RESTRICTED  
  
WT/TPR/S/369  
7 March 2018  
(18-1404) Page: 1/173 
Trade Policy Review Body   
 
TRADE POLICY REVIEW  
REPORT BY THE SECRET ARIAT  
MONTENEGRO  
This report, prepared for the first Trade Policy Review of Montenegro, has been drawn up by the 
WTO Secretariat on its own responsibility. The Secretariat has, as required by the Agreement 
establishing the Trade Policy Review Mechanism (Annex 3 of the Marrakesh Agreement 
Establishing the World Trade Organization), sought clarification from Montenegro on its trade 
policies and practices.  
 
Any technical questions arising from this report may b e addressed to Sergios Stamnas 
(Tel: 022/739 5382) and Katie Waters (Tel: 022/739 5067) . 
 
Document WT/TPR/G/ 369 contains the policy statement submitted by Montenegro.  
 
 
Note: This report is subject to restricted circulation and press embargo until the end of the 
first session of the meeting of the Trade Policy Review Body on Montenegro. This report was 
drafted in English.  WT/TPR/S/369 • Montenegro  
 
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  CONTENTS  
SUMMARY  ................................ ................................ ................................ ........................  7 
1   ECONOMIC ENVIRONMENT  ................................ ................................ ........................  12 
1.1   Main Fea tures of the Economy  ................................ ................................ ..................... 13 
1.2   Recent Economic Developments  ................................ ................................ ................... 13 
1.2.1    Growth, income, and employment  ................................ ................................ ............. 13 
1.2.2    Prices  ................................ ................................ ................................ ..................... 17 
1.2.3    Main Macroeconomic Policy Developments  ................................ ................................ ..18 
1.2.3.1    Monetary and exchange rate policy  ................................ ................................ ......... 18 
1.2.3.2    Fiscal policy  ................................ ................................ ................................ .......... 19 
1.2.4   Structural reforms  ................................ ................................ ................................ ...20 
1.2.4.1    Tax reform  ................................ ................................ ................................ ........... 20 
1.2.4.2    Privatization  ................................ ................................ ................................ ......... 22 
1.2.4.3    Competition policy  ................................ ................................ ................................ 22 
1.2.4.4    Labour market policies  ................................ ................................ ........................... 22 
1.2.5    Balance of payments  ................................ ................................ ................................ 24 
1.3   Developments in Trade and Investment  ................................ ................................ ........ 25 
1.3.1    Trends and patterns in trade  ................................ ................................ ..................... 25 
1.3.2    Trends and patterns in foreign direct investment  ................................ ......................... 28 
2   TRADE AND INVESTMENT  REGIMES ................................ ................................ ...........  29 
2.1   General Framework  ................................ ................................ ................................ ....29 
2.2   Trade Policy Formulation and Objectives  ................................ ................................ ........ 32 
2.3   Trade Agreements and Arrangements  ................................ ................................ ........... 34 
2.3.1    WTO ................................ ................................ ................................ ...................... 34 
2.3.2    Regional and preferential agreements  ................................ ................................ ........ 37 
2.3.2.1    Regional trade agreements (RTAs)  ................................ ................................ .......... 37 
2.3.2.1.1    Central European Free Trade Agreement (CEFTA) ................................ ................... 37 
2.3.2.1.2    EU–Montenegro Association Agreement and EU accession negotiations  ..................... 38 
2.3.2.1.3    Europe an Free Trade Association (EFTA) –Montenegro  ................................ ............. 39 
2.3.2.1.4    Turkey –Montenegro  ................................ ................................ ............................ 40 
2.3.2.1.5    Ukraine –Montenegro  ................................ ................................ .......................... 40 
2.3.2.1.6    Russian Federation –Montenegro  ................................ ................................ ........... 40 
2.3.2.2    PTAs................................ ................................ ................................ .................... 41 
2.4   Investment Regime  ................................ ................................ ................................ ....41 
2.4.1    General investment regime  ................................ ................................ ....................... 41 
2.4.2    Business environment  ................................ ................................ .............................. 44 
3   TRADE POLICIES AND P RACTICES BY MEASURE  ................................ ........................  48 
3.1   Measures Directly Affecting Imports  ................................ ................................ .............. 48 
3.1.1    Customs procedures, valuation, and requirements  ................................ ....................... 48 
3.1.1.1    Procedures and requirements  ................................ ................................ ................. 48 WT/TPR/S/369 • Montenegro  
 
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  3.1.1.2    Customs valuation  ................................ ................................ ................................ 51 
3.1.2    Rules of origin  ................................ ................................ ................................ ......... 51 
3.1.3    Tariffs  ................................ ................................ ................................ .................... 52 
3.1.3.1    General features  ................................ ................................ ................................ ...52 
3.1.3.2   Applied MFN tariffs  ................................ ................................ ................................ 53 
3.1.3.3    MFN tariff dispersion and escalation  ................................ ................................ ........ 55 
3.1.3.4    MFN tariff bindings  ................................ ................................ ................................ 55 
3.1.3.5    Tariff quotas  ................................ ................................ ................................ ......... 57 
3.1.3.6   Tariff preferences  ................................ ................................ ................................ ..57 
3.1.3.7    Duty concessions/exemptions  ................................ ................................ ................. 58 
3.1.4    Other charges affecting imports  ................................ ................................ ................. 58 
3.1.5    Import prohibitions, restrictions, and licensing  ................................ ............................ 58 
3.1.5.1    Prohibitions  ................................ ................................ ................................ .......... 58 
3.1.5.2    Import approval and restrictions  ................................ ................................ ............. 58 
3.1.6    Anti-dumping, countervailing, and safeguard measures  ................................ ................ 61 
3.2   Measures Directly Affecting Exports  ................................ ................................ .............. 62 
3.2.1    Customs procedures and requirements  ................................ ................................ .......62 
3.2.2    Taxes, charges, and levies  ................................ ................................ ........................ 62 
3.2.3    Export prohibitions, restrictions, and licensing  ................................ ............................. 62 
3.2.4    Export support and promotion  ................................ ................................ ................... 63 
3.2.4.1    Subsidies  ................................ ................................ ................................ ............. 63 
3.2.4.2    Duty and tax concessions  ................................ ................................ ....................... 63 
3.2.4.3    Free-trade export zones  ................................ ................................ ......................... 63 
3.2.5    Export finance, insurance, and guarantees  ................................ ................................ ..64 
3.3   Measures Affecting Production and Trade  ................................ ................................ .......64 
3.3.1    Incentives  ................................ ................................ ................................ ............... 64 
3.3.1.1    Taxation  ................................ ................................ ................................ .............. 64 
3.3.1.1.1    Features  ................................ ................................ ................................ ........... 64 
3.3.1.1.2    Indirect taxation  ................................ ................................ ................................ 65 
3.3.1.1.3    Direct taxation  ................................ ................................ ................................ ...68 
3.3.1.2    Production assistance  ................................ ................................ ............................ 69 
3.3.2    Standards and other technical requirements  ................................ ............................... 77 
3.3.2.1    Standards, testing, and certification  ................................ ................................ ........ 77 
3.3.2.1.1    Voluntary, compulsory, national, and aligned standards  ................................ .......... 78 
3.3.2.1.2    Conformity assessment  ................................ ................................ ....................... 79 
3.3.2.1.3    Transparency  ................................ ................................ ................................ .....81 
3.3.2.2    Sanitary and phytosanitary measures  ................................ ................................ ......81 
3.3.2.2.1    Food standards -setting framework  ................................ ................................ .......81 
3.3.2.2.2    Quarantine regulations ................................ ................................ ........................ 85 
3.3.2.2.3    Transparency  ................................ ................................ ................................ .....88 WT/TPR/S/369 • Montenegro  
 
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  3.3.2.3    Marking and labelling  ................................ ................................ ............................ 88 
3.3.3    Competition policy and price controls  ................................ ................................ ......... 89 
3.3.3.1    Competition policy  ................................ ................................ ................................ 89 
3.3.3.1.1    Legislation  ................................ ................................ ................................ ......... 89 
3.3.3.1.2    Institutional framework and procedures  ................................ ................................ 90 
3.3.3.1.3    Enforcement  ................................ ................................ ................................ ......92 
3.3.3.2    Price controls ................................ ................................ ................................ ........ 93 
3.3.3.3    Consumer protection policy  ................................ ................................ .................... 93 
3.3.4    State trading, state -owned enterprises, and privatization  ................................ ............. 95 
3.3.5    Government procurement  ................................ ................................ ......................... 97 
3.3.6    Intellectual property rights  ................................ ................................ ......................  103 
3.3.6.1    Industrial property  ................................ ................................ ..............................  104 
3.3.6.1.1    Patents  ................................ ................................ ................................ ...........  105 
3.3.6.1.2    Trademarks  ................................ ................................ ................................ ..... 106 
3.3.6.1.3    Geographical indications  ................................ ................................ ...................  107 
3.3.6.1.4    Plant varieties protection  ................................ ................................ ...................  107 
3.3.6.1.5    Industrial design and layout designs of integrated circuits (topographies)  ...............  108 
3.3.6.1.6    Trade secrets  ................................ ................................ ................................ ... 109 
3.3.6.2    Copyright and related rights  ................................ ................................ .................  110 
3.3.6.3    Enforcement  ................................ ................................ ................................ ....... 111 
3.3.6.3.1    Domestic enforcement  ................................ ................................ ......................  112 
3.3.6.3.2    Border enforcement  ................................ ................................ ..........................  113 
3.3.6.3.3    Judicial action  ................................ ................................ ................................ .. 114 
4   TRADE POLICIES BY SE CTOR  ................................ ................................ ...................  116  
4.1   Agriculture, Forestry, and Fisheries  ................................ ................................ .............  116 
4.1.1    Agriculture  ................................ ................................ ................................ ............  116 
4.1.1.1    Legal, institutional and policy framework  ................................ ...............................  116 
4.1.1.2    Production and trade  ................................ ................................ ...........................  118 
4.1.1.3    Support mechanisms  ................................ ................................ ...........................  120 
4.1.2    Forestry  ................................ ................................ ................................ ................  122 
4.1.3    Fisheries  ................................ ................................ ................................ ...............  124 
4.2   Manufacturing  ................................ ................................ ................................ ..........  126 
4.3   Mining and Energy  ................................ ................................ ................................ .... 128 
4.3.1    Mining  ................................ ................................ ................................ ..................  128 
4.3.2    Energy ................................ ................................ ................................ .................  130 
4.3.2.1    Overview  ................................ ................................ ................................ ...........  130 
4.3.2.2    Institutional and legislative framework  ................................ ................................ .. 130 
4.3.2.3    Energy strategies and policy actio ns required by the accession to the 
European  Union  ................................ ................................ ................................ ...............  131 
4.3.2.4    Electricity  ................................ ................................ ................................ ...........  133 
4.3.2.5    Renewable energy  ................................ ................................ ...............................  134 WT/TPR/S/369 • Montenegro  
 
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  4.3.2.6    Hydrocarbons and natural gas  ................................ ................................ ..............  135 
4.4   Services  ................................ ................................ ................................ ..................  135 
4.4.1    Financial services  ................................ ................................ ................................ ... 136 
4.4.1.1    Banking  ................................ ................................ ................................ .............  137 
4.4.1.2    Micro -credit institutions and credit unions  ................................ ..............................  139 
4.4.1.3    Insurance  ................................ ................................ ................................ ..........  140 
4.4.2    Telecommunications  ................................ ................................ ...............................  143 
4.4.3    Broadcasting and film production  ................................ ................................ .............  148 
4.4.4    Transport services  ................................ ................................ ................................ . 150 
4.4.4.1    Maritime Transport  ................................ ................................ ..............................  151 
4.4.4.2    Air Transport  ................................ ................................ ................................ ...... 153 
4.4.4.3    Road Transport  ................................ ................................ ................................ ... 155 
4.4.4.4    Rail Transport  ................................ ................................ ................................ ..... 156 
4.4.5    Tourism services  ................................ ................................ ................................ .... 157 
5   APPENDIX TABLES  ................................ ................................ ................................ .. 161  
 
CHARTS  
 
Chart 1.1 Composition of merchandise trade, 2012 and 2016  ................................ .................. 26 
Chart 1.2 Direction of merchandise tra de, 2012 and 2016  ................................ ....................... 27 
Chart 3.1 Average applied MFN and bound tariff rates, by HS section, 2012 and 2017  ................ 54 
Chart 3.2 Distribution of MFN tariff rates, 2012 and 2017  ................................ ....................... 55 
Chart 3.3 Tariff escalation by 2 -digit ISIC industry, 2012 and 2017  ................................ .......... 56 
Chart 4.1 Trade in Agriculture, 2012 -16 ................................ ................................ ..............  119 
Chart 4.2 Interest rate spread, January 2012 to September 2017  ................................ ..........  140 
Chart 4.3 Market share for selected telecommunications services, September 2017  .................  144 
 
TABLES  
 
Table 1.1 Selected macroeconomic indicators, 2012 -16 ................................ .......................... 14 
Table 1.2 Basic economic and social indicators, 2012 -16 ................................ ......................... 16 
Table 1.3 Balance of payments, 2012 -16 ................................ ................................ .............. 24 
Table 1.4 Total FDI inflows, 2012 -16 ................................ ................................ .................... 28 
Table 2.1 Principal trade -related laws, 2017  ................................ ................................ .......... 33 
Table 2.2 Montenegro's notifications to the WTO, January 2012 to December 2017  .................... 35 
Table 3.1 Tariff structure of Montenegro, 2012 and 2017  ................................ ........................ 53 
Table 3.2 Summary analysis of the preferential tariff, 2017  ................................ ..................... 57 
Table 3.3 Import licensing in 2017  ................................ ................................ ....................... 59 
Table 3.4 Structure of direct and indirect tax revenue, 2012 -16 ................................ ............... 64 
Table 3.5 Value -added tax in Montenegro, 2018  ................................ ................................ ....65 
Table 3.6 Excise tax rates, 2017 -18 ................................ ................................ ..................... 67 WT/TPR/S/369 • Montenegro  
 
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  Table 3.7 Main domestic support measures, 2012 -18 ................................ ............................. 71 
Table 3.8 Enforcement, 2012 -17 ................................ ................................ .......................... 92 
Table 3.9 Companies/property planned to be privatized in 2017  ................................ .............. 96 
Table 3.10 Public procurement cont racts and value, 2013 -16 ................................ .................. 98 
Table 3.11 Public procurement above the GPA thresholds, 2013 -16 ................................ .......... 98 
Table 3.12 Type of procuring entities, 2015 and 2016  ................................ ..........................  100 
Table 3.13 Procurement procedures utilization, 2015 and 2016  ................................ .............  101 
Table 4.1 Main agricultural produc tion, 2012 -16 ................................ ................................ .. 118 
Table 4.2 Main agricultural exports, 2016 ................................ ................................ ............  119 
Table 4.3 Main agricultural imports, 2016  ................................ ................................ ...........  120 
Table 4.4 Budgetary allo cations to agriculture and fisheries, 2011 -17 ................................ ..... 121 
Table 4.5 Catch of saltwater fish, by species, 2012 -15 ................................ ..........................  125 
Table 4.6 Support to the fisheries sector, 2015 -16 ................................ ...............................  126 
Table 4.7 Share of total industrial production, 2012 -16 ................................ .........................  127 
Table 4.8 Mini ng production 2012 -2016 ................................ ................................ ..............  129 
Table 4.9 Energy production, 2012 -16 ................................ ................................ ................  130 
Table 4.10 Insurance premiums for the different categories and classes of insurance, 
Q2 2017 ................................ ................................ ................................ .........................  142 
Table 4.11 Selected telecommunications indicators, 2012 -September 2017  .............................  143 
Table 4.12 Broadband targets by 2020  ................................ ................................ ...............  145 
Table 4.13 Transport of passengers and goods by maritime transport, 2010 -16 .......................  151 
Table 4.14 Port of Bar concession contracts  ................................ ................................ .........  153 
Table 4.15 Transport of passengers and goods at airports, 2010 -16 ................................ ....... 154 
Table 4.16 Montenegro's Air Services Agreements, 2017  ................................ ......................  155 
Table 4.17 Transport of passengers and goods by rail, 2010 -16 ................................ .............  156 
 
BOXES  
 
Box 2.1  Investment framework, 2017  ................................ ................................ ................... 43 
 
APPENDIX TABLES  
 
Table A1.1 Merchandise exports by group of products , 2012 -16 ................................ .............  161 
Table A1.2 Merchandise imports by group of products, 2012 -16 ................................ ............  162 
Table A1.3 Merchandise exports by destination, 2012 -16 ................................ ......................  163 
Table A1.4 Merchandise imports by origin, 2012 -16 ................................ .............................  164 
Table A3.1 Tariff s ummary, 2017  ................................ ................................ .......................  165 
Table A3.2 Applied MFN tariffs exceeding bound rates, 2017  ................................ .................  167 
Table A3.3 Tariff rate quotas, 2013 -16 ................................ ................................ ...............  169 
Table A4.1 Selected agric ultural products by simple tariff averages (tariff range)  .....................  172 
 WT/TPR/S/369 • Montenegro  
 
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  SUMMARY  
1. Since its WTO accession in April 2012, Montenegro's small  and open  import -dependent and 
services -orientated economy has been on a fluctuating growth path . Action has been taken 
through fiscal consolidation and reform measures to address several economic challenges. During 
the review period, Montenegro's annual GDP growth  ranged from -2.7% (in 2012) to 3.5% (in 
2013); its annual average growth rate for the period 2012 -16 stood at 1.8%, a slowdown 
compared to 3.4% over the 2001 -11 period. Following a fiscal loosening in 2016, reforms have 
been under way to spur economic rec overy , including a Fiscal Consolidation Plan 
(December  2016), a Fiscal Consolidation Strategy (June 2017), and a 2017 -2019 Economic Reform 
Programme. Developments in Montenegro's regional and international competitiveness were 
affected by productivity -related and other challenges, some of which are being addressed. 
Whereas consumer price inflation dropped from a peak of 4.1% in 2012 to 1.5% in 2015, including 
two years of deflation, and averaged 1.4% in the period 2012 -2016, the unemployment rate 
declined p rogressively but remained relatively high at an average of 18.5%.  
2. During the review period, some trade and trade -related structural reforms were undertaken 
in areas such as  tax administration, competition policy, and the labour market. Reforms aimed at 
spurring productivity growth  – to address Montenegro's persisting production diversification and 
international competitiveness challenges  – are under way in several areas (e.g. public finance 
management, energy, transport and telecommunications, business envi ronment, reduction of the 
informal economy, foreign trade and investment facilitation). The fiscal deficit has been on the rise 
to accommodate additional government spending related to a major highway construction project, 
social welfare expenses (mothers'  and pension benefits) and public -sector wage increases.  
3. Montenegro does not have an independent monetary policy. Its lack of a national currency 
constrains to some extent its ability to absorb external shocks. The adoption of the euro as the 
domestic curr ency in 2002 has benefited foreign direct investment (FDI) inflows, foreign trade and 
GDP growth as a whole. Persistent stagnant productivity, rising labour costs, and continued large 
current account deficits have resulted in an appreciation of the real ef fective exchange rate since 
2007;  the depreciation of the euro in conjunction with quantitative easing by the European Central 
Bank eased this appreciation. The current account registered sustained deficits, averaging 15.4% 
of GDP during 2012 -15, with a sharp increase in 2016 reaching  19% of GDP due to the continuing 
decline of exports of goods and the steady rise of imports of construction goods for large -scale 
infrastructure projects. Gross external debt dropped from 155.9% of GDP in 2012 to 152.1% in 
2015. Foreign exchange reserves have increased steadily, inter alia,  due to negative interest rates 
in the euro area . 
4. The openness of the Montenegrin economy to international trade and its aim to integrate 
into the world economy continues to be reflected in t he ratio of its trade (exports plus imports) in 
goods and services to GDP, which was 103.4% in 2016, a progressive decline from a peak of 
111.8% in 2012. International trade and FDI trends reflect the continued importance of Europe as 
Montenegro's main reg ional market and supplier , with the European Union  remaining its major 
trading and FDI partner . Furthermore, trade under regional trade agreements (RTAs) continues to 
account for more than 80% of total foreign trade. Montenegro is open to FDI; its only FDI  
restrictions relate to the ownership of land and assets within one kilometre of the border line  and 
agricultural land . It actively encourages investment through various incentive sch emes which are 
applied in a non -discriminatory manner. Efforts to improve  the business environment have been 
reflected in improved international rankings but seemingly not yet in the country's 
competitiveness.  
5. Since WTO accession, Montenegro has adopted constitutional amendments to reinforce 
judicial independence and has under taken institutional and legislative reforms to combat 
corruption. As outlined in its 2017 -2019 Economic Reform Programme, Montenegro's trade and 
trade -related policy objectives are focused on strengthening the competitiveness of service 
exports, diversifyi ng goods exports and increasing value -added in export -orientated production.  
6. Despite the country's attachment to multilateralism, Montenegro's authorities consider that 
its geographical and economic specificities make regionalism an important driving force in its legal 
and institutional developments. Since joining the WTO, Monteneg ro has undertaken commitments 
in government procurement and trade facilitation; it also accepted the Protocol Amending the 
TRIPS Agreement. Montenegro has never been involved in a WTO dispute settlement case either WT/TPR/S/369 • Montenegro  
 
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  as complainant, respondent or third party . While Montenegro has submitted notifications to the 
WTO in most areas, some remain outstanding; the pending notifications (e.g. on import licensing, 
SPS, TBT, and production support) are expected to be addressed in the course of 2018.  
7. Montenegro partici pates in five RTAs with a total of 41 economies. It is a founding member 
of the Central European Free Trade Agreement (CEFTA), it is a party to the EU –Montenegro 
Stabilization and Association Agreement , and it has RTAs with the European Free Trade Associat ion 
(EFTA), Turkey, Ukraine and the Russian Federation. Only the RTAs with the European Union  and 
Ukraine incorporate specific commitments on services. Over the review period, the RTAs with EFTA 
and Ukraine entered into force, and at the CEFTA level there have been developments with respect 
to trade facilitation, rules of origin and trade in services. EU accession negotiations were launched 
in 2011 and are ongoing; as at end -2017, negotiations had been opened on 28  policy chapters.  
8. Over the review period , new and/or amended trade and investment -related law s and 
regulations have been introduced across the board. Many of the legislative reforms have been 
driven by requirements to align relevant legislation with the EU acquis  communautaire . Various 
initiatives  to cut red tape and to involve stakeholders in policy formulation have been taken. For 
example, Montenegro: introduced new guidelines for stakeholder consultations in the process of 
formulating laws; continued to implement a "regulatory guillotine project " to simplify 
administrative procedures; established an obligatory regulatory impact assessment process for all 
primary and secondary legislation; and set a framework for conducting public hearings as part of 
the process of drafting laws.  
9. The tariff is on e of the main trade policy instruments and a significant, albeit declining, 
source of tax revenue (2.4% of total tax revenue in 2016). Although most tariff lines are 
ad valorem , and therefore transparent, the tariff's complexity increased as a result of  its EU 
alignment and in 2017 it involved a multiplicity of rates (55  ad valorem duties and 29  compound 
duties). As a result of an increase in both the number of tariff bands and the number of duty -free 
tariff lines (including on information technology ite ms), and a decrease in the coverage of 
compound rates, the simple average MFN applied tariff rate dropped slightly from 6% in 2012 to 
5.1% in 2017. Tariff protection varies substantially across and within sectors, averaging 12.3% for 
agricultural products and 3.1% for non -agricultural products in 2017 (WTO definitions). Tariff rates 
range from zero to 30% ( ad valorem  rates) or 50% (ceiling of compound rate, tomatoes); almost 
89% (86.8% in 2012) of rates are 10% or below. All tariff lines are bound on an ad valorem  basis 
and the implementation of the few remaining commitments is to be completed in 2022. Whereas 
all ad valorem  ceilings of the compound rates seem to be in line with bound levels, the MFN rates 
applied to at least 56 eight -digit HS items (e.g. me at, fish, office machines, electrical equipment, 
telephone sets and instruments) appear to have exceed ed their bound level in 2017; action was to 
be taken to correct this situation as from 1 January 2018. The small gap between the simple 
average MFN applie d and bound rates (1.4 percentage points) ensures largely predictable and 
stable market access conditions. Montenegro's expansion of bilateral and regional free trade 
agreements meant that its simple average tariff rate on imports from preferential sources  
remained considerably below the MFN average tariff rate; under its RTAs with the European Union  
and Turkey, Montenegro applies tariff rate quotas to 149 agricultural products.  
10. During the review period, trade facilitation developments included the ratifica tion of the 
WTO Trade Facilitation Agreement (TFA) in 2016, steps to implement an authorized economic 
operator scheme, the establishment of a National Trade Facilitation Committee to address 
bottlenecks in this area , and participation in trade facilitating  initiatives at the CEFTA level. 
Regarding customs valuation, the transaction value was the most used method and no reference 
or minimum prices or fixed valuation schedules were used.  
11. Import licensing requirements, which cover approximately 356 ten -digit HS tariff items or 
3.6% of all tariff lines (240 in 2011 or 2.6% of all tariff lines (HS07)), are maintained for various 
reasons including protection of national security, human, animal or plant life or health, and to 
meet international commitments. The fe es for import licences for medicines and medical devices 
are based on the total import value and those relating to the import/export/transit of drugs and 
psychotropic substances  amount to  1% of the total import/export/transit value , in line with the 
intern ational conventions. Standard harmonization and full integration into the European and 
international standardization systems remain a significant element of Montenegro's industrial 
policy. Montenegrin standards have more than doubled over the review period  and those adopted 
in mandatory technical regulations accounted for 40.7% of all adopted standards in 2017; 98.8% WT/TPR/S/369 • Montenegro  
 
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  of standards in place were identical to European standards and the rest identical to international 
standards. Only two purely Montenegrin stan dards seem to be in place. During the review period, 
changes and updates were made to the comprehensive regulatory and institutional framework for 
sanitary and phytosanitary measures to, inter alia, ensure compliance with the EU acquis  in 
numerous areas; c ertain imports of different origin are subject to bans or controls for SPS 
purposes. A traceability system for genetically modified organisms is to be introduced in 2018. No 
contingency measures have been introduced so far despite the existence of a regula tory and 
institutional framework in this area.  
12. Montenegro does not apply any export duties. It has temporarily (2017 -2019) prohibit ed 
exports of some kinds of wood and wood products. Quantitative restrictions on exports may be 
imposed in case s of critical shortage or to protect exhaustible natural resources , but so far there 
have been no such case s. A free zones and warehouses scheme provides tax and non -tax 
incentives to established firms; currently there is only one free trade zone in Montenegro.  
13. Grants,  tax concessions, guarantees, concessional loans, debt write off and rescheduling 
continued to support investment, production and trade by, inter alia,  encouraging micro, small and 
medium -sized enterprises (MSMEs), R&D, competitiveness improvements, cluste r development, 
regional development, entrepreneurship and job creation. Their duration ranges from one  year to 
the completion of a project. Industry -specific support is available to agriculture, fisheries, energy , 
and processing activities . Depending on th e support scheme, corporate tax exemptions and other 
types of support do not apply to primary production of agricultural products, fisheries, steel 
shipyards, transport, the defence industry and gambling activities.  
14. State involvement in the economy, includ ing trade, seems limited and targeted at areas 
considered  to be  of current strategic importance (e.g. energy, broadcasting, transport, and 
tourism) . The State or state funds hold shares in 60 companies  and the internal debt of 
state-owned firms dropped rec ently. Privatization plans are set annually , and  the privatization 
process seems to be in its final phases . Substantial changes have been made to the government 
procurement legislation to bring it in line with the EU acquis  and the WTO Agreement on 
Governm ent Procurement (GPA) of which Montenegro became a Member in July 2015. Although 
the value of contracts awarded to foreign suppliers rose more than fourfold over 2013 -16, they are 
equivalent to about 14% of the total contracted value and roughly 6% of the total number of 
contracts. No preferences are granted to domestic suppliers and SMEs participating in government 
procurement operations. Public procurement remains decentralized, though monitored and 
facilitated by a single agency; ongoing initiatives to r aise procurement efficiency and monitoring, 
inter alia,  involve the introduction of e -procurement tools.  
15. Montenegro's intellectual property rights legislation has been strengthened with 
wide-ranging and comprehensive amendments or new laws. Protection was further enhanced with 
the expansion of international commitments. Nevertheless, enforcement remains subject to 
challenges involving, inter alia,  resource constraints. During the review period, several legislative 
and institutional changes were undertaken u nder the competition policy and consumer protection 
framework; pro -competitive agreements in certain areas (e.g. spare parts and servicing of motor 
vehicles, insurance, and road/rail/maritime traffic) are exempt from competition rules. Competition 
policy a nd consumer protection enforcement difficulties relating to limited financial and human 
resources and expertise are being addressed; difficulties relating to the fragmented nature of the 
existing consumer protection legislation and regulations are noticeab le. Price controls on certain 
medicines, oil derivatives, and electricity tariffs are in place.  
16. Agriculture (excluding agro -processing), together with forestry and fishing, accounted for 
9% of GDP in 2016; it is estimated that around 8.3% of the working a ge population in Montenegro 
is engaged in agriculture. The sector is characterized by low productivity with competitiveness 
hindered by: fragmented parcels (the average farm size being 4.3 ha); obsolete mechanization; 
unfavourable credit terms; and underde veloped rural infrastructure. Recognizing Montenegro's 
inability to produce on a large -scale, emphasis is, inter alia , being placed on helping farmers to 
produce high -quality products which can be marketed through tourism. Montenegro's main 
agricultural ac tivity is livestock breeding, mainly of cattle and sheep. Montenegro is a net importer 
of agricultural products. Only a few export products (wine, meat, bakery products, and beer) 
account for the vast majority of agricultural and agro -food exports. With th e exception of cereals, 
the main products produced are assisted by significant levels of MFN (and sometimes preferential) 
tariff protection. The State owns some agricultural land, which is partially rented and has a WT/TPR/S/369 • Montenegro  
 
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  majority shareholding in the country's m ajor wine producer. Montenegro does not provide export 
subsidies. Domestic support is modest and comprises: market price policy measures; Rural 
Development Measures; support for general services and social transfers in agriculture and 
institutional develop ment and fisheries development measures. Market price policy measures 
include direct payments which are coupled to production; the main beneficiaries being the beef 
and milk sectors. In the context of EU accession, a gradual decoupling of payments from 
production is envisaged. Since 2002, the Government and the Pension and Disability Insurance 
Fund have provided subsidies for the purchase of lamb meat, in order to support producers and 
consumption of lamb by the most vulnerable group of pensioners.  
17. Nearly 70% of Montenegro's territory is covered by forests or forest land and in recent years 
reforestation has occurred as farmers have abandoned agricultural land. Sawmilling is the main 
economic activity in the wood processing industry and rural populations co ntinue to rely on wood 
as a source of energy. Around half of the country's forests are state -owned and commercial 
exploitation takes place under concession agreements. Wood cut from state -owned forests must 
be processed (to a primary level of production) b efore it is exported. In mid -2017, Montenegro 
imposed temporary export restrictions on certain wood products in order to ensure adequate 
supply for the domestic market in the wake of a logging ban in neighbouring Albania and a 
consequent surge of exports t o this market.  
18. Montenegro's fisheries sector is underdeveloped, under exploited and of an artisanal 
character. Foreign fishing vessels may obtain a licence to operate in Montenegrin waters. Every 
year Montenegro sets a maximum allowable catch; over the rev iew period the actual catch has 
been significantly below this threshold. Montenegro is a net importer of fish products. Tariff 
protection ranges from zero to 20%. Budgetary support to the fisheries sector is small .  
19. All of the Montenegro's mineral wealth i s state -owned, with exploitation largely taking place 
under concession contracts; since 2012, revenue from concession fees has ranged from €810,517 
to €5.2 million. Tariff protection in the mining sector is low; the simple average applied tariff in 
2017 (I SIC definition) was 1.2%, with tariffs ranging from zero to 8%. In 2016, exports of mining 
products (mainly, aluminium ores and concentrates, zinc ores and concentrates, other non -ferrous 
base metal waste and scrap, and unwrought aluminium and aluminium al loys) accounted for 
nearly 32% of total exports.  
20. Montenegro's energy production comes from hydro -electricity, coal and fuelwoods. To meet 
domestic demand , it imports around 10% -15% of its energy needs. All petroleum is currently 
imported; all but one of th e oil and gas companies operating in Montenegro are privately owned. 
Offshore exploration for hydrocarbons is in a research phase. The electricity market was unbundled 
and fully opened to competition in 2015; however, the State has a significant ownership stake in 
the electricity market in the areas of generation, transmission and distribution. Prices of electricity 
transmission and distribution are regulated. Electricity tariffs do not differ by the type of subsector 
but only by voltage levels; the only pr eferential electricity prices in place are for those considered 
to be vulnerable customers (households and small customers that do not belong to the household 
category). Electricity from renewable sources is supported through a feed -in tariff.  
21. In 2016, th e GDP share of manufacturing (including agro -processing) in the economy was 
4.6% and the sector accounted for 6.3% of the total number of employed persons. Manufacturing 
production is dominated by: pharmaceutical products and preparations; basic metals and  metal 
products; food products, beverages and tobacco; other non -metallic mineral products; machines 
and equipment , and wood and cork products. Its main exports are iron and steel bars and rods; 
medicines; and certain machinery and transport equipment. Man ufacturing companies may benefit 
from incentives under general as well as manufacturing -specific schemes.  
22. Services account for more than 70% of economic activity. Montenegro has undertaken GATS 
commitments in all of the 12 sector groups listed in the Servi ces Sector Classification List and in 
over 80% of its subsectors. It has also scheduled a number of "additional commitments" in the 
areas of basic telecommunications, postal and courier services and port services.  
23. Montenegro's banking and insurance sectors  are open to foreign investment. Conditions in 
the banking sector have strengthened over the review period as steps have successfully been 
taken to tackle a serious problem of non -performing loans. Bank lending has picked up but has not WT/TPR/S/369 • Montenegro  
 
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  responded to a rebo und in economic growth and conditions of high liquidity. The sector appears to 
be overbanked which presents a challenge for profitability. Over the review period , the Central 
Bank's responsibilities have been extended to oversee ing consumer credit and supervis ing financial 
leasing, factoring and purchase of receivables activities. Analysis suggests a reduction in 
concentration in the insurance sector over the past decade. Only insurance companies established 
in Montenegro may insure  property and persons in Montenegro, with certain exceptions, including 
reinsurance.  
24. The telecommunications sector is fully privately owned, with significant levels of foreign 
direct investment. There is little real competition in the field of fixed netwo rk infrastructure and 
fixed line call termination prices are significantly above the European average; the opposite is the 
case for the mobile sector. In the area of broadcasting, foreign and domestic investors are treated 
equally under Montenegrin rules a nd regulations; the only content requirements currently in place 
are that the general television broadcaster must ensure that content considered as in -house 
production represent s at least 10% of its monthly airtime. A Film Centre of Montenegro started 
operations in 2017 which, inter alia , provides incentives to foreign and domestic producers that 
intend to film in the country.  
25. State ownership of companies operating in the transport sector remains significant in the 
maritime, rail and air sectors, although t he Port of Adria, the main commercial port, was privatized 
in 2013. Efforts are being made to tackle transport infrastructural shortcomings through the 
construction of the first segment of a major highway project , which will ultimately join 
Montenegro's se aport at Bar with Boljare at the border with Serbia, and ongoing efforts to upgrade 
rail tracks and rolling stock. Maritime cabotage services may only be provided by vessels flying the 
Montenegrin flag. The maritime sector is facing competition from ports in neighbouring countries, 
which has resulted in declining passenger and freight numbers.  
26. Tourism remains one of Montenegro's main economic activities and sources of government 
revenue as well as serving as a stimulus to other sectors; its main tourism pro ducts are currently 
related to coastal activities, but diversification efforts are ongoing. There are no FDI restrictions on 
any type of tourism accommodation in Montenegro, and no  nationality requirements applied to 
tourist service providers. Various ince ntives are offered, particularly to stimulate investment in 
high quality facilities.  
27. Montenegro's growth is likely to accelerate in the near future, driven largely by highway 
construction spending and tourism and energy investments, as well as related hig her consumption. 
Notwithstanding these prospects and existing buffers, downside risks to the economic outlook 
remain. As a consequence of its size, import dependence and limited diversification, the economy 
remains vulnerable to exogenous shocks including reliance on foreign capital to fund large public 
financing needs and fluctuations in external demand, as well as endogenous risks, inter alia,  
related to the implementation of large public infrastructure investment projects, an early retiring 
and aging pop ulation, and a high unemployment rate . Future prosperity and sustainable and 
inclusive growth depend on the implementation of the fiscal consolidation strategy, continued 
vigilance in the financial sector, labour market reforms and gains in the business en vironment and 
governance. These and productivity - and production diversification -enhancing structural reforms 
would increase the flexibility of the Montenegrin economy and its ability to respond to growing 
external challenges as well as its further integra tion into the multilateral trading system, thus 
enabling it to continue meeting its broad -based economic and welfare objectives including inclusive 
growth and a narrower wealth divide.  
 
 WT/TPR/S/369 • Montenegro  
 
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  1  ECONOMIC ENVIRONMENT  
1.1.  Since its WTO accession, Montenegro has experienced  a fluctuating growth path and action 
has been taken through fiscal consolidation and economic reform measures to address several 
economic challenges (Section 1.2.1, Table 1.1). Persistent high levels of unemployment, 
continuous labour market ri gidities (exacerbated by low productivity and high costs), steady 
current account deficits and substantial external debt have slowed its economic performance 
during the review period (Sections 1.2.1, 1.2.4.4 and 1.2.2).1 Developments in Montenegro's 
region al and international competitiveness were affected by these and other challenges, although 
some of them are being addressed (Sections 1.2.4.1 and 1.2.5).2 Despite progress in human 
development performance, income inequality rose.3 International trade and f oreign direct 
investment (FDI) trends reflect the continuous importance of Europe as Montenegro's major 
market and supplier , with the European Union , Serbia, Bosnia and Herzegovina, China, and the 
Russian Federation remaining its main individual trading an d inward FDI partners (Section  1.3.2).  
1.2.  Although growth is expected to accelerate, downside risks to the economic outlook remain. In 
addition to Montenegro's import dependence (Section 1.1), exogenous risks include: reliance on 
foreign capital to fund large  public financing needs, as well as fluctuations in external demand 
(especially for tourism, which is substantially dependent on incomes in the Russian Federation, 
Serbia, and the euro area ), and a possible decline in FDI.4 The endogenous risks include hig h 
sensitivity to the implementation of large public infrastructure investment projects which would 
boost growth but could place further pressure on public finances. Other endogenous challenges 
include a relatively high and rising public debt and ongoing bank deleveraging as well as an early 
retiring and aging population and a high unemployment rate (Section 1.2.4.4). Further 
imple mentation of a fiscal consolidation strategy (Section 1.2.3.2), continued vigilance in the 
financial sector, labour market reforms , and gains in the business environment and governance 
are crucial for achieving sustainable and inclusive growth. According t o the IMF, the improvement 
in global growth, particularly in Europe, could have positive spillovers to the Montenegrin 
economy.5 In the medium to long term, the construction of the Serbian part of the Belgrade -to-
Montenegro highway could improve growth.   
                                                
1 IMF (2017 ), Montenegro Selected Issues . IMF Country Report No. 17/277 , September, 
Washington,  D.C. Viewed at: https://www.imf.org/en/Publications/CR/Issues/2017/09/14/Montenegro -
Selected -Issues -45245 . 
2 In 2017 -2018, Montenegro ranked 77th out of 137 countries ( 72nd out of 144 countries in 2012 -2013) 
in the World Economic Forum (WEF) Global Competitiveness Index. According to the WEF, in 2017/18 despite 
improvements in several areas, the areas of greatest  concern were access to financing, inefficient government 
bureaucracy, corruption, inadequate supply of infrastructure, lack of innovation and an inefficient labour 
market. WEF (2017), The Global Competitiveness Report 2017 -2018, 26 September, Geneva. Viewed at: 
http://www3.weforum.org/docs/GCR2017 -
2018/05FullReport/TheGlobalCompetitivenessReport2017%E2%80%932018.pdf ; Government of Montenegro 
(2017), Economic Reform Programme for Montenegro 201 7–2019, January.  
3 In 2016, Montenegro ranked 48th out of 188 countries in the UNDP's human development category 
(52nd out of 186 countries in 2012), thus being part of the group of countries with very high human 
development. Income inequality as measured by the Gini coefficient rose from 30.0 (2000 -2010) to 31.9 
(2010 -2015) but remains the lowest in the Western Balkans and close to the average for OECD countries 
(30.8); a value of zero represents absolute equality, a value of 100 absolute inequality. Accor ding to the 
authorities, MONSTAT data covering the period 2013 -16 were to be released by end -2017. UNDP (2013), 
Human Development Report 2013 - The Rise of the South: Human Progress in a Diverse World . Viewed at: 
http://hdr.undp.org/en/2013 -report ; UNDP (2016), Human Development Report 2016 - Human Development 
for Everyone. Viewed at: http://hdr.undp.org/sites/default/ files/2016_human_development_report.pdf ; World 
Bank Report (2016) ; WTO document WT/TPR/S/346/Rev.1, 6 January 2017.  
4 IMF (2017), Montenegro - 2017 Article IV Consultation —Press Release; Staff Report; and Statement 
by the Executive Director for Montenegro,  IMF Country Report No. 17/276, 13 September, Washington, D.C. 
Viewed at: https://www.imf .org/en/Publications/CR/Issues/2017/09/14/Montenegro -2017-Article -IV-
Consultation -Press -Release -Staff-Report -and-Statement -by-the-45244 . 
5 IMF (2017 ), Montenegro Selected Issues . IMF Country Report No. 17/277 , September, 
Washington  D.C. Viewed at: https://www.imf.org/en/Publications/CR/Issues/2017/09/14/Montenegro -
Selected -Issues -45245 .  WT/TPR/S/369 • Montenegro  
 
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  1.1  Main Features of the Economy  
1.3.  Montenegro is a small and open services -orientated economy with a population of 0.6 million 
(as of 2016) that became an independent State in 2006.6 Its high import dependence makes it 
vulnerable to external shocks and internatio nal price changes, especially those for food and 
energy. Montenegro's size -related high costs of developing and running national institutions are 
compounded by a limited capacity to exploit economies of scale in the provision of public goods 
and services.7 At the same time, while still in the process of transitioning to a market economy, 
restructuring activities and privatization of a few state -owned enterprises (SOEs) remain 
under  way (Sections 1.2.4.2 and 3.3.4). Montenegro submitted its application for E U membership 
in 2008 and accession negotiations opened in June 2012 ; it has been using the euro as its 
domestic currency  since 2002  (Sections 1.2.3.1 and 2.3.2.1.3).8  
1.2  Recent Economic Developments  
1.2.1   Growth, income, and employment  
1.4.  During the review period, Mo ntenegro's annual GDP growth ranged from -2.7% (2012) to 
3.5% (in 2013) (Table 1.1); its annual average growth rate for the period 2012 -16 stood at 1.8%, 
a slowdown compared  to the average of 3.4% over the 2001 -11 period.9 According to the IMF and 
the Worl d Bank, the reasons for these developments include: overreliance on external capital 
inflows and tourism which made the economy vulnerable to external shocks and geopolitical 
tensions; falling aggregate demand which reduced the output and the demand for la bour; a 
change in investors' perceptions of financial risks; a decline in manufacturing and construction 
sectors; stagnated productivity and increased costs which were exacerbated by a rigid labour 
market with high youth and long -term unemployment, weak de mographics, and low labour force 
participation; high public spending; and increased public debt.10 In response to the challenging 
environment, after a fiscal loosening in 2016, to spur the economic recovery the authorities 
undertook a Fiscal Consolidation P lan (December 2016), a June 2017 Fiscal Consolidation Strategy 
(FCS), a 2017 -2019 Economic Reform Programme, and other reforms (Sections 1.2.3.2, 1.2.4, 
1.2.4.3, 1.2.4.4, 3.3.3, and 2.2).11 According to the IMF, notwithstanding an estimated modest 
negative impact of the fiscal adjustment, in 2017 growth is expected to accelerate to 3%, driven 
largely by an expected doubling of highway construction spending to 6% of GDP, and tourism and 
energy investments. Over 2017 –22, growth may average 2.8%, also supported  by consumption in 
later years; according to the authorities this rate would be 3.1% for the period 2017 –20.12 
                                                
6 Heritage.org online information. Viewed at: 
http://www.heritage.org/index/pdf/2017/countries/montenegro.pdf .  
7 World Bank online information. Viewed at: 
http://www.wor ldbank.org/en/country/montenegro/overview .  
8 IMF (2015), Montenegro - 2015 Article IV Consultation —Press Release; Staff Report; and Statement 
by the Executive Director for Montenegro,  IMF Country Report No. 17/276, 8 March, Washington, D.C. Viewed 
at: https://www.imf.org/en/Publications/CR/Issues/2016/12/31/Montenegro -2015-Article -IV-Consulta tion-
Press -Release -Staff-Report -and-Statement -by-the-43772 ; World Bank online information. Viewed at: 
http://www.worldbank.org/en/country/montenegro/overview ; European Commission (DG - Environment) 
online information. Viewed at: http://ec.europa.eu/environment/enlarg/candidates.htm . 
9 World Bank and Montenegro Central Bank data.  
10 World Bank (2016), Montenegro - Achieving Sustainable and Inclusive Growth amidst High Volatility : 
Systematic Country Diagnostic , March. Viewed at: 
http://documents.wor ldbank.org/curated/en/642701468179098025/pdf/105019 -SCD-P151813 -OUO-9-
SecM2016 -0165.pdf ; IMF (2017), Montenegro - 2017 Article IV Consultation —Press Release; Staff Report; and 
Statement by the Executive Director for Montenegro,  IMF Country Report No. 17/27 6, 13 September, 
Washington, D.C. Viewed at: https://www.imf.org/en/Publications/CR/Issue s/2017/09/14/Montenegro -2017-
Article -IV-Consultation -Press -Release -Staff-Report -and-Statement -by-the-45244 ; and IMF (2017 ), Montenegro 
Selected Issues . IMF Country Report No. 17/277 , September, Washington, D.C. Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2017/09/14/Montenegro -Selected -Issues -45245 . 
11 IMF (2017), Montenegro - 2017 Article IV Consultation —Press Release; Staff Report; and Statement 
by the Executive Director for Montenegro,  IMF Country Report No. 17/276, 13 September, Washington, D.C. 
Viewed at: https://www.imf.org/en/Publications/CR/Issues/2017/09/14/Montenegro -2017-Article -IV-
Consultation -Press -Release -Staff-Report -and-Statement -by-the-45244 . 
12 The highway construction is expected to add to growth through dire ct demand effects during 
construction and indirect supply effects after its completion, although both impacts are smaller than for most 
investment projects. IMF (2017), Montenegro – 2017 Article IV Consultation —Press Release; Staff Report; and 
Statement by  the Executive Director for Montenegro,  IMF Country Report No. 17/276, 13 September, WT/TPR/S/369 • Montenegro  
 
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  Table 1.1 Selected macroeconomic indicators, 2012 -16 
  2012  2013  2014  2015  2016  
National accounts       
Real GDP (%age change)  -2.7 3.5 1.8 3.4 2.9 
By type of expenditure (% of GDP)       
Final consumption expenditure  103.8  100.5  99.6 98.4 96.4 
Household final consumption 
expenditure  82.7 81.0 80.2 79.2 76.8 
Government consumption  21.1 19.5 19.4 19.2 19.6 
Gross fixed capital formation  19.8 20.2 19.0 20.1 23.2 
Changes in inventories  0.8 -0.6 1.2 -0.1 2.9 
Net exports  -24.4 -20.1 -19.8 -18.5 -22.5 
Exports of goods and services  43.7 41.3 40.1 42.1 40.5 
Import of goods and services  68.1 61.4 60.0 60.6 62.9 
Unemployment rate (%)  19.7 19.5 18.0 17.6 17.7 
Productivity  (Percentage change)  
Labour productivity  2.4 0.7 6.8 1.8 1.1 
Capital productivity  3.0 3.6 3.1 3.8 5.8 
Total factor productivity  1.4 -0.5 1.4 -0.9 -4.8 
Prices and interest rates       
Inflation (CPI, %age change)  4.1 2.2 -0.7 1.5 -0.3 
Lending interest rates in % (weighted)       
Nominal rates  8.90 8.76 8.56 8.10 7.21 
Effective rate  9.56 9.39 9.41 8.93 7.97 
Deposit interest rates in % (weighted)       
Nominal rates  3.26 2.91 2.14 1.48 1.08 
Effective rate  3.26 2.91 2.14 1.46 1.07 
Exchange rate       
€/US$ (annual average)  0.78 0.75 0.75 0.90 0.90 
Real effective exchange rate (based on CPI; 
average %age change)a 3.20 0.80 -2.00 .. .. 
Consolidated fiscal balance (% of GDP)       
Total revenue and grants  39.9 41.3 43.5 40.7 43.3 
Total revenue  39.4 41.0 43.2 40.4 42.9 
Current revenues  39.2 40.8 43.0 40.2 42.8 
Taxes, of which  24.7 25.7 27.5 25.5 26.8 
VAT 11.1 12.8 14.4 12.6 13.3 
Excises  4.8 4.8 4.5 4.7 4.8 
Taxes on international trade  0.9 0.7 0.6 0.6 0.6 
Social security contributions  10.0 10.6 11.6 10.8 11.0 
Non-tax revenues  4.5 4.5 4.0 3.8 4.9 
Capital revenues  0.2 0.3 0.2 0.2 0.1 
Grants  0.5 0.3 0.3 0.3 0.4 
Total expenditures and net lending  45.7 45.8 44.2 46.6 49.4 
Total expenditures  45.6 45.7 44.5 46.5 49.3 
Net lending  0.1 0.1 -0.3 0.1 0.1 
Overall balanceb -5.8 -4.5 -0.7 -5.9 -6.0 
General government debt (gross)c,d 53.4 55.2 59.9 66.7 67.5 
Saving and investment (% of GDP)e      
Gross national savings  1.9 5.1 5.0 6.7 6.1 
Gross investment  20.6 19.6 20.2 20.0 25 
Savings -investment gap  -18.7 -14.5 -15.2 -13.3 -18.9 
External sector  (% of GDP, unless otherwise indicated)  
Current account  -18.5 -14.5 -15.2 -13.2 -18.1 
Goods and services balance  -24.2 -20.1 -19.8 -18.5 -22.5 
Goods  -43.5 -39.5 -39.8 -40.0 -41.9 
Export  12.2 11.8 10.3 8.9 8.7 
Import  55.7 51.3 50.1 48.9 50.6 
Services  19.3 19.4 20.0 21.6 19.4 
Revenues  29.9 29.6 29.8 33.2 31.7 
Expenditures  10.6 10.1 9.8 11.6 12.3 
Capital account  0.2 0.1 0.0 0.0 0.0 
Financial accountf -15.1 -11.4 -8.1 -9.3 -12.4 
Direct investment, net  -14.5 -9.6 -10.2 -16.9 -9.4 
Terms of trade  .. .. .. .. .. 
Merchandise exports (% change)g -17.6 2.1 -9.7 -9.0 6.2 
                                                                                                                                                  
Washington, D.C. Viewed at: https://www.imf.org/en/Publications/CR/Issues/2017/09/14/Montenegro -2017-
Article -IV-Consultation -Press -Release -Staff-Report -and-Statement -by-the-45244 . WT/TPR/S/369 • Montenegro  
 
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    2012  2013  2014  2015  2016  
Merchandise imports (% change)g -0.1 -2.7 0.6 3.2 12.0 
Service exports (% change)g 5.2 4.6 3.6 17.8 3.3 
Service imports (% change)g 9.2 1.0 -0.3 24.8 14.3 
Total reserves (includes gold, US$ million)  458.7  584.0  661.4  733.5  846.5  
in months of imports   1.9   2.4   2.7   3.4   3.4  
Total external debt, % of GDP (stock at end 
of period)  155.4  155.4  160.0  160.5  158.0  
of which: private sectorh 115.2  111.3  109.6  94.8 .. 
.. Not available.  
a    A minus  sign ( -) refers to depreciation.  
b According to the authorities, the methodology is based on the Law on Budget and Fiscal 
Responsibility and data is in compliance with the Financial Statement of Budget. Data on the overall 
balance was  -5.3% (2012), -4.6% (2013), -2.9% (2014), -8.3% (2015), and -3.6% (2016) of GDP.  
c The arrears of local governments i n their definition of general government gross debt are not 
included.  
d According to the authorities, data on the gross general government debt was 53.4% (2012), 57.5% 
(2013), 59.9% (2014), 66.2% (2015), and 64.4% (2016) of GDP.  
e    Preliminary figure for  2016.  
f    Net lending (+) / net borrowing ( -). 
g    Based on BoP figures at nominal prices.  
h    Estimates, since private debt statistics are not published.  
Source:  Central Bank of Montenegro online information. Viewed at: http://www.cb -cg.org/eng/index.php ; 
Statistical Office of Montenegro – MONSTAT online information. Viewed at: 
http://monstat.org/eng/index.php ; data provided by Ministry of Finance; and I MF (2017), 
Montenegro - 2017 Article IV Consultation —Press Release; Staff Report ; and  Statement by the 
Executive Director for Montenegro,  IMF Country Report No. 17/276, 13 September, 
Washington,  D.C. Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2017/09/14/Montenegro -2017-Article -IV-
Consultation -Press -Release -Staff-Report -and-Statem ent-by-the-45244 . 
1.5.  Since 2012, changes in the overall sectoral pattern of Montenegro's GDP and employment 
have been relatively minor, with services accounting for more than 70% of economic activity 
followed by agriculture and construction whose shares have slightly increased (Table 1.2, 
Section  4.4). During the review period, labour productivity has remained stagnant as real unit 
labour costs have increased in line with wage developments (Section 1.2.4.4).13 Montenegro has 
lost cost c ompetitiveness compared t o peers as labour costs have greatly outpaced productivity.  
Total factor productivity (TFP) growth has been negative except for 2012 and 2014, and in 2016 
bottomed to -4.8% (Table 1.1); growth of its contribution to GDP ranged from -5.3% to 1.8% in 
the per iod 2012 -2016. No data on Montenegro's level of integration into global value chains 
(GVCs)  were available with the authorities.  
1.6.  During the review period, Montenegro's unemployment rate dropped progressively but 
remained relatively high at an average of 1 8.5% (Table 1.1) despite large fluctuations in business 
cycles indicating that the economy is operating well below its potential.14 Firms constrained by 
                                                
13 After the 2008 crisis, productivity declined sharply and then rose unevenly, w hile growth slowed. 
Labour productivity is still below its 2008 level and the country still lags behind its South East Europe peers. 
While in other countries in the region productivity quickly returned to trend following a deceleration in 2009, 
Montenegro experienced a sharper decline in 2009 and despite a quick recovery in 2010 productivity has 
remained stagnant since then. Most of the employment gains were in labour -intensive industries, like tourism 
and agriculture (also with the largest share of informa lity), while real estate and financial sectors took a lead 
with the highest growth of value added. IMF (2017), Montenegro - 2017 Article IV Consultation —Press 
Release; Staff Report; and Statement by the Executive Director for Montenegro,  IMF Country Report  
No. 17/276, 13 September, Washington, D.C. Viewed at: 
https://www.imf.org/en/Publication s/CR/Issues/2017/09/14/Montenegro -2017-Article -IV-Consultation -Press -
Release -Staff-Report -and-Statement -by-the-45244 ; World Bank (2016), Montenegro - Achieving Sustainable 
and Inclusive Growth amidst High Volatility : Systematic Country Diagnostic , March. V iewed at: 
http://documents.worldbank.org/curated/en/642701468179098025/pdf/105019 -SCD-P151813 -OUO-9-
SecM2016 -0165.pdf . 
14 This aspect  of the Montenegrin economy (and of several other States in South Eastern Europe) is 
important for understanding the links between economic growth, the rate of unemployment, and poverty 
reduction, and for evaluating the contribution of transitory factors ( domestic and external) and of 
permanent/structural shifts towards inclusive growth over the next decade. World Bank (2016), Montenegro - 
Achieving Sustainable and Inclusive Growth amidst High Volatility : Systematic Country Diagnostic,  March. WT/TPR/S/369 • Montenegro  
 
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  firing restrictions are reluctant to hire in the first place, thus increasing long -term unemployment, 
which accounts for three -fourths of total unemployment (Section 1.2.4.4).15 Furthermore, informal 
work remains an issue (1.2.4.4).  
Table 1.2 Basic economic and social indicators, 2012 -16 
  2012  2013  2014  2015  2016  
Current GDP at market prices (€ million)  3,181.5  3,362.5  3,457.9  3,654.5  3,954.2  
GDP per capita at current market prices (€)  5,126.5  5,412.9  5,561.1  5,873.5  6,354.2  
GDP by economic activity at constant prices ( %age change ) 
Agriculture, forestry and fishing  -12.8 13.6 1.8 2.1 3.9 
Mining and quarrying  -7.7 -6.9 -0.1 3.4 -13.0 
Manufacturing  -12.9 6.5 -2.1 6.0 -4.1 
Electricity, gas, steam and air conditioning 
supply  1.4 38.7 -2.4 -4.7 3.5 
Water supply, sewerage, waste management and 
remediation activities  0.1 -6.0 4.4 -0.1 -4.8 
Construction  -11.9 1.2 2.2 4.7 32.1 
Services  .. .. .. .. .. 
Wholesale and retail trade  -1.8 4.2 2.6 4.3 1.9 
Transportation and storage  -4.1 4.6 1.6 4.8 4.8 
Accommodation and food service activities  3.2 2.7 1.9 16.6 1.9 
Information and communication  2.2 -4.7 0.4 3.2 -3.5 
Financial and insurance activities  -1.7 -3.5 6.0 3.6 6.7 
Real estate activities  0.9 1.4 2.2 2.3 1.5 
Professional, scientific and technical activities  4.0 3.0 3.4 4.2 0.0 
Administrative and support service activities  4.3 14.4 7.1 -0.2 2.3 
Public administration and defence  2.8 1.5 1.5 2.7 1.4 
Education  3.3 1.4 0.8 -0.3 -2.4 
Human health and social work activities  0.2 1.2 2.5 2.7 -2.1 
Arts, entertainment and recreation  2.5 3.7 2.6 3.8 -0.8 
Other service activities  -1.9 4.2 7.4 5.3 -0.3 
Share of sector in current GDP at basic prices  
Agriculture, forestry and fishing  8.9 9.8 10.0 9.7 9.0 
Mining and quarrying  1.3 1.3 1.4 1.4 1.3 
Manufacturing  4.9 4.9 4.8 4.9 4.6 
Electricity, gas, steam and air conditioning 
supply  3.5 5.7 5.0 4.2 4.3 
Water supply, sewerage, waste management and 
remediation activities  2.6 2.4 2.3 2.3 2.1 
Construction  5.5 4.5 4.2 4.5 6.8 
Services  73.4 71.4 72.3 72.9 71.8 
Wholesale and retail trade  14.5 14.1 14.2 14.8 14.8 
Transportation and storage  4.9 4.6 4.4 4.4 4.9 
Accommodation and food service activities  8.1 7.9 8.2 9.1 8.6 
Information and communication  5.9 5.5 5.2 5.1 4.7 
Financial and insurance activities  4.9 5.4 5.9 5.6 5.3 
Real estate activities  8.2 7.9 8.0 7.6 7.2 
Professional, scientific and technical activities  3.5 2.9 3.5 3.2 3.0 
Administrative and support service activities  1.1 1.4 1.3 1.3 1.5 
Public administration and defence  9.3 9.0 9.0 9.0 8.9 
Education  5.9 5.6 5.4 5.3 5.2 
Human health and social work activities  4.7 4.7 4.7 4.6 4.7 
Arts, entertainment and recreation  1.5 1.6 1.7 1.8 1.8 
Other service activities  0.8 0.9 0.8 1.1 1.2 
                                                                                                                                                  
Viewed at: http://documents.worldbank.org/curated/en/642701468179098025/pdf/105019 -SCD-P151813 -
OUO-9-SecM2016 -0165.pdf . 
15 IMF (2017), Montenegro - 2017 Article IV Consultation —Press Release; Staff Report; and Statement 
by the Executive Director for Montenegro , IMF Country Report No. 17/276, 13 September, Washington, D.C. 
Viewed at: https://www.imf.org/en/Publications/CR/Issues/2017/09/14/Montenegro -2017-Article -IV-
Consultation -Press -Release -Staff-Report -and-Statement -by-the-45244 . WT/TPR/S/369 • Montenegro  
 
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    2012  2013  2014  2015  2016  
Share of sector in total employment       
Agriculture, forestry and fishing  1.5 1.6 1.5 1.5 1.3 
Mining and quarrying  1.1 1.1 1.1 1.0 0.9 
Manufacturing  7.8 7.5 6.9 6.4 6.3 
Electricity, gas, steam and air conditioning 
supply  1.9 1.8 1.7 1.6 1.5 
Water supply, sewerage, waste management and 
remediation activities  2.8 2.8 2.9 2.9 2.8 
Construction  5.0 4.9 5.2 5.3 5.7 
Services  79.9 80.3 80.7 81.3 81.6 
Wholesale and retail trade  22.6 21.8 20.7 20.8 20.6 
Transport and storage  5.6 5.8 5.6 5.7 5.8 
Accommodation and food service activities  7.9 8.4 8.2 8.2 8.3 
Information and communication  2.9 2.8 2.8 2.8 2.8 
Financial and insurance activities  2.6 2.6 2.5 2.5 2.5 
Real estate activities  0.8 0.8 0.9 1.0 0.9 
Professional, scientific and technical activities  4.2 4.2 4.3 4.4 4.5 
Administrative and support service activities  2.2 2.9 4.5 4.6 4.8 
Public administration and defence  11.9 12.0 12.1 12.0 11.9 
Education  7.9 7.7 7.7 7.7 7.7 
Human health and social work activities  6.5 6.4 6.5 6.5 6.6 
Arts, entertainment and recreation  2.6 2.7 2.7 2.8 2.9 
Other service activities  2.1 2.1 2.2 2.3 2.3 
Source:  Statistical Office of Montenegro – MONSTAT online information. Viewed at: 
http://monstat.org/eng/index.php ; and data provided by the authorities of Montenegro.  
1.2.2   Prices  
1.7.  During the review period, consumer price  inflation (CPI) dropped from a peak of 4.1% in 
2012 to 1.5% in 2015, including two years of deflation, and averaged 1.4% (Table 1.1). In 2014, 
the 0.7% CPI deflation was due to a fall in the prices of food and non -alcoholic beverages, despite 
slight infla tionary pressure from a rise in domestic demand and revisions of administratively 
controlled prices (electricity prices increased by 1% in August 2014).16 Driven by strong growth in 
consumption, inflation resumed in 2015 but inflationary pressures subsided again in 2016, owing 
to declining international food and energy prices, thus mitigating the impact of growing domestic 
demand and leading to 0.3% deflation.17 According to the IMF, inflation is to increase to 2.25% in 
2017, in line with the inflation outloo k in the euro area and higher global oil and food prices.18 In 
2018, the increase in the value -added tax (VAT) and electricity prices is projected to add 
approximately 1 percentage point to inflation (Sections 1.2.3.2, 1.2.4.1, and 3.3.1.1.2). With 
euroization and high unemployment, inflation is projected to be contained at 2% over 2019 –22 
(Section 1.2.3.1).  
                                                
16 BTI (2016), Montenegro Country Report . Bertelsmann Stiftung, 2016. Viewed at: https://www.bti -
project.org/fileadmin/files/BTI/Downloads/Reports/ 2016/pdf/BTI_2016_Montenegro.pdf . 
17 EIU (2016), Montenegro Country Report 4th Quarter 2016, London. Viewed at: 
http://www.eiu.com/FileHandler.ashx?issue_id=1144922698&mode=pdf . 
18 IMF (2017), Montenegro - 2017 Article IV Consultation —Press Release; Staff Report; and Statement 
by the Executive Director for Montenegro,  IMF Country Report No. 17/276, 13 September, Washington, D.C. 
Viewed at: https://www.imf.org/en/Publications/CR/Issues/2017/09/14/Montenegro -2017-Article -IV-
Consultation -Press -Release -Staff-Report -and-Statement -by-the-45244 ; EIU (2016), Montenegro Country 
Report 4th Quarter 2016, London. Viewed at: 
http://www.eiu.com/FileHandler.ashx?issue_id=1144922698&mode=pdf ; and IMF (20 17), Montenegro 
Selected Issues , IMF Country Report No. 17/277 , September, Washington D.C. Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/20 17/09/14/Montenegro -Selected -Issues -45245 . WT/TPR/S/369 • Montenegro  
 
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  1.2.3   Main Macroeconomic Policy Developments  
1.2.3.1   Monetary and exchange rate policy  
1.8.  Monetary policy is conducted under the euroization regime (see below)  by the Central Bank 
of Montenegro (CBCG), an independent institution.19 Its mission is to promote and preserve the 
stability of the financial system, including support and maintenance of a sound banking system, 
and safe and efficient payment transactions. The CBCG contributes to price stability by publishing 
reports on price stability and delivering them to policymakers.20  
1.9.  The use of the free floating euro (Section 1.1) as Montenegro's domestic currency means that 
the CBCG has limited ability to conduct mon etary policy – as it lacks the traditional monetary 
policy tools to influence interest rates or inflation  – which in such a highly open and liberal 
economy is virtually in a self -balancing mode.21 In the long -run, Montenegro's inflation rate is in 
line with  the average in the euro area, despite some short -term deviations (Section 1.2.2).22 As 
the CBCG is not an issuing central bank, it does not have a reference interest rate, which 
effectively reduces its ability to influence bank lending.23 Interest rates are  not necessarily in line 
with the average Eurozone rates level as they reflect Montenegro's market realities, i.e. its size 
limitations, its relatively high number of banks and their operational costs, and risks . Between 
November 2012 and May 2013, the CBC G temporarily limited banking interest rates with a view to 
maintaining financial system stability.24 Since then the CBCG continued monitoring the interest 
rate trends; in 2014 the CBCG Council discussed the interest rate levels, which in light of the 
domes tic market realities were high and negatively affecting financial stability, and recommended 
the banks reduce them by the end  of the third quarter of 2014. As a result , interest rates dropped 
and continued falling. At end -September  2017, the weighted effec tive interest rate and the 
                                                
19 Dollarization or euroization refers to cases where a country decides to abandon its own currency and 
to substitute it with a foreign currency. The independence of the CBCG is ensured under the Law on the Central  
Bank of Montenegro of July 2010, the Law Amending the Central Bank of Montenegro Law and the Law 
Amending the Law on Foreign Current and Capital Operations passed on 16 October 2017. The Central Bank 
may, for the purpose of pursuing the established object ives and without prejudice to its autonomy and 
independence, cooperate with the Government and other government bodies and organizations, and take any 
actions within its authority to promote this cooperation. Central Bank of Montenegro Law (OG Nos. 40/10, 
46/10, and 6/13). Viewed at: http://www.cb -
cg.org/eng/slike_i_fajlovi/fajlovi/fajlovi_brzi_linkovi/propisi/laws/cbcg_law.pdf . 
20 BTI (2016), Montenegro Country Report,  Bertelsmann Stiftung, 2016. Viewed at: https://www.bti -
project.org/fileadmin/files/BTI/Downloads/Reports/2016/pdf/BTI_ 2016_Montenegro.pdf . 
21 According to the Central Bank of Montenegro Law (OG Nos. 40/10, 46/10 and 6/13), the primary 
monetary policy instruments include open market operations (OMO s), credit operations and reserve 
requirement s. In addition, the Law stipulat es that in the achievement of its objectives and exercising of its 
functions, the Central Bank may decide on the use of other monetary policy measures and instruments. 
However, these instruments are used in a limited manner. The authorities indicated that they only used the 
reserve requirement and only on  two occasions (2011, 2017). CBCG online information. Viewed at: 
http://www.cb -cg.org/eng/index.php?mn1=monetary_policy&mn2=cbcg_monetary_policy_instruments ; World 
Bank (2016), Montenegro - Achieving Sustainable and Inclusiv e Growth amidst High Volatility:  Systematic 
Country Diagnostic,  March. Viewed at: 
http://documents.worldbank.org/curated/en/642701468179098025/pdf/105019 -SCD-P151813 -OUO-9-
SecM2016 -0165.pdf ; and BTI (2016), Montenegro Country Rep ort, Bertelsmann Stiftung, 2016. Viewed at: 
https://www.bti -project.org/fileadmin/files/BTI/Downloads/Reports/2016/pdf/BTI_2016_Montenegro.pd f; and 
Fabris, N., Monetary policy framework of Central bank of Montenegro,  Summary.  
22 The European Central Bank (ECB) aims at inflation rates of below, but close to, 2% over the medium 
term. ECB online information. Viewed at: https://www.ecb.europa.eu/mopo/html/index.en.html ; and Fabris, 
N., Monetary policy framework of Central bank of Montenegro,  Summary.  
23 OMOs , effectively possible in this regime, have not been used so far. Also, there a re several different 
credit lines for liquidity support to banks. The only real monetary policy instrument is the reserve requirement. 
Fabris, N., Monetary policy framework of Central bank of Montenegro,  Summary ; World Bank (2016), 
Montenegro - Achieving S ustainable and Inclusive Growth amidst High Volatility : Systematic Country 
Diagnostic , March. Viewed at: 
http://documents.worldbank. org/curated/en/642701468179098025/pdf/105019 -SCD-P151813 -OUO-9-
SecM2016 -0165.pdf . 
24 During this period, the banks' lending activity did not slow down, the average weighted effective 
interest rate (WAEIR) declined, the spread between the WAEIR and the avera ge weighted nominal interest rate 
(WANIR) was reduced, and the majority of the banks reduced deposit interest rates, in accordance with their 
business policies.  WT/TPR/S/369 • Montenegro  
 
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  weighted nominal interest rate on total banking loans stood at an average of 6.31% and 6.98%, 
respectively .25  
1.10.   The euro has benefited Montenegro's foreign direct investment inflows , foreign trade and 
GDP growth as a whole .26 During  the review period, the nominal €/US$ exchange rate marginally 
appreciated in 2012, before a sharp depreciation in 2015 (Table 1.1) . According to the IMF, 
persistent stagnant productivity, rising labour costs, and continued large current account deficits 
have resulted in an appreciation of the CPI -based real effective exchange rate (REER) since 2007; 
the nominal effective exchange rate weighted by trading partners was the driver of this 
appreciation.27 In addition, the depreciation of the euro in conjunction  with quantitative easing by 
the European Central Bank (ECB) eased the appreciation of the REER.  
1.2.3.2   Fiscal policy  
1.11.   During the review period, Montenegro ran persistent annual fiscal deficits forcing a policy 
shift in 2017. Following a steady decline to 0.7% of  GDP in 2014, subsequent fiscal loosening lead 
to Montenegro's fiscal deficit progressively rising to reach 6% of GDP in 2016 (Table 1.1) largely 
due to cost overruns of the Bar -Boljare highway construction project initiated in 2015, the 
approval of a new Mothers' Benefit in 2016 (Section 1.2.4.4), and public -sector wage increases.28 
In response to these developments , the expansionary fiscal policy stance shifted to a more 
consolidated one in order to reduce unsustainable public debt, resolve large market re financing 
needs, and introduce budgetary restraints to expenditure pressures (Sections 1.2.1 and 1.2.4.1).29 
The first phase of the Fiscal Consolidation Plan was built into the 2017 Budget, and its second 
phase is aimed at putting public finances on a stable footing over the medium term through the 
                                                
25 System -wide solvency and liquidity indicators in the banking sector appear broadly sound, but  
significant pockets of vulnerabilities exist among domestically  owned banks (Section 4.4.1.1). BTI (2016), 
Montenegro Country Report,  Bertelsmann Stiftung, 2016. Viewed at: https://www.bti -
project.org/fileadmin/files/BTI/Downloads/Reports/2016/pdf/BTI_2016_Montenegro.pdf ; World Bank (2016), 
Montenegro - Achieving Sustainable and Inclusive Growth amidst High Volatility : Systematic Country 
Diagnostic , March. Viewed at: 
http://documents.worldbank.org/curated/en/642701468179098025/pdf/105019 -SCD-P15181 3-OUO-9-
SecM2016 -0165.pdf . 
26 In response to the hyperinflation of the 1990s that led to fiscal problems and destabilization of the 
financial sector, in 2000 Montenegro introduced the German Mark (Deutsche Mark) that was followed by the  
unilateral adoption of the euro without officially joining the euro area. Main benefits from euroization include: a 
solid anchor for inflation; lower interest rates through elimination of the currency risk; lower transaction costs 
from using one instead of two currencies prom oting trade or financial intermediation; stronger guarantee for 
stability than the currency board in promoting prudent economic policies as changes in parity are ruled out. 
Main costs include the central bank's loss of seigniorage revenue ; and potential la rge swings in output from 
adjustments to external shocks. Economic adjustments to meet the convergence criteria might be required as 
part of the EU accession process. World Bank (2016), Montenegro - Achieving Sustainable and Inclusive 
Growth amidst High Vo latility : Systematic Country Diagnostic , March. Viewed at: 
http://documents.worldbank.org/curated/en/642701468179098025/pdf/105019 -SCD-P151813 -OUO-9-
SecM2016 -0165.pdf ; BTI (2016), Montenegro Country Report,  Bertelsmann Stiftung. Viewed at: 
https://www.bti -project.org/filea dmin/files/BTI/Downloads/Reports/2016/pdf/BTI_2016_Montenegro.pdf  and 
WT/ACC/CGR/38, WT/MIN(11)/7, 5 December 201; The Globaleconomy online information. Viewed at: 
http://www.theglobaleconom y.com/guide/article/16/ ; Sorsa, P.,(2002), Euroization, Exit Strategies and Recent 
Critique of the IMF , August. Viewed at:  https://www.imf.org/external/country/bgr/rr/081202.pdf.  
27 IMF (2017), Montenegro - 2017 Article IV Consultation —Press Release; Staff Report; and Statement 
by the Executive Director for Montenegro,  IMF Country Report No. 17/276, 13 September, Washington, D.C. 
Viewed at: https://www.imf.org/en/Publications/CR/Issues/2017/09/14/Montenegro -2017-Article -IV-
Consultation -Press -Release -Staff-Report -and-Statemen t-by-the-45244 ; and IMF (2017 ), Montenegro Selected 
Issues , IMF Country Report No. 17/277 , September, Washington, D.C. Viewed at: 
https://www.imf.org/ en/Publications/CR/Issues/2017/09/14/Montenegro -Selected -Issues -45245 . 
28 The completion of the Bar -Boljare highway connecting the main Montenegrin seaport of Bar with 
Serbia is expected in 2019. Its original cost of €809 million (20% of GDP) was increased to nearly €1  billion 
(1⁄4 of GDP) because the dollar -denominated loan from China's ExIm Bank was not hedged. IMF (2017), 
Montenegro - 2017 Article IV Consultation —Press Release; Staff Report; and Statement by the Executive 
Director for Montenegro,  IMF Coun try Report No. 17/276, 13 September, Washington, D.C. Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2017/09/14/Montenegro -2017-Article -IV-Consultation -Press -
Release -Staff-Report -and-Statement -by-the-45244 . 
29 IMF (2017), Montenegro - 2017 Article IV Consultation —Press Release; Staff Report; and Statement 
by the Executive Director for Montenegro, IMF Country Report No. 17/276, 13 September, Washington D.C. 
Viewed at: https://www.imf.org/en/Publications/CR/Issues/2017/09/14/Montenegro -2017-Article -IV-
Consultation -Press -Release -Staff-Report -and-Statement -by-the-45244 . WT/TPR/S/369 • Montenegro  
 
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  2017-2020 Fiscal Consolidation Strategy (FCS) (Section 1.2.1).30 The 2017 -2020 FCS is aimed at 
raising revenues rather than reducing expenditure .31 Furthermore, it aims to stem further publ ic 
debt growth, which during the review period increased steadily from 53.4% (in 2012) to 67.5% (in 
2016) and to an estimated nearly 80% (in 2017) of GDP (Table  1.1); it is expected to be reduced 
towards the fiscal rule target of 60% of GDP by 2027.32 With highway construction spending set to 
increase substantially over 2017 -19, the overall fiscal deficit is  expected  to average 5.75% of GDP, 
causing general government debt (including guarantees) to reach 81% of GDP by 2019.33 Once 
highway spending is complete d, the overall fiscal balance should improve significantly in 2020, 
placing debt on a firm downward trajectory.   
1.2.4   Structural reforms  
1.12.   Trade and domestic reforms are considered intrinsically linked. According to the IMF, 
structural reforms to improve the business environment are crucial to strengthen Montenegro's 
competitiveness.34 The 2017-2019 Economic Reform Programme (Sections 1.2.1 and 2.2) , which is 
targeted at  reach ing sustainable and inclusive growth that would reduce a development gap 
between Monte negro and the EU average, envisages 20 priority reform measures in 9 areas: 
public finance management (e.g. introduction of e -procurement); energy, transport and 
telecommunications markets; sectoral development (e.g. industry, agriculture, tourism, finance ); 
business environment and reduction of the informal economy (e.g. electronic fiscal invoices, 
improvement of support to SMEs); research and innovation (e.g. establishment of a Science and 
Technology Park); foreign trade and investment facilitation (e.g. development of business zones); 
education and skills (e.g. development of qualifications in line with labour market needs); 
employment and the labour market; and social inclusion, poverty reduction and equal 
opportunities.35  
1.2.4.1   Tax reform  
1.13.   During the review pe riod, in addition to the tax -related measures of the Fiscal Consolidation 
Plan and the FCS (Sections 1.2.1, 1.2.3.2, 3.3.1.1.1 and 3.3.1.1.2), Montenegro has taken several 
                                                
30 The first phase, expected to deliver fiscal savings of 2.7% (2% according to the IMF) of 2017 GDP, 
consists of measures ranging from increasing the excise tax on fuel, extending the "progressive crisis" personal 
income tax, and partial cuts in Mothers Law Benefits to reducing public sector wages of senior officials, wage 
coefficients and performance bonuses. According to the authorities, the progressive crisis tax refers to the 
following: monthly advance payment of personal income tax is subject to a rate of 9% on the gross personal 
money income; the monthly advance payment of personal income tax on earnings exceeding the amount of 
average monthly gross earnings in the previous year are subject to a rate of 11%.  
31 The revenue increase measures include: VAT increase from 19% to 21% (expected raise of an 
additional 1% of GDP in revenues)  as from 1 January 2018; progressive increase on excise taxes on cigarettes 
(expected to raise an additional 0.5% of GDP), sweetened carbonated beverages (expected to raise an 
additional 0.1% of GDP), alcohol (expected to raise an additional 0.1% of GDP) and on coal (expected to raise 
an additional 0.1% of GDP) until 2020, and tax debt rescheduling programme permitting tax debts to be repaid 
over five years, with forgiveness of interest/penalties. The expenditure cut measures include: reform of the 
Mother's Law reducing the spending by nearly 0.75% of GDP by 2020; reduction in  the public wage bill by  an 
initial 8% in 2017 and later by 6%; and discretionary spending cuts amounting  to one third of GDP. 
IMF (2017 ), Montenegro Selected Issues , IMF Country Report No.  17/277 , September, Washington, D.C. 
Viewed at: https://www.imf.or g/en/Publications/CR/Issues/2017/09/14/Montenegro -Selected -Issues -45245 . 
32 World Bank (2017), Project appraisal document on a proposed loan in the amount of €14 million 
(US$15.7 million) to Montenegro for a revenue administration reform project, July. Viewed at: 
http://documents.worldbank.org/curated/en/492411501725677020/pdf/Montenegro -Revenue -PAD-
07122017.pdf ; IMF (2017 ), Montenegro Selecte d Issues . IMF Country Report No. 17/277 , September, 
Washington, D.C. Viewed at: https://www.imf.org/en/Publications/CR/Issues/2017/09/14/Montenegro -
Selected -Issues -45245 . 
33 IMF (2017), Montenegro – 2017 Article IV Consultation —Press Release; Staff Report; and Statement 
by the Executive Director for Montenegro,  IMF Country Report No. 17/276, 13 September, Washington, D.C. 
Viewed at: https://www.imf.org/en/Publications/CR/Issues/2017/09/14/Montenegro -2017-Article -IV-
Consultation -Press -Release -Staff-Report -and-Statement -by-the-45244 .  
34 IMF (2017), Montenegro - 2017 Article IV Consultation —Press Release; Staff Report; and Statement 
by the Executive Director for Montenegro,  IMF Country Report No. 17/276, 13 September, Washington, D.C. 
Viewed at: https://www.imf .org/en/Publications/CR/Issues/2017/09/14/Montenegro -2017-Article -IV-
Consultation -Press -Release -Staff-Report -and-Statement -by-the-45244 . 
35 Government of Montenegro (2017 ), Economic Reform Programme for Montenegro 2017 -2019,  
Podgorica, January.  WT/TPR/S/369 • Montenegro  
 
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  steps to reform and modernize its tax administration.36 The amendments in the legal f ramework 
were related to a clarification of the role of the tax and customs administration in revenue 
collection, simplification of tax procedures, strengthening of internal control of tax administration 
and the integrity of tax officials, and improving ta x collection. In 2013, the tax audit function was 
transferred to a new government -wide Inspection Directorate. The Montenegro Tax Administration 
(MTA) , under the Ministry of Finance as from 2013 (previously autonomous), remains, inter alia,  
responsible for collection of  a substantial part of the tax revenues and contributions to the Health 
and Pension Funds.37 In 2015, responsibility for the collection of excise duty was transferred to the 
Customs Administration.38 Established in 2012, a Large  Taxpayers Office (LTO) continues its 
responsibility for tax audits and is to provide taxpayer services as from 2018.39  
1.14.   A 2014 -2019 Tax Administration Corporate Strategy is aimed at, inter alia,  strengthening 
the tax administration capacities in line with the EU accession process, modernizing IT to support 
business processes and the tax administration 's human resources, increasing budget revenue 
collection and reducing the tax debt, preventing the grey economy , and diminishing the tax gap.40 
The 2014 -2019 Bu siness Strategy for the tax administration introduced a new tax accounting sub -
system in line with audit recommendations.41 The 2016 -2020 World Bank Group Country 
Partnership Framework (CPF) for Montenegro envisages, inter alia,  improv ing the effectiveness and 
efficiency of the MTA, and reduc ing the burden of compliance with tax legislation. The project 
entails an investment of €14 million (US$15.7 million equivalent) with financial and technical 
support.42  
1.15.   According to the World Bank and the European Union , the Montenegrin tax administration 
faces a number of organizational, human resource s, and IT challenges that hinder further 
improvements in performance. Significant investments are required to acquire a modern revenue 
management IT system and equip the st aff with modern tools to improv e tax registration, 
                                                
36 While tax rates are relatively low, the burden of compliance for taxpayers is relatively high. According 
to Doing Business 2016 , Montenegro is placed at 64th position out of 189 countries in terms of ease of paying 
taxes, mostly because of the significant time requi red to pay taxes and social contributions; 314 hours per year 
compared to close to 260 hours for other countries in the Western Balkan region. The high compliance burden 
is a result of narrow scope and effectiveness of taxpayer services, as well as weaknes ses in the legislative 
framework and information technology (IT) systems being used for revenue management. World Bank (2017), 
Project appraisal document on a proposed loan in the amount of €14 million (US$15.7 million) to Montenegro 
for a revenue administ ration reform project, July. Viewed at: 
http://documents.worldbank.org/curated/en/492411501725677020/pdf/Montenegro -Revenue -PAD-
07122017.pd f. 
37 World Bank (2017), Project appraisal document on a proposed loan in the amount of €14 million 
(US$15.7 million) to Montenegro for a revenue administration reform project, July. Viewed at: 
http://documents.worldbank.org/curated/en/492411501725677020/pdf/Montenegro -Revenue -PAD-
07122017.pdf . 
38 World Bank (2017), Project appraisal document on a proposed loan in the amount of €14 million 
(US$15.7 million) to Montenegro for a revenue administration reform project, July. Viewed at: 
http://documents.worldbank.org/curated/en/4924115 01725677020/pdf/Montenegro -Revenue -PAD-
07122017.pdf . 
39 There are currently 245 large taxpayers, which contributed €317 million (excluding excise collection) 
of tax revenue or close to 34% of total net revenue in 2016. This is a relatively low share as LTOs  in modern 
tax administrations typically collect close to 50% of the revenues. World Bank (2017), Project appraisal 
document on a proposed loan in the amount of €14 million (US$15.7 million) to Montenegro for a revenue 
administration reform project, July. Viewed at: 
http://documents.worldbank.org/curated/en/492411501725677020/pdf/Montenegro -Revenue -PAD-
07122017.pdf . 
40 Ministry of Finance (201 4), Tax Administration Corporate Strategy 2014 -2019, Podgorica, 2014. 
Viewed at: http://www.poreskauprava.gov.me/en/news/170143/TAX -ADMINISTRATION -BUSINESS -
STRATEGY -2014-2019.html . 
41 Fiscalis 2020 is an EU cooperation programme enabling national tax administrations to create and 
exchange information and expertise. European Commission ( 2015), Montenegro 2015 Progress report . Viewed 
at: https://ec.europa.eu/neighbourhood -
enlargement/sites/near/files/pdf/key _documents/2015/20151110_report_montenegro.pdf . 
42 World Bank (2017), Project appraisal document on a proposed loan in the amount of €14 million 
(US$15.7 million) to Montenegro for a revenue administration reform project, July. Viewed at: 
http://documents.worldbank.org/curated/en/492411501725677020/pdf/Montenegro -Revenue -PAD-
07122017.pdf . WT/TPR/S/369 • Montenegro  
 
- 22 - 
 
  collection, audit, enforcement , and taxpayer services.43 The informal economy constitutes another 
tax collection challenge and its formalization is a priority (Section 1.2.4.4).  
1.2.4.2   Privatization  
1.16.   State involve ment in the economy is limited compared to the past and focuses  on areas of 
strategic importance (e.g. energy, transport, and tourism); the privatization process has slowed 
down as it seems to be in its final phase (Section 3.3.4). The main aim of the 2017  privatization 
plan is to increase the competitiveness and efficiency of state -owned companies, boost foreign 
investments and entrepreneurship in all areas, and raise living standards.44 According to the IMF, 
the reinvigoration of the privatization process is key to creating fiscal space for high -quality 
projects, as some SOEs are a drag on public finances and productivity.45  
1.2.4.3   Competition policy  
1.17.   During the review period, Montenegro underto ok several legislative and institutional 
changes to competition policy, inter alia,  to harmonize domestic regulations with those of the 
European Union  (Section 3.3.3.). However, enforcement remains relatively weak due to insufficient 
staffing and expertise  as well as a lack of full independence in the decision -making process.46 
Notwithstanding these limitations, g rowing competition in banking has lowered interest rate 
spreads since 2014  and is expected  to boost credit supply, lower interest rates, and, thus,  support 
the economy.47 According to the 2017 -2019 Economic Reform Programme, the 
telecommunications market needs further advancement of competition and development of the 
telecommunications infrastructure.48  
1.2.4.4   Labour market policies  
1.18.   During the review period,  a number of legislative changes were introduced with the aim  of, 
inter alia , boost ing competitiveness and labour -market flexibility, enforc ing sanctions for 
unregistered work,  increas ing market participation, combat ing the grey economy, and provid ing 
regulations for the rights of employees in the event of bankruptcy. Action Plans for combating the 
grey economy are established annually. The 2016 -2020 National Strategy for Employment and 
Human Resources Development is aimed at creating optimal conditions for  employment growth 
and improvement of human resources, through four priorities: increasing employment; the 
efficient functioning of the labour market; improving qualifications in accordance with the needs of 
the labour market; and promoting social inclusio n and poverty reduction .  
1.19.   Despite these initiatives, labour market rigidities persist and cause high levels of long -term 
and youth unemployment, discourage open -ended employment and affect productivity. According 
to the IMF, the adoption of the current lab our market regulations increased the size of the grey 
                                                
