of notice, absent from work due to temporary incapacity for work because of illness or injury, shall be terminated at the end of the last day of the period of absence due to temporary incapacity for work due to sickness or injury. The maximum period of six months after the expiry of the notice period shall remain unchanged.</li><li>Suspension of the effects of termination for employee representatives. In cases where an employee representative claims the illegality of the termination of an employment contract in a court proceeding, the Amendment to ZDR-1 allows for the suspension of the effects of termination until the court decision at first instance or for a maximum of six months.</li><li>Subsidiary liability of the contractor for salary payments. The Amendment to ZDR-1 introduces subsidiary liability of the contractor in construction works for salary payments that were not paid by the immediate subcontractor for work performed within the framework of services for the contractor.</li></ul>The Amendment to ZDR-1, except for specific provisions with longer transitional periods, will enter into force on the day following its publication in the Official Gazette of the Republic of Slovenia.

On 7 November 2023, the National Assembly, in its extraordinary session, adopted the Act Amending the Employment Relationships Act (ZDR-1).

Amendment to the Employment Relationships Act (ZDR-1)

In 2017, the EU Commission initiated an investigation into Valve Corp., an American gaming company and the owner of the popular video game platform called »Steam«. The probe was prompted by reports of geo-blocking practices employed by Valve on certain PC video games within the Steam platform, based on users&#039; geographical locations. By decision of 20 January 2021, the EU Commission found that the operator of the platform, Valve, and five games publishers, namely Bandai, Capcom, Focus Home, Koch Media, and ZeniMax, infringed EU competition law.The EU Commission found that Valve and five publishers had cooperated through restrictive agreements or concerted practices to restrict cross-border sales of certain Steam-compatible PC video games by setting up territorial control features that prevented users outside a specific EU Member State from activating the video games in question. The EU Commission thus found an infringement of Article 101 of the Treaty on the Functioning of the European Union, which prohibits agreements having as their object or effect the restriction of competition, and fined all the companies involved. The EU Commission charged the video game publishers with restricting competition by object. Such restrictions are those which, by their very nature, are capable of hindering competition and do not require further analysis of their economic impact in order to be unlawful.Valve challenged the decision by filing a lawsuit before the General Court of the European Union (the »General Court«) seeking to have the decision annulled with regard to its involvement in prohibited practices. Valve&#039;s principal argument rested on the assertion that they, along with the other publishers involved, were simply exercising their copyright and were therefore justified in restricting the activation of video games. In its ruling, referred to as judgment No. T-172/21, issued on 27 September 2023, the General Court dismissed Valve&#039;s action.In its decision, the General Court upheld the EU Commission&#039;s decision that there was an agreement or concerted practice between Valve and each of the five publishers. Users can buy video games on the Steam platform directly from the Steam Store or from third-party sellers. When purchasing from a third party, users must use a unique code or activation key to activate the game on Steam.The geo-blocking of activation keys by Valve Corp. and other game publishers was designed to prevent video games sold at lower prices in certain countries from being purchased by distributors or users in countries where prices are significantly higher. The General Court therefore concluded that those geo-blocking measures were not intended to protect the copyright of publishers of computer video games, as claimed by the companies involved. Instead, their main purpose was to prevent the parallel importation of those video games and to protect the high royalties collected by the publishers and the profits made by Valve.In connection with its decision, the General Court also established a significant principle regarding the relationship between EU competition law and copyright law. Specifically, it emphasized that copyright is primarily intended to protect the rights of content holders, ensuring their ability to commercially exploit and make available their protected intellectual property through licensing arrangements in exchange for remuneration. Copyright, however, does not guarantee right holders the ability to demand the highest possible remuneration or engage in practices that result in artificial price disparities among partitioned national markets. Such market partitioning and the resulting artificial price differences are incompatible with the goals of a unified EU internal market.

By decision of 20 January 2021, the EU Commission found that the operator of the platform, Valve, and five games publishers, namely Bandai, Capcom, Focus Home, Koch Media, and ZeniMax, infringed EU competition law.

Geo-blocking of activation keys for video games represents an infringement of EU competition law

The Court of Justice of the European Union (“CJEU”) heard the case, ref no. C-238/22, of a passenger who could not check-in for a flight from Frankfurt am Main, Germany, to Madrid, Spain, which she had booked for the next day. The passenger contacted LATAM Airlines, which informed the passenger that it had transferred her to a flight operated the previous day without informing her beforehand. It also informed the passenger that her reservation for the return flight, which should have taken place more than two weeks later, had been blocked because she had not checked in for the outbound flight. The check-in procedure allows passengers to check their luggage on board and obtain a boarding pass.The passenger brought an action for compensation for denied boarding of a flight before the Regional Court of Frankfurt am Main (“Referring Court”) pursuant to Regulation (EC) No 261/2004 of the European Parliament and of the Council of 11 February 2004 establishing common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights, and repealing Regulation (EEC) No 295/91 (“Regulation 261/2004”). The Referring court referred the matter to the CJEU for a preliminary ruling, asking the CJEU to clarify whether compensation for denied boarding under Regulation 261/2004 presupposes that the passenger checked in for the flight even though the airline had informed the passenger in advance that it would not be possible for the passenger to board the flight. The Referring court also asked whether an airline may be exempted from the obligation to pay compensation, as provided for in Regulation 261/2004 in respect of cancellations if it informs the passenger sufficiently in advance of the denied boarding, that is to say, at least two weeks before the scheduled departure of the flight.The CJEU ruled in its judgment C-238/22 of 26 October 2023 that in the event of a denied boarding, compensation is due even if the passenger did not check in for the flight. If the airline had informed the passenger in advance that he would be denied boarding against his will on a flight for which he had a confirmed reservation, the requirement to check in would have been an unnecessary formality.The CJEU has also ruled that the right to compensation applies even if the passenger was informed of the denied boarding at least two weeks before departure according to the timetable. According to the CJEU, there is no reason to apply a rule that applies only to flight cancellations, which exempts airlines from the obligation to pay compensation to passengers informed of the cancellation at least two weeks before the scheduled departure.

The CJEU ruled that in the event of a denied boarding, compensation is due even if the passenger did not check in for the flight.

Denied boarding and air passenger rights in the EU

In its judgment C-565/22 of 5 October 2011, the Court of Justice of the European Union (&quot;CJEU&quot;) addressed a preliminary question from the Supreme Court of Justice of the Republic of Austria on whether Article 9(1) of Directive 2011/83 (&quot;the Directive&quot;) is to be interpreted as meaning that the consumer&#039;s right of withdrawal from a distance contract is granted only once in respect of a contract relating to the provision of services and which becomes payable after an initial period free of charge, or whether the consumer has a right of withdrawal at each stage of the transformation or renewal of the contract.Under Article 9(1) of the Directive, the consumer has 14 days to withdraw from a distance or off-premises contract without giving reasons and without incurring additional costs. Before such a contract binds the consumer, the trader shall, in accordance with Article 6 of the Directive, provide the consumer with the following information in a clear and comprehensible manner: (1) the full price of the goods or services, including taxes and any additional costs, (2) where there is a right of withdrawal, the conditions, time limit and procedures for exercising that right in accordance with Article 11 of the Directive and a standard withdrawal form and (3) the duration of the contract, where applicable, or the conditions for termination of the contract, if it is a contract of indefinite duration or a contract which is automatically renewable.Sofatutor operates online learning platforms for primary and secondary school students. It offers its services throughout the Austrian territory and thus establishes legal relations with consumers who are resident or habitually resident in Austria. Its general terms and conditions stipulate that when a subscription is first made on these platforms, the service can be tested free of charge for 30 days from the conclusion of the contract and can be cancelled without notice at any time during this period. Those general terms and conditions also provide that the subscription shall only become payable after the expiry of those 30 days if the consumer has not cancelled it within those 30 days. In the event that the period of the paid subscription expires without either Sofatutor or the consumer having given timely notice of termination, the subscription in question is automatically renewed for a fixed period of time in accordance with the General Terms and Conditions. Sofatutor informs consumers of their right of withdrawal by virtue of the conclusion of a distance contract at the time of conclusion of the distance contract.In the case, the Austrian Consumer Information Association argued that the consumer has the right to withdraw from the contract not only when a free trial period of 30 days is concluded, but also when the contractual relationship is extended beyond the trial period.The CJEU has emphasised that the objective of the consumer&#039;s right to withdraw from such a contract is fulfilled if, before the conclusion of the contract, the consumer is provided with information in a clear and comprehensible manner on the conditions, time limits and procedures for exercising the right of withdrawal and, in particular, the consumer must be provided with clear, comprehensible and explicit information on the price of the services before the conclusion of the contract. This information is, according to the the Court, of fundamental importance for the consumer and enables him to make a clear decision as to whether or not to conclude a distance contract with the trader. If a distance contract concluded by electronic means obliges the consumer to pay, the trader must inform the consumer, immediately before the consumer places the order, in a clear and conspicuous manner, of the total price of the services which are the subject of that contract.In the light of the foregoing, the CJEU concluded that Article 9(1) of the Directive must be interpreted as meaning that the consumer&#039;s right of withdrawal from a distance contract is granted only once in respect of a contract relating to the provision of services, which provides for an initial period free of charge for the consumer, followed (if the consumer does not terminate or withdraw from the contract within that period) by a chargeable period which is then automatically extended for a specified period if the contract has not been terminated. This only applies provided that the trader has informed the consumer in a clear, comprehensible and express manner at the time of conclusion of that contract that, after that initial free period, the provision of that service will become chargeable.In the present case, the Supreme Court of Justice of the Republic of Austria will first have to assess whether, in accordance with the Directive, Sofatutor has clearly, comprehensibly and expressly informed consumers of the total price of the services in question. If the company has not provided this information in the required manner, consumers have a new right of withdrawal after the free trial period, but otherwise they only have such a right once.

The CJEU has emphasised that the objective of the consumer's right to withdraw from such a contract is fulfilled if, before the conclusion of the contract, the consumer is provided with information in a clear and comprehensible manner on the conditions, time limits and procedures for exercising the right of withdrawal.

New case law of the CJEU on the consumer's right of withdrawal from a distance contract

On 20 September 2023, the National Assembly adopted an amendment to the Financial Operations, Insolvency Proceedings, and Compulsory Dissolution Act (hereinafter: the »ZFPPIPP-H«), wherein the Government of the Republic of Slovenia aims to (i) address the inconsistencies of the legislation with the Constitution of the Republic of Slovenia, (ii) align the Slovenian legal order with the European Restructuring and Insolvency Directive (Directive (EU) 2017/1132 of the European Parliament and of the Council of 20 June 2019), and (iii) reinforce the principle of ensuring the best conditions for the payment of the creditors&#039; claims.The main novelties introduced by the ZFPPIPP-H are as follows:<ul><li>Establishment of a judicial restructuring procedure for the purpose of removing impending insolvency. This is a new procedure aimed at companies, which are facing insolvency, to prevent insolvency from occurring by means of a commercial and financial restructuring in court proceedings where out-of-court restructuring cannot be achieved due to the lack of consent of all creditors. The procedure can thus be initiated only by the debtor’s proposal.</li><li>Abolishment of the simplified compulsory settlement proceedings. Instead of such procedure, the ZFPPIPP-H introduces a compulsory settlement procedure for small businesses, which is foreseen for companies whose value of assets in the last two years does not exceed EUR 700,000.00 and the amount of all their liabilities does not exceed EUR 700,000.00. In this respect, the ZFPPIPP-H provides for a further simplification, namely that the proposal for compulsory settlement procedure for small businesses does not require the submission of an auditor&#039;s report and a report of a chartered appraiser, and the estimated value of the assets does not require to be prepared by a certified business evaluator.</li><li>Modification of the obligations of the management upon the occurrence of insolvency. The ZFPPIPP-H obliges the management to act immediately and to submit a proposal for the opening of insolvency proceedings as soon as possible, which is essential to prevent companies from becoming insolvent and to ensure that creditors are paid equally and in the best possible manner. This requires management to initiate insolvency or other insolvency proceedings immediately, and at the latest within 30 days of the insolvency occurring.</li><li>Amendment of the rules defining the closely related persons. The ZFPPIPP-H provides for a broader definition of closely related parties, addressing in particular the problem of the so-called »straw creditor« chain that cooperates with the debtor.</li><li>Creditors and the creditors&#039; committee will now have access to the debtor&#039;s key documentation relating to the conduct of the proceedings. This will allow the creditors to take an informed decision on whether to approve the proposed financial restructuring plan or to object to the conduct of compulsory settlement proceedings.</li><li>Improvement of the position of employees as holders of priority claims in insolvency proceedings. The ZFPPIPP-H provides for an obligation of the debtor to pay wages during the course of the compulsory settlement proceedings in the amount as agreed in the individual employment contracts and not only up to the minimum wage. In addition, the inclusion of a representative of the employees in the creditors&#039; committee is foreseen.</li><li>Establishment of an online search engine for sales in insolvency proceedings. This allows for greater transparency of sales, as all sales will be published in one place, and prevents collusion between stakeholders.</li></ul>The ZFPPIPP-H will enter into force on the 30th day after its publication in the Official Gazette of the Republic of Slovenia.

On 20 September 2023, the National Assembly adopted an amendment to the Financial Operations, Insolvency Proceedings, and Compulsory Dissolution Act.

