EUROPEAN COMMISSION Brussels, 12.10.2022 SWD(2022) 335 final COMMISSION STAFF WORKING DOCUMENT Montenegro 2022 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 2022 Communication on EU Enlargement policy



































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1. Introduction 1.1 Context 1.2 Summary of the report 1.3. State of play of the accession negotiations 2. Cluster 1: The Fundamentals of the Accession Process 2.1.Functioning of democratic institutions and Public Administration Reform 2.1.1 Democracy 2.1.2. Public administration reform 2.2. Rule of law and fundamental rights 2.2.1Chapter 23: Judiciary and fundamental rights 2.2.2Chapter 24: Justice, freedom and security 2.3. Economic criteria 2.3.1. The existence of a functioning market economy 2.3.2. The capacity to cope with competitive pressure and market forces within the Union 2.4. Public procurement, statistics, financial control Chapter 5: Public procurement Chapter 18: Statistics Chapter 32: Financial control

3. Good neighbourly relations and regional cooperation 4.Ability to assume the obligations of membership Cluster 2: Internal Market Chapter 1: Free movement of goods Chapter 2: Freedom of movement for workers Chapter 3: Right of establishment and freedom to provide services Chapter 4 - Free movement of capital Chapter 6: Company law Chapter 7: Intellectual property law Chapter 8: Competition policy Chapter 9: Financial services Chapter 28: Consumer and health protection Cluster 3: Competitiveness and inclusive growth Chapter 10: Digital transformation and media Chapter 16: Taxation Chapter 17: Economic and monetary policy Chapter 19: Social Policy and employment Chapter 20: Enterprise and industrial policy Chapter 25: Science and Research Chapter 26: Education and culture

Chapter 29: Customs union Cluster 4: The Green agenda and sustainable connectivity Chapter 14: Transport policy Chapter 15: Energy Chapter 21: Trans-European networks Chapter 27: Environment and climate change Cluster 5: Resources, agriculture and cohesion Chapter 11: Agriculture and rural development Chapter 12: Food safety, veterinary and phytosanitary policy Chapter 13: Fisheries Chapter 22: Regional policy and coordination of structural instruments Chapter 33: Financial and budgetary provisions Cluster 6: External relations Chapter 30: External relations Chapter 31: Foreign, security and defence policy Annex I – Relations between the EU and Montenegro



1. Introduction

1.1 Context Accession negotiations with Montenegro were opened in June 2012. To date, 33 negotiating chapters have been opened, of which three have been provisionally closed. Montenegro accepted the revised enlargement methodology. Montenegro continued to implement the Stabilisation and Association Agreement (SAA) and meetings of the joint bodies under the agreement took place at regular intervals. Overall progress in the accession negotiations depends on progress in the area of rule of law, as per the requirements set out in the Negotiating Framework as well as in the revised methodology formally accepted by Montenegro in the Intergovernmental Conference held on 22 June 2021. Progress towards meeting the interim benchmarks set in the rule of law Chapters 23 and 24 is key to achieving further progress in the negotiations overall, as no further chapters will be provisionally closed before this milestone is reached. The 14th Intergovernmental Conference held on 13 December 2021 and the SA Council held on 14 July 2022 provided political steer on accelerating work to meet that milestone. In order for Montenegro to take further steps forward in the accession path, it was urged to address all remaining gaps in the areas of freedom of expression and media freedom, the fight against corruption and organised crime, and to accelerate and deepen reforms on the independence, professionalism and accountability of the judiciary. The pace of this work will be determined by Montenegro. The Montenegrin authorities’ political commitment to the strategic goal of EU integration and their ambition to move forward in the accession negotiations based on continuing reform progress have been consistently stated as the country’s key priority. The failure to build consensus on key matters of national interest continued and caused two governments to fall on votes of no-confidence. Political volatility, government instability and tensions have stalled decision-making processes and reform implementation. Montenegro’s continued full alignment with the EU’s foreign and security policy, including EU restrictive measures following Russia’s unprovoked aggression against Ukraine, its vocal support for EU initiatives at the UN in response to this aggression, as well as for international law and a rules-based international order, is commendable. This is a strong signal of the country’s strategic orientation and commitment to the goal of EU accession. Political commitment, credible engagement and consensus building by all relevant institutions and actors in carrying out Montenegro’s EU reform agenda remain fundamental. It is important that all political actors exercise their responsibility to participate in political debates in Parliament and engage in constructive coordination on all relevant EU-related legislative initiatives. The COVID-19 pandemic continued throughout the reporting period. In spring 2022, Montenegro lifted partially the restrictions, introduced to limit the severity of the pandemic. During the reporting period, Montenegro adopted fiscal measures to mitigate the severe economic and social impact of the crisis. 1.2 Summary of the report As regards the political criteria, political tensions, polarisation, the absence of constructive engagement between political parties and the failure to build consensus on key matters of national interest continued and caused two fractious governments to fall on votes of no-confidence. The proper functioning of Montenegrin institutions has been affected by political volatility, government instability and tensions within the ruling majorities, stalling decision-making processes and reform implementation. The main judicial bodies, including the Constitutional Court, have been operating in an incomplete composition due to the Parliament’s inability to elect new members, thus undermining their proper functioning. As of mid-September the Constitutional Court was unable to fulfil its role due to the absence of a quorum, amplifying political uncertainty. The conclusion of the Fundamental Agreement with the Serbian Orthodox Church had an impact on the political atmosphere and raised further tensions. Overall, the governments and the Parliament failed to demonstrate in practice their engagement as regards the EU-related reform agenda. There was no progress with regard to a comprehensive reform of the electoral legal and institutional framework, including on the Organization for Security and Co-operation in Europe (OSCE) Office for Democratic Institutions and Human Rights (ODIHR) recommendations, following the observation mission of the 2020 parliamentary elections. The Parliamentary Committee for a comprehensive electoral reform was not operational from June until November 2021 and met only twice in 2022, before its mandate come to an end in July 2022. Local elections took place in five municipalities. In May 2022, the Parliament adopted amendments to the Law on Local Self-Government allowing to hold all remaining 2022 local elections on the same day. In July, the Constitutional Court assessed these amendments as unconstitutional. A credible, independent and effective institutional response to the so called ‘envelope affair’ remains to be ensured. The work of the Parliament has been marked by boycotts of the ruling majority and of the opposition, changes of governments and by the change of two consecutive Speakers in the process. The legislation-making process was significantly affected. There was no credible political dialogue and constructive engagement by political parties with a view to enhancing parliamentary accountability and government oversight. Government and Parliament cooperation should be further regulated to enhance Parliament’s participation in and oversight of the accession process. The Parliament continued to strengthen its transparency, by establishing several citizen-oriented services. The capacity of Parliament to integrate and oversight gender equality issues needs to be enhanced. The role of civil society is recognised and promoted, although the current legal and institutional framework needs to be further improved to strengthen the consultation and cooperation mechanisms between state institutions and civil society in the context of the EU accession process. Montenegro is moderately prepared as regards public administration reform. Overall, limited progress was made, including the adoption of the new 2022‑2026 strategy for public administration reform. Conversely, the effects of the reorganisation of the public administration and the amendments to the Law on civil servants and state employees adopted in 2021 continued to be felt, with staff changes, a loss of know‑how on EU accession process-related matters and an overall slowing of the pace of reforms. The lowered requirements introduced by these amendments are a source of continuing concern with regard to the merit-based recruitment, competence and independence of civil servants. Furthermore, draft amendments of the Law on local self-government would similarly lower such requirements at the local level. Amendments to the Law on access to information have yet to be adopted by Parliament. Effective lines of accountability within the administration are still to be established. Strong political will is needed to effectively address issues related to merit-based recruitments, optimisation of the state administration and implementation of managerial accountability. Montenegro remains moderately prepared when it comes to its judicial system. Limited progress was achieved overall during the reporting period. The implementation of key judicial reforms remains stalled. Certain long-pending high-level judicial appointments took place, while several others, including at the Constitutional Court (for which a qualified majority in Parliament is required) are still pending. Concerns remain over the institutional performance and consolidation of independent Judicial and Prosecutorial Councils. The track record on judicial accountability remains limited. The judiciary’s effective independence, integrity, accountability and professionalism need to be further strengthened, including by implementing the relevant constitutional and legal framework and by adopting legislative changes in line with European standards. The judiciary’s efficiency also needs to be strengthened. The adoption of a new strategy for the rationalisation of the judicial network is still pending, as is the implementation of the ICT strategy for the judiciary. Montenegro continues to make progress on the domestic handling of war crimes. Montenegro has achieved some level of preparation in the fight against corruption. Limited progress was achieved during the reporting period, with last year’s recommendations only partially met. The track record on prevention of corruption further improved, in particular due to the positive trend in the work of the Anti-Corruption Agency. However, more needs to be done to ensure the Agency’s integrity, impartiality and accountability, and to improve its tangible results and public trust, in line with the recommendations of the peer review mission conducted in 2021. To demonstrate a credible criminal justice response, Montenegro still must improve its track record of investigations, prosecutions and final convictions in the fight against corruption, including high-level corruption. Furthermore, the legal and institutional framework must be improved in line with the EU acquis and European standards, including for the effective use of financial investigations and asset seizure and confiscation in such cases. The sectors most vulnerable to corruption require targeted risk assessments and dedicated action. In the fight against organised crime, Montenegro has some level of preparation/is moderately prepared. Some progress was made in addressing last year’s recommendations, in particular as regards the efficiency of criminal investigations. The full use of special investigative measures was restored. Legislative changes introduced safeguards against political influence over the appointment or dismissal of the Head of the police. A register of beneficial ownership was created. The administrative framework on firearms was improved and a new strategy on the prevention of terrorism, money laundering and the financing of terrorism was adopted. Some key figures in organised crime groups were arrested and another record of drug seizures was reached. The first joint investigation team with a third country was launched. The number of final convictions in organised crime cases is on the rise. However, the track record of court decisions on tobacco smuggling and money laundering, the use of financial investigations and the capacity to confiscate the proceeds of crime needs to be strengthened. Montenegro has yet to address some systemic deficiencies that exist across the board in its criminal justice system, including the way organised crime cases are handled in courts. This will require a more deterrent sentencing policy and a revision of the use of plea bargains in organised and serious crime cases. Montenegro is moderately prepared in the area of fundamental rights. The legislative and institutional framework is largely in place and Montenegro continues to meet its international obligations on human rights. However, additional efforts remain needed to implement it fully. On freedom of expression, Montenegro benefits from a pluralistic media environment and has achieved some level of preparation. Limited progress was made on last year’s recommendations. The legal framework on the protection of journalists and other media workers was improved thanks to the adoption of amendments to the Criminal Code laying down more stringent penalties against attacks and threats against journalists and obstructing or preventing them from performing their work. However, the lack of effective judicial follow-up on important old cases remains a matter of serious concern. The revision of the legal framework and the drafting of a new media strategy remain pending, in order to ensure their mutual consistency and full alignment with the EU acquis and relevant European standards. Sustained efforts are needed to counter disinformation and limit the effects of online harassment and hate speech, without disproportionately limiting freedom of expression. The public broadcaster RTCG continued to produce politically balanced and diverse content. Deep political polarisation of the media scene persisted, while growing competition from big regional media placed additional strain on the local media market.

