1. 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 1 –Free movement of goods Bilateral screening: Chapter 1 PRESENTATION OF MONTENEGRO Brussels, 6 March 2013

2. Chapter 1: Free Movement of Goods Working Group for Chapter 1 – Free Movement of Goods Bilateral screening: Chapter 1 Presentation of Montenegro Brussels, 6 March 2013 M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 1: Free Movement of Goods

3. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 01: Free Movement of Goods Chapter 1: Free movement of goods THE SERVICES DIRECTIVE: DEFENCE PRODUCTS Željko Fustić Ministry of Defence zeljko.fustic@mod.gov.me zeljko.fustic@mod.gov.me

4. LAWS Law on Foreign Trade in Armaments, Military Equipment and Dual-Use Items (OGM 80/08) Law on Export Control of Dual-Use Items (OGM 30/12) OTHER REGULATIONS – Enabling regulations; – International legal instruments and regimes; – International treaties; conventions, and – Other regulations. National legislation Chapter 3: Right of establishment and freedom to provide services Chapter 1: Free Movement of Goods BACKGROUND INFORMATION

5. Law on Foreign Trade in Armaments, Military Equipment and Dual-use Items Law contains six parts, as follows: Part I:Basic provisions; Part II:Conditions for pursuit of foreign trade in controlled items; 1.Registration, and 2.Permits. Part III:Records and reporting; Part IV:Supervision and control; Part V:Penalty provisions, and Part VI:Transitional and final provisions. Law on Export Control of Dual-Use Items Law contains six parts, as follows: Part I: Basic provisions; Part II: Conditions for export, transit, delivery of brokering services, and technical assistance; Part III: Records; Part IV: Supervision; Part V: Penalty provisions, and Part VI: Transitional and final provisions. National legislation – continued

6. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 1: Free Movement of Goods Chapter 3: Right of establishment and freedom to provide services Novelties in laws  Catch-all clause;  Technical assistance,  Brokering services and brokering activities, and  Criteria of the EU Council Common Position 2008/944/CFSP for export of armaments. Necessity of control In order to: Preserve national security, Comply with the UN Security Council Resolutions (in particular UN SC R1540), Comply with ratified international conventions and agreements in this field, and Harmonize national policy on export control of armaments, military equipment and dual-use items with the EU legislation. Chapter 1: Free movement of goods I. Basic provisions – continued

7. Control of activities in foreign trade of armaments and military equipment entails that a right to pursuit a foreign trade (export, import, brokering activities, technical assistance) is acquired by registration with the Register of persons authorized to pursuit foreign trade, kept by the authority competent for foreign trade affairs (Ministry of Economy), No special registration with the Ministry of Economy is required for pursuit of activities concerning the control of export of dual-use items by provision of brokering activities and technical assistance. II. Conditions for Circulation – continued In order to increase the capacity of institutions to ensure more efficient implementation of the control of foreign trade in controlled goods, the listed laws and secondary regulations were adopted in cooperation with and with the assistance of : -BAFA (Federal Office of Economics and Export Control) from Germany, -SIPRI (Stockholm International Peace Research Institute) from Sweden, -COARM (EU Council Working Party on Conventional Arms Exports), -EXBS – USA Government, -SEESAC –UNDP.

8. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 3: Free Movement of Goods Chapter 3: Right of establishment and freedom to provide services BACKGROUND INFORMATION Chapter 1: Free movement of goods III. Records - continued Montenegro strongly believes that improvement of a responsible export control and transfer of weapons increases global, and especially regional security. Thus Montenegro, with the objective of transparency and the spirit of goodwill, provides information once a year (Annual Report) on its policy for control of export and import of armaments, military equipment and dual-use items. Published annual reports

9. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 1: Free movement of goods Chapter 3: Right of establishment and freedom to provide services Chapter 1: Free movement of goods IV. Supervision and Control Ministry of Economy, in cooperation with the Ministry of Foreign Affairs, Ministry of Defence, Ministry of Interior Affairs and Public Administration, Customs Administration of Montenegro, bodies of security and intelligence services, carries out the supervision and control over the pursuit of foreign trade in controlled goods, in accordance with provisions of the Law. Persons engaged in foreign trade, transport or transit of controlled goods are obliged, pursuant to the Law, to ensure insight (for the purpose of supervision and control) in all phases of circulation, transit and storage to the authorities competent for supervision and control.

10. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 1: Free movement of goods Chapter 3: Right of establishment and freedom to provide services Chapter 1: Free movement of goods V. Penalty Provisions ⇒ Article37 of the Law on Foreign Trade in Controlled Goods envisages only pecuniary fines for natural persons and responsible persons in legal entities, if in breach of the provisions of this Law. Objectives of implementation of misdemeanor provisions are: ⇒Prevention: Prevent illegal export, re-export and transfer of controlled goods; ⇒Investigate and support criminal prosecution of suspect perpetrators; ⇒Inform and educate exporters, shipping companies and all other links in a chain on their obligations to comply to and implement regulations; ⇒Self-regulation.

11. Secondary legislation Decision on Determining the National Control List of Armaments and Military Equipment (OGM 52/12), Decision on Determining the National Control List of Dual-use Items (OGM 44/11), Decision on Determining the List of Non-military Lethal Goods (OGM 66/10), Decree on Foreign Trade in Special-purpose Goods (OGM 66/10), Rulebook on the Manner of the Customs Authority proceedings in customs procedures concerning armaments, military equipment and dual-use items (OGM 60/09), Rulebook on the Form of Request for Issuing the Permit, the Form of the Permit, Contents and Forms of Other Documents Required for Pursuit of Foreign Trade in Controlled Goods (OGM 08/11 of 4 February 2011), Rulebook on the Form of Request for Registration with the Register of Persons for Pursuit of Foreign Trade in Controlled Goods and the Form and Manner of Keeping the Register (OGM 45/09, 08/11), Rulebook on the Forms of Requests and Permits for Export of Dual-use Items, Provision of Brokering Services and Technical Assistance (OGM 62/12). Other Regulations Chapter 3: Right of establishment and freedom to provide services Chapter 1: Free Movement of Goods BACKGROUND INFORMATION

12. International Law Instruments and Regimes Chapter 3: Right of establishment and freedom to provide services Chapter 1: Free Movement of Goods BACKGROUND INFORMATION International control regimes are:  The Wassenaar Arrangement - WA,  Nuclear Suppliers Group – NSG,  The Zangger Committee,  The Australia Group – AG,  Missile Technology Control Regime – MTCR Montenegro is considering the possibility to join the Wassenaar Arrangement.

13. International Treaties and Conventions Chapter 3: Right of establishment and freedom to provide services Chapter 1: Free Movement of Goods BACKGROUND INFORMATION Montenegro is consistent in advocating the application of all international law instruments governing the area of disarmaments and control of armaments and supports every new constructive initiative aimed at strengthening and expanding international cooperation in the interest of reducing and eliminating risks and consequences of production and use of any type of weapons or lethal goods. Although Montenegro has no national implementation laws for all international instruments in the domain of disarmaments, non-proliferation and armaments control, the Constitution of Montenegro (OGM 01/07) envisages that ratified international treaties and generally accepted principles of the international law represent a part of the internal legal system. Furthermore, in the event a specific relation is governed in a different manner, international treaties take precedence over the national legislation.

