COMMISSION STAFF WORKING DOCUMENT Montenegro 2020 Report Accompanying the Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions 2020 Communication on EU Enlargement Policy
Date: 2020-10-06
Institutions: Directorate-General for Neighbourhood and Enlargement Negotiations, European Commission
Subjects: Montenegro, accession criteria, accession negotiations, coronavirus disease, epidemic, pre-accession strategy

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 6.10.2020  SWD(2020) 353 final  COMMISSION STAFF WORKING DOCUMENT Montenegro 2020 Report     Accompanying the Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions    2020 Communication on EU Enlargement Policy {COM(2020) 660 final} - {SWD(2020) 350 final} - {SWD(2020) 351 final} - {SWD(2020) 352 final} - {SWD(2020) 354 final} - {SWD(2020) 355 final} - {SWD(2020) 356 final}  
 
 
Table of Contents 

1. 

1.1.  

1.2.  

1.3 

2. 

2.1 

INTRODUCTION .............................................................................................................. 3 

Context .......................................................................................................................... 3 

Summary of the Report ................................................................................................. 3 

State of play of the accession negotiations ................................................................... 8 

Fundamentals first: political criteria and rule of law chapters...................................... 9 

Functioning of democratic institutions and public administration reform ................... 9 

2.1.1  Democracy .................................................................................................................... 9 

2.1.2.  Public administration reform ...................................................................................... 16 

2.2 

Rule of law and fundamental rights ............................................................................ 19 

2.2.1.  Chapter 23: Judiciary and fundamental rights ............................................................ 19 

2.2.2  Chapter 24: Justice, freedom and security .................................................................. 42 

3. 

3.1. 

3.2. 

4. 

5.  

5.1 

5.2 

5.3 

5.4 

5.5 

5.6 

5.7 

5.8 

5.9 

5.10 

5.11 

5.12 

5.13 

5.14 

Fundamentals first: economic development and competitiveness .............................. 57 

The existence of a functioning market economy ........................................................ 57 

The capacity to cope with competitive pressure and market forces within the Union65 

Good neighbourly relations and regional cooperation ................................................ 67 

Ability to assume the obligations of membership ...................................................... 70 

Chapter 1: Free movement of goods ........................................................................... 70 

Chapter 2: Freedom of movement for workers ........................................................... 72 

Chapter 3: Right of establishment and freedom to provide services .......................... 73 

Chapter 4: Free movement of capital .......................................................................... 74 

Chapter 5: Public procurement ................................................................................... 76 

Chapter 6: Company law ............................................................................................ 77 

Chapter 7: Intellectual property law ........................................................................... 78 

Chapter 8: Competition policy .................................................................................... 79 

Chapter 9: Financial services ...................................................................................... 82 

Chapter 10: Information society and media ................................................................ 83 

Chapter 11: Agriculture and rural development ......................................................... 85 

Chapter 12: Food safety, veterinary and phytosanitary policy ................................... 86 

Chapter 13: Fisheries .................................................................................................. 87 

Chapter 14: Transport policy ...................................................................................... 88 

1 

 
 
5.15 

5.16 

5.17 

5.18 

5.19 

5.20 

5.21 

5.22 

5.25 

5.26 

5.27 

5.28 

5.29 

5.30 

5.31 

5.32 

5.33 

Chapter 15: Energy ..................................................................................................... 90 

Chapter 16: Taxation .................................................................................................. 93 

Chapter 17: Economic and monetary policy .............................................................. 94 

Chapter 18: Statistics .................................................................................................. 96 

Chapter 19: Social Policy and employment ................................................................ 98 

Chapter 20: Enterprise and industrial policy ............................................................ 100 

Chapter 21: Trans-European networks ..................................................................... 102 

Chapter 22: Regional policy and coordination of structural instruments ................. 103 

Chapter 25: Science and Research ............................................................................ 105 

Chapter 26: Education and culture ........................................................................... 106 

Chapter 27: Environment and climate change .......................................................... 109 

Chapter 28: Consumer and health protection ........................................................... 111 

Chapter 29: Customs union ...................................................................................... 114 

Chapter 30: External relations .................................................................................. 116 

Chapter 31: Foreign, security and defence policy .................................................... 117 

Chapter 32: Financial control ................................................................................... 119 

Chapter 33: Financial and budgetary provisions ...................................................... 121 

Annex I – Relations between the EU and Montenegro ........................................................... 123 

2 

 
 
 
 
1. 

INTRODUCTION  

1.1.   Context 

Accession  negotiations  with  Montenegro  were  opened  in  June  2012.  To  date  all  33  screened  
negotiating  chapters  have  been  opened,  of  which  three  have  been  provisionally  closed. 
Montenegro continued to broadly implement the Stabilisation and Association Agreement (SAA) 
and the meetings of the joint bodies under the agreement took place at regular intervals. 

Chapter 8 (Competition), the final negotiating chapter for Montenegro, was opened in June 2020. 
Overall progress in the accession negotiations will depend on progress in the area of rule of law, 
as  per  the  requirements  in  the  Negotiating  Framework.  Progress  towards  meeting  the  interim 
benchmarks  set  in  the  rule  of  law  chapters  23  and  24  will  be  key  for  further  progress  in  the 
negotiations overall.  

The public political commitment of the Montenegrin authorities to the strategic goal of European 
integration is regularly and consistently stated as the key priority for the country and mostly also 
translates to policy decisions.   

The COVID-19 pandemic is a global shock that has not spared the Western Balkans. The final 
extent  of  its  footprint  in  terms  of  loss  of  human  lives  and  damage  to  the  economies  is  still 
difficult  to  assess,  but  early  estimates  foresee  a  drop  of  between  4  and  6%  of  Gross  Domestic 
Product  in  the  region.  Thousands  of  citizens  are  at  risk  of  losing  their  jobs,  and  temporary 
government  support  measures  (unemployment  benefits,  deferrals/waivers  to  tax  and  social 
security contributions, etc.) have an important fiscal impact.  

While  the  EU  is  itself  heavily  affected  by  the  pandemic,  it  has  spared  no  time  and  effort  to 
provide  essential  and  unparalleled  support  to  the  Western  Balkans.  This  includes  financial 
support of more than EUR 3.3 billion for countries in the region to address the immediate health 
crisis  and  resulting  humanitarian  needs,  as  well  as  longer  term  and  structural  impact  on  their 
societies and economies. Given the European perspective of the Western Balkans, the EU is also 
treating the region as privileged partners by associating them with the Union’s mechanisms and 
instruments.  These  include  the  Health  Security  Committee,  Joint  Procurement  Agreements, 
Union  Civil  Protection  Mechanism,  Solidarity  Fund,  consular  assistance  in  repatriation  or 
exemption  from  temporary  EU  export  restrictions  of  medical  equipment.  These  and  other 
measures  have  provided  immediate  relief  and  are  a  clear  message  of  the  EU’s  political 
commitment  towards  the  region.  The  European  Commission  recommended  that  emergency 
measures taken in the context of the COVID-19 pandemic are proportionate, restricted to what is 
necessary and limited in time so that rule of law and democratic and human rights standards are 
respected. 

1.2.   Summary of the Report 

Concerning  the  political  criteria  the  reporting  period  was  marked  by  tensions  and  mistrust 
between political actors and low level of trust in the electoral framework. Due to the COVID-19 
pandemic parliament was inactive in the early months of 2020 and was subsequently dissolved, 
due to the August 30 parliamentary elections.  

No political party boycotted the elections, which were contested by 11 candidate lists. 

According  to  the  preliminary  findings  from  the  Office  for  Democratic  Institutions  and  Human 
Rights of the Organisation for Security and Cooperation in Europe (OSCE/ODIHR) the elections 

3 

 
were  competitive  and  were  managed  transparently  and  efficiently,  but  took  place  in  an 
environment  highly  polarized  over  issues  of  church,  and  national  identity.  The  campaign  was 
peaceful  despite  the  frequent  confrontational  tone.  Contestants  were  able  to  convey  their 
messages, but OSCE/ODIHR expressed a number of concerns in relation to an undue advantage 
for the ruling party and unbalanced media coverage. 

The elections resulted in an unprecedented change of the ruling majority composition. The new 
parliament should endeavour to find a broad cross-party and societal consensus and demonstrate 
in practice its commitment to Montenegro's EU reform agenda, which is vital for the country’s 
progress on its EU path; as well as engage in a transparent, decisive and inclusive dialogue on 
the implementation of OSCE/ODIHR outstanding recommendations. 

In  December 2019, due  to  lack of quorum,  the parliament  enacted solely with  the votes of the 
hitherto ruling majority some legal solutions aimed at partially addressing the recommendations 
of  OSCE/ODIHR.  The  adopted  changes  did  not  significantly  affect  the  existing  electoral 
framework,  with  the  exception  of  campaign  finance.  Outstanding  priority  OSCE/ODIHR 
recommendations,  such  as  professionalism,  impartiality  and  transparency  of  the  election 
administration;  candidate registration and mechanisms for authentication  of credibility of voter 
signatures; media supervision during electoral campaign, an audit of the voter register; measures 
against the misuse of state resources and gender balanced political representation in the elections, 
remain unaddressed. Thus, review of the electoral framework in a comprehensive and inclusive 
manner remains pending. 

The new chair of the State Electoral Commission (SEC) was appointed in March 2020. Efforts to 
enhance the transparency and accountability of the SEC's work need to continue. Despite cross-
party agreement to hold local elections on the same day, the legal framework still provides for 
their  conduct  on  a  rolling  basis.  It  remains  to  be  decided  when  a  new  system  will  be 
implemented.  

The political scene prior to the August 2020 elections was fragmented, polarised and marked by 
lack of genuine political dialogue. Some initial steps were taken in the course of 2019 towards 
re-establishing the political dialogue in Parliament with the partial participation of the opposition 
parties  in  work  in  the  temporary  parliamentary  committee.  However  opposition  members 
suspended their participation after the government tabled the draft Law on religious freedoms or 
belief for plenary adoption. The latter resulted in large-scale religious  protests  as of December 
2019, which were temporarily put on hold in spring 2020, due to COVID-19 crisis. 

The outcome of the Parliamentary elections paves  the way for  returning the political  debate to 
the  Parliament.  Active  and  constructive  participation  by  all  parties  is  required  to  enhance 
parliamentary  accountability,  oversight  of  the  executive,  democratic  scrutiny,  better  quality  of 
legislation  and  to  enable  key  appointments.  In  2019  and  the  first  half  of  2020  the  parliament 
could not secure the required 2/3 majority for important judicial appointments and therefore key 
functions of the judical system are filled on an acting basis. The mandate of the Supreme State 
Prosecutor expired in October 2019 and his successor remains to be appointed.  

There were no new developments in the political and judicial follow-up of the alleged misuse of 
public funds for party political purposes that took place in 2012 (the ‘audio recordings affair’). 
With  regard  to  the  January  2019  ‘envelope  affair’,  indictments  were  lodged  for  money 
laundering  against  two  defendants.  These  cases  require  a  credible,  independent  and  effective 
institutional response.  

4 

 
As  regards  governance,  there  is  a  need  to  strengthen  transparency,  stakeholders'  participation, 
and  the  government's  capacity  to  implement  reforms.  Monitoring  of  the  quality  of  strategic 
policy documents by the Government's General Secretariat has become structured and systemic. 
The  government's  policy  on  state-sponsored  apartments  or  loans  under  favourable  conditions 
raised  concerns  about  the  effectiveness  of  the  national  checks  and  balances  system. 
Stakeholders’  participation  in  both  the  accession  and  legislative  processes  remains  to  be 
improved. 

Montenegro is moderately prepared on the reform of its  public administration. Overall, some 
progress  was  made  during  the  reporting  period.  Montenegro  started  the  implementation  of  the 
law  on  civil  servants.  The  medium-term  policy-planning  framework,  merit-based  recruitment, 
human  resource  management  and  rationalising  of  the  organisation  of  the  state  administration 
continued  to  advance  well.  Strong  political  will  is  still  needed  to  effectively  ensure  the  de-
politicisation  of  the  public  service,  the  optimisation  of  the  state  administration,  and  the 
implementation of managerial accountability. 

Montenegro remains moderately prepared to apply the EU acquis and the European standards in 
the area of the judiciary and has made limited progress overall, namely through the continuous 
implementation of the ICT strategy for the judiciary. Last year’s recommendations regarding the 
judiciary  were  only  partially  addressed.  Challenges  remain,  in  particular  with  regard  to  the 
independence, professionalism, efficiency and accountability of the judiciary. The decision of the 
Judicial  Council  to  re-appoint  seven  court  presidents,  including  the  President  of  the  Supreme 
Court, for at least a third term raises serious concerns over the Judicial Council’s interpretation 
of  the  letter  and  the  spirit  of  the  Constitutional  and  legal  framework,  which  limits  those 
appointments to maximum two terms in order to prevent over-concentration of power within the 
judiciary. It is not in line with GRECO recommendations on the independence of the judiciary, 
which Montenegro is expected to comply with, in order not to reverse earlier achievements in the 
judicial reform.  

Montenegro  has  achieved  some  level  of  preparation  in  the  fight  against  corruption.  It  made 
limited progress on last year’s recommendations which were only partially addressed regarding 
the track record on repression and prevention of corruption and a new institutional framework for 
the  Asset  Recovery  Office.  The  Anti-Corruption  Agency,  operating  under  newly  appointmed 
leadership,  continued  to  be  strengthened  through  capacity  building  activities  and  technical 
assistance. However, challenges related to its independence, priority-setting, selective approach 
and quality of its decisions remained. The Agency is yet to demonstrate a proactive approach in 
all areas falling under its mandate, including on the protection of whistle blowers, the control of 
financing of political parties and electoral campaign, and oversight of lobbying. The track record 
on seizure and confiscation of criminal assets needs to be further improved. Corruption remains 
prevalent  in  many  areas  and  a  serious  concern.  There  is  a  need  for  strong  political  will  to 
effectively  address  this  issue  of  concern,  as  well  as  a  robust  criminal  justice  response  to  high-
level corruption. 

Montenegro  has  some  level  of  preparedness/is  moderately  prepared  in  the  fight  against 
organised  crime.  Some  progress  was  made, 
last  year’s 
recommendations, in particular as regards the creation of a centralised bank account register, a 
stronger  capacity  and  professionalism  of  the  police  and  an  increased  number  of  on-going 
proceedings  on  asset  confiscation.  An  initial  track  record  of  investigations  into  trafficking  in 
human beings and money laundering  was established. Internal organisation and coordination of 

in  addressing 

including 

5 

 
law-enforcement  agencies  was  further  improved,  as  reflected  in  the  increasing  number  of 
investigations,  arrests  and  seizures.  However,  Montenegro  still  needs  to  address  some 
fundamental and systemic deficiencies in its criminal justice system, including the way organised 
crime cases are handled in the courts. Some progress was made in the fight against terrorism and 
preventing/countering  violent  extremism  in  line  with  the  objectives  set  out  in  the  Joint  Action 
Plan on counter-terrorism for the Western Balkans and the bilateral implementing arrangement. 

On  fundamental  rights,  Montenegro  made  some  progress.  The  legislative  and  institutional 
framework in the area of fundamental rights is now largely in place. In July 2020, the law on life 
partnership  of  same-sex  couples  was  enacted  by  Parliament,  making  Montenegro  the  first 
country  in  the  region  to  regulate the status  of same-sex couples. The capacity  of human rights 
institutions and of the Ministry of Human and Minority Rights has been reinforced, and trust in 
the Ombudsperson’s office is increasing. However, important challenges remain in ensuring that 
national legislation on human rights is effectively implemented. The reports of excessive use of 
force by the police and allegations of torture call for swift and effective investigations. Ethnically 
and  religiously  motivated  attacks  in  the  context  of  the  August  2020  elections  are  a  matter  of 
serious  concern.  Further  efforts  are  necessary  to  mainstream  human  rights  across  all  areas  of 
work,  public  policies  and  sectors.  Disadvantaged  groups,  including  Roma  and  Egyptians,  and 
persons with disabilities continue to experience multiple types of discrimination and difficulty in 
enforcing  their  rights  in  administrative  and  judicial  proceedings.  Gender-based  violence  and 
violence against children remain issues of serious concern.   

During the reporting period Montenegro made no progress on freedom of expression. Although 
there  has  been  progress  on  the  media  legislation,  this  has  been  overshadowed  by  arrests  and 
proceedings against editors of on-line portals and citizens for content they posted or shared on-
line in the course of 2020. Important old cases of attacks remain unresolved, including the 2004 
murder of the editor-in-chief of daily newspaper, Dan, and the 2018 shooting of an investigative 
journalist.  Concerns  also  remain  about  national  public  broadcaster  RTCG’s  editorial 
independence and professional standards. The media scene continues to be highly polarised and 
self-regulatory  mechanisms  remain  weak.  The  growing  volume  of  region-wide  disinformation 
further polarised the society in the aftermath of the adoption of the Law on freedom of religion 
and during the electoral campaign.  

In  the  area  of  migration  the  2018  upward  trend  in  the  number  of  incoming  irregular  migrants 
was confirmed in 2019. 7,978 irregular migrants were apprehended in 2019, a 60% increase from 
2018.  All  of  the  apprehended  migrants  expressed  their  intention  to  request  asylum,  which 
continued  to  put  the  country’s  reception  facilities  under  pressure.  Montenegrin  authorities 
prevented 516 illegal entries to the country and 1514 illegal exits from the country. The Special 
Prosecutors Office (SPO) conducted three investigations into migrant smuggling, involving more 
than 40 people. The European Border and Coast Guard Status Agreement with the EU, signed in 
October 2019, entered into force on 1 July 2020. The implementation of the first Joint Operation 
under  the  Agreement  was  launched  on  15  July.  Montenegro  must  continue  its  efforts  to  cope 
with the migratory pressure, by further developing its international cooperation on readmission, 
raising  its  capacity  to  prosecute  migrant  smuggling  networks,  increasing  its  reception  capacity 
and enhancing its migrants’ data collection system. 

As  regards  the  economic  criteria,  Montenegro  has  made  some  progress  and  is  moderately 
prepared  in  developing  a  functioning  market  economy.  Due  to  lower  investment  growth,  the 
economy  slowed  down  to  a  more  sustainable  pace  in  2019.  Exports,  in  particular  of  services, 

6 

 
were growing but not enough to curb the large current account deficit. Financial sector stability 
has  been  reinforced  following  the  bankruptcy  and  resolution  of  two  local  banks  and  the 
strengthening  of  the  banking  supervision  framework.  Labour  market  conditions  improved,  but 
the unemployment rate remains high, particularly among women,  youth, Roma and low-skilled 
people.  Labour  activation  measures  and  coordination  between  employment  and  social  services 
recorded  limited  progress.  Montenegro’s  economic  outlook  deteriorated  substantially  since  the 
second quarter of 2020, as the COVID-19 quarantine measures introduced in April brought large 
pans of the  economy to  a halt. Public  finances,  which improved in  2019, are under significant 
pressure  in  2020  due  to  fast  growing  costs  to  finance  the  authorities’  policy  response  to  the 
pandemic  combined  with  a  sharp  decline  in  budget  revenue  due  to  lower  economic  activity. 
Meanwhile,  in  spite  of  some  signs  of  improvement  of  the  business  environment,  measures  to 
fight  against  informality  were  delayed  and  there  is  a  persistent  and  very  large  number  of 
companies with frozen bank accounts. State-owned transport companies are not competitive and 
their losses are being transferred to the state. The institutional capacities of the competition and 
anticorruption agencies remain weak. 

Montenegro has made some progress and remains moderately prepared in terms of its capacity to 
cope with competitive pressure and market forces within the EU. Investment in knowledge and 
human  capital  is  very  modest,  resulting  in  low  innovation  and  productivity  levels  of  local 
companies. Educational outcomes need to improve across the board, as well as the provision of 
upskilling  and  reskilling  measures.  Several  important  infrastructure  projects  are  being 
implemented,  gradually  transforming  Montenegro  into  a  net  exporter  of  electricity  and 
developing transport networks. Physical broadband networks are being developed by the private 
sector  while  the  authorities  strengthened  the  legislative  framework.  However,  the  economy 
presents  a  weak  industrial  base  characterised  by  low  value-added  activities,  constrained  by  the 
small size of the market and the low technological know-how of most local companies. 

With  regard  to  good  neighbourly  relations  and  regional  cooperation,  Montenegro  remained 
constructively  committed 
to  bilateral  relations  with  other  enlargement  countries  and 
neighbouring EU Member States, albeit bilateral relations with Serbia were marked by tensions. 
Montenegro is generally an active participant in regional cooperation.  

Concerning Montenegro's ability to assume the obligations of membership, important work on 
alignment  and  preparation  for  the  implementation  of  the  EU  acquis  has  taken  place  in  most 
areas.  The  country  has  reached  a  good  level  of  preparation  in  areas  such  as  company  law, 
intellectual  property  law,  energy,  and  foreign,  security  and  defence  policy.  It  is  moderately 
prepared in many chapters, such as free movement of goods, agriculture and rural development 
as  well  as  food  safety,  veterinary  and  phytosanitary  policy.  Montenegro  is  at  some  level  of 
preparation  in  the  areas  such  as  environment  and  climate  change,  and  social  policy  and 
employment.  Good  progress  has  been  made  in  the  areas  of  Social  policy  and  employment, 
Financial  services,  Agriculture  and  rural  development,  and  food  safety,  veterinary  and 
phytosanitary policy and Science and research.  

Looking  ahead,  Montenegro  should  focus  in  particular  on  competition  policy,  economic  and 
monetary  policy,  statistics  and  financial  control,  and  specifically  on  the  functioning  of  the 
judiciary and freedom of expression. Strengthening the administrative capacity for ensuring the 
application of the EU  acquis  remains an important  challenge for Montenegro. Montenegro has 
continued  to  fully  align  with  all  EU  common  foreign  and  security  policy  positions  and 
declarations.  

7 

 
1.3 

State of play of the accession negotiations  

30 Chapters opened (with interim or closing benchmarks; date) 

Montenegro 
working on 
fulfilment of 
interim or closing 
benchmarks 

1 – Free movement of goods - 20/06/17 

2 – Freedom of movement for workers - 11/12/17 

3 – Right of establishment and freedom to provide services -   

11/12/17   

4 – Free movement of capital - 24/06/14  

5 – Public procurement - 18/12/13 

  6 – Company law - 18/12/13 

7 – Intellectual property rights - 31/03/14    

8 – Competition policy – 30/06/20 

9 – Financial services - 22/06/15  

10 – Information society and media - 31/03/14   

11 – Agriculture and rural development - 13/12/16   

12 – Food safety, veterinary, phytosanitary services - 30/06/16            

13 – Fisheries - 30/06/16 

14 – Transport policy - 21/12/15  

15 – Energy - 21/12/15 

16 – Taxation - 30/03/15 

17 – Economic and monetary policy - 25/06/18 

18 – Statistics - 16/12/14 

19 – Social policy and employment - 13/12/16   

20 – Enterprise and industrial policy -  18/12/13 

21 – Trans European Networks - 22/06/15  

22 – Regional policy, coordination of structural instruments - 20/06/17 

23 – Judiciary and fundamental rights - 18/12/13 

24 – Justice, freedom, security - 18/12/13 

27 – Environment - 10/12/18 

28 – Consumer and health protection - 16/12/14 

29 – Customs Union - 16/12/14 

31 – Foreign, Security & Defence policy - 24/06/14 

8 

 
 
32 – Financial Control - 24/06/14 

33 – Financial and budgetary provisions  - 16/12/14 

3 Chapters provisionally closed 

25 – Science and research (opened and closed 18/12/12)  

26 – Education and culture (opened and closed 15/04/13)  

30 – External relations: (opened 30/03/15; provisionally closed 20/06/17) 

2 Chapters currently not applicable for Montenegro 

34 – Institutions 

35 – Other issues 

2. 

2.1 

FUNDAMENTALS FIRST: POLITICAL CRITERIA AND RULE OF LAW CHAPTERS  

Functioning of democratic institutions and public administration reform 

2.1.1  Democracy 

Elections  

Montenegro held  Parliamentary and local  elections  in  five municipalities  on 30 August  2020, 
under an electoral legal framework assessed to be largely unchanged since the last elections, in 
the challenging context of the COVID-19 pandemic. According to international observers from 
the  OSCE  Office  for  Democratic  Institutions  and  Human  Rights  (ODIHR)  and  OSCE 
Parliamentary  Assembly,  the  elections  were  peaceful  and  competitive;  they  were  mostly  run 
transparently  and  efficiently.  The  campaign  environment  was  highly  polarized  over  issues  of 
church  and  national  identity  as  well  as  marked  by  undue  advantage  for  the  ruling  party  and 
unbalanced  media  coverage.  Numerous  recommendations  previously  made  by  OSCE/ODIHR 
remain unaddressed, therefore political actors and relevant institutions now need to engage in a 
transparent, decisive and inclusive dialogue on the implementation of these recommendations to 
address long-standing electoral shortcomings well ahead of the next elections. 

Upon the invitation of the Montenegrin authorities, ODIHR and OSCE Parliamentary Assembly 
deployed a limited election observation mission, due the COVID-19 pandemic context. 

According to their preliminary conclusions, the elections were competitive and took place in an 
environment  highly  polarized  over  issues  of  national  identity  and  church,  with  the  Serbian 
Orthodox Church (SOC) taking an active stance during the campaign period. The campaign was 
peaceful despite the frequent confrontational tone.  

OSCE/ODIHR  and  OSCE  Parliamentary  Assembly  further  noted  that  contestants  were  able  to 
convey their messages,  during the election campaign but  that the ruling  party  gained an undue 
advantage  through  misuse  of  office  and  state  resources  and  dominant  media  coverage,  which 
further undermined the quality of information available to voters. The elections were run overall 
transparently  and  efficiently,  and  although  COVID-19  related  restrictions  limited  physical 
campaign opportunities and increased online outreach, they did not prevent voters from turning 
out in high numbers. The voter turnout was at record high level of 76, 6% of the electorate, only 
surpassed by the 2006 independence referendum. The Election Day was orderly and the process 
was  generally transparent  and well administered, while health protocols  were not  implemented 

9 

 
consistently. The election administration met legal deadlines and generally worked transparently 
and managed the technical aspects of the electoral preparations efficiently. The SEC held regular 
sessions open for observers but not to the media.  

Based on the State Election Commission’s (SEC) final results the three opposition-led coalitions 
won together 41 mandates, which, in a parliament of 81 members, constitutes the basis to form a 
new  majority.  Hitherto  ruling  party  Democratic  Party  of  Socialists  and  its  junior  coalition 
partners  from  the  previous  legislature  (SD,  Bosniak  party  and  Albanian  lists)  got  38  seats 
together, except for the Croatian minority party, which for the first time will not be represented 
in the parliament. SDP passed the threshold, winning two mandates. 

In  line  with  the  legal  framework,  voters  and  contestants  can  file  complaints  to  election 
commissions  and  the  courts,  including  appeals  of  SEC  decisions  to  the  Constitutional  Court. 
According  to  OSCE/ODIHR  the  election  dispute  resolution  system  does  not  ensure  effective 
remedy, due to the lack of transparency and short deadlines.  

Prior to the election day, six appeals were filed to the SEC and five to the Constitutional Court 
which  discussed  four  of  them  in  closed  sessions  and  did  not  publish  its  decisions,  thus 
undermining  transparency  of  the  election  dispute  resolution  process.  The  State  Prosecutor 
initiated  ex  officio  two  cases  related  to  pressure  on  voters  in  the  run-up  to  the  August  2020 
parliamentary  elections.  Following  Election  Day,  prosecution  offices  initiated  investigations  in 
nine alleged Election Day  violations,  including buying of voters  IDs, vote buying, pressure on 
voters  and  breach  of  the  secrecy  of  vote.  Following  the  Election  Day,  the  Basic  Prosecution 
Office in Podgorica has indicted two persons upon suspicion of having violated free voter's will 
at  voting  and  destroying  voting  documentation.  Parliamentary  elections  were  repeated  at  one 
polling station 

The legal framework remained largely unchanged since the last parliamentary elections, with the 
exception of campaign finance. While it provides basic regulations for the conduct of democratic 
elections,  gaps  and  ambiguities  allow  for  circumvention,  particularly  in  campaign  finance.  A 
number  of  ODIHR  recommendations  remain  unaddressed.  These  include  professionalism, 
impartiality  and  transparency  of  the  election  administration;  an  audit  of  the  voter  register  and 
measures  against the misuse of state resources;  certain  limitations of suffrage rights;  candidate 
registration  and  mechanisms  for  authenticating  the  credibility  of  voter  signatures;  media 
compliance  during  electoral  campaigns;  and  gender-balanced  political  representation  in 
elections. 

A  temporary  parliamentary  committee  for  comprehensive  reform  of  electoral  and  other 
legislation was set up in autumn 2018 as a special purpose vehicle to enable cross-party political 
dialogue. The committee resumed its work after a 10-month stalemate and in October 2019.  In 
December  2019,  opposition  members  suspended  their  participation  in  the  committee  after  the 
government  tabled  the  draft  law  on  religious  freedoms  or  belief  for  plenary  adoption.  This 
resulted in a lack of quorum and the committee's inability to complete its work.  

In December 2019, the Parliament enacted, solely with the votes of the ruling majority, changes 
to  election-related  provisions  of  four  pieces  of  legislation.  The  adopted  changes  do  not 
significantly affect the existing electoral framework. In May 2020, the ruling majority submitted 
the  draft  Law  on  Election  of  MPs  and  Councillors  for  the  adoption  and  simultaneously  to  the 
Venice Commission and OSCE/ODIHR for their opinion. The draft Law was submitted without 
prior cross-party agreement and a few weeks before calling the parliamentary elections. In their 

10 

 
joint  opinion,  OSCE/ODIHR  and  the  Venice  Commission  assessed  the  draft  as  an  overall 
improvement in the legal framework, underlining however the need for an open and transparent 
process of legislative making and a number of key recommendations. 

Elections in five municipalities (Andrijevica, Budva, Gusinje, Kotor, and Tivat) took place on 30 
August,  along with the parliamentary elections. Despite cross-party agreement to hold all local 
elections on the same day, the legal framework still provides for their conduct on a rolling basis. 
It  is  yet  to  be  decided  when  a  new  system  will  be  implemented.  The  local  elections  in  Tivat, 
initially scheduled for April 2020, were postponed due to the COVID-19 outbreak. This decision 
was  possible  as  April  2020  amendments  to  the  Law  on  local  self-government  introduced  the 
possibility to prolong the mandate of local assemblies for up to 90 days in cases of 'emergency 
situation', in addition to a 'state of emergency'. 

Following a public call, the new chair of the SEC was appointed in March 2020, solely with the 
votes  of  the  hitherto  ruling  majority.  Capacity  building  of  the  SEC  is  ongoing,  but  efforts  to 
enhance the transparency and accountability of SEC's work need to continue. In their preliminary 
findings, OSCE/ODIHR and OSCE Parliamentary Assembly concluded that SEC did not entirely 
fulfill  its  regulatory  role  during  the  parliamentary  elections,  leaving  several  important  aspects, 
such  as  the  verification  of  supporting  signatures  for  candidate  registration,  the  criteria  for 
registration of the lists with national minority status, and the tabulation of results, unaddressed. It 
was  also  assessed  that  in  some  of  its  decisions  the  SEC  used  wide  discretionary  powers  to 
interpret  and  implement  the  law.  The  recommendations  on  the  epidemiological  protection  of 
voters were unclear and difficult to implement.  

The  public  prosecution  service  compiled  1,142  cases  following  the  April  2018  presidential 
elections, mostly related to alleged falsification of identification documents and/or of signatures. 
Of  these,  1,134  are  still  in  the  phase  of  preliminary  investigation.  In  spring  2019,  the 
Constitutional  Court  ruled  that  the  blocking  of  freeware  and  cross-platform  instant  messaging 
services  on  the  October  2016  Election  Day  was  unconstitutional  and  annulled  the  respective 
provision of the law on electronic communication.  

There were no new developments in the political and judicial follow-up of the alleged misuse of 
public funds for party political purposes that took place in 2012 (the ‘audio recordings affair’). In 
December 2019, the Special State Prosecution indicted a high DPS official for money laundering 
in  the  'envelope  affair'.  The  indictment  includes  six  more  individuals,  suspected  of  creating  a 
criminal organisation and money laundering. Political and judicial follow-up is still ongoing. 

Parliament 

In spite of some positive steps towards re-establishing political dialogue in the Parliament, some 
opposition  parties  boycotted  most  of  parliamentary  work  during  2019.  Limited  progress  was 
made in  improving parliamentary  accountability, the oversight  of the executive and democratic 
scrutiny, and the legislative-making process.The parliament's role in overseeing the government 
response  to  the  coronavirus  pandemic  was  marginal.  The  30  August  elections  resulted  in  an 
unprecedented  change  of  the  ruling  majority  composition.  The  new  parliament  should 
demonstrate in practice its commitment to Montenegro's EU reform agenda, step up its legislative 
role  and  oversight  role,  and  engage  in  a  transparent,  decisive  and  inclusive  dialogue  on  the 
implementation of OSCE/ODIHR outstanding recommendations. 

11 

 
Following the  August  2020 parliamentary  elections, the new Parliament  was  constituted on 23 
September.  The  number  of  women  Members  of  Parliament  (MPs)  decreased  to  18,  now 
accounting for 22%. 

The deep political polarisation between the opposition and the ruling parties, as well as among 
opposition  parties  themselves,  continued  in  2019.  Before  the  2020  elections,  there  were  16 
political  parties  represented  in  Parliament.  Out  of  81  MPs,  four  represented  ethnic  minorities, 
while  three  operated  as  independent  MPs.  Five  coalitions  and  four  political  parties  are 
represented in the new parliament's composition. Out of 81 MPs, five represent ethnic minorities 

The  partial  return  of  the  majority  of  opposition  MPs  did  not  yield  the  necessary  qualified 
majority during the previous legislative term for the overdue appointment of Judicial Council lay 
members  and  the  new  Supreme  State  Prosecutor.  In  June  2019,  the  Supreme  Court  adopted  a 
non-binding  legal  opinion  stating  that  Parliament's  decisions  on  the  election,  appointment  or 
dismissal of public officials cannot be challenged through administrative or civil procedures. On 
the  basis  of  this  opinion  and  contrary  to  its  first  judgment  recognising  the  regular  court's 
jurisdiction, a basic court in a civil procedure decided in the retrial that it has no jurisdiction to 
examine  the  legality  of  Parliament’s  decision  in  the  case  of  a  former  Radio  and  Television  of 
Montenegro  (RTCG)  Council  member.  This  raises  concerns  about  the  lack  of  legal  safeguards 
against Parliament's decisions, jeopardising the right to effective legal remedy.  

As regards Parliament’s legislative role, participation of opposition MPs in the plenary sessions 
contributed to improving the quality of debate overall. However, a number of laws were adopted 
without  proper  discussion  and  in  the  absence  of  the  opposition.  Parliament's  capacity  to 
scrutinise  proposed  legislation  for  compliance  with  EU  acquis  is  still limited.  A  parliamentary 
budget office was established in 2019 to provide general expertise to MPs on budgetary issues. 
There  was  a  reduction  in  2019  of  the  number  of  acts  adopted  via  extraordinary  measures,  3 
legislative  acts  out  of  97  (3%  of  the  total),  compared  to  13.6  %  in  2018,  this  reduction  being 
largely the result of the opposition parliamentary boycott.  

Further  efforts  are  needed  to  ensure  effective  control  and  parliamentary  oversight  of  all 
governance  branches,  also  at  the  level  of  the  parliamentary  committees.  In  particular,  the 
parliament's  role  in  overseeing  the  government  response  to  the  coronavirus  pandemic  was 
limited. In 2019, 7 control hearings and 37 consultative hearings were held (compared to 30 in 
2018  and  43  in  2017).  A  uniform  and  effective  system  for  monitoring  the  implementation  of 
conclusions  and  recommendations  adopted  at  oversight  hearings  is  yet  to  be  developed.  The 
SAI’s findings continue to be addressed in a limited manner, and there is still no discussion or 
reporting on the implementation of major policies and legislation. 

Parliament maintained a high level of transparency at administrative level. However, significant 
efforts  are  required  to  improve  its  communication  and  cooperation  with  the  public,  and  in 
particular to establish a procedure for addressing citizen’s complaints and petitions. The practice 
of MPs submitting amendments to the laws circumventing public consultations continued with, 
among  other,  changes  introduced  to  laws  on  local  self-government,  civil  servants  and  state 
employees, and tax administration. No citizen’s petition was submitted to Parliament during the 
reporting period.  

A new code of ethics for MPs was adopted by Parliament in July 2019 with the votes of hitherto 
ruling  majority  MPs.  No  complaints  from  members  of  the  public,  media  or  interested  parties 
alleging breaches of the code of ethics have been submitted to the human rights committee. Also 

12 

 
in  July  2019,  Parliament  amended  its  rules  of  procedure,  introducing  fines  for  MPs  failing  to 
participate and for longer than 30 days in parliamentary activities. The provisions have not been 
implemented  yet.  In  January  2020,  the  parliamentary  administrative  committee  adopted  a 
decision  determining  the  criteria  for  MPs’  justified  absence  from  parliament's  plenary  and 
committee  sittings.  The  lack  of  available  space  in  Parliament  for  both  service  staff  and  MPs 
remains an issue. 

In the reporting period, Parliament did not agree to lift any MPs' immunity; a request to waive 
the  immunity  of  an  MP  from  the  largest  opposition  alliance  was  rejected  by  Parliament  in 
December  2019.  In  the  same  month,  MPs  of  the  same  alliance  were  temporarily  detained  and 
suspended  from  parliamentary  work  for  15  days,  after  causing  an  incident  in  Parliament. 
Preliminary  prosecutorial  investigation  in  this  case  is  ongoing.  In  September  2019,  the 
Constitutional  Court  annulled  the  Criminal  Procedure  Code  provision,  which  was  applied  in 
2018 to issue detention orders against two MPs without their immunity being previously lifted. 
In the first instance proceeding, in May 2019, two of the leaders of the largest opposition alliance 
were sentenced to five years in prison each in the ‘coup d’état’ case following the lifting of their 
immunity. In October 2019, one of the opposition leaders was sentenced to four months of house 
arrest for violent behaviour in Parliament. A criminal case involving an opposition MP from the 
same alliance is currently ongoing in court. 

The  number  of  women  MPs  increased  to  24  (29.63%)  from  19  (23.5%)  in  2018,  but  after  the 
2020  election  declined  to  18  MPs.  Women  continue  to  be  underrepresented  in  high-ranking 
positions in Parliament as well as in party leadership positions.  

The Women’s Political Network, composed of women MPs from 16 political parties, presented 
amendments aimed at strengthening women’s political participation and economic empowerment 
and now in line with their proposal, the new law on financing of political entities and electoral 
campaigns stipulates that 20% of the budgetary funds for the regular operation of parliamentary 
parties should be disbursed proportionately to the elected representatives of the underrepresented 
gender.  

Shortcomings  in  the  legal  framework  regulating  political  parties  and  their  funding,  including 
those  identified  by  OSCE/ODIHR,  persist  even  after  the  adoption  of  the  law  on  financing  of 
political  entities  and election campaigns in  December 2019, and its subsequent  amendments  in 
April 2020. The latter allow for the allocation of social benefits during an election year in cases 
of  war,  state  of  emergency,  epidemic  or  pandemic  of  communicable  diseases.    The  level  of 
budgetary  political  party  financing  is  still  considerably  above  the  European  average.  The 
increase of the limit for private donations of up to EUR 5,000 for individuals and EUR 20,000 
for  legal  entities  requires  a  more  effective  control  of  political  party  financing  from  private 
sources. The Anti-Corruption Agency and the SAI monitor political party financing with limited 
results. Parliamentary oversight in the area was hindered by the prosecution’s refusal to report to 
the  parliamentary  anti-corruption  committee  and  attend  its  special  session  on  the  'envelope 
affair'.  

Governance 

Montenegro  continued  to  implement  its  national  programme  for  EU  accession.  The  number  of 
ministers  was  reduced  by  two  to  seventeen  (including  only  four  women)  in  November  2019 
when the Prime Minister took over the coordination of the Ministry for Sustainable Development 
and Tourism. This followed the minister’s resignation following the dissemination of a video of 

13 

 
construction inspectors taking bribes from an investor. In June 2019, the government adopted a 
decision  on  the  Rule  of  Law  Council,  a  temporary  government  body  chaired  by  the  Prime 
Minister and tasked with monitoring the implementation of commitments under chapters 23 and 
24. The decision refines  the Council’s composition and rules of procedure. The Council held a 
session dedicated to the European Commission's rule of law non-paper in December 2019 and in 
June  2020.  In  October  2019,  the  government  established  the  commission  for  preparing  the 
Montenegrin version of the EU acquis.  

The  government's  decision  to  establish  a  National  Coordination  Body  for  Communicable 
Diseases to coordinate the national response to the coronavirus pandemic was met with criticism 
by civil society organisations, which disputed the constitutionality and legality of its decisions, 
notably the one on publicly disclosing the identity and addresses of persons in self-isolation. 

As  regards  central  government  bodies,  the  government's  Secretariat  General  stepped  up  its 
efforts  to  monitor  the  quality  of  strategic  documents  and  implementation  reports.  It  provided 
opinions for their improvement in line with the 2018 regulation on the manner and procedure for 
implementation  of  strategy  documents  and 
drafting,  harmonising  and  monitoring 
accompanying  methodology  for  policy-making  and  implementation.  Coordination  with  policy 
development stakeholders remains to be strengthened further. 

the 

In August 2019, the government published a list of 96 officials, including heads of judiciary and 
independent  institutions,  who  were  granted  state-sponsored  housing  or  loans  on  favourable 
conditions by the current government, in the absence of clear, transparent and objective criteria 
for their allocation. It also published its justification for such decisions. A second such list was 
published by a NGO containing information on state-sponsored housing and loans granted during 
the previous mandate of the  government.  Following the publication of the information  and the 
recommendation  of  the  Anti-Corruption  Agency  Council,  the  government  formed  a  working 
group to reconsider its housing policy.  

The government has continued to share information on the EU accession process in line with its 
public information strategy, carrying out a range  of activities in several  Montenegrin towns. In 
July,  the  government  established  a  temporary  body  for  the  implementation  of  the  public 
information strategy. Implementation of the 2018-2020 Open Government Partnership Initiative 
action plan is under way.  

In December 2019, Parliament enacted the law on electronic governance as well as amendments 
to  the  law  on  electronic  identification  and  signatures.  The  government  regularly  produces 
analysis of the state of electronic services in Montenegro, proposing concrete measures for their 
improvement.  Through  an  online  e-petition  platform  established  in  April  2018,  five  public 
petitions were submitted, none of which was accepted. Following a series of grassroots protests 
in October against the construction of hydropower plants, the government initiated negotiations 
on the amicable termination of contracts for constructing seven small hydropower plants in four 
northern municipalities. Contrary to the law on state administration, the government continues to 
adopt  a  number  of  laws  affecting  citizens’  rights  without  ensuring  proper  public  inclusiveness 
and participation. Public consultations in the legislative and policymaking process still lack the 
genuine and systematic inclusion of relevant stakeholders.  

On local self-government, in  May 2019, Parliament enacted amendments  to  the laws  on local 
self-government and on municipal police as well as accompanying secondary legislation. These 
provide that recruitment to local self-governments should be conducted in line with the national 

14 

 
system of merit-based recruitment and use the system for electronic testing for the professional 
exam to work in the public administration.  

Implementation of the law on local self-government delivered initial positive effects in the field 
of  local  government's  financing.  This  increased  municipalities'  revenues  from  both  personal 
income tax and from the equalisation fund transfers. The law was challenged by a parliamentary 
opposition party before the Constitutional Court. The Constitutional Court rejected the request. 
The transparency of municipal finances and spending needs to be considerably improved.  

The mayor of Kotor, a member of the opposition, was replaced by a ruling party representative in 
July, following a rift in the local opposition coalition. In June 2019, the Pljevlja local assembly 
elected  a  new  mayor  following  the  resignation  of  the  previous  one.  Women’s  political 
participation  remains  low  also  at  local  level,  with  only  1  out  of  24  municipalities  headed  by  a 
woman mayor. 

Civil society 

The  legal,  institutional  and  financial  environment  under  which  civil  society  organisations 
operate  was  further  improved,  in  particular  the  rules  on  State  funding  of  non-governmental 
organisations (NGOs). The role of civil society in the design, implementation and monitoring of 
public  policies  is  recognised  and  promoted.  However,  the  genuine  inclusion  of  civil  society 
organisations  (CSOs)  in  the  policy-making  process  is  not  sufficiently  ensured  in  practice.  An 
increasingly restrictive approach to public access to information remains a matter of concern.  

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.  The  law  on  Non-Governmental  Organisations,  amended  in  2017,  and  its 
secondary  legislation,  which  defined  standardised  and  more  transparent  state  funding 
mechanisms, have started to be implemented. However, the capacity to launch and handle grant 
schemes  still  needs  to  be  improved  and  capacity  varies  amongst  ministries.  In  April  2020,  the 
Ministry of Public Administration launched public consultations to assess the implementation of 
the law, and set up a working group where one third of the members are NGO representatives. A 
law  on  volunteering  has  yet  to  be  adopted.  Further  steps  were  taken  to  improve  dialogue  on 
cooperation  between  public  institutions  and  civil  society.  The  Council  for  the  Development  of 
NGOs,  a  body  consisting  of  an  equal  number  of  state  officials  and  CSO  representatives, 
intensified its work in 2019. However, it still lacks visibility and outreach to local CSOs in more 
remote areas. The NGO strategy continued to be implemented. A final evaluation of the strategy 
2018-2020 is under preparation. The process of drafting a new NGO Strategy for 2021-2023 was 
launched,  with  the  participation  of  representatives  of  the  civil  society  in  the  relevant  working 
group.   

Civil society continues to be actively involved in the accession process, including in the different 
working  groups on the negotiation chapters. Its  role in the accession process is recognised and 
promoted  at  political  level.  However,  in  many  cases,  NGOs’  participation  in  working  groups 
remains  a  formality;  the  lack  of  timely  information,  inclusion  and  openness  to  their 
recommendations  prevents  them  from  influencing  the  decision-making  process.  In  February 
2020, the Prime Minister launched a series of consultations with civil society, media and political 
stakeholders  on  issues  of  key  importance  for  Montenegro's  accession  process.  The  initiative 

15 

 
resumed in May 2020 after being temporarily put on hold in March 2020 due to the coronavirus 
outbreak.  

The  amount  of  information  classified  by  public  institutions  and  withheld  from  the  public  is 
growing, in practice restricting the access of CSOs and the public to key policy decisions. This 
concern  needs  to  be  addressed  as  a  matter  of  priority,  including  in  reviewing  the  legal 
framework,  to  ensure  civil  society  has  genuine  oversight  in  key  policy  areas.  Consultations  on 
the  draft  law  on  free  access  to  information  were  temporarily  suspended  at  the  request  of  civil 
society during the coronavirus pandemic. 

The 2018 controversial dismissals of prominent NGO representatives from key state institutions 
and  regulatory  bodies  were  deemed  unlawful  by  court  decisions  issued  in  the  course  of  2019. 
Notwithstanding  these  court  decisions,  some  of  which  are  final,  the  NGO  representatives’ 
membership of the concerned bodies has not been restored.  

The  rules  for  public  funding  of  CSOs  secure  a  minimum  of  0.5  %  of  the  state  budget  to  be 
allocated  to  civil  society.  In  2019,  this  budget  amounted  to  EUR  3.7  million  (compared  with 
EUR 4 million in 2020). While the overall process has become more transparent in recent years 
with the recruitment of external assessors, concerns over the evaluation process persist.  

The transparency of state funding has improved with the establishment of an online database of 
CSO projects that have received state funds since 2009. 

CSOs  can  also  access  funds  at  local  level  under  the  law  on  local  self-governments,  but  the 
majority of municipalities lack transparent procedures.  

2.1.2.  Public administration reform  

Montenegro is moderately prepared on the reform of its public administration. Overall,  some 
progress  was  made  as  one  of  last  year’s  recommendations  was  addressed  (the  start  of 
implementation  of  the  law  on  civil  servants.  In  addition,  the  medium-term  policy  planning 
framework,  merit-based  recruitment,  human  resource  management  and  rationalising  the 
organisation of the state administration continued to advance well. While strong political will is 
still needed to effectively address de-politicisation of the public service, ensure the optimisation 
of the state administration, and effective implementation of managerial accountability, including 
the  delegation  of  decision-making.  Two  of  the  Commission’s  recommendations  from  2019 
remain valid.  

In the coming year, Montenegro should in particular: 

  draft and adopt new Public Administrative Reform (PAR) and Public Financial Management 
(PFM)  strategies  with  realistic  objectives,  based  on  the  results  of  the  evaluation  of  the 
previous strategy, and assessment and the 2019 PEFA, respectively; 

  continue with optimisation of the public administration through effective implementation of 

the plan; 

  improve citizens’ access to public information by finalising the Law on access to information 

in line with the SIGMA principles of public administration. 

Public administration reform 

16 

 
The  2018  annual  report  of  the  2016-2020  public  administration  reform  (PAR)  strategy  was 
adopted  in  May  2019  in  line  with  the  standards  set  down  in  the  decree  and  methodology  on 
strategic  planning.  Civil  society  continues  to  actively  participate  in  monitoring  government 
reforms,  and they  and other stakeholders have been invited to  submit initial  proposals  towards 
the  drafting  of  the  planned  2021-2025  Strategy  for  Public  Administration  Reform  by  1  May. 
Political  support for the reforms  is  ensured by  the work of the PAR Council, which held  two 
sessions  during  the  reporting  period.  As  regards  their  financial  sustainability,  the  reforms 
remain dependent on donor funding.  

Medium-term policy planning and reporting system 

Montenegro’s  medium-term  policy  planning  and  reporting  system  was  further  strengthened 
through the implementation of the decree on the method and procedure for drafting, harmonising 
and  monitoring  the  implementation  of  strategic  documents.  In  particular,  the  network  for 
strategic  planning  and  training  for  relevant  staff  in  ministries  was  expanded.  The  General 
Secretariat of the government has an active role in monitoring implementation of the decree and 
ensuring quality control by issuing opinions on draft strategic documents, which accompany the 
texts  when  they  are  presented  to  the  government  for  adoption.  The  methodology  also  aims  to 
rationalise such documents and has led to a reduction in their number. 

The  medium-term  fiscal  plan  is  yet  to  be  linked  to  policy  planning.  However,  the  General 
Secretariat of the government initiated the introduction of mid-term planning system at the level 
of ministries in line with the new methodology. As a pilot project, the Ministries of Economy, 
Sustainable  Development  and  Tourism,  and  Agriculture  and  Rural  Development  also  adopted 
mid-term  work  programmes,  covering  2019-2021  for  the  first  time.  In  April  2020,  the 
government  adopted  the  first  reports  on  implementation  of  mid-term  work  programme  of 
ministries for 2019. 

Public financial management 

The  ongoing  implementation  of  the  2016-2020  Public  Financial  Management  (PFM)  reform 
programme  addresses  some  key  weaknesses  of  the  PFM  system.  The  programme  includes 
bringing  the  legal  and  regulatory  framework  into  line  with  the  EU  acquis  and  updating  the 
existing IT system for the management of the whole budget cycle. However, several key reforms 
are not included or were removed from the programme since adoption. They include alignment 
with  the  ESA  2010,  accrual  accounting,  improvement  of  reporting  on  budget  execution, 
commitment management, cash flow planning and arrears management. Specific action plans on 
these  are  pending.  The  pace  of  PFM  reform  implementation  increased  in  2019  with  the 
implementation of several important activities, including the preparation of a mid-term budgetary 
framework, programme budgeting and capital budgeting.  

The  Public  Expenditure  and  Financial  Accountability  (PEFA)  assessment  was  implemented  in 
2019. It was quite positive but also identified several areas that will need to be addressed in the 
next  PFM  strategy.  The  public  sector  accounting  law  was  adopted  in  November  2019; 
implementation  of  which  is  planned  to  start  in  2022,  after  the  adoption  of  the  necessary 
secondary legislation.  

