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 5 – Public Procurement Bilateral screening: Chapter 5 PRESENTATION OF MONTENEGRO Brussels, 19 November 2012

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 5 – Public Procurement Poglavlje 25 Nauka i istraživanje Bilateral screening: Chapter 5 Presentation of Montenegro Brussels, 19 November 2012 Chapter 5: Public Procurement M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union

M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 5: Public Procurement Chapter 5: Public Procurement International aspects of public procurement Milena Biro Ministry of Foreign Affairs and European Integration

M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Relevant acquis/documents Chapter 5: Public Procurement Chapter 5: Public Procurement Decisions/ Free Trade/ SAA Uruguay Round of Multilateral Trade Negotiations ( ) – Annex 4 – Agreement on Government Procurement (WTO) Decision No 2/2000 of the EC-Mexico Joint Council of 23 March Joint Declarations; Free Trade Agreement by the European Union and South Korea; Stabilisation and Association Agreement concluded between the European Community and Albania; Stabilisation and Association Agreement concluded between the European Community and its Member States and Montenegro ; priority to take into consideration Montenegro will timely take into concideration all aspects and specificities of following agreements/decisions/conclusions.

AGREEMENTS Agreement on the European Economic Area – Final Act – Joint Declarations – Declarations by the Governments of the Member States of the Community and the EFTA States – Arrangements – Agreed Minutes – Declarations by one or several of the Contracting Parties of the Agreement on the European Economic Area Agreement on the European Economic Area – Annex XVI – Procurement – List provided for in Article 65(1) Agreement between the European Community and the State of Israel on government procurement Agreement between the European Community and the State of Israel on procurement by telecommunications operators - Article 1 (6) side letters - Agreed minutes Agreement on telecommunications procurement between the European Community and the Republic of Korea - Side letter on qualification procedures - Agreed minutes - Memorandum Agreement establishing an association between the European Community and its Member States, of the one part, and the Republic of Chile, of the other part Stabilisation and Association Agreement between the European Communities and their Member States, of the one part, and the Republic of Croatia, of the other part Agreement in the form of an Exchange of Letters concerning the conclusion of the Stabilisation and Association Agreement between the European Communities and their Member States, of the one part, and the former Yugoslav Republic of Macedonia, of the other part 21994A0103(01) 21994A0103(66) 21997A0730(02) 21997A0730(01) 22002A1230(01) 22005A0128(01) 22004A0320(02) Chapter 5: Public Procurement M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 5: Public Procurement

M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 5: Public Procurement Chapter 5: Public Procurement Legal and institutional framework (1) Key: Stabilisation and Association Agreement concluded between the European Community and its Member States and Montenegro (OJ L 345 of , entered into force -1st May, 2010.); Relevant articles: art.9 – Free movement of goods, art.18 and art.76;

M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 5: Public Procurement Chapter 5: Public Procurement Legal and institutional framework (2) 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) 1and Article V of the General Agreement on Trade in Services (GATS).” Article 18: “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.”

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 44 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. “ Chapter 5: Public Procurement M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 5: Public Procurement Government of Montenegro quartarly reports to European Commission on fulfilment of obligations set out in SAA.

Chapter 5: Public Procurement M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 5: Public Procurement Legal and institutional framework (3) Agreements that regulate MNE international public procurement

Chapter 5: Public Procurement M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 5: Public Procurement Free Trade Agreement between Montenegro and EFTA States Article 26: Government Procurement 1.The Parties shall enhance their mutual understanding of their government procurement laws and regulations with a view to progressively liberalising their respective procurement markets on the basis of non-discrimination and reciprocity. 2.Each Party shall publish its laws, or otherwise make publicly available its laws, regulations and administrative rulings of general application as well as the international agreements to which it is party that may affect its procurement markets. Each Party shall promptly respond to specific questions and provide, upon request, information to another Party on such matters. 3.If a Party grants to a non-Party, after the entry into force of this Agreement, additional benefits with regard to the access to its procurement markets, it shall agree to enter into negotiations with a view to extending these benefits to another Party on a reciprocal basis.

