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 20 – Enterprise and Industrial policy Bilateral screening: Chapter 20 PRESENTATION OF MONTENEGRO Brussels, 28 November 2012

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 20 – Enterprise and Industrial policy - Poglavlje 25 Nauka i istraživanje Bilateral screening: Chapter 20 Presentation of Montenegro Brussels, 28 November 2012 Chapter 20: Enterprise and Industrial policy Chapter 20: Enterprise and Industrial policy

3. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Defence Industry Poglavlje 25 Nauka i istraživanje Veljko Mališić Head of Department for mil-to-mil cooperation J- 5, GS, AF MNE Ministry of Defence Maja Jokanović Senior Advisor Ministry of Economy Chapter 20: Enterprise and Industrial policy Chapter 20: Enterprise and Industrial policy

4. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union  In the recent past there were built four factories in the north of Montenegro, constructed for the defence industry.  Today, there are two factories working within production of products for specific purpose.  Tara Aerospace and Defence Products AD Mojkovac- production of fuses, pyrocartridges and rocket engines  Poliex AD Berane- production of plastic explosive I SHORT REVIEW OF MONTENEGRIN PRODUCTION OF PRODUCTS FOR SPECIFIC PURPOSES Chapter 20: Enterprise and Industrial policy Chapter 20: Enterprise and Industrial policy

5. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union  Former factory “4th November” AD (1984-2006), with installed capacities for production of 450.000 pieces of fuses for mortar shells per year and production of different types of pyrocartridges, pyrotechnical compositions and rocket engines for ejection seats.  In the process of privatization, the company has been renamed and divided into two companies: Tara precision Works AD/heart of the company with all the metal processing and treatment plant and Tara Aerospace and Defence Products AD which is covering the military part of the factory I TARA Aerospace and Defence Products AD Mojkovac Company profile Chapter 20: Enterprise and Industrial policy Chapter 20: Enterprise and Industrial policy

6. 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 20: Enterprise and Industrial policy Chapter 20: Enterprise and Industrial policy I Tara Aerospace and Defence Products AD Production activities  Pyrotechnical propulsion cartridges and rocket engines  Fuse production  Research and development of pyrotechnical charges  Aviation and aircraft services  Demilitarization of obsolete munitions  Refurbishment of Armament

7. 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 20: Enterprise and Industrial policy Chapter 20: Enterprise and Industrial policy I ACTUAL AND FURTHER PROJECTS WITHIN TARA GROUP  Further development of different types of pyrotechnical charges for civil and military use (in the previous years it was developed 30 new products, one rocket engine, pistol and assault rifle);  Production of barrels – different calibers;  Reparation of different types of armament and military equipment;  The new TM9 pistol – own construction and production;  Production of silencers for pistols, automatic arms and rifles;  Modernisation of production;  Further development of pirotechnical assets mainly for military purposes

8. 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 I Activities supported by state authorities Chapter 20: Enterprise and Industrial policy Chapter 20: Enterprise and Industrial policy  Codification of the factory into NATO codification system  Codification number: NCAGE: A001W  Codification of the first Montenegrin pistol-first codified product in MNE  Under the MONDEM project managed by the Ministry of Defence, Tara Group is selected as a partner for the disassembly and ecologic disposal of various types of obsolete large caliber ammunitions

9. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union  POLIEX is a factory of applied production specialised in the production of plastic explosives  60 employees  Founded in 1982.  Located in Berane, in the northeast of Montenegro. It is 140 km away from Podgorica airport and 200 km away from the Bar port I Poliex ad Berane Company profile Chapter 20: Enterprise and Industrial policy Chapter 20: Enterprise and Industrial policy

10. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union  Plastic penetrite explosive  Powder explosive  Water resistant explosives  ANFO explosive  Semi-plastic explosives  Pentolite boosters  Initiation nonelectric System  Electric detonators  Detonating caps  Hand grenade I Poliex ad Berane Products Chapter 20: Enterprise and Industrial policy Chapter 20: Enterprise and Industrial policy

11. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union FACILITY  Laboratories  Plant for time and functional features analysis  Plant for testing on methane  Plant for explosive testing with the adequate process control QUALITY All the products in the range of POLIEX are characterized by European standards and procedures with:  high quality  safety  reliability  good functioning  simplicity of use I Poliex ad Berane Chapter 20: Enterprise and Industrial policy Chapter 20: Enterprise and Industrial policy

12. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union TECHNOLOGICAL CAPACITIES  Completely rounded up production process of initiators and explosives;  Production of priming products is conducted by application of the technology of binder filling and vacuum injection of detonable composition into previously extruded thermo- conductive tube (POLINEL system);  In production of plastic and semi-plastic explosives there are applied the most modern technologies guaranteeing high reliability at blasting in all conditions. DEVELOPMENT CAPACITIES  Following market needs POLIEX managed to develop the system for electric mining i.e. Electric detonators.  Professional resources and well technological capabilities ensured Poliex high position among the well-known manufacturers of explosives and initiators. CERTIFICATES  ISO 9001:2008 Standard – Certified Management System  All the products are in accordance to European Union standards and they have CE mark in Module B and Module D. I Poliex ad Berane Chapter 20: Enterprise and Industrial policy Chapter 20: Enterprise and Industrial policy

13. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union  Act on Foreign Trade in Arms, Military Equipment and Dual Use Goods (“Official Gazette of Montenegro” 80/08) with following by-laws, prescribes the procedure and conditions for foreign trade in controlled goods.  Foreign trade in controlled good includes:  export and import;  technical assistance related to development, production, assembly, testing, repair or maintenance of controlled goods, as well as any other technical service that may be provided in the form of an instruction, training, transfer of commercial know-how or skills or consulting services, including any form of verbal assistance;  brokering and the other services related to foreign trade in controlled goods. II NATIONAL LEGISLATION IN FOREIGN TRADE IN ARMS AND MILITARY EQUIPMENT Chapter 20: Enterprise and Industrial policy Chapter 20: Enterprise and Industrial policy

14. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union  The by-laws regulating specific issues related to export controls of transfers in controlled goods include: Decision on the National Control List of Arms and Military Equipment (harmonized with the Common Military List of the European Union No 2010/C 69/03 of 15 February 2010); Decision on the National Control List of Dual-Use Goods (harmonized with the EU List of Dual-Use Goods and Technologies, Council Regulation (EC) No 428/2009 of 05 May 2009); Regulation on the Form of Licensing Application, Form on the Content Licence, and forms of other documents required for international trade in controlled goods; Regulation on the Form of Request to be Registered in the Register of Entities who May Perform Foreign Trade in Controlled Goods and on the Form and Manner of Keeping the Register; Regulation on the Actions of Customs Authorities in Customs Procedures Related to Arms, Military Equipment and Dual-Use Goods (“Off. Journal of MNE” No. 60/09). II NATIONAL LEGISLATION IN FOREIGN TRADE IN ARMS AND MILITARY EQUIPMENT Chapter 20: Enterprise and Industrial policy Chapter 20: Enterprise and Industrial policy

15. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union  Foreign trade in controlled goods is conducted on three levels:  Registration of persons (legal and natural)  Issuance of individual licenses for a certain transaction  Supervision and inspection/control of foreign trade activity/affair  Ministry of the Economy in cooperation with the Ministry of Foreign Affairs, Ministry of Defence, Ministry of the Interior and Public Administration, Customs Administration, security and intelligence agencies, supervises and controls foreign trade in controlled goods, in line with the provisions of this Act;  Ministry of Economy issues licenses on the basis of acquired agreement/approval, opinions and other relevant information;  Ministry of the Interior and Public Administration issues licenses for transit and transport. II Foreign trade in controlled goods/Supervision and control Chapter 20: Enterprise and Industrial policy Chapter 20: Enterprise and Industrial policy

16. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union  Strengthening of the EU association process  Establishing comprehensive legal framework  Prohibition of all illegal activities  Working out the procedures for issuing licenses, and practice of control/inspection  Working out methods for the full implementation of the Law  Support to the programs of training for officials on all levels in the relevant governmental institutions  Coordination and cooperation between ministries and other governmental and nongovernmental institutions II Future development perspective Chapter 20: Enterprise and Industrial policy Chapter 20: Enterprise and Industrial policy

17. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union  Montenegro joined the Membership Action Plan - MAP at a meeting of NATO foreign ministers December 4, 2009. MAP is the most important stage in the process of Euro- Atlantic integration, since it is the last step before full-fledged membership in the alliance. Having successfully completed the second round of MAP, the Government of Montenegro adopted the Third Annual National Program on October 11 this year. The program was presented in Brussels on October 30 th, and that has officially launched the implementation of the third cycle of MAP.  The implementation of the third package of Partnership Goals, which Montenegro adopted from NATO in spring 2012 is still ongoing. The third package contains 49 partnership goals. Partnership goal G 4055 - Supply chain management Task goal:  To establish a national office for supply codification, which should be compatible with NATO codifying system (NCS) that gives the control numbers for the stock, including the process for the introduction and disposal of old equipment. Details of the expiry date, Interchange, limited use, repair and categories of hazardous materials must be identified, while national procedures must be developed to ensure accountability and operational flexibility. III NATO Codification System The relevant framework Chapter 20: Enterprise and Industrial policy Chapter 20: Enterprise and Industrial policy

18. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union NATO STANDARDIZATION AGREEMENTS:  STANAG 3151 - Codification - Uniform System of Item Identification  ACodP-1 - NATO Manual on Codification  STANAG 3150 - Codification - Uniform System of Supply Classification  STANAG 4177- Codification - Uniform System of Data Acquisition  STANAG 4199 – Codification - Uniform System Of Exchange Of Materiel Management Data  STANAG 4438 - Codification Of Equipment - Uniform System Of Dissemination Of Data Associated With Nato Stock Numbers III NATO Codification System Relevant international documents Chapter 20: Enterprise and Industrial policy Chapter 20: Enterprise and Industrial policy

19. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union  Law on Amendments to the Law on Defense (Official Gazette of Montenegro, No. 14/2012) II a Standardization in the field of defense, Article 39a,  Regulation on standardization in the field of defense (in progress) III NATO Codification System Legal framework Chapter 20: Enterprise and Industrial policy Chapter 20: Enterprise and Industrial policy

20. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Montenegro joined NATO codifying system November 24, 2009, and signed the Agreement on the accession to NATO codifying system at the Tier 1 on April 23, 2010 by the Chairman of the NATO Codification Committee AC 135. That Agreement accredited the Ministry of Defense- the Department of Material Resources- Section for standardization and codification as a Montenegrin National Codification Bureau. The activities for the preparation of applications for Tier2 level, which means full participation in the NATO codification system for countries that are not NATO members is ongoing. To this end, the following is done: 1.Donation of the Ministry of Defense of Bulgaria of the codification software – BULCOD (its use began in December 2011.) 2.As it is necessary to codify 100 products defense and civilian industry in Montenegro, until now we have codified 51 original Montenegrin product. Montenegrin companies have shown great deal of interest because of the possibility to their product on the defense market of 56 European countries and even further, that have accepted NATO codifying system. 3.Completed a tender for the procurement of software data exchange - NATO Mailbox 4.The signed agreements are required to exchange data with the codification: Germany and France. The exchange of signatures with Denmark, Great Britain, Italy and the United States is in procedure. III NATO Codification System Achieved level of implementation Chapter 20: Enterprise and Industrial policy Chapter 20: Enterprise and Industrial policy

21. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union  Adoption of Defense Standards on Montenegrin codification  Adoption of Guidelines for use of the codification of funds  Adoption of Ministerial decision on clause needed in the supply of defense products  Applications for Tier 2 level meaning the partnership with NATO Committee on AC135 III NATO Codification System Planned activities Chapter 20: Enterprise and Industrial policy Chapter 20: Enterprise and Industrial policy

22. Thank you for your attention! QUESTIONS