MONTENEGRO Negotiating Team for the Accession of Montenegro

MONTENEGRO Negotiating Team for the Accession of Montenegro to the European Union Working Group for Chapter 28 – Consumer and Health Protection Bilateral screening: Chapter 28 PRESENTATION OF MONTENEGRO Brussels, 15 -16 April 2013

Chapter 28: Consumer and Health Protection Directive 2009/22/EC of the European Parliament and of the Council of 23 April 2009 on injunctions for the protection of consumers' interests Zvezdan Čađenović Union of Employees zcadjenovic@yahoo. com MONTENEGRO Negotiating Team for the Accession of Montenegro to the European Union Chapter 28: CONSUMER AND HEALTH PROTECTION

Chapter 28: Consumer Protection and Public Health Contents q Relevant Acquis q National Legislation q Institutional Framework q Level of transposition (key rules) q Enforcement q Future activities MONTENEGRO Negotiating Team for the Accession of Montenegro to the European Union Chapter 28: CONSUMER AND HEALTH PROTECTION

Chapter 28: Consumer Protection and Public Health Relevant acquis Ø Directive 2009/22/EC of the European Parliament and of the Council of 23 April 2009 on injunctions for the protection of consumers' interests, including specific provisions found in: Ø Council Directive 93/13/EEC on unfair terms in consumer contracts Ø Directive 97/7/EC on the protection of consumers in respect of distance contracts Ø Directive 2001/83/EC on the Community code relating to medicinal products for human use Ø Directive 2005/29/EC on unfair business-to-consumer commercial practices MONTENEGRO Negotiating Team for the Accession of Montenegro to the European Union Chapter 28: CONSUMER AND HEALTH PROTECTION

Chapter 28: Consumer Protection and Public Health National Legislation Ø Law on Consumer Protection, OG RMN No. 26/07 (Art. 112, 113, 114, 115, Art. 124, 127 LCP), aims to ensure minimum protection of collective interest of consumers (injunctions) trough judicial protection (civil litigation track) – advertising, unfair contract terms and dangerous products, and administrative protection (administrative protection track), while setting the grounds for “qualified entities” in both tracks. Ø Law on Inspection Surveillance, OG MN No. 39/03 to 57/11, general legal framework that provides for measures of inspectors to take administrative protection actions seeking an injunction, and in accordance with separate laws (e. g. LCP and other CP laws). MONTENEGRO Negotiating Team for the Accession of Montenegro to the European Union Chapter 28: CONSUMER AND HEALTH PROTECTION

Chapter 28: Consumer Protection and Public Health National Legislation Ø Law on enforcement and provisional measures OG MN No. 36/11, (Art. 220 and 221) provides for a civil penalty (monetary penalty) for violation of judgements for non-monetary obligations (e. g. prohibition or cessation) Ø Law on Obligations, OG MN No. 47/08, subordinated application, general contract law applicable in B 2 B, B 2 C, B 2 P, and P 2 P transactions. Art. 294 empowers courts in case of non compliance with non-monetary obligation (e. g. prohibition or cessation) , to state that debtor is in obligation to pay to the creditor a certain amount of money for each day of default or for any other time-span, starting with the expiration of the set time limit. MONTENEGRO Negotiating Team for the Accession of Montenegro to the European Union Chapter 28: CONSUMER AND HEALTH PROTECTION

Chapter 28: Consumer Protection and Public Health Institutional Framework Ø Beside Mo. E and Authority for Inspection Surveillance, other main institutions and stakeholders: - Consumer NGO`s, eligible to seek an injunction for the protection of collective interest of consumers - Courts, take decisions based on collective complaints. MONTENEGRO Negotiating Team for the Accession of Montenegro to the European Union Chapter 28: CONSUMER AND HEALTH PROTECTION

Chapter 28: Consumer Protection and Public Health Level of transposition (Key rules I) Level of transposition: High* Ø Definitions (Art. 2 [8. 11. 24 an 27 LCP): - Consumer - natural person who buys, orders, accepts, uses goods or services, including public services, for non-business, namely non-professional purposes, or to whom the offer for a product or service is targeted; - Trader - a person who sells goods or provides services to consumers (no transposition of wording “in the course of his trade, business or profession”, although Art. 6 of the Law on Internal Trade to certain extent eliminates this gap) - Circulation to consumers - sale of goods or provision of services to the consumers as the end users, and provision of the samples of goods; Consumer organisation - non-governmental organisation which protects consumer interests, as well as alliances of consumer protection organisations - MONTENEGRO Negotiating Team for the Accession of Montenegro to the European Union Chapter 28: CONSUMER AND HEALTH PROTECTION

