RESTRICTED  
  
WT/TPR/G/369  
7 March 2018  
(18-1403) Page: 1/35 
Trade Policy Review Body   Original: English  
 
TRADE POLICY REVIEW  
REPORT BY  
MONTENEGRO  
Pursuant to the Agreement Establishing the Trade Policy Review Mechanism (Annex 3 of the 
Marrakesh Agreement Establishing the World Trade Organization), the policy statement by 
Montenegro  is attached.  
 
 
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 . WT/TPR/G/369 • Montenegro  
 
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  Contents  
1   INTRODUCTION  ................................ ................................ ................................ ..........  4 
2   ECONOMIC POLICIES  ................................ ................................ ................................ .. 4 
2.1   Macroeconomic developments in the Montenegrin economy in the period 2012 -2016 ...........  4 
2.1.1    Latest economic developments  ................................ ................................ ...................  4 
2.1.2    Projections of macroeconomic trends for the period 2018 -2020 (real sector)  ....................  5 
2.2   Tax system  ................................ ................................ ................................ .................  6 
2.3   Structural reforms  ................................ ................................ ................................ ....... 7 
2.4   Justice reform system  ................................ ................................ ................................ .10 
2.5   Privatization  ................................ ................................ ................................ ............... 10 
2.6   Investment policy  ................................ ................................ ................................ .......11 
2.6.1    Incentive programmes available to investors  ................................ ............................... 12 
2.7   Competition policy  ................................ ................................ ................................ ......13 
2.8   Public Procurement  ................................ ................................ ................................ .....14 
3   TRADE POLICY  ................................ ................................ ................................ ..........  14 
3.1   Small and medium enterprises (SMEs)  ................................ ................................ .......... 14 
3.2   Trade in goods  ................................ ................................ ................................ ........... 15 
3.3   Industry – Manufacturing industry  ................................ ................................ ................ 15 
3.4   Energy  ................................ ................................ ................................ ...................... 16 
3.5   Mineral re sources of Montenegro  ................................ ................................ .................. 17 
3.5.1    Exploration and Production of Hydrocarbons (Oil & Gas)  ................................ ............... 18 
3.6   Agriculture, fishery and forestry  ................................ ................................ ................... 18 
3.6.1    Agriculture  ................................ ................................ ................................ .............. 18 
3.6.2    Fishery  ................................ ................................ ................................ ................... 20 
3.6.3    Forestry  ................................ ................................ ................................ .................. 21 
3.7   Customs system  ................................ ................................ ................................ ......... 21 
3.8   Sanitary and Phytosanitary Measures  ................................ ................................ ............ 23 
3.9   Technical regulations and standards  ................................ ................................ .............. 24 
3.10   Trade in services  ................................ ................................ ................................ ......24 
3.10.1    Tourism  ................................ ................................ ................................ ................ 25 
3.10.2    Transport  ................................ ................................ ................................ .............. 26 
3.10.3    Banking sector  ................................ ................................ ................................ .......28 
3.10.4   Insurance  ................................ ................................ ................................ ............. 29 
3.10.5    Electronic communications  ................................ ................................ ...................... 30 
3.10.6    Postal services  ................................ ................................ ................................ .......31 
3.11   Intellectual property rights  ................................ ................................ ......................... 31 
4   OBJECTIVES AND DEVEL OPMENT OF TRADE POLI CY ................................ .................  32 
4.1   WTO negotiations  ................................ ................................ ................................ .......32 
4.1.1    Agreement on Trade Facilitation (TFA)  ................................ ................................ ........ 32 
4.2   Process of Montenegro's accession to the EU  ................................ ................................ ..32 WT/TPR/G/369 • Montenegro  
 
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  4.3   Regional integration  ................................ ................................ ................................ ....35 
4.3.1    Agreement on Amendment of and Accession to the Central European Free T rade 
Agreement – CEFTA 2006  ................................ ................................ ................................ ...35 
 
 
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  1  INTRODUCTION  
1.1.  Government of Montenegro applied for membership of the WTO on 23 December 2004, in 
line with Article XII of the  Marrakesh Agreement Establishing the WTO. The General Council 
established Working Party (WP) on accession of Montenegro on 15 February 2005. The WP 
adopted the Report on its work and made the recommendation on accession of Montenegro to the 
WTO on 5 Decem ber 2011 after eight meetings had been held, and finished the work under its 
mandate. Accession of Montenegro was approved by the Ministerial Conference during its 
eight meeting. The Protocol on accession was signed on 17 December 2011 in Geneva. 
Montenegr o became a full -fledged WTO Member on 29 April 2012.  
1.2.  The first review of trade policies and practices of Montenegro was initiated in order to 
implement commitments undertaken by WTO membership. Report of the Government aims to 
provide short descriptions of  the most important economic and monetary policies (by sectors and 
measures), as well as descriptions of the priorities of the foreign policy as regards Euro -Atlantic 
integration. The Report describes key activities of the Government – current and future, as well as 
development projects in different sectors. It covers the period from 2012 to 2017, in line with the 
envisaged dynamics of reporting. In addition to the Introduction the Report contains 3 parts – 
main information related to the economic and trade  policies, as well as the objectives and 
development of trade policies in the context of the ongoing accession negotiation to the EU and 
regional integration.  
2  ECONOMIC POLICIES  
2.1  Macroeconomic developments in the Montenegrin economy in the period 2012 -2016  
2.1.  During the reporting period, the average annual real growth rate of gross domestic product 
(GDP) was 1.8%, with a recession of 2.7% in the first year as a result of the spillover of the crisis 
in the Eurozone, with the average growth from 2013 to 2016, 2.9% . The growth of the economy in 
these years would be considerably faster, but the lack of diversification on the supply side, which 
caused the high import dependence, reduced the growth rates of GDP. However, strong 
investment activity will increase the ava ilable capital in the area of infrastructure, energy, tourism 
and agriculture, increasing the potential for growth of the Montenegrin economy, whose effects will 
positively affect the overall economic activity in the medium and long term. Such dynamics wil l 
affect the reduction of obstacles to accelerated growth and will create an even more favourable 
investment climate, as a prerequisite for further FDI inflows. Likewise, increasing capital through 
investment activity involves the introduction of new techn ologies and knowledge both in the 
investment phase and in the operational phase. This dynamics affects the increase in total factor 
productivity, which is the most important driver of GDP growth in the long term.  
2.2.  Although growth is expected to accelerate i n the coming period, there are risks, but also the 
potential for economic development. Further implementation of the Fiscal Strategy, continuous 
monitoring of the financial sector, labour market reforms and improvements in the business 
environment are cruc ial for achieving sustainable and inclusive growth of the Montenegrin 
economy. According to the IMF, the acceleration of global growth, especially in EU, could have a 
positive impact on the Montenegrin economy. Montenegro uses the euro as a domestic curren cy, 
the country has been a candidate for EU membership since 2008, while accession negotiations 
officially began in June 2012.  
2.3.  Trends in international trade and foreign direct investment (FDI) reflect the importance of 
Europe as the main market of Monteneg ro. The most important partners remain the EU, Serbia, 
Bosnia and Herzegovina, China and the Russian Federation, which remains the main individual 
foreign investment direct investment partner (FDI).  
2.1.1   Latest economic developments1 
2.4.  The Montenegrin economy, af ter weaker growth in the first quarter of 2017, accelerates, 
stimulated by the intensification of works on the realization of transport infrastructure projects, as 
well as projects in tourism and energy.  
                                                
1 The contribution is prepared by the Ministry of Finance.  WT/TPR/G/369 • Montenegro  
 
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  2.5.  In the first two quarters of 2017, the Montenegrin e conomy grew at a real rate of 3.1 and 
5.2% on an annual basis, so the growth rate of GDP in the first half of the year was 4.2%. 
Economic growth was driven primarily by a high increase in domestic demand, caused by a strong 
increase in investment activity,  which led to an increase in employment and available income, 
which was exacerbated by the growth of banks' lending to households. The record tourist season 
and the positive developments in exports and investments marks the dynamics in the 
third quarter. P ositive trends in economic growth are expected in the fourth quarter of this year. It 
is expected that the tourism sector will make a significant contribution to the growth of the 
economy and that revenues from tourism will reach €950 million annually. We estimate that GDP 
growth will reach 4.0% in 2017, from 2.9% that MONSTAT announced for 2016. The assumption 
for the realization of this rate is that the growth in the fourth quarter will be about 3%, as the 
strong investment activity is expected to continu e. 
2.6.  Inflation in 2017, measured by the consumer price index, ranged from 2.0% in January to 
2.8% in September, which is also the highest recorded annual rate in this period. The influence of 
external factors on inflation in Montenegro is evident through the  "spill" of the dynamics of food 
and fuel prices from the world market, while from the internal factors, the prices of tobacco have a 
significant impact on inflation (as of August prices of excise taxes on tobacco are applied), 
accommodation  and food servi ce activities (tourism)  which recorded the highest annual growth 
rate in July of (17.1%). The average inflation rate for January -September was 2.4%.  
2.7.  The dynamics of the labour market during the first half of 2017, characterized by a 
continuous increase in employment and a reduction in the number of unemployed. According to 
the Labor Force Survey data (LFS), employment in the second quarter of 2017 increased by 3.5% 
compared to the same quarter of the previous one, and the unemployment rate fell by 
2.4 perce ntage points (p.p.). The unemployment rate in the second quarter was 15.1%. The 
activity rate increased by 0.3 p.p and amounted to 54.8%. The number of employees increased in 
the first quarter compared to the same period last year, by 5.3 thousand, while i n the second 
quarter the increase was 7.8 thousand. Such dynamics is primarily due to the growth of 
employment in the construction sector. The average gross salary in the period 
January -September  2017 amounted to €765 and was 2.3% higher than in the same p eriod of the 
previous year, while the average salary without taxes and contributions amounted to €510 and it 
was by 2.4% higher compared to the same period in 2016.  
2.8.  According to the preliminary data, in the period January -September 2017, the current 
accou nt deficit amounted to €385.8 million and was 9.2% lower than in the same period of 2016. 
The reduction in the current account deficit is the result of an increase in the surplus in service 
accounts and primary and secondary income balance.  
2.1.2   Projections of macroeconomic trends for the period 2018 -2020 (real sector)  
2.9.  Basic macroeconomic scenario for the period 2018 -2020, as a result of the expected 
economic activity developments, projected from the expenditure side would result in a real GDP 
growth of 3.0% in 2018, 2.7% in 2019 and 2.6% in 2020. In the period 2018 -2020, the growth of 
the Montenegrin economy  is based on  the growth of investment activity and engagement of 
domestic potentials, primarily in the construction and transport sector, but also as multipl icative 
effects on related sectors. Strong contribution from the construction sector, was caused by the 
involvement of domestic operators in the construction of infrastructure, new tourist facilities and 
energy ones. In the operational phase (supply effect s) of the functioning of these projects, the 
growth potential of the economy is expected, with a positive impact on the entire economy. A 
special contribution is also expected from the agricultural sector, given the significant investments 
in this sector, and the effects would be visible through the substitution of food imports and 
increased exports. Average projected GDP growth rate for the period 2018 -2020, is 2.8%.  
2.10.   Macroeconomic scenario 2018 -2020 has the following components on the demand side: 
- Domestic  demand will grow at a rate of 1.7%, and household consumption will have a 
real growth rate of 2.4% and a share in the real growth rate of an average of 1.8%. The 
projected growth rate of household consumption is spurred by the expected growth in 
disposabl e income through an increase in employment, wages and growth in tourism 
revenues. Final public consumption of the will fall by 0.9% with participation in the real WT/TPR/G/369 • Montenegro  
 
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  rate of -0.2%, due to fiscal consolidation measures. The projected average real growth 
of gro ss investments is 1.6%, with gross investments growing at a rate of 1.8%, while 
the change in inventories will fall by 0.5%. This dynamic of investment shows the 
maintenance of a high level of investment activity at the level of 23% of GDP.  
- The dynamics of  foreign demand (net exports) is caused by the growth of exports of 
goods and services of 3.2% in real terms, with real growth in tourism revenues of 2.8% 
(nominal growth rate of 4.8%). At such rates of growth, total tourism revenues are 
expected to exceed  €1.0 billion in the next year. Although exports of goods account for 
only 20% of total exports (goods and services), positive developments in this segment 
are expected to contribute to the reduction of high foreign trade imbalances. Imports of 
goods and s ervices will grow at a real rate of 1%, with an increase in imports of goods, 
caused by increased imports for investment purposes (import of construction materials 
and equipment).  
2.2  Tax system  
2.11.   Montenegro's tax policy is based on the comprehensiveness of taxp ayers (natural and legal 
persons), low and competitive tax rates and selective tax reliefs.  
2.12.   The tax system of Montenegro consists of several types of taxes and other fiscal positions. 
Direct taxes, which burden taxpayer's economic ability affecting direct ly their property or income, 
include: corporate income tax, personal income tax, real estate tax, tax on the use of passenger 
motor vehicles, vessels, aircrafts and airplanes and tax insurance premiums. Indirect taxes, 
charged in relation to the production , consumption or exchange of goods, are divided into: VAT, 
excise duties, customs duties, real estate sales tax and sales tax for used motor vehicles, vessels, 
aircrafts and airplanes. Other fiscal terms include contributions for compulsory social insuranc e, 
fees, concessions and charges. The structure of tax revenues is dominated by the indirect taxes 
and those are the value added tax and excise taxes, followed by the personal income tax and 
profit tax.  
2.13.   The Ministry of Finance is responsible for tax system  and tax policy and the Tax 
Administration is responsible for implementation of tax policy, except in the area of excises for 
which the Customs Administration is responsible.  
2.14.   The tax procedure is prescribed by the Law on Tax Administration, which defines the rights 
and obligations of taxpayers in the tax procedure, as well as the rights, obligations and powers of 
the tax authority in determining and collecting tax liabilities.  
2.15.   The tax system is exclusively based on the principle of self -taxation, according to which the 
obligation of calculating and declaring of tax obligations is transferred to taxpayers. Taxes on 
consumption are paid according to the principle of destination, that is, by the place of 
consumption, and direct taxes according to the place of income generation. Double taxation at the 
international level is avoided by giving a tax credit on the account of paid tax on profit and income 
abroad to the limit of the obli gation on the basis of Montenegrin tax.   
2.16.   According to the Common Negotiating Position on the Accession of Montenegro to the 
European Union, it has been established that the legislation of Montenegro closely follows the EU 
acquis, as well as the determined  benchmarks for further harmonization.  
2.17.   Montenegro has established a stable and predictable tax system, where for certain taxes a 
tax calendar is established by 2020, so that in the mentioned period there will be no further 
increase in the rates, other tha n the tax rates already determined in advance by the tax calendar.  
2.18.   The most important strategy in the last few years has been directed to create conditions for 
voluntary performance of tax obligations, and for that purpose, results have been achieved 
regarding the simplification of tax procedures and transparency in the performance of tax 
obligations. Simplification of tax procedures is reflected in the reduction of procedures for settling 
tax liabilities, the establishment of a system for electronic filin g of tax reportings and the reduction 
of deadlines for the return of the tax credit. Consolidation of different tax reportings has been 
established so that the calculation of the personal income tax of natural persons and social WT/TPR/G/369 • Montenegro  
 