On  budget  transparency,  the  government  continues  to  systematically  publish  the  budget 
proposal  and  the  adopted  budget,  as  well  as  budget  execution  reports.  However,  there  is  no 
mechanism  to  ensure  the  quality,  comprehensiveness  and  readability  of  published  data.  Civil 

17 

 
society  should  be  more  systematically  involved  in  monitoring  the  implementation  of  the  PFM 
reform programme.  

Public service and human resources management 

Women are well represented at the higher levels of the Montenegrin civil service, in the areas of 
PAR and to some extent PFM. The Minister of Public Administration is a woman. Many of the 
directors-general  and  directors  in  the  ministry,  the  head  of  the  Human  Resource  Management 
Authority  (HRMA),  the  General  Secretary  and  both    deputies,  and  the  head  of  the  CFCU  are 
women.  

The adoption of several implementing legislative acts over the reporting period enabled the full 
implementation of the law on civil servants and state employees. The 2020 human resource plan 
for  the  national  public  administration  bodies  and  the  Prime  Minister’s  office  was  adopted  in 
February  2020.  A  competency  framework  was  established  to  ensure  adequate  recruitment 
procedures for senior civil service positions. An electronic testing system was introduced for the 
professional entry exam for working in the public administration, including at local level. 

Regarding  implementation  of  the  2018-2020  Public  Administration  Optimisation  Plan,  the 
national authorities reported that the number of employees in public administration declined by 
105 at local level and increased by 49 at central level during the reporting period. In May 2019, 
the law on salaries of public sector employees was amended, giving a legal basis for consensual 
termination  of  employment  in  the  public  administration.  In  October,  the  government  modified 
the decision on severance pay in  the event  of consensual  termination of  employment of public 
sector  employees,  offering  attractive  terms  for  those  that  sought  it,  as  a  means  to  encourage 
people  to  leave  the  administration.  So  far,  1,579  public  employees  have  applied  for  severance 
payment  at  central  level  and  322  at  local  level.  To  date  282  severance  payments  have  been 
approved at central level and 128 at local level.  

Salary scales are publicly available, while public sector salaries remain modest. Montenegro still 
needs to introduce an adequate and attractive remuneration system for civil servants and state 
employees,  based  on  clear,  fair  and  transparent  criteria.  The  HRMA  continues  to  have 
responsibility  for  the  professional  development  of  civil  servants  and  state  employees  by 
providing  necessary  training.  It  is  also  responsible  for  nationally  accredited  training  in  human 
resources, strategic planning, ethics and integrity.  

Accountability of the administration 

The report on administrative proceedings for July 2017-December 2018 was drafted using the 
new national methodology. It covers administrative proceedings at local level for the first time. It 
shows  that  98%  of  disputes  at  central  level  and  91%  at  local  level  were  settled  within  the 
deadline.  The  implementing  legislation  necessary  to  implement  of  the  law  on  general 
administrative  procedure  was  adopted.  Following  an  analysis  of  the  legislative  framework  on 
free access  to information, work on a new law  was started, for  which the public consultation 
was put on hold during the COVID-19 pandemic period. 

Service delivery to citizens and businesses 

Montenegro  adopted  a  national  interoperability  framework  in  line  with  the  European 
interoperability  framework.  Eleven  institutions  have  already  been  connected  to  the  single 
information  system  for  electronic  data  interchange.  A  law  on  electronic  government  and 

18 

 
amendments  to  the  law  on  electronic  identification  and  electronic  signature  were  also  adopted 
during the reporting period. 

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, quality and efficient) judicial system and an effective fight against corruption are 
of paramount importance, as is respect of 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. Last  year’s recommendations 
regarding  the  judiciary  have  only  been  partially  met.  Challenges  remain,  in  particular  with 
regard to the independence, professionalism, efficiency and accountability of the judiciary. It 
is  essential  that  Montenegro  does  not  reverse  earlier  achievements  in  the  judicial  reform. 
Corruption remains an issue of concern and Montenegro needs to take more proactive steps to 
ensure  maximum  integrity,  impartiality  and  accountability  of  the  Anti-Corruption  Agency. 
On fundamental rights, Montenegro has achieved some progress. While most legislative and 
institutional  frameworks  are  now  in  place,  further  efforts  are  still  needed  to  ensure  the 
effective application and protection of human rights and alignment with EU acquis. Freedom 
of  expression  remains  a matter  of  serious  concern.  No  progress  was  made  in  implementing 
last year's recommendations.  

Montenegro continues to implement a detailed action plan, which was adopted in 2013 prior to 
the opening of the accession negotiations on the chapter and subsequently  updated in  February 
2015. 

19 

 
 
Functioning of the judiciary 

Montenegro’s judicial system is moderately prepared, with limited progress overall in this 
area.  Last  year’s  recommendations  have  been  met  only  partially  through  the  continuous 
implementation  of  the  ICT  strategy  for  the  judiciary.  In  addition,  Montenegro  continues  to 
make  efforts  towards  the  development  and  promotion  of  alternative  dispute  settlement. 
However, the results of the reforms, in particular the track record on judicial accountability 
remain limited. The results achieved regarding the independence and professionalism of the 
judiciary  need  to  be  further  consolidated.  Human,  financial  and  infrastructure  management 
has not improved.  

In the coming year, Montenegro should in particular:   

→  ensure  the  effective  independence  and  professionalism  of  judiciary  by  full  and 
unambiguous implementation of relevant constitutional and legal provisions, in line with 
GRECO  recommendations,  in  particular  to  effectively  limit  the  appointment  of  courts’ 
presidents to  maximum  two terms  and take measures to  strengthen the independence of 
the  judiciary,  including  by  abolishing  the  ex  officio  participation  of  the  Minister  of 
Justice; in the Judicial Council; 

→  review the disciplinary and ethical framework for judges and prosecutors to strengthen its 
objectivity, proportionality and effectiveness, and ensure it effective implementation;  

→  prepare and adopt a new strategy for rationalisation of the judicial network, which would 

lay down the next concrete steps leading to closure of unviable small courts. 

Strategic documents 

In  September  2019,  the  government  adopted  the  2019-2022  judicial  reform  strategy  and  the 
accompanying  2019-2020  action  plan,  including  an  analysis  of  the  effects  of  the  preceding 
strategy, which however remained a factual analysis of activities without any impact assessment. 
In  October  2019,  a  Council  for  monitoring  the  strategy  implementation  was  established, 
composed  of  the  main  judicial  institutions  and  of  the  professional  associations  of  judges  and 
prosecutors.  CSOs  have  not  been  invited  to  participate  in  the  Council’s  work.  There  are  no 
notable delays in the implementation.  

Management bodies 

The  Judicial  and  Prosecutorial  Councils  remain  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, according to the Council of Europe Group 
of States against Corruption  (GRECO), outstanding issues  remain with  regard to  strengthening 
the Judicial Council’s independence against undue political influence, for instance the ex-officio 
participation  of  minister  of  justice.  The  anti-deadlock  mechanism  introduced  by  the  2018 
amendments to the law on the Judicial Council continues to apply, allowing for extension of the 
non-judicial  members’  mandate  until  new  ones  are  elected.  Following  the  resignation  of  the 
President  of  the  Judicial  Council  in  December  2019,  the  Council  continued  to  operate  in 
incomplete composition. In July 2020, after publication of a new call for candidates in January 
2020, Parliament again failed to secure sufficient majority for any of the candidates for the four 
non-judicial members of the Judicial Council.  

20 

 
The mandate of the Supreme State Prosecutor expired in October 2019 and his successor has yet 
to  be  appointed.  After  the  first  unsuccessful  call  for  candidates,  the  Prosecutorial  Council 
appointed  the  outgoing  Supreme  State  Prosecutor  in  an  acting  capacity.  In  the  second  call 
proceedings, Parliament did not secure the qualified majority to elect the candidate proposed by 
the  Prosecutorial  Council.  The  Prosecutorial  Council  has  not  yet  completed  the  appointment 
procedure  for  11  heads  of  state  prosecution  offices,  initiated  in  2019.  In  June  2020,  the 
Prosecutorial  Council  confirmed  the  Chief  Special  Prosecutor  unanimously  for  a  second 
mandate. 

The 2020 budget of the Judicial Council increased by 20% to EUR 1.65 million from the EUR 
1.37  million  allocated  in  2019.  The  2020  budget  of  the  Prosecutorial  Council  rose  by  16%  to 
EUR 670,000  (2019:  EUR  561,000).  The  operational  capacity  of  both  Councils  secretariats 
continues  to  improve,  but  need  further  strengthening.  Also,  both  Councils  still  need  to  assume 
budgetary and financial management functions at central level as well as at court and prosecution 
office level. Technical preparations are to be finalised to gradually transfer budgetary planning 
and  execution  to  courts  and  prosecution  offices  in  the  course  of  2020,  while  the  Ministry  of 
Finance is yet to recognise them as budgetary units. The two Councils need to step up efforts to 
improve  the  transparency  of  their  work,  particularly  by  publishing  fully  reasoned  decisions  on 
promotions,  appointments,  and  disciplinary  cases.  Concerns  also  remain  over  the  professional 
capacity of members of both Councils, in particular those of the Judicial Council, as well as their 
commitment and the time devoted to the performance of their functions. 

Independence and impartiality 

limits 

those  appointments 

The  legal  framework  guaranteeing  judicial  independence  is  in  place  but  the  judiciary  and  the 
prosecution  continue  to  be  perceived  as  vulnerable  to  political  interference.  Reports  that  the 
government granted some members of the judiciary and prosecution, including senior members, 
state-sponsored apartments or loans on favourable conditions raises additional questions in this 
respect. The decision of the Judicial Council to re-appoint seven court presidents, including the 
President of the Supreme Court, for at least a third term raises serious concerns over the Judicial 
Council’s  interpretation  of  the  letter  and  the  spirit  of  the   Constitutional  and  legal  framework, 
to  prevent  an 
which 
over-concentration of powers within the judiciary. It is also not in line with the recommendations 
of the GRECO on the independence of the judiciary, which Montenegro is expected to comply 
with.  In June 2020, Deputy Prime Minister and Minister of Justice, following a meeting of the 
Rule  of  Law  Council,  issued  a  public  statement  suggesting  to  courts’  presidents  appointed 
beyond  a  second  term  to  resign.  Allegations  of  corruption  in  the  Supreme  State  Prosecutor’s 
office and reported unauthorised interference in the work of the Special State Prosecution require 
an independent and effective institutional response. In April 2020, as part of the saving measures 
introduced  due  to  COVID-19  pandemic,  the  Government  decided  to  reduce  for  the  months  of 
May and June by 50% the salaries of functionaries and civil servants in the highest remuneration 
groups,  among  which  are  over  200  judges  and  prosecutors.  Decisive  political  commitment  is 
needed to guarantee the full independence of the judiciary. 

to  maximum 

in  order 

terms 

two 

In January 2020, the Constitutional Court, after unsuccessful election of a new president, elected 
its  former  President  as  a  ‘presiding  judge’  in  the  interim,  even  though  such  a  category  is  not 
provided for by the legal framework. The procedure for appointing the new Constitutional Court 
president needs to be conducted without further delay. 

21 

 
The random allocation of cases is ensured by the law on courts, and implemented automatically 
through  the  judicial  information  system  PRIS.  There  are  certain  limitations  on  the  random 
allocation of cases in  very small courts, while PRIS has not  been introduced in  misdemeanour 
courts.  In  the  absence  of  clear  criteria,  the  practice  of  reallocating  large  numbers  of  cases 
between courts to reduce backlogs is continued (1451 cases in 2019), putting at risk the right to a 
lawful judge.  

In December 2019, the government adopted amendments to the law on courts and the law on the 
State  Prosecutor’s  Office  in  order  to  harmonise  both  laws  with  the  2018  law  on  judicial 
cooperation in criminal matters; both are pending enactment in Parliament. 

One presidential pardon was granted in 2019 (there was one in 2018 and one in 2017). In June 
2020, the Parliament passed a Law on Amnesty to reduce the prison sentences of some inmates 
by  5-15%,  in  order  to  reduce  the  prison  overcrowding  in  the  context  of  COVID-19  outbreak. 
While  those  serving  sentences  for  some  of  the  most  serious  crimes,  including  war  crimes, 
aggravated  murder,  terrorism  and  trafficking  in  human  beings,  corruption  and  offences  against 
sexual freedom, will not be entitled to amnesty, the latter can apply to organised crime - related 
offences .   

Accountability  

Track  records  on  the  enforcement  of  the  codes  of  ethics  and  disciplinary  accountability  for 
judges  and  prosecutors  remain  poor.  In  2019,  one  disciplinary  proceeding  was  launched  and 
completed before the Judicial Council disciplinary commission (2018: one proceeding initiated). 
This  established  a violation,  which resulted in  a  20% salary for 3 months. There were no new 
disciplinary proceedings against prosecutors (2018: four cases in total). During the same period, 
there were  14 reports of alleged violation of the  code of ethics for judges; 12 were completed 
and in two cases, violations were established by the ethical commission (2018: 15 cases in total, 
violation established in one case). In one of these two cases the Judicial Council overturned the 
decision on violation upon a complaint submitted by the judge. Of 12 cases of alleged violation 
of code of ethics for prosecutors violation was established in 3 cases (2018: 4 cases in total, no 
violation established). In the first half of 2020, there were two reports of alleged violation of the 
code  of  ethics  for  judges  and  two  reports  of  alleged  violation  of  the  code  of  ethics  for 
prosecutors. Disciplinary proceedings were instituted against one judge.   

The system for detecting breaches of integrity rules needs to be made more effective by ensuring 
due  follow-up  of  all  cases  that  give  grounds  for  disciplinary  responsibility.  The  objectivity, 
proportionality  and  effectiveness  of  the  disciplinary  framework  for  judges  have  yet  to  be 
strengthened. The approach to handling cases in both Commissions overseeing the enforcement 
of  the  codes  of  ethics  is  still  inconsistent.  A  legal  remedy  against  decisions  of  the  ethical 
Commissions of both Councils has yet to be introduced by the law. The relevant decisions of the 
Prosecutorial  and  Judicial  Councils  are  insufficiently  motivated  and  case-law  has  yet  to  be 
developed. Although the counselling function of the ethical commissions has been strengthened 
within the judiciary and prosecution service, ethics and professional conduct in the judiciary and 
information on existing complaints mechanisms need to be promoted further.  

In  2019,  the  Ministry  of  Justice's  regular  judicial  inspection  found  irregularities  in  a 
misdemeanour  court’s  register-keeping  and  archiving  system,  while  no  irregularities  were 
established  in  the  prosecutors’  offices.  The  ministry’s  capacity  to  conduct  judicial  inspections 
remains limited, with only two judicial inspectors working on supervision of courts, prosecution 

22 

 
offices,  notaries  and  public  bailiffs.  The  judicial  inspection  system  needs  to  be  enforced 
effectively, including through more thorough and unannounced inspections. 

In  March  2019  amendments  to  the  law  on  public  bailiffs  were  adopted  which  introduced  an 
obligation for bailiffs to submit asset declarations to the Anti-Corruption Agency. In December 
2019,  the  revised  code  of  ethics  for  public  bailiffs  was  adopted  and  the  new  commission  for 
ethical  conduct  of  public  bailiffs  formed.  The  Ministry  of  Justice  and  the  Public  Bailiffs' 
Chamber started joint inspections of 18 bailiffs' offices. In total, six irregularities were found in 
three  offices.  In  2019,  four  disciplinary  proceedings  were  initiated  against  public  bailiffs,  and 
one further so far in 2020 In two cases, disciplinary liability was established and fines imposed 
accordingly. In another case, a public bailiff was temporarily suspended until the end of criminal 
proceedings  against  him.  Additional  steps  are  needed  to  promote  professional  and  ethical 
standards among bailiffs, including appropriate training. 

Professionalism and competence 

Montenegro has continued organising single nationwide competitions for judges and prosecutors. 
In  2019,  9  judges  were  promoted  to  higher-level  judicial  positions  and  2  prosecutors  were 
elected  to  higher-instance  prosecution  offices.  Allegations  of  conflict  of  interest  against  some 
members  of  the  Judicial  Council  regarding  certain  candidates  in  the  2019  competition,  the 
manner  in  which  the  interviews  with  candidates  were  conducted;  and  integrity  violations  by 
candidates during the 2020 competition, point to outstanding challenges in transparent and merit-
based  recruitment  of  judges,  professionalism  of  the  Judicial  Council’s  commission  for  testing; 
and technical preconditions for organisation of testing.  

Both Councils now conduct regular assessment of judges and prosecutors under the new system 
of regular professional assessment. In 2019, 55 judges and 53 prosecutors were evaluated under 
the regular assessment procedure. The fact that all evaluated prosecutors received excellent grade 
raises  questions  over  the  objectivity  and  the  overall  purpose  of  the  evaluation  process. 
Assessment needs to be more thorough, in line with the assessment criteria revised in 2017. 

Quality of justice 

The 2019-2020 action plan accompanying the judicial reform strategy encompasses measures for 
implementing  the  Judicial  Training  Centre  strategy.  In  2020,  the  Judicial  Training  Centre  was 
allocated  a  budget  of  EUR  615,593  (2019:  EUR 619,000)  which  remains  below  the  statutory 
minimum. The autonomous and self-sustainable functioning of the Centre is therefore yet to be 
guaranteed. However, the Centre’s state budget funding is currently sufficient since a large part 
of its activities continue to be financially supported by the EU and other international donors. Its 
secretariat  still  employs  14  of  the  19  planned  posts,  while  the  number  of  its  implemented 
activities is steadily increasing. The training activities of the Centre were interrupted during the 
period of COVID-19 restrictions. The Centre's managerial, strategic planning and administrative 
capacity  needs  to  further  improve,  especially  following  the  changes  in  its  management  in 
December 2019. Its regular cooperation and communication with the Judicial and Prosecutorial 
Councils is yet to be established, especially over the organisation of initial training cycles. The 
role of the Centre’s Programming Council has to  be substantially improved as  regards training 
needs assessment and evaluation. The Centre participates as an observer in the activities offered 
by  the  European  Judicial  Training  Network  (EJTN)  but  is  not  proactively  benefiting  from  the 
expertise within the network.  

23 

 
Activities in the judiciary continued to harmonise jurisprudence, including with the case-law of 
the European Court of Human Rights. However, concerns remain over institutional disputes and 
divergent  understanding  and  interpretation  of  human  rights  standards  between  the  Supreme 
Court and Constitutional Court, putting at risk legal certainty and the right to a final judgement 
and effective legal remedy.  

No progress was made in the full implementation of instructions for collecting statistical data in 
compliance  with  the  guidelines  of  the  European  Commission  for  the  Efficiency  of  Justice 
(CEPEJ). 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, nor used for management and policy-making purposes.  

In  September  2019,  the  government  adopted  an  updated  2016-2020  action  plan  for 
implementation of the ICT strategy for the judiciary, with some adjustments of the target dates 
due to certain delays in the implementation and a detailed budget breakdown. The new ICT sub-
system for courts was procured in June 2019. Until the new system is put in place, the current 
judicial information  system,  PRIS, is  used by  all courts for case monitoring,  certain  aspects  of 
case management and interaction with parties. The system still has security loopholes and does 
not operate consistently outside Podgorica, while the prosecution's information system is not yet 
sufficiently advanced.  

The  2020  budget  for  the  judiciary  is  EUR  39.1  million,  similar  to  2019.  Montenegro  has 
51 judges (58% of whom are women) and 17 prosecutors (over 65% of whom are women) per 
100,000  inhabitants,  far  above  the  European  average  of  21 judges  and  11  prosecutors  (source: 
CEPEJ), as  well as three times as many judicial  staff per inhabitants as the European  average. 
Montenegro stands out in comparison to the region with regard to much lower collection of court 
fees.   

A  positive  trend  continued  in  alternative  dispute  resolution,  with  Montenegro  undertaking  a 
number of measures to strengthen and promote its use. The law on alternative dispute resolution 
was  adopted  by  the  government  in  November  2019;  it  provides,  among  other  things,  for 
compulsory recourse to alternative dispute resolution for certain types of cases. The law is yet to 
be enacted by Parliament. In 2019, 917 cases were referred to the Centre for Mediation (2018: 
629 in total), and 403 cases were settled through mediation (2018: 107). During the same period, 
2,743  cases  (2018:  3,450)  were  submitted  to  the  Agency  for  Peaceful  Settlement  of  Labour 
Disputes, of which 1,258 were resolved (2018: 3,041). However, this method has yet to be used 
systematically in order to maximise its overall impact.   

Efficiency 

In  2019,  131,956  cases  were  pending  before  Montenegrin  courts,  92  of  which  were  new  cases 
(6.9 % less than in 2018). Some 92,305 cases were resolved (5.5 % less than in 2018), while the 
overall case backlog fell by 2 % to 38,190. Montenegro continued to take concrete measures to 
reduce the backlog of old cases, which were given priority status. The number of cases older than 
3 years fell by 5.5 % to 2,912. The disposition time, i.e. the average time from filing to decision, 
was  143  days  in  basis  court  cases  (2018:  142  days)  and  116  for  commercial  cases  (2018:  107 
days). Disposition time before the Administrative Court (534 days) is a cause for concern.    

24 

 
In  April  2019,  amendments  to  the  Law  on  enforcement  and  securing  of  claims  were  adopted, 
aiming to align with the EU acquis and address some challenges in the practice of enforcement 
proceedings. 

As  regards  enforcement,  the  clearance  and  recovery  rates  are  increasing,  and  the  backlog  of 
enforcement cases before the courts has been reduced from 150,000 in 2016 to just around 2,500 
at  the  end  of  2019.  In  2019,  61,127  cases  were  filed  to  bailiffs'  offices,  with  40,019  cases 
pending at the end the year. The centralised case management system for bailiffs continues to be 
used  consistently,  guaranteeing  data  reliability.  The  enforcement  of  court  decisions  remains  a 
challenge.  

In  2019,  the  Constitutional  Court  of  Montenegro  received  2,320  cases  (2018:  2,291),  while  it 
resolved 1,436 cases (2018: 1,203). The trend of backlog increase continues in 2020.  

tangible  and  concrete  rationalisation  measures.  With 

The 2017-2019 mid-term strategy for the rationalisation of the courts network does not envisage 
any 
the  2019-2020  action  plan 
accompanying  the  judicial  reform  strategy,  the  government  committed  itself  to  prepare  an 
underlying analysis for rationalisation of the judicial network which is underway and should be 
finalised  in  autumn.  Reform  in  this  area  should  draw  on  the  available  data,  conclusions  from 
undertaken  studies  and  cost-benefit  analyses,  while  ensuring  better  overall  management  of 
human  resources  and  judicial  infrastructure,  and  should  ultimately  lead  to  optimisation  of  the 
judicial network and closing down of small unviable courts.  

Domestic handling of war crimes cases  

Implementation of the war crimes prosecution strategy is ongoing. In June 2019, a first-instance 
court reached a decision sentencing a defendant to 14 years of imprisonment for crimes against 
the civilian population in Kosovo. The sentence was upheld by a second-instance court decision 
in  November  2019.  While  the  decision  is  final,  proceedings  on  the  defendant’s  motion  for 
protection  of  legality  are  currently  ongoing.  Within  the  jurisdiction  of  the  Special  Prosecutor's 
Office (SPO), four cases remain in the preliminary phase of investigation concerning war crimes 
committed on the territories of Bosnia and Herzegovina, and Croatia. Following the signature of 
a  memorandum  of  understanding  with  the  International  Residual  Mechanism  for  Criminal 
Tribunals  (IRMCT)  in  early  2019,  guidelines  for  cooperation  have  been  prepared  on  the 
exchange  of  information  and  evidence  with  IRMCT.  The  Montenegrin  Supreme  State 
Prosecution  has  signed  regional  cooperation  agreements  on  war  crimes  cases  with  Croatia 
(2006),  Serbia  (2007)  and  Bosnia  and  Herzegovina  (2014).  In  2019  and  first  half  of  2020, 
Montenegro  acted  upon  seven  letters  rogatory  from  Bosnia  and  Herzegovina,  three  letters 
rogatory from Croatia and one from the Kosovo Specialist’s Prosecutor’s Office. Activities are 
also  ongoing  on  re-examination  of  old  cases  with  a  view  to  securing  revision  of  the  final 
judgements. The prosecution regularly participates in regional operational meetings.  

It  is  important  to  ensure  that  victims  of  war  crimes  have  equal  access  to  justice,  in  line  with 
European  and  international  standards,  and  that  compensation  is  in  line  with  the  country's 
commitments. In 2019, there were 19 claims for compensation pending before the basic court of 
Podgorica: 17 for damages incurred due to the reduction of general life activity, fear and mental 
suffering, and 2 for damages incurred due to unlawful deprivation of liberty. All these claims are 

  This  designation  is  without  prejudice  to  positions  on  status,  and  is  in  line  with  UNSCR  1244/1999  and  the  ICJ 
Opinion on the Kosovo declaration of independence. 

25 

 
                                                 
given priority by the court. By June 2020, four claims for compensation were partially upheld, 
awarding non-pecuniary damages in the amounts between EUR 4,500 and EUR 6,000. 

A proactive approach needs to be applied, in order to effectively investigate, prosecute, try and 
punish war crimes in line with international standards. The judicial decisions reached in the past 
contained legal mistakes and shortcomings in the application of international humanitarian law. 
Charges of command responsibility, co-perpetration and aiding and abetting have so far not been 
brought.  

Fight against corruption 

Montenegro  has  achieved  some  level  of  preparation.  It  made  limited  progress  in  the  fight 
against corruption, with  last year’s recommendations partially met with regard to track record 
on  repression  and  prevention  of  corruption  and  a  new  institutional  framework  for  Asset 
Recovery  Office  (ARO).  The  Anti-Corruption  Agency  (ACA)  continued  to  be  strengthened 
through capacity building activities and technical assistance. However, challenges related to its 
independence,  priority-setting,  selective  approach  and  quality  of  its  decisions  remained.  The 
Agency  is  yet  to  demonstrate  a  proactive  approach  in  all  areas  falling  under  its  mandate, 
including on the protection of whistle-blowers, the control of financing of political parties and 
electoral  campaign,  and  oversight  of  lobbying.  Track  record  on  seizure  and  confiscation  of 
criminal  assets  needs  to  be  further  improved.  Corruption  remains  prevalent  in  many  areas. 
There is a need for strong political will to effectively address this issue of concern, as well as a 
robust criminal justice response to high-level corruption. 

In the coming year Montenegro should in particular:  

  ensure the maximum integrity, impartiality and accountability of the ACA and remedy the 

shortcomings in its decision making, which were established by domestic courts;  

  improve  track  records  on  repression  and  prevention  of  corruption,  including  by  imposing 
effective  sanctions  and  take  concrete  measures  to  limit  the  use  of  plea  bargains  to 
exceptional  cases,  in  order  to  improve  the  transparency  and  the  credibility  of  the  judicial 
response to  corruption through a more deterrent and consistent sanctioning policy; 

  review  the  legal  approach  towards  financial  investigations,  and  asset  recovery,  to  align  it 
with international standards and with modern EU practices; establish an integrated approach 
between all the bodies involved and provide them with the necessary legal and operational 
tools to create the conditions for establishing a sustainable track record in this area. 

Track record  

A  track  record  of  investigations,  prosecutions  and  final  convictions  in  cases  of  high-level 
corruption has been established but remains to be further consolidated. 

In 2019 the Special Public Prosecutor's  Office opened investigations into high-level  corruption 
related  criminal  offences  in  6  cases  against  15  individuals,  including  majority  owner  of  a 
commercial bank and the bank’s CEO (the ‘Atlas bank affair’), director of a public company and 
municipality functionaries;  and 1 legal  entity.  Further 4 investigations were opened in  the first 
half  of  2020.  In  2019,  5  indictments  (2018:  12  cases)  were  lodged  for  the  criminal  offence  of 
high-level corruption against 38 individuals and 3 legal entities and the financial investigations 
have  been  launched  in  4  cases  against  29  individuals  in  high-level  corruption  cases.  In  the 
‘envelope  affair’  case  the  prosecution  indicted  the  former  mayor  of  Podgorica  and  current 

26 

 
adviser  of  the  President  of  Montenegro  for  money  laundering.  No  further  indictments  were 
lodged in  the  first  half of 2020.  In July 2020,  Interpol cancelled the  red notice warrant  for the 
fugitive businessperson under investigation in the ‘Atlas bank’ and ‘envelope’ cases. Four final 
and  enforceable  judgements  (2018:  4)  were  issued  for  high-level  corruption  in  2019  and  one 
further against 3 individuals by mid-June 2020. No final judgements were issued against public 
officials.  

Montenegro  sent  an  official  request  to  Serbia  in  April  2019  for  the  extradition  of  the  former 
President  of  the  State  Union  of  Serbia  and  Montenegro,  who  was  convicted  of  high-level 
corruption. The request is still pending with the Serbian authorities. 

The track record on the confiscation of assets still needs to be improved. In 2019 the High Court 
in Podgorica ordered the temporary confiscation of assets with a total value of EUR 3,477,880 in 
three cases. One residential unit of 193m2 was permanently confiscated in February 2020.  

Montenegro  has  made  some  progress  in  establishing  a  track  record  on  the  prevention  of 
corruption.  In  2019,  the  Anti-Corruption  Agency  (ACA)  instituted  387  proceedings  before  the 
misdemeanour courts (380 for alleged violation of the law on prevention of corruption and 7 for 
alleged violation of the law on financing of political entities and electoral campaigns). A total of 
371  proceedings  were  completed,  including  those  from  previous  years,  in  90  %  of  them  fines 
were  imposed.  These  amounted  to  EUR  75,380  for  violation  of  the  law  on  prevention  of 
corruption, and EUR 19,900 for violating provisions of the law on financing of political entities 
and  electoral  campaigns.  The  ACA  further  issued  40  direct  misdemeanour  orders,  35  for 
violation of the law on prevention of corruption and 5 for violation of the law on financing of 
political  entities  and  electoral  campaigns  (2019:  19)  imposing  fines  in  the  amount  of  EUR 
21,997.  In  13  cases  the  ACA  requested  seizure  of  material  gain  before  the  competent  courts, 
resulting in seizures in 7 cases with a total amount of EUR 22,966.  

Based  on  the  158  opinions  (2018:  185)  and  72  decisions  (2018:  60)  issued  by  the  Agency  in 
2019 on  incompatibility of functions  and conflict of interests, 57 public officials (2019:  77) 
resigned  from  their  office  and  from  59  functions  and  4  were  dismissed.  In  August  2020,  the 
Administrative Court annulled the decision of the Agency that found no conflict of interest in the 
former  Prime  Minister,  now  President,  signing  in  October  2016  a  decision  on  awarding 
concession for construction of a small hydropower plant to the company owned by his son.  

In 2019, 8,149 income and asset declarations were submitted to the Agency (2018: 8,004). The 
optional consent for accessing banks accounts for the purpose of verifying the data submitted in 
the declarations decreased in 2019 from 60% to 57% of public officials and from 69% to 65% of 
civil servants. The ACA verified 911 such reports, slightly exceeding its annual plan. It initiated 
119  administrative  proceedings,  and  established  violations  and  irregularities  in  54  decisions. 
Sanctions were imposed in  17 cases, 15 in  the form  of a warning, 1  as  dismissal,  and 1 in  the 
form of a salary deduction.  

The Agency investigated 31 cases of inexplicable wealth in 2019 but found no irregularities. The 
ACA  carried  out  planned  control  and  verification  of  839  public  officials,  20  of  them  high-
ranking officials. In this regard, 7 misdemeanour orders were issued totalling EUR 2,252.  

The ACA continued to monitor the overall compliance of relevant entities in meeting the legal 
obligations  on  the  funding  of  political  parties  and  electoral  campaigns.  In  May  2019  the 
Agency  published  its  report  on  the  March  2019  local  elections  in  Tuzi  municipality.  While  it 

27 

 
initiated one misdemeanour proceeding against one political party for overspending, it found no 
major  irregularities  and  no  abuse  of  public  resources  for  electoral  campaign  purposes.  Forty-
eight political parties (out of 59) submitted annual financial reports, while 44 submitted decisions 
regarding  amounts  of  membership  fees  for  2019.  All  reports  submitted  were  published  on  the 
Agency’s  website.  The  ACA  instituted  5  misdemeanour  proceedings  for  failure  to  submit  the 
annual financial reports. In 2019, the Agency verified 6 reports from the biggest political parties 
and  performed  further  41  verifications  of  compliance  with  the  law.  In  early  2020  the  ACA 
started  with  preparations  of  its  activities  related  to  the  August  2020  Parliamentary  and  local 
elections. In the run-up to the elections, ACA performed its monitoring activities. It initiated i.a. 
verifications of some 700 donors to political campaigns. It further initiated over 400 proceedings 
concerning  abuse  of  public  resources  for  electoral  campaigns  purposes  and  instituted  25 
misdemeanour  proceedings.  The  ACA  did  not  impose  any  direct  sanctions  with  respect  to 
expenditures reports submitted by the contestants or published any conclusions, despite the fact 
that these did not correspond to ACA findings.  

The State Audit Institution published positive audit reports on annual financial statements from 
2018  for  18  political  entities,  6  conditional  reports  and  one  negative  report,  whilst  regularity 
audits resulted in 3 positive, 10 negative and 12 conditional reports. 

In  the  context  of  the  'envelope  affair',  the  ACA  published  the  decision  on  the  misdemeanour 
order of EUR20,000 against the ruling party and a request for payment of EUR47,000 to the state 
budget in December 2019, 10 months after it was issued.  

In 2019, 3 requests for whistle-blower protection were submitted to the ACA (2018: 1). So far, 
ACA issued a negative decision in one of these cases, the other two are still under examination. 
The Agency further received 110 reports on threats to public interest (same number as in 2018). 
In 49 completed examinations of these reports, it identified a threat to public interest in 9 with 
respect  to  9  of  them.  The  Agency  further  initiated  3  ex  officio  proceedings  (still  ongoing)  for 
determining  the  existence  of  a  threat  to  the  public  interest  and  continued  working  on  the  4  it 
initiated in 2018.  

The  ACA  continued  to  provide  support  to  public  bodies  concerning  integrity  plans.  In  2019, 
671 reports on implementation of the integrity plans were submitted to the Agency. The practical 
impact of integrity plans has yet to be assessed.  

No new lobbying certificates were issued in 2019 (since 2014: 14). Six lobbyists and one legal 
entity  remain  registered  with  the  Agency.  Following-up  and  sanctioning  breaches  of  the  law 
remain a challenge. Low numbers continue to suggest that lobbying activities are being carried 
out outside the legal framework. In 2019, the ACA prepared an analysis of the legal framework 
in this area.  

Apart from Police and Customs, there were no cases demonstrating the implementation of codes 
of  ethics  for  members  of  the  legislative  and  executive  authorities.  In  July  2019,  Parliament 
adopted a revised code of ethics for its members, introducing a requirement of ad-hoc disclosure 
when a conflict emerges between the private interest of an MP and a matter under consideration 
in the parliamentary procedure.  

Since its establishment, the ACA submitted to the line ministers 17 non-binding legal opinions 
on draft legislative acts in the area of its competence. Its opinions were taken into account for 4 
legislative  acts,  4  legislative  processes  are  currently  ongoing,  and  in  in  eight  cases,  the  ACA 

28 

 
recommendations  were not  reflected in  the final  version of a legislative act.  In 2019, the ACA 
provided its opinion on the law on financing of political entities and electoral campaigns and the 
law on prevention of corruption. 

Institutional framework  

Prevention of corruption 

In July 2019, Parliament appointed the new Council of the ACA. The Council has five members, 
of which two are from civil society. A number of opposition and NGO representatives contested 
the  legal  interpretation  of  the  law  on  prevention  of  corruption  applied  for  the  call,  notably  the 
requirement to pass the state exam for employment in the national administration, as specified by 
the law on state employees and civil servants. 

Currently,  54  people  are  employed  out  of  the  60  planned  posts.  The  capacity  of  the  ACA 
continued to be strengthened through capacity-building activities and technical assistance. There 
were  further  improvements  to  the  IT  system.  The  ACA  now  has  real-time  access  to  relevant 
databases. All data since the Agency began operating (1 January 2016) have been incorporated 
into  its  information  system.  The  ACA  continued  measures  on  communication  and  awareness-
raising.  

Despite the measures taken and the more proactive work of the new ACA Council, challenges 
remain:  the  Agency  and  its  staff  must  ensure  maximum  transparency,  integrity,  impartiality, 
independence,  an  unselective  approach,  and  uniform  and  full  application  of  relevant  laws.  In 
December 2019, Parliament appointed the ACA’s director as chair of the Council of the Agency 
for  personal  data  protection  and  free  access  to  information.  After  three  unsuccessful  calls,  the 
new ACA director was selected in July 2020 by the ACA Council.  

The  overall  impact  of  anti-corruption  measures  in  particularly  vulnerable  areas  (local  self-
government,  spatial  planning,  public  procurement,  privatisation,  healthcare  and  education)  still 
has yet to be demonstrated by tangible results. Regarding public procurement, the amendments 
to  the  law  on  public  procurement  enacted  in  December  2019  provide  a  legal  basis  for  full 
implementation  of  an  electronic  public  procurement  system.  This  should  improve  the 
transparency of public procurement procedures and help to reduce corruption risks. 

Law enforcement  

The  institutional  and  operational  capacity  of  prosecutors,  judges  and  police  to  fight  corruption 
should  be  further  improved,  particularly  through  specialised  and  long-term  training.  Financial 
investigations still need to be launched systematically in parallel with criminal investigations to 
discover  the  financial  structures  behind  criminal  offences.  The  initial  track  record  of  cases 
reaching  prosecution  from  the  police  and  other  state  institutions  needs  to  be  improved  and 
consolidated. Political influence should not be exerted on law enforcement and judicial officials 
by members of the executive and the legislative branch.    

The Special Prosecutor’s Office (SPO) has now 50 employees, including 13 Special Prosecutors 
and 34 civil servants. The poor office conditions of the SPO remain a matter of concern.  

Legal framework  

Montenegro  is  party  to  all  international  anti-corruption  conventions,  including  the  UN 
Convention  against  Corruption.  The  legal  framework  and  secondary  legislation  on 

29 

 
anti-corruption  are  in  place.  Passive  and  active  corruption  are  both  punishable  under  the 
Criminal Code. Montenegro is encouraged to make illicit enrichment a criminal offence.  

The Council of Europe Group of States  against Corruption (GRECO) concluded that out of 11 
recommendations on the ethics and integrity of MPs, judges and prosecutors, 8 are considered to 
be  satisfactorily  implemented  and  1  partially  implemented.  Two  recommendations  (both 
concerning the judiciary) have not been implemented.    

The new law on financing of political entities and election campaigns, enacted by Parliament 
in December 2019 only partially addressed the OSCE/ODIHR recommendations. In April 2020, 
the Parliament enacted an amendment to this law, providing for allocation of social benefits from 
the  budgetary  reserve  in  an  election  year,  in  case  of  a  war,  state  of  emergency,  epidemic  of 
pandemic of communicable diseases. Despite some improvements, the current legal framework 
still has legal gaps and conflicting provisions and does not provide for effective safeguards and 
sanctions against circumvention, which limits the effectiveness of oversight. All shortcomings in 
the  existing  legal  framework  on  political  parties'  financing,  including  those  identified  by 
ODIHR, need to be addressed.  

The implementation of the current law on free access to information has not helped to increase 
the accountability and transparency of the public service. In 2019 the total number of requests for 
free  access  to  information  was  5,409  (2018:  6,080)  and  3,531  complaints  were  filed  (2018: 
3,248). The process of revising the law started in spring 2019, but has been put on hold due to 
the  COVID-19  outbreak.  Montenegro  needs  to  ensure  the  compliance  of  both  the  legal 
framework and its practice with international and European standards in this area.   

Fundamental rights  

The legislative and institutional framework in the area of fundamental rights is now largely in 
place. In July 2020, the law on life partnership of same-sex couples was enacted by Parliament, 
making Montenegro the  first  country in  the region to  regulate the status  of same-sex couples. 
The  capacity  of  human  rights  institutions  and  of  the  Ministry  of  Human  and  Minority  Rights 
has  been  reinforced,  and  trust  in  the  Ombudsperson’s  office  and  the  quality  of  its  work  is 
increasing. Decisions of the Constitutional Court further align with European and international 
standards. However, important challenges remain in ensuring that national legislation on human 
rights  is  effectively  implemented.  The  reports  of  excessive  use  of  force  by  the  police  and 
allegations  of  torture  call  for  swift  and  effective  investigations.  Ethnically  and  religiously 
motivated attacks in the context of the August 2020 elections are a matter of serious concern. 
Further  efforts  are  necessary  to  mainstream  human  rights  across  all  areas  of  work,  public 
policies  and  sectors.  Vulnerable  groups,  including  Roma  and  Egyptians,  and  persons  with 
disabilities continue to  experience multiple types of discrimination  and difficulty in  enforcing 
their  rights  in  administrative  and  judicial  proceedings.  Women  in  Montenegro  continue  to 
experience inequality in accessing employment, economic opportunities, and a clear wage gap 
remains in  the country.  Gender-based violence and violence against children remain issues of 
serious  concern.  While  there  has  been  progress  with  regard  to  the  rights  of  lesbian,  gay, 
bisexual,  transgender  and  intersex  (LGBTI),  there  continue  to  be  incidents,  hate  speech  and 
homophobic expressions against this community.   

In the coming year, Montenegro should in particular: 

  ensure a better and more systematic access to justice, complaint systems and free legal aid 

30 

 
for victims of human rights violations and victims of crime, and vulnerable groups, such as 
persons  with  disabilities;  minorities,  including  Roma  and  Egyptians;  and  women  and 
children victims of violence; 

  provide for swift, effective and independent investigations into allegations of excessive use 
of force, torture and ill-treatment  by the police,  hate crimes and ethnically  and religiously 
motived attacks in accordance with ECtHR case law; 

  ensure  a  genuine dialogue on the  Law on freedom  of religion  or beliefs and that the  Law 
respective  Venice  Commission’s 

implementation 

address 

fully 

the 

its 

and 
recommendations. 

As regards international  human rights instruments, no new ratifications  took  place in  2019. 
Montenegro has not yet ratified the International Convention on the Protection of the Rights of 
All Migrant Workers and Members of Their Families (ICRMW) signed in October 2006 and the 
Protocol  of  2014  to  the  1930  Forced  Labour  Convention.  Montenegro  continued  its  dialogue 
with international human rights organisations and monitoring bodies, the United Nations and the 
Council  of  Europe.  In  2019,  the  Ministry  of  Foreign  Affairs  developed  a  database  to  track  the 
implementation  of  obligations  and 
international  human  right 
mechanisms.  In  March  2019,  the  Advisory  Committee  on  the  Framework  Convention  for  the 
Protection  of  National  Minorities  adopted  its  Third  Opinion  on  Montenegro.  In  June  2019, 
Montenegro reported on the implementation of the 2017 recommendations of the UN Committee 
on the Elimination of Discrimination against Women (CEDAW).  In April 2020, the UN Special 
Rapporteur on trafficking in persons, especially women and children published her report on her 
2019  visit  to  Montenegro.  In  April  2020,  Montenegro  reported  on  the  implementation  of 
recommendations of the UN Committee on Elimination of Racial Discrimination (CERD).  

recommendations  from 

Montenegro  continues  to  ensure  a  good  level  of  cooperation  with  the  European  Court  of 
Human Rights (ECtHR). In 2019, 427 new applications against Montenegro were allocated to a 
judicial formation of the Council of Europe and 98 applications were pending before the Court at 
the end of the year. In 2019 and first half of 2020, the ECtHR found violations of the European 
Convention on Human Rights in eight cases with respect to inhuman treatment during detention, 
unlawful  detention,  unjustified  duration  of  detention,  duration  of  court  proceedings,  right  to 
private  and  family  life;  and  right  to  property.  No  issues  with  respect  to  execution  of  ECtHR 
judgement are reported and none of the cases against Montenegro is under enhanced supervision 
of execution by the Committee of Ministers.    

Montenegro is not yet observer to the Fundamental Rights Agency.  

As  regards  the  promotion  and  enforcement  of  human  rights,  the  Ministry  of  Human  and 
Minority Rights (MHMR) continued to strengthen its administrative capacity though the creation 
of  new  positions  and  internal  training  programmes  but  the  MHMR’s  overall  capacity  remains 
weak.  CSOs  are  regularly  consulted  on  legislative  initiatives.  However,  cooperation  between 
institutions and CSOs need to be further enhanced, including at the local level.    

The quality of the Constitutional Court's decisions continues to improve in terms of application 
of  human  rights  standards  and  ECtHR  case  law.  However,  the  fact  that  regular  courts  do  not 
always  follow  its  decisions  raises  concerns.  Public  institutions’  overall  awareness  of  human 
rights  standards  slightly  improved  in  2019.  Human  rights  education  is  not  yet  sufficiently 

31 

 
provided to public administration officials, law enforcement authorities and legal professionals. 
Sensitisation to human rights issues across social sectors needs to be increased.  

The regulatory and institutional framework for the functioning of the Ombudsperson, accredited 
with a B-status by the Global Alliance for National Human Rights Institutions (GANHRI), is in 
place. Despite a persistent lack of staff and relatively limited resources (budget of EUR 695,322 
in  2019,  and  of  EUR  725,227  in  2020),  the  Ombudsperson’s  Office  continues  to  have  good 
visibility,  outreach  and  productivity.  In  December  2019,  Parliament  confirmed,  with  wide 
political  support,  the  appointment  of  a  new  Ombudsperson.  Staff  training  activities  and 
initiatives  to  promote  the  human  rights  of  the  most  vulnerable  groups,  particularly  children, 
continued, along with cooperation with the UNHCR to uphold protection of the human rights of 
migrants and asylum seekers. The national electronic database for the management of complaints 
was  improved.  Cooperation  with  the  media  and  the  civil  society  remains  good  overall,  but 
additional efforts are required to further increase trust between stakeholders. In 2019, the Office 
received  840  complaints  (2018:  889).  The  preliminary  figures  for  2020  suggest  an  overall 
increase of complaints.    

As  regards  the  prevention  of  torture  and  ill-treatment,  the  regulatory  framework  has  been 
partly consolidated with the adoption of a set of implementing rules in 2019 and early 2020. A 
working group has been formed to prepare the amendments to the Criminal Code with regard to 
crimes  of  torture  and  other  forms  of  ill-treatment.  These  amendments  will  need  to  address  the 
2018  UN  Universal  Periodic  Review  recommendation  to  explicitly  prohibit  the  statute  of 
limitations  for  such  crimes,  increase  sanctions,  as  well  as  exclude  the  possibility  of  granting 
amnesty and pardon to public officials accused or convicted of such crimes. 

Some additional measures have been taken to strengthen the effectiveness of investigations and 
judicial response to cases of torture and ill-treatment that however remains challenging overall.  

The serious allegations of police torture of three individuals during their detention in May 2020, 
the excessive, unjustified and unauthorised use  of force by law  enforcement, communal  police 
and private security agencies during the June 2020 events in Budva in the context of change of 
power in the municipality, as well as all other reports about excessive use of force by the police 
need to be duly investigated by the competent national authorities.    

The  operational  capacity  and  visibility  of  the  National  Preventive  Mechanism  (NPM)  were 
reinforced in 2019 with the provision of additional funds for promotional activities, research and 
monitoring. The NPM mission carried out 24 control visits to assess the conditions of detention. 
Further surveys on the treatment of migrants and asylum seekers were also conducted in 2019.  

Concerning the prison system and conditions, the limited capacities of detention facilities and 
continued over-use of pre-trial detention for low-risks defendants and less serious crimes remain 
a  concern.  Additional  measures  were  taken  to  address  the  recommendations  of  the  European 
Committee  for  the  Prevention  of  Torture  and  Inhuman  or  Degrading  Treatment  or  Punishment 
(CPT).  An  ethics  committee was established for  monitoring compliance  with  the provisions of 
the new code of ethics for civil servants and state employees of the Institute for the Execution of 
Criminal  Sanctions. Safeguards for persons deprived of their liberty  are however not  sufficient 
and  serious  discrepancies  remain  between  regulatory  standards  and  practice.  Some 
improvements  were  made  to  nutrition  and  health-care  services,  family  visits,  staffing  and  the 
working  environment.  However,  the  material  conditions  of  detention  remain  poor  and  serious 
challenges in this respect have been further exposed in the context of the COVID-19 pandemic. 

32 

 
In June 2020, the Parliament passed a Law on Amnesty to reduce the prison sentences of some 
inmates  by  5-15%,  in  order  to  reduce  the  prison  overcrowding  in  the  context  of  COVID-19 
outbreak.  Prison  extensions  and  additional  penitentiary  building  plans,  including  a  prison 
hospital,  are  currently  under  preparation.  Construction  of  a  protective  prison  wall  has  started 
around the facility for short-term sentences in order to provide for better security is underway. 
The  EU-funded  technical  assistance  for  the  construction  of  a  new  prison  facility  in  Mojkovac 
started  in  November  2019.  Cooperation  with  civil  society  continued  regarding  prisoners  with 
special  needs,  prevention  of  recidivism  and  social  reintegration  and  personal/professional 
development. Progress made in rehabilitation and resocialisation of (former) detainees should be 
sustained. Full accessibility for persons with disabilities in prison is yet to be addressed.   

On  protection  of  personal  data,  major  challenges  remain  in  consolidating  the  legal  and 
institutional  frameworks,  including  internal  control  mechanisms  and  supervision  of  the 
processing of and access to personal information. Montenegro has not yet signed or ratified the 
2018  Protocol  amending  the  Convention  for  the  Protection  of  Individuals  with  regard  to 
Automatic  Processing  of  Personal  Data.  A  new  law  on  protection  of  personal  data  is  in 
preparation with the aim of aligning it with the 2016 EU General Data Protection Regulation and 
the  Directive  on  the  processing  of  personal  data  for  authorities  responsible  for  preventing, 
investigating, detecting and prosecuting crimes. Activities to increase the capacity of the Agency 
for  Personal  Data  Protection  and  Free  Access  to  Information  have  continued  but  its  overall 
capacity  remains  limited.  The  number  of  data  protection  cases  brought  to  court  remains  low, 
while complaints lodged with the Agency have increased. The level of capacity and awareness of 
rights and obligations is generally low among the different state bodies, members of the public 
and the private sector. The COVID-19 crisis  further exposed these challenges, with  authorities 
struggling  with  finding  the  right  balance  between  protection  of  health  and  respecting  the 
confidentiality of personal health data and the right to private life of citizens. A list of all persons 
subject  to  measure  of  self-isolation  was  published  upon  decision  of  the  National  Coordination 
Body  and  positive  opinion  of  the  Agency  for  Personal  Data  Protection.  In  July  2020,  the 
Constitutional Court declared the respective decision to be in violation of the Constitutional right 
to  privacy  and  annulled  it.  The  list  was  subsequently  used  by  a  private  individual  to  create  a 
mobile application allowing users to locate those in self-isolation. In April 2020, a list of more 
than 60 persons infected with the virus, containing their names, birth data and ID numbers, was 
leaked. In May 2020, an indictment has been lodged in this case against one defendant. 

