RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/ACC/CGR/8 
15 September 2005 
 (05-4041) 
Working Party on the 
Accession of Montenegro Original:   English 
 
 
 
ACCESSION OF MONTENEGRO 
 
Additional Questions and Replies  
 
 
 The following submission, dated 2 September 2005,  is being circulated at the request of the 
Delegation of the Republic of Montenegro.   
_______________ 
  WT/ACC/CGR/8 
 Page i 
 
 
 TABLE OF CONTENTS 
 
- The Law 'On Customs' (RM OG Nos. 7/02, 38/02, 72/02, 21/03, 31/03)...............................1  
- The Decree 'On Implementation of the Customs Law, Rules of Origin and 
Customs Valuation' (RM OG No. 15/03) ..............................................................................10  
- The Law 'On Value Added Tax' (RM OG 65/01, 12/02, 38/02, 72/02, 21/03)....................13  
- The Law 'On Excise Tax' (RM OG 65/01, 12/02).................................................................15  
- The Law 'On Free Zone' (RM OG No. 42/02)......................................................................18  
- The Law On 'Foreign Trad e Law' (RM OG No. 28/04) ......................................................22  
- The Regulation 'On Implementation of the Foreign Trade Law'  (RM OG No. 
52/04)......................................................................................................................... ...............30  
- Law on Copyright and Related Rights of 1 January 2005 (Official Gazette No. 61 
of Serbia and Montenegro of 24 December 2004)................................................................40  
ANNEX 1 ........................................................................................................................ ......................51   WT/ACC/CGR/8 
 Page 1 
 
 
 - The Law "On Customs" (RM OG Nos. 7/02, 38/02, 72/02, 21/03, 31/03) 
Question 1 We have reviewed Montenegro's Customs Law a nd accompanying Decree.  This law and decree 
are an encouraging start to Montenegro's co mpliance with the WTO's customs law.  They 
incorporate many aspects of the WTO obligatio ns but, as described below, still lack some 
critical elements. 
The segment of the Customs Law addressing  valuation does not contain provisions 
implementing the following articles of the WTO Customs Valuation Code:  Article 11 (right to 
appeal to a judicial authority without penalt y), Article 12 (publication of laws, regulation, 
judicial decisions and administrative rulings), a nd Article 16 (importer's right to an explanation 
in writing as to how the customs value was de termined).  Could Montenegro please point out 
other legislation where these provisions may be fo und, or describe how, and when it plans to 
incorporate these provisions into its law?   
We also note that while the Customs Law and the Decree implement some of the Interpretative 
Notes to the Agreement, not all of the Notes are included as is required by Article 14 of the 
WTO Customs Valuation Agreement.  Are the a reas of deficiency implemented elsewhere, and 
if so, where?  If not, could Montenegro desc ribe how, and when it plans to implement the 
remainder of the Interpretative Notes into its Customs Law? 
As we have suggested in the past, Montenegro 's response to the Valuation Questionnaire (Annex 
4 of WT/ACC/1) would be very helpful in identifying if and where the missing requisite valuation provisions are included. 
Answer:
 
Under the legal system of Montenegro some provi sions applicable to customs procedures are not 
contained in the Customs Law only, but could be found in a number of other legal acts, including the 
following: 
Right to appeal to a judicial authority without pe nalty (WTO Customs Valuation Code:  Article 11) is 
granted by the Law on Administrative Dispute (RM OG No. 60/03).  Under Article 3, any person who 
consider his/her right to be violated by the ad ministrative act of any administrative authority, 
including the Customs Administration, has the right to initiate the administrative dispute proceedings 
(request the court review) before the Administrativ e Court or the Supreme Court of Montenegro, as 
the case may be. 
The issue of publication of laws, regulation, judi cial decisions and administrative rulings (WTO 
Customs Valuation Code, Article 12) is addressed in the Constitution of the Republic of Montenegro. 
Under Article 108, paragraph 1 any la w, other regulations or general (l egal) act has to be publicized 
before it becomes effective.  All laws, other regula tions or general (legal) acts are published in the 
Official Gazette of the Republic of Montenegro.  As  a rule, no legal act can be effective before eight 
days expires as of the day of its publication. 
Montenegro believes that the importer's right to an  explanation in writing as to how the customs value 
was determined (WTO Customs Valuation Code, Articl e 16) is covered by Article 11, paragraph 1 of 
the Customs Law, which grants any importer or exporter the right to request the information on 
implementation of customs regulations , free of payment of any charge. WT/ACC/CGR/8 
Page 2  
 
 However, Montenegro will carefully analyse its customs legislation in order to identify any 
deficiencies and amend it as may be necessary in a ti mely manner.  Montenegro agrees that from the 
date of accession, it will not use any customs me asures and/or procedures unl ess they are based on 
laws and regulations that are fully WTO consistent. 
Question 2 
Article 2:  Article 2 provides that "Circulation of goods liable to phytopathological, veterinary 
and other prescribed controls shall be permi tted only via those customs border crossings 
designated for circulation of such goods in accordance with special regulations." 
How many border crossings are designated for circulation of such goods?   Please provide a list of those border crossings.   
Is that list readily available to importers? Answer:
 
At the moment, circulation of goods subject to phytopathological, veterina ry and other prescribed 
controls is allowed via seven border crossings.  These are:  Ilino Brdo, Dra čenovac, Dobrakovo, Bar, 
Kula, Božaj and Debeli Brijeg. The list of these borde r crossings is readily available to importers.  
Question 3 Article 6:  Please confirm that a foreign national or legal person may act as a "representative".   
Answer:
 
Foreign person may act as a representative in the customs procedure only if it is established in 
Montenegro, i.e. registered in the Central Register  maintained by the Commercial Court in Podgorica, 
either as a company or an entrepreneur. 
Question 4 Article 11:  Regarding the fees that may be charged "where special costs are incurred", please 
describe these fees.  Please provide a schedule of such fees. 
Regarding the issuance of "binding information" provided for in this article, is there a time 
frame within which this information must be provided?   
Answer:
 
As a rule, information under Article  11, paragraph 1 is provided fre e of any charge.  Paragraph 2 
provides for the possibility to charge  a fee if the costs have been in curred for the customs authority in 
the process of providing information (analysis,  inspection by a specially appointed expert, 
transportation costs incurred by the return of goods to  the applicant).  Therefore, the fee that may be 
charged should be equal to the amount of actual co sts and the amount is to be determined on the case-
by-case basis.  However, in practice no such fee is being collected.  Time frame for issuance of 
binding information is five days.   WT/ACC/CGR/8 
 Page 3 
 
 
 Question 5 
Article 16:  According to this Article, conf idential information may be communicated if 
regulations permit such communication.  Please provide the Working Party with a copy of the 
relevant regulations.   
Answer:  
There is no specific legal act that regulates the ma tter of confidentiality.  However, all laws that 
regulate any proceedings address the issue in the same  manner.  All information is available to the 
parties to the proceedings only and to no one else.   The administrative authority must make the 
information available only under the explicit writte n court order or for the reasons of national 
security. 
Question 6 Article 19:  Is there a time-frame for how long goods can be in the custody of Customs?   
Does Customs have the authority to retain ownership and sell the goods if the debtor cannot pay 
the debt?   
Does the debtor have the option to find another agent to claim the goods? 
Answer:
 
Article 19 refers to the specific situation where th e court or any other administrative authority have 
seized or detained any goods or vehicles that have  not been previously placed in the appropriate 
customs procedure, i.e. to goods that were introduced  into the customs territory illegally.  Such goods 
or vehicles must be reported to the nearest cust oms office by the authority who seized or detained 
them.  
The goods or vehicles can be in the custody of Cu stoms for as long as it is necessary to finalize the 
procedure that led to the seizing or detention of g oods.  If such procedure ends with the decision to 
return the goods to the person they were seized from, such person can dispose with the goods provided that the customs debt, if any, has been paid, including the option to find another person to claim the goods.  If a procedure ends with the d ecision to forfeit the goods, such goods will be sold 
any proceeds from the sale will be remitted to the state budget. 
The Customs has the authority to retain ownership and sell any goods in their custody if the debtor 
cannot pay the customs debt. 
Question 7 
Article 20:  This article provides for "a uniform rate in the amount of 5 per cent of the customs 
value of goods" in "exceptional cases."  Article VIII of the GATT provides that "fees or charges 
… shall be limited in amount to approximate cost of services rendered and shall not represent 
an indirect protection to domestic production…".  
Is this 5 per cent uniform rate applied in  addition to regular customs duties? 
Please define "exceptional cases". WT/ACC/CGR/8 
Page 4  
 
 Is this uniform rate applied in a preferential manner?  In other words, is the application 
conditioned on the country of origin of the imports? 
Answer:
 
It appears that the meaning of this provision was not understood, most likely due to imprecise 
translation. 
Paragraph 1 of Article 20 sets the ge neral rule that all imported goods shall be subject to payment of 
import duties in accordance with the Law on Custom s Tariffs, which provides for tariff rates for all 
goods based on HS nomenclature. 
Paragraph 2 sets the only exception of this genera l rule which is applicable to non-commercial goods 
brought in the customs territory by the natural pe rson or to goods received by a natural person from 
another natural person from abroad.  Under this ex ception, uniform import duty rate of 5 per cent may 
be applied to such goods, regardless of the tariff ra te that would have been otherwise applicable under 
the Law on Customs Tariffs.  This 5 per cent uniform rate is not applied in addition to regular customs 
duties, but rather instead of such duties.  The uniform rate is not applied in a preferential manner, i.e. 
the application is not conditioned on the country of or igin of the imports, but rather on the status of 
goods and an importer. 
The provision is applicable only to goods  whose value does not exceed € 1,000.00. 
This provision is envisioned as an instrument of facilitation of cross border circulation of non-
commercial goods where natural persons are involved,  by simplified procedure for determining the 
amount of import duties.  
Therefore, provision of Article 20 does not relate in any way to Article VIII of the GATT. Question 8 Article 21:  Does paragraph 2 of this Article suggest that the declarant needs to submit a request 
to receive the preferential rate afforded to the products under a free trade agreement?  Please 
explain the practical consequences of this paragraph. 
Answer:
 
Paragraph 2 provides for the right of the declarant who was not able to prove the applicability of the 
import rate stipulated by the free trade agreemen t at the time the goods were released for free 
circulation, to file the request to exercise such right subsequently (after the release of goods) provided 
that requirements of the free trade agreement have been met.   
Question 9 
Could Montenegro please describe its procedu res (requirements for seeking a determination, 
issuance policy, etc.) for issuing administrative de terminations of origin pursuant to Article 2 of 
the WTO Agreement? 
Could Montenegro please describe its procedures  Mechanisms for administrative and judicial 
review of such determinations? 
Please indicate where in Montenegro's laws or regulations the provisions of Article 2(h) and 
Paragraph 3(d) of Annex II of the WTO Agreement on Rules of Origin are implemented.  WT/ACC/CGR/8 
 Page 5 
 
 
 Answer:  
The Customs Law provides for the general obligation of the customs authorities to provide 
information on implementation of the customs regulat ions to any person that imports or exports goods 
(Article 11).  
Article 12 provides for the obligation of the customs authority to issue binding information on the 
origin of goods upon the request of any interest ed person.  There are no special requirements for 
issuance of the information other than the application in writing.  Binding inform ation is deemed to be 
a decision issued in an administrative procedure and is appealable.   
In the case of importation of particular goods where de termination of the origin is required, customs 
authorities determine the origin of goods pursuant to Articles 23-28 of the Customs Law and 
Articles 13-67 of the Implementing Regulation for th e Customs Law, which provide detailed rules for 
such determination. 
Under Article 7 of the Customs Law all administ rative procedures administered by the customs 
authorities are governed by the Law on General Ad ministrative Procedures, which sets the general 
rule that all administrative decisions are appealab le and/or subject to court review.  In customs 
matters, any determination of the customs authority is appealable to the Ministry of Finance (Article 8 
of the Customs Law) as the second instance authority .  The decision of the second instance authority 
may be subject to judicial review by the Administrative Court in an administrative dispute procedure.    
Provisions of Article 2(h) and Pa ra 3(d) of Annex II of the WTO Agreement on Rules of Origin are 
implemented in Article 8 (3) of the Implementi ng Regulation for the Customs Law, which provides 
that binding information on the rules of origin is to  be issued no later than 60 days as of o filing date, 
provided that all necessary elements have been submitted. 
Question 10 
Article 25:  Article 25, provides, in relevant part, that goods whose production involved more 
than one country shall be deemed to originat e in the country where they underwent their last 
"substantial, economically justifiable processing  resulting in new products or representing a 
crucial stage of manufacture." 
Could clarification be provided as to how this crit erion is elaborated:  tariff shift, value added, 
processing, or other?   
Answer:  
Tariff shift is the basic criterion, but other crite ria, including value added and processing can be used 
too.  For details please see Articles 13-67 of the Implementing Regulation for the Customs Law. 
Montenegro will submit Addendum 7b to the Implem enting Regulation for details on this matter. 
Question 11 
Article 27:  Article 27 mandates that the g overnment shall prescribe detailed criteria for 
determining the origin of goods referred to in Article 25, manner of proving their origin, etc.  We note that this requirement is fundamenta l under the WTO Agreement on Rules of Origin 
("WTO Agreement").  In particular, Article 2 provides that, in cases where the criterion of 
manufacturing or processing operation is prescri bed, the operation that confers origin on the 
good shall be precisely specified by the Member.   WT/ACC/CGR/8 
Page 6  
 
 How will the government provide such inform ation (i.e., decree, regulations, rulings)? 
Is there a timetable for issuance of this guidance? Will the guidance be made publicly available? 
Answer:
 
Detailed provisions on origin of goods, including cr iteria for determining the origin of goods are 
contained in Articles 13-67 of the Implementing Regulation for the Customs Law.  Operations that 
confer origin on the good are provided for in deta il in Addendum 7b to the Implementing Regulation, 
which was made publicly available by publica tion (RM OG No. 15/03).  Montenegro will submit 
Addendum 7b to the Implementing Regul ation for details on this matter. 
Question 12 
Article 28:  Article 28 provides, in pertinent part, that the rules on origin for goods from 
countries to which Montenegro applies preferential  tariff treatment on the basis of its unilateral 
decision shall be determined in a regulation adopted by the government. 
Under what circumstances would Montenegro apply preferential tariff treatment on the basis of 
its unilateral decision? 
Answer:  
Article 28 (2) merely provides the Government with a power to grant preferential treatment 
unilaterally and sets the rules for such treatment.  However, no such treatment has ever been granted 
and is not likely to be granted to any country.  Mo ntenegro would not use this power in violation of 
any WTO agreement. 
Question 13 
Article 30:  Article 30, paragraph 2, item 3 make s reference to Article 37 of the Customs Law.  
Did Montenegro mean to refer instead to Article 38? 
Answer:  
The question most likely refers to paragraph 1, item 3.   It appears that the correct reference should be 
to Article 38.  This error will be corrected. 
Question 14 Article 42:  How is the deposit amount provided for in this article determined?  Is it a portion of 
the total probable debt, or in full?  Are there provisions for a refund if the deposit exceeds that 
of the actual value? 
This article provides that goods "may" be released providing a surety is provided.  Article 13 of 
the Agreement provides that the importer "shall" have the right to withdraw the goods.  We 
recommend that the language in the Customs Law be modified to reflect that the importer 
definitively has the right to withdraw the goods upon payment of a surety.  WT/ACC/CGR/8 
 Page 7 
 