43 World Bank (2017), Project appraisal document on a pr oposed loan in the amount of €14 million 
(US$15.7 million) to Montenegro for a revenue administration reform project, July. Viewed at: 
http://documents.worldbank.org/curated/en/492411501725677020/pdf/Montenegro -Revenue -PAD-
07122017.pdf  and European Commission (2016) , Montenegro 2016 Progress report . Viewed at: 
https://ec.europa.eu/neighbourhood -
enlargement/sites/near/files/pdf/key_documents/2016/20161109_report_montenegro.pdf . 
44 Government of Montenegro (2017 ), Economic Reform Programme for Montenegro 2017 -2019, 
Podgorica, January.  
45 IMF (2017), Montenegro - 2017 Article IV Consultation —Press Release; Staff Report; and Statement 
by the Executive Director for Montenegro,  IMF Country Report No. 17/276, 13 September, Washington, D.C. 
Viewed at: https://www.imf.org/en/Publications/CR/Issues/2017/09/14/Montenegro -2017-Article -IV-
Consultation -Press -Release -Staff-Report -and-Statement -by-the-45244 ; IMF (2017 ), Montenegro Selected 
Issues,  IMF Country Report No. 17/277 , September, Washington, D.C. Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2017/09/14/Montenegro -Selected -Issues -45245 . 
46 European Commission (2016) , Montenegro 2016 Progress report . Viewed at: 
https://ec.europa.eu/neighbourhood -
enlargement/sites/near/files/pdf/key_documents/2016/20161109_report_montenegro.pdf . 
47 IMF (2017), Montenegro – 2017 Article IV Consultation —Press Release; Staff Report; and Sta tement 
by the Executive Director for Montenegro,  IMF Country Report No. 17/276, 13 September, Washington, D.C. 
Viewed at: https://www.imf.org/en/Publications/CR/Issues/2017/09/14/Montenegro -2017-Article -IV-
Consult ation-Press -Release -Staff-Report -and-Statement -by-the-45244 .  
48 Government of Montenegro (2017 ), Economic Reform Programme for Montenegro 2017 -2019,  
Podgorica, January.  WT/TPR/S/369 • Montenegro  
 
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  economy because of high dismissal costs, a relatively high minimum wage, regulations on wages , 
and high tax burdens on low -income workers.49 At present , Montenegro does not have any 
incentives focused on  the formalization of economic activities. Furthermore, the public sector 
employs one -third of workers  and pays more than the private sector, thus reducing overall 
productivity.50 During the review period, labour productivity (Section 1.2.1) stagnated as an 
inflexible labour market drove  up unit labour costs (key measure of competitiveness), which 
increased by 22% during 2008 -16, compared with an average 9% for other Western Balkan 
countries.51 According to t he IMF, improvements in labour market flexibility can help reduce the 
size of the informal economy and create more employment opportunities.52 In this regard, the 
preparation of amendments of legislation in the labour market field , including a new Labour La w 
and the Law on Employment Mediation , were under way in November 2017.  
1.20.   During the review period, some ad hoc pension reforms with fiscal consequences were 
implemented.53 They include life -time Mother's Benefit and penalty -free retirement for certain 
jobs. The 2015 changes to the Law on Social and Child Protection gave mothers with three or more 
children the right to life -time benefit instead of a pension. As a result of this reform, 
5,000  mothers gave up their pension rights, accounting for a 3.3% drop in t he total number of 
pensioners. In total , 21,822 mothers claimed the new Mother's Benefit with a fiscal cost of 2% of 
GDP. In 2017, the Constitutional Court declared the law unconstitutional and the authorities 
implemented a less costly benefit. In 2016, al l pension benefits were increased by 3% and the 
minimum pension was increased by 20%. Several special privilege pension types were introduced 
for miners (who can retire with 30 years of service, 20 of which in mining) on 17 March 2010 and 
for parents of di sabled children (who can retire with 20 service years) that account for less than 
1% of total pensioners on 20 July 2011.54 A major challenge in the pension system is a 
consistently large funding gap (3.1% of GDP in 2016), where spending outpaces contributi ons; 
                                                
49 Average informal wages are at the level of the minimum wage. As of 2017, the minimum wage in 
Montenegro amounted to €288.1. As of 2014, 23% of those at work were engaged informally and 10% worked 
formally but paid only a fraction of the taxes and contributions they should pay. Informal employment is the 
highest among the young, the elderly , and those with a lower level of education; however, if not for this 
informal sector the number of unemployed would be higher and more people would face the risk of poverty. 
Country Economy.com online information. Viewed at: https://countryeconomy.com/national -minimum -
wage/montenegro ; IMF (2017 ), Montenegro Selected Issues , IMF Country Report No. 17/277 , September, 
Washington, D.C. Viewed at: https://www.imf.org/en/Publications/CR/Issues/2017/09/14/Montenegro -
Selected -Issues -45245 ; and UNDP (2016), Informal work from challenges to solutions , Podgorica. Viewed at: 
http://hdr.undp.org/sites/default/files/montenegro_national_human_development_report_2016_informal_work
.pdf. 
50 IMF (2017 ), Montenegro Selected Issue s, IMF Country Report No. 17/277 , September, 
Washington,  D.C. Viewed at: https://www.imf.org/en/Publications/CR/Issues/2017/09/14/Montenegro -
Selected -Issues -45245 . 
51 Largest productivity improvements occurred in growing sectors: tourism -related sectors of 
entertainment, food, and accommodation. Manufacturing and mining scaled back employment to boost 
productivity during this period. In real estate, empl oyment growth is twice output growth, indicating an 
overcapacity of firms may be driving down profits. The c onstruction sector experienced the largest fall in 
productivity ( -40% since 2011) and responded to falling output by adding employment. IMF (2017 ), 
Montenegro Selected Issues , IMF Country Report No. 17/277 , September, Washington, D.C. Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2017/0 9/14/Montenegro -Selected -Issues -45245 . 
52 IMF (2017), Montenegro - 2017 Article IV Consultation —Press Release; Staff Report; and Statement 
by the Executive Director for Montenegro,  IMF Country Report No. 17/276, 13 September, Washington, D.C. 
Viewed at: https://www.imf.org/en/Publications/CR/Issues/2017/09/14/Montenegro -2017-Article -IV-
Consulta tion-Press -Release -Staff-Report -and-Statement -by-the-45244 .  
53 Before 2012, Montenegro undertook two major pension reforms. The 2004 reform introduced, 
inter alia, a point system with a 50 -50 Swiss -formula for valorization and indexation, phasing in a high er 
retirement age (from 60 to 65 for men, from 55 to 60 for women), and tightening disability and survivor 
eligibility. However, the 2010 reform package introduced several unproductive reform measures. While 
increasing the retirement age to 67 for men and women (by 2025 for males and 2041 for females), it 
introduced several early retirement schemes. As a result 70% of new pensioners were early retirees below the 
statutory retirement age of 66 for men and 61 for women. The Pension formula was changed to 75% CPI and 
25% wage valorization and indexation, which yields fiscal savings in the long term at the expense of 
increasingly lower pension benefits, which ultimately become socially unsustainable. The current benefit is 
about €280 per month, which is around 5 6.2 % of net wages. IMF (2017 ), Montenegro Selected Issues , IMF 
Country Report No. 17/277 , September, Washington, D.C. Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2017/09/14/Montenegro -Selected -Issues -45245 . 
54 IMF (2017 ), Montenegro Selected Issues,  IMF Country Report No. 17/277 , September, 
Washington,  D.C. Viewed at: https://www.imf.org/en/Publications/CR/Issues/2017/09/14/Montenegro -
Selected -Issues -45245 . WT/TPR/S/369 • Montenegro  
 
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  furthermore, at 10.4% of GDP , Montenegro's pension funding is high compared to 9% of GDP in 
advanced economies and 5% of GDP in emerging economies.  
1.2.5   Balance of payments  
1.21.   In line with the trend of the growing share of trade in services versus the decli ning share of 
manufacturing, Montenegro continued to run a rising surplus in trade in services and a deficit in 
merchandise trade (Table 1.3). The merchandise trade deficit considerably exceeded the surplus in 
services. Consequently, during the review peri od the current account registered sustained deficits, 
averaging 15.4% of GDP during 2012 -15, and a sharp increase of up to 18.1% of GDP in 2016 due 
to the steady rise of imports of construction goods for large -scale infrastructure projects as well as 
for energy and tourism -related investments. The widening of the current account deficit reflects 
the extent to which gross investment (25% of GDP, 2016) continues to increasingly exceed the 
gross national savings (6.1% of GDP, 2016) (Table 1.1) .55 According to t he IMF, the current 
account deficit is projected to increase to 22% of GDP in 2018, when construction -related imports 
and commodity prices are to peak with investment projected to grow by 6 percentage points of 
GDP.56  
1.22.   During the review period, Montenegro's  gross external debt rose from 155.4% of GDP in 
2012 to a peak of 160.5% in 2014 and 2015 before dropping to 158% in 2016  (Table 1.1) due to 
deleveraging . According to the IMF, external debt is expected to peak at 175% of GDP by 2019, 
before declining to 1 65% in 2022. The implementation of the fiscal adjustment strategy, 
sustainable management of finances and improvement of the investment climate are key to place 
debt on a downward path and bolster market access.57  
Table 1.3 Balance of payments, 2012 -16  
(€ million)  
  2012  2013  2014  2015  2016  
Current account  -587.6  -486.6  -525.8  -482.8  -715.0  
Goods and services balance  -771.4  -675.4  -686.1  -674.4  -888.2  
Goods  -1,384.2  -1,328.6  -1,376.4  -1,463.5  -1,657.3  
Export  387.5  395.7  357.5  325.3  345.3  
Import  1,771.7  1,724.3  1,733.9  1,788.8  2,002.6  
Services  612.8  653.2  690.3  789.2  769.1  
Revenues  950.6  994.4  1,030.6  1,213.9  1,254.6  
Transport  167.5  173.1  176.9  214.6  234.0  
Travel - tourism  643.2  665.6  682.3  813.0  835.7  
Construction  34.3 41.4 48.2 45.4 31.6 
Other business services  41.8 42.8 48.2 50.8 64.6 
Other services  63.7 71.5 75.0 90.1 88.7 
Expenditures  337.7  341.2  340.3  424.8  485.5  
Transport  125.5  130.5  131.4  150.7  185.2  
Travel - tourism  30.5 35.9 35.6 40.2 60.1 
Construction  35.8 8.3 20.0 48.2 25.8 
Other business services  67.8 89.9 72.8 91.1 102.1  
Other services  78.2 76.5 80.6 94.6 112.4  
Primary income  53.8 65.5 45.9 92.8 52.9 
Revenues  206.2  212.7  226.1  247.7  257.8  
Compensation of employees  186.9  197.9  211.1  229.9  246.0  
Investment income  19.3 14.7 15.0 17.8 11.8 
Expenditures  152.4  147.1  180.2  154.9  204.9  
Compensation of employees  13.1 12.7 17.1 15.5 21.9 
                                                
55 Montenegro remains dependent on personal remittances from its workers abroad that represented 
9.5% of GDP in 2 015. Between 2012 and 2016, inflows grew steadily by about 15%, i.e. from €342.8 million to 
€393.4 million. Online information. Viewed at: http://ec .europa.eu/eurostat/statistics -
explained/index.php/Personal_remittances_statistics . 
56 IMF (2017 ), Montenegro Selected Issues . IMF Country Report No. 17/277 , September, 
Washington,  D.C. Viewed at: https://www.imf.org/en/Publications/CR/Issues/2017/09/14/Montenegro -
Selected -Issues -45245 . 
57 IMF (2017 ), Montenegro Selected Issues . IMF Country Report No. 17/277 , September, 
Washington,  D.C. Viewed at: https://www.imf.org/en/Publications/CR/Issues/2017/09/14/Montenegro -
Selected -Issues -45245 . WT/TPR/S/369 • Montenegro  
 
- 25 - 
 
    2012  2013  2014  2015  2016  
Investment income  139.3  134.5  163.1  139.4  183.1  
Secondary income  129.9  123.2  114.4  98.8 120.4  
Revenues  186.4  187.8  184.1  171.9  189.3  
Expenditures  56.5 64.6 69.7 73.1 68.9 
Capital account  7.4 2.6 0.0 -0.2 0.8 
Balance from current account and capital 
account  -580.2  -484.1  -525.8  -482.9  -714.2  
Financial accounta -481.6  -383.9  -280.3  -338.5  -490.1  
Direct investment, net (=assets -liabilities)  -461.6  -323.9  -353.9  -619.3  -371.6  
Net acquisition of financial assets  20.8 13.0 20.7 11.1 -167.0  
Net incurrence of liabilities  482.4  336.9  374.6  630.3  204.5  
Portfolio investment, net (=assets -liabilities)  24.7 -42.0 -84.4 -112.1  19.3 
Net acquisition of financial assets  20.1 37.9 66.6 -13.7 54.3 
Net incurrence of liabilities  -4.6 79.8 151.0  98.4 35.0 
Other investment, net (=assets -liabilities)  -89.3 -95.4 39.7 267.2  -298.3  
Net acquisition of financial assets  92.1 -61.9 23.1 269.0  -128.8  
Net incurrence of liabilities  181.5  33.5 -16.6 1.9 169.5  
Reserve assets of Central Bank of 
Montenegro  44.6 77.4 118.4  125.7  160.6  
Net errors and omissions  98.6 100.2  245.5  144.4  224.1  
a  Net lending (+) / net borrowing ( -). 
Source:  Central Bank of Montenegro online information. Viewed at: http://www.cb -cg.org/eng/index.php . 
1.23.   Since 2012, Montenegro's total reserves have increased steadily by an overall 84.5% due to  
growth of the positions of foreign currency and securities related to negative interest rates in the 
Eurozone (Table 1.1) ; in 2016, they were equivalent to 3.4 months of imports of goods and 
services. As of October 2017, foreign exchange reserves stood at US$886.6 million and they were 
equivalent to about 2.7 months of imports of goods and services. According to the IMF, overall 
liquidity buffers appear adequate in the event of modest deposit run p ressures on banks; by 2022, 
Montenegro's gross international reserves are projected to reach US$1.1 billion.58  
1.3  Developments in Trade and Investment  
1.3.1   Trends and patterns in trade  
1.24.   The openness of the Montenegrin economy to international trade, and the aim to integrate 
into the world economy continue to be reflected in the ratio of its trade (exports plus imports) in 
goods and services to GDP which,  despite a progressive decline from a peak of 111.8% in 2012 to 
100.1% in 2014, rose gradually to 103.4% in 2016 (Table 1.1)  partly due to trade developments 
related to machinery for the highway construction, energy investments and tourism -related 
services.   
1.25.   Since 2012, Montenegro's merchandise trade has remained dependent on mining and 
manufactures (Chart 1.1, Table s A1.1 and A1.2). The share of agriculture, machinery and 
transport equipment, chemicals, ores and electric current in total exports has risen, whereas the 
share of aluminium and aluminium alloys dropped. According to the IMF, the goods -export base is 
becoming increasingly concentrated in low value -added sectors, which are exposed to volatile 
commodity prices and competition from low -cost countries.59 Manufactures continue to account for 
more than half of total imports, whereas agriculture accounts for aroun d 24%.  
                                                
58 IMF (2017), Montenegro - 2017 Article IV Consultation —Press Rele ase; Staff Report; and Statement 
by the Executive Director for Montenegro,  IMF Country Report No. 17/276, 13 September, Washington, D.C. 
Viewed at: https://www.imf.org/en/Publications/CR/Issues/2017/09/14/Montenegro -2017-Article -IV-
Consultation -Press -Release -Staff-Report -and-Statement -by-the-45244 ; IMF (2017 ), Montenegro Selected 
Issues,  IMF C ountry Report No. 17/277 , September, Washington, D.C. Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2017/09/14/Montenegro -Selected -Issues -45245. 
59 IMF (2017), Montenegro - 2017 Article IV Consultation —Press Release; Staff Report; and Statement 
by the Executive Director for Montenegro,  IMF Country Report No. 17/276, 13 September, Washington, D.C. 
Viewed at: https://www.imf.org/en/Publications/CR/Issues/2017/09/14/Montenegro -2017-Article -IV-
Consult ation-Press -Release -Staff-Report -and-Statement -by-the-45244 . WT/TPR/S/369 • Montenegro  
 
- 26 - 
 
  Chart 1.1 Composition of merchandise trade, 2012 and 2016  
 
Source: UNSD, Comtrade database (SITC Rev.3).  
 
1.26.   At the same time, Europe remains Montenegro's main market and supplier. While the 
direction of merchandise trade with countries in the region has remained virtually unchanged for 
imports, the pattern of exports within Europe shifted slightly from the Europ ean Union  to other 
Western Balkan countries partly reflecting Montenegro's sensitivity to market shifts of its limited 
export -base (Chart 1.2, Tables A1.3 and A1.4). Notwithstanding some fluctuations in trade shares, 
almost half  of all imports continue to originate in the European Union ; more than 33% of imports 
are from other Western Balkan countries. With regards to exports, the European Union  remains 
the main destination despite a rise in the share of neighbouring countries. Montenegro's main 
individual trading partners remain the European Union , Serbia, Bosnia and Herzegovina, and China 
Chart 1.[MNE] Composition of merchandise trade, 2012 and 2016
2012 2016
(a)    Exports (f.o.b.)
Machinery and transport 
equipment 7.1%
Manuf.
19.5%Manuf.
25.6%
Mining
48.0%Agriculture
25.8%Machinery and transport 
equipment 
9.7%
Chemicals 
5.4%
Electric current
11.5%Other 0.5%
Other mining
4.8%Iron and 
steel
4.5%
Ores and other 
minerals 
12.3%Food 15.7%
Aluminium and 
aluminium alloys, 
unwrought
19.4%Agricultural 
raw material
10.1%Other 
manufactures
6.0%
Total:  €364.9 million Total:  €320.3 million  
(b)    Imports (c.i.f.)
Chemicals
9.3%Transport 
equipment  
6.9%
Manufactures
53.5%
Other semi -
manufactures
11.0%Non-electrical 
machinery
4.5%Mining
21.6%
Fuels
18.4%
Iron and steel
2.0%Electrical 
machines
6.9%Food
24.1%
Agricultural raw 
material
0.8%
Other mining
3.2%Mining
11.1%Agriculture
24.1%
Manufactures
64.8%Other
0.1%
Food
23.5%
Agricultural 
raw material
0.6%
Chemicals
9.8%Transport 
equipment  
7.6%
Other semi -
manufactures
12.7%Non-electrical 
machinery
7.3%Fuels
9.2%
Iron and steel
2.4%Electrical 
machines
10.8%
Other 
mining
1.9%Other 
manufactures
14.2%
Agriculture
24.8%
Total:   €1,818.4 million Total:  €2,045.6 million Other
0.1%Mining
58.0%Chemicals 3.3%
Source :  UNSD, Comtrade database (SITC Rev.3).Other 
manufactures
12.9%Electric current
10.5%Other 0.6%
Other mining
3.5%Agriculture
22.0%Iron and steel
4.5%
Ores and other 
minerals 
8.9%Food 15.5%
Aluminium and 
aluminium alloys, 
unwrought
35.1%Agricultural raw 
material
6.5%Other 
manufactures
4.6%WT/TPR/S/369 • Montenegro  
 
- 27 - 
 
  whose merchandise trade share increased considerably  mainly due to the highway construction by 
the China Road and Bridge Corporation .60 
Chart 1.2 Direction of merchandise trade, 2012 and 2016  
 
 
Source:  UNSD, Comtrade database.  
                                                
60 IMF (2017), Montenegro - 2017 Article IV Consultation —Press Release; Staff Report; and Statement 
by the Executive Director for Montenegro,  IMF Country Report No. 17/276, 13 September, Washingto n, D.C. 
Viewed at: https://www.imf.org/en/Publications/CR/Issues/2017/09/14/Montenegro -2017-Article -IV-
Consultation -Press -Release -Staff-Report -and-Statement -by-the-45244 . 
Chart 1.[MNE] Direction of merchandise trade, 2012 and 2016
2012 2016
(a)    Exports (f.o.b.)
Other Europe 
4.4%
Serbia 
25.6%Europe
79.3%Other 
14.8%
China 
5.9%
EU-28 
36.6%
Bosnia and 
Herzegovina
8.3%Albania 4.5%
Total:  €364.9 million Total:  €320.3 million
(b)    Imports (c.i.f.)
Europe  
85.7%Americas
2.3%Other 
4.8%
Serbia 
29.3%EU-28 
44.5%Bosnia and 
Herzegovina
6.8%Other Europe 5.2%
Europe  
83.3%Americas
2.5%
Serbia 
22.3%EU-28 
48.1%Bosnia and 
Herzegovina
5.5%Other Europe 
7.4%China
9.0%Other 
5.2%
Total:   €1,818.4 million Total:   €2,045.6 millionOther Europe 4.6%
Source:  Serbia 
22.8%
China
7.2%Europe
88.3%Other 
10.7%China 
1.0%
EU-28 
51.2%
UNSD, Comtrade database.Bosnia and 
Herzegovina
7.5%Albania 2.1%WT/TPR/S/369 • Montenegro  
 
- 28 - 
 
  1.3.2   Trends and patterns in foreign direct investment  
1.27.   During the review period, Montenegro remained a major importer of capital . Inward FDI is 
not only an additional source of capital, but it also brings with it entrepreneurship, management 
skills, and especially new technology, which contribute to improved total factor productivity. The 
authorities see FDI as critical to boosting  long-term growth and promoting economic 
diversification, particularly in tourism and energy.61 After a drop of about 30% in 2013 due to a 
decline of equity investments, net FDI inflows (on a balance -of-payments basis) peaked in 2015 
(€619.3 million), and consequently decreased by about 40% in 2016 mainly due to withdrawal of 
accumulated profit of one company (Table 1.3); between January and September 2017, net FDI 
inflows rose by an estimated 10.6% compared to the same period of the previous year. Similar 
developments are also reflected in total FDI inflows (Table 1.4) that are estimated to have had 
negative growth of 25.7% in the period from  January to September 2017 on a year -to-year basis. 
So far the largest part of FDI inflows has been directed to the purchase of real estate and into 
tourism activities rather than greenfield or productive investment.62 Between 2012 and 2016, FDI 
inflows rel ated to real estate purchases almost halved to 3.5% of GDP, while intercompany debt 
and more productive investments in companies and banks increased.63 No data  on FDI inflows by 
sector were available with the authorities. The i nward FDI pattern by investmen t origin has 
undergone some changes. In 2016, FDI inflows originated mainly in the European Union , Norway 
and the Russian Federation, the second largest source of FDI in 2013, whose share dropped 
significantly due to its recent recession (Table 1.4). Accor ding to the IMF, inward FDI will remain 
the largest financing item for the large trade deficit in goods and services in the balance  of 
payments.64  
Table 1.4 Total FDI inflows, 2012 -16 
 2012  2013  2014  2015  2016  
Total inflows (in € million)  633.7  479.2  498.1  757.4  687.2  
 (% of total)  
Norway  4.3 1.0 0.4 0.4 27.5 
Russian Federation  25.5 28.5 24.6 9.1 7.7 
Italy 5.7 0.4 0.5 3.1 7.4 
Azerbaijan  0.0 0.0 0.0 2.2 6.9 
Hungary  3.4 0.1 0.2 1.0 5.0 
Switzerland  6.3 7.9 11.2 4.4 4.7 
Serbia  4.2 3.0 6.2 6.5 3.7 
United Arab Emirates  1.9 2.4 2.4 3.0 3.1 
Slovenia  9.2 9.9 8.2 2.4 2.9 
Turkey  3.9 4.7 2.9 2.3 2.6 
Germany  2.3 4.7 4.5 1.6 2.4 
Austria  1.5 2.5 1.8 34.8 2.4 
South Africa  0.0 0.0 0.0 0.0 2.2 
United Kingdom  2.4 1.8 4.5 3.5 1.9 
Bosnia and Herzegovina  0.4 0.3 1.6 1.9 1.6 
Luxembourg  0.3 6.9 1.9 1.0 0.9 
United States  0.6 2.5 1.9 1.5 0.8 
Cyprus  2.7 1.7 2.7 1.2 0.8 
Netherlands  19.8 5.7 10.3 9.4 0.6 
Virgin Islands (GBR)  0.2 3.1 3.1 0.5 0.6 
Other trading partners  5.2 12.8 11.3 10.3 14.3 
Source:  Central Bank of Montenegro online information. Viewed at: http://www.cb -cg.org/eng/index.php . 
                                                
61 IMF (2015), Montenegro - 2015 Article IV Consultation —Press Release; Staff Report; and Statement 
by the Executive Director for Montenegro,  IMF Country Report No. 17/276, 8 March, Washington, D.C. Viewed 
at: https://www.imf.org/ en/Publications/CR/Issues/2016/12/31/Montenegro -2015-Article -IV-Consultation -
Press -Release -Staff-Report -and-Statement -by-the-43772 . 
62 World Bank (2016), Montenegro - Achieving Sustainable and Inclusive Growth amidst High Volatility : 
Systematic Country Diag nostic,  March. Viewed at: 
http://documents.worldbank.org/curated/en/642701468179098025/pdf/105019 -SCD-P151813 -OUO-9-
SecM2016 -0165.pd f. 
63 IMF (2017 ), Montenegro Selected Issues , IMF Country Report No. 17/277 , September, 
Washington,  D.C. Viewed at: https://www.imf.org/en/Publications /CR/Issues/2017/09/14/Montenegro -
Selected -Issues -45245 . 
64 IMF (2017), Montenegro - 2017 Article IV Consultation —Press Release; Staff Report; and Statement 
by the Executive Director for Montenegro,  IMF Country Report No. 17/276, 13 September, Washington, D. C. 
Viewed at: https://www.imf.org/en/Publications/CR/Issues/2017/09/14/Montenegro -2017-Article-IV-
Consultation -Press -Release -Staff-Report -and-Statement -by-the-45244 . WT/TPR/S/369 • Montenegro  
 
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  2  TRADE AND INVESTMENT  REGIMES  
2.1  General Framework  
2.1.  Montenegro has been an independent and sovereign State since 2006. As set out in the 2007 
Constitution, state power is divided between the legislative, executive and judicial branches. 
Montenegro is divided into 23 municipalities or local government units (LGUs), each with its own 
President and Assembly. Municipalities exercise certain property -related powers over state -owned 
assets, have their own budget, and are financed from  their own resources and the assets of the 
State.1  
2.2.  The President of Montenegro represents the country abroad, proclaims laws, calls 
Parliamentary elections, proposes the Prime Minister -Designate to the Parliament, and appoints 
and revokes ambassadors and heads of diplomatic missions. The President is elected through 
direct ballot for a period of five years, with one re -election possible. The last presidential election 
was in April 2013, with the next to take place in 2018.  
2.3.  Legislative power is exercised by  the Parliament of Montenegro which adopts: the 
Constitution; laws, regulations and general acts; the budget; and the Development Plan and 
Spatial Plan of Montenegro . The Parliament also regulates state administration; elects and 
dismisses from duty the Pr ime Minister and members of the Government, the President of the 
Supreme Court, and the President and judges of the Constitutional Court; and confirms 
international agreements.2 The Parliament consists of 81 Members of the Parliament elected for a 
four-year period through a direct ballot. The last legislative election took place in October 2016, 
with the next to be held in 2020.  
2.4.  The executive authority rests with the Government of Montenegro which is, inter alia , in 
charge of internal and foreign policy; enforcement of laws, regulations and general acts; adoption 
of decrees, decisions and other acts for the enforcement of laws; signing international agreements, 
proposals for the budget, and Development and Spatial plans.3 Within 30 days of the constitution  
of the Parliament, the President proposes a candidate for Prime Minister, who then presents 
his/her programme and the composition of the Government.4 As at November 2017, the 
Government of Montenegro was composed of the Prime Minister, three deputy Prime Ministers and 
19 ministers, including one without portfolio.5  
2.5.  The judicial system comprises the Constitutional Court and courts of regular competence, 
namely, the Supreme Court, the Administrative Court, the Appellate Court, the Commercial Court, 
two high  courts, fifteen  basic courts and three misdemeanour courts. The misdemeanour courts 
decide over misdemeanour offences, with appellate recourse to the High Misdemeanour Court. 
Basic courts are first instance courts which have jurisdiction over criminal off ences, civil cases, 
labour law cases, and other legal matters. High courts adjudicate, inter alia,  in the first instance on 
criminal proceedings and in the second instance on appeals against basic court decisions. The 
Court of Appeal hears appeals against high court decisions in the first instance and appeals against 
the decisions of the Commercial Court, as well as resolving jurisdictional conflicts between basic 
and high courts. The Supreme Court, the highest court in Montenegro, adjudicates, inter alia,  in 
the third instance when so mandated by law, over extraordinary legal remedies against decisions 
of the courts in Montenegro and against decisions of its panel, when so prescribed by law.6 The 
judge, the president of the court and the lay judges are elec ted or dismissed from duty by the 
Judicial Council. The Council is elected for a period of four years and is composed of the President 
                                                
1 The Municipality is entitled to express its view when laws and regulations are drafted that define the 
status, rights, and duties of local self -government. Articles 115 and 116 of the Constitution of Montenegro; 
Article 13 of the Law on local self -government (42/03, 28/04, 75/05, 13/06, 88/09 and 3/10). Viewed at: 
http://uom.me/en/wp -content/uploads/2010/12/Law -on-Local-Self-Government.pdf . 
2 Article 82 of the Constitution of Montenegro.  
3 Article 100 of the Constitution of Montenegro.  
4 Article 103 of the Constitution of Montenegro.  
5 Government of Montenegro online information. Viewed at : http://www.gov.me/en/homepage/Cabinet -
members .  
6 The Supreme Court of Montenegro online information. Viewed at: http://en .sudovi.me/vrhs/judicial -
power/organisation/  and http://en.sudovi.me/vrhs/judicial -power/jurisdicton/ . WT/TPR/S/369 • Montenegro  
 
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  of the Supreme Court, four judges, four reputable lawyers, and the Minister in charge of judicial 
affairs.7  
2.6.  In July 2013 , 16 constitutional amendments were introduced to strengthen the independence 
of the judiciary by reducing political influence on the appointment of prosecutors and high -level 
judicial officials through more transparent and merit -based procedures, and qual ified majority 
thresholds where parliament is involved.8 These reforms are designed to bring Montenegro in line 
with the recommendations of the Venice Commission and with European standards.9 Additionally, 
a 2014 -2018 Judicial Reform Strategy has resulted in increased judicial efficiency and a reduction 
in the backlog of pending cases.10 According to the 2017 World Bank's Doing Business Report, 
resolving a standard contract enforcement dispute takes 545 days and costs 25.7% of the claim, 
thus putting Montene gro in 41st place out of 190 economies in the ranking of the ease of enforcing 
contracts (133rd place out of 183  economies in 2012).11 
2.7.  The right to propose laws and other acts is granted to the Government and Members of 
Parliament, as well as to a petition from 6,000 voters, through the Member of the Parliament they 
authorize.12 In practice, the vast majority of laws in Montenegro are drafted by the Government.13 
The procedure for adopting laws in the Parliament is initiated by the submission of a Bill by at 
most two designated representatives of the Parliament. Upon the submission of a Bill, the 
President of the Parliament communicates it to the Members of the Parliament and competent 
Committees and posts it on the parliamentary website. The Government (unless  it is a proposer) 
provides its opinion within 15 days of the receipt of the Bill.14 Depending on the area, laws are 
adopted by the Parliament through a majority or two -third majority vote.15 An adopted law is 
passed to the President of Montenegro, who procl aims it within seven days.16  
2.8.  In descending order of importance, Parliamentary acts include: the Constitution, laws, spatial 
plans, Rules of Procedure of the Parliament, declarations, resolutions, decisions, recommendations 
and conclusions.17 Ministries pass  bylaws, orders and instructions for their implementation.  
2.9.  According to the Constitution, ratified and published international treaties become part of the 
internal legal order. They have supremacy over national legislation and are directly applicable 
                                                
7 Amendment VIII of Article 127 of the Constitution of Montenegro.  
8 In particular, the reformed areas were related to the appointment and dismissal of the President of the 
Supreme Court (Article 124 of the Constitution of Montenegro, Amendment VII); the composition and 
competence of the Judicial Council (Articles 127 and 128 of the Constitution of Montenegro, Amendments  VIII 
and IX); the election and dismissal of judges of the Constitutional Court (Articles 151 and 153 of the 
Constitution of Montenegro, Amendments XV and XVI); and the appointment and dismissal of the Supre me 
State Prosecutor and prosecutors (Articles 135, 136 and 137 of the Constitution of Montenegro, 
Amendments  X, XI and XII). European Commission (2013). Montenegro 2013 Progress report . Viewed at: 
https://ec.europa.eu/neighbourhood -
enlargement/sites/near/files/pdf/key_documents/2013/package/brochures/montenegro_2013.pdf ; Constitution 
of Montenegro; Amendments to the Co nstitution of Montenegro.  
9 European Commission (2013), Montenegro 2013 Progress report . Viewed at: 
https://ec.eur opa.eu/neighbourhood -
enlargement/sites/near/files/pdf/key_documents/2013/package/brochures/montenegro_2013.pdf . 
10 UNDAF (2017 ), Integrated UN Programme for Montenegro 2017 -2021. Viewed at: 
https://www.unece.org/fileadmin/DAM/operact/Technical_Cooperation/Delivering_as_One/UNDAF_country_file
s/UNDAF_files_2015 -2020/Montenegro -UNDAF -2017-2021-Final.pdf . 
11 World Bank (2017), Doing Business 2017: Equal Opportunities for All,  Washington, D.C. Viewed at: 
http://www.doingb usiness.org/~/media/WBG/DoingBusiness/Documents/Annual -Reports/English/DB17 -
Report.pdf ; World Bank (2012), Doing Business 2012: Doing business in a more transparent world , 
Washington, D.C. Viewed at: http://www.doingbusiness.org/~/media/WBG/DoingBusiness/Documents/Annual -
Reports/English/DB12 -FullReport.pdf . 
12 Article 93 of the Constitution of Montenegro.  
13 BTI (2016), Montenegro Count ry Report , Bertelsmann Stiftung, 2016. Viewed at: https://www.bti -
project.org/fileadmin/files/BTI/Downloads/Reports/2016/pdf/BTI_2016_Montene gro.pdf . 
14 Thereafter the Bill is, firstly, considered by the relevant Committees (first reading), and, secondly, at 
the sitting of the Parliament (second and third readings). Articles 130 -150 of The Rules of Procedure of the 
Parliament of Montenegro.  
15 Article 91 of the Constitution of Montenegro.  
16 In the case of a speedy procedure the law is to be proclaimed within three days or sent back to the 
Parliament for a new decision -making process. The re -adopted laws are to be proclaimed. Article 94 of the 
constitution of Montenegro.  
17 Articles 129 of the Rules of Procedure of the Parliament of Montenegro.  WT/TPR/S/369 • Montenegro  
 
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  when  they regulate relations differently from internal legislation.18 An international treaty must be 
ratified by law and the legislative procedure is similar to the one on the adoption of internal laws.19 
2.10.   Over the review period, initiatives have been taken to i mprove the quality of regulations. 
Initiatives include  the "Regulatory Guillotine" project and the introduction of a regulatory impact 
assessment (RIA) process.  
2.11.   The objectives of the Regulatory Guillotine project, launched in 2010, are to simplify 
administ rative procedures, improve the business environment and ensure speedier and higher 
quality exercise of citizen's rights before state administrative bodies through an overall analysis of 
regulations. The analysis process has followed three phases. Firstly, the collection of the overall 
legal corpus in Montenegro as the basis for the development of an electronic registry of 
regulations; secondly an analysis of the regulations themselves, involving citizens, the professional 
public and the business sector; and  thirdly the provision of opinions and recommendations for 
amendments to, or abolishment of regulations, conducted in cooperation with regulators or line 
ministries, state administrative bodies and regulatory agencies. The process covered business 
regulati ons, system reforms, inspection procedures, and the harmonization of administrative 
proceedings.20 In May 2012, the Government of Montenegro adopted a first Action Plan with 
1,872  recommendations to be implemented by 2015; this was followed by a revised Act ion Plan, 
issued in 2013.21 Out of the 1,872 recommendations, 1,446 were accepted (the remaining 
426 recommendations referred to legislation that had either been changed or no longer existed). 
By mid -2017, 1,229 or 85% of the accepted regulations had been i mplemented. The authorities 
indicated that once full implementation has been achieved, the Ministry of Finance will undertake a 
selective impact analysis.   
2.12.   The Regulatory Impact Assessment (RIA) process was introduced in January 2012 under 
which the propo nents of primary and secondary legislation are obliged to conduct a regulatory 
impact assessment of proposed laws. The RIA must be sent to the Ministry of Finance for its 
opinion prior to it being sent to the Government for discussion and approval.22 Since 2012, the 
Ministry of Finance has provided around 1,750 opinions on legislation and accompanying RIA 
reports in terms of implications for the business environment and its impact on the state budget.23 
RIAs and MOF opinions are not yet publically available. The OECD has reported that while the RIA 
framework is well developed, the private sector has expressed concern that the Government has 
                                                
18 Article 9 of the Constitution of Montenegro.  
19 The Bill on the ratification of  an international treaty must be supported by an explanatory statement 
including the reasons for proposing its ratification and an estimate of required financial resources if it incurs 
liabilities for the budget of Montenegro. Articles 160 and 161 of the Rules of Procedure of the Parliament of 
Montenegro.  
20 Regulations etc. in  the following areas have been subject to analysis: internal trade and 
competitiveness protection, consumer protection, intellectual property, standardization, accreditation, 
communal activities, budget and treasury, general security and defence, industry an d entrepreneurship, human 
and minorities rights, meteorology and precious materials, technical provisions, hunting, tobacco and tobacco 
products, culture and media, social and children protection, waters, wine and olive growing, education, 
vocational rehab ilitation and employment of persons with disabilities, the strategic impact assessment, geology 
and hydrocarbons, concessions, mining, tourism and hospitality, real estate, landscaping and construction, the 
pension and disability insurance, labour regulati ons and occupational health and safety, employment of 
foreigners, veteran and disability protection, and international cooperation. Ministry of Finance online 
information. Viewed at: http://www.mif.gov.me/en/sections/regulatory_reform/ . 
21 European Economic and Social Committee (2014), Chapter 20 of the accession negotiations – 
Enterprise and industrial policy . Viewed at: http://www.eesc.europa.eu/?i=portal.en.events -and-activities -
montenegro -jcc-meeting -05-reports.34302 ; and Government of Montenegro (2017 ), Economic Reform 
Programme for Montenegro 2017 -2019. Podgorica, January.  
22 This obligation is stipulated in Articles 33 and 40 of the Rules of Procedure of the Government of 
Montenegro (OG No. 3/12). The Department for Implementation of Regulatory Impact Asse ssment within the 
Ministry of Finance is, inter alia , responsible for: the implementation of policies and procedures; the efficient 
implementation of the RIA process; analysis of RIA reports and assessing their adequacy; supporting ministries 
to ensure RIA  reports include all the possible implications that new regulations could have on citizens, 
businesses and the country; and for undertaking training activities. The Directorate for the Budget within the 
Ministry of Finance reviews each RIA to assess the co mpleteness and adequacy of the RIA fiscal impact 
assessments. The Directorate for Financial System and Improvement of the Business Environment within the 
Ministry of Finance is, inter alia , responsible for preparing opinions on the new regulations from the  perspective  
of business barriers.  
23 Presentation by Bojana Boskovic, Director General of the Ministry of Finance of Montenegro – 
Implementation of RIA in Montenegro . Provided by the authorities.  WT/TPR/S/369 • Montenegro  
 
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  not been thoroughly implementing follow -ups to RIA recommendations.24 Over the review period, 
steps have been undertaken to improve the process through training of civil servants responsible 
for preparing regulations and introducing RIAs into the regulatory system, as well as through 
development of a RIA manual.25 The authorities noted that the Strategy of Public Administrati on 
for the period 2016 -2020 contains as a priority improving the RIA preparation process, while 
respecting OECD quality standards. This Strategy also envisages extending the scope of the RIA 
process to other socio -economic areas such as social policy and t he environment. A proposal has 
been made by the Ministry of Finance and the Ministry of Public Administration to make RIA 
reports available when regulations are the subject of public debate (see below), in order to initiate 
a wider social dialogue on the e ffects of new regulations.26  
2.2  Trade Policy Formulation and Objectives  
2.13.   The Ministry of Economy of Montenegro has prime responsibility for formulating and 
implementing policies related to multilateral, regional and bilateral trade as well as for negotiating 
and coordinating implementation of international treaties and relations with international economic 
institutions. Various other ministries are involved in international trade policy and trade relations. 
In particular, the Ministry of Finance is in charge o f cooperation with international financial 
institutions as well as deal ing with issues related to GSP, customs procedures, import/export tariffs 
and public procurement. The Ministry of Agriculture and Rural Development enacts SPS measures 
related to export ation and importation of agricultural goods and has responsibility for the 
agricultural aspects of RTAs. The Ministry of Foreign Affairs communicates and coordinates 
communications in the area of foreign affairs and also carries out diplomatic missions and  other 
professional affairs related to the realization of political, economic and other relations with other 
States and international organizations. The Statistical Office of Montenegro (MONSTAT) provides 
updated statistical data on trade and the Central B ank of Montenegro is in charge of statistics on 
FDI and balance of payments.27  
2.14.   Inputs from citizens, businesses and civil society organizations into trade policy -making, as 
in other areas, are undertaken within the framework of the 2012 Decree on the Proce dure and 
Method for Conducting Public Hearings in Drafting Laws. This Decree applies only to laws and not 
their implementing regulations. It sets out guidelines for public -private consultations and a 
minimum duration for those meetings. An e -government por tal, 
https://www.euprava.me/en/Business , announces  the public consultations, plan of activities, and 
final report. The Private sector is mostly represented through business associations (chambers of 
commer ce, the Montenegro Business Alliance and the Montenegrin Employers' Federation).28 With 
respect to proposals for laws and other regulations that govern the tax system and measures of 
economic policy, the private sector is also entitled to express its views through the Chamber of 
Economy of Montenegro which gives its opinion to the public authorities and the trade unions.29 
2.15.   Another avenue for stakeholders ' input into economic policymaking is the Competitiveness 
Council created in June 2017 (which replaces the Council for the Improvement of Business 
Environment, Regulatory and Structural Reforms). The Council is chaired by the Prime Minister and 
its members include ministers responsible for the business environment as well as representatives 
from business associ ations, employer associations, the American Chamber of Commerce, the 
Foreign Investors Council and the academic community. The Council, inter alia , coordinates the 
                                                
24 OECD (2016), SME Policy Index. Western Balkans and Turkey  2016. Assessing the implementation of 
the small business act for Europe. Viewed at: https://europa.ba/wp -content/uploads/2016/06/SME -Policy -
Index-Western -Balkans -and-Turkey -2016.pdf . 
25 In 2017, the Ministry of Finance provided training to civil servants on how to conduct analysis based 
on the application of the standard cost model, with the aim of improving the analytical quality of RIAs.  
26 As noted by the authorities, in order to make this change, firstly the Law on Public Administration 
must be amended (this is a parliamentary procedure) and then a bylaw regulating public consultation must be 
adopted.  
27 WT/ACC/CGR/38, WT/MIN(11)/7, 5 December 2011; Presentation by Goran Šćepanović, Director 
General of the Ministry of Economy – Trade Policy of Montenegro . Overview and challenges. Chisinau, 
24 November 2015. Viewed at: http://cefta.int/wp -content/uploads/2016/05/Mr. -Goran -Scepanovic -Director -
General -at-the-Ministry -of-Economy -of-Montenegro.pdf . 
28 OECD (2016), SME Policy Index. Western Balkans and Turkey 201 6. Assessing the implementation of 
the small business act for Europe. Viewed at: https://europa.ba/wp -content/uploads/2016/06/SME -Policy -
Index -Western -Balkans -and-Turkey -2016.pdf . 
29 Article 8 of Law of the Chamber of Economy of Montenegro.  WT/TPR/S/369 • Montenegro  
 
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  implement ation of  priority reform measures defined in strategic development documents , with the 
aim of removing obstacles to the competitiveness and faster economic growth of the country.  
2.16.   As outlined in the 2017 -2019 Economic Reform Programme, Montenegro's trade and 
trade -related policy objectives are focused on strengthening the competitiveness of service 
exports, diversifying goods exports and increasing the value -added in export -oriented production. 
To attain these objectives, the country requires significant investments in processing capacities to 
increase the level of processing production in tended for export. The policy tools used to attract 
investments include tax exemptions, cash grants, and subsidies (Section 3.3.1). During the review 
period, Montenegro maintained  its objective of enhancing trade and economic integration and free 
trade agr eements, since they facilitate the placement of Montenegrin products  – meeting 
demanding international standards  – into wider international markets (Section  2.3).30  
2.17.   As highlighted in the Montenegro Regional Development Strategy 2014 -2020, Montenegro's 
economic potential is mostly located in rural and least -developed areas. To unfold this potential 
and achieve a more balanced regional development, the Ministry of Economy is focusing on, 
inter alia, infrastructure development; increasing economic activity and  development of 
entrepreneurship in SMEs; attracting foreign investors and identifying areas of investment; and 
improving the standard and quality of education and training.31 In line with the above -mentioned 
strategies, the Government of Montenegro also ai ms to create a green economy and incentive 
mechanisms for an inclusive economy. To accomplish these goals its National Strategy for 
Sustainable Development (NSSD) to 2030 targets the following areas: i)  introducing a green 
economy; ii) preservation and val orization of natural capital; iii) inclusive growth; iv) 
knowledge -based development; v) management for sustainable development; and vi) balanced 
regional development.32 Sector -specific trade -related objectives are thoroughly elaborated, 
inter alia, in the Montenegro Development Directions 2015 -2018, Agriculture and Rural 
Development Strategy 2014 -2020 (Section 4.1), Industrial Policy of Montenegro until 2020 
(Section 4.2), and Energy Development Strategy of Montenegro by 2030 (Section 4.3).33 
2.18.   Since Montenegr o's accession to the WTO in 2012, trade and investment -related legislation 
has been amended or introduced in virtually all areas (Table 2.1). Additionally, various 
implementing regulations have also been introduced (Sections 3 and 4).  
Table 2.1 Principal trade -related laws, 2017  
Area  Law, official gazette (OG) number (amendments)  
Investment  - Foreign Investment Law 18/11 (45/14)  
E-commerce  - Law on Electronic Commerce 80/04 (41/10, 40/11 and 56/13)  
State aid  - Law on State Aid Control 74/09 (57/11)  
Import/export procedures  - Law on Foreign Trade, 28/04 (37/07; 73/10; 01/14; 14/14; and 57/14)  
- Decree on Implementation of the Law on Foreign Trade, 52/04 (44/07)  
Customs  - Customs Law, 07/02 (38/02; 72/02; 21/03; 31/03; 29/05; 66/06; 08/08 
21/08; 01/11; 39/11;  8/12 and 62/13)  
- Decree on Implementation of the Customs Law 15/03 (81/06, 38/08, 28/12, 
11/16, 40/17)  
- Law on Customs Tariff, 28/12  
- Decree on Customs Tariff for 2017, 09/17 (43/17)  
- Law on Custom s Service, 3/16  
Taxation  - Law on Value Added Tax, 65/01 (29/13; 9/15; 1/17 and 50/17)  
- Law on Excise Taxes, 65/01 (28/12; 38/13; 45/14; 1/17 and 50/17)  
TBT - Law on Standardi zation, 13/08  
- Law on Technical Requirements for Products and Conformity Assessment, 
53/11  
- Law on Accreditation, 54/10 (43/15)  
                                                
30 Government of Montenegro (2017), Economic Reform Programme for Montenegro 2017 -2019. 
Podgorica, January.  
31 Ministry of Agriculture and Rural Development ( 2015), Strategy for the Development of Agriculture 
and Rural Areas 2015 -2020, June 2015. Viewed at: https://www.eu.me/en/11/11 -documents . 
32 UNDAF (2017 ), Integrated UN Programme for Montenegro 2017 -2021. Viewed at: 
https://www.unece.org/fileadmin/DAM/operact/Technical_Cooperatio n/Delivering_as_One/UNDAF_country_file
s/UNDAF_files_2015 -2020/Montenegro -UNDAF -2017-2021-Final.pdf . 
33 Ministry of Finance online information. Viewed at: 
http://www.mf.gov.me/en/news/153253/Montenegro -Development -Directions -2015-2018.html ; Ministry of 
Economy online information. Viewed at: http://www.mek.gov.me/EN/WTO/LIBRARY/strategic_ documents/ . WT/TPR/S/369 • Montenegro  
 
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  Area  Law, official gazette (OG) number (amendments)  
SPS - Law on Food Safety, 57/15  
- Veterinary Law, 30/12 (48/15)  
- Law on Plant Health Protection, 28/06 (28/11, 48/15)  
Competition  - Law on Protection of Competition 44/12  
Public procurement  - Law on Public Procurement, 46/06 (42/11; 57/14; 28/15 and 42/17)  
Intellectual property rights - Patent Law, 42/15 (2/17)  
- Law on Copyright and Related Rights, 37/11 (53/16)  
- Law on Trademarks, 72/10 (44/12; 18/14 and 40/16)  
- Law on Legal Protection of Industrial Design, 80/10 (27/13, 42/16)  
- Law on Protection of Topographies of Semiconductors, 75/10 (40/16)  
Agriculture  - Law on Agriculture and Rural Development 56/09 (34/14; 1/15; 30/17)  
- Law on Wine 41/16  
- Law on Tobacco 48/08 (42/15)  
- Law on Olives and Olive Oil 45/14 (39/16)  
- Law on Livestock 72/10 (48/15)   
Forestry  - Forest Law 74/10 (47/15)  
Fisheries  - Law on Marine Fisheries and Mariculture 56/09  
Mining  - Law on Mining 65/08 (74/10)  
Energy  - Law on Energy 5/16 (51/17)  
Banking  - Central Bank of Montenegro Law, 40/10 (46/10, 06/13)  
- Banking Law, 17/08 (44/10, 40/11)  
- Law on Bank Bankruptcy and Liquidation, 47/01 (62/08 and 44/10)  
Insurance  - Insurance Law, 78/06 (19/07; 53/09; 73/10; 40/11; 45/12; 06/13; and 
055/16)  
Securities  - Securities Law, 59/00 (10/01; 43/05; 28/06; 53/09; 73/10; 40/11; and 06/13)  
Telecommunications  - Law on Electronic Communications 40/13 (02/17)  
Air Transport  - Law of Air Transport, 30/12  
Maritime Transport  - Law on Maritime and Inland Navigation, 19/78  
- Law of the Sea, 17/07  
- Law on Ports, 51/08 (27/13)  
Rail Transport  - Law on R ailways 27/13  
Road Transport  - Law on Roads 42/04 (54/09 and 36/11)  
Distribution  - Law in Internal Trade, 49/08  
Tourism  - Law on Tourism 61/10 (40/11, 53/11, 31/14)  
Source:  Information provided by the authorities.  
2.19.   Montenegro attaches importance to making laws and other regulations transparent and 
readily accessible, including by foreigners. Most Montenegrin trade and investment -related laws 
and regulations are available in English and are accessible on the Internet from the websites 
maintained by relevant ministries and agencies. The MIPA website ( http://www.mipa.co.me ) 
provides diverse trad e and investment -related information including legislation, tenders and 
actions, information on privatization, requirements and documentation to start  a business, sector 
and business opportunities, and taxation and investment incentives.34  
2.3  Trade Agreements  and Arrangements  
2.3.1   WTO  
2.20.   Montenegro acceded to the WTO in April 2012. It is  a signatory to the WTO's plurilateral 
Civil Aircraft Agreement and Information Technology Agreement and is party to the WTO's 
Government Procurement Agreement (GPA) (it acceded to the  revised GPA in 2015) 
(Section  3.3.5). In 2013, it accepted the Protocol Amending the TRIPS Agreement (Section 3.3.6) 
and, in 2016, it accepted the Protocol concerning the Trade Facilitation Agreement 
(Section  3.1.1.1).35 Montenegro has never been involved in a WTO dispute settlement case either 
as complainant, respondent or third party.   
2.21.   Since its accession , Montenegro has submitted notifications to the WTO in most areas 
(Table  2.2). However, as at December 2017, notifications were outstanding in the areas of 
agriculture (Art. 18:2: domestic support), government procurement (Art. XVI:4 -5, Decision AGP 
2012 Co mmittee of 30 March 2012 – procurement thresholds), import licensing (Art. 7.3 and 
                                                
34 MIPA online information. Viewed at: http://www.mipa.co.me/en/about -mipa/ . 
35 WTO online information. Viewed at:  https://www.wto.org/english/tratop_e/trips_e/amendment_e.htm  
and https://www.wto.org/english/news_e/news16_e/fac_10may16_e.htm .  WT/TPR/S/369 • Montenegro  
 
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  G/LIC/3 – annual), quantitative restrictions, and subsidies and countervailing measures. It has not 
submitted any trade in services notifications under Art III:3 and Art. VI I:4.36  
Table 2.2 Montenegro's notifications to the WTO, January 2012 to December 2017  
Agreement  Requirement  Symbol and date of latest 
notification  
Agreement of the implementation of Article VI of the GATT 1994 (Anti -dumping)  
Article 16.4  Anti-dumping actions  G/ADP/N/237, 20/12/2012  
G/ADP/N/237/Add.1/Rev.1, 22/10/2013  
G/ADP/N/244, 13/06/2013  
G/ADP/N/244/Add.1, 17/10/2013  
G/ADP/N/265, 12/12/2014  
G/ADP/N/265/Add.1, 24/04/2015  
G/ADP/N/286, 15/06/2016  
G/ADP/N/286/Add.1, 20/10/2016  
G/ADP/N/294, 16/12/2016  
G/ADP/N/294/Add.1, 21/04/2017  
G/ADP/N/294/Add.1/Rev.1, 22/10/2013  
Articles 18.5, 32.6 and 
12.6 Laws/regulations (and changes thereto, 
including changes in the administration of 
such laws)  G/ADP/N/1/MNE /1, 
G/SCM/N/1/MNE/1 , 
G/SG/N/1/MNE/1 , 26/09/2013  
Articles 16.5 and 
25.12  Competent authorities and procedures  G/ADP/N/14/Add.36 , 
G/SCM/N/18/Add.36 , 14/10/2013  
Agreement on Technical Barriers to Trade  
Annex 3  Code of Good Practice for the Preparation, 
Adoption and Application of Standards  G/TBT/CS/N/180, 13/03/2013  
Article 15.2  Enquiry point and notification point, 
publication of standards and information, 
relevant laws and regulations  G/TBT/2/Add.110, 18/03/2013  
Agreement on Subsidies and Countervailing Measures  
Article 25  Subsidy programmes  G/SCM/N/284/MNE, 22/05/2015  
Article 25.11  No countervailing duty actions  G/SCM/N/281, 12/12/2014  
G/SCM/N/281/Add 1, 24/04/2015  
G/SCM/N/313, 16/12/2016  
G/SCM/N/313/Add.1, 21/04/2017  
Agreement on Rules  of Origin  
Article 5  Information and procedures for 
modification and introduction of new rules 
of origin G/RO/N/126, 20/02/2015  
Annex II  Common declaration with regard to 
preferential rules of origin G/RO/N/98, 13/09/2013  
Agreement on Import Licensing  
Article 7.3  Replies to questionnaire on import 
licensing procedures  G/LIC/N/3/MNE/1, 14/04/2015  
Article s 1.4(A) and 
8.2(B)  Publication of import licensing procedures  G/LIC/N/1/MNE/1, 14/04/2015  
Agreement on Agriculture  
Article s 10 and 18.2  Export subsidy (ES:1)  G/AG/N/MNE/1, 01/10/2013  
Article s 10 and 18.2  Export subsidy (ES:1)  G/AG/N/MNE/2, 27/11/2014  
Article s 10 and 18.2  Export subsidy (ES:1)  G/AG/N/MNE/3, 23/04/2015  
Article s 10 and 18.2  Export subsidy (ES:1)  G/AG/N/MNE/4, 13/02/2017  
GATT 1994  
Article XVII:4(A)  State -trading activities  G/STR/N/15/MNE, 24/11/2014  
Article XVII:4(A)  State -trading activities  G/STR/N/16/MNE, 27/09/2016  
Article XXIV:7(A)  Notification of regional trade agreement: 
Montenegro and the EFTA States  WT/REG323/N/1, 25/10/2012  
 
Article XXIV:7(A)  Notification of regional trade agreement: 
Montenegro and Ukraine  WT/REG338/N/1, 25/04/2013  
 
Article XVI:1  Subsidies  G/SCM/N/284/MNE, 22/05/2015  
Agreement on implementation of Article VII of GATT 1994 (Customs valuation)  
Articles 1, 4, 5, 6, 7, 
9, 10, 11, 12, 13 and 
16 Replies to questions on customs valuation  G/VAL/N/2/MNE/1, 22/12/2014  
Article 22  Laws/regulations  G/VAL/N/1/MNE/1, 15/12/2014  
                                                
36 WTO Central Registry of Notifications.  WT/TPR/S/369 • Montenegro  
 
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  Agreement  Requirement  Symbol and date of latest 
notification  
Article 4  Notification of treatment of interest 
charges in customs value of imported 
goods G/VAL/N/3/MNE/1, 22/12/2014  
Agreement on Trade-Related Investment Measures  
Article 6.2  Notification of publications  G/TRIMS/N/2/Rev.24, 15/09/2014  
G/TRIMS/N/2/Rev.24/Add.4, 
05/05/2015  
Agreement on Trade Facilitation  
WT/L/911  Category A commitments  WT/PCTF/N/MNE/1, 07/10/2014  
WT/L/931  Notification of category commitments 
under TFA  G/TFA/N/MNE/1, 31/05/2017  
Trade -Related Aspects of Intellectual Property Rights  
Article 69  Specification of contact points; changes to 
the information on specified contact points  IP/N/3/MNE/1, 13/02/2013  
Article 63.2  Laws/regulations made effective by the 
notifying Member; amendments to a 
law/regulation  IP/N/1/MNE/U/1, 11/04/2013  
IP/N/1/MNE/T/1, 08/04/2013  
IP/N/1/MNE/P/1, 08/04/2013  
IP/N/1/MNE/O/10, 09/04/2013  
IP/N/1/MNE/O/9, 09/04/2013  
IP/N/1/MNE/O/8, 09/04/2013  
IP/N/1/MNE/O/7, 09/04/2013  
IP/N/1/MNE/O/6, 08/04/2013  
IP/N/1/MNE/O/5, 09/04/2013  
IP/N/1/MNE/O/4, 09/04/2013  
IP/N/1/MNE/O/3, 08/04/2013  
IP/N/1/MNE/O/2, 08/04/2013  
IP/N/1/MNE/O/1, 08/04/2013  
IP/N/1/MNE/L/1, 08/04/2013  
IP/N/1/MNE/G/2, 09/04/2013  
IP/N/1/MNE/G/1, 09/04/2013  
IP/N/1/MNE/E/1, 08/04/2013  
IP/N/1/MNE/D/2, 10/07/2013  
IP/N/1/MNE/D/1, 09/04/2013  
IP/N/1/MNE/C/1, 09/04/2013  
IP/N/1/MNE/7 , 
IP/N/1/MNE/L/2, 13/12/2016  
IP/N/1/MNE/6 , 
IP/N/1/MNE/D/3 , 13/12/2016  
IP/N/1/MNE/5 , 
IP/N/1/MNE/T/2, 13/12/2016  
IP/N/1/MNE/4 , 
IP/N/1/MNE/C/2, 13/12/2016  
IP/N/1/MNE/3, 23/06/2014  
IP/N/1/MNE/2, 10/07/2013  
IP/N/1/MNE/1, 25/03/2013  
Article Unspecified  Replies to questions  IP/N/6/MNE/1, 11/03/2013  
General Agreement on Trade in Services  
Article V:7(a)  Notification of Regional Trade Agreement: 
Ukraine and Montenegro  S/C/N/694, 25/04/2013  
 
Article III:4 and IV:2  Contact enquiry points  S/ENQ/78/Rev.14, 25/10/2013  
Article VII:4  Recognition of foreign educational 
credentials  S/C/N/711, 20/09/2013  
Article VII:4  Recognition of foreign certificates of 
acquired education  S/C/N/710, 20/09/2013  
Government procurement  
Paragraph 3.2 (C) of 
Committee's decision 
on a work programme 
on SMEs  Replies to questionnaire to GPA parties on 
SME measures  GPA/WPS/SME/14, 16/12/2015  
GPA/WPS/SME/46, 8/11/2016  
GPA/WPS/SME/47, 8/11/2016  
GPA/WPS/SME/49, 18/11/2016  
Source:  WTO Secretariat.  WT/TPR/S/369 • Montenegro  
 
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  2.3.2   Regional and preferential agreements  
2.3.2.1   Regional trade agreements (RTAs)  
2.22.   As at end -November 2017, Montenegro had five RTAs in force with a total of 41 economies 
(Section 3.1.2 and Section 3.1.3.6). All RTAs have been notified to the WTO Committee on 
Regional Trade Agreements, with the exception of the RTA with the Russia n Federation which 
dates back to 2000. The scope and depth of each of the agreements differs.  
2.3.2.1.1   Central European Free Trade Agreement (CEFTA)  
2.23.   Montenegro is one of the founding members of CEFTA. The Agreement was signed in 
December 2006 and entered into forc e in May 2007. As at end -August 2017, parties of the 
Agreement were: Albania, Bosnia and Herzegovina, the Republic of Moldova, Montenegro, Serbia, 
The former Yugoslav Republic of Macedonia, and Kosovo.37 In 2016, according to UNCOMTRADE 
data, Montenegro's m erchandise trade with CEFTA members constituted 29.2% of total imports 
and 38.4% of total exports. These figures do not take into account trade between Montenegro and 
Kosovo, which the authorities estimate to account for 0.2% of imports and 5.9% of exports .38 The 
Agreement covers goods only and, inter alia , contains provisions relating to competition as well as 
broadening cooperation in services, investment, government procurement, and protection of 
intellectual property rights.39 The Agreement has not yet been subject to consideration in the 
WTO's Committee on Regional Trade Agreements (CRTA).  
2.24.   Montenegro has eliminated customs duties on all goods from CEFTA parties. All customs 
duties on industrial products40 were eliminated by 31  December 200841, and on agricultural 
products42, by January 2012.43  
2.25.   CEFTA parties concluded negotiations on the Additional Protocol 5  on trade facilitation in 
2016; it was adopted by CEFTA parties on 26 May 2017 and approved by the Montenegrin 
Government on  5 October 2017: ratification is expected soon. The general objectives of the 
protocol are to: simplify inspections related to all clearance procedures and reduce of formalities; 
enable the exchange of data between customs authorities; and ensure the mutua l recognition of 
the national Authori zed Economic Operators' Programmes in each CEFTA party. Provisions in the 
Protocol include the establishment of risk management systems by the parties; publication of 
customs -related notifications, guidance etc. in the national and English languages; and 
standardized and simplified transit procedures.44  
2.26.   Other key developments at the CEFTA level since 2012 have been: amendments to the 
CEFTA protocol on originating products in order to create a link between CEFTA and the R egional 
Convention on Pan -euro-Mediterranean preferential rules of origin ( its application began  in 
April 2014)45; a decision by CEFTA parties in 2015 allowing the introduction of full cumulation and 
                                                
37 Bulgari a and Romania withdrew from CEFTA upon their accession to the EU in 2007, and Croatia 
withdrew following its accession to the EU in 2013. CEFTA online information. Viewed at: http://cefta.int/cefta -
parties -2/.  
38 UN Comtrade online database.  
39 CEFTA 2006. Viewed at: http://cefta.int/wp -content/uploads/2016/05/ANN1CEFTA -2006-Final-
Text.pdf .  
40 Industrial products are th ose contained in the combined nomenclature (CN) chapters 25 -97 except 
products listed in Annex 1 which are considered to be agricultural products (Products listed in Annex 1 were 
viewed at http://cefta.int/legal -documents/#1463498451954 -049a1331 -0c1c). 
41 Upon entry into force of the Agreement , Montenegro and other CEFTA members eliminated all 
customs duties on imports of industrial products, with the exception of products in Annex 2 of the Agreement 
for which a transition period until 31 December 2008 for duty elimination was granted.  
42 Agricultural products are listed in chapters 1 to 24 of CN and in Annex 1 of the Agreement.  
43 Upon entry into force of the Agreement, Montenegro fully eliminated import duties on goods from 
Bosnia and Herzegovina, The former Yugoslav Republic of Macedonia, Serbia and Kosovo. With the entry into 
force of an Additional Protocol in January 2012, impo rt duties on agricultural products were eliminated for all 
CEFTA parties.  
44 Article 12 of the Additional Protocol 5.  
45 The Joint Committee of the CEFTA Agreement adopted Decision No. 3/2013 in November 2013, which 
amends Annex 4 of the CEFTA Protocol Conc erning the Definition of the Concept of "Originating Products" and 
methods of administrative cooperation.  WT/TPR/S/369 • Montenegro  
 
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  duty drawback in trade between CEFTA parties (its applica tion should start in 2019)46; the 
finalization of the technical part of negotiations on CEFTA Additional Protocol 6 (Protocol on Trade 
in Services) in December 2016. CEFTA parties are currently discussing the possibility of launching 
negotiations on an addi tional protocol that would define dispute settlement procedures.  
2.3.2.1.2   EU–Montenegro Association Agreement and EU accession negotiations  
2.27.   The EU –Montenegro Stabilisation and Association Agreement was signed in October 2007 
and entered into force in January 2008 ( for goods) and May 2010 (for services).47 It was 
considered by the CRTA in June 2011.48 In 2016, the EU accounted for 48.1% of Montenegro's 
total merchandise imports and 36.6% of its total merchandise exports. By the end of the transition 
period for full imp lementation of tariff elimination commitments in 2013, 94.9% of Montenegro's 
tariff lines were duty free for imports from the European Union .49 Upon entry into force of the 
Agreement, 97.3% of the EU's tariff lines were duty -free for imports from Montenegro .50 Among 
the products excluded from tariff concessions by Montenegro are dairy spreads and some lines of 
mineral water. The European Union  excluded sugar from its liberalization commitments.51 Both 
sides have maintained tariff -rate quotas on some agricultur al products.52  
2.28.   The Agreement also incorporates services commitments. As from the entry into force of the 
Agreement, subsidiaries and branches of EU companies have the right to use and rent real 
property in Montenegro, and acquire and enjoy real estate wher e such rights are necessary for the 
conduct of economic activities for which they are established. Moreover, Montenegro grants 
national treatment to EU nationals acquiring real estate in the country.53 The European Union 's 
services commitments go beyond the  scope of its GATS commitments in various respects.54 The 
Agreement, inter alia , contains provisions on government procurement, intellectual property rights 
and competition. In addition, the Agreement foresees a gradual approximation of Montenegro's 
legisla tion, in particular standardization, metrology, accreditation and conformity assessment 
(Art. 75), and consumer protection and goods safety standards (Art. 78), with the EU acquis  within 
a five -year period.55 
2.29.   In 2008, Montenegro applied for EU membership. T he accession process was launched in 
2011 and accession negotiations were opened in 2012.56 The 2008 -2012 National Programme for 
Integration (NPI), aimed at alignment  with the EU acquis  and creating a basis for reform -oriented 
activities and drafting of gov ernment work programmes, was succeeded by the 2014 -2018 
Programme of Accession of Montenegro to the EU (PPCG), adopted in 2013. The Programme 
defines the framework and pace of reforms that are needed for Montenegro's further alignment 
                                                
46 Joint Committee of the CEFTA Agreement Decision No. 3/2015. This derogation from Appendix I of 
the Regional Convention on pan -euro-Mediterranean pre ferential rules of origin (PEM Convention) was adopted 
by the Joint Committee of the Convention in June 2017.  
47 WTO online information. Viewed at: 
http://rtais.wto.org/UI/Publ icShowMemberRTAIDCard.aspx?rtaid=154 ; WTO document WT/REG236/1, 
15 April 2011.  
48 WTO online information. Viewed at: 
http://rtais.wto.org/UI/PublicShowMemberRTAIDCard.aspx?rtai d=154 .  
49 WTO document WT/REG236/1, 15 April 2011  
50 The Agreement covers agriculture, fishery and industrial products (Chapters 1 -97 of CN). For a more 
detailed description of products, see WTO document WT/REG236/1, 15 April 2011 and WTO document 
WT/REG236 /R/1, 24 October 2016.  
51 WTO document WT/REG236/R/I, 24 October 2016.  
52 The European Union  maintains tariff -rate quotas on baby -beef, sugar and wine; while Montenegro 
maintains tariff -rate quotas on agricultural products (poultry, cheese, meat preparations  and wine), some 
processed agricultural products (mineral waters and soft drinks) and on some fishery products. WTO document 
WT/REG236/R/I, 24 October 2016 (Section 2.1.2).  
53 WTO document WT/REG236/1, 15 April 2011.  
54 For a more detailed description of th e services commitments taken under the RTA between 
Montenegro and the European Union , as well as  a comparison between the GATS and RTAs commitments, see 
WTO document WT/REG236/1, 15 April 2011 (Chapter IV).  
55 WTO document WT/REG236/1, 15 April 2011.  
56 The negotiation process includes the conditions and timing of the candidate's adoption, 
implementation and enforcement of all current EU rules (the " acquis "). These rules are divided into 35  different 
policy fields (chapters), such as transport, energy, enviro nment etc., each of which is negotiated separately. 
European Commission  online information. Viewed at: https://ec.europa.eu/neighbourhood -
enlargement/policy/cond itions -membership_en . WT/TPR/S/369 • Montenegro  
 
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  with the European Uni on's legal system.57 A PPCG for the period 2017 -2018 is currently being 
implemented and preparation of a PPCG for the period 2018 -2020 is ongoing.  
2.30.   As at end -2017, the accession negotiations had been opened on 28 policy Chapters. 
Three  of the 28 Chapters we re provisionally closed, namely, Chapter 25 – Science and research in 
2012; Chapter 26 – Education and culture in 2013; and Chapter 30 – External relations in 2016.58 
Each year the European Commission presents a detailed assessment of Montenegro's progress,  its 
achievements over the year and guidelines on reform priorities in each of the policy fields. The 
European Commission  has issued progress reports on an annual basis with the most recent  
published in November 2016.59 A new reporting methodology on the progress of the countries of 
the Western Balkans and Turkey was introduced in 2015 and is now applied to reporting on all 
chapters and all areas.  
2.31.   To monitor and support the accession process, the European Union  issued th e 2007 -2013 
EU Instrument for Pre -Accession Assistance (IPA) which was succeeded by IPA II for the 
2014-2020 period. The key objectives of IPA II include, inter alia,  stable economic growth and 
convergence towards EU development through competitiveness and  innovation, education, 
employment and social policies; developing the economic potential and alignment with the EU 
acquis  in the fields of agriculture and rural development, environment, transport, and 
reconciliation and regional integration through regio nal cooperation and territorial cooperation.60 
For the implementation of IPA II , an indicative allocation  of €270.5 million is foreseen.61 
2.3.2.1.3   European Free Trade Association (EFTA) –Montenegro  
2.32.   Montenegro's RTA on trade in goods with EFTA was signed in November 2 011 and entered 
into force on 1 September 2012 (Montenegro, Liechtenstein and Switzerland), 1  October 2012 
(Montenegro and Iceland), and 1 November 2012 (Montenegro and Norway). It was considered in 
the WTO's CRTA in September 2013.62 In 2016, Montenegro's merchandise trade with EFTA 
members constituted 1.5% of its total imports and 1.4% of total exports.63 The Agreement covers 
liberalization of trade in goods but not services. Montenegro's tariff liberalization is taking place 
over a six -year transition peri od, from 2012 to 2018. By the end of this period, 84.9%, 85.1%, 
and 86.3% of Montenegro's tariff lines will be duty free for imports from Iceland, Norway, and 
Switzerland, respectively.64 EFTA Members undertook tariff liberalization in one go upon entry int o 
force of the Agreement; 93.7% of Iceland's tariff lines, 87.9% of Norway's and 83.7% of 
Switzerland's are duty free for import from Montenegro.65 The Agreement also, inter alia , contains 
provisions on government procurement, intellectual property rights, investment, services, 
competition and labour and environmental issues.66 
                                                
57 Government of Montenegro online information. Viewed at: https://www.eu.me/en/montenegro -and-
eu/montenegro -eu-relations . 
58 European Commission online info rmation. Viewed at: https://ec.europa.eu/neighbourhood -
enlargement/countries/detailed -country -information/montenegro_en , https://ec.europa.eu/neighbourhood -
enlargement/sites/near/files/20170328 -negotiations -status -montenegro.pdf .  
59 European Commission online information.  Viewed at: https://ec.europa.eu/neighbourhood -
enlargement/countries/package_en .  
60 European Union online information. Viewed at: 
http://www.delmne.ec.europa.eu/code/navigate.php?Id=63 . 
61 European Union online information. Viewed at: 
http://www.d elmne.ec.europa.eu/code/navigate.php?Id=59 . 
62 Documents for this meeting may be viewed at: 
http://rtais.wto.org/UI/PublicShowMemberRTAIDCard.aspx?rtaid=765 . 
63 UN Comtrade onli ne database.  
64 For more detailed information on excluded products, see Annex I. Article 7 of the FTA between EFTA 
States and Montenegro. Viewed at: http://www.efta.int/media/documents/legal -texts/free -trade -
relations/montenegro/montenegro -main-agreement.pdf . 
65 WTO document WT/REG323/1, 12 June 2013.  
66 EFTA online information. Viewed at: http://www.efta.int/free -trade/free -trade -
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  2.3.2.1.4   Turkey –Montenegro  
2.33.   The Turkey –Montenegro Free Trade Agreement was signed in November 2008 and entered 
into force in March 2010. The Agreement was considered by the WTO's CRTA in June  2011.67 It 
covers liberalization of goods but not services. In 2016, merchandise trade with Turkey constituted 
3.3% of Montenegro's total imports and 1.6% of total exports.68 The Agreement provided for tariff 
liberalization over a five -year transition period f or Montenegro, ending in 2015. At the end of this 
period, a total of 78.1% of Montenegro's tariffs were duty free for Turkish imports. Montenegro 
also has a tariff rate quota ( TRQ) in place for imports of dried apricots from Turkey. Turkey 
undertook its ta riff liberalization upon entry into force of the Agreement; 81.2% of its tariff lines 
are duty free for imports from Montenegro. Turkey has in place TRQs for pasta, jams and wine. 
The agreement, inter alia,  contains provisions on government procurement and  intellectual 
property rights. 69 
2.3.2.1.5   Ukraine –Montenegro  
2.34.   Montenegro's Free Trade Agreement with Ukraine was signed in November 2011 and 
entered into force in January 2013. The Agreement was considered by the WTO's CRTA in 
June 2014.70 The Agreement provides for liberalization of goods and services.71 In 2016, 
Montenegro's merchandise trade with Ukraine constituted 0.3% of its total imports and 0.2% of its 
total exports.72 Tariff liberalization took place for both parties upon entry into force of the 
Agreement. As a  result, 99.2% of Montenegro's tariffs are duty free for imports from Ukraine. 
99.6% of Ukraine's tariff lines are duty free for imports from Montenegro.73 With respect to trade 
in services, Montenegro's services commitments under the Agreement substantiall y reflect its 
commitments under the GATS with a few exceptions.74 The Agreement also, inter alia , contains 
provisions on government procurement and intellectual property rights.   
2.3.2.1.6   Russian Federation –Montenegro  
2.35.   The Free Trade Agreement was signed between the Federal Republic of Yugoslavia and the 
Russian Federation in August 2000, and ratified in May 2001. In 2016, Montenegro's merchandise 
trade with the Russian Federation constituted 0.2% of its total imports and 0.7% of its total 
exports.75 Under the Agreemen t, both parties gradually phased out their tariffs over a five -year 
period. After independence in 2006, Montenegro continued to apply the provisions of the 
Agreement. Under the Agreement , 97.7% of Montenegro's tariff lines are duty free for imports 
from the Russian Federation (Table 3.2). The Agreement covers goods but not services.76 Goods 
exempt from tariff liberalization by Montenegro are fertilizers, air and vacuum pumps, taps, cocks, 
valves, balls or roller bearings, transmission shafts, electric transformers and accumulators, 
tractors, motor cars and other vehicles. Goods exempt from tariff liberalization by the Russian 
Federation are meat and edible offal, starches and inulin, sausage s and similar products, sugar 
and sugar confectionary, chocolate, fruit juices, beer, wine and certain alcohol products, cigars and 
cigarettes, medicaments, soap, various fabrics and yarns, carpets, bed linen, refrigerators, 
washing machines, calculating m achines, cash registers, television receivers, tractors, motors cars 
and other vehicles, seats, matt resses and other furniture parts. The Agreement, inter alia , also 
contains provisions on intellectual property rights.77 Negotiations with the Russian Federa tion on 
                                                
67 Documentation for this meeting may be viewed at: 
http://rtais.wto.org/UI/ PublicShowMemberRTAIDCard.aspx?rtaid=708 . 
68 UN Comtrade online database.  
69 WTO document WT/REG282/1/Rev.1, 1 July 2011.  
70 Documentation for this meeting may be viewed at: 
http://rtais.wto.org/UI/PublicShowMemberRTAIDCard.aspx?rtaid=868 . 
71 WTO document WT/REG338/1/Rev.1, 2 July 2014.  
72 UN Comtrade online database.  
73 WTO document WT/REG338/1/Rev.1, 2 July 2014.  
74 For a more detailed description of Montenegro's services commi tments under the Agreement, see 
WTO document WT/REG338/1/Rev.1, 2 July 2014 (Section 4.4.1) . 
75 UN Comtrade online database.  
76 2000 Russian Federation –Federal Republic of Yugoslavia FTA. Viewed at: 
http://www.mid.ru/foreign_policy/international_contracts/2_contract/ -/storage -viewer/bilateral/page -
205/46653 . 
77 2000 Russian Federation –Federal Republic of Yugoslavia FTA. Viewed at: 
http://www.mid.ru/foreign_policy/international_contracts/2_contract/ -/storage -viewer/bilateral/page -
205/46653 . WT/TPR/S/369 • Montenegro  
 
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  further liberalization have stalled; they also included Eurasian Economic Union signatories, 
Kazakhstan and Belarus.   
2.3.2.2   PTAs  
2.36.   Montenegro remains a beneficiary under the Generali zed System of Preferences (GSP) 
schemes of Belarus, Japan, Kazakhstan, Norway, the Russian Federation, Ukraine and the 
United  States.78 Data is not collected specifically on Montenegro's merchandise exports under 
PTAs.  
2.37.   Under the 2000 Preferential Treatment Agreement with the European Union , Montenegro, 
along with five  other W estern Balkan countries, continues to benefit from more favourable 
concessions than those provided for under bilateral agreements.79 Japan's GSP (effective until 
March 2021) continues to provide duty -free treatment to certain agricultural and fishery produc ts 
(HS chapters  1-24) and industrial products (HS chapters 25 -97).80 The United States  provides 
duty-free treatment under its GSP programme for manufactured and semi -manufactured products 
and also certain agricultural, fishery, and primary industrial produ cts that are not otherwise 
duty-free.81 Kazakhstan and the Russian Federation provide tariff preferences for agricultural and 
industrial products under a unified customs tariff.82 From the date of its accession to the 
European  Union , Montenegro will need to a pply the EU GSP scheme.83  
2.4  Investment Regime  
2.4.1   General investment regime  
2.38.   Montenegro, being a small and open economy encourages investment, which is prevalent 
across the economy, particularly in tourism, agriculture, energy and banking.84 The national 
investmen t agency, the Montenegrin Investment Promotion Agency (MIPA), set up by the 
Government of Montenegro in 2005, continues to promote foreign investment and facilitate 
economic development in Montenegro by partnering with foreign and domestic investors; the 
public and private sectors; international organizations and private individuals.85  
2.39.   The 2011 Foreign Investment Law (OG No s. 18/11, 45/14), amended in 2014, regulates the 
modes of foreign investment, protection of foreign investors and their rights, and promotion and 
other issues of importance for foreign investments in Montenegro.86 The 2014 amendments , 
inter alia, improved the investment environment by removing restrictions for investing in 
                                                
78 WTO online informat ion. Viewed at: http://ptadb.wto.org/Country.aspx?code=893  and European 
Commission  (2013), Screening report Montenegro. Chapter 30 – External relations. Viewed at: 
https://ec.europa.eu/neighbourhood -
enlargement/sites/near/files/pdf/montenegro/screening_reports/screening_report_montenegro_ch30.pdf , p. 3 . 
79 According to the EU regulation, wine originating from Montenegro is entitled to a global tariff quota of 
30,000  hectolitres per year subject to exhaustion of its individual quota provided for in the Protocol on wine. 
Guide : Trade Preferences for countr ies of the Western Balkans. Viewed at: 
http://ptadb.wto.org/docs/EU_WBalkans/2017/EN%20 -%20EU%20Western%20Balkans.pdf  and Regulation 
(EU) No. 1336/2011 of the Eu ropean Parliament and the Council of 13 December 2011. Viewed at: http://eur -
lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2011:347:0001:0006:EN:PDF .  
80 For more detailed information on the product coverage and the depth of tariff cuts see: 
http://www.mofa.go.jp/policy/economy/gsp/explain.html#section1  (Sections 2 and 3).  
81 For more detailed information on the product coverage, see: https://hts.usitc.gov/current .  
82 For more detailed information on the product coverage, see : 
http://www.consultant.ru/document/cons_doc_LAW_94243/  (Section 7) (available in Russian).  
83 EC (2013), Screening report Montenegro. Chapter 30 – External relations. Viewed at: 
https://ec.europa.eu/neighbourhood -
enlargement/sites/near/files/pdf/montenegro/screening_reports/screening_report_mont enegro_ch30.pdf .  
84 MIPA online information. Viewed at: http://www.mipa.co.me/en/sector -opportunities/ . 
85 MIPA online information. Viewed at: http://www.mipa.co.me/en/about -mipa/  and WTO document 
WT/ACC/CGR/38, WT/MIN(11)/7, 5 December 2011.  
86 The term "foreign investor" applies to a company that has been set up in Montenegro by a foreigner, 
or foreign legal entity, whose share of investment capital is higher than 25% of total capital invested. MIPA 
online information. Viewed at: http://www.mipa.co.me/en/ -investment -incentives/ .  
Article 1 of the Foreign Investment Law. Viewed at : 
http://www.mek.gov.me/EN/WTO/LIBRARY/ep_actual_legislation/Investment_regime  and information provided 
by the authorities.  WT/TPR/S/369 • Montenegro  
 
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  companies that are engaged in production of and trade in weapons and  military equipment. Under 
the Law, foreign investors enjoy the same legal status and the same rights and obligations as local 
investors. The assets of foreign investors may not be expropriated, unless the public interest and 
law prescribe otherwise, in wh ich case an investor must be compensated.87 Any disputes arising 
from foreign investment are resolved by the competent court in Montenegro unless the agreement 
stipulates that disputes should be settled through domestic or foreign arbitration (Section 2.2).88  
2.40.   The 2015 Decree on Direct Investment Incentives (OG No. 80/15) aims to promote the 
country's development by attracting direct investment in the manufacturing and services sectors. 
It also regulates criteria for allocating financial incentives and cash g rants, encouraging direct 
investment, and the schedule of disbursement of these incentives (Table 3.7). As at 
November  2017, there were six companies benefitting from direct investment incentives, operating 
in the areas of: wood production; cattle fodder p roduction; security of persons and property; food 
production; pharmaceuticals; and tourism. The total value of these investment projects, which are 
in the process of being realized, is €7,182,429; they should generate 253 jobs. The value of 
awarded investm ent incentives is €1,482,000. The authorities indicated that they are currently 
evaluating applications for incentives received from the 2017 public announcement and are 
planning future public announcements.89 Investment incentives are not awarded for finan cing 
projects in the following sectors: primary agricultural production; synthetic fibre production; 
transport including the transport of passengers by air, sea, road and rail and by inland waterways 
or commercial transportation of cargo services; games of  chance; trade; primary production of 
coal and steel; production of electricity; oil and gas; tobacco and tobacco products; weapons and 
ammunition; production of genetically modified organisms and hazardous waste.90  
2.41.   Montenegro also provides a range of tax exemptions for investments in various sectors 
(Section 3.3.1.2). These tax exemptions include: VAT exemption for certain goods and services, 
real estate property and turnover tax exemptions, corporate tax exemptions and exemptions from 
customs duties.91 In addition, favourable conditions exist for investors in business zones (Table  3.7 
and Section 4.2).  
2.42.   Montenegro does not impose on foreign investors any limitations on the amount of 
investment capital. Potential investors can invest in any industry and free ly repatriate/transfer all 
financial and other assets, including profits and dividends.92 The only limitations for foreign 
                                                
87 Articles 6 and 11 of the Foreign Inve stment Law. More detailed information on expropriation can be 
found in the Law on Expropriation (OG RM Nos. 55/00, 12/02, and 28/06) which contains basic provisions on 
expropriation of immovable, preparatory activities, expropriation procedure, and compens ation for 
expropriated property. Law on Expropriation (OG RM Nos. 55/00, 12/02, 28/06) Viewed at: 
http://www.nekretnine.co.me/dok/Zakoni/6.%20Law%20on%20o%2 0expropriation%202006.pdf .  
88 Article 30 of the Foreign Investment Law.  
89 The procedure for announcing and awarding incentives is as follows: after a public announcement is 
published, entities submit their applications within the deadline set. A public ope ning of applications is 
organized and an evaluation of the technical correctness of the applications is conducted and compliance with 
spatial and other development plans is undertaken. Thereafter a meeting of the Committee for the Evaluation 
of Investment Projects takes place whereby the scoring system (as set out in the decree) is applied and the 
value of incentive per employee is calculated. A recommendation is sent to the Government for its final 
decision. Thereafter an agreement is signed with the inves tor on the use of incentives. Funds are disbursed in 
three equal instalments: upon signature; after 50% of the project has been implemented; and upon 
completion of the project. Performance bonds are required from the investors. Projects are monitored for 
three years for small and medium -sized companies and for 5 years for large companies.  
90 Article 5 of the Decree on Direct Investment Incentives (OG No. 80/15).  
91 VAT exemptions apply to, inter alia,  construction and equipping of catering facilities, energy  facilities 
for electricity generation and the facilities to produce food products. Real estate property tax exemptions refer 
to buildings and parts of buildings owned by investors classified as "construction in progress" or "finished 
goods inventory", bui ldings owned by people registered in the agricultural producers' registry, and partial real 
estate tax exemptions refer to 4 and 5 star tourist facilities which have been in operation for more than 
12 months; real estate turnover exemptions apply when real  estate is brought into a business organization as 
initial capital/increasing assets and when the real estate is acquired in the process of transformation, merger or 
division of business organizations. Income tax is exempted for an eight -year period for co mmencement of 
business activities in economically undeveloped municipalities. Customs duty exemptions apply to capital goods 
other equipment imported from abroad to perform activities in Montenegro, goods intended for trade 
promotion purposes, and goods (f ixed assets) representing foreign investment.  
92 Any natural or legal person, both domestic or foreign, has the right to participate in privatization 
tenders or auctions. The Decree on Sale of Shares and Company Assets by Public Auction and the Decree of 
Sales of Shares and Company Assets by Public Tender. Information provided by the authorities.  WT/TPR/S/369 • Montenegro  
 
