WORLD TRADE  
ORGANIZATION  WT/REG178/1 
15 November 2004 
 
 (04-4844) 
Committee on Regional Trade Agreements Original:   English 
  
 
FREE TRADE AGREEMENT BETWEEN  
ALBANIA AND SERBIA AND MONTENEGRO 
 
  The following communication, dated 8 October 2004, is being circulated at the request of the 
Delegation of Albania.
1 
 
_______________ 
 
 
FREE TRADE AGREEMENT BETWEEN SERBIA AND MONTENEGRO  
AND THE REPUBLIC OF ALBANIA 
 
PREAMBLE  
  Desirous  to develop and strengthen fri endly relations, especially in the fields of trade and 
economic cooperation, with the aim to contribut e to the development of economic cooperation 
between the two countries and to increase the scope of mutual trade exchange,   Serbia and Montenegro and the Republic of Albania  (hereinafter called "the Contracting 
Parties"), 
 
 Reaffirming  their commitment to the principles of  market economy, which constitutes the 
basis for their relations,   Considering  their common desire to participate ac tively in the process of international 
economic integration, 
 
 Expressing  their readiness to cooperate in finding the means and ways for strengthening of 
this process,   Resolved  to this and to eliminate progressively the obstacles to substantially all their mutual 
trade in accordance with the provisions of the Ge neral Agreement on Tariffs and Trade (hereinafter 
“GATT 1994”) and the Marrakesh Agreement, establishing the World Trade Organization 
(hereinafter “WTO”),   Declaring  their readiness to undertake activities with a view of promoting harmonious 
development of their trade, as well as of expanding  and diversifying their mutual cooperation in the 
fields of joint interest, including fields not covere d by this Agreement, thus creating a framework and 
supportive environment, based on equality, non-discrim ination, and balance of rights and obligations, 
 
                                                     
 
1 The Annexes of the Agreement have been submitted to the Secretariat for consultation by interested 
Members (office 1174). WT/REG178/1 
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  Firmly  decided that this Agreement will promote th e intensification of mutually beneficial 
trade between them and will bring to the process of integration in Europe,   Considering  that no provision of this Agreemen t may be interpreted as exempting the 
Contracting Parties from their obligations under ot her international agreements, especially the GATT 
1994 and the WTO, 
  Have Decided , as follows: 
 
Article 1 
 
Objectives
 
 1. The Contracting Parties shall gradually establish a free trade area in a transitional period 
ending by 1 January 2007, starting from the entry into  force of this Agreemen t, in accordance with the 
provisions of this Agreement and in conformity with  the definition, set out in Article XXIV of the 
GATT 1994,  and the WTO. 
2. The objectives of this Agreement are: 
- to increase the economic cooperation of the two countries and to raise the standard of 
living of their population,  
 
- to gradually eliminate restrictions on trade in goods, 
 - to provide fair conditions of competition fo r trade between the Contracting Parties, 
 - to contribute in this way, by removal of barriers to trade, to the harmonious 
development and expansion of world trade, 
 - to enhance cooperation between the Contracting Parties, 
 - to create conditions for further promotion of investments, particularly for the 
development of joint investment in both countries, 
 
- to promote trade and cooperation of the Contracting Parties on third countries markets. 
  
CHAPTER I 
 
INDUSTRIAL PRODUCTS 
 
Article 2 
 
Scope
 
 
 The provisions of this Chapter shall apply to industrial products, originating in one of the Contracting Parties. For the purpose of this Agreem ent, the term “industrial products” means products 
falling within Chapters 25 to 97 of Harmonized Co mmodity Description and Coding System with the 
exception of the products listed in Annex I. 
  WT/REG178/1 
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 Article 3 
 