On the economic criteria, Montenegro has made good progress and is moderately prepared in developing a functioning market economy. After experiencing a sharp recession in 2020, the economy recorded a strong rebound in 2021 and kept growing at a steady pace in the first half of 2022 as the removal of COVID-19 restrictions buoyed both domestic and external demand. The recovery led to surging revenues and a very large improvement in the budget balance. The fallout from Russia’s war against Ukraine has been limited so far, despite these two countries’ very significant contribution to Montenegro’s tourism in the past. Driven by surging global commodity prices, inflation increased significantly. The government adopted an ambitious fiscal reform programme (called ‘Europe Now’) to support the post-pandemic recovery and provided fiscal stimulus measures easing the burden on households from rising energy and food prices. External imbalances decreased significantly thanks to the rebound of tourism, while the state of the labour market started to improve, even if structural problems persist. The banking system remained stable and non‑performing loans did not increase significantly in 2022 after the expiry in 2021 of the loan moratorium adopted in the context of the COVID-19 crisis. Montenegro has made some progress and is moderately prepared to cope with competitive pressure and market forces within the EU. The last two governments worked to improve innovation capacities and to set the basis for a green and digital transition in an effort to diversify Montenegro’s narrow production. In particular, modern telecommunications and ambitious green energy projects are being deployed. However, infrastructure gaps persist, as the country’s administrative and financial capacities to implement major public investments remains limited. The education system still faces numerous challenges over a chronic shortage of science, technology, engineering and mathematics (STEM) graduates. In addition, the low value added of domestic products, the small size of local companies and low level of participation in exports represent obstacles for increasing the productivity and competitiveness of local firms. On good neighbourly relations and regional cooperation, Montenegro generally maintains good bilateral relations with other enlargement countries in the region and with neighbouring EU Member States, marked by continued cooperation and several high-level visits. Relations with Serbia remain challenging but both sides are signalling more willingness to reset relations and work toward addressing open issues. In general, Montenegro actively participates in regional cooperation. On Montenegro’s ability to assume the obligations of EU membership, the country continued the work on alignment with the EU acquis in many areas, however overall the progress made was limited. The cluster on the internal market is key for Montenegro’s preparations for the EU’s requirements in this area and is of high relevance for early integration and the development of the Common Regional Market. All nine chapters are open, with closing benchmarks that remain to be fulfilled in each chapter. Progress was achieved in several areas within the cluster, particularly on: (i) market surveillance, accreditation and standardisation; (ii) stepping up the Employment Agency’s capacity on the European network of employment services; (iii) continued alignment with the Services Directive; (iv) legislation on accounting; (v) acquis alignment on intellectual property rights and (vi) State aid transparency and ordering recovery of unlawful State aid. The stability of Montenegro’s banking sector also advanced, as did legislative alignment on consumer protection and the adoption of implementing legislation on health protection. The competitiveness and inclusive growth cluster and the reforms concerned have significant links to Montenegro’s economic reform programme. All eight chapters are open, with closing benchmarks set in all but two, namely Chapters 25 (science and research) and 26 (education and culture) both of which are provisionally closed. Closing benchmarks remain to be fulfilled in each of the other six chapters. Some progress was achieved in various areas, namely on the alignment with the Broadband Cost Reduction Directive, on tax legislation and on administrative cooperation and mutual assistance. There was also progress on further implementation of the revised industrial policy. By contrast, there was slow progress on preparations for accession to the Convention on a Common Transit Procedure, on implementing actions envisaged in the 2018-2022 trade facilitation strategy, and on implementing the action plan for alignment with the EU acquis on economic and monetary policies. The green agenda and sustainable connectivity cluster is at the heart of the Green Agenda for the Western Balkans and closely linked to Montenegro’s economic reform programme and the Commission’s Economic and Investment Plan. All four chapters are open, with closing benchmarks that remain to be fulfilled in each chapter. Some progress was achieved on creating a functioning day-ahead energy market and on preparing for membership of the Paris Memorandum of Understanding on Port State Control. There was limited progress on the review and implementation of the transport development strategy; on water management and by improved climate change reporting. The cluster on resources, agriculture and cohesion comprises policies linked to EU structural funds and to developing capacity to assume the responsibilities of a future Member State. It also comprises some of the key policy areas crucial for ensuring sustainable food systems and helping rural communities to develop and diversify economically. All five chapters are open, with closing benchmarks that remain to be fulfilled in each chapter. Progress was achieved in various areas, notably in agriculture, food and fisheries, where there was further support for agricultural establishments and rural food companies to align with the EU standards, and in implementing IPARD. On financial and budgetary provisions, progress was achieved through improved coordination and management of own resources. On the external relations cluster, Montenegro has provisionally closed Chapter 30 and has to fulfil the single closing benchmark on Chapter 31. Montenegro continues full alignment with the EU’s common foreign and security policy, including with the EU’s restrictive measures following Russia’s unprovoked aggression against Ukraine. It also coordinates its positions with those of the EU, including within the WTO and maintains good cooperation with international organisations. Progress can be noted on the adoption of the Law on export control of dual-use goods, in line with the EU acquis, and the ratification of Central European Free Trade Agreement (CEFTA) Additional Protocol 6. Montenegro’s voting patterns on cybercrime at the United Nations are fully convergent with the position taken by the EU and its Member States. In the area of migration, Montenegro signed a cooperation roadmap with the European Asylum Support Office (now the EU Agency for Asylum) and joined the European Migration Network, an EU network of migration and asylum experts, as an observer member. The processing time for asylum applications was reduced. Montenegro’s visa policy is not fully aligned with that of the EU and Montenegro has not yet terminated its investor citizenship programme, despite previous recommendations and commitments. Montenegro is the Western Balkan partner hosting proportionally the highest number of Ukrainian nationals having fled the war. It adopted a decision granting one-year temporary protection to people fleeing Ukraine, under which more than 5 552 Ukrainians, mostly women and children, have registered so far. 1.3. State of play of the accession negotiations CLUSTERS Chapters/areas Date chapter opened / closed with interim or closing benchmarks Fundamentals All chapters open 23 – Judiciary and fundamental rights 24 – Justice, freedom, security 5 – Public procurement 18 – Statistics 32 – Financial control … Economic criteria … Functioning of democratic Institutions … Public administration reform December 2013 December 2013 December 2013 December 2014 June 2014 - - Internal market All chapters open 1 – Free movement of goods 2 – Freedom of movement for workers 3 – Right of establishment and freedom to

establish services 4 – Free movement of capital 6 – Company law 7 – Intellectual property rights 8 – Competition 9 – Financial services 28 – Consumer and health protection June 2017 December 2017 December 2017 … June 2014 December 2013 March 2014 June 2020 June 2015 December 2014 Competitiveness and inclusive growth All chapters open ch.25 and 26 provisionally closed 10 – Digital transformation and media 16 – Taxation 17 – Economic and monetary 19 – Social policy and employment 20 – Enterprise and industrial policy 25 – Science and research 26 – Education and culture 29 – Customs union March 2014 March 2015 June 2018 December 2016 December 2013 December 2012 (opened and closed – no closing benchmarks); April 2013 (opened and closed – no closing benchmarks) December 2014 Green agenda and sustainable connectivity All chapters open 14 – Transport policy 15 – Energy 21 – Trans-European networks 27 – Environment and climate change December 2015 December 2015 June 2015 December 2018 Resources, agriculture and cohesion All chapters open 11 – Agriculture and rural development 12 – Food safety, veterinary and phytosanitary policy 13 – Fisheries 22 – Regional policy and coordination of

