Article 52. Definition
For the purposes of this Agreement:
(a) "Community company" or "Montenegrin company" shall mean, respectively, a company set up in accordance with the laws of a Member State, or of Montenegro and having its registered office or central administration or principal place of business in the territory of the Community or of Montenegro. However, should the company, set up in accordance with the laws of a Member State or of Montenegro, have only its registered office in the territory of the Community or of Montenegro respectively, the company shall be considered a Community or a Montenegrin company if its operations possess a real and continuous link with the economy of one of the Member States or of Montenegro;
(b) "Subsidiary" of a company shall mean a company which is effectively controlled by another company;
(c) "Branch" of a company shall mean a place of business not having legal personality which has the appearance of permanency, such as the extension of a parent body, has a management and is materially equipped to negotiate business with third Parties so that the latter, although knowing that there will if necessary be a legal link with the parent body, the head office of which is abroad, do not have to deal directly with such parent body but may transact business at the place of business constituting the extension;
(d) "Establishment" shall mean:
(i) as regards nationals, the right to take up economic activities as self-employed persons, and to set up undertakings, in particular companies, which they effectively control. Self-employment and business undertakings by nationals shall not extend to seeking or taking employment in the labour market or confer a right of access to the labour market of another Party. The provisions of this Chapter do not apply to persons who are not exclusively self-employed;
(ii) as regards Community or Montenegrin companies, the right to take up economic activities by means of the setting up of subsidiaries and branches in Montenegro, or in the Community respectively;
(e) "Operations" shall mean the pursuit of economic activities;
(f) "Economic activities" shall in principle include activities of an industrial, commercial and professional character and activities of craftsmen;
(g) "Community national" and "national of Montenegro" shall mean respectively a natural person who is a national of a Member State or Montenegro respectively;
With regard to international maritime transport, including inter-modal operations involving a sea leg, Community nationals or nationals of Montenegro established outside the Community and Montenegro, and shipping companies established outside the Community or Montenegro and controlled by Community nationals or nationals of Montenegro, shall also be beneficiaries of the provisions of this Chapter and Chapter III, if their vessels are registered in that Member State or in Montenegro, in accordance with their respective legislation;
(h) "Financial services" shall mean those activities described in Annex VI. The Stabilisation and Association Council may extend or modify the scope of that Annex.
Article 53.
1. Montenegro shall facilitate the setting-up of operations on its territory by Community companies and nationals. To that end, Montenegro shall grant, upon entry into force of this Agreement:
(a) as regards the establishment of Community companies on the territory of Montenegro, treatment no less favourable than that accorded to its own companies or to any third country company, whichever is the better;
(b) as regards the operation of subsidiaries and branches of Community companies on the territory of Montenegro once established, treatment no less favourable than that accorded to its own companies and branches or to any subsidiary and branch of any third country company, whichever is the better.
2. The Community and its Member States shall grant, from the entry into force of this Agreement:
(a) as regards the establishment of Montenegrin companies treatment no less favourable than that accorded by Member States to their own companies or to any company of any third country, whichever is the better;
(b) as regards the operation of subsidiaries and branches of Montenegrin companies, established in its territory, treatment no less favourable than that accorded by Member States to their own companies and branches, or to any subsidiary and branch of any third country company, established in their territory, whichever is the better.
3. The Parties shall not adopt any new regulations or measures which introduce discrimination as regards the establishment of any other Party's companies on their territory or in respect of their operation, once established, by comparison with their own companies.
4. Four years after the entry into force of this Agreement, the Stabilisation and Association Council shall establish the modalities to extend the above provisions to the establishment of Community nationals and nationals of Montenegro to take up economic activities as self-employed persons.
5. Notwithstanding the provisions of this Article:
(a) Subsidiaries and branches of Community companies shall have, from the entry into force of this Agreement, the right to use and rent real property in Montenegro;
(b) Subsidiaries and branches of Community companies shall from the entry into force of this Agreement have the right to acquire and enjoy ownership rights over real property as Montenegrin companies and as regards public goods/goods of common interest, the same rights as enjoyed by Montenegrin companies respectively where these rights are necessary for the conduct of the economic activities for which they are established.
Article 54.
