1. 1 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 29 – Customs union Bilateral screening: Chapter 29 PRESENTATION OF MONTENEGRO Brussels, June 2013

2. 2 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 29 – Customs union Contents: CUSTOMS TARIFF PRESENTATION TARIFF CLASSIFICATION PRESENTATION TARICG PRESENTATION Brussels, June 2013

3. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union CUSTOMS TARIFF

4. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union Customs Tariff Customs Tariff of Montenegro is harmonised with HS and CN All additional notes were also transposed, except those governing the calculation of customs duties for export of goods into the European Union Customs duties for imported goods are paid at rates and amount set by the Customs Tariff

5. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union Customs Tariff Additional classification of the Customs Tariff is done in the Integrate Customs Tariff of Montenegro(TARICG), for the purpose of foreign trade operations Objectives of the national classification: –Correct calculation of customs duties; –Application of prohibitions and restrictions measures; –Calculation of tax duties (e.g. excise duties); –Collection of statistical data

6. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union Customs Tariff Montenegro became the World Trade Organization member on 29 April 2012 Customs Tariff of Montenegro is harmonized with the Schedule of negotiated concessions in the segment concerning the market access for goods A phase alignment was defined for certain Tariff items. The transition period ranges from 4 to 10 years.

7. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union Customs Tariff In addition to the WTO Agreement, Montenegro entered and applies the following agreements: o SSA o EFTA Agreement o Agreement on free trade with the Russian Federation o Agreement on free trade with Ukraine o CEFTA Agreement o Agreement on free trade with Turkey

8. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union Customs Tariff

9. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union Customs Tariff Average customs rate is 5.78%, while under specific agreements is: -EU 0.82% -Island 2.88% -Norway 2.76% -Switzerland and Lichtenstein 2.12% -Russia 0.05% -Croatia 0.21% - Turkey 3.53%

10. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union Customs Tariff Customs duty is calculated and collected: - as percentage rate on the value of goods (ad valorem), and - specific amount per measurement unit of mass goods (specific customs duty) Some agricultural and food products have a combined customs duty i.e. both ad valorem and specific customs duty are charged WTO accession introduced so called maximum customs rate

11. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union Customs Tariff Example: Whit the assumption that the tomato price in April EUR 2/kg and in August EUR 0.50/kg, the total customs charge per kg of tomato will be: -In April 40%, applying the combined customs duty, -In August 70%, applying the rate of 50%

12. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union Customs Tariff The Customs Tariff has also three Appendices: Appendix 1 – Schedule of goods with customs duty at import in Montenegro which is different from the one provided in columns 3 or 5 of the Customs Tariff Appendix 2 – Schedule of pharmaceutical products relieved from the customs duty payment Appendix 3 – Schedule of goods having origin from countries with which an international agreement was entered into having customs duty abolished or reduced to a certain level within individual annual quota at import into Montenegro

13. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union Customs Tariff Appendix 1 – Schedule of goods with customs duty at import in Montenegro which is different from the one provided in columns 3 or 5 of the Customs Tariff Core rules for the nomenclature and customs duty – Mark “*” after the tariff number in column 1 of the Customs Tariff points to Appendix 1 of the Customs Tariff. Mark “ex” in front of the tariff number in column 1 of Appendix 1 means that the customs duty rate from column 4 applies only to that segment of the tariff sub-number, as stated in column 2.

14. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union Customs Tariff Appendix 2 – Schedule of pharmaceutical products relieved from the customs duty payment Relief is stipulated under the Law on the Customs Tariff Schedule of pharmaceutical products from the Montenegrin Customs Tariff is fully compliant with Annexes 3, 4, 5, and 6 of the EU CN

15. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union Carinska tarifa – customs quotas Appendix 3 – Schedule of goods having origin from countries with which an international agreement was entered into having customs duty abolished or reduced to a certain level within individual annual quota at import into Montenegro TARICG is used to monitor to usage of quota.

16. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union Suspensions and ceilings The Government is authorised to approve payment of a preferential customs duty for import of certain goods. The Government has not used the said authorisation in the previous period. Customs legislation does not contain provisions concerning ceilings/limits for charging customs duty.

17. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union TARIFF CLASSIFICATION OF GOODS

18. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union TARIFF CLASSIFICATION OF GOODS Legal basis Law on the Customs Tariff (Official Gazette of Montenegro, No 28/12) Core rules for application of the Customs Tariff Classification of parts for direct installation Classification of unclassified products or disassembled products

19. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union INSTRUMENTS FOR INTEGRATED CLASSIFICATION IN MONTENEGRO - Core rules for the Customs Tariff application - Explanatory notes to the Combined Nomenclature of the European Union, published in the Official Journal - Decisions on classification of goods of the Harmonised System Committee WTO - Decision on classification of goods of the European Commission - European Binding Tariff Information (EBTI)

20. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union BINDING INFORMATION ON CLASSIFICATION OF GOODS UNDER THE CUSTOMS TARIFF (BIT) Legal grounds –Article 12 of the Customs Law (Official Gazette of the Republic of Montenegro, No 07/02, … 66/06 and Official Gazette of Montenegro, No 21/08) –Articles 5 to 12 of the Decree on Implementation of the Customs Law (Official Gazette of Montenegro, No 38/08)

21. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union BINDING INFORMATION ON CLASSIFICATION OF GOODS UNDER THE CUSTOMS TARIFF (BIT) –Issued by the Customs Administration upon an application in writing of an interested person –Application is submitted only for one type of goods –BIT is mandatory for the customs authority concerning a person only for goods for which the customs procedure is carried out after the date of BIT issuance –Issued on the stipulated form and has legal value of a Decision –Appeal is submitted to the second-instance body, the Ministry of Finance

22. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union BINDING INFORMATION ON CLASSIFICATION OF GOODS UNDER THE CUSTOMS TARIFF (BIT) Deadline: Up to three months for issuance Validity 3 years Published on the Customs Administration website Issued free of charge

23. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union BINDING INFORMATION ON CLASSIFICATION OF GOODS UNDER THE CUSTOMS TARIFF (BIT)

24. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union BINDING INFORMATION ON CLASSIFICATION OF GOODS UNDER THE CUSTOMS TARIFF (BIT) Statistical data: - 3 in 2013 - 7 in 2012 - 1 in 2011 - 2 in 2010

25. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union TARICG (Integrated Tariff of Montenegro) http://taric.carina.co.me/TariCG

26. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union TARICG objectives Up-to-date Customs Tariff and customs and foreign trade regulations accessibility to all users Support to automated customs procedure, TARICG is an integral part of the customs IT system Uniform application of the Customs Tariff and customs and foreign trade regulations on the territory of Montenegro

27. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union TARICG’S MAIN CONCEPTS Database containing the Customs Tariff of Montenegro, as well as foreign trade and customs regulations TARICG is not a legislation Constant updating and supplementing of the database with all changes of the Harmonised System and EU’s Combined Nomenclature, as well as with the national regulations

28. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union TARICG background Application in use since 1 January 2010, developed in cooperation with the Customs Administration of Slovenia Following regulations are implemented: Customs tariff with third country duty rates Free trade agreements (EU, CEFTA, EFTA, Russia, Ukraine, Turkey) Quotas (EU and Turkey) Controlled list for import and export of goods (contains list of drugs, psychoactive substances, precursors, ozone depleting substances, etc) List of dual-use items List of non-military lethal devices CITEX Convention VAT and excise duties List of goods subject to phytosanitary, veterinary, health- sanitary control, as well as radioactivity control

29. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union TARIFF CODES FOR GOODS TARICG uses 10-digit tariff codes No additional codes are used (plan is to commence with use of additional codes in the forthcoming period)

30. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union TARIFF QUOTAS TARICG applications offers a possibility of direct insight in the quota status (quota code, opening and current balance, as well as tariff code of the quota. TARICG is linked with the CIS and applications for processing of SAD (JCI) may monitor the quota balance. No quota reservation, the first-come first served approach is used. When processing SAD (JCI) listing a quota, while the quota is used, the system of controls will report an error with information that quota cannot be used i.e. SAD (JCI) further processing is not possible.

31. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union TARICG (Integrated Tariff of Montenegro)

32. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union TARICG (Integrated Tariff of Montenegro) Box R33 (use of TARCIG during the control of SAD)

33. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union TARICG (Integrated Tariff of Montenegro) Box R33 (use of TARCIG during the control of SAD)

34. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union TARICG - PLANS Introduction of additional codes Application of quota reservations Implementation of legislation in TARICG (Law on chemicals, List of non-hazardous waste, …) Improvement and modernisation of software until the use of the EU software TARIC

35. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union Mitar Bajčeta Ministry of Finance mitar.bajceta@mif.gov.me Dženana Tuzović Customs Administration dženana.tuzovic@carina.gov.me

36. CUSTOMS UNION Chapter 29: M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 29: Customs union RELEVANTNI PROPISI EU Thank you for your attention! Thank you for your attention! QUESTIONS