COMMISSION STAFF WORKING DOCUMENT Montenegro 2021 Report Accompanying the document Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions 2021 Communication on EU Enlargement Policy
Date: 2021-10-19
Institutions: Directorate-General for Neighbourhood and Enlargement Negotiations, European Commission
Subjects: Montenegro, accession criteria, accession negotiations, pre-accession strategy, regional cooperation

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   EUROPEAN COMMISSION  Strasbourg, 19.10.2021  SWD(2021) 293 final/2  COMMISSION STAFF WORKING DOCUMENT Montenegro 2021 Report Accompanying the document Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions  2021 Communication on EU Enlargement Policy {COM(2021) 644 final} - {SWD(2021) 288 final} - {SWD(2021) 289 final} - {SWD(2021) 290 final} - {SWD(2021) 291 final} - {SWD(2021) 292 final} - {SWD(2021) 294 final}  
 
 
TABLE OF CONTENTS 

1. 

Introduction ..................................................................................................................................... 2 

1.1.   Context ..................................................................................................................................... 2 

1.2.   Summary of the Report ............................................................................................................ 2 

1.3 State of play of the accession negotiations ................................................................................... 7 

2.  Cluster 1: The Fundamentals of the Accession Process .................................................................. 8 

2.1. 

Functioning of democratic institutions and Public Administration Reform ............................ 8 

2.1.1 Democracy .............................................................................................................................. 8 

2.1.2. Public Administration Reform ............................................................................................. 14 

2.2. Rule of law and fundamental rights ........................................................................................... 17 

2.2.1  Chapter 23: Judiciary and fundamental rights .................................................................. 17 

2.2.2  Chapter 24: Justice, freedom and security ........................................................................ 38 

2.3. Economic criteria ........................................................................................................................ 52 

2.3.1. The existence of a functioning market economy ................................................................ 52 

2.3.2. The capacity to cope with competitive pressure and market forces within the Union ...... 58 

2.4. Public Procurement, Statistics; Financial control ....................................................................... 60 

Chapter 5: Public procurement ..................................................................................................... 60 

Chapter 18: Statistics ..................................................................................................................... 62 

Chapter 32: Financial control ........................................................................................................ 64 

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

4. Ability to assume obligations of membership ................................................................................... 69 

Cluster 2: Internal Market ................................................................................................................. 69 

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 ........................................... 72 

Chapter 4 - Free movement of capital .......................................................................................... 73 

Chapter 6: Company law ............................................................................................................... 75 

Chapter 7: Intellectual property law ............................................................................................. 76 

Chapter 8: Competition policy....................................................................................................... 77 

Chapter 9: Financial services ......................................................................................................... 79 

Chapter 28: Consumer and health protection .............................................................................. 80 

Cluster 3: Competitiveness and inclusive growth ............................................................................. 83 

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

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Chapter 16: Taxation ..................................................................................................................... 85 

Chapter 17: Economic and monetary policy ................................................................................. 86 

Chapter 19: Social Policy and employment ................................................................................... 87 

Chapter 20: Enterprise and industrial policy ................................................................................. 90 

Chapter 25: Science and Research ................................................................................................ 91 

Chapter 26: Education and culture................................................................................................ 93 

Chapter 29: Customs union ........................................................................................................... 95 

Cluster 4: The Green agenda and sustainable connectivity .............................................................. 97 

Chapter 14: Transport policy ......................................................................................................... 97 

Chapter 15: Energy ........................................................................................................................ 99 

Chapter 21: Trans-European networks ....................................................................................... 101 

Chapter 27: Environment and climate change ............................................................................ 103 

Cluster 5: Resources, agriculture and cohesion .............................................................................. 105 

Chapter 11: Agriculture and rural development ......................................................................... 106 

Chapter 12: Food safety, veterinary and phytosanitary policy ................................................... 107 

Chapter 13: Fisheries ................................................................................................................... 108 

Chapter 22: Regional policy and coordination of structural instruments ................................... 109 

Chapter 33: Financial and budgetary provisions ......................................................................... 110 

Cluster 6: External relations ............................................................................................................ 111 

Chapter 30: External relations ..................................................................................................... 112 

Chapter 31: Foreign, security and defence policy ....................................................................... 113 

Annex I – Relations between the EU and Montenegro ....................................................................... 114 

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1. 

INTRODUCTION  

1.1.   CONTEXT 

Accession negotiations with Montenegro were opened in June 2012. To date 33,  negotiating 
chapters  have  been  opened,  of  which  three  have  been  provisionally  closed.  Montenegro 
accepted  the  revised  enlargement  methodology  focusing  on:  fundamental  reforms,  stronger 
political steer, increased dynamism and predictability of the process. Montenegro continued to 
broadly implement  the Stabilisation and Association  Agreement  (SAA) and meetings of the 
joint bodies under the agreement took place at regular intervals. 

Overall progress in the accession negotiations depends on progress in the area of rule of law, 
as  per  the  requirements  set  out  in  the  Negotiating  Framework  as  well  as  the  revised 
methodology formally accepted by Montenegro in the Intergovernmental Conference held on 
22  June  2021.  Progress  towards  meeting  the  interim  benchmarks  set  in  the  rule  of  law 
Chapters  23  and  24  will  be  key  to  achieve  further  progress  in  the  negotiations  overall,  no 
further chapters will be provisionally closed before this milestone is reached.  

The  political  commitment  of  the  Montenegrin  authorities  to  the  strategic  goal  of  European 
integration  has  been  consistently  stated  as  the  key  priority  for  the  country  during  a  rather 
challenging reporting period as the COVID-19 pandemic continued throughout the period. By 
September  2021,  Montenegro  had  recorded  around  131,500  cases  and  about  1940  deaths 
related to the pandemic, around 33% of the population had been fully vaccinated. Though the 
final  extent  of  impact  in  terms  of  loss  of  human  lives  and  damage  to  the  economies  is  still 
difficult  to  assess,  it  is  clear  that  the  necessary  restrictions  imposed  in  the  context  of  the 
pandemic took a heavy toll, notably on tourism-dependent economy of Montenegro, which is 
the  worst  affected  country  in  the  region.  The  EU  continued  to  provide  essential  and 
unparalleled  support.  This  includes  financial  support:  a  substantial  package  of  EUR  53 
Million  of  non-repayable  financial  aid  and  EUR  60  Million  of  favourable  loans  as  macro-
financial  assistance  to  address  the  immediate  health  crisis,  in  addition  to  delivering  vast 
quantities of health supplies and equipment, as well as EUR 200,000 allocation under the EU 
Solidarity Fund. The EU and its Member States have also supported the country’s vaccination 
campaign by providing  over 262,000 doses by early September, which is a sign of concrete 
EU solidarity.  

1.2.   SUMMARY OF THE REPORT1 2 

Concerning the political criteria, the reporting period was marked by tensions and mistrust 
between  political  actors.  The  deep  polarisation  between  the  new  ruling  majority  and  the 
opposition  persisted  throughout  2020  and  intensified  in  the  post-election  period.  Heated 
relations  and  mistrust  fed  frequent  escalations  and  further  exacerbated  political  divisions, 
including within the ruling majority. The Parliamentary elections resulted in a change of the 

1  This  report  covers  the  period  from  June  2020  to  June  2021.  It  is  based  on  input  from  a  variety  of  sources, 
including  contributions  from  the  government  of  Montenegro,  the  EU  Member  States,  European  Parliament 
reports and information  from  various  international and  non-governmental organisations.  This also includes the 
results of comparative assessments and indices produced by other stakeholders, in particular in the area of rule of 
law. 
2  For  the  state  of  play  the  report  uses  the  following  assessment  scales:  early  stage,  some  level  of  preparation, 
moderately  prepared,  good  level  of  preparation  and  well  advanced.  For  progress  made  during  the  reporting 
period,  the  following  scale  has  been  used:  backsliding,  no  progress,  limited  progress,  some  progress,  good 
progress and very good progress. Where appropriate, also interim steps have been used. 

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ruling coalition and transformed the dynamics between organs of the state and demonstrated a 
need  to  find  a  balance  in  the  new  political  landscape,  including  on  questions  concerning 
religious  communities  and  ethnicity,  which  dominated  the  political  agenda  during  the 
reporting  period.  Friction  between  the  executive  and  legislative  powers  has  slowed  down 
reform work. In December 2020, Parliament elected the 42nd government of Montenegro, the 
number  of  ministries  was  substantially  reduced.  It  is  the  first  government  in  Montenegro 
composed mostly of non-politically affiliated experts. 

In  its  final  report  on  the  2020  Parliamentary  elections,  the  OSCE  Office  for  Democratic 
Institutions and Human Rights (ODIHR) limited election observation mission recommended a 
comprehensive reform to harmonise the electoral legal framework and regulate all key aspects 
of elections, through an inclusive process, well in advance of the next elections. In December 
2020, the Parliament established the committee on comprehensive electoral reform, tasked to 
deliver  legislative  reforms  by  the  end  of  2021.  Progress  has  been  slow  due  to  initial  delays 
and periodic boycotts. Parliament dismissed the President of the State Electoral Commission 
(SEC)  in  June  2021,  appointment  of  a  new  President  is  still  pending  in  the  Parliament. 
Continued efforts are needed to enhance professionalism, transparency and accountability of 
the SEC. 

In  2021,  local  elections  took  place  in  two  municipalities.  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, leading to nearly constant pre-electoral campaigning at national and local 
level. A credible, independent and effective institutional response to the so-called ‘envelope 
affair’ remains to be ensured. 

The  lack  of  constructive  engagement  of  all  parliamentary  actors  prevented  a  meaningful 
political dialogue, further polarising the political  landscape. The boycott of plenary sessions 
by  majority  of  MPs,  from  the  opposition  and  the  ruling  majority  caused  a  suspension  of 
decision-making  in  Parliament  in  2021.  Parliament  improved  the  transparency  of  its  work, 
communicating with the public and stepped up its legislative and oversight role overall.  

The ruling majority frequently initiated or passed legislation through the fast-track procedure, 
without  necessary  public  consultations  and  without  duly  taking  into  account  EU  accession 
requirements.  Parliament  is  yet  to  demonstrate  in  practice  its  commitment  to  Montenegro's 
EU  reform  agenda  and  improve  coordination  with  the  government  on  legislative  initiatives. 
Parliament  should  strengthen  the  professional  and  expert  capacity  of  its  administrative  staff 
and improve women's political representation. 

The  composition  of  the  current  Parliament  is  unprecedented  in  Montenegro’s  history.  It 
should endeavour to find a broad cross-party and societal consensus on EU-related reforms, 
which  is  vital  for  the  country  to  make  progress  on  its  EU  path.  It  is  clear  that  active  and 
constructive  participation  by  all  parties  is  required  to  enhance  parliamentary  accountability, 
oversight of the executive, democratic scrutiny, to improve the quality of legislation and for 
key appointments. So far, the Parliament was not able to secure the required 2/3 majority for 
important  judicial  appointments  and  therefore  key  functions  of  the  judicial  system  are  still 
filled on acting bases. 

As  regards  governance,  there  is  a  need  to  strengthen  stakeholders'  participation,  and  the 
government's capacity to implement reforms. In December 2020, Parliament elected the 42nd 
government of Montenegro. The number of ministries was reduced to 12; women head four of 
them. The new government  composition is  the first expert government  in  Montenegro, only 
the position of Deputy Prime Minister is held by a political party leader. The government also 
adopted  a  new  national  programme  for  EU  accession  for  the  period  2021-2023.  The 
negotiation structure was substantially weakened by the resignation or dismissal of 110 of its 

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members,  including  16  chapter  negotiators  and  24  heads  of  working  groups.  Most  of  these 
key positions remain vacant. Some key ministries failed to show sufficient commitment and 
constructive engagement in the EU accession process under their new leadership.  

The  role  of  civil  society  is  recognised  and  promoted,  however  the  current  legal  and 
institutional  framework  needs  to  be  further  improved  to  strengthen  the  consultation  and 
cooperation mechanisms between state institutions and the civil society in the context of the 
EU accession process. 

Montenegro  is  moderately  prepared  on  the  reform  of  its  public  administration.  Overall, 
limited  progress  was  made  in  the  reporting  period.  The  change  of  government  and  of  the 
parliamentary  majority  severely  affected  the  civil  service:  amendments  to  the  Law  on  Civil 
Servants  and  State  Employees  lowered  the  requirements  for  competence,  independence  and 
merit-based  recruitment  of  civil  servants.  Moreover,  the  recent  reorganisations  of  public 
administration  led  to  substantial  staff  changes,  including  at  senior  levels,  jeopardising 
Montenegro’s capacity to retain experienced staff in EU-accession process related matters in 
many  sectors.  Strong  political  will  is  needed  to  effectively  depoliticise  the  public  service, 
optimise the state administration and implement managerial accountability. 

Montenegro remains moderately prepared to apply the EU acquis and European standards in 
the  area  of  judiciary  and  fundamental  rights  and  has  made  limited  progress  overall,  with 
limited track record on accountability. No progress has been made in the area of the judiciary 
and  the  implementation  of  key  judicial  reforms  is  stagnating.  The  decisive  political 
commitment needed to unblock important segments of those reforms is still outstanding, with 
a  number  of  appointments  to  the  judiciary  remaining  pending  in  Parliament  due  to  the 
inability  to  secure  a  qualified  majority.  Despite  a  more  proactive  approach  of  the  Anti-
Corruption Agency, corruption remains prevalent in many areas and an issue of concern. On 
fundamental  rights,  Montenegro  continued  meeting  obligations  from  international  human 
rights  instruments  and  legislation  However  challenges  remain  in  ensuring  that  national 
legislation on human rights is implemented effectively. There was limited progress in the area 
of freedom of expression. 

Montenegro has achieved some level of preparation in the fight against corruption. It made 
limited progress, with last year’s recommendations partially met with regard to further results 
on  track  records  on  repression  and  prevention  of  corruption  and  the  efforts  of  the  Anti-
Corruption  Agency  to  address  its  challenges.  Track  record  on  seizure  and  confiscation  of 
assets  needs  to  be  further  improved.  The  Anti-Corruption  Agency  (ACA)  under  new 
management  demonstrated  a  more  proactive  approach,  especially  in  stepping  up  its 
communication and outreach activities towards the general public, media and civil society and 
in  addressing  the  caseload  pending  from  previous  years.  Despite  this  positive  trend, 
challenges  related  to  Agency’s  independence,  priority-setting,  selective  approach  and  the 
quality of its decisions remain and require sustained efforts in this respect. Corruption remains 
prevalent  in  many  areas.  There  is  a  need  for  strong  political  will  to  effectively  address  this 
issue, as well as a robust criminal justice response to high-level corruption. 

Montenegro  has  some  level  of  preparation/is  moderately  prepared  in  the  fight  against 
organised  crime.  It  made  some  progress  in  addressing  last  year’s  recommendations,  in 
particular in improving access for law-enforcement agencies to key databases and increasing 
the  number  of  investigators  and  experts  in  key  areas.  The  number  of  organised  crime  cases 
investigated and prosecuted continued to grow, and the number of cases adjudicated at courts 
nearly  tripled.  International  police  cooperation  is  well  established  and  continued  to  yield 
results,  with  unprecedented  drug  seizures  abroad.  However,  the  capacity  to  address  tobacco 
smuggling and money laundering is  not  yet  at  the expected level.  Montenegro still needs to 

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address some systemic deficiencies in its criminal justice system, including the way organised 
crime cases are handled in the courts. 

On fundamental rights, Montenegro largely has the legislative and institutional framework 
in place and made some progress in meeting the obligations laid down in international human 
rights  instruments  and  legislation.  However,  challenges  remain  in  effective  implementation. 
The efficiency of investigations into the excessive use of force by law-enforcement and hate 
crimes  needs  to  improve  further.  Vulnerable  groups,  including  Roma  and  Egyptians,  and 
persons  with  disabilities  continue  to  experience  multiple  forms  of  discrimination  and 
difficulties  in  enforcing  their  rights  in  administrative  and  judicial  proceedings.  Women 
continue  to  experience  inequality  in  participating  in  political  and  public  life  and  accessing 
employment  and  economic  opportunities.  Gender-based  violence  and  violence  against 
children  remain  issues  of  serious  concern.  Incidents  of  ethnically  and  religiously  motivated 
attacks,  hate  crimes  and  hate  speech  continued  to  rise.  Montenegro  has  only  partially 
addressed last year’s recommendations. Access to justice, in particular for vulnerable groups 
remains to be improved. The amendments to the Law on Freedom of Religion of Belief were 
adopted after limited, and not fully inclusive, consultations with religious communities. 

Montenegro  has  achieved  some  level  of  preparation  in  the  area  of  freedom  of  expression. 
Overall, it made limited progress during the reporting period and only partially addressed last 
year’s recommendations. There were some new developments on investigation into the 2018 
shooting  of  an  investigative  journalist,  but  full  and  effective  judicial  follow-up  both  to  this 
case and to other important old cases, remains to be ensured. In April 2021, the government 
established a new ad hoc commission for monitoring violence against the media, but it has not 
yet  fully  or  effectively  addressed  the  significant  recommendations  made  by  the  previous 
commission.  A  revision  of  the  legal  framework  is  ongoing,  to  address  the  additional  issues 
identified in the 2020 law on media and the law on public broadcaster RTCG, to complete it 
with a new law on audio-visual media, and ensure their full alignment with the EU acquis and 
European standards. More efforts  are required to limit  the  effects  of disinformation  and on-
line  harassment  and  hate  speech,  while  ensuring  that  such  measures  do  not  limit 
disproportionately  freedom  of  expression.  Parliament  appointed  the  new  RTCG  Council  in 
June  2021  without  broad  cross-party  support.  Following  this  change  and  the  subsequent 
changes  of  RTCG  management,  the  public  broadcaster  started  to  feature  politically  more 
diverse  content.  The  media  scene  remains  overall  highly  polarised,  often  marked  by 
politically biased and unbalanced reporting, including extensive involvement of foreign media 
from  the  region,  which  was  particularly  notable  during  election  periods.  Self-regulatory 
mechanisms remain weak.  

On the economic criteria Montenegro has made some progress and is moderately prepared in 
developing  a  functioning  market  economy.  The  country  experienced  a  sharp  recession  in 
2020 as the COVID-19 pandemic took a heavy toll on its tourism-dependent economy. This 
created  large  negative  spill  over  effects  on  private  consumption,  investment,  employment, 
trade  and  public  finances.  To  support  citizens  and  the  economy,  authorities  implemented 
several  economic  support  packages.  These  measures  were,  to  a  large  extent,  well  targeted, 
transparent  and  of  a  temporary  character.  In  spite  of  some  delays  due  to  the  pandemic,  the 
government continued implementing some of the envisaged reforms to improve the business 
environment.  An  orderly  government  transition  in  the  middle  of  the  crisis  preserved  the 
effectiveness  of  the  COVID-19  policy  response.  The  new  government  managed  to  mitigate 
fiscal  risks  by  accumulating  sizeable  fiscal  buffers  to  cover  the  2021  financing  needs, 
including for additional COVID-19 support programmes. The financial sector remained stable 
during  the  crisis,  as  a  result  of  its  strong  pre-crisis  position  and  the  support  measures 

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implemented by  the  authorities, but  the delayed impact  of the crisis  on bank balance sheets 
calls for close monitoring of the financial institutions. 

Montenegro has made some progress  and is  moderately  prepared to  cope with competitive 
pressure  and  market  forces  within  the  EU.  The  COVID-19  pandemic  demonstrated  that 
lack of diversification makes Montenegro’s tourism-dependent economy highly vulnerable to 
shocks. Some efforts have been made to improve innovation capacities and to introduce EU 
standards at local companies thanks to public grants, but these remain modest given the scale 
of  the  challenge.  The  quality  of  the  educational  system  and  curricula  preferences  appear 
inadequate to raise human capital and address skill mismatches. Modern telecommunication 
and  energy  infrastructure  is  being  deployed  rapidly,  but  there  is  a  substantial  deficit  in 
transport infrastructure, hindering integration with regional and EU markets. In addition, the 
low level  of sophistication of domestic products, the small  size of local  companies and low 
level  of  participation  in  external  markets  represent  major  obstacles  for  increasing 
competitiveness and diversifying the economy. 

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  marred  by 
tensions, as nationalistic rhetoric increased.  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 
many areas, albeit at a slower pace than previously.  

The internal market cluster is key for Montenegro’s preparations to meet the requirements of 
the EU’s internal market and is of high relevance for possible early integration measures and 
the  development  of  the  Common  Regional  Market.  Progress  was  achieved  on  market 
surveillance,  accreditation  and  standardisation;  electronic  company  registration  legislative 
prerequisites; prevention of money laundering and terrorist financing; company law; state aid 
and  aid  transparency;  banking;  consumer  and  health  protection.  Montenegro  should  now 
focus on: alignment with the EU acquis governing metrology and standardisation, develop the 
operational  capacity  of  the  Employment  Agency;  regulated  professions,  capital  movements 
and  payments,  including  on  the  acquisition  of  property  rights,  phasing  out  its  investor 
citizenship scheme; company law and corporate accounting; intellectual property; competition 
and  State  aid;  consumer  protection  and  health  protection  and  on  implementing  the  laws 
aligning with the capital requirements EU acquis in the banking sector.  

The  competitiveness  and  inclusive  growth  cluster  has  significant  links  to  Montenegro’s 
Economic  Reform  Programme.  Progress  was  made  on  tobacco  control;  pensions;  industrial 
policy,  smart  specialisation,  vocational  education  and  training,  and  trade  facilitation.  On 
economic and monetary policy, work to implement the action plan for alignment with the EU 
acquis is ongoing. Montenegro should now focus on: independence of the media sector; VAT, 
excise  duties  and  direct  taxation  coordination  of  economic  and  monetary  issues;  labour  law 
and  the  anti-discrimination  law,  safety  at  work;  industrial  policy,  research  and  innovation, 
education and training and EU-compatible computerised transit system. 

The  green  agenda  and  sustainable  connectivity  cluster  has  significant 
to 
Montenegro’s  Economic  Reform  Programme,  the  Commission’s  Economic  and  Investment 
Plan and the Green Agenda for the Western  Balkans. Progress  was made in  creating a day-
ahead  energy  market;  Transport  Development  Strategy,  nature  protection  and  the  National 
Energy  and  Climate  Plan.  Montenegro  should  now  focus  on:  the  energy  sector;  trans-

links 

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European  networks,  telecommunications,  TEN-T  and  TEN-E  Regulations;  green  transition, 
waste management, water quality, nature protection and climate change. 

Resources,  agriculture  and  cohesion  cluster  comprises  policies  linked  to  EU  Structural 
funds  and  Investment  funds  and  developing  the  capacities  to  assume  responsibilities  of  a 
future  EU  Member  State.  Progress  was  made  in  agriculture,  food  and  fisheries,  regional 
policy and structural instruments, financial and budgetary provisions and management of own 
resources.  Montenegro  should  now  focus  on:  implementation  of  the  IPARD  programme, 
agriculture  and  rural  development  as  well  as  fisheries,  upgrading  food  establishments  and 
food safety  controls,  EU cohesion  policy requirements,  capacity for the handling of indirect 
management programmes in IPA and rules of administration for the own resources system.  

On  the  external  relations  cluster,  Montenegro  continued  to  fully  align  with  all  EU  CFSP 
positions,  declarations  and  EU  common  positions.  It  also  continued  to  implement  actions 
under the common regional market based on EU rules, including through cooperation within 
CEFTA  and  the  Regional  Cooperation  Council.  Alignment  to  the  integrity  of  the  Rome 
Statute  would  allow  the  provisional  closure  of  the  remaining  open  chapter  31  under  this 
cluster.  

Strengthening  the  administrative  capacity  to  apply  the  EU  acquis  remains  an  important 
challenge for Montenegro, including the urgent need to re-construct a functional negotiating 
structure.  

On migration, both legal and irregular migration fell sharply in 2020 against the backdrop of 
the COVID-19 pandemic. The arrival of irregular migrants fell by 60% compared with 2019, 
with  3149  migrants  apprehended  in  2020.  The  Special  Prosecutor’s  Office  conducted  two 
investigations  into  migrant  smuggling  in  2020.  In  one  case,  final  convictions  were  issued 
against eight individuals. Although Montenegro’s capacity to manage mixed migration flows 
and  the  integration  of  refugees  is  improving,  sustained  efforts  are  required  in  order  for  the 
country  to  cope  with  migratory  pressure,  by  further  increasing  its  reception  capacity  and 
raising  standards  in  the  reception  centres.  This  will  also  include  developing  further  its 
international cooperation on readmission, supporting the successful reintegration of returnees, 
increasing  its  capacity  to  prosecute  migrant  smuggling  networks,  and  setting  up  a  modern 
migrants’ data collection system. 

1.3 STATE OF PLAY OF THE ACCESSION NEGOTIATIONS  

CLUSTERS 

Chapters / areas  

Date chapter opened / closed 
with  interim or closing 
benchmarks   

Fundamentals 

All chapters open 

Internal Market 

All chapters open 

23-Judiciary and fundamental rights  
24-Justice, freedom, security  
  5-Public Procurement  
18-Statistics  
32-Financial control 
…Economic Criteria 
…Functioning of democratic Institutions  
…PAR 

 1-Free movement of goods   
 2-Freedom of movement for workers   
 3-Right of establishment and freedom to  
     establish services  
 4-Free movement of capital 

7 

December 2013  
December 2013  
December 2013  
December 2014 
June 2014  

- 
- 

June 2017  
December 2017  
December 2017  
… 
June 2014  

 
 
 
 
 
 
 6-Company Law  
 7-Intellectual property rights 
 8-Competition  
 9-Financial services  
28-Consumer and health protection 

10-Information society and media  
16-Taxation 
17-Economic and monetary policy 
19-Social policy and employment  
20-Enterprise and industrial policy  
25-Science and research 

26-Education and culture 

29-Customs union  

14- Transport policy 
15- Energy 
21-Trans-European Networks 
27-Environment and climate change  

11-Agriculture and rural development  
12-Food safety, veterinary, phytosanitary 
services 
13-Fisheries  
22-Regional policy and coordination of  
      structural instruments  
33-Financial and budgetary provisions  

30-External relations  
31- Foreign, security & defence policy  

Competitiveness and 
inclusive growth 

All chapters open  ch.25  
and 26 provisionally 
closed 

Green Agenda and 
Sustainable 
connectivity 

All chapters open 
Resources, Agriculture 
and  cohesion 

All chapters open  

External Relations 

Both chapters open 
ch.30 provisionally 
closed  

December 2013  
March 2014  
June 2020  
June 2015  
December 2014   

March 2014  
March 2015  
June 2018  
December 2016  
December 2013  
December 2012 (opened and closed - 
no closing benchmarks);  
April 2013  (opened and closed – no 
closing benchmarks) 
December 2014   

December 2015  
December 2015  
June 2015  
December 2018  

December 2016  

June 2016  
June 2016  

June 2017  
December 2014  

March 2015 – June 2017 
provisionally closed 
June 2014   

2. 

CLUSTER 1: THE FUNDAMENTALS OF THE ACCESSION PROCESS 

FUNCTIONING OF DEMOCRATIC INSTITUTIONS AND PUBLIC ADMINISTRATION 

2.1. 
REFORM  

2.1.1 Democracy 

The  August  2020  Parliamentary  elections  resulted  in  a  change  of  the  ruling  coalition  and 
transformed the dynamics between the executive and legislative powers, and demonstrated a 
need  to  find  a  balance  in  the  new  political  landscape,  including  on  questions  concerning 
religious  communities  and  ethnicity,  which  dominated  the  political  agenda  during  the 
reporting period. The international election observers recommend a comprehensive reform to 
harmonise the electoral legal framework and regulate all key aspects of the elections, through 
an inclusive process, well in advance of the next elections. In December 2020, the Parliament 
elected  the  42nd  government  of  Montenegro,  the  number  of  ministries  was  substantially 
reduced  and  it  is  the  first  government  in  Montenegro  composed  mostly  of  non-politically 
affiliated experts. 

Elections  

In  its  final  report  on  the  2020  parliamentary  elections,  OSCE  Office  for  Democratic 
Institutions and Human Rights (ODIHR) limited election observation mission recommended a 

8 

 
 
 
 
  
  
 
 
 
 
 
comprehensive reform to harmonise the electoral legal framework and regulate all key aspects 
of  the  elections,  through  an  inclusive  process,  well  in  advance  of  the  next  elections.  In 
December 2020, the Parliament established the committee on comprehensive electoral reform, 
tasked to deliver legislative reforms by the end of 2021. Progress has been slow due to initial 
delays  and  periodic  boycotts.  In  2021,  local  elections  took  place  in  two  municipalities. 
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,  leading  to  nearly  constant  pre-electoral 
campaigning  at  national  and  local  level.  A  credible,  independent  and  effective  institutional 
response to the so-called ‘envelope affair’ remains to be ensured. 

In December 2020, OSCE/ODIHR limited election observation mission (LEOM) published its 
final report on the 30 August 2020 parliamentary elections, identifying 23 recommendations 
to  bring  the  electoral  framework  closer  in  line  with  OSCE  commitments  and  other 
international obligations  and standards for democratic elections. The mission concluded that 
the  electoral  legal  framework  provides  sufficient  regulations  for  democratic  conduct  of 
elections,  but  gaps,  ambiguities  and  inconsistencies  undermine  legal  certainty  and  allow  for 
selective  implementation.  A  number  of  previous  OSCE/ODIHR  recommendations  remain 
unaddressed,  including  those  related  to  an  audit  of  the  voter  register,  measures  against  the 
misuse of state resources, as well as certain limitations of suffrage rights.  

In  December  2020,  the  Parliament  established  a  new  Committee  for  a  comprehensive 
electoral  reform,  with  a  mandate  to  propose  legislative  reforms  first  by  end  of  June  2021, 
subsequently  extended  to  end  of  2021.  In  April  2021,  following  the  nomination  of  all  14 
ruling majority and opposition members, the committee initiated its work. In May 2021, three 
DPS  MPs  suspended  their  participation  in  the  work  of  the  Committee,  remaining  four 
opposition  MPs  left  the  Committee  in  June  2021.  Three  civil  society  organisations  (CSOs) 
were  invited  to  participate.  Genuine  inclusiveness,  strong  political  commitment  and 
willingness to find cross-party consensus would be needed for the Committee to deliver on its 
ambitious agenda. In addition to addressing outstanding OSCE/ODIHR recommendations, the 
committee  has  a  mandate  to  propose  new  laws  on  election  of  MPs  and  councillors,  voter’s 
registry,  financing of political  entities and electoral  campaigns, and registers of residence, a 
decision on holding local  elections  in all municipalities in a single day as well as a code of 
ethics for election campaigns. Furthermore, the committee has been tasked with analysing the 
implementation of and proposing possible amendments to the Law on identity cards and the 
Law  on  Montenegrin  citizenship  as  well  as  proposing  measures  to  strengthen  the 
professionalism  and  transparency  of  the  work  of  the  State  Election  Commission  (SEC)  and 
the Anti-Corruption Agency (ACA).  

According  to  OSCE/ODIHR  LEOM  final  report,  the  2020  elections  were  run  overall 
transparently and efficiently, but the SEC did not properly fulfil its regulatory role. Important 
aspects,  such  as  verification  of  supporting  signatures  for  candidate  registration,  criteria  for 
registration of the lists with national minority status and the tabulation of results remain to be 
addressed. New SEC members representing parliamentary political parties were appointed in 
January 2021.  

Following  the  2020  parliamentary  and  local  elections  in  five  municipalities  (Andrijevica, 
Budva,  Gusinje,  Kotor  and  Tivat),  13  complaints  were  submitted,  of  which  four  were 
accepted  and  one  partially  accepted  by  the  SEC.  Completed  complaint  procedures  did  not 
reveal  violations  that  would  call  into  question  the  regularity  of  the  election  process.  The 
OSCE/ODIHR  final  report  notes  that  the  right  to  file  complaints  limited  to  violations  of 
voter’s own voting rights does not fully ensure right to an effective remedy and recommends 
extending  the  right  of  voters  to  file  complaints  on  all  aspects  of  the  electoral  process, 

9 

 
 
including  the  possibility  to  challenge  election  results.  In  2021,  local  elections  in  the 
municipalities of Niksic and Herceg Novi took place on 14 March and 9 May, respectively. 
The  electoral  campaign  for  Niksic  local  elections  was  marked  by  reports  of  foreign 
interference. 

No comprehensive audit to enhance public trust  in the voter’s registry, for example through 
conducting field tests, has been conducted. Allegations of double-registered voters in one or 
more countries of the region need to be thoroughly investigated by the competent authorities. 
In November 2020, the Constitutional Court ruled that the prescribed residential condition for 
exercising  the  right  to  vote  in  local  elections  of  ‘at  least  six  months  before  the  day  of  the 
elections’ was unconstitutional and annulled the respective provision of the Law on elections 
of MPs and councillors. 

There are no new developments in the political and judicial follow-up of the alleged misuse of 
public funds for party political purposes in 2012 on the “audio recordings affair”. Political and 
judicial  follow-up  to  the  ‘envelope  affair’  is  still  ongoing.  In  April  and  in  June  2021,  the 
Appellate court accepted the appeals of the Special State Prosecutor's Office, and revoked the 
decisions of the High Court in Podgorica to terminate criminal proceedings against an official 
from the previous ruling majority for money laundering. 

Parliament  

The  lack  of  constructive  engagement  of  all  parliamentary  actors  prevented  a  meaningful 
political dialogue, further polarising the political  landscape. The boycott of plenary sessions 
by  majority  of  MPs,  from  opposition  and  ruling  majority  caused  a  suspension  of  decision-
making  in  the  Parliament  in  2021.  The  change  of  the  ruling  coalition  transformed  the 
dynamics  between  the  executive  and  legislative  powers.  The  Parliament  enhanced 
transparency  of  its  work,  communicating  with  the  public  and  stepped  up  its  legislative  and 
oversight  role  overall.  However,  the  ruling  parliamentary  majority  frequently  initiated  or 
passed legislation through fast-track procedure, without public consultations and without duly 
taking into account EU accession requirements, which hindered EU-related reform progress, 
risking  reversing  earlier  achievements.  The  parliament  is  yet  to  demonstrate  in  practice  its 
commitment to Montenegro's EU reform agenda and engage in constructive coordination with 
the  government  on  related  legislative  initiatives.  The  parliament  should  engage  in  a 
transparent,  decisive  and  inclusive  dialogue  on  the  implementation  of  OSCE/ODIHR 
outstanding  recommendations  and  pending  judicial  appointments.  It  should  also  strengthen 
the professional and expert capacity of its administrative staff and improve women's political 
representation. 

The  27th  convocation  of  the  Parliament  was  constituted  on  23  September  2020.  Parliament 
Speaker and two Vice-Speakers from the ruling majority were elected, along with the chairs 
and  members  of  the  13  permanent  working  bodies  and  the  Committee  on  monitoring  and 
control  of  the  privatisation  process.  The  opposition  is  yet  to  nominate  its  candidate  for  a 
Deputy  Speaker.  Five  coalitions  and  four  political  parties  are  represented  in  the  new 
Parliament's composition where the ruling coalition holds a thin majority of 41/40. Out of 81 
Members of Parliament (MPs), two operate as independent MPs, while five represent ethnic 
minority parties.  

The  polarisation  between  the  new  ruling  majority  and  the  opposition  persisted  throughout 
2020  and  intensified  in  the  post-election  period.  Heated  relations  and  mistrust  fed  frequent 
escalations  and  further  exacerbation  of  political  divisions,  including  within  the  ruling 
majority.  Cross-party  negotiations  to  reach  the  necessary  qualified  majority  for  the  overdue 
appointment  of  the  new  Supreme  State  Prosecutor,  four  Judicial  Council  lay  members  and 
two judges of the Constitutional Court are yet to start. The State Election Council’s decision 

10 

 
 
not to submit a report on filling a vacant MP mandate resulted in the Parliament's unilateral 
decision to validate an MP mandate. This decision led to eight Constitutional Court initiatives 
in  January  2021  –  three  by  the  ruling  majority  and  five  by  the  opposition  as  well  as  to  the 
opposition boycotting the work of parliamentary bodies.  

As  regards  Parliament’s  legislative  role,  the  opposition  resumed  its  participation  in  the 
Parliament’s work in March, however the biggest parliamentary opposition group announced 
a  boycott  again  in  May.  Furthermore,  a  part  of  the  biggest  ruling  majority  parliamentary 
group announced a boycott of the plenary work  of the Parliament in June 2021. This  led to 
suspension of the decision-making process of the Parliament.  

The  periods  of  participation  of  all  MPs  in  the  plenary  sessions  and  working  bodies 
temporarily  improved  the  quality  of  parliamentary  debate.  In  2020,  the  Parliament  held  13 
sittings and enacted 46 laws, while in the first half of 2021, Parliament held 12 sittings and 
enacted 22 laws. A number of important legislative initiatives, such as the amendments to the 
Law on civil servants and state employees, were proposed and passed by the ruling majority 
without  adequate  consultations  with  the  government  or  ensuring  alignment  with  the  EU 
acquis,  risking  reversing  earlier  achievements,  including  on  key  rule  of  law  reforms. 
Institutional  coordination  between  the  Parliament  and  the  government  on  prioritising 
legislative initiatives pertaining to the EU reform agenda needs to be substantially improved, 
and  agreed  consultations  need  to  be  adhered  to,  regardless  of  the  origin  of  initiatives.  The 
Parliament's capacity to scrutinise proposed legislation for compliance with EU acquis is still 
limited.  

Efforts were undertaken to improve parliamentary oversight of all governance branches, but 
effective control remains at early stage. In 2020, four special sessions of the Parliament were 
dedicated to MP questions to the Prime Minister's and his Cabinet. In the first six months of 
2021,  four  question  time  sessions  were  organised.  In  2020,  159  sessions  of  parliaments 
working bodies were organised, one control hearing and 22 consultative hearings were held. 
Since  the  beginning  of  2021,  nine  control  hearings  and  eight  consultative  hearing  were 
organised by the competent parliamentary committees.  

In  2021,  the  Parliament  Speaker  enacted  an  action  plan  containing  69  measures  for 
strengthening the legislative and oversight function of the Parliament. A uniform and effective 
system  is  yet  to  be  developed  for  monitoring  the  implementation  of  conclusions  and 
recommendations  adopted  at  oversight  hearings.  The  findings  of  the  State  Audit  Institution 
(SAI)  continue  to  be  addressed  in  a  limited  manner,  and  there  is  still  no  discussion  or 
reporting on the implementation of major policies and legislation.  

The Parliament improved the level  of transparency  and communication with  the public. For 
the  first  time  all  sessions  of  the  parliamentary  working  bodies  are  broadcasted  live  on  the 
YouTube  channel  of  the  Parliament  and  the  national  public  broadcaster  RTCG  launched  a 
parliamentary  channel  dedicated  to  regular  parliamentary  work.  The  Parliament  has  re-
designed its website, adapting it for blind and partially sighted people and now provides more 
user-friendly  information  to  citizens.  Persons  with  disabilities  can  now  access  the  plenary 
hall.  By  the  end  of  December  2020,  the  new  convocation  of  the  Parliament  received  156 
citizens’ petitions, with 11 referring to legislative initiatives. Since November 2020, citizens 
can also submit petitions online through the Parliament’s website.  

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. In January 2021, the 
parliamentary  administrative  committee  revoked  the  decision  determining  the  criteria  for 
MPs’  justified  absence  from  parliament's  plenary  and  committee  sittings,  adopted  in  2020. 

11 

 
 
Provisions prescribing fines for MPs were deleted by introducing amendments to the rules of 
procedure in 2021. 

In  July  2020,  the  amendments  to  the  rulebook  on  organisation  and  systematisation  of  the 
Parliament’s  service  were  adopted,  by  the  end  of  2020  out  of  total  269  posts  in  the 
Parliament’s  service  198  were  filled.  Professional  and  expert  capacity  of  the  Parliament 
administrative  staff  should  continue  to  be  strengthened.  The  lack  of  available  space  in  the 
Parliament  for  both  service  staff  and  MPs  remains  an  issue.  In  March  2021,  the  Parliament 
elected its new Secretary General and two deputies. 

In the reporting period, the Parliament did not agree to lift any MP's immunity, although, in 
February 2021, the Special State Prosecution Office requested waiving the immunity of two 
MPs  (one  from  the  ruling  majority  and  one  from  the  opposition).  In  February  2021,  the 
Appellate  Court  annulled  the  first-instance  verdict  and  ordered  re-trial  in  the  ‘Coup  d’état’ 
case  involving  two  ruling  coalition  leaders,  including  the  chair  of  the  parliamentary 
committee  on  security  and  defence.  A  criminal  case  involving  one  ruling  coalition  MP  is 
currently ongoing in court. 

The  number  of  women  MPs  increased  slightly  from  18  to  22,  now  accounting  for  27%. 
Women’s  involvement  in  political  life  remains  limited:  there  are  no  women  among  the 
political  party  leaders  and  very  few  in  the  parties'  leadership.  Electoral  lists  satisfy  only 
minimum requirements in terms of gender equality. The amendments to the rules of procedure 
of  the  Parliament  introduced  the  obligation  to  have  at  least  one  Deputy  Speaker  elected 
among MPs of the less represented gender. Female MPs across the political spectrum formed 
the first  Women’s Club in  the Parliament in  2020 and in  December the first  female Deputy 
Parliament Speaker was elected. 

Shortcomings in the legal framework regulating political parties and their funding persist and 
the  level  of  budgetary  political  party  financing  is  still  considerably  above  the  European 
average  (EUR  7.3  million  in  2020).  The  Anti-Corruption  Agency  and  the  State  Audit 
Institution monitor political party financing with limited results.  

Governance 
In December 2020, the Parliament elected the 42nd government of Montenegro. The number 
of ministries was substantially reduced to 12; women head four of them. The new government 
composition  is  the  first  expert  government  in  Montenegro,  only  the  position  of  the  Deputy 
Prime Minister is held by a political party leader. The government adopted the proposal of the 
Law  on  budget  for  2021  and  its  annual  work  plan  at  the  end  of  March  2021,  and  it  was 
adopted  by  the  Parliament  on  17  June,  when  the  parliament  also  dismissed  the  Minister  of 
Justice and Minority Rights.   

In December 2020, the government appointed a new Chief Negotiator for EU accession who 
also  acts  as  a  National  IPA  Coordinator.  The  report  on  the  implementation  of  the  national 
programme  for  EU  accession  for  2020,  adopted  in  February  2021,  outlines  that  out  of  281 
commitments  in  the EU accession process,  121 or 43% were fulfilled. Out  of 142 laws and 
by-laws, 98 (69%) have been prepared and adopted, while out of 56 strategic documents, only 
23 (41%) were completed. The government also adopted a new National Programme for EU 
accession for the period 2021-2023. The negotiation structure was substantially weakened by 
the resignation or dismissal  of 110 of its members, including  16 chapter  negotiators and 24 
heads  of  working  groups.  Most  of  these  key  positions  remain  vacant.  Some  key  ministries 
failed  to  show  sufficient  commitment  and  constructive  engagement  in  the  EU  accession 
process  under  their  new  leadership.  The  government  has  continued  to  share  information  on 
the EU accession process in line with its public information strategy 2019-2022.  

12 

 
 
In  2020,  the  government  adopted  40  draft  laws.  In  the  first  six  months  of  2021,  the 
government  adopted  33  draft  laws.  Parliament’s  legislative  initiatives  gradually  became  the 
rule, weakening the  government’s role as a policy-maker. Public consultations organised by 
the executive continue to lack genuine and systematic inclusion of all relevant stakeholders.  

All  12  ministries  adopted  rulebooks  on  internal  organisation  and  systematisation.  The 
government  has  established  several  ad-hoc  advisory  bodies,  including  the  National  Council 
for the fight against high-level corruption, the Council for control of the voter registry and the 
Council  for  privatisation  and  capital  projects.  The  government  also  adopted  decisions  on 
establishing  Councils  for  public  administration  reform,  for  competitiveness  and  for  cyber 
security. These newly established bodies are yet to demonstrate concrete results.  