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  insurance contributions are  submitted on a consolidated form for the calendar month, and all the 
established obligations for that month are paid in a cumulative amount to one payment account. 
The obligation to submit tax declarations for tax on profit, income tax and social insuranc e 
contributions has been introduced, and taxpayers have been provided also with the possibility of 
submitting the value added tax declaration electronically. The system of repayment has been 
improved through the establishment of the tax authority's promptn ess in making decisions on the 
return of the tax credit for certain tax forms. The list of the largest tax debtors (black list), as well 
as the list of regular taxpayers (white list), is published quarterly, thus achieving transparency in 
the settlement of  taxpayers, so that taxpayers and citizens would have insight into the regularity, 
that is, the liability of taxpayers in terms of settlement of tax obligations.  
2.19.   A special focus is the creation of an effective system for reducing the informal sector, and i n 
connection with this special measures have been established by the Law on the Prevention of 
Illegal Business, and the Government of Montenegro has established a special Commission for the 
Elimination of the Gray Economy, which coordinates the work of the  competent authorities and 
proposes to the Government further measures on the suppression of the gray economy. Such 
measures certainly include those relating to creating conditions for ease of doing business and 
raising tax morality.  
2.20.   In the forthcoming per iod, the main strategy will be to improve the legal framework for the 
suppression of the informal sector and simplify tax procedures, which will contribute to the 
improvement of the business environment, which will be attractive both for domestic and forei gn 
investors.  
2.21.   To this end, concrete projects are being launched, and one of the most important projects is 
the "Modernization of Tax Administration", whose realization begins in January 2018 and is 
financed from the World Bank loan. This project aims to i mprove the institutional capacities of the 
Tax Administration and the management system, and to fully utilize a highly automated system 
that does not require significant caution and is based on risk assessment. The project involves 
investment over a five -year period for institutional development and modernization of the 
operational function of the Tax Administration, IT system and infrastructure and services to 
taxpayers. In this way, the conditions are created for the g ood services to increase the 
co-opera tivity of taxpayers in the execution of tax obligations, and that the measures are 
undertaken in accordance with a good automated risk assessment system, thus reducing the 
number of administrative procedures and at the same time increasing the efficiency o f the tax 
authority with the reduction of tax procedure costs.  
2.22.   Within the framework of the World Bank loan, the project Electronic fiscalization will be 
implemented, which will enable the transfer of data from the payment devices used by taxpayers 
to the Tax Administration server. This system involves real -time data transfer of every transaction 
in the trade of goods and services, which gives a complete insight into the realized revenues and 
calculated tax liabilities by the taxpayers. The goal of this pro ject is centralized insight into the 
process of issuing invoices for performed sales and tax accounting, thus gaining a powerful tool for 
suppressing illegal business, especially in the trade of goods and services.  
2.23.   The tax system will continue to adjust i n order to fully harmonize with the EU acquis, and in 
January 2018, a Project will be launched that will produce a complex set of results for resolving 
the pre -accession requirements of Chapter 16 - Taxation, and which is financed from the European 
Fund IP A 2014. The objective of this project is to improve the conditions for administrative 
cooperation and mutual assistance with the EU Member States to harmonize with the applicable 
directives related to the exchange of information from the tax area and the e stablishment of a 
central liaison office in order to automatically exchange information in accordance with the 
European Union Directives regulating the field of automatic exchange of information - Directive on 
Administrative Cooperation ( DAC) 1, 2, 3, 4. 
2.3  Structural reforms  
2.24.   The latest Doing Business Report 2018 for the period June 2016 - June 2017 shows that the 
reform activities undertaken for improving the business environment resulted in the overall 
progress, where Montenegro took the 42nd place among 190  ranked countries and thus, compared 
to last year's revised Report (June 2015 - June 2016), it shows an improvement for 9 places.  WT/TPR/G/369 • Montenegro  
 
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  2.25.   With regard to the World Economic Forum's Global Economic Indicators Index 2017 -2018, 
Montenegro took 77th place out of 137 co untries, showing a progress of 5 places compared to last 
year's report.  
2.26.   The Government of Montenegro is making efforts towards increasing the level of 
competitiveness for international investment market, therefore special attention in particular to 
improvi ng the efficiency of the state administration, reducing the costs of administrative 
procedures and shortening their duration. Hence, these aspects for creating a favo urable climate 
were in the focus of the implemented measures to improve the business envir onment. In this 
regard, the Government of Montenegro at the session of 1 June 2017 adopted the Decision on the 
establishment of the Competitiveness Council, with the main task of coordinating activities in the 
implementation of the priority reform measures  defined in the strategic development documents, 
which are in the function of removing  key obstacles  for greater competitiveness  and faster 
economic growth of Montenegro.  
2.27.   With regard to improving the situation as in the area of issuing building permits, th e initial 
commitment for drafting a new law with an aim to enable the stability and security of the system, 
as necessary prerequisites for attracting investments. These prerequisites, along with the new 
construction system and use of facilities, which is s ignificantly improved with the adoption of the 
Law on spatial planning and construction, enable and increase the competitiveness  of Montenegro 
in the investment market. The law abolishes the construction and usage permit, as administrative 
acts on the basi s of which the construction and use of the facility is carried out. The law came into 
effect on 14 October 2017.  
2.28.   An important segment of future reform activities are to ensure professional and competent 
staff, as well as the use of e -government in daily ba sis. For access services at the state and local 
level, a portal of e -Government has been created in the form of a unique individual point called "All 
in one place". In order to improve the services available on the above mentioned portal, 
continuous effort s are being made to provide as many services as possible, accessible to all 
citizens and businesses. Hence, the total number of e -services on the e -Government portal is 249, 
and provided by 31 institutions: 113 e -services are of an informational type and 1 36 e-services 
are of an electronic type. Additionally, more specifically, 135 are services for natural persons, 
92 services are for legal entities and 22 services are for the administration. In order to create a 
more modern and efficient state administrati on by the end of the year, it is planned to involve as 
many institutions as possible on the e -Government Portal and thus increase the number of 
electronic services. Also, with the amendments to the Law on Electronic Government it is 
envisaged to include th e services of local self -government on the e -Government portal as well as 
the activities planned on the technical level and other prerequisites for publishing / providing these 
services.  
2.29.   The Ministry of Finance started in 2012 with the implementation of a ctivities to simplify the 
registration process of the companies, when the e -Government portal enabled the electronic 
submission of applications for registration of new economic entities, which in the other hand 
replaced the arrival  at service  counter  as we ll as waiting in lines. Also, in accordance with the Law 
on Business Organizations , the Ministry of Finance prepared Guidelines on using the Central 
Registry of Business Entities and Enrollment Forms (OG MNE No. 20/12 of 12.04.2012), which 
introduced the possibility to electronically submit the required documentation. Further activities  
aim at introducing a full electronic registration, a procedure that will be quick and simple; 
therefore the Ministry of Finance initiated amendments to the Law on Business Enterprises, which 
regulate better the work of the Central Register of Business Ent ities (CRPS). The public hearing is 
finished and the law is being harmonized with the line ministries.  
2.30.   In addition to the entire set of laws and strategic solutions that Montenegro has adopted in 
the field of information society development, harmonized wit h European standards, with an 
emphasis on the Strategy for the Development of the Information Society by 2020, activities for 
their implementation have been intensified. In this regard, action plans are defined on an annual 
basis.  
2.31.   In the part of regulatory  reforms, the application of the Regulatory Impact Assessment 
(RIA) is continuous, with an aim to set prerequisites in order to reduce, resolve or even  prevent  
the new barriers from happening.  In this regard, from the formal introduction of the RIA into th e 
Montenegrin regulatory system on 1 January 2012 to 1 December 2017, the Ministry of Finance WT/TPR/G/369 • Montenegro  
 
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  gave over 2,000 opinions on draft acts and the accompanying forms of the report on the 
conducted analysis of the RIA, from both aspects, implications on the busin ess environment and 
the impact on the state budget.  
2.32.   In the area of implementing the recommendations of the "Guillotine Regulations", the 
recommendations are being continuously implemented, where the level of implementation, from 
the first adopted Action Pl an (May 2012) to 30 September 2017, amounted to 1,231 out of the 
total accepted 1,446 recommendations, which represents a level of fulfillment of 85.13%. It is a 
project that refers to comprehensive analysis of Montenegrin regulations, from the aspect of 
simplifying administrative procedures, improving the business environment, as well as faster and 
better realization of citizens' rights and obligations before the state administration bodies. The 
specificity of the Montenegrin Guillotine Regulations, in rel ation to the countries in region, is the 
comprehensiveness, because in addition to a number of economic regulations and standards, it 
also concerns the reform of the misdemeanor system, the inspection procedure and the 
equalization of administrative proced ures. It is planned that by the end of 2018 the project will be 
completed.  
2.33.   Within the framework of the public sector reform, the Ministry of Public Administration was 
formed in November 2016, by unifying the state administration, local self -government, ele ctronic 
administration and information security. The Ministry's mission is defined by the Public 
Administration Reform Strategy until 2020, adopted in July 2016, with the aim of creating an 
efficient and service -oriented administration, by enhancing the co nfidence of citizens in the quality 
of the services. The new system of organization at the central and local level  ensures a more 
efficient functioning , in accordance with the capacities and needs of the population, which will 
contribute to the valorizatio n of resources and implementation of strategic development policies of 
Montenegro. In the part of improving the public administration dialogue with the civil sector, the 
emphasis is put on social partnership as an incentive for necessary reforms.  
2.34.   Within th e framework of the activities undertaken for further improvement of the business 
environment at the state and local level, Ministry of Finance in cooperation with the UNDP Country 
Office in Montenegro, supported by the UK Embassy in Podgorica and other par tners, worked 
intensively on the implementation of the project "Citizens and Business Administration". The 
project provided an  opportunity  for a public -private dialogue or an effective participation of 
citizens, the business community, the academic communi ty, NGOs and other stakeholders to 
stress out to the state and local administration the problems that the citizens and businesses in 
Montenegro encounter when exercising their rights and performing business activities. During the 
second phase of the projec t, a dialogue on concrete business barriers was launched through the 
portal www.bezbarijera.me , through the "No Barriers! So Business Doesn't Wait" campaign. In the 
period from November 2015 to March 2016, with the  modernization of the portal by independent 
experts, the interested public had the opportunity to point out specific shortcomings in the 
regulatory framework and administrative procedures.  
2.35.   In order to improve the business environment at the local level, in  May 2016, Montenegro 
joined the Certification Program for Municipal Economy in South East Europe (BFC SEE). The 
certification program gives municipalities clear guidelines on how to create a good business climate 
and introduce internationally recognized s tandards of an efficient and transparent local 
administration. The certification program is an opportunity for local governments to improve the 
business climate in line with the best practices of the regions and countries of the European Union, 
as well as the chance to better position themselves on the investment map and improve 
competitiveness.  
2.36.   In order to address the problems of insolvency, the Law on Compromise Financial 
Restructuring of Debts to Financial Institutions entered into force in April 2015, w ith an aim to 
encourage and accelerate the recovery of borrowers, i.e. users of mortgage loans in financial 
difficulties troubled by debt restructuring, preserving the stability of the financial system and 
facilitating access to new ones by means of financ ing to stimulate economic recovery and growth. 
This implies resolving the problems of economic entities whose economic activity is economically 
viable and which, due to the lack of liquid assets, are late with loan repayment. Therefore, it was 
necessary to  find an appropriate solution for restructuring  a company's debt  whose loans are 
classified in the "B" and "C" categories. The proposed law is based on the concept of volunteer 
participation in restructuring. Debtors and their creditors voluntarily partici pate in debt negotiation 
with the aim of reaching a  mutually  acceptable solution . On 22 June 2017 , the amendments to the WT/TPR/G/369 • Montenegro  
 
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  present law came into force . In order to further simplify the administrative procedures, the 
procedures of Voluntary Financial Restruct uring, so that the companies/clients, in turn, can  save 
more time and money . 
2.4  Justice reform system  
2.37.   Judicial reform process has been one of the most important processes in Montenegro during 
the past decade.  
2.38.   Adoption of the Strategy for the Reform of the Jud iciary 2014 -2018 opens up a new phase 
in implementation of reform activities aimed towards further development of the judicial system in 
Montenegro with a view to providing more efficient enjoyment and protection of civil rights and 
freedoms. The strategy will provide guidelines on preparation of judicial institutions and judges 
and public prosecutors for the challenges presented by the European Union membership. In the 
forthcoming period, reform activities will focus on achievement of several strategic goa ls. Further 
strengthening of independence, impartiality and accountability of the judiciary remains priority for 
Montenegro in the European integration process. Increased efficiency of the judicial system will 
lead to improvements in the respect for human rights and rule of law. Reform processes will also 
contribute to the improvement of international and regional judicial cooperation and further 
capacity building of judicial institutions.   
2.39.   Reform of Civil Law, since 2012, has included adoption of the Law on Amendments to the on 
civil procedure, Law on Amendments to the Law on Obligations, Law on Amendments to the Law 
on Enforcement and Claims Securing, Law on Amendments to the Law on enforcement agents, etc. 
Reform of the civil law in the previous period h as been mainly based on the system inherited from 
earlier legislation that regulated this matter, however some provisions that were imposed by 
development of soc iety in general and its moderniz ation were also introduced. According to the 
strategic goal of Montenegro - EU integration process, when creating new regulations, great 
attention is paid to compliance with relevant regulations of EU. Also, with regards to increasing the 
efficiency of the system of execution, speeding up the procedure and reducing th e number of 
backlog cases, a normative framework has been created, which will have an impact on the 
improvement of the business environment, the creation of conditions for the elimination of 
business barriers and ultimately to improve the position of Monte negro in the international 
investment public.  
2.40.   Reform of Criminal Law, since 2012, has included adoption of the Amendments to the 
Criminal Procedure Code, amendments to the Criminal Code, amendments to the Law on Liability 
of Legal Persons for Criminal Offences, amendments to the Law on the Treatment o f Juveniles in 
Criminal Proceedings etc. Changes in economic, political and general social circumstances result in 
emergence of the new forms of behaviour that are dangerous to society which is why the new 
criminal offences were introduced, while some, alr eady existing, criminal offences were left out, 
whereas new criminal sanctions were introduced and punishments for certain criminal offences 
were prescribed different.    
2.41.   One of the most demanding challenges in the reform of the judicial system of Monteneg ro in 
the forthcoming period will be development, adjustment and training of judicial institutions to 
operate in the European Union legal system. In the accession negotiations period, which also 
coincides with the implementation period of the Strategy for the Reform of the Judiciary, all the 
judicial institutions and other professions in the judiciary should embark on.  
2.5  Privatization  
2.42.   Privatization process in Montenegro is being implemented in accordance with the 
Montenegrin Economic Policy, whose main object ives are reflected in the higher economic growth, 
ensuring new jobs and employment, increasing investments and export and creating the basis for 
higher income and growth of citizens' standard of living, together with the increase of 
competitiveness of the Montenegrin economy. Privatization process is in final stage. Since the 
beginning of 1999, more than 90% of the state -owned companies or companies with the majority 
of the state -owned capital have been privatized, including the 100% of privatization in the  banking 
sector, telecommunications and oil distribution. Most of the companies that have not been WT/TPR/G/369 • Montenegro  
 