 
 Answer:  
The deposit is determined in the amount equal to the full amount of probable customs debt. 
If the final amount of the customs debt is less th at the deposit, the difference has to be refunded 
without delay. 
The meaning of the word "may" in this context is a linguistic issue.  The meaning of the provision in 
the original language of the legislation is identical  to that of Article 13 of the Customs Valuation 
Agreement.  Importer has a right to withdraw the goods, if the surety has been provided. 
Question 15 
Article 52:  Pursuant to this article, goods "may be examined or samples may be taken in order 
that further customs treatment may be determined or that the goods may be used with the 
customs office permission." 
Please describe "further customs treatment". Please describe what is type of "use" is envisioned by this provision. How many samples may be taken? Are samples taken from each shipment of the same product, or only from the first shipment?   
If appropriate, are the samples returned to th e importer?  Is the importer reimbursed for the 
value of the samples taken if not returned, or returned in unusable form? 
Answer:
 
This is a linguistic issue.  The meaning of th e provision is to describe the situation after the 
presentation of goods to the customs authority.  
After the goods are presented, the customs authority is empowered to inspect the goods and take the 
samples in order to determine the customs approve d treatment or use of goods.  "Customs approved 
treatment or use of goods" means placing the good s in any of customs procedures, including the 
following:  
− warehousing; 
− transit; 
− release for free circulation; 
− inward processing; 
− outward processing; 
− processing under the customs supervision; 
− free zone; and 
− export. 
Number of samples depends on the kind of goods in question.  Samples are not taken from each 
shipment.  The samples are returned if the importer so requests.  The importer is not reimbursed for 
the value of the samples taken if not re turned, or returned in unusable form. WT/ACC/CGR/8 
Page 8  
 
 Question 16 
Article 108:  Regarding the definition in paragr aph 3 of persons to whom "permission" may be 
granted, is this list disjunction or conjunctive?  Pl ease define "established", as used in item 1) of 
paragraph 2. 
Answer:
 
It appears that the question does not refer to Article  108 but rather to Article 103, and therefore the 
answer will relate to Article 103. 
The list of persons to whom "permission" may be granted referred to in pa ragraph 3 is conjunctive, 
i.e. such persons must meet all three requirements listed therein. 
"Established" as used in item 1) of paragraph 3 means registered as an economic operator in the 
Central Register maintained by the Commercial Court in Podgorica.  
Question 17 
Article 115:  Please provide additional informatio n on paragraph 3 of this Article.  Please 
provide information on which goods are referred to here and the specific time periods for such 
goods. 
Answer:  
This Article provides for the power to the Minister of Finance to issue a regulation with respect to 
handling of goods in specific cases.  However, such a regulation has not been issued yet.  
Question 18 
Article 116:  Please provide examples of "s pecial circumstances" under which goods may be 
temporarily removed from the customs warehouse. 
Answer:  
Special circumstances referred to in this Article may include force majeure , as well as presentation of 
goods at an exhibitions or a fair.  
Question 19 
Article 121:  Regarding item 3 under paragraph 2 of this article, please describe how this 
requirement is met in practice, in particular , whether and how the inward processing must 
encourage exports. 
Answer:  
Item 3 under paragraph 2 of this Article, in addition to requirement s referred to in items 1 and 2, 
provide for and "economic requirement" to be met, i.e. requires that the inward processing procedure 
should create more favourable cond itions for export or re-export of compensating products, provided 
that the essential interests of domestic manufacturers of similar or the same products are not adversely 
affected.  Under paragraph 3 the Government is gi ven the power to prescribe the method of verifying 
whether the economic requirements have been met.  However, such a regulation has not been issued 
yet.   WT/ACC/CGR/8 
 Page 9 
 
 
 Question 20 
Article 146:  Paragraph 1 of this article require s a monthly payment equal to 3 per cent of the 
duty that would have been paid had the good s under temporary import ant procedure been 
released for free circulation.  This payment, beca use it is paid every month, appears to be a 
service fee rather than a revenue charge.  Please explain the justification for this payment, and 
clarify its purpose.  
Answer:  
The payment referred to in paragraph 1 is a partial payment of import duty, rather than a service fee. 
The rationale for this provision is the need to make all persons equal with respect to their obligation to 
pay import duties.  
Importers of goods intended to be released for fre e circulation have to pay import duties in full. 
Persons who import goods tempor arily have to pay import duties for such goods in the amount 
proportional to the duration of the temporary importation.  So, each month during the period of temporary importation such persons pay the portion (3  per cent) of an import duty that would have 
been payable on such goods had they been released for free circulation.  
Once the goods are re-exported the obligation to pay partial import duties terminates.  On the other 
hand, the total amount of import duty paid in portions cannot exceed the amount of import duty that would have been payable on such goods had they been released for free circulation.  Therefore, after 
34 months of temporary importation the obligation to  pay partial import duti es terminates, regardless 
of the duration of temporary importation after that. 
Question 21 
Articles 170 and 171:  Article 170, paragraph 4,  provides that "good entering a free zone or 
free warehouse directly by sea, air, or land, … shall be submitted to the customs authorities 
based on the transportation document."  Article 171, paragraph 1, provides that "… the goods entering a free zone or free warehouse need no t be presented to the customs authorities, nor 
need a customs declaration to be lodged."   Please describe those situations in which goods 
entering a free zone or free warehouse must be submitted to the customs authorities, and those 
situations in which this requirement does not apply.   
Answer:
 
Article 170, paragraph 5 (rather th an paragraph 4) identifies the doc ument that has to accompany the 
goods when presented to the customs authority.  Under this provision the goods entering a free zone 
or free warehouse directly by sea, air, or land are presented, if they must to be presented, to the 
customs authorities accompanied by the transportation document only (bill of lading or a like), 
without the need to lodge the customs declaration.  
Article 171, paragraph 1 sets the rule that the goods  entering a free zone or free warehouse need not 
be presented to the customs authorities, nor need a customs declaration be lodged, except in the cases 
referred to in paragraph 2, s ubparagraphs (a), (b) and (c). 
Therefore, the goods entering the free zone or a free warehouse must be presented to customs 
authorities in the cases referred to in paragraph 2, s ubparagraphs (a), (b) and (c) only.  In all other 
cases the goods need not to be presen ted to the customs authorities wh en entering the free zone or a 
free warehouse. WT/ACC/CGR/8 
Page 10  
 
 Question 22 
Article 291:  Please confirm that all customs s ervice fees imposed by the Customs Service of 
Montenegro will conform with the requiremen ts of Article VIII of the GATT.   
Answer:
 
Montenegro confirms that by the time of accessi on to WTO customs service fees will conform with 
the requirements of Article VIII of the GATT. 
 
- The Decree "On Implementation of the Customs Law, Rules of Origin and Customs 
Valuation" (RM OG No. 15/03) 
Question 23 
The Decree "On Implementation of the Customs Law, Rules of Origin and Customs Valuation" 
(RM OG No. 15/03) refers to various Addenda, specifica lly Addenda 3, 4, 5, 6, 7, 8, 9, and 76.  
Could Montenegro please provide copies of  those addenda to the Working Party. 
Article 33 refers to a "FORM A template".  Could Montenegro please provide a copy of this 
document to the Working Party.   
Answer:  
Montenegro will provide copies of the Addenda and the FORM A in a timely manner. 
Question 24 
Article 15:  In Article 15(2), reference is made to "materials with no origin." What is a "material with no origin" for purposes of this decree? 
Answer:
 
Article 15 refers specifically to or igin of textile and textile products  and should be interpreted within 
that context.  
The question asked appears to refer to a linguistic issue.  The phrase "material with no origin" should 
be understood to mean materials of any origin or  materials where the origin was not determined. 
Question 25 
Article 21:  Article 21(1) generally requires that the origin of goods shall be demonstrated by 
presentation of a certificate of origin.  Article 21(2) provides, in pertinent part, that the certificate of non-preferential origin of goods shall be issued by the competent authority or organization duly authorized by the issuing country.   
Could Montenegro provide an example of what would be a competent authority or 
organization?  Must it be a governmental organization?  WT/ACC/CGR/8 
 Page 11 
 
 
 If an imported good does not seek preferential tr eatment, and hence the country of origin does 
not affect the tariff rate, why is a certificate of origin required?  Doesn't such a requirement 
present a barrier to trade? 
Answer:  
The competent authority referred to in Article 21(2) could by any agency or a body responsible for 
issuing certificate of origin under the laws of the i ssuing country.  It does not have to be governmental 
organization.  Examples of what would be a co mpetent authority or organization include customs 
administrations and chambers of commerce. 
This provision merely sets the rules with respect to certificates of origin when and if such certificates 
have to be presented.  It does not make the presen tation of the certificate mandatory.  Furthermore, 
paragraph (4) provides that the Government issues the list of goods that require presentation of the 
certificate of origin when imported.  This clearly indicates that such certificates are not needed under 
usual circumstances, but rather as an exception established by the decision of the Government.  It has to be noted, however, that the Government has ne ver used this power, and therefore requirements 
referred to in Article 21 do not present a barrier to trade.  
Question 26 Article 36:  Article 36 generally provides th e methods of determining origin under the 
preferential rules of origin.  With respect to pr oducts produced in a beneficiary country from 
non-originating materials, Article 36(1)(b) direct s us to Article 38 for explanation of what 
processing or treatment would transform such no n-originating materials into a product of the 
beneficiary country.  Article 38, in turn, directs us to Addendum 76 (not provided) for an 
explanation as to what processing operations would qualify.   
Could Montenegro please provide a copy of Addendum 76 to the Working Party? What processing operations would qualify under Addendum 76? 
Answer:
 
It appears that the reference to Addendum 76 is an  error.  The correct reference is Addendum 7b.  
This Addendum provides detailed description of processing activities that confer the origin for 
different kind of goods.  Montenegro will subm it Addendum 7b to the Implementing Regulation in a 
timely manner. 
Question 27 
Article 36:  Please provide a list of "beneficiary countries" as used in this article. 
Answer:  
Article 36 sets the rules for implementation of preferential treatment for goods originating from 
eligible countries (beneficiary countries).  No pref erential treatment is granted to any country, except 
in the cases where a free trade agreement binding on Montenegro provides for such treatment.    
Question 28 
Article 38:  As noted under the comment for Article 36, could Montenegro clarify what 
constitutes sufficient treatment or processing under Addendum 76? WT/ACC/CGR/8 
Page 12  
 
 Answer:
 
Sufficient treatment differs depending of the kind of goods.  Montenegro will submit Addendum 7b to 
the Implementing Regulation for details on this matter. 
Question 29 
Article 74:  Part of Article 74 appears to be an  effort to implement the Note to Article 1, 
paragraph 1(b) in the Interpretative Notes (sale or price subject to some condition or 
consideration for which a value cannot be determ ined).  However, the meaning of Article 74, 
paragraph 1 is unclear and possibly contrary  to the WTO Customs Valuation Agreement in 
that it states that values that cannot be determined should be added to the price actually paid or payable.  Under these circumstances transaction value would not exist.   Please clarify the 
meaning of paragraph 1 of this article, and wh ether, and how, it implements the Note to 
Article 1, paragraph 1(b) of the Interpretative Notes. 
Answer:
 
Under the legal system of Montenegro any law mu st be read in conjunction with its implementing 
regulation.  The law provides the framework a nd the implementing regulation provides additional 
details necessary for the proper implementation of th e law.  Such is also the case with the Customs 
Law and its Implementing Regulation. 
Paragraph 1 of Article 74 refers specifically to Ar ticle 30, paragraph 2, item 2 of the Customs Law 
which provides for one specific situation where two pe rsons are considered to be related to each other 
- where such persons are legally recognized as busin ess partners.  In such a case, where the seller and 
the buyer are legally recognized as business partners , if the price of imported goods is subject to 
condition or consideration for which a value can be determined, such condition or consideration shall 
be deemed to be an indirect payment and as such  shall be included in the price paid or payable 
(transaction value).  Montenegro believes that su ch provision is not contrary to the WTO Customs 
Valuation Agreement  
Paragraph 3 of Article 74 refers to conditions for which a value ca nnot be determined.  Examples 
listed in the Note to Article 1, paragraph 1(b) in the Interpretative Notes are included in this 
paragraph. 
Question 30 
Article 76:  Please describe how this provision is applied in practice. 
Answer:  
This Article refers specifically to Article 30, para graph 1, item 3 of the Customs Law, which states 
that "The customs value of imported goods shall be the transaction value, that is, the price actually 
paid or payable for the goods sold for export to  the Republic and increased as set forth in the 
Article 38 of this Law, provided … that no part of the proceeds of any subsequent resale, disposal or 
use of the goods will accrue directly or indirectly to the seller, unless an appropriate adjustment can 
be made in accordance with Article 37 (this an error,  reference should be made to Article 38) of this 
Law", 
Article 76 states that the price actually paid or payable will be accepted as a customs value in cases 
referred to in Article 30, paragra ph 1, item 3 of the Customs Law, if  such price can be adjusted in 
accordance with Article 38, paragraph 1, item 4 of the Customs Law, which states that the transaction  WT/ACC/CGR/8 
 Page 13 
 
 
 value will be increased for the amount equal to "t he value of any part of the proceeds of any 
subsequent resale, disposal or use of the importe d goods that accrues directly or indirectly to the 
seller". 
In practice, the customs authority would determine a ll the elements of the case and if it is able to 
establish the price actually paid or payable and the value of any part of the proceeds of any 
subsequent resale, disposal or use of the importe d goods that accrues directly or indirectly to the 
seller, those two values together will c onstitute the value for customs purposes.  
Question 31 
Article 89:  We recommend that Montenegro review Article 89 of the Decree which pertains to 
licensing provisions and make changes such that the provisions more closely tie into Article 8 of 
the Agreement on Customs Valuation and the Int erpretative Note to Article 8.  Specifically, 
Article 89 should focus on the "related" and "as a condition of the sale" language in Article 8 
paragraph 1.c of the Agreement: 
Royalties and licence fees related to the goods being valued that the buyer must pay, either 
directly or indirectly, as a condition of the sale of the goods being valued, to the extent that such 
royalties and fees are not included in the price actually paid or payable. (emphasis added) 
Answer:  
Montenegro acknowledges the recommendation.  The cu stoms legislation will be carefully analysed 
in order to identify any deficiencies and am end it as may be necessary in a timely manner.  
Montenegro agrees that from th e date of accession, it will not u se any customs measures and/or 
procedures unless they are based on laws and re gulations that are fully WTO consistent. 
- The Law "On Value Added Tax" (RM OG 65/01, 12/02, 38/02, 72/02, 21/03) Question 32 We thank Montenegro for the oppo rtunity to review its VAT law.   We are encouraged that the 
general tenor of this law appears to treat impo rts and domestically produced goods the same.  
We have the following questions, intended to en sure that the law is consistent with the WTO 
Agreements.   
Please confirm that the applicatio n of VAT is the same for domestic and imported goods, both 
in the rate of tax and in product coverage.   
Answer:
 
