What is being negotiated?
A customs union is an area where there are no internal barriers to the movement of goods, while common rules, customs duties and quotas apply to imported goods. It was established on 1 April 1968.
The main goals of the Customs Union are to create a free trade zone, strengthen economic relations between member states, accelerate the development of trade activities, raise living standards and ensure better employment opportunities by increasing productivity and achieving financial stability.
The acquis consists of legislation that is binding on all Member States. It is the responsibility of each Member State to build the capacity to implement legislation, including links to the relevant electronic customs system of the European Union and to ensure the application of specific rules established in related areas of the acquis, such as foreign trade.
When was the chapter opened?
On 16 December 2014 the Chapter 29 – The Customs Union was officially opened at the Intergovernmental Conference in Brussels.
Closing benchmarks?
In Chapter 29, the EC defined three closing benchmarks:
- Montenegro continues to adopt legislation in the remaining areas requiring further alignment; it should in particular align its legislation on customs status and transit, customs risk management and security aspects, including the Authorised Economic Operator (AEO) program, intellectual property rights, and drug precursors.
- Montenegro applies its customs rules consistently and efficiently across its customs offices, notably in the areas of declaration processing, origin, simplified procedures, intellectual property rights, and selectivity of controls and risk analysis (including automated pre-arrival/pre-departure risk analysis across all modes of transport).
- Montenegro reaches sufficient progress in developing all the required IT interconnectivity systems, in particular the New Computerised Transit System (NCTS), the Integrated Tariff Management System (ITMS), the Export Control System (ECS) and the Import Control System (ICS).
What are the activities in the coming period?
The closing benchmarks in Chapter 29 – Customs Union are primarily focused on the harmonization and implementation of the necessary European legislation. The customs legislation of Montenegro is largely in line with the acquis, in particular the legislation relating to customs tariffs, customs exemptions and protection of intellectual property at the border. Montenegro monitors the dynamics of changes in customs regulations at the EU level and, in accordance with the EU, is reforming its legislation in order to apply European standards in this area. However, the main challenge in the field of customs is the implementation of IT systems at the national level. Having in mind the fact that these are financially very demanding projects whose implementation requires a longer period of time, their establishment will be done both at the national level and with the help and support of the EU. According to the mentioned, in December 2024, the IT Strategy of Customs Administration 2024-2026 was adopted. It contains plans for the establishment of the IT systems.
What is the benefit to Montenegro of this chapter?
The customs union is a single customs area of the member states of the European Union in which the total internal trade and trade in goods between member states takes place without customs formalities, ie without customs control over the goods, and without the collection of customs duties. The customs union protects people and facilitates trade. It surrounds the EU’s internal market and allows products to move freely in the area by controlling exports and imports of products. In this way, consumers are protected from dangerous products and health risks, and animals and the environment from plant and animal diseases. Customs is also the first line of defense against organized crime and terrorism.
The EU is the world’s largest trading bloc and therefore, in a global sense, and in that sense the EU has a better negotiating position than any member state separately. With the date of EU accession, Montenegro will become part of the internal market, which will facilitate the export of domestic products to a market with 500 million consumers.
The fact that there will be no collection of customs duties means that the citizens of Montenegro will be able to buy better quality products from any EU member state at significantly lower prices than today.