structural instruments 33 – Financial and budgetary provisions December 2016 June 2016 June 2016 June 2017 … December 2014 External relations Both chapters open, ch.30 provisionally closed 30 – External relations 31 – Foreign, security & defence policy March 2015 – June 2017 provisionally closed June 2014 Not part of a cluster: chapters 34 Institutions, and 35 Other issues are currently not applicable for Montenegro. 2. Cluster 1: The Fundamentals of the Accession Process 2.1.Functioning of democratic institutions and Public Administration Reform 2.1.1 Democracy In Montenegro, polarisation, the absence of constructive engagement between political forces and the failure to build consensus on key matters of national interest continued and caused two governments to fall on votes of no-confidence. The proper functioning of Montenegrin institutions has been affected by political volatility, government instability and tensions within the ruling majorities, stalling decision-making processes and reform implementation. The main judicial bodies, including the Constitutional Court, have been operating in an incomplete composition due to the Parliament’s inability to elect new members, thus undermining their proper functioning. As of mid-September the Constitutional Court was unable to fulfil its role due to the absence of a quorum. No credible efforts have been made to overcome the societal and political polarisation, which culminated during the enthronement of the Metropolitan of the Serbian Orthodox Church (SOC) in September 2021 and the signing of the Fundamental Agreement with SOC in the summer 2022. There was no inter-party dialogue to address reconciliation and key matters of national interest. Overall, limited progress was made on the EU-related reform agenda. Elections There was no progress with regard to a comprehensive reform of the electoral legal and institutional framework, including on the OSCE/ODIHR recommendations, following the observation mission of the 2020 parliamentary elections. The Parliamentary Committee for a comprehensive electoral reform had limited activity and its mandate come to an end in July 2022. Local elections took place in five municipalities. In May 2022, the Parliament adopted amendments to the Law on Local Self-Government allowing to hold all remaining 2022 local elections on the same day. In July, the Constitutional Court assessed these amendments as unconstitutional. A credible, independent and effective institutional response to the so called ‘envelope affair’ remains to be ensured. The Parliamentary Committee for a comprehensive electoral reform resumed its activities in November 2021, after the return of four opposition Members of Parliament (MP) who had suspended their participation in June 2021. On 30 December 2021, upon a decision jointly supported by all nine parliamentary MP groups, the Parliament extended the Committee’s mandate until 31 July 2022, but issued no further extensions. There were only two sessions of the Committee in 2022.

In May 2022, amendments made to the Law on Local Self-Government stipulated that local elections in Podgorica and 13 other municipalities should be held on the same day, no later than 30 October. The Democratic Front (DF) political group and two Non-Governmental Organisations (NGOs) submitted a complaint to the Constitutional Court on the legality of the Law and in July, the Constitutional Court assessed these amendments as unconstitutional. Nevertheless, the President called for elections in all relevant municipalities for 23 October. In August, the Parliament passed amendments to the Laws on the territorial organisation of Montenegro and the Capital City, which envisages the establishment of a new municipality of Zeta This reduces the number of voters in Podgorica. The Parliament however did not appoint a Municipal Election Commission (MEC) for the new municipality, in the absence of a MEC, the institution responsible for organizing the elections, they cannot be appropriately held. The majority of recommendations of OSCE/ODIHR following the August 2020 parliamentary elections, as well as a number of previously pending OSCE/ODIHR recommendations, remain unaddressed, including those related to an audit of the voter register, measures against the misuse of state resources, as well as certain limitations of suffrage rights. In addition to addressing the OSCE/ODIHR recommendations, the Parliamentary Committee for electoral reform had a mandate to propose new laws on election of MPs and councillors, voter’s registry, financing of political entities and electoral campaigns, and registers of residence, a decision on holding local elections in all municipalities in a single day as well as a code of ethics for election campaigns. Furthermore, the Committee was tasked with analysing the implementation of and proposing possible amendments to the Law on identity cards and the Law on Montenegrin citizenship, as well as proposing measures to strengthen the professionalism and transparency of the work of the State Election Commission (SEC) and the Anti-Corruption Agency (ACA). No progress was achieved on any of these issues. Furthermore, no comprehensive audit to enhance public trust in the voter’s registry, for example through conducting field tests, has been conducted. Previous allegations of double-registered voters in one or more countries of the region need to be thoroughly investigated by the competent authorities. Following the dismissal of the SEC President in June 2021, the new President was elected only on 8 December 2021, after local elections were held in Cetinje, Mojkovac and Petnjica. Therefore, the SEC could not convene sessions to organize elections in prisons and to accredit election observers, consequently the elections took place without accredited observers. The SEC started working on election reform areas that are in its sole competence, such as analysing and revising its by-laws, training in local polling stations and increasing transparency of SEC sessions and decisions. In March 2022, the SEC adopted revised by-laws to ensure easier access to polling stations and a better voting experience for persons with disabilities. In June, the SEC further revised several by-laws in line with OSCE/ODIHR recommendations. In July, the SEC adopted voter complaints forms fulfilling an OSCE/ODIHR recommendation. The SEC signed a Memorandum of Cooperation with a NGO to strengthen the transparency of its work. After the local election in Petnjica, four complaints were submitted to the local Municipal Election Commission. The MEC and the SEC as second instance rejected all four complaints as unfounded. The applicants lodged an appeal against one of the SEC's decisions, which the Constitutional Court confirmed. Consequently, the elections in one polling station were repeated. On 28 March 2022, local elections took place in Berane and Ulcinj. After the MEC of Ulcinj accepted a complaint, elections were repeated in one polling station. There are no new developments in the political and judicial follow-up of the alleged misuse of public funds for party political purposes in 2012 on the “audio recordings affair”. Political and judicial follow-up to the alleged electoral fraud case the ‘envelope affair’ is still ongoing. In September 2021, after two appeals submitted by the Special State Prosecutor’s Office, the High Court in Podgorica confirmed an indictment against a former high Democratic Party of Socialists (DPS) official for money laundering. Parliament Deep polarisations and mistrust between and within political coalitions has marked the period during which two fractious governments have been in power. The work of the Parliament has been marked by boycotts of the ruling majority and of the opposition, changes of governments and by the change of two consecutive Speakers in the process. The legislation-making process was significantly affected. The Parliament should demonstrate in practise its commitment to Montenegro’s EU reform agenda and work on overcoming deep polarisation. There was no effective political dialogue and constructive engagement by political parties with a view to enhancing parliamentary accountability and government oversight. Government and Parliament cooperation should be further regulated to enhance Parliament’s participation in and oversight of the accession process. Relations between Parliament and Executive need to be regulated by an Act of Parliament, as the current Rules of Procedure were not enacted in the form of a law. The Parliament continued to strengthen its transparency, by establishing several citizen-oriented services. The capacity of Parliament to integrate and oversight gender equality issues needs to be enhanced. For the first part of the reporting period, tensions within the majority supporting the government led most MPs to boycott the plenary sessions during October and November 2021, with the exception of a few extraordinary sessions. This contributed to effectively suspending the decision-making processes in the Parliament. It was only at the end of December 2021 that the Parliament convened the ordinary autumn session. In January 2022, the long-lasting divergences within the parliamentary majority led to a vote of no-confidence in the Government and its downfall. The Speaker of the Parliament was also dismissed. The Parliament convened for its first regular session of the year only on 28 April. With the vote of 45 MPs, the Parliament elected a new government led by Mr Abazović and a new Parliament Speaker. Following the signature of a Fundamental Agreement with the Serbian Orthodox Church (SOC) on 3 August, the government was opposed by part of its own majority and lost a no-confidence motion on 19 August. As a result, the Montenegrin Government is currently exercising its functions in a caretaker mandate, as was also the case between January and April 2022. On 30 September the Parliament decided to not debate the shortening of its mandate, as had been proposed by the President following the missing of the deadline to nominate a new PM designate. As regards the Parliament’s legislative role, the occasional boycott of certain parliamentary groups weakened the quality of the debates. Bills were often discussed in the absence of basic financial assessments and without an adequate opinion of the government. The Parliament's capacity to scrutinise draft legislation for compliance with the EU acquis remains limited. During the December 2021 session, the Parliament elected a Vice-President of the Parliament from among MPs of minority parties and appointed the President of the State Election Commission and the Deputy Protector of Human Rights and Freedoms. At the same sitting, the Parliament elected five lay members of the Prosecutorial Council. The Parliament also adopted important laws and decisions, including the 2022 Budget Law, together with eight accompanying laws proposed by the government as part of the “Europe Now” programme. Efforts were undertaken to improve parliamentary oversight, but effective control remains at an early stage. The Rules of Procedure stipulate that the Prime Minister's Hour takes place once a month, and eight such sittings were held during the reporting period. The Parliament does not have the capacity to hold ministers accountable for non–attendance or lack of answers. On three occasions, the previous Prime Minister did not accept interpellations adopted by the Parliament against the former ministers. Despite procedural and institutional improvements, quantitative analysis on the work of the Parliament and its working bodies in the reporting period does not show significant progress on oversight, partly due to occasional boycott and the consequent impossibility for the committees to work in full capacity. Some committee chairs, however, use oversight proactively. The Committee on political system, judiciary and administration was the most active, whereas the Committee on Anti-Corruption least active. The Parliament continued to improve the level of transparency and communication with the public. The most visible form of parliamentary transparency is the possibility to follow proceedings through the media and on the Internet, by live broadcasting sessions of the Parliament and its working bodies or on request through the Parliamentary Channel. An important innovation is the establishment of the E-petition project, where citizens can contact the Parliament to initiate legislation. The project aims at fully digitalising the entire legislative process. However, the project has not been promoted enough and many citizens are not aware of its existence. No reports on violations of the Code of Ethics have been submitted to the Committee on Human Rights and Freedoms in the reporting period. The Parliament received 348 citizens' petitions, 22 were related to the E-petition legislative initiative. The professional and expert capacity of the Parliament’s administrative staff continued being strengthened. In the reporting period, on the proposal of the Administrative Board, the Parliament passed the decision to allow initiating criminal proceedings against one opposition Member of the Parliament of Montenegro, at the request of the Special State Prosecutor's Office, due to alleged abuse of his official position. The Special State Prosecution Office also requested waiving the immunity of five more MPs, without getting approval. Politics continue to be male-dominated and it is noticeable that verbal abuse against women in political life is growing, especially in the public sphere and particularly towards the younger politicians. Systemic shortcomings remain, and patriarchal attitudes and insufficient party interest are still obstacles to a more active involvement of women in politics. The cross-party Women’s Club in the Parliament continued its active role and initiated discussions on improving the legal framework on gender related issues through amendments to the Criminal Code. The Committee for Gender Equality improved its oversight function, by organising a number of consultative control hearings. MPs and parliamentary staff increased their capacity in gender-responsive budgeting and gender assessments in drafting and adopting legislation and policies. Shortcomings in the legal framework regulating political parties and their funding persist. The results produced by the Anti-corruption Agency’s and the State Audit Institution’s work on the monitoring of political parties’ financing are very limited. More efforts are needed to strengthen the control mechanisms and political parties should follow-up on their recommendations in a more effective and transparent manner. Inappropriate speech still dominates some debates, with MPs using terms that in the context of deepened political, social and ethnic divisions do not contribute to much-needed reconciliation and improved inter-party dialogue.

