EUROPEAN COMMISSION Strasbourg,17.4.2018 SWD(2018) 150 final COMMISSION STAFF WORKING DOCUMENT Montenegro 2018 Report Accompanying the document Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions 2018 Communication on EU Enlargement Policy {COM(2018) 450 final}



Table of Contents 1. Introduction 1.1. Context 1.2. Summary of the Report 2. Fundamentals first: political criteria and rule of law chapters 2.1. Functioning of democratic institutions and Public Administration Reform 2.1.1. Democracy 2.1.2. Public Administration Reform 2.2. Rule of law and fundamental rights 2.2.1. Chapter 23: Judiciary and fundamental rights 2.2.2. Chapter 24: Justice, freedom and security 3. Fundamentals first: Economic development & competitiveness 3.1. The existence of a functioning market economy 3.2. The capacity to cope with competitive pressure and market forces within the Union 4. Regional issues and international obligations 5. Ability to assume the obligations of membership 5.1. Chapter 1: Free movement of goods 5.2. Chapter 2: Freedom of movement for workers 5.3. Chapter 3: Right of establishment and freedom to provide services

5.4. Chapter 4: Free movement of capital 5.5. Chapter 5: Public procurement 5.6. Chapter 6: Company law 5.7. Chapter 7: Intellectual property law 5.8. Chapter 8: Competition policy 5.9. Chapter 9: Financial services 5.10. Chapter 10: Information society and media 5.11. Chapter 11: Agriculture and rural development 5.12. Chapter 12: Food safety, veterinary and phytosanitary policy 5.13. Chapter 13: Fisheries 5.14. Chapter 14: Transport policy 5.15. Chapter 15: Energy 5.16. Chapter 16: Taxation 5.17. Chapter 17: Economic and monetary policy 5.18. Chapter 18: Statistics 5.19. Chapter 19: Social Policy and employment 5.20. Chapter 20: Enterprise and industrial policy 5.21. Chapter 21: Trans-European networks 5.22. Chapter 22: Regional policy and coordination of structural instruments 5.25. Chapter 25: Science and Research

5.26. Chapter 26: Education and Culture 5.27. Chapter 27: Environment and climate change 5.28. Chapter 28: Consumer and health protection 5.29. Chapter 29: Customs union 5.30. Chapter 30: External relations 5.31. Chapter 31: Foreign, security and defence policy 5.32. Chapter 32: Financial control 5.33. Chapter 33: Financial and budgetary provisions Annex I - Relations between the EU and Montenegro Annex II – Statistical annex



1.Introduction 1.1. Context Accession negotiations with Montenegro were opened in June 2012. To date 30 negotiating chapters have been opened, of which 3 have been provisionally closed. In June 2017 Montenegro became a member of NATO. Montenegro continued to broadly implement the Stabilisation and Association Agreement and the meetings of the joint bodies under the agreement took place on regular intervals. Six negotiating chapters were opened during the reporting period and one provisionally closed. Holding the accession conferences was made possible also due to the progress made in the area of the rule of law, as per the requirements of the Negotiating Framework. Progress towards meeting the interim benchmarks set in the rule of law chapters will be key for further progress in the accession negotiations. 1.2. Summary of the Report Concerning the political criteria, the reporting period has been marked by the low level of trust towards the electoral framework and the prolonged parliamentary boycott by the entire opposition since the October 2016 parliamentary elections. Returning the political debate to the Parliament is the responsibility of all political actors. Parts of the opposition returned to the Parliament in December 2017, but this partial and selective ending of the boycott is yet to result in improved parliamentary dialogue and scrutiny. The political scene remains fragmented, polarised and marked by lack of political dialogue, notably in the democratic institutions. The parliamentary legislative capacity and the oversight of the executive needs to be further enhanced. The parliament still addresses the State Audit Institution's audit findings in a limited manner, and there is no discussion or reporting on implementation of major policies and legislation. In December 2017, the Parliament adopted without proper public consultation a set of laws which only partially address the recommendations of the OSCE's Office for Democratic Institutions and Human Rights (OSCE/ODIHR). A comprehensive electoral reform should be considered. There were 8 local elections in the reporting period. Local elections do not take place on the same day nationwide, but on a rolling bases; thus a prolonged and highly personalised election mood characterises the political landscape. Due to the electoral cycle, election observation is difficult, particularly for international observers, leaving ample room for claims of irregularities that cannot be independently evaluated. There were no new developments in the political and judicial follow-up of the alleged misuse of public funds for party political purposes in 2012 (the 'audio recordings affair'). As regards governance, there is a need to strengthen transparency, stakeholders' participation, and the government's capacity to implement reforms. Coherence of the policy-making system should be ensured through co-ordinated policy development. Mechanisms for government's consultation of civil society organisations are in place, but they need clear rules, and genuine involvement on both sides.

Montenegro is moderately prepared with the reform of its public administration. Good progress has been made, notably through the adoption of new laws on civil servants and state employees and on local self-government aimed at implementing merit-based recruitment across the public service. Strong political will is still needed to effectively address the depoliticisation of the public service and the optimisation of the state administration, as well as to ensure efficient implementation and financial sustainability of reforms. Montenegro’s judicial system is moderately prepared and some progress has been made. The legislative framework on the judiciary aimed to increase its independence and professionalism has yet to be fully implemented. Institutional capacity has been strengthened. Montenegro has achieved some level of preparation in the fight against corruption. Despite some progress, corruption is prevalent in many areas and remains an issue of concern. The operational capacity of institutions has improved; however, all institutions should demonstrate a more proactive attitude. Challenges to the credibility, independence and priority-setting of the Anti-Corruption Agency need to be addressed. Financial investigations and seizure and confiscation of assets remain to be improved. An initial track record of investigation, prosecution and final convictions in high-level corruption cases has been established, but needs to be further consolidated. Further improvements of the track record of successful investigations and convictions will only be possible in an environment where independent institutions are shielded from any undue influence and incentivised to fully use their powers. In the fight against organised crime, there is an initial track record of prosecutions in the fight against smuggling of migrants and against drug trafficking. However, further results are needed to produce a convincing track record, in particular in the fight against money laundering and trafficking in human beings. On fundamental rights, Montenegro further aligned its legislation with EU standards. In particular the work of the Ombudsman office has improved, but more efforts are still needed in strengthening the institutional framework and effective protection of human rights. Following the progress made on anti-discrimination legislation, Montenegro now needs to ensure that adequate institutional mechanisms are in place to protect vulnerable groups from discrimination. Implementation of the legislation remains weak and institutional capacity on human rights needs to be increased. The Roma minority remains the most vulnerable and most discriminated community. Gender-based violence and violence against children remains a serious concern in the country. Montenegro has achieved some level of preparation on freedom of expression, but no progress was made in the reporting period. There have been no notable developments regarding investigations into old cases of violence against journalists. Recent political interference in the national public broadcaster Council and the Agency for Electronic Media are a matter of serious concern. The media scene remains highly polarised and challenges in understanding the role of free media persists. The number of defamation cases remains high, also due to weak self-regulatory mechanisms. Montenegro remained constructively committed to bilateral relations with other enlargement countries and neighbouring EU Member States and an active participant in regional cooperation. As regards the economic criteria, Montenegro has made some progress and is moderately prepared in developing a functioning market economy. Macroeconomic and fiscal stability were strengthened but further efforts are required to address persistent challenges, especially the high public debt burden. The economy has been growing uninterruptedly since 2013 amidst low or moderate inflation. The financial sector has improved its solvency and liquidity. However, the export base needs to improve in scope and in quality to reduce the trade deficit. Rule of law weaknesses, including unfair competition from the informal economy, negatively impact on the business environment. The labour market faces structural challenges, reflected in low participation and high unemployment rates. Montenegro has made some progress and is moderately prepared in terms of capacity to cope with competitive pressure and market forces within the Union. The construction of key infrastructure in a number of areas as well as developing human capital set the basis for improved competitiveness. Education reform is ongoing, but more efforts are needed to address the skills mismatch. SMEs remain confronted with numerous challenges, such as access to finance or regulatory complexity. Further efforts are still required to improve the overall export performance of local companies. Concerning Montenegro's ability to assume to the obligations of membership, important work on alignment and preparation for the implementation of the acquis has taken place in most areas. The country has a good level of preparation in areas such as company law and foreign, security and defence policy. It is moderately prepared in many chapters, such as free movement of goods, agriculture, food safety, veterinary and phytosanitary policy. Montenegro is at an early stage of preparation regarding fisheries and budgetary and financial provisions, and at some level of preparation in the area of environment and climate change, statistics, social policy and employment. Good progress has been made in the areas of company law, agriculture and rural development, food safety, veterinary and phytosanitary policy. There has been backsliding in the area of public procurement. Looking ahead, Montenegro should focus in particular on competition policy, environment and climate change and public procurement. Strengthening the administrative capacity for ensuring the application of the acquis remains a substantial challenge for Montenegro. Montenegro has continued to align with all EU common foreign and security policy positions and declarations. Although Montenegro so far remained outside the main Western Balkans migration route to the EU, it witnessed an increase in the number of migrants/asylum seekers entering its territory and must therefore strengthen its capacity to cope with sudden increases in migration-related pressure. Montenegro made further progress in particular on the migration-related legal framework. While Montenegro’s capacity to handle asylum requests has been sufficient so far, it might now be challenged by: (i) the growing number of asylum seekers and the extended length of their stays, sometimes due to lengthy appeal procedures; and (ii) the introduction of more demanding asylum procedures, aligned with the EU standards. In this context, Montenegro needs to put in place a return mechanism for irregular migrants, which is in line with the EU acquis, as well as to align its visa policy progressively with the EU’s. Montenegro should open additional reception facilities that meet the required standards and improve management of all facilities. Further to the adoption of the Schengen action plan in February 2017, Montenegro continued to align its legislation with the EU acquis on visas.

