WT/TPR/M/369/Add.1 28 September 2018 (18-6027) Page

WT/TPR/M/369/Add.1

28 September 2018

(18-6027) Page: 1/94

Trade Policy Review Body Original: English/anglais/inglés 11 and 13 April 2018 Spanish/espagnol/español

TRADE POLICY REVIEW

MONTENEGRO MINUTES OF THE MEETING Addendum Chairperson: H.E. Mr. Eloi Laourou (Benin)

This document contains the advance written questions and additional questions by WTO Members, and replies provided by Montenegro.1

Organe d'examen des politiques commerciales 11 et 13 avril 2018

EXAMEN DES POLITIQUES COMMERCIALES

MONTÉNÉGRO COMPTE RENDU DE LA RÉUNION Addendum Président: S.E. M. Eloi Laourou (Bénin)

Le présent document contient les questions écrites communiquées à l'avance par les Membres de l'OMC, leurs questions additionnelles, et les réponses fournies par Monténégro.1

Órgano de Examen de las Políticas Comerciales 11 y 13 de abril de 2018

EXAMEN DE LAS POLÍTICAS COMERCIALES

MONTENEGRO ACTA DE LA REUNIÓN Addendum Presidente: Excmo. Sr. Eloi Laourou (Benin)

En el presente documento figuran las preguntas presentadas anticipadamente por escrito y las preguntas adicionales de los Miembros de la OMC, así como las respuestas facilitadas por Montenegro.1

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1 In English and Spanish only./En anglais et espagnol seulement./En inglés y español solamente.

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CONTENTS

ARGENTINA ...... 3 AUSTRALIA ...... 5 BRAZIL ...... 9 CANADA ...... 10 CHINA ...... 11 CHINA – ADDITIONAL QUESTIONS ...... 14 COSTA RICA ...... 24 EUROPEAN UNION ...... 27 ICELAND ...... 41 JAPAN ...... 42 MEXICO ...... 50 MOLDOVA, REPUBLIC OF ...... 53 SAUDI ARABIA, KINGDOM OF ...... 57 THAILAND ...... 66 TURKEY ...... 70 UKRAINE ...... 74 UNITED STATES ...... 83 UNITED STATES FOLLOW-UP QUESTIONS ...... 94

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ARGENTINA

Preguntas Informe WT/TPR/S/369

POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS

En el párrafo 3.21 se hace referencia a que Montenegro considera un producto ser originario de un país en el que haya sido sometido la última transformación sustancial económicamente justificable.

1. ¿Podrían agregar información adicional respecto de qué porcentaje de transformación sustancial se refiere?

Answer:

Article 25 on non-preferential origin of goods of the Customs Law2 prescribes that goods whose production involve more than one country shall be deemed to originate in the country where they underwent their last substantial, economically justifiable processing (treatment, final treatment, further treatment) resulting in new products or representing a crucial stage of manufacture.

The Regulation on implementation of the Customs Law3 and related Annexes 4 and 5 (for textiles and some other products) prescribe last substantial transformation. For determination of last substantial transformation for products that are not included in those Annexes customs authority of Montenegro, interpret Article 25 on the case-by-case basis.

En el párrafo 3.61 se mencionan que las empresas o empresarios que inicien actividades en municipios menos desarrollados obtienen una reducción sustancial en los impuestos directos.

2. ¿Existe la posibilidad que empresas extranjeras participen en actividades económicas en los municipios menos desarrollados? En caso afirmativo, deseamos conocer si el mismo régimen de exención tributaria se aplica para todas las empresas.

3. ¿Podrían ampliar información respecto al tipo de actividades que pueden realizar las empresas para obtener el beneficio?

Se detalla en el párrafo 3.63 que Montenegro ha notificado únicamente en mayo de 2015 respecto de los programas de ayuda, en donde indicó que en 2013 y 2014 se habían aplicado 8 y 10 programas de subvenciones, respectivamente.

4. En consecuencia, se desea saber podrían brindar más detalles sobre si Montenegro mantiene estos programas de ayuda a la producción.

Answers 2.- 4. Under the conditions and manner prescribed by national legislation, foreign companies, the same as domestic, have the opportunity to participate in economic activities in less developed municipalities.

The provisions of Article 27 of the Law on Tax Administration4 prescribe the manner and procedure for general registration of taxpayer to the competent tax authority. Under that Law, the application for registration can be inter alia, submitted by a foreign legal entity or an organization that generates income in Montenegro, or by a foreign physical person who generates income or owns property in Montenegro. In order to identify taxpayers within 15 days from the day of submitting the application for registration, the tax authority shall issue a decision on the registration and assign to a taxpayer a Tax Identification Number.

2 Official Journal of Republic of Montenegro", No 07/02, 38/02, 72/02, 21/03, 31/03, 29/05 and 66/06 and "Official Journal of Montenegro", No 21/08, 01/11, 39/11, 40/11, 28/12, 62/13 and 71/17. http://www.mif.gov.me/en/library/zakoni 3 Official Journal of Republic of Montenegro", No 15/03 and 81/06 and "Official Journal of Montenegro", No 38/08, 28/12, 11/16 and 40/17. http://www.mif.gov.me/en/library/uredbe?alphabet=lat 4 Official Journal of Republic of Montenegro", No 65/01, 80/04 and 29/05 and "Official Journal of Montenegro", No 73/10, 20/11, 28/12, 08/15 and 80/17.

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By the provisions of Article 31 of the Law corporate profit tax5 a newly established legal entity that starts performing activities in economically underdeveloped municipalities, has the right to CPT reduction by 100% for the first eight years. In addition, a taxpayer in the same areas employing a person based on contract for an indefinite period or for at least 5 years is released from the obligation of paying the calculated and withheld personal income tax for a period of four years from the date of the establishment of the employment relationship.

Tax exemptions do not apply to a taxpayer operating in the primary production of agricultural products, transport, shipyards, fisheries, steel, trade and catering, with the exception of primary catering facilities.

The first year in which the right to tax exemption is exercised begins on the day of entering registration of legal entity into the Central Registry of Economic Entities.

As for the programs of support the notification covering support in 2015 and 2016 is under preparation and will be submitted as soon as possible.

POLÍTICAS COMERCIALES, POR SECTORES

En el párrafo 4.49 se hace referencia que Montenegro ha aplicado diversos programas para apoyar las empresas del sector manufacturero.

5. ¿Podrían indicar si los programas de apoyo se aplican también a las empresas de capital extranjero? De ser afirmativa la respuesta ¿las condiciones son las mismas que deben cumplir las empresas locales?

Answer:

Foreign companies are eligible to use all programmes mentioned in paragraph 4.49 under the same conditions applicable to domestic companies, if that mentioned foreign companies are registered in Montenegro.

5 Official Journal of Republic of Montenegro", No 65/01, 12/02 and 80/04 and "Official Journal of Montenegro", No 40/08, 86/09, 40/11, 14/12, 61/13 and 55/16.

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AUSTRALIA

Report by Montenegro (WT/TPR/G/369) 3 Trade in Services 3.10 Trade in Services 3.10.1 Tourism

Page 25, Paragraph 3.78

The report states that there has been growth in the tourism sector in the latest review period. To achieve further growth, Montenegro is placing importance on air-accessibility and is currently considering the further improvement of airport capacity.

Question 1 As part of its initiative to improve airport capacity, is Montenegro considering opening up airport management and ownership to foreign investment?

MNE answer: The Government of Montenegro has engaged the International Finance Corporation (IFC) as part of the World Bank Group with specific experience in finding private financing to be the lead advisor for modelling structures at Tivat, Podgorica and Berane airports. The preparation of tender documentation for the realization of investments at Tivat airport can be expected in 2019. The planned financing model for the realization of this investment is through PPP (finding a strategic partner / private investor investment) where the minimum obligation of the state (through capital budget or borrowing) will be to cover the costs of expropriation. Aerodrom Podgorica and Tivat are recognized as Government key infrastructure projects and have been included into the Single Project Pipeline List.

Report by Montenegro (WT/TPR/G/369) 3 Trade in Services 3.10 Trade in Services 3.10.1 Tourism

Page 25, Paragraph 3.79

The report states that in December 2017 Montenegro enacted a new piece of legislation on Tourism and Hospitality, which includes new provisions relating to support to investors.

Question 2 Could Montenegro provide more information on what new support is being provided to investors in the tourism and hospitality sectors, including whether this includes support to foreign investment?

MNE answer: The new Law on Tourism and Hospitality was adopted on December 29, 2017 by the Parliament of Montenegro, and entered into force on January 18, 2018 ("Official Gazette of Montenegro" No.002/18, 013/18).

The law prescribes the promotion of tourism development and the introduction of tourist zones, and also stipulates the passing of the Incentive Program in these zones. The Program will be adopted by the Government at the proposal of the Ministry in charge of tourism or by the Municipal Assembly according to their priorities, and the implementation will be carried out under the competence of this Ministry, the NTO of Montenegro and the local government units, from the funds that will be determined by the budget of the state of Montenegro and the local governments. Pursuant to the authorizations from the Law on Tourism and Hospitality, it is envisaged that the bylaws, which will provide more detailed incentives for tourism, will be aopted within one year from the day the Law enters into force. According to the program of work for 2018, the Ministry plans to adopt the Regulation on incentives in the field of tourism and the Regulation on Tourist Development Zones.

Support to investors in Montenegro under the same conditions applies to domestic and foreign investors.

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Report by Montenegro (WT/TPR/G/369) 3 Trade in Services 3.10 Trade in Services 3.10.3 Banking sector

Page 28, Paragraph 3.97

The report states that, of the fifteen banks operating in Montenegro, ten are foreign-owned, with the foreign banks' subsidiaries holding more than three quarters of the assets in the banking sector.

Question 3 What restrictions, if any, are placed on foreign banks in Montenegro?

MNE answer: The system promotes full equality of domestic and foreign investors. In terms of establishment and operation of a bank in Montenegro, the same regulations apply equally to domestic and foreign entities and there are no restrictions for foreign natural/legal entities.

Report by the Secretariat (WT/TPR/S/369) Summary

Page 11, Paragraph 23

The report states that overbanking is a potential risk to the profitability of the banking sector in Montenegro.

Question 4 What steps, if any, is Montenegro taking to address the risk of overbanking?

MNE answer: In the licensing procedure, the Central Bank of Montenegro (CBCG) considers the conditions for obtaining a bank license prescribed by the Banking Law. The legal framework does not provide the possibility for the CBCG to evaluate a bank's request from the perspective of presumable market size or needs, which is also in line with the EU Directive 2013/36. Only when in carrying out its responsibilities CBCG determines that a bank violates the legal and other norms, or in some way jeopardizes its operations and/or its depositors, the CBCG can take all measures prescribed by law, including the measure of revoking a bank license.

Report by the Secretariat (WT/TPR/S/369) 1 Economic Environment 1.2 Recent Economic Developments 1.2.4 Structural Reforms 1.2.4.3 Competition Policy

Page 22, Paragraph 1.17

The report states that, during the review period, Montenegro undertook several legislative and institutional changes to competition policy to harmonise domestic regulations with those of the EU. However, enforcement remains relatively weak due to insufficient staffing and expertise as well as a lack of full independence in the decision-making process.

Question 5 What further legislative and institutional changes to competition policy are needed to fully harmonize the domestic regulations of Montenegro and the EU?

MNE answer: The Law on protection of Competition which came into force on 8 October 2012 is mostly harmonised with the EU acquis communautaire in the area of Competition protection. It introduces key acquis-based provisions like wider investigative powers (i.e. possibility to raid business premises without prior notice); leniency programme and sanction policy. After the entry into force of this law, the Agency was established as an independent body having legal personality in February 2013, and the Agency's decisions are final.

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In March 2018, Amendments to the Law on Protection of Competition came into force, which were approached with the aim of forming a single body that would perform tasks related to the protection of competition and state aid. Namely, in the amendments, inter alia, it is envisaged that the powers and actions of the State Aid Control Commission come under the jurisdiction of the Agency for Protection of Competition.

Amendments to the Law on Protection of Competition is not the subject of harmonization with specific sources of the European Union law and with ratified international conventions. However, such changes have essentially derived from the process of accession to the European Union, through the obligation to establish an operationally independent body responsible for state aid, which must have the powers and resources necessary for full implementation of the rules on state aid.

Question 6 What steps, if any, does Montenegro propose to take during the next review period to improve enforcement in this area?

MNE answer: For the purpose of more efficient handling of competent courts, i.e. full commitment to this issue, permanent education of judges of the Administrative and especially of Misdemeanor Courts is necessary.

Report by the Secretariat (WT/TPR/S/369) 4 Trade Policies by Sector 4.4 Services 4.4.1 Financial Services 4.4.1.1 Banking

Page 137, Paragraph 4.96

The report states that the State of Montenegro does not own, or have shares in, any bank directly. However, certain majority state-owned companies do own shares in some banks operating in the Montenegrin market.

Question 7 Are any Montenegrin state-owned companies majority shareholders in banks operating in Montenegro?

MNE answer: There are no banks with Montenegrin state-owned companies as majority shareholders.

Report by the Secretariat (WT/TPR/S/369) 4 Trade Policies by Sector 4.4 Services 4.4.1 Financial Services 4.4.1.1 Banking

Page 138, Paragraph 4.100

The report states that a law on financial leasing, factoring, purchase of claims, microcredit and credit-guarantee activities was adopted by the Parliament of Montenegro in October 2017 and will enter into force in April 2018. This law regulates other financial services (leasing, factoring and purchase of receivables), as well as the establishment, operation and control of the business companies providing these financial services. This law draws upon existing provisions in the existing Law on Banks.

Question 8 Are there any financial services regulators in Montenegro other than the Central Bank and, if there is more than one responsible agency, how do they differ in their responsibilities? Will the Central Bank of Montenegro maintain the supervisory responsibility for the regulations contained in this law, or does this law provide for an additional regulatory authority?

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MNE answer: In accordance with the Law on financial leasing, factoring, purchase of claims, microcredit and credit-guarantee activities, the Central Bank of Montenegro is the only regulator of these financial services in Montenegro, including supervision relating to the protection of financial services users.

The CBCG will maintain the supervisory responsibility for the regulations contained in the Law.

Question 9 How does this law deal with foreign financial service suppliers? Are they treated the same as local financial services suppliers?

MNE answer: According to this Law, foreign financial service suppliers are treated the same as local financial service suppliers in terms of the right to establishment and there are no restrictions.

Report by the Secretariat (WT/TPR/S/369) 4 Trade Policies by Sector 4.4 Services 4.4.2 Telecommunications

Page 143, Paragraph 4.119

The report states that in recent years, there have been price reductions for call terminations on both fixed and mobile networks. While prices for call termination on mobile networks are largely in line with the European average (which was 1.04 euro cents/minute in July 2016), call termination prices are significantly above the European average for fixed lines (where the average price was 0.43 euro cents/minute at January 2016).

Question 10 Do telecommunication carriers in Montenegro apply differential international mobile call termination charges based on country of origin?

MNE answer: Operators in Montenegro apply different international mobile call termination charges based on a country of origin.

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BRAZIL

4. TRADE POLICIES BY SECTOR Telecoms (2.C) 4.129

Question(s) Could EKIP elaborate on the extension and the measures, if there are any, already adopted in the regulation of retail prices?

Answer by Montenegro According market analysis of relevant retail markets, EKIP regulate retail prices of services for operators with significant market power on specific market. Currently, EKIP is regulating retail prices on retail markets for access on fixed location, fixed voice calls (national and international) and ADSL Internet access.

4. TRADE POLICIES BY SECTOR Telecoms (2.C) 4.117

Question(s) Could Montenegro specify and elaborate on the measures taken to improve the investment level?

Answer by Montenegro The legislative and regulatory environment is harmonized with the EU framework. The policy of development in this area is clearly regulated and predictable. Competition is present and the market is open. The Council of Foreign investors in so-called “white book 2017”, proclaimed telecom and ICT sector for the one with the simplest and the most effective for investments in the country.

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CANADA

9. GOVERNMENT REPORT 9.4.8

Question(s) As noted in paragraph 4.8 of the Government Report, Montenegro submitted a notification of indicative dates for category B and C commitments under the TFA in May 2017.

Can Montenegro provide an update on the status of its notification for definitive dates?

Answer by Montenegro The activities of the National Trade Facilitation Committee and competent authorities during the last year were mainly focused on ongoing projects and on developing a comprehensive joint reform plan - the TF Strategy. Since the Strategy sets the timeframe for the full implementation of category B and C commitments, the following activities will be focused on notification for definitive dates, as well as on all others TFA notification requirements.

9. GOVERNMENT REPORT 9.4.8

Question(s) Can Montenegro provide an update on when it expects to notify its transparency obligations under Article 10.6.2 and 12.2 of the TFA, in accordance with its Category A commitments?

Answer by Montenegro The activities of the National Trade Facilitation Committee and competent authorities during the last year were mainly focused on ongoing projects as well as on developing a comprehensive joint reform plan - the TF Strategy. Since the Strategy is set and adopted the next activities will focus on all TFA notification requirements.

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CHINA

Questions based on Report by the Secretariat

Page 136, para 4.88 "It also undertook additional commitments in the form of a reference paper on postal and courier services, relating to such aspects as the prevention of anti-competitive practices, universal service and the independence of the regulatory body."

Question 1: We notice that the commitments on postal and courier services are included in the A to D items under Article 1, 2, 3 of the Schedule of Specific Commitments on Services of Montenegro: As the universal service obligation were mentioned, there might be licensing system. Licensing system might need investors to fulfill specific universal service obligation and/or pay universal service indemnity fund. Do Montenegro allow foreign investors provide postal and courier services independently?

MNE answer: Yes, Montenegro allows foreign investors to provide postal and courier services, under the same conditions as for domestic investors.

Postal services are performed in accordance Law on Postal Services ("Official Gazette of MNE" No. 57/11 and 55/16), general conditions of postal operators and the acts of the Universal Postal Union.

Does foreign capital need licensing approval for to invest in postal and courier service sector?

MNE answer: The rules are the same for domestic, as well as for foreign investors of postal sector. A person authorized to provide postal services must for providing commercial postal services, to be registered in the register by filing the application, and for providing universal postal services, to possess a license issued by the Agency.

Do they need to fulfill specific universal service obligation and/or pay universal service indemnity fund?

MNE answer: For obtaining a special license and for obtaining the license, a one-time fee has to be paid. In addition to these fee, the owner of special licenses and licenses, as well as commercial postal operators, pay an annual fee for performing postal services. The fee is paid proportionally to the achieved income, and maximally 1% of the achieved annual income.

Funds from fees are the income of the Agency and they are paid to a special account (compensation fund), and they are used to regulate the postal services market and to cover the possible loss of performing universal postal service of the universal postal operator.

The universal postal operator is Post of Montenegro.

Question 2: Does Montenegro have any plan on further opening of postal and courier service sector?

MNE answer: The Postal service development Strategy will be adopted this year and it will further define the directions of development of this area.

Question 3: Could Montenegro please further explain the specific content of prevention of anti- competitive practices, universal service, the independence of the regulatory body and other aspects mentioned in the "additional commitments"?

MNE answer: The market of postal services is competitive, and the Law on Amendments to the Law on Postal Services from 2016 stipulates that after the expiration of the special licence for universal postal operator by 2027, the universal postal operator in the future will be selected on basis of a public tender.

Universal postal service shall be specific postal service of a prescribed quality and standard, provided in continuity, without discrimination, to which access shall be ensured under equal

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Universal postal service shall include clearance, sorting, transport and delivery of: 1) letter-post items weighing up to 2 kg; 2) postal parcels weighing up to 10 kg; 3) cecogrammes weighing up to 7 kg without charge; 4) recorded (registered and insured) postal items; 5) court letters and letters in the administrative procedure.

Universal postal service shall include postal services in domestic and international postal transport.

Universal postal service shall also include delivery of parcels weighing up to 20 kg in international postal transport.

Universal postal service shall be: - available to all users of postal services in the entire territory; - offered in identical form to all users who fulfill the same or similar conditions; - available without discrimination (arising from political, religious and ideological reasons); - continuous, except in the event of force majeure; - developed in accordance with the technical, economic and social environment and demands of the users of services.

Universal postal operator shall provide universal postal service to all users, every business day, but not fewer than five days a week, with minimum: - one collection of postal items; - one delivery of postal items, except in special circumstances and geographic conditions, with the exception of up to 10% of the population in rural and scarcely populated geographic areas, where at least one delivery a week or placement of cluster mailboxes on common locations shall be provided, according to the access point density model.

Based on the criteria, the independent regulatory authority may lay down other method for the provision of universal postal service.

The regulatory body (Agency for Electronic Communications and Postal Services) is legally separate from, and not accountable to, any supplier of postal and courier services. The decisions of and the procedures used by the regulatory body will be impartial with respect to all market participants.

In performing regulatory and other tasks, the Agency may not accept or ask the instructions from state and other bodies and organisations or other persons.

Question 4: Could Montenegro please provide a list of laws and regulations relating to postal and courier service?

MNE answer: Hereby, you can find the list of laws and regulations relating to postal and courier services:

1. Law on Postal Services ("Official Gazette of MNE" No. 57/11 and 55/16)

Bylaws

1. Regulation on the provision of postal services and the use of postal network of universal postal operators in case of extraordinary circumstances ("Official Gazette of MNE" No. 43/15) 2. Rulebook on the amount of one-time fee and annual fee for performing postal services ("Official Gazette of MNE" No. 57/12) 3. Rulebook on the manner of issuing and usage of postal stamps ("Official Gazette of MNE " No. 60/13) 4. Rulebook on performing Postal Services ("Official Gazette of MNE", No. 45/17)

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5. Rulebook on nomenclature of postal services ("Official Gazette of MNE " No. 81/17) 6. Decision on the Adoption of General Conditions for performing the Universal Postal Service of the Post of Montenegro ("Official Gazette of MNE " No.36 / 17) 7. Rulebook on the manner of keeping the accounting and net cost calculation of the Universal Postal Operator ("Official Gazette of MNE", No. 37/17) 8. Rulebook on the type and manner of submitting of postal operators data ("Official Gazette of MNE" No. 19/12) 9. Rulebook on criteria for determining the prices of universal postal services ("Official Gazette of MNE" No. 19/12) 10. Rulebook on professional supervision in the field of Postal Services ("Official Gazette of MNE" No. 34/12) 11. Rulebook on procedure and criteria for selection of the Universal Postal Operator ("Official Gazette of MNE ", No. 17/17) 12. Rulebook on more detailed requirements for performing Universal Postal Services ("Official Gazette of MNE", 29/17)

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CHINA – ADDITIONAL QUESTIONS

Part I. Questions based on Report by the Secretariat

Summary, para 27 Montenegro's growth is likely to accelerate in the near future, driven largely by highway construction spending and tourism and energy investments, as well as related higher consumption.

Question 1: What are the development plans in terms of energy investment in Montenegro?

Answer: The directions and priorities for the development of the energy sector in Montenegro are defined in the Energy Development Strategy for Montenegro by 2030 and Action plan for its implementation for 5 years period. Please find a links for downloading these 2 documents: http://www.oie-res.me/index.php?page=akcioni-plan-razvoja-energetike and http://www.oie-res.me/index.php?page=strategija-razvoja-energetike

Question 2: What investment policies has Montenegro formulated to meet the EU's requirements on the proportion of renewable energy?

Answer: The state of Montenegro, as a member of the Energy Community, has committed for achieving a 2020 share of 33% of energy from renewable sources in the total final energy consumption. According to the adopted Report on the Implementation of the National Action Plan for the use of renewable energy by 2020 (hereinafter: Report), for 2014, the amount of 31.9% was determined, and for 2015 the amount of 31.7% in total final energy consumption. Pursuant to the provisions of the Law on Energy ("Official Gazette of Montenegro", No. 5/16 and 51/17), the Ministry of Economy is obliged to submit to the Government of Montenegro the Report for the previous two calendar years. In this regard, during this year, the preparation of the Report for 2016 and 2017, which will determine the new share of energy from renewable sources in the total final energy consumption, is planned.

On the basis of six implemented tender procedures, the realization of 18 concession contracts is currently being implemented, which envisages the construction of 37 SHPPs, while 16 energy concessions have been concluded on the basis of the energy permit, which envisages the construction of 16 HPPs with installed power below 1 MW. In accordance with the aforementioned, and on the basis of concluded concession contracts, a total of 53 small hydropower plants (hereinafter: SHPPs) are planned, from which the construction of 12 SHPPs has been completed so far. The total installed power of all sHPPs, whose construction is envisaged by the concluded contracts, is 94 MW, and the total annual production is about 310 GWh.

Page 7, para 3.12 Reforms aimed at spurring productivity growth – to address Montenegro's persisting production diversification and international competitiveness challenges – are under way in several areas (e.g. public finance management, energy, transport and telecommunications, business environment, reduction of the informal economy, foreign trade and investment facilitation).

Question 3: What reforms are being undertaken in the energy sector in Montenegro?

Answer: Bearing in mind the fact that energy presents a pillar of the overall, long-term and sustainable development of each country and that the energy sector is one of the strategic sectors of the Montenegrin economy, the Government of Montenegro has decided to dedicate its full attention to both, development of the energy sector reform activities within this sector and the inclusion in regional and European energy market. Montenegro in the past decade has been going through a transition process, and therefore there are significant changes in the energy sector.

With the establishment of Energy Community, the EU has expanded its internal energy market to South-eastern Europe and opened the possibility of expanding to all those who express interest. Energy Community is based on implementation of the relevant Acquis communautaire and liberalization of domestic electricity and natural gas markets of Energy Community Member States.

With the new Law on Energy adopted on 22 April 2010 Montenegro has transposed into its legislation the provisions from the Second Energy package.

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After the adoption of Energy Law in 2016 Montenegro has implemented the directives and regulations of the European Union's Third Energy Package, which guarantees the investors favourable conditions for their investments in the field of energy, as it is the case in the EU Member States.

In accordance with the commitments of Montenegro under the Treaty, ERA has passed the Decision, in accordance with its competency under the Energy Law, on electricity market opening on 01.01.2009 for all electricity customers (eligible customers), except for households, for which the market was opened after 01.01.2015 (in accordance with Treaty establishing Energy Community).

In 2009, the Government of Montenegro-Privatization Council and Capital Projects launched tendering procedure for recapitalization of Elektroprivreda Crne Gore (EPCG). In September 2009, the contract was signed for sale of a minority package of shares and simultaneous recapitalization with the Italian partner A2A s.p.a. The Italian company bought shares of minority shareholders and by this became the owner of 41.7% of the share capital.

In addition to this Agreement, a Management Contract has been signed.

The complex relations of strategic partners are occasionally corrected, by singing Memorandums of understanding and annexes, which is followed by signing a new Shareholders Agreement in July 2016 between the State of Montenegro and A2A S.P.A. and after that the Annex 1 of that contract in March 2017.

In July 2017, A2AS.p.A ("A2A") announced its decision to exercise the put option in EPCG, pursuant to the envisaged by a shareholder agreement between the Government and A2A. The Government will buy €250 million of A2A's shares in EPCG, to be paid in seven annual instalments.

In 2009, the first phase of restructuring of vertically integrated EPCG was completed with the unbundling of FU Transmission from the ownership of vertically integrated company and establishment of a new independent energy company (CGES AD). Government of Montenegro is owner of 55% of shares, Italian company Terna Reta Elettrica owns 22%, and rest of shares is owned by financial fond and other parties.

Market Operator is, according to the new Law on Energy, categorized as new, legal, energy entity, established by the Government of Montenegro. Establishment of Electricity Market Operator (COTEE ltd) was concluded in August 2011. Government of Montenegro is 100% owner of the COTEE.

Montenegrin Electric Power Distribution System (CEDIS d.o.o.), an electric power distribution system operator was unbundled from EPCG and established in 2016. EPCG is owner of 100% of shares.

In 2017, the Electricity Exchange Company d.o.o. was established by COTEE, CGES and EPCG and the trading should begin by the end of this year.

Also, more information can be found in Trade policy review report by Montenegro in part 3.4 for energy.