By the end of June, the government held 29 sessions and frequently resorted to the procedural 
option  of  adopting  decisions  without  holding  a  session,  including  a  decision  to  issue 
government bonds worth EUR 750 million, to appoint acting Police Director, and to establish 
a new airline company. Some steps were taken to improve cooperation with the President, but 
functional  cohabitation  and  coordination  between  the  two  branches  of  executive  power 
remains to be improved.  

In April 2020, the Parliament enacted the amendments to the Law on local self-government 
aligning  it  with  the  provisions  of  the  Law  on  protection  of  the  population  from  infectious 
diseases.  New  local  governments  were  established  in  Budva,  Kotor,  Tivat,  Andrijevica, 
Gusinje  municipalities  following  the  30  August  local  elections,  and  in  Niksic  and  Herceg 
Novi municipalities following the local elections held in the first half of 2021. New mayors 
were  elected  in  the  municipalities  of  Berane  and  Ulcinj.  Women’s  political  participation 
remains  low  at  the  local  level,  with  only  two  out  of  24  municipalities  headed  by  a  woman 
mayor. 

Civil society 

The  role  of  the  civil  society  is  recognised  and  promoted,  however  the  current  legal  and 
institutional  framework  needs  to  be  further  improved  to  strengthen  the  consultation  and 
cooperation mechanisms between state institutions and the civil society in the context of the 
EU accession process. Amendments to the Law on free access to information and a Law on 
volunteering  have  yet  to  be  adopted.  The  Council  for  Cooperation  of  State  Administration 
Bodies  and  Non-Governmental  Organisations  has  yet  to  resume  its  work,  suspended  in 
October 2020. Although State funding rules to civil society organisations are in place, not all 
ministries have launched calls to award grants to CSOs. A stronger capacity of ministries in 
strategic  planning,  monitoring  and  evaluation  of  the  support  they  provide  to  CSOs  would 
enhance the quality of the cooperation between State bodies and the civil society. 

An empowered civil society is a crucial component of any democratic system and should be 
recognised and treated as such by state institutions. 

The  overall  legal  and  institutional  framework  on  freedom  of  expression,  of  association  and 
assembly is in place. Draft amendments to the Law on Access to Information, went through a 
public  consultation  process,  but  remain  to  be  adopted.  However,  information  classified  by 
public  institutions  and  withheld  from  the  public  remains  an  issue,  in  practice  restricting  the 
access  of  civil  society  organisations  (CSOs)  and  the  public  to  key  policy  decisions.  This 
concern needs to be addressed as a matter of priority. Montenegro has not adopted a  law on 
volunteering, which would  be needed to  promote and  regulate volunteer  work in  CSOs  and 
hence increase their human resources.  

The 2018-2020 strategy for improving the environment for NGOs has expired and needs to be 
replaced by a new one.  

13 

 
 
The role of civil society in the accession process is recognised and promoted at political level. 
In 2020, most of the ministries appointed CSOs members to the working groups in charge of 
drafting  laws  and  State  strategies  in  their  respective  areas,  an  obligation  under  the  Law  on 
public  administration.  However,  not  all  ministries  conduct  public  consultations  when  draft 
laws  and  strategies  are  prepared.  When  they  do  so,  the  consultations  remain  sometimes  a 
formality, without real openness towards the views of civil society representatives. The public 
administration needs to improve the consultation mechanism with civil society.  

As  regards  the  2018  controversial  dismissals  of  prominent  NGO  representatives  from  key 
state institutions and regulatory bodies, their membership in the concerned bodies could not 
be  legally  restored,  despite  further  courts  decisions  issued  during  the  reporting  period, 
establishing that they were unlawfully dismissed. 

The  Council  for  Cooperation  of  State  Administration  Bodies  and  Non-Governmental 
Organisations,  a  body  consisting  of  an  equal  number  of  state  officials  and  CSO 
representatives, held three meetings in 2020 but stopped its activities in October 2020, further 
to  the  change  of  government.  New  government  members  of  the  Council  have  yet  to  be 
appointed. Insufficient visibility and outreach to local CSOs in more remote areas have yet to 
be addressed.  

The rules for public funding of CSOs provide for a minimum of 0.5 % of the state budget to 
be  allocated  to  civil  society.  In  2020,  this  budget  amounted  to  EUR  4.3  million,  while  the 
allocation  for  2021  is  EUR  4.6  million.  Montenegro’s  legislation  requires  all  ministries  to 
conduct consultations with CSOs on their annual funding priorities, to publish open calls and 
to award grants through a selection process involving external evaluators. However, in 2020 
not all ministries have launched calls to award grants to CSOs, despite their legal obligation to 
do so. A new call for the selection of external evaluators was held to address concerns on the 
impartiality of the previous evaluators. The capacity of ministries to monitor and evaluate the 
projects implemented by CSOs remains to be strengthened.  

CSOs  can  also  access  funds  at  local  level,  according  to  the  law  on  local  self-governments. 
However, the transparency of procedures still needs to be improved.  

2.1.2. Public Administration Reform 

Montenegro  is  moderately  prepared  on  the  reform  of  its  public  administration.  Overall, 
limited progress was made in the reporting period. Some progress was made in areas such as 
medium-term policy planning, electronic government and public finance management as well 
as  budget  transparency.  Public  consultations  were  held  on  draft  amendments  to  the  Law  on 
Access  to  Information,  which,  together  with  the  new  Public  Administration  Reform  and 
Public Financial Management strategies, remain to  be  adopted.  Amendments  to  the  Law on 
Civil  Servants  and  State  Employees,  adopted  in  January  2021  at  the  initiative  of  the 
Parliament, 
the  requirements  for  merit-based  recruitment,  competence  and 
independence  of  civil  servants.  The  impact  of  their  practical  implementation  remains  to  be 
seen.  Reorganisation  of  public  administration  led  to  substantial  staff  changes,  losing 
experienced staff in  EU  accession process  related matters. Strong political  will is  needed to 
effectively  address  depoliticisation  of  the  public  service,  optimisation  of  the  state 
administration  and  effective  implementation  of  managerial  accountability.  Most  of  the 
recommendations from 2020 remain valid. The future approach to optimisation of the public 
administration  remains  to  be  defined  by  the  government.  In  the  coming  year,  Montenegro 
should in particular: 

lowered 

  finalise, adopt and start implementing the new Public Administration Reform and Public 
Financial Management strategies in line with the national guidance for strategic planning 

14 

 
 
and its linkage with the mid-term budgetary framework; 

  improve  citizens’  access  to  public  information  by  finalising,  adopting  and  start 
implementing amendments to the Law on access to information in line with the SIGMA 
principles of public administration;  

  ensure  effective  lines  of  accountability  between  and  within  the  institutions;  ensure 
recruitments  to  all  positions  in  the  public  administration  according  to  the  principles  of 
merit, competence and transparency. 

Strategic framework for public administration reform  

A new  Public Administration Reform (PAR)  Strategy 2022-2026 has  yet  to  be finalised, 
pending consultations of all relevant stakeholders, and adopted. The new strategy is expected 
to improve the quality and efficiency of service delivery as well as optimisation of the public 
sector. In April 2021, the composition of the PAR Council was modified aiming to strengthen 
political support to PAR. Representatives of civil society and academia became members of 
the  Council,  and  the  Prime  Minister  took  over  the  presiding  role.  With  regard  to  financial 
sustainability, the reforms currently remain dependent on external donor funding. Legislative 
amendments  in  the  PAR  area  were  initiated  and  adopted  by  the  Parliament  without  prior 
involvement of the competent ministry.   

The  organisational  set-up  of  the  state  administration  has  not  been  fully  aligned  with  the 
Law on State Administration.  The reorganisation  of the state administration conducted after 
the 2020 elections was made without sufficient ex-ante analysis or strategic approach.  

The overall quality of strategic documents produced over the reporting period has improved, 
and  the  documents  are  largely  aligned  with  the  standards  set  down  in  the  decree  and 
methodology on strategic planning.  

Public financial management 

Despite  initial  delays,  the  pace  of  implementation  of  the  Public  Financial  Management 
(PFM) reform programme (2016-2020)  has  gradually increased. Good progress  was made 
on  the  adoption  of  programme-based  and  gender  sensitive  budgeting,  including  the  first 
elements  of  performance  budgeting,  as  well  as  the  gradual  introduction  of  a  mid-term 
budgetary  framework.  The  adoption  of  several  decrees  in  the  last  quarter  of  2020  and  the 
adoption  of  amendments  to  the  Law  on  budget  and  fiscal  responsibility  in  June  2021 
supported these reforms. Additional  legislative changes are needed to  complete the ongoing 
reforms,  including  the  establishment  of  a  fiscal  council  and  the  adoption  of  accrual 
accounting. 

The  establishment  of  a  new  budget  planner  and  a  centralised  system  for  the  calculation  of 
earnings  substantially  improved  the  state  budget  electronic  system.  New  systems  for  e-
procurement, excise and e-fiscalisation are operational since January 2021.  

Challenges  remain  with  regard  to  capital  budgeting,  debt  management,  commitment  and 
assets  management,  as  well  as  with  regard  to  interoperability  of  the  different  IT  systems  in 
place. Furthermore, the alignment between strategic plans and mid-term budgetary framework 
is still to be substantially improved. The implementation of the public sector accounting law 
in 2022 remains uncertain due to delays in the adoption of the necessary secondary legislation 
and  upgrading  of  the  accounting  IT  system.  A  Public  Investment  Management  Assessment 
(PIMA) was carried out in June 2021. 

The  implementation  of  the  action  plan  of  the  PFM  reform  programme  2016-2020  has  been 
extended to 2021. Based on the results of the evaluation of the current programme, as well as 

15 

 
 
the  recommendations  of  the  Public  Expenditure  and  Financial  Accountability  (PEFA)  and 
PIMA, a new PFM strategy 2022-2026 has  yet to be finalised, pending consultations of all 
relevant  stakeholders,  and  adopted.  On  budget  transparency,  some  progress  was  achieved 
through the adoption of  a new programme budget  classification, with  programme  goals  and 
performance  indicators  for  the  2021  state  budget.  However,  the  execution,  monitoring  and 
reporting  framework  is  still  lacking,  due  to  technical  incompatibility  between  the  budget 
planner,  the  treasury  and  accounting  IT  systems.  The  civil  society  is  not  systematically 
involved in monitoring the implementation of the PFM reform programme. New templates for 
in-year and annual budget execution reports remain to be adopted and implemented. 

Public service and human resources management 

In  January  2021,  the  Law  on  Civil  Servants  and  State  Employees  was  amended  at  the 
initiative  of  the  Parliament.  The  key  amendments  relate  to  lower  qualification  requirements 
for recruitment  of senior management staff, possibility to  dismiss the heads of the authority 
for  any  irregularity  in  their  annual  reports  and  appointment  of  acting  heads  in  public 
administration. 

As a result of the reorganisations of the state administration referred to above, 65% of senior 
management staff at central level were dismissed (91 employees) or resigned (42 employees). 
Among them, 110 employees were members of the key EU-accession negotiation structure. In 
addition, major changes in management staff in schools and hospitals took place.  

Implementation  of  the  2018-2020  Public  Administration  Optimisation  Plan  ended  in 
December 2020. In 2020, there was a significant increase in number of employees at central 
and local level. 

Accountability of administration 

Following  various  public  consultations,  conducted  in  inclusive  and  transparent  manner, 
amendments to the Law on Access to Information have yet to be finalised and adopted.  The 
number of appeals against decisions of public sector institutions on requests for information 
remains excessively high for a country with the size of Montenegro (4,328 in 2020). 76% of 
appeals  were successful. Approximately one third of the successful  appeals  (1,002 in 2020) 
are because of silence of administration in the first instance bodies.  

The basic accountability mechanisms between the ministries and the subordinate authorities 
are  not  functioning  consistently.  Only  selected  authorities  submit  their  annual  plans  and 
reports  for  formal  approval  to  the  relevant  ministry.  The  plans  and  reports  of  subordinate 
authorities do not stipulate objectives and measurable outcome-level targets nor performance 
information.  

Service delivery to citizens and businesses 

The  Ministry  of  Public  Administration,  Digitalisation  and  Media  established  the  register  of 
state  bodies  and  institutions  and  made  it  publicly  available  to  the  citizens.  The  register  was 
also adapted for the use of persons with disabilities.  

In  line  with  the  Law  on  electronic  government,  sub-legislative  acts  were  adopted  and  the 
Council for electronic government was established. In accordance with  amendments to the 
law  on  electronic  identification  and  electronic  signature,  a  number  of  rulebooks  were 
adopted. A register of providers of electronic services was established, and it is possible to use 
electronic  signatures  in  transactions,  free  of  charge  for  citizens  and  at  lower  price  for 
businesses.  

16 

 
 
The  progress  in  public  service  delivery  has  been  slow.  Service,  including  digital  service, 
provision is largely ineffective, and not user-friendly. Meanwhile, the process of establishing 
a company was re-designed, rendering it smoother and less costly.  

The  administrative  procedures  supporting  the  delivery  of  public  services  remain  below 
expectations. Data interoperability and sharing data across public and private institutions, as 
well as the use of the established interconnection platform (Government Service Bus) is still 
limited.  The  implementation  of  the  Law  on  identity  card  started  in  June  2020.  The  new 
electronic identity cards issued to Montenegrin citizens allow for electronic identification and 
signature.  

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 effective fight against corruption are 
of paramount importance, as is respect for fundamental rights in law and in practice. 

Montenegro  remains  moderately  prepared  to  apply  the  EU  acquis  and  the  European 
standards in this area and has made limited progress overall. Limited progress was made in 
the area of the judiciary, with stagnating implementation of key judicial reforms and a limited 
track  record  on  accountability.  Despite  a  more  proactive  approach  of  the  Anti-Corruption 
Agency,  corruption  remains  prevalent  in  many  areas  and  still  an  issue  of  concern.  On 
fundamental  rights,  Montenegro  continued  meeting  obligations  from  international  human 
rights  instruments  and  legislation;  however,  challenges  remain  in  ensuring  the  effective 
implementation of national legislation on human rights. There was limited progress in the area 
of  freedom  of  expression.  Nevertheless,  the  technical  and  administrative  work  visibly 
intensified  after  the  long  over  due  appointments  of  new  negotiating  structures  had  been 
finalised in June 2021.  

Functioning of the judiciary 

Montenegro’s  judicial  system  is  moderately  prepared,  with  no  progress  overall.  The 
implementation  of  key  judicial  reforms  is  stagnating.  The  decisive  political  commitment 
needed to unblock important segments of those reforms is still outstanding, with a number of 
appointments  to  the  judiciary  remaining  pending  in  Parliament  due  to  inability  to  secure 
qualified  majority.  Concerns  remain  over  the  institutional  performance  of  the  Judicial  and 
Prosecutorial Councils. Reform results, in particular the track record on judicial accountability 
remain  limited.  Independence  and  professionalism  of  the  judiciary  need  to  be  further 
strengthened.  Montenegro  continues  to  make  efforts  on  efficiency  of  judiciary,  in  particular 
towards the development and promotion of alternative dispute settlement. However, human, 
financial and infrastructure management has still not improved. The timely implementation of 
the  new  ICT  justice  development  programme  has  become  uncertain  due  to  organisational 
changes in the Ministry of Justice, Human and Minority Rights.  

Last  year’s  recommendations have not  been met and remain largely valid. Therefore, in  the 
coming year, Montenegro should in particular:  

  ensure the effective independence and professionalism  of the judiciary by addressing all 
the  remaining  recommendations  of  the  Venice  Commission  on  the  Law  on  State 
Prosecution  Service,  and 
relevant 
fully  and  unambiguously 
constitutional  and legal  framework, in  line with  the Venice Commission  and Council of 

implementing 

the 

17 

 
 
 
Europe Group of States against Corruption (GRECO) recommendations;  

  review the disciplinary and ethical framework for judges and prosecutors to strengthen its 
objectivity, proportionality and effectiveness, and ensure its effective implementation;  
  adopt  a  new  strategy  for  rationalisation  of  the  judicial  network  laying  down  the  next 

concrete steps leading to closure of unviable small courts. 

Strategic documents 

No  tangible  results  can  be  reported  so  far  on  the  implementation  of  the  2019-2022  judicial 
reform strategy. The efforts to monitor the implementation of the Strategy need to intensify. 
The adoption of a new action plan for the period 2021-2022 is pending.  

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,  as  identified  by  the 
GRECO,  outstanding  issues  remain  with  regard  to  strengthening  the  Judicial  Council’s 
independence against undue political influence, for instance due to the ex-officio participation 
of the Minister of Justice.  

Moreover,  the  May  2021  amendments  to  the  Law  on  the  State  Prosecution  Service,  which 
entered  into  force  in  June  2021,  failed  to  fully  address  the  Venice  Commission’s 
recommendations  concerning  risks  of  politicisation  of  the  Prosecutorial  Council.  In  the 
process  of  preparation  of  the  amendments,  the  Government  twice  requested  the  Venice 
Commission’s  opinion.  Initially,  the  initiative  was  presented  by  the  ruling  coalition  MPs, 
together  with  an  initiative  to  dismantle  the  current  Special  Prosecutor’s  Office  (SPO)  and 
replace  it  with  a  new  State  Prosecutor’s  Office  for  Organised  Crime  and  Corruption.  In  its 
March  2021  opinion,  the  Venice  Commission  acknowledged  the  public  demand  for  reform 
but  critically  assessed  the  proposals.  The  plans  concerning  the  SPO  were  subsequently 
abandoned.  Revised  amendments  to  the  Law  on  State  Prosecutor’s  Service  were  prepared 
following limited informal consultations including two round tables with active involvement 
of  political  parties,  academia  and  NGOs.  In  its  May  2021  urgent  follow-up  opinion,  the 
Venice Commission welcomed the proposals aiming to mitigate the risk of politicisation and 
of conflict of interest within the Prosecutorial Council through new ineligibility criteria for its 
members and by stipulating that the one additional lay member would be nominated by NGOs 
and endorsed by the Parliament. These positive  elements,  however, did  not  justify the early 
termination  of  mandate  of  all  members  of  the  Council  with  the  entry  into  force  of  the  May 
2021 amendments (their mandate would regularly terminate in January 2022), which is not in 
line  with  the  Venice  Commission  recommendations  and  raises  concerns  as  regards  judicial 
independence. This is even more problematic since the new lay members continue to be voted 
in by a simple majority in Parliament – an issue on which the Venice Commission had already 
provided recommendations in 2014 and 2015 respectively and which remains to be addressed. 
It  is  essential  for  Montenegro  to  address  these  issues  in  order  to  avoid  reversing  the  earlier 
achievements  in  the area of justice reform.  Additional guarantees need to be put in place to 
mitigate  the  risks  undue  political  influence  over  Prosecutorial  Council  that  results  from  the 
election  by  simple  Parliamentary  majority  of  its  five  lay  members.  One  specific  solution 
proposed by the Venice Commission was for one of the five lay members to be appointed by 
the academic and by the legal community (the Bar), in addition to the member nominated by 
NGOs. A request for review of constitutionality of the May 2021 amendments, lodged by the 
Prosecutorial Council in June 2021, is pending before the Constitutional Court.  

18 

 
 
 
After entry into force of the May 2021 amendments to the Law on State Prosecution Service, 
the procedure for appointment of a new Prosecutorial Council was launched in June 2021. In 
August  2021,  the  Speaker  of  Parliament  proclaimed  a  new  Prosecutorial  Council  that 
functions  in  incomplete  composition  until  the  appointment  of  the  five  lays  members  that  is 
pending in Parliament. Broad political consensus on these pending appointments will be key 
to prevent politicisation of the Council and undue political influence over it.  

After the expiry of the mandate of the previous composition of the Judicial Council in 2018, 
the  temporary  anti-deadlock  mechanism,  introduced  in  2018  continues  to  apply  for  a  third 
year already due to  inability to  secure qualified  majority in  Parliament for election of the  4 
non-judicial members. Following earlier resignations of two judicial members of the Council, 
two new members were elected in February 2021. After the resignation of the President of the 
Judicial  Council  in  2019,  the  President  of  the  Supreme  Court  in  December  2020  and  the 
dismissal  of  the  Minister  of  Justice,  Human  and  Minority  Rights  in  June  2021,  the  Council 
continues  operating  in  incomplete  composition.  This  undermines  its  capacity  to  exercise 
certain of its important competencies and all possible steps need to be taken for the Council to 
fully resume its functions.  

The operational capacity of both Councils secretariats continues to improve, but needs to be 
further strengthened. The 2021 budget of the Judicial Council was reduced by 16% compared 
to the previous year to EUR 1.38 million and the budget of the Prosecutorial Council by 30% 
to  EUR  469,000.  Both  Councils  still  need  to  assume  budgetary  and  financial  management 
functions.  The  process  of  gradually  transferring  budgetary  planning  and  execution  to  courts 
and prosecution offices is still at an early stage. The Ministry of Finance is yet to recognise 
courts  and  prosecution  offices  as  budgetary  units.  In  September  2020,  the  State  Audit 
Institution  (SAI)  issued  a  negative  opinion  on  the  regularity  of  operations  of  the  Judicial 
Council  for  2019  and  a  conditioned  opinion  on  the  financial  audit  with  regard  to  the 
judiciary’s annual report.  

The  two  Councils  still  need  to  step  up  efforts  to  improve  the  transparency  of  their  work, 
including by publishing fully reasoned decisions on promotions, appointment and disciplinary 
cases.  Transparency  improved  slightly  in  the  case  of  the  Judicial  Council,  while  it  has 
decreased  in  the  case  of  the  Prosecutorial  Council.  The  Prosecutorial  Council  needs  to 
demonstrate  a  more  proactive  approach  in  addressing  issues  within  the  prosecutors' 
organisation,  including  with  respect  to  professional  performance  of  the  heads  of  state 
prosecutor's offices and state prosecutors, their accountability, and to protect the reputation of 
the  prosecutorial  profession.  The  allegations  of  politically  motivated  actions  by  the  SPO 
require credible, independent, transparent and effective institutional response. 

Independence and impartiality 

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 on state-
sponsored  apartments  or  loans  under  favourable  conditions  granted  by  the  previous 
governments  to  members  of  the  judiciary  and  prosecution,  including  senior  ones  and  those 
dealing with politically sensitive cases, continue to raise concerns.   

Out  of  the  seven  court  presidents  re-appointed  for  at  least  a  third  term  between  2019  and 
2020,  the  President  of  the  Supreme  Court  and  three  basic  court  presidents  resigned  in 
December 2020 and January 2021.  Four more basic court presidents serving  at  least  a third 
term remain in office. Three public calls for the election of a new President of the Supreme 
Court were unsuccessful. One basic court president was elected in early 2021; the procedure 
for election of further two basic court presidents is pending. In June 2021, following the entry 
into  force  of  the  amendments  to  the  law  on  State  Prosecution  Service,  the  Parliament 

19 

 
 
suspended  the  ongoing  procedure  for  selection  of  the  Supreme  State  Prosecutor  and  the 
Prosecutorial  Council  published  a  new  public  call  for  candidates.  In  the  same  month,  the 
Prosecutorial Council appointed a new acting Supreme State Prosecutor after the previous one 
retired.  After  cancelling  the  vacancy  announcements  for  11  heads  of  prosecution  offices, 
initiated  in  2019,  the  Prosecutorial  Council  published  a  new  call  in  January  2021.  The 
selection procedure was completed for 10 heads of prosecution offices, while the appointment 
of the head of basic prosecution office in Podgorica was suspended after the amendments to 
the  Law  on  State  Prosecution  Service  entered  into  force.  In  December  2020,  the 
Constitutional  Court  elected  its  new  President  for  a  three-year  mandate.  Following  the 
retirement of two judges in January 2021, the Court operates in incomplete composition with 
5  out  of  7  judges.  The  procedure  for  the  election  of  the  two  Constitutional  Court  judges  is 
pending before the Parliament where qualified majority is required. 

The  random  allocation  of  cases  is  foreseen  by  the  Law  on  courts,  and  implemented 
automatically  through  the  judicial  information  system  PRIS.  However,  limitations  in  very 
small  courts  remain,  while  PRIS  has  not  been  introduced  in  the  misdemeanour  courts.  In 
2020, 1 274 cases were delegated among the courts, including 746 cases delegated at the level 
of basis courts and 528 cases delegated between the two high courts. In the absence of clear 
criteria, the practice of reallocating large numbers of cases between courts to reduce backlogs 
undermines the right to a lawful judge.  

In  July  2020,  the  Parliament  enacted  amendments  to  the  Law  on  courts  and  to  the  Law  on 
State Prosecution Service, harmonising both laws with the 2018 Law on judicial cooperation 
in criminal matters. No presidential pardons were granted in 2020 (compared to one in 2019).  

Accountability 

The promotion and enforcement of ethics and standards of professional  behaviour of judges 
and prosecutors is hampered by limited track records and lack of proactivity by both Councils. 
In  2020,  disciplinary  proceedings  were  launched  in  four  cases.  In  one  case,  the  disciplinary 
liability of a judge was established and a fine of 20% salary reduction  for three months was 
imposed. One initiative was dismissed, and one rejected. In the first half of 2021, two further 
proceedings  were  opened.  In  one  case,  disciplinary  liability  of  a  judge  was  established 
resulting in a sanction of 4-monthly 40% salary reduction. In April 2021, the Judicial Council 
temporarily suspended a basic court judge due to pending criminal proceedings on suspicion 
of issuing illegal court decisions. In 2020, one disciplinary proceedings was initiated against a 
public prosecutor and one further proceedings in early 2021. In one of these cases disciplinary 
liability was established  and sanctioned by a fine.  In 2020, there were 13 reports of alleged 
violations  of  the  code  of  ethics  for  judges  and  further  15  by  June  2021.  Of  the  eight  cases 
completed in 2020, in one case, a violation was established by the ethical commission, while 
no  such  violation  was  found  in  the  four  cases  completed  by  mid-2021.  Two  cases  were 
referred  to  disciplinary  prosecutor.  During  2020,  five  initiatives  of  alleged  violations  of  the 
code of ethics of public prosecutors were examined and further three in 2021. Violations were 
found in two cases.   

The  system  for  detecting  breaches  of  integrity  rules  needs  to  be  made  more  effective, 
objective,  consistent  and  proportionate  and  ensure  due  follow-up  of  all  cases  that  give 
grounds  for  disciplinary  or  ethical  responsibility.  A  legal  remedy  against  decisions  of  the 
ethical commissions of both Councils has  yet to be introduced by the law. The decisions of 
the Prosecutorial and Judicial Councils remain insufficiently motivated and case-law is yet to 
be developed.  

In  2020  and  early  2021,  judicial  inspections  were  conducted  in  accordance  with  the  annual 
plans and irregularities were found in one misdemeanour court, three public bailiffs’ offices 

20 

 
 
and two notaries’ offices. No irregularities were found in prosecution offices. The Ministry’s 
capacity in this area needs to be enhanced. While two new inspectors were hired in 2020, due 
to  retirements,  only  one  judicial  inspector  out  of  four  foreseen,  and  the  chief  judicial 
inspector, were employed in June 2021 in the respective department of the Ministry of Justice 
and Human and Minority Rights.  

New  code  of  ethics  for  notaries  and  the  code  of  ethics  of  court  interpreters  and  translators 
were  developed  and  adopted.  The  self-regulatory  roles  of  the  chambers  and  professional 
associations of legal professions must be further enhanced.  

Professionalism and competence 

Montenegro  organises  single  nationwide  competitions  for  judges  and  prosecutors.  In 
December  2020,  the  Administrative  Court  annulled  the  2019  decision  on  selection  of 
candidates  for  basic  court  judges  due  to  procedural  irregularities.  The  repeated  selection 
procedure was finalised in  March 2021. Further  efforts are required to  address  in  a credible 
manner these types of challenges. In 2020, two judges were promoted to higher-level judicial 
positions,  while  four  judges  were  voluntarily  reassigned.  As  example  of  good  practice,  the 
Judicial  Council  has  started  publishing  the  names  of  candidates  who  apply  for  the  judicial 
positions. In January 2021, four state prosecutors were promoted to a higher state prosecutor's 
office,  while  one  state  prosecutor  was  permanently  voluntarily  reassigned  to  another  basic 
state prosecutor's office. 

In 2020, 23 judges were evaluated, 15 under the regular evaluation procedure (compared to 55 
in 2019). Following the resignation of the Supreme Court President, the Judicial Council has 
not  yet  started  with  the  process  of  evaluation  of  judges  for  2021.  According  to  its 
interpretation  of  the  law,  the  assessment  cannot  be  performed  until  a  new  President  of  the 
Supreme  Court  is  elected  who  should  chair  the  respective  commission.  This  narrow 
interpretation  prevents  adequate  and  timely  promotion  of  judges  and  the  election  of  courts’ 
presidents.  In  2020,  no  public  prosecutors  were  evaluated  under  the  regular  evaluation 
procedure, while two prosecutors were evaluated for the purpose of promotion and  seven  at 
the  end  of  their  four-year  mandates.  Until  June  2021,  one  special  prosecutor  was  evaluated 
under the regular procedure and three state prosecutors after two years in office. Professional 
evaluation  of  prosecutors  needs  to  be  more  thorough,  objective,  and  in  line  with  the 
assessment  criteria  revised  in  2017.  Any  revision  of  the  existing  rules  and  criteria  for 
evaluation of judges and prosecutors should not depart from the established principles.  

The  interpretation  of  legal  conditions  for  old-age  retirement  of  judges  and  prosecutors  is 
disputed after the 2020 Law on  pensions insurance lowered the general  age requirement for 
acquiring the right to pension, deviating from provisions in the general labour law. Both the 
Judicial and the Prosecutorial Councils consider that the new Law on pensions does not apply 
to  them  and  the  Judicial  Council’s  request  for  review  of  constitutionality  of  the  Law  on 
pensions is pending before the Constitutional Court.   

In  May  2021,  the  Bar  Association  of  Montenegro  declared  a  complete  general  strike  of 
lawyers, due to their objection to the implementation of the Law on fiscalisation. The strike 
lasted  until  end  of  July,  and  led  to  postponement  of  hearings  in  all  courts  and  seriously 
affected  a  number  of  proceedings,  including  urgent  ones.  The  disciplinary  panel  of  the  Bar 
Association  initiated  proceedings  against  one  lawyer  who  broke  the  strike  to  represent  a 
person deprived of liberty.  

Quality of justice 

In 2021, the Judicial Training Centre (JTC) was allocated a budget of EUR 419,999, 30% less 
than in 2020 and below the statutory minimum. While the centre continued to be financially 

21 

 
 
supported  by  the  EU  and  other  international  donors,  its  autonomous  and  self-sustainable 
functioning will need to be ensured. The functioning and staffing levels continued to improve. 
The  centre  has  gradually  adapted  to  the  epidemiological  situation  and  moved  its  training 
activities  online.  Its  administrative,  managerial,  strategic  planning,  communication  and 
financial  management  capacities  need  to  improve  further.  Its  regular  cooperation  and 
communication with the Judicial and Prosecutorial Councils is yet to be established. The role 
of  the  Centre’s  Programming  Council  has  improved,  but  its  current  approach  to  annual 
training  programming  needs  to  be  replaced  by  a  comprehensive  training  needs  assessment, 
which should adequately cover also the judicial values and skills. The Centre  participates in 
the  activities  offered  by  the  European  Judicial  Training  Network  (EJTN)  as  an  observer.  In 
2020 and by mid-2021, 37 members of the judiciary and the Centre’s secretariat participated 
in EJTN activities.  

Full  implementation  of  instructions  for  collecting  statistical  data  in  compliance  with  the 
guidelines  of  the  European  Commission  for  the  Efficiency  of  Justice  (CEPEJ)  remains  a 
challenge. Issues also remained regarding the reliability and availability of statistical data for 
the judiciary in the absence of an advanced case management system. Data on the total length 
of proceedings is still not available. Statistical information on the performance of the judicial 
system is not systematically analysed, nor used for management and policy-making purposes. 

In  October  2020,  the  ICT  justice  development  programme  for  the  period  2021-2023  was 
adopted.  Although  the  Ministry  of  Justice  and  Human  and  Minority  Rights  is  a  key 
institutional  actor  for  the  implementation,  the  Ministry’s  reorganisation  in  early  2021, 
downgrading the organisational status of the Directorate for ICT Justice and Data Security to 
a service for judicial ICT raised concerns with respect to allocation of sufficient capacities for 
the implementation. A new act on reorganisation is under preparation that should restore the 
status of the ICT directorate. In 2020, the Ministry of Justice developed a centralized judicial 
web-portal  integrating  portals  of  judicial  and  prosecutorial  institutions  to  a  single  unit.  The 
ICT  sub-system  for  courts  is  expected  to  be  fully  operational  by  the  end  of  2022.  Until  the 
new system is 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 
has  security  loopholes  and  does  not  operate  consistently.  Software  module  for  electronic 
archiving in judicial institutions has been developed and tested. In October 2020, the Judicial 
Training  Centre  started  developing  its  integral  information  system  as  online  portal  for 
registered users, which should include a platform for e-learning.  

The budget for judiciary for 2021 is EUR 36.5 million (2020: EUR 39.1 million) and remains 
above the regional per capita average. Montenegro has 50 judges (60% of whom are women) 
and  19  prosecutors  (over  62%  of  whom  are  women)  per  100,000  inhabitants,  far  above  the 
European average of 21 judges and 12 prosecutors, as well as 2.6 times as many judicial staff 
per  inhabitants  as  the  European  average.  Collection  of  court  fees  remains  much  lower 
compared to the region. 

The  positive  trend  in  alternative  dispute  resolution  continued.  The  implementation  of  the 
new law, which provides inter alia for compulsory recourse to alternative dispute resolution 
for certain types of cases, started in August 2020. All relevant bylaws were adopted and the 
Centre  for  Mediation  was  transformed  into  a  Centre  for  Alternative  Dispute  Resolution 
(ADR). The number of cases referred to the Centre for ADR has significantly increased, both 
by  courts  and  by  citizens.  In  2020,  3  567  cases  were  referred  to  the  Centre  for  Mediation 
(2019:917 cases), and 1 269 cases were settled through mediation (2019:403 cases). By mid-
2021, the number of cases referred to the Centre for ADR (3,744), both by courts and parties 
already  exceed  the  total  number  for  2020  During  the  same  period,  618  cases  were  solved. 

22 

 
 
Further 2,819 cases  (2019:  2,743) were submitted to  the Agency for Peaceful Settlement  of 
Labour Disputes in 2020, 1,663 of which were resolved (2019: 1,258. 

Efficiency 

In 2020, 118 913 cases were pending before Montenegrin courts, including 80 723 new cases; 
83 206 cases  were resolved. Montenegro  continued to  take concrete measures to  reduce the 
backlog of old cases, which were given priority status. In 2020, 5 896 cases older than three 
years have been resolved, while at the end of the year there were still 3 036 cases older than 
three  years  pending  before  Montenegrin  courts.  The  disposition  time,  i.e.  the  average  time 
from  filing  to  decision,  was  150  days  in  basis  court  cases  (2019:  143  days)  and  147  for 
commercial cases (2019:116 days). The disposition time before the Administrative Court (438 
days) remains the cause for concern. 

As regards the enforcement, 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 1 
600 by the end of 2020. In 2020, 66 402 cases were filed to bailiffs' offices (2019: 61 127) 
with  42,283  cases  pending  at  the  end  the  year  (2019:40  019).  The  centralised  case 
management  system  for  bailiffs  continues  to  be  used  consistently,  guaranteeing  data 
reliability. The enforcement of court decisions remains a challenge. 

In  October  2020,  the  Ministry  of  Justice  published  an  analysis  on  the  needs  of  the 
rationalization of the judicial network, which recommended the merge of the smallest courts 
to  larger  courts  close  to  their  current  territorial  jurisdiction.  The  analysis  should  serve  as  a 
basis for preparation of a new strategy for rationalisation of the judicial network. However, no 
concrete steps have been taken in this respect during the reporting period. 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  

Montenegro  continued  to  implement  the  war  crime  prosecution  strategy,  but  with  limited 
results.  The  2019  conviction  of  one  defendant  for  crimes  against  civilian  population  in 
Kosovo  became  final  in  2020.  There  are  currently  five  cases  in  the  preliminary  phase  of 
investigation concerning war crimes committed on the territories of Bosnia and Herzegovina, 
and of Croatia. One new investigation was opened in 2021, while one was closed for lack of 
grounds for prosecution. In November 2020, the co-operation with the International Residual 
Mechanism  for  Criminal  Tribunals  (IRMCT)  resulted  in  the  handover  of  a  file  concerning 
individuals believed to be Montenegrin nationals who are suspected of serious war crimes. On 
the basis of this file, the Special Prosecutor’s Office opened a preliminary investigation in one 
case,  formed  a  special  investigative  team  and  undertook  activities  to  identify  the  potential 
suspects  and  to  request  mutual  legal  assistance  from  the  prosecution  service  of  Bosnia  and 
Herzegovina.  SPO  revised  one  of  the  finally  adjudicated  war  crimes  cases  and  contacted 
IRMCT  and  the  family  of  the  victims  with  the  aim  to  obtain  new  information  or  evidence. 
Montenegro  ensures  good  cooperation  with  the  neighbouring  countries  and  the  IRMCT.  In 
2020, the SPO acted upon 11 letters rogatory from Bosnia and Herzegovina, Serbia, Croatia 
and the Kosovo Specialist Chambers and upon further nine in the first half of 2021. 

 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. 

23 

 
 
                                                           
Investigation  and  adjudication  of  war  crimes  cases  faces  legal  and  practical  obstacles, 
including  with  respect  to  specific  evidentiary  requirements  of  war  crimes  trials,  witness 
protection  and  insufficient  capacities  within  the  prosecution  and  the  judiciary.  Montenegro 
needs to further steps up its efforts as a matter of priority to fight impunity for war crimes, to 
address  the  legal  and  practical  obstacles  and  to  demonstrate  a  more  proactive  approach  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 not been brought so far.  

During  2020  and  first  half  of  2021,  52  claims  for  compensation  were  pending  before  the 
courts, all concerning the "Morinj" case. Of those, 41 were fully or partially upheld, awarding 
the total non-pecuniary damage of EUR 230 700. In 16 out of 41 cases, the judgments became 
final. Proceeding are ongoing in remaining 13 cases. All these claims are treated as priority by 
the courts. Compensation can only be awarded in cases where a criminal conviction for war 
crimes has become final.  

In February 2021, Berane Municipal Council rejected an initiative to name a street after the 
former commander of the Army of Republika Srpska, convicted for war crimes. In June 2021, 
Parliament  supported  the  motion  of  the  Prime  Minister  to  dismiss  the  Minister  of  Justice, 
Human  and  Minority  Rights  after  he  failed  to  agree  to  established  facts  about  the  crime  of 
genocide being committed in Srebrenica. On the same day, Parliament adopted a resolution on 
genocide in Srebrenica.  

Fight against corruption 

Montenegro has achieved some level of preparation. Limited progress was achieved, with 
last  year’s  recommendations  partially  met  through  further  results  on  track  records  on 
repression and prevention of corruption and the Anti-Corruption Agency’s efforts to address 
its challenges. The track record on seizure and confiscation of assets and final court decisions 
in corruption cases needs to be further improved. The Anti-Corruption Agency (ACA) under 
the  new  management  demonstrated  a  more  proactive  approach,  especially  with  regard  to 
stepping up its communication and outreach activities towards the general public, media and 
civil society and addressing the remaining caseload from previous years. Despite this positive 
trend,  challenges  related  to  the  Agency’s  independence,  priority-setting,  selective  approach 
and quality of its decisions remain and require sustained efforts in this respect. 

In the coming year Montenegro should in particular: 

  review the legal  framework in  the area of prevention of corruption to  address  the issues 
identified through its application, in order to strengthen the track record on prevention of 
corruption and the Agency’s performance in this respect;  

  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  

24 

 
 
 
The  track  record  of  investigations,  prosecutions  and  final  convictions  in  cases  of  high-level 
corruption increased but remains to be further consolidated. 

In  2020,  Special  Public  Prosecutor's  Office  (SPO)  opened  investigations  into  criminal 
offences of high-level corruption in eight cases against 35 persons and 8 legal entities (2019: 
six  cases  against  15  individuals  and  one  legal  entity).  In  the  first  half  of  2021,  eight 
investigations against 28 individuals and seven legal entities were opened. Further high-level 
corruption cases are in the phase of preliminary investigation. The investigated cases concern 
inter alia privatisation, fraud in relation to investment and development loans, tax fraud and 
misappropriation  of  coastal  land.  Suspected  individuals  include  former  ministers  (one 
currently serving as MP and another one as ambassador), high-level public officials, majority 
owner of a commercial bank and the bank’s CEO, a judge and director of a public company. 
Three  indictments  (2019:  5)  were  lodged  for  the  criminal  offence  of  high-level  corruption 
against 18 persons and three legal entities in 2020, and further two indictments against eight 
individuals  and  one  legal  entity  in  the  first  half  of  2021.  The  financial  investigations  have 
been  launched  in  four  cases  against  nine  persons  in  2020  and  in  four  cases  by  mid-2021 
against  30  individuals  and  two  legal  entities  (2019:  4  cases  against  29  persons).  In  the 
‘envelope  affair’,  the  High  Court  initially  accepted  the  part  of  the  indictment  against  the 
businessman involved in the case and five other persons for creating a criminal organisation 
engaged in money laundering. The indictment against the former Mayor of Podgorica and the 
adviser  to  the  President  of  Montenegro  in  the  same  case  was  subsequently  confirmed  upon 
appeal by the prosecution. Three final and enforceable judgements (2019: 4) were issued for 
high-level  corruption  in  2020,  resulting  in  two  convictions  of  three  persons.  In  2021,  one 
conviction  based  on  a  plea  bargain  agreement  became  final  and  one  further  convicting 
judgment was issued in another case but is not yet final. In December 2020, Montenegro sent 
a new request to Serbia for the extradition of the former President of the State Union of Serbia 
and Montenegro, after the reply to its request from April 2019 had not been answered.  

The track record on the confiscation of assets for criminal offences in the field of high-level 
corruption remains moderate. In 2020, one residential unit of 193 m2 was confiscated. In the 
first half of 2021, assets were temporary frozen in two cases.  

The track record on prevention of corruption is slowly improving, but sanctions imposed in 
general  still remain below the statutory minimum  and do not  have a preventive or deterrent 
effect.  In  2020,  the  ACA  instituted  510  proceedings  (469  proceedings  for  violating  the 
provisions of the Law on prevention of Corruption, and 41 for violating the provisions of the 
Law on financing of political entities and election campaigns) before misdemeanour courts. A 
total  of  394  proceedings  were  completed  in  2020  (including  those  from  previous  years),  in 
81% of them fines were imposed. These amounted to EUR 58 370 for violation of the Law on 
prevention of corruption, and EUR 23 192 for violation of the Law on financing of political 
entities and election campaigns. Further 652 proceedings were instituted by mid 2021, and in 
the proceedings terminated during the same period fines in the total amount of EUR 62,475 
were imposed. In 2020, the ACA further issued 42 direct misdemeanour orders (2019:40) and 
131 in  the first  six months of 2021 alone.  In four cases, ACA  requested  seizure of material 
gain before the competent courts, resulting in one confiscation valued EUR 2,892 in 2020 and 
in two confiscations in the amount of EUR 8,654 in the first half of 2021.  

Based on 135 opinions (2019:158) and 63 decisions (2019:72) issued by the Agency in 2020 
on  incompatibility  of  functions  and  conflict  of  interests,  41  public  officials  resigned 
(2019:57), whilst one (2019: four) was dismissed. 

