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Entities doing business with public sector must be registered with Court

Non-registration disqualifies a business from concluding public sector contracts, including purchase contracts concerning State property contracts on non-repayable financial contributions or contracts concluded as a result of public procurement procedures.

The Act on Register of Public Sector Partners introduces an obligation of so-called, public sector partners to be registered in the Public Sector Partners (PSP) Register maintained by the District Court of Žilina.

Legal persons and individuals generally qualify as public sector partners if they intend to:

  • receive funds from public sector entities, including EU funds, State Aid and Investment Aid;
  • acquire property, property rights or other rights from public sector entities;
  • conclude a contract with contracting authority or contracting entity;
  • acquire accounts receivables due from State and selected public law entities;
  • directly or indirectly supply goods or provide services to above public sector partners, including sub-contractors;

and provided that any payment of such funds or value of asset exceed a lump sum of € 100,000 or annually, an aggregate amount of € 250,000.

Businesses that were registered in the Ultimate Beneficial Owners (UBO) Register, kept by the Public Procurement Authority until 31 January 2017, were registered with the Court by virtue of the law. Nevertheless, they have to complete and verify their PSP registration before 31 July 2017 or, in case their UBOs changed after 1 February 2017, before the conclusion of a contract with a public sector entity. Businesses not registered in the UBO Register must be registered in the PSP Register before the conclusion of a contract awarded by a public sector entity, e.g. in a public tender.

Failure to comply with obligations under the Act has serious repercussions. Non-registration disqualifies a business from concluding public sector contracts, including purchase contracts concerning State property, contracts on non-repayable financial contributions or contracts concluded as a result of public procurement procedures. It can also result in withdrawal of a public sector entity from already concluded contracts. Registration of incorrect or incomplete data, or non-compliance with other obligations under the Act leads to a fine in an amount corresponding to the economic benefit gained by failing public sector partner or, if it cannot be determined, ranging from € 10,000 to € 1,000,000. The latter fine will be imposed up to € 100,000 also on statutory representatives of failing public sector partner.

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A public sector partner cannot register itself directly; registration must be done via an authorised person such as an attorney at law, notary or auditor. The authorised person must verify, and is responsible, along with the public sector partner, for correctness and completeness of a public sector partner’s data registered in the PSP Register. Concerned entities should begin the registration process as soon as possible, however, not later than by the end of June to meet the deadline. The Court usually requires 10 days from submission of the application to register an entity and this period may become longer in summer months.

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