Governance The reporting period was marked by turmoil within the ruling majorities, which brought about a blockage of several reform processes and government activities, and had an impact on the effective institutional functioning of the country. A Minister of Justice was dismissed in June 2021 and until April 2022 no replacement was appointed. From beginning of February until 28 April 2022, the government exercised its duties as a caretaker, a number of senior appointments were made at the end of the mandate. The current government has been fully on duty for less than four months, and is currently continuing in a caretaker capacity. Montenegro continued to implement its national programme for EU accession. In November 2021, the government adopted the “Information on the need to form working groups for the programming of the EU Instrument for Pre-Accession Assistance for the period 2021-2027 (IPA III)” and “Information on progress in the process of negotiations on a cluster approach”. On 28 April 2022 the Ministry of European Affairs, under the responsibility of a Deputy Prime Minister, leading the negotiation process with the EU, was established. In August 2022, the government adopted decisions on a new EU negotiation structure and amended the decisions on working groups for negotiation Chapters 23 and 24. The new structure consists of the Negotiation Collegium, Council for Rule of Law, Negotiation Team, negotiation working groups, and the Ministry of European Affairs. The negotiating structure has been slimmed down considerably. Overall, transparency of governance remained an issue. However, some positive steps were made, including a regular, proactive publication of information on all expenditures from the central budget. Until April 2022, the government frequently resorted to the procedural option of adopting decisions without formally convening a government session and at the end of December 2021, extended the level of "confidential" for another five years for audio recordings from the sessions. Government sessions are now online broadcasted. As for local governance, there has been some progress reflected in more efficient and better-quality strategic planning processes at local level. Twenty-three municipalities developed their Strategic Development Plans. All municipalities in Montenegro established local employment partnerships. The “Europe Now” programme affected revenues of municipalities, decreasing revenues in some local governments even up to 75%, as compared to February 2021. At the same time, municipalities received lower contributions from the Equalization Fund, which hampers sustainable budgeting, especially for the poorest municipalities. New local government governments were established in Cetinje, Mojkovac and Petnjica, following the December 2021 local elections, and in Ulcinj and Berane following elections in March 2022.On 31 March 2022, the government dissolved the Municipal Assembly of Budva, on the grounds of not performing its competencies for more than six months and appointed a Board of Trustees, which elected in August 2022 a new mayor of Budva who will exercise its functions until the new local elections take place. Women’s political participation remains low at the local level. For the most recent local elections in Berane, two electoral lists were submitted and confirmed, even though they failed to ensure the legally binding quota of 30% of women candidates. There is a need to introduce mandatory gender budgeting and assign more funds to women’s entrepreneurship at local level and to ensure gender mainstreaming at all levels of decision making, policy planning and implementation. Civil society The role of civil society is recognised and promoted, although the current legal and institutional framework needs to be further improved to strengthen the consultation and cooperation mechanisms between state institutions and civil society in the context of the EU accession process. Amendments to the Law on free access to information and the law on volunteering are yet to be adopted. New members of the Council for Cooperation of State Bodies and Non-Governmental Organisations need to be appointed, so that it can resume its work. Although funding rules to civil society organisations (CSOs) are in place, only a few ministries launched calls to award grants to such organisations. The quality of cooperation between state bodies and civil society would be enhanced if ministries had greater capacity to carry out strategic planning, monitoring and evaluation of the support they provide to CSOs. An empowered civil society is a crucial component of any democratic system and should be recognised and treated as such by state institutions. The overall legal and institutional framework on freedom of expression, of association and assembly is in place. Draft amendments to the Law on access to information, drafted in consultation with civil society organisations are pending adoption. Information classified by public institutions and withheld from the public remains an issue, as in practice this restricts the access of CSOs and the public to key policy decisions. This concern needs to be addressed as a matter of priority. Montenegro does not have a law on volunteering, which would be needed to promote and regulate volunteer work in CSOs and hence increase their human resources. After the 2018-2020 strategy for cooperation with NGOs expired, a new (2022-2026) strategy was adopted in July 2022. The role of civil society in the accession process is recognised and promoted at political level and CSOs are represented in working groups devoted to the chapters of the EU accession negotiations. In 2021, most ministries appointed representatives of CSOs to working groups in charge of drafting laws and national strategies in their respective areas; this is an obligation under the Law on public administration. However, not all ministries conducted public consultations when draft laws and strategies were prepared. A significant number of laws were adopted without prior consultation of civil society. The consultation mechanisms with civil society need to be further improved, in order for it to become useful and effective. The Council for Cooperation of State Administration Bodies and Non-Governmental Organisations, a body consisting of an equal number of state officials and CSO representatives, held only one meeting in 2021. The Council rules were amended in July 2021, to make its work more transparent, in compliance with the new Decree on the organisation and operation of state administration. Under these amendments, documents discussed by the Council and minutes of its meetings are published. External participants and representatives of vulnerable groups can be invited to its meetings when relevant. However, no new Council members have been appointed so far following the expiry of the Council’s term of office in September 2021. If the Council is to fulfil its function effectively, it will need to improve its visibility and its outreach to CSOs and make sure that its rules function. The rules for public funding of CSOs require all ministries to conduct consultations with CSOs on their annual funding priorities, to publish open calls and to award grants through a selection process involving external evaluators. Some EUR 3.7 million from the state budget were allocated to CSO projects in 2021, including EUR 928 302 to co-finance 25 CSO projects supported by the EU. However, not all ministries have launched calls to award grants to CSOs, despite the obligation to do so, laid down in the Law on NGOs. In some cases, contracts with CSOs were signed but funds were not disbursed. New external evaluators were selected to improve the quality of the evaluation. However, 90 % of the newly selected evaluators were the same as in the previous year. The capacity of ministries to monitor and evaluate projects implemented by CSOs is still to be strengthened. Some EUR 4 million were allocated for funding or co-funding CSO projects in 2022. CSOs can also access funds at local level, according to the Law on local self-government. However, most of the local authorities do not launch calls, or, when they do so, the transparency of the process needs to be improved. 2.1.2. Public administration reform Montenegro is moderately prepared on the reform of its public administration. Overall, limited progress was made, including the adoption of the new 2022-2026 strategy for public administration reform. Conversely, the effects of the reorganisation of the public administration and the amendments to the Law on civil servants and state employees adopted in 2021 continued to be felt, with staff changes, a loss of know-how on EU accession process-related matters and an overall slowing of the pace of reforms. The lowered requirements introduced by these amendments are a source of continuing concern with regard to the merit-based recruitment, competence and independence of civil servants. Furthermore, draft amendments of the Law on local self-government would similarly lower such requirements at the local level. Amendments to the Law on access to information remain to be adopted by Parliament. Effective lines of accountability within the administration are still to be established. Strong political will is needed to effectively address issues related to merit-based recruitments, optimisation of the state administration and implementation of managerial accountability. Most of the recommendations from 2021 remain valid. In the coming year, Montenegro should in particular: ®implement the new public administration reform strategy, in line with the relevant action plans and mid-term budgetary framework; adopt the new public financial management reform programme and start its implementation; ®improve Montenegrin citizens’ access to public information by finalising, adopting and implementing amendments to the Law on access to information in line with the principles of good public administration; ®ensure effective lines of accountability between and within the institutions; amend the Law on civil servants and state employees and the Law on local self-government in order to ensure recruitments according to the principles of merit, competence and transparency. Strategic framework for public administration reform