2.Fundamentals first: political criteria and rule of law chapters 2.1. Functioning of democratic institutions and Public Administration Reform 2.1.1. Democracy The reporting period was marked by prolonged parliamentary boycott by the entire opposition following the October 2016 parliamentary elections. Returning the political debate to the Parliament is the responsibility of all political actors. Only in December 2017, parts of the opposition returned to the Parliament. The partial and selective ending of the boycott is yet to result in improved parliamentary scrutiny. The Presidential Elections were held on 15 April 2018. Elections The overall situation is marked by a low level of trust in the electoral framework and conduct of elections. In December 2017, without proper public consultation, the Parliament adopted a set of laws, which only partially address the recommendations of the Office for Democratic Institutions and Human Rights of the Organisation for Security and Cooperation in Europe (OSCE/ODIHR). A comprehensive electoral reform should be considered. The Presidential elections held in April 2018, were observed by the OSCE/ODIHR. In October 2017, the Parliament established a parliamentary working group to propose a methodology for implementing the OSCE/ODIHR recommendations on the electoral reform. The working group was composed of ruling majority Members of Parliament (MPs) only, as the three opposition parties which qualify for membership did not appoint representatives. None of the sessions were open to the public, nor have the conclusions of the meetings been published. All interested parties were invited to provide comments and suggestions on how to implement the recommendations. However the revised electoral legislation itself was not subject to a public consultation. The recommendations issued by OSCE/ODIHR Election Observation Mission, following the October 2016 elections, have partially been addressed, as the Parliament passed a set of election related laws in December 2017: amendments to the media Law, the Law on voter register and the Law on financing political entities and election campaigns. The draft amendments to the Law on councillors and representatives did not reach the required twothirds majority.

As the framework electoral Law requiring a two-thirds majority was not amended, there were no significant improvements regarding the electoral administration or the residence and legal competence requirement, which have been OSCE/ODIHR priority recommendations. Recommendations for which no legal changes are needed also remain unaddressed, including measures to ensure greater transparency and professionalisation of the electoral administration, namely the State Electoral Commission. Given the remaining substantial shortcomings, a comprehensive electoral reform should be considered. Involvement of women in politics remained low, including in the electoral administration. There are no women among the political party leaders and very few in the parties' leadership. Electoral lists satisfy minimum requirements in terms of gender equality. The cross-party Women Political Network has formulated concrete measures and financial incentives to increase women political representation Following the 2016 parliamentary elections, the Special Prosecution Office (SPO) opened 198 cases to investigate alleged violations of the electoral rights. Of these cases, 113 have been closed due to lack of evidence, while in six cases, indictments have been issued. In three cases, suspended final sentences have been issued. In one case the sentence was two months imprisonment; in two cases the criminal charges were dismissed. Civil Society Organisations (CSO) and opposition political parties consider the judiciary's follow up as inadequate and as further eroding public trust in elections. Following a short electoral campaign period, given the nomination of candidates late in the process, regular Presidential Elections we held in April 2018. The election was observed by national and international observers, including the OSCE/ODIHR Monitoring Mission. There were 8 local elections in the reporting period. Local elections do not take place on the same day nationwide, but on a rolling bases; thus a prolonged and highly personalised election mood characterises the political landscape. Due to the electoral cycle, election observation is difficult, particularly for international observers, leaving ample room for claims of irregularities that cannot be independently evaluated. Local elections in Nikšić were boycotted by the opposition. For the local elections held in November 2017, both the governing party and the opposition parties reported irregularities on voting procedures and incidents between party activists. Irregularities were also reported in the February 2018 local elections, which resulted in a rerun in a limited number of polling stations. There were no new developments in the political and judicial follow-up of the alleged misuse of public funds for party political purposes in 2012 (the 'audio recordings affair'). Parliament The political scene remains fragmented, polarised and marked by a lack of political dialogue, particularly in the democratic institutions where it belongs. Elected members of Parliament have an important role to ensure checks and balances. With the exception of one opposition coalition group and 3 independent MPs, who returned to the Parliament in December 2017, the opposition as a whole has boycotted its legislative activity since the Parliament's convocation in November 2016. Political dialogue and constructive engagement by all parties is required to enhance parliamentary accountability and oversight of the executive. Following the October 2016 parliamentary elections, the new Parliament was convened in November. The number of women Members of Parliament (MPs) increased from 15 to 19, now accounting for 23 %. The political scene has fragmented further, with serious rifts not only between ruling and opposition parties, but also within some opposition parties, which led to the creation of a new party in September 2017. This situation prevented meaningful political dialogue from taking place. In spite of the fragmentation, the opposition has been overall united in enforcing a consistent boycott of Parliament's legislative activities and a more selective boycott of its sessions since November 2016. The opposition insists that the alleged election-day coup attempt in October 2016 has decisively affected the turnout and results of the elections, rendering them essentially flawed. This claim is strongly rejected by the ruling party. Both the legislative and oversight role of parliament have been hampered by the opposition boycott. While the Parliament was nominally functional with 42 votes of 81 present (In December 2017 the number reached 63) the absence of the opposition negatively impacted democratic scrutiny of the legislative procedure and the quality of parliamentary debate. In the absence of the entire opposition until December 2017, any law could be adopted within a time-frame which in a normally functioning parliament, with the opposition participating in the discussions and legislative committees, would be equivalent to an urgent procedure. The same is true for appointments made by the Parliament. There have been cases which are problematic from the point of view of integrity of selected candidates. The parliament has dismissed members of the national public broadcaster RTCG Council, while the related legal proceedings have still been pending. Parliament's capacity to scrutinise proposed legislation for compliance with EU acquis remains low. The parliamentary oversight of the executive needs to be further enhanced. Parliament continued to addresses the State Audit Institution's audit findings in a limited manner, and there is no discussion or reporting on the implementation of major policies and legislation. Parliament's code of ethics, which allows complaints from citizens, the media, and interested parties, has been in place since 2014, but no complaints alleging breaches of the code have been submitted since October 2016. No complaints were addressed to the human rights and anti-corruption committees. A considerable number of MPs attended training sessions on conflict of interest and good conduct. In 2017, 3 MPs have been deprived of their immunity at the request of the state prosecution, leading to 1 prison sentence in a case which the opposition claims constitutes political persecution. Two judicial proceedings involving opposition MPs are currently underway. Parliament's administrative capacity has been enhanced, with a slight increase in the number of employees, although no new premises were provided. At administrative level, the Parliament maintained a high level of transparency. The main legal framework regulating political parties is contained in the Law on Political Parties and the Law on the Funding of Political Subjects and Electoral Campaigns, amended in December 2017, with the aim to implement some of the OSCE/ODIHR recommendations. Additional shortcomings in the existing legal framework, including those identified by OSCE/ODIHR, are yet to be addressed. These include: (i) leaving unregulated the exact duration of electoral campaigns, (ii) failing to ensure further strengthening of women's participation in politics and (iii) further professionalisation of the Election Commission. The level of budgetary political party financing is considerably above the regional average. The task of monitoring political party financing lies with the Anti-Corruption Agency, which has taken steps to develop a methodology for quality risk assessment and in-depth control, which has been lacking so far. Governance The government's capacity to implement reforms, transparency and stakeholders' participation need to be strengthened, and the coherence of the policy-making system should be ensured through co-ordinated policy development. Political dialogue in democratic institutions is necessary for the overall sustainability and inclusiveness of governance. New units of local selfgovernment have been established, while their competences in some fields have been reduced. Local public finances are still to be consolidated. EU accession remains Montenegro's key foreign-policy goal, since Montenegro became a member of NATO in June 2017. The new government, elected in November 2016, led by Prime Minister Dusko Markovic, is composed of 19 ministers and 3 deputy prime ministers (2 of whom are also ministers). Four ministers are women, as in the previous cabinet. Newly established ministries include a Ministry of European Affairs and a Ministry of Public Administration. The Minister of European Affairs and Chief Negotiator resigned in February 2018 after the Anti-Corruption Agency found him to be in conflict of interest. The decision is being challenged in front of the Administrative Court.