Amendment of Financial Operations, Insolvency Proceedings, and Compulsory Dissolution Act

The Court of Justice of the European Union (the &quot;CJEU&quot;) in its judgment dated September 14, 2023, under case number C-83/22, held that the national court has the authority, subject to specific conditions, to officially notify the traveler of his right to withdraw from the package travel agreement without incurring any expenses.In the case in question, a request for a preliminary ruling was submitted to the CJEU by the Spanish court. This request pertained to the interpretation of Directive (EU) 2015/2302 of the European Parliament and of the Council of 25 November 2015 on package travel and linked travel arrangement (the &quot;Directive&quot;). The dispute arose before the Spanish court concerning a package holiday trip to Vietnam and Cambodia for two individuals which had been purchased by plaintiff from company Tuk Tuk Travel on October 10, 2019, (the &quot;Agreement&quot;). The departure was scheduled on March 8, 2020 from Madrid (Spain), with the arrival planned for March 24, 2020. The plaintiff made an initial prepayment of EUR 2,402 upon entering into the Agreement, whereas the total costs of the trip amounted to EUR 5,208. The general terms and conditions of the Agreement included information regarding the option to withdraw from the Agreement before the departure date for a cancellation fee, but they did not specify the possibility of withdrawing from the Agreement in the event of unavoidable and extraordinary circumstances at the travel destination or its immediate vicinity that would significantly affect the performance of the Agreement.As a result of the escalating spread of the coronavirus in Asia, the plaintiff decided to withdraw from the Agreement on February 12, 2020, and subsequently sought a refund for the entitled amounts. Since the defendant was willing to reimburse the plaintiff only in the amount of EUR 302, the plaintiff filed a lawsuit before the Spanish court seeking reimbursement of an additional sum of 1,500 EUR. The remaining amount of EUR 601 was notclaimed by the plaintiff, as he believed that it correspond to the defendant&#039;s administrative costs.In relation to the described factual circumstances, the Spanish court posed two preliminary questions. The first question pertained to the validity of Article 5 of the Directive, as it was suggested that this provision does not impose an obligation on the travel organizer to specifically inform the traveler about his right to withdraw from the package travel agreement as outlined in Article 12 of the Directive. The latter provision enables withdrawal in cases of unavoidable and extraordinary circumstances significantly affecting the execution of the agreement, without the imposition of any cancellation fees, and with a full refund of all made payments. In response to the raised question, the CJEU ruled that Article 5 of the Directive must be interpreted in a manner that mandates the travel organizer to inform a traveler of his right to withdraw, as specified in the second paragraph of Article 12 of the Directive.The second question posed by the Spanish court related to the interpretation of Articles 114 and 169 of the Treaty on the Functioning of the European Union and the interpretation of Article 15 of the Directive in connection with the application of the principle of dispositiveness and principle of the correlation between the claims put forward in the action and the rulings contained in the operative part of the judgement, when these two principles hinder the effective protection of the consumer as an plaintiff. In response to the raised question, the CJEU determined that the effective protection of the right of withdrawal that traveler has based on Article 12 of the Directive requires that the national court must have the possibility to ex-officio examine the violation of stated provision.However, certain conditions apply to the examination of the right that the national court conducts ex-officio, namely:one of the parties to the package travel agreement must initiate legal proceedings before the national<ol start="1"><li>court, and the agreement has to be the subject of these proceedings;</li><li>the right to withdraw as per the second paragraph of Article 12 of the Directive must be related to the subject matter of the dispute;</li></ol><ul><li>the national court must have access to all the legal and factual elements necessary to assess whether the traveler in question could invoke the right to withdraw from agreement; and</li></ul><ol start="1"><li>the traveler must not expressly state before the national court that he objects to application of the second paragraph of Article 12 of the Directive.</li></ol>Furthermore, the CJEU also concluded that in a situation where a traveler does not invoke the provisions of the second paragraph of Article 12 of the Directive (i.e., the right to withdraw from the package travel agreement and demand a refund of all payments related to the travel package), even though the conditions for its application appear to be met, it cannot be ruled out that the traveler was not aware of the existence of his right of withdrawal. Therefore, this alone provides sufficient grounds for the national court to refer to stated provision ex-officio.

The CJEU held that the national court has the authority, subject to specific conditions, to officially notify the traveler of his right to withdraw from the package travel agreement without incurring any expenses.

CJEU case law: Termination of package holidays in the event of extraordinary circumstances

On 2 September 2023, the Act Determining the Intervention Measures to Remedy the Consequences of the Floods and Landslides in August 2023 (Official Gazette of the Republic of Slovenia No 95/2023 and No 89/23; ZIUOPZP, hereinafter: &quot;the Act&quot;), adopted by the National Assembly on 31 August 2023, entered into force. The Act introduces a number of measures to assist households, the economy and municipalities, as well as rehabilitation and preventive measures on public infrastructure, watercourses and flood defences. In our article published on 6 September 2023, we have already presented the main tax measures introduced by the Act, and below we present the measures of the Act that address the housing crisis faced by a vast number of the population as a result of the floods.<ol start="1"><li> &quot;Exceptional&quot; allocation of non-profit housing for rent</li></ol>The Act provides for the exceptional allocation of non-profit housing for rent, which, irrespective of the other conditions for the allocation of non-profit housing, will be granted to persons who meet the following conditions:- if, as a result of floods and landslides, the residential property in which were actually residing at the time of the natural disaster were permanently or seriously damaged,- if the reconstruction or reoccupation of the housing unit would require a longer period of time, and- if the applicant or the person with whom he/she is living in the same household does not own or have joint ownership of another property in which he/she could reside.Renting of non-profit housing under the above conditions is possible until the consequences of floods and landslides have been remedied, but for no longer than three years from the date of conclusion of the lease agreement. The housings in question will be leased on a non-profit rental basis, with the rent for the first 12 months of the rent being covered by the government.The Housing Fund of the Republic of Slovenia will lease non-profit housing owned by the government, while housings owned by municipalities and local public housing funds will be leased through municipalities and funds respectively.The preparation of the public call for applications and the lists of all available and moveable housing is still ongoing, so the number of available housing units will be known in the coming days.<ol start="2"><li> Market rent subsidy</li></ol>For individuals and families who, as a result of floods and landslides, have suffered damage to the residential property in which they actually reside, which endangers their health and causes an unsuitable living environment for their habitation, and who have rented housing on the market to solve their housing problem, the Act provides for the entitlement to a subsidy on the payment of market rent, which is regulated by the Housing Act (hereinafter referred to as &quot;SZ-1&quot;) and the Act on the Exercise of Rights from Public Funds Act (hereinafter referred to as &quot;ZUPJS&quot;). According to the SZ-1, the beneficiary is entitled to a market rent subsidy for the duration of the lease contract, up to a maximum of one year, which is paid in such a way that the calculated amount of the market rent subsidy is reduced by the landlord and reimbursed to the landlord by the competent municipal authority.In this case, persons entitled to the market rent subsidy under this Act do not have to fulfil certain conditions that otherwise apply to beneficiaries of the market rent subsidy under the ZUPJS and SZ-1, namely that they have a registered permanent or temporary residence at that address, nor will the condition of being on the priority list in the public tender for the allocation of non-profit housing for rent or whether the person fulfils the conditions for the allocation of non-profit housing for rent under the last public tender or the law be taken into account.If the conditions laid down in the Act are met, the application for a market rent subsidy is to be submitted to the Social Work Centre by 31 December 2023 at the latest. For applications submitted between 4 August 2023 and 31 December 2023 inclusive, damaged property will not be taken into account in the determination of the material situation.<ol start="3"><li> Emergency financial aid to cover the costs of rented accommodation</li></ol>The Act provides for financial aid to individuals or families who have rented a housing unit as a result of floods and landslides to cover the costs of the rented housing unit. The emergency financial aid may not exceed two minimum incomes per month and per calendar year in 2023.For example, a single person will receive up to a maximum of EUR 1,405.33, a family of four (two adults and two children) up to a maximum of EUR 3,275.99 and a couple without children up to a maximum of EUR 2,177.79.Applicants shall submit an application for the emergency financial aid to the Social Work Centre by 31 December 2023. In determining eligibility for the aid, the applicant&#039;s financial situation shall be determined and taken into account.It should be noted that the emergency financial aid to cover rented housing is an additional aid to the solidarity aid provided by the Act.

Act Determining the Intervention Measures to Remedy the Consequences of the Floods and Landslides in August

On September 2, 2023, the Act on Intervention Measures to Eliminate the Consequences of Floods and Landslides from August 2023 (Official Gazette of the Republic of Slovenia, No. 95/2023 and 89/23; hereinafter: &quot;ZIUOPZP&quot;) adopted by the National Assembly on August 31, 2023, entered into force. The law introduces measures to help households, the economy and municipalities, as well as curative and preventive measures on public infrastructure, watercourses and flood protection. In the field of taxation, the ZIUOPZP introduces new measures and also complements the measures already adopted by the Act on Amendments of the Act on Elimination of the Consequences of Natural Disasters (Official Gazette of the Republic of Slovenia, No. 88/23, hereinafter: &quot;ZOPNN-F&quot;) from August 9, 2023, whereby the main measures may be presented as follows:<ol start="1"><li>TEMPORARY MEASURE OF SOLIDARITY WORK SATURDAY AND CONTRIBUTION</li></ol>A temporary measure of work on “solidarity Saturday” (or another day of the week, if regular work at the employer is also organized on Saturday) and contribution is being introduced. It is foreseen as one additional workday in the years 2023 and 2024, to be determined by the employers upon consultation with its trade unions, the workers’ council, the workers&#039; representative or the respective employees. Each employee must give written consent to work on solidarity Saturday and works overtime or above the otherwise agreed working hours. The amount of salary for the work performed on this additional day, after calculated taxes and social security contributions, represents the employee&#039;s contribution to the Fund for the Reconstruction of Slovenia. It is foreseen that the employer matches the employee’s contribution in the same amount. Hereby it should be noted that the employer&#039;s contribution is not considered a relief for donations or even a tax-deductible expense in accordance with the Corporate Income Tax Act (Official Gazette of the Republic of Slovenia, No. 117/06 et seq.; hereinafter: &quot;CIT&quot;) and Personal Income Tax Act (Official Gazette of the RS, No. 13/11 et seq.; hereinafter: &quot;PIT&quot;).The employers will calculate the contribution themselves on a special form and submit it via the eDavki (eTax) portal. The form (and additional information hereto) will be available in eDavki in the beginning of October 2023. The calculation will have to be submitted in the month following the month in which the “solidarity Saturday” took place. The deadline for payment is 10 days after submission of the calculation. The contributions will be wired to a special donation account in the budget of the Republic of Slovenia, Nr: SI56011008881000030, reference 19DŠ-27006. The contributions of workers and employers from “solidarity Saturday” will be considered when determining the Obligatory Solidarity Contribution according to Pt. 2 (below).In instances when the calculation of contribution from the “solidarity Saturday” will not be submitted in the prescribed manner, within the prescribed deadlines or will not be paid, fines from 1,600 to 60,000 euros (depending on the size of the employer) may be imposed on the employer whereas the responsible persons of employers may be fined 800 to 8,000 euros.<ol start="2"><li>OBLIGATORY SOLIDARITY CONTRIBUTION</li></ol>For the years 2023 and 2024, an Obligatory Solidarity Contribution for the reconstruction of Slovenia (hereinafter: &quot;OSC&quot;) is implemented. Taxpayers are both natural and legal persons, with different rules applying to each category.          a. In the case of natural persons, all tax residents of the Republic of Slovenia in a particular year are liable for OSC payment.OSC Tax Base: The sum of gross income that is included in the annual tax base for progressive taxation (reduced by tax-deductible expenses), also including the payment for business performance, which is otherwise exempt from taxation. The tax base also includes income that is excluded in the annual tax base for progressive taxation (e.g., income from renting out property or transferring property rights, interest, dividends, capital gains) except for income from independent business activities and income that is exempt from income tax, reduced by tax-deductible expenses.OSC Tax Rate: 0.3 %Exemption: Exempt from OSC payment will be natural persons whose tax base for calculating OSC will not exceed 35% of the average salary in the Republic of Slovenia in the respective year. Based on 2022 data, this limit is approx. EUR 8,500 per year or EUR 700 monthly.OSC assessment: OSC assessment will be part of the annual income tax assessment. If the taxpayer was not served with the Automatic Informative Tax Assessment, he is not obliged to file a tax return for OSP. For income that is not included in the annual tax base for progressive taxation (e.g., income from capital and rental), the assessment will be carried out by means of a Tax assessment issued by the Slovenian Tax Authority.          b. In the case of natural persons carrying out independent economic activities (e.g., sole entrepreneurs), all tax residents of the Republic of Slovenia in the respective years are liable for OSC payment.OSC Tax Base: For each individual year, it’s the tax base for personal income tax assessment form independent economic activates before reductions for tax losses and tax exemptions.OSC Tax Rate: 0.8 %OSC assessment: By means of a Tax assessment issued by the Slovenian Tax Authority.          c. Legal entities obliged to pay OSC are taxpayers in accordance with CITA in each respective year (except for taxpayers established for the performance of non-profit activities).OSC Tax Base: It’s the base according to ZDDPO-2, before reductions for tax losses and tax exemptions for the years 2023 and 2024 or for the tax periods starting in 2023 and 2024 respectively.OSC Tax Rate: 0.8 %OSC assessment: Legal entities calculate OSC themselves in the manner and within the time for calculating Corporate Income Tax in the respective years.The established OSC may be reduced in each respective year by the employee&#039;s or employer&#039;s contribution from the “solidarity Saturday” from Pt. 1 (above), up to the amount of the OSC.In case the OSC is not calculated in the prescribed manner and within the prescribed deadlines, a fine in the amount from EUR 2,400 to EUR 60,000 may be imposed on legal entities whereas the the responsible persons of the legal entities may be fined in the amount of EUR 800 to EUR 8,000.<ol start="3"><li>FAVORABLE TAX TREATMENT FOR EQUIPMENT DESTROYED IN FLOOD</li></ol>In the event of flood destruction of equipment for which legal entities and natural persons performing independent economic activities have claimed the investment tax relief, the respective taxable persons are not required to increase their tax base (sixth paragraph 55.a of Article ZDDPO-2 or sixth paragraph 66.a of Article ZDoh-2).<ol start="4"><li>TAX TREATMENT OF ACCOMMODATION AND EXPENSES RELATED TO THEM</li></ol>Income in the form of free use of accommodation or in the form of accommodation with a reduced rent received by natural persons who were forced to find new or temporary accommodation due to floods and landslides in August 2023 is not subject to income tax until the end of 2024, irrespective of who this accommodation is provided by. The provider of such accommodation - a taxpayer according to ZDDPO-2 or ZDoh-2 - who determines their tax base on the basis of actual income and expenses, may claim the expenses arising in connection with such accommodation as tax deductible until the end of 2024 despite the applicable rules on tax deductibility of expenses.<ol start="5"><li>AMENDMENT OF THE PROVISIONS OF ZOPNN-F REGARDING ONE-TIME SOLIDARITY AID AND TEMPORARY AID FOR SELF-EMPLOYED PERSONS</li></ol>With ZOPNN-F the amount of the tax-free amount for the one-time solidarity aid to an employee who suffered severe damage due to the floods in August 2023, which threatens health and causes an unsuitable living environment, was raised to 10,000 euros from the generally applicable amount of 2,000 euros. As an addition to the established rules, ZIOUPZP implements the possibility of solidarity aid in the year 2023 in several instalments. Furthermore, the possibility of retroactive corrections of withholding tax calculations regarding the solidarity aid payments is introduced, applicable to those recipients of the aid who already paid withholding tax on the excess of 2,000 euros and those who paid withholding tax for multiple payments of the Solidarity aid prior to the implementation of ZIOUPZP. The corrections of withholding tax calculations can be made no later than 30 days after the entry into force of the ZIOUPZP, i.e. until October 2, 2023.In relation to temporary aid for the self-employed persons, self-employed persons in culture and farmers, the ZIOUPZP stipulates that aid for the self-employed in culture, who are duly registered in the appropriate list, will not be included in the income census from Article 85 of the Act on the Realization of the Public Interest in Culture (Official Gazette of the Republic of Slovenia, No. 77/07 et seq.). Regarding the applications for the payment of aid the deadline is extended until January 31, 2024. As for the decline in income, which is relevant to the assessment of whether the beneficiaries can carry out an activity or they perform it to a significantly reduced extent and are therefore entitled to aid, a decline of 25 % (and no longer 50 %) is applicable.<ol start="6"><li>MISCELLANEOUS</li></ol>In addition to the above, a reduction of the tax base from cadastral income for the year 2023 to 50 % for plots with a level of damage of 50 % or more is introduced; a tax exemption for monetary and other aid that natural persons affected by floods and landslides receive in the period from August 4 to  December 31, 2023 from voluntary fire brigades in the affected municipalities is implemented as well as a VAT reduction to 5% for the supply of fire engines and equipment.

