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 28 – Consumer and Health Protection Bilateral screening: Chapter 28 PRESENTATION OF MONTENEGRO Brussels, 15-16 April 2013

2. Chapter 28: Consumer and Health Protection Directive 2008/48/EC of 23 April 2008 on credit agreements for consumers Nikola Kaluđerović The Central Bank of Montenegro nikola.kaludjerovic@cbcg.me Aleksandra Popović, Ministry of Finance Rada Marković, The Administration for Inspectorial Affairs 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

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

4. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Relevant Acquis  Directive 2008/48/EC of the European Parliament and of the Council of 23 April 2008 on credit agreements for consumers and repealing Council Directive 87/102/EEC (OJ L 133, 22.5.2008, p. 66) (also known as Consumer Credit Directive, CCD) as the main source of EU consumer credit law.  CCD was adopted on 23 April 2008 and had to be transposed by the EU Member States by 11 June 2010. Chapter 28: CONSUMER AND HEALTH PROTECTION Chapter 28: Consumer and Health Protection

5. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union National Legislation  Law on Consumer Protection (LCP), OG RMN No. 26/07 Lex specialis, direct application to credit agreements.  Law on Obligations (LO), OG MN No. 47/08 Lex generali, subsidiary application of LO to credit agreement  Law on banks (LB), OG MN No, 17/08 and 44/10 (art.89,91,92) Applicable on every credit agreement, as lex generali, where one contractual party is: bank, microcredit financial institution and credit union  Decision on The Uniform Manner Of Calculation and Reporting of EIR on Loans and Deposits Effective Interest Rate, OGRMN 48/03 and 55/03 Applicable on calculating EIR (Effective Interest Rate) as mandatory element of credit agreement Chapter 28: CONSUMER AND HEALTH PROTECTION Chapter 28: Consumer and Health Protection

6. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Institutional Framework  Main institutions and stakeholders: -Ministry of Economy and Central Bank in charge for CC policy and legislative development actions; -Authority for Inspection Surveillance and Central Bank, in charge for initiating misdemeanour procedure (Art. 131/1/1 ref. 33/2 and Art.131/1/2 ref. 34/4); - Banking Ombudsman independent party which participates in out-of- court settlement in resolution of disputed issues between the consumers and banks and/or micro-credit financial institutions and credit unions (Art.92 LB) Chapter 28: CONSUMER AND HEALTH PROTECTION Chapter 28: Consumer and Health Protection

7. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union  The LCP was passed by the Parliament of MNE in 2007  The CCD was passed in 2008 Level of transposition (Not transponed) Chapter 28: CONSUMER AND HEALTH PROTECTION Chapter 28: Consumer and Health Protection

8. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Level of transposition (Key rules I) Credit agreement  Definition of credit agreement CREDITOR (business organization or entity, definition of creditor is given in art.2/1/15 LCP) gives or promise to give → CREDIT (differed payment, loan, financial benefit) →CONSUMER  Standard information to be included in advertising of credit agreements Annual IR and other costs of credit (art. 34/4 LCP) To inform public and clients (including consumers) on the amount of EIR (art.89 LB)  Pre-contractual information (in writing, obligation of creditor) Creditor → Written information → Consumer → CONCLUDING CONTRACT Written information: max. amount of CC, annual IR, costs of CC, conditions and procedures for termination of CC agreement. Chapter 28: CONSUMER AND HEALTH PROTECTION Chapter 28: Consumer and Health Protection

9. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union  Information to be included in credit agreements Mandatory elements (art.34/2 LCP), inter alia: -effective interest rate (art.34/5 LCP reff.to CB Decision on The Uniform Manner Of Calculation and Reporting of EIR on Loans and Deposits Effective Interest Rate, OGRMN 48/03 and 55/03)  Right of the consumer to withdraw from a credit agreement Only before beginning of using credit (art. 1171/1 LO)  Early repayment of credit agreement Consumer is entitled to: -a proportionate decrease of the total credit costs (as defined in art.36/2 LCP) Level of transposition (Key rules II) Chapter 28: CONSUMER AND HEALTH PROTECTION Chapter 28: Consumer and Health Protection

10. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Level of transposition ( Legal Institutes: regulated, but not harmonized ) Chapter 28: CONSUMER AND HEALTH PROTECTION CCDMNE Legislation Definition of CA√ (not harmonized) Standard information to be included in advertising CA √ (not harmonized) Pre-contractual information √ (not harmonized) Information to be included in CA√ (not harmonized) Right of the consumer to withdraw from a CA √ (not harmonized) Early repayment of CA √ (not harmonized) Chapter 28: Consumer and Health Protection

11. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Level of transposition ( Legal Institutes:not regulated ) Chapter 28: CONSUMER AND HEALTH PROTECTION CCDMNE Legislation Assessing the creditworthiness of the consumer X Credit agreement in the form of an overdraft facility and open-end CA X Linked CA X Assignment of rights and overrunning X Credit intermediariesX Chapter 28: Consumer and Health Protection

12. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Enforcement I  Arbitration Board For Out-Of-Court Settlement of Consumer Disputes - In charge for an out-of court protection for infringement of consumer’s right proscribed by LCP, i.e. (art.97/1 LCP)  Banking Ombudsman - In charge for an out-of court protection for infringement of consumer’s right when creditor is bank, microcredit financial institution, credit union  Authority for Inspection supervision and Central bank -Competent inspector is authorized to order the creditor to remedy identified flaw (art.126/1 LCP)  Competent court - Consumer is entitled to file a complaint with the competent court for breach of contract Chapter 28: CONSUMER AND HEALTH PROTECTION Chapter 28: Consumer and Health Protection

13. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Future Plans The Bill on Consumer Credit Agreement (CCA) is in the Parliamentarian procedure and it is expected to be passed by MNE Parliament in second quarter of 2013 Fully harmonized with CCD Vacatio legis (promulgation →t (6 months)→ Law on CCA takes effect) Deadline for adopting regulation (promulgation→3 months)  Challenges strengthening human resources (hiring new employees, training, courses) rearranging internal organization at authorities in charge to enforce Law on CCA at Inspection Authority and CB (CB has to establish new sector or division in charge to enforce Law on Credit Agreements) Chapter 28: CONSUMER AND HEALTH PROTECTION Chapter 28: Consumer and Health Protection

14. Thank you for your attention. QUESTIONS