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  investors include property rights on natural wealth, common goods, agricultural land, forest and 
forest land, cultural monuments and i mmovable property within one kilometre of the border line. 
However, foreign investors have rights for concession, long -term rent, build-operate -transfer 
(BOT) arrangements, and public -private partnership (PPP) on the above -mentioned categories.93 
Additional ly, foreigners may not own agricultural land in Montenegro, but may rent it 
(Section  4.1.1).  
2.43.   According to the Government's 2015 -2017 Economic Reform Programme, a key challenge 
for Montenegro is to increase investments into added value activities and those which diversify the 
country's export base.94 As outlined in the 2015 -2018 Montenegro Development Directions, the 
focus must be put on the improvement of the overall investment environmen t in order to attract 
primarily greenfield  investments and implement pr ojects through PPPs and concessions.95  
2.44.   According to the OECD policy outlook, Montenegro has taken positive steps to foster 
investment. However, some challenges still remain. They include: implementation and monitoring 
of the legislation and regulations set forth in the New York Convention and ICSID, especially with 
regard to the enforcement of arbitration awards; monitoring of its dispute settlement 
arrangements; and development of CRM practices linking foreign investors a nd local suppliers.96 
2.45.   Since Montenegro's accession to the WTO, new bilateral investment treaties  (BITs)  have 
entered into force with Azerbaijan, Moldova and the United Arab Emirates; new double taxation 
agreements have entered into force with Ireland, Austr ia, Serbia, Azerbaijan, and the United Arab 
Emirates. Additionally, the EFTA –Montenegro FTA, which entered into force in 2012, contains 
investment provisions. BITs with the Belgium –Luxembourg Economic Union (signed in 2010) and 
Turkey (2012) have not yet  entered into force.  Montenegro is a signatory to various 
intergovernmental agreements with investment -related provisions (Box 2.1).  
Box 2.1 Investment framework, 2017  
FTAs with investment provisions  (date of en try into force ) 
EFTA–Montenegro FTA (1/11/2012); Montenegro –Turkey FTA (1/3/2010); EU –Montenegro Association 
Agreement (1/5/2010); CEFTA (22/11/2007).  
Bilateral investment treaties  (BITs) in force (date of entry into force ) 
Austria (2002); Azerbaijan (2012); Cyprus (2008); Czech Republic (2001); Denmark (2009); Finland (2010); 
France (1975); Germany (1990); Greece (1998); Israel (2006); Lithuania (2005); Malta (2011); Moldova 
(2015); Netherlands (2004); Poland (1997); Qatar (2009); Romania (1997); Serb ia (2010); Slovakia (1998); 
Spain (2004); Switzerland (2007 ); The former Yugoslav Republic of Macedonia (2011);  and the United Arab 
Emirates (2013).  
Double -taxation agreements in force (date of entry into force)  
Agreements inherited by Montenegro at independence: Albania; Belgium; Belarus; Bosnia and Herzegovina; 
Bulgaria; Czech Republic; Denmark; Egypt; Finland; France; the Netherlands; Croatia; Italy; China; Cyprus; 
Korea; Kuwait; Latvia; Hungary; Macedonia; Mal aysia; Moldova; Germany; Norway; Poland; Romania; Russia; 
Slovakia; Slovenia; Sri Lanka; Sweden; Turkey; Ukraine; and United Kingdom . 
Agreements signed by Montenegro as an independent country: Malta (23/09/2009); Ireland (01/12/2011); 
Austria (21/04/2015);  Serbia (21/12/2011); Azerbaijan (04/11/2013); and United Arab Emirates (date not 
available). A DTA with Portugal has been signed but not yet ratified.   
                                                
93 Ministry of Sustainable Development and Tourism, Montenegro Investment Opportunities Guide . 
Viewed at: http://www.montenegroinvestments.info/uploads/docs/Montenegro -investment -guide.pdf . 
94 Government of Montenegro (2017 ), Economic Reform Programme for Montenegro 2017 -2019. 
Podgorica, January.  
95 Ministry of Finance (2015), Montenegro Development Directions 2015 -2018, June.  
96 OECD (2016), Competitiveness in South East Europe:  A Policy Outlook, Competitiveness and Private 
Sector Development, Paris. Viewed at: http://www.oecd -
ilibrary.org/docserver/download/0316011e.pdf?expires=1502893361&id=id&accname=guest&checksum=A862
514217D397EF7FFAD54E715 DC47D . WT/TPR/S/369 • Montenegro  
 
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  Intergovernmental agreements  with investment -related provisions (date of adoption)  
MIGA Convention (1 985); ICSID Convention (1965) and New York Convention (1958)  
Other treaties  with investment provisions  (date of entry into force ) 
The Energy Charter Treaty (16/4/1998)  
Source:  UNCTAD Investment Policy Hub. Viewed at: 
http://investmentpolicyhub.unctad.org/IIA/CountryBits/140#iiaInnerMenu ; Ministry of Finance of 
Montenegro online information. Viewed at: http://www.mif.gov.me/biblioteka/ugovori ; OECD online 
information, " tax treaties ". Viewed at: http://www.oecd.org/tax/treaties/beps -mli-position -
serbia.pdf  and http://www.oecd.org/tax/treaties/beps -mli-position -malta.pdf ; and Eurofast online 
information. Viewed at: http://eurofast.eu/global/montenegro -austria -agreement -on-avoidance -of-
double -taxation/ . 
2.46.   Since 2012, there have been seven investor -state dispute cases taken a gainst the State of 
Montenegro. Three investor -state disputes have been taken to ICSID and four cases have been 
brought under the UNCITRAL arbitration rules. According to the authorities, the final awards on 
behalf of Montenegro were rendered in the four U NCITRAL arbitration proceedings, while the 
three  other cases are ongoing.  
2.4.2   Business environment  
2.47.   During the review period, Montenegro improved its ranking relating to the environment for 
business, trade and investment according to the World Bank's Doing Bu siness reports. In 2018 , it 
was ranked in 42nd place out of 190 economies in comparison to 56th place out of 183 economies 
in 2012. Over this period, the country has improved its performance with respect to dealing with 
construction permits, getting electr icity, registering property, paying taxes, trading across borders 
and resolving insolvency. According to the OECD SME Policy Index, in 2016, Montenegro made 
significant progress in standardization and technical regulation, public procurement and innovation  
policy for SMEs compared to the 2012 results. It considers that Montenegro performs best in the 
region in facilitating trade across borders and comes close to the OECD average for cost, time and 
number of documents needed to import and export (Section 3.3 .2; 3.3.5; 3.3.1.2; and 3.1.1.1).97 
However, the country showed a slightly poorer performance  in the World Economic Forum's 
2017-2018 Global Competitiveness Index (Section 1). According to the World Bank, firm -level data 
from the 2013 Enterprise Surveys (BE EPS) suggests that, although Montenegro's regulatory 
environment significantly improved, more progress is needed on implementation of reforms and 
transparency of procedures.98 
2.48.   As outlined in its 2017 -2019 Economic Reform Programme, the Government realizes t he 
obstacles faced by  the business community and has defined its priorities aimed at removing the 
identified barriers to boost competitiveness (Section 3.3.1.2).99 The authorities indicated that the 
Economic Reform Programme for 2018 -2020 is being prepared and will be submitted to the 
Government for adoption in mid -January 2018.  
2.49.   A key step taken over the review period to improve the business environment has been to 
streamline the process of registering a business. Since May 2011, a one -counter operating syst em 
has enabled business entities registering in the Central Registry of Business Entities to also be 
automatically registered in the register of the Department of Statistics, the register of taxpayers 
and customs payers, and the register of payers of value  added tax (VAT) and excise taxpayers.  
2.50.   Efforts have also been taken to improve the environment for small and medium -sized 
enterprises (SMEs). Adopted in December 2010 , the Promotion Programme of Business 
Development encourages the development of SMEs on l and connected to utilities, aims at 
increasing employment in less developed municipalities as well as attracting the capital of 
                                                
97 OECD (2016), SME Policy Index. Western Balkans and Turkey 2016 . Assessing the implementation of 
the small business act for Europe. Viewed at: https://europa.ba/wp -content/uploads/2016/06/SME -Policy -
Index -Western -Balkans -and-Turkey -2016.pdf . 
98 World Bank (2017), Montenegro Policy Notes 2017. Viewed at: 
http://documents.worldbank.org/curated/en/400341486444604697/pdf/112642 -WP-
MontenegroPolicyNotesEng -PUBLIC.pdf . 
99 Government of Montenegro (2017), Economic Reform Programme for Montenegro 2017 -2019, 
Podgorica, Janua ry.  WT/TPR/S/369 • Montenegro  
 
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  domestic and foreign investors interested in the project.100 The 2011 -2015 Strategy for 
Development of SMEs is aimed at strengthen ing the financial support and competiveness of SMEs 
and promoting entrepreneurship.101 Within the 2015 -2018 Montenegro Development Directions 
framework, the government aims to support the SME sector through strengthening financial 
support to SMEs. For this p urpose, a MoU  between Montenegro and the EU Programme for the 
Competitiveness of SMEs – COSME was signed with a total budget of €2.3 billion for the 
2014-2020 period, opening the possibility for improving access to finance for SMEs, primarily 
through the i nstrument of loan guarantees. To strengthen competitiveness and promote 
Montenegrin SMEs in various international events, conferences and business meetings, the 
Government is connected to the Enterprise Europe network (Network -EEN). Moreover, it has 
adopte d the 2015 -2019 Strategy for Lifelong Entrepreneurial Learning with the objective of 
creating conditions for further promotion of entrepreneurial education and skills that would help 
individuals obtain better jobs and set up new companies.102  
E-commerce  
2.51.   The Law on Electronic Commerce (OG Nos. 80/04, 41/10, 40/11 and 56/13) regulates the 
provision of processing and data storage services, liabilities of providers of information society 
services , and rules on electronic contracts. The amendments to the Law o n E-commerce, adopted 
in November 2013, were aimed to bring legislation into alignment with the Directive 2000/31/EC 
of the European Parliament and of the Council on certain legal aspects of information society 
services, in particular electronic commerce, in the Internal Market.103 Further laws in this area 
include the Law on Electronic Document (OG No. 05/08), the Law on Electronic Identification and 
Electronic Signature (OG No. 31/17) and the Law on Information Security (OG Nos.  14/10, 40/16). 
All electroni c commerce legislation has been harmonized with the relevant acquis . Related by -laws 
are in the process of being prepared.  
2.52.   The Ministry of Public Administration and the Ministry of Economy are the competent 
authorities in the area of the regulatory framewo rk for networks and services and radio spectrum. 
In 2016, the Strategy for the Information Society Development 2020 was adopted, with the aim 
to, inter alia,  increase the share of e -commerce in total commerce (on the national level) by 1.5% 
in 2020 (compar ed to 0.5% in 2018).104 
2.53.   The adopted legislation promotes the secure and efficient utilization of electronic means  of 
communication by specifying requirements for certain electronic signatures and authorizing the 
issuance of certificates for electronic signat ures. Since June 2014, PayPal has been available in 
Montenegro allowing online payments from Montenegro. The authorities indicated that they are 
working to get PayPal approval to extend the system's functionality to include payments to 
Montenegro.105 Accordi ng to the 2015 UNCTAD B2C E-commerce Index , Montenegro scored 41.5 
(compared to Bosnia and Herzegovina with a score of 40.7, Croatia - 69.6, and Serbia - 55.9).106 
                                                
100 Information provided by the authorities.  
101 European Commission , Montenegro: Strengthening the competitiveness and innovation sector of 
Montenegro. Instrument for Pre -Accession Assistance (IPA II) 2014 -2020. Viewed at: 
https://ec.europa.eu/neighbourhood -
enlargement/sites/near/files/ipa_2016_37896_2_me_competitiveness_and_innovation.pdf .  
102 Ministry of Finance (2015), Montenegro Development Directions 2015 -2018, June.  
103 Government of Montenegro (2013), Negotiating position of Montenegro for the intergovernmental 
conference on the accession of Montenegro to the European Union for Chapter 10: Information society and 
media , Podgorica, October.   
104 Ministry of Information Society and Telecommunications (2016), Strategy for the Information Society 
Development 2020, Podgorica . Viewed at: http://www.mid.gov.me/en/librar y/strategije . 
105 Montenegro, Country Commercial Guide online information. Viewed at: 
https://www.export.gov/apex/article2?id=Montenegro -ECommerce .  
106 The UNCTAD B2C E -commerce Inde x is composed of four indicators: Internet use penetration, secure 
servers per 1 million inhabitants, credit card penetration and a postal reliability score. This year's Index was 
improved by increasing the geographic coverage (from 130 to 137 economies) a nd fine -tuning the indicator to 
measure the delivery aspect of e -commerce. The straightforwardness and transparency of the Index allow 
countries to compare how they perform in different areas. The 137 economies represent 96% of the world 
population and 99%  of world GDP. UNCTAD (2016), UNCTAD B2C E -commerce index 2016.  UNCTAD Technical 
Notes on ICT for Development. Viewed at: http://unctad.org/en/PublicationsLibrary/tn_unctad_i ct4d07_en.pdf . WT/TPR/S/369 • Montenegro  
 
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  E-government  
2.54.   In 2014, a Law on E-government was adopted (OG No. 32/14). Its objective is to facilitate 
cooperation between the state authorities at the level of data exchange, as well as to ensure 
better communication by the public administration with citizens and businesses with respect  to 
information society -related  obligations . An amendment to this law is being drafted to take into 
account institutional changes and three rule books will be adopted on the basis of the law in 2018. 
An e -government portal ( https://www.euprava.me ) has been established which provides 
information to individuals  and businesses on certain aspects of public administration. There are 
also the portals of the Tax Administration ( http://www.poreskauprava.gov.me ), Customs 
Administration ( http://www.upravacarina.gov.me ) and Real Estate Administration 
(http://www.nekretnine.co.me ). 
2.55.   In October 20 06, Montenegro became  a party to the 2005 United Nations Convention 
against Corruption (UNCAC).107 In recent years, Transparency International has noted gradual 
improvements in perceptions of the level of public sector corruption; Montenegro's score in its 
Corruption Perceptions Index 2016 was 45, compared to 44 in 2015 and 42 in 2014.108 As 
indicated by the authorities, Montenegro has undergone three rounds of evaluation under the 
Council of Europe's Group of States against Corruption (GRECO) and has implement ed all 
38 recommendations addressed to it.  
2.56.   In 2014, the Government of Montenegro opted for a centralized preventative anti -corruption 
institutional framework, which replaced the former decentralized system. In January 2016, the 
Law on Prevention of Corrupt ion entered into force. This provided for the establishment of a 
special Agency for Prevention of Corruption in 2016, which replaced the Directorate for 
Anti-Corruption Commission and Commission on Prevention of Conflict of Interest. The  main areas 
dealt w ith by the  Agency are conflicts of interest, the financing of political parties, lobbying , and 
the protection of  whistle -blowers.109 As at end -2017, there were 56 people working in this Agency. 
As set out in law, its budget may not be below 0.2% of GDP, ensu ring that it has sufficient 
financial resources. The work of the Agency is regulated by three laws: the Law on Prevention of 
Corruption, the Law on Financing of Political Entities and Electoral Campaigns; and the Law on 
Lobbying all of which were adopted i n December 2014. In 2013, the Government prolonged the 
action plan for the implementation of the 2010 -2014 Strategy for the Fight against Corruption and 
Organi zed Crime for the 2013 -2014 period. The latest report on implementation of this Action Plan 
indicated that 59.13% of measures had been implemented, 29.57% of measures had been partly 
implemented and 11.3% of measures had not been implemented. The continuation of national 
anti-corruption strategic planning is provided through the Action Plan for Chapte r 23 and the 
Operational Document for prevention of corruption in seven special risk areas (public procurement, 
spatial planning, privatization, education, health sector, local government and the police). The 
latter contains measures that were assessed as partially or not implemented from the Action Plan 
2013-14 as well as new measures. Monitoring of the implementation of these documents and 
reporting is undertaken by a chapter 23 working group established by the Government, which 
brings together government  agencies, independent agencies and NGOs.  
2.57.   According to the 2016 European Commission report, Montenegro has achieved some level of 
preparation in the fight against corruption. However, it remains prevalent in many areas and 
continues to be a serious proble m. Despite some further steps taken, the track record both on 
successful investigations and convictions, in particular in high -level corruption cases and on 
prevention of corruption , remains limited.110 In the context of this Review, the authorities provided  
details on corruption prevention measures undertaken by the Agency in 2016 and the 
first 9 months of 2017. These included: 6,497 verified asset declarations of public officials in 2016 
and 6,569 in 2017 (these are available on the Agency's website – www.antikorupcija.me ). It 
                                                
107 Under this Convention, parties are required to establish criminal and other offences to cover a wide 
range of acts of corruption. UNODC online information. Viewed at: 
https://www.unodc.org/unodc/en/treaties/CAC/signatories.html . 
108 Transparency International Corruption Perceptions Index 2016. Viewed at: 
https://www.transparency.org/news/feature/corruption_perceptions_index_2016#table . 
109 BTI (2016), Montenegro Country Report , Bertelsmann Stiftung. Viewed at: https://www.bti -
project.org/fileadmin/files/BTI/Downloads/Reports/2016/pdf/BTI_2016_Montenegro.pdf .  
110 European Commission (2016), Commission Staff Working Document, Montenegro 2016  Report. 
Brussels. Viewed at: https://ec.europa.eu/neighbourhood -
enlargement/sites/near/files/pdf/key_documents/2016/20161 109_report_montenegro.pdf .  WT/TPR/S/369 • Montenegro  
 
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  issued a total of 226 binding opinions relating to the prevention of conflict s of interest regarding  
public officials; this resulted in 105 resignations of public officials and fines amountin g to 
€121,667  applied for failing to comply with provisions on prevention of conflicts of interest and 
asset declarations. The Agency issued five  decisions on the suspension of the transfer of budget 
funds to political entities due to the failure to report  on the collected and spent funds in the 
election campaign and made public officials at the central and local levels publish 9,440 reports on 
the use of public funds in elections; fines imposed for non -compliance amounted to €80,830. It 
also received 107 w histle blower reports and initiated 19 procedures "ex officio". A total of 
676 authorities appointed integrity managers, and adopted 672 integrity plans; these authorities 
are required to report to the Agency on implementation of these plans by mid -April 2 018. The 
Agency also issued eight opinions on laws with the aim to "corruption -proof" this legislation. As 
noted by the authorities, these options are not binding but they are publically available hence may  
be used to put pressure on the Government during the drafting process of the respective laws.  
 
 
 WT/TPR/S/369 • Montenegro  
 
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  3  TRADE POLICIES AND P RACTICES BY MEASURE  
3.1.  Since its WTO accession, the general thrust of Montenegro's trade policy has remained 
relatively unchanged. While no unilateral liberalization has been undertaken, there have been 
openings or policy and/or regulatory developments in certain areas including  trade facilitation, 
tariffs, preferential trade agreements, sanitary and phytosanitary requirements, government 
procurement, competition policy, and intellectual property rights to ensure alignment to EU 
standards and/or WTO commitments.  
3.2.  The tariff is on e of the main trade policy instruments; its complexity increased due to its EU 
alignment in 2017 and its relatively low simple average MFN applied tariff rate dropped slightly. 
Binding observance concerns were addressed in early 2018. The small gap between  the simple 
averages of the MFN applied and bound rates ensures largely predictable and stable market access 
conditions. Non -automatic import licensing requirements are in place. The fees for import licences 
for medicines and medical devices and drugs and psychotropic substances are based on the import 
value. No contingency measures have been introduced so far. Montenegro prohibits temporarily 
exports of some kind s of wood and wood products. Several general or industry -specific measures, 
inter alia,  involvi ng tax concessions, grants, guarantees, concessional loans, debt write off and 
rescheduling continued to support investment, production and trade.  
3.3.  State involvement in the economy seems limited and targeted to areas of strategic 
importance. No preferences  are granted to domestic suppliers participating in government 
procurement operations. Despite progress, competition policy, consumer protection and IPR 
enforcement remain subject to challenges , including  resource constraints that are being 
addressed. Cert ain sectoral coverage exemptions of pro -competitive agreements from competition 
rules and a few price controls are in place.  
3.1  Measures Directly Affecting Imports  
3.1.1   Customs procedures, valuation, and requirements  
3.1.1.1   Procedures and requirements  
3.4.  Foreign trade activ ities may be performed by all persons registered in accordance with the 
customs regulations regardless of national origin and with no requirement of physical presence or 
investment in Montenegro.1 As of October 2017, there were 5,718 importers and 1,324 ex porters 
registered with the Customs Administration compared to 5,249 and 1,361 in 2012 respectively; at 
the same time, there were 40 companies undertaking import/export operations of controlled goods 
(arms and military equipment) registered with the Minist ry of Economy.2  
3.5.  Montenegro uses a fairly standard import/export documentation process (generally requiring  
a bill of lading and related sales documents).3 With the liberalization of the trade regime and 
reform of the trade/customs -related institutions, Mo ntenegro is moving toward harmonizing its 
import documentation with the European Union . Import document requirements consist of a 
packing list, standard CMR (UN Convention on the Contract for the International Carriage of Goods 
by Road) waybill, certificat e of origin, commercial invoice, and customs import/export declaration. 
An E -CMR project is to be considered under the next Business Strategy of the Customs 
Administration from 2018 onwards.  
3.6.  No single window system is in place yet; the Ministry of Finance  is conduct ing preliminary 
negotiations with a potential international donor for technical assistance support and financing. 
The Trade Facilitation Strategy (see below), currently under preparation, is to include actions for 
the development of a single win dow system.  
3.7.  Since April 2003, the Customs Administration has implemented a Customs Information 
System (CIS), inter alia,  covering clearance, transit, TIR Carnet, risk management system, the 
                                                
1 WTO document WT/ACC/CGR/38, WT/MIN (11)/7, 5 December 2011. Foreign Trade Law 
(OG Nos. 28/04, 37/07 and 57/14).  
2 Law on Foreign Trade in Arms and Military Equipment (OG No. 40/16).  
3 U.S. Department of Commerce (2017), Monte negro Country Commercial Guide 2016 . Viewed at: 
https://me.usembassy.gov/wp -content/uploads/sites/250/2017/02/Montenegro_2016_CCG.pdf . WT/TPR/S/369 • Montenegro  
 
- 49 - 
 
  finance module and the guarantee module. Data are processed in re al time and made available to 
the business users through analyses and decisions. The CIS enables an electronic exchange of 
messages and data from a single administrative document (SAD); the system lacks electronic 
signature or public key infrastructure  (PKI), therefore although data may be submitted 
electronically through SAD , the procedure can only be launched upon submission of the SAD's 
paper version.  
3.8.  Since 2003, the Customs Law has exempted goods with a value below €150 , including those 
purchased onlin e (as from 2015, OG No. 20/15) , from payment of customs duties and provided 
expeditious clearance (Section 2.4.2); in addition, the 2017 amendments of the Law on Value 
Added Tax allow for VAT exemption of goods purchased online with a value below €75. Betw een 
July 2016 and September 2017, the total value of internet -purchased goods exempt from payment 
of customs duty stood at €2.2 million.  
3.9.  Montenegro has undertaken several trade facilitation initiatives in recent years. Under the 
2016 amendments, the provis ions of the Customs Law Implementing Regulation, which relate to 
simplification of procedures, were fully aligned with the relevant Regulation for the Implementation 
of the (European) Union Customs Code (UCC); as a result, the Customs Administration has be en 
issuing authorizations for import simplified procedures on the basis of the bookkeeping entry.4 The 
Customs Administration introduced an application for electronic monitoring of simplified 
procedures for declaring goods on the basis of bookkeeping recor ds so that the licence holders 
submit only an electronic customs declaration. The user of these simplified procedures is obliged to 
keep all documentation accompanying the goods and to make it available to the customs authority 
in case of documentary contr ol. 
3.10.   The provisions of the 2008 Authorized Economic Operator (AEO) scheme for 
entities/persons with headquarters within the customs area of Montenegro have been revised so as 
to allow it to be revoked or temporarily suspended, and the national Decree regula ting AEO status 
came into effect in June 2015.5 An AEO may benefit from simplified security check procedures 
upon entry and exit of goods as prescribed by the customs legislation. AEO status may be granted 
for an indefinite period to those who, inter alia : complied with the customs legislation in the 
previous three -year period; keep satisfactory business and, when necessary, transport records 
allowing for appropriate customs controls; are financially reliable and stable; and maintain 
appropriate protection and security measures. However, the launched AEO scheme is not yet  
operational, inter alia,  due to technical reasons including regulatory changes both at the EU and 
Montenegrin level.6 According to the authorities, as of December 2017, following the succes sful 
implementation of activities related to simplified procedures based on bookkeeping entr ies, the 
AEO scheme implementation is under way. A Business Plan for Implementation of the AEO 
programme was drafted, and the next step is to develop an AEO Guide i n accordance with the 
latest amendments to the AEO Guidelines, the AEO Implementation Instruction and other 
documents.7 The Customs Administration is currently receiving World Bank Group technical 
support for the implementation of simplified procedures and  the development of the AEO 
programme.  
3.11.   Montenegro ratified the WTO Trade Facilitation Agreement (TFA) by depositing its 
instrument of acceptance on 10 May 2016 (Section 2.3.1); on 1  October 2014 , it submitted its 
Category A notification to the WTO indicating which provisions of the TFA it intended to implement 
                                                
4 The Customs Law a nd the Customs Law Implementing Regulation , both in force since 2003 , prescribe 
simplified customs procedures (incomplete declaration, simplified procedure based on invoices and simplified 
procedure based on book entry).  
5 Article 6b of the Customs Law (OG  Nos. 7/02, 38/02, 72/02, 21/03, 31/03, 29/05, 66/06, 21/08, 
39/11, 40/11, 28/12, 62/13); Customs Law and Decree on Implementation of the Customs Law of 
6 March  2003; Decree on the Conditions for Granting the Status of Authorized Economic Operator in the 
Customs Territory of Montenegro (OG No. 38/15).  
6 The authorities indicated that the new EU Customs Law Implementing Regulation which regulates AEO 
status, entered into force in July 2016, and therefore the Montenegrin legislation had to be aligned to the n ew 
Union Customs Code (UCC); the latest relevant amendments to the Montenegrin Customs Law came into force 
on 8 November 2017. Further amendment work to the secondary legislation of Montenegro in this area is 
under way.  
7 CEFTA member States are working on  the harmonization of regulations and development of 
EU-coordinated AEO programmes, which will be a condition for the mutual recognition of AEO status among 
these countries.  WT/TPR/S/369 • Montenegro  
 
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  upon entry into force of the Agreement. Montenegro ensures international customs cooperation 
with the European Union member States in accor dance with Protocol 6 (Protocol on mutual 
administrative assistance in customs matters) of the Stabili sation and Association Agreement 
(SAA). In the context of the Central European Free Trade Agreement (CEFTA) (Sections 2.3.2.1.1 
and 3.1.3.6), on 26 May 20 17 Montenegro signed Additional Protocol 5 relating to the 
simplification of inspections, reduction of formalities, and electronic exchange of data concerning 
the carriage of goods between CEFTA Parties and cooperation in trade partnership programmes; as 
of end-October 2017 , its ratification process and the preparatory work for its implementation were 
under way.8 Montenegro, a member of the World Customs Organisation since 2006, has taken 
over and is applying international treaties and agreements entered in to as the state community  of 
Serbia and Montenegro.9 Since 2006, it has maintained agreements on mutual administrative 
assistance and cooperation in customs matters with: Croatia, Albania, Iran, Slovenia, Moldova, 
Ukraine, Kosovo, Serbia, The former Yugosl av Republic of Macedonia, Turkey, and Azerbaijan.  
3.12.   Montenegro's National Trade Facilitation Committee (NTFC), a multi -agency body composed 
of representatives of 17 agencies (including 6 from the private sector) established  in May 2015, 
ensures coordination and cooperation between stakeholders in the process of trade facilitation 
reform. All ongoing trade facilitation projects are overseen by the NTFC. Under the NTFCs 
supervision, the first National Trade Facilitation Strate gy – intended  to address systemic 
bottlenecks in cross -border trade and define a five -year framework for the implementation of 
concrete trade facilitation reforms  – is under preparation and is expected to be adopted by the end 
of first quarter of 2018. The  Strategy is to also support Montenegro's economic development goals 
and meet its WTO TFA commitments as well as undertakings in the context of the process of 
accession to the European Union  and other relevant international and regional agreements in this 
area. 
3.13.   In 2016, Montenegro ranked  43rd out of 190 economies on the ease of trading across 
borders, lower than a number of countries in the region but better than its 53rd position (out of 
189 economies ) in 2013.10 According to World Bank Doing Business data,  in 2016 importing a 
shipment of goods required border and documentary compliance equivalent to 23 hours and 
US$306, and 10  hours and US$100, respectively. In 2013, importing a shipment required 
5 documents, took 14  days and cost US$985. Imports proceed th rough a three -track clearance 
control management system consisting of low -risk (green) fast clearance, medium -risk (yellow) 
and high -risk (red) (e.g. document audits and physical inspections); in 2016, 91.6% (89.4% in 
2014) of import -related customs declar ations proceeded through the green channel, whereas 3.2% 
and 5.2% were processed through  the yellow and red clearance track s. The Montenegro Customs 
Administration conducted its first time release study (TRS) in line with the WCO's guidelines in 
November/D ecember 2016 and its final version was presented in October 2017. Among its findings 
were the following average release times: 16 hours 4 minutes for road cargo import s; 1 day 
14 hours 4 minutes for air cargo imports; and 3 days 14 hours 6 minutes for sea cargo transit. The 
TRS also found that public and private sector stakeholders could benefit from initiating coordinated 
collective actions among CEFTA economies, especially in the areas of information sharing, 
standardization of documents and regulations, recognition of AEOs and further harmonization of 
cross-border procedures aligned with the national Integrated Border Management Strategy, the 
WTO TFA and the CEFTA Protocol 5.  
3.14.   Under the Law on Administrative Procedure and the Law on Administrative Dispute,  at first 
instance complaints  regarding  decisions of the Customs Administration can be filed with the 
Ministry of Finance; at second instance , the complainant may initiate an administrative dispute 
against decisions of the Ministry of Finance before the Ad ministrative Court of Montenegro. 
                                                
8 Final draft of the Additional Protocol 5 to the Agreement on Amendment of and A ccession to the 
Central European Free Trade Agreement as at 25 October 2016.  
9 These are the customs cooperation agreements with Italy, Poland, France, Austria, Germany, Greece, 
Romania, Slovenia, Hungary, Slovakia, and Bosnia and Herzegovina.  
10 According to the authorities, this progress was due to the launching in 2013 of a new risk analysis 
system; since then the percentage of goods examined through the information system has been continuously 
reduced thus accelerating the flow of goods and cu stoms procedures. World Bank (2016), Doing Business 
2017: Equal Opportunity for All – Economy Profile 2017 Montenegro , Washington, D.C. Viewed at: 
http://www.doingbusiness.org/~/media/wbg/doingbusiness/documents/profiles/country/mne.pdf ; World Bank 
(2013), Doing Business 2014 Economy Profile: Montenegro , 29 October, Washington, D.C. Viewed at: 
https://openknowledge.worldbank.org/bitstream/handle/10986/18469/829130Monteneg0Box0382100B00PUBL
IC0.pdf?sequence=1&isAllowed=y . WT/TPR/S/369 • Montenegro  
 
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  Between 2015 and 2016, there were 220 first instance appeals at the Ministry of Finance and 
14 judicial appeals, including customs valuation related appeals (Section 3.1.1.2), of which 55% 
were adopted and 45% rejected.  
3.15.   Smuggling activities involve cigarettes, alcoholic beverages and narcotics as well as 
counterfeit items (Section 3.3.6.3.2). Between 2012 and mid -2017, the Customs Administration 
undertook 5,511 controls, found 1,927 irregularities, imposed fines of a total  amount of 
€1.3 million and initiated 74 criminal charges. During the period 2012 -2017, fifteen  auctions for 
the sale of seized goods were held pursuant to the Decree on Conditions and Methods of Selling 
Customs Goods and Other Customs Procedures, and €644,489  was raised.  
3.1.1.2   Customs valuation  
3.16.   According to the authorities, Montenegro's customs valuation legislation is in line with the 
WTO Agreement on Customs Valuation. Imports are valued at their c.i.f. price. Under the 
legislation , the customs value of im ported goods is the transaction value but in case of doubt the 
second, third and sixth methods envisaged under the WTO Agreement are used.11 According to the 
authorities, as of 2017 the transaction value was the most used method; in a small number of 
cases the fourth and fifth valuation method s are used. No specific data on the cases in which  the 
transaction value and other methods have been used were available from the authorities . No 
reference or minimum prices or fixed valuation schedules are used.12  
3.17.   Importers have the right of appeal against the valuation carried out by Customs 
(Section  3.1.1.1).13 At first instance,  appeal s can be submitted to the Ministry of Finance, and at 
second instance  to the Administrative Court. Concerning under -invoicing, between 2013 and 2016 
the Customs Administration sent 394 requests to foreign customs administrations for initiating 
procedures for post collection of customs debt and for launching customs offences  and received 
46 negative answers (false invoices). No data on und er-invoicing cases were available from the 
authorities  but they  plan to create such a database.  
3.18.   In 2014, Montenegro notified to the WTO its customs valuation legislation, the 
implementation of the Decision of the Committee on Customs Valuation on the Trea tment of 
Interest Charges in Customs Value of Imported Goods, and replies to the checklist of issues on the 
implementation and administration of the Agreement on Customs Valuation (Section 2.3.1).14  
3.1.2   Rules of origin  
3.19.   Preferential rules of origin apply to imp orts under preferential trading arrangements and 
RTAs.15 According to the legislation (Customs Law Article 28), preferential origin is established on 
the basis of evidence of the origin of goods as established  under the provisions of the preferential 
agreem ent. Preferential rules of origin covering imports under CEFTA, and from the EU, EFTA, 
Turkey, and Ukraine are subject to and/or based on the provisions of the Regional Convention on 
Pan-euro-Mediterranean Preferential Rules of Origin (Convention).16 Eligib le imports from these 
                                                
11 Customs Law – Title II – Chapter 3: Value  of the Goods for the Customs Purposes and Decree on 
Implementation of the Customs Law  – Part 4: Customs Valuation of Goods. WTO document G/VAL/N/1/MNE/1, 
15 December 2014.  
12 Upon its WTO accession, Montenegro undertook not to use such valuation. WTO docum ent 
WT/ACC/CGR/38, WT/MIN(11)/7, 5 December 2011.  
13 WTO document G/VAL/N/2/MNE/1, 22 December 2014.  
14 WTO documents G/VAL/N/1/MNE/1, 15 December 2014; G/VAL/N/2/MNE/1, 22 December 2014; and 
G/VAL/N/3/MNE/1, 22 December 2014.  
15 Customs Law – Title II – Chapter 2: Origin of Goods – Non-preferential Origin, and Decree on 
Implementation of the Customs Law – Part 3: Origin of goods – Non-preferential. WTO document G/RO/N/126, 
20 February 2015.  
16 The pan -Euro-Mediterranean cumulation zone includes the European Un ion, the EFTA States (Iceland, 
Norway, Switzerland and Liechtenstein), the participants in the Barcelona Process (Algeria, Egypt, Israel, 
Jordan, Lebanon, Morocco, Syria, Tunisia, Turkey, Palestine) and the Faroe Islands. This convention includes in 
the zo ne the participants in the Stabilization and Association Process (Albania, Bosnia and Herzegovina, 
Croatia, Montenegro,  Serbia, and the Former Yugoslav Republic of Macedonia, as well as Kosovo under UNSC 
Resolution 1244/99). Regional Convention on pan -Euro-Mediterranean preferential rules of origin online 
information. Viewed at: 
http://ec.europa.eu/world/agreements/pr epareCreateTreatiesWorkspace/treatiesGeneralData.do?step=0&redir
ect=true&treatyId=9641 . WT/TPR/S/369 • Montenegro  
 
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  countries are based on common principles in line with the "goods wholly obtained" or "undergone 
sufficient working or processing" criteria.17 Concerning fisheries products, a fishing vessel must, 
inter alia,  be: registered in the expor ting country; sail under the exporting country 's flag; have at 
least 50% of its equity, owned by nationals of the exporting country; and at least 75% of its crew 
must be nationals of the exporting country.18 Certain manufactur ed goods are subject to a 
value -added criterion, namely, manufacture in which the value of all the materials used does not 
exceed either 25% (for HS Chapters 30, 39, 84 –91 and 94) , 30% (for HS Chapters 84 –91 and 94) 
or 40% (for HS Chapters 28 -29, 30 -39, 84 –91 and 94) of the ex -works pri ce of the product.19 
Furthermore, de minimis clauses allow non -originating materials which cannot normally qualify for 
origin status to be used, provided that their total value does not exceed 10% of the ex -works price 
of the product, and that any of the pe rcentages given in the Convention's Annex II for the 
maximum value of non -originating materials are not exceeded. The de minimis rule does not apply 
to products in HS  Chapters 50 -63 (textiles and clothing). Regardless of the de minimis clause, 
certain oper ations are considered as insufficient working or processing to confer the status of 
originating products.20 
3.20.   Under the Free Trade Agreement between the Federal Government of the Federal Republic 
of Yugoslavia (FRY) and the Government of the Russian Federatio n, the rules of origin are defined 
by the: Rules on the Origin of Goods from the FRY that are Imported into the Territory of the 
Russian Federation under the Agreement; and, Rules of O rigin of Goods from the 
Russian  Federation that are  imported into the Territory of the FRY under the Agreement. They 
involve criteria such as "wholly obtained products", "sufficiently worked or processed products", 
and use of domestic raw materials.  
3.21.   Montenegro applies non -preferential rules of origin to all other imports. Unde r the Customs 
Law (Articles 24 and 25) goods originating in a country are those wholly obtained or produced in 
that country, including its territorial waters. Goods whose production involved more than 
one country shall be deemed to originate in the country  where they underwent their last 
substantial, economically justifiable processing (treatment, final treatment, or further treatment) 
resulting in new products or representing a crucial stage of manufacture. Under the Customs Law 
(Article 24 paragraph 1 item 3), imported live animals will have non -preferential origin if they are 
live animals born and raised in  a country . The non -preferential origin is determined on the basis of 
the relevant certificate issued by the competent authorities of the exporting country as well as 
other commercial documents (e.g. invoices).  
3.22.   The legislation governing non -preferential rules of origin was notified to the WTO Committee 
on Rules of Origin in 2015, and those applied under the RTA between Ukraine and Montenegro in 
2013 ( Section 2.3.2.1).21  
3.1.3   Tariffs  
3.1.3.1   General features  
3.23.   Since January 2017, Montenegro has used the 2017 version of the Harmonized System of 
Tariff Classification (HS), at present consisting of 9,528 eight -digit lines (145 more lines than in 
2012) (Table 3.1). Under the Law on Customs Tariff , Montenegro adopts, not later than 
November  of each year, the Decree on Customs Tariff for the following year that harmonizes its 
Customs Tariff Nomenclature with the EU's Combined Nomenclature. According to the authorities, 
the current tariff is in line with the EU's Combined Nomenclature; its sub -headings derive from the 
eight-digit tariff sub -heading of the Combined Nomenclature by adding a ninth or tenth digit for 
specific types of goods.  
                                                
17 Articles 2 and 4 of the Convention. Viewed at: 
http://ec.europa.eu/world/agreements/prepareCreateTreatiesWorkspace/treatiesGeneralData.do?step=0&redir
ect=true&treatyId=9641 . 
18 More detailed information is available in Article 4 of the Convention. Viewed at: 
http://ec.europa.eu/world/agreements/prepareCreateTreatiesWorkspace/treatiesGeneralData.do?step=0&redir
ect=true&trea tyId=9641 .  
19 Article 5 and Annex II of the Convention.  
20 Articles 5 and 6 of the Annex II of the Convention.  
21 WTO documents G/RO/N/98, 13 September 2013 and G/RO/N/126, 20 February 2015.  WT/TPR/S/369 • Montenegro  
 
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  3.24.   The Customs Tariff contained in the ann ual Decree on Customs Tariff  comprises several 
rates according to the source of imports. These are the MFN  tariffs from non -preferential sources 
(termed applied), the WTO bound rates and preferential tariffs for imports from the EU, EFTA, 
CEFTA, the Russia n Federation, Ukraine, Turkey and least developed countries (Sections  2.3.2.1 
and 3.1.4.6). The Customs Tariff in the Decree reflects changes in nomenclature and the agreed 
tariff liberalization under the relevant trade agreements, i.e. WTO and RTAs.22 Since 2011, 
Montenegro has submitted its Customs Tariff to the WTO Integrated Data Base annually.23 
Following a drop from a 2012 peak, in the period 2013 -16 taxes on international trade 
(i.e. customs duties) accounted for 2.3% -2.6% of total tax revenue (Section  3.3.1.1.1).  
3.1.3.2   Applied MFN tariffs  
3.25.   Since 2012, the tariff structure has changed through, inter alia,  the implementation of WTO 
accession commitments, an increase in both the number of tariff bands and the number of 
duty-free tariff lines (including informati on technology items), and a decrease in the coverage of 
compound rates (see below). As a result, the 2017 simple average (unweighted) MFN applied tariff 
dropped slightly to 5.1% (6% in 2012) (Table 3.1 and Chart 3.1). Tariff protection varies 
substantially  across and within sectors, averaging 12.3% for agricultural products and 3.1% for 
non-agricultural products in 2017 (WTO definitions).24 In agriculture , average tariffs are highest 
for prepared food, beverages and tobacco (HS  Section 4), at 15.4% (Chart  3.1, Table  A3.1); on a 
WTO-definition basis the average rate for dairy products stands at 24.3%. Manufacturing tariffs 
are highest for arms and ammunition (15%), followed by footwear and headgear (HS  Section 12) 
at 5.6%, and textiles and articles (HS  Section  11) at 5.4%. By according varied levels of 
protection to selected industries, especially agriculture, tariffs distort competition by favouring 
some activities.  
Table 3.1 Tariff structure of Montenegro, 2012 a nd 2017  
(%, unless otherwise indicated)  
 MFN applied  Current 
bounda Final 
bounda   2012  2017  
Bound tariff lines (% of all tariff lines)  n.a. n.a. 100.0  100.0  
Simple average rate  6.0 5.1 6.5 6.4 
WTO agricultural products  14.9 12.3 15.2 14.8 
WTO non-agricultural products  3.4 3.1 4.3 4.2 
Duty-free tariff lines (% of all tariff lines)  26.5 29.0 27.5 28.6 
Simple average of dutiable lines only  8.1 7.2 9.0 9.0 
Tariff quotas (% of all tariff lines)  0.0 0.0 0.0 0.0 
Non-ad valorem  tariffs (% of all tariff lines)  2.8 1.5 0.0 0.0 
Domestic tariff "peaks" (% of all tariff lines)b 10.3 7.1 6.9 6.8 
International tariff "peaks" (% of all tariff lines)c 10.3 7.1 7.4 7.4 
Coefficient of variation  1.4 1.4 1.2 1.2 
Nuisance applied rates (%  of all tariff lines)d 21.1 21.5 7.4 6.9 
Total number of tariff lines  9,383  9,528  9,833  9,833  
Ad valorem  rates 9,123  9,382  9,833  9,833  
of which, duty -free rates  2,484  2,762  2,703  2,812  
Compound rates with ad valorem  ceiling  260 135 0 0 
Other  0 11e 0 0 
n.a. Not applicable.  
a  Calculations for final bound rates are taken from the CTS database. The final bound schedule is 
based on HS07 nomenclature (10 -digit).  
b  Domestic tariff peaks are defined as those exceeding three times the overall simple average applied 
rate. 
c  International tariff peaks are defined as those exceeding 15%.  
                                                
22 Article 1 of the Decree on Customs Tariff for 2017 and Article 4 of the Law on Customs Tariff 
(OG No. 28/12).  
23 WTO document G/MA/IDB/2/Rev.45, 21 April 2017.  
24 WTO definition of industrial products covers all non -agricultural products, i.e. products not covered by 
the WTO Agreement on Agriculture. WTO agricultural products include all processed and unprocessed 
agricultural commodities (HS Chapters 1 to 24, less fish and fish products, plus some additional HS items).  WT/TPR/S/369 • Montenegro  
 
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  d  Nuisance rates are those greater than zero, but less than or equal to 2%.  
e  Other rates refer to cases where one tariff code at the national tariff line level consists of d ifferent 
types of duties ( ad valorem and compound rates with ad valorem  ceiling). For example, the tariff 
code of HS 07020000 consists of different types of duties (with different product descriptions), 
namely  an ad valorem  tariff (30%) and compound rates with an ad valorem  ceiling (30%+€0.20/kg, 
max. 50%).  
Note:  The 2012 tariff is based on HS12 nomenclature, and the 2017 tariff on HS17. Calculations for 
averages are based on national tariff line level (8 -digit). Simple average rate calculations contain 
ad valorem  equivalents (AVEs) based on 2012 import data for  the 2012 tariff and 2016 import data 
for the 2017 tariff at the national tariff line level. In case s of no trade flow of tariff lines subject to 
non-ad valorem  rates, the ad valorem  ceiling of the c ompound rate is used.  
Source:  WTO Secretariat calculations, based on WTO IDB and CTS database.  
Chart 3.1 Average applied MFN and bound tariff rates, by HS section, 2012 and 2017  
 
Note:  Calculations for avera ges include ad valorem equivalents (AVEs) which were estimated based on 
2012 and 2016 import data for  the 2012 and 2017 tariff s, respectively, at the national tariff line 
level. In case s of no trade flow of tariff lines subject to non -ad valorem  rates, the  ad valorem ceiling 
of the compound rate is used. The final bound tariff is based on HS07 nomenclature, the 2012 tariff 
on HS 2012, and the 2017 tariff on HS17.  
Source:  WTO Secretariat calculations, based on WTO IDB and CTS database.  
3.26.   Although the tariff structure 's complexity increased due to its EU alignment 
(Section  3.1.3.1), over 98% of tariffs are ad valorem , and therefore transparent. In 2017, there 
were some 84 (61 in 2012) different rate bands (55  ad valorem duties, 29  compound duties) of 
which 37  involved decimal ad valorem  rates. Compound rates (see below) tied to an ad valorem  
ceiling ranging from 5% to 50% apply to 1.4% of total tariff lines (135), compared to 2.8% in 
2012. Tariff rates continue to range f rom zero to 30% ( ad valorem  rates) or 50% ( ad valorem  
ceiling of compound rate) (Table  A3.1). After joining the Information Technolo gy Agreement 
(ITA 2) negotiations, Montenegro's ITA 2 implementation scheme was ratified in November  2015, 
thus eliminating import duties on high technology products, including computers, 
telecommunication equipment, semiconductors, semiconductor manufacturing and testing 
equipment, software, scientific instruments, as well as most of the parts and accessories of these 
products .25 Almost 89% (86.8% in 2012) of rates are 10% or below, and rates of over 30% apply 
                                                
25 WTO document WT/ACC/CGR/38, WT/MIN(11)/7, 5 December 2011 and online information. Viewed 
at: https://www.wto.org/english/ tratop_e/inftec_e/montenegro.xls ; European Commission (2016), Montenegro 
2016 Report , Commission Staff Working Document SWD (2016) 360 final, 9 November, Brussels. Viewed at: 
https://ec.europa.eu/neighbourhood -
enlargement/sites/near/files/pdf/key_documents/2016/20161109_report_montenegro.pdf .  
0%5%10%15%20%25%30%
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21
WTO Secretariat calculations, based on WTO IDB and CTS database.Chart 3.1         Average applied MFN and bound tariff rates, by HS section, 2012 and 2017
Source:01   Live animals & products        
02   Vegetable products
03   Fats & oils      
04   Prepared food, etc.
05   Mineral products
06   Chemicals & products07   Plastic & rubber
08   Hides & skins
09   Wood & articles
10   Pulp, paper, etc.
11   Textiles & articles
12   Footwear, headgear13   Articles of stones
14   Precious stones, etc.
15   Base metals & products
16   Machinery
17   Transport equipment
18   Precision instrument19   Arms & ammunition
20   Miscellaneous manufacturing
21   Works of art, etc.Average applied rate 
2017 (5.1%)Average final bound rate
(6.4%)MFN 2012 
MFN 2017
Final bound
Calculations for averages include Ad valorem equivalents (AVEs) which were estimated based on 2012 and 2016 import 
data for 2012 and 2017 tariff,respectively, at the national tariff line level.  In case of no trade flow of tariff lines subj ect
to non -ad valorem rates, the ad valorem ceiling of the compound rate is used.  The final bound tariff and the 2012 
tariff are based on HS07 nomenclature, 2012 tariff on HS 2012, and 2017 tariff on HS17.  Note:Average applied rate 
2012 (6.0%)WT/TPR/S/369 • Montenegro  
 
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  to 1% of tariff items (2.3% in 2012) (Chart  3.2). In the absence of EU tariff alignment 
commitments, the tariff could have been rationalized, for example, by reducing the large number 
of rate bands and removing decimal rates.  
3.27.   Non-ad valorem  tariffs continue to be part of compound rates involving also an ad valorem  
ceiling, and to affect agricultural products, mainly wine, dairy, and meat. According to the 
Secretariat's calc ulations, by mid -2017 the ad valorem  ceiling was attained in the case of tomatoes 
(50%) whereas the ad valorem  equivalents (AVEs) for other products ranged from 30.4% to 35% 
(wine). Although these compound rates do not form part of Montenegro's WTO tariff binding 
commitments, their ad valorem  ceilings seem in line with these undertakings (Section 3.1.3.4).  
Chart 3.2 Distribution of MFN tariff rates, 2012 and 2017  
 
Note:  Figures in parentheses indicate the sha re of total lines. Calculations for averages include ad valorem 
equivalents (AVEs) which were estimated based on 2012 and 2016 import data for the 2012 and 
2017 tariff s, respectively, at the national tariff line level. In case s of no trade flow of tariff l ines 
subject to non -ad valorem  rates, the ad valorem  ceiling of the compound rate is used.  
Source:  WTO Secretariat calculations, based on WTO IDB.  
3.1.3.3   MFN tariff dispersion and escalation  
3.28.   Between 2012 and 2017, indicators of tariff dispersion (coefficient of variation) and 
escalation, which remains pronounced, showed little change (Table 3.1 and Chart 3.3).  
3.1.3.4   MFN tariff bindings  
3.29.   Upon accession , Montenegro bound all tariff lines on an ad valo rem rate basis; the majority 
of its bindings are already in force and the implementation of the remaining commitments is to be 
completed in the year 2022.26 Whereas all ad valorem  ceilings of the compound rates 
(Section  3.1.3.2) seemed in line with binding levels in 2017, the MFN rates applied to at least 
56 eight-digit HS items  (covering , inter alia,  certain meat, fish, office machines, electrical 
equipment, telephone sets and instruments ) appeared to be higher than bound rates but action 
under the Decree o n Customs Tariff for 2018 was to be taken to correct this situation as from 
1 January  2018 (Section 3.1.3.1 and Table A3.2). The overall gap between the simple averages of 
                                                
26 Montenegro also undertook to not list any "other duties and charges" in its Sched ule of Concessions 
and Commitments on Goods under Article II:1(b) of the GATT 1994, binding such charges at "zero" from the 
date of accession. WTO document WT/ACC/CGR/38, WT/MIN(11)/7, 5 December 2011. Schedule CLXVI – 
Montenegro. Viewed at: https://www.wto.org/english/thewto_e/countries_e/montenegro_e.htm . 
(26.5%)(43.0%)
(17.3%)
(2.8%)(5.0%) 
(0.6%)(2.5%) (2.3%)(29.0%) (42.3%)
(17.4%)
(4.1%) (3.8%)
(0.2%)(2.2%)
(1.0%)
05001,0001,5002,0002,5003,0003,5004,0004,500
Duty free >0%-5% >5%-10% >10%-15% >15%-20% >20%-25% >25%-30% >30%
WTO Secretariat calculations, based on WTO IDB.Number of tariff linesChart 3.2  Distribution of MFN tariff rates, 2012 and 2017
Source:MFN 2012 MFN 2017
Figures in parentheses indicate the share of total lines.  Calculations for averages include Ad valorem equivalents 
(AVEs) which were estimated based on 2012 and 2016 import data for 2012 and 2017 tariff, respectively, at the 
national tariff line level.  In case of no trade flow of tariff lines subject to non -ad valorem rates, the ad valorem ceiling 
of the compound rate is used.Note:WT/TPR/S/369 • Montenegro  
 
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  MFN applied and bound rates stands at 1.4 percentage points (Table 3.1), thus ensuri ng largely 
predictable and stable market access conditions.  
Chart 3.3 Tariff escalation by 2 -digit ISIC industry, 2012 and 2017  
 
n.a. Not applicable.  
Source:  WTO Secretariat calculations, based on WTO IDB.  
3.30.   Montenegro's Schedule of Tariff Concessions (Schedule CLXVI) remains based on the 
Harmonized System 2007. Similar to most developing WTO Members , the transposition into the 
2012 version of the HS was prepared by the WTO Secretariat and approved by Montenegro  in 
September 2017. At the time of writing t he transposition file still requires multilateral  review  at an 
informal meeting of the Committee on Market Access scheduled for February 2018. Montenegro 
has not been included in several collective waivers suspen ding the application of the provisions of 
Article II of GATT 1994 to allow Members to reflect the changes resulting from the HS  2012 
n.a.n.a.
0%2%4%6%8%10%12%14%16%
Food,
beverages
and tobaccoTextiles and
leatherWood and
furniturePaper,
printing and
publishingChemicals Non-
metallic
mineral
productsBasic metal Fabricated
metal
products
and
machineryOtherChart 3.3    Tariff escalation by 2 -digit ISIC industry, 2012 and 2017
n.a.n.a.0%2%4%6%8%10%12%14%16%18%20%
Food,
beverages
and tobaccoTextiles and
leatherWood and
furniturePaper,
printing and
publishingChemicals Non-metallic
mineral
productsBasic metal Fabricated
metal
products
and
machineryOtherAverage applied rate in manufacturing
(5.8%)
Not applicable.
WTO Secretariat calculations, based on WTO IDB.n.a.
Source :First stage of processing Fully processed Semi -processedAverage applied rate in manufacturing
(4.9%)2012
2017WT/TPR/S/369 • Montenegro  
 
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  nomenclature in their Schedule of Tariff Concessions . However, the  Ministry of Agriculture and 
Rural Development requested to postpone the transposition from HS 2012 to HS 2017 because of 
the new classification of fishery products in the latter,  and in April 2017 Montenegro requested to 
be included in the waiver relating to the implementation of the HS  2017 changes until 
31 December 2017.27  
3.1.3.5   Tariff quotas  
3.31.   Montenegro applies tariff -rate quotas (TRQs) only under its RTAs (Sections 2.3.2.1.2, 
2.3.2.1.4 and 3.1.4.6).28 They currently affect imports of 149 agricultural products from the 
European Union  in line with the Stabilisati on and Association Agreement (e.g. poultry meat, fish, 
cheese, waters, and wine ) since 2008, and  imports of dried fruit from  Turkey since 2010 
(Table  A3.3, Sections 4.1.1.2 and 4.1.3). TRQs are allocated by the Customs Administration on a 
first-come, first -served basis. Between 2012 and 2017 , the fill -in ratio of these TRQs ranged from 
zero (certain fish) to 100% (e.g. certain fish, cheese, meat, water); the average rate rose from 
30.8% (2012) to 59.8% (2013), 74.3% (2014) and 74.8% (2015) before dropping t o 72.5% 
(2016) and 69.1% (October 2017).  
3.1.3.6   Tariff preferences  
3.32.   Montenegro's expansion of bilateral and regional free trade agreement undertakings meant 
that its simple average tariff rate on imports from RTAs and LDCs remained considerably below the 
5.1% MFN  average tariff rate (Table 3.2).  
Table 3.2 Summary analysis of the preferential tariff, 2017  
  Total  
WTO agriculture  WTO non -
agriculture   
Average 
(%)a Duty -
free 
lines 
(%)b Agreement 
coverage 
(%)c 
  duty 
= 
zero duty 
> 
zero Average 
(%) Duty -
free 
lines 
(%)b Average 
(%) Duty -
free 
lines 
(%)b 
MFN 5.1 29.0 n.a. n.a. 12.3 17.8 3.1 32.1 
CEFTA  0.3 99.0 70.0 0.0 1.5 95.5 0.0 100.0  
EU 0.9 94.9 65.9 3.7 3.7 80.2 0.1 99.0 
EFTA             
Norway  2.3 85.2 56.2 0.7 10.2 34.1 0.02 99.7 
Switzerland/Liechtenstein  1.7 86.2 57.2 5.2 7.5 38.4 0.02 99.7 
Iceland  2.3 85.1 56.1 0.7 10.3 33.6 0.02 99.7 
Russian Federation  0.4 97.7 68.8 0.0 1.5 95.5 0.1 98.4 
Turkey  3.2 76.7 47.7 0.02 12.3 18.2 0.6 93.2 
Ukraine  0.3 99.0 70.0 0.0 1.5 95.5 0.0 100.0  
LDC 0.8 93.8 64.9 0.0 1.7 94.2 0.5 93.7 
n.a. Not applicable.  
a Average comprising both MFN and preferential rates.  
b  MFN and preferential tariff rate as a percentage of total tariff lines.  
c  % of total number of lines. Only rates that are lower than the corresponding MFN rate (excluding 
MFN rate = duty free) are taken into account.  
Note:  Calculations for averages include ad valorem equivalents (AVEs) which were estimated based on 
2016 import data for the 2017 tariff at the na tional tariff line level. In case s of no trade flow of tariff 
lines subject to non -ad valorem  rates, the ad valorem  ceiling of the compound rate is used.  
Source:  WTO Secretariat calculations, based on WTO IDB.  
                                                
27 WTO documents WT/L/902, 27 November 2013; WT/L/947 , 12 December 2014; WT/L/969, 
2 December 2015; WT/L/999, 12 December 2016; and WT/L/999/Add.5, 21 April 2017.  
28 The TRQs under the bilateral trade agreements with Albania and Moldova were phased out upon the 
entry into force of the Additional Protocols of CEFTA, i.e. on 6 January 2012 (Albania) and 13 January 2012 
(Moldova) . WT/TPR/S/369 • Montenegro  
 
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  3.1.3.7   Duty concessions/exemptions  
3.33.   Since 2003, import  duty relief has been granted by the Customs Administration  upon 
certification of the relevant agency for various purposes including: capital goods and other 
equipment imported from abroad to perform activities in Montenegro (e.g. hotels with five or more 
stars, energy facilities or processing facilities); goods (fixed assets) imported as an investment of 
a foreign person; agricultural, farming, livestock breeding, forestry, fisheries, and bee -keeping 
products from frontier/border zones; seeds, fertilizers and products for the treatment of soil and 
crops; and, sea fishing products.29 Between July 2016 and September 2017, the total value of 
import goods that were exempt from payment of customs duty under this regime stood at 
€42 million. No data on the customs /tax revenue forgone from import duty relief and the main 
products concerned were available from the authorities .  
3.1.4   Other charges affecting imports  
3.34.   Under the Law on Administrative Fees (last amended in 2014) charges are set on a service 
cost basis; their ra tes are contained in the Law which is available online 
(http://www.minekon.gov.me/EN/WTO/LIBRARY/ep_actual_legislation/Monetary_po licy_foreign_e
xchange/Fiscal_policy ). Under the Decree on the type, amount and method of payment of the fee 
for the services of the customs authority, charges for customs control out of working hours and/or 
outside  official premises are levied at a fixed a mount of €15 per customs officer per hour.  
3.1.5   Import prohibitions, restrictions, and licensing  
3.1.5.1   Prohibitions  
3.35.   Montenegro prohibits a few imports, mainly to protect health, safety, security, the 
environment and natural resources. Imports of radioactive waste ( HS28.44.10.10, HS28.44.30.55 
and HS28.44.50) and trade in nuclear materials (from HS28.44.20.25 to HS28.44.20.99) are 
prohibited.30 No other import prohibitions are in place.  
3.1.5.2   Import approval and restrictions  
3.36.   Import approval is governed by the Law on Foreig n Trade and the National Control List for 
Export and Import, which consolidates in a single document restrictions contained in 15 other 
laws.31 The National Control List for Export and Import, containing the list of commodities subject 
to import and export licensing, is updated annually by the Ministry of Economy (MEK) to 
harmonize it with the Combined Nomenclature of the European Union; in 2017, the Control List 
was harmonized with the 2016 Amendments to the Combined Nomenclature of the 
European  Union.32 Import approval of weapons and military equipment is governed by specific 
legislation (Section 3.1.1.1).33 
3.37.   Similar to prohibitions, import licensing procedures are maintained for various reasons 
including protection of national security, human, animal or plant  life or health, and to meet 
commitments under international conventions to which Montenegro is  a signatory, e.g. the 
                                                
29 Custom Law (Article 184) and Decree on Conditions and the Procedure for Exercising Rights to Reliefs 
from Customs Duty Payment (undated) published in the OG No. 20/15; Secretariat for Development Projects 
(undated), Investment Climate in Montenegro . 
30 Decision on the control list for export and import of goods (OG No. 24/17), the Law on Ionizing 
Radiation Protection and Radiation Safety (OG Nos. 56/09, 58/09, 40/11 and 55/16) and the National Control 
List for Export and Import (OG Nos. 22/14, 38/15, 29 /16, 62/16 and 24/17).  
31 Relevant regulations are listed in WTO document G/LIC/N/3/MNE/1, 14 April 2015, and published in 
OG Nos. 28/04, 37/07, 1/14, and 57/14.  The National Control List for Export and Import was published in the 
OG Nos. 22/14, 38/15, 29/1 6, 62/16 and 24/17.  
32 In accordance with the Stabilisation and Association Agreement (SAA) between the European 
Communities and their Member States and the Republic of Montenegro signed on 15 October 2007. European 
Commission implementing Regulation (EU) N o. 1821/2016, 6 October 2016.  
33 The Law on Foreign Trade in Weapons and Military Equipment (OG No. 40/2016) and the National 
Control List of Weapons and Military Equipment (OG No.  33/17 ) and online information. Viewed at: 
https://www.eu.me/mn/31/31 -dokumenti . WT/TPR/S/369 • Montenegro  
 
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  Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES).34 
In 2017, these requirements covered approximatel y 356 ten -digit HS tariff items , or 3.6% of all 
tariff lines , comprising explosives, headgears, optical instruments, pharmaceutical products, 
insecticides, contact lenses, uranium and apparatus based on the use of X -rays or alpha, beta or 
gamma radiation ( Table 3.3), compared to 240 items in 2011 (2.6% of all tariff lines (HS07)); 
according to the authorities, this increase was, inter alia, due to HS Nomenclature changes, and 
the insertion of some items into the National Control List (e.g. certain chemicals  and medical 
devices).35 Regarding the importation of used products certain technical requirements must be 
met.36 Used motor vehicles being imported or being placed on the Montenegrin marke t for the first 
time can be put into free circulation upon determinat ion of the level of costs for the type -approval 
of such vehicles.37 Waste t yres can only be imported for processing, on the basis of an approval or 
an import licence issued by the Environmental Protection Agency, provided that their import does 
not endanger  the environment or human health.38  
Table 3.3 Import licensing in 2017  
Ministry/Agency  Products (tariff lines)  Validity period  
Ministry of Economy  Porous aluminium nitrate for explosives (1)  1 year  
 Explosives, pyrotechnic products, matches, pyrophoric 
alloys, certain combustible preparations (20)  1 year  
 Other made -up textile articles, sets, worn clothing and worn 
textile articles, rags (1)  1 year  
 Headgear and parts thereof (2)    1 year  
 Silver, base metals clad with silver , gold, coin (31)  1 year  
 Miscellaneous articles of base metal  (1) 1 year  
 Machines (devices) for the production of optical disks (4)  1 year  
 Electrical machinery and equipment and parts thereof, 
sound recorders and reproducers, television image and 
sound recorders and reproducers, and parts and accessories 
of such articles (6)  1 year  
 Aircraft, spacecraft, and parts thereof  (6) 1 year  
 Photographic, cinematographic, measuring, checking, 
precision (1)  1 year  
 Arms and ammunition, parts and accessories thereof (14)  1 year  
 Toys, games and sports requisites, parts and accessories 
thereof (2)  1 year  
Agency for Medicines and 
Medical Devices or state 
administration body in 
charge of matters relating 
to human health 
protection  Optical, medical or surgical instruments and apparatus, 
parts and accessories thereof (1)  3 months  
 Pharmaceutical products (55)  3 months  
 Artificial tears solutions, contact lenses (1)  3 months  
 Stockings for varicose veins of synthetic fibres (1)  3 months  
 Glass and glassware (1)  3 months  
 Medical, surgical or laboratory sterilizers (1)  3 months  
 Contact lenses (49)  3 months  
 Dentists' chairs (2)  3 months  
 Miscellaneous articles (1)  3 months  
 List of narcotic drugs, psychotropic substances and plants 
that may be used for the production of narcotic drugs - 
Annex 1 of the National Control List  3 months  
 List of psychotropic substances and plants  
Group 1. Psychotropic substances harmonized with List I of 
the UN Convention on Psychotropic Substances of 1971  6 months  
 Group 2. Psychotropic substances harmoni zed with List II of 
the UN Convention on Psychotropic Substances of 1971  6 months  
                                                
34 These reasons are set out in Article 3a of the Law on Foreign Trade of 2004. In the case of CITES, 
ozone  depleting substances and waste management licensing intends to control the quantity of impor ts (i.e. 
quotas).  
35 Paragraph 112 in WTO document WT/ACC/CGR/38, WT/MIN(11)/7 , 5 December 2011.  
36 Article 30 of the Law on Foreign Trade.  
37 Decision on "the Amount of the Vehicle Approval Costs Imported or Firstly Put in Market in 
Montenegro"  (OG No. 50/15 ). 
38 Article 49, paragraphs 1 and 2 of the Law on Waste Management (OG Nos. 64/11 and 39/16).  WT/TPR/S/369 • Montenegro  
 
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  Ministry/Agency  Products (tariff lines)  Validity period  
 Group 3. Psychotropic substances harmoni zed with List III 
of the UN Convention on Psychotropic Substances of 1971  6 months  
 Group 4. Psychotropic substances harmoni zed with List IV 
of the UN Convention on Psychotropic Substances of 1971  6 months  
 Narcotics – including derivatives and salts (51 or 148 "ex" 
positions in Annex 2 of the National Control List ) 6 months  
 Precursors (23 in Annex 3 of the National Control List ) 30 days  
Environmental Protection 
Agency or state 
administration body in 
charge of matters relating 
to human health 
protection  Uranium or thorium ores and concentrates (4)  1 year  
 Natural uranium (33)  1 year  
 Organic chemicals (16)  1 year  
 Plastics and articles thereof (2)  1 year  
 Nuclear reactors (4)  1 year  
 Apparatus based on the use of X -rays or of alpha, beta or 
gamma radiation, and X -ray tubes (8)  1 year  
 Wastes  1 year  
 Substances that deplete the ozone layer ( Annex 4 of the 
National Control List),  alternative substances and the list of 
products containing ozone depleting substances or produced 
by means of such substances  1 year  
Source:  The National Control List for Export and Import (OG Nos. 22/14, 38/15, 29/16, 62/16 and 24/17). 
Viewed at: http://www.mek.gov.me/sto/biblioteka/tr_aktuelna_legislativa/zakon_o_spoljnoj ; and 
information provided by the authorities.  
3.38.   Although all licences are non -automatic,  they are not intended to restrict the quantity or 
value of imports.39 They are granted by 3 institutions – the Ministry of Economy, the Agency for 
Medicines and Medical Devices, and the Environmental Protection Agency – upon consultation with 
other relevan t state bodies whenever required. According to the authorities, licence applications 
are screened or checked in a "fair" manner and reasons for any refusal are given in writing. The 
period for processing applications for import, transit, or export licences  (Section 3.2.3) must not 
exceed 15 calendar days as of the day of application (when received) and are processed on a 
first-come first -served basis. According to the authorities, it is not difficult to obtain a licence and 
it may be used for multiple shipm ents during its period of validity; in practice, processing does not 
usually exceed an average of 30 days, and consideration starts on the day following the closing 
date of the announced application period.40 An annual import quota  for drugs must be observe d in 
line with Montenegro's commitments under the United Nations Convention against Illicit Traffic in 
Narcotic Drugs and Psychotropic Substances . The decision fees for import licences for medicines 
and medical devices are based on the total import value , and those relating to the 
import/export/transit of drugs and psychotropic substances in line with the international 
conventions amount to  1% of the total import/export/transit value rather than the service cost.41 
According to the authorities, these fees ar e based on the merchandise value because the cost of 
the evaluation and inspection service depends on the import value, i.e. a higher value usually 
means that there are more medicines to control.  
3.39.   Permission to conduct activities is necessary for: the impor t and export of tobacco, 
processed tobacco and tobacco products; tobacco processing; production of tobacco products; and 
wholesale and retail trade of tobacco products (Sections 3.3.6.3.2 and 4.1.1).42 The Tobacco 
                                                
39 According to the authorities, under Article 19 of the Law on Foreign Trade , the Government may 
prescribe automatic licences for administrative or statistical pu rposes ensuring that such licence s do not restrict 
foreign trade. The system of automatic licences may remain in place for as long as the circumstances which 
gave rise to its introduction prevail and as long as its underlying administrative purposes cannot  be achieved in 
a more appropriate way. According to the authorities, such licences are optional and were used once 
temporarily on CD imports. WTO document G/LIC/N/3/MNE/1, 14 April 2015.  
40 U.S. Department of Commerce (2017), Montenegro Country Commercial Guide 2016 . Viewed at: 
https://me.usembassy.gov/wp -content/uploads/sites/250/2017/02/Montenegro_2016_CCG.pdf . 
41 Upon accession , Montenegro undertook to en sure that all fees and charges for services applied in 
connection with importation and exportation would be applied in conformity with the WTO Agreement, 
including Articles VIII and X of the GATT 1994. WTO document WT/ACC/CGR/38, WT/MIN(11)/7, 
5 December  2011. 
42 Law on Tobacco (OG Nos. 48/08, 76/08, 40/11 and 42/15).  WT/TPR/S/369 • Montenegro  
 
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  Agency under the  Ministry of Agriculture an d Rural Development  (MARD ) is the administrative 
authority responsible for registering and licensing all participants in the chain of production and 
trade of tobacco, as well as monitor ing the situation in the tobacco products market for the 
purpose s of controlling illegal trade and ensuring fair market competition.43 
3.40.   Since its accession, Montenegro has made one notification under the Agreement on Import 
Licensing Procedures and another containing its replies to the Questionnaire on Import Licensing 
procedur es; both notifications were submitted on 14  April 2015 (Section 2.3.1).44 Montenegro's 
notification under the 2012 Decision on Notification Procedures for Quantitative Restrictions is 
pending .45 The authorities plan to submit pending notifications in this ar ea in the course of 2018.  
3.41.   Although the 2004 Law on Foreign Trade decreased the barriers for doing business and 
executing foreign trade transactions in accordance with WTO Agreements, it still provides for some 
restrictive measures, such as quotas.46 Under t he Law on Foreign Trade , quantitative restrictions 
on imports may be imposed as a safeguard or for balance -of-payments purposes (Section 3.1.7).47 
Since Montenegro's accession to the WTO no such measures have been taken.  
3.1.6   Anti-dumping, countervailing, and s afeguard measures  
3.42.   Montenegro notified its legislation on anti -dumping, countervailing and safeguard measures 
in 2013 and 2014 and considers it in line with the relevant WTO provisions (Section 2.3.1).48 Its 
notification indicates that the relevant provision s of the WTO agreements in these areas were 
incorporated in to national law in the period 2004 -07.49 Legislation in this area was part of the 
agenda of the WTO Committee on Anti -Dumping Practices meeting held on 29 October 2014; 
Montenegro provided written a nswers to the written questions of the United States in this area.50 
According to the authorities, no contingency measures have been introduced so far.  
3.43.   The MEK is responsible for conducting investigations upon written request filed by or on 
behalf of the d omestic industry (i.e. producers collectively accounting for more than 25% of the 
national output of a like product).51 A notification announcing the initiation of proceedings must be 
published in the Official Gazette  (OG). The investigation should be concl uded within one year of 
the initiation. Upon confirmation by the Ministry of the existence of dumping or subsidization, and 
the resulting injury to the domestic industry, a recommendation is made to the Government, 
which decides on the imposition of an ant i-dumping or countervailing duty. Decisions to levy 
anti-dumping or countervailing duties – whether provisionally or definitely – are published in the 
OG. Provisional anti -dumping duties can be levied for a maximum period of six months; for 
provisional cou ntervailing duties , the period should not exceed four months. Subject to review by 
the Ministry, anti -dumping or countervailing duties remain in force as long as necessary to remedy 
the injury, but not for more than four years.  
3.44.   Safeguard measures in the f orm of a quantitative restriction or a price -based measure can 
also be imposed upon recommendation of the MEK.52 The recommendation must derive from an 
investigation and the decision to initiate it is published in the OG. A provisional safeguard 
                                                
43 Online information. Viewed at: 
http://www.who.int/fctc/reporting/party_reports/montenegro_5y_report.pdf  and http://www.pioneer -
investors.com/article.asp?ItemID=3394&cid=3&scid=48&page=3 . 
44 WTO documents G/LIC/N/1/MNE/1 and G/LIC/N/3/MNE/1, 14 April 2015.  
45 WTO document G/L/59/Rev.1, 3 July 2012.  
46 U.S. Department of Commerce (2017), Montenegro Country Commercial Guide 2016 . Viewed at: 
https://me.usembassy.gov/wp -content/uploads/sites/250/2017/02/Montenegro_2016_CCG.pdf . 
47 U.S. Department of Commerce (2017), Montenegro Country Commercial Guide 2016 . Viewed at: 
https://me.usembassy.gov/wp -content/uploads/sites/250/2017/02/Montenegro_2016_CCG.pdf . 
48 WTO document WT/ACC/CGR/38, WT/MIN(11)/7, 5 December 2011.  
49 Act Number 01 -622/2 of 26 April 2004, pub lished in the OG No. 28 on 29 April 2004; Amendments to 
the Law on Trade, Act Number 01 -772/2 of 11 June 2007, published in the OG No. 37 on 19 June 2007 and 
Decree for the implementation of the Law on Foreign Trade , Act Number 02 -4452 of 8 July 2004 publi shed in 
the OG No. 52 of 2 August 2004; Amendments to the Decree for the implementation of  the Law on Foreign 
Trade , Act Number 03 -4946 of 28 June 2007 published in the OG No. 44 of 23 July 2007. WTO documents 
G/ADP/N/1/MNE/1, G/SCM/N/1/MNE/1, G/SG/N/1/MNE /1, 26 September 2013, and 
G/ADP/N/1/MNE/1/Suppl.1, G/SCM/N/1/MNE/1/Suppl.1, G/SG/N/1/MNE/1/Suppl.1, 9 May 2014.  
50 WTO document G/ADP/M/47, 2 February 2015.  
51 WTO document WT/ACC/CGR/38, WT/MIN(11)/7, 5 December 2011.  
52 WTO document WT/ACC/CGR/38, WT/MIN(11)/7, 5 December 2011.  WT/TPR/S/369 • Montenegro  
 
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  measure  – in the form of a tariff increase for a period not exceeding 200 days – may be adopted 
based on evidence that the increased imports were causing or threatening to cause serious injury 
to the domestic industry, and a delay would cause injury difficult to repair. Safeguard measures 
may remain in force as long as necessary to rem edy an injury, but not for more than four years 
(or a total of eight years in exceptional circumstances).  
3.2  Measures Directly Affecting Exports  
3.2.1   Customs procedures and requirements  
3.45.   Similar to imports, all persons registered in accordance with the customs reg ulations can 
undertake export operations, and the same types of documents are required (Section 3.1.1.1). 
Following the 2016 amendment to the Customs Law Implementing Regulation (Section 3.1.1.1), 
simplified export procedures are available upon request of the exporting company. Only operators 
having access to simplified procedures based on bookkeeping records can submit customs 
declarations electronically without support documents (Section 3.1.1.1); even in such cases , 7 or 
30 days later a supplementary dec laration accompanied by the invoices for the exported goods 
must be submitted to the controlling customs office. According to World Bank Doing Business data, 
in 2016 exporting a shipment of goods required border and documentary compliance equivalent to 
8 hours and US$158, and 5 hours and US$67, respectively. In 2013, exporting a shipment of 
goods required 6 documents, took 14 days and cost US$985.53 According to Montenegro's 2017 
TRS (Section 3.1.1.1), the average release times by type of transport and custo ms regime are as 
follows: 8 hours 7 minutes for road cargo export; and, 2 hours 22 minutes for air cargo exports.  
3.2.2   Taxes, charges, and levies  
3.46.   Since 2006, Montenegro has not applied any export duties.54  
3.2.3   Export prohibitions, restrictions, and licensing  
3.47.   Since 2017, exports of some kind s of wood and wood products (HS 44.01.11.00, 
HS 44.01.12.00 and HS 44.03), in total 26 tariff lines, are temporarily prohibited until 1 May 2019 
(Section 4.1.2).55 
3.48.   Quantitative restrictions on exports may be imposed  – in case of cr itical shortages of 
products essential to Montenegro, for the relief of consequences of such shortages , or in order to 
protect exhaustible natural resources  – if export restrictions are applied simultaneously with 
restrictions on domestic production or con sumption. In 2014, Montenegro adopted the 
classification of goods for export into the following regimes: free exports (LB) and licensed exports 
(D). Non -automatic export licences are required for the following commodities: drugs, medicines, 
blood and pharm aceutical products, precious metals, explosives, arms, military equipment, and 
national art treasures. The requirement for a non -automatic licence for the exportation of ferrous 
and non -ferrous scrap metal was abolished on 23 December 2011.56 Export licence  fees are 
contained in the Law on Administrative Fees (Section 3.1.4).  
3.49.   Montenegro applied for membership in the Wassenaar Arrangement on Export Controls for 
Conventional Arms and Dual -Use Goods and Technologies in September 2015 and has provided 
                                                
53 World Bank (2016), Doing Business 2017: Equal Opportunity for All – Economy Profile 2017 
Montenegro , Washington, D.C. Viewed at: 
http://www.doingbusiness.org/~/media/wbg/doingbusiness/documents/profiles/country/mne.pdf ; World Bank 
(2013), Doing Business 2014 Economy Profile: Montenegro , 29 October, Washington, D.C. Viewed at: 
https://openknowledge.worldbank.org/bitstream/handle/10986/18469/829130Monteneg0Box0382100B00PUBL
IC0.pdf?sequence=1&isAllowed=y . 
54 WTO document WT/ACC/CGR/38, WT/MIN(11)/7, 5 December 2011.  
55 Decision on Temporary Limitation of Export of Certain Wood Articles (OG No. 23/17), and the National 
Control List for Export and Import (OG Nos. 22/14, 38/15, 29/16, 62/16 and 24/17).  
56 WTO do cument WT/ACC/CGR/38, WT/MIN(11)/7, 5 December 2011.  WT/TPR/S/369 • Montenegro  
 
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  relevant information as requested.57 According to the authorities, the arrangement plays a 
significant role in contributing to regional and international security and stability.  
3.2.4   Export support and promotion  
3.2.4.1   Subsidies  
3.50.   Montenegro provides no export subsidies to agric ultural or other products.58  
3.2.4.2   Duty and tax concessions  
3.51.   Montenegro allows for the reimbursement of customs duties and VAT on inputs used in the 
manufacture of export goods. The Customs Law provides for the repayment/reimbursement to the 
exporter of the amoun t of customs duties paid on inputs used for exported goods , or their write-off 
(repayment system). Exports are VAT -free. Based on input invoices, the amount of VAT  paid on 
inputs used for export items is refunded to taxpayers who mainly export goods (incom e from 
abroad more than 51% of total revenues) and indicat e a surplus of input VAT in more than 
three  successive VAT returns, within 30 days from the date of filing of the VAT return 
(Sections  3.3.1.1.2 and 3.3.1.2).59 No data from 2012 onwards on the amoun ts disbursed and the 
export value by main product category involved we re available from the authorities . 
3.2.4.3   Free-trade export zones  
3.52.   Since 2004, Montenegro has allowed for the operation of free zones and warehouses aimed 
at achieving significant results in exp ortation, employment, modern technolog y transfer, economic 
restructuring, etc. Their legal framework, which seems in line with EU legal standards, consists of 
the 2004 L aw on Free Zones  last amended in 2016 to restrict  tax benefits only to goods entering 
for processing or handling and introduce control of weapons and military equipment in free zones 
and warehouse s.60 Benefits for both domestic and foreign investors include: free import without 
customs duties, customs fees or value-added tax (VAT) ; storage in centives ; and simplified 
customs procedures.61 Licences or other possible foreign trade restrictions do not apply to foreign 
goods imported into free zones and warehouse s or to goods for export abroad. Goods leaving free 
zones or warehouse s to be brought into free circulation in Montenegro are subject to all import 
measures under the Law on Foreign Trade. The Port of Bar, established in 2000, is currently the 
only free trade zone in Montenegro. As at end -October 2017, there were 28 firms wit h a turnover 
of €9.7 billion employing 425 persons operating at the Port of Bar Free Zone , of which: 20 began  
their activity prior to 2012; 11 had their headquarters abroad; 18  operated in transshipment, 
                                                
57 European Commission (2016), Montenegro 2016 Report , Commission Staff Working Document 
SWD(2016) 360 final, 9 November, Brussels. Viewed at: https://ec.europa.eu/neighbourhood -
enlargement/sites/near/files/pdf/key_documents/2016/20161109_report_montenegro.pdf ; and online 
information. Viewed at: http://www.wassenaar.org/about -us/. 
58 WTO documents G/AG/N/MNE/4 , 13 February 2017 and G/AG/N/MNE/3, 23 April 2015.  
59 Articles 37 and 38 of the Law on VAT prescribe conditions for deduction of input VAT. Min istry of 
Economy (2017), Business Stimulating Programs , Podgorica. Viewed at: http://www.bizniszona.me/wp -
content/uploads/2017/06/Business -Stimul ating-Programs_brochure.pdf . 
60 Law on Free Zones (OG Nos. 42/04, 11/07, 76/08, 73/10, 40/11, and 40/16). Viewed at: 
http://www.minekon.gov.me/EN/WTO/LIBRARY/tg_actual _legislation/Free_zones ; Secretariat for Development 
Projects (undated), Investment Climate in Montenegro ; U.S. Department of Commerce (2017), Montenegro 
Country Commercial Guide 2016 . Viewed at: https://me.usembassy.gov/wp -
content/uploads/sites/250/2017/02/Montenegro_2016_CCG.pdf ; European Commission (2016), Montenegro 
2016 Report , Commission Staff Working Document SWD (2016) 360 final, 9 November, Brussel s. Viewed at: 
https://ec.europa.eu/neighbourhood -
enlargement/sites/near/files/pdf/key_documents/2016/20161109_report_monte negro.pdf . 
61 Complete equality has been guaranteed to foreign investors in reference to ownership rights, 
economic activity in the zone, transfer of profits and deposits, and investment security. Under Article 23 of the 
2004 L aw on Free Zones  users and zon e operators are not liable to profit tax. Upon its accession , Montenegro 
undertook that its free zones or free economic zones would be administered in compliance with WTO 
provisions, including those under the WTO TRIPS, TRIMs, and Subsidies and Countervail ing Measures  
Agreements, and that the right of firms to establish and operate in these zones would not be subject, inter alia,  
to export performance, trade balancing, or local content requirements. WTO document WT/ACC/CGR/38, 
WT/MIN(11)/7, 5 December 2011;  U.S. Department of Commerce (2017), Montenegro Country Commercial 
Guide 2016 . Viewed at: https://me.usembassy.gov/wp -
content/uploads/sites/250/2017/02/Mo ntenegro_2016_CCG.pdf . WT/TPR/S/369 • Montenegro  
 
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  storage and purchase and sale of goods; 5 supplied g oods to vessels and duty -free shops; 
1 supplied fuel to vessels; 1 engaged in storage, processing and trade of fertilizers; 1 ensured 
maintenance of the port information system;  and 1 provided berthing, unberthing, pilotage and 
towage of vessels. No data o n the amounts of forgone tax revenue relating to the free zone 's 
operations were available from the authorities .  
3.2.5   Export finance, insurance, and guarantees  
3.53.   No measures seem to be in place in this area. Regarding the regulatory framework on 
export credits, the Ministry of Finance in cooperation with the Investment and Development Fund 
of Montenegro (IDF) prepared a draft Law on Amendments to the IDF Act, which defines IDF 
responsibilities related to export credits. Both institutions are to adopt a regulation  on the 
modalities for issuing export credits , no later than one year after the day of entry into force of the 
new Law , which  would be harmonized with the relevant EU regulations. Public debate on the draft 
legislation concluded in August 2017 and , by end -November of the same year , it was  under 
parliamentary procedure. At the same time , the setting of export guarantees was under 
consideration.  
3.3  Measures Affecting Production and Trade  
3.3.1   Incentives  
3.3.1.1   Taxation  
3.3.1.1.1   Features  
3.54.   Total tax revenue as a share of GDP remains st able and relatively high (25.7% in 2016).62 
Since 2012, Montenegro's reliance on indirect taxes rose and their share in tax revenues remained 
high at 70% (Table  3.4). VAT remains the main indirect tax component, followed by excises. 
Following a drop in 2013 , taxes on international trade (i.e. customs duties)  accounted for 
2.3% -3.7% of total tax revenues; during the period 2013 -2016, taxes on international trade 
increased in value terms but their share as a percentage of total tax revenues decreased. Exports 
are generally exempt from indirect taxes.  
Table 3.4 Structure of direct and indirect tax revenue, 2012 -16 
  2012  2013  2014  2015  2016  
Total tax revenue (€ million)  786.0  863.5  950.1  925.6  1,012.8  
 (% of total  tax revenue)  
Direct taxes  23.9 20.7 20.7 20.8 21.6 
Personal income tax  14.0 14.4 14.4 14.7 15.8 
Corporate income tax  8.1 4.7 4.7 4.6 4.5 
Taxes on turnover of real estate  1.8 1.6 1.6 1.6 1.3 
Indirect taxes  68.1 71.0 71.2 70.2 69.9 
Value -added tax  45.1 49.7 52.4 49.4 49.4 
of which: on imports  28.9 30.7 32.8 29.3 30.9 
Excises  19.3 18.7 16.5 18.4 18.0 
of which: on imports  9.7 9.4 8.2 9.4 9.8 
Taxes on international trade 
(i.e. customs duties)  3.7 2.6 2.3 2.5 2.4 
Local government taxes  6.5 7.7 7.5 8.2 7.6 
Other taxes  1.5 0.6 0.6 0.8 0.9 
Source:  Ministry of Finance of Montenegro. Viewed at: http://www.mif.gov.me/organizacija/sektor -za-
ekonomsku -politiku -i-razvoj/176123/SAOPsTENJE -GDDS -tabela -sa-fiskalnim -i-podacima -o-javnom -
dugu.html . 
                                                
62 According to the IMF, in 2016 taxes accounted for 62.1% of total government revenue (62.2% in 
2012); the rest consisted of social security contributions (27.2%), non -tax revenues (11.4%), and grants 
(0.7%). IMF (2017), Montenegro - 2017 Article IV Consultation —Press Release; Staff Report; and Statement 
by the Executive Director for Montenegro,  IMF Country Report No. 17/276, 13 September, Washington, D.C. 
Viewed at: https://www.imf.org/en/Publications/CR/Issues/2017/09/14/Montenegro -2017-Article -IV-
Consultation -Press -Release -Staff-Report -and-Statement -by-the-45244 . Online data viewed at: 
http://www.mif.gov.me/organizacija/sektor -za-ekonomsku -politiku -i-razvoj/176123/SAOPsTENJE -GDDS -
tabela -sa-fiskalnim -i-podacima -o-javnom -dugu.html . WT/TPR/S/369 • Montenegro  
 
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  3.3.1.1.2   Indirect taxation  
3.55.   Montenegro's indirect tax structure comprises a broad -based value -added tax (VAT), excise 
taxes and a coffee tax all applied under the same rates and conditions to domestic and foreign 
goods and services according to the authorities (Tables 3.5 and 3.6). The general VAT rate on 
goods and services was raised to 21% on 1 January 2018, previously at 19% (2013 -17) and 
17%.63 The reduced rates of zero and 7%, inter alia  covering basic food produ cts, remain 
unchanged (Table 3.5). VAT exemptions cover, inter alia , services of general interest and other 
services such as insurance and reinsurance services, sale of real estate, banking and financial 
services and services of games of chance and enterta ining games. The VAT valuation basis is the 
c.i.f. price plus customs duties and other taxes, wherever applicable. Exports are zero -rated for 
VAT.  
Table 3.5 Value -added tax in Montenegro, 2018  
Object of taxation  Rate 
I. Sale of all goods and services and imports of all goods (excluding those for which 
paying of reduced or zero VAT rate is prescribed)  21%  
II. Sale of goods and services and imports of goods:  7% 
Basic products for human consumption (milk, bread, oil and sugar)   
Medicines (including veterinary medicine); orthotic and prosthetic tools   
Textbooks and teaching aids; books, monographic and serial publications; daily and periodic press   
Services of accommodation in hotels, motels, tourist settlements, boarding houses, leisure, camps 
and villas   
Potable water, except for bottled water   
Services of public transportation of passengers and their personal baggage   
Services of public hygiene   
Funeral services and goods related to those services   
Copyrights and services in the area of education, literature and art; copyright in the areas science 
and art products, collections and antiques   
Services regarding the use of sports facilities for non -profit purposes   
Services provided in marinas   
Fodder, fertilizer, devices for plant protection, reproduction seeds, planting material and breeding 
stock  
III. Sale of goods and services and imports of goods:  Zero 
Goods that have been exported from Montenegro by the seller or exported on  his behalf by 
another person   
Sale of services, including transport and other ancillary services   
Goods exported from Montenegro by a purchaser that is another person on behalf of the 
purchaser, who has not established a business in Montenegro, except for goods intended to sale 
private watercrafts, aircrafts means of transport for private use   
Services performed on goods imported in Montenegro and exported by a person who has provided 
the service or by a client if he has not established the headquarter s, business unit, i.e. a 
permanent or usual residence in Montenegro   
Sale of services provided by representatives or other intermediaries in the name and for the 
account of another person, provided that those services are a part of services listed in the 
relevant legislation  or services provided outside Montenegro. Exemption does not relate to travel 
agents that are providing services in the name and for the account of travellers outside 
Montenegro   
Sale of fuel and other necessary goods used for supplyin g  
Vessels for open -sea sailing which transport passengers for consideration that are intended for 
performing commercial and industrial activities; sea rescue and assistance vessels   
Military vessels leaving Montenegro, whose  destinations are foreign piers, that is anchorages   
Goods and services used in international air and maritime traffic   
Goods and services intended for   
The official purposes of diplomatic and consular representatives   
The official purposes of international organizations, if provided by an international treaty   
                                                
63 In addition, in an effort to harmonize with European Union rules in this area, a series of exceptions 
were specified to the applicable general rule that services are taxable ac cording to the place of a service 
provider irrespective of supplies to VAT payers (so -called B2B supplies) and to entities that are not VAT payers 
(so-called B2C supplies). Law on Amendments to the Montenegrin VAT Law passed by the Parliament on 
6 July 2017 and entered into force the following month. Online information. Viewed at: 
https://home.kpmg.com/me/en/home/insights/2017/07/b ill-of-the-law-on-amendments -to-the-montenegrin -
vat-law.html ; https://home.kpmg.com ; http://www.mif.gov.me/biblioteka/zakoni ; and 
https://www.pwc.at/de/newsletter/cee -spotlight/serbien -montenegro/2013/9 -13-tax-alert-increase -of-vat-in-
montenegro.pdf . WT/TPR/S/369 • Montenegro  
 
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  Object of taxation  Rate 
For personal needs of foreign staff of diplomatic and consular representatives including their 
family members   
For personal needs of foreign staff of international organizations including members of their 
families, if provided by international treaties   
Medicines and medical devices, determined by the list of medicines, i.e. medical devices 
prescribed and issued at the expense of the Health Insurance Fund of the Republic   
Goods and services used for exploration of petroleum drills on the open sea   
Sale of goods and services for construction and equipping of five or more star hospitality industry 
facilities, electricity generation facilities with nameplate capacity higher than 10  MW and facilities 
for production of foodstuffs classified in section C group 10 of the Law on classification of Activities 
(OG No. 18/11) whose investment value exceeds €500,000   
Deliveries of goods to the free zone, free and customs warehouses and deliv eries of goods within 
a free zone, free and customs warehouses   
Delivery of goods or services when it is envisaged by international agreements or contracts on 
donations that taxes shall not be paid from the received funds   
Sale of goods or services carried out in accordance with a credit or loan contract concluded 
between Montenegro and an international financial organization or another State as well as 
between a third party and an international financial organization or ano ther State where 
Montenegro acts as a guarantor in the part being financed from received monetary proceeds, 
when such a contract envisages that taxes shall not be paid from monetary proceeds     
IV. Services of general interest and other services:  Exempt  
Public postal services, as well as sale of goods directly related with these   
Health services and care and delivery of goods including sale of human organs, blood and human 
milk, performed in accordance with the relevant legislation   
Social security services performed in accordance with the relevant legislation   
Services in education performed in accordance with the relevant legislation   
Services related to culture, as defined in the relevant legislation   
Services related to sport and sport education perform ed by  non-profit organizations (unions, 
associations, etc.)   
Services of public radio broadcasting service, except for services of commercial character   
Religious services and sale of goods directly linked to religious services performed  by religious 
institutions, in accordance with the regulations related to those communities   
Services provided by non -government organizations established in accordance with the 
regulations governing the activities of these organizations, unless there is probability that such 
exemption would lead to a distortion of competition   
Insurance and reinsurance services, including services provided by insurance brokers and agents   
Sale of real estate, except the first transfer of the ownership rights , that is the rights to dispose of 
newly -constructed immovable property   
Services of leasing or subletting of residential houses, apartments and permanent residential 
premises for longer than 60 days and lease of agricultural land or forests, which are registered in 
land books   
Banking and financial services, such as: credits, guarantees, deposits, savings, bank accounts, 
payment transactions, transfers, executing due liabilities, cashing cheques or other financial 
instruments, except for recovery of de bts and factoring; transactions, including the issuing of 
bank notes and coins, which are legal tender in any country, excluding collector items 
(numismatic collection); bank notes not in use as legal tender, and coins with a numismatic value; 
trading in s hares , that is other forms of equity interests in companies, bonds and other securities, 
including their issuance, except for the safekeeping of securities; and investment fund 
management   
Current postage stamps, administrative and court and tax stamps   
Sale of gold and other precious metals by the Central Bank of Montenegro   
Services of gambling   
Source:  Information provided by the authorities.  
3.56.   Excise taxes apply to alcohol and alcoholic beverages, tobacco products, mineral oils, 
mineral oil derivatives and their substitutes, and since 2012 carbonated water (Table 3.6). The 
Law on Excise was last amended in August 2017 to consolidate public finances and to harmonize 
the excise policy with the relevant EU policy.64 This amendment introduced a gr adual increase of 
the excise on cigarettes based on an "excise duty calendar".65 
                                                
64 Online information. Viewed at : 
http://webcache.googleusercontent.com/search?q=cache:Z2s0vez_kVcJ:www.gov. me/ResourceManager/FileD
ownload.aspx%3FrId%3D269867%26rType%3D2+&cd=1&hl=en&ct=clnk&gl=ch  and 
https://home.kpmg.com/me/e n/home/insights/2017/06/increase -in-the-general -vat-rate-and-excise -duty-
rates-in-monten.html . 
65 Economic Reform Programme for Montenegro 2017 –2019. WT/TPR/S/369 • Montenegro  
 
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  Table 3.6 Excise tax rates, 2017 -18 
 Rates  
Alcohol and alcoholic beverages  
 €5 "per content" of alcohol by volume per hectolitre  of beer  
€0 (nil) per hectolitre of still wine  
€35 per hectolitre of sparkling wine  
€0 (nil) per hectolitre of other non -sparkling fermented beverages  
€35 per hectolitre of other sparkling fermented beverages  
€100 per hectolitre of intermediate alcoholic beverages; and  
€850 per hectolitre of ethyl alcohol  
- from 1 January 2018 to 31 December 2018 - €1,050;  
- from 1 January 2019 to 31 December 2019 - €1,250; and  
- from 1 January 2020 - €1,500.  
Tobacco products  Specific component of excise tax on cigarettes (1,000 pieces):  
 
From 1 November 2014 until 31 March 2015 – €19; 
From 1 April 2015 until 31 March 2016 – €20; 
From 1 April 2016 until 31 March 2017 – €22; 
From 1 April 2017 until 31 July 2017 – €24; 
From 1 Aug ust 2017 until 31 December 2017 – €30; 
From 1 January 2018 until 31 December 2018 – €40; and  
From 1 January 2019 - €50. 
 
