M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Working Group for Chapter 30 –External Relations Bilateral screening: Chapter 30 PRESENTATION OF MONTENEGRO Brussels, 12 June 2013

Chapter 30: External Relations M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 30: External Relations Bilateral Investment Treaties Ivana Gardašević Ministry of Economy

M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 30: External Relations Chapter 30: External Relations Economic Cooperation Legal Framework:  Free Trade Agreements  Economic Cooperation Agreements  Bilateral Investment Agreements

M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 30: External Relations Chapter 30: External Relations Economic Cooperation Agreements  Montenegro has 17 Economic Cooperation Agreements  10 with the EU (including Croatia)  non EU countries: Azerbaijan, Qatar, China, UAE, Turkey, Macedonia, Serbia  The main aim of these Agreements is to improve all the priority forms of economic cooperation, support the business community partnerships and to create a strategy for mutual accession in the third markets.

M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 30: External Relations Chapter 30: External Relations Bilateral Investment Treaties  Montenegro has 20 BIT’s  13 with the EU countries (Austria, Belgium-Luxembourg Economic Union, Denmark, Czech Republic, Finland, France, Greece, Netherlands, Cyprus, Malta, Germany, Poland, Spain)  non EU countries: Azerbaijan, Israel, Qatar, UAE, Turkey, Macedonia, Serbia

M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 30: External Relations Chapter 30: External Relations Law on Foreign Investments  Legal framework for the investments in Montenegro is regulated by the Law on Foreign Investments Article 2 For the purpose of this Law, a foreign investor shall be: - Foreign legal entity or individual; - Legal entity having at least 10% share of foreign capital into the total entity’s capital; - Legal entity established in Montenegro by a foreign individual; - Citizen of Montenegro having place of residence abroad. For the purpose of this Law, a foreign investor shall also be considered a person who has been granted Montenegrin citizenship in accordance with the Law, based on the executed investments. Article 3 For the purpose of this Law, a foreign investment shall be a pecuniary investment, investment in goods, services, proprietary rights and securities, in accordance with the law. Foreign investment made in goods and proprietary rights shall be understood to mean an investment in fixed assets, in accordance with accounting regulations.

M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 30: External Relations Chapter 30: External Relations Main provisions of BIT’s 1. National treatment and Most favored nation  In all matters relating to the treatment of investments, the investors of each Contracting Party shall enjoy national treatment and most-favoured-nation treatment in the territory of the other Contracting Party.  With respect to the operation, management, maintenance, use, enjoyment and sale or other disposal of investments, each Contracting Party shall accord, on its territory, to investors of the other Contracting Party, treatment no less favorable than that granted to its own investors or to investors of any other State if the latter is more favorable.  This treatment shall not include the privileges granted by one Contracting Party to investors of a third State by virtue of its participation or association in a free trade zone, customs union, common market or any other form of regional economic organization.  The provisions of this article do not apply to tax matters.

M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 30: External Relations Chapter 30: External Relations 2. Transfers  Each Contracting Party shall upon payment of all financial obligations of investors of the other Contracting Party, guarantee to the investors of the other Contracting Party, free transfers of payments related to their investments.  Transfers of payments under paragraph 1 of this Article shall be effected without delay and in a freely convertible currency.  Transfers shall be made at the market rate of exchange existing on the date of transfer with respect to spot transactions in the currency to be transferred. In the absence of a market for foreign exchange, the rate to be used will be the most recent exchange rate applied to inward investments.  The rights mentioned in this Article are without prejudice to measures adopted by the European Community

M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 30: External Relations Chapter 30: External Relations 3. Dispute settlements  SETTLEMENT OF DISPUTES BETWEEN AN INVESTOR AND A HOST STATE The Contracting Parties shall endeavor to settle any disputes between one of the Contracting Parties and an investor of the other Contracting Party by means of a friendly settlement. Any such disputes shall be adopted in writing including detailed information, by the investor at the same time to both Contracting Parties. If no settlement is reached within a certain period of time from a written notification of a claim, the dispute shall be submitted to international arbitration upon the request of either of the parties to the dispute.  DISPUTES BETWEEN THE STATES (CONTRACTING PARTIES) Disputes between the Contracting Parties concerning the interpretation or application of BIT should, if possible, be settled through the diplomatic channel. If a dispute between the Contracting Parties cannot be settled, it shall upon the request of either Contracting Party, be submitted to an arbitral tribunal.

M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 30: External Relations Chapter 30: External Relations 4. Termination  There is a termination clause in every BIT’s  Two forms of termination clause:  Either Contracting Party may terminate this Agreement by providing the notice of its intention to terminate the Agreement, in written through diplomatic channels, at least one year before the expiration of the initial period.  This Agreement shall be terminated on the date of the accession of either Contracting Party to the European Union, or on the date of the Montenegro’s accession to the EU.

Thank you for your attention! QUESTIONS