RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/ACC/CGR/3 
8 March 2005 
 (05-0977) 
Working Party on the 
Accession of Montenegro Original:   English 
 
 
 
ACCESSION OF MONTENEGRO 
 
Memorandum on the Foreign Trade Regime  
 
 
  In a communication circulated in document WT/ACC/CGR/1 on 23 December 2004, the Government of the Republic of Montenegro app lied for accession under Article XII of the Agreement 
Establishing the World Trade Organization (WTO). 
 
 The General Council established a Working Pa rty (WT/ACC/CGR/2) on 23 February 2005 
with the following terms of reference:  "To ex amine the application of the Government of the 
Republic of Montenegro to accede to the WTO Agre ement under Article XII, and to submit to the 
General Council recommendations which may include a draft Protocol of Accession."  
 In accordance with the established procedures (W T/ACC/1), the Secretariat is circulating the 
attached Memorandum on the Foreign Trade Regi me received from Montenegro.  WTO Members 
wishing to submit questions on the Memorandum ar e invited to do so by 31 March 2005 for 
transmission to the authorities of Montenegro.   
 
_______________ 
  WT/ACC/CGR/3 
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 TABLE OF CONTENTS 
 
I. INTRODUCTION ................................................................................................................... .1 
II.  ECONOMY, ECONOMIC POLICIES AND FOREIGN TRADE ......................................2  
1.  Economy ........................................................................................................................ ............2  
(a)  General description............................................................................................................ .......2  
(b)  Current economic situation..................................................................................................... .6 
2.  Economic Policies.............................................................................................................. ........8  
(a)  Main directions of the on going economic policies..................................................................8  
(b)  Monetary and fiscal policies................................................................................................... 14 
(c)  Foreign exchange and payments system ...............................................................................17  
(d)  Foreign and domestic investment policies ............................................................................20  
(e)  Competition policies........................................................................................................... .....21  
3.  Foreign trade in goods and services ......................................................................................22  
4.   Domestic trade in services including va lue and composition of foreign direct 
investment..................................................................................................................... ...........25  
5.  Information on financial movements related to nationals working abroad, 
remittances,  etc............................................................................................................... .........30  
6.   Information on growth in trade in goods and services over recent years and 
forecasts for years to come.................................................................................................... .30 
III.  FRAMEWORK FOR MAKING AND ENFORCING POLICIES AFFECTING 
FOREIGN TRADE IN GOODS AND TRADE IN SERVICES .........................................30  
1.  Powers of executive, legislative and judicial branches of government...............................30  
2.  Government entities responsible for maki ng and implementing policies affecting 
foreign trade .................................................................................................................. ..........36  
3.  Division of authority between cent ral and sub-central governments.................................37  
4.  Legislative programmes or plans to change the regulatory regime ...................................37  
5.  Laws and Legal Acts............................................................................................................ ...38 
6.  Description of judicial, arbitral or ad ministrative tribunals or procedures .....................38  
IV.  POLICIES AFFECTING TRADE IN GOODS ...................................................................41  
1.  Import Regulation.............................................................................................................. .....41  
(a)  Registration requirements for engaging in importing.........................................................41  
(b)  Characteristics of national tariff ...........................................................................................42  
(c)  Tariff quotas, tariff exemptions.............................................................................................42  
(d)  Other duties and charges, specifyin g charges for services rendered..................................44  
(e)  Quantitative import restrictions includi ng prohibitions, quotas and licensing 
systems ........................................................................................................................ .............45  
(f)  Import licensing procedures ..................................................................................................46  WT/ACC/CGR/3 
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 (g)
 Other border  measures.......................................................................................................... .47 
(h)  Customs valuation.............................................................................................................. .....48  
(i)  Other customs formalities ...................................................................................................... 48 
(j)  Pre-shipment inspection ........................................................................................................ .48 
(k)  Application of internal taxes on imports...............................................................................48  
(l)  Rules of origin ................................................................................................................ .........55  
(m)  Anti-dumping regime............................................................................................................ ..55 
(n)  Countervailing duty regime ...................................................................................................56  
(o)  Safeguard regime ............................................................................................................... .....56  
2.  Export Regulation.............................................................................................................. .....57  
(a)  Registration requirements for engaging in exporting..........................................................57  
(b)  Customs tariff nomenclature .................................................................................................57  
(c)  Quantitative export restrictions, includi ng prohibitions, quotas and licensing 
systems ........................................................................................................................ .............58  
(d)  Export licensing procedures...................................................................................................5 9 
(e)  Other me asures ................................................................................................................. ......59  
(f)  Export financing, subsidy and promotion policies...............................................................59  
(g)  Export performan ce requirements........................................................................................59  
(i)  Import duty drawback schemes ............................................................................................59  
3.  Internal policies affecting foreign trade in goods.................................................................60  
(a)  Industrial policy, including subsidy policies.........................................................................60  
(b)  Technical regulations and Standards....................................................................................61  
(c)  Sanitary and phytosanitary measures...................................................................................63  
(d)  Trade-related investment measures ......................................................................................66  
(e)  State-trading practices........................................................................................................ ....66  
(f)  Free zones ..................................................................................................................... ...........66  
(g)  Free economic zones ............................................................................................................ ...67 
(h)  Trade-related environmental policies ...................................................................................68  
(i)  Mixing regulations ............................................................................................................. .....70  
(j)  Government-mandated counter-trade and barter...............................................................70  
(k)  Trade agreements leading to country-specific quotas allocation........................................70  
(l)  Government procur ement practices......................................................................................70  
(m)  Regulation of trade in transit................................................................................................. 71 
4.  Policies affecting foreign trade in agricultural products.....................................................72  
(a)  Imports........................................................................................................................ .............72  
(b)  Exports........................................................................................................................ .............73   WT/ACC/CGR/3 
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 (c)  Export prohibitions and restrictions.....................................................................................73  
(d)  Export credits, export credit guarantees or insurance programmes .................................73  
(e)  Internal policies.............................................................................................................. .........73  
5.  Policies affecting foreign trade in other sectors ...................................................................76  
(a)  Textiles regime ................................................................................................................ ........76  
(b)  Policies affecting foreign trad e in other major sectors........................................................76  
V.  TRADE-RELATED INTELLECTUAL  PROPERTY REGIME.......................................76  
1.  General........................................................................................................................ .............76  
(a)  Intellectual property policy................................................................................................... .76 
(b)  Responsible agencies for policy formulation and implementation .....................................76  
(c)  Membership of international intellectua l property conventions and of regional 
or bilatera l agreements........................................................................................................ ...76 
(d)  Application of national and m.f.n. treatment to foreign nationals .....................................77  
(e)  Fees and taxes................................................................................................................. .........78  
2.  Substantive standards of protection, including procedures for the acquisition 
and maintenance of intellectual property rights ..................................................................80  
(a)  Copyright and related rights..................................................................................................8 0 
(b)  Trademarks, including  service marks...................................................................................80  
(c)  Geographical indications, including appellations of origin.................................................81  
(d)  Industrial designs............................................................................................................. .......82  
(e)  Patents........................................................................................................................ ..............82  
(f)  Plant variety protection....................................................................................................... ...83 
(g)  Layout designs of integrated circuits ....................................................................................84  
(h)  Requirements on undisclosed information, including trade secrets and test data............84  
(i)  Any other categories of intellectual property .......................................................................84  
3.  Measures to control abuse of intellectual property rights...................................................84  
4.  Enforcement .................................................................................................................... ........85  
(a)  Civil judicial procedures and remedies.................................................................................85  
(b)  Provisional measures ........................................................................................................... ...85 
(c)  Administrative procedures and remedies.............................................................................86  
(d)  Special border measures........................................................................................................ .86 
(e)  Criminal procedures............................................................................................................ ...86 
5.  Laws, decrees, regulations and other legal acts relating to intellectual property 
rights ......................................................................................................................... ...............86  
6.  Statistical data on applications for and grants of intellectual property rights as 
well as any statistical data on their enforcement .................................................................87  
VI.  TRADE-RELATED SE RVICES REGIME .........................................................................89  WT/ACC/CGR/3 
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 1. 
 General........................................................................................................................ .............89  
2.  Policies Affecting Tr ade in Services ......................................................................................90  
(a)  Government departments, agencies, professional associations or other bodies 
with authority or a role relevant to the conduct of service activities .................................90  
(b)  Judicial, arbitral or administrative tr ibunals or procedures providing for the 
review of, or remedies in relation to, admi nistrative decisions affecting trade in 
services ....................................................................................................................... ..............91  
(c)  Provisions, including those in internat ional agreements, concerning qualification 
requirements and procedures, technical standards and licensing and/or registration requirements for the supply of services ...........................................................92
 
(d)  Provisions governing the existence and operation of monopolies or exclusive 
service s uppliers .............................................................................................................. ........93  
(e)  Provisions relating to safeguard measures as they apply to trade in services ...................93  
(f)  Provisions relating to international transfers and payments for current 
transactions of services....................................................................................................... ....93  
(g)  Provisions relating to capital transactions affecting the supply of services.......................93  
(h)  Provisions governing the procurement by  governmental agencies of services..................94  
(i)  Provisions concerning any form of aid, gran t, domestic subsidy, tax incentive or 
promotion scheme affectin g trade in services.......................................................................94  
3.  Market Access and National Treatment ...............................................................................95  
(a)  Limitations on the numb er of service suppliers ...................................................................95  
(b)  Limitations on the total value of service transactions or assets..........................................95  
(c)  Limitations on the total number of servi ce operations or on the total quantity of 
service output ................................................................................................................. .........95  
(d)  Limitations on the total number of natural persons that may be employed in a 
particular service sector ...................................................................................................... ...95 
(e)  Restrictions on, or requirements of specifi c types of legal entity through which a 
service may be  supplied........................................................................................................ ..96 
(f)  Limitations on the participation of foreign capital ..............................................................96  
(g)  Measures providing for less than the trea tment accorded to national services or 
service s uppliers .............................................................................................................. ........96  
4.  Most-Favoured-Nation Treatment ........................................................................................96  
VII.   INSTITUTIONAL BASE FOR TRAD E AND ECONOMIC RELATIONS 
WITH THIRD COUNTRIES ................................................................................................98  
1.  Bilateral or plurilateral agreements relati ng to foreign trade in goods and trade 
in services.................................................................................................................... .............98  
2.  Economic integration, customs union  and free-trade area agreements...........................100  
3.  Labour markets integration agreements ............................................................................112  
4.  Multilateral economic cooperation, memb ership in the multilateral economic 
organizations, trade-related programmes of other multilateral organizations...............112  
  WT/ACC/CGR/3 
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 I. INTRODUCTION 
The Republic of Montenegro is one of two member states of the State Union of Serbia and 
Montenegro, representing a specific economic system with defined and autonomous customs territory. 
During the last ten years, still within FRY, with  increasing differences between the economic systems 
of the Republic of Montenegro and the Republic of  Serbia, Montenegro has been gradually setting up 
its own legal system and initiated creating its own economic policy already during the mid 90's. 
The Montenegrin Government passed the Economic Reforms Agenda in March 2003, which defined 
the main goals in economic policy.  These goals are the establishment of an open economy based on 
the private sector, the creation of a favourable bus iness environment attractive for foreign investors, 
accession to the EU and the WTO, and reform and development of various sector policies, including 
justice, state administration, education, tourism, and agriculture.  Even before the Economic Reform 
Agenda was passed, Montenegro had enacted signifi cant reform oriented legislation and achieved 
significant successes in reducing inflation, introduc ing the German Mark and then the Euro as the 
legal currency, deregulating foreign trade by a bolishing import and export quotas and import licenses 
for a large number of products, reducing customs du ties, establishing an efficient financial system by 
privatizing the banks, improving the control of pub lic expenditures and corruption, enacting new tax 
legislation and introducing VAT, and reforming cust oms administration through a new customs law.   
In 2002, Montenegro signed the Accord on princi ples in relations between Serbia and Montenegro 
("Belgrade Agreement") with Serbia and the EU, which established a new State Union of Serbia and 
Montenegro on 4 February 2003.  The Union has lim ited responsibilities in the ar ea of foreign affairs, 
defence, human rights, intellectual property right s, standardization and technical regulations, 
metrology and statistics. All other areas are at the responsibility of the member states.  This is very 
different from the former Federal Republic of Yu goslavia, in which responsibility for all major 
economic activities, and particularly foreign trade re lated matters, was at the fe deral level.  Following 
the Belgrade Agreement, Montenegro and Serbia agreed on the Action Plan of Harmonization of 
Economy Systems of Member States of the State Union of Serbia and Montenegro for the purpose of 
Preventing and Removing Obstacles to Free Moveme nt of People, Goods, Services and Capital 
("Action Plan"), whose purpose was to bring the two economic systems together so that they could 
move jointly toward EU accession.  In practice,  however, harmonization of tariffs and trade policy 
proved difficult, with the result that in October 2004  the EU proposed a "two-track" approach to EU 
accession for Serbia and Montenegro, in which economic  issues would be dealt with separately for the 
two Member States, and separate accessions to the WTO were approved in principle. The member 
states have agreed upon making amendments to  the Action Plan and enabling undisturbed 
negotiations with the WTO and EU in the area of  economy, in accordance with the new proposal of 
the EU. 
Despite the political problems with Serbia, Monteneg ro has made significant progress in reforming its 
economic, legal and political system. However, M ontenegro has not still achieved a sufficient 
dynamics of economic growth. In 2004, there was a increase of 3.7 per cent in GDP, GDP is only 
€2,379 per capita, unemployment is high – circa 22 per cent.  FDI remains limited at €70 million, 
while the average gross wage is circa €300.  Ther e are still too many administrative barriers to doing 
business in Montenegro, which is one reason for thou sands of insolvent domestic companies and for 
the modest presence of foreign companies and a low level of FDI in general. On the other hand, Montenegro has reduced its budget deficit to a leve l below 3 per cent of GDP, as well as inflation.  
The process of liberalizing tax policy is still ongoing,  which should contribute to a better environment 
for investing. 
In the forthcoming period, the priority of Monten egro are certainly fast economic reforms which will 
get the economic system of Montenegro closer to in ternational market, as well as enable a sustainable 
and dynamic economic growth of the country. St rategic priorities are certainly Euro-Atlantic WT/ACC/CGR/3 
Page 2  
 
 integrations, stronger cooperation with the EU and the Region, WTO and EU accession as well as 
harmonization with the European standards in  the economy and institutions of Montenegro. 
The Government of Montenegro has set membership  in the WTO as one of its priorities, and has 
provided strong political support of that objective.   The Government has established a Commission 
for Coordination of the WTO Accession Process.  This Commission is actively coordinating the 
activities of all government agencies involved in  the process of WTO accession, reviewing existing 
and proposed laws and to insure conformity of Montenegrin foreign trade policy with WTO 
requirements.  Membership in the WTO is a prio rity goal of the Economic Reform Agenda, which 
includes also the reforms necessary for compliance with WTO requirements.   
The Government thus begins the WTO accession process having already accomplished considerable 
reforms, but at the same time recognizes that much  remains to be accomplished to complete the 
process.  With continued strong political suppor t and adequate resources to do the work, the 
Government of Montenegro intends to complete its  accession to WTO in the minimum possible time.    
II.  ECONOMY, ECONOMIC POLICIES AND FOREIGN TRADE 
1.  Economy 
(a)  General description   - Territory
 
Montenegro is a small, mountainous, mediterranean , richly endowed and beautiful area of about 
13,214 square kilometres, which is strategically lo cated in the Western Balkans region of Southeast 
Europe, with about 293 kilometres of coastline on the Adriatic.  It is bordered by Albania (on the 
East), Kosovo (on the North-East), Serbia (on th e North), Bosnia and Herzegovina (on the West), 
Croatia (on the South-West) and Adriatic Sea (on the South). 
The Border totals 908 km, of which 614 km is land (as summarized in Table II.1) and 294 km is water 
boundary on the Adriatic Sea and Sk adar Lake (border with Albania). 
Table II.1 – Land Boundaries  
Country Land Boundary 
Serbia 203 km 
Croatia 14 km 
Bosnia and Herzegovina 225 km 
Albania 172 km 
Total 614 km 
 The capital is Podgorica, which is also the largest  city. The climate is varied; the Mediterranean 
climate prevails at the seaside, but only a few kilometres away, across the coastal mountains, the 
dominant climate is continental. 
The geographical position of Montenegro provide s favourable conditions for specific economic 
activities, above all, transport and tourism. 
Montenegro is connected with the world through tw o international airports, in Podgorica and Tivat, 
by sea routes through the ports of Bar (the most important one), Kotor, Zelenika and Risan, by a  WT/ACC/CGR/3 
 Page 3 
 
 
 railway (going from Bar and Podgorica to Serbia, and Central and Eastern Europe), as well as by a 
number of roads.  
There are three main regi ons in the country: Southern, Central and Northern. The southern, coastal 
part of Montenegro has a beautiful coast with many  beaches. This region is primarily important due to 
tourist and transport activities. The central part is  the biggest lowland region of Montenegro and its 
most fertile area. It boasts the main economic activiti es of the country, concentrated in particular in 
the capital city of Podgorica and in Niksic, the sec ond largest city. The northern region is covered by 
high (more than 2,000 m) mountains, among which Durmitor (under protection of UNESCO) stands 
out as the most beautiful one. 
Table II.2 – Country particulars  
Longest beach: (Long Beach)Ulcinj-13,000m 
Highest peak: Bobotov kuk (Mt. Durmitor)-2,522 m 
Largest lake: Lake Skadar - 391 km2 
Deepest canyon: Tara River – 1,300 m 
Largest bay: Boka Kotorska (The Bay of Kotor) 
National parks:  
  Durmitor – 39,000 ha 
Lovcen – 6,400 ha Biogradska gora – 5,400 ha 
Lake Skadar – 40,000 ha 
World heritage under the UNESCO protection: Mt. Durmitor with the Tara canyon 
Kotor - the old City 
 
- Population  
The geographic position at the crossroad between th e East and the West made Montenegro the scene 
of dramatic historic events over many centuri es, a place where many different peoples and religions 
existed and merged.  Specific cultural and histor ic heritages and intermingling, as well as the 
characteristics of the territory on which they cro ssed, resulted in the formation of the multiethnic, 
multicultural and multi-religious community that is Montenegro today. 
According to estimates made in 2003, the popula tion number is around 672,000 (permanent residents 
around 620,000). There are 21 municipalities in Mont enegro. Podgorica as the largest city (170,000 
inhabitants), is the administrative centre of Mont enegro, and Cetinje is the historical capital. 
According to the 2003 census, 22.55 per cent (male 65,903; female 61,558) of the population are 
under the age of 14, and 11.959 per cent (male 31,984; female 42,176) are over the age of 65.  WT/ACC/CGR/3 
Page 4  
 
 Chart II.1. Population by sex and age
 
 
The main religion is Orthodox Christianity (approxi mately 69 per cent of the population), followed by 
Islam, Roman Catholic, and Protestant Christia nity.  Montenegro population is made up of 
Montenegrins, Serbs, Bosnians, Muslims, Albanians and other minorities. 
Chart II.2. Population by national or ethnic affiliation  
 
 - Economic Specialization  
Montenegro has:  (1) a large pool of talented  and multi-lingual professionals and a highly skilled 
labour force familiar with technological developmen ts; (2) significant deposits of natural resources; 
and (3) limited tracts of arable land.  
The main development fields of Montenegro are tourism, agriculture, industry and transport. For 
additional details, please consult Table A1 .2 in document WT/ACC/CGR/3/Add.1. 
Tourist accommodation capacities are 140,000 beds, of which 37,000 are in the basic-type facilities 
(hotels, motels, tourist villages).  A marked disproportion in the physical distribution of the accommodation results in numerous attractive, ecologi cally appealing tourist potentials which present 
a good ground for international investments.  Th e most developed are "swimming" (summer) and 
"skiing" (winter) forms of tourism. 0 50000  100000  150000  200000 250000 300000 Montenegrins 
Serbs 
Albanians 
Bosniak 
Muslims 
Croats 
Other 0 10000  20000  30000  40000  50000  60000  70000  80000  
0-14 15-29 30-44 45-59 60-74 75+m 
f  WT/ACC/CGR/3 
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 On the Montenegrin seaside (the coastline of 293 km) there are numerous sand and pebble beaches - 
117 in total, 73 km in length of which sand b eaches make 33 km. The capacity of the beaches is 
230,000 persons.  The fact that the air temperature over six months of the year is higher than 18°C, together with warm water temperatures and abunda nt sunshine, makes the Montenegrin seaside one of 
the warmest and sunniest tourist regions in the Europe. 
When speaking of tourism, Montenegro has chosen  the path of development directed towards the 
creation of an image of exclusive destinati on for highly distinctive and demanding guests. 
Tourism generated revenues in the previous period have scored a significant growth, and, according to 
the World Travel and Tourism Council (WTTC), it is expected that the tourism economy will 
contribute to the GDP in 2004 for 14.8 per cent.  It  is also expected that tourism and travel in 
Montenegro will score 9 per cent of annual growth during the next ten years, when speaking of GDP, 
and 4.5 per cent when speaking of employment in tourism. 
Official data, provided by the Central Bank of M ontenegro and Monstat, has shown positive trend in 
tourism. Indicators have shown trend of positive gr owth in the number of guests from abroad, which 
resulted in the larger share of these guests in the total number of tourists.  Also, financial indicators 
have shown trend of positi ve growth, which indicates changes in the structure of guests in favour of 
guests with greater purchasing power. 
Due to its comparable advantages w ith respect to natural convenience, the installed capacities, and the 
overall revenues, the shipping industry is very impor tant for the overall economy of the Republic and 
is one of its development priorities.  The main subj ects in the shipping industry are:  Port of Bar and 
other ports, Adriatic Shipyard and shipping companies.   The Port of Bar, located at the entrance into 
the Adriatic Sea is able to reload about 5 m illion tons of commodities in a year.  The Port 
encompasses a free customs zone, with extensive po ssibilities for the development of production and 
services and construction of warehousing facilities, from which goods may be easily transported by 
sea, or by the Bar-Belgrade railway further to the Cent ral Europe.  The Adriatic Shipyard in Bijela is 
equipped for the repair of all types of vessel s with the loading capacity up to 120,000 tons. 
Montenegro has a road network 5,227 km long, of  which 1,720 km are modern highways and regional 
roads, and the balance are local roads.  The normal-gage railroad lines are 250 km long and electrified 
for the most part.  The railroad hub in Podgorica conn ects the interior of the country with the Adriatic 
Sea, through Port of Bar, and the Podgorica-Bozaj railroad with neighbouring Albania.  Montenegro 
has two airports in Podgorica and Tivat. 
Industry is mainly based on the existing resources and the most significant contributor is the mining-
energy-metal processing production chain.  The availa ble resources may be the basis of a much more 
developed processing industry than the existing one. 
Montenegro has the capacities that  may produce 400,000 tons of raw steel, 800,000 tons of red 
bauxite, 280,000 tons of alumina,  100,000 tons of aluminium, 45 – 50,000 tons of sea salt, 2,000,000 
tons of lignite, and 250,000 tons of brown coal, while the electric power plant (hydro-power plants 
Perucica and Piva and thermal-power plant Plje vlja) generate about 3 billion KWh per year.  
This basic industrial structure is complemented by  capacities in metal processing, machine industry, 
wood processing, textiles, chemical industry, footwe ar and leather industry, garments industry, home 
appliance, construction machine and forestry ma chine industries, as well as significant building 
capacities.  
Montenegro has a number of plants for the processi ng of agricultural products: slaughterhouses, fish 
processing plants, flour mills with silos, dairy plants , bakeries, breweries and fruit juice factories, fruit WT/ACC/CGR/3 
Page 6  
 
 processing factories, grapevine processing and wine cellars, medical herbs processing, tobacco plants, 
coffee processing, etc.  
To put the existing capacities in use, new owners should be found through restructuring, bankruptcy 
and privatization process that will provide conditions necessary for investments. 
Agricultural land and waters are well preserved fro m industrial pollution and enable the production of 
healthy ecological food, particularly meat (poultr y – 2,125 t; lamb, mutton and goat – 4,830 t, veal 
and beef – 8,500 t), milk and milk processed products  (225,000 t), honey (about 350 t per year), fish – 
2,180.5 t, vegetables –179,883 t (tomato – 19,010 t, pepper – 17,042 t, cucumber etc.), fruits – 64,022 t (plums, apples, grapes – 38,000 t, citrus fruits – 5,000 t per year, olives) and high quality 
wines (Vranac, Krstac etc.), then naturally pure wa ter of best qualities (measured by strict world 
standards).  The soil is convenient for some special cultures such as forest fr uits (blueberry, edible 
mushrooms, etc.) and wild medical herbs, especially sage. 
Montenegrin fishermen catch about 1,300 tons of sea fish per year, and they produce circa 400 tons of 
freshwater fish in the existing fishponds.  The tota l potential, only for the sea fish is 123,427 tons, of 
which 81,965 t anchovies; 27,895 t pilchards; 13,577 t of other types of sea fish.  
Forests and forest land cover the area of 720,000 hect ares or 54 per cent of the total surface of the 
Republic, of which the largest part (572,000 hectares) is situated in the north-east.  The total growing 
stock in Montenegro is 59.6 million cubic metres .  The total volume of wood is estimated at 
71.9 million cubic metres, of which 28.0 million cubi c metres (39 per cent) of coniferous trees and 
43.9 million cubic metres (61 per cent) of deciduous trees and the annual increment is 1.2 million cubic metres. 
 - Main Economic Indicators
 
Table II.3 below summarize key economic indicato rs of Montenegro.  Please see Annex 1 in 
document WT/ACC/CGR/3/Add.1 for additional statistics and indicators. 
Table II.3 – Montenegro Key Economic Indicators  
 2002 2003 2004* 2005** 
GDP (€ mil.) 1,250 1,375 1,475 1,580 
GDP growth rate (in %) 0.4 2.5 3.7 4.1 
GDP (€ per capita ) 2,031.06 2,225.86 2,378.22 2,500 
Inflation (in %) 9.4 6.7 3.4 3 
Unemployment rate 23.25% 22.00% 21.00% 20.00% 
Balance of payments (US$ mil.) -154 -114 -70* - 
Foreign direct investments (mil.) US$73.8 mil US$50.5 mil €70 mil* €150 mil** 
Savings (€ mil.) 22 44 - - 
Approved loans (€ mil.) 125 201 258* - 
Grey economy 30% 20% 15% 13% 
Note: * - estimated; **- predicted 
Source:  Central Bank of Montenegro, Monstat, Ministry of Finance of Republic of Montenegro 
(b)  Current economic situation 
GDP in the Republic of Montenegro for the y ear 2004 was €1,475 million which represents real 
growth of 3.7 per cent when comp ared with GDP for 2003 of €1,375 million.  GDP per capita in 2003 
was €2,231, while for the year 2004 it is envisaged to be €2,379.  WT/ACC/CGR/3 
 Page 7 
 
 
 In recent years, the Government of the Republic of Montenegro has managed to: 
- Achieve positive trends in growth of GDP and industrial production rates (13.8 per cent in 
2004); 
- Decrease inflation rate (Please see chart II.3) a nd reduction of budget deficit below 3 per cent; 
- Reduce the foreign trade deficit (Please see Annex 1 of document WT/ACC/CGR/3/Add.1); 
- Increase turnover from tourism (Please see Annex 1 of document WT/ACC/CGR/3/Add.1); 
and 
- Achieve the growth of savings and approved loans. 
Chart II.3 - RM Inflation Rates 1995-2003  
 
The introduction of the Euro in January 2002 as the sole legal tender has been the most significant 
step in recent reforms in Monten egro.  In addition, Montenegro has carried out a reform of the 
payment and clearing system (ZOP), and transf erred payment operations in the banking system. 
The Government of Montenegro started with mass voucher privatization (MVP) in 2002.  That 
process was finalized in the same year.  Of th e more than 400,000 citizens of Montenegro who 
acquired those vouchers for free, most exchanged them  for shares of companies or investment units of 
privatization investment funds.  MVP has contribut ed to the development of the capital market in 
Montenegro.  Today, shares of companies and investment units are traded on the two stock 
exchanges, NEX Montenegro and Montenegro Stock Ex change.  More than 67 per cent of the former 
state-owned capital has been privatized. Control pa ckages of shares in the sixteen remaining large 
state owned companies will be privatized in the near future.  
The indicators of the current economic situation in the Republic of Montenegro are as follows: 
- Increase in industrial production of 13.8 per cent in 2004 (please see the Chart II.4 for 
previous years); 
- Unemployment estimated at 21 per cent (2004); 
- Net average salary: €302.81 per month (2004); 
- Current account deficit of €56.3 m illion (January – September 2004); 
- Decline in inflation from 9.4 per cent in 2002 to 6.7 per cent in year 2003, and to 3.4 per cent 
in 2004; 0% 20% 40% 60% 80% 100% 120% 140% 
1995 1996 1997 1998 1999 2000 2001 2002 2003
yearinflation 
rate WT/ACC/CGR/3 
Page 8  
 
 - The total tourism (a main sector of economy)  revenues estimated at the level of €178 million 
(2004); 
- Foreign direct investments was €50.5 million in 2003; 
- Savings at the level of €44 million in 2003; and 
- Approved loans at the level of €201 millions in 2003. 
Chart II. 4. – RM Production Indices 1994-2003
 
 
2.  Economic Policies  
(a)  Main directions of the ongoing economic policies 
- Pricing Policy   
Legal framework for regulation of prices in the area of providing services of the public interest 
(electric energy supplying, telecommunication servi ces, etc.) is established by the Law on Energy, 
Law on Telecommunications, Law on Broadcasting, La w on Construction, etc.  According to these 
laws, prices of certain services are formed on the basis of supply and its correction within the 
competencies of regulatory bodies, which are inde pendent from the Government of the Republic of 
Montenegro (RM) in their work. 
Besides the above mentioned solutions introduced in the legal system of Montenegro by using 
experiences from the EU countries as well as by implementation of certain EU acts, there is also the Law on Social Price Control (RM OG No. 45/90), which is not applied since prices are, in general, 
formed on the basis of supply and demand (market principles). 
The Law on Social Price Control (RM OG No. 45/ 90) regulates prices in Montenegro.  The Law 
provides authority for the Government to establish prices in broad areas such as construction, road 
transport, insurance, higher education and research , publishing, (except local newspapers), radio and 
TV stations (state owned), health and social car e, and banking.  The Law also provides that the 
Government can set the prices of certain agricultura l products to stimulate agricultural production. In 
addition, the Law authorizes controls in the case of significant price disturbances or when it is obvious 
that the economic policy plans prescribed by the Repu blic cannot be achieved without price control.  0 20 40 60 80 100 120 140 160 
1994  1995  1996 1997 1998 1999 2000 2001  2002  2003
yearproduction 
indices  WT/ACC/CGR/3 
 Page 9 
 
 
  - Controls currently in effect in Montenegro  
Despite the broad authority provided in the Law on Social Price Control, however, price controls are 
actually imposed only in limited areas. In general, pricing policy in Monteneg ro is based on market 
principles and price liberalization is almost comple te.  Only a small number of products are currently 
subject to administrative price control, including medicines for human consumption, oil and 
derivative products, and postal services, while local  authorities may control prices of certain utility 
services.  
Recent legislative action relevant to price controls includes: - In June 2003, the Law on Energy (RM OG No. 39/03) transferred the authority for 
determining the prices electricity and of coal intended for electricity production to the 
regulatory Agency for Energy; 
- In December 2003, the Law on Emergency Procurement (RM OG No. 69/03) was enacted 
and thus the Law on Commodity Reserves (RM OG No. 56/92, 69/03) was abolished. 
Therefore, the Government has no instruments to influence determination of the prices for 
products, since the Directorate for Commodity Reserves no longer exists; 
- The Decision on Control of the Prices of Railway Transport for the Needs of Aluminium 
Company and Nikši ć Steel Company was abolished (RM OG No. 41/03); 
- The Government passed the Decree on Method of Establishment of Maximum Retail Prices 
of Oil Derivatives (RM OG No. 52/02, 55/02, 23/03); and 
- The Law on Telecommunications (RM OG No. 59/00), established the Regulatory Agency 
for Telecommunications, which is responsible for determining prices of telecommunication 
services by a monopoly operator or an operator with a significant market share. 
- Economic development plans
 
The Economic Reform Agenda (see  Section I) is a comprehensive four-year plan adopted by the 
Government of Montenegro in March 2003 aimed achieving the following goals: 
- Economic growth, with a decisive impact by the private sector; 
- EU compatibility of legislation and processes; 
- Valorisation of Montenegro's potential, partic ularly in areas that represent comparative 
advantages; 
- Improvements in the standard of living; with adequate educational and health system and a 
sustainable social security system; and 
- Protection of the Environment. 
At the end of the four-year program, it is expect ed that the Montenegrin economy will exhibit the 
following characteristics: 
- Fiscal Sustainability, i.e. budget execution according to plan without arrears carried over to 
the following year and without significant un-met liabilities, this will occur in the context of a 
tax regime adjusted for development of private sector. 
- Transformation of the Pension System based on the principle of financial sustainability. 
- A private, stable, well regulated Financial Sector that enables rapid resolution of disputes, 
high levels of competition, mechanisms to prot ect the rights of lenders and depositors, and a 
wide variety of investment options for savings. 
- A stable Business Environment in which it is quick, easy and efficient to do business. 
Resolutions of disputes are fair, just and rapid.  There are firm protections for property rights, 
and all laws are harmonized with EU and WTO rule s.  There is a clear system of regulations 
that are non-discretionary as a rule. WT/ACC/CGR/3 
Page 10  
 
 - The Tourism sector will grow as a percentage of GDP. There is a steady increase of domestic 
and international tourists, who are attracted to  Montenegro by higher quality.  Policy and 
legal frameworks are in place to support fast pr ivatization with incentives for investment in 
hotel capacity, and improvements in water and waste water treatment, solid waste disposal and traffic conditions.  There is a noted im provement in the level of professionalism and 
customer service offered by those employed in the tourism sector.  
- Montenegro is competing effectively in high value niches in Agricultu re, Forestry, and Wood 
Processing, using modern business and technological methods.  Citizen awareness about the importance of Environment Protection in accordan ce with principles of Ecological State, is 
high. Montenegro passed the Declaration on Ecol ogical State of Montenegro in 21 September 
1992. 
- The Energy Sector provides stable sources of  electricity through a reliable transmission-
distribution system. Fair prices and transparent tariff setting procedures support investment in the sector, and policies and incentives that are c onsistent with Montenegro's designation as an 
ecological state are in place. 
- Public Administration is able to attract and retain highly qualified, highly motivated public 
servants who are dedicated to serving the citizens of Montenegro, and professional 
governance.  Working conditions and remunerati on are competitive.  Staff are selected and 
promoted through open competition and on the basis of merit.  
- Privatization will be completed, with the ex ception of a very few strategic assets, by 
auctioning sale of remaining state assets to the private sector and investors who are capable of 
driving reinvestment and growth. Private sector participation in the provision of public 
services is widespread, leading to an improveme nt in the quality and efficiency of services 
delivered.  
- Local Governments with full responsibility for local economy, autonomy in its key functions 
and with independent tax collection capac ity to finance these new authorities and 
responsibilities. 
- Significant improvement in building Monten egro as Information Society based on the 
systematic development of an IT culture a nd application of Information and Communication 
Technologies (ICT) in accordan ce with the Agenda for information society signed by 
Montenegro on 29 October 2002 (concept of accession of Stability Pact Countries to SEE e-initiatives of EU).  Besides, the Government  of Montenegro adopted the Strategy on 
Development of Information Society on 17 June 2004.  Availability of new business services 
and mechanisms as well as availability of gove rnment and public services via Internet through 
an initiative of the e-Government.  
- Poverty will be greatly reduced as a result of  economic growth and the revitalization of 
previously depressed regions of Montenegro and sectors of the economy.  The Government of 
Montenegro adopted the Strategy for Development and Poverty Reduction in 
November 2003, in accordance with the methodol ogy of the World Bank.  The absolute 
poverty rate is 12 per cent, while the economic ally imperilled population totals circa 35 per 
cent. 
The Government enacts on an annual basis an econom ic policy plan for the following year, specifying 
goals that have to be achieved in accordance with the Agenda.   
 - Privatization Plans
 
State owned companies in Montenegro were  transformed under the Law on Ownership and 
Management Transformation (RM OG No. 2/92, 27/94, 23/96) in the early nineties. Under that Law, 
employees were granted 10 per cent of shares free of ch arge and up to 30 per cent more, to be paid in 
instalments with a discount based on the working period that has been spent in a company.  The 
remaining 60 per cent or more of the shares we re transferred to three state owned funds: the 
Development Fund (60 per cent), Pension Fund (30 per cent) and Employment Fund (10 per cent).  WT/ACC/CGR/3 
 Page 11 
 