Basic Duties  
 1. For commercial exchanges, covered by this Agre ement, customs tariffs wich are in force in 
the contracting Parties, will be applie d to the classification of imported goods. 
2. For each product the basic duty, to which successive reductions, set out in this Agreement, are 
to be applied, shall be the Most Favoured Nation rate of duty, applicab le by the Contracting Parties on 
the date of entry into force of this Agreement. 
3. If after this date, any tari ff reduction is applied on an erga omnes  basis, such reduced duties 
shall replace the basic duties under paragraph 2 of this  Article as from the date of application of such 
reductions.  
4. The reduced duties, calculated in accordance w ith paragraph 2 of this Article, shall be 
rounded without decimal numbers, in accordance with  arithmetical rules. Thus, decimal additions 
from 0.1 - 0.5 should be avoided, while decimal 0.5 - 0.9 shall increase the principal by 1. 
5. The Contracting Parties shall mutually ex change information on their basic duties. 
Article 4 
 
Customs Duties On Imports
 
 1. No new customs duties on imports shall be in troduced, nor shall those already applied be 
increased in trade between the Contracting Parties from the date of entry into force of this Agreement. 
2. Customs duties on imports, applicable in the Re public of Albania on products, originating in 
Serbia and Montenegro shall be abolished upon the entry into the force of this Agreement, except 
those specified in Annex II. Custom duties that are specified in Annex II shall be progressively 
reduced and abolished in accordance with the timetable provided in Annex II. 
3. Customs duties on imports, applicable in Serbia  and Montenegro on products, originating in 
the Republic of Albania shall be abolished upon the entry into the force of this Agreement, except 
those specified in Annex III. Cust om duties that are specified in Annex III shall be progressively 
reduced and abolished in accordance with the timetable provided in Annex III. 
4. Any changes in commitments of the Contracting Parties to the European Union (hereinafter 
called “EU”) in this regard shall be  referred to the Joint Committee, as defined in Article 33 of this 
Agreement. 
Article 5 
 
Charges Equivalent To Customs Duties On Imports
 
 
1. No new charges, having effect equivalent to customs duties on imports, shall be introduced in 
trade between the Contracting Parties from the da te of entry into force of this Agreement. 
2. All charges, having effect equivalent to cust oms duties on imports, shall be abolished on the 
date of entry into force of this Agreement. WT/REG178/1 
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 Article 6 
 
Fiscal Duties
 
 
 The provisions of Article 4 of this Agreement shall also apply to customs duties of a fiscal 
nature. 
 
Article 7 
 
Customs Duties On Exports And Charges Having Equivalent Effect  
 
1. No new customs duties on exports or charges, ha ving equivalent effect, shall be introduced in 
trade between the Contracting Parties from the da te of entry into force of this Agreement. 
2. All customs duties on exports and charges, having equivalent effect sha ll be abolished on the 
date of entry into force of this Agreement. 
Article 8 
 
Quantitative Restrictions On Exports And Imports And Measures Having Equivalent Effect  
 1. No new quantitative restrictions on exports and imports or measures having equivalent effect, 
shall be introduced nor shall the existing be ma de more restrictive in the trade between the 
Contracting Parties from the date of entry into force of this Agreement. 
2. All quantitative restrictions on exports and imports and measure s having equivalent effect, 
shall be abolished on the date of entry into force of this Agreement except those on imports listed in 
Annex IV. 
Article 9 
 
Technical Barriers To Trade
 
 1. The rights and obligations of the Contracting Par ties, relating to technical barriers to trade, 
regulations (technical regulations, standards a nd conformity assessment procedures) and the 
respective measures, shall be governed by the WTO Agreement on Technical Barriers to Trade. 
2. The Contracting Parties shall cooperate a nd exchange information in the field of 
standardization, metrology, conformity assessment and accreditation, with the aim of eliminating 
technical barriers to trade. 
3. Each Contacting Party, upon a request from the other Contracting Party, shall submit 
information on particular individual cases of standards, technical rules or similar measures. 
4. The Contracting Parties will, where appropriate, enter into negotiations for the conclusion of 
agreements on mutual recognition in the field of  conformity assessment, in the spirit of the 
recommendations of the WTO Agreement on Technical Barriers to Trade. 
 