Ad valorem  component of excise tax on cigarettes (retail price):  
 
From 1 November 2014 until 31 March 2015 – 35% 
From 1 April 2015 until 31 March 2016 – 34% 
From 1 April 2016 until 31 March 2017 – 33% 
From 1 April 2017 – 32% 
 
Other tobacco goods, i.e. cigars and cigarillos, fine -cut tobacco, and 
other tobacco for smoking:  
 
1) For cigars and cigarillos - €25; 
2) For fine -cut tobacco - €54; 
3) For other tobacco for smoking - €25. 
 
Heat-not-burn tobacco:  
The excise tax for the heat -not-burn tobacco is paid per kilogram of 
tobacco mixture at the amount of 40% of the minimum excise tax on 
1,000 pieces of cigarettes set for the category of  the weighted average 
retail price of cigarettes.  
 
Liquids for refilling electronic cigarettes (From 1 august 2017):  
The excise tax amount for the liquids for refilling electronic cigarettes is 
€0.9/millilitre.  
 
Other tobacco goods , i.e. cigars and cigaril los, fine -cut tobacco, and 
other tobacco for smoking: €25 per kg  
Mineral oils, mineral oil 
derivatives and their substitutes  Leaded petrol (HS2710 11 31 00, 2710 11 51 10, 2710 11 51 90 and 
2710 11 59 00), €554 per 1,000 litres  
Unleaded petrol (HS 2710 11  31 00, 2710 11 41 00, 2710 11 45 00 
and 2710 11 49 00), €549 per 1,000 litres  
Kerosene (HS 2710 19 21 00 and 2710 19 25 00) used:  
- as motor fuel, €330 per 1,000 litres  
- for heating, €89.7 per 1,000 litres  
Gas oils (HS 2710 19 41 to 2710 19 49) used:  
- as motor fuel, €440 per 1,000 litres  
- as motor fuel for industrial and commercial purposes, €259 per 
1,000 litres  
- for execution of works for the Bar -Boljare Highway Project, €169 per 
1,000 litres  
- for heating, €207 per 1,000 litres  
Natural gas (HS 2711  11 and 2711 21) used as motor fuel, industrial 
and commercial purposes, and for heating: zero  
Fuel oil (HS 2710 19 61 00 to 2710 19 69 00), €19.50 per 1,000  kg 
 
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   Rates  
 Liquid petroleum gas (HS 2711 12 11 00 to 2711 19 00 00) used:  
- as motor fuel, €125 per  1,000 kg  
- as motor fuel for industrial and commercial purposes, €58.40 per 
1,000 kg  
- for heating, €26 per 1,000 kg  
Bio fuel, €350 per 1,000 litres  
Coal Excise tax on coal per gross gigajoule of caloric value:  
- from 1 August 2017 until 31 December 2018  - €0; 
- from 1 January 2019 until 31 December 2019 - €0.15; and  
- from 1 January 2020 - € 0.30.  
Carbonated water with added 
sugar or other sweeteners or 
aromatization agents  Excise tax per hectolitre of carbonated water:  
 
- until 31 December 2017 - €10.00;  
- from 1 January 2018 until 31 December 2018 - €20; 
- from 1 January 2019 until 31 December 2019 - €30; 
- from 1 January 2020 - €40. 
Source:  Ministry of Finance.  
3.57.   To ensure the same tax treatment to both imported coffee and coffee processed in 
Montenegro, since 2015, a tax on coffee has been levied at rates ranging from €0.80/kg to 
€1.30/kg, depending on the type of the coffee, as well as on products and beverages that contain 
coffee at a rate of €2.50 for 1  kg of net coffee contained in the fin al product.66 Between 2012 and 
2015, only imports of coffee and coffee products were subject to a 20% excise tax on the value 
determined by the Customs Administration.  
3.58.   Central Government taxes on the use of passenger motor vehicles, vessels, aircrafts and 
airplanes as well as transactions of used motor vehicles, vessels, aircrafts and airplanes are also in 
place.67 Their rates range from €25 to €1,500 for motor vehicles, €10 to €300 for motorbikes, 
€5 to €3,000 for vessels and from €1,500 to €5,000 for aircra fts and flying objects.  
3.59.   Municipalities levy different taxes and fees.68 They consist of: a real estate tax 
(0.25% -1%); a 13% surtax on assessed personal income (15% for the capital (Podgorica) and old 
royal capital (Cetinje)) (Section 3.3.1.1.3); local admi nistrative fees (in accordance with the Law 
on Administrative Fees (Section 3.1.4)); local utility fees (in accordance with the Law on Local 
Communal Taxes); fees for municipal utility equipment (Law on Spatial Planning and Construction 
of Facilities); and  fees for the use of municipal roads (Law on Roads).  
3.3.1.1.3   Direct taxation  
3.60.   Personal income tax and corporation tax remain the third - and fourth -largest single sources 
of revenue after VAT and excise tax (Table 3.4). Personal income is subject to a withholding t ax at 
a flat rate of 9%.69 The amount of gross salary exceeding the average monthly gross salary in 
Montenegro for the previous year (€751 in 2016) is subject to an 11% income tax. In 2013, the 
Personal Income Tax Law was amended to introduce temporarily a higher tax rate of 15% on gross 
                                                
66 Between 1 January 2012 and 28 February 2015, an excise tax affected coffee and processed coffee 
imports o nly. Montenegro is not a coffee producing country and the authorities indicated that this measure was 
for revenue purposes only. Law on Tax on Coffee published at the OG No. 8 of 27 February 2015. Viewed at: 
http://www.sluzbenilist.me/PravniAktDetalji.aspx?tag=%7B09059B1D -C756-427B-AA74 -C12C3D754421%7D ; 
online information. Viewed at: http://taxsummaries.pwc.com/ID/Montenegro -Corporate -Other -taxes ; and 
information provided by the authorities.  
67 Online information. Viewed at: https://www.eu.m e/mn/16/16 -prezentacije -s-bilateralnog -skrininga . 
68 Municipalities own taxation accounts for 43% of local governments' financial resources; they rely 
primarily on property tax (70%) and surtax on personal income tax (30%). The Law on Financing of Local 
Self-Government (OG Nos. 42/03, 44/03, 5/08, 74/10, 1/15, 78/15, 3/16 and 30/17) regulates sources of 
funds, the manner of financial equalization and usage of conditional subsidies, as well as the manner of 
financing the activities of local self -governments ( municipalities, Capital and Old Royal Capital), and provides 
for municipal taxes, as well as the distribution of common revenues between the State and local 
self-government. Online information. Viewed at: https://www.eu.me/mn/16/16 -prezentacije -s-bilateralnog -
skrininga , http://www.oecd.org/regional/regional -policy/profile -Montenegro.pdf , and 
http://taxsummaries.pwc.com/ID/Montenegro -Individual -Taxes -on-personal -income . 
69 Online information. Viewed at: http://taxsummaries.pwc.com/ID/Montenegro -Corporate -Other -taxes . WT/TPR/S/369 • Montenegro  
 
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  personal income above €720 per month until end -2015.70 Resident taxpayers are taxed on income 
gained in and outside of Montenegro. Non -resident taxpayers are taxed on their 
Montenegrin -sourced income or income attributed to t heir Montenegrin permanent establishment. 
Non-residents are also subject to withholding tax on income sourced in Montenegro.  
3.61.   Entities operating in Montenegro are  also subject to a 9% corporate profit tax (CPT).71 The 
Law on Corporate Profit Tax was amended  in 2013 regarding tax exemptions on corporate and 
personal income for activities in less developed municipalities to further comply with state aid 
rules.72 Its 2016 amendments, which came into effect on 1  January 2017, referred to tax 
deductibility of cert ain expenses, submission of tax returns, taxation of non -residents and 
penalties.73 For e nterprises/entrepreneurs commencing activities in less developed municipalities , 
the CPT for the first 8 years is reduced by 100% (Section 3.3.1.2, Table 3.7); in addit ion, a 
taxpayer in the same areas employing a person on the basis of a contract for an indefinite period , 
unlimited period or for at least 5 years is exempt from payment of the assessed and withheld 
personal income tax on wages of such an employee for a pe riod of 4  years from the day of 
commencement of employment.74  
3.62.   Property tax at rates ranging from 0.25% to 1% on the market value of assets as of 
1 January of each year is charged to legal entities that own or have user rights over real estate 
located in Montenegro. A 3% transfer tax is levied on the market value of the acquired real estate 
property.75  
3.3.1.2   Production assistance  
3.63.   Montenegro maintains general and industry -specific tax and non -tax incentives, mostly 
implemented by the Ministry of Finance, the MEK and the Investment Development Fund of 
Montenegro (IDF),  to businesses regardless of their origin. It has notified several direct support 
programmes to the WTO Committee on Subsidies and Countervailing Measures (Section 2.3.1); its 
next notification in thi s area covering support in 2015 and 2016 is to be submitted in the course of 
2018. Its first and only notification, in May 2015, indicated that there were 8 and 10 subsidy 
schemes in 2013 and 2014, respectively, most of which were in place both years.76 Grants, tax 
concessions, guarantees, concessional loans, debt write off and rescheduling were used to assist a 
range of micro, small and medium -sized enterprises (MSMEs)  and large companies  in job creation, 
competitiveness boosting, regional development (Brow n Coal Mines), firm restructuring (Enterprise 
Montavar Metalac Ltd. Nikšić), cluster development, and agricultural, fisheries and aquaculture 
activities. Many of these schemes were of one -year duration or until completion of a project. In 
2013 and 2014, th ese schemes involved an estimated funding of €172.5 million , of which 46.4% 
was due to the 2015 Annual Activity Plan of the JSC Investment and Development Fund of 
Montenegro (IDF), 31.9% to the 2014 Annual Activity Plan of the JSC Investment and 
Developmen t Fund of Montenegro (IDF), and 20.6% to the Annual Activity Plan of the Investment 
and Development Fund (IDF) for 2013 – IDF's Medium -term Activity Programme, 2013 Annual 
Plan. 
3.64.   As at 2017, Montenegro's tax incentives supported activities undertaken in fre e zones, 
business zones and economically less -developed municipalities (Section 3.2.4.3, Table 3.7); the 
latter incentives exclude certain activities and involve corporate profit tax breaks. In 2016, the 
                                                
70 Online information. Viewed at: https://assets.kpmg.com/content/dam/kpmg/me/pdf/2013/02/me -
2013-february -kpmg -tax-alert-montenegrin -personal -income -tax-law-amended.pdf . 
71 Articles 7 to 25 of the Corporate Profit Tax define its tax base. Viewed at: 
http://www.mif.gov.me/en/library/zakoni?alphabet=lat . 
72 Online information. Viewed at: https://eeas.europa .eu/sites/eeas/files/20141008 -montenegro -
progress -report_en.pdf . 
73 Online information. Viewed at: http://taxsummaries.pwc.com/ID/Montenegro -Corporate -Significant -
developments . 
74 Article 31 of the Law on Corporate Profit Tax and Articles 32 to 32b of the Law on Personal Income 
Tax last amended in 2016. Viewed at: http://www.mif.gov.me/en/library/zak oni?alphabet=lat . 
75 Law on Tax on Immovable Property Transactions. Viewed at: 
http://www.mif.gov.me/en/library/zakoni?alphabet=lat ; and online information. Viewed at: 
http://www.pkf.com/media/10026021/montenegro -tax-guide -2015-16.pdf . 
76 Upon its WTO accession , Montenegro undertook to not grant or maintain any export or 
import -substitution subsidies and to pr ovide a subsidy notification. WTO documents WT/ACC/CGR/38, 
WT/MIN(11)/7, 5 December 2011, and G/SCM/N/284/MNE, 22 May 2015.  WT/TPR/S/369 • Montenegro  
 
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  corporate profit tax breaks in 16 less -developed mun icipalities granted to 13 firms with virtually no 
involvement in export operations ranged from €500 to €30,000 and totalled €75,146; they 
inter alia involved repair of communication equipment, manufacture of builders' joinery, printing, 
legal jobs, field t esting by drilling and sounding, artistic creativity, packaging, funeral and related 
activities, health and beauty club s, and hotels and similar accommodation services.77 No data on 
all forgone tax revenue resulting from all incentives as well as the main b eneficiaries (i.e. type of 
activities/firms) from 2012 onwards was available from the authorities .  
3.65.   Non-tax incentives for several activities , in the form of grants/funding, concessional loans or 
other measures , were in place under several programmes to at tract direct investment, support 
activities in business zones, support cluster development, and promote entrepreneurship 
development in 2017 (Table 3.7, Sections 2.4.1 and 4.2).78 Local self -government units are 
obliged to adopt the Decision on the establis hment of a business zone in line with the provisions of 
the Decree on Business Zones by 21 June 2018; so far, this has been  done by the Municipality of 
Mojkovac (where there is a greenfield location and no business es) and the Municipality of Berane 
(where there is  one company and Regional Business Centre). Subsequently , the Ministry of 
Economy is to create a single register of all the economic entities operating within the zone s in 
accordance with the provisions of the Decree on Business Zones. Assistance t o MSMEs , as defined 
under the D ecree on Promoting Direct Investment  (Table 3.7) and all programmes implemented by 
the Ministry of Economy , was, inter alia,  provided to promote regional and local competitiveness 
through alignment with international standard s of operation, innovation enhanc ement  (see below) 
and mentoring.79 MSMEs represent 99% of total firms and generate 75% of value added as well as 
82% of employment.80 Access to finance is one of the major challenges for SMEs and the IDF 
channels the largest portion of public sector support for SMEs through credit lines for start -ups and 
financing programmes. The strategic priority activities eligible for co -financing u nder the Cluster 
Development Programme in Montenegro 2017 -2020 include wood processing, some food 
processing activities, and the tourism and hospitality industry.81 The IDF finances  the sectors of 
production, wood processing, services (including  the IT sect or), agriculture and food production, 
and tourism through a credit line for cluster development. Since mid -2016, support has been 
provided for modernization of processing, the most important and largest industry sector, in which 
70% of the companies operat e (Table 3.7, Section 4.2).82 Some activities (e.g. primary 
agricultural production, production of synthetic fibres, transport, gambling, trade, primary 
production of coal and steel, electricity, oil and gas generation, tobacco and tobacco products, 
genetic ally modified organisms and hazardous waste) are excluded from the tax relief and non -tax 
incentives  for innovation enhanc ement  in SMEs. No data on the total budgetary cost of all these 
incentive schemes other than those contained in Table 3.7 were availab le from the authorities .  
                                                
77 Montenegro's municipalities are classified as less -developed in line with guidelines and methodology 
contained at the Rulebook on the use of tax exemption on the basis of corporate profit tax and income tax of 
natural persons in economically underdeveloped municipalities ( http://www.mif.gov.me/biblioteka/pravilnici ). 
The Lis t of levels of development of local self -government units for the period 2013 – 2015 (last update); these 
municipalities are found in the Annex of the Rulebook on setting up the list of the index of development of local 
self-government units.  
78 In addition  to the reliefs available only in the Business Zones (Table 3.7), the investors operating on 
these sites have access to other national - and local -level reliefs, such as subsidies under the Decree on 
Promoting Direct Investment , IDF loans and similar support programmes, all in line with state aid rules. As of 
August 2017, business zones of local importance were established in the municipalities of Berane, Bijelo Polje, 
Kolašin, Mojkovac, Cetinje, Nikšić, Podgorica, Ulcinj and Ro žaje. More information on the incentive schemes is 
also available in Secretariat for Development Projects (undated), Investment Climate in Montenegro .  
79 The model of provision of SME services has been expanded – introduction of the institution of mentors 
in the format of direct work with an enterprise, problem solving and planning of future business activities. A 
total number of 13 enterprises received mentoring services in the period from July to November 2014. In 
March 2015, 15 companies in total, from P odgorica, Bar, Cetinje, Nikšić and Bijelo Polje, were beneficiaries of 
mentoring services. Results of training needs analysis for micro and small enterprises, including artisans and 
entrepreneurs, were published in June 2015 by the Directorate for Developm ent of SMEs and SEECEL  
(www.nasme.me ). 
80 European Commission (2016), Montenegro 2016 Report , Commission Staff Working Document SWD 
(2016) 360 final, 9 November, Brussels. Viewed at: https://ec.europa.eu/neighbourhood -
enlargement/sites/near/files/pdf/key_documents/2016/20161109_report_montenegro.pdf . 
81 Secretariat for Development Projects (undated), Investment Climate in Montenegro . 
82 Government of Montenegro (2017), Economic Reform Programme for Montenegro 2017 –2019, 
January.  WT/TPR/S/369 • Montenegro  
 
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  Table 3.7 Main domestic support measures, 2012 -18 
INCENTIVES  
1 TAX INCENTIVES  
Tax Reliefs  
(introduced by amendments to the Law on Corporate Income Tax and the Law on Personal Income Tax in 
2013 and still ongoing)  
 
o For newly established legal entities in economically less -developed municipalities for the 
first eight years of operation : i) such entities do not pay corporate income tax, ii) taxes on the 
taxpayer's personal income  are reduced by 100%, and iii) tax relief cannot exceed €200,000. These tax 
exemptions do not apply to taxpayers operating in the primary production of agricultural products, 
transport or shipyards, fisheries and steel.  
o Where the amount of tax liability (o utput tax) in the VAT period is less than the amount of input VAT 
which may be deducted by the taxpayer in the same VAT period, the difference is recognized as a tax 
credit for the following VAT period, or refunded upon request within 60 days of the date o f filing the 
VAT return.  
If the taxpayer's deadline for the payment of other taxes has expired, the difference by virtue of VAT is 
reduced by the amount of the tax debt.  
2 NON -TAX INCENTIVES    
 Incentives/  
requirements /measures  Budgeted 
amounts  
a) GENERAL    
i. The Decree  on Promoting Direct Investment  
 
(Decree  on Promoting Direct Investment, 30 December 2015, OG No. 80/15)  2015:  .. 
2016: €681,333  
2017:  €1,300,000  
2018: €1,200,000  
Incentivesa o €3,000 -€10,000b per newly employed personc 
o If implemented in the capital city or in the 
southern region - minimum investment value is 
€500,000 and at least 20 new jobs must be 
created within three years of the date of 
concluding the agreement on the use of funds.  
o If implemented in the central regi on (excluding 
the capital city) and the northern region – 
minimum investment value is €250,000 and at 
least 10 new jobs must be created within three 
years of the date of concluding the agreement on 
the use of funds  
o For capital investments exceeding €10 million 
and job creation for at least 50 new employees, 
the incentives can be awarded  of up to 17% of 
the investment project's total value without 
conducting a "scoring"  procedure in accordance 
with award criteria and methodology  
o Reimbursement for infr astructure incurred for 
purposes of the investment project 
implementation.   
Requirements  
 o Screening criteria:  
o references of the business entity ; 
o extent of participation of other business entities 
from Montenegro during the implementation and 
after the completion of the investment project;  
o value of the investment project ;  
o effects of the investment project on research and 
development, human resources, environment 
and regional development;  
o volume of international turnover;  
o economic effects of the investme nt project;  
o investment project impacts on the regional 
development;  
o letter of intent from the local self -government 
unit in the territory of which the business entity 
intends to invest. Investment projects in the 
manufacturing and services sectors (i.e. 
excluding primary agricultural production, 
production of synthetic fibres, transport, games 
of chance, trade, primary production of coal and 
steel, production of electricity, oil and gas  WT/TPR/S/369 • Montenegro  
 
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  INCENTIVES  
generation, tobacco and tobacco products, 
weapons and ammunition, genet ically modified 
organisms and hazardous waste).  
o The decision on the incentives to be awarded is 
made by the Government of Montenegro;  
o Beneficiary of funds conclude s the direct investment 
incentive agreement with Government of 
Montenegro;  
o Awarded funds shal l be disbursed in three equal 
instalments;  
o Instalments must be backed up with bank 
guarantees.  
ii. Business Zones Development Projectd  
 
The implementation of the project started in 2012 with the adoption of the Business 
Development Promotion Program me, legally regulated in 2016 by the adoption of the 
Decree on Business Zones  
 2015e: €81,000  
2016e: €112,000  
2017e: €100,000  
Incentives  o For persons employed in the business zone , the 
firm is exempt (up to five years from the starting 
day of person's employment) from:  
o contributions for compulsory social insurance on 
earnings (contributions for pension and 
disability insurance, health insurance and 
unemployment insurance) and contri butions to 
the Labour Fund; and  
o tax on personal income.  
o Local government units (LGUs) provide additional 
incentives such as: favourable prices of land 
lease/purchase, exemptions from or reduction of 
utility fees, fees for provision of utility connections, 
reduced tax rates on real estate, exemptions from 
surtax on personal income and one stop shop.  
o The user of the business zone is entitled to other 
benefits – i.e. state aid, provided that together 
these benefits do not exceed the maximum 
allowable aid inten sity of 60% for medium -sized 
enterprises and 70% for small enterprises.f  
iii. Cluster Development Fostering Program me 
 
Programme for the period 2012 -2016 and continuation for the period 2017 -2020 2012: €40,000  
2013: €50,000  
2014:  €50,000  
2015:  €50,000  
2016:  €50,000  
2017:  €100,000  
2018:  €150,000  
Incentives  o Funds from the programme can be used to cover:  
o costs of investment into tangible and intangible 
assets (excluding IT equipment and transport 
equipment) up to 50% (increased by 15% to 
clusters from less developed LGUsg); and  
o operating costs – up to 50% (increased by 15% 
to clusters from less -developed L GUs). 
Personnel costs and administrative expenses 
(including overhead costs) are considered as 
justified operating costs.  
o Support approved by the Ministry of Economy 
cannot exceed 50% or 65 % of the value of the 
project – up to €15,000 (excluding VAT) per 
project.   
iv. Entrepreneurship Development Support Program me 
 
The implementation of the programme started in 2015 and was finalized in 2016 ( two 
public calls). New public call was published in 2017 and its realization is in progress.  
 2015-2016: 
€1,000,000  
2017-2018: 
€1,000,000  WT/TPR/S/369 • Montenegro  
 
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  INCENTIVES  
Incentives  o Investment Development Fund of Montenegro 
provides loans to improve conditions for 
development of entrepreneurship:  
o up to €50,000 for the following target groups:  
• small and medium enterprises that are 
100% privately owned, which are 
established and operate d in accordance 
with the Companies Act (OG No. 06/02), 
up to 1 year from the date of filing the 
application ; 
• future entrepreneurs who want to 
develop entrepreneurial ideas ; 
• women who want to ensure their 
existence and independence by 
establishing their own business ; 
• persons who are on the register of the 
Employment Service ; 
• persons with disabilities  
o annual interest rate below 2.5% with the 
proportional interest calculation method. The 
proportional inte rest rate on an annual basis is 
reduced to a monthly interest rate. Repayments 
are planned throughout equal monthly 
annuities.  
o annual interest rate of 2% is applied, subject to 
the proportional method of interest calculation 
for entities implementing proje cts in the 
municipalities of the northern region and in 
municipalities that are below the average 
development level, i.e. projects that are 
implemented in municipalities in the northern 
region of Montenegro and in less developed 
cities (Cetinje, Niksic and  Ulcinj)  
o with repayment period of up to 12 years 
(including grace period of up to 4 years)   
b) SMEs    
i. Regional and Local Competitiveness Boosting Program me through 
alignment with the requirements of International Standards of 
Operations  
 
Programme for period 2014 -2016 and continuation for period 2017 -2020 
 2014: €50,000  
2015: €100,000  
2016: €100,000  
2017: €100,000  
2018: €150,000  
(plan)  
 
Incentives  o Reimbursement of SMEs costs of accreditation for 
the series of standards MEST EN ISO/IEC 17000 
(17025, 17020, 17021, 17065, 17024) if the 
accreditation is received from the Accreditation 
Body of Montenegro;  
o reimbursement of SMEs implementation costs of 
standards/certification/recertification for: the series 
MEST EN ISO 9000; MEST EN 18000; MEST EN ISO 
14000 ; 
o up to 70% of eligible costs for entrepreneurs and  
small enterprises, and up to 60% of eligible costs 
for medium -sized enterprises, up to €5,000 
(excluding VAT) per applicant; the remaining 30% 
or 40% of the total investment is financed by the 
applicant i ndependently.   
ii. Innovation Enhancing in Small and Medium -Sized Enterprises 
Program me  
 
Based on the annual working programme of the Ministry of Finance and in line with the 
Action Plan for Implementation of the Industrial Policy until 2020; this programme 
needs to be adopted by the Government and its timeframe is one year.  
 2015: €30,000  
2016: €30,000  
2017: €30,000  
2018: ..  
 WT/TPR/S/369 • Montenegro  
 
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  INCENTIVES  
Incentives  o Financial support of up to €3,500 per applicant 
(€2,500 in 2015 and 2016)  for the introduction of 
innovations such as:  
o product innovation  
o business process innovation  
o organization innovation  
o marketing innovation.  
o Companies are to fund 100% of the costs of 
external consultant for the implementation of 
innovative activity and after the completion of 
activity, to seek reimbursement up to 50% of 
eligible costs, i.e. €3,500 in 2017 excluding VAT.   
Requirements  o The financial support programme for innovative 
activities is designed for the companies in the 
manufacturing  industry (except for the industries 
of steel, coal and synthetic fibres; shipbuilding; 
manufacture of coke and refined petroleum 
products; manufacture of tobacco products; 
manufacture and sales of military equipment or 
services, trade, gambling, etc.).   
iii. Mentoring for Small and Medium -Sized Enterprises  
 
Phase I of the project started in 2014 and was finalized in 2016; phase II was to start 
in September 2017.  
 2015: €10,156  
2016: €11,625  
2017: ..  
2018: ..  
Incentives  o Diagnosis - analysis of the current situation in the 
company  
o Assistance in the preparation of development 
activities/plans/projects and their implementation  
o Counselling and coordination of activities aimed at 
access to funds, government programmes 
supporting the development of businesses, new 
technologies, consulting services, etc.  
o Assistance in finding business partners   
Requirements  Companies:  
o Located in Podgorica, Bar, Cetinje, Budva, Bijelo 
Polje or Nikšić;  
o operating for two years at least; and  
o not operating in the defence industry, 
gambling/lottery, and tobacco and alcoholic 
beverages industries.   
c) PROCESSING INDUSTRY    
i. Industry Modernization Support Program me 
 
Based on the annual working programme of the Ministry of Finance and in line with the 
Action Plan  for Implementation of the Industrial Policy until 2020; this programme 
needs to be adopted by the Government and its timeframe is one year.  
 2015: ..  
2016: €100,000  
2017: €100,000  
2018: ..  
Incentives  o Co-financing of the eligible costs of equipment up 
to 20% for entrepreneurs, micro and small -sized 
enterprises, and up to 10% for medium -sized 
enterprises with the rest of the required funding 
provided through a loan arrangement with the 
Investment and Development Fund of Montenegro.  
o Value of the co -financing  for equipment 
procurement  envisaged from €5,000 to €20,000.  
o Value of the equipment procurement is 
envisaged from €25,000 to €100,000.    
Requirements  o Potential grant beneficiaries are to pre -apply for a 
loan with the IDF. Once they have met the IDF's 
criteria/requirements they become entitled to a 
subsidy/grant of the Ministry.   WT/TPR/S/369 • Montenegro  
 
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  INCENTIVES  
ii. Program for Improvement of Innovative Activities of SMEs in 
Manufacturing  
 
Based on the annual working programme of the Ministry of Finance and in line with the 
Action Plan f or Implementation of the Industrial Policy until 2020; this programme 
needs to be adopted by the Government and its timeframe is one year.  
 2015: €30,000  
2016: €30,000  
2017: €30,000  
2018: ..  
 
Incentives  o Financial support of up to €3,500 per applicant 
(€2,500 in 2015 and 2016)  for the introduction of 
innovations such as:  
o product innovation  
o business process innovation  
o organization innovation  
o marketing innovation.  
o Companies are to fund 100% of the costs of 
external consultant for the implementation of 
innovative activity and after the completion of 
activity, to seek reimbursement up to 50% of 
eligible costs, i.e. €3,500 in 2017 excluding VAT.   
Requirements  o The financial support programme for innovative 
activities is designed for companies in the 
manufa cturing  industry (except for the industries 
of steel, coal and synthetic fibres; shipbuilding; 
manufacture of coke and refined petroleum 
products; manufacture of tobacco products; 
manufacture and sales of military equipment or 
services, trade, gambling, etc.).   
.. Not available.  
a Investors implementing investment projects ensuring job creation and contributing to economic and 
regional development of Montenegro may be beneficiaries of financial incentives awarded by a 
Decision of the Government of Montenegro on the allocation of funds for direct investment 
promotion.  
b The total value of allocated funds may not exceed:  
 - 50% of the value of the investment project for large enterprises (over 250 employees and total 
annual balance sheet exceeding €43  million)  
 - 60% of the value of the investment project for medium -sized enterprises (50 to 250 employees 
and an annual turnover not exceeding €50 million or total annual balance sheet not exceeding 
€43 million)  
 - 70% of the value of the investment projec t for small enterprises (up to 50 employees and an 
annual turnover or total annual balance sheet not exceeding €10 million)  
c A newly employed person is deemed to be a person entitled to a contract of indefinite duration in 
positions involving implementati on of the investment project. The beneficiary of funds is required to 
keep the number of newly employed persons for at least three years upon completion  of the 
investment project 's implementation for small and medium -sized enterprises, and five years for 
large enterprises.  
d Business zone is a single entity in the territory of a local government, partly or fully equipped with 
infrastructure, providing different incentives to investitures. Business zones of strategic importance 
are established by the Governm ent and managed by a company founded by the Government . 
Business zones of local importance are established by LGUs and managed by a manager appointed 
by the mayor or the company founded by the LGU.  
e The state budget does not foresee the amount for the dev elopment of the business zone. The only 
investments at state level were related to the joint project of the Ministry of Economy and UNDP. 
Besides the business zone, the same funds were supporting the development of business clusters in 
Montenegro.  
f Pursua nt to the Law and the rules on granting state aid, the intensity of aid for small and medium 
enterprises must not exceed the limited amount. The rule is harmonized with EU legislation. For 
example, if an investment project is worth €1,000,000, a small comp any cannot obtain  over 
€700,000 of state aid, based on various incentive programmes. Assigned incentives are considered 
cumulatively.  
g In accordance with the Rulebook establishing the level of development of local government units 
(OG No. 82/16) less deve loped LGUs are: Petnjica, Gusinje, Andrijevica, Šavnik, Bijelo Polje, Rožaje, 
Kolašin, Plav, Mojkovac and Berane.  
Source:  Government of Montenegro (2017), Economic Reform Programme for Montenegro 2017 –2019, 
January; Ministry of Economy (2017), Business St imulating Programs , Podgorica. Viewed at: 
http://www.bizniszona.me/wp -content/uploads/2017/06/Business -Stimulating -
Programs_brochure.pdf ; and Dec ree on Business Zones (OG Nos. 77/16 and 38/17).  WT/TPR/S/369 • Montenegro  
 
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  3.66.   Research and development (R&D) activities are financed and/or subsidized by the Ministry 
of Science.83 Although the 2016 budget for scientific research was increased, total national 
spending on R&D in 2014 st ood at 0.36% of GDP.84 A 2016 -2020 strategy on innovative activity 
includes an increase in public and private expenditure by 2020 (0.6% of GDP in overall public R&D 
spending and 0.3% of GDP for private investment). The programme to enhance innovation in 
SMEs (www.mek.gov.me ) is aimed at strengthening cooperation with innovative organizations 
(science and research institutions, science and technology parks, centres of excellence, innovation 
entrepreneurship centres, business incubators, consultancy companies), and advancing R&D for 
the development of new products, processes, organization models and marketing improvements.85 
In 2016 and 2017, four companies involved in meat processing, wood sawmilling and printing 
benef ited from the programme. The Montenegrin Council for Scientific Research Activities adopted 
a national roadmap for the European Research Area in April 2016.  
3.67.   A 2008 programme of support for self -employment (Innovative Program me for Continuous 
Stimulation o f Employment and Entrepreneurship), targeted at  unemployed persons, individual 
agricultural producers, entrepreneurs and small enterprises, provides concessional loans of €5,000 
for each newly opened work place for up to three work places (i.e. maximum loa n amount 
€15,000). In 2016, 10 loans of a total amount of €90,000 were granted to entrepreneurs and 
small enterprises and led to the creation of 18 new work places; in addition, 20 loans totalling 
€110,000 were granted to unemployed persons and created 22 new jobs. Furthermore, s upport 
has been available to legal persons and entrepreneurs who decide to hire some categories of 
unemployed persons registered with the Employment Agency of Montenegro  between 1  January 
2016 and 31 December 2017 .86 Employers are ex empt from payment of the compulsory social 
insurance contribution to salaries, the contribution to the Labour Fund, and personal income tax of 
the employed person for a period of 12 months from the day of hiring. The subsidy may amount  to 
up to 50% of the gross remuneration of the recruited person, in line with the relevant state aid 
regulations. In 2016, this type of support allowed 500 employers to hire around 5,500 new 
employees.  
3.68.   In the framework of the Increasing the Competitiveness of the Economy in Montenegro 
project, jointly funded and implemented by the MEK, the United Nations Development Programme 
(UNDP), the city of Podgorica, Cetinje and the municipality of Bijelo Polje, te chnical support was 
provided to 7 local government units (LGUs) (i.e.  Podgorica, Cetinje, Žabljak, Kolašin, Petnjica, 
Berane and Tivat) to create strategic development plans to support the socio -economic 
development of LGUs.87  
3.69.   Sector specific support, incl uding under the Cluster Development Programme, is inter alia  
provided in agriculture, fisheries, energy, manufacturing and tourism (see above, Sections 4.1.1.3, 
4.1.3, 4.2, 4.3 and 4.4.5).  
3.70.   According to a 2016 European Commission report, the level of subsid ies remains modest. In 
2015, the general government budget provided for a modest allocation of state aid of 0.6% of GDP 
for subsidies (down from 0.8% of GDP a year before), plus an additional 0.3% of GDP for new 
state guarantees; however, overall state sub sidies and recapitalization of the state -owned national 
airways (Montenegro Airlines, Sections 3.3.4 and 4.4.4.2) represented 1.6% of GDP.88 The 
                                                
83 Government of Montenegro (2017), Economic Reform Programme for Montenegro 2 017–2019, 
January.  
84 European Commission (2016), Montenegro 2016 Report , Commission Staff Working Document 
SWD(2016) 360 final, 9 November, Brussels. Viewed at: https://ec.europa.eu/neighbourhood -
enlargement/sites/near/files/pdf/key_documents/2016/20161109_report_montenegro.pdf .  
85 Secretariat for Development Projects (undated), Investment Climate in Montenegro .  
86 These sub sidies are available to the employers who hire: anyone older than 50 years of age or a 
single person with one or more dependants; anyone out of work for the past 6 months; anyone who did not 
complete secondary education or gain  a professional qualification ; anyone who completed regular schooling 
and did not obtain  employment within two years; members of the Roma and Egyptian population; or anyone 
participating in the public works programmes. Decree on the Subsidised Employment of Specific Categories of 
Unem ployed Persons published at OG No. 80/15, 31 December 2015; Secretariat for Development Projects 
(undated), Investment Climate in Montenegro .  
87 Ministry of Economy (2017), Business Stimulating Programs , Podgorica. Viewed at: 
http://www.bizniszona.me/wp -content/uploads/2017/06/Business -Stimulating -Programs_brochure.pdf . 
88 Montenegro Airlines has been subject to a European Commission investigation that began in 
February  2016 on the grounds of possible anti -competitive state aid. EIU (2017), Country Report – 
Montenegro , 15 February; European Commission (2016), Montenegro 201 6 Report , Commission Staff Working WT/TPR/S/369 • Montenegro  
 
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  introduction in 2015 of tax exemptions to attract new investments in priority sectors requires a 
comprehensive r eview to make sure it hinder s neither  competition nor public finances. No 
mechanism for the quantification/measurement and appraisal of the effectiveness of tax and 
non-tax incentives is in place.  
3.3.2   Standards and other technical requirements  
3.3.2.1   Standards, test ing, and certification  
3.71.   Since its WTO accession , Montenegro's institutional setting in this area has remained 
relatively unchanged. The Department of Quality Infrastructure of the Directorate of Internal 
Market and Competition of MEK was established in 2016  and is in charge of coordination activities 
related to standards and technical regulations, as well as the supervision of quality infrastructure 
institutions (accreditation, standardization and metrology).89  
3.72.   The Institute of Standardi zation of Montenegro (ISME), a non -governmental institution set 
up in 2007, remains responsible for planning and coordinating the national standards policy and is 
in charge of designing, organizing and adopting standards and related documents.90 ISME 
regularly informs the publi c about the existing standards (national, European and international) 
and its standardization activities. Information on the existing standards is available on its web 
portal ( www.isme.me ).91 According to the 2013 Decree o n the Notification of Technical 
Regulations, Standards, Regulations on Information Society Services and Conformity Assessment 
Procedures (OG No. 11/13), ISME is an official enquiry point on standards and information 
provision under the WTO Agreement on Tec hnical Barriers to Trade.92 According to the European 
Commission, ISME is independent and able to fully implement European and international 
standards, but it faces challenges including a lack of adequate human and financial resources.93  
3.73.   Six ministries are responsible for development and adoption of technical regulations in their 
areas of competence upon opinion of the MEK, which remains the domestic enquiry point for 
technical regulations and conformity assessment procedures.94 Other standards -related 
organi zations include: the Accreditation Body of Montenegro and the Bureau of Metrology 
(Section  3.3.2.1.2).  
3.74.   The 2014 -2018 Standardi zation Development Strategy for Montenegro is focused on: 
fostering the competitiveness of the domestic economy; increasing participation of interested 
parties in the development of Montenegrin standards; cooperating with the State; improving 
ISME's management; securing sustainable financing arrangements for the operation of ISME; 
                                                                                                                                                  
Document SWD (2016) 360 final, 9 November, Brussels. Viewed at: https://ec.europa.eu/ne ighbourhood -
enlargement/sites/near/files/pdf/key_documents/2016/20161109_report_montenegro.pdf .  
89 WTO document WT/ACC/CGR/38, WT/MIN(11)/7, 5 December 2011; and Ministry of Economy (2014), 
Strategy of Montenegro for the Implementation of the Acquis in the  Field of Free Movement of Goods 2014 -
2018. Viewed at: http://www.mek.gov.me/EN/WTO/LIBRARY/strategic_documents/ . 
90 The 2008 Law on Standardi zation (OG No. 13/08) governs the princip les and objectives of 
standardization; the establishment, organization and activities of the organization for standardization; the 
adoption, issuing and application of Montenegrin standards and related documents in the standardization area, 
as well as insp ectoral supervision of the implementation of this Law. ISME (2014), Standardization 
Development Strategy for Montenegro , April. Viewed at: 
http://www.mek.gov.me/EN/WTO/LIBRARY/strate gic_documents/ ; and WTO document G/TBT/39, 
15 March  2017.  
91 ISME online information. Viewed at: https://www.isme.me/catalog .  
92 The Institute consists of 17 technical committees, inter alia,  oil and oil products,  euro codes, food 
products, energy management systems and energy efficiency, human resources management (dormant), 
power, corporate social responsibility, pressure equipment, tourism and related services, and codification 
language.  
93 ISME is funded throug h the sale of standards, related documents and other publications; membership 
fees; fees for  services rendered; the Budget of Montenegro;  and other sources. Article 9 of the Law on 
Standardi zation and European Commission (2016), Montenegro 2016 Report , Com mission Staff Working 
Document SWD (2016) 360 final, 9 November, Brussels. Viewed at: https://ec.europa.eu/neighbourhood -
enlargement/sites/near/files/pdf/key_documents/2016/20161109_report_montenegro.pdf  . 
94 These agencies are the Ministry of Economy, the Ministry of Sustainable Development and Tourism, 
the Ministry of Health, the Ministry of Transport and Maritime Affairs, t he Ministry of Internal Affairs and the 
Ministry of Agriculture and Rural Development. Law on Technical requirements and conformity assessment of 
products, Article 6.  WT/TPR/S/369 • Montenegro  
 
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  providing training and raising the level of awa reness of interested parties regarding 
standardization and standards implementation; developing standards in new standardized fields; 
and strengthening the administrative capacities of ISME.95  
3.3.2.1.1   Voluntary, compulsory, national, and aligned standards  
3.75.   The Mon tenegrin standardization system consists of mandatory standards  contained in 
technical regulations developed by the six competent ministries, and voluntary standards designed 
by ISME.96 Standards are developed by ISME and in the process of preparation of a technical 
regulation the relevant ministries in charge submit to ISME a request for information on existing 
national, international and European standards. Montenegro's regulations for industrial products 
are based either on the EU "Old Approach" (laying d own detailed specific technical requirements) 
or the "New and Global Approach" (setting -up of essential requirements defined to meet health, 
safety, and environmental objectives). According to Montenegro Development Directions 
2015-2018, harmonization with  international standards is crucial for the economy to achieve 
"smart" growth through increased competitiveness and attraction of foreign direct investment.97 
According to the authorities, standards related to Montenegro's development priorities are to be 
based on international standards; in the absence of adequate international standards, European 
standards are adopted.98 Standard harmonization and full integration into the European and 
international standardization system remain a significant element of Mon tenegro's industrial policy 
until 2020. Full harmonization of technical regulations and standards would contribute to simplified 
procedures and better business access to domestic and foreign markets.99  
3.76.   As of December 2017, about 7,000  (40.7% of all standar ds) Montenegrin standards 
(MESTs) were contained in technical regulations issued by the six competent ministries.100 At the 
same time , a total of 17,191  MESTs were adopted (6,970 in 2012).101 Montenegro had harmonized 
3,082 MESTs according to the International  Classification for Standards, and they were mainly 
allocated to environment, health protection, and safety (507), electrical engineering (308), 
construction materials and building (270), telecommunications, audio and video engineering (245), 
and health ca re technology (225).102 There were  only two national standards, and these were 
maintained due to the lack of equivalent international and/or European standards.103 All other 
ISME standards are based on international or European standards; 16,999 MESTs are iden tical to 
European standards (CEN, CENELEC, ETSI (see below)) and the rest identical to international 
standards.  Some MESTs are issued in Montenegrin while others are adopted under the "cover 
page" method (where the text of the standard is in another langua ge, such as English).104  
3.77.   Since 2014, Montenegro's Agency for Electronic Communications and Postal Services has 
been a full member of the European Telecommunications Standards Institute (ETSI). ETSI 
                                                
95 ISME (2014), Standardization Development Strategy for Montenegro , April. Viewed at: 
http://www.mek.gov.me/EN/WTO/LIBRARY/strategic_documents/ . 
96 Ministry of Economy (2014), Strategy of Montenegro for the Implementation of the Acquis in the Field 
of Free Movement of Goo ds 2014 -2018.  Viewed at: 
http://www.mek.gov.me/EN/WTO/LIBRARY/strategic_documents/ ; Article 12 and Article 16 of the Law on 
Standardi zation.  
97 Ministry of Finance (2015), Montenegro  Development Directions 2015 -2018, June. Viewed at:  
http://www.mf.gov.me/en/news/153253/Montenegro -Development -Directions -2015-2018.html . 
98 WTO document WT/ACC/CGR/38, WT/MIN(11)/7, 5 December 2011.  
99 Ministry of Economy (2016), Industrial policy of Montenegro until 2020 . Viewed at: 
http://www.mek.gov.me/en/library/strategije .  
100 The authorities indicated that these standards are mostly related to technical regulations prepared in 
line with EU legislation, therefore, they are presumed to be in conformity with prescribed requirements.  
101 WTO document WT/ACC/CGR/38, WT/MIN(11)/7, 5 Decem ber 2011.  
102 According to the Ministry of Economy, as of September 2017, 3,053 MESTs were harmonized with EU 
Directives/Regulations.  
103 The two national MESTs are identical to the Occupational Health and Safety Assessment Series 
(OHSAS) and consist of: speci fic requirements for an occupational health and safety (OH&S) management 
system, to enable an organization to control its OH&S risks and improve its OH&S performance; and, a 
guideline providing generic advice on the application of OHSAS 18001:2007. Standar d OHSAS 18001 was 
developed according to the rules given by ISO/IEC Directives, part 2, and compatible with ISO 9001:2000 
(quality) and ISO 14001:2004 (environment). Therefore the authorities consider that they do not create 
obstacles to trade.  
104 European Commission (2016), Montenegro 2016 Report , Commission Staff Working Document 
SWD(2016) 360 final, 9 November, Brussels. Viewed at: https://ec.europa.eu/neighbourhood -
enlargement/sites/near/files/pdf/key_documents/2016/20161109_report_montenegro.pdf .  WT/TPR/S/369 • Montenegro  
 
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  produces globally applicable standards for information and communication technology (ITC), 
including fixed, mobile, radio, converged, broadcasting and internet technologies.105 ISME remains 
a correspondent member of the International Organization for Standardisation (ISO) and an 
associate member of the International  Electrotechnical Commission (EIC).106 Montenegro has been 
an affiliate of the European Committee for Standardisation (CEN) and the European Committee for 
Electrotechnical Standardization (CENELEC) since 2008 and 2009, respectively.107  
3.78.   On a bilateral level, i n February 2014 ISME signed cooperation agreements with the Turkish 
Standards Institution  (TSE) and in September 2016 with the Standardization Administration of 
China  (SAC). A 2015 MoU between ASTM International and Montenegro is aimed at assisting 
Montene gro with the development of standards supporting health, safety, the environment and 
economic growth.108  
3.3.2.1.2   Conformity assessment  
3.79.   Depending on the risk of the product , conformity assessment can be performed by 
manufacturers or bodies authorized/designated by the competent ministries. Montenegrin 
authorized/designated conformity assessment bodies (CABs) are responsible for conformity 
assessment for the needs of public ad ministration and manufacturers with the MEK playing a 
coordination role (Article 11 of the Law on Technical Requirements for Products and Conformity 
Assessment, OG No. 53/11).109 After the conformity assessment procedures conducted by the 
CABs have been  comp leted and the relevant test/calibration/inspection reports or certificates 
issued, the CABs  attest  to the conformity of the products concerned with technical regulations.110 
Conformity assessment procedures and certificates issued by foreign CABs are accepte d as 
equivalent upon the evaluation of a declaration of conformity and a technical dossier as well as 
evaluation on whether conformity assessment procedures performed by foreign CABs fulfil the 
goals and requirements of the domestic technical regulation. C onformity assessment documents 
issued by EU notified bodies are accepted as equivalent in Montenegro. As at December 2017, 
there were 35  accredited CABs, including 22 testing laboratories, 6 inspection bodies, 2 calibration 
laboratories, 1 certification bo dy for products, and 4 certification bod ies for management 
systems.111 
                                                
105 Agency for Electronic Communications and Postal Services (2015), Annual Report for 2014,  
Podgorica, April. Viewed at: http://www.ekip2.me/download/izvjestaji/oradu/GI%202014%20 -
%2017%2009%20ENG%20VERZIJA%2022%2009.pdf .  
106 Correspondent members observe the developme nt of ISO standards and strategy by attending ISO 
technical and policy meetings as observers. Correspondent members can sell and adopt ISO International 
Standards nationally. ISO online information. Viewed at: https://www.iso.org/members.html ; Associate 
members – NC has full access to all working documents but limited voting rights in the technical work and no 
eligibility to managerial functions within the IEC. IEC online information. Viewed at: 
http://www.iec.ch/about/profile/members.htm  and http://www.iec.ch/dyn/www/f?p=103:5:0 .   
107 Countries formally recognized by the EU as potential candidates for EU membership can become 
affiliates of CEN, CENELEC and ETSI. European Committee for Standardisation online information. Viewed at: 
https://standards.cen.eu/dyn/www/f?p=CENWEB:9:::NO , and https://www.cen.eu/about/Pages/default.aspx ; 
CENELEC online information. Viewed at: https://www.cenelec.eu/aboutcenele c/whoweare/index.html .  
108 ASTM International is a globally recognized leader in the development and delivery of voluntary 
consensus standards that are used around the world to improve product quality, enhance health and safety, 
strengthen market access and  trade, and build consumer confidence. ASTM International online information. 
Viewed at: http://www.astmnewsroom.org/default.aspx?pageid=3795 .  
109 As from 2016, the Department of Quality I nfrastructure (previously the Department for Internal 
Market and Competition) of the Ministry of Economy has been the official enquiry point for technical regulations 
and conformity assessment procedures. TBT information management system online informatio n. Viewed at: 
http://tbtims.wto.org/en/NationalEnquiryPoints/Search .  
110 Documents of conformity in some cases can be issued by the producers (self -assessment 
declaration) and in other cases, if the technical regulation requires the participation of a third party, additional 
documents of conformity are prepared either by the a uthorized or designated body. Montenegro's Accreditation 
System Development Strategy (for the period between 2015 and 2018) . Viewed at: 
http://www.mek.gov.me/EN/WTO/LIBRARY/strategic _documents/ , and Ministry of Economy (2014), Strategy 
of Montenegro for the Implementation of the Acquis in the Field of Free Movement of Goods 2014 -2018.  
Viewed at: http://www.mek.g ov.me/EN/WTO/LIBRARY/strategic_documents/ .  
111 Conformity assessment bodies include testing laboratories, calibration laboratories, inspection 
bodies, certification bodies providing certification of products (processes/services), management systems and 
persons. They carry out conformity assessment procedure s to determine whether the item to be assessed 
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  3.80.   Montenegro's national accreditation system includes the national accreditation body 
(Accreditation Body of Montenegro (ATCG)) (see below), accredited CABs, the relevant competent 
authorit ies and other parties directly or indirectly related to accreditation (see below).112 Its 
Accreditation System Development Strategy for 2015 -2018, is inter alia  aimed at: adopting and 
implementing the EU accreditation -related policies and rules; fulfilling t he obligations arising from 
membership of the European Union and international organizations for accreditation; upgrading 
administrative and technical capacities of the national accreditation body (ATCG); encouraging the 
use of accreditation when implement ing public policies; and, strengthening international 
accreditation -related cooperation.113 Since 2014, the Programme for Enhancing Regional and Local 
Competitiveness through Harmonization with International Standards of Business (Table 3.7), has 
aimed to ma ximize MSMEs ' competitiveness through harmonization of product -related 
international standards and providing support for conformity assessment accreditation. It has 
operated a reimbursement scheme covering a large part of related costs.114 
3.81.   The ATCG, establis hed in 2007 as an independent and not -for-profit organization and 
supervised by both the MEK and the Ministry of Finance, keeps and updates its Register of 
Accredited CABs.115 It conducts its activities in accordance with the Law on Accreditation 
(OG Nos. 54/10 and 43/15) to, inter alia , strengthen the cross -border accreditation policy.116 
Given the insufficient number of Montenegrin assessors and experts, whenever necessary the 
ATCG contracts assessors and experts from other national accreditation bodies.117  
3.82.   The limited human and financial resources of ATCG appear to affect the implementation of 
the 2015 -2018 strategy by impeding it from raising public awareness on the benefits of 
accreditation and preventing it from participating in the activities of the Europe an Cooperation for 
Accreditation (EA), although this situation is about to improve.118 The ATCG is a signatory to 
bilateral cooperation agreements with the national accreditation bodies of Serbia (ATS), the former 
Yugoslav Republic of Macedonia (IARM), Bosni a and Herzegovina (BATA), Croatia (HAA), 
Albania  (DA), Moldova (MOLDAC), and Bulgaria (BAS).  
                                                                                                                                                  
specifications. Montenegro's Accreditation System Develo pment Strategy (for the period between 2015 and 
2018). Viewed at: http://www.mek.gov.me/EN/WTO/LIBRARY/strategic_documents/ ; European Commission 
(2016), Montenegro 2016 Report , Commi ssion Staff Working Document SWD (2016) 360 final, 9 November, 
Brussels. Viewed at: https://ec.europa.eu/neighbourhood -
enlargement/sites/near/files/pdf/key_documents/2016/20161109_report_montenegro.pdf .  
112 Montenegro's Accreditation System Development Strategy (for the period between 2015 and 2018). 
Viewed at: http://www.mek.gov.me/EN/WTO/LIBRARY/strategic_documents/ .  
113 Montenegro's Accreditation System Development Strategy (for the period between 2015 and 2018). 
Viewed at: http://www.mek.gov.me/EN/WTO/LIBRARY/strategic_documents/ .  
114 Secretariat for Development Projects (undated), Investment Climate in Montenegro . 
115 Article 16 of the 2009 Law on Accreditation. Additional legislation relating to ATCG operations 
comprises: Dec ree on the form, content and appearance of a mark of conformity (OG No. 55/12); Decree on 
manner of recognition of foreign documents of conformity and marks of conformity (OG No. 55/12); Decree on 
notification of technical regulations, standards, regulatio ns on information society services and conformity 
assessment procedures (OG No. 11/13); Rulebook on the content and manner of keeping the register of 
technical regulations, conformity assessment bodies, foreign documents and conformity marking 
(OG No. 18/13); Rulebook on the manner of notification of designated conformity assessment bodies 
(OG No. 27/13). More information on these regulations is available in Ministry of Economy (2014), Strategy of 
Montenegro for the Implementation of the Acquis in the Field  of Free Movement of Goods 2014 -2018. Viewed 
at: http://www.mek.gov.me/EN/WTO/LIBRARY/strategic_documents/ ; and Articles 7 and 11 of Law on 
Technical Requirements for Products and Co nformity Assessment.  
116 Other legislation includes: the Decision on Establishment of the Accreditation Body of Montenegro 
(OG No. 21/07), the Statute of the Accreditation Body of Montenegro and internal rules and procedures of the 
Accreditation Body (12 int ernal rules and 7 procedures) that are in line with requirements of standard MEST EN 
ISO/IEC 17011:2010 – Conformity assessment – General requirements for accreditation bodies accrediting 
conformity assessment bodies and rules and procedures of European an d international organizations for 
accreditation (EA, ILAC and IAF). European Commission (2015), 2015 Montenegro report . Viewed at: 
https://ec.europa.eu/neighbourhood -
enlargement/sites/near/files/pdf/key_documents/2015/20151110_report_montenegro.pdf . 
117 Montenegro's Accreditation System Development Strategy (for the period between 2015 and 2018). 
Viewed at: http://www.mek.gov.me/EN/WTO/LIBRARY/strategic_documents/ .  
118 European Commission (2015), 2015 Montenegro report . Viewed at: 
https://ec.europa.eu/neighbourhood -
enlargement/sites/near/files/pdf/key_documents/2015/20151110_report_montenegro.pdf , and European 
Commission (2016), Montenegro 2016 Report , Commission Staff Working  Document SWD (2016) 360 final, 
9 November, Brussels. Viewed at: https://ec.europa.eu/neighbourhood -
enlargement/sites/near /files/pdf/key_documents/2016/20161109_report_montenegro.pdf . WT/TPR/S/369 • Montenegro  
 
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  Metrology  
3.83.   Montenegro's Strategy for Development of Metrology in 2016 -2018 is,  inter alia, aimed at:  
ensuring metrological traceability; improving the procedures f or standards/measuring instruments 
calibration and compliance assessment procedures for legal measuring instruments; reinforcing 
metrological supervision; and complying with the EU legislation.119 The MEK remains responsible 
for the supervision and monitorin g of issues related to metrology, while the Bureau of Metrology 
(BoM), founded in 2006, continues to perform expert and related administrative affairs in the field 
of legal, scientific and industrial metrology as Montenegro's National Metrology Institute ( NMI) in 
accordance with the Strategy and the regulatory framework in this area.120 The BoM is accredited 
by the ATCG and the Croatian Accreditation Agency (HAA). It also represents Montenegro in 
regional and international organizations: EURAMET – full member ship, OIML – corresponding 
member, WELMEC – associate member, CGPM – associate member , and IAAO – member. In 
July 2016, the BoM obtained a licence for performing scientific -research activities in the field of 
technical -technological and interdisciplinary s ciences. During the review period, national calibration 
laboratories were established and developed within the BoM , of which eight are recognized as 
competent for carrying out calibrations for the ATCG and the HAA.121 
3.3.2.1.3   Transparency  
3.84.   Human and financial resourc es limitations in this area also constitute constraints to 
Montenegro's ability to make regular TBT notifications to the WTO. Montenegro's two notifications 
in this area date back to 2013 (Section  2.3.1); they consist of a statement on the implementation 
and administration of the Agreement on Technical Barriers to Trade under Article 15.2 and the 
acceptance of the Code of Good Practice.122 The authorities consider that as M ESTs are based on 
international or European standards for  a specific product or product  group they do not create a 
technical barrier to trade; they are to address the issue of notification requirements in this area in 
the course of 2018. So far, there have been no specific trade concerns (STCs) raised at the 
Committee on Technical Barriers t o Trade either by Montenegro with respect to other Members' 
measures, or by other Members with respect to Montenegrin measures.123 In 2012, a workshop, 
aimed at promoting a better understanding of the TBT Agreement and the challenges of its 
implementation, w as held in Montenegro.124  
3.3.2.2   Sanitary and phytosanitary measures  
3.3.2.2.1   Food standards -setting framework  
3.85.   Montenegro's legislative system adopts and updates the relevant SPS laws and regulations 
to ensure compliance with the EU acquis.  The main law affecting food standards is the Law on 
Food Safety (OG No. 57/15), which replaced the 2007 Law (OG No. 14/07). The 2015 
                                                
119 European Commission (2016), Montenegro 2016 Report , Commission Staff Working Document SWD 
(2016) 360 final, 9 November, Brussels. Viewed at: https://ec.europa.eu/neighbourhood -
enlargement/sites/near/files/pdf/key_documents/2016/20161109_report_montenegro.pdf , and Government of 
Montenegro (2015), Strategy of Metro logy Development in Montenegro for period 2016 -2018, Podgorica, 
December. Viewed at: http://www.mek.gov.me/EN/WTO/LIBRARY/strategic_documents/ .  
120 Since WTO accession, in addition to  the Law on Metrology (OG Nos. 79/08 and 40/11) a set of 
various regulations has been adopted. They are based on the practices and experiences of relevant 
international and European organizations and institutions. More information on the regulations is ava ilable in 
Strategy of Metrology Development in Montenegro for period 2016 -2018 (Section 2.2) . Government of 
Montenegro (2015), Strategy of Metrology Development in Montenegro for period 2016 -2018, Podgorica, 
December. Viewed at: http://www.mek.gov.me/EN/WTO/LIBRARY/strategic_documents/ .  
121 These laboratories include: the Laboratory for mass; Laboratory of large masses of the Laboratory 
for length; Laboratory for Temperature; Laborator y for Pressure; Laboratory for electrical quantities; 
Laboratory for Time and Frequency; Laboratory for small volumes; and, the Laboratory for large volumes. Also, 
the Bureau of Metrology established the Laboratory for electrical power and the Laboratory f or certification of 
measuring the speed of a moving vehicle. Government of Montenegro (2015), Strategy of Metrology 
Development in Montenegro for period 2016 -2018, Podgorica, December. Viewed at: 
http://www.mek.gov.me/EN/WTO/LIBRARY/strategic_documents/ .  
122 WTO documents G/TBT/2/Add.110, 18 March 2013; G/TBT/34, 7 March 2014; and G/TBT/CS/N/180, 
13 March 2013.  
123 TBT database on line information. Viewed at: 
http://tbtims.wto.org/en/SpecificTradeConcerns/Search . 
124 WTO document G/TBT/33, 27 February 2013.  WT/TPR/S/369 • Montenegro  
 
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  amendments to the 2007 Law were mainly aimed at establishing  a more efficient system with 
clearly defined competences and responsibilities, simplifying the chain of command, achieving 
better coordination and communication, and facilitating the training of employees.125 The 
amendments accorded  all competences to the Ministry of Agriculture and Rural Development 
(MARD) and provid ed for the establishment of its new Administration for Food Safety, Veterinary 
and Phytosanitary Affairs (AFSVPA).126 The AFSVPA was formed by merging the Veterinary and 
Phytosanitary Administrations of MARD and the Division for Food Safety of the Ministry o f Health 
(MoH) . It consists of three sectors: the Sector for Food Safety (responsible for food safety, feed 
safety and inspection of food and feed); the Veterinary Sector (responsible for animal health and 
welfare, animal by -products and veterinary inspect ion); and, the Sector for Phytosanitary Affairs 
(responsible, inter alia,  for plant health protection, seeds, planting materials, GMO, plant variety 
protection, plant products, fertilizers and phytosanitary inspections). Montenegro is a member of 
the World  Organization for Animal Health (OIE), the Food and Agriculture Organization and the 
Codex Alimentarius Commission as well as a signatory to the International Plant Protection 
Convention (IPPC).127 
3.86.   All imported and domestic food and animal feed must comply w ith the relevant 
requirements set out under the 2015 Law (Article 18). Moreover, since 2007 , Article 41 of the Law 
has obliged the business operator to establish, apply and continuously maintain procedures based 
on the principles of Hazard Analysis and Cri tical Control Point (HACCP) at all stages of production, 
processing and distribution of food.128 According to a 2013 European Commission  report, the 
majority of large capacity establishments apply HACCP principles. However, small establishments 
have most pro blems with applying these principles. Therefore, training is ongoing to raise 
awareness on the implementation of HACCP principles within small -scale establishments.129  
3.87.   As from 2015, all business operators engaged in primary production of food must be 
regist ered with the AFSVPA. As at 1 September 2017, there were: 2,342 producers in the Register 
of food business operators engaged in primary food production; 282 facilities for food production 
and storage of food under controlled conditions in the Register of a pproved facilities; and 
1,427  newly registered facilities (2016/2017) in the Register of Registered Facilities in accordance 
with the newly -issued Ordinance listing the activities that are approved and registered.130  
Maximum residue levels  
3.88.   Since 2015, MARD  remains responsible for regulating pesticide residues in foodstuffs, in 
accordance with the maximum residue levels (MRLs) set out in the Law on Food Safety, the Law 
                                                
125 Prior to AFSVPA, the Ministry of Health (MoH) was respons ible for safety of food of plant origin after 
primary production, safety of composite food and safety of traded food; while the Veterinary and Phytosanitary 
Administration of MARD was in charge of safety of food and safety of traded food of animal/plant or igin at 
primary production. European Commission ( 2013), Screening report Montenegro. Chapter 12 – Food safety, 
veterinary and phytosanitary policy. Viewed at: http://edz.bib.uni -mannheim.de/daten/edz -
k/gde/13/screening_report_montenegro_ch12.pdf , and Government of Montenegro (2015), Montenegro's 
Strategy for Transposition and Implementation of the EU Acquis relevant for Chapter 12 – Food Safety, 
Veterinary  and Phytosanitary policy including a General Action Plan and a Specific Action Plan for Control and 
Eradication of Classical Swine Fever, July. Viewed at: https://www.eu.me/en/12 . 
126 Government of Montenegro (2015), Montenegro's Strategy for Transposition and Implementation of 
the EU Acquis relevant for Chapter 12 – Food Safety, Veterinary and Phytosanitary policy including a General 
Action Plan and a Specific Action Plan for Control and Eradication of Classical Swine  Fever, July. Viewed at: 
https://www.eu.me/en/12  and Decree amending the Decree on Organization and Manner of Work of State 
Administration (OG No. 80/15).  
127 WTO document WT/ACC/CGR/38, WT/MIN(11)/7, 5 December 2011.  
128 Montenegro has adopted a Good Hygiene Practice Guide for food business operators performing 
activities that do not identify critical control points in the preparation, production and processing of food for the 
purpose of establishing good hygiene practi ces. Law on Food Safety (OG Nos. 14/07 and 57/15), Articles 18 
and 41. Viewed at: http://extwprlegs1.fao.org/docs/pdf/mne155850.pdf  (in Montenegrin).  
129 European Commission  (2013), Screening report Montenegro. Chapter 12 – Food safety, veterinary 
and phytosanitary policy. Viewed at: http://edz.bib.uni -mannheim.de/daten/edz -
k/gde/13/screening_ report_montenegro_ch12.pdf .  
130 Under the previous regime, in 2013 the MARD had registered 341 food establishments, and the MoH 
2,065 establishments. The same year the MARD had approved 25 establishments for meat of ungulates, 5  for 
poultry meat, 40 for mea t products, 3 for minced meat, meat preparations and mechanically separated meat, 
14 for fishery, 2 for live molluscs, and 28 for dairy products.  European Commission ( 2013), Screening report 
Montenegro. Chapter 12 – Food safety, veterinary and phytosanitar y policy. Viewed at: http://edz.bib.uni -
mannheim.de/daten/edz -k/gde/13/screening_report_montenegro_ch12.pdf .  WT/TPR/S/369 • Montenegro  
 
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  on Plant Protection Products (OG Nos. 51/08, 40/11 and 18/14) and the 2015 Regulation on 
maximum residue levels (MRLs) of pesticides in or on plants, p lant products, food or feed 
(OG No. 21/15 and 44/15).131 The Regulation lists MRLs of pesticides in products of plant and 
animal origin used as fresh, processed and/or combined food or animal feed (Annex I); in or on 
food and feed for animals (Annex II) ; and for products for which a MRL is not determined (Annex 
III) ( www.ubh.gov.me/biblioteka/sektor_3/ ).132 All information and data on plant pr otection 
products and residue of plant protection products are collected and inserted in a database 
maintained by the competent authorities and used for regulating trade in this area (Article 43). 
Importation of plant protection products registered in Mont enegro is allowed by companies, other 
legal persons , or entrepreneurs registered in the Register of importers (Article 41) 
(Section  3.1.2.1). As of 1  September 2017, the register contained 30 such importers.133 Food 
importers do not have to provide lists of food ingredients and additives to MARD. Import 
tolerances for agrochemicals not already registered for use in Montenegro are subject to the 
relevant EU MRL; in the absence of such MRL , the default MRL of 0.01  ppm applies.  
3.89.   Since 2009, Montenegro has conducted annual monitoring of pesticide residues in line with 
EU recommendations.134 As from 2012, 62 training activities on the use of pesticides have taken 
place. The MARD budget for the 2016 Programme on Phytosan itary measures stood at €190,018 , 
of which €10,000 was allocated to monitoring pesticide residues in food of plant and animal origin, 
€6,000 to fruit, and €5,000 to vegetable crops.135 
Food additives  
3.90.   The 2015 Law on Food Safety defines and regulates food ad ditives.136 As prescribed by the 
Law, the secondary legislation – the Regulation on food additives (OG No. 19/16) – provides for 
quality requirements and conditions for the use of additives. The Regulation defines the food 
additives, classifies different typ es of additives that can be used in food, prescribes the conditions 
for their use, labelling, placing on the market and their specification (Articles 1 and 10 of the 
Regulation) ( http://www.ubh.gov.me/biblioteka/sektor_1/lista_aditiva/ ).137 Only additives from 
Lists I and II of the Regulation can be used and placed on the market under specific conditions 
whenever applicable. Food additives are grouped into 27 classes (Appendix I) and are  listed with 
detailed specifications (Appendix II). Article 8 stipulates that additives cannot be used in 
unprocessed food, food for new -borns and children, processed food based on cereals, and food for 
special medical purposes unless specifically determin ed for these purposes. There is no national 
                                                
131 Article s 6 and 7 of the Law on Food Safet y (OG Nos. 14/07 and 57/15); Article 11 of the Law on 
Plant Protection Products (OG Nos. 51/08, 40/11 and 18/14). Viewed at: 
http://extwprlegs1.fao.org/docs/pdf/mne155771.pdf ; and The Regulation transposes the rules contained in the 
Regulation (EC) No. 396/2005 of the European Parliament and of the Council of 23 February 2005 on 
maximum residue levels of pesticides in or on food and feed of plant and animal origin. Ecolex online  
information. Viewed at: http://extwprlegs1.fao.org/docs/pdf/mne156957.pdf  and 
http://extwprlegs1.fao.org/docs/pdf/mne157012 .pdf (in Montenegrin).  
132 Article 2 of the Regulation. Ecolex online information. Viewed at: 
http://extwprlegs1.fao.org/docs/pdf/mne156957.pdf  and http://extwprlegs1.fao.org/docs/pdf/mne157012.pdf  
(in Montenegrin).  
133 Article s 41 and 43 of the Law on Plant Protection Products (OG Nos. 51/08, 40/11 and 18/14).  
134 European Commission  (2013), Screening report Montenegro. Chapter 12 – Food safety, veterinary 
and phytosanitary policy. Viewed at: http://edz.bib.uni -mannheim.de/daten/edz -
k/gde/13/screening_report_montenegro_ch12.pdf . 
135 Similarly, the total budget in 2013 amounted to €190,000 , including €10,000 for monitoring of 
pesticide residue in food of plant and animal origin , €5,590 for fruit, and €6,989 for vegetable crops. FAO 
online information. Viewed at (in Montenegrin): http://extwprlegs1.fao.org/docs/pdf/mne157204.pdf  (for 
2016) and http://extwprlegs1.fao.org/docs/pdf/mne155999.pdf  (for 2013).  
136 Article 7 and 58 of the Law on Food Safety (OG Nos. 14/07 and 57/15).  
137 The regulation transposes the Regulation (EC) No. 1331/2008 of the European Parliament and of the 
Council of 16 December 2008. Government of Montenegro (2015), Montenegro's Strategy for Transposition 
and Implementation of the EU Acquis relevant for Chapter 12 – Food Safety, Veterinary and Phytosanitary 
policy including a General Action Plan and a Specific Action Plan for Control and Eradication of Classical Swine 
Fever, July. Viewed at: https://www.eu.me/en/12  and Regulation on Food additives. Viewed at: 
http://www.sluzbenilist.me/Sluzbe niListDetalji.aspx?tag={D2C57A39 -E70B-42E0-9F45-9AC3AAD5564F}  or 
http://extwprlegs1.fao.org/docs/pdf/mne167808.pdf  (in Montenegrin).  WT/TPR/S/369 • Montenegro  
 
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  production of food additives in Montenegro. Controls of food additives are performed by authori zed 
laboratories in cooperation with sanitary and veterinary inspectors (see below).138  
3.91.   A 2016 Regulation on vitamins,  minerals and other food additives defines and classifies the 
sorts and types of vitamins, minerals and other substances that can be added to food and 
foodstuffs, including various requirements that must be met, such as the manner and conditions 
for the co rrect labelling and placing on  the market. As of December 2017, Montenegro had a 
positive list of 156 vitamins/minerals and their forms.139  
Genetically modified products  
3.92.   Montenegro's legislation on genetically modified products applies equally to domestic a nd 
imported products. The Law on Food Safety provides a definition of genetically modified food 
and/or animal feed and prescribes and/or prohibits its placement on the market unless specific 
conditions are fulfilled (Article 71).140 The 2008 Law on Genetical ly Modified Organisms 
(OG No. 22/08) , setting the conditions for the use of GMOs and products containing/consisting of 
or deriving from GMOs , remains unchanged.141 The November 2016 Regulation on methods for 
sampling and laboratory testing of animal feed for  the presence of genetically modified materials 
(OG No. 69/16) prescribes the methods for food sampling (official controls, inspection) and 
laboratory testing for the purpose of research/analysis on the effective presence of genetically 
modified materials (food safety issues). Montenegro ratified the Cartagena Protocol on Bio safety to 
the Convention on Biological Diversity  in October 2006.142  
3.93.   In the past , several institutions (e.g. the Ministry of Sustainable Development and Tourism) 
have had GMO -related res ponsibilities thus rendering the regulatory framework and its 
implementation cumbersome.143 AFSVPA has taken the responsibility for the authorization of 
testing laboratories, approval of use of GMOs for experimental purposes and authorization for 
GMOs in foo d. The Environmental Protection Agency is responsible for  approving the intentional 
introduction into the environment of GMOs. No application s have been received so far and the 
National Council for Biological Safety has not yet granted authorizations or mo nitored GMO 
cultivation in Montenegro. At present, no local GMO food is authorized in the domestic market. 
According to the authorities, national legislation provides for an adequate control framework; 
however, as of 2015, there were no accredited laborato ries to test GMOs and tests are performed 
in accredited laboratories in Serbia or laboratories accredited for GMO testing in other countries.144  
3.94.   Imports of GMOs and wild species of flora and fauna require a permit either from MARD or 
the Ministry of Sustain able Development and Tourism (new species).145 Sanitary inspections are 
conducted by a sanitary inspector (health issues), veterinary inspector (veterinary issues), a 
                                                
138 European Commission ( 2013), Screening report Montenegro. Chapter 12 – Food safety, veterinary 
and phytosanitary policy. Viewed at: http://edz.bib.uni -mannheim.de/daten/edz -
k/gde/13/ screening_report_montenegro_ch12.pdf .  
139 For more detailed information on the type of vitamins and minerals and their forms see Annex es 1 
and 2 of the Regulation on vitamins, minerals and other food additives.  
140 Law on Food Safety (OG Nos. 14/07 and 57/15). Viewed at: 
http://extwprlegs1.fao.org/docs/pdf/mne155850.pdf .  
141 Law on Genetically Modified Organisms (OG No. 22/08). Viewed at: 
http://extwprlegs1.fao.org/docs/pdf/mne155769.pdf ; WTO document WT/ACC/CGR/38, WT/MIN(11)/7, 
5 December 2011; and ECOLEX online information. Viewed at: 
https://www.ecolex.org/details/legislation/re gulation -on-methods -for-sampling -and-laboratory -testing -of-
animal -feed-for-over-the-presence -of-genetically -modified -materials -lex-
faoc168444/?q=&xkeywords=GMO&xcountry=Montenegro&xdate_min=&xdate_max =.  
142 Convention on Biological Diversity online informat ion. Viewed at: 
https://www.cbd.int/information/parties.shtml#tab=1 .  
143 European Commission ( 2013), Screening report Montenegro, Chapter 12 – Food safety, veterinary 
and phytosanitary  policy. Viewed at: http://edz.bib.uni -mannheim.de/daten/edz -
k/gde/13/screening_report_montenegro_ch12.pdf .  
144 European Commission ( 2013), Screening repo rt Montenegro, Chapter 12 – Food safety, veterinary 
and phytosanitary policy. Viewed at: http://edz.bib.uni -mannheim.de/daten/edz -
k/gde/13/screening_repo rt_montenegro_ch12.pdf ; and Government of Montenegro (2015), Montenegro's 
Strategy for Transposition and Implementation of the EU Acquis relevant for Chapter 12 – Food Safety, 
Veterinary and Phytosanitary policy including a General Action Plan and a Specif ic Action Plan for Control and 
Eradication of Classical Swine Fever, July. Viewed at: https://www.eu.me/en/12 .  
145 WTO document WT/ACC/CGR/38, WT/MIN(11)/7, 5 December 2011.  WT/TPR/S/369 • Montenegro  
 
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  phytosanitary inspector (phytosanitary issues) or the authority responsible for environment al 
protection (environmental protection). The sanitary inspector performs the checks at customs 
warehouses and/or in free zones (Section 3.2.4.3). The phytosanitary inspector is empowered to 
ban import ation, export ation and transit if relevant regulations are not met.146 It is compulsory to 
indicate/label additives, enzyme preparations or seed materials that are genetically modified or 
contain GMOs.147  
3.3.2.2.2   Quarantine regulations  
3.95.   Montenegro's main laws on quarantine requirement s for imports include the Law on Plant 
Health Protection (OG Nos. 28/06, 28/11 and 48/15) and the Veterinary Law (OG Nos.  30/12 and 
48/15). Relevant regulations and rulebooks have been issued to ensure compliance with the EU 
acquis . The Law on Plant Health  Protection regulates, inter alia,  the protection of plants, measures 
on the prevention of  the introduction, spread and control of harmful organisms, and checks of 
plant health and plant health consignments.148 The Veterinary Law regulates the conditions and  
manner of carrying out veterinary activities as well as animal health protection, and measures 
related to the protection of public and animal health.149 Since 2015, animal, plant and fisheries 
quarantine and inspection are handled by AFSVPA (Section 3.3.2.2 .1).150  
Phytosanitary measures  
3.96.   Importers ( and exporters) of consignments must be registered and imports must be 
accompanied by a phytosanitary certificate issued by a competent authority in the exporting 
country.151 The implementation of a Plant Passport Syst em began in 2015; as of 
                                                
146 Law on Genetically Modified Organisms (O G No. 22/08). Viewed at: 
http://extwprlegs1.fao.org/docs/pdf/mne155769.pdf and WTO document WT/ACC/CGR/38 , WT/MIN(11)/7, 
5 December 2011.  
147 European Commission ( 2013), Screening report Montenegro. Chapter 12 – Food safety, veterinary 
and phytosanitary policy. Viewed at: http://edz.bib.uni -mannheim.de/ daten/edz -
k/gde/13/screening_report_montenegro_ch12.pdf .  
148 Other related laws include: Law on Agricultural Plants Seeds Materials (OG No. 28/06, 61/11 and 
48/15), the Law on Planting Material (OG No. 28/06, 61/11 and 48/15) and the Law on Plant Varieties 
Protection (OG Nos. 48/07, 48/08, 73/10 and 40/11). Relevant regulations include: Regulation on obligation 
for registration of producers, processors, importers, distributors and store plants, plant products and regulated 
objects (OG No. 15/13); Rulebook on  the manner of keeping records of production, processing and trade in 
plants, plant products and regulated object (OG No. 19/13). European Commission ( 2013), Screening report 
Montenegro, Chapter  12 – Food safety, veterinary and phytosanitary policy. Viewed  at: http://edz.bib.uni -
mannheim.de/daten/edz -k/gde/13/screening_report_montenegro_ch12.pdf ; and Government of Montenegro 
(2015), Montenegro's Strategy f or Transposition and Implementation of the EU Acquis relevant for Chapter 12 
– Food Safety, Veterinary and Phytosanitary policy including a General Action Plan and a Specific Action Plan 
for Control and Eradication of Classical Swine Fever, July 2015. View ed at: https://www.eu.me/en/12 . 
149 Article 1 of the Veterinary Law (OG Nos. 30/12 and 48/15). Further related laws include: the Law on 
Animal Welfare Protection and the Law on Animal Identification and Registration. European Commission 
(2013), Screening report Montenegro. Chapter 12 – Food safety, veterinary and phytosanitary policy. Viewed 
at: http://edz.bib.uni -mann heim.de/daten/edz -k/gde/13/screening_report_montenegro_ch12.pdf . Further 
Regulations include: The 2015 Regulation on preventive measures, measures for detection, suppression and 
eradication of exotic and non -exotic diseases of aquatic animals and the healt h conditions for their placing on 
the market; the 2015 Regulation on the list of animals and products of animal origin subject to veterinary 
inspection at border inspection posts; the 2015 Regulation on the notification of consignments of animals and 
produ cts of animal origin imported into Montenegro; the 2015 Regulation on the manner of carrying out 
veterinary inspections of consignments of products of animal origin entering Montenegro; the 2016 Regulation 
on the manner of carrying out veterinary checks on  live animals imported into Montenegro; the 2015 
Regulation on preventive measures, measures for detection, suppression and eradication of exotic and non -
exotic diseases of aquatic animals and the health conditions for their placing on the market (will ent er into 
force upon accession to the EU); the 2016 Regulation on closer conditions for import and transit of animals and 
products of animal origin; the Rulebook laying down animal health condition for imports of certain birds on list 
and types of live anima ls and animal products subject to veterinary inspection (to be implemented in 2018); 
and the Rulebook on requirements for quarantine of aquaculture animals (to be implemented in 2018).  
150 Article 148 of the Veterinary Law provides that animals imported for  participation in sporting 
competitions, exercises, exhibitions and trade fairs, dogs and cats temporarily imported as well as animals 
imported for slaughter are not required  to be quarantined if, on the basis of epizootic data the situation in the 
exporti ng country is not jeopardized by the introduction of infectious animal diseases.  
151 Government of Montenegro (2015), Montenegro's Strategy for Transposition and Implementation of 
the EU Acquis relevant for Chapter 12 – Food Safety, Veterinary and Phytosani tary policy including a General WT/TPR/S/369 • Montenegro  
 
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  1 September  2017, 616 subjects were registered. Imports (and exports) of plants and plants 
products are subject to documentary, identity and plant health checks by 13 phytosanitary 
inspectors at Montenegro's 13 official entry points .152  
3.97.   The Law on Plant Health Protection provides for a list of quarantine harmful organisms 
relevant for Montenegro and a list of harmful organisms to be monitored.153 According to the 2016 
Programme on phytosanitary measures, special control measures are app lied to the imports of 
potatoes, some herbs, and certain plants.154 Import bans for phytosanitary reasons affect: 
potatoes from Mexico and countries of Central and South America for seed and consumption; 
specific plants from certain EU countries, Asia and No rth America; certain types of wood from 
non-EU countries; logs and timber from the United States and some EU countries; corn stalks and 
sorghum straw from Africa n countries; and soil, compost and substratum mixed with soil or 
compost, with plants or withou t plants, from non -European countries.155 
3.98.   Since 2012, Montenegro has prohibited the importation of tubers of potatoes from Egypt (to 
prevent the introduction of the harmful organism Ralstonia solanacearum ); certain plants 
originating in India; and certain pl ants from some regions in Italy and France (to prevent the 
introduction and spread of Xylella fastidiosa ).156 During the same period, Montenegro introduced 
more stringent import requirements for wooden packaging from China, citrus fruits from Brazil, 
and cer tain herbs and plants due to the threat of introduction and spread of harmful organisms.157 
Sanitary measures  
3.99.   Animal and animal products are subject to inspection and quarantine wherever applicable.158 
Veterinary inspectors supervise the safety of products of animal origin in production, international 
trade, wholesale and retail trade. They are also in charge of checking wild and aquaculture fish and 
their products including snails. Veterinary health checks are performed at the place of dispatch.159 
Importation o f consignments of live animals and animal products must be accompanied by 
                                                                                                                                                  