Act on Intervention Measures to Eliminate the Consequences of Floods and Landslides in August

The Ljubljana Arbitration Rules (&quot;LAP&quot;) were adopted by the Permanent Court of Arbitration of the Chamber of Commerce and Industry of Slovenia and entered into force on 1 June 2023. The new rules apply to all arbitration proceedings commenced after that date, even if the dispute arises out of a legal relationship for which an arbitration agreement was concluded before that date. The adoption of the new rules constitutes an update of the Ljubljana Arbitration Rules of 2014.The most significant new provision is Article 25 of the LAP, which introduces the mandatory holding of a case management conference. The purpose of the conference is to increase the participation of the parties and the Arbitral Tribunal in the formulation of the timetable for the proceedings. As soon as a case is handed over to the Arbitral Tribunal, the latter must without delay start planning the proceedings and hold a management conference, which may be held in person, by videoconference, by telephone or by any other means. The guiding objective of the panel and of the parties at the conference should be to seek to establish procedural rules that increase the efficiency and speed of the proceedings. The parties shall thus have the opportunity to communicate to the panel their suggestions for the design and conduct of the proceedings. By holding a conference, the Chamber establishes personal contact with the parties, which may lead to better cooperation during the proceedings. The timetable for the proceedings may also be modified at a later stage, if necessary, after prior consultation with the parties.The new arbitration rules also introduce the possibility of appointing an administrative secretary to the Arbitral Tribunal, subject to the consent of the parties. The provisions of Articles 16 and 18 of the LAP governing the impartiality, independence and availability of arbitrators and the confirmation and disqualification of arbitrators apply mutatis mutandis to the Registrar.Another novelty brought by LAP is the use of means of telecommunication. Pursuant to Article 32 of the LAP, the Arbitral Tribunal may, after prior consultation with the parties and taking into account the relevant circumstances of the case, including the legitimate interests and expectations of the parties, decide that the oral hearing shall be held in person or remotely by videoconference, telephone or other appropriate means of communication. Telecommunications may also be used for the examination of witnesses and experts.With regard to the formation of the Arbitral Tribunal, Article 13 of the LAP now provides that the parties may agree on the number of arbitrators. In the absence of agreement, the Board may decide whether the dispute shall be settled by a Arbitral Tribunal composed of a sole arbitrator or three arbitrators, taking into account the complexity of the case, the value of the subject matter in dispute, or other relevant circumstances of the case.Article 45 of the LAP also contains a more significant amendment, which now takes into account the principle of good faith in addition to the principle of success in allocating the costs of arbitration proceedings. In deciding on the allocation of costs, the Arbitral Tribunal therefore considers the contribution of each party to the efficiency and speed of the proceedings. If a party to the arbitration has entered into an agreement with a third party for the financing of claims or defence, and if that party has an economic interest in the outcome of the proceedings, the party must now disclose the identity of that third party to the Arbitral Tribunal and to the other parties to the arbitration proceedings, in accordance with Article 16 of the LAP.The new rules also bring an update to the expedited arbitration procedure. Unless the parties agree that the decision will be based on documentary material, the Arbitral Tribunal may now hold only one oral hearing or discussion (Article 48 LAP).The new Ljubljana Arbitration Rules aim to make the arbitration process more functional and efficient. In doing so, they seek to bring the arbitration process closer to the parties, to keep up with recent trends in arbitration and to optimise the time and cost of the process.

The new rules apply to all arbitration proceedings commenced after 1 June 2023.

The new Ljubljana Arbitration Rules have entered into force

Connected with the recent flooding, the Government of the Republic of Slovenia issued a Decree on temporary measures in administrative matters to prevent the consequences of floods that affected the Republic of Slovenia in August 2023 (Official Gazette of the Republic of Slovenia, no. 87/23 and 89/23; hereinafter: &quot;Decree&quot;), which entered into force on August 6, 2023 and is valid for 1 month (up to and including September 6, 2023).The Decree applies to administrative procedures before administrative and other state authorities, authorities of self-governing local communities and holders of public authorisations (hereinafter: &quot;Authorities&quot;) and, during its validity, stipulates the following temporary measures:<ul><li>local jurisdiction for accepting applications is abolished (applications accepted and processed by the competent Authorities can be submitted with any other Authority of the same type);</li><li>it is possible to submit applications electronically without a secure electronic signature and a qualified certificate (identification is possible with other data determined by the Authorities for business purposes, e.g. an officially assigned identification number);</li><li>the inspection of documents is not carried out on the premises of the Authorities if a copy of the documents can be sent to the person who demonstrates legal interest;</li><li>procedural deadlines for fulfilling rights or obligations (e.g. for filing an applications, appeals, etc...) are interrupted for 14 days since the effectiveness of the Decree. This means that from August 6 to inclusive August 19, 2023 procedural deadlines are interrupted. The deadlines resume on August 20, 2023 and the parties remain with as much time to fulfil the obligation as they would otherwise have had before the interruption;</li><li>at the request of the parties and on the basis of justified reasons related to floods the Authorities may extend the deadlines for the fulfilment of material obligations and for the issuance of decisions. This extension lasts for a maximum of two months.</li></ul>As regards measures in the tax field the above especially means that taxpayers who, for reasons related to the floods, will not be able to pay their tax obligations (taxes, contributions, fines, etc…) in due time can request a deferral of payment with the Financial Administration of the Republic of Slovenia (hereinafter: &quot;FURS&quot;). A deferral can be requested for a maximum of 24 months. In case of an approved deferral no interest will be charged. FURS has already prepared an application form on its website which taxpayers can submit up to and including September 6, 2023.Additionally, FURS adapted its workflow in such a way that they carry out all procedures that benefit taxpayers or are carried out on their initiative, while:<ul><li>reminders and decisions in enforcement procedures are delayed;</li><li>the deadlines for issuing of income tax decisions (decisions based on considered objections), decisions regarding NUZS (compensation for the use of building land) and property tax have been delayed;</li><li>tax audit procedures are temporarily not carried out in affected areas and against taxpayers who state reasons related to floods.</li></ul>Moreover, it is also worth mentioning the tax institutes which are already contained in the current Tax Procedure Act (Official Gazette of the RS, No. 13/11 et seq.; hereinafter: &quot;TPA&quot;) and which can be used by taxpayers to facilitate tax compliance in the current situation:<ul><li>Submission of tax calculations an tax returns after the expiry of the prescribed period (Article 52 and 62, TPA). For justifiable reasons, taxpayers may submit tax calculations and tax returns after the statutory deadline has expired. They must be submitted within eight days from the day when the reason for delay ceases, but no later than within three months from the day when the deadline for submission of the return expired. With regard to other missed actions (procedural deadlines) taxpayers can also benefit from the institute of &quot;return to the previous state&quot;, regulated in the Act on General Administrative Procedure (Official Gazette of the Republic of Slovenia, No. 24/06 et seq.; hereinafter &quot;ZUP&quot;).</li><li>In addition to the above-mentioned possibility of applying for a deferral of the payment of tax obligations in connection with the floods which will be possible until the beginning of September 2023, the law foresees other possibilities for more favourable payment of taxes (Articles 101, 102 and 103 ZDavP-2). Natural persons can apply for write-off, partial write-off, deferral of tax payment for a period of up to two years, or payment of tax in a maximum of 24 monthly instalments over a period of 24 months in exceptional cases, for payment of tax in a maximum of 3 monthly instalments without checking of conditions, and for payment of tax in a maximum of 24 monthly instalments or deferral of payment for a period of 24 months upon submission of appropriate insurance. However, legal entities can apply for tax payment in a maximum of 24 monthly instalments or deferral of payment for a period of 24 months due to the threat of serious economic damage or for tax payment in a maximum of 24 monthly instalments or deferral of payment for a period of 24 months upon submission of appropriate insurance.</li><li>If it becomes evident that their tax base for the current year will differ from the tax base of the previous tax year, self-employed persons and legal entities may also submit an application for a mid-yearly change (reduction) in the amount of advance payments in Personal Income Tax from independent activities or Corporate Income Tax.</li></ul>

Decree on temporary measures in administrative matters to prevent the consequences of floods