  WT/REG178/1 
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 CHAPTER II 
 
AGRICULTURAL PRODUCTS 
 
Article 10 
 
Scope  
  The provisions of this Chapter shall apply to agricultural products (hereinafter called 
"agricultural products"), falling w ithin Chapters 1 to 24 of the Harmonized Commodity Description 
and Coding System, and the products listed in A nnex I to this Agreement, originating in the 
Contracting Parties.  
Article 11 
 
Quantitative Restriction On Exports And Measures Having Equivalent Effect
 
 1. No new quantitative restrictions on exports or measures having equivalent effect shall be 
introduced nor shall the existing be made more restri ctive in the trade between the Contracting Parties 
from the date of entry into force of this Agreement. 
2. All quantitative restrictions on exports in the trade between the Contracting Parties and 
measures, having equivalent effect, shall be abol ished on the date of entry into force of this 
Agreement. 
Article 12 
 
Exchange Of Concessions
 
 
1. The Contracting Parties declare their readiness to foster, as far as their agricultural policies 
allow, the harmonious development of trade in agricultural products, and to discuss this issue 
periodically within the Joint Committee.  
2. In pursuance of this objective, the Contracting Parties grant each other the concessions 
specified in Protocol A, providing measures to f acilitate trade in agricultu ral products, in accordance 
with the provisions of this Chapter a nd those, laid down in this Protocol. 
3. Taking into account: 
- the role of agriculture in their economies, 
 - the development of trade in agricultural products between the Contracting Parties, 
 
- the particular sensitivity of the agricultural products, 
 - the rules of their agricultural policies, 
 - the results of the multilateral trade ne gotiations under the GATT 1994 and the WTO, 
 
the Contracting Parties shall examine the possib ilities of granting each other further concessions. 
 WT/REG178/1 
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 Article 13 
 
Concessions And Agricultural Policies
 
 1. Without prejudice to the concessions, granted under Article 12 of this Agreement, the 
provisions of this Chapter shall not restrict in any way the pursuance of th e respective agricultural 
policies of the Contracting Parties or the appli cation of any measures under such policies, including 
the implementation of the provision of the WTO Agreement on Agriculture. 
2. The Contracting Parties shall notify to the Joint Committee changes in their respective 
agricultural policies pursued or measures applied, which may affect the conditions of agricultural 
trade among them, as provided for in this Agreement.  Upon request of any Contracting Party, prompt 
consultations within the Joint Committee sh all be held to examine the situation. 
Article 14 
 
Specific Safeguards
 
 
 Notwithstanding other provisions of this Agreem ent and, in particular, Article 20 of this 
Agreement, and given the particular sensitivity of  the agricultural products, if imports of products, 
originating in a Contracting Party, which are subj ect to concessions, granted under this Agreement, 
cause serious disturbances to the markets of the other Contracting Party,  the Contracting Party 
concerned shall immediately enter into consultations  to find an appropriate solution. Pending such 
solution, the Contracting Party concerned may take measures it seems necessary. The type and the 
duration of the measure should not go beyond what is  strictly necessary to remedy this situation.  
 
Article 15 
 
Sanitary And Phytosanitary Measures  
 1. The Contracting Parties shall apply their nationa l regulations in the fields of veterinary, 
sanitary and phytosanitary matters in a way, co rresponding to the WTO Agreement on Sanitary and 
Phytosanitary Measures. 
2. Measures, concerning veterinary and phytosanita ry control among the Contracting Parties, 
shall be harmonized on the basis of the EU legislation. 
3. The Contracting Parties commit themselves not to introduce discriminatory measures or other 
measures which lead to unduly restricting the flow of information about the level of sanitary and 
phytosanitary protection of animals, plants and products. 
 
CHAPTER III 
 
GENERAL PROVISIONS 
 
Article 16 
 
Internal Taxation
 
 1. The Contracting Parties shall refrain from any m easures or practices of internal fiscal nature 
establishing, whether directly or indirectly, discrim ination between the products, originating in the 
Contracting Parties.  WT/REG178/1 
 Page 7 
 
 
 2. Producers and exporters may not benefit from repa yment of internal taxation in excess of the 
amount of indirect taxation imposed  on products exported to the territo ry of one of the Contracting 
Parties. 
Article 17 
 
Customs Unions, Free Trade Areas And Frontier Trade  
 1. This Agreement shall not prevent the mainte nance or establishment of customs unions, free 
trade areas or frontier trade arrangements to the ex tent that these do not negatively affect the trade 
regime of the Contracting Parties and in particular  the provisions, concerning rules of origin, provided 
for in this Agreement. 
2. Upon request the Contracting Parties shall info rm each other of any agreement, establishing 
customs unions or free trade areas. 
Article 18 
 