 
 Approximately 350 companies were involved in this  process.  Subsequently, 117 of these companies 
were sold through different methods of sales including direct sales of majority or minority stakes and auction sale. 
The goods of general use (e .g. public roads, parks, squares, str eets) and natural resources will not be 
privatized. 
The Privatization Council, established in 1998, is re sponsible to the Government for management of 
privatization. Privatization is governed by following legal acts:  
- The Law on Ownership and Management Tran sformation (RM OG No. 2/92, 17/92, 59/92, 
4/93, 27/94, 30/94, 23/96); 
- The Law on Privatization of the Economy (RM OG No. 23/96, 6/99, 59/00 and 42/04); 
- Decision on Establishment and Structure of the Privatization Council (RM OG No. 33/98, 
24/99, 38/01, 48/03 and 72/04); 
- Decree on Sale of Shares and Company Assets by Public Auction (RM OG No. 20/04); 
- Decree on Sale of Shares and Company Assets by Public Tender (RM OG 8/99, 31/00, 14/03, 
59/03 and 65/03); 
- Decree on Publishing, Acquiring and Use of Privatization Vouchers (RM OG No. 17/01, 
37/01, 11/02); 
- Decree on Dematerialization of Securities and Privatization Vouchers (RM OG No. 8/99 and 
26/00); 
- Decree on the Mode of Implementing Employees' Rights to Free Shares (RM OG No. 24/99); 
- Law on Settling Obligations and Claims Relate d to Foreign Debt and Foreign Currency 
Saving Deposits of the Citizens (RM OG No. 55/03, 11/04); 
- Law on Restitution of Property Rights and Compensation (RM OG No. 21/04); and 
- Law on Investment Funds (RM OG No. 49/04). 
Privatization is conducted in accordan ce with annual plans of privatization, issued by the Government 
and based on proposals made by the Privatization Council.  The plans contain the number of shares in 
each company to be privatized or given back to fo rmer owners of industries nationalized after World 
War II. 
The Law envisages the following methods of privati zation:  sale of stocks, sale of assets, mass 
voucher privatization, batch sale, debt equity swap , joint venture, and a combination of these methods. 
Shares are supposed to be sold by cash auctions a nd international tenders.  Debt equity swaps and 
joint ventures are allowed only as exceptions, if other methods have not been successful. Each 
company being privatized may sell its assets only af ter obtaining approval from the Privatization 
Council. 
Mass Voucher Privatization (MVP) was relatively succes sfully completed.  In this process more than 
200 companies, covering about one fourth of the state-owned companies, were privatized. The 
process included all adult citizens, which is about 90 per cent of Montenegrin citizens. About 
66.47 per cent of voucher points were invested in pr ivatization funds, and 29.05 per cent directly in 
the companies.  Six privatization funds were lic ensed:  HLT Fund, Eurofond, Trend, Atlas Mont, 
Moneta and MIG, which met the requirement to coll ect more than 50 million voucher points and other 
legal prerequisites.  More than 50  per cent of Montenegrin citizens became owners of social capital by 
way of vouchers and internal shares.  However, th e trade in shares is slow, so that new majority 
owners are not found quickly.  Restructuring is pr ogressing more slowly than expected partly due to 
the much diversified ownership structure that will ta ke time to concentrate in the process of free trade 
in shares.  WT/ACC/CGR/3 
Page 12  
 
 Over 67 per cent of the state capital has been privati zed, but this percentage is smaller in the largest 
companies.  In general, 130 firms are completely privatized.  About 80 per cent of the capital in an 
additional 179 firms has been privatized and 70 per cent of the capital in 27 companies.  However, in 
the 17 largest companies, there is only 35 per cent of private capital, and the rest expected to be 
privatized by international tender. 
Models of investment so far are: 
- purchase of shares (majority, minority packages); 
- increase of capital; 
- purchase of facilities by public auction; 
- establishment of banks; 
- joint ventures for: 
- mobile telephony; 
- insurance; 
- tourism; 
- pharmaceutical industry; 
- food production; 
- footwear and garments industry; 
- regional water supply system; and 
- metal industry. 
- BOT system (Anode Plan in KAP); 
- Concessions (water springs, submarine research and other natural resources); 
- Establishment of branch offices; 
- Donations for some programs in infrastructure building; and 
- Establishment of companies. 
- Sector priorities 
 
Sector priorities in the Republic of Monten egro are outlined in the following table: 
Table II.4. Sector priorities  
Sector Priorities 
Industry, energy 
system and mining  stabilization, enhancement of business ef ficiency and the quality of products 
adjusting production of goods to market needs restructuring and privatization of enterprises, and implementation of recovery 
program for the lumber industry 
connecting Montenegrin energy system to the systems of other countries (October 2004) 
Agriculture, forestry and water management supporting entrepreneurship and private initiative, balancing  regional development 
giving incentives for light industry based on domestic raw materials strengthening of expert and inspection functions 
establishment of stronger connection betw een tourism and agriculture (domestic food 
for foreign guest), in order to achieve  the most favourable form of export 
strengthening of competitiveness of domesti c manufacturers and increased exports of 
agricultural goods 
creation of all the necessary prerequisites for increased utilization of all available 
natural resources through implementation of the structured utilization of agricultural 
land 
development of family business in agriculture, with introduction of machinery as well as through modernization of the working process  WT/ACC/CGR/3 
 Page 13 
 
 
 Sector Priorities 
Maritime industry, 
transportation and communications - Maritime industry
 
 reconstructing and modernization of large dock in Adriatic shipyard, rehabilitating 
and reconstructing of accessory mole an d other projects of the Port of Bar 
 
- Transportation
  
 reconstruction of existing road infrastr ucture and construction of new traffic 
infrastructure 
rehabilitation of Montenegrin section of Bar-Belgrade railway  establishment of new air traffic connections 
 
- Communications
 
 
privatization SC "Telekom" of Montenegro  
Tourism improved and broader tourist infrastructure 
modernization of hotels and other forms of tourists accommodation improved conditions for foreign investments in tourism 
support to the private entrepreneurship 
privatization of hotels and  Ski centre  improved competitiveness of human resources 
 
- Regional development plans  
Montenegro is traditionally divided into three regions: coastal, central and northern region.  
Developed coastal area is concentrated on tourism, industry and services are dominant in the central 
region, while the mountainous north is relatively un developed, in which tr aditional agriculture and 
wood processing are the main activities, along with the possibility for further development of ski 
tourism.  Reducing the development differences betw een the regions is one of the main goals of 
development policy in Montenegro, and is a priority  in the Economic Policy for the year 2005.  The 
Republic Secretariat for Development is in charge for realization of regional development programs, 
and it has elaborated document "Strategy on Regiona l Development of Montenegro" for the next mid-
term period.   
The goals of regional development for 2005 are define d by the Strategy of Regional Development, as 
well as by the Action Plan for its implementation.  They include: 
- Provision of special incentives for least developed areas through adequate tax and credit 
policy and donor assistance;  
- Special development programs for the telecommunication and traffic infrastructure;  
- Completion of electrification in un-electrified village settlements;  
- Beginning of valorization of Bjelasica project (d evelopment of eco-tourism) in the North; and 
- Implementation of the program on integral de velopment Montenegro's Prokletije (mountain 
chain) and the Durmitor area. 
Development policy measures are intended to stim ulate positive changes in movement of population 
and revitalization of demographically endangere d areas and villages, particularly in the high 
mountains areas, as well as in the areas where the popula tion density is below six inhabitants per km2.  
Adequate measures are planned to be enforced in or der to improve health and social protection of the 
citizens in these areas.  
In all activities related to regiona l development, the accent will be on monitoring of the municipality 
development indicators (within the Republic Bureau  for Statistics-Monstat there will be a special WT/ACC/CGR/3 
Page 14  
 
 department in charge for collecting information at  the municipality level) and work on drafting of 
nomenclature for the zoning units "NUTS" in accordance with European standards. 
With respect to transportation infrastructure, the Government will complete building of the Sozina 
tunnel by mid-2005, which will significantly re duce the travel time between Podgorica and the 
seaside, and will improve freight transportation betw een the Port of Bar and the interior.  Also, 
rebuilding of the main road between Podgorica and Kolasin in the north of Montenegro should begin 
soon.  Rebuilding of this road will also signi ficantly improve communication between Montenegro 
and Serbia.  At present, that road is the main ro ad for transport between Serbia and Montenegro, but 
the traffic is functioning with more difficulty during the winter time.  
(b)  Monetary and fiscal policies 
- Monetary policy 
 
According to the Law on the Central Bank of Mo ntenegro, the Central Bank is an independent 
institution of the Republic of Montenegro, exclusivel y responsible for monetary policy, establishment 
and maintenance of a stable banking sector, and an  efficient payments system in the Republic.  
The Central Bank has had a very limited role in m onetary policy since the adoption of the Euro on 
1 January 2002.  Adopting the Euro was effective in reducing inflation to 6.7 per cent in 2003, but 
resulted in the loss of the primary monetary instrume nt and forced a reform of the old ZOP payments 
system.   
The change in its role turned the Central Bank of Montenegro (CBM) into a bank supervision and 
payments oversight authority, allowing inflation to  be a combination of imported inflation and supply 
side shocks.  An important result was the restructur ing of banks and enhanced  supervision over their 
work by the Central Bank.   
The main point of the restructuring of the banking system in Montenegro is the privatization of state-
owned banks and the improvement of standards and supervision of  the banks through the introduction 
of international standards.  
The Government of the Republic of Montenegro in  its strategic document Economic Reforms Agenda 
(see Section II, Economic development plan) empha sizes privately owned banking system that should 
be completely integrated into international st ructures, and should offer predictable and stable 
conditions for depositors and reasona ble credit rates, as well as fully implementation of international 
accounting standards. 
Major reforms have already been carried out.  Th ree years ago, there were no foreign banks in 
Montenegro.  Today, approximately 75 per cent of th e banking sector is privately owned, much of it 
by foreigners.  Ten banks now operate in Montenegro, three of them either totally or majority foreign-
owned.  After the privatization of the Podgoricka Bank, there will be no state owned capital in the 
banking sector (privatization planned for the year 2005).  
The banking sector is both liquid and solvent. All banks fulfil the prescribed minimum capital 
adequacy ratio of 8 per cent.  In the 2001-2003 peri od, more than 41 million Euros have been invested 
in banks in Montenegro. In the same period, depos its increased from €10 to more than €224 million.  
Certificates of deposits have grown rapidly.  Almost  80 per cent of deposits are held in private banks. 
Approximately 55 per cent of deposits are private ow nership.  Savings of citizens increased from €5 
to more than €45 million in the same period.   WT/ACC/CGR/3 
 Page 15 
 
 
 As of August of 2003, the annual growth rate of  total loans was 73 per cent.  Approximately 
83 per cent of these loans were given to pr ivate companies and natural persons.   
Banking services have also increased.  Four banks now issue debit cards and three banks offer 
housing loans.  
The Central Bank has passed the Decision on Micro- Credit Financial Institutions (RM OG No. 1/03) 
and the Decision on Credit Unions (RM OG No. 1/ 03, 53/03). These laws regulate establishing, 
issuing and revoking of licenses, dealing and control of micro-credit financial institutions and credit 
unions.    
The Central Bank of Montenegro has adopted a fully-fledged regulatory framework governing 
commercial bank operation.  Thirty-five by-laws gov erning bank supervision have been adopted and 
an additional seven by-laws govern financial a nd banking operations.  In  mid-2003, independent 
auditors of Bearing Point Group performed an asse ssment of compliance with the Basel principles in 
Montenegro, which showed that the Central Bank of  Montenegro has managed to harmonize its banks 
supervision as it follows: 
- 9 main principles-fully harmonized; 
- 14 significantly harmonized; 
- 4 principles remain significantly non-harmonized; 
- 1 is not harmonized at all; and 
- 2 principles are considered non-applicable in Montenegro.  
The Central Bank has conducted 80 direct on-site  reviews of commercial banks. The CAMELS 
methodology has been adopted and implemented.  Ba nk ratings are being continuously monitored.  A 
software package for bank portfolio analysis and reporting of commercial banks to the CBM has been 
developed.  With the aim of harmonizing banks with  modern business standards, the rules related to 
the interest rate and the requisite  reserve rate have been adopted . The requisite reserve rate was 
reduced from the initial 100 per cent at the be ginning of 2002 to 23 per cent in 2003.  
The measures prescribed by the law have been a pplied to insolvent banks. The bankruptcy procedure 
was initiated for one bank; the liq uidation procedure was initiated for a second bank, one bank was 
granted a merging procedure; and the largest stat e-owned bank (Montenegro bank) was restructured 
and privatized. 
There are other important steps that have been undertaken aimed at banking sector reform in 
Montenegro: 
- The Law on Regulation of Obligations and Cl aims Based on Foreign Debt and Foreign 
Currency Savings of Citizens (RM OG No. 55/03, 11/04) has been adopted.  By this Law, 
obligations based on foreign de bt and foreign currency savings became public debt, which 
increased the solvency of the financial sect or and the confidence of citizens in the 
Government and the banking sector. 
- In December 2002, new regulations were adopted  to enable the CBM to supervise offshore 
banks in accordance with regulations appli cable to onshore banks, and with a view to 
terminating off-shore operations in Montenegro. According to the provisions of the old Law 
on Companies Established and Operating under Special Conditions in Montenegro (RM OG 
No. 23/96, 34/02, 62/02), foreign companies could be established a nd could operate under 
privileged conditions with guara ntee of such position even in the case of future amendments 
of legislation, and with guarantee of conf identiality of business data.  However, these 
provisions were first abolished by the decisi on of Constitutional Court of Montenegro in 
July 2002, and subsequently by  amendments of the Law in November 2002, by which the title WT/ACC/CGR/3 
Page 16  
 
 of the Law was changed into Law on Forei gn Companies Established and Operating in 
Montenegro. 
- The Law on Prevention of Money Laundering (RM OG No. 55/03) entered into force on 
9 October 2003 and the regulations for its implementation have been enacted. The administrative authority responsible for preventing money laundering was established by this 
Law.  Amendments to the Law will also be made regarding the prevention of terrorism 
financing. 
- The Law on Protection of Deposits (RM OG No. 40/03) has been enacted. 
- As of 5 January 2004, the payments system operates through commerc ial banks.  Formerly, 
the payments system was centralized within the Central Bank of Montenegro.  
- The draft Insurance Law has been prepared. 
- Fiscal policy
 
The Government of the Republic of Montenegro de termines tax policy and implements fiscal system 
reform.  These reforms are being undertaken in  consultation with the World Bank and the 
International Monetary Fund. 
Fiscal reform in Montenegro started in 2001.  Many  laws were adopted with a view to establish a 
more transparent and efficient collection of budget revenues.  All laws have  been harmonized with 
EU legislation.  There are many reform-oriented activities in the fiscal system, but the most radical 
changes were introdu ced by the following: 
- The monopoly of the domestic payment services (t he former ZOP) was abolished, allowing 
commercial banks to initiate and settle inter-bank payments without mandatory 
intermediation of any institution or agency; 
- The new Law on Budget (RM OG No. 40/01, 44/01) was adopted in Montenegro in 2001; 
- Value added tax, as opposed to the previously -applied sales tax system, was implemented in 
Montenegro in April 2003; and 
- Fiscal cash registers have been introduced  and tax identification numbers applied. 
The Treasury of the Republic of Montenegro has b een established on the basis of the Law on Budget 
and the Instructions on the State Treasury Work .  Its establishment and enforcement of the Law on 
Public Procurement (RM OG No. 40/01) have incre ased the level of transparency, as well as the 
efficiency of public expenditures control, while di scretionary rights and the possibility of corruption 
in public administration have been reduced.  Reve nues, which were previously distributed through 
public administration bodies, judicial bodies and othe r institutions, have been centralized within the 
Budget of the Republic.  More efficient collec tion of taxes has been achieved.  Additional 
improvement in management of public  expenditures is related to the introduction of the concept of the 
middle-term framework of budget expenditures, whic h was for the first time presented in the Budget 
Law for 2003. 
Currently the concept of a program budget is being developed. A pilot project has been implemented 
in two institutions:  the Ministry of Transport a nd Maritime Affairs and the Institution for Execution 
of Penalties (penitentiary). Implementation of the program budget has been continued, and therefore 
program budget has been implemented in the follow ing institutions:  Ministry of Education and 
Science, Bureau for Education, Ministry of Tourism and Tourist Organization of Montenegro, in accordance with the Budget of the Republic for 2005.  Internal audit has been established within the 
Ministry of Finance.  The Law on Supreme Financ ial Institution for Auditing has been adopted and 
published in the "Official Gazette of RM", No. 28/ 04.  According to this law, Supreme Financial 
Institution for Auditing is established, as well as Senate of this institution.  The institution is in charge 
of external control of public revenues, c onsumption and managing of state property.   WT/ACC/CGR/3 
 Page 17 
 
 
 A new Excise Tax Law came into force on 1 April 2002.  The list of excise goods has been reduced 
to: alcohol beverages, tobacco products and mi neral oils, derivatives and substitutes thereof. 
The Personal Income Tax Law and Corporate Profit Ta x Law, which came into force on 1 July 2002, 
prescribe progressive tax rates.  Proportional 19 per cent income tax rate has been replaced by the progressive rates ranging from 0 per cent to 25 per cen t.  Flat corporate profit tax rate of 20 per cent 
has been replaced by progressive rates of 15 per cent for profits up to €100,000 and 20 per cent for 
profits over €100,000.  In accordance with the amendments to the Corporate Profit Tax Law, 
introduced in December 2004, the progressive rate of 9 per cent was introduced.  The implementation 
of these laws has had a positive impact on budge t revenues.  In January 2003 the citizens of 
Montenegro submitted tax declarations for the first time.    
The Law on Real Estate Tax came into force on 1 January 2003.  Municipalities are in charge of 
implementation of this Law.  They collect total re venue from the taxes.  The tax rates are based on the 
market value of real estate rather  than on the estimated value. 
With the implementation of the Value Added Tax Law (1 April 2003), the sales tax of 12 per cent on 
services and 24 per cent on most goods were replaced by the VAT rate of 17 per cent.  Exemptions 
and "zero" tax rate have been prescribed for cer tain goods and services.  Exempted goods are basic 
foodstuffs (milk, bread, oil, sugar), medical equipmen t, and books. The "zero" tax rate is applied to 
export of goods and services. The introduction of VAT significantly reduced the grey economy in 
both goods and services.  
The following tax laws were adopted in Mo ntenegro (Please see Annex 2 of document 
WT/ACC/CGR/3/Add.1 for details):  
- The Law on Corporate Profit Tax (RM OG No. 65/01); 
- The Law on Personal Income Tax (RM OG No. 65/01); 
- The Law on Value Added Tax (RM OG No. 65/01, 38/02, 72/02 and 21/03); 
- The Law on Excise Tax (RM OG No. 65/01); 
- The Law on Tax Administration RM OG No. 65/01); 
- The Law on Administrative Fees (RM OG No. 55/03); 
- The Law on Local Self-Government Financing (RM OG No. 42/03, 44/03); 
- The Law on Sales Tax for Used Motor Vehicles, Vessels and Aircrafts (RM OG No. 55/03); 
- The Law on Sales Tax on Real Estate (RM OG No. 69/03); and 
- The Law on Amendments to the Law on Personal Income Tax (RM OG No. 37/04). 
(c)  Foreign exchange and payments system 
- Foreign Exchange and Payments System
 
Foreign exchange is not an issue in Montenegro .  Under the Law on the Central Bank, the Central 
Bank (CBM) is an independent institution exclusivel y responsible for monetary policy, creating and 
maintaining a sound banking sector, and an efficient pa yments system in the Republic.  In accordance 
with this Law, the Euro is the monetary unit, the legal tender and the reserve currency.  The Euro was 
introduced in order to facilitate the turnover of goods and services and international communication of 
Montenegro, which, as a small, open country, need s to have a strong convertible currency.  
The new Law on the Central Bank, the Law on Ba nks (RM OG No. 52/00, 53/00), as well as the 
Foreign Investment Law (RM OG No. 52/00) enab le free payments without any restrictions. 
According to the Decision on Keeping Forei gn Currencies with a Commercial Bank (RM OG 
No. 8/01), payments can be made without any restri ctions, except for the requirement to inform the 
Central Bank of Montenegro. WT/ACC/CGR/3 
Page 18  
 
 Payment system reform began with the Law on th e Central Bank, which transferred ownership and 
the employees of the old ZOP payments system to the Central Bank. 
The payment system reform in Montenegro was impl emented as part of the overall plan for fiscal and 
banking sector reform. This key reform has accomplis hed a fundamental change in the roles of the 
payments system participants (Central Bank, comm ercial banks, Post Office) without disruption to 
Public and private Sector.  
Phase I has accomplished the following fundamental changes: - The ZOP has been integrated into manageme nt and the operational structures of the CBM; 
- Migration of most significant payment operations  to the commercial banks has been finalized 
(opening, maintenance, and closing of account s, receiving and executing of cash and non-cash 
payment orders, treasury operations, and opera tions in terms of reporting to clients). 
Simultaneously, enlarging the "branch network" of commercial banks, approvals were issued 
for these payment system operations in 73 count ers within each municipality in the Republic 
of Montenegro; 
- The ZOP physical branch network has been dismantled; 
- Regional Centers of the CBM have been opened for the purpose of cash distribution for banks 
and to ensure payment operations for clients of the CBM; 
- Finalization of project dealing with Post-office operations under new terms, i.e.,  "Post-office 
as bank agent".  The Post Office, as the authorized agent of the banks, can receive and disburse cash for clients which are not involved in registered activities; 
- Fixed fees have been established for 95 per cent of Central Bank services, replacing the 
former ad valorem  tariffs; and 
- Banks now receive fees for providing services, while the Central Bank receives income from 
charged operating costs. 
With the finalization of Phase I, the commercial ba nks have taken over the majo r part of the payments 
system activities:  the opening and closing of th e accounts, reception and performance of cash and 
non-cash orders, treasury operations, and reporting to clients. 
Phase II of the Payment System reform will include closing the legacy system of processing bank 
payment orders, and development of a new CBM pa yment system in line with the development of 
internal systems in commercial banks.  
The payment systems reform did not end with th e migration of cashless and cash payment operations 
services to banks.  The development of a new paymen t system is ahead, which will be in accordance 
with the international standards.  This implies th e development of a payment system within each bank 
that will enable payment processing for their client s.  The function of the Central Bank will be to 
process inter-bank payments.  The Central Bank will continue to provide payment services for its 
clients (Government agencies, domestic and forei gn banks, international financial institutions and 
donor organizations).  
The Law on Current and Capital Transacti ons with Abroad is being drafted. 
- Relations with the IMF
 
The former SFRY was one of the countries partic ipating in the Breton Woods Conference (in 1944) 
and one of the founders of the IMF and the Worl d Bank.  From that moment on, the SFRY was 
approved for thirteen stand-by arrangements.  Th e most intensive cooperation with the IMF occurred 
between 1980 and 1991, when the SFRY was approved for seven stand-by arrangements in the value 
of 3.5 billion "special drawing rights" (SDR), 2.7 billion of which has been used.  The SFRY made  WT/ACC/CGR/3 
 Page 19 
 
 
 the first financial arrangement with the IMF in 1949, in the value of US$9 million, and the last one in 
18 March 1990, in the value of SDR 460 million.  
The Board of Executive Directors of the IMF concluded that the SFRY ceased to exist on 
14 December 1992, and therefore was no longer a member of the IMF.  At the same time, the IMF set up the terms for the successor-countries (Bosnia a nd Herzegovina, Croatia, the FYROM, Slovenia and 
the FRY) to succeed as members of the IMF.  The FRY's share of assets and liabilities of the former 
SFRY was 36.52 per cent. 
On 20 December 2000, the IMF Committee of Executiv e Directors decided that the FRY met all 
requirements for becoming a member of the institution, with retroactive effects from 
14 December 1992. 
On that day, the IMF approved SDR 116.9 million unde r the urgent post-conflict facility to support 
the program of economic stabilization and the recovery  of the FRY institutions and the administration. 
A share of this amount was used to pay off the "bridge" loan of SDR 101.1 million, which 
Switzerland and Norway approved for settli ng financial obligations towards IMF. 
The present quota of the Serbia and Montenegro in the IMF is SDR 467.7 million. 
In 11 June 2001, the Committee of Executive Dir ectors of the IMF approved a stand-by credit of 
SDR 200 million to the FRY to support the econo mic program of the Federal Government.  In 
May 2002, the IMF approved an  Extended Arrangement for SDR 650 million (about US$829 million) 
to support the FRY's economic program in 2002-2005. 
The establishment of the State Union of Serbia a nd Montenegro raised the question of who would 
represent the new state in the IMF. That question w as particularly important because the two member 
states have full autonomy in their monetary and fi scal policies, and use two different currencies. The 
issue was resolved in the Agreement on Representati on of the State Union of Serbia and Montenegro 
in the International Financial Organizations (Deci sion on Representation of the State Union of Serbia 
and Montenegro in the IMF, 15 April 2003), signed  between the Republic of Serbia and the Republic 
of Montenegro in 2003.  That Agreement is Annex 19 of the Action Plan.  
The Governments of Serbia and of Montenegro agreed  with the International Monetary Fund to adjust 
the rights and obligations of Serbia and Monten egro to in a manner appropriate to the new 
constitutional arrangement of the Stat e Union of Serbia and Montenegro. 
The fiscal agent for the State Union in the IMF is th e National Bank of Serbia, in cooperation with the 
Central Bank of Montenegro. The depositor for Serb ia and Montenegro is the National Bank Serbia 
and the governor of Serbia and Montenegro in the IMF is the governor of the National Bank of Serbia. 
The alternate governor in the IMF is the chairman of the Central Bank of Montenegro. 
The local currency for transactions with the Intern ational Monetary Fund is the Dinar in Serbia, and 
the Euro in Montenegro. WT/ACC/CGR/3 
Page 20  
 
 Table II.5. Financial Position in the Fund, 31 December 2004
 
I.  Membership Status: Joined: 14 December 1992; Article VIII 
II.  General Resources A ccount: SDR Million %Quota 
       Quota 467.70 100.00 
       Fund holdings of currency  1,088.68 232.77 
       Reserve Position 0.00 0.00 
       Holdings Exchange Rate  
III.  SDR Department: SDR Million %Allocation 
       Net cumulative allocation 56.66 100.00 
       Holdings  0.03 0.06 
IV.  Outstanding Purchases and Loans: SDR Million %Quota 
       Extended Arrangements  462.50 98.89 
       Stand-by Arrangements  158.46 33.88 
V.  Latest Financial Arrangements: 
 Amount Approved Amount Drawn 
Type SDR Million SDR Million 
EEF 650.00 462.50 
Stand-by 200.00 200.00 
 
(d)  Foreign and domestic investment policies 
Investment policy of Montenegro is primarily direct ed towards the rapid inclusion in the world trends 
of foreign direct investments, and thus towards th e improvement of entire investment climate, through 
realization of key goals given in the Economic Re forms Agenda.  Attracting foreign investments is 
one of the top priorities of Montenegro, having in  mind  positive effects that foreign investments 
might cause, such as reduced unemployment rate  as well as creation of new working positions. 
Foreign and domestic investment policies are targeted toward establishing an open/liberal, 
transparent, non-discriminatory, and fair investment environment that provides strong legal protection 
and guarantees to investors, regardless of their or igin, including profit repatr iation, national and MFN 
treatment, access to dispute settlement bodies, and protection against expropriation.  Expropriation 
(limitation or deprivation of the r eal estate ownership right) is possible only if it is in the public 
interest prescribed by the law, or on the basis of  the law, with the compensation which cannot be 
lower than the market compensation as well as with the interest until the final payment. 
Furthermore, the overall policy, legal, and instituti onal reform in Montenegro is targeted toward 
improving and stabilizing the investment environmen t.  This includes conforming the foreign trade 
regime to the WTO agreements, modernizing the commercial legal environment, protecting property 
rights, streamlining administrative procedures, reforming the financial sector, and stabilizing macroeconomic policies.  The Government of Montenegro has enacted the Economic Reform 
Agenda, which is an overall policy document that sets the strategy and tasks in all economic and 
related areas. A key goal of the Agenda is to  develop an environment favourable for foreign 
investments.  
In July 2003, the Foreign Investment Advisory  Service (FIAS) undertook a two-week mission to 
Montenegro to evaluate the investment environment and advise on ways in which it could be improved.  The FIAS mission reviewed policies, examined legislation and regulations to assess how 
accurately they reflected announced  policies, assessed their implementation through administrative 
processes, and reviewed the investment promotion strategy, including the adequacy of the existing 
law, institutions and activities.  The most impo rtant suggestions were that the Montenegrin 
Government establishes a new regulatory body attach ed to the Prime Minister's cabinet, and make 
certain changes in the existing Law on Foreign Invest ments in order to provide  better conditions based 
on international principles.  In response, a new Montenegrin Investments Promotion Agency (MIPA)  WT/ACC/CGR/3 
 Page 21 
 
 
 has been established in 2004 by the Decision of th e Government of the Republic of Montenegro. The 
Agency should act as a promoter of investment pr ojects.  The Agency sets the investment promotion 
strategy, coordinates all activities on attraction of foreign investments, and develops partnerships 
between the public and private sector. 
The Foreign Investment Law of RM (RM OG No. 52/00) prescribes no limitations on the 
participation of foreign capital in Montenegro, exce pt in the cases of production or trade in weapons 
and ammunition, or production in the border distri ct, or in national park where a foreign person 
cannot independently possess more than 49 per cent of stocks.  A foreign investor may be a legal 
person with the head office in foreign country; a fo reign natural person or a Montenegrin citizen with 
residence in a foreign country longer than one year; a company established by a foreign person in 
Montenegro, or a domestic company with more than  25 per cent foreign interest.  Foreign investors 
are subject to the same treatment as domestic investors (national treatment principle) and there are no reciprocity requirements.  All foreign investment s in RM must be insure d in accordance with the 
insurance regulations, and must be registered with the Agency for Fo reign Investments and 
Reconstruction of Economy for statistical purposes onl y.  Foreign investment in the production or 
trade in weapons requires approval from the defence authorities.  The Government intends to amend 
this law in order to furthe r strengthen legal guarantees. 
FDI in Montenegro in 2003 was at the level of €50. 5 million.  Their volume for 2004 is estimated to 
be circa €70 million, and projection for the year 2005 is €150 million.  Please see Section II. 4. for more details on the composition and volume of foreign investments.  
It is expected that foreign direct investment w ill increase given profitable opportunities in Montenegro 
and improved access to domestic and foreign markets. 
(e)  Competition policies 
Montenegro does not yet have a developed system  of competition regulations.  Although the FRY 
Antimonopoly Law (FRY OG No. 29/96) remains technically in force, it has never been applied in 
practice. 
The Ministry of Economy of Montenegro, in coopera tion with the relevant ministry in Serbia, has 
prepared a draft Law on the Protection of Competition that is expected to be  enacted separately in 
both Montenegro and Serbia.  The principal reaso ns for introducing competition regulations into 
Montenegro are:  
- The goal of Montenegrin long-term developmen t policy is to develop a market economy on 
the model of developed countries with  developed competition legislation; 
- Montenegro intends to become a member of the European Union, and thus must establish 
competition legislation that will meet  modern European standards; and 
- A modern system of competition law in Montenegro should prevent dealing in the market that 
represents unfair practices.  Unfair practi ces weaken the competitiveness of the economy as a 
whole, which results in slower economic and technological development and higher prices for 
consumers of goods and services.  
Main elements of the draft Law on the Protection of Competition.  The draft Law has seven parts: 
PART I - Main Provisions
 
Part I defines the subject and purpose of the law,  the type of legal acts and actions infringing 
competition, the territorial and ratio personae applicat ion of the law, and the relevant market, based on 
which the assessment of any infringement of competition is made. WT/ACC/CGR/3 
Page 22  
 
 PART II - Infringements of Free Competition
 
Part II defines acts infringing competition as follows: - Prohibited agreements:  Agreements preventing,  restricting, or impairing competition are 
prohibited, except in the events envisaged by la w when a general or more far-reaching interest 
is present that justifies a temporary infringement  of competition; when agreements contribute 
to the improvement of production or distribution, or to the stimulation of technical or 
economic development, while cons umers are given a fair share of  benefit, and limitations are 
introduced, necessary for achieving such goals an d do not unable competition in the large part 
of goods and services; 
- Abuse of a dominant position:  A dominant position  is not prohibited; but it is prohibited to 
abuse such a dominant position, such as by selling below the cost of production and 
marketing with an intent to destroy competitors, and similar practices; and 
- Merger Control:  Mergers of market particip ants with significant economic and financial 
power, such that their merging would result in a dominant position, will be prohibited if the 
consequence would be an infringement of compe tition. This is another form of control of 
abuse of dominant position.  
PART III - Competition Protection Agency
 
An independent Competition Protection Agency that would be responsible for further development of 
the competition regulations and their pr oper application will be established.  
PART IV - Administrative Procedure  
Part IV provides procedures for the conduct of i ndividual cases, emphasizing differences from general 
rules of the administrative procedure.  Decisions of  the Agency are final, and against such decisions 
the administrative dispute may not be undertaken di rectly in the Administrative Court of the Republic 
of Montenegro.  Therefore, judicial protection is provided. 
PART V - Penal Provisions  
Part V provides sanctions for offences against the la w. The draft is specific, with strict punishments 
for violating the competition rules.   
The Draft Law is in compliance with:  Articles 81, 82 and 86 of the Treaty on European Union; 
European Commission Regulation 2790/1999; Euro pean Commission Regulation 139/2004; European 
Commission Regulation 17/62; European Commission Decree OJ C 372/1997; and European Commission Decree OJ C 368/2001. 
It was estimated that approximately €100,000 will be  needed for the enforcem ent of this Law during 
2005. These financial assets will be provided from the Budget of the Republic of Montenegro. 
3.  Foreign trade in goods and services  
During the past few years, Montenegro has been r unning a large deficit in the foreign trade in goods, a 
slight surplus on the services balance, and a substa ntial current account deficit (Trend of the foreign 
trade, expressed in Euros for the period 2000- 2004, is given in the Annex 1 of document 
WT/ACC/CGR/3/Add.1).  WT/ACC/CGR/3 
 Page 23 
 
 
 Table II.6. Exports and imports in Montenegro - 2002-2004 (US$ thousand)  
 2002 2003 2004 (I-VII) 
GOODS Balance -401,590 -408,556 -253,680 
Exports 305,065 304,884 272,176 
Imports 706,655 713,440 525,856 
SERVICES Balance 93,815 126,584 74,014 
Revenues 162,372 217,135 142,913 
Expenditures 68,557 90,551 68,899 
Source:  The Central Bank of Montenegro 
Visible exports in the course of 2003 amounted to US$305 million, the same as in 2002.  In 2003, 
aluminium made up 40 per cent of the total visible exports of Montenegro.  Visible imports in 2003 
amounted to US$713 million and it increased by US$7 million or 1 per cent compared with the same 
period in 2002.  
Revenues from services in 2003 amounted to US$217 million and they increased by US$55 million or 
34 per cent compared with the same period the year before.  Expenditures from services in this period were US$91 million and they increased by US$22 milli on or 32 per cent compared with the same 
period in 2002. 
The value of exported goods in the first seven  months of 2004 was US$272 million, which is 
51 per cent more than in the corresponding period in 2003.  Visible imports in this period amounted to 
US$526 million, US$158 million more than in the same period the year before.  The average monthly 
imports amounted to US$75 million, while this  monthly average for the entire 2003 was US$52.5 
million. 
The main characteristics of Montenegrin imports fo r the first seven months of 2004 are a 45 per cent 
increase in oil imports, an increase in import of  other goods and goods from Serbia and Kosovo of 
64 per cent and 19 per cent, respectively, and a 6 per cent increase in imports of electricity. 
Revenues from services in the first seven months  were US$143 million, which is 30 per cent more 
than in the corresponding period in 2003.  Expenditures for services amounted to US$69 million, thus being US$23 million or 16 per cent more than the same period in 2003. 
Chart II. 5. Exports in the period January –December 2002/2003(US$ thousand)
 
050000100000150000200000250000300000350000
Export of goods Export of services2002
2003
 
Source:  The Central Bank of Montenegro WT/ACC/CGR/3 
Page 24  
 
 Chart II. 6. Imports in the period January –December 2002/2003(US$ thousand)
 
 
0100000200000300000400000500000600000700000800000
Import of goods Import of services2002
2003
 
Source:  The Central Bank of Montenegro 
Table II. 7. Structure of goods exports by countries (US$ thousand)  
Exports 2002 % 2003 % Index 
2003/2002 
Switzerland 149,164 48.90 113,912 37.36 76.37 
Italy 14,377 4.71 22,658 7.43 157.60 
Greece 849 0.28 5,85 2 1.92 689.28 
Virgin islands 1,397 0.46 5,193 1.70 371.73 
Germany 842 0.28 2,088 0.68 247.98 
Serbia & Kosovo 96,349 31.58 105,432 34.58 109.43 
B&H 7,804 2.56 19,591 6.43 251.04 
Croatia 1,157 0.38 6,206 2.04 536.39 
Hungary 5,059 1.66 2,752 0.90 54.40 
Slovenia 886 0.29 2,429 0.80 274.15 
Albania 2,083 0.68 2,516 0.83 120.79 
Cyprus 6,223 2.04 6,858 2.25 110.20 
Malta 2,565 0.84 1,506 0.49 58.71 
Other 16,310 5.35 7,891 2.59 48.38 
Source:  Central Bank of Montenegro and Customs Administration of Montenegro  
Analyzing the exports by regions, it can be seen that  the biggest trade partners of Montenegro were 
developed countries, then countries in tr ansition, mainly Serbia and Kosovo. 
Table II. 8. Structure of goods imports by countries (US$ thousand)  
Imports 2002 % 2003 % Index 
2003/2002 
Italy 62,042 8.78 58,689 8.23 94.60 
Greece 39,641 5.61 60 ,237 8.44 151.96 
Germany 33,432 4.73 34,360 4.82 102.78 
Austria 24,505 3.47 28,037 3.93 114.41 
Switzerland 10,411 1.47 12,103 1.70 116.25 
USA 29,091 4.12 7,397 1.04 25.43 
France 4,226 0.60 7,606 1.07 178.29  WT/ACC/CGR/3 
 Page 25 
 
 
 Imports 2002 % 2003 % Index 
2003/2002 
Sweden 6,346 0.90 4,266 0.60 67.22 
Virgin Islands 7,018 0.99 3,247 0.46 46.27 
G. Britain 58,455 8.27 47,005 6.59 80.41 
Netherlands 9,834 1.39 3,996 0.56 40.63 
Spain 4,991 0.71 3,747 0.53 75.08 
Serbia & Kosovo 169,637 24.01 245,737 34.44 144.86 
Slovenia 54,270 7.68 52,110 7.30 96.02 
Croatia 53,037 7.51 46,982 6.59 88.58 
B&H 23,435 3.32 22,103 3.10 94.32 
Hungary 10,662 1.51 9,237 1.30 86.97 
FYR Macedonia 9,163 1.30 7,729 1.08 84.35 
Czech Republic 4,443 0. 63 5,680 0. 80 127.84 
Bulgaria 4,460 0.63 6,257 0.88 140.29 
Romania 1,106 0.16 4,053 0.57 366.46 
Albania 4,699 0.66 2,835 0.40 60.33 
Cyprus 26,526 3.75 14,267 2.00 53.78 
Other 55,185 7.81 25,724 3.61 46.61 
Source:  Central Bank of Montenegro and Customs Administration of Montenegro  
Analyzing imports by regions, it can be seen that in 2003 the biggest trade partners of Montenegro 
were countries in transition (48 per cent), than de veloped countries (42 per cent) – Greece, Italy, and 
Great Britain from which most electricity was imported. 
See Section VI. 1. for more details on trade in services.  
4.   Domestic trade in services including valu e and composition of foreign direct investment 
There are no statistics regarding domestic trade in services. Montenegro has one of the highest ratios of foreig n investments per capita in South-East Europe.  
Positive steps in political stability in the region and implementation of activities that promote economic freedom development led to Montenegro's being one of the most attractive countries for 
foreign investments in the region.  In the period 1997–September 2003, direct foreign investments in Montenegro were at the level of €331 million.
1  The amount includes the price of privatized 
companies, contracted three-year investments of the new owners, and estimated other investment, 
including greenfield investment.  
                                                      
1 Source: Agency for Reconstruction and Foreign Investment of Montenegro, October 2003 WT/ACC/CGR/3 
Page 26  
 
 Chart II.7.  FDI in Montenegro, 1997-2003, (in €1,000)
 
95,000100,000105,000110,000115,000120,000125,000
Sel l i ng pri ce Investment Esti mated other i nvestment  
The largest portion of FDI in Montenegro so far ha s been realized through privatization, as in other 
transition countries. The most significant investors that came through privatization include the Japanese ball bearings company, "Daido Metal Company", Greek Oil Company "Hellenic Petroleum", Belgian Interbrew and Slovenian hotel manageme nt company "HIT" and Nova Ljubljanska Bank. 
In order to attract foreign investments, the Gove rnment of Montenegro created a favorable legal 
framework that provides national treatment for foreign citizens in accordance with the Law on 
Foreign Investment (RM OG No. 52/03) foreign c itizens are given the same rights as domestic 
citizens.  
The Greek-Norwegian consortium ETL (European Telecom Luxembourg) and the establishment of 
the company ProMonte in March 1996 were the first fore ign direct investments in Montenegro.  It is 
estimated that the total amount of investments to  date are about €75 million, with approximately 
€55 million invested in the period 2000-2003
2. 
                                                      
2 Source: ProMonte GSM, Podgorica  WT/ACC/CGR/3 
 Page 27 
 
 
 Chart II. 8. FDI through privatization (in €1,000)  
020,00040,00060,00080,000100,000120,000140,000
1997 - 1999 2001 2002 2003
Selling p rice Contracted investments
 
A significant further flow of foreign capital is expect ed through the privatizations of the big national 
companies, Aluminium Plant and Telecom Montenegro .  However, there are still many things to be 
done in order to eliminate barriers to foreign inv estments and to insure the success of the process and 
further develop other foreign capital inflow channels3 through institutional building, further activities 
to insure full protection of property rights  and development of economic freedom.   
Statistics related to FDI. 
Table II. 9. Foreign Direct Investments in Montenegro – by countries 2002-2004 (US$ thousand)  
 2002 2003 2004 Jan-Aug Total 
Australia - 261.81 - 261.80 
Austria 1,718.05 2,145.57 2,301.28 6,164.91 
Belgium 996.49 495.53 - 1,492.02 
FYR Macedonia - 80.87 - 80.87 
Bosnia and 
Herzegovina - 1,360.88 63.84 1,424.73 
Virgin Islands - 235.53 0.00 235.53 
Estonia - 309.01 284.13 593.13 
France - 41.42 95.35 136.77 
Greece 14,466.70 55.29 216.85 14,738.8 
Netherlands 27.95 1,301.07 - 1,329.02 
Hong Kong - 72.77 - 72.78 
Croatia 0.88 102.75 72.85 176.48 
Ireland - - 183.62 183.62 
Israel 667.08 - 371.46 1,038.54 
Italy 88.82 84.70 - 173.52 
Japan - 776.60 1,380.18 2,156.78 
                                                      
3 Source: Survey on Business Environment, August 2003, CEED.  Two hundred and two managers and 
directors of Montenegrin companies were asked to evaluate what were  the biggest barriers for foreign 
investment.     
 
