As February 25 approaches, the date when sanctions against NIS are set to be implemented, speculations about potential solutions are increasing. These range from the U.S. extending the deadline, the Russian side selling its stake, to nationalizing the Russian stake in NIS. Nationalization has been discussed since the announcement of American sanctions on Russian companies.
If the Law on the Nationalization of Private Business Enterprises, passed in December 1946, were still in force, nationalizing NIS would be straightforward. However, this law, along with others that legalized confiscation of private property, has long been repealed. There is no newer law outlining the nationalization procedure or circumstances under which private property can be taken, except in cases of public interest, regulated by the Law on Expropriation.
The Constitution of Serbia guarantees peaceful enjoyment of property and other property rights. Property can only be taken away or limited in the public interest, with compensation that may be below market value. According to Strahinja Sekulić, director of the Restitution Agency, nationalization of a private company, such as NIS, is not legally possible under current laws.
Legal experts explain that the Law on Expropriation only allows for the expropriation of real estate in the public interest and with compensation, but does not apply to legal entities. Thus, nationalizing NIS would require a new law. Milan Parivodić, a lawyer, emphasizes that a special law would be needed to legalize the nationalization of NIS. Given the vital role NIS plays in Serbia’s oil and gas industry, disrupting its operations could have severe economic consequences.
In order to legally nationalize NIS, a special law, or lex specialis, would need to be adopted by the Serbian Assembly. However, for this to happen, the resignation of the current government would likely be necessary. If the government were to propose such a law, it could lead to significant political and economic consequences.