Structural Adjustment
 
 1. Exceptional measures of limited duration, deroga ting from the provisions of Article 4 of this 
Agreement, may be taken by any of the Contracting Parties in the form of increased customs duties. 
2. These measures may only concern infant i ndustries, or certain sectors undergoing 
restructuring or facing serious difficulties, particularly where these difficulties produce important 
social problems. 
3. Customs duties on imports, applicable in the Contracting Party concerned to products 
originating in the other Contracting Party, introduced by these measur es may not exceed 25% ad 
valorem  and shall maintain an element of preference fo r products, originating in the other Contracting 
Party. The total value of imports of the product,  subject to these measures, may not exceed 15% of 
total imports of industrial products originating in th e other Contracting Party, as defined in Article 4 
of this Agreement, during the last year for which statistical data is available. 
4. The Contracting Party concerned shall info rm the Joint Committee of any exceptional 
measures it intends to take and, upon request of th e other Contracting Party, consultations shall be 
held within the Joint Committee on such measures a nd the sectors to which they apply, before they 
are applied. When taking such measures, the C ontracting Party concerned shall provide the Joint 
Committee with a schedule for the elimination of th e customs duties, introduced under this Article. 
This schedule shall provide for a phasing out of these duties, starting at the latest two years after their 
introduction, at equal annual rates. The Join t Committee may recommend a different schedule. 
Article 19 
 
Antidumping And Countervailing Measures
 
  Nothing in this Agreement shall prejudice or  affect in any way the taking, by either 
Contracting Party of antidumping or countervailing measures in accord ance with Article VI of the 
GATT 1994, the Agreement on Implementation of Ar ticle VI of the GATT 1994 and the Agreement 
on Subsides and Countervailing Measures. 
 WT/REG178/1 
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 Article 20 
 
General Safeguards
 
  Where a product is being imported into any of the Contracting Parties in such increased 
quantities and under such conditions as to cause or threaten to cause: 
 
(a) serious injuries to domestic producers of a lik e or directly competitive products in the 
territory of the importing Contracting Party, or 
(b) serious disturbances to any related sector of the economy or difficulties which could 
bring about serious deterioration in the economic situation of a region,  
the Contracting Party concerned may take a ppropriate measures under the conditions and in 
accordance with the procedure laid down in Article 23 of this Agreement. 
 
Article 21 
 
Re-Export And Serious Shortage
 
 1. Where compliance with the provisions of Artic les 7 and 8 of this Agreement leads to: 
(a) re-export towards a third country against which the exporting Contracting Party 
maintains for the product concerned quantita tive export restrictions, export duties or 
measures or charges having equivalent effect; or 
(b) a serious shortage, or threat thereof,  of a product essential to the exporting 
Contracting Party; 
and where the situations referred to above give rise or are likely to give rise, to major difficulties for 
the exporting Contracting Party, that Contracti ng Party may take appropriate measures under the 
conditions and in accordance with the procedures, laid down in Article 23 of this Agreement. 
 2. Measures, taken as a result of the situation referre d to in paragraph 1 of this Article, shall be 
applied in a non-discriminatory manner and be elim inated when conditions no longer justify their 
maintenance. 
Article 22 
 
State Monopolies
 
 1. The Contracting Parties shall adjust progressively any state monopoly of a commercial 
character so as to ensure that no discrimina tion regarding the conditio ns under which goods are 
procured and marketed exists between nationals of the Contracting Parties. 
2. The Joint Committee shall be informed about the measures adopted to implement this 
objective.  WT/REG178/1 
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 Article 23 
 