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  privatized for the time being are of the strategic relevance for the Montenegrin economy in the 
energy, transport and tourism sectors.   
2.43.   Since 2012 , there ha ve been several privatizations. Privatization of companies, through sale 
of shares or assets, was implemented in the transport, dairy, chemical, lumber, tobacco and 
tourism industries.  
2.44.   In addition to privatization of assets and shares owned by the state, the Government has 
concluded two lease agreements with reputable investors.  The contract on the long -term lease of 
the former military barracks "Orijenski bataljon", Kumbor, Herceg Novi was signed on 10 July 2012 
with the State Oil Company of Azerbaijan (S OCAR). The investment program envisages the total 
investment of €258.077.000 for the first 8 years of the lease, converting the location into an 
exclusive lifestyle world -class richest luxury retailer  "Portonovi". The Resort will contain 
architectural and functional elements that will make Portonovi an unique destination in the 
Mediterranean, contributed by the management contract signed with One & Only and Henri 
Chenot, bringing the investment of around €650 million. The agreement on the long -term lease of  
the site Lastavica with the fortress "Mamula", Herceg Novi was signed on 23 February 2015 with 
the company Orascom Development Holding. The contract envisages reconstruction of the fortress 
"Mamula" and its conversion into a unique hotel museum character,  category 5* star.  
2.45.   Having in mind the success of public -private partnership (PPP) projects in EU member states 
and the lack of the budgetary funds for infrastructure development, the Government of 
Montenegro has decided to use the PPP model more intensive ly through the privatizations process. 
Therefore, the Government has opened all sectors to the PPP model (including healthcare and 
education, ports, energy, tourism and the valori sations of attractive locations in the costal and 
northern areas of Montenegr o).  
2.6  Investment policy  
2.46.   Recognizing investment policy as one of the key elements for development and 
improvement of the country's economy, Montenegro has defined increasing competitiveness 
through structural reforms and development of infrastructure, as th e primary goal of economic 
policy, which will definitely contribute to creating conditions for higher inflows of domestic and 
foreign investments. Potential for economic growth has been recognized in the sectors of tourism, 
energy, transport, agriculture a nd manufacturing Industry, which are identified as strategic 
priorities for development of Montenegro.  
2.47.    In 2017, FDI inflow trend continued, so in the first nine months net inflow of FDI amounted 
to €311.7 million, which represents an increase of 10.6% com pared to the same period in the 
previous year. Observing the FDI inflow structure for the period 2010 -2016., the largest 
investments are related to intercompany debt both in companies and enterprises (with a share of 
31.2% and 31.6% of total FDI inflow), f ollowed by investments in real estate (participation of 
around 30%). With a positive trend in FDI flows in Montenegro, we have the potential to flexibly fit 
into the world trends of foreign direct investment and investments can have a major impact on 
econo mic growth and macroeconomic stability.  
2.48.   With the aim of attracting new investments and improving the business environment, on 
16 October 2014 Law on Amendments to the Law on Foreign Investment was adopted (OG  MNE 
No. 45/14). Amendments to the mentioned Law additionally clarified the term of foreign investor 
and improved investment environment by abolishing restrictions on investments in a company 
engaged in the production and trade of weapons and military equipment . Foreign investors are 
provided with a national treatment, which means they have the same status as domestic investors 
and are allowed to invest in any sector of the industry and freely transfer financial and other 
assets, including profits and dividends.  Also, the system of investor protection is improved by the 
provision defining that the property of a foreign investor cannot be the subject of expropriation, 
unless the Law stipulates a public interest, with compensation in accordance with the Law.  
2.49.   The G overnment of Montenegro, aware of the need for improvement of the investment 
environment, adopted the Decree on Fostering Direct Investment (OG MNE No. 80/15), on 
31 December 2015, which defines a new set of incentive measures for domestic and foreign 
investors. Based on ten criteria defined by the Decree, the investor has the possibility of allocating WT/TPR/G/369 • Montenegro  
 
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  direct funds for investment projects in the capital city and southern region, with a minimum value 
of €500,000, which provides opening of minimum 20 new jobs , and in the central and northern 
region minimum €250,000 and minimum 10 new jobs. Investment Investors, according to their 
investments, are entitled to incentives ranging from €3,000 to €10,000 per newly employed 
person. In addition, any capital investmen t in excess of €10 million and generating at least 50 jobs 
is eligible for incentives of up to 17% of its worth. The Decree also envisages the possibility to 
reimburse the costs of construction of the infrastructure required to implement the investment 
project. The mentioned Decree seeks to attract new investors, increase employment, in particular 
in the less developed areas, and balance out regional disparities.  
2.50.   On 17 November 2016, the Government of Montenegro adopted the updated version of the 
Decree on  Business Zones (OG MNE No. 20/11 and 20/15). The mentioned Decree on Business 
Zones defines the model of designation, establishment and management of business zones, their 
classification according to the strategic importance, the way of regulating the zon e, the concept of 
the user of the business zone, the way of entry into the zone and the benefits that potential users 
of the business zone have. Nine local governments have identified business zones of local 
importance so far, enabling the investors to inv est under favourable terms in Berane, Bijelo Polje, 
Kolasin, Mojkovac, Niksic, Cetinje, Ulcinj, Podgorica and Rožaje. The Ministry of Economy has also 
prepared specific guide with individually presented business zones, their locations, capacities and 
facilities, and all necessary information are available in Directorate for Investments, Ministry of 
Economy, as well as on the website www.bizniszona.me .  
2.51.   The business zone is a unique entity in the area of local municip ality, partly or fully 
equipped with infrastructure, which provides potential investors with additional tax and 
administrative facilities from the state and local levels, in addition to the common space and 
infrastructure. By the Decree on Business Zones, the beneficiary is exempted from paying 
compulsory social security on salaries, contributions to the Labor Fund and personal income tax for 
a period of 5 years from the date of positioning the capacities in the business zone. Incentives 
have been provided from the local level in terms of: favo urable price of land lease / purchase, 
relief or reduction of utility fees, construction land placement fees, reduction of the tax rate on real 
estate, exemption of personal income tax and one stop shop. The Decree on Business Zones 
stipulates that local municipality that have designated business zones, must comply local 
regulations and decisions with the provisions of the sub -legal act by 21 June 2018, in order to 
consider the business zones of local importance as func tional and infrastructurally equipped to 
future users.  
2.52.   The Law on Free Zones ( OG RM No.42/04, OG MNE No. 11/07, 76/08, 40/11 and 40/16 ) 
regulates the establishment of the free zones and warehouses, management and conditions for 
carrying out economic activ ities in them, as well as the conditions for terminating operations of the 
zone and warehouse. In order to further harmonize with EU legislation, on 25 June 2016, the Law 
on Amendments to the Law on Free Zones was adopted and came into force on 8 July 2016 . Given 
that free zones should be transit and production -oriented, amendments to the mentioned Law 
prescribe tax and customs reliefs for goods that are entered into a zone or warehouse and used for 
the purpose of its processing, active refining or subject to the usual forms of handling. In order to 
provide control of foreign trade with weapons and military equipment, amendments to the Law on 
Free Zones prescribe the exemption of the mentioned goods from the free -trade regime in the 
zone or warehouse. Also, provisions on regulating economic activities are improved, in terms of 
their additional compliance with other regulations for environmental protection and other values of 
the public interest and the procedure for the establishment of free zones has been al so improved, 
but also the deadlines for starting the operation of the zone or warehouse have been extended.  
2.6.1   Incentive programmes available to investors  
2.53.   Within the Programme for supporting industry modernization, companies have the 
opportunity to reduce the  cost of purchase of equipment, by subsidizing the costs up to 20%, 
more precisely up to €20,000, which will ultimately lead to the improvement of technological 
processes, products and services and increase in volume and value of turnover.  
2.54.   In addition, und er the Programme for enhancing innovation in SMEs, companies have 
support available in the form of co -financing the part of the costs for engaging external 
consultants for the implementation of innovative activities, more precisely for technical studies an d 
solutions, the introduction of special ICT solutions and softwares in the business, creation of new WT/TPR/G/369 • Montenegro  
 
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  product design and similarly, which means that companies can obtain financial support amount to 
50% or up to €3,500 without VAT.  
2.55.   The objective of the Clus ter Development Program in Montenegro is to provide financial 
support for entrepreneurs, micro, small and medium sized enterprises within clusters, through 
investments in tangible or intangible assets or operational costs,  in order to strengthen the 
capaci ties of clusters and their positioning in the local and  international market.  
2.56.   Programme for Enhancing Regional and Local Competitiveness through Harmonization with 
International Standards of Business aims to support entrepreneurs and SMEs, in particular th e 
ones from the less developed municipalities, to increase their competitiveness through 
harmonization with the product -related international standards and support for conformity 
assessment accreditation.  
2.57.   Support is available also through the Decree on sub sidies for employment of specific 
categories of unemployed persons, for legal persons and entrepreneurs who decide to hire some 
categories of unemployed persons who are registered in the Employment Agency of Montenegro 
from 1 January 2016 until 31 December  2017. In December 2017, the Government adopted a 
Decree on amendments to the Decree on Subsidies for employment of specific categories of 
unemployed persons, which extended its implementation until 31 December 2018. During 2016, 
503 employers applied Decr ee on subsidies for employment of specific categories of unemployed 
persons, for employment of about 5,500 employees.  
2.58.   The self -employment support program is implemented in Montenegro since 2008 (Innovated 
program for continuous stimulation of employment a nd entrepreneurship) is intended for 
unemployed persons, techno -economic surpluses, individual agricultural producers, entrepreneurs 
and legal entities with the status of a small enterprise. Through this program, loans are granted 
under more favo urable mar ket conditions, and a loan of €5,000 can be obtained for each newly 
created job. The projects are financed for up to three jobs, therefore the maximum loan amount is 
€15,000.00. In 2016, 10 loans were awarded to entrepreneurs and legal entities amounted to  
€90,000.00 and 18 new jobs were opened. In addition to entrepreneurs and legal entities, 
20 loans to unemployed persons were also granted and 22 new jobs were opened and the 
mentioned loans amounted to €110,000.00. This program will continue in 2018.  
2.7  Comp etition policy  
2.59.   In accordance with the provisions of the Law on Protection of Competition (OG MNE 
No. 44/12) that came into force on 9 October 2012, the Agency for Protection of Competition was 
established as an institution with public authorizations, whic h independently performs tasks within 
the scope of its competencies established by the Law, and which is accountable for its work 
through annual report to the Government and the Parliament of Montenegro. The Agency started 
its work on the day of registrati on in the Central Register of business entities  of the Tax 
Administration ( 8 February 2013).  
2.60.   By passing ten (10) by -laws, which came into force by the end of 2014, the legislative 
framework was fully completed, in the largest part harmonized with the EU acquis.  
2.61.   Activities related to the draft of the Amendments to the Law on Protection of Competition 
are in progress. Amendments to the Law on Protection of Competition have been initiated with the 
aim of forming a single body that would perform activities re lated to the protection of competition 
and state aid. Namely, in the amendments, inter alia, it is envisaged that the powers and actions 
of the State Aid Control Commission come under the jurisdiction of the Agency for Protection of 
Competition. This will enable that operations of the state aid control are carried out within the 
existing institutional arrangements, without expanding the network of regulatory bodies.  
2.62.   Since the entry into force of the Law on Protection of Competition, the Agency for Protectio n 
of Competition has issued a total of 166 decisions, out of which 142 decisions related to the 
control of concentrations (merger control); 5 decisions related to the abuse of dominant position 
(of which 2 are suspension of proceedings and 3 decisions esta blishing infringement of 
competition); 7 decisions related to restrictive agreements (of which 1 is the suspension of 
proceedings and 6 decisions establishing infringement of competition); 12 decisions on individual WT/TPR/G/369 • Montenegro  
 
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  exemption from restrictive agreement. Al so, in the period from 2012 to 2017, the Agency has, at 
the request of the undertakings, and the competent state authorities and institutions at the local 
level, issued 127 opinions and statements on this basis.  
2.8  Public Procurement  
2.63.   In July 2015, by handing over the instruments of ratification, Montenegro became a full 
member  of the (GPA) of the WTO (the Decision on Montenegro's accession to  Government 
Procurement Agreement (OG of MNE - International Treaties, No. 6 of 29 May 2015).  
2.64.   As a candidate country for  EU membership, Montenegro has assumed the obligation to 
establish an effective,  transparent and sustainable system of public procurement, through further 
harmonization of national  legislation with EU standards.  The activities on the adoption of the new 
Law on Public  Procurement are under way, and the Law will be fully harmonized with the EU acquis 
of 2014.  
2.65.   With an aim of improving the transparency of the system, Montenegro launched the 
activities on establishing  electronic public procurement system throug h the project IPA 2014, with 
a value of €1.65 million.  The selection of the most appropriate bidder to establish the electronic 
public procurement system  is expected in the second half of 2018.  This system should enable a full 
implementation of public proc urement procedures in electronic form.  The introduction of electronic 
procurement will improve the  efficiency and transparency of public procurement and enhance the 
monitoring system.  This ultimately leads  to further opening of public procurement market an d 
better management of information, allowing the monitoring of the public  procurement cycle.  
3  TRADE POLICY  
3.1  Small and medium enterprises (SMEs)  
3.1.  The principles and directions of the development of entrepreneurial policy in Montenegro are 
defined in the Strate gy for Development of Small and Medium sized Enterprises for the period 
2011-2015 (Hereafter to as the Strategy). Implementation of SME development policies is under 
the authority of a large number of institutions, the private and public sectors, and is be ing 
implemented continuously, in accordance with the measures of the Strategy. In the framework of 
the Strategy, the following activities are planned for further improvement of the business 
environment within the four defined strategic objectives: improvem ent of the business 
environment, strengthening of financial support, strengthening of competitiveness of SMEs and 
promotion of entrepreneurship, and support to beginners in business - start up.  
3.2.  In line with the objectives of the Strategy, the following eff ects have been achieved: progress 
has been made in creating a more favo urable business environment, the macroeconomic 
environment for the operations of SMEs is stable and transparent, and Montenegro's position on 
the ranking lists of international economic  reports has been improved, the strategic objectives of 
the Strategy have been successfully implemented (the increase in the number of SMEs, employees 
in SMEs, increased participation of SMEs in total exports, total investments in fixed assets, 
turnover an d gross value added).  
3.3.  In 2017, in Montenegro, according to Tax Administration data, there were 25 ,962 SMEs, 
which, is an increase of 23 .62% compared to 2012. The participation of SMEs in the total number 
of companies in 2017 is 99 .75%, which coincides with  the EU average where SMEs account for 
more than 99% of the total number of enterprises. In the gross added value SMEs participate with 
69%, while in the total turnover the SME sector participates with 78% in 20162, and employs over 
75% of the total number  of employees in Montenegro in 2017. Most enterprises are in the trade 
sector (30 .9%), accommodation and food services (12 .4%), construction (10 .7%), manufacturing 
industry (8 .4%) and transport (5 .1%). 
                                                
2 According to the Classification of activities - KD2010, from B -S, apart from K -Financial activities sector 
and the O -State Administration and defen ce sector and mandatory social security. Source: Research "Foreign 
Affiliate Statistics".  WT/TPR/G/369 • Montenegro  
 