1. Subject to the provisions of Article 56, with the exception of financial services described in Annex VI, the Parties may regulate the establishment and operation of companies and nationals on their territory, insofar as these regulations do not discriminate against companies and nationals of the other Parties in comparison with its own companies and nationals.
2. In respect of financial services, notwithstanding any other provisions of this Agreement, a Party shall not be prevented from taking measures for prudential reasons, including for the protection of investors, depositors, policy holders or persons to whom a fiduciary duty is owed by a financial service supplier, or to ensure the integrity and stability of the financial system. Such measures shall not be used as a means of avoiding the Party's obligations under this Agreement.
3. Nothing in this Agreement shall be construed to require a Party to disclose information relating to the affairs and accounts of individual customers or any confidential or proprietary information in the possession of public entities.
Article 55.
1. Without prejudice to any provision to the contrary contained in the Multilateral Agreement on the Establishment of a European Common Aviation Area (1) (hereinafter referred to as "ECAA"), the provisions of this Chapter shall not apply to air transport services, inland waterways transport services and maritime cabotage services.
2. The Stabilisation and Association Council may make recommendations for improving establishment and operations in the areas covered by paragraph 1.
Article 56.
1. The provisions of Articles 53 and 54 do not preclude the application by a Party of particular rules concerning the establishment and operation in its territory of branches of companies of another Party not incorporated in the territory of the first Party, which are justified by legal or technical differences between such branches as compared to branches of companies incorporated in its territory or, as regards financial services, for prudential reasons.
2. The difference in treatment shall not go beyond what is strictly necessary as a result of such legal or technical differences or, as regards financial services, for prudential reasons.
Article 57.
In order to make it easier for Community nationals and nationals from Montenegro to take up and pursue regulated professional activities in Montenegro and in the Community respectively, the Stabilisation and Association Council shall examine which steps are necessary for the mutual recognition of qualifications. It may take all necessary measures to that end.
Article 58.
1. A Community company established in the territory of Montenegro or a Montenegrin company established in the Community shall be entitled to employ, or have employed by one of its subsidiaries or branches, in accordance with the legislation in force in the host territory of establishment, in the territory of the Republic of Montenegro and the Community respectively, employees who are nationals of the Member States or nationals from Montenegro respectively, provided that such employees are key personnel as defined in paragraph 2 and that they are employed exclusively by companies, subsidiaries or branches. The residence and work permits of such employees shall only cover the period of such employment.
2. Key personnel of the abovementioned companies herein referred to as "organisations" are "intra-corporate transferees" as defined in (c) of this paragraph in the following categories, pro- vided that the organisation is a legal person and that the persons concerned have been employed by it or have been partners in it (other than as majority shareholders), for at least the year immediately preceding such movement:
(a) Persons working in a senior position with an organisation, who primarily direct the management of the establishment, receiving general supervision or direction principally from the board of directors or stockholders of the business or their equivalent including:
(i) directing the establishment of a department or sub- division of the establishment;
(ii) supervising and controlling the work of other supervisory, professional or managerial employees;
(iii) having the authority personally to recruit and dismiss or recommend recruiting, dismissing or other personnel actions;
(b) Persons working within an organisation who possess uncommon knowledge essential to the establishment's service, research equipment, techniques or management. The assessment of such knowledge may reflect, apart from knowledge specific to the establishment, a high level of qualification referring to a type of work or trade requiring specific technical knowledge, including membership of an accredited profession;
(c) An "intra-corporate transferee" is defined as a natural person working within an organisation in the territory of a Party, and being temporarily transferred in the context of pursuit of economic activities in the territory of the other Party; the organisation concerned must have its principal place of business in the territory of a Party and the transfer be to an establishment (branch, subsidiary) of that organisation, effectively pursuing like economic activities in the territory of the other Party.
3. The entry into and the temporary presence within the territory of the Community or in Montenegro of Montenegrin nationals and Community nationals respectively shall be permitted, when these representatives of companies are persons work- ing in a senior position, as defined in paragraph 2(a) above, within a company, and are responsible for the setting up of a Community subsidiary or branch of a Montenegrin company or of a Montenegrin subsidiary or branch of a Community company in a Member State or in the Republic of Montenegro respectively, when:
(a) those representatives are not engaged in making direct sales or supplying services, and do not receive remuneration from a source located within the host territory of establishment, and;
(b) the company has its principal place of business outside the Community or Montenegro, respectively, and has no other representative, office, branch or subsidiary in that Member State or in Montenegro respectively.