Procedure For The Application Of Safeguard Measures  
 1. Before initiating the procedure for the appli cation of safeguard measures set out in the 
following paragraphs of this Article , the Contracting Parties shall endeavor to solve any differences 
between them through direct consultations. 
2. If a Contracting Party subjects imports of products, liable to give rise to the situation, referred 
to in Article 20 of this Agreement, to an admi nistrative procedure, having as its purpose the rapid 
provision of information on the trend of trade flow s, it shall inform the other Contracting Party. 
3. Without prejudice to paragraph 7 of this Ar ticle, a Contracting Party, which considers 
resorting to safeguard measures shall promptly no tify the other Contracting Party thereof and supply 
all relevant information. Consulta tions between the Contracting Parties shall take place without delay 
in the Joint Committee with a view to finding a mutually acceptable solution. 
4. As regards: 
- Articles 19, 20 and 21 of this Agreement,  the Joint Committee sh all examine the case 
of the situation and may take any decision needed to put an end to the difficulties 
notified by the Contracting Party concerned. In the case of the absence of such decision 
within thirty days of the matter being refe rred to the Joint Committee, the Contracting 
Party concerned may adopt the measures necess ary in order to remedy the situation; 
- Article 34 of this Agreement, the Contrac ting Party concerned may take appropriate 
measures after the consultations have been c oncluded or after a period of three months 
has elapsed from the date of the first notification to the other Contracting Party;  
- Article 27 of this Agreement, the Contrac ting Party concerned shall give the Joint 
Committee all the assistance required in or der to examine the case and, where 
appropriate, eliminate the practice objected to. If the other Contracting Party fails to put 
an end to the practice objected to within th e period fixed by the Joint Committee, or if 
the Joint Committee fails to r each an agreement within th irty working days on the 
matter, being referred to it, the Contrac ting Party concerned may adopt appropriate 
measures to deal with the difficulties, resulting from the practice in question. 
 
5. The safeguard measures taken shall be notifie d immediately to the Joint Committee. They 
shall be limited, with regard to their extent and to their duration, to what is strictly necessary to 
remedy the situation, giving rise to their applicati on and shall not be in excess of the injury, caused by 
the practice or the difficulty in question. Priority sh all be given to measures that will least disturb the 
functioning of this Agreement. 
6. The safeguard measures taken shall be an object  of periodic consultations within the Joint 
Committee with a view to their relaxation or a bolition when conditions no longer justify their 
maintenance. 
7. Where exceptional circumstances, requiring immediate action, make prior examination 
impossible, the Contracting Party concerned may,  in the cases of Articles 19, 20 and 21 of this 
Agreement, apply forthwith the provisional measures,  strictly necessary to remedy the situation. The 
measures shall be notified without delay and consultations between th e Contracting Parties shall take 
place as soon as possible in the Joint Committee. WT/REG178/1 
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 Article 24 
 
General Exceptions
 
  This Agreement shall not preclude prohibitions or restrictions on imports, exports or goods in 
transit, justified on grounds of public morality, public  policy or public security; of the protection of 
health and life of humans, animals or plants and environment; of the protection of national treasures 
possessing artistic, historic or archeological value; of  the protection of intellectual property or rules 
relating to trade in gold or silver or to the con servation of exhaustible natural resources, if such 
measures are made effective in conjunction with rest rictions on domestic pr oduction or consumption. 
Such prohibitions or restrictions shall not, however , constitute a means of arbitrary discrimination or a 
disguised restriction on trade between the Contracting Parties.  
Article 25 
 
Rules Of Origin And Cooperation In Customs Administration
 
 1. Protocol B (hereinafter called “Protocol B”) of this Agreement lays down the rules of origin 
and related methods of administrative cooperation. 
2. The Contracting Parties shall take appropriate  measures, including regular reviews by the 
Joint Committee and arrangements for administrative c ooperation, to ensure that the provisions of this 
Agreement are effectively and harm oniously applied, and to reduce, as far as possible, the formalities, 
imposed on trade, and to achieve mutually satisfact ory solutions to any difficulties, arising from the 
operation of those provisions. 
   Article 26 
 
Payments
 
  The Contracting Parties, in accordance with th eir respective legislation, will allow in freely 
convertible currencies all payments on the current account of the balance of payments, as far as the 
transactions, related to the payments, affect trade unless the Contracting Parties otherwise agreed upon. 
 