On 9 August 2023, the National Assembly adopted the Act on Amendments and Additions to the Natural Disaster Recovery Act (the &quot;Act&quot;), which entered into force on 11 August 2023. The Act establishes the possibility of a rapid and effective elimination of damage resulting from natural disasters.The main amendments introduced by the Act in the light of this year&#039;s catastrophic floods are as follows:<ul><li>The possibility of allocating funds from the state budget for disaster recovery before the final assessment of the direct damage has been confirmed. This allows municipalities to receive advance funding of up to 40% of the preliminary damage assessment to carry out urgent rehabilitation measures. This will then be followed by the usual procedure for preparing the final damage assessment and the final disaster recovery programme. This innovation applies to all natural disasters as from 1 January 2023.</li><li>Allocation of resources to remedy the consequences of adverse climatic events which are insurable and eligible for State aid, in the form of co-financing of insurance premiums to insure agricultural production.</li><li>The granting of aid under the &#039;de minimis&#039; rules also for those agricultural holdings whose agricultural crops are 100 % damaged.</li><li>To remedy damage to the economy caused by natural disasters, companies, entrepreneurs, individuals, institutions and cooperatives established in the Republic of Slovenia may be granted non-repayable (subsidies) or repayable (loans, guarantees) funds, either in the form of loan funds or guarantee schemes.</li></ul>As mentioned above, the above amendments apply to all disaster recovery cases in 2023, but the Act also establishes the following additional emergency intervention measures to deal with the consequences of the floods in August 2023, which relate to assistance to the economy, employees and the self-employed.Employers are entitled to full reimbursement of wage compensation paid to workers who are unable to work during the period from 3 August 2023 to 31 December 2023 due to force majeure in the form of the consequences of the floods in August 2023, and are also entitled to partial reimbursement of wage compensation paid to workers on temporary lay-off because their employers are temporarily unable to provide them with work due to the consequences of the floods, until 31 October 2023 at the latest, with the Government being able to extend the measure until 31 December 2023.Workers are entitled to wage compensation of 80% of their base salary during the period of their inability to work and waiting for work due to the effects of the floods in August 2023.During the period of the aid, the employer may not terminate the employment contract for business reasons of the workers for whom the reimbursement of the wage compensation has been claimed, nor may there be any payment of profits, purchases of own shares or own shares in the business, payments of bonuses to the management for 2023 as from 3 August 2023, otherwise the employer must return the reimbursements.  The employer will also not be able to claim, inter alia, reimbursement of compensation for an employee who, as a result of a natural disaster, is prevented from working during the period of notice.As the reimbursements are considered State aid, the sum of the reimbursements must not be higher than the actual damage.The Act entitles volunteers who carry out voluntary work in the framework of a voluntary organisation to 100% paid leave of absence from work for a maximum of 7 working days to deal with the consequences of flooding.The one-off solidarity grant for serious damage to an employee caused by the natural disaster of the floods in August 2023, paid by employers in 2023, is not countable against the taxable amount of employment income up to EUR 10,000, according to the Act.The Act also provides for assistance to self-employed persons who were registered to carry out an activity no later than 1 July 2023 until the entry into force of the Act and who, as a result of the consequences of the floods, are unable to carry out their activity or carry it out to a significantly reduced extent. The Act grants aid for August, September, October, November and December in the amount of EUR 1,200 per month. The aid will be exempt from all taxes and contributions.The Act also provides for temporary measures in the area of the economy, namely: (1) liquidity measures in the area of the economy; (2) transitional regulation of the threshold value for public procurement in cases of major disaster recovery; (3) (non-)application of contractual penalty provisions in cases of major disaster recovery; (4) raising the level of the estimated value for public works procurement in cases of major disaster recovery.Taking into account the predicted climate change and the increasing occurrence of storms causing significant damage to property, the adopted Act represents an important step towards enabling a more rapid recovery of the situation in areas affected by natural disasters.

The Act establishes the possibility of a rapid and effective elimination of damage resulting from natural disasters.

Act on amendments and supplements to the Natural Disaster Recovery Act (ZOPNN-F) in force

The National Assembly, during its 43rd extraordinary session, rejected the proposal for a suspensive veto by the National Council on the Long-Term Care Act (hereinafter referred to as the &quot;Act&quot;). Thus, the National Assembly confirmed the Act and repealed the previous act of the same name.The aim of the Act is to upgrade and unify the regulation of long-term care, which is crucial for ensuring a high quality of life for people in all stages of life, particularly considering current demographic trends. The Ministry of Solidarity-Based Future drafted the Act, taking into account projections that place Slovenia among the third of European countries with the highest proportion of elderly population in the coming decades. Due to these demographic changes and the consequent increase in the proportion of inactive population and decrease in the active population, the existing resources from social security and other sources (e.g., the state budget) are already insufficient to finance the necessary level of support and assistance for all those in need of long-term care. As a result, an increasing financial burden is being shifted onto direct payments by users and their families. The Act aims to partially alleviate this financial burden by providing funding from compulsory insurance for long-term care, and state budget up to EUR 190 million, with only a smaller portion to be covered by users&#039; own contributions.The main novelties introduced by the Act are as follows:<ul><li>Transfer of authority for long-term care to the newly established Ministry of Solidarity-Based Future, which will in this role replace the Ministry of Health and the Ministry of Labour, Family, Social Affairs, and Equal Opportunities. This is expected to simplify the procedures and decision-making in the field of long-term care. At the same time, the Ministry is also the appellate body against the first-instance decisions of the centres for social services;</li><li>Precise definition of the types of long-term care services, including (i) assistance with basic activities, (ii) support with daily activities, and (iii) medical care related to basic daily tasks.</li><li>Regulation of non-monetary rights to long-term care (defined in hours), determination of monetary benefits (ranging from EUR 89 to EUR 491), and establishment of the right to a family caregiver who provides care services at the user&#039;s home;</li><li>Introduction of additional rights to long-term care, including services for strengthening and maintaining independence and co-financing of e-care services. Services for strengthening and maintaining independence (e.g., counseling, psychosocial and post-diagnostic support) will enable users to receive assistance and care that would otherwise only be available in institutions, while e-care services will be provided remotely, allowing users to stay at home longer and providing them with a sense of security;</li><li>Establishment of entry points at centres for social services, responsible for carrying out professional and administrative tasks related to the enforcement of rights of insured persons for long-term care. These entry points will also provide professional advice to help the user decide, which long-term care services available to them, to receive;</li><li>Implementation of long-term care through a public network, which will include public institutions, other legal entities, and independent entrepreneurial concessionaires. The public network will provide long-term care services in nursing homes and at users&#039; homes. For the implementation of this activity, certain conditions and obligations, including enrolment in the register of providers, have been specified;</li><li>Establishment of a system of mandatory checks on the general conditions for the acquisition of long-term care rights throughout the course of application, with a view for preventing the unjustified use of the rights.</li></ul>The Act, which will come into effect one day after its publication in the Official Gazette, envisions a gradual implementation of the changes until December 1, 2025.

The Act, which will come into effect one day after its publication in the Official Gazette, envisions a gradual implementation of the changes until December 1, 2025.

The new Long-Term Care Act has been adopted

The Court of Justice of the European Union (&quot;EU Court&quot;) in case no. C‑106/22, concerning the freedom of establishment within the EU, considered whether the defendant, the Hungarian competition authority Innovációs és Technológiai Miniszter (&quot;Ministry&quot;), was justified in rejecting the notified merger of the plaintiff, the Hungarian company Xella Magyarország Építőanyagipari Kft (“Xella Magyarország”).The Hungarian company Xella Magyarország, owned by a German company, which is ultimately owned by a company registered in Bermuda and is a manufacturer of concrete construction materials, challenged the Ministry’s decision before a Hungarian court, which prohibited its acquisition of the Hungarian company Janes és Társa, operating a gravel, sand, and clay quarry.The Ministry took a position that Janes és Társa should be considered a “strategic company” under the national foreign investment screening mechanism, the establishment of which is required by Regulation (EU) 2019/452 of the European Parliament and of the Council of 19 March 2019 establishing a framework for the screening of foreign direct investments into the Union (“Regulation 2019/452”). According to the Ministry, the transfer of ownership of a strategic company to an indirect owner registered in a third country, namely Bermuda, would pose a long-term risk to the reliability of the supply of raw materials, such as gravel, sand, and clay, to the construction sector.During the preliminary ruling procedure, the Hungarian court referred a question to the EU Court, asking whether the relevant national foreign investment screening mechanism, which allows the prohibition of investment in a company regarded as strategic:<ul><li>When there is a concentration of a strategic company with another company belonging to a group of companies established in several Member States, over which an undertaking from a third country exercises a majority control, or</li><li>When the concentration would harm or could harm the national interest in ensuring the reliability of supply to the construction sector, in particular at the local level, concerning basic raw materials, such as gravel, sand, and clay</li></ul>is compatible with EU law.The EU Court ruled that the question must be examined solely in the light of the freedom of establishment enjoyed by EU companies and that such foreign investment screening mechanism opposes the fundamental freedom, as set out in Article 49 TFEU, allowing individuals or legal entities to pursue economic activities, stably and continuously in one or more Member States, without impediments created by those Member States.The EU Court found that the relevant merger does not fall within the scope of Regulation 2019/452 and, therefore, cannot be subject to review under the foreign investment screening mechanism, as this regulation exclusively applies to investments by companies from third countries into the European Union. The fact that a company registered in a third country exercises majority control over an investor with a permanent residence in the European Union does not justify the application of Regulation 2019/452. According to the EU Court, the relevant foreign investment screening mechanism clearly constitutes a limitation of the freedom of establishment. These limitations, however, cannot be justified with the goal of ensuring a reliable supply of gravel, sand, and clay for the construction sector as it does not concern a fundamental societal interest, within the meaning of the established case law of the EU Court, as is the case of ensuring the supply to the petroleum, telecommunications, and energy sectors.

Limitations on freedom of establishment cannot be justified with the goal of ensuring a reliable supply of gravel, sand, and clay for the construction sector as it does not concern a fundamental societal interest, within the meaning of the established case law of the EU Court.

The supply of gravel, sand, and clay to the construction sector cannot justify a restriction on the freedom of establishment

On July 12, 2023, an amendment to the Industrial Property Act (ZIL-1F) was published in the Official Gazette of the Republic of Slovenia, which will enter into force on July 27, 2023 (hereinafter referred to as &quot;ZIL-1&quot;).The key changes introduced by the amendment focus on simplifying and reducing the procedures related to patent registration, expediting the acquisition of information in the patent application process, streamlining the administrative procedure for revocation and invalidation of trademarks, prohibiting simultaneous protection of a European patent as a national patent, and other changes in the field of patent protection, which will be listed below. These significant changes will contribute to improving the system of industrial property in Slovenia and align national legislation with Directive (EU) 2015/2436 on the approximation of the laws of the Member States relating to trademarks, Regulation (EU) 2017/1001 on the European Union trademark, and the European Patent Convention.       a.) Faster information retrieval processThe amendment grants the Intellectual Property Office of the Republic of Slovenia (hereinafter referred to as the &quot;Office&quot;) a new competence to, with the consent of the applicant, transmit the applicant&#039;s patent application to other offices for conducting searches on the state of the art and providing written opinions on the fulfillment of conditions for the claimed invention. The Office&#039;s collaboration with other patent offices will now enable applicants to obtain more specific information about whether their invention actually meets the requirements for patent granting in a faster manner.Additionally, certain applicants will benefit from financial advantages as some international organizations, upon concluding relevant agreements with national authorities, provide financial relief in paying fees for searches. For example, the European Patent Office (hereinafter referred to as the &quot;EPO”) offers a 80% fee reduction for searches to natural persons, small and medium-sized enterprises, and universities. Similar reductions are also available for filing European or PCT applications for the same invention. Consequently, this change will result in a reduction of the financial burden for applicants.       b.) Administrative procedure for revocation and invalidity of trademarksUntil now, the procedures for revocation and invalidation of trademarks were conducted solely before the District Court in Ljubljana. However, in line with Directive (EU) 2015/2436, these procedures will be now carried out directly before the Office after the amendment comes into effect. In the new Chapter 8a of the ZIL-1, the amendment will regulate the content of claims and grounds for revocation or invalidation of trademarks. Requests for revocation or invalidation of trademarks will now be submitted to the Office, which will decide on these requests in administrative proceedings, thus alleviating the burden on the courts.       c.) Other patent-related noveltiesBased on the European Patent Convention, the amendment also aligns exceptions to patent protection, thereby eliminating possibilities for diverse interpretations of relevant provisions. In accordance with the existing interpretation practice of Article 11 of ZIL-1, the amendment explicitly enacts exceptions to patent protection, such as aesthetic creations, games or business methods, computer programs, and presentations of information. On the other hand, the amendment introduces the possibility of patent protection for the first use of a substance or mixture in processes for the treatment of the human or animal body.The amendment also grants the patent holder the right to prevent indirect use of the invention protected by the patent. The patent holder may now prevent a third party, who does not obtain holder’s consent, from supplying or offering supply means related to a part of the invention which is essential for its use to individuals who are not entitled to exploit the invention or patent, provided that the third party knows or should know that those means are suitable and intended for the use of the invention.Furthermore, the amendment provides greater legal certainty in case of the declaration of nullity of a European patent at the EPO level. In such cases, the Office will, ex officio, declare the patent registered in the national register as null. Additionally, the amendment introduces a prohibition on simultaneous protection or unitary effect of a European patent and a national patent in Slovenia. Namely, if a European patent and a national patent are granted to the same person for the same invention, with the same filing date and the same claimed priority date, the national patent will be deemed without legal effect from the date when the EPO published the mention of the grant of the European patent in the European Patent Bulletin.

On July 12, 2023, an amendment to the Industrial Property Act was published in the Official Gazette of the Republic of Slovenia, which will enter into force on July 27, 2023.

