Milatović: EC opinion represents a warning and calls for caution before the second parliamentary vote on the Agreement with the UAE

The opinion of the European Commission (EC) represents a kind of warning and calls for caution before the second parliamentary vote on the Agreement on Cooperation in the Field of Tourism and Real Estate Development between the Governments of Montenegro and the United Arab Emirates (UAE), the President of Montenegro, Jakov Milatović, announced today.

"Vijesti" announced this morning that the essence of yesterday's response by European Commissioner for Enlargement Marta Kos to Milatović's request was that "The Agreement on Cooperation in the Field of Tourism and Real Estate Development between the Governments of Montenegro and the United Arab Emirates (UAE) is not at first glance contrary to European Union (EU) law or the Stabilization and Association Agreement of Montenegro with the EU (SAA), because it does not contain enough 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."

"I thank the European Commission for the opinion submitted on the Agreement between Montenegro and the United Arab Emirates (UAE). This opinion confirms what I have been pointing out from the beginning - that the content of the disputed Agreement is such that its implementation would not be in line with the EU acquis, and that it was necessary to conduct a thorough public debate on this Agreement within Montenegro and to consult the European Union ex-ante, of which we wish to become a full member. As the President of the state, I signed the Agreement on Economic Cooperation with the UAE in the belief that it opens up space for improving cooperation and strengthening economic ties between our two friendly countries," Milatović emphasized in a statement.

He added that, however, he did not sign the controversial Agreement on Cooperation in the Field of Tourism and Real Estate Development because he believed that it raised numerous issues regarding its compliance with the constitutional and legal order of Montenegro, but also that there were clear reservations regarding its implementation in relation to the EU acquis.

"The European Commission's opinion states that the Agreement, prima facie, does not contain sufficiently detailed provisions that would be directly contrary to EU law. However, the European Commission expressly emphasizes that the implementation of certain provisions of the Agreement - especially those that are the subject of the greatest public attention, and concern exemptions from public procurement - would be contrary to EU law. Also, as regards the compliance of the Agreement with the Stabilization and Association Agreement, the European Commission emphasizes that this will depend on the interpretation and implementation of the Projects described in Article 1 of the Agreement. Specifically, the Commission states that Article 2.4 of the Agreement provides for the exemption of all contracts, programs and further agreements with investors from the UAE from the law on public procurement, tenders and competitive procedures, which could lead to the direct award of contracts. This would, as stated in the opinion, constitute a violation of European Union public procurement regulations," said Milatović.

According to him, the Commission warns that such a practice could lead to preferential treatment of companies from the UAE compared to companies from the EU and Montenegro, which, as Milatović said, is contrary to the fundamental principles of market equality and non-discrimination.

"It is emphasized that it is essential that, if this Agreement is implemented, it ensures compliance with EU rules on public procurement, based on the principles of non-discrimination, equal treatment of companies and transparency of public procurement procedures. It clearly follows from this that the application of Article 2.4, which provides for the exemption of future contracts arising from this Agreement from the law on public procurement, tenders and competitive procedures, would actually be legally untenable - because in accordance with the EU acquis, a public tender would have to be organized, which is contrary to the text of the Agreement. Therefore, by adopting an Agreement whose key provisions cannot be implemented without violating EU norms, Montenegro could mislead either its international partners from the UAE or the European Union," said Milatović.

He said that he therefore calls on the Government, in cooperation with the UAE, to improve the text of the existing Agreement in order to define clear, precise and legally sustainable provisions of the Agreement that will be fully compatible with the EU acquis and the legal order of Montenegro.

"I welcome the European Commission's willingness to assist Montenegro on this issue and I call on the Government to accept this assistance. The Commission has clearly stated that in this context, transparency, compliance with the rules on public procurement, state aid, investor selection, public finances, the fight against corruption and environmental protection are crucial - because these are precisely the elements of utmost importance for Montenegro's progress on our European path. To conclude, it is clear that the opinion of the European Commission represents a kind of warning and calls for caution before the second parliamentary vote on this document. Bearing in mind all the arguments that I have already presented in the explanation of the return of the Law, which concern its inconsistency with the constitutional and legal order of Montenegro, as well as the remarks of the competent state agencies for the prevention of corruption and protection of competition, and now also the arguments presented by the European Commission, I call on the Parliament of Montenegro not to ratify this Agreement in its current form," Milatović stated.

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.