In  the  area  of  freedom  of  thought,  conscience  and  religion,  in  December  2019  Parliament 
enacted the law on the freedom of religion or belief in order to regulate, among other things, the 
legal status of religious communities, their property and property rights over religious sites. The 
law declares state property rights over religious buildings and land built or obtained from state 
revenues,  or  which  were  owned  by  the  state  until  1  December  1918  and  for  which  there  is  no 
evidence of ownership by the religious community. Its adoption was marred by tensions and an 
incident in Parliament, which led to the arrest of opposition MPs. Large scale religious rallies in 
support of the Serbian Orthodox Church (SOC) and protests followed, but were discontinued due 
to  COVID-19  crisis.  Further  tensions  arose  in  May  and  June  2020  between  the  SOC  and  its 
believers  and  the  authorities  following  arrests  and  detentions  of  the  Church’s  bishop  and  its 
priests  for  disobeying  the  COVID-19  preventive  measures.  In  February  2020,  the  government 
initiated a dialogue between legal experts and the SOC, which considers itself heavily impacted 
by the law. In June 2020, the Government announced publicly that it had offered to the Church 
to  suspend  the  application  of  the  law  until  the  law  is  reviewed  by  the  Constitutional  Court, 

33 

 
provided that the COS submits a motion to the Montenegro Constitutional Court. The proposal 
was rejected by the SOC. The dialogue with all religious groups and relevant stakeholders needs 
to  continue  in  line  with  relevant  international  and  European  human  rights  standards,  including 
the  recommendations  of  the  Venice  Commission  opinion  on  the  law  of  June  2019.  The 
religiously  motivated  attacks  in  the  context  of  August  2020  elections  are  a  matter  of  serious 
concern, 

Freedom of expression 

Montenegro has achieved some level of preparation in this area. During the reporting period 
Montenegro  made  no  progress  on  freedom  of  expression  overall.  Although  there  has  been 
progress  on  the  media  legislation,  this  has  been  overshadowed  by  arrests  and  proceedings 
against editors of on-line portals and citizens for content they posted or shared on-line in the 
course of 2020. The authorities have invested efforts in the new legal framework for media 
and inclusive additional consultations with the stakeholders. In July 2020, Parliament enacted 
the new law on media and the new law on public broadcaster RTCG. Some of the last-minute 
changes to the two laws will need to be reviewed together with the upcoming Law on audio-
visual media, which is under preparation; and in the light of European standards. Important 
old  cases  of  attacks  remain  unresolved,  including  the  2004  murder  of  the  editor-in-chief  of 
daily newspaper,  Dan, and the 2018 shooting of an investigative journalist.  The Parliament 
appointed  a  new  Council  of  the  national  public  broadcaster  (RTCG),  but  concerns  remain 
about  RTCG’s  editorial  independence  and  professional  standards.  Several  court  rulings  in 
2019 found that members of the RTCG Council and management were unlawfully dismissed 
in  2018.  The  media  scene  continues  to  be  highly  polarised  and  self-regulatory  mechanisms 
remain  weak.  The  growing  volume  of  region-wide  disinformation  further  polarised  the 
society  in  the  aftermath  of  the  adoption  of  the  Law  on  freedom  of  religion  and  during  the 
electoral  campaign.  The  authorities,  including  the  judiciary  need  to  be  better  prepared  to 
apply the ECtHR case law on freedom of expression.  

In addressing the shortcomings, Montenegro should in particular: 

  investigate cases of attacks against journalists as a matter of priority; 

  ensure that  any individual measures taken to  limit  the effects  of disinformation  and on-
line harassment or hate speech do not limit disproportionately freedom of expression and 
the media; 

  complete  the  revision  of  the  legal  framework  in  the  area  of  media  and  provide  for 
unambiguous  application  of  the  new  legislation  in  accordance  with  international  and 
European standards. 

Intimidation of journalists 

Progress in addressing violence against journalists and media is still very limited. Important old 
cases,  including  the  2004  murder  of  the  editor-in-chief  of  the  daily  newspaper,  Dan,  and  the 
2018 shooting of an investigative journalist, remaining unsolved. Four attacks were registered by 
the authorities in 2019. In 3 of those cases, indictments were lodged. Protection was offered to 2 
journalists. Further cyber-attacks against media outlets were reported. The government continued 
to issue strong statements in support of investigations into cases of violence against journalists 
and  media  property.  In  spite  of  initial  results  in  the  investigation  into  the  May  2018  serious 
attack  on  investigative  journalist  Olivera  Lakic,  its  perpetrator  and  mastermind  have  yet  to  be 

34 

 
brought  to  justice.  No  notable  progress  was  made  in  solving  older  cases,  including  the  2004 
murder  of  the  editor-in-chief  of  DAN.  In  April  2020,  the  Police,  however,  shed  light  on  four 
cases of attacks on media property from 2011 and 2014, when five vehicles were damaged and 
destroyed. Two persons – minors at the time of the attacks – suspected of direct involvement in 
the attacks are being prosecuted under the law applicable to minors. Indictment of the leader of 
the criminal group suspected to be the mastermind behind these attacks has been dismissed and 
he was released from detention. Montenegro’s Police Directorate will be the first in the region to 
receive capacity building on safety of journalists under an EU-funded project.   

After a second-instance court annulled the verdict in the case of a journalist convicted on charges 
of  setting  up  a  criminal  organisation  and  drug  trafficking,  which  had  raised  concerns  about 
journalists’ ability to perform their duties professionally and without fear of legal repercussions, 
the renewed proceedings are currently ongoing. Although brief, the January 2020 detentions of 
editors of on-line portals for the alleged offence of causing panic and disorder, as a measure to 
fight  disinformation,  have  the  potential  to  set  a  dangerous  precedent  and  encourage 
self-censorship. So, too, do the subsequent repressive measures, arrest and criminal proceedings 
against  members  of  the  public  for  their  social  media  posts,  including  in  the  context  of  the 
COVID-19  crisis.  There  have  been  reports  of  undue  pressure  on  journalists  to  disclose  their 
sources  from  law-enforcement  officials.  Harassment  of  journalists,  including  use  of  physical 
force,  was  further  reported  in  the  course  of  2020.  In  the  run-up  to  the  August  2020  elections, 
anonymous harassment of government-critical journalists intensified via a dedicated website.  

The  ad  hoc  commission  for  monitoring  violence  against  media  has  produced  six  reports  since 
September 2016 on both  recent  and old  cases,  identifying a number of shortcomings including 
delays in investigations. The commission has been given access to documents with un-redacted 
names, but difficulties in obtaining timely and complete information from the authorities persist. 
Its recommendations are yet to be fully implemented. While its mandate has been extended until 
September  2020,  its  funding  for  2020  has  been  temporary  suspended  due  to  the  COVID-19 
crisis. Further efforts are needed to prosecute the cases effectively and without delay, not least to 
avoid the application of the statute of limitations. Authorities are expected to demonstrate zero 
tolerance for threats or attacks against the media, and should refrain from making statements that 
are not conducive to freedom of expression. 

The broadly formulated provision on disclosure of journalistic sources in the new Law on media 
will  need  to  be  applied  restrictively,  limited  to  exceptional  circumstances  only,  and  in 
accordance with international and European standards and the case-law of the ECtHR.    

Legislative environment 

New laws on media and the public broadcaster RTCG were enacted by Parliament in July 2020, 
while the new law on audio-visual media is under preparation. The first two laws were subject to 
public  consultations,  which  allowed  interested  parties  to  voice  their  concerns.  Additional 
dialogue with the media community and CSOs took place in spring 2020. However, some of the 
last-minute changes to these two laws will need to be reviewed together with the law on audio-
visual  media  to  ensure  consistency  and  full  alignment  with  the  EU  acquis  and  relevant 
international standards.  

In December 2019, Parliament enacted amendments to the law on public peace and order which 
introduce  fines  for  not  standing  for  the  national  anthem.  While  regulating  these  issues  is  a 

35 

 
national  prerogative,  it  is  important  to  do  so  in  a  way  that  avoids  fuelling  tensions  and 
antagonism or restricting freedom of expression.  

Implementation of legislation/Institutions 

A code of ethics was adopted in 2002 and revised in 2015, its even application across the entire 
media community remains to be ensured. Self-regulatory bodies continued to reflect the overall 
polarisation of the media scene in Montenegro. There is still no uniform approach to sanctions, 
suggesting  that  ECtHR  case-law  and  other  standards  are  not  yet  sufficiently  known  by  the 
judiciary.  Efforts  need  to  be  stepped  up  to  create  effective  self-regulatory  mechanisms,  with  a 
view to improving professional standards in media reporting. In spring 2019, the Constitutional 
Court ruled that the blocking of freeware and cross-platform instant  messaging services on the 
October  2016  Election  Day  was  unconstitutional  and  annulled  the  provision  of  the  law  on 
electronic communication on which the measure was based. 

Public  service  broadcaster  -  Radio  Televizija  Crne  Gore  (Radio  Television  of  Montenegro  – 
RTCG) 

While  all  media  outlets  have  an  obligation  to  act  in  accordance  with  the  highest  professional 
standards, this is particularly important for the public broadcaster. RTCG's transition from a state 
media organisation to a true public service broadcaster has not been completed yet. Decisions to 
dismiss  RTCG  Council  members  and  its  management  in  the  course  of  2018  raised  serious 
concerns  about  their  representativeness,  independence  and  ability  to  operate  free  of  undue 
influence and political pressure. Several of these dismissals were annulled by domestic courts in 
2019.  The  appointment  of  its  new  Council  in  June  2019,  has  not  succeeded  in  improving 
RTCG’s editorial independence and professional standards. In March 2020, two journalists were 
subject  to  disciplinary  proceedings  for  criticising  on  their  private  social  media  accounts  a 
controversial documentary produced in-house and aired on RTCG. Although the proceeding did 
not results in sanctions, their initiation is a matter of concern.  

The contract on provision of public services between the government and RTCG was signed in 
2018.  It requires the  government  to  monitor the implementation of the financial commitments. 
The  new  law  on  the  public  broadcaster  abolished  the  the  financing  of  the  public  broadcaster 
through  a  contract  while  maintaining  the    current  State  budget  allocation  0.3%  of  GDP  for 
RTCG.  Additional  revenues  will  continue  to  be  generated  from  marketing  activities,  with 
limitations for prime time advertising 

Even though the collective agreement regulating the work of RTCG employees was signed after 
3  years  of  collective  bargaining,  RTCG  employees  still  face  a  number  of  uncertainties,  mostly 
related  to  economic  conditions.  A  joint  commission  should  monitor  implementation  of  the 
agreement and react to potential violations.  

Editorial independence and professional standards need to be restored within RTCG and a legal 
remedy for dismissals of its Council Members by Parliament remains to be provided by a law. 

Economic factors  

Despite  the  large  market  share  of  government-critical  and  pro-opposition  media,  many  media 
outlets are not financially sustainable. The media advertising market is small and concerns about 
transparency and discrimination in state advertising activities persist. This situation was further 
aggravated  by  the  COVID-19  outbreak  leading  to  a  significant  revenues  decline  for  print, 
electronic and online media while facing increased costs of production due to the health crisis. 

36 

 
The  Ministry  of  Culture  provided  for  some  emergency  measures,  such  as  exemption  or 
postponement of financial obligations and distribution of grants in the amount of EUR 310,000, 
as well as provision of a credit line of up to EUR 600,000 by the Investment and Development 
Fund.  The  new  Law  on  Media,  introduced  a  requirement  for  public  sector  authorities  at  both 
national and local level to submit to the Ministry of Culture all the records of payments made to 
media  outlets  for  advertising  or  other  contractual  services,  as  well  as  to  publish  them  online. 
Annual reports on the payments made to the media by the public sector also need to be published 
by  the  Ministry  of  Culture.  While  these  provisions  represent  a  positive  development,  their 
transparent  and  unbiased  implementation  remains  vital  in  ensuring  that  informal  pressure  on 
editorial policy is not exerted through the distribution of advertising funds.  

Professional organisations and working conditions 

The economic situation of journalists remains precarious, particularly due to job insecurity and 
low  salaries,  putting  them  at  risk  of  self-censorship  and  owner  interference,  and  further 
aggravated due to  the COVID-19 outbreak. Journalists are jointly represented in  Montenegro’s 
media trade union.  In 2019, after  years of stagnation, the trade union  succeeded in  obtaining a 
salary  increase  for  public  broadcaster  employees.  The  two  associations  that  aim  to  foster  and 
promote  professional  journalism  across  the  polarised  media  scene  have  yet  to  reach  their  full 
maturity. 

(See also Chapter 10 – Information society and media) 

Freedom  of  assembly  and  association  is  guaranteed  by  the  Constitution  and  provided  for  in 
law.  It  has  been  generally  respected.  In  2019,  several  protests  and  larger  scale  religious  rallies 
were  triggered  by  the  adoption  of  the  law  on  the  freedom  of  religion  or  belief.  They  were 
conducted  in  a  peaceful  atmosphere  overall,  despite  some  isolated  incidents.  They  were 
suspended in line with the public gatherings ban introduced during the COVID-19 outbreak. The 
ban has been loosened as of mid-May for public gatherings of more than 200 persons, but had to 
be reintroduced in  June, after new COVID-19  cases were reported. Criminal  proceedings were 
instituted against several priests and believer of SOC, including the Metropolitan of Montenegro 
and Litoral for failing to comply with health regulations in place.   

Issues  of  labour  and  social  rights  are  further  covered  in  Chapter  19  –  Social  policy  and 
employment.  

Regarding  property  rights,  the  process  of  restitution  of  properties  expropriated  during  the 
communist  regime  remains  slow.  Montenegro  needs  to  ensure  the  implementation  of  fair 
restitution proceedings within a reasonable time. Several cases of alleged violations of Article 1 
of Protocol No. 1 (right to property) of the European Convention on Human Rights (ECHR) are 
pending before the ECtHR. The new law on freedom of religion or belief, adopted in December 
2019,  stipulates  that  all  religious  sites  that  were  in  state  possession  before  1  December  1918, 
when  Montenegro  lost  its  statehood,  are  considered  state  property  unless  the  church  is  able  to 
provide evidence of ownership. The procedure to determine property rights over religious sites 
needs  to  fully  address  the  relevant  recommendations  of  the  Venice  Commission  and  provide 
clarification on the implementation modalities of the law. 

Regarding  non-discrimination,  the  number  of  complaints  of  discrimination  submitted  to  the 
Ombudsperson’s  Office  in  2019  (141),  which  also  has  the  legal  mandate  of  an  equality  body, 
remained  at  the  level  of  2018  (146).  Trust  in  the  office’s  contribution  to  the  fight  against 

37 

 
discrimination  continues  to  increase.  However,  the  resources  allocated  to  the  office  remain 
insufficient.  The  Ombudsperson’s  task  of  collecting  data  on  discrimination  also  remains 
challenging  as  not  all  ministries  and  state  organs  adhere  to  the  2014  rulebook  for  aggregating 
data on discrimination cases. Court cases remain rare and no new cases were opened in 2019. In 
December 2019, the Ministry  for Human and Minority Rights  established a working  group for 
revising  the  law  on  prohibition  of  discrimination  to  further  align  it  with  EU  acquis.  The 
finalisation  of  the  draft  which  was  subject  to  public  consultations  has  been  delayed  due  to  the 
COVID-19 outbreak.      

On  equality  between  women  and  men,  there  was  some  progress  in  the  reporting  period.  In 
2019,  for  the  first  time,  a  Montenegro  Gender  Equality  Report  was  prepared,  based  on  the 
methodology  of  the  Gender  Equality  Index  developed  by  the  European  Institute  for  Gender 
Equality (EIGE) for the European Union and its Member States. Montenegro’s index score was 
55 points, compared to an EU average of 67.4. Women continue to be underrepresented on the 
labour  market,  in  entrepreneurship,  policy-making  and  politics.  In  May  2019,  the  government 
adopted the report on the implementation of the Beijing Declaration and Platform for Action, and 
in  August  2019  the  2019-2020  action  plan  for  the  implementation  of  United  Nations  Security 
Council  Resolution  1325,  Women,  Peace  and  Security  in  Montenegro.  In  December  2019,  the 
Parliament enacted a new Labour Law, meant to bring national law in line with the EU directives 
2006/54/EC  on  equal  opportunities  in  employment  and  92/85/EEC  on  pregnant  workers, 
although further progress still needs to be made regarding alignment to the latter directive. The 
legislative  framework  on  gender-based  discrimination  has  limited  impact  due  to  weak 
implementation  of  existing  measures  and  insufficient  prioritisation  of  gender  equality  in  the 
overall state and public accountability mechanisms. Most institutional actors are often unaware 
of their legal obligations for gender mainstreaming or insufficiently trained to implement gender 
policies. Accountability mechanisms for achieving gender equality need to be strengthened and 
gender impact assessments must be implemented at all levels in the public administration. Steps 
in this direction were taken in 2020 by the Police Directorate and MHMR . The Judicial Training 
Centre and State Prosecution organised trainings on women's rights and gender equality. Sexual 
harassment,  although  prescribed  as  a  special  form  of  discrimination,  is  still  not  defined  as  a 
criminal offence under the law, but Ministry of Justice has formed a working group to reconsider 
this issue.  

2019 saw a persistently high number of reported cases of violence against women and domestic 
violence,  which  relate  to  criminal  offences  (186  cases,  of  which  courts  resolved  106)  and 
domestic  violence  misdemeanours  (1,759  cases,  of  which  courts  resolved  382).  The  electronic 
database  on  domestic  violence  became  operational  in  May  2019,  providing  the  Ministry  of 
Labour  and  Social  Welfare,  social  welfare  centres  and  the  Ministry  of  Interior  with  an 
interinstitutional tool for automatic exchanges of information. The Ministry of Labour and Social 
Welfare  has  drawn  up  an  analysis  of  the  services  to  be  delivered  as  a  priority  to  support  the 
victims of violence against women and domestic violence and started issuing licences to several 
specialised  NGOs  offering  victim  support  services.  However,  a  sustainable  public  financing 
mechanism is still needed to sustain the work of these NGOs, along with  the creation of state-
owned specialist centres across the country for providing care, support and advice to the victims 
of violence. In June 2019, the national SOS line for victims of violence was formally launched. 
Confinement measures imposed during the COVID-19 outbreak led to a significant increase of 
cases  of  domestic  violence.  The  authorities,  in  cooperation  with  CSOs,  responded  with  a 
campaign  to  raise  awareness  and  provide  help  to  victims,  and  launched  a  mobile  phone 

38 

 
application through which the victims can contact the national SOS helpline. In early 2020, the 
Coordinating Board foreseen in the Council of Europe Convention on Preventing and Combating 
Violence against Women and Domestic Violence (Istanbul Convention) adopted an action plan 
to monitor the implementation of recommendations of the Council of Europe Group of Experts 
on  Action  against  Violence  against  Women  and  Domestic  Violence  (GREVIO)  and  other 
measures  to  fulfil  the  obligations  under  the  Istanbul  Convention.  Despite  authorities’ 
commitment and concrete measures taken, challenges remain with regard to services’ response to 
domestic violence cases, access to justice for victims, lack of a systematic approach with regard 
to  physical  protection  of  victims  and  prosecution  of  registered  cases,  as  well  as  overly  lenient 
sanctions. 

Concerning the rights of the child, in May 2019, the government adopted a new strategy for the 
exercise  of  the  rights  of  the  child  (covering  2019-2023)  and  its  action  plan  for  2019-2020. 
Sufficient resources should be allocated to enable the strategy’s activities to be carried out. The 
role and mandate of the Council on the Rights of the Child needs to be strengthened so that it can 
effectively  exercise  its  function  as  a  coordinating  mechanism  at  inter-ministerial  level. 
Guidelines  for  the  health  sector  response  to  children  and  adolescents  who  are  victims  of 
violence, intended to increase detection and reporting, were finalised in November 2019. So far 
progress in this area remains limited. Major challenges include insufficient national capacity to 
implement  multi-sectoral  and  holistic  interventions  to  prevent  and  address  violence  against 
children. The very low numbers of reported cases of sexual violence against children continue to 
raise  concerns  about  under-reporting  and  identification  of  victims.  Children  with  disabilities 
experience  barriers  in  accessing  quality  health,  education,  social  and  child  protection  services 
and  limited  inclusion  in  society.Dedicated  campaign  on  the  mental  health  of  children  was 
launched in 2019. The system for licensing CSO service providers in the social protection system 
has been further developed to provide day-care services for children from families at risk, family 
outreach  workers  and  an  SOS  telephone  line  for  children.  However,  those  services  are  largely 
project-funded  and  require  more  sustainable  public  financing.  In  March  2020,  a  public 
awareness-raising  campaign  against  arranged  child  marriages  was  launched,  in  cooperation 
between  the  authorities,  social  services  and  civil  society.  Further  efforts  are  needed  on  de-
institutionalisation  and  child-friendly  justice;  to  tackle  child  marriages  and  child  begging;  to 
improve  support  to  children  with  disabilities  and  their  families;  and  to  address  poverty  and 
improve the social inclusion and health status of vulnerable children. Montenegro is encouraged 
to  raise  the  minimum  marriage  age  to  18  years  of  age,  as  recomended  by  CEDAW  and  UN 
Special Rapporteur on Trafficking in Persons.  

Regarding the rights of persons with disabilities, in March 2019 the government approved the 
annual  action  plan  of  the  strategy  for  the  protection  of  persons  with  disabilities  from 
discrimination  and  for  the  promotion  of  equality  (covering  2017-2021).  A  dedicated  working 
group  has  been  created  to  oversee  the  plan’s  implementation.  The  legal  and  policy  framework 
has  been  consolidated,  albeit  at  a  slow  pace  and  implementing  legislation  is  yet  to  be 
harmonised. Several laws are not fully aligned with the UN Convention on the Rights of Persons 
with  Disabilities  (CRPD)  and  international  standards,  including  on  the  definition  of  disability. 
An action plan to follow-up on recommendations of the UN Committee on the Rights of Persons 
with  Disabilities  is  being  under  preparation.  The  2019  Labour  Law  includes  some  relevant 
provisions  to  promote  the  rights  of  persons  with  disabilities.  Amendments  to  the  law  on 
professional rehabilitation and employment of persons with disabilities are not yet finalised. This 
has, among others, delayed validation of the rulebook on the working centres and facilities for 

39 

 
employment of persons with intellectual and psychosocial disabilities. The right to exercise sign 
language is not enshrined in the law and is a factor of discrimination in terms of accessibility to 
public administration and communication. The limited availability of training for sign-language 
interpreters and trainers in the country is a matter of concern. Concrete steps were taken in 2019 
and 2020 to improve access for persons with disabilities to public facilities and institutions, but 
progress  in  treatment  of  socially  vulnerable  and  persons  with  disabilities  is  insufficient.  The 
existing  legal  provisions  are  yet  to  be  effectively  implemented  to  ensure  the  systematic 
enforcement  of  their  rights.  Mandatory  measures  to  be  implemented  by  public  institutions, 
administrations  and  local  authorities  should  be  strictly  monitored  in  key  sectors  such  as 
education,  transport,  employment,  medical  and  supported-living  assistance,  health  and  social 
protection,  justice  and  legal  protection.  Access  to  polling  stations  remains  a  concern.  Public 
awareness  of  the  existing  legal  and  protection  frameworks  has  to  be  further  promoted  and 
actively reinforced. As of 1 January 2020 a new law on non-contentious proceedings is in force 
which has strengthened safeguards with regard to deprivation of legal capacity. 

On the rights of lesbian, gay, bisexual, transgender and intersex (LGBTI) persons, in March 
2019  the  government  adopted  a  national  strategy  for  improving  the  quality  of  life  of  LGBTI 
persons  (covering  2019-2023)  along  with  an  action  plan  for  2019.  A  national  team  for 
monitoring implementation of the strategy was formed in August 2019. The Ministry of Human 
and  Minority  Rights  signed  a  memorandum  of  understanding  with  20  municipalities  to  fight 
discrimination  based  on  sexual  orientation  or  gender  identity.  Capacity-building  activities  for 
police officers, prosecutors and social services professionals were delivered in six municipalities. 
In  April  2019,  a  Trust  Team  composed  of  members  of  the  LGBTI  community  and  the  Police 
Directorate  was  set  up  to  strengthen  dialogue  and  collaboration.  The  Ministry  of  Human  and 
Minority  Rights  provided  grants  to  help  maintain  two  LGTBI  shelters.  After  two  unsuccessful 
votes in Parliament, the government revised its proposal for the law on life partnership of same 
sex  partners  (same-sex  partnership  law)  in  December  2019  and  the  law  was  enacted  by 
Parliament  in  July 2020. Montenegro is  the first  country  in  the  region  to  regulate the status  of 
same-sex  couples.  Overall,  Montenegro  should  increase  the  capacity  of  the  judicial  system  to 
address hate crimes and hate speech, as well as ensure such cases are duly reported, investigated, 
prosecuted  and  adequately  sanctioned.  Overuse  of  misdemeanour  proceedings  is  reported  with 
respect  to  potentially  more  serious  cases.  More  than  100  complaints  of  discrimination,  hate 
speech  and  verbal  abuse  in  the  media  have  been  lodged  in  2019,  but  only  one  person  was 
convicted in the same year for violent LGBTI-phobic behaviour perpetrated in 2017. Awareness 
about the rights of LGBTI people is increasing. However, LGBTI status and rights continue to be 
regularly challenged, particularly in the media and social networks, including by some political 
and  religious  representatives.  In  September  2019,  the  seventh  Pride  Parade  took  place  in 
Podgorica without incident. Despite some progress, Montenegro should increase the capacity of 
institutions to protect against discrimination, with special emphasis on the judicial system.  

In the field of procedural rights, preparations are ongoing in 2020 to ensure full alignment with 
the EU acquis and European standards, notably on the rights of suspects and accused persons in 
criminal proceedings as well as on victims’ rights. The underlying  analysis have been prepared 
to support the working group. The length of judicial proceedings remains an issue, but revision 
of the legal framework is planned in in order to address this issue. A number of activities have 
taken place in 2019 and 2020 to raise awareness on free legal aid amongst various (vulnerable) 
groups.  More  efforts  are  nevertheless  required  to  ensure  access  to  justice,  and  additional 
measures  for  victims,  more  particularly  for  vulnerable  groups  and  persons  in  situation  of 

40 

 
vulnerability. Montenegro is strongly encouraged to abolish the suspension of enforcement of the 
law  on  victims’  compensation  until  the  date  of  EU  accession  and  secure  sufficient  funds  for 
victims support without delay.    

Concerning  minority  rights,  in  July  2019  the  government  adopted  the  2019-2023  minority 
policy strategy and an action plan for 2019-2020 with a financial allocation. The constitutional 
and legal framework is in place. However, it has yet to be implemented in practice, including on 
issues  such  as  the  right  to  proportional  representation  in  public  services.  While  there  has  been 
some improvement regarding the Fund for the Protection and Realisation of Minority Rights, the 
lack of monitoring and evaluation of projects receiving funding feeds into a perception that the 
funding process  still lacks transparency. More information  on funding needs to  be available to 
the  public,  including  project  reports  and  evaluations,  in  order  to  ascertain  that  the  funds  were 
spent efficiently and transparently and that the intercultural dialogue criteria were fulfilled. The 
legal framework for Minority Councils may need to be reviewed regarding their establishment, 
legal status and gender balance. Some inter-ethnic incidents were reported in the context of the 
adoption of law on freedom of religion. Ethnically motivated attacks following the August 2020 
elections are a matter of serious concern.        

In  April  2020,  the  government  adopted  the  annual  action  plan  for  the  implementation  of  the 
strategy for the social inclusion of Roma and Egyptians. The budget allocated for implementing 
the  strategy  remains  insufficient  and  Roma-responsive  budgeting  needs  to  be  given  greater 
priority across different sectors. MHMR funding of inclusion projects increased by 60% in 2019 
(to EUR 215,000 from EUR 131,000 in 2018). Montenegro signed the Western Balkan Partners 
Roma Integration declaration in Poznan in July 2019, which contained quantifiable commitments 
in key priority areas. Efforts to meet these commitments need to be stepped up. The Conclusions 
from  the  June  2018  Roma  Seminar  involving  all  the  relevant  stakeholders,  are  yet  to  be 
implemented.  

The enrolment rate for Roma primary school pupils slightly increased in 2019/2020 compared to 
2018/2019,  compared  to  the  higher  birth  rate.  There  is  a  persistent  lack  of  data  on  the  overall 
number  of  Roma  children  who  should  be  enrolled  in  the  education  system,  especially  in 
obligatory primary education. In 2019/2020, 1,803 Roma and Egyptian children were enrolled in 
primary  schools  (1,793  in  2018/2019),  only  142  in  secondary  school  and  there  were  13  high 
school  students.  While  drop-out  rates  are  moderately  decreasing,  the  overall  completion  rates 
remain  dramatically  low,  with  only  88  pupils  successfully  completing  elementary  school  and 
only 19 completing secondary school in 2019. Twenty-one Roma mediators have been employed 
by  the  Ministry  of  Education  since  the  beginning  of  the  2019/2020  school  year  to  help  of 
increase the enrolment rate of Roma and Egyptian children and reduce the dropout rate.  

The  number  of  Roma  and  Egyptians  registered  with  the  National  Employment  Bureau  further 
decreased  from  802  in  2018  to  747  in  2019  and  they  are  by  far  the  most  underrepresented 
national minority group in the public service. Some targeted measures were implemented, such 
as the national employment bureau's active employment measures (129 Roma were temporarily 
employed in 2019), but their sustainability and effectiveness have yet to be ensured. In the area 
of health, three Roma health mediators are employed in Podgorica and two in Nikšić and Berane. 
Their number needs to further increase in order to facilitate access to health services, especially 
for displaced and internally displaced (I/DP) Roma and Egyptians who face particular difficulties 
in exercising their right to health protection. 

41 

 
Roma  and  Egyptians,  who  are  mostly  internally  displaced  persons,  benefited  from  housing 
solutions under the regional housing programme, which is progressing well across Montenegro. 
Challenges remain for the housing of domiciled Roma and Egyptians, in particular in light of the 
July 2019 deadline stipulated by the law on spatial planning and construction for applications for 
the  legalisation  of  illegal  buildings.  This  cumbersome  and  expensive  process  has  created 
difficulties  for  many  Roma  and  Egyptian  families.  Many  of  them  are  unable  to  apply  for 
legalisation, which could lead to evictions in the future, especially in the coastal area.  

The  preferential  treatment  offered  by  the  electoral  legislation  to  numerically  small  national 
minorities to ensure their political representation has not been extended to Roma and Egyptians. 
They thus have no representative in the national or local parliaments. There is still no systemic 
solution  and  institutional  response  to  child  begging  and  early  marriages  among  the  Roma  and 
Egyptian  communities.  The  Romani  language  is  not  standardised  and  not  taught  in  schools. 
During  the  COVID-19  pandemic,  the  authorities  largely  relied  on  donors  and  civil  society  to 
provide support to the most vulnerable, including the Roma, without assuming a more pro-active 
coordination role in this respect. 

With regard to displaced and internally displaced people, there were a total of 15,247  requests 
for permanent or temporary residence lodged by  June 2020; 15,080 were resolved with 12,376 
persons  being  granted  permanent  or  temporary  residence  up  to  3  years  and  167  requests  were 
still pending. Some 291 requests were rejected and 2,413 temporarily refused due to incomplete 
or double application. 

On statelessness, since the beginning of the application of the law on foreigners in 2018, 4 travel 
documents  and  2  temporary  residence  permits  have  been  issued  to  stateless  persons.  The 
procedure for determining statelessness is ongoing for 9 persons. Identification of potential cases 
remains  a  challenge.  However,  as  of  October  2019  a  new  birth  registration  practice  was 
developed  in  several  municipalities  to  address  the  challenge  of  birth  registration  of  abandoned 
children  or  those  with  mothers  lacking  identity  documents,  leading  to  a  number  of  resolved 
cases.  

In  the  field  of  citizenship,  Montenegro  launched  its  investors'  citizenship  scheme  in  January 
2019 and has received 24 applications so far. Five were rejected after due diligence procedure, 
while  for  5  applications  final  decisions  on  citizenship  were  issued  and  one  passport  has  been 
issued  so  far  in  2020  to  a  citizen  of  the  Russian  Federation.  To  the  other  applicants  and  their 
family  members,  passports  have  not  been  issued  yet  due  to  the  COVID-19  outbreak  and  the 
respective travel ban. The Commission will continue to monitor closely this scheme as it poses 
migratory  risks,  as  well  as  risks  as  regards  security,  money  laundering,  tax  evasion,  terrorist 
financing,  corruption  and  infiltration  by  organised  crime.  As  a  candidate  country,  Montenegro 
should  refrain  from  any  measure  that  could  jeopardise  the  attainment  of  the  EU's  objectives, 
when  using  its  prerogatives  to  award  nationality.  In  December  2019,  Parliament  enacted 
amendments to the law on Montenegrin citizenship. These confirm the automatic eligibility for 
citizenship of the family members of successful applicants to the investor citizenship scheme as 
well as the eligibility of talented athletes and artists of minor age for citizenship. 

2.2.2  Chapter 24: Justice, freedom and security  

The  EU  has  common  rules  for  border  control,  visas,  residence  and  work  permits,  external 
migration  and asylum. Schengen  cooperation entails lifting  border controls  inside the  EU. EU 
Member  States  also  cooperate  with  Montenegro  in  the  fight  against  organised  crime  and 

42 

 
terrorism, in judicial, police and custom matters and are supported by the EU Justice and Home 
Affairs Agencies. 

Montenegro is moderately prepared in the area of justice, freedom and security. The legislative 
and  institutional  frameworks  are  now  largely  in  place.  Some  progress  was  achieved  in 
addressing  last  year’s  recommendations,  in  particular  as  regards  adopting  standard  operating 
procedures on financial investigations and strengthening the institutional capacity in the area of 
migration, asylum and border management. 

In the coming year, Montenegro should in particular: 

  review  the  legal  and  operational  approach  towards  financial  investigations,  money 
laundering,  asset  recovery,  to  align  it  with  EU  and  international  standards  and  practices; 
establish an integrated approach between all the bodies involved and provide them with the 
necessary  legal  and  operational  tools  to  create  the  conditions  for  establishing  a  convincing 
track record in this area; 

  take  concrete  measures  to  limit  the  use  of  plea  bargains  to  exceptional  cases,  in  order  to 
enhance  the  transparency  and  the  credibility  of  the  judicial  response  to  organised  crime 
through a more deterrent and consistent sanctioning policy; 

  further  strengthen  the  capacity  to  deal  with  mixed  migration  flows  and  the  integration  of 
refugees; continue to increase human and material resources devoted to border management 
and the migrant registration system.  

Montenegro  continues  to  implement  a  detailed  action  plan  on  justice,  freedom  and  security, 
which  was  adopted  prior  to  the  opening  of  the  accession  negotiations  on  this  chapter  in 
December 2013. 

Fight against organised crime  

Montenegro  has  some  level  of  preparation/is  moderately  prepared  in  the  fight  against 
organised  crime.  Some  progress  was  made  in  addressing  last  year’s  recommendations,  in 
particular as regards the creation of a centralised bank account register, a stronger capacity and 
professionalism  of  the  police  and  an  increased  number  of  on-going  proceedings  on  asset 
confiscation.  

Good progress was achieved in establishing an initial track record of investigations in the area of 
fight  against  trafficking  in  human  beings  and  money  laundering.  Internal  organisation  and 
coordination  of  law-enforcement  agencies  was  further  improved,  as  reflected  in  the  increasing 
number  of  investigations,  arrests  and  seizures.  However,  Montenegro  needs  to  address  some 
horizontal systemic deficiencies in its criminal justice system, including the way organised crime 
cases are handled in the courts.  

In the coming year, Montenegro should in particular:  

  increase  the  efficiency  of  criminal  investigations  by:  i.  improving  the  access  of  law-
enforcement agencies to key databases and establishing an interoperable system with a single 
search  feature;  ii.  restoring  the  full  use  of  special  investigations  measures  (SIMs),  in  full 
respect  of  constitutional  principles;  and  iii.  increasing  the  number  of  investigators  and 
experts in key areas such as financial investigations, cybercrime, forensic, SIMs. 

  address  the  lengthy  duration  of  trials  and  frequent  adjournments  in  organised  crime  cases; 

43 

 
ensure  a  stronger  mutual  understanding  between  courts  and  the  prosecution  on  some  key 
legal concepts such as money laundering and the quality of evidence; 

  enhance the strategic monitoring of the criminal justice system by establishing a centralised 
database in the area of organised crime and high-level corruption, collected from all relevant 
authorities, for analysis and policy making purposes. 

Institutional set-up and legal alignment 

The  number  of  police  officers  was  reduced  to  4,537,  from  5,400  in  2018.  The  ratio  of  police 
officers  remains  high  at  517/100,000  inhabitants  (for  an  EU  average  of  326/100,000  in  2017 
according to Eurostat), but, unlike most EU Member States, Montenegro includes in the police 
the  border  guards  (1,321  staff  members),  non-operational  staff  such  as  advisors  and  officers 
without police rank.  

The two key institutions in the fight against organised crime, the Special Prosecutor’s Office for 
organised  crime  and  high-level  corruption  (SPO)  and  the  Special  Police  Unit  (SPU)  have 
stabilised  their  staff  around  46  and  32  staff  members  respectively,  including  14  Special 
Prosecutors  in  the  SPO. The  poor  office  conditions,  hampering  the  efficient  functioning  of  the 
SPO, remain unaddressed.  

The  Police  Directorate  was  re-organised  into  eight  departments  in  April  2019.  An  entire 
department is now devoted to the fight against organised crime, encompassing the SPU and four 
other units. It totals 92 positions, of which 70 are currently filled. With clearer lines of command, 
this  department  provides  stronger  and  more  coordinated  resources  in  support  to  SPO-led 
investigations into organised crime. Operational capacity was increased in all departments, some 
functions  were  decentralised  and  the  responsibility  of  regional  police  offices  strengthened. 
However, human resources are still insufficient to cope with the workload in the SPU and other 
key  units.  The  police  needs  more  senior  investigators  for  organised  crime,  drug  smuggling, 
specialists  in  charge  of  special  investigative  measures,  experts  in  cybercrime,  economic  crime 
and forensics.  

The  Administration  for  the  Prevention  of  Money  Laundering  and  Terrorism  Financing  (or 
Financial Intelligence Unit - FIU) was integrated in the police. It has 30 positions, including 17 
dealing  directly  with  cases  (from  10  in  the  previous  FIU).  The  FIU  applied  to  restore  its 
membership in the Egmont Group, which was cancelled when the FIU ceased to exist under its 
previous  legal  form.  In  the  meantime,  Montenegro  uses  judicial  cooperation,  Interpol  and 
Europol communication channels to access to international intelligence on money laundering. 

In April 2019, an Asset Recovery Office (ARO)was formally established within the police. Five 
police  officers  are  entitled  to  process  asset  recovery  requests  sent  by  national  or  foreign 
authorities, to identify and locate criminal assets. They have direct electronic access to some, but 
not all, police and civil databases. To access to other databases, a formal request is needed. The 
ARO acts as a contact point for foreign AROs and for the Camden Asset Recovery Inter-agency 
Network (CARIN), while the Prosecution is responsible for the freezing and recovery of assets. 
Further  alignment  with  the  relevant  EU  acquis,  including  the  direct  access  to  all  relevant 
databases and keeping them up to date (e.g. the national land registry) is needed.  

The legal framework for the fight against organised crime is largely in place and aligned with 
the  EU  acquis.  In  December  2019,  Montenegro  once  again  amended  its  Law  on  prevention  of 
money  laundering  and  terrorism  financing,  in  order  to  reflect  the  changes  in  the  FIU’s 

44 

 
institutional  setting,  and  to  ensure  the  compliance  with  FATF  (Financial  Action  Task  Force) 
recommendations  related  to  FIU's  independence.  However,  the  law  will  need  to  be  amended 
again,  to  address  remaining  shortcomings  and  to  align  it  with  the  5th  EU  Anti-Money 
Laundering Directive. In May 2020, the Committee of experts on the evaluation of anti-money 
laundering  measures  and  the  financing  of  terrorism  (MONEYVAL)  formally  removed 
Montenegro from the fourth round’s regular follow-up process, considering that the country had 
taken sufficient steps to remedy deficiencies that had been identified in 2015.  

Following a Constitutional Court ruling from 2018, a number of Special Investigative Measures 
(SIMs),  that  are  key  for  conducting  criminal  investigations,  are  no  longer  applicable.  The 
prosecution is deprived of using undercover activities or the so-called “controlled delivery” when 
a consignment of drugs is detected and allowed to go forward in order to secure evidence against 
the perpetrators. This seriously hampers the fight against serious and organised crime. Restoring 
a full use of SIMs, in full respect of constitutional principles, should be ensured as a matter of 
priority. 

In the  area of security,  Montenegro  adopted in  October 2019 a  Law on  critical  infrastructures, 
aligning  with  the  EU  acquis  on  the  identification,  designation  and  protection  of  critical 
infrastructures. The list of infrastructures identified as critical for the State security is  yet to be 
determined. The draft Law on internal affairs, which has been under preparation for three years, 
has yet to be adopted.  

Implementation and enforcement capacity 

The  SPO  conducted  31  investigations  targeting  293  people  in  2019.  Some  95  people  were 
indicted for organised crime offences. Final convictions were pronounced regarding 67 people in 
2019,  of  which  62  were  convicted  based  on  plea  bargains.  Sentences  in  the  context  of  plea 
bargains ranged from three months of in-house imprisonment to two years of imprisonment and 
fines from 1,000 to 50,000 euros. In addition, up to 45 investigations were launched in relation to 
serious crime, a large majority of which in the area of drug trafficking; 62 final convictions for 
serious crimes were pronounced, all based on plea bargains, with sentences from three months of 
in-house imprisonment to two years of imprisonment.  

The criminal scene in Montenegro remains dominated by frequent  gang-related murders (up to 
44 gangs-related murders since 2012, including six in 2019 and two in the first three months of 
2020).  Homicides  involving  Montenegrin  criminal  groups  have  also  occurred  abroad  (9  since 
2018) including in Spain, Germany, Austria and Greece. At the same time, the number of arrests 
of members of crime groups reached the unprecedented number of 333 people from 2018 to the 
first quarter of 2020, including 19 arrested abroad. 

In general, the number of investigations and prosecutions for serious and organised crimes has 
increased  exponentially  in  2018-2019  compared  with  2016-2017,  by  respectively  150%  and 
100%.  This  reflects  the  positive  impact  of  the  coordinated  work  of  the  SPO  and  SPU,  an 
increased  capacity  to  address  drug  smuggling,  and  good  international  police  and  judicial 
cooperation. At the same time, the whole criminal justice system needs to become more efficient, 
operational and deterrent, including the way organised crime cases are handled in courts. Court 
proceedings are excessively lengthy, as multiple adjournments are frequent. These long delays, 
but also the lack of trust between the prosecution and the courts, following some controversial 
acquittals in  recent  years, have led to  a widespread use of plea bargains  by the Prosecution. A 
suspected  criminal,  who  becomes  a  cooperative  witness  in  the  investigation,  is  exempted  from 

45 

 
legal  proceedings,  notwithstanding  the  gravity  of  the  offence.  As  a  result,  despite  some 
noticeable  exceptions,  the  criminal  justice  response  appears  generally  lenient,  with  sentences, 
fines and asset confiscations disproportionally low compared with the gravity of the crime.  

Montenegro  needs  to  establish  as  a  matter  of  priority  a  centralised  database  in  the  area  of 
organised  crime  and  high-level  corruption,  collecting  data  from  all  relevant  authorities,  for 
strategic  monitoring  and  policy-making  purposes.  Montenegro  has  a  national  SOCTA  (Serious 
and  Organised  Crime  Threat  Assessment),  but  it  needs  to  be  used  more  strategically  to  guide 
operational priorities in the fight against organised crime. 

The  Ministry  of  Interior  continues  to  work  on  technical  solutions  to  improve  the  access  of 
law-enforcement agencies to key databases. This access is currently insufficient and continues 
to hamper the proactivity and efficiency of investigations. The department in charge of the fight 
against  organised  crime  currently  does  not  have  direct  access  to  Europol’s  SIENA  secure 
communication  channel,  as  the  Europol  contact  point  is  located  in  another  department  of  the 
police, but  this  access  is  being established. A secure communication mechanism established in 
2017 between several key institutions has increased the number of exchanges, but it can be used 
only for low security messages, and it does not include the national land registry and the Central 
Bank.  Only  the  FIU  has  a  direct  and  automatic  access  to  the  Central  Bank’s  databases,  as 
provided  under  the  relevant  EU  acquis.  The  establishment  of  a  single  search  feature  and 
interoperable  databases  are  crucial  to  boost  the  efficiency  of  investigations  and  align  with 
modern EU police practices.  

International  police  cooperation  continued  to  play  a  strategic  role  in  the  fight  against 
Montenegrin  crime  groups,  whose  members  often  live  and  operate  outside  Montenegro.  The 
number  of  communications  (59,337)  exchanged  with  foreign  police  services  through  Interpol 
rose by 40% compared with 2018. The number of communications exchanged through Europol 
reached  4,488,  a  9%  increase  compared  with  2018.  Montenegro  has  an  observer  status  in  the 
European Network of Fugitive Active Search Units (ENFAST), providing support in the search 
of wanted fugitives. In 2019, eight members of Montenegrin crime groups were arrested abroad, 
based on arrest warrants. 18 Montenegrin fugitives are currently targeted by an active search. In 
2019, the cooperation was particularly important with the police services  of Germany, Austria, 
the Netherlands and the United States. Montenegro is actively involved in Europol’s analytical 
and operational projects, which has been instrumental for some successful police operations. It is 
also increasingly participating in the activities under the EU Policy Cycle / EMPACT (European 
Multidisciplinary  Platform  against  Criminal  Threats).  In  2019,  the  number  of  new  cases  in 
Europol  increased by 48% compared with  2018. Montenegro participated in  three Joint Action 
Days  in  2019.  In  2020,  it  co-leads  the  firearms  policy  area  together  with  Spain.  To  further 
enhance  its  cooperation  with  Europol,  Montenegro  is  encouraged  to:  i.  use  SIENA  more 
proactively  by  initiating  requests,  and  to  extend  its  use  to  additional  competent  authorities;  ii. 
participate more often in EMPACT meetings at Europol; iii. participate in additional analytical 
projects in crime areas that are mutually beneficial; iiii. appoint a national EMPACT coordinator. 

Since the signature of a cooperation agreement with CEPOL in 2011, Montenegro has full access 
to  CEPOL  e-learning  activities,  exchange  programme  and  on-site  activities.  CEPOL  national 
contact points, lead managers and exchange coordinators were appointed.  

At  regional  level,  Montenegro  participates  in  the  Western  Balkans  taskforce,  a  regional 
operational platform for investigations into migrant smuggling, under the leadership of Austria. 

46 

 
In November 2019, the Parliament ratified the agreement between the parties to the Convention 
on  police  co-operation  in  South-East  Europe  (PCC  SEE)  on  automated  exchange  of  DNA, 
dactyloscopy  and  vehicle  registration  data.  In  December  2019,  Montenegro  overtook  the 
chairmanship  of  another  police  regional  platform,  the  Southeast  Europe  Police  Chiefs 
Association (SEPCA). 

In 2019, the SPO launched 15 new financial investigations regarding 207 people and 152 legal 
entities, a substantial increase compared with 2018. In the first trimester of 2020, 4 new financial 
investigations  were  launched.  Most  of  them  are  large-scale,  complex  investigations  targeting 
dozens of people and legal entities linked with money laundering, tax evasion, corruption cases, 
and are very resource-intensive for the SPO. Launching a financial investigation in parallel with 
the  criminal  investigation  is  legally  possible  but  remains  limited.  In  most  cases,  financial 
investigations  start  too  late  and  remain  focused  on  tracing  assets,  mainly  with  the  aim  of 
proceeding  to  an  extended  confiscation,  and  therefore  not  in  line  with  EU  practice  and  FATF 
standards. Instead, the Prosecution conducts financial analysis within the criminal investigation 
to evaluate the proceeds of crime, but not on a sufficient scale to prove criminal acts, improve 
knowledge of criminal networks, uncover financial flows and investment of dirty money in the 
economy.  Montenegro  continued  to  strengthen  its  capacity  in  this  area  with  numerous  training 
courses.  Standard  operating  procedures  for  conducting  financial  investigations  were  adopted. 
However, a review of whole approach towards financial investigations, including the legal basis, 
is needed.  

The  number  of  legal  proceedings  for  asset  recovery  and  the  amount  of  assets  recovered 
increased  in  2019.  But  only  in  six  cases  temporary  recovery  orders  were  pronounced  in  2019, 
regarding 120 people, for EUR 4 million and a number of real estate properties. In a high-profile 
corruption  case  involving  the  former  President  of  the  country,  large  real  estate  and  land 
properties were confiscated. In general, due to the limited scope of the financial investigations, 
the amount of seized and confiscated assets is not yet at the expected level. The confiscation of 
asset in equivalent value, when the proceeds of crime itself cannot be reached, does not exist in 
Montenegrin practice. Plea bargains continue to be used to secure asset confiscation. In the last 
four years, EUR 32.5 million were confiscated as a result of plea bargains in organised crime and 
corruption cases. There is no national and standardised system for collecting statistics on frozen, 
seized and confiscated assets data, including their estimated value. Montenegro should urgently 
improve  its  track  record  on  final  confiscation  of  the  proceeds  of  crime  as  a  strategic  policy 
priority in the fight against organised crime. 

In  2019,  and  since  the  establishment  of  the  Asset  Recovery  Office  (ARO)  in  the  police,  37 
requests for verification of 137 individuals and 23 legal entities were received and 103 requests 
for  verification  of  217  individuals  and  80  legal  entities  were  forwarded  to  foreign  authorities.  
The amount of requests remained stable in the first half of 2020. 

The initial track record on money laundering was further developed, reflecting a stronger focus 
and  increasing  capacity  of  law-enforcement  agencies  in  this  area.  There  were  two  final 
convictions  for  money  laundering  in  2019,  both  achieved  through  plea  agreements,  leading  to 
three month and five month-sentences and the payment of fines and compensations up to  EUR 
75,000. Two cases were pending before the court, including the prominent Atlas Bank case, in 
which the former owner of the bank was indicted for abuse of office in April 2019. In July 2020, 
however,  Interpol  cancelled  the  red  notice  warrant  for  the  fugitive  businessperson  under 
investigation in this case. 

47 

 
Ten preliminary investigations and seven investigations into money-laundering were conducted 
in  2019,  regarding  122  entities,  including  one  case  of  a  value  of  EUR  25  million.  One  new 
investigation  and  two  preliminary  investigations  were  launched  in  the  first  trimester  of  2020. 
However,  systemic  deficiencies  continue  to  hamper  the  whole  chain  of  criminal  justice  in 
addressing  money  laundering.  More  stand-alone  cases  should  be  started.  The  police,  the 
prosecutions and the courts should have more trained specialists on money-laundering. Judges’ 
narrow  interpretation  of  the  concept  of  money  laundering,  in  particular  the  link  with  the 
predicate offence,  though the offence of money-laundering aims  precisely  at blurring this link, 
needs to be reviewed. 

In  a  prominent  case,  the  two  suspects  of  laundering  EUR  19  million  coming  from  drug 
smuggling activities, who had been convicted in first instance to 11 years of prison, but acquitted 
in 2017 by an Appeal Court, won court cases against the state  in November 2019 for unlawful 
detention and are entitled to a EUR 103,000 compensation each. 

Montenegro has made some progress in the area of fight against trafficking in human beings. 
The  initial  track  record  was  consolidated  in  2019,  reflecting  a  more  targeted  and  coordinated 
approach  to  detecting  trafficking  offences.  Montenegro  had  11  trafficking  cases  in  2019,  at 
different stages of the procedure, including three cases of trafficking within an organised crime 
group. In two cases the victims were women. One final conviction was pronounced in November 
2019, ordering unprecedented severe prison sentences. Two cases were pending before the court. 
In  January  2020,  a  human  trafficking  network  from  Taiwan  was  unveiled  by  the  Montenegrin 
police, leading to the arrest of 93 people, in the biggest trafficking case in the Western Balkans 
ever. Four new investigations into trafficking in human beings involving 6 people were launched 
at the beginning of 2020.  

The  institutional  capacity  to  address  trafficking  in  human  being  was  strengthened,  under  the 
leadership  of  a  multi-disciplinary  body  monitoring  the  implementation  of  the  anti-trafficking 
strategy.  The  Podgorica  High  Prosecutor’s  Office  continues  oversighting  of  cases  from  lower 
instances  that  could  present  elements  of  trafficking.  The  Ministry  of  Interior  established  a 
department  in  charge  of  victims'  identification  and  referral  and  adopted  standard  operating 
procedures. During the first six months of 2020, 44 people were granted the status of victim, of 
which  43  were  placed  in  specialised  shelters.  16  contact  points  for  victim  identification  were 
appointed  at  local  police  units  and  trained.  A  public  awareness  campaign  was  launched, 
including  a  TV  clip  on  the  risks  of  trafficking.  Twelve  NGOs  benefit  from  state  grants  for 
prevention and protection activities, and one NGO runs a State-funded 24/7 SOS hotline. Efforts 
must  continue  to  consolidate  the  initial  track  record  on  trafficking  in  human  beings,  to 
proactively  identify  victims  of  trafficking  in  human  beings,  to  ensure  assistance  to  victims,  to 
increase  prosecutions  and  convictions  and  to  continue  awareness  raising,  training  and 
coordinating activities.  