While the framework is in place for ensuring coherent policy-making, policy development and co-ordination remain weak. The government should ensure that central government bodies cooperate and lead the strategic planning, oversee the execution, ensure the capacity to steer the policy-development process and establish a regular administrative-level coordination mechanism involving all central government bodies. The government has been sharing EU accession process related documents, such as the rule of law non-papers, with the public, in line with the Law on free access to information. Stakeholders' inclusion in the EU accession process should however be further improved, and the process itself should be made more transparent. Systematic and genuine public stakeholder consultation is still not a standard feature of the legislative process. The absence of a genuine political dialogue in the Parliament and the subsequent lack of parliamentary oversight have contributed to a significant increase in the number of laws submitted to the Constitutional Court by the opposition, civil society, the Ombudsman and others. As regards local self-government, the adoption of the Law on Spatial Planning and Construction in September 2017 met with criticism from civil society and a number of mayors, given its political ramifications. The law centralises spatial planning and construction to the level of the Ministry of Sustainable Development and Tourism, thus abolishing the right of the local authorities to adopt and issue spatial plans and permits. The main opposition leaders have challenged the law in front of the Constitutional Court. In July, the Parliament adopted the Law on the Old Capital which establishes a special fund of 1 % of the national annual budget for the development of the city of Cetinje, thus effectively doubling its municipal budget. The new legislation raises concerns over national and municipal fiscal consolidation. Municipalities in Montenegro continue to struggle with fiscal consolidation. All but one municipality adopted the Code of ethics for elected representatives and officials and the Code of ethics for local civil servants and state employees. Both are to be monitored by specific commissions. Civil society Some progress was made in improving the legal and institutional framework for cooperation between the government and civil society organisations, particularly on setting the legal basis for public funding of Non-Governmental Organisations. There is a general acknowledgement that civil society has an important role in the accession process, but beyond CSOs' formal participation in various working groups, the conditions for a genuine consultation process remain to be strengthened. Mechanisms are in place for government to consult CSOs but these mechanisms need additional resources, clear rules and genuine involvement on both sides. An empowered civil society is a crucial component of any democratic system and should be recognised and treated as such by the state institutions. Since May 2017, the National Office for Cooperation with NGOs is subordinated to the Ministry of Public Administration. Its role is to monitor the implementation of the government's NGO development strategy. The Council for the Development of NGOs, an advisory body gathering representatives of ministries and of NGOs, is still not functional. There are several channels for dialogue between CSOs and public institutions on sectoral policies. CSOs participate in various working groups, including on accession negotiations. However, the efficiency and planning of the consultation process should be improved to make it genuinely inclusive. Cooperation between NGOs and local governments is still not sufficiently developed. Conditions for voluntary work and civic activism should be improved so that they are more conducive to such activities. The legal framework for volunteering remains overly restrictive. The financial regulatory environment for CSOs should be improved. In June 2017 amendments were adopted to the law on NGOs, with the aim of achieving a more effective system of public funding for CSOs. The amendments set a minimum percentage of the annual state budget to be allocated to civil society projects and introduce new standards and procedures for public funding of NGOs. The amended law also makes provision for a decentralised system of funding and a centralised system of strategic planning. This requires ministries to organise sector-specific consultations with relevant CSOs, if cooperation with civil society is part of their sectorial strategy. Secondary legislation in this area still needs to be prepared. 2.1.2. Public Administration Reform Montenegro is moderately prepared with the reform of its public administration. Good progress has been made, notably through the adoption of new laws on civil servants and state employees and on local self-government aimed at implementing merit-based recruitment across the public sector, in line with the Commission 2016 recommendations. However, strong political will is still needed to effectively address the de-politicisation of the public service and the optimisation of the state administration, as well as to ensure efficient implementation and financial sustainability of reforms. In the coming year, Montenegro should in particular: → further ensure professionalisation and de-politicisation of the public service, notably by adopting the secondary legislation needed to implement the new laws on civil servants and state employees and on local self-government; → substantially upgrade the quality of policy planning, by introducing a medium-term planning framework, including fiscal planning, and by ensuring the consistency and coordination of sector strategies; → improve the quality of regulatory impact assessments and ensure that inclusive public consultations are properly conducted without unjustified restrictions on their scope. Policy development and coordination The legal framework and institutions are in place to ensure a coherent policy-making system, including for European integration. However, coordination among key centre of government institutions has been more focused on procedural issues than on substance, hence limiting the effectiveness of the planning system. Policy planning is mainly done on an annual basis, since the government has no comprehensive medium-term planning framework. The medium-term fiscal plan is not linked to policy plans. While several (sector) strategies do not yet have proper costing, the first Medium Term Government Programme 2018-2020 was adopted in February 2018.

Structured dialogue between government and parliament on policy priorities, and on acquis alignment is not fully ensured, and several laws were adopted via urgent procedure (9% in 2016). In December 2016 tasks related to policy development and coordination were entrusted to the Ministry for European Affairs, and a new Ministry of Public Administration was established. Reports on implementation of Montenegro's Programme of Accession to the EU are published regularly. The 2018-2020 Programme of Accession to the EU was adopted in early 2018. Inclusive and evidence-based policy and legislative development remains only partially ensured. Policy development capacity needs to be increased. Public consultations on legislative proposals are regulated by law, and they have to be performed using eGov portal which has eParticipation module for public consultations. However, they are not implemented in a uniform manner by all institutions, and they are often done too late in the process. Undue limitations to the scope of public consultations need to be avoided. Regulatory impact assessments are more systematically produced in the legislative process, but adequate resources need to be assigned to performing regulatory impact assessments by ministries and quality control by the Ministry of Finance needs to be ensured. The government is legally obliged to monitor and report on implementation of the central planning documents, however there is no legal requirement for ministries to report on implementation of sector strategies. Monitoring reports are publicly available, which enables public scrutiny over government work. Reporting focuses however on outputs rather than on outcomes. Public financial management The first annual monitoring report on implementation of the 2016-2020 public financial management (PFM) reform programme and action plan was adopted in March 2017. Civil society is not systematically involved in monitoring of the programme implementation. Several PFM reforms are progressing on schedule, but there have been delays in some areas, which require technical assistance to streamline reforms. In the coming period, Montenegro plans to focus on budget credibility and control, creating an effective system of cash management, public expenditures planning, budgeting execution and control, as well as a proper debt management strategy and fiscal risks analysis. Montenegro's budget transparency has improved during the reporting period. The government systematically publishes the budget proposal, the enacted budget, and the in-year and final budget execution report, though line institutions are not yet proactively providing budgetary information. However, the quality and comprehensiveness of these documents need to be improved. The timing of the State Audit Institution reports fully respect the legal obligations and reports are made available to the general public. There has been progress in the area of public internal financial control, enhancing accountability and transparency; a transparency roadmap is integrated in the PFM reform programme, improving the quality, presentation and visualisation of the annual budget and in-year reports are drafted according to best international practices. However, Montenegro needs to further enhance budget transparency, notably by joining the Open Budget Index and by producing a citizens' budget. Public service and human resources management A new Law on Civil Servants and State Employees was adopted at the end of 2017. It aims to ensure merit-based recruitment for senior civil servants, improve procedures for testing ability and selection, including at the highest managerial level, and enhance transfers, promotions and appraisal processes. It also foresees training for managers, and enhances managerial accountability and the delegation of powers in the recruitment and assessment procedures, by removing the political level from many such decisions. The final selection decision should as a rule be delegated to a clearly determined management level, which will also increase transparency, apart for a limited number of positions that report directly to the political level. Similar measures are included in the new law on local self-government adopted at the same time. Nevertheless implementing legislation and procedures need to be adopted in the coming months in order to implement these laws. Human resources management units are in place across the state administration, but most need to be considerably strengthened. The human resources management authority (HRMA) is currently implementing the first nationally accredited training programme for human resources managers. A substantial human resource optimisation exercise was launched at the end of 2017 across the state and local administrations, which should reduce staffing needs overall by 5 % (at national level) by 2020 but also address the additional capacity needs related to European integration (mentioned in most of the chapters below). The central personnel register is being updated more regularly, but it has not yet been linked to the salary system. On the remuneration system, amendments to the law on salaries of public sector employees were adopted in April 2017 as foreseen by the fiscal strategy 2017-2020 specifically reducing the variable part of salaries by 1 % for most grades and 6 % more for senior staff. Professional development and training is provided by the HRMA. Training for managers is foreseen under the new law on civil servants and state employees. Integrity plans are in place across the public administration and integrity managers have been appointed in most institutions. The anti-corruption agency monitors and publishes regularly reports on implementation and makes recommendations for improvement. Accountability of the administration The overall organisation of the state administration lacks legal clarity and does not ensure effective lines of accountability in many parts of administration. As there are no clear criteria for different administrative bodies, similar types of institutions may report to ministries, to the council of ministers or to the parliament. There has not been progress towards performance management. Rather, institutions continue to have a bureaucratic and process-oriented approach to planning, budgeting and reporting of their activities. Though managerial accountability remains underdeveloped and the delegation of decision-making powers limited, the Ministry of Finance analysed the situation, and presented the findings to the Public Administration Reform Council in late 2017. The new Law on civil servants and state employees also starts to address this with regard to recruitment decisions. (See Chapter 32) Citizens' rights to good administration are regulated and are subject to internal and external oversight mechanisms, including the Ombudsman. However, the Ombudsman's and State Audit Institution's recommendations are not implemented consistently. The citizens' right to access public information is regulated by the law on free access to public information, which was amended in April 2017 regarding the re-use of information and open data portal (see also under Chapter 23). Proactive disclosure of information on websites of public institutions remains limited, but the Agency for the protection of personal data and access to information has started supervising this across the public administration. Its capacity was strengthened, but its 2017 budget was only increased slightly. Administrative silence by the public administration remains a concern and a major cause of citizens' complaints. The legal framework for the right to administrative justice was enhanced in July 2017 by the entry into force of the law on general administrative procedures and the law on administrative disputes. The right to seek compensation is not well understood by the general public. Montenegro does not have a specific law on public liability, although a clear procedural framework exists. There is however no monitoring in place on the public liability requests and how citizens are compensated. Service delivery to citizens and businesses A more user-oriented administration is a government priority. The Law on electronic signature and identification was adopted April 2017, and a pilot project was launched for a government service bus, an infrastructure solution to ensure the data exchange between different registers across the public administration. Two new electronic services for citizens were also made available at the end of 2017, including a service to enrol children in schools and a public procurement service. However, no mechanisms are in place to monitor user perceptions or service delivery performance. Simplification of administrative procedures is ongoing. The new Law on administrative procedures entered into force in July 2017, and the harmonisation of sectoral laws to the new law was finalised, though a lot of secondary legislation, which defines many administrative procedures, requirements, time limits and fees, still need to be harmonised with it. There is as yet also no government-wide interoperability framework to support further digitalisation and simplification of administrative procedures. Strategic framework for public administration reform Montenegro is implementing the 2016-2020 public administration reform strategy. Political support is necessary to ensure the successful implementation of the strategy. To this end a PAR Council was established, led by a deputy Prime Minister, in late 2016. It has met twice so far. Financial sustainability of the reforms needs to be fully ensured. While most actions were costed in the 2016-2018 public administration reform action plan, they were often co-funded by donors and the actual funding from the annual state budget was not clearly established. Due to the reorganisations after the 2016 elections, the implementation of the 2016-2018 public administration reform action plan was delayed, notably with respect to the optimisation of the public administration, which will now start in 2018. The 2018-2020 action plan, adopted in January 2018, is more thoroughly costed thanks to the use of a clear methodology. 2.2. Rule of law and fundamental rights