Action Plan and a Specific Action Plan for Control and Eradication of Classical Swine Fever, July. Viewed at: 
https://www.eu.me/en/12 . 
152 Entry points are located at eight road border c rossings, two at rail border crossings, one at the post 
office for border clearance, one at the airport and one at the Bar seaport.  
153 There are three specialized laboratories (phytosanitary laboratory, the laboratory for seeds and the 
one for seeds materia l) operating under the biotechnical faculty of the University o f Montenegro. More 
information on the harmful organisms is available in the 2016 Regulation amending the Regulation on the 
phytosanitary measures to prevent the introduction, spread and suppres sion of organisms harmful to plants 
and the lists of harmful organisms, plant products and monitored facilities. Viewed at: 
http://extwprlegs1.fao.org/docs/pdf/mne168449.pdf  (in Montenegrin) . European Commission ( 2013), 
Screening report Montenegro. Chapter 12 – Food safety, veterinary and phytosanitary policy. Viewed at: 
http://edz.bib.uni -mannheim.de/daten/edz -k/gde/13/screening_report_montenegro_ch12.pdf . 
154 2016 Programme of phytosanitary measures. Viewed at: 
http://extwprlegs1.fao.org/docs/pdf/mne157204.pdf  (in Montenegrin).  
155 WTO document WT/ACC/CGR/38, WT/MIN(11)/7, 5 December 2011; European Commission ( 2013), 
Screening report Montenegro, Chapter 12 – Food safety, veterinary and phytosanitary policy. Viewed at: 
http://edz.bib.uni -mannheim.de/daten/edz -k/gde/13/screening_report_montenegro_ch12.pdf . 
156 More information on these regulations is available (in Montenegrin) at: 
http://extwprlegs1.fao.org/docs/pdf/mne139613.pdf  (for import bans from Egypt); 
http://extwprlegs1.fao.org/docs/pdf/mne168317.pdf  (for import bans from India); and 
http://extwprlegs1.fao.org/docs/pdf/mne157206.pdf  (for import bans from Italy and France).  
157 More information on import control procedures is available (in Montenegrin) at: 
http://extwprlegs1.fao.org/docs/pdf/mne168318.pdf  (for China); 
http://extwprlegs1.fao.org/docs/pdf/mne156858.pdf  (for Brazil). More detailed information on  import control 
procedures and types of products is available  at: http://extwprlegs1.fao.org/docs/pdf/mne139562.pdf  (in 
Montenegrin); http://extwprlegs1.fao.org/docs/pdf/mne139560.pdf  (in Montenegrin); 
http://extwprlegs1.fao.org/docs/pdf/mne139561.pdf (in Montenegrin); and 
http://extwprlegs1.fao.org/docs/pdf/mne139564.pdf (in Montenegrin).  
158 The list of animals and products of animal origin subject to veterinary inspections at border 
inspection point s is available in the Annex of the 2015 Regulation on the list of animals and products of animal 
origin subject to veterinary inspections at border inspection posts. Viewed at: 
http://extwprlegs1.fao.org/docs/pdf/mne168473.pdf  (in Montenegri n). 
159 Montenegro currently operates nine veterinary Border Inspection Posts (BIP) (seven BIPs at land 
borders, one BIP at the Bar port and one at the Podgorica airport). The national Diagnostic Veterinary 
Laboratory in Podgorica is the only accredited body for animal diseases. European Commission ( 2013), 
Screening report Montenegro, Chapter 12 – Food safety, veterinary and phytosanitary policy. Viewed at: 
http://edz.bib.uni -mannheim.de/daten/edz -k/gde/13/screening_report_montenegro_ch12.pdf .  WT/TPR/S/369 • Montenegro  
 
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  international certificates of animal and public health.160 If an animal or an animal product does not 
comply with the domestic requirements, an official veterinarian can order its quar antine or 
temporary storage.161 Under the Veterinary Law and the Food Safety Act , Montenegro can 
introduce protective measures restricting or banning imports, exports or transit of animals, 
products of animal origin, food for animals and animal by -products i n cases of risk of introduction 
of infectious diseases (Article 55 of the Veterinary Law).162  
3.100.   Since 2016, Montenegro has introduced measures prohibiting the importation of 
consignments of live animals and animal products originating in, or being transported  through, 
Bulgaria, The former Yugoslav Republic of Macedonia, and Greece to prevent the spread of lumpy 
skin disease .163 In the same year, it applied a ban on the importation and transit of poultry, birds 
and products of poultry and birds from Bulgaria and other countries to prevent the introduction of  
Newcastle disease (OG No. 74/16).164 In 2016, Montenegro banned the import and transit of 
livestock, birds , and livestock and bird products from Hungary, Austria, Germany, France and 
other States with outbreaks of a highly pathogenic avian influenza virus (OG No. 74/16).165 
3.101.   During the same period, Montenegro introduced more stringent veterinary control and 
check measures to prevent the introduction and spread of blue tongue disease, foot and mouth 
disease, classica l swine fever, and other animal contagious diseases. The 2017 annual budget for 
obligatory measures for the protection of animal health stood at €1.38 million.166 
3.102.   Regional cooperation agreements on the obligation to notify, report and take measures in 
case o f disease exist with Serbia, and Bosnia and Herzegovina.167 
3.103.   According to the authorities, Montenegrin facilities and premises have to be improved to be 
fully in line with the EU requirements.168 Financial resources received from the European Union  are 
directed  at the building and equipment of Border Inspection Posts and phytosanitary border 
points; upgrading and developing laboratories; implementing measures for the control and 
eradication of animal diseases; and elaborating the system for safe disposal of anim al 
by-products.169 
                                                
160 More information on the required documentation is available in the 2016 Regulat ion on amending the 
Regulation on the manner of carrying out veterinary checks on live animals imported into Montenegro 
(Article  1). Viewed at: http://extwprlegs1.fao.org/docs/pdf/mne168460. pdf (in Montenegrin).  
161 European Commission ( 2013), Screening report Montenegro, Chapter 12 – Food safety, veterinary 
and phytosanitary policy. Viewed at: http://edz.bib.uni -mannheim.de/daten/edz -
k/gde/13/screening_report_montenegro_ch12.pdf . 
162 More information on the infectious animal diseases is available in the 2004 Veterinary Law: 
http:/ /extwprlegs1.fao.org/docs/pdf/mne153933.pdf . This classification is based on the former lists of the 
World Organisation for Animal Health (OIE).  The list from the 2004 Veterinary law is still applicable under the 
2015 Veterinary Law.  Article 55 of the Vete rinary Law. Viewed at: 
http://extwprlegs1.fao.org/docs/pdf/mne168305.pdf  and European Commission ( 2013), Screening report 
Montenegro, Chapter 12 – Food safety, veterinary and phytosanitary p olicy. Viewed at: http://edz.bib.uni -
mannheim.de/daten/edz -k/gde/13/screening_report_montenegro_ch12.pdf . 
163 Prohibited products include, inter alia, live cattle and wild ruminants; seeds, eggs and embryos of 
cattle; fresh meat of cattle, meat products and products produced from fresh beef meat; milk, colostrum and 
colostrum products from cattle; skin of cattle and wild ruminants. Regulation prohibiting the  import and transit 
of consignments of animals and products of animal origin in order to prevent the introduction of lumpy skin 
disease in Montenegro (OG No. 34/16). Viewed at: http://extwpr legs1.fao.org/docs/pdf/mne168344.pdf  (in 
Montenegrin) .  
164 More information on the regulation is available at: 
http://extwprlegs1.fao.org/docs/pdf/mne168316.pdf  (in Montenegrin).  
165 More info rmation on the regulation is available at: 
http://extwprlegs1.fao.org/docs/pdf/mne168315.pdf  (in Montenegrin).  
166 Montenegro 2017 Programme of obligatory measures on protection of animal health.  Viewed at: 
http://extwprlegs1.fao.org/docs/pdf/mne168431.pdf  (in Montenegrin).  
167 European Commission (2013), Screening report Montenegro, Chapter 12 – Food safety, veterinary 
and phy tosanitary policy. Viewed at: http://edz.bib.uni -mannheim.de/daten/edz -
k/gde/13/screening_report_montenegro_ch12.pdf . 
168 European Commission (2013), Screening report Montenegro, Chapter 12 – Food safety, veterinary 
and phytosanitary policy. Viewed at: http://edz.bib.uni -mannheim.de/daten/edz -
k/gde/13/ screening_report_montenegro_ch12.pdf . 
169 Financial resources amount to: €7,000,000 for building and equipment for border inspection posts 
and phytosanitary border points; €1,350,000 for upgrading and development of laboratories; €1,200,000 in WT/TPR/S/369 • Montenegro  
 
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  3.3.2.2.3   Transparency  
3.104.   Since its WTO accession , Montenegro has not submitted any SPS notifications under the 
WTO Agreement on Sanitary and Phytosanitary Measures. According to the authorities, similarly to 
standards notification (Section 3.3.2.1.3), the reasons for non -submission are that, in addition to 
its very low administrative capacities, Montenegro has been in the process of intensive 
transpositions of the EU acquis communautaire  into its national legislation; it plans to address the 
issue of notifications in this area in the course of 2018. So fa r no specific trade concerns (STCs) 
involving Montenegro were raised at the meetings of the WTO SPS Committee by other Members. 
In July and October 2017 (STC 426), Montenegro raised a specific trade concern over the Russian 
Federation's measures on imports  of its wine products to this market since 26  April of the same 
year due to an allegedly increased content of pesticides ( Metalaxyl ) and phthalate plasticizer 
particles despite no prior record of non -compliance of its wine products with the latter's standa rds. 
Despite bilateral meetings and the exchange of information, and Montenegro's request for a joint 
testing procedure of the confiscated wine , the restrictive measures remain in place. Montenegro's 
SPS enquiry point and notification authority is the AFSV PA.170  
3.3.2.3   Marking and labelling  
3.105.   Marking and labelling of food products is regulated by the Law on Food Safety 
(OG No. 57/15), and specific implementing regulations.171 The Law provides for mandatory 
labelling and marking to ensure the traceability of food and fe ed, raw materials, and substances 
incorporated in food and feed. Similar requirements apply to food for animal consumption and final 
products at all stages of production and trade. Controls are carried out by sanitary, veterinary and 
phytosanitary inspecto rs.172 Specific implementing regulations include, inter alia,  the Regulation on 
Consumer Information on Food (OG Nos. 12/16 and 83/16). Its provisions also apply to food 
intended for the final consumer and/or supplying facilities of collective nutrition, suc h as catering 
facilities, hospitals, schools, etc. providing food for the final consumer.173  
3.106.   To attain harmonization with the EU acquis , Montenegro has implemented and/or is in the 
process of implementing various product -specific regulations relating to lab elling. These 
regulations  include: the Regulation on the use of health and nutritional claims in the labelling, 
advertising and presentation of food (OG No. 6/17); the Regulation on the manner and conditions 
for placing on the market food for special nutri tional uses (OG No. 10/17); the 2016 Regulation on 
conditions and rules for processing, packaging, transport and storage of organic products 
(OG No. 93/16); and the 2014 Regulation on the labelling of pesticides (OG  No. 46/14).174  
3.107.   Labels must contain the fo llowing information: title of the product, full address of the 
producer or full address of the importer, net quantity/weight/volume, ingredients, manner of 
storage and pertinent consumer warnings.  
                                                                                                                                                  
2015 for measu res for control and eradication of animal diseases, and an additional €3,000,000 per year; and 
€120,000 for measures for control and eradication of harmful organisms, and an additional €200,000 per year. 
Government of Montenegro (2015), Montenegro's Strate gy for Transposition and Implementation of the EU 
Acquis relevant for Chapter 12 – Food Safety, Veterinary and Phytosanitary policy including a General Action 
Plan and a Specific Action Plan for Control and Eradication of Classical Swine Fever, July. Viewe d at: 
https://www.eu.me/en/12 . 
170 SPS information management system online information. Viewed at: 
http://spsims.wto.org/en/EnquiryPointsNotificationAuthorities/Search?countryCode=C893&filter=Montenegro . 
171 WTO document WT/ACC/CGR/38, WT/MIN(11)/7, 5 December 2011 and European Commission 
(2013), Screening report Montenegro, Chapter 12 – Food safety, ve terinary and phytosanitary policy. Viewed 
at: http://edz.bib.uni -mannheim.de/daten/edz -k/gde/13/screening_report_montenegro_ch12.pdf . 
172 Article 29 of the  Law on Food Safety (OG Nos. 14/07 and 57/15) and European Commission ( 2013), 
Screening report Montenegro. Chapter 12 – Food safety, veterinary and phytosanitary policy. Viewed at: 
http://edz.bib.uni -mannheim.de/daten/edz -k/gde/13/screening_report_montenegro_ch12.pdf . 
173 Article 1 of the Rulebook (in Montenegrin); Government of Montenegro (2015), Action Plan for acquis 
alignment, Chapter 11 - Agriculture an d Rural Development , June, Podgorica. Viewed at: 
https://www.eu.me/en/11 . 
174 Government of Montenegro (2015), Montenegro's Strategy for Transposition and Implementation of 
the EU Acquis relevant for Chapter 12 – Food Safety, Veterinary and Phytosanitary policy including a General 
Action Plan and a Specific Action Plan for Control and Eradication of Classical Swine  Fever, July. Viewed at: 
https://www.eu.me/en/12 . WT/TPR/S/369 • Montenegro  
 
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  3.108.   All GMOs or products containing, consisting of or deriving  from GMOs remain subject to 
mandatory GMO labelling. Products must be marked with the following: GMO; product contains 
GMO; product consists of GMO; or product derives from GMO; and a unique identification code. 
Moreover, suppliers of GMOs are obliged to maintain a database and put in place a monitoring and 
identification procedure, to record each placement on the market, and the name of the person who 
provided or obtained GMOs (except for the end consumers) for a period of five  years.175 In line 
with its EU  accession process, Montenegro is to implement a Rulebook on traceability and labelling 
of genetically modified organisms and the traceability of food and feed products produced from 
GMOs in 2018.176  
3.3.3   Competition policy and price controls  
3.3.3.1   Competition policy  
3.109.   Montenegro considers that free market competition has a direct and significant impact on 
its overall economic development. During the review period, important regulatory and institutional 
reforms have been undertaken in line with commitments under Article 73 of the Stabili sation and 
Association Agreement (SAA) between Montenegro and the European Union for the 
implementation of EU standards in competition rules; they also involve the establishment  of a 
clearer legal framework  and an operationally independent  institution, and improve the efficiency of 
implementation.  
3.3.3.1.1   Legislation  
3.110.   A new Law on Protection of Competition was adopted in 2012 and led, in early 2013, to the 
creation of the Montenegrin Agency for Protection of Competition (MAPC) (Section 3.3.3.1.2).177 
The 2012 Law applies to acts and practices which have as their object or effect the distortion of 
competition in the territory of Montenegro, irrespective of where they are committed.178 In line 
with generally accepted principles of competition law, the 20 12 Law prohibits: agreements 
preventing, restricting or distorting competition; abuses of dominant position; and concentrations 
preventing, restricting or distorting competition or free development of an open market 
economy.179 Assessments are made case -by-case on the basis of the level and dynamics of 
changes in the structure of the relevant market, restrictions and possibility of equal access to the 
market by new competitors, changes restricting the possibilities for market supply based on the 
level of bene fits to consumers , and other circumstances affecting impairment of competition.180  
3.111.   The scope of application of the 2012 Law includes a wide range of economic operators, 
including public bodies, state administration bodies, local administration bodies and lo cal 
self-government bodies, when they engage in an economic activity directly or indirectly and 
participate in trade in goods and/or services.181 It also applies to undertakings performing 
activities of public interest and to entities to whom the right to pe rform a particular activity was 
conferred by an act of a competent public body insofar as the application of the Law would not 
considerably obstruct the performance of such activities.182  
3.112.   By-laws, adopted by the end of 2014 and in force, inter alia,  set def initions and 
methodologies but they also exempt agreements relating to research and development, some 
vertical agreements, distribution of spare parts and servicing of motor vehicles, insurance, 
                                                
175 Articles 49, 48 and 45 of the Law on GMO (OG No. 22/08). Viewed at: 
https:// www.wto.org/english/thewto_e/acc_e/cgr_e/WTACCCGR27A3_LEG_5.pdf . 
176 Government of Montenegro (2015), Montenegro's Strategy for Transposition and Implementation of 
the EU Acquis relevant for Chapter 12 – Food Safety, Veterinary and Phytosanitary policy inclu ding a General 
Action Plan and a Specific Action Plan for Control and Eradication of Classical Swine Fever, July. Viewed at: 
https://www.eu.me/en/12 . 
177 Law on Protection of Competition  (OG No. 44/12). Viewed at: 
http://www.azzk.me/1/doc/Engleska%20verzija/zakon -
eng/New%20Law%20on%20Protection%20of%20Competition.pdf ; and online information. Viewed at : 
http://www.azzk.me/novi/joomlanovi/en/ .  
178 Law on Protection of Competition , Article 2.  
179 Law on Protection of Competition , Article 7, para. 1.  
180 Law on Protection of Competition , Article 7, para. 2.  
181 Law on Protection of Competition , Article 3.  
182 Law on Protection of Competition , Article 5.  WT/TPR/S/369 • Montenegro  
 
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  technology transfer, and road, rail and inland waterways and maritime traffic (Block Exemption 
Regulations).183 Agreements with the object or effect of preventing, restricting or distorting 
competition not falling within one of the Block Exemption Regulations are prohibited and void 
unless of minor importance or indiv idually exempted upon request on the basis of pro -competitive 
effects outweighing anti -competitive effects (with the exception of hard -core cartel agreements 
i.e. price fixing, output restrictions and division of markets or sources of supply that are not 
subject to exemption).184  
3.113.   Abuses of a dominant position are prohibited, with a presumption of a dominant position of 
undertakings with a market share exceeding 50% for a single undertaking or 60% for two or more 
undertakings without significant competition b etween them.185  
3.114.   Mergers and acquisitions as well as joint ventures are subject to ex-ante control, with the 
exception of financial transactions, bankruptcy or liquidation proceedings, and joint ventures 
between undertakings that remain independent and are c onsidered pro -competitive.186 They are 
prohibited if they create or strengthen a dominant position unless their pro -competitive effects 
outweigh negative effects.187 
3.3.3.1.2   Institutional framework and procedures  
3.115.   The Ministry of Economy (MEK) remains responsible for designing and proposing 
legislation, policies and strategies, while the 17 -staff MAPC, an independent authority, fulfils most 
law and relevant by -law enforcement functions.188 Its Director is appointed by the Government 
upon MEK 's proposal for a four -year te rm and can be dismissed on request and/or upon 
misconduct.189 MAPC Departments with enforcement functions are focused on: communications, 
information technology and media; financial markets, health, liberal professions and other 
services; and, energy, constr uction, forestry, mining, tourism, transport, agriculture and chemical 
products.190 Its budget is derived from the State Budget allocations, the sole regular source of 
funding , and fees paid by applicants.191 Excess revenue, including the entire amount from fe es, is 
returned to the overall government budget. In 2015 and 2016, government funding accounted for 
37.9% and 44.1% of MAPC revenues, respectively.  
                                                
183 All by -laws are available online in Montenegrin. Viewed at: 
http://www.azzk.me/novi/jooml anovi/en/legal -framework . They include: the Rulebook on the method and 
criteria for determining the relevant market, (OG No. 18/13); the Rulebook on the content and manner of 
submitting request for individual exemption from the restrictive agreements, (OG No. 18/13); the Block 
Exemption Regulation of horizontal agreements on research and development, (OG No. 13/14); the Block 
Exemption Regulation of horizontal agreements on specialisation, (OG No. 13/14); the Block Exemption 
Regulation of agreements on the distribution of spare parts and servicing of motor vehicles, (OG No. 13/14); 
the Block Exemption Regulation for vertical agreements, (OG No. 13/14); the Block Exemption Regulation of 
agreements in insurance sector (OG No. 52/14); the Block Exemption Regula tion restrictive agreements on the 
technology transfer (OG No. 59/14); the Block Exemption Regulation of agreements in Road, Rail and Inland 
Waterways and agreements on consortium in maritime traffic, (OG No. 59/14); and the Instructions on the 
content and  manner of submitting merger notification, (OG No. 18/13).  
184 Law on Protection of Competition , Articles 7, 9, 12 and 13.  
185 Law on Protection of Competition , Articles 14 and 15.  
186 Law on Protection of Competition , Articles 16 and 17.  
187 Law on Protection of  Competition , Article 18.  
188 Prior to the MAPC, the work on competition law and policy was first fully under the MEK and 
administered by a Directorate within the Ministry (2006 -2008), and then under  the Administration for 
Protection of Competition (2008 -2013). Article 19 of the Law on Protection of Competition  contains a full list of 
competencies, including monitoring and market analysis, competition advocacy, international cooperation and 
reporting.  
189 Law on Protection of Competition , Articles 21 and 23.  
190 Online information. Viewed at: http://www.azzk.me/novi/joomlanovi/en/contact  and Report on Work 
of the Agency on Protection of Competition for 2016, available in Montenegrin language. Viewed at:  
http://www.azzk.me/novi/joomlanovi/en/other -documents/reports . 
191 The fees for the issue of decisions and acts are determined by the Tariff on fees adopted by the 
Agency with the  approval of the Government. They are registered at the Agency's special account with the 
Central Bank of Montenegro. Revenues from fees are unpredictable. Other potential sources include donations, 
which may not be made by undertakings subject to the appl ication of the law. Law on Protection of 
Competition , Article 24.  WT/TPR/S/369 • Montenegro  
 
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  3.116.   Proceedings before the MAPC are governed by the 2012 Law as well as by several internal 
acts.192 The MAPC ha s the investigative powers necessary to fulfil its mandate and may issue 
sectoral analyses.193 However, its decision making power in case of anti -competitive agreements 
and abuses of dominance is limited to a prohibition of enforcement of the agreement in qu estion, 
and the ordering of remedial measures, or the approval, annulment, revocation or amendment of a 
requested exemption with or without conditions.194 Concerning the appraisal of concentrations, it 
decides upon their approval and can impose conditions or  order remedial measures and 
behavioural and structural remedies, and set their time limits.195 Non-observance of MAPC's 
procedural requests and orders can lead to a fine ranging from €500 to €5,000, and up to 3% of 
aggregate turnover achieved in the financi al year preceding the year in which the proceedings 
have been initiated.196 Although the Law on Protection of Competition does not provide for 
imprisonment ; imprisonment is prescribed by Article 270 of the Criminal Code , provid ing such a 
sanction in the case  of abuse of a monopolistic position.  
3.117.   A leniency programme has been in place since October 2012, when the new Law on 
Protection of Competition came into force (Article 69 of the Law); so far one request for 
determining measures of release from fining was r eceived in 2013, and it was rejected due to 
non-fulfilment of the conditions under the initiated procedure.197 Penal fines may range from 1% 
to 10% of aggregate turnover in the financial year preceding the year in which the anti -
competitive behaviour (classi fied as misdemeanour) was committed, or from €4,000 to €40,000 
for the lack of a request for ex-ante merger control. However, fines may only be imposed by the 
Court for Misdemeanours upon MAPC request.198 Smaller fines can be imposed on individuals 
involved.  The limitation period for initiating misdemeanour proceedings is two years from the day 
on which  the misdemeanour was committed and prosecution of investigations may not be 
maintained beyond three or four years after the misdemeanour depending on the appl ying law.199 
3.118.   Currently , the 2012 Law on Competition is under revision to, inter alia : extend the 
jurisdiction of the MAPC by including state aid currently under the State Aid Control Commission 
under its competence, thus becoming a single body in the protect ion of competition and state aid; 
and establish a MAPC Council consisting of a president and two members. Additionally, the Director 
of the Agency would have two  Deputies – one for competition and a second for state aid. The 
adoption of the amendments to t he 2012 Law was scheduled for late 2017 but is still pending. The 
limitation period for initiating misdemeanour proceedings would be extended from two to 
three  years.200  
3.119.   Regarding international cooperation, the MAPC is, inter alia,  a member of the Internati onal 
Competition Network (ICN), active in the Regional Centre for Competition, and a signatory to 
memoranda of understanding with relevant bodies from Austria, Bulgaria, Croatia, and Serbia.201 A 
memorandum of understanding and cooperation with the domestic Electronic Media Agency is 
under preparation .  
                                                
192 These include: The Statute of Agency; Tariff of Fees; Financial plan; Rules on Protection of 
Confidential Business Information; Rules on Internal Organization and Systematization; Rules on  the Official ID 
Card, and other internal rules. They are available in Montenegrin, viewed at: 
http://www.azzk.me/novi/joomlanovi/en/internal -rules. Law on Protection of Competition , Articles 26 -39; the 
Report on Work of the Agency on Protection of Competition for 2016, available in Montenegrin. Viewed at : 
http://www.azzk.me/novi/joomlanovi/en/other -documents/rep orts. 
193 Law on Protection of Competition , Articles 26 -39 and 40.  
194 Law on Protection of Competition , Articles 42 and 46 -49. 
195 Law on Protection of Competition , Articles 50 -59. 
196 Law on Protection of Competition , Article 60.  
197 Law on Protection of Competition , Article 69 and related by -laws. 
198 Law on Protection of Competition, Articles 67 and 68.  
199 According to the Law on Protection of Competition (Articles 67, 68 and 70) the limitation period for 
the initiation of proceedings is two years, or absolute for four years. Under the Law on Misdemeanours 
(Article  59), in the case of violations in the area  of protection of competition, it is possible to prescribe a longer 
limitation period of the initiation and conduct of the misdemeanour proceedings, but not longer than 
three  years. The statute of limitations of the offen ce/misdemeanour prosecution arises in any case when twice 
as long as the law requires for the statute of limitations of prosecution  expires.  
200 Report on Work of the Agency on Protection of Competition for 2016, available in Montenegrin. 
Viewed at : http://www.azzk.me/novi/joomlanovi/en/other -documents/reports . 
201 Report on Work of the Agency on Protection of Competition for 2016, available in Montenegrin. 
Viewed at : http://www.azzk.me/novi/joomlanovi/en/other -documents/reports . WT/TPR/S/369 • Montenegro  
 
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  3.3.3.1.3   Enforcement  
3.120.   MAPC's enforcement activity has been limited due to its relatively modest financial and 
human resources (Section 3.3.3.1.2 and below).202 Between 2013 and 2017 (December), only 
four decisions relatin g to anti -competitive agreements were taken.203 Only one case involving the 
existence of a price fixing cartel agreement (between the four largest participants in the market of 
printed daily newspapers ) has led to the imposition of a fine (of less than €37,0 00 for the 
undertaking and €1,000 for an individual involved ).204 In other cases, the Court dismissed or 
suspended proceedings, often based on the statute of limitations, and a 2016 bid -rigging case on 
an agreed price under a contract on joint participation of two firms (Montemedicom Ltd  and 
Urion  Ltd) offered at a public procurement bid of the Health Ins urance Fund of Montenegro for 
X-ray films is still pending , as the MAPC appealed the Misdemeanour Court's decision acquitting 
these firms (Section  3.3.5). Re garding abuse of dominance, three cases were resolved in 2013 and 
only three  cases were handled in the period 2014 -16. In the area of merger control, the number of 
submitted requests and resolved cases increased (Table 3.8); the MAPC initiated its first in -depth 
investigation of a merger case in 2015.205  
Table 3.8 Enforcement, 2012 -17 
(a) Merger control, 2013 -17 (October)  
 2013  2014  2015  2016  2017 
(until Oct.)  
Submitted requests  21 26 35 33 26 
Resolved cases  15 19 35 29 30a 
Approved mergers  14 - 33 28 30 
Suspension of proceedings  1 - 1 1 0 
Rejected mergers  - - 1 0 0 
Cases transferred to the next year  6 7 7 11 6b 
a Ten decisions issued based on notifications from previous year (2016).  
b In progress.  
(b) Antitrust decisions, 2012 -16 
 2012  2013  2014  2015  2016  
Restrictive agreements       
Decision  - 1 1 1 1 
Suspension of proceedings  1 - 1 - 1 
Rejection  - - - - - 
Abuse of dominant position       
Decision  3 - - - 2 
Suspension of proceedings  2 1 3 1 - 
Rejection  - 1 - - - 
Source:  Report on Work of the Agency on Protection of Competition for 2016, available in Montenegrin. 
Viewed at: http://www.azzk.me/novi/joomlanovi/en/other -documents/reports ; information provided 
by the authorities.  
3.121.   During the review period, the MAPC conducted studies on the state of competition in the 
markets of water supply in coastal municipalities, pilot service s at Boka Bay, the retail market of 
distribution of audio -visual media content, purchase and sale of chewing gums and candies, and 
life insurance services. In addition, with EU support , it undertook sector analyses on the energy, 
pharmaceutical products tr ade, construction, retail trade, insurance and telecommunications 
markets.206  
                                                
202 European Commission (2016), Montenegro 2016 Report , Commission Staff Working Document 
SWD(2016) 360 final, 9 November, Brussels. Viewed at: https://ec.europa.eu/neighbourhood -
enlargement/sites/near/files/pdf/key_documents/2016/20161109_strategy_paper_en.pdf . 
203 Report on Work of the Ag ency on Protection of Competition for 2016, available in Montenegrin. 
Viewed at : http://www.azzk.me/novi/joomlanovi/en/other -documents/reports . 
204 Report on Work of the Agency on Protection of Competition for 2016, available in Montenegrin . 
Viewed at: http://www.azzk.me/novi/joomlanovi/en/other -documents/reports .  
205 European Commission (2016), Montenegro 2016 Report , Commission Staff Working Document 
SWD(2016) 360 final, 9 November, Brussels. Viewed at: https://ec.europa.eu/ neighbourhood -
enlargement/sites/near/files/pdf/key_documents/2016/20161109_strategy_paper_en.pdf . 
206 Report on Work of the Agency on Protection of Competition for 2016, available in Montenegrin . 
Viewed at: http://www.azzk.me/novi/joomlanovi/en/other -documents/reports . WT/TPR/S/369 • Montenegro  
 
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  3.122.   According to the European Commission, overall the competition framework of Montenegro 
has been moderately in line with the EU acquis , with a good level of legislative rules on ant itrust 
and mergers, but is subject to implementation and enforcement weaknesses.207 Should the MAPC 
be empowered to impose fines directly, and to increase its staffing and expertise, enforcement 
would improve. Furthermore, the strict limitation period for in itiating misdemeanour proceedings 
(Section 3.3.3.1.3) and the Court's limited capacity to handle complex competition cases are an 
issue.  
3.3.3.2   Price controls  
3.123.   Price controls remain in place in specific areas to protect consumers' interests.208 Under 
the Law on Medi cines (OG Nos. 56/11 and 06/13), the Agency for Medicines and Medical Devices 
sets ceiling wholesale prices for medicines for human use that are prescribed and dispensed at the 
expense of the mandatory Health Insurance Fund in accordance with criteria set under the Decree 
for Setting Maximum Prices of Medicines (OG Nos. 44/15, 65/15 and 57/16). These ceiling prices 
are available online ( www.calims.me ) and the  list of medicines is updated annually; in 2017, it 
covered 1,1 00, mostly generic , medicines. The ceiling prices of oil derivatives are set by the State, 
as stipulated by the Decree on the Method of Setting Maximum Retail Prices of Petroleum Products 
(OG Nos. 52/02, 55/02, 23/03, 32/05, 35/05, 73/08, 73/10 and 63/15).  Under this scheme , petrol 
and diesel (gas oil) prices are, inter alia,  based on Platts oil price quotations and float within a 5% 
band (plus or minus); these prices are updated every two weeks and are available online at MEK's 
website. Electricity prices are regulated for grid services whereas prices for generation are 
determined in line with changes at the regional (HUPX, Hungarian Power Exchange) market prices. 
This mechanism and the regulation of the supplier of the last resort in cases where there are no 
new suppliers are aimed at protecting certain categories of consumers. Under Article 249 of the 
Energy Law , electricity tariff increases for households and small consumers cannot exceed the 
weighted average electricity price of the previous year and the  price of traded futures/securities 
for the following year based on a reference energy exchange market nominated by the Agency 
(currently HUPX); maximum tariff rise levels are set at 7% in 2017 and 6% in 2018 and 2019 
(Section 4.3.3.2).  
3.3.3.3   Consumer protectio n policy  
3.124.   Consumer protection is guaranteed by the Constitution which prohibits any action that may 
harm health, safety and privacy of consumers.209 Consumer policy has been set out in several 
national consumer protection programmes  since  2008 .210 Under the SAA , Montenegro is  required  
to harmonize its consumer protection standards with the EU standards, and stimulate and ensure: 
an active consumer protection policy; more information and development of NGO sectors; 
harmonization of consumer protection legislation ; effective and legal consumer protection in order 
to improve the quality of goods and services intended for consumers and maintain appropriate 
safety standards; access to justice in case of consumer disputes; and exchange of information on 
dangerous produ cts.211  
3.125.   The Law on Consumer Protection (OG Nos. 02/14 and 43/15) regulates the protection of 
consumers' rights in purchasing and other forms of marketing of products. In addition, several 
                                                
207 European Commission (2016), Montenegro 2016 Report , Commission Staff Working Document 
SWD(2016) 360 final, 9 November, Brussels. Viewed at: https://ec.europa.eu/neighbourhood -
enlargement/sites/near/files/pdf/key_documents/2016/20161109_strategy_paper_en.pdf . 
208 At the time of its WTO accession , Montenegro undertook to apply price control measures in a 
WTO-consistent manner, including by taking account of the interests of exporting WTO Members, and to 
publish regularly notices of the goods and services subject to  state price controls. WTO document 
WT/ACC/CGR/38, WT/MIN(11)/7, 5 December 2011.  
209 2007 Constitution Article 70. Viewed at: 
https://www.constituteproject.org/consti tution/Montenegro_2007.pdf?lang=en . 
210 EU Commission (2012), Screening Report – Montenegro – Consumer protection.  Viewed at: 
https://ec.europa.eu/neighbourhood -
enlargement/sites/near/files/pdf/montenegro/screening_reports/screening_report_montenegro_ch28.pdf ; 
European Commission (2016), Montenegro 2016 Report , COM(2016) 715 final. Viewed at: 
https://ec.europa.eu/neighbourhood -
enlargement/sites/near/files/pdf/key_documents/2016/20161109_strategy_paper_en.pdf . 
211 SSA Article 78. View ed at: 
http://ec.europa.eu/world/agreements/downloadFile.do?fullText=yes&treatyTransId=12781 . WT/TPR/S/369 • Montenegro  
 
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  other laws contain relevant provisions in numerous areas.212 The overal l responsibility for general 
consumer protection policy lies with the Department of Consumer Protection within the MEK. The 
Consumer Protection Centre (CEZAP), an independent non -profit and self -financed organization, 
participates in all consumer protectio n activities (policy making, drafting of legislation, and raising 
awareness of consumers) of the Government, makes publicly available all relevant information and 
data in its possession, and informs consumer s about their rights.213  
3.126.   The Administration for Inspection Affairs, an independent body of the state administration 
system established in 2012 by merging 26 inspectorates of various ministries and other State 
agencies, is responsible for market surveillance and protection of consumers' health, safety an d 
economic interests.  Between 2012 and 2016, a total of 15,192 inspections (safety and non -safety 
related) were performed by the Administration for Inspection Affairs which found 
294,866  dangerous products (327 types of products in 2016) and imposed: a permanent traffic 
ban on 30,594 items  (173 types of products in 2016); a temporary traffic ban on 264,272 items  
(154 types of products in 2016); and a recall in more than 40 cases and on 5,701 items  (49 types 
of products in 2015, 67 types of products in 2016) . In 2014, the Central Bank of Montenegro 
(CBCG) began its consumer credit oversight functions through the examination of compliance of 
licensed banks and micro -finance institutions, and the handling of complaints submitted by users 
of these services; some  34 consumer complaints of clients concerning  the services provided by 
banks were considered and action was taken by the CBCG.214 As from 2007, the Arbitration Board 
for Out -of-Court Settlement of Consumer Disputes, an independent body acting under the 2014 
Law on Consumer Protection and the Rulebook on the Arbitration Committee, has resolved 
disputes between consumers and traders,  offering consumers faster and cheaper protection of 
their rights by removing financial and administrative as well as procedural h urdles.215 Since 2016, 
its operations have been suspended pending the settlement of concerns related to the financing of 
its operations, an issue to be settled in the course of 2018. Between 2009 and April 2014, 
15 consumer complaints were resolved by the Ar bitration Board. Since 2012, the majority  of 
complaints have been  related to the lack of conformity of products, services of public interest, 
i.e. those related to electricity, telephone, internet and cable operators, as well as the incorrect 
indication of  prices and information on products.  
3.127.   According to the European Commission, whereas an overall solid legal and institutional 
framework exists, implementation difficulties relating to the fragmented nature of the existing 
legislation and regulations are noticeable.216 Consumer protection shortcomings were identified in 
the areas of public health (in particular with regard to inequalities in access to health protection), 
tobacco control, and drug abuse prevention; some progress was made on non -communicable 
diseases, cancer screening, removal and transplantation of human tissues, and cross-border 
healthcare. Improvements in administrative and enforcement capacity would ensure better 
implementation of the regulations in place.  
                                                
212 They include: the Law on Consumer Credits (OG No. 35/13); the Law on Tourism (OG Nos. 61/10 
and 53/11); the Law on Obligations (OG No. 4/11); the Law on General Product Safety (OG No. 48/08); the 
Law on Market Inspection (OG No. 53/11); the Law on Inspection Control (OG Nos. 39/03 and 76/09); the Law 
on Internal Trade (OG No. 49/08); the Law on Electronic Commerce (OG No. 56/13); the Law on Electronic 
Communications (OG Nos. 50/08, 70/09 and 49/10); the Law on Electronic Media (OG Nos. 46/10 and 6/13); 
the Law on Energy (OG No. 28/10); the Law on Technical Require ments for Products and Alignment 
Assessment (OG No. 53/11); the Law on Standardization (OG No. 13/08); the Law on Metrology 
(OG No. 79/08); the Law on Accreditation (OG No. 54/09); the Law on Food Safety (OG No. 14/07 and 40/11); 
the Law on Obligations and  Basic Property -Legal Relations in Air Transport (OG No. 18/11); the Law on 
Contractual Relations in Railway Transport (OG No. 41/10); the Law on Local Self -Government 
(OG Nos. 88/09, 03/10 and 38/12) etc. Negotiating Position of Montenegro for the Intergo vernmental 
Conference on Accession of Montenegro to the European Union,  Chapter 28 – Consumer and Health Protection.  
213 Negotiating Position of Montenegro for the Intergovernmental Conference on Accession of 
Montenegro to the European Union,  Chapter 28 – Consumer And Health Protection, p. 17.  
214 Central Bank of Montenegro (2016), Annual Report 2015 , Podgorica.  
215 Negotiating Position of Montenegro for the Intergovernmental Conference on Accession of 
Montenegro to the European Union,  Chapter 28 – Consumer And H ealth Protection.  
216 European Commission (2016), Montenegro 2016 Report , Commission Staff Working Document 
SWD(2016) 360 final, 9 November, Brussels. Viewed at: https://ec.europa.eu/neighbourhood -
enlargement/sites/near/files/pdf/key_documents/2016/20161109_strategy_paper_en.pdf . WT/TPR/S/369 • Montenegro  
 
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  3.3.4   State trading, state -owned enterp rises, and privatization  
3.128.   State involvement in the economy, including trade, appears to be limited as a result of the 
privatization process undertaken over the past decade (see below). The majority of the remaining 
state-owned enterprises (SOEs) are of stra tegic importance to the Montenegrin economy in such 
fields as energy, broadcasting, transport, and tourism. They include the Port of Bar, Montenegro 
Railways, Montenegro Airlines, airports, four merchant ships, Plantaze Vineyards, the postal 
services and s ome tourism companies (Sections 3.3.1.2, 4.4.2 and 4.4.4).217 Furthermore, in 
healthcare a public health institution, the Pharmacy of Montenegro (Montefarm) , is operational.218 
As of October 2017, there were 60 companies in which  the State or state funds held shares. These 
entities are registered as joint -stock companies, with the Government appointing one or more 
representatives to each Board based on their ownership structure. All must provide an annual 
report to the Government and are subject to independent audits. As at end -December 2016, the 
internal debt of Montenegrin SOEs dropped to €1.86 million, compared to €2.27 million at 
end-December 2015.219 No data from 2012 onwards on the share of the SOEs ' output in GDP, total 
employment, production and trade (dom estic and foreign) or budgetary outlays to support them 
were available from the authorities .  
3.129.   The Government is the main institution responsible for privatization, one of its long -term 
policies.220 In accordance with  the Law on Economic Privatization (OG Nos . 23/96, 6/99, 59/00 and 
42/04) , the Privatization and Capital Projects Council (now Privatization and Capital Investment 
Council) has managed, controlled, and implemented the privatization process  since 1999; it has 
also proposed and coordinated all activ ities for capital projects in Montenegro. The Prime Minister 
is the president of the Privatization and Capital Investment Council. Each year, the Council 
announces and publishes in the Official Gazette the plan for privatization that lays out the 
companies  to be privatized, the methods of their privatization, and how foreign investors can 
participate in the process.221 Under the 2017 Plan , the main privatization objective was increasing 
the competitiveness and efficiency of operations of SOEs, encouraging for eign investments and 
entrepreneurship in all sectors, increasing employment and improving living standards.222  
3.130.   Privatization methods include the sale of shares and property by public tenders, 
valorisation of tourism locations or companies through public -private partnership, sale of shares on 
the stock exchange, and sale of shares and property by public auction. Public tender is conducted 
in accorda nce with the Decree on Sale of Shares and Company Assets by Public Tender; an Auction 
Commission conducts the process in line with the Regulation on Sale of Shares and Assets through 
Public Auction, and an invitation is published, inter alia, on the webpag es of public sector agencies 
and the international press depending on the value of the company. Where the Government or 
government funds are majority owners, the decision to sell a property whose value exceeds 
€50,000 must be approved by the Privatization and Capital Investment Council. Privatization 
                                                
217 Wine is a relatively important agricultural export item for Montenegro (Sections 1.3.2, 3.3.2.2.3 , and 
4.1.1.2). Plantaze , with a production of 22 million kilo grams of wine grapes and grapes for fresh consumption 
as well as sales of over 17 million bottled products annually (out of which 90% are wines) in 35 countries of 
the world , has a leading posit ion in the region; it is also involved in fish ponding and peach production 
(http://www.plantaze.com/company/activities/ ). European Commission (2016), Montenegro 2016 Report , 
Commission Staff Work ing Document SWD(2016) 360 final, 9 November, Brussels. Viewed at: 
https://ec.europa.eu/neighbourhood -
enlargement/sites/ne ar/files/pdf/key_documents/2016/20161109_report_montenegro.pdf .  
218 Montefarm supplies the population and health care institutions with medicines and other means of 
treatment. They inter alia  cover: the pharmaceutical healthcare sector through 45 pharmacies  covering all 
municipalities; and wholesale through commercial services and warehouses. In the area of wholesale , 
Montefarm  supplies public health institutions (i.e. its pharmacies, health centres, general and specialized 
hospitals, the Clinical Centre of Montenegro, and Institute for Health of Montenegro) inter alia  with: medicines; 
medical supplies; disposable medical suppli es; other consumables; dental materials; and, hemodialysis and 
peritoneal dialysis and pharmaceutical chemicals. It also supplies its pharmacies with a complete 
parapharmacy programme. Montefarm's supplies are acquired through tenders placed on its webpage . Online 
information. Viewed at: http://www.montefarm.co.me/index.html . 
219 Government of Montenegro (undated), Economic Reform Programme for Montenegro 2017 –2019.  
220 U.S. Department of Commerce (2017), Montenegro Country Commercial Guide 2016 . Viewed at: 
https://me.usembassy.gov/wp -content/uploads/sites/250/2017/02/Montenegro_2016_CCG.pdf . 
221 More informati on about the Council and the actual privatization plan is available on the Council's 
website: www.savjetzaprivatizaciju.me/en .  
222 Decision on the Privati zation Plan for 2017, 23 February 2017. Viewed a t: 
http://www.savjetzaprivatizaciju.me/en/privatization -plan/.  WT/TPR/S/369 • Montenegro  
 
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  through stock exchange sale is conducted on the proposal of the Government and government 
funds owning the companies' shares. Shares whose nominal price has been reduced by 95% due 
to stock price fluctuations c an be offered under different conditions upon consent of the Council 
and in accordance with the rules of the Montenegro Stock Exchange.223  
3.131.   The privatization process seems to be in its final phases.224 Since the process began in  
1999, nearly 90% of Montenegrin  SOEs have been privatized, including all those involved in 
banking, telecommunications and oil distribution.225 Between 2012 and 2017, five SOEs involved in 
dairy production, chemicals, cargo handling and hotel activities were privatized; the complex 
surrou nding the privatized hotel was leased , while the assets of a lumber company (Gornji Ibar 
Rožaje) were tendered for lease, the assets of a tobacco firm (Novi duvanski kombinat, Podgorica 
JSC) were tendered for capital increase and the long -term lease of two tourist sites owned by the 
state was valued. It was planned that i n 2017 eight SOEs would be privatized through public 
tenders  and 8 companies through stock exchange sale , and that 26 tourism locations or companies 
would be  valorised through public -privat e partnership (Table 3.9).226 None of the seven largest 
SOEs listed at the time of WTO accession has been privatized yet; four of them were included in 
the 2017 privatization plan.227 
Table 3.9 Companies/property planned to be  privatized in 2017  
Company  Activity  Nominal 
amount of the 
registered 
capital 
(€ million)  State's 
share 
(%) % of 
capitala to 
be 
privatized  
Companies/property to be privatized through public tenders  
Institute "Dr. Simo Milošević" JSC - Igalo 
(sale of shares and/or capital increase)  Institute for 
physical medicine, 
rehabilitation and 
rheumatology  52.2 19.20  56.48  
HG "Budva Riviera" JSC Budva (sale of 
shares)  Hotel group  80.9 41.63  58.73  
HTE "Ulcinj Riviera" JSC Ulcinj  (sale of 
shares and/or capital increase and/or 
valori sation of a part of property)  Hotel corporation  60.2 10.14  63.52  
"Institut of Ferrous Metallurgy" JSC, Nikšić 
(sale of shares and/or capital increase)  Technical testing 
and analyses  5.2 51.00  51.12  
"Montecargo" JSC Podgorica  Railroad cargo 
transport  17.5 85.44  51.00  
"Port of Bar" JSC - Bar (sale of shares and 
capital increase)  Handling of cargo  70.3 54.06  30.00  
                                                
223 Online information. Viewed at: http://ww w.savjetzaprivatizaciju.me/en/privatization -plan/ and 
information provided by the authorities.  
224 EIU (2017), Country Report – Montenegro , 15 February; U.S. Department of Commerce (2017), 
Montenegro Country Commercial Guide 2016 . Viewed at: https://me.usembassy.gov/wp -
content/uploads/sites/250/2017/02/Montenegro_2016_CCG.pdf . 
225 In the early 1990s , Montenegro's 386 companies with state ownership characteristi cs were 
transformed into joint -stock or limited liability companies (with private, mixed, state or cooperative 
ownership). Their employees were granted 10% of their shares free of charge, and were allowed to purchase 
additional shares (up to 30% of the out standing shares), offered at a discount and to be paid in instalments. 
The remaining shares were transferred to three state -owned funds – the Investment and Development Fund, 
the Pension and Disability Fund, and the Employment Agency. Some 63 of these comp anies have subsequently 
been sold through public tenders. More than 200 companies were privatized through Mass Voucher 
Privatization (MVP), where the adult population received voucher points and was given the choice to invest 
their points in individual com panies or in six privatization funds (HLT Fund, Eurofond, Trend, Atlas Mont, 
Moneta and MIG). WTO document WT/ACC/CGR/13, 30 May 2006. U.S. Department of Commerce (2017), 
Montenegro Country Commercial Guide 2016 . Viewed at: https://me.usembassy.gov/wp -
content/uploads/sites/250/2017/02/Montenegro_2016_CCG.pdf ; and online information viewed at: 
https:/ /www.forbes.com/places/montenegro/ . 
226 The 2016 Privatization Plan envisaged the privatization of nine companies through the sale of shares 
and assets via public bids. Government of Montenegro (2017), Economic Reform Programme for Montenegro 
2017–2019, January.  
227 WTO document WT/ACC/CGR/38, WT/MIN(11)/7, 5 December 2011.  WT/TPR/S/369 • Montenegro  
 
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  Company  Activity  Nominal 
amount of the 
registered 
capital 
(€ million)  State's 
share 
(%) % of 
capitala to 
be 
privatized  
"Marina" JSC - Bar (sale of shares)  Marina  8.8 .. 54.57  
"Castello Montenegro" JSC - Pljevlja (sale 
of shares)  Manufacturing of 
work clothing  1.9 87.00  86.81  
Companies to be privatized through stock exchange saleb 
"Papir" JSC, Podgorica  Non-specialized 
wholesale  0.4 19.47  23.99  
"Agrotransport " JSC, Podgorica  Road freight 
transport  1.9 86.81  52.41  
HTP "Berane" JSC, Berane  Hotel 5.2 .. 15.35  
"Dekor" JSC, Rožaje  Production of 
other paper and 
cardboard 
products  4.6 .. 22.59  
"Metalprodukt" JSC, Podgorica  Repairing of 
household 
appliances and  
home and garden 
equipment  0.4 .. 8.37 
"Montenegroturist" JSC, Budva  Tour-operator  2.1 .. 29.67  
"Crnagoracoop" JSC, Danilovgrad  Tea and coffee 
producer  3.4 10.63  10.63  
.. Not available.  
a The "capital to be privatized" includes the capital owned by the State, the Employment Bureau of 
Montenegro, the Pension and Disability Insurance Fund of Montenegro and the Investment and 
Development Fund.   
b On the basis of the proposal of the Pension and Disability Fund of Montenegro, Employment Agency 
of Montene gro and Investment and Development Fund of Montenegro, shares of the following 
companies will be offered for sale through the stock exchange.  
Source:  Privatization and Capital Investment Council.  
3.132.   In 2016, Montenegro notified to the WTO that it did not have  any enterprise s covered by 
the provisions of Article XVII of the GATT 1994 and the Understanding on the Interpretation of 
Article XVII : State Trading Enterprises as already stated at the time of its accession 
(Section  2.3.1); it considers that all SOEs op erate under commercial principles.228 No written 
questions were submitted by Members regarding this notification, and no questions were raised at 
the meetings of the Working Party on State Trading Enterprises held during the review period.  
3.3.5   Government procur ement  
3.133.   Public procurement constitutes a significant part of economic activity in Montenegro, 
amounting to around 12% of GDP and around 20% -25% of government spending.229 The public 
procurement spending increased progressively by about 62% over the period 2013 -16 
(Table  3.10).  
                                                
228 In addition upon its WTO accession Montenegro, inter alia, undertook to provide annual reports on 
developments in its programme of privatization, including identification of recently privatized enterprises and 
enterprises expected to be privatized. WTO documents G/STR/N/16/MNE, 27 September 2016; and 
WT/ACC/CGR/38, WT/MIN(11)/7, 5 December 2011.  
229 Public Procurement Administration of Montenegro (2015), Strategy for Development  of the Public 
Procurement System in Montenegro for the Period 2016  – 2020.  Viewed at: 
http://www.ujn.gov.me/en/strategija -razvoja -sistema -javnih -nabavki -u-crnoj-gori-za-period -2016-2020-
godine/ . WT/TPR/S/369 • Montenegro  
 
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  Table 3.10 Public procurement contracts and value, 2013 -16 
Year Total number of contracts  Total contracted value  
(€ million)  Share of GDP  
(%) 
2013  5,325  277.0  8.3 
2014  5,799  327.2  9.6 
2015  6,505  428.9  11.9 
2016  7,653  447.7  11.8 
Source:  Public Procurement Administration of Montenegro (2017), Report on Public Procurement in 
Montenegro for 2016 .  
3.134.   Montenegro became a Member of the WTO Agreement on Government Procurement on 
15 July 2015, thus fulfilling in a timely manner its WTO accession commitment to join the 
Agreement.230 Its GPA market liberalization commitments foresee international tendering for 
procurements undertaken by listed central government, sub -central government and oth er 
procuring entities for tenders with a value above SDR 130,000, SDR 200,000 and SDR 400,000 for 
goods and services and above SDR 5  million for construction services.231 Above -threshold 
procurements constituted about 55% of total procurement in 2015 and 47%  in 2016, with a clear 
emphasis on procurement of goods.232 The value of contracts awarded to foreign suppliers 
covering procurement both below and above GPA thresholds has increased significantly from 
€14 million in 2013 to above €60  million or around 14% o f the total contracted value in 2016 
(equivalent to roughly 6% of the total number of contracts) (Tables 3.10 and 3.11).233 No further 
detailed statistical data on the participation of WTO GPA -covered entities in government 
procurement market operations were  available from the authorities; in addition, neither 
GPA-related statistical notifications nor the threshold values in national currency have been 
submitted so far.234 The authorities indicated that as the statistical data for each year are collected 
at the  beginning of the following one, the final data for 2016, compiled in May 2017, were 
submitted for adoption to the Government and are to be forwarded to the WTO in the shortest 
possible time.  
Table 3.11 Public procurement above the GPA thresholds, 2013 -16 
Year  Procurement 
subject  Number of contracts  Estimated value  
(€ million)  Contracted value  
(€ million)  
2013  Goods  118  85.7 67.4 
Services  28  11.5 10.9 
Works  -  -  -  
2014  Goods  140  164.3  153.4  
Services  43  10.7 10.4 
Works  -  -  -  
2015  Goods  211 174.0  169.3  
Services  79 25.1 25.1 
Works  6 48.0 42.3 
2016  Goods  186 150.8  148.8  
Services  75 22.0 21.9 
Works  3 44.1 41.1 
Contracts awarded to companies outside Montenegro  
2013  
(€ million)  2014  
(€ million)  2015  
(€ million)  2016  
(€ million)  
14.7  52.6  67.4 60.7 
Source:  Public Procurement Administration of Montenegro (2017), Report on Public Procurement in 
Montenegro for 2016 . 
                                                
230 WTO documents WT/ACC/CGR/38, WT/MIN(11)/7, 5 December 2011; GPA/124, 3  November  2014; 
and WT/Let/1051, 7 August 2015. WTO online information. Viewed at: 
https://www.wto.org/english/news_e/news15_e/gpro_15jun15_e.htm . 
231 Subject to exceptions as specified in Montenegro's Appendix I Annexes to the GPA. WTO documents 
WT/Let/1051, 7 August 2015, and WT/Let/1120, 13 Janu ary 2016. Online information viewed at: https://e -
gpa.wto.org/en/Appendix/Details?Agreement=GPA113&Party=Montenegro&AdvancedSearch=False . 
232 Public Procurement Administration of Montenegro (2017), Report on Public Procurement in 
Montenegro for 2016 . 
233 Public Procurement Administration of Montenegro (2017), Report on Public Procurement in 
Montenegro for 2016 . 
234 WTO document GPA/1, 5 March 1996. Public Procurement Administration of Montenegro (2017), 
Report on Public Procurement in Montenegro for 2016 . WT/TPR/S/369 • Montenegro  
 
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  3.135.   Under the Strategy for the Development of the Public Procurement System in Montenegro 
for the period 2016 –2020 and its implementing Action Plan, current key public procurement policy 
objectives include: improvement of the procurement system through constant monitoring and 
implementation of necessary r egulatory changes; strengthening access to public finance; 
increasing transparency, efficiency and information flows; following of current trends (green 
procurement, socially responsible procurement, innovative procurement, e -procurement, support 
for SMEs etc.); further development of human resources involved in public procurement; and 
further harmonization with the EU directives.235 
3.136.   Under the Strategy for Development of the Public Procurement System in Montenegro for 
the period 2011 -15, the legal framework h as undergone important reforms to ensure compliance 
with the GPA and its alignment with the European Union acquis  on public procurement.236 The Law 
on Public Procurement (PPL) (OG Nos. 42/11, 57/14, 28/15 and 42/17) sets out the main rules 
applicable to gove rnment procurement and its latest amended version entered into effect on 
30 June 2017 .237 The PPL prescribes policies for all public procurement of goods and services; 
introduces greater transparency and integrity into the process; establishes entities to ad minister 
the system efficiently; and offers equitable access to government contracts for the private 
sector.238 Under the PPL , the basic public procurement principles are transparency, competition, 
non-discrimination, equal treatment and cost -effectiveness a nd efficiency in the use of public 
funds. Non -discrimination against  foreign bidders is ensured and foreign companies are allowed to 
particip ate in public competitions under the same conditions that apply to domestic companies.239 
The PPL applies to all inve stments financed by the budget, payments guaranteed by the 
Government, and funds secured by loans taken by the Government.240  
3.137.   The PPL encompasses procurement by a broad range of contracting agencies, including: 
state authorities, local self -government bodie s, public services and other beneficiaries of funds 
under the State Budget, or the budget of local self -government units or other public revenues; 
and, business enterprises, legal persons, entrepreneurs and natural persons financed from funds 
under the Bud get, the budget of local self -government units or other public revenue (e.g. grants, 
loans, funds from international programmes or projects, funds from financial plans adopted by 
independent regulatory bodies) by more than 50%, or operating in the sectors of water 
management, energy, transport and postal transport.241 In the period 2015 -16, around 75% of 
procuring entities consisted of state authorities, local governments and other public service 
providers (Table 3.12). Business organizations funded by the St ate Budget constitute the second 
largest group of buyers covered by the public procurement legislation. The Public Procurement 
                                                
235 Government of Montenegro (2017), Economic Reform Programme for Montenegro 2017 –2019, 
January; Strategy for Development of the Public Procurement Sys tem in Montenegro for the Period 2016  – 
2020, 21 December 2015.  
236 The European Union launched accession negotiations with Montenegro on the chapter concerning 
public procurement (Chapter 5) in December 2013. Online information viewed at: 
https://ec.europa.eu/growth/single -market/public -procurement/international/european -neighborhood -
policy_en , http://www.consilium.europa.eu/uedocs/cms_Data/docs/pressdata/EN/genaff/140154.pdf , and 
http://www.uj n.gov.me/wp -content/uploads/2013/10/StrategijaENG.pdf . 
237 Along with the PPL, the following implementing regulations were also adopted: Rulebook on Forms in 
Public Procurement Procedures (OG  Nos. 23/15 and 31/15 ); Rulebook on Methodology for Expressing the 
Sub-criteria for Selection of the Most Favourable Bid in a Public Procurement Procedure (OG Nos. 24/15 and 
29/15); Rulebook on Detailed Criteria for Establishment of a Commission for Opening and Evaluation of Bids 
(OG No. 24/15); Rulebook on Method of Dete rmination of a Calculation Error in a Bid in a Public Procurement 
Procedure (OG No. 24/15); and Rulebook on Amendments to the Rulebook on Method of Keeping and Contents 
of the Records on Violation of Anti -corruption Rules (OG No. 56/15).  
238 Online informati on. Viewed at: https://www.export.gov/article?id=Montenegro -selling -to-the-
government . 
239 Public Procurement Administration (2015), Strategy for Development of the Public  Procurement 
System in Montenegro for the Period 2016  – 2020, 21 December. Viewed at: http://www.ujn.gov.me/wp -
content/uploads/2015/12/Strategy2016 -20.docx . 
240 Online info rmation. Viewed at: https://www.export.gov/article?id=Montenegro -selling -to-the-
government . 
241 Public Procurement Administration (2015), Strategy for Development of the P ublic Procurement 
System in Montenegro for the Period 2016 –2020, 21 December. Viewed at: http://www.ujn.gov.me/wp -
content/uploads/2015/12/Strategy2016 -20.docx . WT/TPR/S/369 • Montenegro  
 
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  Administration (PPA, see below) establishes the list of contracting agencies covered by the PPL and 
publishes it electronically.242 
Table 3.12 Type of procuring entities, 2015 and 2016  
Type of entity  Number of entities  Share of total number of 
procuring entities  
(%) 
2015  2016  2015  2016  
State authorities, local governments and public 
services  507  453 78.2 73.5 
Companies that perform activities of public 
interest (joint stock companies)  20  15 3.1 2.4 
Business organizations founded by state and 
local governments  106  135 16.4 21.9 
Companies in the utility sector  15  13 2.3 2.1 
Total  648 616 100 100 
Source:  Public Procurement Administration of Montenegro (2017), Report on Public Procurement in 
Montenegro for 2016 . 
3.138.   Under the June 2017 PPL amendments , the main procurement methods are as follows: 
open procedure; restricted procedure; negotiated procedures with or without publication of 
contract notice; contest; conclusion of a framework agreement; and, low -value procurement. 
Pursuant to  the 2017 PPL ame ndments, the low -value procurement method is based on an act 
issued by the contracting entity and placed on its  website, and applies to goods and services of a 
value below €15,000 and works contract s under €30,000. Prior to June 2017, direct solicitation o f 
tenders (shopping method) and direct agreement methods were  also in place.243 The standard 
method of procurement is the open procedure. The application of the negotiated procedure, with 
or without prior publication of a contract notice , requires prior appr oval from the PPA (see 
below).244 Framework agreements have been used relatively infrequently. In 2015 and 2016, open 
procedure accounted for more than 83% of the total procurement contract value and over 45% of 
awarded contracts (Table 3.13). In addition, a round 4% in value and number of contracts were 
awarded in the form of framework agreements, and around 5% in value were attributed to smaller 
value direct contracts (constituting almost 50% of contracts) through competitive "shopping" (until 
mid-2017).245 Similar percentages are reported for the years 2011 -14.246 In 2016, Montenegro 
achieved procurement savings of €45.2 million (as measured by the difference between the 
estimated and the contracted value) ranging from 0.46% (restricted procedure) to 16.5% (smal l 
value -shopping method), and the highest savings (€38.8 million) were realized under the open 
procedures; the selection criteria of the most advantageous bid remained the lowest price 
(93.02% in 2016, 70% in 2012) and the most economically advantageous te nder (6.98% in 2016, 
30% in 2012).  
3.139.   The legislation does not contain explicit measures encouraging the participation of 
domestic suppliers and/or SMEs in public procurement procedures. The authorities indicated that 
the contracting agencies are encouraged, through a functional training programme, to divide 
procurement subjects into lots in terms of technology, type, quantity, etc. At the same time , 
efforts are aimed at strengthening SMEs representatives ' awareness of the contract award 
procedures. Montenegro  responded to the Questionnaire pursuant to the Decision of the WTO 
                                                
242 Online i nformation. Viewed at: http://www.ujn.gov.me/wp -content/uploads/2017/07/Lista -2017.pdf  
(available in Montenegrin only).  
243 The direct agreements method was only admissible for p rocurements below €5,000 and could only 
be used once a year for the same goods or services by the same contracting entity. The shopping method, 
used for contract values ranging from €5,000 to €25,000, preserved the essential transparency and 
competition fe atures of the open procedure; the authorities indicated that it was a competitive procedure, 
which was characterized by a shorter time of its implementation and a lower value scale, so it could have been 
referred as an open procedure.  
244 SIGMA (2016), Monit oring Report on the Principles of Public Administration – Public Financial 
Management . Viewed at: http://www.sigmaweb.org/publications/Monitoring -Report -2016-Montenegro.pdf .  
245 Public Procurement Administration of Montenegro (2017), Report on Public Procurement in 
Montenegro for 2016 , May. Viewed at: http://www.ujn.gov.me/wp -content/uploads/2017/06/Public -
Procurement -Report -for-2016.pdf .  
246 Public Procurement Administration of Montenegro (2017), Report on Public Procurement in 
Montenegro for 2016 , May . Viewed at: http://www.ujn.gov.me/wp -content/uploads/2017/06/Public -
Procurement -Report -for-2016.pdf .  WT/TPR/S/369 • Montenegro  
 
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  Committee on Government Procurement on a Work Programme on SMEs and answered questions 
by Canada, the European Union , and the United States in this area.247  
Table 3.13 Procurement procedures utilization, 2015 and 2016  
Type of procedure  Year Number of 
contracts  % Contracted value  
(€) % 
Open procedure  2015 
2016 2,941  
3,567  45.2 
46.6 356,806,744  
371,741,151  83.2 
83.0 
Restricted procedure  2015 
2016 13 
10 0.2 
0.1 494,309  
325,604  0.1 
0.1 
Negotiated procedure with prior 
publication of a contract notice  2015 
2016 6 
35 0.1 
0.5 579,095  
4,704,811  0.1 
1.0 
Negotiated procedure without prior 
publication of a contract notice  2015 
2016 131 
125 2.0 
1.6 7,992,327  
4,753,230  1.9 
1.1 
Framework agreement  2015 
2016 258 
354 4.0 
4.6 19,994,669  
18,860,671  4.7 
4.2 
Award of public procurement 
contract by contest  2015 
2016 6 
6 0.1 
0.1 47,613  
421,575  0.0 
0.1 
Shopping  2015 
2016 3,144  
3,556  48.3 
46.5 19,533,018  
23,547,961  4.5 
5.3 
Direct agreement  2015 
2016 79,303  
84,967  - 
- 22,822,055  
23,384,217  5.3 
5.2 
Source:  Public Procurement Administration of Montenegro (2017), Report on Public Procurement in 
Montenegro for 2016 . 
3.140.   The Ministry of Finance is responsible for  public procurement policy making and 
coordination, submitting draft legislation to the Government and implementing it when passed.248 
The main role of administering the public procurement system pertains to the Public Procurement 
Administration (PPA) of Mon tenegro, an autonomous body within the Ministry of Finance.249 PPA's 
competences include monitoring of the public procurement system and its compliance with EU 
rules, drafting procurement regulations, issuing prior approvals for application of negotiated 
procedures with or without the publication of calls for competition, maintaining  the lists of 
contracting authorities, conducting activities related to professionalization of procurement, 
electronic procurement, cooperating with international organizations an d others.250 The PPA 
supports the activities of contracting agencies by publishing opinions concerning the application of 
public procurement rules, instructions and procurement manuals on its website and offering online 
courses on public procurement.251 The PP A also administers the public procurement portal.252 A 
new portal, launched in May 2015, is used by procuring entities to publish their annual 
procurement plans, tender documents, announcements concerning negotiated procedures without 
publication, and contra cts under framework agreements that were concluded prior to the latest 
amendment of the PPL; at present , the portal does not allow for the submission of e -bids.253 In 
2016, the PPA portal received 575,000 visits (540,000 in 2015).254 The introduction of an 
e-procurement system, including the tools and techniques contained in the EU Directives, is under 
way; its project was published on 26 September 2017, and the contract award is expected to take 
place in the course of the first or second quarter of 2018.  
                                                
247 WTO documents GPA/WPS/SME/14, 16 December 2015;  GPA/WPS/SME/46, 8 November 2016; 
GPA/WPS/SME/47, 8 November 2016; and GPA/WPS/SME/49, 18 November 2016.  
248 SIGMA (2016), Monitoring Report on the Principles of Public Administration – Public Financial 
Management . Viewed at: http://www.sigmaweb.org/publications/Monitoring -Report -2016-Montenegro.pdf . 
249 Online information. Viewed at: http://www.ujn.gov.me/en/nadleznos ti/. 
250 SIGMA (2016), Monitoring Report on the Principles of Public Administration – Public Financial 
Management . Viewed at: http://www.sigmaweb.org/publications/Moni toring -Report -2016-Montenegro.pdf . See 
also Public Procurement Administration of Montenegro (2017), Report on Public Procurement in Montenegro for 
2016.  
251 Online information. Viewed at: http://www.ujn. gov.me/en/nadleznosti/ . 
252 Online information. Viewed at: http://195.66.166.208/delta2015/login.jsp . 
253 SIGMA (2016), Monitoring Report on the Principles of Public Administration – Public Financial 
Management . Viewed at: http://www.sigmaweb.org/publications/Monitoring -Report -2016-Montenegro.pdf . 
254 Public Procurement Administration of Montenegro (2017), Report on Public Procurement in 
Montenegro for 2016 , May. Viewed at: http://www.ujn.gov.me/wp -content/uploads/2017/06/Public -
Procurement -Report -for-2016.pdf .  WT/TPR/S/369 • Montenegro  
 
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  3.141.   The PPL contains provisions on anti -corruption and conflict s of interest.255 The PPA (see 
below) has a preventive role in fighting bid -rigging and other corruptive actions, in cooperation 
with other state agencies. During 2016, there were six cases of corruptive  actions reported 
through PPA's help-desk, while two cases were reported in written form. The first of those reports 
related to the abuse of a bank guarantee, while the second referred to the non -observance of 
technical specification requirements for tende r documents (Section 3.3.3.1.3). The PPA forwarded 
the reports to the competent bodies for further action.  
3.142.   Challenges to the system, including complaints, are handled by the State Commission for 
the Control of Public Procurement of Montenegro (SC), which consists of a Chairman and 
six members, appointed by the Government for a four -year term.256 Complaints may lead to the 
immediate suspension of a procurement procedure and are subject to appeal to the Administrative 
Court.257 Audits are carried out by the State Audit Institution of Montenegro.258 In 2016, the 
Administrative Court returned 44 cases to the State Commission for renewed proceedings. In 
35 cases, the lawsuits against the State Commission's decisions were rejected by the 
Administrative Court, while in two cases the administrative dispute procedure was suspended due 
to the cease of the legal interest of the complainant (Directorate for Public Works Podgorica)  and 
the withdrawal of the prosecutor (Ministry of Justice).  
3.143.   Notwithstanding the significant results achieved so far, according to the authorities, 
challenges still persist, as well as obstacles that may have an adverse impact on the overall 
competitiveness of the economy.259 The achievement of greater efficiency, the shortening of the 
procedure and a reduction of the costs of public procurement are still not at the desired levels. In 
addition, adequate administrative and institutional capacities need to be established at all levels, 
and the enforcement of laws ensured prior to EU accession. Action is under way to improve the 
regulatory and institutional framework in the area of government procurement. It is aimed at 
increasing transparency, efficiency and information flows, as well as shortening procedures and 
lowering the cost of the public procurement process. Efforts are to be made to strengthen 
administrative capacities, develop and establish the e -procurement system, strengthen monitoring 
of the procurement system, raise public awareness through education and traini ng, and better 
assess the success of the procurement process, the risks of irregularities , and factors that reduce 
the competitiveness and efficiency of procurement.260 They include the preparation of further 
amendments to the PPL to bring it in line with th e 2014 EU Procurement Directives and GPA WTO 
provisions, as well as new legislation applying to public -private partnerships (PPP) and concessions 
in line with the objectives of the Strategy for Development of the Public Procurement System in 
Montenegro for  the period 2016 –20.261 Plans exist to, inter alia,  strengthen the financial and 
administrative capacity of the PPA and the SC as well as to improve the implementation of 
e-procurement tools allowing for better monitoring throughout all phases of the procure ment 
process (see above).  
3.144.   According to a 2013 European Union benchmarking exercise, an important aspect of 
strengthening the implementation of open, fair and transparent procurement procedures depends 
on action to prevent and fight corruption and conflict of interest in the area of public procurement 
                                                
255 PPL Articles 15 -18 (OG No. 57/14).  
256 Online information. Viewed at: http://www.kontrola -nabavki.me/1/index.php?lang=en . 
257 SIGMA (2016), Monitoring Report on the Principles of Public Admini stration – Public Financial 
Management . Viewed at: http://www.sigmaweb.org/publications/Monitoring -Report -2016-Montenegro.pdf . 
258 Online information. Viewed at: http://www.dri.co.me/1/ . 
259 Government of Montenegro (2017), Economic Reform Programme for Montenegro 2017 –2019, 
January.  
260 Government of Montenegro (2017), Economic Reform Programme for Montenegro 2017 –2019, 
January.  
261 Public Procurement Administration (2015), Strategy for Development of the Public Procurement 
System in Montenegro for the Period 2016 –2020, 21 December. Viewed at: http://w ww.ujn.gov.me/wp -
content/uploads/2015/12/Strategy2016 -20.docx ; SIGMA (2016), Monitoring Report on the Principles of Public 
Administration – Public Financial Management . Viewed at: http://www.sigmaweb.org/publications/Monitoring -
Report -2016-Montenegro.pdf ; World Bank (2017), Preliminary Analysis – The Public Procurement Monitoring 
System of Montenegro . Viewed at: https://openknowledge.worldbank.org/handle/10986/28315 ; and online 
information. Directive 2014/24/EU on public procurement , Directive 2014/25/EU on procurement by entities 
operating in the water, energy, transport and postal services sectors ; Directive 2014/23/EU on the award of 
concession contracts . WT/TPR/S/369 • Montenegro  
 
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  at both central and local level.262 In addition to Montenegro's overall anti -corruption initiatives 
(Section 2.4.2), including the Action Plan for the implementation of the strategy for the fight 
against corrupti on and organized crime 2013 –14, the Strategy for Development of the Public 
Procurement System in Montenegro for the period 2016 -20 clearly identified the need to further 
strengthen and improve the existing legal and institutional framework and practice, in  order to 
minimize corruption in this area.263 The PPL contains relevant provisions (Articles 15 -18), the Law 
on Prevention of Conflict of Interests was revised in 2011 (OG No. 47/11), and a Rulebook on the 
Manner of Keeping and Content of Records on Violati on of Anti -Corruption Rules (OG No. 63/11) 
was adopted. The Agency for Corruption Prevention supports the PPA and the State Audit 
Institution in monitoring the procurement system and taking remedial measures.264 Reports on the 
Implementation of the Integrity  Plan of the Public Procurement Administration in 2015 are 
available online.265 
3.3.6   Intellectual property rights  
3.145.   Montenegro's policy stance has been focused on the implementation of the recently built 
legal framework and enforcement of intellectual property righ ts (IPRs). The National Intellectual 
Property Strategy 2012 -2015 was aimed  at, inter alia,   improving cooperation and coordination 
between the various state institutions in the IPR field, enhancing enforcement of IPRs, increasing 
economic growth through ef fective use of IP, improving the methods of acquiring and managing 
IP, improving enterprises and the public 's understanding of the use and value of intellectual 
property and IPRs, and improving and moderni zing information and communications technology 
(ICT) in terms of IP issues. Comprehensive reports covering all action relating to the 
implementation of this wide -ranging strategy were issued in 2012, 2013, 2014 and 2015.266 There 
have been no new strategies in this area since 2015.  
3.146.   Since 2010, Montenegro has  taken numerous steps to align its laws and regulations with 
the WTO TRIPS Agreement and European Union standards required for its ongoing accession 
process.267 The main updated or new IPR legislation covered patents, trademarks, geographical 
indications, in dustrial design, topographies of integrated circuits, copyright and related rights and 
customs treatment of counterfeit goods.268 To align all Montenegrin laws with the rules set out in 
the new Law on Administrative Procedure, the Patent Law, the Law on Trad emarks and the Law on 
Legal Protection of Industrial Design were amended in 2017 and their amendments became 
applicable as from 1 July 2017 when the new Law on Administrative Procedure entered in force 
(Sections 3.3.6.1.1, 3.3.6.1.2 and 3.3.6.1.5). Montene gro's IPR legislation was notified  in a timely  
manner  to the WTO; in addition to the review of its national implementing legislation involving 
                                                
262 Online information. Viewed at: 
http://www.consilium.europa.eu/uedocs/cm s_Data/docs/pressdata/EN/genaff/140154.pdf ; and Institute 
Alternative (2012), Corruption and Public Procurement in Montenegro . Viewed at: 
http://balkantenderwatch.eu/btw/uploaded/MNE%20eng/institute -alternative -corruption -and-public -
procurement -in-montene gro.pdf .  
263 Public Procurement Administration (2015), Strategy for Development of the Public Procurement 
System in Montenegro for the Period 2016 –2020, 21 December. Viewed at: http://www.ujn.gov.me/wp -
content/uploads/2015/12/Strategy2016 -20.docx ; and online information. Viewed at: 
http://www.ujn.gov.me/en/2013/06/akcioni -plan-za-sprovodenje -strategije -borbe -protiv -korupcije -i-
organizovanog -kriminala -za-period -2013-2014-godine/ . 
264 Online information. Viewed at: http://www.antikorupcija.me/en/ . 
265 Online information. Viewed at: http://www.ujn.gov.me/wp -
content/uploads/2016/02/IntegrityPlan.pdf . 
266 European Commission ( 2012), Screening Rep ort of Montenegro. Chapter 7 – Intellectual Property 
Law. Viewed at: https://ec.europa.eu/neighbourhood -
enlargement/sites/near/files/pdf/montenegro/screening_reports/screening_report_montenegro_ch07.pdf .  
267 Until 2010, the legislative framework in this area was composed of the Law on Copyright and Related 
Rights (SM OG No. 61/04), the Law on Patents (SM OG Nos . 32/04 and 35/04), the Law on Legal Protection of 
Designs (SM OG No. 61/04), the Law on Indications of Geographical Origin (SM OG No. 20/06), and the Law on 
Protection of Topographies of Integrated Circuits (SM OG No. 61/04). WTO document WT/ACC/CGR/38, 
WT/MIN(11)/7, 5 December 2011.  
268 Since Montenegro's independence , new legislation covering IPRs has been developed, in particular, 
the Law on Optical Discs (OG No. 02/07), the Criminal code, the Customs law (OG Nos. 7/02, 38/02, 72/02, 
21/03, 31/03, 29/05, 66/06, 21/08), the Law on Protection of Plant Varieties (OG Nos. 48/07 and 48/08), the 
Law on Protection of undisclosed information (OG No. 96/07). Regulation on the customs treatment of goods 
for which there is reasonable suspicion of infringing intellect ual property rights (OG No. 48/16). WIPO 
Montenegro online information. Viewed at: http://www.wipo.int/wipolex/en/profile.jsp?code=ME  and WTO 
document WT/ACC/CGR/38, WT/MIN(11)/7, 5 Decembe r 2011.  WT/TPR/S/369 • Montenegro  
 
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  questions from the United States in October 2013 and February 2014, the new and/or amended 
regulatory framework w as presented at the meetings of the Council for Trade -Related Aspects of 
Intellectual Property Rights held in October  2014 and March 2017 (Section 2.3.1).269  
3.147.   Since 2012, Montenegro has expanded its international commitments by becoming a party 
to: the International Convention for the Protection of New Varieties of Plants (UPOV) as of August 
2015; the Beijing Treaty on Audiovisual Performances, signed on 27 May 2013 (ratification 
pending); the Patent Law Treaty on harmonizing and streamlining formal procedures, in force as of 
9 March  2012; the Strasbourg Agreement establishing the International Patent Classification (IPC), 
effective as of 6 January 2013; and the Vienna Agreement, in force as of 9  March 2012, 
establishing a classification (the Vienna Classification) for marks that consist of, or contain, 
figurative elements.270 As of December 2017, Montenegro participated in 23 out of 26  treaties 
administered by the World Intellectual Property Organi zation (WIPO).271 Additionally, in 2013 
Montenegro ratified the Protocol amending the WTO TRIPS Agreement (OG No.  6/13) and plans to 
become a party of the European Patent Convention.272  
3.148.   Foreign natural and legal persons enjoy  the same intellectual property rights as domestic 
natural and legal persons when so provided for under international agreements or under the 
principle of reciprocity.273  
3.3.6.1   Industrial property  
3.149.   The Intellectual Property Office of Montenegro (IPOM), an independ ent administrative body 
established in 2008 and supervised by the MEK, is responsible for registration of industrial 
property rights, namely trademarks, patents, industrial designs , geographical indications and 
designations of origin , and topographies of s emiconductor products, including professional 
segments on copyright and related rights (licences for collective management organizations and 
supervision). No separate agency is in charge of copyright. The Ministry of Agriculture and Rural 
Development (MARD ) is responsible for agricultural geographical indications and plant varieties 
protection matters (Sections 3.3.6.1.3 and 3.3.6.1.4). The IPOM 's decisions can be appealed 
before the MEK in the first instance and the Administrative Court of Montenegro in th e second 
instance. As from 1 July 2017, IPOM decisions in the area of patents, trademarks and industrial 
designs can be appealed before the Administrative Court of Montenegro in the first instance, and 
the Supreme Court of Montenegro in the second instance . In 2016, the average length of appeal 
procedures was three months; while the average length of proceedings before the Administrative 
Court (from filing the case to judgement) was 6 –12 months.  
3.150.   Parallel imports are not forbidden; as long as the goods are original, they can enter the 
free market but sometimes are marketed in a way that the trademark owner might not consider 
favourable.274 No data or other information on values of parallel imports is available from the 
authorities  as the Customs Administration  does not keep such records.  
3.151.   Penal provisions for IPR infringements of patents, trademarks , industrial design s, and  
copyright and related rights include fines (see below) or imprisonment  for between one and eight 
years. Civil remedies comprise injunctions against further infringement, seizure and destruction of 
                                                
269 WTO documents IP/C/M/74, 24 October 2013; IP/C/M/75, 7 March 2014; IP/C/M/77, 
26 November  2014; IP/C/M/77/Add.1, 19 February 2015; IP/C/M/85, 27 April 2017; and IP/C/M/85/Add.1, 
7 June 2017.  
270 WIPO Montenegro online information. Viewed at: 
http://www.wipo.int/treaties/en/ShowResults.jsp?country_id=237C . 
271 WIPO Montenegro online information. Viewed at: 
http://www.wipo.int/treaties/en/ShowResults.jsp?country_id=237C ; UPOV online information. Viewed at: 
http://www.upov.int/upovlex/en/notifications.jsp . 
272 WTO online information. V iewed at: 
https://www.wto.org/english/tratop_e/trips_e/amendment_e.htm  and 
https://www.wto.org/english/news_e/pres03_e/pr350_e.htm . 
273 Article 106 of the Law on Copyright and Related Rights, Article 6 of the Law on Trademarks, Article 7 
of the Law on Indications of Geographical Origin, Article 10.2 of the Law on Legal Protection o f Design, Article 3 
of the Law on Patents, and Article 7 of the Law on Protection of Topographies of Integrated Circuits. WTO 
document WT/ACC/CGR/38, WT/MIN(11)/7, 5 December 2011.  
274 Petosevic  online article, "Montenegro IP Report: A Decade After", 20 Octo ber 2016. Viewed at: 
https://www.petosevic.com/resources/articles/2017/02/3521 . WT/TPR/S/369 • Montenegro  
 
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  objects, and damage compensation (Section 3.3.6.3). Provisional measures for preventive 
infringements are provided in each industrial  property act (see below). No data on the number and 
types of cases dealt with were available from the authorities . 
3.3.6.1.1   Patents  
3.152.   Patent protection under the 2015 Law on Patent s (OG No.  42/15) (last amended in 2017), 
which replaced the Patent Law (OG No. 66/08) , is for 20 years from the filing date. Both product 
(e.g. device, substance, composition) and process patents may be granted. The grace period for 
filing an application is eighteen months. The owner may exploit the patent either individually or in 
coopera tion with other natural or legal persons; rights may be transferred by assignment, 
licensing, or by testamentary succession.275 Provision is made for granting compulsory licences, on 
the grounds of lack or insufficiency of exploitation of a patent, to any pe rson filing a request, if the 
patent owner has not exploited the invention on the territory of Montenegro on reasonable terms, 
or has not made effective and serious preparations for its exploitation. A compulsory non -exclusive 
licence can be issued for: a patent necessary for the manufacture and sale of pharmaceutical 
products which are intended for export to countries in need of such products to address public 
health issues; and, plant breeders to obtain or exploit a right of protection of plant variety 
(Section  3.3.6.1.4).276 No compulsory licences have been issued so far. As at 2017, Montenegro 
was not on the list of countries providing the option of utility model protection.277 Under the 
present legislation, penalties for misdemeanour s can reach up to €20,00 0 for legal entities, €6,000 
for entrepreneurs and €2,000 for a natural person; there have been no such cases since 2012.278  
3.153.   The 2015 Law on Patent s incorporates several novelties including the evidence of 
patentability which contributes to the legal streng th of the patent system in Montenegro. Patent 
owners must, not later than the expiration of the ninth year of the patent, submit the proof of 
patentability  and a certified copy of the substantive examination performed by a contracting 
national or internati onal IP Office (Article 32 of the Patent Cooperation Treaty) or an IP office that 
has signed a cooperation agreement with IPOM (Article 47). The revalidation of national Serbia and 
Montenegro State Union patents within six months of entry  into force of the  new Patent Law is 
allowed (Article 161). In addition, the 2015 Law allows the revalidation of European Patents 
extended to Serbia prior to 1 March 2010 (when the agreement between Montenegro and the 
European Patent  Office (EPO) was signed) (Article 162), clarifies the procedure for obtaining a 
Supplementary Protection Certificate (SPC) (Article 87) and elaborates provisions with respect to 
court action.279 
3.154.   During the period 2012 -16, a total of 1,418 patents were registered : 59 were registered  by 
Montenegrin citizens, 717 European patents were extended to Montenegro,  and 642 patent rights  
were transferred from the former State  Union . Between January and September 2017 , there were 
240 patent applications submitted to IPOM, of which 13 were submitted by  Monteneg rin citizens  
and 227 related to European patents extended to Montenegro; 189 of  these applications led to 
registered  patents, of which 13  were registered  by Montenegrin citizens and 176 were European 
patents extended to Montenegro. Most patents registered during the 2001 -15 period are in civil 
engineering (15.22%); electrical machinery, apparatus, and energy (13.04%); engines, pumps 
and turbines (10.87%), other special machines (10.87%), and pharmaceuticals (6.52%).280  
                                                
275 Legal or natural persons not having a principal place of business, a domicile or a habitual residenc e 
in Montenegro  may undertake certain formalities before SIPO by themselves, without a professional 
representative (e.g. file a patent application or other acts relating to the establishment of the filing date of a 
patent application, pay the administrativ e fees and procedural charges).  
276 Law on Patents (OG No. 42/15). Viewed at: http://www.wipo.int/wipolex/en/details.jsp?id=15950 ; 
ZMP online information. Viewed at: http://zmpip.com/en/page/19/Montenegro . 
277 WIPO online information. Viewed at: 
http://www.wipo.int/sme/en/ip_business/utility_models/where.htm . 
278 Law on Patents (OG No. 42/15). Viewed at: http://www.wipo.int/wipolex/en/details.jsp?id=15950 ; 
ZMP online information. Viewed at: http://zmpip.com/en/page/19/Montenegro . 
279 The Supplementary Protection Certificate (SPC) is issued by the competent authority for a basic 
patent for a medicinal product intended for humans or animals, or for a plant protection product granted in 
Montenegro. L aw on Patents (OG No. 42/15). Viewed at: 
http://www.wipo.int/wipolex/en/details.jsp?id=15950 ; ZMP online information. Viewed at: 
http://zmpip.com/en/page/19/Montenegro . 
280 WIPO online information. Viewed at: 
http://www.wipo.int/ipstats/en/statistics/country_profile/profile.jsp?code=ME . WT/TPR/S/369 • Montenegro  
 