Article 27 
 
Rules of Competition Between Undertakings
 
 
1. The following are incompatible with the proper func tioning of this Agreement, in so far as it 
affects the trade between the Contracting Parties: 
(a) all agreements between undertakings, decisi ons by associations of undertakings and 
concerted practices between undertakings which have as their object or effect the 
prevention, restriction or distortion of competition; 
(b) abuse by one or more undertakings of dominant position in the territories of the 
Contracting Parties as a whole or in a substantial part thereof; 
2. The provisions of paragraph 1 of this Article shall apply to the activities of all undertakings 
including public undertakings to which the Contr acting Parties grant special or exclusive rights. 
Undertakings entrusted with the operation of ser vices of general economic interest or having the 
character of a revenue-producing monopoly, shall be subject to provisions of paragraph 1 of this  WT/REG178/1 
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 Article insofar as the application of these provisions does not obstruct the performance, in law or fact, 
of the particular public tasks assigned to them. 
3. With regard to products referred to in Chapte r II to this Agreement the provisions stipulated 
in paragraph 1 (a) of this Article  shall not apply to such Agreements, decisions and practices which 
form an integral part of a national market organization. 
4. If a Contracting Party considers that a given prac tice is incompatible with  paragraphs 1, 2 and 
3 of this Article or if such practice causes or threat ens to cause serious prejudice to the interest of that 
Contracting Party or material injury to its domest ic industry, the Contracting Party concerned may 
take appropriate measures under th e conditions and in accordance w ith the procedures laid down in 
Article 27 of this Agreement. 
Article 28 
 
State Aid  
 1. Any aid granted by a Contracting Party or thro ugh state resources in any form whatsoever 
which distort or threatens to distort competition by favouring certain undertakings or the production 
of certain goods shall, in so far as  it may affect trade between the Cont racting Parties, be incompatible 
with the proper functioning of this Agreement. 
2. The provisions of paragraph 1 of this Article  shall not apply to the product covered by 
Chapter II to this Agreement. 
3. The Contracting Parties shall ensure tr ansparency in the area to state aid, inter alia , by 
reporting annually to the Joint Committee on the total amount and the distribution of the aid given and 
by providing to the other Contracting Party, upon request, information on aid schemes and on 
particular individual cases of state aid. 
4. If the Contracting Parties consider that a particular practice; 
- is incompatible with the terms of the paragraph 1 of this Article, or 
 
- causes or threatens to cause serious prejudice to  the interest of that Contracting Party or 
material injury to its domestic industry,  
 it may take appropriate measures under the conditions  of and in accordance with the provisions laid 
down in Article 23 of this Agreement. 
 
 Such appropriate measures may only be taken in conformity with the procedures and under 
the conditions laid down by the WTO, particularly  the GATT 1994 and any other relevant instruments 
negotiated under their auspices, which are a pplicable between the Contracting Parties. 
 
Article 29 
 
Balance Of Payments Difficulties
 
  Where one of the Contracting Parties is in ser ious balance of payments difficulties, or under 
imminent threat thereof, the Contracting Party concerned may, in accord ance with the conditions, 
established under the GATT 1994 and Article VIII of th e Articles of Agreement of the International 
Monetary Fund, adopt restrictive measures, including  measures related to imports, which shall be of 
limited duration and may not go beyond what is n ecessary to remedy the balance of payments WT/REG178/1 
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 situation. The measures shall be progressively rela xed as balance of payments conditions improve and 
they shall be eliminated when conditions no longer justify their maintenance. The Contracting Party 
concerned shall inform the other Contracting Part y forthwith of their introduction and, whenever 
practicable, of a time schedule for their removal.  
Article 30 
 
