IMPORTANT EVENTS IN

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1 IMPORTANT EVENTS IN

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3 January The Government adopted the Economic Reform Program for Montenegro for the period Montenegro is ranked 49 th of 144 countries on the list of best countries for business, according to the American Forbes Magazine. February The Council of the Central Bank of Montenegro issued a decision on licensing Azmont Bank Podgorica. The American Heritage Foundation ranked Montenegro 65 th on the list of global economic freedoms of total 178 ranked countries, with 64.9 points or 0.2 points more than in the previous year. The Agro budget adopted by the Government of Montenegro envisages million euros to be allocated for agriculture in Representatives of Montenegro and Albania signed in Tirana a Partnership Agreement for the Management of Technical Support of Instruments for Pre-Accession Assistance (IPA), under the Cross- Border Cooperation Program of the two countries. March On the international capital market, Montenegro realized the issue of new five-year bonds in the amount of 300 million euros, with an interest rate of 5.75%. The leading arrangers were City Bank, Deutsche Bank AG, London Branch, Erste Group Bank AG, and Société Générale. The Board of the Association of Montenegrin Banks, other financial organizations and insurance, and the Chamber of Commerce of Montenegro set up a working group that will initiate amendments to the legislation in the direction of modernizing the banking sector through the development of e-banking. Through the Financial Support Program for 2016, the Investment and Development Fund offered a new interest free credit line to unemployed university students, i.e. future businessmen and agricultural producers, interested in starting and developing their own business. The shareholders of Montenegro Airlines made a decision on the conversion of debt into equity capital in the amount of 2.09 million euros at the extraordinary session of the General Meeting. Important Events in 2016 Seven commercial banks with million euros participate in the project apartments aimed at resolving housing needs in Montenegro. 149

4 Central Bank of Montenegro CBCG Macroeconomic Report 2016 April The Government adopted a Regulation on the conditions for postponing the collection of tax and nontax receivables, which allows taxpayers faced with illiquidity to overcome the problem through relaxation in the payment of debt, while providing adequate guarantees for its settlement. Representatives of the chambers of commerce of Montenegro and Slovenia signed a Business Cooperation Agreement, which should contribute to the promotion and development of economic relations, encouraging cross-border and strengthening traditional links. May Montenegro accepted the Trade Facilitation Agreement Facility (TFAF) which contains provisions for facilitating the movement and customs clearance of goods. Representatives of Montenegro Business Alliance and Tax Administration agreed that the White list, which includes taxpayers with the highest degree of fiscal discipline, includes small and medium enterprises, which would contribute to the quality and scope of their business and business reputation. Podgorica, Budva, Danilovgrad, Bijelo Polje, and Žabljak are the first Montenegrin local governments that entered the Business Friendly Certification South East Europe (BFC SEE) and thus have the opportunity to improve the business environment in line with best EU practices. The privatization contract for the Institute Dr Simo Milošević signed by representatives of the Government of Montenegro and London International Wellness Group (IWG) ceased to be valid due to non-fulfilment of the contractual obligations of the buyer. June The Government approved the proposal of the balance sheet of the Budget of Montenegro for The Parliament of Montenegro adopted amendments to the Law on Pension and Disability Insurance, which envisages an increase in pensions as of July, as well as the Decision on awarding the hydrocarbons production concession contract in Montenegro undersea. The European Union, in the framework of the invitation to submit projects of the Western Balkan Investment Framework, allocated additional 4.2 million euros to Montenegro for the preparation of infrastructure projects. Montenegrin electricity transaction system`s shareholders adopted the Decision on credit indebtedness for financing the construction of energy infrastructure for the Luštica project, while the General Meeting of Montenegrin Electric Enterprise (EPCG) made a decision on the founding of a new power distribution system company - Crnogorski elektrodistributivni sistem (CEDIS). The operational dispatching centre of the Tax Administration commenced its work. It was designed to successfully implement the action plan for monitoring the tourist season and providing technical support to inspectors in monitoring the regularity of taxpayers` business. 150

5 July The Parliament of Montenegro adopted a set of amendments of the following laws: Law on Bankruptcy Procedure, Law on Corporate Profit Tax, Law on Insurance, Law on Administrative Fees, Law on Takeover of Joint Stock Companies, Rafting Law, Law on Peaceful Labour Dispute Resolutions, Law on Representation of Trade Unions, Labour Law, and Pension and Disability Insurance Law. The Government adopted the Strategy for the development of the information society of Montenegro until 2020, with a view to achieving the European Union`s standards in this area, larger implementation of information and communication technologies and economic growth of the state. The Parliament of Montenegro adopted the Decision on accepting a shareholder agreement between the Government and the Italian company A2A, defining their mutual relations in managing EPCG. The Green for Growth Fund (GGF) for South East Europe approved a prime loan to the MFI Alter Modus in the amount of 2 million euros, as a part of the agreement on investing in the growing energy efficiency market of Montenegro. August Montenegro`s national airline carrier Montenegro Airlines and the Serbian airline carrier Air Serbia concluded a code share agreement that will allow passengers to have a better connection to travel between Europe, the Middle East, and North America. September The Law on Amendments to the Law for Conversion of CHF-denominated Loans to Euro-Denominated Loans entered into force. Representatives of the Government of Montenegro and the Italian-Russian ENI and Novatek consortium signed the concession agreements for the production of hydrocarbons in Montenegro undersea. The Board of Executive Directors of the World Bank Group approved a loan for additional financing in the amount of 3 million euros for the Institutional Development and Agriculture Strengthening project in Montenegro (MIDAS). October According to the new World Bank Doing Business 2017 report, Montenegro ranked 51 st of 190 countries and recorded a worse result than in the previous year. The Government adopted a draft fourth annex to the concession agreement for the exploration and exploitation of metal ores in the former mine Brskovo near Mojkovac, which extends the deadline for the company North Mining to complete the research. Important Events in 2016 Company Uniprom signed a 15 million euro worth cooperation agreement with the Austrian company Hertwich Engineering for the construction of a billet factory of 60 thousand ton production capacity and a silumin alloy factory of a 30 thousand ton of alloy production capacity. 151

6 Central Bank of Montenegro CBCG Macroeconomic Report 2016 November The Parliament of Montenegro adopted amendments to the Budget Law for 2016 (revision) which amounts to 2.03 billion euros or 100 million euros less than foreseen in the Budget Law for The government passed the Decision on the issuance of government bonds in order to provide funds for financing the deficit, the capital budget, servicing the debt, and creating a fiscal reserve of the Budget of Montenegro for Representatives of Montenegro and China signed in Riga a Memorandum of Cooperation in the area of production and processing of medicinal plants, which created the conditions for investing 11 million euros in this area. The Government adopted the Regulation on business zones, which determines the conditions for their establishment, classification according to strategic importance, as well as incentives for users. December The Parliament of Montenegro adopted the Draft Budget Law for 2017 in the amount of some 2 billion euros designed in such way that current budget spending is to be fully financed from source revenues. The Parliament of Montenegro adopted a set of laws aimed at consolidating public finances and implementing the Rehabilitation plan for the budget deficit and public debt, which includes the Law Amending the Law on Social and Child Protection, the Law Amending the Law on Excise Taxes, the Law Amending the Law on Value Added Tax, the Law Amending the Law on Salaries of Civil Servants and State Employees, and the Law on Rescheduling Tax Debt. The Government adopted the Decision on the Energy Balance of Montenegro for 2017, which includes the balance of electricity, coal and oil products, as well as the measures for implementation of the set projections. The companies Energia gas and power Podgorica and Petrol Crna Gora MNE were awarded power supply licenses. 152