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  3.3.6.1.2   Trademarks  
3.155.   The 2010 Law on Trademarks ( last amended in 2017) ensures ten -year protection of 
trademarks on goods and services and collective marks registered with IPOM or through a system 
of international registration (Madrid system) from the date of filing the application, renewable 
indefinitel y for ten -year periods (Article 42) upon the payment of the appropriate fee.281 The 
failure to use a trademark for an uninterrupted period of five years without justified reasons could 
lead to termination of the protection.282 A trademark cannot be the subject  of a compulsory licence 
(Article 39).  
3.156.   To ensure compliance with the EU standards, the 2010 Law was amended in 2012, 2014, 
2016 and 2017.283 The 2012 amendments: clarified the provisions on the filing and examination of 
applications for national and interna tional trademark registration; established  the procedure for 
transforming an internationally registered trademark into a national trademark application; and 
introduced new provisions on filing opposition s.284 Civil protection in case of trademark 
infringement has been strengthened under the 2014 amendments. Additional provisions on the 
seizure and destruction of goods, compensation of damages, usual compensation, unjust 
enrichment, preliminary injunctions, securing evidence and the publication of c ourt decision s were 
inserted into the Law. The Law  stipulates monetary fines in case s of trademark infringement. A 
fine from €1,500 to €20,000 (US$2,100 -US$28,000) may be imposed against a legal entity in the 
case of unauthorized use of a trademark ; the 20 16 amendments established  fines of €500 -€2,000 
(US$700 -US$2,800) for physical persons and the responsible person within a legal entity, and 
fines of €1,300 -€6,000 (US$1,800 -US$8,300) for entrepreneurs. Additionally, trademarks that 
have become generic as w ell as trademarks that are likely to cause confusion with existing marks 
can be cancelled.285 Consequently, the 2016 amendments : provided more detailed regulation s on 
the inspection supervision procedure in the case of infringement of rights ; extended the  validity of 
Community trademark applications and Community trademarks to the territory of Montenegro 
from the date of accession of Montenegro to the European Union;  and introduced Community 
exhaustion of rights from the date of accession of Montenegro to the  European Union .286 Moreover, 
as a result of 2017 amendments, which abolished the previous two -instance decision procedure, 
the decision of the IPOM on administrative judicial proceeding s became final.  
3.157.   Montenegro simplified the examination and registration procedure of a trademark; the 
ex officio  examination is carried out only on the basis of absolute grounds for refusal of 
registration , while the relative grounds are examined by the opposition, which is in line with the 
practice of the European Union  and a ll its member States. As in 2012 , the time for registration is 
6-9 months.287 As of 2016 , Montenegro had received 3,484 trademark applications (of which 2,916 
were non -resident, 455  abroad and 113 resident ), compared to 3,884 applications in 2011 
(3,562  non-resident, 228  abroad and 94 resident).288 In 2016 , 3,398 trademarks were registered 
(3,043  non-resident, 279 abroad and 76 resident), compared to 6,826 (6,507 non -resident, 
303 abroad and 16 resident) in 2011. No comprehensive data on the number and type of fines in 
cases involving trademark infringements since 2012 were available from the authorities .  
                                                
281 A trade mark could consist of words, slogans, letters, numbers, pictures, drawings, colour 
combinations, three -dimensional forms, or a combination of such elements, as well as musical phrases that 
could be shown graphically.  
282 WT/ACC/CGR/38, WT/MIN(11)/7, 5 Decemb er 2011; Law on Trademarks (OG No. 72/10). Viewed at: 
http://www.wipo.int/edocs/lexdocs/laws/en/me/me015en.pdf .  
283 WIPO online information. Viewed at: http://www.wipo.int/wipolex/en/profile.jsp?code=ME .  
284 Law on Amendments to the Law on Trademarks (OG No. 44/12). Viewed at: 
http://www.wipo.int/edocs/lexdocs/laws/en/me/me028en.pdf . 
285 Petosevic  online article, "Montenegro to Amend Trademark Law", March 2014 . Viewed at: 
https://www.petosevic.com/resourc es/news/2014/03/2878 ; Law on Amendments to the Law on Trademarks 
(OG No. 18/14). Viewed at: http://www.wipo.int/edocs/lexdocs/laws/en/me/me044en.pdf . 
286 WIPO online information. Viewed  at: http://www.wipo.int/wipolex/en/details.jsp?id=16551 .  
287 An opposition to a trademark registration may be filed by the holder of earlier trademark or the 
holder of earlier rights withi n three months from the date of its publication in the Gazette  of intellectual 
property rights, if they consider that the registration can infringe their rights. The Law on Trademarks 
(OG No. 72/10). Viewed at: http://www.wipo.int/edocs/lexdocs/laws/en/me/me015en.pdf .  
288 A resident filing refers to an application filed in the country by its own resident; whereas a 
non-resident filing refers to the one filed by a foreign applicant. An a broad filing refers to an application filed by 
the country's resident at a foreign office. WIPO online information. Viewed at: 
http://www.wipo.int/ipstats/en/statistics/country_prof ile/; WIPO online information, Statistical Country 
Profiles , Montenegro. Viewed at: http://www.wipo.int/ipstats/en/statistics/country_profile/profile.jsp?code=ME . WT/TPR/S/369 • Montenegro  
 
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  3.3.6.1.3   Geographical indications  
3.158.   Since 2012, the geographical indications (GI) regulatory framework has remained 
relatively unchanged.289 Authorized users of a GI have the exclusive right to mark their products 
with the indication "controlled appellation of origin". The right covers the usage of GI on 
packaging, invoices, business correspondence and other forms of business documents, and the 
import or export of goods bea ring such GI. A GI is not subject to the contract on transfer of rights, 
licence agreements, pledge, franchise or the like.290 The period of validity of a registered GI is 
unlimited.291   
3.159.    Indications of geographical origin are used to mark both products and services. 
Non-geographical names (e.g. traditional or historic names) can be registered as geographical 
indications.292 The institutional competence in this area is shared between the IPO M and the 
MARD. Applications for the registration of geographical indications of origin and designations of 
source for agricultural and food products, wine and spirit drinks are submitted to the MARD.293 So 
far, two domestic food products have been registere d, both in 2017: the Njeguška pršuta  (smoked 
ham from Njeguši) as a geographical indication; and, the Pljevaljski sir  (white cheese from 
Pljevlja) as a designation of origin. Applications for other products are submitted to the IPOM.294  
3.160.   Under the Law on Qua lity Schemes (OG No. 22/17), a pecuniary fine ranging from €500 to 
€10,000 may be imposed on a legal person for misdemeanour s if: it uses a registered designation 
of origin or geographical indication but the product does not comply with the conditions from  the 
corresponding specification; it uses a registered designation of origin or a geographical indication 
after the cancellation of the decision on registration of the designation of origin or geographical 
indication; or, the label of an agricultural or fo od product produced or processed in accordance 
with the corresponding product specification does not contain, in addition to the registered name, 
a visible indication of Protected Designation of Origin (PDO) or Protected Geographical Indication 
(PGI). In a ccordance with the Law on Spirit Drinks (OG No. 53/16), a pecuniary fine ranging from 
€500 to €5,000 may be imposed on a legal person for misdemeanour s in the case of spirit drinks 
identified with a GI failing to comply with the conditions from the produce r specification of a spirit 
drink. A fine of up to €20,000 is imposed on a legal entity if it  is an unauthorized user of 
non-agricultural GI. A fine of up to €15,000 is imposed on the legal entity if it is engaged in illegal 
representation in the exercise rights.295 There have been no GI infringement cases since 2012.  
3.3.6.1.4   Plant varieties protection  
3.161.   Montenegro joined the UPOV Convention in 2015 to promote an effective system of plant 
variety protection to encourage the development of new varieties of plants for t he benefit of 
society . The Act on the Protection of Plant Varieties (OG Nos. 48/07, 48/08, 73/10 and 40/11)  – 
aimed at harmonizing the national legislation with the UPOV Convention – continues to regulate 
the rights and obligations of holders of breeders' rights and the procedures for protection of plant 
                                                
289 It mainly consists of the Law on Geographical Indications (OG  No. 48/08 and 40/11), the Act on 
Spirit Drinks (OG No. 83/09), and the Act on Wine (OG No. 41/16). WIPO online information. Viewed at: 
http://www.wipo.int/wipolex/en/details.jsp?id=6922 .  
290 Law on Indications of Geographical Origin (OG No. 48/08). Viewed at: 
http://www.wipo.int/edocs/lexdocs/laws/en/me/me006en.pdf . 
291 Law on Indications of Geographical Origin (OG No. 48/08). Viewed at: 
http://www.wipo.int/edocs/lexdocs/laws/en/me/me006en.p df. 
292 Law on Designations of Origin, Geographical Indications and Indications for Traditional Specialties 
Guaranteed for Agricultural and Food Products (OG No. 18/11).  
293 The Law on Quality Schemes (OG No. 22/2017) governs the identification and manner of r egistration 
for agricultural and food products using geographical indications. It identifies two forms of geographical 
indications: designation of origin (PDO) and geographical indication (PGI). The Law on Spirit Drinks 
(OG No. 53/16) governs the geographi cal identification of spirit drinks; it identifies one form of protection, the 
geographical indication. The Law on Wine (OG No. 41/16) governs geographical identification of wine. The 
procedure for registration of a designation of origin or geographical in dication begins with submitting of a 
request for registration to the MARD. The request for registration of a designation of origin or geographical 
identification is submitted by a group of producers or processors of agricultural or food product it produces  or 
processes.  
294 Law on Indications of Geographical Origin (OG No. 48/08). Viewed at: 
http://www.wipo.int/edocs/lexdocs/laws/en/me/me006en.pdf .  
295 Law amending the Law on Geographical  Indications (OG No. 40/11). Viewed at: 
http://extwprlegs1.fao.org/docs/pdf/mne142347.pdf . WT/TPR/S/369 • Montenegro  
 
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  varieties.296 It is applicable to all new, distinct, uniform, and stable plant genera  and species 
designated by an appropriate denomination. The protection period covers 25 years from the date 
the breeder's r ights were granted for the cultivation period, and 35 years from the date of 
recognition of breeding rights for trees and wine plants.297  
3.162.    The protection of plant varieties is under the responsibility of the Directorate for Food 
Safety, Veterinary and Phyto sanitary Affairs, MARD. A compulsory non -exclusive licence may be 
granted by MARD provided that the use is of public interest for development of plant production, 
for protection and development of the environment or for a specific economic branch. An 
application for a compulsory non -exclusive licence can be submitted to MARD , and delivered  after 
the four -year period from the date of filing the application, or three years from the grant of the 
breeder's right. No compulsory licences have been granted so far.  Penalties for infringements in 
this area may reach up to €20,000.298  
3.3.6.1.5   Industrial design and layout designs of integrated circuits (topographies)  
3.163.   Under the 2010 Law on the Protection of Industrial Design (last amended in 2017), 
protection is provided for fiv e years from the application filing date , renewable for periods of 
five years up to a maximum of 25 years. The Law protects the appearance of the whole or a part 
of a product, resulting from its features, i.e. the lines, contours, colours, shape, texture a nd/or 
material the product is composed of and its ornamentations.299 The registered owner has the 
exclusive right to use the registered industrial design commercially and industrially.300 The 
industrial design rights holder may not prevent another person from using it for private, non -
commercial or experimental purposes , or for reproduction for the purposes of making citations or 
teaching. Moreover, exclusive rights are not exercised with respect to ship and aircraft equipment.  
3.164.   The application examination proce dure can be accelerated if: a procedure has been 
initiated before a court or an inspection authority, or a customs -related procedure  has been 
initiated  at the request of the court or the competent authority; and when the application for 
international registration of an industrial design has been filed.301 The holder of the industrial 
design rights may grant the rights to a registered industrial design based on a licence agr eement.  
3.165.   During the review period, the Law was amended in 2013 and 2016. Under the 2013 
amendments, the time -period during which an infringement lawsuit can be filed increased from 
5 to 25 years posterior to the application filing date. Moreover, the regis tered holder may in 
addition to damages, claim compensation in the amount evaluated under the licence agreement if 
applicable. If the owner proves that a violation has occurred during business activities in order to 
obtain commercial or economic benefits, the court may order confiscation of movable and 
immovable property and prohibition of disposable funds at financial institutions.302 In 2016, the 
main amendments related to : detailed regulation of the inspection supervision procedure in the 
case of infringem ent of rights, extension of the validity of Community design applications and 
Community designs to the territory of Montenegro from the date of accession of Montenegro to the 
European Union,  and the introduction of  Community exhaustion of rights from the d ate of 
accession to the European Union .303  
                                                
296 UPOV online information. Viewed at: http://www.upov.int/edocs/pressdocs/en/upov_pr_101.pdf . 
297 WT/ACC/CGR/38, WT/MIN(11)/7, 5 December 2011; Law on Protection of Plant Varieties. Viewed at: 
http://www.wipo.int/wi polex/en/text.jsp?file_id=381963 .  
298 WT/ACC/CGR/38, WT/MIN(11)/7, 5 December 2011; Law on Protection of Plant Varieties. Viewed at: 
http://www.wipo.int/wipolex/en/text.jsp?file_id=38196 3. 
299 WTO document IP/N/1/MNE/D/1, 9 April 2013.  
300 The use includes making, offering, putting on the market, importing, exporting or using the product 
containing the design or a product to which the design has been applied or stocking such a product for tho se 
purposes.  
301 The application includes registration request, information about the applicant, industrial design 
depiction (appearance), indication of the product containing the design or to which the design is applied, 
information on authorized representa tive, information on joint authorized representative in case of joint 
applications.  
302 Law on Amendments to the Law on Legal Protection of Industrial Designs (OG No. 27/13). Viewed at: 
http://www.wipo.int/edocs/lexdocs/laws/en/me/me041en.pdf ; WTO document IP/N/1/MNE/D/2, 10 July 2013.  
303 WTO documents IP/N/1/MNE/6, IP/N/1/MNE/D/3, 13 December 2016.  WT/TPR/S/369 • Montenegro  
 
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  3.166.   According to the authorities, the IPOM may during the entire design registration process 
submit the claim to the Court for the annulment of a design. IPOM does not examine ex officio  
novelty and individual character of the design in the process of registration.  
3.167.   As of 2016, Montenegro received 228 industrial design applications, of which 225 were 
non-resident and 3  resident; compared to 254 applications in 2011 (250 non -resident and 
4 resident).304 The same year, 235 industrial design applications (231 non -resident and 4  resident) 
were registered, while in 2011 there were 270 registrations, all of them from non -residents.  
3.168.   Layout designs of semi -conductor integrated circuits (topographie s) are protected under 
the Law on the Protection of Topographies of Semiconductors, adopted in 2010 and last amended 
in 2016. The protection is provided on the basis of applications filed to IPOM and covers ten years 
from the day the application is filed. An application cannot be filed after the expiration of a period 
of two years from the date on which the first commercial exploitation of the topography began .305 
The holder of rights in a protected topography has an exclusive right to its commercial use. The  
right does not apply to reproduction of topography intended for a non -commercial use, or for 
analysis, evaluation or familiarization with the blueprint, process, system or techniques used in the 
manufacture of a topography or in the topography itself. Pro tection commences on the date of the 
topography's entry in the Register. Civil remedies as amended under Article 6 of the Law on 
Amendments to the Law in 2016 include "cease and desist" orders, seizure and destruction of 
objects, damage compensation and ot her provisional measures. Penal provisions also apply: a fine 
of up to €10,000 for reproduction of protected topography, commercial exploitation , or import for 
the purpose of commercial exploitation  of a topography or semiconductor; a fine of up to €2,000 is 
imposed on a natural person and the natural person responsible for a legal person; and a fine of 
up to €6,000 is imposed on an entrepreneur.306 
3.169.   As of November 2017, the IPOM had not received any application s for this type of 
industrial property right.  
3.3.6.1.6   Trade secrets  
3.170.   Under the Law on Protection of Undisclosed Information (OG Nos. 16/07 and 73/08) any 
person, whether domestic or foreign, natural or legal, is entitled to the protection of undisclosed 
information of any type.307 Confidential data submitted to au thorities for marketing approval of 
pharmaceuticals and agricultural chemicals are prohibited from public disclosure unless the 
authorities see a public interest need (i.e. health, safety, or environmental protection). The period 
of protection against unfa ir use for commercial purposes shall not be less than five years from the 
date of issuing of a licence. An injunction may be obtained from the court that define s future use 
of such undisclosed information upon payment of a relevant fee for a period that do es not exceed 
the period of protection. Infringement of these rights is subject to a fine of up to 300  times the  
minim um wage  in Montenegro (Section 1.2.4.4).308 The court involved in determination of 
provisional measures related to patents, trademark infrin gement, and industrial design must 
maintain confidentiality of information and prohibit their misuse.309  
                                                
304 WIPO online information. Statistical Country Profiles, Montenegro. Viewed at: 
http://www.wipo.int/ipstats/en/statistics/country_profile/profile.jsp?code=ME .  
305 Application should contain the data identifying the topography and drawings or photographs  of 
layouts or of individual layers of the semiconductor products.  
306 Law on Amendments to the Law on Protection of Topographies of Semiconductors (OG No. 40/16). 
Viewed at: http://www .wipo.int/edocs/lexdocs/laws/en/me/me024en.pdf . 
307 Under Article 3 of the Law undisclosed information can be financial, business, scientific, technical, 
economic or engineering including the whole or any portion or phase of any process, procedure, formula, 
improvement, pattern, plan, design, prototype, co de, compilation, programme, method, technique, or listing of 
names, addresses or telephone numbers, whether tangible or intangible, stored, compiled, or memorialized 
physically, electronically, graphically, photographically, or in writing. Law on protectio n of Undisclosed 
information (OG Nos. 16/07 and 73/08). Viewed at: 
http://www.wipo.int/edocs/lexdocs/laws/en/me/me034en.pdf ; WTO document WT/ACC/CGR/38, 
WT/MIN(11)/7, 5 December 2011.  
308 The law on protection of undisclosed information (OG Nos. 16/07 and 73/08). Viewed at: 
http://www.wipo.int/edocs/lexdocs/laws/en/me/me034en.pdf . 
309 The Patent Law (OG No. 42/15). Vi ewed at: 
http://www.wipo.int/edocs/lexdocs/laws/en/me/me046en.pdf ; Law on Amendments to the Law on Trademarks 
(OG No. 18/14). Viewed at: http://www.wipo.int/edocs/lexdocs/laws/en/me/me044en.pdf ; Law on WT/TPR/S/369 • Montenegro  
 
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  3.3.6.2   Copyright and related rights  
3.171.   Montenegro's 2011 Law on Copyright and Related Rights (OG No. 37/11), incorporating 
the national treatment principle in to domestic legislation , and in line with international conventions 
(Berne Convention) and the European Union's Directives, was amended in 2016 to bring greater 
clarity to certain requirements and procedures and eliminate terminology shortcomings.310 
3.172.   The curre nt Law governs the rights of authors, performers, producers of phonograms, film 
producers, broadcasting organizations, and publishers; it also governs the copyright contract law, 
the collective management of copyright and related rights and sui generis  rights of makers of 
databases, and the protection of copyright. The protection is provided for the lifetime of the author 
and 70 years after his/her death. The rights of performers and phonograms and videograms 
producers are protected for 70 years (as from 20 16) from the date of recording or first disclosure 
of the performance, the rights of broadcasting organizations for 50 years from the date of the first 
broadcast, and the rights of database producers for 15 years from the date of creation of the 
database.311  
3.173.   Concerning collective management of rights, Montenegro's legislation foresees detailed 
provisions for the functioning of collective societies.312 Additionally, the 2016 amendments related 
to collective management of rights define forms of collective manage ment of rights and enable 
collective management to be authorized by tacit agreement.313 As of May 2017, collective 
management authorizations were issued to the following entities: the Collective Management 
Organization for Music Authors ' Rights – PAM CG; and , the Collective Management Organization for 
Film Producers ' Rights – A-PRAVA Montenegro. Authors assign their rights to the organization on 
an exclusive basis, while users receive non -exclusive licences. Payments of royalties are made 
annually and 10% of royalties' revenues can be earmarked for cultural funds while their 
management fee is estimated at around 25%.314  
3.174.   The 2016 amendments introduced, inter alia , provisions on orphan works such as books, 
journals, newspapers, magazines and films produced by rig ht holders who are not identified or 
cannot be located or contacted to obtain copyright permissions. These works may be used by 
publicly accessible libraries, educational establishments and museums, archives, film and audio 
heritage institutions as well as  by public -service broadcasting organizations established in 
Montenegro in order to carry out work of public interest.315  
                                                                                                                                                  
Amendments to the Law on Legal Protection of Industrial Design (OG No. 27/13). Viewed at: 
http://www.wipo.int/edocs/lexdocs/laws/en/me/me041en.pdf . 
310 Law on Copyright and Related Rights (OG No. 53/2016); WTO document WT/ACC/CGR/38, 
WT/MIN(11)/7, 5 December 2011.  
311 In the case of significant modifications of the database contents, the term of pro tection could be 
extended for another 15 years. WTO document WT/ACC/CGR/38, WT/MIN(11)/7, 5 December 2011; Law on 
Copyright and Related Rights (OG No. 37/11). Viewed at: 
http://www.wipo.in t/wipolex/en/details.jsp?id=11369 . 
312 European Commission (2012), Screening Report of Montenegro. Chapter 7 – Intellectual Property 
Law. Viewed at: https://ec.europa.eu/neighbourhood -
enlargement/sites/near/files/pdf/montenegro/screening_reports/screening_r eport_montenegro_ch07.pdf . 
313 A collective organization can act on behalf of rights holders without their explicit approval, if 
individual management is complex and impractical. Individual management of right s is also applicable and 
must be explicitly commu nicated to the organization. Under these amendments, a copyright collective 
represents not only rights holders from Montenegro, but also foreign rights holders by virtue of bilateral 
agreements with foreign organizations.  
314 Thus, PAM -CG has a good database  of works, which also allows it to track the use of music by users 
and request payment of royalties, accordingly. The newly re -designed website is transparent and several 
internal documents are accessible to the public. PAM -CG is a full member of CISAC (th e International 
Confederation of Authors and Composers Societies) as of June 2012. PAM -MG signed 33 reciprocal 
representation agreements with sister societies in other countries. European Commission (2012), Screening 
Report of Montenegro . Chapter 7 – Intellectual Property Law. Viewed at: https://ec.europa.eu/neighbourhood -
enlargement/sites/near/files/pdf/monte negro/screening_reports/screening_report_montenegro_ch07.pdf . 
315 Petosevic  online article, "New Copyright Law Enters Into Force In Montenegro", September 2016. 
Viewed at: https://www.peto sevic.com/resources/news/2016/09/3519 ; Law on Amendments to the Law on 
Copyright and Related Rights (OG No. 53/16). Viewed at: 
http://www.wipo.int/edocs/lexdocs/laws/en/me/me020en.pdf . WT/TPR/S/369 • Montenegro  
 
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  3.175.   The 2016 amendments regulate in depth the legal protection of databases as a sui generis  
right seemingly in line with the EU directives .316 They also include a new chapter on multi -
territorial licensing of rights in musical works for online use. This chapter defines the 
responsibilities of a collective organization that manages online rights, with the main objective of 
bringing greater tran sparency in managing multi -territorial repertoires, sales reporting and 
invoicing, distribution of royalties, etc. These provisions are to apply as of 1 January 2019.  
3.176.   No agency is fully in charge of all copyright and related matters. IPOM is in charge of s ome 
copyright matters (Section 3.3.6.1).  
3.177.   Civil remedies against copyright infringements include compensation for material and 
non-material damages, royalties, and destruction of counterfeit copies.317 Penal provision s include 
fines of up to €20,000 for a le gal person that engages in collective management of copyright and 
related rights without authorization by the competent authority; up to €6,000 for entrepreneurs ; 
and up to €2,000 for a natural person or an authorized person of a legal entity.318 No data or 
information on the number of copyright infringement cases dealt with from 2012 onwards was 
available from the authorities . 
3.178.   IPOM's Department for Copyright and Related Rights has been responsible for the 
registration of copyright and related rights, the sup ervision of the collective rights management 
organizations and international cooperation.319 It also issues and revokes licences and 
authorizations to collective management of copyright and related rights organizations in 
Montenegro for the period of five  years, as well as supervises their activities. As of 
November  2017, the Department for Copyright and Related Rights appeared  to have 
two employees. According to the 2012 European Commission  Screening report, Montenegro's 
administrative capacity in the area o f copyright could be further strengthened, especially with 
regard to the understanding and practical implications of the copyright law provisions; action to 
address this challenge was taken in 2014 under the Rules on Internal Organization and Systematic 
Job Plan by increasing human resources.320  
3.179.   Under the Law on Optical Disks (OG Nos. 2/07 and 53/11), the registration of business 
activity is required when reproducing optical disks for commercial purposes.321 The relevant 
provisions of the Law on Contracts and Torts (OG No. 37/11) apply to damages, which comprise 
actual loss and lost profits. If the infringement was committed intentionally or as a result of gross 
negligence, the plaintiff may claim up to triple the amount of the actual losses and lost profits.322  
3.3.6.3   Enforcement  
3.180.   Despite progress in strengthening the regulatory framework for IPR protection, challenges 
appear to remain in IPR enforcement; in particular, further strengthening of the cooperation 
mechanisms of all IPRs -related bodies, and improvement of the track record on investigations, 
                                                
316 Petosevic  online article, "New Copyright Law Enters Into Force In Montenegro", September 2016. 
Viewed at: https://www.petosevic.com/resources/news/2016/09/3519 ; Law on Amendments to the Law on 
Copyright and Related Rights (OG No. 53/16). Viewed at: 
http://www.wipo.int/edocs/lexdocs/laws/en/me/me020en.pdf . 
317 Law on Copyright and Related Righ ts (OG No. 37/11). Viewed at: 
http://www.wipo.int/wipolex/en/details.jsp?id=11369 . 
318 Law on Copyright and Related Rights  (OG No. 37/11). Viewed at: 
http://www.wipo.int/wipolex/en/details.jsp?id=11369 . 
319 European Commission (2012), Screening Report of Montenegro, Chapter 7 – Intellectual Property 
Law. Viewed at: https://ec.europa.eu/neighbourhood -
enlargement/sites/near/files/pdf/montenegro/screening_reports/screening_report_montenegro_ch07.pdf .  
320 European Commission (2012), Scr eening Report of Montenegro, Chapter 7 – Intellectual Property 
Law. Viewed at: https://ec.europa.eu/neighb ourhood -
enlargement/sites/near/files/pdf/montenegro/screening_reports/screening_report_montenegro_ch07.pdf . 
321 Law on Optical Disks (OG No. 53/11). Viewed at: 
http://www.wipo.int/wipolex/en/ details.jsp?id=8705 ; U.S. Embassy in Montenegro. Montenegro Country 
Commercial Guide, 2016.  Viewed at: https://me.usembassy.gov/wp -
content/uploads/sites/2 50/2017/02/Montenegro_2016_CCG.pdf . 
322 IAM online information. Viewed at: http://www.iam -media.com/Intelligence/Patents -in-
Europe/2011/Articles/Montenegro . WT/TPR/S/369 • Montenegro  
 
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  prosecutions and judicial treatment of violations, including reporting, are required.323 In 2017, a 
Coordination Team for the Enforcement of Intellectual Property Rights  was set  up, consisting of 
representatives of the Police Administration, the Administration for Inspection Affairs, the Customs 
Administration and IPOM . It established special working groups to organize and implement joint 
actions preventing and suppressing IPR violation that are expected to raise criminal charges and 
convictions.324 IPR enforcement is, inter alia,  governed by the 2011 Law on Enforcement and 
Securing of Claims (OG  No. 36/11) which sets the procedure for satisfying claims on the basis of 
domestic or foreign enforceable or authentic document s and securing claims.325 The Law on 
Enforcement of the Legislation that Regulates Protection of Intellectual Property Rights (OG Nos. 
25/05, 37/11, 40/11) defines, inter alia , the authorities in charge of IPRs enforcement and the 
relevant proceedings. Under this Law , the official inspector is authorized to act upon request of the 
rights holder or ex officio .326 Legal entities can be f ined up to €20,000 for an economic offen ce.  
3.3.6.3.1   Domestic enforcement  
3.181.   The IPOM can take administrative action, ex officio  or upon request of the rights holder, in 
cases of IPR infringement related to registration of intellectual property rights (Section 3.4.4. 2.); 
no cases were initiated ex officio  by the IPOM so far. In response , in 2016 the IPOM established a 
Working Group involving representatives of the Administration for Inspection Affairs, the Customs 
Administration, the Commercial Court, the Ministry of Interiors, the Supreme State Prosecution 
and the Statistical Bureau, for the development of methodology for collection and analyses of 
enforcement statistics; as a result , in 2016 a statistical report on enforcement of IP rights in 
Montenegro was prepared and submitted to the European Commission. Furthermore, in 2016  the 
IPOM established a new Patent data management system with EPO, and its website was made 
more user -friendly and accessible.327 In cooperation with the EUIPO, in 2017 IPOM started the 
process f or arranging and completing databases for trademarks and designs, for the purpose of 
their implementation and networking into EUIPO's tools TMView and DesignView. In light of the 
significant expansion of its duties and tasks , the IPOM 's staffing  levels  seem to remain relatively 
low although some action has been  taken to increase human resources.328  
3.182.   The Market Inspectorate  was set up in 1991 and  since 1 July 2012  has been  a subdivision 
of the Department of the Protection of Market and Economy, Games of Chance  and Public 
Procurement under the Administration for Inspection Affairs (a joint inspections authority) . Under 
the Law on the Application of Regulations Governing the Protection of Intellectual Property Rights 
(OG Nos. 45/05, 73/10, 37/11, 40/11, 18/14, 42 /15 and 42/16), the Market Inspectorate  can 
undertake IPR investigations, ex officio  or upon request of the rights holder; although there are no 
inspectors speciali zed in IPR issues , relevant training was organized for several of its inspectors. 
Between 20 10 and 2012, it conducted 595 industrial property controls and detected eleven 
trademark infringements; it also undertook 388 copyright controls and found 138  irregularities. 
Between 2012 and September  2017, it conducted 484 controls on optical media and s eized 
3,975  units (CDs, DVDs) leading to four criminal charges; concerning software piracy, it undertook 
                                                
323 European Commission (2016), Montenegro 2016 Report , Commission Staff Working Document SWD 
(2016) 360 final, 9 November, Brussels. Viewed at: https://ec.europa.eu/neighbourhood -
enlargement/sites/near/files/pdf/key_documents/2016/20161109_report_montenegro.pdf . In 2016, 
Montenegro ranked 15th (out of 20 economies) in Eastern Europe and Central Asia and 94th (out of 
128 economies)  in the world on international property rights protection , which since 2007 has served as a 
barometer for the legal and political environment; physical property rights; and, intellectual property rights. 
Online information. Viewed at: http://internationalpropertyrightsindex.org/country?c=MONTENEGRO  and 
http://internationalpropertyrights index.org/ipri2016_comp . 
324 Its tasks comprise: improvement and strengthening of cooperation between the competent bodies 
for the protection and enforcement of IPRs; coordination of activities for the prevention and suppression of IPR 
breach es; monitoring a nd analysis of the activities of the IPR -competent bodies and proposing measures to 
improv e the efficiency of their work; and, determining and monitoring work priorities, dynamics and deadlines 
for the attainment and evaluation of results.  
325 Law No. 23 -1/11-4/5 of July 12, 2011, on Enforcement and Securing of Claims. Viewed at: 
http://www.wipo.int/wipolex/en/details.jsp?id=13011 . 
326 The Law on Enforcement of the Legislation that Regulates Pr otection of Intellectual Property Rights. 
Viewed online: http://www.wipo.int/edocs/lexdocs/laws/en/me/me042en.pdf . 
327 The system is considered as the most developed and functional pate nt data management tool for 
small patent offices.  
328 European Commission (2016), Montenegro 2016 Report , Commission Staff Working Document SWD 
(2016) 360 final, 9 November, Brussels. Viewed at: https://ec.europa.eu/neighbourhood -
enlargement/sites/near/files/pdf/key_documents/2016/20161109_report_montenegro.pdf . WT/TPR/S/369 • Montenegro  
 
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  497 controls, found 220  irregularities and  that 23% of controlled computers were using illegal 
software leading to 2 criminal charges. During the same period , it undertook 1,400 industrial 
property controls (607 ex officio ) involving chocolates, T -shirts, sneakers, women's boots, 
women's and men's vests, women's shirts, scarves, women's and men's shoes, women's and 
men's jackets, school bags, duvets sung lasses, baby shampoos, shaving products, hair care 
products, bags, etc. leading to the seizure of 795 items mainly infringing trademarks but to no 
sanctions. According to a 2016 European Commission  report, despite the Market Inspectorate's 
numerous checks on software licences , the level of unlicensed software still remains high.329 On 
the other hand, between 2009 and 2015, Montenegro's unlicensed software installation rates were 
estimated to have dropped from 81% (US$11 million) to 76%  (US$6 million).330  
3.3.6.3.2   Borde r enforcement  
3.183.   The Customs Administration can act upon application from the rights holders as well as, 
ex officio, on all IPR infringements concerning exports and imports. The Customs Administration 
deals with goods under suspicion of IPR infringement in ac cordance with the relevant provisions of 
the Customs Law (OG Nos. 07/02, 38/02, 72/02, 21/03, 31/03, 29/05, 66/06, 21/08 and 62/13) 
and the Regulation on the customs treatment of goods for which there is reasonable suspicion of 
infringing intellectual prop erty rights (OG No. 48/16). Decision s on administrative action by the 
Customs Administration may be appealed before the Ministry of Finance.331 Administrative 
procedures and remedies are regulated by Montenegro's Law on General Administrative Procedure 
(OG N os. 56/14, 20/15, 40/16 and 37/17).  
3.184.   The Customs Administration has undertaken action in several areas to ensure protection of 
intellectual property rights; in 2016 , 74 of a total of  241 customs procedures were on an ex officio  
basis.332 Between 2012 and Oct ober 2017, the Customs Administration suspended 193 customs 
procedures, and detained temporarily 169,890 pieces of suspicious goods involving alcoholic 
beverages, cosmetics, perfumes, clothes, clothing accessories (bags, scarves, belts, hats,), sports 
equipment, footwear, watches, toy parts and equipment for mobile phones, jewel lery, etc.). Seized 
suspicious goods are mostly destroyed; between 2014 and mid -October 2017 , a total of 
48,759  pieces of counterfeit goods (e.g. clothing, footwear, and mobile phone  batteries) were 
destroyed.333 In 2015, Montenegro was the biggest source  of counterfeit cigarettes in the 
EU market; it accounted for 17.65% (5,374,000 articles of counterfeit cigarettes) or 3.48% (by 
value) of all IPR infringing goods detained at the EU bo rder.334 In 2012 and 2013, the WCO 
reported three cases (total quantity of 30,280 kg) and four cases (total quantity of 6,585,120 kg) 
of cigarettes seizures (excluding counterfeits) on the EU border coming from Montenegro 
respectively.335 To fight illegal trad e of tobacco and tobacco products, the Customs Administration 
signed Memorandums of Understanding with the world's largest producers of cigarettes, i.e. Japan 
Tobacco International (21 September 2015), Philip Morris (26 January 2016), and British American 
Tobacco (22 March 2016). These MoUs involve exchange of information, identification of illegal 
products, and monitoring of movement of illegal tobacco products for the purposes of suppression 
of illegal trade of tobacco products . The signatory companies are the  trademark protection rights 
holders. As a form of cooperation, the companies are to participate in training Montenegrin 
customs officers performing these tasks.  
                                                
329European Commission (2016), Montenegro 2016 Report , Commission St aff Working Document SWD 
(2016) 360 final, 9 November, Brussels. Viewed at: https://ec.europa.eu/neighbourhood -
enlargement /sites/near/files/pdf/key_documents/2016/20161109_report_montenegro.pdf . 
330 BSA (2016), Seizing Opportunity Through Licence Compliance. BSA Global Software Survey,  
May 2016. Viewed at: http://globalstudy.bsa.org/2016/downloads/studies/BSA_GSS_US.pdf . 
331 Similar to domestic enforcement , the average length of appeal procedures was three months; while 
the average length of proceedings before the Administrative Court (from filing the  case to judgement) was 
6-12 months, as of 2016 (Section 3.3.6.1).  
332 Statistical Report on Enforcement of the Intellectual Property Rights in Montenegro for 2016 . 
333 Report on the Implementation of the National IP Strategy for the period 2012 -2015 and the Action 
Plan for its Implementation  covering the period 1 January 2015 -31 December 2015.  
334 European Commission ( 2015), Report on EU customs enforcement of intellectual property rights. 
Results on the EU border 2015. Viewed at: 
https://ec.europa.eu/taxation_customs/sites/taxation/files/2016_ipr_statistics.pdf ; and online EUbusiness 
article titled Counterfeit goods seized in EU up 15 p ct in 2015 . Viewed at: http://www.eubusiness.com/news -
eu/counterfeit.25ew/ . 
335 WCO (2013 ), Illicit trade report . Viewed at: 
http://www.wcoomd.org/~/media/wco/public/global/pdf/topics/enforcement -and-compliance/activities -and-
programmes/illicit -trade -report/illici t-2013-_-en_lr2.pdf?db=web . WT/TPR/S/369 • Montenegro  
 
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  3.185.   The Customs Administration cooperates with neighbouring countries on IPR enforcement 
and signed bilateral agreements for mutual assistance. Between 2010 and 2012, a technical group 
consisting of customs officers from Montenegro, Italy, Albania, Bosnia and Herzegovina and Serbia 
enhanced cooperation between customs services, enforcement author ities, and right holders. The 
group, inter alia, agreed to exchange information, select common criteria for customs control of 
goods, continue to improve the WIPO INES+ database, access the IPM (Interface Public Members) 
World Customs Organisation (WCO) we b portal and promote awareness -raising campaigns (Venice 
Cooperation Initiative).336 Montenegro has used the WIPO INES+ and the IPM WCO portal since 
October  2010 and July 2012 , respectively. Furthermore, the Customs Administration participated 
in internation al operations organi zed by the WCO, Interpol, Europol, SELEC etc. during which 
goods with counterfeit  trademarks were seized.  
3.186.   Since 2008, the IPOM concluded cooperation agreements with the Intellectual Property 
Offices of the European Union , Serbia, Slovenia, Croatia, Hungary, and Ukraine, involving training 
on specific IPR issues including enforcement. During the review period, the IPOM in cooperation 
with WIPO and EPO have concentrated on education and public awareness raising programmes o n 
the importance of IPR protection. Since 2009, Montenegrin officials participated in numerous 
workshops, seminars and conferences at home and abroad (including at the WTO); as well as  
study visits to improve knowledge and skills.337  
3.3.6.3.3   Judicial action  
3.187.   IPR inf ringements can also be liable to criminal prosecution under the provisions of a 
separate chapter of the Penal Code. Montenegro's Penal Code penalizes IPR violations, allows for 
ex-officio  prosecution, and provides for stricter criminal penalties.338 The viol ation might be subject 
to up to eight years of imprisonment; no information on cases where this sanction was 
implemented was available from the authorities .339  
3.188.   The civil judicial procedures and remedies related to IPRs are governed by the Law on Civil 
Proce dures (OG Nos. 22/04, 28/05, 76/06, 47/15 and 48/15). Montenegrin basic civil courts have 
jurisdiction over civil proceedings, while the only Commercial Court in Podgorica handles cases 
arising from commercial activities.340 Since 2012, there have been five IPR specialized judges 
operating with in the Commercial Court. In 2012, the Commercial Court adopted 29 IPR -related 
decisions (66 in 2010). The average duration of IPR proceedings is six months.341 Provisional 
measures can also be ordered by courts upon the r equest from a right holder and presentation of 
credible evidence.342 By 2016 , criminal prosecution appeared to be unsatisfactory.343 Overall 
                                                
336 INES is an intellectual property database, which compiles, inter alia , data on suspension of customs 
procedures. In 2008, the Montenegro customs administration installed the intellectual property database INES 
in the framework  of a regional project on industrial and intellectual property for the Western Balkans and 
Turkey. Adopted in 2007, this project was carried out by the EPO. An improved version (INES +) was installed 
in 2010 by EPO experts. European Commission ( 2012), Scre ening Report of Montenegro, Chapter 7 – 
Intellectual Property Law. Viewed at: https://ec.europa.eu/neighbo urhood -
enlargement/sites/near/files/pdf/montenegro/screening_reports/screening_report_montenegro_ch07.pdf . 
337 Since 2009, a Department of Intellectual Property and Administrative Procedures at the Customs 
Administration has been in place. Its responsibiliti es, inter alia , include participating in the drafting of IPR 
regulations, monitoring the implementation of these regulations, reviewing and processing applications for 
actions for IPR protection as well as cooperation at national and international level. European Commission 
(2012), Screening Report of Montenegro. Chapter 7 – Intellectual Property Law. Viewed at: 
https://ec.europa.eu/neighbourhood -
enlargement/sites/near/files/pdf/montenegro/screening_reports/screening_report_montenegro_ch07.pdf . 
338 U.S. Embassy in Montenegro. Montenegro Country Commercial Guide, 2016.  Viewed at: 
https://me.usembassy.gov/wp -content/uploads/sites/250/2017/02/Montenegro_2016_CCG.pdf . 
339 The Penal Code of the Republic of Montenegro. Viewed at: 
https://www.wto.org/english/thewto_e/acc_e/cgr_e/WTACCCGR24A1_LEG_9.pdf . 
340 European Commission (2012), Screening Report of Montenegro. Chapter 7 – Intellectual Property 
Law. Viewed at: https://ec.europa.eu/neighbourhood -
enlargement/sites/near/files/pdf/montenegro/screening_reports/screening_report_montenegro_ch07.p df. 
341 As of 2012, average legal costs in the Commercial Court for right holders depend on the value of the 
case subject. The court fees range from €20 to €1,500 and lawyer expenses depend on the case subject and 
range from €75 for claim s of up to €2,500 to €250 for claims above €50,000. European Commission (2012), 
Screening Report of Montenegro, Chapter 7 – Intellectual Property Law. Viewed at: 
https://ec.europa.eu/neighbourhood -
enlargement/sites/near/files/pdf/montenegro/screening_reports/screening_report_montenegro_ch07.pdf . 
342 WTO document WT/ACC/CGR/38, WT/MIN(11)/7, 5 December 2011.  WT/TPR/S/369 • Montenegro  
 
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  Montenegro's enforcement record in this area remained limited with no criminal court cases on 
trademark infringements, and only two cases on patents reported.344  
 
                                                                                                                                                  
343 European Commission (2016), Montenegro 2016 Report , Commission Staff Working Document SWD 
(2016) 360 final, 9 November, Brussels. Viewed at: https://ec.europa.eu/neighbourhood -
enlargement/sites/near/files/pdf/key_documents/2016/20161109_report_montenegro.pdf . 
344 European Commission (2016), Montenegro 2016 Report , Commission Staff Working Document SWD 
(2016) 360 final, 9 Novem ber, Brussels. Viewed at: https://ec.europa.eu/neighbourhood -
enlargement/sites/near/files/pdf/key_documents/2016/20161109_ report_montenegro.pdf . WT/TPR/S/369 • Montenegro  
 
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  4  TRADE POLICIES BY SE CTOR  
4.1  Agriculture, Forestry, and Fisheries  
4.1.  Agriculture (excluding agro -processing), together with forestry and fishing accounted for 9% 
of GDP in 2016 ( Table 1.2 ).  
4.1.1   Agricultur e 
4.2.  While official statistics show a relatively small contribution of agriculture to employment 
(1.3% of the total number of employed persons in 2016), these do not capture agricultural activity 
within family agricultural holdings which is significant. In 20 10, the most recent census,  there were 
48,870 agricultural holdings, of which 99.9% were family agricultural holdings1, and it is estimated 
that 8.3% of the total working age population in Montenegro is engaged in  agriculture . In 201 6, 
the total area of la nd used for agriculture was 2 55,845.8  ha (around  19.7%  of the total 
Montenegrin territory); 94 .3% of this was perennial meadows and pastures for livestock breeding; 
2.8% arable land; 2.2% permanent crops and 0. 7% kitchen gardens.  
4.3.  There is no precise information on state ownership of agricultural land. However, the 
authorities indicated that, by the end of 2017, 200 ha of this land was in the process of being 
rented. The Ministry of Agriculture and Rural Development (MARD) prepares tender documents for  
land rental, with final decisions being taken either by the Government or the Parliament, 
depending on the rental duration.2 In 2017, the Government established a Commission for the 
Valorisation of Agricultural Land, which deals with requests to rent larg e areas of state -owned 
agricultural land; this brings together representatives from various government institutions. The 
State is the majority shareholder in one joint stock agricultural company, Plantaže, which is 
Montenegro's main wine producer, growing around 22 million kilos of wine grapes and grapes for 
fresh consumption , and selling around 12  million litres of wine annually  (Section 3.3.4) .3 The 
authorities confirmed that Plantaže  is not a beneficiary of any domestic support measures.  As set 
out in th e Law on Basic Property Relations (OG No. 19/09), foreigners may not own agricultural 
land in Montenegro but they can rent it.  
4.4.  According to the authorities, Montenegrin agricultural productivity is low , competitiveness 
being hindered by: fragmented parcels  (the average farm size is 4.3 ha); insufficient qualified 
labour; an unfavourable age structure of farmers; obsolete mechanization; low modern technology 
inputs; unfavourable credit terms; unresolved property -rights issues ; and an undeveloped rural 
infras tructure. Farmers also face difficulties in producing standardized products in large quantities 
for domestic and international markets.4 Strengths include: high quality soil, a favourable climate 
for varied  production , and a sufficient workforce. Opportuni ties which have been identified for the 
sector include: strengthening agriculture through tourism; increasing organic production; 
increasing exports of competitive products (lamb, wine and vegetables); and the use of EU and 
state support.  
4.1.1.1   Legal, institutio nal and policy framework  
4.5.  The MARD is responsible for the creation and implementation of agricultural policy (as well as 
fisheries, forestry, hunting and water management policies). It has several directorates and other 
bodies dealing with all aspects of ag riculture.5 The MARD's units for extension services in both 
                                                
1 Strategy for the Development of Agriculture and Rural Areas 2015 -2020. Viewed at: 
www.minpolj.gov.me , citing as its source the Census of Agriculture 2010, MONSTAT.  
2 The Government takes de cisions on concession contracts for up to 30 years, and the Parliament takes 
decisions on concession contracts for more than 30 years.  
3 Plantaže online information, viewed at: http://www.plantaze.com , and informatio n provided by the 
authorities. The State has 55.91% of the shares in Plantaže. One member of the Government is a member of 
its Board of Directors but the State/Government does not manage the work of the company or its business 
policy.  
4 Economic Reform Pro gramme for Montenegro (2017 -2019). Viewed at: 
http://www.gov.me/en/News/145783/Montenegro -Economic -Reform -Programme -2015-2017.html . 
5 These include: the Di rectorate for Agriculture and Fisheries; the Rural Development Directorate; the 
Directorate for IPARD Payments; the Department for Economic Analysis; the Veterinary Administration; the 
Phytosanitary Authority; the Tobacco Agency; the Livestock Selection Se rvice; and the Extension Service in WT/TPR/S/369 • Montenegro  
 
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  plant and livestock production provide t raining, expert advice to farmers and control of direct 
payments to farmers in their respective areas of expertise. Most municipal governments have 
agricult ural unit s, some of which provide support (such as technical support and extension 
services) to agricultural producers.  In 2015, Montenegro established a Register of Agricultural 
Holdings which contains data on farmers using domestic support measures.  
4.6.  The Tobacco Agency, within the MARD, performs functions relating to,  inter alia : the issuance 
of approvals for the production of tobacco and tobacco products and their placement on the 
market; the issuance of approvals for tobacco processing, export, import, w holesale and retail; 
keeping a registry of tobacco trademarks; maintaining a register of traders; monitoring 
performance and undertaking analysis; preparing reports on the implementation of regulations for 
the production and trading of tobacco and tobacco products; helping develop the legal framework 
for tobacco production and trading; and aligning regulations with the EU acquis  (Sections 3.1.5 
and 3 .3.6). 
4.7.  Future anticipated institutional reforms include the  further development of MARD's 
Directorate of Paym ents to become a fully functional payments agency to implement the EU's 
Common Agricultural Policy (CAP) . 
4.8.  The Law on Agriculture and Rural Development (20096, as amended in 2014) is the main 
legal document governing agricultural policy.  The 2014 changes to  the Law allow for the 
establishment of a management structure to use EU pre -accession funds for rural development 
(IPARD funds) . The Law regulates, inter alia : the planning and development of rural areas; 
agricultural policy measures; subsidies for agriculture and rural development , and associated 
conditions; incentives; the organization of producers; quality and labelling of agricultural products 
and food; agricultural products and food; activities of public interest ; and registers. In addition, 
there are a number of sector -specific laws, namely: the Law on Wine; the Law on Tobacco; the 
Law on Olives and Olive Oil; the Law on Livestock; laws on geographic indications 
(Section  3.3.6.1.3) ; the Law on Quality Schemes for Agriculture and Food Products;  and the Law 
on Spirit Drinks . Changes to laws and regulations are underway in the context of Montenegro's 
accession to the E uropean Union.  
4.9.  Together with the tourism sector, agriculture has been identified by the Government as a 
developmental and economic p riority.7 As explained by the authorities, the objective of rural 
development is to improve living conditions in rural areas and the standard of living of farmers; to 
provide the necessary investments in infrastructure and improve production processes ; to increase 
the competitiveness of domestic producers and improve processing facilities; and to provide 
support for the preservation of traditional products.  
4.10.   The key strategic document guiding the reform and development of the sector, including 
with respect t o meeting the challenges of EU accession, is the Strategy for Development of 
Agriculture and Rural Areas 2015 -2020 and it's Action Plan ; this follows on from an earlier strategy 
dating back to 2007 . Recognizing Montenegro's inability to produce on a large  scale, a key focus of 
the Strategy is to use traditional methods of production to develop agriculture and food products 
and thereby secure a niche in the high -quality segment; these products can be marketed through 
tourism. In this regard, efforts are bein g made to direct producers into quality assured schemes 
and provide support to farmers, mainly in the form of training, to meet minimum national 
standards. Other priorities are to meet the demand for agro -food products which can be 
locally -produced through out the year , and increase the production of organic food. Efforts are to 
be focused on helping farmers to meet minimum national standards (a prerequisite for obtaining 
pre-EU accession funding for rural development (IPARD funding)). Long -term goals as art iculated 
in the Strategy are to increase productivity, increase the amount of cultivated land and to comply  
with EU standards for food safety in the primary and processing sectors.  The authorities indicated 
                                                                                                                                                  
Plant Production. The responsibilities of each of these Directorates are delineated in the Strategy for the 
Development of Agriculture and Rural Areas 2015 -2020.  
6 Law on Agriculture and Rural Development (OG No. 56/09).  Viewed at: 
http://seerural.org/1documents/Legal%20Documents/Montenegro/Law%20on%20Agriculture%20and%20Rura
l%20Development.pd f. 
7 As set out in the Government's Directives for Montenegro Development 2013 -2016, the key sectors for 
economic development in Montenegro are: tourism, agriculture, and energy. Viewed at: 
http://www.mf.gov.me/en/organization/sector -for-economic -policy -and-development -/128212/Montenegro -
Development -Directions -2013-2016.html . WT/TPR/S/369 • Montenegro  
 
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  that, in the first two years of implementation of  the Strategy , several steps have been taken to 
meet its objectives, including improving infrastructure, modernizing production, implementing food 
safety standards, and improving environmental and quality of life conditions in rural areas.  
4.1.1.2   Production and t rade 
4.11.   The main agricultural activity in Montenegro is livestock breeding, mainly cattle and sheep. 
Agricultural products grown in Montenegro include: certain fruits (including grapes predominantly 
used for wine -making), cereals and vegetables ( Table 4.1 ). MFN tariff protection is significant for 
most of these items, except cereals ( Table A4.1 ). Most agricultural production and livestock 
rearing takes place on family agricultural holdings.8 The production of food, beverages and tobacco 
products are among Mont enegro's main manufacturing activities ( Table 4.7 ). 
Table 4.1 Main agricultural production, 2012 -16 
Product  2012  2013  2014  2015  2016  
Livestock, milk and eggs       
- cattle (head)  84,701  89,058  93,550  92,452a 89,269  
- sheep (head)  207,047  190,843  204,403  194,636  191,992  
- goats (head)  23,273  29,675  32,997  29,678  31,458  
- pigs (head)  18,451  20,572  22,053  24,951  55,841  
- poultry (pcs)  732,091  620,354  595,675  606,225  835,705  
- horses (head)  3,905  4,858  4,968  4,927  3,947  
- milk ('000 litres)  159,240  181,876  191,801  183,086  180,550  
- eggs ('000 pcs)  68,06  89,72  85,525  101,016  120,195  
Fruit (tonnes)       
- Plums  7,454  11,737  5,743  7,035  13,128  
- Apples  5,687  7,066  4,900  10,615  7,968  
- Pears  1,522  1,845  915 2,649  2,613  
- Peaches  1,591  1,550  1,364  1,585  885 
- Tangerines  3,101  4,396  4,181  3,040  4,485  
- Olives  810 325 796 554 767 
Cereals (tonnes)       
- Wheat  1,444  2,301  2,159  2,111  2,354  
- Rye 329 574 527 339 391 
- Barley  953 1,182  1,147  952 1,068  
- Oats 287 585 476 556 557 
- Corn for grain  1,882  2,946  3,304  2,700  2,650  
Vegetables (tonnes)       
- Onion s 1,693  1,939  2,151  2,342  2,473  
- Tomatoes  3,649  3,863  3,533  3,936  4,464  
- Paprika  4,013  4,169  4,043  4,500  5,644  
- Melons  1,357  1,381  1,280  1,370  1,745  
- Watermelons  12,119  12,369  15,260  20,194  17,413  
- Cucumber s 1,227  1,441  1,512  1,822  1,963  
- Beans  691 966 838 856 932 
- Cabbage s 9,092  11,035  10,442  10,623  12,258  
- Potato es 21,895  28,867  31,097  35,447  39,504  
Grape  production on 
plantations (tonnes)       
- Grapes  27,229  26,347  17,129  23,086  30,153  
a Of the total 92,452 heads, 63,000 are breeding heads (cows and breeding heifers).  
Source:  Data provided by MONTSTAT.  
4.12.   Montenegro is a net importer of agricultural products. In 2016, the value of imports (WTO 
definition) was €471 million , while the value of exports was €56 million. Over the past five years, 
imports as a percentage of total imports remained relatively stable, while there was a peak in 
exports in 2014 (Chart 4.1 )  
                                                
8 According to a 2015 livestock  survey, 34% of poultry production was undertaken by business entities. 
There is negligible involvement by business entities in the production of other livestock categories. MONTSTAT, 
Montenegro in Figures 2016 . Viewed at: 
http://www.monstat.org/userfiles/file/publikacije/CG%20U%20BROJKAMA/MONSTAT_ENG_fin.pdf .  WT/TPR/S/369 • Montenegro  
 
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  Chart 4.1 Trade in Agriculture, 2012 -16 
 
Note:  WTO agriculture definition.  
Source:  WTO Secretariat calculations, based on UNSD, Comtrade database.  
4.13.   In 2016, only a few export groups accounted for most of agricultural exports, namely wine; 
meat; bakery products ; and beer. The top 15 products exported accounted for nearly 90% of the 
value of Montenegro's total agricultural exports (WTO definition9) (Table 4.2 ) 
Table 4.2 Main agricultural exports, 2016  
(€ million)  
HS Code 
4-digit Products  Export value  
(€ million)  
 Agriculture (WTO definition)  56.0 
 Main products (top 15)  48.8 
2204 - Wine of fresh grapes  14.8 
0210 - Meat and edible meat offal  7.5 
1905 - Bread, pastry, cakes, biscuits  5.6 
2203 - Beer made from malt  4.1 
4101 - Raw hides and skins of bovine or equine animals  2.9 
0712 - Dried vegetables  2.3 
1601 - Sausages and similar products, of meat, meat offal  2.1 
3301 - Essential oils  2.0 
1101 - Wheat or meslin flour  1.3 
1806 - Chocolate and other food preparations containing cocoa  1.3 
2403 - Other manufactured tobacco  1.1 
0710 - Vegetables, frozen  1.0 
0709 - Other vegetables, fresh or chilled  1.0 
2208 - Undenatured ethyl alcohol  1.0 
8011 - Fruit and nuts, uncooked or cooked by steaming or boiling  0.9 
Source:  WTO Secretariat calculations, based on UNSD, Comtrade database.  
4.14.   Main agricultural imports (WTO definition) in 2016 at the HS 4 -digit level were pig meat, 
non-alcoholic beverages, bakery products , and chocolate and preparations containing cocoa. The 
                                                
9 For the purposes of this Section of the Trade Policy Review Re port, the definition of agricultural 
products used is HS Chapters 01 -24 less fish and fishery products (HS Chapter 3, 0508, 0511.91, 1504.10, 
1504.20, 1603 -1605 and 2301.20) plus some selected products (HS 2905.43, 2905.44, 2905.45, 3301, 
3501-3505, 3809.1 0, 3823, 3824.60, 4101 -4103, 4301, 5001 -5003, 5101 -5103, 5201 -5203, 5301, and 5302).  
0.0%5.0%10.0%15.0%20.0%25.0%30.0%35.0%
050100150200250300350400450500
2012 2013 2014 2015 2016
Imports
Exports
Imports of agricultural products as a % of total imports
Exports of agricultural products as a % of total exports€millionChart 4. [MNE]  Trade in Agriculture, 2012 -2016
WTO Secretariat calculations, based on UNSD, Comtrade database. Source:WTO agriculture definition. Note:WT/TPR/S/369 • Montenegro  
 
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  top 15 most imported products accounted for nearly 56% of the value of total agricultural imports 
(Table 4.3 ). 
Table 4.3 Main agricultural imports, 2016  
(€ million)  
HS Code 
4-digit Products  Import value 
(€ million)  
 Agriculture (WTO definition)  471.5  
 Main products as a share of total agricultural  imports   263.4  
0203 Meat of swine, fresh, chilled or frozen  46.3 
2202 Waters, containing added sugar, and other non -alcoholic beverages  27.7 
1905 Bread, pastry, cakes, biscuits  24.3 
1806 Chocolate and other preparations containing cocoa  21.3 
2106 Food preparations  18.3 
0102 Live bovine animals  15.5 
0406 Cheese and curd  14.9 
0401 Milk and cream  13.0 
0201 Meat of bovine animals, fresh or chilled  12.9 
1601 Sausages and similar products, of meat, meat offal or blood  12.7 
2309 Preparations of a kind used in animal feeding  12.2 
0207 Meat and edible offal, of poultry  11.4 
2402 Cigars, cheroots, cigarillos and cigarettes  11.2 
1512 Sunflower -seed, safflower or cotton -seed oil  10.9 
0403 Buttermilk, curdled milk and cream, yoghurt  10.6 
Source:  WTO Secretariat calculations, based on UNSD, Comtrade database.  
4.15.   Montenegro has bound all of its tariff lines for agricultural products (WTO definition); the 
simple average MFN applied rate in 2017 was 12.3%. MFN applied rates range from zero to 50%.  
4.16.   Montenegro does not  apply MFN tariff quotas . However , it does  under it s preferential 
agreements with the European Union and Turkey ( Table A3.3 ). 
4.17.   Agricultural products which are subject to SPS measures must enter the country through 
specific border posts where veterinary and phytosanitary inspections are organized.10 
4.18.   Montenegr o does not levy export taxes on any agricultural products.  
4.1.1.3   Support mechanisms  
4.19.   Montenegro has notified to the WTO that it does not provide export subsidies to 
agriculture.11 
4.20.   Montenegro has not yet notified any domestic support measures to the WTO. However, i n 
the context of this Review, the authorities indicated that it intends  to make its first notification by 
the end of 2017. Montenegro is in the process of aligning domestic support measures with EU 
requirements, and in this context will be decoupling some payments from production.  
4.21.   Domestic support to agriculture is provided through the annual agro-budget which 
incorporates a range of measures and incentive schemes aligned with the priorities of agricultural 
policy as contained in the MARD's Strategy for De velopment of A griculture and Rural Areas 
2015-2020 (see above) . Support is divided into four  categories: (i) market price policy measures; 
(ii) rural development measures; (iii) support to general services in agriculture and social 
transfers; and (iv) meas ures for the development of fisheries. In 201 7, the total agro -budget was 
€31,540,000. There has been a notable increase in support for rural development measures over 
the review period, while support for the other types of measures has fluctuated ( Table 4 .4). 
                                                
10 There are seven border inspection posts for veterinary checks (Dobrakovo -Serbia road border 
crossing; Bijelo Polje –Serbia rail border crossing; Ilino brdo –Bosnia and Her zegovina road border crossing; 
Kula–Kosovo road border crossing; Božaj –Albania road border crossing; Bar sea port; and Podgorica airport. 
The control of goods subject to phytosanitary checks is performed at the same points as aforementioned, as 
well as at the Main Post Office of Podgorica.  
11 Its most recent notification was in 2017 and covers the calendar years 2015 and 2016. WTO 
document G/AG/N/MNE/4, 13 February 2017.  WT/TPR/S/369 • Montenegro  
 
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  According to the authorities, in recent years, the emphasis has been placed on improving the 
quality of products (especially milk) ; on investing in milk, olive and vegetable production ; on 
introducing necessary standards and quality schemes; and on supporting organic production.  
Table 4.4 Budgetary allocations to agriculture and fisheries, 2011 -17 
(€ '000)  
Types of measures  2011  2012  2013  2014  2015  2016  2017  
Market -price policy measures  5,710  6,520  6,183  5,448  6,130  5,700  5,721  
Rural development measures  6,615  5,838  5,615  6,581  8,013  8,600  18,667  
Support for general services 
and social transfers in 
agriculture and institutional 
development  6,951  6,708  6,760  6,728  7,143  6,533  5,109  
Fisheries  171 171 214 250 300 348 443 
Animal health protection 
measures and phytosanitary 
measures  1,670  1,337  1,540  1,422  1,390  1,401  1,600  
Total agro-budget  21,117  20,574  20,312  20,429  22,976  22,673  31,540  
Source:  Strategy for the Development of Agriculture and Rural Areas, 2015 -20; and information provided by 
the authorities.  
4.22.   Budgetary outlays under market price policy measures include direct payments,  coupled to 
production, funds granted under the Beekeeping Impro vement Program, and market stabilization 
measures.  In the context of this Review, the authorities indicated that market price measures in 
Montenegro are subsidies to maintain farmers' incomes, and are not designed to raise prices.  
Under the direct payments , producers receive payments: per hectare of cultivated land for cereals, 
potatoes, forage crops, buckwheat and other crops and seed production; per head for livestock 
(cattle, sheep and goats) ; and per litre of milk produced. Minimum requirements apply in  order to 
be eligible for support.12 The main beneficiaries of direct payments are the beef and milk sectors. 
In the context of EU accession, efforts are underway to align direct payments with EU norms, 
which will  include, inter alia , a gradual decoupling f rom production. Funds granted under the 
Beekeeping Improvement Program, another component of market price policy measures, are to 
support the breeding of certain types of queen bee; improve honey quality; support the healthy 
condition of bee communities; p rovide training to beekeepers ; and provide support to young 
beekeepers. Market stabilization measures, another component of market price policy measures, 
fall into two  categories: (a) a market intervention programme which allows for the purchase of 
surplus es in the event of serious market disturbance;  and (b) risk management measures, which 
provide support for farmers for up to 50% of the total insured value of their production insurance 
policies , with the aim of encouraging farmers to take insurance . As no ted by the authorities, 
market stabilization interventions have been used since 2002. The MARD, the Ministry of Social 
Affairs and Labour , and the Pension and Disability and Insurance Fund subsidi ze the purchase of 
lamb meat by pensioners. The aim of the m easure is to support producers through guaranteed 
purchases , as well as ensure the consumption of lamb by the most vulnerable group of pensioners . 
The Government provides funding of around €300,000 for these measures annually . Rural 
development measures ar e largely directed towards strengthening the competitiveness of food 
producers through: support for primary production and processing; support for the introduction of 
international standards; and the establishment of producers' associations.13 A second group of 
support measures are related to sustainable resource management (the sustainable use of 
mountain pastures; the preservation of genetic resources in agriculture; and the development of 
organic agriculture). A third group includes measures  to support the diversification of economic 
                                                
12 These minimum requirements are: a minimum area of 1 ha for cereals; 0.5 ha for all oth er crops; a 
minimum plant density of 17,000 plants per ha for tobacco; more than 4 heads of cows and breeding heifers; 
more than 40 sheep; more than 30 goats; 5 heads of own production or 10 bought heads of young bulls, bulls 
and oxen sold to registered sl aughter houses; and 400 litres of milk per month for primary milk producers 
which supply to registered dairy or cheese factories.  
13 Specifically, support is provided for: investment in agricultural holdings (EU's Instrument for 
Pre-accession Assistance (IP A); investment in agricultural holdings (World Bank's Montenegro Institutional 
Development and Agriculture Strengthening (MIDAS) grants); viticulture and wine growing; the establishment 
and modernization of fruit farms; the development of olive growing; ve getable production; the establishment 
of perennial medicinal and aromatic plants; investment in processing on family holdings; the improvement of 
quality standards; the promotion of agriculture and agricultural products; the improvement of the quality of 
raw milk; and the activities of cooperatives and national associations.  WT/TPR/S/369 • Montenegro  
 
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  activities in rural areas and the renewal and development of rural infrastructure such as transport 
and water.  
4.23.   Support for general services in agriculture includes financial support for services which 
contribute to the production of safer food, improved skills for producers, the introduction of new 
technology, and higher living standards in rural areas.  
4.24.   Pre-accession funding for rural development by the E uropean Union totalling €39 million for 
the period 2014 -20 is available  through its Instrument for Pre -Accession Rural Development 
(IPARD). This programme was adopted in 2015  and became operational in November 2017.  Its 
objective is to provide assistance for the implementation of the acquis communautaire  for the CA P, 
and to contribute to the sustainable adaptation of the agricultural sector and rural areas in the 
candidate country. The elements of support are financing  for primary agriculture, agricultural 
processing and for the expansion of economic activities in r ural areas.  Under the first phase of 
implementation, support is focused on increasing the competitiveness of agricultural producers 
through investments in primary production and food processing. At a later stage , it will also be 
directed towards diversifyi ng rural economic activity; supporting organic agriculture and using 
agro-environmental measures to maximiz e the exploitation of pastures.14 
4.25.   Credit to farmers is available through commercial banks, microfinance institutions and the 
Investment Development Fu nd (IDF) ( Section 3.3.1 ). The IDF provides both direct credit and loans 
through the commercial banks. Loans are for up to €1,000,000 ; grace periods are for 4 years ; and 
repayment periods thereafter are for up to 8 years. Interest rates range from 3.5% to 5 % 
annually.15 Apparently, c ommercial banks typically have high interest rates and unfavourable 
conditions .16 
4.26.   Reduced VAT rates (of 7%) are applied to veterinary medicine , fodder, fertilizer, devices for 
plant protection, reproduction seeds, planting material  and breeding stock , as well as some food 
products to protect consumer interests  (Table 3.5).  
4.1.2   Forestry  
4.27.   Nearly 60% of Montenegro's territory is covered by forests (some 826,782 ha) , and a 
further 9.9% (137,480 ha) is covered by  forest land .17 The estimated total growing stock of forests 
is 133  million m3, of which 104 million m3 is available for wood supply (i.e. they are 
non-protected). Approximately half of Montenegro's forests are state -owned and the other half are 
privately owned. While th e area covered by forests has been increasing in recent decades , largely 
due to the abandonment of agricultural activities, illegal logging and an increased incidence of 
forest fires are of concern.18 Other challenges facing the development of the sector in clude: poor 
forest quality in private forests; a lack of investment and use of outdated equipment; human 
resource deficiencies; a small domestic market and an insufficiently developed position in 
international markets; and a poor road network.19 Sawmilling is the main economic activity in the 
wood processing industry .20 Rural populations in Montenegro continue to depend on forests as a 
main source of energy for heating (C hapter 4 .3.2). Opportunities that have been identified for the 
forestry sector in Montenegro  include, inter alia : production of goo ds with a higher level of 
value -added/finalization; increased use of biomass (wood chips and pellets) as a renewable energy 
                                                
14 Strategy for the Development of Agriculture and Rural Areas 2015 -2020. 
15 Strategy for the Development of Agriculture and Rural Areas 2015 -2020. 
16 Strategy for the Development of Agri culture and Rural Areas 2015 -2020. 
17 Findings of the 2010 National Forest Inventory . FAO definitions of "forests" and "forest land" are used 
by Montenegro. Forests and forest land are considered to be areas of land bigger than 50 acres; with forests 
being more densely covered than forest land.  
18 Strategy for the Development of Agriculture and Rural Areas 2015 -2020. In the context of this 
Review, the authorities indicated that controls of illegal logging have been undertaken, and a working group for 
the moni toring of timber assortments (logs) has been set up. A 2009 National Action Plan for Combatting 
Illegal Activities in Forestry continues to be implemented but apparently innovations and improvements are 
required.  
19 National Forest Strategy (2013). Viewed a t: 
http://www.mek.gov.me/eu/wto/library/strategic_documents . 
20 As noted in the National Forest Strategy (2013), there is some furniture manufacturing (largely 
particle board furniture  using imported wood) as well as equipping of interiors and manufacture of wooden 
houses. However, wood processing and furniture making are stagnating.   WT/TPR/S/369 • Montenegro  
 
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  source; and development of eco -tourism. Montenegro's MFN tariff on products falling  within 
HS Chapter 44 (wood and articles of wood, wood charcoal) is 0%. Production of wood and wood 
products is a key manufacturing subsector (Table  4.7), and exports of sawn or chipped wood are 
among the country's main export groups (Table A1.1).  
4.28.   Respons ibility for the forestry sector rests with the MARD  through the Directorate for 
Forestry, Hunting and Wood Industry. State -owned forests are managed by the Forest 
Administration , and national parks are managed by the National Parks of Montenegro, a public 
company.  
4.29.   The Forest Law (of 2010, and amended in 2015)  regulates , inter alia , silviculture, 
protection, conservation and improvement of forests, planning methods and conditions of forest 
utilization, construction and maintenance of forest roads , and monito ring of forests. It also applies 
to the protection, conservation and utilization of forest trees located outside forests and forest 
land. Other laws in the forest sector are the Law on Game and Hunting and the Law on 
Reproductive Material of Forest Trees. All laws have their respective by -laws.  
4.30.   The National Forest Strategy (2013) is the key policy document guiding the development of 
the sector. Its two general objectives are to increase the forest volume available for wood 
utilization to 115 million m3 and to increase the output of the forestry sector, wood industries and 
other forest -dependent activities from 2 % to 4% of total GDP. It foresees potential growth 
through: an increase in the degree of finalization of wood products; the generation of demand for  
biomass and fuelwood; and the use of  green procurement methods to install wood products into 
public buildings. It sets out specific measures to be taken in order to: improve forests through 
sustainable management; develop the wood industry; enhance the ro le of forestry in rural 
development; protect biodiversity and other eco system forest services; and protect against fires.  
Annual plans are adopted to reach these goals. The authorities anticipate issuing a revised 
strategy in 2018.   
4.31.   Commercialization of s tate-owned forests is permitted through multi -year concession 
agreements, for which a royalty is paid.21 Concessionaries have all the marked trees at their 
disposal for a single price , and must invest in forest communications  (i.e. roads)  and silviculture a t 
their own cost.  The quantity of wood to be marked and harvested  is set out in a 10 -year forest 
management programme, and the Forest Administration is responsible for marking trees.  
Concessions may only be given to companies registered in Montenegro; a fo reign company 
registered in Montenegro that has processing facilities is eligible to obtain a concession.  The Forest 
Administration  proposes concession fees based on parameters set out in the Forest Law;  these  are 
ultimately decided by the Government. The current income gained from concession contracts is 
around €6  million .22 The authorities indicated that consideration is being given to reviewing the 
system of concessions because of concerns about the inadequacy of revenue generated from this 
system. In mid -2017, Montenegro imposed a ban on exports of certain wood items from state 
forests (26 tariff lines in HS 44011100 and HS 44011200 (fuel wood) and HS 4403 (wood in the 
rough)) and imposed temporary export licensing on these items when exported from privat e 
forests (OG No. 23/2017, 7 April 2017). The rationale for this measure was to control exports in 
order to ensure adequate supply for the domestic market, since a prohibition on logging in Albania 
in 2016 had resulted in a surge of exports to that country .23 The export licensing regime is in place 
until 1 May 2019 , with licences being granted by the MARD upon request. They are valid for 
30 days. Special arrangements are in place for cooperation between the MARD and Customs in 
order to monitor the situation (see Section 3.2.3 ).  
                                                
21 As noted in the 2013 National Forest Strategy, most of the contracts were entered into for 7 or 
15 years, and there was one contract for 20 years. The Strategy also notes that concession contracts are not 
fully observed, and the concession system should be improved.  
22 National Forest Strategy (2013). This estimation is based upon the assumption that inves tments in 
various areas are made.  
23 Government of Montenegro online information. Viewed at: 
http://www.gov.me/en/News/170380/Montenegro -s-Cabinet -Session.html?AccessibilityFontSize=150  and 
Balkans Insight online information. Viewed at: http://www.balkaninsight.com/en/article/albania -bans-logging-
to-protect -the-forests -11-30-2015. WT/TPR/S/369 • Montenegro  
 
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  4.32.   Wood cut from state -owned forests must be processed (to a primary level of production) 
before it is exported . This requirement is not applied to wood cut from privately -owned forests).24  
4.33.   An administrative fee is applied to exports to cover the costs of marking the trees and 
issuing origin certificates.  
4.1.3   Fisheries  
4.34.   Fisheries activit ies in Montenegro take place in the coastal region and the Skadar lake. The 
coastline stretches for 294 km and territorial waters cover 2,099 km2. While overal l the 
Montenegrin fisheries sector is underdeveloped, under exploited and of an artisanal character, the 
authorities indicated that it has a strong social and cultural dimension. There are no figures on its 
contribution to GDP, which is aggregated with agr iculture, f orestry and hunting (see above).  
According to MONSTAT, 269 persons were employed in marine fisheries in 2013, mostly on a 
part-time basis (latest available data). In 2010,  the most recent date for which data is available,  it 
was estimated that b etween 120 and 170 people were engaged in aquaculture . There is no data 
collected on the contribution of fish processing to the economy and employment, nor on the type 
of fish processing that takes place in Montenegro. The authorities see the development o f the 
sector as being linked with tourism and processing.  
4.35.   The MARD is in charge of the development and implementation of fisheries policy, including 
the drafting of legal texts and the preparation of the annual budget.  In 2017, a Fisheries 
Directorate was established, and a fisheries inspection service falls within it.  There are no producer 
organizations , and marketing channels are generally linked with direct sales to restaurants and, to 
a smaller extent, to the processing sector and retailers.  
4.36.   Montenegro  is a member of the FAO's  General Fisheries Commission for the Mediterranean 
(GFCM).25 It has no fisheries partnership agreements with other countries.  
4.37.   The Law on Marine Fisheries and Mariculture (2009) governs the marine fisheries and 
marine aquaculture ( mariculture) subsectors.26 It requires that those engaging in commercial 
marine fishing are registered with the Central Register of the Commercial Court (CRCC) and the 
Register of Professional Fishermen. Vessels must be registered with the Register of Vesse ls, and a 
permit is issued for which a fee is levied.27 With respect to the former, the Law distinguishes 
between "large -" and "small -"scale commercial fisheries based upon the length of the vessels and 
the fishing gear that may be used. Small -scale commerc ial fisheries vessels are limited to 
12 m length overall and large -scale commercial fisheries  vessels  are limited to 34 m length overall. 
The Law allows foreign legal and natural persons to engage in marine fisheries in accordance with 
the Law.28 Companies and persons undertaking mariculture activities must also be registered with 
the CRCC and hold a mariculture permit, for which a fee is levied. Mariculture projects must be 
approved by the authorities.  
4.38.   The Law on Freshwater Fisheries and Aquaculture (OG 11/ 07) governs fresh water fisheries 
and aquaculture, and regulates the areas of sport and recreational fishing and freshwater fish 
farming. There are no restrictions on foreign companies or natural persons.  
4.39.   Legal and  regulatory reforms are underway to comply  with the EU Common Fisheries Policy 
(CFP). In this regard , a strategy and an action plan for compliance were adopted in 2015. The 
strategy focuses on: continuing to build processes to meet EU quality and hygiene standards; 
sustainable fisheries and aquacu lture; and administrative and institutional capacity -building. Key 
steps to be taken include: alignment with the CFP and the Mediterranean Regulation; strengthened 
                                                
24 National Forest Strategy (June 2013).  
25 The stated official objective of the GFCM is "to ensure the conservation and the sustainable use, at 
the biological, social, economic and environmental level, of living marine resources as well as the sustainable 
development of aquaculture in the Mediterr anean and in the Black Sea". It is comprised of 24 members, 
including the European Union as one. FAO online information. Viewed at: 
http://www.fao.org/gfcm/background/about/en/ . 
26 Law on Marine Fisheries and Mariculture. Viewed at: 
http://www.faoadriamed.org/pdf/Legislation/Montenegro/Law_on_Marine_Fisheries_Maricu lture_Aug_2009.pdf  
27 The fee amount is based on the fishing capacity of the vessel and the significance of commercial 
fishing (Articles 46 and 47).  
28 Law on Marine Fisheries and Mariculture, Article 3.  WT/TPR/S/369 • Montenegro  
 
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  data collection; alignment with the EU's Fleet Policy; fisheries control measures (related t o 
traceability, data certification and catch certificates); strengthened administrative capacity; 
ratification of the UN Convention Relating to the Conservation and Management of Straddling Fish 
Stocks and Highly Migratory Fish Stocks; and alignment with t he EU's position vis -à-vis other 
international and regional fisheries organizations.29 It is expected that three new laws will be 
adopted in 201 8 (a law on freshwater fisheries and  aquaculture;  one on marine fisheries and 
mariculture;  and one on structural measures , market organization  and state aid  in fisheries and 
aquaculture30), as well as multiple regulations.  
4.40.   In 2016, t he Montenegrin fleet consist ed of 150 vessels , including  22 bottom trawlers; 
17 purse seiners and 111 small commercial fisheries vessels. Most of the catch comes from the 
"small" commercial fisheries segment. Foreig n fishing  vessels operating  in Montenegrin waters  
must be registered with, and licenced by, the Fisheries Directorate (this requirement is als o 
applied to domestic vessels).  In 2017, there were four such registered vessels , from Turkey 
(two vessels), Azerbaijan ( one) and the Russian Federation ( one); they obtain a licence for 
five years , for which they must pay a fee of approximately €5,000, dep ending on the fishing 
capacity of the vessel and the fishing gear used . Montenegro has adopted various tools to combat 
illegal fishing.31 
4.41.   Every year , Montenegro sets a  maximum allowable catch; this is monitored through the 
daily logs which fishermen are req uired to submit.  The maximum allowable catch per year for the 
period 2016 -21 is 3,000 tonnes for pelagic species and 1,706 tonnes for demersal species. In 
2015, Montenegro's total saltwater fish catch amounted to 832 tonnes, a slight increase compared 
to the two preceding years, and significantly below the annual quotas set for this period 
(Table  4.5).32 On the basis of data collected by the Fisheries Directorate, in 2016, the total 
saltwater fish catch was only 18% of the maximum allowable catch.  
Table 4.5 Catch of saltwater fish, by species, 2012 -15 
(Tonnes)  
 2012  2013  2014  2015  
Pelagic fisha 245 226 222 245 
Other fishb 298 269 299 313 
Cephalopodsc 55 44 51 51 
Shellfish  156 180 184 195 
Crayfish  25 22 31 28 
Total  779 741 787 832 
a Main species are: sardelle; sprat; anchovy; mackerel; chub mackerel; scad and tuna.  
b Main species are: hake ; red mullet ; dentex ; grey mullet ; eels; picarel; bogue; saupe; dogfish; 
catfish and skate.  
c Main species are: squid; cuttlefish; octopus and musky octopus.  
Source:  Information provided by MONTSTAT.  
4.42.   Aquaculture is largely marine -based . Most recent figures from 2013 reported produc tion of 
550 tonnes of trout; 189  tonnes of mussels; 3.2 tonnes of oysters;  76 tonnes of sea bass; and 
45 tonnes of sea bream. There are 33 freshwater and  19 mariculture  farms.  
4.43.   Montenegro is a net importer of fish and  fish products ; tariff protection ranges fr om 
duty-free to 20% (Table A3.1 ). In 2016, the value of these imports was just over €16 million and 
the value of exports was just under €100,000. In the same year, the main sources of imports in 
descending order of importance  were Spain, Croatia, Thailand, Italy, and Argentina.  Licences  are 
not required to import fish into Montenegro. Montenegro exports relatively small quantities of fish, 
                                                
29 MARD (June 2015) Fisheries Strategy of Montenegro 20 15-20 with an Action Plan (for transposition, 
implementation and enforcement of EU aquis). Viewed at: https://www.eu.me/en/13/13 -
documents?download=1581:fisheries . 
30 The new law o n freshwater fisheries and  aquaculture  will be aligned with the EU Services Directive, 
and the other two new laws will be aligned with the EU's Common Fisheries Policy.  
31 These tools include: satellite systems to follow vessels; the creation of a register of fishing vessels; 
and the automatic identification of fishing vessels. In 2016, three vessels were seized (two Albanian and one 
Italian). Sanctions were applied and the vessels were reported to the GFCM.  
32 The maximum allowable catch set for the period 2 011-16 was 20,000 tonnes for pelagic species and 
1,706 tonnes for demersal species.  WT/TPR/S/369 • Montenegro  
 
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  mainly to Serbia and Bosnia  Herzegovina. It applies tariff quotas on certain live and processed fish 
under its RTA with the E uropean Union (Table  A3.3). No export taxes are applied.  
4.44.   Budgetary spending on fisheries has accounted for a minimal, but slightly increasing , share 
of the agro -budget since 2012 (0.8% of the budget in 2012 (€171,000); 1% in 2013 (€213,220); 
1% in 2014 (€250,050) ; and 2% in 2015 ( €300,000).  
4.45.   Montenegro has notified its fisheries support to the WTO for the years 2013 and 2014.33 In 
the context of this Review, the authorities supplied data for the years 2015 and 2016 which will 
shortly be notified to the WTO ( Table 4.6).  For all progra mmes , the MARD is responsible for 
granting the subsidy. The authorities indicated that support does not have trade effects.  
Table 4.6 Support to the fisheries sector, 2015 -16 
Programme title  Objectives  Beneficiaries  Budget 
2015 (€)  Budget 
2016 (€)  
Improvement of 
fishing fleet  Modernization and increase of fishing 
fleet and increased efficiency and 
competitiveness of catch  Professional 
fishermen  110,000  160,000  
Improvement of 
mariculture sector  Improve competitiveness and efficiency 
(i.e. through construction of sites and 
facilities and purchase of equipment) and 
protect shellfish breeding sites from 
predators (purchase of protective nets)  Companies and 
persons holding 
mariculture 
licences  45,000  45,000  
Improvement of the 
marine fisheries 
sector  Creation of conditions for the 
maintenance and preservation of 
fish/other marine organisms  Companies and 
persons 
registered in the 
CRCC  30,000  0 
Sustainable 
management and 
preservation of 
resources of fish 
and other marine 
organisms  Funding to: assess fish resources in order 
to set catch quotas; create fishery sea 
safe zones; reduce illegal fishing; and 
maintain and improve the Fishery 
Information System and the Satellite 
Monitoring System for vessels  Institute of 
Marine Biology; 
IT experts and 
mobile service 
providers  61,000  64,000  
Measures for 
improvement of 
freshwater fisheries  Support to estimate available fish 
resources in freshwater fishery waters; 
and develop sport fishing tourism and 
strengthen activities of sport fishing clubs  Faculty of 
Natural Science  
of the University 
of Montenegro  
and fishing 
stock 
beneficiaries  24,000  29,000  
Measures for 
improvement of 
freshwater 
aquaculture sector  Support to improve competitiveness and 
efficiency through co -financing of 
breeders of fish for the reconstruction of 
breeding sites; construction of facilities; 
and purchase of equipment to automate 
the growing process and to improve 
hygiene  Companies/ 
persons 
registered for 
freshwater 
aquaculture 
activities  30,000  50,000  
Source:  Information provided by the authorities.  
4.2  Manufacturing  
4.46.   In 2016, the GDP share of manufacturing (including agro -processing) in the economy was 
4.6%, and accounted for 6.3% of the total number of employed persons (Table 1. 2). The structure 
of the Montenegrin economy has changed significantly in the last 15 years. This change is reflected 
in the increasing share of services at the expense of a reduced s hare of industry and agriculture 
within overall economic activity. Within manufacturing, the most significant share of production is 
the subsector of production of pharmaceutical products and preparations, followed by production 
of basic metals and product ion of metal products, production of food products, beverages and 
tobacco products, production of other non -metallic mineral products, production of machines and 
equipment, and wood and cork products ( Table 4.7 )  
                                                
33 WTO document G/SCM/N/284/MNE, 22 May 2015.  WT/TPR/S/369 • Montenegro  
 
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  4.47.   The guiding strategy  for the manufacturing sector  is the  "Industrial Policy of Montenegro 
Until 2020" , adopted in 2016. This integrates measures and activities for the manufacturing sector 
which were incorporated into an earlier  "Development Strategy of the Manufacturing Industry in 
Montenegro 2014 -2018".34 
Table 4.7 Share of total industrial production, 2012 -16  
(%) 
 2012  2013  2014  2015  2016  
Food products  11.9 13.7 15.2 9.8 12.1 
Beverages  5.9 5.8 5.9 4.8 5 
Tobacco products  1.8 4.3 4.8 3.5 1.9 
Clothes  0.2 0.2 0.2 0.2 0.1 
Leather and leather products  0 0.2 0.2 0.2 0.1 
Wood and products of wood and cork  2.5 2.3 4.1 4.5 5.3 
Paper and paper products  0.8 1.2 1.3 1.0 1.2 
Printing and reproduction of recorded media  0.7 0.8 0.9 0.6 0.5 
Chemicals and chemical products  0.3 0.4 0.4 0.3 0.1 
Basic pharmaceutical products  16.8 19.1 16.3 25.5 25.8 
Rubber and plastic products  0.2 0.2 0.2 0.5 0.5 
Products from non -metal minerals  10.2 15 16.3 14.7 14.7 
Basic metals  35.6 23.4 21.1 19.9 18.3 
Metal products (except machines and equipment)  2.7 2.1 0.4 3 2.6 
Other machines and equipment  9.4 9.8 11.7 10.8 10.9 
Furniture  0.2 0.2 0.2 0.2 0.1 
Repair and installation of machinery and equipment  0.8 1.2 0.7 0.3 0.1 
Source:  MONSTAT.  
4.48.   The Policy identifies manufacturing (specifically agro -food, wood processing, metal and 
pharmaceutical products) as a priority sector with potential for growth. Other priority subs ectors 
are energy ( Section 4.3.2 ) and tourism ( Section 4.4.5 ).35 The Policy notes that structural 
weaknesses of the economy include low labour productivity, an export structure concentrated on 
exports to a small number of traditional markets, and in relatively declining world markets, 
insufficient industrial growth within sectors characterized by techno logical intensity or the use of 
modern, advanced manufacturing methods. Reindustrialization is a key objective in strengthening 
and rebalancing the economy , which has become increasingly services -dominated.36 In this regard, 
two key challenges that need to be addressed to improve industrial competitiveness have been 
identified. The first is a more efficient utilization of "input" factors and improvement of basic 
development preconditions.37 The second is to provide better "output" performances at the 
enterpri se level, including through trade integration, improved productivity, innovation, better 
exploitation of resources, the development of new high value -added products and support to 
SMEs.  According to the authorities, in line with the action plan for impleme ntation of the Policy, 
support programmes, especially ones aimed at modernizing the manufacturing industry through 
procurement of equipment and improvement of the innovative potential of SMEs in the 
manufacturing sector, have been implemented.  
4.49.   There are va rious programmes in place in order to support businesses in Montenegro. Those 
that are specific to the manufacturing sector are the Business Zone Programme; the Programme 
for Modernization of Manufacturing Industries ; and the Programme for Improvement of Innovative 
Activities in SMEs in Manufacturing Industries  (see below) . Manufacturing businesses may also 
benefit from incentives and other support offered a range of other cross -sectoral programmes (see 
Sections 3.3.1 and 3.3.2).  
                                                