In the area of trafficking in weapons, Montenegro seized 990 weapons in 2019, of which 514 
were  firearms.  The  government  continued  to  implement  the  2015-2019  action  plan  on  illicit 
trafficking  in  firearms  between  the  EU  and  the  South  East  Europe  region.  The  focal  point  for 
firearms was established and is operational. It consists in a team of police officers from different 
services, duly trained and equipped prior to  formal appointment. The team is in charge of data 
collection, analysis and exchange within Europol projects and with the Southeast European Law 
Enforcement Centre.   

48 

 
In  the  area  of  cyber  crime,  the  institutional  capacity  was  strengthened.  It  resulted  in  a  50  % 
surge in the number of cases initiated (111 preliminary investigations and 4 investigations were 
launched for a broad range of cyber offences, such as online fraud, hacking, ransoming, selling 
of  counterfeit  goods,  extortion,  hate  speech,  child  pornography).  Human  resources  need  to  be 
further strengthened, as a matter of priority, both in the police and in the prosecution, to address 
the threats of cyber-crime and cyber-enabled crime. 

In  the  area  of  the  fight  against  tobacco  smuggling,  there  was  no  conviction  for  the  organised 
cigarette smuggling in 2019. However, criminal proceedings were conducted on three large-scale 
cases,  including  one  case  involving  22  suspects.  In  another  case  a  well-known  suspected 
smuggler,  who  had  been  sought  for  20  years,  was  arrested.  Seizures  of  illicit  tobacco  are 
regularly performed by the customs, the local or central police. The total amount of seizures in 
2019 was 1,719,000 cigarette packs, amounting to EUR 3.9 million. However, despite increasing 
efforts  of  law-enforcement  agencies  in  this  area,  and  an  improved  cooperation  of  Montenegrin 
customs  with  EU  and  international  partners,  the  number  of  cases  initiated  is  still  insufficient, 
considering  the  estimated  scale  of  tobacco  smuggling  from,  to  and  across  Montenegro. 
Montenegro needs to increase its risk assessment capacity in the area of tobacco smuggling, to 
promote intelligence led policing and proactivity of law-enforcement agencies, and to remedy to 
the systemic deficiencies of the free zone of Bar.  

On witness protection, protection measures were applied to 3 people in 2019 and to 5 people in 
the  first  six  months  of  2020,  in  cases  falling  under  the  competence  of  the  Special  State 
Prosecutor’s Office. Extra-judicial protection measures were implemented regarding 25 people. 

Cooperation in the field of drugs 

Institutional set-up and legal alignment 

Montenegro's  legal,  institutional  and  strategic  frameworks  in  this  area  are  largely  aligned  with 
the  EU  acquis.  However,  on  the  demand  side,  there  was  no  progress  in  addressing  the 
deficiencies  of  the  national  drug  information  system,  in  accordance  with  EU  standards.  The 
National Drug Observatory (NDO) remains understaffed, has limited budget autonomy and does 
not sufficiently fulfil its coordination function.  

Montenegro  provided  for  the  first  time  in  five  years  a  national  drug  report.  However,  despite 
good  technical  and  scientific  capacity  in  the  forensic  laboratory  and  other  institutions  dealing 
with  drug-related  issues,  data  collection  on  drugs  remains  fragmented,  and  does  not  rely  on 
protocols compliant with the EMCDDA standards. The National Early Warning System (NEWS) 
is  not  fully operational.  The recommendations from  a July 2018 report by  the EMCDDA have 
not been addressed. The NDO needs to be strengthened as a matter of priority in order to become 
an  authoritative  source  of  information,  preparing  regular  comprehensive  national  reports  on 
drugs in Montenegro, and providing an evidence-based source for drug-related national policies. 

On the law-enforcement side, the police has two units in charge of drug-related crimes, one for 
petty  drug  smuggling  offences  and  a  second  one  for  organised  drug  trafficking.  The  latter 
consists only of eight staff members, despite the fact that drug smuggling is the main activity of 
Montenegrin  crime  groups,  mainly  operating  outside  the  country.  The  need  for  more 
investigators in this unit, the provision to this unit of a direct access to international channels of 
communication  such  as  SIENA,  and  the  restoration  of  the  full  use  of  special  investigative 
measures  need  to  be  addressed  as  a  matter  of  priority  to  improve  the  law-enforcement’s 

49 

 
efficiency in this area. The fight against drug smuggling is a top priority of the national Threat 
Assessment of Serious and Organised Crime (SOCTA). 

Implementation and enforcement capacity  

2.4 tons of drugs were seized in 2019, of which 2.2 tons of marijuana. Seizures of cocaine and 
heroin have surged by respectively 250% and 1300 % compared with last year, partly reflecting 
international trends. In addition, 39 kg of cocaine and one ton of marijuana were seized abroad, 
as a result of international  investigations. Montenegro participated in  four multi-country police 
operations  involving  Austria,  Slovenia,  Croatia,  Italy,  Germany,  France,  the  United  States, 
Australia, Albania and Serbia.  

The number of drug cases investigated in Montenegro continued to increase in 2019 and the first 
quarter  of  2020,  consolidating  the  trend  of  the  previous  year.  In  2019,  the  number  of 
investigations  into  cases  of  drug  smuggling  rose  to  155,  of  which  five  qualified  for  organised 
crime and 150 for serious crime. In the first quarter of 2020, six new investigations for organised 
drug  smuggling  were  launched.  Eleven  investigations  were  conducted  with  international 
cooperation in 2019, a 175% surge compared with 2018, leading to a number of successful high 
profile operations. In a major international police operation conducted in February 2020, 5.7 tons 
of cocaine  were seized and 7 crew members, including 4 Montenegrin nationals,  arrested on  a 
ship  navigating  from  Venezuela  to  Greece.  The  operation  was  a  result  of  cooperation  between 
the  United  Kingdom,  Serbia,  the  Netherlands,  amongst  other  partners,  and  was  based  on  the 
intelligence  provided  by  the  Montenegrin  police.  Another  complex  international  investigation, 
led by Montenegro, supported by Europol and involving law enforcement agencies from Austria, 
Croatia, France, Portugal,  Serbia and Slovenia, severely  disrupted one of the smuggling  routes 
from  Central  America  to  Europe.  Eight  individuals  were  arrested  in  March  2020  in  several 
countries  after  20  locations  had  been  searched.  In  another  prominent  case,  the  German  police 
seized in the port of Hamburg half a ton of cocaine from a ship sailing under the Montenegrin 
flag and owned by the Bar Shipping-Montenegro Line, a state-owned company. The action was 
conducted  by  the  Montenegrin  police  with  colleagues  from  the  United  States,  Germany  and 
several other European countries.  

Thirty-seven  final  convictions  for  drug  smuggling  associated  with  organised  crime  were 
pronounced,  including  34  based  on  plea  bargains.  Some  126  final  convictions  for  less  severe 
drug offences were pronounced, of which 73 based on plea bargains. The total amount of fines 
and penalties recovered accounted for EUR 178,000. In drug-related cases qualifying as serious 
crimes,  financial  investigations,  seizure  and  confiscation  of  the  proceeds  of  crimes  remained 
rare.  

Some 5 tons of seized drugs  were destroyed by the authorities on 15 June, upon request of the 
High Court, more than two years after the previous destruction. The lack of adequate storage for 
seized drugs and precursors prior to destruction was not addressed. Changes to the criminal law 
which would allow the immediate destruction of the drug to avoid storing it pending trial, while 
keeping evidences and samples, were not addressed. 

Fight against terrorism 

Institutional setup and legal alignment  

Montenegro’s  legal  framework  is  largely  aligned  with  the  EU  acquis.  However,  the  Law  on 
International restrictive measures remains to be amended to be aligned with European standards 

50 

 
on prevention of terrorism financing and to make the system of the targeted financial sanctions 
against terrorists and terrorist organisations more efficient.   

Montenegro has yet to adopt the strategy for the prevention and suppression of terrorism, money 
laundering  and  terrorism,  which  expired  in  2018.  The  strategy  for  the  suppression  of  violent 
extremism  was  adopted  in  February  2020..  Coordination  should  be  enhanced  between  the  two 
policies that are closely interconnected, to avoid overlap and working in silos. 

In  May  2019,  a  multi-disciplinary  mechanism  was  established,  consisting  of  representatives  of 
Ministries  of  Labour,  Health,  Education,  Social  Welfare,  Interior,  police,  local  authorities,  and 
NGOs, to follow up on individual cases where there is a risk of radicalisation leading to violent 
extremism  and  terrorism  and  to  propose  adequate  responses.  A  hotline  to  report  on  risks  of 
violent extremism was set up. Coordination efforts on the prevention of radicalisation need to be 
continued, in particular at local level, to involve all stakeholders in the prevention activities. 

In  November  2019,  Montenegro  and  the  EU  signed  an  arrangement  to  implement  the  Joint 
Action  Plan  on  Counter-Terrorism  for  the  Western  Balkans,  on  which  Montenegro 
submitted its first semi-annual report in August 2020. 

Implementation and enforcement capacity 

The threats of terrorism and violent extremism remained relatively low in the country. As regard 
foreign  fighters, 26 have left  to Syria and five to Ukraine since the beginning of the conflicts. 
Ten  came  back  from  Syria  and  five  from  Ukraine.  Further  to  a  2016  penal  code  amendment 
criminalising  the  participation  in  foreign  armed  conflicts,  two  returnees  who  came  back  after 
2016 were sentenced. All the returnees went back to their communities and are monitored. The 
Ministry  of  Interior  cooperates  with  civil  society  organisations  to  develop  awareness  raising 
activities  amongst  the  youth.  Prison  staff  have  been  trained  on  prevention  work.  A  risk 
assessment  for  the  identification  of  radicalised  prisoners  and  those  that  are  at  risk  of 
radicalisation has been drafted. Means for religious counselling of prisoners were put in place. 

In the 2016 election-day coup attempt case, a first instance decision was pronounced by the High 
Court  of  Podgorica  in  May  2019,  whereby  13  defendants  including  two  Russian  and  eight 
Serbian  citizens  were  found  guilty  of  terrorism,  creation  of  a  criminal  organisation,  and  other 
crimes against the constitutional order. Appeal proceedings are ongoing.  

Montenegro  continued  to  cooperate  closely  with  Interpol  and  Europol  and  to  contribute  to  the 
Terrorism  Risk  Assessment  and  Analysis  for  the  Western Balkans.  Montenegro  is  actively 
participating  in  the  implementation  of  the  Western  Balkan  Counter  Terrorism  Initiative 
(WBCTi).  Cooperation  with  the  EU  Internet  Referral  Unit  (IRU)  at  Europol  for  dealing  with 
terrorist content online has started. Threat assessment needs to be conducted in a more analytical 
and inclusive way, in order to create a common understanding of main threats and risks amongst 
the concerned stakeholders and to prioritise the risks to be addressed. 

Legal and irregular migration 

Institutional set-up and legal alignment 

Montenegro continued to consolidate its legal framework in the area of migration. Following the 
amendments to the Law on Foreigners in December 2018, three additional by-laws were adopted 
in  spring  2019,  in  particular  with  the  goal  to  simplify  the  issuance  of  temporary  residence 
permits for work and seasonal employment, and to prevent unregistered labour migration.  

51 

 
The  EU-Montenegro  readmission  agreement  is  facilitated  by  15  implementing  protocols  on 
readmission with EU Member States, including the implementing protocol signed with Greece in 
March 2019. Montenegro has 10 readmission agreements  with  non EU-countries, including  all 
Western Balkan partners and Turkey, and has finalised the negotiations with Georgia. Requests 
to start readmission negotiations were sent to Pakistan, Iran, Iraq, Morocco and Algeria. 

Montenegro has a contingency plan for possible mass influx of migrants and asylum seekers at 
the borders, adopted in 2015.  

Implementation and enforcement capacity 

Montenegro continued to be an attractive country for labour migration in the Western Balkans, 
with  27,634  work  permits  delivered  in  2019,  a  stable  number  compared  with  2018.  Legal 
migration  is  regulated  by  a  quota  system  established  annually.  Seasonal  workers,  mainly  from 
the Western Balkans, work primarily in the tourism, construction and agriculture sectors. Some 
42,517 temporary residence permits were issued in total.  

The 2018 upward trend in the number of irregular border crossing to Montenegro continued in 
2019.  Some  7,978  migrants  were  apprehended  in  2019,  a  60%  increase  from  2018.  All  of  the 
apprehended migrants expressed their intention to request asylum, which continued to put under 
pressure the centres for asylum seekers, whose capacity was increased to 389 beds. Montenegrin 
authorities prevented 516 illegal entries to the country and 1,514 illegal exits from the country. 
The detention centre for irregular migrants can host up to 50 people. The SPO conducted three 
investigations into migrant smuggling in 2019, involving more than 40 people. Three indictments 
were issued. In four cases final convictions were pronounced regarding 48 people, including 28 
verdicts based on plea bargains.  

In  the  context  of  the  COVID-19  pandemic,  only  six  border  crossing  points  remained  open,  to 
ensure the movement  of goods and the return of Montenegrin  citizens. The entry of foreigners 
was  prohibited.  Foreigners  with  temporary  or  permanent  residence  in  Montenegro  were 
subjected to the same regime as Montenegrin citizens, which did not include a total prohibition 
of  movements.  Irregular  migration  went  down  during  the  first  seven  months  of  2020:  1,583 
migrants where apprehended, while the authorities prevented 153 illegal entries and 258 illegal 
exits. 

Secondary  movements  continued  to  add  to  migratory  flows,  in  particular  those  created  by 
readmissions  from  Bosnia  and  Herzegovina.  In  2019,  Montenegro  accepted  to  readmit  2,213 
third  country  nationals  from  neighbouring  countries  in  the  framework  of  bilateral  readmission 
agreements,  of  which  2,033  from  Bosnia  and  Herzegovina  (a  139%  increase  from  2018). 
Readmission of third country nationals from Montenegro to neighbouring countries increased to 
382 people in  2019, including 350 to  Albania, an improvement compared with  previous  years. 
Bilateral cooperation with Albania on readmission should be further developed. 

Montenegro’s  border  police  still  does  not  have  a  biometric  system  of  registration  and 
identification  of  migrants.  The  risk  of  double  registration  of  migrants  following  secondary 
movements, re-entry and subsequent asylum applications remains a concern. Montenegro should 
establish  an  IT  and  communication  infrastructure  that  has  the  capacity  to  support  an  effective 
identification  and  registration  process  of  mixed  migration  flows  in  line  with  the  EU  standards 
and best practices.   

52 

 
Only 41 voluntary returns from Montenegro took place, including 21 to neighbouring countries, 
processed directly by Montenegro’s border police, and 20 to origin countries, supported by the 
International  Organisation  for  Migration.  The  process  of  voluntary  returns  is  hampered  by  the 
absence  of  consular  missions  of  countries  of  origin  in  Montenegro.  Despite  the  administrative 
obstacles,  a  more  proactive  voluntary  return  policy  should  be  developed  and  necessary  funds 
allocated to mitigate the migration pressure.  

Construction works for an open migration centre in Bozaj, close to the border with Albania, are 
planned. A temporary container settlement on the same site was established with EU assistance 
and opened in July 2020. This created an additional reception capacity for 60 people, adding to 
the existing 329 beds in Spuz and Konik.  

The  EU-Montenegro  readmission  agreement  is  being  implemented  satisfactorily,  with  the 
number  of  readmission  requests  from  EU  Member  States  continuing  to  decline.  Five  hundred 
ninety-five  Montenegrin  citizens  were  ordered  to  leave  the  EU  in  2019.  The  return  rate  was 
59.7%, down from 73% in 2018. Since EU Member States report good cooperation, this decrease 
may be due to the processing of exceptionally large volumes of decisions, a backlog in previous 
years and possibly secondary movements.  

Montenegro must continue its efforts to cope with migratory pressure, by further developing its 
international  cooperation  on  readmission  and  supporting  the  successful  reintegration  of 
returnees, raising its capacity to prosecute migrant smuggling networks, increasing its reception 
capacity and enhancing its migrants’ data collection system. 

Asylum 

Institutional set-up and legal alignment 

The Law on asylum was amended in January 2019 and further aligned with the EU acquis. The 
directorate in charge of integration of people under a protection status, which is  now under the 
Ministry of Interior, was reorganised. In July 2019, new integration measures, including financial 
assistance, language and culture courses, school enrolment for children and job placement were 
developed, but so far, the number of people concerned remained limited.  

A  draft  list  of  safe  countries  of  origin,  aimed  at  accelerating  the  process  of  applications,  was 
adopted in December 2019. It includes the Western Balkan region and Turkey.  

Implementation and enforcement capacity 

Although the number of migrants, expressing their intention to seek asylum, increased compared 
with  2018,  the  number  of  those  actually  lodging  asylum  claims  declined  in  2019.  Only  1,921 
asylum  requests  were  registered,  a  38%  drop  compared  with  2018,  reflecting  an  increased 
mobility and tendency to leave the country even before lodging the asylum request. 9,6% of the 
applicants  were  women  and  89%  were  adults.  34%  of  the  requests  were  lodged  by  Moroccan 
nationals,  followed  by  Algerian  (15%),  Iraqi  (15%)  and  Syrian  (14%)  nationals.  Most  of  them 
left  the  country  before  the  end  of  the  procedure.  This  trend  was  confirmed  during  the  first  7 
months of 2020, with only 394 asylum requests lodged. 

Despite the relatively small number of asylum seekers who actually remained in the system, the 
number of requests actually processed remains limited. Between January 2019 and March 2020, 
out of 77 cases where the applicant actually showed up at the interview, only 29 final decisions 
were  taken.  Twenty-four  applications  were  cancelled  due  to  the  applicant’s  departure  from  the 

53 

 
country,  while  24  are  still  in  process.  A  number  of  interviews  were  postponed  for  technical 
reasons.  Seven  people  were  granted  an  international  protection  status  from  January  2019  to 
March  2020,  including  six  refugee  status  based  on  family  reunification  grounds,  and  only  one 
subsidiary  protection  status  resulting  from  the  request’s  own  merit.  Twenty-one  appeal  claims 
were lodged at the Administrative court. Due to the COVID-19 pandemic, interviews of asylum 
seekers  were  suspended  in  April  and  May  2020.  They  resumed  in  June  after  the  interview 
premises had been equipped with the relevant protection equipment. 

For the second year in a row, Montenegro’s reception capacity was under pressure. 7739 people 
in total were accommodated in 2019, a 73% surge compared with 2018, mainly for short stays, 
overstretching the system to its limits. 4,5% of them were women. The asylum centre in Spuz, of 
a capacity of 104 beds, is generally used for families and women, while the alternative centre in 
Konik, of a capacity of 225 beds, hosts single men. It is private-owned facility rented out to the 
asylum  authorities  at  expensive  commercial  price.  71%  of  the  asylum  seekers  stayed  in  the 
alternative  centre,  where,  despite  recent  improvements,  the  standards  still  do  not  match  the 
standards of a fully-fledged asylum centre. Between January and April 2020, 1197 migrants were 
accommodated  in  the  reception  facilities.  As  from  March  2020  preventive  hygiene  and 
disinfection measures were applied in all the centres to prevent the spread of COVID-19. 

The budget of the asylum system rose to EUR 1.7 million in 2019 (a twofold increase compared 
with  2018),  66%  of  which  was  spent  on  the  alternative  reception  centre.  Reception  costs  are 
entirely paid from Montenegro’s budget, with no external support.  

The  number  of  people  under  a  protection  status  currently  living  in  Montenegro  dropped  to  28 
people. Nine persons out of 12 adults are working. Language courses are being delivered. Civil 
servants  have  limited  opportunities  to  gain  operational  experience  in  the  implementation  of 
integration measures, due to the small numbers of people of concern.  

Although  Montenegro’s  asylum  system  has  continued  to  demonstrate  its  resilience  in  a  very 
tense  context,  efforts  should  be  continued  to  improve  the  status  determination  process,  further 
strengthen  the  reception  capacity,  and  rationalise  costs  of  accommodation  in  the  alternative 
centre. 

Visa policy 

Montenegro’s visa policy is not fully aligned with the one of the EU, including with the EU list 
of  countries  whose  nationals  require  a  visa  and  those  exempt  from  this  requirement.  Under  its 
tourism  development  policy,  Montenegro  still  exempts  nationals  from  Russia,  Armenia, 
Kazakhstan,  Azerbaijan,  Belarus,  Cuba,  Ecuador,  Kuwait  and  Turkey  from  short-term  visa 
requirements - either on a seasonal basis for tourism purposes or permanently.  The impact that 
these exemptions have on migratory flows is closely monitored, and no irregular migration from 
the  countries  concerned  have  been  observed  so  far.  The  European  Commission’s  third  Report 
under  the  Visa  Suspension  Mechanism  of  July  2020  concluded  that  Montenegro  continues  to 
meet the visa liberalisation benchmarks. However, in order to ensure a well-managed migration 
system  and  security  environment,  Montenegro  will  need  to  ensure  full  alignment  with  the  EU 
visa policy. 

Montenegro  has  now  31  consular  missions  connected  through  the  national  Visa  Information 
System. Three visas were issued at border crossing points in 2019, under conditions that were in 
line  with  the  EU  acquis.  In  the  framework  of  the  post-visa-liberalisation  process,  Montenegro 

54 

 
continued to implement relevant measures to prevent abuse of the visa-free regime with the EU 
and  reported  on  it  on  a  monthly  basis.  The  number  of  first  time  asylum  applicants  from 
Montenegro  in  EU  Member  States  and  Schengen  associated  countries  remained  low,  with  225 
applications lodged in 2019 (down from 380 in 2018).  

Schengen and external borders 

Institutional set-up and legal alignment 

The Status Agreement with the EU, providing for the deployment of European Border and Coast 
Guard  teams  with  executive  powers  along  Montenegro’s  borders  with  the  EU,  was  ratified  by 
both  sides  and  entered  into  force  on  1  July  2020.  After  Albania,  this  is  the  second  such 
agreement  to  enter  into  force.  The  agreement  paves  the  way  for  closer  cooperation  between 
Montenegro and Frontex, including more opportunities for the transfer of good EU practices. A 
first  Joint  Operation  under  the  Agreement  was  launched  on  15  July  and  started  with  the 
deployment of an EBCGA/Frontex officer to a border crossing point on the border with Croatia. 

Montenegro’s  legal  framework  was  further  aligned  with  the  relevant  EU  acquis  through  the 
adoption of amendments to the Law on border control in March 2019 and with the establishment, 
in  April  2019,  of  a  National  Coordination  Centre  (NCC),  a  key  body  to  improve  the  country-
wide  situational  awareness,  risk  assessment  capacity  and  the  ability  to  respond  to  crises.  The 
Director  was  appointed,  the  equipment  was  partly  delivered  and  most  of  its  planned  23  staff 
members were recruited. However, the NCC is yet to become fully equipped and operational. 

The 2014-2018 strategy on Integrated Border Management (IBM) was extended to 2019. A new 
IBM  strategy  for  2020-2024,  encompassing  the  new  European  IBM  concept  was  adopted  in 
February  2020.  The  number  of  positions  in  the  border  police  is  1,364,  of  which  1,321  are 
recruited.  However,  according  to  the  Schengen  action  plan,  600  more  border  police  officers 
would be needed. The Advance Passenger Information System (API) is not operational.  

Implementation and enforcement capacity 

Montenegro continued to strengthen its border management capacity through numerous training 
activities,  TAIEX  support,  and  the  purchase  of  equipment.  However,  the  number  of  illegal 
entries prevented dropped to 516, from 1309 in 2018. Some 115 forged documents were seized. 
Material  and  human  resources  remain  insufficient  to  cope  with  the  challenges  of  land  and  sea 
border  surveillance.  Border  police  participation  in  combating  and  investigating  cross-border 
crime  should  be  increased.  Cooperation  with  neighbouring  countries  in  border  management  is 
good. Joint patrols with all neighbouring countries were conducted, with a significant increase of 
joint  patrols  with  Albania.  A  demolition  plan  for  the  30  alternative  cross-border  roads  with 
Serbia was signed in March 2019, and started to be implemented. All the 14 alternative roads on 
the Montenegrin side were closed. In June 2020, an agreement with Bosnia and Herzegovina was 
signed  on  joint  border  crossing  points.  In  2019,  39,644  joint  inspections  were  carried,  713 
requests for information were processed by both joint cooperation centres of Plav and Trebinje.  

In  May  and  June  2019,  Montenegro  participated  in  two  large-scale  joint  cross  border  police 
operations, Tuzi II and Sukobin I, at the Montenegrin-Albanian border, involving nine countries 
from  the  region  and  from  the  EU.  Montenegro  played  a  positive  role  promoting  the  Sea  Gate 
initiative  to  address  the  challenges  of  the  Adriatic  high-risk  zone  for  cross-border  crime,  thus 
creating  a  common  situational  awareness  and  operational  response  to  common  threats. 
Montenegro also continued to cooperate actively with Europol, Interpol and the European Border 

55 

 
and Coast  Guard  Agency  (Frontex) on countering  cross-border criminal  activities. Montenegro 
participates in the Western Balkan Risk Analysis Network under the aegis of Frontex. 

In  the  context  of  the  COVID-19  pandemic,  all  but  six  border  crossing  points  were  closed  for 
international road, railway or waterway traffic (including border crossing at airports). As of 16 
March, all commercial flights were cancelled until 9 June. After 2 June, the borders were open 
for the countries with less than 25 active COVID-19 cases per 100,000 citizens. 

Montenegro  needs  to  continue  to  strengthen  its  capacity  in  border  management,  prevention  of 
cross-border crime and corruption at borders.  

Judicial cooperation in civil and criminal matters 

As regards judicial cooperation in criminal matters, Montenegro continued to align its legislative 
framework with  the relevant  EU  acquis  through  amendments  to  the  Law  on international  legal 
assistance  in  criminal  matters.  The  amendments  regulated  the  establishment  of  Joint 
Investigation Teams (JITs) and revised the extradition procedures. Montenegro is encouraged to 
participate in JITs where required. In September 2019, the government adopted amendments to 
the Additional Protocol to the Convention on the transfer of sentenced persons. Montenegro has 
a well-established cooperation with Eurojust. There were 12 cases involving Montenegro opened 
in  Eurojust  in  2019,  mostly  related  to  money  laundering,  swindling  and  fraud.  10  cases  were 
requested by EU Member States and two cases by Montenegro. There are two Eurojust contact 
points in the country. 

In the area of judicial cooperation in civil matters, amendments aligning the Law on enforcement 
and security of claims and the Law on civil procedure with the EU acquis were adopted in April 
and  June  2019  respectively.  Montenegro  is  still  not  a  party  to  the  2007  Protocol  to  the  Hague 
Convention  on  International  recovery  of  child  support  and  other  forms  of  family  maintenance, 
relating  to  maintenance  obligations,  or  to  the  2000  Hague  Convention  on  the  International 
protection of adults. 

The volume of judicial cooperation remained stable compared with last year, with 1,036 cases of 
mutual  legal  assistance  in  criminal  matters  and  867  cases  in  civil  matters.  The  main  partners 
remained  the  Western  Balkans  and  the  EU  Member  States.  Montenegro  has  yet  to  complete  a 
review of its administrative and budgetary capacity in judicial cooperation to address the needs 
in this area.  

Counterfeiting of the euro (criminal law aspects) 

There were four cases of money counterfeiting investigated by law enforcement agencies in 2019 
and six court decisions, including five resulting in prison sentences. 

56 

 
3. 

FUNDAMENTALS FIRST: ECONOMIC DEVELOPMENT AND COMPETITIVENESS 

In line with the conclusions of the European Council in Copenhagen in June 1993, EU accession 
requires the existence of a functioning market economy and the capacity to cope with competitive 
pressure and market forces within the Union. 

Economic governance has become even more central in the enlargement process in recent years. 
The Commission's monitoring  takes place in  two processes: the Economic Reform Programme 
exercise and the below assessment of compliance with the economic criteria for accession. Each 
enlargement country prepares an Economic Reform Programme (ERP) annually, which sets out 
a medium-term macro-fiscal policy framework and a structural reform agenda aimed at ensuring 
competitiveness  and  inclusive  growth.  The  ERPs  are  the  basis  for  country-specific  policy 
guidance jointly adopted by the EU and the Western Balkans and Turkey at ministerial level in 
May each year. 

3.1.  The existence of a functioning market economy 

Montenegro  has  made  some  progress  and  is  moderately  prepared  in  developing  a 
functioning market economy. Due to lower investment growth, the economy slowed down to 
a  more  sustainable  pace  in  2019.  Exports,  in  particular  of  services,  were  growing  but  not 
enough  to  curb  the  large  current  account  deficit.  Financial  sector  stability  has  been 
reinforced following the bankruptcy and resolution of two local banks and the strengthening 
of  the  banking  supervision  framework.  Labour  market  conditions  improved,  but  the 
unemployment  rate  remains  high.  Labour  activation  measures  and  coordination  between 
employment and social services recorded limited progress. Montenegro’s economic outlook 

57 

Table :201720182019Montenegro - Key economic figuresGDP per capita (% of EU-28 in PPS)1)41.546.048.049.0Real GDP growth 2.04.75.13.6Economic activity rate of the population aged 15-64 (%), total1)60.463.564.766.2      female54.156.557.259.1      male66.770.572.373.3Unemployment rate (%), total1)19.016.415.515.2      female18.817.215.315.9      male19.015.715.615.0Employment (annual growth %)1.12.13.22.6Nominal wages (annual growth %)0.82.00.10.8Consumer price index (annual growth %)1.72.82.90.5Exchange rate against EUR1.01.01.01.0Current account balance (% of GDP)-13.5-16.1-17.0-15.2Net foreign direct investment, FDI (% of GDP)12.111.36.97.0General government balance (% of GDP)-5.1-5.3-3.9-2.0General government debt (% of GDP)57.263.370.177.2Notes: 1) EurostatSource: national sources2011-16 average 
 
deteriorated  substantially  since  the  second  quarter  of  2020,  as  the  COVID-19  quarantine 
measures introduced in April brought large parts of the economy to a halt. Public finances, 
which improved in 2019, are under significant pressure in 2020 due to fast growing costs to 
finance  the  authorities’  policy  response  to  the  pandemic  combined  with  a  sharp  decline  in 
budget  revenue  due  to  lower  economic  activity.  Meanwhile,  in  spite  of  some  signs  of 
improvement  of  the  business  environment,  measures  to  fight  against  informality  were 
delayed  and  there  is  a  persistent  and  very  large  number  of  companies  with  frozen  bank 
accounts.  State-owned  transport  companies  are  not  competitive  and  their  losses  are  being 
transferred  to  the  state.  The  institutional  capacities  of  the  competition  and  anticorruption 
agencies remain weak. 

In order to improve the functioning of the market economy, Montenegro should in particular: 

  use  the  available  fiscal  space  to  mitigate  the  crisis-induced  impact  on  growth  and 

employment; 

  provide public guidance on the implementation of laws that affect businesses and ensure 

that the guidance is consistently followed by the public administration; 

  advance restructuring and privatisation of loss-making public companies, respecting EU 

state-aid rules; 

  reduce the tax wedge for low-income earners. 

Economic governance 

The EU accession process remains an important economic policy anchor for Montenegro. 
There  is  broad  support  in  Montenegro  for  integration  with  the  EU  and  therefore,  to  align  its 
legislative  framework  and  practices  with  the  EU.  Over  the  past  year,  Montenegro  adopted 
important  pieces  of  legislation  concerning  the  labour  market,  credit  institutions,  public 
procurement  and  state  administration.  However,  weak  institutional  capacities  and  insufficient 
coordination  between  public  institutions,  and  in  particular  between  central  and  local  levels, 
continue  hindering  the  effective  formulation  of  economic  policy  and  its  implementation.  
Montenegro’s  Economic  Reform  Programme  provides  a  comprehensive  formulation  of 
economic  policies,  but  policy  implementation  is  often  subject  to  ad-hoc  decisions.  The  policy 
guidance  jointly  adopted  in  May  2019  in  the  context  of  the  Economic  and  Financial  Dialogue 
between  the  EU  and  the  Western  Balkans  and  Turkey  has  been  partially  implemented. 
Montenegro confirmed its first cases of COVID-19 infections on 17 March 2020. On 19 March, 
the  government  adopted  a  first  package  of  measures  to  help  the  economy  to  deal  with  the 
consequences  of  the  COVID-19  crisis.  Measures  consisted  of  deferral  of  tax  obligations,  a 
moratorium  on  loan  repayments,  and  the  provision  of  credit  lines  to  help  companies  improve 
their liquidity. Authorities adopted a second economic package on 9 April, and a third one on 23 
July,  including  subsidies  for  business  and  employees.  The  international  community  also 
contributed  to  support Montenegro’s  efforts  in  tackling  the  COVID-19  pandemic.  On  25  May, 
the  European  Parliament  and  the  Council  adopted  a  decision  on  providing  macro-financial 
assistance (MFA) of up  to  EUR 60 million  to  help  Montenegro cover part  of residual  external 
financing needs, to enhance macroeconomic stability and mitigate the negative socio-economic 
consequences of the pandemic, complementing assistance by International Financial Institutions, 
such  as  the  International  Monetary  Fund  (IMF)  through  rapid  financing  instrument  (RFI) 
assistance. 

58 

 
Macroeconomic stability 

Already  before  the  COVID-19  crisis,  economic  activity  has  started  to  slow  as  investment 
growth  declined  markedly.  After  strong  real  GDP  growth  in  2017  and  2018,  the  rate  of 
economic expansion decelerated to 3.6% y-o-y in 2019. The deceleration reflects a slowdown in 
investment as large infrastructure projects were completed. Meanwhile, private consumption has 
become  the  main  driver  of  growth,  boosted  by  a  strong  tourism  performance,  growing 
employment and increasing household loans. Fiscal consolidation efforts continued, resulting in 
a  marginal  contribution  of  government 
consumption  to  growth.  On  the  external 
side, exports grew more than twice as fast 
as  imports,  reducing  the  drag  of  net 
exports  on  growth.  On  the  supply  side, 
2019  was  marked  by  a  poor  industrial 
the 
performance, 
the 
manufacturing 
tourism  and  construction  sectors  grew  by 
double  digits.  The  effect  of  past  years’ 
strong GDP growth is reflected in gradual 
the  EU: 
real 
Montenegro’s  GDP  per  capita  (in  purchasing  power  standards)  climbed  to  49  %  of  the  EU-28 
average  in  2019,  up  from  41%  six  years  earlier.  However,  the  economy  is  set  to  contract 
substantially in 2020. According to the Commission forecast, GDP would decline markedly due 
to the negative effects of the COVID-19 outbreak. Montenegro’s economy is strongly dependent 
on  tourism,  a  key  source  of  GDP  growth,  foreign  exchange,  employment  and  fiscal  revenues. 
The  lockdown  imposed  by  the  quarantine  brought  the  economy  to  a  standstill  as  from  mid-
March. However, GDP growth remained positive in the first quarter of 2020, expanding by 2.7% 
y-o-y, but decelerating compared to the 3.1% expansion recorded in the previous quarter. 

particular 
in 
sector,  whereas 

convergence  with 

in 

the 

increase 

Strong  domestic  demand  and  a  high  import-dependence  continued  to  fuel  a  very  large 
current  account  deficit.  In  2019,  the  current  account  deficit  totalled  15.2%  of  GDP,  a 
substantial  increase  compared  to  a 
10.1%  of  GDP  gap  recorded  in  2015. 
Despite 
of 
faster 
merchandise  exports,  the  trade  deficit 
expanded  by  2  percentage  points  over 
the  last  five  years,  to  42.1%  of  GDP, 
reflecting  a  highly  import-dependent 
economy  and 
the 
the 
investment  cycle.  Surpluses  in  the 
balances of services, largely driven by 
the strongly growing tourism sector, as 
well  as  in  primary  and  secondary 
income, helped contain the external deficit. Net FDI inflows amounted to 7% of GDP in 2019, 
declining from 16.9% of GDP in 2015, covering less than half of the current account deficit. The 
current account deficit remained flat, also at 15.2% of GDP, in the four quarters to March 2020. 
The  Central  Bank  released  in  June  2019  (for  the  first  time)  data  on  external  debt  and  the  net 

impact  of 

59 

-30-20-100102020152016201720182019Graph : Montenegro -Current account selected components and FDIGoods and services trade balancePersonal TransfersCurrent account balanceNet FDI% of GDPSource: IMFand Central Bank of Montenegro  
international  investment  position  (NIIP),  estimated  at  165%  and  -169%  of  GDP  at  the  end  of 
2018, respectively. 

Inflation decelerated in 2019 and early 2020. Inflationary pressures have remained low in the 
period 2014-2019, except for some moderate price increases in 2017 and 2018. The inflationary 
effects from the increase of VAT and excise rates and electricity prices in 2018 faded quickly in 
2019,  when  average  annual  inflation  was  only  0.5%.    Food  prices  drove  inflation  in  2019,  but 
their  impact  has  been  largely  offset  by  the  decline  of  prices  for  oil  derivatives,  garments, 
communication, and tobacco. Consumer prices fell by 0.3% y-o-y in the first half of 2020, down 
from  a  growth  of  0.5%  in  the  same  period  a  year  earlier.  Transport  prices  were  the  main 
disinflationary  factor,  adding  downward  pressures  on  electricity  prices  too.  In  spite  of  the 
increase of the minimum wage in the second half of the year, salaries increased marginally (by 
real 0.3% y-o-y) in 2019. Wage growth accelerated in the first half of 2020 by 2.3% y-o-y in real 
terms.  The  increase  was  driven  by  the  retail,  manufacturing  as  well  as  public  health  and 
education sectors. 

Significant  underspending  in  public  investment  and  recovery  of  tax  arrears  reduced  the 
budget deficit. The budget balance improved considerably in the last two years thanks to fiscal 
measures introduced since 2017. The budget deficit narrowed to 2% of GDP in 2019, down from 
3.9%  a  year  earlier  thanks  to  improved  tax  revenue  collection.  Sustained  economic  activity 
boosted VAT proceeds by 12.8% y-o-y, while efforts of the tax administration to reschedule tax 
arrears contributed to a rise in revenues from direct taxes and social security contributions. The 
new 
local 
boosted  municipalities’ 
governments 
revenue by 18.9% y-o-y, resulting in a 1% 
of  GDP  surplus 
their  aggregated 
in 
budget.  On  the  expenditure  side,  capital 
spending  accelerated  at  the  end  of  the 
year  but  missed  the  annual  target  by 
2.5%.  By  contrast,  current  expenditure 
grew  by  5.5%  above  the  plan,  driven  by 
other  (current)  capital  expenditure  and 
repayment of state guarantees.  

framework  of 

financing 

The  2020  budget,  adopted  on  27 
December  2019,  introduced  a  series  of  ad-hoc  expenditure  increases  totalling  2%  of  GDP, 
including a 9% increase in public health and education salaries, extra funds for the purchase of 
medicines,  writing-off  debts  owed  by  the  national  air  carrier  and  the  carryover  of  underspent 
funds  for  the  highway  construction.  Moreover,  the  lack  of  progress  with  the  public 
administration  optimisation  plan,  hindered  by  the  absence  of  proper  functional  analyses  and 
registers across the public sector, prevented savings on wage bill in the 2020 budget. Overall, the 
2020  budget  targeted  a  deficit  of  1%  of  GDP,  well  below  the  fiscal  rule  ceiling  of  3%,  but  a 
noticeable deviation from the 0.2% surplus planned in the 2019 Economic Reform Programme 
(ERP). However, the COVID-19 derailed budget plans, confronting public finances with a triple 
shock: the collapse of tax revenue due to the interruption of economic activity, a sudden surge of 
healthcare expenditure, and the need to finance support measures to preserve the economy. Only 
the  more  pressing  medical  needs  to  respond  to  the  pandemic  are  estimated  at  1.2%  of  GDP, 
while the first two sets of measures in support of the economy are estimated to cost some 3.6% 

60 

 
of  GDP.  In  the  first  half  of  2020,  the  central  government  deficit  expanded  to  4.4%  of  GDP, 
reflecting  the  rapid  (7.5%  y-o-y)  growth  in  expenditures  combined  with  a  sharp  (9.3%  y-o-y) 
decline  in  revenues.  On  June  24  2020,  Montenegro’s  parliament  adopted  a  budget  revision 
reflecting  the  lower  income  and  higher  spending  due  to  the  COVID-19  pandemic.  The 
rebalanced budget sets the deficit at 7.3% of GDP. 

The  public  debt  ratio  continued  to  increase  from  an  already  high  level,  partly  due  to 
liability  management  operations,  and  more  recently,  by  the  large  financial  cost  of  the 
pandemic. Following the adoption of the new medium-term debt management strategy in April 
2018, the government has more actively managed its public debt portfolio. In September 2019, 
the government sold EUR 500 million worth of Eurobonds in order to refinance debt maturing in 
2020,  pushing  the  gross  debt  stock  up  to  77.2%  of  GDP  at  the  end  of  2019.  The  budget 
rebalanced  adopted  in  June  2020,  also  increased  the  annual  debt  ceiling  to  accommodate 
emergency loans provided by international institutions, including the European Commission. The 
rebalanced budget foresees public debt to reach 82.5% of GDP in 2020. 

Overall, the absence of monetary policy tools due to Montenegro’s use of the euro as legal 
tender, requires fiscal and structural policies to focus on enhancing stability and economic 
resilience.  Fiscal  imbalances,  which  have  been  exacerbated  by  debt-financed  investments  and 
emergency  measures  in  support  of  the  economy  during  the  pandemic,  are  set  to  ease  once  the 
first  section  of  the  Bar-Boljare  highway  is  completed  and  the  economy  returns  back  to  full 
capacity.  However,  fiscal  consolidation  targets  have  been  derailed  and  public  debt  ballooned, 
exhausting the fiscal space that could be used to stimulate growth. Overall, emergency measures 
adopted  by  the  government  to  preserve  the  economy  during  the  COVID-19  crisis  were  timely 
and adequate, but also  costly. In the absence of monetary policy, further structural reforms are 
needed to increase the economy’s flexibility and its capacity to recover from the adverse shock. 

Functioning of product markets 

Business environment 

Parts  of  the  regulatory  business  environment  recorded  some  improvement,  but  contract 
enforcement  remains  relatively  weak.  In 2019, the government  started  implementing various 
measures aimed at improving the efficiency of state administration, reduce the costs and shorten 
administrative procedures. Thus, the law on administrative fees and the law on local communal 
fees  abolishes  49  taxes  and  reduces  the  tax  rate  of  another  72.  So  far,  one  quarter  of  local 
municipalities  are  yet  to  implement  these  two  laws.  The  new  public  procurement  law  has  the 
potential  (pending  the  adoption  of  secondary  legislation)  to  create  a  more  transparent  system 
aligned  to  a  large  degree  with  the  EU  acquis.  The  government’s  electronic  portal  (eUprava) 
currently provides 249 e-services, most of them informational. Work is  in progress  concerning 
the development of the e-cadastre, as some procedures cannot be completed online yet. The large 
number  of  indebted  companies  represents  a  challenge.  Montenegro  compares  favourably  with 
OECD  countries  in  terms  of  time  and  cost  to  resolve  insolvency  (for  instance,  it  takes 
approximately 1.4 years in Montenegro to complete liquidation proceedings with an average cost 
of 8% of the estate, compared to the OECD’s average of 1.8 years and 1.6% cost of the state). 
However,  some  owners  prefer  deserting  the  firm  and  open  a  new  one  benefiting  from  the 
simplicity  and  low  registering  cost.  There  are  more  than  18,000  companies  and  entrepreneurs 
with frozen bank accounts due to unpaid claims totalling EUR 648 million or 13.5% of GDP. Up 
to  20%  of  these  firms  are  bankrupt  or  inactive.  The  bailiff  system  remains  the  key  pillar  for 

61 

 
enforcement of debt claims, with 26,600 cases  filed in the first half of 2019 (of which, 17,917 
still pending), compared to just 380 cases referred for out-of-court mediation in the same period. 
In 2019, the Tax Administration introduced 590 petitions for bankruptcy of indebted companies. 

Measures  to  fight  against  informality  have  been  delayed.  Montenegro  is  confronted  with 
several  key  obstacles  in  the  fight  against  informality,  such  as  weak  enforcement  capacity, 
corruption and a high regulatory burden. Inspectors cannot access the private premises of natural 
persons where informal activities are suspected, unless there is evidence of a criminal offense. A 
new law on inspections was adopted by the government in January 2020, but failed to remediate 
this  issue.  In  July  2019,  the  parliament  adopted  the  law  on  fiscalisation  of  trade  of  goods  and 
services  to  introduce  the  electronic  fiscal  invoice  system  for  real-time  transfer  of  data  from 
businesses’  terminals  to  the  tax  administration,  supporting  the  fight  against  the  informal 
economy.  However,  the  law  was  amended  in  December,  postponing  its  implementation  to 
January  2021  due  to  delays  with  the  acquisition  of  software  and  adoption  of  secondary 
legislation. The Special Prosecutor’s Office continues investigating several cases of corruption, 
but  efforts  need  to  be  stepped  up  to  improve  the  rule  of  law  (See  Chapter  23  –  Judiciary  and 
fundamental rights). 

State influence on product markets 

State  aid  is  largely  concentrated  in  state-owned  transport  companies.  In  2019,  the  state 
budget earmarked EUR 32 million (0.7% of GDP) for subsidies, or EUR 5 million higher than a 
year before. Around half of this aid was assigned to the struggling Montenegro Airlines, which 
has  already  benefited  from  several  support  measures  in  the  past.  On  27  December  2019,  the 
parliament  adopted  a  lex  specialis  recognising  Montenegro  Airlines  as  a  company  of  special 
importance, granting additional state support of EUR 155 million in the next six years to avoid 
its  bankruptcy  and  ensure  its  future  development  (see  also  Chapter  8  –  Competition).  Other 
public corporations benefitting from state aid are the railway operator (ZPCG) and Montenegro’s 
Maritime company receiving state aid worth EUR 9.4 million and EUR 5 million, respectively in 
2019. Such state aid measures should be notified, analysed and decided upon by the Agency for 
Protection  of  Competition  (APC)  Council  before  they  are  implemented.  Support  to  local 
companies  for  modernisation  and  adoption  of  international  standards  is  growing.  In  2019,  307 
companies received support from the government, compared to 101 firms in the year before. Yet, 
the  amounts  disbursed  by  these  grant  programmes  remain  relatively  modest  (a  few  thousand 
euros per firm). In order to attract investment, the ministry of finance and local governments also 
provide  tax  exemptions  for  new  investments.  Soon  after  the  outbreak  of  the  COVID-19 
pandemic,  the  government  adopted  a  series  of  measures  aimed  at  supporting  businesses  and 
employees  to  mitigate  the  economic  impact  of  the  pandemic.  By  the  end  of  April,  more  than 
1,300 companies in Montenegro, whose business has been affected by the lockdown, had applied 
for  government’s  subsidies.  In  July,  the  government  announced  a  third  pack  of  measures  to 
support the payment of wages of 25,000 workers in 3,500 companies, with an estimated cost of 
EUR 18 million by the end of 2020. 

Price  formation  is  liberalised  with  a  few  exceptions.  Montenegro’s  regulatory  agency  sets 
electricity  prices  for  households  using  as  a  reference  power  market  the  Hungarian  energy 
exchange HUDEX (the only regional exchange where electricity futures are traded). Fuel prices 
are updated in accordance with their fluctuations on international oil market and the euro/dollar 
exchange rate in case these parameters exceed 5%. 

62 

 
Privatisation and restructuring 

Efforts  have  been  made  to  attract  private  investors  through  concessions,  while  the 
electricity  company  returned  to  state  hands.  In  October  2019,  the  government  called  a  pre-
qualification  tender  for  a  30-year  concession  on  its  two  international  airports  (Podgorica  and 
Tivat),  to  attract  a  major  international  investor  to  modernise  them  and  boost  tourism.  Three 
companies  and  one  consortium  were  pre-qualified  to  take  part  in  the  tender.  However,  the 
process  for  awarding  the  concession  stalled,  because  one  of  the  qualified  bidders  purchased  in 
the  meantime  another  of  the  qualified  bidders,  breaching  the  concession  tender  rules  due  to 
overlapping  ownership.  The  port  of  Bar  sold  in  November  2019  one  hotel  in  order  to  finance 
new  equipment  for  its  port  terminals.  Following  the  reorganisation  of  the  tourism  company 
Budvanska  Rivijera,  preparation  of  the  sale  process  is  underway.  The  government  has  set  as  a 
priority the reform of the energy sector to  improve its competitiveness  and integration into the 
regional electricity market. In December 2019, the government completed the re-nationalisation 
of the electric power company (EPCG), acquiring 88.6% of its shares, while EPCG itself retains 
around 10% of shares.  

Functioning of the financial market 

Financial stability 

The stability of the financial system has improved but the COVID-19 will challenge asset 
quality and profitability of banks. Credit growth plunged in early 2019, though it was largely a 
statistical  issue,  reflecting  the  bankruptcies  of  two  small  local  banks,  and  the  removal  of  their 
assets  from  the  financial  sector’s  statistics.  Lending  activity  recovered  in  the  third  quarter  of 
2019, to reach 4.5% expansion at the end of the year. Credit growth remained stable in the first 
half  of  2020,  expanding  by  4.7%  y-o-y.  Overall,  the  sector  appears  stable,  liquid  and  well 
capitalised.  The  sector-wide  solvency  ratio  reached  17.7%  at  the  end  of  2019,  well  above  the 
statutory  minimum  of  10%,  while  the  ratio  of  non-performing  loans  (NPLs)  to  total  loans  has 
been reduced to 4.70% in 2019, but raised to 5.26% in June 2020. Profitability indicators remain 
positive. In 2019, the aggregate return on assets and on equity were 1.2% and 9.0%, respectively.  

The strong liquidity position of the banks before the COVID-19 crisis helps mitigate some of the 
negative  effects  from  the  declining  of  liquid  assets.  In  March  2020,  the  Central  Bank  of 
Montenegro  introduced  a  90-day  moratorium  on  the  repayment  of  loans  in  order  to  support 
consumers  and  domestic  companies  during  the  lockdown  period.  This  measure  will  have  a 
negative  effect  on  the  liquidity  and  profits  of  Montenegrin  banks.  However,  the  pandemic 
represents  a  challenge  for  the  financial  sector  due  to  the  negative  impact  on  asset  quality  and 
bank  profitability,  exacerbated  by  the  possibility  of  reprogramming  loans  after  the  end  of  the 
moratorium period, and the cost of the contribution of the financial sector to mitigate the effects 
of the crisis on the economy. On 29 July 2020, the EBRD provided a EUR 50 million stand-by 
credit line to the Deposit Protection Fund of Montenegro in order to secure adequate funding to 
protect  retail  and  corporate  clients’  bank  deposits  of  up  to  EUR  50,000  per  depositor.    On  25 
June 2020 the ECB set up a new backstop facility, the Eurosystem repo facility for central banks 
(EUREP). This facility will be available for one year to address pandemic-related euro liquidity 
needs of central banks outside the euro area, including Montenegro. 

Access to finance 

High  interest  rates  and  indebtedness  of  local  companies  are  two  major  obstacles  to  gain 

63 

 
access  to  finance.  Bank  lending  to  private  sector  grew  by  nominal  27.5%  over  the  last  five 
years,  recording  very  weak  growth  until  2018  while  the  economy  grew  at  a  faster  pace.  As  a 
result, private sector credit declined as a share of GDP, from 64.8% in 2014 to 58.6% in 2019, 
raising to 60.4% of GDP in June 2020. However, The demand for new loans has decreased by 
35%  year  on  year  since  the  outbreak  of  COVID-19  (in  March  until  mid-July.  The  most 
significant decrease was registered for cash loans, followed by mortgage loans and credits used 
for preparations for the tourist season. Meanwhile, commercial banks have restructured EUR 75 
million worth of loans. As part of the measures aimed at supporting economy amid the pandemic 
crisis,  the  Central  Bank  of  Montenegro  introduced  a  moratorium  on  loan  repayments  for  six 
months, resulting in a 50 % fall in commercial banks’ profits. The bankruptcies of two domestic 
banks and the acquisition of another by the largest bank reduced the number of banks to thirteen, 
which is still high compared to the size of the market. Eight of these banks are majority-owned 
by large EU banking groups, representing 79.7 % of financial sector assets. The large number of 
companies  with  frozen  bank  accounts  due  to  unpaid  debts,  as  well  a  limited  coverage  of  the 
credit register, remain key obstacles to credit supply. Due to high credit risks, interest  rates on 
loans  (6.76%  in  June  2020)  remain  relatively  high,  representing  a  barrier  for  many  small  and 
medium  enterprises.  In  order  to  support  SMEs,  the  Investment  and  Development  Fund  along 
with some international financial institutions provide a series of bank guarantees and soft loans 
to  entrepreneurs.  However,  large  and  profitable  companies  are  disproportionately  benefiting 
from  this  support  (or  finance  investment  from  internal  sources),  while  SMEs  resort  to  more 
expensive  trade  credit  due  to  their  difficulties  in  accessing  bank  loans.  In  order  to  help 
companies  to  improve  their  liquidity  during  the  2020  pandemic  the  Investment  Development 
Fund  set  some  specific  credit  lines,  while  the  European  Investment  Bank  and  European 
Investment Fund provided additional support through credit lines and guarantees to Montenegrin 
banks to facilitate credit to SMEs. 