Chapter 5: Public Procurement M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 5: Public Procurement Free Trade Agreement between Montenegro and Turkey Article 27: Public Procurement 1. The Parties consider the liberalization of their respective public procurement markets as an objective of this Agreement. The Parties aim at opening up of the award of public contracts on the basis of non-discrimination and reciprocity. 2. The Parties will progressively develop their respective rules, conditions and practices on public procurement with a view to granting suppliers of the other Party access to contract award procedures on their respective public procurement markets not less favourable than that accorded to companies of any country or territory. 3. The Joint Committee shall examine developments related to the achievement of the objectives of this Article and may recommend practical modalities of implementing the provisions of paragraph 2 so as to ensure free access, transparency and mutual opening of their respective public procurement markets. 4. During the examination referred to in paragraph 3, the Joint Committee may consider, especially in the light of international developments and regulations in this area, the possibility of extending the coverage and/or the degree of the market opening provided for in paragraph The Parties shall endeavour to accede to the relevant Agreements negotiated under the auspices of the GATT 1994 and the Marrakesh Agreement, establishing the WTO.

Chapter 5: Public Procurement M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 5: Public Procurement Agreement on Amendments and Accession to the Central- European Free Trade Agreement (1) C. — Government Procurement Article 34 Scope and Definitions This Agreement applies to all laws, regulations, procedures or practices regarding any procurement by central or sub-central government entities or other relevant entities. Nothing in Articles of this Agreement shall be construed to impose any obligation with respect to government procurement. The definitions of Article I of the WTO Agreement on Government Procurement shall apply. NEXT Article 35 Article 36

Article 35 Objectives 1. Each Party shall as of the date of entry into force of this Agreement ensure that the procurement of its entities takes place in a 25 transparent and reasonable manner, treats all suppliers of the other Parties equally, and is based on the principle of open and effective competition. 2. Each Party shall no later than 1 May 2010 ensure the progressive and effective opening of its government procurement market so that, with respect to any relevant laws, regulations, procedures and practices, the goods, services and suppliers of the other Parties are granted a treatment no less favourable than that accorded to domestic goods, services and suppliers. In particular, the Parties shall ensure that their entities: a. do not treat a locally-established supplier less favourably than another locally-established supplier on the basis of the degree of foreign affiliation to, or ownership by, a person of another Party; and b. do not discriminate against a locally-established supplier on the basis that the goods or services offered by that supplier for a particular procurement are goods or services of another Party. 3. This Article shall not apply to measures concerning customs duties or other charges of any kind imposed on or in connection with importation, the method of levying such duties and charges, other import regulations, including restrictions and formalities, nor to measures affecting trade in services other than measures specifically governing procurement. Agreement on Amendments and Accession to the Central- European Free Trade Agreement (2) Chapter 5: Public Procurement M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 5: Public Procurement NEXT Article 36

Evolutionary Clause 1. The Parties shall review in the Joint Committee, on a regular basis, progress in the opening of their government procurement markets. The first review shall take place no later than 1 May 2008 and focus on fulfilment of Article 35, paragraph 1. On the basis of these 26 reviews, the Joint Committee may recommend further actions to fulfil the objectives of Article 35, paragraph If either Party in the future should grant a third party advantages with regard to access to their respective procurement markets beyond what has been agreed upon in this Agreement, it shall offer adequate opportunities to the other Parties to enter into negotiations with a view to extending these advantages to them on a reciprocal basis. Chapter 5: Public Procurement Agreement on Amendments and Accession to the Central- European Free Trade Agreement (3) M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 5: Public Procurement

M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Poglavlje 25 Nauka i istraživanje Chapter 5: Public Procurement Chapter 5: Public Procurement Montenegro and WTO /developments December 2004: Montenegro submitted request for accession to WTO 17th December 2011: Signed Accession Protocol at the Ministerial Conference 29th April 2012: Montenegro became 154th member of WTO 31st October 2012: Montenegro gains OBSERVER STATUS in Government Procurement Agreement

Chapter 5: Public Procurement M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 5: Public Procurement C O N C L U S I O N S  5 th December – Established that Montenegro has fully alligned it’s trade rules with the rules of WTO (last meeting of the Working Party for WTO membership negotiation);  Montenegro as a member of WTO, has obligation to adhere to it’s main principles/GPA principles: non discrimination trade, transparency, trade liberalization and promotion of competition, encouragement of development and economic reforms;  Government Procurement Agreement – current OBSERVER STATUS (Line Ministry – Ministry of Finance)  Future steps toward GPA – to be defined in later stages, with prior consultation and advise from European institutions.

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