Title
STABILISATION AND ASSOCIATION AGREEMENT
between the European Communities and their Member States, of the one part, and the Republic of Montenegro, of the other part
Preamble
THE KINGDOM OF BELGIUM,
THE REPUBLIC OF BULGARIA,
THE CZECH REPUBLIC,
THE KINGDOM OF DENMARK,
THE FEDERAL REPUBLIC OF GERMANY,
THE REPUBLIC OF ESTONIA,
IRELAND,
THE HELLENIC REPUBLIC,
THE KINGDOM OF SPAIN,
THE FRENCH REPUBLIC,
THE ITALIAN REPUBLIC,
THE REPUBLIC OF CYPRUS,
THE REPUBLIC OF LATVIA,
THE REPUBLIC OF LITHUANIA,
THE GRAND DUCHY OF LUXEMBOURG,
THE REPUBLIC OF HUNGARY,
MALTA,
THE KINGDOM OF THE NETHERLANDS,
THE REPUBLIC OF AUSTRIA,
THE REPUBLIC OF POLAND,
THE PORTUGUESE REPUBLIC,
ROMANIA,
THE REPUBLIC OF SLOVENIA,
THE SLOVAK REPUBLIC,
THE REPUBLIC OF FINLAND,
THE KINGDOM OF SWEDEN,
THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND
Contracting Parties to the Treaty establishing the European Community and the Treaty establishing the European Atomic Energy Community, and the Treaty on European Union, hereinafter referred to as "Member States", and
THE EUROPEAN COMMUNITY and THE EUROPEAN ATOMIC ENERGY COMMUNITY,
hereinafter referred to as the "Community",
of the one part, and
THE REPUBLIC OF MONTENEGRO, hereinafter referred to as "Montenegro",
of the other part,
together referred to as "the Parties",
CONSIDERING the strong links between the Parties and the values that they share, their desire to strengthen those links and establish a close and lasting relationship based on reciprocity and mutual interest, which should allow Montenegro to further strengthen and extend the relations with the Community and its Member States;
CONSIDERING the importance of this Agreement, in the framework of the Stabilisation and Association process (SAp) with the countries of south-eastern Europe, in the establishment and consolidation of a stable European order based on cooperation, of which the European Union is a mainstay, as well as in the framework of the Stability Pact;
CONSIDERING the European Union's readiness to integrate Montenegro to the fullest possible extent into the political and economic mainstream of Europe and its status as a potential candidate for EU membership on the basis of the Treaty on European Union (hereinafter referred to as "the EU Treaty") and fulfilment of the criteria defined by the European Council in June 1993 as well as the SAp conditionalities, subject to the successful implementation of this Agreement, notably regarding regional cooperation;
CONSIDERING the European Partnership, which identifies priorities for action in order to support the country's efforts to move closer to the European Union;
CONSIDERING the commitment of the Parties to contribute by all means to the political, economic and institutional stabilisation in Montenegro as well as in the region, through the development of civil society and democratisation, institution building and public administration reform, regional trade integration and enhanced economic cooperation, as well as through cooperation in a wide range of areas, particularly in justice, freedom and security, and the strengthening of national and regional security;
CONSIDERING the commitment of the Parties to increasing political and economic freedoms as the very basis of this Agreement, as well as their commitment to respect human rights and the rule of law, including the rights of persons belonging to national minorities, and democratic principles through a multi-party system with free and fair elections;
CONSIDERING the commitment of the Parties to the full implementation of all principles and provisions of the UN Charter, of the OSCE, notably those of the Final Act of the Conference on Security and Cooperation in Europe (hereinafter referred to as "the Helsinki Final Act"), the concluding documents of the Madrid and Vienna Conferences, the Charter of Paris for a New Europe, and of the Stability Pact for south-eastern Europe, so as to contribute to regional stability and cooperation among the countries of the region;
REAFFIRMING the right of return for all refugees and internally displaced persons and to the protection of their property and other related human rights;
CONSIDERING the commitment of the Parties to the principles of free market economy and to sustainable development as well as the readiness of the Community to contribute to the economic reforms in Montenegro;
CONSIDERING the commitment of the Parties to free trade, in compliance with the rights and obligations arising out of the membership of the WTO;
CONSIDERING the wish of the Parties to further develop regular political dialogue on bilateral and international issues of mutual interest, including regional aspects, taking into account the Common Foreign and Security Policy (CFSP) of the Euro- pean Union;
CONSIDERING the commitment of the Parties to combat organised crime and to strengthen cooperation in the fight against terrorism on the basis of the declaration issued by the European Conference on 20 October 2001;
CONVINCED that the Stabilisation and Association Agreement (hereinafter referred as "this Agreement") will create a new climate for economic relations between them and, above all, for the development of trade and investment, factors crucial to economic restructuring and modernisation;