 WT/ACC/CGR/3 
Page 28  
 
  2002 2003 2004 Jan-Aug Total 
Canada - 33.76 140.65 174.402 
Cyprus 62.47 2,151.80 1,801.76 4,016.03 
Lesotho - - 18.20 18.19 
Latvia - 248.07 3,468.41 3,716.48 
Liechtenstein - - 241.371 241.37 
Lebanon - 662.73 - 662.73 
Lithuania - - 357.84 357.84 
Luxembourg - 831.92 - 831.92 
Hungary - - 2,877.06 2,877.06 
Germany 20,117.546 6,173.94 3,889.26 30,180.75 
Norway - 96.52 - 96.53 
Panama - - 1,608.68 1,608.68 
Russian  
Federation 17.60 269.31 798.94 1,085.85 
USA 526.49 265.48 563.82 1,355.79 
Slovakia - - 121.38 121.38 
Slovenia 3,417.43 15,159.61 16,440.79 35,017.83 
Serbia 492.00 684.05 270.69 1,446.74 
Switzerland 1,052.35 8,641.65 5,781.49 15,475.49 
Sweden - 80.75 13.57 94.32 
Denmark - - 62.69 62.69 
United Kingdom 28,343.96 7,866.68 502.86 36,713.50 
Other 9.62 21.45 - 31.067 
TOTAL 73,855.44 50,511.27 43,687.63 166,445.93 
Source:  The Central Bank of Montenegro statistics of foreign payment operations 
 
Composition of foreign direct investment. 
Table II.10. Composition of foreign direct investments in Montenegro  
by countries in 2002 (US$ thousand)  
 Production Services Financial Organizations 
Austria    1,674,011                       -    44.04 
Belgium - 996.49 - 
Greece - 14,466.70 - 
Netherlands - -  27.95 
Croatia  - 0.88  - 
Italy - -  88.82 
Cyprus 6.04 56.43  - 
Germany      827.66    16,583.31  2,706.58 
Russian  Federation - 17.60  - 
USA - 499.91 26.59 
Slovenia -     3,192.12  225.32 
Serbia          5.00         132.00  355.00 
Switzerland      800.00         252.35  - 
Denmark       1,850.00  -  
United Kingdom -   28,343.96  - 
Israel          667.08   - 
Other   9.62   - 
TOTAL 3,312.716 67,068.43 3,474.30 
Source:  The Central Bank of Montenegro statistics of foreign payment operations  WT/ACC/CGR/3 
 Page 29 
 
 
 Table II. 11. Composition of foreign direct investments in Montenegro  
by countries in 2003 (US$ thousand)  
 Production Services Real estate Financial 
Organizations 
Australia - - 261.81 - 
Austria    1,328.11        817.47  - - 
Belgium - - 495.53 - 
FYR Macedonia - - 80.87 - 
Bosnia and Herzegovina - 1,270.08 90.80 - 
Virgin Islands -        235.53  - - 
Estonia - 39.66 269.35 - 
France - 16.37 25.04 - 
Greece - - 55.29 - 
Netherlands - - 58.46 1,242.60 
Hong Kong - - 72.77 - 
Croatia  -          35.90  66.85 - 
Italy -            2.42  82.28 - 
Japan      776.60  - - - 
Canada - - 33.76 - 
Cyprus -     1,737.37  414.43 - 
Latvia - - 248.07 - 
Lebanon - 626.09 36.65 - 
Luxembourg -        831.92  - - 
Hungary -  -  - - 
Germany      193.84      3,908.37  865.57 1,206.16 
Norway  -          96.52  - - 
Russian  Federation -        186.92  82.39 - 
USA - - 265.47 - 
Slovenia -     4,886.90  458.13 9,814.58 
Serbia        51.89           34.882  597.27 - 
Switzerland        99.89      7,138.03  1,403.74 - 
Sweden - - 80.75 - 
United Kingdom -     6,133.22  30.04 1,703.43 
Other 5.68 15.53 - 0.24 
TOTAL 2,456.01 28,013.17 6,075.08 13,967.01 
Source:  The Central Bank of Montenegro statistics of foreign payment operations 
 
Table II. 12. Composition of foreign direct investments in Montenegro  
by countries for January - August 2004 (US$ thousand)  
 Production Services Real estate Financial 
Organizations 
Australia - -  - 
Austria                     -        2,301.28  - - 
Belgium - - - - 
FRY Macedonia - - - - 
Bosnia and Herzegovina - - 63.84 - 
Virgin Islands - -    - - 
Estonia - 145.58 138.54 - 
France - 95.35 - - 
Greece - 31.06 185.79 - 
Netherlands - - - - 
Hong Kong - - - - WT/ACC/CGR/3 
Page 30  
 
  Production Services Real estate Financial 
Organizations 
Croatia  - -    72.85 - 
Ireland -           183.62    
Israel         371.46    
Italy -                      -    - - 
Japan   1,380.18  - - - 
Canada - - 140.65 - 
Cyprus -        230.03  1,571.72 - 
Latvia -     3,468.41  - - 
Lebanon - - - - 
Luxembourg -                      -    - - 
Hungary -     2,507.01  370.05 - 
Germany                    -        3.542,81  346.45 - 
Norway  -                      -    - - 
Panama      1,485.09  123.59  
Russian  Federation -        798.94  - - 
USA      242.20   252.55 69.07 
Slovakia   121.38  
Slovenia        5.12   15,133.77  - 1,301.90 
Serbia       211.91           20.78  38.00 - 
Switzerland                    -        5,450.59  330.90 - 
Sweden  - 13.57 - 
United Kingdom -        135.69  367.18 - 
Lithuania   357.84  
Lesotho           18.20    
Denmark   62.69  
Liechtenstein         241.37    
TOTAL 1,839.41 36,161.02 4,557.60 1,370.971 
Source:  The Central Bank of Montenegro statistics of foreign payment operations 
5.  Information on financial movements relat ed to nationals working abroad, remittances, 
etc. 
No information is available on this subject. 
6.   Information on growth in trade in goo ds and services over recent years and forecasts for 
years to come 
Please see Section II. 3. for details on data a bout foreign trade in goods and services.  
III.  FRAMEWORK FOR MAKING AND ENFORCING POLICIES AFFECTING 
FOREIGN TRADE IN GOODS AND TRADE IN SERVICES 
1.  Powers of executive, legislative and judicial branches of government 
A.  Serbia and Montenegro  
The State Union of Serbia and Montenegro was formed on 14 March 2002 by the mutual consent of 
the two constituent member states:  the Repub lic of Serbia and Republic of Montenegro. 
On 4 February 2003, the Federal Parliament adopted the Constitutional Charter of the State Union 
Serbia and Montenegro (SCG OG No. 1/03).  This is the date of establishment of the State Union 
Serbia and Montenegro, which is the legal succe ssor of the Federal Republic of Yugoslavia.   WT/ACC/CGR/3 
 Page 31 
 
 
 The powers of the State Union, as defined by the Co nstitutional Charter, are much more limited than 
those of the Federal Republic of Yugoslavia.  Th e Union has no responsibility for foreign trade or 
other WTO-relevant matters other than those rela ted to standardization, intellectual property, 
measures and precious metals and statistics (Article  19 of the Constitutional Charter).  The executive 
authority in the Union is further divided between th e President of the Serbia and Montenegro, who is 
also president of the Council of Ministers, which serves as the state union government.   
Economic relations in Serbia and Montenegro ar e based on a market economy that rests on free 
entrepreneurship, competition, liberal foreign trade policies and the protection of property rights. 
The State Union of Serbia and Montenegro is a sing le subject under international law and is a member 
of international, global and regional organizations , the membership of which requires international 
personality.  The member states may become memb ers of international organizations for which 
membership does not require international personality.  
The State Union is responsible for internationa l relations with other states and international 
organizations, and concludes intern ational treaties and agreements. The member states may maintain 
international relations, conclude international agreements and esta blish missions in other states as 
long as this is not contrary to the powers of the State Union or the interests of the other member state. 
Ratified international agreements and generally acce pted rules of international law take precedence 
over the law of Serbia and Montenegro and of the member states, according to Article 16 of the 
Constitutional Charter (Rule on Supremacy of International Law).  
Three years after the establishment of the State Uni on, the member states have the right to hold a 
referendum on withdrawal from the State Union (2006).  If Montenegro withdraws from the State 
Union, Serbia would be considered the successor state to the Federal Republic of Yugoslavia, and 
international documents, particularly United Nations  Security Council Resolution No. 1244, would be 
applied to it.  If both member states were to decl are in favour of independence, all outstanding issues 
would be resolved in the succession procedure, in a same manner as it was with the former Socialist 
Federal Republic of Yugoslavia (Artic le 60 of the Constitutional Charter). 
- Powers of the Executive  
 - The President of Serbia and Montenegro.  
The President of Serbia and Montenegro is the H ead of the State Union.  The competencies of the 
President include: 
- Representing Serbia and Montenegro at home and abroad; 
- Chairing the Council of Ministers and managing its activities; 
- Nominating candidates for the Council of Ministers; 
- Membership in the Supreme Defence Council; 
- Appointing and recalling heads of diplomatic  and consular missions of Serbia and 
Montenegro; 
- Conferring medals and other awards; 
- Promulgating laws and other regulations passed  by the State Union Parliament and the 
Council of Ministers; and 
- Calling elections for the State Union Parliament. 
The President is elected indirectly by the State Un ion Parliament on the proposal of the Chairman and 
Deputy Chairman of the Parliament.  The President of the State Union and th e Chairman of the Union 
Parliament may not be from the same member state.  WT/ACC/CGR/3 
Page 32  
 
 If the Court of Serbia and Montenegro finds that th e President violated the Constitutional Charter, the 
Parliament of Serbia and Montenegro may dismiss him.       
 - The Council of Ministers
 
The Council of Ministers of Serbia and Montenegro  is the main executive pow er at the State Union 
level, and is elected by and responsible to the St ate Union Parliament.  The Council is elected for a 
four-year term.  
The competences of the Council of Ministers include: - Setting and implementing the policy of Serbia  and Montenegro in line with the common 
policy and interests of the member states; 
- Coordination of the work of the Union Ministries; 
- Proposing to the Parliament of Serbia and Montenegro laws and other acts;  
- Appointing and recalling heads of diplomatic  and consular missions of Serbia and 
Montenegro and other officials; and 
- Introducing by-laws necessary for the implementation of laws. 
The Council of Minister consists of  the President of the Council (who is also the President of the State 
Union) and five ministers.  Two of the minister s come from the same member state as the President, 
while the other three of them must be from the othe r member state.  As a rule, both the Minister for 
Foreign Affairs and the Minister for Defence may not be from the same member state.  The same rule 
is applied to their deputies.  
- Powers of the Legislature
 
Legislative power is exercised by the State Union Parliament, which is made up of 91 deputies from 
Serbia and 35 deputies from Montenegro, appointed from the member states parliaments for a four-
year term. The Constitutional Charter prescribes  that two years after the enactment of the 
Constitutional Charter the members of the State Uni on parliament are to be elected directly on 
parliamentary elections organized in the two member  states (political dialogue on adjustment of dates 
for referendum is underway). As a rule, both the President and the Vice President of the State Union 
Parliament may not be from the same member state.   
The competences of the Parliament of Serbia and M ontenegro are in Article 19 of the Constitutional 
Charter.  The Parliament of Serbia and Monten egro is entitled to enact laws and other acts on: 
- Institutions established in acco rdance with the Constitutional Charter and their operation; 
- Implementation of internati onal law and conventions est ablishing the obligation of 
cooperation between Serbia and Mont enegro and international courts; 
- Declarations of war and peace, with prior consent of the member states assemblies; 
- Military and defence matters; 
- Membership of Serbia and Montenegro, as an international legal subject, in international 
organizations, and the rights and obligations  stemming from that membership, with prior 
consent of relevant bodies of the member states; 
- Alterations of the frontiers of Serbia and Monten egro, with prior consent of the assembly of a 
member state on whose territory the border extends; 
- Issues related to standardization, intellectua l property, measurements , precious metals and 
statistics; 
- Policy of immigration and asylum, visa syst em and integrated border management in 
accordance with the standards of the European Union; 
- Ratification of international treaties and agreements of Serbia and Montenegro;  WT/ACC/CGR/3 
 Page 33 
 
 
 - Annual revenue and expenditures necessary for fundi ng of the activities of the State Union, at 
the proposal of relevant bodies of the member states and the Council of Ministers; 
- Prevention and removal of obstacles to the free flow of goods, services, persons and capital 
within Serbia and Montenegro; 
- Election of the President and the Council of Ministers of Serbia and Montenegro; and 
- The flag, anthem and the coat-of-arms of Serbia and Montenegro. 
- Powers of the Judiciary  
The Court of Serbia and Montenegro is composed  of an equal number of judges from each member 
state, who are elected and dismissed by the State Union Parliament upon the nomination of the Council of Ministers for six years term.  Candidat es for judges have to have at least 15 years of 
professional experience and they may not hold any other public office or engage in any other 
professional activity.   
In accordance with Article 46 of the Constitutional Charter and Article 34 of the Law on Court of 
Serbia and Montenegro (SCG OG No. 26/03), the Court of Serbia and Montenegro has jurisdiction to:   
- settle disputes as may arise between instituti ons of Serbia and Montenegro over matters 
related to their competences under the Constitutional Charter; 
- settle disputes as may arise betw een Serbia and Montenegro and one or both member states or 
between the two member states over matters related to their competences; 
- rule on claims of citizens if no other recourse has been provided for in case that the 
institutions of Serbia and Montenegro have vi olated their rights or freedoms guaranteed by 
the Constitutional Charter; 
- rule on whether the constitutions of the member states are in conformity with the 
Constitutional Charter; 
- rule on whether the laws of Serbia and Monten egro are in conformity with the Constitutional 
Charter; 
- rule on whether the laws of the member states are in conformity with the legislation of Serbia 
and Montenegro; and 
- rule on the legality of final administrative acts of the institutions of Serbia and Montenegro. 
The Court of Serbia and Montenegro may abolis h laws, regulations and other legal acts of the 
institutions of the State Union that are contrary to  the Constitutional Charter and the laws of the State 
Union.  The rulings of the Court are final and bi nding and cannot be appealed (Article 48 of the 
Constitutional Charter).  The Court of Serbia and Mo ntenegro within its competencies provides for an 
additional mechanism for maintenance of unified ap plication of international agreements. Moreover, 
transparency and due process provisions have always  been general constitutional principles in both 
member states.  
According to the Article 46 of the Constitutional Charter and Article 34 of the Law on the Court of 
Serbia and Montenegro, the Court may rule on whether:  
- the constitutions of the members states are in conformity with the Constitutional Charter (and 
the rule on supremacy of international la w, including ratified WTO agreements); 
- the laws of the State Union are in conformity with the Constitutional Charter (and the rule on 
supremacy of international law, incl uding ratified WTO agreements); and 
- the laws of the member states are in conformity  with the legislation of the State Union (and 
the rule on supremacy of international law,  including the ratified WTO agreements). WT/ACC/CGR/3 
Page 34  
 
 B.  The Republic of Montenegro
 
Authority in the Republic of Montenegro is divided among: - the President, representing Republic at home and abroad; 
- the Government, which is headed by the Prime Minister and has executive authority; 
- the Assembly, which has constitutional and legislative authority; and 
- the Judiciary (Supreme Court of Montenegro, Ad ministrative Court, Appellate Court, courts 
of general jurisdiction, and commercial courts). 
- Powers of the Executive
 
 - The President of the Republic of Montenegro  
Citizens directly elect the President for a five-year term.  The same person may be elected twice.  The 
Assembly may dismiss the President, in the proce dure initiated by the Assembly itself, provided that 
the Constitutional Court establishes a violation of the Constitution by the President.  
The President nominates the Prime Minister who is elected by the Assembly.  The Assembly will be 
dissolved if it fails to confirm a nomination of Pr ime Minister and Government within 60 days.  The 
Assembly is dissolved by the mere fact that the term  has elapsed.  The President declares this fact by a 
decree. 
The President: - Represents the Republic in the State Union of Serbia and Montenegro and abroad; 
- Calls for parliamentary elections;   
- Nominates the candidates for the pos ts of Prime Minister, and the President and the justices of 
the RM Constitutional Court;  
- Proposes scheduling of referendum to the Assembly; and 
- Promulgates Republic laws by decree within seven days after their enactment by the 
Assembly.  The President may also request that  the Assembly reconsider enacted laws, but a 
law that has been approved twice by the Assembly must be promulgated. 
- The Republic Government
 
The Government consists of the Prime Minister, one or more Vice Prime Ministers and the ministers. 
The Government is elected if the Assembly accepts  the program presented by the nominee for Prime 
Minister.  If the program of the Prime Minister nominee is not accepted, the President nominates a new candidate.  A member of the Government may not be a member of the Assembly, perform any 
other public function, or be professiona lly committed to any other activity.   
The Government: 
- Establishes and carries out internal and foreign policy;  
- Proposes and enforces laws and legal acts; 
- Enacts decrees and other legal acts for enforcement of laws;  
- Concludes international agreements w ithin the competence of the Republic;  
- Proposes the development plan, budget plan and the annual balance sheet; 
- Determines organization and manner of work in the state administration; 
- Rules by decree if the Assembly cannot meet, during a state of war or state of emergency; and  
- Supervises the work of the ministries and other administrative authorities.   WT/ACC/CGR/3 
 Page 35 
 
 
 The resignation of the Prime Minister is considered to be the resignation of the Government. The 
Assembly, on the proposal of the Prime Minister, may dismiss a Member of the Government. 
The Government itself, or at least ten deputies ma y initiate a vote of confidence procedure in the 
Assembly.  The assembly decides by majority vote of  all deputies.  If the motion is accepted, the 
Government must resign.  If the motion is not accep ted, another vote of confidence on the same issue 
may not be taken for 90 days thereafter. 
- Powers of the Legislature  
Deputies are elected directly, with one deputy elected  for every 6,000 voters.  A deputy has immunity 
and may not be called to account for votes or statements  made in the Assembly.   Neither criminal nor 
other charges can be brought against a deputy withou t the approval of the Assembly.  A deputy may 
not be detained without the approval of the A ssembly unless convicted of a crime for which a 
sentence of more than five-year of imprisonment  is designated.  The President of the Republic, 
members of the Government, judges, judges of th e RM Constitutional Court and the state prosecutor 
enjoy the same extent of immunity.  
The assembly elects the president and one or more vice presidents of the Assembly from the ranks of 
deputies for the four-year term.  The President of th e Assembly calls for the presidential election.   
The Assembly: - Enacts the Constitution, laws and legal acts; 
- Elects and dismisses the President and Vice President of the Assembly from within its own 
members; 
- Elects the Prime Minister, ministers, the justices and presidents of the RM Constitutional 
Court, Supreme Court and other courts, the Republic Public Prosecutor and public 
prosecutors, and other officials; 
- Enacts the budget and annual balance sheet; 
- Enacts the area zoning plan of RM; and 
- Ratifies international treaties unde r the competence of the Republic. 
The Assembly sits in regular session twice a year  (in March and October), and in extraordinary 
session at the request of not less than one third of all the deputies or at the request of the President or 
the Prime Minister.   
- Powers of the Judiciary
 
Judicial authority is independent and belongs to  the courts, whereas constitutional and legislative 
protection, in compliance with the RM Constitution,  belongs to the RM Constitutional Court. Laws 
and other general acts and regula tions must be in compliance w ith the Constitution. When the 
Constitutional Court determines that a law or ot her legal act is not in compliance with the 
Constitution, such act or some of its provisi ons cease to be effective on the day when the 
Constitutional Court passes the decision.  
The organization of Courts in Montenegro is as follows: 
- The Supreme Court of Montenegro is the highest court; 
- The Administrative Court rules on legality of administrative acts and on extraordinary legal 
remedies in the offence procedure; 
- The Appellate Court rules in appeal procedure on decisions issued by the Higher Courts in 
first instance and on decisions issued by the Commercial Courts; WT/ACC/CGR/3 
Page 36  
 
 - The Basic Courts and Higher Courts
4 are the courts of general jurisdiction; and 
- The Commercial Courts.   
Montenegro has Judicial Council, consisting of th e President and ten members, five of whom are 
elected by the Assembly.  The President of the Supreme Court is the president of the Judicial Council. The Assembly nominates member of the council as fo llows:  six from the rank of judges, two from the 
rank of Law Faculty professors, and two from the rank of eminent legal experts.  The competences of 
the Judicial Council are to propose nomination or di smissal of judges and assistant judges, to initiate 
procedure for assessment of a judge's responsibility, to determine the number of judges for each court, 
and to submit proposals to the Government, concerning the special division of the budget according to the needs of courts. 
2.  Government entities responsible for making  and implementing policies affecting foreign 
trade  
In accordance with the Constitutional Charter, Monten egro is responsible for its own foreign trade 
policy.  This has been confirmed recently by amendments to the Law on the Action Plan (RM OG 
No. 1/05), which deleted requirements to harmonize tariffs, trade and tax policy between Serbia and 
Montenegro and which were adopted in the Assemb ly of RM 28 December 2004.  At the State Union 
level, the Ministry of Internal Economic Relations  is responsible for enac ting substantive law with 
respect to standardization, measures and precious metals, and intellectual property.  Within that 
Ministry are the Accreditation Body of Serbia and Montenegro, the Institution for Standardization, the 
Bureau for Intellectual Property and the Bureau for Measures and Precious Metals. 
However, the enforcement and administration of laws  enacted at the Union level, including all those 
relevant to WTO, is the responsibility of the member states.  
The Union Minister for International Economic Relations is responsib le for negotiating and 
coordinating the implementation of international trea ties, including treaty relations with the European 
Union and the coordination of re lations with international econom ic and financial institutions, 
following consultations with competent ministers of the member states.  
Under the Constitutional Charter, Montenegro is r esponsible for all WTO-relevant issues except the 
areas noted above that are reserved to the State Un ion. Under Article 81 of  the Constitution of the 
Republic of Montenegro and Article 15 of the Cons titutional Charter, the Parliament of Montenegro 
may ratify international agreements that are not cont rary to the competencies of  the State Union or the 
interests of the other Member State.  
Article 11 of the Constitutional Charter empowers th e State Union to coordinate and harmonize the 
economic systems of the two member states, and Ar ticle 12 of the Constitutional Charter provides for 
establishment of a common market within the State Union.  
In pursuit of these goals, the two member states en acted the Law on Action Plan.  The Action Plan 
deals in detail with harmonization of the economic systems of the member states.  However, as a result of recent amendments, the requirement to harmonize tariff, trade policy and tax policy between 
the two member states has been deleted. Montenegro and Serbia continue to maintain entirely separate 
customs territories and to act independently with respect to tariff and trade policy, as well as sector 
policies and other related economic topics. 
                                                     
 
4 Basic Courts and Higher Courts in RM have the same jurisdiction and organization as the Municipal 
and District courts in RS.  Please s ee further details in section III.6.  WT/ACC/CGR/3 
 Page 37 
 
 
 In order to better coordinate the work of the tw o customs administration, a Customs Commission has 
been established under the Annex 4 of the Action Plan. The Office of Customs Administration of 
Serbia and Customs Administration of Montenegro is concerned principally with coordination and 
control of matters related to the issuance of cer tificates of origin in Serbia and Montenegro. 
In order to fulfil the goals defined in the Acti on Plan regarding simplified customs procedures 
between Serbia and Montenegro, the Government  of Montenegro has passed the Decree on the 
Procedure with Goods and Passengers at the Bo rder Between Montenegro and Serbia (RM OG 
No. 26/03, 81/03) and the Government of Serbia has passed the Decree on the Procedure Governing 
Goods Traffic with the Republic of Montenegro (RS OG No. 130/03).  The two Customs Administrations have also concluded the Agreem ent on Customs Cooperation and Mutual Assistance 
(Annex 3 of the Action Plan) in order to simplify customs formalities and speed up goods traffic. All 
these documents are integrated in the Action Plan as its annexes.  
By developing "twin track" model, the custom polic ies will be conducted at the member states level, 
while the international standards and procedures (E UR1) will be introduced in the area of issuance 
and control of certificates on origin. 
Harmonization of the taxation systems of Serbia and Montenegro was also a goal of the Action Plan, 
and certain measures have been adopted in both states to simplify administration of these taxes with respect to trade between the two states.  However,  Montenegro and Serbia maintain and administer 
separate tax systems, for which each has sole re sponsibility, and there is no current intent to 
harmonize or integrate these systems.  
3.  Division of authority between central and sub-central governments 
With respect to the division of authority between  the State Union and the member states, please see 
Section III.1. 
The Law on Local Self-Government (RM OG No. 42/ 03, 28/04) prescribes competences of the local 
governments which are mainly limited to internal is sues, but in certain aspects may have impact on 
international trade.  Local government is in charge  of drafting development plans; construction land 
usage plans; space and zoning plans; and environmen tal development programs.  Also, the local self-
government provides conditions for utility activ ities to be performed; for development of 
entrepreneurship and for usage of business premises.  It prescribes also conditions for construction of 
buildings and usage of facilities; conditions for liner  transport on its territory; conditions for providing 
taxi transport services.  Local governments c ontrol all these activities through their inspection 
services.        
4.  Legislative programmes or plans to change the regulatory regime 
The Montenegrin legal regime is undergoing transiti on. Modernization of the legal regime is being 
implemented in a number of areas includi ng commercial law, labour, finance, power, 
telecommunications, and the court system. Montenegro has already enacted laws to ensure conformity 
with the WTO agreements in several areas which incl ude:  freedom to engage in international trade; 
customs (including valuation and rules of orig in); anti-dumping, countervailing duty and safeguard 
measures; and public procurement. In addition, plans to enact other laws necessary for the WTO 
accession are well advanced.  At the State Union le vel, five TRIPS-compliant laws governing all 
aspects of intellectual property protection and TBT-co mpliant laws covering t echnical regulations and 
voluntary standards are expected to be enacted in the first quarter of 2005.  Legislation necessary to 
enforce these laws will be enacted  by Montenegro.  Montenegro is also in the process of drafting 
several SPS-compliant laws incorporating vari ous sanitary and phytosanitary measures.   WT/ACC/CGR/3 
Page 38  
 
 All new laws relevant to the WTO agreements will be provided to the Working Party when available.  
5.  Laws and Legal Acts 
The list of laws and legal acts related to trade in goods and services is provided in Annex 2 of 
document WT/ACC/CGR/3/Add.1. 
6.  Description of judicial, arbitral or  administrative tribunals or procedures 
-  General
 
Montenegrin courts are either courts of general jurisdiction or commercial courts.  Proceedings in 
both are similar.  The organization of courts is regulated by the Law on Courts (RM OG No.5/02, 49/04).
5 
The courts of general jurisdiction in Montenegro  include 15 Basic Courts, two Higher Courts, the 
Appellate Court and the Supreme Court of Montenegro .  According to the Law on Courts there is also 
one Administrative Court in Montenegro. 
The Basic Courts' jurisdiction is limited to the te rritory of one or several municipalities.  Their 
primary jurisdiction is civil law cases involving natural persons and not arising from commercial 
activity.  In some instances, legal persons may also  fall within the jurisdiction of these courts if the 
dispute does not arise from commercial activity.  Basic Courts are also the courts of first instance in 
certain criminal cases (for criminal offences pena lized with the imprisonment up to ten years). 
The Higher Courts have original jurisdiction over cases involving infringement of intellectual 
property rights (where at least one party is a natu ral person) and in some criminal cases (penalized 
with the ten and more years of imprisonment).  They  are also courts of appellate jurisdiction with 
respect to decisions of the Basic Courts under their jurisdiction.  
The Commercial Courts have original jurisdicti on over disputes arising from commercial activity, 
including those arising from commercial aspects of inte llectual property.  Their jurisdiction extends to 
both legal and natural persons e ngaged in commercial activities.  There are two Commercial Courts, 
whose jurisdiction, under the Law on Courts, is limited to a designated territory.   
The Appellate Court of Montenegro is the court of  appellate jurisdiction ove r the higher courts acting 
as courts of first instance, and over the commercial courts. 
The Administrative Court of Montenegro is the cour t of appellate jurisdiction for all administrative 
decisions.  It decides also upon extraordinar y legal remedies in the offence procedure. 
The Supreme Court of Montenegro has appellate juri sdiction only.  It decides as the third instance 
authority in certain cases.  The decisions of a Higher Court, acting as a court of first instance, may be appealed to the Supreme Court of Montenegro.  U nder certain circumstances, an extraordinary legal 
remedy, known as a "revision," in a case heard first in a Basic Court or Commercial Court and 
subsequently appealed to a Higher Court or the S upreme Court of Montenegro, may be filed in the 
Supreme Court of Montenegro. 
Military courts were abolished by the Constituti onal Charter and their cases are now heard by the 
courts of general jurisdiction in Montenegro.  
                                                     
 
5 Official Gazette of the Repub lic of Montenegro, edition/year.  WT/ACC/CGR/3 
 Page 39 
 
 
 -  Judicial Procedures  
Foreign legal and natural persons, re gardless of nationality, may pursue claims in the court system of 
Montenegro in the same way and to the same extent as domestic persons. 
Depending of the size (value of the claim) of the di spute, a case may be decided by a single judge or 
by a panel of one judge and two jurors.  The parties to a contract may agree that any court 
(commercial or of general jurisdic tion depending on the situation) in the territory of Montenegro will 
settle disputes.  In the absence of such an agreemen t, the jurisdiction will be determined according to 
the residence of the defendant. 
The parties may agree to settle a dispute at any time pr ior to the court's decision.  In such an event, the 
court will record the terms of the settlement and dism iss the case.  Such a se ttlement has the force of 
the court's judgment, and can be enforced accordingly. 
When initiating an action, the plaintiff must show grounds for the claim.  After a procedure in which 
both plaintiff and defendant present their evidence and the representatives of both parties are heard, 
the Court concludes the proceedings.  The Court w ill render the judgment in writing, mailing its copy 
to each of the parties involved.  The Law on Ci vil Procedures (RM OG No. 22/04) prescribes that the 
verdict of the Court should be  written and sent to the parties within 30 days from the day the 
proceedings were concluded.  As a date of reaching a verdict it is usually considered the day when the 
verdict is rendered in writing.  
The filing of an appeal suspends a judgment until the appeal is considered and decided.   A panel of 
three judges reviews the case, without hearings, deciding the appeal upon the evidence in the case 
files.  
The appellate court may either confirm the judgment,  in which case it becomes final and enforceable, 
or annul the judgment and order the court of fi rst instance to hear the case again under stated 
conditions.  The appellate court may also decide th e case itself, but in practice this does not happen 
often. In such a case the decision of the appellate court is final.  
In certain limited circumstances, an appeal for revi sion as an extraordinary legal remedy may be filed 
with the Supreme Court of the Republic.  If a revision is granted, the Supreme Court may annul part 
of or the entire judgments of the courts of firs t and second instance.  In such a case, the Supreme 
Court may decide the case itself, making the judgment final or annul all previous judgments and order 
the court of first instance to hear the case again.  Th e effect is to set aside all previous proceedings and 
so the case starts again from the beginning. 
The Law on Civil Procedures regulates the proceedings before the court.  If at least one party is a 
foreign person and the contract between the parti es so stipulates, foreign substantive law may be 
applied in proceedings befo re the Commercial Court. 
-  Arbitral Procedures  
The parties to a contract may agree that disputes will be settled by arbitration, and may choose any 
arbitral tribunal, including foreign ones. 
The Chamber of Commerce of Montenegro take over the responsibilities of the Former Yugoslav 
Chamber of Commerce and Industry in area of the foreign trade arbitration. Since the Montenegrin 
Chamber of Commerce is not capable at the moment for such activity, it reach ed agreement with the 
Chamber of Commerce of the Republic of Serbia to perform such procedures for them, when needed.  
The Serbian Chamber of Commerce applies old ru les of the former Foreign Trade Court of WT/ACC/CGR/3 
Page 40  
 
 Arbitration of the Yugoslav Chamber of Commerce.   Generally, if both parties are Montenegrin 
entities, and where the parties have so agreed, the Court Of Arbitration at the Serbian Chamber of 
Commerce, will hear the case.  Although parties may choose any other arbitral tribunal, it does not happen often and most disputes are se ttled before commercial courts.   
The parties may agree that the arbitration will be conducted under the UNCITRAL Rules; in the 
absence of such an agreement, the Rules of the Foreign Trade Court of Arbitration shall apply.  If the 
Rules do not contain a relevant provision, the provisions of the Law of Civil Procedures shall apply if they are in conformity with the competencies and principles of the arbitral proceedings.  
Under its rules, the Foreign Trade Court of Arbitra tion will apply substantive law as stipulated by the 
parties.  In the absence of such a stipulation, the C ourt of Arbitration will apply laws and rules that it 
deems to be the most appropriate choice of law. 
The arbitrators must in all cases make the award in c onformity with the provisions of the contract, and 
must consider trade usages that may be applicable  to the transaction.  The award may be made 
ex aequo et bono only if the parties have so agreed. 
The arbitrators may be domestic or foreign nationa ls, selected from a Panel of Arbitrators drawn up 
by the Assembly of the Chamber of Commerce and Industry.  A dispute will be settled by a sole 
arbitrator when the parties have so agreed or, in the absence of an agreement, when the sum in dispute 
is below US$70,000.  In all other cases, and especial ly when the parties have so agreed, the arbitral 
tribunal will consist of three members. 
Hearings are held in the seat of the Arbitration, but upon the request of the parties may be held at 
another location.  Arbitral proceedings are normally  conducted in Serbian, but parties may agree that 
proceedings are to be conducted in another language, provided that the additional costs are paid.  
If the parties reach a settlement before arbitrators ma ke a decision, the settlement will be recorded in 
the form of an arbitral award, without reasons.  Such  a settlement has the force of an arbitral award.  
The Law on Enforcement (RM OG No. 23/04) regulates the enforcement of an award of the foreign 
court not specifying whether the regular court or arb itral award.  The enforcement of a foreign court 
award, recognized in accordance with international ag reement or national law, may be ordered in the 
same manner as the enforcement of an award of  the national court or arbitral tribunal.  
 -  Administrative Procedures
 
The Law on Administrative Procedures (RM OG No. 60/03) and the Law on Administrative Disputes 
(RM OG No. 60/03) regulate the settlement of disput es over the decision of a governmental office or 
official.   
An administrative decision must be appealed first to  a higher rank official of the office concerned.  If 
the original decision is confirmed, the dissatisfied party may challenge the decision in an appeal to a 
court.  The competent court in Montenegro is the Administrative Court.  
In case of a decision of a State Union agency, the competent court of appellate jurisdiction is the 
Court of Serbia and Montenegro.  A panel of thr ee judges will decide the case without hearings. The 
court may rule on "request for assessment of the le gality of the administrative act" for second instance 
administrative decision, first instance decisions that may not be appealed in the administrative 
procedure and in cases when the competent auth ority didn't take action in the administrative 
procedure within the prescribed period of time ("si lence of administration").  The decision of the 
Court is final and is binding on the agency making the original decision.  WT/ACC/CGR/3 
 Page 41 
 
 
 IV.  POLICIES AFFECTING TRADE IN GOODS 
1.  Import Regulation  (a)  Registration requirements for engaging in importing 
The Foreign Trade Law (RM OG No. 28/04) prescrib es that all persons may conduct foreign trade 
activities in accordance with their legal and commercial capacities, and in accordance with relevant 
legislation regulating commercial activities.  Acco rding to Article 11 of the Foreign Trade Law, any 
person may import or export goods subject to their st atus under relevant legislation.  Therefore, any 
person may import or export following items (list is not exclusive): 
- goods intended for sale, inward or outward pro cessing, or any other commercial transaction, 
subject to legislation that regulates commercial activities; 
- goods intended for own use of legal en tities, personal or family use; and 
- goods necessary to perform professional activities (entrepreneurs, farmers and natural persons 
conducting professional activities or providing services). 
In order to be engaged in foreign trade, a firm mu st be registered at the Central Register of the 
Commercial Court, must obtain the "statistical" number from the Montenegrin Bureau of Statistics, 
and register with the customs payers register in order to obtain customs number.  The registration 
process is automatic, subject to submission of application.  The Customs Administration imposes no additional requirements with regard to registration of firms intending to engage in import or export.  
The company registration process has been signifi cantly simplified by the Law on Business Entities 
(RM OG No. 6/02), which has helped Montenegro to become a leading country in the region.  The 
Law on Business Entities prescribes that a business entit y will be deemed registered unless the Central 
Register of Commercial Court, which is in ch arge for registration, rejects the registration 
documentation within four days.  Minimal capita l for establishment of a joint-stock company is 
€25,000 while for the limited liability companies the amount is €1.  The fees for registration paid to 
the Central Register are €50 for joint stock compan ies and €10 for entrepreneurship, partnership, 
limited liability company and limited partnership.  For registration of notification on registration 
continuation, a €1 fee is to be paid, and, in case of registration expiry, a fee of €100 is to be paid for 
registration of notification.  
According to the Law on Production and Circulation of Narcotics (FRY OG No. 46/96, 37/02), in 
order to be engaged in import and export of psychotropic substa nces, legal entities have to be 
registered for the production and circulation of psyc hotropic substances.  Legal entities registered for 
wholesale production of medicines may import and export medicines containing psychotropic 
substances. 
The Law on Production and Circulation of Poisono us Substances (FRY OG 15/95, 28/96, 37/02), 
prescribes that legal entities and entrepreneurs must regi ster with the Ministry of Health in order to 
import, export, sell or store poisonous substances.  
The Law on Medicines (RM OG No. 80/04) prescribes that only legal persons with a seat at the 
territory of Montenegro, which have licence issued by the responsible administrative authority may be 
involved in circulation of medicines. Circulation in the scope of this Law, includes import and export.  
Carriers of poisonous substances must register with the Ministry of Transportation. The Law on Plant Protection (FRY OG No. 24/98, 26/98) prescribes that only legal persons may 
import pesticides.  WT/ACC/CGR/3 
Page 42  
 
 The Law on Tobacco (RM OG No. 80/04) prescribes that  importers, exporters and entities engaged in 
transit of tobacco and tobacco products have to be  registered within the administrative authority 
competent for tobacco.  
(b)  Characteristics of national tariff  
The customs tariffs of Serbia and Montenegro ha ve been largely harmonized between the member 
states, and 93 per cent of harmonized tariff rate s are applied as of 15 August 2003.  Montenegro 
passed the Decree on Customs Tariff (RM OG No. 47/03) in which harmonized rates are applied.  The 
remaining harmonized tariff rates will be applied after 18 months or 24 months from the date the 
Action Plan entered into force.   
Customs tariffs for 56 tariff lines of agricultu ral products designated as strategic goods for 
Montenegro are initially planned to be harmonized w ithin three years from the date of the adoption of 
the Law on the Action Plan. This period may be extended for an additional two years.  
However, recent amendments to the Law on the Action Plan deleted re quirements to harmonize 
tariffs, trade and tax policy between Serbia and Montenegro. It is not clear at this point whether the 
harmonized tariff regime will be maintained.. 
Montenegrin tariff nomenclature is based on the Harmonized System (HS) 96 at the moment. There 
are 8,554 tariff lines at the 10-digit level. All rates are ad valorem  ranging from 0 per cent to 
30 per cent.  There are 13 ad valorem  tariff brackets (please see Table IV.1).   
Table IV.1 – Breakdown of Imports by Tariff Rates
 
Customs Duty Rate Number of Tariff Lines Percentage of Total 
0 % 175 2.04  
1 % 3,253 38.02  
3 % 684 7.99  
5 % 1,555 18.17  
7 % 85 0.99  
8 % 289 3.37  
10 % 1,317 15.39  
12 % 17 0.19  
15 % 288 3.36  
18 % 246 2.87  
20 % 242 2.82  
22 % 224 2.61  
25 % 41 0.47  
30 % 138 1.61  
Total 8,554 100  
 
The Ministry of Finance of the Republic of Monten egro in cooperation with EU (CAFAO) has started 
work on a new customs tariff nomenclature based on HS 2004.  It is expected that the new Law will 
enter the Parliament in early 2005. 
(c)  Tariff quotas, tariff exemptions  
The Republic of Montenegro does not apply any tariff rate quotas except those provided under Free 
Trade Agreements.  Please see Section VII for deta ils on tariff quotas applied under the FTA's.   
Article 184 of the Customs Law (RM OG No.7/02,  38/02, 72/02, 21/03, 31/03), which became 
effective 1 April 2003, provides for exemption from import duties:  WT/ACC/CGR/3 
 Page 43 
 
 
 - For goods specified by an international ag reement that is binding on the Republic of 
Montenegro;  
- For goods of non-commercial nature that are brought  in by travellers from abroad and are of 
prescribed kind, value and quantity; 
- For goods forwarded by natural persons from abro ad to natural persons in the Republic of 
Montenegro free of charge, provided that these c onsignments are not of a commercial nature 
and comply to the prescribed type, quantity and value; 
- For medals and awards obtained at the interna tional events, and presents received in respect 
of international relations;  
- For goods satisfying basic human necessities, su ch as food, medications, clothes, bed linen, 
toiletries and similar, which are imported by registered humanitarian organizations for 
distribution free of charge to endangered categor ies of people and victims of natural and other 
catastrophes;  
- For humanitarian organizations, associations of blind and deaf or hearing-impaired persons, 
persons suffering from muscular or neuromuscu lar disorders and their members importing 
specific equipment, devices and instruments, spar e parts and disposable material for the needs 
of those persons; and 
- For trademarks, patents, designs, and supporti ng documents, application forms for patent 
registration or innovations which are sent to organizations in charge for copyright and 
industrial rights protection; 
- For the following items:   
- application forms and documents which are received by the state authorities for the 
purpose of performing activities for which they are competent;  
- items representing evidence in court or othe r proceedings before state authorities;  
- printed material released within the framewo rk of standard exchange of information 
between public services or bank institutions; 
- securities;  
- designs, technical drawings, models, descripti ons and other similar documents which are 
imported for the purpose of complying with the conditions for participation at international contests organized in the country; 
- printed forms which are, in accordance with international agreements, used as official 
documents in international trade; and 
- letter mail. 
- For agricultural products, products of crop cultiv ation, livestock breeding, forestry, fish 
breeding, and apiculture obtained from private holdings that the citizens of the Republic of 
Montenegro, situated in the frontier strip, possess in the frontier strip of the neighbouring 
country, as well as for offspring and other pr oducts obtained from livestock bred at these 
holdings for the reason of field works, grazing or wintering;  
- For fire-prevention and fire-fighting equipment; 
- For items which domestic or foreign citizens w ith permanent residence in the Republic of 
Montenegro have inherited in a foreign country;   
- For goods used for reconstruction, maintena nce and restoration of protected cultural 
monuments, subject to opinion of the competent authority; 
- For goods directly used for museum, archival, r estoration, literary, art, musical and stage, and 
film activities, subject to the opinion of the competent authority; 
- For goods donated to cultural ins titutions and other non-profit persons in the field of culture, 
freelance artists or artists for performance of their activities, subject to the opinion of the 
competent authority;  
- For goods which are brought in from abroad by scientists, writers and artists as their own 
works;  WT/ACC/CGR/3 
Page 44  
 
 - For goods which are brought in as an investme nt by a foreign party in accordance with a 
relevant law; and 
- For equipment imported by state authorities fo r their activities that is not produced in 
Montenegro. 
In accordance with Article 185 of the Customs La w, domestic goods having been exported from the 
customs territory, and returned to the customs territory within a period of two years and placed in 
circulation are exempted from customs duties at the request of the declaration submitter. 
Article 188 of the Customs Law prescribes exemption from import duties for the products of sea-
fishing and other products taken from the sea outside the territorial waters of Montenegro, and their 
derivative products, by vessels registered or r ecorded in Montenegro and sailing under its flag. 
Procedures for claiming customs duty exemptions are prescribed in the Decree on Procedure for 
Realization of Rights on Customs Duty Exemption (RM OG No. 22/03). 
The Free Zones Law (RM OG No. 42/04) provides exem ption from customs duties, customs charges, 
and the value added tax for goods entered into a fr ee zone or free warehouse and consumed or used in 
accordance therein, including goods imported by the ope rator or the user of the free zone or the free 
warehouse and intended for construc tion and maintenance of facilities, infrastructure and equipment 
in the zone or warehouse, and, generally, for creation of the conditions  for functioning and 
development of the zone and the warehouse.  Such  goods may remain in the zone or the warehouse 
indefinitely.  
The Decision on Seasonal Customs Duties on Import of Certain Agricultural Products (RM OG 
No. 38/00) imposes additional customs duties on seasonal goods in Montenegro.  This Decision 
prescribes seasonal customs duties for agricultural pr oducts in addition to usual customs duties, in 
amounts not exceeding 20 per cent of the customs value of the goods and within limited time periods.  
Although Montenegro intends to keep seasonal custom s duties with respect to a limited number of 
products, these duties will be applied within the frame work of tariff bindings arising in the course of 
negotiations in the WTO accession process.  
Please see Section IV. 4. a) for details on seasonal duties.  
(d)  Other duties and charges, speci fying charges for services rendered 
The Law on Administrative Fees (RM OG No. 55/03, 46/04) is the main law that sets fees applied at 
the Republic level.  Table A10.1 in Annex 10 of document WT/ACC/CGR/3/Add.1 summarizes 
trade-related fees provided in this law. These include fees for import and export licenses; acts and 
certificates connected with veterinary, sanitary, an d phytosanitary inspections; and customs forms, 
declaration, control, classification, complaints, and act s.  All trade-related fees in this law are fixed 
value.   
Article 291 of the Customs Law of Montenegro (RM OG No. 07/02, 38/02, 72/02, 21/03) provides 
that the Customs Administration shall charge a fee for customs procedures, which may be a 
percentage of the customs value ( ad valorem ) or a fixed amount.  These fees and the procedures for 
their collection are prescribed in the Decree on Amount and Procedure of Charging of Fees for 
Services Rendered by the Customs Authorities (R M OG No. 20/03, 62/04).  Fees may range between 
0 per cent and 1 per cent of the customs value or  from €3 to €120 in fixed amounts depending on the 
procedure.   WT/ACC/CGR/3 
 Page 45 
 
 
 The Customs Service charges as follo ws for the following procedures:  
- temporary storage of goods and customs storage – €20 per declaration; 
- issuing of information on classifying goods acco rding to the Customs Tariff – €120 or €100 
depending on the necessary testing of goods (a dditional testing costs may be imposed on the 
applicant); and 
- issuing information on origin of goods – €50. 
According to the Decision on the Level and Method of Paying Fees Covering Costs of Quality 
Control of Agriculture and Food Products and Produc ts Made Thereof Destined for Export or Import 
(FRY OG No. 62/97 and 55/98), there is a €4.60 fee for shipments of up to 20 tons and €0.30 for every additional ton for quality control of agricu ltural and food products that are exported or 
imported. 
Montenegrin Chamber of Commerce issues certificate of origin, Form A, for which a fee of €8 is 
prescribed. 
The Decree on Special Charge on Importation of Agricultural and Food Products (RM OG No. 61/03, 
63/03) authorizes special charges on the import of ag ricultural and food products for the purpose of 
protecting production of agricultural and food produc ts and ensuring stability of the market taking 
into account prices.  The Decree on Special Charge on Importation of Agricultural and Food Products 
lists around 130 agricultural and food products that are subject to specific charges (Euro/kg, Euro/litre, or Euro/piece). The Decree on Special  Charges includes 124 tariff positions.  Please see 
Annex 10 of document WT/ACC/CGR/3/Add.1 for th e list of products subject to these special 
charges. 
According to the Decree on Fee Charged for Health  Inspection of Plant Shipments and Control of 
Pesticides and Fertilizers in Traffic Through th e Territory of FRY (FRY OG No. 71/00), fee is 
charged depending on the manner of deliver y, quantity and sort of shipment.  
According to the Decree on Fee Charged for Veterina ry – Sanitary Control of Animals, Products, Raw 
Materials and Waste of Animal Origin in Produc tion and Traffic (RM OG No. 51/03), fee is charged 
in percentages, on the basis of purchase price a nd selling price from the bill of lading or invoice, 
ranging from 0.06 per cent to 1 per cent. 
(e)  Quantitative import restrictions includi ng prohibitions, quotas and licensing systems 
- Import Prohibitions
 
In April 2004, the Government of the Republic  of Montenegro passed the Foreign Trade Law 
(RM OG No. 28/04), which is fully compliant with WTO rules. Under this Law, goods may not be 
imported if trade in such goods is banned in Monteneg ro (Article 14).  The Government may also ban 
imports, temporary imports or transit of goods if  circulation of such goods is banned under the 
legislation of the country of export, of origin, or of destination of such goods.  
The Decision on the Control List for Export and Import of Goods (RM OG No.44/04) of 
17 June 2004, contains the list of dangerous w aste (Annex 5), which may not be imported into 
Montenegro.  
Also, import of animals, plants, animal and plant products and other goods th at may carry or transmit 
pests and disease that may endanger the health of  humans and animals, may be prohibited from 
specific countries or territori es thereof based on internationa l recommendations and guidelines, 
available scientific evidence and the animal and plan t health status of such countries or territories WT/ACC/CGR/3 
Page 46  
 
 relative to that of Montenegro. Any such restricti ons will be applied consistently with the Agreement 
on Sanitary and Phytosanitary Measures. 
- Import Quotas
 
According to the provisions of Article 15 of th e Foreign Trade Law, the Government may impose 
quantitative restrictions on imports only in the form  of safeguard measures.  The rules on safeguards 
are contained in Articles 44-50 of the Foreign Tr ade Law and in Articles 38-42 of the Decree on 
Implementation of the Foreign Trade Law (RM OG No . 52/04) and are consistent with the Agreement 
on Safeguards.  Please see Section IV.1.(o) 
- Import Licensing  
The Government may, based on the Foreign Trade La w, require licenses for the import or transit of 
certain goods, based on objective and rational criteria,  conditions and procedures.  The Government 
may require import or transit licenses only when it is necessary to: 
- protect human, animal or plant life or health; 
- protect national security; 
- protect environment or exhaustible natural resources; 
- protect public morals; 
- protect intellectually property right; and 
- enforce any special rules related to gold and silver. 
The Decision on Control List for Export and Import of Goods  defines the competent bodies for the 
issuance of licenses and approvals for goods liste d in the Control List and its Annexes.  
The integral parts of this Decision are:  
- The Control list for export and import (Annex 1); 
- The List of narcotics and psychotropic substances (Annex 2); 
- The List of precursors (Annex 3); 
- The List of substances damaging the ozone layer (Annex 4); 
- The List of dangerous waste (Annex 5); and  
- The List of endangered wild plant and animal species – CITES (Annex 6). 
Please see the detailed list (HS code an d description) in Annex 11 of document 
WT/ACC/CGR/3/Add.1. 
(f)  Import licensing procedures  
The Ministry for International Economic Relations  and European Integration is responsible for 
foreign trade in Montenegro, and for deciding upon applications for import, transit or export licenses, 
except that: 
- The Ministry of Agriculture, Forestry and Water Supply decides upon applications for 
licenses for the import of animals, plant and animal products and other goods that may carry or transmit pests, animal disease or zoonozes to plants, animals and humans; 
- The Ministry of Culture decides upon applications  for licenses for the export of artefacts of 
artistic, cultural, historical and archaeological value; 
- The Ministry for Environmental Protection and Urban Planning decides upon applications for 
licenses for import of hazardous waste, as we ll and rare plant and animal species; and  WT/ACC/CGR/3 
 Page 47 
 
 
 - The Ministry of Health decides upon applicati ons for licenses for the import of medicines, 
medical devices and other goods that may be used for medicinal purposes. 
Applicants submit applications for licenses to the re levant Ministry in written form.  An application 
for a licence may not be refused for procedural doc umentation errors that do not alter the basic data 
contained therein.  A decision on refusal of a licence must be provided to the applicant in writing with 
the rationale for such decision.   
The period for processing applications for import licen ses may not exceed 15 days if applications are 
considered as and when received, i.e. on a first-co me first-served basis.  However, the period may not 
exceed 30 days when all applications are considered  simultaneously, where such  period begins to run 
on the day following the closing date of the announced application period. 
Licenses are issued for one or more types of goods .  In the case of agricultural goods or other goods 
that may carry a pest or disease th at can cause significant harm to th e health or life of plants or 
animals in Montenegro, the licence is issued for a single type of goods; in case of artistic, cultural, 
historical and archaeological artefacts the licence is issued for each particular article or a single 
licence is issued for more articles if they constitute one consignment.  
Licenses are valid for a specified period up to a maximum period of one year.  The number of 
shipments during such period is not limited. 
(g) Other border measures 
The Decision on Control List for Export and Import of Goods (RM OG No. 44/04) classifies goods 
upon modes of import or export.  Beside import or export licenses, there are goods subjected to import or export approvals, regardless whether they are alre ady on licenses regime or on liberal foreign trade 
regime.  Approvals are issued by either the Mini stry of Environment Protection and Urban Planning 
(LB5 or D5), the Ministry of Health (LB1 or D1), the Ministry of Culture (LB6 or D6) or the Ministry 
for Agriculture, Forestry and Water Supply (also LB1 or D1), depending on the type of good.  Also, the Control List prescribes possibility for import or export of certain goods to be:  
- subjected to issuance of metrology certifi cate by the organization authorized by the 
Government of Montenegro (LB2 or D2);  
- subjected to issuance of conformity assessme nt by the organization authorized by the 
Government of Montenegro (LB3 or D3); and 
- subjected to issuance of conformity assessmen t with the Standardization Law (FRY OG 
No. 30/96, 59/98, 70/01, 8/03) by the organization authorized by the Government of Montenegro (LB4 or D4)    
Please see Annex 11 of document WT/ACC/CGR/ 3/Add.1 for a detailed list (HS code and 
description). 
In addition, in accordance with Article 64 of the Law on Plant Protection (FRY OG No. 24/98, 26/98) 
the Ministry for Agriculture, Forestry and Wate r Supply issues import approvals for pesticides and 
fertilizers, active (chemical) subs tances and semi-finished con centrates for the production of 
pesticides and fertilizers.  
Trade in genetically modified organisms, wild sp ecies of flora and fauna and biotechnologies require 
a permit from the Ministry for Agriculture, Forestry  and Water Supply, or the Ministry for Urban 
Planning and Environment Protection. WT/ACC/CGR/3 
Page 48  
 
 (h)  Customs valuation 
All customs duties in the Republic of Montenegro are ad valorem .  Customs valuation is compliant 
with the WTO Customs Valuation Agreement. Please  see Annex 4 for details.  The customs valuation 
rules are currently articulated in  the following legal documents: 
- The Customs Law (primarily Articles 29-45); and 
- The Law on Ratification of the Agreement on Im plementation of Article VII of GATT and its 
associated Protocol (FRY OG 1/82 –international agreements). 
(i)  Other customs formalities 
The following documents are required for customs im port processing:  declaration, invoice, Bill of 
Lading, certificates (fact, force majeure, end user), and, where required, other certificates (origin, 
conformity, veterinary, health, quality,  phytosanitary), approvals, and licenses. 
(j)  Pre-shipment inspection 
Pre-shipment inspection is not required in Montenegro. 
(k)  Application of internal taxes on imports 
Montenegro applies the Law on Excise Tax (RM OG No. 65/01, 12/02) of 28 December 2001.  This 
Law applies excise tax equally on both, domestically produced and imported goods.  
Excise taxes on domestic products are collected by the tax authorities; excise taxes on imports are 
collected by the customs authorities together w ith import duties.  Excise taxes on domestic goods 
become payable when the goods are release into free circulation.  
In general, excise taxes are not collected on goods  that are exported.  However, under the Law on 
Excise Tax, excise taxes are collected on goods sold to Serbia (which does not collect excise on such 
goods), and are not collected on goods imported from Serb ia except to the extent that the excise tax 
otherwise due in Montenegro is greater th an the excise already paid in Serbia.   
The following categories are subject to excise taxes: 
- Alcohol and alcoholic beverages; 
- Tobacco products; and 
- Mineral oils, mineral oils de rivatives and their substitutes. 
1.  Alcohol and alcoholic beverages
 
Alcohol and alcoholic beverages are subject to exci se tax on the basis of the classification of these 
products by HS tariff numbers and their alcoholic content. 
The following categories of alcohol are subject to excise taxes:  a.  Beer
 
Beer is defined as any product falling within HS co de 2203 or any product containing a mixture of 
beer and non-alcoholic drinks falling within HS code  2206, in either case with the content of alcohol 
exceeding 0.5 per cent vol.  WT/ACC/CGR/3 
 Page 49 
 
 
  b. Wines  
Wines can be divides in two categori es: table wines and sparkling wines. 
Table wines are all products falling within HS tariff number 22.04 and 22.05, (except sparkling 
wines): 
- with alcoholic content greater than 1.2 per cen t but not more than 15 per cent, provided that 
the entire content of alcohol derives only from fermentation; and 
- with alcoholic content greater than 15 per cent  but not more than 18 per cent, provided that 
the entire content of alcohol derives onl y from fermentation, without enrichment. 
Sparkling wines are all products falling within tariff numbers HS 2204.10.11.00, 2204.10.19.00, 
2204.10.90.00 and tariff number HS 2205 that are: 
- contained in bottles with "mushroom stoppers" held in place by ties or fastenings, or that have 
an excess pressure due to carbon dioxide in solution of three bar or more; and 
- that have an alcoholic content  greater than 1.2 per cent but not more than 15 per cent, 
provided that the entire content of al cohol derives only from fermentation  
c.  Other fermented beverages, except for wines and beers  
Other fermented beverages are products falling within HS numb er 2204 and 2205 that are not 
classified as wines and products falling within HS number 2206 that are not classified as beers, provided that they: 
- have an alcoholic content greater than 1.2 per cent but not more than 10 per cent; or 
- have an alcoholic content greater than 10 per cen t but not more than 15 per cent, provided that  
the entire content of alcohol is derived by fermentation. 
d. Light alcoholic beverages
 
Light alcoholic beverages are all products falling within HS number 2204, 2205 and 2206 with an 
alcoholic content, that exceeds 1.2 pe r cent but does not exceed 22 per cent. 
 e. Ethyl alcohol  
Ethyl alcohol includes: 
- all products falling within HS number 2207 and 2208 with an alcoholic content that exceeds 
1.2 per cent regardless of whether such produc ts are ingredients of a product which falls 
within another tariff number; 
- all products falling within HS numbers 2204, 2205 and 2206 with an alcoholic content that 
exceeds 22 per cent; and 
- other alcoholic drinks containing ethyl alcohol whether dissolved or not that that are not 
classified as specific types of alcohol beverages. 
The excise tax base for wines, light alcoholic bevera ges and other fermented beverages is the quantity 
the goods measured in hectolitres.  The excise tax ba se for beer and ethyl alcohol is alcohol capacity 
(cubage) per hectolitre. 
Excise tax is paid on alcohol and alcoho lic beverages at the following rates: WT/ACC/CGR/3 
Page 50  
 
 - €1.90 per cubage of alcohol content in one hectolitre of beer; 
- €0.00 per hectolitre of table wine; 
- €35 per hectolitre of sparkling wine; 
- €40 per hectolitre of other fermented beverages; 
- €70 per hectolitre of light alcohol beverages; and 
- €550 per hectolitre of pure alcohol. 
Exemptions: Ethyl alcohol in HS number 2207 is exempt from excise tax if used as a raw material for: - the production of fermented products; 
- the production of vinegar in HS number 2209; 
- the production of food items subject to condition that the alcohol content in chocolate goods 
from HS number 1806 of the customs tariff does not exceed 8.5 litres of pure alcohol per 100 kilograms of goods, or for other food items, 5 litres of pure alcohol per 100 kilograms of 
goods; or 
- the production of chemical and cosmetics products. 
Ethyl alcohol may be dispatched from an exci se goods warehouse for use in the chemical and 
cosmetics industries only if such alcohol is denatured. 
Ethyl alcohol for medical purposes is exempt from exci se tax if procured by institutions in the health 
sector, which are issued a licence for th is purpose by the tax authorities.  
A small producer of alcoholic beverages solely fo r personal use is exempt from excise tax on such 
products.   
2. Tobacco products
 
Tobacco products subject to excise tax are cigarettes,  cigars and cigarillos, finely shredded tobacco 
(for rolling cigarettes) and other smoking tobacco. 
The excise tax for cigarettes is a combination of a specific tax per 1,000 pieces and a percentage of 
the retail price of cigarettes, provided that the total amount of the excise tax may not exceed 
57 per cent of the retail price of the cigarettes.  
The excise tax on other tobacco products is: - Cigars and cigarillos:  €10.00 per kg; 
- Finely shredded tobacco (for rollin g cigarettes):  €20.00 per kg; and 
- Other smoking tobacco:  €15.00 per kg. 
3. Mineral oils, mineral oils derivatives and their substitutes 
 
Mineral oils, their derivatives and substitu tes are subject to excise tax as follows: 
Petrol and other light oils: - €0.120 per kilogram of airplane petrol (HS number 2710.00.11.10); 
- €0.364 per litre of motor petrol unleaded (HS number 2710.00.11.20); 
- €0.120 per kilogram of fuel for jet engines of petrol type (HS number 2710.00.11.30); and 
- €0.364 per litre of other motor petrol (HS number 2710.00.11.90).  WT/ACC/CGR/3 
 Page 51 
 
 
 Kerosene: 
- €0.120 per kilogram of petroleum (kerosen e) for engines (HS number 2710.00.21.10); 
- €0.120 per kilogram of fuel for jet engines of petroleum (kerosene) type (HS number 
2710.00.21.20); 
- €0.120 per kilogram of other kerosene (HS number 2710.00.21.90); and 
- €0.069 per kilogram of fuel for jet engines of petroleum type (HS number 27.10.00.21.20) 
used as heating fuel. 
Gas oils: - €0.270 per litre of diesel fuels (HS number 2710.00.31.00); 
- €0.120 per litre of diesel fuels ( HS num ber 2710.00.31.00) used as heating fuel; 
- €0.270 per litre of ship fuel and othe r fuel (HS number 2710.00.32.00) and  
- €0.120 per litre of other oils (HS number 2710.00.39.00). 
Heating oils: - €0.023 per kilogram of low-sulphured oil for metallurgy (HS number  2710.00.41.00); and 
- €0.023 per kilogram of other heating oils (tariff number CN 2710.00.49.00). 
Oil gases and other gas hydrocarbons: 
- €0.069 per kilogram of mixture of propan e and butane (HS number 2711.19 00.10); and 
- €0.069 per kilogram of other oil gases (HS number 2711.19.00.90). 
The excise tax on additives and extenders of mineral oils is equal to the excise tax prescribed for the 
product to which they are added. Any hydrocarbon, produced from crude oil and used as heating fuel (with exception of coal, lignite, peat or similar solid hydrocarbons and natural g as) is taxed at the rate 
for the equivalent mineral oil. 
Buyers are entitled to an excise tax drawback of  50 per cent for mineral oils used as fuel for 
agricultural, and forestry machinery (including tractors). 
- Exemptions
 
Excise tax is not paid on mineral oils: 
- that are used as fuel in air and maritime tra ffic and as fuel for fishing boats, except when 
aircraft, vessels and fishing boats are used for private purposes; 
- that are used as fuel in the production of electri c energy and in plants for the joint production 
of electric and heating energy; 
- that a producer uses for further processing of other mineral oils, unless used as a fuel for 
transportation; or 
- that are injected in blast furnaces for chemi cal reduction purposes as an additive to coke as 
the basic fuel.  
- Excise tax drawback  
There is a possibility for excise reimbursement  and drawback for following excise licensees: 
- An excise licensee that acquired excise goods at a price that includes excise, and that used 
such goods in an excise goods warehouse for the production of excise goods; WT/ACC/CGR/3 
Page 52  
 
 - An importer that is returning imported goods abro ad in an unchanged condition, and that paid 
excise tax for such goods in their import; 
- An exporter who is exporting excise goods on which excise tax has been paid; and 
- Person who acquired excise goods for a price in which the excise tax is included or for which 
the excise tax was paid in import, and whic h were used for particular purposes (see: 
"Exemptions" in Alcohol and alcohol beverages a nd in Mineral oils, mineral oils derivatives 
and their substitutes). 
- Excise tax exemptions
 
1. Excise tax exemptions for diplomatic and c onsular missions and international organizations  
Excise tax is not paid on: 
- Goods for official needs of diplomatic and consular missions accredited in Montenegro; 
- Goods for official needs of international or ganizations, if this is established by the 
international agreements; 
- Goods for personal needs of foreign staff me mbers of diplomatic and consular missions 
accredited in Montenegro, including their family members; or 
- Goods for personal needs of foreign staff memb ers of international organizations, including 
their family members, if this is estab lished by the international agreements. 
2. Other excise tax exemptions  
Excise tax is also not paid on: - Goods that are sold on ships and in aircraft on international traffic routes; 
- Goods that a passenger may bring from abroad as part of his/her personal luggage that are 
exempt from import duty; or 
- Mineral oils, mineral oil derivatives and their s ubstitutes in the standard reservoirs of motor 
vehicles, vessels or aircrafts arriving from abroad  that are not intended for further sale and are 
exempt from import duties. 
- Value Added Tax
 
The Law on Value Added Tax (RM OG No. 65/01, 12/ 02, 38/02, 72/02, 21/03) entered into force on 
1 April 2003 and abolished the sales tax regulations.  
The Law prescribes that the tax base for imported g oods is the value of the goods, determined in the 
conformity with the customs regulations.  The obligation of payment of VAT on imported goods is 
established at the same moment when the obligation of payment of customs duty and other import charges on goods is established. 
With respect to goods that are not subject to cu stoms duties and other import charges, VAT accounts 
for at the moment when obligation to pay import duties has been established. 
The tax base includes: - Excise tax and other taxes, levies and other char ges paid outside Montenegro and on import, 
excluding VAT; and 
- Indirect expenses, such as commissions, cost of packing, transport and insurance, which arise 
after the import of goods to the first place of destination in Montenegro.   WT/ACC/CGR/3 
 Page 53 
 
 
 For import of goods, the tax base excludes price reductions and discounts: 
- Price reductions and discounts given on the i nvoice at the time the supply is performed; and 
- Amounts which the taxpayer charges, receives or pa ys in the name and for the account of the 
purchaser or third party. 
The tax base for the import of goods that were pr eviously temporarily exported by the taxpayer for 
processing, repair or mounting abroad, are the valu e of processing, refining, repair or mounting, 
including the value of materials used for those purpo ses and other costs abroad related to the dispatch 
and delivery of those goods. 
VAT is paid at the rate of 17 per cent on the import of goods, except for import of goods for which it 
envisaged that the VAT is not assessed and paid as well on import of goods that are at zero rated. 
The following services that are in public in terest are exempt from the VAT payment: 
- Health services and care and delivery of goods including supply of human organs, blood and 
human milk performed in accordance with the la w governing the field of health care activities 
- Copyrights and services related to literature and art areas; 
- Copyrights related to science and art products, works of art and antiques; 
- Services provided by non-government organi zations established in accordance with the 
regulations governing the activities of those organizations unless it is unlikely that such 
exemptions would lead to a distortion of competition; and 
- Supply of water. 
The following are the general exemptions from VAT: - Main food items for human consumption (bread, milk, fat, oil and sugar); 
- Medicines and medical items, determined by Decree on production and supply of medicines; 
- School books for elementary, middle, and high school education, which are approved by the 
responsible Minister; 
- Books and publications of a special interest for science, art, culture and sport by virtue of an 
opinion given by a competent minister; 
- Insurance and reinsurance services, including services provided by insurance brokers and 
agents; 
- Supply of immovable propriety, except the first tr ansfer of the ownership rights that is the 
rights to dispose of newly-constructed immovable property; and 
- Services of leasing and subletting of residentia l houses, apartments and permanent residential 
premises for longer than 60 days and lease of ag ricultural land or forests, which are registered 
in land books. 
- Banking and financial services, such as: 
- Approving and managing credits, and approvi ng and managing guarantees that is other 
forms of credit insurance on the part of the lender; 
- Services relating to the management of deposits, savings, bank accounts, conducting 
payment transactions, transfers, executi ng due liabilities, cashing cheques or other 
financial instruments, except for recovery of debts and factoring; 
- Transactions, including the issuing of bank notes and coins, which are legal tender in any 
country, excluding collector items; the collector items shall be considered to be coins of gold, silver and other material, bank notes not in use as legal tender, and coins with a 
numismatic value; 
- Trading in shares that is other forms of participation in companies, bonds and other 
securities, including their issuance, ex cept for the safekeeping of securities; WT/ACC/CGR/3 
Page 54  
 
 - Investment fund management; 
- Current postage stamps, administrative and court and tax stamps; 
- Supply of gold and other precious metals to the Central Bank of Montenegro; and 
- Services of games of chance. 
The following are exemptions from VAT related to import of goods: 
- Imported goods supply of which is exempt from VAT in Montenegro; 
- Goods brought into Montenegro in transit procedure; 
- Re-imported goods imported in an unchanged state by the person who exported the goods, 
provided that such goods are exempted from payment of customs duties in accordance with customs regulations; 
- Re-imported goods on which service s have been performed abroad but in respect of which the 
right to a deduction that is refund of VAT has not been recognized; 
- Goods imported by state bodies or humanitari an organizations, which are intended for, 
people, as a free of charge delivery, for their social needs. This exemption does not include 
alcohol drinks, tobacco and tobacco products , coffee and vehicles, except rescue vehicles; 
- Imported goods exempted from payment of cust oms duties intended for official purposes of 
diplomatic, consular organizations and interna tional organizations and to members of such 
organizations, within the limits and under the c onditions set forth in international conventions 
establishing the organizations, on the basis of an opinion issued by a minister responsible for foreign affairs; 
- Services related to imports of goods, provided th at the value of such services is included in 
the tax base; and 
- Gold and other precious metals, bank notes and coins imported by the Central Bank of 
Montenegro. 
Goods that are temporarily imported are exempt  from VAT payment provided that are exempt 
customs duties according to the customs legislation.   
Other special exemptions: 
- the release of imported goods that are not placed into free circulation provided that those 
goods are intended for storage in an excise warehouse; 
- Imports of goods intended: 
- to be submitted to customs authorities and wh en permitted to be stored temporarily  in 
accordance with customs regulations; 
- to be entered into a free customs zone; and 
- to be subjected to a customs warehousing pro cedure or import procedure for export under 
suspension arrangement. 
The payment of VAT is exempt on condition that the goods are not released for free circulation and 
that the amount of VAT on release for free circulation is the same amount as would have been 
charged and levied if such supply of goods had been taxed at import into Montenegro. 
Besides, Article 43 of the Law on Value Added Tax prescribes that farmer, which is not VAT payer, 
has the right on flat compensation of entry VAT (3 per cent of the purchasing value of the product) on the basis of delivery of agricultural and forest pr oducts and services to persons registered for VAT.  WT/ACC/CGR/3 
 Page 55 
 