Page 7, para 3.12 Grants, tax concessions, guarantees, concessional loans, debt write off and rescheduling continued to support investment, production and trade by, inter alia, encouraging micro, small and medium-sized enterprises (MSMEs), R&D, competitiveness improvements, cluster development, regional development, entrepreneurship and job creation.

Question 4: What specific supports may the energy sector get?

Answer: Trough feed in tariffs, producers of electricity from renewable energy sources might grant privileged producer status. This status means that producers will receive incentive price for production and guaranteed purchase of electricity for the 12 year period.

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On the link below you can find secondary legislation on RES: http://www.oie-res.me/index.php?page=uredbe-i-pravilnici

Question 5: Are there relevant preferential tax policies for renewable energy?

Answer: No, there are no preferential tax policies.

Page 50, para 3.12 "All ongoing trade facilitation projects are overseen by the NTFC. Under the NTFCs supervision, the first National Trade Facilitation Strategy – intended to address systemic bottlenecks in cross-border trade and define a five-year framework for the implementation of concrete trade facilitation reforms – is under preparation and is expected to be adopted by the end of first quarter of 2018."

Question 6: Please brief on the main contents of the National Integrated Border Management Strategy.

Answer: Trade Facilitation Strategy is a horizontal public policy and the specific areas covered by this strategy are to a lesser extent covered by some existing strategic documents, such as Economic Reform Program 2018-2020, Integrated Border Management Strategy 2014-2018, the Business Strategy of the Customs Administration 2016-2018. Using the mentioned documents as a common starting point, this Strategy brings added value as it represents a strategic approach to regulating this matter.

The Trade Facilitation Strategy was adopted by the Government on the session held on 29 March 2018. The Strategy represents a joint five-year reform plan for all competent authorities in the area of trade facilitation. The Strategy is also an answer to a number of obligations arising from the EU accession, WTO Trade Facilitation Agreement and regional CEFTA Additional Protocol 5.

The Strategy envisages that by the end of December, 2022, Montenegro will eliminate cross-border administrative inefficiencies affecting its competitiveness, thus reducing the time for import, export and transit of goods by 50%, and the accompanying costs by 20%.

To achieve this strategic goal, the Strategy defines five "operational goals" and, with respect to each, sets out a "set of measures" to be implemented by the competent authorities. These goals are focused on improving transparency and access to information; harmonization and rationalization of formalities, documentation and fees; implementation of simplified and expedited procedures for clearance of goods; improving cooperation and increasing the effectiveness of border controls; and extension of automatic processing and electronic data exchange.

The primary focus of the Integrated Border Management Strategy 2014-2108 is security: "to ensure the efficient operation of border police and other departments that have jurisdiction over the state border in order to safeguard national security and the security of the European Union, particularly with regard to combating illegal migration and cross-border crime".

However, the IBM strategy also includes some trade facilitation-related objectives. In particular, within the framework of the strategic goal 4-Interministerial cooperation, the Strategy defines the activities and measures for its improvement.

Question 7: Please brief on the integrated border management in Montenegro, including cooperation between domestic border agencies in Montenegro and cooperation with border agencies in other countries.

Answer: The State Border Commission, inter alia, deals with Integrated Border Management. This Commission is managed by the Ministry of interior, and members are representatives of all border services. An Integrated Border Management Strategy has been adopted with the Action Plan for its implementation. The aim of the Strategy is to clearly define tasks, to provide guidance for development and planning within relevant bodies at the national, regional and local levels. All competent services quarterly inform the Commission of the activities carried out, and the Commission reports annually Government and proposes the Action Plan for the next year, which

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- 17 - the Government adopts. Integrated border management teams for the implementation of the Strategy and the Action Plan at the local level are educated at all border crossings.

Page 104, para 3.150 "Parallel imports are not forbidden; as long as the goods are original, they can enter the free market but sometimes are marketed in a way that the trademark owner might not consider favourable. No data or other information on values of parallel imports is available from the authorities as the Customs Administration does not keep such records."

Question 8: Could you brief on specific laws and regulations on parallel imports in the fields of patent and trademark in Montenegro?

Answer: Customs Administration deals with goods under suspicion of IPR infringement in accordance with Regulation on the customs treatment of goods for which there is reasonable suspicion of infringing intellectual property rights (Official Gazette of MNE no. 48/2016).

Exception from the application of the Regulation is the original goods and parallel import which implies the trade with original goods. Customs authority can only apply prescribed measures on goods for which exists the reasonable suspicion of being counterfeited.

Specifically, Article 2 paragraph 1 point 3 of the Regulation stipulates that the Regulation shall not be applicable on the goods manufactured under the consent of the rights holder and for the goods, for which the rights holder authorized a person to manufacture a specific quantity of goods, which was manufactured in larger quantities from agreed by that person and the rights holder (parallel imports).

In addition, the Patent Law and the Law on Trademarks don't have any specific provision on parallel imports.

Page 105, para 3.153 "The 2015 Law on Patents incorporates several novelties including the evidence of patentability which contributes to the legal strength of the patent system in Montenegro. Patent owners must, not later than the expiration of the ninth year of the patent, submit the proof of patentability and a certified copy of the substantive examination performed by a contracting national or international IP Office (Article 32 of the Patent Cooperation Treaty) or an IP office that has signed a cooperation agreement with IPOM (Article 47). The revalidation of national Serbia and Montenegro State Union patents within six months of entry into force of the new Patent Law is allowed (Article 161). In addition, the 2015 Law allows the revalidation of European Patents extended to Serbia prior to 1 March 2010 (when the agreement between Montenegro and the European Patent Office (EPO) was signed) (Article 162), clarifies the procedure for obtaining a Supplementary Protection Certificate (SPC) (Article 87) and elaborates provisions with respect to court action."

Question 9: Are the evidence of patentability and evidence of substantive examination referred hereto for extended protection of other countries' patents in Montenegro?

Answer: The provisions of the Patent Law regarding the matter of patentability and substantial examination refers to all national patent applications, i.e. applications submitted in front IPO Montenegro regardless of whether it's been submitted by Montenegrin or foreign inventors. In other cases (on the basis of Patent Cooperation Treaty and Extension Agreement between the Government of Montenegro and EPO) substantial examination is being done by EPO.

Question 10: What does the data on patentability mean?

Answer: In accordance with the Law on Patents, a patent is legally protected invention in any field of technology. Patent enjoys legal protection if it is new, involves an inventive step and if it is susceptible of industrial application. The holder of the patent shall, not later than the expiration of the ninth year of the patent, submit the written evidence (evidence on patentability) that the invention protected by the patent meets the requirements of novelty, inventive step and industrial applicability. Written evidence shall be a certified translation into Montenegrin of a specification of a patent granted for a same invention in the course of substantive examination of a patent application carried out by national and international offices in accordance with Article 32 of the Patent Cooperation Treaty, as well as other institutions, with which at the time of the submission

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- 18 - of the evidence of the patentability competent authority (IP Office of Montenegro) has signed a cooperation agreement.

Question 11: What are the contracting nations and IP Offices that has signed a cooperation agreement referred in this paragraph?

Answer: So far, IPO Montenegro hasn't signed any Cooperation contract with any IPO which are in charge to perform substantial examination procedure, but the Office is undertaking first steps in this regard.

Page 108, para 3.164 "The application examination procedure can be accelerated if: a procedure has been initiated before a court or an inspection authority, or a customs-related procedure has been initiated at the request of the court or the competent authority; and when the application for international registration of an industrial design has been filed. The holder of the industrial design rights may grant the rights to a registered industrial design based on a licence agreement."

Question 12: Can the application examination procedure be accelerated except for the industrial design? If yes, what are the specific provisions?

Answer: The expedited (accelerated) procedure exists also in the Trademark Law. The trademark application may be examined in an expedited procedure: 1) in case of the procedure initiated before a court, inspection supervision procedure or customs related procedure at the request of the court, competent inspection authority or the customs authority; 2) if, at the request of the applicant, the registration must be done for the purpose of exercising the union or exhibition priority right abroad; 3) if expedited registration needs to be done in accordance with other regulations. There are no provisions for expedited procedure in the Law on Designations of Geographical Origin and in the Patent Law.

Page 131, para 4.88 "In July 2014, the Government approved a new Energy Strategy until 2030, with the focus on exporting electricity."

Question 13: What are Montenegro's energy and electricity development targets for 2030?

Answer: In order to achieve the defined priorities, the Energy Policy and Energy Strategy have identified the following strategic commitments:

• maintenance, revitalization and modernization of the existing and construction of new infrastructure for production, transmission and distribution of energy; • reduction of dependence on electricity imports; (i) reducing the specific consumption of final energy, (ii) increasing energy production (primary and secondary) by using its own resources; and (iii) reducing energy losses from production to final consumption; • increasing energy efficiency; • increasing the share of the use of renewable energy sources; • Improvement of heating and/or cooling systems in buildings; • realization of strategic 90-day reserves of petroleum products, in accordance with the dynamics and obligations of Montenegro towards the Energy Community or the European Union; • exploration of oil and gas in the Montenegrin submarine and in the continental part, as well as coal in the Pljevlja and Berane basins; • the proactive role of the State policy in the efforts to ensure access to natural gas systems through international projects (Ionian-Adriatic gas pipeline, Trans-Adriatic gas pipeline, etc.); development of natural gas systems (including the construction of regional gas pipelines and natural gas installations); • increasing the efficiency of energy companies' operations by reducing operational costs, technical and commercial energy losses, with justified return on investment; • Continuation of restructuring of energy entities and timely adoption of further development plans; • Sustainable development of energy in relation to environmental protection and international cooperation in this field, in particular on reduction of greenhouse gas emissions in accordance with the Paris Agreement;

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• Encouraging the research, development, transfer and application of environmentally sustainable new technologies in the energy sector; • harmonization of the legislative and regulatory framework in line with EU requirements; • Creating an appropriate legislative, regulatory and institutional-financial framework to encourage private sector participation and investment in energy; • provision of social protection of vulnerable (vulnerable) customers of electricity; • reaching agreements with neighboring countries on the optimal exploitation of common hydro-potential and water management, as well as the planning and construction of new electricity interconnection lines for liaison with these countries; • active international cooperation in the field of energy.

Question 14: Does Montenegro consider attracting foreign investments for energy infrastructure construction?

Answer: One of the main priorities in energy sector is attracting foreign investors having in mind that Montenegro is small country and small economy to finance big energy infrastructure.

The Law on Foreign Investments stipulates that foreign investors enjoy national treatment, i.e. they can establish business organizations and invest into them on the territory of Montenegro under conditions applicable to nationals establishing business organizations; the assets of foreign investors cannot be subject to expropriation, except when the law stipulates the existence of public interest to do so, which is done for a fee in accordance with the law.

Page 137, para 4.94 "Under the Law on Taxes on Insurance Premiums (OG No. 27/04 as amended), a tax of 9% applies to all types of non-life insurance, except for: accident insurance, voluntary health insurance and agriculture insurance."

Question 15: Does the medical insurance of Montenegro cover traditional Chinese medicine therapy?

Answer: Mandatory health insurance, which is financed from the state budget, does not cover traditional Chinese medicine therapy. There are Law on Health Insurance and Law on Health Protection which prescribe health services and categories of health protections that are covered by the mandatory health insurance.

Some of the insurance companies in Montenegro, selling private health insurance (not connected to the state compulsory health system), recognize and cover costs of alternative medical treatments such as homeopathy and acupuncture, when applied by certified specialists in registered health institutions and when it is indicated as a treatment for an illness covered by the insurance contract.

Page 141, para 4.47 "The guiding strategy for the manufacturing sector is the "Industrial Policy of Montenegro Until 2020", adopted in 2016. This integrates measures and activities for the manufacturing sector which were incorporated into an earlier "Development Strategy of the Manufacturing Industry in Montenegro 2014-2018"."

Question 16: Please specify the specific market measures for the manufacturing sector.

Answer: In the process of implementation of the Industrial policy of Montenegro as well as previously adopted Development Strategy of the Manufacturing Industry it has been recognized the necessity for easier business access to the domestic and international markets.

In line with this, several activities and measures have been planned and realized in accordance with annual Action plans for implementation of Industrial policy, aiming to improve the production and geographical diversification and specialization as well as to increase export competitiveness through the extension of the value chain, in order to generate higher value of export products and better integration into global value chains.

In the previous period, specific measures were implemented especially in order to strengthen enterprise export performance in priority sectors through increasing the competitiveness of

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- 20 - individual enterprises and improving the structure of exports. These activities mainly refers to improving of the concept of the enterprises organization into clusters and strengthening of enterprise networks, realization of support programme for enterprises for implementation and certification based on standards, harmonization of technical regulations and standards, standardization of codification procedure and quality assurance of products for needs of defence purposes, support to internationalization of the enterprises and their business within foreign markets.

The above mentioned activities are not only focused on manufacturing industry but also on other priority sectors with potential for growth, and it is expected that through enhancement of competitiveness they will significantly contribute to reducing trade imbalance, by increasing exports and reducing imports in sectors in which Montenegro has comparative advantage.

Part II. Questions based on Report by the Montenegro

Page 10, para 2.42 Privatization process in Montenegro is being implemented in accordance with the Montenegrin Economic Policy, whose main objectives are reflected in the higher economic growth, ensuring new jobs and employment, increasing investments and export and creating the basis for higher income and growth of citizens' standard of living, together with the increase of competitiveness of the Montenegrin economy.

Question 17: Please brief on the progress of enterprise privatization in the energy sector in Montenegro.

Answer: Please see the answer on question 3.

Page 11, para 2.45 Therefore, the Government has opened all sectors to the PPP model (including healthcare and education, ports, energy, tourism and the valorizations of attractive locations in the costal and northern areas of Montenegro).

Question 18: Please brief on the progress and effectiveness of the application of the PPP model in Montenegro's energy sector and the plan for next steps.

Answer: Public-private partnership in Montenegro is regulated by the Law on Participation of Private Sector for the delivery of public services and the Law on Concessions.

PPP represents a chance for the state / public authorities to revitalize infrastructure in line with planned action and private capital, especially having in mind insufficient budget funds. Also, PPP is an opportunity for foreign companies to present themselves on the market and achieve a significant profit. Therefore, PPP has a special significance according to the Law on Foreign Investments, on the basis of which a foreign person can establish company in Montenegro or invest in it under the same conditions as domestic persons.

An integral part of the PPP arrangement is definitely the field of awarding concessions, as well as the projects in energy sector and waste management.

Energy Development Strategy of Montenegro by 2030 offers the following opportunities in the energy sector: Construction of the second unit of Thermo Power Plant "Pljevlja" (225 MW); Open pit mine "Maoce"; Construction of 4 hydro power plants on River Moraca with total power of 238.4 MW; Construction of small hydro power plants; Renewable energy sources (wind, waste, biomass, solar energy); Projects aiming at improvement of energy efficiency.

The Law on Public Private Partnership is under preparation. In accordance with the Work Program of the Government of Montenegro for 2018, adoption of this Law is planned for the second quarter of 2018. It is expected that this Law will regulate the conditions, method and procedure for approving projects as a public-private partnership, the rights and obligations of public and private partners, the content and procedure for concluding a PPP contract, public-private partnership forms, selection procedures of the best bidder, and other issues of relevance to realization of the public-private partnership project.

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As we stated before, the Government has opened all sectors to the PPP model, including energy, and after the adoption of the Law on Public Private Partnership we will have clear picture on conditions, method and procedure for approving projects as a public-private partnership.

Also, Montenegro is open for all other models including DBOT arrangement, EPC-Engineering, Procurement and Construction, EPCM- Engineering, Procurement and Construction Management depending of the type of the project.

Page 11, para 2.46 Recognizing investment policy as one of the key elements for development and improvement of the country's economy, Montenegro has defined increasing competitiveness through structural reforms and development of infrastructure, as the primary goal of economic policy, which will definitely contribute to creating conditions for higher inflows of domestic and foreign investments. Potential for economic growth has been recognized in the sectors of tourism, energy, transport, agriculture and manufacturing Industry, which are identified as strategic priorities for development of Montenegro.

Question 19: What are the investment policies for the energy sector in Montenegro?

Answer: Please see the answer on question 13.

Question 20: Please brief on the laying of undersea electricity transmission cable between Montenegro and Italy (the direction of electricity transmission, and the relationship with the planned circum-Mediterranean Sea electricity transmission cables).

Answer: Construction of an undersea direct current transmission cable with capacity of 1,000MW between Italy and Montenegro, which is an investment worth over 758 million euros, which is an obligation of Terna, and according to the information used by Terna - the value of the investment is higher, ie. about 1 billion EUR;

Construction of 400 KV substation at the Montenegrin coast with connection transmission lines and transmission lines from Montenegrin coast to Pljevlja which is an investment worth around 105 million euros and represents a commitment of CGES and construction of 400 KV transmission line with Serbia and / or Bosnia and Herzegovina.

For the Montenegrin energy sector, the project of construction of an undersea cable for connection of electricity systems of Montenegro and Italy is particularly important. This project is important not only as an energy connection between Montenegro and Italy, but also as an energy connection between the countries of the Western Balkans and the European Union, as well as with regard to the security of energy supply and the development of the region as a whole.

The cable is laid in the sea and currently CGES is working on the construction of land infrastructures. Completion of the SS Lastva, OHL Lastva-Pljevlja (section Lastva-Čevo and diversion of the existing 400 kV OHL Podgorica-Trebinje in SS Lastva) is envisaged in 2018, while completion of the construction of OHL Lastva-Pljevlja, (section Čevo-Pljevlja) is undergoing.

Page 13, para 2.53 & 2.54 & 2.55 "2.53. Within the Programme for supporting industry modernization, companies have the opportunity to reduce the cost of purchase of equipment, by subsidizing the costs up to 20%, more precisely up to €20,000, which will ultimately lead to the improvement of technological processes, products and services and increase in volume and value of turnover.

2.54. In addition, under the Programme for enhancing innovation in SMEs, companies have support available in the form of co-financing the part of the costs for engaging external consultants for the implementation of innovative activities, more precisely for technical studies and solutions, the introduction of special ICT solutions and softwares in the business, creation of new product design and similarly, which means that companies can obtain financial support amount to 50% or up to €3,500 without VAT.

2.55. The objective of the Cluster Development Program in Montenegro is to provide financial support for entrepreneurs, micro, small and medium sized enterprises within clusters, through

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- 22 - investments in tangible or intangible assets or operational costs, in order to strengthen the capacities of clusters and their positioning in the local and international market. ……"

Question 21: Please brief on the role of all kinds of subsidies and support measures in improving the enterprises' competitiveness.

Answer: In accordance with the Industrial Policy of Montenegro to 2020, Montenegro Development Directions 2018-2021, Regional Development Strategy until 2020 and other relevant strategic documents, the Government of Montenegro is continuously implementing various support programs, with the aim to ensure further enterprises development and competitiveness of economy and create more diversified industrial production base.

The Programme for supporting industry modernization is being implemented continuously, since 2016. This form of support, which entails the adoption of new technologies, primarily aims to ensure greater flexibility, productivity and profitability of Montenegrin enterprises, which boosts the competitiveness of enterprises and enables their integration into global value chains, while optimally using the available resources. It is expected that investing in the technical equipment of enterprises will provide an increase in the quality, quantity and output of production and consequently to export growth and positive trends in the trading of goods.

During the implementation of the Programme in 2016 and 2017, €71,136 of grants were awarded for purchase new machines and equipment in the amount of €531,366.

Program for stimulating the development of clusters in Montenegro is being implemented in accordance to the implementation of national cluster development policy. The program has been continuously implemented since 2012. The goal of the program is to support the formation of new clusters, as well as strengthening the capacity of existing clusters. In establishing a cluster, there is a chance for small producers and companies to overcome the limitations that they have in an independent business on the market.

In the period 2012-2017, 21 clusters are supported with total amount of €162,347. The effects of program realization are reflected in the following: enhanced cooperation between cluster members, improved cluster capacities, especially in the segment of marketing policy, increased visibility on the market, procurement of equipment.

Program for increasing regional and local competitiveness through harmonization of business with the requirements of international standards has been implemented in continuity since 2014. The goal of the program is to increase the competitiveness of entrepreneurs through an incentive to improve their business and gain a condition for the placement of products and services in the foreign market. In the period 2014-2017 it was supported 83 companies in amount of €210,400 and they mainly introduced the standards related to the Quality Management System (QMS), which points to the basic requirements in terms of identifying, systematizing and documenting the process in order to satisfy the user's requirements.

Programme for enhancing innovation in SMEs has recognized the need for increasing linkages between businesses and the research sector for development, exchange and implementation of innovation within the industry. During the implementation of the Programme in the period 2016-2017, the total 4 companies have fulfilled conditions and procedure and have been granted with cca €13,000 of subsidy for realization innovative activities by introducing either innovation of products, process or innovation in organization and marketing.

The key effects of the previous realized innovative activities from the enterprises, will be more visible in coming period especially in increase of business profitability, productivity, expansion of product range, improved placements of the products in foreign markets, increase in the number of employees.

Considering the effects achieved so far, it is continued the implementation of all abovementioned programmes with the increase of the budget approved for the subsidies, the increase of the interested and supported companies/clusters that will in the medium term generate appropriate effects on competitiveness of enterprises and subsequently the entire economy.

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Page 31, para 2.61 "Activities related to the draft of the Amendments to the Law on Protection of Competition are in progress. Amendments to the Law on Protection of Competition have been initiated with the aim of forming a single body that would perform activities related to the protection of competition and state aid. Namely, in the amendments, inter alia, it is envisaged that the powers and actions of the State Aid Control Commission come under the jurisdiction of the Agency for Protection of Competition. This will enable that operations of the state aid control are carried out within the existing institutional arrangements, without expanding the network of regulatory bodies."

Question 22: Does the Law on Protection of Competition include any measures that over-limit the imported products?

Answer: No, the Law on Protection of Competition does not include any measure for over limit the imported products.

Part III. Other questions

Question 23: Does Montenegro have access restrictions on foreign investments in transport aviation, general aviation, airport, air traffic, aircraft maintenance, air-ground services, air fuel, computer reservation system and other civil aviation transportation services? What are the specific measures if there are access restrictions? Are there any plans and schedules for further opening up?

Answer: Foreign investors have the opportunity to access all civil aviation services (general aviation, traffic, repair, fuel, etc.) except ground handling (according to the Rulebook on the provision of ground-handling services at the airport.)

The Rulebook was published in the "Official Gazette of Montenegro", No. 68/2015 from 12/8/2015. It came into force on December 16, 2015, and the provision of Article 15 paragraph 7 of this Rulebook shall apply from the date of accession of Montenegro to the European Union), which is in force, this possibility is given when Airports of Montenegro (Podgorica and Tivat) reach 2 million passengers, which has not yet happened.

The Government of Montenegro is actively working to find the optimal solution for the valorization of Montenegrin airports (Podgorica and Tivat) together with the consultant and the mentioned activity should be completed by the end of the year, after which an international tender will be announced.

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COSTA RICA

Questions based on the Secretariat Report (WT/TPR/S/369)

4. Trade Policies By Sector 4.4 Services 4.124.

4.124. Adopted in 2016, the Strategy for the Information Society Development 2020 aims to encourage the growth of the ICT sector, through the realization of various strategic development priorities. These priorities include, inter alia: increasing broadband access (fixed and mobile) availability to certain target levels by 2020 (Table 4.12); strengthening the capacities of the national Computer Incident Response Team (CIRT) to protect, prevent and combat against Internet incidents; helping to improve people's basic and advanced digital skills; increasing the share of ICT in GDP such that the share of e-commerce in total commerce reaches 1.5%; and reaching targets in the areas of e-education, e-heath and e-government.121 With respect to meeting the aforementioned broadband targets, there has been progress, but there remains some way to go (Table 4.12)

- Can Montenegro please confirm whether the strategy includes actions regarding domestic regulations to facilitate and encourage trade in services?

Answer: Developing and stimulating trade in services is recognized within the framework of strategic indicators for e-business, in order to increase the percentage of small and medium enterprises selling their services online.

- Can Montenegro please confirm whether the strategy to encourage growth in the ICT sector involves national treatment or market access limitations to foreign cross border services providers?

Answer: The Strategy doesn't foresee any special treatment regarding market access limitations to foreign cross border services providers.

4.128. […] The Law contains new provisions on the regulation of retail service prices; these prescribe that the Agency may, without a prior market analysis procedure, determine the maximum roaming prices for an operator of public electronic communication services, in accordance with the agreement on the reduction of roaming prices in public mobile communication networks, concluded between Montenegro and other countries.

- Can Montenegro please provide further information on the provisions included in the agreements on the reduction of roaming prices in public mobile communication networks concluded with other countries? With which countries has Montenegro signed this kind of agreements?

Answer:

The Agreement on reducing prices of roaming services on public mobile communications networks is signed among the Ministries responsible for the area of electronic communications from: Bosnia And Herzegovina, Republic Of Macedonia, Montenegro and Republic Of Serbia.

The Agreement established the glide path of lowering roaming costs in region in accordance with EU Regulation (EU) No 531/2012 of the European Parliament and of the Council of 13 June 2012 on roaming on public mobile communications networks.

4.139. The same rights and obligations apply to domestic and foreign legal and natural persons with respect to advertising, teleshopping and sponsorship, as stipulated in the 2011 Rulebook on Audio-visual Commercial Communications (OG No. 36/11).146 Montenegro does not impose any restrictions on foreign legal entities obtaining broadcasting licences, except for where the entities are registered in countries where it is not possible to determine the origin of the start-up capital.

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- Can Montenegro please provide further details on the process applied to determine the origin of the start-up capital of a foreign entity that wishes to obtain a broadcasting license?

Answer:

(1) Pursuant to the Para 3 of Article 135 of the Electronic Media Law, "a domestic legal person having as its founders also foreign legal persons incorporated in countries in which it is not possible to establish the origin of start-up capital shall not be eligible as a licence holder".

(2) In line with Articles 10 and 19 of the Rulebook on the Conditions and Procedure for Awarding Broadcasting Licences, the form of tender application for licence as well as the form of the request for licence, includes a statement confirming that the data provided by the applicant are true and correct, as well as that "its founders do not include foreign legal entities registered in the countries where it is not possible to determine the origin of the start-up capital".

Furthermore, Article 135 of the Electronic Media Law prescribes that "a broadcaster is obliged to notify AEM in writing of any changes in its ownership structure". Also, it is prescribed that "a broadcaster shall procure a prior written approval of the Agency Council for any change in the ownership structure exceeding a 10% stake".

Having that in mind, Article 31 of the Rulebook on the Conditions and Procedure for Awarding Broadcasting Licences prescribes that the "Agency Council may withhold the prior consent to change in the ownership structure greater than a 10% stake, if such a change implies that the broadcaster's founders would include foreign legal persons registered in the countries where it is not possible to determine the origin of start-up capital".

- Can Montenegro please confirm that the foreign legal entity requires local presence and/or establishment to provide such services?

Answer: Yes, foreign legal entity requires local presence and/or establishment to provide broadcast services.

4.140. With respect to film production, the 2015 Law on Cinematography sets out the State's framework for the promotion and development of cinematography through the Film Centre of Montenegro. This Centre is a public institution which officially started operations in April 2017; it aims to create a stimulating environment for the Montenegrin film community and its promotion both regionally and globally. Its main activities are the management of the film fund (see below); support for new film productions; the promotion of Montenegrin cinema and its potential for international productions; training programmes for film professionals directed towards raising the level of their professional skills; and a series of activities around film festivals and film literacy. The Centre is funded from two sources: the state budget, and levies on companies which exploit cinematographic works.148 It offers incentives for both foreign and domestic producers intending to film in Montenegro. After the wrap-up of a feature film, documentary, animation, television film or television series, the producer has the possibility to get a cash rebate of the investment funds for the film/television project. The refund can cover up to 20% of eligible expenditures spent in Montenegro for the making of the film, and the rebate is granted after meeting certain conditions. The procedure for reimbursement is initiated by a request for a refund, which the producer submits to the Centre no later than 30 days before the start of the recording of the cinematographic work in Montenegro. Funds are reimbursed by the Film Centre of Montenegro in accordance with provisions in the Law on Cinematography and the Decree on Incentives for Cinematographic Production in Montenegro. Funds for reimbursement are provided for in the budget of the state administration body responsible for finance.