Montenegro confirms that the application of VAT is the same for domestic and imported goods. 
Question 33 
Are there any products where VAT exemptions a re not applied to imports or where either a 
different rate of tax is applied betw een imported and domestic products? 
If so, please provide a complete list to the Working Party. WT/ACC/CGR/8 
Page 14  
 
 Answer:
 
There are no such goods. 
Question 34 
Article 20 - Tax base and correction of the tax base:  Please confirm that the tax base for 
imported goods is the same as that for domestic ally produced goods, i.e., that excise taxes are 
included in the tax base for both. 
Answer:  
We confirm that excise tax is included in ta x base for both domestic and imported goods.   
Question 35 
Article 24 - Rate of VAT:  Article 24 says that the "standard" VAT rate on products is 
17 per cent (except for exemptions and zero-rated  products).   Can Montenegro increase this 
rate for certain products?  A re there other rates of VAT tax?  What is the maximum VAT tax 
rate that can be applied? 
Answer:  
Montenegro has no plans to increase the standard 17 per cent VAT rate.  There is currently no other 
rate.  However, the VAT law is currently under review , and a 7 per cent rate is likely to be established 
for: 
− basic products for human consumption (m ilk, bread, fat, kitchen oil, sugar); 
− medicines and medical devices; 
− books for education, books and publications; 
− public transportation of passengers; 
− public hygiene services; 
− water supply; 
− funeral services; 
− copyrights; 
− daily and periodical magazines; 
− hotel and motel services; and 
− sports facilities usage. 
Question 36 
Article 25 - Rate of VAT:  Paragraph 2 of this ar ticle refers to "item 9" in paragraph 1.  We 
assume that reference is to item 8 in paragraph 1.  Please confirm. 
Answer:  
We confirm that reference is ma de to item 8 in paragraph 1. 
Question 37 
Article 26 - VAT exemptions in public interest:  Please confirm that these services are exempt 
from VAT regardless of the nationality of ownership of the service provider.  WT/ACC/CGR/8 
 Page 15 
 
 
 Answer:  
We confirm that these services are VAT exempt regardless of the nationality of ownership of the 
service provider.  
Question 38 
Article 27 - Other VAT exemptions:  Please conf irm that goods and services listed in Article 27 
are exempt from VAT regardless of the whether or  not the goods are imported regardless of the 
nationality of ownership of the service provider.    
Answer:  
We confirm that goods and services listed in Article 27 are exempt from VAT regardless of whether 
the goods are imported and regardless of the na tionality of owne rship of the service provider. 
Question 39 Article 51 - Refund of VAT to taxpayers who have not established their business in Montenegro:  
In paragraph 4), the law refers to "detailed co nditions" prescribed by the Minister of Finance 
"which must be fulfilled by a taxpayer in orde r to be granted the right to a refund of input 
VAT…"  Have these "conditions" been issued and published?  If so, where?   
Answer:
 
The Regulation on Implementation of the La w on Value Added Tax (RM OG No. 65/02, 13/03, 
59/04) defines detailed conditions for VAT exemptions.  
- The Law "On Excise Tax" (RM OG 65/01, 12/02) 
Question 40 We welcome the opportunity to review Montenegro 's excise tax law.  We support the limited 
application of this tax, and its apparent application to imported goods on a basis no less 
favourable than that of domestically produced good s.  As evidenced below, we want to ensure 
that Montenegro's tax treatment, as well as its licensing procedures, comport with the WTO 
Agreements.   
Please confirm that the excise taxes are applie d to similar imports in a manner no less 
favourable than to domestic production (both in  the products to which they apply and the tax 
rate).  
Answer:
 
We confirm that excise taxes are applied e qually to both domestic and imported products. 
Question 41 
Please indicate any differences between the applicat ion of excise taxes to domestic and imported 
goods. WT/ACC/CGR/8 
Page 16  
 
 Answer:
 
There are no differences. 
Question 42 
Please explain how excise taxes are exempted or rebated for exported good s.  Does exemption or 
rebate apply equally regardless of destination?   
Answer:  
Article 30 of the Law on Excise Tax prescribes that ex cise taxes will be rebated to an exporter who 
exports products on which excise tax has been paid .  The detailed procedure is prescribed in the 
Regulation on Implementation of the Law on Excise Tax (Article 29).  The exemption or rebate 
applies equally regardless of destination.   
Question 43 Article 19 - Inception of Tax Liability at Importation:  Can a foreign national or foreign owned 
firm apply for and obtain an excise licence, provided the conditions in Article 19 are met? 
Answer:
 
Yes, there are no differences between  domestic and foreign persons.  
Question 44 Article 21 - Tax base when selling property:  Is issuance of an excise licence conditioned on 
having domestic production or on producin g or importing a certain amount of product? 
Answer:
 
No. 
Question 45 
Are excise licenses valid only for a certain amount  of imports?  Are they valid only for a certain 
amount of time?   
Answer:  
An excise licence is granted for an indefinite period  of time and for an indefinite quantity of imported 
or produced excise goods. 
Question 46 Article 26 - VAT exemptions in public interest:  Can a foreign-owned legal entity obtain a 
licence for an exempt excise good beneficiary, provided the conditions in Article 26 are met? 
Answer:
 
Yes.  WT/ACC/CGR/8 
 Page 17 
 
 
 Question 47 
Section XII - Deduction of Input VAT:  Could Montenegro please provide a detailed list of all 
licenses needed to import alcoholic products (e.g., activity licence, excise licence, import licence).   
Answer:  
Montenegro will provide all data requested prior to the first Working Party meeting. 
Question 48 Article 53 - Accounting of Taxpayers:  Is the excise tax drawback on mineral oils used as fuel 
for agricultural and forestry machinery availa ble on imported mineral oils as well? 
Answer:
 
Yes. Question 49 Article 66 - List of unpaid issued invoices:  Montenegro gives a credit to Serbia for excise taxes 
paid on Serbian goods that enter Montenegro, and collects only the difference between the 
Serbian and Montenegrin excise rates.   
Is it understood that Serbia and Montenegro retai n all the revenue raised from their respective 
excise taxes and do not render any of it to the State Union Government? 
Answer:
 
Yes.  Excise revenues entirely belong to the republics, not the Union. 
Question 50 
Where is the duty collected from Serbia?  Are there customs posts on the border between the 
Republics of Serbia and Montenegro? 
Answer:  
Yes, there are customs posts between Serbia and M ontenegro at the administrative border between the 
two republics, where the excise duty is collected.  
Question 51 
Article 68 - List of certain goods in retail tr ade and catering:  This Article states "The 
Government of Montenegro may change the amo unt of excise tax and the method of assessing 
and paying the excise tax for the purpose of eliminating disruptions in the circulation of excise goods within the territory of the Republic of S erbia."  What does this provision mean in 
practice?  Under what circumstances does Mont enegro contemplate altering its excise tax 
system to eliminate "disruptions" in circulation of Montenegrin excise goods in Serbia? 
Answer:
 
The Law on Excise Tax defines that excise is not payable on excise products that are imported from 
Serbia and on which the excise duty has already been  paid in Serbia, unless the excise duty paid in WT/ACC/CGR/8 
Page 18  
 
 Serbia was lower than the excise duty that would be payable in Montenegro.  In such a case, the 
difference would be paid upon import to Montenegro   
The Government of Montenegro may change th e amount of excise tax and the method of assessing 
and paying the excise tax for the purpose of eliminating disruptions in the circulation of excise goods within the territory of the Republic of Serbia.  This might happen in a situation in which goods 
exported to Serbia, on which excise duty has been paid  in Montenegro, were taxed again in Serbia.  
- The Law "On Free Zone" (RM OG No. 42/02)   
Question 52 We are pleased to see that goods sold into the rest  of Montenegro are subject to normal customs 
duties, fees, VAT, and import restrictions.  We seek additional information on the status and 
operation of the zones and warehouses under the WTO, and to determine if the provisions of 
the WTO, including the WTO Agreements on Subsidies and Countervailing Measures, TRIMS, 
and TRIPS, are enforced in Monten egro's free zones and warehouses. 
This decree refers to various Addendum , specifically Addenda 3, 4, 5, 6, 7, 8, 9, and 76.  Could 
Montenegro please provide copies of th ose addenda to the Working Party. 
Article 33 refers to a "FORM A template".  Could Montenegro please provide a copy of this 
document to the Working Party.   
Answer:
 
This Law doesn't contain any provision that refe rs to Addendums nor to FORM A template for 
import.  Article 33 governs functions of the competent Ministry.  
Question 53 
Please explain the benefits Montenegro feels it will gain from a Free Economic Zone and 
perhaps describe in great detail how these Zones a re, or will be, managed.  In particular, in a 
time when many countries are abolishing free zo nes due to rampant corruption, what steps will 
Montenegro take to prevent corruption?  
Answer:  
Free zones and free warehouses are important for fore ign trade.  Free zones provide an incentive to 
production, investments and more profitable business.  Participants in international trade in free zones 
and free warehouses in Montenegro are provided with  opportunities for more flexible, efficient and 
more profitable businesses.  
Montenegro's goal is optimal use of domestic re sources, before other labour and infrastructure 
facilities, through production for export and placing of domestic goods, and usage of services 
provided by domestic companies outside of zo ne.  Warehouses and zones are managed by the 
Operator determined in the articles of establishment.   The Operator may be a domestic or foreign legal 
or natural person.  The Operator may also be a u ser of the zone, which may be arranged in contract 
with the founder of the zone (Article 15 of the Law).   
The Law on Free Zones does not specifically regulat e measures for prevention of corruption, since 
that matter is regulated in other laws (Criminal C ode, the Law on Criminal Procedure) that are applied  WT/ACC/CGR/8 
 Page 19 
 
 
 throughout Montenegro, including in zones and warehouses.  Agency for fight against corruption is in 
charge for prevention and fight against corruption.   
Question 54 
Articles 7 & 11:  Article 7 and Article 11 state that the Montenegro establishes free zones and 
free warehouses on the approval of the proposal by "founders" by the Montenegrin Ministry 
for International Economic Relations (MIER). 
What authority, control, or other involvement do the authorities of the State Union of Serbia 
and Montenegro (State Union) have in the estab lishment, administration, or operation of these 
zones and warehouses?  
Please confirm that upon accession to the WTO, the provisions of the Agreement Establishing 
the WTO and its Annexes will be applied with res pect to trade conducted in any free zones or 
warehouses in existence or initiated after accession. 
Answer:  
Only Montenegrin authorities are responsible for the establishment, control and other issued related to 
free zones and warehouses in Montenegro.  State Un ion authorities are not in volved.  Montenegro 
confirms that upon accession it will fully respect all WT O agreements, including those related to trade 
and business in free zones.   
Question 55 
Article 8:  Is the Law on Free Zone text we have reviewed the final, enacted law as published in 
the Official Gazette?  If so, please explain the me aning of the inclusion of an "Alternative" text 
for Article 8, authorizing the authorities to take account "the space an urban plans which 
enactment fall into competence of the Republic." 
Answer:  
The final text of the Law on Free Zones (RM OG No. 42/04) does not have an "alternative" in 
Article 8.  We will submit a translation of the text of the Law as it is published in the Official Gazette.  
Question 56 
Article 9:  "Economically justified" is defined as  being "realistically expected that it will achieve 
significant results concerning exportation, employment, ... ". 
Does this provision mean that free zones and wa rehouses must contemplate exports or they will 
not be proposed by the MIER?   
Answer:  
The condition for establishment of a free zone or  free warehouse is economic justification, which 
includes such factors as increased exports, empl oyment of new labour, transfer of modern 
technologies, and economic restructuring, which ar e assessed by the relevant Ministry.  Increased 
exports are not a necessary condition. WT/ACC/CGR/8 
Page 20  
 
 Question 57 
Article 11:  This Article indicates that the G overnment prescribes the necessary information to 
be included in the "study on the economic justification of the founding of the zone or warehouse" that must be included in the request for approval.   
What is this information?  To what extent mu st the information include data on prospective 
exports in order to be accepted?  
Answer:
 
The detailed information to be included in an econom ic justification is defined in the Decision on 
Content of Economic Justification for Establis hment of Free Zone or Free Warehouse (RM OG 
No. 53/04).  Please see Annex 1. 
Question 58 Concerning the "proof that at least one of the founders has the right of property of the land," 
this requirement would appear to require that at least one of the Founders must be a Montenegrin national (because foreigners are prohibited from owning land). 
Is conclusion correct?  How would foreign firms or  individuals, who are nominally allowed to be 
"founders" under Article 3, be able to do this? 
Answer:
 
The Law on Basic Property Relations (SFRY OG No. 29/96) states that foreign legal and natural 
person may acquire real estate in Montenegro for business purposes, subject to reciprocity.  Therefore, 
foreign legal and natural persons, fulfilling other conditions, may also fulfil conditions referred to in 
item 3, Article 11 of the Law.   
Question 59 Articles 18 & 20:  Article 18 states that the "goods entered into the zone and warehouse and 
consumed or used in accordance with this La w, are not subject to customs duties, customs 
charges, and the VAT."  Article 20 states that "q uotas, licenses or other possible restrictions on 
foreign trade will not apply to goods imported fr om abroad into the zone and warehouse nor to 
the goods for export to abroad." 
Please confirm that excise taxes are applied to  imports into these zones or warehouses and on 
any exports to the rest of Montenegro, if ex cisable goods are produced in the zones (e.g., 
alcoholic beverages or tobacco products). 
Does exemption from the VAT apply to domestic goods that enter the zones or warehouses, e.g., 
would VAT taxes already charged on dom estic products be rebated upon entry? 
Answer:
 
If excise goods enter a free zone from abroad, or leav e a free zone to abroad, customs and other duties 
and VAT are not payable. If excise goods enter other parts of Montenegro, they are treated the same as all other excise goods imported in Montenegro.  Article 18 is applied on domestic and foreign 
goods entering the free zone or free warehouse; i.e., goods are not subject to customs duties, other 
charges and VAT.   WT/ACC/CGR/8 
 Page 21 
 