In  2020,  the  ACA  has  received  8,108  (2019:8149)  income  and  asset  declarations  and 
verified  966  reports  (2019:911),  exceeding  its  annual  plan  by  around  10%.  The  optional 

25 

 
 
consent  for  accessing  bank  accounts  for  the  purpose  of  verifying  the  data  submitted  in  the 
declarations  was  provided  by  53,5%  of  public  officials.  In  2020,  the  Agency  initiated  138 
(2019:119) administrative proceedings and violations were established in 60 (2019:54) cases. 
Sanctions  were  imposed  in  10  cases  (2019:17),  seven  in  the  form  of  a  warning,  two  in  the 
form  of  salary  deduction  and  one  in  the  form  of  initiation  of  the  disciplinary  procedure.  In 
December 2020, the Agency started to monitor the lifestyle of public officials, using publicly 
available data and media reports. The ACA carried out planned control and verification of 872 
(2019:839)  public  officials,  20  of  them  high-ranking  officials,  including  two  ministers.  The 
Agency issued 21 misdemeanour orders (2019:7) totalling EUR 3,832.  

Concerning  funding  of  political  parties  and  electoral  campaigns,  in  2020,  46  political 
parties (out of 59) submitted annual financial reports, while 51 submitted decisions regarding 
amounts of membership fees for 2020. All reports submitted were published on the Agency’s 
website. In November 2020, the Agency published the report on its oversight of the election 
campaign  for  the  30  August  elections.  The  Agency  carried  out  control  of  43  political 
entities/electoral  lists  as  well  as  36  opened  election  accounts.  In  total,  144  complaints  were 
submitted  and  processed.  In  11  cases,  the  ACA  found  violation  of  the  Law  on  financing  of 
political  entities  and  electoral  campaigns,  initiated  proceedings  in  12  cases  and  forwarded 
seven complaints to other competent authorities for further examination. In the course of the 
election  campaign,  the  ACA  submitted  74  warnings  to  political  parties  and  initiated  44 
misdemeanour  proceedings,  89%  less  in  comparison  with  campaign  for  2016  parliamentary 
elections.  The  Agency  developed  a  specific  PR  plan  for  the  campaign  and  organised  three 
roundtables with the civil society, media and political parties as well as regular ‘open-door’ 
days  with  interested  NGO  representatives.  In  the  first  quarter  of  2021,  the  Agency  oversaw 
the local elections in Niksic on 14 March in line with its competences. According to the final 
report  issued  in  June,  the  Agency  verified  54  reports  of  political  parties  and  issued  33 
warnings. In total, 105 proceedings were conducted related to irregularities and suspicions of 
violations  of  the  Law.  The  Agency  performed  10  on  spot  inspections  and  was  part  of  the 
working  group  established  by  the  Ministry  of  Interior  during  election  day  in  Niksic.  It 
organised  four  meetings  with  NGO  representatives.  Five  complaints  were  submitted  for 
Agency’s further investigation, four of them were forwarded to other competent bodies. One 
misdemeanour procedure was initiated and 30 misdemeanour orders were issued. The Agency 
oversaw the local elections in Herceg Novi on 9 May in accordance with its work plan which 
included eight on spot inspections, as well as co-operation with civil society and media.  

In  2020,  the  State  Audit  Institution  published  positive  audit  reports  on  annual  financial 
statements  from  2019  for  eight  political  entities,  whilst  regularity  audits  resulted  in  one 
positive, one negative and six  conditional reports. The SAI further forwarded three cases to 
the prosecution following completed audits of public bodies and public companies. While the 
quality  of  its  reports  is  improving,  the  fact  that  it  only  forwards  its  suspicions  of  fraud  and 
corruption  related  offences  to  the  prosecution  once  it  completes  its  audit,  negatively  affects 
the efficiency of the criminal response to these cases.  

In  2020,  the  Agency  received  three  requests  for  whistle-blower  protection,  including  one 
requesting  physical  protection,  which  was  subsequently  referred  to  and  denied  by  law 
enforcement  services.  The  Agency  finalised  the  work  on  the  three  request  from  2019, 
establishing the damage caused on whistle-blower in two cases. In 2020, the Agency received 
75 reports on threats to public interest (2019:110), 31 reports were processed and threats on 
public  interest  were  established  in  three  cases.  Twelve  reports  were  forwarded  to  the 
prosecution,  whereby  four  reports  were  rejected  and  investigation  on  the  other  reports  is 
underway.  The  prosecution  established  irregularities  in  one  case  from  2016  concerning  the 
private sector.  

26 

 
 
On integrity plans, in 2020, 679 reports on the implementation of the integrity plans for 2019 
were  submitted,  and  currently  98%  of  public  authorities  have  integrity  plans  in  place.  The 
Agency prepared the report on the implementation of the integrity plans, which also includes 
assessment of the efficiency and effectiveness of all integrity plans and recommendations for 
their further improvement. 

The  lobbying  register  still  contains  only  six  persons.  In  2020,  the  Government  approved  a 
draft rulebook on the organisation of the lobbying exams. The new commission on lobbying is 
yet to be appointed, after the mandate of the former one expired.  

The draft code of ethics for top executive officials and the guidelines on how to implement 
the anti-corruption rules prepared already in 2020 is still not adopted. The results in this area 
remain very limited.  

In  2020,  the  Agency  submitted  two  non-binding  legal  opinions,  on  the  draft  Law  on 
amendments to the Law on civil servants and state employees, and on the Law on sports. In 
the  first  quarter  of  2021,  it  submitted  its  opinion  on  the  proposal  of  the  Law  on  Public 
Prosecutor's Office and on the proposal of the Law on Prosecutor's Office for organized crime 
and  corruption  as  well  as  its  opinion  on  the  existence  of  threats  to  public  interest  by  the 
Minister of Justice at that time. In April 2021, the Agency initiated proceedings to determine 
potential conflict of interest with regard to Minister of Justice and his role in drafting the Law 
on freedom of religion, following a NGO complaint.  

Institutional framework  

Prevention of corruption  

Currently,  the  Agency  employs  55  people.  In  March  2021,  the  rulebook  on  the 
systematisation  of  the  Agency,  was  adopted  and  foresees  a  total  of  75  posts  in  the  ACA 
organisational  structure.  In  2020,  the  Agency  enhanced  its  communication  activities, 
including  strengthening  its  presence  on  social  networks  and  media  as  well  organising  joint 
meetings  with  CSOs.  The  work  has  also  started  on  addressing  the  remaining  caseload  from 
previous years.  

In November 2020, the basic court of Podgorica annulled the Parliament’s decision to dismiss 
one  member  of  the  Council  of  the  ACA  in  2019  due  to  incomplete  establishment  of  facts, 
application of the law and legal reasoning. With another ruling in November 2020, the basic 
court  of  Podgorica  found  that  five  members  of  the  Council  of  the  ACA  were  unlawfully 
appointed by the Parliament on 31 July 2019.  

In  December  2020,  the  National  Council  for  the  fight  against  high-level  corruption  was 
established,  chaired  by  the  Deputy  Prime  Minister.  The  body  aims  at  addressing  systematic 
problems  related  with  high-level  corruption  cases  and  increasing  transparency  on  the  fight 
against corruption. Its institutional role, relations with other bodies and its powers, as well as 
safeguards in this respect, still need to be adequately defined. Several sessions of the Council 
were  organised  and  the  rules  of  procedure  of  the  Council  were  adopted.  In  April  2021,  the 
expert team  of the National  Council announced that  during recent  years,  at  least  175 out  of 
580  public  officials  and  members  of  the  judiciary  and  prosecution  received  government-
subsidised  apartments  and  housing  loans  worth  EUR 25 million,  suggesting  a  number  of 
irregularities and transparency and integrity risks. 

Law enforcement 

In 2020, the Special Prosecutor’s Office for organised crime and high-level corruption (SPO) 
increased its staff number to 54 members, including 16 Special Prosecutors (respectively, 46 

27 

 
 
and 14 in 2019). The poor office conditions, hampering the efficient functioning of the SPO, 
remain unaddressed.  

Legal framework 

The  law  on  financing  of  political  entities  and  election  campaigns  maintains  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 in OSCE/ODIHR recommendations, 
need to be swiftly addressed. In November 2020, the Agency proposed a revision of the Law 
on lobbying to the Ministry of Justice, Human and Minority Rights. 

In 2020, the total number of requests for free access to information was 4,328 (2019:5,409) 
and  3,304  (2019:3,531)  complaints  were  filed.  The  draft  amendments  to  the  Law  on  free 
access  to  information  should  be  finalised  by  end  of  2021.  The  Government  plans  to 
proactively  share  public  information  and  there  is  a  more  positive,  albeit  uneven,  trend  of 
declassifying  and  providing  access  to  certain  documents  to  which  access  was  denied 
previously. This also concerns information with regard to areas sensitive to corruption.  

Fundamental rights  

In  the  area  of  fundamental  rights,  the  legislative  and  institutional  framework  is  largely  in 
place  and  Montenegro  continues  meeting  obligations  from  international  human  rights 
instruments  and  legislation.  However,  challenges  remain  in  effective  implementation.  The 
efficiency of investigations into excessive use of  force by law-enforcement  and hate  crimes 
needs  to  improve  further.  Vulnerable  groups,  including  Roma  and  Egyptians,  and  persons 
with  disabilities  continue  to  experience  multiple  forms  of  discrimination  and  difficulty  in 
enforcing  their  rights  in  administrative  and  judicial  proceedings.  Women  continue  to 
experience inequality in  participating in political  and public life and accessing employment, 
and  economic  opportunities.  Gender-based  violence  and  violence  against  children  remain 
issues  of  serious  concern.  Incidents  of  ethnically  and  religiously  motivated  attacks,  hate 
crimes  and  hate  speech  continued  to  rise.  Last  year’s  recommendations  have  been  only 
partially  addressed.  Access  to  justice,  in  particular  of  vulnerable  groups  remains  to  be 
improved. Amendments to the 2019 Law on Freedom of Religion of Belief were adopted in 
January 2021.  

In the coming year Montenegro should in particular: 

  implement the key outstanding recommendations of the monitoring bodies of the United 

Nations (UN) and Council of Europe (CoE);  

  improve the legal and institutional framework to ensure better access to justice, procedural 
rights  and  free  legal  aid  for  victims  of  human  rights  violations  and  crimes,  in  particular 
children, women, minorities, including Roma and Egyptians, and persons with disabilities; 
  complete  the  alignment  with  EU  acquis  in  the  area  of  data  protection  and  improve  the 
capacity, professionalism and independence of the Agency for Data Protection and Access 
to Documents. 

As  regards  international  human  rights  instruments,  Montenegro  continued  its  dialogue 
with international human rights organisations and monitoring bodies, the United Nations and 
the  Council  of  Europe.  Montenegro  has  yet  to  ratify  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  to  ensure  good  cooperation  with  the  European  Court  of  Human 
Rights  (ECtHR).  In  2020,  218  new  applications  against  Montenegro  were  allocated  to  a 

28 

 
 
judicial formation and 37 applications were pending at the end of the year. In 2020 and first 
half  of  2021,  ECtHR  issued  decisions  in  16  cases.  While  majority  of  violations  were  found 
with  respect  to  the  length  of  proceedings,  the  court  also  found  violations  of  the  procedural 
aspect  of  the  prohibition  of  torture,  inhuman  and  degrading  treatment  due  to  ineffective 
investigation of police abuse during opposition protests in October 2015, of the right to family 
and  private  life  and  unlawful  deprivation  of  liberty.  No  case  was  subject  to  enhanced 
supervision of the Committee of Ministers in 2020.  

in 

to  an 

initial  slowdown 

On the promotion and enforcement of human rights, the institutional capacities need to be 
further  strengthened,  including  by  allocation  of  appropriate  budget.  The  merging  of  the 
Ministry of Human and Minority Rights with the Ministry of Justice in late 2020 and related 
the 
organisational  and  personnel  changes  contributed 
implementation  and  monitoring  of  human  rights  strategies  and  policies.  The  regulatory  and 
institutional framework for the functioning of the Ombudsperson (B status) is in place and the 
Ombudsperson continued to be perceived as the institution with the best impact and trust with 
regard  to  the  promotion  and  protection  of  citizens’  rights.  The  capacities  of  the  Office  to 
handle complaints and the quality of its decisions continued to improve. The Office reinforced 
its  communication  with  competent  authorities  and  the  public  as  well  as  the  visibility  of  its 
actions.  Its  budget  was  reduced  by  five%  in  2021  compared  to  2020.  In  2020,  the  office 
received  1,075  complaints  (2019:  840),  mostly  in  relation  to  the  rights  of  the  child, 
discrimination,  alleged  violations  of  procedural  rights,  excessive  use  of  force  by  the  police, 
ill-treatment  and  torture  in  police  stations  and  detention  facilities,  and  issued  357 
the 
recommendations.  The 
authorities  needs  to  be  more  systematic,  effective  and  prompt.  The  quality  of  the 
Constitutional  Court's  decisions  continued  to  improve  with  regard  to  awareness  and 
application of human rights standards and ECtHR case-law. For the first time, in September 
2020, the Court ordered to halt an extradition of a foreign citizen due to risks of torture and 
ill-treatment.  The  fact  that  regular  courts  do  not  always  follow  its  decisions  and  have 
divergent interpretation of human rights standards still raises concerns over legal certainty, the 
right to final judgement and duration of proceedings. An analysis is under preparation on the 
the 
divergent 
Constitutional Court, in particular with respect to property rights guarantees. The backlog of 
cases pending before the Constitutional Court continues to increase.   

implementation  of  Ombudsperson’s  recommendations  by 

interpretation  of  human  rights  standards  between 

the  Supreme  and 

As  regards  the  prevention  of  torture  and  ill  treatment,  Montenegro  continued  to  work 
towards  implementing  the  2019  recommendations  by  the  European  Committee  for  the 
Prevention  of  Torture  and  Inhuman  or  Degrading  Treatment  (CPT).  Amendments  to  the 
Criminal  Code  to  comply  with  2018  UN  Universal  Periodic  Review  recommendation  to 
prohibit  the  statute  of  limitations  for  criminal  offences  of  torture  and  other  forms  of  ill-
treatment  are  not  yet  finalised.  New  instructions  on  the  treatment  of  detainees  and  arrested 
persons  by  police  officers  entered  into  force  in  April  2021.  The  capacities  of  the  national 
prevention  mechanism  (NPM)  embedded  in  the  Ombudsperson’s  Office  were  further 
strengthened and the NPM fulfilled its annual visits plan for 2020. The Office processed 201 
cases in 2020, most of them concerning the Institute for the Execution of Criminal Sanctions 
(129) and the Police Administration (39). With respect to police procedures, it found evidence 
of misconduct and infringements of human rights standards in four cases. It further reported 
11 cases of ill-treatment in prisons. In November 2020, it completed its investigation in two 
cases  concerning  allegations  of  torture  and  ill-treatment  of  three  individuals  in  police 
detention in May 2020. It found evidence of inhuman and degrading treatment in one case and 
of serious misconduct in terms of procedures in the other case. The police internal control did 
not  confirm  the  allegations  of  ill-treatment  or  torture  in  the  case  of  one  of  the  three 

29 

 
 
individuals,  investigation  by  the  prosecution  is  still  ongoing.  The  Ombudsperson  further 
confirmed allegations of ill-treatment by police in 11 cases in the context of religious rallies. 
Disciplinary  proceedings  against  three  police  officers  and  further  preliminary  investigations 
are  ongoing  with  respect  to  the  events  in  Budva  in  June  2020.  Indictments  were  lodged  in 
April 2021 against five police officers and the chief of the local police station in relation to 
alleged  ill-treatment  during  the  May  2020  protests  in  Pljevlja.  In  2020,  16  cases  against  31 
defendants  (police  officers)  concerning  the  criminal  offence  of  ill-treatment  were  pending 
before  the  courts.  Proceedings  were  concluded  in  five  cases  with  two  convictions,  two 
acquittals,  and  the  dismissal  of  indictment  against  two  defendants.  Despite  this  relative 
increase in investigated and prosecuted cases, shortcomings in internal control, protracted and 
inefficient  investigations,  lenient  and  non-deterrent  sanctions  and  impunity  for  perpetrators 
remain a cause of concern. The investigations into police violence continue to be hampered by 
lack of visible identification markings on police uniforms.   

Some  progress  was  made  on  the  prison  system  and  conditions  of  detention.  Following  the 
2020  amendments  to  the  Law  on  enforcement  of  prison  sentences,  fines  and  security 
measures,  respective  by-laws  and  internal  measures  were  adopted.  The  Strategy  for  the 
execution  of  criminal  sanctions  2017-2021  has  been  partially  implemented  due  to  limited 
financial resources and expertise, as well as challenges related to the COVID-19 crisis. Staff 
reinforcement and capacity building continued as well as programmes or activities available 
to  the  prisoners.  Several  NGOs  implemented  educational,  recreational,  vocational  activities 
for prisoners in various sectors. Psychological, social and re-socialisation services were also 
provided at  the detention and rehabilitation centre of Podgorica for juveniles. A COVID-19 
crisis  plan in  prison was adopted in  accordance  with  the recommendations of both  the CPT 
and  the  Ombudsperson.  Vaccination  of  inmates  started  in  March  2021.  The  new  juvenile 
prison  department  became  operational  in  October  2020.  The  number  of  female  prisoners  in 
Montenegro is estimated (2019) around 30, representing 2.6 % of the total prison population. 
Conditions  in  the  detention  unit  for  female  inmates  are  overall  decent.  Despite  some 
improvement, the material conditions in prisons, pre-trial detention facilities and psychiatric 
hospitals  are  still  not  at  the  level  required  by  international  standards.  Conditions  in  the 
overcrowded Dobrota psychiatric hospital remain very poor.  

On  protection  of  personal  data,  Montenegro  continued  working  on  alignment  with  EU 
acquis.  The  capacity  of  the  Agency  for  Personal  Data  Protection  and  Free  Access  to 
Information,  composed  of  30  employees  in  2020,  needs  to  be  further  strengthened.  The 
number  of  complaints  is  increasing  but  the  overall  awareness  on  personal  data  protection 
issues  remains  low.  In  early  2021,  criminal  investigations  were  opened  against  the  former 
head of the National Security Agency and several officer of the Agency for alleged unlawful 
surveillance  of  former  opposition  parties’  representatives,  journalists  and  leaders  of  the 
Serbian Orthodox Church. In May 2021, a first-instance court issued first decision awarding 
compensation due to publication by the authorities of a list of individuals subject to COVID-
19  measure  of  self-isolation  in  spring  2020,  which  was  declared  to  be  in  violation  of  the 
Constitutional right to privacy by the Constitutional Court in July 2020. Several hundred such 
claims  are  currently  pending  before  the  courts.  Montenegro  has  not  signed  yet  the  2018 
Council of Europe Protocol amending the Convention for the Protection of Individuals with 
regard to Automatic Processing of Personal Data.   

In the area of freedom of thought, conscience and religion, in January 2021, the Parliament 
through a second vote enacted amendments to the Law on freedom of religion or beliefs with 
respect to the legal status of religious communities, their registration and property rights. The 
amendments  were  prepared  in  absence  of  public  debate  and  following  limited  consultations 
with representatives of religious communities, excluding the Montenegrin Orthodox Church. 

30 

 
 
The  Government  announced  the  signing  of  a  basic  agreement  with  the  Serbian  Orthodox 
Church.  Its  content  is  yet  to  be  disclosed  to  the  public.  Several  church  ceremonies  and 
gatherings  took  place  in  violation  of  the  COVID-19  restrictions.  The  religiously  motivated 
attacks  continued  after  the  August  2020  elections  and  in  the  course  of  2021  and  remain  a 
matter of concern.  

Freedom of expression 

Montenegro  has  achieved  some  level  of  preparation  in  the  area  of  freedom  of  expression. 
There was limited progress overall during the reporting period. Despite certain signals from 
the Government that it would consider this area a priority, last year’s recommendations were 
only partially addressed and safety of journalists remains a serious concern. Full and effective 
judicial follow-up to important old cases of attacks against journalists remains to be ensured. 
In April 2021, the government established a new ad-hoc commission for monitoring violence 
against media, but  recommendations of the previous commission  still need to  be  addressed. 
The revision of the legal framework continued. More efforts are required to limit the effects 
of disinformation and on-line harassment and hate speech, while ensuring that such measures 
do not limit disproportionately freedom of expression. New RTCG Council was appointed by 
Parliament  in  June  2021.  Following  this  change  and  the  subsequent  changes  of  RTCG 
management,  the  public  broadcaster  started  to  feature  politically  more  diverse  content.  The 
media scene overall remained highly polarised. Extensive involvement of foreign media from 
the  region  was  particularly  notable  during  elections’  periods.  Self-regulatory  mechanisms 
remain weak. The announced preparation of a new media policy strategy has the potential to 
facilitate broad and inclusive dialogue between the authorities and national stakeholders.  

In addressing the shortcomings, Montenegro should in particular: 

  step up efforts to effectively investigate, credibly solve and adequately sanction cases of 

attacks against journalists;  

  safeguard  against  any  form  of  political  pressure  or  influence  on  RTCG  and  continue  to 

restore its editorial independence and professional standards; 

  complete the revision of the legal framework in the area of media in continued dialogue 
with the media community and civil society, while ensuring consistent application of the 
new legislation in accordance with international and European standards. 

Intimidation of journalists 

There has been limited progress  in  addressing violence against journalists and media. Some 
progress  was  made  in  the  investigation  of  the  2018  shooting  of  an  investigative  journalist, 
however,  effective  judicial  follow-up  both  to  this  case  and  to  other  critical  old  cases, 
including the 2004 murder of the  editor-in-chief  of the daily  newspaper  Dan, remains  to  be 
ensured. In 2020, the prosecution launched  six criminal proceedings  and one misdemeanour 
case for violence against journalists and media property. Courts dealt with eight criminal and 
misdemeanour cases of attacks and harassment of journalists, convicting five defendants and 
dismissing  charges  against  one  person.  Harassment  of  journalists,  including  use  of  physical 
violence in several cases, and on-line threats were reported in the course of 2020 and 2021. In 
December 2020, two persons were arrested on suspicion of plotting to murder an investigative 
journalist,  while the police filed criminal  charges against six persons in  relation  to  the May 
2018  attack  on  the  same  journalist.  The  journalist  was  granted  police  protection.  Full  and 
effective  judicial  follow-up  to  this  case  is  yet  to  be  ensured.  Further  efforts  are  needed  to 
effectively  investigate,  credibly  solve  and  adequately  sanction  cases  of  attacks  against 
journalists.  

31 

 
 
On several occasions, top government officials engaged in strongly worded public criticism of 
the work of the public broadcaster and certain privately owned media outlets. The authorities 
should promote an environment conducive to investigative journalism and media freedom, by 
promptly reacting to and publicly condemning hate speech and threats, and by refraining from 
exercising political pressure on journalists, including through their public statements.  

In  March  2021,  the  Appellate  Court  upheld  the  first-instance  judgement  of  the  Podgorica 
Higher Court sentencing an investigative journalist to one year in prison on charges of acting 
as intermediary in a drug trafficking operation. The ruling raises concerns about journalists’ 
ability to perform their duties professionally and without fear of legal repercussions.  

In April 2021, the government established a new commission for monitoring violence against 
media, with the same competences as the previous one. The specific recommendations from 
the  previous  commission  concerning  important  old  cases  of  attacks  on  journalists  have  not 
been  fully  and  effectively  addressed  by  the  relevant  authorities.  The  authorities  are 
encouraged to ensure effective follow-up of commission’s recommendations, while providing 
it with all the necessary preconditions for its work. 

Legislative environment 

A review of the 2020 Law on media and the Law on public broadcaster RTCG, together with 
the preparation of a new Law on audio-visual media is ongoing. It should address additional 
issues  identified  in  the  2020  law  on  media  and  the  law  on  public  broadcaster  RTCG,  to 
complete it with a new law on audio-visual media, and ensure their full alignment with the EU 
acquis  and  European  standards.  The  Ministry  of  Public  Administration, Digital  Society  and 
Media  launched  a  public  consultation  process  for  the  drafting  of  a  comprehensive  media 
strategy for the period 2021-2025. Once adopted, it would be a first document of this type.  

Implementation of legislation/Institutions 

There is an uneven application of the journalistic code of ethics across the media community, 
self-regulatory  mechanisms  are  weak  and  the  frequency  of  journalists  and  media  filing 
defamation  lawsuits  against  other  journalists  is  high.  More  resolute  efforts  are  needed  to 
create effective self-regulatory mechanisms, with a view to improving professional standards 
and accountability in media reporting. 

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

The public broadcaster RTCG is yet to complete its transition from a state media organisation 
to a true public service broadcaster that would comply with the highest professional standards. 
New RTCG Council was appointed by the Parliament by simple majority in June 2021. Since 
the  subsequent  appointment  of  the  RTCG's  new  management  and  editorial  team,  RTCG 
broadcasting  started  to  reflect  a  more  balanced  editorial  policy  featuring  politically  more 
diverse content. The dismissals of former members of the RTCG Council and subsequently of 
its  management  in  2018,  which  raised  concerns  about  undue  political  interference  and 
pressure  on  the  RTCG,  continued  to  be  declared  unlawful  by  domestic  courts  in  2021.  The 
issue  of  an  efficient  legal  remedy  in  cases  of  dismissals  of  RTCG  Council  members  by 
Parliament is yet to be addressed, either through case law or legislation.  

Economic factors 

The chronic economic difficulties affecting the local media community have been exacerbated 
by  the  COVID-19  pandemic.  The  new  legal  provisions  aimed  at  ensuring  transparency  of 
state  advertising  are  yet  to  be  implemented.  There  is  a  growing  influence  of  big  regional 
media companies that are looking to expand to the national media market. Small local media 

32 

 
 
outlets  are  struggling  to  compete  with  them  for  the  limited  advertising  revenues.  The 
government put in place a set of mechanisms for financial support to mitigate the economic 
fallout  of  the  COVID-19  epidemic,  including  general  financial  aid  package,  financial 
assistance  for  print  media  and  online  news  portals,  salary  subsidies,  working  capital  loans, 
and deferred payment of payroll taxes during 2020. The Council of the Agency for Electronic 
Media exempted public and commercial broadcasters from the payment of broadcasting fees 
for 2020 and 2021.  

Internet 

Cases of arrests of citizens for content they posted on-line, although less frequent, continued 
to  be  reported.  The  courts  dismissed  the  charges  in  several  proceedings  instituted  in  2020 
against editors of on-line portals and citizens for content they posted on-line. The 2020 Law 
on Media  requires online media outlets  to  remove any third-party  comments  that represents 
manifestly  illegal  content  no  later  than  within  60  minutes  of  receiving  a  notification  about 
such illegal content. The short deadline for removal of comments potentially places an undue 
burden on online media outlets, particularly on smaller services.  

Professional organisations and working conditions 

The COVID-19 pandemic has further  aggravated the already difficult economic situation of 
journalists  and  media  workers,  including  job  insecurity  and  low  salaries.  Journalists  are 
generally  economically  highly  dependent  on  media  owners,  regardless  of  whether  private 
individuals,  national  or  local  authorities,  which  ultimately  results  in  biased  reporting  and 
creates risks of self-censorship, political pressure and owners’ interference in editorial policy. 
Journalists at  local  public broadcasters are particularly exposed to  such risks  and precarious 
working  conditions,  as  these  broadcasters  are  directly  editorially  influenced  and  financially 
controlled by local authorities.  

(See also Chapter 10- Information society and media) 

The freedom of assembly and association was overall respected during the reporting period.  
While the COVID-19 pandemic contributed to a significant decrease in the number of public 
assemblies  compared  to  the  previous  year,  a  number  of  occasional,  mostly  unannounced 
gatherings were held largely peacefully, albeit in breach of epidemiological measures. Large-
scale assemblies were held after the August 2020 elections. The Law on freedom of assembly 
continued  to  be  unevenly  applied,  including  arrests  and  fines,  depending  on  the  political 
nature  of  the  public  gathering.  The  Ombudsperson  established  that  police  had  made  use  of 
excessive force in two cases. In June 2020, the Ombudsperson found that a soldier’s right to 
freedom of peaceful assembly was violated by a general order of the Chief of General Staff of 
the Armed Forces banning soldiers from attending religious rallies.  

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  in  the  past 
remains  slow  and  Montenegro  still  needs  to  ensure  fair  restitution  proceedings  within  a 
reasonable time. The lack of harmonised approach in the application of property rights in the 
case law of the Supreme and Constitutional Courts remains an issue of concern. A systemic 
follow-up  including  through  revision  of  the  legal  framework,  will  be  needed  to  address  the 
shortcomings  in  the  expropriation  of  land  in  the  coastal  zone  as  identified  by  the  ECtHR. 
Women face difficulties in practice when claiming inheritance and property rights in divorce 
proceedings. 

33 

 
 
to  handle  discrimination  complaints.  However, 

In  the  field  of  non-discrimination,  draft  Amendments  to  the  Law  on  prohibition  of 
discrimination,  are  yet  to  be  finalised  to  ensure  full  compliance  with  EU  provisions.  The 
Ombudsman’s  capacities  as  anti-discrimination  body  improved  and  the  office  has  the 
necessary  competences 
the  overall 
institutional  framework  remained  insufficiently  prepared  to  address  the  increase  of  multiple 
forms  of  discrimination,  in  particular  in  the  context  of  the  COVID-19  crisis.  In  2020,  the 
Ombudsperson’s  Office  received  220  complaints  of  discrimination  (2019:141  cases)  and  55 
complaints  related  to  labour  and  employment  issues.  Court  cases  in  the  area  of  non-
discrimination  remained  rare.  There  has  been  an  increase  in  reports  of  religiously  and 
ethnically motivated attacks, hate crimes, and hate speech. The 2017 priority recommendation 
of the European Commission against Racism and Intolerance (ECRI) to put in place a system 
for collection of disaggregated data on hate crime is yet to be implemented.  

On  gender  equality,  the  evaluation  of  the  2017-2031  action  plan  revealed  shortcomings  in 
the  implementation,  lack  of  awareness  and  commitment  among  institutions,  poor  gender 
mainstreaming, discrepancies in the application of the legal framework and weak coordination 
with  other  national  strategies.  The  new  gender  equality  strategy  2021-2025  and  the  gender 
action plan for 2021-2022 are pending adoption by Government. The 2021 Action Plan for the 
implementation  of  the  UNSC  resolution  1325  (Women,  Peace  and  Security  in  Montenegro) 
was  adopted.  The  2020  Gender  Equality  Index  for  Montenegro  (55)  is  12  points  below  the 
EU-28  average  (67.4),  mostly  relating  to  insufficient  political  and  social  participation  of 
women,  economic  inequality  and  unequal  division  of  responsibilities.  Difficulties  remain 
notably in relation to women’s access to work, vocational training, employment and working 
conditions;  they  also  remain  underrepresented  in  political  and  economic  decision  making. 
There  has  been  an  increase  in  smear  campaigns,  hate  speech  and  instrumentalisation  of 
gender-based  violence  against  women  in  politics  and  public  life.  Women  have  been 
disproportionately affected by the COVID-19 pandemic.  

Gender-based  violence,  in  particular  domestic  violence  remains  a  serious  and  persistent 
criminal, societal and public health issue. In 2020, 265 cases of domestic violence (2019: 281) 
were  registered  as  criminal  offences  and  further  2,133  (2019:1,819)  by  the  misdemeanour 
courts,  while  specialised  NGOs  registered  an  increase  of  around  30%  of  cases  in  2020 
compared to previous year. It is estimated that the majority of cases of gender-based violence 
remain  unreported.  The  authorities  continued  to  cooperate  with  CSOs,  demonstrated 
commitment and took concrete measure to address the situation. An evaluation of the strategy 
on  protection  from  violence  was  completed  in  February  2021,  showing  deficiencies  in  the 
formulation of impact indicators. The new strategy is expected in 2021. Amendments to the 
Law  on  domestic  violence  that  were  under  preparation  are  not  included  in  the  Government 
programme for 2021. The definitions of gender- based violence and domestic violence across 
legislation  need  to  be  further  aligned  with  the  Istanbul  Convention  and  the  GREVIO 
recommendations.  Sexual  harassment  is  still  not  qualified  as  a  criminal  offence.  The 
Operational Team for combating domestic violence and violence against women continued to 
meet  regularly.  Its  impact  assessment  is  currently  ongoing  in  accordance  with  GREVIO 
recommendations.  Challenges  persist  with  regard  to  implementation  and  monitoring  of 
existing legal and strategical framework and policies, victim-focused support, access to justice 
for  victims,  lack  of  systemic  approach  with  regard  to  physical  protection  of  victims,  legal 
qualification  of  acts  of  domestic  violence  and  lenient  sanctions.  While  authorities’ 
cooperation  with  specialised  NGOs  operating  shelters  and  offering  support  to  victims  is 
improving, the NGOs face limited hosting capacities and limited funding. The protocol of the 
work of institutions was amended to better define the scope of services of the shelters during 
the pandemic and recommendations for the implementation of the protocol on the treatment, 

34 

 
 
prevention and protection of women against violence and domestic violence were developed. 
Draft guidelines for police and prosecutors on intervention in cases of all forms of violence 
against  women  have  also  been  prepared.  Trainings  and  awareness-raising  campaign  on 
protection  from  domestic  violence,  violence  against  children  and  juvenile  forced  marriages 
were organised for the Roma and the Egyptian communities. Campaigns for the promotion of 
SOS hotlines for victims of human trafficking have been implemented.  

On the rights of the child, the COVID-19 pandemic negatively affected the living conditions 
and  access  to  education,  special  care  and  medico-social  services  of  children,  in  particular 
those from socially disadvantaged families and children with disabilities. It also increased the 
risk of domestic and sexual violence. The capacities of professionals dealing with children in 
contact with the law were strengthened, including through provision of training on legal aid 
and child friendly justice for professionals. An analysis of court cases involving children was 
prepared  by  an 
inter-sector  working  group  providing  recommendations  for  further 
improvement  of  the  treatment  of  children  in  civil  proceedings  and  child  friendly  justice. 
Guidelines for the work of professional support services with children in conflict with the law 
and child victims and witnesses of crime were adopted. Further concrete measures need to be 
implemented to improve child protection legislation, as foreseen by the national Strategy for 
Excercising the rights of the Child (2019-2023). In June 2021, a new national Council on the 
Rights of the Child, which acts as an inter-ministerial coordinating mechanism, and is chaired 
by  the  Deputy  Prime  Minister,  was  constituted.  Montenegro  still  needs  to  follow-up  on  the 
UN  monitoring  bodies’  recommendations  to  raise  the  minimum  age  for  entering  into 
marriage,  as  the  practice  of  arranged  child  marriages  among  the  Roma  and  Egyptian 
communities  remains  a  matter  of  concern.  Since  June  2020,  the  National  SOS  Children's 
Telephone  Line  is  available  to  all  users  24  hours  a  day,  every  day  of  the  week.  Necessary 
resources need to be invested in establishing victim support services in the health and social 
sector  and  family  support  and  outreach  services,  as  planned  by  the  national  strategy  on 
prevention and protection of children from violence. In November 2020, the Ombudsperson 
called for suspending the construction of a home for children without parental care since these 
plans contravened the national commitments to de-institutionalisation.  

Regarding the rights of persons with disabilities, alignment of the national legislation with 
the  UN  Convention  on  the  Rights  of  Persons  with  Disabilities  is  not  yet  ensured,  including 
with  respect  to  the  definition  of  disability.  A  new  Law  on  professional  rehabilitation  and 
employment  of  persons  with  disabilities  is  under  preparation.  The  Council  for  the  Care  of 
Persons  with  Disabilities  has  not  met  since  its  establishment  in  June  2020.  The  2019-2020 
Action  Plan  for  the  adaptation  of  public  buildings  for  persons  with  reduced  mobility  and 
persons  with  disabilities  for  2019-2020  has  not  been  fully  implemented.  Persons  with 
disabilities  continue  to  face  multiple  forms  of  discrimination.  The  COVID-19  crisis 
significantly worsened their situation with regard to mobility, accessibility to public services 
and information, employment, health and education. Gaps remain to be addressed with respect 
to  mainstreaming  the  rights  of  persons  with  disabilities  across  sectors  and  policies.  In 
addition, there is a lack of a harmonised concept of disability in the legislation. However, the 
reform of the National Disability Determination System is under way. .Strategies addressing 
multiple  discrimination  of  women  and  girls  with  disabilities,  de-institutionalisation  and 
sustainable funding of family and community-based services for children with disabilities and 
their families are lacking.  

The proposed new organigramme of the Ministry of Justice and Human and Minority Rights 
does not make any reference to the  rights of lesbian, gay, bisexual, transgender, intersex 
and queer (LGBTIQ) persons. The 2021 action plan accompanying the 2019-2023 strategy 
was  adopted  in  July  2021.  The  application  of  the  2020  law  on  life  partnership  of  same  sex 

35 

 
 
partners (same-sex partnership law) started on 15 July 2021 following the timely adoption of 
the key bylaws for registration of same-sex partnership. Trainings for local self-governments 
registry  offices  were  provided.  However,  in  order  for  this  law  to  be  fully  applicable, 
harmonisation  of  further  pieces  of  legislation  is  required,  such  as  on  social  benefits  and 
residence. The working group for drafting the Law on legal gender recognition has not been 
formed  yet.  The  Government  established  the  national  focal  point  network,  to  promote 
LGBTIQ rights at the local level and monitor the implementation of the national strategy for 
the improvement of the quality of life of LGBTIQ persons in Montenegro (2019-2023). The 
visibility of the LGTBIQ community has not yet led to a substantial improvement with regard 
to  homophobic  incidents,  threats  and  discriminations,  and  in  terms  of  access  to  health  care, 
justice,  employment  and  housing.  Demand  for  social  services,  psychological  support,  and 
legal aid, as well as economic and social vulnerability of LGBTIQ persons have increased due 
to the COVID-19 pandemic.  

A work plan for further alignment of the criminal legislation with EU acquis and procedural 
rights  standards  was  developed  on  the  basis  of  three  separate  analyses  on  the  rights  of 
victims, rights of suspects and accused persons, as well as the rights of persons deprived of 
liberty.  Amendments  to  the  Criminal  and  Criminal  Procedure  Codes  are  foreseen  for  late 
2021. An analysis was also prepared on the rights of juvenile suspects, victims and witnesses 
in criminal proceedings to support the preparation of a draft law on the treatment of juveniles 
in  criminal  proceedings  also  planned  for  late  2021.  Issues  remain  concerning  the  right  to 
information and participation at all stages of the proceedings, unjustified prolonged pre-trial 
detentions and insufficient protection of victims, in particular women and children, as well as 
overall length of proceedings. Montenegro should abolish the suspension of application of the 
law on victims’ compensation until the date of EU accession and secure sufficient funding for 
victims’ support without delay. Comprehensive data on free legal aid is still not available. The 
lawyer’s  strike  that  was  ongoing  between  May  and  end  of  July  2021  has  seriously  affected 
enforcement of procedural  rights  in  all types of  proceedings, including  urgent  ones, leaving 
victims, defendants and other parties without legal representation.  

Concerning protection of minorities, secondary legislation and institutional mechanisms for 
promoting  and  safeguarding  rights  of  persons  belonging  to  minorities  have  not  been 
sufficiently implemented. The legal framework for minority councils still needs to be revised 
and equal representation of all minorities in Parliament remains to be ensured. Most activities 
in the field of employment in the framework of the minority policy strategy 2019-2023 and 
the  action  plan  for  2020  were  postponed  to  2021  due  to  the  COVID-19  pandemic.  Greater 
responsibility  should  be  given  for  a  more  efficient  application  of  anti-discrimination  and 
multi-ethnic  policies  at  local  level.  Challenges  concerning  monitoring  and  evaluation  of 
distribution  of  funding  by  the  Fund  for  the  Protection  and  Realisation  of  Minority  Rights 
remain  to  be  addressed.  In  2020,  the  Ombudsperson  handled  19  cases  of  discrimination 
against  minorities  referring  to  labour  and  employment,  underrepresentation  in  public 
authorities,  education,  and  cultural,  linguistic  and  religious  identity.  Recent  cases  of  hate 
speech, attacks and discrimination against national minorities constitute a worrying trend. 

The strategy for the inclusion of Roma and Egyptians 2021-2025 was adopted in September 
2021.  It  aims  to  align  with  the  2020-2030  EU  Roma  Strategic  Framework  for  Equality, 
Inclusion  and  Participation  and  to  pay  special  attention  to  antigypsyism  for  the  first  time. 
Challenges remain in the area of implementing the 2018 Roma seminar conclusions and 2019 
Poznan  Declaration  commitments,  as  well  as  of  the  recommendations  on  international 
monitoring  bodies,  such  as  the  UN,  ECRI  and  the  Committee  of  Experts  of  the  European 
Charter for Regional or Minority Languages.  

36 

 
 
In 2020, EUR 136 000 was allocated by the government for 14 CSOs projects on protection 
and  promotion  of  the  rights  of  Roma  and  Egyptians.  Through  the  Regional  Housing 
Programme,  additional  233  housing  units  were  provided  for  more  than  1,000  persons 
displaced and internally displaced Roma in Podgorica, Niksic and Berane. Around 190 Roma 
families in the coastal municipalities are under the threat of eviction due to privatisation of the 
land on which they live. Roma and Egyptians are not recognised as a separate category from 
other  vulnerable  or  socially  deprived  groups  in  the  eviction  context.  No  segregated  data  is 
available on applications for legalisation of buildings lodged by Roma.  

The enrolment rate of Roma and Egyptian primary school pupils decreased, with 1,793 Roma 
schoolchildren  (929  boys  and  864  girls)  enrolled  for  2020/2021  school  year,  compared  to 
1,803 Roma and Egyptian children in primary schools in 2019/2020. There is a slight increase 
in  the  number  of  secondary  school  pupils,  namely  174  (101  boys  and  73  girls;  142  in 
2019/2020),  and  224  children  in  kindergartens  (106  boys  and  118  girls).  There  are  17 
university students  (six male and nine female).  Currently, 22 Roma  and Egyptian education 
mediators are employed in seven municipalities and paid by the government. However, Roma 
education  mediators  can  be  only  hired  for  schools  having  the  minimum  of  70  Roma 
schoolchildren  and  out  of  22  education  mediators,  only  11  are  Roma.  Roma  and  Egyptian 
secondary  schools  pupils  and  Roma  university  students  receive  scholarship.  In  order  to 
improve the quality of Roma education, 47 mentors have been hired to work with 169 Roma 
in final years of primary school and 48 mentors for 157 Roma in secondary schools within the 
framework  of  a  project.  There  are  no  official  data  on  the  overall  number  of  Roma  children 
who should be attending school. Enrolment is done closest to the specific part of town where 
children live, which may lead to segregation of Roma children. Drop-out in primary schools is 
reduced,  however,  the  quality  of  education  of  Roma  children  is  still  of  great  concern, 
additionally  deteriorated  due  to  the  COVID-19  pandemic,  when  Roma  schoolchildren  were 
mainly assisted only on project basis by international organisations in terms of equipment and 
learning tools.  

There  is  no  data  on  the  coverage  of  Roma  and  Egyptian  children  in  regular  vaccination 
campaigns.  There  is  a  need  for  parental  education  programmes  on  reproductive  health  and 
family planning, as well as for the increase of Roma health mediators. Currently, three Roma 
and Egyptian health mediators are permanently employed by the Ministry of Health. The 40 
further  Roma  and  Egyptian  mediators  in  health,  employment  and  social  protection  are 
foreseen  to  be  engaged  in  2021  and  2022  through  projects  with  limited  duration.  They  will 
need  to  be  fully  integrated  in  the  system  with  permanent  employment  contracts.  The 
coordination  body  for  monitoring  the  implementation  of  the  protocol  on  dealing  with  street 
children  was  established  in  the  Ministry  of  Interior  in  February  2020,  however,  no  specific 
results  were  reported.  There  is  still  no  evidence  that  child  begging  and  child  marriages  are 
systematically addressed. 

