Other obligations of associations

Find out about the payment of the fee for the use of music to ZAMP and the obligation to apply for registration in the Register of beneficial owners

Considering that music does not have a physical form, that it is available in many places around the world at the same time, and that it is used time and time again as a main or additional offer, the world has long established a uniform global system for the collective management of rights of authors of musical works, which served as a foundation for other global systems for the collective management of rights of other music rights holders. These systems allow music owners – those who created it – to make money from the use of their works (their property). Republic of Croatia is also a member of those systems. The Croatian Composers’ Society (HDS) and its Service for the Collective Management of Copyright and Related Rights (ZAMP) are active in the field of collective management of rights of foreign and Croatian composers, while the Croatian Performers’ Rights Collecting Society (HUZIP) is active in the field of collective management of rights of foreign and Croatian performers, and the Association for Protection, Collection and Distribution of Phonogram Producers’ Rights (ZAPRAF) in the field of collective management of rights of foreign and Croatian phonogram producers. These three associations represent all music rights holders (music owners), and, as constituents of a joint system, collect fees for the public use of music in Croatia through ZAMP, on the basis of the Copyright and Related Rights Act as well as authorisations issued to them by the State Intellectual Property Office.
 
Intellectual property – and music is such property – is considered equivalent to beneficial ownership (e.g. of physical assets), so the author (in accordance with the Copyright and Related Rights Act) has the exclusive right to do what they want with their copyright work and the benefits arising from it, which means that they can prohibit everyone else from using it, unless otherwise provided by law. This right includes in particular the right of communication of the copyright work to the public, as well as the right of reproduction (right of multiplication), the right of distribution (right of putting into circulation) and the right of alteration. Performing artists and phonogram producers also have, in addition to other rights, the exclusive right to remuneration for the use of their performances or phonograms in public.
 
This means that for the use of music in public, regardless of the legal personality of the user (natural person, trade business, association, etc.), it is necessary to obtain authorisation from authors and other holders of music rights, or associations representing them, and to pay a certain fee for such use. In accordance with the above, it is necessary to obtain authorisation from HDS ZAMP for the use of music in the premises of associations as well. The Act very clearly stipulates that the term “public use” means any use that is accessible to the public or such use in an area that is accessible to the public, as well as providing members of the public access to copyright works at a time and place of their choice. The Act also defines “the public” as a large number of persons that are outside the usual narrow circle of persons closely related by family or other personal (e.g. marital) ties. Therefore, in accordance with these provisions of the Act, all those who wish to use music outside the usual narrow circle of persons closely related by family or other personal ties, must meet the conditions for obtaining authorisation for such public use of music by submitting relevant information on the manner in which the music will be used and by paying a fee. More about this topic can be found in the Frequently Asked Questions section of the website of ZAMP

HDS ZAMP.
 

Payment of the fee for the use of music to ZAMP 

The amount of the fee for all music rights depends on the type and content of the service provided. It should be noted that the legal status of the person using the music publicly (association, company, trade business, natural person, etc.) does not affect the amount of the fee (just as, for example, the price of a hotel room is the same for all hotel visitors). Otherwise it could happen that some users who offer the exact same service find themselves in a privileged or unprivileged market position due to their different legal personality.
 

Payment of the fee to HDS ZAMP and the subscription fee to HRT

Payment of the subscription fee to HRT (Croatian Radiotelevision) is an obligation established by law that is based on the possession of radio and TV receivers. The proceeds from collecting the subscription fee are the primary source of income for the work and development of HRT, and the fee for the public performance of musical works, which is a source of income of music owners (those who created the piece of music), is not included in the subscription amount. This is why the payment of the subscription fee to HRT should not be equated with the fee for the public use of music which begins with each turning on of the receiver in a public area or an area accessible to the public.

Register of Beneficial Owners

The Register of Beneficial Owners is a central electronic database containing data on beneficial owners. Its content, structure, method of registration, and availability of data are prescribed by the Ordinance on the Register of Beneficial Owners (OG 53/19).

A beneficial owner is any natural person (or persons) who is the ultimate owner of the party or who controls or otherwise manages the party, including the natural person (or persons) who exercises ultimate effective control over a legal person.

Pursuant to Article 32 of the Act on the Prevention of Money Laundering and Terrorist Financing, the following legal entities are required to enter data on the persons acting as their beneficial owners in the Register:

1. companies
2. branches of foreign companies
3. associations
4. foundations
5. trusts

6. institutions for which the Republic of Croatia or a unit of local and regional self-government is not the sole founder.

Institutions for which the Republic of Croatia or a unit of local and regional self-government is the sole founder are exempted from the obligation to enter data on the beneficial owner in the Register.

As it is not possible to acquire ownership over an association under the Act on Associations, the Ordinance applies mutatis mutandis

The Ordinance on the Register of Beneficial Owners (Article 6) stipulates that, as regards the associations for which the PIN (OIB) of the person authorised for representation is entered in the main register (Register of Associations of the Republic of Croatia), the Financial Agency (FINA) will, by electronic means and within the deadlines laid down in the Ordinance, initially and on a one-time basis download the data on the person (persons) authorised to represent the association from the OIB System and enter these data in the Register as data on the beneficial owner (beneficial owners) of the association. Persons authorised to represent the association will be considered the “owner of the association” for the purposes of the Register. These data include:

1) OIB, if it is a natural person
2) name and surname
3) day, month and year of birth
4) country of residence
5) citizenship (citizenships).

If the beneficial owner is a foreign citizen who has not been assigned an OIB, then instead of the OIB, the Register contains information on the type, number, issuer, country and expiry date of the validity of the foreign citizen’s identification document.

If it is not possible to identify the natural person (persons) referred to in Article 28(1) of the Act on the Prevention of Money Laundering and Terrorist Financing, any natural person authorised for representation may be considered the beneficial owner of the association.

The Ordinance prescribes the deadline for entering data on beneficial owners in the Register.

– for associations: from 1 July 2019 to 31 December 2019

After the initial registration, association are required to make all subsequent changes to the data in the Register in the manner and within the deadlines prescribed by the Ordinance. Associations are required to enter updated data in the Register only if changes arise in connection to the person authorised for representation. Until then, they have no obligation to enter data in the Register of Beneficial Owners.

The person authorised to enter data in the Register will be able to do so without paying a fee

1) via the web application of the Financial Agency by using a digital certificate 
or 
2) in the branch offices of the Financial Agency using the forms provided for that purpose.
A fine in the amount of HRK 5,000 to HRK 350,000 is prescribed for a legal entity that does not enter appropriate, accurate and updated data on its beneficial owner or beneficial owners in the Register in the manner and within the deadlines prescribed by the Ordinance.

Inquiries regarding the manner and deadlines for entering data on the beneficial owner in the Register in accordance with the provisions of the Act and the Ordinance can be addressed: 
– in writing to the e-mail address: info.uzspn@mfin.hr
– to the telephone number: 01/6345 451

Inquiries regarding the use of the application of the Register of beneficial owners can be addressed:
– in writing to the e-mail address: info@fina.hr
– to the telephone number: 0800 0080