 
 Excise taxes are not applied to goods entering a fr ee zone or warehouse from abroad, but are applied 
to excisable goods entering Monteneg ro from a free zone or warehouse. 
Goods entering a free zone or warehouse from Mont enegro are treated as exports, and as such are 
zero-rated for VAT and not subject to excise. 
Question 60 
Article 21:  This article states that if the lo cal content of goods from the zones and warehouses 
sold in other parts of Montenegro exceeds 50 per cent, the goods will "not be subject to 
restrictions related to the foreign trade regime." 
Do the "restrictions" referred to include the cust oms duties, customs charges and the VAT that 
were exempted when the inputs in the production process were imported, or  are they limited to 
"quotas, licenses or other possible restrictions on foreign trade?" 
Answer:  
Customs duties and other charges are not payable on the domestic component of goods from the zone 
or warehouse that are imported into Montenegro, but  are payable on components not considered to be 
domestic.  Goods with a domestic component exceed ing 50 per cent are considered Montenegrin 
goods under the Rules of Origin, and are not subject to duties or foreign trade restrictions, such as 
quotas or licenses.   
Goods entering the rest of Montenegro produced in  free zones and warehouses incorporate inputs that 
were exempted from tariffs, charges and VAT.  Exemption of these goods from import restrictions 
upon entry into the rest of Montenegro based on local content of 50 per cent could be seen as 
constituting a prohibited subsidy as pr ovided for in Article 3 of the WTO Agreement on Subsidies and 
Countervailing Measures. 
Question 61 
Article 28:  Please explain the rationale behind limiting foreign employees to 10 per cent of the 
work force.  
Answer:  
Having in mind that Montenegro has a serious problem of unemployment, the Government considers 
it necessary to maintain measures that will dimini sh this serious economic and social problem.  
Allowing 10 per cent foreign labour provides ampl e scope for foreign skille d personnel and managers. 
As a practical matter, the labour force in Monteneg ro is one of cheapest in Europe, which makes it 
unlikely that any investor would wish to use large numbers of foreign workers.   
Question 62 
Article 36:  Paragraph (1) refers to "certain countries, group of countries or territories", 
referred to as "beneficiary countries", as benefi ciaries of preferential tariff treatment.  Could 
Montenegro please provide a list of those countries?   
Answer:  
Article 36 of the Law is related to nationalization and expropriation and provides that property of 
operator and user of the zone may not be subject  to nationalization and expropriation, which is WT/ACC/CGR/8 
Page 22  
 
 extremely good protection of operator and user.  This Article doesn't contain any reference to "list of 
countries"  
Question 63 
Article 37:  Please indicate the precise reasons  that the Government of Montenegro might 
cancel the approval for the free zone or warehouse.   Would a lack of exports be one of these 
possible reasons? 
Answer:
 
If, in the course of the operation of the zone and warehouse, it is proved that the requirements 
stipulated by the Law regarding its setting up have  ceased to exist, the Government may cancel the 
approval for setting up the zone and the warehouse, at  the proposal of the Ministry for International 
Economic Relations and European Integration and afte r obtaining the opinions of other ministries, the 
founders and the operators.  A lack of exports might be a factor in such a decision, but would be only 
one of several factors to be considered. 
Question 64 
Are there provisions or conditions under which individual firms or other users of the zone 
might be prohibited from further operations? 
Answer:  
Articles 15, 16 and 17 regulate management of the zone and warehouse, i.e. relations between the 
Operator and user.  The same articles prescribe that  the Operator sets the general rules for business 
operations in the zone, which define relations between the Operator and users.  It is possible that such 
rules would provide for the possibility that an agreement with a user might be terminated.  
- The Law On "Foreign Trade Law" (RM OG No. 28/04) Question 65 We appreciate the opportunity to comment reg arding Montenegro's Foreign Trade Law and 
the implementing regulation.  The law and implem enting regulation demonstrate a strong effort 
on the part of Montenegro to provide a tr ansparent and detailed roadmap for their trade 
remedy regime.   We seek further information o the procedures pertaining to Montenegro's 
trade remedy proceedings. 
There appears to be no provision in the Foreign  Trade Law (the "FTL") or The Regulation on 
Implementation of The Foreign Trade Law  (the "Regulations") implementing the requirements 
of Article 12.2.1 of the WTO Agreement on Implementation of Article VI of the GATT 1994 (the "ADA") and Article 22.4 of the Agreement on Subsidies and Countervailing Measures (the 
"ASCM") that a public notice of the imposition of provisional measures, or a separate report, 
provide sufficiently detailed explanations of th e preliminary determinations of dumping or 
subsidization and injury and refer to matters of fact and law which have led to arguments being 
accepted or rejected.  Please explain when a nd how Montenegro plans to incorporate these 
requirements into its law. 
Additionally, we note that the FTL (and the Regulations) do not adequately articulate 
provisions to safeguard the interests of all in terested parties with regard to the process of 
developing the record evidence in a proceeding, such as those provided under Article 3 of the  WT/ACC/CGR/8 
 Page 23 
 
 
 Agreement on Safeguards (the "SA"), Article 6 of the ADA and Article 12 of the ASCM.  For 
example, there are no provisions for adequate time to respond to questionnaires, oral presentation of information, or timely opport unities for comment and rebuttal.  Please explain 
how and when Montenegro will incorporate thes e provisions into the FTL and the Regulations 
in order to be in compliance with the WTO Agreements. 
Answer:
 
The requirements referred to in ADA Article 12.2.1 and ASCM Article 22.4 are met by the provision 
of FTL Article 41 (3) under which any decision on application of provisional measures must be published in the Official Gazette of the Republic of Montenegro.  
This matter is also regulated by the Law on Ad ministrative Procedure, which requires that any 
administrative decision, including decisions to impose antidumping or countervailing duties, must 
include the rationale, with all relevant information on matters of fact or law that have led to the 
imposition of measures, as well as the reasons for the acceptance or rejection of relevant arguments or 
claims made by the parties to the proceedings and thir d parties, if any.  The decision must be served to 
all parties to the proceedings and any third parties.   
The legal system of Montenegro adequately protects the interests of third parties in any administrative 
proceedings, including those related to SA Article 3, ADA Article 6 and ASCM Article 12. 
Under FTL Article 7(1) the law that  governs general administrative pr ocedure is applicable to all 
procedures conducted in accordance with the FTL.  Article 39 of the Law on General Administrative 
Procedure (RM OG No. 60/03) provides for the right of any person, natural or legal, to participate in any administrative proceedings in order to protect its  rights or legal interest.  A simple claim of the 
existence of a right or an interest is sufficient to be granted the status of an interested party in the 
proceedings.  
An interested party has rights identical to those of the original parties to the proceeding.  These rights 
include participation in the process of developing the record of evidence in a proceeding, the right to 
have adequate time to respond to  questionnaires, oral presentation of information, or timely 
opportunities for comment and rebuttal. 
In addition, under FTL Article 39 all interested par ties may be given an opportunity to participate in 
the investigation procedure related to antidumping and countervailing measures  in order to protect 
their interests.  Before a final determination on dumping or subsidizing is made, the competent 
authority will inform all interested parties of th e essential facts under consideration, which form the 
basis for initiation of investigation procedure whet her to apply definitive measures and invite their 
opinions within the period of 30 days. 
Question 66 
Article 8 – Confidentiality:  The heading of this article (along with Article 31 of the Regulations) 
indicates that the provision is intended to address  confidential information; the actual wording 
in both the FTL and the Regulation, however, indicates that the authority cannot release 
any information it receives without the written perm ission of the submitter.  There are no other 
provisions addressing confidentiality of informatio n in the FTL or the Regulations, particularly 
with regard to "information which is by nature confidential or... provided on a confidential basis," as can be found under Article 3.2 of the SA Agreement, Article 6.5 of the ADA and 
Article 12.4 of the ASCM.   WT/ACC/CGR/8 
Page 24  
 
 Article 6.1.2 of the ADA and Article 12.1.2 of the ASCM require that, "subject to the 
requirement to protect confidential informatio n, evidence presented in writing from one 
interested party or interested Member shall be made available promptly to other interested 
Members or interested parties participating in the investigation."  Moreover, Article 3.1 of the SA, Articles 6.2 and 6.4 of the ADA, and Ar ticles 12.2 and 12.3 of the ASCM, require that 
interested parties are given an opportunity to see information submitted during the course of 
the proceeding and defend their interests.  Finally, Article 3.2 of the SA, Article 6.5.1 of the ADA and 12.4.1 of the ASCM require non-confiden tial summaries.  If "all information" is 
confidential, how does Montenegro intend to meet these obligations? 
The FTL and Regulations also do not estab lish the conditions under which the competent 
authority may disregard confidential information for which no summary or disclosure is 
provided, as provided  in Article 3.2 of the SA, Article 6.5.2 of the ADA and 12.4.2 of the ASCM.  How and when will Montenegro meet these ob ligations in the FTL and Regulations? 
Answer:
 
Article 8 addresses the issue of confidentiality with  respect to any "unauthorized" person, i.e. any 
person that is not a party to the proceedings or in terested person.  Parties to the proceedings or 
interested persons have the right to see any eviden ce or information presented by any other party and 
defends their interests.  
Question 67 
Article 15 – Requirements:  Are the three circums tances for imposing quantitative restrictions 
listed in this article - critical shortages, protection of exhaustible resources, and safeguard 
measures - the only situations in which Mont enegro can impose quantitative restrictions on 
imports?  What is the process by which the G overnment decides to impose restrictions under 
the first two scenarios - critical shortages or protection of exhaustible resources?  
Answer:  
Article 15, paragraph (1), subpara graphs 1) and 2) provide for th e two circumstances for imposing 
quantitative restrictions as the only situations in  which quantitative restrictions on exports can be 
imposed. 
Montenegro has never used the mechanism provided fo r in Article 15, paragraph (1).  However, the 
process for imposition of export restrictions would incl ude determination of all relevant circumstances 
by the ministry responsible for the particular matt er (economy, foreign trade and/or environment) and 
the subsequent proposal to the Government to  impose the measure.  Upon such proposal, the 
Government issues a decision to  impose export restriction. 
Under paragraph (3), quantitative r estrictions on imports may be im posed only as a safeguard measure 
under the scenario provided for in Articles 44-50 of the FTL. 
Question 68 
Article 34 - General Provisions:  Paragraph 2 of this article states that implementation of 
Montenegro's provisions on trade remedies shou ld "tak[e] into consideration provisions of 
relevant WTO agreements and EU legislation."  In the case of a conflict between the FTL and/or the Regulations and a pertinent WTO agreem ent, which controls?  What is the practical 
significance of the reference to EU legislation?  WT/ACC/CGR/8 
 Page 25 
 
 
 Answer:  
 Under the Constitutional Charter of Serbia and Montenegro, ratified inte rnational agreements, 
including of WTO Agreements (when ratified), are inte gral part of the internal legal system.  In the 
case of discrepancy, any ratified international agreement supersedes domestic legislation.  
As the consequence of the geographical position of Montenegro, European and Euro-Atlantic 
integrations, including EU accession are high on the ag enda in Montenegro.  Hence, any legislative 
activity in Montenegro includes compliance with relevant EU legislation, where applicable. 
Question 69 
Antidumping and Countervailing Duties: Article 35 – Definitions:  The definition in paragraph 
(6) of "material injury" as "a significant declin e of profits in the domestic industry" does not 
conform to the provisions of the ADA and ASCM.  Under Article 3.1 of the ADA and Article 
15.1 of the ASCM, any determination of injury must be based on an examination of the volume of dumped or subsidized imports, their price effect s, and their impact on the domestic industry.  
Article 3.4 of the ADA and Article 15.4 of the ASCM state that examination of impact entails 
consideration of numerous specified factors.  Th ese factors encompass, but are no means limited 
to, an examination of whether there is a decline in profits.  Indeed, Montenegro's narrow 
definition of "material injury" is even inconsistent with the provisions of its own Regulations.  Article 20(4) of the Regulations specifies several fa ctors in addition to profits that Montenegro's 
authority must examine in determining whether there is material injury.  Please explain how and when Montenegro plans to bring its la w into conformity with the ADA and ASCM. 
Answer:
 
 Although the definition of "material injury" ap pears to be narrow and not to conform to the 
provisions of Article 3.1 of the ADA and Article 15.1 of the ASCM, Montenegro believes that this is 
not the case.  
Under the legal system of Montenegro, the FTL and its Implementing Regulation have to be read in 
conjunction.  The Law provides basic provisions - the framework, and the Regulation provides 
additional provisions necessary for the implementa tion (kind of mandatory explanatory notes).  
Therefore, the provisions of the Law are not inconsistent with the provisions of its own Regulation.  Provisions of the Regulation must be understood as th e addition to Law.  In this particular case the 
provisions of the Regulation provide for additi onal factors (compliant with relevant WTO 
Agreements) that have to be examined in de termining whether there is material injury.  
Question 70 
Article 35 does not include a definition for "domestic industry", and it is not clear from the FTL 
or the Regulations how Montenegro defines that  term for the purpose of making an injury 
determination (as opposed to ascertaining whet her an application for antidumping duties has 
sufficient support).  Article 4.1 of the ADA and Article 16.1 of the ASCM indicate that the domestic industry shall be "interpreted as referri ng to the domestic producers as a whole of the 
like product or to those of them whose collectiv e output of the products constitutes a major 
proportion of the total domestic production of these products" (except that related parties may 
be excluded).  Please explain how and when Monten egro plans to bring its law into conformity 
with these provisions of the ADA and ASCM. WT/ACC/CGR/8 
Page 26  
 
 Answer:
 
The definition of "domestic industry" is include d in Article 44 paragra ph (2) of the FTL, which 
defines it as producers of the same or like products operating within the territory of the Republic (of 
Montenegro) whose collective output constitutes more than 50 per cent of the total domestic production of such products (same or   like products).  Montenegro believes that "50 per cent" meets 
the requirement of "a major proportion." 
Definitions of "domestic industry" in both Article  4.1 of the ADA and Article 16.1 of the ASCM are 
identical, so definition included in Article 44 para graph (2) of the FTL is applicable to "domestic 
industry" with respect to antidumping measures. Montenegro will amend the FTL in order to make this provision more clear.  
Question 71 Antidumping and Countervailing Duties: Article 37 - Investigating Procedure:  Pursuant to 
paragraph (2) of this article, an application is considered to be made "on behalf of an industry 
is it is made by those domestic producers who se collective output constitutes more than 25 per 
cent of the total domestic production of the lik e product."  Articles 5.4 of the ADA and 11.4 of 
the ASCM, however, require that the applicatio n must also  be supported by "domestic 
producers whose collective output constitutes more than 50 per cent of the total production of 
the like product produced by that portion of the domestic industry expres sing either support for 
or opposition to the application."  Please expl ain how and when Montenegro plans to bring its 
law into conformity with these provisions of the ADA and ASCM. 
According to paragraph (3), "producers who are rel ated to the exporters or importers or are 
themselves importers of the allegedly dumped or subsidized product" shall be excluded from 
the domestic industry for the purposes of de termining domestic industry support under 
paragraph (2).  Articles 4.1(i) of the ADA a nd 16.1 of the ASCM do not require that such 
"related parties" be excluded, but rather provide  only that they "may" be excluded.  Please 
justify Montenegro's restrictive application of these provisions of the ADA and ASCM.   
Answer:
 