Given that the previous 2016-2020 public administration reform (PAR) strategy had expired in 2020, the year 2021 was without a strategic framework until the year’s end. The government adopted a dynamic action plan for October-December 2021 covering issues not completed under the previous strategy, but results remained limited given the main focus on developing the new strategy. In December 2021, the government adopted a new PAR strategy for 2022-2026 and an action plan for 2022-2024. Civil society organisations were actively involved in the preparation of the new strategy. Political support for public administration reform continued to be ensured through the PAR Council, chaired by the Prime Minister, with three sessions in 2021. The PAR strategy is linked to annual budgeting and the mid-term budgetary framework. However, reliance on donor funding continues to be substantial. The overall quality of strategic documents produced over the reporting period improved, and the documents are largely aligned with the standards set out in the decree for strategic planning and related methodology. Proper costing of strategic documents and their linkages to the budgetary process require particular attention. Policy development and coordination In Montenegro, the legal framework for policy development is in place. In January 2022, the government adopted its medium-term work programme covering 2022-2024, with a detailed work plan for 2022. However, the priority pillars and objectives from the work programme are still neither interlinked nor aligned with the programme structure of the budget. Institutional structures for a coherent policy-making system and coordination are in place. However, the central coordination and quality control role of the General Secretariat of the Government needs to be strengthened. Evidence-based policy-making continues to be only partially ensured. While administrative data collection has improved, the quality of data has yet to be enhanced. Regulatory impact assessments are systematically produced, but their quality needs to be further improved. The legal requirements for inter-ministerial and public consultations are in place. However, the quality of the public consultation process in terms of both set-up and follow up has yet to be improved. Public scrutiny of the government’s work should also be further strengthened. Most government policy reports are activity- rather than results-based, making it more difficult to measure achievements. Communication with the public on ongoing reforms needs to be improved. Public financial management (PFM) The implementation of the action plan for the 2016-2020 PFM reform programme was extended to 2021, allowing for the consolidation of previous results in programme-based and gender-sensitive budgeting, performance budgeting and the gradual implementation of a mid-term budgetary framework. However, the action plan was not extended to cover 2022. The adoption of amendments to the Law on budget and fiscal responsibility to consolidate these reforms, including the establishment of a fiscal council, is still pending. The state budget electronic system was considerably improved but challenges remain over the inclusion of all public institutions in the centralised salary system and with regard to interoperability of the different IT systems in place. A new 2022-2026 PFM reform programme and action plan for 2022-2024 are yet to be adopted. Activities are expected to focus on management of public investments, debt and fiscal risks, notably on reform of state-owned enterprises, and on commitment and assets management and accrual accounting. Reforms in these areas will also contribute to implementation of several national development strategies and the economic reform programme. Further fine-tuning of programme-based budgeting, performance budgeting and internal control systems, as well as increased alignment between strategic planning and mid-term budgetary framework, have the potential to bring about deep modernisation of the public finance management system in the next few years. Public finance management at local level should be included in the new PFM reform programme. As concerns digitalisation in the PFM area, the interoperability of various IT systems remains an issue. Some efforts took place to improve budget planning and the central calculation of salaries but the interlinkage of other systems, especially the treasury system, still needs to be completed or established. This is delaying significant progress on PFM, on issues such as the introduction of accrual accounting, and the full development of performance budgeting. On budget transparency, continuous improvements to programme-based budget classification, with programme goals and performance indicators, have contributed to better clarifying the link between high-level strategic and policy objectives and annual and multi-annual budgets. However, weaknesses in monitoring and reporting still limit the analysis on effectiveness of spending and efficient service delivery. A citizens’ budget and new templates for in-year and annual budget execution reports, including non-financial and performance information, are yet to be adopted and implemented. Public service and human resources management The Human Resource Management Authority continues to proactively manage civil service training in horizontal areas, but a training needs analysis is yet to be carried out. On human resource management, improvements were made to registers on the number of employees at the central level. Amendments to the Law on civil servants and state employees adopted in 2021 lowered qualification requirements for the recruitment of civil servants, affecting merit-based recruitments, and the competence and independence of the public service. The criteria for dismissals were not transparently applied. This continued to affect the pace of public administration reform during the reporting period. Accountability of administration Amendments to the Law on access to information are still to be adopted by Parliament, the aim being to increase transparency in the work of public bodies and to grant Montenegrin citizens easier access to information. Implementing legislation on the reimbursement of costs in the access to information process was adopted in October 2021. In December 2021, Parliament dismissed two members of the Council of the Agency for Personal Data Protection and Free Access to Information, acting as an executive board of the agency. This has effectively incapacitated the decision-making of the agency, including the review of appeals against decisions of first-instance authorities on requests for public information. As concerns lines of accountability, the legislative framework for the supervision of the work of state administration bodies is in place, with the lines of responsibility of the ministries as well as their respective bodies defined. However, the functioning of this framework is yet to be improved, ensuring that the reports and annual plans of the subordinate authorities submitted for formal approval to the relevant ministry are result-oriented, with objectives, targets and measurable indicators. The organisational set-up of the state administration has not been fully aligned with the Law on state administration. Reorganisations of the state administration conducted during the reporting period were made without sufficient ex-ante analysis or strategic approach. However, in May 2022, Parliament adopted amendments to the Law on state administration, limiting the number of state secretary posts in the public administration. This has resulted in fewer political appointments in the public administration. Service delivery to citizens and businesses

Overall, while Montenegro has made some improvements in the area of digitalising services, the progress in public service delivery remained slow. There was a lack of clear ownership and leadership for the development of public services in general. Administrative procedures remained bureaucratic and complicated, and there was no evidence of work on harmonising implementing legislation with the Law on administrative procedures during the reporting period. In December 2021, the government adopted the 2022-2026 strategy for the digital transformation, with two main objectives: improving capacity for digital transformation, and strengthening digital awareness of Montenegrin society and digital competitiveness of the information and communication technology sector. December 2021 also saw the adoption of Montenegro’s 2022-2026 cyber security strategy. The strategy envisages activities to improve cyber-security in the country and establish a centre for cyber security. The programme for attracting ‘digital nomads’, adopted by the government in December 2021, aims to make Montenegro a globally attractive destination for digital experts. The Law on electronic documents is yet to be adopted. The purpose of this law is to contribute to accelerating digital transformation and to encourage the use of electronic documents, digital signatures and electronic seals in public administration and economy. The law is also expected to bring savings on administration and more streamlined procedures. To achieve efficiency in work, reduce the use of paper in public administration and reduce the costs, the ’paperless administration’ project was piloted in the Ministry of Public Administration, the Human Resources Management Authority and the Ministry of Justice and Human and Minority Rights. All document exchanges between these institutions are now done electronically. During the reporting period, the Code for Montenegro was drawn up as a platform volunteering to solve citizens’ problems and challenges. The idea of the platform is to transfer good practices in the area of digital transformation from private industry, civil society and academia to public administration. 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. An effective (independent, high quality and efficient) 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 EU acquis and the European standards in this area and has made limited progress overall. Limited progress was made in the area of the judiciary, with no progress on the implementation of key judicial reforms and a limited track record on judicial accountability. Corruption and high-level corruption remain issues of concern and are prevalent in many areas. Some progress has been made in the prevention of corruption, but progress was limited in the repression of corruption. Further efforts are needed to establish a credible and effective criminal justice response. A new strategic framework is needed, which should foster an integrated approach, focusing on the prevention and repression of corruption. On fundamental rights, Montenegro continued meeting obligations from international human rights instruments and legislation; however, challenges remain in ensuring the effective implementation of national legislation, in particular for the most vulnerable groups. While Montenegro benefits from a pluralistic media environment, progress was limited on freedom of expression and media freedom. Full and effective protection of journalists and other media workers and further alignment of the media policy and legal framework with the EU acquis remain to be ensured. Functioning of the judiciary Montenegro’s judicial system is moderately prepared, with limited progress overall. The implementation of key judicial reforms remains stalled. Certain long-pending high-level judicial appointments took place, bringing more stability to the justice system, but several others are still pending, including at the Constitutional Court, which require a qualified majority in Parliament; this process must ensure the merit-based appointment of individuals able to act independently, impartially and with integrity. Concerns remain over the institutional performance and consolidation of independent Judicial and Prosecutorial Councils. The track record on judicial accountability remains limited. Effective independence, integrity, accountability and professionalism of the judiciary need to be further strengthened, including by implementing the relevant constitutional and legal framework and by adopting legislative changes in line with European standards. The efficiency of the judiciary also needs to be strengthened. The human, financial, ICT and infrastructure management systems must be substantially improved. The adoption of a new strategy for the rationalisation of the judicial network is still pending, as is the implementation of the ICT strategy for the judiciary. Montenegro continues to make progress on the domestic handling of war crimes, with good judicial cooperation with neighbouring countries and with the International Residual Mechanism for Criminal Tribunals (IRMCT). Last year’s recommendations have not been met and remain largely valid. Therefore, in the coming year, Montenegro should in particular: ®ensure the consolidation of merit-based key judicial appointments of individuals able to act independently, impartially and with integrity. This includes the members of the Judicial Council, the Supreme State Prosecutor, and judges at the Constitutional Court; ®avoid reversing earlier achievements, ensure the effective independence and professionalism of the judiciary by addressing in substance all the outstanding recommendations of the Venice Commission and the Council of Europe Group of States against Corruption (GRECO), and by fully and unambiguously implementing the relevant constitutional and legal framework; ®ensure the independence, accountability, integrity and impartiality of the justice system by improving the institutional performance and operational capacity of the Judicial and Prosecutorial Councils and by reviewing and effectively implementing the disciplinary and ethical framework for judges and prosecutors to strengthen its objectivity, proportionality and effectiveness; ®improve the efficiency of the judiciary by adopting and implementing a new strategy for the rationalisation of the judicial network, and by starting to implement the ICT strategy for the judiciary. Strategic documents The implementation of the 2019-2022 strategy for the reform of the judiciary is ongoing and a Council was set up to monitor this in November 2021. The 2021-2022 action plan for the implementation of the strategy was adopted in December 2021 and a mechanism for monitoring its implementation is in place. The Ministry of Justice is yet to demonstrate unreserved commitment to full and timely implementation of all segments in the judicial reforms. Management bodies The Judicial and Prosecutorial Councils are the principal bodies managing the judicial system and the careers of judges and prosecutors. Their composition and appointment procedures are broadly in line with European standards. However, outstanding issues with regard to the functioning of both councils remain an issue of concern, namely due to their incomplete composition. The Judicial Council’s independence from undue political influence, for instance due to the ex officio participation of the Minister of Justice, as identified by the GRECO, is yet to be strengthened.