Protection Of Intellectual Property
 
 1. The Contracting Parties shall grant and ensu re adequate and effective protection of 
intellectual property rights on a non-discriminatory b asis, including effective measures for enforcing 
such rights against infringement, and particularly  against counterfeiting and piracy. Contracting 
Parties agree to comply with the substantive standa rds of the multilateral agreements listed in     
Annex V. 
2. For the purpose of this Agreement the term "i ntellectual property" includes in particular 
copyright including the copyright on computer programmes and neighbouring rights, patents, 
trademarks, industrial designs, geographical indi cations, topographies of integrated circuits, 
undisclosed information as well as unfair competition. 
3. In fulfilment of their commitments under interna tional agreements and legislation in the field 
of intellectual property rights, the Contracting Party to this Agreement shall not grant to nationals of 
the state of the other Contracting Party treatment le ss favourable than that ac corded to nationals of 
any third state. 
4. The Contracting Parties shall cooperate in matt ers of intellectual property. Upon request of a 
Contracting Party, they shall hold expert consu ltations on these matters, in  particular on activities 
relating to the existing or to future interna tional conventions concerning the harmonization, 
administration and enforcement of intellectua l property and on activities in international 
organizations, such as the WTO, World Intellectua l Property Organization, as well as on the relations 
of the Contracting Parties with any thir d country on intellectual property matters. 
5. The implementation of this Article shall be regularly assessed by the Contracting Parties. 
Upon difficulties in trade in relation with the rights of intellectual property, any of the Contracting Parties may request urgent consultations for finding mutually satisfactory solution. 
Article 31 
 
Public Procurement
 
 1. The Contracting Parties consider the liberalization of their respective public procurement 
markets as an objective of this Agreement. The C ontracting Parties aim at opening up of the award of 
public contracts on the basis of non-discrimination and reciprocity. 
2. The Contracting Parties shall progressively de velop their respective rules, conditions and 
practices on public procurement and shall grant supp liers of the other Contracting Party access to 
contract award procedures on their respective public  procurement markets not less favourable than 
that accorded to companies of any third country. 
3. The Joint Committee shall examine developments related to the achievement of the objectives 
of this Article and may recommend practical modalit ies of implementing the provisions of paragraph 
2 of this Article so as to ensure free access, tran sparency and full balance of rights and obligations. 
During the examination referred to this paragr aph from this Article, the Joint Committee may  WT/REG178/1 
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 consider, especially in the light of international re gulations in this area, the possibility of extending 
the coverage and/or the degree of the market openi ng provided for in paragraph 2 of this Article. 
4. The Contracting Parties shall endeavour to accede to the relevant Agreements negotiated 
under the auspices of the GATT 1994 and the WTO. 
Article 32 
 
Services And Investment  
 1. The Contracting Parties recognize the growing importance of certain areas, such as services 
and investments. In their efforts to gradually deve lop and broaden their cooperation, in particular in 
the context of the European integration, Contracti ng Parties will cooperate with the aim of achieving a 
progressive liberalization and mutual opening of th eir markets for investments and trade in services, 
taking into account relevant provisions of th e General Agreement on Trade and Services. 
2. The Contracting Parties will discuss in the Join t Committee this cooperation with the aim of 
developing and deepening of their re lations governed in this Article. 
 
CHAPTER IV 
 
INSTITUTIONAL AND FINAL PROVISIONS 
 
Article 33 
 
The Joint Committee
 
 1. A Joint Committee is hereby established in which each Contracting Party shall be 
represented. The Joint Committee sh all be composed of five members for each Contracting Party. 
2. The Joint Committee shall be responsible for th e administration of this Agreement and shall 
ensure its proper implementation. 
3. For the purpose of the proper implementation of this Agreement, the Contracting Parties shall 
exchange information and, upon request of any Cont racting Party, shall hold consultations within the 
Joint Committee. The Joint Committe e shall keep under review the possibility of further removal of 
the obstacles to trade between the Contracting Parties. 
4. The Joint Committee may take decisions in th e cases provided for in this Agreement. On 
other matters the Joint Committee may make recommendations. 
5. The decisions taken by the Joint Committee will be subject to approval by the Contracting 
Parties in accordance with their internal legislation. 
Article 34 
 
Procedures Of The Joint Committee
 
 1. For the proper implementation of this Agreemen t, the Joint Committee shall meet whenever 
necessary, but at least once a year. Each Contracting Party may request a meeting to be held. 
2. The Joint Committee shall act by common agreement. WT/REG178/1 
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 3. If a representative of a Contracting Party in  the Joint Committee has accepted a decision, 
under reservation, subject to the fulfilment of intern al legal requirements, the decision shall enter into 
force, if no later date is contained therein, on the da te of the receipt of a written notification as to the 
fulfilment of such requirements.  
4. The Joint Committee shall adopt its rules of procedure, which shall, inter alia , contain 
provisions for convening meetings and for the design ation of the Chair person and its term of office. 
5. The Joint Committee may decide to set up such subcommittees and working groups, as it 
deems necessary to assist it in accomplishing its tasks. 
Article 35 
 