2.2.1. Chapter 23: Judiciary and fundamental rights The EU's founding values include the rule of law and respect for human rights. A properly functioning judicial system and an effectively fight against corruption are of paramount importance, as is respect for fundamental rights in law and in practice. Montenegro is moderately prepared to apply the acquis and European standards in this area and has made some progress overall. The legislative framework on the judiciary intended to increase its independence and professionalism has yet to be fully implemented. Institutional capacity has been strengthened. However, corruption is widespread and remains an issue of concern. On fundamental rights, Montenegro further aligned its legislation with EU standards and the work of the Ombudsman's Office in particular has improved, but more efforts are still needed on strengthening the institutional framework and effective protection of human rights in practice. On freedom of expression, recent developments challenging the independence of public media bodies raise concerns. In the coming year, Montenegro should in particular: ®step up efforts to increase the use of financial investigations in line with Financial Action Task Force (FATF) standards, and establish a track record of seizure and confiscation of criminal assets; ®strengthen the independence, accountability, professionalism and overall efficiency of the judicial system; ®strengthen media freedom, including by clearly stepping up efforts to investigate cases of violence against journalists and by shielding public broadcaster RTCG and all other media from undue influence and political pressure. Montenegro is implementing a detailed action plan which was adopted prior to the opening of the accession negotiations in this chapter in December 2013. Functioning of the judiciary Montenegro’s judicial system is moderately prepared. During the reporting period, Montenegro made some progress in meeting the recommendations on strengthening the independence, professionalism and accountability of the judiciary. The capacities of the Judicial and Prosecutorial Councils have improved, judges and prosecutors were recruited for the first time under the new system and implementation of the new IT strategy has started. However, the recruitment, professional appraisal and promotion system of judges has yet to be fully implemented. In addition, a track record of implementation of codes of ethics and of disciplinary responsibility is still lacking, and human resources management has not improved. In the coming year, Montenegro should in particular: ®strengthen the independence and professionalism of the judiciary by fully implementing the recruitment, professional appraisal and promotion system; ®strengthen the accountability of the judiciary by developing a track record of implementation of codes of ethics and of the disciplinary responsibility for judges and prosecutors; ®step up the work on the rationalisation of the judicial network including by ensuring better human resources management. Strategic documents Montenegro’s action plan for Chapter 23 outlines comprehensive judicial reforms. In addition, a 2014-2018 Judicial Reform Strategy and accompanying bi-annual action plan to implement it are in place (the most recent action plan covers 2017-2018). A mechanism for monitoring the implementation of the strategy is also in place. Management bodies The Judicial and the Prosecutorial Councils are the key bodies in charge of managing the judicial system and the careers of judges and prosecutors. Their composition and appointment procedures are broadly in line with European standards. In January 2018, the mandate of the Prosecutorial Council expired. After the Parliament in two attempts failed to vote on a list of four new Council members out of renowned lawyers, the Law on the State Prosecution was amended in February 2018 in order to allow for the Parliament to vote on individual candidates. The 2018 budget of the Judicial Council substantially increased to EUR 1.4 million, compared to EUR 864 774 in 2017. The 2018 budget of the Prosecutorial Council is EUR 541 114 (2017: EUR 455 877). Additional employees have been recruited in both councils. Even though further strengthening of the administrative and professional capacity of both councils is needed, they should in principle be able to implement the systems for recruitment, professional assessment, promotion and disciplinary accountability. However, they need to improve their capacity in strategic, budget and human resources planning, as well as their public communication. Both councils still need to improve transparency of their work, including by fully motivating and publishing decisions on promotions and appointments, disciplinary proceedings, and the minutes of their meetings. Members of both councils should also devote more time and show full commitment to performing their functions. Independence and impartiality Following the 2013 amendments to Montenegro’s Constitution, judicial independence has been strengthened, including by formally reducing room for political influence on the appointments to the judiciary. However, attempted political interference, including by authorities internal to the judiciary, remains an issue of concern. A firmer political commitment is needed to ensure the full independence of Montenegro’s justice system. The principle of random allocation of cases is guaranteed by the law on courts and implemented automatically through PRIS, the judicial information system, although for very small courts there are certain limits. The practice of reallocating large numbers of cases between courts to reduce backlogs, risks undermining the right to a lawful judge in the absence of clear criteria. Montenegro should strengthen impartiality of the judiciary by revising the provision in the Law on the Judicial Council according to which disciplinary sanctions can be imposed only if a judge fails to seek recusal in at least three cases. The number of presidential pardons granted, which affect the independence of the judiciary, further dropped in 2017 to 1 case (down from 6 cases in 2016). Accountability Track records related to the enforcement of disciplinary accountability and to the codes of ethics for judges and prosecutors are still very limited. In 2017, the Commission for monitoring the implementation of the code of ethics for judges dealt with 18 cases (2016: 19 cases, 2 violations established) and did not find that any violations had occurred. In none of the 3 cases reported, a violation of the code of ethics of prosecutors was established in 2017 (2016: 3 cases, violation established in one case). Disciplinary proceedings initiated against one judge resulted in the statutory minimum sanction, while the proceedings initiated against one prosecutor resulted in 20 % salary reduction for 3 months. All cases that would give grounds for disciplinary action need to be followed up on. Mechanisms to detect breaches of integrity rules and to enforce disciplinary penalties need to become more effective. Public awareness of existing complaint mechanisms should be further raised and the possibility of challenging the dismissal of complaints before the Judicial and Prosecutorial Councils should be introduced. Relevant decisions by the 2 councils need to be better motivated and a case-law has yet to be developed in this area. The judicial inspection subordinated to the Ministry of Justice was strengthened in September 2017, with the number of inspectors going up from 3 to 7. Further improvement and effective enforcement of the judicial inspection system are needed, including more thorough and unannounced inspections.