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  3.2  Trade in goods  
3.4.  As a small country and economy, Monten egro is open to trade in goods. Openness of 
Montenegrin economy of international trade and its goal of integration into the world economy is 
reflected in relation to its trade. In the period 2012 -2016, the growth of foreign trade of 
Montenegro was recorded . While exports varied from year to year, imports recorded growth from 
2013.3 
Table 1 Foreign trade of Montenegro for the period 2012 -2016  
Value in '000 € 
Period  World  Europe  EU-28 CEFTA 2006a 
Value  Value  % Value  % Value  % 
(1) (2) (3) (4) (5) = 
(4/3*100)  (6) (7) = 
(6/3*100)  (8) (9) = 
(8/3*100)  
2012  Import  1,820,850  1,584,402  87% 809,886  44% 702,314  39% 
Export  366,896  356,766  97% 189,004  52% 143,667  39% 
2013  Import  1,773,352  1,527,887  86% 784,201  44% 687,091  39% 
Export  375,585  360,667  96% 155,791  41% 185,771  49% 
2014  Import  1,784,214  1,542,019  86% 816,623  46% 669,580  38% 
Export  333,166  317,674  95% 119,215  36% 151,754  46% 
2015  Import  1,841,524  1,523,013  83% 759,771  41% 698,476  38% 
Export  317,172  289,515  91% 113,177  36% 137,483  43% 
2016  Import  2,061,688  1,731,954  84% 992,567  48% 627,546  30% 
Export  325,846  290,701  89% 122,376  38% 146,800  45% 
a Agreement on Amendment of and Accession to the Central European Free Trade Agreement.  
Source : Data MONSTAT . 
3.5.  In the structure of imports (according to the SITC classification) in 2012, the largest share 
(20%) of imported goods refers to food and live animals, while in 2016 the largest share of 
imports (26%) refers to machinery and transport devices.  
3.6.  In the struct ure of exports (according to the SITC classification) in 2012 as well as in 2016 
(42% and 27% respectively) the most represented goods are products classified by material 
(e.g. non-ferrous metals  with 35.1% of the total exports in 2012 and 19.3% of total e xports in 
2016). In the mentioned period, the biggest growth of share of exports had the Raw material 
sector, except fuel (15% in 2012 and 22% in 2016).  
3.7.  In the observed period 2012 -2016 main foreign trade partners of Montenegro were the 
European Union and CEFTA 2006 Parties (see Table 1). The main individual trading partners were: 
Serbia, Bosnia and Herzegovina, Germany, Hungary and China.  
3.3  Industry – Manufacturing industry  
3.8.  The industry sector (mining and quarrying, manufacturing, electricity, water supply) in 
Montenegrin  economy contributes 10.1% of gross value added (2016), which leads to its 
indisputable importance in respect of employment and sustainable regional development.  
                                                
3 The Statistical Office of Montenegro (MONSTAT) is the competent institution responsible for the 
production and dissemination of data foreign trade in goods of Montenegro (EXTRASTAT system, compliant 
with Regulations (EC) No 471/2009, (EU) No 92/2010, (EU)  No 113/2010, (EU) No 1724/2016, (EU) No 
2119/2016, (EU) No 1253/2016). In the documents submitted by the Secretariat used data is extracted from 
the Comtrade Database of the United Nations (https://comtrade.un.org/), to which MONSTAT delivers data on 
a monthly basis. Bearing in mind that according to the UN methodology, it is possible to use other trading 
systems, to use another currency (US dollar), as well as non -existence of Republic of Kosovo * in their data,  it 
is possible that there is discrepancy in  data (example of export participation for CEFTA 2006 Parties that differs 
exactly for the value of exports towards Kosovo).  WT/TPR/G/369 • Montenegro  
 
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  3.9.  According to its volume, manufacturing industry remains the most important and t he biggest 
industrial sector in Montenegro and as such has a big influence on the employment, GDP and the 
export of the overall economy. Measured by the volume of industrial production, the currently 
most significant activities in the structure of the manu facturing industry includes: manufacture of 
pharmaceutical products, manufacture of basic metals, manufacture of metal products, 
manufacture of food products, beverages and tobacco products. In addition to this, manufacturing 
industry is the most significa nt in terms of employment. The greatest numbers of workers in the 
manufacturing industry are employed in: manufacture of basic metals, manufacture of metal 
products except machinery and equipment, repair and installation of machinery and equipment, 
manufac ture of food products, manufacture of wood and of products of wood and cork. As in the 
case of employment, the manufacturing industry achieves the largest share in the total export of 
industry, and it is held by the manufacture of basic metals, manufacture  of food products, 
manufacture of beverages as well as manufacture of wood and of products of wood and cork 
except furniture.  
3.10.   In order to create the conditions for increasing the competitiveness of Montenegro's 
economy, Government of Montenegro has adopte d in 2016 Industrial policy of Montenegro for the 
period until 2020, which defines priorities and measures for long -term development of 
competitiveness. These priorities refers to stimulating growth and development of enterprises 
based on efficiency and pr oductivity, especially in priority sectors, establishing preconditions for 
more efficient use of available resources, development of infrastructure as well as guiding industry 
towards higher value -added production.  
3.4  Energy  
3.11.   The Energy Law came into force on  28 January 2016, and the Law on Cross Border 
Exchange of Electricity and Natural Gas came into force on 19 July 2016. With these two laws, the 
EU Third Energy Package has been implemented in primary legislation, which, together with the 
harmonization of b ylaws, implies that the legal framework has been completed and that a major 
step was made towards invigorating the market and strengthening market orientation in the 
organisation and functioning of the energy sector.  
3.12.   The Energy Law stipulates the obligatio n to integrate the electrical energy market of 
Montenegro into the regional and European markets, and that the organisation, management, 
functioning and development of electrical energy market shall be implemented in a manner that 
ensures security of suppl y, reliable and quality services, at prices that reflect the price trends in 
the market and/or are the result of transparent tenders. The complete opening of the electrical 
energy market is the basic precondition on which the planning of the electrical ene rgy sector is 
based in the Energy Development Strategy of Montenegro by 2030.  
3.13.   Starting from 1 January 2015, all electrical energy customers are qualified customers, which 
means that households obtained the right to choose their electrical energy suppliers.  
3.14.   The prices of electrical energy are formed freely in the organized market or by contract 
between seller and buyer. The Energy Law envisages limits in price increase for households and 
small -scale buyers, meaning that until a liquid market is formed, these  prices cannot be raised 
above the weighted price recorded during the previous year or above the futures for the 
subsequent year in the relevant stock exchange.  
3.15.   The electrical energy market in Montenegro consists of the wholesale and retail markets. 
Partic ipants in the wholesale market are the producers, traders, suppliers and buyers, self -
suppliers, the operator of the transmission system and the operator of the distribution system 
when they are buying energy to cover the losses in their own systems, where as participants in the 
retail market include suppliers and end buyers (consumers across all voltage levels).  
3.16.   In 2016, there were 36 participants in the wholesale electrical energy market. An important 
segment of the wholesale electrical energy market is th e allocation of available interconnector 
transmission capacities, which takes place via auctions which have been organized for the past 
several years in South -East Europe by the South East Europe Coordinated Auction Office 
(SEE CAO).  WT/TPR/G/369 • Montenegro  
 
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  3.17.   In order to create con ditions for efficient functioning of the transparent short -term electrical 
energy market on the national and regional levels, in August 2017, the Energy Stock Exchange 
was founded as a limited liability company ( Berza električne energije ). 
3.18.   In 2016, the sep aration of the distribution system operator from the vertically integrated 
electrical electric power company (EPCG) was finished, and a special electricity distribution 
company was formed – Crnogorski elektrodistributivni sistem  (CEDIS), which is extremely  
important for the appearance of new suppliers, and for invigorating and developing the retail 
market.  
3.19.   One of the general goals of economic and also energy development of Montenegro is the 
provision of sufficient amounts of electrical energy which allow ci tizens to live comfortably and 
companies to work and develop freely, while achieving the most favourable prices and meeting the 
high quality of services. To this end, in the previous period, the Government concluded 34 
concession contracts for the construc tion of small hydropower plants. The contracts stipulate the 
construction of 53 small hydropower plants, with total installed power of 94 MW and the planned 
annual production of around 310 GWh. The investment of approximately €138 million has been 
envisage d for this purpose.  
3.20.   Based on the signed agreements, another wind farm will be constructed – Možura Ulcinj, 
with the planned annual production of around 90 GWh. The first wind farm – Krnovo – was 
completed; the use permit has been issued and it has started to operate commercially, producing 
around 180 GWh.  
3.21.   The submarine cable which will transfer electrical energy from South East Europe to Italy 
and other countries of the European Union will give a special incentive to the development of the 
energy sector in Montenegro. This project is not only important as an energy connection between 
Montenegro and the European Union, but also as a means to increase energy supply security and 
to develop the region as a whole.  
3.22.   As for the gas market, the Government of Monteneg ro in late 2013 appointed the limited 
liability company Montenegro Bonus as the operator of the gas transmission system, even though 
gas infrastructure still does not exist in Montenegro. Since its appointment, Montenegro Bonus has 
been implementing many a ctivities which aim to allow the possibility of gasification of Montenegro, 
and during 2015, activities were implemented in two main work streams:  
- creation of necessary preconditions for the implementation of the Ionian Adriatic Pipeline 
project, and  
- participation in the implementation of other projects whose final goal is the gasification 
of Montenegro.  
3.5  Mineral resources of Montenegro  
3.23.   Mineral raw materials are natural resources which are owed by state, the use of it is carried 
out under the conditions and in the manner provided by the Law on Mining (OG MNE No.  65/08 as 
amended by 74/10 and 40/11), Law on geologica l researches (OG RM No.  28/93, 27/94, 42/94 
and 26/07) and Law on Concessions (OG MNE No. 08/09).   
3.24.   Mineral raw materials are representing the bas is for the development of every modern 
society. The importance of geological research and the discovery of new deposits of mineral 
resources is enormous, in that way the mining sector is growing, and with it the industry and other 
branches of the economy. Cooperation between government institutions and companies that are 
investing significant material resources in the processes of geological exploration and exploitation 
of mineral resources is extremely important.  
3.25.   In Montenegro, mineral resources, primarily  coal, have a significant place, and in the 
upcoming period, oil and gas are also expected. It is followed by metallic raw materials such as red 
bauxite, copper ore with supporting gold and silver metals, lead and zinc ore that with basic 
metals also conta in prospective quantities of silver, gold, copper, bismuth and cadmium, mercury 
ores, chromium and titanium ore, iron ore. Besides these, Montenegro has several types of WT/TPR/G/369 • Montenegro  
 
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  non-metallic mineral raw materials of extremely important reserves (architectural or d ecorative 
building stone, technical -construction stone, gravel and sand of glacial origin, bigar, bentonites, 
brick clay, cement marl, white bauxite, dolomites, barites, quartz sand, cherts, gypsum, sea salt). 
Montenegro has a significant number of groundw ater reservoirs, among which are mineral waters, 
which are under the authority of the Water Directorate.  
3.26.   So far, 26 types of mineral resources have been found in the territory of Montenegro. 
Today, based on concessions, 6 are exploited (lignite coal, brown  coal, red bauxite ore, lead and 
zinc ores, architectural or decorative stone and technical -construction stone), and in the previous 
period, 9 (cement raw materials, marl and tuff - Pljevlja, ore barite - Pljevlja, clay for brick and 
cement - Pljevlja, Ber ane, Bijelo Polje, Kolašin, Danilovgrad and Tivat, bentonite - Bar (Crmnica), 
tuff  - Savnik, white bauxite ore - Cetinje's capital, gravel and sand of glacial origin - Žabljak and 
the sea salt - Ulcinj), while 10 types of mineral raw materials were not in  exploitation (peat, oil 
and gas, ore mines, chromium ores and titanium ores, iron ores, copper ore, dolomites, quartz 
sand, chert and gypsum).  
3.27.   So far geological explorations have determined the reserves of available mineral resources 
at different levels, potential and exploitable. Except for four mineral resources (sea salt, mineral 
waters, groundwater and gravel and sands from the watercourse), which are part of the 
renewable, they remain non -renewable.  
3.5.1   Exploration and Production of Hydrocarbons (Oil & Ga s)  
3.28.   Results of previous studies, on land and in the waters, indicate that there are objective 
conditions for the formation of hydrocarbons. Finding oil and wet gas in the undersea of 
Montenegro confirm that in this area the mother rocks are present, and th at the thermal 
transformation level of organic matter is analogous to the oil and gas generation zone.  
3.29.   Territory of Montenegro is divided into blocks (grid -based system) having the size of 12 arc 
minutes East -West and 10 arc minutes North -South.  
3.30.   At its ses sion held on 25 December 2014, the Government of Montenegro adopted the 
Decree on Amendments to the Decree on Organization and Manner of Work of the State 
Administration (OG MNE No. 6/15), which establishes the Hydrocarbon Administration as an 
independent state administration body.  
3.31.   The Hydrocarbon Administration, in accordance with Article 7 of the Law on Hydrocarbon 
Exploration and Production (OG MNE No. 41/10, 62/13) and Article 33b of the Decree on 
Organization and Manner of Work of the State Administrat ion (OG MNE No. 05/12, 25/12, 44/12, 
61/12, 20/13, 17/14, 06/15 and 80/15), perform administrative and professional tasks in the field 
of research and production of hydrocarbons.  
3.6  Agriculture, fishery and forestry  
3.6.1   Agriculture  
3.32.   Agriculture is one of the most important development sectors in Montenegro. Agriculture 
sector has an important  role in the economy of Montenegro, with significant share in GDP, which in 
2016 including the forestry and fisheries sector amounted to 7.5%. Total gross value of 
agricultural  production in 2016 amounted to €476.4 million.  
3.33.   Montenegrin agriculture is characterized by a number of small,  fragmented agriculture 
holdings. Average size of holdings in Montenegro is 4.6 ha and this is the main reason for the lack 
of competitiveness of  Montenegrin small agricultural producers. According to the Agricultural 
Census from 2010, the total number of agriculture holdings was 48,870, on which 98,949 persons 
were engaged in agricultural activity. Sector of agriculture is the most important secto r for the 
development of rural areas of Montenegro, livestock breeding, given the lend configuration, 
represents most important branch. Livestock production allows Montenegro to use less productive 
areas (pastures and meadows), which are dominant in the st ructure of the total agricultural areas 
in Montenegro. Plant production is characterized by a large number of small agricultural holdings WT/TPR/G/369 • Montenegro  
 
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  which cultivate different plant crops. Favorable natural conditions allow the cultivation of citrus and 
continental fr uits, as well as almost all kinds of vegetables.  
3.34.   Bearing in mind the characteristics of Montenegrin agriculture, the future directions of 
development are focused on achievement of several strategic goals, which are: development of 
rural areas through inves tment in infrastructure and the growth of population standards in rural 
areas, increase productivity and competitiveness agricultural production, improvement of quality 
standards of agricultural products and systems of food safety, development of the proce ssing 
sector, encouraging the association of agricultural producers, conservation of biodiversity and 
environmental protection.  
3.35.   The agriculture and rural development policy of Montenegro is in line with the goals and 
directions of development defined by th e Agriculture and Rural Development Strategy 2015 -2020. 
Development strategy agriculture and rural areas was created with the aim of adequately defining 
the process of future reforms in this sector. The strategy provides an answer to the changed 
environmen t, caused by the external and internal factors and sets the basis for meeting upcoming 
challenges on the path of accession Montenegro in the EU. Considering that Montenegro is a 
country that has begun membership negotiations The EU opened the Negotiating C hapter 11 - 
Agriculture and Rural Development, an integral part of this document it also represents an action 
plan for harmonization with the EU acquis. During the development of the document and planning 
of assuming obligations under EU legislation, accou nt was taken especially of the obligations of 
Montenegro arising from membership in the WTO.  
3.36.   In order to fulfill the basic goals of agricultural development in Montenegro, which would 
ultimately need to have a sustainable and competitive sector, which enco urages balanced 
economic development in rural areas support, while maintaining the stability of rural population 
income and maintenance stability in food supply produced by the highest standards of food safety, 
Montenegro continued to invest in the agricul ture sector. Annual national support through 
measures of Agro budget has continued the amount of support in the period 2012 -2017 have 
increased, and it has been harmonized with the WTO Agreement on Agriculture.  
3.37.   In addition to the funds that are financed f rom national funds, Montenegro has, since 2012, 
started the project of supporting investments in agricultural farms, the so -called MIDAS Project 
(Montenegro Institutional Development and Agriculture Strengthening) implemented with World 
Bank, by co -financi ng principle. Within this project they are mostly supported investments in the 
construction of new facilities, the purchase of machinery, the modernization of production, and the 
level of support amounted to €6.47 million. In the continuation of the MIDAS project, for the 
preparation of agricultural manufacturers for the implementation of rural development programs 
(IPARD program – Instrument for Pre - Accession Assistance in Rural Development), the Ministry, 
with the support of the World Bank and European U nion, implements the IPARD like. Through the 
implementation of the project, support has been provided the amount of €3.6 million, of which 
€2.7 million is financed from EU funds.  
3.38.   Montenegro is a net importer of food and the coverage of imports by exports is at the low 
level, and in 2016, it was 11.4% in the year. In the period from 2012 -2017 exports had an uneven 
growth since year up to the year, while imports are still mild. The main export product has been 
wine for years. In addition to wine, export grow th is recorded in meat products, certain types of 
fruits and vegetables, beer, essential oils and medicinal herbs.  
3.39.   Policy of Agriculture and rural development includes several main elements:  
- Policy of Rural development aims to improve living conditions in  rural areas, the 
standard of living of agricultural manufacturers, the provision of necessary investments 
in infrastructure and improvement of the production process, increasing the 
competitiveness of domestic producers and improvement of processing capac ities, 
providing support in preserving traditional products, etc. Through the measures of rural 
development, at the same time, efforts are being made to strengthen institutional 
capacities, the basic goal is to prepare sector for future membership in the E U and the 
possibility of using funds from EU funds (IPARD).  WT/TPR/G/369 • Montenegro  
 