The provisions of Articles 5.4 of the ADA and 11.4 of the ASCM are intended to cover any 
circumstances that may occur in any WTO member regardless of the its size, market situation and 
economic power. 
The provision of Article 37 (2) of the FTL reflects the size of Montenegro and its market and the 
number of manufacturers in each particular industrial sector.  There are sectors where there is only 
one manufacturer, as well as a number of sectors with less than five manufacturers.  As a 
consequence, it is very likely that just one manufact urer, being the only one or one of a few, will meet 
all the criteria referred to in Articles 5.4 of the ADA and 11.4 of the ASCM. 
However, Montenegro does not intend to apply any tr ade remedies in a way that may impede trade or 
cause such an effect.  In addition, upon accession all the WTO Agreements will become directly 
applicable as an integral part of the internal lega l system.  In the case of any discrepancy, any ratified 
international agreement supersedes any domestic legislation. 
Montenegro is of the opinion that there is no restri ctive application of Articles 4.1(i) of the ADA and 
16.1 of the ASCM.  Under these provisions contrac ting parties (states-WTO members) are given an 
option.  They can chose - either to include or to  exclude "related parties" from the domestic industry  WT/ACC/CGR/8 
 Page 27 
 
 
 for the purposes of imposition of antidumping an d countervailing duties.  Montenegro chose to 
exclude "related parties" from the domestic industry. 
Question 72 
Antidumping and Countervailing Duties: Article 39 - Interested Parties:  This article grants 
"interested parties" the right to participate in th e investigation, but "interested parties" is not 
defined in the FTL or the Regulations.  How does Montenegro implement the requirements of 
Article 6.11 of the ADA and Article 12.9 of the ASCM concerning who is an "interested party" with a right to participate in the investigation? 
Neither the FTL nor the Regulations expressly  afford interested parties certain rights 
guaranteed under the ADA and ASCM: 
− The right to "meet those parties with ad verse interests" under Article 6.2 of the ADA 
and "to present information orally" under Article 12.2 of the ASCM. 
− The right to see all non-confidential inform ation relevant to the presentation of their 
cases under Article 6.4 of the ADA and Article 12.3 of the ASCM. 
How does Montenegro implement these ri ghts in the FTL and Regulations? 
Answer:
 
As it was explained above, Article 39 of the Law on General Administrative Procedure (RM OG 
No. 60/03) provides for the right of any person, natura l or legal, to participate in any administrative 
proceedings in order to protect its rights or legal interest.  Simple claim of the existence of a right or an interest is sufficient to be granted the stat us of an interested party in the proceedings.  
An interested party has rights identical to those of  the original parties to the proceedings.  These rights 
include the right to meet those parties with adverse interests, the right to present information orally 
and the right to see all information releva nt to the presentation of their cases.  
Question 73 Antidumping and Countervailing Duties: Article 40 – Decision:  This article suggests that the 
Government has the discretion to decide not to impose antidumping or countervailing duties 
following an affirmative determination.  
Is our understanding correct?  
Has the Government ever decided not to im pose AD/CVD duties following an affirmative 
determination?   
What sort of circumstances would lead the Government to decide not to impose AD/CVD 
duties? 
Answer:
 
It is probably a linguistic issue.  The purpose of  this provision is to provide the power for the 
Government to impose AD/CVD duties.  Theoretica lly, the Government could decide not to impose 
AD/CVD duties following an affirmative determination,  although that would probably be unlikely.  
However, Montenegro has never had a case or cond ucted an investigation involving AD/CVD, and 
thus the Government has never decided either  to impose or not to impose AD/CVD duties. WT/ACC/CGR/8 
Page 28  
 
 Question 74 
Antidumping and Countervailing Duties: Article 41 - Provisional Measures:  Paragraph 1 of 
this article stipulates that provisional measur es may be applied if it is determined that, inter 
alia, "both the existence of dumping and/or subsid ization and injury to the domestic industry 
are probable."  Could Montenegro define what  is meant by a "probable" determination and 
explain how it is consistent with the WTO sta ndard of "affirmative determination," as provided 
under Article 7.1(ii) of the ADA and Article 17.1(b) of the ASCM?   
Moreover, as set forth under the provisions of  the WTO agreements, the WTO standard for 
injury with regard to provisional measures is "injury ... caused by subsidized imports" or 
"consequent injury to a domestic industry."  (Emphasis added.)  We note that no similar 
qualifications are provided for the term "injury"  under Article 41 of the FTL.  Please explain 
how Montenegro will the provisions of Article 41 into consistency with the corresponding 
provisions of the WTO agreements? 
Answer:
 
This is very likely a linguistic issue.  
Within the context of Article 41 the wording of the original language of the FTL should be understood 
to have the meaning equal the meaning of  the phrase "affirmative determination".  
"Injury" as used in the original language of the FTL  is the injury caused by subsidized imports or 
consequent injury.  
In any case of a need to interpret the meaning of the provision, such interpretation will be done taking 
into consideration original wording and the meani ng of the relevant WTO Agreements, since the latter 
will be an integral part of the internal law, a nd superior to any conflic ting domestic legislation. 
Question 75 
Antidumping and Countervailing Duties: Article 43 – Duration:  Paragraph (2) of this article 
provides for so-called "sunset reviews", but does no t indicate the standard applicable to such 
reviews.  How does Montenegro implement the re quirements of Article 11.3 of the ADA and 
Article 21.3 of the ASCM that duties be revoked unless there is a showing that revocation would 
result in continuation or recurrence of dumping or subsidization and injury? 
Answer:  
Paragraph (2) provides that the review of the need for the continued imposition of the duty is to be 
administered in accordance with the provisions th at regulate an investigation procedure under the 
FTL.  Therefore, the standard applicable to such re views is to the same as that applicable to the 
imposition of the measure.  
The requirements of Article 11.3 of the ADA and Article 21.3 of the ASCM are met by paragraph (3) 
which provides that the Government shall termin ate an antidumping or countervailing duty if, as a 
result of the review, it was determined that the reasons for its application have ceased to exist. 
Question 76 
Safeguard Measures: Article 4.2(b) of the WTO Safeguards Agreement (the "SA") requires the 
competent authority to analyse factors other than  increased imports that may be simultaneously  WT/ACC/CGR/8 
 Page 29 
 
 
 causing injury to the domestic industry.  Ho w does Montenegro implement this requirement, 
which does not appear to be address ed in the FTL or Regulations? 
Answer:  
Article 4.2(b) of the SA simply states that wh en factors other than increased imports are causing 
injury to the domestic industry at the same time, su ch injury shall not be attributed to increased 
imports.  This issue is addressed in the Article 36,  paragraph 2 of the FTL.  The existence of these 
factors will be determined during the course of inv estigation procedure along w ith all other relevant 
factors.  It should be understood that Article 36, paragraph 2 is also applicable to safeguards.  
However, Montenegro will amend the FTL in order to make this more clear. 
Question 77 
Safeguard Measures: Article 3.1 of the SA requires the authority to provide notice to all 
interested parties of their ability to presen t evidence and their views and respond to 
presentations of other parties.  How does Mont enegro implement these requirements, which do 
not appear to be addressed in the FTL or Regulations? 
Answer:  
Under Article 26 of the Implementing Regulation the notification of initiation of the proceedings for 
investigation of the existence of dumped or subsidized  imports that contains all relevant data must be 
published in the Official Gazette of the Repub lic of Montenegro.  Relevant data include: 
− The name of the exporting country or countries and the product involved; 
− The date of initiation of the investigation; 
− Evidence on the existence of dumping or subsidy; 
− A summary of the factors on which the allegation of injury is based; 
− The address to which representations by interested parties should be directed; and 
− The time limits allowed to interested  parties for making their views known. 
Under Article 27 of the Regulation notificati on on initiation of investigation procedure under 
Article 26 is to be given to the known exporters  and authorities of the countries of export and/or 
origin, and to other interested parties, upon their request. 
Question 78 
Safeguard Measures: Article 44 - Criteria for Application:  Paragraph (2) of this article refers 
to "paragraph 12 of this Article".  We assume that the reference should be "to paragraph 1". 
Paragraph (2) defines the "domestic industry" for safeguard investigations as producers 
"whose collective output constitutes more than 50 per cent of the total domestic production of 
such products."  Article 4.1(c) of the SA defi nes the term "domestic industry" to mean "the 
producers as a whole of the like or directly compet itive products operating within the territory 
of a Member, and those whose collective output  of the like or directly competitive product 
constitutes a major proportion of the total prod uction of these products."  Please explain this 
discrepancy. 
Answer:  
Montenegro believes that "more than 50 per cent"  as required by FTL Article 44 meets the rather 
ambiguous requirement of a "major pr oportion" in SA Article 4.1(c).  WT/ACC/CGR/8 
Page 30  
 
 Question 79 
Safeguard Measures: Article 46 – Form:  Pursuan t to paragraph (1), "[s]afeguard measures 
may take the form of quantitative restriction or tariff increase".   Are these the only types of 
measures that may be imposed?   
Answer:
 
Yes. 
- The Regulation "On Implementation of the Foreign Trade Law"  (RM OG No. 52/04) 
Question 80 The relationship between the FTL and the Regulati ons is unclear.  Do the Regulations have the 
force of law under the legal system of Montenegr o?  In addition, there are several provisions of 
the Regulations that define terms not referenced in the FTL, or define terms in a manner that 
appear at variance with the FTL.  How does the Montenegrin legal system resolve such conflicts 
and ambiguities?  Of what relevance in this respec t is Article 3(3) of the FTL, which declares to 
be null and void any legal act or administrative  authority that creates restrictions on foreign 
trade contrary to those of the FTL? 
Answer:
 
Under the legal system of Montenegro, the FTL and its Implementing Regulation - which has the 
force of law - have to be read in conjunction.   The Law provides the basic framework, and the 
Regulation provides additional provisions necessary for the implementation.  Provisions of the 
Regulation must be understood as in addition to the La w.  Provisions of the Regulations define terms 
used in the Regulation and not tho se referenced in the FTL.  Therefor e, the provisions of the Law are 
not inconsistent with the provisions of its own Regul ation, and there are no c onflicts and ambiguities.  
Consequently, Article 3(3) of the FTL is not applicab le in this particular case, because the Regulation 
does not create restrictions on foreign trade contrary to those of the FTL. 
Question 81 
Article 3 - Control list:  Paragraph (1) of this ar ticle suggests that licenses to import or export 
goods on the Control List for Export and Im port are issued auto matically.  Is our 
understanding correct? 
Answer:  
Not entirely.  This provision merely states that li censes for export and import of goods will be issued 
only for goods which fall under licensing regime pursu ant the Decision on Control List for Export and 
Import (which provides comprehensive information on regimes applicable to particular goods).  The 
licenses are not issued automatically.  
Question 82 
Article 5 - Content of application for issuance of a licence:  Paragraph (6) of this article requires 
that each application "be accompanied with proof  that administrative fee has been paid".  
Please describe what the "administrative fee" is.  If the fee is for the application, please explain 
how the proof of payment of the fee applicatio n can be submitted simultaneously with the 
application itself.  WT/ACC/CGR/8 
 Page 31 
 
 
 What is the incidence of the fee?  Is it ad valorem  or based on the cost of issuing the licenses? 
Answer:  
The Law on Administrative Fees (RM OG No. 55/03,  46/04) provides a schedule of fees for the 
(administrative) services provided by administrativ e authorities, including those related to foreign 
trade.  The fee in this particular case is not ad valorem , but is rather considered to be a compensation 
for the services provided by the administrative author ity.  The schedule of fees is published in the 
Official Gazette of the Republic of Montenegro, and as such is known to all economic operators.  
Hence, it is possible to pay the fee before the applic ation is filed and attach the proof of payment to 
the application.  The proof is the copy of the money order.   
Question 83 
Article 7 - Form of issuance of a licence:  The la nguage of paragraph (1) of this article, like 
Article 3, suggests that these licenses are compulsory  (i.e., issued automatically).  Paragraph (2), 
however, suggests that the issuing authority has discretion whether or not to issue the licence.  
Please explain the apparent inconsistency. 
Answer:  
Under the legal system of Montenegro the power of  a designated authority is not assumed, but rather 
must be clearly provided for by the law or other legal act.  Article 7(1) provides the power to the 
competent authority to issue a li cence.  The competent authority d ecides to issue the licence if it 
determines, based on the facts in each particular case, that all requirements for the issuance of the 
licence have been met.  All licenses are non-automatic.   
Question 84 
Article 11 - Determination of normal value:  Paragr aph 1 of this article sets forth the conditions 
under which home or third-country sales of the like product may be disregarded in determining 
normal value, i.e., where the like product is being sold "below normal value" for "a period of time longer than six months."  However, we no te that, other than for the period of time, 
Article 2.2.1 of the ADA requires more stringent sta ndards, i.e.,  that such sales should also be 
made in "substantial quantities" (defined as "not less than 20 per cent" of the total volume of 
sales under consideration) and at "prices which do  not provide for the recovery of all costs 
within a reasonable amount of time" (defined as prices that are, on a per-unit basis, below the 
"weighted average per unit costs for the period  of investigation").  Please describe how 
Montenegro will bring the provisions of this par agraph into consistency with the corresponding 
provisions of the WTO agreement. 
Answer:
 
This provision was based on the assumption that an y determination has to be based on substantial 
quantities, taking into consideration all rele vant factors.  However, upon accession all WTO 
Agreements will become an integral part of the inte rnal legal system and directly implementable.  In 
the case of any discrepancy, any ratified internati onal agreement supersedes domestic legislation. 
Question 85 Article 13 - Determination of the margin of dumping:  Paragraphs 1-2 (in our translation of the 
Regulations, there are two paragraphs 2 in this arti cle; we refer here to the first paragraph 2) of 
Article 13 provide guidelines by which export price may be compared with normal value.  WT/ACC/CGR/8 
Page 32  
 
 Article 2.4 of the ADA includes allowances for the "conditions and terms of sale" and for 
"profits."  Please describe how Montenegro will bring the provisions of this article into consistency with the corresponding provisions of the ADA. 
Answer:
 
Montenegro apologizes for an error in numbering para graphs. First paragraph 2 is actually paragraph 
(2) and second paragraph 2 is actually paragraph (3).  
Article 2.4 of the ADA provides a non-exhaustive list of  factors that may be taken into consideration 
when comparing normal value and the export price.  In addition to all listed factors, "any other 
differences which are also demonstrated to aff ect price comparability" may be used, whereas the 
"authorities shall ensure that they do not duplicate ad justments" (footnote 7).  Within the context of 
the original language of the Regulation, the list of factors referred to in Article 13 (2) is also non-
exhaustive, so any other factor can be used, in cluding allowances for the "conditions and terms of 
sale" and for "profits."  It has to be noted, however , that "conditions and terms of sale" are covered by 
"discount, rebates and quantities" referred to in s ubparagraph 3) and that "profits" must anyway be 
taken into consideration when other factors are used. 
In case of a need to interpret the m eaning of the provision, such interpretation will be done taking into 
consideration original wording and the meaning of ADA.   This is clearly indicated in Article 9 (1) of 
the Regulation.  In addition, upon  accession all WTO Agreements will become an integral part of the 
internal legal system.  In the case of discrepancy , any ratified internationa l agreement supersedes 
domestic legislation. 
Question 86 
The second paragraph 2 under Article 13 provides that the comparison of export price to 
normal value "shall be established on the basis of a comparison of a weighted average normal 
value with a weighted average of export prices  of all comparable export transactions."  
Article 2.4.2 of the ADA additionally provides that the comparison may also be made "on a transaction-to-transaction basis."  Please describe Montenegro will bring the provisions of this 
paragraph into consistency with the corresponding provisions of the ADA. 
Answer:
 