Following the introduction of the bailiffs system in spring 2014, the disciplinary responsibility of bailiffs has become a cause for concern. In 2017, 8 disciplinary proceedings were initiated against bailiffs. In one of the cases, the bailiff in question was temporary banned from performing its activity. In March 2017, amendments to the Law on bailiffs were adopted to ensure effective monitoring of their work and higher professional and ethical standards. However, to tackle this problem, further steps going beyond legislative amendments are needed, including appropriate training. Professionalism and competence Further to the completion of legislative reforms, Montenegro is now organising single nationwide competitions for judges and prosecutors (8 vacancies for new prosecutors published in 2017), based on the new system applicable since 2016. The 2018-2019 plan of vacant positions was adopted in December 2017. Despite efforts of both councils to organise transparent and merit-based selections, challenges remain over the planning of recruitments and the transparency of selection procedures. After the pilot phase of implementation of the new regular professional assessment system was completed in autumn 2016, the Judicial and Prosecutorial Councils reviewed the assessment criteria. Regular professional assessments of prosecutors are ongoing, while for judges they should start in early 2018. Scepticism within the judiciary towards regular professional assessment, which is one of the reasons for delays, needs to be addressed. Quality of justice Activities continued to harmonise jurisprudence, including with the case-law of the European Court of Human Rights. Following the move of the Judicial Training Centre into new premises in January 2017, the Centre is now fully equipped and the number of staff has increased. For 2018, it was allocated its own budget of EUR 624 240 (2017: EUR 447 594). This allocation is still below the statutory minimum and for some specialised trainings the Centre continues to be dependent on donor support. The autonomous and self-sustainable functioning of the Judicial Training Centre needs to be guaranteed. Its administrative and managerial capacity, as well as cooperation with the Judicial and Prosecutorial Councils needs improvement without delay. The Centre also needs to play a more active role in identifying training needs on the basis of a training needs assessment, promoting training among the targeted audience, evaluating training activities, and producing training materials covered by copyright. Instructions for collecting statistical data in compliance with the European Commission for the Efficiency of Justice (CEPEJ) guidelines have not yet been fully implemented. Data on the total length of proceedings is still not available. Statistical information on the performance of the judicial system is not systematically analysed, nor used for management and policymaking purposes. PRIS, the judicial information system, is used by all courts for tracking cases, for some aspects of case management and for communication with parties. However, the system still has security gaps and does not operate reliably outside Podgorica. The system also allows for collection of comprehensive statistics, but its reliability continues to raise serious concerns. Replacement of PRIS with a new IT system is planned under the 2016-2020 ICT strategy for the judiciary. Alternative solutions are needed until the new IT system and all its features are operational. Such transitional arrangements should serve the purpose of allocating human resources more efficiently and set more realistic workload standards for judges, based on the results and recommendations of the case-weighting study completed in 2015. The 2018 budget for the judiciary is EUR 37.8 million (0.9 % of GDP), which represents a marginal increase compared to 2017 (EUR 34.8 million, i.e. 0.82 % of the 2017 GDP). In 2018, EUR 28.8 million was allocated to courts (2017: EUR 26.4 million) and EUR 8.9 million to prosecutors’ offices (2017: EUR 8 million). Given that the largest part of the budget is spent on salaries, the funds allocated remain insufficient, in particular to cover investment needs and improve overall poor judicial infrastructure. Montenegro has 41 judges and 17 prosecutors per 100 000 inhabitants. According to the CEPEJ, the European average is 21 judges/11 prosecutors per 100 000 inhabitants. The impact of alternative dispute resolution continues to be low and has even declined. In 2017, the total number of cases referred to and solved through mediation (excluding labour disputes) fell to 161 cases compared to 429 in 2016. The total number of labour disputes referred for mediation was 2 055 (2016: 9 175). The use of mediation needs to be promoted further both among judges and parties to the disputes. Efficiency Montenegro is in general not affected by substantial court backlogs. However, in the course of 2017, the case backlog increased with more than 25 %, from 32 313 cases pending at the end of 2016 to 40 780 pending at the end of 2017. The total number of cases that have been pending for more than three years before all courts did not change considerably (3 206 cases pending on 31 December 2017, 3 214 pending at the end of 2016). In 2017, the disposition time, i.e. the average time from filing the case to a decision, was 295 days for first-instance proceedings in civil cases and 97 days for commercial cases (2016: 165 days for civil cases and 80 days for commercial cases). Montenegro needs to continue to work on increasing the efficiency of the judiciary, monitoring backlogs and reducing the number of cases pending. The number of incoming enforcement cases before the courts has continued to fall, although slightly, following the introduction of the bailiff system (2016: 1 771; 2017: 1 688), while the number of pending enforcement cases has declined considerably (end of 2017: 10 521; end of 2016: 42 468). The numbers of appeals against decisions issued by bailiffs also fell (from 13 850 in 2016 to 8 224 in 2017). A centralised case management system for bailiffs has been established, which makes it possible to centrally monitor the recovery rate, costs and duration of proceedings. Enforcement of courts' decisions remains problematic. While the 2016-2019 mid-term strategy for the rationalisation of the courts network was adopted in December 2016, all concrete rationalisation measures are postponed until after 2019. Reforms in these areas should draw on data and conclusions of a proper needs analysis, and a cost-benefit analysis of the past and planned reforms. Better human resources management also needs to be ensured. Domestic handling of war crimes cases Implementation of the war crimes prosecution strategy continued. Of the eight new cases opened by the Special Prosecutor's Office (SPO) for the fight against corruption, organised crime, war crimes, terrorism and money laundering in 2016, six are still in the preliminary investigation phase. In one of these cases, prosecution was not pursued due to lack of evidence. In September 2017, court proceedings started against an individual charged with crimes against the civilian population. In all the cases under preliminary investigation, the SPO had to rely on letters rogatory to the International Criminal Tribunal for the former Yugoslavia (ICTY) and to the prosecution services of the neighbouring countries. By the end of 2017, 154 decisions on claims for compensation were final (December 2016: 125), and a total amount of EUR 1 485 510 (by end of 2016: EUR 1 097 713) had been awarded. Montenegro needs to ensure that victims of war crimes have equal access to justice, that reparations are in line with the national legislation, and that the proceedings are finalised within a reasonable time. Despite some positive developments in the reporting period, Montenegro needs to further step up its efforts to fight impunity for war crimes. It needs to apply a more proactive approach in order to effectively investigate, prosecute, try and punish war crimes in line with international standards, and also to prioritise such cases. The judicial decisions reached so far have contained legal mistakes and shortcomings in the application of international humanitarian law. Charges of command responsibility, co-perpetration and aiding and abetting have so far not been brought.