Chapter 28: Consumer Protection and Public Health Level of transposition (Key rules II) Ø General Scope: - Montenegrin legal system provides for specific provisions on protection of collective interest of consumers trough actions for termination or prohibition of infringements (injunctions) which are contrary to such collective interests. - It provides for two tracks of protection: “judicial (civil courts)” and “administrative (inspections supervision)” - Same as in Directive the is no definition of “collective interest of consumers”, yet aligned with: - Recital 3 of the Directive 2009/22/EC “Collective interests means interests which do not include the cumulation of interests of individuals who have been harmed by an infringement. This is without prejudice to individual actions brought by individuals who have been harmed by an infringement. ” - Case C-167/00 Verein für Konsumenteninformation vs. Karl Heinz Henkel [2002] “the action for injunction is not an action arising from a “contract”. That action protects wider collective interest of the consumers and the basis for such an action is not in “contractual” obligations of the trader, but in his non-contractual obligations (delict or quasi-delict). “ MONTENEGRO Negotiating Team for the Accession of Montenegro to the European Union Chapter 28: CONSUMER AND HEALTH PROTECTION

Chapter 28: Consumer Protection and Public Health Level of transposition (Key rules III) Ø General Scope: - LCP provides for minimum protection of collective interest of consumers (injunctions) trough judicial protection (civil litigation track). - Narrower than in the Directive Annex I – provides for injunction only as for advertising, unfair contract terms and product safety (extension to the Directive), - LCP builds the grounds for “qualified entities” in both “judicial protection” and “administrative protection” – provide for Consumer organizations to seek injunctions and state inspectors to order measures. - LIS, together with LCP provides for general powers of state inspectors to initiate measures seeking injunctions MONTENEGRO Negotiating Team for the Accession of Montenegro to the European Union Chapter 28: CONSUMER AND HEALTH PROTECTION

Chapter 28: Consumer Protection and Public Health Level of transposition (Key rules IV) Bodies designated to rule on injunctions Ø Administrative protection - State inspectors – LCP in conjunction with LIS (Art. 124 LCP). LCP empowers market inspectors and other inspectors (e. g. tourism, health and sanitary, veterinary, transport, telecommunications etc. ) for supervision of implementation of provisions of this laws, while LIS is general piece of law on powers and obligations of state inspectors. - Montenegrin legal system concentrates both functions (1) pursuing the request and (2) decision-making in same competent body. State inspectors pursue the protection of consumers collective interests ex officio (on its own motion). - Decisions made are subject to administrative appeal and judicial review (Art. 40 LIS). Ø Judicial protection - Civil Courts (Art. 113, 114 and 115 LCP), empowers courts to issue decision based on action brought by “qualified entities“ that seeks injunction. MONTENEGRO Negotiating Team for the Accession of Montenegro to the European Union Chapter 28: CONSUMER AND HEALTH PROTECTION

Chapter 28: Consumer Protection and Public Health Level of transposition (Key rules V) Actions for an injunction (Order for cessation or prohibition of any infringement) Ø Administrative protection (Art. 127 LCP, in conjunction with Art. 15, 16 and 40 LIS) - Art. 127 LCP: In addition to administrative measures in LIS, competent inspector can temporarily ban a trader or distributor from circulating particular products (list of infringements provided – limited level of harmonization with Directive Art. 1 and Annex I). - Art. 15 LIS: empowers and put inspector in obligation to determine a time-limit for infringement removal, including to temporarily prohibit undertaking of businesses or other service. - Art. 16 LIS: Whenever law or by-law is violated or prescribed standards and requirements are not met, the inspector is obliged to take administrative measures in a special law (e. g. LCP and other CP laws), in particular: - - order removal of the product from circulation prohibit production, use or supply of goods and services prohibit undertaking of any act, which jeopardizes human environment, property or poses risk to life or health of people order an undertaking of other actions, aimed to securing of remedying determined irregularities, in accordance with a special law. Decisions made are subject to administrative appeal and judicial review (Art. 40 LIS). MONTENEGRO Negotiating Team for the Accession of Montenegro to the European Union Chapter 28: CONSUMER AND HEALTH PROTECTION

Chapter 28: Consumer Protection and Public Health Level of transposition (Key rules VI) Actions for an injunction (Order for cessation or prohibition of any infringement) Ø Judicial protection (Art. 113, 114 and 115 LCP) - Civil litigation track, with limited scope of applicability (limited harmonization with Directive Art. 1 and Annex I): only covering advertising, unfair contract terms and product safety; - Types of advertising: misleading and comparative advertising, discriminatory, advertising that propagates violence, concealed advertising and advertising intended for underage persons (Art. 84 to 89 LCP). - Court can: - - ban: 1) production and circulation of dangerous product 2) prohibited advertisement, including publication of the advertisement still not published declare contract term unfair (null and void) In addition: until the final decision is made Court may temporarily order ban: - of the advertisement for which is made plausible to have elements of a forbidden advertisement of the use of contractual provisions for which it is made believable that they are unfair under LCP production and circulation of the products for which is made plausible case that are unsafe MONTENEGRO Negotiating Team for the Accession of Montenegro to the European Union Chapter 28: CONSUMER AND HEALTH PROTECTION