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  - Consolidated domestic support policy, which is financed from the national budget, is 
divided into rural development measures (green box) and direct support measures 
(amber box). Measures of rural development relate to payments directed at investments 
in farms aimed at improving quality of products, development of organic production, 
diversification of production, strengthening of processing on farms and others. Sectors 
supported through direct supp ort measures are: livestock breeding, production milk, 
cereals, crop and tobacco. In addition, there are certain programs of related payments in 
the sector Beekeeping. More dominant participation has support for rural development 
measures. The future direc tions of the reform direct payments policy will refer to a 
reduction in the number of measures related to related payments and separation of 
payment from production.   
- Institutional development and implementation of regulations that are in line with the 
Common Agricultural Policy European Union policies (EU CAP), aim to harmonize 
regulations with EU policies. Strengthening administrative capacities and construction of 
infrastructure for transposing of EU acquis into domestic ones Legislation is one of the 
priorities of future institutional development.  
3.6.2   Fishery  
3.40.   Fishery is a centuries -old branch of industry in Montenegro, represented in the fishing areas 
of the marine coastal area and Skadar Lake, which is of great importance for the economic 
development of co astal countries. It provides livelihoods, jobs and an important source of food for 
the domestic population of coastal communities and the development of local economies. In 
addition to the economic, fisheries in Montenegro has also important sociological a nd cultural role.  
3.41.   On the whole, the fisheries sector can be categorized as small, without industrial fishing 
(about 80% of Montenegrin fishing fleet uses gears for small -scale coastal fisheries), and is 
performed along the coast and on Skadar Lake (freshwa ter fishing).  
3.42.   Montenegro has valuable, but unused resources in this sector, due to poor development of 
fishing fleet. Total participation of Montenegro in catching fish in the Adriatic sea is less than 1% .4 
3.43.   In June 2015, the Fisheries Strategy of Montenegr o 2015 -2020 with the Action Plan was 
adopted, and it provides a general strategic framework, identifying the key steps which 
Montenegro intends to take in order to be prepared for the complete fulfillment of its obligations 
arising from the Common Fisherie s Policy. The Action Plan contains a detailed overview of activities 
that will address the current problem, such as berths of fishing vessels, places of first landings and 
sale of fish and strengthening the joint action of fishermen which is crucial for th e future 
functioning of this sector in the EU. The European Commission gave a positive opinion on the 
submitted Strategy and a very high assessment for the progress achieved.  
3.44.   Perspective of the development of fisheries in Montenegro, in accordance with th e strategic 
commitment 2015/2020, includes the modernization of fishing fleet, the transition to more 
selective gears, modernization and increase catching efficiency, achievement of European 
standards in terms of food safety, construction and equipping inf rastructure facilities on land for 
the purpose of storage and transportation, as well as solving the issue of berths of fishing vessels 
and fuel supplying.  
3.45.   Chapter 13 - Fisheries is officially opened on 30 June 2016 at the Intergovernmental 
Conference in B russels. Full compliance with the EU acquis in this chapter will be reached at the 
latest by the date of accession of Montenegro to the EU.  
3.46.   Fishery development support measures relate to marine fisheries and mariculture , as well as 
to freshwater fisheries and aquaculture. Specific measures to support fisheries include 
modernization of professional fishing fleet, respectively co -financing of professional fishermen in 
the cost of equipping, reconstruction, adaptation, repl acement of main generators and 
procurement of fishing equipment, replacement of fishing equipment with the purpose to increase 
efficiency when catching, or switch to more selective fishing gears. Support to improving the 
                                                
4 Source: Ministry of Agriculture and Rural development.  WT/TPR/G/369 • Montenegro  
 
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  competitiveness and efficiency of t he mariculture sector relates to co -financing fish breeders and 
shellfish breeders for the reconstruction of a breeding ground, the construction or reconstruction of 
facilities for storage of food and storage of equipment, procurement of equipment for 
automatization of the breeding process, procurement of equipment for improving hygiene in terms 
of food safety and placement of breeding products on the market.  
3.47.   Montenegro is a member of the General Fisheries Commission for the Mediterranean (GFCM) 
and is in p rocess for the accession to the International Commission for the Conservation of Atlantic 
Tunas (ICCAT).  
3.48.   Montenegro's policy in the field of fisheries is very dedicated to protect marine resources 
and establish a system based on sustainable fisheries, the  protection of marine biodiversity and 
the suppression of illegal unreported and unregulated fisheries (IUU fisheries). Therefore, we 
absolutely support the abolition of subsidies that support IUU fisheries and adversely affect already 
overexploited fish r esources. Yet, bearing in mind that Montenegro, due to the outdated fleet, has 
a poorly developed fisheries sector, we expect that the specificities of individual countries will be 
taken into account during future negotiations and during making decisions. For the same reason, 
Montenegro will continue to invest in the existing fishing fleet, but with constant awareness of the 
importance of sustainable fisheries and the protection of marine resources.  
3.6.3   Forestry  
3.49.   According to the National Forest Inventory data f rom 2012, Montenegro is one of the most 
forested State, where 59.5% of the State is covered with forest, and 9.9% makes non forest land. 
Forests and forest land cover 69.4% of the total territory of the country, which places Montenegro 
in the second place under forest cover in Europe, right behind Finland. Forestry is an important 
industry in Montenegro, especially in rural areas where the population in large numbers depends in 
some way on this natural resource.  
3.50.   The strategy with the forest development and  forestry development plan with the Action 
Plan has been adopted in 2014, in which guidelines are given how to improve and valorize this 
important natural resource. In 2017 , year is begun with the reform of the organization and system 
of forest management in cooperation with international experts and it is expected that the new 
concept will start with the realization in 2018.  
3.7  Customs system  
3.51.   The Montenegrin customs system is regulated by the Customs Act (OG MNE No.  62/13), the 
Law on Customs Tariff (OG MNE N o. 28/12) and the Law on Customs Service (OG MNE No. 3/16 
and 80/17), as well as by the by -laws for the implementation of the said Laws.  
3.52.   The Ministry of Finance is in charge of customs policy, while the Customs Administration is 
responsible for the implem entation of customs policy, which is supervised by the Ministry of 
Finance.  
3.53.   When placing goods for free circulation, the taxpayer is obliged to pay the customs debt in 
which the customs duties, value added tax and excise duty are included, if the excise g oods are 
imported. At the request of the participants in the customs procedure, the goods can be cleared 
out of working hours and/or outside official premises.  
3.54.   Customs duties are calculated and charged at a percentage rate in relation to the value of 
goods (ad valorem ) and in a certain amount per unit of measure for the mass of goods (specific 
customs duty). For a part of agricultural food products a combined customs duty is established, 
that is at the same time, " ad valorem " and specific customs duties ar e charged. Pursuant to the 
obligations set forth in the Protocol on Accession to the WTO for products for which the combined 
customs duty is applied, an upper limit of customs loading was established when importing them 
into Montenegro. The rates of duty p rescribed by international treaties apply only to goods with 
preferential origin from the countries covered by the contract. Pursuant to customs regulations, no 
export duties are charged.  WT/TPR/G/369 • Montenegro  
 
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  3.55.   The Law on Customs Tariff has given the authority to the Government of Montenegro to 
carry out harmonization of the level of customs rates with obligations undertaken within the 
framework of the World Trade Organization and other concluded international agreements in 
November each year for the next year. In this regard, th e Proposal for Decree on Customs Tariff 
(submitted to the Government for adoption) for 2018, the customs rates are fully compliant with 
the obligations undertaken in the process of Montenegro's accession to the World Trade 
Organization.  
3.56.   Namely, in the cont ext of obligations from membership of Montenegro in the World Trade 
Organization, in August 2017, the Ministry of Finance in cooperation with the Customs 
Administration carried out a comprehensive analysis of the nomenclature of the Montenegrin 
Schedule of  Concessions5, as a result of the WTO request to approve the Transposed Schedule of 
Concessions (from HS66 2007 to HS 2012). In September 2017, a consent was granted to the 
mentioned Schedule of Concessions. By the proposal of the Decree on Customs Tariff for 2018, all 
tariff positions are fully harmonized with the transposed S chedule of concessions. The said Decree 
is applied as of 1 January 2018.  
3.57.   The Government of Montenegro has demonstrated its commitment to the realization of the 
concept of trade facil itation, which has been stymied by the Agreement on Trade Facilitation of the 
WTO (TFA), by establishing the National Committee for Trade Facilitation (Committee). Namely, 
the Committee was established by the decision of the Minister of Finance in May 2015  and 
functions according to the principle of co -chairs between the Ministry of Finance and the Ministry of 
Economy. The composition of the Committee is currently co mposed of representatives of 
17 different bodies, of which 6 representatives of various priv ate sector associations. Its role is to 
monitor, coordinate and report to the Government of Montenegro on the dynamics of 
implementation of reforms related to trade facilitation at the national level.  
3.58.   In addition to the WTO Trade Facilitation Agreement, t he concept of trade facilitation is 
included in the CEFTA Additional Protocol 5. Also, the recommendations from the process of 
Montenegro's accession to the European Union point to a series of activities that need to be 
undertaken in order to facilitate tr ade. Bearing in mind the set of listed obligations, under the 
supervision of the National Committee for Trade Facilitation, the first National Strategy for Trade 
Facilitation is under preparation. The aim of the Strategy is to enable the process of reforms  
related to trade facilitation systemically to be rounded up for the forthcoming period, thus defining 
a common agenda for all border authorities on this issue. Expert support for the implementation of 
this document has been provided under the Trade Facili tation Support Program (TFSP) of the 
World Bank Group.  
3.59.   In addition, all projects in the field of trade facilitation, which are implemented or planned at 
the national level, are regularly reported at the sessions of the Committee. Also, all activities of 
this body are realized and coordinated in very close cooperation with representatives of the private 
sector.  
3.60.   In particular, within the mentioned TFS program, the Customs Administration, in 
cooperation with the International Finance Corporation (WBG member) , implements the Project for 
Implementation of Simplified Procedures and Full Implementation of the Program of Authorized 
Economic Operators. Following the successful completion of the pilot project in June 2017, the 
approval for simplified procedures on t he basis of the accounting entry was granted to the three 
companies, while proceedings are under way at the request of two companies. Also, after the 
realized activities related to simplified procedures, the Business Plan for the implementation of the 
program of the Authorized Economic Operators has been harmonized.  
3.61.   In addition to the above, within the TFSP program the first Time Release Study was also 
prepared, which was conducted according to the methodology of the World Customs Organization. 
The study m easured the average time needed for import, export and transit of goods, taking into 
account the total time required to complete all formalities, while separately measuring the average 
time of public and private actors. Also, the Study contains a number of  recommendations for 
                                                
5 Annex I of the Law on Ratification of the Protocol on the Accession of M ontenegro to the Marrakesh 
Agreement on the Establishment of the World Trade Organization.  
6 Harmonized system of the name and codes of the World Customs Organization.  WT/TPR/G/369 • Montenegro  
 
