WT/REG236/R/I  
 
24 October 2016  
(16-5803) Page: 1/8 
Committee on Regional Trade Agreem ents    
 
EU-MONTENEGRO IMPLEMENT ATION REPORT  
JOINT SUBMISSION BY THE PARTIES ON THE S TABILISATION AND ASS OCIATION 
AGREEMENT BETWEEN MO NTENEGRO AND THE EU  
 
 This Implementation Report has been drafted in accordance with Article 15 of the 
Transparency Mechanism Deci sion and following the draft guidelines contained in JOB/REG/4 
issued in January 2013.  
 
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1  BACKGROUND INFORMATI ON ON THE AGREEMENT  
1.1.  All countries of the Western Balkans have a European perspective. The European perspective 
of the Western Balk an countries and territories  was recogniz ed during the Feira European Council 
in 2000 and confirmed by the Thessaloniki European Council in 2003. This European perspective1 
is integrated into the Stabilisation and Association Process, which is the EU's pol icy in relation to 
the countries of the Western Balkans.  
1.2.  The Stabilisation and Association Agreements (SAAs), which the EU has progressively 
concluded with the countries and territories of the Western Balkans, are tools which provide for the 
economic devel opment and political stabilisation of the countries in the region, and for the creation 
of a close, long -term association between the EU and the Western Balkans. The SAAs constitute 
the legal instrument for alignment1 to the EU acquis and progressive integ ration into the EU 
market.  
1.3.  The Stabilisation and Association Agreement (SAA) between the EU and Montenegro was 
signed on 15 October 2007. With reference to trade in goods, it was complemented by an Interim 
Agreement that entered into force on 1 January 200 8 to allow the EU and Montenegro to benefit 
from the trade and trade -related provisions until the entry into force of the Stabilisation and 
Association Agreement on 1 May 2010. After the last enlargement, the new EU Member State 
(Croatia) became contractin g party in 2013.  
1.4.  The SAA contains provisions on both goods and services. The relevant aspects of the SAA for 
the liberalization of trade in services are contained in Title V (Movement of Workers, 
Establishment, Supply of Services, Current Payments and Move ment of Capital). The last version 
of the consolidated text of the SAA, following Croatia's EU accession, is the following one:  
                                                
1 Each year the Commission adopts its "Enlargement p ackage" - a set of documents explaining its policy 
on EU enlargement. Most importantly, this package includes the Enlargement Strategy Paper which sets out 
the way forward and takes stock of the progress made by each candidate country and potential candida te. In 
addition to this strategy paper, the package contains the Reports in which the Commission services present 
their assessment of what each candidate and potential candidate has achieved over the last year, and set out 
guidelines on reform priorities.  WT/REG236/R/I  
 
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   http://eur -lex.europa.eu/legal -
 content/EN/TXT/?qid=1474016437229&uri=CELEX:02010A0429(01) -20150201  
1.5.  Statistical data on trade in goods and on trade in services between the Parties as well as 
some indications on Parties' import coverage after full implementation of t he SAA can be found in 
Annexes 1 and 2 of this report.  
2  PROVISIONS ON TRADE IN GOODS  
2.1  Import duties and charges, and quantitative restrictions  
2.1.  The Tariff Elimination Schedules between Montenegro and EU have been completed over a 
transitional period of a max imum of five years. More specifically, imports into the EU of all 
industrial and most agricultural goods (with the exception of baby beef, sugar and wine) 
originating in Montenegro  were totally liberaliz ed from the entry into force of the Agreement. Only 
imports into the EU of some fishery products originating in Montenegro were subject to a tariff 
reduction over a period of three years (Annex IV).  
2.2.  Imports into Montenegro of industrial products orig inating in the EU were liberaliz ed from the 
entry into forc e of the Agreement except for goods listed in Annex I.A  which were liberaliz ed over 
a period of three years and goods listed in Annex I.B which were liberali zed over a period of five 
years. Agricultural (Annex III) and processed agricultural products (Prot ocol 1)  were subject to a 
liberaliz ation period of five years while the fishery p roducts (Annex V) were liberaliz ed over a 
slightly shorter period of three years (four years for one tariff line).  
2.3.   In addition, some goods as explained further below were sub ject to Tariff Rate Quotas and 
some of them excluded of any tariff preferences.  
2.4.  During this implementation period, no change was made to the original liberalization 
schedules.  
2.1.1   Tariffs  
2.5.  Please refer to Annexes I to V of the Agreement:  
 EU's tariff eliminati on schedule:  
The tariffs have been abolished upon the entry into force of this Agreement on industrial 
products origination in Montenegro. (Articles 26 (EU concessions on Agriculture products) 
and 29 and Annex IV (EU concessions on fishery products))  
 
