PRESENTATION OF MONTENEGRO Negotiating Team for the Accession of Montenegro to the European Union Working Group for Chapter 28 – Consumer and Health Protection Bilateral screening: Chapter 28 PRESENTATION OF MONTENEGRO Brussels, 15-16 April 2013

unfair business-to-consumer commercial practices Chapter 28: Consumer and Health Protection Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices Zvezdan Čađenović Union of Employees zcadjenovic@yahoo.com M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 28: CONSUMER AND HEALTH PROTECTION

Chapter 28: CONSUMER AND HEALTH PROTECTION Chapter 28: Consumer Protection and Public Health Contents Relevant Acquis National legislation Institutional Framework Level of transposition (key rules) Enforcement Future activities M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 28: CONSUMER AND HEALTH PROTECTION

Chapter 28: CONSUMER AND HEALTH PROTECTION Chapter 28: Consumer Protection and Public Health Relevant acquis Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 28: CONSUMER AND HEALTH PROTECTION

Chapter 28: CONSUMER AND HEALTH PROTECTION Chapter 28: Consumer Protection and Public Health National Legislation Law on Consumer Protection, OG RMN No. 26/07 (Art. 112, 113, 114, 115, Art. 124, 127 LCP), provides for protection of protection of consumers against certain forms of “forbidden conduct of the trader (generally forbidden” M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 28: CONSUMER AND HEALTH PROTECTION

Institutional Framework Chapter 28: Consumer Protection and Public Health Institutional Framework Beside MoE and Authority for Inspection Surveillance, other main institutions and stakeholders: Courts, individual complaints, Arbitration Board for Out-of-court Settlement of Consumer Disputes, ADR scheme for consumer protection Banking Ombudsman, ADR scheme for consumer protection in area of banking and other financial institutions M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 28: CONSUMER AND HEALTH PROTECTION

Level of transposition (Key rules I) Chapter 28: Consumer Protection and Public Health Level of transposition (Key rules I) Level of transposition: PARTIAL (significant lack of harmonization) Definitions (Art. 2 [1, 2, 8 and 11 LCP): Consumer - one definition for whole LCP - natural person who buys, orders, accepts, uses goods or services, including public services, for non-business, namely non-professional purposes, or to whom the offer for a product or service is targeted; Trader - one definition for whole LCP - a person who sells goods or provides services to consumers (no transposition of wording “in the course of his trade, business or profession”, although Art. 6 of the Law on Internal Trade to certain extent eliminates this gap) Product shall mean goods or service that may be circulated, including also public service); Goods - tangible things that may be placed on the market, including also the facilities that may be used in accordance with this Law (no distinction to “movable” goods, thus it includes immovable property (no transposition of “rights and obligations”) M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 28: CONSUMER AND HEALTH PROTECTION

Level of transposition (Key rules II) Chapter 28: Consumer and Health Protection Level of transposition (Key rules II) Other definitions provided in Directive Directive LCP "business-to-consumer commercial practices" X "to materially distort the economic behavior of consumers" Partially (Art. 67(1), insufficient to cover a full scope of definition as it addresses only information about the product or conditions of sale to mislead the consumer when buying a product. "code of conduct" M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 28: CONSUMER AND HEALTH PROTECTION

Level of transposition (Key rules III) Chapter 28: Consumer and Health Protection Level of transposition (Key rules III) Other definitions provided in Directive Directive LCP “code owner" X “professional diligence" Partially (Art. 67(1), insufficient to cover a full scope of definition as it addresses only information about the product or conditions of sale to mislead the consumer when buying a product. “invitation to purchase" X (LoO Art. 28(1) provides that sending catalogues, price-lists, tariffs and other information, as well as advertisements through the media, leaflets, or in some other way, shell be considered as an invitation to make an offer under announced conditions. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 28: CONSUMER AND HEALTH PROTECTION

Level of transposition (Key rules IV) Chapter 28: Consumer and Health Protection Level of transposition (Key rules IV) Other definitions provided in Directive Directive LCP “undue influence" X “transactional decision" “regulated professions" M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 28: CONSUMER AND HEALTH PROTECTION

Level of transposition (Key rules V) Chapter 28: Consumer Protection and Public Health Level of transposition (Key rules V) General Scope: Montenegrin legal system provides for specific provision on protection of consumers against “forbidden conduct of the trader” in just one article (Art. 67). No transposition, of explicit applicability of forbidden conduct “before, during and after commercial transaction” in relation to product. LCP provides for non-exhaustive list of forbidden conduct, type of Directive “misleading practices” (Art. 67 (1)) Selling of the products by means of coercion, or threatening or molesting the consumer that is violating the consumer’s freedom of choice is recognized as separate category of forbidden conduct and defined as “aggressive conduct”, (Art. 67(2)) LCP provides for for non-exhaustive list of “aggressive conduct”; type of Directive “aggressive” practice(Art. 67(3)) M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 28: CONSUMER AND HEALTH PROTECTION

