EUROPEAN COMMISSION Brussels, 29.5.2019 SWD(2019) 217 final COMMISSION STAFF WORKING DOCUMENT Montenegro 2019 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 2019 Communication on EU Enlargement Policy {COM(2019) 260 final}



Table of Contents 1.Introduction 1.1. Context 1.2. Summary of the Report 2Fundamentals first: political criteria and rule of law chapters 2.1Functioning of democratic institutions and public administration reform6 2.1.1Democracy6 2.1.2.Public administration reform11 2.2Rule of law and fundamental rights15 2.2.1 Chapter 23: Judiciary and fundamental rights15 2.2.2Chapter 24: Justice, freedom and security32 3.Fundamentals first: economic development and competitiveness44 3.1The existence of a functioning market economy45 3.2The capacity to cope with competitive pressure and market forces within the Union49 4.Good neighbourly relations and regional cooperation52 5. Ability to assume the obligations of membership54 5.1Chapter 1: Free movement of goods54 5.2Chapter 2: Freedom of movement for workers56 5.3Chapter 3: Right of establishment and freedom to provide services56

5.4Chapter 4: Free movement of capital57 5.5Chapter 5: Public procurement59 5.6Chapter 6: Company law60 5.7Chapter 7: Intellectual property law61 5.8Chapter 8: Competition policy62 5.9Chapter 9: Financial services64 5.10Chapter 10: Information society and media65 5.11Chapter 11: Agriculture and rural development66 5.12Chapter 12: Food safety, veterinary and phytosanitary policy67 5.13Chapter 13: Fisheries68 5.14Chapter 14: Transport policy69 5.15Chapter 15: Energy71 5.16Chapter 16: Taxation73 5.17Chapter 17: Economic and monetary policy74 5.18Chapter 18: Statistics75 5.19Chapter 19: Social Policy and employment77 5.20Chapter 20: Enterprise and industrial policy79 5.21Chapter 21: Trans-European networks80 5.22Chapter 22: Regional policy and coordination of structural instruments82 5.25Chapter 25: Science and Research83

5.26Chapter 26: Education and culture84 5.27Chapter 27: Environment and climate change85 5.28Chapter 28: Consumer and health protection88 5.29Chapter 29: Customs union90 5.29Chapter 30: External relations91 5.31Chapter 31: Foreign, security and defence policy92 5.32.Chapter 32: Financial control93 5.33Chapter 33: Financial and budgetary provisions95 ANNEX I - RELATIONS BETWEEN THE EU AND MONTENEGRO97 ANNEX II – STATISTICAL ANNEX98



1. Introduction 1.1. Context Accession negotiations with Montenegro were opened in June 2012. To date 32 negotiating chapters have been opened, of which three have been provisionally closed. Montenegro continued to broadly implement the Stabilisation and Association Agreement (SAA) and the meetings of the joint bodies under the agreement took place at regular intervals. Two negotiating chapters were opened during the reporting period and no further chapter was 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 23 and 24 will be key for further progress in the negotiations overall. 1.2. Summary of the Report Concerning the political criteria the reporting period continued to be marked by the low level of trust in the electoral framework, which needs to be revised in a comprehensive and inclusive manner. A temporary parliamentary committee on reform of electoral and other legislation was established in autumn 2018 inter alia for this purpose. It however still needs to deliver on its ambitious mandate. Presidential and local elections in 11 municipalities and one urban municipality took place during the reporting period. Local elections continued to take place on a rolling basis, making their international observation difficult, and leaving ample opportunities for claims of irregularities that cannot be independently evaluated. The political scene remains fragmented, polarised and marked by lack of genuine political dialogue. Limited progress was made in re-establishing the political dialogue in Parliament in the course of 2018 with the temporary and partial return of majority of the opposition parties to Parliament and the establishment of the temporary parliamentary committee. However, following the detention of one opposition Member of Parliament in late 2018, and the allegations of corruption and illegal political party financing (the ‘envelope affair’) in early 2019, the opposition largely returned to boycotting Parliament. These allegations also triggered mobilisation of citizens though regular street protests, attempts at extra-parliamentary political dialogue and the opposition’s demands for the formation of a technical government. Returning the political debate to the Parliament is the responsibility of all political actors. Active and constructive participation by all parties is required to enhance parliamentary accountability, oversight of the executive, democratic scrutiny and better quality of the legislation. 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. As regards the recent allegations, the prosecution opened investigations with regard to some of the allegations, and the Anti-Corruption Agency fined the political party exposed for receiving illegal cash donation. These allegations require a credible, independent and effective institutional response.

As regards governance, there is a need to strengthen transparency, stakeholders' participation, and the government's capacity to implement reforms. A new legal framework and methodology on strategic planning should lead to better quality strategic planning, better monitoring and execution. The legal, institutional and financial environment, under which civil society organisations operate, improved overall. However, the genuine inclusion of civil society organisations in the policy-making process remains to be ensured in practice. Montenegro is moderately prepared with the reform of its public administration. Some progress was made overall. There was good progress in particular on the medium-term policy-planning framework, merit-based recruitment, and rationalisation of the organisation of the state administration. However, strong political will is still needed to effectively address the depoliticisation of the public service and the optimisation of the state administration, inclusive and evidence-based policy development, the delegation of decision-making and managerial accountability. Montenegro’s judicial system is moderately prepared and some progress has been made. The legislative framework aimed at increasing the independence and professionalism of the judiciary has yet to be fully implemented. Institutional capacity has been strengthened. Montenegro has achieved some level of preparation in the fight against corruption. There was some limited progress during the reporting period. However, 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 still 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 highlevel corruption cases has been established, but the criminal justice response against high-level corruption remains too limited. Further improvements in this regard will only be possible in an environment where independent institutions are shielded from any undue influence and encouraged to fully use their powers. In the fight against organised crime, Montenegro remains moderately prepared. Some progress was made in judicial cooperation and in some areas of the fight against organised crime. An initial track record of investigations into money laundering, of financial investigations and of temporary seizures of criminal assets was developed. The enhanced international police cooperation is bringing results, as illustrated by a number of high-profile international operations, arrests and drug seizures. However, further results are needed to produce a convincing track record on the more complex types of organised crimes, where local vested interests are at stake, including in money laundering, trafficking in human beings and tobacco smuggling, as well as in the confiscation of proceeds of crime. On fundamental rights, Montenegro further aligned its legislation with EU standards. The capacity of the Ombudsman office and the National Preventive Mechanism has improved, but more efforts are still needed in strengthening the institutional framework and effective protection of human rights. Montenegro 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 Egyptians minority remains the most vulnerable and most discriminated community. Gender-based violence and violence against children remain issues of serious concern. Montenegro has achieved some level of preparation on freedom of expression, but no progress was made in the reporting period. There have been very limited developments regarding investigations into 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. Self-regulatory mechanisms remain weak. As regards the economic criteria, Montenegro has made some progress and is moderately prepared in developing a functioning market economy. The economy continued expanding at a robust pace, improving labour market outcomes even though the unemployment rate remained high. Despite positive export dynamics, the current account deficit, fuelled by strong domestic demand, remained very large and was only partially financed by net inflows of foreign direct investment. Financial sector solvency and liquidity ratios improved, but access to finance for small companies remains hampered by tight lending conditions. Fiscal consolidation efforts continued through 2018, but the budget deficit target was missed while public debt reached a new record, partly due to financing needs for a large highway project, financed by a Chinese loan. Private sector development remained constrained by weaknesses in the business environment, the judiciary, and a high prevalence of informality, reflecting poor implementation capacity in key state institutions responsible to enforce the rule of law and market competition. Montenegro has made some progress and is moderately prepared in its capacity to cope with competitive pressures and market forces within the Union. The development of infrastructure in a number of areas is gradually setting the preconditions for improved economic competitiveness. However, further efforts are needed to enhance human capital development and to reduce the mismatch between education outcomes and labour market needs. Local companies need to grow and step up efforts to increase international competitiveness. With regard to good neighbourly relations and regional cooperation, Montenegro remained constructively committed to bilateral relations with other enlargement countries and neighbouring EU Member States and an active participant in regional cooperation. Concerning Montenegro's ability to assume 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 reached a good level of preparation in areas such as company law, intellectual property law, energy, and foreign, security and defence policy. It is moderately prepared in many chapters, such as free movement of goods, competition policy, agriculture and rural development, food safety, veterinary and phytosanitary policy, as well as enterprise and industrial policy. Montenegro is at some level of preparation in the areas such as environment and climate change, and social policy and employment. Good progress has been made in the areas of right of establishment and freedom to provide services, intellectual property law, agriculture and rural development, and food safety, veterinary and phytosanitary policy. Looking ahead, Montenegro should focus in particular on competition policy, environment and climate change, as well as public procurement. Strengthening the administrative capacity for ensuring the application of the acquis remains an important challenge for Montenegro. Montenegro has continued to align with all EU common foreign and security policy positions and declarations. In the area of migration, Montenegro was hit by a sharp surge in irregular migration, due to the partial shift of regional migration flux towards the so-called "coastal route" along Albania, Montenegro and Bosnia and Herzegovina. Montenegrin authorities apprehended 4 753 irregular migrants (a 460% increase compared with 2017), which put the country's reception and administrative capacities under strong pressure. The legal framework was further strengthened with the entry into force of an important legal package on migration and asylum, while some measures were taken to increase the reception and operational capacities. Important border cooperation agreements with neighbouring countries were signed and the European Border and Coast Guard Status Agreement with the EU was initialled. In the next reporting period, Montenegro should further strengthen the capacity to deal with mixed migration flows and the integration of refugees; continue to increase human and material resources devoted to border management and migrants’ registration system. 