 for Montenegro's tariff elimination schedule:  
The tariffs have been abolished upon the entry into force of this Agreement on industrial 
products origination in the EU with the exceptions of the products listed in Annex I.A and 
I.B. (Articles 27 and Annexes II I(a), (b) and (c) (Montenegrin concession on Agriculture 
products); Article 30 and Annex V and Annex V(a) (Montenegrin concessions on fishery 
products))  
2.1.2   Tariff quotas  
2.6.  The tariff rate quotas that are in place under the Agreement are applied in accordance w ith 
the conditions mentioned in Article 26, Annexes III(d), Annexes IV, V, Annex IIa to Protocol 1 and 
Annex I to Protocol 2 of the Agreement. These quotas are managed on a first -come first -served 
basis.  
2.7.  The EU maintains tariff -rate quotas on baby -beef an d some fishery products. 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.  WT/REG236/R/I  
 
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  2.8.  Since the entry int o force of the Agreement, there were no particular issues to report on and 
no changes were made to the Agreement in this area. The Agreement has been amended to take 
into account the last enlargement of the EU in 2013.  
2.1.3   Products excluded from liberalization  
2.9.  In the Agreement, the EU has liberali zed all trade with Montenegro with the exception of 
sugar.  
2.10.   In Montenegro's schedule of concessions, a number of tariff lines are excluded from tariff 
concessions, in particular dairy spreads and some lines of mineral water.  
2.1.4   Final tariff schedule applied by RTA parties  
2.11.   Final data to be found in the EC -IDB submission 2016, provided to the WTO Secretariat in 
March 2016.  
2.2  Export duties and charges, and quantitative restrictions  
2.12.   Under the Agreement, the Parties have abolishe d any export duties and charges, and 
quantitative restrictions in accordance with Articles 22 and 36 of the Agreement.  
2.3  Regulatory provisions on trade in goods  
2.3.1   Rules of origin  
2.13.   The Rules of Origin applied under the Agreement are set out in its Protocol 3 wh ich was 
replaced on 1 February 2015 in order to be modelled on the Pan -European regime of diagonal 
cumulation of origin.  
2.3.2   Standards  
2.14.   The Agreement foresees a gradual approximation of Montenegro's legislation with the EU 
acquis –including standards and certif ication - within a five -year transition period.  
2.3.3   Trade defence instruments  
2.15.   The Parties have not applied any measure using the mechanisms established under the 
Agreement.  
3  PROVISIONS ON TRADE IN SERVICES  
3.1  Commitments  
3.1.  The provisions related to trade in service s (Title V of the Agreement, Annex VI, containing a 
list of financial services, and Protocol 4, that details the rules applicable to land transport services) 
entered into force on 1 May 2010 and cover all the four modes of supply, including movement of 
workers, establishment, supply of services and current payments and movement of capital.  
3.2.  The only excluded sectors are: air transport services; inland waterways transport services 
and maritime cabotage services.  
3.3.  The structure of the Agreement follows neither a typical "negative" nor "positive" list 
approach. Its structure reflects one of its main objectives, that is, the approximation of 
Montenegro's legislation to that of the EU.  
3.2  Regulatory provisions  
3.4.  There is no provision per se  in the Agreement on domesti c regulation in line with GATS 
Article  VI. However, the approximation process also covers measures governed by GATS Article VI.  WT/REG236/R/I  
 