 
 (l)  Rules of origin 
The Customs Law contains detailed provisions on rul es of origin.  The rules of origin applied by 
Montenegro are compliant with the Agreement on Rules of Origin.  Please see Articles 23-28 of the 
Customs Law and the provisions of Articles 13-67 of the Decree on Implementation of Customs Law 
(RM OG No.15/03) and Annex 4 of document WT/ACC/CGR/3/Add.1. 
Preferential rules of origin which goods need to co mply with in order to benefit from favourable tariff 
treatment are specified in several free trad e agreements.  Please see Annex 4 of document 
WT/ACC/CGR/3/Add.1. 
The Customs Administration of Montenegro issu es certificates of preferential origin (See 
Section III.2.), while the Chamber of Commerce of M ontenegro issues certificates of domestic origin 
of goods – non-preferential origin. 
- Trade Remedies  
 - General  
The Montenegrin Foreign Trade Law allows th e imposition of safeguard measures, antidumping 
duties, and countervailing duties consistently with  the relevant WTO Agreements.  The detailed 
procedure related to the introduction of these measur es is given in the Decree for Implementation of 
the Foreign Trade Law  
(m)  Anti-dumping regime 
The Foreign Trade Law prescribes in Article 36 that  the Government may levy an anti-dumping or 
countervailing duty only where it has been establishe d on the basis of investigations conducted in 
accordance with the Law that: 
- there has been a significant increase in dumped or subsidized imports compared to the level of 
domestic production or consumption; 
- there has been significant price undercutting by the dumped or subsidized imports compared 
with the price of the like domestic product or  the prices of such imported products have 
depressed to a significant degree the price of the like product or have prevented that price 
from increasing as it would otherwise have done; and  
- as a result, Material Injury is caused to the domestic  industry or there is a threat of such injury 
to the domestic industry.  
Countervailing or anti-dumping duties may not be levied if investigations show that the main factors 
causing injury to the domestic industry are factor s other than subsidized or dumped imports.  
The anti-dumping duty may not exceed the lesser of th e amount necessary to remove the injury to the 
domestic industry or the amount of the full margin of dumping, i.e. the difference between the normal 
value of goods and the price for such goods when intended for exports to the Republic of Montenegro. 
The countervailing duty may not exceed the lesser of the amount necessary to remove the injury to the 
domestic industry or the full amount of subsidy. 
The Ministry for International Economic Relations  and European Integration is responsible for 
conducting an investigation on the basis of a written a pplication made by, or on behalf of the domestic 
industry, i.e. by the domestic producers whose coll ective output constitutes more than 25 per cent of 
the total domestic production of the like product.  If the competent authority determines that the WT/ACC/CGR/3 
Page 56  
 
 application is justified, it will initiate the inv estigation process and publish a notification in the 
Official Gazette.  The investigation procedure has to  be concluded within one year of its initiation. 
The Government, on the recommendation of the Ministry when the existence of dumping or 
subsidizing is confirmed, decides whether anti-dumpi ng or countervailing duties are to be levied.  The 
Government of Montenegro may also apply pr ovisional antidumping or countervailing duty, or 
security, in the amount equal the provisionally estim ated anti-dumping or countervailing duty, if after 
the expiry of 60 days from the day of initiation of th e investigation procedure, it was determined that:   
- both the existence of dumping and/or subsidizi ng and of injury to the domestic industry are 
probable; 
- delay would cause damage which it would be difficult to repair; and 
- the interested parties have been given an op portunity to submit data necessary for protection 
of their interests. 
The application of provisional measures may not exceed  six months in the case of antidumping duties, 
and four months in the case of countervailing duties. 
An anti-dumping or countervailing duty may remain in force for as long as necessary to remedy an 
injury, but not exceeding four years.  The Ministry  must review the need for the continued imposition 
of the duty during the period of its application a nd it may recommend that the Government terminate 
an antidumping or countervailing duty, if as a result of such review it determines that the reasons for its application have ceased to exist. 
Both the decision on introduction of anti-dumping or countervailing duty and the decision on 
introduction of provisional anti-dumping and counterva iling duty have to be published in the Official 
Gazette.   
The provisions of the Foreign Trade Law and the Decree for Implementation of the Foreign Trade 
Law related to anti-dumping and countervailing duti es are fully compliant with the relevant WTO 
agreements:  GATT; Agreement on Implementati on of Article VI of GATT 1994 and Agreement on 
Subsidies and Countervailing Duties.  
For further details please see Annex with the text  of the Foreign Trade Law and the Decree for 
Implementation of the Foreign Trade Law.  
(n)  Countervailing duty regime 
Please see IV. 1. (m) 
(o)  Safeguard regime  
The Government, on the recommendation of the Mini stry for International Economic Relations and 
European Integration, may apply safeguard me asures for excessive import in the form of a 
quantitative restriction or tariff rates increase if it h as been determined that imports of a particular 
product within a period of time are being imported in such increased quan tities with regard to 
domestic production, in the way to cause or threaten to cause serious injury to domestic producers making 50 per cent of the overall domestic pr oduction of this or related products.  
The Ministry's recommendation to impose safeguard  measures is based on the results of an 
investigation initiated and conducted in accordance with  the regulations.  The Ministry's decision to 
initiate an investigation is pub lished in the Official Gazette of the Republic of Montenegro.  WT/ACC/CGR/3 
 Page 57 
 
 
 If a safeguard measure is introduced in the form of  a quantitative restriction, it may not reduce the 
quantity of imports below the average level of im ports in three representative years preceding such 
imports.  Safeguard measures are applied only to th e extent necessary to prevent or remedy serious 
injury and to facilitate adjust ment of the domestic industry. 
The Government of Montenegro may introduce a provisional safeguard measure, for a period not 
exceeding 200 days, in the form of tariff in crease, if the evidence clearly shows that: 
- increased imports have caused or are threaten ing to cause serious injury to the domestic 
industry; and 
- delay in introducing safeguard measures would cause injury difficult to repair. 
If the subsequent investigation determines that incr eased imports have not caused or threatened to 
cause serious injury to a domestic industry, an y amounts collected on the basis of the provisional 
safeguard measure, are promptly refunded to th e importers concerned and the duration of any 
provisional safeguard measure is calculated in th e total duration of the safeguard measures, if 
introduced after the full investigation procedure.   Safeguard measures may remain in force for as long 
as necessary to remedy an injury, but not exceeding four years.  Exceptionally, the application period 
may be extended provided that the Government h as determined that the saf eguard measure continues 
to be necessary and that there is evidence that the injured or endangered industry is adjusting. 
However, the total period of application of a safeguard measure may not exceed eight years. 
The provisions of the Foreign Trade Law and the Decree for Implementation of the Foreign Trade 
Law related to safeguard measures are fully comp liant with the relevant WTO agreements:  GATT; 
Agreement on Implementation of Article VI of GATT 1994 and the Safeguards Agreement. 
For further details please see Annex with the text  of the Foreign Trade Law and the Decree for 
Implementation of the Foreign Trade Law.  
2.  Export Regulation 
(a)  Registration requirements for engaging in exporting 
Please see Section IV. 1. (a) above.  
(b)  Customs tariff nomenclature 
The export customs tariff nomenclature is the same  as the import customs tariff nomenclature.  The 
Republic of Montenegro applies 15 per cent export duty only for export of scrap steel and ferrous 
metals and 20 per cent export duty for export of  raw leather.  Please see Table IV. 2.    WT/ACC/CGR/3 
Page 58  
 
 Table IV.2 - Tariff numbers subject to export duty
 
 
(c)  Quantitative export restrictions, including  prohibitions, quotas and licensing systems  
- Export Prohibitions  
There are no export prohibitions in the Republic of Montenegro. 
- Export Quotas  
The Government, based on Article 15 of the Foreig n Trade Law may impose quantitative restrictions 
on exports:  
- in case of critical shortages of products essen tial to the Republic, or for the relief of 
consequences of such shortages; or 
- in order to protect exhaustible natural rec ourses, if export restrictions are applied 
simultaneously with restrictions on domestic production or consumption 
The Ministry for International Economic Relati ons allocates any quotas on the basis of a public 
invitation to submit requests for allocation of quot as.  The Ministry allocates quotas on the basis of 
objective and rational criteria and c onditions, defined in the notice of public bid, which may not have 
a protective purpose or competition distorting effect, including inter alia: 
- the economically justified quantities of goods under quota; 
- the performance of the applicant in utilizing previously allocated quotas; and 
- allocating quotas to persons previously not having been allocated quotas. 
Decisions on quota allocation specify conditions to be fulfilled by the persons receiving quotas, 
including the period of time, not exceeding one y ear, during which the quota must be used.  The 
number of shipments during the period of validity of the quota is not limited.  The exporter is free to Tariff number for steel 
and ferrous metals Export duty % Tariff number for leather Export duty % 
7204100000 
7204210000 
7204290000 
7204300000 7204411000 
7204419100 
7204419900 7204491000 
7204493000 
7204499100 7204499900 
7204501000 
7204509000 7404001000 
7404009100 
7404009900 
7503001000 
7503009000 7602000000 
7802000000 
7902000000 8002000000  
 
 
  
 
  
15%  
4101101000 
4101109000 
4101210000 4101220000 
4101290000 
4101301000 4101309000 
4101400000 
4102101000 4102109000 
4102210000 
4102290000 4103100000 
4103200000 
4103900010 
4103900090 
  
 
 
  
 
  
20%  WT/ACC/CGR/3 
 Page 59 
 
 
 choose the destination country.  A person who has been allocated a quota may not transfer such quota 
to another person, nor allow its use by other person. 
(d)  Export licensing procedures 
The Government may, in accordance with the provi sions of the Foreign Trade Law, require licenses 
for the export of certain goods, which shall be base d on objective and rational criteria, conditions and 
procedures. 
The Government may require export licenses only when it is necessary to: 
- protect national treasure of artistic, cultural, historic or archaeological value; 
- protected endangered species or plants; 
- protect national security; 
- protect environment or exhaustible natural resource; 
- protect intellectual property rights; or 
- enforce any special rules for trade in gold and silver. 
The export licensing procedure is essentially the same  as the import licensing procedure.  For details 
please see the Section IV.1.(f). 
The Decision on Control List for Export and Import of Goods is based on Article 6 of the Foreign 
Trade Law.  The Decision defin es the competent bodies for issuing licenses and approvals for goods 
listed in the Control List and its Annexes.  Please see the Section IV.1.(f) and detailed list (HS code 
and description) in Annex 11 of document WT/ACC/CGR/3/Add.1. 
(e)  Other measures 
The Republic of Montenegro does not apply any other export measures such as minimum export 
prices, voluntary export restrictions, or orderly marketing arrangements.  
(f)  Export financing, subsidy and promotion policies 
The Republic of Montenegro does not apply export subsidies.  
(g)  Export performance requirements 
There are no export performance requirements in Montenegro. 
(i)  Import duty drawback schemes 
Articles 128 to 132 or the Customs La w regulates duty drawback.  The dr awback system applies to all 
goods on which duties have been paid, with the ex ception of goods that are subject to quantitative 
import restrictions or that qualify for preferential ta riff treatment or for the export of which drawback 
or a tax is envisaged at the time the declar ation for release for free circulation is accepted 
The declaration for release for free circulation must indicate that the drawback system is being used 
and provide particulars of the authorization. The holder of the authorization may request drawback 
when he can prove to the satisfaction of the cu stoms authorities that the goods released for free 
circulation or compensating products or goods in an unaltered state have been: 
- exported; or WT/ACC/CGR/3 
Page 60  
 
 - placed, with a view if being subsequently re-e xported under the internal transit procedure, 
under the customs warehousing procedure, the temporary importation procedure or inward 
processing procedure (suspensive arrangement), or  in a free zone or free warehouse, provided 
that all other stipulated conditions have been fulfilled. 
Drawback of customs duty may be requested no late r than three years from the day when the customs 
debt was incurred.  
3.  Internal policies affecting foreign trade in goods 
(a)  Industrial policy, including subsidy policies 
Industrial policy in Montenegro is directed to wards stabilization, the enhancement of business 
efficiency and the quality of industrial products; ad justing range of produced goods to the market 
needs; and restructuring and privatization of enterprises.  
In Montenegro there are only a small number of subsidies for industrial products and they are 
introduced as assistance to enterprises in the restructuring and privatization process.  
The Republic of Montenegro Budget for 2003 provided  subsidies for the energy sector only, in the 
amount of €1,177,000 (in the preceding year these  subsidies were €5,112,918).  These funds are 
intended to cover a part of the overhaul costs in the electric power plant "Elektroprivreda" and Coal 
Mine "Pljevlja".  The subsidies were provide to f acilitate overhaul of energy facilities and due to the 
fact that in the previous period prices of electricity and coal for production of electricity were much below the costs of production. Current price of coal  covers costs of production, and average price of 
electricity is c€ 4.6/kWh.  Subsidies for the energy sector in 2004 are planned in the amount of €500,000. 
According to the budget of the Republic of M ontenegro for 2005, the amount of energy-related 
subsidies will be €800,000 and will be mostly orie nted toward the Iron and Steel Plant in Nikši ć 
(Željezara Nikši ć) on the basis of a privatization contract, through which the Government promised to 
pay to the Iron and Steel Plant in Nikši ć the price difference between the price agreed with the 
Electric Power Industry of Montenegro and the price determined in the privatization contract, for a 
certain period after the privatization is completed. 
In 2003 the Government adopted the Program of Rest ructuring of Enterprises, which provides that the 
companies that have undergone mass voucher priv atization, and whose programs are to be accepted, 
will receive loans for financing operating assets, sma ller scale investment, and solving the issue of 
technical and economical surpluses, through banks and with the participation of credit funds of the 
banks.  The Budget for 2004 provides €2.5 million for this Program, as well as part of the funds 
planned for solving the issue of technical and ec onomical surpluses (with the Ministry of Labour and 
Social Welfare, the funds in the amount of €10. 9 million were planned for solving the issue of 
technical and economical surpluses and for employment of first-time employees).  
- Other subsidies 
 
Tax incentives are provided for under the provisions of Articles 30, 31 and 32 of the Law on Legal 
Entities Profit Tax (OG RM No. 65/01, 12/02). The tax incentives instruments provided in this Law 
include tax relief as follows: 
- Twenty-five per cent profit tax deduction for investment in fixed assets for the purpose of 
own activity, but such tax credit may not exceed 30 per cent of the calculated tax for the year  WT/ACC/CGR/3 
 Page 61 
 
 
 in which the investment was made.  Fixed assets include all permanent fixed assets subject to 
depreciation excluding passenger vehicles; and 
- New production enterprises in underdeveloped muni cipalities are exempt from  profit tax for 
the first three years. 
The Law also prescribes that the following entities are not entitled to this type  of tax exemption:  
- A legal entity established by merger, division of an existing legal entity, or any status change;  
- A legal entity that ceased to exist or stopped oper ating in the same or similar activities in the 
three-year period prior to its establishing; and 
- A newly established legal entity whose f ounder or cofounder is a related person. 
Legal persons established as non-governmental organiza tions are exempt from tax on up to €4,000 of 
profit, provided they use such profits for pur poses for which they have been established. 
(b)  Technical regulations and Standards 
Since the former SFRY was a signatory to the TBT Code under GATT 1947, a number of principles 
of that Agreement, and the subsequent WTO TBT Ag reement are contained in the current legislation 
of the State Union Serbia and Montenegro. 
Standards, technical regulations and conformity asse ssment procedures are adopted at the level of the 
State Union Serbia and Montenegro.  The Law on Standardization (FRY OG No. 30/96, 59/98, 70/01 and 8/03) and its two relevant decrees, the Decree on the Procedure for the Elaboration and Enactment 
of Technical Regulations and for Keeping the Registry of these Regulations (FRY OG No. 4/97) and the FRY Decree on the Procedure for the Elabor ation, Adoption, and Enactment of Yugoslav 
Standards (FRY OG No. 4/97) are the three key legal documents governing the adoption and 
administration of standards and technical regulations  in the State Union Serbia and Montenegro.  The 
Decree on the Procedure for Conformity Asse ssment and for the Performing of Technical 
Surveillance (FRY OG No. 55/97, 57/97, and 3/03)  regulates conformity assessment procedures.  A 
detailed description of these decrees is provided in Annex 5 of document WT/ACC/CGR/3/Add.1.  All of these laws and regulations are binding for Montenegro. 
The State Union Serbia and Montenegro is a full -fledged member of ISO and IEC, and has accepted 
the WTO TBT Code of Good Practice for the Preparation, Adoption, and Application of Standards on 
1 January 1998 through the ISO Council. 
The Institute for Standardization, along with the Mi nistry of Internal Economic Relations of the State 
Union, is in charge of implementing the Law on St andardization and adopting standards in Serbia and 
Montenegro.  Standards for defence related goods, ser vices, and processes are not set by the Institute 
for Standardization and do not have the status of Yugoslav standard.  Sector specific standards have 
been elaborated in many fields including teleco mmunications, railway transport, and the electric 
power industry.  The Bureau of Measures and Precious  Metals, within the Union Ministry of Internal 
Economic Relations, is in charge of implementi ng the Law on Units of Measurements and Measuring 
Instruments (FRY OG No. 80/94, 83/94, 28/96 and 12/98) and the Law on Control of Precious Metal 
Articles (FRY OG No. 80/94, 83/94 and 28/96).  Th ere are no similar regional bodies or bodies at the 
Republic of Montenegro level. 
Technical regulations may be elaborated by minist ries of the Republic of Montenegro within their 
areas of responsibility and in consultation with the In stitute for Standardizati on and Union Ministry of 
Internal Economic Relations. Technical regulations ma y refer to or incorporate standards. They must 
be enacted by the Ministry of Internal Economic Relations of the State Union.  WT/ACC/CGR/3 
Page 62  
 
 The Decision on Control List lists goods subject to  technical regulations (see Table IV.10 below). 
Domestic goods are subject to the same measures. 
Table IV. 3. – Technical Measures on Imports
 
Measures6 Goods 
Certificate of Homologation 79 goods in chapters 40, 65, 70, 84, 85, and 87 
Certificate of Conformity  320 goods in chapters 25, 44, 69, 73, 84, 85, 86, 87, and 90 
Certificate of Compliance with Metrological 
and other Requirements for Measuring 
Instruments Subject to Import 126 goods in chapters 70, 84, 85, 90, and 91 
 
Lastly, the Law on Quality Control of Agricultu ral and Food Products in Foreign Trade (FRY OG 
No. 12/95, 28/96 and 59/98) and the Decision on De signation of Food and Agricultural Products and 
their Manufactured Products Intended for Import and Export that are Subject to Quality Control (FRY 
OG No. 13/96 and 39/96) subject 53 items to impor t quality control and 8 items to export quality 
control. Please see Annex 5 of document WT/ACC/CGR/3/Add.1 for a detailed list of the goods.  
The following brief notes outline the nature and main features of standards in Serbia and Montenegro: 
- The majority of standards are or have been de veloped on the basis of international, European 
and other developed country standards; 
- A number of standards and technical regulations  deal with shelf-life requirements for goods, 
especially for food products; 
- Technical regulations primarily deal with prod ucts such as household appliances, electrical 
equipment, food products, ceme nt, and building materials; 
- Most standards and technical regulations do not provide higher prot ection than relevant 
international standards and guidelines; and 
- Products subject to technical regulations may not be imported or marketed unless a certificate 
of conformity is obtained. 
The Institute for Standardization aims to harmonize standards with the European Union.  Standards 
dealing with pressure vessels and environmental pr otection have already been harmonized with the 
EU standards. 
The Accreditation Body of Serbia and Montenegro, within the Union Ministry of Internal Economic 
Relations, is responsible for accreditation of en tities for conducting conformity assessment (i.e. 
inspection, calibration, testing, quality manage ment, environmental mana gement, and product or 
personal certification).  The Accreditation Body of Serbia and Montenegro conducts accreditation in 
accordance with Article 13 of the Law on Standa rdization (FRY OG No. 30/96, 59/98, 70/01 and 
8/03) and Article 60 of the Law on Measuring Units and Measurements (FRY OG No. 80/94, 83/94, 
28/96, and 12/98).  
The State Union Serbia and Montenegro is a signato ry to a number of international agreements on 
mutual recognition of certification and test results  for specific products.  The Accreditation Body of 
Serbia and Montenegro recognizes certificates an d test reports on the basis of bilateral and 
multilateral agreements (Article 32 of the Law on Standardization). 
Although the Accreditation Body of Serbia and Monten egro exists, the Ministry of Internal Economic 
Relations of the State Union may also authorize (" accredit") institutions for certification.  There are a 
number of accredited laboratories in the Union coveri ng a wide range of goods.  Test fees are charged 
                                                      
 6 For additional details, please see Annex 5 of document WT/ACC/CGR/3/Add.1.   WT/ACC/CGR/3 
 Page 63 
 
 
 to importers in the same manner as those charged to domestic producers.  Test results from foreign 
laboratories are accepted, provided an agreement on recognition exists. 
The Ministry of Economy of the Republic of Mont enegro has the authority for surveillance over the 
compliance with the technical regulations and st andards at the territory of the Republic of 
Montenegro.  Market Inspection in Montenegro, with in the Ministry of Economy, is in charge of 
ensuring compliance with technical regulations at th e border and within the domestic market of the 
Republic. Market Inspection has representatives at border points who examine all shipments of goods 
subject to technical regulations and forward sampl es to laboratories for testing. Furthermore, the 
Government of Montenegro established the Board fo r Quality, consisted of the experts from various 
disciplines relevant for the TBT and the ministers an d deputy PM who are in charge for areas relevant 
for TBT as well. 
New laws on standardization, technical require ments for products and conformity assessment, 
accreditation, and metrology are curren tly being drafted at the Union level.  It is expected that these 
laws will be compliant with the WTO Agreement on Technical Barriers to Trade.  Authorities of the Republic of Montenegro were strongly involved in drafting of these laws. 
(c)  Sanitary and phytosanitary measures 
The current laws governing sanitary, phytosanitary , and veterinary measures are the following: 
- The Law on Health of Foodstuffs and Items of  General Use (SFRY OG No. 53/91; FRY OG 
No. 24/94, 28/96, 37/02); 
- The Law on Production and Circulation of Pois onous Substances (FRY OG No. 15/95, 28/96, 
37/02); 
- The Law on Plant Protection (FRY OG No. 24/98 26/98); and 
- The Veterinary Law (RM OG No. 11/04). 
Goods subject to these laws may not be imported w ithout a certificate of origin, border testing, and 
the relevant certificate (sanitary, phytosanitary or veterinary) issued by an authorized body in the country of exportation. 
- Sanitary Measures
 
Montenegro currently applies the Law on Health of Foodstuff and Items of General Use (SFRY OG 
No. 53/91; FRY OG No. 24/94, 28/96, 37/02) as the main law governing health requirements and supervision connected with sale of imported and do mestically produced foodstuffs and other items of 
general use.  According to this law, food include s any goods suitable for easting or drinking and 
which have been processed or are still in their orig inal state.  Food includ es public water supplies–in 
the form of drinking water and water used for the production of other types of food intended for sale. 
Please see Annex 12 of document WT/ACC/CGR/3/Add. 1, which lists the conditions under which the 
food and items of general use are considered to  be in accordance with sanitary requirements. 
In addition, the Law, inter alia:  determines speci fic labelling requirements for diet food and food and 
items of general use containing a dditives and nutritional substances (e.g. vitamins, minerals); and 
imposes advertising requirements for consumer protection. 
Imported food and items of general use must have a sanitary certifi cate issued in the country of origin.  
In addition, samples are taken by the sanitary a nd veterinary inspector at the border and sent for 
testing to an accredited laboratory.  The first shipme nt is always tested.  Subsequent shipments are 
physically inspected.  Testing takes place in case of doubt regarding the food safety.  As a rule, 
shipments may not clear customs before testing is  complete.  Goods, which may be released from WT/ACC/CGR/3 
Page 64  
 
 customs, may not be circulated until the sanitary and veterinary inspectors issue an Act of Health 
Quality, indicating conformity with regulations.  No guarantee is required for released goods.  A 
penalty, however, is applied in the case of sale of goods prior to sanitary clearance. 
The importer must cover the expenses for testing a nd health quality examination.  If imported goods 
do not conform, then they must be either destroyed or returned to country of exportation at the 
expense of the importer.  Once imported, foodstuffs and items of general use are, same as domestic 
goods, subject to periodic or random inspections at storage facilities and retail outlets by the 
veterinary and/or sanitary inspector as well as market  inspectors.  Furthermore, foods in their original 
state (e.g., fresh fruits and vegetables) are also insp ected at the border by the phytosanitary inspection. 
There are no regulations connected with the import of frozen foodstuff.  International practices are, 
however, applied in practice. 
According to the Economic Reform Agenda, the G overnment of the Republic of Montenegro plans 
enactment of a new Food Safety Law some time in 2005. 
- Phytosanitary Measures
 
The Law on Plant Protection from 1998 is the ma in law governing phytosanitary measures in the 
Republic of Montenegro.  Phytosanitary measures are equivalent to the European measures.  Plants,7 
fertilizers and pesticides,8 when imported, exported or transite d through the Republic of Montenegro, 
are subject to phytosanitary control.  A phytosanita ry certificate (in accordance with the International 
Plant Protection Convention) and inspection by the phytosanitary inspector at the border are required 
in order to clear customs.9  If the phytosanitary certificate does not accompany the shipment or 
examination indicates that the shipment is infected , the phytosanitary inspector may order return of 
the shipment to the country of exportation or the destruction of shipment in the presence of customs 
officers. 
The Regulations on Health Inspection of Plant Shipments Crossing the State Border (FRY OG 
No. 69/99) regulates the manner of carrying out health control of plant shipments, pesticide shipments 
and plant-nourishment means (fer tilizer) shipments during the import, export and transit, as well as 
conditions under which the shipment s should be exported and transite d.  In the Article 2 of the 
Regulations it has been defined what the "plant shipment" implies and lis ts all goods subject to 
phytosanitary inspection at the border. Please see Annex 12 of document WT/ACC/CGR/3/Add.1. 
The Order on Imported Types of Planting Material a nd Surveillance Over End-user's State of Health 
(FRY OG No. 8/99) defines types of imported pl anting materials carrying or spreading quarantine 
type hazardous organisms, whose presence can not be  determined during health control at border 
crossing. 
If the possibility for transmission of harmful organi sms is eliminated by chemical, thermal or any 
other method of plant processing, products will no longe r be subject to phytosanitary inspection.  The 
following goods are not subject to phytosanitary in spection: steamed parquet, plywood sheet, panel, 
steamed veneer, processed cork, impregnated wood, carpentry, weavings, conserved and frozen fruits 
                                                      
7 Only certain border crossings have phytosanitary inspection.  Imports of all plants must be routed 
through these points. 
8 Import is only authorized to legal persons.  
9 Shipments of seeds, nursery plants, and seedlings may clear customs without inspection provided a 
phytosanitary certificate accompanies the shipment. Inspection, however, must take place before the use of such 
goods.  WT/ACC/CGR/3 
 Page 65 
 
 
 and vegetables, roasted coffee, roasted almond and pistachio, and spun and chemically processed 
plant fibres. 
Last, the Order on Prohibiting Import and Transit of Specific Types of Plants and Determining 
Quarantine Surveillance over Specific Types of Plan ts that are Imported for Variety (FRY OG 8/99) 
prohibits the import or transit of 14 categori es of plants (please see Annex 12 of document 
WT/ACC/CGR/3/Add.1).  In addition, the Orde r subjects a number of plants to quarantine 
surveillance. Please see Annex 12 of document WT/ACC/CGR/3/Add.1. 
The Ministry for Agriculture, Forestry and Wate r Supply has drafted a new Law on Plant Protection, 
which contains all WTO and EU necessary provisions.  This Law is expected to be passed during the 
first half of 2005. During 2005, the following laws are planned to be passed:  Law on Pesticides, Law 
on Seeds and Law on Planting Material. 
The Ministry of Agriculture, Forestry and Wate r management has drafted the new Law on Plant 
Protection containing all the necessary WTO and EU pr ovisions.  This Law is expected to be passed 
by the end of 2004. 
- Veterinary Measures  
The Veterinary Law is the main law governing vete rinary measures in Montenegro.  The Law governs 
animal protection from contagious diseases that jeopardize the whole country, protection from contagious diseases that can be transmitted from an imals to people and veterinary-sanitary control 
over production and circulation of products, raw ma terials and waste of animal origin.  The Law 
provides a list of contagious diseases of animals.  Please see Annex 12 of document WT/ACC/CGR/3/Add.1. Around 175 goods are subject  to veterinary measures. Please see Annex 12 
of document WT/ACC/CGR/3/Add.1. 
Veterinary border inspectors conduct examinations and implement control at the border for imports, 
exports, and transit goods.  Also, the veterinary in spectors conduct veterinary-sanitary examination 
and control after goods clear customs.  The importe r is obliged to hold animals in quarantine for 
examination after they are imported. Importers bear all testing expenses. 
Import, export and transit of shipments of anim als, products, raw materials and waste of animal 
origin, semen, fertilized egg cells for animal fe rtilization and other items which can transmit 
contagious disease, are allowed only on certain bo rder crossings and are subject to veterinary 
inspection to determine health conditions.  The ve terinary inspector examines shipping documents and 
takes samples (without compensating the value) for the purpose of conducting veterinary-sanitary 
inspection.  If disease is identified or the shipme nt does not comply with the required veterinary-
sanitary conditions, the Inspector may order the destruc tion of the shipment or its return to the country 
of exportation.  These measures are defined through an act issued by the veterinary inspector.  
Administrative appeal against such act is possible within eight days.  The appeal, however, does not 
prevent the act from being executed. 
The Article 6 of the Law prescribes that internationa l obligations regarding the prevention, detection, 
control and uproot of infectious animal diseases, products, raw materials, foodstuffs, animal feed and 
animal origin waste, as well as other objects carrying and spreading diseases, should be fulfilled in accordance with international conventions  and other international agreements. 
The Ministry of Agriculture, Forestry and Wate r Supply applies Order on Measures for Prohibiting 
Import of Contagious Animal Disease BSE of Ca ttle (FRY OG 6/01), which prohibited/restricted 
import and transit of:   WT/ACC/CGR/3 
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 - Live cattle; 
- Products, primary products and (w aste) originating from cattle; 
- Semen and fertilized cells for artificial cattle breeding; 
- Animal food containing ingredients of animal origin (meat flour, bone flour, any combination 
of the two, blood flour, liver flour, and ot her additives originating from animal food 
ruminants); 
- Medicines and vitamins containing ingredients originating from ruminants; 
- All other products used for nutrition or cosm etics containing substances originating from 
ruminants and other things that can be infected with BSE; and  
- Humanitarian aid consisting of the above listed products. 
(d)  Trade-related investment measures 
The Republic of Montenegro does not apply any trade-related investment measures (TRIMs). 
Please see II. 2. (d) for details on foreign investment policies. 
(e)  State-trading practices 
Please see Annex 6 of document WT/ACC/CGR/3/Add.1 for details on state trading in Montenegro. 
(f)  Free zones 
Articles 167-181 of the Customs Law regulate free z ones and free warehouses in Montenegro. Free 
zones and free warehouses are areas where special measures of customs control and supervision and special privileges pertaining to customs procedures apply such as: 
- for the purpose of import duties and commercia l policy import measures, foreign goods are 
not considered to have entered the customs te rritory, provided that the goods have not been 
released for free circulation or placed under another customs procedure or use, or consumed 
or used under conditions other than those provided for in customs regulations, and  
- domestic goods intended for export are subject to measures that would apply on export of 
such goods.  
Both foreign and domestic goods may enter a free zone or free warehouse. Goods placed in a free 
zone or free warehouse, may not be consumed or used during the period they remain therein.  Goods 
leaving the free zones and entering the territory of M ontenegro outside of the free zones are subject to 
normal customs duties and taxes.   
There is no limit to the length of time goods may remain in a free zone or free warehouse; 
exceptionally for certain domestic goods intended fo r export specific time limits may be imposed. 
Where domestic goods intended for export are not expor ted within the prescribed time or are returned 
to another part of the customs territory, the cust oms authorities take the measures prescribed for the 
cases where the goods fail to comply with the specific conditions.  
Foreign goods placed in a free zone or free warehouse may: - be released for free circulation; 
- undergo the usual forms of handling, without special authorization by the customs authorities; 
- be placed under inward processing procedure; 
- be placed under the procedure for processing under customs supervision; 
- be temporarily imported, be ab andoned to the government; or   WT/ACC/CGR/3 
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 - be destroyed or otherwise rendered unsuitable for any use, provided that the customs 
authorities are furnished with all the information they judge necessary.  
Domestic goods intended for export in a free zone  or free warehouse may undergo only the usual 
forms of handling which are performed for the pur pose of their preservation, improvement of their 
appearance or marketable quality or preparation for distribution or sale. 
Domestic goods which are not intended for export or  processing in the zone, may be stored in a free 
zone or free warehouse separately from other goods , where specially authorized by the customs 
authorities.  The customs authorities do not author ize storage of such goods, where it would make 
supervision over operations in a z one or warehouse more difficult.  
(g)  Free economic zones 
The Law on Free Zones (RM OG No. 42/04) regulates establishment, management and conditions for 
performance of business activities in the free zon es and the free warehouses, while the Customs Law 
regulates the treatment of goods in free zones and warehouses, as a form of customs-allowed treatment and utilization, after a free zone and warehouse starts with its operation.   
Free zones and the free warehouses are defined as parts of the customs territory of the Republic of 
Montenegro where business activities are carried out under special conditions.  However, the zone 
may consist of several spatially divided parts, s ub zones.  All business activities may be conducted in 
the zone and the warehouse, with exception of those presenting hazard to the environment, human health, material goods and the country's safety. 
The zone and the warehouse may be founded in the area of or in the vicinity of the seaport or airport, 
as well as in other suitable locations.   
Goods entered into the zone and warehouse and c onsumed or used in accordance with the Law on 
Free Zones (RM OG No. 42/04), are not subject to customs duties, customs charges, and the value 
added tax.  Goods may remain in the zone or the warehouse indefinitely, after being registered to the 
competent Customs office.  
Goods from the zone and warehouse transferred to ot her parts of the Republic in order to be placed 
into circulation are subject to customs duties,  customs charges and the value added tax, and 
application of possible import restrictions.  
The customs duties and customs charges are not paya ble for the domestic co mponent (raw materials, 
workforce, etc) in the goods in the zone or  warehouse.  When the domestic component exceeds 
50 per cent, the goods in the zone or warehouse, sha ll not be subject to restrictions related to the 
foreign trade regime. 
Goods may be temporarily taken out of the zone a nd the warehouse at the other parts of the territory 
of the Republic, or taken into the zone and warehou se from other parts of the territory of the Republic, 
for the purposes of processing (reprocessing, finishing or  treatment), mounting, testing, attestation, 
repair, marketing presentation, etc; such goods have to  be returned into the zone and the warehouse or 
exported abroad within the period required to comple te the above operations, and not later than a year 
from the day they are taken out of the zone and the warehouse. 
The Law on Free Zones provides certain favourable conditions for enterprises operating in a free 
zone: 
- Enterprises are not liable to pay profit tax; WT/ACC/CGR/3 
Page 68  
 
 - Foreign payment operations are generally unr estricted and may be carried out through any 
bank in Montenegro; 
- Loans may be granted or accepted without restrictions; 
- Labour agreements may be freely negotiated, and up to 10 per cent of employees may be 
foreign citizens; 
- Capital investments may be made without restri ction, and repatriation of capital and profits 
and stakes is free; 
- Banks and other financial organi zations and insurance companies with a seat in the zone and 
warehouse may be entirely foreign-owned; and 
- Private property may not be subject to nationalization or expropriation. 
Currently, there is one free zone in the Republic of Montenegro in the Port of Bar and there are a few 
requests for establishment of the free zone or ware house submitted to the Ministry for International 
Economic Relations. 
(h)  Trade-related environmental policies 
Montenegro applies the FRY Law on the Basic Principles of Environment Protection (FRY OG 
No. 24/98, 24/99), Law on Environment (RM OG No. 12/96, 55/00) and  Law on Protection from 
Ionizing Radiation (FRY OG No. 46/96). The Law on the Basic Principles of Environment Protection sets the policy framework for, inter alia, regulati on of trade for compliance with the environmental 
regulations. The Law is primarily under the admi nistration of the Ministry of Environmental 
Protection and Urban Planning and provides the following authority for the Ministry: 
- To order, in case of doubt, the inspection of  imported technology, products, semi-finished 
products, and raw materials despite having proper  documents concerning their harmful effect 
on the environment; 
- To regulate the import, export or transit of substances damaging the ozone layer; 
- To regulate the import, export, or transit of endangered and protected species of wild flora 
and fauna and of their developing forms and part s in accordance with the CITES Convention.  
The Law requires the issuance of an export licence by the Ministry of Environmental 
Protection and Urban Planning primarily to ensure  that the exported quantity or the number of 
specimens of an endangered or protected species  of wild flora and fauna will not endanger the 
survival of those species in the country; and 
- To regulate the import, export, and transit of  waste.  Waste may be imported only if not 
available in Montenegro and if it's necessary as the secondary raw material for production.  A 
licence is required for the import, export or transit of waste from the Ministry of 
Environmental Protection and Urban Planning. Th e Ministry also controls the movement of 
waste through the territory of the Republic of Montenegro.   
The Law provides the republic ecological inspection the authority to control and inspect import, 
export or transit at the border of technologies, pr oducts, semi-finished products and raw materials, 
waste, endangered species and ge netic species of the wild flora and fauna, biotechnologies and 
genetically modified organisms. The republic ecol ogical inspection is authorized to review the 
documentation, to inspect the shipments, to take  samples of goods and conduct other measures and 
activities. While conducting inspection, the ecol ogical inspector has a number of rights and 
obligations including: 
- To prohibit the export of protected and endangere d species of the wild flora and fauna if the 
criteria established by the law are not fulfilled; 
- To prohibit the import of endangered speci es of wild flora and fauna prohibited by 
international conventions and to send them  back to the country of exportation;  WT/ACC/CGR/3 
 Page 69 
 
 
 - To prohibit import of genetically modified or ganisms if they do not fulfil the conditions 
established in international conve ntions, and to send them back to the country of exportation; 
- To prohibit import of technologies and biotechnologies that can endanger the environment; 
- To prohibit import of products, semi-finished products and raw materials that can endanger 
the environment, and send them back to the country of exportation; 
- To prohibit import and transit of waste, if it is not conducted according to the prescribed 
conditions, and send them back to the country of exportation; and 
- To prohibit export of the waste if it is not conducted according to the prescribed conditions. 
The ecological inspector must issue a decision in a written act. The decision may be challenged 
through administrative appeal. 
The Law on Environment requires that Montenegro ad just its economic and social development to the 
principles of environmental protection, and ensure  preservation of natural resources and improvement 
of the quality of the environment, with a view to improving the quality of living.   
The Law establishes the Ecological Program which se ts forth the economic, technical, scientific and 
other measures for protection of the environment.  
The Ecological Program particularly sets forth: 
- basic elements and conditions required for pr eservation and protection of the environment; 
- terms for implementation of the most favourab le technical, technological, economic and other 
solutions for optimal environmen tal development and management; 
- terms for the re-use of packaging materials,  collection of secondary raw materials and 
recycling; 
- short-term and long-term measures for prev ention and limitation of the environmental 
pollution; 
- control on the quality of the environment (monito ring), which is considered as the matter of 
the interest for the Republic; 
- reclamation measures as for the presently damaged environment; 
- sequence of the implementation of respective me asures with the effectuation of the deadlines 
set therewith; and 
- sources and amounts of funds required for effectuation of the measures. 
The document "Directions of Development of Monten egro as Ecological State" have been enacted by 
the Government as a strategy for establishing an "eco logical state" by directing economic and social 
development towards the principles of ecologically su stainable development based on, before all, on 
Montenegro's potentials and resources.  
- Hazardous and Other Waste  
In December 1999 the FRY ratified the Basel Convention on Trans-Boundary Movement of 
Hazardous Waste and their Disposal. Montenegro  is bound by and applies this Convention. In 
accordance with the Convention, the import, expor t, or transit of certain hazardous and waste 
materials is subject to prohibitions or licence.  All imported waste subject to licensing is tested at the 
Eco-toxicological laboratory at the expense of import ers.  Fees charged for this testing are fixed. 
Montenegro has included the Annexes VIII and IX of the Basel Convention into the Control List, i.e. 
regulation classifying goods on the import-export basis.   
In addition, Article 28 of the Law on Transport of  Hazardous Substances (FRY OG No.27/90, 45/90, 
24/94, 28/96, 21/99, 44/99, 68/02) pr ohibits the import of hazardous waste of foreign origin for the 
purpose of permanent disposal in Montenegro. WT/ACC/CGR/3 
Page 70  
 
