Law of Ukraine

“On Ratification of the Free Trade Agreement between the Government of Ukraine and the Government of Montenegro”

Date of entry into force:
November 16, 2012

The Free Trade Agreement between the Government of Ukraine and the Government of Montenegro (hereinafter referred to as “Agreement”) was signed on November 18, 2011 in Kyiv.

The Law ratifies the Agreement.

According to Article 1 of the Agreement, Ukraine and Montenegro create a free trade area according to the provisions of the Agreement and the WTO regulations. The objectives of the Agreement are:
  • developing and expanding economic cooperation, and increasing the standard of living of the people of both countries;
  • eliminating obstacles and restrictions in the trade of goods, and liberalizing the trade in services;
  • facilitate harmonious development of economic relations between the Parties through the development of mutual trade;
  • facilitate harmonious development and expansion of world trade by overcoming barriers to trade;
  • facilitate trade and cooperation between the Parties on third-party markets.

The Agreement does not exclude preservation or creation of customs unions, free trade areas, agreements on cross border trading, and other preferential agreements, to the extent that they do not change the trade arrangements stipulated by the Agreement. When a Party becomes member of a customs union or party to a free trade agreement with a third party it shall, on demand of the other Party, consult with the demanding Party (Article 4 of the Agreement).

Article 5 of the Agreement establishes that the Agreement does in no way limit the obligations of the Parties that arise from their participation in regional and subregional unions and organizations, multilateral agreements, and international organizations. The provisions of the Agreement do not influence the rights and obligations arising from agreements concluded between the Parties before or after the Agreement takes effect, except so that their provisions are compatible with the provisions of the Agreement.

Chapter II of the Agreement is dedicated to trade in goods.

Trade in services is regulated by Chapter III of the Agreement.

Chapter IV of the Agreement establishes the dispute resolution procedure. According to Article 45 of the Agreement, the provisions of Chapter IV of the Agreement are applied to resolution of any disputes related to the interpretation or application of the Agreement, except when the Agreement provides otherwise. Disputes related to the same issue that arise both under the Agreement and the WTO Agreement can be regulated at either of the two forums, at the discretion of the complaining Party. The forum chosen thusly is used at the exclusion of the other forum.

The Parties shall, at all times, strive to reach concert on the interpretation and application of the Agreement and shall take all efforts to cooperate and consult for the purpose of reaching a mutually acceptable resolution of any issue posed according to Article 47 of the Agreement. If such consultations, when related to urgent matters, including goods with limited shelf life, do not result in a dispute resolution within 60 days of the date of receipt of the request for consultation by the accused Party, the dispute can be handed over to the arbitration commission, by means of a written request of the complaining Party addressed to the accused Party (Article 48 of the Agreement).

The procedures of the arbitration commission are established in Article 49 of the Agreement.

Article 55 of the Agreement envisages creating a joint Ukrainian-Montenegrin Committee in the Issues of Free Trade (hereinafter referred to as “Committee”) for the purposes of complete and efficient implementation of the Agreement provisions. The tasks of the Committee are:
  • overseeing and verifying the fulfillment of the Agreement, inter alia, through comprehensive supervision of the implementation of the Agreement provisions, with appropriate regard to any specific reservations contained in the Agreement;
  • looking out for opportunities for further removal of barriers to trade and other restricting measures related to trade between the Parties;
  • overseeing further development of the Agreement;
  • attempting to resolve disputes that may arise in relation to interpretation or implementation of the Agreement;
  • reviewing any other issues that may influence the effect of the Agreement.
The Committee meets as necessary, by request of one of the Parties, in the alternating capitals of both states, on agreed dates.

The Law aims to:
  • increase the export of Ukrainian goods and services to the Montenegro market by improving the terms of access of Ukrainian products to the Montenegro market, and by expanding markets for Ukrainian products in the Balkan region;
  • strengthening the traditional exports of Ukrainian companies to the Montenegro market;
  • expanding the structure and nomenclature of the Ukrainian export by optimizing bilateral trade and economic cooperation;
  • ensuring Ukraine’s efficient use of the transit advantages of goods and services through Montenegro, particularly in the context of the European integration of the Parties.
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