14. Other regulations Chapter 3: Right of establishment and freedom to provide services Chapter 1: Free Movement of Goods BACKGROUND INFORMATION Relevant legislation of Montenegro related to the field of foreign trade in controlled goods includes the application of other laws as well as secondary regulations, which by their nature regulate specific issues of relevance and affecting foreign trade in the domain of armaments, military equipment and dual-use items.  Criminal Code (OGRM 70/03 of 25-Dec-2003, 13/04 of 26-Feb-2004, 47/06 of 25-Jul-2006, OGM 40/08, 32/11);  Law on Criminal Procedure (OGM 57/09 of 18-Aug-2009);  Law on the Liability of Legal Entities for Criminal Offences (OGRM 02/07, 13/07 and OGM 30/12);  Law on Weapons (OGRM 49/04 and OGM 49/08, 20/11, 40/11);  Law on Production and Circulation of Armaments and Military Equipment (Official Gazette of the Federal Republic of Yugoslavia No 41/96 and Official Gazette of Serbia and Montenegro, No 07/05);  Law on Foreign Trade (OGM 28/04, 37/07);  Customs Law (OGRM 07/02 and OGM 21/08);  Law on Prohibition of Development, Production, Storage and Use of Chemical Weapons and on Distruction Therof (Official Gazette of Serbia and Montenegro, No 44/05);  Law on Border Control (OGM 72/09, 20/11);  Law on Chemicals (OGM 18/12);  Law on Protection against Ionizing Radiation and on Radiation Safety (OGM 56/09, 58/09, 40/11);  Law on Control of Production and Circulation of Substances that could be Used for Production of Opiate Drugs and Psychoactive Substances (OGM 83/09, 40/11).

15. MONTENEGRO IN THE SYSTEM OF FOREIGN TRADE CONTROL NATIONAL LEGISLATION HARMONISATION Chapter 3: Right of establishment and freedom to provide services Chapter 1: Free Movement of Goods BACKGROUND INFORMATION CORE OBJECTIVES OF MONTENEGRO IN THE CONTROL SYSTEM Acceptance of standards in the field of control of foreign trade flows of armaments, military equipment and dual-use items, United approach in the combat against international terrorism and proliferation of weapons of mass destruction, Inclusion of Montenegro in the international system of exports control, and Accession to international control regimes and agreements in this area.

16. HARMONISATION OF NATIONAL LEGISLATION WITH THE EU REGULATIONS Chapter 3: Right of establishment and freedom to provide services Chapter 1: Free Movement of Goods BACKGROUND INFORMATION NoHARMONISEDNo 1. COUNCIL COMMON POSITION of 8 December 2008 Defining common rules governing control of exports of military technology and equipment 2008/944/CFSP 2. COUNCIL COMMON POSITION of 23 June 2003 On the control of arms brokering 2003/468/CFSP 3. COUNCIL JOINT ACTION of 22 June 2000 concerning the control of technical assistance related to certain military End-Uses 2000/401/CFSP 4. Common Military List of the European Union; (2012/C 85/01) (CFSP) 5. Council Regulation (EC) of 05 May 2009; 428/2009 HARMONISATION IN PROGRESS 6.REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 19 April 2012 amending Council Regulation (EC) No 428/2009 setting up a Community regime for the control of exports, transfer, brokering and transit of dual-use items 388/2012/EU HARMONISATION AFTER MONTENEGRO BECOMES THE EU MEMBER DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 6 May 2009 simplifying terms and conditions of transfers of defence-related products within the Community 2009/43/EC DIRECTIVE of 22 November 2010 amending Directive 2009/43/EC of the European Parliament and of the Council as regards the list of defence-related products 2010/80/EU

17. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 1: Free movement of goods Chapter 3: Right of establishment and freedom to provide services Chapter 1: Free movement of goods Future Activities Continued process of development and full implementation of legislation and system of control of exports of araments, military equipment and dual-use items developed so far; Strengthening regional cooperation on exports control; Harmonisation of National Control Lists with the EU lists; Completion of all obligations assumed by Montenegro in respect its membership in the UN, as well as numerous international resolutions, recommendations, and other documents in the field of prevention of proliferation of mass destruction weapons and combat against terrorism; Holding seminars and other education for representatives of national economy and state institutions regarding the control of foreign trade in controlled goods; Improvement of technical basis and education of customs authorities in order to equip them better to prevent smuggling of controlled goods; Continued participation in the long-term EU project.

18. Thank you for your attention! QUESTIONS