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  improving efficiency and overcoming bottlenecks in the implementation of procedures for import, 
export and transit of goods.  
3.62.   Within the aforementioned program, in the previous period, it was actively worked on the 
further improvement of the risk analysis system in the Customs Administration, while the further 
focus of the work will be on: improvement of the previous control of the entities applying for 
approval for simplified customs procedures, improvement of the ex post control, exte nsion of the 
application of simplified procedures, development of the AEO Program and accompanying 
documents for its full implementation and implementation of the AEO Pilot Project.  
3.63.   In addition, the Customs Administration, in cooperation with the German O rganization for 
International Cooperation - GIZ, and within the Global Alliance for Trade Facilitation, implements 
the Project "Pre -Processing of Data for Accelerated Consignments". The project will enable the 
development of additional functionalities of t he customs information system, a customs declaration 
or an appropriate simplified document to be submitted to the customs authority electronically, 
before the goods arrive in the customs territory of Montenegro. The goal of the project is to 
increase the n umber of consignments that will be released for free circulation immediately after 
arrival (within 1 hour at the latest), from the current 25% to 65%.  
3.64.   Through the Project "Support to the Customs Administration" funds from IPA 2014 have 
been provided for t he establishment of the National Computerized Transit System (NCTS) and the 
implementation of activities related to the accession to the Convention on Common Transit and the 
Convention on Trade Facilitation. In accordance with the above, activities on the preparation of 
tender documentation for implementation of IT implementation contracts and business support 
contracts are in progress. Montenegro's accession to conventions will enable faster, cheaper, safer 
and easier movement of goods, as well as better c ontrol over movement of consignments.  
3.65.   At the beginning of the second quarter of 2017, at the level of CEFTA 2006,  has started the 
implementation of a project funded by the European Union, and supported by the Ministry of 
Economic Cooperation and Developme nt (BMZ) of the Federal Republic of Germany, while GIZ and 
International Trade Center (ITC) are in charge of the implementation. The main objective of the 
Project is to strengthen trade relations and deepen economic integration among CEFTA 2006 
Parties. Th e project is designed to support all CEFTA structures in their efforts to implement CEFTA 
commitments to Additional Protocol 5 and thus simplify and facilitate trade procedures in the 
region. The innovative approach of the project is reflected in close coo peration with the private 
sector (buttom -up approach) in the two approved sector supply chains. Direct involvement of 
enterprises will contribute to more efficient identification of trade barriers, which will provide the 
necessary framework for improving t rade between CEFTA 2006 Parties.  
3.66.   Decision of the Joint Committee of the Regional Convention on Pan -Euro Mediterranean 
Preferential Rules of Origin, No. 2/2017, which introduced full cumulation of origin and tax refund 
in trade between CEFTA 2006 Parties, was adopted in May this year. The beginning of the 
implementation of the Decision is envisaged for 2019. The introduction of full cumulation and the 
possibility of tax refunds will facilitate and simplify the management of the rules of origin for 
economic entities from the CEFTA 2006 Parties, and will also significantly increase the trade flows 
and economic integration of the CEFTA Parties. The application of these institutes will contribute to 
increasing the competitiveness of the CEFTA region in the Pan -Euro-Mediterranean Free Trade 
Area, and hence economic growth, development and integration.  
3.8  Sanitary and Phytosanitary Measures  
3.67.   Montenegro has adopted amendments to several framework laws and has adopted a new 
law, since the WTO accession. Amended laws  are the following : Vet erinary Law (OG MN E 
No. 30/2012  and 48/2015) and the Law on Plant Health Protection (OG MN E No.  28/2006, 
28/2011  and 48/2015). The new Law on food safety was adopted in 2015 (OG MN E No.  57/2015). 
Also, a number of by -laws on food safety, veterinary and phytosanitary areas have been adopted. 
The adopted legislation is fully aligned with the European legislation for Chapter 12 - Food Safety, 
Veterinary and Phytosanitary policy.  
3.68.   Legislation  on SPS is implemented by the respective structures under the Ministry of 
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  phytosanitary Affairs. There are 12 Border Inspection Points under the Administ ration for food 
safety, veterinary and phytosanitary affairs. The inspection procedures of BIPs are in conformity 
with the legislation, which is in the alignment process with the EU acquis.  
3.9  Technical regulations and standards  
3.69.   Since 2012 , Montenegro has continued with adopt ion of technical regulations for industrial 
products in order to harmonize national legislation and remove barriers to trade. In accordance 
with the national legislation, the Ministry of Economy has been recognized as a contact point for 
the notification o f technical regulations and conformity assessment procedures under the WTO 
Agreement on Technical Barriers to Trade.  
3.70.   Institute for Standardization Montenegro (ISME) is competent for adopting of Montenegrin 
standards. The number of Montenegrin standards and  related documents that are identical with 
European and international standards is 17,102 by the end of 2017. In order to strengthen the 
standardization system in Montenegro, the Strategy for the Development of Standardization in 
Montenegro was adopted in 2014. Since 2012, the Institute for Standardization of Montenegro has 
signed bilateral agreements with the Institute for Standardization of Turkey (February 2014) and 
the competent body for standardization of China (September 2016), while 2015 Memorandum o f 
Understanding with the American Society for Testing and Materials was concluded.  
3.71.   In order to strengthen the Accreditation Body of Montenegro (ATCG) and the accreditation 
system, the Accreditation Development Strategy in Montenegro was adopted in 2014. In  addition, 
in order to improve the legislative framework, the Law on Amendments to the Accreditation Act 
was adopted in 2015. By the end of 2017, 34 bodies for conformity assessment were accredited 
(21 testing laboratory, 6 control bodies, 1 medical labora tory, 2 calibration laboratories, 
1 certification body for product and 1  certification body for management systems).  
3.72.   The Strategy for the Development of Metrology in Montenegro 2016 -2018 defines the goals 
and directions of development in order to improve t he metrology system. Metrology activities in 
Montenegro are performed by the Bureau of Metrology (BoM) accredited by the Accreditation Body 
of Montenegro and the Croatian Accreditation Agency for Calibration Activities in accordance with 
the requirements o f the MEST EN ISO/IEC 17025:2011 standard. The Bureau of Metrology 
represents Montenegro in regional and international organizations: EURAMET (European 
Association of National Metrology Institutes) - member, OIML (International Organization for Legal 
Metro logy) - Associate Member, WELMEC (European Legal Metrology) - Associate Member, CGPM 
(General Conference on Weights and Measures) - Associate Member. A full membership of 
Montenegro in the International Bureau for Weights and Measures (BIPM) is expected in  2018.  
3.73.   Montenegro is committed to further strengthening the legislative framework, in accordance 
with the best international experience and practice in all areas of the quality infrastructure that are 
the basis for free trade, as well as continuing work on  strengthening administrative capacities as a 
prerequisite for the effective implementation of legislation.  
3.10  Trade in services  
3.74.   Montenegro as a small and highly open economy is strongly oriented towards the services 
sector. The volume of services grows every  year, and most importantly, Montenegro in this area 
consistently achieves surpluses. The surplus in services ranged from 15.3% of GDP in 2010 up to a 
maximum of 21.6% of GDP realized in 2015. In 2016, the surplus amounted to 19.4% of GDP. 
Exports of servi ces ranged from 25.8% of GDP, which was in 2010 up to a maximum of 33.2% of 
GDP, which was in 2015. In 2016, a high inflow from service exports was also achieved, and it 
amounted 31.7% of GDP, which is 3.6 times higher than that of export of goods in the s ame year.  
3.75.   Looking at the structure of revenues from services in the period 2010 -2016, revenues from 
tourism were 67, 3% out of total revenues and they represent the main generators of revenue 
growth from services. The following revenues in the transport se ctor with a share of 17.4%, 
followed by a significantly smaller share revenues amounted in the area of other services (7.2%) 
and revenues amounted in the construction services and other business services (by 3.6% and 
4.5%). The significant investments, esp ecially foreign direct investments in the area of tourism WT/TPR/G/369 • Montenegro  
 
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  and infrastructure, have resulted in an increase in tourism revenues from €125 million in 2002, to 
€821.5 million, in 2016.  
3.76.   When it comes to the import of services during 2010 -2016, it ranged from 9 .5% of GDP to 
12.3% of GDP. During this period, the most paid were services in the field of transport (37.1% of 
total expenditures of the services), followed by other services (23.1%), other business services 
(21.6%), services related to tourism (10.3%) an d construction services (7.9%).  
3.10.1   Tourism  
3.77.   In line with key strategic commitments of the State of Montenegro, the sector of tourism 
and travel is perceived as one of priorities for development. It earned such position due to 
continuous growth of all important  parameters in tourism and growth projections for the future 
period. The first screening of tourism in the negotiations with the EU was done in 2012, and 
activities were undertaken in all important aspects, including the enhancement of the legislative 
framework, preparing strategies, diversifying tourist product etc. until and including 2017. The 
tourist product of Montenegro is predominantly based on the activities relating to the coastal area 
(the Adriatic Sea) while additional efforts are being made to f urther diversify the tourist product 
and valorise comparative advantages in other parts of Montenegro so as to overcome seasonal 
character of the destination which is characteristic of Mediterranean destinations.  
3.78.   In the period between 2012 and 2016, reven ues from tourism increased by 25%, number of 
tourists increased by 26% and number of overnight stays by 22.9%. According to estimates made 
for the first 10 months of 2017, Montenegrin tourism still records a growth trend in all major 
parameters, including also the very important return and increase in the number of tourists from 
traditional markets – Great Britain, France, Germany, growth from Scandinavian countries and 
from the markets of the former USSR republics, including also attracting new markets - Israel, 
UAE, and PR China through regional tours largely as a result of visa -free regime for organized 
tourist arrivals. To achieve further growth from important markets, better accessibility of the 
destination, and especially important is the air -accessibi lity. This is the reason why we are 
currently in the process of selecting a consultant for the improvement of incentive models, while 
further improvement of the capacity of airports is inse parable from this activity.  
3.79.   The enhancement of legislation has been  a continuing activity. Thus, the new Law on 
Tourism and Hospitality was adopted in December 2017. The key novelties of this Law relate to the 
introduction of new types of hotels and models of operations in hotels, aligning provision of tourist 
and hospita lity services with modern trends in underdeveloped areas, support to investors, as well 
as the implementation of the EU standards.   
3.80.   The commitment of Montenegro to sustainable development is of great importance to 
tourism. The National Strategy for Sustai nable Development until 2030 was adopted in 2016 and 
its aim is to improve national policy of sustainable development by setting up a comprehensive 
framework for national response to challenges which will be faced on the path to sustainable 
development of the Montenegrin society until 2030, while taking into account the results of 
implementation of the previous National Strategy and the requirements in the process of 
Montenegro's accession to the EU. Strong competition among destinations and tourists' 
expec tations require well designed and strategically managed marketing activities, which is why 
the development of the Strategic Marketing Plan for Tourism in  Montenegro for the period 
2018-2022 is in its final stage. Preparatory activities for the development of the Health Tourism 
Strategy and the Rural Development Strategy are equally important, including also further 
activities based on the current Study on the Development of Sports Tourism.  
3.81.   Due to stimulating environment, Montenegro attracted some of the lar gest investments in 
this part of the Mediterranean and the entry of a number of leading hotel brands has been 
recorded. It has also been planned to valori se the areas of Long Beach (Velika plaza), Buljarica, 
Jaz and a number of localities in the north of t he country. In the period between 2012 and 2016, 
Montenegro improved its tourist offer with 57 new 4 -star and 5 -star hotels (nearly 5,000 new 
beds), and with 22 more 4 -star and 5 -star hotels (1,081 beds) in 2017. In 2017, 16 building 
permits were issued an d 16 more building permits for 4 -star and 5 -star hotels are in the process of 
being issued.  WT/TPR/G/369 • Montenegro  
 
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  3.82.   Using the Adriatic Sea as our main resource, we include as one of our advantages the 
growth of nautical tourism that we associate with the growth of turnover in the  Port of Kotor, 
named among 10 busiest cruise ports of the Mediterranean, and also with the beginnings of 
cruising in the Port of Bar and with the growing importance of luxury marinas along the 
Montenegrin cost. The Study of Development of Bar as a cruisin g destination, showing the 
potential for further development of cruising, was also prepared. It is also planned preparation of 
the Strategy for Sustainable Development of Nautical Tourism.  
3.83.   The valorisation of cultural heritage is also one of a number of pr iorities and the activities 
with a view to selecting the author for the development of the Strategy of Development of Cultural 
Tourism with an Action Plan until 2023 are ongoing. This is important if we take into account that 
Montenegro has rich cultural a nd historic heritage from different historical epochs, out of which 
4 sites are on the UNESCO list, 4 sites are on the tentative list, while an important place will be 
accorded also to intangible cultural heritage and programmes of support for further deve lopment 
will be defined. This segment also includes ongoing activities through TAIEX project "Economic and 
Reputational Valorisation of Cultural Heritage of Montenegro", as well as with Paradores de 
Turismo, aimed at valorisation of fortresses from differe nt periods on sustainable bases. The 
activities aimed at making a replica of the Crnojević Printing House, the first one in the Southeast 
Europe are also ongoing.  
3.84.   We should also note the existence of five national parks and other protected natural sites, 
water abundance, which are good preconditions for the growth of nature -based tourism. Within the 
diversification of the nature -based tourist product, Hiking & Biking projects, panoramic routes, 
snowshoeing etc. are also worth mentioning. The Peaks of the Ba lkans, a joint project of 
Montenegro, Albania and Kosovo, was awarded the first prize of the World Travel & Tourism 
Council in 2013.   
3.85.   The efforts are also being made to valorise the advantages of the northern part of 
Montenegro in order to achieve better regional balance, and a precondition to accomplish that is to 
make investment in the section of the highway which will connect the north and south of the 
country. Some of the largest projects include the development of ski resorts with focus on 
Bjelasica a nd Komovi regions. In the initial phase, priority has been placed on three localities – 
Kolašin 1600  in Kolašin, Žarski  in Mojkovac and Cmiljača  in Bijelo Polje, for which it has been 
planned to invest around €70 million by 2022. In 2018, it has also been planned to make 
investments in the existing ski resorts Durmitor and Hajla. A company named "Montenegro Ski 
Resorts" (DOO "Skijališta Crne Gore") has been founded, which institutionali zed further 
development of project activities in this area. The activiti es are also carried out in order to valorise 
the speleological heritage of Djalovica Cave ( Đalovića Pećina ), while the value of the works has 
been estimated at €13 million. In both of these projects, the subsequent management has been 
planned to be impleme nted according to the model of private -public partnership.  
3.10.2   Transport  
3.86.   In accordance with strategic objectives of the Government of Montenegro, in the transport 
sector, continuous improvement is being done for the transport infrastructure through responsible  
use and efficient planning, quality maintenance and management of the transport infrastructure. 
The Berlin Process, as one of the most important regional cooperation platforms, began in Berlin 
on 28 August 2014, during the first Western Balkans Conference . The Berlin process focuses on 
economic governance and infrastructure connectivity projects, through several financial programs 
(e.g. the Western Balkans Investment Framework (WBIF)) and various types of instruments aimed 
at identifying and supporting nat ional investments, in line with existing EU transport initiatives. 
Montenegro benefits from the Berlin process and continuously invests in attracting transit traffic 
flows, seeking ways to finance development projects that do not imply new credit indebtedn ess, 
investing efforts for the continued development of state roads with full respect for safety and 
security standards, supporting airport modernization and expanding ports capacity.  
3.87.   The continuation of the intensive activities within the framework of the  Western Balkans 
Connectivity Platform - Connecting Agenda (so -called Berlin Process) is carried out through the 
definition of the Main Western Balkans Transmission Network within the indicative expansion of the 
Trans -European Transport Network (TENT), ide ntification of the most significant projects related to 
the indicative expansion of the corridor of the main transport networks for the Western Balkans, 
included in the Single National List of Projects, are continually making efforts to create the Single WT/TPR/G/369 • Montenegro  
 
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  Project pipeline and implementing soft (reform) measures that will facilitate the transport and 
trade of the countries of the Western Balkans. The main transport network in the Western Balkan 
region is now included in the expansion of the three key Trans -European Corridors to the Western 
Balkans region (Mediterranean Corridor, Middle East -Eastern Mediterranean Corridor and 
Rajna -Dunav Corridor).  
3.88.   At the Fourth Summit of the Presidents of the Western Balkans Six (WB6), held in Trieste, 
on 12 July 2017, the Pri me Minister of Montenegro signed the Agreement on the establishment of 
the transport community in the original in English language and in Brussels on 9 October 2017 in 
the original in Montenegrin language and in the official languages of the institutions o f the 
European Union and foreign signatories from South East Europe. The agreement on establishment 
of the transport community in the Western Balkans region will serve for better and faster 
integration of transport markets, better treatment of transport op erators in a non -discriminatory 
manner in terms of their access to transport infrastructure, the desire of each individual Southeast 
European (SEE) partner to comply with its transport laws and related issues with EU laws, 
including the future development of the Union's legal framework, provide significant technical 
support, including better addressing the challenges and needs of environmental protection and the 
fight against climate change, enable the development of the transport sector in a sustainable wa y, 
enable more adequate consideration of the social dimensions of the transport community and 
establish the structure of social dialogue with the SEE Contracting Parties and by this way will 
support the resolution of the candidate and potential candidate c ountries to come closer to the 
European Union and enforce its legal framework, especially in the field of transport.  
3.89.   The Ministry of Transport and Maritime Affairs has drafted the Transport Development 
Strategy 2018 -2035, which establishes the continuity o f the long -term strategic framework for the 
assembly, coordinates the national system with the European standards of sustainable 
development and ensures the respect of the socio -economic needs of the population. Through this 
Strategy, priority is given to the traffic network, traffic infrastructure is defined and needs and 
plans for implementation are identified, and infrastructure investments are prioritized.  
3.90.   Regarding the functioning of the railway market and the import and export that takes place 
through  the railways of Montenegro with the legal solutions from 2013, conditions have been 
created for the smooth entry into the market of private operators, with equal conditions for doing 
business as domestic operators. Licensing procedures are implemented in accordance with 
European rules and as such apply with neighbo uring countries, coordinated with customs, police 
and food inspection services.  
3.91.   Air traffic services are regulated by the Law on Air Traffic and by the Law on Obligatory 
relations and the basis o f property -related legal relations in air traffic. These laws regulate the 
provision of services in the field of air traffic in a competitive and non -discriminatory manner in 
accordance with ECAA (European Common Aviation Area ). 
3.92.   Access to the market of pas senger and cargo traffic is regulated by national legislation and 
bilateral agreements on road transport. Regarding the system of issuing the licen ces and permits 
for transport, we are fully compliant with EU legislation. Cabotage is prohibited in Monteneg ro, as 
well as in other countries, except in special cases (when it can be approved).  
3.93.   In maritime transport, there are no limitations regarding services provision, nor regarding 
access to international lines between Montenegrin and foreign ports. Montenegr in ships are 
authorized for cabotage when it comes to transportation of passengers and cargo between 
Montenegrin ports. However, it should be noted that the question of liberalization of maritime 
cabotage will be harmonized with the EU acquis during the ac cession of Montenegro to the EU.  
3.94.   Construction of the first section of the Bar -Boljare highway in the length of 41 km began on 
15 May 2015. The deadline for the construction of this section is four years. The total amount for 
the construction of this section is €809.6 million, out of which 85% of the amount (688 .16 million) 
is financed through the Chinese EXIM bank through a 20 -year long loan, while the remaining 
amount (121. 44 million) is secured through the state budget.  
3.95.   The most demanding section Smokovac -Uvač-Mateševo in construction and financial terms 
is defined as a priority section because of the significance it has as a centr al road which connects WT/TPR/G/369 • Montenegro  
 
