On February 1st, 2017, new Act No. 315/2016 Coll., on Register of Public Sector Partners came into force. By adopting this new law, the legislator seeks to uncover the ownership and management structures of the entities that are interested in trading with the public sector as well as to bring more transparency to the public procurement sector.

The Register of Public Sector Partners is a substitute for the already existing register of ultimate beneficiaries introduced by Act No. 343/2015 Coll., on public procurement. In contrast to its predecessor, the Register of Public Sector Partners clearly goes beyond public procurement and covers a much wider range of transactions between entrepreneurs and the public sector. The Ministry of Justice of the Slovak Republic will be the administrator of the Register and the District Court of }ilina will be the registration authority.

In general, any legal or natural person that is not itself part of the public sector and

  • receives payments from any public budget; or
  • accepts a fulfilment in the form of property or property rights of the state or other public institutions; or
  • concludes an agreement pursuant to Act No. 343/2015 Coll., on public procurement; or
  • is a healthcare provider that concluded an agreement on the provision of healthcare services with a health insurance company; or
  • is obligatorily registered in accordance with Act No. 581/2004 Coll., on health insurance companies

is considered a public-sector partner.

A public-sector partner must strictly fulfil a wide range of duties. One of the most important obligations of the public-sector partners is the obligation to be registered in the Register of Public Sector Partners, as such registration is a necessary precondition for conducting business with the public sector.

Public sector partners are not authorized to register themselves with the Register of Public Sector Partners without the involvement of an independent subject. Such registration requires the co-operation of the so-called authorized person with whom the public-sector partner concerned has to conclude a special agreement. The law strictly stipulates that the authorized person may only be a lawyer, a notary, a bank, a branch of a foreign bank, an auditor or a tax advisor whose place of business or registered office is in the territory of the Slovak Republic. The authorized person acts on behalf of such public-sector partner towards the registration authority, arranges for the identification and verification of the ultimate beneficiary and, at the same time, fulfils a wide range of other statutory obligations.

A business entity interested in trading with the public sector may choose an authorized person at its own discretion. However, due to the fact that such authorized person will represent the public-sector partner before public authorities, the public-sector partner should assess the professional and material potentials of the authorized person.

Any breach of newly established obligations (including the breach of obligation to register with the Register of Public Sector Partners) may result in serious sanctions that may be imposed on the public-sector partner concerned, members of its statutory body, the authorized person or the ultimate beneficiary. In addition to the imposition of a fine, one of the most serious sanctions is the possibility for the public-sector entity to withdraw from the agreement with the public-sector partner concerned with an immediate effect or a restriction on trading with the public sector.

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