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  3.3  Cooperation  
3.5.  The Parties have undertook cooperation policies on a broad range of activities: including 
economic and trade polic y; statistics; banking, insurance and other financial services; audit and 
financial control; investment promotion and protection; industrial cooperation; small and 
medium -sized enterprises; tourism; agriculture and the agro -industrial sector; fisheries; cu stoms; 
taxation, social and cultural cooperation. Specific services sectors mentioned in the Title on 
Cooperation include education and training, audio -visual, electronic communications networks and 
services, transport, energy, environment, and research an d technological development.  
3.6.  For example, in November 2015, the Commission adopted a new cross -border cooperation 
programme for Croatia, Bosnia and Herzegovina and M ontenegro worth around €67 million, with 
€57 million coming from the European Regional Development Fund and the Instrument for 
Pre-Accession Assistance. The programme aims to improve the quality of common public services 
in the region, to promote the devel opment of sustainable tourism activities and to boost the 
competitiveness of local businesses.  
3.7.  Title IX of the Agreement addressees Financial Cooperation under which Montenegro may 
receive financial assistance from the EU in the forms of grants and loans, including loans from the 
European Investment Bank.  
Table 3.1 Indicative allocations (millions EUR) per policy area and sectors  
Montenegro  -2014 - -2015 - -2016 - -2017 - 2018 -2020  Total   
2014 -2020  
Democracy and governance  29.1 17.8 46.9 
Rule of law and fundamental rights  31.6 20.7 52.3 
Environment and climate action  18.8 18.7 37.5 
Transport  20.2 11.8 32.1 
Competitiveness and innovation  12.3 8.9 21.2 
Education, employment and social 
policies  15.3 12.8 28.1 
Agriculture and rural development  24.7 27.7 52.4 
TOTAL  35.9 35.6 37.5 39.6 118.5  270.5  
Note:  Please note that the figures included in the table are indicative and that actual annual allocations 
might  be subject to changes of the total and/or sector amounts.  
 
4  OTHER PROVISIONS IN THE AGREEMENT  
4.1  Sector -specific provisions on iron and steel products  
4.1.  The Agreement contains special derogations on competition and other economic provisions; 
in particular, as  an exception, during the first five years after the date of entry into force of the 
Agreement, Montenegrin producers could receive State -aid for restructuring under certain 
conditions.  
4.2.  During the implementatio n period, Montenegrin steel company Željezara benefited from 
several State support measures – two loan guarantees, severance payments for the steel mill's 
redundant workers and other restructuring support. These measures were granted within a 
restructuring  plan, which was approved by the State Aid Control Commission of Montenegro on 
3 February 2010. However, the plan as such has not been implemented because Željezara went 
into bankruptcy on 15 April 2011.  
4.2  Stabilisation and Association Council  
4.3.  The Parties h ave established the Stabilisation and Association Council and Committee and 
Council that meet on a regular basis, once a year. The main activities of these institutional bodies 
consist of supervising the application and implementation of the Agreement, exa mining any major 
issues arising and any other bilateral or international issues of mutual interest.  WT/REG236/R/I  
 
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  4.3  Dispute settlement  
4.4.  The Agreement does not contain a fully -fledged dispute settlement mechanism but rather 
includes a possibility for each Party to refer to  the Stabilisation and Association Council any dispute 
relating to the application or interpretation of the Agreement. The Stabilisation and Association 
Council may settle the dispute by means of a binding decision; the Parties have not made use of 
this me chanism.  WT/REG236/R/I  
 
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  ANNEX 1  
STATISTICS ON TRADE IN GOODS  
Table A1. 1 - EU(28): Imports from Montenegro (million €)   
Year Total  Agricultural products*  Non-agricultural products*  
2009  171.6  7.0 163.3  
2010  185.5  5.9 178.2  
2011  224.8  7.1 216.6  
2012  298.3  6.5 291.0  
2013  188.4  6.5 180.5  
2014  251.2  7.9 242.2  
2015  144.1  7.5 136.1 
*WTO definition.  
Source:  EUROSTAT (Comext).  
 