Article 2.4.2 of the ADA provides an option for the signatories to the Agreement (WTO Members 
States) to compare weighted average normal value and weighted average export prices, or to make 
comparison on a transaction-to-transaction basis.  M ontenegro chose one of the options.  However, 
upon accession all WTO Agreements will become an integral  part of the internal legal system.  In the 
case of discrepancy, any ratified international agreemen t supersedes domestic legislation.  Therefore, 
it will be also possible to use comparison made on a transaction-to-transaction basis at that time. 
Question 87 
Article 14 - Determination of subsidies:  This ar ticle of the Regulations states that a "[s]ubsidy 
shall be deemed to exist when there is any fi nancial or other contribution by a government."  
(Emphasis added.)  Given the definition of "finan cial contribution" set forth in Article 1.1(a)(1) 
of the ASCM, could Montenegro explain what is meant by "other contribution" in this article? 
Answer:  
This appears to be a linguistic issue.  WT/ACC/CGR/8 
 Page 33 
 
 
 In the original language of the Regulation the equiva lent of the word "financial" has a meaning that 
covers only direct transfers of funds (paragraph 2, subparagraph 1) but not other contributions within 
the context of Article 1.1(a)(1) of the ASCM.  In order to cover all contributions, the words "other 
contribution" in the original language had to be added. 
Question 88 
Article 19 - Examination of the impact on the industry:  This article requires an examination of 
"impact."  However, the term "impact" is ne ver used in the Law.  Please explain how the 
"impact" analysis is integrated into the injury determination.    
Answer:  
The word "impact" does not have to be used in the La w in order to used in the Regulation.  Article 19 
provides a non-exhaustive list of factors that have  an impact (influence, effect) on the industry 
suffering injury.  The term "impact" is used in its usual meaning - influence, effect, in the same way 
as it was used in Article 3.4. of ADA.  The "imp act" analysis is integrated into the injury 
determination within the cont ext of Article 3.4. of ADA. 
Question 89 
Article 20 - Material injury from dumped or subsidized imports:  It is unclear whether the 
factors referenced in paragraph (2) of this arti cle are intended to apply to a present injury 
analysis, a threat of injury analysis, or both.  To the extent that they are intended to apply to threat analysis, these factors deviate in several resp ects from those specified in Article 3.7 of the 
ADA and Article 15.7 of the ASCM: 
− Factor (1) does not require the authority to ascertain the likelihood of significantly 
increased importation, contrary to Article 3. 7(i) of the ADA and Article 15.7(ii) of the 
ASCM; 
− Factor (2) does not specify that the authority should take into account the availability of 
other export markets to absorb any additional  exports, as required by Article 3.7(ii) of 
the ADA and Article 15.7(iii) of the ASCM; 
− Factor (3) does not specify that the authorit y should take into account whether imports 
are entering at prices that will have a signif icant price-suppressing or -depressing effect 
and would likely increase demand for further im ports, as required by Article 3.7(iii) of 
the ADA and Article 15.7(iv) of the ASCM; and  
− There is no factor requiring the authority to take into account the nature of the subsidy 
in CVD investigations, as required by Article 15.7(i) of the ASCM. 
Please clarify whether the provisions of paragraph (2) apply to a threat of injury analysis, and, 
if so, please explain when and how Montenegro plan s to bring its law into conformity with these 
provisions of the WTO ADA and ASCM. 
Answer:
 
This is partly a linguistic issue.  Article 20 reflects provisions of Article 3.7 of the ADA and 
Article 15.7 of the ASCM.  Within the context of  the original language of the Regulation, the 
provisions of paragraph (2) apply to an injury th at is imminent, hence to a threat of injury. 
With respect to factor (1) Article 20 if the Regul ation has to be read and understood in conjunction 
with Article 37 of the FTL.  Under Article 37 of the FTL, the competent authority conducts an 
investigation that includes determina tion of all relevant facts.  Artic le 20, paragraph (2), subparagraph WT/ACC/CGR/8 
Page 34  
 
 1) of the Regulation lists the likelihood of significan tly increased importation as one of the factors that 
have to be determined, based on which  a threat of  material injury can be identified, which complies 
with Article 3.7(i) of the ADA and Article 15.7(ii) of the ASCM; 
With respect to factor (2), the analysis of "the likelihood of substantially increased subsidized imports 
to the Republic" includes taking into account the av ailability of other export markets to absorb any 
additional exports, because such analysis cannot  be performed properly without taking into 
consideration this factor.  Therefore, the availability  of other export markets to absorb any additional 
exports will always be ta ken into consideration. 
With respect to factor (3), the wording used in the original language of the Regulation (impact on the 
level of prices) has a meaning identical to "significant price-suppressing or -depressing effect and 
would likely increase demand for further imports,"  as required by Article 3.7(iii) of the ADA and 
Article 15.7(iv) of the ASCM. 
Although there is no express provision in this Article  requiring the competent authority to take into 
account the nature of the subsidy in CVD investig ations, this obligation clearly arises from the 
provisions of Articles 14-18 of the Regulation whic h define subsidies that may cause countervailing 
measures.  There is no doubt that the competent aut hority has to identify the nature of the subsidy in 
CVD investigations, and that the requirement referred to in Article 15.7(i) of the ASCM has been met. 
Question 90 
Article 21 - Application for Initiation of the Investigating Procedure and Article 22 - Prior 
Notification on Initiation of Investigation Pro cedure:  These articles set forth requirements for 
application for initiation and conditions for notifica tion prior to initiation.  We note that similar 
provisions under Article 5.5 of the ADA and Article 11.5 of the ASCM additionally provide that, 
unless it has been decided to initiate an invest igation, the competent authority "shall avoid ... 
publicizing the application for the initiation of an investigation."  In addition, Article 5.7 of the ADA and Article 11.6 of the ASCM Agreement provi de that, in the event that the competent 
authority initiates an investigation "without having received a written application by or on 
behalf of a domestic industry" (i.e., self-initiates an investigation), the investigation shall 
proceed only if the authority has "sufficient evid ence of dumping [or the existence of a subsidy], 
injury and a causal link."  Please explain how Montenegro will bring its FTL into conformity 
with the WTO ADA and ASCM. 
We note that these articles of the Regulations do not clearly state the conditions under which an 
application will be rejected.  Article 5.8 of th e ADA and Article 11.9 of the ASCM both provide 
that "[a]n application... shall be rejected... as soon as the authorities concerned are satisfied that 
there is not sufficient evidence of either dumping [or subsidization] or of injury to justify proceeding with the case."  Please explain how Montenegro will bring its FTL into conformity 
with the ADA and ASCM. 
Answer:
 
Article 21 merely provides for the content of the application.  
Article 22 provides for a mandatory notification to the exporting countries before the initiation of an 
investigation (when it was already determined that there is sufficient eviden ce of the existence of 
dumping or subsidization and injury). 
The application for the initiation of an AD/CVD investigation is never publicized.  However, 
notification of initiation of the AD/CVD investiga tion proceedings is publicized in the Official  WT/ACC/CGR/8 
 Page 35 
 
 
 Gazette of the Republic of Montenegro (Article 26 of the Regulation).  The same principle is 
applicable to proceedings initiated either  by an application or ex officio. 
Under the Law on Administrative Procedure, any ad ministrative authority will grant an application 
where there is sufficient evidence to support the cl aim.  Consequently, the administrative authority 
will reject the application where it is satisfied that there is not sufficient evid ence to support the claim.  
This principle is applicable to any proceedings  with respect to AD/CVD measures.  Therefore, 
Montenegro is of the opinion that the requirement that "[a]n application... shall be rejected... as soon 
as the authorities concerned are satisfied that there is not sufficient evidence of either dumping [or 
subsidization] or of injury to ju stify proceeding with the case" referred to in Article 5.8 of the ADA 
and Article 11.9 of the ASCM have been met. 
Question 91 Article 23 - Period of time:  This article defines a period of time for the competent authority to 
request additional information from the applic ation.  Please explain if deadlines have been 
established for when the competent authority must make a decision whether to initiate and in 
what legislation or decree those deadlines are contained?  If such deadlines have been 
established, what are they?   
Answer:
 
The FTL does not establish a specific deadline by whic h the competent authority must decide whether 
to initiate an investigation.  However, Artic le 212 (1) of the Law on General Administrative 
Procedure (RM OG No. 60/03) provides that any ad ministrative authority in any administrative 
procedure must issue a decision within one month from the filing date of an application.  This 
deadline is applicable in this particular case.   
Question 92 
Article 28 - Activities in the Investigation Procedure:   The investigative activities set forth in this 
article fall short of those provided for in the AD A and ASCM.  For example, the Article 6.7 of 
the ADA and 12.6 of the ASCM require consent fr om the subject firms; notification to and 
agreement by the subject Member government; and disclosure of the results of the verification 
to all interested parties, subject to the confidentiality protections provided under Article 6.5 of the AD Agreement and Article 12.4 of the SCM Ag reement.  In addition, as noted above, the 
Regulations do not guarantee adequate time to respond to questionnaires, oral presentation of 
information, or timely opportunities for commen t and rebuttal.  Please describe how and when 
Montenegro will bring these Regulations into co nformity with the requirements of the ADA and 
ASCM.   
Answer:
 
The investigative activities set forth in Article 28 reflect those provided for in the ADA and ASCM 
that are applicable in Montenegro. 
Article 6.7 of the ADA establishes the right of th e authorities to carry out investigations in the 
territory of other Members, provided they obtain the agreement of the firms concerned and notify the 
representatives of the government of the Member in  question and unless that Member objects to the 
investigation.  This is the right that arises out of the Agreement, and as such is applicable to Member 
States only.  Upon accession, all WTO Agreements will b ecome an integral part of the internal legal 
system and will be directly applicable.  At that  point Montenegro, as a WTO member, will be subject WT/ACC/CGR/8 
Page 36  
 
 to all rights and obligations arising from the Agre ements, including those provided for in Article 6.7 
of the ADA and Article 12.6 of the ASCM Agreement. 
The issue of third parties and their status in the pr oceedings has been explaine d in the answer to the 
first question in this section. 
For details on the guarantee of adequate time to  respond to questionnaires, oral presentation of 
information, and timely opportunities for comment  and rebuttal please see the answer to the 
introductory comment and the answer to the question related to Article 39 of the FTL.  
Question 93 
Article 29 - Restrictions on Investigation Procedu re:  Paragraph 1 of this article provides that 
an investigation may be limited "where the nu mber of applications, exporters or importers, 
types of products or transactions is large."  The WTO standard, set forth under Article 6.10 of 
the ADA, allows sampling "where the number... is so large as to make such a determination 
impracticable."  (Emphasis added.)  Montenegro's  test appears to be more restrictive than is 
warranted by the WTO.  Please explain how Montenegro will bring this regulation into 
conformity with the ADA. 
Answer:
 
This is a translation issue.  The original language of the legislation should be  understood to have the 
same meaning as that of Article 6.1. of the ADA.  
Question 94 
Paragraph 1 further provides that, if sampling is used, the sample may be limited to a 
statistically valid sample or to "the volume of production, sales or exports which can reasonably 
be investigated within the time limit available."  Article 6.10 of the ADA, by contrast, provides 
that the alternative to a statistically valid sample  is "the largest percentage of the volume of the 
exports... which can reasonably be investigat ed."  (Emphasis added.)  The Montenegrin 
language appears to be more restrictive than is  warranted by the WTO.  Please explain how 
Montenegro will bring this regulatio n into conformity with the ADA. 
Answer:  
The wording of the original language of the legisl ation is based on the assumption that that for any 
calculation or statistical investigation the largest perc entage of the volume is used in order to get the 
most accurate results.  Therefore, this provision is to be understood as compliant with Article 6.10 of 
the ADA.  
Paragraph 2 of this article provides for the ca lculation of an individual dumping margin or 
subsidy rate "for any exporter or producer no t initially selected who submits the necessary 
information within the time limits..."  This provision comports with the requirement in 
Article 6.10.2 of the ADA, but not with Article 19.3 of the ASCM.  Under Article 19.3 of the ASCM, an exporter not previously investigated is "entitled to an expedited review" to establish 
an individual countervailing duty rate.  Please explain how Montenegro will incorporate this 
right to an expedited review into its Regulations.  WT/ACC/CGR/8 
 Page 37 
 
 
 Answer:  
Paragraph (2) provides for the right of any expor ter to have the amount of margin calculated 
individually, apparently for the purpose of establis hment of an individual countervailing duty rate.  
Under Article 212 (1) of the Law on General Admini strative Procedure, an administrative authority 
must issue a decision as soon as possible, but not la ter than one month from the filing date of an 
application.  This would appear to meet the require ment for an expedited review in Article 19.3 of the 
ASCM. 
Question 95 
Article 30 - Examination of Accuracy of Information:  Paragraph 1 of this article authorizes an 
investigation "on the basis of the facts available"  if "the interested person refuses access to, or 
otherwise doe not provide necessary informatio n within a period [of time] determined in 
notification referred to in Article 27."   
Please explain what happens when there is mo re than one "interested person", and some 
cooperate, and some do not? 
Neither Article 27 nor Article 26 (to which Article 27 refers) specifies a period of time in which 
information must be provided to the competent auth ority.  Please explain what period of time is 
envisioned in paragraph 30, and amend the Regulations accordingly.  
Answer:  
When there is more than one "interested pers on", and some cooperate, and some do not, the 
competent authority will conduct the investigation on the basis of the information provided by those interested parties that cooperate. 
Under Article 26, paragraph 1 subparagraph 6 the co mpetent authority sets the time limits allowed to 
interested parties for making their views known.  Th e period of time is established on a case by case 
basis and depends on the circumstances of each particular case.   
Question 96 
Article 31 - Confidential Information:  See our comments above with regard to Article 8 of the 
FTL. 
Answer:
 
Please see the answers to the question related to Article 8 of the FTL. 
Question 97 
Article 32 - Notification before a final decision:  This article of the Regulations states that the 
competent authority will notify all interested pa rties of the essential facts "not later than 
15 days before the final determination."  However, Article 39(2) of the FTL provides that interested parties have 30 days to comment on the essential facts of the determination and provide their opinions.  Could Monteneg ro reconcile this apparent inconsistency? 
Answer:
 
This inconsistency will be corrected in a timely manner by amending the Regulation.    
Montenegro apologizes for this error.  WT/ACC/CGR/8 
Page 38  
 
 Question 98 
Article 33 - Voluntary Undertakings:  This articl e permits the competent authority to enter into 
"voluntary undertakings".  However, many of the requirements and protections found in the ADA and ASCM are missing from this regulation.   
For example: 
− Article 8.2 of the ADA and Article 18.2 of the ASCM both bar the competent authority 
from seeking or accepting undertakings unl ess the authority has "made a preliminary 
affirmative determination" of dumping or subsidization and consequent injury.   
− Article 18.2 of the ASCM provision further requires that the authority obtain "the 
consent of the exporting Member."   
− Article 8.5 of ADA and Article 18.5 of the ASCM allow the competent authority to 
suggest an undertaking but prohibit forcing an exporter to enter into an undertaking. 
− Article 8.5 of ADA and Article 18.5 of the ASCM additionally provide that, where an 
exporter or a government does not offer to do  an undertaking or accept an invitation to 
do an undertaking, such decision "shall in  no way prejudice the consideration of the 
case."  
Please explain how Montenegro will bring this re gulation into conformity with the WTO ADA 
and ASCM. 
Answer:
 