2Fundamentals first: political criteria and rule of law chapters 2.1Functioning of democratic institutions and public administration reform 2.1.1 Democracy The political scene remains polarised and the opposition has further fragmented. The reporting period was marked by a continued parliamentary boycott by two opposition parties and by a partial and selective return to the parliament by the rest of opposition. Allegations of corruption and illegal political party financing (the ‘envelope’ affair) in early 2019 triggered mobilisation of citizens though regular peaceful street protests, attempts at extra-parliamentary political dialogue and the opposition’s demands for the formation of a technical government. Elections The level of trust in the electoral framework and conduct of elections remains low. Important priority recommendations from the Office for Democratic Institutions and Human Rights (ODIHR) of the Organisation for Security and Cooperation in Europe (OSCE) remain unaddressed. The electoral legal framework needs to be reviewed in a comprehensive and inclusive manner to regulate all key aspects of the process. In October 2018, Parliament established a temporary committee on further reform of electoral and other legislation. The committee, which is boycotted by the opposition, has yet to deliver inter alia on a comprehensive electoral reform well in advance of the next parliamentary elections. The ‘envelope’ affair requires a credible, independent and effective institutional response. On the April 2018 presidential elections, the OSCE/ODIHR Election Observation Mission concluded that fundamental freedoms were respected, while noting that the candidate nominated by the ruling party held an institutional advantage. It recommended a comprehensive and inclusive reform of the electoral legislation, and stressed the need to investigate all allegations of electoral violations and to take necessary measures to discourage vote buying and prevent pressure on citizens. The mission report reiterated the need to increase the transparency of the State Electoral Commission (SEC)’s work, professionalism and impartiality. It also stressed the need to strengthen the independence of the public broadcaster and the media regulator. The public prosecution service formed 1,100 cases related to these elections, most on the alleged falsification of identification documents and/or falsification of signatures; all are still in the phase of preliminary investigation. Local elections continued to take place on a rolling basis, making their international observation difficult, and leaving ample opportunities for claims of irregularities that cannot be independently evaluated. Elections took place in 13 municipalities and one urban municipality in 2018, and were conducted in a generally peaceful and calm atmosphere. The reported irregularities were due to poor organisation and insufficient procedural knowledge of the electoral administration. In March 2019, local elections took place in the newly established municipality of Tuzi. No major irregularities were reported.

In May 2019, the first-instance proceedings related to the 2016 election-day coup attempt ended before the High Court in Podgorica. The court found all 13 defendants, including two opposition MPs, two Russian citizens and eight Serbian citizens, guilty and sentenced them for establishing a criminal organisation with the purpose of committing terrorist attacks and other crimes against the constitutional order and security. In October 2018, Parliament established a temporary committee on further reform of electoral and other legislation, with the support of the votes by the ruling coalition and several opposition parties. This cross-party parliamentary body’s tasks include delivering comprehensive electoral reform, addressing the recommendations of the OSCE/ODIHR 2016 and 2018 election observation missions, and getting agreement on holding local elections on the same day nationwide. The committee invited representatives of civil society organisations (CSOs) and academia to participate in its work. Since December 2018, the committee lacks quorum due to opposition boycott; in the meantime, work continued without opposition representatives and with uneven participation of CSOs at a technical level only in two of the seven working groups. Clear planning, increased transparency and genuine inclusiveness in the work of the committee will be crucial for it to deliver on its ambitious agenda and enhance public trust in the electoral process. In March 2019, Parliament appointed the new chair of the SEC after the mandate of the previous one expired in October 2018. Involvement of women in politics remains low, including in the electoral administration. Electoral lists complied with the minimum requirements in terms of gender equality. There were no new developments in the political and judicial follow-up of the alleged misuse of public funds for party political purposes that took place in 2012 (the ‘audio recordings affair’). In January 2019, a video recording was made public of a high-level party official receiving an envelope with money in the run-up to the 2016 parliamentary elections (the ‘envelope affair’). A swift, credible, independent, and effective institutional response to this affair will be key for restoring public trust in the electoral process and the state institutions. Parliament Limited progress was made in 2018 on re-establishing the political dialogue in Parliament with the partial and temporary return of a majority of opposition members of the parliament (MPs) and the establishment of a temporary parliamentary committee on further reform of electoral and other legislation. Active and constructive participation by all parties is required to enhance parliamentary accountability, the oversight of the executive and democratic scrutiny, and achieve better quality legislation. By the second half of 2018, the majority of opposition MPs, with the exception of two political parties and their nine MPs, had returned to parliamentary sittings and resumed their participation in the parliament’s committees, after boycotting their work for almost 2 years. However, following the arrest of an opposition MP in December 2018 and the subsequent ‘envelope affair’, the opposition has gradually returned to a selective boycott of Parliament. As regards the legislative role of Parliament, the opposition boycott has further weakened the quality of the debate, with parliamentary committees providing mostly unanimous support to draft legislation proposed by the executive. Although Parliament has increased its administrative capacity by recruiting additional staff, its capacity to scrutinise proposed legislation for compliance with EU acquis remains low. In 2018, 27 legislative acts out of 198 (13.6 % of the total), were adopted via extraordinary procedures, compared to 22 % in 2017. The boycott also had an impact on decisions on appointments requiring qualified majority, such as the appointment of non-judicial members of the Judicial Council. In addition, Parliament dismissed a civil society member of the Council of the Anti-Corruption Agency, while the related legal proceedings were still ongoing. In this case, and two similar cases concerning Parliament’s decision to dismiss two members of the Council of the national broadcaster RTCG (Radio Televizija Crne Gore), a first instance court established that they had all been unlawfully dismissed. These cases illustrate the importance of a functioning checks and balances system regarding nominations and appointments by the Parliament. Parliament maintained a high level of transparency at administrative level. However, inclusiveness and public participation were deficient in practice, including for legislation affecting citizens’ rights, such as the draft amendments to the Laws on expropriation, on state symbols and statehood day, and on public peace and order. The practice of MPs submitting draft legislation prepared by the government, thereby circumventing mandatory public consultation, needs to be avoided. Significant improvements are required to Parliament’s communication and cooperation with citizens, and particular focus is needed on establishing a procedure for addressing citizens’ complaints and petitions. Parliamentary oversight of the executive has also been negatively affected by the opposition boycott and needs to be further improved. In 2018, only four control hearings were held, while the number of consultative hearings decreased significantly (30 in 2018, compared to 43 in 2017). Parliament needs to step up efforts to develop a uniform and effective system to monitor the implementation of conclusions and recommendations adopted at oversight hearings. The State Audit Institution’s findings continue to be addressed in a limited manner, and there is still no discussion or reporting on the implementation of major policies and legislation. No complaints from citizens, media or interested parties alleging breaches of the code of ethics have been submitted to the Human Rights Committee since October 2016. No additional training on conflict of interests and good conduct took place in 2018. There were also no cases of MPs’ immunities being waived by Parliament. However, proceedings were initiated against two MPs of the largest opposition alliance in late 2018, without prior lifting of their immunity, and compliance detention orders were issued against both of them. One of the MPs was detained, while the other avoided arrest by remaining in the Parliament building. The detention orders were temporary suspended by the Constitutional Court pending its final decision on the constitutionality of the related legal provision. One opposition MP from the largest alliance served almost 3 months in prison following the High Court’s final decision confirming his prison sentence for an attack on a police officer during the October 2015 opposition protest. Three criminal proceedings involving opposition MPs from the same alliance are currently under way. The political scene has further fragmented. Additional rifts within some opposition parties and alliances led to the establishment of two new MP clubs and an increase in the number of independent MPs. There are 18 parties represented in Parliament, of which three are parties representing ethnic minorities, and there are three independent MPs. Of 81 MPs, only 19 (23.5%) are women. Women are also underrepresented in high-ranking positions in Parliament, heading only three (out of 14) standing parliamentary committees. The Women’s Political Network, composed of women MPs from 16 political parties, has shown that cross-party political consensus on important issues is possible and that electoral legislation changes and economic empowerment measures can make the difference on women’s participation. Shortcomings persist in the legal framework regulating political parties and their funding, including those identified by OSCE/ODIHR, such as loopholes and legal uncertainties regarding the use of loans and party resources to finance the election campaign, insufficient women's participation and a lack of transparency in the financing of political parties. The ‘envelope affair’ highlighted the need for these shortcomings to be urgently addressed, which would also enhance public trust in the electoral system. In February 2019, Parliament held an extraordinary session on the ‘envelope affair’, but failed to adopt any conclusions. There are no women among the political party leaders and very few in the parties’ leadership. The level of budgetary political party financing is still considerably above the regional average. The task of monitoring political party financing lies with the Anti-Corruption Agency and the State Audit Institution. The results of their monitoring remain limited. Governance The legal and procedural framework for strategic planning capacity by central government bodies was significantly strengthened; the new Decree and methodology in this area now need to be consistently implemented by all ministries and state bodies. The transparency of the accession process and stakeholders’ participation remains to be improved. Local self-government legislative framework is in place and needs to be implemented through capacity strengthening, professionalisation and harmonisation of functions at local level. A new municipality of Tuzi was established in September 2018. A new Law on the financing of local self-government was adopted with the aim of consolidating local public finances.