- Can Montenegro please provide further information on whether the incentives for foreign and domestic producers intending to film in Montenegro are the same or equivalent?

Answer:

Film Centre of Montenegro offers incentives for foreign producers that intend to film in Montenegro. Productions has the possibility to get a cash rebate of the invested funds for the

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- 26 - film/television project. The refund can cover up to 20% of eligible expenditures spent in Montenegro for the making of the film and is granted after meeting certain conditions. The right to a cash rebate may be granted to the producer of a cinematographic work, a co-producer or production company that performs a service provided that:

1. - the funds spent for the realization of a cinematographic work in Montenegro are not provided from the budget of Montenegro or the Film Centre and are not less than EUR 100,000;

2. - all taxes, contributions and other fiscal obligations prescribed by law have been previously settled in Montenegro;

3. - there are no bankruptcy or liquidation proceedings against the producer; and

4. - a producer or co-producer has at least one feature film that was shown to the public.

Formats eligible: feature films, documentaries, TV films and series while qualifying test means minimum 15 points: cultural content, use of film crew and talents, use of production capacities. Incentives for foreign and domestic producers are the same.

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EUROPEAN UNION

WT/TPR/S/369

Page 42, para. 2.40. on FDI

EU Question N1: the EU would like to know whether the six companies mentioned as benefiting from direct investment incentives as set under 2015 Decree on Direct Investment Incentives were only local, or also foreign ones.

Answer:

The Decree on Direct Investment Incentives ("Official Gazette of Montenegro", No. 08/15, and No. 80/15) is being applied continuously since 2015. The Secretariat for Development Projects published three public notices for participation in the procedure of award of financial incentives for encouraging investments, as follows: 1 July 2015, 11 March 2016 and 3 March 2017. Total of 35 applications were submitted to the mentioned Public notices, including applications of foreign companies.

According to the Decree on Direct Investment Incentives, Investors who realize investment projects in Montenegro can receive financial incentive awarded by the Government of Montenegro. Both Montenegrin and foreign legal entities can apply for investment incentives but only legal entities with registered office in Montenegro can be recipients of investment incentives.

All six companies that have concluded Direct Investment Incentive Agreement are domestic companies, but one of them, Securitas Montenegro is majority owned by Securitas AB from Sweden.

Page 44, Section 2.4.2 on business environment.

EU Question N°2: With regards to improvement of business environment, what is the timeline for ensuring full electronic registration of businesses?

Answer:

The new Company Law which has gone through the public consultations process is to be adopted by the Government by the end of the September 2018. This Law envisages full electronic business registration. In order to enable full electronic business registration, after the entry into force of the Law, Ministry of Finance and Tax Administration, as responsible institution for business registration, will prepare necessary bylaw. Therefore, we expect to have full electronic business registration operational by September 2019.

Page 50 para 3.12 Trade Facilitation." Under the NTFCs supervision, the first National Trade Facilitation Strategy – intended to address systemic bottlenecks in cross-border trade and define a five-year framework for the implementation of concrete trade facilitation reforms – is under preparation and is expected to be adopted by the end of first quarter of 2018. The Strategy is to also support Montenegro's economic development goals and meet its WTO TFA commitments as well as undertakings in the context of the process of accession to the European Union and other relevant international and regional agreements in this area."

EU Question N°3: Could Montenegro give information on the state of play of the TF strategy and its main elements as well as on the timeline for the adoption of measures to facilitate and simplify trade?

Answer:

The Government adopted the Trade Facilitation Strategy on the session held on 29 March 2018. The Strategy represents a joint five-year reform plan for all competent authorities in the area of trade facilitation. The Strategy is also an answer to a number of obligations arising from the EU accession, WTO Trade Facilitation Agreement and regional CEFTA Additional Protocol 5.

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The Strategy envisages that by the end of December 2022, Montenegro will eliminate cross-border administrative inefficiencies affecting its competitiveness, thus reducing the time for import, export and transit of goods by 50%, and the accompanying costs by 20%.

• Could Montenegro indicate its intentions regarding potential notification to the WTO of information in line with Article 1.1, Article 10.6.2 and 12?

Answer:

The activities of the National Trade Facilitation Committee and competent authorities during the last year were mainly focused on on-going projects as well as on developing a comprehensive joint reform plan - the TF Strategy. Since the Strategy is set and adopted the next activities will focus on TFA notification requirements.

• Could Montenegro indicate how implementation of Article 1.1 a) to j) as well as Article 1.4 a) and b) and Article 6.1.2 provisions cannot be considered as belonging to category A commitments?

Answer:

The entire Article 1.1 – "Publication" was notified as category A commitment. As stated above the next activities will focus on specific TFA notification requirements, including those arising from Article 1.4 a) and b) and Article 6.1.2. In addition, the notification of category commitments with the definitive dates for category B and C implementation will be adjusted to the improved situation and notified to the WTO Committee on Trade Facilitation.

Page 58, para 3.14. on fees. The EU notes that Customs inland terminals are located in privately owned facilities which charge a fee to every lorry required to enter the terminal to discharge customs obligations.

EU Question N°4: Does Montenegro intend to review this practice?

Answer:

Regarding this practise, Montenegro is planning to consult EU member states practise in this area, and accordingly to make recommendations and propose possible solutions - especially regarding the potential investments needed. Once the reassessment is done, the conditions will be created for the review of this practise.

Page 64, Export credit, para 3.53 states that "No measures seem to be in place in this area. Regarding the regulatory framework on export credits, the Ministry of Finance in cooperation with the Investment and Development Fund of Montenegro (IDF) prepared a draft Law on Amendments to the IDF Act, which defines IDF responsibilities related to export credits. Both institutions are to adopt a regulation on the modalities for issuing export credits, no later than one year after the day of entry into force of the new Law, which would be harmonized with the relevant EU regulations. Public debate on the draft legislation concluded in August 2017 and, by end-November of the same year, it was under parliamentary procedure. At the same time, the setting of export guarantees was under consideration."

EU Question N°5: Could Montenegro explain the main elements of this Law which has now been adopted and if there are any further legislative intentions?

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Answer:

At its session on November 23, 2017, the Parliament of Montenegro adopted the Law on Amendments to the Law on Investment and Development Fund of Montenegro, which entered into force on December 9, 2017. By this Law, IDF MNE JSC has been authorized to perform insurance activities for exports of goods and services from Montenegro from non-market risks.

The Law on Amendments to the Law on Investment and Development Fund of Montenegro stipulates that the Government of Montenegro, within 12 months from the date of entry into force of this Law, shall issue bylaws, which will regulate the conditions and manner of carrying out export insurance business, which act will be harmonized with the relevant European Union regulations.

Page 84, para 3.93 on SPS issues. Para 3.96 reports that " Importers (and exporters) of consignments must be registered and imports must be accompanied by a phytosanitary certificate issued by a competent authority in the exporting country.151 The implementation of a Plant Passport System began in 2015; as of 1 September 2017, 616 subjects were registered. Imports (and exports) of plants and plants products are subject to documentary, identity and plant health checks by 13 phytosanitary inspectors at Montenegro's 13 official entry points." According to the information available, the Permit to Import Plants and Plant Products has to be required for every import. This practice generates an additional cost and (in addition to other importing costs) consequently increases the final price of the imported products.

EU Question N°6. Are there any plans to simplify the import phytosanitary requirements?

Answer:

Montenegro does not require permit for import of plants and plant products. Montenegro abolished these requirements after adoption of phytosanitary import regulations of Montenegro based on the Law on Plant Health Protection (OG MN 28/06, 28/11) and the Rulebook on phytosanitary measures against introduction, prevention from spreading and suppression of organisms harmful to plants, plant products and objects under supervision, with lists of harmful organisms, plants, plant products and objects under supervision (OG MN 39/11) which entered into force on 4 February 2012. These regulations are harmonized with the EU Commission Directive 2000/29/EC with annexes. http://www.ubh.gov.me/vijesti/111319/National-Plant-Protection-Organization.html

Page 86, paragraph 3.99 states that "Animal and animal products are subject to inspection and quarantine wherever applicable.158 Veterinary inspectors supervise the safety of products of animal origin in production, international trade, wholesale and retail trade. They are also in charge of checking wild and aquaculture fish and their products including snails. Veterinary health checks are performed at the place of dispatch. Importation of consignments of live animals and animal products must be accompanied by international certificates of animal and public health. If an animal or an animal product does not comply with the domestic requirements, an official veterinarian can order its quarantine or temporary storage.161 Under the Veterinary Law and the Food Safety Act, Montenegro can introduce protective measures restricting or banning imports, exports or transit of animals, products of animal origin, food for animals and animal by-products in cases of risk of introduction of infectious diseases (Article 55 of the Veterinary Law)." As happens on the import of plants, the Import Approval for Animal Products impacts the cost of the imported product for the final consumers.

EU question N°7: Are there any plans to revise this requirement or decrease the processing fee?

Answer:

Montenegro, in line with the Programme of Accession to the EU, planned transposition of legislation in the period between 2014 until the end of 2018, while finalization of the measures necessary for its implementation is planned for the period from 2019 until the end of 2020. According to this document, the year 2020 will be appropriate date for implementation of EU import requirements for animal products. Montenegro will undertake all the measures necessary in order to comply with the EU regulations. This means that preparatory work is on-going: veterinary

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Pages 89-93 on subsidies.

EU Question N°8: Could Montenegro provide an overview of how its State aid (in EU terms)/subsidies control system works, and an overview of cases and decisions of the national body responsible for Subsidies/State aid control?

Answer:

As the EU law leaves to Member States (or, in this case, acceding country) a large degree of flexibility for the design of their enforcement regimes, and only requires that the states designate the authority responsible for the application of the EU competition rules (i.e. State aid rules) to effectively comply with the rules, Montenegro has established State aid Control Commission (SACC), authority that is responsible for the compliance of the notified and granted state aid (including subsidies as one of the state aid measures that are defined in Law on State Aid Control) with Law on State Aid Control (hereinafter referred to as: Law).

SACC in short: SACC is an administrative model, where there are two parts of single authority, two functionally separate parts: • First one, as a part of Ministry of Finance, State Aid Control Unit (SACU) is the one that is more investigative and every-day working part; the one that, according to the State aid Law and Rules on procedures of SACC, is in charge of preparing experts ground for decision making of SACC. The experts ground is based on full/complete notification and all information gathered from the grantors. In practice, it happened that SACU decision was overruled by SACC, which is additional element in favour of SACC's independent decision- making process. • The second part, decision-making one, is SACC per se, an authority that meets on ad hoc basis in order to decide whether submitted materials and prepared experts ground is in accordance with the State aid Law and rules in place.

The SACC, by the Law, is designed as an independent authority and formally established as administrative authority, with its own resources as a separate unit in State budget since its establishment, it has a legal personality, as well as its VAT identification number and stamp. There are clear procedures regarding the appointment and terminating terms of office of the SACC members, established by the Law and only possible according to the provisions of the Law.

Also, SACC is not obliged to report neither to the Government nor to the Parliament of Montenegro, but only submits its annual reports to the Government and the Parliament for the sake of the information on granted state aid for the reporting period.

It is very important to stress out that SACC is not a subject of any supervision by any state body, except, as a part of national system; its decisions may be challenged before the Court. However, it is important to have in mind that, as all state authorities, SACC may be the subject of audit of State Audit authority, in accordance with the annual plan of State Audit Institution, if its Senate decides so.

SACC members are elected by the Government of Montenegro and for its works as member of SACU, according to the Law on State aid Control Commission, and are not obliged to inform any member of the Government. They are only bind with the rules and procedures prescribed by the legal acts in this matter and Law on Prevention of Conflict of interests.

Hence, it is important to emphasize that new Law on State aid Control came into force in the beginning of March in 2018. As SACU became the part of The Agency for Protection of Competition – APC by the Law (it is not anymore the part of Ministry of Finance), all SACC's competences are taken over by the APC. According to the Law and new Law for Protection of Competition ex ante and ex post state aid control will be conducted by new authority (body), in this case Council of the Agency. All information on ex ante, ex post and other mechanisms of state aid control are defined by the Law.

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The overview of cases and decisions made by SACC you can find on the portal of SACC: www.kkdp.gov.me.

Pages 91-93 on competition legislation. The paras 3.117, 3.118 and 3.120 on fines indicate that fines may only be imposed by the Court for Misdemeanours, upon request of the Agency for Protection of Competition. The limitation period for initiating such misdemeanour proceedings is two years from the day on which the misdemeanour was committed.

This leads to the following EU Questions:

N°9: Could Montenegro please explain if and how a cartel or abusive practice, which has been initiated more than two years ago, may be sanctioned under the competition law?

Answer:

When cartel or abusive practice has been initiated more than two years ago, under the current legislation no sanctions may be imposed against the undertakings that infringed competition law. If the proceedings have not been initiated within two years from the time when the misdemeanor was committed, there will not be misdemeanor sanctions (fine will not be imposed), while the absolute limitation is foreseen within four years, i.e., the proceedings before the court must be completed by then. In the specific case, the Court will suspend such proceedings due to the statute of limitations. The conditions for statute of limitation for conducting misdemeanor proceedings are determined according to the time when the infringement was committed.

N°10: What about a continuous violation that started more than two years ago – could it be sanctioned under the competition law?

Answer:

A continuous violation that started more than two years ago in particular cannot be sanctioned, because it is related to the first day of the execution of the violation - it is a misdemeanour of the state, regardless of the fact that the unlawful state lasts longer.

N°11: Para 3.118 last sentence mentions a possible change in the limitation period. Could Montenegro please explain whether such change took place and indicate the relevant legal basis?

Answer:

There were no changes in this respect, i.e. the statute of limitation was not expanded from existing two to three years.

Page 97. Section 3.3.5 on government procurement. Montenegro's public procurement law allows for procurements done under international agreements to be exempted.

EU Question N°12: Could Montenegro provide more detailed information on how this provision is used in practice and how does Montenegro ensure that this does not unduly restrict competition?

Answer:

International agreements are the most important method of establishing mutual rights and obligations of states and other subjects of international law in their particular (special) relationship. Relations between sovereign and equal entities are essentially based on the balance and the reciprocity.

Ratification is an international unilateral act by which a state gives its consent on the international level to be bound by an international treaty. It is a unilateral recognition of a contracting party to the other party, by which the signed international treaty is accepted as obligatory, and which means an earlier act of the highest competent authority of the country (usually Parliament) adopted on a national basis and in accordance with its constitutional provisions, and authorizing the ratification as an international act (i.e. internal ratification, validation).

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The Public Procurement Administration indicates that, apart from the general obligation of contracting authorities to apply the public procurement procedures stipulated by the Law, the legislator also envisaged some exemptions which were stated in Article 3 of the Public Procurement Law of Montenegro (Official Gazette of Montenegro 042/11 of 15 August 2011, 057/14 of 26 December 2014, 028/15 of 03 June 2015, 042/17 of 30 June 2017) and these are as follows:

Provisions of this Law shall not apply to:

1) procurement procedures conducted in accordance with special international organization's procedure, on basis of an international agreement or treaty concluded with that international organization; 2) procurement procedures conducted in accordance with special rules on basis of an international agreement or treaty concluded between Montenegro and one or more countries for a project that shall be conducted or used jointly by contractual parties; 3) procurement aimed at protection and recovery from catastrophes and major disasters – state of emergency; 4) confidential procurement, in accordance with the Law; 5) procurement aimed at the acquisition, development, production or co-production of program material, intended for radio or television broadcasting; 6) procurement of arbitration, amicable dispute resolution and notary services; 7) procurement of financial services in connection with the issue, sale, purchase or transfer of securities or other financial instruments, in particular transactions by the contracting authorities to raise funds, capital and services of the Central Bank of Montenegro; 8) procurement relating to the labor relations; 9) procurement of services related to employment; 10) services of advertising notifications on public procurement procedures in the media; 10a) procurement of election material; 10b) procurement of goods and services related to the operation of aircrafts of the Government; 13) special public procurement prescribed by this Law.

This Law shall not apply to the process of granting concessions, and rendering services or hiring experts (financial, legal and/or technical) in the process of privatisation of the economy, sale and renting of land, buildings and other movable or immovable assets or rights.

Public procurement contracts which are subject to different rules are implemented on basis of an agreement concluded between one or more countries for a project which the contracting parties will jointly implement or use, whereupon the agreement clearly specifies the public procurement procedure, that is, the procedure that will be used in implementation of the said agreement.

Thus, the basic requirement for the application of the exemption is that the international agreement/contract, or credit or donor agreement /contract clearly and unequivocally defines the public procurement procedures with the elements incorporated into the legal form of the international agreement, in particular: - a clearly defined common project, - a clear public procurement procedure and - ratification by the highest competent authority of the country.

Page 104. Industrial property. Para 3.150 "Parallel imports are not forbidden; as long as the goods are original, they can enter the free market but sometimes are marketed in a way that the trademark owner might not consider favourable.6 No data or other information on values of parallel imports is available from the authorities as the Customs Administration does not keep such records." The EU encourages Montenegro to apply the national exhaustion regime to avoid parallel imports.

EU Question N°13: Could Montenegro clarify which exhaustion regime it applies? National or international exhaustion?

6 Petosevic online article, "Montenegro IP Report: A Decade After", 20 October 2016. Viewed at: https://www.petosevic.com/resources/articles/2017/02/3521.

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Answer:

Regulation on the customs treatment of goods for which there is reasonable suspicion of infringing intellectual property rights (Official Gazette of MNE no. 48/2016) prescribes conduct of customs authority with goods for which there is a reasonable suspicion that its import, export or transit infringes intellectual property rights. Exception from the application of the Regulation on the customs treatment of goods for which there is reasonable suspicion of infringing intellectual property rights (Official Gazette of MNE no. 48/2016) relates to the original goods and parallel import which implies the trade with original goods. Specifically, Article 2 of the Regulation stipulates that the Regulation shall not be applicable on the goods manufactured under the consent of the rights holder and for the goods, for which the rights holder authorized a person to manufacture a specific quantity of goods, which was manufactured in larger quantities from agreed by that person and the rights holder (parallel import). Customs authority can only apply prescribed measures on goods for which exists the reasonable suspicion of being counterfeited.

In general, Montenegrin IP legislation prescribes national exhaustion of rights and Community exhaustion of rights from the date of accession of Montenegro to European Union.

Section 3.3.6.1.1 on patents

EU Question N°14: Could Montenegro explain the specificities of its supplementary protection certificate regime for pharmaceuticals, plant protection products and paediatric medicines, because it is not mentioned in the report.

Answer:

In accordance with the Patent Law, if a basic patent has been granted for a product which is a component part of a medicinal product intended for humans or animals, or for a plant protection product, for which the placing on the market requires prior authorisation in accordance with special law, the competent authority may grant the Supplementary Protection Certificate (Certificate), under the conditions provided by the Patent Law.

Within the limits of the protection conferred by the basic patent, the protection conferred by the Certificate shall extend only to the product covered by the authorization for placing on market medicine for human or animal use or plant protection product, and for any use of the product as a medicine for human or animal use or plant protection product, for which license has been issued before the expiry of the Certificate. The Certificate shall confer to the holder the rights identical to those conferred by the basic patent and these rights shall be subject to the same limitations and obligations.

A Certificate shall be granted to the holder of the basic patent covering the product or to his successor in right. Upon the application of the patent holder, a Certificate shall be granted if the following conditions are fulfilled on the filing date of its application: 1) that the product is protected by a basic patent in force; 2) that an authorisation to place the product on the market has been granted in accordance with special regulations, 3) that the mentioned authorisation is the first license for placing the product on the market, and 4) that the product as: - a medicinal product for human or animal use has not already been the subject of the Certificate; - plant protection product has not already been the subject of the Certificate.

The Certificate shall take effect immediately at the end of the lawful term of the basic patent and lasts for a period equal to the period which elapsed between the date on which the application for a basic patent was filed and the date of the first authorization to place the product on the market, reduced by a period of five years. The duration of the Certificate may not extend beyond five years of the date on which it takes effect. The duration of the Certificate shall be extended only once by six months if an authorized medicinal product which is protected by a Certificate or a patent that qualifies for the granting of a Certificate has completed all the studies required in compliance with an agreed paediatric investigation plan, provided that the authorization was issued in all member states of the European Union.

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Page 107. Section 3.3.6.1.3 on GIs. The Secretariat report refers to 'Protected Designation of Origin' (PDO) or 'Protected Geographical Indication' but also to ' controlled appellation of origin' (page 107).

EU Question N°15: Could Montenegro provide some information on what are criteria for the use of a 'controlled appellation of origin' and if they are different than the once for a PDO and PGI?

Answer:

In Montenegro, Geographical indications are regulated by four laws7. MARD is responsible for geographical indications for food and foodstuff products, wine and alcohol beverages. Intellectual Property Office of Montenegro (IPOM) is responsible for geographical indications for other products and services.

In accordance with the regulation under the responsibility of MARD8, a producer of agricultural products may use PDO and PGI, provided that the product complies with the conditions of the relevant specification. Following the registration of the designation or indication and following the procedure of verification of compliance of the product with the specification, a producer of the agricultural product shall submit an application for entry in the Records on users of registered designations of origin or Records on users of registered geographical indications, as appropriate. The entry in the Records shall be done by a decision of the Ministry (MARD). The producer of agricultural products shall be deleted from the Records where it no longer complies with the conditions from the product specification.

In accordance with the Law on Indications of Geographical Origin ("Official Gazette of Montenegro" 48/08), which is under the responsibility of IPOM, Indications of geographical origin shall be appellation of origin and geographical indication. An appellation of origin shall be the geographical name of a country, region or a locality, used to designate a product originating therein, the quality and characteristics of which are due exclusively or essentially to the geographical environment, including natural and human factors, and which is produced, processed or prepared within a specific limited geographical area. Geographical indication shall be the indication that identifies certain goods as goods originating from the territory of specific country, region or a locality within such territory, where specific quality, reputation or other characteristics of the goods can be essentially attributed to their geographical origin. The procedure for granting the status of an authorized user of the appellation of origin or geographical indication shall be initiated with the application for recognition of the status of an authorized user of the appellation of origin or geographical indication. The application for recognition of the status of an authorized user of the appellation of origin or geographical indication may be submitted by natural persons or legal entities producing in the particular geographical area the products designated by the name of that geographical area as well as the associations of those natural persons or legal entities. For filing an application for recognition of the status of authorized user of the appellation of origin or geographical indication, the prescribed fee shall be paid. The essential parts of the application for recognition of the status of an authorized user of the appellation of origin or geographical indication are:

• request for recognition of the status of an authorized user of the appellation of origin or geographical indication; • proof of the performance of a particular activity in a particular geographical area.

An important part of the application for granting the status of an authorized user of the appellation of origin is also a proof of the performed quality control of products conducted by an authorized organization listed in the application of the appellation of origin.

EU Question N°16: Could Montenegro provide some information on how the official controls of geographical indications are organised?

7 It mainly consists of the Law on Indications of Geographical Origin (OG No. 48/08 and 40/11), the Act on Spirit Drinks (OG No. 83/09), The Law on Quality Schemes (OG No. 22/2017) and the Act on Wine (OG No. 41/16). 8 The Law on Spirit Drinks (OG No. 53/16), The Law on Quality Schemes (OG No. 22/2017) and the Act on Wine (OG No. 41/16).

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Answer:

Verification of compliance of agricultural or food products with the specification shall be done following the adoption of the decision on registration of designations of origin and geographical indications. The verification of compliance with the specification shall be done by a control body authorised by the Ministry (MARD). The authorization shall be issued to a control body that: - is based in Montenegro; - is accredited in accordance with the standard MEST EN ISO/IEC 17065; - meets the conditions as regards technical equipment and qualified staff.

The list of authorised control bodies shall be published in the Official Gazette of Montenegro. Currently Montenegro has only one Authorised Control Body – "Monteorganika".

The procedure of verification of compliance of agricultural products with the specification shall start with submission of the application to the control body. Where the procedure of verification of compliance verifies that the agricultural products comply with the specification, the control body shall issue a document on compliance of the agricultural products, which is presented to the applicant and the Ministry (MARD). Where the control body establishes major non-compliance with the specification of agricultural, it shall notify the Ministry (MARD) thereof, also shall include the extent of non-compliance and measures that need to be undertaken in order to eliminate the non- compliance.

The control body shall present the Ministry (MARD) annually with a report on assessments of compliance of agricultural or food products with the specification no later than by January 31 of the current year for the previous year. The assessment of compliance of agricultural and/or food products with the specification shall be done on the basis of the control plan of the control body.

In accordance with the Law on Indications of Geographical Origin ("Official Gazette of Montenegro" 48/08), which is under the responsibility of IPOM, any document (attestation, certificate, credential or report) confirming that the quality control of the product has been performed, issued by the authorized organization named as the organization responsible to perform quality control in the request for the registration of the appellation of origin and the request for the recognition of the status of an authorized user of the appellation of origin, which verifies that the product subject to control has all the specific characteristics listed in the report on the manner of production of the product and specific characteristics and quality, shall be deemed to be the proof that the quality control of the product has been performed. This document shall be valid for six months.

Inspection control over the use of the GO and the OP is carried out by the Ministry (MARD), through the agricultural inspector and food inspector, and the market inspector.

The Law on the Application of Regulations which regulate the Protection of Intellectual Property Rights ("Official Gazette of the Republic of Montenegro ", No. 45/05) stipulates, inter alia, that the market inspector performs inspection control over the production and trade of goods that violate industrial property rights, including geographical indication of origin.

The procedure of inspection controls in the area of the geographical indication of the origin for the industrial products and domestic work, which is conducted by Market inspection shall be initiated: - Ex officio and - at the initiative-request of the right holder.

The request for the initiation of proceedure shall be submitted to the Market inspection in writing and may be individual, if it relates to a particular type and quantity of goods, and generall, when it relates to all quantities of certain goods for a certain period of time. In the case of a general request, the request shall include the time period for which the protection is requested.

The content of the request contains: a description of the goods with the data on the basis of which the goods that infringe rights can be identified and the proof that the applicant is the right holder on the goods to which the request relates.

The issues of inspection supervision that are not regulated by this Law are subject to the provisions of the law regulating inspection supervision (Law on Inspection Supervision "Official

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Gazette of the Republic of Montenegro" No. 39/03 and "Official Gazette of Montenegro" No. 76 / 09, 57 / 11,18 / 14 and 11/15).

Page 112. Para 3.183 on domestic enforcement

EU Question N°17: Could Montenegro elaborate on the actions that the customs authorities can take against goods in transit suspected to be infringing an IP right?

Answer:

Customs authority even in the transit procedures, in case of reasonable suspicion that the goods are infringing intellectual property rights, can suspend the requested customs procedures and temporarily detain the goods, of which is informed the rights holder who has registered rights for the territory of Montenegro. Further procedure of the customs authority is prescribed by the Regulation and depends from the rights holder alone, since the rights holder is entitled to notify customs administration within prescribed deadline, that it has initiated procedure with the competent court in order to establish infringements of intellectual property rights or to submit application for the simplified procedure of destruction of goods, pursuant to the provisions of the Article 19 of the Regulation.

Page 141. Paragraphs 4.112 and 4.113 on insurance Para "4.112. "Insurance and reinsurance providers must be established either as a joint-stock company with a head office in Montenegro or as a branch of a foreign insurance company. Minimum capital requirements are either €2 million or €3 million for companies engaged in non-life insurance activities ; and €3 million for companies engaged in life insurance activities and companies engaged in reinsurance business. Para 4.113. Foreign insurance companies may pursue insurance activities via a branch; half of the aforementioned minimum share capital must be deposited with a bank with a registered office in Montenegro, and half of the guaranteed capital must be available at its disposal in the territory of Montenegro (one quarter of the guaranteed capital must be deposited in a bank). Applications by foreign insurance companies from non-WTO member states may be accepted or rejected on the basis of reciprocal access for Montenegrin insurance companies. A foreign-owned insurance company may also be established as a joint stock company within Montenegro; this has been the option chosen by a number of large insurance groups. There are no citizenship requirements attached to employment within insurance companies. However, the Executive Director and Board Members must have the level of competence in the Montenegrin language needed in order to carry out their activities".