Provision of Article 33 is based on the assumption th at the investigation has been initiated and under 
way, which further means that "preliminary affi rmative determination" has been made.  If such 
determination has not take place, the investigation w ould have never been initiated.  Therefore, this 
provision is compliant to Article 8.2 of the ADA and Article 18.2 of the ASCM. 
"The consent of the exporting Member" is the c ontractual obligation arising from the ASCM and 
applicable to WTO Members only.  Upon accession, all WTO Agreements will become an integral 
part of the internal legal system, and will be direct ly applicable.  At that point Montenegro, as a WTO 
member, will be subject to all rights and obliga tions arising from the Agreements, including that 
provided for in Article 18.2 of the ASCM. 
Under the legal system of Montenegro, an admini strative authority cannot force any party to the 
proceeding to do anything, including accepting voluntary undertakings.  Therefore, requirement of 
Article 8.5 of the ADA has been met. 
Under the legal system of Montenegro any party to the administrative proceedings is free to defend its 
interest in any way it chooses to.  The way cho sen does not prejudice the consideration of the case. 
Question 99 
Article 35 - Imposition of antidumping or counter vailing duty:  This article does not appear to 
require that the decision to impose antidumping  or countervailing duties, or any separate 
report, provide all relevant information on matters of  fact or law that have led to the imposition 
of measures, as well as the reasons for the acceptance or rejection of relevant arguments or claims made by exporters or importers, as required by Article 12.2.2 of the ADA and Article 22.5 of the ASCM.  How does Monteneg ro intend to implement these notification 
requirements into its law?  WT/ACC/CGR/8 
 Page 39 
 
 
 Answer:  
This matter is regulated by the Law on Administrative Procedure.  Any administrative decision, 
including decisions to impose antidumping or counte rvailing duties, must include the rationale, with 
all relevant information on matters of fact or law that have led to the imposition of measures, as well 
as the reasons for the acceptance or rejection of rele vant arguments or claims made by the parties to 
the proceedings and third parties, if any.  Th e decision must be served on all parties to the 
proceedings, including any third parties. 
In addition, any relevant decision related to im position of antidumping or countervailing duties must 
be published in the Official Gazette  of the Republic of Montenegro, t hus making it publicly available.  
Therefore, requirements referred to in Article 12.2. 2 of the ADA and Article 22.5 of the ASCM have 
been met. 
Question 100 
We note that the chapter on safeguard measures  does not contain provisions for notification and 
consultation similar to those provided under Arti cle 12 of the Agreement on Safeguards.  Could 
Montenegro please explain how it will bring this chapter into conformity with the notification 
and consultation provisions of the Agreement on Safeguards?  
In addition, as noted above, the chapter on sa feguards requires the authority fails to provide 
notice to all interested parties of their ability to  present evidence and their views and respond to 
presentations of other parties, as required under Article 3.1 of the Agreement on Safeguards.  
Please describe how Montenegro will bring it Regu lations into conformity with these provisions 
of the Agreement on Safeguards. 
Article 39 - Determination of Serious Injury:  This  article sets forth the criteria for determining 
serious injury in a safeguards investigation.  It does not, however, contain the stipulation, 
contained in Article 4.2(b) of the Agreement on Safeguards that "factors other than increased imports" shall not be attributed to increa sed imports.  Please explain and when how 
Montenegro will the elements of Article 39 into consistency with the Agreement on Safeguards. 
Answer:
 
Please see the answer to general comment related to safeguards. 
Question 101 
If Montenegro expects to use trade remedies a fter accession to the WTO, its laws implementing 
these measures must be WTO-compatible.  We s eek a commitment from Montenegro that, from 
the date of accession, it will not use such meas ures unless they are based on  laws and regulations 
that have been notified to the relevant WTO Committees and are WTO consistent. 
Answer:  
Montenegro agrees that from the date of accession, it will not use any trade remedies unless they are 
based on laws and regulations that have been no tified to the relevant WTO Committees and are fully 
WTO consistent.   WT/ACC/CGR/8 
Page 40  
 
 - Law on Copyright and Related Rights of 1 January 2005 (Official Gazette No. 61 of 
Serbia and Montenegro of 24 December 2004) 
Question 102 We appreciate the opportunity to review a nd comment on Montenegro's laws protecting 
intellectual property rights.  We support Monten egro's efforts to harm onize their intellectual 
property rights regime with international standa rds, and encourage its ongoing work in this 
area. 
How does this law meet the requirements of Berne Article 18 (incorporated by reference in the 
TRIPS agreement)? 
Answer:
 
The Berne Convention was ratified by the former Socialist Federal Republic of Yugoslavia on 
12 March 1975 and is binding on Montenegro.  By the act of ratification the Convention became an integral part of the internal legal system and is directly enforceable. In the case of conflict, 
international agreements super sede any domestic legislation. 
The Copyright Law is applicable to all works which, at the moment of its coming into force, have not 
yet fallen into the public domain.  Where a work ha s fallen into the public domain, such work cannot 
not be protected anew. 
Question 103 
Article 15:  Paragraph  (2) of this article allows  the author to waive the Right to be Named in 
"certain cases".  Can Montenegro provide exampl es of cases where the right may be waived and 
examples where the right may not be waived? 
Answer:
 
The meaning of the phrase "certain cas es", as used in the original language of the Law, is "particular 
cases".  Paragraph (2) actually provides for the right of a right-holder to waive his/hers right to be 
named on a copy of the work whenever he/she so chooses. 
Question 104 
Article 17:  "Giving permission for his work to be modified" is an affirmative moral right under 
Article 17.  Given its apparent overlap with the other provisions of Article 17, with Article 18's 
right to oppose unbecoming exploitation, and with Article 30's pecuniary right to authorize "adaptation, arrangement, or other alteration" can Montenegro explain the scope of this right 
in Article 17? 
Answer:
 
Montenegro believes that there is no overlapping in  Articles 17, 18 and 30 and that what may appear 
to be overlapping is the consequence of the local legal tradition. 
Article 17 grants the right-holder an exclusive right to protect the integrity of the work.  Items 1-3 
provide an illustrative list of actions he/she is  entitled to:  oppose the alterations by unauthorized 
persons; oppose the communication of the work to the public in an altered or incomplete form; give 
permission for the work to be modified.   WT/ACC/CGR/8 
 Page 41 
 
 
 Article 18 grants the author an exclusive right to oppose the exploitation of the work in a manner that 
is posing or could pose a threat to his honour or reputation. 
Article 30 grants the author an exclusive right to prohibit or permit adaptation, arrangement or other 
alteration of the work within the context of  public communication and/or broadcasting.  
Question 105 
Article 28:  Please explain the scope of Article 28(3). Answer:
 
Article 28(3) defines wire and wire less transmission as two different activities, i.e. different ways the 
copyrighted materials can be used, where each of  those activities gives grounds for the author to 
require payment for the use (exploitation) of the copyrighted work.   
Question 106 Article 38:  As written, Article 38 is overly broad for a personal use exception.   Is it limited to analog or does it include digital reproductions?   Does it apply to computer programs or other software products?   Could an individual make a photocopy of an entire (copyright protected) book under this 
exception?   
At minimum, this Article should refer to Ar ticle 45's personal use exception, which does set 
forth some guidance on use of this exception. 
Answer:
 
Article 38 has nothing to do with a personal use excep tion.  This provision establishes the right of the 
right holder to collect remuneration from importers or sellers of technical devices that may be used for 
copying of any copyrighted materials, digita l or not (for non-commercial purposes) or from 
businesses providing copying services.  Article 38 does not in any way provide for the right to copy, for personal use or any other purpose.  It rather provides the right to compensation because of the 
activity (copying) that is known to exist due to av ailability of technical devices, but is not easily 
controllable.  This is why the payees of the remune ration are importers and sellers of technical devices 
and businesses providing copying services.  Due to the nature of the right, the remuneration can be 
collected through a collecting society only.  
Question 107 
Article 53:  Does the statutory licence created in this article extend to for-profit educational 
institutions? 
Answer:
 
The statutory licence referred to in this article extends to all educational institutions, including for-
profit ones. WT/ACC/CGR/8 
Page 42  
 
 Question 108 
Article 54:  Article 54 seems to allow any sub sequent reproduction or communication to the 
public of the work upon payment of remuneration, effectively extinguishing the author's ability to further exploit in violation of his or her pecuniary rights provided in Section 4.2 of this law.  As such, this article is an unacceptable compulso ry licence for any literary work that finds its 
way into a media outlet of any sort (i.e., "pub lished in mass media").   Please describe how 
Montenegro will bring this article into conformity with Section 4.2 of this law. 
Answer:
 
This Article does not create a compulsory licence.  Under this article any piece of writing previously 
published in a mass media may be communicated to the public by other media without an express 
permission of the right holder, provi ded remuneration to the right holde r was paid.  However, this is 
not possible where the author expressly prohibits such  communication.  The right of the author to 
prohibit the communication makes the difference, because there is no such right in the case of compulsory licence.   
Question 109 
Article 57:  Does the inheritability of an author's pecuniary rights mean that an author's moral 
rights continue in perpetuity?  If so: 
− Who is the holder of the author's moral rights upon death of the author? 
− Are the moral rights divisible? 
Answer:
 
Yes, moral rights continue in perpetuity.  There is no explicit provision that would name the right 
holder of the author's moral rights after his/hers d eath.  It is understood that successors in pecuniary 
rights and heirs of the author take care of protecti on of moral rights until pecuniary rights expire.    
Under Article 105 of the Copyright Law, upon the e xpiration of the authors' pecuniary rights, the 
associations of authors and institutions in the fields of science and arts take care of the protection of 
authors' moral rights.  In addition, any person is en titled to protect the right of authorship and integrity 
of the works, as well as to oppose any form of unb ecoming exploitation of the works of authorship. 
Moral rights are not divisible. Question 110 Over-regulation of private contracts can hamp er economic activity and may have unintended 
consequences when well meaning statutes are a pplied across the board to unique situations.  
The experience of some Members States has been that private parties and the market are the 
best regulators of private contracts.  Questions  concerning Articles 68, 70, and 85 below, as well 
as Articles 90 and 118, illustrate this concern. 
Answer:
 
Montenegro shares the opinion that private parties a nd the market are the best regulators of private 
contracts.  The provisions referred to are mostly  the consequence of European and local legal 
traditions.  It has to be noted, however, that in pr actice licensing contracts cover almost all issues that 
may arise, and that these provisions are rarely, if ever, used.   WT/ACC/CGR/8 
 Page 43 
 
 
 Question 111 
Article 68:  This article provides that an author shall have the right to request a modification to 
a concluded contract if the profit made from the exploitation of his work is disproportionate to 
the previously agreed upon remuneration. 
Do contacting parties in other areas (e.g., sale s contracts) likewise have the right to request 
renegotiation of a contact based on the eventual resale price of an item? 
Answer:  
Under the Law on Contracts and Torts contracting pa rties in other areas have the right to request 
changes of the contract based on substantially ch anged circumstances that have occurred after the 
contract was made and where such circumstances signi ficantly affect the fulfilment of the contractual 
obligation.  However, such circumstances do not app ear to include a resale price of an item that was 
subject of the contract as a single reason to request changes of the contract. 
Question 112 
To whom does the author make the request for modification?  The other contracting party?  A 
judge? 
Answer:  
The request is initially made to the other contrac ting party.  If the other contracting party does not 
agree to modify the contract, a lawsuit may be file d before the court to request a decision that would 
modify the contract.    
Question 113 
If the request is made to the other contracting party: 
Presumably the other contracting party would not agree.  Is the right limited to the right to 
make a request? 
Answer:  
Yes, the right limited to the right to make a request. 
Question 114 
Is there a corresponding duty for the other contra cting party to consider the request?  What 
criteria are used? 
Answer:  
There is no corresponding duty for the other contracting party to consider the request. 
Question 115 
If the request is made to a judge:  The ju dge would appear constrained to analyse the 
comparison of the profit from exploitation wi th the contractual remuneration.  The analysis 
presupposes that there should be a logical link between the two thereby excluding other factors WT/ACC/CGR/8 
Page 44  
 
 such as risks, both none and unknown, as well as the skill and resources utilized to achieve the 
profit.  All of which may have very little to do with the value of the original work.  Could Montenegro explain the linking of the profit fr om exploitation to the contractual remuneration? 
Answer:
 
The court would take into account all circumstances when deciding the case including and/or 
excluding any relevant factors as the case may be.  Based on detailed analysis and evidence submitted 
by all parties the court ether grants or refuses to grant the request for modification of the contract. 
Question 116 
If authors want a percentage of the profits of the exploitation of their work, can't they negotiate 
and contract for them? 
Answer:  
Authors are free to negotiate a percentage of the profits of the exploitation of their work. 
Question 117 
Why does Montenegro consider this right so funda mental as to proscribe authors from waiving 
this right in advance under subparagraph (4)? 
Answer:  
Traditionally, authors are considered to be the w eaker negotiating party and this provision is intended 
to protect them against waiving the right under the pressure of the stronger party. 
Question 118 
Does this right attach to subsequent right hold ers who purchase the right of exploitation (e.g., 
subsequent copyright owners not privy to the orig inal contact), or is the author limited to a 
request for modification of the contract based on ly on the profits gained by the first contracting 
party? 
Answer:  
This right does not attach to subsequent right hol ders who purchase the right of exploitation.  The 
author is limited to request modification of the contract from the first contracting party only.  
Question 119 Article 70:  Pursuant to this article, the author  may withhold the permission granted or revoke 
the licensed pecuniary right, if he/she is of the op inion that the exploitation of the work could be 
detrimental to his/her creative or personal reput ation, for reasons that arise subsequent to the 
conclusion of the copyright contract, and for wh ich the acquirer of the right is not responsible. 
The author already has the right to oppose unb ecoming exploitation of his/her work under 
Article 18.  The author can enforce his/her rights under Article 18 without regard to when the 
contract was concluded and without a require ment to indemnify the right holder.  Can 
Montenegro explain what problem Article 70 is intended to fix and how the right differs from 
Article 18?  WT/ACC/CGR/8 
 Page 45 
 