Montenegro remains focused on its EU accession process as the key foreign policy goal. In May 2018, the Ministry of European Affairs was dissolved and its work was taken over by the Ministry of Foreign Affairs, the General Secretariat of the Government, and a new European Integration Office in the Prime Minister’s cabinet, headed by a newly appointed Chief Negotiator, following the resignation of his predecessor. As a result, the number of ministers decreased to 18. The are four female ministers. In addition to streamlining the composition of the working groups for all negotiating chapters, in October 2018 the government revised the structure of the Commission for European Integration. This Commission monitors the implementation of the SAA and the 2018-2020 national EU accession programme. Central government bodies’ strategic planning capacities were strengthened by the adoption of a new Decree on the procedure and conduct of drafting, alignment and implementation of strategic documents and accompanying methodology for policy development and implementation. In line with the decree, the General Secretariat provides guidance on all draft strategic documents and provides a written opinion on compliance on each one, which then goes to the government for adoption. The General Secretariat’s competences in the coordination, alignment and monitoring of policy implementation were also enhanced, and procedures introduced for policy alignment with accession process obligations and EU sector policies. In February 2018, a network of strategic planning focal points was established across the public administration. The National Education Council accredited the programme for professional education of civil servants and state employees in March 2018, while in January 2019 the Human Resources Management Authority finalised the first cycle of certified training for strategic planning. However, coordination with stakeholders for policy development needs to be enhanced. On transparency, the new Open Government Partnership operational team was formed in July 2018 to draft an action plan to implement the 2018-2020 Open Government Partnership Initiative, which was adopted by the government in November 2018 with the aim of enhancing citizen participation and access to information. The government continues to share information on the EU accession process with the public. A decree on public consultations was adopted in July 2018. It extended the scope of public consultations beyond draft laws, so that they also cover national strategies. The decree also clarified the conditions for participation in public consultations and defined exceptions from the obligation to hold them. An online participation platform was created to facilitate public consultations. However, a number of laws affecting citizens’ rights were adopted without prior public consultations due to wide interpretation of statutory exceptions from the obligation to hold public consultations. This was also contrary to the Law on state administration. In general, the legislative and policy making process continues to suffer from insufficient transparency and a lack of genuine inclusion of relevant stakeholders. On local self-government, the Law on spatial planning was amended in September 2018 to extend the deadline for issuing municipal spatial plans to the end of 2018. The Law was challenged by opposition MPs before the Constitutional Court, whose decision is still pending. The adoption and implementation of secondary legislation stemming from the Law on civil servants and state employees and Law on local self-government is ongoing at central government level and in the municipalities, under the supervision of the Ministry of Public Administration. Both laws include provisions on enhanced merit-based recruitment; the Law on civil servants and state employees foresees the delegation of decision-making on recruitment to the relevant level in most cases, apart from those that report directly to the minister. The new Law on the financing of local-self government was adopted in December 2018. The new code of ethics for civil servants and state employees was adopted in July 2018, in line with Law on civil servants and state employees. Individual codes of ethics were adopted by all municipalities, in line with the law. Women’s political participation remains low also at the local level. Of the 24 municipalities, only one has a female major and women make up only 26% of councillors in municipalities. Civil society The legal, institutional and financial environment under which civil society organisations operate improved overall. However, the genuine inclusion of civil society organisations in the policy-making process is yet to be ensured in practice. Controversial dismissals of prominent non-governmental organisations’ (NGO) representatives from key institutions and bodies, and the growing trend of public institutions declaring information as classified are matters of serious concern. Substantial efforts are needed to ensure meaningful consultations with civil society actors as part of an inclusive policy dialogue, both at central and sectoral levels. Civil society is a key element of any democratic system and its checks and balances. Civil society organisations’ active participation has to be recognised and fostered as an asset by the state institutions. The legal framework regulating the work of civil society organisations was strengthened with the adoption of five pieces of secondary legislation aimed at implementing the Law on NGOs. However, the legal framework for volunteering remains restrictive and not conducive to voluntary work. The dialogue on cooperation between public institutions and civil society has significantly improved since the Council for the Development of NGOs has resumed its work in September 2018 with a new organisational structure. Chaired by the Minister of Public Administration, the Council’s role is to improve cooperation between CSOs and the national authorities. Its 12 members (six state officials and six CSO representatives) are appointed for 3 years. Three meetings of the Council took place in 2018. A new NGO strategy and action plan were adopted in January 2018. The implementation of the strategy is monitored by the National Office for cooperation with NGOs, which is a technical body of five staff members under the Ministry of Public Administration. There is general acknowledgement that civil society has an important role to play in the accession process. CSOs participate in various working groups, including on the accession negotiation chapters. However, their inclusion is deficient and uneven in practice, varying from one working group to another. Often, CSOs are not given sufficient information or notice to be able to contribute meaningfully to the process, or their contributions are ignored. Consultation practices require better planning, transparency and openness to CSOs’ suggestions to make them genuinely inclusive. Cooperation between civil society and local government is yet to be developed. The growing trend of public institutions declaring information classified needs to be reversed as a matter of priority as it prevents effective oversight by civil society. Controversial dismissals of prominent NGO representatives from key state institutions, and from regulatory and watchdog bodies while related legal proceedings were under way, are a matter of serious concern. Likewise, media campaigns aimed at discrediting NGO representatives are not conducive to creating a trustful and enabling environment for civil society. The rules for public funding of CSOs are in place, with a 0.4% minimum percentage of the state budget to be allocated to civil society under the Law on NGOs. Transparency and standardisation of state funding mechanisms were improved with the adoption of related secondary legislation, but were hindered by lengthy delays. Under the Law on NGOs, overall strategic planning is ensured at central level by the Ministry of Public Administration, while the management of funds is under the responsibility of sectoral ministries. Some 30 calls for proposals were launched by 11 ministries in 2018, based on clearer procedures and improved evaluation rules. More than four million euro were allocated from the state budget to various civil society projects as a result of these calls, a 17.5% increase since 2017. This included the state’s co-financing of 48 EU-funded projects for a total amount of EUR 852 000. This cofinancing is now mandatory and regulated by a decree. Some steps have been taken to improve the transparency of the CSO funding process, notably with the set-up of an online database on all state funding beneficiaries and the forthcoming adoption of an annual government report on state funding of CSOs. Further efforts are needed to enhance the monitoring and evaluation of such projects, and to alleviate CSO concerns that funds are not available for watchdog activities. Cooperation and dialogue with civil society with regard to sector strategies should be improved if the new model of public funding to CSOs is to reach its full potential. 2.1.2. Public administration reform

Montenegro is moderately prepared on the reform of its public administration. Some progress was made overall, while there was good progress on the medium-term policy-planning framework, merit-based recruitment and rationalising the organisation of the state administration. However, strong political will is still needed to effectively address depoliticisation of the public service, optimisation of the state administration, and effective implementation of managerial accountability, including the delegation of decision-making. Some of the Commission’s recommendations from 2018 remain valid. In the coming year, Montenegro should in particular: ®effectively implement the plan to optimise the public administration; ®implement the Law on civil servants and state employees for all new recruitments in order to ensure the professionalisation and de-politicisation of the public service; ®improve citizens’ access to public information by further reducing administrative silence and reversing the trend of declaring public information as classified. Strategic framework for public administration reform Montenegro is implementing two umbrella strategies, the 2016-2020 public administration reform (PAR) strategy and the 2016-2020 public financial management reform programme, albeit with some delays. The government ensures regular monitoring and reporting on implementation, but an integrated monitoring and reporting framework is yet to be established. Civil society actively participates in monitoring government reform efforts. Political support to the reforms is ensured by the PAR Council, chaired by a deputy Prime Minister. The Ministry of Finance still needs to become fully involved in the overall reform coordination, notably due to the increased need to link policy and fiscal planning and to focus on managerial accountability (see Chapter 32). With regard to the financial sustainability of the public administration reform, the 2018-2020 PAR action plan is fully costed and budgeted. The reforms are still dependent on external donor funding. Policy development and coordination The legal framework and institutions are in place to ensure a coherent policy-making system, including for European integration. Montenegro’s medium-term policy planning and reporting system was enhanced in 2018, following the adoption of the decree on drafting, alignment and monitoring of strategic documents, accompanied by methodological guidance. The General Secretariat of the Government has started to take an active role in monitoring implementation of the decree. It ensures quality control by issuing written opinions on the proposals and draft strategies. However, the medium-term fiscal plan is yet to be linked to policy planning. In 2018, the General Secretariat also became responsible for procedural guidance to line ministries to improve preparation of the government work programme and ministry work programmes, and to monitor implementation. Inclusive and evidence-based policy and legislative development remain only partially ensured. Administrative data collection and its systematic use for policy and law-making needs to improve across the administration. Although regulatory impact assessments are now more systematically produced, and more training has been provided to improve the analytical capacities, the quality of impact assessments still need to be improved, including for budgetary