EU Question N°18: The EU welcomes that foreign insurance companies may pursue insurance activities via a branch. However, foreign banks do not seem to benefit from branching. Could Montenegro explain its reasoning for this difference?

Answer:

The system promotes full equality among domestic and foreign investors in terms of bank establishment as well as operations of a bank established by that foreign legal/natural entity. There are no restrictive measures applied to foreign natural/legal entities, the same regulations are applied equally.

According to the Banking Law, branch is a part of a bank which does not have the status of a legal person and performs all or just some of the activities of that bank. A bank that is registered and licensed in Montenegro may establish (with a prior approval of the Central Bank) branches, representative offices and other organizational parts in Montenegro and in foreign countries, which do not have the status of a legal person, and dependent legal persons, under the provisions of this Law. A foreign bank may operate in Montenegro through its branch with prior issuance of the approval of the Central Bank for branch operations. This approval must specify operations which a branch of the foreign bank may perform in Montenegro.

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Also, the Law prescribes conditions for denial of requests for approval for branch operation, among which the ground for denial of the request/approval for branch operation is lower long-term credit rating of a foreign bank (lower than A), or if deposit protection system in a country where head office of a foreign bank is located does not provide deposit protection of at least an equivalent level of deposit protection in Montenegro.

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Page 12 para 2.50 mentions that nine local governments have identified business zones of local importance so far in view of establishing a special regime and aid.

EU Question N°19: Could Montenegro explain which criteria were used to identify these business zones? Has the national body responsible for State aid control given its comments prior to the establishment of the business zones? If so, what were the comments of the national body responsible for State aid control, and were they taken into account?

Answer:

Decree on business zones On 17 November 2016, the Government of Montenegro adopted the updated version of the Decree on Business Zones (OG MNE No. 20/11 and 20/15). According to the Decree on business zones (OG MNE No. 20/11 and 20/15) business zones are divided into: 1) Business zones of strategic importance and 2) Business zones of local importance.

Business zones of strategic importance could be founded at the locations that fulfil the following requirements: 1) the municipality, where the business zone is located, must have more than 20,000 inhabitants; 2) the location area cannot be less than 10ha; 3) the location must be in accordance with the spatial planning documents; 4) for the location property issues related to the site must be resolved.

Business zones of the local interest could be founded at the locations that fulfil the following requirements: 1) the location must be in accordance with the spatial planning documents; 2) for the location property issues related to the site must be resolved.

Yes, the Commission for the State Aid Control is responsible for providing comments on draft Decisions on the establishment of a business zone.

Page 12 para 2.51 mentions that "beneficiaries are exempted from various contributions and taxes, and get other incentives such as land at a favourable price".

EU Question N°20: Could Montenegro please indicate the national legal basis for such incentives?

Answer:

The Decree on fostering new direct incentives (OG MNE No. 80/15) and the Decree on business zones (OG MNE No. 20/11 and 20/15) provide for the national legal basis for mentioned incentives.

Page 24 para 3.70 on standards states that "The Institute for Standardization Montenegro (ISME) is competent for adopting of Montenegrin standards. The number of Montenegrin standards and related documents that are identical with European and international standards is 17,102 by the end of 2017." The WTO Secretariat reports page 78 para 3.76 "As of December 2017, about 7,000 (40.7% of all standards) Montenegrin standards (MESTs) were contained in technical regulations issued by the six competent ministries. At the same time, a total of 17,191 MESTs were adopted (6,970 in 2012) and 16999 were aligned to the EU or to international standards".

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The EU notes that the number of Montenegrin standards adopted by the end of 2017 varies depending on the source (WTO Secretariat, Montenegro and EU own sources. EU own sources consider that the total is 16118 aligned to EU/ international standards.)

EU Question N°21°: The EU would welcome clarification as to the number of standards adopted that are identical with EU and international standards. In addition the EU would welcome further information regarding the situation of the ATCG (Accreditation Body of Montenegro) resources to address the current lack of sufficient capacities.

Answer:

As stated in paragraph 3.76 from the WTO Secretariat Report as of December 2017, about 7,000 (40.7% of all standards) Montenegrin standards (MESTs) were contained in technical regulations issued by the six competent ministries. At the same time, a total of 17,191 MESTs were adopted (6,970 in 2012).

Clarification: There were only two national standards, and these were maintained due to the lack of equivalent international and/or European standards.

All other ISME standards are based on international or European standards; 16,999 MESTs are identical to European standards (CEN, CENELEC, ETSI (see below)) and the rest identical to international standards (192).

Out of 16,999 MESTs that are identical to European standards (ENs), the structure is: • 12,251 MESTs are identical to ENs published by CEN; • 4,455 MESTs are identical to ENs published by CENELEC; • 293 MESTs are identical to ENs published by ETSI.

Out of 16,999 MESTs that are identical to European standards, 7,355 ENs are identical to relevant international standards (4177 ENs identical to ISO and 3178 ENs identical to IEC standards).

Also, adopting of new, as well as re-examining and withdrawing previously adopted standards is a dynamic process, and the number, structure, etc., is constantly changing. This, among other things, depends on the activities of European and International standardization organizations whose work is continuously followed by ISME.

As for the ATCG (Accreditation Body of Montenegro) resources the ATCG has 7 permanent employees in total (including director) that are involved in accreditation process. All of them are with adequate qualifications, experience and competence. Accounting, legal services, IT equipment and web portal maintenance are outsourced. ATCG has also several bodies and committees (e.g. Management Board, Accreditation Committee, Appeals Committee) involved and contributing to its work.

Having in mind that there are 35 Conformity Assessment Bodies (CABs) accredited by ATCG, current number of permanent staff is sufficient for handling the type, range and volume of work performed. So far there have not been any delays in accreditation procedure. But in the case that number of accredited CABs increase in the future (as expected), ATCG will have to employee some additional staff on permanent basis.

ATCG has 8 Lead Assessors, 33 Technical Assessors and 35 Experts registered in the Pool of Assessors. Three assessors (lead assessors) are from internal staff, while others are externally engaged. Most of external assessors are registered assessors of national accreditation bodies from neighbouring countries. In order to maintain and raise the competence of existing assessors, and also to increase the number of assessors coming from Montenegro, ATCG has a permanent need for training. Training is also needed for ATCG permanent staff and for members of ATCG bodies. Presence of ATCG delegates to official EA and ILAC/IAF meetings is also very important.

ATCG needs to develop and establish a comprehensive IT system that will support its daily work and contribute to effectiveness of its operation. The assistance in development of such IT system will be sought through EU funded projects, and its final implementation is foreseen for 2020.

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Page 24. Para 3.75 on tourism. "Looking at the structure of revenues from services in the period 2010-2016, revenues from tourism were 67.3% out of total revenues and they represent the main generators of revenue growth from services. The following revenues in the transport sector with a share of 17.4%, followed by a significantly smaller share revenues amounted in the area of other services (7.2%) and revenues amounted in the construction services and other business services (by 3.6% and 4.5%). The significant investments, especially foreign direct investments in the area of tourism and infrastructure, have resulted in an increase in tourism revenues from €125 million in 2002, to €821.5 million, in 2016." and Page 159. Paragraph 4.178 of the WTO Secretariat report which mentions the preparation of a law on tourism and hospitality focussing on sustainable development, harmonization with environmental protection and its resources, and the reduction of the impact of climate change and adherence to the principle of a low-carbon economy. It incorporates penalties for advertisers who permit the advertising of service providers who do not have the requisite work permit. It will also transpose the provisions of the EC Directive on services in the internal market. […]"

EU Question N°22: When does Montenegro plan to adopt and put in force the new Law on Tourism and Hospitality?

Answer:

The new Law on Tourism and Hospitality was adopted on December 29, 2017 by the Parliament of Montenegro, and entered into force on January 18, 2018 ("Official Gazette of Montenegro" No.002/18, 013/18). In order to prepare the prerequisites for the successful implementation of the Law, very intensive activities on drafting a set of secondary legislation are underway, in accordance with the authorizations of the Law.

EU Question N°23 :The EU would like to get detailed information on the policies in preparation or adopted related to tourism- development of infrastructure, subsidies, licenses and the involvement of the state in this activity given the Secretariat report paragraphs 3.128 and 3.130 on this aspect as well as on linkages between agricultural development and tourism potential linkages.

Answer:

Depending on the area, each institution, through the work plan for the current year, but also through the long-term work plan, depending on the type of project and through the annual capital budget, defines its priorities. With regard to the tourism infrastructure, the capital budget for 2018 amounts to 13.980.000,00 EUR for the implementation of projects in all regions of Montenegro. Implementation activities are under the responsibility of the Ministry of Sustainable Development and Tourism, the Directorate of Public Works and other related institutions.

With reference to the tourism related incentives, we may speak about the competencies of some other institutions, apart from the Ministry of Sustainable Development and Tourism. For a few years, the Ministry of Sustainable Development and Tourism, in cooperation with the NTO of Montenegro, has been adopting the Program of Incentive Measures, in line with the authorization given by the Law on Tourism and Hospitality. The goal of the Program is to support projects and activities aimed at enriching and improving the quality of tourist offer in order to generate higher income in tourism, increase accommodation capacities occupancy rates, average consumption and employment.

Pursuant to the Decree on Direct Investment Incentives ("Official Gazette of Montenegro", No. 08/15, and No. 80/15), The Secretariat for Development Projects provides the support with the purpose to attract direct investments in the production sector or service sector, for investments in tangible and intangible assets of newly-established commercial entities, for expanding the capacity of existing commercial entities or for diversifying the production of a commercial entity to new products and production processes.

The Investment and Development Fund of Montenegro, on the other hand, has created a special tourism support programs for the construction of new and improvement of the existing hotel capacities, improvement of tourist infrastructure and self-catering vacation offers, as well as the support to hospitality. Within these lines, the fund approves loans under favourable conditions.

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With regard to licenses or work permits, pursuant to the provisions of the Law on Tourism and Hospitality ("Official Gazette of Montenegro" No.002/18, 013/18), approvals for work in tourism and hospitality activities are issued by the Ministry of Sustainable Development and Tourism and by competent local government authorities. Procedures for obtaining work approvals are prescribed by the referred law.

Concerning the activities referred to in paragraphs 3.128 and 3.130, we can confirm that the role of the state is that the Council for Privatisation and Capital Projects, as a body of the Government of Montenegro, proposes a Decision on the privatisation plan with the proposal of the company, the location for valorisation and the models of privatization and it submits the proposal to the Government for adoption. The privatization plan for 2018 was passed at the session of the Government of Montenegro held on 1 March 2018, envisaging the valorisation of 12 tourist sites, as well as the privatisation of a tourist company that is currently owned in majority by the state.

As far as the linkage between the agricultural development and tourism is concerned, we can say that Montenegro, among the branches of economy of the highest importance for economic growth, in addition to tourism, includes agriculture as well. Given that the gastronomy is inseparable from tourism, it is then obvious that the destination tends to include its agricultural products in its authentic tourist offer. Montenegrin hoteliers and other tourism service providers use the resources available in Montenegro, but we are of the opinion that this segment must be at an even higher level. A project with the aim to better integrate food producers with hospitality service providers and to advertise authentic gastronomic offer is being developed in cooperation with UN FAO and EBRD and the Ministry in charge of the area of agriculture, in order to use this segment for even better promotion of tourism product of Montenegro.

Page 31, para 3.10.6 on postal services. The Law on Postal Services (OG MNE No. 57/11 and 55/16) regulates the conditions and procedures for the provision of universal postal service and other postal services, as well as other issues of importance for the provision of postal services. In accordance with this law, a reserved postal service (a reserved postal service is part of universal postal service performed by a universal postal operator, limited by weight and price - 50 gr/mail) ceased to exist as of 1 January 2013. Regarding the improvements in postal sector in 2018, the Law will be amended, and it is also planned to prepare a new Strategy for the development of postal sector for the period 2019-2023. All Postal Operators delivered a total of 23,290,341 postal services in 2016, which is 6.6% more than in 2015.

EU Question N°24: Could Montenegro provide an update on more recent developments/intentions in the area of Postal Services?

Answer:

The Proposal of the Law amending the Law on Postal services is under preparation. The Proposal of the Law is expected to be sent to the Government for adoption by the end of June 2018. Changes will assure sustainability of universal services financing and alignment with EC DIRECTIVE 2002/20/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 7 March 2002 on the authorisation of electronic communications networks and services (Authorisation Directive).

The Strategy for the development of postal sector for the period 2019-2023 is planned to be adopted until the end of 2018.

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ICELAND

10. GENERAL / UNSPECIFIED / OTHER QUESTIONS

Question(s) Montenegro has played a central role in putting women’s economic empowerment at the heart of the trade agenda as a member of the Trade Impact Working Group, established under the auspices of the International Gender Champions-Geneva. On the occasion of the 11th WTO Ministerial Conference in Buenos Aires more than 120 WTO members and observers launched a joint declaration on women and economic empowerment that aims inter alia at sharing best practices and working together in the WTO to remove barriers for women’s economic empowerment and increase their participation in trade.

Could Montenegro share information on the participation of women in the Montenegrin economy? Have particular barriers that limit women’s participation in trade been identified? Has Montenegro implemented any particular measures to address such barriers or to encourage women’s participation in trade and promote women’s entrepreneurship, or are such measures being developed?

Answer by Montenegro In 2017, according to the latest data from the Tax Administration, the share of active business entities owned by women account for around 24% of the total number of entities, and women account 45,5% of total employment in Montenegro.

Regarding the barriers for business development, apart from traditional attitudes and stereotypes, the significant barrier is also the women ownership over estates. Women are the owners of only 4% of houses, 8% of land, and 14% of holiday homes (cottages) in Montenegro, which limits their ability to provide guarantees for loan repayment in the form of a mortgage.

In order to create a more favourable business environment for the development of women entrepreneurship and its promotion in public, in June 2015, Montenegro adopted the Women's Entrepreneurship Development Strategy for 2015-2020. Within the Strategy Action plan, measures have being implemented continuously for the promotion and improvement of women's entrepreneurship. In line with the objectives of the Strategy, the following effects have been achieved: progress has been made in creating a more favourable business environment, the financing of women businesses, the availability of knowledge and skills, and the promotion of successful women in the media.

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JAPAN

Questions based on the Secretariat Report (WT/TPR/S/369)

4. Trade Policies By Sector Telecoms (2.C) 4.117

Telecommunications market

1. How is the number of subscriptions of the fixed line market changing?

Answer: For the first time in last 4 years the number of subscriptions of the fixed line was increased for 2.8% in 2017 compared to previous year.

2. What is the penetration rate of IP phones?

Answer: All operators provide fixed telephony over IP platforms. Penetration rate (% of population) at the end of 2017 was 24.5%.

3. What is the percentage of metal line and optical fiber line?

Answer: Optical fiber lines - 25%, and copper twisted pairs and coaxial cables - 75%.

4. How is the number of mobile phone subscriptions changing?

Answer: Number of mobile phone subscriptions is stable over past few years, and is above 1,000,000. In 2017, we have increased number of subscribers by 0.38%.

5. What are the regulations on MVNOs? Also, how are they different from regulations on MNOs?

Answer: There is no specific regulation on MVNO. According to the Law on Electronic Communications, there is no different treatment of MVNOs and MNOs.

6. Could you explain of your regulations on SIM lock?

Answer: The operator may limit the terminal equipment to the operation within its own network only if the subscriber takes the equipment from the operator upon the conclusion of subscriber agreement for the minimum term.

In the event of expiry or early termination of subscriber agreement, at the request of the subscriber, the operator shall promptly and free of charge, enable further use of terminal equipment in other networks.

7. What is the share of mobile devices which are produced domestically? Do you have any local content requirement for producing mobile devices?

Answer: There is no mobile device production in Montenegro.

8. Do you have specific regulations for private network service?

Answer: No, we don't have.

4. Trade Policies By Sector Telecoms (2.C) 4.129

Operators with Significant Market Power, Major Supplier

1. Do you have regulations which focus on operators with Significant Market Power?

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Answer: Yes, the Law on Electronic Communications.

2. What are the criteria for the designation of operators with Significant Market Power?

Answer: The criteria for designing the SMP operator(s) are: - the market share of the operator in the relevant market and changes in the structure over a longer period of time; - barriers to entry into the relevant market and the impact of potential competition on that market; - the influence of large users on the operator's power (compensatory purchasing power); - absence of potential competition; - economies of scale and economies of scope; - technological advantage and superiority; - the level of development of the sales and distribution network; - degree of vertical integration; - degree of diversification of services; - privileged access to capital markets or financial resources; - limitation of capacity increase; - the connection of the services it provides.

3. What are the difference of laws and regulations between operators with Significant Market Power and the other telecommunications operators.

Answer: The Agency for electronic communications and postal services has the right to impose regulatory obligations to SMP operators. These regulatory obligations are: 1) Obligation to publish data (RIO – Reference interconnection offers) 2) Obligation to ensure non-discrimination 3) Separate accounting records 4) Access to and use of network elements 5) Price control and cost accounting 6) Regulation of retail prices.

4. Which companies are operators with Significant Market Power?

Answer: Market 1: Wholesale call termination on individual public telephone networks provided at a fixed location – SMP operators are: Crnogorski Telekom AD Podgorica, Telenor d.o.o. Podgorica, MTEL d.o.o. Podgorica, Telemach d.o.o. Podgorica

Market 2: Wholesale voice call termination on individual mobile networks – SMP operators are: Crnogorski Telekom AD Podgorica, Telenor d.o.o. Podgorica, MTEL d.o.o. Podgorica

Market 3: (a) Wholesale local access provided at a fixed location – SMP operator is Crnogorski Telekom AD Podgorica

Market 3: (b) Wholesale central access provided at a fixed location for mass-market products – SMP operator is Crnogorski Telekom AD Podgorica

Market 4: Wholesale high-quality access provided at a fixed location – SMP operator is Crnogorski Telekom AD Podgorica

5. Do you have a concept of "Major Supplier" based on WTO rules or FTAs? If yes, how do you regard major suppliers in your domestic laws and regulations? (e.g. Possession of essential facilities, presence of market power)

Answer: No. Term "Major Supplier" is not recognized /used in our legislation. We do consider this term (as explained in WTO rules) as equivalent with SMP operator.

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6. How many telecommunications operators do you have? What is the percentage of each service which your telecommunications operators provide?

Answer: Montenegro has had 35 registered operators at the end of 2017. 4 – Fixed operators 3 – Mobile operators 16 – ISP 5 – AVM (TV programs distribution) operators Other registered operators do not provide services to the end users.

4. Trade Policies By Sector 4.4 Services

ICT service

1. How large is the ICT sector in your whole domestic industry?

Answer: Share of ICT sector in GDP is approximately 4%.

2. What amount of R&D expense is spent for the ICT industry?

Answer: Currently we don't have any data on R&D expense is spent for the ICT industry.

3. Could you provide us transition of the number of public telephones?

Answer: In 2017 the number of public phones (which it provided VoIP services) was 76. In 2016 the number of public phones (which it provided VoIP services) was 79. In 2015 the number of public phones (which it provided VoIP services) was 78.

4. How has the cloud computing service developed so far? Do you have any regulations on this sector?

Answer: The cloud computing service has not been regulated so far. The relevant laws regulate that data and information systems have to be at the territory of Montenegro.

5. How has sharing of transmission towers by network operators developed? Does competition in the market of sharing service in transmission towers happen?

Answer: Sharing of transmission towers by network operators is very developed, and there is joint use of towers on 51% of total number of location.

6. How has "new services" such as OTT/VOD developed in your country? Do you have regulations on those services?

Answer: OTT/VOD is very popular. There is no specific regulation.

7. Do you have any consumer protection measures for users of the Internet services?

Answer: Yes, contracts concluded between operators and consumers contain consumer protection measures, as prescribed by the Law of the Electronic Communications (Official Gazette no 40/13; 056/13, 002/17), and in the General conditions for providing operator services. On the both of these (typical contract and General conditions for providing operator services) The Agency for Electronic Communications and Postal Services gives consent to the operators according to the mentioned Law.

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Also, the Agency adopted the Rulebook on the quality of public electronic communication services (Official Gazette no 002/18). The Rulebook prescribes parameters for quality of public electronic communication services, manner for their measurement and disclosure and deadlines for their submission

Moreover, the Agency has been publishing flyers on the web site www.ekip.me in order to inform consumers about their rights as much as possible. The flyers contain the information about the rights of users of electronic communications services, protection of children in using Internet, usage of smart phones, broadband internet access, measuring the quality of broadband Internet connection and calculator.

8. Do you have any disciplines regarding liability of the internet service providers?

Answer: Disciplines regarding liability are contained in Article 167 of the Law on electronic communications noting: ''(1) The operator shall determine the amount and manner of compensation payable to the subscriber if its services deviate from the terms stipulated in the Subscriber Agreement with regard to their quality and availability. (2) The subscriber shall be entitled to request from the operator the compensation of direct or indirect loss occurring as a consequence of poor service quality or restriction of access to the network or service. (3) The operator shall not be obliged to compensate the subscriber if a poor service quality or restricted access to network occurred due to the circumstances beyond the operator's control. ''

9. What is the scheme of dispute resolution between ICT service providers?

Answer: At the request of operators, the Agency can mediate in resolution of disputes between the operators. The Agency shall end the procedure for mediation within 90 days from the date of application for mediation. The decisions of the Agency shall be final, what means that only lawsuit can be lodged to the court.

4. Trade Policies By Sector Audiovisual (2.D) / Broadcasting and film production

Broadcasting

1. What type of domestic broadcasting exists? (e.g. terrestrial broadcast / multimedia broadcast / satellite broadcast / cable TV)

Answer: There are terrestrial (DVB-T2), cable, IPTV, satellite TV broadcasters.

2. How do you define "broadcasting" in your domestic laws and regulations?

Answer: Pursuant to the Point 3 of Article 8 of the Electronic Media Law, "electronic media (a linear audiovisual media service) means a radio or television broadcast which presents a set of information in the form of images and/or sound or combination thereof (audiovisual content) constituting an individual item, under the same name, intended to inform and meet the cultural, educational, social and other needs of the public, which enables simultaneous listening to and/or viewing of programmes on the basis of a programme schedule". Furthermore, according to the Point 4 of the same Article, "the broadcaster means an AVM service provider registered for radio and television broadcasting who, in terms with this Law, was granted a licence for television and/or radio broadcasts".

3. What type of broadcasting is most frequently viewed or listened?

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Answer: There are no official surveys offering reliable data about content preferences. However it is estimated that entertainment (TV series, talent shows, reality programs) and sport programs attract significant audience.

As for platform preferences, according to the Agency for Electronic Report (No. 02-186 from 6 February 2018), at the end of 2017, approximately 11% of Montenegrin households used only free-to-air (DVB-T2) reception of radio and TV programmes. On the other hand, the remaining 89% of households opted for one of the conditional access platforms for distribution of radio and TV programmes.

In terms of the share of conditional access platforms, the cable platform is in the leading position in the market of distribution of radio and TV programmes to the end users, with the market share of 37,81%. It is followed by DTH with 30,24%, IPTV with 28,04% and DVBT2 with 3,91%.

4. Does pay-broadcasting exist? If they exist, what kind of content are broadcasted?

Answer: There are cable/IPTV/DTH/DVB-T2 operators who offer conditional access services including packages of domestic and foreign TV programs. These services are available as pay-TV services.

Apart from generalist TV channels, they offer a similar structure of specialist programs including sports, children, entertainment, movie/TV series, music, travel and leisure channels.

Only one of these operators offer „video on demand" service.

5. Do state-owned broadcasting / public broadcasting enterprises exist? If so, how is the government involved with those broadcasters?

Answer: Yes, there are public broadcasting enterprises. Please see Point 4.134 of the Report by the Secretariat. The establishment and operation of public service broadcasters on local, regional and national levels are regulated by the Electronic Media Law.

The Law on National Public Broadcaster Radio and Television regulates the work of the national public service broadcaster, Radio Television of Montenegro (RTCG), in terms of programme content, as well as management methods. It defines the RTCG's activities, responsibilities and accountability, funding, management bodies, as well as the RTCG statute.

According to the Law, the Government's involvement is limited to ensuring the that the public broadcasters' funding is ensured in a timely and stable manner in line with the agreement regulating mutual rights and obligations as regards the use of funds from the Budget of Montenegro dedicated to RTCG.

6. Do you have any regulations on foreign video-casting service? (e.g. Hulu and Netflix)

Answer: No.

7. Do you have any reservations for broadcasting service in your FTAs? If yes, what kind of reservations do you have?

Answer: No, there are no reservations for these services.

4. Trade Policies By Sector Telecoms (2.C)

Market Entry

1. When new competitors enter the telecommunications market, based on what laws and regulations, what kind of requirements exist?

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Answer: Requirements for new competitors entering the telecommunications market are provided for in the Law on Electronic Communications.

Any legal or natural person, prior to the inception of use, and/or the operator, prior to the termination or change in the regime of use of public communications networks or prior to the provision of publicly available electronic communications services, has to submit a written application to the Agency on Electronic Communications and Postal Services.

2) for legal entity – name of company, seat, statistical and registration number, account number and name and surname of the representative;

3) brief description of public electronic communications networks and/or publicly available electronic communications services, which shows network and/or service characteristics;

4) anticipated date of inception, change or termination of regime of usage of public electronic communications networks or provision of publicly available communications services. Of course, the provisions of the general Company Law are applicable as well.

What are the types of entry procedures for telecommunications operators? Also, what is the difference between each type?

Answer: Following the submission of application mentioned in the previous question the Agency within seven days from the date of receipt of a duly submitted application referred to in Article 46 paragraph 1 of this Law, has to register the operator in the Registry of Operators or make the change or deletion from the Registry and issue the confirmation of such registration, change or deletion from the Registry.

If the application does not include the data mentioned above (previous question) the Agency shall inform the applicant, within seven days from the date of application receipt, to supplement the application within the period which may not be shorter than seven days.

2. What sort of classification for telecommunications operators do you have? (e.g. possession of facilities, types of services) Answer: Telecommunications operators are classified according to services they provide. According to the Law on Classification of Activities, telecommunications are divided into cable, wireless, satellite and other telecommunication activities.

3. Do you have any restrictions on foreign direct investment on telecommunications market?

Answer: No.

4. Are there requirements for foreign investors such as preliminary examination?

Answer: No.

5. Do you have restrictions on the participation of foreigners in management?

Answer: No.

6. Is there a restriction on share ownership by foreign governments?

Answer: No.

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4. Trade Policies By Sector Telecoms (2.C) 4.123

Radio frequency, universal service, international roaming, number portability, submarine cable

1. How is radio frequency allocation done? (Comparative examination method / auction / others)

Answer: According to the Law on Electronic Communications: • Natural and legal persons may use radio frequencies based on the approval for use of radio frequencies issued by the Agency for Electronic Communications and Postal Services. • The state administration body in charge of defence activities may use radio- frequencies which are allocated for military use under the Radio-Frequency Spectrum Allocation Plan, without the approval for the use thereof. • Some radio-frequencies which may be used without the approval, and the terms of their use, as well as radio-frequencies the use of which is mandatory to be reported to the Agency, are defined by the regulation of the Ministry. • The approval for the use of radio-frequencies shall be issued by the Agency based on the application for the approval of use thereof. • The approval for the use of radio-frequencies from the bands which are assigned on the territory of Montenegro on an exclusive basis shall be issued based on the procedure of public tendering (sealed bid tender or auction) if under the appropriate radio-frequency assignment plan for the use of public electronic communications network and/or in accordance with Article 105 of this Law it is established that the expressed interest surpasses the availability of radio- frequency resource.