Chapter 28: Consumer Protection and Public Health Level of transposition (Key rules VII) Actions for an injunction (Publication of decisions/corrective statements) Ø Judicial protection (Art. 113 (3), 114 (5)and 115 (5) LCP) - Civil litigation track, with limited scope of applicability (limited harmonization with Directive Art. 2 (1) (b) and Annex I – only covering advertising and product safety; - Publication of decision in “Official Gazette of Montenegro" and at least 1 daily newspapers of national vide coverage (no indication “in part/full”) - Decisions on unfair contract terms, not published but subject to submission to Consumer Protection NGO`s with purpose to inform consumers – not equal to “publication”. - No publication of corrective statement, with the view of eliminating the continuing effect of the infringement. Ø Further shortcomings: the issue of cost of publication not addressed; “publicity” within the Official Gazette is rather fictitious (average consumers don’t read it); in most cases, publication of the decision in part, not in full should be sufficient. MONTENEGRO Negotiating Team for the Accession of Montenegro to the European Union Chapter 28: CONSUMER AND HEALTH PROTECTION

Chapter 28: Consumer Protection and Public Health Level of transposition (Key rules VIII) Actions for an injunction (Directive Option: Payments in case of failure to comply with the decision) Ø both the judicial protection and administrative protection legal framework provide for periodical pecuniary penalties as a measure of enforcement of decisions and judgments, relating to obligation of cessation or prohibition. Ø Administrative protection (Art. 59 LIS) - Enforcement by way of pecuniary penalty if the subject of surveillance (trader) is ordered to do something or to refrain from doing something, and does not respect the imposed measure, whereby the latter can not be enforced by other means. The imposition of the penalty may be repeated till the subject of surveillance fulfills the obligation. Ø Judicial protection (Art. 230 and 231 Law on Enforcement and Provisional Measures, in conjunction with Art. 294 Lo. O) - provisional measures provides also for a possibility to seek astreinte, thus a civil penalty for violation of judgments for non-monetary obligation (such as: prohibition or cessation). This is a periodical civil penalty, that goes to the benefit of the claimant (thus: consumer organization) till the obligation imposed is not fulfilled. MONTENEGRO Negotiating Team for the Accession of Montenegro to the European Union Chapter 28: CONSUMER AND HEALTH PROTECTION

Chapter 28: Consumer Protection and Public Health Level of transposition (Key rules IX) Entities qualified to bring an action Ø Administrative protection (Art. 124 and 127 LCP, in conjunction with LIS e. g. Art. 16) - Authority for Inspection Supervision – market and other inspections (e. g. tourism, health and sanitary, veterinary, transport, telecommunications etc. ) Ø Judicial protection (Art. 113(1), 114(1) and 115(1) LCP) - individual consumer, consumer organizations or other interested parties can file a complaint to seek an injunctions. - partially transposed, since injunction can bee sought only with regard to dangerous products, advertisement and unfair contract terms, limited level of harmonization scope of application, pursuant to Art. 1 and Annex I of the Directive is much broader) MONTENEGRO Negotiating Team for the Accession of Montenegro to the European Union Chapter 28: CONSUMER AND HEALTH PROTECTION

Chapter 28: Consumer and Health Protection Level of transposition (Key rules X) Other protective instruments (Cross border infringements and prior consultations) Directive LCP Acceptance of legal capacity of the qualified entity from one Member State to seek injunction in other Member State X (not transposed, no provision in LCP on legal capacity of qualified entities from other countries (e. g. EU Member States) Communication to the Commission of the name and purpose of qualified entities X (not transposed, no determination in the law on how and to whom, qualified entities would be entitled to submit requests for their inclusion on the list) Option, prior consultations X MONTENEGRO Negotiating Team for the Accession of Montenegro to the European Union Chapter 28: CONSUMER AND HEALTH PROTECTION

Chapter 28: Consumer Protection and Public Health Future plans Ø ME in 3 rd and 4 th quarter 2010 initiated a detailed screening of 11 CP directives (including Directive 2009/22/EC), supported by IPA 2009 Project (AIM) Ø Guidelines for Harmonization of Montenegrin CP legislation (blueprint for new LCP) http: //www. mek. gov. me/Resource. Manager/File. Download. aspx? rid=126923&r. T ype=2&file=Guidelines%20 for%20 Harmonisation%20 of%20 Montenegrin%20% 20 CP%20 Legislation. pdf Ø Draft new Law on Consumer Protection, fully harmonized with Directive 2009/22/EC and ready to be adopted by Go. M (Art. 117– 129 Draft LCP). MONTENEGRO Negotiating Team for the Accession of Montenegro to the European Union Chapter 28: CONSUMER AND HEALTH PROTECTION

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