impact assessments. Gender mainstreaming and gender analysis in the policy-making process in line with the Gender Equality Act is yet to be ensured. Inter-ministerial coordination remains generally weak, apart from areas where there are inter-ministerial councils such as the PAR Council. A decree on public consultations was adopted in July 2018. It extends the scope of public consultations to state strategies beside draft laws, clarifies the conditions for participation, and clarifies the exceptions to the obligation to conduct public consultations, for example in security-related matters. There is a general acknowledgement that civil society has an important role to play in the accession process, but consultation practices require better planning, transparency and openness to civil society organisations’ (CSO) suggestions to make them genuinely inclusive. CSOs should also receive regular feedback on how their input has been taken on board. Legislative proposals on which the European Commission is consulted are now accompanied by summaries of impact assessments and results of public consultation. Public scrutiny of government work is expected to further improve as the decree on drafting, alignment and monitoring of strategic documents requires line institutions to prepare annual reports on all strategic documents. Public financial management The Ministry of Finance, which leads the public financial management (PFM) reform, further amended the PFM reform programme and its action plan in 2018. A framework to implement programme budgeting is now in place, but implementation remains behind schedule. The 2018 budget did not achieve targets on presenting clear descriptions of the programmes, objectives and performance indicators. Gender budgeting is yet to be introduced. The law on public sector accounting and its secondary legislation still need to be adopted. The decision on preparation of the capital budget was amended in June 2018. The future PFM action plan should address the financial management information system and human resource capacity needs in the Ministry of Finance, in the tax and customs administrations, and in the State Audit Institution, and should focus especially on capital budgeting, medium-term budgetary framework and annual budgeting. Also, government’s investment planning and management capacity needs to be improved, including its capacity to control public assets funded by loans from third countries (See also chapters 5, 16, 29 and 32) The government continues to ensure some level of budget transparency by publishing the budget proposal, the final budget and the execution reports. However, line institutions are still not proactively providing budgetary information. A mechanism to ensure a quality check of published data should be put in place. Montenegro does not participate in the Open Budget Index survey, nor has it developed a citizens’ budget. Public service and human resources management The Law on civil servants and state employees and the Law on local self-government entered into force in July 2018. They aim to ensure merit-based recruitments and dismissals at both national and local government levels. Most of the secondary legislation was adopted by the end of 2018. Training on new procedures has been provided at central and local level. The Ministry of Public Administration will need to actively monitor that all new recruitment procedures, including for senior civil service positions, respect merit in line with the new legal requirements. Human resources management units are in place across the state administration, but require further strengthening. The Ministry of Public Administration should ensure central coordination and quality control of their work. The central personnel register was updated, and a project was launched to link to it the salary system. In July 2018, the government adopted the 2018-2020 public administration optimisation plan to further professionalise and optimise number of employees in the public sector at both central and local levels. On the remuneration system, fiscal-related triggers in the salary law led to reductions in salaries for most public servants in early 2018. While public salary scales are transparent, they remain at modest level. The current salary law also leaves room for discretionary ‘top-ups’. The Human Resource Management Authority ensures professional development by providing training, and has started to implement the first nationally accredited training programme for human resources managers. Accreditation programmes in the field of ethics and integrity are being developed. Accountability of the administration The new Law on state administration was adopted in November 2018. It rationalises the organisation of state administration and addresses the main issues related to accountability lines between institutions. The Law provides for a clear organisation and typology of authorities across the public administration, as well as criteria on establishing and reorganising state administration bodies, state agencies and funds, with a few exceptions. It also provides for clearer definitions of the respective tasks performed by ministers, state secretaries and senior management within ministries. Independence of certain bodies will need to be ensured, especially where this is required under the EU acquis and special laws establishing a number of state agencies will now need to be revised. In January 2019, the government adopted an action plan to align special laws with the Law on state administration. The Law was followed by a decree on the organisation and working methods of the state administration, which came into force on 31 December 2018. This led to a very rapid reorganisation of many bodes, and some of these cases were not provided for in other pieces of legislation that were under adoption in the same period. In the future Montenegro should adequately prepare stakeholders for such changes, and consider transition periods for more complex organisational changes. Citizens’ right to good administration are provided for by independent institutions, especially by the Ombudsman and the State Audit Institution. Recommendations provided by the Ombudsman to enhance citizens’ right to access public information were addressed and the number of appeals regarding administrative silence decreased. An open source data portal has been created to enhance proactive disclosure of information. Work is under way to connect it to the European open source data portal. While there has been some improvements, administrative silence remains the major cause of citizens’ complaints. The increasing trend of government to declare information classified, particularly on grounds of tax-related data, without justified exemptions or by broad interpretations of the rules, is a matter of serious concern as it prevents effective citizens’ oversight of the work of public administration. Citizens’ right to administrative justice is hampered by the capacity of the Administrative Court to deal with the increasing number of cases and because decisions it takes on access to information are not effectively enforced. The citizens’ right to seek compensation is not well understood by the general public. While procedures for seeking compensation are in place, there is no specific law on liability. The government does not monitor the number of compensation requests. Service delivery to citizens and businesses

A more user-oriented administration is a government priority, and in a 2019 survey citizen satisfaction on central government administrative services rose to 66% (from 42% in 2017). However, some burdensome procedures continue to exist, such as for vehicle registration, which require multiple contacts with administrative bodies. Secondary legislation for the Law on electronic signature and identification was adopted in July 2018. The number of eservices to facilitate the implementation of the Law on general administrative procedure increased, and Montenegro has joined ISA2, a Commission IT programme for inter-operability solutions for public administrations, businesses and citizens. Business satisfaction with digital services in 2019 is 66%, and online submission income tax declarations reached 98% (from 23% in 2017). The implementation of a single information system for electronic data exchange between state bodies is ongoing; two pilot services connect registries of the Ministry of Interior, the tax administration, the Ministry of Justice and the Ministry of Education. Simplification of administrative procedures is ongoing. Implementation of the Law on general administrative procedures has started, but some secondary legislation still needs to be harmonised with it. 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 effective fight against corruption are of paramount importance, as is respect for fundamental rights in law and in practice. Montenegro remains moderately prepared to apply the acquis and European standards in this area but has made some progress overall. Last year’s recommendations have been partially met through further strengthening of the professionalism of the judiciary and an increased use of financial investigations. However, challenges remain, in particular with regard to the efficiency and accountability of the judiciary, and financial investigations are still not launched systematically in all corruption cases. Corruption is prevalent in many areas and remains an issue of concern. Challenges to the independence, credibility and prioritysetting of the Anti-Corruption Agency are yet to be convincingly addressed. On fundamental rights, some progress can be noted, but further efforts are needed to ensure their effective protection and application in practice. Concerns persist on freedom of expression and the overall climate of media freedom, with particular regard to the investigations into attacks against journalists and political pressure on the public broadcaster RTCG. Montenegro is implementing a detailed action plan which was adopted prior to the opening of the accession negotiations on this chapter in December 2013. Functioning of the judiciary Montenegro’s judicial system is moderately prepared, and Montenegro made some progress in further strengthening the professionalism of the judiciary. Last year’s recommendations have been partially met through an increased capacity of the Judicial and Prosecutorial Councils to implement the systems for recruitment, professional assessment, promotion and disciplinary accountability. However, the results of the reforms, in particular the track record on enforcement of codes of ethics and disciplinary accountability remains limited. Implementation of the 2016 ICT strategy continued. Human resources management has not improved, and concrete rationalisation measures remain postponed until after 2019. In the coming year, Montenegro should in particular: ®strengthen the accountability of the judiciary by developing a track record on implementation of codes of ethics and on the disciplinary responsibility of judges and prosecutors; ®ensure the timely implementation of the 2016 ICT strategy for the judiciary; ®improve the overall human, financial and infrastructure management of the judiciary. Strategic documents Implementation and monitoring of the 2014-2018 judicial reform strategy and action plan for 2017-2018 has continued. Preparations for the adoption of a new judicial reform strategy and an accompanying action plan are ongoing. This process should allow for genuine and constructive participation of all relevant stakeholders, including civil society organisations. 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 June 2018, the Law on the Judicial Council was amended in line with the Venice Commission’s opinion, providing for a temporary antideadlock mechanism to ensure the continuous functioning of the Judicial Council in light of the lack of the parliamentary qualified majority required to elect its new non-judicial members. The 2019 budget of the Judicial Council continued to follow a slight upward trend with EUR 1.37 million allocated, compared to EUR 1.35 million in 2018 and EUR 865,000 in 2017. The 2019 budget of the Prosecutorial Council is EUR 561,000 (2018: EUR 541,000). Training of staff contributed to improvement of the operational capacity of the secretariats of the two Councils. The Councils’ operational capacity is in principle adequate to implement the systems for recruitment, professional assessment, promotion and disciplinary accountability. Further strengthening of their administrative capacities is still needed. The two Councils are not yet performing their functions of budgetary and financial management, neither at central nor at court level. The transparency of the two Councils’ work needs to improve tangibly, especially by publishing fully reasoned decisions on promotions and appointments, and on disciplinary proceedings. Members of both Councils need to improve their professional capacities, dedicate more time and show full commitment to performing their functions. Independence and impartiality Constitutional and legal guarantees ensuring judicial independence are in place, but the judiciary is still perceived as vulnerable to political interference. A firmer political commitment is needed to ensure the full independence of Montenegro’s justice system. In March 2018, the government adopted an analysis of the legislative framework and its impact on the independence of the judiciary, with a number of recommendations that should be addressed in the new judicial reform strategy. The Law on courts guarantees the principle of random allocation of cases. In practice, random allocation of cases is implemented automatically through PRIS, the judicial information system, although for very small courts there are certain limits in this regard. PRIS has not been introduced in misdemeanour courts. In the absence of clear criteria, the practice of reallocating large numbers of cases between courts to reduce backlogs puts at risk the principle of random allocation of cases. One presidential pardon was granted in 2018 (there was one in 2017 and 6 in 2016). Accountability Track records on the enforcement of the codes of ethics and disciplinary accountability for judges and prosecutors remain very limited. In 2018, one new disciplinary proceeding was launched against a judge (2017: 1), while 4 new disciplinary proceedings were launched against heads of prosecution (2017: 1). The Disciplinary Commission of the Prosecutorial Council established disciplinary liability in 3 cases. In the same period, all 15 cases reported against judges alleging violation of the code of ethics were closed, and a violation was established in one case (2017: 18, no violations established). Four cases were initiated against prosecutors on suspicion of violating the code of ethics, with one case still pending and no violation established in three cases (2017: 3, no violations established). A state prosecutor in the High Prosecutor’s Office in Podgorica was indicted for loan sharking, which resulted in his temporary suspension until the end of court proceedings. Mechanisms to detect breaches of integrity rules need to become more effective, and all cases that give grounds for disciplinary liability need to be properly followed up. Both disciplinary Commissions monitoring implementation of the Codes of Ethics have an inconsistent approach to handling cases, and a legal remedy against their decisions remains to be provided for by the law. Relevant decisions by the two Councils are insufficiently motivated and case-law remains to be developed. Additional and sustained efforts are needed in promoting ethics and professional conduct in the judiciary as well as in raising public awareness on existing complaints mechanisms.

A scheduled judicial inspection carried out by the Ministry of Justice found irregularities in the courts’ register keeping, while no irregularities were found in the prosecutors’ offices. Further improvement and effective enforcement of the judicial inspection system is needed, including more thorough and unannounced inspections. The disciplinary responsibility and adherence to professional standards of bailiffs remains a cause for concern. The Ministry of Justice developed a plan for control of bailiffs in March 2018. Some 62 complaints were received on the work of bailiffs and 25 ex officio controls were conducted by the Ministry, establishing irregularities in the work of 8 bailiffs. Out of 2 disciplinary proceedings initiated against bailiffs in 2018, one resulted in a fine. Courts do not regularly report data on challenges to the legality of bailiffs’ decisions to the Ministry. 8 bailiffs were banned from performing their activity due to not fulfilling the eligibility criteria revised in 2017. Additional steps are needed with regard to promotion and adoption of professional and ethical standards among bailiffs, including appropriate training and effective monitoring of their work. Professionalism and competence Montenegro continued organising single nationwide competitions for judges and prosecutors. Initial training for the first group of judges and prosecutors recruited under the nationwide system was completed in the reporting period. This was followed by the appointments of 2 judges and 4 prosecutors to first instance courts and prosecutors’ offices. 3 judges and one prosecutor were elected to a second instance court and prosecutors’ office as a result of promotion procedures. Despite the efforts of the Judicial and Prosecutorial Councils to organise transparent and merit-based selections, challenges remain regarding the planning of recruitment and the transparency of selection procedures. Both Councils now conduct regular assessment of judges and prosecutors under the new system of regular professional assessment. In 2018, 41 judges and 32 prosecutors have been evaluated. However, assessment needs to be more thorough, in line with the assessment criteria revised in 2017. Quality of justice The 2019-22 strategy of the Judicial Training Centre was adopted in October 2018, but measures for its implementation remain to be incorporated in the action plan for the 201922 judicial reform strategy. In 2019, the budget of the Judicial Training Centre slightly decreased to EUR 619 000, compared to EUR 624 240 in 2018. Meanwhile, 14 of the 20 envisaged positions are filled. The autonomous and self-sustainable functioning of the Centre is yet to be guaranteed, and its administrative and expert capacity further improved. Measures are ongoing to improve its capacity to identify training needs and promote training, but further efforts are needed. The Centre should become more proactive in this regard, and should strengthen cooperation with the Judicial and Prosecutorial Councils and other relevant stakeholders. Activities continued to harmonise jurisprudence, including with the case-law of the European Court of Human Rights, through training of judges, prosecutors and lawyers. In addition, the capacity of the Judicial Training Centre to provide human rights training was strengthened. Instructions for collecting statistical data in compliance with the European Commission for the Efficiency of Justice (CEPEJ) guidelines are yet to be fully implemented, and no progress was made in this regard. 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 policy-making purposes. Montenegro requested assistance from CEPEJ to improve the quality of its judicial statistics. 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, while the information system of the prosecution remains insufficiently advanced. PRIS also allows for collection of comprehensive statistics, but serious concerns remain about reliability and availability of statistical data. Implementation of the 2016-20 ICT strategy for the judiciary is ongoing, and envisages the replacement of PRIS with a new IT system. Procurement of a new IT system for courts was launched in December 2018. However, implementation of the corresponding action plan has been limited and continues to face delays, and stable and sufficient funding for planned reforms beyond 2019 is still lacking. With a view to improve coordination and address delays in implementation, a separate Directorate-General for ICT and Data Security was established within the Ministry of Justice. Alternative solutions are needed until the new IT system and all its features are operational. These transitional measures should provide for effective allocation of human resources and more realistic workload standards for judges, based on the results and recommendations of the case-weighting study completed in 2015. The 2019 budget for the judiciary increased to EUR 39.1 million, compared to EUR 37.8 million in 2018. Funds are not efficiently allocated and the largest part of the budget is spent on salaries, while the remainder is insufficient to cover investment needs and improve overall poor judicial infrastructure. Montenegro has 51 judges and 17 prosecutors per 100,000 inhabitants, far above the European average of 21 judges and 11 prosecutors. A positive trend can be observed in alternative dispute resolution, for which a programme and accompanying action plan for 2019-21 were adopted at the end of 2018. 629 cases were referred for mediation in 2018 (2017: 437), and 107 cases were resolved through mediation (2017: 161). During the same period, 3 450 cases (2017: 2,055) were submitted to the Agency for Peaceful Settlement of Labour Disputes, and 3 041 cases were resolved (2017: 1 775). However, this method is still not systematically used and its overall impact remains low. The Ministry and the Centre for Mediation need to adopt a more proactive approach to further promote the use of mediation among judges and parties to the disputes. Efficiency In 2018, the case backlog decreased by 4.5% to 38,970 cases pending, while the number of cases pending for more than 3 years fell by 4% to 3,081. The disposition time, i.e. the average time from filing to decision, was 178 days for first-instance proceedings in civil cases and 131 days for commercial cases (2017: 295 days for civil cases and 97 days for commercial cases). Montenegro needs to step up efforts to improve the efficiency of the judiciary, enhance backlog monitoring and reduce the number of cases pending. Following introduction of the bailiff system, the total number of enforcement cases before the courts has continued steadily to decrease, and the backlog has been significantly reduced. In 2018, 1 643 enforcement cases were filed before the courts (2017: 1,688), while the number of pending enforcement cases fell to 6 004 (end of 2017: 10 521). The number of appeals lodged against the decisions issued by bailiffs decreased to 6 997 (2017: 8 224), and the number of pending appeals decreased to 468 by the end of 2018 (688 a year earlier). A centralised case management system for bailiffs is operational, providing for central monitoring of the recovery rate, costs and duration of proceedings. However, it is not systematically used, resulting in unreliable data. Enforcement of court decisions remains problematic. In 2018, the number of cases submitted to the Constitutional Court increased to 2 291 (2017: 1 039) while the court in the same year resolved 1 203 cases (2017: 1 066). 2 492 cases remained pending at the end of the year. Concrete rationalisation measures included in the 2017-19 mid-term strategy for the rationalisation of the courts network have been postponed until after 2019. Amendments to the Law on courts, which would lay down the minimum number of judges per court in accordance with the Judicial Council Decision of 2017, have not yet been prepared. Reform in this area should draw on data and conclusions of proper need and cost-benefit analyses of the past and planned reforms. Better human resources and judicial infrastructure management need to be ensured. Domestic handling of war crimes cases Implementation of the war crime prosecution strategy is ongoing. However, no new cases have been opened since 2016, while four cases remained in the preliminary phase of investigation by the Special Prosecutor's Office (SPO). One court case is ongoing against one person, who is charged with crimes against civilian population. In all cases under preliminary investigation, the SPO had to rely on letters rogatory to the UN International Residual Mechanism for International Criminal Tribunals (MICT) and on requests for international legal assistance by the prosecution services of the neighbouring countries. In February 2019, a memorandum of understanding was signed with MICT, allowing MICT to provide direct expert assistance to the SPO on concrete war crimes cases. All previous cases of compensation have resulted in final and enforceable judgements, while no new claims for compensation were received in 2018. A total of EUR 5 714 656 was awarded to claimants. Montenegro needs to ensure that victims of war crimes have equal access to justice, in line with European and international standards, and that compensation is in line with Montenegro’s commitments.

Montenegro needs to further increase its efforts to fight impunity for war crimes by applying a proactive approach to effectively investigate, prosecute, try and punish war crimes in line with international standards, and also to prioritise such cases. These efforts should be accompanied by adequate funding. The judicial decisions reached in the past contain 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 and limited progress has been made, with last year’s recommendations partially met. The Special Police Unit has been allocated 10 additional staff, a 50% increase in total. The Anti-Corruption Agency (ACA) has started issuing misdemeanour orders and measures of seizure of material gain, and has also developed a risk assessment methodology and new software for in-depth, result-oriented checks of political party financing. However, the need for a proactive attitude and sustained efforts remain both in prevention and repression of corruption. Challenges related to the independence, credibility and priority-setting of the ACA are yet to be addressed. Despite some progress, financial investigations, seizure and confiscation of assets are areas that are yet to be improved. Independent institutions need to be shielded from any undue influence and encouraged to fully use their powers in order to further develop a track record of effective investigations, followed by successful and enforceable convictions and dissuasive sanctions. Overall, corruption is prevalent in many areas and remains an issue of concern. There is a need for strong political will to effectively address corruption issues, as well as a robust criminal justice response to high-level corruption. In the coming year Montenegro should in particular: ®ensure the independence of the ACA and remedy the shortcomings in its work, as established by domestic courts; ®step up efforts to systematically conduct financial investigations in parallel with criminal investigations, establish track records on seizure and confiscation of criminal assets, and ensure that management and staff of the asset recovery office are recruited on the basis of transparent and objective criteria with a focus on merit and professional skills; ®improve track records on repression and prevention of corruption, including by imposing effective sanctions. Track record An initial track record of investigation, prosecution and final convictions in corruption cases has been established, but sustained efforts are needed to consolidate results. In 2018, four final and enforceable judgements were issued for high-level corruption, resulting in one conviction reached through a plea bargain agreement. The former President of the State Union of Serbia and Montenegro has not yet started serving his prison sentence even though he was convicted in 2016. In April 2019, Montenegro sent an official request for his extradition to Serbia, where he is currently staying. Trials are ongoing in 24 other cases of high-level corruption against 61 individuals and 3 legal entities. The high number of cases ending with plea bargains further raises concerns about transparency and consistency of the courts’ sanctioning policy. In 2018, indictments for corruption-related offences were lodged in 12 cases of high-level corruption (2017: 10) against 31 individuals, including mayors and public officials, and 2 legal entities. New investigations were launched in six cases (2017: 16) of high-level corruption. The track record on confiscation of assets still needs considerable improvement. Precautionary freezing of assets was requested in only one high-level corruption case involving six individuals and one legal entity. Permanent confiscation was requested in 2 cases concerning 3 individuals, and resulted in the confiscation of immovable property. The Appellate Court reached a final decision on the permanent confiscation of immovable assets of the former President of the State Union of Serbia and Montenegro. New financial investigations were launched in relation to two cases of high-level corruption against 15 individuals. Montenegro has made some progress in establishing a track record on the prevention of corruption. The Anti-Corruption Agency has started issuing misdemeanour orders directly (21 orders, EUR 3,000 in fines) and launched protective measures of seizure of material gain (3), but a solid track record remains to be established. The amount of fines imposed by misdemeanour bodies is increasing. However, the continued practice of issuing sanctions below the statutory minimum is not having a deterrent effect and counteracts the effective enforcement of rules on prevention of corruption. Results remain extremely limited, with no cases related to abuse of public resources for parties and electoral campaigns and illicit lobbying, and only a few initiated cases of inexplicable wealth. Based on the Agency’s 185 opinions and 71 decisions on incompatibility of functions and conflict of interests (2017: 127 opinions and 64 decisions), 77 public officials resigned from their office or function (2017: 37) and 5 were dismissed. Despite this increase, further efforts are needed to strengthen the track record and address the shortcomings in the application of the law, the establishment of facts and the quality of reasoning, as well as with regard to procedural safeguards for individuals affected by the ACA’s decisions. These shortcomings were confirmed by the national courts in several sensitive cases, including those concerning members of the Council of the national broadcaster RTCG, and the CSO member of the ACA’s Council. For the period 2017/2018, 95% of public officials and 93% of public servants submitted income and asset declarations within the prescribed time limit (2016/2017: 96% public officials and public servants). The ACA verified 854 reports on income and assets, fulfilling its annual plan of 836 verifications. The Agency has consistently followed up and initiated misdemeanour proceedings in cases concerning failure to submit income or asset declarations. The number of public officials who 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 decreased in 2018 from 71% to 60% of public officials and from 75% to 69% of civil servants. The number of members of the government who gave such optional consent remains limited to 10. Of the 30 cases of inexplicable wealth the Agency opened in 2018 (2017: 24, 2016: 49), it has so far closed 28 inquiries. However, it does not appear that these efforts have contributed to the detection and prevention of corruption, since no irregularities were found. The ACA carried out planned control and verification of 78 public officials, 20 of which were high-ranking officials. Misdemeanour proceedings are ongoing in nine of the latter cases. As in previous years, no irregularities that would be forwarded to the prosecution were found. The Agency is encouraged to conduct more in-depth checks of officials on random samples and of high-ranking public officials, including searching for illicit enrichment, changes and transfers of assets, and identifying origins of assets. No such checks were carried out in relation to recent public allegations concerning high-ranking state officials. The ACA continued to monitor the overall compliance of relevant entities in meeting the legal obligations on the funding of political parties and electoral campaigns. The Agency performed routine control checks of party financing along with oversight of election campaigns. It initiated 19 misdemeanour proceedings for non-compliance with the legal obligations in relation to the 2018 presidential and municipal elections, imposing EUR 11,390 in fines. However, it has not detected any abuse of public resources for parties and electoral campaigns purposes. Furthermore, there were no temporary suspensions of the payment of budgetary funds to political entities. The Agency should considerably reinforce its work in this regard and act proactively on public reports of alleged misuse of state resources. The Agency’s handling of the ‘envelope affair’ and its refusal to make public the decision against the ruling party, in which it found a violation and imposed a fine, has given rise to allegations of the ACA’s selective application of the relevant legal provisions, which is a cause for concern. The State Audit Institution published positive audit reports on annual financial statements for 2017 of 17 political parties and 7 conditional reports, while regularity audits yielded 10 negative, 9 positive and 5 conditional reports with recommendations for improvement. In 2018, 6,080 initial requests for access to information were made to public bodies. The Agency for Data Protection and Free Access to Information received 3,284 complaints, of which it upheld 33% (2017: 1,086 complaints, 33% upheld). Most cases related to requests that had remained unanswered by the public institutions, and this continues to be a matter of concern. The Administrative Court ruled in 94 cases against decisions by public bodies not to grant access to information. However, court decisions are not effectively enforced. The increasing practice of declaring requested documents classified in order to restrict access to information is a serious matter of concern (2018: 104, 2017: 50, 2016: 30). Public institutions need to ensure greater transparency and accountability, especially in areas prone to corruption and in sectors dealing with the allocation of large portions of state budget or property. Results on the protection of whistle-blowers remain limited, with a continued decrease in requests for protection of individuals reporting threats to the public interest. One request for whistle-blower protection was submitted to the ACA in 2018 and is pending a decision, along with a case from the previous year (2017: 2 requests, protection granted in 1 case; 2016: 8 requests, protection granted in 3 cases). The ACA received 110 reports on threats to the public interest (2017: 69, 2016: 56) and initiated 13 new proceedings on its own initiative (2017: 27), establishing such a threat in 18 cases. So far, 19 misdemeanour procedures were initiated and 10 cases were sent to the prosecution. Integrity plans are being continuously implemented by the vast majority of public bodies, but their practical impact remains to be assessed. As regards the implementation of the Law on lobbying, 14 lobbying certificates were issued in total (2017: 7), and 6 lobbyists registered with the Agency in 2018 (2017: one). Despite this increase, these low numbers suggest that lobbying activities are being carried out outside the legal framework. Cases demonstrating the implementation of codes of ethics for members of the legislative and executive authorities are scarce, whereas a few such cases were reported by the police and customs administration. Institutional framework Prevention of corruption