Amendment of Slovenian Industrial Property Act (ZIL-1F)

With a view to achieving climate neutrality and targets for the proportion of energy from renewable sources in gross final consumption in the Republic of Slovenia, the National Assembly adopted on 6 July 2023 the Act on the introduction of installations for the production of electricity from renewable energy sources (&quot;ZUNPEOVE&quot;), which will enter into force on the fifteenth day following its publication in the Official Journal of the Republic of Slovenia. The Republic of Slovenia is obliged to meet its renewable energy targets in accordance with the legal framework of the European Union. The Republic of Slovenia has set a target of 25% renewable energy in final energy consumption by 2020 and, with the adoption of the National Energy and Climate Plan, is committed to achieving a target of at least 27% by 2030, with these targets to be further increased with the updating of the Directive on the promotion of the use of energy from RES1 in the framework of the &quot;Ready for 55&quot; package. The transition to renewable energy is not only important from an environmental perspective, but also in view of the growing need for electricity self-sufficiency in the EU countries.In accordance with the new ZUNPEOVE, the Government of the Republic of Slovenia will adopt an action plan for the implementation of the Spatial Development Strategy of Slovenia, which will identify priority areas for the placement of installations for the production of electricity from solar and wind energy. Nevertheless, the priority areas for the placement of photovoltaic installations will be the roofs of buildings, paved areas of car parks, road land and road structures, railway areas, the area of electricity production facilities, areas of closed landfills, areas of abandoned mineral mines and areas of inactive waste dumps. To this end, ZUNPEOVE will also intervene in the areas of other laws, e.g. the Water Act and the Road Act. It will also be possible to generate electricity from photovoltaic installations and wind power generation installations in areas of agricultural and forest land, provided that this does not hinder the land from serving its primary purpose.An important novelty introduced by ZUNPEOVE is the regulatory sandboxes, which will be designed to test new and advanced technologies, products or approaches in the field of electricity generation from renewable energy sources and storage, or to re-purpose existing ones. Regulatory sandboxes will be approved by the Government of the Republic of Slovenia and will also be granted exemptions from specific provisions of regulations in the fields of energy, spatial planning, construction, mining, etc. for their use. The Government will grant approval if the proposed project will significantly contribute to the development of electricity generation from renewable energy sources, if this benefit outweighs the severity of the interference with the provisions of specific regulations in the aforementioned fields, and if the approval of the sandbox does not contravene EU regulations.Furthermore, the ZUNPEOVE foresees the granting of geothermal concessions for the implementation of projects for the exploration of geothermal energy potential and the exploratory phase of electricity production using geothermal energy. A legal or natural person wishing to obtain a geothermal concession will have to submit an initiative to initiate the procedure to the Ministry in charge of energy.In addition, ZUNPEOVE will reduce the proportion of consents required for the installation of a photovoltaic installation on a co-owned property or on the common parts of a commonhold building. It will now be necessary to obtain the consent of co-owners holding more than three quarters of the ideal shares or of commonhold building owners holding more than three quarters of the co-ownership shares in the common parts of the building. The same will apply if an easement or a building right has to be created in order to carry out the photovoltaic installation. Under certain conditions, ZUNPEOVE also provides for the establishment of an easement or building right for the installation, maintenance and operation of a photovoltaic installation on a building owned by the State or a self-governing local authority free of charge. Special mention should also be made of the introduction of the possibility to pay a one-time compensation to the municipality in which a new wind generation installation is installed, which may be determined by the Government of the Republic of Slovenia.The adoption of the ZUNPEOV represents an important step towards increasing the proportion of energy from renewable energy sources, which is key to ensuring sustainable energy, a higher level of self-sufficiency in electricity production and greater reliability of energy supply.

The adoption of the ZUNPEOV represents an important step towards increasing the proportion of energy from renewable energy sources, which is key to ensuring sustainable energy, a higher level of self-sufficiency in electricity production and greater reliability of energy supply.

Act on the introduction of installations for the production of electricity from renewable energy sources

The Ministry of Finance published a proposal of the Minimum Tax Act (hereinafter: &quot;ZMD&quot;) on 23 June 2023. With the ZMD, the Council Directive (EU) 2022/2523 on ensuring a global minimum level of taxation for multinational enterprise groups and large-scale domestic groups in the Union of December 14, 2022 (hereinafter: &quot;Directive&quot;) is implemented into the Slovenian legal system. Its aim is to establish a common framework for a global minimum tax rate in the EU based on a common approach from the OECD model rules in such a way that the revenues of multinational enterprise groups and large-scale domestic groups with a total revenue of EUR 750 million and more (hereinafter: &quot;Groups&quot;) will be taxed with a tax rate of at least 15 %. This will be achieved by the so-called top-up tax. The introduction of the top-up tax liability is foreseen in the Directive as an option of the Member States. Slovenia will have to officially notify the Commission of its choice, which will provide adequate certainty to the tax authorities of other Member States, third country jurisdictions and Groups. Constituent entities of Groups located in Slovenia will therefore have to pay top-up tax to Slovenia.The main goals of the ZMD are the establishment of a system against tax base erosion, fair, transparent and stable corporate taxation, the elimination of excessive tax competition and the prevention of aggressive tax planning as well as consistency in determining and administering rules against base erosion (predictability, without double or excessive taxation).Main solutions of the ZMD:- The ZMD will be an independent law which will apply separately from the Corporate Income Tax Act (Official Gazette of the RS, no. 117/06 and subsequent, ZDDPO-2) and which will consistently implement the provisions of the Directive into the Slovenian legal system.- It introduces a minimum tax rate (hereinafter: &quot;MDS&quot;) of 15 %. It will affect Groups with constituent entities in countries in which the effective tax rate (hereinafter: &quot;DDS&quot;) is lower than the MDS. The DDS will be determined for each financial year and for each country separately by dividing the adjusted covered taxes constituent entities in the country by their net qualifying income. The difference between the MDS and the so determined DDS is the rate of the top-up tax. The top-up tax will increase the Group&#039;s effective tax rate to the MDS level. It will be applied to the excess profit in accordance with the standardized basis and top-up tax calculation mechanism.- In order to comply with the rules in of the Directive, the Groups will proceed in five steps. Namely, in the first step they will identify constituent entities within the scope of the Directive, identify excluded entities and safe harbors. In the second step they will calculate the qualifying income or loss for each constituent entity with adjustments to the financial accounting net income or loss. The third step will be the calculation of adjusted covered taxes. The fourth step will be the calculation of the DDS for each country (for all constituent entities in the country) and, if the DDS is lower than the MDS, the top-up tax will be calculated. The fifth step will be the fulfillment of the top-up tax obligation in accordance with applicable rules.- ZMD provides for a de minimis exclusion for Groups whose average revenue is less than EUR 10,000,000 and whose average qualifying income or loss in the jurisdiction is less than EUR 1,000,000. Such Groups will not pay the top-up tax even though their DDS is lower than the MDS in that country.As follows from the accompanying text to the ZMD proposal, higher annual tax revenues of around EUR 220 billion on global level are foreseen as a result of the implementation of the minimum taxation rules. As far as Slovenia is concerned, a total of 412 Groups with parent companies in Slovenia or abroad and subsidiaries in Slovenia were identified on the basis of Country-by-country reporting data in 2019. From these, 144 Groups in Slovenia had DDS below 15 % in 2019. Their average unweighted DDS was 8.72 %. According to estimates, the ZMD should affect a total of 184 Groups. The total annual tax liability of the companies that are part of these Groups and are residents in Slovenia amounts to around EUR 27 million.According to the deadline of the Directive, ZMD should be adopted by the end of December 2023 at the latest. It should enter into force for business years starting on 31 December 2023 or later. Comments on the proposal are collected until July 16, 2023.

The main goal are the establishment of a system against tax base erosion, fair, transparent and stable corporate taxation, the elimination of excessive tax competition and the prevention of aggressive tax planning as well as consistency in determining and administering rules against base erosion.

Proposal of the Minimum Tax Act

In March of this year, the European Court of Human Rights (“ECtHR”) informed Slovenia that three complaints by Slovenian fishermen against Croatia concerning alleged violations of the European Convention on Human Rights (“ECHR”) had been submitted to Croatia. This means that the ECtHR has found the complaints of the Slovenian fishermen admissible and will decide on its merits.According to Article 36(1) of the European Convention on Human Rights, in all cases before a Chamber or the Grand Chamber, a High Contracting Party one of whose nationals is an applicant shall have the right to submit written comments and to take part in hearings. In its letter of 5 June 2023, Slovenia informed the ECHR of its intention to intervene in this case and thus provide assistance and support in protecting the legal interests of Slovenian fishermen who have been harmed by Croatia&#039;s non-recognition of the arbitral award. At this stage, Slovenia is only announcing its intervention and does not state its positions on the proceedings.The background to these complaints is the Arbitration Agreement between Croatia and Slovenia, which was signed on 4 November 2009 (“the Arbitration Agreement”) with the aim of resolving a border dispute between the two countries arising after the independence of the former Yugoslavia. Specifically, the dispute concerned the delimitation of the boundaries in the Bay of Piran and on land.The Arbitration Agreement established the Arbitral Tribunal, which on 29 June 2017 delivered its Final Award in the arbitration between Slovenia and Croatia, thus determining the course of the maritime and land boundary between the two countries. In the Final Award the Arbitral Tribunal determined (i) the entire land border between Slovenia and Croatia, (ii) the maritime boundary between the two countries, which had never been delimited before, and (iii) Slovenia&#039;s junction to the high seas.Despite the Arbitral Tribunal&#039;s ruling, Croatia has not recognized the validity of the Agreement and is not implementing its obligations in the way it was ordered to do by the Arbitral Tribunal’s Final Award. In the present case, the Croatian authorities are charging fines to Slovenian fishermen for fishing in an area of the Bay of Piran which, according to the arbitration ruling, otherwise belonged to Slovenia. Since the Slovenian fishermen have exhausted all legal remedies in Croatia, including at the Croatian Constitutional Court, they have initiated proceedings before the ECtHR, in which, as stated above, Slovenia will also intervene. Croatia has the possibility to take a position on Slovenia&#039;s intervention later in the process.

In March of this year, the ECtHR” informed Slovenia that three complaints by Slovenian fishermen against Croatia concerning alleged violations of the ECHR had been submitted to Croatia. This means that the ECtHR has found the complaints of the Slovenian fishermen admissible and will decide on its merits.

Slovenia to intervene in fishermen’s case against Croatia before the ECtHR

The National Assembly, at its session of 25 May 2023, adopted the Act on Infrastructure for Alternative Fuels and the Promotion of the Transition to Alternative Fuels in Transport (ZIAG, hereinafter the &quot;Act&quot;), which implements Directive 2014/94/EU of the European Parliament and of the Council of 22 October 2014 on the establishment of an infrastructure for alternative fuels into the Slovenian legal order. The objective of the Act is to establish a dense publicly accessible network of refuelling and supply infrastructure for alternative fuels in transport and to increase the share of alternative fuel vehicles.The Act provides for three levels of infrastructure development for alternative fuels.<ol start="1"><li>It establishes strategic planning for alternative fuels infrastructure, namely:</li></ol><ul><li>Charging infrastructure for vehicles, vessels and stationary aircraft,</li><li>supply infrastructure for natural gas vehicles and vessels,</li><li>hydrogen supply infrastructure,</li></ul>whereby the Act focuses on the planning of a network of electric charging infrastructure for road transport. A coordinated planning approach will take into account the long-term impacts of the integration of transport into the electricity system on the protection and stability of the grid, which will lead to the establishment of a public utility service (GJS) for the identification of sites, establishment and management of charging parks with a capacity of 300 kW and above. The way in which the sites to be used for the electric charging structure will be planned will be based on the efficient use of the existing supporting infrastructure, such as transport, energy, communication and other complementary infrastructure.<ol start="2"><li>The Act provides for the introduction of a long-term dedicated source for the co-financing of measures for the transition to alternative fuels, namely, funds from the annual levy on the use of motor vehicles and trailers registered in Slovenia in road transport, to be determined by the Government by regulation, will be earmarked, if necessary, for the implementation of the measures provided for in the Act. Additional contributions are therefore not foreseen.</li></ol><ol start="3"><li>The Act also provides for the establishment of the Centre for the Promotion of the Transition to Alternative Fuels as the implementing body for the implementation of public calls for tenders and calls for proposals for the allocation of earmarked funds for the establishment of appropriate charging and refuelling infrastructure, for the modification of the fleet structure and for other support measures to accelerate the transition to alternative fuels.</li></ol>The Act also lays down technical rules for the installation, operation and maintenance of charging and supply infrastructure.In order to adequately plan and financially support actions that will target areas where there are gaps in publicly available alternative fuels infrastructure, the Act introduces mandatory registration of charging and refuelling infrastructure and the provision of information on location, capacity, price, etc. to a national access point. The data from the national access point will also be transmitted to the digital platform for investment promotion, where it will be merged with data on unoccupied planned sites (connection capacity, parking space availability) from electricity operators&#039; plans and local plans.Transparency of the existing charging infrastructure will benefit users, owners and investors, by increasing the utilisation of existing infrastructure and directing investors to sites that are not yet occupied.

The objective of the Act is to establish a dense publicly accessible network of refuelling and supply infrastructure for alternative fuels in transport and to increase the share of alternative fuel vehicles.