Table A1. 2 - Montenegro: Imports from the EU 28 (million €)  
Year Total  Agricultural products*  Non-agricultural products*  
2009  701.5  116.7  584.8  
2010  705.4  117.7  587.7  
2011  807.1  136.9  670.2  
2012  809.9  148.4  661.5  
2013  784.2  158.4  625.8  
2014  816.6  197.5  619.1  
2015  759.8  163.7  596.1  
*WTO definition.  
Source data:  Monstat.  
 
Table A1. 3 - EU(28) import coverage after full implementa tion of the Agreement  
Coverage  2008  2009  2010  2011  2012  2013  2014  
% of tariff lines  97.6%  97.5%  97.4%  97.2%  97.5%  97.5%  97.5%  
% of imports  99.8%  99.4%  99.7%  99.7%  99.8%  99.6%  99.7%  
Note:   
Line coverage (% tariff lines)  is calculated as duty -free quota -free EU(28) tariff lines on imports from 
Montenegro divided by total EU(28) tariff lines on imports from Montenegro.  
Trade coverage (% imports ) is calculated as duty -free quota -free EU(28) imports from Montenegro divided by 
total EU(28) imports from Montene gro, equal to EU's "substantially all trade" (SAT) definition.  
For calculation of the coverage rates the preferential tariffs in force on 1 January of the indicated years has 
been used.  
Source:  EUROSTAT (Comext).  WT/REG236/R/I  
 
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  ANNEX 2  
STATISTICS ON TRADE IN SERVICES  
Table A2. 1 - Foreign direct investments EU(28) – From the EU to Montenegro   
Year Million Euro  Year-on-year growth %  
Stocks  Flows  Stocks  Flows  
Inward  Outward  Inward  Outward  Inward  Outward  Inward  Outward  
2010  184.0  1,233.0  183.0 -37.0 1,740%  50% 1,407%  69% 
2011  4.0 1,441.0  -177.0  87.0 -98% 17% -197%  335%  
2012  8.0 1,251.0  -2.0 72.0 100%  -13% 99% -17% 
2013  13.9 1,801.6  11.5 98.7 74% 44% 675%  37% 
2014  2.5 1,823.7  -4.9 125.5  -82% 1% -143%  27% 
Source:  Eurostat.  
 Prepared by DG  Trade - Chief Economist Unit - Statistics sector.  
 
Chart A2. 1 - EU(28) and Montenegro: Bilateral Foreign Direct Investments (FDI) stocks 
(million €)  
 
Source:  Eurostat.  
 Prepared by DG Trade - Chief Economist Unit - Statisti cs sector.  
 
Table A2. 2 - EU(28) trade in services with Montenegro (million €)  
 2010  2011  2012  2013  2014  
Debits (Imports)  
Current account, Services  149.7  165.3  232.6  220.8  210.3  
Credits (Exports)  
Current account, Servic es  257.2  292.1  382.3  215.7  294.1  
Net (Balance)  
Current account, Services  107.5  126.9  149.7  -5.1 83.8 
Services excluding Government services, n.i.e.  
Source:  Eurostat.  
 Prepared by DG Trade - Chief Economist Unit - Statistics sector.  WT/REG236/R/I  
 
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  Table A2. 3 FDI Flows o f Montenegro with EU(28) (million €)  
Year*  Inward  Outward  
2010  3.81 18.91  
2011  204.92  -9.45 
2012  219.66  20.64  
2013  79.76  11.05  
2014  118.19  14.89  
*For period 2010 -2013 data with Croatia.  
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