BEARING in mind the commitment by Montenegro to approximate its legislation in the relevant sectors to that of the Community, and to effectively implement it;
TAKING ACCOUNT of the Community's willingness to provide decisive support for the implementation of reform and to use all available instruments of cooperation and technical, financial and economic assistance on a comprehensive indicative multiannual basis to this endeavour;
CONFIRMING that the provisions of this Agreement that fall within the scope of Part III, Title IV of the Treaty establishing the European Community (hereinafter referred to as "the EC Treaty") bind the United Kingdom and Ireland as separate Contracting Parties, and not as a part of the Community, until the United Kingdom or Ireland (as the case may be) notifies Montenegro that it has become bound as part of the Community in accordance with the Protocol on the position of the United Kingdom and Ireland annexed to the EU Treaty and the EC Treaty. The same applies to Denmark, in accordance with the Protocol annexed to those Treaties on the position of Denmark;
RECALLING the Zagreb Summit, which called for further consolidation of relations between the countries of the Stabilisation and Association process and the European Union as well as enhanced regional cooperation;
RECALLING that the Thessaloniki Summit reinforced the Stabilisation and Association process as the policy framework for the European Union's relations with the Western Balkan countries and underlined the prospect of their integration with the European Union on the basis of their individual reform progress and merit;
RECALLING the signature of the Central European Free Trade Agreement in Bucharest on 19 December 2006 as a means of enhancing the region's ability to attract investments and the prospects of its integration into the global economy;
DESIROUS of establishing closer cultural cooperation and developing exchanges of information,
HAVE AGREED AS FOLLOWS:
Body
Article 1.
1. An Association is hereby established between the Community and its Member States, of the one part, and the Republic of Montenegro, of the other part.
2. The aims of this Association are:
(a) to support the efforts of Montenegro to strengthen democracy and the rule of law;
(b) to contribute to political, economic and institutional stability in Montenegro, as well as to the stabilisation of the region;
(c) to provide an appropriate framework for political dialogue, allowing the development of close political relations between the Parties;
(d) to support the efforts of Montenegro to develop its economic and international cooperation, including through the approximation of its legislation to that of the Community;
(e) to support the efforts of Montenegro to complete the transi- tion into a functioning market economy;
(f) to promote harmonious economic relations and gradually develop a free trade area between the Community and Montenegro;
(g) to foster regional cooperation in all the fields covered by this Agreement.
Title I. GENERAL PRINCIPLES
Article 2.
Respect for the democratic principles and human rights as pro- claimed in the Universal Declaration of Human Rights and as defined in the Convention for the Protection of Human Rights and Fundamental Freedoms, in the Helsinki Final Act and the Charter of Paris for a New Europe, respect for international law principles, including full cooperation with the International Criminal Tribunal for the former Yugoslavia (ICTY), and the rule of law as well as the principles of market economy as reflected in the Document of the CSCE Bonn Conference on Economic Cooperation, shall form the basis of the domestic and external policies of the Parties and constitute essential elements of this Agreement.
Article 3.
The fight against the proliferation of weapons of mass destruction and their means of delivery constitutes an essential element of this Agreement.
Article 4.
The contracting parties reaffirm the importance they attach to the implementation of international obligations, notably the full cooperation with ICTY.
Article 5.
International and regional peace and stability, the development of good neighbourly relations, human rights and the respect and protection of minorities are central to the Stabilisation and Association process referred to in the conclusions of the Council of the European Union on 21 June 1999. The conclusion and the implementation of this Agreement come within the framework of the conclusions of the Council of the European Union of 29 April 1997 and are based on the individual merits of Montenegro.
Article 6.
Montenegro commits itself to continue to foster cooperation and good neighbourly relations with the other countries of the region including an appropriate level of mutual concessions concerning the movement of persons, goods, capital and services as well as the development of projects of common interest, notably those related to border management and combating organised crime, corruption, money laundering, illegal migration and trafficking, including in particular in human beings, small arms and light weapons, as well as illicit drugs. This commitment constitutes a key factor in the development of the relations and cooperation between the Parties and thus contributes to regional stability.
