Kosovo: Deal with UAE allows violation of EU rights and Stabilization and Association Agreement, implementation crucial, EC offers assistance

The Agreement on Cooperation in the Field of Tourism and Real Estate Development between the Governments of Montenegro and the United Arab Emirates (UAE) does not at first glance contradict European Union (EU) law or the Stabilization and Association Agreement of Montenegro with the EU (SAA), as it lacks sufficient details, but improper application and interpretation of some of its provisions could lead to violations of these regulations in the field of public procurement and discrimination against European and Montenegrin companies in favor of potential investors from the UAE.

"Vijesti" has learned that this is the essence of yesterday's response from European Commissioner for Enlargement Marta Kos to President Jakov Milatović's request to receive an official opinion from her on the compliance of this agreement with the acquis communautaire of the European Union, the SAA and the values ​​it cherishes. Milatović requested the opinion to help him decide whether to promulgate the Law on the ratification of this agreement, which the two governments signed on March 28 and the parliament adopted on April 23.

Although he had not received the opinion of Kos, on April 29, Milatović returned this Law to the Parliament for reconsideration, while he signed the decree promulgating the Agreement on Economic Cooperation with the UAE.

Kos, in his opinion, cites Article 2.4 of the Agreement as particularly problematic, which states that "all contracts, programs and further agreements with investors from the UAE are exempt from the legislation of both countries relating to public procurement, public tenders and public bidding procedures," a diplomatic source familiar with the contents of the letter to Milatović told "Vijesti".

"She believes that it is possible for future contracts to be awarded directly, which could violate EU public procurement rules, noting that some provisions will have to be carefully implemented to avoid violating the principles of public procurement from EU regulations, which Montenegro is obliged to apply," the source told Vijesti, adding that Kos emphasizes that it is therefore important to monitor their implementation "in order to avoid possible irregularities."

As for compliance with the SAA, Kos argues that this will depend on the interpretation and implementation of the "Projects" described in Article 1 of the Agreement.

"The following projects in the field of tourism and real estate development, which have been jointly identified and are considered strategic and represent projects of public interest, as follows: a) Development of a project in the south of Montenegro, as an integrated development of tourism and mixed-use real estate; b) Development of a ski resort in the north of Montenegro, as an integrated development of tourism and mixed-use real estate", is the definition of "Projects" in the agreement. .

Kos believes that, if implemented incorrectly, the Agreement could potentially weaken the position of Montenegrin and EU companies, if UAE companies are favored in this process.

"The Commissioner said that the SAA contains very broad provisions on the opening of the public procurement market, based on non-discrimination and reciprocity, equal treatment between EU and Montenegrin companies, as well as transparency of public procurement procedures," said a source for "Vijesti".

Kos stressed that it will be very important, when implementing the Agreement, to ensure its compliance with the EU acquis in the field of public procurement — which is based on the principles of non-discrimination, equal treatment and transparency.

She said that the interpretation and application of the Agreement will have to be carefully managed to avoid the possibility of irregularities materializing, offering the European Commission's assistance in this.

"Kos noted that transparency, compliance with public procurement rules, state aid, investor selection, broader influence on public finance management and the fight against corruption, as well as compliance with environmental standards, will be of utmost importance in this context," said the interlocutor of "Vijesti".