Chapter III. Supply of Services
Article 59.
1. The Community and Montenegro undertake, in accordance with the following provisions, to take the necessary steps to allow progressively the supply of services by Community companies, Montenegrin companies or by Community nationals or nationals of Montenegro which are established in the territory of a Party other than that of the person for whom the services are intended.
2. In step with the liberalisation process mentioned in paragraph 1, the Parties shall permit the temporary movement of natural persons providing the service or who are employed by the service provider as key personnel as defined in Article 58, including natural persons who are representatives of a Community or Montenegrin company or national and are seeking temporary entry for the purpose of negotiating for the sale of services or entering into agreements to sell services for that service provider, where those representatives will not be engaged in making direct sales to the general public or in supplying services themselves.
3. After four years, the Stabilisation and Association Council shall take the measures necessary to progressively implement the provisions of paragraph 1. Account shall be taken of the progress achieved by the Parties in the approximation of their laws.
Article 60.
1. The Parties shall not take any measures or actions which render the conditions for the supply of services by Community and Montenegro nationals or companies which are established in a Party other than that of the person for whom the services are intended significantly more restrictive as compared to the situation existing on the day preceding the day of entry into force of this Agreement.
2. If one Party is of the view that measures introduced by the other Party since the entry into force of this Agreement result in a situation which is significantly more restrictive in respect of supply of services as compared with the situation existing at the date of entry into force of this Agreement, such first Party may request the other Party to enter into consultations.
Article 61.
With regard to supply of transport services between the Community and Montenegro, the following provisions shall apply:
1) With regard to land transport, Protocol 4 lays down the rules applicable to the relationship between the Parties in order to ensure, particularly, unrestricted road transit traffic across Montenegro and the Community as a whole, the effective application of the principle of non-discrimination and progressive harmonisation of the transport legislation of Montenegro with that of the Community.
2) With regard to international maritime transport, the Parties undertake to apply effectively the principle of unrestricted access to the international maritime markets and trades on a commercial basis, and to respect international and European obligations in the field of safety, security and environmental standards.
The Parties affirm their commitment to a freely competitive environment as an essential feature of international maritime transport.
3) In applying the principles of paragraph 2, the Parties shall:
(a) not introduce cargo-sharing clauses in future bilateral Agreements with third countries;
(b) abolish, upon the entry into force of this Agreement, all unilateral measures and administrative, technical and other obstacles that could have restrictive or discriminatory effects on the free supply of services in international maritime transport;
(c) Each Party shall grant, inter alia, no less favourable treatment for the ships operated by nationals or companies of the other Party than that accorded to a Party's own ships with regard to access to ports open to international trade, the use of infrastructure and auxiliary maritime services of the ports, as well as related fees and charges, customs facilities and the assignment of berths and facilities for loading and unloading.
4) With a view to ensuring a coordinated development and progressive liberalisation of transport between the Parties adapted to their reciprocal commercial needs, the conditions of mutual market access in air transport shall be dealt with by the ECAA.
5) Prior to the conclusion of the ECAA, the Parties shall not take any measures or actions which are more restrictive or dis- criminatory as compared with the situation existing prior to the entry into force of this Agreement.
6) Montenegro shall adapt its legislation, including administrative, technical and other rules, to that of the Community existing at any time in the field of air, maritime, inland waterway and land transport insofar as it serves liberalisation purposes and mutual access to markets of the Parties and facilitates the movement of passengers and of goods.
7) In step with the common progress in the achievement of the objectives of this Chapter, the Stabilisation and Association Council shall examine ways of creating the conditions necessary for improving freedom to provide air, land and inland waterway transport services.
Chapter IV. Current Payments and Movement of Capital
Article 62.
The Parties undertake to authorise, in freely convertible currency, in accordance with the provisions of Article VIII of the Articles of the Agreement of the International Monetary Fund, any payments and transfers on the current account of balance of payments between the Community and Montenegro.
Article 63.
