director - Ministarstvo finansija

State aid
BULLETIN OF THE MINISTRY OF FINANCE/JANUARY-MARCH 2006
State aid
With future signing of the Stabilization
and Association
Agreement (SAA), obligation
to harmonize national legislation with
the EU regulations enters into force,
including adoption of a Law on State
Aid Control which is to be adopted by
the Parliament of Montenegro. Upon
adoption of the Law, a single regulation
will be introduced in the state aid field,
based on principles of market economy,
with the aim of maintaining competition
and meeting internationally assumed
obligations.
The Ministry of Finance, together
with expert assistance from the PLAC
(Policy and Legal Advice Center, the EU
financed project) consultants, has been
working on a Draft Law on State Aid
Control, the adoption of which is scheduled
for the second quarter of 2006
under the Government Agenda. The
Draft Law has also been submitted to
the European Commission, which positively
marked both the Law and progress
achieved in the field of creating and introduction
of regulations in the area of
state aid in Montenegro.
The fact is that single regulatory framework
in the field of state aid has been
in place in the EU for many years. Upon
implementation of the regulatory and
institutional framework for state aid
control in Montenegro, earlier practice
will cease to exist, according to which
granting of the state aid has been governed
by individual enactments, with no
precise conditions and rules for its preparation
and allocation, and with no
mechanisms of control for granting, use,
subsequent approval and recovery of the
state aid.
Therefore, by adoption of the Law on
State Aid Control, general conditions
and rules for preparation, granting, control
of granting and use, subsequent approval
and recovery of state aid will be
defined, which will enable: phasing out
of any kind of state aid that distorts or
threatens to distort competition by giving
advantage to certain companies or
products, which is assessed according to
the rule on competition in the EU (Articles
81,82,86,87 of the Treaty on European
Union); establishing of an independent
operational agency authorized for
supervision and control of the procedure
related to granting and use, subsequent
approval and recovery of state
aid, which will be empowered to assess
programs and individual state aids and
to order recovery of unlawful state aid.
Establishing of a transparent system
of state aid control also has positive effects
by itself with respect to economic
policy making, rational planning of the
state budget and budget deficit management,
easier reporting and efficient cooperation
with international institutions
with which Montenegro has financial
arrangements, as well with respect
to making appropriate industrial policies
and regional development policies.
In favour of transparency in the field of
state aid, in compliance with the European
Commission recommendations,
the Ministry of Finance submitted the
first Report on Inventory of State Aid in
the Republic of Montenegro to the
Commission in August 2005. The Report
on Inventory of State Aid in the Republic
of Montenegro covers all direct state
subventions paid from the budget of
the Republic of Montenegro, including
any payment facilities and exemptions
in 2003 and 2004.
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