As of December 2020, there were 996 unemployed Roma and Egyptians registered with the 
National  Employment  Bureau,  representing  2%  of  all  registered  unemployed  persons  in 
Montenegro.  Some  95  %  of  all  registered  unemployed  Roma  have  the  minimum  level  of 
education.  Some  50  Roma  and  Egyptians  were  employed  for  a  short  period  of  time  for 
seasonal  works  during  the  entire  2020.  Employment  levels  of  secondary  school  Roma  and 
Egyptian  pupils  remains  low.  Measures  applied  by  the  National  Employment  Bureau  or 
municipalities  are  not  sustainable  and  do  not  address  the  problems  of  the  long-term 
unemployment of Roma. Subsidies for Roma employment were not  renewed, which  creates 
another barrier for Roma employment. Discrimination is often barrier to employment, as well 
as limited functional literacy of the great number of Roma seeking employment.  

37 

 
 
With regard to displaced and internally displaced people, 15,254 requests for permanent or 
temporary  residence  lodged  with  the  Ministry  of  Interior  by  May  2021.  Of  these,  15,119 
requests have been resolved and 135 cases are still pending. For 12 394 persons, permanent or 
temporary residence has been granted, 295 requests have been refused and 2,430 temporarily 
refused due to incomplete or double requests.  

On  statelessness,  since  the  beginning  of  the  application  of  the  law  on  foreigners  in  2018, 
seven  travel  documents  and  four  temporary  residence  permits  have  been  issued  to  stateless 
persons  until  March  2021.  The  procedure  for  determining  statelessness  is  ongoing  for  14 
persons. In addition to procedural challenges, the lack of awareness of the importance of birth 
and citizenship registration remains one of the underlying causes of statelessness, particularly 
among the Roma and Egyptians. It is important to maintain the implementation of simplified 
civil registration and status resolution procedures for ex-Yugoslavia refugees at national level, 
as  well  as  through  continuous  cooperation  with  respective  countries  of  origin.  The  newly 
introduced  birth  registration  practice  allowing  for  immediate  birth  registration  of  children 
abandoned by their mothers or those whose mothers are without identity documents should be 
harmonised and implemented in all municipalities. 

In the field of citizenship, the Government plans to revise the law on Montenegrin citizenship 
and the implementing legislation. Any change to legislation in such an important area should 
be  done  in  an  inclusive  way,  bringing  together  all  relevant  stakeholders,  and  after  broad 
consultations  on  the  subject.  In  March  2021,  the  government  announced  its  decision  not  to 
prolong implementation of the investor citizenship scheme beyond the end 2021. During the 
reporting  period,  licences  were  issued  to  three  intermediary  agents  and  two  due  diligence 
agents. By mid-2021, positive decisions on citizenship were issued for 81 applicants and 185 
family  members,  largely  for  investing  in  hotel  business  and  tourist  complexes.  Montenegro 
should effectively phase-out this investor citizenship scheme. 

2.2.2  Chapter 24: Justice, freedom and security   

The EU has common rules for border control, visas, external migration and asylum. Schengen 
cooperation  entails  lifting  border  controls  inside  the  EU.  There  is  also  cooperation  in  the 
fight against organised crime and terrorism, and judicial, police and customs cooperation. 

Montenegro  is  moderately  prepared  in  the  area  of  justice,  freedom  and  security.  The 
legislative and institutional frameworks are largely in place. Some progress was achieved in 
addressing last year’s recommendations, in particular as regards the capacity to manage mixed 
migration  flows  and  the  integration  of  refugees.  The  Ministry  of  Interior  has  improved 
dialogue  with  the  civil  society  and  the  inclusiveness  of  the  decision-making  process. 
However,  the  structural  challenges  hampering  the  criminal  justice  system  have  not  been 
addressed,  such  as  the  widespread  use  of  plea  bargains  and  the  narrow  approach  towards 
financial investigations.  

In the coming year, Montenegro should in particular: 

  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;  

  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; 

38 

 
 
  further strengthen the capacities in border management, by addressing the critical gaps in 
human  resources  and  equipment;  take  the  necessary  steps  to  establish  an  Advance 
Passenger  Information  System,  and  a  biometric  registration  system  that  follows  the 
Eurodac model.  

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 improving the access of law-enforcement agencies to key databases and 
increasing the number of investigators and experts in key areas. 

The number of organised crime cases investigated and prosecuted continued to grow, and the 
number  of  cases  adjudicated  at  courts  nearly  tripled.  A  well  established  international  police 
cooperation  continued  to  yield  results,  with  unprecedented  drug  seizures  in  the  country  and 
abroad. However, the capacity to address tobacco smuggling and money laundering is not yet 
at  the  expected  level.  Montenegro  still  needs  to  address  some  systemic  deficiencies  in  its 
criminal justice system, including the way organised crime cases are handled in the courts. 

In the coming year, the country should in particular:  

  continue  to  increase  the  efficiency  of  criminal  investigations  by:  i.  establishing  an 
interoperable  system  with  a  single  search  feature;  ii.  restoring  the  full  use  of  special 
investigative  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; 
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 

In 2020, the number of police officers was reduced to 4,139, from 4,537 in 2019. The ratio of 
police officers remains high at 502/100,000 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 (1,284 staff members), and non-operational staff such as advisors and 
officers without police rank. 

The  legal  framework  for  the  fight  against  organised  crime  is  largely  in  place  and  aligned 
with the EU acquis. In June 2021, the Parliament adopted the Law on internal affairs, which 
had been under preparation for four years. The law brings important improvements to issues 
relating  to  the  recruitment,  career  system  and  evaluation  of  police  officers.  Under  the  new 
law,  the  police  is  reintegrated  back  into  the  Ministry  of  Interior  (two  years  after  it  was 
established as an autonomous entity by the previous government), hence now with a stronger 
oversight from the Minister of Interior over police work. However, two amendments added to 
the  text  during  the  Parliamentary  discussions  at  the  initiative  of  the  ruling  majority  provide 
the  Parliament  with  a  de  facto  decisional  power  over  the  appointment  and  dismissal  of  the 
Police Director, hence creating a risk of politicisation of the police. Merit-based appointments 
and procedural  safeguards against political  influence need to  be the  guiding principle in  the 
reform of the police.   

39 

 
 
Further to the change of ruling majority, the Head of the police was dismissed and replaced by 
a new Head in February 2021, after a selection process involving a representative of a Human 
Rights NGO as observer. All the seven Deputy Police Directors were also dismissed at once, 
including in areas where outstanding results had been achieved in the last two years. The new 
organisation  foresees  five  sectors,  for  which  five  new  Police  Deputy  Directors  were 
appointed. A senior police officer with extensive operational experience including as former 
Head of the Special Police Unit (SPU) was appointed as the new Police Deputy Director for 
the fight against crime.  

The human resources involved in the fight against organised crime increased to 82 (from 72 in 
2019), and ten positions still need to filled. New positions were created in the department for 
the fight against drugs smuggling. However, this is still insufficient to cope with the workload 
in this area. The capacity of the Special Prosecutor’s Office (SPO) has increased, with 54 staff 
members  (from  46  in  2019),  including  16  Special  Prosecutors.  Montenegro  has  not 
established  a  centralised  database  on  organised  crime  and  corruption,  collected  from  all 
relevant  authorities,  which  would  support  strategic  monitoring  and  policy-making.  The 
restoration  of  some  special  investigative  measures  (SIMs),  that  were  suspended  further  to  a 
2018 Constitutional Court ruling, is pending legislative amendment to the criminal procedure 
code. .  

The Asset Recovery Office (ARO) currently has five staff members and acts as ARO contact 
point for foreign AROs and for the Camden Asset Recovery Inter-agency Network. It now has 
access  to  the  databases  of  the  Property  Administration,  the  Central  Bank  and  the  Tax 
Administration. The access to other important databases, such as the Customs Administration, 
is yet to be established.  

In  November  2020,  the  Administration  for  the  Prevention  of  Money  Laundering  and 
Terrorism  Financing  (or  FIU)  was  readmitted  to  the  EGMONT  group,  11  months  after  its 
membership  was cancelled, when the  FIU ceased to  exist under its previous legal  form and 
was established within the police. However, in the context of the reorganisation of the police 
in March 2021, the FIU was again administratively dismantled and its Head was dismissed (as 
one  of  the  previous  Deputy  Police  Directors).  It  was  recreated  under  a  new  administrative 
name,  the  Department  for  Financial  Intelligence  Affairs,  with  the  same  staff  and  same 
mandate, as a sector of the police under the Ministry of Interior. The FIU has maintained its 
30  staff  members,  including  17  working  directly  on  cases.  Its  analytical  capacity  was 
increased  with  the  development  of  an  electronic  Case  Management  System  and  upgraded 
hardware  equipment,  which  allows  electronic  exchange  of  information  on  suspicious 
transactions between State bodies, in line with MONEYVAL recommendations. 

In  June  2021,  the  Parliament  adopted  yet  another  set  of  amendments  to  the  Law  on  the 
prevention of money laundering and terrorism financing, to reflect the new setting of the FIU 
and  to  align  it  with  the  new  Law  on  internal  affairs.  The  two  laws  confirm  the  FIU’s 
operational independence and autonomy. This administrative adjustment aims at ensuring the 
compliance  with  the  Financial  Action  Task  Force  (FATF)  standards  and  the  EGMONT 
group’s  criteria.  However,  the  law  has  yet  to  be  aligned  with  the  fourth  and  fifth  EU  Anti-
Money  Laundering  Directives.  The  Law  on  International  Restrictive  Measures  and  the  Law 
on Games of Chance have yet to be amended.  

A National Risk Assessment on Money Laundering and Terrorism Financing was adopted in 
2020,  after  a  broad  consultation  process.  It  lays  down  the  country’s  main  challenges  and 
priorities in the area of money laundering and terrorism financing and sets the obligations of 
all concerned institutions and stakeholders. 

40 

 
 
In  the  area  of  firearms,  a  revised  Law  on  weapons  aimed  at  aligning  the  rules  on  legal 
production, acquisition and possession of weapons with EU standards, is pending adoption. 

Implementation and enforcement capacity 

typical  features  of 
International  drug  smuggling  and  gang-related  murders  remain 
Montenegro’s criminal scene. Some 13 gang-related murders occurred in Montenegro in 2020 
and 5 homicides involving Montenegrin criminal groups occurred abroad, including in Spain, 
Germany, Austria and Greece.  

The capacity to investigate organised crime continued to grow. The number of cases brought 
by the police to the SPO almost doubled in 2020, with 76 cases compared to 39 in 2019. The 
SPO conducted 25 investigations in organised crime cases, targeting 178 people and 22 legal 
entities. Some 273 people were indicted in 2020 (for 95 in 2019) as well as 57 legal entities. 
In  April  2021,  the  police  arrested  in  Kotor  the  alleged  leader  of  one  of  Montenegro’s  main 
criminal  groups,  the  so-called  Kavač  clan,  in  a  large  police  operation  conducted  in 
cooperation with an EU Member State and with the support of Europol. Charges were brought 
against him and 13 other members of the  group. Five more arrests and the prevention of at 
least five homicides took place in the first three months of 2021. In August 2021, the police 
arrested  five  alleged  members  of  the  Škaljari  clan  across  several  locations  in  the  country, 
following an investigation, also supported by Europol, into planned assassinations and attacks 
targeting members of the prosecution and the police. 

The constant increase in the number of investigations in the last two  years has resulted in a 
surge  of  court  judgements  and  convictions  in  2020.  There  were  63  organised  crime  cases 
adjudicated by the Podgorica High Court in 2020 (against 329 defendants), from 22 in 2019 
and 15 in 2018. Some 51 final convictions were pronounced, including 44 cases based on plea 
bargains.  As  regards  serious  crime,  222  convictions  were  pronounced  (for  170  in  2019), 
including 125 plea bargains. The use of plea bargains continued to be widespread in organised 
and  serious  crime  cases,  with  sentences,  fines  and  asset  confiscations  disproportionally  low 
compared with the gravity of the crime. The trend was confirmed in the first three months of 
2021, with six more convictions, all based on plea bargains. Sentences in the context of plea 
bargains  ranged  from  three  months  to  two  years  and  six  months  of  imprisonment  and  fines 
from EUR 1,500 to EUR 40,000. In other cases adjudicated without plea bargains, including 
for  aggravated  murder,  sentences  went  up  to  18  years  of  imprisonment.  The  use  of  plea 
bargains needs to be limited 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. 

As  regards  the  access  of  law-enforcement  agencies  to  key  databases,  four  units  of  the 
police  are  now  connected  to  Europol’s  Secure  Information  Exchange  Network  Application 
(SIENA)  secure  communication  channel,  a  crucial  improvement  for  the  proactivity  and 
efficiency  of  investigations:  the  unit  in  charge  of  combating  drug  smuggling,  the  financial 
intelligence unit, the unit in charge of the fight against organised crime and the unit in charge 
of  the  fight  against  serious  crimes.  However,  the  access  of  law  enforcement  agencies  to 
national databases is not always automatic and, in some cases, requires time-consuming prior 
requests.  A  new  cooperation  agreement,  paving  the  way  for  a  system  of  automatic  data 
exchange in  the area of  organised crime between key institutions, was signed in  May 2021, 
including by the Central Bank and the Public Revenue Office, managing the cadastre.  

The number of communications exchanged with foreign police services through Interpol and 
Europol decreased in 2020, to respectively 48 634 and 3 998, due to reduced exchange flows 
worldwide. However, international police cooperation continued to play a strategic role in 
the  fight  against  criminality  despite  COVID-19  constraints.  Ten  Montenegrin  crime  group 

41 

 
 
members were arrested abroad in 2020. In April 2021, two high-ranking members of one of 
Montenegro’s  main  crime  groups  were  arrested  in  Portugal  and  eventually  extradited  to 
Montenegro.  Eight  tons  of  cocaine  were  seized  abroad  in  relation  to  Montenegrin  crime 
groups  (39  kg  in  2019)  in  cooperation  with  foreign  police  services.  Eight  members  of 
organised  crime  groups  were  also  arrested  in  Montenegro  based  on  arrest  warrants  from 
foreign Interpol offices.  

Montenegro  expanded  its  participation  in  the  European  Multidisciplinary  Platform  against 
Criminal  Threats  (EMPACT)  for  weapons  and  explosives,  facilitation  of  illegal  migration, 
cybercrime,  synthetic  drugs,  cocaine,  cannabis,  heroin  and  environmental  protection.  In 
September 2020, Montenegro engaged 103 officers in  the Joint Action Days for South  East 
Europe, Europol’s operation focused on irregular migration, drug and arm smuggling that had 
gathered  34  countries.  Other  Joint  Action  Days  (JAD),  such  as  JAD  Danube  5  and  JAD 
Mobile  3  brought  tangible  results,  such  as  seizures  of  vehicles  and  vessels,  detected  forged 
documents, seized tobacco and drugs, and the prevention of smuggling of 52 migrants by sea. 
The  EMPACT  platform  for  combating  narcotics  was  instrumental  for  unveiling  drug 
smuggling chains and contributed to number of arrests and to large drug seizures. In 2021, the 
Montenegrin  police  is  a  co-leader  in  two  operational  actions  under  the  EMPACT  Firearms 
Operational Plan. Montenegro also chairs another cooperation platform, the Southeast Europe 
Police  Chiefs  Association  (SEPCA),  and  provides  support  through  its  observer  status  in  the 
European Network of Fugitive Active Search Units (ENFAST).  

Cooperation  with  the  EU  Agency  for  Law  Enforcement  Training  (CEPOL)  is  well 
established, since the signature of a cooperation agreement in 2011. At present, Montenegro is 
a  partner  in  CEPOL’s  Partnership  against  Crime  and  Terrorism  project  in  the  Western 
Balkans (WB PaCT), a three-year project that launched in October 2020. 

The  number  of  financial  investigations  continued  to  rise.  The  Special  Prosecutor’s  Office 
conducted 25 financial investigations regarding 104 people and 14 legal entities in 2020, for 
15 in 2019. Most of them are large, complex and resources-demanding investigations. In most 
cases, the financial investigation was launched after the criminal investigation with the aim of 
proceeding  to  an  extended  confiscation,  but  the  number  of  cases  where  the  financial 
investigation  was  launched  in  parallel  with  the  criminal  investigation  increased.  Standard 
operating procedures for conducting financial investigations are being used. Training of staff 
continued in this area. The centralised bank account register of the Central Bank includes only 
resident bank accounts, which hinders the collection of information on non-resident accounts. 
The  incomplete  land  cadastre  hampers  the  efficiency  of  financial  investigations  and  asset 
confiscations. 

Montenegro’s capacity in asset recovery is progressively improving but the number of final 
confiscations  remains  limited.  Some  15  final  confiscation  decisions  were  issued  in  2020. 
Some EUR 5,8 million were returned to the State budget in 2020 as a result of confiscations. 
Twelve  decisions  on  temporary  seizures  were  issued,  including  substantial  real  estate, 
vehicles, bonds and money. The Asset Recovery Office plaid an increasing role in detecting 
and  tracing  assets,  with  84  requests  for  verification  received  in  2020  (from  37  in  2019), 
including  64  of  them  received  from  foreign  partners.  However,  in  order  to  increase  the 
volume of confiscations  and durably  hit criminal organisations, Montenegro needs to  revise 
its legal framework regarding asset confiscation, by introducing modern concepts such as the 
confiscation  of  assets  of  equivalent  value,  in  cases  when  the  proceeds  of  the  crime  itself 
cannot be found.  

The track record on combatting trafficking in human beings continued to improve in 2020. 
Seven trafficking cases against nine defendants were pending at the Podgorica High Court in 

42 

 
 
2020  (compared  with  three  cases  in  2019  and  one  in  2018).  Two  first-instance  convictions 
were  issued,  with  sentences  up  to  eight  years  of  imprisonment.  Fourteen  investigations  into 
trafficking in human beings and five preliminary investigations were carried out.  

Montenegro has now a stronger institutional capacity to address trafficking in human beings, 
through  a system made  of several  multidisciplinary bodies  for the strategic, operational  and 
protection dimensions. The Team in charge of identification, referral and initial assistance to 
victims,  which  includes  representatives  of  the  police,  health,  social  professionals  and  one 
NGO, identified 52 victims in  2021. Among them were 21 women and  10  children. All  the 
children were from the Roma and Egyptian communities, and were victims of forced beggary 
or  forced  marriage.  The  identified  victims  were  sheltered  in  specialised  shelters  and  the 
children are integrated to the school system. The most prevalent form of exploitation, amongst 
the  cases  detected,  remained  labour  exploitation  but  no  case  of  organised  trafficking  for 
sexual exploitation has been unveiled in recent years. The Ministry of Interior allocates grants 
to NGOs to conduct protection and awareness raising activities but the shelter run by one of 
the  partner  NGO  remained  closed  for  several  months  due  to  administrative  problems.  The 
Judicial  Training Centre created a vocational  training module for judges  and prosecutors on 
trafficking  in  human  beings.  Montenegro  still  needs  to  improve  its  capacity  to  detect  large-
scale  trafficking  networks,  in  particular  for  sexual  exploitation,  and  to  better  prevent 
trafficking  in  human  beings  activities  amongst  seasonal  labour  migrants,  through  a  stronger 
involvement of the Labour Inspectorate. A more robust criminal justice response to trafficking 
in  human  beings  needs  to  be  provided,  with  shorter  legal  proceedings,  more  deterrent 
sentences, systematic confiscation of the proceeds of crime, and the establishment of a victim-
compensation  system.  The  selection  of  NGOs  for  victim-protection  activities  needs  to  be 
based on past experience and expertise.  

As regards firearms, the number of seized weapons went down to 514 in 2020 (from 990 in 
2019),  of  which  287  were  firearms.  However,  the  number  of  firearms  seized  at  borders 
increased  to  31.  There  were  206  convictions  in  cases  relating  to  smuggling,  carrying  or 
possession of weapons in 2020. However, the number of cases concerning specifically illicit 
trade of weapons with a cross-border element remained low. Montenegro has yet to amend its 
criminal  code  in  order  to  incriminate  trafficking  of  firearms  under  a  specific  provision,  in 
compliance  with  UN  Firearms  Protocol,  and  not  together  with  other  types  of  violations. 
Montenegro’s  data  collection  and  reporting  system  on  firearms  have  yet  to  be  standardised, 
for  both  law  enforcement  authorities  (with  respect  to  arrests  and  seizures)  and  the  judiciary 
(with respect to prosecutions and convictions). The ballistics laboratory is still in the process 
of being accredited and not yet linked to the Firearms Focal Point. Storage facilities need to 
be modernised, to address the insufficient safety of existing storage for firearms, ammunition 
and explosives.  

The  initial  track  record  on  money  laundering  was  further  developed,  with  31    preliminary 
investigations launched,  three times more than in 2019, and more cases reaching the courts. 
The Podgorica High Court had nine on-going money-laundering cases against 308 defendants 
(individuals and legal entities), of which seven were new cases (compared to six case pending 
in 2019). However, no final decision on money laundering was issued in 2020. The complex 
Atlas Bank case, in which 248 defendants were indicted in April 2019 for creating a criminal 
organisation,  money  laundering  and  tax  evasion,  was  sent  back  to  the  Special  Prosecutor's 
Office for further investigation. Montenegro needs to establish an integrated approach among 
all bodies involved in the criminal justice chain to address money laundering more effectively 
and develop a track record of final convictions.  

Montenegro’s  capacity  on  cybercrime  is  progressively  growing,  but  it  is  still  not  robust 
enough to face global threats in this area. The number of cybercrime investigations rose from 

43 

 
 
four in 2019 to 19 in 2020 (against 22 individuals and one legal entity). The courts had four 
on-going  cybercrime  cases  in  2020.  Two  first-instance  convictions  were  pronounced, 
including one with a prison sentence. The responsible police unit has now five posts. Changes 
in  the  internal  organisation  of  the  police  allow  now  the  recruitment  of  staff  without  police 
background  for  highly  specialised  functions,  such  as  IT  specialists.  The  police’s  specialised 
hardware and software was upgraded. The Forensic Centre has now a fully operational digital 
laboratory equipped with modern digital forensic equipment. 

In the area of tobacco smuggling, the police unveiled yet another smuggling network of ten 
people  operating  in  the  free  zone  of  the  Port  of  Bar  in  October  2020,  suspected  of  causing 
damages  to  the  State  budget  of  up  to  EUR  18  million.  One  new  investigation  into  tobacco 
smuggling associated with organised crime regarding 12 people was launched in 2020. In July 
2021, the SPO launched an investigation into the theft of 1,160 packages of cigarettes worth 
500,000  euros  in  the  Port  of  Bar.  However,  there  was  no  conviction  in  this  area,  neither  in 
2020  nor  at  the  beginning  of  2021.    In  July  2021,  the  government  announced  the  start  of  a 
legal process to prohibit storage of tobacco products in the port of Bar. Montenegro needs to 
further  strengthen  its  capacity  to  address  tobacco  smuggling  throughout  the  whole  judicial 
chain, by improving its track record of final convictions and asset confiscation in this area. 

On witness protection, protection measures were applied to seven people compared to three 
people  in  2019.  In  cases  falling  under  the  competence  of  the  SPO,  extra-judicial  protection 
measures were implemented with regard to 25 people in 2020.  

Cooperation in the field of drugs 

Institutional set-up and legal alignment 

Montenegro’s  legal  framework  in  this  area  is  not  fully  aligned  with  the  EU  acquis.  The 
national  drug  information  system  does  not  fully  meet  EU  standards.  The  National  Drug 
Observatory is embedded in a newly created Directorate for the prevention of drug abuse in 
the  Ministry  of  Health.  It  remains  understaffed  and  continues  to  have  reduced  budget 
autonomy. 

Good  technical  and  scientific  capacity  exists  in  the  Institute  of  Public  Health,  forensic 
laboratory and other institutions dealing with drug-related issues, but data collection on drugs 
is not compliant with the EU standards. National data sets are not provided to the European 
Monitoring  Centre  for  Drugs  and  Drug  Addiction  (EMCDDA)  in  the  requested  form  and 
timelines. In 2020, Montenegro provided for the first time in five years a national drug report 
to the EMCDDA. 

The  National  Early  Warning  System  is  not  ready  to  be  linked  to  the  EU  Early  Warning 
System,  as  it  has  limited  operational  capacity,  lacks  defined  procedures  and  sufficient 
involvement of law enforcement  and health authorities. A multi-disciplinary Task  Force for 
the Early Warning System on New Psychoactive Substances has been set up. The strategy for 
the prevention of drug abuse 2013-2020 came to an end and is  yet to be replaced by a new 
one.  

Montenegro  needs  to  strengthen  its  National  Drug  Observatory,  increase  the  technical 
capacity  of  the  National  Early  Warning  System  and  provide  the  conditions  for  full 
participation in the activities of the EMCDDA and the Reitox network, including the ability to 
provide national data. 

Implementation and enforcement capacity 

Montenegro continued to be a key transit country for drugs, as a part of the Balkan route, in 
particular  for  cannabis  produced  in  Albania  and  transiting  through  Montenegro  towards  the 

44 

 
 
EU.  The  authorities  seized  3.1  tons  of  drugs  in  2020  (from  2.4  tons  in  2019),  mainly 
marijuana.  In  two  prominent  cases,  the  Montenegrin  police  in  close  cooperation  with 
Albanian police unveiled criminal groups smuggling marijuana from Albania, leading to the 
arrest of 27 people and the seizure of 2.7 tons of marijuana on the territory of Montenegro. In 
August  2021,  police  seized  more  than  one  ton  of  cocaine  worth  EUR  100  million  near 
Podgorica, in the largest seizure in the country’s history. 

Montenegro actively participates in drug-related multi-country police operations. In 2020, this 
led to  a total  amount  of 8 tons  of cocaine and 46 kg of marijuana  seized abroad.  In August 
2021,  following  a  9-month  long  operation  investigating  the  Montenegrin  Škaljari  criminal 
group  activities  in  the  Spanish  Canary  Islands,  the  Spanish  authorities  arrested  four 
Montenegrin  citizens  and  seized  over  400  kg  of  cocaine  and  nearly  half  a  million  euros  in 
cash.  The  operation  involved  Spanish,  Montenegrin  and  Albanian  authorities,  as  well  as 
Europol and the use of Europol’s SIENA.   

In  2020,  nine  investigations  into  drug  smuggling  associated  with  organised  crime  were 
conducted  against  17  people.  The  courts  issued  eight  convictions  for  drug  smuggling 
associated with organised crime in 2020, including seven convictions based on plea bargains. 
Some  158  convictions  for  drug  smuggling  associated  with  serious  crime  were  issued  (from 
126  in  2019),  of  which  127  were  based  on  plea  bargains.  In  three  cases,  assets  were 
confiscated for a total amount of EUR 12,390 and one vehicle.  

The insufficient storage capacity for seized drugs has yet to be addressed. Montenegro has yet 
to amend the relevant legal provisions in the criminal procedure code, to make it possible to 
keep only a sample of psychoactive substances as evidence for court proceedings, and not the 
entire amount, as it is the case now. 

Fight against terrorism 

Institutional set-up and legal alignment 

Montenegro’s legal framework is largely aligned with the EU acquis. However, the Law on 
international  restrictive  measures  is  yet  to  be  aligned  with  European  standards  and  there  is 
still no legal framework that regulates terrorist content online. A strategy on preventing and 
countering  violent  extremism  for  2020-2024  was  adopted  in  February  2020  and  is  being 
implemented.  However,  Montenegro  has  yet  to  adopt  the  strategy  for  the  prevention  and 
countering  of  terrorism,  money  laundering  and  terrorism  financing,  which  expired  in  2018. 
Coordination should be enhanced between the two closely interconnected strategies, to avoid 
overlap  and  working  in  silos.  Montenegro  also  does  not  have  yet  a  comprehensive  national 
threat assessment in the area of fight against terrorism. 

In  June  2021,  the  Bureau  for  Operational  Coordination  of  Security  Services  established  a 
National  Interdepartmental Operational Team for Countering Violent Extremism, Terrorism, 
Money  Laundering  and  Terrorism  Financing,  which  involves  various  ministries  and  public 
administrations  as  well  as  representatives  from  non-governmental  organisations.  A  new 
National  Coordinator for counter-terrorism  and for the prevention of violent  extremism  was 
appointed further to the dismissal of the previous ones in the context of the reorganisation of 
the Ministry of Interior.  

The institutional capacity on critical infrastructure was increased with the creation of a new 
department of three staff members for the coordination and protection of critical infrastructure 
within the Ministry of Interior. The by-laws to the Law on critical infrastructure, setting the 
criteria to define critical infrastructures, were adopted. Further to the signature in November 
2019 of the arrangement to implement the Joint Action Plan on counter-terrorism for the 

45 

 
 
Western Balkans with the EU, Montenegro continued to implement the measures foreseen and 
submitted its second and third reports on January and August 2021 respectively. 

Implementation and enforcement capacity 

The threats of terrorism and violent extremism remained relatively low in the country. There 
were no new departures or returns of Montenegrin citizens to and from foreign battlefields in 
2020 and the first three months of 2021. Standard operational procedures for early detection 
of manifestations of violent extremism were drafted and numerous trainings held.  However, 
the  multi-disciplinary  team  on  prevention  of  violent  extremism  established  in  May  2019 
suspended  its  work  in  October  2020  when  the  previous  National  Coordinator  for  the 
prevention  of  violent  extremism  was  dismissed.  Montenegro  needs  to  address  all  forms  of 
extremism,  including  violent  right  wing  extremism  and  ethno-nationalist  extremism,  in  line 
with the EU and EU Member States’ policy on prevention of violent extremism and terrorism.   

Montenegro  does  not  have  any  convicted  for  terrorism  detained  in  prison.  The  prison 
administration  continued  to  participate  in  several  donors  funded  projects  strengthening  its 
capacity to prevent violent extremism and radicalisation. Montenegro actively participates to 
the  EU  Radicalisation  Awareness  Network  to  support  and  enhance  community  engagement 
and raise awareness within all communities. 

In  the  2016  election-day  coup  attempt  case,  the  Appeal  Court  in  2021  revoked  the  first 
instance judgment from 2019 against 13 defendants (including two Russian and eight Serbian 
citizens), found guilty of terrorism. The case was returned to the High Court for retrial with a 
new panel. Several investigations into terrorism financing were conducted in 2020, including 
checks of 37 people on suspicions of terrorism financing and of two people on suspicions of 
links to terrorism.  

Montenegro  continued  to  cooperate  closely  with  Interpol  and  Europol,  to  contribute  to  the 
Terrorism Risk Assessment and Analysis for the Western Balkans and the Terrorism Situation 
and  Trend  Report.  In  October  2020,  the  police  participated  in  the  Joint  Action  Days  on 
extremist  propaganda  on  internet,  and,  in  April  and  May  2021,  in  the  Days  on  Pro-Right-
Wing  Terrorist  Online  Content.  The  use  of  Europol  tools  and  products  for  the  fight  against 
terrorism  has  increased,  thanks  to  the  establishment  of  a  direct  connection  of  the  Special 
Police  Unit  to  Europol’s  SIENA  communication  channel.  The  number  of  communications 
exchanged through SIENA on counter-terrorism was 242 in 2020 and 167 during the first five 
months of 2021. Montenegrin police actively participates in the activities of the three pillars 
of  the  Integrative  Internal  Security  Governance,  including  the  Western  Balkan  Counter 
Terrorism Initiative, and contact persons have been appointed for each of them.  

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, 
with a special attention to hybrid and cyber threats.  

Legal and irregular migration 

Institutional set-up and legal alignment 

Montenegro’s legal framework in the area of legal and irregular migration is largely aligned 
with the EU acquis. A draft strategy on migration and reintegration of returnees for the period 
2021-2025 is finalised. 

The  EU-Montenegro  readmission  agreement  is  facilitated  by  implementing  protocols 
concluded with 15 EU Member States. Montenegro has 11 readmission agreements with non 
EU-countries,  including  all  Western  Balkan  partners  and  Turkey.  The  requests  sent  in  July 

46 

 
 
2019  to  Pakistan,  Iran,  Iraq,  Morocco  and  Algeria,  to  start  readmission  negotiations  with 
them, remain unanswered so far. 

Implementation and enforcement capacity  

Both  legal  and  irregular  migration  sharply  decreased  in  2020  against  the  backdrop  of  the 
COVID-19  pandemic.  Travel  restrictions  and  the  slowdown  of  tourism  have  reduced  the 
demand for seasonal workers. Some 34,755 temporary residence permits were issued in 2020, 
an 18% drop from 2019.  

The arrival of migrants fell by 60% compared with 2019, with 3149 migrants apprehended in 
2020.  Until  mid-April  2021,  there  were  735  apprehensions,  mostly  of  Afghan,  Moroccan, 
Bangladeshi and Pakistani nationals. This is 44% less than during the same period last year. 
Montenegrin  authorities  prevented  293  illegal  exit  border  crossings  and  3,858  illegal  entry 
border  crossing  in  2020.  The  Special  Prosecutor’s  Office  conducted  two  investigations  into 
migrant smuggling in 2020. In one case, final convictions were issued regarding eight people. 
The Montenegrin authorities are not hosting evacuees from Afghanistan. 

On two occasions, the border police prevented the smuggling of migrants on the Adriatic Sea 
in direction of Italy and disembarked respectively 52 and 39 migrants and crewmembers, now 
under  investigation  for  migrant  smuggling.  The  EMPACT  platform  for  combating  migrant 
smuggling  was  instrumental  in  making  these  arrests.  Montenegro  closely  cooperates  with 
Europol’s European Migrant Smuggling Centre (EMSC).   

As in previous years, secondary movements continued to add to migration, in particular those 
created by readmission from Bosnia and Herzegovina, but with reduced numbers. Montenegro 
readmitted  312  third-country  nationals  from  neighbouring  countries  in  2020  under  bilateral 
readmission  agreements,  of  which  278  from  Bosnia  and  Herzegovina.  Readmission  from 
Montenegro  to  neighbouring  countries  decreased  to  245  people,  mainly  to  Albania  (208). 
Only ten voluntary returns were processed in 2020 (from 41 in 2019), against the backdrop of 
global travel restrictions. Seven returns were processed by the border police to neighbouring 
countries. Three returns were processed to origin countries by the International Organisation 
for  Migration  (IOM),  within  the  Assisted  Voluntary  Return  and  Reintegration  (AVRR) 
programme, supported by the EU and EU Member States. 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 for those with no right 
to stay should be developed and necessary funds should be allocated.  

The  EU-Montenegro  readmission  agreement  continued  to  be  implemented  satisfactorily, 
with  the  number  of  readmission  requests  from  EU  Member  States  and  Schengen  associated 
countries continuing to decline (212 requests for readmission of 315 people in 2020, of which 
110  requests  concerning  203  people  were  answered  positively).  In  January-March  2021, 
Montenegro received 33 requests for readmission concerning 43 persons and gave 17 positive 
answers  concerning  27  people.  The  return  rate  dropped  from  50%  in  2019  to  42%  in  2020 
reflecting the overall trend over the past years. 

Montenegro still does not have a modern system of identification and registration of migrants 
with  fingerprints,  connected  to  a  central  biometric  database.  The  border  police  cooperates 
with the European Border and Coast Guard Agency (Frontex) for the eventual establishment 
of a biometric registration system that follows the Eurodac model. Montenegro must continue 
its  efforts  to  cope  with  migratory  pressure,  by  developing  its  international  cooperation  on 
readmission,  supporting  the  successful  reintegration  of  returnees,  raising  its  capacity  to 
prosecute  migrant  smuggling  networks  and  setting  up  a  modern  migrants’  data  collection 
system. 

47 

 
 
Asylum 

Institutional set-up and legal alignment 

Montenegro’s  legal  framework  is  largely  aligned  with  the  EU  acquis.  It  was  further 
strengthened with the adoption of two by-laws to the asylum law.  Since February 2021, the 
whole asylum and migration policy is centralised in the directorate for Administrative Affairs, 
Citizenship and Foreigners of the Ministry of Interior. 

The Ministry of Interior coordinates the delivery of assistance to people under an international 
protection status. Montenegro has now 37 people under an international protection status and 
18 of them are entitled to financial assistance. The assistance package has a duration of three 
years  and  includes  financial  assistance,  access  to  health  care,  education,  employment,  free 
legal aid, language courses and psychosocial assistance.  Accommodation is provided during 
two years (with the support of the UNHCR).  

Montenegro continues to receive international support for strengthening the capacities of the 
staff  of  the  Asylum  Directorate.  The  Directorate  cooperates  with  the  European  Asylum 
Support  Office  (EASO).  An  enhanced  cooperation  within  a  roadmap,  tailor-made  for 
Montenegro and implemented by EASO, is under preparation. 

Implementation and enforcement capacity 

The possibility to lodge asylum requests was temporarily suspended in March 2020, against 
the  backdrop  of  the  COVID-19  pandemic,  but  was  restored  in  September  2020.  The 
downward trend in migration and the temporary suspension of the registrations resulted in a 
lower number of  asylum requests. Some 2,829 migrants  expressed their intention to  request 
asylum  in  2020,  thus  completing  the  first  step  of  the  asylum  procedure  (a  64%  drop  from 
2019).  However,  only  539  of  them  eventually  lodged  an  asylum  request  (a  72%  drop  from 
2019),  of  which  7%  were  women  and  6%  were  children,  while  the  other  applicants  left  the 
country  before  the  second  step.  Moroccan  nationals,  followed  by  Algerian,  Iranian  and 
Afghan  nationals,  made  most  of  the  requests  lodged.  However,  after  lodging  their  asylum 
request, most of the applicants also left the country. Some 43 interviews were conducted and 
eight  asylum  seekers,  all  of  whom  were  nationals  of  Iran,  received  refugee  status  in  2020, 
including one  women and one child. They  all benefit from  an integration plan. Nine appeal 
claims  were  lodged  at  the  administrative  court  in  2020.  Until  22  August  2021,  187  asylum 
requests were lodged, 41 interviews were conducted, and 10 asylum status were granted.  

Since August 2020, the registration of people intending to seek asylum has been conducted in 
the Božaj transit centre only, near the border with Albania, although the asylum law allows for 
declaration of intention at any police station or at the border. Legal counselling provided by 
NGOs is available to asylum seekers. Interpretation is available upon request in Farsi, Arabic, 
Turkish and Russian languages, while the Asylum Directorate has a permanent interpreter for 
Arabic, Berber, French and English.  

Despite the small number of people actively pursuing their asylum claim until the end of the 
procedure,  delays  continue  to  hamper  the  refugee  status  determination  process.  The  regular 
six-months  deadline  is  usually  exceeded  and  the  decisions  are  delivered  either  under  the 
exceptional deadline of 6 to 21 months, or even after this exceptional deadline.  Montenegro 
should further strengthen its refugee status determination capacity and issue decisions within 
the  regular  deadline  and,  in  any  case,  never  beyond  the  exceptional  deadline  of  21  months. 
Since  the  beginning  of  2019,  the  Administrative  Court  has  annulled  19  negative  decisions 
delivered  by  the  Asylum  Directorate,  that  had  all  been  made  on  the  basis  of  the  safe  third 
country  concept.  The  understanding  and  use  of  key  legal  concepts  such  as  the  safe  third 
country need to be improved.  

48 

 
 
A total of 2,702 people were accommodated in the country’s reception centres in 2020 (a 65% 
drop  from  2019),  including  397  women  and  411  children  (of  which  nine  non-accompanied 
children).  In most cases, they stayed for a couple of days in  the centres. The new container 
settlement opened in Božaj in July 2020 with EU financial support, providing 60 beds, and the 
reduction in the overall number of asylum seekers in 2020 allowed the authorities to close the 
centre  in  Konik,  where  hosting  standards  were  not  at  the  required  level,  unlike  in  the  other 
centres. The Božaj centre is however not equipped for long stays, particularly for vulnerable 
persons, due to its remote location and container structure. The total reception capacity stands 
now at 164 beds for asylum seekers. The authorities continued to work on long-term projects 
to  further  increase  the  reception  capacity,  but  the  construction  of  a  fully-fledged  permanent 
building  in  Božaj  has  not  started  yet.  The  Asylum  Directorates  employs  32  people  at  the 
centres  in  Božaj  and  Spuz,  15  more  are  yet  to  be  recruited.  Efforts  aimed  at  expanding  the 
overall reception capacity should be pursued to anticipate possible increased influx of asylum 
seekers after the pandemic. 

In the centres, foreigners seeking international protection can access psycho-social assistance, 
health care, legal support, COVID-19 related information and assistance. These activities are 
largely supported by international Donors’ assistance. Montenegro should further improve the 
provision  of medical  assistance in  the centres and establish an integrated service system for 
asylum  seekers,  to  reduce  its  reliance  on  Donors’  assistance.  The  integration  measures  for 
people under international protection should be further strengthened.  

Visa policy 

Montenegro’s  visa  policy  is  still  not  fully  aligned  with  the  EU’s  list  of  countries  whose 
nationals require a visa to the EU. Nationals from Armenia, Kazakhstan, Russia, Azerbaijan, 
Belarus, Cuba, Ecuador, Turkey, Qatar and Kosovo continued to be exempted from short-stay 
visa  requirements.  For  some  nationalities,  exemptions  are  valid  during  fixed  periods  in  the 
summer, for tourism purposes; for others they are valid any time of the year. The impact of 
the exemptions is closely monitored, and no impact on migratory flows into the country has 
been  observed  so  far.  Montenegro  should  nevertheless  ensure  further  alignment  of  its  visa 
policy with the EU list of visa-required third countries before accession to the EU. 

Under  the  post-visa  liberalisation  process,  Montenegro  continued  to  implement  relevant 
measures  to  prevent  the  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 continued to decrease, with 140 applications lodged 
in 2020 compared with 230 applications lodged in 2019.  
The  European  Commission’s  2021  fourth  report3  under  the  Visa  Suspension  Mechanism  of 
2021  concludes  that  Montenegro  continues  to  meet  the  visa  liberalisation  benchmarks. 
However,  the  report  notes  that,  in  order  to  ensure  a  well-managed  migration  system  and 
security environment, Montenegro needs: i) to tailor the information campaigns on the visa-
free regime to relevant migrant profiles, including as regards vulnerable groups, overstays and 
unfounded  asylum  applications;  ii)  to  continue  making  progress  in  the  prevention  and  fight 
against  organised  crime,  corruption  and  terrorism;  iii)  to  ensure  full  alignment  with  the  EU 
visa  policy,  and  iv)  to  effectively  phase-out  the  investor  citizenship  scheme  as  soon  as 
possible. 

3 Fourth report on the EU visa-free regime (europa.eu) 

49 

 
 
                                                           
Schengen and external borders 

Institutional set-up and legal alignment 

The implementation of Montenegro’s Status Agreement with the European Union intensified 
the  cooperation  between  Montenegro  and  the  European  Border  and  Coast  Guard  Agency 
(Frontex)  and  created  new  opportunities  for  the  transfer  of  EU  good  practices.  A  first  joint 
operation,  launched  under  the  Agreement  in  July  2020,  deployed  teams  of  the  European 
Border and Coast Guard standing corps to Debeli Brijeg, a border crossing point (BCP) with 
Croatia.  In  October  2020,  a  joint  maritime  operation  aimed  at  strengthening  blue  borders’ 
surveillance  was  launched,  the  first  fully-fledged  maritime  joint  operation  implemented  by 
Frontex  in  a  non-EU  country.  Montenegro  currently  has  only  one  Frontex  National  Focal 
Point despite the increased level of cooperation.  

Montenegro’s situational awareness and reaction capacity have substantially improved since 
the  establishment  of  its  National  Coordination  Centre  (NCC)  in  2019.  The  NCC,  which  is 
Frontex’  main  cooperation  partner  within  the  Status  Agreement,  follows  in  real-time  live 
pictures delivered from one observation aircraft and one helicopter, provided under the Status 
Agreement, and from nine BCPs (while four additional BCPs are  yet  to be connected). The 
NCC  alerts  the  Regional  Coordination  Centres  when  an  intervention  is  needed.  However, 
some equipment and connections to other national surveillance systems, which would ensure 
a full coverage of critical areas, are still missing. Two representatives of NCC are deployed to 
Frontex Headquarters in Warsaw as a part of the joint operations.  

The integrated border management strategy (IBM) 2020-2024 is in line with the EU acquis. 
However, there is no earmarked budget allocation for the implementation the strategy, which 
relies  largely  on  expected  Donors’  support.  Montenegro  continued  to  upgrade  its  border 
management equipment, in accordance with its Schengen Action Plan, with the support of the 
EU and other Donors. However, there is no monitoring tool to follow the level of fulfilment 
of the Schengen Action Plan relating to equipment and to prioritise the purchases.  

Montenegro has yet to establish an operational Advance Passenger Information System.  

Implementation and enforcement capacity 

The number of posts in the border police is 1,364, of which 1,321 are recruited, for a border 
of 840 kilometres. The gap between existing staff and staff needed, according to the Schengen 
Action  Plan,  is  650  border  police  officers,  which  poses  critical  challenges  in  the  field. 
Prevention and reaction capacities are insufficient even in strategic areas, where the borders 
are  the  most  under  pressure.  There  is  no  human  resources  and  capability  development 
planning. To compensate the lack of staff, the army is  occasionally deployed to  support the 
border police, in case of migratory pressure. The insufficient autonomy of the border police in 
criminal investigations hampers the development of its analytical  capacities and intelligence 
on smuggling networks. 

Out  of  the  3,149  migrants  registered  in  2020,  643  were  apprehended  at  the  border.  Some 
3,858  migrants  were  prevented  from  illegally  crossing  the  state  border  into  Montenegro. 
Some 99 forged documents were seized. In the first three months of 2021, 417 migrants were 
prevented from illegally crossing the border and five forged documents were detected. 

Bilateral  cooperation  with  neighbouring  countries  on  border  management  continued  to  be 
good, despite the drastic reduction of joint border patrolling in the context of the pandemic. 
Only 723 joint patrols were conducted in 2020, including 570 joint patrols on the border with 
Albania. In October 2020, a new six-lane joint BCP was opened in Vraćenovići-Deleusa, at 
the border with Bosnia and Herzegovina, the second BCP of that size in the country. A joint 

50 

 
 
border traffic agreement with Bosnia and Herzegovina was signed in December 2020. While 
the demolition plan of 29 cross-border alternative roads with Serbia, agreed in March 2019, is 
completed  on  the  Montenegrin  side,  15  other  alternative  roads  to  Serbia  and  13  roads  to 
Bosnia and Herzegovina still need to be demolished.  

Montenegro continued to cooperate actively  with  Europol  and  Interpol  on countering cross-
border  criminal  activities,  and  to  participate  in  Frontex’  Western  Balkans  Risk  Analysis 
Network. Montenegro needs to continue to strengthen its capacity in border management and 
address  the  critical  gaps  in  human  resources  and  equipment.  Border  surveillance  should  be 
further strengthened in close cooperation with Frontex.  

Judicial cooperation in civil and criminal matters  

Montenegro  continued  to  align  its  legal  framework  in  the  area  of  judicial  cooperation  in 
criminal matters. The agreement on extradition between Montenegro and the United Kingdom 
and Northern Ireland and the protocol amending the Additional Protocol to the Convention on 
the  Transfer  of  Sentenced  Persons  were  ratified  and  entered  into  force  in  July  2020.  In  the 
area of judicial cooperation in civil matters, Montenegro has taken initial steps to become a 
party to the 2007 Protocol to the Hague Convention on International recovery of child support 
and  other  forms  of  family  maintenance,  and  to  the  2000  Hague  Convention  on  the 
International protection of adults.  

Montenegro’s cooperation with Eurojust continued to increase. Twenty-four cases involving 
Montenegro  were  opened  in  Eurojust  in  2020  (a  57%  increase  compared  with  2019), 
including  12  cases  launched  by  Montenegro,  mainly  relating  to  organised  crime,  money 
laundering  and  drug  trafficking.  A  dense  exchange  of  judicial  information  with  Member 
States  took  place through Eurojust.  There are two Eurojust contact  points  in  the country, of 
which one is the national correspondent for terrorism matters. No joint investigative team was 
established.  In  2021,  Montenegro  was  involved  in  three  cases.  Cooperation  should  be 
established  with  the  European  Public  Prosecutor’s  Office  (EPPO),  which  started  its 
operational  activities on 1 June 2021.Against the backdrop of the COVID-19 pandemic, the 
volume of judicial cooperation fell by 22% in 2020 compared with 2019. Some 784 cases of 
mutual legal assistance in criminal matters were processed and 671 cases in civil matters. The 
main partners continued to be the Western Balkans and the EU Member States.   

51 

 
 
2.3. ECONOMIC CRITERIA 

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 each year. 

2.3.1. The existence of a functioning market economy 

Montenegro  has  made  some  progress  and  is  moderately  prepared  in  developing  a 
functioning  market  economy.  The  country  experienced  a  sharp  recession  in  2020  as  the 
COVID-19  pandemic  took  a  heavy  toll  on  its  tourism-dependent  economy,  with  large 
negative spillover effects on private consumption, investment, employment, trade and public 
finances.  To  support  citizens  and  the  economy,  authorities  implemented  several  economic 
support packages, including wage subsidies, loan moratoria and temporary tax reductions for 
businesses and citizens. These measures were, to a large extent, well targeted, transparent and 
of  a  temporary  character,  avoiding  market  distortions  while  preventing  an  increase  in  the 
number  of  bankruptcies.  In  spite  of  some  delays  due  to  the  pandemic,  the  government 
continued  implementing  some  of  the  envisaged  reforms  of  the  business  environment.  An 
orderly  government  transition  in  the  middle  of  the  crisis  preserved  the  effectiveness  of  the 
COVID-19  policy  response.  The  new  government  managed  to  mitigate  fiscal  risks  by 

52 

 
 
 
accumulating  sizeable  fiscal  buffers  to  cover  2021  financing  needs,  including  for  additional 
COVID-19 support programmes. The financial sector remained stable during the crisis, as a 
result  of  its  strong  pre-crisis  position  and  the  support  measures  implemented  by  the 
authorities,  but  the  delayed  impact  of  the  crisis  on  bank  balance  sheets  calls  for  close 
monitoring of the financial institutions. 

Last year’s recommendations were addressed to a large extent. In the coming year, in order to 
improve the functioning of the market economy, Montenegro should in particular: 

  once  the  recovery  is  entrenched,  implement  a  medium-term  fiscal  consolidation  plan 

foreseeing a meaningful reduction of the budget deficit and the public debt ratio; 

  strengthen fiscal governance by setting up an independent body for fiscal oversight; 

  support the economy by reducing public sector arrears and deadlines for VAT return; 

  further reduce institutional and legal obstacles to swift and effective NPL resolution and 
ensure sound credit risk management, a transparent display of asset quality and adequate 
provisioning; 

  develop and implement concrete actions and measures to reduce the informal economy. 

Economic governance 

One of the first measures of the new government was to reaffirm its commitment to the 
EU  path.  Combating  the  COVID-19  pandemic  while  finding  a  balance  between  stabilizing 
public finances  and supporting  economic  activity quickly  became top  priorities. Despite the 
change  of  government,  there  has  been  a  continuity  in  the  policy  response  to  the  crisis.  The 
governments implemented five socioeconomic support packages totalling some 6% of GDP in 
2020  and  additional  7%  of  GDP  in  2021  (including  loan  support  programmes).  Measures 
combine direct  wage subsidies, favourable loan programmes, tax deferrals and other actions 
targeting the most vulnerable sectors. Montenegro has also received rapid emergency support 
from various international institutions, including EUR 60 million Macro-Financial Assistance 
from the EU, whose final instalment was disbursed on 1 June 2021, after Montenegro fulfilled 
all policy conditions. The new government’s Economic and Reform Programme (2021-2023), 
adopted  with  a  delay  in  April  2021,  projects  a  rather  ambitious  fiscal  consolidation  path 
relying on a quick recovery of the economy, a fall in public investment spending and a tight 
control of current expenditure. 

Macroeconomic stability 

After recording a relatively fast pace of growth in the previous five years, Montenegro 
suffered one of the deepest recessions in Europe in 2020. The COVID-19 outbreak had an 
overwhelming  impact  on  Montenegro’s  tourism-dependent  economy  as  this  sector  accounts 
for  more  than  20%  of  GDP,  while  74%  of  all  jobs  are  in  the  service  sector.  Therefore,  the 
collapse  in  foreign  tourist  arrivals  in  2020  contributed  to  a  massive  contraction  of  the 
economy  by  15.2%.  The  negative  performance  of  net  export  was  the  key  trigger  of  the 
recession, but not the only one. Social distancing measures and the closing of retail shops and 
catering  services  depressed  private  consumption  too,  while  weak  business  confidence  and  a 
high  degree  of  uncertainty  constrained  investments.  Rising  government  expenditures  could 
only partially cushion the deep recession. Overall, rapid growth in the pre-crisis years brought 
Montenegro’s  per-capita  income  in  purchasing  power  standards  from  41%  of  the  EU-27 
average in 2014 to 50% in 2019, to fall back to 46% in 2020 due to the COVID-19 crisis. 

53 

 
 
 
The economy still suffered from the restrictions to contain the epidemiological situation in the 
first  quarter  of  2021,  with  real  GDP 
contracting  by  6.4%  y-o-y.  Strong 
base effects, the easing of containment 
measures and some pick-up in tourism 
activity  turned  annual  growth  positive 
in  the  second  quarter,  as  retail  sales 
surged  by  19.6%  y-o-y,  exports  rose 
by  53.4%  y-o-y,  while  the  rise  in 
domestic  demand  also  fuelled  a  sharp 
(28.6% y-o-y) increase in imports. 

The  collapse  in  tourism  revenue 
further  aggravated  Montenegro’s  chronic  external  imbalances.  The  dramatic  fall  in 
services  exports, in particular tourism, 
traditional 
affected  Montenegro’s 
surplus on the services account, which 
shrank  to  4%  of  GDP  in  2020,  down 
from  20%  of  GDP  a  year  earlier. 
Despite  a  significant  contraction  of 
goods  imports,  a  small  surplus  of  the 
primary balance and relatively resilient 
remittances,  this  pushed  the  current 
account  deficit 
to  26%  of  GDP, 
compared  to  an  average  of  14.9%  of 
GDP  in  the  previous  five  years.  The 
current account deficit eased somewhat to 19.5% of GDP in the four quarters to June 2021, 
driven by a revival of  services exports and remittances, also reflecting statistical base effects. 
However, the recovery in domestic demand also boosted imports, widening the merchandise 
trade deficit and preventing a more pronounced reduction of the current account deficit.  

INet  FDI  inflows  remained  high  in  2020  thanks  to  a  reduction  of  capital  outflows. 
Overall,  net  FDI  totalled  11.2%  of  GDP  in  2020  compared  to  10.1%  on  average  in  the 
previous five years, thus covering 42.9% of the current account deficit. The rest of the deficit 
was financed through reserves and new debt issuance. However, the increase in net FDI was 
driven by a substantial drop in FDI outflows in 2020, after the temporary surge in outflows in 
2019 due to the buyback of the electric power company’s shares from a foreign investor. Net 
FDI eased to 9.4% of GDP in the four quarters to June 2021. The reimbursement of maturing 
sovereign debt using government deposits reduced the stock of international foreign exchange 
reserves  from  the  equivalent  of  8.2  months  of  imports  at  the  end  of  2020,  to  6.8%  in  June 
2021. 

The demand shock resulting from the pandemic, along with falling oil prices, resulted in 
negative  inflation  for  most  of  2020.  The  use  of  the  euro  as  legal  tender  means  that  the 
Central  Bank  of  Montenegro  cannot  influence  the  money  supply,  which  is  determined  by 
flows of the balance of payments. Inflation averaged 1.5% in the period 2015-2019. In 2020, 
food was the main inflationary driver; however, transport (and notably fuel prices) worked in 
the  opposite  direction.  As  a  result,  prices  declined  by  0.8%  on  average  in  2020.  As  the 
economy showed some signs of recovery  and global  commodity prices started increasing in 
early 2021, inflation turned positive. In June 2021, consumer prices grew by 2.8% y-o-y. 

54 

-18-15-12-9-6-303691215201520162017201820192020Graph 1: Montenegro -Real GDP growthand contributionsPriv. cons.Gov. cons.GFCFStocksNet exportsreal GDP growthSource: Macrobond, own calculations% y-o-y-40-30-20-100102020162017201820192020Graph 2: Montenegro -Current account selected components and FDIPersonal TransfersGoods and services trade balanceCurrent account balanceNet FDI% of GDPSource: IMFand Central Bank of Montenegro  
 
The country’s fiscal position, which had deteriorated already before the COVID-19 due 
to  large  debt-financed  infrastructure  projects,  suffered  a  further  blow  from  the 
pandemic-induced crisis. Since the beginning of the construction of the first section of the 
Bar-Boljare  highway  in  2015,  budget  deficits  have  remained  high,  averaging  4.6%  of  GDP 
in  2015-19.  The  sharp 
annually 
contraction of the economy, combined 
with government discretionary support 
measures,  produced  a  large  budget 
deficit  of  11%  of  GDP  in  2020.  The 
strongest  negative  impact  (-13.1%  y-
o-y) came on the revenue side, driven 
by  the  loss  of  the  tourism  season. 
Expenditure rose by 4.8% y-o-y due to 
fiscal support measures in spite of the 
government’s  efforts 
reallocate 
spending  from  the  capital  budget, 
which  was  cut  by  one  third,  into  healthcare.  The  Ministry  of  Finance  and  Social  Welfare 
approved  temporary  financing  for  the  first  six  months  of  2021,  as  the  adoption  of  the  state 
budget was delayed. The recovery of economic activity and the introduction in January 2021 
of electronic cash registers boosted tax revenues, contributing to a significant reduction of the 
budget deficit over the year. In the first seven months of 2021, the central government deficit 
amounted to 2.6% of the projected GDP, compared to 6.5% in the same period a year before. 
In  June  2021,  the  central  government  debt  declined  to  89%  of  GDP,  including  government 
deposits estimated at 9.4% of GDP. 

to 

The large budget deficit and the contraction of GDP in 2020 led to a substantial increase 
in the debt ratio. Overall, public debt  surged to a  record-high 105% of  GDP at  the end of 
2020.  To  meet  increased  financing  needs,  the  previous  government  secured  funds  from  the 
IMF, the EU, the World Bank and other international financial institutions, totalling some 6% 
of  GDP.  In  December  2020,  the  new  government  borrowed  EUR  750  million  thorough  a 
Eurobond at favourable terms to build buffers and cover financing needs in 2021. In March 
2021,  the  government  repaid  a  maturing  bond  of  EUR  228  million  ,  still  leaving  EUR  584 
million in the cash reserve (or around 12.7% of estimated GDP). 

Montenegro  has  been  confronted with  a  major  crisis  under  exceptional  circumstances. 
Its  small  tourism-dependent  economy  faced  a  major  shock  while  its  already  weak  public 
finances  constrained  the  available  fiscal  space.  Yet,  the  authorities’  policy  response  to  the 
crisis was timely and well targeted, adjusting its coverage as the situation evolved. In spite of 
an historical change of government in the middle of the crisis, the new administration avoided 
radical changes and adopted rather prudent economic and fiscal policies. 

Functioning of product markets 

Business environment 

The COVID-19 palliative measures managed to contain the number of bankruptcies so 
far. The number of bankruptcies totalled 785 cases in 2020, practically the same number as in 
2019,  reflecting  to  some  extent  the  efficacy  of  the  policy  response  to  maintain  companies 
alive during the recession. However, the  government support that cushioned businesses will 
eventually  have  to  be  withdrawn.  Meanwhile,  the  number  of  new  registered  businesses  in 
2020  declined  by  23%  over  the  year,  as  pandemic-related  uncertainties  delayed  new 
investment decisions in spite of further facilitation for registering companies. Thus, electronic 

55 

020406080100120-12-8-404201520162017201820192020Graph 3: Montenegro -Fiscal developmentsPrimary balance (lhs)Interest (lhs)GG balance (lhs)Public Debt (rhs)Source: Nationalsources% ofGDP 
 
registration  of  companies  was  introduced  in  December  2020  for  single-member  limited 
liability companies. 

Further progress was recorded in the reduction of the tax burden. The number of local 
taxes and fees  has  been  cut.  In  addition,  a registry  of  fiscal  and para-fiscal  charges  on state 
and local level was established in March 2021, facilitating business processes and increasing 
transparency.  The  new  government  decided  to  discontinue  the  programme  of  granting 
Montenegrin  citizenship  in  exchange  for  investment  in  the  country  due  to  its  poor  results. 
Overall,  the  number  of  active  e-services  on  the  government’s  electronic  portal  increased  to 
575 in 2020, although most of them remain informational, and electronic payments under e-
government services remain underdeveloped. The first electronic public procurement system 
was launched in January 2021. Montenegro’s alternative dispute resolution mechanisms relies 
on the bailiff system  for enforcement of debt  claims. However, the system  for collection of 
claims needs to be reinforced, as indebtedness of local businesses remain a major challenge. 
In  March  2021,  there  were  more  than  19,000  frozen  bank  accounts  (almost  one  third  of 
registered businesses), totalling claims worth EUR 809 million (or 17.6% of GDP). The issue 
of  informality  in  Montenegro  mainly  concerns  informal  wages  and  some  informal  labour, 
rather than unregistered firms. As a result, a significant proportion of the population is reliant 
on the informal economy, suffering disproportionally during the economic downturn, as they 
did  not  qualify  for  wage  subsidies  like  in  the  formal  economy.  So  far,  government’s  fight 
against  informality  relies  primarily  on  the  control  measures,  a  more  efficient  work  of  the 
inspection services and the deployment, in 2021, of new systems of electronic fiscal invoices 
and for electronic management and security printing of excise stamps. 

State influence on product markets 

State influence on the economy remains rather limited, also in terms of price formation. 
Moreover, the Agency for Protection of Competition is playing a more active role to eradicate 
undue  State  aid.  The  bankrupt  state-owned  Montenegro  Airlines  has  been  the  main 
beneficiary of state aid for several  years. In December 2019, the government adopted a law 
granting Montenegro Airlines EUR 155 million (around 3% of GDP) over the next six years. 
However, the Agency for Protection of Competition ruled against this decision in September 
2020. In April 2021, a pre-bankruptcy procedure was introduced at the request of the revenue 
and customs administration, putting an end to a long trajectory of state support to the national 
airline.  The  Agency  also  investigates  public  aid  granted  to  the  two  national  maritime 
companies. Since the outbreak of the COVID-19 pandemic, the government adopted a series 
of measures providing support to businesses and employees to mitigate the negative economic 
impact of the pandemic.  In order to enhance the transparency of public support granted and 
prevent  undue  state  aid,  the  government  set  up  in  November  2020  a  public  register  of 
COVID-19 related measures. 

Privatisation and restructuring 

The  privatisation  process  has  been  practically  concluded  but  the  new  government  is 
engaged  in  the  review  of  past  deals.  A  few  companies,  mainly  in  transport,  tourism  and 
utilities  remain  left  in  public  ownership.  The  privatisation  council  has  established  a 
commission  to  audit  past  privatisation  contracts.  Meanwhile,  the  new  government  has 
replaced the management at several state-owned companies. In August 2021, the government 
set up a company (named Montenegro Works) to advise and supervise the financial situation 
of  all  state-owned  enterprises  (SOEs)  and  support  the  implementation  of  reforms  aimed  at 
improving their management. After halting operations of the indebted Montenegro Airlines in 
December 2020, the government registered a new national airline, purchasing two planes and 

56 

 
 
launching the recruitment procedure for technical staff from the former national airline. The 
new  company  started  its  first  flight  on  10  June  2021.  Meanwhile,  efforts  to  attract  private 
investors  through  concessions  have  lost  momentum.  Following  the  finalisation  of  the 
prequalification tender  for a 30-year concession  of the two international  airports (Podgorica 
and  Tivat),  the  concession  process  has  been  kept  on  hold  as  the  new  government  is  yet  to 
decide whether the tender will be cancelled or continued. 

Functioning of the financial market 

Financial stability 

Montenegro's  banking  system  entered  the  crisis  in  a  strong  position  with  solid  capital 
and liquidity buffers. In 2019, before the onset of the COVID-19 pandemic, the system-wide 
ratios for regulatory capital was 19.8%, return on equity 9.0%, return on assets 1.2% and non-
performing loans (NPLs) 4.7%. This situation, coupled with regulatory measures, allowed the 
banking  sector to  absorb the crisis  impact  so far. The Central  Bank of Montenegro  adopted 
nine packages of temporary measures, including several loan moratoria, reduction in reserve 
requirement rates and a ban on dividends.  The capital adequacy ratio of the banking system 
remained  high,  at  18.5%  at  end-2020  and  19.2%  in  June  2021,  albeit  profitability  declined 
markedly  in  2020.  Meanwhile,  temporary  crisis  support  measures,  including  credit 
restructuring, helped containing NPLs, which rose only slightly, to 5.45% at the end of 2020 
and to 5.70% in June 2021. On 8 September 2021, the central bank presented the preliminary 
results  of  an  asset  quality  review  of  all  commercial  banks  evaluating  the  soundness  and 
quality of financial balance sheets. Overall, the COVID-19 crisis further tested the resilience 
of the financial sector. So far, key financial sector indicators have been stable. However, as 
the temporary crisis support measures expire, the number of impaired loans is set to rise due 
to  the  unprecedented  recession,  warranting  enhanced  supervision  and  policy  preparation  by 
the authorities. 

Access to finance 

Credit  growth  decelerated  in  2020  but  picked  up  again  in  early  2021.  Banks  tightened 
their criteria for approving new loans as the economic crisis worsened in 2020. Consequently, 
credit growth decelerated to 3.2% y-o-y in 2020, down from 4.5% a year before, to rebound 
by 6.8% y-o-y in June 2021. Moreover, the crisis reduced banks’ deposit stock by 3% y-o-y in 
2020,  before  it  strongly  rebounded  by  11.4%  y-o-y  in  June  2021.  The  number  of  banks 
declined from 15 to 12 as two small banks were closed in 2019 and another two banks merged 
in December 2020. As a result, the share of foreign ownership in bank’s capital totalled 85%, 
with a further 13% owned by domestic investors and 2% by the government. Overall, credit 
risks  remain  high,  resulting  in  expensive  interest  rates.  This  presents  a  major  obstacle  for 
businesses,  in  particular  small  ones.  To  alleviate  the  situation,  the  state-run  Investment  and 
Development  Fund established several  credit lines with the support of EU funds, to provide 
loans at subsidised interest rates. 

The size of the non-bank financial sector remains marginal. The stock market’s role in the 
local economy is very small in terms of market turnover (i.e. 0.75% of GDP in 2020), while 
the assets of insurers and micro-financial institutions represent around 1.5 % of GDP each. 

Functioning of the labour market 

57 

 
 
not 

seen 

since 

The  COVID-19  pandemic  erased  five  years  of  labour  market  improvement.  Conditions 
deteriorated  quickly  despite  measures  adopted  by  the  government  to  help  companies  retain 
jobs. In 2020, the unemployment rate (population aged 15-64) increased by 3 pps. to 18.4%, a 
level 
2014. 
Furthermore,  the  labour  force  shrank 
by  7%  y-o-y,  as  20,000  workers 
dropped  out,  discouraged  by 
the 
severity  of  the  crisis  and  the  lack  of 
opportunities  in  a  confined  economy. 
The COVID-19 crisis only added to an 
already  poor  situation.  Active  labour 
market  policies  appear  insufficient  to 
increase  markedly 
employment 
opportunities  for  jobseekers.  As  a 
result, 
unemployment 
remains  high  and  chronic,  concerning  74.7%  of  all  unemployed  in  2020.  Skills  mismatches 
remain  another  significant  challenge,  in  particular  for  persons  with  vocational  education 
training or higher education. Montenegro’s tax wedge remains relatively high, especially for 
low-wage  workers,  contributing  to  labour  informality.  Moreover,  the  structure  of  the  social 
benefits system discourage women from re-entering the labour market, as the financial return 
required to work (i.e. reservation wage) tends to increase with the number of children. This is 
also reflected in their much higher inactivity and lower employment rates compared to men. 
Thus, in 2020, the female inactivity rate was 45.3% compared to 31.7% for men, while their 
unemployment rate was only 1 pp. higher than men’s (17.8%). 

long-term 

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

Montenegro  has  made  some  progress  and  is  moderately  prepared  to  cope  with  competitive 
pressure and market forces within the EU. The COVID-19 pandemic demonstrated that a lack of 
diversification  makes  Montenegro’s  tourism-dependent  economy  highly  vulnerable  to  shocks. 
Some  efforts  have  been  made  to  improve  innovation  capacities  and  introduce  EU  standards  at 
local  companies  thanks to public  grants, but these remain  modest compared to  the scale of the 
challenge. The quality of the educational system and curricula preferences appear inadequate to 
raise  human  capital  and  to  address  skill  mismatches.  Modern  telecommunication  and  energy 
infrastructure  is  being  deployed  rapidly,  but  there  is  a  substantial  deficit  in  transport 
infrastructure,  hindering  the  integration  with  regional  and  EU  markets.  In  addition,  the  low 
sophistication  of  domestic  products,  the  small  size  of  local  companies  and  low  level  of 
participation  in  external  markets  represent  major  obstacles  for  increasing  competitiveness  and 
diversifying the economy. 

As  some  of  the  2020  recommendations  have  not  been  fully  implemented,  in  the  coming  year 
Montenegro should in particular: 

  improve  dual  VET  and  tertiary  education  programmes  in  close  cooperation  with  business 

associations; 

  develop transport infrastructure without endangering fiscal sustainability; 

  facilitate and promote SMEs exports. 

58 

4045505560657001020302014201520162017201820192020Graph 4: Montenegro -Labour market trends(15-64 age group)Unemployment rate (lhs)Participation rate (rhs)Employment rate (rhs)Source: Monstat 
 
 
Education and innovation 

Investment on research and development (R&D) continues to increase, but the country 
remains a modest innovator. While the government support for R&D has continued to rise 
steadily since 2017, the modest level of investment limits the ability of enterprises to innovate 
and  develop  new  products,  but  also  for  absorbing  new  technologies  from  abroad.  The  new 
science  and  technology  park  (STP)  in  Podgorica  is  still  under  construction,  while  the  STP 
Tehnopolis  in  Nikšić  is  more  advanced,  with  continuous  technological  upgrade  and  skills 
development. The country continued to participate in EU research programmes. The adoption 
in July 2020  of the laws on innovation  activities and incentives  for research and innovation 
development  introduced  fiscal  incentives  for  developing  the  digital  economy  and  the 
functioning of the national innovation system. Meanwhile, important secondary regulation to 
define the eligibility of the R&D tax incentives is being developed. 

Montenegro’s education system is facing numerous challenges. Schoolchildren lag behind 
international  peers  according  to  numerous  ratings.  The  COVID-19  pandemic  delayed 
remedial actions for improving the quality of education based on results from the 2018 PISA 
tests. Skills mismatch remains a persistent challenge for VET and higher education. Tertiary 
educational  attainment  remains  lower  than  the  EU  average,  and  there  is  an  oversupply  of 
business  and  humanities  graduates,  contrasting  with  a  shortage  of  medical,  technology,  and 
mathematics  graduates.  The  result  is  a  chronic  occupational  mismatch  in  relation  to  labour 
market  opportunities.  A  more  intense  participation  of  business  associations  in  the 
development  of  dual  VET  programmes  could  help  reduce  this  gap.  Overall,  the  COVID-19 
pandemic contributed to a rapid development of the digitalisation of the education system but 
not of its quality. 

Physical capital and quality of infrastructure 

The  COVID-19  pandemic  and  the  very  late  adoption  of  the  2021  budget  delayed 
investment  in  infrastructure  and  equipment.  In  2020,  construction  activity  contracted  by 
5.6%,  and  gross  fixed  capital  formation  by  much  deeper  12.3%.  After  a  two-year  delay, 
completion of the first section of the Bar-Boljare highway is planned in 2021. Construction of 
the  next  section  depends  on  the  outcome  of  feasibility  studies  and  the  setup  of  a  viable 
financing scheme. Railway upgrading continues slowly, with the repair of some bridges and 
track sections in 2020. Fast and reliable broadband networks are crucial for the digitalisation 
of  the  economy.  Overall,  around  93%  of  households  have  access  to  at  least  2  Mbit/s 
connection, 80% have access to 30 Mbit/s, and only 30% use ultrafast (100 Mbit/s) service. 
Although 98.6% of local enterprises use computers, only half of their employees have internet 
access.  In  May  2021,  one  local  telecom  company  started  5G  network  testing  in  real 
conditions. Several projects of electricity transmission and interconnection with neighbouring 
countries  are  underway.  The  reconstruction  of  the  Pljevlja  thermal  power  plant  to  comply 
with  modern  environmental  standards  was  delayed.  The  Energy  Community  launched  a 
procedure  against  Montenegro  after  the  thermal  plant  exceeded  the  agreed  number  of 
operating hours. Meanwhile, renewable sources of electricity production are being diversified 
with several wind, solar and hydropower projects underway. Offshore oil and gas exploration 
drilling started in March 2021. 

Sectoral and enterprise structure 

The structure of the economy remains broadly unchanged despite the crisis. The share of 
employment in services remained practically unchanged during the pandemic, accounting for 
74.1% of total employment in 2020. By subsectors, some marginal decline (by 1 pp) could be 

59 

 
 
observed  in  retail  trade,  accommodation  and  food  services,  the  parts  more  affected  by  the 
crisis. Other sectors, such as information and communication, expanded their activity during 
the pandemic; however, this increase was barely reflected in new jobs. The largest growth in 
2020  was  related  to  professional,  scientific  and  technical  activities,  reaching  6%  of  total 
employment  in  2020,  compared  to  a  modest  2%  historical  average.  The  development  of 
tourism, energy and transport infrastructure in recent years has been reflected in a continuous 
growth in  construction, from 6.6% in  2015 to  9.9% of total  employment  in  2019, falling to 
8.4%  in  2020  as  many  works  were  delayed  due  to  the  pandemic.  Agriculture  and  industry 
account  for 7.5% and 18.4% of jobs  respectively in  2020, with  little change over time. The 
small  size of local  companies limits  output performance. Practically, 99% of companies  are 
small  or medium sized, of which 92% are micro enterprises. Furthermore, only 7% of local 
firms are involved in exports. 

Economic integration with the EU and price competitiveness 

The  COVID-19  pandemic  slowed  the  otherwise  strong  trade  integration  with  the  EU. 
During 2020, Montenegro’s foreign trade contracted by 18.1% compared to the previous year, 
while  bilateral  trade  with  the  EU  saw  a  similar  contraction  of  around  16%  y-o-y.  The  EU 
remains Montenegro`s main foreign partner, accounting for 44% of its total trade (i.e. 38.5% 
of total exports and 45.1% of total imports of goods). This compares to 31.2% of total trade 
with CEFTA countries. The EU also remains the main source of FDI inflows for Montenegro, 
even if its share decreased markedly to 27.0% of total FDI inflows in 2020, as compared to 
42.1%  in  2019.  The  low  level  of  processing  of  local  products  and  the  modest  size  of 
businesses  hinder  export  competitiveness.  Montenegro’s  largest  exports  concern  low  value-
added  products  in  bulk,  namely  aluminium,  bauxite  and  electric  current.  These  three  items 
alone made up 42% of total merchandise exports in 2020.  

The COVID-19 crisis had a negative impact on Montenegro`s trade openness ratio. The 
collapse of the 2020 summer tourist season sunk services exports to 4% of GDP, compared to 
20% of GDP a year earlier. Moreover, merchandise trade also fell sharply, with exports and 
imports  of  goods  declining  by  12.2%  and  19.0%  y-o-y,  respectively.  As  a  result,  the  total 
exchange of goods and services plunged from 108.5% of GDP in 2019 to 86.3% in 2020. To 
succeed  in  EU  or  regional  markets,  and  considering  the  rigidity  of  its  monetary  regime, 
Montenegro would need to improve substantially the competitiveness of its products, services 
and companies. 

2.4. PUBLIC PROCUREMENT, STATISTICS; FINANCIAL CONTROL  

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 

60 

0255075201220132014201520162017201820192020Graph 5a: Montenegro -Exports of goodsEUCEFTAOtherSource: WiiW% ofGDP0255075201220132014201520162017201820192020Graph 5b: Montenegro -Imports of goodsEUCEFTAOtherSource: WiiW% ofGDP 
 
 
equal treatment.  

Montenegro  is  moderately  prepared  on  public  procurement.  Overall,  good  progress  was 
achieved  in  2020,  with  improvements  in  the  remedy  system,  adoption  of  the  secondary 
legislation to  the laws on public-private partnerships  and public procurement and regulation 
of procurement rules in the area of defence and security. Last  year’s recommendations were 
met to a substantial degree. Furthermore, the ongoing implementation of the new, electronic 
public  procurement  system  from  January  2021  is  a  big  step  forward  on  transparency  and 
efficiency of the public procurement processes.  

In the coming year, Montenegro should: 

  fully implement the electronic public procurement system; 

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

operate Airports of Montenegro. 

Institutional set-up and legal alignment 

The  legal  framework  on  public  procurement  is  well  aligned  with  the  EU  acquis.  The  new 
laws on public procurement and on public-private partnership entered into force in July 2020. 
Secondary legislation to  both  laws (some 30 different  legal  acts) was adopted as scheduled, 
despite  COVID-19  crisis,  including  on  defence  and  security  procurement.  Implementing 
legislation on simple procurement (low value procurement, below the thresholds regulated by 
the procurement law) was also  adopted, repealing  around 650 individual acts  of contracting 
authorities governing that area before. The 2019 action plan for reforms in this area has been 
completed.  

The electronic public procurement system has  started operating in  Montenegro in  January 
2021. The new electronic system introduces new quality and transparency in the Montenegrin 
public procurement system. It also constitutes an important step in improving the regulatory 
environment and in supporting efforts aimed at reducing the informal economy and corruption 
in  the  country.  The  migration  of  public  procurement  procedures  from  paper-based 
procurement to the new system should occur gradually throughout 2021. By June 2021, there 
were  close  to  2000  registered  users  of  the  system  (contracting  authorities  and  economic 
operators).  

A  tender  for  the  concession  to  operate  Airports  of  Montenegro,  launched  in  October  2019, 
was suspended in 2020. The process, once reactivated, would be 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  rules  would  be  essential  for  Montenegro  in  line  with  the 
requirements of this negotiating chapter. 

Implementation and enforcement capacity  

Montenegro’s public procurement market corresponded to 13.1% of GDP in 2020 and the 
value of all public procurement procedures amounted to some EUR 545 million. 

On  the  monitoring  of  contract  award  and  implementation,  the  Public  Procurement 
Inspectorate  has  systematized  and  filled  vacancies  for  all  eight  inspectors  and  the  Chief 
Inspector.  The  Inspectorate  executed  251  controls,  the  number  declining  in  comparison  to 
2019 due to COVID-19 pandemic. Most controls related to contract conclusion and execution 
phases.  

The capacity to manage public procurement processes continued to improve, although the 
high number of local contracting authorities remains not conducive for efficiency. Centralised 

61 

 
 
purchasing  has  become  more  widely  used  for  certain  standard  procurements,  but  contract 
management and ex-post evaluation of procurement processes are still rare. Lowest price as 
the  only  award  criterion  was  applied  in  61%  of  all  procedures  in  2020.  It  should  be 
highlighted  that  the  new  procurement  regulations,  which  apply  from  July  2020,  impose  the 
application of the most economically advantageous criterion as a default option. 

Directorate for Public Procurement Policy in  the Ministry of Finance and Social Welfare 
employs  currently  19  people  (out  of  21  envisaged  positions).  Systematic  countrywide 
trainings,  on  the  new  legal  framework  in  public  procurement,  were  attended  by  almost  600 
procurement officers. In addition, 33 new procurement officers passed the professional exam 
and got public procurement qualifications.  

A  regulatory  and  institutional  framework  is  in  place  on  integrity  and  conflict  of  interest 
mechanisms in public procurement.  

Efficient remedy system 

The  legislation  on  the  right  to  appeal  is  broadly  in  line  with  the  EU  acquis.  The  remedy 
system is based on a review of appeals by the Commission for Protection of Rights in Public 
Procurement Procedures (previously State Commission for the Control of Public Procurement 
- PPC), an independent administrative body reporting directly to Parliament. The decisions of 
the  Commission  are  now  published  on  the  public  procurement  portal,  increasing  the 
transparency  of  the  remedy  system.  Appeals  against  its  decisions  can  be  made  to  the 
Administrative Court.  

The  Commission  handled  268  cases  in  2020,  including  240  complaints  referring  to  open 
public  procurement  procedures  and  18  judgements  of  the  Administrative  Court,  which 
overturned the previous decisions taken by the State Commission. There was no case backlog 
in 2020. The complaints were treated on average within 18 days from the date of submission 
of complete documentation of the case by the contracting authority. 

The number of  appeals  from the PPC decisions  decreased  further to  38  cases by the end of 
2020 (32 complaints related to cases handled in 2020). Only one decision of the Commission 
from  2020  was  overturned  by  the  Administrative  Court,  which  marks  a  significant 
improvement over the previous period.    

Chapter 18: Statistics  

EU rules require that Member States are able to produce good quality statistics  in line with 
the  principles  of  the  European  statistics  Code  of  Practice  and  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.  Work  continued  on  harmonising  the  statistical  methodology 
with EU standards and increasing transmission of data to Eurostat. However, pending issues 
remain  with  regard  to  insufficient  financial  and  human  resources  of  the  Statistical  office  of 
Montenegro  (Monstat)  and  its  lack  of  expertise  in  some  areas  such  as  government  finance 
statistics, the need to improve systematic cooperation and coordination of tasks between the 
Ministry  of  Finance,  the  Central  Bank  of  Montenegro  and  Monstat,  as  well  as  the  lack  of 
transmission  of  some  fundamental  datasets  such  as  government  finance  statistics,  financial 
accounts and excessive deficit procedure tables.  

In the coming year, Montenegro should in particular: 

62 

 
 
  considerably strengthen the human and financial resources of Monstat so that it can fully 

fulfil its responsibilities and retain expert staff;  

  make significant progress in aligning with the European System of Accounts (ESA) 2010, 
including providing government finance statistical data and all available excessive deficit 
procedure data; 

  allocate sufficient resources for organising the national population and housing census and 

organise it in line with EU requirements and recommendations. 

On  the  statistical  infrastructure,  Monstat  is  the  main  producer  and  overall  coordinator  of 
statistics. Respect of the professional independence of Monstat, in line with the Montenegrin 
law, as well as of Montenegro’s commitment to political non-interference in official statistics 
(in  line  with  the  signed  Commitment  on  Confidence),  are  of  the  utmost  importance.  Full 
adherence to those principles and laws, as well as to the European Statistics Code of Practice, 
is  expected  in  regard  to  the  management  of  Monstat.  The  current  number  of  employees  in 
Monstat  is  slightly  above  50%  of  the  number  of  posts  on  the  organisation  chart  (97  out  of 
169)  A  new  building  to  host  the  Statistical  office  has  still  not  been  provided,  although  the 
public procurement for the building was finalised in 2020.  

In the context of the COVID-19 pandemic, Monstat opened the COVID-19 internet domain, 
containing  relevant  information,  and  created  a  list  of  60  indicators  that  are  of  special 
relevance as regards monitoring the COVID-19 crisis and its consequences.  

On classifications and registers, there is high compliance in terms of implementation of the 
current versions of the NACE (Nomenclature of Economic Activities), CPA (Classification of 
products by activity), ISCO (International standard classification of occupations) and ISCED 
(International  standard  classification  of  education)  classifications,  and  in  terms  of  data 
transmission  standards.  In  the  area  of  business  registers,  Montenegro  is  highly  compliant, 
even though it needs to improve the quality of the register.  

In the area of macroeconomic statistics, the data series for annual Gross Domestic Product 
(GDP) 2006-2019, Gross National Income (GNI) 2010-2019 as well as quarterly GDP data up 
to the fourth quarter 2020 are available in accordance with ESA 2010 methodology. However, 
it is necessary to update and extend the GNI inventory and to provide full GDP quarterly data 
by production, expenditure and income, as well as quarterly data in seasonally adjusted form. 
Experimental  data  for  2019  about  the  number  of  employees  and  salaries  of  employees 
(according to national accounts concepts) were transmitted to Eurostat. With regard to price 
statistics,  the  harmonised  index  of  consumer  prices  and  purchasing  power  parity  working 
methodologies  (HICP/PPP  inventory)  have  been  updated  and  submitted  to  Eurostat.  All 
mandatory  and  optional  data  elements  of  international  trade  in  goods  statistics  (ITGS)  are 
provided  on  time.  As  regards  implementation  of  the  new  transmission  format  for  ITGS, 
Montenegro  did  not  yet  provide  any  test  data.  Full  alignment  with  the  new  transmission 
format was postponed to 2021.  

There continues to be no government finance statistics sent to Eurostat. As regards excessive 
deficit  procedure  data,  tables  are  still  sent  mostly  empty.  The  Ministry  of  Finance  and 
Monstat need to agree on the way forward, the division of activities, and both of them need to 
have the required human resources. 

In  the  area  of  business  statistics,  Montenegro  provides  good  quality  road  freight  data  on  a 
regular  basis  in  line  with  the  EU  acquis  requirements.  In  the  area  of  short-term  business 
statistics,  transmission  is  timely  and  time  series  length  satisfactory,  with  the  main 

63 

 
 
shortcomings  being  in  the  services  and  industry  sectors.  Structural  business  statistics  are 
medium compliant, while business demography statistics are currently not sent to Eurostat. 

In the area of social statistics, a draft law on census of population, households and dwellings 
in 2021 is under preparation and pending adoption. The conduct of the national census upon 
schedule in 2021 faces several challenges, including the delayed adoption of the draft law, the 
effective  budget  allocation,  the  epidemiological  situation  in  Montenegro  as  well  as  timely 
input  from  other  institutions.  The  data  of  the  Labour  Force  Survey  (LFS)  for  the  fourth 
quarter 2019  - third quarter 2020 was  published, including data enabling the analysis of the 
impact of COVID-19 on the labour market.  

In the area of agricultural statistics, in 2020, for the first time, Computer-Assisted Personal 
Interviewing  (CAPI)  method  of  data  collection  was  applied  for  crop  production  for  five 
municipalities, and additional questions were included to report on climate change. In order to 
prepare  for  the  upcoming  agricultural  census,  a  development  plan  for  improvement  of 
agricultural statistics for the period 2020-2023 was prepared, as well as the self-assessment of 
agricultural statistics, outlining all activities needed to be accomplished before the agricultural 
census.  

In the area of environmental statistics, Montenegro is highly compliant with EU standards in 
waste  statistics.  However,  it  does  not  report  waste-related  data  according  to  other  reporting 
obligations, such as data about packaging waste, which is increasingly important as the basis 
for a new EU budget own resource on non-recycled plastic packaging waste. Environmental 
accounts are not in compliance with the EU requirements. In 2020, Montenegro conducted a 
major revision of data for forestry statistics for the period of 1990-2018 and published them, 
thus  enabling the development  of production account  in  forestry in  accordance with  the EU 
acquis.  An  experimental  system  for  calculation  of  the  production  account  in  forestry  was 
partly set up. 

Structural annual energy statistics as well as six-monthly price statistics are fully in line with 
EU  legislation.  The  energy  balance  covers  all  relevant  energy  produced  and  consumed  in 
Montenegro.  Data  sets  for  annual  energy  statistics  and  price  statistics,  as  well  as  additional 
reporting  in  the  SHARES  tool  (renewable  energy  sources)  are  regularly  transmitted  to 
Eurostat. However, improvement is needed on monthly reporting, as monthly energy statistics 
for oil, coal and electricity are currently not provided to Eurostat. 