34 The Industrial Policy of Montenegro Until 2020 and the Development Strategy of the Manufacturing 
Industry in Montenegro were viewed at: http://www.mek.gov.me/en/wto/library/strategic_documents . 
35 In the context of this policy document, industrial policy is viewed in broad terms, to encompass the 
non-financi al business economy. Industrial Policy of Montenegro Until 2020  (2016), p. 3.  
36 As noted in the policy document "the ongoing de -industrialization of the Montenegrin economy over 
the past few decades, towards an economy dominated by services, creates signi ficant risks that the economy is 
becoming sectorally unbalanced, insufficiently diversified, and vulnerable to external economic shocks".  
37 These include the development of the road network; better use of natural resources; application of 
information and communication technologies; educational and vocational training; establishing a clear and 
predictable regulatory framework and online access to public services; improved access to finance; and 
improvements to the capital market.  WT/TPR/S/369 • Montenegro  
 
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  4.50.   The aim of the Business Z ones Development Project  is to attract investment and increase 
employment, particularly in less developed areas of the country, and to overcome regional 
disparities.  The Decree on Business Zones (OG No. 77/16) adopted in 2016 (as amended in 2017) 
defines t he model of establishing business zones, their classification according to their strategic 
importance, the model managing business zones, and incentives at the state level. Business zones 
of strategic importance are entities established and managed by the Government. Business zones 
of local importance are entities established and managed by a local self -government unit, alone or 
in cooperation with another founder, which may also be a business entity. Business zones are 
specific locations in the municipal t erritories where the investors can use administrative support 
and tax relief from state and local levels. Sometimes infrastructural facilities are also provided by 
the state or local administration.  Incentives offered to enterprises engaged in non -pollutin g light 
industry within the zones are  set out in Section 3.3.1.2, Table 3.7.  As at mid -2017, there were 
business zones with in nine municipalities. Data will be available in mid -2018 on the companies 
established within business zones.   
4.51.   The Industry Moderniz ation Support Program is aimed at eliminating the key barriers to the 
development competitiveness of Montenegrin companies (outdated equipment; low flexibility and 
productivity in manufacturing; unsatisfactory quality o f manufacturing systems), by co -financing 
part of the costs for investment in equipment purchases for processing industries (such as 
production equipment/machinery; used manufacturing equipment/machinery (not older than 
five years); and new parts and tools used to put unused machines into ope ration.  Incentives 
provided and application procedures are set out in Section 3.3.1.2, Table 3.7.   
4.52.   The Program for Improvement of Innovative Activities of SMEs in Manufacturing is a grant 
scheme to support SMEs in the processing industry sector, with certa in exclusions.  Details of the 
value of incentives provided, and excluded sectors, are set out in Section  3.3.1.2, Table 3.7.  
4.53.   The average applied MFN tariff on non -agricultural products (WTO definition) in 2017 was 
3.1%; tariffs range from 0% to 20%. Accord ing to the ISIC definition (excluding food processing), 
the average applied tariff on manufactured goods was 2.7%, with tariffs ranging from 0%  to 20% 
(Table A3.1 ). Montenegro's main imports of manufactured products (SITC Rev. 3 definition) were 
machinery and transport equipment and semi -manufactured goods including structures and parts 
of structures; cement and ceramic bricks, tiles and pipes ( Table A1.2 ). Its main exports of 
manufactured products (SITC Rev. 3 definition) were iron and steel bars and rods;  medicines; and 
certain machinery and transport equipment ( Table A1.1 ).  
4.3  Mining and Energy  
4.3.1   Mining  
4.54.   Mining and quarrying accounted for 1. 3% of GDP in 201 6 and 0.9% of total employment 
(Table 1.2 ).  
4.55.   The legal framework governing the sector is the Law on Minin g (OG No. 65/08 as amended 
by 74/10) and the Law on Geological Exploration  (OG Nos. 28/93, 27/94, 42/94, 26/07, 28/11) 
and their various by -laws.38 According to the authorities, the Law on Mining is completely 
harmonized with EU Directive 92/104/EEC of 3 De cember 1992, which lays down the minimum 
requirements for improving the safety and health protection of workers in surface and 
underground mineral -extracting industries and the Directive 85/337/EEC (amended by Council 
Directive 97/11/EC) on the assessment of effects of certain public and private projects on the 
environment.   
                                                
38 These by -laws are: Regula tion on the contents of the state plan for the exploitation of mineral raw 
materials (OG No. 44/11); Regulation on the funds needed to remedy and recultivate areas in which mining 
takes place, and on the manner of calculating, paying and using these funds (OG No. 55/11); Rulebook on 
closely defined conditions for the issuing of licences for mining and for the design of mining projects 
(OG No. 3/10); Rulebook on the programme and manner of taking professional exams in the mining industry 
(OG No. 66/10); Rule book on mining measurements (OG No. 26/94); Rulebook on the content of mining 
projects (OG No. 74/09); Instructions on the development of the annual technical report and the annual 
financial report on the performance of concessioners with the right to expl oit mineral raw materials 
(OG No. 10/96).  WT/TPR/S/369 • Montenegro  
 
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  4.56.   As set out in the Law on Mining, Montenegro's mineral wealth39 is owned by the State . It 
may only be exploited by business companies (foreign and local) under conditions as set out in the 
Law, involving a concession contract and the payment of a fee. An exception applies to the mining 
of gravel, sand and stone used for the construction and m aintenance of local infrastructural 
structures. In this case, only an approval is required , and the mining activity is supervised by the 
competent authority of the local administration. Companies exploiting mineral resources must 
simultaneously carry out a dditional geological explorations to update reserves in the field being 
exploited.  Domestic and foreign companies are treated equally under mining legislation and 
regulations.  
4.57.   Responsibilities in the mining area are set out in the Law on Mining , and are divided 
between the Government  and the Ministry of Economy.40 The Government issues the State Plan for 
the Exploitation of Mineral Resources and rules for its implementation; stipulates requirements and 
the manner of granting the use of mineral resources; dec ides on mining -related concession 
awards; and sets out criteria for assessing funds to rehabilitate areas which have been mined. The 
Ministry of Economy , through its Directorate for Mining and Geological Research,  regulates the 
sector, decides on certain a ppeals and carries out inspection supervision. It, inter alia , also assists 
the Government in developing its State Plan; has various administrative responsibilities with 
respect to concessionaires; provides background support in developing regulations; iss ues licences 
and approvals; organizes technical inspections; and calculates the cost of rehabilitation of mining 
sites.  
4.58.   The State has 31.11% of shares in the Pljevlja Coal Mine, a joint -stock company which 
produces brown coal.  
4.59.   There is a  State Plan for the exploitation of mineral resources which contains a general plan , 
valid for up to 10 years. An exploitation plan is being developed. Mining production comprises 
quarrying products, bauxite, lead and zinc ( Table 4.8 ). Data on foreign inve stment in the sector 
was not available.  
Table 4.8 Mining production 2012 -2016  
 unit 2012  2013  2014  2015  2016  
Volume  
Architectural or decorative 
building  stone  m3 5,503  5,165  5,851  6,032  3,190  
Technical construction 
stone  m3 336,033  309,229  653,507  517,639  299,818  
Gravel and sand  m3 0 4,822  39,381  33,623  0 
Bauxite  tonnes  0 0 0 0 497,779  
White bauxite  tonnes  5,380  3,737  2,086  1,801  0 
Lead and zinc  tonnes  960,420  949,573  968,428  1,080,020  1,569,184  
Value  
Total value of mining 
production  € '000 61,167  62,023  69,559  79,178  94,622  
Source:  Information provided by the authorities.  
4.60.   Tariff protection in the mining sector is low. The simple average applied tariff in 2017 (ISIC 
definition) was 1.2%, with tariffs ranging from 0 % to 8%. In 2016, exports of mining products 
(excluding fuel) accounted for 31.9% of total exports, comprising mainly aluminium ores and 
concentrates, zinc ores and concentrates, other non -ferrous base metal waste and scrap , and 
unwro ught aluminium and aluminium alloys ( Table A1.1 ). 
                                                
39 As set out in Article 4 of the Law, mineral resources include: all types of coal and oil shale; 
hydrocarbons in liquid and gaseous state (oil and gas) and other natural gases; metallic mineral resources and 
usabl e compounds thereof; non -metallic mineral resources and raw materials used for the production of 
construction materials; radioactive mineral resources; all types of salts and saline waters; mineral and 
geothermic waters used to obtain useful mineral resour ces and geothermal energy, as well as groundwaters 
related to mining technology and gases present therein; and technogenic mineral resources created during the 
process of exploitation and processing of mineral waters.  
40 The Law on Mining stipulates that ju risdiction in the mining industry shall be shared between the 
Government, the Ministry of Economy and an Administration Authority. The Administration Authority has not 
yet been established and its tasks are being performed by the Directorate for Mining and  Geological Research 
within the Ministry of Economy.  WT/TPR/S/369 • Montenegro  
 
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  4.61.   As set out in the Mining Law, revenues from concession contracts are divided between the 
central government (70%) and the municipality in which the mining activity takes place (30%). 
Since 2012, revenue col lected from concession fees on an annual basis has ranged from €810,517 
to €5,134,598.  
4.3.2   Energy  
4.3.2.1   Overview  
4.62.   Montenegro's domestic production of energy comes from hydro -electricit y, coal and 
fuelwoods ( Table 4.9 ). To meet domestic demand , it imports around 10% to 15 % of its energy 
needs . All petroleum is imported,  largely from Greece and , to a lesser extent, Croatia. In 201 5, 
energy consumed by households accounted for  46.4%  of all energy consumed; industry  28.6% ; 
transport  1.2% ; and services  23.3% . In the same year, losses in transmission were 3.8% , while 
losses in distribution were 15.62%. While the internal energy market has been fully opened to 
competition since 2015, the State has a significant ownership stake  in the electricity market , in the 
areas of gener ation, transmission and distribution (see below) . 
Table 4.9 Energy production, 2012 -16 
Production  2012  2013  2014  2015  2016  
Electricity (total) (GWh)  2,844  3,809  3,040  2,873.6  3,024  
 - solar .. .. 1.9 2.1 .. 
 - hydro  1,477  2,498  1,718  1,462  1,807  
Coal (total) (1,000 t onnes ) 1,786  1,692  1,655  1,772.9  1,398  
- brown coal  .. .. .. 17.9 48 
- lignite  1,786  1,692  1,655  1,755  1,350  
Fuelwoods and other (total) (m3)      
- firewood  749,280  711,818  726,164  783,686  .. 
- wood residue  93,667  85,589  71,438  83,681  .. 
- wood chips  10,240  10,419  14,882  15,393  .. 
- wood briquettes  380 335 190 66 .. 
- wood pellets  .. .. 1,735  17,012  .. 
.. Not available.  
Source:  Statistical Office of Montenegro. Viewed at: 
http://www.monstat.org/cg/page.php?id=643&pageid=39  and Energy Balance for 2016.  
4.3.2.2   Institutional and legislative framework  
4.63.   The Ministry of Economy , with its three Directorates, for Energy, En ergy Efficiency and 
Mining and Geological Research, is the policy -making body for the energy sector. It prepares the 
national energy policy and the annual and long -term energy balance , and puts it to the 
Government for approval.41 Various other ministries h ave energy -related responsibilities.42 
4.64.   The Energy Regulatory Agency (ERA) is responsible for policy implementation in the energy 
sector in the areas of electricity, oil, gas and petroleum. The Agency was established in 2004 as an 
autonomous legal entity, based on the Energy Law (see below). It is autonomous in its exercise of 
its functions, which include the authority to: issue tariff methodologies, fix tariffs upon the 
                                                
41 EU Screening Report Montenegro Chapter 15 – Energy, p. 15 . Viewed at: 
https://ec.europa.eu/neighbourhood -
enlargement/sites/near/files/pdf/montenegro/screening_reports/screening_ report_montenegro_ch_15.pdf  and 
EBRD online information . Viewed at: www.ebrd.com/documents/legal -reform/montenegro -energy -sector -
assessment -2010.pdf . 
42 The Ministries of Finance, Agriculture and Rural Development, Sustainable Development and Tourism, 
Health, as well as the Administration for Hydrocarbons, Energy Regulatory Agency, Water Administration, 
Forest Administration, Environmental Protection Agenc y, Ministry of Foreign Affairs and European Integration, 
Statistical Office of Montenegro, Institute for Hydrometeorology and Seismology, Institute for Geological 
Research and local governments, are stakeholders in the energy sector and have specific respo nsibilities within 
their respective fields of activity. Ministry of Economy, Energy Development Strategy of Montenegro by 2030 – 
Action Plan 2016 –2020, p. 27. Viewed at: http://www.oie -
res.me/uploads/Dokumenta%202016/Action_Plan_2016_ -_2020_ENG.pdf . WT/TPR/S/369 • Montenegro  
 
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  proposal of energy sector undertakings; set connection costs; issue licensing rules and licences43; 
hear and resolve customer co mplaints; and approve the grid code and market rules upon 
submissions from the market operator.44 The right to impose penalties rests with the competent 
court (the Administrative Court or the Basic Court) . The ERA is obliged to present a financial report 
annually , as well as a report on the situation in the energy sector of Montenegro to parliament.45  
4.65.   The Hydrocarbon Administration, as established by the Law on Exploration and Production of 
Hydrocarbons (OG Nos. 41/10, 40/11, 62/13), performs management and expert tasks in the 
fields of research and production. These  include, inter alia , assisting in the preparation of 
regulations and proposals to designate blocks for the exploration and production of hydrocarbons; 
various tasks relating to concession contrac ts; approving the research work programme and 
drilling work programme; various tasks related to drilling and the production and dismantling of 
plants; data collection on the exploration and production of hydrocarbons; and issuing approvals 
for the testing and production of hydrocarbons.  
4.66.   The main law s governing the sector are the Law on Energy (OG Nos. 5/16 and 51/17)  and 
the Law on Cross  Border Power Exchange (OG No. 42/16).46 The two laws  transpose the main 
provisions from the EU Third Energy Package. The L aw on Energy sets out the competencies of the 
bodies involved in policy making and regulation , and it has provisions on competition and 
unbundling, inspection and supervision, regulation of the electricity, petroleum and gas and coal 
subsectors, energy sup ply and security and penalties.  The 2017 amendments were made  to the 
Law on Energy in order to specify the powers of the ERA in the process of determining the 
regulated revenue of the transmission system operator and the electricity distribution system  
operator. Other key changes are intended to  secur e the independence of the electricity 
transmission operator and creat e the conditions for transmission system operators to obtain 
certification  by the ERA. According to the authorities, work will be continued to harmonize all 
decisions adopted through the Energy Community Treaty; primarily EU Regulation 347/2013 , 
which will involve amendments to the Law on Cross Border Power Exchange of Electricity and Gas.   
4.67.   In July 2014, the Government approved a new Energy St rategy until 2030,  with the focus 
on exporting electricity. The cornerstones of the Strategy are the construction of three  large new 
energy generation facilities – i) The Pljevlja II coal power plant  (220-250 MW) ; ii) Moraca ; and 
iii) Komarnica hydropower plants  (238 MW and 168 MW respectively).  
4.3.2.3   Energy strategies and policy actions required by the accession to the E uropean 
Union 
4.68.   As a candidate country for membership of the E uropean Union, Montenegro indicated that it 
would implement the acquis  regarding en ergy by accession.47 Subsequently, the accession 
negotiations on energy were opened in December 201548, when the EU Commission noted that 
Montenegro was moderately prepared in this area and that it was expected to adopt new 
                                                
43 As specified by the Law on Energy ( OG Nos. 5/16 and 51/17), the ERA, i) grants licences to conduct 
energy activities, ii) issues guarantees of origin for electricity  generated from renewable energy sources or 
high-efficient cogeneration, iii) designates the status of privileged generator of electricity from renewable 
energy sources, iv) approves or stipulates regulatory allowed revenue, prices and tariffs for energy 
undertakings, v) decides on appeals, vi) settles disputes, vii) acts within its competences and approves acts 
prepared by energy undertakings, and viii) supervises operations of energy undertakings. Online information 
viewed at: http://www.studiobranko.me/regagen/site_en/public/index.php/index/artikli?id=59 . The list of 
licensees is available at: 
http://www.regagen.co.me/cms/public/image/uploads/Naknade_za_izdavanje_licenci.pdf . 
44 EBRD online information. Viewed at: www.ebrd.com/documents/legal -reform/montenegro -energy -
sector -assessment -2010.pdf . 
45 Energy Community online information. Viewed at: https://www.e nergy -
community.org/implementation/Montenegro/REG.html . 
46 Law on Energy. Viewed at: http://www.gov.me/files/1069256659.pdf  (this does not include 
amendments from 2017) .  
47 Screening Report Montenegro Chapter 15  - Energy, p. 3.  Viewed at:  
https://ec.europa.eu/neighbourhood -enlargement/sites/near/files/pdf /montenegro/  
screening_reports/screening_report_montenegro_ch_15.pdf . 
48 EU online information. Viewed at: https://ec.europa.eu/neighbourhood -
enlargement/countries/detailed -country -information/montenegro_en . Montenegro's latest implementation 
updates are available at: https://www.energy -community.org/implementation/ Montenegro.html . WT/TPR/S/369 • Montenegro  
 
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  legislation to complete alignment with the third Energy Package49 and move to the implementation 
stage50; this has now been done (see above). In addition to unbundling of actors in the power 
sector, the Commission said that careful attention should be paid to the timely build -up of oil 
stock s, developing the means to implement energy efficiency requirements and developing the 
programme to align with nuclear safety acquis .51 
4.69.   Concerning hydrocarbons , Montenegro needed to develop concrete plans for acquis  
alignment as regards the requirement to hold oil stocks equivalent to 90 days of net imports ( or 
61 days of average daily inland consumption, whichever is higher) . Consequently, a legal 
framework including adoption of the Law on Strategic Oil Stocks is expected to be finalized  in the 
first quarter of 2018 .52 Montenegro has prepared  a Rulebook on the methodology for collection and 
systematization of data related to trade in oil products.  A study on the status of storage capacities 
will be undertaken once t he Rulebook has been adopted. It was estimated that , by 2030 , 
Montenegro would need around 130,000 m3 of oil, while the operational reserves would be around 
30,000 –40,000 m3.53 Even though the Montenegrin oil sector has at its disposal around 
205,000  m354, the tanks are currently used for commercial purposes only (operating stocks) , and 
therefore most of them need significant investment and maintenance.  Total estimated oil stocks 
costs (investment and procurement) are €149.6 mil lion.55 
4.70.   In the context of its ac cession process, work  is being undertaken, inter alia , to: strengthen 
the ERA; fully open the internal energy market; put in place effective safeguards , given that the 
State maintains majority shareholdings in various entities (see above); transpose the acquis 
relating to gas and partially implement provisions on the acquis  relating nuclear safety and 
radiation protection (even though Montenegro does not currently have a gas market or 
produce/use nuclear energy56); align its legislation with the Euratom Trea ty; sign and ratify key 
international conventions, and address radioactive waste disposal.  Montenegro is also harmonizing 
its laws and regulations with the EU legal framework on energy efficiency.   
                                                
49 In order to harmonize and liberalize the European Union's internal energy market, three consecutive 
legislative packages of measures were adopted between 1996 and 2009, addressing market access, 
transparency and regulation, consumer prot ection, supporting interconnection, and adequate levels of supply. 
The first liberalization directives (First Energy Package) were adopted in 1996 (electricity) and 1998 (gas), to 
be transposed into Member States' legal systems by 1998 (electricity) and 20 00 (gas). The Second Energy 
Package was adopted in 2003, with its directives to be transposed into national law by Member States by 2004, 
with some provisions entering into force only in 2007. Industrial and domestic consumers were now free to 
choose their  own gas and electricity suppliers from a wider range of competitors. In April 2009, a Third Energy 
Package, seeking to further liberalize the internal electricity and gas markets, was adopted, amending the 
Second Package and providing the cornerstone for the implementation of the internal energy market. European 
Parliament online information. Viewed at: 
http://www.europarl.europa.eu/atyourservice/en/displayF tu.html?ftuId=FTU_5.7.2.html . 
50 2015 Progress Report on Montenegro , p. 41. Viewed at: https://ec.europa.eu/neighbourhood -
enlargement/sites/near/files/pdf/key_documents/2015/20151110_report_montenegro.pdf . 
51 Screening Report Montenegro Chapter 15 - Energy, p. 15.  
52 One of the main purposes of the Law is to establish the Central Stockholding Entity to oversee the 
build-up, maintenance and reporting of emergency oil stocks. Screening Report Montenegro Chapter 15 - 
Energy, p. 15.  
53 Energy Development Strategy of Monten egro by 2030 , p. 31. Viewed at: http://www.energetska -
efikasnost.me/uploads/file/Doku menta/Strategija%20razvoja%20energetike%20CG%20do%202030.%20godi
ne%20 -%20Bijela%20knjiga_10072014.pdf . 
54 Of 205,000  m3 of total storage capacities, 129,000  m3 belongs to Jugopetrol, 55,000  m3 was used by 
Montenegro Bonus, and around 21,000  m3 is located at other gas stations. Montenegro Bonus is a limited 
liability company, established by the Government of Montenegro. The primary activity of Montenegro Bonus is 
storage and trading of oil derivatives.  
55 Energy Development Strategy of Montenegro  by 2030, p. 31.  
56 In January 2017 , the Ministry of Economy announced a public debate on  the G asification Master Plan, 
with a report on the strategic assessment of the environmental impact. The aim of the public debate was to 
inform all interested p arties on the current draft of the G asification Master Plan, which was approved during the 
10th session of the Western Balkans Investment Framework (WBIF) , and to remind that the WBIF has approved 
a grant of €550,000 to Montenegro for its preparation. The Master Plan was adopted by the Government in 
June 2017. Online information viewed at: https://serbia -energy.eu/montenegro -public -debate -gasification -
master -plan/ and https://serbia -energy.eu/montenegro -public -debate -gasification -master -plan/. WT/TPR/S/369 • Montenegro  
 
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  4.3.2.4   Electricity  
4.71.   Montenegro's electricity needs are currently almost satisfied by  its own production. The 
218.5 MW coal power plant at the town of Pljevlja accounts for 40% of electricity generation in the 
country. There are two large hydropower plants (HPP Piva with an installed capacity of 342  MW 
and HPP Perucica wi th 307  MW). Additionally, there are a number of small hydropower plants and 
a windfarm with an installed capacity of 72  MW. Until 2009, Montenegro imported significant 
amounts of electricity. However, since 2010, this deficit has dropped significantly due to the 
reduced consumption of the KAP aluminium plant and the Tos Celik steel mill which, at times, 
accounted for 40% of the country's energy consumption.  
4.72.   The Montenegrin Electricity Market Operator (COTEE) was established in July 2011 as a fully 
state-owned company.  Its responsibilities are set out in the Energy Law (Article 129) and  include, 
inter alia: organizing and managing the electricity market; record keeping; regulating rules and 
procedures on electricity purchase and sale; and defining and signin g standard contracts in various 
areas.   
4.73.   Electricity generation is dominated by  Elektroprivreda Crne Gore  (EPCG AD), which used to 
be a vertically integrated monopoly, carrying out generation, transmission, distribution and supply 
activities.57 The State retains a controlling share in this company, with the other major shareholder 
being the Italian company A2A .58 Zeta Energy DOO , an electric service company , was established 
in 2010 to generat e renewable energy. It is owned by EPCG AD (51%) and th e Norwegian energy 
utility company Nord -Trondelag Elektrisitetsverk Holding AS (49%).59 There are five other 
privately -owned electricity generating companies (four hydro and one wind). Producers of solar 
and wind energy are about to enter the electricity ge neration market.  
4.74.   The sole entity involved in the transmission of energy is the  Electric Transmission System of 
Montenegro (CGES AD)60, which, in 2009,  was unbundled from the EPCG AD to comply with the EU 
requirements for electricity market liberalization, a s well as taking into account a need for an 
increas e in economic efficiency . The State holds 55% of the company's shares, while the  strategic 
partner , Terna Rete Nazion ale S.p.a., holds 22.1%.61 CGES AD holds two licences: as the 
transmission system operator (TSO) and for the transmission of electricity.62  
4.75.   In 2016, the EPCG founded 'Crnogorski elektrodistributivni sistem Podgorica – CEDIS' , a 
company for the distribution of electricity within the  integral electric power system of Montenegro.  
This is the sole entity undertaking electricity distribution in the country.  CEDIS is an independent 
company owned by the EPCG.63 In May 2017, the EBRD approved a loan enabling CEDIS to buy 
another 60,000 smart  electricity meters , which  would elevate  installation levels to 85% of 
consumers by 2019. The investment will make Montenegro the first EBRD country of operations to 
meet the EU target of smart meter coverage for at least 80% of the population by 2020.64  
4.76.   From 1 January 2015, households acquired the right to choose their electricity supplier. At 
end-2017, one company was supplying electricity, the EPCG. Four additional companies 
                                                
57 Online information. Viewed at: www.ebrd.com/documents/legal -reform/montenegro -energy -sector -
assessment -2010.pdf . 
58 EPCG AD is 57% owned by the State, 41.7% by the Italian company A2A , and 1.2% by minority 
shareholders . EPCG online information . Viewed at: http://www.epcg.com/en/about -us/core -activity . 
59 Montenegro Agency for the Protection of Competition online information. Viewed at: 
http://www.azzk.me/1/doc/koncentracije/2010/EPCG%20Podgorica,%20NTE%20Montenegro%20AS%20Norve
ska-Zeta%20Energy%20DOO%20Danilovgrad.pdf . 
60 Additionally, the CGES provides wholesale services of operator approach, i.e. it leases optical fibres 
and other infrastructure to telecommunication operators. If there is an interest from their side , the CGES can 
provide services of signal transmission through the NGSDH network as well. Moreover, the CGES may begin to 
provide services to other entities , i.e. non -telecommunication operators.  
61 As of 31 December 2016, natural persons own ed 7.56% of the company's shares, joint venture funds 
owned 1 .63%, custody account s owned 12 .38%, and legal persons own ed 1.34%. CGES online  information. 
Viewed  at: http://www.cges.me/en/about/ownership -structure . 
62 Energy Development Strategy of Montenegro by 2030, p. 3.  
63 EPCG online information. Viewed at: http://www.epcg.com/en/media -center/meeting -
shareholders/crnogorski -elektrodistributivni -sistem -doo-cedis-has-been. 
64 EBRD online information. Viewed at: http://www.ebrd.com/news/2017/ebrd -finances -smart -
metering -breakthrough -in-monteneg ro.html . WT/TPR/S/369 • Montenegro  
 
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  (three  private and one state -owned (Montenegro Bonus) are licenced to supply but  are not 
undertaking this activity in practice.  
4.77.   In June 2017, the EPCG, the COTEE and the CGES signed an agreement on establishing 
Montenegro power exchange and the power exchange's statute.65 The Power Exchange Company 
was registered in August 2017, and the next step will be to choose a strategic partner for the Day 
Ahead Market.  Previously, at the Western Balkans summit in Vienna, held in August 2016, it was 
decided that the Western Balkans c ountries would establish a  regional energy market  through 
national energy exchanges, which will eventually be integrated into the Euro pean single market.66  
4.78.   Prices of electricity transmission and distribution are regulated.67 In order to determine 
revenue and prices for the use of the electricity transmission and distribution system, a hybrid 
regulatory methodology is used, which aims to l imit allowed revenue, to provide efficiency 
improvement incentives, and to allow risk -sharing between operators and users of the system. In 
Montenegro, tariffs do not differ by the type of subsector (residential, commercial, industry, etc.), 
but by voltage  levels. Preferential electricity prices are only in place for vulnerable customers, 
namely  households and small customers that do not belong to the household category  
(Section  3.3.3.2 ).68  
4.79.   The CGES AD, together with Terna, is currently laying undersea electricity transmission 
cable linking Montenegro to Italy.69 This undersea connection represents a  HVDC  link, and further 
connects Montenegro with Bosnia and Herzegovina , Serbia,  and Romania over the  400 kV Trans -
Balkan Electricity Corridor. The project is exp ected to be finalized by the end of 2018. It is 
anticipated that the link will improve the operational reliability of the transmission system of 
Montenegro, eliminate possible bottlenecks in the development of the coastal areas, and enable 
Montenegro to be come a significant power node in the region.  
4.3.2.5   Renewable energy  
4.80.   Although hydropower already provides two thirds of Montenegro's  total energy production, 
only 17% of the theoretical hydropower potential has been exploited so far. According to the 
Energy Strat egy, the theoretical potential of large -scale hydropower on Montenegro's main rivers 
amounts to 9,846 GWh, plus 800 -1,000 GWh/year on smaller rivers. Montenegro has a wind 
potential of 100 MW in high wind speed areas , with wind speeds above 7 m/s. The aver age annual 
number of sunshine hours in Montenegro is more than 2,000 hours, with coastal regions enjoying 
more than 2,500 hours of sunshine a year. The potential for solar energy in Podgorica is 
approximately 1,600 kWh/m².70 
4.81.   Electricity from renewable sourc es is supported through a feed -in tariff. The operators of 
plants that generate electricity from renewable energy sources can obtain the interim status of a 
privileged producer  or the status of a privileged producer . Every year in January, a new  unit fee for 
encouraging the production of energy from renewable sources is adopted. Every electricity 
customer pays a fee that will be used to encourage electricity generation from renewable sources 
in addition to the electricity price.  Under the Energy Law and the Tariff System Decree , the 
feed-in-tariff varies , depending on  the type of electricity produced in plants using renewable 
energy sources (€9.60/kWh for wind power plants; €13.71/kWh for power plants using solid 
                                                
65 The COTEE and the CGES hold two  thirds of the stake in the new company . Balkan Green Energy 
News. Viewed at: http://balkangreenenergynews.com/montenegro -gets-power -exchange -another -step-
towards -regional -market/ . 
66 The latest Summit, the 2017 Western Balkan 6 Summit, took place on 12 July  in Trieste, Italy, when 
the key  issues under the connectivity agenda, includ ing energy, were discussed. Energy Community online 
information. Viewed at: https://www.energy -community.org/news/Energy -Community -News/2017/07/13.html . 
67 Energy La w, Article 58.  
68 Serbia Energy online information. Viewed at: https://serbia -energy.eu/montenegro -electricity -price-
cut-4-7/. 
69 CGES and Seenews online information. Viewed at: http://www.cges.me/en/about  and 
https://seenews.com/news/terna -completes -laying -of-montenegro -italy-undersea -power -cable-558899 . 
70 Currently, there is no complete data available on how much solar energy (photovoltaic PV) is used on 
the territory of Montenegro but it is clear that it plays only a very minor role in the Montenegrin electricity 
production se ctor. The strategic objective and future strategy of Montenegro is more supportive to the 
development of solar thermal heating and cooling than utilization of solar energy for electricity production. PV 
is also not exploited in Montenegro because of high i nvestment costs.  WT/TPR/S/369 • Montenegro  
 
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  biomass from forestry and agricult ure; €12/kWh for power plants using solar energy on buildings 
and engineering constructions; €9/kWh for power plants using solid waste; €8/kWh for power 
plants using waste gas; and €15/kWh for power plants using biogas). Incentive prices for 
electricity ge nerated in small hydropower plants are determined depending on the net power 
output of the power plant, with incentive prices ranging from €6.8/kWh to €10.44/kWh. The 
COTEE, which is legally obliged to buy the electric energy from privileged producers, pay s the 
incentive for a period of 12 years, having concluded a formal agreement.  
4.82.   In May 2017, a wind power plant in Krnovo launched trial electricity production. Expected 
yearly generation of the company is 200 GWh.71 The wind park, whose construction began i n 
May 2016, is one of the largest facilities of that type in the region. The contract for this project 
was conclude d between the Government and the Akuo -Ivicom  consortium.  For the first 12 years, 
the price of the electricity generated by the wind farm is g uaranteed , and it will not be less than 
€95.99 per MW/h.72 Additionally, 34 contracts on concessions for the construction of Small Hydro 
Power Plants73 are being implemented , of which 12 have been completed .74  
4.3.2.6   Hydrocarbons and natural gas  
4.83.   Montenegro is totally dependent on imports of hydrocarbons – oil products and liquefied oil 
gas. All existing (LPG) oil and gas companies in Montenegro are private companies , except 
Montenegro Bonus, a state -owned company, which has a licence for wholesale  trading, transport 
and storage of oil and gas, and has been designated by the Government as the transmission 
system operator for gas. Montenegro does not have domestic refining capability. There are no 
restrictions on the import of oil and gas. The regula tory agency has issued 35 licences for the sale 
of petroleum. So far, Montenegro has signed two concessions for the offshore production of 
hydrocarbons. A first concession agreement was signed between Eni Montenegro BV, a Dutch 
company, and Novatek Montene gro, BV on 14 October 2016. A second agreement was concluded 
on 15 January 2017 with Energean Montenegro Limited, Cyprus. Both concessions envisage a 
research phase of seven years.  
4.84.   The Master Plan on Gasification was adopted by the Government in June 201775, following 
public debate in January 2017.  The European Union, through the WBIF , has approved a 
€2.5 million grant support package to Montenegro and Albania for the conceptual design of the 
Ionian -Adriatic Pipeline through Montenegro and Albania.76 The term s of reference for the technical 
assistance required for the development of the preliminary design of the Pipeline – Montenegro 
and Albania sections - has been adopted and the selected consultant has commenced work.  
4.4  Services  
4.85.   Montenegro has undertaken GATS commitments in all of the 12 sector groups listed in the 
Services Sectoral Classification List, and in over 80% of its subsectors.77 Uncommitted sectors 
include audio -visual services; social services; libraries, archives, museums and other cultural 
services ; internal waterways transport; space transport; and rail transport of passengers.  
4.86.   Horizontal limitations in its schedule of specific commitments under the GATS relate to 
public utilities, limitations on branches, agencies and representative offices, and s ubsidies. 
                                                
71 Online information. Viewed at: http://www.bankar.me/2017/07/24/pocelo -testiranje -vjetrenjaca -na-
krnovu/ . 
72 Montenegro concluded a contract on the lease of the public land in August 2010 for a period of 
20 years, with a possibility of an extension for up to a maximum of five years. Balkan Green Energy News 
online information.  Viewed at: http://balkangreenenergynews.com/krnovo -wind-park-started -trial-electricity -
production/ . 
73 In accordance with the law on energy power plants with installed capacity of up to 10 MW.  
74 MEK online information. Viewed at : http://www.mek.gov.me/pretraga/170232/KLJUcNE -
INVESTICIJE -U-CRNOJ -GORI.html . 
75 Serbia Energy online information. Viewed at: https://serbia -energy.eu/montenegro -public -debate -
gasification -master -plan/. 
76 MZD online information. Viewed at: http://www.mzd.gov.me/en/search/169720/Minister -Sekuli -
Southern -Gas-Corridor -is-of-strategic -importance -for-future -energy -security -of-EU.html . 
77 WTO document MTN.GNS/W/120, 10 July 1991.  WT/TPR/S/369 • Montenegro  
 
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  Regarding mode 4, it has taken commitments on intra -corporate transferees, business visitors, 
and contractual service suppliers.78 
4.87.   In most cases, Montenegro's schedule of specific commitments does not contain any 
sector -specific limitations on mar ket access or national treatment under any of the four modes of 
supply.79 Montenegro has taken partial commitments for legal services80 and services incidental to 
agriculture, hunting and forestry, fishing, and energy distribution.81  
4.88.   Moreover, Montenegro has undertaken a number of "additional commitments" in its 
schedule. Under communication services, it incorporated the obligations of the reference paper on 
regulatory principles for basic telecommunications. It also undertook addition al commitments in 
the form of a reference paper on postal and courier services, relating to such aspects as the 
prevention of anti -competitive practices, universal service and the independence of the regulatory 
body.  
4.89.   For maritime transport services, an ad ditional commitment guarantees the supply of various 
port services on reasonable and non -discriminatory terms and conditions to suppliers of 
international maritime transport services.82 Montenegro has also undertaken additional 
commitments with respect to p ipeline transport services. While market access and national 
treatment are "unbound" in modes 1 through 3, it undertakes to provide full transparency in the 
formulation, adoption and application of measures affecting access to, and trade in, services of 
pipeline transportation. It also undertakes to adhere to the principles of non -discriminatory 
treatment in access to, and use of, pipeline networks under its jurisdiction.  
4.90.   MFN exemptions have been taken for legal services; audio visual services; road transpo rt 
services; and selling, marketing and computer reservations systems of air transport services. 
Additionally, an MFN exemption for all sectors has been listed for measures based on bilateral 
agreements providing for the movement of all categories of natur al persons supplying services.83 
4.91.   Montenegro also has services commitments in its RTAs with the European Union (the 
EU-Montenegro Stabilisation and Association Agreement) and the Ukraine. The services 
commitments contained in these agreements are described i n detail in the WTO Committee on 
Regional Trade Agreements' factual presentations for these RTAs.84 
4.4.1   Financial  services  
4.92.   In 2016, financial and insurance activities contributed 5.3% to GDP , and accounted for 
2.5% of employment  (Table 1.2 ). The financial system is dominated by banks. As noted by the 
                                                
78 Commitments on contractual service suppliers are limited to a list of services sectors specified in the 
horizontal section.  
79 Exceptions relate to: (a) services provided by midwives, nurses, physiotherapists and para -medical 
personnel; (b) building clea ning services; (c) photographic services; (d) packaging services; (e) certain courier 
services; (f) general construction work for buildings; (g) primary education services; (h) certain environmental 
services; (i) certain insurance services; (j) asset manag ement, such as cash or portfolio management, all 
forms of collective investment management, pension fund management, custodial, depository and trust 
services; (k) settlement and clearing services for financial assets, securities, derivative products, and o ther 
negotiable instruments; (l) hospital and other human health services; (m) cinema theatre operation services; 
and (n) certain transport services.  
80 For legal services, Montenegro has taken commitments on consultancy on foreign, international law 
and domestic law.  
81 Commitments on services incidental to agriculture, hunting and forestry; services incidental to 
fishing; and services incidental to energ y distribution cover advisory and consulting services.  
82 These services are: pilotage; towing and tug assistance; provisioning, fuelling and watering; garbage 
collecting and ballast waste disposal; port captain's services; navigation aids; shore -based oper ational services 
essential to ship operations, including communications, and water and electrical supplies; emergency repair 
facilities; and anchorage, berth and berthing services.  
83 WTO documents WT/ACC/CGR/38/Add.2 and WT/MIN(11)/7/Add.2, 5 December 2011 . 
84 CRTA Factual Presentation – Free Trade Agreement between the European Union and Montenegro 
(Goods and Services) – WTO document WT/REG236/1, 15 April 2011, and CRTA Factual Presentation – Free 
Trade Agreement between Ukraine and Montenegro (Goods and Se rvices) – WTO document 
WT/REG338/1/Rev.1, 2 July 2014.  WT/TPR/S/369 • Montenegro  
 
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  IMF, while the nascent stock exchange's market capitalization is significant, turnover is very low 
and the bond market is thin.85 
4.93.   There is no national strategy for the development of the financi al services sector per se . 
However, Montenegrin financial regulators actively participate in the preparation and 
implementation of the Government's strategic document for EU accession (the Montenegro 
Accession Programme). This  includes, inter alia , plans f or the harmonization of national legislation 
with the EU acquis , including the financial services sector. In the insurance sector, the regulatory 
authority (the Insurance Supervision Authority of Montenegro) prepares annual plans which are 
submitted to Par liament for its consent which, inter alia , define strategic goals for the year.  
4.94.   There are no incentive schemes specifically designed to attract financial services companies 
to Montenegro. There are no taxes applied to banking services. Under the Law on Tax es on 
Insurance Premiums (OG No. 27/04 as amended86), a tax of 9% applies to all types of non -life 
insurance, except for: accident insurance, voluntary health insurance and agriculture insurance.  
4.4.1.1   Banking  
4.95.   As at November 2017, there were 15  banks operating i n Montenegro. Total assets of banks 
reached €3,790 million by end -December 2016.87 As noted by the IMF, banks account for around 
90% of the financial system's assets – equivalent to about 100% of GDP. Foreign subsidiaries hold 
over three quarters of the sec tor's assets.88 As at Q3 2017, the three largest banks (in terms of 
assets) accounted for 38.5% of total banking assets and 39.74% of total deposits. The five largest 
banks combined had a market share of 62.1% and accounted for 61.4% of total deposits.  
4.96.   In total, four new banks have been newly licensed since end -2012. Two of these have 
majority domestic private ownership, the other two have majority foreign ownership. As at 
end-September 2017, the State's share in the banking sector amounted to 2.19%. The Sta te does 
not own, or have shares in, any bank directly. However, certain majority state -owned companies 
do own shares in some banks operating in the Montenegrin market. There has not been any 
privatization activity in this area since 2012.  
4.97.   The Central Bank of Montenegro is, inter alia , responsible for financial stability and the 
banking system functioning,  and for issuing regulations and adopting measures in this area 
(Section 1). Under the Central Bank of Montenegro Law it is, inter alia , charged with  supervising 
banks and financial institutions; issuing bank/financial institution licences; imposing measures 
(including fines) and other obligations on banks/financial institutions; and carrying out bankruptcy 
and liquidation proceedings against them when required. It also prescribes bank reserve 
requirements.89 In 2014, the Central Bank was vested with the responsibility to oversee consumer 
credit90, and, in 2017, under the law on financial leasing, factoring, purchase of claims, microcredit 
and credit -guara ntee activities (see below), its supervisory responsibilities were extended to cover 
financial leasing, factoring and purchase of receivables activities.  
4.98.   The main laws governing the banking sector are the Central Bank of Montenegro Law 
(040/10, 046/10 and 006/13); the Banking Law (017/08, 044/10 and 040/11); the Law on 
Bankruptcy and Liquidation (047/01, 062/08 and 044/10); and the Law on Prevention of Money 
Laundering and Terrorist Financing (33/14).  
4.99.   Chapter 9 on Financial Services under the EU accession process was opened in 2014, and 
Montenegro has been working to harmonize its legislation with Directive 2014/59EU establishing a 
regulatory framework for the recovery and resolution of credit institutions and investment firms. 
                                                
85 IMF 2017 Article IV Consultation for Montenegro. Viewed at: http://www.imf.org/en/Publications/CR/  
Issues/2017/09/14/Montenegro -2017-Article -IV-Consultation -Press -Release -Staff-Report -and-Statement -by-
the-45244 . 
86 Amendments are: OG Nos. 37/04, 73/10, 40/11, 61/13 and 06/14.  
87 Central Ban k of Montenegro Annual Report 2016.  
88 IMF 2017 Article IV Consultation for Montenegro. Viewed at: http://www.imf.org/en/Publications/CR/  
Issues/2017/09/14/Montenegro -2017-Article -IV-Consultation -Press -Release -Staff-Report -and-Statement -by-
the-45244 . 
89 Central Bank of Montenegro Law. Viewed at: http://www.cb -
cg.org/eng/slike_i_fajlovi/fajlovi/fajlovi_brzi_linkovi/propisi/laws/cbcg_law.pdf  (Articles 14, 18 and 28 -30). 
90 This authority was granted to the Central Bank by the Consumer Credi t Law (OG No. 35/13).  WT/TPR/S/369 • Montenegro  
 
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  This is being done through a package of legal regulations. This package consists of a Bank 
Resolution Law (which contains provisions related to initiation of the resolution process, resolution 
planning, resolution procedures, measures and instruments, a Resolution Fund, etc.). It also  
consists of amendments to the Law on Banks, which will transpose the Directive's articles 
regulating measures under the competence of the supervisory authorities of banks (including bank 
recovery planning, provisions regarding intra group financial suppor t and supervisory measures of 
early intervention). As at end -2017, both of these laws were in the final phase of adoption by the 
Parliament. Additionally, the work on a new regulatory framework foresees full harmonization with 
Basel III (Montenegro's exist ing framework is fully aligned with Basel II). This harmonization is 
planned to be undertaken through the development of a new Law on Banks and its accompanying 
bylaws, within the framework of the European Commission Twinning Project.  
4.100.   A law on financial le asing, factoring, purchase of claims, microcredit and credit -guarantee 
activities was adopted by the Parliament of Montenegro in October 2017. It will enter into force in 
April 2018. In addition to financial services that are already regulated by the exist ing regulatory 
framework (microcredit and credit guarantee activities), this law regulates other financial services 
(leasing, factoring and purchase of receivables), as well as the establishment, operation and 
control of the business companies providing th ese financial services. It draws upon some existing 
provisions in the Law on Banks. As noted by the authorities, the regulation and supervision of 
these financial institutions will: create the conditions for the further development of this segment 
of finan cial services; provide for a more comprehensive database on the operations of financial 
services providers which will be used for statistical and other purposes; improve the Credit 
Registry maintained by the Central Bank; and improve consumer protection. A mendments have 
also been made to the Law on Consensual Financial Restructuring of Debts to Financial Institutions 
(see below).  
4.101.   The Law on Banks governs the foundation, management operations and supervision of 
banks, micro -credit financial institutions and credit unions, and governs the conditions and 
supervision of the operations of actors involved in credit and guarantee operations.91 Under the 
law, all banks, foreign and domestic, must be licenced by the Central Bank, and they must be 
established as a join t stock company with a minimum founding capital of €5,000,000. Banks may 
be owned by domestic/foreign companies and/or persons, and all banks, regardless of capital, are 
treated equally under legislation and regulations. Central Bank approval is required f or changes 
relating to the acquisition/increase of qualified participation in a bank; bank amalgamations, 
mergers and de -mergers. Foreign persons may be members of a bank's board of directors and 
elected as executive directors; however, at least one execut ive director of the bank must speak 
Montenegrin. Banking services (and non -banking financial services) in Montenegro may only be 
provided by banks established in Montenegro.  
4.102.   Representative offices of a foreign bank may be established with the approval of t he 
Central Bank; these may only present the interests of the bank and not perform bank operations.  
4.103.   A bank deposit insurance scheme, run by the Deposit Protection Fund, is in operation in 
the country and covers all types of banks. Banks are required to pay  a deposit protection premium 
and, in the event of a bank bankruptcy, the Fund guarantees the reimbursement of up to 
€50,000  per depositor.92 
4.104.   As reported by the IMF, conditions in the banking sector continue to strengthen, with high 
levels of liquidity, cap ital ratios which exceed regulatory minima, improving asset quality and 
recovering credit growth. However, the sector appears to be over -banked, with one bank per 
40,000  residents, and this presents a challenge for profitability93; in this regard, the IMF h as 
indicated that it sees merit in possible efforts to promote consolidation. Non -performing loans 
(NPLs) have continued to decline but remain high (7.1% of total loans at end -October 2017, less 
than one third of their earlier peak ).94 Measures already take n over the review period to tackle 
                                                
91 The Banking Law. Viewed at http://www.cb -
cg.org/eng/slike_i_fajlovi/fajlovi/fajlovi_brzi_linkovi/propisi/law s/banking_law_4410_con.pdf  (Article 1).  
92 Deposit Protection Fund online information. Viewed at: www.fzdcg.org . 
93 As reported by the IMF (2017 Article IV Consultation), return on equity was 2% at end -2016 (0.3% 
on asset s), but these figures improved in 2017.  
94 IMF 2017 Article IV Consultation for Montenegro. Viewed at: 
http://www.imf.org/en/Publications/CR/Issues/2017/09/14/Montenegro -2017-Article -IV-Consultat ion-Press -
Release -Staff-Report -and-Statement -by-the-45244  and information provided by the authorities.  WT/TPR/S/369 • Montenegro  
 
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  NPLs have included the adoption, in 2013, of a Decision Amending the Decision on Minimum 
Standards for Credit Risk Management in Banks (OG No. 51/13), which was again amended in 
2017 (OG No. 44/17). This obliges banks to apply special treatment to NPLs, which includes 
developing a comprehensive NPL strategy, establishing annual operating objectives for 
implementing the strategy, and quarterly reporting to the Central Bank on the implementation of 
these objectives. Addition ally, a voluntary debt resolution law (the Law on Consensual Financial 
Restructuring of Debts to Financial Institutions) was adopted in May 2015 and amended in 2017. 
Under the 2015 Law, financial restructuring of debt could be carried out for certain types  of loans; 
in order to encourage the application of these solutions, the Law provided certain tax incentives for 
creditors and debtors.95 Amendments, inter alia : extended the deadline for the application of the 
Law for another year; extended the scope of lo ans that can be subject to consensual financial 
restructuring; simplified the restructuring process; and gave additional tax relief to debtors with 
the aim of creating favourable conditions for the promotion of debt restructuring. By 
end-November  2017, €12 .6 million of loans had been restructured through implementation of the 
Law; and announcements have been made by banks that significant new restructuring processes 
will begin in the coming months . The IMF has recommended that Montenegro should seek further  
reductions in the stock of NPLs while strengthening the supervisory and regulatory frameworks. It 
has also suggested that an independent system -wide asset quality review would aid in the early 
identification of risks and strengthen the system.96  
4.105.   Following  a long period of credit contraction, bank lending has picked up97, but has not 
fully responded to a rebound in economic growth and conditions of high liquidity. According to the 
IMF, banks remain risk averse, and have cited problems in securing and selling  collateral, limited 
lending opportunities, and weak accounting and reporting practices that make it difficult to assess 
credit worthiness.98 In order to encourage credit growth, the CBCG issued recommendations to 
banks with the aim of reducing lending rate s and to provide more accessible funding to customers. 
Total loans at the end of the third quarter amounted to €2,594 million, representing an increase of 
8.5% on an annual basis. At end of the third quarter of 2017, the average weighted effective 
interest  rate on total loans reported by banks to the Credit Registry amounted to 6.98%. At the 
end of the third quarter of 2016, this rate amounted to 7.72%, which represents a decrease of 
0.74 percentage points. The interest margin at the end of the third quarte r of 2017 amounted to 
4.35%, representing a decrease of 0.4 percentage points on an annual basis. The interest spread 
has fluctuated between a high of 5.1% and a low of 4.3%, whereas the difference between deposit 
and lending interest rates ranged between 7.6% and 6.2% ( Chart 4.2 ). The main depositor groups 
are households (51.2% at Q3 -2017) and corporates (34.9%). The main beneficiaries of loans are 
the corporate sector (34.6% of total loans at Q3 2017); the household sector (40.7%) and 
non-resident banks ( 15.8%).  
4.4.1.2   Micro -credit institutions and credit unions  
4.106.   As at November 2017, there were six micro -finance institutions (MFIs); and  no credit 
unions operating in Montenegro. The total asset size of MFIs is less than 2% of GDP.99 The State 
does not own, either f ully or partially, any MFIs.  
4.107.   The Law on Banks sets out conditions for the establishment of micro -credit institutions and 
credit unions. Micro -credit financial institutions must be established as either a joint -stock or a 
limited liability company, with ini tial capital of €100,000. Their operations are limited to: granting 
                                                
95 Under the 2015 Law, financial restructuring of debt could be carried out only for loans classified under 
the categories "B" and "C" with banks, as well  as loans with domestic MFIs and leasing companies, provided 
that they are not in arrears for more than 270 days; exceptions are loans under these categories which were 
sold and repurchased by banks.  
96 IMF 2017 Article IV Consultation for Montenegro. Viewe d at: 
http://www.imf.org/en/Publications/CR/Issues/2017/09/14/Montenegro -2017-Article -IV-Consultation -Press -
Release -Staff-Report -and-Statement -by-the-45244 . 
97 As noted by the IMF (2017), credit growth has been positive since 2015: 6% in 2016, and projected 
at 8% in 2017.  
98 IMF (2016) , Staff Report for the 2015 Article IV Consultation , February , p. 5. Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2016/12/31/Montenegro -2015-Article -IV-Consultation -Press -
Release -Staff-Report -and-Statement -by-the-43772 . These issues were echoed  in the context of the 2017 
Article IV Consultation.  
99 IMF 2017 Article IV Consultation for Montenegro. Viewed at: 
http://www.imf.org/en/Publications/CR/Issues/2017/09/14/Montenegro -2017-Article -IV-Consultation -Press -
Release -Staff-Report -and-Statement -by-the-45244 . WT/TPR/S/369 • Montenegro  
 
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  specific types of loans100; investing in short -term government securities or other high quality 
short-term instruments of the financial market; and offering financial leasing and consultancy  
services.101 Foreign investment is permitted in micro -credit financial institutions.  Credit unions may 
receive deposits from, and grant loans and other financial services (i.e. guarantees, inland 
payment operations, lease financing) to, their members. They must be founded by at least 
30 natural persons with working capacity or entrepreneurs linked through the same profession. 
The minimum founding capital is €10,000. They may invest funds in short -term government 
securities and other high -quality short -term i nstruments of the money market.  
Chart 4.2 Interest rate spread, January 2012 to September 2017  
(%) 
 
Note:  At the end of each quarter.  
Source:  Information provided by the authorities.  
4.4.1.3   Insurance  
4.108.   At end of Q2 2017, there were 11 companies providing insurance services in Montenegro; 
6 companies operated in the life insurance segment, and 5 in the non -life segment. Montenegro 
has no reinsurance companies established in the country. Analysis by the In surance Supervision 
Agency of Montenegro (ISA) has indicated a reduction in market concentration in the insurance 
sector since 2008. Total share capital of Montenegro's insurance companies at end -June 2017 
amounted to €39,985 million (83.23% of which was f oreign capital). In the same year, the share 
of life insurance gross written premiums amounted to 0.39% of GDP; for non -life insurance it was 
1.97%. The State has no equity share in any insurance company.  
4.109.   The main laws governing the insurance sector are t he Insurance Law; the Law on 
Liquidation and Bankruptcy of Insurance Companies; and the Law on Compulsory Transportation 
Insurance.102 The legislative framework was amended during the period 2015 -16, through the 
adoption of the new Law on Liquidation and Ban kruptcy of Insurance Companies and amendments 
                                                
100 They may grant loans for specified purposes for development projects to business organizations, for 
business improvement to entrepreneurs and specified purpose loans to natural persons, from their own funds 
and from the funds bor rowed from the money market.  
101 The Banking Law, Article 153.  
102 The Insurance Law (78/06, 019/07, 053/09, 073/10, 040/11, 045/12, 006/13 and 055/16) ; the 
Liquidation and Bankruptcy of Insurance  Companies (11/07) and the Law on Compulsory Transportation 
Insurance (44/12) were viewed at: http://www.ano.me/en/index.php/component/phocadownload/category/7 -
laws. According to the authorities, the Law on Liquidation and Bankruptcy  of Insurance Companies  and the Law 
on Compulsory Transportation Insurance are aligned with the relevant parts of the EU acquis . 
0.0%1.0%2.0%3.0%4.0%5.0%6.0%7.0%8.0%9.0%10.0%Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3
2012 2013 2014 2015 2016 2017
Deposit rate Lending rate Interest spread Difference between deposit and lending ratesChart 4. [MNE]   Interest rate spread, January 2012 to September 2017
Source:     Information provided by the authorities.Note:        At the end of each quarter.WT/TPR/S/369 • Montenegro  
 
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  to the Insurance Law. Key changes introduced by amendments to the Insurance Law in 2016 
comprised: provisions regarding qualified holdings in insurance, including the obligation of 
previous information when acq uiring a qualified holding in a foreign financial institution (with 
deferred application until EU accession); outsourcing provisions, based on the Solvency II regime; 
new provisions on protection of confidentiality, including data protection in insurance c ompanies as 
well as at the level of regulator, where the confidentiality obligation is prolonged indefinitely; 
abolition of the restriction regarding disposal of insurer's capital (deposit and investment of assets 
is now fully at the owner's discretion); a nd clarification of conditions for internal auditors and 
extension of the deadline for acquiring the title of certified actuary. Further legislative reform is 
expected in order to comply with the EU acquis . 
4.110.   The ISA is responsible for the supervision and co ntrol of insurance companies and any 
other companies or persons providing activities within the insurance industry (insurance 
brokerage, insurance agency and ancillary insurance services). It, inter alia , supervises the 
conduct of insurance activities thro ugh the application of laws and regulations; adopts secondary 
legislation; issues licences for insurance and insurance -related activities; decides on appeals and 
complaints from policy holders; and undertakes monitoring and training activities.103 
4.111.   The Insura nce Law, inter alia , sets out procedures relating to licensing of insurance 
providers and other insurance -related services; licences stipulate the types of insurance that may 
be provided. Life insurance companies are prohibited from offering non -life insur ance, and vice 
versa104; a prohibition on cross -ownership is in place105; and persons acquiring a qualifying holding 
in a domestic insurance company or certain types of foreign financial institution106 must obtain 
prior consent for acquisition of these shares fr om the ISA.107 Obtaining prior consent for acquiring 
a qualified holding in certain types of foreign financial institution shall be mandatory for domestic 
insurance companies as of the day of accession to the European Union. Cross -border mergers are 
not allo wed. 
4.112.   Insurance  and reinsurance providers must be established either as a joint -stock company 
with a head office in Montenegro or as a branch of a foreign insurance company. Minimum capital 
requirements are either €2 million or €3 million for companies enga ged in non -life insurance 
activities108; and €3 million for companies engaged in life insurance activities and companies 
engaged in reinsurance business.  
4.113.   Foreign insurance companies may pursue insurance activities via a branch; half of the 
aforementioned mi nimum share capital must be deposited with a bank with a registered office in 
Montenegro, and half of the guaranteed capital must be available at its disposal in the territory of 
Montenegro (one quarter of the guaranteed capital must be deposited in a bank ).109 Applications 
by foreign insurance companies from non -WTO member states may be accepted or rejected on the 
basis of reciprocal access for Montenegrin insurance companies.110 A foreign -owned insurance 
company may also be established as a joint stock compan y within Montenegro; this has been the 
option chosen by a number of large insurance groups.111 There are no citizenship requirements 
attached to employment within insurance companies. However, the Executive Director and Board 
Members must have the level of c ompetence in the Montenegrin language needed in order to carry 
out their activities.  
                                                
103 ISA online information. Viewed at: http://www.ano.me/en/index.php/about -isa/the -scope -of-
jurisdiction . 
104 Insurance Law, Article 19.  
105 Under Article 22 of the Insurance Law, cross ownership of capital or voting rights in insurance 
companies, reinsurance companies, insurance brokerage compani es and insurance agency companies is 
prohibited.  
106 These types of foreign financial institution are: a foreign insurance company, a credit institution, an 
investment fund, or a management company of an open -end investment fund.  
107 Insurance Law.  
108 Minimum c apital requirements are: €2,000 ,000 for companies  engaged in non -life insurance 
activities (excluding classes of insurance referred to in Article 9 , paragrap h 1, items 10 to 15 of the Law) and  
€3,000,000 for compan ies engaged in non -life insurance activiti es (including classes of insurance referred to in 
Article 9 , paragraph 1, items 10 to 15 of the Law) . 
109 Insurance Law, Article 42a.  
110 Insurance Law, Article 43.  
111 As noted by the authorities, the large insurance groups, UNIQA, Generali, Grawe  and VIG, have 
chosen to establish as joint stock companies. The Triglav and Sava groups from Slovenia have invested in 
already -existing domestic companies, and eventually became single shareholders of those insurance 
companies.  WT/TPR/S/369 • Montenegro  
 
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  4.114.   Only insurance companies established under the law may insure property and persons in 
Montenegro, with the following exceptions, which may be insured by a foreign insuran ce company: 
aircraft and maritime transportation above compulsory traffic insurance; and foreign natural 
persons with permanent or temporary residence in Montenegro and property thereof, except for 
compulsory insurance (this includes insurance brokerage ac tivities, insurance agency activities and 
the provision of ancillary services for insurance). Insurance companies may be reinsured with 
domestic or foreign reinsurance companies.112  
4.115.   Transport accident insurance for passengers using public transport is compu lsory. 
Insurance taken by owners or users of motor vehicles, aircraft and vessels against liability for 
damages caused to third parties is also compulsory. Up until August 2017, the ISA approved 
insurance terms and conditions for these types of compulsory transport insurance, and published 
them in the Official Gazette . As of August 2017, all insurance companies selling compulsory 
transport insurance individually set conditions and tariffs, which are previously submitted to the 
ISA for checking as to whether  they are in line with the law and actuarial standards. Other than 
those in transport, there are various compulsory insurances in the Montenegrin legal system as 
defined by specific laws in different areas, such as: liability insurance in construction (des igners, 
construction engineers and supervisory bodies, revision bodies, etc.); compulsory insurance in 
tourism for hotel guests; and professional liability insurance for auditors, notaries, and 
intermediaries in insurance. There are also compulsory insuran ce requirements imposed by certain 
associations (i.e. for attorneys at law, physicians and court experts).  
4.116.   At the end of Q2 2017, the value of all insurance premiums amounted to €39.9 million, of 
which, non -life insurance premiums accounted for just over 8 3% of gross premiums, and life 
insurance, just under 17%. The main classes of insurance taken are motor vehicle liability 
insurance (42.66% of gross premiums), followed by life insurance (14.72%) and accident 
insurance (11.94%) ( Table 4.10 ).  
Table 4.10 Insurance premiums for the different categories and classes of insurance, 
Q2 2017  
Category  Class  Gross premium  
(€) % of gross 
premium  
Non-life Accident insurance  4,775,745  11.94  
 Health insurance  902,726  2.26 
 Motor vehicle insurance  3,008,702  7.52 
 Railway rolling stock insurance  11,539  0.03 
 Aircraft insurance  73,735  0.18 
 Vessel insurance  160,785  0.40 
 Goods in transit insurance  315,095  0.79 
 Insurance against fire and other threats to property  1,791,363  4.48 
 Other property insurance  3,537,337  8.85 
 Motor vehicle liability insurance  17,057,206  42.66  
 Aircraft liability insurance  174,585  0.44 
 Vessel liability insurance  110,408  0.28 
 General liability insurance  683,150  1.71 
 Credit  insurance  171,917  0.43 
 Suretyship insurance  10,512  0.03 
 Financial loss insurance  85,468  0.21 
 Legal expenses insurance  7,092  0.02 
 Assistance  insurance  485,688  1.21 
 Other classes of non -life insurance  36,329  0.09 
 Total non -life 33,399,382  83.53  
Life Life insurance  5,884,912  14.72  
 Annuity insurance  14,550  0.04 
 Supplemental insurance in addition to life insurance  683,153  1.71 
 Other classes of life insurance  3,100  0.01 
 Total life  6,585,714  16.47  
 Total non -life and life  39,985,096  100 
Note:  Data for 2017 is preliminary.  
Source:  ISA online information. Viewed at: 
http://www.ano.me/en/index.php/component/phocadownload/category/2 -?Itemid=69 . 
                                                
112 Insurance Law, Article 6.  WT/TPR/S/369 • Montenegro  
 
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  4.4.2   Teleco mmunications   
4.117.   In 2016, information and communications services' contribution to GDP was 4.7%, and the 
sector accounted for 2.8% of total employment (Table 1.2 ). Montenegro ranks 62nd out of 
175 economies in the ITU's 2016 ICT Development Index, moving up 1 1 places from 2012.113 The 
authorities attribute these improvements to measures taken to stimulate investment in the 
existing network infrastructure, and innovations in access technology which have encouraged the 
development of electronic communications netw orks.114 The telecommunications sector has 
witnessed an increasing take -up of fixed -broadband subscrip tions, while fixed -telephone  
subscriptions started to gradually decline  due to the affordability and convenience of mobile 
services . Mobile -telephone subscr iptions were steadily rising until 2014, with a modest decline of 
0.5% in 2015 (Table 4.11) . 
Table 4.11 Selected telecommunications indicators, 2012 -September 2017  
 2012  2013  2014  2015  2016  2017a 
Fixed -telephone subscriptions  169,803  169,032  164,671  154,448  150,160  147,365  
Fixed -telephone subscriptions 
per 100 inhabitants  27.34  27.20  26.49  24.85  24.22 23.77  
Mobile -cellular telephone 
subscriptions  990,869  993,902  1,013,296  1,007,890  1,020,768  1,140,709  
Mobile -cellular telephone 
subscriptions per 
100 inhabitants  159.54  159.95  163.03  162.16  165 184 
Fixed -broadband subscriptions  87,768  95,721  103,863  112,394  114,917  134,597  
Fixed -broadband subscriptions 
per 100 inhabitants  14.13  15.40  16.71  18.08  18.50  21.74  
a Figures as at September 2017.  
Source:  ITU online information. Viewed at: http://www.itu.int/en/ITU -D/Statistics/Pages/stat/default.aspx .  
4.118.   There are currently three  mobile service providers, with roughly a one -third market share 
each. In September 2017, out of the total number of 1, 140,709  users of mobile telephony in 
Montenegro, Telenor had a market share of 3 7.19%; Crnogorski  Telekom , 30.41 %; and M:Tel , 
32.40 %. The fixed line market is dominated by a single provider, Crnogorski  Telekom , which 
serviced 8 6.03% of the total 147,451  connections; M:Tel , 10.75 %; Telemach , 2.26%; and 
Telenor , 0.96% ( Chart 4.3 ). As noted by the authorities , there is little real competition in the field 
of fixed network infrastructure, except in very densely populated areas where the cable networks 
are already set up , or in the areas where the local authorities are active.115  
4.119.   In recent years, there have been p rice reductions for call terminations on both fixed and 
mobile networks:  prices of national calls terminating on the fixed network of the incumbent 
operator Crnogorski Telekom dropped from 6.1  euro cents/minute in 2005 to 0.80  euro 
cents/minute in December  2016.116 Similarly, the price of call termination on mobile networks fell 
from 10  euro cents/minute in 2007 to 1.06  euro cents/minute in January 2017. While prices for 
call termination on mobile networks are largely in line with the European average (which was 
1.04 euro cents/minute in July 2016), call termination prices are significantly above the European 
average for fixed lines (where the average price was 0.43  euro cents/minute at January 2016).117 
                                                
113 ITU ICT Development Index 2016 online information. Viewed at: http://www.itu.int/net4/ITU -
D/idi/2016/ ; and ITU (2013), Measuring the Information Society , p. 82 . Viewed at: http://www.itu.int/en/ITU -
D/Statistics/Documents/publications/mis2013/MIS2013_without_Annex_4.pdf . 
114 These measures stemmed from guidelines for improving the developme nt of electronic 
communications networks contained in the Strategy of Information Society Development 2012 -2016 – 
Montenegro Digital Society .  
115 Ministry for Information Society and Telecommunications (2016), Strategy for the Infor mation 
Society Development 2020, Podgorica, pp. 12 -13. Viewed at: http://www.mid.gov.me/en/library/strategije . 
116 The price of call termination on the fixed networks of Mtel, Telenor and Telemach i s 0.94  euro 
cents/minute  
117 This data was provided by the authorities; their source was the Digital Agenda Scoreboard 2011 – 
Electronic communications market indicators – May 2011; and the Body of European Regulators for Electronic 
Communications Report Bo R (16) 90 Termination Rates at European Level – January 2016 – May 2016 and 
BoR (16) 218 Termination Rates at European Level – July 2016.  WT/TPR/S/369 • Montenegro  
 
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  Chart 4.3 Market share for selected telecommunications services, September 2017  
 
Source:  Information provided by the authorities.  
4.120.   The telecommunications sector is 100% privately owned, with significant levels of foreign 
direct investment.118 
4.121.   Crnogorski Telekom remains  the main player  in the fixed telephony market, and the 
second largest in the mobile telephony market by number of users. Hrvatski Telekom, a Croatian 
company which is a member of the Deutsche Telekom Group119, owns 76.53% of its shares ; other 
companies , 11.57 %; and individuals , 11.9%.  Crnogorski Telekom provides a complete range of 
fixed and mobile telecommunications services (voice services, messaging, Internet, television , 
leased lines, data networks and ICT solutions) . 
4.122.   Telenor Montenegro has the larges t share of the mobile telephony market in Montenegro. 
It is a subsidiary of Telnor, a Norwegian mostly government -owned multinational 
telecommunications company. It is followed by M:Tel; 21% of its shares are owned by Telekom 
Serbia, and 49% by Serbian Tel ekom. Telemach , the fir st cable operator in Montenegro, was 
created in 2006 as Broadband Montenegro (BBM). In 2014, the company was acquired by the 
United Group, and was renamed Telemach Montenegro shortly thereafter.120  
4.123.   The assignation of radio -frequencies  is undertaken through a public tender process (either 
a sealed bid tender or auction), with procedures set out in the Law on Electronic Communications 
(Articles 106 -112). Over the review period, there have been three such tenders. In 2012, a public 
tender  through sealed bids generated revenues of €1.65 million; in 2016, a public tender through 
auction generated revenues of €50.65 million; and in 2017, a public tender through sealed bids 
raised €77,400.  
4.124.   Adopted in 2016, the Strategy for the Information Soci ety Development 2020 aims to 
encourage the growth of the ICT sector, through the realization of various strategic development 
priorities. These priorities include , inter alia:  increasing  broadband access  (fixed and mobile)  
availability  to certain target le vels by 2020 (Table 4.12) ; strengthen ing the capacities of the 
national Computer Incident Response Team  (CIRT) to protect , preven t and combat against 
Internet incidents ; helping to improve people's basic and advanced digital skills ; increasing the 
share of  ICT in GDP such that the share of e -commerce in total commerce reaches 1.5%; and 
                                                
118 Mobile telecommunications was one of the eight sectors where privatizations had been envisaged to 
be effected throug h the establishment of joint ventures. WTO document WT/ACC/CGR/38, WT/MIN(11)/7, 
5 December 2011, p. 7 and Export.gov online information. Viewed at: 
https://www.export.gov/arti cle?id=Montenegro -telecommunications . 
119 In 2017, Hrvatski Telekom purchased all of the shares in Crnogorski Telekom from Magyar Telekom 
(a Hungarian telecommunications company, also part of the Deutsche Telekom Group). Magyar Telekom had 
owned 76.53% of Cr nogorski Telekom a.d. shares since 2005.  Crnogorski Telekom online information. Viewed 
at: https://www.telekom.me/content/pdf/hrvatski -telekom -10012017 -2.pdf. 
120 United Group is a  Netherlands -based holding company controlled by the investment firm Kohlberg 
Kravis Roberts (KKR)  with headquarters in New York. Information provided by the authorities; TeleGeography 
online information. Viewed at: 
https://www.telegeography.com/products/commsupdate/articles/2014/09/10/united -group -linked -with-
eur23m -bid-for-sarajevo -based-mh-company/ ; and United Group online information. Viewed at: 
http://www.united.group/xhtml/about.php . 
Chart 4.[Montenegro]   Market share for selected telecommunications services, September 2017
Mobile telephony
Telekom
86.0%M: Tel
10.8%Telenor
1.0%Telemach
2.3%
ADLS 
42.7%
KDS
27.2%FTTx
23.4%WiFi 
4.3%WiMax 2.3%
Satelitski 
0.1%
Telekom
32.4%
Source:  Information provided by the authorities.M: Tel
30.4%Telenor
37.2%Type of internet connections Fixed telephonyWT/TPR/S/369 • Montenegro  
 
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  reaching targets in the areas of e -education, e -heath and e -government .121 With respect to 
meeting the aforementioned broadband targets, there has been progress, but there rema ins some 
way to go  (Table 4.1 2) 
Table 4.12 Broadband targets by 2020  
(%) 
 State of 
strategy in 
2016  Current 
state - 
2017  Target for 
2018  Target for 
2020  
Availability of  next generation  broadband access 
(% of households in the areas of availability of 
NGA (30Mbit/s))  26.5 38.04  60 100 
Penetration of broadband connections 
(households)  (share of households which use at 
least 2Mbit/s broadband)  53.3 64.12  80 100 
Availability of high speed  broadband connections  3.6 10.73  30 70 
Penetration of ultra -fast (100 Mbit/s) broadband 
connections (households)  0 0.01 20 50 
Source:  Information provided by the authorities.  
Institutional and legal framework  
4.125.   The Directorate for Electronic Communications and Postal Services within the Ministry of 
Economy is in charge of monitoring the implementation of the development policy, coordinating 
the activities that promote the development of electronic communications,  and the work with the 
competent state administration bodies, and the Agency for Electronic C ommunications and Postal 
Services  (EKIP) (see below) . It also coordinates and implements the Government's decisions 
relating to the terms of use of electronic comm unications, represents Montenegro in European and 
international organizations and institutions in the area of electronic communications, and 
participates in the work of administrative and working bodies of international organizations.122 
4.126.   The EKIP, created in  2001, is the independent national regulatory agency (NRA) for the 
telecommunications sector. The agency is , inter alia,  responsible for promoting competition and 
access to networks, issuing licen ces to operators, regulating interconnection rates and price s, and 
monitoring the quality of services.123 The Parliament is responsible for appointing the President 
and the members of the Council, and may dismiss them under certain limited circumstances, such 
as if there is a conviction for a criminal office, in the case of negligence or non -fulfilment of duties; 
the reasons for dismissal are subject to a special explanation, and the decision on dismissal must 
be published in the Official Gazette .124 The EKIP must coordinate with the Montenegrin Agency for 
the Protectio n of Competition in certain areas, for example, it must seek the Competition Agency's 
opinion before issuing a decision that an operator has significant market power (see below).125 
4.127.   With respect to competences on competition issues (see also Section 3.3.3.1 ), the former 
Administration for the Protection of Competition and the EKIP signed an Agreement on Cooperation 
in the field of ensuring competition and preventing the harmful effects of lack of competition in the 
market for electronic communications service s. The Agency for the Protection of Competition 
(Section 3.3.3.1 ), inter alia , issues opinions on the Draft Analysis of Relevant Markets, which are 
prepared by the EKIP.126 It may also perform an analysis of the state of competition in a particular 
                                                
121 Ministry for Information Society and Telecommunications (2016), Strategy for the Infor mation 
Society Development 2020, Podgorica , p. 13-14. Viewed at: http://www.mid.gov.me/en/library/strategije . 
122 Article 6 and 7 of the Law on Electronic Communications  (OG MN No. 56/11, 40/13 and 02/17). 
Viewed at: http://www.mek.gov.me/EN/WTO/LIBRARY/ts_actual_legislation/Communication_services .  
123 Export.gov online information. Viewed at: https://www.export.gov/article?id=Montenegro -
telecommunications ; ITU (2016), 2016 Montenegro profile and WT/ACC/CGR/38, WT/MIN(11)/7, 
5 December  2011, p. 88. 
124 Law on Electronic Communications, Articles 15 and 19.  
125 Law on Electronic Communications, Article 69(2).  
126 The legal basis for issuing these opinions by the Agency for Protection of Competition is Article 19 of 
the Law on Protection of Competition and Art icle 65 of the Law on Electronic Communications, which stipulates 
that the EKIP, in cooperation with the competition authority, determines, monitors, and reviews the relevant 
services and relevant geographic markets in Montenegro in the electronic communic ations services sector, and 
that, pursuant to Article 66 of the Law on Electronic Communications, the EKIP carries out the process of 
determining the relevant market in accordance with the regulations governing the protection of competition.  WT/TPR/S/369 • Montenegro  
 
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  branch of  the economy.127 As part of projects financed by the European Union, the Agency for the 
Protection of Competition, together with experts, prepared the Analysis of Prices of Mobile 
Operators Prepaid Packages in Montenegro (2014) and the Analysis of Retail Pri ces of Roaming 
Services in Montenegro (2014); these are not publicly available. In procedures conducted before 
the Agency for the Protection of Competition in the relevant markets for electronic 
communications, there is a high level of cooperation with the  EKIP in terms of providing opinions 
on the individual actions of participants in markets relevant to the Agency's responsibilities.  
4.128.   The Law on Electronic Communications of 2013, amended in 2017, regulates  the manner 
of management and use of electronic com munications networks, terms and manner of conducting 
the activities in the area of electronic communications , and other matters pertaining to electronic 
communications.128 The new Law (replacing legislation from 2008), aims to harmonize the 
European Union's legal and regulatory framework for electronic communications from 2009129; it 
strengthens the EKIP's independence from the executive branch130; it introduces changes to the 
actions the EKIP may take in relation to operators with significant market power (SMP) 
(see below); it sets out new obligations for universal services providers (see below); it introduces 
various measures to protect users; and it incorporates more severe penalties.131 The Law contains 
new provisions on the regulation of retail service prices; these prescribe that the Agency may, 
without a prior market analysis procedure, determine the maximum roaming prices for an operator 
of public electronic communication services, in accordance with the agreement on the reduction of 
roaming prices in public mobile communication networks, concluded between Montenegro and 
other countries. The maximum prices of services are established through an Agency regulation. 
There are also provisions referring to raising minimum broadband Internet; it may not be lower 
than 70% of maximum Internet access speed for operators of fixed electronic communications 
networks, and for the operators of mobile electronic communications networks, the conditions for 
offered broadband Internet speed should be specified. The Agency is no longer obliged to transfer 
any annual budget surpluses into the Montenegrin budget. The authorities indicated that they 
intend, in 2019, to transpose into domestic legislation Directive 2014/61/EU of the European 
Parliament and the Council on measures to r educe the cost of deploying high -speed electronic 
communications networks.  
Operators with significant market power  
4.129.   Under the 2013 Law on Electronic Communications and the Rulebook on Access and 
Interconnection , the EKIP may impose certain obligations on o perators deemed as having SMP. 
SMP operators, either individually or jointly with others, are deemed to enjoy a position of 
economic strength, with the power to behave, to an appreciable extent, independently of their 
                                                
127 Law on the P rotection of Competition, Article 40.  
128 OG No. 40/13 Viewed at: 
http://www.mek.gov.me/EN/WTO/LIBRARY/ts_actual_legislation/Communication_services  and OG No. 0 2/17. 
Viewed at: 
http://www.ekip2.me/download/regulativa/ENGZakon_izmjenama_i_dopunama_Zakona_o_elektronskim_kom
unikacijama.PDF . 
129 Presentation by the Ministry for Information Society and Telecommunications. Viewed at: 
http://www.cullen -international.com/asset/?location=/content/assets/training --
conferences/conferences/2013/10/mid ---new-law-on-electronic -communications.pdf/mid ---new-law-on-
electronic -communications.pd f. The EU acquis  transposed into the 2013 Law comprises: The Framework 
Directive (2002/21/EC); the Authorization Directive (2002/20/EC); the Access Directive (2002/19/EC); the 
Universal Service Directive (2002/22/EC); Directive on privacy and electronic co mmunications (2002/58/EC); 
Directive 2002/77/EC on competition in the market of electronic networks and services (Directive on privacy) ; 
the Decision on radio spectrum (67 6/2002/EC); the Directive on Data Retention (2006/24/EC); the Better 
Regulation Direc tive (2009/140/EC); the Directive on the Rights of Citizens (2009/136/EC); and the Regulation 
on BEREC (Regulation (EC) No. 1211/2009).  
130 The new Law passes the power to appoint and dismiss the EKIP Council from the executive to the 
Parliament; it enables the EKIP to enact by -laws; the Ministry of Information Society and Telecommunications 
(the Ministry) no longer supervises the EKIP; and the Law eliminates the ability of EKIP's decisions to be 
appealed to the Ministry (the EKIP's decisions are final, and s ubject only to judicial review by the 
Administrative Court) . 
131 Presentation by the Ministry for Information Society and Telecommunications. Viewed at: 
http://www.cullen -international.com/asset/?location=/content/assets/training --
conferences/conferences/2013/10/mid ---new-law-on-electronic -communications.pdf/mid ---new-law-on-
electronic -communications.pdf ; and Seelegal online information. Viewed at: 
http://www.seelegal.org/upload/documents/Serbia%20montenegro/2014/Telecom%20and%20Technology%2
0newsletter_Montenegro_September%202013.pdf . WT/TPR/S/369 • Montenegro  
 
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  competitors and users.132 The obligation s on SMPs remain largely the same as under previous 
legislation, and may include requirements to: maintain accounting records; disclose information on 
access and/or interconnection services; undertake separate accounting; publish reference offers 
for the p rovision of access and/or interconnection services; provide access and/or interconnection 
services under equal conditions; implement measures relating to access to network elements and 
their use; and take measures relating to cost recovery and price contro l of certain services that are 
provided for access and/or interconnection and cost accounting purposes.133 The EKIP may 
regulate retail price services by SMP operators if a market study by the EKIP determines that there 
is insufficient competition. Changes introduced by the 2013 Law include that the following: (a) the 
EKIP may no longer order an SMP operator t o provide a minimum set of leased lines; (b) the EKIP 
now has the power to order the functional separation of a vertically integrated SMP operator's 
wholesale access operation if other measures are insufficient to ensure effective competition (the 
prior op inion of the Government must be sought); and (c) any spin -off of local access network into 
a separate entity with a change of control or creation of a separate business unit for the supply of 
access services to retailers has to be notified 90 days in advan ce to the EKIP to enable it to assess 
the transaction's effects and decide on the future access regime.134 In all wholesale markets and in 
some retail markets in the fixed network, the operator with SMP is Crnogorski Telekom. On the 
wholesale termination cal l market in the individual network, MTEL has SMP (this status will also be 
designated to Telenor and Telemach). On wholesale markets in mobile networks (the call 
termination market in the individual mobile network and the market for access and call origina tion 
in mobile networks), Crnogorski Telekom, Telenor and Mtel have SMP.  
Access and interconnection  
4.130.   Rules on interconnection are contained in Articles 56 -58 of the Law on Electronic 
Communication s; they remain the same as under previous legislation. Opera tors are obliged to 
negotiate access to, and interconnection of, their networks when requested by another operator; 
they must respond to such requests within 15 days. The Law also contains transparency 
requirements, and set out the format and content of ac cess and interconnection contracts. Copies 
of access and interconnection contracts must be sent to the EKIP, which assesses the contract's 
compliance with the Law. In cases where an operator refuses the access and interconnection 
request of another operato r, or if no such negotiations take place within 45 days, an operator may 
request the EKIP to decide on the disputed issues. Prior to issuing any such decision, the EKIP 
must undertake public consultations . Following the EKIP's decision, operators must ente r into a 
contract within 15 days, and establish access and/or interconnection within 45 days.  More detailed 
rules on interconnection are set out in the Rulebook on Access and Interconnection.135 There have 
been no access/interconnection disputes since 2012.  
Number portability  
4.131.   Number portability was first introduced in 2011. T he Law on  Electronic Communications  
and the Rulebook on Number Portability prescribe the procedures for number portability. A number 
can be ported from fixed to fixed network, and from mo bile to mobile network.  The 2014 Rulebook 
sets a shorter time  limit for number porting than previously required: from a maximum of 
five working days, to a maximum of three . The EKIP has stipulated that the maximum fee that 
                                                
132 Law on Electronic Communications, Article 67. The criteria the EKIP may use for assessing significant 
market power are set out in Article 68 of the Law. They relate to: market share; barriers to entry; lack of 
potential competition; economies of scale and scope; technological advantages; sales and distribution network; 
level of vertical integration; level of prod uct diversification; access to capital; barriers to expansion; and 
connection of provided services.  
133 Agency for Electronic Communication and Postal Services (2015), Annual Report 2014 , Podgorica,  
April. Viewed at: http://www.ekip2.me/download/izvjestaji/oradu/GI%202014%20 -
%2017%2009%20ENG%20VERZIJA%2022%2009.pdf . As noted in the Annual Report, t he Agency  may request 
these measures if, based on a market analysis, it deems that an operator with SMP, due to lack of efficient 
competition or for the purpose of suppressing it, might keep either excessive prices or too small difference 
between wholesale and reta il prices, to the detriment of end -users. The EKIP must  take into account the  risks 
and investments, and ensure  an acceptable rate of return on investments of the operator.  
134 BDK press release No. 21/September 2013. Viewed at:  http://www.bdkadvokati.com/bdknowledge/  
newsletter/informatio n-communications -technol ogies-ict/159 -new-electronic -communications -law-aligns -
montenegrin -regulatory -framework -with-european -regulatory -framework . 
135 The Rulebook on Access and Interconnection from 2014 replaces the pre -existing Rulebook on 
Operator Access  to Interconnection. No new provisions have been added. The 2014 Rulebook is available in 
Montenegrin only at: http://www.ekip.me/download/Pravilnik%20o%20pristu%2 0i%20interkonekcijiV.pdf . WT/TPR/S/369 • Montenegro  
 
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  operators can charge to consumers  for number portability is €3.50. For the time being, operators 
have decided not to collect this fee. In the event that they do start collection, the donor operator 
should receive 80% of the fee while the recipient should receive 20%.  
Universal service obl igations  
4.132.   Universal service obligations are set out in Chapter VII of the Law on Electronic 
Communications. Under the Law, the EKIP may designate one or more operators to ensure 
universal service provision. This status is granted, following a public tender process, for a five -year 
period. New provisions, introduced in 2013, were that the universal service provider must be 
reimbursed for the costs of providing universal services by operators whose share in the total 
revenues generated in the electronic commun ications sector exceed 2%136; and that  the universal 
service provider must submit quarterly reports to the EKIP, and notify it 60 days in advance of its 
intention to spin off and change control of its access network; in this case, the EKIP can withdraw 
the o perator's status as universal service provider.137 Key new provisions introduced in the 2017 
amendment relate to the calculation of net costs of universal service operators; the appointment 
of a universal service operator in the event that designation of thi s responsibility is not fulfilled 
through a public tendering procedure; and a requirement for universal service operators to keep 
separate accounting records. Since 2015, Crnogorski Telekom has been the universal service 
operator for the entire territory o f Montenegro; previously, it was Telnor. It provides the following 
services: meeting each reasonable user request for connection to the public telepho ne network at 
a fixed location; handling all kinds of telephone calls,  data communication via telefax, and  data 
communication at speeds suitable  for functional Internet access;  as well as providing benefits for 
disabled people and low income  users.138 
4.4.3   Broadcasting and film production  
4.133.   The main laws governing broadcasting include: the Law on Media (OG Nos. 51/02 , 62/02, 
46/10, 73/10 and 40/11), the Electronic Media Law (OG Nos. 46/10, 40/11,  53/11 , 6/13 and 
55/16 ), and the Law on  National  Public Broadcast er Radio and Television  of Montenegro 
(OG Nos. 79/08,  45/12 , 6/13 and 55/16 ).139 According to the authorities, f oreign and domestic 
investors are treated equally under Montenegrin rules and regulations.  
4.134.   The Law on Media is a general law regulating basic principles of work and the operation of 
both print and broadcast media. It regulates the establishment and operat ion of public service 
broadcasters on local, regional and national levels. The Law on Electronic Media regulates the 
establishment and operation of all broadcast media (public, commercial and non -profit), as well as 
the establishment and operation of the i ndependent regulatory authority for audio -visual media 
services (the Agency for Electronic Media). The Law on National  Public Broadcast er Radio and 
Television regulates the work of the national public service broadcaster, Radio Television of 
Montenegro (RT CG), in terms of programme content, as well as management methods. It defines 
the RTCG's activities, responsibilities and accountability, funding, management bodies, as well as 
the RTCG statute. According to the Rulebook on the Conditions for Determining P rogram Contents 
Considered In -House Production (OG No. 11/12), the general television broadcaster is obliged to 
                                                
136 Under previous legislation, in the event that net costs from universal service obligations exceeded 
1% of revenue in the sector in that year, the Ministry was obliged to correct those requirements or provide for 
the payment of t he excess amount from the budget of Montenegro,  
137 BDK press release No. 21/September 2013. Viewed at:  
http://www.bdkadvokati.com/bdknowledge/newsletter/information -communications -technologies -ict/159 -new-
electronic -communications -law-aligns -montenegrin -regulatory -framework -with-european -regulatory -
framework . 
138 More detailed information on the conditions under which Crnogorski Telekom a.d . Podgorica  provides 
universal services  is available at EKIP online information. Viewed at:  
http://www.ekip.me/eng/uservice/operatori -e.php  and the Agency for Electronic Communications and Postal 
Services (2015), Annual Report 2014 , Podgorica , p. 89 . Viewed at: 
http://www.ekip2.me/download/izvjestaji/oradu/GI%202014%20 -
%2017%2009%20ENG%20VERZIJA%2022%2009.pdf . 
139 Government of Montenegro (2013), Presentation on Bilateral Screening Chapter 10: Presentation of 
Montenegro.  Brussels, 21 -22 January . Viewed at: https://www.eu.me/en/10/10 -documents  (slide 5 ) and EC 
(2013), Screening report Montenegro. Chapter 10 – Information society and media , May, p. 5. Viewed at: 
https://ec.europa.eu/neighbourhood -
enlargement/sites/near/files/pdf/montenegro/screening_reports/screening_report_montenegro_ch10 .pdf. WT/TPR/S/369 • Montenegro  
 