1. With regard to transactions on the capital and financial account of balance of payments, from the entry into force of this Agreement, the Parties shall ensure the free movement of capital relating to direct investments made in companies formed in accordance with the laws of the host country and investments made in accordance with the provisions of Chapter II of Title V, and the liquidation or repatriation of these investments and of any profit stemming there from.
2. With regard to transactions on the capital and financial account of balance of payments, from the entry into force of this Agreement, the Parties shall ensure the free movement of capital relating to credits related to commercial transactions or to the provision of services in which a resident of one of the Parties is participating, and to financial loans and credits, with maturity longer than a year.
3. Montenegro shall, from the entry into force of this Agreement, grant national treatment to EU nationals acquiring real estate on its territory.
4. The Community and Montenegro shall also ensure, from the entry into force of this Agreement, free movement of capital relating to portfolio investment and financial loans and credits with maturity shorter than a year.
5. Without prejudice to paragraph 1, the Parties shall not introduce any new restrictions on the movement of capital and current payments between residents of the Community and Montenegro and shall not make the existing arrangements more restrictive.
6. Without prejudice to the provisions of Article 62 and of this Article, where, in exceptional circumstances, movements of capital between the Community and Montenegro cause, or threaten to cause, serious difficulties for the operation of exchange rate policy or monetary policy in the Community or Montenegro, the Community and Montenegro, respectively, may take safeguard measures with regard to movements of capital between the Community and Montenegro for a period not exceeding six months if such measures are strictly necessary.
7. Nothing in the above provisions shall be taken to limit the rights of economic operators of the Parties from benefiting from any more favourable treatment that may be provided for in any existing bilateral or multilateral Agreement involving Parties to this Agreement.
8. The Parties shall consult each other with a view to facilitating the movement of capital between the Community and Montenegro in order to promote the objectives of this Agreement.
Article 64.
1. During the first year following the date of entry into force of this Agreement, the Community and Montenegro shall take measures permitting the creation of the necessary conditions for the further gradual application of Community rules on the free movement of capital.
2. By the end of the second year following the date of entry into force of this Agreement, the Stabilisation and Association Council shall determine the modalities for full application of Community rules on the movement of capital in Montenegro.
Chapter v. General Provisions
Article 65.
1. The provisions of this Title shall be applied subject to limitations justified on grounds of public policy, public security or public health.
2. They shall not apply to activities that in the territory of any of the Parties are connected, even occasionally, with the exercise of official authority.
Article 66.
For the purpose of this Title, nothing in this Agreement shall prevent the Parties from applying their laws and regulations regarding entry and stay, employment, working conditions, establishment of natural persons and supply of services, notably insofar as the granting, renewal or refusal of a residence permit is concerned, provided that, in so doing, they do not apply them in such a manner as to nullify or impair the benefits accruing to any Party under the terms of a specific provision of this Agreement. This provision shall be without prejudice to the application of Article 65.
Article 67.
Companies which are controlled and exclusively owned jointly by Montenegrin companies or nationals of Montenegro and Community companies or nationals shall also be covered by the pro- visions of this Title.
Article 68.
1. The Most-Favoured-Nation treatment granted in accordance with the provisions of this Title shall not apply to the tax advantages that the Parties are providing or will provide in the future on the basis of Agreements designed to avoid double taxation or other tax arrangements.
2. None of the provisions of this Title shall be construed to prevent the adoption or enforcement by the Parties of any measure aimed at preventing the avoidance or evasion of taxes pursuant to the tax provisions of Agreements to avoid double taxation and other tax arrangements or domestic fiscal legislation.
3. None of the provisions of this Title shall be construed to prevent Member States or Montenegro from applying the relevant provisions of their fiscal legislation, from distinguishing between taxpayers who are not in identical situations, in particular as regards their place of residence.
Article 69.
1. The Parties shall endeavour wherever possible to avoid the imposition of restrictive measures, including measures relating to imports, for balance of payments purposes. A Party adopting such measures shall present as soon as possible to the other Party a timetable for their removal.
2. Where one or more Member States or Montenegro is in serious balance of payments difficulties, or under imminent threat thereof, the Community and Montenegro may, in accordance with the conditions established under the WTO Agreement, adopt restrictive measures, including measures relating to imports, which shall be of limited duration and may not go beyond what is strictly necessary to remedy the balance of payments situation. The Community and Montenegro shall inform the other Party forthwith.