Fight against corruption Montenegro has some level of preparation in the fight against corruption. Despite some progress in particular as regards the institutional capacity, a more proactive attitude is still needed. Challenges related to the independence and priority-setting of the AntiCorruption Agency need to be addressed. Financial investigations, seizure and confiscation of assets remain to be improved. Further improvements of the track record of successful investigations and convictions will only be possible in an environment where independent institutions are shielded from any undue influence and incentivised to fully use their powers. In the coming year Montenegro should in particular: → continue improving the operational capacity of the institutions and their cooperation; → step up efforts to increase the use of financial investigations, including by improving operational capacity, and establish track records of seizure and confiscation of criminal assets; → significantly improve track records in the areas of repression and prevention of corruption, including by imposing effective sanctions. Track record An initial track record of investigation, prosecution and final convictions in high-level corruption cases has been established, but needs to be further consolidated. Following the first, final and enforceable judgments in high-level corruption cases in February and December 2016, a further 14 final and enforceable judgements were issued in 2016 and five in 2017, imposing sentences between 6 months and 3 years and 8 months. In addition, fines were imposed, and compensation was ordered in the form of return of property with an estimated value of approximately EUR 24 million. Most of these judgements were based on plea bargain agreements. Among the convicted individuals were several mayors, two judges and the former President of the State Union of Serbia and Montenegro who has not yet started serving his prison sentence. Trials are ongoing in other high profile cases processed in the previous period, including a case concerning 12 public officials. In 2017, indictments were lodged in 10 cases of high-level corruption against 18 individuals and three legal entities, while new investigations were launched in 16 cases, involving, among others, former mayors and state and municipal officials. In the first months of 2018, indictments were lodged in two high-level corruption cases, involving two former mayors. Precautionary freezing of assets (e.g. of a plot of land and company premises) was imposed in one case in which investigation is ongoing against 12 individuals, including two deputy ministers, and one legal person. However, the track record on seizure and confiscation of assets needs considerable improvement. New financial investigations were launched in 2017 against 53 individuals and 13 legal entities in relation to six high-level corruption cases. Montenegro has made some progress in establishing a track record in the prevention of corruption. In addition, the amount of fines imposed by misdemeanour bodies is increasing. However, the practice of issuing sanctions below the statutory minimum is not having a deterrent effect and counteracts effective enforcement of rules on prevention of corruption. The Anti-Corruption Agency (ACA) should use its power to directly impose misdemeanour penalties. For the period 2016-2017, 96 % of public officials submitted income and asset declarations within the prescribed time limit (2015/2016: 92.1 %). In 2017, the ACA cross-checked over 1 600 assets declarations and fulfilled its annual plan, which is based on a priority order. Misdemeanour proceedings for failure to submit income or asset declarations were instituted against 312 public officials and fines totalling EUR 42 090 were imposed (2016: EUR 38 270). Another 42 (2016: 40) misdemeanour proceedings were instituted due to irregularities identified in the asset declarations submitted. In these cases fines totalling EUR 6 720 (2016: EUR 3 680) were imposed. About 71 % of public officials and 75 % of civil servants gave optional consent to the Agency for access to their bank account for the purpose of verifying the data submitted in the income and asset declarations. Among those officials who gave such optional consent are 10 members of the government. Since the beginning of 2017, the Agency initiated enquiries into inexplicable wealth against 24 public officials (down from 49 in 2016) but found no irregularities. The Agency is encouraged to perform more in-depth checks of officials on random samples, including searching for illicit enrichment, changes and transfers of assets, and identifying origins of assets. In 2017, the ACA issued 127 opinions on incompatibility of functions (2016: 185 opinions and 58 decisions). Based on ACAs opinions, 37 public officials resigned from their office or function. Challenges remain regarding cases of conflict of interest, which are scarce. Moreover, recent opinions issued by the Agency, including those concerning members of the governing council of the public broadcaster RTCG and the Council of the Agency for Electronic Media, have shown significant weaknesses in the application of the law, the establishment of the facts and proper reasoning. This opened a debate over the need to shield the Agency from undue external pressure. In February 2018, ACA's decision establishing conflict of interest in the case of the Minister of European Affairs resulted in latter's resignation. This decision is being challenged before the Administrative Court. On the funding of political parties and electoral campaigns, the ACA continued to monitor the overall compliance of relevant entities in meeting the obligations laid down in the anti-corruption legislation. It also performed routine control checks of party financing along with oversight of election campaigns, registering a considerable increase in reported irregularities. On the October 2016 elections it initiated 405 misdemeanour procedures for noncompliance and 5 temporary suspensions of payment of budgetary funds to political entities (86 in the first half of 2016). No irregularities were noted in the preparations for the 5 municipal elections that took place in March and November 2017. The ACA has not identified any abuse of public resources for party purposes, despite persistent reports from the opposition and civil society that such abuse is widespread. The ACA still needs to develop a quality risk assessment methodology and make more effective use of its investigative powers, including though more in-depth checks. New software enabling in-depth, result-oriented checks based on risk assessment and strategic planning has the potential to improve the Agency's track record in this respect. The State Audit Institution (SAI) published positive audit reports on annual financial statements of 15 political parties, one conditional report and one negative report, while regularity audits yielded mostly conditional reports with recommendations for improvement. In 2017, 5,577 initial requests for access to information were made to public bodies. Of these, the information requested was not provided in 1,951 cases (2016: 1 562 of a total of 6,426 initial requests for access to information). The Agency for Data Protection and Free Access to Information received 1 086 complaints of which it upheld 356 (2016: 1,122 of 2 687 complaints). Most were cases of administrative silence, i.e. cases where the requests remained unanswered by the public institutions, which is a matter of concern. In 2017 the Administrative Court ruled in 12 cases against the public body's decision not to grant access to information. Court decisions on access to information are however not effectively enforced. The increasing practice of declaring the requested documents classified in order to restrict access to information is a matter of concern (68 in 2017; 30 in 2016). Public institutions urgently need to improve implementation of the law and comply promptly with access to information requests, especially in areas where there is a risk of corruption. Results on the protection of whistle-blowers remain limited. In 2017, the ACA received 69 reports on threats to the public interest (56 in 2016), and 2 requests for whistle-blower protection (8 in 2016). Protection was granted in one case. It further initiated 27 proceedings on its own initiative for determining the existence of a threat to the public interest and established such a threat in 16 of these cases (no such cases were reported for 2016). One misdemeanour proceeding is under way. With the support of the ACA, integrity plans have so far been adopted by 688 (of 700) public bodies and 679 bodies have appointed integrity managers. Electronic submission of integrity plans and reports on their implementation is planned to start in 2018, which will make it easier to process and analyse them. The ACA continued initiating misdemeanour proceedings against public bodies which had not fulfilled the legal obligation to adopt an integrity plan; since 2016, the total amount of fines imposed was EUR 18 640. However, the practical impact of these plans on prevention of corruption is yet to be assessed. On the implementation of the Law on lobbying, 6 lobbying certificates have been issued, but only one person obtaining such a certificate has so far registered with the ACA. These low numbers suggest that lobbying activities are being carried out outside the legal framework. The ACA has been addressing this issue through awareness raising, but it still needs to demonstrate a more pro-active approach in detecting, following-up and punishing breaches of the law. It should further focus its attention on potentially lobbied individuals in public institutions and bodies. There are still hardly any cases demonstrating the effective implementation of codes of ethics for members of the legislative and executive authorities. The impact of anti-corruption measures in particularly vulnerable areas remains limited. Despite greater staff numbers in some inspection services, there is still a strong and urgent need to improve and strengthen internal inspection mechanisms within the public administration and to improve their cooperation with law-enforcement authorities. For instance, inspection capacity in public procurement needs to be further improved. The ongoing introduction of full e-procurement is expected to help achieve more transparency and reduce opportunities for abuses. However, checks on the overall public procurement cycle remain a cause for concern. Institutional framework

Prevention of corruption An Anti-Corruption Agency (ACA) with administrative investigative powers was set up in January 2016. Of the 60 planned positions in the Agency, 56 have been filled. Some progress was made on strengthening the capacity of the department for political parties and electoral campaign financing. However, intensified staff training on whistle-blower protection and lobbying is still needed. The Agency's IT system which includes an electronic case management system and a system for electronic submission of reports is in place and is being upgraded continuously. It provides direct links to databases of other institutions (Central Registry of the Commercial Court, the Vehicle Registry, the Weapons registry, the Central Registry of Citizens, the Real Estate Administration, the Tax Administration, the Central Depositary Agency, and the Registry of Criminal Records). This links make it possible to, for instance, cross-check data in real time and automatically detect potential incompatibilities of functions. The visibility and transparency of the Agency’s web page has also improved, including the visibility of the electronic form for reporting corruption. In November 2017, the ACA signed an agreement with the State Audit Institution. Several agreements with other relevant public institutions have already been signed and more are planned. The ACA is still not perceived as sufficiently independent and proactive by the general public. Due to personal ties between its management and the political elite, allegations of its political instrumentalisation persist. To strengthen public confidence, the ACA should be allowed to operate independently of any political influence. Its management and staff should ensure maximum transparency, integrity and impartiality, and accountability. The ACA must further improve its communication and outreach activities.



Law enforcement The Special Prosecution Office (SPO), which was set up in 2015 has the lead in criminal investigations into corruption-related offences. Special prosecutors have been appointed and almost all specialised experts have been recruited. So far, 35 positions out of 37 provided for in the Rulebook on internal organisation adopted in March 2017 have been filled. Since mid2016 the SPO is supported by a Special Police Unit (SPU), which is now fully staffed. However, due to the significant amount of cases dealt with by the SPO, the capacity of SPU should be considerably improved. The leading role of the SPO in pre-trial investigations is well accepted and the relationship between SPO and SPU remains good, particularly thanks to the establishment of special joint investigation teams. In spite of this, the overall institutional and operational capacity of prosecutors, judges and police to fight corruption remains insufficient and needs improvement, particularly through specialised training. While there has been some progress, financial investigations are still not launched systematically in corruption cases and the concept needs further alignment with Financial Action Task Force (FATF) standards. The lack of financial investigation skills in the police and prosecution needs to be addressed as a matter of priority through targeted specialised long-term training. Only a few cases continue to be submitted to the prosecution by the police, and hardly any originate from official inspections or auditing bodies. Political influence should not be exerted on law enforcement and judicial officials by members of the executive and the legislative branch with the aim of interfering in their independent functioning. There has been improvement in putting IT infrastructure in place, including setting up protected electronic channels between all prosecutors' offices and some ministries, and installation of a case management system for the SPO. It is of utmost importance that both the SPU and the SPO are able to recruit the most suitable experts. Suitable premises for the SPO need to be provided without delay (see also the section on organised crime under Chapter 24). Legal framework Montenegro is a party to all international anti-corruption conventions. The legal framework and secondary legislation on anti-corruption are in place. Passive and active corruption are both punishable under the Criminal Code. Montenegro is encouraged to make illicit enrichment a criminal offence. Out of 11 GRECO recommendations on the ethics and integrity of MPs, prosecutors and judges, 5 are considered to be fully implemented, and 3 partially implemented, while 3 recommendations have not yet been implemented. In December 2016, amendments were adopted to the Law on the financing of political entities and election campaigns. As a result, public funding for the regular functioning of political entities fell from 0.6 % to 0.5 % of the state budget, effective as of 1 January 2017. In December 2017 further amendments to this Law were adopted to implement some of the OSCE/ODIHR recommendations. Additional identified shortcomings in the existing legal framework on political parties' financing, including those identified by ODIHR, are yet to be addressed. Impediments to establishing a more convincing track record in successfully addressing highlevel corruption also remain in the legal framework regulating pre-trial and financial investigations, and some excessive formalities will need to be filtered out of the legal framework. The high number of cases ending with plea bargains further raises concerns about transparency and consistency of the sanctioning policy. The use of plea bargain agreements needs to be carefully balanced against the public expectation that corruption-related crimes should be duly punished in accordance with sanctions stipulated in law, in particular when it concerns politically-exposed persons. Amendments to the Law on free access to information were adopted in April 2017 aligning it with the EU acquis on re-use of public information. While these amendments are expected to speed up proceedings for obtaining information, there are concerns over authorities' increasing tendency to declare information as classified, thus excluding it from the scope of this law. For instance, the government has decided to mark all audio recordings of its sessions confidential. Strategic framework The action plan for Chapter 23 outlines comprehensive reforms to prevent and combat corruption. It is complemented by an 'operational document' adopted in 2016 which sets out additional measure to prevent corruption in certain areas particularly vulnerable to corruption, such as public procurement, privatisation, urban planning, education, healthcare, local government and police. The impact of these measures, however, remains limited and Montenegro should develop more effective sector-specific plans for the prevention of corruption. Fundamental rights Reforms to further align with the EU and international human rights standards have continued and progress has been made in particular on anti-discrimination legislation. Montenegro now needs to ensure that adequate institutional mechanisms are in place to protect vulnerable groups from discrimination. Implementation of the legislation remains weak and institutional capacity on human rights needs to be increased. The Roma and Egyptian minority remains the most vulnerable and most discriminated community. Gender-based violence and violence against children also remain serious concerns in the country. To address these shortcomings, Montenegro should in particular: → further strengthen human rights institutions, and the Ministry of Human and Minority Rights, and increase their knowledge of international and European human rights standards; → strengthen the application and protection of human rights and ensure effective protection of victims of human rights violations, including by providing for effective investigations into ill-treatment by law enforcement, and cases of deaths and physical attacks on individuals, in accordance with the case-law of the European Court of Human Rights (ECtHR); → ensure effective implementation of fundamental rights policies on gender equality, the rights of the child and Roma rights by securing sufficient budget allocation to implement the policies, improve the capacity of responsible institutions and increase their inter-institutional coordination.