 - Endangered Species of Flora and Fauna
 
In November of 2001, the former FRY ratified the Convention on Internationa l Transit of Endangered 
Species of Wild Flora and Fauna (CITES).  Monten egro, as a member state of the State Union of 
Serbia and Montenegro, observes th e CITES provisions through issuance of import, export, transit or 
re-export licenses by the Ministry for Environmenta l Protection and Urban Planning for endangered 
and protected species. Furthermore, Montenegro includes Annexes of CITES Convention into the 
Control List, regulation that classifies goods upon modes of export and import.  
- Substances Damaging the Ozone Layer  
In 1990 the former FRY ratified the Montreal Protocol on Substances Damaging the Ozone Layer and 
the Vienna Convention on the Protection of the Ozone Layer.  Since the adoption of the Law on the 
Implementation of the Constitutional Charter of the State Union of Serbia and Montenegro (SCG OG 
No. 1/03), import licenses for all the chemicals listed under the Montreal Protocol have been issued 
by the Ministry for Environmental Protection and Urban Planning.  Montenegro has included Annexes from the Montreal Protocol, as well as additional amendments, in to the Control list. 
- Sources of Ionizing Radiation
 
According to the Law on Protection from Ionizing Radiation (FRY OG No. 15/95, 28/96, 37/02), a 
licence is required to be issued by the Ministry  of Environmental Protec tion and Urban Planning for 
the circulation of the sources of ionizing radia tion not used for medical purposes and radioactive 
materials.  The Article 21 of the same Law forbids the import of radioactive waste material, as well as 
the processing, warehousing and disposal of foreign-or igin radioactive waste ma terials.  A licence is 
required to be issued by Ministry of Environmen tal Protection and Urban Planning so the sources of 
ionizing radiation could be im ported to free zones and consignation warehouses (Article 22, 
Paragraph 5 of the Law on Prot ection from Ionizing Radiation). 
(i)  Mixing regulations 
There are no mixed regulations in Montenegro. 
(j)  Government-mandated counter-trade and barter 
There is no government mandated counte r-trade and barter in Montenegro. 
(k)  Trade agreements leading to country-specific quotas allocation 
Montenegro is not a party to any such agreemen ts, with exception of the Free Trade Agreements 
signed within the Stability Pact with the countries in  the South East Europe region (please see Section 
VIII for details on FTA's).   
(l)  Government procurement practices 
In August of 2001, Montenegro enacted the Law on Public Procurement (RM OG No. 40/01), which 
requires transparency and equity among suppliers and fights corruption.  The Law precedence over all 
existing provisions on government procurement in  Montenegro.  Key features of the Law include: 
- Eligibility (Article 4): Natural persons, companies or firms shall not be eligible for the award 
of contracts if they are bankrupt or have been  found guilty of certain crimes or other failures; 
and  WT/ACC/CGR/3 
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 - Equality in Participation (Article 5):  All pub lic entities shall take the necessary measures to 
ensure the widest possible participation on equal terms in invitations to offer. 
- Principles for selection  
Goods and works shall be procured by a search for suppliers offering the right quality to meet 
identified needs for the specified qua ntity, at the lowest calculated price and at the right time.  
Solicitation documents shall specify any factors, in addition to price, which will be taken into account 
in evaluating offers, and how such factors will be quantified or otherwise calculated. 
- No unsolicited offer  
Offers can only be received after proper solic itation and due care shall be taken to ensure 
confidentiality of the content of offers. 
- Clarity for equality  
Documents for solicitation shall encourage open co mpetition.  Documents shall set forth detailed 
needs, the place of delivery, the minimum perform ance requirements, the warranty, the maintenance 
requirements as well as any other pe rtinent terms and conditions.   
Procurement Methods/Competition (Article 7):  Th e Law permits a number of methods including:  
(i) shopping, (ii) competitive bidding (limited or open,  local or international), (iii) two stage bidding 
(limited or open, local or international), (iv) open international pre-qualificati on of suppliers for major 
contracts followed by limited competitive bidding, and, (v) permissible standardization of goods 
undertaken in compliance with this Act.  A deta iled description of these methods is provided in 
Annex 15 of document WT/ACC/CGR/3/Add.1. 
The Law does not provide any special privileges or preferences to local goods, goods providers, or 
service suppliers.  Local competitive bidding is cons idered when it is determined that foreign 
companies are not interested or when the project is too small. 
(m)  Regulation of trade in transit 
The Customs Law prescribes the rules applied to trade in transit in Montenegro. Certain rules are also 
prescribed in the Decree on Implementation of the Customs Law (RM OG No. 15/03) and the Decree 
on Fees for Use of Roads for Transit of Goods  across the Territory of Montenegro (RM OG 
No. 33/03).  
Under the Foreign Trade Law, transit may be prohib ited for certain goods if trade in such goods is 
banned under the legislation of the Republic.  
Also, the Government may ban imports, temporary impor ts or transit of goods if circulation of such 
goods is banned under the legislation of the country of  export, of origin, or of destination of such 
goods.   
Articles 19 and 20 of the Foreign Trade Law prescr ibe the conditions under which it is possible to 
require licenses for the transit of goods.  The Gove rnment may require licenses for the Import, Export, 
or Transit of certain goods based on objective and rati onal criteria, conditions and procedures, when it 
is necessary to:  
- protect human, animal or plant life or health;  
- protect national security; WT/ACC/CGR/3 
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 - protect environment or exhaustible natural resources; 
- protect public morals; 
- protect intellectual property rights; or 
- enforce any special rules related to gold and silver. 
Under Article 29 of the Foreign Trade Law, transit (and import and export) of animals, plants, animal 
and plant products and other goods that may carry or transmit pests and disease that may endanger the 
health of humans and animals, may be prohibited from specific countries or territories thereof based 
on international recommendations and guidelines, ava ilable scientific evidence and the animal and 
plant health status of such countries or territories.   Transit of goods, as well and import and export, is 
subject to relevant veterinary, sanitary and phytosan itary requirements prescribed for particular type 
of goods.  Please see IV. 3.(c) for details on san itary, phytosanitary and veterinary measures.  
4.  Policies affecting foreign trade in agricultural products 
(a)  Imports 
Customs duties are the main type of border prot ection for agricultural products. For more details 
about customs duties please see Annex 1 of document WT/ACC/CGR/3/Add.1.  In addition to 
customs duties, Montenegro maintains other duti es and a number of border measures on the import of 
main agricultural products. 
A summary of trade measures applied on imported agri cultural goods is provided in the Table IV. 4. 
below.  For more details, please see the trad e measures outlined in Annex 11 of document 
WT/ACC/CGR/3/Add.1.  
Table IV. 4 - Summary of Trade Measures Applied on Imported Agricultural Goods
 
Measures Chapters 
Licensing 2 items under chapters 12 and 13 
Approval 7 items under chapters 13 and 15 
 
The Decree on Special Charges on Importation of Agricultural and Food Products (RM OG No.61/03, 
63/03) imposes special charges on the import of ag ricultural and food products for the purpose of 
protecting production of agricultural and food pro ducts and ensuring market stability taking into 
account prices.  It subjects around 130 agricultural and food products to specific charges (€/kg, €/litre, 
or €/piece).  Please see Annex 10 of document WT/ACC/CGR/3/Add.1 for the list of products subject to these special charges. 
In addition, the Decision on Seasonal Customs Du ties for Import of Certain Agricultural Products 
(RM OG No. 38/00), imposes seasonal customs duties in addition to regular customs duty for 
agricultural products, not exceeding 20 per cent of th e customs value of goods, for a limited period of 
time.  Please see the table below for the list of ag ricultural products subject to these seasonal customs 
duties: 
Table IV. 5 - List of goods on seasonal duty rates regime
 
Tariff no. Tariff  item Description Period 
07.02 07 02. 00 00 00 -Tomato, fresh or chilled from 01.04 to 31.08 
07.04 07 04. 90 00 10 Cabbage, cauliflower, kale and similar 
cabbage eatables vegetable, fresh or chilled --Cabbage from 01.02 to 30.06 
  Lettuce (Lactuca sativa) and chicory    WT/ACC/CGR/3 
 Page 73 
 
 
 Tariff no. Tariff  item Description Period 
07.05 07 05. 11 00 00 (Cichorium spp),fresh or chilled: 
-Lettuce -Cabbage lettuce from 01.11 to 30.05 
07.07 07 07. 00 00 00 Cucumbers and pickles, fresh or chilled   from 01.04 to 30.06 and  
from 01.09 to 30.11 
08.05 08 05. 20 00 00 Agrums, fresh or dry: 
-Tangerines from 01.11 to 31.12 
08.06 08 06. 10 00 00 Grapes, fresh or dry: 
-Fresh from 01.07 to 30.09 
08.07 08 07.11 00 00 Melons, watermelons etc, fresh: 
-Melons, watermelons: --Watermelons from 01.07 to 31.08 
08.09 08 09. 30 
08 09. 30 00 10 Apricots, cherries, sour cherries, peach 
(including nectarines) plums fresh: 
Peach including nectarines: --Peach  from 01.06 to 30.08 
08.10 08 10. 50 00 00 Other fresh fruit: 
-Kiwi from 01.11 to 31.03 
 
Note that sanitary, phytosanitary and veterinary  measures also applied on many agricultural goods. 
For details, please see Section IV.3.(c) above a nd Annex 12 of document WT/ACC/CGR/3/Add.1. 
(b)  Exports 
Montenegro does not apply export subsidies in agriculture. 
(c)  Export prohibitions and restrictions 
A summary of trade measures applied on exported agri cultural goods is provided in Table IV.6 below.  
For more details, please see trade measures outlined in Annex 11 of document 
WT/ACC/CGR/3/Add.1. 
Table IV. 6 - Summary of Trade Measur es Applied on Exported Agricultural Goods  
Measure Chapters 
Licensing 2 items under chapters 12 and 13 
Approval 7 items under chapters 13 and 15 
 
In accordance with the provisions of the Article 29 of the Foreign Trade Law, export of animals, plants, animal and plant products and other goods that may carry or transmit pests and disease that 
may endanger the health of humans and animals,  may be prohibited from specific countries or 
territories thereof based on international recomme ndations and guidelines, available scientific 
evidence and the animal and plant health status of su ch countries or territories relative to that of the 
Republic of Montenegro. 
(d)  Export credits, export credit guarantees or insurance programmes 
There are no any export credits, export credit guarant ees or insurance programs apply in Montenegro. 
(e)  Internal policies 
The Government and the Ministry of Agricultu re, Forestry and Water Management carry out 
agriculture policy.  Agriculture policy is directed with following goals: WT/ACC/CGR/3 
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 - providing food safety, including satisfying needs of domestic population the demands of 
tourists in Montenegro; 
- exporting specific domestic products (early ve getables, meat of the lamb, njeguški smoked 
ham, cheeses, wine, fish, honey, medicinal he rbs and forest products and other products); 
- supporting entrepreneurship and private initiative; 
- improving competitiveness of food producers on, both, domestic and international markets; 
- balancing regional developmen t and creating better conditions  for life in villages; and 
- including agriculture in regional, Europ ean and international integration process. 
The Government's Agro-budget for 2004 planned €9.2 Million for programs in cattle raising, 
horticulture, apiculture, fishing, veterinary services and for programs of general importance. For more 
details about these programs, pl ease see the following table: 
Table IV. 7 - Agro-budget for 2004 schedule
 
 Programs Amount  ( €) Shares (%) 
 Cattle Raising 1,520,000 16.52 
1. Activities of the Dairy Laboratory 42,000 0.46 
2. Activities of Livestock Selection Service 160,000 1.74 
3. Regional Exhibitions of Livestock Breeding 40,000 0.43 
4. Premiums for raising of quality breeding animals-bulls, heifers and 
stallions 140,000 1.52 
5. Development of cattle raising in less favourable areas - outside milk 
purchase zone 280,000 3.04 
6. Support to commodity production in milk purchase zone 60,000 0.65 
7. Development of sheep and goat raising 418,000 4.54 
8. Support to weight gain through grazing of young steers 48,000 0.52 
9. Artificial insemination of cows and sows 312,000 3.39 
10. Preserving genetic resources in cattle raising 20,000 0.22 
 Veterinary services 914,325 9.94 
11. Monitoring epizoology and diagnostic testing of diseases and deaths of 
animals where contagious diseases are suspected 36,500 0.40 
12. Controlling and eradication of tuberculosis in animals 174,980 1.90 
13. Controlling and eradicating brucellosis in cattle, sheep, and goats 159,050 1.73 
14. Controlling and eradicating enzootic leucosis in cattle 31,250 0.34 
15. Diagnostic examination of mastitis in cows 22,300 0.24 
16. Controlling and eradicating hog cholera 126,090 1.37 
17. Preventing and eradicating of rabies in dogs and cats, and, depending on 
the epizoologic situation, in other domestic animals, and eradicating 
echinococcus in dogs 202,455 2.20 
18. Prevention and eradicating of anthrax, gas gangrene and para-gas 
gangrene 8,170 0.09 
19. Preventing and eradicating of enzootic miscarriage in sheep 4,380 0.05 
20. Preventing and eradicating of entero -toxemia in sheep and dysentery in 
lambs 1,980 0.02 
21. Prevention and eradication of New Castle disease (poultry) 12,600 0.14 
22. Diagnostics of honeybee diseases and indemnification for elimination 34,570 0.38 
23. Participation in building veterinary laboratory 100,000 1.09 
 Apiculture 57,000 0.62 
25. Expert training of beekeepers 14,000 0.15 
26. Production and purchase of selected queen bees 18,000 0.20 
27. Production of modern types of beehives 9,000 0.10 
28. Production of anti – varroas floor 16,000 0.17 
 Fishing 96,800 1.05 
29. Raising fish population in water flows, accumulations, and lakes 20,000 0.22  WT/ACC/CGR/3 
 Page 75 
 
 
  Programs Amount  ( €) Shares (%) 
30. Drafting fishery grounds for the river lim and plavsko lake 10,700 0.12 
31. Assessing sardine and anchovy stocks in the territorial international 
waters of the Montenegrin seaside shelf 37,000 0.40 
32. Controlling demersal settlements on the Montenegrin seaside shelf  7,000 0.08 
33. Founding repro-centres for production of the autochthonous salmonoid 
species fish fry 12,100 0.13 
34. Support NGO in protect fish stock 10,000 0.11 
 Horticulture  855,000 9.29 
36. Work Counsellor service for plant production 150,000 1.63 
37. Arable land exploitation program fo r hilly and mountainous regions in 
Montenegro 105,000 1.14 
38. Improvement of quality of seed potatoes 85,000 0.92 
39. Enhancement of tobacco  production  150,000 1.63 
40. Preservation of the autochthonous grapevine varieties 35,000 0.38 
41. Development of raspberry cultivation 145,000 1.58 
42. Controlling production seed materials for perennial plants 15,000 0.16 
43. Intensify growing of fig 15,000 0.16 
44. Development of olive cultivation 30,000 0.33 
45. Prognostication of emergence and protection of olive crops from 
Bactrocera (Dacus) oleae 50,000 0.54 
46. Reporting-prognostication services 15,000 0.16 
47. Prevention of pests infestations 15,000 0.16 
48. Meteorological parameters for the requirements of agriculture 10,000 0.11 
49. Control of soil fecundity 25,000 0.27 
50. Formation of the collective plantations of the continental and 
Mediterranean fruit varieties 10,000 0.11 
 Program of general importance 5,756,875 62.57 
51. Realization of foreign aid to the agriculture of Montenegro 200,000 2.17 
52. Construction of the rural infrastructure 700,000 7.61 
53. Improvement of market position of Montenegrin agricultural products 1,800,000 19.57 
54. Development of organic agriculture 120,000 1.30 
55. Reform of the cooperatives and encouragement of other kinds of farmers' 
associations 60,000 0.65 
56. Studies, projects and engagement of experts 60,000 0.65 
57. Support to the workforce potential 100,000 1.09 
58. Equipping the inspection services 20,000 0.22 
59. Old-age pensions for farmers  2,300,000 25.00 
60. Program "Young Farmers" 150,000 1.63 
61. Equipping the educational institutions- secondary schools and the 
Institute laboratory 30,000 0.33 
62. Operation of the Montenegrin Mycology Center 15,000 0.16 
63. Information system in agriculture and creation of land registry 50,000 0.54 
64. Publishing, media, public relations, presentations, procurement of 
publications 50,000 0.54 
65. Funds for assistance and indemnification of losses in agriculture 75,000 0.82 
66. Reserve for unpredicted budget expenditures 26,875 0.29 
 Total 9,200,000 100 
 
Montenegro will provide more details on this subj ect matter in the Accession Document WT/ACC/4.  WT/ACC/CGR/3 
Page 76  
 
 5.  Policies affecting foreign trade in other sectors 
(a)  Textiles regime 
Montenegro does not have special m easures regarding trade in textiles. 
(b)  Policies affecting foreign  trade in other major sectors 
The Republic of Montenegro doesn't apply any polic ies affecting foreign trade in other major sectors 
with exception of the state trading practices for certain goods (please see Annex 6 of document 
WT/ACC/CGR/3/Add.1 for details on state trading).  
V.  TRADE-RELATED INTELLECTUAL PROPERTY REGIME 
1.  General (a)  Intellectual property policy 
Current intellectual property policy in the Republic  of Montenegro is characterized by an ongoing 
effort to harmonize domestic inte llectual property laws with conven tional international law in this 
field, guided by appropriate solutions from comparativ e law.  The leading principle of this effort is 
that the freedom of creation and publication of sci entific and artistic works, scientific discoveries and 
technical inventions, as well as moral and property right s of their creators, shall be respected.  In the 
course of implementation of this policy, the fo llowing authoritative sources are taken into account: 
(1) solutions which in various forms are recommended by the World Intellectual Property 
Organization (WIPO); (2) EU directives to the member states on how to harmonize their regulations in this field; and (3) recommendations of the AIPPI (International Organization of Intellectual 
Property Experts) on how particular intellect ual property matters are to be regulated. 
The State Union is responsible for enactment of substantial intellectual property laws, whereas 
Member States are responsible for th eir implementation and enforcement 
(b)  Responsible agencies for policy formulation and implementation  
The Intellectual Property Office (IPO) is the governmental organization responsible for the 
formulation and implementation of policy in the fiel d of intellectual property.  The Office operates 
within the Union Ministry for Internal Economic Relations, but works closely with the relevant 
agencies of the Government of Montenegro. 
(c)  Membership of international intellect ual property conventions and of regional or 
bilateral agreements 
Ratified international agreements and generally accepted rules have precedence over the legislation of 
the State Union and its member states (A rticle 16 of the Constitutional Charter). 
The former Federal Republic of Yugoslavia, and its  successor Serbia and Montenegro, have ratified 
the following conventions and agreements in the field of intellectual property: 
- Convention Establishing of the World Intell ectual Property Organization (1967) (member 
since 1 October 1973); 
- Paris Convention for the Protection of Industrial Property (1883) (member since 
26 February 1921);  WT/ACC/CGR/3 
 Page 77 
 
 
 - Berne Convention for the Protection of Literary and Artistic Works (1886) (member since 
17 June 1930); 
- Madrid Agreement Concerning the Internationa l Registration of Marks (1891) (member since 
26 February 1921); 
- Protocol relating to the Madrid Agreement Concerning the International Registration of 
Marks  (member since 19 February 1997); 
- Patent Cooperation Treaty (1970) (m ember since 1 February 1997); 
- Hague Agreement Concerning the Internati onal Deposit of Industr ial Designs (1925) 
(member since 30 December 1993); 
- Universal Copyright Convention (1952) (member since 1966); 
- Nice Agreement Concerning the International Classification of Goods and Services for the 
Purposes of the Registration of Mark s (1957) (member since 30 August 1966); 
- Locarno Agreement Establishing an Internationa l Classification for Industrial Designs (1968) 
(member since 16 October 1973); 
- Convention Relating to the Distribution of Progr am-Carrying Signals Transmitted by Satellite 
(1974) (member since 25 August 1979); 
- Budapest Treaty on the International Recogn ition of the Deposit of Microorganisms for the 
Purposes of Patent Procedure  (1977)  (member since 25 February 1994); 
- Trademark Law Treaty (1994) (member since 15 September 1998); 
- Lisbon Agreement for the Protection of Appella tions of Origin and their International 
Registration (1958) (member since 1 June 1999); 
- Madrid Agreement for the Repression of False or Deceptive Indications of Source on Goods 
(1891) (member since 18 May 2000); 
- Nairobi Treaty on the Protection of the Olympic Symbol (1981) (member since 
18 March 2000); 
- Treaty on Intellectual Property in Respect of Inte grated Circuits (1989) (signed, not ratified); 
- International Convention for the Protection of Performers, Producers of Phonograms and 
Broadcasting Organizations  (member since 20 December 2002); 
- Convention for the Protection of Producers of Phonograms Against Unauthorized Duplication 
of their Phonograms (member since 20 December 2002); 
- WIPO Copyright Treaty (member since 20 December 2002); and 
- WIPO Performances and Phonograms Treaty (member since 20 December 2002). 
Montenegro intends to join the International Convent ion for the Protection of New Varieties of Plants 
(UPOV Treaty) as well. 
(d)  Application of national and m. f.n. treatment to foreign nationals 
In accordance with regulations governing the area of intellectual property, applicable in Montenegro, 
foreign nationals have ge nerally accorded treatment no less favourab le than that accorded to nationals 
of Serbia and Montenegro.  Foreign nationals gene rally enjoy the same rights in intellectual property 
matters when so provided under international agre ements, such as the Paris and Berne Conventions, 
or under the principle of reciprocity.   
An exception to the general rule of national treatment  is that the intellectual property laws of Serbia 
and Montenegro require that foreign nationals, dealing with governmental bodies administering 
intellectual property rights, must be represented by re gistered agents or attorneys who are citizens of 
Serbia and Montenegro. 
With respect to most favoured nation treatment, the ge neral rule is that the intellectual property laws 
of Serbia and Montenegro do not extend advantages,  favours, privileges or immunities to nationals of 
some countries without extending those same a dvantages to nationals of other countries.  WT/ACC/CGR/3 
Page 78  
 
 (e)  Fees and taxes  
All fees are in accordance with the FRY Law on Administrative Fees (FRY OG No. 81/94, 85/94, 
61/95, 63/96, 29/97, 12/98, 59/98, 17/99, 44/99 74/99, 73/00, 21/01) applicable as of 1 January 1999. An applicant, who is domestic lega l or natural person pays 10 per ce nt of all fees listed below.  
 
Table V.1 – Patent and Industrial Design Re gistrations and Petty Patent Certifications
 
Service Fee 
(Dinars) 
Filing of application for patent registration or  certification for up to 10 patent claims 
Each additional claim  1,500.00 
150.00 
Filing of application for petty patent registration or certification 1,200.00 
Filing of application for industrial design (i.e., model registration or certification for up to one 
design (model)) Each additional design or model  
1,200.00 
900.00 
Submission of amendments or supplements to application  450.00 
Publication of application information  900.00 
Substantive examination of application materials 3,600.00 
Filing of request to convert application 330.00 
Filing of appeal of final decision by the competent federal body 200.00 
Publication of grant and specifications 58.00 
Filing of objection to registration 6,000.00 
Annual maintenance fee for the patent: 
For the 3rd year from the application filing 
For the 4th year from the application filing For the 5th year from the application filing 
For the 6th year from the application filing 
For the 7th year from the application filing 
For the 8th year from the application filing 
For the 9th year from the application filing For the 10th year from the application filing 
For the 11th year each subsequent year until the expiration of patent   
1,500.00 
1,600.00 1,800.00 
2,400.00 
3,000.00 
3,200.00 
4,500.00 5,500.00 
2,000.00 
Annual maintenance fee for the petty patent: 
For the 3rd year from the application filing For the 4th year from the application filing 
For the 5th year from the application filing 
For the 6th year from the application filing For the 7th year from the application filing 
For the 8th year from the application filing 
For the 9th year from the application filing For the 10th year from the application filing  
1,200.00 1,300.00 
1,500.00 
2,200.00 2,400.00 
2,900.00 
3,600.00 4,400.00 
Filing of application to revoke decision on grant 9,000.00 
Filing of application to annul 9,000.00 
Registration of licence agreement or agreement to transfer rights 800.00 
 
  WT/ACC/CGR/3 
 Page 79 
 
 
 Table V.2 – Trademarks, Service Marks and Geographical Indications  
Service Fee 
Filing of application for registration  
For up to three classes 
Each additional class   
4,500.00 
600 
Fee for collective mark: 
For up to three classes Each additional class  
10,000.00 
2,400.00 
Geographical indication application 2,500.00 
Filing of request for recognition as an authorized user of a geographical indication 7,500.00 
Granting and annual maintenance trademark fee: 
For the first ten years 
For each class of goods and services  
6,000.00 
1,000.00 
Granting and annual maintena nce collective trademark fee 
For the first ten years 
For each class of goods and services  
18,000.00 
1,000.00 
Filing of application to cancel registration or recognition as authorized user 9,000.00 
Registration of licence agreement or agreement to transfer rights 800.00 
 
 
Table V.3 – Copyright and Related Rights  
Service Fee 
Deposit of works and subjects of related rights with the competent federal body 3,000.00 
 
 
Table V.4 – Topography of the Integrated Circuits  
Service Fee 
Registration of topography 5,000.00 
 
 
Table V.5 – Models and Designs  
Service Fee 
Renewal of right of design, i.e. model for a five year period 
For the first design (i.e., model) For the second and each subsequent de sign (i.e., model from the series)  
2,000.00 2,200.00 
 
According to the Article 49 of the Law on Pe rsonal Income Tax (RM OG No. 65/01, 12/02, 37/04), 
the tax on net income originating from the intellectual property rights is 20 per cent.  The article 35 of 
the Law determines the right to recognition of standa rd expenditures to the level of 35 per cent of the 
incomes earned from property and property righ ts, without the need of documenting those 
expenditures. If there is a possibility for real expe nditures to be documented, hence, they are being 
recognized and deducted from the taxable basis. 
Capital profit tax rate (net profit from sale or ot her transfer of intellectual property rights) is 
15 per cent after deduction for resident, while for th e non-resident income tax rates it depends on the 
amount of revenue on which tax is being imposed, and therefore, 0 pe r cent is the tax rate for the 
amount up to €785; 15 per cent for the amount be tween €785 and €2,615; €274 for revenue between WT/ACC/CGR/3 
Page 80  
 
 €2,615 and €4,577 plus 19 per cent for the amount over €2,615 and for revenue over €4,577, tax rate  
is €647 plus 23 per cent for the amount over €4,577.   
2.  Substantive standards of protection, in cluding procedures for the acquisition and 
maintenance of intellectual property rights 
(a)  Copyright and related rights 
The Law on Copyright and Related Rights (RM OG No.61/04) regulates the object and the content of 
copyrights and related rights, the organization for collective realization of copyrights and related 
rights, and sanctions for infringement.  That la w extends copyright protection to any "original 
intellectual creation of the author, expressed in particul ar form, irrespective of its artistic, scientific or 
other value, its purpose, size, contents and manne r of expression, as well as the permissibility of 
public announcement of its contents."   
Property rights in copyrighted material generally l ast for the life of the author, plus seventy years; 
moral rights are perpetual. 
Rights of copyright arise by virtue of the creation of  an original work; no acquisition or maintenance 
procedures are required.  However, the Law provides for optional deposit procedures. 
Related rights recognized under the law are the rights of performers, producers of phonograms, 
producers of videograms, broadcasting or ganizations, and data base producers. 
Property rights of performers last for 50 years as of the day the recording of the performance was 
made public, or as of the day of the recording, for unpublished performances; the moral rights of the performer survive the termination of economic ri ghts. The rights of phonograms and videograms 
producers last for 50 years as of the day the recording was made public, or as of the day of creation, 
for unpublished recordings.  The rights of broadcasti ng organizations last for 20 years as of the first 
broadcast.  The database producer's right lasts for 15 years as of the day of the creation of the database, but if significant modifications to the data base contents are made, this term is extended for 
another 15 years. 
There are no formal acquisition or maintenance re quirements for the protection of related rights. 
However, holders of relate d rights may deposit copies of the subjects of their rights for record keeping 
purposes. 
The Law on Copyright and Related Rights is  available through WT/ACC/CGR/3/Add.2). 
(b)  Trademarks, including service marks 
The Law on Trademarks (SCG OG No. 61/04) regula tes the acquisition and protection of rights in 
trademarks.  That law extends protection to trad emarks and service marks that can be represented 
graphically and that can serve to distinguish th e goods or services of one producer from those of 
another.  A mark may consist of words, sloga ns, letters, numbers, pictures, drawings, colour 
combinations, three-dimensional forms, or a comb ination of such elements, as well as musical phrases 
that can be shown graphically.   
Protection of a trademark is acquired by means of an administrative procedure carried out under the 
authority of the Intellectual Property Office.  Prior use is not a precondition for registration.  The 
procedure is initiated by the submission of an appl ication.  The application, which must include a 
request for registration, the sign for which protecti on is sought, and a list of goods or services to 
which the sign applies, is examined for both fo rmal and substantive compliance with the legal  WT/ACC/CGR/3 
 Page 81 
 
 
 standards for protection.  Additional requirements a pply to applications for registration of collective 
marks. Priority dates for registered marks are set a ccording to filing dates and according to the rules 
of the Paris Convention.  The procedure is subject to fees set out under the law.   
Registered marks are published in the official journal of IPO. Registration is effective for ten years as 
of the application filing date. Validity may be ex tended an unlimited number of times by payment of 
the appropriate fee.  A mark may be cancelled on the basis of non-use under specified circumstances. 
Registration of a mark may be nullified, in whole or in part, if it is established that at the time of the 
decision on the recognition of rights was made, th e legal requirements for recognition were not 
fulfilled. 
The Law on Trademarks is available through document WT/ACC/CGR/3/Add.2. 
(c)  Geographical indications, including appellations of origin 
The Law on Geographical Indicators of Origin (FRY  OG No. 15/95, 35/95, 28/96) differentiates two 
types of geographical indications:  appellations of orig in and indications of source.  An appellation of 
origin is a geographic name of a country, region  or place from which the commodity originates, and 
indicates that the quality and special properties of the product are exclusively or predominantly 
influenced by the geographic environment, including  natural and human factors, and that production, 
processing or finishing take place in the particular d esignated area.  An appellation of origin may also 
consist of a name which is not the official geogra phic name of the country, region or place, but which 
due to long-standing use in trade has become gene rally known as the name of the product originating 
from the area.  An indication of source is a geographi c name used to indicate that a product originates 
from the particular country, region or place named.  A geographical name may not be protected if it 
contravenes the law or morality; violates existing copy rights or industrial property rights; or would 
tend to cause confusion in trade with respect to th e nature, origin, quality, method of production, or 
other characteristics of the product. 
Protection of geographical indica tions and recognition of users of geographical indications are 
acquired through registration with the IPO.  The procedure for the registration of a geographical 
indication is initiated by an appli cation, which can be made only by natural or legal persons producing 
in the indicated geographical region products that are being designated by the name of that geographical area. The application must include a request for registration, data on the geographical 
area, and, in the case of an a pplication for an appellation of origin, a report on the method of 
production and the qualities and characteristics of th e product.  The procedure for recognition as an 
authorized user of a geographical indication is  initiated by submission of an application for 
recognition as an authorized user.  The applica tion must include a request for recognition as an 
authorized user, proof of activity, and the product control certificate if the application relates to an appellation of origin.   
The IPO evaluates both types of applications fo r compliance with both formal and substantive 
requirements of the law.  On the basis of the decision on these issues, the application is either 
accepted and entered in the appropriate register or  rejected.  Approved geographical indications and 
recognitions of authorized users are published in the official journal of the IPO. 
The protection period for a registered geographical indication is not limited.  The right to use a 
geographical indication lasts for five years as of th e date of entry of the authorized user in the 
appropriate register and, upon the application made  by the authorized user, may be extended an 
unlimited number of times. 
The registration of a geographical indication or the re cognition of an authorized user of a geographical 
indication may be nullified if it is established that , at the time the decision was taken, the legal WT/ACC/CGR/3 
Page 82  
 
 requirements for registration or recognition were  not satisfied.  The decision to recognize an 
authorized user may be revoked if it is establishe d that the conditions for recognition have ceased to 
exist. 
The Law on Geographical Indications is ava ilable through document WT/ACC/CGR/3/Add.2. 
(d)  Industrial designs 
The Law on Legal Protection of Design (SCG OG No . 61/04) provides protection of rights with 
respect to the appearance of a product, i.e. the complete visual impression that the product makes on 
an informed consumer or user. The design is de fined as a three-dimensional or two-dimensional 
appearance of the entire product or a part thereof, defined by its features, in particular the lines, 
contours, colours, shape, texture and materials of the product itself or its ornamentation, as well as 
their combination. 
A design is protected by an exclusive right (design right) if it is new and has an individual character. 
The procedure for the registration of a design is initiated by an application filed with IPO.  A 
registered design is protected for a period of 25 year s as of the filing date of the application, provided 
the prescribed fees for maintaining the right are paid. 
The right-holder receives a certificate of registration and the particulars of the registered design are 
published in the official journal of the IPO. 
The registration of a design or model may be nullified if  it is established that, on the filing date of the 
application, the applicable requirements for the registration were not fulfilled. 
The Law on Legal Protection of Design is ava ilable through document WT/ACC/CGR/3/Add.2.  
(e)  Patents 
The Law on Patents (SCG OG 32/2004) protects inven tions under patent and pe tty patent regimes. 
Patents protect inventions that "represent a new tech nical solution to a specific problem," that involve 
"an inventive step," and that are "susceptible of industrial applica tion."  A petty patent protects an 
invention involving a lesser inventive level. 
Legal protection for inventions is  acquired through an administrative procedure managed by the IPO. 
The procedure for patent protection is initiated by th e filing of an application, which must contain a 
request for the recognition of a patent; a description of the invention; one or more claims for the 
protection of an invention by a patent or petty pa tent; any drawings referred to in the description or 
claims; and an abstract.  The payment of a filing fee must accompany the application. 
Priority rights are established according to filing date or, if applicable, according to the priority rules 
set out in the Paris Convention.   
After a formal examination of the application, the IPO proceeds to the substant ive examination.  If the 
subject matter of a patent application qualifies for protection, the IPO publishes the patent application 
in its official journal.   
After receiving the fee for the substantive evaluation of the patent application, the IPO examines the 
application for fulfilment of all s ubstantive requirements for the patent protection, renders a decision, 
and causes the patent to be published, if appropriate.  WT/ACC/CGR/3 
 Page 83 
 
 
 A petty patent application is subjected only to a form al examination.  Petty patent applications are not 
published.  If, on the basis of the formal examinati on, it is established that the application meets the 
formal requirements for protection, the IPO approv es the petty patent application and publishes it. 
Patent duration is 20 years as of the application filing date and is not extendable.  A petty patent has a 
duration of six years as of the application filing da te and is extendable, two times by two years.  The 
maintenance of rights is subject to payment of periodic fees. 
At any time during the term of a patent or petty pa tent, protection is subject to nullification if it is 
established that at the time of the grant of rights, the requirements for protection were not met, or the 
extent of the rights granted was broader than ju stified by the description of the invention.   
For further details please see the attached the Law on Patents. (f)  Plant variety protection 
In accordance with provisions of the Law on Pate nts, plant varieties and essentially biological 
procedures for plant production are excluded from pa tent protection. Plant varieties are protected 
under a plant breeder's rights system under the Law on Protection of Varieties of Agricultural and Forest Plants (FRY OG 28/2000).  Subject matter that can be protected under the Law on Protection 
of Varieties of Agricultural and Forest Plants ar e plant varieties which are new, distinct, uniform, 
stable, and which meet the requirements fo r denomination as protected varieties.   
The protection procedure for plant varieties is initiate d by an application filed by the breeder of the 
variety or, in the case of a foreign variety, by th e breeder or his authorized representative.  The 
application must include documentation on develo ping the new variety; samples of the propagating 
material of the variety for the purpose of evalua tion and preservation; and a certificate that parent 
trees of perennial species of plants of that va riety are grown.  The applicant must choose a 
denomination for the variety, in accord with specifi c rules for denominations.  If the application is 
complete and proper, it is entered in the Register  of Applications. Priority rights are determined 
according to filing dates.  
For the purpose of testing the fulfilment of the requi rements for protection, the variety is evaluated in 
a test field or laboratory, at the applicant's expense.  If testing est ablishes that all legal requirements 
for protection are met, the breeder's right is grante d, appropriate data entered in the Register of 
Protected Varieties, and the information on the variety is published. 
The plant breeder's right lasts for a period of 20 years, except that rights in perennial crops last for 
25 years.  In order to maintain protection, the holder of the breeder's right must pay the maintenance fees, and must maintain the variety or its hereditary components unchanged during the entire 
protection period. 
The breeder's right may terminate prior to the e xpiration of the foregoing periods if the breeder 
renounces his right, or if he fails to pay maintenan ce fees in a timely manner.  Breeder's rights may 
also be nullified at any time if it is established th at protection conditions were  not met, or revoked if 
the right holder fails to maintain the variety. 
Harmonization of this Law with the UPOV Conventi on is ongoing aimed at Montenegro's accession 
to the UPOV. WT/ACC/CGR/3 
Page 84  
 