The size of the non-bank financial sector remains very small. The stock market’s role in the 
local economy is marginal in terms of market turnover, while the assets of insurers and micro-
financial institutions both represent around 1.5% of GDP. 

Functioning of the labour market 

Economic  growth,  reform  of  social  benefit  schemes  for  mothers  and  support  for  young 
unemployed  helped improve labour market conditions. The unemployment  rate (population 
aged  15-64)  averaged  15.2%  in  2019,  after  evolving  at  around  18.2%  five  years  earlier. 
However, challenges persist, in particular the low activity rate of women and young people, and 
high  long-term  unemployment.  In  December  2019,  a  new  labour  law  was  adopted.  The  new 
legislation  is  expected  to  provide  more  flexibility  by  shortening  procedures,  simplifying 
dismissal  procedures,  facilitating  the  use  of  fixed-term  contracts  and  the  deployment  of 
employees  outside  the  employers’  premises  (e.g.  telework)..  Protection  of  workers  is  also 
reinforced  in  the  new  law,  introducing  the  obligation  of  a  written  contract  prior  to  work. 
Sanctions  for  undeclared  work  are  also  more  severe,  with  a  view  to  reducing  informality.  The 
halt of economic activity introduced in March 2020 to contain the spreading of COVID-19 had a 
negative impact on the labour market. The unemployment rate rose to 17.4% in April, up from 
15.3% in March and 16.4% a year earlier. 

64 

 
The 

up-skilling. 

Active  labour  market  policies  need  to 
improve and put more emphasis on re- 
and 
Public 
Employment Service’s capacity for job 
(i.e.  400 
remain  weak 
mediation 
jobseekers  for  every  staff  member  of 
the Employment Agency, compared to 
the  100:1  ratio  recommended  by  the 
International  Labour  Organisation 
(ILO))  to  provide  targeted  services. 
Despite a 2 pps reduction in July 2019 
of social security contributions, and the 
expiry  of  the  2 pps  “crisis  tax”  for  above-average  wages  as  of  January  2020,  the  tax  wedge 
remains  relatively  high,  especially  for  low-wage  earners,  generating  disincentives  to  hire  and 
work, particularly at the lower end of income distribution. Skills mismatch persists for persons 
with vocational education training and higher education attainment. Geographical disparities are 
also  large  and  affect  negatively  and  disproportionately  the  northern  region.  In  May  2019,  the 
government raised the minimum wage by 15%. As a result, wages recorded some modest annual 
growth of 0.8% in 2019, while preserving local companies’ competitiveness. 

3.2.  The capacity to cope with competitive pressure and market forces within the Union 

Montenegro  has  made  some  progress  and  remains  moderately  prepared  in  terms  of  its 
capacity  to  cope  with  competitive  pressure  and  market  forces  within  the  EU.  Investment  in 
knowledge  and  human  capital  is  very  modest,  resulting  in  low  innovation  and  productivity 
levels of local companies. Educational outcomes need to improve across the board, as well as 
the  provision  of  upskilling  and  reskilling  measures.  Several  important  infrastructure  projects 
are  being  implemented,  gradually  transforming  Montenegro  into  a  net  exporter  of  electricity 
and developing transport networks. Physical broadband networks are being developed by the 
private  sector  while  the  authorities  strengthened  the  legislative  framework.  However,  the 
economy  presents  a  weak  industrial  base  characterised  by  low  value-added  activities, 
constrained by the small size of the market and the low technological know-how of most local 
companies. 

In order to improve competitiveness and long-term growth, Montenegro should in particular: 

  improve  the  quality  and  labour  market  relevance  of  education,  in  particular  at  secondary 

and vocational education levels; 

  make sound cost-benefit analysis an integral part of public investment management. 

Education and innovation 

While  Montenegro’s  enrolment  ratios  are  high,  there  is  an  issue  with  the  quality  of 
education. In 2017, Montenegro’s youth education attainment level (i.e. the proportion of 20-24 
year  olds  who  have  achieved  at  least  an  upper  secondary  level  of  education)  stood  at  95.1%, 
compared to 83.3% in the EU-28. However, 32.4% completed a tertiary level in 2018 while the 
EU-28  ratio  was  39.9%.  The  2018  PISA  report  shows  there  are  significant  gaps  in  education 
quality.  Montenegrin  15-year-old  students  attaining  Level  2  or  higher  in  mathematics,  reading 
and science are 20-percentage points lower than the OECD’s average. Moreover, skills mismatch 

65 

 
persists  for  persons  with  vocational  education  training  and  higher  education  attainment.  While 
the youth unemployment rate improved, it remains high at 22.3% in 2019. Overall, educational 
outcomes need to improve across the board in line with market needs to improve employability. 

Investment  on  research  and  development  (R&D)  is  improving.  In  2018,  R&D  investment 
increased  to  0.50%  of  GDP.  Yet,  most  of  the  investment  comes  from  the  public  sector.  Only 
2.2%  of  Montenegrin  SMEs  invest  in  R&D  (compared  to  22%  on  the  regional  level). 
Meanwhile, government support is gradually increasing. A new science and technology park is 
being established in Podgorica, while the one in Niksic (Tehnopolis) is already operational with 
29 tenants, with equipment of its three laboratories being completed. Efforts are also invested in 
so-called soft measures (training, mentoring, intellectual property, etc.), activities which rely to a 
large  extent  on  EU  funds.  However,  the  programmes  are  fragmented  and  often  fail  to  attract 
sufficient  interest  from  SMEs.  A  Smart  Specialisation  strategy  was  adopted  in  June  2019  and 
received a conditionally positive assessment by the European Commission services in December 
2019. 

Physical capital and quality of infrastructure 

Montenegro is making substantial efforts to upgrade its infrastructure. The interconnection 
of  the  electricity  network  with  Italy  was  established  in  November  2019  and  contributed  to  the 
completion  of  the  national  electricity  transmission  ring,  strengthening  the  robustness  of 
electricity supply, and setting the basis for extending it to  neighbouring  countries. Montenegro 
made progress in diversifying its electricity production towards renewable sources, with several 
wind, solar and hydropower projects underway. Montenegro as part of the Transport Community 
Treaty benefits from the opening of its permanent secretariat in September 2019, and continues 
to  participate  in  the  Western  Balkans  6  Connectivity  Agenda.  Notwithstanding  the  expected 
completion of the first section of Bar-Boljare highway in 2021, the highway remains incomplete. 
Any decision on building further sections needs to be based on a proper environment and social 
impact  assessment,  a  sound  cost-benefit  analysis,  a  necessary  precondition  for  developing  a 
financing plan that preserves the stability of public finances. Several national and regional roads 
have  been  upgraded  with  the  support  of  international  financial  institutions.  Rail  infrastructure 
requires further upgrading to unlock fully the potential of the port of Bar. The developments of 
telecommunication networks largely rely on the private sector. Fixed broadband services, and in 
particular the optical fibre sector, has shown strong growth, albeit mainly in the main towns. In 
the first nine months of 2019, the number of fibre connections has increased by 24%, totalling 
34%  of  all  fixed  broadband  connections.  Although  98.6%  of  Montenegrin  enterprises  use 
computers, only 18% of them have Internet connections equal or faster than 100 Mbit/s. In order 
to  align  with  EU  environmental  standards,  water  distribution  networks  and  waste  treatment 
plants are being constructed in several municipalities. 

Sectoral and enterprise structure 

The  economy  remains  service-oriented,  while  the  manufacturing  base  is  small.  Services 
remain predominant, accounting for 72% of total gross value added (GVA). The development of 
tourism, energy and transport infrastructure supports construction activity, which represents 7% 
of GVA. Recently, manufacturing’s share in GVA has registered a slight decline, accounting at 
present  for  some  5%  of  GVA.  Among  subsectors,  aluminium  used  to  dominate  the  industrial 
landscape, with a 40% share of merchandise exports in 2011. At present, it accounts for 15%. In 
the  past,  Montenegro  experienced  persistent  trade  deficits  in  electricity.  Following  the  drop  in 

66 

 
aluminium production and the development of new power capacities, the situation has reversed, 
with  electricity  registering  positive  trade  balances  since  2018.  Bauxite, wood,  oil  products  and 
pharmaceutical  are  other  industrial  sectors  recording  growth.  However,  their  low  value  added 
means  that  they  cannot  offset  the  much  higher  value  of  imported  products.  The  small  size  of 
local  companies  limits  output  performance.  In  Montenegro,  only  29  companies  can  be 
considered  large  (i.e.  having  more  than  250  workers,  turnover  above  €50  million  and  assets 
greater than €43 million), and one third of these are not involved in exports. 

Economic integration with the EU and price competitiveness 

Trade integration with the EU increased in the last years. Total  bilateral  trade between the 
EU and Montenegro  grew only  marginally  (+0.7%) between 2018 and 2019 to  a total  of EUR 
1.38  billion.  However,  over  the  last  10  years  bilateral  trade  has  grown  by  61%  and  the  EU 
remains  Montenegro’s  first  trading  partner  accounting  for  46%  of  total  trade  (37%  of  total 
exports and 47% of total imports of goods). This compares to 26% of total trade with CEFTA. 
The  overall  trade  balance  is  in  favour  of  the  EU,  and  increased  slightly  in  2019  to  EUR  1.06 
billion. However, this is somewhat offset by Montenegro’s significant trade surplus in services 
of EUR 375 million, which is almost entirely due to growth in tourism. The EU also remains the 
main source of FDI inflows for Montenegro, and its share has increased over time, accounting in 
2019  for  43.6%  of  total  inflows,  compared  to  39.4%  in  2014.  Montenegro  has  very  few 
industries integrated in international production markets and even the existing ones are at a very 
basic level in the value chain (mostly basic metals, rolling bearings and bauxite ores). 

Trade openness has increased thanks to services. Montenegro is a relatively open economy. 
While merchandise exports have stagnated in the last ten years at around 10% of GDP, services 
exports (boosted by tourism) have kept rising, from 29.7% of GDP in 2014 to 37.1% of GDP in 
2019. Total exchange of goods and services has grown from 100.1% of GDP in 2014, to 109.5% 
of GDP in  2019.  In the context  of the euroised economy and low inflation  in  the main trading 
partners, the potential for price competitiveness gains is limited. The real effective exchange rate 
appreciated marginally over the last 5 years. 

4. 

GOOD NEIGHBOURLY RELATIONS AND REGIONAL COOPERATION  

Good neighbourly relations and regional cooperation form an essential part of Montenegro’s 
process  of  moving  towards  the  EU.  They  contribute  to  stability,  reconciliation  and  a  climate 
conducive to addressing open bilateral issues and the legacies of the past. Montenegro remains 
committed to regional cooperation and plays an active role in building a more stable and secure 
region through participation in around 35 regional organisations and initiatives, such as CEFTA, 

67 

 
 
Energy  Community,  Transport  Community,  SEECP  and  the  Regional  Cooperation  Council. 
Montenegro  took  over  the  chair  of  the  Western  Balkans  Fund  and  the  Regional  Youth 
Cooperation Office (RYCO) strengthened its role in the country.  

Furthermore,  within  the  Presidency  of  the  Adriatic-Ionian  Initiative  (AII)  and  the  EU  Strategy 
for  the  Adriatic-Ionian  Region  (EUSAIR),  Montenegro  hosted  a  meeting  of  the  Ministers  of 
Foreign Affairs of the AII and the EUSAIR Forum in Budva in May 2019. Partnership Status of 
Montenegro at the Organisation of the Black Sea Economic Cooperation (BSEC) was renewed. 
Montenegro took over the chair of the South-Eastern Europe Health Network (SEEHN) and for 
one-year the Center for  Security Cooperation (RACVIAC).  In January 2020, Montenegro took 
over  the  one-year  chairmanship  of  the  Central  European  Initiative  (CEI)  which  organised  an 
extraordinary virtual meeting of the CEI Heads of Government in May 2020, resulting in a Joint 
Statement emphasising cooperation, confidence and solidarity as the most effective responses to 
the COVID-19 pandemic.1 

During  the  COVID  crisis,  inclusive  regional  cooperation  has  proven  to  be  essential.  The 
establishment of green lanes within the region has proven the capacity of the region to address 
common  challenges  swiftly  and  efficiently.  Inclusive  regional  organisations  -  the  Regional 
Cooperation  Council,  the  Transport  Community,  and  the  CEFTA  -  have  been  instrumental  in 
responding  to  the  COVID-19  crisis.  These  achievements  need  to  be  turned  into  sustainable 
improvements. 

Concerning the implementation of the multi-annual action plan (MAP) for the development of a 
Regional Economic Area (REA) in the Western Balkans, there have been achievements, despite 
the persisting challenges. In this regard, the adoption of overdue decisions in the framework of 
CEFTA in Tirana in December 2019 has been positive. Montenegro is advised to continue with 
the  implementation  of  all  MAP  REA  aspects  to  reap  the  benefits  of  the  economic  potential  of 
regional  economic  integration.  This  process  is  based  on  the  EU  acquis,  and  the  EU  accession 
process, which are mutually reinforcing.  

Building on the results of the previous summits with the region, the Western Balkans summit in 
Poznan in July 2019 focussed on strengthening regional cooperation in the fields of economy and 
trade, 
the  digital  agenda,  connectivity,  security,  fight  against  corruption,  promoting 
reconciliation  and  youth.  The  summit  endorsed  a  number  of  achievements  in  these  fields,  in 
particular, the Clean Energy Transition Declaration signed in Podgorica, the e Regional Roaming 
Agreement  signed  in  Belgrade,  a  substantial  connectivity  package  and  the  Roma  Integration 
Declaration.   It  was  also  the  occasion  to  kick-start  the  preparation  of  a  Green  Agenda  for  the 
Western Balkans.  

At the Zagreb Summit on 6 May 2020, EU and Western Balkans Leaders agreed that deepening 
regional  economic  integration  has  to  be  a  prominent  part  of  recovery  efforts  of  the  Western 
Balkans. To do so, Montenegro needs to play a constructive role in building a common regional 
market, which will be critical in increasing the attractiveness and competitiveness of the region. 
It will help Montenegro to speed up the recovery from the aftermath of the pandemic – notably 
to  attract  investors  looking  for  diversification  of  supply  and  shorter  value  chains.  Such  a 

1  Montenegro also participates in the  ‘Brdo-Brijuni process’, the European  Common  Aviation  Area, the  Regional 
School of Public Administration (ReSPA), etc. 

68 

 
                                                 
common regional market has to be inclusive, based on EU rules and built on the achievements of 
the regional economic area multiannual action plan. 

Montenegro  continued  to  closely  cooperate  with  Bosnia  and  Herzegovina,  Croatia  and  Serbia 
under the Sarajevo Declaration Process aiming at sustainable solutions for some 74 000 people 
who became refugees and displaced persons as a result of the armed conflicts in ex-Yugoslavia 
during the 1990s.  Within the framework of the Regional Housing Project (RHP), in 2019, eight 
new  projects  aimed  at  resolving  the  sustainable  housing  needs  for  681  vulnerable  refugee 
families  in  Montenegro  were  approved.  Four  projects  were  completed,  providing  housing 
solutions  to  381  families  in  Niksic,  Podgorica,  Pljevlja  and  Berane.  The  four  ongoing  projects 
are expected to be completed by 2021, meeting the housing needs of 190 additional families.  

Good  progress  has  been  registered  since  the  establishment  of  the  Missing  Persons  Group  in 
November 2018. This group enhanced cooperation and increased effectiveness in accounting for 
missing  persons,  including  further  exchanges  of  information  on  potential  gravesites  and 
excavations, launch of a public regional database, and further updates for representatives of the 
families of the missing persons. Montenegro signed a Protocol of cooperation on the process of 
search for missing persons with Bosnia and Herzegovina in October 2019. The number of cases 
in  Montenegro  is  currently  51  (2018:  57),  39  persons  are  being  searched  for  in  Kosovo,  nine 
persons in Bosnia and Herzegovina and three persons in Croatia. 

As regards bilateral relations, a number of high-level visits took place between Montenegro and 
other  enlargement  countries  and  neighbouring  EU  Member  States.  Montenegro  has  signed 
bilateral conventions on regional cooperation under the Stabilisation and Association Agreement 
with  all  partners  with  an  SAA  in  force.  In  May  2019,  a  trilateral  protocol  establishing  a 
demarcation border point shared by Serbia, Bosnia and Herzegovina and Montenegro was signed 
in Sarajevo. 

Relations with Croatia remained good overall, despite some bilateral issues. There have been no 
developments  regarding  the  pending  border  demarcation  between  Montenegro  and  Croatia. 
Croatian  President  and  Minister  of  Foreign  and  European  Affairs  paid  separate  visits  to 
Podgorica in June 2020. 

Relations  with  Italy  remained  good.  Montenegro  opened  Honorary  Consulates  in  Trieste  and 
Bologna  in  June  2019.  During  the  coronavirus  pandemic,  Montenegro  offered  to  host  seniors 
from  Lombardy,  in  homes  for  the  elderly,  on  the  Montenegrin  seaside  upon  opening  of  the 
borders. 

Relations  with  Albania  remained  good  with  some  further  improvement  in  infrastructure  and 
cross-border cooperation. Maritime delimitation between the two countries remain pending. The 
first meeting of the Interstate Commission for water management was held in September 2019. 

Relations  with  Bosnia  and  Herzegovina  remained  good.  In  October  2019,  the  two  countries 
signed a Protocol on the non-statutory trafficking of the persons and a Protocol on cooperation in 
search of missing persons, creating the necessary legal  preconditions  for  addressing one of the 
key issues in their bilateral relations.  

Relations with Kosovo remained good. Montenegro fulfilled the obligation to conclude bilateral 
agreements  with  all  countries  having  the  SAA  with  the  EU,  by  signing  the  Cooperation 
Agreement  with  Kosovo 
in 
Gjilan/Gnjilane. 

in  March  2019.  Montenegro  opened  a  consular  office 

69 

 
Relations with North Macedonia remained good. A Joint Session between governments, held in 
Podgorica at the end of May 2019, saw the signing of a number of agreements: Agreement on the 
Mutual Protection of Classified Information; Protocol of Collaboration between the Ministries of 
Interior in the Area of European Integration; Agreement on Environmental Cooperation between 
the  Ministries  of  Tourism  and  a  Memorandum  of  Understanding  in  Healthcare  between  the 
Ministries of Health. President of Montenegro visited North  Macedonia and Prime Minister of 
North Macedonia Montenegro in the autumn 2019. 

Bilateral  relations  with  Serbia  were  marked  by  tensions.  The  December  2019  adoption  of  the 
Law  on  the  freedom  of  religion  or  belief  and  legal  status  of  religious  communities  triggered 
protest  rallies  in  Serbia.  Good  development  has  been  however  recorded  in  the  recognition  of 
trusted  services  whereby  agreements  on  mutual  recognition  of  electronic  identification  and 
authentication  provided  in  Montenegro  and  mutual  recognition  of  qualified  trust  services 
provided in Serbia were signed at the Digital Summit in Belgrade in April 2019. There have been 
no developments on issues related to citizenship rights in the two countries. 

Relations with Turkey remained good. A number of agreements relating to trade in services were 
signed, supplementing the 2008 Free Trade Agreement: cooperation in the field of scholarships 
grants, culture and military-financial cooperation. In October 2019, the fifth session of the mixed 
commission  for  economic  cooperation  between  Montenegro  and  Turkey,  together  with  a 
Business  Forum,  was  held  in  Podgorica.  The  Montenegrin  Foreign  Minister  visited  Turkey  in 
September  2019.  During  the  reciprocal  visit  of  his  Turkish  counterpart  to  Montenegro  in 
February  2020,  an  agreement  on  providing  consular  assistance  was  signed,  providing  for 
consular emergency assistance to Montenegrin nationals in countries where Montenegro has no 
diplomatic or consular presence. Turkey donated to Montenegro personal protective equipment 
and  testing  material  for  coronavirus  during  the  pandemic.  Montenegro  opened  a  Consulate  in 
Istanbul in January 2020. Montenegrin authorities were pressured to extradite an alleged member 
of the Gülen movement. 

5.  

5.1 

ABILITY TO ASSUME THE OBLIGATIONS OF MEMBERSHIP  

Chapter 1: Free movement of goods  

The  free  movement  of  goods  ensures  that  many  products  can  be  traded  freely  across  the  EU 
based  on  common  rules  and  procedures.  Where  products  are  governed  by  national  rules,  the 
principle of the free movement of goods prevents these creating unjustified barriers to trade. 

Montenegro is moderately prepared in the area of free movement of goods. Limited progress 
was made; while there was some improvement on EU  acquis alignment in this area during the 
reporting  period,  last  year’s  recommendations  were  not  fully  or  adequately  addressed,  and  are 
therefore reiterated below.  

In the coming year, Montenegro should in particular:  

  ensure that sufficient human and financial resources are allocated to its market surveillance, 
standardisation and accreditation bodies, and for the European Regulation on  Registration, 
Evaluation,  Authorisation  and  Restriction  of  Chemicals  (REACH),  in  order  to  ensure  the 
implementation of aligned legislation;  

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  ensure that the Institute for Standardisation of Montenegro  (ISME) become a full member of 
the  European  Committee  for  Standardisation  (CEN)  and  of  the  European  Committee  for 
Electrotechnical Standardisation (CENELEC); 

  continue to  align with  the EU  acquis, as  foreseen in  the action plan for alignment with  the 

acquis in this chapter. 

General principles 

Overall,  Montenegro  continues  to  progress  on  its  alignment  with  the  EU  acquis  on  the  free 
movement of goods, as laid down in the national action plan for alignment with the acquis in this 
chapter.  However,  progress  has  been  slower  than  foreseen.  As  a  response  to  COVID-19,  upon 
the  joint  initiative  of  the  Permanent  Secretariat  of  the  Transport  Community  and  the  CEFTA 
Secretariat,  Montenegro,  along  with  all  the  other  governments  in  the  Western  Balkans,  has 
successfully implemented measures to facilitate the transport and trade of essential goods within 
the region. 

Non-harmonised area 

Montenegro  continued  to  implement  its  action  plan  for  compliance  with  Articles  34-36  of  the 
Treaty for the European Union (TFEU) during the reporting period. 

Harmonised area: quality infrastructure 

Human and financial resources remain an issue for the market surveillance, standardisation and 
accreditation bodies. Between April 2019 and end May 2020 the Institute for Standardisation of 
Montenegro (ISME) adopted 2,370 standards aligned with EU standards. ISME planned to join 
CEN/CENELEC  in  2019,  but  this  was  postponed  to  2020.  Also  as  a  response  to  COVID-19 
crisis, and with the approval of CEN, CENELCEC and ISO, ISME gave temporary free access to 
standards  for  personal  protection  equipment,  medical  devices,  risk  management,  safety  and 
durability, management of business continuity, risk and emergency situations. 

The Metrology Bureau was relocated to new premises in July 2019 following the expiry of the 
lease  on  the  previous  building,  which  meant  that  it  had  to  renew  its  laboratory  accreditation. 
Work is ongoing to regain the laboratory’s accreditation status and return to full operations. The 
Metrology  Bureau  has  42  staff  out  of  the  49  to  which  it  is  officially  entitled  under  its  new 
systematisation act, which was adopted in May 2019. 

On market surveillance, the amended Law on consumer protection, adopted in November 2019, 
further  improved  alignment  with  the  EU  acquis.  Some  7,083  product  inspections  were  made 
between  April  2019  and  end  May  2020  (including  918  inspections  following  consumer 
complaints).  Inspectors  identified  3,115  irregularities,  which  led  to  administrative  measures 
(consisting  of  882  indictments  and  2,233  decisions).  Cooperation  between  the  market 
surveillance  authorities  and  the  customs  administration  was,  with  increased  joint  surveillance 
performed  in  some  sectors,  notably  for  products  posing  a  serious  risk  to  consumers,  based  on 
data gathered from its observation of the EU’s RAPEX rapid alert system. 

On product safety, Montenegro reported that 6,124 inspections were made, 5,113 in proactive 
surveillance  and  1,011  in  reactive  surveillance,  identifying  822  dangerous  products  (42,211 
items). Of these, 386 products (9,450 items) were classified as dangerous, representing a serious 
risk  and  were  withdrawn  from  the  market,  while  106  products  (1  685  items)  were  destroyed. 
Administrative measures were imposed accordingly.  

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The Accreditation Body of Montenegro, which is a full member of the European Cooperation 
for Accreditation (EA), granted seven new accreditations to conformity assessment bodies (two 
inspection bodies, four testing laboratories and one laboratory for medical examinations). In the 
same  period,  two  accreditations  previously  granted  were  withdrawn,  leaving  41  conformity 
assessment bodies overall. 

Harmonised area: sectoral legislation 

On  ‘new  and  global  approach’  product  legislation,  Montenegro  adopted  legislation  partly 
aligned with the EU acquis on medical devices, addressing the conditions for manufacturing, the 
sale  of  medical  devices,  and  their  conformity  with  technical  requirements.  It  also  adopted 
legislation  designed  to  align  with  the  EU  acquis  on  cableways,  eco-design,  and  construction 
products. The new rules will make Euro codes obligatory from mid-2020. 

On ‘old approach’ product legislation, Montenegro enhanced its alignment with the EU acquis 
on cosmetic products, as well as on medicinal products for human use and medicinal products for 
veterinary  use.  Montenegro  adopted  legislation  designed  to  further  align  to  some  areas  of  the 
acquis  on  chemicals,  including  on  biocides  and  to  align  to  annexes  I  &  XIII  of  the  REACH 
Regulation. Human and financial resources need to be reinforced for REACH-related bodies. In 
July 2019, the national plan for the implementation of the Stockholm Convention was adopted, 
along with the 2019 – 2023 action plan.  

On  drug  precursors,  Montenegro’s  list  of  controlled  substances  is  designed  to  be  compliant 
with  the  EU  acquis.  Montenegro  has  mechanisms  in  place  to  detect  smuggled  drug  precursors 
and  requires  economic  operators  to  report  suspicious  orders  or  transactions  in  line  with  EU 
procedures;  however,  national  legislation  remained  only  partly  aligned.  On  good  laboratory 
practices, national legislation is designed to be aligned with the EU acquis. 

On procedural measures, Montenegro amended its Law on the protection of cultural property, 
which  is  designed  to  align  with  the  EU  acquis  on  the  return  of  cultural  objects  unlawfully 
removed from the territory of a Member State. 

5.2 

Chapter 2: Freedom of movement for workers  

Citizens of one Member State have the right to work in another Member State and must be given 
the same working and social conditions as other workers.  

Montenegro has  some level  of preparation  in  this  area, registering  some progress  during the 
reporting  period  on  implementing  access  to  the  labour  market  and  the  European  Health 
Insurance Card, resulting from the EU support project on social security schemes and the chapter 
2 action plan. 

In the coming year, Montenegro should in particular:  

  continue  to  establish  structures  and  develop  administrative  capacity  to  implement  the  EU 
acquis in line with the results of the EU support project on social security schemes and the 
chapter 2 action plan. 

In March 2019, the government adopted an action plan to meet the accession requirement on the 
freedom of movement for workers.  

On access to the labour market, amendments were adopted to the Law on foreigners, and to the 
Decision determining the annual quota for temporary residence and work permits for foreigners, 

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allowing  for  simplified  procedures.  Procedures  are  in  preparation  for  handling  foreigners’ 
requests  for  temporary  residence  and  seasonal  employment  permits  through  Montenegro’s 
representations in countries of origin. 

On preparations to join the European network of employment services (EURES) upon accession, 
the  Department  for  EURES  and  International  Employment  Mediation  within  Montenegro’s 
Employment Agency fulfilled its recruitment plan by filling all five planned posts.  

On the coordination of social security systems, the bilateral agreement with Romania on social 
insurance  is  yet  to  be  signed,  and  amendments  to  those  with  Serbia  and  with  Bosnia  and 
Herzegovina are to be concluded. In total, 25 bilateral agreements are already in force, of which 
16 with EU Member States.  

The  European  Health  Insurance  Card  (EHIC)  is  recognised  under  the  Law  on  health 
insurance. The card will, however, be introduced in Montenegro only after accession. As part of 
its accession preparations, in 2019 Montenegro carried out an impact assessment on introducing 
the card after accession. Before accession, Montenegro will also  need to  carry out  a feasibility 
study  of  EHIC  on  public  finances.  The  Health  Insurance  Fund  started  recruiting  coordination 
staff in some of its regional units. 

5.3 

Chapter 3: Right of establishment and freedom to provide services  

EU natural and legal persons have the right to establish themselves in any Member State and to 
provide  cross-border  services.  For  certain  regulated  professions,  there  are  rules  on  mutual 
recognition of qualifications. Postal services are gradually being opened up to competition.  

Montenegro  remains  moderately  prepared  in  this  area.  Some  progress  was  made  during  the 
reporting  period  through  further  alignment  with  the  EU  Services  Directive  and  preparatory 
activities  for  the  establishment  of  a  point  of  single  contact,  while  there  was  no  progress  on 
electronic company registration.  

In the coming year, Montenegro should in particular:  

  continue inter-ministerial coordination and fully align with the EU Services Directive;  

  establish a fully operational point of single contact; 

  implement the required electronic systems for the electronic company registration. 

On the right of establishment and freedom to provide cross border services, further progress 
remains  to  be  made  on  full  electronic  company  registration.  Alignment  of  sectoral  legislation 
with the EU Services Directive continued. Establishment of a point of single contact, as provided 
for  in  the  EU  Services  Directive,  progressed  in  accordance  with  the  relevant  action  plan. 
However, progress is hampered by the limited administrative capacity of the services department 
in the Ministry of Economy. 

On postal services, the legislation is  aligned with  the EU Postal Services Directive. While the 
postal  services  market  remains  fully  open  to  competition,  Montenegro  should  further  align  its 
legislation  with  the  EU  acquis,  including  with  the  Regulation  on  cross-border  parcel  delivery 
services. Preparations have started on an action plan for the postal development strategy 2021-
2022. 

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On  the  mutual  recognition  of  professional  qualifications,  Montenegro  reached  a  satisfying 
level of alignment with the EU acquis. Secondary legislation was adopted pertaining to the Law 
on the recognition of foreign qualifications for regulated professions. Implementation continued 
under  the  national  plan  to  develop  qualifications  for  regulated  professions.  A  follow  up  of  the 
foreseen measures is necessary to ensure a continuous alignment with EU acquis. 

5.4 

Chapter 4: Free movement of capital  

In  the  EU,  capital  and  investments  must  be  able  to  move  without  restriction  and  there  are 
common  rules  for  cross-border  payments.  Banks  and  other  economic  operators  apply  certain 
rules to support the fight against money laundering and terrorist financing. 

Montenegro is moderately prepared in this area. In line with last year’s recommendation, some 
progress  was  made  on  the  legal  framework  relating  to  the  fight  against  money  laundering, 
resulting in the formal removal of Montenegro from the fourth round’s regular follow-up process 
of  MONEYVAL,  the  Council  of  Europe’s  Committee  of  Experts  on  the  Evaluation  of  Anti-
Money Laundering Measures. 

Some  progress  was  also  made  on  the  capacity  to  prevent  and  detect  money  laundering.  Last 
year’s recommendations remain valid.  

In the coming year, Montenegro should still:  

  align with the EU acquis on capital movements and payments, including on the acquisition of 

property rights and on payment systems; 

  update  the  strategic  framework  on  the  prevention  of  terrorism,  money  laundering  and 
terrorism  financing,  continue  to  strengthen  the  capacity  to  perform  checks  on  all  reporting 
entities,  enhance  the  quality  of  reporting,  ensure  the  independence  and  efficiency  of  the 
relevant institutions; 

  take  into  account  potential  risks  of  money  laundering  linked  to  the  investor  scheme  in  the 
national  risk  assessment,  basing  this  on  the  EU  anti-money  laundering  rules,  and  take  the 
necessary mitigating measures. 

On capital movements and payments, since 2017 Montenegro has a regime of free movement 
of capital, no limitation on the transfer of property, and no foreign exchange or currency control. 
However,  full  alignment  with  the  EU  acquis  has  not  been  achieved.  A  new  insurance  law  and 
amendments  to  the  law  on  ownership  rights,  removing  preferential  treatments,  are  yet  to  be 
adopted. 

As  regards  the  payment  system,  although  the  legislation  is  largely  in  place,  further  alignment 
with  the  EU  acquis  is  needed.  Montenegro  finalised  draft  laws  on:  (i)  comparability  of  fees 
charged  to  customers,  payment  account  switching  and  access  to  payment  accounts  with  basic 
features,  and  (ii)  on  interchange  fees  and  card-based  payment  transactions,  with  the  aim  of 
achieving further alignment with the EU acquis. There are five licensed payment institutions in 
Montenegro,  including  one  for  electronic  payments.  The  total  number  of  registered  agents  in 
payment institutions increased to 22 in the first quarter of 2020. 

The  strategy  for  the  prevention  of  terrorism,  money  laundering  and  terrorism  financing 
expired in 2018, and a new strategy is  yet be adopted.  The Law on the prevention of money 
laundering and terrorist financing  was amended in  December 2019 to reflect  the changes in 

74 

 
the institutional setting of the financial intelligence unit (FIU) and to strengthen its operational 
autonomy  and  independence,  despite  the  fact  that  it  is  administratively  a  department  of  the 
police. The amendments refer to the competencies, powers, affairs and organisation of the FIU, 
including  data  protection  issues  and  aim  at  ensuring  the  compliance  with  some  of  the 
recommendations  of  the  Financial  Action  Task  Force  (FATF)  and  international  standards. 
However, the law will need to be amended again, to address remaining shortcomings and to align 
it with the 5th EU Anti-Money Laundering Directive. In December 2019, the Montenegrin FIU 
applied  to  restore  its  membership  in  the  Egmont  Group,  which  was  cancelled  when  the  FIU 
ceased  to  exist  under  its  previous  legal  form.  In  May  2020,  the  Committee  of  experts  on  the 
evaluation  of  anti-money  laundering  measures  and  the  financing  of  terrorism  (MONEYVAL) 
formally  removed  Montenegro  from  the  fourth  round’s  regular  follow-up  process,  considering 
that  the  country  had  taken  sufficient  steps  to  remedy  deficiencies  that  had  been  identified  in 
2015.  

A new directorate dealing with the prevention of money laundering and terrorism financing was 
established within the central bank, with four staff members. In 2019 and the first three months 
of  2020,  the  central  bank  carried  out  7  planned  bank  inspections,  4  targeted  on-site  bank 
inspections, one check of a payment institution, 2 checks of a micro-finance institution and one 
check of a financial leasing company. 

In September 2019, the Capital Market Authority, the body in charge of regulating, licensing and 
monitoring  the  capital  market,  developed  a  rulebook  to  implement  risk-based  surveillance 
measures on the prevention of money laundering and terrorism financing. In November 2019, it 
adopted guidelines for risk-based analysis of capital market participants. 

The  FIU’s  enhanced  capacity,  including  its  direct  access  to  police  intelligence  in  addition  to 
financial intelligence, resulted in a substantial increase in the number of cases processed and of 
suspicious  transactions  prevented.  The  number  of  transaction  reports  received  by  reporting 
entities rose to 264 in 2019 (a 14% increase compared with 2018), reflecting a stronger ability to 
engage with reporting entities and clarify reporting rules. Reporting from non-financial entities 
such  as  notaries,  improved.  However,  the  absence  of  reporting  from  lawyers  still  needs  to  be 
addressed. In 2019, the FIU carried out only 11 controls of reporting entities (compared with 94 
in  2018),  due  to  the  fact  that  the  supervision  competence  was  transferred  from  the  FIU  to  the 
Ministry  of  Interior  in  April,  but  endorsed  in  the  revised  anti-money  laundering  legislation  in 
December. From January to September 2020, the ministry of Interior performed 37 controls of 
reporting  entities.  Twenty-four  suspicious  transaction  were  identified  (compared  with  22  in 
2018), and 17 in the first quarter of 2020. Nine orders for temporary suspension of transaction 
were issued in 2019, amounting to EUR 7.6 million and 53 orders in the first quarters of 2020, 
amounting to EUR 2.2 million.  

Since  January  2019,  Montenegro  has  been  running  an  investor  citizenship  scheme,  allowing 
foreign  investors  to  acquire  Montenegrin  citizenship  for  an  investment  of  minimum  EUR 
350 000 in the local economy. Of the 24 applications received so far, 5 were rejected after due 
diligence procedure, while for 5 applications final decisions on citizenship were issued with one 
passport having been issued so far in 2020 to a citizen of the Russian Federation. To the other 
applications and their family members, passports have not been issued yet due to the COVID-19 
outbreak  and  the  respective  travel  ban.  This  scheme  needs  to  be  closely  monitored  as  it  poses 
risks  as  regards  security,  money  laundering,  tax  evasion,  terrorist  financing,  corruption  and 
infiltration  by  organised  crime.  As  provided  for  by  new  EU  anti-money  laundering  rules, 

75 

 
Montenegro should devote particular attention to enhanced customer due diligence in the context 
of the investors’ citizenship programme. 

5.5 

Chapter 5: Public procurement  

EU  rules  ensure  that  public  sector  procurement  of  goods,  services  and  works  in  any  Member 
State is transparent and open to all EU companies on the basis of non-discrimination and equal 
treatment. 

Montenegro  remains  moderately  prepared  on  public  procurement.  Some  progress  was 
achieved  in  2019,  with  the  adoption  of  the  laws  on  public-private  partnerships  and  public 
procurement. Last year’s recommendations were partially fulfilled.  

In the coming year, Montenegro should:  

  start implementing the laws on public-private partnerships and public procurement and adopt 

implementing legislation on public procurement, including on defence procurement; 

  fully respect the EU public procurement principles when awarding the concession to operate 

Airports of Montenegro; 

  further improve the functioning of the remedy system.  

Institutional set-up and legal alignment 

The  legal  framework  on  public  procurement  is  broadly  aligned  with  the  acquis.  In  December 
2019,  Parliament  enacted  an  amended  law  on  public  procurement  and  a  new  law  on  public-
private partnership, both aimed at alignment with 2014 EU Procurement Directives on classical 
procurement, utilities and concessions. Work on related implementing legislation has started. In 
total, 38 different legal acts are to be adopted during the year, including implementing legislation 
on central purchasing, defence procurement and e-procurement.  

Given the comprehensive regulatory, organisational and institutional changes over the last year, 
Montenegro adopted in July 2019 a detailed action plan for reforms in this area. The plan covers 
the period until December 2020 and consists of 37 different measures, among them the adoption 
of a new strategy on public procurement. 

A high-profile tender for the concession to operate Airports of Montenegro was launched by the 
government in October 2019. The process constitutes a test for the government’s determination 
to  follow  the  EU  standards  of  fair  and  transparent  public  procurement,  providing  value  for 
money,  competition  and  strong  safeguards  against  corruption.  Full  compliance  with  the  EU 
public procurement principles would be essential for Montenegro in line with the requirements 
of this negotiating chapter. 

The  Public  Procurement  Administration  is  now  a  part  of  the  Ministry  of  Finance’s 
Department  for  Public  Procurement,  which  has  a  lead  role  in  developing  public  procurement 
policy.  

Implementation and enforcement capacity 

Montenegro’s  public  procurement  market  corresponded  to  12.4%  of  GDP  in  2019  and  the 
value of all public procurement procedures amounted to some EUR 608 million.  

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On  the  monitoring  of  contract  award  and  implementation,  the  Public  Procurement 
Inspectorate executed 425 controls by October 2019, up 12% on the same period of 2018. Most 
controls  relate  to  contract  conclusion  and  execution  phases.  The  number  of  controled  entities 
increased by 28% to 393.  

Capacity to manage  public procurement processes has  improved, although the high number 
of contracting authorities is not conducive to efficiency. Smaller municipalities with limited own 
capacities may  receive assistance for their public procurement  infrastructure projects  related to 
water,  communal  services  and  environment  from  two  public-owned  companies,  PROCON  and 
VODACOM.  Centralised  purchasing  has  become  more  widely  used  for  certain  standard 
procurements, but contract management and ex-post evaluation of procurement processes is still 
very rare. Lowest price as the only award criterion was applied in 66% of all procedures in 2019.  

A  regulatory  and  institutional  framework  is  in  place  on  integrity  and  conflict  of  interest 
mechanisms  in  public  procurement.  On  data  management  systems,  the  new  regulatory 
framework for public procurement provides a basis for the introduction of an electronic public 
procurement  system  in  Montenegro.  As  of  2021,  the  current  public  procurement  portal  and 
traditional, paper-based procurement procedures should be replaced by the e-procurement system 
(EPPS). Activities for the implementation of EPPS, financed by an EU project, are progressing 
smoothly, with a test-version of the new software made available in September 2019. The pilot 
phase  of  the  e-procurement  system  is  to  be  launched  in  the  third  quarter  of  2020,  with  the 
participation of selected contracting authorities. 

Efficient remedy system 

The legislation on the right to appeal is broadly in line with the acquis.The remedy system is 
based  on  a  review  of  appeals  by  the  State  Commission  for  the  Control  of  Public  Procurement 
(PPC), an independent administrative body reporting directly to Parliament. Appeals against the 
PPC  decisions  can  be  made  to  the  Administrative  Court.  The  number  of  appeals  related  to 
procurement procedures decreased further to 55 by the end of 2019. For the first time, the PPC 
did not report any case backlogs. This was the result of legal and procedural changes introduced 
in 2017 and thanks to significant increase of the implementation capacity (new recruitments). 

In 2019, some 8% of the PPC decisions  were further contested in  the Administrative Court by 
the  contracting  parties.  The  number  of  Administrative  Court  rulings  changing  the  decisions  of 
the PPC remains persistently high at some 41%, indicating that decision-making processes could 
be improved. This  was highlighted in  the findings and recommendations of  Taiex peer review, 
which took place in November 2019.  

5.6 

Chapter 6: Company law  

The  EU  has  common  rules  on  the  formation,  registration  and  disclosure  requirements  of  a 
company, with complementary rules for accounting and financial reporting, and statutory audit. 

Montenegro  has  reached  a  good  level  of  preparation  on  company  law.  Good  progress  was 
made  on  one  2019  recommendation,  by  adopting  the  Law  on  companies.  The  2019 
recommendation  on  accounting  however  remains  valid,  as  the  draft  legislation  has  yet  to  be 
adopted by parliament.  

In the coming year, Montenegro should therefore, in particular: 

→ adopt the rulebook on the workings of the Central Register of Economic Entities; 

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→ adopt the amended Law on accounting and the rulebook on company financial statements.  

On  company  law,  the  Law  on  companies  was  adopted  in  June  2020,  making  further  progress 
with  acquis  alignment  on  a  number  of  issues,  including  cross-border  mergers,  single-member 
companies and a number of shareholder rights provisions. However, further legislative alignment 
is necessary with the remaining rules on shareholder rights. A draft rulebook on the workings of 
the Central Register of Economic Entities (CREE), including the legal and technical provisions 
to  develop  online  electronic  company  registration  (enabled  through  CREE),  has  been  prepared 
and will be adopted following the entry into force of the Law on companies.  National legislation 
on company takeovers is in line with main EU acquis provisions. Montenegro’s Capital Market 
Authority  is  considering  revisions  to  the  Corporate  Governance  Code  to  better  align  with  EU 
principles.  The  database  of  companies  in  the  business  register  should  be  ready  to  interconnect 
with EU Member States’ business registers in the future. Montenegro is developing the Central 
Registry of Regulated Information to be the official mechanism to collect and publish regulated 
information in accordance with the EU Transparency Directive. 

On  corporate  accounting  and  statutory  audit,  draft  amendments  to  the  Law  on  accounting 
hold provisions in line with acquis requirements, including those on non-financial reporting. The 
law  is  yet  to  be  adopted  by  parliament.  While  the  new  rulebook  on  the  content  and  layout  of 
company  financial  statements  is  partially  aligned  with  the  acquis,  further  amendments  will  be 
made  at  a  later  stage  to  appropriately  reflect  the  ‘think  small  first’  principle  of  the  EU 
Accounting  Directive.  Currently,  all  companies  must  comply  with  international  financial 
reporting  standards  (IFRS),  while  reduced  obligations  exist  for  micro  and  small  companies 
(balance  sheet  and  profit  and  loss  account  only).  Montenegro’s  Law  on  Auditing  contains  the 
essential elements in line with EU requirements, including a public audit oversight body (POB) 
which is  independent  of  the profession. The POB  is  fully  funded by the  government. Statutory 
audits  are  performed  based  on  international  auditing  standards  (IAS)  and  are  mandatory  for 
public-interest  entities.  Some  good  results  from  audit  quality  inspections  have  been  achieved 
since 2019, in  some instances  requiring licence revocation. The  government  approved plans to 
increase the number of audit quality inspectors at the POB (from 2 to 3).  

5.7 

Chapter 7: Intellectual property law  

The  EU  has  harmonised  rules  for  the  legal  protection  of  intellectual  property  rights  (IPR),  as 
well  as  rules  for  the  legal  protection  of  copyright  and  related  rights.  Rules  for  the  legal 
protection  of  IPRs  cover,  for  instance,  patents  and  trademarks,  designs,  biotechnological 
inventions  and  pharmaceuticals.  Rules  for  the  legal  protection  of  copyright  and  related  rights 
cover, for instance, books, films, computer programmes and broadcasting.  

Montenegro has a good level of preparation on intellectual property law. Some progress was 
made,  in  particular  as  regards  alignment  with  the  EU  acquis  on  collective  management  of 
copyright  and  related  rights  and,  establishing  an  enforcement  track  record,  the  coordination  of 
concerned bodies, joint operations and reporting.  

In the coming year, Montenegro should in particular: 

  adopt a new national intellectual property strategy for 2021-2024; 

  continue  legislative  alignment  in  particular  with  the  Trade  Secrets  Directive  and  ensure 
alignment with the Enforcement Directive as concerns measures against intermediaries; 

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  improve its track record on investigations, prosecutions and judicial follow-up. 

On copyright and neighbouring rights, Parliament is yet to enact legislation to align with the 
EU  acquis  on  collective  management  of  copyright  and  related  rights  and  multi-territorial 
licensing of rights in musical works for online use. Ratification of the Marrakesh Treaty remains 
to be completed.   

On  industrial  property  rights,  existing  IT  tools  and  search  engines  TmView,  DesignView, 
DesignClass  and  the  European  Union  Intellectual  Property  Office  (EUIPO)  User  Satisfaction 
Survey (USS) as well as the Industrial Property Automation System (IPAS) for trademarks  are 
fully  functional.  Furthermore,  the  World  Intellectual  Property  Office  (WIPO)  Publish  IT 
application  has  been  implemented.  Legislative  alignment  with  the  EU  acquis  continued  on 
patents, trademarks and trade secrets and in preparation for Montenegro’s future membership of 
the European Patent Convention and the European Patent Organisation (EPO), expected by the 
end of 2020. 

On enforcement, Montenegro provides quarterly updates of its statistics. Reporting is yet to be 
fully  aligned  with  Montenegro’s  future  reporting  obligations  to  the  European  Commission  on 
customs  enforcement  of  intellectual  property  rights.  The  track  record  on  criminal  investigation 
and prosecution needs to improve in line with EU and international standards. Ex-officio powers 
should  be  reinforced  in  this  respect.  Preparation  of  Montenegro’s  new  national  intellectual 
property strategy is  ongoing,  and cooperation  with the WIPO in this regard needs to  intensify. 
The  intellectual  property  rights  coordination  team  meets  regularly  and  the  established 
interdisciplinary working group has organised six joint actions focused on awareness raising and 
strengthening  cooperation  between  IPR  authorities  and  right  holders.  The  Ministry  of  Health 
continued to monitor trafficking in counterfeit medicinal products.  

Following restructuring of the state administration, the intellectual property service has been part 
of the Ministry of Economy since December 2018. Staffing decreased, compared to that of the 
Intellectual  Property  Office  in  2018.  Cooperation  continued  with  international  organisations, 
namely WIPO, EUIPO and the European Patent Office, as well as with economic operators and 
right holders. Cooperation with the EUIPO Observatory on the Infringement of IPR intensified. 

5.8 

Chapter 8: Competition policy  

EU  rules  protect  free  competition.  They  include  antitrust  rules  against  restrictive  agreements 
between  companies  and  abuse  of  dominant  position,  and  also  include  rules  on  concentrations 
between companies which would significantly impede competition. EU rules also set out a system 
of State aid control. Governments are only allowed to grant State aid if restrictive conditions are 
met, with a view to preventing distortion of competition.  

Montenegro is  moderately prepared in this area. Limited progress  was registered overall. 
In the state aid area, EUR 155 million of State funding were granted to Montenegro Airlines 
without a prior informed opinion of the State aid authority. This raised serious concerns. The 
proper handling of this case is an important test for the functioning of Montenegro’s State aid 
control  system.  Under  the  2018  Law  on  State  aid  control,  the  first  two  ex-officio 
investigations  on  non-notified  aid  were  launched,  being  the  first  since  2012.  Last  year's 
recommendations remain valid and in the coming year Montenegro should in particular:  

  provide  the  State  aid  authority  with  the  means  and  information  to  follow  up  on  the 

79 

 
Montenegro Airlines case and to adopt an informed decision, in line with Montenegro’s 
legislation, as well as its Stabilisation and Association Agreement obligations, on which 
Montenegro will then need to follow-up; 

  ensure transparency on all state aid decisions and operational independence of the State 
aid authority as well as effectiveness of its control on State aid at all levels, including the 
building up of an enforcement record;  

  improve the track record of the Agency for the Protection of Competition on antitrust and 

mergers.  

Antitrust and mergers 

The  legislative  framework  provides  a  good  level  of  alignment  with  the  EU  acquis  and  the 
Stabilisation and Association Agreement (SAA). The Law on protection of competition is largely 
aligned  with  Article  101  TFEU  on  restrictive  agreements  and  Article  102  TFEU  on  abuses  of 
dominant position. The law also provides for ex ante control of mergers above certain turnover 
thresholds,  in  line  with  the  principles  of  the  EU  Merger  Regulation.  A  good  level  of 
implementing  legislation  is  in  place.  The  implementing  legislation  is  largely  in  line  with  the 
relevant EU acquis regulations and Commission guidelines. There were no developments during 
the reporting period.  

On the institutional framework, the Agency for Protection of Competition (APC) is responsible 
for  implementing  the  legal  framework.  It  is  an  operationally  independent  authority  and  the 
responsible  director  is  appointed  by  the  government.  Decisions  on  antitrust  and  mergers  are 
taken by the Council of the APC, appointed by the government.  

The powers of the APC are broadly comparable to those of the European Commission in the area 
of competition. It may (i) act upon a complaint or a notification (e.g. for mergers) or on its own 
initiative, request  information  and perform on-site investigations; (ii) approve mergers, with  or 
without  conditions,  or  prohibit  them;  and  (iii)  comment  on  draft  legislation  that  may  affect 
competition. The APC’s decisions may be appealed before the Administrative Court. A leniency 
policy for self-reporting cartel members is in place. However, fines can still only be imposed by 
a  decision  of  misdemeanour  courts,  not  directly  by  the  APC.  Amendments  to  the  Law  on  the 
protection  of  competition,  to  confirm  the  APC’s  set  up  under  the  2018  Law  on  state 
administration are overdue since December 2019.  