No new ratifications of international human rights instruments took place. Montenegro has yet to ratify the International Convention on the Protection of the Rights of All Migrant Workers and Members of Their Families. Montenegro continued its dialogue and cooperation with international human rights organisations and monitoring bodies, in particular of the United Nations (UN) and of the Council of Europe (CoE). In 2017 Montenegro presented the reports on the implementation of the UN Convention on Elimination of all Forms of Discrimination against Women, and of the UN Convention on the Right of Persons with Disabilities. The third report on the implementation of the Framework Convention for the Protection of National Minorities was prepared in June 2017. The Report of the European Committee on Racism and Intolerance was adopted in September 2017. Montenegro continued to ensure a good level of cooperation with the European Court of Human Rights and none of the Court's judgements against Montenegro are subject to the enhanced supervisory procedure. Since September 2016, 15 judgments against Montenegro were issued by the ECtHR. These concerned procedural aspects of the right to life (i.e. lack of effective investigation), the right to private life, and prohibition of discrimination. Violations were also found on the right to a trial within reasonable time and lack of effective remedy. A further 11 cases were concluded after the government gave a commitment to pay compensation for duration of proceedings. During the reporting period, 208 new applications against Montenegro were registered by the Court. On 1 February 2018, the total number of applications pending before the Court was 85. Improvements are needed on the overall awareness of the institutions and judiciary of the rights protected by the European Convention on Human Rights (ECHR), their willingness to apply the standards in daily practices, and improve the reasoning of the decisions, including those of the Constitutional Court. Several activities are ongoing in this area, including capacity building in the judiciary and publication of selected ECtHR cases on the Supreme Court’s homepage. On the promotion and enforcement of human rights, the Ministry of Human Rights and Minorities (MHRM) and the Ombudsman’s Office continued to receive assistance, with a view to strengthening their respective capacity. The MHRM plans to increase its staff. Several aspects of the Ombudsman's Office's work have improved, including its visibility, outreach and productivity. However, there is still room to increase its efficiency and the quality of its opinions. Public trust in this institution has improved as shown by the number of reported cases. Cases initiated by the Ombudsman on its own initiative have also increased. Cooperation with CSOs remains positive, but more systematic consultations would be desirable. The Ombudsman's Office is accredited under the Global Alliance of National Human Rights Institutions with a B status. Financial resources provided to MHRM and the Ombudsman's Office are not sufficient to enable them to efficiently carry out their tasks. On the prevention of torture and ill-treatment, Montenegro has continued to implement the recommendations of the European Committee for the Prevention of Torture and Inhuman or Degrading Treatment. The national preventive mechanism, whose capacity and independence have been strengthened, continued to work as a separate department under the Ombudsman. The incidents of police brutality reported in early 2018, and shortcomings and delays in investigating and prosecuting cases of alleged violence by law-enforcement officers show the difficulties in eradicating ill-treatment and establishing a record of deterrent sanctions. The same applies to cases of violence in prisons. On the prison system, detention conditions continue to improve, including in juvenile detention facilities, but they remain poor overall. This is also the case for the provision of healthcare to inmates and for staff working conditions. On a positive note, the authorities have drawn up rules on the use of restraint as a means of coercion, contingency plans to better handle emergency situations in prisons and new instructions on healthcare. However, trainings, awareness-raising or capacity-building among prison guards and other staff on fundamental rights standards in prisons still needs to be ensured. There are delays in the implementation of the alternative sanction system and there is a need to increase the capacity of the whole probation system. Rehabilitation and resocialisation programmes also remain limited. On protection of personal data, the country has ratified the CoE Convention 108 on the Protection of Individuals with regard to Automatic Processing of Personal Data and its additional protocol. Amendments to the Law on Data Protection related to video surveillance were adopted in March 2017. However, implementation of the data protection legal framework remains weak. Work has not yet started on aligning the broader legal framework with the new EU data protection acquis in the field. The Agency for Personal Data Protection and Free Access to Information employed new staff but its activities are still limited. Awareness-raising should continue, as should training on data protection standards, including for judges. Further efforts need to be undertaken to align the personal data protection legislation with the General Data Protection Regulation 2016/679 and Directive 2016/680. While freedom of thought, conscience and religion, and equal treatment of all religious communities are guaranteed by the Constitution, there has been no progress in preparing the new Law on Freedom of Religious Belief. Tensions between the Serbian and Montenegrin Orthodox Churches continued. Freedom of expression Montenegro has some level of preparation on freedom of expression. No progress was made in the reporting period. There have been no notable developments on investigations into old cases of violence against journalists. Political interference in the national public broadcaster (RTCG) and the Agency for Electronic Media (AEM) are a matter of serious concern. The media scene remains highly polarised and challenges persist in understanding the role of free media. The number of defamation cases remains high, also due to weak self-regulatory mechanisms. Training of the judiciary on ECtHR case-law on freedom of expression needs to continue. In addressing the shortcomings, Montenegro should in particular: → clearly step up and prioritise efforts to investigate cases of attacks against journalists; → ensure the financial and editorial independence of RTCG and AEM, as well as of their governing bodies and of all other media outlets; → strengthen the capacity of self-regulatory bodies. Intimidation of journalists On freedom of expression, progress on addressing violence against journalists and media remains very limited, especially in dealing with old unsolved cases. Seven cases of attacks on journalists took place in 2017. Three of these cases resulted in misdemeanour proceedings, while in one case the authorities found no elements of criminal or minor offences. Criminal investigations into old cases, including the 2004 murder of an editor-in-chief, continue to be ineffective and the authorities have so far failed to step up and prioritise efforts to solve these cases. In October 2017, a first-instance court awarded compensation to a journalist for lack of effective investigation into an attempt on his life in 2007. In the same case, in November 2017 the Constitutional Court awarded the journalist additional compensation. Protection offered to the same journalist was withdrawn based on the assessment that the threat was no longer imminent. There have also been reports of undue pressure on journalists by law-enforcement to disclose their sources. The ad hoc commission monitoring violence against media, which was re-established in September 2016, has so far produced three reports focusing on more recent cases, identifying a number of shortcomings and delays in investigations. The commission's recommendations, which were endorsed by the government, need to be fully implemented. Efforts should be stepped up to prosecute these cases effectively, also so as to avoid the application of the statute of limitations. The authorities are expected to demonstrate zero tolerance for threats or attacks against the media, and should refrain from making statements that may create an environment not conducive to freedom of expression. Legislative environment The new Law on RTCG came into force in September 2017 providing for a yearly financial allocation to RTCG amounting to 0.3 % of GDP. Amendments to the Law on electronic media aimed at further alignment with the EU acquis were adopted. Montenegro needs to review its laws governing or affecting the media sector in a thorough, coherent and coordinated manner, in order to ensure their alignment with EU acquis and international media freedom standards. Implementation of legislation/Institutions The still relatively high number of defamation cases points to weak self-regulatory mechanisms. There is still no uniform approach to sanctions, suggesting that ECtHR case-law is not yet sufficiently known. Self-regulatory bodies continue to reflect the overall polarisation of the media scene in Montenegro. Effective and uniform application of the revised code of ethics of journalists has yet to be achieved. Dialogue between various self-regulatory mechanisms should be further enhanced to improve professional standards in media reporting. While no new cases of blocking internet services have occurred in 2017, there has been no administrative or judicial follow-up of the cases of blocking freeware and cross-platform instant messaging services on election day in October 2016, which suggests the fragility of freedom of expression online. Public service broadcaster