 (g)  Layout designs of integrated circuits  
The Law on Protection of Topographies of Integrated Circuits (SCG OG No. 61/04) regulates the 
protection of rights with respect to integr ated circuits and topographies thereof.  
Legal protection of topography is acquired through an administrative procedure carried out by IPO. 
Exclusive rights with respect to the protected topogr aphy are established as of:  (a) a filing date of the 
application that meets requirements, or (b) a da te of the first commercial use of the topography 
anywhere in the world, whichever comes earlier. 
Exclusive rights with respect to the protected topogr aphy will cease when the ca lendar year elapses in 
which it will be ten years, starting from the day it was created. 
For further details please see the attached the La w on Protection of Topogr aphies of Integrated 
Circuits. 
(h)  Requirements on undisclosed informatio n, including trade secrets and test data 
Protection of undisclosed information, as a specific  form of intellectual property according to the 
provisions of the TRIPS Article 39 (3), is not regulat ed by special regulations. However, protection of 
business secrets, i.e. data on tests, is regul ated by more special laws, including as well: 
- The Law on Business Companies (RM OG No . 6/02) prescribes in its Article 44 the 
obligation of the members of company's Bo ard of directors to keep business secrets; 
- The Criminal Code (RM OG No. 70/03, 13/04), Article 280, provides criminal-legal 
protection of a business secret defined as data  and documents declared by law, other 
regulation or responsible body's decision made in accordance with law,  to be a business 
secret whose revealing has caused or might  cause consequences harmful to business 
companies or organizations.  Persons reveali ng information, considered to be a business 
secret, to other persons without authorization,  as well as persons gathering such information 
in order to submit it to other persons, will be sentenced to five-year imprisonment. In cases 
when this offence is committed with gain as a motive or when subject matter under discussion 
is top-secret information, offenders might be  even sentenced to ten-year imprisonment; 
- The Law on Plant Protection (RM OG No. 24/98, 26/98) prescribes the obligation of 
organizations engaged in the examining pesticid es to keep data (information), considered by 
an applicant to be a business secret, during a ten year period; and 
- Law on Protection of Topography of Integrated  Circuits (SCG OG No. 62/04) prescribes that 
parts of submitted documents for registrati on of topography, marked as a business secret, 
must not be accessible to third persons without permission or judicial ruling.   
(i)  Any other categories of intellectual property 
The Law on Protection of Competition, which is e xpected to be adopted in the near future, will 
regulate the issue of competition protection in Monten egro.  Text of this La w will be submitted soon 
after its adoption. 
3.  Measures to control abuse of intellectual property rights  
Abuses of intellectual property rights are curta iled through compulsory licensing provisions in 
appropriate laws (e.g., patent and industrial desi gn laws), and through the application of appropriate 
provisions of the Law on Protection of Competition.  WT/ACC/CGR/3 
 Page 85 
 
 
 4.  Enforcement  
(a)  Civil judicial procedures and remedies 
Enforcement of intellectual property rights is governed in a general way by the Law on Civil 
Procedures, (RM OG No. 22/04) and more specifically by the special laws regulating each area of intellectual property. 
The provisions of the Law on Civil Procedures, wh ich apply to proceedings  involving intellectual 
property rights, require written notification regardin g a dispute and protections for evidence and the 
rights of the parties involved, in compliance with  TRIPS Agreement Article 42.  The law further 
provides that the court's preparations for the main hearing on a dispute include preliminary evaluation 
of the claims involved, service of claims on the defendant for the purpose of responding to those 
claims, the setting of a preliminary hearing, and th e scheduling of a main hearing. With respect to 
representation of parties, the law prescribes that the parties may appear on their own behalf or via attorneys, but the court may require a represented part y to appear in court in person for the purpose of 
deposition on the facts concerned.  
Each party must state all facts required to support its claims, offer evidence needed to establish its 
statements, and respond to the statements  and evidence offered by the opposing party. 
With respect to providing evidence that is under control of the op posing party (referenced in TRIPS 
Agreement Article 43) the law allows the Court to compel production of documents or things within a 
given time limit. The party so compelled may not refuse to produce the document or thing, if that party has referred to it as evidence of its claims, or if it is a document or thing which it is obliged to 
produce or show according to the law, or if the doc ument at issue, in view of its contents, is 
considered to be the common property of both parties.  When the party compelled to produce a 
document or thing denies that it is in his possession,  the Court may, for the purpose of establishing of 
this fact, take relevant evidence.  The Court shall, in view of all circumstances, and according to its 
belief, weigh the significance of the refusal to act by the holder of the docu ment or case, against the 
belief of the Court that the party does not have the document. 
The laws regulating specific areas of intellectual property rights (Law on Copyright and Related 
Rights, Patent Law, Trade Mark Law, Law on M odels and Designs, Law on Geographical Indications 
and Law on Integrated Circuit Topography Protecti on), regulate more precisely the legal remedies 
that right holders have at their disposal.  
(b)  Provisional measures 
For the purpose of preventing infringement of intellectual property rights, provisional measures are 
set forth in all laws regulating these rights. 
The Law on Copyrights and Related Rights provides that upon the request of the right holder, which 
shall include credible evidence of imminent or actual infringement, the Court may order the 
provisional measures of seizure or removal from cha nnels of trade of infringing objects, or an 
injunction prohibiting the continuation of actions that could lead to infringement.  Further, on an 
application made by the right holder that is suppor ted by credible evidence of imminent infringement 
of a copyright or related right, or evidence that  pertinent evidence may be destroyed or will be 
impossible to obtain later, the Court may order that the evidence be provided, without a prior hearing given to the entity from which the evidence is bei ng sought.  Likewise, the inspection of the rooms, 
books, documents, databases and other as well as sei zure of records of such documents, and 
examination of witnesses and experts is permitte d.  Provisional measures and the providing of WT/ACC/CGR/3 
Page 86  
 
 evidence may be requested before the formal initia tion of a suit.  An appeal from an order for 
provisional measures does not stay the execution of the decision on the provisional measures. 
Laws regulating other intellectual property issues (t he Patent Law, the Trad emark Law, and the Law 
on Protection of Design) contain similar provisions.  
The Law on Executive Procedures (RM OG No. 23/04) regulates issues relating to provisional 
measures that are not regulated by the intellectual property laws.  
(c)  Administrative procedures and remedies 
Protection of intellectual property rights by the Intellectual Property Office enforces procedures for 
intellectual property rights protection in accord ance with provisions of the Law on General 
Administrative Procedure (FRY OG No. 31/01) 
There is no second-level administrative authority that can review decision of the IPO as first-instance 
authority. However, all decisions of the IPO ca n be appealed before the Court of Serbia and 
Montenegro.   
(d)  Special border measures  
The Customs Law prescribes in the Article 67 that th e Government is in charge of regulating the 
procedure with goods for which there is a founded suspicion that their import might abuse the 
intellectual property rights.  In that sense, the Cu stoms Administration of Montenegro has prepared 
draft Decree on Intellectual Property Protection Measur es carried out by customs services, containing 
specific provisions on border measures whose objective is prevention of import, transit and export of 
counter freight and pirated goods.  This Decree is exp ected to be enacted in the near future.  Text of 
the Decree will be submitted soon after its adoption. 
(e)  Criminal procedures 
Criminal sanctions, including, in some cases, im prisonment, are provided against infringement in 
almost all areas of intellectual property rights, except the protection of right to trademark.  In addition, 
criminal prosecution against copyrights, inventor's ri ghts and related rights, can be carried out after a 
personal complaint is lodged.  In the hitherto pr actice, this kind of protection is considered to 
inadequate.  In order to ensure a full legal pr otection of intellectual property rights analogue to 
modern legal trends, the Governme nt of the Republic of Montenegro has taken measures, among all 
amendments to the Criminal Code which is expected to be adopted in the near future.  Text of the 
amendments made to the Criminal Code w ill be submitted soon af ter its adoption.  
5.  Laws, decrees, regulations and other legal acts relating to intellectual property rights  
a. Laws
 
- Law on Copyright and Related Rights (SCG OG No. 61/04); 
- Law on Patents (SCG OG No. 32/04, 35/04); 
- Trademark Law (SCG OG No. 61/04); 
- Law on Protection of Design (SCG OG No. 61/04); 
- Law on Geographical Indicators of Origin (FRY OG No. 15/95, 35/95, 28/96); 
- Law on Integrated Circuit Topography Protection (SCG OG No. 61/04); 
- Law on Federal Administration Taxes (FRY OG  No. 81/94, 85/94, 61/95, 63/96, 29/97, 
12/98, 59/98, 17/99, 44/99, 74/99, 73/2000, 21/2001, 71/01); 
- Law on Protection of the Agricultural and Forest Plants Variety (FRY OG No. 28/2000);  WT/ACC/CGR/3 
 Page 87 
 
 
 - Company Law (RM OG No. 6/02); 
- Criminal Code of the Republic of Montenegro (RM OG No. 70/03, 13/04); 
- Law on Plant Protection Marketing Agents (FRY OG No. 24/98 and 26/98); 
- The Law on Production and Marketing of Medicines (            ); 
- Law on Cinematography of the Republic of Montenegro (RM OG No. 45/93 and 27/94); 
- Law on Civil Procedure (RM OG No. 22/04); 
- Law on General Administrative Procedure (FRY OG No. 33/97 and 31/01); 
- Law on Executive Procedure (RM OG No. 23/04); 
- Law on Administrative Dispute (FRY OG No. 46/96); and 
- Law on Obligatory Relations (SFRY OG No. 29/78, 39/85 and FRY OG No. 31/93). 
b. Decrees and regulations  
- Decree on Entry in the Register of Representatives kept by the Federal Office for Intellectual 
Property (FRY OG No. 39/95); 
- Regulation on the Manner of Taking Special Li censing Examination for the Persons Acting as 
Representatives in the Procedure for the Protection of Inventions, Trade Marks, Models, 
Samples and Marks of Geographic Origin (FRY OG No. 48/95); 
- Decree on the Patent; i.e., Small Patent Recognition Procedure  (FRY OG No. 7/96); 
- Decree on the Trade Mark Recognition Procedure (FRY OG No. 7/96); 
- Decree on the Model and Design Recognition Procedure (FRY OG No. 7/96); 
- Decree on the Mark of Geographic Origin Estab lishment and Recognition of the Capacity of 
the Authorized User of the Mark of Geographic Origin (FRY OG No. 12/98); 
- Decree on the Integrated Circuit Topography Protection Procedure (FRY OG No. 44/98, 
47/98); and 
- Decree on Records and Deposition of Author's Works and Objects of Related Rights (FRY 
OG No. 50/99). 
6.  Statistical data on applications for and gr ants of intellectual property rights as well as 
any statistical data on their enforcement  
The tables below summarize data kept by the Federal Intellectual Property Office (FIPO) on 
applications for and grants of intellectual pr operty rights. There are no available statistics on 
enforcement of intellectual property rights. 
Table V.6 – FIPO Registered and Deposited Au thor's Works and Objects of Related Rights  
Author's Work Related Rights Year Foreign Domestic Foreign Domestic Total 
2000 - 61 - - 61 
2001 - 178 - - 178 
 
Table V.7 – Patent Applications and Registration at FIPO  
Year Number of patent 
applications Number of registered 
patents Number of small 
patent applications Number of registered 
small patents 
1992 1,125 375 - - 
1993 839 497 - - 
1994 788 674 - - 
1995 814 511 8 - 
1996 714 282 96 54 
1997 513 203 154 90 
1998 618 249 111 93 
1999 723 108 66 67 WT/ACC/CGR/3 
Page 88  
 
 Year Number of patent 
applications Number of registered 
patents Number of small 
patent applications Number of registered 
small patents 
2000 848 3 72 5 
2001 935 42 110 112 
 
 
Table V.8 – Trade Mark Applications  
National Applications Year International 
Applications Foreign Domestic Total 
1992 4,806 823 570 6,199 
1993 3,804 313 477 4,594 
1994 3,309 322 604 4,235 
1995 3,150 424 731 4,305 
1996 3,266 852 872 4,990 
1997 4,634 923 573 6,130 
1998 4,668 866 529 6,063 
1999 4,439 587 310 5,336 
2000 4,726 827 462 6,015 
2001 5,162 893 969 7,054 
 
 
Table V.9 – Registered Trade Marks  
National Applications Year International 
Applications Foreign Domestic Total 
1992 4,627 730 200 5,557 
1993 3,804 288 120 4,212 
1994 3,074 619 255 3,921 
1995 3,150 472 203 3,825 
1996 3,223 435 288 3,946 
1997 4,338 457 290 5,085 
1998 4,340 1,093 551 5,984 
1999 4,128 615 243 4,986 
2000 4,438 189 172 4,799 
2001 4,456 386 279 5,121 
 
 
Table V.10 – Design and Model Applications  
National Applications Year International 
Applications Foreign Domestic Total 
1992  39 170 209 
1993  10 176 186 
1994 304 9 116 429 
1995 451 4 164 619 
1996 573 16 179 768 
1997 754 29 148 931 
1998 810 12 119 941 
1999 825 13 141 979 
2000 913 11 99 1,023 
2001 933 29 132 1,094  WT/ACC/CGR/3 
 Page 89 
 
 
  
Table V.11 – Registered Designs and Models  
National Applications Year International 
Applications Foreign Domestic Total 
1992  16 80 96 
1993  12 46 58 
1994 304 22 35 361 
1995 451 6 44 511 
1996 573 28 58 659 
1997 754 6 64 824 
1998 810 19 110 939 
1999 825 1 23 849 
2000 913 5 14 932 
2001 933 18 66 1,017 
 
 
VI.  TRADE-RELATED SERVICES REGIME 
1.  General The Republic of Montenegro has traditionally been a net exporter of services, mainly because of the 
tourism and transport sectors.  
Over the past ten years, Montenegro has run a considerable trade deficit in goods, accompanied 
however, by a slight surplus on the services balance.  Dramatic variations in the volume of trade in 
services came as a consequence of the recent reform po licies.  The volume of exports and imports of 
services almost doubled in last few years compar ed with previous period.  See the following 
Table VI.1 presents the details: 
Table VI.1 – Trade in Serv ices, 2002-2003 (US$ thousands)
 
 2002 2003 Index Difference 
Transportation Revenues 30,297 39,753 131.2 9,456 
Transportation Expenditures  20,830 29,485 141.6 8,655 
Transportation services balance   9,467 10,268 108.5 801 
Revenues from Tourism   117,474 154,161 131.2 36,687 
Expenditures in Tourism   7,573 11,496 151.8 3,923 
Tourism balance 109,901 142,665 129.8 32,764 
Revenues from Financial services   2,540 3,219 126.7 679 
Expenditures in Financial services 3,151 7,623 241.9 4,472 
Financial services balance -611 -4,404   -3,793 
Revenues from other services  12,061 20,002 165.8 7,941 
Expenditures in other services 37,003 41,947 113.4 4,944 
Balance of other services -24,942 -21,945 88.0 2,997 
Revenues from services 162,372 217,135 133.7 54,763 
Expenditures in services 68,557 90,551 132,1 21,994 
Balance of services 93,815 126,584 134,9 32,769 
Source:  The Central Bank of Montenegro  
The table shows a substantial increase in the tourism services balance, with lesser transport and other 
services, offset by a modest decrease in the financ ial services balance.  The increase in transport WT/ACC/CGR/3 
Page 90  
 
 services balance was mainly due to marine transpor t and aviation, the latter being to some extent 
related to the tourism increase.  The following chart displays this information graphically. 
Chart VI.1.
 
-40,000-20,000020,00040,00060,00080,000100,000120,000140,000160,000
Transport
serv icesTourism
serv icesFinancial
serv icesOther
serv ices2002
2003
 
Montenegro provides national treatment to fo reign persons rendering services in Montenegro, 
provided the foreign service provider is estab lished in accordance with the Law on Foreign 
Investment (RM OG No. 52/00). 
Licensing is not the rule in the legal system of  Montenegro.  In a few cases (including banking, 
insurance, medical and educational services) a licence is required prior to registration.  In general, 
state bodies responsible for issuing licenses for a pa rticular activity are also responsible for its 
supervision.  For any commercial activity, proper registration is required. Companies (legal persons) 
and entrepreneurs are registered at the Commercial Court registry.  Please see the summary in Table VI.2 below and details in Annex 7 of document WT /ACC/CGR/3/Add.1under the respective sectors.     
Non-state bodies (associations) in most cases keep re gisters (list of members) of the individuals 
providing professional services.  In rare instan ces, a non-state body (e.g., the Bar Association, 
Association of Engineers, etc) may have a licensi ng role too.  The lists of main laws, decrees, 
decisions, and other legal instruments affecting trade in services are summarized in Section 5.A. of Annex 2 of document WT/ACC/CGR/3/Add.1. 
2.  Policies Affecting Trade in Services 
(a)  Government departments, agencies, prof essional associations or other bodies with 
authority or a role relevant to the conduct of service activities  
Table VI.2 and Table VI.3 below outline the roles of state and non-state bodies, respectively, with 
regard to regulating the conduct of service activities.  For more specific details regarding the roles of 
state and non-state bodies, please see Anne x 7 of document WT/ACC/CGR/3/Add.1.  WT/ACC/CGR/3 
 Page 91 
 
 
 Table VI.2 – State Bodies with a Regulatory Role in Service Activities  
Body Role 
Central Bank of Montenegro Commercial bank licensing; approval of securities issuance 
and sale of large blocks of commercial bank shares, approval 
of the auditor chosen by the commercial bank. 
Ministry of Education and Science  Licensing authority for secondary schools and universities. 
Ministry of Labor and Social Welfare Issuance of work permits. 
Ministry of Health  Issuance of approval s for compliance with health standards, 
supervision, and inspection. 
Ministry for Tourism Licensing, classification, supervision, and inspection of 
tourism related services. 
Ministry of Maritime Affairs and  
Transportation Licensing of inland transport related services. 
Ministry of Environmental Protection and 
Physical Planning Issuance of permits for fulfilment of environment standards, 
supervision and inspection. 
The Securities Commission Licensing for exchanges and other activities (brokerage, 
dealing, investment management, and underwriting and 
investment consultancy). 
Ministry of Finance Licensing fo r accounting and auditing services. 
Ministry of Agriculture, Forestry and Water 
Supply  Issuance of commercial fishing licenses, approval of hunting 
permits for foreign nationals. 
The Energy Regulatory Agency Issuance of licenses for the Generation, Transmission, 
Distribution, Supply and sale of electricity; for commercial 
transport; warehousing, distribution, sale and shipment of gas, oil and oil derivatives; for market operators, 
transmission and distributive networks 
The Agency for Broad casting Issuance of broadcasting licenses.  
The Agency for Telecommunications Issuan ce of licenses for telecommunications. 
 
 
Table VI.3 – Non-State Bodies with a Regulatory Role in Service Activities  
Body Role 
The Bar Association Licensing (registration) of attorneys. 
The Association of Doctors Registration of medical doctors and dentists. 
The Association of Pharmacists Registration of pharmacists. 
The Association of Engineers Licensing of e ngineers and companies who are involved in 
layout and construction of facilities;  
The Association of Hunters  Registration, issuance of hunting permits for foreign citizens 
The Veterinary Chamber  Licensing  (registration) of veterinarians 
 
(b)  Judicial, arbitral or administrative tri bunals or procedures providing for the review of, 
or remedies in relation to, administrative  decisions affecting trade in services 
Please see Section III.6 above. WT/ACC/CGR/3 
Page 92  
 
 (c)  Provisions, including those in int ernational agreements, concerning qualification 
requirements and procedures, technical sta ndards and licensing and/or registration 
requirements for the supply of services 
- Registration
 
According to the provisions of the Law on Business  Entities  proper registration is required for any 
commercial activity.  All commercial establishments must register with the Central Registry of the 
Commercial Court by submitting a registration statem ent.  They receive a registration certificate, 
which has no legal effect as a business licence. 
Companies (legal persons) and entrepreneurs are regi stered at the commercial court registry. In both 
cases, persons who want to be engaged in future  business have to obtain all necessary operational 
approvals in accordance with specific regulations . However, obtaining of these approvals is not 
precondition for registration.  
The main forms prescribed by the Law on Busi ness Entities through which commercial activities may 
be performed are as follows: 
- the individual entrepreneur; 
- the joint stock company ("JSC"), 
- the limited liability company ("LLC"); 
- the general partnership ("GP"); 
- the limited partnership ("LP"); and 
- foreign companies branch offices. 
Doctors, dentists, pharmacists, attorneys and e ngineers must be members of their respective 
Associations. These Associations are established in  order to improve conditions in the professions. 
Membership for other professionals is not mandatory .  Initial and annual registration fees (the same 
for domestic and foreign nationals) are charged for most of these professions. 
- Licensing  
Most commercial activities in Mont enegro are not subject to licensing. Licensing requirements are 
described in detail in Annex 7 of document WT/ACC/CGR/3/Add.1.  
The following state bodies have licensing authorities:  the Central Bank of Montenegro, the Securities 
Commission, the Ministry of Education and Scien ce, the Ministry for Tourism, the Ministry of 
Maritime Affairs and Transportation, the Ministry  of Environmental Protection and Urban Planning, 
the Ministry of Finance, the Ministry of Agriculture, Forestry and Water Supply.   
Non-state bodies with roles relevant to the conduct of service activities are th e Hunters Association, 
the Bar Association, the Association of Engin eers and the Veterinary Chamber.  Licenses or 
certifications for specializations are issued by th e Doctors Association of Montenegro, the Dentists 
Association of Montenegro, and the Pharmaceu tical Association of Montenegro, which are 
established by the Law on Health Care (RM OG No. 39/ 04) and regulated by the Ministry of Health. 
Licenses for enterprises, as well as authorizations  for engineers in the area of planning and 
constructing, are issued by the Chamber of Engi neers established in accordance with the Law on 
Constructing Objects (RM OG No. 55/00), while the Mi nistry of Environmenta l Protection and Urban 
Planning is the institution responsib le for supervision and control.  WT/ACC/CGR/3 
 Page 93 
 
 
 - Qualification Requirements  
Qualification requirements are imposed for professi onal, financial, health-related, tourism, and 
transport services.  Please see additional details in  Annex 7 under respective sectors. Establishment of 
many services requires premises for practicing the servi ces.  In addition, in some cases it is required 
that individuals may not have been convicted of criminal acts inconsistent with the profession.  
- Technical Standards  
For all commercial activities, services included, fu lfilment of safety, health and environmental 
standards is required.  Inspectors, who are unde r the aegis of the comp etent ministry (health, 
environment, economy) are entitled to inspect prem ises and issue approvals for compliance with 
standards.  However, obtaining of these appr ovals is not a precondition for registration. 
(d)  Provisions governing the existence and op eration of monopolies or exclusive service 
suppliers 
Telekom Montenegro is the leading telecommunications  operator in Montenegro.  It was registered as 
a separate legal entity on 31 December 1998.  Te lecom Montenegro was cr eated from the separation 
of the state owned PTT Montenegro, which provide d postal, telegraphic, and telecommunication 
services.  
The principal telecommunications service providers in Montenegro are Telekom Montenegro, the 
fixed line operator; ProMonte, the first GSM mobile service provider; and Monet, the second GSM mobile service provider.  On 27 December 2000,  the Government of Montenegro passed a new 
telecommunications law in order to provide a clear regulatory framework for Montenegro's 
telecommunications sector.  In accordance with  the Telecommunication Law (RM OG No. 59/00, 
58/02), the Telecommunication agency was establis hed in March 2001 as an independent regulatory 
agency for the telecommunication sector.  The Agen cy is responsible for promoting competition and 
access to networks, issuing licenses to operators and regulating tariffs in accordance with the Law.  
After the Mass Voucher Privatization (MVP) progr am, 49 per cent of the ownership of Telecom 
Montenegro is in the hands of private investors (Privatization Investment Funds and citizens).  The 
Agency of Montenegro for Economic Restructur ing and Foreign Investments announced a public 
tender process for the sale of the remaining Gove rnment-owned shares in Telecom Montenegro. 
(e)  Provisions relating to safeguard measures as they apply to trade in services 
There are no safeguard measures in place or contemplated related to trade in services.  
(f)  Provisions relating to international transf ers and payments for current transactions of 
services 
There are no specific provisions governing international transfers and payments for services. See 
below, paragraph (g). 
(g)  Provisions relating to capital transa ctions affecting the supply of services 
Montenegro uses the EURO as its sole legal tender.  Therefore, there are no restrictions on foreign 
exchange transactions, and no current restricti ons on capital transactions.  The Central Bank is 
currently drafting a new Law on Capital Transactions .  The draft law will be provided to the WTO 
Working Party as soon as possible. WT/ACC/CGR/3 
Page 94  
 
 (h)  Provisions governing the procurement by governmental agencies of services  
The Law on Government Procurement (OG RM No. 40/01) of 14 August 2001, regulates procurement 
by ministries, departments, secretariats, courts , local authorities, government-owned companies, 
entities or firms not financially autonomous and not established under civil and commercial law, and 
any public entity using public funds for procurement.  
Chapter 9 of the Law regulates the procurement of consulting services. Procurement of consulting 
services has to be in accordance with the Terms of Reference, set by the public procurement rules. 
The request for proposals includes the terms of referen ce, the letter of invitation, the instructions to 
suppliers of services and the proposed contract.  The le tter of invitation has to state the intention of the 
public entity to enter into a contract for services, the date and venue for submission of proposals. 
The selection of candidates (short list, comprising of three to seven candidates) is based on 
competence and experience in the area in which th e services are to be delivered. The basic selection 
method is quality and cost-based.  Other selection methods (quality-based selection, selection under a 
fixed budget, single source selection, selection of United Nations Agencies or reputed procurement 
Agents or accredited inspection Agents) must  be performed in accordance with the public 
procurement rules. 
As a rule, contracts on the procurement of consulti ng services are on a lump-sum basis, but may also 
be made as time-based contracts, a retainer or contingency fee contracts, a percentage contract or an indefinite delivery contract.  
Negotiations preceding the contract include discussi ons of the Terms of Reference, the methodology, 
staffing, the public entity's inputs, and special cond itions of the contract.  However, these discussions 
may not substantially alter the origin al Terms of Reference or the terms of the contract, the quality of 
the final services delivered its cost and the relevan ce of the initial evaluation.  After negotiations are 
successfully completed, the contract is signed, and the public entity promptly notifies in writing other 
suppliers of services on the short lis t that they were unsuccessful. 
If the negotiations fail to result in an acceptable c ontract, the public entity terminates the negotiations 
and invites the next highest ra nked supplier for negotiations.  The supplier of services has to be 
informed of the reasons for termination of the ne gotiations.  Once negotiations are commenced with 
the next highest ranked supplier of services, earlier negotiations may not be reopened.  
(i)  Provisions concerning any form of aid, grant, domestic subsidy, tax incentive or 
promotion scheme affecting trade in services 
The Law on Tourism (RM OG No. 32/02, 41/02, 45/02 , 38/03 and 11/04) prescrib es that in order to 
stimulate certain types of tourism, as well as to stimulate domestic and fo reign organized tourist 
circulation, travel agencies, hotels and carriers e ngaged in road, air, rail and maritime transport who 
perform organized transport of passengers may apply fo r subsidy for coverage of part of their costs.  
Procedures and conditions for tour operators and ot her legal entities who intend to apply for subsidies 
for tourism package arrangements, holiday programs, organized group transport and cruises, will be 
prescribed by separate program of subsidies in touris m. The main purpose of subsidies is to facilitate 
creation of Montenegrin tourism product; increase utilization of capacities, to stimulate development of tourism in particular areas, etc.  
The Law on Cinematography (RM OG No. 45/93, 27/94) prescribes that foreign producers wishing to 
make a movie or TV series without a Montenegrin partner must pay a fee of US$3,000 for a movie of  WT/ACC/CGR/3 
 Page 95 
 
 
 regular duration; US$5,000 for a TV series and the fe e for a short film or documentary is US$300 per 
day of shooting.  These fees are intended to support production of domestic films.  
The Law on Environment (RM OG No. 12/96, 55/00) envisages: - Concessions and tax exemption, as well as exem ption from paying other public revenues for 
the utilization of technologies, production, products turnover, whose impact on the 
environment is more favourable than the im pact of related technologies, production and 
products, utilization of renewable sources of ener gy (the Sun, wind, sea waves, biogas, etc.), 
as well as the equipment and devices used in the environmental protection and monitoring; 
- Concessions and tax reduction, as well as reduc tion of other public revenues for producers 
organizing replacement of used and unused devi ces, machines or their parts, products or their 
packing material, caution, or if they in any other organized way reduce the negative impacts 
of their operations on the environment; and 
- Concessions and stimulations for all legal pe rsons engaged in collecting secondary raw 
materials or in production on the basis of seconda ry raw materials (recycling), as well as for 
all those persons using many ways and means in  order to remove secondary raw materials and 
waste from the environment, and by this contributing to its quality improvement. 
Procedures and conditions for acquiring concessions will be regulated by special regulations.   
3.  Market Access and National Treatment 
(a)  Limitations on the number of service suppliers 
There are no limitations or restrictions in this regard in Montenegro. 
However, subject to various pieces of legislation, some of the work activities and/or professions are 
restricted to foreign nationals, including the following:  
- Foreign persons may not establish a company fo r production and/or trade in weapons, or 
establish companies in territory designated as restricted areas, such as the frontier strip or 
national parks). Foreign persons may establish or  invest in such companies with domestic 
persons, but may not have majority ownership. For investment in these companies, foreign 
person need to obtain an approval from the competent ministry. 
- Attorneys must be citizens of Serbia and Mo ntenegro; exceptionally, foreign nationals who 
fulfil the conditions to be an attorney in the stat e of his or her citizenship can be an attorney 
and practice law in Serbia and Montenegro, subject to reciprocity. 
(b)  Limitations on the total value of service transactions or assets 
There are no limitations regarding the total value of service transactions or assets. 
(c)  Limitations on the total number of service operations or on the total quantity of service 
output 
There are no such limitations in Montenegro.  
(d)  Limitations on the total number of natural persons that may be employed in a 
particular service sector 
There are no limitations on the total number of natura l persons that may be employed in a particular 
service sector.  WT/ACC/CGR/3 
Page 96  
 
 (e)  Restrictions on, or requirements of specifi c types of legal entity through which a service 
may be supplied 
Restrictions include: 
- Commercial banks must be formed as joint stoc k companies. Founders of banks must be at 
least two legal or natural persons , either domestic or foreign; 
- Exchanges and companies engaged in brokera ge, dealing, investment management and 
underwriting must be incorporated as joint stoc k companies. Investment consulting may be 
provided by a limited liability company or an individual entrepreneur; and 
- A representative office of a foreign bank is not a legal entity and is restricted to the purpose of 
representing the interests of such bank. 
(f)  Limitations on the participation of foreign capital 
The Foreign Investment Law of RM prescribes no limita tions on the participatio n of foreign capital in 
the services sector.  The only exception to this principle is related to trade in weapons and in restricted 
areas (see above, paragraph:  (a)  There are no provi sions on reciprocity.  Fore ign investments must be 
registered with the Foreign Investment  Agency, for statistical purposes only.  
The Law on Broadcasting prescribes that a foreign person may not own a company that is a public 
broadcaster. 
(g)  Measures providing for less than the trea tment accorded to national services or service 
suppliers 
There are no limitations or restrictions in this rega rd in Montenegro with exception of those explained 
under Section VI. 3. items (a), (e), (f) above. 
4.  Most-Favoured-Nation Treatment 
There are no specific bilateral agreements that  provide MFN treatment in the service sector.  
However, preferences are provided in some instances through agreements on promotion and protection of investments (services included), prov iding either MFN treatment, or a choice between 
MFN and national treatment, whichever is better (pl ease see Tables VI.5 and VI.6).  There are only 
few measures in RM providing fo r less than the MFN treatment accorded to national services or 
service suppliers as it follows:  
The charter road transport licenses are issued subject to reciprocity.  
The Ministry of Transport may authorize the customs authorities to issue a special licence for bilateral 
or transit transport to a foreign carrier who is fro m a country with which there is no signed agreement 
on international freight road transport, subject to reciprocity. 
Working permits may be issued to a foreign person employed subject to reciprocity or international 
agreement, engaged in business entity or its branch  office subject to business cooperation agreement, 
engaged for education activities on national and ethnic minorities' langua ges; to sports professionals; 
and to the husband/wife and children of a forei gn person with a  permanent residence permit. 
Foreign persons operating businesses in Montenegro ma y, subject to reciprocity, own any real estate 
necessary for its business. Foreign persons not invo lved in any business activity may, subject to 
reciprocity, own an apartment or apartment bu ilding in the same manner as any citizen of 
Montenegro.   WT/ACC/CGR/3 
 Page 97 
 
 
 Foreign nationals who fulfil the conditi ons to be an attorney in the st ate of his or her citizenship can 
be an attorney and practice law in Serbia and Montenegro, subject to reciprocity (see Section 
VI.3.(a)).  
The State Union of Serbia and Montenegro is a sing le subject under international law and is a member 
of international, global and regional organizations , the membership of which requires international 
personality. The Republic of Montenegro may become  a member of international organizations for 
which membership does not require international personality.  The State Union is responsible for 
international relations with other states and inte rnational organizations, a nd concludes international 
treaties and agreements.  The member states ma y maintain international relations, conclude 
international agreements and establish missions in ot her states as long as this is not contrary to the 
powers of the State Union or the interests of the other member state.  Agreements signed by the 
former FRY are binding for the Republic of Montenegro, as are agreements signed by the State Union of Serbia and Montenegro.  The list of agreements  that are not specifically services related and that 
govern trade in services indirectly applied in the Republic of Montenegro includes the following: 
 
Table VI.4 – Bilateral Agreements Providing MFN Treatment
 
Country Signed Ratified In Power Published 
Arab Republic of Egypt 03.06.1977 30.03.1978 20.03.1979 SFRY OG- IA No 3/78 
Kingdom of Sweden 10.11.1978 12.10.1979 21.11.1979  SFRY OG No 12/79 
Kingdom of the 
Netherlands 16.02.1976 27.10.1976 01.04.1977 SFRY OG Annex No 49/76  
Ukraine 01.08.1995 29.08.1996 29.08.1996 FRY OG-IA No 4/96 
Republic of Tajikistan 
(Trade) 27.12.1995 27.12.1996 28.01.1997 FRY OG-IA No 6/96 
Republic of Slovakia 
(Trade) 30.01.1996 29.08.1996 12.09.1996 FRY OG-IA No 4/96 
Republic of Bulgaria 
(Trade) 11.12.1995 29.08.1996 12.09.1996 FRY OG-IA No 4/96 
Republic of Belarus 
(Trade)  06.03.1996 29.08.1996 25.01.1997 FRY OG-IA No 4/96 
Republic of Yemen 17.02.1963 04.06.1963 02.11.1963 SFRY OG Annex No 13/63 
Republic of China 18.12.1995   FRY OG-IA No 4/96 
Hungary (Trade) 14.05.1996  14.09.1996 FRY OG-IA No 4/96 
 
 
Table VI.5 – Bilateral Agreements  Providing MFN and National Treatment  
Country Signed Ratified In Power Published 
Republic of Poland  03.09.1996 27.12.1996 23.01.1997 FRY OG-IA No 6/96 
Republic Guinea 22.10.1996 03.03.1998 15.07.1998 FRY OG-IA No 2/98 
DPR Korea 26.08.1998 24.12.1999 14.08.2000 FRY OG-IA No 1/99  
Japan 28.02.1959 28.04.1959 20.07.1959 SFRY OG Annex No 7/59 
Republic of Greece  25.06. 1997 03.03.1998 08.05.19 98 FRY OG-IA No 2/98 
Romania 28.11.1995 29.08.1996 16.05.1997 FRY OG- IA No 4/96  
Republic of Bulgaria 
(PPI) 11.12.1995 29.08.1996 12.09.1996 FRY OG-IA No 4/96 
 FYROM  04.09.1996  22.07.1997 FRY OG-IA No 5/96 
Republic of Slovakia  30.01.1996 29.08.1996 16.07.1998 FRY OG- IA No 4/96 
Republic of Italy  09.05.2001 17.05.2001 FRY OG- IA No 1/01 
Czech Republic 13.10.1997 03.03.1998  29.01.2001 FRY OG-IA No 2/98 WT/ACC/CGR/3 
Page 98  
 
 Country Signed Ratified In Power Published 
Republic of Belarus  06.03.1996 29.08.1996 25.01.1997 FRY OG-IA No 4/96 
Republic of Austria 25.10.1989 18.10.1990 04.11.1990 SFRY OG- IA No 12/90 
FR Germany 10.07.1989 28.06.1990 14.07.1990 SFRY OG- IA No 7/90 
Turkey  22.06.2001 30.06.2001 FRY OG- IA No 4/01 
Zimbabwe 19.10.1996 26.06.1997 04.07.1997 FRY OG-IA No 2/97 
 
Many sector-specific agreements, in particular agre ements in the transport, telecommunications and 
tourism sectors, regulate relations between the Repub lic of Montenegro and other countries, but they 
don't contain provisions that provide service suppliers from these countries MFN and/or national treatment. 
The Republic of Montenegro also applies agreem ents on avoiding double taxation with France, 
Sweden, Belgium, Denmark, Great Britain, Nether lands, Finland, FR Germany, Egypt, China, the 
Philippines, Malaysia, Czech Republic, Italy, Po land, Cyprus, Sri Lanka, Romania, Hungary, the 
Russian Federation, FYROM, Belarus, Bulgaria, and DR Korea. 
VII.   INSTITUTIONAL BASE FOR TRADE AND ECONOMIC RELATIONS WITH 
THIRD COUNTRIES 
International agreements and membership in inte rnational and multilateral or ganizations fall under the 
jurisdiction of the Council of Ministers of Serbia and Montenegro, and are binding on Montenegro as 
a Member State.  However, the Constitutional Char ter also allows member states to become members 
of international organizations for which membership  dos not require interna tional personality.  Also, 
member states may maintain international relations , conclude international agreements and establish 
missions in other states as long as this is not contrary to the powers of the State Union or the interests 
of the other member state (Article 15 of the Constitutional Charter).  Having in mind that the 
Marrakech Agreement doesn't require from the accessi on candidate to have international personality, 
the Republic of Montenegro is completely capable  to accede separately to the WTO and to accept all 
the obligations and responsibilities r esulting from such membership.   
1.  Bilateral or plurilateral agreements relat ing to foreign trade in goods and trade in 
services  
- Trade in Goods
 