On  enforcement  capacity,  the  APC's  administrative  and  financial  capacities  are  yet  to  be 
strengthened.  The  APC  currently  has  16  staff,  including  9  case-handlers.  On  implementation, 
the number of decisions on cartels and abuses of dominant position has stagnated over time, with 
only one taken in 2019. In spite of the increased number of decisions on mergers (62 in 2019), 
the APC has not prohibited any of them. In 2019, two in-depth investigations of a merger were 
reported by the APC. The amount and number of fines imposed by the Misdemeanour court (4 
fines totalling EUR 2200 in 24 procedures in 2019) are not sufficient.. The leniency policy was 
not applied in 2019, as in the years before. The APC has only conducted four on-site inspections, 
two of which during the reporting period. No opinion on primary legislation was issued in 2019. 
The APC was not consulted for the new draft concession act for port services in the port of Bar. 
In order to demonstrate that the APC is stepping up its enforcement policy, it needs to make full 
use of its enforcement powers, by carrying out more on-site inspections, and further promoting 
the use of its leniency policy as a means to uncover cartels. To this end, the ACP should consider 

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increasing  its  advocacy  activities.  Finally,  the  courts’  capacity  to  handle  complex  competition 
cases must be significantly strengthened. 

State aid  

The legislative framework is to a large extent in line with the EU acquis and the SAA as well as 
with Articles 107 and 108 TFEU. The 2018 Law on State aid control sets out the notion of aid as 
well as procedural State aid rules. In April 2020, important secondary legislation was adopted, 
aimed  at  alignment  with  the  banking  communication,  notion  of  state  aid  and  the  Temporary 
Framework for state aid measures to support the economy in the context of COVID-19 outbreak 
and its first amendments. A second and a third set of measures to support the economy have been 
adopted  respectively  in  May  and  July  2020.  Some  secondary  EU  acquis  is  still  awaiting 
alignment, such as notification forms and information sheets (Regulation 2015/2282) and aid for 
port  and  airport  infrastructure.  The  rules  on  the  financing  of  services  of  general  economic 
interest  are  largely  aligned  with  the  EU  State  aid  acquis.  However,  Montenegro  needs  to 
demonstrate their proper enforcement.  

As  regards  the  institutional  framework,  the  Agency  for  Protection  of  Competition  (APC)  is 
responsible for implementing the legal framework. It is an operationally independent authority, 
whose responsible director is appointed by the government. Decisions on state aid are taken by 
the  Council  of  the  APC,  appointed  by  the  government.  Adopted  State  aid  decisions  can  be 
appealed before the Administrative Court. However, a solid track record on enforcement by the 
State  aid  authority  is  yet  to  be  proven.  While  the  Ministry  of  Finance  remains  responsible  for 
legislative proposals in the area of State aid, since the transfer of the State Aid Control Unit to 
APC in January 2019, there is no dedicated staff within the Ministry.  

The enforcement capacity of the APC Council remains significantly insufficient. Two new staff 
were recruited during the reporting period. However, other staff resigned, leading to considerable 
loss of knowledge. As of now, there are eight employees in the field of State aid. To strengthen 
its  expertise  and  enforcement  capacity,  the  APC  should  undertake  significant  efforts  towards 
new recruitments and related capacity building.  

On  implementation,  the  number  of  decisions  adopted  by  the  APC  Council  increased  to  33  in 
2019 from 22 in 2018. For the first time since 2015, three negative decisions were taken by the 
State aid authority in 2019.  In response to the COVID-19 outbreak, the APC Council, in April 
2020, assessed the second set of socio-economic measures prepared by government as compliant 
with  state  aid  rules,  while  the  first  and  third  sets  of  measures  are  yet  to  be  assessed  for 
compliance. The State aid authority received no complaint between 2013 and 2019, which could 
indicate a low awareness of State aid rules among stakeholders. The APC’s comprehensive 2018 
report  on  state  aid  identified  nine  non-notified  state  aid  cases  at  central  and  local  levels. 
Consequently as per 2018 Law on State aid control, two ex-officio investigations, were launched 
in  October  2019  and  remain  to  be  finalised  by  the  APC.  They  are  the  first  ex-officio 
investigations  since  2012,  Monitoring  of  compliance  in  this  area  needs  to  be  significantly 
strengthened, including compliance with the conditions for cumulation of aid. A proper State aid 
register, including the de minimis register, is yet to be set up. The State aid authority needs to be 
systematically consulted on any concession act. For example, the government launched a 30-year 
concession for the airports of Montenegro (Podgorica and Tivat) in 2019. The procedure needs to 
be in full compliance with State aid rules.  

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In  2019,  the  most  important  State  aid  case  is  the  Law  on  investing  in  consolidation  and 
development of Montenegro Airlines of December 2019, providing for up to EUR 155 million in 
state  funding  to  the  airline.  The  law  was  adopted  without  a  prior  decision  from  the  State  aid 
authority,  even  though  this  is  provided  for  under  national  legislation  and  the  Stabilisation  and 
Association  Agreement.  This  raised  concerns  over  compliance  with  the  relevant  provisions  of 
Montenegrin  law  and  the  SAA,  which  require  State  aid  measures  to  be  assessed  by  an 
operationally  independent  authority  (i.e.  by  the  APC  Council).  Montenegro  however  stated  to 
currently apply the standstill clause and to not have made payments on the basis of the law. It is 
now important for Montenegro to demonstrate that there is a functioning and independent State 
aid authority. For this, the government, as the initiator of the aid, needs to provide the APC with 
the necessary information and time to take a qualified decision as concerns this law and the state 
funding  envisaged.  To  do  so,  the  government  has  supplied  further  information  to  the  APC  in 
May 2020.  

The State aid authority should investigate possible State aid cases in the energy sector. The State 
aid authority should also monitor implementation of State aid rules in large projects undertaken 
in cooperation with third countries.  For this, the State aid authority needs to have access to all 
necessary  information  to  provide  opinions  and  take  binding  decisions.  Awareness  of  state  aid 
rules among aid grantors at both central and local levels remains insufficient and advocacy must 
be considerably stepped up, despite numerous training sessions organised in the reporting period.  

Liberalisation  

The  Law  on  the  protection  of  competition  and  the  Law  on  State  aid  control  apply  to  public 
undertakings  and  undertakings  with  special  or  exclusive  rights.  This  does  not  include  cases 
where  applying the laws would obstruct  the performance of the particular tasks of services of 
general economic interest assigned to such undertakings, in line with Article 106 TFEU and with 
the  SAA.  There  are  no  monopolies  of  a  commercial  character  as  provided  for  in  Article  37 
TFEU. There were no developments in the reporting period. 

5.9 

Chapter 9: Financial services  

EU  rules  aim  to  ensure  fair  competition  between  and  the  stability  of  financial  institutions, 
namely banking, insurance, supplementary pensions, investment services and securities markets. 
They include rules on authorisation, operation and supervision of these institutions.  

Montenegro  is  moderately  prepared  in  the  area  of  financial  services,  with  good  progress 
made  in  the  reporting  period,  notably  on  the  alignment  with  the  EU  acquis  in  the  field  of 
banking  and  financial  conglomerates,  fulfilling  last  year’s  recommendation.  In  the  coming 
year, Montenegro should in particular: 

  adopt and start implementing secondary legislation related to the Capital Requirements 

Directive and the Capital Requirements Regulation; 

  perform  an  independent  review  of  the  asset  quality  in  the  banking  system,  analyse  its 

results and prepare plans for corrective actions, if necessary. 

On banks and financial conglomerates, the legislation is partially aligned with the EU acquis. 
In December 2019, Parliament adopted laws on deposit protection, credit institutions, resolution 
of credit institutions and amendments to the law on bank bankruptcy and liquidation. This aims 
to align the legal framework with the Capital Requirements Directive (CRD IV) and Regulation 

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(CRR) as well as the Bank Recovery and Resolution Directive (BRRD). Work on implementing 
legislation, necessary for the full implementation of these laws, will continue in 2020. The new 
legal  framework,  once  implemented,  will  significantly  improve  the  supervision  of  credit 
institutions and allow for timely interventions in troubled credit institutions. 

During  the  reporting  period,  the  Central  Bank  of  Montenegro  amended  a  number  of 
implementing  acts  on  the  credit  registry,  reporting,  and  minimum  standards  for  credit  risk 
management  in  banks.  It  also  adopted  implementing  legislation  on  macro-prudential  measures 
related to  retail  banking  loans. July 2019 saw the establishment of the Committee for Banking 
Supervision,  a  standing  advisory  body  to  the  governor  of  the  central  bank.  The  internal 
organisation  of  the  central  bank  was  also  changed  in  order  to  strengthen  its  institutional  and 
supervisory  capacities.  Montenegro  established  units  for  off-site  supervision  of  credit 
institutions,  supervision  of  operational  risk  of  credit  institutions,  a  new  department  for  the 
resolution of credit institutions and the Resolution Fund. 

These  actions,  taken  in  the  wake  of  the  bankruptcy  of  two  small  credit  institutions  at  the 
beginning  of  2019,  increased  the  level  of  supervision  and  enhanced  safeguards  against  credit 
risk. The main indicators for the banking sector remain positive, with the ratio of non-performing 
loans dropping to 5.1% of total loans in February 2020 and solvency ratio reaching 17.7% at the 
end of 2019, well above the statutory minimum of 10%. Nonetheless, an external, independent 
review of the asset quality in all 13 banks present on the Montenegrin market started in February 
2020, with a view to strengthening stability in the banking system and confidence in the banking 
system. The review should conclude in 2021.  

The Central Bank adopted in March 2020, in cooperation with the Government and commercial 
banks, the decision on temporary measures for the financial system in order to mitigate negative 
effects  of  COVID-19  pandemic  to  citizens  and  financial  system  of  Montenegro.  The  measures 
include  notably  a  90  days  moratorium  on  repayment  of  loans,  possibility  to  restructure  and 
prolong  loans  and  a  temporary  prohibition  to  pay  out  the  dividends  to  shareholders  of  banks. 
Another decision from May 2020 introduced further measures that banks may take to restructure 
loans  of  borrowers  affected  by  the  crisis  and  the  possibility  to  prolong  moratorium  on 
repayments of loans for another 90 days.  

Montenegro’s rules on insurance and occupational pensions are partially aligned with those of 
the  EU  and  are  primarily  based  on  Solvency  I  rules.  The  Insurance  Supervision  Agency 
continued working on further alignment with the EU acquis, notably the Solvency II Directive. 
Implementing  legislation  on  the  content  and  method  of  maintaining  data  registers  of  insurance 
companies was also adopted, as well as some amendments to three implementing legislation acts. 

On financial market infrastructure, securities markets and investment services, the Capital 
Market Authority adopted implementing legislation on the submission of regulated information 
in  this  field  to  the  governmental  Central  Registry  of  Regulated  Information.  Implementing 
legislation and guidelines were also adopted on prevention of anti-money laundering and terrorist 
financing  in  relation  to  risk-based  surveillance  by  capital  market  participants.  Preparations 
continued for alignment with the EU acquis on investment funds (UCITS Directive), alternative 
investment funds (AIFMD Directive) and pension funds (IORP Directive).  

5.10  Chapter 10: Information society and media 

The  EU supports the smooth  functioning of  the internal market  for  electronic communications, 

83 

 
electronic  commerce  and  audio-visual  services.  The  rules  protect  consumers  and  support 
universal availability of modern services.  

Montenegro remains moderately prepared in the area of information society and media. There 
was limited progress during the reporting period. The recommendations of the previous report 
remain  to  be  fully  met,  however  new  media  legislation  provides  a  good  basis  for  this. 
Montenegro prepared and partly  adopted  a new  set  of media laws, which was also  extensively 
discussed with the media community and civil society.  The regulatory authorities’ capacity and 
independence  remain  to  be  strengthened  to  implement  the  new  media  legislation  and  the 
recommendations.  

In the coming year, Montenegro should in particular: 

  ensure operational independence of the media regulators and public service broadcaster from 

undue political interference; 

  grant the Agency for Electronic Media (AEM) powers to impose a complete set of measures, 
including  warnings,  fines,  suspensions  and  revocation  of  licences  ensuring  proportionality 
and effectiveness; 

  establish a track record to demonstrate administrative capacity to enforce the EU acquis for 
electronic  communications,  information  society  services  and  audio-visual  media  services, 
including as regards regulatory independence. 

In the electronic communications and information and communication technologies  sector, 
progress was made on the mapping of the national broadband infrastructure The  aim is to reduce 
broadband  deployment  costs,  as  recommended  in  the  economic  reform  programme  (ERP).  In 
spring  2019,  the  Constitutional  Court  ruled  that  the  blocking  of  freeware  and  cross-platform 
instant messaging services on the October 2016 Election Day was unconstitutional. As a result, 
the Court annulled the respective provision of the Law on electronic communication. 

The 112 European emergency number is functioning. 

Information society  is  under the responsibility  of the  Ministry for Public Administration. The 
2019 action plan implementing the information society development strategy was adopted. The 
strategy, which is based on the digital agenda for Europe and the digital single market strategy, 
identifies key steps to achieve necessary standards, such as accessibility of broadband services, 
cyber  security,  digital  business,  eHealth  and  e-education.  The  Regional  Roaming  Agreement 
signed in April 2019 paves the way for the removal of roaming tariffs in July 2021. The Ministry 
for Public Administration continued to expand the number of e-services available to citizens. The 
e-government  portal  currently  supports  598  electronic  services  under  the  competence  of  52 
institutions.  

On audio-visual policy, AEM, the regulatory agency for electronic media, continued to exercise 
its mandate in a professional manner. The agency is responsible for overseeing the media during 
elections,  although  by  law  this  should  be  done  by  an  ad-hoc  parliamentary  committee,  thus 
creating  an  overlapping  jurisdiction.  During  elections,  candidates  lodging  media-related 
complaints with broadcasters can appeal against their decisions directly to the AEM, which has 
to  respond  within  24  hours.  However,  the  AEM  lacks  the  authority  to  effectively  monitor  and 
penalise  broadcasters.  Related  legal  provisions  and  AEM  operational  capacity  should  be 
strengthened.  AEM  should  be  the  only  body  responsible  for  supervising  broadcasters  during 

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elections. 

In February 2020 the AEM limited the broadcasting of two Serbian TV broadcasters.    Reason 
was the alleged use of discriminatory language in relation to Montenegro, featured in their TV 
shows and promoting hate, intolerance, and discrimination against Montenegrins. 

A new set of three media laws was drafted and two of them adopted by Parliament on 27 July 
2020: the Law on media and the Law on the national public broadcaster RTCG. The Law on the 
public  broadcaster  should  ensure  stable  financial  resources  and  the  restoration  of  the  public 
broadcaster’s  editorial  independence  and  professional  standards.  The  third  law,  the  Law  on 
audio-visual  media  services,  needs  to  comply  with  the  EU's  2018  revision  of  the  Audiovisual 
Media Services Directive. It remains to be completed and the consistency of the three laws needs 
to be ensured.  

5.11  Chapter 11: Agriculture and rural development  

The common agricultural policy (CAP) supports farmers  and rural development.  This  requires 
strong management and control systems. There are also common EU rules for quality policy and 
organic farming.  

Montenegro  remains  moderately  prepared  in  the  area  of  agriculture  and  rural  development. 
Good progress continued in particular regarding the implementation of the instrument for pre-
accession assistance for rural development programme (IPARD II) through 2 calls and applying 
for entrustment in one further measure and in implementing and updating the action plan for EU 
acquis alignment in chapter 11. 

In the coming period, Montenegro should in particular:  

 continue to implement the measures entrusted to it under the IPARD II programme and seek 
to be entrusted with budget implementation tasks for the Technical assistance measure; 

 continue to implement the action plan to ensure alignment with the EU acquis on agriculture 
and rural development. 

On  horizontal  issues,  the  action  plan  for  harmonisation  with  the  EU  acquis  was  revised  and 
legislative  alignment  continued.  Further  progress  remains  to  be  made  to  bring  direct  support 
measures  in  line  with  the  EU  acquis  by  fully  decoupling  them  from  production  and  linking 
payments to cross-compliance. Preparatory steps were taken to establish a decentralised branch 
for  the  future  paying  agency  in  Bijelo  Pole.  As  concerns  the  integrated  administration  and 
control  system  (IACS),  further  development  of  the  land  parcel  identification  system  (LPIS) 
needs  to  continue  and  be  rolled-out  to  cover  the  whole  territory.  Preparations  continued  to 
develop a pilot for the farm accountancy data network (FADN). Farm advisory services need to 
be further strengthened. 

On common market organisation (CMO), Montenegro started a pilot programme of a school 
scheme for fruits, vegetables and dairy products for the 2019/2020 school year. New measures to 
align  with  the  CMO  were  introduced  for  the  wine  and  olive  oil  sectors  and  on  producer 
organisations. A peer review on wine and quality policy provided important recommendations on 
the designation of wine  growing zones and  geographical  origins  as  well  as on aligning quality 
policy with the EU acquis. 

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On  rural  development,  contracting  was  finalised  for  the  first  two  IPARD  II  calls,  on  the 
measures related to ‘Investments in physical assets of agricultural holdings’ and ‘Investments in 
physical  assets  concerning  processing  and  marketing  of  agricultural  and  fishery  products’. 
Second  calls  for  above  measures  were  published  in  September  2019  and  February  2020  and 
applications,  for  the  latter,  are  currently  being  evaluated.  Montenegro  got  conditional 
entrustment  of budget  implementation tasks for  the  IPARD measure  ‘Farm diversification and 
businesses development’  and launched the preparations for the  ‘Technical  assistance’  package. 
In 2019, the capacity of the IPARD Agency increased by 10 employees on permanent contracts 
and 15 employees on temporary contracts.  

In quality policy, further secondary legislation was adopted and efforts continue to develop and 
implement  the  policy.  Efforts  are  needed  to  ensure  that  strong  procedures  and  systems  are 
established and a robust control system put in place. 

The organic farming sector has the required infrastructure in place (i.e. the competent authority, 
an accreditation system for control bodies and a certification system). The number of registered 
organic producers increased by 22% to 400. A number of educational workshops were organised 
for producers. There is potential for further development of the sector and for the opportunities 
under the IPARD programme to be fully used. 

5.12  Chapter 12: Food safety, veterinary and phytosanitary policy 

EU hygiene rules for foodstuff production ensure a high level of food safety. Animal health and 
welfare  and  the  safety  of  food  of  animal  origin  are  safeguarded  together  with  quality  of  seed, 
plant protection material, protection against harmful organisms and animal nutrition.  

Montenegro  remains  moderately  prepared  on  this  chapter.  Good  progress  was  made  in 
particular  in  legislative  alignment,  implementing  the  national  strategy,  including  its  update. 
On raw milk quality improvement, the recommendations of the 2017 food audit continued to 
be implemented. The upgrading of establishments continued.  

In the coming year, Montenegro should in particular:  

  start  implementing  the  revised  strategy  for  aligning  with  and  implementing  the  EU 

acquis; 

  support the ongoing process of upgrading food establishments; 

  continue  to  strengthen  administrative  capacity  and  infrastructures,  in  particular  on  food 

safety controls. 

On  general  food  safety,  a  thorough  update  of  Montenegro’s  strategy  for  aligning  with  and 
implementing the EU acquis was adopted, including the action plan and the specific action plan 
for classical swine fever. Implementation of the action plans continued. The 2019 programme for 
food  and  feed  safety  safeguard  measures  was  adopted  and  implemented.  The  programme  for 
2020  has  been  adopted  and  its  implementation  has  started.  Montenegro  intends  to  fully  align 
with the EU’s revised Plant Health Law (2016) and Official Controls Regulation (2017) by 2023. 

On veterinary policy, the implementation of the multiannual programme for the eradication of 
rabies  successfully  continued,  and  the  spring  and  autumn  2019  and  spring  2020  vaccination 
campaigns were completed.  Since 2012, no cases of rabies have been  reported. Vaccination  of 
bovines against lumpy skin disease and bluetongue disease were implemented. There have been 

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no  cases  of  lumpy  skin  disease  since  September  2016  and  no  reported  cases  of  bluetongue 
disease  since  May  2017.  The  relevant  programmes  for  the  monitoring  and  control  of  these 
diseases  for  2020,  as  well  as  for  African  swine  fever  were  prepared.  The  programme  of 
compulsory  measures  for  animal  health  protection  for  2019  was  implemented  and  the 
programme  for  2020  has  been  adopted  and  its  implementation  has  started.  The  national 
programme  to  improve  facilities  dealing  with  products  or  by-products  of  animal  origin  was 
further pursued. Identification (microchipping) and registration of pets (dogs and cats) started in 
September 2019. A strategy for the control of stray dogs is awaiting adoption by the government. 
Capacity building for veterinary services continued.  

On  the  placing  on  the  market  of  food,  feed  and  animal  by-products,  implementation 
continued of the national programme for improving raw milk quality and accompanying plan for 
handling non-compliant raw milk. Implementation of the national programme for the upgrading 
of food-processing establishments also continued, with some consolidation of companies. Some 
63 establishments producing food of animal origin were compliant with EU regulations, and 11 
of them were licensed to export to the EU. The plan for the management of animal by-products 
not intended for human consumption continued to be implemented. Strengthening administrative 
capacity and infrastructure, in particular on food safety controls, needs to remain a priority. 

Further  implementing  legislation  on  food  safety  rules  and  on  specific  rules  for  feed  was 
adopted.  

On phytosanitary policy, implementing legislation was adopted. 2019 saw the implementation 
of programmes on phytosanitary measures and on the monitoring of pesticide residues in food of 
plant and animal origin.  The programmes for 2020 have been adopted and the implementation 
has started. 

The  implementation  of  the  national  plan  for  the  sustainable  use  of  plant  protection  products 
continued,  in  line  with  the  2016-2021  action  plan.  The  first  and  the  second  sittings  of  the 
Committee on Registration of Pesticides took place in December 2019 resulting in registration of 
6 out of 17 submitted requests. In March 2020, six new additional requests were submitted to the 
members of the Committee for consideration. Capacity building for phytosanitary services was 
further pursued.  

On genetically modified organisms, the 2019 programme for genetically modified food and 
feed monitoring was implemented. 

5.13  Chapter 13: Fisheries  

The common fisheries policy lays down rules on fisheries management, protects living resources 
of  the  sea  and  limits  the  environmental  impact  of  fisheries.  This  includes  setting  catch  quotas, 
managing fleet capacity, rules on markets and aquaculture and support for fisheries and coastal 
communities.  

Montenegro  has  some  level  of  preparation  in  this  area.  Some  progress  was  made  on  the  3 
recommendations  in  the  last  report:  implementing  the  action  plan  on  the  EU  acquis,  capacity 
strengthening  and  international  collaboration.  Montenegro  is  a  reliable  partner  in  international 
fora. However the below two recommendations remain to be fully addressed. 

In the coming year, Montenegro should in particular: 

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→  revise  and  implement  its  action  plan  on  aligning  with,  implementing  and  enforcing  the  EU 
acquis; 

→ continue to strengthen administrative, data collection, scientific advice, inspection and control 
capacities. 

Montenegro  continued  to  implement  its  action  plan  on  aligning  with,  implementing  and 
enforcing the EU acquis under this chapter. Law on structural measures and State aid in fisheries 
and  aquaculture  and  Law  on  the  organisation  of  markets  in  fisheries  and  aquaculture  were 
adopted by the government in December 2019 and are pending adoption by Parliament. The two 
laws aim to achieve wide alignment with the EU acquis. Administrative and scientific capacity 
were strengthened through  further staff training  within the Directorate  General for  Fisheries in 
the Ministry of Agriculture and Rural Development. 

On  resource  and  fleet  management,  the  annual  data  collection  programme  on  Montenegrin 
fisheries continued. 

The  inspection  and  control  capacity  of  the  Administration  for  Inspection  Affairs  was 
strengthened, with the engagement of one additional inspector and the procurement of a vessel 
for inspection and monitoring of fishing activities at sea. Fisheries control on Lake Skadar was 
reinforced through installation of surveillance technique. Solar panels  were installed on fishing 
vessels  exceeding  10 m  in  length  to  ensure  the  secure  functioning  of  the  Vessel  Monitoring 
System (VMS) and of the devices for the automatic location and identification system (AIS). 

There  were  no  substantial  developments  on  structural  measures  and  State  aid,  further  to  the 
drafting of above primary legislation. On market policy, preparatory steps for the establishment 
of  producer  organisations  were  taken.  At  international  level,  Montenegro  continued  its 
contribution  to  MedFish4Ever,  the  INTERREG  programmes  and  the  General  Fisheries 
Commission  for  Mediterranean  (GFCM).  Under  its  presidency,  in  May  2019  Montenegro 
succesfully hosted the fourth annual forum on the EU strategy for the Adriatic and Ionian Region 
(EUSAIR), for which it had set fisheries, aquaculture and tourism as priority topics. 

5.14  Chapter 14: Transport policy  

The  EU  has  common  rules  for  technical  and  safety  standards,  security,  social  standards,  state 
aid and market liberalisation in road transport, railways, inland waterways, combined transport, 
aviation and maritime transport. 

Montenegro  is  moderately  prepared/has  a  good  level  of  preparation in  the  area  of  transport 
policy. No progress was made in the reporting period in completing key sector reforms, and the 
2019 recommendations remain valid. In the coming year, Montenegro should in particular: 

  ensure the operational independence and appropriate staffing of the railway regulatory body 

and the railway safety authority; 

  step  up  efforts  to  lay  down  the  strategic  framework  for  implementing  Intelligent  Transport 
Systems  (ITS)  on  its  core  road,  rail  and  maritime  network  and  align  with  the  EU  ITS 
Directive; 

  achieve  full  membership  to  the  Paris  Memorandum  of  Understanding  (MoU)  on  port  state 

control. 

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On general transport, the new 2019-2035 transport development strategy and its related action 
plan were adopted in June 2019. There was no further alignment with the EU acquis concerning 
summertime  arrangements,  public  service  obligations,  procedures  and  criteria  for  the  award  of 
public  service  contracts  in  road,  rail  and  maritime  transport.  There  is  a  need  to  increase 
administrative capacity and coordination in the Ministry of Transport and Maritime Affairs. The 
Commission  for  Investigation  of  Accidents  in  Maritime,  Rail  and  Air  Transport  continued  to 
work  in  line  with  its  mandate,  but  its  operational  and  financial  sustainability  needs  to  be 
strengthened.  Montenegro  continues  to  participate  actively  in  the  EU  strategy  for  the 
development of the Danube Region (EUSDR) as well as in the EU strategy for the Adriatic and 
Ionian Region (EUSAIR).  

On road transport, in November 2019 amendments to the Law on road transport were adopted, 
which further strengthened inspections of taxi and limo services. The amendments to the Law on 
contracts  on  carriage  in  road  transport  are  yet  to  be  adopted.  Montenegro  is  applying  digital 
tachographs,  but  is  not  yet  aligned with  the EU  acquis on smart  tachographs. The new law on 
roads is still to be adopted, as are the legislation on intelligent transports system and the strategic 
framework,  including  the  allocation  of  resources  for  implementation.  The  amendments  to  the 
Law on transport of dangerous  goods have not  been adopted  yet  and the  national  body  for the 
control of transport of dangerous goods has still not been set up.  

More  efforts  are  needed  to  align  the  secondary  legislation  with  the  EU  social  acquis  and  to 
implement it. In November 2019, the Law on road traffic safety was adopted, providing further 
alignment  with  the  road  safety  acquis,  as  well  as  improving  road  safety  enforcement  and 
introducing  adjustments  to  penalty  policies.  In  September  2019,  the  government  adopted  the 
biannual  2020-2022 programme for road safety  improvement. The  aim is to  further reduce the 
number of road fatalities, which is still significantly above EU average. According to a recently 
completed  road  safety  assessment  carried  out  in  line  with  Directive  2008/96/EC,  55%  of  the 
roads investigated received the worst rating and feature as the least safe performing roads.  The 
ongoing  2019-2022  programme  for  the  reconstruction  of  state  roads  has  the  potential  to  take 
important steps towards improving Montenegro’s road safety records. 

On  rail  transport,  a  new  railway  law  is  yet  to  be  adopted.  In  April  2019,  the  Railway 
Directorate  was  reorganised  into  the  Railway  Administration  and  now  functions  as  an 
independent  administrative  authority.  However,  the  practical  safety  and  regulatory  tasks  still 
need  to  be  specifically  set  out  in  the  new  planned  railway  law.  Further  efforts  are  needed  to 
improve its administrative capacity and to train its staff. 

Public  transport  and  compliance  with  passengers’  rights  remain  a  concern.  Implementing 
legislation  for  the  interoperability  of  rail  systems  in  line  with  the  EU  acquis  was  amended  in 
November  2019,  bringing  in  new  technical  specifications  on  safety  in  railway  tunnels.  The 
methodology for track access charges needs to be updated. Rail transport services for passenger 
and freight have been liberalised at domestic level, but further efforts are required to ensure the 
full opening of the rail market. Sustainable and rationalised railway infrastructure reconstruction 
and  maintenance  plans  need  to  be  developed.  In  November  2019,  Montenegro  signed  the 
Declaration on European Railway Safety Culture, which aims to raise awareness and promote a 
positive safety culture throughout the industry.  

On maritime transport, no further progress was made on achieving full member status of the 
Paris Memorandum of Understanding on Port State Control. The implementation of the National 

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Maritime  Single  Window  is  also  lagging  behind.  The  upgrading  and  extension  of  the  current 
community vessel traffic monitoring and information system is under preparation and is planned 
to  be  completed  by  the  end  of  2021.  The  adoption  of  the  Law  on  the  rights  of  passengers  in 
maritime  and  inland  navigation  is  still  pending.  Two  laws  on  the  ratification  of  international 
protocols  on  the  safety  of  maritime  transport  were  adopted  in  July  2019.  Despite  declining 
traffic, the government decided to procure a second concession for pilotage services in the port 
of Bar. Any new activity will need to aim at improving efficiency in ports and be conducted with 
due consideration of safety at sea and of the protection of the marine environment. Montenegro 
is also recommended to align with the acquis on ports and to adopt legislation based on the Port 
Services Regulation 2017/352. 

No  progress  was  made  on  the  alignment  with  relevant  EU  acquis  on  inland  waterway 
transport. Montenegro has not yet adopted the law on merchant shipping. It takes part in the EU 
Strategy  for  the  Danube  Region  and  since  July  2018  has  had  a  bilateral  agreement  with 
neighbouring Albania on the Ckla-Zogaj joint lake border crossing. Further efforts are needed to 
modernise and extend infrastructure in inland waterway transport and to ensure the proper level 
of navigability and safe navigation. 

On aviation, amendments to the Law on air transport , which should provide further alignment 
with the EU acquis on common rules for the operation of air services, are yet to be adopted. The 
new amendments will be instrumental in the successful completion of the first transitional phase 
of the European Common Aviation Area and the Single European Sky. However, there are still 
outstanding issues to be addressed on economic regulation. The tender procedure for the 30-year 
concessions  of  Tivat  and  Podgorica  airports,  launched  in  October  2019,  is  still  on-going.  The 
procedure will need to be in full compliance with State aid rules. The law granting EUR 155 000 
000 of state funding to Montenegro Airlines was adopted without a prior decision from the State 
aid authority, even though this is provided for under national legislation and the Stabilisation and 
Association  Agreement.  Montenegro  has  not  yet  made  payments  on  the  basis  of  this  law.  The 
government,  as  the  initiator  of  the  aid,  now  needs  to  provide  the  State  aid  authority  with  the 
necessary  information  and  time  to  take  a  qualified  decision  and  thus  to  demonstrate  its 
functioning and independence. The adoption of several rulebooks provided further alignment on 
air safety and air traffic operations. 

As  regards  combined  transport,  the  new  transport  strategy  prioritises  investment  in  the  main 
intermodal terminals. The legislation on combined freight transport from 2014 remains the main 
legal framework, but significant efforts are still needed on implementation and enforcement, in 
particular on incentives to road users and the establishment of intermodal terminals. 

5.15  Chapter 15: Energy  

EU energy policy covers energy supply, infrastructure, the internal energy market,  consumers, 
renewable energy, energy efficiency, nuclear energy and nuclear safety and radiation protection.  

Montenegro has reached a good level of preparation in this area. Some progress was made 
in the reporting period, namely on security of supply, with steps undertaken for modernisation 
of  existing  production  capacities,  on  the  creation  of  the  day-ahead  market  as  well  as  on 
moving renewable electricity production to market-based support schemes. However, the 2019 
recommendations remain valid. In the coming year Montenegro should, in particular:  

  create  or  join  a  functioning  day-ahead  market  and  couple  with  neighbouring  markets, 

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including Italy;  

  move  to  market-based  support  schemes  for  renewable  energy  production  and  streamline 

the permitting and connection procedures;  

  adopt the law on security of supply of oil products and set up the stockholding body for 

the mandatory oil stocks. 

On  security  of  supply,  Montenegro  has  an  energy  development  strategy  up  to  2030,  with  a 
2016-2020 action plan and a long-term energy balance for 2020-2022 adopted in July 2019. In 
December 2019, the government also adopted the energy balance for 2020. The revision of the 
2015  action  plan  on  compulsory  strategic  reserves  of  oil  and  petroleum  products  is  still 
pending, nonetheless Montenegro should commence the monthly reporting of oil data. The law 
on security of supply of oil products and the relevant implementing legislation remains pending, 
and  the  central  body  for  strategic  oil  reserves  still  needs  to  be  set  up.  The  current  level  of  oil 
stocks remains close to zero.  

An electricity interconnection with Italy was put into operation in November 2019, while others 
with Serbia and Bosnia and Herzegovina are planned.  

Elektroprivreda  Crne  Gore  (EPCG),  national  energy  producer,  and  Kreditanstalt  für 
Wiederaufbau  (KfW)  signed  in  September  2019  a  loan  agreement  for  the  reconstruction  and 
modernisation of the Perućica hydropower plant. The development of new projects, particularly 
on hydropower, should be carried out in conformity with the EU acquis on concessions, State aid 
and the environment. The tender for the ecological reconstruction of the Plevlja thermal power 
plant  was  awarded  to  a  Chinese-Montenegrin  consortium  for  about  EUR  54  000  000  in 
November 2019 and the contract was signed in June 2020.  

In  April  2019,  the  BELEN  power  exchange  established  a  strategic  partnership  with  NordPool; 
however  the  relevant  agreements  are  yet  to  be  signed.  The  launch  of  a  day-ahead  market  is 
expected  in  the  second  half  of  2020.  The  operation  of  a  power  exchange  and  market  coupling 
requires changes to the Montenegrin VAT law. 

As part of balancing netting, CGES, the country’s national transmission system operator, became 
an  observer  in  the  International  Grid  Control  Cooperation  and  applied  for  membership  of  the 
European  Tertiary  balancing  energy  cooperation  during  the  reporting  period.  Montenegro  has 
been a member of the European Network of Transmission System Operators in Electricity since 
the network’s inception. 

Further  alignment  was  achieved  with  the  EU  acquis  concerning  the  internal  energy  market, 
Regulations  were  adopted  on  conditions  for  connecting  consumer  facilities  to  the  energy 
transmission  system,  and  for  the  connection  of  electricity  producers  to  the  transmission  and 
distribution  networks,  as  well  as  and  on  the  grid  connection  of  high  voltage  direct  current 
systems  and  current-connected  power  par  modules.  Montenegro  should  implement  the 
Regulation on Wholesale Energy Market Integrity and Transparency as soon as possible. 

In June 2019, the government selected EPCG as the supplier of last resort and for the vulnerable 
groups; the contract was signed in November 2019. 

The Energy Regulatory Agency (ERA) is an operationally and financially independent authority. 
It regulates prices for electricity supplied to small customer and households, which are entitled to 
universal  service  based  on  market  prices  and  prices  of  grid  services.  On  the  other  hand, 

91 

 
wholesale electricity market prices are freely formed. ERA has been an observer in the Agency 
of  Cooperation  of  Energy  Regulators  since  January  2018.  ERA’s  overall  independence  still 
requires further improvement, since its statutes are subject to governmental approval. In addition, 
the  possible  penalty  levels  that  ERA  can  apply  are  significantly  below  the  required  10% 
threshold.  

On  hydrocarbons,  national  legislation  is  aligned  with  the  Hydrocarbons  Licensing  Directive, 
but  the  Safety  of  Offshore  Operations  Directive  is  yet  to  be  fully  implemented.  Investigation 
works in the submarine area started in November 2018 and have continued since then. Progress 
has been achieved on the preliminary design of the Ionian-Adriatic gas pipeline.  

On  renewable  energy,  in  2018  38.8%  of  gross  final  consumption  of  energy  came  from 
renewable sources, taking into account revision of biomass data. This exceeded the 33% target to 
be achieved by 2020 under Montenegro’s national action plan. While the 38.8% share remains 
high by EU and regional standards, it marks a downward trend in Montenegro and is the lowest 
figure since 2008. Montenegro is  yet  to  adopt  rules for auctions granting support to  renewable 
energy  producers  compliant  with  the  2014-2020  guidelines  on  State  aid  for  environmental 
protection  and  energy.  A  regulation  making  it  easier  for  individual  producers  to  invest  in  the 
creation of small-scale generation facilities is also lacking. 

In May 2019, the government adopted a regulation on incentives for electricity production from 
renewable sources and high-efficiency cogeneration. In July 2019, amendments were made to the 
regulation on implementation and incentives for electricity produced from renewable sources and 
high-efficiency cogeneration. 

In November 2019, the Ministry of Economy awarded a tender for the long-term lease of state-
owned land to a consortium led by WPD AG for the construction of a wind farm on the site of 
Brajići in Budva and Bar municipalities. The wind farm will have a minimum installed capacity 
of  70MW.  The  Možura  wind  farm  with  46MW  of  installed  capacity  was  put  into  operation  in 
November 2019. 

On  energy  efficiency,  amendments  to  the  Law  on  efficient  use  of  energy  to  ensure  further 
alignment with the EU Energy Efficiency Directive were  adopted in April 2019. In June 2019, 
the  government  adopted  the  fourth  energy  efficiency  action  plan  for  2019-2021.  Additional 
efforts  are  still  needed  to  fully  align  Montenegro’s  regulatory  framework  with  the  EU  Energy 
Performance of Buildings Directive and with the Labelling Regulation. That the Directorate for 
Energy  Efficiency  is  now  a  department  within  the  Directorate  for  Energy  must  not  reduce 
institutional  capacity  for  further  energy  efficiency  reforms,  inspection  supervision  and  local 
administration.  The  energy  efficiency  fund  has  not  been  established  yet.  There  have  been  no 
developments to report on improving statistical data collection, on putting in place a functional 
system  for  calculating  energy  efficiency  indicators  and  savings,  or  on  monitoring  the 
implementation of the current 2016-2018 energy efficiency action plan.  

On  nuclear  energy,  nuclear  safety  and  radiation  protection,  Montenegro  does  not  have  a 
nuclear  industry,  research  reactor  or  any  other  facility  producing  radioactive  materials,  and 
national legislation prohibits the construction of nuclear facilities. 

Montenegro is a party to the Convention on Nuclear Safety and to the Joint Convention on the 
safety of spent fuel management and on the safety of radioactive waste management. In August 
2019, the government  adopted the second national  report on the implementation of obligations 

92 

 
arising  from  the  Convention  on  Nuclear  Safety.  In  July  2019,  Parliament  adopted  the  laws  on 
ratification of the 2005 Protocols amending the Protocol on the Suppression of Unlawful Actions 
against  the  Security  of  Fixed  Platforms  in  the  Continental  Shelf  and  the  Convention  for  the 
Suppression of Unlawful Actions Against the Safety of Maritime Navigation. The International 
Atomic Energy Agency carried out an inspection of nuclear material in July 2019. 

The 2017-2021 strategy  and action plan for protection from  ionising radiation, radiation  safety 
and  management  of  radioactive  waste  is  under  implementation.  The  implementation  report  for 
2017-2018  was  adopted  by  the  government  in  December  2019.  The  Comprehensive  Law  on 
protection against ionizing radiation, radiation and nuclear safety and security, which will align 
with 13 relevant EU legislative acts, is pending adoption.  

On Community arrangements for the early exchange of information in the event of radiological 
emergency  (ECURIE),  Montenegro  has  provided  all necessary  information  and  progress  was 
made  towards  becoming  an  operational  member.  However,  Montenegro  is  yet  to  join  the 
European Radiological Data Exchange Platform, which is part of the ECURIE arrangements. 

The national regulatory body in the field of radiation and nuclear safety and security and ionising 
radiation is composed of eight members representing the Ministry of Sustainable Development 
and Tourism, the Ministry of the Interior, the Nature and Environmental Protection Agency and 
the Administration for Inspection Affairs. Montenegro has currently no intention to participate in 
the Capital and Advisory Committee of the Euratom Supply Agency, but is planning to become a 
member of the European Nuclear Safety Regulators Group. 

5.16  Chapter 16: Taxation  

EU  rules  on  taxation  cover  value-added  tax  and  excise  duties  as  well  as  aspects  of  corporate 
taxation. They also deal with cooperation between tax administrations, including the exchange of 
information to prevent tax evasion.  

Montenegro is  moderately prepared in the area of taxation. Good progress was made in this 
area. All but one of last year’s recommendations were met, and there was further progress on the 
recommendation  regarding  the  implementation  of  the  issues  highlighted  by  the  TADAT  (tax 
administration diagnostic assessment tool) analysis. 

  continue  to  implement  the  action  plan  addressing  the  issues  highlighted  by  the  TADAT 

analysis; 

  fully implement the WHO Framework Convention on Tobacco Control (FCTC) on marking 

tobacco products and alcoholic beverages with excise control stamp; 

  make further progress  on removing VAT and other tax excemptions  that are not  aligned to 

the EU acquis (TBC).   

Montenegro  is  implementing  its  action  plan  to  address  the  issues  highlighted  by  the  TADAT 
analysis.  By  27  December  2019,  of  the  172  activities  foreseen  in  the  action  plan,  62  had  been 
completed, 45 were ongoing, 18 were partly implemented, while 25 activities had not yet started. 
The rest may no longer be possible due to changes in the legal framework. 

Laws  on  the  fiscalisation  of  transactions  on  goods  and  services,  on  tax  advisors,  and  on 
contributions  for  compulsory  social  insurance  were  adopted  by  Montenegro  in  July  2019. 

93 

 
However, in December 2019 the changes regarding the fiscalisation of transactions on goods and 
services were postponed until January 2021. 

The Montenegrin tax administration is implementing its annual action plan for suppression of the 
grey  economy.  Between  January  and  December  2019,  it  conducted  2,646  tax  audits,  leading 
to€67  million  in  tax  adjustment,  and  issued  1,217  misdemeanour  orders  for  over  €1.9  million. 
The tax administration also updated its 2019-2022 business strategy in accordance with the EU’s 
fiscal blueprint, and established a reform committee and a risk management board to monitor its 
implementation. 

On indirect taxation, exemptions without the right to deduct VAT are still not aligned with the 
acquis and fuel for pleasure boats continues to be excise and VAT exempt. The government also 
adopted a number of tax measures relevant to COVID, such as establishing VAT  exeptions on 
imports of donated protective equipment, and deferral of duties, VAT, and tax collection. Some 
progress  was  made  in  terms  of  marking  tobacco  and  alcoholic  products  with  excise  control 
stamps.  In  terms  of  traceability  of  tobacco  products,  due  regard  should  be  had  to  international 
obligations  under  the  FCTC  Protocol  to  Eliminate  Illicit  Trade  in  Tobacco  Products.  On  31 
March  2020,  the  government  adopted  a  decree  laying  down  conditions  for  the  deferral  of  tax 
collection and non-tax claims, due to the negative impact on businesses caused by the COVID-
19 pandemic. 

On  administrative  cooperation  and  mutual  assistance,  in  October  2019  Montenegro  signed 
the  Multilateral  Convention  on  mutual  administrative  assistance  in  tax  matters.  Parliament 
ratified  the  Convention  in  December  2019,  when  Montenegro  also  joined  the  BEPS  Inclusive 
Framework. However, Montenegro still needs to adopt legislation to align with the EU acquis on 
the mandatory automatic exchange of tax information.  

On operational  capacity and computerisation, an e-fiscalisation project  under a World  Bank 
loan was launched by the tax administration. In 2019, three new departments were added to the 
tax  administration  (internal  audit,  international  cooperation  and  tax  police  dealing  with  tax 
evasion). 

5.17  Chapter 17: Economic and monetary policy 

EU  rules  require  the  independence  of  central  banks  and  prohibit  them  from  directly  financing 
the  public  sector.  Member  States  coordinate  their  economic  policies  and  are  subject  to  fiscal, 
economic and financial surveillance. 

Montenegro  remains  moderately  prepared  in  the  area  of  economic  and  monetary  policy. 
Limited progress  was  achieved on meeting last  year’s  recommendation, mainly in  the area of 
legal alignment and preparedness of the central bank for the integration with the ESCB. Limited 
capacity  and  insufficient  resources  of  the  Montenegrin  Statistical  Office  (Monstat)  slow  down 
progress in this chapter.  

In the coming year, Montenegro should in particular:  

  continue to implement the action plan for alignment with the EU acquis; 

  provide necessary resources and develop capacities of Monstat’s national accounts 

department; 

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  significantly improve cooperation between Ministry of Finance, Central Bank of Montenegro 
and Monstat on the division of tasks and production of statistics aligned with the ESA 2010 
methodology.  

Montenegro does not have standard monetary policy tools at its disposal, as it uses the euro as 
legal  tender.  This  leaves  fiscal  policy  as  the  main  macroeconomic  policy  instrument. 
Montenegro’s  use  of  the  euro,  which  was  decided  by  the  authorities  under  exceptional 
circumstances, is fully distinct from membership of the euro area.  

The Law on deposit protection, adopted in December 2019, ensured alignment with the EU rules 
prohibiting  privileged  access  by  the  public  sector  to  financial  institutions.  However,  a  similar 
prohibition in the Law on insurance is yet to be introduced.  

As  part  of  Montenegro’s  advancing  integration  with  the  European  System  of  Central  Banks 
(ESCB),  the  Central  Bank  of  Montenegro  opened  a  disaster  recovery  site  in  November  2019, 
with  support  from  EU  funds.  The  role  of  the  site  is  to  maintain  the  continuity  of  the  central 
bank's  business  functions  in  cases  of  serious  incidents  undermining  the  functioning  of  the 
banking system. 

On  economic  policy,  further  alignment  is  needed  with  the  EU  Directive  on  requirements  for 
medium  term  budgetary  frameworks.  Although  the  framework  is  in  place,  its  content  and 
reliability  still  requires  upgrades.  There  was  limited  progress  under  the  strategy  implementing 
the  2010  methodology  of  the  European  System  of  National  and  Regional  Accounts  standards 
(ESA  2010).  Moreover,  Montenegro's  fiscal  notifications  continue  to  be  incomplete,  and  still 
require substantial alignment with the EU requirements, particularly as regards excessive deficit 
procedure  data.  Progress  in  all  three  areas  is  particularly  hampered  by  limited  capacity  and 
insufficient  resources  of  the  Montenegrin  Statistical  Office,  Monstat.  Furthermore,  there  is  no 
systematic  cooperation  and  coordination  of  tasks  between  the  Ministry  of  Finance,  the  Central 
Bank  of  Montenegro  and  Monstat  on  the  production  of  necessary  statistics.    As  a  result, 
implementation deadlines are continuously deferred, while the last update to the national Action 
Plan on Chapter 17 provides for full alignment with ESA 2010 methodology only at the moment 
of the accession.  

Partial  implementation  of  the  2017  medium-term  fiscal  consolidation  strategy  maintained  the 
sustainability  of  public  finances  primarily  by  rising  budget  revenues.  Continued  efforts  are 
needed to contain public expenditure and reduce the level of public debt in order to comply with 
the fiscal rules. In June 2019, the Central Bank of Montenegro started publishing annual statistics 
on the international investment position and total external debt, a part of the data required under 
EU  Macroeconomic  Imbalance  Procedure  rules.  Initial  steps  were  also  taken  to  establish  an 
independent fiscal council. In the future, this body would assess and monitor the country’s fiscal 
policy.  

The government submitted its 2020-2022 Economic Reform Programme (ERP) on time. The 
reliability of the ERP fiscal planning and its linkage with 2020 budget has improved. However, 
additional  efforts  are  needed  to  further  upgrade  capacity  for  the  design  and  timely 
implementation of the economic policy measures. 

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5.18  Chapter 18: Statistics  

EU  rules  require  that  Member  States  are  able  to  produce  statistics  based  on  professional 
independence,  impartiality,  reliability,  transparency,  and  confidentiality.  Common  rules  are 
provided for the methodology, production and dissemination of statistical information.  

Montenegro is moderately prepared in the area of statistics. Some progress was made on last 
year’s  recommendations.  While  there  was  some  improvement  on  legislative  alignment,  on 
harmonising  the  statistical  methodology  with  EU  standards,  and  on  increased  transmission  of 
data,  notably  in  business,  social  and  agricultural  statistics,  some  of  the  2018  and  2019 
recommendations remain valid.  

In the coming year, Montenegro should in particular:  

→  considerably  strengthen  the  human  and  financial  resources  of  the  Statistical  office  of 
Montenegro (Monstat) so that it can fulfil its responsibilities and ensure staff retention;  

→  make  significant  progress  in  aligning  with  ESA  2010,  including  providing  government 
finance statistical data and all available excessive deficit procedure data. 

On statistical infrastructure, Monstat is the main producer and overall coordinator of statistics. 
The  professional  independence  of  Monstat's  director  (appointed  for  the  third  mandate  in 
September 2019) is enshrined in law. Amendments to the law on official statistics and statistical 
system were adopted in August 2019, enabling the use of the necessary data from administrative 
sources.  This  resolved  conflicts  within  national  legislation  regarding  the  use  of  data  from 
administrative  sources  for  statistical  purposes  and  further  aligned  it  with  European  statistical 
standards.  

A new 17-member Council for the statistical system (including representatives from the Ministry 
of Health for the first time) was appointed in July 2019 for five years. Although the 2019-2023 
strategy  for  official  statistics  is  being  implemented,  Monstat’s  financial  and  administrative 
capacities remained very limited and deteriorated in the reporting period. Only around 95 of 180 
available  posts  (the  staffing  plan  was  reduced  from  200  to  180  in  the  public  administration 
reform optimisation process) are filled, nine less than the year before, with only seven staff in the 
Department  of  National  Accounts.  The  building  hosting  Monstat  remains  inadequate  and  this 
situation still needs to be addressed. 

In the reporting period, Monstat continued to work on a robust basis for the coordination of other 
national  authorities  producing  official  statistics.  It  also  improved  its  cooperation  with 
administrative data providers by the signature of five new memoranda of understanding (i.e. with 
the University of Donja Gorica (a private University), the Ministry of Public Administration, the 
Ministry of Science, Chamber of Commerce of Montenegro, and the Ministry of Sport), bringing 
the total number of memoranda to 24. 

Data  transmission  to  Eurostat  continued  to  increase.  Limited  progress  was  achieved  on 
macroeconomic statistics and alignment with ESA 2010: Monstat has transmitted annual (2006-
2018)  and  quarterly  (Q1  2010  to  Q2  2019)  GDP  figures  using  the  output  and  expenditure 
approaches in current and previous year’s prices to Eurostat, and started sending partial data for 
the  annual  GDP  using  the  income  approach  (2013-2018).  However,  considerable  work  is  still 
needed to improve compliance with the ESA 2010 methodology.  Seasonally adjusted quarterly 
national accounts are not available. Annual sector accounts have low compliance, though further 

96 

 
progress  is  being  supported  by  EU  funding.  Some  progress  was  made  in  national  accounts  by 
providing  annual  and  quarterly  data  on  employment  in  persons.  However,  the  absence  of 
employment data (hours worked; wages and salaries) is considered a serious gap.  

Considerable  efforts  are  also  needed  to  develop  government  finance  statistics  (GFS)  and 
financial  accounts;  there  was  no  progress  in  the  reporting  period.  Excessive  deficit  procedure 
(EDP) tables are sent to Eurostat since October 2014, but several tables remain blank and do not 
allow meaningful assessment. GFS and EDP are priority areas and also represent a basis for data 
in  other  areas  (like  national  accounts).  The  lack  of  this  data  hinders  further  development  with 
ESA 2010. The development of the roadmap for the rest of the tables in ESA 2010 needs to be 
given more attention. 