The new rulebook on the internal organisation of the Anti-Corruption Agency was adopted in October 2018, providing for increased administrative capacity of the Department for Prevention of Conflict of Interest and Control of Political Party Financing. The number of ACA staff decreased to 54 (2017: 56) out of 60 planned. Following the dismissal of the CSO member of the Agency's Council, one position in the Council remains vacant. In January 2018, the Constitutional Court annulled the Agency's Rulebook on procedures; a new Rulebook was adopted in December 2018. Capacity-building activities continued, but further training is needed, in particular on election campaigns and protection of whistle-blowers. Further improvements were made to the ACA’s IT system – including the algorithm for random selection of public officials for verifying incomes and assets of public officials. The Agency established a connection to the Central Population Registry and Securities Commission for the purpose of controlling income and asset declarations. The newly established access to the registry of fines and misdemeanour records enables the Agency to record misdemeanour orders. The Agency also launched a new application, providing for electronic submission of integrity plans and reports of authorities, facilitating their easier processing and analysis. A new risk assessment methodology and software for in-depth, result-oriented control of funding of political parties and electoral campaigns is in use since January 2019. The ACA needs to use these tools to ensure effective exercise of its investigative powers. More in-depth checks to verify the credibility of data are needed, and the development of adequate methodology in this regard would be beneficial. The ACA continued addressing the limited impact of the Law on lobbying through awareness raising and outreach to public administration, local self-government and Parliament. It also published on its website a form to report illicit lobbying, but no such reports have been submitted yet. A proactive approach is needed in order to detect, follow-up and sanction breaches of the law. Despite measures taken, including on communication and outreach, the Agency 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 it being instrumentalised for political purposes persist. To strengthen public confidence, the Agency and its staff must ensure maximum transparency, integrity, impartiality, independence, an unselective approach, and uniform and full application of relevant laws. Montenegro still needs to demonstrate by concrete and visible results the impact of anti-corruption measures in particularly vulnerable areas such as infrastructure projects, healthcare, education, construction and spatial planning, and privatisation of public enterprises. Transparency in these areas needs to be significantly improved. 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. The introduction of full e-procurement is still ongoing and a new Law on public procurement planned for adoption in 2019. Eprocurement is expected to help achieve more transparency and reduce opportunities for abuses in public procurement procedures. However, checks on the overall public procurement cycle remain a cause for concern. Law enforcement The number of prosecutors allocated to the Special Prosecutor’s Office increased from 10 to 12their appointment is under way. In addition, two additional prosecutors are temporarily seconded to the SPO. Of the planned 37 positions, 35 have been filled (2017: 35). The SPO is supported by a Special Police Unit (SPU) with 29 positions filled, including 10 positions added in 2018. The overall institutional and operational capacity of prosecutors, judges and police to fight corruption remains insufficient and needs improvement, particularly through specialised and long-term training. Financial investigations are now being launched in the earlier stages of criminal investigations, but are still not launched systematically in corruption cases. The concept needs further alignment with the Financial Action Task Force (FATF) standards. Following the trend of previous years, the police and other state institutions continue to submit only a small number of cases to the prosecution service, while 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. A decision on the premises of the Special Prosecutor's Office remains pending, but no concrete progress has been made; this needs to be addressed without delay. It is also of utmost importance that the SPO is able to recruit the most suitable experts. Legal framework Montenegro is a party to all international anti-corruption conventions, including the United Nations Convention Against Corruption. 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. The Council of Europe Group of States against Corruption (GRECO) concluded that out of 11 recommendations on the ethics and integrity of MPs, prosecutors and judges, 6 are considered to be fully implemented, and 2 partially implemented, while 3 recommendations have not yet been implemented. Shortcomings in the existing legal framework on political parties' financing, including those identified by ODIHR, need to be addressed. Conflicting interpretations of the Law on financing of political entities and electoral campaigns by the ACA and the State Audit Institution cause legal uncertainty among the subjects of control. A consistent application of legislation is needed to ensure uniform requirements for all political entities and state institutions subjected to control during electoral campaigns. The Law on free access to information was amended in April 2017. Its implementation has not contributed to ensuring more transparency and accountability in public service, as the authorities continue declaring requested information as classified, excluding it from the scope of application of this law. This piece of legislation is a cause for concern and needs to be reviewed thoroughly in line with international standards. The legal framework on whistle-blower protection will need to be aligned with the new EU acquis on this issue. Obstacles to establishing a more convincing track record in successfully addressing high-level corruption also remain in the legal framework regulating pre-trial and financial investigations. Some excessive formalities will need to be filtered out of the legal framework. Strategic framework The action plan for Chapter 23 outlines comprehensive reforms to prevent and repress corruption. A complementing ‘operational document’ sets out additional measures to prevent corruption in areas particularly vulnerable to corruption. Tangible results remain to be achieved in these areas, and Montenegro should develop more impact-oriented sector-specific plans for the prevention of corruption. Fundamental rights The capacity of the Ombudsman and the National Preventive Mechanism (NPM) has further increased, as has the overall awareness of international human rights standards, in particular of European Court of Human Rights (ECtHR) case law. Further progress remains to be made in aligning the legislation with EU and international human rights standards, including in the area of prevention of discrimination of persons with disabilities. Implementation of the legislation remains challenging, and institutional capacity on human rights still needs to be strengthened substantially. Montenegro is yet to ensure adequate institutional mechanisms to protect vulnerable groups from discrimination. The Roma and Egyptian minority remains the most vulnerable and most discriminated community. Gender-based violence and violence against children remain issues of serious concern. 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 ECtHR case-law; ®ensure effective implementation of fundamental rights policies on gender equality, children and Roma rights, and rights of persons with disabilities, by securing sufficient budget allocation for implementation, improving the capacity of relevant institutions as well as inter-institutional coordination. As regards international human rights instruments, no new ratifications took place. Montenegro is yet to ratify the International Convention on the Protection of the Rights of All Migrant Workers and Members of Their Families (ICRMW), signed in 2006. Montenegro continued its dialogue and cooperation with international human rights organisations and monitoring bodies, in particular with the United Nations and the Council of Europe. The Universal Periodic Review report for Montenegro (Third Cycle) was adopted by the UN Human Rights Council in June 2018. Out of 169 recommendations Montenegro accepted 7, noted 3 and considered 144 as already implemented or in the process of implementation, while the rest are pending. The UN Committee on the Rights of the Child adopted concluding observations on Montenegro in June 2018. In September 2018, the UN Committee on the Elimination of Racial Discrimination also adopted concluding observations on Montenegro. In October 2018, the Council of Europe Group of Experts on Action against Violence against Women and Domestic Violence (GREVIO) published its first evaluation report on Montenegro. In February 2019, the European Committee for the Prevention of Torture and Inhuman or Degrading Treatment (CPT) published its fourth periodic report on Montenegro.

Montenegro continued to ensure a good level of cooperation with the European Court of Human Rights and none of the judgements are subject to the enhanced supervisory procedure. The government continues to conclude friendly settlements in cases concerning the length of proceedings and non-enforcement of domestic decisions. Montenegro is not yet observer to the Fundamental Rights Agency, but has expressed interest to become observer. In 2018, 13 judgements against Montenegro were issued by the ECtHR. Most cases concerned Article 6 ECHR (right to a fair trial), two concerned Article 8 (right to respect for private and family life), two Article 1 Protocol No. 1 (right to property), while one related to Article 13 (effective remedy). Violations were found in 11 of these cases. In 2018, a total of 318 new applications were allocated to a Council of Europe decision-making body, and there were 119 applications pending before the Court by the end of the year. Overall awareness of the institutions and rights protected by the European Convention on Human Rights (ECHR) is increasing. Improvements are still needed regarding the application of ECtHR standards and the quality of reasoning of decisions referring thereto. As regards promotion and enforcement of human rights, Montenegro has a Ministry for Human Rights (MHRM) and an Ombudsman, the latter being accredited with a B-status by the Global Alliance for National Human Rights Institutions (GANHRI). Both received assistance aimed at strengthening their respective capacity. The capacity of the MHRM remains limited and needs further strengthening. The Ombudsman Office’s visibility, outreach and productivity have further improved, along with its capacity to handle complaints and the quality of its opinions and reports. Cases initiated by the Ombudsman, including misdemeanours and criminal complaints, require a more proactive approach, along with a more effective follow-up. Four additional staff were recruited in 2018. The number of reported cases continued to grow, which could be an indication of increasing public trust in this institution. Cooperation with CSOs remains positive, especially in the area of anti-discrimination; however, a more systematic and structured outreach approach needs to be adopted. Financial resources provided to MHRM and the Ombudsman’s Office are not sufficient to enable them to carry out their tasks efficiently. As regards 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 (CPT). The capacity of the National Preventive Mechanism (NPM) has been strengthened, as evidenced by the results of its work. The NPM should demonstrate a more proactive approach by more regular visits to prisons and other detention facilities, including unannounced visits. Shortcomings and delays in investigating and prosecuting cases of alleged violence by law-enforcement officers, including in the context of protests, as well as mild sanctions for established offences, are signs of the difficulties of eradicating ill-treatment and establishing a record of deterrent sanctions. Ill treatment by the police needs to be addressed through stricter recruitment, better training and improved oversight; shortcomings persist in relation to internal control and disciplinary procedures of police. The above difficulties apply also to reported cases of alleged ill treatment in prisons, including the use of prolonged restraint and fixation, which needs to be addressed. Sufficient safeguards for persons deprived of their liberty are not in place. In the Dubrota psychiatric hospital, urgent measures are needed to tackle overcrowding. Montenegro needs to demonstrate willingness to effectively prevent and repress excessive use of force by law-enforcement officers, including by ensuring that they are always identifiable by ID numbers. In relation to the 2015 prison violence, the criminal case against 13 prison guards is still pending in first instance. Concerning the prison system, material conditions of detention continue to improve through small-scale refurbishments of facilities, but overall they remain poor. Challenges also remain on the provision of healthcare to inmates. 32 additional staff were recruited to the Spuž prison in 2018; however, their working conditions need further improvement. Despite support provided and additional recruitments, there has been limited progress on rehabilitation and resocialisation. Training, awareness raising and capacity building continued among prison guards and other staff on fundamental rights standards in prisons. Amendments to the Laws on probation and community service sentences, and on enforcement of prison sentences, penalties and security measures were adopted in March 2019. There has been some progress with regard to the alternative sanction system, but implementation is delayed. While numbers of probation staff increased, resources remain insufficient in general and the overall capacity of the probation system needs to be further increased. Further efforts are needed on implementing probation alternatives to home detention. Implementation of the legal framework on personal data protection remains weak. A working group has been formed to align the Law on personal data protection with the General Data Protection Regulation 2016/679 and Directive 2016/680. Capacity-building activities to strengthen the Agency for Personal Data Protection and Free Access to Information have continued, and one more staff member has been employed, but the Agency’s capacity needs further strengthening to perform its tasks efficiently. The number of data protection cases brought to court remains limited, while the number of complaints lodged with the Agency has increased. The protection of personal data in relation to the electronic database of voters has been ensured, in line with the OSCE/ODIHR recommendation from October 2016. The country has not signed or ratified the 2018 Protocol amending the Convention for the Protection of Individuals with regard to Automatic Processing of Personal Data. On freedom of thought, conscience and religion, and equal treatment of all religious communities, a new Law on freedom of religious belief is under preparation. Montenegro needs to ensure that this new legislation is prepared in a genuine dialogue with concerned stakeholders, and that it is in line with relevant international standards and conventions, while respecting the principles of transparency and inclusiveness. Tensions between the Serbian and Montenegrin Orthodox Churches continued. ----------------------------------------------------------------------------------------------------------------- Freedom of expression Montenegro has achieved some level of preparation on freedom of expression. No progress was made in the reporting period and previous recommendations are yet to be addressed. There have been some developments on the investigation into the May 2018 shooting of an investigative journalist, while important old cases of attacks against journalists remain unresolved. Continued political interference in the national public broadcaster (RTCG) and the Agency for Electronic Media (AEM) remains a matter of serious concern. The media scene continues to be highly polarised and challenges persist in understanding the role of free media. Self-regulatory mechanisms remain weak. Training of the judiciary on ECtHR case law on freedom of expression needs to continue. In addressing the shortcomings, Montenegro should in particular: ®significantly 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; ®support the establishment of effective self-regulatory mechanisms. Intimidation of journalists Progress in addressing violence against journalists and media is still very limited, with old cases remaining unsolved. Four attacks were registered by the authorities in 2018; in three of these, convicting judgements were issued against four individuals for endangering the safety of the journalists concerned. In addition, cyber-attacks against media outlets were reported. The most serious attack, qualified as an attempted murder, took place in May 2018 against the investigative journalist Olivera Lakić. The government has issued strong statements in support of investigating cases of violence against journalists. However, while the investigation into the May 2018 attack has shown initial results, the authorities have failed to show intensified efforts to solve old cases, including the 2004 murder of an editor-in-chief. Protection has been offered to two journalists. The first-instance verdict against a crime journalist on charges of creating a criminal organisation and trafficking of narcotics raises concerns as to journalists’ ability to perform their duties professionally and without fear of legal repercussions. There are still reports of undue pressure on journalists by lawenforcement officials to disclose their sources. The ad hoc commission for monitoring violence against media has since September 2016 produced five reports focusing on both recent and old cases, identifying a number of shortcomings including delays in investigations. The commission has been given access to documents with un-redacted names, but difficulties in obtaining timely and complete information from the authorities persist. The commission’s recommendations are yet to be fully implemented by state authorities and its 2019 budget is yet to be approved by the government. Further efforts are needed to prosecute the cases effectively and without delay, also in order to avoid the application of the statute of limitations. 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 Plans to amend the Law on state symbols, prepared in the absence of public consultations, and to introduce fines for not standing when the national anthem is played triggered a discussion on conditions conducive to the effective exercise of freedom of expression. While regulating these issues is a prerogative for the State, it is important that the legal framework does not infringe upon the right to freedom of expression. Laws on media, the public broadcaster RTCG and on electronic media are scheduled for adoption in 2019. These laws need to address the recommendations set out in the media sector inquiry and be complemented by a comprehensive media strategy. All laws governing or affecting the media sector should be prepared in an inclusive, coherent and coordinated manner, and alignment with the EU acquis and international standards ensured. Montenegro needs to ensure that its legislative framework provides an enabling environment for freedom of expression, based on transparency of media funding and ownership, integrity and pluralism. Implementation of legislation/Institutions Self-regulatory bodies continued to reflect the overall polarisation of the media scene in Montenegro and one of them suspended its activities in August 2018. As a result, some media outlets no longer have a complaint mechanism in place. There is still no uniform approach to sanctions, suggesting that ECtHR case-law and other standards are not yet sufficiently known. Efforts need to be stepped up to establish effective self-regulatory mechanisms, with a view to improving professional standards in media reporting and creating a climate where freedom of expression cannot be abused. Effective and even application of the revised code of ethics of journalists is yet to be achieved. Public service broadcaster The replacement of the public broadcaster RTCG’s Council members, and subsequently of its management, has fuelled further concerns about undue political interference and pressure on the RTCG. So far, in four of these cases domestic courts found that dismissals were not in accordance with the law. The editorial independence and professional standards of the RTCG need to be restored, and the RTCG Council shielded from undue influence and political pressure, including during the selection of its members. The contract on provision of public services between the government and RTCG was signed in March 2018, according to which the government is required monitor the implementation of the financial commitments. The issue of funding should remain separate from that of service provision, and ov