Article 7.
The Parties reaffirm the importance that they attach to the fight against terrorism and the implementation of international obligations in this area.
Article 8.
The association shall be progressively and fully realised over a transitional period of a maximum of five years.
The Stabilisation and Association Council (hereinafter referred to as "SAC") established under Article 119 shall regularly review, as a rule on an annual basis, the implementation of this Agreement
and the adoption and implementation by Montenegro of legal, administrative, institutional and economic reforms. This review shall be carried out in the light of the preamble and in accordance with the general principles of this Agreement. It shall take duly into account priorities set in the European Partnership relevant to this Agreement and be in coherence with the mechanisms established under the Stabilisation and Association process, notably the progress report on the Stabilisation and Association process.
On the basis of this review, the SAC will issue recommendations and may take decisions. Where the review identifies particular difficulties, they may be referred to the mechanisms of dispute settlement established under this Agreement.
The full association shall be progressively realised. No later than the third year after the entry into force of this Agreement, the SAC shall make a thorough review of the application of this Agreement. On the basis of this review the SAC shall evaluate progress made by Montenegro and may take decisions governing the following stages of association.
The aforementioned review will not apply to the free movement of goods, for which a specific schedule is foreseen in Title IV.
Article 9.
This Agreement shall be fully compatible with and implemented in a manner consistent with the relevant WTO provisions, in particular Article XXIV of the General Agreement on Tariffs and Trade 1994 (GATT 1994) and Article V of the General Agreement on Trade in Services (GATS).
Title II. POLITICAL DIALOGUE
Article 10.
1. Political dialogue between the Parties shall be further developed within the context of this Agreement. It shall accompany and consolidate the rapprochement between the European Union and Montenegro and contribute to the establishment of close links of solidarity and new forms of cooperation between the Parties.
2. The political dialogue is intended to promote in particular:
(a) full integration of Montenegro into the community of democratic nations and gradual rapprochement with the European Union;
(b) an increasing convergence of positions of the Parties on international issues, including CFSP issues, also through the exchange of information as appropriate, and, in particular, on those issues likely to have substantial effects on the Parties;
(c) regional cooperation and the development of good neighbourly relations;
(d) common views on security and stability in Europe, including cooperation in the areas covered by the CFSP of the European Union.
3. The Parties consider that the proliferation of weapons of mass destruction (WMD) and their means of delivery, both to state and non-state actors, represents one of the most serious threats to international stability and security. The Parties therefore agree to cooperate and to contribute to countering the proliferation of weapons of mass destruction and their means of delivery through full compliance with and national implementation of their existing obligations under international disarmament and non-proliferation Treaties and Agreements and other relevant international obligations. The Parties agree that this provision constitutes an essential element of this Agreement and will be part of the political dialogue that will accompany and consolidate these elements.
The Parties furthermore agree to cooperate and to contribute to countering the proliferation of weapons of mass destruction and their means of delivery by:
(a) taking steps to sign, ratify, or accede to, as appropriate, and fully implement all other relevant international instruments;
(b) establishing an effective system of national export controls, controlling the export as well as the transit of WMD-related goods, including a WMD end-use control on dual use technologies and containing effective sanctions for breaches of export controls;
(c) Political dialogue on this matter may take place on a regional basis.
Article 11.
1. Political dialogue shall take place within the Stabilisation and Association Council, which shall have the general responsibility for any matter which the Parties might wish to put to it.
2. At the request of the Parties, political dialogue may also take place in the following formats:
(a) meetings, where necessary, of senior officials representing Montenegro, on the one hand, and the Presidency of the
Council of the European Union, the Secretary General/High Representative for the Common Foreign and Security Policy and the Commission of the European Communities (hereinafter referred to as "European Commission"), on the other;
(b) taking full advantage of all diplomatic channels between the Parties, including appropriate contacts in third countries and within the United Nations, the OSCE, the Council of Europe and other international fora;
(c) any other means which would make a useful contribution to consolidating, developing and stepping up this dialogue, including those identified in the Thessaloniki agenda, adopted in the Conclusions of the European Council in Thessaloniki on 19 and 20 June 2003.
Article 12.
A political dialogue at parliamentary level shall take place within the framework of the Stabilisation and Association Parliamentary Committee established under Article 125.
Article 13.
Political dialogue may take place within a multilateral framework, and as a regional dialogue including other countries of the region, including in the framework of the EU-Western Balkan forum.