 
 Answer:  
Article 18 merely establishes the right of the au thor to oppose unbecoming exploitation of his/her 
work, as a basic right. 
Article 70 regulates the situation where there is a contract and a licence was granted, and where 
unbecoming exploitation has taken place after the licen ce was granted.  It provides for detailed rights 
and obligations of contracting parties to the licensing agreement under such circumstances.  
Question 120 
Article 85:  Article 4 of this law provides that modifications of works of authorship shall be 
deemed works of authorship and Article 8 of this law provides that authors enjoy moral and 
pecuniary rights with regard to their work of authorship.  In light of the articulation of those 
rights, what is the efficacy of only listing some of the rights that an author (or his/her heirs) 
shall cede under a contract of modification of a work of authorship under Article 85? 
Answer:  
Article 85 provides details on modification of a work of authorship specifically within the context of 
making a film or television work, including the e xhaustive list of rights that are assumed to be 
transferred, unless otherwise provided by the contract. 
Question 121 
Article 105:  Article 105 seems to envision a scenario in which many persons (anyone under 
sub-section 2) can enforce the moral rights of a deceased author.  In the case of disagreement, 
who speaks for the author?  How does this Article relate to Article 56? 
Answer:  
There is no clear provision on this issue in the Law.  It is fair to assume that heirs of the author, if any, 
would have predominant influence.  In the absence  of heirs, the generally recognized significance of 
the institution involved would be a prevailing factor.   
Article 105 establishes the right in general, whereas Article 56 refers specifically to the heirs of the 
author, who are entitled to exercise all powers with respect to the author's moral rights, except for the 
right to publish an undisclosed work (if the author has prohibited it), and the right to modify the work, 
irrespective of the existence of pec uniary rights and holders thereof.   
Question 122 
Article 106:  Subparagraph 1 in Article 106 (1), a ppears to provide protection to the works of 
foreign "citizens" if the Copyright is "recognized on the basis of an international treaty ratified 
by Serbia and Montenegro". 
We note that although the Article appears to  provide protection for the work, it does not 
expressly provide that the protection given will be on  the basis of national treatment.  How does 
Montenegro guarantee national treatm ent to foreign Copyright holders?  WT/ACC/CGR/8 
Page 46  
 
 Answer:
 
Virtually all relevant international copyright agr eements are binding on Montenegro and therefore, 
foreign persons, citizens of countries signatories to th ese agreements have rights identical to those of 
domestic ones.  Furthermore, upon accession, all WTO Agreements, including TRIPS, will become 
integral part of Montenegro's internal legal sy stem, superseding any domestic legislation.  This 
guarantees national treatment with respect to copyright.    
Question 123 
TRIPS Article 1 requires national treatment for the "nationals of other members".  We note 
that Article 106(1) provides that protection is provided to the works of foreign "citizens" as opposed to "nationals".  The use of the word "citizens" would appear to be more restrictive 
than "nationals," which is defined broadly in the footnote to TRIPS Article 1.  Is this a 
translation issue or is a distinction being made in the law between the two terms?   
Answer:
 
This could be a translation issue.  The origin al language of the legislation does not make the 
distinction between "nationals" and "citizens" as English does.  
Question 124 Article 125:  Please explain how the compulso ry licence under Articl e 125 will operate in 
practice and what the scope of this licence covers. 
Answer:
 
Article 125 does not establish a compulsory licence.  Once released, contents of the phonograms are 
usually broadcast and/or communicated, and ther e is no need to obtain any licence for such 
broadcasting and/or communication.  However, pr oducers of published phonograms have a right to 
remuneration for such use of their phonograms.  Due to  the nature of the right and the way of its use, 
the remuneration is collected through a collecting society.  
- Law on Trademarks of 1 January 2005 (Official Gazette No. 61 of Serbia and 
Montenegro of 24 December 2004) 
Question 125 
The Law of Trademarks for Serbia and Monteneg ro does not appear to follow the principle of 
National Treatment for foreign applicants, as re quired by TRIPS Article 3. Article 6 of Serbia 
and Montenegro's Trademark Law states that forei gn nationals will enjoy the same rights as 
nationals if reciprocity of rights exists.  A system that requires reciprocal protection in order for foreign rights holders to be considered for the benefits of protection is TRIPS-inconsistent.    
Answer:
 
Under Article 6 a foreign person enjoys the same rights with respect to trademark protection as a 
domestic person, if such rights derive from either in ternational agreements or from the principle of 
reciprocity.  However, virtually all relevant in ternational trademark agreements are binding on 
Montenegro and therefore, foreign persons, nationa ls of countries signatories to these agreements 
have rights identical to those of domestic  nationals.  Furthermore, upon accession all WTO 
Agreements, including TRIPS, will become an integr al part of Montenegro's internal legal system,  WT/ACC/CGR/8 
 Page 47 
 
 
 superseding any domestic legislation.  This guara ntees national treatment with respect to trademarks 
to the nationals of all members of the WTO or other relevant agreements.    
- The Law on Geographical Indications for the Federal Republic of Yugoslavia of 1 April 
1995 (Official Gazette No. 15 of the Federa l Republic of Yugoslavia of 24 March 1995) 
Question 126 
We understand that Serbia and Montenegro will soon have a new Law on Geographical 
Indications in force, replacing the 1995 Law.  Consequently, our comments and questions are 
intended to raise issues that should be addressed by the new law. 
The trademark law does not indicate how geographi cal indications will be protected.   Please 
describe how geographical indications a re protected under Montenegrin law.   
− In what way will the law of Serbia and Montenegro provide the legal means for 
interested parties to prevent the use of misl eading geographical indications as required 
under Article 22 of the TRIPs Agreement - through its trademark system, through unfair competition laws, through a sui gen eris system, through an administrative 
labelling system, or a combination of such systems?     
− In what way will the law provide the legal  means for interested parties to prevent 
misleading use of geographical indication s, which constitutes an act of unfair 
competition within the meaning of Article 10bis of the Paris Convention? 
− Will Montenegro require the intercession of a foreign government on behalf of its 
nationals in order for the foreign national to apply and protect its geographical indication?  
− How will the law provide the legal means for interested parties to prevent the use of 
false geographical indications used on wines and spirits, as required under Article 23 of 
the TRIPS Agreement?   
− What procedures will be put in place for the interested parties or owners of third-
country geographical indications to prevent th e use of foreign geographical indications? 
 (We have found that by protecting geographical indications through the trademark 
system as certification and collective mark s, which are types of trademarks, we can 
provide TRIPS-consistent levels of protectio n to GIs, either of domestic or foreign 
origin.  The U.S. system is a good model for a system that is transparent, fluid, easy to use, and fair.  The GI system uses administrative trademark structures already in place 
and provides opportunities for any interested pa rty to oppose or cancel a registered GI 
if that party believes that it will be damaged by the registration or continued existence of 
a registration.) 
− In what way will the law of Serbia and Montenegro preserve the legal rights of 
trademark owners, consistent with Articles 16(1) and 24(5) of the TRIPS Agreement?  
Specifically, will trademarks in Serbia and Montenegro be protected from confusingly 
similar and later in time geographical indications? 
Answer:
 
Montenegro appreciates comments and concerns expressed .  It has to be noted however, that under the 
Constitutional Charter of Serbia and Montenegro  all IP related laws, including the Law on 
Geographical Indications, are enacted by the Union Parliament and apply equally in both Member 
States.  Consequently, geographical indications cannot  be protected under Montenegrin law, but rather 
by Union law applicable in Montenegro.  Monteneg ro will be able to influence the new law through WT/ACC/CGR/8 
Page 48  
 
 its MPs in the Union Parliament and make sure th at geographical indications are properly protected 
and all concerns are met.  As soon as the draf t of the new Law on Geographical Indications is 
finalized, it will be available for review and de tailed answers to questions will be provided.  
- Regulation on Actions of the Customs Au thority Applicable to Goods Suspected of 
Infringement of Intellectual Property Rights  (RM OG 25/02) 
Question 127 
Article 1 - Scope of Application:  Is item 1 in  paragraph (2) addressing grey market goods and 
parallel imports? 
Please explain what exception item 2) in paragr aph (2) is attempting to address.  This item 
appears to create a broad exemption, which po tentially may include illegal infringing goods.  
Does Montenegro intend to create such a broad exemption?  
Answer:
 
Item 1) in paragraph (2) does not address grey market  goods and parallel imports.  It merely states that 
goods protected by a trademark, design or copyright that were produced under the licence of the right holder can be placed in a customs pro cedure without the latter's consent. 
Item 2) of paragraph (2) does not create a broad exemption.  This item addresses the situation in 
which there is a licence by a right holder to u se a trade mark, but there is a dispute between the 
licensor and licensee as to whether all requirements set by the contract have been met.  This is a 
contractual matter, and the Customs Administration h as neither the right nor the intention to interfere 
in such matters.  Any such dispute is to be eventual ly resolved by the Court.  The goods referred to in 
this provision are not counterfeit (because there is  a licence contract) and as such should not be 
subject to this Regulation or any action by the customs authorities. 
Question 128 
Article 2 – Definitions:  The definition of "infringing good" in item 3, paragraph (1) of this 
article spells out the definition of "Protection De feating Devices, which is a defined term in item 
8 of this paragraph.  Consequently, we recomm end deleting the final clause, "goods primarily 
designed, produced or adapted for the purpose of  enabling or facilitating the circumvention of 
any effective technological measure, device or comp onent that is designed to prevent or restrict 
acts, in respect of works or other protected s ubject matter, which are not authorised by the 
right holder" and replacing it with the define d term:  "Protection Defeating Devices".     
In addition, the definition of "Infringing Goods" in item 3 of paragraph (1) puts an additional 
requirement on what is considered an illegal "e ffective technological measure," by requiring 
that it be "designed to prevent or restrict acts."   This requirement is not found in the definition 
of "Effective Technological Measure" found in it em 9 of paragraph (1).  Because the term 
"Protection Defeating Device" includes within it s definition "Effective Technological Measure", 
that term ("Protection Defeating Device") should be used I item 3 of paragraph (1) to avoid the 
current inconsistency regarding what is an illegal effective technological measure.   
If Montenegro decides not to incorporate the term "Protection Defeating Devices" into the 
definition of "Infringing Goods" in item 3, the de finition should be deleted because it is not used 
elsewhere in the Regulations.   WT/ACC/CGR/8 
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 Answer:  
Montenegro appreciates the effort made and detaile d analysis of this provision.  Although it appears 
that there are some inconsistencies they are the con sequence of a desire to include all situations and 
means of infringement of IP rights.  Montenegro w ill take steps to streamline this provision, as well as 
any others that may require improvement. 
Question 129 Article 6 - Administrative Fees:  Please confirm th at the charges applied pursuant to this article 
will be consistent with TRIPS Article 41.2, wh ich provides that enforcement procedures "shall 
not be unnecessarily … costly."   
Answer:
 
Montenegro confirms that charges applied pursuant to this Article will not be unnecessarily costly, as 
provided for in TRIPS Article 41.2.  Montenegro will also make sure that all charges will be 
consistent with GATT Article VIII and reflect  the costs of services actually rendered.   
Question 130 
Article 7 - Issuing a Decision:   Does the importer have any rights in the process leading to the 
Customs Administration's decision?  Is there any type of investigation?   
Answer:  
Article 7 refers to the situation in which the righ t holder has submitted an application and requested 
the suspension of the customs procedure.  An appli cation is submitted prior to importation, so at the 
time of filing the application the actual importer is not known and consequently  cannot take part in 
any proceedings leading to the Customs Administration' s decision to grant an application.  However, 
where goods placed in the customs procedure are suspect ed to infringe the applicant's right and their 
release is suspended, the importer is informed of such suspension, and as a party to the proceedings 
has the right to appeal the decision and take any ot her measure under the law to protect his interests.  
Both the right holder and the importer are entitled to submit evidence to support their claims.  
Therefore, the process includes el ements of an investigation. 
Question 131 Article 11 - Suspension of the Procedure:  Can ex officio actions of Customs officials be 
appealed? 
Answer:
 
All actions of customs authorities can be appealed , including ex officio actions referred to in 
Article 11. 
Question 132 Please identify the "authorities competent fo r protection of intellectual property rights" 
referred to in item 3 of paragraph 2.  Is it the Federal Intellectual Property Office and the Federal Ministry for Industry and Internal Commerce?    WT/ACC/CGR/8 
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 Answer:
 
"Authorities competent for protection of intellectual pr operty rights" referred to in item 3 of paragraph 
2 is the Union Intellectual Property Office, which operates under the aegis of the Union Ministry for 
Internal Economic Relations. 
Question 133 
Article 13 - Compensation of Damages:  The re ferences to Articles 5.1 and 7.1 do not make 
sense in the context of this article.  Pl ease confirm that those references are correct. 
Answer:  
This is the error in translation.  The correct references are to Articles 3.1 and 11.1.  Correctly 
translated Article 13 reads as follows: 
"Article 13  
The customs authority shall not be liable to the importer or the owner of the goods for 
any damages resulting from withholding the release of the goods pursuant to Article 1, paragraph 1 and Article 11 paragraph 1 of this Regulation. 
However, the applicant shall pay th e importer and the owner of the goods 
compensation for any injury caused to them through the wrongful detention of 
goods." 
 
  WT/ACC/CGR/8 
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 ANNEX 1 
DECISION ON THE CONTENT OF THE STUDY ON ECONOMIC JUSTIFICATION FOR 
ESTABLISHING FREE ZONES AND FREE WAREHOUSES (RM OG No. 53/04) 
Article 1 
This Decision defines more closely the conten t of the Study on Economic Justification for 
Establishing Free Zones and Free Warehouses (hereinafter referred to as: the Study)  
Article 2 
The Study consists of: 
1.  Introduction        (a)  Founder particulars (data about business and solvency); 
       (b)  Data about investment programme; 
       (c)  Activities which will be carried out;        (d)  Summary 
2.  The legal basis and conditions fo r establishing free zones and free warehouses 
3.  The basic elements of the Act on Establishing Free Zones and Free Warehouses 
4.  Planned production and the market  on which the products will be placed: 
 (a)  Sale analysis and market projection; 
       (b)  Supply analysis and projection;        (c)  Possible and expected volume of production and the method of disposing;        (d)  Analysis of Montenegrin and regional markets; 
5.  Available capacities and infrastructure: 
 (a)  Existing and planned facilities; 
       (b)  Existing and planned infrastructure. 
6.  Preconditions for conducting customs and inspection supervision and other types of 
supervision 
7.  Environmental impact assessment in accordance with regulations 
8.  Free zone management: 
       (a)  Operator; 
       (b)  General business rules and free zone and free warehouse tariffs;        (c)  Current number of employees a nd required number of executives with professional 
structure and employment dynamics; 
      (d)  The manner of carrying out urban responsibilities.  
9.  The economic and financial analysis: 
      (a)  The volume and the structure of investments as well and of funds provided for 
activities which will be carried out in the zone; 
      (b)  Expected results of business operations;       (c)  Calculation and the structure of necessary working capitals; 
      (d)  Calculation of production costs and the creation of total income; WT/ACC/CGR/8 
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       (e)  Planned and expected financial obligations, by types; 
 (f)  Cash flow;        (g)  Economic trend. 
10.  Impact assessment of economical justif ication of the Study on Montenegrin economy. 
      (a)  Dynamical evaluation of the efficiency in attracting foreign investments and the rise 
of investments; 
      (b)  Evaluation of project market efficiency;       (c)  Impact on export (export growth and import decrease);       (d)  Impact on employment;       (e)  Transfer of modern technologies; 
      (f)  Assessment of the influence on the development of domestic economic agents; 
      (g)  Proposals for reducing business barriers – simpler administrative procedures;       (h)  Impact on the overall local community development.   
11.  Total evaluation (recapitulation of the project)  
Article 3 
This Decision shall come into force on the eighth day from the day of its publishing in the "Official 
Gazette" of the Republic of Montenegro. 
No.: 02-4803 Podgorica, 16 July 2004 Government of the Republic of Montenegro 
President, 
Milo Djukanovic 
 
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