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 3 –Right of establishment and freedom to provide services Bilateral screening: Chapter 3 PRESENTATION OF MONTENEGRO Brussels, 29 November 2012

2. Right of establishment and freedom to provide services M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 03: Chapter 3: Right of establishment and freedom to provide services THE SERVICES DIRECTIVE: STATE OF PLAY AND FUTURE STEPS Svetlana Bozovic Ministry of Economy svetlana.bozovic@mek.gov.me

3. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 3: Right of establishment and freedom to provide services Chapter 3: Right of establishment and freedom to provide services BACKGROUND INFORMATION -WTO membership since of 29 April 2012 Each request of bilateral partners related to Schedule of Specific commitments in Services of Montenegro, was previously harmonized with the DG Trade. -Free Trade Agreement on Services -Stabilization and Association Agreement - SAA (1 May 2010) -EFTA States (MNE – Swiss and Lichtenstein - 1 September 2012, MNE – Island – 1 October 2012, MNE – Norway – 1 November 2012) - CEFTA 2006 Agreement (22 July 2007)

4. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 3: Right of establishment and freedom to provide services Chapter 3: Right of establishment and freedom to provide services PRESENTATION STRUCTURE 1. Institutional framework 2. Legislation framework 2.1 Horizontal regime 2.2. Sectoral regime 3. Action plan (December 2012 - June 2013)

5. 1. INSTITUTIONAL FRAMEWORK - At present in Montenegro is assessed that 13 ministries, Inspection Administration, Chamber of Economy, Chamber of Crafts, Engineering Chamber... Chapter 3: Right of establishment and freedom to provide services THE SERVICES DIRECTIVE Ministry of Economy Ministry of Finance Ministry of Agriculture and Rural Development Ministry of Justice and Human Rights Ministry of Foreign Affairs and European Integration Ministry for Information Society and Telecommuni cation Ministry of Labour and Social Welfare Ministry of Health Ministry of Sustainable Developmen t and Tourism Ministry of Education and Sport Ministry of Culture Ministry of Interior Ministry of Transport and Maritime Affairs M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 3: Right of establishment and freedom to provide services

6. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 3: Right of establishment and freedom to provide services Chapter 3: Right of establishment and freedom to provide services 2. LEGISLATION FRAMEWORK (I) 2.1. Horisontal regime 2.1.1. Administrative simplification Law on improving business environment (OG MNE, No. 40/10) Law on Electronic Signature (OG RM, No. 55/03 and 31/05, OG MNE, No. 41/10) Law on Electronic Documents (OG MNE, No. 5/08) 2.1.2. Right of Establishment Law on General Administrative Procedures (OG RM, No. 60/03, OG MNE, No. 32/11) Law on Business organization (OG MNE, No. 06/02, 17/07, 80/08, 40/10, 36/11, 40/11 ) Law on Foreign Investments (OG MNE, No. 18/11) 2.1.3. Freedom to provide services Law on Employment and Work of Foreigners (OG MNE, No. 22/08, OG MNE, No. 32/11 )

7. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 3: Right of establishment and freedom to provide services Chapter 3: Right of establishment and freedom to provide services 2. LEGISLATION FRAMEWORK (II) So far, it is identified 85 regulations ( 53 laws and 32 by laws) that should be in the process of alignment with the Services Directive, which are in competence of 13 ministries.

8. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 3: Right of establishment and freedom to provide services Chapter 3: Right of establishment and freedom to provide services 2.1.2. RIGHT OF ESTABLISHMENT Law on General Administrative Procedures Law on General Administrative Procedures - Article 13 - TACIT AUTHORISATION harmonized with Article 13.4 SD Law on Business organization Law on Business organization regulates the forms of organization pursuing economic activities and their registration. They are the following: the individual entrepreneur; the general partnership (“GP”); the limited partnership (“LP”); the joint stock company (“JSC”), the limited liability company (“LLC”); the foreign company branch.

9. Chapter 3: Right of establishment and freedom to provide services M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 3: Right of establishment and freedom to provide services DEFINITION Natural person who engages in economic activity for the purpose of making a gain and who is not performing activity for the account of another. An individual who pursues an independent profession under special regulations shall be regarded as an individual entrepreneur.REGISTRATION Individual entrepreneur is registered with the Central Registry by submitting a registration statement in accordance with the provisions of Law on business organization for statistical purposes. The individual entrepreneur shall receive a registration certificate and such certificate shall not represent a license to do business.

10. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 3: Right of establishment and freedom to provide services Chapter 3: Right of establishment and freedom to provide services FOREIGN COMPANY BRANCH (I) FOREIGN COMPANY BRANCH (I) Foreign companies which establish a foreign company branch in Montenegro shall be obliged, to submit to the Central Registry data for registration within 30 days from the day of the establishment of the branch Branch of a company established and registered outside Montenegro which performs business activity on the territory of Montenegro

11. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 3: Right of establishment and freedom to provide services Chapter 3: Right of establishment and freedom to provide services FOREIGN COMPANY BRANCH (II) the address of the registered office of the foreign company branch in Montenegro; the business activity; the name and legal form of the foreign company and the name of the foreign company branch if it is different from the name of the company; an authenticated copy of the charter of the foreign company and a translation of the charter in the language officially used authenticated by a court interpreter; a copy of the foreign company’s registration certificate or a corresponding duly authenticated document confirming the legal registration of the company in its home state; the names and addresses of the persons who are authorized to represent the company in dealings with third parties: as a company body constituted pursuant to law or as members of any such body; as permanent representatives of the company for the activities of the branch, and the authorizations for the persons to represent the company, whether they may do so alone or jointly. the names and addresses of one or more persons with permanent residence in Montenegro authorized to represent the company in legal proceedings; the most recent balance sheet and income statement or similar financial documents prescribed by the law of the country where the company is registered.

12. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 3: Right of establishment and freedom to provide services Chapter 3: Right of establishment and freedom to provide services Law on Business organization Law on Business organization does not contain any requirements set in Articles 14 and 15 of the Services Directive. Law on Foreign Investments Law on Foreign Investments equally treats domestic and foreign investors, but prescribes in its Article 7 the following: “ Foreign investor may invest assets in domestic legal entity, i.e. only with national legal entity or individual establish the enterprise for manufacturing and trade of armament and military equipment. Foreign investor may not have more than 49% of share in capital or interest, i.e. voting rights in the enterprise referred to in paragraph 1 of this article.”

13. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 3: Right of establishment and freedom to provide services Chapter 3: Right of establishment and freedom to provide services 2.1.3. FREEDOM TO PROVIDE SERVICES Law on Employment and Work of Foreigners Article 16 – refers on Cross-border Services of Foreigners Cross-border services of foreigners are services performed under the agreement signed between a foreign business company, i.e. a foreign citizen and a legal entity based in Montenegro for whom the services are performed. Cross-border services can be provided by a foreigner employed with a foreign business company engaged in providing these types of services. Cross-border services of foreigners, who are required to have a university degree and specialized knowledge and experience, may be provided by a foreigner without a working relationship. Before submitting the request for the work permit, a legal entity based in Montenegro shall be obliged, upon the written explanation, to obtain the consent from the State Administration body responsible for the activity in which the service is provided. The work permit is issued for the period of one year within the quota set for cross-border services.

14. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 3: Right of establishment and freedom to provide services Chapter 3: Right of establishment and freedom to provide services 2.2. SECTORAL REGIME LEGAL SERVICES Law on Advocacy (OG RM, No. 79/06), Lawyers: Pursuant to the Law on Advocacy (OG RM, No. 79/06), advocacy may be practiced by advocates that are enrolled in the directory of the Bar Association. The right on enrolment in the directory of the Bar Association has person that, inter alia, fulfils requirement that he/she is national of Montenegro. Foreign advocates may freely provide consultant services regarding international law and the rights of third countries, but representation before administrative and judicial tribunals is subject to the principle of reciprocity. Law on Notaries (OG RM, No. 68/05 and OG MNE, No. 49/08) Notaries: In accordance with the Law on Notaries (OG RM, No. 68/05 and OG MNE, No. 49/08) citizenship of Montenegro is one of the conditions for the appointment of notaries. Article 8 of the Law prescribes that foreign act has, with the condition of reciprocity, same legal affect as notary act made in accordance with this Law. Foreign notary act can be enforceable document, if it is referring to rights which are not opposite to legal order of Montenegro and if contains elements which are by law defined as necessary for enforcement. If notary act is made by domestic and foreign notary, notary act is considered as domestic public document if it is certified by stamp of a domestic notary. Law on Mediation (OG RM, No. 30/05) Mediators: Law on Mediation (OG RM, No. 30/05) by Article 12 prescribes that foreign national who is authorized to perform mediation in another country in proceeding with foreign element in certain cases may run a mediation procedure in Montenegro. Law on public enforcement agents (OG MNE, No. 61/11) Public enforcement agents: In accordance with the Law on public enforcement agents (OG MNE, No. 61/11) citizenship of Montenegro is one of the conditions for the appointment of Public enforcement agents.

15. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 3: Right of establishment and freedom to provide services Chapter 3: Right of establishment and freedom to provide services TAX ADVISOR SERVICES Law on Tax Advisors (OG RM, No. 26/07 and 34/07) Natural persons may carry out the activity of tax advisor as an independent profession if they have work license and specialized legal entities (company) for tax counseling may carry out this activity if registered for carrying out this activity. Activities of tax advisors can perform an individual who meets the general and special conditions. 1.The general requirements are: a) to be a citizen of Montenegro; b) to have a business and health requirements, and c) has not been convicted of a crime which makes it ineligible for tax advisers (a crime against: property, payment and business operations, state agencies, the judiciary and of official duties). 2.Special conditions are: a) to have a university degree; b) to have at least five years experience (work on the preparation and implementation of tax, customs and accounting regulations); c) to have passed the exam for tax advisor, and d) they had received approval to operate. ACCOUNTING AND AUDITING SERVICES Law on Accounting and Auditing (OG RM, No. 69/05, OG MNE, No. 80/08, 32/11) Law on Accounting and Auditing (OG RM, No. 69/05, OG MNE, No. 80/08, 32/11) in line with the Directive 2006/43/EC on statutory audits of annual accounts and consolidated accounts Articles 13, 14 16a and 16b

16. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 3: Right of establishment and freedom to provide services Chapter 3: Right of establishment and freedom to provide services VETERINARY SERVICES Veterinary Law ( OG MNE, 30/2012) Veterinary Law ( OG MNE, 30/2012) - university degree, professional exam and member of the Veterinary Chamber. Regulations on detailed requirements for issuing permits for veterinary practices (OG MNE, No. 9/2008 and 12/2008) Articles 2, 3 and 4 ENGEENERING AND ARCHITECTURAL SERVICES Law on spatial development and construction of structures (OG MNE, No. 51/08, 40/10 and 34/11) Law on spatial development and construction of structures (OG MNE, No. 51/08, 40/10 and 34/11) Articles 134, 135, 136, 137 and 138– License Regulations on requirements and the manner of certification and cancellation of license verifications for foreign entities (OG MNE, No. 68/08) Regulations on requirements and the manner of certification and cancellation of license verifications for foreign entities (OG MNE, No. 68/08) EDUCATION SERVICES General Law on Education (OG RM, No. 64/02, 31/05 and 49/07, OG MNE, No. 45/10 and 45/11) General Law on Education (OG RM, No. 64/02, 31/05 and 49/07, OG MNE, No. 45/10 and 45/11) Articles 43 and 46 Law on High Education ( OG RM, No. 60/03, OG MNE, No. 04/08, 45/10) Law on High Education ( OG RM, No. 60/03, OG MNE, No. 04/08, 45/10) Article 25 paras 1, 2, 3, 4 and 5 – License

17. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 3: Right of establishment and freedom to provide services Chapter 3: Right of establishment and freedom to provide services TOURISM SERVICES Law on Tourism ( OG MNE, No.61/10) Law on Tourism ( OG MNE, No.61/10) Travel guide - Travel guide - Professional exam for the travel guide is taken before a Committee formed by the Ministry, and according to the training and examination program, A professional examination certificate issued by the Ministry. Operating license and ID cards are issued within eight days of receiving the certificate of the professional examination. Information on given operating license for work and ID cards for tour guides, are registered in the Central Registry of Tourism. travel agencies The business association or company, other legal entity or entrepreneur, which intends to conduct travel agencies activities are obligated to this Ministry, as authority in charge, for issuing work permissions – license, according to Article 17 of the Law on Tourism must provide all necessary documentation. Determining the compliance with the minimum-technical conditions is provided by the Ministry of Sustainable Development and Tourism (Article 25, paragraph 1 of the Law on Tourism). Regulations for the minimum-technical conditions in terms of equipment and arranging offices and travel agencies and the method of determining these conditions (OG MNE, No. 73/10) Regulations for the minimum-technical conditions in terms of equipment and arranging offices and travel agencies and the method of determining these conditions (OG MNE, No. 73/10)

18. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 3: Right of establishment and freedom to provide services Chapter 3: Right of establishment and freedom to provide services DISTRIBUTION SERVICES Law on Internal trade (OG MNE, No. 49/08) For conducting the trade, conformity must be ensured with the following: minimal technical requirements to be met by business premises and other places of sale, the equipment and resources for conducting the trade, or other requirements depending on the type and specific forms of trade, and specific requirements depending on the type of the selling facility, or the type of goods in retail; and general sanitary and health requirements to be met by business premises, equipment and resources for conducting the trade, or by persons who are directly handling the goods which can affect human health, in accordance with specific regulations. CERTIFICATION SERVICES Law on Electronic Signature (OG RM, No. 55/03 and 31/05, OG MNE, No. 41/10) Law on Electronic Signature (OG RM, No. 55/03 and 31/05, OG MNE, No. 41/10) Ministry for information society and telecommunications shall enter certification service providers in records of certification service providers,. Entry in records shall not be subject to administrative procedure conduction. Records shall be public and kept in electronic form. In the register shall be registered, upon request, providers of certification services who have their headquarters abroad, if they meet the requirements referred to the law. The Decision shall be issued within 15 days after the day of proper application submission.