  Security Exceptions
 
  Nothing in this Agreement sh all prevent a Contracting Part y from taking any measure, which 
it considers necessary:  
(a) to prevent the disclosure of information c ontrary to its essential security interests; 
(b) for the protection of its essential security interests or for the implementation of 
international obligations  or national policies: 
- relating to the traffic in arms, ammuniti on and implements of war, provided that 
such measures do not impair the conditions of competition in respect of products not intended for specifically military purposes,  and to such traffic in other goods, 
materials and services as is carried on directly or indirectly for the purpose of 
supplying a military establishment; or 
 - relating to the non-proliferation of bi ological and chemical weapons, nuclear 
weapons or other nuclear explosive devices; or 
 
- taken in time of war or other serious inte rnational tension, constituting threat of 
war. 
 
Article 36 
 
Fulfilment Of Obligations
 
 1. The Contracting Parties shall take all necessar y measures to ensure the achievement of the 
objectives and the fulfilment of the obl igations under this Agreement. 
2. If any Contracting Party considers that the othe r Contracting Party has failed to fulfil an 
obligation under this Agreement, the Contracting Pa rty concerned may take th e appropriate measures 
under the conditions and in accordance with the procedures laid down in Article 23 of this Agreement. 
Article 37 
 
Evolutionary Clause
 
 
 Where a Contracting Party considers that it would be useful in the interest of the economies 
of the Contracting Parties to develop and deepen  the relations established by this Agreement by 
extending them to fields not covered thereby, it shall submit a reasoned request to the other  WT/REG178/1 
 Page 15 
 
 
 Contracting Party. The Contracting Parties may inst ruct the Joint Committee to  examine such request 
and, where appropriate, make recommendations to them, particularly with a view to opening 
negotiations.  
Article 38 
 
Annexes And Protocols
 
  Annexes and Protocols to this Agreement are an  integral part of it. The Joint Committee may 
decide to amend the Annexes and Protocols to this Agreement, which are subject to the internal legal 
procedures of the Contracting Parties. 
 
Article 39 
 
Amendments
 
 
 Amendments to this Agreement shall enter into  force in accordance with  procedure stipulated 
in Article  40 of this Agreement.  
Article 40 
 
Entry Into Force
 
  This Agreement is subject to the ratification. It enters into force on the first day of the second 
month following the date of receiving of the second of the written notes, with which the Contracting 
Parties notify each other through diplomatic channels  that they have ratified this Agreement.  
 
Article 41 
 
Validity And Withdrawal
 
 1. The Agreement is concluded for an unlimited period of time. 
2. Each Contracting Party to this Agreement ma y withdraw there from, by means of a written 
notification to the other Contracting Party. The term ination shall take effect on the first day of the 
seventh month following the date on which the notif ication was received by the other Contracting 
Party. 
3. The Contracting Parties agree, that in case of accession of one of the Contracting Parties to 
the EU, this Agreement will be terminated on th e day before the date of the accession of the 
respective Contracting Party to the EU, without successive compensations for the other Contracting Party. 
 
 IN WITNESS WHEREOF the undersigned plenipot entiaries, being duly authorized thereto, 
have signed the present Agreement. 
 
 DONE at ..............this... ..........day of.. .............in two originals in Serbian, Albanian and 
English language, each of these being equally authen tic. In case of divergence the English text shall 
prevail.  
For Serbia and Montenegro  For the Republic of Albania WT/REG178/1 
Page 16  
 
 RECORD OF UNDERSTANDING 
 
 Notwithstanding the Article 5 of this Agreemen t, the Contracting Parties, may continue to 
apply the actual import duty at 0,5%  level in Serbia, 1,0% level in Montenegro, and 1% level in the 
Republic of Albania, imposed on all taxa ble import products, as a temporary duty. 
 
  
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