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  north and south of Montenegro. Through the implementation of this project it is expected that 
there will be: significant decrease of the number of traffic accidents, increase in the access to the 
areas which are difficult to access, increase in mobility, significant demographic changes, changes 
market business conditions and increase of competition of enterprises, facilitated access to the 
regional market, and decrease of the related expenses of procurement, better valorization of 
potential from the field of agriculture, forestry and water management, development of tourism; 
employment increase and change of the employment structure, better usage of the potentials of 
the Port of Bar and the container terminal and their better connectio n to the gravitational zone, 
direct engagement of domestic construction operation potentials, equipment, materials and 
workforce in the construction phase, which will have multiplied effects with indirect benefits and 
the appearance of the so -called newly created/generated traffic and economic benefits on basis of 
the newly created/generated traffic.  
3.10.3   Banking sector  
3.96.   Montenegro's financial system is prevailed by the banking sector whose assets make up 
about 90% of the financial system assists - which is about  100% of GDP, according to the IMF. 
Thus the Central Bank of Montenegro (CBCG) plays an important role as a banking system 
regulator and supervisor, and also as an institution which creates and implements microprudential 
policy with the main goal of mainta ining the financial system stability as a precondition for the 
economic growth.  
3.97.   Fifteen banks operate in Montenegro's banking system. Five banks are domestically owned, 
ten banks have mainly foreign capital, while the state's share in the banks' capital o ver the past 
few years averaged at less than 3%. In that period, foreign banks' subsidiaries in Montenegro held 
more than three quarters of the banking sector assets and almost equally as high share in total 
deposits.  
3.98.   Since 2012, banks' assets have increa sed by 45%, amounting to €4,095.6 million at 
end-September 2017. The increase in assets was driven mainly by the investment in securities, 
whereby the government portfolio gained importance. However, loans maintained their highest 
share in assets, increasi ng almost by 40% by September 2017 when they reached 
€2,594.4  million, as a result of the moderate annual increase of 0.7%. This was a result of the 
mismatch between the banks' increasing liquidity and the fact that they raised their credit 
standards, indu cing a mild credit growth in the private sector, which accounts for the main share 
of non -performing loans (NPLs) in Montenegro's banks. Credit growth was boosted only in 2017, 
as a result of an increased  competition between banks, induced by the establis hment of four new 
banks (three foreign -owned banks and one domestic MFI transformed into a bank) encouraged by 
the favourable business environment in Montenegro.  
3.99.   Increased competition also contributed to the reduction of effective lending interest rates by  
several percentage points, making loans more available to a wider spectrum of potential banks' 
clients. Credit growth also benefited from the NPL decline, with their share in total loans dropping 
from 17.6% at end -2012 to 7.1% at end -October 2017. Such de velopments were mainly due to 
the following two factors: the implementation of the EU regulation by the foreign parent banks of 
the Montenegrin subsidiaries, some of which accounted for the main share in NPLs in Montenegro, 
and the implementation of the th ree-year strategies and annual action plans for NPL reduction 
starting as of 2014. These factors were an important part of the NPL reduction project 
implemented by the CBCG in cooperation with the World Bank, between 2012 and 2014 (the so 
called Podgorica Approach). The Law on Voluntary Financial Restructuring of Debts towards 
Financial Institutions, as yet another important segment of this NPL resolution framework, did not 
show its full effectiveness before it was amended in June 2017, after which it resul ted in more 
than €11.2 million of restructured loans over the period of only five months. All the above 
mentioned developments were reflected on the improvement of the banks' assets quality.  
3.100.   As of 2012, the banking activities have been increasingly financ ed by deposits, which, on 
average, accounted for 77% of total assets, while parent banks' loans declined. Loans to deposits 
ratio declined (0.9 in October 2017) as a result of a more robust growth of deposits in relation to 
that of loans, and it continued regardless of the effective deposit interest rates' decline in the 
range of a few percentage points, followed by the decline of lending interest rates. Deposits 
reached 60% by end -October, growing by 10% annually on average, mostly due to the increase of 
41% in retail deposits, which made up 56% of total deposits on average over the observed period. WT/TPR/G/369 • Montenegro  
 
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  However, in the past several years, corporate deposits increased due to higher liquidity, which was 
a result of high investments in infrastructure and tourism i n Montenegro.  
3.101.   Since 2012, banks' capital has made up an increasing share in total liabilities, rising by 
more than 80% to €523.2 million by end -September 2017. Banking sector's exposure to liquidity 
risk has been low, as presented by the liquid assets to short-term liabilities ratio, which averaged 
at 36.6%, considerably above the regulatory minimum.  
3.102.   Over the past few years, the Montenegrin banking system implemented a set of regulatory 
and institutional reforms, including, inter alia , the regulation of the credit consumer protection. In 
2017, the Law on Voluntary Financial Restructuring of Debts towards Financial Institutions was 
amended with a view to supporting loan restructuring as a means for NPL reduction. In 
November  2017, the Central Bank of Monte negro Law was amended in the aim of reinforcing the 
supervisory framework of the financial sector by strengthening the institutional, financial and 
personal independence of the CBCG, an enabling the regulation and supervision of the payment 
system institut ions, including the e -money institutions in line with the EU Directive on the EU 
payment systems. At the same time Montenegro adopted the new Law on Financial Leasing, 
Factoring, Purchase of Receivables, Micro -Lending and Credit -Guarantee Operations, cover ing 
some of these financial market mediators by the CBCG's regulations and supervision for the 
first time, with a view to increasing efficiency in providing services on the supply side and 
consumers' rights protection on the demand side. Regulation and sup ervision, especially over 
factoring companies (special purpose vehicles) will increase the financial system transparency and 
improve the supervision of contamination risk arising from the transfer of banks' assets to their 
subsidiaries. In the upcoming per iod, Montenegro will target its activities to creating conditions for 
further strengthening of financial sector and financial stability supervisory framework by adopting 
a new Banking Law, in order to improve conditions for reaching higher quality of capit al, liquidity, 
and lending buffers by transposing the European CRD IV -a7 and adopting amendments to the 
Banking Law, Bank Resolution Law, and Deposit Protection Law in order to improve the bank 
resolution framework.  
3.10.4   Insurance  
3.103.   The regulatory framework in t he insurance sector is established through three main laws: 
the Law on Insurance, the Law on Compulsory Traffic Insurance and the Law on Liquidation and 
Bankruptcy of Insurance Companies. By establishing the relevant legislative framework, a portion 
of the  regulatory and supervisory function has been entrusted to the Insurance Supervision 
Agency, whilst a portion is retained under the competence of the Ministry of Finance. Previous 
normative activities in the insurance sector were dominantly oriented toward s harmonization of the 
Montenegrin regulatory framework with the relevant directives of the European Union, therefore a 
full compliance with the EU regulatory framework of Solvency I has been achieved. After opening 
negotiations with the European Union on the Chapter 9 – Financial Services, the Insurance 
Supervision Agency has been working on further amendments and adoption of new regulations in 
the insurance sector, aimed at harmonization with the directive of the European Union (which 
came into effect in 2016). The respective new regulation of the European Union includes 
comprehensive standards under the accompanying implementation measures and new guidelines 
for supervision, which represent the main focus in operations of the Insurance Supervision Agency 
and the Ministry of Finance for the upcoming period.  
3.104.   There are ten insurance companies operating on the Montenegrin market, five in the 
segment of life insurance and five in the segment of non -life insurance.  
3.105.   Insurance market of Montenegro, under the cond itions of the relevant regulatory 
framework and adjustments to the EU standards, is characterized by stability and continuous 
growth, which is shown by relevant indicators. Namely, the total gross written premium in the 
period 2012 -2016 grew in the average  rate of 4.4%. Regarding the insurance groups, such growth 
has been generated by the growth in both segments. The total non -life insurance premium in the 
observed period noted growth in the average rate of 3.66%, whilst the total life insurance 
premium not ed growth in the average rate of 8.75%. The share of gross written premium in the 
gross domestic product during the period 2012 -2016 remained at almost the same level of 2.1% 
                                                
 7 Transposing the European legislation governing banking operations (CDD IV package, co mposed of the 
Directive 2013/36/EU and the EU Regulation 575/2013).  WT/TPR/G/369 • Montenegro  
 
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  and followed the growth of gross written product. Moreover, the gross written pre mium per capita 
noted growth from €107.83 in 2012 to €128.78 in 2016, which represents a growth of 19%. 
During the observed period, the Montenegrin insurance sector was also characterized by reduction 
in concentration and the growth of market competition, development of product portfolio, 
especially in life insurance, growth of solvency ratio and growth in the share of voluntary 
insurances.  
3.106.   In the period since 2012, the negative effects of global trend in low interest rates have 
continued to impact Monteneg rin insurers in the domain of placement of funds, particularly in the 
field of life insurance. The return on investment has been continuously low, reverting insurers to 
additional cost reduction and shifting the focus to development of new products that ar e adjusted 
to the low interest rate environment.  
3.10.5   Electronic communications  
3.107.   The Law on Electronic Communications (OG MNE No. 40/2013, 56/2013 and 2/2017) 
created conditions for the further development of electronic communication networks and services, 
ensuring competition in the market, open and equal access to networks and services of electronic 
communications, encouraging efficiency, cost -effectiveness and the introduction of new 
technologies and services in this sector, more efficient protection of the i nterests of users of 
electronic communication services, provision of Universal Service with reduced prices and higher 
quality, rational use of limited resources (radio frequency, numbering and address), transparency 
of all subjects on market, easy access t o price information, expenditures and terms of providing 
electronic communication services, efficient supervision of general conditions of service 
provisioning and subscription contracts, security of communications, the declared quality and 
respect of tech nical regulations and standards.  
3.108.   In accordance with the provisions by the Law, a whole set of regulations and acts have 
been adopted in order to regulate electronic communications market in more detailed manner. In 
2016 the Strategy for Information Society  Development for the period 2016 -2020 was adopted, 
having Strategy for development of Broadband Internet Access as its integral part. As one of the 
main prerequisites for further social and economic development of Montenegro and its transition 
towards digi tal society, the provision of availability of high speed broadband is foreseen as follows:  
- fast speed broadband access (30 Mbit/s or higher) ⇒ coverage: 100% of population by 
2020, and  
- ultra-fast speed broadband access (100 Mbit/s or more) ⇒ usage: 50% of households by 
2020.  
3.109.   High-end technologies are currently integrated into electronic communication networks in 
Montenegro thus offering to domestic users all electronic communication services that are 
available globally. Operators continuously invest signif icant amounts in the development of 
infrastructure for high speed broadband access, better quality and availability of services, provision 
of spectrum necessary for the development of 4G8 networks and services. The penetration of 
broadband Internet access is above 70%, while market share of operator with significant market 
position in the fixed segment has been constantly decreasing. All major operators have already 
migrated their networks to the IP9 environment, so they provide voice, data transmission, an d 
distribution of AVM10 content over a single network based on IP.  
3.110.   With 99% of population coverage with signal of mobile networks, Montenegro can be 
compared with the most developed Europe countries. Coverage of the territory is over 90%. The 
population co verage with 3G11 signal is significantly improved and it is now higher than 90% in all 
of three operators networks. The most up -to-date LTE12 technology is currently available on cca 
70% of Montenegro's territory, and cca 90% of the population is also covere d with LTE signal. 
Given the number of users, degree of competition, variety of services and applied technologies, it 
                                                
8 4G –4th generation networks . 
9 IP- Internet Protocol . 
10 AVM - Audio Visual Management . 
11 3G – 3rd generation networks . 
12 LTE – Long-Term Evolution . WT/TPR/G/369 • Montenegro  
 
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  can be considered that mobile communication networks and services represents the most 
developed segment of the electronic communications m arket in Montenegro.  
3.10.6   Postal services  
3.111.   The Law on Postal Services (OG MNE No. 57/11 and 55/16) regulates the conditions and 
procedures for the provision of universal postal service and other postal services, as well as other 
issues of importance for the pro vision of postal services. In accordance with this law, a reserved 
postal service (a reserved postal service is part of universal postal service performed by a 
universal postal operator, limited by weight and price - 50 gr/mail) ceased to exist as of 
1 January 2013. Regarding the improvements in postal sector in 2018, the Law will be amended, 
and it is also planned to prepare a new Strategy for the development of postal sector for the 
period 2019 -2023.  
3.112.   All Postal Operators delivered a total of 23,290,341 po stal services in 2016, which is 6.6% 
more than in 2015.  
3.11  Intellectual property rights  
3.113.   The main strategic document in the field of intellectual property - National Intellectual 
Property Strategy was in force in the period 2012 -2015. The above mentioned stra tegy has 
significantly contributed to improvement of the situation in this field. A special working group has 
been established in order to monitor its implementation. As a main strategic goals  were recognized  
the following: improved enforcement of intellec tual property rights, i ncreased economic growth 
through effective use of intellectual property, improved methods of acquiring and managing of 
intellectual  property, better understanding of the usage and the value of intellectual property by 
the companies a nd the public, as well as the importance of the enforcement of intellectual property 
rights and improvement and modernization of information systems in terms of intellectual property 
issues.  
3.114.   During the period 2012 -2017, several amendments to the laws in the field of industrial 
property were adopted, namely: Law on Trademarks (OG MNE No. 72/10, 44/12, 18/14, 40/16 
and 2/17), Law on Legal Protection of Industrial Design ( OG MNE No. 80/10, 27/13, 42/16 and 
2/17) and the Law  on the Protection of Topography of Semiconductors (OG MNE No. 75/10 and 
40/16). In 2015 , a new Patent Law (OG MNE No. 42/15 and 2/17) was adopted. The subject 
amendments have additionally enhanced the legal framework, both in terms of harmonization with 
the relevant international agreements and the European Union legislation, as well as in addressing 
the problems identified in the application of the laws. In 2016, amendments to the Law on 
Copyright and Related Rights (OG MNE No. 37/11 and 53/16) have been adopted, by which the 
status of authors and holders of related rights has been raised to a higher level. Notifications in 
relation to the changes of national legislation were regularly submitted to the World Trade 
Organization.  
3.115.   Concerning the accession to relevant international agreements, Montenegro ratified the 
Protocol Amending the TRIPS Agreement (Agreement on Trade -Related Aspects of Intellectual 
Property Rights) and the International Convention for the Protection of New Varieties of Plants in 
2013.  
3.116.   In accordance with the new Law on Courts (OG MNE No. 11/15) the Commercial Court of 
Montenegro in 2015 became competent for resolving all disputes in the field of intellectual 
property.  
3.117.   In 2017, the Coordination Team for the Enforcement of Intellectual Prope rty Rights was 
established, consisting of representatives of the Ministry of Economy, Intellectual Property Office, 
Customs Administration, Police Administration, Administration for Inspection Affairs, Commercial 
Court of Montenegro and the State Prosecuto r's Office. The primary task of the Coordination Team 
is improvement and strengthening of cooperation between the bodies competent for the protection 
and enforcement of intellectual property rights in Montenegro, as well as coordination of activities 
aimed  at the prevention and suppression of the violation of intellectual property rights.  WT/TPR/G/369 • Montenegro  
 