The central bank compiles statistics on the balance of payments, foreign direct investment, and 
statistics  on  trade  in  services,  partially  aligned  with  the  EU  acquis.  It  also  released  data  on 
external debt (for the period 2010-2018) for the first time as well as net international investment 
position (NIIP) for 2016-2018. In 2019, Monstat sent Eurostat its first data on international trade 
in services by country (for 2013-2018). The harmonised indices of consumer prices are medium 
compliant and aggregation inconsistencies prevent Eurostat from disseminating data. As regards 
the purchasing power parities framework it is largely compliant with EU standards.  

On  business  statistics,  Monstat  sends  Eurostat  a  number  of  structural  business  statistics,  but 
further  work  is  needed  on  their  compliance.  Short-term  statistics  improved  and  are  now 
satisfactory, but  foreign  affiliates' statistics were  not  sent  to  Eurostat. The Business Register is 
largely compliant and the PRODCOM list is fully compliant with EU standards. Submission of 
transport  statistics  to  Eurostat  continued,  including  detailed  reporting  on  railway  and  maritime 
transport statistics and road freight. Research and development data are partially in line with the 
EU acquis. Tourism statistics are largely compliant with EU standards.  

During the reporting period, in the area of  social statistics, preparations continued for the 2021 
population  and  housing  census.  Monstat  obtained  access  to  all  identifiers  of  the  population 
register in August 2019; however, the address register is not yet established. Monstat performed 
a  pilot  census  using  traditional  methods  in  April  2019  -  the  most  likely  solution  is  that  a 
traditional census  will be held,  along with  a pilot  register-based  census.  The survey  of income 
and living conditions (EU-SILC), the Labour Force Survey (LFS) and crime statistics are largely 
compliant  with  EU  standards.  On  social  protection  data  (ESSPROS),  Monstat  is  improving  in 
this  regard,  but  there  is  still  work  to  do.  Data  availability  on  migration  should  be  further 
improved with data on migrant populations, acquisition of citizenship, and on emigration of non-
nationals.  Transmission  of  data  for  the  enforcement  of  immigration  legislation  (EIL)  statistics 
and residence permit data is yet to start. A gender equality index, based on European Institute for 
Gender Equality, was published for the first time in January 2020. As for public health statistics, 
Montenegro is not considered compliant and needs to put efforts to improve. 

Progress  continued  in  agricultural  statistics,  with  the  completion  in  October  2019  of  a  pilot 
agricultural census, but a full agricultural census is now only planned for 2022.  

Energy  statistics  are  mostly  compliant  with  EU  standards.  In  environmental  statistics,  waste 
statistics are compliant with Eurostat requirements.  

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5.19  Chapter 19: Social Policy and employment  

EU rules in the social field include minimum legal labour standards, equality, health and safety 
at work and non-discrimination as well as promote social dialogue.  

Montenegro has  some level  of preparation  on social  policy  and employment.  Good progress 
was made during the reporting period with forward steps being made, illustrated by the adoption 
of the new labour law.  

In the coming year, Montenegro should, in particular:  

  implement  the  revised  labour  law,  revise  the  anti-discrimination  law,  and  introduce  better 
quality  employment  measures  aimed  at  young  people,  women,  disabled  people,  and 
minorities;  

  make greater efforts to address the grey economy, and more actively address issues related to 

safety at work; 

  further  the  support  to,  and  reform  of,  social  protection,  based  on  evidenced  based  policies 

with stronger links to both employment activitation and social inclusion.  

The revised labour law, intended to improve the functioning of the labour market was adopted 
by  Parliament  in  December  2019.  The  law  introduces  a  range  of  reforms  including, 
simplification  of  dismissal  procedures  and  extension  of  fixed  term  contacts  (from  24  to  36 
months), with greater protection of workers, while increased sanctions for undeclared work aims 
to  reduce informality. The labour law and the linked anti-discrimination law are planned to  be 
further  aligned  with  the  EU  acquis  in  this  area  during  2020.  Given  its  relevance  both  as  a 
structural  reform  measure,  and  as  one  of  the  key  pieces  of  legislation  to  align  with  the  EU 
acquis,  implementation  and  monitoring  of  the  labour  law  should  be  a  priority.  Strengthened 
capacities  of  labour  inspection  services  and  enhanced  coordination  between  labour  inspectors 
and the Ministry of Labour and Social Welfare will be required in order to ensure that the change 
of the law will have an impact.   

On  social  dialogue  the  Laws  on  Social  Council  and  on  the  on  representation  of  trade  unions 
were  adopted  in  2018  and  while  there  was  good  cooperation  on  the  labour  law,  more  time  is 
needed  to  see  if  representation  and  consultation  with  social  partners  improves.  Similarly, 
continuing  focus needs to  be placed on protecting workers rights,  preventing discrimination  of 
trade union activities, and in ensuring that the foreseen general collective bargaining agreement 
is concluded with due consultation process as soon as possible during 2020.  

Concerning health and safety at work, the first ever Centre for professional rehabilitation was 
opened  in  October  2019  in  Podgorica.  The  National  Health  Institute  has  limited  impact  to 
monitor  relevant  legislation,  due  to  the  fact  that  responsibilities  have  been  spread  amongst 
different institutions. A working  group for drafting Amendments to the the Rulebook on safety 
requirements for the workplace has been establised and it is expected to submit its work by the 
end of 2020. The occupational safety and health fund foreseen under the sector strategies (2010-
2014 and 2016-2020) has not yet been established. From 1 January 2019 to 30 April 2020, there 
were 24 accidents at work, of which eight were fatal, 15 were serious, while one was reported as 
a collective accident.  

On  employment  policy,  Montenegro  continues  to  implement  its  national  strategy  for 
the 
resources  development  however, 
employment  and  human 

the  effectiveness  of 

98 

 
implementation  remains  difficult  to  assess  due  to  lack  of  systematically  collected  data  via 
monitoring  and  evaluation  activities.  The  unemployment  rate  stagnated  at  15.2%  in  2019. 
According to the 2019 Labour Force Survey data, the activity rate continues to improve, but is 
still low at 57.4%, while regional disparities persist, with unemployment disproportionately high 
in  the  north  with  36.3%  as  compared  to  5.5%  in  the  coastal  region.  Long-term  unemployment 
remains a major structural challenge, with 63% of the unemployed being out of work for more 
than two years. The most vulnerable groups on the labour market remain women, youth, Roma 
and low skilled workers. Of these the Roma and Egyptian community make up around 2% of the 
total registered unemployed. 

The  foreseen  EU  financed  support  to  the  Employment  Agency  should  help  it  enhance  its 
capacities  and  ensure  a  more  efficient  human  resources  management.  In  parallel,  there  is  still 
insufficient effectiveness and coverage of active labour market policies which should be in place 
to assist jobseekers finding sustainable employment, with particular focus on re- and up-skilling. 
Moreover, strengthening employment activation by building stronger links between employment 
and social services, as well as links between vocational and higher education, remains crucial for 
increasing  employment  and  removing  potential  disincentives  to  work.  The  fund  for  the 
Professional Rehabilitation and Employment of Persons with Disabilities is still not making the 
required impact, while the related draft law still requires revision. As a result, the adoption of the 
rulebook defining a range of work related provisions for disabled persons is not in place and full 
transparency of the use of the Fund is not yet established. In June 2020, the Government adopted 
the  proposal  to  establish  the  Council  for  the  care  of  persons  of  disabilities.  On  the  informal 
economy, sustained efforts are still needed to tackle all forms of informality along with further 
reinforcement  of  labour  inspections.  Moreover,  the  Government  must  still  adopt  a  new  action 
plan  to  better  coordinate  efforts  from  different  institutions  involved,  including  those  at  central 
and local level. In addition, while there are plans underway, the Labour Market Information IT 
system  of  the  Employment  Agency  has  yet  to  be  updated.  Focus  should  be  placed  on 
implementing commitments taken under the Roma integration Road Map 2019-2021 to promote 
the formalisation of work. At present there is still not a follow up system in place to review its 
functioning  and  its  impact.  In  April  2020,  the  Government  adopted  the  Report  on  the 
Implementation  of  the  Action  Plan  for  Employment  and  Human  Resources  Development  for 
2019. 

As  regards  European  Social  Fund  (ESF)  preparations,  implementation  of  the  second 
operational programme for human resources development (2015-2017) is on-going. This focuses 
on education, research, employment and social policies and aims at enhancing capacities within 
state bodies with a view to preparing their readiness to manage the ESF in the future. In parallel 
and  in  view  of  the  COVID-19  pandemic  a  reallocation  by  the  EU  and  the  Montenegrin 
authorities was re-directed towards addressing social and economic needs. 

On social inclusion and protection, the Action Plan 2020 for Implementation of the Strategy for 
Development of the Social and Child Protection System 2018-2022 and the Action Plan for 2020 
to implement the Strategy for Development of the Social Welfare System for the Elderly 2018-
2022 were adopted in January 2020. While some measures from relevant action plans have been 
implemented, there are as yet no adequate monitoring mechanisms and reports available and so 
the  conditions  for  evidence-based  policymaking  are  still  not  in  place.  Centres  for  social  work 
need  strengthened  capacities,  in  order  to  support  the  transition  from  institutional  service 
provision to community-based care for children with special needs, persons with disabilities and 

99 

 
the elderly. While many services are provided by civil society organisations and are funded via 
projects, some by-laws prevent these organisations obtaining the proper licenses for these types 
of services. Additionally, the survey of income and living conditions (SILC) statistics released in 
December 2019 still showed high risk of poverty and social exclusion with a figure of 31.4%, for 
2018 signifying a 2.3 percentage point decrease compared to 2017. The Institute for Social and 
Child Protection continues to lack resources and social services provided at local levels are still 
deemed inadequate. The planned review of the social protection system is still needed in order to 
provide a clearer overview of how to help ensure to provide for social support and assistance to 
those in need while reinforcing links with employment activation. Additional efforts are needed 
to  fulfil  the  recommendations  of  the  report  of  the  UN  Committee  on  Economic,  Social  and 
Cultural Rights, notably regarding the amount of social benefits and adequate standard of living 
for socially vulnerable people, and particularly the unemployed and homeless people. Protocols 
adopted  in  relation  to  COVID  -19  preventive  measures  in  social  and  child  welfare  institutions 
seem to have been effective so far, as no beneficiaries were reported to have been infected during 
the  reporting  period.  On  de-institutionalisation  of  children  in  care,  not  enough  has  been 
achieved so to ensure that Montenegro continues successfully to set up community and family-
based services. Greater efforts still have to be put in place so to ensure that a professional foster 
care system is in place for the future.   

On non-discrimination in employment and social policy, some civil society organisations are 
still in the process of accreditation so that they can provide certain services, but at this stage their 
overall number remain low. Such obstacles affect  the capacity of civil  society  organisations to 
conclude durable partnerships for service provision with line ministries. Furthermore no official 
reports  on  the  implementation  of  the  Roma  and  Egyptians  social  inclusion  strategy  and  action 
plan are yet available and there remains insufficient evidence of the required advancement on the 
ground. Further efforts are needed so to have in place sustainable and effective services available 
to  the  Roma  and  Egyptian  community  and  related  monitoring  and  reporting  should  also  be 
improved.  While  there  has  been  progress  with  regard  to  the  rights  of  lesbian,  gay,  bisexual, 
transgender  and  intersex  (LGBTI)  cooperation  between  the  Ministry  of  Labour  and  Social 
Welfare and the LGBTI community should still be strengthened, in particular with regard to the 
social  and  health  sectors,  so  to  ensure  effective  implementation  of  the  new  LGBTI  strategy 
(2019-2023) for which a national team for monitoring implementation was established in August 
2019. Public hearings on the revisions of the anti-discrimination law were held in March 2020. 
Despite this, throughout  Montenegro, civil  society  organisations remain insufficiently  involved 
in decision-making 

On  equality  between  women  and  men  in  employment  and  social  policy,  notwithstanding 
measures which have been put in place, women remain vulnerable to discrimination in the labour 
market, resulting in lower participation and lower income generation rates and, in turn, hindering 
access  to  long-term  employment  contracts  and  access  to  paid  maternity  leave.  Issues  such  the 
gender  gap  in  employment  and  pay,  sexual  harassment  in  the  workplace,  affordable  childcare, 
unpaid  work  and  tax  benefit  systems  remain  largely  unaddressed.  Continued  focus  must  be 
placed  on  pro-women  initiatives,  on  tailor  made  active  labour  market  measures  which  target 
women, and on legislative and non-legislative measures focused on work-life balance.  

5.20  Chapter 20: Enterprise and industrial policy  

EU industrial policy enhances competitiveness, facilitates structural change and encourages an 
enterprise-friendly environment that stimulates small and medium sized enterprises. 

100 

 
Montenegro  is  moderately  prepared/has  a  good  level  of  preparation  on  enterprise  and 
industrial  policy.  Some  progress  was  made  on  meeting  last  year’s  recommendations,  in 
particular on the sector policy, with the adoption of a revised industrial policy. Both inter and 
intra-ministerial cooperation on technical and political level should be significantly increased 
to  ensure  consistency  and  coherence  between  different  national  key  strategies  and 
programmes, in particular on industrial policy, smart specialisation and the Economic Reform 
Programme. 

In the coming year, Montenegro should in particular: 

  focus  on  the  implementation  of  revised  industrial  policy,  in  cooperation  with  relevant 

stakeholders; 

  ensure continuous coordination of the industrial policy with other national key strategies. 

On  enterprise  and  industrial  policy  principles,  amendments  to  the  law  on  tourism  and 
hospitality  were  adopted  in  April  2019.  Montenegro  is  not  yet  aligned  with  the  EU  acquis  on 
combating late payments and is encouraged to continue the efforts, initiated in 2019, towards full 
alignment.  

On  enterprise  and  industrial  policy  instruments,  Montenegro  continued  implementing 
programmes  for  cluster  development,  regional  and  local  competitiveness  and  modernisation  of 
the manufacturing industry, providing small  grants  and financial assistance to  projects  in  these 
areas.   The  Investment  and Development  Fund of Montenegro (IDF) provided financing worth 
EUR 241 million to the Montenegrin enterprises. In addition, the IDF signed an agreement with 
the  European  Investment  Fund  on  access  to  the  Loan  Guarantee  Facility  (LGF)  of  the  EU 
programme  for  the  Competitiveness  of  Enterprises  and  SMEs  (COSME).  The  loan  guarantees 
available under the agreement total EUR 75 million over a three-year period. Organisations from 
Montenegro  successfully  participate  in  the  COSME-financed  programmes  Enterprise  Europe 
Network and Erasmus for Young Entrepreneurs. 

On sector policies, following the completion of a a mid-term review of the 2016-2018 Industrial 
Policy  in  March  2019,  the  government  adopted  in  October  2019  a  revised  Industrial  Policy  of 
Montenegro for 2019-2023 and accompanying 2019-2020 action plan. Four strategic goals from 
the original 2016  Industrial Policy were retained, with  some updates to  their focus. The action 
plan  allocates  some  EUR  811  million  in  funds  for  2019  and  2020,  although  some  35%  of  this 
amount  is  expected  to  come  from  the  private  sector  and  donors.  The  plan  places  very  heavy 
emphasis on access to funding and financial assistance to beneficiary companies, mainly through 
the  IDF,  and  on  the  financing  of  projects  in  the  energy  and  tourism  sectors.  Two  of  the  four 
strategic  goals  -  access  to  international  markets  and  stimulating  innovation,  technology  and 
entrepreneurship  -  receive  together  only  10%  of  the  intended  funding.  In  June  2019,  the 
government  adopted  the  2019-2024  Smart  Specialisation  Strategy  (S3)  (see  Chapter  25).  It 
aims  to  strengthen  the  industrial  policy  by  improving  the  development  of  an  innovation  eco-
system  through  science-based  innovation  in  a  territorially  balanced  way.  Teams  and  policy 
makers responsible for the Economic Reform Programme, the S3 and Industrial Policy strategies 
should fully cooperate to ensure consistency and coherence in the implementation of these three 
key policies. 

In April 2020, the government adopted a programme of support for the economy and employees, 
to  mitigate  the  negative  consequences  of  COVID-19  pandemic.  The  programme  includes  six 

101 

 
types of subsidies, supporting over 100,000 employees in micro, small and medium enterprises. 
The  subsidies  are  aimed  at  entrepreneurs  and  employees  of  companies  whose  operations  were 
closed  down  or  significantly  reduced  because  of  the  measures  introduced  by  the  Ministry  of 
Health.  

5.21  Chapter 21: Trans-European networks 

The  EU  promotes  trans-European  networks  in  transport,  telecommunications  and  energy  to 
strengthen the internal market and contribute to growth and employment. 

Montenegro remains  moderately  prepared/has  a  good level  of preparation in the area of 
trans-European networks. Some progress was made in the reporting period, in particular on 
the  2019  recommendation  concerning  the  adoption  of  the  Transport  Development  Strategy 
for the period 2019-2035. However, the 2019 recommendations remain predominantly valid, 
and in the coming year Montenegro should in particular:  

  continue  implementing  the  new  Transport  Development  Strategy  with  its  annual  action 

plan; 

  strengthen  the  administrative  capacities  for  trans-European  networks  in  the  areas  of 

transport, telecommunications and energy; 

  continue harmonising the legal framework with TEN-T and TEN-E Regulations. 

On transport networks, Montenegro takes part in the Transport Community Treaty (TCT) and 
continues  to  participate  in  the  Western  Balkans  Six  Connectivity  Agenda.  It  is  involved  in  the 
TCT  Regional  Steering  Committee  meetings  as  well  as  other  TCT  technical  committees  (the 
railway,  road  safety,  transport  facilitation  and  road  technical  committees).  The  Montenegrin 
authorities are encouraged to continue and intensify cooperation under the Transport Community 
Treaty. 

The  new  2019-2035  transport  development  strategy  and  its  action  plan  for  2019-2020  were 
adopted in June 2019. Its ambitious financing plan includes a number of core network projects 
and hinges on the assumption that significant financing will be raised through private capital. 

In  July  2019,  the  government  adopted  an  updated  single  project  pipeline,  which  includes  56 
projects in the energy, transport, environment and social sectors as well as digital infrastructure 
for a total estimated cost of EUR 5.1 bn. However, the cost estimate of transport projects has not 
been updated since 2017. 

On  infrastructure  development,  construction  of  the  Bar-Boljare  highway  continued  on  the 
priority  section  between  Smokovac  and  Matesevo.  The  projects  is  being  implemented  in  the 
context  of  the  trans-European  transport  network  (TEN-T),  which  is  part  of  the  indicative 
extension  of  the  Orient  East-Med  corridor  in  the  Western  Balkans.  The  priority  section  of  the 
highway,  which  is  being  implemented  with  a  Chinese  loan,  has  suffered  additional  delays  and 
cost  overruns,  aggravated  by  the  COVID-19  outbreak.  It  is  now  expected  to  be  completed  by 
June 2021. 

Under the Western Balkans Investment Framework, Montenegro applied for co-financing for the 
construction of the second section of the highway. However, the application is on hold pending 
the finalisation of the cost-benefit analysis for the entire Bar-Boljare highway. The study which 

102 

 
 
has  encountered  delays,  is  expected  to  set  recommended  standards  and  suggest  means  of 
financing for the remaining sections.  

Progress  continued  on  studies  for  the  design  of  the  Adriatic-Ionian  highway,  albeit  with  some 
delays.  The  upgrading  of  the  Bar-Vrbnica  railway  continued  with  EU  funding.  In  June  2019, 
WBIF  approved  a  EUR  3  000  000  grant  to  prepare  a  comprehensive  design  study  and  tender 
documentation for the Golubovci–Bar section of the railway.   

Current and future infrastructure investments need to fully comply with EU standards on public 
procurement, State aid and environmental impact assessment. Additionally, investments need to 
be  implemented  in  accordance  with  cost-benefit  analyses  carried  out  in  line  with  EU  best 
practice. 

In the Ministry of Transport and Maritime Affairs the institutional framework changed with the 
creation  of  a  road  administration  responsible  for  the  development  and  maintenance  of  national 
major  and  regional  roads.  The  state-owned  company  Monteput  remains  responsible  for  the 
development  of  highways  and  large  scale  road  infrastructure,  notably  the  Adriatic  -Ionian 
expressway. 

On  rail  transport,  in  April  2019  the  Railway  Directorate  was  reorganised  into  the  Railway 
Administration  to  function  as  an  independent  administrative  authority.  However,  practical 
implementation  of  safety  and  regulatory  tasks  still  needs  to  be  set  out  specifically  in  the 
legislative  framework,  given  that  the  planned  new  railway  law  is  yet  to  be  adopted.  The 
administrative and technical capacity of the four state-owned companies remained limited.  

On  energy  networks,  progress  continued  on  interconnecting  the  electricity  systems  of  Serbia, 
Bosnia  and  Herzegovina,  Italy  and  Montenegro.  This  project  is  included  on  the  projects  of 
energy community interest list. The undersea cable interconnector between Montenegro and Italy 
became operational in November 2019. Work continued, with EU funding, on the concept design 
for  the  Ionian-Adriatic  pipeline’s  routes  through  Montenegro  and  Albania,  with  the  aim  of 
finalising  the  study  by  September  2020.  The  project  features  on  the  list  of  projects  of  mutual 
interest. Some progress on energy connectivity measures continued in the reporting period.  

Montenegro  is  yet  to  fully  align  its  legislation  with  the  TEN-T  and  TEN-E  EU  acquis. 
Legislative  gap  analysis  and  institutional  capacity  mapping  is  pending.  On  the  trans-European 
communication networks, the Law on electronic communications is aligned with the EU acquis. 

5.22  Chapter 22: Regional policy and coordination of structural instruments  

Regional  policy  is  the  EU’s  main  investment  policy  for  sustainable  and  inclusive  economic 
growth.  Member  States  bear  responsibility  for  implementation  which  requires  adequate 
administrative capacity and sound financial management of projects' design and execution. 

Montenegro is moderately prepared regarding regional policy and coordination of structural 
instruments. Limited progress was made over the reporting period particularly with view to 
planning  and  procurement  which  still  need  to  be  strengthened,  and  project  preparation  and 
strategic planning capabilities still need to improve. 

In the coming year, Montenegro should in particular: 

  enhance  efforts  to  implement  the  EU  pre-accession  programmes  funding  under  indirect 

management; 

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  continue  implementation  of  the  action  plan  for  meeting  requirements  deriving  from  EU 

cohesion policy; 

  improve the capacities for project planning and preparation, with special emphasis on the 

single project pipeline. 

On  the  legislative  framework,  the  law  on  public  private  partnership  entered  into  force  in 
January  and  as  a  result  a  National  Investment  Agency  was  created,  while  the  Secretariat  for 
Development  Projects  ceased  to  exist.  The  role  of  the  Technical  Secretariat  of  National 
Investment  Committee  (formalised  by  adopting  amendments  to  the  Rulebook  on  internal 
organisation of the European Integration Office) has accordingly been transferred to the National 
IPA Coordinator. This may be a positive development, as it impacts directly on its supervisory 
role  of  the  Single  Project  Pipeline,  which  is  linked  to  the  Western  Balkans  Investment 
Framework.  The  law  on  public  procurement  was  also  adopted  in  December.  Both  laws  were 
however  adopted  without  by-laws,  rendering  them  unable  to  be  implemented  at  present. 
Alignment with key parts of the EU acquis under other chapters remains a prerequisite for proper 
implementation of EU structural and investment funds.  

On institutional framework, the existing situation with regards to the management of EU pre-
accession assistance (IPA) remained unchanged. With the roll out of IPA II and the development 
of IPA III, it is essential that capacities and resources continue to be strengthened.   

On  administrative  capacity,  staff  has  been  recruited  in  the  contracting  agencies,  but  the 
capacity of line ministries, for example the Ministry of Sustainable Development and Tourism, 
remains low. This creates a risk to the timely implementation of projects under its competence 
which  are  relevant  for  accession.  Compared  with  the  previous  period,  some  improvements  are 
noted  in  relation  to  retention  policy,  and  in  March  2019  a  governmental  decree  has  been 
implemented to allow for a 30% top up of the salaries of the employees who work with IPA. The 
working  sector  group  on  this  chapter  met  several  times  during  the  year  to  discuss  the 
recommendations of the previous Country Report, but no concrete outcomes from this group are 
yet visible.  

On  programming,  the  country  continued  its  work  on  the  sectoral  approach  under  IPA  II.  A 
revised  single  project  pipeline  has  been  approved  in  July  2019,  however,  the  lack  of  project 
maturity  hinders  future  programming  and  implementation.  Capacities  for  the  management  of 
capital/infrastructure investments remain weak, particularly at the level of line ministries.  

Regarding  monitoring  and  evaluation,  the  relevant  committees  set  up  under  indirect 
management  continue  to  meet  regularly.  The  pace  of  contracting  programmes  under  indirect 
management remains slow. 

As for the financial management, control and audit, the government approved the first step for 
establishing  the  Management  and  Information  System.  The  capacity  of  the  Audit  Authority 
improved while the internal  audit for the whole IPA system has been assigned to  a specialised 
unit  in  the  Ministry  of  Finance,  thus  replacing  the  units  within  each  ministry,  as  decided  by 
governmental decision on internal audit in the public sector.  

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5.25  Chapter 25: Science and Research 

The EU provides significant support to research and innovation. All Member States can benefit 
from  the  EU’s  research  programmes,  especially  where  there  is  scientific  excellence  and  solid 
investment in research.  

Montenegro has a good level of preparation in this sector. Good progress was made on the two 
2019 recommendations through the adoption of the Smart Specialisation Strategy and a marked 
improvement in Horizon 2020 participation.  

In the coming year, Montenegro should in particular: 

→ continue to implement the Smart Specialisation Strategy; 

→  intensify  investment  in  research  and  innovation  and  continue  to  increase  participation  in 
Horizon 2020.  

On  research  and  innovation  (R&I)  policy,  implementation  of  the  strategies  continued, 
including support measures to stimulate an innovation culture, two pre-accelerator programmes 
for  innovative  start-ups,  and  work  on  legislative  amendments  to  introduce  stimulating  fiscal 
measures. Positive steps were also taken towards ‘open access’ by adopting the revised national 
research  infrastructure  roadmap  as  well  as  a  national  Programme  for  implementation  of  open 
science principles.  

Montenegro has a  growing scientific base and the level  of funding has been rising since 2017. 
R&I  funding  access  has  improved  through  training  support  to  access  international  funding. 
Research and development (R&D) funding increased to 0.50% of GDP in 2018 (up from 0.37% 
in 2017).  

In  May  2020,  Montenegro  was  included  in  the  European  Innovation  Scoreboard  as  a  modest 
innovator,  marking  an  important  step  in  improving  its  statistical  system  and  monitoring  the 
implementation of the Smart Specialisation Strategy of Montenegro 2019-2024.  

In  January  2020,  the  University  of  Montenegro  (UoM)  was  awarded  the  ‘HR  Excellence  in 
Research Award’, acknowledging that it adheres to some human resources principles as set out 
in the European charter and code for researchers. To progress further, UoM must now implement 
the  recommendations  received.  Two  new  centres  of  excellence  (covering  food  science  and 
biomedical  science)  started  operating  in  January  2020,  with  funding  of  €1.8m  earmarked  over 
three years. 

In  June  2019,  Montenegro  was  the  first  country  in  the  region  to  adopt  a  smart  specialisation 
strategy  (S3),  covering  the  period  2019-2024  and  prioritising  the  areas  of  agriculture,  energy, 
health,  tourism  and  ICT.  The  S3  has  high  political  backing  and,  with  careful  management  and 
monitoring,  has  the  potential  to  generate  economic  growth  by  developing  the  country’s 
competitive advantages through an innovative approach. To this end, Montenegro should follow 
up  on  the  technical  recommendations  resulting  from  a  conditional  positive  assessment  by  the 
European Commission  (December 2019) and ensure sustained and close collaboration between 
all relevant stakeholders.  

The  Innovation  and  Smart  Specialisation  Council  was  established  in  August  2019  while  its 
secretariat started operations in March 2020.  A new Law on innovation activities was adopted 
which  provides  for  the  establishment  of  an  Innovation  Fund  to  act  as  separate  agency  focused 

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specifically on S3 implementation. A Law on incentives for R&I development was also adopted, 
An  online  platform  was  launched  (www.s3.me)  to  enable  communication  and  visibility  of  S3 
related activities. The 2019-2024 ‘collaborative innovation programme’ is one instrument for S3 
implementation,  aiming  to  transfer  scientific  R&I  ideas  from  the  academic  community  to  the 
economy and include promising start-ups linked to S3 priority domains in future calls. 

In  response  to  the  COVID-19  related  pandemic,  the  Ministry  of  Science  launched  a  call  for 
research projects in the area of health and socio-economic recovery (€200 000). Along with the 
Innovation  and  Entrepreneurship  ‘Tehnopolis’  centre  and  the  newly  established  scientific–
technology  park  of  Montenegro,  the  Ministry  coordinated  the  work  of  3-D  laboratories  in 
academic and private sectors for the joint production of personal protective equipment.  

The country’s participation in Horizon 2020 has improved and shows a very good trend for 2019, 
receiving  EUR  3.2  m  of  direct  EU  contribution  and  reaching  a  success  rate  of  13,9%  as 
compared to 12% for the overall Horizon 2020 programme.   

Through  the  EU  instrument  of  pre-accession  assistance  (IPA),  13  projects  were  selected  under 
the collaborative grant scheme for innovative project ideas, and contracts were signed in March 
2020 for equipping the three laboratories at Tehnopolis and for construction works at the science 
and technology park.   

Montenegro  engages  actively  with  international  bodies  such  as  COST,  CERN,  IAEA,  and 
EUREKA,  which  should  produce  positive  effects  on  business-academia  cooperation. 
Montenegro  is  committed  to  continue  participating  in  the  European  Social  Survey    European 
Research Infrastructure Consortium (ESS-ERIC). 

5.26  Chapter 26: Education and culture  

The  EU  supports  cooperation  in  education  and  culture  through  funding  programmes  and  the 
coordination of Member State policy through the open method of coordination. The EU and the 
Member  States  must  also  prevent  discrimination  and  ensure  quality  education  for  children  of 
migrant workers, including those from disadvantaged backgrounds.  

There  is  a  good  level  of  preparation  in  this  area.  Some  progress  was  made  on  the  2019 
recommendations  on  enrolment  rates  in  early  childhood  education  and  care,  learning 
outcomes and Vocational Education and Training.  

In the coming year, Montenegro should in particular: 

  continue to improve enrolment in early childhood education and care and minimise drop-

outs, especially of vulnerable groups; 

  improve  education  sector  governance  and  continue  with  relevant  reform  measures  to 

improve the overall quality of education; 

  establish  an  adequate  monitoring  and  evaluation  mechanism  of  practical  learning  at 

vocational and higher level education.  

On  education  and  training,  implementation  of  the  numerous  education  strategies  continued. 
Latest  figures  (2018)  show  spending  on  education  at  4%  of  GDP.  Investments  in  school 
infrastructure  and  equipment  resulted  in  new  schools  being  built  or  refurbished,  with  further 

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projects in the pipeline. Though works to remove architectural barriers were completed at several 
schools during 2019, physical accessibility remains an important issue to address. 

The  importance  of  early  childhood  education  and  care  (ECEC)  continued  to  be  promoted  and 
kindergarten outreach services are available in some rural areas. Participation rates for 0-5 year 
olds showed a small increase from 48% in 2018 to 52% in 2019. To capitalise on the long-term 
social and economic benefits that ECEC can provide, the new preschool strategy currently under 
preparation should aim to substantially increase the enrolment figure (closer to the EU 95% goal) 
and  invest  more  in  qualified  educators  to  prepare  children  for  entry  to  compulsory  education, 
especially those from vulnerable groups.  

The  Ministry  of  Education  launched  a  scholarship  competition  for  Roma  and  Egyptian  high 
school and faculty students in September 2019. Albeit increased attendance rates and fewer drop-
out cases can be observed since 2016, the overall number of school-going Roma and Egyptian 
children, and children with disabilities, remains low; most concerning is the low level of Roma 
and  Egyptian  children  completing  compulsory  education.  In  this  context,  Montenegro  should 
ensure close synergy when implementing the 2016-2020 strategy for social inclusion of Roma, 
the  Poznan  Declaration  on  Roma  integration,  and  the  more  recent  strategy  for  inclusive 
education 2019-2025.    

Montenegro is currently preparing a draft lifelong entrepreneurial learning strategy (2020-2024), 
while  further  primary  and  secondary  level  schools  are  involved  in  classes  developing  key 
competences and basic skills, including socio-emotional learning, digital skills, critical thinking 
and problem solving.  

Implementation  of  the  national  qualifications  framework  (referenced  to  the  European 
qualifications  framework  in  2014)  and  moving  to  a  learning  outcomes  approach  prove 
demanding, as  evidenced also  by the persisting  skills  mismatch with  labour market  needs.  The 
Ministry of Education continues to revise programmes and qualifications in cooperation with the 
business  community.  It  is  also  committed  to  implementing  and  monitoring  the  2015  Riga 
Conclusions  on  Vocational  Education  and  Training  (VET),  as  reflected  in  the  revised  VET 
strategy (2020-2024), adopted in January 2020. Proper implementation of the strategy will be an 
important element moving forward, given its focus on providing quality and inclusive education 
geared towards the labour market, and the need for green and digital skills.  

After  3  years  of  implementation,  the  first  evaluation  of  the  dual  education  system  showed 
increasing interest from employers and students, with some positive results on student retention 
rate. Recommendations include capacity building of in-company trainers and mentors in schools, 
and sustainability of the joint funding model between education and private sector. The Ministry 
of Education is considering the best options to establish an adequate monitoring and evaluation 
mechanism  for  VET.  Recognition  of  non-formal  and  informal  learning  is  also  on  the  reform 
agenda to  facilitate upskilling and reskilling (confined mainly to  VET for now).  Since  January 
2020,  Montenegro’s  chamber  of  economy  participates  in  the  pilot  EU  mobility  scheme  for 
learners and teachers in the field of VET.  

In May 2019, the government signed the first (3-year) financing agreement with the University 
of  Montenegro  (UoM)  based  on,  among  others,  quality  assurance,  enrolment  policy  and 
improvement  of  study  programmes.  Transition  to  the  reformed  3+2+3  study  model  is  now 
underway at private higher education institutions, mirroring the UoM process. As a member of 
the European Association for Quality Assurance network, Montenegro applies some EU tools in 

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learning  programmes.  Implementing  practical  education 

its quality assurance work, including external evaluation of institutions, study programmes and 
lifelong 
in  higher  education 
programmes raises some challenges, and requires a structured monitoring and evaluation system 
to  determine  impact  and  effectiveness.  A  revised  higher  education  strategy  (2020-2025),  is 
currently  being  prepared  and  was  open  to  public  consultation.  In  line  with  the  2019  Law  on 
academic  integrity,  the  government  appointed  the  first  Ethics  Committee,  responsible  for  the 
protection  and  promotion  of  academic  integrity  and  prevention  of  plagiarism.  UoM  also 
established its own Ethics Committee.  

Montenegro continues  to  participate actively in  the EU Erasmus+ programme.  In 2019,  1 379 
incoming  and  outgoing  participants  were  funded,  while  9  capacity  building  projects  were 
awarded  in  the  area  of  higher  education  and  3  in  the  area  of  youth.  Montenegro  has  also 
requested  to  join  the  eTwinning  Platform  for  teachers.  For  the  first  time,  six  young  volunteers 
from Montenegro participated in the European Solidarity Corps.  

In  response  to  COVID-19,  the  Ministry  of  Education  actively  provided  a  variety  of  distance-
learning  opportunities  for  the  different  education  levels,  including  a  portal  for  teacher-student 
communication  with  classes  divided  by  years  and  subjects,  as  well  as  a  dedicated  YouTube 
channel  with  recorded  classes.  The  project  Learn  from  home  (Uci  doma)  which  includes  the 
AMPLITUDO platform received very positive reviews. 

The  PISA  2018  results  (international  student  assessment  in  mathematics,  science  and  reading) 
showed limited improvement from 2015 and remain below the OECD average. As PISA is seen 
as one indicator of whether a school system is preparing students for the future, implementation 
of  the  policy  recommendations  in  the  2019  action  plan  should  be  accelerated  to  aid  ongoing 
efforts  to  improve  the  overall  quality  of  teaching  and  student  achievement.  The  country  also 
participated in TIMSS 2019 and will be take part in the PIRLS 2021 assessment. 

On  culture,  the  Ministry  of  Culture  continued  to  invest  in  creative  hubs  and  industries, 
infrastructure  and  arts  development.  Further  investment  in  mapping  the  local  creative  start-up 
ecosystem  would  be  beneficial  for  added  stimulus.  In  March  2020,  the  Ministry  announced  a 
public call for co-financing cultural and artistic activities of public interest to support and protect 
unemployed artists and various operators affected by the COVID-19 pandemic. Amendments to 
the Law on the protection of the cultural and historic region of Kotor aim to contribute to better 
conservation.  Montenegro  should  carefully  implement  the  protection  measures  to  guard  its 
UNESCO  heritage  status.  Numerous  events  were  organised  as  part  of  the  2019  European 
Heritage  days.  The  Regional  Youth  Cooperation  Office  supports  intercultural  youth  exchange 
programmes. While there was no successful project under the culture strand of the 2019 Creative 
Europe  Programme,  Montenegro  had  two  successful  grants  in  the  new  mobility  action  ‘i-
Portunus’. 

The Youth Strategy 2017-2021 is being implemented and two thirds of local municipalities have 
youth action plans. In line with the 2019 Law on youth, the government adopted a programme to 
strengthen youth service’ capacity, and in June 2020 adopted secondary legislation to enable the 
establishment  of  a  National  Youth  Council.  Funding  was  allocated  to  reconstruct,  adapt  and 
equip youth clubs, with new clubs foreseen to open this year in the north of the country.  More 
than 5 000 free European youth cards were distributed to young people nationwide. Montenegro 
actively  joined  the  fifth  edition  of  the  European  Week  of  Sport  under  the  framework  of  the 
European Commission’s initiative European Week of Sport Beyond Borders. 

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5.27  Chapter 27: Environment and climate change 

The  EU  promotes  strong  climate  action,  sustainable  development  and  protection  of  the 
environment.  EU  law  contains  provisions  addressing  climate  change,  water  and  air  quality, 
waste management, nature protection, industrial pollution, chemicals, noise and civil protection.  

Montenegro  has  some  level  of  preparation  in  this  area.  Some  progress  was  made  with  the 
international protection granted to Ulcinj Salina, the development of an action plan for chapter 
27,  and  further  legislative  alignment  with  the  EU  acquis,  in  line  with  the  national  strategy. 
Significant  efforts  are  needed  on  implementation  and  enforcement,  in  particular  on  waste 
management,  water  quality,  nature  protection  and  climate  change.  The  2019  recommendations 
remain valid and in the coming year, Montenegro should considerably step up ambitions towards 
a green transition, and continue focusing on: 

  effectively 

implement 

implementation  and 
enforcement of the EU acquis  on environment  and climate change, especially in  the waste, 
water and nature protection sectors; 

the  national  strategy  for 

transposition, 

  take  urgent  measures  to  preserve  and  improve  the  ecological  value  of  protected  areas  and 
potential Natura 2000 sites such as Ulcinj Salina, Lake Skadar, the Tara river and other river 
courses; 

  develop  its  National  Energy  and  Climate  Plan  in  line  with  the  Energy  Community 

recommendations. 

Environment  

On horizontal legislation, Montenegro developed in 2019 a new action plan to better prioritise 
alignment with and implementation of the EU acquis on the environment and climate change. In 
December 2019, the government adopted the third report on the implementation of the previous 
action  plan  for  the  2018-2020  period.  The  report  shows  slow  implementation  in  most  of  the 
policy areas, with 68% of the planned actions for 2018 and 2019 completed by the end of 2019. 
According  to  the  report,  not  a  single  planned  activity  was  completed  in  2019  on  waste 
management  and  climate  change.  Implementation  was  about  30%  for  water  quality  and  nature 
protection,  while  figures  around  70%  were  registered  for  horizontal  legislation,  air  quality  and 
industrial  pollution.The  Eco  Fund  established  in  November  2018  is  not  operational  yet.  The 
separation of legislative and executive competences in the area of environment has been ensured 
in the May 2019 secondary legislation on the internal organisation of the Ministry of Sustainable 
Development  and  Tourism  and  of  the  Nature  and  Environmental  Protection  Agency  (NEPA). 
Remaining challenges to be urgently addressed are the lack of sufficient administrative capacities 
at  central  and local  level and inspection bodies, insufficient  inter-institutional  coordination and 
lack of a sustainable financial framework. 

On air quality, in June 2019 the government adopted the 2018 report on the implementation of 
the action plan of the national air quality management strategy. During the reporting period, the 
definition  of  air  quality  zones  was  revised  and  the  number  of  air  quality  monitoring  stations 
increased from 7 to 10, however the real-time air quality reporting system is not operational. The 
pollution  levels  in  Pljevlja  exceed  on  regular  basis  the  mean  PM10  concentration  limits.  In 
March  2020,  Montenegro  re-established  reporting  on  air  pollution  emission  and  provided  all 
missing  data  for  the  period  2011-2018  to  the  Secretariat  of  the  convention  on  long-range 

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transboundary air pollution. A programme for monitoring the quality of liquid fuels of oil origins 
for 2020-2021 has been adopted.  

Regarding  waste  management,  Montenegro  remains  partially  aligned  with  the  EU  acquis.  No 
progress has been made in the implementation of the waste legislation. Considerable efforts on 
strategic  planning  and  investments  are  needed  to  implement  the  national  strategy  for  waste 
management until 2030 and the 2015-2020 national waste management plan. Work on the new 
law on waste management continued. Decisions on separate waste collection were adopted in the 
municipalities  of  Berane,  Zabljak,  Plav,  Rozaje,  Kolasin,  Gusinje,  Andrijevica,  Ulcinj  and 
Petnjica.  The  details  of  the  country’s  waste  management  model  and  the  modalities  of  its 
implementation remain to be clarified. There is an urgent need to remedy illegal waste disposal 
and  the  use  of  temporary  waste  disposal  in  all  municipalities.  Infrastructure  for  separate  waste 
collection and recycling needs to be established across the country. 

Alignment  on  water  quality  remains  limited.  Water  management  plans  for  the  Danube  and 
Adriatic  basins  remain  to  be  finalised.  The  network  of  hydrological  surface  stations  for 
monitoring the quantity of surface waters and a network of stations for groundwater monitoring 
were established, and software for processing the collected hydrological data was acquired. The 
largest  source  of  pollution  of  surface  and  groundwater  is  untreated  wastewater.  In  order  to 
address  this,  in  October  2019,  the  government  adopted  the  municipal  wastewater  management 
plan for 2020-2035. Parliament adopted the law on marine environment protection in December 
2019,  contributing  to  alignment  with  the  Marine  Strategy  Framework  Directive.  The 
development  of  flood  hazard  maps  and  flood  risk  maps  has  advanced.  Investments  in 
hydropower  need  to  comply  with  national  and  international  nature  protection  and  water 
management obligations, ensure public participation and consultation, and guarantee high quality 
environmental  impact  assessment  (EIA)  reports  that  include  cumulative  impacts  on  nature  and 
biodiversity. 

On nature protection, Montenegro has partially aligned with the EU acquis. In June 2019, the 
municipality of Ulcinj proclaimed Ulcinj Salina as a nature park, which in September 2019, was 
also  included  on  the  Ramsar  list,  declaring  it  a  wetland  of  international  importance.  The  Zeta 
River valley was designated as a nature  park in  December 2019. While further support for the 
maintenance of Ulcinj Salina comes from the national budget, resolute and urgent action is still 
required for its sustainable mangement and protection, including, first and foremost, ownership 
clarification.  Some  mitigation  measures  were  taken  to  monitor  and  improve  the  state  of  the 
environment  in  several  sensitive  areas  at  Skadar  Lake  and  the  Tara  River.  Further  progress  is 
needed  to  designate  marine  protected  areas  and  to  establish  a  comprehensive  system  of  strict 
species  protection  to  be  applied,  among  others,  for  seismic  surveys,  hydropower  and  touristic 
developments.  A  military  training  area  was  established  on  the  Sinjajevina  mountain,  which  is 
part  of  the  UNESCO  Tara  River  biosphere  reserve.  Its  operation  should  be  planned  and 
monitored  in  line  with  the  UNESCO  principles  of  socio-cultural  and  ecological  sustainability. 
Mapping  for  Natura  2000  has  continued.  A  law  on  alien  and  invasive  alien  species  of  plants, 
animals and fungi was adopted as well the revised National Strategy on Forest and Forestry and a 
Forest Reduction Plan for forests degraded by the effect of abiotic and biotic factors.  In March 
2020, the Parliament ratified the law on Nagoya Protocol on access to genetic resources and the 
fair and equitable sharing of benefits arising from their utilisation to the convention on biological 
diversity. 

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On  industrial  pollution  control  and  risk  management,  Montenegro  is  partially  aligned  with 
the  EU  acquis.  The  Law  on  industrial  emissions  was  adopted  in  March  2019,  followed  by 
relevant  secondary  legislation.  In  November,  the  government  adopted  a  decree  on  types  of 
activities and plants for which an integrated permit is issued. 

On  chemicals,  Montenegro  is  partially  aligned  with  the  EU  acquis.  In  March  2019,  the 
government adopted the 2019-2022 national chemical management strategy and action plan. In 
July  2019,  the  government  adopted  the  national  plan  for  the  implementation  of  the  Stockholm 
Convention, while in August 2019, it adopted the final report on the implementation of the action 
plan for the 2015-2018 Chemical management strategy.  

On  noise,  in  July  2019,  Podgorica  municipality  adopted  the  action  plan  for  protection  against 
noise by 2024 for its territory and for the Golubovci municipality.  

On civil protection, Montenegro has been a member of the Union Civil Protection Mechanism 
since  April  2015.  The  COVID-19  pandemic  highlighted  the  need  to  strengthen  the  legal 
framework  and  institutional  capacities  as  well  as  human  and  financial  resources  of  civil 
protection authorities also with regard to health emergencies. Montenegro is encouraged to step 
up  its  cooperation  in  the  framework  of  the  Union  Civil  Protection  Mechanism  (UCPM). 
Montenegro  could  contribute  more  to  the  mechanism  by  registering  experts  or  response 
capacities  in  the  voluntary  pool  and  participating  regularly  in  the  committees  and  working 
groups established under the Mechanism. The country still needs to connect with the Common 
Emergency  Communication  and  Information  System  (CECIS).  As  a  precondition  to  CECIS, 
Montenegro needs to establish the Secure Trans European Services for Telematics connections 
between  Administrations  (sTESTA).  January  2020  saw  the  adoption  of  the  2019  report  on  the 
action  plan  implementing  the  2015-2018  disaster  risk  reduction  strategy  2018-2019  and  the 
strategy’s 2020-2021 action plan. 

Climate change 

Montenegro’s level of alignment on climate change remains limited. Montenegro has a climate 
change strategy in  place, but  has to  intensify its  work to  ensure  consistency  with  the EU 2030 
climate and energy policy framework. It also needs to ensure that its strategy is integrated into all 
relevant  sectoral  policies  and  strategies.  In  December  2019,  the  framework  law  on  climate 
change was adopted. In line with this law, a decree was adopted in February 2020, which ensures 
the establishment  of a national  carbon dioxide emissions trading system. Considerable work is 
still required to align with the EU acquis, such as to incorporate remaining elements of the EU 
Emissions  Trading  System  (ETS),  the  Effort  Sharing  Regulation  and  the  Monitoring  and 
Reporting  Mechanism  (MMR).  As  for  the  UN  Framework  Convention  on  Climate  Change 
(UNFCCC), the third national report for Montenegro on climate change is being prepared in line 
with the UN Framework Convention on Climate Change.  

5.28  Chapter 28: Consumer and health protection  

EU  rules  protect  consumers’  economic  interests  and  in  relation  to  product  safety,  dangerous 
imitations and liability for defective products. The EU also ensures high common standards for 
tobacco control, blood, tissues, cells and organs, patients’ rights and communicable diseases. 

Montenegro is moderately prepared on consumer and health protection. Some progress can be 
reported  on  last  year’s  recommendations  regarding  alignment  to  the  acquis,  and  notably  on 
tobacco control and smoking in public places. However, last  year’s recommendations were not 

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all fully met, further alignment is still needed and as implementation capacity and data provision 
remain inadequate in several areas. 

In the coming year, Montenegro should: 

   complete the alignment of national legislation with the EU consumer protection acquis; 

  complete the alignment of national legislation with the EU health protection acquis, notably 
on  patients’  rights  in  cross-border  health  care  and  substance  of  human  origin,  and  start  to 
implement it fully; 

  ensure the necessary implementation capacity to implement the EU acquis. 

Consumer protection  

Regarding  the  legislative  framework  for  consumer  protection,  Montenegro’s  legal  basis  is 
designed to  be aligned  with  the EU  acquis on product  safety. The amended  Law on  consumer 
protection was adopted in November 2019. This is designed to align with some of the EU acquis 
on  consumer  rights  and  on  out-of-court  settlement  of  consumer  disputes.  However,  further 
alignment is  necessary on consumer rights,  consumer credit, alternative dispute resolution,  and 
with the latest EU acquis on consumer protection rules. 

In the reporting period, the Administration for Inspection Affairs performed 18,662 inspections 
in the field of consumer protection, which identified 4,577 irregularities leading to administrative 
measures. 

On product safety, Montenegro reported that 6,124 inspections were made. Some 5,113 in the 
context  of  proactive  surveillance  and  1,011  in  reactive  surveillance,  identifying  822  dangerous 
products  (42,211  items).  Of  these,  386  products  (9,450  items)  were  classified  as  dangerous, 
representing  a  serious  risk,  and  were  withdrawn  from  the  market.  Some  106  products  (1,685 
items) were destroyed. Administrative measures were imposed accordingly.  

Public health  

On  public  health,  national  legislation  on  healthcare  is  partly  aligned  with  the  EU  acquis. 
Montenegro  has  developed  10  strategic  documents  in  the  field  of  health  protection,  including 
health policy until 2020. One of its priorities is extending life expectancy, which remained at the 
same  level  as  in  2018  (76.8).  The  implementation  of  the  2015-2020  master  plan  for  health 
development continued in 2019, but the country’s health budget decreased slightly compared to 
2018  (6.18%),  and  was  not  sufficient  to  implemen  various  preventive  and  public  health 
measures. The over-prescription of medicines is still a matter of concern. Efforts to tackle anti-
microbial  resistance  were  not  sufficiently  supported  due  to  insufficient  communication  and 
insufficient  actions  aimed  to  improve  health  literacy.  There  was  no  external  survey  assessing 
corruption affecting the health sector.  

On the health information system, a unit in the Ministry of Health was established to manage 
the  new  integral  health  information  system,  but  it  currently  has  only  two  staff  members.  This 
system is complex, as it has to cover all state-owned medical institutions. It needs to be further 
improved in  order to  enable effective provision  of quality health services to  all patients,  better 
management of the health system and the collection of data necessary for advanced public health 
reporting. 

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Regarding  tobacco  control,  the  Law  on  restriction  of  use  of  tobacco  products  was  adopted  in 
July 2019. It is designed to align with the EU  acquis on: (i) the manufacture, presentation  and 
sale of tobacco and related products, (ii) on the advertising and sponsorship of tobacco products, 
(iii)  on  the  prevention  of  smoking,  and  on  (iv)  initiatives  to  improve  tobacco  control  and  on 
smoke-free environments. As a result, a smoking ban in public places has been in force since 1 
August 2019. The law’s implementation is monitored by the relevant inspection services. 

On blood, tissues, cells and organs, Montenegro updated its action plan on substances of human 
origin, and started a project to improve the IT monitoring system. The amended Law on removal 
and transplantation of human organs for the purpose of treatment entered into force in December 
2019. In December 2019, the British ’DAS” agency carried out a second surveillance check of 
the national Blood Transfusion Institute, in relation to re-certification of two ISO certifications 
(ISO 9001:2015 for quality system and ISO 27001:2013 for information security). This resulted 
in a positive assessment. Montenegro continued with promotional activities on voluntary blood 
donations. However, the planned action on substances of human origin has not yet started.  

