Article 33. Right to Regulate and Levels of Protection

1. Recognising the right of each Party, subject to the provisions of this Agreement, to establish its own levels of environmental and labour protection, and to adopt or modify accordingly its relevant laws and policies, each Party shall seek to ensure that its laws, policies and practices provide for and encourage high levels of environmental and labour protection, consistent with standards, principles and agreements referred to in Articles 35 and 36, and shall strive to further improve the levels of protection provided for in those laws and policies.

2. The Parties recognise the importance, when preparing and implementing measures related to the environment and labour conditions that affect trade and investment between them, of taking account of scientific, technical and other information, and relevant international standards, guidelines and recommendations.

Article 34. Upholding Levels of Protection In the Application and Enforcement of Laws, Regulations or Standards

1. A Party shall not fail to effectively enforce its environmental and labour laws, regulations or standards in a manner affecting trade or investment between the Parties.

2. Subject to Article 33, a Party shall not

(a) weaken or reduce the levels of environmental or labour protection provided by its laws, regulations or standards with the sole intention to encourage investment from another Party or to seek or to enhance a competitive trade advantage of producers or service providers operating in its territory; or

(b) waive or otherwise derogate from, or offer to waive or otherwise derogate from, such laws, regulations or standards in order to encourage investment from another Party or to seek or to enhance a competitive trade advantage of producers or service providers operating in its territory.

Article 35. International Labour Standards and Agreements

1. The Parties recall the obligations deriving from membership of the ILO and the ILO Declaration on Fundamental Principles and Rights at Work and its Follow-up adopted by the International Labour Conference at its 86th Session in 1998, to respect, promote and realise the principles concerning the fundamental rights, namely:

(a) the freedom of association and the effective recognition of the right to collective bargaining;

(b) the elimination of all forms of forced or compulsory labour; (c) the effective abolition of child labour; and

(d) the elimination of discrimination in respect of employment and occupation.

2. The Parties reaffirm their commitment, under the Ministerial Declaration of the UN Economic and Social Council on Full Employment and Decent Work of 2006, to recognising full and productive employment and decent work for all as a key element of sustainable development for all countries and as a priority objective of international cooperation, and to promoting the development of international trade in a way that is conducive to full and productive employment and decent work for all.

3. The Parties recall the obligations deriving from membership of the ILO to effectively implementing the ILO Conventions which they have ratified and to make continued and sustained efforts towards ratifying the fundamental ILO Conventions as well as the other Conventions that are classified as "up-to-date" by the ILO.

4. The violation of fundamental principles and rights at work shall not be invoked or otherwise used as a legitimate comparative advantage. Labour standards shall not be used for protectionist trade purposes.

Article 36. Multilateral Environmental Agreements and Environmental Principles

The Parties reaffirm their commitment to the effective implementation in their laws and practices of the multilateral environmental agreements to which they are party, as well as their adherence to environmental principles reflected in the international instruments referred to in Article 31.

Article 37. Promotion of Trade and Investment Favouring Sustainable Development

1. The Parties shall strive to facilitate and promote foreign investment, trade in and dissemination of goods and services beneficial to the environment, including environmental technologies, sustainable renewable energy, energy-efficient and eco-labelled goods and services, including through addressing related non-tariff barriers.

2. The Parties shall strive to facilitate and promote foreign investment, trade in and dissemination of goods and services that contribute to sustainable development, including goods and services that are the subject of schemes such as fair and ethical trade.

3. For the purposes of paragraphs 1 and 2, the Parties agree to exchange views and may consider, jointly or bilaterally, cooperation in this area.

4. The Parties shall encourage cooperation between enterprises in relation to goods, services and technologies that contribute to sustainable development and are beneficial to the environment.

Article 38. Cooperation In International Fora

The Parties shall strive to strengthen their cooperation on trade- and investment- related labour and environmental issues of mutual interest in relevant bilateral, regional and multilateral fora in which they participate.

Article 39. Implementation and Consultations

1. The Parties shall designate the administrative entities which shall serve as contact points for the purpose of implementing this Chapter.

2. A Party may, through the contact points referred to in paragraph 1, request expert consultations or consultations within the Joint Committee regarding any matter arising under this Chapter. The Parties shall make every attempt to arrive at a mutually satisfactory resolution of the matter. Where relevant, and subject to the agreement of the Parties, they may seek advice of the relevant international organisations or bodies.

3. If a Party considers that a measure of another Party does not comply with the obligations under this Chapter, it may have recourse to consultations according to paragraphs 1 to 3 of Article 42.

Article 40. Review

The Parties shall periodically review in the Joint Committee progress achieved in pursuing the objectives set out in this Chapter, and consider relevant international developments to identify areas where further action could promote these objectives.

