. /.  WORLD TRADE  
ORGANIZATION   
WT/REG285/2 
16 June 2011  
 
(11-2988) 
Committee on Regional Trade Agreements Original:   English 
  
 
FREE TRADE AGREEMENT BETWEEN THE EUROPEAN UNION AND SERBIA 
(GOODS) 
 
Questions and Replies 
 
 
 The following communication, dated 15 June 2011,  is being circulated at the request of the 
delegations of the European Union and Serbia.  
_______________ 
 
 
Questions from the Delegation of the United States 
Exceptions 
 
1. According to Paragraph 66, the Agreement "permits the use of prohibitions or 
restrictions on imports, exports or goods in tr ansit justified on grounds of public morality, 
public policy or public security." 
 What do Parties to the Agreement understand the term "public policy" to mean in the 
context of this exception?  What types of meas ures taken by a governme nt are not a matter of 
public policy? 
  The concept of the " limitation justified on the grounds of public policy, public security and 
public health " is taken directly from Article 45
1 of the Treaty on the Functioning of the European 
Union, Directive 2004/38/EC the European Par liament and of the Council of 29 April 2004 on the 
right of citizens of the Union and their family me mbers to move and reside freel y within the territory 
of the Member States2) and wide case law in this respect.  
 
 As could be found in the Judgment of the Court 4 December 197 in the case 41-74 Yvonne 
van Duyn vs Home Office the concept of public policy in the cont ext of the Community and where, in 
particular, it is used as a justification for derogating from a fundamental principle of community law, 
must be interpreted strictly, so that its scope ca nnot be determined unilaterally by each Member State 
without being subject to control by the institutions  of the Community.  Nevertheless, the particular 
circumstances justifying recourse to the concept of public policy may vary from one country to 
another and from one period to another, and it is therefore necessary in this matter to allow the 
competent national authorities an area of discre tion within the limits imposed by the Treaty. 
 
                                                      
1 Article 39 of Treaty establishing the European Community or Article 48 of EC Treaty as in the 
Maastricht consolidated the version or Article 48 - EEC Treaty. 
2 Amending Regulation (EEC) No 1612/68 and repealing Directives 64/221/EEC, 68/360/EEC, 
72/194/EEC, 73/148/EEC, 75/34/EEC, 75/35/EEC, 90/364/EEC, 90/365/EEC and 93/96/EEC. WT/REG285/2 
Page 2  
 
   According to the EU law, measures taken on grounds of public policy or public security must 
be based exclusively on the personal conduct of the individual concerned.  For example: previous 
criminal convictions do not in themselves constitu te grounds for the taking of such measures and 
expiry of the identity card used by the person con cerned does not justify expulsion from the territory, 
only the diseases or disabilities listed in the Annex of the directive may justify refusal of entry into a 
territory or refusal to issue a first residence permit. 
  Moreover, according to the Communication
3 on the special measures concerning the 
movement and residence of citizens of the Union wh ich are justified on grounds of public policy, 
public security or public health  Member States are free to determine the scope of these concepts on 
the basis of their national legislation and case law,  but within the framework of Community law.  
However, any measures taken on grounds of public po licy, public security or public health must be 
justified by a real and sufficiently serious threat to  a fundamental interest of society and must be in 
conformity with the European Convention for the Protection of Human Rights and Fundamental 
Freedoms and with the proportionality principle. 
 
2. According to Annex I (paragraph 2 and Table AI.2), at the end of implementation, 
95.1% of Serbia's tariffs will be duty free for imports from the EU.  However, although 100% of non-agricultural goods will be duty free, only 76.5%  of agricultural imports from the EU will be 
duty free under the Agreement. 
 How does Serbia explain the disproportiona te liberalization between the industrial and 
agricultural sectors?   
 Both Parties consider that this Agreement is satisfactory and comprehensive in terms of trade 
coverage.  In particular, Serbia undertook ambiti ous commitments under this Agreement, which have 
been showcased in the Factual Presentation prepar ed by the WTO Secretariat.  As indicated in 
Table II.2 of WT/REG285/1, Serbia committed to lib eralize 95.1% of tariff lines, which represented 
99.2% of Serbia's total imports from the EU during the period 2007-2009.  
 As the Factual Presentation also indicates, the reduced number of tariff lines that will remain 
dutiable after a five year transitional period do fall un der HS Sections I, II, III and IV.  It is important 
to note, though, that the overall average duty fo r imports will be lower than the corresponding MFN 
average.  In view of the reduced number of tari ff lines, and the total share of imports affected 
(according to the WTO Secretariat's calculations, 0. 8% of total imports), we do not agree with the 
characterization of the agreed liberalization being disproportionate.   
 Furthermore, we would like to draw the atten tion to this Agreement's Review Clause, which 
foresees further concessions on agriculture and fish products if Parties considered so necessary, and 
which can be applied by the third year of the entry into force of the Agreement.  
__________  
                                                      
3 COM/99/0372.