Act on infrastructure for alternative fuels and promotion of the transition to alternative fuels in transport

In the Case no. T-2/21 concerning the trade mark protection in the EU, the General Court of the EU (the “General Court“)assessed whether the defendant, the European Union Intellectual Property Office (the ”EUIPO“), was justified in refusing the application of the claimant, Emmentaler Switzerland, for registration of the trade mark &quot;emmentaler&quot; as a cheese with a protected designation of origin.A protected designation of origin is a quality scheme protected at EU level covering agricultural products and foodstuffs originating in a particular region, place or country. The names of those products most closely linked to the geographical area in which they are produced are protected as protected designations of origin, as the geographical area influences their characteristics. All production and processing operations must take place in the defined geographical area and the raw materials used must originate from that area. A protected designation of origin represents a high level of protection that severely limits the possibility of producing or growing a crop or food under the name of protected trademark.The EUIPO refused the application for registration on the basis of Article 7(1)(c) of Regulation (EU) 2017/1001 of the European Parliament and of the Council of 14 June 2017 on the European Union trade mark (the “Regulation“), which prohibits the registration of trade marks consisting exclusively of signs or indications which may serve, in trade, to designate the kind, quality, quantity, intended purpose, value, geographical origin or the time of production of the goods or of rendering of the service, or other characteristics of the goods or service. Such signs are descriptive, which is closely related to generic signs. In both cases, such signs have no distinctive character and are considered incapable of performing the essential function of a trade mark, namely to identify the commercial origin of the product or service.In its judgment of 24 May 2023, the General Court upheld the decision of the EUIPO on the descriptiveness of the trade mark applied for, that the sign »emmentaler« is widely and commonly understood by the relevant German public as designating a type of cheese. As regards the examination of the presence of descriptive signs, the EUIPO focused only on the German market, which is, however, sufficient to refuse registration of the sign. The General Court held that the EUIPO was correct in finding that the mark applied for is descriptive in a part of the EU, namely in one EU Member State.Furthermore, the General Court noted, with regard to the protection of the trade mark applied for as a collective mark, that Article 74(2) of the Regulation provides that, by way of derogation from Article 7(1)(c) of the Regulation, signs and indications which may serve, in trade, to designate the geographical origin of the goods or services in question may constitute EU collective marks. However, according to the General Court, that derogation must be interpreted narrowly and, therefore, collective marks cannot include signs which are regarded as indicating the type, quality, quantity, purpose, value, time of manufacture or other characteristics of the products in question, but only signs which are to be regarded as indicating the geographical origin of those products. Since the mark applied for is descriptive of a type of cheese for the relevant German public and is not perceived as an indication of the geographical origin of that cheese, the General Court concludes that it is not entitled to protection as a collective mark.

Since the mark applied for is descriptive of a type of cheese for the relevant German public and is not perceived as an indication of the geographical origin of that cheese, the General Court concludes that it is not entitled to protection as a collective mark.

The term ‘emmentaler’ cannot enjoy protection as a European Union trade mark for cheeses

On April 13, 2023, a group of members of Slovenian Parliament submitted a proposal for amendments of the Animal Protection Act (hereinafter: &quot;Proposed Amendment&quot;). Proposed Amendment is currently in the second reading within the Parliament.The key goal of the Proposed Amendment, which was received rather negatively by the Veterinary Chamber of Slovenia, the Faculty of Veterinary Medicine and Slovenian farmers, is to strengthen the responsible ownership of animals as sentient beings, to reduce the number of abandoned and mistreated animals, and to deepen the awareness of the values of the animal welfare.The Proposed Amendment is addressing implementation of the following legislative solutions:<ul><li>establishment of transitional stables for confiscated animals;</li><li>establishment of the active cooperation of associations that work in the public interest in advising animal owners and cooperation with supervisory authorities through appointed advisors for animal protection;</li><li>assigning the status of &quot;working animals&quot; to therapy dogs;</li><li>enforcement of mandatory marking of cats;</li><li>establishment of the legal basis for mobile slaughterhouses;</li><li>complete ban on tying dogs;</li><li>establishment of mandatory internal video surveillance in slaughterhouses;</li><li>establishment of a specialized inspection for animal protection;</li><li>enactment of gross negligence as animal cruelty;</li><li>broadening of the definition of animal cruelty, which can also be committed through gross negligence;</li><li>prohibition of the use of all animals for circus performances.</li></ul>Views with respect to the Proposed Amendment were addressed also by the Government at its 96th correspondence meeting. Slovenian Government generally supports the proposal and encourages general discussion of Proposed Amendment within the Parliament. However, it expressed that some of the proposed legislative solutions are underregulated and should be addressed more comprehensively. Government also emphasized that general discussion should include experts, professional institutions and associations and therefore enable a comprehensive confrontation of all arguments.

The key goal of the Proposed Amendment is to strengthen the responsible ownership of animals as sentient beings, to reduce the number of abandoned and mistreated animals, and to deepen the awareness of the values of the animal welfare.

Proposal for an amendment of the Animal Protection Act

In June, Amendment C to the Administrative Dispute Act (&quot;ZUS-1&quot;), published in the Official Journal of the Republic of Slovenia No 49/2023 of 28 April 2023, will enter into force.The amendment introduces several important novelties, the most significant of which is undoubtedly the change in the composition of the court under Article 13 of the ZUS-1. The primary form of adjudication in administrative disputes has been changed from a single judge to a three-judge panel. Nevertheless, a single judge may submit a proposal to the President of the Court that a case be heard by a three-judge panel if it is a complex case on questions of law or fact or if the determination of the action may be expected to resolve an important question of law, in particular if it is a question of law on which there is no case-law or the case-law is inconsistent. The single judge may make such a submission up to the date of the preparatory hearing and the first date of the main hearing or the date of submission of the case to the sitting. The President of the Court shall rule on his or her motion by special decision against which there is no appeal. The composition of the Supreme Court of the Republic of Slovenia when it decides on the appeal depends on whether it was a single judge or a panel of judges that decided the case at first instance. If the decision at first instance was taken by a single judge, the Supreme Court of the Republic of Slovenia will also rule according to a single judge. If the appeal was decided at first instance by a panel of judges, the Supreme Court will also decide the appeal in a panel of three judges. The same applies to the proceedings on the application for a retrial.The amendment of the provisions on the preparation of the material will also be important to improve the efficiency of the administrative dispute procedure. The court will be able to limit the size and number of pleadings to be filed by the parties and to set a time limit within which each party must prepare a written summary of its pleadings. The time limit should not be less than 15 days. If a party fails to submit a summary of the pleading within the time limit, the pleading will not be taken into consideration. The court must, of course, specifically warn the party of this consequence.Above all, the fact that the court will now be able to decide without a hearing if the factual situation on which the administrative act is based is not disputed between the parties will contribute to the efficiency and speed of administrative litigation. However, if the factual situation is disputed, the court will still be able to rule without a hearing in certain cases, provided that:<ul><li>it is apparent from the lawsuit, the contested act and the administrative files that the lawsuit should be upheld and the contested act annulled on the basis of Article 64(1) of the ZUS-1, and that there was no side participant with an opposing interest in the administrative proceedings,</li><li>the parties merely adduce new facts and evidence which cannot be taken into account by the court in accordance with the present law (Article 52 of the ZUS-1), or the new facts and evidence adduced are not relevant to the decision,</li><li>the parties propose only evidence that is not necessary to establish the disputed facts, which can be established without the taking of the proposed evidence,</li><li>the dispute is between the same parties, involves a similar factual and legal basis and has already been finally decided by a court,</li><li>the court decides only on the basis of the documents and the parties have agreed not to hold a main hearing, and the court is not bound by the facts established in the procedure for issuing the administrative act.</li></ul>Now, in the event of annulment of a contested administrative act, the court may also determine in the judgment the manner in which its decision will be enforced (Article 64(3) of the ZUS-1). In such a case, the competent authority must issue a new administrative act within 30 days of receipt of the judgment or within a time limit set by the court. In doing so, in accordance with Article 64(5) ZUS-1, it is bound by:<ul><li>pronouncement of judgment;</li><li>the facts as established by the court at the main hearing;</li><li>the court&#039;s legal opinion on the application of the substantive law;</li><li>other positions of the court relating to the proceedings.</li></ul>

In June, Amendment C to the Administrative Dispute Act, published in the Official Journal of the Republic of Slovenia No 49/2023 of 28 April 2023, will enter into force.

Amendment to the Administrative Dispute Act ensures greater efficiency and speed of decision-making

At its session on 21 April 2023, the National Assembly adopted an amendment to the Labour and Social Security Registers Act (ZEPDSV), which introduces certain changes to registers of working time, the recording of additional information on working time and the introduction of mandatory electronic registers for violators of these rules. It should be noted that the daily obligation to keep records of working time already exists and that the changes only specify the maintenance of the register. The aim is to pursue the interests of both parties, employees and employers, and to ensure the authenticity of the registers.In practice, there has been confusion for which employees records of working time should be kept. The amendment to Article 2 of the ZEPDSV clarifies the definition of a worker - it extends to not only persons working on the basis of an employment contract, but also to those working on other legal bases (including student and author work, contract for work, etc.).The amendment also provides a more detailed obligation of the employer to provide information from the register of employees referred to in Article 15 of the ZEPDSV. Employers must provide employees’ information to the Health Insurance Institute of Slovenia, on the day of commencement of work under the employment contract, and no later than by the time they start working. If the employee does not start work on that day for justifiable reasons, the employer shall provide the information no later than the day agreed in the employment contract as the day of commencement of work. The employer shall communicate the information at the time of registration for insurance on the prescribed forms.The biggest change concerns the register of working time, where the following information that the employer must enter in the register on a daily basis is added to Article 18 of the ZEPDSV, namely:<ul><li>the time of arrival at work and the time of departure from work,</li><li>the use and extent of use of breaks during working time,</li><li>the hours worked in other special working conditions arising from the organisation of working time,</li><li>hours worked during irregularly distributed working time or during temporarily reassigned working time, and</li><li>the running total of hours in the week, month or year, showing the reference period taken into account for the purposes of the irregular working time and the temporary redeployment of full-time work.</li></ul>The records may be kept electronically or manually, however it is important to note that the new Articles 19a and 19b of the ZEPDSV provide for the obligation of electronic record-keeping in the case of breaches of the provisions of ZEPDSV, when the employer has been fined and has complied with the trade union&#039;s proposal for electronic record-keeping.A new obligation is also imposed on employers, namely to provide their workers with access to the register of working time regarding information relating to them. Employers must inform them on the information in writing or digitally for the previous month by the end of the payday. Also, employers must keep the register of working time and documentation on the basis of which the information is entered into the register, at the employee’s registered office or place of work.Fines for offences are now determined in a range, the persons who can be also be sanctioned are responsible persons of employers of legal persons, individual entrepreneurs or self-employed individuals, responsible persons in state bodies or local authorities, and responsible persons in state bodies or other organisations with public authority. A fine higher than the minimum fine may also be imposed under the fast-track procedure.

At its session on 21 April 2023, the National Assembly adopted an amendment to the Labour and Social Security Registers Act, which introduces certain changes to registers of working time, the recording of additional information on working time and the introduction of mandatory electronic registers for violators of these rules.

New changes in the area of labour registers

On 28 March 2023, following an urgent procedure, the National Assembly adopted the Act Amending the Foreigners Act (hereinafter: &quot;Amendment&quot;), which entered into force on 27 April 2023, the day after its publication in the Official Gazette of the Republic of Slovenia.The Foreigners Act (hereinafter: &quot;ZTuj-2&quot;) defines the conditions and means of entry, exit and stay of foreigners in the Republic of Slovenia, whereby the main solutions brought by the Amendment of ZTuj-2 are the following:<ul><li>the date on which the provision pursuant to which the extension of the temporary residence permit for family members of foreigners and the issuance of a permanent residence permit will require passing a Slovenian language examination shall enter into force has been postponed to 1 November 2024, whereby in the meanwhile the following transitional period shall apply: (i) in the period between 27 April 2023 and 27 October 2023 the condition of knowledge of the Slovenian language does not yet have to be met; (ii) in the period between 28 October 2023 to 31 October  2024, only in the proceedings regarding the extension of the residence permit due to family reunification, a certificate of participation in the program of learning the Slovenian language and knowledge of the Slovenian society at the entry level will have to be submitted; (iii) as of 1 November 2024 in the procedure for extending a temporary residence permit due to family reunification and in the procedure for issuing a permanent residence permit, a certificate of successfully passing the Slovenian language examination will have to be submitted;</li><li>reintroduction of free financing of Slovenian language courses for all categories of foreigners who were entitled to free financing of courses before the adoption of ZTuj-2F;</li><li>in order to relieve burden of the administrative units the possibility of serving temporary residence permits issued in the process of extending or issuing a further temporary residence permit and permanent residence permits personally also by post is being added;</li><li>the storage of biometric data on the foreigner’s facial image and fingerprints is also envisaged for the purpose of uniquely identifying foreigners in the procedure for the renewal and issuance of a further temporary residence permit and in cases of extending the certificate on the rights of frontier worker;</li><li>change in the concept of decision-making on working-post changes with the same employer, changes of employer or employment with two or more employers, namely the abolition of the written approval in the form of a decision, which is being substituted by the consent from the Employment Service of the Republic of Slovenia;</li><li>the introduction of a »one-stop-shop« for the residence and work permit procedure, in accordance with which the foreigner or his/her employer submits a single application for a single residence and work permit to the administrative unit or to the competent diplomatic representation or consulate of the Republic of Slovenia abroad;</li><li>the possibility of crossing the state border in cases where a foreigner has applied for the extension or further issuance of a residence permit and the application has not yet been decided, however, the foreigner has left the territory of the Republic of Slovenia, is being added, which allows foreigners, who do not require a visa to enter the Republic of Slovenia, to enter the Republic of Slovenia for the purpose for which they will be issued a temporary residence permit while the application is being decided;</li><li>the abolition of the obligatory six-monthly ex officio verification of the condition of sufficient means of subsistence by the administrative unit.</li></ul>The Amendment emphasizes the principle of economy of the procedure and pursues the goal of eliminating unnecessary administrative obstacles, thereby providing a basis for faster resolution of administrative cases under ZTuj-2 within the jurisdiction of administrative units, which will significantly contribute to reducing backlogs in this area.

The Amendment emphasizes the principle of economy of the procedure and pursues the goal of eliminating unnecessary administrative obstacles, thereby providing a basis for faster resolution of administrative cases under ZTuj-2 within the jurisdiction of administrative units.