In the field of serious cross-border health threats, including communicable diseases, national 
legislation on healthcare is partly aligned with the EU acquis, but patients’ rights in cross-border 
healthcare  need  to  be  addressed.  There  was  some  progress  in  the  reporting  period  on  (i) 
alignment  regarding  reporting  infectious  diseases,  hospital-acquired  infections,  conditions  and 
deaths from these diseases, (ii) the list of infectious diseases subject to epidemiological control 
and to the application of measures and control of infectious diseases, and (iii) definitions of cases 
of  infectious  diseases.  The  2019  programme  of  compulsory  immunisation  of  the  population 
against  certain  infectious  diseases  was  implemented,  but  timely  immunisation  against  some 
diseases is still at a low level.  

In response to the COVID-19 outbreak, precautionary measures as per the recommendations of 
the Institute for Public Health included a nationwide curfew, social distancing, a ban on public 
gatherings  and  public  and  religious  ceremonies.  All  sports  and  recreational  activities  were 
banned and domestic bus, rail, and taxi services were suspended. One municipality and parts of 
two  others  were  placed  in  lock-down.  Schools,  restaurants,  and  cafés  were  closed  and  the 
number of customers in supermarkets  limited to 50.  Self-isolation and quarantine periods were 
imposed  (however,  a  list  of  all  persons  subject  to  measure  of  self-isolation  was  published  -  a 
review of constitutionality of this measure is underway, and at one point a list of all the people in 
self-isolation  was  leaked  –  a  criminal  investigation  of  this  is  underway).  These  measures  were 
phased  out  gradually  in  May,  as  cases  declined.  Kindergardens  were  re-opened  on  1  June   the 
day  when  travel  into  the  country  was  also  permitted  for  certain  nationalities,  based  on 
epidemological critieria. 

Montenegro  introduced  legislation  on  reporting  communicable  diseases,  infections,  cases  and 
deaths,  and  the  list  and  definitions  regarding  epidemiological  monitoring,  prevention,  and 
suppression. Five provisional hospitals for medical treatment persons suffering from COVID 19 
were prepared and equipped, as were ten quarantine facilities. Salary bonuses of up to 15% were 
given  to  all  medical  staff.  Montenegro  provided  data  to  the  European  Centre  for  Disease 
Prevention and Control. It also joined the EU Joint Procurement Agreement and the EU Health 
Security Committee, and received material from JRC to control COVID tests, as well as EUR 3 
million  in  EU  funding  to  enabling  it  to  buy  urgently  needed  medical  equipment  and 
supplies.Montenegro  adopted  a  new  strategy  for  the  improvement  of  mental  health  (2019-
2023), along with a 2019-2020 action plan. However, there was no progress on the provision of 

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data  on  the  proportion  of  mental  health  care  provided  by  institutions  compared  to  community-
based care.  

On preventive measures, some data were provided for both the nutrition and physical activity of 
school  children,  carried  out  under  the  aegis  of  the  WHO  European  Obesity  Surveillance 
Initiative.  A  national  action  plan  to  improve  nutrition  (2019-2020)  was  adopted,  as  was  the 
national  strategy  for  the  prevention  of  alcoholism  and  alcohol-induced  disorders.  This  was 
followed by workshops  for primary and secondary students on healthy life styles, delivered by 
physicians.  However,  some  civil  society  organisations  indicate  that  there  were  insufficient 
activities to reduce alcoholism and prevention of alcohol–induced disorders.  

On drug abuse prevention and harm reduction, Montenegro continued to implement its 2019-
2020 action plan of the 2013-2020 strategy for the implementation of the drug-abuse prevention. 
Guidelines  on  providing  aid  to  drug  addicts  were  adopted  and  are  being  implemented.  Civil 
Society’s  involvement  in  drug  abuse  prevention  activities  supported  by  the  state  budget  was 
encouraged. However, some organisations  found the funds for the implementation insufficient. 
The  European  school  survey  project  on  alcohol  and  other  drugs  (ESPAD)  was  conducted  and 
was followed by some interactive sessions in primary and secondary schools.  

On health  inequalities, access  to  healthcare services appears to  be available for all vulnerable 
groups. However, it is reported that treatment options for drug users are limited and almost non-
existent for children. A survey found that over 95% of domiciled Roma and Egyptian population 
have medical cards, compared to 75% of displaced Roma and Egyptians.  

5.29  Chapter 29: Customs union  

All  Member  States  are  part  of  the  EU  customs  union  and  follow  the  same  customs  rules  and 
procedures.  This  requires  legislative  alignment,  adequate  implementing  and  enforcement 
capacity, and access to the common computerised customs systems.  

Montenegro  is  moderately  prepared  for  customs  union  and  made  some  progress  during  the 
reporting  period,  advancing  preparations  for  accession  to  the  Convention  on  common  transit 
procedure,    and  implementing  actions  foreseen  for  2019  in  the  multiannual  Trade  Facilitation 
Strategy 2018-2022, thus partially fulfilling last year's recommendations.  

In the coming year, Montenegro should in particular:  

  continue  preparations  for  accession  to  the  Convention  on  a  common  transit  procedure  by 

establishing an EU-compatible computerised transit system; 

  further implement trade facilitation measures in order to reduce administrative inefficiencies 
and the time needed for customs clearance, in line with the Trade Facilitation Strategy 2018-
2022 and the Economic Reform Programme 2020-2022;  

  enhance capacity building in the customs administration and ensure  adequate staffing levels 

for the IT department. 

On customs legislation, the degree of alignment with the EU acquis is high. The new Customs 
Code fully aligned with  Union Customs Code was finalised and subject to public consultation. 
Montenegro ratified the UNIDROIT Convention on stolen or illegally exported cultural objects 
and amended the law on protection of cultural property, in March and May 2019 respectively. In 
December  2019,  implementing  legislation  was  adopted  to  the  law  on  customs  service  on 

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monitoring,  intercepting  and  examining  vehicles,  passengers  and  baggage,  and  on  issuing 
warnings and warrants by authorised customs officers. 

 Montenegro also amended implementing legislation on Authorised Economic Operators (AEO) 
aimed  at  alignment  with  the  EU  acquis;  the  amendments  entered  into  force.  Starting  from 
November 2019, economic operators may apply for AEO status.  

Montenegro  is  implementing  the  Regional  Convention  on  Pan-Euro-Mediterranean  preferential 
rules  of  origin.  Following  the  entry  into  force  of  trade  facilitation  measures  under  the  CEFTA 
agreement  (Additional  Protocol  5),  customs  administration  signed  agreements  with  other 
administrative  bodies  to  ensure  information  sharing  and  mutual  assistance  on  customs  matters. 
Amended  CEFTA  protocol  of  origin,  introducing  full  cumulation  and  prohibition  of  duty 
drawback, is effective as of July 2019. 

Montenegro needs to further align its legislation on drug precursors and customs security and to 
adopt  implementing  legislation  on  the  export  control  of  cultural  goods.  A  number  of  customs 
exemptions,  not  laid  down  in  the  EU  Customs  Code  are  still  applied.  Fees  are  still  charged  to 
lorries in inland customs terminals located in privately owned facilities, which is not in line with 
the EU acquis.  

On administrative and operational capacity, Montenegro is continuing to implement its 2019-
2021  business  strategy,  in  accordance  with  the  action  plan.  Implementing  legislation  on  the 
internal  organisation  of  the  customs  administration  was  adopted  in  May  2019,  together  with 
strategies  on  customs’  human  resources,  management, 
training,  modernisation  of  IT 
infrastructure  and  public  relations.  Montenegro  took  action  to  enhance  capacities  in  financial 
investigations,  including  on  the  recovery  of  assets  and  proceeds  of  crime,  and  strengthened 
measures on anti-corruption and integrity of customs officers. Ensuring adequate staffing of the 
IT department still needs to be better addressed, in view of numerous IT development projects. 

Further  operational  progress  was  made  towards  accession  to  the  Transit  Convention  and 
establishing  a  new  computerised  transit  system  (NCTS).  Simplified  procedures  for  customs 
clearance  of  express  consignments  were  implemented  and  e-manifest  application  for  such 
consignments became operational, allowing for pre-processing of shipments before their arrival. 
Preparations for the accreditation of the customs laboratory were stepped up and several tender 
procedures for the procurement of laboratory equipment were successfully completed.  

On the collection of customs debt, the model for the write-off of the customs debt needs to be 
established jointly with the Ministry of Finance.  Some improvements are observed in import and 
export procedures thanks to gradual implementation of 2018-2022 Trade Facilitation Strategy. In 
the  context  of  CEFTA  Protocol  5  implementation,  post-clearance  checks  were  reinforced  to 
reduce  clearance  times.  In  addition,  the  development  of  supervisory  IT  system  introducing 
chronological case management of customs frauds and irregularities started in September 2019, 
with its integration into the Customs Information System expected by Q3 2020.  

The Customs Administration is a member of the Intellectual Property Rights Coordination Team 
and  participates  in  joint  actions  of  the  working  group  aimed  at  suppression  and  prevention  of 
intellectual property rights infringements. Revenue collection by the Customs Administration in 
2019 was EUR 801 million, a 5.60 % increase in comparison with 2018. Of particular note is a 
14% year-on-year increase in the collection of excise duties on tobacco.  

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As regards illicit tobacco trade, supervision activities have intensified at the free zone in the port 
of  Bar,  including  joint  control  actions  with  the  police.  Better  IT  functionality  enables  customs 
authorities to access the IT systems of the port operators and better control tobacco movements. 
Still, significant challenges remain in reducing illicit tobacco trade. In particular, the presence of 
offshore  letterbox  companies  at  the  free  zone  in  the  port  of  Bar  and  their  role  in  the  tobacco 
supply chains remains a major source of concern. A wider control of the companies operating in 
the  free  zone  and  of  their  activities  would  make  the  fight  against  cigarette  smuggling  more 
effective.  Further  efforts  should  be  invested  in  capacity  building,  hiring  human  resources  and 
enhancing  international  cooperation  in  this  regard.    The  Customs  Administration  started 
developing  electronic  system  for  management  and  security  printing  of  excise  stamps,  but 
implementation  of  the  WHO  Protocol  to  eliminate  illicit  trade  in  tobacco  products  is  still 
pending. The restarted cigarette production by the main Montenegro’s tobacco company would 
require full implementation of the measures foreseen by the Protocol. 

Customs  Administration  is  part  of  the  CEFTA  coordination  body,  established  in  March  2020 
with the aim of coordinating measures for uninterrupted cross-border trade during the COVID-19 
crisis. 

5.30  Chapter 30: External relations  

The  EU  has  a  common  trade  and  commercial  policy  towards  third  countries,  based  on 
multilateral and bilateral agreements and autonomous measures. There are also EU rules in the 
field of humanitarian aid and development policy. 

Montenegro has reached a good level of preparation in this area. Some progress was made on 
the 2019 recommendation concerning the Regional Economic Area (REA) with the adoption of 
Additional Protocol (AP) 6 to liberalise trade in services. The 2019 recommendation on dual-use 
goods remains valid. 

In the coming year,  Montenegro should in particular: 

  adopt legislation, in line with the EU acquis, on export controls of dual-use goods ; 

  implement  actions  under  the  multiannual  action  plan  for  the  development  of  REA:  in 
particular,  ensure  the  full  implementation  of  CEFTA  AP  5  on  trade  in  goods,  ratify  and 
implement CEFTA AP 6 on trade in services, negotiate and ensure a swift implementation of 
CEFTA  AP  7  on  dispute  settlement,  adopt  regional  standards  for  international  investment 
agreements and pursue the implementation of the ‘individual reform action plan’ (IRAP) on 
investment. 

On  the  common  commercial  policy,  Montenegro  continued  to  coordinate  its  positions  with 
those  of  the  EU,  including  within  the  WTO.  Montenegro  adopted  the  2018  implementation 
report concerning the ambitious trade facilitation strategy 2018-2022. Additional efforts should 
be  invested  to  ensure  the  timely  implementation  of  the  strategy  and  related  action  plan  and  to 
monitor the process. In June 2019, Montenegro submitted notifications under Articles 1.4, 10.6.2 
and  12.2.2  of  the  WTO  Trade  Facilitation  Agreement  and  later,  in  August  2019,  submitted  a 
notification of category B and C commitments. 

Montenegro  continued  to  align  its  national  control  list  of  dual-use  goods  with  the  2019  EU 
regime on exports, transfer, brokering and transit of these items. The draft Law on export control 
of dual-use goods is yet to be adopted. In this respect, Montenegro should continue to invest in 

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upgrading  its  administrative  and  control  capacity.  Montenegro's  application  process  to  join  the 
Wassenaar Arrangement is ongoing, while the country is also considering joining the Australia 
Group. 

Montenegro has legislation in place aimed at implementing the Kimberley Process certification 
procedure, including provisions on sanctions. 

A regulation on export credit insurance against non-market risks is being prepared following the 
adoption of amendments to the Law on the investment and development fund (which regulates 
the issuing and financing of export credits). 

Montenegro continued its participation in CEFTA. It is important that Montenegro implements 
Additional Protocol 5, based in particular on the decisions taken by the CEFTA Joint Committee 
on  Authorised  Economic  Operators,  fruits  and  vegetables,  and  risk  management  strategy  for 
customs.  Ratification  and  implementation  of  the  newly  adopted  Additional  Protocol  6  on 
liberalisation  of  trade  in  services  is  also  needed.   Regarding  Additional  Protocol  7  on  trade 
dispute  settlement, a  constructive  approach  by  Montenegro  would  be  important  to  ensure  the 
completion of negotiations in 2020. Within the Regional Economic Area framework, standards 
on  investment  at  regional  level  remain  to  be  adopted  to  reflect  the  latest  EU  policy 
developments;  to  be  used  when  negotiating  future  investment  treaties  with  third  countries. 
Montenegro  should  reflect  this  in  the  new  Bilateral  Investment  Treaty  model  it  is  currently 
preparing.    

Montenegro  should  continue  to  strengthen  the  administrative  capacity  of  services  in  charge  of 
CEFTA and WTO matters. On bilateral trade agreements, Montenegro signed amendments to 
its free trade agreement with Turkey in July 2019; these ensure additional liberalisation of trade 
in agricultural products and access to the services market. Montenegro is also amending its free 
trade agreements with EFTA countries as regards rules of origin. 

On  development  policy  and  humanitarian  aid,  implementing  legislation  is  yet  to  be  adopted 
for the Law on international development cooperation and international humanitarian assistance. 
A  database  of  donor  support  projects  -  using  the  OECD  Development  Assistance  Committee 
methodology – is yet to be developed. 

Montenegro continued its preparations on this chapter in accordance with its overall action plan 
on external relations. 

5.31  Chapter 31: Foreign, security and defence policy  

Member  States  must  be  able  to  conduct  political  dialogue  in  the  framework  of  the  foreign, 
security and defence policy, to align with EU statements, to take part in EU actions and to apply 
agreed sanctions and restrictive measures. 

Montenegro has a good level of preparation in this area. Some progress was made during the 
reporting period by enhancing the legislative framework on security and defence and combatting 
hybrid threats. Montenegro continued to fully align with EU positions  and to participate in EU 
crisis management missions and operations under the common security and defence policy.  

The regular political dialogue between the EU and Montenegro on foreign and security policy 
issues  continued.  (For  more  information  on  developments  in  bilateral  relations  with  other 
enlargement  countries  and  EU  Member  States,  see  section  Regional  issues  and  international 
obligations.) 

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On  common  foreign  and  security  policy,  Montenegro  continued  its  100%  alignment  with  all 
relevant  High  Representative  declarations  on  behalf  of  the  EU  and  Council  Decisions.  In 
December, Parliament adopted the amended Law on international restrictive measures entrusting 
responsibility  for  the  prevention  of  money  laundering  and  terrorist  financing  to  the  police 
administration.  In  March  2020,  the  government  adopted  an  amending  decision  concerning  the 
sovereignty  and  independence  of  Ukraine  (which  contains  a  consolidated  list  of  persons  and 
entities against which restrictive measures have been imposed). 

Montenegro  maintains  a  bilateral  immunity  agreement  with  the  United  States,  granting  U.S. 
citizens exemptions from the jurisdiction of the International Criminal Court. In doing so, the 
country does not comply with the EU common positions on the integrity of the Rome Statute or 
related EU guiding principles on bilateral immunity agreements. Alignment with the EU position 
is therefore needed. 

Regarding  non-proliferation,  the  government  adopted  the  2018  annual  report  on  the 
implementation of the 2016-2020 weapons of mass destruction non-proliferation strategy. A new 
action  plan  (2020-2024)  is  being  prepared  aimed  at  implementing  UN  Security  Council 
Resolution  1540  which  obliges  states  to  refrain  from  helping  non-state  actors  to  develop, 
procure, produce, possess, transport or use nuclear, chemical or biological weapons, as well as 
their means of delivery. Montenegro continued to participate in the EU cooperation programme 
on  arms  export  control.  This  includes  support  for  drafting  appropriate  legislation  and  relevant 
training of licensing and law enforcement officials. 

Montenegro  remained  actively  engaged  in  the  implementation  of  the  2018  Regional  Roadmap 
for a sustainable solution to the illegal possession, misuse and trafficking of small arms and light 
weapons and their ammunition in the Western Balkans. 

On  security  and  defence,  implementation  continued  of  the  EU-Montenegro  agreement  on 
security procedures for exchanging and protecting classified information. Parliament adopted the 
defence  strategy  in  June  2019,  which  provides  a  framework  for  the  developing  the  defence 
sector.  

Montenegro  continued  good  cooperation  with  international  organisations  and  remains  an 
active member in NATO exercises and missions.  

Montenegro  actively  participated  in  EU  crisis  management  missions  and  operations  under  the 
common  security  and  defence  policy,  namely  EU  NAVFOR  ATALANTA  and  EUTM  Mali. 
Montenegro continued to take part in the UN operation MINURSO and in the UN Peacekeeping 
Force in Cyprus.  Members of the Montenegrin armed forces continued to serve in the NATO-
led  Resolute  Support  mission  in  Afghanistan  and  the  KFOR  mission  in  Kosovo,  while  in 
December two members of the armed forces members were deployed to  the NATO mission in 
Iraq. 

Montenegro  intensified  its  efforts  to  combat  hybrid  threats.  Hybrid  risk  survey  was  launched 
with  Montenegro  and  country  submitted  the  input  in  June  2019  as  part  of  a  process  aimed  at 
identifying vulnerabilities to hybrid threats. In May 2019, it became a member of the European 
Centre of Excellence for Countering Hybrid Threats (Hybrid CoE). In August 2019, it applied to 
join the NATO Cooperative Cyber Defence Centre of Excellence in Tallinn. 

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5.32  Chapter 32: Financial control 

The  EU  promotes  the  reform  of  national  governance  systems  to  improve  managerial 
accountability,  sound  financial  management  of  income  and  expenditure  and  external  audit  of 
public  funds.  The  financial  control  rules  further  protect  the  EU’s  financial  interests  against 
fraud in the management of EU funds and the euro against counterfeiting.  

Montenegro  is  moderately  prepared  on  financial  control.  Limited  progress  was  made  in  the 
reporting  period  on  last  year’s  recommendations.  There  were  useful  developments  regarding 
internal  control,  via  the  adoption  of  ten  pieces  of  secondary  legislation  related  to  the  Law  on 
governance and internal control and the adoption of a financial management and internal control 
manual.  The  SAI  also  continued  work  on  its  internal  guidelines.  However,  further  efforts  are 
needed to address managerial accountability and to strengthen the functioning of internal control 
and internal audit at all levels of the administration and in state-owned companies. Therefore, the 
Commission’s  2019  recommendations  remain  largely  valid.  In  the  coming  year,  Montenegro 
should in particular:  

  adopt,  and  start  implementing  a  strategy  on  improving  governance  and  public  internal 

financial control; 

  ensure  that  the  external  audit  methodology  is  completely  aligned  to  the  latest  International 

Standards of Supreme Audit Institutions (ISSAIs); 

  strengthen the coordination capacity of the National Anti-fraud Coordination Service. 

Public internal financial control (PIFC) 

Montenegro’s  strategic  framework for PIFC is  partially in  place. After  the execution of most 
activities  planned  under  the  2013-2017  PIFC  strategy,  the  finalisation  of  a  new  strategic 
document  should  be  ensured  as  soon  as  possible.  Secondary  legislation  for  the  Law  on 
governance and internal control was adopted in December 2019, thus enabling the application of 
the  legal  provisions  adopted  back  in  November  2018.  In  addition,  secondary  legislation  was 
adopted in November 2019 that ensures full budget coverage by internal audit at both central and 
local level. 

Montenegro  has  not  yet  adopted  a  comprehensive  policy  paper  focusing  on  Managerial 
accountability  and  delegation  of  authority.    n.  Accountability  mechanisms  between  ministries 
and  subordinated  bodies  were  improved  by  the  Law  on  the  state  administration,  and  by  the 
decree  and  methodology  on  strategic  planning,  which  started  being  phased  in  during  2019.  In 
line with the first government work plan (2018-2020) each public entity is expected to develop 
organisational objectives in line with the overall government vision. The state budget was not yet 
prepared according to programme budgeting and a mid-term budgetary framework. This delays 
the  transition  towards  result-based  management.  The  managerial  culture  within  public 
institutions  continues  to  be  highly  centralised,  and  there  is  resistance  to  delegating  budget 
responsibilities  or  decision-making  powers  to  middle  management.  Primary  focus  continues  to 
be on compliance, rather than on performance.  

Internal control legislation is in line with international standards. A financial management and 
control manual is  in  place  and was updated. A system  for detecting  and  acting on information 
about  financial  irregularities  was  developed  and  budget  users  are  increasingly  adopting  risk 
registers, but risk management is not consistently applied by all budget entities. Only half of the 

119 

 
budget  entities  have  adopted  action  plans  to  improve  the  financial  control  systems.  The 
centralised  budget  inspection  function  in  the  Ministry  of  Finance  is  not  yet  operational. 
Exceptional management and control procedures or derogations applied by the authorities during 
the  COVID-19  crisis  need  to  be  well  documented,  accompanied  by  adequate  safeguards  and 
considered for special audits. 

Internal audit practice, rules, and standards are regulated in line with international standards. 
All but one of the institutions required to establish an internal audit unit at central and local level 
have done  so,  and, except  three out  of 26, all of them have quality assurance programmes and 
improvement  in  place.  The  number  of  internal  auditors  continues  to  increase  and  most  have  a 
national  and/or  international  certificate  as  internal  auditors.  There  is  a  national  internal  audit 
training  and  certification  system  and  a  long-term  professional  development  programme  for 
certified  internal  auditors.  The  rate  of  implemented  audit  recommendations  also  continues  to 
increase  (to  97.5%  in  2019  from  94.25%  in  2018),  but  recommendations  still  focus  more  on 
compliance than value for money. 

is  responsible  for  developing  and  disseminating 
The  Central  Harmonisation  Unit 
methodological  guidance  on  PIFC,  and  for  monitoring  and  reporting  on  implementation.  The 
CHU prepares an annual report to inform the government about the development of the internal 
control  systems  in  the  public  sector.  It  also  contains  the  activities  planned  to  improve  the 
effectiveness of these systems. 

External audit 

Montenegro’s State Audit Institution (SAI) has been established in line with the standards of the 
International  Organisation  of  Supreme  Audit  Institutions  (INTOSAI).  The  SAI  has  a 
comprehensive mandate, covering all public financial operations, including municipalities, state-
owned enterprises and international organisations. It has the authority to undertake a full range of 
financial,  regularity  and  performance  audits,  with  unrestricted  access  to  the  premises,  records 
and  documents  of  the  audited  bodies.  It  has  improved  its  institutional  capacity  in  terms  of 
management and auditing staff, and is implementing its 2018-2022 strategic development plan. 
The  SAI’s  continued  obligation  to  audit  political  parties  remains  a  significant  burden  on  its 
resources and finances, which potentially underlines its independence to plan its activities. The 
SAI has standardised audit processes for financial, regularity and performance audit, and most of 
its  auditors  are  certified  and  have  access  to  training  on  the  basis  of  a  needs  assessment.  SAI 
performed three performance audits in 2019, compared to four in 2018.  

With  regard  to  the  quality  of  audit  work,  the  SAI  adopted  guidelines  on  auditing  the  final 
statement  of  accounts  and  guidelines  for  auditing  the  annual  financial  statements  of  political 
parties. A manual for financial and regularity audit in accordance with the ISSAI’s standards was 
finalised  and  its  adoption  should  be  ensured  as  soon  as  possible.  In  addition,  the  SAI  also 
adopted an  updated instruction on methodology for performance auditing. The SAI submits an 
audit report to parliament on the government’s final statement of accounts and its annual report 
on performed audits. All SAI reports are published but the submission of individual audit reports 
to parliament is an exception. Following the adoption of recommendations on the final statement 
of accounts by parliament, the government develops an action plan for their implementation and 
reports  on  it  regularly.  Individual  audited  entities  have  to  submit  a  report  to  the  SAI  on  the 
implementation of recommendations. However, parliament does not ensure structured follow-up 

120 

 
on SAI recommendations, although the SAI may decide to perform follow-up audits. The overall 
implementation rate of SAI recommendations, however, needs to be further improved.  

Protection of the EU’s financial interests 

While Montenegro is largely aligned with the EU acquis in this area, it is not aligned with regard 
to its criminal law with the EU acquis on the fight against fraud to the Union's financial interests. 
A  2019-2021  national  anti-fraud  strategy  was  adopted  in  May  2019.  The  strategy  provides  a 
basis to improve the capacity of the national anti-fraud coordination service (AFCOS) and the 
functioning  of  the  AFCOS  network.  Montenegro  ensures  cooperation  with  the  European 
Commission during investigations. It also made progress on developing a solid track record on 
reporting  of  irregularities  via  the  online  irregularity  management  system,  reporting  27  cases  in 
2019 (making a total of 42 by the end of 2019) via the online irregularity management system, 
but needs to ensure a solid track record on investigations.  

Protection of the euro against counterfeiting 

Montenegro adopted legislation designed to ensure further alignment with the  acquis regarding 
cash management standards, testing cash handling machines, and the training of cash handlers. 
The  central  bank  conducts  technical  analysis  and  continues  to  cooperate  and  exchange 
information  on  this  with  police  administration  and  the  High  State  Prosecutor's  Office. 
Montenegro  ensures  cooperation  with  EU  institutions  on  the  protection  of  euro  from 
counterfeiting,  and  it  participates  actively  in  the  EU  Pericles  Programme.  A  cooperation 
agreement  with  the  European  Commission  on  coins  and  with  the  European  Central  Bank  on 
bank notes is in place.  

5.33  Chapter 33: Financial and budgetary provisions  

This chapter covers the rules governing the funding of the EU budget (‘own resources’). These 
resources  mainly  consist  of:  (i)  contributions  based  on  the  gross  national  income  of  each 
Member State; (ii) customs duties; and (iii) a resource based on value-added tax. Member States 
must  have  the  appropriate  administrative  capacity  to  adequately  coordinate  and  ensure  the 
correct calculation, collection, payment and control of own resources.  

Preparations  in  this  area  are  at  an  early  stage.  There  was  limited  progress  in  2019  in  the 
coordination and management of own resources, though the updated own resources action plan 
was  adopted,  partly  meeting  one  of  last  year’s  recommendations.  However,  the  2019 
recommendations remain fully or partly valid.  

In the coming year, Montenegro should:  

  further align the institutional  framework and rules of administration for the own resources 

system and the legal framework for VAT with the EU acquis;  

  further align the legal basis for the underlying policy areas affecting the correct application 
of the own resources system (taxation, customs union, financial control and statistics) and 
fully implement the own resources system action plan;  

  ensure  adequate  capacity  at  the  Directorate  for  Coordination  and  Management  of  EU 

resources and at all institutions involved in the own resources system.  

On  traditional  own  resources,  a  new  accounting  simulation  exercise  to  distinguish  collected 
from non-collected duties was prepared. Continued efforts will be needed to define and establish 

121 

 
procedures for running A&B accounts. Under the Law on public sector accounting, adopted in 
the reporting period, the Custom Administration will have to use the double bookkeeping rules 
as from 2021. 

On value added tax-based resource, further alignment of the Law on VAT with the EU acquis 
is necessary, especially on the supply of goods, taxpayers and the VAT base, as well as on VAT 
exemptions in the public interest and the issuing of invoices. 

On  gross  national  income-based  resources,  Montenegro’s  GDP  is  calculated  using  the 
European  system  of  national  and  regional  accounts  (ESA  2010)  methodology.  GNI  data  are 
available  from  2010  to  2018  and  are  published  on  the  website  of  the  Statistical  Office  of 
Montenegro (Monstat). Sustained efforts are needed as regards the exhaustiveness of the national 
accounts and GDP/GNI calculations. 

As regards administrative infrastructure, a comprehensive training plan or twinning exercise 
needs to be developed and capacity building provided for the budget directorate. This applies in 
particular for the Directorate for Coordination and Management of Own Resources of the EU, as 
well  as  for  all  institutions  involved  in  the  own  resources  system.  The  implementation  of  the 
updated own resources action plan, adopted in spring 2019, is ongoing but sustained efforts are 
needed for its full implementation within the deadlines set. 

122 

 
 
 
Annex I – Relations between the EU and Montenegro  

Within the framework of the accession negotiations, by October 2020, all 33 screened chapters, 
including chapters 23 and 24 on the rule of law, had been opened, three of which, i.e. science and 
research, education and culture and external relations, have been provisionally closed. 

Montenegro is participating in the Stabilisation and Association Process. Overall, Montenegro 
continued  to  broadly  implement  its  obligations  under  the  Stabilisation  and  Association 
Agreement  (SAA).  Regular  political  and  economic  dialogue  between  the  EU  and  Montenegro 
has continued through the SAA structures. The Stabilisation and Association Council met in June 
2019 and the Stabilisation and Association Committee in December 2019. Regular subcommittee 
meetings have been held throughout the period. The Stabilisation and Association Parliamentary 
Committee met in February 2020. 

Montenegro participates in ministerial dialogue between the economic and finance ministers of 
the EU and the candidate countries, which aims at helping the latter gradually meet the economic 
accession criteria and be better prepared in terms of economic reforms, competitiveness and job 
creation. The most recent meeting was held on 19 May 2020, where joint recommendations were 
adopted. 

Visa liberalisation for citizens of Montenegro travelling to the Schengen area has been in force 
since December 2009. As part of the monitoring mechanism in place since visa liberalisation, the 
Commission  has  been  regularly  assessing  the  progress  made  by  the  country  in  implementing 
reforms  introduced  under  the  visa  roadmap.  The  monitoring  mechanism  also  includes  an  alert 
mechanism  to  prevent  abuses,  coordinated  by  the  European  Border  and  Coast  Guard  Agency. 
The  Commission  has  regularly  submitted  its  post-visa  liberalisation  monitoring  reports  to  the 
European Parliament and the Council. A readmission agreement between the European Union 
and Montenegro has been in force since 2008. 

Montenegro is currently benefitting from EU financial assistance under the Instrument for Pre-
accession  Assistance  (IPA)  with  an  indicative  allocation  of  EUR 279.5  million  for  the  period 
2014-2020.  This  has  now  been  programmed  based  on  the  priorities  set  out  in  the  Indicative 
Strategy  Paper.  However,  with  the  outbreak  of  the  COVID-19  pandemic  EUR  53  million  has 
been  reprogrammed  in  order  to  support  the  authorities’  social  and  economic  response  to  the 
crisis,  with  particular  emphasis  on  protecting  the  most  vulnerable  in  society.  This  amount 
includes, support providing for the delivery of emergency health supplies, a focused social and 
health programme, and not least a Budget Support programme. As part of the wider COVID-19 
response,  the  EU  has  also  made  available  a  Macro  Financial  Assistance  scheme  of  EUR  60 
million in highly favourable loans in order to underpin the local economy.   

Montenegro  continues  to  benefit  from  support  under  the  IPA  multi-country  and  regional 
programmes. These programmes have been also, in part, repurposed to address the response to 
the  COVID-19  crisis.  Additionally,  Montenegro  continues  to  participate  in  four  cross-border 
cooperation  programmes  with  neighbouring  Western  Balkan  countries  and  in  transnational 
cooperation programmes with Member States under the European Regional Development Fund 
and the IPA Adriatic cross-border programme. 

Montenegro continues to benefit from participation in the following EU programmes, with IPA 
support:    Erasmus+,  Creative  Europe  (Culture  and  Media  strands),  Employment  and  Social 
Innovation,  Horizon  2020,  Customs  2020,  Fiscalis  2020,  Competitiveness  of  Enterprises  and 

123 

 
Small and Medium-Sized Enterprises Programme (COSME). Montenegro also participates with 
their own funds in the EU Justice Programme.  

124 

 
 
 
Note 

Note 

STATISTICAL DATA (as of 03.04.2020) 
Montenegro 

Basic data 
Population (thousand) 
Total area of the country (km²) 

National accounts 
Gross domestic product (GDP) (million euro) 
GDP (euro per capita) 
GDP per capita (in purchasing power standards (PPS)) 
GDP per capita (in PPS), relative to the EU average (EU-27 = 100) 
Real GDP growth rate: change on previous year of GDP volume (%) 
Employment growth (national accounts data), relative to the previous year (%) 
Labour productivity growth: growth in GDP (in volume) per person employed, relative to the 
previous year (%) 
Unit labour cost growth, relative to the previous year (%) 
**3 year change (T/T-3) in the nominal unit labour cost growth index (2010 = 100) 
Labour productivity per person employed: GDP (in PPS) per person employed relative to EU 
average (EU-27 = 100) 
Gross value added by main sectors 
Agriculture, forestry and fisheries (%) 
Industry (%) 
Construction (%) 
Services (%) 
Final consumption expenditure, as a share of GDP (%) 
Gross fixed capital formation, as a share of GDP (%) 
Changes in inventories, as a share of GDP (%) 
Exports of goods and services, relative to GDP (%) 
Imports of goods and services, relative to GDP (%) 
Gross fixed capital formation by the general government sector, as a percentage of GDP (%) 

Business 
Industrial production volume index (2015 = 100) 
Number of active enterprises (number) 
Birth rate: number of enterprise births in the reference period (t) divided by the number of 
enterprises active in t (%) 
Death rate: number of enterprise deaths in the reference period (t) divided by the number of 
enterprises active in t (%) 
People employed in SMEs as a share of all persons employed (within the non-financial 
business economy) (%) 

Note 

2007 
615 
13 812 

2007 
2 689 
4 370 
9 840 
40.1 
: 
: 
: 

: 
: 
: 

9.1 
14.1 
7.3 
69.5 
108.0 
32.9 
1.9 
43.0 
85.7 
: 

2007 
145.0 
: 
: 

: 

: 

2014 
622 
13 812 

2014 
3 458 
5 560 
11 010 
41.5 
1.8 
: 
: 

: 
: 
: 

10.0 
13.5 
4.2 
72.3 
99.6 
19.0 
1.2 
40.1 
60.0 
: 

2014 
92.7 
: 
14.5 

9.1 

: 

2015 
622 
13 812 

2015 
3 655 
5 870 
11 740 
42.8 
3.4 
: 
: 

: 
: 
: 

9.7 
12.8 
4.5 
73.0 
98.4 
20.1 
-0.1 
42.1 
60.6 
: 

2015 
100.0 
: 
14.9 

7.6 

: 

2016 
622 
13 812 

2016 
3 954 
6 350 
12 640 
44.9 
2.9 
: 
: 

: 
: 
: 

9.0 
12.2 
6.7 
72.1 
96.4 
24.7 
1.4 
40.6 
63.1 
: 

2016 
97.1 
: 
13.1 

6.1 

: 

2017 
622 
13 812 

2017 
4 299 
6 910 
13 420 
45.9 
4.7 
: 
: 

: 
: 
: 

8.4 
11.3 
6.9 
73.4 
93.2 
26.9 
3.3 
41.1 
64.5 
: 

2017 
93.0 
: 
: 

: 

: 

2018 
622 
13 812 

2018 
4 663 
7 490 
14 390 
47.7 
5.1 
: 
: 

: 
: 
: 

8.2 
12.5 
7.0 
72.3 
91.9 
29.2 
2.7 
42.9 
66.7 
: 

2018 
113.8 
: 
: 

: 

: 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Value added by SMEs (in the non-financial business economy) (EUR million) 
Total value added (in the non-financial business economy) (EUR million) 

Inflation rate and house prices 
Harmonised consumer price index (HICP), change relative to the previous year (%) 
**Annual change in the deflated house price index (2015 = 100) 

Balance of payments 
Balance of payments: current account total (million euro) 
Balance of payments current account: trade balance (million euro) 
Balance of payments current account: net services (million euro) 
Balance of payments current account: net balance for primary income (million euro) 
Balance of payments current account: net balance for secondary income (million euro) 
Net balance for primary and secondary income: of which government transfers (million euro) 
**3 year backward moving average of the current account balance relative to GDP (%) 
**Five year change in share of world exports of goods and services (%) 
Net balance (inward - outward) of foreign direct investment (FDI) (million euro) 
Foreign direct investment (FDI) abroad (million euro) 
of which FDI of the reporting economy in the EU-27 countries (million euro) 
Foreign direct investment (FDI) in the reporting economy (million euro) 
of which FDI of the EU-27 countries in the reporting economy (million euro) 
**Net international investment position, relative to GDP (%) 
Year on year rate of change in gross inflow of remittances (in national currency) from migrant 
workers (%) 

Public finance 
***General government deficit / surplus, relative to GDP (%) 
***General government gross debt relative to GDP (%) 
Total  government revenues, as a percentage of GDP (%) 
Total government expenditure, as a percentage of GDP (%) 

Financial indicators 
Gross external debt of the whole economy, relative to GDP (%) 
Gross external debt of the whole economy, relative to total exports (%) 
Money supply: M1 (banknotes, coins, overnight deposits, million euro) 
Money supply: M2 (M1 plus deposits with maturity up to two years, million euro) 
Money supply: M3 (M2 plus marketable instruments, million euro) 
Total credit by monetary financial institutions to residents (consolidated) (million euro) 
**Annual change in financial sector liabilities (%) 
**Private credit flow, consolidated, relative to GDP (%) 
**Private debt, consolidated, relative to GDP (%) 

Note 

Note 
1) 
1) 
1) 
1) 
1) 
1) 2) 

1) 

Note 

Note 

3) 
4) 
5) 
6) 

: 
: 

2007 
: 
: 

2007 
-1 058.7 
-1 544.4 
395.0 
31.3 
59.4 
1.9 
: 
: 
567.8 
115.0 
: 
682.7 
: 
: 
-27.7 

2007 
6.1 
27.4 
49.5 
43.3 

2007 
: 
: 
592.4 
1 557.0 
2 728.2 
2 224.2 
: 
: 
: 

869 
1 308 

2014 
-0.5 
: 

2014 
-429.1 
-1 376.4 
690.3 
45.9 
211.0 
24.0 
-13.0 
: 
353.9 
20.7 
14.8 
374.6 
104.7 
: 
-6.7 

2014 
-3.1 
59.9 
44.8 
47.7 

2014 
162.9 
: 
: 
: 
: 
1 933.5 
: 
: 
: 

912 
1 336 

2015 
1.4 
: 

2015 
-401.7 
-1 463.7 
788.9 
80.0 
193.1 
3.9 
-11.6 
: 
619.3 
11.1 
9.0 
630.3 
393.2 
: 
-2.4 

2015 
-7.4 
66.2 
41.7 
50.0 

2015 
168 
: 
: 
: 
: 
1 959.5 
: 
: 
: 

1 071 
1 530 

2016 
0.1 
: 

2016 
-642.0 
-1 657.7 
769.1 
34.6 
212.0 
24.4 
-13.2 
: 
371.6 
-167.0 
-4.6 
204.5 
-44.0 
-177.0 
-2.6 

2016 
-2.8 
64.4 
42.6 
46.2 

2016 
162.6 
: 
: 
: 
: 
2 080.6 
: 
: 
: 

1 220 
1 780 

2017 
2.8 
: 

2017 
-691.5 
-1 860.1 
851.8 
88.3 
228.4 
20.8 
-14.4 
: 
484.3 
10.1 
-4.6 
494.4 
161.4 
-169.5 
7.5 

2017 
-5.7 
64.2 
41.5 
46.8 

2017 
160.6 
: 
: 
: 
: 
2 294.1 
: 
: 
: 

: 
: 

2018 
2.9 
: 

2018 
-792.8 
-2 049.2 
936.6 
54.9 
264.8 
33.2 
-16.4 
19.8 
322.5 
92.3 
79.6 
414.8 
17.7 
-169.4 
12.6 

2018 
-3.9 
70.9e 
42.2 
46.2 

2018 
164.7 
: 
: 
: 
: 
2 528.0 
: 
: 
: 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rates: day-to-day money rate, per annum (%) 
Lending interest rate (one year), per annum (%) 
Deposit interest rate (one year), per annum (%) 
Euro exchange rates: average of period (1 euro = … national currency) 
Trade-weighted effective exchange rate index, 42 countries (2005 = 100) 
**3 year change (T/T-3) in the trade-weighted effective exchange rate index, 42 countries 
(2005 = 100) 
Value of reserve assets (including gold) (million euro) 

External trade in goods 

Value of imports: all goods, all partners (million euro) 
Value of exports: all goods, all partners (million euro) 
Trade balance: all goods, all partners (million euro) 
Terms of trade (export price index / import price index * 100) (number) 
Share of exports to EU-27 countries in value of total exports (%) 
Share of imports from EU-27 countries in value of total imports (%) 

Demography 
Crude rate of natural change of population (natural growth rate): number of births minus 
deaths (per thousand inhabitants) 
Infant mortality rate deaths of children under one year of age (per thousand live births) 
Life expectancy at birth: male (years) 
Life expectancy at birth: female (years) 

Labour market 
Economic activity rate for persons aged 20–64: proportion of the population aged 20–64 that 
is economically active (%) 
*Employment rate for persons aged 20–64: proportion of the population aged 20–64 that are 
in employment (%) 
Male employment rate for persons aged 20–64 (%) 
Female employment rate for persons aged 20–64 (%) 
Employment rate for persons aged 55–64: proportion of the population aged 55–64 that are 
in employment (%) 
Employment by main sectors 
Agriculture, forestry and fisheries (%) 
Industry (%) 
Construction (%) 
Services (%) 
People employed in the public sector as a share of total employment, persons aged 20–64 
(%) 
People employed in the private sector as a share of total employment, persons aged 20–64 
(%) 

7) 
7) 

Note 

8) 

Note 

Note 

9) 

10) 

: 
9.29 
3.35 
1 
: 
: 

: 
9.22 
1.86 
1 
: 
: 

: 
8.53 
1.23 
1 
: 
: 

: 
7.45 
0.93 
1 
: 
: 

: 
6.81 
0.69 
1 
: 
: 

: 
6.36 
0.56 
1 
: 
: 

467.9 

544.7 

624.0 

752.9 

847.2 

1 049.8 

2007 
2 073 
455 
-1 618 
: 
69.9 
48.2 

2007 
3.0 

7.4 
71.9 
76.9 

2007 
67.0 

54.4 

62.8 
46.2 
37.7 

: 
: 
: 
: 
39.3 

40.2 

2014 
1 784 
333 
-1 451 
100.6 
34.2 
45.1 

2014 
2.4b 

4.9 
74.1 
78.9 

2014 
67.6 

55.6 

61.4 
49.4 
38.7 

5.7 
11.1 
6.5 
76.8 
32.8 

48.2 

2015 
1 842 
317 
-1 524 
100.5 
34.1 
40.6 

2015 
1.7 

2.2 
74.4 
78.6 

2015 
68.5 

56.7 

61.9 
51.5 
40.0 

7.7 
10.8 
6.6 
74.8 
32.4 

46.6 

2016 
2 062 
326 
-1 736 
98.0 
36.5 
47.3 

2016 
1.8 

3.4 
74.1 
78.9 

2016 
69.1 

57.1 

63.0 
51.3 
41.2 

7.7 
9.8 
7.7 
74.8 
31.2 

47.0 

2017 
2 304 
371 
-1 932 
105.4 
33.4 
46.4 

2017 
1.5 

1.3 
73.9 
79.2 

2017 
69.3 

58.2 

65.2 
51.4 
43.7 

7.9 
9.5 
7.6 
75.0 
32.6 

45.1 

2018 
2 554 
400 
-2 153 
97.5 
43.0 
47.1 

2018 
1.2 

1.7 
74.5 
79.3 

2018 
70.5 

59.8 

66.7 
52.9 
46.6 

8.0 
9.9 
9.0 
73.1 
31.7 

63.2b 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unemployment rate: proportion of the labour force that is unemployed (%) 
Male unemployment rate (%) 
Female unemployment rate (%) 
Youth unemployment rate: proportion of the labour force aged 15–24 that is unemployed (%) 
Long-term unemployment rate: proportion of the labour force that has been unemployed for 
12 months or more (%) 
Unemployment rate for persons (aged 25–64) having completed at most lower secondary 
education (ISCED levels 0-2) (%) 
Unemployment rate for persons (aged 25–64) having completed tertiary education (ISCED 
levels 5-8) (%) 

Social cohesion 
Average nominal monthly wages and salaries (national currency) 
Index of real wages and salaries (index of nominal wages and salaries divided by the 
inflation index) (2010 = 100) 
GINI coefficient 
Poverty gap 
*Early leavers from education and training: proportion of the population aged 18–24 with at 
most lower secondary education who are not in further education or training (%) 

Note 

19.3 
18.1 
20.9 
38.3 
14.2 

24.9 

9.3 

2007 
246 
79.6 

: 
: 
12.2 

18.0 
17.8 
18.2 
35.8 
14.0 

32.8 

9.0 

2014 
479 
91.4 

36 
32.8 
5.1 

17.5 
17.7 
17.3 
37.6 
13.6 

28.7 

9.4 

2015 
480 
90.6 

36 
36.6 
5.7 

17.8 
18.3 
17.1 
35.9 
13.4 

22.1 

11.5 

2016 
499 
94.4 

36 
35.6 
5.5 

16.1 
15.4 
16.9 
31.7 
12.4 

21.7 

10.7 

2017 
510 
94.2 

37 
34.0 
5.4 

15.2 
15.3 
15.1 
29.4 
11.4 

21.0 

13.9 

2018 
511 
92.0 

35p 
35.3p 
4.6 

Standard of living 
Number of passenger cars relative to population size (number per thousand population) 
Number of mobile phone subscriptions relative to population size (number per thousand 
population) 
Mobile broadband penetration (per 100 inhabitants) 
Fixed broadband penetration (per 100 inhabitants) 

Infrastructure 
Density of railway network (lines in operation per thousand km²) 

Length of motorways (kilometres) 

Innovation and research 
Public expenditure on education relative to GDP (%) 
*Gross domestic expenditure on R&D relative to GDP (%) 
Government budget appropriations or outlays on R&D (GBAORD), as a percentage of GDP 
(%) 
Percentage of households who have internet access at home (%) 

Note 

2007 
290.3 
1 097.9 

2014 
280.1 
1 630.3b 

2015 
282.8 
1 620.1 

2016 
296.9 
1 632.5 

2017 
310.5 
1 636.7 

2018 
331.7 
1 822.8 

Note 

Note 

: 
2.6 

2007 
18.4 

0 

2007 
: 
1.14 
: 

10.4 
16.7 

2014 
18.4 

0 

2014 
: 
0.36 
: 

8.6 
18.1 

2015 
18.4 

0 

2015 
: 
0.37 
: 

8.9 
18.9 

2016 
18.4 

0 

2016 
: 
0.32 
: 

10.5 
22.1 

2017 
18.4 

0 

2017 
: 
0.35 
: 

8.8 
24.9 

2018 
18.4 

0 

2018 
: 
: 
: 

: 

63.6e 

67.5e 

69.8e 

70.6e 

72.2e 

Environment 
*Index of greenhouse gas emissions,  CO2 equivalent (1990 = 100) 
Energy intensity of the economy (kg of oil equivalent per 1 000 euro GDP at 2010 constant 
prices) 

Note 

2007 
83.3 
376.0 

2014 
54.6 
289.1 

2015 
57.6 
292.4 

2016 
: 
272.9 

2017 
: 
272.9 

2018 
: 
272.2 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Electricity generated from renewable sources relative to gross electricity consumption (%) 
Road share of inland freight transport (based on tonne-km) (%) 

Energy 
Primary production of all energy products (thousand TOE) 
Primary production of crude oil (thousand TOE) 
Primary production of solid fuels (thousand TOE) 
Primary production of gas (thousand TOE) 
Net imports of all energy products (thousand TOE) 
Gross inland energy consumption (thousand TOE) 
Gross electricity generation (GWh) 

11) 

Note 

Agriculture 
Agricultural production volume index of goods and services (at producer prices) (2010 = 100) 
Utilised agricultural area (thousand hectares) 
Livestock numbers: live bovine animals (thousand heads, end of period) 
Livestock numbers: live swine (thousand heads, end of period) 
Livestock numbers: live sheep and live goats (thousand heads, end of period) 
Raw milk available on farms (thousand tonnes) 
Harvested crop production: cereals (including rice) (thousand tonnes) 
Harvested crop production: sugar beet (thousand tonnes) 
Harvested crop production: vegetables (thousand tonnes) 

Note 

12) 
12) 
12) 
13) 

14) 

Source: Eurostat and the statistical authorities in Montenegro 

27.4 
33.2 

2007 
530 
0 
266 
0 
621 
1 144 
2 144 

2007 
: 
222.2 
109.3 
10.4 
: 
172.6 
2.4 
0 
31.8 

52.2 
100.0b 

2014 
691 
0 
364 
0 
291 
974 
3 173 

2014 
: 
230.3 
93.6 
22.0 
237.4 
191.8 
7.9 
0 
44.0 

43.1 
80.8 

2015 
705 
0 
390 
0 
306 
1 019 
3 003 

2015 
: 
231.4 
92.4 
25.0 
224.3 
183.1 
7.0 
0 
51.1 

54.4 
58.5 

2016 
653 
0 
308 
0 
343 
981 
3 141 

2016 
: 
255.8p 
89.2p 
55.8p 
223.4p 
180.6p 
7.6p 
0 
42.5p 

31.6 
39.0 

2017 
613 
0 
324 
0 
421 
1 027 
2 483 

2017 
: 
256.4p 
86.6p 
25.0p 
218.6p 
181.5p 
7.8p 
0 
41.9p 

64.4 
55.7 

2018 
733 
0 
366 
0 
333 
1 078 
: 

2018 
: 
256.8p 
83.3p 
23.6p 
216.0p 
181.5p 
7.9p 
0 
43.1p 

: = not available 
b = break in series 
e = estimate 
p = provisional 
* = Europe 2020 indicator 
** = Macroeconomic Imbalance Procedure (MIP) indicator 
*** = The government deficit and debt data of enlargement countries are published on an "as is" basis and without any 
assurance as regards their quality and adherence to ESA rules. 

Footnotes 

1)  2007: based on balance of payments manual edition 5 (BPM5). 
2)  Secondary income only. 
3)  National definition of M0, comprised of bank deposits with the CBM (settlement account and reserve requirement 

account) and the estimated amount of cash in circulation. 

4)  National definition of M11, comprised of M0 plus demand deposits by the non-banking sector held with banks and 

the CBM, in EUR and other currencies, plus the Central Government’s demand deposits in EUR and other 
currencies. 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5)  National definition of M21, comprised of M11 plus the non-banking sector’s time deposits with banks, in EUR and 

other currencies, plus the Central Government’s time deposits in EUR and other currencies. 

6)  Loans include total banks' loans granted to non-MFI residents and other claims (factoring and forfeiting, claims on 

outstanding bills of acceptance, guarantees and bills of exchange). 

7)  Weighted average effective interest rate, outstanding amounts. 
8)  Calculated from indices with the previous year as the reference year (= 100). 
9)  Data of NGOs are excluded. Number of employees in the public sector as a share of the total number of persons 

employed. 

10)  Comprises data of private enterprises, entrepreneurs and private households. 2007 and 2014-2017: number of 
employees in the private sector as a share of the total number of persons employed. 2018: number of persons 
employed in the private sector as a share of the total number of persons employed. 

11)  2007: total freight traffic (national territory and international transport). 
Including livestock held by enterprises, cooperatives and households. 
12) 
13) 
In million litres. Net quantity, from enterprises, cooperatives and households. 
14)  2007, 2014 and 2015: including the production of kitchen gardens.