Chapter 32: Financial control 

The  EU  promotes  the  reform  of  national  governance  systems  to  enhance  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.  Some progress was made in  the 
reporting period on the implementation of last year’s recommendations with the development 
of new strategies improving governance and public internal financial control. The State Audit 
Institution  considerably  improved  its  capacities  and  procedures  (audit  methodologies)  to 
perform different types of audits, in line with international standards. It also set the basis for a 
more  efficient  follow-up  of  audit  recommendations  and  for  a  more  open  and  transparent 
communication  with  the  Parliament  and  with  the  general  public.  Some  progress  was  also 
made  on  managerial  accountability,  with  the  adoption  of  a  decree  and  a  methodology  on 
delegation of authority, and on internal audit. On the other hand, further efforts are needed to 
apply managerial accountability and strengthen the functioning of internal control and internal 
audit in public bodies and in state-owned companies. A centralised budget inspection function 

64 

 
 
is  not  operational  yet.  The  coordination  capacity  of  the  National  Anti-fraud  Coordination 
Service should be further strengthened. 

In the coming year, Montenegro should in particular:  

→ operationalise the centralised budget inspection function in the Ministry of Finance; 

→ steer and strengthen the application of managerial accountability in public administration; 

→  further  align  with  the  EU  acquis  on  the  fight  against  fraud  to  the  Union's  financial 
interests. 

Public internal financial control (PIFC)  

Montenegro’s  strategic  framework  for  PIFC  is  partially  in  place.  Reforms  for  governance 
and  internal  controls  are  embedded  in  the  public  financial  management  (PFM)  and  public 
administration  reform  (PAR)  strategies,  with  new  strategies  elaborated  for  the  period  2022-
2026,  but  still  pending  adoption.  The  legislative  and  operational  framework  for  internal 
control and internal audit is in place, covering also local government entities and state-owned 
enterprises.  The  government  adopts  annual  reports  on  the  implementation  of  the  PFM  and 
PAR strategies, as well as annual consolidated reports on governance and internal controls in 
the public sector of Montenegro. 

In  August  2020,  Montenegro  adopted  a  decree  on  the  transfer  of  tasks  of  financial 
management  and  internal  controls  in  the  public  sector,  which  describes  responsibilities  and 
decision-making  powers  that  can  be  transferred  to  middle  management.  Additionally, 
methodology for the transfer of tasks was published in October 2020 and piloted in a number 
of  institutions.  Both  the  decree  and  the  methodology  represent  the  starting  point  for 
establishing a system of managerial accountability in the public sector. While there are no 
longer  limitations  in  the  legal  framework  preventing  delegation  of  authority,  managerial 
culture within public institutions continues to be highly centralised, with a low percentage of 
ministries that formally delegate responsibilities to line managers. 

The  legal  and  operational  framework  for  internal  control  and  financial  management  is 
largely in place and is in line with international standards. Rulebooks and methodologies for 
quality  review  and  annual  reporting  on  governance  and  internal  control  were  adopted  and 
piloted  in  several  institutions.  Capacities  for  risk  identification  and  risk  assessment  have 
increased, as has the number of budget users who have adopted risk registers. A rulebook on 
the  management  of  irregularities  was  adopted.  The  development  of  the  centralised  budget 
inspection function in the Ministry of Finance still requires setting up of clear rules for taking 
action upon detection of irregularities.  

Internal  audit  rules,  standards  and  practice  are  in  line  with  international  standards.  A  vast 
majority of institutions at central and local level have established an internal audit unit. Those 
who  have  no  separate  internal  audit  unit,  in  accordance  with  the  Law  on  governance  and 
internal  controls  in  the  public  sector,  benefit  from  supervision  by  other  units,  so  that  full 
budget coverage is ensured. The methodology for internal audit quality review was developed 
and almost all institutions have quality assurance programmes in place. Most of auditors have 
either a national and/or international certificate as internal auditors. They can benefit from a 
national  internal  audit  training  and  certification  system  and  of  a  long-term  professional 
development  programme  for  certified  internal  auditors.  The  percentage  of  implemented  and 
partially  implemented  recommendations  given  by  internal  auditors  is  considered  high. 
However, the follow-up of recommendations should be further improved and the assessment 
be based on the provision of actual documentation rather than on simple notification. 

65 

 
 
The  Central  Harmonisation  Unit  (CHU)  is  responsible  for  developing  and  disseminating 
methodological guidance on PIFC, as well as for monitoring and reporting on implementation 
of internal financial control. The CHU has recently increased its capacities to ensure quality 
review  of  financial  management,  internal  control  and  internal  audit  activities.  Its  annual 
reports contain recommendations and regularly propose activities to improve the effectiveness 
of the internal control systems in the public sector.  

External audit  

The functional, operational and financial independence of the State Audit Institution (SAI) is 
protected  by  the  Constitution  and  by  the  established  legal  framework,  in  line  with  the 
standards  of  the  International  Organisation  of  Supreme  Audit  Institutions  (INTOSAI).  The 
SAI has improved its institutional capacity in terms of management and auditing staff and is 
implementing its 2018-2022 strategic development plan. Most of its auditors are certified and 
have  access  to  internal  and  international  training,  including  quality  control  and  assurance, 
ethics  and  integrity,  according  to  an  adopted  training  catalogue.  The  rulebook  on  the 
procedures  for  taking  the  exam  of  state  auditor  was  amended  in  September  2020  and  the 
manuals for preparing the exam were updated. In 2020, the SAI adopted a human resources 
management strategy and an action plan for the period 2021-2025. 

On quality of audit work, the SAI adopted guidelines for the selection of financial audits and 
regularity  audits  for  its  annual  audit  plan,  thus  ensuring  that  planning  is  based  on  risk 
assessment  and  on  clearly  defined  criteria.  The  annual  audit  plan  for  2021  contains,  among 
others, financial and regularity audit and performance audit of expenses related to COVID-19 
pandemic.  The  SAI  adopted  the  mid-term  plan  for  performance  audits  for  the  period  2020-
2024, which focuses on sustainable development goals.  

The SAI submits annually an audit report on the government’s final statement of accounts and 
a  report  on  performed  audits  to  the  Parliament.  The  submission  of  individual  audit  reports 
remains an exception. In 2020, however, the Parliament did not deliberate on submitted audit 
reports,  despite  their  timely  submission.  Furthermore,  the  Parliament  does  not  ensure  a 
structured follow-up on SAI recommendations. For this reason, and to increase the impact of 
its audit work, in June 2020 the SAI adopted the guidelines for the development, monitoring 
and  control  of  the  implementation  of  its  recommendations.  Additionally,  the  SAI  adopted  a 
communication strategy aiming to improve openness, transparency and communication with 
the Parliament and with citizens. All SAI reports are publically accessible.   

Protection of the EU’s financial interests  

The national  Anti-Fraud Coordination Service (AFCOS) ensures the implementation  of a 
2019-2021 national anti-fraud strategy, which provides a basis for improving the capacity of 
the  national  anti-fraud  coordination  service  and  the  functioning  of  the  AFCOS  network. 
Montenegro continues to ensure cooperation and exchange of information with the European 
Commission  during  investigations.  Irregularities  are  managed  and  reported  via  the  online 
irregularity management system, with five cases reported in 2020. Capacities in this domain 
need  to  be  further  improved.  While  some  progress  was  made,  further  efforts  are  needed  to 
ensure a solid track record on cooperation with the European Commission on investigations. 
With regard to its criminal law, Montenegro remains not aligned with the EU Directive on the 
fight against fraud to the Union's financial interests. 

Protection of the Euro against counterfeiting  

Montenegro’s legislation on protection of Euro against counterfeiting is partially in place. The 
country  has  the  necessary  structures  for  technical  analysis  and  classification  of  counterfeit 
money,  including  euro  banknotes  and  coins.  The  Central  Bank  continues  to  supervise  the 

66 

 
 
respect of standards and ensures cooperation with the police administration and the High State 
Prosecutor's  Office.  Cooperation  agreements  with  the  European  Commission,  the  European 
Central  Bank  for  the  protection  of  euro  from  counterfeiting  are  in  place.  Montenegro 
participates actively in the EU Pericles 2020 Programme.  

3. GOOD NEIGHBOURLY RELATIONS AND REGIONAL COOPERATION  

Good neighbourly relations and regional cooperation form an essential part of Montenegro’s 
European  integration  process  and  contribute  to  stability,  reconciliation  and  a  climate 
conducive  to  addressing  open  bilateral  issues  and  the  legacies  of  the  past.  Montenegro 
maintained its engagement in a number of regional cooperation initiatives, such as the Central 
European  Free  Trade  Agreement  (CEFTA),  Energy  Community,  Transport  Community,  the 
South-East European Cooperation Process (SEECP) and the Regional Cooperation Council. 

The  COVID-19  pandemic  has  accelerated  the  ambition  to  enhance  regional  integration,  by 
displaying the important links between markets in the region as well as between the EU and 
the six Western Balkans economies. Given the European perspective of the Western Balkans, 
the EU has continued to treat the region as privileged partners by associating them with the 
Union’s  mechanisms  and  instruments,  including  an  exemption  from  temporary  EU  export 
restrictions of medical equipment. 

At  the  Sofia  Summit  on  10  November  2020,  the  six  Western  Balkans  leaders  adopted  the 
Declaration on the Common Regional Market and the Declaration on the Green Agenda for 
the  Western  Balkans.  This  followed  upon  previous  commitments  taken  at  the  EU-Western 
Balkans  Zagreb  summit  in  May  2020  and  the  recognition  of  the  role  of  deepened  regional 
economic integration to support the economic recovery of the Western Balkans. The Common 
Regional Market  is  structured around the  four freedoms (free movement  of goods, services, 
capital  and  people)  while  also  covering  aspects  of  digital,  investment,  innovation  and 
industrial  policy.  This  makes  it  the  most  ambitious  regional  integration  effort  to  date  in  the 
Western  Balkans.  The  Common  Regional  Market  builds  on  EU  rules  and  standards  and 
represents  a  stepping-stone  to  integrate  the  region  more  closely  with  the  EU  Single  Market 
already before accession. 

The  Common  Regional  Market  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 and to maximise the benefits of the infrastructure investments under 
the Economic and Investment Plan. It is therefore important that all parties play a constructive 
role in building the Common Regional Market and deliver on their joint commitments.  

The Green Agenda for the Western Balkans aims at reflecting the European Green Deal in a 
proportionate  and  adapted  manner  in  the  Western  Balkans.  The  objective  is  to  turn 
environmental  and  climate  challenges,  similar  in  the  region,  into  opportunities.  Given  that 
natural  resources  and  climate  change  do  not  know  any  border,  the  Green  Agenda  foresees 
joint  actions,  which  will  contribute  to  the  sustainable  socio-economic  development  and  the 
green  recovery  of  the  entire  region  in  the  post-pandemic  period.  Montenegro  should 
contribute to successfully implement this joint regional vision, with high level of ambition. 

The Berlin Process summit on 5 July 2021 was an occasion for the Commission to announce 
targeted  assistance related to  combating the COVID pandemic and post-pandemic recovery, 
as well as the preparations of a 2021 financial package under WBIF for the implementation of 
the Economic and  Investment Plan. The participants  also  took  stock of the achievements of 
the  connectivity  agenda  with  the  region,  which  now  includes  45  investment  projects, 
supported by 1bn EUR in EU grants  that have leveraged 3.8 bn EUR in  loans. Regrettably, 

67 

 
 
despite  good  technical  progress,  the  Western  Balkan  partners  were  not  able  to  conclude 
several important agreements related to the Common Regional Market and CEFTA, because 
of bilateral and status issues. The participating Member States and the Commission called for 
a  constructive  approach  to  making  progress  on  the  Common  Regional  Market,  which  will 
help the region take full advantage of the Economic and Investment Plan.   

In  July  2021,  the  regional  agreement  on  roaming  fees  signed  at  the  April  2019  Western 
Balkans  digital  summit  in  Belgrade  entered  into  force,  enabling  “roam  like  at  home” 
(RLAH).   

In  March  2021,  the  government  withdrew  support  for  the  appointment  as  Regional 
Cooperation  Council  next  Secretary  General  (2022-2024),  from  the  candidate  designated 
under  the  previous  government,  whose  nomination  was  the  outcome  of  a  2018  compromise 
agreement.  Montenegro  proposed  a  new  candidate,  following  the  publication  of  a  new 
vacancy announcement by the SEECP Political Directors. The country continued to chair the 
Central  European  Initiative  (CEI)  and  organised  four  online  meetings  of  the  Committee  of 
National Coordinators in 2020. The CEI Plan of Action for the period 2021-2023 was adopted 
in December 2020. In 2020, Montenegro took over the one-year chairmanship of the Western 
Balkans  Fund  (WBF),  chairing  several  senior  officials’  meetings.  The  regional  youth 
cooperation office (RYCO) registered the local branch office in Montenegro in 2020.   

Montenegro  has  continued  to  cooperate  closely  with  Bosnia  and  Herzegovina,  Croatia  and 
Serbia under the Sarajevo Declaration Process, which aims to find sustainable solutions for 
some  74000  people  who  became  refugees  and  displaced  persons  as  a  result  of  the  armed 
conflicts  in  ex-Yugoslavia.  The  construction,  purchase  of  apartments  and  distribution  of 
construction  material  under  the  Regional  Housing  Programme  continued  to  progress  well, 
nine  projects  were  approved  for  Montenegro  and  five  completed,  aiming  at  resolving  the 
housing needs for 681 vulnerable refugee families in Montenegro. In total, 417 housing units 
were  delivered  in  Montenegro  so  far,  which  represents  around  60%  of  the  overall  planned 
amount.  

The  unresolved  fate  of  missing  persons  who  disappeared  in  relation  to  the  conflicts  of  the 
1990s  remains  a  key  issue  to  be  solved  in  the  Western  Balkans.  In  December  2020,  over 
10 006  people  were  still  missing  as  a  result  of  the  conflicts  in  the  region.  Montenegro 
continued  to  actively  participate  in  the  regional  Missing  Persons  Group  and  contributed  to 
implementation  of  the  provisions  of  the  framework  plan  signed  in  November  2018.  The 
Commission on Missing Persons of Montenegro maintains records of 51 active cases, who are 
Montenegrin  citizens  or  whose  families  reside  in  Montenegro.  Montenegro  has  concluded 
bilateral  cooperation  protocols  with  all  the  neighbouring  countries;  this  provides  a  solid 
framework for cooperation. 

As  regards  bilateral  relations,  cooperation  between  Montenegro  and  other  enlargement 
countries and neighbouring EU Member States continued despite the COVID-19 pandemics 
and there were several high level visits during the reporting period. Montenegro has bilateral 
conventions on regional cooperation with all partners with an SAA in force.  

Relations with  Croatia  remained  good overall. There have been no developments regarding 
the  pending  border  demarcation  between  Montenegro  and  Croatia.  The  Minister  of  Foreign 
Affairs  held  a  bilateral  meeting  with  his  Croatian  counterpart  on  the  margins  of  the  NATO 
Foreign Affairs Ministers meeting in Brussels in March 2021. In May 2021, Croatian Minister 
of Foreign Affairs paid a visit to Podgorica. Croatia provided support to Montenegro’s health 
sector  in  the  fight  against  COVID-19  pandemics,  including  a  donation  of  vaccines  to 
Montenegro in  May 2021.  For the first  time in  thirty  years, Montenegro  and Croatia jointly 
marked the place of war crimes in Morinj, Montenegro. 

68 

 
 
Relations  with  Italy  remained  good.  Italian  Foreign  Minister  visited  Montenegro  in  March 
2021  and  had  bilateral  meetings  with  the  Prime  Minister,  Deputy  Prime  Minister,  Foreign 
Minister, and the Parliament Speaker. 

Relations  with  Albania  remained  good.  Maritime  delimitation  between  the  two  countries 
remains  pending.  Montenegro  concluded  a  cultural  agreement  with  Albania  regarding  the 
Marubi museum in Shkodra. 

Relations  with  Bosnia  and  Herzegovina  remained  good.  Montenegrin  Prime  Minister, 
together  with  two  ministers  of  his  cabinet  visited  Trebinje  to  attend  Bishop  of  Zahumlje-
Hercegovina, Atanasije’s funeral. The first joint EU-funded border crossing point Vracenovici 
– Deleusa was  opened in  October 2020.  In May 2021, Montenegrin Prime Minister paid  an 
official visit to Bosnia and Herzegovina.  

Relations with Kosovo remained good. The Deputy Prime Minister visited Prizren in March 
2021.  In  June  2021,  Kosovo  and  Montenegro  signed  an  agreement  eliminating  vehicle 
insurance tax for entry into their respective territories. 

Relations with North Macedonia remained good. In January 2021, Foreign Minister of North 
Macedonia visited Montenegro and subsequently, in March, the Deputy Prime Minister paid 
an official visit to Skopje. 

Bilateral  relations  with  Serbia  were  marked  by  tensions,  allegations  of  external  influence 
during  electoral  periods  and  in  connection  with  issues  and  events  linked  to  the  Serbian 
Orthodox  Church,  leading  to  an  increase  in  nationalistic  rhetoric.  Montenegro  recalled  its 
ambassador from Belgrade in December 2020, and currently both countries are represented at 
the  level  of  Chargés  d’affaires. The  President  of  Serbia  visited  Montenegro  in  November 
2020  to  attend  the  funeral  of  Metropolitan  of  Montenegro  and  the  Littoral  of  the  Serbian 
Orthodox  Church.  Co-operation  in  some  areas  such  as  the  health  sector  intensified.  In 
February, March and May 2021 Serbia donated COVID-19 vaccines to  Montenegro and the 
Minister  of  Health  visited  Belgrade  in  March  2021.  There  have  been  no  developments  on 
issues related to citizenship rights in the two countries. 

Relations  with  Turkey  remained  good.  An  agreement  on  providing  consular  emergency 
assistance  to  Montenegrin  nationals  in  countries  where  Montenegro  has  no  diplomatic  or 
consular presence is in place. An honorary Consulate of Montenegro in Balıkesir was opened 
in  February  2021.  President  Erdogan  visited  Montenegro  in  August  2021  and  Minister  of 
Foreign  Affairs  held  a  bilateral  meeting  with  his  Turkish  counterpart  on  the  margins  of  the 
NATO  Foreign  Affairs  Ministers  meeting  in  Brussels  in  March  2021.  Turkey  provided 
support to Montenegro’s health sector in the fight against COVID-19 pandemic.  

4. ABILITY TO ASSUME OBLIGATIONS OF MEMBERSHIP 

CLUSTER 2: INTERNAL MARKET  

This cluster covers chapters 1-free movement of goods, 2-freedom of movement for workers, 
3-right  of  establishment  and  freedom  to  provide  services,  4-free  movement  of  capital,  6-
company law, 7-intellectual property law, 8-competition policy, 9-financial services, and 28-
consumer  and  health  protection.  All  nine  chapters  are  open,  with  closing  benchmarks  that 
remain to  be fulfilled in each chapter. This  cluster is  key for Montenegro’s preparations for 
the requirements of the EU’s internal market and is of high relevance for early integration and 
the development of the Common Regional Market. 

69 

 
 
 
Progress  was  achieved  in  different  areas  e.g.  on  market  surveillance,  accreditation  and 
standardisation;  electronic  company  registration  legislative  prerequisites;  prevention  of 
money  laundering  and  terrorist  financing  legislative  alignment;  company  law,  with  the 
adoption  of  the  rulebook  on  the  Central  Register  of  Economic  Entities;  State  aid  and  aid 
transparency  with  the  strengthening  of  the  Agency  for  the  Protection  of  Competition  as 
national  State  aid  authority;  banking  area’s  legislative  alignment;  consumer  and  health 
protection’s legislative alignment. 

In  the  coming  period,  Montenegro  is  invited  to  focus  on  the  following  areas:  continue 
alignment with the acquis on metrology and standardisation; develop the operational capacity 
of the Employment Agency; progress significantly towards a fully operational Point of Single 
Contact for services; align with the acquis on capital movements and payments, including on 
the  acquisition  of  property  rights  and  monitor  the  phasing  out  of  the  investors'  citizenship 
scheme;  align  with  the  acquis  on  company  law  and  corporate  accounting;  adopt  a  new 
national intellectual property strategy; improve the track record in the area of competition and 
State  aid;  complete  alignment  of  national  legislation  with  the  EU  consumer  protection  and 
health  protection  acquis,  including  on  substances  of  human  origin;  implement  the  laws 
aligning with the Capital Requirement acquis in the banking sector.   

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. Overall, limited 
progress  was  made.  While  the  work  of  the  market  surveillance,  accreditation  and 
standardisation bodies continued as per the annual plans, some important legislative acts were 
not  adopted  and  human  resources  and  funding  in  the  sector  still  remain  inadequate.  Last 
year’s recommendations were not fully addressed and remain mostly valid. 

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; 

  ensure  that  the  Institute  for  Standardisation  of  Montenegro  (ISME)  becomes  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 envisaged in the action plan for  alignment with 
the  acquis  under  this  chapter;  ensure  the  implementation  and  enforcement  of  aligned 
chemicals management legislation with the EU regulatory framework.   

General principles 

Overall, Montenegro continued to gradually 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 
EU acquis in this chapter. Adequate human and financial resources still need to be ensured for 
the standardisation, market surveillance and accreditation bodies. 

Non-harmonised areas  

70 

 
 
 
Montenegro continued to implement its action plan for compliance with Articles 34-36 of the 
Treaty for the European Union (TFEU) on prohibition of quantitative restrictions during the 
reporting period, but the progress slowed down due to the COVID-19 context.  

Harmonised area: quality infrastructure 

In 2020, the Institute for Standardisation of Montenegro (ISME) published a total of 3,038 
Montenegrin  standards  aligned  with  the  EU  standards.  By  the  end  of  2020,  the  official 
CEN/CENELEC report evaluated the ISME adoption rate as 83 % of European standards at 
the national level, with 86 % CEN standards and 76 % CENELEC standards. However, full 
membership  of  ISME  in  CEN/CENELEC  did  not  materialise  in  the  reporting  period.  The 
human  resources  situation  of  ISME  did  not  improve,  as  it  functions  with  65  %  of  the 
systematised  job  positions  (19  out  of  29).  The  temporarily  free  access  to  standards  for 
personal  protective  equipment,  medical  devices,  risk  management,  security  and  safety, 
business continuity, as well as risk and emergency management was continued in the context 
of COVID-19 pandemic. 

On metrology, legal measuring units and implementing legislation on conformity assessments 
of legal measuring instruments were amended in accordance with the EU acquis. The law on 
ratification  of  the  convention  establishing  an  international  organisation  of  legal  metrology 
remains to be adopted. 

Concerning the market surveillance, 35,645 product inspections were made (including seven 
inspections following consumer complaints). Inspectors identified 5,029 irregularities, which 
led to administrative measures (consisting of 1,008 misdemeanour orders and 529 decisions). 
The  administration  for  inspection  affairs  should  be  further  reinforced  with  inspectors  for 
technical surveillance.  

During  the  reporting  period,  there  were  41  conformity  assessment  bodies  accredited  by  the 
accreditation  body  of  Montenegro,  namely  25  testing  laboratories,  two  laboratories  for 
calibration, one laboratory for medical examinations, eight inspection bodies, two certification 
bodies for products certification and three certification bodies for certification of management 
systems. In November 2020, the accreditation body formally submitted the application to the 
European Cooperation for Accreditation (EA) for signing the EA Multilateral Agreement.  

On product safety, Montenegro reported that 2,211 inspections were made, including 1,733 
inspections in proactive surveillance and 487 inspections in reactive surveillance, identifying 
789 dangerous products (42,734 items). Administrative measures were imposed accordingly, 
including  withdrawal  from  the  market  and  permanent  or  temporary  circulation  ban, 
destruction and return to the producer/distributor.  

Harmonised area: sectoral legislation 

On  ‘new  and  global  approach’  product  legislation,  Montenegro  adopted  implementing 
legislation  designed  to  ensure  partial  alignment  with  the  EU  acquis  on  construction.  In  the 
energy  efficiency  area,  Montenegro  adopted  implementing  legislation  designed  to  ensure 
partial alignment with the EU acquis on eco-design and on energy efficiency labelling. 

On  ‘old  approach  product  legislation’,  Montenegro  adopted  implementing  legislation 
designed to ensure partial alignment with the EU acquis (Annexes I, V to XIII, XVII of the 
REACH Regulation, Annex I of the PIC Regulation). In May 2021, the government adopted 
the  2020  report  on  the  action  plan  for  the  implementation  of  the  national  chemicals 
management  strategy  in  2019-2022.  In  July  2020  Montenegro  adopted  implementing 
legislation designed to ensure further partial alignment with the EU acquis on medicines for 
human use. 

71 

 
 
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’s  law  on  the  protection  of  cultural  property  is 
designed  to  align  with  the  EU  acquis  on  the  return  of  cultural  objects  unlawfully  removed 
from the territory of a Member State. 

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. Limited progress was achieved in 
the reporting period, concerning in particular the area of social security schemes.  

In  the  coming  year,  Montenegro  should  in  particular  continue  to  establish  structures  and 
develop administrative capacity to implement the EU acquis in the area, and in particular to 
increase the operational capacity of the Employment Agency.  

The  action  plan  adopted  in  2019  to  meet  the  accession  requirements  on  the  freedom  of 
movement for workers is being implemented.  

On  access  to  the  labour  market,  there  were  no  legislative  developments.  The  Law  on 
foreigners  governs  entry,  stay  and  work  of  foreign  citizens.  Specific  provisions  for  EU 
nationals  are  included  in  the  law  on  foreigners  and  will  apply  as  of  the  date  of  accession. 
Procedures  for  handling  foreigners`  requests  for  temporary  residence  and  seasonal 
employment permits through Montenegro`s representations in countries of origin are yet to be 
finalised.  

On  preparation  to  join  the  European  network  of  employment  services  (EURES)  upon 
accession, efforts need to be stepped up to upgrade the administrative and technical capacity 
of the Department for EURES and International Employment Mediation within Montenegro`s 
Employment  Agency.  Ongoing  EU  support  is  provided  to  support  strengthening  the 
operational  capacity  of  the  Employment  Agency  in  the  areas  of  services’  digitalisation, 
EURES capacity building and labour mobility. 

On the coordination of the social security systems, 25 bilateral agreements are in force, of 
which  16  with  EU  Member  States.  The  bilateral  agreement  with  Romania  has  yet  to  be 
signed.  Amendments  to  those  with  Serbia  and  with  Bosnia  and  Herzegovina  need  to  be 
concluded.  

The  European  Health  Insurance  Card  is  recognised  under  the  law  on  compulsory  health 
insurance  but  will  be  introduced  only  after  accession.  So  far,  Montenegro  concluded 
agreements  on  the  use  of  the  card  with  five  EU  Member  States  (Austria,  Germany, 
Luxembourg, Slovakia and Slovenia). There were no further developments in recruitment of 
the coordination staff in the regional units of the Health Insurance Fund. 

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. 

72 

 
 
Montenegro  remains  moderately  prepared  in  this  area.  Overall,  some  progress  was  made 
during the reporting period, with good progress in electronic company registration, as per last 
year’s recommendation, while preparatory activities for the establishment of a Point of Single 
Contact were limited. 

In the following period, Montenegro should in particular: 

→ ensure electronic registration of all types of companies; 

→ step up efforts to establish a fully operational Point of Single Contact; 

→ continue inter-ministerial coordination and fully align with the EU Services Directive. 

On  the  right  of  establishment  and  freedom  to  provide  cross  border  services,  good 
progress was made on electronic company registration. Secondary legislation adopted during 
2020  ensures  the  legislative  prerequisites  to  introduce  full  electronic  registration  of 
enterprises.  In  December  2020,  the  tax  administration  launched  the  eFirma  portal.  In  the 
initial  phase,  it  provides  for  the  electronic  registration  of  single-member  limited  liability 
companies  and  the  administration  of  their  registration  data.  Alignment  of  the  implementing 
legislation with the EU Services Directive continued at a slower pace. Drafting of the decree 
on the Point of Single Contact for services has started, while its actual establishment would 
require  an  EU  assistance  project.  Due  attention  should  be  given  to  further  upgrade 
administrative  capacity 
the  Ministry  of  Economic 
the  Services  Department  of 
Development.  

in 

On postal services, the legislation is aligned with the EU Postal Services Directive. Quality 
standards for the provision of the universal postal services were introduced in November 2020 
through the adoption of implementing legislation. In July 2020, the rulebook was amended to 
implement the principles on accounting separation and calculation of net cost of the universal 
service.  Full  alignment  with  the  EU  acquis  is  yet  to  be  achieved,  including  with  the 
Regulation  on  cross-border  parcel  delivery  services.  The  2021-2022  action  plan  for  the 
implementation of the postal development strategy was adopted in July 2021. 

On the mutual recognition of professional qualifications, Montenegro has a satisfying level 
of  alignment  with  the  EU  acquis  and  adopted  implementing  legislation  in  the  reporting 
period. Foreign professional qualifications are recognised in line with the national legislation. 
To ensure continuous alignment with the acquis, Montenegro should follow up on measures 
set out in the national plan to develop qualifications for regulated professions. 

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. Some progress was made on the capacity 
to  perform  checks  on  reporting  entities,  on  the  quality  of  reporting  and  the  efficiency  and 
independence  of  the  relevant  institutions.  The  government  also  decided  to  phase  out  the 
investors'  citizenship  scheme  by  the  end  of  2021.  Montenegro’s  Administration  for  the 
Prevention  of  Money  Laundering  and  Terrorism  Financing  (FIU)  was  readmitted  to  the 
EGMONT  group,  an  informal  network  of  FIUs  for  international  co-operation  on  the 
prevention of money laundering.  

Last year’s recommendations remain largely valid. In the coming year, Montenegro should:  

73 

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

acquisition of property rights and on payment system;  

  update  the  strategic  framework  on  the  prevention  of  terrorism,  money  laundering  and 

terrorism financing; 

  strengthen the anti-money laundering supervision of the non-financial sector, particularly 
in high risk areas such as the games of chance, and on lawyers and notaries, by amending 
the  law  on  games  of  chance  and  the  law  on  the  prevention  of  money  laundering  and 
terrorism financing; monitor the investors' citizenship scheme, as long as it is still running, 
to prevent risks related to money laundering.  

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.  The 
adoption  of  a  new  insurance  law  remains  pending.  Amendments  to  the  Law  on  ownership 
rights, removing preferential treatments and ensuring that EU citizens can buy real estate or 
farming land under the same conditions as Montenegro citizens, have yet to be adopted.  

As regards the payment system, the draft law on comparability of fees charged to customers, 
payment account switching and access to payment accounts with basic features, and the draft 
law  on  interchange  fees  and  card-based  payment  transactions  were  finalised  and  sent  to  the 
Parliament for adoption. The drafting of amendments to the law on payment system, aimed at 
aligning with the Payment Services Directive 2, is in the process. 

Montenegro  has  now  three  licensed  payment  institutions  and  one  electronic  payment 
institution. Some 22 agents are registered in payment institutions. In 2020, the Central Bank 
of  Montenegro  performed  five  inspections  of  banks,  to  verify  the  compliance  of  operations 
with the regulations in the field of payment operations, as well as six inspections of operations 
of payment institutions. 

In  the  area  of  anti-money  laundering  and  terrorism  financing,  the  legislative  framework 
was further aligned with international standards, through the adoption of four bylaws on: (i) 
regulating  the  internal  organisation  and  systematisation  of  the  Financial  Intelligence  Unit 
(FIU);  (ii)  providing  indicators  for  recognising  suspicious  clients  and  transactions;  (iii) 
guiding  the  implementation  of  internal  controls,  record  keeping  and  data  protection 
requirements; and (iv) providing rules on exchange of data. In June 2021, amendments to the 
law on the prevention of money laundering and terrorism financing were adopted, to reflect 
the  new  setting  of  the  FIU  within  the  Ministry  of  Interior.  The  law  confirms  the  FIU’s 
operational  independence  and  autonomy,  with  the  objective  to  meet  FATF  standards  and 
EGMONT group’s criteria. However, the law on games of chance has yet to be amended in 
order to strengthen the supervision of the non-financial sector in this high-risk area. The law 
on international restrictive measures has yet to be aligned with EU standards. The process of 
alignment of the law on the prevention of money laundering and terrorism financing with the 
fifth  EU  Anti-Money  Laundering  Directive  and  with  the  recommendations  of  the  Financial 
Action Task Force (FATF) has started. 

The  strategy  for  the  prevention  of  terrorism,  money  laundering  and  terrorism  financing 
expired  in  2018,  and  a  new  strategy  remains  to  be  adopted.  Another  important  strategic 
document,  the  National  Risk  Assessment  on  Money  Laundering  and  Terrorism  Financing, 
was  adopted  in  October  2020,  through  a  broad  consultation  process.  It  lays  down  the 
country’s  main  challenges  and  priorities  in  the  area  of  money  laundering  and  terrorism 
financing and defines the obligations of all relevant institutions and stakeholders.  

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In  November  2020,  the  Administration  for  the  Prevention  of  Money  Laundering  and 
Terrorism  Financing  (FIU)  was  readmitted  to  the  EGMONT  group,  11  months  after  its 
membership  was cancelled, when the  FIU ceased to  exist under its previous legal  form and 
was established within the police. However, in the context of the reorganisation of the police 
in March 2021, the FIU was again administratively dismantled and its head was dismissed. It 
was recreated under a new administrative name, with the same staff and same mandate, as a 
sector of the police under the Ministry of Interior. The FIU currently has 30 staff members, 
including  17  working  directly  on  cases.  Its  technical  and  IT  capacity  was  further  increased 
with  the  establishment  of  a  case  management  system  that  allows  electronic  exchange  of 
information  on  suspicious  transactions  between  State  bodies,  in  line  with  Moneyval 
recommendations. The FIU has now direct access to Europol SIENA secure communication 
channel,  allowing  a  fast,  secure  and  efficient  information  exchange  with  Europol  and  EU 
Member States. 

The  number  of  cases  processed  and  the  number  of  suspicious  transactions  prevented 
continued to rise in 2020, reflecting the FIU’s enhanced capacity. The FIU received 25 951 
notifications of cash transactions from commercial banks, and 234 notifications of suspicious 
transactions  from  other  reporting  entities.  The  number  of  temporary  suspensions  of 
transactions rose to 40 (from nine in 2019) regarding 14 people and 147 legal entities, for a 
total amount of more than EUR 3 million, a 344 % surge compared with 2019. The Central 
Bank  of  Montenegro  performed  14  controls  of  financial  institutions  in  relation  to  the 
prevention  of  money  laundering  and  financing  terrorism  in  2020,  and  issued  warning 
measures towards eight of them.  

In  March  2021,  the  government  decided  to  phase  out  by  end  of  2021  the  investors' 
citizenship scheme,  implemented since January  2019. So far,  81  applicants  and  185 family 
members were granted Montenegrin citizenship in the framework of the programme. As long 
as  it  is  still  running,  this  scheme  needs  to  be  closely  monitored  as  it  poses  risks  related  to 
security,  money  laundering,  tax  evasion,  terrorist  financing,  corruption  and  infiltration  by 
organised crime. 

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. Some progress was 
made  in  this  area  by  adopting  the  rulebook  on  the  Central  Register  of  Economic  Entities; 
however, the recommendation to adopt the amended Law on accounting and related rulebook 
on financial statements is outstanding.  

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

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

→ further align with the EU acquis on company law, including on shareholder rights; 

→  complete  full  alignment  with  the  Transparency  Directive,  including  the  sanctioning 
regime. 

On  company  law,  two  rulebooks  on  business  registration  (in  the  Central  Registry  of 
Economic Entities) were adopted in  September 2020, following the adoption of the Law on 
business organisations. Further legislative alignment is necessary with the 2019 company law 
EU acquis on the use of digital tools and on cross-border operations, as well as rules on the 
encouragement  of  long-term  shareholder  engagement.  National  legislation  on  company 

75 

 
 
takeovers is in line with main EU acquis provisions. Revision of the Corporate Governance 
Code  is  planned  in  accordance  with  key  activities  of  the  Capital  Market  working  plan  for 
2021. The database of companies in the business register should be ready to interconnect with 
EU Member States’ business registers in the future. 

Work continued to develop the Central Registry of Regulated Information, which will be the 
official  mechanism  to  collect  and  publish  regulated  information  in  accordance  with  the  EU 
Transparency  Directive,  including  relevant  staff  training.  The  Capital  Market  Authority  is 
the  ‘officially  appointed  mechanism’.  Legislative  work  is  underway  to  achieve  full  acquis 
alignment in this area, including the sanctioning regime. 

On corporate accounting and statutory audit, the draft law on accounting - aimed at acquis 
alignment,  including  non-financial  reporting  requirements  –  should  be  resubmitted  to 
Parliament for adoption, following which, the rulebook on company financial statements will 
also  need  to  be  adopted.  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).  The Law on auditing contains the essential 
elements  in  line  with  EU  requirements,  and  Montenegro  has  a  public  audit  oversight  body 
(POB), independent  of the profession.  Statutory  audits are performed based on international 
auditing standards (ISAs) and are mandatory for public-interest entities. No irregularities were 
found during audit quality inspections in the second half of 2020. Following a slowdown due 
to the COVID-19 pandemic, regular audit quality inspections continued from February 2021. 
The control plan for audit companies and certified auditors was adopted in January 2021.  

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  IPR  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. Limited progress 
was  made  as  regards  a  new  national  intellectual  property  strategy,  alignment  with  the  EU 
acquis and improving the track record on investigations, prosecutions and judicial follow-up. 
Last year’s recommendations remain therefore largely valid. 

In the coming year, Montenegro should in particular: 

  adopt a new national intellectual property strategy; 

  continue legislative alignment in particular with the Trade Secrets Directive and with the 
Enforcement  Directive  as  concerns  measures  against  intermediaries  and  step  up 
preparations  for  accession  to  the  European  Patent  Convention  (EPC)  and  the  European 
Patent Organisation (EPO); 

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

On copyright and neighbouring rights, 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  remains  to  be  enacted  by  the  Parliament.  In  June  2020,  a  collective 
management  organisation  of  performers  (“IN  CG”)  was  granted  a  license  to  operate. 
Ratification  of  the  Marrakesh  Treaty  is  pending  enactment  by  the  Parliament  since  April 
2020. 

76 

 
 
On  industrial  property  rights,  legislative  alignment  with  the  EU  acquis  on  patents, 
trademarks,  and  trade  secrets  continued.  Preparation  for  accession  to  the  European  Patent 
Convention  (EPC)  and  the  European  Patent  Organisation  (EPO),  now  expected  in  2022,  is 
ongoing. Relevant IPR IT tools, search engines and databases are operational and were further 
upgraded. 

On  enforcement,  Montenegro  prepares  quarterly  and  annual  updates  of  its  statistics.  The 
reporting  format  on  customs  enforcement  of  intellectual  property  rights  remains  to  be  fully 
aligned  with  Montenegro’s  future  reporting  obligations  to  the  European  Commission.  The 
track record on criminal investigation and prosecution remains to be improved in line with EU 
and international standards. Ex-officio powers should be reinforced in this respect. Sanctions 
and penalties imposed for intellectual property infringements appear to be too low to have a 
deterrent  effect.  Preparation  of  Montenegro’s  new  national  intellectual  property  strategy 
2022-2025 is advancing in cooperation with the World Intellectual Property Office (WIPO).  

Activities of the coordination team for IPR enforcement were significantly reduced due to the 
COVID-19  pandemic.  In  September  and  December  2020,  the  Ministry  of  Economic 
Development  organised  the  ‘Days  of  joint  action’,  in  cooperation  with  the  Customs 
Administration,  Market  Inspection  and  the  Police  Administration:  controls  of  economic 
entities were performed and supervision at the border crossings intensified.   

International  cooperation  with  WIPO,  EPO  and  the  European  Union  Intellectual  Property 
Office (EUIPO) continued through online conferences, workshops and seminars.  

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. Some progress was registered by further 
strengthening the Agency for the Protection of Competition (ACP) as the competent authority 
for  competition  policy  and  State  aid  and  by  providing  it  with  information  to  conduct  its 
investigations.  Progress  was  also  demonstrated  by  establishing  two  specialised  State  aid 
registers thus  contributing to  transparency, by opening ten new  ex-officio cases on State aid 
and through issuing three negative opinions on State aid to Montenegro Airlines.  

Last  year's  recommendations  remain  valid.  In  the  coming  year  Montenegro  should  in 
particular:  

  provide the State aid authority with the means and information to conclude the Montenegro 
Airlines case and follow up on the establishment of the new national air carrier branded Air 
Montenegro as well as the ongoing investigations of non-notified state aid; 

  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, by fully using its enforcement powers, carrying out more on-site inspections, and 
further promoting the use of its leniency policy. 

Antitrust and mergers 

77 

 
 
 
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 and largely in line with the relevant EU  acquis. 
No  further  progress  was  achieved  in  legislative  alignment  with  the  EU  acquis  during  the 
reporting  period,  albeit  amendments  to  the  Law  on  protection  of  competition  are  under 
approval by the Parliament.  

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 its director is  appointed by the government. The powers of the APC are broadly 
comparable  to  those  of  the  European  Commission  in  the  area  of  competition.  Decisions  are 
taken  by  the  Council  of  the  APC,  appointed  by  the  government.  APC’s  decisions  may  be 
appealed before the Administrative Court. A leniency policy for self-reporting cartel members 
is in place. Fines can still only be imposed by 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 remain under approval in Parliament.  

On  enforcement  capacity,  the  APC’s  administrative  and  financial  capacities  remain  to  be 
strengthened. Overall, the APC currently has 18 posts specific to antitrust and mergers out of 
which 11 are filled – two more than in the previous period.  

On  implementation,  in  the  field  of  cartels  and  abuses  of  dominant  position,  two  decisions 
have  been  taken  in  the  reporting  period,  which  are  however  challenged  before  the 
administrational  courts.  In  2020,  50  mergers  were  approved,  compared  to  62  in  2019.  Two 
procedures  were  suspended  and  one  merger  was  rejected.  No  in-depth  investigation  of  a 
merger  was  reported.  The  numbers  and  amounts  of  fines  imposed  by  misdemeanour  courts 
remained low. Fines were paid  in  only one case,  while in  another case the entity concerned 
objected the fines decision and procedures are ongoing. The leniency policy was not applied, 
similar to the previous periods. The APC did not issue any opinion on legislation in 2020. To 
build its track record in the area of antitrust and mergers, the APC should increase the number 
of resolved cases. The APC needs to fully use its enforcement powers, carrying out more on-
site inspections, and further promoting the use of its leniency policy  as a means to  uncover 
cartels.  Finally,  the  courts’  capacity  to  handle  complex  competition  cases  remains  to  be 
significantly strengthened.  

State aid 

The legislative framework is largely in line with the EU acquis and the SAA as well as with 
Articles  107  and  108  TFEU  on  State  aid.  The  2018  Law  on  State  aid  control  sets  out  the 
notion  of  aid  as  well  as  procedural  State  aid  rules.  Implementing  legislation  to  amend  the 
temporary  framework  for  State  aid  measures  to  support  the  economy  in  the  context  of  the 
COVID-19 outbreak was adopted in June and December 2020. The 2019 report on State aid 
was published in November 2020. Specific State aid registers for COVID-19 measures and de 
minimis aid were established in October and November 2020. They are updated on a regular 
basis. The general State aid register was established in June 2021. The rules on the financing 
of  services  of  general  economic  interest  are  largely  aligned  with  the  EU  State  aid  acquis. 
However, Montenegro still 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. A solid enforcement track record remains 
to  be  proven.  The  Ministry  of  Finance  and  Social  Welfare  established  the  Department  for 

78 

 
 
Coordination, Reporting and State Aid to strengthen activities in State aid and filled two out 
of five planned posts.  

The enforcement capacity of the APC Council remains significantly insufficient. There are 
seven employees in the field of State aid, one less than in the previous year. To strengthen its 
expertise  and  enforcement  capacity,  the  APC  should  undertake  significant  efforts  towards 
new recruitments and related capacity building. 