Serbia and Montenegro is a signatory to more th an 200 trade-related agreements, as a contracting 
party or as a successor in rights of SFRY and the FRY, with number of countries, including:  Algeria, 
Albania, Angola, Afghanistan, Argentina, Australia , Bahamas, Bulgaria, Benin, Bolivia, Bangladesh, 
Belarus, Belgium, Botswana, Burma, Brazil, Ca mbodia, Canada, Cameroon, Chile, China, Cuba, 
Congo, Colombia, Costa Rica, Croatia, the Czech Re public, Cyprus, Denmark, Ecuador, El Salvador, 
Ethiopia, Egypt, European Union, France, Finla nd, Gabon, Germany, Greece, Great Britain, Guinea, 
Guyana, Guinea-Bissau, Hungary, Iceland, Iran, Iraq, Ireland, Italy, India, Israel, Indonesia, Jamaica, 
Liberia, Japan, Jordan, Kuwait, Lebanon, Libya, Luxemburg, the  FYROM, Madagascar, Malaysia, 
Mali, Malta, Mauritania, Mexico, Mongolia, Morocco , Nepal, Netherlands, Nigeria, Norway, New 
Zealand, Pakistan, Paraguay, Philippines, Poland,  Portugal, the Russian Federation, Rwanda, San 
Marino, Senegal, Spain, the Slovak Republic, Slovenia, Sri Lanka, Sudan, Syria, Sweden, 
Switzerland, Tajikistan, Togo, Thailand, Tunisia,  Turkey, Trinidad and Tobago, Ukraine, United 
States of America, Uruguay, Venezuela, Vietnam, Ye men, and Zaire.  A complete list of countries 
with which the Serbia and Montenegro has bilatera l trade agreements is provided in Table A8.1 in 
Annex 8.  WT/ACC/CGR/3 
 Page 99 
 
 
 These agreements primarily deal with trade in goods and most of them provide MFN treatment. 
Certain exceptions from MFN are: 
- Privileges and advantages granted to neighbourin g countries to facilitate local border trade; 
- Members of customs unions or free trade areas; and 
- Developing countries in accordance with international agreements. 
- Trade in Services  
 - Sector-Specific Agreements  
With regard to services, some of the bilatera l trade and economic agreements include general 
provisions that call for improving and increasing coope ration with regard to trade in services between 
Serbia and Montenegro and other countries.  In addition, Serbia and Montenegro is a signatory (as a contracting party or as a successor in rights of SFR Y and the FRY) to at least 360 sector-specific 
bilateral agreements, including tourism, telecommuni cations, and transport (air, land, rail, river, and 
sea transport) with many countries including Austria,  Afghanistan, Albania, Belarus, Bulgaria, Cyprus 
China, Croatia, Colombia, Egypt, Finland, Fran ce, Greece, Hungary, Italy, Iran, ROM, Malta, 
Mongolia, Morocco, Poland, Portugal, Romania, Ru ssia, Spain, Syria, Switzerland, Tajikistan, 
Tunisia, Turkey, United Kingdom, and the United States of America. 
These agreements contain general provisions on fac ilitating trade in services, without reference to any 
specific preferences. National treatment and MFN tr eatment for services are accorded in many of 
these agreements with certain exceptions (e.g. fr ee trade, customs union, contiguous countries, 
international agreements related to taxation).  A number of these agreements contain reciprocity 
provisions.  Lists of these agreements are provi ded in Annex 8 of document WT/ACC/CGR/3/Add.1 
(Tables A8.4-A8.13).   
 - Double Taxation
 
The State Union of Serbia and Montenegro is a si gnatory (as a contracting party or as a successor in 
rights of SFRY and the FRY) to at least 35 ag reements on avoidance of  double taxation and the 
prevention of fiscal evasion with many countri es including Belgium, Cyprus, Denmark, Egypt, 
France, Finland, Hungary, Italy, Netherlands, Norw ay, Slovenia, Croatia, Malaysia, Russia, Sweden, 
and the United Kingdom.  Please see Table A8.2 in Annex 8 of document WT/ACC/CGR/3/Add.1. 
 - Investment Promotion and Protection  
The State Union of Serbia and Montenegro is a signa tory to at least 55 bilateral agreements connected 
with investment, some of which are Investment Promotion and Protection Ag reements (IPPA), with 
many countries including Austria, Bulgaria, Bela rus, Canada, China, Congo, the Czech Republic, 
Egypt, France, Germany, Greece, India, Indonesia, Italy, Korea, Kuwait, Libya, ROM, Malaysia, the 
Netherlands, Peru, Poland, Romania, the Slovak Re public, Tanzania, Ukraine, and United States of 
America. Please see Table A8.3 in Annex 8 of document WT/ACC/CGR/3/Add.1.  These agreements 
include general provisions on pr omoting and protecting investments, including clauses on profit 
repatriation, access to arbitration and dispute settle ments, fair expropriation rules and compensation of 
losses. Some of these agreements contain MFN provi sions, some others contain national treatment 
provisions, and others contain either MFN or nationa l treatment, whichever is better.  Exceptions from 
the preferences stipulated in these agreemen ts include: customs unions and economic union 
agreements and double taxation agreements. WT/ACC/CGR/3 
Page 100  
 
 2.  Economic integration, customs union and free-trade area agreements 
Neither Serbia and Montenegro nor the Republic of M ontenegro is a member of any Customs Union.   
The Memorandum on Trade Liberalization and Facilita tion, signed 27 June 2001, committed the eight 
SEE countries to establishing a network of 28 bilate ral free trade agreements.  This network is now 
virtually complete, with the State Union having signed and ratified agreements with all seven SEE 
partners. All of these FTAs are accepted by and bi nding on Montenegro, alt hough the agreement with 
Macedonia, applied since 1996, is currently un der review to ensure harmonization with GATT 
Article XXIV and the Memorandum on Trad e Liberalization and Facilitation.   
Serbia and Montenegro is implementing eight free trade agreements.  The free trade agreement with 
the Russian Federation was signed on 28 August 2000 and ratified 9 May 2001.  
A.  Agreement with the Russian Federation
 
The Agreement with the Russian Federation (RF)  includes the following substantive provisions: 
- Gradual elimination of import duties, charges, and other measures of equivalent effect for 
goods originating in the customs territories of both countries (five-year schedule).  No schedule has yet been prepared; 
- Non-discriminatory application of SPS measures; 
- Rules of origin in accordance with  the legislation of the importing country.   General rules of 
origin are applied on the basis of FORM A (G SP-based). Value added should be at least 
50 per cent of the value of the good; 
- Contracting parties shall not allow non-sanc tioned re-export of goods originating in the 
customs territory of the other contracting party that are subject to tariff and non-tariff 
measures; 
- Exceptions from free trade in line with Articles XX and XXI of the GATT 1994; 
- Protection of intellectual property rights accord ing to conventions to which both parties are 
signatories; 
- No restrictions on transfers and payments; 
- Anti-dumping, countervailing, and safeguard measures in accordance with respective WTO 
agreements; and 
- Special procedures for applying protective m easures and measures for balance-of-payments 
measures for limited duration. 
Terms of the agreement are indefinite.  It could, however, be terminated after the expiry of six months 
from the receipt of a written notification of one cont racting party to the other of the intent to cancel 
the agreement. 
B.  Stability Pact Free Trade Agreements 
 
1.  Background In the last decade significant economic and political  reforms in Southeast Europe have taken place. 
The countries of this region have reoriented th eir economic development on the basis of market 
economy  principles. 
Support to this process has been given throug h the Stability Pact for Southeast Europe, SEE 
Cooperation Initiative and SEE Cooperation Process, in  which Serbia and Montenegro participate 
actively.  Under the auspices of the Stability Pact  for Southeast Europe, the ministries of Foreign 
Trade of eight countries in the region signed the Memorandum of Understanding on Trade  WT/ACC/CGR/3 
 Page 101 
 
 
 Liberalization and Facilitation (Memorandum) in Bru ssels, on 27 June 2001.  Please see Table VII.1. 
for signatory countries.  
All free trade agreements are based on GATT 1994 principles.  A network of 28 bilateral agreements on liberalizat ion of trade regime has been established. By the 
end of September 2004, 22 agreements entered into  force, and six others are expected to be 
implemented by the end of year 2004.  The followi ng table shows that Serbia and Montenegro signed 
all seven planned bilateral agreements; that they en tered into force and that the transition period for 
decrease/abolishment of tariffs and non-tariffs barri ers is going to be finished by year 2007.  
 
Table VII. 1 - Countries with which S& M signed and ratified FTA's agreements
 
Country Date of signing Date of entering to force Transition period 
The Republic of Albania 13.11.2003 01.08.2004 by 01.01.2007 
Bosnia and Herzegovina 01.02.2002 01.06.200210 by 01.01.2004 
The Republic of  
Bulgaria 13.11.2003 01.06.2004 by 01.01.2007 
The Republic of Croatia 23.12.2002/14.01.200411 01.07.2004 by 01.01.2007 
The Republic of 
Macedonia 04.09.1996 07.10.1996 No transition period 
The Republic of 
Moldova 13.11.2003 01.09.2004 No transition period 
Romania 22.12.2003 01.07.2004 by 01.01.2007 
 
Based on UN Security Council Resolution No. 12 44, Memorandum on Understanding and current 
status of Kosovo, the activities on involving the UNMIK/Kosovo in the process of liberalization of 
the regional trade were initiated during the year 2004.  The free trade agreement between the UNMIK 
and the Republic of Albania has been signed on 7 June 2003, and implemented from October 2003, 
while the talks between the BIH and Macedonia are unde rway and are expected to be finalized by the 
end of 2004.  
It is expected that the FTA's will liberalize a minimum of 90 per cent of mutual trade during the 
transition period, which is not longer then six years.  In the same time, it is necessary to harmonize regulations with the EU regulations in different ar eas, primarily those related to customs procedure, 
competition rules, tax and banking systems, agri culture and implementation of IP protection in 
accordance with EU and WTO standards.   
A free trade area will be fully established only when  the services sectors become liberalized.  There 
are many obstacles for free trade in services now, particularly in transport, telecommunications, finance and public services.  Therefore, the OECD  experts are engaged within the Stability Pact 
Working Group to prepare a study on liberalization of trade in services.  
Finally, the Memorandum established the obligation of  gradual removal of non-tariff barriers to trade, 
corruption practices, abolishment of restrictiv e visa regime, needless procedures and technical 
barriers, which can be even more serious problem in practice then the tariffs.  
                                                     
 
10  Applied in Montenegro from September 2003. 
11 The Agreement on Changes of the Free Trade Ag reement between the S&M and the Republic of 
Croatia WT/ACC/CGR/3 
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 2.  Common elements and characteristics of the Agreements  
Since the free trade agreements are based on the WTO ru les, the basic principles of all the agreements 
are the obligation to comply with the rule of  non-discrimination, which provides for national 
treatment and customs duties on the principle of most favoured nation treatment.  
The Memorandum stipulates the basic principles that have to be included in each FTA provision, by 
which the contracting parties undertake the following:  
- That they will not in their mutual trade, impos e new export duties or taxes of the same effect 
as of the date of FTA coming into force, and that  they will abolish all export duties or taxes of 
the equal effect as customs duties upon coming into force of the FTA; 
- That import duties and taxes of the same effect should be abolished for at least 90 per cent of 
the mutual trade value of the contracting par ties and tariff items under the HS, to the effect 
that they are abolished for the majority of products upon the FTA coming into force, and progressively for the most sensitive goods in the transitional period not linger than six years; 
- That they will initiate the procedure of abolis hing quantitative restrictions and measure of the 
same effect, particularly of those that do not comply with the WTO rules. If the FTA's 
provide for exemptions from the quantitative r estrictions abolishing, their implementation 
must be selective and limited in time; 
- That they will apply preferential rules of origin; 
- That they will apply transparent and non-di scriminatory measures in the area of public 
procurement, government aid and state monopoly; 
- That they will simplify the customs procedures, primarily at the border crossings; 
- That they will harmonize the methods of collecting statistical trade data; 
- That they will ensure that regulations relating to  the health of plants, animals and people, and 
environmental safety and protection be harmonized  with the rules of the WTO, EU and other 
relevant international institutions; 
- That they will harmonize local tax and banki ng legislation with the EU regulations; 
- That they will implement intellectual property protection in compliance with the EU and 
WTO standards; 
- That they will cooperate on implementation of the standards, technical regulations, 
conformity assessment, testing, metrology and accreditation systems, which have been 
adjusted to the EU and international principles; 
- That they will liberalize trade in services; 
- That they will ensure that the provisions of free trade agreements, which relate to 
implementation of antidumping, countervaili ng and safeguard measures comply with the 
WTO rules; and 
- That they will review the existing free trad e agreements, in order to harmonize them 
completely with the above principles of the Memorandum. 
2.1.  Scope of application  
The free trade agreements include industrial
12 and agriculture products.13  Trade facilities provided for 
in FTA's are different for industrial an agricultural products.  
The basic duty for each products to which gradual fac ilities stipulated in the FTAs are applied is the 
MFN duty applicable on the date of the FTA's coming into force.  
                                                      
12 Term "industrial products" denotes products specified under Chapters 25 to 97 of the HS. 
 13 Term "agriculture products" denotes products specified under Chapters 1 to 24 of the HS. 
  WT/ACC/CGR/3 
 Page 103 
 
 
 In principle, a higher level of liberalization is achieved with the industria l products. Depending on the 
structure of trade with certain country, on averag e 50 per cent to 90 per cent of mutual trade is 
included in the free trade regime. Other products are considered to be sensitiv e and trade liberalization 
with regard to such products is to be carried out ov er a transitional period of not longer than six years.  
Because of the special sensitivity of the agricultural sector, trade benefits for these products are 
mainly restricted.  For trade liberalization of agri culture products are applied models of liberalization 
as it follows:  
- Complete abolishing of customs duties upon the FTA coming into force or during the 
transitional period; 
- Reducing of customs duties upon the FTA coming into force or during the transitional period; 
and 
- Abolishing or reducing customs duties for lim ited product quantities (tariff rate quotas). 
Trade of agricultural products that are not included in any of the above categories, as well as product 
quantities exceeding the levels set by tariff rate quotas, shall be subject to MFN duties.   
It is important to point out that the agreed trad e facilities refer only to prod ucts originating in the 
contracting parties, which is to be proved by presenting the certificate of origin EUR1 or by 
declaration by the exporter.    
Table VII. 2 - Exchange of sensitive agricultural products  
Exchange regime Percentage Duty Decease 
TRQs Country Zero 
Duty14 Zero 
Duty Low 
Duty MFN 
Duty15 When in 
Force 1 Jan 
2005 1 Jan 
2006 1 Jan 
2007 
Albania √ √ - √ 80% 60% 40% 0% 
Bosnia and 
Herzegovina √ - - - 100% - - - 
Bulgaria √ √ √ √ 80% 60% 40% 0% 
Croatia √ √ √ √ 60% 40% 20% 0% 
Macedonia √ - - - 100% - - - 
Moldova √ - √ √ 100%16 - - - 
Romania √ - √ √ 70%17 40% 20% 0% 
 
2.2.  Main characteristics of the agreements 
All free trade agreements provide gradual, phased decr ease of tariffs within a period of 2, 4, 6 or 8 
years, and their final abolition not later than 2007.   Customs free trade regime will be applied for 
90 per cent of the trade flows, and it will be followe d with the abolishment of other non-tariff barriers 
to trade.  Agreements are applied only for goods produced in the si gnatory countries.  
                                                      
14 97 per cent is exported and imported without tariffs 
15 Full duties are paid above the agreed quantities 
16 Except 10 tariff items 
17 Except for few products for bith sides for which the level of decrease of th e tariff rate is 50%. WT/ACC/CGR/3 
Page 104  
 
 2.3.  Specifics of free trade agreements signed by Serbia and Montenegro 
a.  Certificates of Origin  The free trade agreements define the manner of i ssuing and verifying certificates used to prove the 
origin of goods.  Essentially, origin is proved by  submitting the certificate on origin of goods EUR1.  
In addition to the customs services of the two Repub lics of Serbia and of Montenegro, the Office of 
the Customs Administration of Serbia and of the Cu stoms Administration of Montenegro is also in 
place at the level of the State Union to assist in  coordination of customs policy. This Office has 
specific responsibility for the issu ance and control of certificates on origin of goods intended for the 
EU countries.  
The Customs Administration of Montenegro ("CA M") have signed agreements on international 
customs cooperation with several foreign customs services, providing for direct communication 
between customs services, thus enabling improved cooperation and efficiency in carrying out customs 
activities. Pursuant to such agreements, the CAM have submitted to the customs services of the 
countries in the region models of the stamp im prints of the CAM and the address of the body 
responsible for control of the certificate of origin  EUR1.  With respect to goods not intended for EU 
countries, certificates of origin are authenticated by the CAM.  
b.  Quotas  As indicated in Table VII.2, most of the FTAs incl ude Tariff Rate Quotas with repsect to preferential 
treatment of sensitive agricultural products. 
c. Safeguard measures The FTAs provide that temporary safeguards may be introduced, pursuant to WTO standards, 
provided that the other party to the agreement is notified, the safeguard decision is justified, and 
negotiations on gradual libera lization are continued.   
3.  Bilateral agreements  3.1.  The Republic of Albania The Free Trade Agreement between Serbia and Mont enegro and the Republic of Albania was signed 
on 13 November 2003 in Rome.  It came into force on 1 August 2004.   
Under the Agreement, trade in industrial products  is duty free, except for two lists of sensitive 
industrial products, for which a gr adual reduction of duties is provided for in the period from 2004 to 
2007.  On the date the Agreement entered into fo rce, duties on these products were cut to 80 per cent 
of the basic customs duty; as of 1 January 2005, th ey will be further lowered to 60 per cent of the 
basic customs duty, as of 1 January 2006, to 40 per cen t of the basic customs duty, and abolished as of 
1 January 2007.   
For agricultural products, a common list has been ag reed, which contains the products that can be 
traded free of customs duties and other taxes of equal effect as customs duties, and two lists of sensitive products, containing the products traded using concessions in the form of annual duty-free 
quotas.  Trade in these products in excess of the quantities provided in these quotas will be subject to 
normal duties.   WT/ACC/CGR/3 
 Page 105 
 
 
 3.2.  Bosnia and Herzegovina 
The Federal Republic of Yugoslavia signed the Free Trade Agreement with Bosnia and Herzegovina 
(FRY OG "IA" No. 4/02) on 1 February 2002.  This Agreement entered into force in Montenegro on 
1 September 2003.  
Under this Agreement, goods originating in Bosn ia and Herzegovina (with the exception of oil 
derivatives, all types of petrol, diesel and heating oil, protected and used pneumatic tires) are not 
subject to import duties or related fees when im ported into Montenegro. Tariffs and fees for the 
excepted products were reduced to 60 per cent of  the MFN amount upon the Agreement's entering 
into force, to 40 per cent in 2003, and were abolished in 2004.  Similar provisions exist with respect to 
goods of Montenegrin origin imported into Bosnia a nd Herzegovina.  Certificates of origin are issued 
and certified on the EUR1 form.   
All quantitative restrictions on the exports of the signatory countries were abolished when this 
Agreement entered into force, with the exception of:  
- Live animals; 
- Types of cattle, whole big and small cattle hide; 
- Wheat, corn, wheat flour, Soya been, sunflower seeds, sugar, molasses; and 
- These products, when exported to Bosnia and Herzegovina, are subject to the normal export 
regime.   
3.3.  The Republic of Bulgaria Serbia and Montenegro signed the Free Trade Agreement with the Republic of Bulgaria on 
13 November 2003 in Rome.  The Agreement ente red into force on 1 June 2004.  The Agreement 
provides for a symmetrical model of mutual trade.  
The transitional period for the gradual reduction of duties on sensitive industrial products will last to 
1 January 2007.  The customs duties have been or will be cut to: 
- 80 per cent of the basic customs duty at th e day of Agreement entering into force; 
- 60 per cent of the basic customs duty as of 1 January 2005; 
- 40 per cent of the basic customs duty as of 1 January 2006 and 
- 0 per cent as of 1 January 2007. 
The Lists of sensitive products include about 1,6 00 tariff items, 800 for each contracting party.  
Mutual concessions in trade of agricultural products was set out on a reciprocity basis in Annex A of 
the Protocol 1
18 and Annex B19. 
For the most sensitive products, not specified in the above Annexes, and for quantities exceeding 
annual customs quotas, full customs duties and other import levies shall be paid by both contracting 
parties, and these make about 40 per cent of the tariff items.  
3.4.  The FYR Macedonia The Federal Republic of Yugoslavia signed the Tr ade Agreement with the Republic of Macedonia 
(FRY OG "IA" No. 5/96) on 4 September 1996. The Agreement came into force 7 October 1996.   
                                                     
 
18Fully liberalized trade with abolis hed  customs duties without quotas 
19Trade of products for which customs duties have been lowered or abolished within certain annual 
quotas WT/ACC/CGR/3 
Page 106  
 
 An Agreement on Amendments and Modifications of  the Trade Agreement between the Serbia and 
Montenegro and the Republic of Macedonia is being negotiated.  Renegotiation of this Agreement is 
necessary because the original Agreement was signed during the period of sanc tions against Serbia, 
when Serbia and Montenegro couldn't export th eir products. Thus the Agreement provided for 
possibility to export from the Macedonia in Serbia and Montenegro without tariffs and quantitative 
restrictions, but not vice versa.  
Further information on the renegotiation of this  Agreement will be provided when available. 
3.5.  The Republic of Moldova The Free Trade Agreement betw een the Serbia and Montenegro and Moldova was signed on 
13 December 2003 in Rome, and entered into for ce on 1 September 2004.  The Agreement provides 
for the symmetrical model of mutual trade.  
Customs duties for industrial products were abolis hed when the Agreement came into force. Full 
liberalization was agreed for agricultural and f ood products, with the exception of certain products
20 
whose import is subject to symmetrical annual quotas under preferential rates. Imports in excess of these quotas are subject to normal MFN duties.  
3.6.  Romania 
The Free Trade Agreement between Romania a nd Serbia and Montenegro, was signed on 
23 December 2003 in Bucharest and entered into force on 1 July 2004.  The Agreement provides for 
the symmetrical model of mutual trade.  
Trade of industrial products is duty free except for four lists of sensitive i ndustrial products for which 
a gradual reduction of duties has been provided for by 2007, at which time trade in all industrial 
products will be duty free.   
Two longer lists of sensitive industrial products, u nder which tariff rates shall be reduced at a 
somewhat lower pace by the end of the transiti onal period, contain just above 400 commodities.
21   
Two common lists have been agreed for trade in agricultural products. Unde r the first one (Annex A 
to Protocol 2), trade is duty free. The second list (Annex B) covers products for which tariff rate 
quotas have been established. 
3.7.  The Republic of Croatia The Free Trade Agreement with the Republic  of Croatia was signe d on 23 December 2002 in 
Belgrade, and Amendments and Modi fications thereto in Zagreb on 14 January 2004.  The Agreement 
came into force on 1 July 2004.  The Agreement provi des for the symmetrical model of mutual trade.  
The Agreement provides for duty free trade for about 70 per cent of industrial products.  Other 
products are on the sensitive list, for which tariffs w ill be eliminated by 1 January 2007 following an 
annual schedule:  to 60 per cent, 40 per cent, 20 per cent, and 0 per cent of the basic duty.  
With respect to agricultural and food products, the Agreement covers all products specified in 
Chapters 1-24 of the Customs Tariff.  Treatment of import of these products is specified in Protocol 2 
of the Agreement in the form of 3 Annexes.  
                                                     
 
20 Tobacco, cigarettes, wine and alcoholic beverages 
21 223 tariff items on the Serbia and Montenegro list, and 204 tariff items on the Romanian list  WT/ACC/CGR/3 
 Page 107 
 
 
 Annex A contains products on which import duties w ill be abolished graduall y or lowered gradually 
by 2007 on a schedule set out in the Annex. 
Annex B contains products for which the custom s duties shall be lowered within the period until 
2005; i.e., until 2007 in accordance with the schedule set out for each product.  
Annex C establishes tariff rate quotas at either zero or preferential rates for the most sensitive 
products. Imports in excess of the quotas are at norma l MFN rates.  This list includes more than 50 
groups of major products, or approximately 50 pe r cent of tariff lines for agricultural and food 
products.     
4.   Trade with South Eastern Europe countries in the period January-September 2004   The total trade in goods between Montenegro an d the SEE countries in the period from January to 
September 2004 was €60.1 million, a reduction of 7.6 per cent.  Imports were €46.8 million, exports 
were €13.3 million, the ratio of exports to imports wa s 28.5 per cent, and the deficit in trade in goods 
€33.5 million. When compared to the same period in 2003, exports increased by €5.05 million, or 
61.1 per cent.  The largest increase of exports in th e absolute amount was noted in trade with Bosnia 
and Herzegovina, while the largest increase of ex ports by percentage was present in trade with 
Croatia. The decrease in exports was present in trad e with Bulgaria and Macedonia, while there were 
no exports into Moldova.  
Table VII. 3 - Total exports per SEE countries (€ thousand)
 
Jan – Sep  2003 Jan – Sep 2004 2004/2003 Country Amount % Amount % Index 
Albania 972 11.7 1,178 8.8 121.2 
Bosnia and 
Herzegovina 5,545 67.0 8,694 65.2 156.8 
Bulgaria 6 - 33 - 55.0 
Croatia  1,121 13.5 2,942 22.1 262.4 
Macedonia 621 7. 5 468 3.5 75.4 
Moldova - -         -   - -  
Romania 16 - 23 - 143.8 
TOTAL 8,281 100 13,338 100 161.1 
Data source:  Montenegrin Customs Administration 
The largest imports are still from Croatia (€20.4 million), although in the period compared they 
dropped by 32.9 per cent.  The larg est increase in imports (by value)  was registered in trade with 
Bosnia and Herzegovina. 
Table VII. 4 - Total imports per SEE countries (€ thousand)  
Jan – Sep 2003 Jan – Sep 2004 2004/2003 Country Amount % Amount % Index 
Albania 2,077 3.7 1,196 2.5 57.6 
Bosnia and 
Herzegovina 11,932 21.1 15,094 32.2 126.5 
Bulgaria 3,339 5.9 2,384 5.1 71.4 
Croatia  30,367 53.7 20,378 43.5 67.1 
Macedonia 5,827 10.3  3,864 8.2 66.3 
Moldova      -   - 156 0.3 -  WT/ACC/CGR/3 
Page 108  
 
 Jan – Sep 2003 Jan – Sep 2004 2004/2003 Country Amount % Amount % Index 
Romania 2,962 5.2 3,792 8.1 128.0 
TOTAL 56,504 100 46,864 100 82.9 
Data source:  Montenegrin Customs Administration 
4.1.  Republic of Albania  
Albania's share in Montenegrin foreign trade in go ods stands at less than 1 per cent.  The trade 
balance is even, although the level of trade is wa y below actual potential. Exports to Albania are 
mainly food industry waste, wood and wood products , beverages, alcohols and vinegar, and iron and 
steel products; while imports are mainly mineral fuels, oils, fish, crustaceans, molluscs, ceramic 
products, etc. 
Table VII. 5 - Trade in goods with the Republic  of Albania for 9 months in 2004 (€ thousand)  
  Export % Import % 
  TOTAL RM 231,490 100.0 498,083 100.0 
  Albania 1,178 0.51 1,196 0.24 
No Description         
1 Mineral fuels, mineral oils - - 586 49 
2 Fishes, crustaceans, molluscs  - - 133 11.2 
3 Ceramic products  9 0.7 128 10.7 
4 Aluminium and aluminium products  8 0.6 94 7.8 
5 Ships, boats  - - 73 6.1 
6 Coffee, tea, mate tea and spices  - - 40 3.3 
7 Protein substances  - - 21 1.7 
8 Food industry waste  437 37.1 - - 
9 Wood and wood products  176 15.1 16 1.3 
10 Beverages, alcohols and vinegar  97 8.2 2 0.2 
11 Iron and steel products  97 8.2 9 0.7 
12 Grain milling industry products  91 7.7 - - 
13 Salt, sulphur, earth, stone  66 5.6 5 0.4 
14 Products for photographic purposes 34 2.9 - - 
Data source:  Montenegrin Customs Administration 
4.2.  Bosnia and Herzegovina 
Total trade in goods with Bosnia and Herzegovina  for the period from January to September 2004 was 
in the amount of €23.8 million.  Exports from M ontenegro to Bosnia and Herzegovina were 
€8.7 million, or 3.8 per cent of the total for Montenegro in the said period.  Imports were worth €15.1 million, which is 3.0 per cent of total imports.  This  trade in goods had the deficit in the amount of 
€6.4 millions.  
During the last four months of 2003, with th e implementation of the FTA with Bosnia and 
Herzegovina, a large trade deficit was present. Export s were mainly beverages, alcohol and vinegar, 
iron and steel, and hides; while imports were mainly vehicles, boilers, machinery and mechanical devices, and electrical machinery.  WT/ACC/CGR/3 
 Page 109 
 
 
 Table VII. 6 - Trade in goods with Bosnia and Herzegovina for nine months in 2004 (€ thousand)  
  Exports % Imports % 
  Total for Montenegro 231,490 100.0 498,083 100.0 
  Bosnia and Herzegovina 8,694 3.8 15,094 3.0 
No. Description          
1. Vehicles, except for railway vehicles  117 1.4 1,716 11.4 
2. Boilers, machinery and mechanical 
devices  176 2.0 1,598 10.6 
3. Electrical machinery and equipment  506 5.8 1,199 7.9 
4. Paper and cardboard  55 0.6 772 5.1 
5. Iron and steel products  198 2.3 728 4.8 
6. Pharmaceutical pro ducts  92 1.1 585 3.9 
7. Mineral fuels, mineral oils  240 2.8 551 3.7 
8. Plastics and plastic products  119 1.4 533 3.5 
9. Iron and steel  1,631 18.8 523 3.5 
10. Grain milling industry products  -  -  494 3.3 
11. Printed books, newspapers, paintings  -  -  403 2.7 
12. Products from cereals and flour  237 2.7 356 2.4 
13. beverages, alcohols and vinegar  2,217 25.5 -  -  
14. Large and small raw hides  1,434 16.5 -  -  
15. Aluminium and aluminium products 615 7.1 -  -  
Data source:  Montenegrin Customs Administration 
4.3.  Republic of Bulgaria 
Trade with Bulgaria was characterized by almost  symbolic exports and im ports worth €2.4 millions. 
Goods most present in trade were: boilers, machin ery and mechanical devices, electrical machinery 
and parts, glass and glass products.  
Table VII. 7 - Trade in goods with Bulgaria for 9 months in 2004 (€ thousand)  
  Exports % Imports % 
  Total for Montenegro 231,490 100.0 498,083 100.0 
  Bulgaria 33 0.01 2,384 0.48 
1 Boilers, machinery and mechanical 
devices  5 15.5 751 31.5 
2 Electrical machinery and parts  - - 456 19.1 
3 Glass and glass products  - - 208 8.7 
4 Products from cereals and flour - - 176 7.4 
5 Vehicles and parts  - - 158 6.6 
6 Paper and cardboard  - 0.4 157 6.6 
7 Furniture, linen, mattresses  - - 65 2.7 
8 Iron and steel  - - 57 2.4 
9 Inorganic chemical products  - - 54 2.3 
10 Large and small raw hides 25 75.7 - - 
11 Optical, medical instruments  - 0.3 16 0.7 
12 Oil seeds and fruits 1 4.3 - - 
13 Extracts for tanning or dyeing  1 3.2 1 0.1 
14 Various products  - 0.1 - - 
Data source:  Montenegrin Customs Administration WT/ACC/CGR/3 
Page 110  
 
 4.4.  Republic of Macedonia 
Since 1996, when Montenegro started implemen ting the FTA with the Republic of Macedonia, 
Montenegro has experienced a steady deficit in tr ade in goods, as well as the decrease in the total 
volume of trade. 
The first nine months of this year saw the deficit in the amount of €3.4 million.  Total Montenegrin 
exports to Macedonia are only 0.2 per cent of total exports, while imports from Macedonia are 
0.8 per cent of total imports.  The dominant products in trade with Macedonia are iron and steel products and tobacco. 
Table VII. 9 - Trade in goods with Macedonia for nine months in 2004 (€ thousand)
 
  Exports % Imports % 
  Total for Montenegro 231,490 100.0 498,083 100.0 
  Macedonia 46 8 0.2 3, 864 0.8 
No. Description          
1 Iron and steel -  -  439 11.4 
2 iron and steel products  -  -  375 9.7 
3 Tobacco and tobacco substitute  products  87 18.7 256 6.6 
4 Electrical machinery and equipment  - - 254 6.6 
5 Pharmaceuticals products  -  -  232 6.0 
6 Plastics and plastic products  -  -  187 4.8 
7 Products from vegetables, fruits and other plants  14 2.9 154 4.0 
8 Vegetables, roots and edible corms  -   - 151 3.9 
9 Products from stone, mortar, cement, concrete  -  -  148 3.8 
10 Edible fruits, citrus fruits peels  or melon and 
watermelon  18 3.9 138 3.6 
11 Ceramic products  2 0.5 136 3.5 
12 Other finished textile products  -  -  132 3.4 
13 Cocoa and cocoa products  -  -  120 3.1 
14 Various food products  102 21.8 51 1.3 
15 Aluminium and aluminium products  91 19.4 11 0.3 
16 Boilers, machinery and mechanical devices  38 8.2 183 4.7 
17 Wood and wood products, lignite 32 6.8 1 0.0 
Data source:  Montenegrin Customs Administration 
4.5.  Republic of Moldova 
Foreign trade with Moldova is only symbolic. For the period from January to September 2004 the 
only imports were iron and steel , while there were no exports. 
Table VII. 10 - Trade in goods with the Republic of Moldova for nine months in 2004 (€ thousand)  
  Exports % Imports % 
  Total for Montenegro 231,490 100.0 498,083 100.0 
  Moldova - - 155 0.03 
No Description          
1 Iron and steel -  -  155 100 
Data source:  Montenegrin Customs Administration  WT/ACC/CGR/3 
 Page 111 
 
 
 4.6.  Romania 
Foreign trade with Romania suffered from a deficit of €15.1 million.  Total exports and imports in 
trade with Romania are insignificant.  
Most dominant products in foreign trade are vehi cles, their parts and e quipment, machinery and 
mechanical devices, and electrical machinery and equipment.  
Table VII. 11 - Trade in goods with Romania for nine months in 2004 (€ thousand)  
  Exports % Imports % 
 Total for Montenegro 231,490 100.0 498,083 100.0 
 Romania 23 0.01 15,094 0.03 
No Description      
1 Vehicles, their parts and equipment    1,715 11.4 
2 Machinery and mechanical devices  4 17.3 1,598 10.57 
3 Electrical machinery and equipment    1,198 7.9 
4 Furniture, linen, mattresses    1,015 6.72 
5 Paper and cardboard    772 5.14 
6 Pharmaceutical pro ducts   585 3.87 
7 Plastics and plastic products    536 3.57 
8 Iron and steel   523 3.46 
9 Mineral fuels, mineral oils   550.62 3.7 
10 Chemical industry products  19 82.6 105 0.7 
11 Grain milling industry products    493 3.3 
12 Fishes, crustaceans and molluscs    447 2.9 
13 Beverages, alcohols and vinegar  0.03 0.01   
Data source:  Montenegrin Customs Administration 
4.7.  Republic of Croatia  
Foreign trade between Montenegro and Croatia amo unted to €23.3 millions.  There was a deficit in 
the amount of €17.4 millions.  Import from Croatia into Montenegro was at the level of 4.1 per cent of 
total imports in this period, ant the share of exports  in total exports of Montenegro was 1.3 per cent. 
Most dominant products in this trade were:  electr ical machinery and equipm ent, salt, sulphur, earth, 
stone, mortar, etc.  
Table VII. 12 - Trade in goods with Croatia for nine months in 2004 (€ thousand)  
  Exports % Imports % 
  Total for Montenegro 231,490 100.0 498,083 100.0 
  Croatia 2,942 1.3 20,378 4.1 
No. Description       
1 Electrical machinery and equipment  11 0.4 3,990 19.6 
2 Salt, sulfur, earth, stone, mortar  6 0.2 2,294 11.3 
3 Mineral fuels, oils  -  -  2,094 10.3 
4 Boilers, machinery and mechanical devices  34 1.2 1,874 9.2 
5 Various food products   - -  886 4.4 
6 Beverages, alcohols and vinegar  113 3.8 586 2.9 
7 Products from cereals and flour  - - 427 2.1 
8 Tobacco and tobacco substitute  products  -  -  424 2.1 
9 Plastics and plastic products 10 0.3 410 2.0 
10 Milk and milk products  -  -  345 1.7 
11 Iron and steel products  1,309 44.5 -  -  WT/ACC/CGR/3 
Page 112  
 
   Exports % Imports % 
12 Ships, boats and floating constructions  889 30.2 -  -  
13 Edible fruits, citrus fruits or watermelons  248 8.4 -  -  
14 Perfumery and cosmetic products   162 5.5 -  -  
Data source:  Montenegrin Customs Administration 
3.  Labour markets integration agreements 
The State Union of Serbia and Montenegro is a si gnatory to 12 bilateral labour markets integration 
agreements, ten of which are signed with Fran ce, Sweden, Germany, Luxembourg and Belgium. 
These agreements include general provisions on fac ilitating movement of labour between Serbia and 
Montenegro and the aforementioned countries.  The other two bilateral agreements are signed with the 
European Council Reintegration Fund for the purpose of cooperation a nd development between 
Serbia and Montenegro and the member countries of the Fund.  Serbia and Montenegro is acting as a 
joint member of the Fund. Please see the list of a ll these agreements in Table A8.15 in Annex 8 of 
document WT/ACC/CGR/3/Add.1. 
The State Union of Serbia and Montenegro is a member of the International Labour Organization 
(ILO) and has signed over 60 multilateral labour agre ements, all under the auspices of the ILO.  
Please see the list in Annex 8 of document WT/ACC/CGR/3/Add.1. 
4.  Multilateral economic cooperation, membership in the multilateral economic 
organizations, trade-related programmes of other multilateral organizations 
The State Union of Serbia and Montenegro is a member of at least 30 multilateral economic 
organizations.  Please see Annex 8 of document WT/ACC/CGR/3/Add.1.  The Union is also a 
signatory to at least 350 international conventions in the following areas:  trade, customs, economic, 
air transport, rail transport, road transport, sea tr ansport, Danube River transport, tourism, posts, and 
telecommunications.  A list of all these conventions is provided in Tables A8.16-A8.26 in Annex 8 of 
document WT/ACC/CGR/3/Add.1. 
 
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