Moreover, the Venice Commission’s recommendations in its 2021 Opinion on the revised amendments to the Law on the State Prosecution Service concerning risks of politicisation of the Prosecutorial Council have not been addressed in full. since they entered into force in June 2021. New lay members continue to be voted in by simple majority in Parliament, an issue on which the Venice Commission already provided recommendations in 2014 and 2015, and which remains to be addressed in order to mitigate the risks of undue political influence over the Council. It is essential that Montenegro address these issues in order to avoid reversing its earlier achievements on justice reform. Additional guarantees need to be put in place to mitigate the risks and perception of undue political influence over the Judicial and Prosecutorial Councils. In June 2022, the General Conference of Judges elected four judges as new members of the Judicial Council. These took office in August after the term of office of the Council’s previous judicial members expired. However, the Judicial Council’s long-lasting functioning in an incomplete composition has been undermining its ability to take decisions that require a two thirds majority, such as the appointment of the Supreme Court President, and causes frequent delays in the exercise of some important powers, with a negative impact on the overall functioning of the justice system. This means that instead of 10 members, the Council currently has three lay members, four judges and the acting President of the Supreme Court. Due to the inability to secure a qualified majority in Parliament for the election of the Council’s lay members, a temporary anti-deadlock mechanism introduced in 2018 continues to be applied and the term of office of three lay members has been extended several times and are currently in their ninth year in office, while the Constitution limits the term of office to four. In August 2022, the Parliament failed to replace the lay members in the first round of voting following a selection procedure that started in May 2022 even though up to 35 eligible candidates applied. In September the Parliament appointed one of the required lay members. In January 2022, the Prime Minister took on the role of acting Minister of Justice, Human and Minority Rights, but did not participate in the work of the Judicial Council as an ex officio member in this capacity. Following the proclamation of the new Prosecutorial Council in August 2021, the Council did not hold any session until early 2022 due to its incomplete composition. In December 2021, Parliament appointed five members from the ranks of eminent lawyers, including one representative of non-governmental organisations (NGOs). This allowed the Council to restart its functioning. In February 2022, it unanimously appointed a new acting Supreme State Prosecutor from the ranks of prosecutors, as recommended by the Venice Commission in its 2021 opinion. However, the appointment of a permanent Supreme State Prosecutor, requiring a qualified majority in Parliament, is pending since October 2019. In February 2022, the Prosecutorial Council terminated the mandate of the former Chief Special Prosecutor and nine other prosecutors due to their meeting the conditions for retirement. In March 2022, the Council appointed a new Chief Special Prosecutor with a large majority (10 votes in favour and 1 against). At the request of the new Chief Special Prosecutor, in June 2022 the Prosecutorial Council reassigned three additional state prosecutors to the Special State Prosecutor’s Office. Following organisational changes, the Prosecutorial Council has yet to consolidate its regular work and practice. The operational capacity of both councils’ secretariats continues to improve but needs to be strengthened further. The 2022 budget of the Judicial Council was increased by 51.6% compared to the previous year, mainly due to the planned procurement of software. The lack of adequate spatial/working conditions for the Judicial Council and its Secretariat remains a long-term concern. The 2022 budget of the Prosecutorial Council was reduced by 15% compared to the previous year. The administrative capacities of both the Judicial and the Prosecutorial Councils have still to be improved. These include strategic, budget and human resources planning and management, and public communication. The 2022 Law on the budget established for the first time a system of distribution of financial resources by courts and prosecution offices individually. Results-based financial management in the judiciary is being gradually introduced across the board, with initial steps undertaken in 2020 and a number of internal financial procedures/regulations revised and codified in 2021. However, although key performance indicators in courts and prosecution offices, and methodology for performance-based financial management, are being piloted at basic court level, the methodology and tools for performance-based financial management and control are yet to be established. Overall, resource levels do not match judicial performance targets. The transparency of both councils continues to improve. The sessions of both councils are open to the interested public (media, NGOs). The transparency of the councils’ work needs to be further enhanced by publishing fully reasoned decisions on promotions, appointments and disciplinary cases. Members of both councils should devote more time and show full commitment to performing their functions. The Prosecutorial Council needs to demonstrate a more proactive approach to addressing issues within the public prosecution service, including with respect to the professional performance of the heads of state prosecution offices and of state prosecutors themselves, including their accountability and professionalism. Further efforts are needed to effectively consolidate strong and independent Judicial and Prosecutorial Councils, to substantially improve the functioning of the entire judicial system and restore trust in it. Independence and impartiality Following the 2013 amendments to Montenegro’s Constitution, judicial independence was strengthened by increasing the safeguards against the risks of undue political influence over appointments. Overall, the legal framework guaranteeing judicial independence is in place, but the judiciary and the prosecution service continue to be perceived as vulnerable to political interference, including due to some deficiencies that still need to be addressed in the relevant legislation. In this regard, a firmer commitment is needed to ensure the full and effective independence, integrity, and impartiality of Montenegro’s justice system. This includes fully and unambiguously implementing the relevant constitutional and legal framework and amending it as relevant in line with European standards. Political leaders should refrain from statements that undermine the independence of the judiciary and the autonomy of the state prosecution service. The underlying constitutional and legal framework limits the appointments of court presidents to maximum two terms in order to prevent over-concentration of power. However, three basic court presidents re-appointed for at least a third term of office between 2019 and 2020 are still in office. Four public calls for the election of a new President of the Supreme Court were unsuccessful. Following the retirement of the Deputy President of the Supreme Court in August 2021, the Council appointed the acting President of the Supreme Court to the position of member of the Judicial Council in September 2021. In March 2022, the Judicial Council elected 11 judges to the Supreme Court. With these appointments, the quorum for holding the Supreme Court’s General Assembly was met, so the Court can now propose a candidate for President of the Supreme Court. The Judicial Council has yet to appoint the new President of the Administrative Court; the position has been vacant for more than twelve months. The head of the basic state prosecution office in Podgorica was appointed in May 2022. The random allocation of cases is provided for by the Law on courts and implemented automatically through the judicial information system (JIS). However, limitations remain in very small courts, and the system has not been introduced in the misdemeanour courts. In 2021, a significantly smaller number of cases (114) was delegated among the courts, including 86 cases delegated at the level of basic courts and 28 cases delegated between the two high courts. Although establishing clear criteria for reallocation of cases is still needed, this reduction is an improvement in the practice of reallocation of cases between courts, and one which ensures the right to a lawful judge. The Constitutional Court continues to operate in an incomplete composition. Following the resignation of one of its members in January 2022, the Court operated with four instead of seven judges, which in practice meant that unanimity was required for the Court to take decisions, undermining its ability to function, its performance and efficiency. In July 2022, the procedure for appointing new judges failed in Parliament, due to a lack of political agreement on the seventeen candidates. The Parliament then published a new call to fill the four positions and the procedure is ongoing. Furthermore, one judge retired in September 2022, so the Court currently counts with only three members. Therefore, the Constitutional Court lacks the required quorum to take decisions and is unable to operate. Accountability The revision of the Law on the Judicial Council and judges is ongoing. The revision will address notably the disciplinary and ethical liability of judges and the criteria for the appointment, promotion and professional evaluation of judges. In April 2022, one basic prosecutor was arrested and detained on suspicion of abuse of official position. In May 2022, the President of the Commercial Court of Montenegro was arrested and detained on suspicion of organising a criminal group, corruption and embezzlement. Following the arrest, the President was temporarily removed from office, pending completion of the investigation and the decision on prosecution. The Judicial Council then appointed an acting President. The promotion and enforcement of codes of ethics and disciplinary accountability standards and procedures for judges and prosecutors remain limited. There is a limited track record and a lack of commitment from both the Judicial and Prosecutorial Councils to ensuring accountability. The legal framework for disciplinary issues and ethics for judges is being reviewed. Further improvements and effective enforcement of the judicial inspection system are needed, including more thorough and unannounced inspections. The system for detecting breaches of integrity rules needs to be made more effective, objective, consistent and credible. There is also a need to ensure the follow-up of all cases that give grounds for disciplinary or ethical responsibility. A legal remedy against decisions of the ethical commissions of both councils has yet to be introduced by the relevant law. The decisions of the Prosecutorial and Judicial Councils remain insufficiently motivated and case-law is yet to be developed.