Chapter 7. Institutional Provisions

Article 41. Joint Committee

1. The Parties hereby establish the EFTA-Montenegro Joint Committee. It shall be composed of representatives of the Parties which shall be headed by senior officials.

2. The Joint Committee shall:

(a) supervise and review the implementation of this Agreement, inter alia by means of a comprehensive review of the application of the provisions of this Agreement, with due regard to any specific reviews provided for in this Agreement;

(b) keep under review the possibility of further removal of barriers to trade and other restrictive measures concerning trade between the EFTA States and Montenegro;

(c) oversee the further development of this Agreement;

(d) supervise the work of any sub-committees and working groups established under this Agreement;

(e) endeavour to resolve disputes that may arise regarding the interpretation or application of this Agreement; and

(f) consider any other matter that may affect the operation of this Agreement.

3. The Joint Committee may decide to set up such sub-committees and working groups as it considers necessary to assist it in accomplishing its tasks. Except where otherwise provided for in this Agreement, the sub-committees and working groups shall work under a mandate established by the Joint Committee.

4. The Joint Committee may take decisions as provided for in this Agreement. On other matters the Joint Committee may make recommendations.

5. The Joint Committee shall take decisions and make recommendations by consensus.

6. The Joint Committee shall meet whenever necessary upon mutual agreement but normally every two years. Its meetings shall be chaired jointly by one of the EFTA States and Montenegro. The Joint Committee shall establish its rules of procedure.

7. Each Party may request at any time, through written notice to the other Parties, that a special meeting of the Joint Committee be held. Such a meeting shall take place within 30 days from the date of receipt of the request, unless the Parties agree otherwise.

8. The Joint Committee may decide to amend the Annexes to this Agreement, including their Appendices. Subject to paragraph 9, the Joint Committee may set a date for the entry into force of such decisions.

9. If a representative of a Party in the Joint Committee has accepted a decision subject to the fulfilment of constitutional requirements, the decision shall enter into force on the date the last Party notifies that its internal requirements have been fulfilled, unless the decision itself specifies a later date. The Joint Committee may decide that the decision shall enter into force for those Parties that have fulfilled their internal requirements, provided that Montenegro is one of those Parties. A Party may apply a decision of the Joint Committee provisionally until such decision enters into force for that Party, subject to its constitutional requirements.

Chapter 8. Dispute Settlement

Article 42. Consultations

1. In case of any divergence with respect to the interpretation, implementation and application of this Agreement, the Parties shall make every attempt through cooperation and consultations to arrive at a mutually satisfactory solution.

2. A Party may request in writing consultations with any other Party regarding any actual or proposed measure or any other matter that it considers might affect the operation of this Agreement. The Party requesting consultations shall at the same time notify the other Parties in writing thereof and supply all relevant information.

3. The consultations shall take place in the Joint Committee if any of the Parties so requests within 20 days from the date of receipt of the notification referred to in paragraph 2, with a view to finding a commonly acceptable solution.

4. If the Party to which a request is made in accordance with paragraph 2 does not reply within ten days or does not enter into consultations within 20 days from the date of receipt of the request, the Party making the request is entitled to request the establishment of an arbitration panel in accordance with Article 43.

Article 43. Arbitration

1. Disputes between the Parties relating to the interpretation of rights and obligations under this Agreement, which have not been settled through direct consultations or in the Joint Committee within 60 days from the date of receipt of the request for consultations, may be referred to arbitration by the complaining Party by means of a written request to the Party complained against. A copy of this request shall be communicated to all other Parties so that they may determine whether to participate in the arbitration.

2. Where more than one Party requests the establishment of an arbitration panel relating to the same matter, or where the request involves more than one Party complained against, a single arbitration panel should, whenever feasible, be established to consider such disputes (2).

3. A Party that is not a party to the dispute shall be entitled, on delivery of a written request to the parties to the dispute, to make written submissions to the arbitration panel, receive written submissions, including annexes, from the parties to the dispute, attend hearings and make oral statements.

4. The arbitration panel shall comprise three members, who shall be nominated in accordance with the "Optional Rules for Arbitrating Disputes between Two States of the Permanent Court of Arbitration", effective 20 October 1992 (hereinafter referred to as the "Optional Rules").

5. The arbitration panel shall examine the matter referred to it in the request for the establishment of an arbitration panel in light of the provisions of this Agreement applied and interpreted in accordance with the rules of interpretation of public international law. The ruling of the arbitration panel shall be final and binding upon the parties to the dispute. Any ruling of the arbitration panel shall be made public, unless the parties to the dispute agree otherwise.