2. Regarding radio frequency allocation, what restrictions are imposed on foreign business operators?

Answer: There are no specific restrictions for using radio-frequencies by foreign operators. The procedure and preconditions are explained in the previous answer.

3. How do you allocate a mobile phone number? Do you face shortage of mobile phone number?

Answer: Mobile phone numbers are allocated to mobile operator on request. We do not face shortage of mobile phone numbers.

4. Do you have a toll-free number? If yes, could you explain how does the telecom regulator deal with it?

Answer: Yes, we have toll-free numbers. Agency on Electronic Communications and Postal Services assigns toll-free numbers to the operators which implement the number and to the company which uses the number pay for phone calls.

5. Do you have any universal service system in your telecommunications laws and regulations? If yes, what services are included in the universal service?

Answer: We have universal service in our low and regulation. The services of the Universal Service include: 1) meeting any reasonable user's request for the access to public electronic communications network and publicly available electronic communications services on a fixed location, which enables the use of voice communication and data transfer rate which enables functional Internet access;

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2) providing the service of universal telephone directory (hereinafter: "Universal Directory") and universal enquiry service for subscriber numbers (hereinafter: „Universal Enquiry Service"); 3) special measures and benefits for the persons with reduced mobility and persons with disabilities, including the access to emergency services, enquiry service for subscriber numbers and directory of subscribers, which enables them to have the same possibilities of access to the publicly available telephone services as the other end users as well as the appropriate selection of operators available to the majority of end users.

6. How do you finance providing universal service?

Answer: Compensation for net costs of the Universal Service is provided from contributions paid by operators whose share in the total annual revenue in the area of electronic communications exceeds 2%.

For an individual operator, the amount of contribution and method of payment is determined by the Agency in proportion to the share of its revenue generated from the provision of public electronic communications services and/or giving for use the electronic communications network, electronic communications infrastructure and associated facilities in the total annual revenue generated in the electronic communications sector.

7. What international agreements regarding international roaming do you have?

Answer: Agreement on reducing prices of roaming services on public mobile communications networks is signed among Ministries responsible for the area of electronic communications from Bosnia And Herzegovina, Republic Of Macedonia, Montenegro and Republic of Serbia.

Agreement established the glide path of lowering roaming costs in region in accordance with EU Regulation (EU) No 531/2012 of the European Parliament and of the Council of 13 June 2012 on roaming on public mobile communications networks.

8. Is number portability between fixed and mobile phones possible?

Answer: No.

9. Is number portability possible between major operators and other operators?

Answer: Yes.

10. Do you have any regulations on submarine cables?

Answer: No.

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MEXICO

1. ECONOMIC ENVIROMENT 1.2 Recent Economic Developments 1.12

Question(s) Respecto a la esfera del entorno empresarial y la reducción de la economía informal, ¿se tienen contempladas medidas que contribuyan a la internacionalización de las pymes?

Answer by Montenegro The Government of Montenegro is focused on improvement of the business environment where the development of small and medium-sized enterprises is one of the priority reform measures. Several measures and activities have been conducted in order to contribute to SMEs internationalization, such as improving the organizational concept of clusters and strengthening the connection between enterprises through financial support for the implementation of a program encouraging the development of clusters and grants for capacity building for cluster management and the promotion of the development of new clusters. Additionally to the business entities it is available grant financial support for improvement the implementation of international business requirement standards of doing business.

Also, in the area of support for the internationalization of enterprises and their business in foreign markets, through the activities of the Enterprise Europe Network with national financial support within COSME program it is enabled strengthening the export performance of enterprises and their greater inclusion within the region and the EU. Montenegro is part of COSME Enterprise Europe Network-EEN, supporting SMEs to internationalization and better use the opportunities offered by the single EU market. It is enabling SMEs to obtain the required information and services of importance for the development of their operations on the EU market, for finding business partners, for innovations, technology transfer and participation in EU programmes. More specifically, internationalization of SMEs is supported through providing advisory services on the international markets, organization of business meetings, organization of training for the improvement of the export performance of enterprises with the aim of enhancing the competitiveness and participation of SMEs in international value chains, etc.

1. ECONOMIC ENVIROMENT 1.2 Recent Economic Developments 1.12

Question(s) El Párrafo 1.12 señala que para la facilitación del comercio exterior y las inversiones, se contempla por ejemplo el desarrollo de zonas empresariales. Que otras medidas, en particular para la facilitación del comercio están considerando.

Answer by Montenegro When it comes to trade facilitation measures the Government adopted the Trade Facilitation Strategy on the session held on 29 March 2018. The Strategy represents a joint five-year reform plan for all competent authorities in the area of trade facilitation and answers to a number of obligations arising from the EU accession, WTO Trade Facilitation Agreement and regional CEFTA Additional Protocol 5.

Investment facilitation measures are explained in details in the relevant parts of the Report by Montenegro (points 2.6 and 2.6.1) and the Report by the Secretariat (points 2.4 and 3.3.1).

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2. TRADE AND INVESTMENT REGIME 2.3 Trade Agreements and Arrangements 2.3.1 WTO 2.21

Question(s) ¿Cuál es el estado de las notificaciones pendientes y las acciones que se tienen previstas para ponerse al día?

Answer by Montenegro Pending notifications are under preparation and will be submitted as soon as possible.

2. TRADE AND INVESTMENT REGIME 2.4 Investment Regime 2.52

Question(s) ¿Cuales son las principales acciones que se incluyen en la Estrategia de Desarrollo de la Sociedad de la Información 2020 y cuales son sus avances a dos años de su implementación?

Answer by Montenegro The main activities included in the Strategy are: Information security, e-Government, e-Business, e-Education, e-Health, e-Inclusion etc. The Action plans for implementation have been adopted and the line ministries conduct continuous monitoring of the implementation of all measures and degree of achievement of the defined objectives. The results indicate the commitment of all actors and overall percentage of implementation of the information society services planned activities is 47 %, and 38 % are continuous activities. The Strategy is focused on the further improvement of legal framework, strengthening of administrative capacities as well as on more intensive cooperation between the relevant institutions.

4. TRADE POLICIES BY SECTOR 4.1 Agriculture, Forestry, and Fisheries

Question(s) Esta pregunta se refiera al Informe de Montenegro (WT/TPR/G/369). 3 POLÍTICA COMERCIAL; 3.6 Agricultura, pesca y silvicultura; 3.6.2 Pesca:

¿Cómo define Montenegro en su marco jurídico la pesca ilegal, no declarada y no reglamentada?

Answer by Montenegro According to the Law on marine fisheries and mariculture (OG of Montenegro, No. 56/09, 47/15) measures of protection of biodiversity and environmental conditions strictly prohibit fishing, collection and marketing of protected species of fish and other marine organisms, sea turtles and sea lions, as well as shark finning and selling shark fins.

Through the Order on closed season for all age classes of fish and other marine organisms (OG of Montenegro, No. 26/15) it is forbidden to catch certain species of corrals, cartilaginous and bony fishes, sea turtles, birds and sea mammals, and in case of accidental catch of these species, they have to be released to sea, alive and unharmed.

Order on prohibition of fishing and trading juveniles, undersized fish and other marine organisms (OG of Montenegro, No. 65/15) defines minimal lengths for fish species and other marine organisms, closed season for anchovy and limit for use of fishing gears for pelagic fish.

Also, FAO Agreement on Port State Measures to prevent, deter and eliminate illegal, unreported and unregulated fishing (PSMA) has been ratified by Montenegrin Government in 2017. This Agreement seeks to prevent, deter and eliminate IUU fishing through the adoption and implementation of effective port State measures as a means of ensuring the long-term conservation and sustainable use of living marine resources. Its intention is to be applied widely by Parties for vessels not entitled to fly their flags, and it encompasses vessels who are trying to enter to their ports, as well as those already present in the port.

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As the first step towards the effective fight against IUU fishing and a precondition for ratification of PSMA, Rulebook on the manner and conditions for issuing the catch certificate of fish and other marine organisms has been adopted in 2016, as the bylaw of the abovementioned Law. It defines total weight of fish per species which was caught by a certain fishing vessel, as well as the information of fish export, based on the invoice.

All these documents in national legislation represent complete harmonization with EU regulations and recommendations of General Fisheries Commission for the Mediterranean (GFCM).

4. TRADE POLICIES BY SECTOR Tourism (9) 4.171

Question(s) ¿Cuál es la estrategia de Montenegro encaminada a diversificar los productos turísticos?

Answer by Montenegro The Strategy for the Development of Tourism in Montenegro until 2020 is the key strategic document of Montenegrin tourism, which was adopted in 2008. The strategic goal of Montenegrin tourism is: "By applying the principles and goals of sustainable development, Montenegro will create a strong position of a global high-quality tourist destination; tourism will provide sufficient number of jobs and the growth of the standard of living for the population of Montenegro, and the state will achieve income in a stable and reliable way."

One of the key principles underlying this document is the need to diversify the tourist offer in the context of the valorisation of the comparative advantages that Montenegro owns and thus the development of specific forms of tourism. The need for diversification in order to balance the economic development between the northern and southern regions of Montenegro, and the transformation of Montenegro in the all-year tourist destination from the now predominantly seasonal destination is particularly expressed.

Activities on the development of a strategy of cultural tourism have been launched, and by the end of 2018, the development of nautical, rural and health tourism strategies is envisaged.

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MOLDOVA, REPUBLIC OF

(WT/TPR/S/369 from 7 March 2018)

Para 6. (p 8) with reference to "... While Montenegro has submitted notifications to the WTO in most areas, some remain outstanding; the pending notifications (e.g. on import licensing, SPS, TBT, and production support) are expected to be addressed in the course of 2018..."

And Para 11. (p 8) "...Import licensing requirements, which cover approximately 356 ten-digit HS tariff items or 3.6% of all tariff lines (240 in 2011 or 2.6% of all tariff lines (HS07)), are maintained for various reasons including protection of national security, human, animal or plant life or health, and to meet international commitments. The fees for import licences for medicines and medical devices are based on the total import value and those relating to the import/export/transit of drugs and psychotropic substances amount to 1% of the total import/export/transit value, in line with the international conventions..."

Question 1: Republic of Moldova encourages Montenegro to present its pending notifications in the nearest time, specially Moldova would like to be informed when Montenegro will submit its notifications on import licensing procedures, namely import licensing procedures or changes in these procedures under Article 5, 5.1, 5.2, annual questionnaire under Article 7.3, and notifications of publications containing relevant information under Articles 1.4a and 8.2b of the Agreement on Import Licensing Procedures

Answer: Pending notifications, including the notifications on import licensing procedures, are under preparation and will be submitted as soon as possible.

Para 10. (p 8) with regards to "...During the review period, trade facilitation developments included the ratification of the WTO Trade Facilitation Agreement (TFA) in 2016, steps to implement an authorized economic operator scheme, the establishment of a National Trade Facilitation Committee to address bottlenecks in this area, and participation in trade facilitating initiatives at the CEFTA level. Regarding customs valuation, the transaction value was the most used method and no reference or minimum prices or fixed valuation schedules were used..."

Question 2: Since Montenegro (MNE) established the National Committee (Committee) for Trade Facilitation already in May 2015, and the first National Strategy for Trade Facilitation (Strategy) is currently under preparation, Moldova would like to better understand functioning and results of the Committee so far, as well as objectives and scope of the up-coming Strategy.

Answer: The National trade Facilitation Committee was established as a permanent multi-agency body composed of representatives of all relevant state bodies and the private sector, with the task to monitor trade facilitation reform process in Montenegro.

In addition to this, the Committee is ensuring coordination and cooperation between abovementioned stakeholders; tracking implementation of the TFA and other TF related agreements; giving recommendations for development or amendment of strategic and legal documents; making contacts and ensuring cooperation with international donors for the technical support; improving and strengthening partnership and trust between public and private sector; and increasing transparency in the process of trade facilitation reform.

The NTFC oversees all on-going projects in the area of trade facilitation, and regularly (once a year) reports to the Government about the progress. The project and the results are elaborated in the National report, pages 22-23 (par. 3.60-65).

Moreover, under the NTFC's supervision, the first Trade Facilitation Strategy was drafted. (adopted by the Government on the session held on 29 March 2018). The Strategy represents a joint five-year reform plan for all competent authorities in the area of trade facilitation. The Strategy is also an answer to a number of obligations arising from the EU accession, WTO Trade Facilitation Agreement and regional CEFTA Additional Protocol 5.

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• In the same context, Moldova would like to hear when the ratification of the CEFTA Additional Protocol 5 by MNE can be expected.

Answer: The Parliament of Montenegro adopted the CEFTA Additional Protocol 5 in December 2017. The Law confirming the AP 5 is published in the Official Gazette of Montenegro – International Agreements No. 1/ 2018.

Moldova noticed that MNE involves important foreign assistance projects in the implementation of trade facilitation (TF). Moldova, recently embarked in an ambitious TF action plan, would appreciate MNE sharing experience on respective initiatives.

Para 2.15. (p 33) "...Another avenue for stakeholders' input into economic policymaking is the Competitiveness Council created in June 2017 (which replaces the Council for the Improvement of Business Environment, Regulatory and Structural Reforms). The Council is chaired by the Prime Minister and its members include ministers responsible for the business environment as well as representatives from business associations, employer associations, the American Chamber of Commerce, the Foreign Investors Council and the academic community..."

Question 3: Montenegro adopted the Industrial Policy and established the Competitiveness Council. Moldova would like to better understand expected impact of both on international competitiveness of MNE economy.

Answer: Industrial policy of Montenegro as comprehensive strategic document for development of industry and economy is focused on raising efficiency and productivity, more efficient sustainable use of the available natural resources, moving towards higher value-added production processes and identification of sectoral priorities with potential for growth, as well as on needs of enterprises that will have the greatest impact on international competitiveness of Montenegro's economy.

Achievement of main strategic objectives set out by the industrial policy and successful implementation of the policy implies growth of the following economic indicators:

• increase in the share of industry in GDP, • increase in the number of employees in the industrial sector, • increase in the share of industry in total exports, • better ranking in the WEF (World Economic Forum) Global Competitiveness Report, • better ranking in the World Bank Doing Business Report, • better ranking in the Global Entrepreneurship & Development Index.

By continual activities on implementation of Industrial policy, based on realization of annual action plans, various institutions from public and private sector involved in the process of policy implementation are implementing different programmes focused on realization set-up policy indicators towards enhancement of industrial base as important element of competitiveness of Montenegrin economy.

Seeking to boost investment competitiveness, the Government of Montenegro has placed strong emphasis on improving the efficiency of the state administration, cutting the costs of administrative procedures and shortening their duration. Therefore, these aspects of creating a favourable climate were at the centre of the measures which were implemented to enhance the business environment. In that regard, at its session held on 1 June 2017, the Government of

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Montenegro passed the Decision on setting up the Competitiveness Council tasked with coordinating activities related to implementation of the priority reform measures set out in strategic documents, which aim to eliminate key obstacles to Montenegro's greater competitiveness and faster economic growth. Therefore, the role of the Council is to:

• coordinate activities in the plan for the implementation of the priority reform measures defined in strategic development documents, which have the aim to remove the key obstacles for a greater competitiveness and faster economic growth of Montenegro;

• analyse the relevant regulations from the aspect of their influence on the business environment and competitiveness;

• initiate proposals concerning amendments to regulations in order to simplify or delete procedures that represent a barrier to greater competitiveness or the termination of their validity;

• propose to the Government of Montenegro a plan for structural reforms to improve the competitiveness of the economy. It is prepared on annual basis, which is also an integral part of the Economic Reform Program and other key economic policy documents;

• monitor, coordinate and evaluate the key activities of public administration bodies and other competent authorities and institutions for further implementation of structural reforms, prepare the semi-annual reports on the implementation of structural reforms which along with the opinion, namely with the proposal measures, are submitted to the Government for consideration;

• participate in the process of drafting action plan to combat the grey economy, employment plan, as well as in all development plans relevant to increasing competitiveness and strengthening macroeconomic stability and monitoring their implementation;

• publicly promote the importance of raising the competitiveness of the Montenegrin economy, for its overall economic development and improvement of the quality of life of citizens.

Question 4: Foreign Direct Investment (FDI) being in the centre of the MNE economic development agenda, what is MNE opinion on potential "race to the bottom" with the competing economies?

Answer:

Aligning investment policies with the EU standard holds significant potential for the economies of the WB6 in boosting economic growth. Transparent and fair competition among the economies will not hinder the interests of WB6 economies. The ultimate goal is to improve the attractiveness of the region for foreign and intra-regional business, and hence facilitate higher inflow of investments and generate higher entrepreneurial activity, trade and ultimately jobs.

Para 2.3.2.1 (p 37) Regional trade agreements (RTAs) 2.22. As at end-November 2017, Montenegro had five RTAs in force with a total of 41 economies (Section 3.1.2 and Section 3.1.3.6). All RTAs have been notified to the WTO Committee on Regional Trade Agreements, with the exception of the RTA with the Russian Federation which dates back to 2000. The scope and depth of each of the agreements differs.

Question 5: Addressing the issue of further liberalization of trade with Russia and EEU, e.g.: Moldova would like to understand whether negotiations with the Russian Federation, Kazakhstan and Belarus which have stalled are to re-opened in the foreseeable future? What is the current state of play?

Answer:

The subject of the negotiations with the Russian Federation was not the Free Trade Agreement, but only the Protocol with accompanying annexes. Technical part of negotiations with the Russian

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Federation was concluded in 2012. Negotiations with Belarus and Kazakhstan were directly linked to negotiations with the Russian Federation and they were conducted in context of EEU. As regards further steps, Montenegro is waiting for the reaction from the Russian Federation.

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SAUDI ARABIA, KINGDOM OF

Questions Regarding the Government Report WT/TPR/G/369

3. Trade Policies 3.10 Trade in Services 3.10.3 Banking Sector

In Para 3.99 Page 28:

Such developments were mainly due to the following two factors: the implementation of the EU regulation by the foreign parent banks of the Montenegrin subsidiaries, some of which accounted for the main share in NPLs in Montenegro, and the implementation of the three-year strategies and annual action plans for NPL reduction starting as of 2014.

Question: Could you please elaborate more on the three-year strategies and annual action plans for NPL that helped to reduce it?

Answer:

A comprehensive strategy for dealing with NPLs in Montenegro is implemented within the project "The Podgorica Approach". This strategy is based on two regulatory documents – the Law on the Voluntary Financial Restructuring of Debts to Financial Institutions (adopted in 2015 as one of the results of the Project conducted together with the WB FinSAC, and amended in 2017) and the Decision on the amendments to the Decision on the minimum standards for managing credit risks in the banks (adopted in 2013, with an implementation period from January 2014).

First significant results in NPL reduction have been the result of the efforts of the Central Bank of Montenegro (CBCG) to raise the awareness of the need to solve the NPL problem together with other measures implemented. Those measures were aimed at achieving the control over and decrease in the aggregate level of NPLs, and as a result the CBCG adopted amendments to the Decision on minimum standards for credit risk management in banks ("Official Gazette of Montenegro" No. 57/13) committing the banks to apply a special treatment to NPLs.

This includes the obligation to develop comprehensive three-year strategies for handling NPLs and define annual operational objectives for the reduction of the NPL level, as well as quarterly reporting to the Central Bank on the implementation of those objectives. In case of significant differences between the actually implemented activities and defined operational objectives, the Central Bank requires banks to take additional organizational or other measures, which are required for the purpose of improving credit risk management.

Apart from the other factors that contributed to the decrease in NPLs, strict application of this decision and the Central Bank's permanent supervision over the implementation of the banks' defined strategies resulted in a substantial decline in NPLs compared to the period prior to the beginning of implementation of the decision.

Questions Regarding the Secretariat Report WT/TPR/S/369

Section 1.2.1

In Section 1.2.1, you mentioned that during the review period, Montenegro's annual GDP growth ranged from -2.7% (2012) to 3.5% (in 2013), its annual average growth rate for the period 2012-16 stood at 1.8%, a slowdown compared to the average of 3.4% over the 2001-11 period.

Question: How is the Government planning to prevent such a large fluctuation in the GDP growth that may occur in future? As mentioned, a big part of this fluctuation is from the external shocks. In this matter, is there any plan to entice more foreign direct investment? If yes, in which sectors and why?

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Answer:

The fall in economic activity in 2009 is a consequence of the global financial crisis and the decline in economic activity in a significant number of countries. Montenegro, as a small and undiversified economy, could not avoid the overflow of these movements.

In 2012, the fall was a consequence of the crisis in the Eurozone and the overflow of effects on Montenegro. Since the EU is the biggest trading partner of the countries of the region, which are also the most important trading partners of Montenegro, we have been inevitably affected by these events.

Montenegro is constantly improving the business environment in order to maintain and increase foreign investments. The ongoing investment cycle has been strongly influencing the economic trends in Montenegro. Major investments relate to investments in infrastructure (highway), tourism, energy and agriculture. In 2017 FDI amounted to 11.2% of GDP. Further activities will focus on creating more favorable business environment through elimination of business barriers and attracting foreign investments.

Section 1.2.3.2

In Section 1.2.3.2, it is mentioned that during the review period, Montenegro ran persistant annual fiscal deficits forcing a policy shift in 2017. Following a steady decline to 0.7% of GDP in 2014, subsequent fiscal loosening lead to Montenegro's fiscal deficit progressively rising to reach 6% of GDP in 2016.

Question 2: How are you planning to balance between fiscal policy tightening, economic growth target and the government debt?

Answer:

One of the priorities of the Government of Montenegro is to establish sustainability of the public finances, precisely to reduce deficit and to set the public debt on a downward trend over the medium term. In order to stop adverse fiscal risks, which were a feature of the previous period, and to make public finances sustainable, two packages of fiscal consolidation measures have been adopted. The Budget Deficit and Public Debt Recovery Plan 2017–2021, which was adopted along with the 2017 Budget, defines the measures for the revenue and expenditure sides of the budget, amounting to a total value of 126.9 million euro, or 3.2% of GDP. In order for the consolidation measures to be significant and achievable in a short period, an additional package of measures was designed, which was further worked out in the Fiscal Strategy 2017–2020 adopted by the Parliament of Montenegro in July 2017. The measures envisaged in the Fiscal Strategy ensure additional fiscal adjustment of an amount of 117.0 million euro or 2.8 percent of GDP.

Measures on the revenue and expenditure side of the budget are directly affecting the public finances consolidation. When measures were designed, a balanced distribution of tax burden was considered, as well as fairer distribution of social welfare benefits and protection of the most vulnerable layers of the society. At the same time, the need for Montenegro to remain competitive destination for foreign investments, in terms of level of tax burden, was also taken into account. In 2017 public finance deficit were in line with Fiscal Strategy 2017-2020 and in 2018 public finance deficit will decrease, with a balance in 2019 and over 4% of GDP surplus in 2020. Also, in 2020 public debt will be below 60%. At the same time, according to preliminary data real GDP growth in 2017 were 4,4%, and in period 2018-2020 we expect average real growth rate around 2,8%.

Section 1.27

You mentioned in Section 1.27 that during the period, Montenegro remained a major importer of capital. Inward FDI is not only an additional source of capital, but is also brings with it entrepreneurship, management skills, and especially new technology, which contribute to improved total factor productivity.

Question 3: Is there any monitoring mechanism for impacts of FDIs on different sectors of economy and the local content and knowhow? If yes, can you provide us a short description for it?

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In the same section with regard to the source of inward FDI, you mentioned that Norway was the biggest investor, accounting for 27% of total approved FDI in 2016, followed by the Russian Federation (7.7%), and Italy (7.4%).

Is there any specific agreement or privilege for Norway to invest in Montenegro?

How much of FDI is in tourism?

Answer:

The Central Bank of Montenegro, authority responsible for FDI statistics, produces data only in respect to countries (not in respect to sectors).

There is no specific agreement or privilege for Norway to invest in Montenegro.

Section 3.1.3.4

In Section 3.1.3.4, the report mentioned that the value of contracts awarded to foreign suppliers covering procurement has increased significantly from €14 million in 2013 to above €60 million or around 14% of the total contracted value in 2016 (equivalent to roughly 6% of the total number of contracts).

Question: How does the increase in contracts for foreign suppliers affect local suppliers and efficiency of procurement system?

What are the Government doing to attract foreign suppliers?

Answer:

The presence of foreign bidders contributes to strengthening of market competition as well as to the professional and technical development of local bidders, which eventually contributes to the development and efficiency, i.e. the quality of the public procurement system.

By further harmonization of the Public Procurement Law with the EU directives, the state additionally promotes transparency and openness of public procurement procedures, thus allowing foreign bidders access to participation in public procurement procedures.

Section 4.171

In Section 4.1.7.1, the report mentioned that tourism remains one of Montenegro's main economic activities and sources of government revenue, as well as serving as a stimulus to other sectors, such as agriculture, fisheries and construction.

Question: Are there privileges for foreign investors that government has in this sector? If yes, what criteria you apply for these privileges? Do FDIs in these industries get any different treatment?

Answer:

Tourism is one of the priorities of the Montenegrin economy, especially taking into account the comparative advantages for the development of tourism and the present benefits of tourism and related activities for the Montenegrin economy.

According to the Tourism Development Strategy until 2020, the list of priorities in tourism includes the need for the expansion of hotel capacities in the context of increasing the quality of existing hotels, and the construction of new four-and five-star category hotels, as well as the diversification of the tourism product through the creation of an additional offer.

Our strategic goal is to attract renowned investors and leading hotel operators that will guarantee the development of a high-quality product. Therefore, the Government of Montenegro supports investments in tourism, regardless of being domestic or foreign investors. They are ensured an

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As the new Law on Tourism and Catering provides for the introduction of a tourism development zone and the definition of additional incentives therein, the emphasis will be placed on creating the conditions for new investments and investors that are essential to Montenegro for its further growth in the tourism sector, again regardless of whether domestic or foreign investors are involved.

Section 4.8

In section 4.8, Montenegro's energy production comes from hydro-electricity, coal and fuelwoods. To meet domestic demand, it imports around 10%-15% of its energy needs. All petroleum is currently imported; all but one of the oil and gas companies operating in Montenegro are privately owned. Offshore exploration for hydrocarbons is in a research phase. The electricity market was unbundled and fully opened to competition in 2015.

Question: Can you provide us with nature of ongoing energy projects and how are you planning to finance them? How much FDIs in this industry?

Answer:

Hereby, you can find the procedures for projects in the field of renewable energy sources

Solar Power Plants: The construction of solar power plants is possible based on the energy permit. The energy permit is issued for the construction of solar power plants with an installed capacity of up to 1 MW, located on the surfaces of residential, commercial and / or infrastructure facilities. The issuance of energy permits is done on the basis of the annual plan adopted by the Government of Montenegro. In addition, the construction of solar power plants is possible on the basis of a contract concluded on the basis of the conducted tender procedure.

Photovoltaic technology is used today in Montenegro primarily for production of electrical power in areas in which there is no need for developed electric power system. Furthermore, nowadays there are more and more users of electric power system who exchange power with electric power system, where the photovoltaic panels represent prevailing technology for production of electric power. It can be expected that there will be solar power plants on roofs and constructions soon, because a favourable environment for investments is created based on redemption price of electric power produced by those plants.

There is also a growing interest for construction of solar power plants on the ground, and if investors appear, who are interested to invest in unallocated land in accordance with sustainable economic and energetic development of Montenegro, a public auction may be organized for selection of investor who would rent state property under the condition to construct solar power plant.

Wind Power Plants: On the basis of the conducted tender procedure, two projects for the construction of wind farms are currently being implemented. Pursuant to the Law on State Property, land tenure agreements have been concluded, and the investor is obliged to pay rent for the land that is in state ownership.

The construction of two wind power plants was planned with installed power of 46 MW and 72 MW and annual production of around 260 GWh. Wind power plants are located at Možura and Krnovo. Total investments for realization of these projects are around 229 million €.

Incentive rates for electricity produced by wind power is calculated according to the tariff system, amounting to 9.60 c€/kWh.

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WF Krnovo

Montenegro concluded the Lease of a Ground and Construction of the Wind Farm at the site Krnovo (hereinafter referred to as Lease) with the consortium "MHI-IVICOM Consulting GmbH" whose members are "Mitsubishi Heavy Industries" from Japan and "Ivicom Consulting" GmbH from Austria on 5th August 2010. Originally, the construction of wind farm with installed capacity up to 50 MW was planned, but bearing in mind that the Lease gave the opportunity to increase the installed capacity for 22 MW, the consortium "MHI-IVICOM Consulting GmbH", after additional analysis, got the consent for the connection of wind farm Krnovo (hereinafter referred to as WF Krnovo) of the total installed capacity of 72 MW. The said Lease states that land is leased for a period of 20 years, extendable to a maximum of 5 years.

According to Annex 1 of the Lease of a Ground and Construction of the Wind Farm at the site Krnovo, which was signed by the parties on 26th October 2012, the date of the adoption of spatial planning documentation includes the date of the issue of innovated urban-technical conditions. Innovated urban-technical conditions for building WF Krnovo were issued on 10 May 2013. Annex 1 the Lease of a Ground and Construction of the Wind Farm change member of the Consortium, so instead of "MHI", the consortium was joined by "Akuo Energy SAS" from France.

The investor prepared project documentation required for issuance of a building permit and got the permit on 7 May 2014.

For the purpose of resolving property relations conducted the procedure of expropriation in the territory of municipalities of Nikšić, Šavnik and Plužine on the basis of which the Annex on Expropriation was signed on 23 April 2014. Annex 2 concluded on 17 November 2014 and Annex 3 on 31 July 2015. Also, the Direct Contract was signed on 6 July 2015. In order to overcome the problem of providing additional financial resources, which is a triple contract between the Security Agent, as a representative of the bank, investors and the State of Montenegro and the usual practice in project financing. Also, conclude Annex 4 on 7 May 2017 and Annex 5 on 6 June 2017 which provide possibility for the construction period to be extended by an additional six months on 7 November 2017 until the investor was obliged to complete the trial work of VE "Krnovo" and accompanying facilities and infrastructure.

In May 2017, WF Krnovo launched trial electricity production and for the same issued occupancy permit 30 August 2017. The Energy Regulatory Agency was given to the investor on 2 November 2017 issued a Decision on acquiring the status of a privileged producer and a license for the production of electricity.

WF Možura

Montenegro signed the Lease of a Ground and Construction of the Wind Farm at the site Mozura on 5 July 2010 with a consortium of "Fersa & Celebic" (hereinafter referred to as the Investor) consisted of "Fersa Energias Renovables" SA Spain and "Celebic" LTD Podgorica. The Lease provides for the construction of wind farm with installed capacity up to 46 MW, and the lease period of 20 years.

In accordance with the changes due to change in the transmission line route and the location of TS required for the connection of WF Mozura, the Annex 1 of the Lease of a Ground and Construction of the Wind Farm at the site Mozura was prepared, which the government accepted at the meeting held on 4 October 2012, and signed on 29 January 2013. Annex 1 of the Lease provided that the date of the adoption of spatial planning documents includes the date of the issuance of innovated urban-technical conditions. Innovated urban-technical conditions for the construction of wind turbines at the site Mozura were issued on 7 June 2013.

The investor prepared project documentation required for issuance of a building permit and got the permit on 15 December 2014.

After the expressed interest in 2015 for the transfer of the Lease of a Ground and Construction of the Wind Farm to another company and the fulfillment of all the necessary conditions, the text of the Transfer Agreement has been harmonized. The aforementioned Agreement which concluded on 27 October 2015 "Enemalta plc" became the new leaseholder of the Lease Agreement. Pursuant to the provisions of the Agreement, the deadline for completing the construction is 33 months,

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As the construction is not completed within the stipulated deadline, the investor shall contact with the request for extension of the deadline. The Ministry of Economy has taken activities around drafting the Annex, which will extend the construction period until the end of this year.

Small Hydro Power Plants:

The construction of small hydropower plants is possible on the basis of a tender procedure that can be implemented in accordance with the Law on Concessions on the initiative of the Ministry or at the initiative of the interested person. Before starting the tender procedure, the watercourses that will be the subject of the tender must be covered by the annual plan adopted by the Government of Montenegro. Construction of small hydropower plants is possible on the basis of an energy permit issued for the construction of facilities for the production of electricity up to 1 MW, without the implementation of a tender procedure. The energy permit is issued in accordance with the Energy Law and the Rulebook on the contents of the request for issuing an energy permit and the content of the energy permit register, based on the annual plan adopted by the Government of Montenegro.

Awarding of concession contracts for small hydropower plants

There are three ways of achieving concession rights over small streams rivers:

• By tender; • Through initiatives that the investor starts (through tender procedure); • Through the issuance of authorizations (Exclusively mini hydro power plants).

For hydropower installed capacity up to 1 MW is necessary to obtain energy permit. If energy permits are issued for the construction of power plants with installed capacity up to 1 MW, using state resources or land, based on the Decision of the Government, with the holder of energy permit is signed standard Contract of the concession.

In accordance with decision to optimally valorize available hydro potential in Montenegro, three tender procedures and one initiative have been conducted for awarding concession contracts for usage of hydropower potential for production of electricity in small hydropower plants (hereinafter: SHPP).

According to the concluded concession contracts, based on the first and second tender, the construction of 41 SHOPs, with completely installed power of around 73,022 MW, with planned annual production of around 246,908 GWh. According to conceptual designs and feasibility studies drafted by concessionaires, value of total investments for realization of these projects amounts around 101 million €.

Stimulating prices for electricity produced in small hydropower plants shall be calculated according to tariff points, in accordance with formulas given in the Tariff system, expressed in u c€/kWh and they amount:

• for produced electricity up to 3,0 GWh /10,44 c€ • TS2 for produced electricity from 3,0 GWh to 15,0 GWh / 7,44 c€ • TS3 for produced electricity above 15,0 GWh / 5,04 c€.

Hydro Power Plants on River Morača:

Construction of 4 hydro-power plants with total installed power of 238 MW and an average annual generated electric power of 694 GWh

HPP Morača

Regarding the preparation of the project HPP on river Morača, Government of Montenegro has adopted on 18.02.2010 Draft Detailed Spatial Plan for area of multipurpose accumulations on river Morača and Draft Strategic Environmental Assessment, whose developer was Norwegian

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- 63 - consortium COWI, Oslo. These two documents were prepared based on Basic technical solution which envisages construction of four hydropower plants with installed power of 238,4 MW and average annual production of electricity of 721 GWh, with maximum accumulation level of HPP Andrijevo of 285 mnm and accumulation volume of 250 hm³.

Main Amendments and supplements to the Draft Detailed Spatial Plan and Draft Strategic Environmental Assessment, which were results of public debate are following:

• It has been decided to amend these two documents with Basic technical solution II, which envisages construction of four hydropower plants with total installed power of 238.4 MW and average annual production of electricity of 616 GWh, with maximum accumulation level of HPP Andrijevo of 250 mnm and accumulation volume of 100 hm³. This solution has less impact on environment and cultural heritage but smaller economic and energetic effects. • Drafting of Study of Biodiversity Conservation for the project area has started. First phase of the Study – preparation of the data base has been finalized. Drafting of the Study is of extreme importance from the point of view of protection, conservation and repositioning of flora and fauna which could be endangered by the Project. • Study of protection and valorisation of cultural heritage in the basin of Morača was prepared, including Monastery Morača as the most valuable cultural good in the project area.

Tender for construction of HPP Morača has pronounced as unsuccessful because the interested companies which had purchased tender documents did not submit final offers.

Potential of river Morača is a natural wealth of Montenegro, especially in the situation when we have a significant deficit of electricity, but also from the point of safety of power supplying.

In October 2015, Government of Montenegro signed Memorandum of Understanding with Chinese company NORINCO International Coorporation Ltd and in December 2015 the MoU was signed with Turkish company Bereket Enerji. Both of companies have prepared technical proposals for the development of HPPs on Moraca river while Chinese company Norinco prepared and submitted to the Government of Montenegro Commercial proposal as well, which will be analysed in due time.

Hydro Power Plant on River Komarnica:

Investment in two power generators of 168 MW, with annual production of 232 GWh

HPP Komarnica

According to the existing documentation, HPP Komarnica would be frontal HPP and accumulation in the basin of river Piva. Location of dam is at the end of backwater of existing accumulation of HPP Piva. The construction of concrete arch dam 176 m high. Hydropower plant would be dam toe powerhouse with two power generator units with installed power of 168 MW and annual production of 232 GWh. Level of backwater accumulation is limited with the position of town Šavnik (816 mnm). Estimated value of the project is around 183 million €.

Construction of HPP Komarnica is undisputable both in spatial and Water Management Plans of Montenegro and there are no obstacles for its realisation. There are no industrial capacities, roads, business facilities or households which would be endangered, but the accumulation would flood the canyon, area which is not inhabited and arid land.

EPCG has conducted a number of survey works in the period from 1990 to 2011, for needs of drafting the project documentation. The survey works are being realized in cooperation with Electric Power Industry of Serbia (51 : 49% - investment ratio) and by now it was spent around 4 million €. Survey works have been finalized, and Elaborate on survey works is currently under preparation. According to the existing project documentation, the planned period for construction of this facility is 7 years.

In the period from 2008 – March 2009, Pre-Feasibility Study was prepared and its results indicate that the project is technically and economically justified.

In February 2018, Elektroprivreda Crne Gore signed, with a group of contractors - Institut za vodoprivredu Jaroslav Černi A.D. and Energoprojekt Hidroinženjering A.D – a Contract on

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- 64 - development of the Preliminary Design with a Feasibility Study and the Environmental Impact Assessment Study for hydro-power plant Komarnica. Contract value exceeds €1.6M while the deadline for development of the Preliminary Design and supporting documentation would be 15 months.

Submarine Cable:

Construction of submarine cable with energy of 1.000 MW capacity between Italy and Montenegro

Construction of an undersea direct current transmission cable with capacity of 1,000MW between Italy and Montenegro, which is an investment worth over 758 million euros, which is an obligation of Terna, and according to the information used by Terna - the value of the investment is higher, i.e. about 1 billion EUR;

The Government of Montenegro and the Government of the Republic of Italy, in February 2010, concluded the Agreement between Montenegro and the Republic of Italy on the construction of undersea power interconnection between the transmission networks of Montenegro and Italy with the implementation of the strategic partnership of the transmission system.

Through the aforementioned procedure of the emission of shares, Italian company Terna became the owner of 22% of the share capital of Montenegro Transmission Company (CGES), while the State of Montenegro remains the owner of 55% of the share capital. In this way CGES was recapitalized by Terna and Terna has become a strategic partner of the Government and CGES in the realization project of undersea cable and infrastructure in Montenegro.

Expected project benefits:

• Obtaining, without investment in undersea cable, 20% of capacity and revenue from the exploitation of the cable which can be estimated at least $10 million annually;

• Getting significantly better, stronger transmission network and forming a ring of 400kV network;

• Increased security of electricity supply to major tourist centers in the Montenegrin coast, such as Herceg Novi, Tivat, Kotor andBudva;

• Creating conditions for effective and reliable connection to the transmission network of new generating units northern from Niksic;

• Creating infrastructure for reliable and quality supply of Zabljak and Niksic municipality as a precondition for their development;

• Creating infrastructure for reliable evacuation of electricity from the future production facilities in the municipality of Pljevlja, PP Maoce, PPPljevlja 2;

• Montenegro is positioned as an important energy hub in the region.

The project of connecting Montenegro and Italy by submarine DC cable predicts:

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➢ construction of an submarine DC (direct current) cable with capacity of 1.000MW between Italy and Montenegro with its converter stations (investment worth over 758 million euros and it's an obligation of Terna);

➢ construction of the substation 400/110/35 kV Lastva (TS Lastva), 400kV transmission line Lastva - Čevo - Pljevlja and the introduction of the existing 400 kV transmission line Podgorica - Trebinje in TS Lastva (investment worth over 100 million euros and it's an obligation of CGES);

➢ construction of 400 KV transmission lines to Serbia and/or Bosnia and Herzegovina (for the realization of this investment the Government of Montenegro has received a grant from the European Union in the amount of 25 million euros, because it represents a part of Trans-Balkan corridor, section Montenegro).

And finally, the offshore exploration for hydrocarbons is in a research phase. This project will be financed from foreign investment, i.e. invested by the concessionaire in 100% amount.

Section 4.1.5.3

In Section 4.1.5.3, the report mentioned that State ownership of companies operating in the transport sector remains significant in the maritime, rail and air sectors, although the Port of Adria, the main commercial port, was privatized in 2013.

Question: How do you evaluate the privatization experience in the transportation sector? Do you have any impact analysis for the Andria Port? Are you planning to privatize more projects in this sector?

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THAILAND

PART I: QUESTIONS REGARDING THE SECRETARIAT REPORT

Para 3.112

Question It states in this paragraph that "they also exempt agreements relating to research and development, some vertical agreements, distribution of spare parts and servicing of motor vehicles, insurance, technology transfer, and road, rail and inland waterways and maritime traffic (Block Exemption Regulations)"

Please provide more information on exempt agreements relating to research and development, some vertical agreements, distribution of spare parts and servicing of motor vehicles, insurance, technology transfer, and road, rail and inland waterways and maritime traffic.

Answer:

There is a general Block Exemption Regulation providing for safe-harbor for all vertical agreements and sector specific Block Exemption Regulations (BER) as noted above. Outside of the scope of BER might be vertical agreements whereby any of the parties has more than 30% market share (MS), i.e. in specific sectors (e.g. insurance) more than 20%, which cannot be exempted under the BER. Still, the Law provides for individual exemption procedure ("comfort letter", as known before EU Reg. 1/2003) under which specific conditions need to be fulfilled in order to secure legal enforcement of an agreement. In this respect, the Law provides for the self-assessment opportunity and further on the ex-post control upon request for individual exemption of restrictive vertical agreement. RPM practice (retail price maintenance), including other hard core restrictions (non-compete, passive sales restrictions etc.) may only be exempted subject to individual exemption agreement and on the basis of meeting four cumulative criteria (as referred to under TFEU Art. 101(3)).

Para 3.114

Question It states in this paragraph that "Mergers and acquisitions as well as joint ventures are subject to ex-ante control,…"

Does MAPC apply any threshold, criteria, or other factors as an instrument to consider Mergers and Acquisition filing?

Answer:

In order for MAPC to assess fulfilment of threshold, all market participants (undertakings) have to satisfy one of the following preconditions as prescribed by Article 52 of the Law on Protection of Competition:

1) conclusion of the agreement or contract; 2) announcement of the public call, or bid or closing of the public bid, or 3) the acquisition of control.

If one of the actions from Article 52 occurs the MAPC assesses the following thresholds (Article 50 of the Law):

1) the combined aggregate annual turnover of at least two parties to the concentration achieved in the market of Montenegro exceeds 5 million euros in the preceding financial year; or

2) the combined aggregate annual worldwide turnover of the parties to the concentration achieved in the preceding financial year exceeds 20 million euros, if at least one party to the concentration achieved one million euros in the territory of Montenegro in the same period.

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Consequently, if the conditions from Article 50 are fulfilled, undertakings are obliged to submit to the MAPC a Request for issuing approval for the implementation of the concentration (merger notification).

Para 3.128-3.132

Question Please provide more details on the legislation or regulation about privatization of State-owned enterprises; specifically the objective and strategic direction related to how State-owned enterprises are chosen for privatization or kept as state enterprises in order to conduct social and welfare - related mission.

Answer:

Privatization process in Montenegro is implemented in accordance with the Montenegrin Economic Policy, whose main objectives are reflected in the higher economic growth, ensuring new jobs and employment, increasing investments and export and creating the basis for higher income and growth of citizens' standard of living, together with the increase of competitiveness of the Montenegrin economy. Privatization process is in its final stage. Since the beginning of 1999, more than 90% of the state-owned companies or companies with the majority of the state-owned capital have been privatized, including the 100% of privatization in the banking sector, telecommunications and oil distribution. Most of the companies that have not been privatized for the time being are of the strategic relevance for the Montenegrin economy in the energy, transport and tourism sectors.

The Government of Montenegro is the main institution in charge of privatization. The Law on Privatization of the Economy defines the models for privatization, the institutional framework for privatization process and the role of the state in formulating the privatization policy, as well as the conditions and procedures of the process, etc.

The aforementioned Law has established an institution responsible for privatization i.e. the Privatization Council (now Privatization and Capital Investment Council), which manages, controls and implements the privatization process, as well as supervises if privatization is carried out in accordance with the Privatization Plans. Each year, the Council announces and publishes in the Official Gazette the Privatization Plan that lays out the companies to be privatized, the methods of their privatization, certain deadlines and how foreign investors can participate in the process. The Privatization Plan is prepared on the basis of proposals of ministries, State funds, as well as tender committees of the Council. Each ministry or State fund submits to the Council a list of companies with a proposal of the privatization method. The Council examines the proposals and makes a decision which companies will be included for the privatization. Priority is given to companies for which the investors have already expressed interest for their privatization, and to companies assessed to be privatized through the tender procedure in the current year.

In addition, the Government's regulation defines the manner and the procedure of sale of companies through public auction (in accordance with the Decree on Sale of Shares and Assets through Public Auction), public tender (in accordance with the Decree on Sale of Shares and Company Assets by Public Tender) and public offer on the stock exchange.

Having in mind the success of public-private partnership (PPP) projects in EU member states and the lack of the budgetary funds for infrastructure development, the Government of Montenegro has decided to use the PPP model more intensively through the privatizations process. Therefore, the Government has opened all sectors to the PPP model (including healthcare and education, ports, energy, tourism and the valorizations of attractive locations in the costal and northern areas of Montenegro).

Considering that public enterprises (Water Supply Company, Health Care, public enterprises for construction and maintenance of road infrastructure, Utility Enterprise, primary and secondary education and the University of Montenegro) ensure social welfare, they are still not subject to privatization.

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PART II: QUESTIONS REGARDING THE GOVERNMENT REPORT

2.6 Investment Policy

Para 2.50

Question

Do those nine local business zones exist or they will be established in the future? Please also provide more details of targeted industries and incentives.

Answer:

1) Business zones exist in 9 municipalities, whereby each municipality has defined several locations for their establishment. The Decree on Business Zones defines that local self-governments have to harmonize their respective local legislation for business zones of local importance with the provisions of this Decree. Consequently, by 21 June 2018 all local governments that have business zones in their territories must act on this basis, so that the business zones remain functional and usable.

2) After the above date we will have exact data on the number of business zones and their equipment and functionality. Monitoring process is in progress.

3) Business zones are targeted for manufacturing industry and some form of services. Beneficiaries are exempted from paying contributions to salaries and personal income tax for a period of 5 years from the date of employment of persons in the business zone. Also, additional facilities at the local level are provided.

3.6.1 Agriculture

Para 3.37

Question Regarding the project of supporting investments in agriculture farms, the so-call MIDAS Project, are both local investors and foreign investors (whether in the form of joint-venture or other forms of corporations) eligible to the government's supports?

Answer:

Through public calls for support under the MIDAS, recipients of grant support can be natural persons (citizens of Montenegro with place of residence in Montenegro) and/or companies registered in Montenegro (registered in the Central Registry of the Commercial Subjects).

3.6.3 Forestry

Para 3.49-3.50

Question Please kindly provide details of new concept of the Action Plan for forestry with the reform organization and system of forest management. Would this reform include private entities and enhance international corporations?

Answer:

Given that the objectives of the reform are better valorization of forest resources and increased forest management efficiency, the essence of the new concept is that instead of selling the wood in the standing volume, the current practice goes to the system of selling timber assortments in forest stores (lagers), with the introduction of the private sector in cutting trees and extraction of wood assortments on the lagers.

Reforms will lead to higher engagement of the private sector in the service sector through performing forest-related activities. This will increase the interest of international forest

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3.10.5 Electronic communications

Para. 3.107

Question As this paragraph states that The Law created conditions for further development of electronic communication networks and services, does the government have an intention to liberalize the regime under electronic communications for foreign services providers to have equal right as local services providers in near future?

Answer:

Foreign services providers have equal right as local services providers in the market electronic communications.

Requirements for competitors entering the telecommunications market are provided for in the Law on Electronic Communication.

The application includes: 1) for natural person – name and surname, unique personal identification number and address or for a foreign natural person - the name and surname, date and place of birth, passport issuing country or identity card and number of such document; 2) for legal entity – name of company, seat, statistical and registration number, account number and name and surname of the representative; 3) brief description of public electronic communications networks and/or publicly available electronic communications services, which shows network and/or service characteristics; 4) anticipated date of inception, change or termination of regime of usage of public electronic communications networks or provision of publicly available communications services.

With the application, the evidence has to be submitted that the applicant is registered for carrying out the activity of electronic communications, and of course in line with the Company Law in the Central Registry of Business Entity.

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TURKEY

THE SECRETARIAT REPORT

2.3 Trade Agreements and Arrangements, pg. 37, 2.23

It is stated in the Secretariat Report that "Montenegro is one of the founding members of CEFTA. The Agreement was signed in December 2006 and entered into force in May 2007. As at end-August 2017, parties of the Agreement were: Albania, Bosnia and Herzegovina, the Republic of Moldova, Montenegro, Serbia, The former Yugoslav Republic of Macedonia, and Kosovo. In 2016, according to UNCOMTRADE data, Montenegro's merchandise trade with CEFTA members constituted 29.2% of total imports and 38.4% of total exports. These figures do not take into account trade between Montenegro and Kosovo, which the authorities estimate to account for 0.2% of imports and 5.9% of exports. The Agreement covers goods only and, inter alia, contains provisions relating to competition as well as broadening cooperation in services, investment, government procurement, and protection of intellectual property rights. The Agreement has not yet been subject to consideration in the WTO's Committee on Regional Trade Agreements (CRTA)."

Question: Could Montenegro elaborate on its approach towards a full and total economic integration model in the Balkans? Is it possible to go beyond CEFTA regarding economic integration efforts in the Balkans?

Answer:

As far as Montenegro is concerned CEFTA remains as the main legal framework with respect to economic integration model in the Balkans.

3. Trade Policies And Practices By Measure, Table 3.7 Main domestic support measures, footnote "a" 2012-18, p.7-75

It is stated in the Secretariat Report that "Investors implementing investment projects ensuring job creation and contributing to economic and regional development of Montenegro may be beneficiaries of financial incentives awarded by a Decision of the Government of Montenegro on the allocation of funds for direct investment promotion."

Question: Could Montenegro provide detailed information about how contribution to the economic and regional development is assessed? (i.e. whether there is any specific criteria and condition)

Answer:

According to the Decree on Dırect Investment Incentıves (OG MNE No 80/ 2015) the criteria for the award of investment incentives are the following:

• References of the business entity • Extent of participation of other business entities from Montenegro during and after the completion of the investment project • Value of the investment project • Investment project impacts related to research and development • Investment project impacts on human resources • Investment project impacts on the environment • Volume of international turnover • Economic effects of the investment project • Investment project impacts on the regional development • Letter of intent from the local self-government unit

Criteria Economic effects of Investment Project is defined in the article 19 of the Decree

Economic effects of the Investment Project shall be scored according to the data contained in the business plan and projected balance sheet and income statement, as follows:

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1) for the indicator of cost-effectiveness which represents the total revenues to total expenses ratio for the period of six years from the beginning of the investment project implementation, amounting to: a) over 1.5 – 10 points, b) over 1 up to 1.5 – 5 points, c) up to 1 – no points; 2) for net profit ratio which represents the ratio of average net income in an investment cycle for the period of six years from the beginning of the investment project implementation to total investment, amounting to: a) over 20% – 10 points, b) over 5% up to 20% – 5 points, c) up to 5% – no points; and 3) for the investment payback period, which represents the ratio of total investment to average net profit in the period of an investment cycle, amounting to: a) up to five years – 10 points, b) from five to ten years – 5 points, c) over ten years – no points.

On the basis of the criteria from paragraph 1, items 1, 2 and 3 above, the Business Entity may be allocated up to maximum 30 points.

If investments are implemented in the underdeveloped regions of Montenegro such project will be awarded with additional points as follows:

Criteria Investment Project impact on regional development is defined in the Article 20 of the Decree

Investment Project impacts on regional development shall be scored according to the region in which the Investment Project will be implemented, as follows: 1) for the northern region and central region, excluding the Capital City of Podgorica – 10 points; and 2) for the coastal region and the Capital City of Podgorica – 5 points. English version of the Decree is available at: http://www.mek.gov.me/en/WTO/LIBRARY/ep_actual_legislation/Investment_regime?alpha bet=lat

3.3 Measures Affecting Production and Trade, pg. 37, 3.101

It is stated in the Secretariat Report that "During the same period, Montenegro introduced more stringent veterinary control and check measures to prevent the introduction and spread of blue tongue disease, foot and mouth disease, classical swine fever, and other animal contagious diseases. The 2017 annual budget for obligatory measures for the protection of animal health stood at €1.38 million"

Question: Could Montenegro provide detailed information about measures taken to prevent the introduction and spread of blue tongue disease, foot and mouth disease, classical swine fever, and other animal contagious diseases?

Answer:

The Veterinary Law (OG MN 30/12, 48/15, 52/16) prescribes the Special preventive measures for protection against infectious animal diseases (Article 55) and also measures to combat infectious of animal diseases (Article 59).

Moreover, in accordance with the Veterinary Law, the Program on required measures for health protection of animals from infectious diseases is adopted every year.

The Program of mandatory animal health protection measures lays down specific programs, including the programs on surveillance, monitoring, vaccination against certain diseases by age groups, including the costs necessary for its implementation.

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In line with this program, the obligatory vaccinations of cattle and sheep against Blue tongue disease is being implemented since 2017, in accordance with the Regulation on measures for prevent introduction, detection, suppression and eradication of infectious diseases Blue tongue (OG MN 3/2015), which prescribes measures in case of doubt or appearance of this disease.

Since 2006, Montenegro has had the OIE status of a country free from foot-and-mouth disease without vaccination. This disease is regulated by the Regulation on measures for preventing introduction, detection, suppression and eradication of infectious foot-and-mouth diseases (OG MN 38/2015) and the Crisis management plan in case of presence of foot-and-mouth disease (OG MN 38/2015) - Contingency Plan.

In order to maintain the free status from foot-and-mouth disease, the annual program of mandatory animal health protection measures lays down the implementation of monitoring for this disease on the territory of Montenegro. Under the program, by random sampling, 150 samples of cattle and 150 samples of sheep are tested. All tests performed so far were negative, which, along with the absence of any clinical suspicion confirms that the country is still free from this disease.

The last case of classical swine fever in Montenegro was recorded in 2007. Vaccination against this disease in Montenegro is carried out, as well as control of the immune status of the domestic pigs and pigs from imports. The plan is to start with the policy of non-vaccination of pigs in2020. The Rulebook on the measures for the prevention, detection, suppression and eradication of classical pig fever (OG MN 18/2014, 84/2017) and Crisis management plan in case of presence of classical swine fever (OG MN 44/2015) are in force (Contingency Plan).

Moreover, other regulations governing measures for prevention of their occurrence, detection, control and eradication, the method of sampling and diagnostic examination and the scope of the infected and endangered area, depending on the disease (Lumpy skin disease, Avian influenza, African swine fever, Swine vesicular disease,...) are also in force.

Control and eradication of highly dangerous infectious diseases, depending on the risk assessment, is organized and implemented based on the plans for management of crises concerning specific infectious diseases (the contingency plan) adopted by the Government, while the Administration competent for the veterinary prepares technical bases for management of crises (contingency plans).

The contingency plans include in particular the organization and manner of implementation of measures for control of the infectious disease concerned, the funds, equipment and human resources necessary, as well as the procedure for control of implementation of the plan.

THE GOVERNMENT REPORT

2.5 Privatization, pg. 11, 2.45

It is stated in the Government Report that "Having in mind the success of public-private partnership (PPP) projects in EU member states and the lack of the budgetary funds for infrastructure development, the Government of Montenegro has decided to use the PPP model more intensively through the privatizations process. Therefore, the Government has opened all sectors to the PPP model (including healthcare and education, ports, energy, tourism and the valorizations of attractive locations in the costal and northern areas of Montenegro)."

Question: Could Montenegro provide detailed information about PPP projects on which cooperation can be developed and opportunities presented especially in health sector during privatization process?

Answer:

Public-private partnership in Montenegro is currently regulated by the Law on Participation of Private Sector for the delivery of public services and the Law on Concessions.

PPP has a special significance according to the Law on Foreign Investments, on the basis of which a foreign person can establish company or invest in Montenegro under the same conditions as a domestic person.

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The Law on Public Private Partnership is under preparationand its adoption is planned by the end of June 2018. It is expected that this Law will regulate the conditions, method and procedure for approving projects as a public-private partnership, the rights and obligations of public and private partners, the content and procedure for concluding a PPP contract, public-private partnership forms, selection procedures of the best bidder, and other issues of relevance to realization of the public-private partnership project.

In the last few years, the number of concluded PPP contracts which will be realized according to this model, has significantly increased.

The final decision for starting a project is exclusively under the jurisdiction of the Government based on the assessments and opinions of independent experts within the sustainability study.

In recent years, the Government of Montenegro has opened all sectors for the PPP model, including health and education, ports and railways, energy, tourism and valorization of attractive places on the Montenegrin coastline and north region of the country.

Valorisation of tourist sites: The privatization plan for 2018 envisages the valorisation of several tourist sites through a public-private partnership, such as: Ada Bojana, Ulcinj Municipality - tourism valorisation of the location through development, construction, financing and management of exclusive tourism complex and long-term lease of the Ada Island; Masline Valley - "Utjeha" for Odrač Bay, Bušat, Bar Municipality; the location between Njivice and Sutorina mouth, Herceg Novi Municipality; Location "Donja Arza", Herceg Novi Municipality; Location "Kabala for", Herceg Novi Municipality; The Project of tourism valorisation of the location „Mrkovi – Bijela Stijena", Luštica, Herceg Novi Municipality;The Project of tourist complex Ecolodge Lovćen, National Park Lovćen, Cetinje Municipality; Ski Resort "Savin kuk", Žabljak Municipality; Tourism valorisation of the locations included in the Special Purpose Spatial Plan "Bjelasica and Komovi" – Cmiljača and Žarski, Mojkovac Municipality and Bijelo Polje Municipality. .

The most important projects implemented in the previous period through the model of public- private partnership are the provision of long-term lease of locations on the Lustica Peninsula belonging to the municipalities of Herceg Novi and Tivat, the long-term lease of the Orijen battalion barracks in Kumbor and the long-term lease of Lastavica Island with fortress "Mamula".

An integral part of the PPP arrangement is awarding concessions, particularly in energy sector and waste management, such as: Construction of Small Hydro Power Plants (MHE), Construction of hydroelectric power plants on Morača, Wind farms, solar power plants, Waste management projects…etc…

Travel infrastructure: Regarding the road infrastructure, Montenegro would like to ensure integration of the Montenegrin transport network into the roads of neighboring countries. Therefore, the construction of the Bar-Boljare highway and the Adriatic Highway through Montenegro is an investment of the strategic importance.

Health services: The Government of Montenegro has recognized the need for initiation of investors and large hospital chains through the projects of joint investments in further development of the health system in Montenegro, which will contribute to development and improvement of providing medical services within the country, especially through professional reputation, knowledge, experience and resources. The main goal of these projects will be to build new medical facilities, where the state's role is to ensure the land in certain locations with the accompanying communal infrastructure.

Local level:The number of PPPs at the local level in Montenegro depends mainly on the size and the budget of the municipality. All Montenegrin municipalities have a strong interest in projects under the PPP model. However, there is a large number of municipalities where PPP projects have not been realized so far.

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UKRAINE

PART I: QUESTIONS REGARDING THE Secretariat Report (WT/TPR/S/369)

3 TRADE POLICIES AND PRACTICES BY MEASURE 3.1 Measures Directly Affecting Imports 3.1.5 Import prohibitions, restrictions, and licensing 3.1.5.2 Import approval and restrictions

Page 60 (Para 3.38)

The Report notes that "The decision fees for import licences for medicines and medical devices are based on the total import value, and those relating to the import/export/transit of drugs and psychotropic substances in line with the international conventions amount to 1% of the total import/export/transit value rather than the service cost. According to the authorities, these fees are based on the merchandise value because the cost of the evaluation and inspection service depends on the import value, i.e. a higher value usually means that there are more medicines to control."

Questions:

1. Would Montenegro, please, explain the rationale behind the policy to base the fees for import licences for medicines, medical devices, drugs and psychotropic substances on the total import value?

Answer: Fees are based on the merchandise value because the service also depends on the value of import i.e. when the value of import is higher it means usually that there are more medicines, medical devices on the import licences that need to be evaluated and checked.

2. Could Montenegro kindly give some more information concerning the evaluation and inspection services, which are actually rendered depending on the merchandise value?

Answer: For every medicine and/or medical device in the process of issuing import authorization all of the documentation including for example GMP certificates, Certificates of Analysis, Labelling, Justified request of the health institution, i.e. opinion of medical specialist on the need for import of the particular medicine… must be checked. So, the more products there are on an application (medicines or medical devices) the more resources (time and issuing personnel) are necessary. Also worth of consideration is the fact that at the time this tariff system was introduced, Montenegro had few registered medicines and almost the entirety of the market relied on import authorizations. At the time of Agency's inception in 2008, the import fee was fixed, regardless of merchandise value and number of different medicines. Importers planned their imports irrationally, often vastly overestimating the amounts of medicines being imported as well as listing medicines they are unlikely to import on the applications. This was a direct consequence of the fact that importation fee wasn't dependent on the number and amount of medicines listed on the application. This was very taxing on the Agency's resources and also complicated analyses of Montenegrin market from the aspect of issued import authorization because the data wasn't relevant. After a tariff system with import authorization fees based on the total import value was introduced, the importers' applications for import authorizations started reflecting realistic needs (in regard to types and amounts of medicines and medical devices).

Montenegro is fully aware of the undertaken commitment to ensure that all fees and charges for services applied in connection with importation and exportation would be applied in conformity with the WTO Agreement, including Articles VIII and X of the GATT 1994 and confirms that there are no other services rendered depending on the merchandise value.

3. What authorities are responsible for application of such fees and for provision of the evaluation and inspection services?

Answer: Agency for Medicines and Medical Devices.

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4. Ukraine would also appreciate if Montenegro could clarify the international conventions, in line with which the decision concerning mentioned fees was made.

Answer: There are no international conventions regarding medicines and medical devices. Similar practice exists in one neighbouring country (Bosnia and Herzegovina). For drugs and precursors there are three international conventions: - Single Convention on Narcotic Drugs, 1961, - Convention on Psychotropic Substances of 1971 - United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, 1988.

5. Does Montenegro have any plans to change such policy, ensuring that all fees for services connected with importation are applied in conformity with provisions of Article VIII of the GATT 1994?

Answer: Yes. After the new Law on medicines is adopted (which is planned during 2018), the price list will be changed. This change will include a new fixed import tariff system, i.e. the import fee will be fixed, regardless of merchandise value and number of different medicines.

3.2 Measures Directly Affecting Exports 3.2.4 Export support and promotion 3.2.4.2 Duty and tax concessions

Page 63 (Para 3.51)

Under the Report "Montenegro allows for the reimbursement of customs duties and VAT on inputs used in the manufacture of export goods. The Customs Law provides for the repayment/reimbursement to the exporter of the amount of customs duties paid on inputs used for exported goods, or their write-off (repayment system). Exports are VAT-free. Based on input invoices, the amount of VAT paid on inputs used for export items is refunded to taxpayers who mainly export goods (income from abroad more than 51% of total revenues) and indicate a surplus of input VAT in more than three successive VAT returns, within 30 days from the date of filing of the VAT return (Sections 3.3.1.1.2 and 3.3.1.2). No data from 2012 onwards on the amounts disbursed and the export value by main product category involved were available from the authorities."

Question:

6. Ukraine would appreciate if Montenegro could elaborate on its abovementioned measures regarding, if any, the top imported agricultural products incorporated in products that were exported, the export value of such products, the export destinations for those products and the amount of the refund of duties, taxes or other fees gathered at importation under the regime of duty and tax concessions during the last three years?

Answer: We have no available data.

4 TRADE POLICIES BY SECTOR 4.1 Agriculture, Forestry, and Fisheries 4.1.1 Agriculture 4.1.1.3 Support mechanisms

Page 122 (Para 4.25)

According to the Report "Credit to farmers is available through commercial banks, microfinance institutions and the Investment Development Fund (IDF) (Section 3.3.1). The IDF provides both direct credit and loans through the commercial banks. Loans are for up to €1,000,000; grace periods are for 4 years; and repayment periods thereafter are for up to 8 years. Interest rates

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- 76 - range from 3.5% to 5% annually. Apparently, commercial banks typically have high interest rates and unfavourable conditions."

Question:

7. Would Montenegro kindly explain how such support as direct credit and loans provided for farmers at lower interest rates will be presented by Montenegro in its Table DS:1 notifications for the calendar years starting from 2015?

Answer: In order to stimulate the development of small and medium-sized enterprises the Government of Montenegro provides development loans, which are given under more favourable terms than commercial loans, with an average interest rate of 3%. Loans are financed by the European Investment Bank (EIB) funds. IRF is the institution responsible for granting loans in accordance with the defined conditions. These kinds of credits are available to all branches of the economy, not only for agricultural activity. Therefore, agricultural producers do not have the exclusive right to use these loans, but they have the right to compete and to get loans under the same conditions as users from other economic sectors, within the defined credit line. Credit beneficiaries can be companies and entrepreneurs and all forms of organization provided for by the Law. The right to credit does not exist, but IDF MNE, on the basis of each individual request, makes a special decision. Agricultural production is not particularly supported, nor has exclusively privileged loans, but is an integral part of the lending program.

Activities on the allocation of more favourable loans, for all users, will be notified in accordance with the obligations provided for in Article 25 of the Agreement on Subsidies and Countervailing Measures.

4.1.2 Forestry

Page 123 (Para 4.31)

The Report states that "In mid-2017, Montenegro imposed a ban on exports of certain wood items from state forests (26 tariff lines in HS 44011100 and HS 44011200 (fuel wood) and HS 4403 (wood in the rough)) and imposed temporary export licensing on these items when exported from private forests (OG No. 23/2017, 7 April 2017). The rationale for this measure was to control exports in order to ensure adequate supply for the domestic market, since a prohibition on logging in Albania in 2016 had resulted in a surge of exports to that country. The export licensing regime is in place until 1 May 2019, with licences being granted by the MARD upon request. They are valid for 30 days."

Questions:

8. Could Montenegro kindly elaborate more on the policy objectives to prohibit exports of some kinds of wood and wood products and to impose export licensing temporarily?

Answer: Montenegro has introduced export licenses on raw materials or wood of a lower level of processing, in order to: - preserve the stability of the supply of raw materials to the processing sector; - ensure the stability of the population of the northern part of Montenegro who use wood for heating; - preserve the stability of the prices of fuel; as well as - control the preservation of the forest fund, combat illegal harvesting, control the implementation of the cutting in line with the cutting plan.

Namely, the Government of neighbouring Albania imposed the total ban of exploitation of forestry in this country in 2014 (measure is in place for 10 years). This measure has influenced the huge outflow of wood from Montenegro to this country, and led to a shortfall, price increase and illegal cutting of state forests on the border area. Data related to export of wood and wood products from Montenegro to Albania are the best indicators showing the impact that the measure of this country has caused in terms of rapid increase of export to Albania, which started in 2013. Value of export of heating wood to Albania in 2012-accounted only 150 Euro, while in 2014 it was 340,000 Euro,

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- 77 - and in 2016 was 621,000 Euro. Value of export to Albania, of products from tariff heading 4403 in 2012 amounted 308,000 Euro, in 2014. 706,000 Euro, and in 2016 1,810,000 Eur.

Furthermore, data show that in the period of two years (from 2014 to 2016) export to Albania increased by 83% in the case of wood used for heating, while exports of untreated wood (logs) were 156% higher.

At the same time, the prices of these products in Albania were significantly higher, which also affected not only the rise in prices on the domestic market, but also the higher outflow, as there was a growing interest in exports to that country, rather than sales in the domestic market.

9. What problem does this measure address to?

Answer: As noted in the previous answer the measure was imposed in order to preserve the stability of the supply of raw materials to the processing sector, to ensure the stability of the population of the northern part of Montenegro who use wood for heating, preserve the stability of the prices of fuel, as well as, to control the preservation of the forest fund, combat illegal harvesting, control the implementation of the cutting in line with the cutting plan. Montenegro has also introduced export licenses, with the aim to have better control and to monitor the traceability.

10. How did imposition of a ban on exports of certain wood items (from state forests) and imposition of temporary export licensing on these items (when exported from private forests) influence Montenegro's production and exports of wood and products of wood in 2017 compared to previous years?

Answer: We would like to emphasize that sudden outflow of wood and products of wood, which has started in 2013, was a signal for imposing the measure.

In comparison to 2012, value of total export of heating wood in 2013 increased by 147%, in 2014 by 309%, in 2015 by 503%, and in 2016 by 529%. Additionally, value of total export of logs in comparison to 2012 increased by 29% in 2013, by 73% in 2014, by 112% in 2015 and by 54%. Having in mind these negative trends the Decision on temporary restriction of export of some wood products was adopted by the Government in 2017.

Level of export of these products in 2017 has been fairly stabilized, and it is nearly to the level of 2012. At the same time, market of raw material for processing sector has started to normalize. However, considering that the measure has been in force for only one year, it is early to have final impact assessment as we believe that market disturbance would be likely to continue or recur if the measure was removed or amended.

11. What are other social and economic consequences of making and implementation of such decision?

Answer: Measure does not have any social dimension. The economic impact refers to the preservation of resources and market stabilization.

Page 124 (Para 4.33)

The Report stipulates that "An administrative fee is applied to exports to cover the costs of marking the trees and issuing origin certificates."

Questions:

12. Would Montenegro kindly clarify whether an administrative fee is applied only to exports of wood and wood products and what the fee amount is?

Answer: According to the Law on Administrative Fees, for the issuance of a license for export and import, a single fee of 5 EUR is charged (it is not only for export licenses).

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In order to monitor the traceability and origin of wood assortments, or forests from which products originate, and in accordance with the Forest Law, it is obligatory to possess the document about origin of wood issued by the Forest Administration. This document is important because of determination whether cut of wood has been carried out in accordance with the Yearly Forest Management Plan. For products intended for export, the Inspection for Forestry, Hunting and Unprotected Plant Spices re-enters the site in order to determine the actual origin of product, and the fee is charged in order to cover the real costs of subsequent control. The level of fees is not higher than the cost incurred for these purposes.

13. What authority is responsible for collection of such administrative fee?

Answer: The revenues collected from the payment of all administrative costs, including such costs, are revenues for the Budget of Montenegro. Collection of these revenues is done by the Forestry Administration.

4.3 Mining and Energy 4.3.2 Energy 4.3.2.5 Renewable energy

Page 134 (Para 4.80)

It is said in the footnote 70 to Para 4.80 of the Report that "there is no complete data available on how much solar energy (photovoltaic PV) is used on the territory of Montenegro but it is clear that it plays only a very minor role in the Montenegrin electricity production sector. The strategic objective and future strategy of Montenegro is more supportive to the development of solar thermal heating and cooling than utilization of solar energy for electricity production. PV is also not exploited in Montenegro because of high investment costs."

Questions:

14. Could Montenegro kindly elaborate on any market access restrictions for foreign investors in solar power industry, adopted by Montenegro?

Answer: The Law on Foreign Investments stipulates that foreign investors enjoy national treatment, i.e. they can establish business organizations and invest into them on the territory of Montenegro under conditions applicable to nationals establishing business organizations; the assets of foreign investors cannot be subject to expropriation, except when the law stipulates the existence of public interest to do so, which is done for a fee in accordance with the law.

15. What is the market share between local and foreign enterprises in solar industries?

Answer: There is no production of electricity from solar power. Solar producers are about to enter the electricity generation market.

16. Are there any regulations regarding the local content requirements in solar sector development?

Answer: There is no local content requirements in solar sector.

PART II: QUESTIONS REGARDING THE Report BY MONTENEGRO (WT/TPR/G/369)

Page 11 (Para 2.48)

It is mentioned in the Report that amendments to the Law on Foreign Investment clarified the term of foreign investor and improved investment environment by abolishing restrictions on investments in a company engaged in the production and trade of weapons and military equipment. Foreign investors are provided with a national treatment, which means they have the

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- 79 - same status as domestic investors and are allowed to invest in any sector of the industry and freely transfer financial and other assets, including profits and dividends.

Question:

17. Could Montenegro kindly confirm that currently there are no any industry sectors where its Government imposes restrictions or limitations for foreign investments?

Answer: There is no any industry sector where the Government imposes restrictions or limitations for foreign investments. Until 2014, there was a limitation in the sector of military industry (foreign investor couldn't be a majority owner of a factory which are dealing with the production and trade of weapons and military equipment), but due to the amendments to the Foreign Investment Law of Montenegro adopted in the Parliament of Montenegro in 2014, such a limitation has no longer exist.

Page 22 (Para 3.57)

According to the Report "The Government of Montenegro has demonstrated its commitment to the realization of the concept of trade facilitation, which has been stymied by the Agreement on Trade Facilitation of the WTO (TFA), by establishing the National Committee for Trade Facilitation (Committee). Namely, the Committee was established by the decision of the Minister of Finance in May 2015 and functions according to the principle of co-chairs between the Ministry of Finance and the Ministry of Economy. The composition of the Committee is currently composed of representatives of 17 different bodies, of which 6 representatives of various private sector associations. Its role is to monitor, coordinate and report to the Government of Montenegro on the dynamics of implementation of reforms related to trade facilitation at the national level."

Question:

18. Could Montenegro kindly provide some more details about the National Committee for Trade Facilitation (including general procedure of its operation, main functions, periodicity of meetings) and inform on mechanism that serves to ensure coordination and cooperation between stakeholders in the process of trade facilitation reform through this Committee?

Answer: The National Trade Facilitation Committee was established as a permanent multi-agency body composed of representatives of all relevant state bodies and the private sector, with the task to monitor trade facilitation reform process in Montenegro.

Page 22 (Para 3.58)

The Report states that "Bearing in mind the set of listed obligations, under the supervision of the National Committee for Trade Facilitation, the first National Strategy for Trade Facilitation is under preparation. The aim of the Strategy is to enable the process of reforms related to trade facilitation systemically to be rounded up for the forthcoming period, thus defining a common agenda for all border authorities on this issue. Expert support for the implementation of this document has been provided under the Trade Facilitation Support Program (TFSP) of the World Bank Group."

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Questions:

19. Could Montenegro, please, clarify the state of play of the first National Strategy for Trade Facilitation development?

20. What systemic bottlenecks in cross-border trade does it intend to address?

21. Would Montenegro kindly describe key measures, expected to be defined in this Strategy for the implementation of concrete trade facilitation reforms?

Answer: The first National Strategy for Trade Facilitation development was developed under the NTFC's supervision (adopted by the Government on the session held on 29 March 2018). The Strategy represents a joint five-year reform plan for all competent authorities in the area of trade facilitation. The Strategy is also an answer to a number of obligations arising from the EU accession, WTO Trade Facilitation Agreement and regional CEFTA Additional Protocol 5.

Page 23 (Para 3.63)

The Report mentions the Project "Pre-Processing of Data for Accelerated Consignments", which is being implemented by the Customs Administration, in cooperation with the German Organization for International Cooperation - GIZ, within the Global Alliance for Trade Facilitation.

Question:

22. Could Montenegro kindly provide more information regarding the Project "Pre-Processing of Data for Accelerated Consignments" and describe timeframe of its implementation, main activities and possible preliminary results of its performance?

Answer: The objective of the Project is to facilitate trade through the efficient movement of goods in accordance with the Agreement on Trade Facilitation (Article 7.1 "Processing before arrival of goods"), the Revised Kyoto Convention and the relevant European Union regulations. The implementation of the project is expected to contribute to an increase from 25% to 65% of the number of shipments that were released within 1 hour of their arrival in the customs territory.

The activity plan for this project envisaged amendments to the Customs Law Implementing Regulation, harmonization of IT solutions and its basic specification with the Customs Administration IT team, the development of IT solutions that support risk analysis and which will be integrated in existing Customs Information System (CIS), piloting paper based solutions during the development of IT solutions, with the possibility of a feedback mechanism, and finally a complete integration of the IT solution into the CIS.

The amendments to the Customs Law Implementing Regulation entered into force in July 2017, and all other activities regarding implementation of IT solutions are on-going. Full implementation of the project is expected by the end of June 2018.

Page 25 (Para 3.79 )

The Report declared that "The enhancement of legislation has been a continuing activity. Thus, the new Law on Tourism and Hospitality was adopted in December 2017. The key novelties of this Law

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Questions:

23. Could Montenegro kindly share its view concerning options for exchange of experience in the fields of marketing activities and statistical data collection and analysis in tourism sector?

Answer: The promotion of the tourism product of Montenegro is continuously implemented by the National Tourism Organization of Montenegro in cooperation with tourism companies and the Ministry of Sustainable Development and Tourism, and in the generating markets of Western and Northern Europe, in the region of EX-YU countries, and recently more intensive in certain remote markets, in the framework of regional cooperation with the countries in the region, in order to establish and adequately brand the regional tourism product. The strategic marketing plan with the guidelines for marketing in tourism for the forthcoming five-year period is underway. When it comes to the exchange of experiences in concrete terms, there is a preparedness to exchange experiences between the authorities in Montenegro and other stakeholders, in the manner that would be mutually agreed.

When it comes to the collection of statistical data and their analysis, including the area of tourism, the statistical data are collected, processed and published by MONSTAT (Statistics Office) at the national level.

PART IIІ: OTHER QUESTIONS

24. Could Montenegro elaborate on its vision with regard to further activities under Work Programme on Electronic Commerce within the WTO and the role of the WTO in promoting regulatory environment in facilitating electronic commerce?

Answer: The e-commerce analysis in Montenegro identifies measures for improving the state of electronic commerce through the screening of legislation and practices. The realization of the recommendations should lead to a significant increase in this business form in Montenegro. The Work Program on Electronic Commerce within WTO presents an important opportunity for Montenegro to improve the administrative regulations and procedures regarding the process of e- payment, to encourage the private companies to operate and do business online and to promote online trading of the SMEs.

Montenegro is a co-signer of the Joint statement on electronic commerce adopted at the XI Ministerial Conference by the large group of member states. In addition Montenegro is an active member and supporter of the FEDs (friends of electronic commerce in the WTO). We acknowledge the relevance of E-Commerce as a tool to narrow the digital divide and agreed on the roadmap to initiate exploratory work together toward future WTO negotiations on trade-related aspects of electronic commerce. In the future effort to engage into concrete discussion Montenegro believes that WTO members need to focus attention on a few issues that can gain consensus, including for example: principles on Consumer protection, Unsolicited Messages, Authentication and Trust Services and Electronic Contracts. Advancing on these issues would be an important step in contributing to a better integration especially of SMEs in the world economy.

Montenegro achieved a lot in this area. The Strategy for Development of Information Society of Montenegro by 2020, having the strategy for development of electronic communications as an integral part, defines the strategic directions of development in this field with the aim of meeting the EU standards set by the Digital Agenda 2020 and the Strategy for Single Digital Market.

Digital technologies help the development of economy and strengthening of national competitiveness. Fast adoption of digital technologies in economy guarantees rapid diffusion of the benefits they bring. Like the energy or traffic, the Internet has become an integral part of state infrastructure and therefore an important factor of the development of modern economy.

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Electronic communication networks and infrastructure in Montenegro make possible the implementation of state-of-the-art technologies and services. Through such networks and infrastructure, almost all electronic communication services that are provided globally, are offered to the citizens of MNE satisfying thus their current needs.

The legislative framework for electronic communications in Montenegro has been harmonized with the EU acquis. Therefore, a stabile business environment has been created for the investors, while the citizens have the possibility to select operators and quality electronic communications services, at affordable prices.

Operators' investments in recent years are significant and they are oriented toward the extension of network coverage and development of the services. Montenegro, through policies in this area, through adopted regulations of the market, has created transparent and stabile investment environment. Telecommunication development has positive impact on the improvement of overall business environment and makes Montenegro even more attractive for interested investors in other areas.

Broadband infrastructure is essential for providing e-health, e-education, e-government, e- commerce and many other e-services. Our goal is to provide available broadband internet, which will be used in business, as well as in everyday life of citizens. Particular attention in this area is dedicated to improving the coverage of suburban and rural areas, given that the equal regional development of Montenegro is indispensable, in order to overcome the so-called "Digital gap".

The number of users of electronic communications services in Montenegro is in constant growth in all segments of the market. The annual growth of mobile telephony users is 11%, and the number of fixed broadband users has increased by 17% compared to 2016, with high access speeds (above 30Mb / s) being used by about 25% of users.

The World Economic Forum in the latest Global Competitiveness Report 2016-2017, in the Network Readiness Index, positions Montenegro at 51st place among 139 countries, with the index 4.3. The Council of Foreign investor in so-called "white book 2017", proclaimed telecom and ICT sector for the one with the simplest and the most effective for investments in the country.

25. When does Montenegro plan to accept the Marrakesh Treaty to Facilitate Access to Published Works for Persons Who Are Blind, Visually Impaired or Otherwise Print Disabled, which was adopted on June 28, 2013 and entered into force on September 30, 2016?

Answer: Montenegro is considering the possibility but hasn't decided yet about joining the Marrakesh Treaty to Facilitate Access to Published Works for Persons Who Are Blind, Visually Impaired or Otherwise Print Disabled.

26. With respect to the Beijing Treaty on Audiovisual Performances, adopted on June 26, 2012, and signed by Montenegro on May 27, 2013, what are the intentions to join this instrument?

Answer: Montenegro is considering the possibility but hasn't decided yet about joining the Beijing Treaty on Audiovisual Performances.

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UNITED STATES

Questions based on the Secretariat Report (WT/TPR/S/369)

3 TRADE POLICIES AND PRACTICES BY MEASURE

Page 48, Paragraph 3.2: The Secretariat Report notes that in 2017 Montenegro aligned its tariff with that of the EU.

• Are the EU procedures contemplated to go immediately into effect on accession or will they be phased in? • Can Montenegro provide information on how the status of trade with the US might need to change once the procedures go into effect? • What is the expected impact on procedures such as the entry of goods upon EU accession?

MNE answer: In the process of EU accession Montenegro is harmonizing its legislation with the EU acquis in all areas, including trade. This process requires alignment of all national trade procedures with those of the EU.

Upon becoming the EU Member state, Montenegro will implement Union Customs Code that represents set of rules covering customs matters, including customs procedures, in trade with non- EU countries. In addition, Montenegro will also integrate into the EU Customs Union and implement its basic principles, like no customs duties at internal borders between the EU Member States and common customs duties on imports from outside the EU.

3.3.2.2.1 Food standards-setting framework

Page 81, Paragraph 3.85: The Secretariat Report states that "Montenegro's legislative system adopts and updates the relevant SPS laws and regulations to ensure compliance with the EU acquis."

• As Montenegro's regulatory and institutional frameworks are updated with respect to SPS measures in order to comply with the EU acquis, how are public comments being taken into account before adoption?

MNE answer: Considering that Montenegro is a very small and distinctive country, one of the fundamental aspects of regulatory transparency refers to openness of the regulation-making process for all concerned stakeholders through formal and informal consultations prior to and after adoption.

Montenegro finds that such consultation mechanisms have positive impacts on the efficiency of activities and improve the quality and enforceability of regulations and measures.

Formal instruments for consultation with the private sector and civil society are in place and usually involve the most important stakeholders (i.e. producers, companies, business associations, consumer groups, etc.).

There is also formal and informal dialogue with private sector and civil society. Namely, working groups are formed with representatives of state institutions, private sector and NGOs in reference to all important issues,. Moreover, when concrete problems appear, formal and informal consultations are held, depending on the topic.

General formal framework for consultation process in the preparation of policies and regulations exists in Montenegro (Decree on the procedure and manner of conducting public debate in preparation of laws, Official Gazette of Montenegro, 12/2012, from 04 February2012). Duration of public debate is 40 days. According to the Article 12 of the Decree on the procedure and manner of conducting public debate in preparation of laws, there is an obligation for each Ministry to prepare a report on public debate. This report has to be published on the website of the relevant ministry, as well as on the government portal 10 days after public debate is finished. http://www.minpolj.gov.me/rubrike/Javne_rasprave/

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Public notice and comment procedures are in place, allowing all citizen concerned or potentially affected by the regulation to provide comments before a measure is adopted.

Private sector is usually presented by the Chamber of Economy of Montenegro and interested NGOs may participate as well.

However, the Government has also set up a Council for Improvement of Business Environment, Regulatory and Structural Reforms in Montenegro and according to the official handbook for RIAs, with obligation of evaluating the impact of proposed measures and alternatives if such measures could have effects, including macroeconomic, financial, sectorial, environmental, social and administrative effects.

The assessment of the trade-related impacts is a compulsory element.

Some examples: • http://www.ubh.gov.me/vijesti/180108/OBAVJEsTENJE-Izmjene-lista-stetnih-organizama- bilja-biljnih-proizvoda-i-objekata-pod-nadzorom.html

• http://www.ubh.gov.me/vijesti/178296/Izvjestaj-Procedure-registracije-sredstava-za- zastitu-bilja.html

• http://www.ubh.gov.me/vijesti/174162/Vodic-za-dobru-higijensku-praksu-u-poslovanju- sa-hranom.html

• http://www.ubh.gov.me/vijesti/161539/U-Podgorici-predstavljen-Nacrt-nacionalnog-plana- za-odrzivu-upotrebu-pesticida.html

• How does Montenegro ensure that the appropriate risk assessments have taken into account Montenegro's particular risks to human, animal, or plant health, as well as assessments by relevant international organizations?

MNE answer: Montenegro has set up a specific national system with the existing structures for the risk analysis (risk assessment and risk management) of hazards associated with food/animal health and plant health, again having in mind limited human resources in Montenegro.

Montenegro is familiar with the fact that implementation of a SPS system based on risk analysis is strongly dependent on capacities of relevant institutions in terms of: regulatory basis, organizational structure, written policies, developed tools for risk assessment, human capacities, finances and quality management system.

Montenegro has set up a simple system which provides functional national institutions in charge of SPS issues: Ministry of Agriculture and Rural Development and the Directorate for Food Safety, Veterinary and Phytosanitary Affairs (together with inspections) and with this organization Montenegro ensures efficacy and quality of necessary services (we still have some human capacity needs).

Montenegro, based on strategic planning, financing, regulatory and enforcement strategies, respectively on the fact that Montenegro is in the phase of closing benchmarks in negotiation process with EU in negotiating Chapter 12 "Food safety, veterinary and phytosanitary policy", is implementing the EU approach to the risk assessment (relying on the risk assessments carried out by the EU) and risk management, but Montenegro also considers internationally recommended practice, and in parallel participates in the work of relevant international organizations (IPPC, OIE, Codex).

• https://www.ippc.int/en/countries/montenegro/ • https://www.ippc.int/en/news/2017-ippc-regional-workshop-for-central-and-eastern- europe-and-central-asia-successfully-held-in-georgia/

• When adopting EU legislation, please explain Montenegro's process in conducting the appropriate risk assessments relevant to their own consumer's consumption and exposure levels, in order to determine the appropriate level of protection.

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MNE answer: When adopting EU legislation, Montenegro does not conduct the risk assessments relevant to the own consumers' consumption and exposure levels, but in order to determine the appropriate level of protection, Montenegro relies on the risk assessments carried out by the EU.

According to Article 5.1 of the SPS Agreement, Montenegro uses the opportunity: "members are not required, to conduct their own risk assessment, and may base their measures on a risk assessment carried out by another Member or by relevant international organizations".

Montenegro is familiar with the fact that Members are nonetheless responsible for the appropriateness and comprehensiveness of the risk assessment on which they base a measure, which should address the risk situation actually faced by the Member imposing the measure.

• Regarding products that are banned for SPS purposes, does Montenegro have an independent risk assessment body to carry out risk assessments to justify its SPS measures, or is Montenegro relying on risk assessments carried out by the EU for these purposes?

MNE answer: Montenegro relies on risk assessments carried out by the EU.

• As new laws and regulations are promulgated in the EU, will Montenegro adopt the new laws? If so will Montenegro notify new measures to the WTO SPS Committee at a time when trading partners' comments can be taken into consideration before measures become final?

MNE answer: As new laws and regulations are promulgated in the EU, Montenegro will adopt these new laws according to the Programme of Accession to the EU.

Montenegro will notify new laws and regulations to the WTO SPS Committee according to the SPS Agreement. Members are aware that they have a chance (trading partners) to give comments even when EU submits notification, therefore all comments of Members are incorporated in the EU text and taken into consideration before measures become final in the EU and after that they become part of the legislation of Montenegro.

• The EU has shifted to a hazard based approach for pesticide regulation. Will Montenegro conduct risk assessments prior to establishing its national pesticide standards, including basing its maximum residue levels on risk assessments, as obligated under the WTO SPS Agreement?

MNE answer: Montenegro reminds that even before accession to the WTO, it had legislation based on the EU approach for many SPS areas, and "EU has shifted to a hazard based approach for pesticide regulation" is not new approach. Once again, since Montenegro is a very small and distinctive country, this also means that human resources (lacking the people of specific professions) are limited and we are not able to develop full risk assessments in many areas, not only for pesticide regulation.

Page 82, Paragraph 3.85: The Secretariat Report states, "The 2015 amendments to the 2007 Law were mainly aimed at establishing a more efficient system with clearly defined competences and responsibilities, simplifying the chain of command, achieving better coordination and communication, and facilitating the training of employees." The United States notes that since the 2011 accession of Montenegro to the WTO, the country has not notified any SPS measures under Article 7 of the SPS Agreement.

• Will Montenegro notify its traceability system for genetically modified organisms to the WTO prior to introducing the new system in 2018?

MNE answer: Law on GMO (OG No. 22/2008) is in force in Montenegro and that is the same Law adopted during the WTO negotiation process.

Montenegro will notify new laws and regulations to the WTO SPS Committee according to the SPS Agreement.

• Will Montenegro notify the international trading community of already established and pending SPS measures?

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MNE answer: Montenegro has sent 50 notifications in 2018, according to the Programme of Accession to the EU. As new laws and regulations are promulgated in the EU, Montenegro will adopt these new laws and notify new laws and regulations to the WTO SPS Committee according to the SPS Agreement. Once again: Members are aware that they have a chance (trading partners) to give comments even when EU submits notification, therefore all comments of Members are incorporated in the EU text and taken into consideration before measures become final in the EU and after that they become part of the legislation of Montenegro.

Page 82-83, Paragraph 3.88: The Secretariat notes: "Since 2015, MARD remains responsible for regulating pesticide residues in foodstuffs, in accordance with the maximum residue levels (MRLs) set out in the Law on Food Safety, the Law on Plant Protection Products… and the 2015 Regulation on maximum residue levels (MRLs) of pesticides in or on plants, plant products, food or feed.

• Based on para 3.85, Montenegro is aligning its SPS standards with the EU, which has shifted to a hazard based approach for pesticide regulation. Will MARD conduct risk assessments prior to establishing pesticide standards, including basing pesticide maximum residue levels and import tolerances on risk assessments, as obligated under the WTO SPS Agreement?

MNE answer: Montenegro reminds that even before the WTO accession it had legislation based on the EU approach for many SPS areas, and "EU has shifted to a hazard based approach for pesticide regulation" is not a new approach. Once again, since Montenegro is a very small and distinctive country, this also means that human resources (lack offing the people of specific professions) are limited and we are not able to develop full risk assessments in many areas not only for pesticide regulation.

Page 83, Paragraph 3.89: The Secretariat Report states, "Since 2009, Montenegro has conducted annual monitoring of pesticides in line with EU recommendations." Montenegro has stated they adopt and update laws and regulations with the EU acquis.

• Does Montenegro plan to adopt EU legislation identifying criteria for endocrine disruptors? If so, has Montenegro considered less trade restrictive then reasonable available, taking into account technical and economic feasibility, in order to achieve the appropriate level of SPS protection for this criteria?

MNE answer: Montenegro reminds that even before the WTO accession it had legislation based on the EU approach for many SPS areas. Once again, since Montenegro is a very small and distinctive country, this also means that human resources (lacking people of specific professions) are limited and Montenegro is not able to develop its own approach system, Montenegro will rely on the EU approach.

• When adopting EU legislation, will Montenegro please explain their process in conducting the appropriate risk assessments relevant to their own consumers' consumption and exposure levels, in order to determine their appropriate level of protection?

3.3.2.2.3 Transparency

Page 88, paragraph 3.104: The Secretariat Report states Montenegro plans to "address the issue of notification in this area [SPS] in the course of 2018."

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• Please explain the process by which Montenegro will notify SPS measures to the WTO.

MNE answer: Process by which Montenegro will notify SPS measures will be in accordance with the WTOSPS Agreement.

• Will Montenegro notify all updated measures to the WTO (for example all legislation and regulations that have been updated in order to align with the EU acquis)?

MNE answer: Montenegro has sent 50 notifications in 2018, according to the Programme of Accession to the EU.

Montenegro can notify all updated measures if is necessary and all legislation and regulations that have been updated in order to align with the EU acquis before 2018.

All members are aware that they have a chance (trading partners) to give comments even when EU submits notification, therefore all comments of Members are incorporated in the EU text and taken into consideration before measures become final in the EU and after that they become part of the legislation of Montenegro.

• Has Montenegro established a fully functioning enquiry point and national notification authority?

MNE answer: Montenegro has established a fully functioning enquiry point and national notification authority.

• Have workshops or trainings been planned to develop the capacity building needed for the WTO SPS enquiry point?

MNE answer: Montenegro had workshop in 2017 for capacity building and in 2018 representative of Montenegro will participate in the workshops organized by WTO.

3.3.6 Intellectual property rights

Page 103, Paragraph 3.145: The Secretariat Report indicates that Montenegro has taken number steps to "align its laws and regulations with the WTO TRIPS Agreement and European Union standards . . . ." Footnote 266 cites a 2012 European Commission Screening Report of Montenegro.

• As noted in our similar question in the Government Report, please provide a brief summary of the copyright law provisions that were amended.

MNE answer: The most important novelties in the Law on Amendments to the Law on Copyright and Related Rights are regulating issues related to the use of orphan works, increasing terms of protection of the rights of phonogram producers from 50 to 70 years, more detailed regulating sui generis right of makers of databases and introducing Community exhaustion of rights from the date of accession of Montenegro to the European Union. This law determines who, when, how and for what purposes may use orphan works, the end of orphan works status and the issue of fair compensation for their use. Law also prescribes collective management of rights on voluntary basis with extended effect, as well as granting multi-territorial licenses for online rights in musical works. Law prescribes possibility for right holder whose copyright or related rights has been infringed to file a claim requesting an injunction against an intermediary whose service was used by a third party to infringe his right.

• In addition, does Montenegro intend to further amends to its copyright law in the next year or two?

MNE answer: Yes, Montenegro plans to further amend Copyright Law, during next year, regarding collective management of copyright.

Page 104, Paragraph 3.147: The Secretariat Report identifies of number of international IP conventions that Montenegro has joined since 2012. Does Montenegro plan to join the WIPO

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Marrakesh Treaty to Facilitate Access to Published Works for Persons Who Are Blind, Visually Impaired or Otherwise Print Disabled (2013)?

MNE answer: Montenegro is considering possibility but hasn't decided yet about joining the WIPO Marrakesh Treaty to Facilitate Access to Published Works for Persons Who Are Blind, Visually Impaired or Otherwise Print Disabled.

Page 104, Paragraph 3.149: The Secretariat Report mentions there is "[n]o separate agency . . . in charge of copyright." The Intellectual Property Office of Montenegro (IPOM) handles registration of "professional segments on copyright and related rights." Please confirm that this phrase relates to the oversight and administration of the collective management system.

MNE answer: Yes, we confirm. In this paragraph it is stated that "The Intellectual Property Office of Montenegro (IPOM), an independent administrative body established in 2008 and supervised by the MEK, is responsible for registration of industrial property rights, namely trademarks, patents, industrial designs, geographical indications and designations of origin, and topographies of semiconductor products, including professional segments on copyright and related rights (licenses for collective management organizations and supervision)." This means that IPOM is in charge for issuing licenses to collective management organizations, supervision over the work of collective management organizations and administration of the collective management system.

3.3.6.1 Industrial property

Page 104, Paragraph 3.149: The Secretariat Report indicates that Montenegro's law contains penal provisions, such as fines and imprisonment for patent infringement. Have there been any criminal cases in Montenegro for patent infringement?

MNE answer: There have been no criminal cases for patent infringement in Montenegro during period 2014-2017. We have no statistics for the period before 2014.

3.3.6.1.1 Patents

Page 105, paragraph 3.152: The Secretariat Report indicates that compulsory licenses may be granted "on the grounds of lack or insufficiency of exploitation of a patent, to any person filing a request, if the patent owner has not exploited the invention on the territory of Montenegro on reasonable terms, or has not made effective and serious preparations for its exploitation." Could you please explain whether Montenegro's laws provide for safeguards against prejudicing legitimate interests of the patent owners, as set forth in Article 31(a)-(l) of the TRIPS Agreement. Please explain how these provisions are implemented.

MNE answer: Article 31(a)-(l) of the TRIPS Agreement has been implemented is several articles of Patent law. This law prescribes that compulsory license may be granted after considering the merits of each individual case, upon a request of the interested person. The interested person shall be required to prove that he has made reasonable efforts, before filing the request, to obtain authorization from the right-holder to use the protected invention on reasonable commercial terms and conditions and that he has not received such authorization within a reasonable period of time, except in the event of public interest in which the right-holder shall be notified of the compulsory license grant proceedings as soon as possible. The compulsory license may also be granted if the exploitation of the protected invention is necessary for the fulfilment of public interest (the protection of public health and providing food, and the protection of public interests in the fields of vital significance for socio-economic and technological development) or if the protected invention is used in a manner considered to be contrary to the principles of free competition. The scope and duration of a compulsory license shall be limited to the purpose for which it has been granted. A compulsory license shall not be exclusive. A compulsory license may be assigned only with the company or a part thereof, where it is used. A compulsory license shall predominantly be granted for the supply of the domestic market. A compulsory license may be terminated, subject to adequate protection of the legitimate interest of the persons so authorized, if and when circumstances that have led to its grant cease to exist and are unlikely to recur. Upon substantiated request, competent authority shall re-examine the further existence of these circumstances. The holder of a compulsory license shall be required to pay the patent holder a mutually agreed remuneration. In the absence of an agreement on the amount and method of

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- 89 - payment of such remuneration, the competent court shall decide, taking into account the merits of each individual case and the economic value of the compulsory license.

Compulsory licenses granted by competent authorities shall be final and an administrative dispute against such licenses may be instituted before the competent court.

Against judgments on the amount of remuneration, an appeal may be filed in accordance with the Law on Courts.

If a compulsory license in public interest has been granted in order to rectify anti-competitive practice, when determining the total amount of remuneration, the need to remedy such practice shall be taken into account.

If it is likely that the circumstances that led to distortion of the competition in the market re-occur, the competent authority may reject the termination of a compulsory license in the public interest.

If compulsory license has been granted when the commercial use of an invention that has been subsequently protected in the name of another person is not possible, without the use of the protected invention in whole or in part, an interested person may only be the holder of the patent for subsequently protected invention, provided that: 1) the subsequently protected invention involves a technical advancement of special economic significance in relation to the invention protected by the first patent; and that 2) the holder of the first patent is entitled, on reasonable terms, to a cross-license to use the subsequent invention. Authorization for the use of the invention protected by the first patent shall be non-transferable except in the case of simultaneous transfer of the subsequent patent.

Page 105, Paragraph 3.152: The Secretariat Report indicates that a compulsive license may be issued for "a patent necessary for the manufacture and sale of pharmaceutical products which are intended for export to countries in need of such products to address public health issues." Please explain how Montenegro meets the obligations of the "exporting Member" under paragraph 6 of Doha Declaration and Decision of the General Council of 30 August 2003 (WT/L/540 and Corr.1, 1 September 2003).

MNE answer: The Patent law prescribes that when deciding on the issuance of a compulsory license (for a patent and/or supplementary protection certificate necessary for the manufacture and sale of pharmaceutical products, when such products are intended for export to eligible importing countries in need of such products in order to address public health problems) what shall specifically be taken into consideration is the need to implement the Decision of the General Council of WTO of 30 June 2003 on the implementation of paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health of 14 November 2001.

The Patent law prescribes that the importing country must make a notification to the Council for TRIPS of its intention to use the system as an importing country, whether it will use it as a whole or in a limited way.

An application for the issuance of a compulsory license contains, among others, name of the pharmaceutical product which the applicant intends to manufacture and sell under the compulsory license, the quantity of the pharmaceutical product which the applicant intends to manufacture under a compulsory license, the importing country or countries and evidence of prior negotiations with the right-holder. In deciding on the application for the issuance of a compulsory license the Government is obliged to verify in particular whether each of the importing countries cited in the request, which is a member of the WTO, has made a notification to the WTO in accordance with the Decision.

The quantity of product that, based on the compulsory license, may be manufactured shall not exceed the quantity necessary to satisfy the needs of the importing country or importing countries cited in the application.

The compulsory license shall order that products manufactured under a compulsory license shall be clearly identified through special labels and markings as products manufactured under a compulsory license. These products shall be distinguished from products produced by the right-

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- 90 - holder through special packaging and/or special colors or shapes, if possible, and if there is no significant impact on price.

The compulsory license shall order the licensee, that prior to shipment to the importing country, post on its website, which shall be communicated to the Government, the following information: 1) the quantities of the product and the importing countries to which the products are delivered under the compulsory license; 2) the distinguishing features in product labelling.

The Government shall notify the Council for TRIPS of its final decisions on issuing compulsory licenses for export to countries with public health problems, the conditions under which they were issued, as well as of their termination and modification within 30 days of the final decision on issuing a compulsory license, or its termination and modification. This notice shall include:

1) the name and address or the name and registered office of the licensee; 2) the product concerned; 3) the quantity to be supplied; 4) the importing country; 5) the duration of the license; 6) the website address of the licensee on which prescribed information have been posted.

Page 105, Paragraph 3.152: The Secretariat Report indicates that compulsory licenses may be granted "on the grounds of lack or insufficiency of exploitation of a patent, to any person filing a request, if the patent owner has not exploited the invention on the territory of Montenegro on reasonable terms, or has not made effective and serious preparations for its exploitation." Please explain whether Montenegro's laws provide for safeguards against prejudicing legitimate interests of the patent owners, as set forth in Article 31(a)-(l) of the TRIPS Agreement. Please explain how these provisions are implemented.

MNE answer: The same question like the second previous. Please see the answer.

3.3.6.2 Copyright and related rights

Page 110, Paragraph 3.174: The Secretariat Report describes orphan works as "books, journals, newspaper, magazines and films produced by right holders who are not identified or cannot be located or contained to obtain copyright permissions." Please provide information on what, if any, outreach must be made to determine whether a copyright owner can be located or contacted before a work may be considered an orphan work. Further, please provide information on whether there is a process by which a work must be officially declared an orphan work before it may be used as outlined in the 2016 amendments.

MNE answer: In accordance with the Copyright Law, as amended in 2016, an orphan work shall be the work or a phonogram in which the right holder is not identified or, if one or more of right holders are identified, none is located in the diligent search, carried out and recorded in accordance with the provisions of this Law.

An orphan works may be used by publicly accessible libraries, educational establishments and museums, archives, film and audio heritage institutions and public-service broadcasting organizations established in Montenegro in order to carry out the work of public interests.

The above mentioned institutions and organizations shall, in order to establish whether a work or phonogram is an orphan work, prior to their use, ensure that a diligent search is carried out in respect of each work or other protected subject-matter, by consulting the appropriate sources of data for the specific category of works and other protected subject matters.

The diligent search shall be carried out:

1) by consulting the sources which are available in Montenegro; 2) by consulting the publicly accessible online database, established and managed by EUIPO; 3) where it is not possible to identify or locate the right holders by consulting above mentioned sources, and when there is evidence to suggest that relevant information on right holders

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may be found in other countries, by consulting the sources of information available in those countries.

The above mentioned institutions and organizations shall maintain records on diligent searches carried out and provide the competent authority (IP Office) with the following information:

1) the results of the diligent searches that it carried out and which have led to the conclusion that a work or a phonogram is considered an orphan work; 2) the use of the orphan work; 3) any changes of the orphan work status of works or phonograms that these institutions and organizations use; 4) the contact information of the institution and organization concerned (name, address, telephone number, fax number, e-mail address).

These information, except the information available in the EUIPO, shall be recorded in the publicly accessible online database. The database shall be established, managed and published on its web page by IP Office.

Page 111, Paragraph 3.178: The Secretariat Report indicates that IPOM's Department for Copyright and Related Rights handled copyright registration, supervision of the collective management organizations, and international cooperation. We have several questions:

• Please provide more details on the copyright registration function (such as what legal benefits accrue for presumably voluntary registration, how many registration claims are received and issued each year).

MNE answer: Copyright law prescribes that in order to secure evidence of their copyright and related rights right holders may deposit copies of their protected matter with the competent authority (IP Office). The competent authority shall keep the register of deposited copies by categories of copyright works and by subject of related rights. The rights with respect to deposited protected matter shall belong to the persons who are entered in the register as their holders until proven otherwise. A conscientious person who has infringed somebody's copyright or related right relying on the accuracy of register data shall not be liable for any damages. In 2014 there were 30, in 2015 and 2016 22, and in 2017 27 claims for the deposit and entering into the Register. The number of issued certificates was 29 in 2014, 22 in 2015, 19 in 2016 and 27 in 2017.

• Can documents (such as transfers and assignments of copyrights) be recorded with IPOM? If so, what legal benefits accrue?

MNE answer: No, these documents cannot be recorded with IPOM.

• The report notes the "administrative capacity in the area of copyright could be further strengthened," and efforts to assist with the issue of understaffing were "taken in 2014 under the Rule on Internal Organization and Systematic Job Plan." Please describe what efforts were undertaken in and since 2014. Are there any plans to increase staffing (from two people as of November 2017) and provide any other financial reports to improve the operation of this small office?

MNE answer: In 2014, 2015, 2016 and 2017 – According to the Rule book on internal organization and systematization there were foreseen 2 work posts (senior advisor I and senior advisor II), which are covered.

In 2018 - According to the new Rule book on internal organization and systematization, Department for copyright and related rights is administratively strengthened and therefore three officials are being foreseen to deal with copyright issues, namely: senior advisor I, senior advisor II and senior advisor III.

Human Resources planning for 2018 identifies covering next work posts: Deputy Director for the Department for copyright and related rights, international cooperation and IT services as well as the Head for the Department for copyright and related rights and international cooperation.

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By the EU Accession Program for Montenegro (2018-2020) as regard administrative capacities it is planned to fill the following work posts: Head for the Department for copyright and related rights and international cooperation, senior advisor II and senior advisor III.

Based on the above-mentioned, it could be concluded that the field of copyright and related rights is much more reinforced in comparison with the previous period. Namely, in the previous period there were foreseen only 2 work posts, but now three positions are defined, for which necessary budget means are provided and which covering is planned by relevant documents, respectively by the Human Resources planning for 2018 and EU Accession Program for Montenegro (2018-2020).

Questions based on the Government Report (WT/TPR/G/369)

2 ECONOMIC POLICIES 2.6 Investment policy

Page 11, Paragraphs 2.51-2.52: The Government Report mentions free zones with cost reductions and other benefits. Are U.S. firms and others that are subject to non-preferential rules and tariffs eligible to use such zones?

MNE answer: In the free zones, all the companies, regardless of their seat, can operate in accordance with the Law on Free Zones and other laws relevant for companies operating in the free zone.

3 TRADE POLICY 3.7 Customs system

Pages 21-22, Paragraphs 3.54-3.55: The Government Report mentions that duties are calculated and charged at a percentage rate in relation to the value of goods (ad valorem) and in a certain amount per unit of measure for the mass of goods (specific customs duty).

• Can Montenegro supply any supporting data of this process?

MNE answer: Article 4 of the Customs Tariff Law (Official Gazette of Montenegro, No. 28/12) prescribes that the customs duty shall be calculated and collected on the goods imported into the customs territory of Montenegro applying the customs rate specified in the Customs Tariff (column 4 - Rate) on the customs value of goods (ad valorem customs duty).

Exceptionally, for the goods for which the Customs Tariff specifies the amount of customs duty per unit of measure (specific customs duty), the amount of customs duty per unit of measure calculated for the quantity of goods being imported shall be added to the amount of customs duty, referred to in paragraph 1 (above).

• In addition, would a potential EU accession affect the treatment of non-preferential trade?

MNE answer: Accession of Montenegro to the EU will affect the treatment of non-preferential trade. Namely, on the date of accession to the European Union, Montenegro will take over all Union trade policies, and the Customs Administration will be in obligation to determine non- preferential origin for those products that are subject to trade policy measures.

In addition to aligning legislation with the EU acquis in the area of non-preferential origin, the Customs Administration will ensure proper application of the legal framework through further overall strengthening of administrative capacities and further training of customs officials in the area of non-preferential origin of goods.

Page 31, Paragraph 3.114: The Government Report references 2016 amendments to the Law on Copyright and Related Rights that have raised "the status of authors and holders of related rights . . . to a higher level." Can Montenegro provide a brief summary of the amended copyright law provisions?

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- 93 - generis right of makers of databases and introducing Community exhaustion of rights from the date of accession of Montenegro to the European Union. This law determines who, when, how and for what purposes may use orphan works, the end of orphan works status and the issue of fair compensation for their use. Law also prescribes collective management of rights on voluntary basis with extended effect, as well as granting multi-territorial licenses for online rights in musical works. Law prescribes possibility for right holder whose copyright or related rights has been infringed to file a claim requesting an injunction against

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UNITED STATES FOLLOW-UP QUESTIONS

Follow-up questions based on the Secretariat Report (WT/TPR/S/369)

3.3.2.2.1 Food standards-setting framework • Will Montenegro notify the international trading community of already established and pending SPS measures?

Follow Up: In reply to U.S. question “Will Montenegro notify the international trading community of already established and pending SPS measures?”, Montenegro replied that it has notified 50 SPS measures to the WTO in 2018. In reviewing the WTO SPS Information Management System (IMS) database, no notifications from Montenegro are documented in the WTO IMS. We would encourage Montenegro to contact the WTO Secretariat to ensure that its SPS notifications are entered into the system so that WTO Members are able to review and comment on notifications submitted.

MNE answer: Yes, it is correct that Montenegro has submitted SPS notifications to the WTO Secretariat. However, in the meanwhile there were some adjustments with the WTO Secretariat and therefore they haven’t been documented in the WTO IMS yet. Once they are finalized, it will be available in the system so that WTO Members are able to review and comment.

3.3.6.2 Copyright and related rights • Please provide more details on the copyright registration function (such as what legal benefits accrue for presumably voluntary registration, how many registration claims are received and issued each year).

Follow up: Could more detail be provided about under what circumstances a “conscientious person” who infringed shall not be liable for damages? Has there been any litigation involving cases where an infringer relied on copyright registration data?

MNE answer: Montenegrin Copyright law only prescribes that conscientious person who has infringed somebody's copyright or related right relying on the accuracy of register data shall not be liable for any damages. This law doesn't contain more detailed provisions on this issue. There were no litigation involving cases where an infringer relied on copyright registration data.

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