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  ensure that contents considered as in -house production represent at least 10% of its monthly air 
time.  
4.135.   As of 2017, apart from the national publ ic service broadcaster (with two television 
channels, two radio channels and one satellite channel), there are 18 television channels (3 local 
public service broadcasters and 15 commercial stations) and 52 radio stations (14 local public 
radio broadcasters , 36 commercial, and 2 non -profit radio broadcasters).  
4.136.   The Ministry of Culture of Montenegro is responsible for legislation in this area. The Agency 
for Electronic Media  (AEM)140, founded in 2003, is the regulatory body for audiovisual media  (AVM)  
services . It is functionally independent from any state authority and any legal or natural persons 
engaging in production and broadcasting of audiovisual media services . Since 2017, the AEM has 
no longer been required to transfer any budget surplus into the state b udget. Some concerns have 
been expressed about the AEM's independence being undermined by unclear divisions of rights 
and duties in the course of control hearings before Parliament.141 In this connection, the 
authorities noted that the AEM's as well as the P arliament's rights and obligations should be more 
clearly defined as regards usage of the parliamentary hearings to assess the role of the AEM in the 
overall media landscape. In this way, the AEM's independence could be better protected against 
undue inter ferences, notwithstanding its obligations related to accountability for, and transparency 
of, its operations.  
4.137.   The public service broadcaster , the RTCG, is in charge of production and broadcasting of 
radio and television program mes that meet democratic, soc ial, educational, cultural and other 
needs of public interest of all segments of Montenegrin society.142 The RTCG  Council  represents 
the public interest and is independent of any state authority or organi zation and persons involved 
in the production and broa dcasting of AVM Services. The RTCG is financed through contributions 
from the state budget ( 0.3% of GDP ), advertising revenues and other own revenues from sales of 
audiovisual works and sponsorship.143  
4.138.   The Broadcasting Center  Ltd. is the operator of electronic communications services 
registered with the Agency for Electronic Communications and Postal Services.144 It is 
100% -owned by the State.145 It is engaged in: transmission and broadcasting of radio and TV 
programmes for local and national public service broadcasting services, as well as most of the 
private television and radio broadcasting services; data transmission and maintenance of the 
entire transmission network in Montenegro; and renting electronic communications sites. I t is 
financed from its own revenues and revenues based on signal transmission and broadcasting 
programmes of the local and national public service broadcaster, which is provided from the 
budget of Montenegro or local municipalities.  
4.139.   The same rights and ob ligations apply to domestic and foreign legal and natural persons 
with respect to advertising, teleshopping and sponsorship, as stipulated in the 2011 Rulebook on 
                                                
140 The former name of the Agency for Electronic Media was the Agency for Broadcasting. Brkić, D. 
(2015), Making the Media dependent on the State. Monitoring EU Guidelines in Montenegro , p. 5. Viewed at: 
http://mediaobservatory.net/sites/default/files/Montenegro -
Making%20the%20media%20dependent%20on%20the%20state.pdf . 
141 EC (2016) , Commission Staff Working Document, Montenegro 2016 Report , Brussels, November. 
Viewed at: https://ec.europa.eu/neighbou rhood -
enlargement/sites/near/files/pdf/.key_documents/2016/20161109_report_montenegro.pdf .  
142 Brkić, D. (2015), Making the Media dependent on the State. Monitoring EU Guidelines in Montenegro, 
p. 10. Viewed at: http://mediaobservatory.net/sites/default/files/Montenegro -
Making%20the%20media%20dependent%20on%20the%20state.pdf . 
143 EC (2013), Screening report Montenegro. Chapter 10 – Information society and media , May, pp.  5-6. 
Viewed at: https://ec.europa.eu/neighbourhood -
enlargement/si tes/near/files/pdf/montenegro/screening_reports/screening_report_montenegro_ch10.pdf . 
144 The Broadcasting Cent er was established as part of the RTCG , under the name "Broadcasting 
Technology and Communications ". However, as of 1995 , it became part of the Pub lic Enterprise for Postal, 
Telegraph and Telephone Services of Montenegro (JP PTT Montenegro), and , in 2005 , the Broadcasting Cent er 
became an independent company.  Ružić, N. (2017), Public Service Broadcasting in Montenegro , Working Paper 
4/2017, p. 37, ANALITIKA Center for Social Research, Sarajevo. Viewed at: 
http://www.analitika.ba/sites/default/files/publikacije/psb_montenegro.pdf . 
145 Information provided by th e authorities.  WT/TPR/S/369 • Montenegro  
 
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  Audio -visual Commercial Communications (OG No. 36/11).146 Montenegro does not impose any 
restri ctions on foreign legal entities obtaining broadcasting licences, except for where the entities 
are registered in countries where it is not possible to determine the origin of the start -up 
capital.147  
4.140.   With respect to film production, the 2015 Law on Cinemat ography sets out the State's 
framework for the promotion and development of cinematography through the Film Centre of 
Montenegro. This Centre is a public institution which officially started operations in April 2017; it 
aims to create a stimulating environ ment for the Montenegrin film community and its promotion 
both regionally and globally. Its main activities are the management of the film fund (see below); 
support for new film productions; the promotion of Montenegrin cinema and its potential for 
interna tional productions; training programmes for film professionals directed towards raising the 
level of their professional skills; and a series of activities around film festivals and film literacy. The 
Centre is funded from two sources: the state budget, and  levies on companies which exploit 
cinematographic works.148 It offers incentives for both foreign and domestic producers intending to 
film in Montenegro. After the wrap -up of a feature film, documentary, animation, television film or 
television series, the producer has the possibility to get a cash rebate of the investment funds for 
the film/television project. The refund can cover up to 20% of eligible expenditures spent in 
Montenegro for the making of the film, and the rebate is granted after meeting certa in conditions. 
The procedure for reimbursement is initiated by a request for a refund, which the producer 
submits to the Centre no later than 30 days before the start of the recording of the 
cinematographic work in Montenegro. Funds are reimbursed by the F ilm Centre of Montenegro in 
accordance with provisions in the Law on Cinematography and the Decree on Incentives for 
Cinematographic Production in Montenegro. Funds for reimbursement are provided for in the 
budget of the state administration body responsib le for finance.  
4.4.4   Transport services  
4.141.   In 2016, transport and storage services contributed 4.9% to current GDP at basic prices, 
and accounted for 5.8% of employment ( Table 1.2 ). 
4.142.   The Ministry of Transport and Maritime Affairs (MTMA) has responsibility for trans port 
policy and implementation in Montenegro. It has directorates with respective responsibilities for: 
state roads; road traffic; railway traffic; air traffic; maritime traffic; and international cooperation 
and IPA funds.149 As in other areas, key legal an d regulatory developments over the review period 
are largely related to Montenegro's accession to the European Union; in this regard, the most 
recent European Commission screening report on Montenegro's progress in adhering to the acquis  
in area of transpo rt policy was in 2013. According to this update, Montenegro had reached a 
satisfactory level of alignment overall, but there is still work to be done in various areas.150  
4.143.   Montenegro's  Transport Development Strategy 2008 to 2018 sets out  the Government's 
vision for the sector and the framework for the adoption of strategic decisions. It is also hoped 
that this Strategy will help attract investment/financing from donors and through public private 
partnerships. The document touches upon certain key shortcomings , such as: the country's 
underdeveloped road network; improvements needed to modernize the rail infrastructure and 
rolling stock; the need for more efficient airport operations; and the low -capacity utilization of the 
                                                
146 Article 2 of the Rulebook on Audiovisual Commercial Communications. Viewed at: 
http://www.ardcg.org/en/index.php?option=com_docman&task=cat_ view&gid=44&Itemid=4 . 
147 Rulebook on the conditions and procedure for awarding broadcasting licences. Viewed at: 
http://www.ardcg.org/en/index.php?option=com_d ocman&task=cat_view&gid=44&Itemid=4 . 
148 The levies on different types of companies are as follows: public broadcasting service, 5% of annual 
marketing income; commercial national broadcasters, 0.8% of annual income; cable, satellite and Internet 
audio -visual services distributors, 2% of annual income; cinemas, 3% of every ticket sold (of which 1.5% goes 
to cinemas and 1.5% goes to distributors); public communication network operators, including operators which 
offer access to Internet, 0.9% of annual income for Internet services, distribution of television programmes 
and rental of cinematographic works; and video -on-demand providers, 3% of annual income.  
149 MTMA online information. Viewed at: http://www.msp .gov.me/en/organization . 
150 The Screening Report Montenegro on Chapter 14 – Transport Policy was viewed at: 
https://ec.europa.eu/neighbourhood -
enlargement/sites/near/files/pdf/montenegro/screening_reports/screening_report_montenegro_ch14.pdf . The 
acquis  under this Chapter covers: road transport; rail transport; inland waterways transport; combined 
transport; ai r transport; maritime transport; and satellite navigation.  WT/TPR/S/369 • Montenegro  
 
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  main commercial port (at Bar). The Str ategy's stated mission is to develop Montenegro's transport 
system to: provide safe and secure traffic; provide quality maintenance of the transport 
infrastructure; contribute to economic development; minimize harmful impacts to the 
environment; and be har monized and support the integration process of Montenegro into the 
European Union. For each of these elements, the Strategy lists specific activities to be undertaken; 
these, inter alia , include plans to accelerate the privatization of transport companies in the 
country.151 The improvement of Montenegro's transport infrastructure is also a key objective 
contained in the country's Tourism Development Strategy, in which emphasis is, inter alia , placed 
on improving accessibility through: improving cross -border r oadways; creating a more efficient 
highway system; and internal flights.152 In this connection, the authorities noted that the road and 
rail infrastructure has been, and is being, upgraded (see below), which is contributing to better 
regional connectivity an d traffic safety, and efforts are ongoing to harmonize regulations with the 
EU acquis  and to find optimal models to restructure transport companies with majority state 
ownership so as to increase the quality of transport services. Priority transport projec ts for the 
period 2017 -25 are included in the Single Project Pipeline adopted by the Government in 2015 
(and revised in 2017).153 A new transport strategy is being prepared which will cover the period up 
to 2035.  
4.4.4.1   Maritime Transport  
4.144.   In recent years, there has  been a decline in both the number of passengers travelling by 
ship and the volume of goods being transported by maritime transport ( Table 4.13 ). The 
authorities indicated that this could be attributed to a reduced number of weekly transport services 
betwe en Bar and Bari, and competition from goods and passenger services to Italy provided by 
Durres Port in Albania (most of the passengers travelling on this line were from Albania and 
Kosovo).  
Table 4.13 Transport of passengers and goods by maritime transport, 2010 -16 
 2010  2011  2012  2013  2014  2015  2016  
Goods  
(tonnes)  441,424  280,190  108,642  51,059  54,640  52,441  41,668  
Passengers 
(number)  68,856  69,436  53,259  43,097  42,489  39,198  35,925  
Source:  MONSTAT online information. Viewed at: http://www.monstat.org/eng/page.php?id=36&pageid=36 . 
4.145.   The MTMA's Maritime Safety Department has responsibility for various aspects of maritime 
safety and security. The Montenegro Port Authority operates within the competence of the MTMA, 
and has various responsibilities related to the country's ports of natio nal importance. These 
include: construction, maintenance, improvement, management and protection of ports; 
maintenance and use of the state -owned port superstructure not under concession; application of 
domestic legislation, international agreements and st andards that apply to the harbour; and 
various activities relating to concession agreements. The Port Authority is financed through the 
Montenegrin budget on the basis of concession fees and fees for the use of shore, boat and anchor 
stowage . Shipping form alities, inspections, vessel registrations and seafarers licences are dealt 
with by the Harbour Masters Offices in Bar and Kotor.154  
4.146.   The main laws governing the maritime transport sector are: the Law on Maritime and 
Inland Navigation, 19/78;  the Law on Safe ty of Maritime Navigation (62/2013) ; the Law of the 
Sea, 17/07 (40/11) ; and the Law on Ports, 51/08 (27/13).  
                                                
151 Transport Development Strategy 2008 to 2018. Viewed at: www.minsaob.gov.me . 
152 Montenegro Tourism Development Strategy. Viewed at: 
http://www.mek.gov.me/EN/WTO/LIBRARY/strategic_documents . 
153 The Single Project Pipeline contains 12 projects in the area of transport, with a total estimated cost 
of €3.39 billion. Priority is being given t o construction of: certain areas of the Adriatic -Ionian highway; the 
Matesevo -Andrijevica section of the Bar -Boljare highway; the border section of the Scepan Polje -Pluzine road; 
the modernization and reconstruction of Tivat airport; and the Vrbnica -Bar ra ilway line.  
154 European Commission Screening Report Montenegro, Chapter 14 – Transport Policy. Viewed at: 
https://ec.europa.eu/neighbourhood -
enlargement/sites/near/files/pdf/montenegro/screening_reports/screening_report_montenegro_ch14.pdf . WT/TPR/S/369 • Montenegro  
 
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  4.147.   The Law on Maritime and Inland Navigation contains provisions on the registration of 
ships. To be registered in Montenegro, ships must be: (a) ent irely owned by a legal entity with 
headquarters in Montenegro; (b) owned by a Montenegrin citizen with permanent residence in 
Montenegro; or (c) wholly or partly owned by a foreign person or a citizen of Montenegro residing 
abroad; and the operator of the ship must be a legal entity with headquarters in Montenegro, or a 
Montenegrin citizen resident in the country. Maritime ships must be registered in the register of 
merchant ships, the fishing vessels register or the register of public maritime ships. Ships  for 
inland navigation must be registered in either the register of ships for inland navigation or the 
register of public ships for inland navigation. There is a register of maritime ships under 
construction and an internal register of ships under construc tion for inland navigation. A ship 
registered in a foreign register cannot be entered in the Montenegrin register. A crew member on 
board under the Montenegrin flag must have a maritime book if he is a Montenegrin citizen or a 
permit for boarding if he is a foreign citizen. The shipmaster must be a Montenegrin citizen.  
4.148.   Under the Law of the Sea, the transportation of goods and passengers between domestic 
ports can only be performed by ships, yachts or boats flying the Montenegrin flag. In the context 
of this  Review, the authorities indicated that this provision is necessary to protect domestic boat 
owners from unfavourable situations; they also noted that there is already an excess of supply 
over demand.  
4.149.   As at end -December 2017, Montenegro's maritime fleet wa s comprised of 35 vessels, with 
a total gross tonnage of GT 99,920. Of these, 4 were bulk carriers.  
4.150.   The State owns and controls the shipping owner/ship management company "Crnogorska 
Plovidba" , which was established in  2004.155 It currently owns two vessels for the carriage of dry 
bulk cargo, which have been in operation since 2012; their combined total capacity is 70,000 DWT.  
The authorities confirmed that these vessels do not benefit from any special treatment.  The 
company's foundation act gives it the poss ibility to undertake services in a variety of areas, 
including domestic and foreign trade, agency business and representation works . 
4.151.   The State and certain government agencies together have a controlling share of "Barska 
Plovidba" otherwise known as "Monten egro Lines"156, which provides transportation of passengers 
(on a leased vessel) and cargo to and from the Port of Bar in Montenegro and the Port of Bari in 
Italy. The company owns two bulk carriers (36,000 DWT each). While no other companies provide 
cargo o r passenger services on this route in practice, Montenegro Lines does not have the 
exclusive right to operate services on this line. The authorities noted that competition in these 
services is present from the ports in Albania and Croatia. The company is a lso registered to 
perform marina activities, and provides international freight forwarding, maritime agency and 
catering services.157  
4.152.   Montenegro has two merchant seaports (at Bar and Kotor) and three ports of nautical 
tourism (at Budva, Tivat -Porto Monteneg ro and Bar). The authorities indicated that there have 
been no studies on the efficiency of Montenegro's ports.  
4.153.   The port of Bar is Montenegro's main port, offering both cargo and passenger transport 
operations. It is fully government -owned, but concessions  have been given for operation of various 
activities ( Table 4.14 ). It is comprised of  a yacht marina  (AD Marina Bar) , which has 738 berths at 
sea and 250 on land158, and a commercial port  (the Port of Adria),  which has terminals for 
container ships, general cargo ships, roll -on roll -off, and cruise vessels. The Port of Adria has an 
annual handing capacity of 750,000 TEU and 6 million tonnes of general cargo.159 The whole port 
                                                
155 The Government owns 99.97% of the company's shares, and the Bureau of Employment owns the 
remaining 0.03%.  
156 The owners hip structure of Basrska Plovidba is: the State , 18.63%; the Fund for Investment and 
Development of Montenegro,  16.15%; the Pension and Disability Insurance Fund , 12.83%; the Employment 
Agency of Montenegro,  4.27%; other legal entities , 3.35% ; and individu als, 44.74%.  
157 Montenegro Lines online information. Viewed at: http://montenegrolines.net/onama . 
158 Guide to AD Marina Bar – Handbook. Viewed at: http://www.marina -bar.me/wp -
content/uploads/2017/05/Guide -to-AD-Marina -Bar-Handbook.pdf . A concession for the operation of AD Marina 
Bar which had entered into force in December 2009 was cancelled at end -December 2 013.  
159 Port of Adria online information. Viewed at: https://www.portofadria.me/about -us. WT/TPR/S/369 • Montenegro  
 
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  area is a free zone.160 The State, together with other government bodies, has a controll ing share in 
AD Marina Bar161, and also Luka Bar AD Bar whose main activity is the handling and storage of 
goods and the operation of the free zone.162 In 2016, the turnover of merchandise goods at the 
Port of Bar was 1,654,163 tonnes.163 The Port of Adria was f ully privatized in 2013 (it was 
previously a fully state -owned); its major shareholder is Global Ports Holding .164 A privately -owned 
company, Ocean Montenegro, provides pilotage, mooring and tug services.165 Port fees are 
available online; they are applied equ ally to domestic and foreign flagged vessels.166  
4.154.   The Port of Kotor accepts passenger transport. It is a key cruise ship stop -over point and 
has a marina with the capacity to berth 80 yachts. It has a wharf length of 665 metres; the 
maximum length of a ship that can dock in the harbour is 300 metres. In 2015, the Port of Kotor 
received 441,927 passengers; 394 cruise ships; and 1,569 yacht visits. All port fees are available 
online; they are applied equally to domestic and foreign flagged vessels.167 A concessio n granted 
to the Port of Kotor company to provide port services expired in 2015168; the company continues 
to provide these services under a temporary agreement with the Government, while a new 
concession contract is being prepared. The company AD Luka Kotor provides international 
maritime services relating to cruise ships and yachts ; its major shareholders are the municipality 
of Kotor (56.97% of shares) and the Pension and Disability Insurance Fund of Montenegro 
(17.5%).169  
Table 4.14 Port of Bar concession contracts  
Concessionaire  Subject of concession 
agreement  Entry into 
force of 
contract  Contract duration / expiry  
Ocean Montenegro  The pursuit of economic 
activities in the port  22.10.2010  30 years / 2040  
AD "Jadransko  
brodogradilište" Bijela  The coast and piers, maritime 
zone and anchorages  19.11.2010  30 years / 30.06.2015 (in 
bankruptcy)  
AD "LUKA BAR"  Assignment of port area  27.07.2011  2019 (there are contractual 
provisions that the concession may 
be extended for a further 18 years)  
AD "Port of Adria " Assignment of port area  27.12.2013  30 years / 2043  
Source:  Information provided by the authorities.  
4.4.4.2   Air Transport  
4.155.   Since 2010, passenger transport at Montenegro's airports has increased dramatically, but 
there is no concrete trend with respect to the transport of goods ( Table 4.15 ). 
                                                
160 The advantages offered by the Free Zone may be viewed online at: 
https://www.portofadria.me/copy -of-development -plans . 
161 The ownership structure of share capital of the company AD Marina Bar is as follows: shares in the 
ownership of the State of Montenegro,  19.47%, ;IRF, 16.99% ; Fond PIO , 13.40% ; Employment Bureau , 
4.46% ; other legal entities , 3.10% ; and natural persons , 42.55%.  
162 Shares of the company "Luka Bar " AD are quoted on Montenegro Stock Exchange ( "B" list), as LUBA. 
The State of Montenegro is major shareholder with 54 .05% of total shares ; funds own 7 .17%; legal entities 
own 4 .13%; employees own 1 .017% ; and others own  the remainder.  
163 Annual turnover in previous years was: 1,478,585 tonnes in 2015; 1,261,993 tonnes in 2014 and 
1,161,221 tonnes in 2013.  
164 Global Ports Holding owns 54.05% of the shares in the Port of Adria . Other shares are, inter alia , 
held by funds and legal entities. Global Ports Holding PLC is 60.60% owned by Global Ports Holding B.V., which 
is a wholly owned subsidiary of Global Investment Holdings (GIH) – listed on Borsa  Istanbul (BIST). The EBRD 
holds 5.03% of the total issued share capital of Global Ports Holding PLC. The remaining 34.37% of the total 
issued share capital represents free float. Global Ports Holding online information. Viewed at: 
http://www.globalports.com.tr/about.php . 
165 Ocean Montenegro online information . Viewed at:  http://www.ocean -montenegro.com/Profile.htm . 
The company's ownership stru cture is comprised of Ocean srl Trieste , with  80% of shares , and Logicar Bar , 
with 20% of shares . 
166 Port tariffs were viewed at: https://www.portofadria.me/connectivity .  
167 Port tariffs  were viewed at: http://www.portofkotor.co.me . 
168 Port services provided by the Port of Kotor AD are: passengers' acceptance; operative shore; border 
crossing area; terminal building; and power and water supply f or yachts.  
169 Other shareholders are the Employment Bureau (5.87%), the custody account of the Crnogorska 
Komercijalna bank (8 .04%) , and employees and other people (11.61%). WT/TPR/S/369 • Montenegro  
 
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  4.156.   The MTMA has responsibility for civil aviation policy and strategy, and it represents 
Montenegro in international fora. The Montenegro Civil Aviatio n Authority (CAA) is, inter alia , 
responsible for aviation safety and security and air navigation services; it is an independent legal 
entity but must submit its work report and financial statements annually to the Government.170 
Airports are managed by Airp orts of Montenegro (see below). The main law governing the air 
transport sector is the  Law of Air Transport, 30/12  (amended by 30/17).171 
Table 4.15 Transport of passengers and goods at airports, 2010 -16 
 2010  2011  2012  2013  2014  2015  2016  
Goods  
(tonnes) 606,014  526,314  559,563  539,878  511,833  527,621  542,718  
Passengers 
(number)  1,205,563  1,258,835  1,357,516  1,558,940  1,612,130  1,643,905  1,855,837  
Source:  MONSTAT online information. Viewed at: http://www.monstat.org/eng/page.php?id=36&pageid=36 . 
4.157.   There are three airlines registered in Montenegro; one (Montenegro Airlines) is registered 
to perform regular domestic and international passenger traffic and charter traffic, and the 
two others are registered to provide charter traffic (Charter Traffic and Airways Montenegro, both 
of which are privately owned). Montenegro Airlines is a joint stock company, 99% of which is 
owned by the Gove rnment of Montenegro. It has a fleet of five aircraft, and is licensed to operate 
scheduled domestic and international passenger transport, charter flights and the carriage of cargo 
and mail. Its market share is around 35%; cargo transportation is negligib le. As at October 2017, 
it offered direct scheduled flights to Austria (Vienna); Denmark (Copenhagen); France (Paris and 
Lyon); Germany (Dusseldorf and Frankfurt); Italy (Rome); Serbia (Belgrade); Slovenia 
(Ljubljana); the Russian Federation (Moscow); and Switzerland (Zurich). It also operates charter 
flights to various destinations in Europe, and Israel and the Russian Federation.172 There is no 
obligation for government officials to use Montenegro Airlines.  
4.158.   Montenegro is also a signatory state of the Europ ean Common Aviation Area (ECAA)173, 
and has seven additional bilateral air services agreements in force  (Table 4.16) . All of these 
agreements score an Air Liberalization Index (ALI) of between 19 and 25 (out of a maximum of 
50), and have liberal pricing, des ignation and cooperation provisions, in addition to fairly open 
capacity clauses. The ones concluded with the Gulf countries (Qatar and the United Arab Emirates) 
also provide for 5th freedom rights.  
4.159.   Montenegro has two international airports, one at Podgori ca, the capital city, and the other 
at Tivat, near the Montenegrin coast. It has three additional aerodromes, of which one (Cemovsko 
Polje) is operational.174 These airports are owned by the Stat e, and are managed by the 
state-owned Airports of Montenegro. A irports of Montenegro used to be a public company but was 
reconstituted as a joint stock company in 2013 and operates under market conditions. The 
following services are provided under concession: duty -free shop; catering; and the car parking at 
Podgorica airport.  
4.160.   Rules on ground handling services are contained in the Regulation on ground handling 
services, as amended (OG Nos. 47/2012 and 14/2013); together with other laws, these transpose 
EU rules as set out in Directive 96/67/EC.175 Currently, ground handli ng services are provided by 
Airports of Montenegro; as stipulated in regulations, the option of engaging a third company to 
provide ground handling services under a concession agreement can only be considered once the 
level of passenger traffic reaches 2 m illion; this has not yet been attained.  
                                                
170 Montenegro Civil Aviation Authority online information. Viewed at: http://www.caa.me/onamaEN . 
171 This law and its amendment are available in Montenegrin only. Viewed at: 
http://www.caa.me/index.php?strana=fiksna&id=2& meni_top=2 .  
172 Montenegro Airlines online information. Viewed at: 
https://montenegroairlines.com/en/home/gornja_navigacija/o_nama.html . 
173 European Aviation Safety Agency o nline information. Viewed at: 
https://www.easa.europa.eu/newsroom -and-events/news/entry -force-european -common -aviation -area-ecaa-
agreement . 
174 The non -operational aerodromes are: Nikšić and Berane.  
175 European Commission Screening Report Montenegro, Chapter 14 – Transport Policy. Viewed at: 
https://ec.europa.eu/neighbourhood -
enlargement/sites/near/files/pdf/montenegro/screening_reports/screening_report_montenegro_ch14.pdf . 
Directive 96/67/EC  was viewed at: http://eur -lex.europa.eu/legal -content/EN/TXT/?uri=CELEX:31996L0067 . WT/TPR/S/369 • Montenegro  
 
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  4.161.   There are no restrictions on private companies (domestic or foreign) providing repair and 
maintenance companies. However, there are no such companies operating in practice. Montenegro 
Airlines undertakes its own repa ir and maintenance operations.  
Table 4.16 Montenegro's Air Services Agreements, 2017  
Partner  Date of 
entry into 
force  
5tha 
7thb 
Cabotagec 
Coopd 
Designatione 
Witholdingf 
Pricingg 
Capacityh 
Stati 
ALI 
Russian Federation  10/06 /2011  No No No Yes M SOEC  FP  B1 Yes 19 
Turkey  25/07 /2012  No No No Yes M SOEC  FP B1 Yes 19 
United States  02/03/2012  No Yes No Yes M SOEC  FP B1 Yes 19 
Ukraine  08/05/2014  No No No Yes M SOEC  FP B1 Yes 19 
United Arab 
Emirates  08/05/2014  Yes No No Yes M SOEC  FP B1 Yes 25 
The Former 
Yugoslav Republic 
of Macedonia  12/09/2014  No No No Yes M SOEC  FP B1 Yes 19 
Qatar  30/01/2017  Yes No No Yes M SOEC  FP B1 Yes 25 
a Coverage of fifth freedom rights.  
b Coverage of seventh freedom rights.  
c Coverage of cabotage rights.  
d Inclusion of clauses allowing cooperation between airlines, e.g. code -sharing.  
e Multiple designation (M).  
f Type of withholding clause: Substantial Ownership and Effective Control (SOEC).  
g Type of pricing clause: Free Pricing (FP)  
h Type of capacity clause: Bermuda I (B1)  
i Inclusion of exchange of statistics in agreement.  
Source:  Information provided by the authorities.  
4.4.4.3   Road Transport  
4.162.   Montenegro's main laws on road transport are the  Law o n Roads 42/04, 54/09 and 36/11 , 
the Law on Bar -Boljare Highway 52/14  and the Law on Road Transport 71/2017.  
4.163.   In 2015, Montenegro had 8,614 km of roads, 1,900 km of which were primary and 
secondary roads. Its main road border posts for commerce with neighbouring countries are at 
Božaj (with Albania), Dobrakovo and Dračenovac (with Serbia), Illino Brdo (with Bosnia  and 
Herzegovina) and Debeli brijeg (with Croatia).  
4.164.   The public transportation of passengers and cargo is done on the basis of a public 
transport licence; there are two types of licence for domestic and international transportation, 
respectively. Domestic transportation may only be undertaken by  companies and persons 
registered in Montenegro.  International transport is regulated on the basis of multilateral and 
bilateral agreements. For the international transport of passengers on a regular basis, a road 
traffic permit is required. The international transport of passengers on an occasional basis is 
regulated by the Interbus Agreement or bilateral agreements. The international transportation of 
cargo either requires a permit from the State in which the transp ort is performed or it is performed 
on the basis of a multilateral licence . 
4.165.   In 2015, work commenced on the first segment of a major highway project which will 
ultimately join the Montenegro's seaport at Bar with Boljare at the border with Serbia. The first  
section is 41 km long, and connects the suburbs of Podgorica with the northern municipality of 
Kolaṧin; the timeline for completion of this work is 2019. The project's cost is €809.6 million, 85% 
of which is being financed through a 20 -year loan from the Exim Bank of China (the loan is dollar 
denominated, with a 2% interest rate and a six -year grace period); the remaining 15% is being 
financed from the state budget, borrowing, and toll revenues. Construction is being undertaken by 
the China Road and Bridge  Corporation which has subcontracted certain activities to foreign WT/TPR/S/369 • Montenegro  
 
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  companies; 30% of the investment is required to be subcontracted to domestic companies.176 The 
contract for this project was implemented on the basis of an international agreement (the 
Agreem ent between the Government of Montenegro and the Government of the People's Republic 
of China on Enhancing Cooperation in Infrastructure Construction), and hence is not subject to a 
tender process. However, the authorities indicated that basic principles o f public procurement were 
respected. With respect to the other sections of the Bar -Boljare highway, the preparation of the 
preliminary designs and environmental and social impacts will be undertaken (to be started in 
2018), financed by grants from the West  Balkans Investment Framework (WBIF); a decision will 
be taken on the realization of the project and the modalities of funding thereafter. During the 
construction phase, economic benefits are expected to be reaped through the engagement of local 
constructi on operators, equipment, materials and workforce. Following completion, benefits are 
expected to accrue from better connectivity to the network of the Pan -European corridors; reduced 
traffic accidents; vehicle operating cost and time savings; increased inv estments and company 
competitiveness; and better exploitation of commercial ports and the economy's potential in the 
areas of agriculture, forestry and water management, and tourism.  
4.4.4.4   Rail Transport  
4.166.   Montenegro's rail network is 326  km long , connecting the n orth and south of the country 
and the east and west, with a crossing point in Podgorica. The most important railway line from an 
economic perspective is that which connects the Port of  Bar with the Vrbnica border with Serbia 
(167 km ), and thus provides a r ailway connection with Belgrade. A railway line connects Nikšić  
(Montenegro's second largest city, in the west of the country) with Podgorica (56  km), and another 
line continues in an easterly direction, connecting Podgorica with  the Tuzi-border  at Albania  
(24 km).177 According to the authorities, there have been ongoing improvements to the rail 
infrastructure and rolling stock over the past decade. However, official and external sources 
highlight that further investment is needed. O ne concrete project which is being realized over the 
period 2017 -19 is the reconstruction and modernization of the Vrbnic -Bar railway; this is expected 
to increase train speed, improve the competitiveness of the railway compared to other rail routes 
and other modes of transport, an d to encourage exploitation of the Port of Bar.178 The authorities 
indicated that financing for this project is in place, and implementation of the project will take 
place in the next years.179 
4.167.   Passenger transport by rail has steadily increased since 2011, while the volume of goods 
transported by rail has fluctuated over the period ( Table 4.1 7). The authorities indicated that 
freight transport figures are likely to improve with the re -launching of aluminum production at the 
KAP aluminum plant, which is the l argest freight transport customer.  
Table 4.17 Transport of passengers and goods by rail, 2010 -16 
 2010  2011  2012  2013  2014  2015  2016  
Goods  
(tonnes)  1,213  1,050  683 1,049  903 988 1,395  
Passengers 
(number)  755 692 781 922 1,122  1,236  1,284  
Source:  MONSTAT online information. Viewed at: http://www.monstat.org/eng/page.php?id=36&pageid=36 . 
4.168.   The main law governing the rail transport sector is the Law on Railways 27/13 ; this is 
partially aligned with the EU acquis  on the single European railway area (Directive 34/2012/EU and 
Regulation (EEC) 2007/1370 on public service obligations in passenger transport by rail and 
                                                
176 IMF (2016) , Staff Report for the 2015 Article IV Consultation , February.  Viewed at: 
http://www.imf.org/external/pubs/ft/scr/2016/cr1679.pdf . Domestic companies in this context include those 
companies that have registered their headquarters in Montenegro before 2012.  
177 Online information. Viewed at: https://ec.europa.eu/neighbourhood -
enlargement/sites/near/files/pdf/montenegro/screening_reports/screening_r eport_montenegro_ch14.pdf . 
178 Economic Programme for Montenegro 2017 -2019. 
179 Transport Development Strategy 2008 to 2018 . Viewed at: www.minsaob.gov.me . World Bank online 
information. Viewed at: http://siteresources.worldbank.org/ECAEXT/Resources/258598 -
1256842123621/6525333 -1306937865933/annex1_montenegro.pdf . WT/TPR/S/369 • Montenegro  
 
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  road).180 Montenegro is in the process of amending this Law in order to meet EU requirements that 
the country must have a competent, independent and effective regulatory authority and rail safety 
authority; the amended law will be in force from 2018 .181 
4.169.   The MTMA is the competent authority for contracting public service contracts. The MTMA's 
Railways Directora te is the regulatory authority for the sector, and, inter alia , is responsible for 
licensing and rail safety . In 2008, the railway infrastructure was separated from the rail operator. 
The railway infrastructure manager is "Railway Infrastructure of Montene gro JSC" ( ŽICG). There 
are two railway operators, a passenger transport company (ŽPCG) and a freight transport 
company (Montecargo) . A fourth company (OŽVS) is responsible for the maintenance of rolling 
stock. All  are joint stock companies with majority st ate ownership.182  
4.170.   According to the programme for maintenance of infrastructure, compiled by the Railways 
Directorate in cooperation with the infrastructure manager, the State provides a yearly budget for 
the maintenance of infrastructure. Over the period 20 12-17, this has ranged from €6.7 million to 
€7.2 million. Passenger transport is subsidized according to the Public Service Obligation contract 
which is signed with ŽPCG ; over the review period, the subsidy has ranged from €2.3  million to 
€5.5 million.183 Freight transport is not subsidized.  
4.4.5   Tourism services  
4.171.   Tourism remains one of Montenegro's main economic activities and sources of government 
revenue, as well as serving as a stimulus to other sectors, such as agriculture, fisheries and 
construction. In 2016,  accommodation and food service activities accounted for 8.6% of current 
GDP at basic prices, and 8.3% of employment (Table 1.2). It has been estimated that its 
contribution to GDP when including related activities is 22.1%, and its contribution to employm ent 
is 14.6% including direct, indirect and induced jobs.184 By 2027, tourism is predicted to support 
40,000 jobs.185 After Croatia, Montenegro is the South East European economy where tourism 
contributes the highest share to both GDP and employment.186 Monteneg ro's main tourism 
products are currently related to coastal activities, but diversification efforts are ongoing.  
4.172.   In 2016, internal tourism consumption constituted €1,067.9 million; and this is estimated 
to reach €1,866.9 million by 2027.187 The main source markets for tourist arrivals are the 
European  Union (principally, Poland, France, the United Kingdom, and Germany), the 
Russian  Federation, Serbia, and Bosnia and Herzegovina. In 2016, international tourist arrivals 
staying in collective accommodation (hot els, pensions, motels, tourist resorts, hostels, camps 
etc.188) rose to 707,750, a 11.26% increase compared to 2015, while domestic tourist arrivals 
reached 101,038, a 3.34% increase compared to 2015.189 During the review period, the average 
                                                
180 European Commission Scr eening Report Montenegro, Chapter 14 – Transport Policy. Viewed at 
https://ec.europa.eu/neighbourhood -
enlargement/sites/near/files/pdf/montenegro/screening_reports/screening_report_montenegro_ch14.pdf . 
181 Government of Montenegro, Economic Reform Programme for Montenegro 2017 -2019, p. 61.  
182 European Commission Screening Report Montenegro, Chapter 14 – Transport  Policy. Viewed at 
https://ec.europa.eu/neighbourhood -
enlargement/sites/near/files/pdf/montenegro/screenin g_reports/screening_report_montenegro_ch14.pdf .  
183 On an annual basis, the subsidies, in euros, were: 2.4 million in 2012 and 2013; 2.3 million in 2014 
and 2015; 5.5 million in 2016; and 2.8 million in 2017.  
184 In 2013, tourism contributed 9.8% to GDP (20% including related activities) and 8.8% to total 
employment (18.3% including direct, indirect and induced jobs). World Travel & Tourism Council online 
information. Viewed at: https://www.wttc.org/ -/media/files/reports/economic -impact -research/country -
reports -2014/montenegro2014.pdf . 
185 World Travel & Tourism Council online information. Viewed at: https://www.wttc.org/ -
/media/files/reports/economic -impact -research/countries -2017/montenegro2017.pdf . 
186 OECD. Viewed at: 
https://www.oecd.org/investmentcompact/Fostering_Tourism_Competitiveness_South_East_Europe.pdf . 
187 Internal tourism consumption is the total revenue  generated within a country by industries that deal 
directly with tourists, including visitor exports, domestic spending and government individual spending. This 
does not include spending abroad by residents. World Travel & Tourism Council online informati on. Viewed at: 
https://www.wttc.org/ -/media/files/reports/economic -impact -research/countries -2017/montenegro2017.pdf . 
188 Collective accommo dation does not include private accommodation such as accommodation in 
houses and rooms for rent and tourist apartments.  
189 Montenegro Statistical Office (2017), Tourist arrivals and overnight stays in collective 
accommodation , June, (Table 4, p p, 5-6 and Table 1, p . 2). Viewed at: WT/TPR/S/369 • Montenegro  
 
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  length of stay in collective accommodation has decreased  from 4.5 days in 2015 to 4.4 days in 
2016 for international tourists, and from 4.13 days in 2015 to 4.04 days in 2016 for domestic 
tourists . It is estimated that around 73% of the tourist accommodati on offered in Montenegro is 
private accommodation (i.e. rooms, apartments, and houses).190 The growth in importance of 
private tourist accommodation accounts for the slight decline in stays in collective accommodation.  
4.173.   Montenegro ranked 72nd out of 136 econ omies (five points lower than in 2016) in the 
World Economic Forum's Travel and Tourism Competitiveness Index 2017; its highest rankings 
were in the sub -categories of tourist service infrastructure (28th place) and environmental 
sustainability (49th place) , and it lowest rankings were for natural resources (90th place) and 
cultural resources and business travel (132nd place).191 With respect to improving rankings relating 
to natural and cultural resources, the authorities indicated that they are trying to dev elop some 
products in cooperation with the Ministry of Culture and through regional initiatives, but progress 
is slow.  
4.174.   During the review period, the number of tourist accommodation establishments increased 
from 332 in 2012 to 348 in 2016; however, the numb er of rooms decreased (from 69,953 rooms 
in 2012 to 68,558 rooms in 2016).  Accommodation choices include, inter alia,  hotels, boarding 
houses, motels, tourist resorts, camping sites, villas, apartments, and inns.192 The Government of 
Montenegro owns two five -star hotels that have been leased for 42 years to the company Adriatic 
Properties ( Aman Sveti Sefan  and Villa Milocer ), and it is a major shareholder of the hotel groups 
Budvanska Rivijera  and Ulcinjska Rivijera.193 There are no foreign direct investment re strictions on 
any type of tourist accommodation in Montenegro. As of 2017, permits had been issued for 
420 tourist agencies, and licences had been granted to 1,349 tour guides.  No nationality 
requirements are applied to tourist service providers (including  tour guides).  
4.175.   The Ministry of Sustainable Development and Tourism continues its responsibility for, 
inter alia, establishing overall tourist -related legislation, policy and strategy, and development and 
investment projects; developing and maintaining tourism standards and infrastructure; 
issuing/withdrawing licences required for Central Registry of Business Court; a nd registering 
tourist guides and representation contracts (for tourist representatives). At the local level, 
municipalities are in charge of, inter alia,  developing and maintaining tourism services and issuing 
permits for establishing tourism services and  tourism development.194 The budget for the Ministry 
of Tourism and the National Tourism Organization for 2017 was around €3.5 million, and the 
budget in the same year for the improvement of the tourism offering was €12.5 million.  
4.176.   During the review period, several tourism -related policies have been in place and continue 
to be implemented by Montenegro Ministry of Sustainable Development and Tourism. 
Montenegro's Tourism Development Strategy to 2020, adopted in 2008, is focused on 
five strategic objectives, inter alia , involving: creation of required and accompanying tourism 
infrastructure; developing a specific unique selling point; becoming recognized as an 
all-year-round destination; creating the institutional and legal framework for successful and 
sustaina ble development; and engaging the local population in the tourism sector ("internal 
                                                                                                                                                  
https://www.monstat.org/userfiles/file/turizam/dolasci%20i%20nocenja%202017/6/Release%20June%20201
7.pdf. 
190 Private accommodation refers to the forms of hospitality facilities (rooms, apartments, houses) 
defined by law, and whose owners, pursuant to the Law on Tourism, have obtained the requisite work permit. 
Data on tourist stays in private accommodation is in th e process of being collected and should be available in 
2018.  
191 The index incorporates such indicators as business environment, safety and security, health and 
hygiene, human resources and labour markets, ICT readiness, prioritization of travel and tourism , international 
openness, price competitiveness, environmental sustainability, air transport infrastructure, ground and port 
infrastructure, tourist service infrastructure, natural resources, cultural resources and business travel. WEF 
(2017), The Travel &  Tourism Competitiveness Report 2017 , Geneva, (pp. 4, 5, 9 and 45) . Viewed at: 
http://www3.weforum.org/docs/WEF_TTCR_2017_web_0401.pdf . 
192 Statistical Office of Montenegro. Viewed at: 
https://www.monstat.org/eng/page.php?id=301&pageid=45 . 
193 Budvanska Rivijera controls Palas, Aleksandar, Slovenska plaza, Mogren, Castellastva, Piva ; and 
Ulcinjska Rivijera controls Olympi c, Bellevue and Ada Bojana.  In September 2017, the hotels Olympic and 
Bellevue were leased for 30 years to Karisma Hotels and Resorts.  Information provided by the authorities.  
194 European Committee of the Regions online information. Viewed at: 
https://portal.cor.europa.eu/divisionpowers/Pages/Montenegro -Tourism.aspx  and WTO document 
WT/ACC/CGR/38, WT/MIN(11)/7, 5 December 2011, p. 88. WT/TPR/S/369 • Montenegro  
 
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  marketing").195 As noted by the authorities, many of these measures are in place; and 
implementation of other measures is ongoing, including in the areas of upgrading the qua lity of 
accommodation capacities; diversification of tourism products; improving the investment 
environment; improving accessibility to Montenegro; and tourism promotion activities. The 
2007-2014 Montenegro Human Resources Development Strategy for the Tour ism Sector was 
aimed at bringing new professionals into the sector, provide funding and improving coordination of 
the work of all institutions involved in developing the human capital required to support growth in 
travel and tourism.196 As noted by the autho rities, the quality level of the Montenegrin tourism 
product is being constantly upgraded, with new high category (four and five star) hotels being 
opened. Human resources have made an important contribution to the improved quality of tourism 
services, and  hence the authorities consider that the Strategy has achieved positive results. A new 
Tourism Development Strategy and a new Human Resources Development Strategy for the 
Tourism Sector are foreseen for 2020.  
4.177.   Tourism sector development is also one of the o verarching objectives of the 2015 -2018 
Montenegro Development Directions, aimed to achieve smart growth through investments in the 
development of high -quality hotel capacities; improvement of airline availability; creation of 
diversified and high -quality s upply of tourist products; and diversification of the countries of origin 
of tourists.197 To address the growing impact on climate change, the National Strategy for 
Sustainable Development to 2030 intends to develop sustainable tourism through (1) optimal us e 
of natural resources by implementing strategies mitigating climate change effect on economic 
development, reducing greenhouse gas emissions and passing to a low -carbon economy; 
(2) respect for the socio -cultural authenticity of the community, and the pre servation of cultural 
heritage and traditional values; and (3) ensuring sustainable, long -term economic business 
activities, with the aim of achieving socio -economic benefits for citizens.198 In addition, according 
to the 2017 -2018 Economic Reform Programme,  the improvement of the tourist products in the 
north of Montenegro, through building infrastructure in ski resorts, is necessary to increase the 
competitiveness of the tourist sector and to become recognized as an all -year-round 
destination.199 
4.178.   The main leg islation governing the tourist sector remains the Law on Tourism 
(OG No. 61/10), as amended in 2011 (OG  Nos. 40/11 and 53/11) and 2014 (OG  No. 31/14). The 
2014 amendments aim to introduce new models of the hospitality and accommodation offer, and 
encourage  new investments in high -quality facilities.200 A new draft Law on Tourism and 
Hospitality focuses on sustainable development, harmonization with environmental protection and 
its resources, and the reduction of the impact of climate change and adherence to t he principle of 
a low -carbon economy. It incorporates penalties for advertisers who permit the advertising of 
service providers who do not have the requisite work permit. It will also transpose the provisions 
of the EC Directive on services in the internal  market.201 The 2014 Amendments to the Law on 
Tourism Organisations ( OG Nos. 45  11/04, 46/07, 40/11, and 45/14 ), inter alia, improved the 
regulation and operation of tourist organizations, modified the criteria for the categorization of 
tourist sites, introduced more efficient recording of tourist traffic, and overcame the inaccuracy of 
certain provisions of the existing Law.202 According to this Law, the requirements related to 
                                                
195 Ministry of Tourism and Environment (2008), Montenegro Tourism Development Strategy to 2020, 
December, p. 31. Viewed at:  http://www.mrt.gov.me/en/library/strategije . 
196 Ministry of Tourism and Environment (2007), Human Resources Development Strategy for the 
Tourism Sector in Montenegro,  May, p. 5. Viewed at: http://www.mrt.gov.me/en/library/strategije . 
197 Ministr y of Finance (2015), Montenegro Development Directions 2015 -2018, June, p. 44. 
198 National Strategy for Sustainable Development , p. 113. 
199 Government of Montenegro (2017), Economic Reform Programme for Montenegro 2017 -2019. 
Podgorica, January, p 70. 
200 Information provided by the authorities and Ministry of Sustainable Development and Tourism online 
information. Viewed at: http://www.mrt.gov.me/biblioteka/zakoni .  
201 In particular, the Draft Law on Touris m focuses on the establishment of a central tourist registry, 
unified electronic data records and its exchange; more detailed regulation of the terms of tourist zones, 
advertising and work guides and agencies; full harmonization of travel arrangements with  the EU Directive; 
and regulation of such issues as noise in restaurants and quality of services. Montenegro Chamber of Economy 
online information. Viewed at: http://www.privrednakomora.me/en/poslovni -ambijent -javne -
rasprave/roundtable -draft-law-tourism .  
202 Information provided by the authorities and Ministry of Sustainable Development and Tourism online 
information. Viewed at: http://www.mrt.gov.me/biblioteka/zakoni . Additionally, the Law on Tourism Tax 
(OG No. 48/15) defines, inter alia,  the calculation and payment of tourist tax on nautical tourism vessels; and 
the Law on Rafting (OG Nos. 53/16 and 57/16) defines, inter alia,  rafting services and creates conditions for WT/TPR/S/369 • Montenegro  
 
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  tourism activities remain unchanged. As stipulated in Article 13, business so cieties conducting 
tourist activities must be listed in the Central Registry of Business Court as a tourist agency 
services provider based on a licence issued by the ministry in charge of tourism.203  
4.179.   In addition to tax incentives available to all business a ctivities ( Section 3.3.1) , Montenegro 
provides additional incentives in the tourism sector. Exemptions  from public utility fees for the 
construction of four - and five -star category hotels are available until a general regulation plan of 
Montenegro comes in to force (expected at the end of 2020).204 In addition, a reduction of annual 
property tax of up to 30% on four -star hotels and 70% on five -star hotels located in priority 
tourist sites is permitted under the Law on Immovable Property Tax ( OG Nos. 65/01, 75/ 10, and 
09/15 ). To increase investment in high quality facilities, the progressive tax rate, introduced under 
this Law, puts a greater tax burden on three -star hotel facilities located in priority zones. 
Moreover, the Law on Value Added Tax ( OG Nos. 65/01,  38/02, 72/02, 21/03, 76/05, 16/07, 
29/13, 09/15, and 01/17 ) abolished the obligation to pay VAT on imports of products and services 
supplied for the construction of five - and more star hotels. As of January 2018, the Law also 
introduced VAT at the rate of  7% for the services of preparation and serving food and drinks in 
four- and five -star hotels in the north and in five -star hotels in the central and coastal regions.205 
According to World Travel and Tourism Council, in 2016, the investment in the tourism se ctor 
reached €263.6 million, 34% of the total investment. It is estimated to rise by 7.6% in 2017, and 
by 6.9% per year over the next 10 years, to €551.5 million in 2027, 51.5% of total investment.206 
4.180.   The Government of Montenegro realizes the major bottlenec ks the sector is facing. As 
stipulated in the Montenegro Development Directions 2020 Strategy, the remaining challenges 
remain insufficient: high -quality accommodation, slow return on investment, unbalanced regional 
tourism products, and overemphasized sea sonality.207 According to the OECD, the main obstacles 
include issues around the limited use of ICT, lack of developed transport infrastructure, and 
insufficient quality of the labour force. To address them, it  suggests, inter alia , supporting ICT 
programmes  and training; fostering cooperation between the Government, academia, and the 
private sector; and conducting seminars and workshops to raise awareness on the tourism 
potential of the country.208 The 2017 EBRD country report emphasizes Montenegro's constrain ed 
ability to leverage its comparative advantage as a tourism destination due to an underdeveloped 
transport and municipal infrastructure. Moreover, tourism remains vulnerable to external shocks, 
in particularly those regarding demand from the Russian Fede ration, the European Union, and the 
Western Balkans.209  
 
 
 
 
 
                                                                                                                                                  
business operations. Further legislative frameworks in the tourism se ctor include, inter alia : Amendments to 
the Regulation on the Standard Records of Tourist Traffic, and the Regulation on the Amount of Tourist Tax for 
Nautical Tourism Vessels.  
203 A licence is issued within 15 days for a period of five years (Article 14 of the Law on Tourism).  
204 These exemptions were originally set out in the 2013 Law on Spatial Development and Construction 
of Structures. This Law was replaced by the 2017 Law on Spatial Development and Construction and Structures 
which removes the exemptions , but a provision in the new Law allows exemptions to be claimed up until the 
general regulation plan of Montenegro is adopted.  
205 Information provided by the authorities . 
206 World Travel & Tourism Council online information. Viewed at https://www.wttc.org/ -
/media/files/reports/economic -impact -research/countries -2017/montenegro2017.pdf  (p. 1).  
207 Ministry of Finance (2015), Montenegro Developme nt Directions 2015 -2018, June, (p. 45) . 
208 OECD (2016), Fostering Tourism Competitiveness in South East Europe, February. Viewed at: 
https://www.o ecd.org/investmentcompact/Fostering_Tourism_Competitiveness_South_East_Europe.pdf . 
(p 73-74). 
209 EBRD (2017), Strategy for Montenegro . As approved by the Board of Directors at its meeting on 
3 May, (pp. 3 and 12). WT/TPR/S/369 • Montenegro  
 
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  5  APPENDIX TABLES  
Table A1. 1 Merchandise exports by group of products, 2012 -16 
  2012  2013  2014  2015  2016  
Total exports (€ million)  364.9  372.3  332.1  318.4  320.3  
 % of total exports  
Total primary products  79.9 81.5 82.6 73.7 73.8 
Agriculture  22.0 21.6 36.1 27.5 25.8 
Food 15.5 15.0 27.4 17.0 15.7 
1121 - Wine of fresh grapes (including 
fortified wine)  5.0 3.6 4.1 4.9 4.6 
0161 - Bacon, ham and other salted, 
dried or smoked meat of swine  0.8 1.2 1.5 1.9 2.1 
0484 - Bread, pastry, cakes, biscuits and 
other bakers' wares  0.9 0.6 0.5 1.0 1.7 
1123 - Beer made from malt  1.0 1.0 1.2 1.4 1.3 
Agricultural raw material  6.5 6.6 8.7 10.5 10.1 
2482 - Wood of coniferous species, sawn 
or chipped lengthwise, sliced or peeled  2.2 2.1 3.0 4.0 3.8 
2484 - Wood of non-coniferous species, 
sawn or chipped lengthwise, sliced or 
peeled  0.8 0.8 1.2 1.5 1.8 
Mining  58.0 59.9 46.5 46.2 48.0 
Ores and other minerals  8.9 9.4 10.4 9.5 12.3 
2851 - Aluminium ores and concentrates  0.1 0.6 0.5 2.2 5.1 
2875 - Zinc ores and concentrates  1.2 1.1 2.0 2.2 2.5 
2882 - Other non -ferrous base metal 
waste and scrap, n.e.s.  3.1 2.6 2.8 2.1 2.5 
Non-ferrous metals  35.3 21.5 21.6 21.9 19.6 
6841 - Aluminium and aluminium alloys, 
unwrought  35.1 21.4 21.5 21.6 19.4 
Fuels 13.8 29.0 14.5 14.8 16.1 
3510 - Electric current  10.5 25.7 11.3 9.4 11.5 
334 - Petroleum oils and oils obtained 
from bituminous minerals (other than 
crude)  2.6 3.0 2.7 4.8 3.9 
Manufactures  19.5 17.5 16.6 24.9 25.6 
Iron and steel  4.5 3.3 1.4 6.6 4.5 
6764 - Other bars  and rods of iron and 
steel 0.6 0.5 0.1 1.5 2.9 
Chemicals  3.3 2.5 3.8 4.1 5.4 
5429 - Medicaments, n.e.s.  1.3 1.0 0.5 0.9 2.9 
Other semi -manufactures  2.4 2.5 1.9 1.9 2.8 
Machinery and transport equipment  7.1 6.9 6.9 9.4 9.7 
Power generating machines  0.0 0.1 0.0 0.1 0.0 
Other non -electrical machinery  4.0 3.6 3.9 4.7 4.4 
7482 - Bearing housings and plain shaft 
bearings  2.8 2.6 3.1 3.8 3.3 
Agricultural machinery and tractors  0.0 0.0 0.0 0.0 0.0 
Office machines & telecommunication 
equipment  0.5 0.4 0.6 0.6 0.8 
Other electrical machines  0.7 0.8 0.9 1.1 1.5 
Automotive products  0.8 1.0 0.9 1.2 2.4 
Other transport equipment  1.1 1.1 0.5 1.8 0.7 
Textiles  0.1 0.0 0.1 0.1 0.1 
Clothing  0.3 0.2 0.4 0.3 0.3 
Other consumer goods  1.8 2.0 2.2 2.6 2.8 
Other  0.6 1.0 0.8 1.4 0.5 
Source:  UNSD, Comtrade database (SITC Rev.3).  WT/TPR/S/369 • Montenegro  
 
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  Table A1. 2 Merchandise imports by group of products, 2012 -16 
  2012  2013  2014  2015  2016  
Total imports (€ million)  1,818.4  1,769.1  1,783.9  1,848.6  2,045.6  
 % of total imports  
Total primary products  46.4 43.4 43.0 39.1 35.1 
Agriculture  24.8 26.1 27.4 25.7 24.1 
Food 24.1 25.3 26.6 25.0 23.5 
0122 - Meat of swine, fresh, chilled or frozen  2.5 2.7 4.2 2.3 2.3 
1110 - Non-alcoholic beverages, n.e.s.  2.1 2.0 1.9 1.8 1.8 
0484 - Bread, pastry, cakes, biscuits and 
other bakers' wares  1.0 1.1 1.1 1.2 1.2 
0989 - Food preparations, n.e.s.  0.9 1.0 1.1 1.2 1.1 
Agricultural raw material  0.8 0.8 0.8 0.7 0.6 
Mining  21.6 17.3 15.6 13.3 11.1 
Ores and other minerals  2.5 1.9 1.6 1.7 1.2 
Non-ferrous metals  0.7 0.8 0.7 0.8 0.7 
Fuels 18.4 14.6 13.3 10.8 9.2 
334 - Petroleum oils and oils obtained from 
bituminous minerals (other than crude)  10.7 10.2 9.8 7.6 6.1 
3510 - Electric current  5.8 3.1 2.2 2.2 2.2 
Manufactures  53.5 56.6 56.9 60.9 64.8 
Iron and steel  2.0 2.3 2.4 2.2 2.4 
Chemicals  9.3 10.1 10.1 10.5 9.8 
5429 - Medicaments, n.e.s.  1.8 2.0 2.0 2.1 1.9 
Other semi -manufactures  11.0 11.1 11.2 11.5 12.7 
6911 - Structures and parts of structures  0.7 0.7 0.7 0.9 1.9 
6612 - Portland cement, aluminous cement, 
slag cement, etc  1.2 1.3 1.3 1.3 1.3 
6624 - Non-refractory ceramic bricks, tiles, 
pipes and similar products  1.1 1.1 1.2 1.1 1.1 
Machinery and transport equipment  18.3 19.6 19.0 22.2 25.7 
Power generating machines  0.4 0.2 0.4 0.5 2.1 
7165 - Generating sets  0.1 0.1 0.1 0.2 1.5 
Other non -electrical machinery  4.1 4.2 4.7 5.6 5.2 
Agricultural machinery and tractors  0.3 0.2 0.3 0.2 0.2 
Office machines & telecommunication equipment  3.1 3.8 4.3 4.8 4.6 
7643 - Transmission apparatus for radio -
telephony, radio -telegraphy, radio -
broadcasting or television  0.5 0.7 1.0 1.2 1.1 
Other electrical machines  3.7 3.8 3.7 4.6 6.2 
7731 - Insulated wire, cable and other 
insulated electric conductors  0.6 0.7 0.6 0.7 1.9 
Automotive products  5.2 5.0 5.3 6.1 6.3 
7812 - Motor vehicles for the transport of 
persons, n.e.s.  3.5 3.5 3.5 3.7 3.8 
7821 - Motor vehicles for the transport of 
goods  0.9 0.5 0.6 1.2 1.2 
Other transport equipment  1.7 2.4 0.7 0.7 1.3 
Textiles  0.7 0.7 0.9 0.8 0.9 
Clothing  2.7 3.0 3.1 3.1 3.3 
Other consumer goods  9.4 9.7 10.2 10.5 10.1 
Other  0.1 0.0 0.1 0.1 0.1 
Source:  UNSD, Comtrade database (SITC Rev.3).  WT/TPR/S/369 • Montenegro  
 
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  Table A1. 3 Merchandise exports by destination, 2012 -16 
  2012  2013  2014  2015  2016  
Total exports (€ million)  364.9  372.3  332.1  318.4  320.3  
 % of total exports  
Americas  0.4 0.3 0.3 0.5 0.6 
United States  0.3 0.2 0.2 0.4 0.4 
Other America  0.1 0.1 0.1 0.1 0.3 
Europe  88.3 89.1 77.8 80.6 79.3 
EU-28 51.2 41.0 35.8 35.7 36.6 
Hungary  4.9 0.3 0.2 0.9 10.9 
Italy 3.4 4.2 10.5 12.6 5.4 
Slovenia  7.9 9.7 4.0 3.8 4.7 
Germany  3.4 3.0 1.8 4.7 4.1 
Poland  1.2 1.2 2.3 2.8 3.6 
Czech Republic  0.7 1.2 0.9 1.1 1.9 
France  0.7 0.9 0.9 1.4 1.2 
United Kingdom  1.2 0.9 1.6 1.7 1.0 
Sweden  0.6 0.4 0.7 0.9 0.8 
Croatia  22.9 16.0 9.9 1.0 0.7 
EFTA 0.7 0.7 1.1 1.2 1.4 
Switzerland  0.7 0.7 1.1 1.2 1.3 
Other Europe  36.3 47.3 40.8 43.7 41.4 
Serbia  22.8 35.8 24.0 22.1 25.6 
Bosnia and Herzegovina  7.5 4.9 9.6 9.3 8.3 
Albania  2.1 3.2 4.6 4.2 4.5 
Turkey  3.2 2.6 1.7 6.7 1.6 
The former Yugoslav Republic of Macedonia  0.6 0.7 1.0 1.4 1.4 
Commonwealth of Independent States (CIS)  2.5 1.7 11.2 1.3 1.0 
Russian Federation  2.0 1.6 1.2 0.8 0.7 
Africa  0.6 1.7 1.8 2.2 0.9 
Middle East  0.2 0.1 0.0 0.9 0.9 
Asia 1.7 1.8 2.4 5.0 8.5 
China  1.0 1.0 0.8 2.5 5.9 
Japan  0.5 0.6 0.6 1.0 0.7 
Other Asia  0.1 0.2 1.1 1.5 1.9 
Bangladesh  0.0 0.0 0.5 1.0 0.9 
Hong Kong, China  0.0 0.0 0.0 0.0 0.7 
Other  6.4 5.3 6.4 9.5 8.9 
Memo:       
CEFTA  32.4 44.0 38.1 35.6 38.4 
Source:  UNSD, Comtrade database.  WT/TPR/S/369 • Montenegro  
 
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  Table A1. 4 Merchandise imports by origin, 2012 -16 
  2012  2013  2014  2015  2016  
Total imports (€ million)  1,818.4  1,769.1  1,783.9  1,848.6  2,045.6  
 % of total imports  
Americas  2.3 2.2 2.2 2.4 2.5 
United States  0.8 0.9 0.9 1.0 1.2 
Other America  1.6 1.4 1.3 1.4 1.3 
Europe  85.7 85.4 85.9 82.1 83.3 
EU-28 44.5 44.1 45.8 41.3 48.1 
Germany  6.3 6.4 6.4 6.3 10.5 
Italy 6.2 6.6 6.5 6.4 7.4 
Croatia  6.1 5.5 6.0 6.0 5.4 
Greece  8.7 8.5 8.1 6.2 5.3 
Slovenia  4.0 3.6 3.2 3.1 2.3 
Spain  1.2 2.1 1.9 1.7 2.1 
France  1.2 1.0 1.6 1.2 2.0 
Austria  1.8 1.8 1.8 1.6 1.7 
Netherlands  1.8 1.7 3.3 1.7 1.6 
Poland  0.7 0.9 0.9 1.1 1.5 
Czech Republic  1.0 0.7 0.7 0.9 1.3 
Romania  1.4 1.1 1.3 1.2 1.2 
Hungary  1.0 1.2 1.2 1.1 0.9 
Sweden  0.2 0.4 0.2 0.3 0.9 
EFTA 1.3 0.8 0.8 0.7 1.5 
Norway  0.0 0.0 0.1 0.0 0.8 
Other Europe  39.9 40.5 39.4 40.1 33.7 
Serbia  29.3 28.6 26.9 28.1 22.3 
Bosnia and Herzegovina  6.8 7.1 7.1 6.5 5.5 
Turkey  1.6 1.9 2.0 2.3 3.3 
Albania  0.8 1.4 1.8 1.6 1.4 
The former Yugoslav Republic of Macedonia  1.5 1.4 1.5 1.5 1.3 
Commonwealth of Independent States (CIS)  1.1 0.6 0.3 0.5 0.6 
Africa  0.2 0.3 0.2 0.4 0.3 
Middle East  0.1 0.1 0.1 0.1 0.2 
Asia 10.2 11.2 11.0 14.5 12.9 
China  7.2 8.1 7.4 10.3 9.0 
Japan  0.9 0.9 1.0 0.9 0.9 
Other Asia  2.2 2.2 2.5 3.3 3.0 
Other  0.3 0.2 0.2 0.1 0.2 
Memo:       
CEFTA  36.8 37.2 35.9 36.3 29.2 
Source:  UNSD, Comtrade database.  WT/TPR/S/369 • Montenegro  
 
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  Table A3. 1 Tariff summary, 2017  
  Number 
of lines  Average 
(%) Range 
(%) Share of 
duty-
free 
lines 
(%) Share of 
non-ad 
valorem  
tariffs 
(%) Coefficient 
of 
variation  
Total  9,528  5.1 0-50 29.0 1.5 1.4 
HS 01 -24 2,506  12.0 0-50 13.1 5.8 0.8 
HS 25 -97 7,022  2.6 0-20 34.7 0.0 1.3 
By WTO category        
WTO agricultural  products  2,099  12.3 0-50 17.8 6.8 0.9 
Animals and products thereof  351 14.6 0-38.7 9.4 10.3 0.7 
Dairy products  151 24.3 0-50 0.7 19.9 0.4 
Fruit, vegetables, and plants  509 11.8 0-40 10.4 2.2 0.5 
Coffee and tea  47 11.8 0-20 6.4 0.0 0.6 
Cereals and preparations  226 7.2 0-37.1 10.2 1.8 1.0 
Oils seeds, fats, oil and their 
products  175 2.1 0-45 64.0 2.3 2.9 
Sugars and confectionary  44 5.5 0-14.3 25.0 0.0 1.0 
Beverages, spirits and tobacco  331 22.8 0-50 0.6 17.5 0.5 
Cotton  6 0.0 0.0 100.0  0.0 0.0 
Other agricultural products, n.e.s.  259 2.4 0-15 50.2 0.0 1.5 
WTO non -agricultural products  7,429  3.1 0-20 32.1 0.0 1.2 
Fish and fishery products  526 8.2 0-20 3.6 0.6 0.4 
Minerals and metals  1,441  2.3 0-20 56.1 0.0 1.4 
Chemicals and photographic supplies  1,305  1.7 0-6.5 16.7 0.0 1.1 
Wood, pulp, paper and furniture  461 0.3 0-10 94.6 0.0 5.1 
Textiles  838 3.8 0-12.5 2.7 0.0 0.9 
Clothing  341 10.0 10.0 0.0 0.0 0.0 
Leather, rubber, footwear and travel 
goods  259 4.9 0-15 16.6 0.0 0.8 
Non-electric machinery  883 2.1 0-15 38.4 0.0 1.3 
Electric machinery  462 1.2 0-7 38.1 0.0 1.3 
Transport equipment  270 1.5 0-8 41.1 0.0 1.3 
Non-agricultural products, n.e.s.  594 3.4 0-15 33.5 0.0 1.2 
Petroleum  49 1.3 0-4.7 32.7 0.0 1.0 
By ISIC sector        
ISIC 1 - Agriculture, hunting and 
fishing  653 7.8 0-50 31.7 3.1 1.1 
ISIC 2 - Mining  115 1.2 0-8 71.3 0.0 1.7 
ISIC 3 - Manufacturing  8,759  4.9 0-50 28.2 1.4 1.4 
Manufacturing excluding food 
processing  6,842  2.7 0-20 33.5 0.0 1.3 
Electrical energy  1 0.0 0.0 100.0  0.0 0.0 
By stage of processing        
First stage of processing  1,222  6.0 0-50 35.7 1.6 1.2 
Semi-processed products  2,816  1.8 0-20 34.6 0.1 1.5 
Fully processed products  5,490  6.6 0-50 24.6 2.2 1.2 
By HS section        
01 Live animals and products  956 12.7 0-50 6.6 7.0 0.7 
02 Vegetable products  554 7.6 0-40 25.1 2.3 1.0 
03 Fats and oils  129 2.6 0-45 62.8 3.1 2.8 
04 Prepared food, beverages and 
tobacco  867 15.4 0-50 5.2 7.2 0.7 
05 Mineral products  234 1.3 0-8 55.6 0.0 1.5 
06 Chemicals and products thereof  1,220  1.6 0-6.5 15.8 0.0 1.0 WT/TPR/S/369 • Montenegro  
 
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    Number 
of lines  Average 
(%) Range 
(%) Share of 
duty-
free 
lines 
(%) Share of 
non-ad 
valorem  
tariffs 
(%) Coefficient 
of 
variation  
07 Plastics, rubber, and articles 
thereof  301 2.7 0-10 26.6 0.0 1.0 
08 Raw hides and skins, leather, and 
its products  130 5.1 0-15 23.1 0.0 1.1 
09 Wood and articles of wood  234 0.5 0-5 86.3 0.0 2.8 
10 Pulp of wood, paper and 
paperboard  195 0.0 0-1 99.5 0.0 13.9 
11 Textiles and textile articles  1,147  5.4 0-10 4.1 0.0 0.8 
12 Footwear, headgear, etc.  106 5.6 0-12 1.9 0.0 0.4 
13 Articles of stone, plaster, cement  234 4.6 0-10 4.7 0.0 0.6 
14 Precious stones and metals, 
pearls  56 3.9 0-20 7.1 0.0 0.9 
15 Base metals and articles thereof  953 1.9 0-10 71.5 0.0 1.8 
16 Machinery, electrical equipment, 
etc. 1,370  1.8 0-15 38.7 0.0 1.3 
17 Transport equipment  286 1.6 0-8 40.9 0.0 1.2 
18 Precision equipment  313 1.4 0-10 45.4 0.0 1.4 
19 Arms and ammunition  22 15.0 15.0 0.0 0.0 0.0 
20 Miscellaneous manufactured 
articles  214 5.2 0-15 33.2 0.0 0.8 
21 Works of art, etc.  7 5.0 5.0 0.0 0.0 0.0 
Note:  Ad valorem  equivalents (AVEs) were estimated based on 2016 import data for 2017 tariff at the 
national tariff line level (8 -digit). In case s of no trade flow of tariff lines subject to non -ad valorem  
rates, the ad valorem  ceiling of the compound rate is used.  
Source:  WTO Secretariat calculations, based on WTO IDB.  WT/TPR/S/369 • Montenegro  
 
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  Table A3. 2 Applied MFN tariffs exceeding bound rates, 2017  
HS code at the 8 -digit level and product descriptiona 2017 
duty rate 
(%) Current 
bound duty 
rate (%)  End of 
implementation 
period  
HS 0207 Meat and edible offal, of the poultry of 
heading 01.05, fresh, chilled or frozen     
     02074120  11.7 11.5 2022 
     02074130  11.7 11.5 2022 
     02074180  11.7 11.5 2022 
     02074230  11.7 11.5 2022 
     02074280  11.7 11.5 2022 
     02075110  11.7 11.5 2022 
     02075190  11.7 11.5 2022 
     02075210  11.7 11.5 2022 
     02075290  11.7 11.5 2022 
HS 030273 Carp     
     03027300  10 8.0  
HS 030368 Blue whitings (Micromesistius poutassou, 
Micromesistius australis)     
     03036810  10 7.5  
HS 0304 Fish fillets and other fish meat, fresh, chilled 
or frozen     
     03043100  15 10.0  
     03043200  15 10.0  
     03043300  15 10.0  
     03043900  15 10.0  
     03045100  8.5 8.0  
     03045200  8.5 8.0  
     03046100  11.2 10.0  
     03046200  11.2 10.0  
     03046300  11.2 10.0  
     03048100  8.4 2.0  
HS 071310 Peas (Pisum sativum)     
     ex 07131090  3 0.0  
HS 160417 Eels     
     16041700  15 10.0  
HS 480550 Felt paper and paperboard     
     48055000  1 0.0  
HS 710691 Silver - - Unwrought     
     71069100  5 3.0  
HS 722410 Ingots and other primary forms     
     72241010  2.4 0.0  
     72241090  2.4 0.0  
HS 847210 Other office machines; duplicating 
machines     
     84721000  0.7 0.0  
HS 850490 Electrical transformers, static converters 
and inductors; parts     
     85049011  0.7 0.0  
     85049018  0.7 0.0  
     85049099  0.7 0.0  
HS 8517 Telephone sets, including telephones for 
cellular networks or for other wireless networks     
     ex 85176930  2 0.0  
     ex 85177000  0.7 0.0  
HS 852110 Video recording or reproducing 
apparatus; magnetic tape -type    
     ex 85211020  3.3 0 or 6   
     ex 85211095  3.3 0 or 2.5   WT/TPR/S/369 • Montenegro  
 
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  HS code at the 8 -digit level and product descriptiona 2017 
duty rate 
(%) Current 
bound duty 
rate (%)  End of 
implementation 
period  
HS 8523 Discs, tapes, solid -state non -volatile storage 
devices     
     85232100  2.3 0.0  
     ex 85232919  2.3 0.0  
     85232990  2.3 0.0  
     ex 85234990  2.3 0.0  
     ex 85235190  2.3 0.0  
     ex 85235990  2.3 0.0  
     ex 85238090  2.3 0.0  
HS 8527 Reception apparatus for radio -broadcasting; 
not combined with sound recording or reproducing 
apparatus but combined with a clock     
     85279210  2 1.5 2019 
HS 8536 Electrical apparatus for switching or 
protecting electrical circuits; other apparatus for 
protecting electrical circuits     
     85363010  0.7 0.0  
     85363030  0.7 0.0  
     85363090  0.7 0.0  
HS 8538 Boards, panels, consoles, desks, cabinets, 
etc., not equipped with their apparatus     
     85381000  0.7 0.0  
HS 900120 Sheets and plates of polarising material     
     90012000  0.7 0.0  
HS 901420 Instruments and appliances for 
aeronautical or space navigation     
     ex 90142020  1 0 or 1.9   
     ex 90142080  1 0 or 1.9  2019 
HS 901510 Rangefinders     
     90151090  0.7 0.0  
HS 901520 Theodolites and tachymeters 
(tacheometers)     
     90152090  0.7 0.0  
HS 901540 Photogrammetrical surveying instruments 
and appliances     
     90154090  1 0.0  
HS 901590 Parts and accessories     
     90159000  0.7 0.0  
HS 9022 Apparatus based on the use of X -rays or of 
alpha, beta or gamma radiations     
     90222900  0.7 0.0  
     90223000  0.7 0.0   
a  No product descriptions are available at the national tariff line level; thus the WCO product 
description at either 4 - or 6-digit level are used.  
Note:  About 17% of tariff lines could not be compared due to HS changes in nomenclature as well as 
changes in the structure of  the tariff schedule.  
Source:  WTO calculations, based on data provided by the authorities of Montenegro; and WTO CTS database.  WT/TPR/S/369 • Montenegro  
 
- 169 - 
 
  Table A3 .3 Tariff rate quotas, 2013 -16  
(a) Allocations  
HS Description  No. of tariff lines 
(8-digit level)  
 European Union  149 
0207 Meat and edible offal, of poultry  11 
0301 Live fish  3 
0302 Fish, fresh or chilled  5 
0303 Fish, frozen  5 
0304 Fish fillets and other fish meat  10 
0305 Fish, dried, salted or in brine  8 
0406 Cheese and curd  8 
1602 Other prepared or preserved meat, meat offal or blood  10 
1604 Prepared or preserved fish  17 
2201 Waters, including natural or artificial mineral waters and aerated 
waters  4 
2202 Waters, including mineral waters and aerated waters, containing 
added sugar or other sweetening matter or flavoured, and other 
non-alcoholic beverages  8 
2204 Wine of fresh grapes, including fortified wines  60 
 Turkey  1 
0813 Fruit, dried  1 
(b) Fill-in ratios, 2012 -16 
Date -
from  Date - 
until Description  Trading 
partner  Initial 
state of 
the quota  Quota status 
on 31.12 
(9 Oct. 2017 
for 2017)  Fill-in 
ratio 
(%) Unit of 
measure  
2012         
1.1.2012  31.12.2012  Fruit, dried, apricot  Turkey  10,000  6,920.00  30.80  litre 
2013         
1.1.2013  31.12.2013  Fish EU 20,000  20,000.00  0.00 kg 
1.1.2013  31.12.2013  Fish EU 20,000  18,336.96  8.32 kg 
1.1.2013  31.12.2013  Fish EU 20,000  9.34 99.95  kg 
1.1.2013  31.12.2013  Fish EU 20,000  19,356.20  3.22 kg  
1.1.2013  31.12.2013  Fish EU 10,000  10,000.00  0.00 kg 
1.1.2013  31.12.2013  Wine EU 3,500,000  3,280,893.25  6.26 litre 
1.1.2013  31.12.2013  Fruit, dried, apricot  Turkey  100,000  86,480.00  13.52  kg 
1.7.2013  31.12.2013  Meat of poultry  EU 250,000  105.08  99.96  kg 
1.7.2013  31.12.2013  Cheese and urda  EU 32,500  0.09 100.00  kg 
1.7.2013  31.12.2013  Meat, prepared or 
preserved  EU 65,000  0.47 100.00  kg 
1.7.2013  31.12.2013  Prepared fish, caviar  EU 37,500  25,426.35  32.20  kg 
1.7.2013  31.12.2013  Prepared fish, caviar  EU 15,000  236.10  98.43  kg 
1.7.2013  31.12.2013  Water, natural, 
carbonated  EU 120,000  0.00 100.00  litre 
1.7.2013  31.12.2013  Water, natural, 
aerated, sugar free  EU 215,000  6,096.50  97.16  litre 
1.7.2013  31.12.2013  Water, natural, 
aerated, sugar free  EU 405,000  0.00 100.00  litre 
1.7.2013  31.12.2013  Prepared fish, caviar  EU 100,000  2,658.55  97.34  kg 
2014         
1.1.2014  31.12.2014  Fish EU 20,000  19,994.00  0.03 kg 
1.1.2014  31.12.2014  Fish EU 20,000  17,598.83  12.01  kg 
1.1.2014  31.12.2014  Fish EU 20,000  0.64 100.00  kg 
1.1.2014  31.12.2014  Fish EU 200,000  0.08 100.00  kg 
1.1.2014  31.12.2014  Fish EU 10,000  9,015.75  9.84 kg 
1.1.2014  31.12.2014  Wine EU 350,000  87,481.79  75.01  litre WT/TPR/S/369 • Montenegro  
 
- 170 - 
 
  Date -
from  Date - 
until Description  Trading 
partner  Initial 
state of 
the quota  Quota status 
on 31.12 
(9 Oct. 2017 
for 2017)  Fill-in 
ratio 
(%) Unit of 
measure  
1.1.2014  31.12.2014  Fruit, dried, apricot  Turkey  100,000  82,217.60  17.78  kg 
1.1.2014  31.12.2014  Meat of poultry  EU 500,000  0.00 100.00  kg 
1.1.2014  31.12.2014  Cheese and urda  EU 65,000  0.00 100.00  kg 
1.1.2014  31.12.2014  Meat, prepared or 
preserved  EU 130,000  0.50 100.00  kg 
1.1.2014  31.12.2014  Prepared fish, caviar  EU 75,000  2.01 100.00  kg 
1.1.2014  31.12.2014  Prepared fish, caviar  EU 30,000  173.80  99.42  kg 
1.1.2014  31.12.2014  Water, natural, 
carbonated  EU 240,000  0.00 100.00  litre 
1.1.2014  31.12.2014  Water, natural, 
aerated, sugar free  EU 430,000  0.59 100.00  litre 
1.1.2014  31.12.2014  Water, natural, 
aerated, sugar free  EU 810,000  2.72 100.00  litre 
2015         
1.1.2015  31.12.2015  Fish EU 20,000  20,000.00  0.00 kg 
1.1.2015  31.12.2015  Fish EU 20,000  18,817.35  5.91 kg 
1.1.2015  31.12.2015  Fish EU 20,000  1.43 99.99  kg 
1.1.2015  31.12.2015  Fish EU 200,000  4,063.11  97.97  kg 
1.1.2015  31.12.2015  Fish EU 10,000  9,187.50  8.13 kg 
1.1.2015  31.12.2015  Wine EU 350,000  257.91  99.93  litre 
1.1.2015  31.12.2015  Fruit, dried, apricot  Turkey  100,000  89,215.00  10.79  kg 
1.1.2015  31.12.2015  Meat of poultry  EU 500,000  0.00 100.00  kg 
1.1.2015  31.12.2015  Cheese and urda  EU 65,000  0.00 100.00  kg 
1.1.2015  31.12.2015  Meat, prepared or 
preserved  EU 130,000  0.00 100.00  kg 
1.1.2015  31.12.2015  Prepared fish, caviar  EU 75,000  68.36  99.91  kg 
1.1.2015  31.12.2015  Prepared fish, caviar  EU 30,000  170.65  99.43  kg 
1.1.2015  31.12.2015  Water, natural, 
carbonated  EU 240,000  268.26  99.89  litre 
1.1.2015  31.12.2015  Water, natural, 
aerated, sugar free  EU 430,000  0.46 100.00  litre 
1.1.2015  31.12.2015  Water, natural, 
aerated, sugar free  EU 810,000  8.65 100.00  litre 
2016         
1.1.2016  31.12.2016  Fish EU 20,000  20,000.00  0.00 kg 
1.1.2016  31.12.2016  Fish EU 20,000  17,687.00  11.57  kg 
1.1.2016  31.12.2016  Fish EU 20,000  0.00 100.00  kg 
1.1.2016  31.12.2016  Fish EU 200,000  0.62 100.00  kg 
1.1.2016  31.12.2016  Fish EU 10,000  8,208.13  17.92  kg 
1.1.2016  31.12.2016  Wine EU 350,000  0.96 100.00  litre 
1.1.2016  31.12.2016  Fruit, dried, apricot  Turkey  100,000  65,225.00  34.78  kg 
1.1.2016  31.12.2016  Meat of poultry  EU 500,000  0.00 100.00  kg 
1.1.2016  31.12.2016  Cheese and urda  EU 65,000  0.00 100.00  kg 
1.1.2016  31.12.2016  Meat, prepared or 
preserved  EU 130,000  0.96 100.00  kg 
1.1.2016  31.12.2016  Prepared fish, caviar  EU 75,000  0.13 100.00  kg 
1.1.2016  31.12.2016  Prepared fish, caviar  EU 30,000  23.26  99.92  kg 
1.1.2016  31.12.2016  Water, natural, 
carbonated  EU 240,000  9.36 100.00  litre 
1.1.2016  31.12.2016  Water, natural, 
aerated, sugar free  EU 430,000  327,370.24  23.87  litre 
1.1.2016  31.12.2016  Water, natural, 
aerated, sugar free  EU 810,000  0.20 100.00  litre WT/TPR/S/369 • Montenegro  
 
- 171 - 
 
  Date -
from  Date - 
until Description  Trading 
partner  Initial 
state of 
the quota  Quota status 
on 31.12 
(9 Oct. 2017 
for 2017)  Fill-in 
ratio 
(%) Unit of 
measure  
2017         
1.1.2017  31.12.2017  Fish EU 20,000  20,000.00  0.00 kg 
1.1.2017  31.12.2017  Fish EU 20,000  20,000.00  0.00 kg 
1.1.2017  31.12.2017  Fish EU 20,000  1.01 99.99  kg 
1.1.2017  31.12.2017  Fish EU 200,000  1,358.08  99.32  kg 
1.1.2017  31.12.2017  Fish EU 10,000  8,550.15  14.50  kg 
1.1.2017  31.12.2017  Wine EU 350,000  0.35 100.00  litre 
1.1.2017  31.12.2017  Fruit, dried, apricot  Turkey  100,000  87,175.00  12.83  kg 
1.1.2017  31.12.2017  Meat of poultry  EU 500,000  71.03  99.99  kg 
1.1.2017  31.12.2017  Cheese and urda  EU 65,000  0.00 100.00  kg 
1.1.2017  31.12.2017  Meat, prepared or 
preserved  EU 130,000  0.89 100.00  kg 
1.1.2017  31.12.2017  Prepared fish, caviar  EU 75,000  0.02 100.00  kg 
1.1.2017  31.12.2017  Prepared fish, caviar  EU 30,000  18.24  99.94  kg 
1.1.2017  31.12.2017  Water, natural, 
carbonated  EU 240,000  0.00 100.00  litre 
1.1.2017  31.12.2017  Water, natural, 
aerated, sugar free  EU 430,000  389,176.00  9.49 litre 
1.1.2017  31.12.2017  Water, natural, 
aerated, sugar free  EU 810,000  2.85 100.00  litre 
Source:  WTO Secretariat calculations, based on WTO IDB; and information provided by the authorities.  
 
  
  WT/TPR/S/369 • Montenegro  
 
- 172 - Table A4. 1 Selected agricultural products by simpl e tariff averages (tariff range)  
(%) 
 
Applied MFN  
EU 
EFTA -Iceland 
EFTA -Norway  
EFTA -CHE/LIE  
Turkey  
LDCs  
Russia  
Ukraine  
CEFTA  
Note (HS code)  
Livestock, milk and eggs   
Cattle  20 (0 -30) 0 20 (0 -30) 20 (0 -30) 9 (0-30) 20 (0 -30) 0 0 0 0 010221, 010229  
Sheep  22.9 (0 -38.7)  11.4 (0 -19.3)  22.9 (0 -38.7)  22.9 (0 -38.7)  11.4 (0 -19.3)  22.9 (0 -38.7)  0 0 0 0 010410  
Goats  15 (0 -30) 7.5 (0 -15) 15 (0 -30) 15 (0 -30) 7.5 (0 -15) 15 (0 -30) 0 0 0 0 010420  
Swine/Pigs  10.8 (0 -15) 0 3.3 (0 -10) 10.8 (0 -15) 0 10.8 (0 -15) 0 0 0 0 010310, 010391, 
010392  
Poultry  9.2 (0 -15) 0 9.2 (0 -15) 9.2 (0 -15) 9.2 (0 -15) 9.2 (0 -15) 0 0 0 0 010511, 010512, 
010513, 010514, 
010515, 010594, 
010599  
Horses  1.7 (0 -5) 0 0 1.7 (0 -5) 0 1.7 (0 -5) 0 0 0 0 010121, 010129  
Milk 29.3 (20 -50) 14.7 (10 -25) 29.3 (20 -50) 29.3 (20 -50) 14.7 (10 -25) 29.3 (20 -50) 0 0 0 0 040110, 040120, 
040140, 040150  
Eggs 21.7 (5-30) 0 21.7 (5 -30) 21.7 (5 -30) 21.7 (5 -30) 21.7 (5 -30) 0 0 0 0 040711, 040719, 
040721, 040729, 
040790  
Fruit             
Plums  20 10 20 20 20 20 0 0 0 0 08094005  
Apples  10 5 10 10 5 10 0 0 0 0 080810  
Pears  10 5 10 10 5 10 0 0 0 0 080830  
Peaches  26.3 (20-32.5)  13.1 (10 -16.3)  26.3 (20 -32.5)  26.3 (20 -32.5)  26.3 (20 -32.5)  26.3 (20 -32.5)  0 0 0 0 080930  
Tangerines  32.5 16.25  32.5 32.5 32.5 32.5 32.5 0 0 0 08052190  
Olives  20 0 20 20 10 20 0 0 0 0 070992  
Cereals             
Wheat  0 0 0 0 0 0 0 0 0 0 100111, 100119, 
100191, 100199  
Rye 0 0 0 0 0 0 0 0 0 0 100210, 100290  
Barley  0 0 0 0 0 0 0 0 0 0 100310, 100390  
Oats 0 0 0 0 0 0 0 0 0 0 100410, 100490  
Corn 0 0 0 0 0 0 0 0 0 0 100510, 100590   
  WT/TPR/S/369 • Montenegro  
 
- 173 -  
Applied MFN  
EU 
EFTA -Iceland 
EFTA -Norway  
EFTA -CHE/LIE  
Turkey  
LDCs  
Russia  
Ukraine  
CEFTA  
Note (HS code)  
Vegetables             
Onion  12.5 (10 -15) 0 12.5 (10 -15) 12.5 (10 -15) 12.5 (10 -15) 12.5 (10 -15) 0 0 0 0 07031011, 
07031019  
Tomatoes  40 20 40 40 40 40 0 0 0 0 070200  
Paprika  5 0 5 5 5 5 0 0 0 0 090421, 090422  
Melon  15 0 15 15 15 15 0 0 0 0 080719  
Watermelon  32.5 16.25  32.5 32.5 32.5 32.5 0 0 0 0 080711  
Cucumber  20 10 20 20 20 20 0 0 0 0 07070005  
Beans  20 0 20 20 20 20 0 0 0 0 070820  
Cabbage  20 10 20 20 20 20 0 0 0 0 07049010  
Potato  13.1 (7.5 -15) 7.5 13.1 (7.5 -15) 13.1 (7.5 -15) 7.5 13.1 (7.5 -15) 0 0 0 0 070110, 070190  
Grape production on plantations   
Grape  32.5 16.25  32.5 32.5 32.5 32.5 32.5 0 0 0 080610  
Source:  WTO Secretariat calculations, based on WTO IDB.  
__________