3. Any restrictive measures shall not apply to transfers related to investment and in particular to the repatriation of amounts invested or reinvested or any kind of revenues stemming therefrom.
Article 70.
The provisions of this Title shall be progressively adjusted, notably in the light of requirements arising from Article V of the GATS.
Article 71.
The provisions of this Agreement shall not prejudice the application by any Party of any measure necessary to prevent the circumvention of its measures concerning third-country access to its market through the provisions of this Agreement.
Title VI. APPROXIMATION OF LAWS, LAW ENFORCEMENT AND COMPETITION RULES
Article 72.
1. The Parties recognise the importance of the approximation of the existing legislation in Montenegro to that of the Community and of its effective implementation. Montenegro shall endeavour to ensure that its existing laws and future legislation will be gradually made compatible with the Community acquis. Montenegro shall ensure that existing and future legislation will be properly implemented and enforced.
2. This approximation shall start on the date of signing of this Agreement, and shall gradually extend to all the elements of the Community acquis referred to in this Agreement by the end of the transitional period defined in Article 8 of this Agreement.
3. Approximation will, at an early stage, focus on fundamental elements of the Internal Market acquis, including financial sector legislation, Justice, Freedom and Security as well as on trade-related areas. At a further stage, Montenegro shall focus of the remaining parts of the acquis.
Approximation shall be carried out on the basis of a programme to be agreed between the European Commission and Montenegro.
4. Montenegro shall also define, in agreement with the European Commission, the modalities for the monitoring of the implementation of approximation of legislation and law enforcement actions to be taken.
Article 73. Competition and other Economic Provisions
1. The following are incompatible with the proper functioning of this Agreement, insofar as they may affect trade between the Community and Montenegro:
(i) all Agreements between undertakings, decisions by associations of undertakings and concerted practices between undertakings which have as their object or effect the prevention, restriction or distortion of competition;
(ii) abuse by one or more undertakings of a dominant position in the territories of the Community or Montenegro as a whole or in a substantial part thereof;
(ii) any State aid which distorts or threatens to distort competition by favouring certain undertakings or certain products.
2. Any practices contrary to this Article shall be assessed on the basis of criteria arising from the application of the competition rules applicable in the Community, in particular from Articles 81, 82, 86 and 87 of the EC Treaty and interpretative instruments adopted by the Community institutions.
3. The Parties shall ensure that an operationally independent authority is entrusted with the powers necessary for the full application of paragraph 1(i) and (ii) of this Article, regarding private and public undertakings and undertakings to which special rights have been granted.
4. Montenegro shall establish an operationally independent authority which is entrusted with the powers necessary for the full application of paragraph 1 (ii) within one year from the date of entry into force of this Agreement. This authority shall have, inter alia, the powers to authorise State aid schemes and individual aid grants in conformity with paragraph 2, as well as the powers to order the recovery of State aid that has been unlawfully granted.
5. The Community on one side and Montenegro on the other side shall ensure transparency in the area of State aid, inter alia by providing to the other Parties a regular annual report, or equivalent, following the methodology and the presentation of the Community survey on State aid. Upon request by one Party, the other Party shall provide information on particular individual cases of public aid.
6. Montenegro shall establish a comprehensive inventory of aid schemes instituted before the establishment of the authority referred to in paragraph 4 and shall align such aid schemes with the criteria referred to in paragraph 2 within a period of no more than 4 years from the entry into force of this Agreement.
7. (a) For the purposes of applying the provisions of paragraph 1(ii), the Parties recognise that during the first five years after the entry into force of this Agreement, any public aid granted by Montenegro shall be assessed taking into account the fact that Montenegro shall be regarded as an area identical to those areas of the Community described in Article 87 (3) (a) of the EC Treaty.
(b) Within four years from the entry into force of this Agreement, Montenegro shall submit to the European Commission its GDP per capita figures harmonised at NUTS II level. The authority referred to in paragraph 4 and the European Commission shall then jointly evaluate the eligibility of the regions of Montenegro as well as the maximum aid intensities in relation thereto in order to draw up the regional aid map on the basis of the relevant Community guidelines.