On implementation, 46 state aid decisions (29 resolutions and 17 opinions) of the Council of 
the APC were published in 2020, showing a significant increase from 33 decisions in 2019. 
The  APC  handled  24  cases  of  ex-ante  control,  whereas  two  ex-officio  cases  are  ongoing, 
namely  on  Montenegro  Airlines  and  Adriatic  Marinas.  In  this  context,  the  APC  is  also 
investigating  the  possible  State  aid  payments  during  2020  on  the  basis  of  the  2019  Law  on 
investing in consolidation and development of Montenegro Airlines, which provided for up to 
EUR 155 million in state funding to the airline. The ACP has issued three negative opinions 
in 2020, including the one not to pay aid to Montenegro Airlines on the basis of the 2019 law. 
In  December  2020,  the  new  government  decided  to  close  the  company  and  a  bankruptcy 
procedure  is  ongoing.  10  new  ex-officio  cases  were  opened  by  June  2021,  showing  an 
improving track record compared to two such cases opened in 2019 and none between 2013 
and 2018. Out of the 12 cases in total, five cases were completed in the reported period. 

The State aid authority has not yet published opinions or decisions as concerns possible State 
aid  cases  in  the  energy  sector.  The  State  aid  authority  should  continue  to  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. All  concerned institutions should  contribute to 
strengthening  the  position  of  the  APC  and  its  Council  thus  ensuring  an  independent  and 
functioning system of State aid control, which is fundamental for Montenegro’s progress on 
its  path  into  the  European  Union.  The  APC  should  continue  to  advocate  for  further 
strengthening awareness of state aid rules among aid grantors at both central and local levels. 

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 area of liberalisation in the reporting period. 

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  some  progress 
made  in  the  reporting  period  on  the  asset  quality  review  and  with  the  adoption  of 
implementing  legislation  in  the  banking  area.  Last  year’s  recommendations  were  partially 
fulfilled. 

In the coming year, Montenegro should: 

  implement the legislation aimed at alignment with the Capital Requirements Directive and 

the Capital Requirements Regulation, including the implementing acts;  

79 

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

results and prepare plans for corrective actions, if necessary. 

The  legislation  is  partially  aligned  with  the  EU  acquis  on  banks  and  financial 
conglomerates.  In  the  course  of  2020  and  2021,  the  Central  Bank  of  Montenegro  focused 
most  of  its  activities  on  monitoring  the  financial  stability  of  the  banking  system  and 
mitigating  negative  effects  of  the  COVID-19  pandemic.  The  Central  Bank  adopted  six 
packages of interim measures (March 2020-March 2021) aimed to preserve and increase the 
liquidity of companies and individuals and to mitigate the effects of decrease of bank clients' 
creditworthiness, caused by the pandemic.   

The  entry  into  force  of  laws  on  credit  institutions  and  on  resolution  of  credit  institutions 
(aimed  at  alignment  with  the  Capital  Requirements  Directive  and  the  Capital  Requirements 
Regulation) was postponed to January 2022. The implementing acts related to these laws (38 
different  legal  acts)  were  adopted  and  should  become  applicable  in  2022,  too.  The  delay  is 
motivated  by  the  COVID-19  outbreak  and  the  necessity  to  commit  the  banking  system 
participants to the implementation of the mitigation measures. Thanks to the actions taken by 
the central bank, the main indicators for the banking sector remain positive, with the ratio of 
non-performing  loans  increasing  only  slightly,  to  5.5%  of  total  loans  in  May  2021  and  the 
solvency ratio reaching 19.3% in May 2021, well above the statutory minimum of 10%. 

The  independent  review  of  the  asset  quality  in  all  12  banks  present  on  the  Montenegrin 
market, which started in February 2020, continued. Due to delays caused by the pandemic, the 
review is to be completed by the end of 2021. 

 Montenegro’s  rules  on  insurance  and  occupational  pensions  are  partially  aligned  with 
those  of  the  EU  and  are  primarily  based  on  Solvency  I  rules.  In  the  course  of  2020,  the 
Insurance  Supervision  Agency  continued  working  on  the  new  Law  on  insurance,  which 
should ensure further alignment with the main EU acquis, the Solvency II Directive and the 
Insurance Distribution Directive.  

On  financial  market  infrastructure,  securities  markets  and  investment  services,  the 
Capital  Market  Authority  continued  preparations  for  alignment  with  the  EU  acquis  on 
investment  funds  (UCITS  Directive),  alternative  investment  funds  (AIFMD  Directive)  and 
pension funds (IORP Directive). The Authority produced initial drafts of these three laws as 
well as a draft law on digital property (assets). 

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.  The  EU  also  ensures  high  common 
standards  for  upholding  patients’  rights  in  cross-border  healthcare  and  tackling  serious 
cross-border health threats including communicable diseases. 

Montenegro  is  moderately  prepared  on  consumer  and  health  protection.  Limited  progress 
was  made,  notably  on  last  year’s  recommendations  regarding  alignment  to  the  EU  acquis  in 
the areas of consumer and health protection. Recommendations from last year remain therefore 
largely valid.  

In the coming year, Montenegro should, in particular: 

  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 substances of human origin; 

80 

 
 
  ensure  the  necessary  implementation  capacity  to  implement  the  EU  acquis,  and 

implement it in all relevant areas - notably in the area of tobacco control. 

Consumer protection  

Regarding  the  legislative  framework  for  consumer  protection,  Montenegro  adopted 
implementing legislation designed to ensure alignment to the EU  acquis on consumer rights 
for  contract  termination  and  on  the  out-of-court  resolution  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.  

Montenegro  reported  that  35,645  inspections  were  performed  in  the  field  of  consumer 
protection,  which  identified  5,029  irregularities,  leading  to  administrative  and  punitive 
measures.  

On product safety, Montenegro reported that 2,211 inspections were made, including 1,733 
inspections  in  the  context  of  proactive  surveillance  and  361  inspections  in  reactive 
surveillance,  identifying  789  dangerous  products  (42,734  items).  Administrative  measures 
were  imposed  accordingly,  including  withdrawal  from  the  market  and  permanent  or 
temporary circulation ban, destruction and return to the producer/distributor.  

Public health  

On public health, national legislation on healthcare is partly aligned with the EU acquis. The 
health budget (7.1% of GDP) increased slightly compared to 2019.  Montenegro’s  Integrated 
Health  Information  System  (IHIS)  covers  state-owned  medical  institutions,  pharmacies  and 
privately  owned  dentist  offices.  It  is  used  at  the  primary  and  secondary  care  level  but  only 
partially  at  tertiary  level.  The  over-prescription  of  medicines  is  no  longer  a  matter  of 
particular concern thanks to various actions by the Ministry of Health including trainings on 
rational use of antibiotics and strengthened control over pharmacies. Anti-microbial resistance 
remained  insufficiently  addressed.  There  was  no  external  survey  assessing  corruption 
affecting the health sector. 

Although  Montenegro’s  legislation  is  designed  to  align  with  the  EU  acquis  on  tobacco 
control, this is not sufficiently enforced in public places, especially in bars, restaurants, and 
night clubs. The sale of tobacco products to persons under the age of 18 is legally prohibited, 
but weak control over the sale of tobacco products to minors is a matter of concern.  

On  blood,  tissues,  cells  and  organs,  the  national  Blood  Transfusion  Institute  provided 
sufficient quantities of safe blood for the needs of the citizens and organised voluntary blood 
donation  actions.  Council  of  Europe  studies  found  that  the  laboratory  of  the  Blood 
Transfusion Institute performed with the established standards. 

Implementation of the national legislation requirements in the field of substances of human 
origin  (SOHO),  will  be  facilitated  through  the  development  of  an  information  system 
focusing on organ donation and transplantation. A required software will be developed with 
EU funds.   

National legislation on healthcare is partly aligned with the EU acquis, but patients’ rights in 
cross-border  healthcare  need  to  be  addressed.  In  the  field  of  serious  cross-border  health 
threats, including communicable diseases, the capacities of the Institute of Public Health to 
effectively  respond  to  future  outbreaks  of  infectious  diseases  are  being  strengthened  by 
building and equipping the Centre for Control and Prevention of Infectious Diseases with the 
Emergency Operations Centre and by improving the IT system in the fields of data collection 
and crisis management. Montenegro has also improved microbiology diagnostics capacity and 
quality  (including  COVID-19  diagnostics)  with  the  establishment  of  the  biosafety  level  3 

81 

 
 
laboratory  with  EU  support.  Montenegro  successfully  maintained  a  low  prevalence  of  HIV 
thanks to  the existing prevention services for key  populations  at  risk, also provided by  civil 
society organisations active in this area.  

During  the  ongoing  COVID-19  pandemic,  the  Institute  for  Public  Health  ensured  testing, 
assessment  of  the  pandemic  situation,  proposing  containment  measures  to  the  relevant 
national  authorities  and  reporting  on  communicable  diseases.  The  epidemiological  situation 
evolved  rapidly  with  increasing  number  of  infected  persons  placed  under  quarantine  and 
active  surveillance  or  hospitalised  due  to  serious  health  conditions,  and  a  high  number  of 
deaths  occurred during the peak of the pandemic.  In response to  this situation, the National 
co-ordinating  body  introduced  numerous  measures  to  prevent  further  spread  of  the  disease. 
They included mandatory self-isolation for people returning from abroad, closure of schools, 
restricted movement  including curfew, mandatory  social distance, travel  abroad ban and the 
closure of most of the border crossings. 

In  December  2020,  the  National  co-ordinating  body  was  dissolved  and  the  Council  for 
fighting  COVID-19  was  established.  In  January  2021,  the  national  strategy  for  the 
immunisation  against  COVID-19  was  adopted.  Montenegro  started 
the  COVID-19 
immunisation  for  priority  groups  in  February  and  mass  immunisation  in  May.  Montenegro 
received 48,000 doses of Astra Zeneca vaccine through the global COVAX vaccine sharing 
mechanism  as  a  self-financing  partner,  10,000  additional  doses  through  an  agreement  with 
Croatia, as well as donations of 10,000 doses from Serbia and Slovakia each (in total 78,000 
doses of Astra Zeneca). Under the EU’s scheme to share vaccines with the Western Balkans 
(via Austria), Montenegro received over 42,000 Pfizer/BioNTech doses between May-August 
2021. In addition, Montenegro has signed a bilateral agreement with Pfizer for over 150,000 
doses of vaccines. Furthermore, Montenegro has received 14,000 doses of Sputnik V vaccine 
and over 630,000 doses of Sinopharm vaccine, including a donation from Hungary of 200,000 
doses.  Montenegro  continued  to  participate  in  the  EU  Health  Security  Committee  as  an 
observer,  with  also  access  to  the  EU  Early  Warning  and  Response  System.  Montenegro 
continued to make use of the EU Joint Procurement Agreement on medical counter-measures 
to which it is a signatory and joined the European COVID-19 Surveillance Network, reporting 
COVID-19  data  to  the  European  Surveillance  System  (TESSy)  managed  by  the  European 
Centre for Disease Prevention and Control (ECDC).  

Health  promotion  activities  related  to  non-communicable  diseases  need  to  be  strengthened. 
Montenegro has a strategy for the improvement of mental health (2019-2023) along with a 
related 2019-2020 action plan. However, the report on the implementation of the action plan 
has not  yet  been prepared. On  preventive  measures, workshops  for primary  and secondary 
students on healthy life styles continued. Progress was made in terms of early detection of and 
intervention  in  mental  health  disorders  by  strengthening  the  capacity  of  teaching  staff  in 
primary and secondary schools.  

On  drug  abuse  prevention  and  harm  reduction,  no  report  was  made  available  on  the 
implementation  of  the  action  plan  for  2019-2020  of  the  2013-2020  strategy  for  drug-abuse 
prevention nor on the implementation of the guidelines on providing support to drug addicts. 
According to civil society, drug-related deaths are not registered. The harm reduction centres 
managed  by  civil  society  organisations  continued  with  the  provision  of  services  to  clients 
during the COVID-19 pandemic. Some opioid substitution treatment (OST) centres provided 
therapies  to  clients  on  a  weekly  basis,  or  organised  a  delivery  of  OST  therapy  to  people  in 
quarantine  or  their  homes.  Treatment  options  for  drug  users  have  been  improved,  but  they 
should be further extended to cover all categories of drug users. A free telephone service has 
been organised by the Podgorica health centre. 

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On  health  inequalities,  access  to  healthcare  services  remains  available  for  almost  all 
vulnerable  groups.  Those  who  do  not  have  access  to  all  health  services  are  displaced  or 
internally  displaced  persons,  including  Roma  and  Egyptians,  without  regulated  legal  status. 
Montenegro  should  continue  to  improve  access  to  health  and  services  for  disadvantaged 
populations,  including  Roma  and  other  minorities,  older  people,  people  with  pre-existing 
mental  health  problems,  people  with  disabilities,  and  populations  in  rural  or  remote  areas. 
Immunization  and  adequate  treatments,  including  services  delivered  at  hospitals,  were 
ensured to all those affected by COVID-19 during the pandemic.  

CLUSTER 3: COMPETITIVENESS AND INCLUSIVE GROWTH  

This cluster covers chapters 10-information society and media, 16-taxation, 17-economic and 
monetary  policy,  19-social  policy  and  employment,  20-industrial  policy,  25-science  and 
research, 26-education and culture, and 29-customs. All eight chapters are open, with closing 
benchmarks set in all but two, namely chapter 25-science and research and 26-education and 
culture –  which are provisionally closed. Closing benchmarks remain to be fulfilled in each 
of  the  six  chapters.  This  cluster  and  the  reforms  concerned  have  significant  links  to 
Montenegro’s Economic Reform Programme. 

Some  progress  was  achieved  in  different  areas  e.g.  through  implementation  of  the  WHO 
Framework  Convention  on  Tobacco  Control;  adoption  of  a  new  law  on  pensions;  further 
implementation of the revised industrial policy, as well as implementation of the strategies on 
smart  specialisation,  vocational  education  and  training,  and  trade  facilitation.  On  economic 
and monetary policy, implementation of the action plan for alignment with the EU acquis is 
ongoing. 

In the coming period, Montenegro is invited to focus on the following areas: adopt legislation 
to ensure independence of the media sector from political influence; make progress towards 
alignment  in  the  areas  of  VAT,  excise  duties  and  direct  taxation;  improve  cooperation  and 
coordination amongst relevant actors covering economic and monetary issues; implement the 
labour law and the anti-discrimination law, in addition to continue efforts on improving safety 
at  work;  continue  implementing  the  revised  industrial  policy  and  boost  inter-ministerial 
cooperation;  continue  to  develop  – with  increased investment  – the research and innovation 
ecosystem  with  the  green  and  digital  transition  in  mind;  further  improve  the  quality  and 
accessibility of education and training, again with a focus on digitalisation;  and establish an 
EU-compatible computerised transit system. 

 Chapter 10: Information society and media 

for  electronic 
The  EU  supports 
communications, electronic commerce and audio-visual services. The rules protect consumers 
and support universal availability of modern services. 

internal  market 

functioning  of 

the  smooth 

the 

Montenegro  remains  moderately  prepared  in  the  area  of  information  society  and  media. 
There  was  limited  progress  during  the  reporting  period,  in  particular  on  electronic 
communications and information technologies. Legislation to ensure the independence of the 
media  sector  from  undue  political  influence,  stepping  up  the  media  regulator’s  enforcement 
capacity  and  ensuring  sufficient  administrative  capacity  to  enforce  the  acquis  remain  to  be 
adopted. The recommendations of the previous reports remain therefore largely valid. 

In the coming year, Montenegro should in particular: 

  complete legislative alignment in particular on audiovisual media and  ensure operational 

independence of the media regulators and the public service broadcaster, 

83 

 
 
  progress  in  granting  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 in particular audio-visual 
media services, including as regards regulatory independence. 

The  Ministry  of  Economic  Development  is  in  charge  of  electronic  communications  and 
information technologies.  

The adoption of the national plan for the development of next-generation access networks, as 
well as drafting respective legislation have been postponed due to the COVID-19 pandemic. 
Mapping  of the electronic communication infrastructure was concluded,  as a prerequisite to 
installing  the  5G  network.  Following  the  signature  of  the  Regional  Roaming  Agreement  in 
2019,  Montenegro  signed  in  November  2020  the  Memorandum  of  understanding  on  a 
roadmap  for  the  5G  digital  transformation  of  the  six  economies  of  the  Western  Balkans. 
Reducing the prices of roaming services across the region continued and users are charged as 
in their home network since July.  

The  112  European  emergency  number  is  functioning.  Its  software  and  hardware  were 
modernised in preparation for advanced services such as e-call, expected in 2021. 

Information  society  is  under  the  responsibility  of  the  Ministry  of  Public  Administration, 
Digital Society and Media. Amendments to the Law on Information Security were adopted in 
April  2021.  Seeing  some  consolidation,  the  e-government  portal  currently  supports  523 
electronic  services  (2019:  598  electronic  services)  by  50  institutions.  In  June  2020,  the 
Parliament  legally  transferred  the  Cyber  Incident  Response  Unit  to  the  National  Security 
Authority.  

On  audio-visual  policy,  the  regulatory  agency  for  electronic  media  (AEM),  continued  to 
exercise  its  mandate  in  a  professional  manner.  An  overlap  in  jurisdiction  remained  as 
concerns to oversee the media during elections. AEM should be the only body responsible for 
supervising broadcasters during elections. The Agency still lacks the authority and measures 
to effectively monitor and penalise broadcasters. AEM improved its operational efficiency by 
procuring a monitoring software. Legal provisions and AEM’s operational capacity remain to 
be strengthened. The AEM, together with universities and UN agencies implemented a series 
of webinars on media literacy aimed at high school teachers, students, parents and journalists.  

Adoption  of  the  Law  on  audio-visual  media  services  (LAVMS)  is  planned  for  2021,  along 
with  amendments  to  the  Law  on  media  and  the  Law  on  the  national  public  broadcaster, 
adopted in July 2020. LAVMS needs to comply with the 2018 revision of the EU Directive on 
the  audio-visual  media  services,  recommendations  and  legal  opinions  of  Council  of  Europe 
and OSCE experts. The consistency of the three laws needs to be ensured and the legislative 
process  conducted  in  an  inclusive  and  transparent  manner,  in  dialogue  with  all  relevant 
stakeholders.  

The government provided financial support to the media sector to reduce the financial losses 
caused  by  the  COVID-19  pandemic.  It  launched  a  public  consultation  process  on  a 
comprehensive media strategy for the period 2021-2025 in April 2021. The AEM published 
an  ownership  overview  on  the  providers  of  audiovisual  media  services  in  May  2021. 
Digitalisation of the register for all media in Montenegro continued. 

84 

 
 
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.  Overall,  some  progress  was 
made  in  this  area.  Substantial  progress  was  made  on  implementing  the  WHO  Framework 
Convention  on  Tobacco  Control  on  marking  tobacco  products  and  alcoholic  beverages  with 
excise control stamp. Progress was limited in terms of addressing the issues highlighted by the 
TADAT (tax administration diagnostic assessment tool) analysis. Minor changes to legislation 
related to the value-added tax (VAT) and other tax exemptions were adopted. Therefore, the 
recommendations related to TADAT analysis and VAT exemptions from 2020 remain valid.  

In the coming year, Montenegro should in particular:  

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

analysis;  

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

the EU acquis; 

  adopt a strategic plan in order to further develop capacities of the Revenue and Customs 

Administration and to prevent the outflow of qualified and trained staff . 

In the area of indirect taxation, amendments to the Law on VAT were adopted in July 2020 
and in May 2021. The amendments introduce a reduced VAT rate of 7 % for some activities, 
notably  in  the  hospitality  sector.  Following  the  reform  on  electronic  fiscalisation,  taxable 
persons can now issue electronic invoices in accordance with the law governing the electronic 
document.  Another  new  provision  allows  taxpayers  to  submit  monthly  VAT  return  solely 
electronically, which is in line with the EU acquis. 

Following the amendments to the Law on excise duties in 2020 introducing the information 
system for electronic exchange of excise data, the Ministry of Finance adopted implementing 
legislation in December 2020 concerning the related information system. As of January 2021, 
a  new  IT  system  is  operational,  enabling  the  collection,  recording,  storage,  processing  and 
submission  of  data  on  excise  duties  in  electronic  form.  As  of  February  2021,  the  Customs 
Administration  started  implementing  a  new  system  for  electronic  management  of  excise 
stamps.  In  February  2021,  the  Government  amended  the  decree  on  the  marking  of  tobacco 
products and alcoholic beverages with excise stamps.  

As regards direct taxation, the Law on corporate income tax remains to be aligned with the 
EU  acquis  as  concerns  a  common  system  of  taxation  applicable  to  parent  companies  and 
subsidiaries from the EU Member States as well as a common system of taxation applicable to 
interest and royalties paid by associated companies of EU Member States.  

On  administrative  cooperation  and  mutual  assistance,  in  May  2020,  the  government 
adopted the decree amending the conditions for postponing the collection of due tax and non-
tax receivables. Amendments to the Law on tax administration to align with the EU acquis on 
the  mandatory  automatic  exchange  of  tax  information  remain  pending.  Montenegro  has 
completed double taxation agreement with 22 EU Member States.  

On operational capacity and computerisation, the Administration for Games of Chance, the 
Tax Administration and the Customs Administration were merged into a single body in April 
2021. The electronic fiscal invoice system (e-fiscalisation) was launched in January 2021. In 
December 2020, amendments to the Law on fiscalisation in the trade of products and services 

85 

 
 
were adopted, aiming to introduce the new system of recording trade in products and services 
via  electronic  devices.  In  December  2020,  the  government  adopted  a  decree  outlining  the 
detailed procedure of the fiscal memory of the tax cash register, which entered into force on 1 
January  2021.  The  Revenue  and  Customs  Administration  still  needs  to  adopt  a  human 
resources  strategy  as  well  as  a  personnel  and  training  plans.    In  order  to  prepare  the 
administration  for  the  exchange  of  information  for  tax  purposes,  a  readiness  assessment  is 
underway.    Montenegro  does  not  yet  have  sufficient  technical  capacity  nor  appropriate 
infrastructure to apply the EU IT systems, such as Excise Movement Control System (ECMS) 
and the VAT Information Exchange System (VIES).   

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  recommendations,  primarily  on 
implementation of the action plan for alignment with the EU  acquis. Limited administrative 
capacities and insufficient resources of the Montenegrin Statistical Office (Monstat) continue 
to  hamper  progress  in  this  chapter.  The  government  adopted  and  submitted  its  2021-2023 
Economic Reform Programme (ERP) with a considerable delay, which did not allow for a 
detailed  Commission  assessment  of  the  macroeconomic  and  fiscal  programmes.  The  fiscal 
timely 
framework  is  subject 
implementation of the ERP reform measures is not adequately ensured. 

to  sizeable  risks  and  uncertainties.  The  quality  and 

Last year’s recommendations remain valid. Therefore, in the coming year, Montenegro should 
in particular: 

  continue to implement the revised action plan for alignment with the EU acquis under this 

chapter; 

  ensure adequate capacities, cooperation and coordination of tasks between the Ministry of 
Finance, the Central Bank of Montenegro and Monstat on the production of government 
finance statistics and fiscal notifications aligned with ESA 2010 methodology. 

Montenegro does not have standard monetary policy tools at its disposal, as it uses the euro 
as  legal  tender,  leaving  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. 

After  legal  consultations  with  the  European  Commission  in  the  course  of  2020,  the  Central 
Bank of Montenegro started working on amendments to the Law on Central Bank, which are 
to be adopted in the fourth quarter of 2021. The EU rules prohibiting privileged access by the 
public  sector  to  financial  institutions  need  yet  to  be  introduced  in  the  law  on  insurance. 
Following the decision of the European Central Bank on a backstop facility for central banks 
outside the euro area, in June 2020 Montenegro got access to the Eurosystem repo facility for 
central  banks  (EUREP),  designed  to  address  pandemic-related  euro  liquidity  needs.  The 
EUREP line allows Montenegro to apply, in case of need, for systemic liquidity support funds 
of up to EUR 250 million until March 2022. 

On economic policy, efforts need to be stepped up to ensure full alignment with the Council 
Directive on requirements for budgetary frameworks of the Member States. The strategy for 
implementation of methodology of the European System of National and Regional Accounts 
standards  (ESA  2010)  in  the  public  finance  statistics  of  Montenegro,  which  suffered 

86 

 
 
implementation delays in the last years, should be revised in the course of 2021. Considerable 
delay  with  the  introduction  of  accrual  accounting  and  production  of  government  finance 
statistics based on ESA 2010 standards needs to be addressed.  

in  particular  excessive  deficit 
Montenegro`s  fiscal  notifications  remain 
procedures data.  Limited administrative capacity  and insufficient  resources of the  Statistical 
office  of  Montenegro  (Monstat)  hamper  progress  in  this  chapter.  Moreover,  systematic 
cooperation and coordination of tasks between the Ministry of Finance, the Central Bank of 
Montenegro  and  Monstat  on  the  production  of  necessary  statistics  need  to  be  adequately 
addressed.  

incomplete, 

The amendments to  the  Law on budget  and  fiscal  responsibility, which  provides the formal 
framework  for  Montenegro’s  fiscal  policy,  open  the  way  to  the  establishment  of  an 
independent fiscal council in the near future. This new body should strengthen the oversight 
of the fiscal policy in the country. Some new elements of programme budgeting and medium-
term planning were included in the 2021 budget. However, the development of performance 
indicators is still ongoing.  

The  government  adopted  and  submitted  its  2021-2023  Economic  Reform  Programme 
(ERP)  with  a  considerable  delay,  on  1  April  2021.  Montenegro  made  an  effort  to  provide 
informally  parts  of  a  draft  ERP  in  February  and  March.  Preliminary  macroeconomic  and 
fiscal figures were amended in the final version, and these last-minute changes and the delay 
together with the absence of statistical tables in the annex did not allow for a full-fledged and 
detailed Commission assessment, in particular of the macroeconomic and fiscal outlook. The 
fiscal  framework  is  subject  to  sizeable  risks  and  uncertainties.  The  new  government  is 
engaged in  developing  a new medium-term  fiscal  strategy to  consolidate  public finances by 
strengthening budget revenues and phasing out crisis-related spending. Due attention should 
be  given  to  the  quality  of  design  and  timeline  of  implementation  of  economic  policy 
measures. 

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 and promote social dialogue.  

Montenegro  has  some  level  of  preparation  on  social  policy  and  employment.  Limited 
progress was made during the reporting period, including the deployment of the labour law 
and adoption of the new law on pensions.  

The  recommendations  from  last  year’s  report  remain  largely  valid.  In  the  coming  year, 
Montenegro should in particular: 

  continue the implementation of the labour law, and develop quality employment measures 
aimed  at  young  people  and  women,  people  with  disabilities,  minorities  and  vulnerable 
persons impacted by the pandemic. In parallel, take steps to establish and implement the 
Youth Guarantee by developing a Youth Guarantee Implementation Plan in line with the 
EU model and guidance; 

  introduce measures to address the grey economy, including a review on the impact of the 
labour  tax  wedge,  and  put  in  place  changes  which  will  improve  issues  related  to  health 
and safety at work; 

  based on the Roadmap of Social Protection Reform, continue the evidenced based reform 
of the social protection system, keeping in mind links to employment activation and social 

87 

 
 
inclusion with an anti-poverty focus. In parallel, continue to make concrete steps towards 
deinstitutionalisation.  

The full roll out of the labour law and the alignment of anti-discrimination law with the EU 
acquis was overtaken by the need of institutional arrangements responding to the COVID-19 
crisis.  Given  the  importance  of  the  labour  law,  adequate  monitoring  of  implementation 
remains crucial. The amendments to the Law on pensions and Disability Insurance, capping 
the pensionable age for men at 66 years and aiming to reach a pensionable age of 64 years for 
women  by  2018,  raising  the  minimum  pension  from  EUR  128.82  to  EUR  145.77  and 
increasing the  average pension rates, and the  Law on the labour fund,  were  adopted in  July 
2020.  Furthermore,  amendments  to  the  Labour  Law  raising  the  minimum  wage  from  EUR 
222 to EUR 250 as of 1 October 2021, as well as to the Law on Social and Child Protection 
granting  universal  benefits  to  all  households  with  children  under  the  age  of  6  years,  were 
adopted  in  May  2021.    Following  the  re-organisation  of  state  bodies  after  the  elections,  the 
competences of the Ministry of Labour and Social Welfare were transferred to the Ministry of 
Finance and Social Welfare and the Ministry of Economic Development. The relevant chapter 
working  group,  which  should  include  social  and  civil  society  partners,  is  yet  to  be  fully  re-
established. 

Concerning  health  and  safety  at  work,  the  rulebook  on  occupational  safety  and  health 
measures in the working environment and working surrounding was adopted in October 2020, 
ensuring  partial  alignment  with  the  relevant  EU  acquis.  The  occupational  safety  and  health 
fund  foreseen  under  the  sector  strategies  (2010-2014  and  2016-2020)  remains  to  be 
established. Labour inspection continued to suffer from structural and functional deficiencies 
compounded by the pandemic. Further efforts are needed to develop an appropriate legislative 
framework,  provide  enough  resources,  produce  a  modernised  planning  of  labour  inspection 
activities and improve coordination among the different inspection bodies. From 15 June 2020 
to 15 June 2021, there were 21 accidents at work, of which three were fatal, 17 were serious, 
while one was reported as a collective accident. 

On  social  dialogue,  the  implementation  of  the  related  provisions  of  the  Labour  Law  are 
pending. The foreseen general collective bargaining agreement (at national level) is still not 
finalised.  The  tripartite  Social  Council  resumed  work  in  March  2021,  however  it  remains 
important that it is effectively involved in policy making.  Social partners have been generally 
consulted on the economic support packages designed to mitigate the impact of the restrictive 
measures resulting from the COVID-19 pandemic. 

On  employment  policy,  appropriate  monitoring  of  the  implementation  of  the  national 
strategy for employment and human resources development remains difficult due to the lack 
of  systematically  collected  data.  The  effectiveness  and  coverage  of  active  labour  market 
policies,  which  should  be  in  place  to  assist  job  seekers  finding  employment,  remains 
insufficient. The ratio of workers of the Employment Agency between branch offices and at 
central level should be reviewed. Montenegro has seen a decline in the employment rates (20-
64)  from  66.2%  in  2019  to  61.5  %  in  2020.  The  unemployment  rate  for  persons  (15-64) 
increased to 18.3% during 2020. Regional disparities persist with unemployment higher in the 
north at 42.2% and 4.6% at the coast at the end of 2020 according to national statistics. Long-
term unemployment remains the major structural challenge, with 76.3% of 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.  The  share  of  young  people  (15-29)  not  in 
education, employment or training (NEET) has increased between 2019 and 2020 from 21.3% 
to 26.6%. Montenegro has endorsed the Western Balkans Declaration on ensuring sustainable 
labour  market  integration  of  young  people  (8  July  2021)  and  has  also  committed  to  taking 

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concrete steps to implement the Youth Guarantee scheme while first moves have been taken 
on the expected deliverable being the scheme’s implementation plan. Sustained efforts remain 
crucial  to  tackle  the  informal  economy,  along  with  reinforcement  of  labour  inspections. 
Reviewing the high labour tax wedge and planning a feasibility analysis and consultation on 
the tax and social security financing system have not been undertaken. No linkage yet exists 
between the database of the Employment Agency and the Tax Administration, which would 
be  a  step  forward  to  better  address  issues  related  to  the  informal  economy.  In  addition, 
enhanced  coordination  between  the  Employment  Agency  and  social  welfare  centres  is  still 
required. Building stronger links between employment and social services remains crucial in 
order to remove potential disincentives to employment. 

As  regards  the  European  Social  Fund  (ESF),  implementation  of  the  second  operational 
programme for human resources development (2015-2017) is ongoing. In addition, in order to 
respond  to  the  COVID-19  pandemic  during  2020  the  EU,  working  with  Montenegro,  also 
reallocated EUR 50.3 Million of  IPA funds in  order to  support the education, health, social 
and  economic  sectors.  (See  Chapter  22  -  Regional  policy  and  coordination  of  structural 
instruments) 

Despite  the  strain  created  by  the  crisis  response  to  COVID-19  the  reform  process  on  social 
protection  and  inclusion,  the  review  of  the  social  protection  system  was  finalised  and  a 
Roadmap  of  Reforms  was  adopted  in  July  2021.  Overall,  the  social  protection  sector  faced 
serious  human  resource  and  capacity  limitations.  While  financial  assistance  was  provided, 
focus on strengthening family and community-based services was limited. Centres for social 
work, which should be more proactive in combatting the crisis, continue to be understaffed. 
The  implementation  of  the  integrated  social  welfare  information  system  (SWIS)  continued, 
operating in all centres for social work and social and child protection institutions, but there is 
limited data on results due to shortcomings in monitoring. Some measures of the 2020 Action 
Plan on the Implementation of the Strategy for Development of the Social Welfare System for 
the Elderly 2018-2022 were implemented, however no adequate monitoring mechanisms and 
reports are yet available and so conditions for evidence-based policy-making are not in place. 
Moreover, social welfare centres require strengthened capacities in order to help bring about 
the transition from institutional service provision to community-based care. The Institute for 
Social  and  Child  Protection,  which  currently  employs  20  staff  members,  is  in  need  of 
resources  while  social  services  provided  at  local  level  are  still  deemed  inadequate,  with 
municipalities being short of funds. According to the survey of income and living conditions 
(SILC) data for 2019, the national at-risk-of-poverty rate was 24.5 % whereas for children it 
stood at 33.7 % (a 1.3 percent increase) and has been on the rise since 2016. The impact of 
COVID-19  will  only  be  seen  in  future  editions  of  SILC.  On  de-institutionalisation  of 
children in care, insufficient progress has been made to continue the transition to community 
and family-based services. Although there was a slight decrease in the number of children in 
institutional care in 2020, there has been a 30% increase recorded in 2021 in the number of 
children  without  parental  care  since  December  2020.  While  the  country  introduced  the 
‘Family Associate’ system, it has not yet introduced professional foster care. The Council for 
the  care  of  persons  with  disabilities  was  re-established  in  June  2020  but  the  members  still 
need to be appointed. 

On  non-discrimination  in  employment  and  social  policy,  the  draft  Law  on  Professional 
Rehabilitation and Employment of Persons with Disabilities, is still pending adoption with the 
draft law on Unified Disability Determination system is prepared to be adopted by the end of 
the  year.  Services  provided  by  civil  society  organisations  continue  to  face  administrative 
constraints, including the lack of proper licences. In late 2020, the Ministry of Justice, Human 
and Minority Rights initiated a new Roma inclusion strategy for 2021-2025, in line with the 

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new EU Roma strategic framework for equality, inclusion and participation for the period of 
2020-2030.  The  official  response  to  the  pandemic  lacked  a  focus  on  Roma  and  Egyptian 
community. Efforts are still required in the roll out of the lesbian, gay, bisexual, transgender, 
intersex and queer (LGBTIQ) strategy (2019-2023) for which a national team for monitoring 
implementation was established in August 2019. Moreover, civil society organisations remain 
insufficiently involved in decision-making. 

On  equality  between  women  and  men  in  employment  and  social  policy,  the  COVID-19 
outbreak  illustrated  the  need  to  foster  flexible  working  arrangement  policies  in  order  to 
increase  labour  market  participation  of  women  and  youth,  enhance  overall  productivity  and 
decrease  costs  incurred  on  paid  leave  due  to  inability  to  attend  the  office/workplace.  Issues 
such the gender gap in employment and pay, sexual harassment in the workplace, affordable 
childcare, unpaid work and tax benefit systems, remain unaddressed. In 2020 the employment 
rate for the population aged 20-64 was 48.8% for women and 61.7% for men, a gender gap of 
12.9  percentage  points.  Efforts  are  needed  to  put  in  place  legislative  and  non-legislative 
measures focused on work-life balance. 

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. 

Montenegro  is  moderately  prepared/has  a  good  level  of  preparation  on  enterprise  and 
industrial  policy.  Some  progress  was  made  on  implementing  the  industrial  policy,  as  per 
2020  recommendation.  Substantial  efforts  were  made  to  develop  emergency  support  to 
enterprises  during  the  economic  crisis  caused  by  the  COVID-19  pandemic.  Both  inter  and 
intra-ministerial  cooperation  on  technical  and  political  level  should  be  reinforced  to  ensure 
consistency of different national strategies and programmes, including industrial policy, smart 
specialisation and the Economic Reform Programme.  

In the coming year, Montenegro should: 

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

with  relevant stakeholders and in the view of the COVID-19 special measures; 

  accelerate  legal  alignment  with  the  EU  acquis,  notably  by  adopting  amendments  to  the 

law on deadlines for settlement of monetary obligations; 

  enhance  efforts  to  ensure  continuous  coordination  of  the  industrial  policy  with  other 

national key strategies. 

On  enterprise  and  industrial  policy  principles,  no  alignment  initiatives  were  finalised  in 
2020.  The  ongoing  alignment  with  the  EU  acquis  on  combating  late  payments,  through 
amendments to the law on deadlines for settlement of monetary obligations, is planned for late 
2021. 

On  enterprise  and  industrial  policy  instruments,  Montenegro  continued  to  implement 
different  programmes  for  the  development  of  entrepreneurship  and  private  sector  under  the 
overarching Programme for Improving the Competitiveness of the Economy. The Programme 
offers financial support to micro, small  and medium enterprises as well as large companies. 
While  the  financial  allocations  in  2020  increased  significantly  (mainly  because  of  the 
COVID-19 support allocations) to EUR 5.08 million overall, the actual support granted to 332 
companies amounted to EUR 1.82 million. Nonetheless, the number of supported companies 
increased by 8% and the total amount of support by 9% in comparison to 2019.  

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The Investment and Development Fund of Montenegro (IDF) provided financing worth EUR 
284.7 million to the Montenegrin enterprises. The IDF, with its financial support programmes, 
was  included  in  the  government’s  efforts  to  mitigate  the  consequences  of  the  COVID-19 
pandemic.  Several  programmes  to  improve  liquidity  among  companies  and  different  other 
instruments  (such as loan extensions  and grace  periods on interests) were used.  In addition, 
IDF  approved  60  loans  in  amount  of  EUR  5.8  million  under  the  EU  programme  for  the 
Competitiveness of Enterprises and SMEs (COSME) Guarantee Fund. 

On sectoral  policies, the implementation  of the  Industrial  Policy of Montenegro up to  June 
2020 progressed largely in line with its action plan and resulted in investments of EUR 351.84 
million or 85.74 % of the planned allocations. In July 2020, however, the government adopted 
a new action plan, focusing on the COVID-19 response. The government also adopted a new 
strategy  for  lifelong  entrepreneurial  learning  2020-2024  in  May  2020,  accompanied  by  an 
action  plan  for  2020-2021.  The  strategy  for  the  development  of  women's  entrepreneurship 
2021-2024 is not yet adopted. The innovation activities would benefit from the improvement 
of  the  legislation  on  patents  (Chapter  7).  Both  inter  and  intra-ministerial  cooperation  on 
technical and political level should be reinforced to ensure the consistency and coherence in 
the  implementation  of  different  national  strategies  and  programmes,  including  the  industrial 
policy,  the  smart  specialisation  and  the  Economic  Reform  Programme.  The  number  of 
different  sectoral  strategies,  actions  plans  and  reports  could  be  decreased,  and  activities 
consolidated to facilitate the efficient management of the enterprise and industrial policy.  

The process of company registration was greatly simplified, with the introduction of a single 
registration application, replacing 16 different forms used previously. The centralised registry 
of  all  fiscal  and  para-fiscal  charges  on  central  and  local  level  was  developed,  increasing 
transparency  for  businesses.  The  secondary 
legislation  on  electronic  payment  of 
administrative fees was adopted, enabling the launch of the national system for collection of 
administrative fees. To ensure further progress in the company registration process, an action 
plan for improving the position of Montenegro on the Doing Business List was adopted.  

The  government’s  programme  to  support  the  economy  and  employees  during  the  COVID 
pandemic responded to 63 thousand requests for subsidies totalling EUR 63.5 million in the 
period  of  April-December  2020.  Among  other  measures,  payments  were  made  to  subsidise 
salaries  of  employees  from  15  800  businesses.  In  the  period  of  January-June  2021, 
prolongation  of  the  measures  saw  salary  subsidies  paid  to  3  900  companies  and  the  total 
amount of subsidies to businesses amounted to EUR 27.5 million.  

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 good level of preparation in this sector. Some progress was made on the 
two 2020 recommendations through continued implementation of the Smart Specialisation 
Strategy and increased participation in Horizon 2020. 

In the coming year, Montenegro should in particular. 

  further  advance  implementation  of  the  Smart  Specialisation  Strategy;  adopt  relevant 

implementing legislation; establish the Innovation Fund and make it operational; 

  strengthen  academia-business  cooperation  and  the  knowledge  transfer  between 

academia and the private sector; 

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  intensify investment in research and innovation and continue to increase participation 

in the new EU programme Horizon Europe. 

On  research  and  innovation  (R&I)  policy,  implementation  of  strategies  continued  along 
with  promotion  and  support  for  innovative  projects  through  a  number  of  programmes, 
including pre-acceleration for start-ups. Implementing legislation is being developed based on 
the laws governing innovation activities and incentives for R&I development, which entered 
into  force  in  2020.  Implementation  of  the  action  plan  for  the  Programme  on  open  science 
principles  commenced.  The  University  of  Montenegro  adopted  the  open  access  to  research 
infrastructure policy in October 2020 following participation in the related Western Balkans 
support  programme  under  the  Regional  Cooperation  Council.  Next  year  funding  was 
recommended  for  the  two  centres  of  excellence  (food  and  biomedical  science  -  operational 
since January 2020), following positive reports by international evaluators.  

Latest  available  official  statistics  indicate  that  research  and  development  (R&D)  funding 
stood at 0.50 % of GDP in 2018 with an investment share of 0.19 % provided by the private 
sector. An increased budget in this area would support the country’s economic recovery, also 
given  the  relevance  of  innovation  to  the  Economic  and  Investment  Plan  for  the  Western 
Balkans. 

Montenegro progressed on implementing its Smart Specialisation Strategy (S3), in line with 
national  legislation  and  the  European  Commission’s  technical  recommendations  from  the 
2019 S3 assessment, through the development of operational programmes  linked to the four 
S3  strategic  priority  areas  (agriculture,  energy,  health,  tourism),  a  government  decision  in 
June 2021 to establish a national innovation fund as the S3 implementing body, and steps to 
define  a  multi-annual  financial  plan.  Further  work  is  needed  to  fulfil  the  missing  technical 
criteria  under 
information  and 
communications technology (ICT) cluster to further facilitate S3 implementation is underway. 
The Council for Innovation and Smart Specialisation strategy is the government management 
body.  Montenegro  improved  its  status  on  the  European  Innovation  Scoreboard  (EIS)  from 
being a modest innovator in 2020 to being an emerging innovator in 2021. The EIS monitors 
the effects of innovation policies, including S3 implementation.  

recommendations.  The  development  of  an 

these 

The  three  laboratories  (biotech,  industrial  design  and  data  centre)  at  the  innovation  and 
entrepreneurship centre ‘Tehnopolis’ are now fully equipped and became operational in late 
2020.  While  construction  works  on  the  science  and  technology  park  (STP)  in  Podgorica 
continue,  the  STP  is  already  implementing  several  national  and  international  training  and 
capacity building programmes for the innovation  community.  Both  the STP and Tehnopolis 
are  directly  involved  in  implementing  certain  measures  and  instruments  defined  by  the  S3. 
Implementation  of  the  13  projects  continues  to  benefit  from  the  EU-funded  collaborative 
grant scheme for innovative project ideas.  

Montenegro’s  success  rate  in  the  EU  Horizon  2020  programme  is  13,2%,  well  above  the 
average  of  12,1%.  Negotiations  are  at  an  advanced  stage  for  participation  in  the  new  EU 
programme Horizon Europe 2021-2027. 