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  3.118.   Montenegro is committed to further strengthening of the legislative framework, in line with 
the best international experiences and to continuing of the work on strengtheni ng administrative 
capacities as a precondition for the effective protection of intellectual property rights.  
4  OBJECTIVES AND DEVEL OPMENT OF TRADE POLI CY  
4.1  WTO negotiations  
4.1.  Trade  Policy of Montenegro is determined by its membership to the WTO.  
4.2.  By membership t o the WTO Montenegro has liberalized its trade regime. When it comes to 
the market access for goods successive cuts of customs rates have been implemented annually on 
the first day of January from the date of membership, while the last cut is envisaged for  year 
2022.  
4.3.  During accession negotiations to the WTO Montenegro undertook commitment to join to the 
plurilateral agreements. Hence, after becoming a full -fledged Member of the Organization 
Montenegro joined to the Agreement on Trade in Civil Aircraft - CA and Ministerial Declaration on 
Trade in Information Technology Products - ITA in 2012. Market access for information technology 
(ITA/ITA2) and civil aircraft products was additionally liberalized in 2016 (the Decree on 
amendments of the Decree on Customs Tariff for 2016, OG MNE No. 46/16). In July 2015 , 
Montenegro became 44th member of the Agreement on Government Procurement (GPA), as a 
first country which acceded to the version of the agreement revised in 2014.  
4.4.  Montenegro signed the Protocol amending the TRIPS Agreement (the Law confirming the 
Protocol amending the TRIPS Agreement, OG of MNE – International Agreements No. 6/2013 as of 
24 July 2013).  
4.5.  Notifications are one of the key instruments providing transparency of trade policies within 
the WTO system.  It is a continuous activity and since 2012 Montenegro has submitted 
66 notifications.13 
4.1.1   Agreement on Trade Facilitation (TFA)  
4.6.  The Agreement on Trade Facilitation (TFA) is the first multilateral agreement concluded since 
the establishment of the WTO. Monten egro supported entry into force of the Agreement as it is 
important step forward towards further development of international trading system. The 
Agreement entered into force on 22 February 2017, after two -thirds of the WTO membership 
completed their domes tic ratification process, in accordance with the relevant procedures 
(Montenegro submitted instrument of ratification on 10 May 2016).14  
4.7.  The National Committee on Trade Facilitation was formed in May 2015 as a permanent 
multiagency body. The Committee oper ates in accordance with the principle of co -chairing 
between the Ministry of Finance and the Ministry of Economy.  
4.8.  Montenegro is preparing the Strategy on Trade facilitation in order to implement Articles of 
the TFA for which it asked implementation period  (the notification of A category commitments was 
submitted in October 2014, while the notification on B and C categories commitments was 
submitted in May 2017.)  
4.2  Process of Montenegro's accession to the EU  
4.9.  Before opening of negotiations in 2012, Montenegro set its integration course by signing the 
Stabilisation and Association Agreement (SAA) on 15 October 2007, i.e. entering into its 
first contractual relation with the Union. The SAA entered into force on 1 May 2010. Even now, this 
agreement represents the framework for monitoring the progress achieved in the course of the 
                                                
13 Viewed online at: https://www.wto.org/  on 31 December 2017.  
14 The Law confirming the Protocol amending the Marrakesh Agreement Establishing World Trade 
Organization – The Agreement on Trade Facilitation  (Official Gazette of Montenegro – International 
Agreements, No. 5/16) approved by the Parliament on 22 March 2016.  WT/TPR/G/369 • Montenegro  
 
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  negotiating process, through the work of the SAA Committee, seven sectoral Subcommittees, 
Special Working Group on the Public Administration Reform and Stabilisation and Association 
Parlia mentary Committee.  
4.10.   In this regard, in the context of political dialogue, Montenegro established two consultative 
committees as well: Joint Consultative Committee between Montenegro and the European 
Economic and Social Committee and Joint Consultative Commi ttee between Montenegro and the 
EU Committee of the Regions. In the context of assuming of obligations under the SAA, 
Montenegro put particular emphasis on strengthening of regional cooperation through bilateral 
conventions on regional cooperation with a v iew to intensifying cooperation with countries of the 
region. Thus, the joint EU accession -related committees are with the FYR of Macedonia, Republic of 
Serbia and the Republic of Albania have been established and their meetings are held on a regular 
basis. The Agreement on cooperation between the Government of Montenegro and the Council of 
Ministers of Bosnia and Herzegovina in the process of accession to the EU, which represents the 
base for establishment of this committee entered into force on 27 October  2017, while the same 
agreeme nt with Kosovo is being harmoniz ed. 
4.11.   Following submission of application for EU membership in December 2008 and answers to 
comprehensive EC Questionnaire in December 2009 and April 2010, the EU Council granted the 
candidate stat us to Montenegro on 17 December 2010. What can be considered as an important 
indicator that the EU has recogni zed commitment of the Montenegrin administration to 
preparations for assuming obligations arising from the integration process is the visa liberal ization, 
according to which Montenegrin citizens are free to travel without visa to 25 members of the 
Schengen zone, Iceland, Norway and Switzerland.  
4.12.   Even before the official beginning of negotiations, the Government of Montenegro started 
establishing its negotiating structure by appointing the Chief Negotiator in December 2011. 
Negotiations opened in June 2012 are coordinated by the Ministry of European Affairs of 
Montenegro, which is headed by the Minister and Chief Negotiator. Since the establishment of the 
negotiating structure in 2012, which consists of more than 1 ,300 members (around 30% of them 
being civil society representatives) in 33 working groups, Montenegro became prominent example 
of transparency and inclusiveness in the entire region due to th e level and method of direct 
involvement of civil society representatives in the negotiating process. Furthermore, the 
Parliament of Montenegro plays an important role in monitoring the course of accession 
negotiations and alignment of legislation with the  acquis. In order to strengthen the parliamentary 
role in integration process, the Committee on European Integration was established in May 2012 
as a key parliamentary authority in monitoring of negotiations with the EU. In addition, all of the 
seven centr al committees monitor and evaluate alignment of Montenegrin legislation with the 
acquis, as well as the enforcement of laws based on the Government's reports.  
4.13.   Montenegro remains committed to European integration as its next priority after becoming 
the newe st NATO member in June 2017 and fulfilling one of the most important foreign policy 
goals. After five years of negotiations, under the hardest negotiating conditions so far, Montenegro 
is coming to the end of its work when it comes to the fulfilment of all  the opening benchmarks 
defined by the EC in thirteen fields of the acquis, meaning that it is about to complete a 
demanding stage of the negotiating process. Namely, Montenegro is the first country to enter the 
EU negotiations under the so -called ''new ap proach", which means that chapters 23 - Judiciary and 
Fundamental Rights and 24 - Justice, Freedom and Security are among those chapters that are 
being opened first and that remain open until the closure of all other chapters. In that context, 
with 30 open ed and 3 provisionally closed negotiating chapters (out of the total of 33), 
Montenegro continues its defined negotiating dynamics. It is expected that the activities related to 
the fulfilment of the remaining closing benchmarks will be intensified in the forthcoming period, 
bearing in mind the fact that 26 negotiating chapters with 74 closing benchmarks are currently 
opened15 and that the Government of Montenegro also adopted 31 negotiating positions in the 
previous period .16 
                                                
15 Activities necessary to be undertaken in order to achieve the European standards in certain 
negotiating chapters, all with a view of meeting conditions for their provisional closure.  
16 A document, by which Montenegro, while opening a negotiating chapter, states that it accepts the 
acquis of the European Union covered by specific negotiating chapter, as well as that it will be ready to fully 
implement it by the date of accession to the EU. Furthermore, in its negotiating position, Montenegro presents WT/TPR/G/369 • Montenegro  
 
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  4.14.   In order to achieve the progress  in chapters 23 and 24 under the "new approach", rounding 
of the legislative framework included adoption of more than 60 reform laws, while strengthening of 
the institutional framework primarily implied establishment of ke y institutions such as the 
Anti-Corruption Agency and Special Public Prosecution Office, as well as continuous building of the 
existing relevant institutions in this field. The implemented reforms also provided measurable track 
record, particularly when it comes to implementation of innova ted organi zational laws in judiciary, 
which ensure its full independence and impartiality. In addition, initial training courses were 
organi zed for judges and prosecutors being appointed under the new system for the first time.  
4.15.   The EC expert missions, whic h are mainly organi zed in the field of rule of law, but also in 
several other negotiating fields, represent a particularly important form of evaluation of 
Montenegro's progress in negotiations, as well as a form of information exchange and cooperation.  
4.16.   Benefits of Montenegro's membership in the WTO are deeply intertwined with the process of 
Montenegro's accession to the EU, bearing in mind the fact that they are linked with important 
issues from almost every negotiating chapter, particularly in the field of  finance, agriculture and 
rural development, fishery, intellectual property, etc.  
4.17.   Montenegro became a member of the WTO's Government Procurement Agreement in 
July 2015, which will enable it to approach the public procurement market and which is directly 
linked with negotiating chapter 5 - Public Procurement. Commitments from Chapter 30 - External 
relations, which is one of the three provisionally closed chapters, address, inter alia, the matters 
related to WTO. Montenegro demonstrated its commitment to tran sparency, openness and rule of 
law by entering multilateral trade system. On the other hand, the WTO membership is a clear sign 
that Montenegro is determined to set up competitive and dynamic economy, which will further lead 
the integration into the global  market.  
4.18.   In the context of three pillars of European integration that include the rule of law, economic 
governance and public administration, the rule of law represents one of the key priorities of the 
Government's internal policy, precisely due to the fact that th e success in this field is directly 
linked to the reform in the public administration, institutions and economic progress. Montenegro 
achieved excellent results in fiscal consolidation measures at the very beginning of the 
implementation, even in the first  months of 2017. The real increase rate of the national economy 
in the second quarter of 2017 was 5.1% and represents the highest rate since 2008. The budget 
revenues for the period January -September 2017 amounted to 26.6% of estimated GDP. When 
compared w ith the plan, the revenues increased by €1.3 million or 0.1%. When compared with the 
same period of the previous year, the revenue increased by €32.9 million or 3.0%. Furthermore, 
the fifth meeting of the Special Public Administration Reform was held at th e end of 
September  2017 and we are dedicated to reali zation of all twelve conclusions formulated thereof, 
which includes development of the first three -year Government Working Plan as well (2018 -2020), 
in addition, the Interministerial working group for do cument preparation has been established. In 
terms of preparation of the Economic Reform Programme for the period 2018 -2020, on 
31 August  2017, the Government adopted Information regarding the drafting of the 
aforementioned document for the said period, as well as a Decision establishing a working group in 
charge of drafting the document. This group consists of representatives of line ministries and the 
Central Bank and it can be expected is that this document will define a medium -term plan of the 
state's ec onomic policy and a basis for a dialogue with the European Commission on the 
integration process.  
4.19.   In order to support the potential candidate countries and candidate countries in their efforts 
to meet the criteria for membership in the EU, in 2016, the Eu ropean Commission decided to 
consolidate all the previous forms of assistance that has been provided to the candidate countries 
and potential candidate countries into a single Instrument for Pre -Accession Assistance (IPA). 
Montenegro is using this instrume nt under IPA for 2007 and, at this moment, has the experience 
when it comes to the programming and implementation of two IPA financial perspectives for the 
period 2007 -2013 and for the period 2014 -2020. During the period 2007 -2013, Montenegro had 
€235 mill ion of EU grant support at its disposal and has so far spent 90% of funds. Due to such 
success, but also because of continuous progress of Montenegro in the negotiating process, the 
                                                                                                                                                  
its cu rrent legislative and strategic framework in a specific negotiating chapter, and possibly asks for 
permanent exemptions or transitional periods for implementation of the acquis covered by that chapter.   WT/TPR/G/369 • Montenegro  
 
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  European Union has decided to increase the amount of funds available for t he period 2014 -2020 
by 10%, i.e. to €270.5 million.  
4.20.   In the forthcoming period, we will continue working on fulfilling the remaining commitments 
with a special focus on the rule of law and economic governance in close cooperation with the 
European Commissio n and other Member States. The Government remains committed to full 
implementation of reforms that have been initiated, with the support of and in partnership with all 
relevant institutions and key actors in the society.  
4.3  Regional integration  
4.21.   In addition to  the Stabilization and Association Agreement Montenegro applies Free Trade 
Agreements with following non -EU Members: the Russian Federation (signed on 28 August 2000 in 
Belgrade and entered into force on 19 May 2001), the Agreement on Amendment of and Acce ssion 
to the Central European Free Trade Agreement – CEFTA 200617 (signed on 19 December 2005 in 
Bucharest and entered into force on 22 November 2007), Turkey (signed on 26 November in 2008 
in Istanbul and entered into force on 1 March 2010), Ukraine (signe d on 18 November 2011 in 
Kiev and entered into force on 1 January 2013) and EFTA countries (signed in Geneva on 
14 November 2011. The Agreement entered into force in 2012 as follows: on 1 September with 
Switzerland and Lichtenstein, on 1 October with Island and on 1 November with Norway).  
4.3.1   Agreement on Amendment of and Accession to the Central European Free Trade 
Agreement – CEFTA 2006  
4.22.   Montenegro was the Chair in the office of the CEFTA 2006 for 2016, the same year when 
the tenth anniversary of signing the Agreement was celebrated. The most important activities 
during the chairmanship referred to the further liberalization of trade including concluding the 
negotiations on CEFTA Additional Protocol 5 on trade facilitation and negotiations on CEFTA 
Additio nal Protocol 6 on additional liberalization on trade in services.  
4.23.   CEFTA Additional Protocol 5 was adopted on 26 May 2017 in Belgrade. The Proposal of the 
Law confirming the Additional Protocol 5 was confirmed by the Government of Montenegro on 
5 October 20 17, and currently is in the Parliament's procedure. Implementation of the Additional 
Protocol 5 is directly linked to the WTO TFA, but since not all CEFTA Parties are WTO Members, it 
was necessary to define those issues within the CEFTA 2006 as well.  
4.24.   Adopt ion of the CEFTA Additional Protocol 6 on additional liberalization o f trade in services is 
expected for 2018. Liberalization of services is to contribute to further development and 
improvement of trade and economic cooperation, as well as to creation of r elevant legislative 
framework, elimination of existing barriers and simplification of administrative procedures. In 
addition, the negotiations have been conducted so a large number of SMEs could benefit from the 
more favourable access to the markets of CEF TA Parties, as well as from easier export of their 
services.  
 
__________  
                                                
17 Parties of the CEFTA 2006 are Albania, Bosnia and Herzegovina, Macedonia, Moldova, Montenegro, 
Serbia and UNMIK -Kosovo.