Amendment of the Foreigners Act

On 20 April 2023, the European Parliament adopted the Markets in Crypto-assets Regulation (hereinafter: MiCA Regulation) by a great majority.It is a comprehensive regulation of the field of cryptocurrencies at the EU level, currently unique in the world. The goals, which the MiCA Regulation aims to achieve are transparency of crypto-asset transfers, control over crypto-asset service providers, consumer protection, prevention of market manipulation and prevention of money laundering, while still maintaining investment and development potential of the industry in the EU. It is part of the larger digital finance package, which, in addition to the MiCA proposal, also contains a digital finance strategy, a Digital Operational Resilience Act (DORA) – that will cover crypto-asset service providers as well - and a proposal on distributed ledger technology (DLT) pilot regime for wholesale uses.Main solutions of the MiCA Regulation may be briefly presented as follows:<ul><li>Crypto-asset service providers will need an authorization to operate in the EU, which will be granted by national authorities and will be valid throughout the EU. As for the largest providers of crypto-asset services, national authorities will regularly send relevant information to the European Securities and Markets Authority (hereinafter: ESMA). Currently, crypto companies have to comply with 27 different regulatory frameworks in EU member states. Under MiCA, pan-European regulations will apply, allowing companies to operate across the entire EU market with the authorization granted in one member state.</li><li>Introduction of important obligations crypto-asset service providers will have towards customers, including appropriate communication and business methods, adequate reserves to ensure liquidity and necessary reimbursement procedures in case of loss of customer funds. In addition, all so-called &#039;stable coins&#039; will be overseen by the European Banking Authority (EBA), with the issuer&#039;s presence in the EU a precondition for each issuance.</li><li>Detailed rules regarding the prevention of abuse in the crypto-assets market, especially regarding market manipulation and insider trading.</li><li>Establishment of a crypto-asset service providers register and determination of ESMA supervisory rights and sanctions for non-compliance in relation to providers.</li><li>Monitoring the environmental footprint of actors in the crypto-assets market.</li></ul>The regulation does not duplicate the updated legislation on anti-money laundering (hereinafter: AML). However, among other, it establishes enhanced checks in line with the EU AML framework for crypto-asset service providers, whose parent company is located in countries listed on the EU list of third countries considered at high risk for anti-money laundering activities, as well as on the EU list of non-cooperative jurisdictions for tax purposes. Same may apply for shareholders and management of crypto-asset service providers.Non-fungible tokens (NFTs), i.e. digital assets representing real objects like art, music and videos, fall out of scope of MiCA, except if they fall under existing crypto-asset categories (separate regulation is foreseen for this part in the future).The MiCA Regulation must additionally be approved by the Council of the EU, followed by publication in the Official Journal of the EU. Implementation is envisaged gradually over a period of two years, starting in July 2024.

It is a comprehensive regulation of the field of cryptocurrencies at the EU level, currently unique in the world.

Regulation on Markets in Crypto-assets (MiCA) adopted by the European Parliament

On 22 March 2023, the National Assembly adopted the new Transnational Provision of Services Act, which entered into force on 18 April 2023 (hereinafter: &quot;the Act&quot;).The new Act transposes Directive (EU) 2020/1057 into the Slovenian legal order and newly implements three Regulations: Regulation (EC) No 1072/2009, Regulation (EC) No 1073/2009 and Commission Regulation (EU) 2016/403 supplementing Regulation (EC) No 1071/2009.The Act applies to legal and natural persons (registered for business) established in Slovenia and providing services in another EU country, and vice versa. These persons may provide services in another country on a temporary or regular basis, but must obtain an A1 certificate for their worker before providing services.The Act does not apply to the cross-border provision of services by seafarers in merchant navy companies, air crew and cabin crew, civil servants and contract workers, and Chapter III of the Act does not apply to foreign self-employed persons or foreign employers providing bilateral and transit transport services on the territory of the Republic of Slovenia.Under Article 4 of the Act, an employer can provide cross-border services if it meets the following conditions:- it carries out an activity in the Republic of Slovenia,- does not violate the most important provisions of labour law relating to the rights of the worker,- the service is provided in the context of an activity for which the employer is registered in Slovenia, except in the case of the secondment of a worker to a related economic undertaking; and- the service is provided on the employer&#039;s own account and under the employer&#039;s own direction on the basis of a contract concluded with the client of the service, a deed of secondment to a related economic undertaking or in the context of the activity of providing workers to the user.The same conditions apply mutatis mutandis to self-employed persons.Under the Act, employers or self-employed persons are obliged to submit an application for an A1 certificate before the commencement of the service or at the latest on the day of the service provision. A new provision is that both are now obliged to inform the Health Insurance Institution of the Republic of Slovenia (ZZZS) of any changes on an ongoing basis, within 5 days of such changes occurring.The Act now allows applicants to notify the ZZZS within 6 months of obtaining the A1 certificate that the start of the posting was later than the start of the validity of the A1 certificate issued, or that the posting was terminated prematurely or did not take place at all, on the basis of which the ZZZS will then amend the validity of the A1 certificate accordingly.The application for the issue of an A1 certificate shall be submitted through the national SPOT portal, through which other notifications provided for by the Act are also submitted.According to the new provisions, the exhaustion of a worker&#039;s right to rest, leave or a short period of absence due to sickness shall not be considered as an interruption of the cross-border provision of services or an interruption of the posting of the worker.Third-country nationals (posted workers or self-employed persons) may now provide services in the EU on the basis of a valid uniform residence and work permit or a temporary residence permit not issued for employment, self-employment or work, provided that the foreigner has the relevant consent of the Employment Service of the Republic of Slovenia or, on the basis of the Employment, Self-employment and Work of Foreigners Act, they have the right to free access to the labour market.The Act does not introduce any new conditions for the issue of an A1 certificate for the purpose of cross-border provision of services in one EU Member State, but in line with European legislation, the Act introduces new conditions for the issue of an A1 certificate for the purpose of cross-border provision of services in at least two EU Member States. These apply to employers as well as to self-employed persons. In addition to the national conditions, the applicant for an A1 certificate must also submit a declaration under criminal and material liability that the person for whom the A1 certificate is issued is expected to habitually carry out the work or the employment activity itself in at least two EU Member States.The applicant (or the person for whom the A1 certificate is obtained) may carry out work or self-employment on the basis of the A1 certificate for a maximum of the following 12 calendar months, and the Act also provides for the possibility of extending this to 18 months.The Labour Inspectorate will supervise employers and the Financial Administration will supervise self-employed persons.The Act also regulates the cross-border provision of services by foreign employers and foreign self-employed persons in the Republic of Slovenia. In this part, the legislator has also provided for some changes in the obligations of the foreign employer and the posted worker or driver in the cross-border provision of services, namely that the foreign employer must register with the Employment Service of the Republic of Slovenia before the provision of the service begins. In addition to the information already required, information on the address or GPS-coordinates of the location where the service will be provided is now also required in case the address is not available.The Act also introduces important changes in the level of fines, which are now significantly lower.The Act entered into force on 18 April 2023 and the provisions of Article 1(6), Chapter II, Chapter V, Article 26(2), (4), (7), (10) and Article 34 enter into force on 1 January 2024.

The Act entered into force on 18 April 2023 and the provisions of Article 1(6), Chapter II, Chapter V, Article 26(2), (4), (7), (10) and Article 34 enter into force on 1 January 2024.

New Transnational Provision of Services Act (ZČmlS-1)

The European Union (&quot;EU&quot;) has adopted a set of directives modernizing the field of European company law with the aim to digitally transform the functioning of the internal market. In particular the EU adopted the Directive 2019/1151 amending Directive (EU) 2017/1132 as regards the use of digital tools and procedures in the field of company law (the &quot;Digitalization Directive&quot;) and Directive (EU) 2019/2121 amending Directive (EU) 2017/1132 as regards cross-border transformations, mergers and divisions (the &quot;Mobility Directive&quot;).The Slovenian legislator will transpose these Directives into the national legal order by proposing an amendment to the Companies Act (the &quot;Amendment to ZGD-1&quot; or the &quot;Amendment&quot;), with the fundamental objective of facilitating the use of digital tools in the process of incorporation and operation of a company, supplementing the regulation of cross-border mergers and redefining the procedure for cross-border transformations and divisions of companies. The main novelties introduced by the Amendment are as follows:<ul><li>Online incorporation of capital companies: in order to make the incorporation of companies faster and easier, the Amendment to ZGD-1 provides a legal basis for the online incorporation of capital companies without the need for the founders to be physically present at the notary or registration authority. The establishment of a one-person limited liability company will be possible directly through the Slovenian Business Point portal (&quot;SPOT&quot;) using a qualified digital certificate. For other cases of incorporation of companies, the Amendment to ZGD-1 refers to the Notariat Act, which provides a legal basis for the remote drafting of a company agreement in the form of a notarial deed by means of a direct secure audio-video link between the founders and the notary.</li><li>The system of interconnection between the court registers: the Amendment to ZGD-1 introduces the above-mentioned system, which will allow companies to submit certain information and documents only once, as the registration authorities will exchange the submitted documents between themselves.</li><li>Possibility to hold a virtual general meeting without the physical presence of shareholders: the Amendment to ZGD-1 regulates this possibility under the condition that it is provided for in the company&#039;s articles of association. In this respect, the Amendment provides for a specific provision that a challenge to a resolution of a general meeting may not be based on a violation of shareholders&#039; rights resulting from technical interference with the use of technical means at an electronic or virtual general meeting, unless the technical interference is the result of gross negligence or willful misconduct on the part of the company that convened the meeting.</li><li>Cross-border transformations, mergers and divisions: the Amendment to ZGD-1 introduces for all three types of cross-border operations (i.e. mergers, divisions and transformations) a similar structured and multi-step procedure and some common rules, in particular governing the preparation of the cross-border operations plan and specifying what information it must contain and what documents must be attached.</li><li>Measures to protect creditors: the Amendment to ZGD-1 introduces the right to a specific remedy whereby creditors can seek security for their claims which are older than the date of publication of the plan.</li></ul>The novelties set out in the Amendment undoubtedly constitute an important step towards the transition to the digital age and will thus provide an important means of adapting company law to a rapidly changing and evolving market.

The novelties set out in the Amendment undoubtedly constitute an important step towards the transition to the digital age and will thus provide an important means of adapting company law to a rapidly changing and evolving market.

Amendment to the Companies Act

On 14 February 2023, an amendment to the Rules of Procedure of the General Court of the EU (»the Rules of Procedure«) was published in the Official Journal of the EU to promote a modern and efficient General Court. The amendments to the Rules of Procedure entered into force on 1 April 2023 and the most notable changes include the possibility of videoconferencing at hearings, the promotion of proactive case management, and the rules on the protection of personal data of parties as natural persons. The solutions for the amendments to the Rules of Procedure are set out in more detail in the amendment to the Practical Provisions for the Implementation of the Rules of Procedure of the General Court, published on 10 March 2023.VideoconferencingThe General Court is introducing the possibility of using videoconferencing at hearings by adopting a legal and technical framework for this area. Videoconferencing has proved to be an essential tool in ensuring the continuity of judicial activity during the health crisis. A request for participation by videoconference by a representative who is physically unable to attend the hearing must be justified on medical, security or other serious grounds and must be made as soon as the reason for the detention is known.Electronic signatureThe General Court launched the electronic signature of its judgments and orders in March 2022. The Practical Provisions for the Implementation of the Rules of Procedure lay down detailed rules on the qualified electronic signature of its decisions and the permanent and secure storage of the electronic originals of these documents.Proactive and efficient case managementThe amendments to the Rules of Procedure encourage the General Court to manage its cases proactively. For example, following the amendments introduced, the Registrar does not need to be requested by a Judge, the Advocate General or a party to proceedings to translate procedural documents into the language of the case and, where necessary, into another language, but can do so himself. The Registrar shall also ensure that what is said at the hearing is interpreted.A lawyer representing or assisting a party does not need to produce a certificate of entitlement to represent before the courts of a Member State if such document has already been submitted when opening an account on the e-Curia portal of the CJEU.Pilot cases and joint hearingThe Rules of Procedure has set out the concept of »Pilot case«. Where, in the course of a number of cases pending before the General Court in which the same question of law is raised and it is in the interests of the efficient exercise of judicial power to avoid parallel proceedings in those cases, one of them - the one most appropriate for the examination of that question - may be designated as a Pilot case and the proceedings in the other cases shall be suspended until the Pilot case has been disposed of. It will be dealt with as a matter of priority, and the parties to the interrupted proceedings will be heard when the proceedings in their cases resume. In view of the large number of cases, the Judgment in the Pilot case will help to decongest and shorten the duration of proceedings before the General Court.Similarly, the Rules of Procedure will now allow the General Court to hold joint hearings in several cases where there are similarities between them, irrespective of whether the conditions for joinder are met.Data protectionThe General Court&#039;s amendments to the Rules of Procedure also take account of developments in EU legislation on the protection of the personal data of natural persons. The Rules of Procedure now make a clear distinction between the processing of personal data of natural persons and the processing of non-personal data. During proceedings, the General Court may decide, of its own motion or at the request of a party using a separate application, to omit the names and surnames of natural persons, whether parties or third parties, and any other personal data of those natural persons contained in documents and information relating to the case which is accessible to the public. Similarly, in the course of proceedings, it may, of its own motion or motion by a party using a separate application, decide that information other than personal data of natural persons contained in documents and information which are accessible to the public shall be omitted, provided that there are legitimate reasons justifying the non-disclosure of that information.