8. As appropriate, Protocol 5 establishes the rules on state aid in the steel industry. This Protocol establishes the rules applicable in the event restructuring aid is granted to the steel industry. It would stress the exceptional character of such aid and the fact that the aid would be limited in time and would be linked to capacity reductions within the framework of feasibility programmes.
9. With regard to products referred to in Chapter II of Title IV:
(a) paragraph 1 (iii) shall not apply;
(b) any practices contrary to paragraph 1(i) shall be assessed according to the criteria established by the Community on the basis of Articles 36 and 37 of the EC Treaty and specific Community instruments adopted on this basis.
10. If one of the Parties considers that a particular practice is incompatible with the terms of paragraph 1, it may take appropriate measures after consultation within the Stabilisation and Association Council or after 30 working days following referral for such consultation. Nothing in this Article shall prejudice or affect in any way the taking, by the Community or Montenegro, of countervailing measures in accordance with the GATT 1994 and the WTO Agreement on Subsidies and Countervailing Measures and the respective related internal legislation.
Article 74. Public Undertakings
By the end of the third year following the entry into force of this Agreement, Montenegro shall apply to public undertakings and undertakings to which special and exclusive rights have been granted the principles set out in the EC Treaty, with particular reference to Article 86.
Special rights of public undertakings during the transitional period shall not include the possibility to impose quantitative restrictions or measures having an equivalent effect on imports from the Community into Montenegro.
Article 75. Intellectual, Industrial and Commercial Property
1. Pursuant to the provisions of this Article and Annex VII, the Parties confirm the importance that they attach to ensuring adequate and effective protection and enforcement of intellectual, industrial and commercial property rights.
2. From the entry into force of this Agreement, the Parties shall grant to each others companies and nationals, in respect of the recognition and protection of intellectual, industrial and commercial property, treatment no less favourable than that granted by them to any third country under bilateral Agreements.
3. Montenegro shall take the necessary measures in order to guarantee no later than five years after entry into force of this Agreement a level of protection of intellectual, industrial and commercial property rights similar to that existing in the Community, including effective means of enforcing such rights.
4. Montenegro undertakes to accede, within the period referred to above, to the multilateral conventions on intellectual, industrial and commercial property rights referred to in Annex VIL The Stabilisation and Association Council may decide to oblige Montenegro to accede to specific multilateral Conventions in this area.
5. If problems in the area of intellectual, industrial and com- mercial property affecting trading conditions occur, they shall be referred urgently to the Stabilisation and Association Council, at the request of either Party, with a view to reaching mutually sat- isfactory solutions.
Article 76. Public Procurement
1. The Community and Montenegro consider the opening-up of the award of public contracts on the basis of non-discrimination and reciprocity, following in particular the WTO rules, to be a desirable objective.
2. Montenegrin companies, whether established or not in the Community, shall be granted access to contract award procedures in the Community pursuant to Community procurement rules under treatment no less favourable than that accorded to Community companies as from the entry into force of this Agreement.
The above provisions shall also apply to contracts in the utilities sector once the government of Montenegro has adopted the legislation introducing the Community rules in this area. The Community shall examine periodically whether Montenegro has indeed introduced such legislation.
3. Community companies established in Montenegro under the provisions of Chapter II of Title V shall, from the entry into force of this Agreement, be granted access to contract award procedures in Montenegro under treatment no less favourable than that accorded to Montenegrin companies.
4. Community companies not established in Montenegro shall be granted access to contract award procedures in Montenegro under treatment no less favourable than that accorded to Montenegrin companies as from the entry into force of this Agreement.
5. The Stabilisation and Association Council shall periodically examine the possibility for Montenegro to introduce access to contract award procedures in Montenegro for all Community companies. Montenegro shall report annually to the Stabilisation and Association Council on the measures they have taken to enhance transparency and to provide for effective judicial review of decisions taken in the area of public procurement.
6. As regards establishment, operations, supply of services between the Community and Montenegro, and also employment and movement of labour linked to the fulfilment of public contracts, the provisions of Articles 49 to 64 are applicable.
Article 77. Standardisation, Metrology, Accreditation and Conformity Assessment
1. Montenegro shall take the necessary measures in order to gradually achieve conformity with Community technical regulations and European standardisation, metrology, accreditation and conformity assessment procedures.
2. To this end, the Parties shall seek to: