1. 1 ME Risk Management Framework M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Working Group for Chapter 29 – Customs union Bilateral screening: Chapter 29 PRESENTATION OF MONTENEGRO Brussels, May 2013

2. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union CONTENT  Customs Law, legal Definitions: Risk and Risk Management,  Objectives of the Risk Management System  Organizational structure  Electronic system of risk analysis  Risk profiles – creating, testing, evaluation  Sources of information  Manuals  Results of customs controls  Activities, plans...

3. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union Customs Law, Official Gazette 7/2002, 38/2002, 72/2002, 21/2003, 29/2005, 66/2006, 21/2008, Article 14 Customs supervision and control is conducted on selective basis on the basis of risk analysis in order to determined risk and its extent, as well as to develop necessary measures for risk assessment on the basis of determined criteria. Customs authority is determining the framework for risk management, criteria and priority control areas. Within the control, referred to in the Paragraph 2 of this Article and when it is necessary in order to reduce the risk, the customs authority and other authorities can exchange data in reference to the import, export, transit, transfer and final use of goods moving between the customs territory of Montenegro and other territories, and in reference to presence of foreign goods, with international organizations and authorities of other countries.

4. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union Legal Definitions: “Risk” Customs Law, Official Gazette 7/2002, 38/2002, 72/2002, 21/2003, 29/2005, 66/2006, 21/2008, Article 5 Paragraph 31 The risk is probability of occurrence of an event which may occur regarding the import, export, transit and special use of commodities situated in the customs area of Montenegro, which moves between customs areas of Montenegro and third countries, as well as regarding the presence of commodities without the domestic commodities status, which : prevents due applications of measures in Montenegro, or; compromises the financial interests of Montenegro; threatens Montenegro security, protection of health and life of humans, animals and vegetation, public morale, protection of national heritage with historical, artistic or archeology value or protection of intellectual property, environment, consumers, etc;

5. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union Legal Definitions: “Risk Management” Customs Law, Official Gazette 7/2002, 38/2002, 72/2002, 21/2003, 29/2005, 66/2006, 21/2008, Article 5 Paragraph 32 The risk management is a systematic establishing of risk and application of all necessary precautions to remedy risk exposure, regarding: Collecting data and information, risk analysis and assessment, prescribing and implementing measures and regular control and overview of procedures and their results, in line with the national and international sources and strategies;

6. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union SECTOR OF CUSTOMS ENFORCEMENT, CONTROL AND COORDINATION OF ACTIVITIES OF CUSTOMS HOUSES SECTOR OF CUSTOMS ENFORCEMENT, CONTROL AND COORDINATION OF ACTIVITIES OF CUSTOMS HOUSES DEPARTMENT OF INTELLIGENCE DEPARTMENT OF INTELLIGENCE ANTI-SMUGGLING DEPARTMENT ANTI-SMUGGLING DEPARTMENT DEPARTMENT OF CUSTOMS INVESTIGATIONS DEPARTMENT OF CUSTOMS INVESTIGATIONS DEPARTMENT OF CUSTOMS AUDIT DEPARTMENT OF CUSTOMS AUDIT POST-CLEARANCE AUDIT DEPARTMENT POST-CLEARANCE AUDIT DEPARTMENT FIELD UNITS CUSTOMS HOUSE PODGORICA CUSTOMS HOUSE PODGORICA CUSTOMS HOUSE BAR CUSTOMS HOUSE KOTOR CUSTOMS HOUSE BIJELO POLJE CUSTOMS HOUSE BIJELO POLJE Assistant Director Organizational structure of control resources Risk analysis

7. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union RMS Organizational structure Strategic risk committee -Determining priorities, -Reviewing report and supervision, Risk manager -Operational management of the system -Coordination of activities of the team for selectivity and targeting Team for selectivity and targeting - Enforces orders from Strategic Committee and Risk Manager -Independently and actively investigates and collects data, -Analyses trade flows using available databases, -Prepares, tests, enters and evaluates risk profiles, -Updates databases, -Drafts report for Strategic Committee and Risk Manager

8. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union Objectives of the Risk Management system  Increase the performance of customs controls an safety of customs territory,  Facilitation of flow of legal trade and passengers,  Equivalent criteria for control and procedure,  Efficient deployment of available resources.  Provide information and suport for Management of customs,  Establishment of integrated system of collecting data,  Improvement of system in order to retch highest standards in work,

9. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union Electronic system of risk analysis  Electronic system of risk analysis was introduced in March 2007, when it was fully integrated in organizational structure, procedure and existing customs information system.  In the beginning of 2013, we have put into function new electronic system of risk analysis, received from the custom administration of Slovenia in the form of donation.  It enables risk targeting in all customs procedures, through red, yellow and green channel.  It enables supervision over the local risk analysis,  It is compatible for connection with the EU risk management system

10. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union Architecture of Electronic system of risk analysis Updatable NCTS ICS drivers Table, risk profiles Engine RMS ECS DATA xml drivers CIS ME …

11. 5% CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union Risk assessment proces  Collecting information on risk, identification of risk,  Analysis and assessment of risk, creating profiles, testing and entering into the system - determining adequate measures,  Evaluation of results, drafting reports and providing feedback in order to improve risk profiles.  Through the old electronic system of risk analysis, total percentage of controls was at level of 13%.  Through the new electronic system of risk analysis, total percentage of controls shall be at level of 8%. 3% 92% Physical control Control of documentation Free movement

12. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union Inspection raport

13. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union Sources of information - CIS of customs administration and other customs records, - Risk reports of customs offices and Departments, - Cooperation and exchange of information with national authorities, - International cooperation, - SEED system, - Memoranda of Understandings with companies, - Databases of offenders and suspicious activities, - Customs open line, - Lloyd's List Intelligence Seasearcher, - Internet, etc.

14. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union Exchange of information with state authorities of Montenegro, on the basis of agreements,  Police Directorate  Administration for the prevention of money laundering,  Prosecutor’s Office,  Tax Administration,  Administration for anti-corruption initiative,  Administration for inspection,  Administration of medicins and medical devices,  Joint investigative tam of the Special Prosecutor.

15. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union International cooperation  Signed 26 agreements on mutual administrative assistance in customs matters, out of which 12 with the EU countries  WCO: - RILO network, participation in projects, - CEN data base, IPM, - Trening, reporting,  OLAF: - Exchange information of suspicious shipments, - Joint customs operation,  SELEC: - Joint customs operation, - Exchange information – Montenegro Liaison Officer in SELEC  CEFTA, MARINFO, ILECUs,  Memorandum of Understanding with the Customs Agency of Italy on exchange of information between the customs houses Bar and Bari,

16. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union SEED system  Regional system for electronic exchange of information on goods – notification of shipments in road traffic.  Enables efficient risk analysis before the arrival of the goods, creation of risk profiles and alarms.  Montenegro, Albania, Macedonia, Kosovo, Serbia and Bosnia are involved.  SEED project, financed by the EU, was assessed with „A“ mark for the results and quality of implementation.

17. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union CEFTA RM Working Group  Establishing and agreement on common risk profiles in areas that are eligible for the CEFTA member states,  Enhanced exchange information between Customs administration in terms of risk subjects,  Establishment a system of direct communication between the members of the Working group,  Areas of intresting: Excize goods, IPR, false invoices, suspicious shipments …

18. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union Memoranda of understanding with companies  Airline agents are providing electronic data prior the landing of the plane,  Shipping agents provide electronic cargo manifests prior the arrival of the ship,  Pre-arrival information are submitted by e-mail and contain cargo manifests,  Pre-arrival informations are analyzed in the Customs Administration – Intelligence department and in local customs office.

19. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union Customs open line Customs administration has placed into function the Customs open line in 2005. All calls are free, anonymous and confidential. During 2012, customs open line received 34 reports.

20. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union Internal instructions for risk analysis  Manual for customs risk analysts,  Manual for the team for selectivity,  Manual for the targeting team,  Manual for use of electronic system of risk analysis,  Operational instructions for utilization of SEED System,  Instruction for risk analysis in SEED System,

21. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union Results of customs controls in 2012  We have detected 219 customs offences.  We have filed 239 misdemeanour reports in the amount of 266,050 eur.  We have filed 30 requests for initiation of misdemeanour proceedings.  53 seizures of narcotics: 1359 kg of skunk, 15,5 kg of heroin and 686 grams of cocaine  Seized 13,717 boxes of cigarettes.  Confiscated undeclared goods in value of 475,977 Euro.  Subsequent recovery of customs debt in the amount of 3,726,770 eur.  We have terminated 14 customs procedure, due to the IPR infringement.

22. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union Activities, plans...  Strengthening capacities of risk management system in order to implementation EU standards,  Strengthening international and regional cooperation,  IFC South East Europe Trade Logistics project, - Risk management, risk profiling, - Post Clereance Audit  Participation in CEFTA Risk Management Working Group,  Chapter 24: Justice, freedom and security,  Establishing of Customs Operational Centar,  Customs 2013: Study visit – EU Risk management,...

23. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union X-RAY MOBILE SCANNER RISK BASED CONTROL

24. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union i Weapons Narcotics Seizures...

25. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union Seizures... ra IPR Coffee, Tobacco, Alcohol

26. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union Thank you for your attention! Questions? rade.lazovic@carina.gov.me