19. Chapter 3: Right of establishment and freedom to provide services M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 3: Right of establishment and freedom to provide services REAL ESTATE SERVICES Law on property relations ( OG MNE, No.19/09) Law on property relations ( OG MNE, No.19/09) Article 415 of the Law on property relations provides restriction about acquisition for real estate by foreign natural and juridical persons. But, Article 63 of Stabilization and Association Agreement, provides that Montenegro has obligation to ensure national treatment about acquisition for real estate, for citizens of states that are members of the European Union. CRAFT SERVICES Law on Crafts ( OG MNE, No. 54/09) Law on Crafts ( OG MNE, No. 54/09) Article 1, paragraphs 1 and 3, Article 9, paragraph 3, Article 11, Article 12, paragraph 1 paragraph 5, Article 17 Regulations on minimum technical requirements to be met by business premises, equipment and resources for the craft with the attached list of crafts for which performance business premises are needed (OG MNE, No. 76/2010) The Crafts Chamber of Montenegro is established by 20 professional associations on 28 March 2011, pursuant to Article 14, paragraph 1 of the Law on Crafts. The Crafts Chamber has a public authority to keep the Register of craftsmen based applications from the local Secretariats for Economy and it issues certificates of entry into the Register (Article 1 and 2 of the Law on Crafts )

20. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 3: Right of establishment and freedom to provide services Chapter 3: Right of establishment and freedom to provide services SPORT SERVICES Law on Sport ( OG MNE, No. 36/11) Law on Sport ( OG MNE, No. 36/11) Articles 38 and 41 refer to Establishment of sports organizations and conditions for establishment ENERGY SERVICES Law on Energy ( OG MNE, No. 28/10) Law on Energy ( OG MNE, No. 28/10) Articles 55-60 refer to Licenses and energy permits Rulebook on the manner and conditions for issuing, amendments and revocation of licenses for carrying out energy activities (OG MNE, No. 66/10) Rulebook on the manner and conditions for issuing, amendments and revocation of licenses for carrying out energy activities (OG MNE, No. 66/10) Articles 6 and 7

21. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union to provide services Chapter 3: Right of establishment and freedom to provide services Chapter 3: Right of establishment and freedom to provide services Complicated process for approximation of the legislation with SD There is no still national screening of legislation CONSEQUENCESCONSEQUENCES PROBLEMS CAUSESCAUSES Lack of motivation of employees who work on the implementation of SD The provisions of legal and other regulations are not analyzed relating to services in the domain of Directive on services A large number of authorities in charge of implementing SD Poor training of employees for the implementation of SD Inadequate and unregulated coordination between the relevant authorities

22. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 3: Right of establishment and freedom to provide services Chapter 3: Right of establishment and freedom to provide services IPA 2012- 2013/ COMPONENT I NAME OF THE PROJECT NAME OF THE PROJECT: Approximation of the legislation with EU Acquis IMPLEMENTATION MANAGEMENT IMPLEMENTATION MANAGEMENT: Delegation of the European Union Montenegro IMPLEMENTING MODALITY IMPLEMENTING MODALITY: Delegation Agreement with GIZ SPECIFIC OBJECTIVE SPECIFIC OBJECTIVE: Building the capacity of the Ministry of Economy to effectively transpose Directive on Services in the internal market 2006/123/EC and implement itRESULTS: 1. Comprehensive screening on the legislation in this area and further harmonisation of the legislation (Action plan for the transposition of the Directive on services in the internal market 2006/123/EC prepared) 2. Administrative capacity in Montenegro built for continuous screening and amending of the legislation according to the requirements of the Services Directive after the end of the project

23. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 3: Right of establishment and freedom to provide services Chapter 3: Right of establishment and freedom to provide services 3. ACTION PLAN (DECEMBER 2012 - JUNE 2013) Preparation of the Questionnaire and submitting to all relevant institutions December 2012 Screening of the national legislationScreening of the national legislation January- March 2013 Defining the List of services covered by the DirectiveDefining the List of services covered by the Directive March 2013 Fulfillment of Transposition tables for the SDFulfillment of Transposition tables for the SD April 2013 Preparation of the Action Plan for the SDPreparation of the Action Plan for the SD June 2013 Organization of the Workshops for WP Members December 2012 – June 2013

24. Thank you for your attention! QUESTIONS