Initial positive developments on RTCG's editorial independence and professionalism were challenged by instances of undue political interference and political pressure on its Council. Several members of the RTCG Council were dismissed and replaced by the Parliament in late 2017 and early 2018. In its new composition, the RTCG Council voted out its chair, replacing him with one of the newly appointed members. Concerns about political pressure also surrounded the delayed signature of the government's agreement with RTCG on the provision of public broadcasting services and the approval of the collective agreement regulating the work of its employees. Economic factors Concerns about transparency and non-discrimination in state advertising persist. Following a ruling of the Constitutional Court, the State is no longer allowed to provide funds to commercial broadcasters, as it did in the past via AEM. The fact that many media outlets are not financially sustainable has a negative impact on the quality of reporting and professionalism. Journalists are jointly represented in Montenegro's media trade union. Two associations aimed at fostering and promoting professional journalism across the polarised media scene also exist, but still need to reach their full potential. The precarious economic situation of journalists, particularly due to job insecurity and low salaries, is putting them at risk of editorial interference and possible self-censorship. There is no structured dialogue between the government and the media community on the working conditions of journalists. Freedom of assembly and association is guaranteed by the Constitution and the relevant legal framework is in place. While no major developments can be reported for 2017, there is a need to strengthen the practical implementation of standards in this area. On property rights, in September 2017 Parliament adopted a new Law on spatial planning and construction. Arbitrary interference in property rights in the application of this law needs to be prevented. The process of restitution of properties expropriated in the past remained slow. Montenegro needs to provide for fair proceedings within a reasonable time when implementing its existing legal framework on property rights and restitution of property. On non-discrimination, amendments to the Law on the prohibition of discrimination were adopted in June 2017, aiming at further alignment with the acquis; however, court cases remain rare. Employment discrimination on the basis of political affiliation continues to be reported (for issues of discrimination in employment see also Chapter 19). The work of the Ombudsman's Office in this area has improved, but its capacity needs to be further strengthened. Progress towards the criminalisation of racist and hate speech was made with new amendments to the Criminal Code in July 2017, but the number of prosecuted cases remains low. On equality between women and men, there are concerns about the practical impact of the relevant legislation. In addition, the effectiveness of the gender referral mechanism needs to be ensured. During the reporting period, Montenegro adopted the 2017-2021 action plan on gender equality, but implementing it requires adequate human, technical and financial resources. Montenegro should also adopt measures to counter stereotypes and discriminatory practices, trafficking and exploitation of prostitution. It is also necessary to improve women’s political participation, education and economic empowerment, and to address the needs of women facing multiple discriminations. Another area of concern is the phenomenon of sexselective abortions. With the adoption of the Criminal Code in July 2017, Montenegro aligned its legislation with the Istanbul Convention on violence against women and domestic violence. However, the implementation of the Convention is proceeding slowly and gender-based violence remains a serious concern. There is little improvement in the capacity and gender sensitivity of existing institutions. The limited numbers of protection orders issued in cases of repeated reports of violence needs to be addressed. Effective victim support services are yet to be provided, along with better and more accessible legal aid. On the rights of the child, there is a need for better coordination of policies as no single institution has the overall responsibility on this issue. In April 2017, the 2017-2021 strategy for the prevention and protection of children from domestic violence was adopted. Amendments to the Family Law have provided better procedural guaranties for the rights of the child and for explicit prohibition of corporal punishment. However, more efforts are needed to ensure adequate implementation. The Ombudsman's Office has intensified its work on this issue and the number of child-related applications is increasing. More efforts are also necessary to address child begging and forced child marriages which affect mostly the Roma community, as well as the overall violence against children. Treatment of juveniles in prisons also calls for improvement. The very low number of reported cases of sexual violence against children raises concerns about reporting and identification of victims. The deinstitutionalisation process has to continue and needs to be supported by alternative services such as foster care, kinship care and community-based care. Little progress was made on the rights of people with disabilities. Legislative alignment with international standards, including the UN Convention on the Rights of Persons with Disabilities, is progressing slowly. The issue of deprivation of legal capacity needs to be addressed without delay, in line with the Convention. There is no clear budget allocated for implementing the strategic and legal framework. Montenegro still needs to provide for regular and sustainable financial support for organisations of people with disabilities, and adequate spending of funds for professional rehabilitation. It also still needs to improve the consultation mechanisms for people with disabilities and their representative organisations. The country should also adopt comprehensive strategies on de-institutionalisation and accessibility. The adaptation of public buildings, including the accessibility of polling stations and public university faculties, needs to continue. Montenegro continues to be a regional leader on the rights of lesbian, gay, bisexual, transgender and intersex (LGBTI) persons. Overall, the authorities have continued to show overall openness on this issue and collaboration with civil society is strong. Preparation of the Law on civic partnership is ongoing. In September, the National Pride Parade took place in Podgorica without any incidents, but there was an increase in reports of hate speech targeting LGBTI persons, including from high-level religious representatives. Despite an improvement in relations between the LGBTI community and the police, records of prosecution based on hate speech need to improve. Continued and proactive efforts are still needed to ensure full and effective implementation of the existing legal framework to protect the rights of LGBTI people and to tackle public attitudes towards them, including through anti-discrimination campaigns. Issues of labour and trade union rights are covered in chapter 19. In the field of procedural rights, substantial efforts are needed to ensure full alignment with the acquis, particularly on rights for suspects and the accused in criminal proceedings, as well as on victims' rights, and sufficient budgetary allocations are required to enforce such rights. Dissemination of information on free legal aid also needs improvement. Concerns still persist about the proper application of ECtHR case-law in cases of prolonged pre-trial detention. Some progress was made on minority rights. In April 2017, the new Law on the rights of minorities was adopted, which should eliminate the risk of conflict of interest in the process of granting funds to minorities. In order to secure smooth implementation, the relevant implementing legislation should be swiftly adopted and the capacity of MHMR strengthened. The latest strategy for the social inclusion of Roma and Egyptians (2016-2020) focuses on legal status, education, employment, housing, health, social welfare and culture identity and information. An action plan was adopted in March 2017. However, the budget provided for the strategy is insufficient to achieve its objectives. Despite some progress, Roma remain the most vulnerable and discriminated community in the country. On education, there was progress on the number of children enrolled in pre-schools and primary education, while preparatory pre-school education has been extended from 2 to 4 weeks. Other positive measures include provision of free text books, scholarships, enrolment through quotas in secondary and university education, summer camps for Roma students and provision of transportation in Podgorica. However, the level of knowledge of the official language remains poor, prevention measures against school drop-outs are not implemented, and insufficient attention is given to adult education. Only one third of Roma students complete compulsory education and just 3 % (the lowest in the region) complete secondary education. Efforts to include Roma in the labour market are not yielding satisfactory results; their labour force participation is decreasing and informal employment continues to be high. There is a need to improve outreach, adjust mainstream employment activities to the Roma situation and ensure sustainability of results. The great majority of Roma have access to health insurance coverage although the percentage of coverage has dropped since 2011. The vast majority of Roma live in poor housing conditions and many of them live in segregated settlements. Also, nearly half of the households are not legalised. Access to public services remains a challenge. Following the successful closure of the Konik II camp by providing social housing, the authorities should address the housing conditions of domiciled Roma and the risk of evictions in other municipalities. An estimated 16 % of Roma lack civil registration. Additional efforts are needed on the protection and promotion of the Romani language. On displaced and internally displaced people (IDPs), during 2017 the Ministry of Interior significantly reduced the number of pending applications for resolving the status of IDPs. Out of 14 781 claims, 14 391 were processed, in 12 064 cases IDPs acquired the status of foreigner with permanent residence, 243 claims were dismissed and 2 093 rejected or proceedings were suspended due to incomplete documentation. 390 applications are still pending. However, there are still a number of cases of undocumented people. Montenegro is a party to all major international conventions relating to statelessness and with the new law on foreigners adopted in February 2018 a separate procedure for determining statelessness was introduced. So far, there are no officially recognised stateless persons, despite having an estimated number of 486 people who consider themselves stateless living in the country.

On citizens' rights, Montenegro's preparations to develop and implement an investors' citizenship scheme continued. As a candidate country, Montenegro, when using its prerogatives to award nationality should act in a spirit of sincere cooperation and should refrain from any measure which could jeopardise attainment of EU's objectives. 2.2.2. Chapter 24: Justice, freedom and security The EU has common rules for border control, visas, external migration and asylum. Schengen cooperation entails lifting border controls inside the EU. There is also cooperation in the fight against organised crime and terrorism, and judicial, police and customs cooperation. Montenegro is moderately prepared to implement the acquis in this area. The legal and strategic frameworks are now largely in place. Some progress was achieved, in particular on the migration-related legal framework. In the fight against organised crime, there is an initial track record of prosecutions in the fight against the smuggling of migrants and against drug trafficking. However, further results are needed to produce a convincing track record, in particular in the fight against money laundering and trafficking in human beings. In the coming year, Montenegro should in particular: → develop a strategic approach towards financial investigations, including by (i) adopting the FATF concept on financial investigations; (ii) automatically implement financial investigations when dealing with organised crime, terrorism, money laundering and serious corruption cases; (iii) start financial investigations from the very start of the criminal investigation; and (iv) apply a multidisciplinary and proactive approach to financial investigations; → continue to improve its capacity to deal with sudden increases in mixed migration flows, in particular when it comes to human and material resources; → continue to: (i) work on enhancing cooperation with neighbouring countries on border management issues; (ii) increase resources devoted to modernising border infrastructure and to the surveillance of borders, and (iii) implement anti-corruption measures. Montenegro is implementing a detailed action plan which was adopted prior to the opening of the accession negotiations in this chapter in December 2013. Fight against organised crime Montenegro has some level of preparation in the fight against organised crime. Some progress was made on strengthening the regulatory and institutional framework, which is now largely in place. However, the track record on some forms of organised crime, for example on money laundering as a stand-alone crime and trafficking in human beings, remains limited. Montenegro made little p