The Ethical Commission of the Judicial Council did not perform its duties for 7 months (August 2021 – March 2022) due to its incomplete composition. In March 2022, the General session of the Supreme Court appointed one of its members to the Ethical Commission of the Judicial Council, creating conditions for the Commission to resume its work. In 2021, four disciplinary proceedings were launched before the Judicial Council’s Disciplinary Commission, while no violations of the Code of Ethics for judges were found in 2021. Overall, in 2021 the Commission issued nine decisions and two opinions. During the first half of 2022, 26 disciplinary proceedings were initiated against judges due to failure to submit their declarations of assets and income to Agency for the Prevention of Corruption. So far, five have been rejected as unfounded. In 2022, one violation of the Code of Ethics for Judges was found by the Ethical Commission of the Judicial Council. The Law does not provide for any legal remedy against the Commission’s decisions. In June 2022, the Ethical Commission adopted the guidelines on the freedom of expression of judges. The Ethical Commission of the Prosecutorial Council has not performed its duties since the appointment of the new composition of the Prosecutorial Council in August 2021. In 2022, 6 initiatives were pending before the Ethical Commission of the Prosecutorial Council. In two cases, the Commission found violations of the Code of Ethics for state prosecutors, while three initiatives were considered unfounded. Furthermore, in 2021 two disciplinary proceedings were brought before the Prosecutorial Council’s Disciplinary Commission, while in 2022, disciplinary proceedings were initiated against one state prosecutor. In one case, the Commission found a violation of disciplinary rules and imposed a sanction consisting in a 20% salary decrease for 3 months. The approach of the Ethical Commissions of the Judicial and Prosecutorial Councils to handling cases is still not sufficiently effective and consistent. In 2021 and 2022, judicial inspectors from the Ministry of Justice, Human and Minority Rights performed supervision of the work in 21 courts, nine state prosecution offices, 53 notaries and 28 public bailiffs. No irregularities were found during the supervision of the courts in 2021. In 2022, irregularities were observed in two basic courts. No irregularities were found during the supervision of the prosecutor’s offices. Judicial inspectors conducted 43 inspections of the work of public notaries and found three irregularities during the supervision. Two new inspectors were hired in January 2022; however, the Ministry’s capacity in this area still requires significant strengthening. The law on systematisation of the Ministry plans to increase the number of judicial inspectors to five. There were no significant results on the accountability of independent legal professions. The new Code of Ethics for Lawyers has not yet been adopted. In August 2021, the new Code of Ethics of the Association of Court Experts was adopted. Implementation of the codes of ethics of notaries, bailiffs and court interpreters remained limited and needs to be further enhanced. The self-regulatory roles of the chambers and professional associations of legal professions must also be enhanced further. Professionalism and competence Montenegro continues to organise single nationwide competitions for judges and prosecutors. The 2020-2022 plan for vacant judicial positions was amended several times during 2021, given the large number of resignations and retirements. In the reporting period, the Judicial Council elected four court presidents, nine judges of the High Court, eight judges of basic courts, seven judges of misdemeanour courts, and 51 candidates for judges, while the procedures for appointing several court presidents and more judges are ongoing. In 2021, one judge was voluntarily reassigned. The procedure for appointing the Administrative Court president has been ongoing for more than 8 months. In 2021, the Prosecutorial Council elected two prosecutors to the Supreme State Prosecution Office, nine heads of prosecution offices, five prosecutors to High State Prosecution Offices and two prosecutors to the Basic State Prosecution Offices. In July 2021, the Prosecutorial Council appointed three special prosecutors, while one state prosecutor was voluntarily assigned on a permanent basis to the Basic State Prosecutor’s Office in Podgorica. Implementation of the system of regular professional evaluation of judges and prosecutors is affected by both council’s inactivity. In 2021, no judges and only one state prosecutor were evaluated using the regular assessment scheme. During the reporting period, the evaluation of 101 judges as part of the promotion procedure was completed. In 2021, four prosecutors were evaluated under the promotion procedure. The interpretation of legal conditions for the retirement of judges and prosecutors is disputed after the 2020 Law on pensions insurance lowered the general age requirement for the right to a pension for public officials, deviating from provisions in the general body of labour law. In August 2021, the Judicial Council declared the termination of the judicial function of 23 judges, based on their having met the conditions for retirement. Of these 23 judges, 11 initiated proceedings before the Constitutional and Administrative Courts, challenging the decision of the Judicial Council. Proceedings before the Constitutional and Administrative courts are ongoing. In February 2022, the Prosecutorial Council declared the termination of the prosecutorial function for 10 state prosecutors, based on their having met the conditions for retirement. Quality of justice The budget for the judiciary for 2022 is EUR 37.3 million (2021: EUR 36.5 million) and remains above the regional per capita average. Montenegro had 268 full-time judges (43 per 100,000 inhabitants) and 111 full-time prosecutors (18 per 100,000 inhabitants) in 2021. According to the European Commission for the Efficiency of Justice (CEPEJ), the European averages are 21 judges/12 prosecutors per 100,000 inhabitants. has 50 judges (60% of whom are women) and 19 prosecutors (over 62% of whom are women) per 100 000 inhabitants, far above the European average of 17 judges and 11 prosecutors. Collection of court fees remains much lower compared to the region. The allocated budget for the work of the Centre for Training in Judiciary and State Prosecution Service for 2022 amounts to EUR 437 754, which is below the legally established threshold. While the Centre continued to be financially supported by the EU and other international donors, its autonomous and self-sustainable functioning will need to be ensured. There is continued improvement in the overall functioning of the Centre and its staffing levels. However, its administrative, managerial, strategic planning, communication and financial management capacities are still to be improved. At the beginning of 2021, there were 16 employees in the Centre, whereas at the end the reporting period, there were 12 employees instead of the 19 posts officially allocated to the Centre. In 2021, the former judicial training programming was replaced by a comprehensive training needs assessment (TNA) conducted by the Judicial Training Centre, following which a general annual training programme for 2022 was developed. Efforts are needed to involve more judges and prosecutors in the TNA process and further improve training delivery and evaluation practices. TNA should take into consideration the multidisciplinary and practical nature of judicial training, essentially intended to transmit professional techniques and values complementary to legal education. The Centre must develop capacity to conduct assessment on training needs in connection with meeting rule of law standards and implementing the EU acquis, and to design and implement corresponding training activities. The total budget allocated to training initiatives at the training centres and to other initiatives implemented directly by courts and prosecution offices in 2021 amounted to EUR 422 455, a 46% decrease on the previous year. The results of the 2021 Report on European Judicial training showed that in 2020 Montenegro had the highest percentage of judges participating in continuous training in EU law among all candidate countries and potential candidates, at nearly 20%. It is important to establish regular cooperation and more frequent communication between the Judicial Training Centre and the Judicial and Prosecutorial Councils. The organisation of meetings between the representatives of these institutions in December 2021 is a step in the right direction. The positive trend in alternative dispute resolution (ADR) continued. The implementation of the new law, which provides for the compulsory recourse of this mechanism to the types of cases that are suitable for ADR, started in August 2020. In 2021, the ADR system continued to expand, with 1 315 settlements reached (2020: 1 269). In 2021, there were 6 106 mediation proposals preceding judicial litigation (2020: 1 540). However, the judicial system is not yet prepared to accommodate the increased use of ADR, since the implementation of the new ADR legislation is still not effective or being applied consistently in the competent courts. Further reforms should focus on strengthening the Centre’s supervision, enhancing judges’ and mediators’ powers, and increasing the scope and quality of ADR services, especially in commercial cases. Efficiency In 2021, 118 568 cases (2020: 139 560) were pending before Montenegrin courts, 84 143 of which were new cases (2020: 80 723). Some 80,485 cases were resolved (2020: 83 206), and at the end of 2021 there was 37 963 cases pending. The number of cases older than 3 years was 3 794 at the end of 2021 (2020: 3 036). The disposition time, i.e. the average time from filing to decision, was 158 days in basic court cases (2020: 150), 197 for commercial cases (2020: 148) and 538 days before the Administrative Court (2020: 438). As regards enforcement, the backlog of pending enforcement cases before the courts decreased. Some 760 cases were pending at the end of 2021 (150 000 in 2016). Since the introduction of the bailiff system in 2016, enforcement cases before the courts have gradually reduced. In 2021, 76 779 cases were filed with bailiffs’ offices (2020: 66 085), with 47 217 cases pending at the end of the year (2020: 43 569). The centralised case management system for bailiffs continues to be used consistently, guaranteeing data reliability. The enforcement of court decisions remains a challenge, due to the lack of effective follow-up by judicial authorities. In 2021, the Constitutional Court received 1 344 new cases and resolved 1 498 pending cases. The current backlog is some 3 212 cases; 2 967 (around 92%) of those are pending constitutional complaints on human rights violations. Furthermore, there are 123 laws and 127 pieces of implementing legislation adopted by Parliament pending constitutional review. Concrete steps need to be taken to ensure adequate operational capacity necessary for the efficient functioning of the Court and to reduce the backlog of cases. Currently, 4 judges and 34 employees form the workforce of the court’s professional service– this is around 60% of the officially allocated posts.