6. The language of any proceedings shall be English. The hearings of the arbitration panel shall be open to the public, unless the parties to the dispute agree otherwise. Each Party shall treat as confidential the information submitted by any other Party to the arbitration panel which that Party has designated as confidential.

7. There shall be no ex parte communications with the arbitration panel concerning matters under its consideration.

8. The ruling of the arbitration panel shall be rendered within 180 days of the date on which the presiding arbitrator of the panel was appointed. This period may be extended by a maximum of 90 days, if the parties to the dispute so agree.

9. The expenses of the arbitration panel, including the remuneration of its members, shall be borne by the parties to the dispute in equal shares.

10. Unless otherwise specified in this Agreement or agreed between the parties to the dispute, the Optional Rules shall apply, mutatis mutandis.

Article 44. Implementation of the Ruling

1. The Party complained against shall promptly comply with the ruling of the arbitration panel. If it is impracticable to comply immediately, the parties to the dispute shall endeavour to agree on a reasonable period of time to do so. In the absence of such agreement within 30 days from the date of the ruling, either party to the dispute may, within ten days from the expiration of such period, request the original arbitration panel to determine the length of the reasonable period of time.

2. The Party concerned shall notify in writing the other party to the dispute of the measure adopted in order to implement the ruling.

3. If the Party concerned fails to comply with the ruling within a reasonable period of time and the parties to the dispute have not agreed on any compensation, the other party to the dispute may, until the ruling has been properly implemented or the dispute has been otherwise resolved, and subject to a prior notification of 30 days, suspend the application of benefits granted under this Agreement, but only equivalent to those affected by the measure that the arbitration panel has found to violate this Agreement.

4. Any dispute regarding the implementation of the ruling or the notified suspension shall be decided by the original arbitration panel upon request of either party to the dispute before suspension of benefits can be applied. The arbitration panel may also rule on the conformity with the ruling of any implementing measures adopted after the suspension of benefits and whether the suspension of benefits should be terminated or modified. The ruling of the arbitration panel under this paragraph shall normally be given within 45 days from the date of receipt of the request.

Chapter 9. Final Provisions

Article 45. Fulfilment of Obligations

The Parties shall take any general or specific measures required to fulfil their obligations under this Agreement.

Article 46. Annexes

The Annexes to this Agreement, including their Appendices, are an integral part thereof.

Article 47. Evolutionary Clause

The Parties undertake to review this Agreement in light of further developments in international economic relations, inter alia in the framework of the WTO, and to examine in this context and in light of any other relevant factor the possibility of further developing and deepening their cooperation under this Agreement and of extending it to areas not covered therein. The Joint Committee shall regularly examine this possibility and, where appropriate, make recommendations to the Parties, particularly with a view to opening negotiations.

Article 48. Amendments

1. The Parties may agree on any amendment to this Agreement. Amendments to this Agreement other than those referred to in paragraph 8 of Article 41 shall be submitted to the Parties for ratification, acceptance or approval. Unless otherwise agreed by the Parties, amendments shall enter into force on the first day of the third month following the deposit of the last instrument of ratification, acceptance or approval.

2. The text of the amendments as well as the instruments of ratification, acceptance or approval shall be deposited with the Depositary.

Article 49. Accession

1. Any State becoming a member of the European Free Trade Association may accede to this Agreement, provided that the Joint Committee approves its accession, on terms and conditions to be agreed upon by the Parties. The instrument of accession shall be deposited with the Depositary.

2. In relation to an acceding State, this Agreement shall enter into force on the first day of the third month following the deposit of its instrument of accession, or the approval of the terms of accession by the existing Parties, whichever is later.

Article 50. Withdrawal and Expiration

1. A Party may withdraw from this Agreement by means of a written notification to the Depositary. The withdrawal shall take effect six months after the date on which the notification is received by the Depositary.

2. On the day of accession of Montenegro to the European Union, this Agreement shall, ipso facto, cease to be effective.

3. Any EFTA State which withdraws from the Convention establishing the European Free Trade Association shall, ipso facto, on the same day as the withdrawal takes effect, cease to be a Party to this Agreement.

Article 51. Entry Into Force

1. This Agreement is subject to ratification, acceptance or approval in accordance with the respective constitutional requirements of the Parties. The instruments of ratification, acceptance or approval shall be deposited with the Depositary.

2. This Agreement shall enter into force on 1 July 2012 in relation to those Parties which have deposited their instruments of ratification, acceptance or approval, or notified provisional application to the Depositary, at least two months before that date, and provided that at least one EFTA State and Montenegro are among them.

3. In case this Agreement does not enter into force on 1 July 2012, it shall enter into force on the first day of the third month after at least one EFTA State and Montenegro have deposited their instruments of ratification, acceptance or approval, or notified provisional application to the Depositary.