Title III. REGIONAL COOPERATION
Article 14.
In conformity with its commitment to international and regional peace and stability, and to the development of good neighbourly relations, Montenegro shall actively promote regional cooperation. The Community assistance programmes may support projects having a regional or cross-border dimension through its technical assistance programmes.
Whenever Montenegro foresees to reinforce its cooperation with one of the countries mentioned in Articles 15, 16 and 17, it shall inform and consult the Community and its Member States according to the provisions laid down in Title X.
Montenegro shall implement fully the existing bilateral Agreements negotiated pursuant to the Memorandum of Understanding on Trade Facilitation and Liberalisation signed in Brussels on 27 June 2001 by Serbia and Montenegro and the Central European Free Trade Agreement signed in Bucharest on 19 December 2006.
Article 15. Cooperation with other Countries Having Signed a Stabilisation and Association Agreement
After the signature of this Agreement, Montenegro shall start negotiations with the countries which have already signed a Stabilisation and Association Agreement with a view to concluding bilateral conventions on regional cooperation, the aim of which shall be to enhance the scope of cooperation between the countries concerned.
The main elements of these conventions shall be:
(a) political dialogue;
(b) the establishment of free trade areas, consistent with relevant WTO provisions;
(c) mutual concessions concerning the movement of workers, establishment, supply of services, current payments and movement of capital as well as other policies related to movement of persons at an equivalent level to that of this Agreement;
(d) provisions on cooperation in other fields whether or not covered by this Agreement, and notably the field of Justice, Freedom and Security.
These conventions shall contain provisions for the creation of the necessary institutional mechanisms, as appropriate.
These conventions shall be concluded within two years after the entry into force of this Agreement. Readiness by Montenegro to conclude such conventions will be a condition for the further development of the relations between Montenegro and the European Union.
Montenegro shall initiate similar negotiations with the remaining countries of the region once these countries will have signed a Stabilisation and Association Agreement.
Article 16. Cooperation with other Countries Concerned by the Stabilisation and Association Process
Montenegro shall pursue regional cooperation with the other States concerned by the Stabilisation and Association process in some or all the fields of cooperation covered by this Agreement, and notably those of common interest. Such cooperation should always be compatible with the principles and objectives of this Agreement.
Article 17. Cooperation with other Countries Candidate to EU Accession Not Concerned by the SAp
1. Montenegro should foster its cooperation and conclude a convention on regional cooperation with any country candidate for EU accession in any of the fields of cooperation covered by this Agreement. Such conventions should aim to gradually align bilateral relations between Montenegro and this country to the relevant part of the relations between the Community and its Member States and this country.
2. Montenegro shall start negotiations with Turkey which has established a customs union with the Community, with a view to concluding, on a mutually advantageous basis, an Agreement establishing a free trade area in accordance with Article XXIV of the GATT 1994 as well as liberalising the establishment and sup- ply of services between them at an equivalent level of this Agree- ment in accordance with Article V of the GATS.
These negotiations should be opened as soon as possible, with a view to concluding the abovementioned Agreement before the end of the transitional period referred to in Article 18(1).
Title IV. FREE MOVEMENT OF GOODS
Article 18.
1. The Community and Montenegro shall gradually establish a bilateral free trade area over a period lasting a maximum of five years starting from the entry into force of this Agreement in accordance with the provisions of this Agreement and in conformity with those of the GATT 1994 and the WTO. In so doing they shall take into account the specific requirements laid down hereinafter.
2. The Combined Nomenclature shall be applied to the classi- fication of goods in trade between the Parties.
3. For the purpose of this Agreement customs duties and charges having equivalent effect to customs duties include any duty or charge of any kind imposed in connection with the importation or exportation of a good, including any form of surtax or surcharge in connection with such importation or exportation, but do not include any:
(a) charges equivalent to an internal tax imposed consistently with the provisions of paragraph 2 of Article III of the GATT 1994;
(b) antidumping or countervailing measures;
(c) fees or charges commensurate with the costs of services rendered.
4. For each product, the basic duty to which the successive tariff reductions set out in this Agreement are to be applied shall be:
(a) the Community Common Customs Tariff, established pursuant to Council Regulation (EEC) No 2658/87 (1) actually applied erga omnes on the day of the signature of this Agreement;
(b) the Montenegrin applied tariff (2).
5. If, after the signature of this Agreement, any tariff reduction is applied on an erga omnes basis, in particular reductions resulting:
(a) from the tariff negotiations in the WTO or,