Explanatory Memorandum to COM(2007)350-2 - Conclusion of the Stabilisation and Association Agreement with Montenegro

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1. The attached two proposals constitute the legal instruments for the signature and the conclusion of the Stabilisation and Association Agreement between the European Communities and their Member States, on the one part, and the Republic of Montenegro, hereinafter called Montenegro, on the other part: (i) Proposal for a Council Decision for the signature of the Agreement; (ii) Proposal for a Council and Commission Decision for the conclusion of the Agreement.

2. The Commission presented in April 2005 its Feasibility Report on an SAA with Serbia and Montenegro i. The Report concluded that Serbia and Montenegro were sufficiently prepared to negotiate an SAA the Council decided on 3 October 2005 to authorise the Commission to negotiate a Stabilisation and Association Agreement with Serbia and Montenegro. The negotiation for a Stabilisation and Association Agreement with Serbia and Montenegro was launched on 10 October 2005.

3. Following a referendum in May 2006, the Montenegrin Parliament adopted on 3 June 2006 a Declaration of Independence and the Republic of Montenegro withdrew from the State Union of Serbia and Montenegro. Consequently, new Negotiating Directives for Montenegro was adopted on 24 July 2006 and negotiations resumed on 25 September 2006. These negotiations were finished on 1 December 2006 and after consultations with the EU Member States, the results of the negotiations the Stabilisation and Association Agreement was initialled in Podgorica on 15 March 2007.

4. The Stabilisation and Association Agreement focuses on the following main elements:

- provision for political dialogue with Montenegro;

- provisions on enhanced regional co-operation, including the perspective of establishing free trade areas between the countries of the region;

- the perspective of the establishment of a free-trade area between the Community and Montenegro within five years of the entry into force of the Agreement;

- provisions on the movement of workers, freedom of establishment, supply of services, current payments and movement of capital;

- the commitment by Montenegro to approximate its legislation to that of the EC, notably in key areas of the internal market;

- provisions on co-operation with Montenegro in a wide range of fields, including justice, freedom and security.

- provision for the establishment of a Stabilisation and Association Council which supervises the implementation of the Agreement, of a Stabilisation and Association Committee and a Stabilisation and Association Parliamentary Committee.

5. The Commission asks the Council to give its final approval to the text of the SAA, which were undertaken in close consultation with the Special Committee created for this purpose (namely COWEB), and to engage the procedures for the signature and conclusion of this Agreement on the basis of the attached two proposals.

6. The procedures for the signature and the conclusion of the Agreement are different for the two European Communities: (the European Community and the European Atomic Energy Community):

a) as regards signature, the first indent, first sentence of Article 300  i of the EC Treaty provides for a separate Council Decision concerning the signing of the Agreement on behalf of the European Community; similar acts are not required under the EAEC Treaty

b) as regards conclusion of the Agreement:

- The Council concludes the Agreement on behalf of the European Community, after having received the assent of the European Parliament, by virtue of Article 310 of the Treaty;

- The Council approves the Agreement on behalf of the European Atomic Energy Community by virtue of the second paragraph of Article 101 of the EAEC Treaty and the Agreement is then concluded by the Commission.

7. In line with the above the Commission requests the Council to (i) decide on the signature of the Agreement on behalf of the European Community (ii) conclude the Agreement on behalf of the European Community and to give its approval for conclusion by Euratom.

Ratification by all Member States is a prerequisite for the entry into force of the Agreement.

Proposal for a

COUNCIL DECISION

on the signing of the Stabilisation and Association Agreement between the European Communities and its Member States and the Republic of Montenegro on behalf of the European Community

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 310 in conjunction with the first sentence of the first sub paragraph of Article 300  i thereof,

Having regard to the proposal from the Commission i,

Whereas:

Negotiations with Republic of Montenegro on the Stabilisation and Association Agreement between the European Communities and their Member States, of the one part, and Montenegro, of the other part, have been completed.

The commercial provisions contained in this agreement are of an exceptional nature, connected with the policy implemented within the framework of the Stabilisation and Association Process and will not constitute, for the European Union, any precedent in the commercial policy of the Community with regard to third countries other than those of the Western Balkans.

Subject to a possible conclusion at a later date, the Agreement initialled on 15 March 2007 should therefore be signed on behalf of the European Community,

HAS DECIDED AS FOLLOWS:

Sole Article

Subject to its possible conclusion at a later date, the President of the Council is hereby authorised to designate the persons empowered to sign, on behalf of the European Community, the Stabilisation and Association Agreement between the European Communities and their Member States, of the one part, and the Republic of Montenegro, of the other part.

Done at Brussels,

For the Council

The President