4. In relation to an EFTA State depositing its instrument of ratification, acceptance or approval after this Agreement has entered into force, this Agreement shall enter into force on the first day of the third month following the deposit of its instrument of ratification, acceptance or approval.

5. If its constitutional requirements permit, a Party may apply this Agreement provisionally pending ratification, acceptance or approval by that Party. Provisional application of this Agreement shall be notified to the Depositary.

Article 52. Depositary

The Government of Norway shall act as Depositary.

Conclusion

IN WITNESS WHEREOF the undersigned, being duly authorised thereto, have signed this Agreement.

Done at Geneva, this 14th day of November 2011, in one original in the English language. The Depositary shall transmit certified copies to all the Parties.

For Iceland

For Montenegro

For the Principality of Liechtenstein

For the Kingdom of Norway

For the Swiss Confederation

Attachments

PROTOCOL AMENDING THE FREE TRADE AGREEMENT BETWEEN THE EFTA STATES AND MONTENEGRO

Iceland, the Principality of Liechtenstein, the Kingdom of Norway, the Swiss Confederation and Montenegro, hereinafter each individual State referred to as a "Party" or collectively referred to as the "Parties",

Recalling their intention to participate actively in the process of economic integration in the Euro-Mediterranean region, and expressing their readiness to cooperate in seeking ways and means to strengthen this process;

Recalling that the Pan-Euro-Mediterranean system of cumulation of origin established by the European Union, the EFTA States, the People's Democratic Republic of Algeria, the Arab Republic of Egypt, the State of Israel, the Hashemite Kingdom of Jordan, the Republic of Lebanon, the Kingdom of Morocco, the Syrian Arab Republic, the Republic of Tunisia, the PLO for the benefit of the Palestinian Authority of the West Bank and the Gaza Strip, the Republic of Turkey and the Faroe Islands, consists of a network of Free Trade Agreements that set out identical rules of origin allowing for diagonal accumulation of origin among the member countries of the system;

Noting that the Regional Convention on Pan-Euro-Mediterranean Preferential Rules of Origin (hereinafter referred to as the “Convention”) aims at replacing the protocols on rules of origin currently in force among the member countries of the Pan-EuroMediterranean system of cumulation of origin;

Considering that the Republic of Albania, Bosnia and Herzegovina, North Macedonia, Montenegro, the Republic of Serbia, Kosovo (under Resolution 1244(1999) of the United Nations Security Council) as well as the Republic of Moldova, Georgia and Ukraine are Contracting Parties of the Convention and that the Pan-Euro-Mediterranean system is thus extended to these countries;

Noting that the Convention entered into force in relation to Liechtenstein, Norway and Switzerland on 1st January 2012, to Iceland on 1st May 2012, and to Montenegro, on 1st September 2012;

Considering that the Convention shall not lead to any less favourable situation than previously under the Free Trade Agreement between the EFTA States and Montenegro (hereinafter referred to as the “Agreement”);

Having regard to Article 48 of the Agreement, empowering the Parties to amend the Agreement,

AGREE TO THE FOLLOWING AMENDMENTS TO THE AGREEMENT:

1. The text set out in the Annex to this decision concerning the definition of the concept of “originating products” and methods of administrative cooperation shall be inserted after Annex VII as new Annex VIII.

2. The text set out in paragraph 1 of Article 4 of the Agreement shall be replaced by the following:

"1. This Agreement shall, except as otherwise specified in Annex VIII, apply:

(a) to the land territory, internal waters, and the territorial sea of a Party, and the air-space above the territory of a Party, in accordance with international law; and

(b) beyond the territorial sea, with respect to measures taken by a Party in the exercise of its sovereign rights or jurisdiction in accordance with international law."

3. The text of Article 8 of the Agreement shall be replaced by the following:

"The provisions on rules of origin and methods of administrative cooperation are set out in Annex VIII."

4. The above amendments shall enter into force on the first day of the second month after the last Party has notified the Depositary of the completion of its internal requirements. Pending entry into force, any Party may, if its constitutional requirements permit, apply this Protocol provisionally during an initial period starting on 1 September 2021, provided that in relation to Montenegro this Protocol is provisionally applied at the latest as of the same date. Provisional application of this Protocol shall be notified to the Depositary.

IN WITNESS WHEREOF the undersigned, being duly authorised thereto, have signed this Protocol to amend the Agreement.

Done at Geneva, this 14th day of July 2021, in one original in English, which shall be deposited with the Depositary, who shall transmit certified copies to all the Parties.

For Iceland

For Montenegro

For the Principality of Liechtenstein

For the Kingdom of Norway

For the Swiss Confederation