diff --git a/compiler/frontend/src/org/jetbrains/jet/lang/psi/JetModifierList.java b/compiler/frontend/src/org/jetbrains/jet/lang/psi/JetModifierList.java
index 963e37911d4..bd9ae176367 100644
--- a/compiler/frontend/src/org/jetbrains/jet/lang/psi/JetModifierList.java
+++ b/compiler/frontend/src/org/jetbrains/jet/lang/psi/JetModifierList.java
@@ -22,6 +22,7 @@ import com.intellij.psi.PsiElement;
 import org.jetbrains.annotations.NotNull;
 import org.jetbrains.annotations.Nullable;
 import org.jetbrains.jet.JetNodeTypes;
+import org.jetbrains.jet.lexer.JetKeywordToken;
 import org.jetbrains.jet.lexer.JetToken;
 
 import java.util.ArrayList;
@@ -59,6 +60,20 @@ public class JetModifierList extends JetElementImpl {
         return answer != null ? answer : Collections.<JetAnnotationEntry>emptyList();
     }
 
+    @NotNull
+    public List<ASTNode> getModifierNodes() {
+        List<ASTNode> modifierNodes = new ArrayList<ASTNode>();
+
+        ASTNode node = getNode().getFirstChildNode();
+        while (node != null) {
+            if (node.getElementType() instanceof JetKeywordToken) {
+                modifierNodes.add(node);
+            }
+            node = node.getTreeNext();
+        }
+        return modifierNodes;
+    }
+
     public boolean hasModifier(JetToken token) {
         return getModifierNode(token) != null;
     }
diff --git a/compiler/frontend/src/org/jetbrains/jet/lang/resolve/DeclarationResolver.java b/compiler/frontend/src/org/jetbrains/jet/lang/resolve/DeclarationResolver.java
index 83d2b69e507..4965bcd008c 100644
--- a/compiler/frontend/src/org/jetbrains/jet/lang/resolve/DeclarationResolver.java
+++ b/compiler/frontend/src/org/jetbrains/jet/lang/resolve/DeclarationResolver.java
@@ -19,8 +19,10 @@ package org.jetbrains.jet.lang.resolve;
 import com.google.common.base.Function;
 import com.google.common.base.Predicate;
 import com.google.common.collect.*;
+import com.intellij.lang.ASTNode;
 import com.intellij.openapi.util.Pair;
 import com.intellij.psi.PsiElement;
+import com.intellij.psi.tree.IElementType;
 import org.jetbrains.annotations.NotNull;
 import org.jetbrains.annotations.Nullable;
 import org.jetbrains.jet.lang.descriptors.*;
@@ -29,10 +31,12 @@ import org.jetbrains.jet.lang.descriptors.impl.MutableClassDescriptorLite;
 import org.jetbrains.jet.lang.descriptors.impl.NamespaceDescriptorImpl;
 import org.jetbrains.jet.lang.descriptors.impl.NamespaceLikeBuilder;
 import org.jetbrains.jet.lang.psi.*;
+import org.jetbrains.jet.lang.psi.stubs.elements.JetAnnotationElementType;
 import org.jetbrains.jet.lang.resolve.name.Name;
 import org.jetbrains.jet.lang.resolve.scopes.JetScope;
 import org.jetbrains.jet.lang.resolve.scopes.WritableScope;
 import org.jetbrains.jet.lang.types.lang.KotlinBuiltIns;
+import org.jetbrains.jet.lexer.JetKeywordToken;
 import org.jetbrains.jet.renderer.DescriptorRenderer;
 
 import javax.inject.Inject;
@@ -88,6 +92,7 @@ public class DeclarationResolver {
 
 
     public void process(@NotNull JetScope rootScope) {
+        resolveNamespaceHeaders();
         resolveAnnotationConstructors();
         resolveConstructorHeaders();
         resolveAnnotationStubsOnClassesAndConstructors();
@@ -98,6 +103,29 @@ public class DeclarationResolver {
         checkRedeclarationsInInnerClassNames();
     }
 
+    private void resolveNamespaceHeaders() {
+        for (JetFile file : context.getNamespaceDescriptors().keySet()) {
+            JetNamespaceHeader namespaceHeader = file.getNamespaceHeader();
+
+            if (namespaceHeader != null) {
+                PsiElement firstChild = namespaceHeader.getFirstChild();
+
+                if (firstChild instanceof JetModifierList) {
+                    JetModifierList modifierList = (JetModifierList) firstChild;
+
+                    for (JetAnnotationEntry annotationEntry : modifierList.getAnnotationEntries()) {
+                        JetReferenceExpression reference = annotationEntry.getCalleeExpression().getConstructorReferenceExpression();
+                        trace.report(UNRESOLVED_REFERENCE.on(reference, reference));
+                    }
+
+                    for (ASTNode node : modifierList.getModifierNodes()) {
+                        trace.report(ILLEGAL_MODIFIER.on(node.getPsi(), (JetKeywordToken) node.getElementType()));
+                    }
+                }
+            }
+        }
+    }
+
     private void resolveAnnotationConstructors() {
         for (Map.Entry<JetClass, MutableClassDescriptor> entry : context.getClasses().entrySet()) {
             MutableClassDescriptor classDescriptor = entry.getValue();
diff --git a/compiler/testData/diagnostics/tests/IllegalModifiers.kt b/compiler/testData/diagnostics/tests/IllegalModifiers.kt
index 46bb50f64af..c1639f36585 100644
--- a/compiler/testData/diagnostics/tests/IllegalModifiers.kt
+++ b/compiler/testData/diagnostics/tests/IllegalModifiers.kt
@@ -1,4 +1,4 @@
-package illegal_modifiers
+<!UNRESOLVED_REFERENCE!>myAnnotation<!> <!ILLEGAL_MODIFIER!>public<!> package illegal_modifiers
 
 abstract class A() {
     <!INCOMPATIBLE_MODIFIERS!>abstract<!> <!INCOMPATIBLE_MODIFIERS!>final<!> fun f()