On 14 February 2023, an amendment to the Rules of Procedure of the General Court of the EU was published in the Official Journal of the EU to promote a modern and efficient General Court.

Important amendments to the Rules of Procedure of the General Court of the European Union

The Court of Justice of the European Union (“CJEU”) has issued a preliminary ruling in case C- 449/21, Towercast SA SU v. Autorité de la concurrence dated 16 March 2023 (“Towercast case«”).In 2017, Towercast, a company active on the French terrestrial television broadcasting market, filed a complaint with the French Competition Authority (“FCA”). The complaint was directed against the acquisition of control over Itas by TDF, the dominant operator on the market and – following the takeover – the only remaining competitor of Towercast. The acquisition was not notified to the FCA and the European Commission, as neither the French nor the European merger control turnover thresholds were met. Consequently, no ex ante concentration assessment has been carried out.Towercast argued that the acquisition was a killer acquisition, i.e., that TDF acquired Itas solely to eliminate a competitor with particularly aggressive pricing tactics from the market. It thus alleged that the acquisition constituted – in itself – an abuse of a dominant position. The FCA rejected the application and Towercast brought an action against the FCA’s decision before the competent national court.The French court referred a preliminary question to the CJEU in the context of its ruling on the case, namely:whether it is possible for a national competition authority to carry out, in view of the prohibition of abuse of a dominant position laid down by EU law, an ex post control of a concentration operation performed by an undertaking in a dominant position, where that concentration remains below the relevant turnover thresholds laid down by the Merger Regulation<a href="#_ftn1">[1]</a> and by the national law on concentrations and has thus not been subject to an ex ante control in that regard.In its judgment, the Court ruleed that a concentration operation with a non-EU dimension may be subject to an ex post control by the national competition authorities and by the national courts, on the basis of the direct effect of the prohibition of abuse of a dominant position laid down by EU law, having recourse to their own procedural rules for that purpose. When carrying out such a subsequent control in the light of the prohibition of abuse of a dominant position, the national competition authority must verify whether a purchaser who is in a dominant position on a given market and who has acquired control of another undertaking on that market has, by that conduct, substantially impeded competition on that market. The Merger Regulation thus does not exclude an ex post assessment of concentrations below the turnover threshold.In practice, the CJEU&#039;s decision therefore means that certain concentrations may be subject to ex post market behaviour review, even though they are not otherwise subject to ex ante concentration assessment under national law and the Merger Regulation.<a href="#_ftnref1">[1]</a> Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings (the Merger Regulation).

Ex post assessment of a concentration from the view of the abuse of a dominant position.

Recent case-law of the CJEU in the field of competition law

On 5 January 2023 the <a href="https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32022L2464">Corporate Sustainability Reporting Directive (»CSRD«)</a><a href="#_ftn1">[1]</a> entered into force. CSRD amends the current Non-Financial Reporting Directive (NFRD)<a href="#_ftn2">[2]</a> in a way that modernises and strengthens the rules about the social and environmental information that companies have to report.The CSRD supports the <a href="https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/european-green-deal_en">European Green Deal,</a> a set of proposals to make the EU&#039;s climate, energy, transport and taxation policies fit for reducing net greenhouse gas emissions by at least 55% by 2030, compared to 1990 levels.The European Green Deal is Europe&#039;s growth strategy that aims to improve the well-being and health of citizens, make Europe climate-neutral by 2050 and protect, conserve and enhance the EU&#039;s natural capital and biodiversity. As part of that effort, companies need a comprehensive sustainability framework to change their business models accordingly. To ensure the transition in finance, prevent greenwashing and channel private investment behind the transition to a climate-neutral economy, the European Commission adopted several regulations within the Sustainable Finance and EU Taxonomy package, which is comprised of (i) the CSRD, (ii) the EU Taxonomy Climate Delegated Act, and (iii) six amending Delegated Acts on fiduciary duties, investment and insurance advice.Scope of the CSRDThe scope of the directive is considerably extended to a broader set of large companies, as well as listed SMEs, which will now be required to report on sustainability – approximately 50 000 companies in total.The Directive applies to the three groups of companies:<ul><li>to all companies listed on the EU regulated markets, except for listed micro companies;</li><li>to a “large undertaking” that is either an EU company or an EU subsidiary of a non-EU company whereby the term &quot;large undertakings&quot; covers all undertakings exceeding at least two of the following criteria: (a) a net turnover of EUR 40 million, (b) a balance sheet total of EUR 20 million, (c) an average of 250 employees during the financial year;</li><li>to insurance undertakings and credit institutions regardless of their legal form.</li></ul>Reporting under the CSRD will first have to be implemented by companies already subject to the NFRD. These companies will have to apply the new rules for the first time in the financial year 2024, for reports published in 2025.The new rules will ensure that investors and other stakeholders have access to the information they need to assess investment risks arising from climate change and other sustainability issues. According to the directive, sustainability reporting should be “comparable, reliable and easy for users to find and make use of with digital technologies”. They will also create a culture of transparency about the impact of companies on people and the environment. Finally, reporting costs will be reduced for companies over the medium to long term by harmonising the information to be provided. The CSRD also makes it mandatory for companies to have an audit of the sustainability information that they report. In addition, it provides for the digitalisation of sustainability information.The EU Member States are expected to transpose the new directive into national law 18 months after its entry into force.<a href="#_ftnref1">[1]</a> Directive (EU) 2022/2464 of the European Parliament and of the Council of 14 December 2022 amending Regulation (EU) No 537/2014, Directive 2004/109/EC, Directive 2006/43/EC and Directive 2013/34/EU, as regards corporate sustainability reporting (Text with EEA relevance).<a href="#_ftnref2">[2]</a> DIRECTIVE 2014/95/EU OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 22 October 2014 amending Directive 2013/34/EU as regards disclosure of non-financial and diversity information by certain large undertakings and groups.

The EU Member States are expected to transpose the new directive into national law 18 months after its entry into force.

The Corporate Sustainability Reporting Directive

By decision No U-I-4/20-66 of 16 February 2023, in proceedings initiated at the request of the Bank of Slovenia, the Constitutional Court annulled in its entirety the Act on Judicial Protection Procedure for Former Holders of Eligible Liabilites of Banks (ZPSVIKOB). The petitioner had submitted a request for constitutional review of a number of articles of the ZPSVIKOB and of Article 350a of the Banking Act (ZBan-1). This provision of the ZBan-1 regulated the liability of the Bank of Slovenia to compensate former holders of eligible liabilities of banks for damages to which the holders are entitled if they prove that the damage resulting from the effects of an extraordinary measure to terminate the eligible liabilities of a bank is greater than it would have been if the extraordinary measure had not been imposed. The ZPSVIKOB regulated the procedure for claiming these damages under the above provision of the ZBan-1 and the mechanism for financing the damages.The petitioner complained in particular that the contested law was incompatible with Article 152(1) of the Constitution of the Republic of Slovenia, which states that the central bank is independent in its functioning and is directly accountable to the National Assembly. The Constitutional Court emphasised that the autonomy or independence of the central bank must be interpreted in close harmony with EU legislation, and therefore suspended the proceedings in 2021 and referred the case to the Court of Justice of the European Union (CJEU) for a preliminary ruling. In the light of the CJEU&#039;s replies, the Constitutional Court considers it essential that the national rules governing the liability of national central banks for damage caused in the performance of their functions cannot place national central banks in a position which would in any way jeopardise their ability to perform independently the tasks falling within the scope of the European System of Central Banks, i.e., in particular, to ensure price stability. The Constitutional Court has consequently emphasised the importance of the independence of national central banks on the basis of Article 130 of the Treaty on the Functioning of the European Union (TFEU) and Article 7 of Protocol No 4. The purpose of these provisions is to ensure that the European System of Central Banks, of which the Bank of Slovenia is an integral part, is protected against all political pressures, in order to enable it to pursue its objectives effectively.The Constitutional Court identified the question whether the compensation financing mechanism set out in Article 40 of the ZPSVIKOB may interfere with the financial independence of the Bank of Slovenia as crucial. Article 40 of the ZPSVIKOB provided that all profits made from 1 January 2019 until the finalisation of court decisions on the payment of compensation were to be used to create designated reserves intended exclusively for the payment of the flat-rate compensation referred to in Article 4 of the ZPSVIKOB and compensation to former holders. In the event that the designated reserves were insufficient, the general reserves established before 1 January 2019 were to be used to finance compensation up to half their amount. If even this is not sufficient to pay the final amount of compensation, the remainder was to be financed by the Republic of Slovenia through a loan. The repayment of the loan was to be made from the profits that the Bank of Slovenia subsequently earns and which, as a result, cannot be used to build up general reserves while the loan is still outstanding.With regard to the mechanism for financing compensation, the Constitutional Court emphasised the importance of general reserves of the central bank. Central banks take decisions in the course of their activities which involve a risk of loss for them, which is why general reserves exist. The adequate level of those reserves indicates that the central bank has anticipated the effects of the measures taken and has them under control. In view of the above, the Constitutional Court concluded that the compensation mechanism under the ZPSVIKOB may have an impact on the ability of the Bank of Slovenia to effectively fulfil its tasks within the European System of Central Banks and prevent it from building up reserves independently. The legal obligation to borrow from the Republic of Slovenia also prevents it from building up general reserves until the loan is repaid. According to the Constitutional Court, the above places the Bank of Slovenia in a position of dependence on political authorities, namely the Government and the National Assembly, where it is potentially exposed to political pressure, which, in the view of the CJEU, is incompatible with the independence of national central banks guaranteed by Article 130 TFEU and Article 7 of Protocol No 4. In light of the foregoing, the Constitutional Court held that Article 40 of the ZPSVIKOB is incompatible with Article 152(1) of the Constitution of the Republic of Slovenia.Furthermore, the Constitutional Court also assessed the compatibility of Articles 4 to 7 of the ZPSVIKOB with the prohibition of monetary financing. Articles 4 to 7 of the ZPSVIKOB stated the possibility of a flat-rate compensation exclusively for certain small investors of a credit institution whose financial instruments had been terminated. Investors whose annual gross income in 2013 did not exceed a certain amount could claim a flat-rate compensation of 80 percent of the purchase value of the financial instruments at the time of purchase, without having to prove that the conditions for liability for damages under Article 350.a(1) of the Banking Act-1 were fulfilled. The payment of compensation would have been made without establishing whether the Bank of Slovenia had fully complied with the rules applicable to it in relation to the determination of the conditions for termination, or even whether it had acted with due diligence. The Constitutional Court concluded that the provisions of Articles 4 to 7 of the ZPSVIKOB are also unconstitutional, since the flat-rate compensation in those provisions was also to be financed in the same way as the compensation described above. In addition, according to the Constitutional Court, the provisions of Articles 4 to 7 of the ZPSVIKOB are also incompatible with the prohibition on monetary financing laid down in Article 123(1) TFEU and Article 21.1 of Protocol No 4. The purpose of the aforementioned prohibition on monetary financing is to ensure the independence of the national central banks, as it allows for the control of the amount of money in circulation. According to the Constitutional Court, Article 152(1) of the Constitution of the Republic of Slovenia, which provides that the central bank shall be independent in its operations, must be interpreted in such a way that it also contains a prohibition on monetary financing.The petitioner also requested an assessment of the compatibility of the provisions on the publication of documents and on the virtual data room in Articles 10 to 23 of the ZPSVIKOB with the constitutional right to free economic initiative and the human right to the protection of personal data, but it was not able to demonstrate such incompatibility.Nevertheless, the Constitutional Court annulled the entire ZPSVIKOB in its decision, identifying the provision of Article 40 of the ZPSVIKOB as the central provision of the ZPSVIKOB, which is crucial for the existence of the entire law. It also explained that the annulment of this article alone does not eliminate the constitutional risks posed by a regime which interferes with the general reserves of the Bank of Slovenia for the purpose of making payments in respect of liability for damages for the performance of a function which is not one of its core tasks and which places the Bank of Slovenia in a position of dependence on political authorities or pressures. Since the Court of Justice has annulled Article 40 of the ZPSVIKOB, the existence of the entire law is consequently no longer of any meaning.As a result of the annulment of the entire law, an unconstitutional legal vacuum has been created, which the legislator, in accordance with the warning of the Constitutional Court, must fill as soon as possible. In this regard, the Court recalled that the National Assembly has not yet eliminated the unconstitutionality established by the Constitutional Court&#039;s decision No U-I-295/13 of 19 October 2016 and that this has also resulted in the European Court of Human Rights (ECHR) decision in the case of Pintar and Others v. Slovenia. The ECHR pointed out that the Republic of Slovenia had violated the human right to private property of the former holders of the terminated liabilities under the European Convention on Human Rights, and it specifically emphasised that the Republic of Slovenia was responsible for ensuring the rights of the former holders of the terminated liabilities. In light of the above, the Constitutional Court remarked that a legal regulation which would impose the economic burden of errors in the termination of eligible liabilities on any entity other than the Republic of Slovenia as the guardian of the public interest for which the termination was carried out in the first place, would hardly be compatible with the Constitution of the Republic of Slovenia.

In proceedings initiated at the request of the Bank of Slovenia, the Constitutional Court annulled in its entirety the Act on Judicial Protection Procedure for Former Holders of Eligible Liabilites of Banks.