There were no developments on implementing recommendations from the analysis on rationalisation of the court network adopted by the government in October 2020. The analysis should serve as a basis for preparing a new strategy in this area. Drawing on the available data, conclusions from studies and cost-benefit analyses, reform in this area should aim to ensure better overall management of human resources and judicial infrastructure, ultimately leading to optimisation of the court network and the closing of small unviable courts. Full implementation of instructions for collecting statistical data in compliance with the guidelines of the European Commission for the Efficiency of Justice (CEPEJ) remains a challenge. Issues also remained regarding the reliability and availability of statistical data for the judiciary in the absence of an advanced case management system. Data on the total length of proceedings is still not available. Statistical information on the performance of the judicial system is not systematically analysed or used for management and policy-making purposes. The implementation of the ICT strategy and the 2021-2023 justice development programme are pending. The efficiency of the justice system is hampered by the lack of effective systems for human resources and staffing, financial resources, ICT and infrastructure management. There is an urgent need for strategic investments in infrastructure. The allocated working space and working conditions in general at all levels of the judiciary are well below the minimum required European standards. There is an insufficient number of specialised judges and prosecutors and a lack of expertise in certain areas. Adequate ICT infrastructure and equipment in the judiciary is lacking. More efforts are needed to ensure the effective financial independence of the judicial system. Domestic handling of war crimes cases Montenegro continued to implement its war crime prosecution strategy, with limited results. In 2021, the Special Prosecutor’s Office conducted preliminary investigations in seven cases concerning war crimes committed on the territories of Bosnia and Herzegovina and Croatia. In one case, relating to a request from Bosnia and Herzegovina for mutual legal assistance concerning one person, the authorities found that there was reasonable suspicion of the criminal offence. Another investigation was closed for lack of grounds for prosecution. Work on the remaining five cases continues. Montenegro continued its good cooperation with neighbouring countries. In 2021, the Special State Prosecutor’s Office acted upon 10 letters rogatory, and five letters rogatory from 2020. Good cooperation continued with the International Residual Mechanism for Criminal Tribunals (IRMCT). In the context of a file submitted by individuals believed to be Montenegrin nationals who are suspected of serious war crimes, one person was heard as a witness and exchanges continued with the prosecution services of Bosnia and Herzegovina. Based on IRMCT recommendations, amendments are being prepared to the Criminal Procedural Code to proactively address the legal and practical obstacles to effectively investigate, prosecute, try, and punish war crimes in line with international standards. Work continued on legislative changes that would allow Montenegro to effectively investigate and prosecute conflict-related sexual violence cases. In October 2021, the High Court of Podgorica upheld an indictment against a suspect; the trial is currently ongoing. In June 2022, the Special Prosecutor’s Office submitted another indictment to the High Court of Podgorica. During the reporting period, 30 claims for compensation were pending before the courts, all concerning the ‘Morinj camp’ case. Of those, 27 were fully or partially upheld, awarding the total non-pecuniary damages of EUR 196 876.66. The proceedings on three remaining cases are ongoing. In October 2021, the Minister of Foreign Affairs attended the commemoration of the 30th anniversary of the Morinj camp. This was the first time for Montenegrin and Croatian authorities to visit the site together. In May 2022, for the first time Montenegrin authorities attended the gathering in Herceg Novi marking the deportation of Bosnian refugees in 1992 and publicly apologised to the families of deported refugees. Montenegro continued to actively participate in the regional Missing Persons group and contributed to implementing the framework plan signed in November 2018. Cooperation continued with neighbouring countries under bilateral cooperation protocols. The list of missing persons compiled by the Commission on Missing Persons of Montenegro maintains records of 51 active cases who are Montenegrin citizens or whose families reside in Montenegro. Montenegro’s legislative framework still does not include a specific law on missing persons. Fight against corruption Montenegro has achieved some level of preparation. Limited progress was achieved during the reporting period. Last year’s recommendations were partially met. The track record on prevention of corruption further improved, in particular due to the positive trend of the work and performance of the Anti-Corruption Agency (ACA). However, more needs to be done to ensure the Agency’s integrity, and accountability, and to improve its tangible results, in line with the recommendations of the peer review mission conducted in 2021. To demonstrate a credible criminal justice response, Montenegro still must improve its track record of investigations, prosecutions and final convictions in the fight against corruption, including high-level corruption. Furthermore, the legal and institutional framework must be improved in line with the EU acquis and European standards, including for the effective use of financial investigations and asset seizure and confiscation in such cases. The sectors most vulnerable to corruption require targeted risk assessments and dedicated action. In the coming year Montenegro should in particular: ®review the legal framework and strengthen institutional capacities in the prevention and repression of corruption to address the issues identified with regard to its enforcement; as well as on financial investigations, and asset seizure and confiscation, to align it with international standards and with the EU acquis and European best practices; ®improve the track record on corruption, including high-level corruption, by imposing effective sanctions, and take concrete measures to improve the use of plea bargain agreements in exceptional cases for a more transparent, credible, deterrent and consistent sanctioning policy and criminal justice response; ®adopt a new strategic framework, including to establish mechanisms for an integrated approach, for the prevention and repression of corruption to ensure overall coherence and improve interinstitutional coordination and cooperation. Institutional framework Overall, there is a need to effectively establish an integrated strategic approach to prevent and fight corruption. Interinstitutional cooperation and coordination between all bodies involved is paramount, as is ensuring coherence, clear definition and understanding of their mandates, roles, and responsibilities. The ACA’s efforts on the prevention of corruption need to be complemented by a serious response on the part of law enforcement and prosecution service to combating corruption. Independent and efficient courts are also key to ensuring fair and timely judicial oversight and control of the actions of the ACA and of prosecutors. Prevention of corruption The Anti-Corruption Agency (ACA), established in 2016, is the key institution for promoting integrity and preventing corruption in Montenegro. In implementing its activities, the Agency co-operates with several public bodies, including the prosecution services and the State Audit Institution. The results of the ACA’s investigations are subject to court review. The Anti-Corruption Council, appointed by the President in July 2019 for a 4 year term of office, consists of five members and is responsible for the decision-making of the Agency and the appointment of its Director. Overall, the capacities of the Anti-Corruption Agency continued to be strengthened. This resulted in improved performance and increased efforts to produce tangible results. The ACA and its Council continued to demonstrate consistent proactivity in their work, including by addressing the caseload from previous years, and increased their outreach activities towards the public, media and civil society. However, the recommendations of the April 2021 EU peer review mission remain to be fully addressed. The mission focused on assessing the legislative and institutional framework on the prevention of corruption and to improve the capacities of the Agency, its performance, working methods and achieved results, in particular in the core areas of its mandate. Sustained efforts are required to meet the challenges relating to the Agency’s priority-setting, selective approach, and quality of its decisions. The Agency’s financial independence must be effectively ensured. The Agency currently employs 55 people, while the rulebook on the systematisation of the Agency foresees a total of 75 posts. The 2021 EU peer review mission recommended that additional human resources be allocated to the ACA.

In 2021, the Agency developed the strategic work plan for 2022-2025, setting out the priorities in the work of the Agency for the upcoming period. The Agency continued its communication activities and worked with civil society organisations, hosting an open day for NGOs in June 2021. The ACA also organised several anti-corruption campaigns in 12 municipalities. Moreover, the Agency conducted anti-corruption training, specifically targeting newly appointed public officials. In 2021, 17 trainings for 197 participants were organised. 21 anti-corruption training sessions for 217 participants were organised in the first half of 2022. In 2021, the National Council for the Fight against High-level Corruption, established in December 2020 to address systematic problems related with high-level corruption cases and to increase transparency in the fight against corruption, focused on serious and high-level cases, including tobacco smuggling in the Port of Bar. In January 2022, the Prime Minister dismissed the Deputy Prime Minister from the position of President of the Council, and consequently three Council members resigned and have not been replaced since. The National Council has not met since January 2022. There are multiple overlaps of the Council’s powers with other institutions, most notably the ACA and the prosecution service, therefore its institutional role, relations with other bodies and its powers, as well as safeguards in this respect, still need to be adequately defined. Law enforcement In 2021, the Special State Prosecutor’s Office for Organised Crime and High-level Corruption (SPO) reduced its staff to 48 members (2020: 54), including 12 special prosecutors (2020: 16). The SPO’s capacity was boosted in June 2022 with the reassignment