Level of transposition (Key rules VI) Chapter 28: Consumer Protection and Public Health Level of transposition (Key rules VI) General Scope: No transposition, of main elements of commercial practices so to be unfair (Art. 5(2) and (3) Directive) No transposition, of explicit distinction between “misleading” and “aggressive” commercial practice (instead “forbidden conduct” vs. “aggressive conduct” ). No transposition, of main elements constituting a commercial practice to be regarded as misleading (e.g. notion, circumstances to be taken into account, misleading omissions (Art. 6 and 7 Directive) No transposition, of main elements constituting a commercial practice to be regarded as aggressive (e.g. partial transposition of the notion, circumstances to be taken into account (Art. 8 and 9 Directive) Low level of transposition of Annex I (insufficient, even though LCP provided lists of “forbidden conduct” and “aggressive conduct” are non-exhaustive list) Selling of the products by means of coercion, or threatening or molesting the consumer that is violating the consumer’s freedom of choice is recognized as separate category of forbidden conduct and defined as “aggressive conduct”, (Art. 67(2)) It provides for for non-exhaustive list of “aggressive conduct”; type of Directive “aggressive” practice(Art. 67(3)) M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 28: CONSUMER AND HEALTH PROTECTION

Chapter 28: CONSUMER AND HEALTH PROTECTION Level of transposition (Key rules VII) Transposition of Annex I (“misleading type” of conduct, Art. 67 (1) LCP) Directive LCP No. 7 (availability of products for very limited time/dependent on particular terms) Partially (no “falsely” stating, missing words “it will only be available on particular terms for a very limited time” etc.) No. 9 (creating impression for product legal sale when it is not the case) √ No. 11. (inaccurate claim on nature and risk of the product vs. personal security) Partially (missing words “nature and extent of the risk“ etc.) No. 14 (pyramid promotional scheme) No. 15 (ceasing trading or moving premises) M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 28: CONSUMER AND HEALTH PROTECTION

Chapter 28: CONSUMER AND HEALTH PROTECTION Level of transposition (Key rules VIII) Transposition of Annex I (“aggressive” conduct, Art. 67 (3) LCP) Directive LCP No. 24 (no leave of premises until contract signed) √ No. 25 (conducting personal visit) Partially (missing words “not to return except in circumstances and to the extent justified, under national law, to enforce a contractual obligation“ ) No. 26 (distant solicitations) Partially (no transposition of exceptions) No. 27 (production of documents not relevant/failing to respond) Partially (missing words “failing systematically to respond to pertinent correspondence” etc.) No. 29 (inertia selling) Partially (missing words “for the return”, safekeeping of products” etc.) M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 28: CONSUMER AND HEALTH PROTECTION

Level of transposition (Key rules IX) Chapter 28: Consumer Protection and Public Health Level of transposition (Key rules IX) Other CP instruments: No transposition, of self control of unfair commercial practices by code owners (Art. 10 Directive) No transposition, of special provisions on protection of collective interest of consumers (injunctions) (Art. 11 and 12 Directive) M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 28: CONSUMER AND HEALTH PROTECTION

Chapter 28: CONSUMER AND HEALTH PROTECTION Chapter 28: Consumer Protection and Public Health Enforcement I Authority for Inspection supervision: Initiating misdemeanour procedure in case of infringement of the Law (Art. 129(1)[20] (2) and (3) and Art. 135 LCP) (fines: 1.000 to 15.000 Euros for legal entity; 150 to 1.500 Euros for responsible person in legal entity; 400 to 4.000 Euros for entrepreneur)) M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 28: CONSUMER AND HEALTH PROTECTION

Chapter 28: CONSUMER AND HEALTH PROTECTION Chapter 28: Consumer Protection and Public Health Enforcement II Courts : individiual complaints; Arbitration Board for Out-of-court Settlement of Consumer Disputes Banking Ombudsman Arbitration vs. settlement proposal vs. settlement proposal (in case of financial institutions regulated by Law on Banks) M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 28: CONSUMER AND HEALTH PROTECTION

Chapter 28: CONSUMER AND HEALTH PROTECTION Chapter 28: Consumer Protection and Public Health Future plans ME in 3rd and 4th quarter 2010 executed detailed screening of 11 CP directives (including Directive 2005/29/EC), supported by IPA 2009 Project (AIM) Guidelines for Harmonization of Montenegrin CP legislation (blueprint for new LCP), http://www.mek.gov.me/ResourceManager/FileDownload.aspx?rid=126923&rType=2&file=Guidelines%20for%20Harmonisation%20of%20Montenegrin%20%20CP%20Legislation.pdf Draft new Law on Consumer Protection, fully harmonized with Directive 97/7/EC and ready to be adopted by GoM (Art. 108 – 116 Draft LCP) M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 28: CONSUMER AND HEALTH PROTECTION

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