What is being negotiated?

The Customs Union is an area where there are no internal barriers to the movement of goods, while goods imported from outside are subject to common rules, tariffs, and quotas. It was established on 1 April 1968.

The main objectives of the Customs Union are to:

• Create a free trade zone,

• Strengthen economic relations between member states,

• Accelerate the development of trade activities,

• Raise the standard of living, and

• Ensure better employment opportunities through increased productivity and financial stability.

The acquis of the Customs Union consists of legislation that is binding for all EU member states. Each member state is obliged to develop the capacity to implement this legislation, including links to the relevant EU electronic customs systems, and to ensure the application of specific rules established in related areas of EU law, such as foreign trade.

When was the chapter opened?

Chapter 29 – Customs Union was officially opened on 16 December 2014 at the Intergovernmental Conference in Brussels.

Benchmarks for closing

In Chapter 29, the European Commission defined three final benchmarks:

1. Montenegro continues to adopt legislation in remaining areas requiring further alignment, primarily harmonizing its legislation in areas such as:

   • Customs status and transit,

   • Customs risk management and security aspects (including the Authorized Economic Operator (AEO) program),

   • Intellectual property rights, and

   • Precursors for drugs.

2. Montenegro consistently and effectively applies its customs regulations at all customs offices, especially in areas such as:

   • Declaration processing,

   • Origin of goods,

   • Simplified procedures,

   • Intellectual property rights,

   • Selectivity of controls, and

   • Risk analysis (including automated risk analysis before goods arrival/departure in all transport modes).

3. Montenegro makes sufficient progress in developing all necessary interconnected IT systems, particularly:

   • The New Computerized Transit System (NCTS),

   • Integrated Tariff Management System (ITMS),

   • Export Control System (ECS), and

   • Import Control System (ICS).

Planned activities for the upcoming period

The final benchmarks in Chapter 29 – Customs Union primarily focus on alignment and implementation of the necessary EU legislation. Montenegro’s customs legislation is largely aligned with the acquis, especially regarding:

• Customs tariffs,

• Customs exemptions, and

• Protection of intellectual property rights at the border.

Montenegro monitors the EU-level amendments to customs legislation and reforms its national legislation to comply with EU standards. However, the main challenge remains the implementation of IT systems at the national level.

Given that these are financially demanding projects requiring a long implementation period, their establishment will take place both nationally and with EU support. In this context, the Customs Administration IT Strategy 2024–2026 was adopted in December, outlining the plan for building IT systems.

Benefits for Montenegro

The Customs Union represents a single customs territory of EU member states, where internal trade and movement of goods between member states take place without customs formalities, controls, or duties. The Customs Union protects people and facilitates trade. It surrounds the EU internal market and allows the free movement of products, monitoring both exports and imports. This ensures that:

• Consumers are protected from dangerous products and health risks,

• Animals and the environment are protected from plant and animal diseases, and

• Customs serve as a first line of defense against organized crime and terrorism.

The EU is the largest trading bloc in the world and therefore has a stronger negotiating position globally than any single member state. By joining the EU, Montenegro will become part of the internal market, facilitating the export of domestic products to a market of 500 million consumers.

The fact that customs duties will no longer be applied means that Montenegrin citizens will be able to purchase higher-quality products from any EU member state at significantly lower prices than today.