In  2020,  Horizon  2020  cooperation  focused  on  promoting  Marie  Skłodowska-Curie  actions 
and participation in EU Horizon 2020 COVID-19 projects, as well as calls for proposals under 
the Green Deal for the Western Balkans. Cooperation was also expanded with the European 
Institute of Innovation and Technology, where the country is already participating in projects 
and  networks  on  raw  materials,  and  Montenegrin  institutions  have  expressed  interest  to 
participate in research and institutional support initiatives. 

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Montenegrin research teams enjoyed successful cooperation in numerous projects within the 
European  Cooperation  in  Science  and  Technology  (COST)  programme.  Montenegro  also 
continued active engagement with international bodies such as European Council for Nuclear 
Research  (CERN),  International  Atomic  Nuclear  Agency  (IAEA),  and  Exceptional, 
Unconventional  Research  Enabling  Knowledge  Acceleration  (EUREKA)  and  remains 
committed  to  participate  in  the  European  Social  Survey  European  Research  Infrastructure 
Consortium  (ESS-ERIC).  The  Montenegrin  diaspora  is  also  included  in  innovation  research 
programmes, including as evaluators of project applications. 

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.  

Montenegro has a  good  level  of preparation in  this  area.  Some progress was made on 
the  2020  recommendations  on  continuing  education  reform,  in  particular  on  Vocational 
Education  and  Training.  Other  recommendations  require  more  efforts.  The  COVID-19 
pandemic severely impacted the education sector whose response focused on maintaining 
continuity through distance learning. 

In the coming year, Montenegro should in particular: 

  intensify reform efforts to improve inclusive education and access to quality education 

at all education levels; 

  adopt and start to implement the new strategy on early and preschool education 2021-

2025, to help improve preschool enrolment and inclusivity for all children;  

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

both higher and VET level education. 

On education and training, implementation of various education strategies continued during 
2020. Progress was partially affected in 2021 due to the establishment of the new Ministry of 
Education, Science, Culture and Sports, and related staff changes. Spending on education was 
around 4% of GDP in 2020. The preschool enrolment rate stood at 52% in 2019/2020, well 
below  the  EU  95%  target.  The  COVID-19  pandemic  led  to  a  hybrid  system  of  regular  and 
online  schooling.  A  range  of  distance-learning  opportunities  was  provided  at  all  education 
levels, individualised teaching materials prepared for students with special educational needs, 
and a supply of computer tablets donated to support online classes. Efforts, however, should 
be  accelerated  to  address  the  learning  gaps  caused  by  digital  exclusion  as  experienced  by 
many  children  from  vulnerable  groups  who  lacked  technological  devices  or  internet  access.  
A  comprehensive  analysis  of  the  education  system  is  ongoing,  the  outcome  of  which  can 
serve as a solid basis for broad discussion - with all relevant stakeholders - on developing a 
qualitative, budgeted, multi-annual education strategy for sustainable reforms.  

Roma and Egyptian pupils were particularly impacted by the COVID-19 pandemic, although 
some  improvements  can  be  reported,  including  through  EU  projects  and  donor  support: 
additional free textbooks in primary schools, more mentors and associates engaged at primary 
and secondary schools (to provide learning support, ensure pupil attendance and prevent early 
dropouts,  and  as  a  link between  parents  and  schools),  and  free  transport  extended  for  about 
600  primary  school  students  in  Nikšić,  Podgorica,  Cetinje  and  Berane  municipalities.  The 
scholarship  scheme  for  Roma  and  Egyptian  students  at  secondary  and  university-level 

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continued, but  requires  more thorough implementation  to  ensure that monthly payments  are 
made on time.  

To  meet  the  needs  of  marginalised  groups,  54  modules  were  developed  for  acquiring 
professional qualifications from 16 educational programmes. Montenegro should ensure close 
synergy with the Poznan Declaration on Roma integration when implementing the strategy for 
inclusive education 2019-2025.  

Adoption  of  the  new  strategy  on  early  and  preschool  education  2021-2025  is  pending;  the 
main  goals  of  the  strategy  are  to  improve  the  quality  of  preschool  education,  increase 
enrolment  coverage,  and  improve  the  chances  for  early  development  of  children  from 
vulnerable  groups.    The  strategy  on  lifelong  entrepreneurial  learning  (2020-2024)  is  being 
implemented,  covering  entrepreneurial  learning  through  formal  education  at  all  education 
levels, as well as through non-formal education. Montenegro is developing key competences, 
specifically 
technology,  engineering  and 
mathematics)  and their integration in  the education system. The Self-reflection on Effective 
Learning by Fostering the use of Innovative Educational technologies (SELFIE) tool, which 
allows  for  annual  self-evaluation  on  the  use  of  digital  technologies  in  teaching,  is  being 
implemented in all primary and secondary schools.  

to  STEM  subjects  (science, 

linked 

those 

Reforms continued on Vocational Education and Training (VET) in line with the revised VET 
strategy  (2020-2024)  and  related  action  plans.  These  covered  quality  assurance,  VET 
qualification development and related practical experience, and key competence development, 
involving  cooperation  with  the  Chamber  of  Economy  and  the  business  community.  
Montenegro  remains  committed  to  implement  and  monitor  the  2015  Riga  Conclusions  on 
VET, and is a regular partner in the policy dialogue on VET reforms at EU and regional level. 
In  November  2020,  Montenegro  signed  the  Osnabrück  Declaration  2021-2025,  including 
commitments to the European Education and Training Area and the international dimension 
of VET. The second evaluation of dual education was finalised in December 2020, assessing 
the capacities and capabilities of all stakeholders involved in planning and implementing dual 
VET. The development of a structured monitoring and evaluation system for VET is ongoing.  

The  3+2+3  study  model  is  now  implemented  also  at  private  higher  education  institutions, 
mirroring the University of Montenegro (UoM) process. The Ministry of Education, Science, 
Culture and Sports plans to propose a new draft revised strategy for higher education to cover 
the  period  2021-2025.  It  has  also  formed  an  inter-ministerial  working  group  to  draft  a  new 
Law  on  Higher  Education.  Developing  a  structured  monitoring  and  evaluation  of  practical 
education  in  higher  education  programmes  is  an  area  that  requires  specific  attention. 
Regarding the 2019 Law on academic integrity, the new government appointed a new Ethics 
Committee  (responsible  for  the  protection  and  promotion  of  academic  integrity  and 
prevention  of  plagiarism),  replacing  previously  appointed  members.  Full  implementation  of 
this law and achieving tangible results remains important, particularly as education remains a 
vulnerable area for corruption.   

In 2020, Montenegro’s participation in the EU’s flagship programme Erasmus+ increased to  
1  549  incoming  and  outgoing  participants,  up  from  1  379  in  2019.  Eight  capacity  building 
projects  were  awarded  in  the  area  of  higher  education.  Two  Jean  Monnet  projects  were 
supported - including the first ever Jean Monnet Centre of Excellence project, at the UoM  - 
while two Erasmus Mundus Joint Master Degrees had associates from Montenegro, and four 
Erasmus Mundus Joint Master Degree scholarships were awarded.  

Due to COVID-19, little progress was made to further implement Montenegro’s Programme 
for International Student Assessment (PISA) action plan and recommendations for improving 

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education quality. Montenegro is taking part in the Progress in International Reading Literacy 
Study (PIRLS) 2021 assessment as well as PISA 2022. 

On  culture,  funding  continued  during  2020  for  creative  and  cultural  projects  (including  to 
civil  society  groups)  and  provided  support  to  protect  the  socio-economic  interests  of 
unemployed  artists  and  various  operators  adversely  affected  by  the  COVID-19  pandemic. 
Support for cultural and creative projects was, however, not carried out as planned during the 
first  half of 2021, due to  government  restructuring and legislative delays. Work on the next 
culture programme covering 2021-2025 is ongoing. Most municipalities have their own centre 
or  secretariat  for  culture.  Montenegro  applied  for  association  with  the  next  EU  Creative 
Europe  programme  and  continued  participation  in  cross-border  cooperation  on  cultural 
matters funded through IPA. Continued attention should be given to the full implementation 
of  protection  measures  to  maintain  the  preservation  of  Kotor's  UNESCO  World  Heritage 
status, 

Implementation  of  the  Youth  Strategy  2017-2021  continued  while  technical  amendments 
were  made  to  the  Law  on  youth  to  define  competencies  of  the  new  Ministry  of  education, 
science,  culture  and  sports.  The  Directorate  for  youth  and  sport  –  which  is  now  the 
administrative  body  of  this  new  Ministry  –  concluded  stakeholder  consultations  aimed  at 
developing new strategic youth priorities.  In this regard, a more inclusive approach targeting 
youth  with  disabilities,  minority  groups  and  those  from  rural  areas  is  essential.  All 
municipalities have approved youth action plans and, in 2020, some additional youth antennae 
structures were opened. Contracts, however, for local youth administrators were not extended 
(from  mid-2021)  and  the  new  recruitment  process  has  yet  to  be  launched.  The  ‘youth 
network’ – as the National Youth Council, established in 2020 as a representative association 
of NGOs implementing youth policy in Montenegro - is currently developing its first 4-year 
strategic plan under the  Western Balkans Youth  Lab project  and has taken relevant  steps to 
join the European Youth Forum.  

On sport, the Ministry of Education, Science, culture and sports signed an agreement with the 
national statistics office (MONSTAT) aimed at improving the registration procedures of sport 
organisations. 

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 the customs union. It made  some progress during 
the  reporting  period,  advancing  preparations  for  accession  to  the  Convention  on  common 
transit procedure,  and implementing actions foreseen in the trade facilitation strategy 2018-
2022, thus partially fulfilling last year's recommendations. The reorganisation of the customs 
administration in April 2021 may affect ongoing customs programmes and capacity building 
in this field. Significant challenges remain in reducing illicit tobacco trade through the port of 
Bar. 

In the coming year, Montenegro should in particular:  

  finalise  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 2021-2023;  

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  carefully monitor the impact of the reorganisation in the customs administration in terms 
of  capacity  building  and  enhance  efforts  to  ensure  adequate  staffing  levels  for  the  IT 
department. 

On customs legislation, the degree of alignment with the EU acquis is high. The adoption of 
the  new  Customs  Code,  fully  aligned  with  the  Union  Customs  Code,  and  its  implementing 
legislation, are pending. Preparations for the ratification of the Law on accession to common 
transit  convention  and  the  Convention  on  facilitation  of  trade  in  goods  progressed  on 
schedule. 

In  March  2021,  the  government  adopted  implementing  legislation  on  the  customs  tariff  for 
2021,  harmonising  the  level  of  customs  rates  with  the  obligations  undertaken  within  the 
World  Trade  Organization  (WTO)  and  other  international  agreements  concluded  by 
Montenegro. This regulation also harmonises the national nomenclature of the customs tariff 
with the combined nomenclature of the European Union for 2021. 

Montenegro  is  implementing  the  Regional  Convention  on  Pan-Euro-Mediterranean  (PEM) 
preferential  rules  of  origin.  The  country  implemented  the  Authorised  Economic  Operators 
(AEO) programme and, in 2020, two authorisation were granted to large economic operators.  

Further  alignment  of  legislation  on  drug  precursors  and  customs  security,  together  with 
adoption of implementing legislation on the export control of cultural goods remain pending. 
Fees continue to be 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,  the  Customs  Administration  became  part  of 
the  newly  established  service,  Revenue  and  Customs  Administration,  in  April  2021.  The 
reorganisation affected many expert and management positions and its possible impact on the 
functioning of the services as well as on ongoing EU support programmes, and needs to  be 
carefully monitored. 

The  IT  department  has  been  reinforced  to  a  limited  extent  with  two  new  employees,  while 
four  more  posts  are  foreseen.  Continuous  development  and  adequate  staffing  of  the  IT 
department is essential for implementation of ongoing and complex future IT projects. 

In March 2021, Montenegro was included in the Common Communications Network (CCN), 
thus achieving further operational progress towards accession to the Transit Convention and 
establishing  a  new  computerised  transit  system  (NCTS).  Since  January  2021,  several  IT 
systems  used  in  the  NCTS  are  tested  by  the  customs  staff  and  external  users.  Awareness 
raising session on the NCTS are organised for the trade community  and the banking sector. 
Functionalities of the risk management system have also been developed. Customs laboratory 
started  operating  in  September  2020  and  performs  analyses  of  oil  and  oil  derivatives  in 
accordance with the required standards, however the accreditation process is delayed. 

On the collection of customs debt, the adoption of the model for the write-off of the customs 
debt is pending. As of 1 January 2021, the new excise IT system is operational and enables 
the  collection,  recording,  storage,  processing  and  submission  of  data  on  excise  duties  in 
electronic  form.  In  addition,  the  system  will  enable  future  connection  with  the  EU  Excise 
Movement and Control System (EMCS).  

In the context of the COVID-19 pandemic, revenue collection by the Customs Administration 
in  2020  amounted  to  approximately  EUR  670  million,  which  is  18%  less  compared  to  the 
same period last year. The same trend is noted for the first quarter of 2021.  

As  a  party  to  the  WHO  Framework  Convention  on  Tobacco  Control  and  the  Protocol  to 
Eliminate  Illicit  Trade  in  Tobacco  Products,  Montenegro  has  to  establish  a  tracking  and 

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tracing system of tobacco products in order to improve supply chain control and enhance the 
fight  against  illicit  tobacco  trade.  Some  improved  features  (installed  ramps  and  cameras  for 
reading  plates  and  video  surveillance  at  the  entry-exit  points)  have  been  added  to  the  IT 
functionality in the port of Bar, ensuring better monitoring of tobacco movements and the port 
operators.  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.  In  April  2021,  the  Memorandum  of  understanding 
between the Customs Administration and ‘Philip Morris Montenegro’ was signed, specifying  
cooperation  in  the  field  of  information  exchange,  identification  of  illegal  products  and 
monitoring of movement of illegal tobacco products. The decision to prohibit the storage of 
tobacco products in the free zone of the port of Bar, taken by the government in July 2021, is 
welcomed, though its implementation will need to be closely monitored. 

CLUSTER 4: THE GREEN AGENDA AND SUSTAINABLE CONNECTIVITY  

This cluster covers chapters 14-transport policy, 15-energy, 21-trans-European networks and 
27-environment and climate change. All four chapters are open, with closing benchmarks that 
remain to be fulfilled in each chapter. This cluster and the reforms concerned have significant 
links  to  Montenegro’s  Economic  Reform  Programme,  the  Commission’s  Economic  and 
Investment Plan and the Green Agenda for the Western Balkans endorsed by Montenegro in 
November 2020. 

Limited  progress  was  achieved  in  removing  legal  obstacles  to  create  a  day-ahead  energy 
market;  advancing  preparatory  work  for  the  implementation  of  the  Transport  Development 
Strategy and in further alignment with the EU acquis, on nature protection and to develop the 
National Energy and Climate Plan. 

In  the  coming  period,  Montenegro  is  invited  to  focus  on  the  following  areas:  complete  key 
sector reforms in the transport area; complete legal alignment in the  energy sector; continue 
implementing the Transport Development Strategy, strengthen the administrative capacities to 
prepare for trans-European networks in the areas of transport, telecommunications and energy 
and  continue  to  harmonise  the  legal  framework  with  TEN-T  and  TEN-E  Regulations; 
considerably  step  up  ambitions  towards  a  green  transition  and  step  up  its  efforts  on 
implementation  and  enforcement,  in  particular  on  waste  management,  water  quality,  nature 
protection and climate change. 

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 
so the previous recommendations remain valid.  

In  addition  to  addressing  the  shortcomings,  in  the  coming  year,  Montenegro  should  in 
particular: 

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

body and the railway safety authority; 

  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 on port state control. 

On  general  transport,  implementation  of  the  2019-2035  transport  development  strategy  is 
lagging  behind,  as  the  2021-22  action  plan  is  yet  to  be  prepared.  The  strategic  framework 
shall be further aligned with the European Union`s Sustainable and Smart Mobility Strategy. 
Montenegro  has  yet  to  decide  on  seasonal  changes  of  time  and  would  need  to  align  its 
legislation  concerning  summertime  arrangements  accordingly.  There  was  no  further 
alignment with the EU acquis concerning public service obligations, procedures and criteria 
for the award of public service contracts in road, rail and maritime transport. 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 remains to be strengthened.  

The Ministry of Transport and Maritime Affairs became part of the new Ministry of Capital 
Investments.  The  reorganisation  led  to  the  resignation  of  experienced  staff  and  there  is  an 
urgent need to rebuild capacity of staff working in regulatory functions.  

On road transport, in July 2020, the new Law on roads was adopted, while the legislation on 
Intelligent  Transport  Systems  and  the  strategic  framework  remains  to  be  adopted.  In  June 
2021,  the  Government  of  Montenegro  has  established  a  national  body  for  coordination  and 
inter-institutional  management  of  road  safety.  The  reform  of  the  inter-city  transport  of 
passengers  envisaged  under  the  Economic  Reform  Programme  is  pending  decision  on  the 
concrete actions  to  be taken. Montenegro is  applying digital  tachographs, but  remains to  be 
aligned with the EU acquis on smart tachographs. The amendments to the Law on transport of 
dangerous  goods  and  to  the  Law  on  contracts  on  carriage  in  road  transport  have  not  been 
adopted yet and the national body for the control of transport of dangerous goods has still not 
been set up.  

A biannual 2020-2022 programme for road safety improvement is in place to implement the 
Law on road traffic safety. Montenegro shall strive to develop a long-term road safety strategy 
and action plans, in line with the EU Road Safety Policy Framework 2021-2030.  The aim is 
to halve the number of fatal and serious road traffic injuries, which is still well above the EU 
average.  The  ongoing  2019-2022  programme  for  the  reconstruction  of  state  roads  has  the 
potential  to  improve  Montenegro’s  road  safety  records.  However,  the  lack  of  service  level 
agreements  between  the  Ministry  of  Capital  Investments  and  road  authorities/public 
enterprises may hamper the implementation and sustainability of the programme.  

On rail transport, the adoption of the new  railway law  was postponed  again.  The Railway 
Administration  operates  as  an  independent  administrative  authority,  but  its  safety  and 
regulatory tasks remain to be specifically set out in the new railway law. Public transport and 
compliance  with  passengers’  rights  remain  a  concern.  Implementing  legislation  for  the 
interoperability  of  the  rolling  stock  subsystem  in  line  with  the  EU  acquis  was  adopted  in 
December 2020. The methodology for track access charges has not been updated since 2013 
and  it  is  only  partially  aligned  with  the  EU  acquis.  There  was  no  progress  on  full  market 
opening  for  passenger  and  freight  transport  services.  Sustainable  and  rationalised  railway 
infrastructure  reconstruction  and  multi-annual  maintenance  plans  need  to  be  urgently 
developed.  Montenegro  shall  strive  addressing  the  key  challenges  through  effective 
implementation  of  the  rail  action  plan  aiming  at  addressing  the  key  Transport  Community 
Treaty and regional priorities.  

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On maritime transport, no progress was made on achieving full member status of the Paris 
Memorandum  of  Understanding  on  Port  State  Control.  The  implementation  of  the  National 
Maritime Single Window, as well as the upgrading and extension of the current vessel traffic 
monitoring  and  information  system  have  been  further  delayed.  The  Law  on  ratification  of 
international  convention  on  oil  pollution  preparedness,  response  and  co-operation  was 
adopted in  May 2021.  Some amendments  to  the  Law on safety and maritime navigation,  as 
well as the Law on the rights of passengers in maritime and inland navigation were adopted in 
July  2020.  Montenegro  is  yet  to  align  with  the  EU  acquis  on  ports  and  to  adopt  legislation 
based on the Port Services Regulation.  

No  progress  was  made  on  the  alignment  with  relevant  EU  acquis  on  inland  waterway 
transport.  Due  to  the  limited  scope  of  the  inland  navigation,  the  legislation  should  mainly 
focus  on  classification  of  the  vessels  and  inland  waterways,  qualifications  for  inland 
navigation crews, requirements for safe navigation and delegation of administrative functions 
to authorised bodies. The law on merchant shipping remains to be adopted.  

On  aviation,  amendments  to  the  Law  on  air  transport  were  adopted  in  July  2020.  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.  The  adoption  of 
implementing  legislation  provided  further  alignment  in  air  safety  and  air  traffic  operations. 
The tender for the concession to operate Airports of Montenegro, launched in October 2019, 
was  suspended  in  2020.  The  process,  once  reactivated,  would  be  a  test  for  Montenegro’s 
commitment to comply with the EU standards of fair and transparent public procurement and 
State aid rules. The certification of airports in Podgorica and Tivat is still not completed, as a 
result  they  are  categorised  as  airports  with  no  designation  status.  In  December  2020, 
Montenegro  Airlines  permanently  stopped  its  operations  following  the  decision  of  the  state 
aid authority that declared the state aid to the airline illegal. In January 2021, the government 
established a new national airline branded “Air Montenegro”, which started operations in June 
2021. Any economic continuation should be eliminated between these two companies in line 
with competition and state aid rules.  

As  regards  combined  transport,  the  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.  

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. Limited progress was made 
in  the  reporting  period,  with  the  amendments  to  the  Law  on  energy  that  removed  legal 
obstacles to create day-ahead energy market. Last year’s recommendations were not addressed. 
Many  legal  initiatives  are  still  pending  and  further  progress  in  this  chapter  is  conditional  on 
their adoption and implementation, including through the necessary implementing legislation.  

In the coming year, Montenegro should, in particular: 

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

markets, including Italy;  

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

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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 reserves. 

In  the  area  of  security  of  supply,  Montenegro  has  an  energy  development  strategy  up  to 
2030. The government adopted the energy balance for 2021 in November 2020. The revision 
of the 2015 action plan on compulsory strategic reserves of oil and petroleum products is still 
pending.  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. 

The Law on energy was amended in July 2020. Amendments relate in particular to facilitating 
the  development  of  the  first  National  energy  and  climate  plan,  the  generation  of  electricity 
from renewable sources or high-efficiency cogeneration for own needs and changes necessary 
for the functioning of organised day-ahead and intraday markets.  

A  Chinese-Montenegrin  consortium  signed  the  contract  on  the  ecological  reconstruction  of 
the Plevlja thermal power plant in 2020, but works have not yet started. Meanwhile, according 
to  the  data  provided  by  the  European  Network  of  Transmission  System  Operators  for 
Electricity (ENTSO-E) in November 2020, the plant exhausted its operating hours allocated 
under the EU’s Large Combustion Plants Directive (LCPD) “opt-out” derogation.  

The energy-related departments of the former Ministry of Economy became a Directorate in 
the newly created Ministry of Capital Investments in December 2020. Out of the 23 posts in 
the  Directorate,  20  are  currently  filled  by  the  former  employees  from  the  Ministry  of 
Economy.  

Concerning the internal energy market, in 2020 the Energy and Water Regulatory Agency 
of  Montenegro  adopted  several  decisions  related  to  the  conditions  of  service  and  pricing  of 
gas  and  electricity  supply  for  small  customers  and  households.  The  Agency  approved  rules 
concerning  allocation  of  transmission  capacities.  In  accordance  with  the  Energy  law,  the 
Montenegrin  power  exchange  (BELEN)  adopted  rules  of  organisation  and  functioning  of 
power  exchange  market,  enabling  the  procurement  of  electricity  to  cover  losses  in  the 
transmission  and  distribution  through  the  auction  system.  The  auction  for  losses  in  the 
transmission system for the first quarter of 2021 was organised in December 2020.  

A day-ahead electricity market is not  yet functional. Preparatory activities are underway for 
the selection of a service provider, following the termination of talks on strategic partnership 
with NordPool in June 2020. Preparatory work towards coupling of the electricity markets of 
Albania, Italy, Montenegro and Serbia was completed. The amendments to the Law on energy 
defined  the  roles  and  responsibilities  of  the  nominated  electricity  market  operator,  the 
transmission  operator  and  the  regulator  in  the  market  coupling  process.  The  Regulation 
1227/2011  on  Wholesale  Energy  Market  Integrity  and  Transparency  remains  to  be 
implemented. 

On hydrocarbons, national legislation is aligned with the Hydrocarbons Licensing Directive. 
The  Ministry  of  Capital  Investment  prepared  the  Law  on  Safety  Measures  in  Offshore 
Exploration and Production of Hydrocarbons to transpose the Safety of Offshore Operations 
Directive, but adoption of the law by the government is expected only in the fourth quarter of 
2021.  Montenegro  granted  two  concession  contracts  for  the  exploration  and  production  of 
hydrocarbons offshore of Montenegro. The drilling of exploration wells started in April 2021. 
The government also extended the exploration period for the second concession contract, by 
another  year.  It  remains  under  Montenegro’s  remit  to  ensure  compliance  of  the  concession 

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holders  with  environmental  liability  rules  and  rule  of  law  standards  through  contractual 
obligations. Work continued on the preliminary design of the Ionian-Adriatic Gas Pipeline. 

In  the  area  of  renewable  energy,  38.8%  of  gross  final  consumption  of  energy  came  from 
renewable sources in 2018, taking into account revision of biomass data (to be updated after 
the ISC, when new data become available). This exceeded the 33% target to be achieved by 
2020  under  Montenegro’s  national  action  plan.  Rules  for  auctions  granting  support  to 
renewable  energy  producers  compliant  with  the  guidelines  on  state  aid  for  environmental 
protection and energy remain to be adopted.  

In October 2020, the electric power company (EPCG) submitted to the Ministry of Economy 
a  concession  offer  on  the  construction,  maintenance  and  use  of  the  Komarnica  hydropower 
plant for electricity production. At the same time, the government concluded and terminated a 
number of  concession  agreements  for small  hydropower plants.  It  remains essential that the 
development of new projects, particularly on hydropower, be carried out in conformity with 
the EU acquis on concessions, State aid and the environment.   

In  the  area  of  energy  efficiency,  progress  was  achieved  on  alignment  with  the  EU  Energy 
Performance  of  Buildings  Directive  and  with  the  Labelling  Regulation,  as  the  process  of 
establishing  an  inventory  of  buildings  was  finalised  defining  reference  buildings.  In 
November  2020,  the  first  operational  version  of  the  software  for  the  calculation  of  energy 
performance of buildings was finalised (with the exception of energy performance certificates 
section).  The  Ministry  of  Capital  Investments  continued  the  implementation  of  projects  on 
energy  efficiency  improvement  for  the  public  and  the  household  sectors.  The  energy 
efficiency fund has not been established yet. There have been no developments on improving 
statistical  data  collection  and  on  monitoring  the  implementation  of  the  energy  efficiency 
action plan.  

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

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.  Limited  progress  was  made  in  the  reporting  period  on 
implementation  of  the  Transport  Development  Strategy,  mostly  by  advancing  preparatory 
work on various projects. Current and future infrastructure investments need to comply fully 
with  the  EU  standards  on  public  procurement,  state  aid  and  environmental  impact 
assessment.  The  investments  need  to  be  implemented  in  accordance  with  cost-benefit 
analyses carried out in line with the EU best practice.  

The  2020  recommendations  remain  valid,  and  in  the  coming  year  Montenegro  should  in 
particular:  

  continue  to  implement  the  Transport  Development  Strategy  and  adopt  a  related  annual 

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action plan addressing project absorption issues  and delays; 

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

transport, telecommunications and energy; 

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

On  transport  networks,  Montenegro  takes  part  in  the  Transport  Community  Treaty  (TCT) 
and  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  step  up  efforts  to  implement 
action plans on key Transport Community Treaty (TCT) and regional priorities. 

The 2019-2035 transport development strategy is in place, however the adoption of the action 
plan  for  2021-2022  is  delayed.  In  August  2020  the  government  adopted  a  single  project 
pipeline, which includes 58 projects in the energy, transport, environment and social sectors 
as  well  as  digital  infrastructure  worth  EUR  5.1  billion.  However,  the  cost  estimation  and 
maturity statements on transport projects remain outdated and the reconfirmation of the single 
project pipeline priorities by the new government is still pending. 

On infrastructure development, the construction of the Bar-Boljare highway on the priority 
section between Smokovac and Matesevo, which is being implemented with a Chinese loan,  
experienced  continuous  delays,  partly  due  to  COVID-19  pandemic,  and  cost  overruns.  The 
section is now expected to be finalised by the end of 2021. The project 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.  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  EU-financed  cost-benefit  analysis  for  the  entire  Bar-Boljare 
highway,  including  on  recommended  construction  standards  and  suggested  means  of 
financing for the remaining sections, which is expected in July 2021.   

The  work  on  design  studies  for  Budva  bypass  section  of  the  Adriatic-Ionian  highway 
progressed  very  slowly,  due  to  administrative  delays.  The  upgrading  of  the  Bar-Vrbnica 
railway continued with EU funding.  

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

On energy networks, progress continued on interconnecting the electricity systems of Serbia, 
Bosnia  and  Herzegovina,  Italy  and  Montenegro,  with  works  on  two  transmission  lines 
between Pljevlja (Montenegro) and Cevo and Bajina Basta – Visegrad (Serbia). Montenegro 
requested a change in the previously agreed route (from land to sea) of Montenegro's section 
of  the  Ionian-Adriatic  Gas  Pipeline  (IAP)  in  the  area  of  Kotor  Bay.  Planned  activities, 
including  development  of  EU-funded  preliminary  design,  preparation  of  environmental  and 
social  impact  assessment,  and  preliminary  investment  cost  estimate  on  the  Albania-
Montenegro section of the route were delayed on the Montenegro side pending confirmation 
on  the  exact  route.  Both  energy  projects  are  included  in  the  list  of  projects  of  Energy 
Community  interest,  adopted  by  the  Council  of  Ministers  of  the  Energy  Community  in 
December 2020.  

Montenegro  is  yet  to  align  fully  its  legislation  with  the  TEN-T  and  TEN-E  EU  acquis. 
Legislative gap analysis was prepared. 

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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.  Limited  progress  was  made  in 
further  alignment  with  the  EU  acquis,  on  nature  protection  and  to  develop  the  National 
Energy  and  Climate  Plan.  Significant  efforts  are  still  needed  on  implementation  and 
enforcement, in particular on waste management, water quality, nature protection and climate 
change.  In  the  coming  years,  Montenegro  should  considerably  step  up  ambitions  towards  a 
green transition. The 2020 recommendations remain valid. 

In the coming year, Montenegro should in particular : 

  effectively implement the action plan for the fulfilment of the closing benchmarks in the 
Chapter 27 upon schedule, especially in the waste, water and nature protection sectors; 

  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; 

  step up the development  of the national  energy and climate plan in  line with  the Energy 

Community recommendations. 

Environment  

On  horizontal  legislation,  in  November  2020,  the  government  adopted  the  final  report  on 
implementation of the national strategy for the transposition, implementation and enforcement 
of the acquis in the area of environment and climate change. According to the report, 229 out 
of 348 activities were completed for the period 2016-2020. Important achievements remain to 
be  completed,  such  as  in  the  waste  and  water  sectors  and  on  nature  protection.  In  October 
2020, the government adopted the report on the state of environment in Montenegro for 2019 
and the annual work programme and budget for the Eco Fund, which is now operational.  In 
February  2021,  the  government  adopted  the  action  plan  for  the  fulfilment  of  the  closing 
benchmarks  in  Chapter  27,  comprising  251  activities.  In  the  reporting  period,  Montenegro 
completed  20  strategic  environmental  assessments  (SEA)  and  101  environmental  impact 
assessments (EIA). On environmental liability, three procedures are ongoing. Monitoring on 
environmental crime continued. 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 remain challenges to be urgently addressed. 

In the area of air quality, in March 2021, the inventory of emissions of air pollutants for the 
period 1990-2019 was submitted to the European Environment Information and Observation 
Network  (EIONET)  and  the  Secretariat  of  the  Long-Range  Transboundary  Air  Pollution 
Convention.  The  Strategy  on  Air  Quality  Management  for  the  period  2021-2029  with  the 
Action  Plan  2021-2022  are  pending  adoption.  It  includes  air  quality  plans  for  the  three  air 
quality zones in Montenegro and an air pollution control programme. Montenegro continued 
with regular monitoring of fuel quality in line with the EU acquis.  

Regarding  waste  management,  Montenegro  remains  partially  aligned  with  the  EU  acquis.  
Considerable  efforts  on  strategic  planning  and  investments  are  needed  to  implement  the 
national strategy for waste management until 2030. Work on the Law on waste management 
continued during the reporting period. A new national waste management plan remains to be 

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drafted after expiry of the one for 2015-2020. The details of the country’s waste management 
model and the modalities of its implementation remain to be clarified. Awareness campaigns 
were conducted to promote waste separation and appropriate disposal. The list of unregulated 
landfills  was  updated,  in  collaboration  with  civil  society  organisations.  There  remains  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  remains  to  be 
established across the country.  

Alignment on  water quality remains  limited. Water management plans for the Danube  and 
Adriatic  basins  are  not  yet  finalised.  Implementation  of  the  law  on  marine  environment 
protection has started and preparation of the relevant implementing legislation has advanced.  
Montenegro  started  to  review  the  concessions  granted  for  the  construction  of  small 
hydropower  plants  and  revoked  some  of  them.  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. 

remains  urgently  needed.  The 

On  nature  protection,  Montenegro  is  partially  aligned  with  the  EU  acquis.  The  process  of 
identification  of  potential  Natura  2000  sites  continued  in  the  reporting  period  with  funds 
provided from the national budget. The Ulcinj Salina land was clarified to belong to the state 
on  21  July  2021.  Further  national  support  was  provided  for  the  Salina’s  maintenance. 
Montenegro  reports  on  its  protection  activities  on  a  quarterly  basis.  Collaboration  with 
Germany was established to develop and implement the Salina’s sustainable management and 
implementation  of 
protection,  which 
recommendations on Skadar Lake was submitted to the Bern Convention which requested a 
follow-up  report.  Montenegro  continued  to  monitor  the  impact  of  the  Bar-Boljare  highway 
construction on the flora and fauna of the Tara river in response to a recommendation of the 
joint  World  Heritage  Centre/IUCN  advisory  mission  in  November  2018.  Field  research  for 
three marine protected areas were concluded and nature protection studies drafted for all three 
areas. Platamuni area was proclaimed as a first Marine Protected Area in Montenegro in April 
2021. Beech forests of the Biogradska Gora National Park were nominated for inclusion in the 
UNESCO world heritage “Ancient and Primeval Beech Forests of the Carpathians and Other 
Regions  of  Europe”.  Montenegro  stopped  the  military  use  of  the  training  area  on  the 
Sinjajevina mountain, part of the UNESCO Tara River biosphere reserve. A limited baseline 
study on its biodiversity was completed.  

report  on 

On industrial pollution control and risk management, Montenegro is partially aligned with 
the  EU  acquis.  Implementing  legislation  was  adopted  to  the  law  on  industrial  emissions. 
Activities  continued  in  the  field  of  industrial  waste  management  and  to  establish  a  national 
pollutant  release  and  transfer  register  (PRTR).  The  Pljevlja  coal  power  plant  exceeded  the 
agreed  remaining  number  of  operating  hours  as  concerns  compliance  with  the  Large 
Combustion  Plants  Directive,  while  its  reconstruction  to  work  in  line  with  modern 
environmental standards was delayed. The Energy Community launched a procedure against 
Montenegro. Despite this, Montenegro continues to operate the plant with explicit agreement 
of the government. 

On  chemicals,  Montenegro  is  partially  aligned  with  the  EU  acquis.  Further  secondary 
legislation was adopted.  

On  noise,  the  European  Environment  Agency  acknowledged,  in  its  2020  report  on 
environmental noise, the strategic noise map for the capital Podgorica as the first of its kind in 
the region. 

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On  civil  protection,  Montenegro  has  been  a  member  of  the  Union  Civil  Protection 
Mechanism  since  April  2015.  Following  2020  recommendations  Montenegro  stepped  up  its 
activities, in particular by developing the national rescue and protection plans against various 
types of hazards, and through conducting numerous staff and field exercises and collaboration 
with EU, NATO and other international partners. As precondition for the establishment of the 
connection  between  Montenegro  and  the  Common  Emergency  Communication  and 
Information  System  (CECIS),  the  Secure  Trans  European  Service  for  Telematics  (sTESTA) 
was installed.  

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. 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). In July 2020, the government adopted the third national climate change 
report in the UN Framework Convention on Climate Change. In June 2021, the government 
adopted the report for preparing the updated nationally determined contributions (NDC) in the 
frame of the Paris Agreement. The revision of the NDC sets as new target to reduce by 35% 
Montenegro’s  greenhouse  gas  emissions  by  2030.  This  is  only  a  5%  increase  from  the 
previous  target  and  should  be  further  stepped  up.  Implementing  legislation  to  the  law  on 
protection against negative impacts of climate change was adopted. A national climate change 
adaptation  plan  was  adopted  in  April  2021.  The  development  of  the  national  energy  and 
climate plan started as a basis for the preparation of the low carbon development strategy. 

CLUSTER 5: RESOURCES, AGRICULTURE AND COHESION  

This cluster covers chapters 11-agriculture and rural development, 12-food safety, veterinary 
and  phytosanitary  policy,  13-fisheries,  22-  regional  policy  &  coordination  of  structural 
instruments, and 33-financial & budgetary provisions All five chapters are open, with closing 
benchmarks that remain to be fulfilled in each chapter. This cluster comprises policies linked 
to  EU  Structural  and  Investment  Funds,  requiring  particular  preparation  for  developing  the 
capacities to assume responsibilities of a future Member State.    

Progress was achieved in different areas e.g. in agriculture, food and fisheries through further 
support  for  agricultural  establishments  and  rural  food  companies  to  align  with  the  EU 
standards  and  in  implementing  IPARD  and  by  improving  the  administrative  capacity  for 
regional policy and for the coordination of structural instruments. On financial and budgetary 
provisions,  progress  was  achieved  through  improved  coordination  and  management  of  own 
resources. 

In the coming period, Montenegro is  invited to  focus on the following areas:  to  step up the 
implementation of the IPARD programme and to finalise the national strategies on agriculture 
and rural development as well as on fisheries for the 2021-2027 period; to continue upgrading 
food establishments and further strengthen administrative capacity in particular on food safety 
controls  and  fisheries;  to  continue  implementing  the  action  plan  for  meeting  EU  cohesion 
policy  requirements  and  ensuring  all  necessary  capacity  for  the  handling  of  indirect 
management  programmes  in  IPA;  to  further  align  the  institutional  framework  and  rules  of 
administration for the own resources system.   

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Chapter 11: Agriculture and rural development  

The  common  agricultural  policy  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. 
Some progress was achieved on last year’s recommendations, mainly in the implementation 
of the instrument for pre-accession assistance for rural development programme (IPARD II) 
through further calls and entrustment of one further IPARD measure. The implementation of 
the action plan on EU acquis alignment was limited. 

In the coming year, Montenegro should in particular: 

  step  up  the  implementation  of  the  IPARD  II  programme,  seek  entrustment  for 
implementing the ‘Technical  assistance’ measure and  submit the draft  IPARD  III 2021-
2027 programme to the Commission for adoption; 

  continue to implement the action plan for alignment with the EU acquis on agriculture and 
rural  development,  and  adopt  the  strategy  for  agriculture  and  rural  development  2021-
2027. 

On horizontal issues, the preparation of the strategy for agriculture and rural development for 
2021-2027  is  pending.  The  agricultural  sector  suffered  from  the  significant  reduction  of 
demand  for  products  due  to  tourism  decrease,  linked  to  COVID  19.  Economic  packages 
adopted  to  mitigate  the  effects  of  the  COVID-19  pandemics  include  farmers  and 
agribusinesses. Implementation of the activities under the action plan on alignment with the 
EU  acquis  on  agriculture  and  rural  development  should  continue.  Progress  still  needs  to  be 
achieved  by  fully  decoupling  direct  payment  measures  from  production  while  linking 
payments to cross-compliance requirements.  

n the integrated administration and control system (IACS), there was limited development of 
the  land  parcel  identification  system  (LPIS),  which  remains  to  be  rolled  out  to  the  whole 
territory.  Preparations  for  the  software  for  the  farm  accountancy  data  network  (FADN) 
continued. Farm advisory services need to be further strengthened.  

On  common  market  organisation  (CMO),  implementation  of  the  Action  plan  for  CMO 
alignment should be stepped up. 

On rural development, five IPARD calls were realised for measures ‘Investments in physical 
assets  of  agricultural  holdings’  and  ‘Investments  in  physical  assets  concerning  processing 
and marketing of agricultural and fishery products’. Montenegro was entrusted with budget 
implementation  tasks  for  the  IPARD  measure  ‘Farm  diversification  and  businesses 
development’ in 2020, and the first call was opened in June 2021. The preparation process for 
the IPARD measure ‘Technical assistance’ needs to be accelerated.  More effort is needed as 
Montenegro  was  slow  with  the  implementation  of  a  scheme  of  advance  payments  under 
IPARD II, which could have a negative impact on their access to EU funds at the end of 2021. 
In  2020,  the  capacity  of  the  IPARD  Agency  was  increased  by  24  staff,  including  four 
employees  in  the  first  regional  office  in  Bijelo  Polje.  The  IPARD  Agency  currently  has  84 
employees.  

As  regards  the  quality  policy,  two  new  designations  of  origin  were  registered  for  wine. 
Training was conducted to strengthen the capacity of the control body Monteorganica and for 
the producers of food protected by the national quality schemes. Recommendations from the 
EU Peer Review Mission in November 2019 should be followed-up. 

106 

 
 
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). With about 
4,000  hectares  under  organic  production,  the  sector  is  still  small,  but  has  been  growing 
steadily.  The  potential  for  further  development  and  expansion  of  the  sector  should  be 
supported. 

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 the quality 
of seed, the plant protection material, the protection against harmful organisms and animal 
nutrition.  

Montenegro  remains  moderately  prepared  on  this  chapter.  Good  progress  was  made  on 
previous year’s recommendations, in particular on in implementing the national strategy for 
aligning  with  and  implementing  the  EU  acquis.  The  upgrading  of  establishments  and  the 
implementation of programmes continued.   

In the coming year, Montenegro should in particular: 

  continue  to  implement  the  revised  strategy  for  aligning  with  and  implementing  the  EU 

acquis;  

  continue to support the ongoing process of upgrading food establishments;  

  continue to  strengthen administrative capacity and infrastructures, in  particular on food 
safety controls and implement robust disease surveillance and vaccination, as applicable. 

On  general  food  safety,  the  revised  strategy  for  aligning  with  and  implementing  the  EU 
acquis, and the specific action plan for classical swine fever were implemented on schedule 
and  further  implementing  legislation  was  adopted.  The  2020  programme  for  food  and  feed 
safety measures was implemented and the programme for 2021 was prepared.  

On the veterinary policy, the programme of mandatory animal health protection measures for 
2020 was completed, including preventive measures against lumpy skin  disease, bluetongue 
disease and other potentially hazardous infectious diseases. The new programme for 2021 was 
prepared. The multiannual programme for the eradication of rabies discontinued, with the last 
vaccination campaign implemented in spring 2020. Montenegro is yet to resume vaccination 
against rabies. Taking full ownership of vaccination campaigns, Montenegro should transition 
to  using  its  own  means for  future  campaigns  in  line  with  obligations  to  harmonise  with  the 
relevant  EU  acquis.  Setting  up  and  implementing  robust  disease  surveillance  is  urgent.  The 
African  Swine  Fever  risk  management  measures  were  partially  implemented.  This  was 
accompanied by awareness-raising and on-the-spot training programmes for veterinarians and 
other stakeholders. A stray dog control strategy remains outstanding. 

On  placing  on  the  market  of  food,  feed  and  animal  by-products,  upgrading  of 
establishments  for  products  and  by-products  of  animal  origin  continued.  Some  68 
establishments producing food of animal origin are compliant with EU regulations and 15 of 
them have been licensed to export to the EU. The first establishment for goat milk processing 
and  a  major  fishery  products  processor  with  19  facilities  joined  the  EU  list  in  2020. 
Montenegro continued to implement the plan for the management of animal by-products not 
intended for human consumption and the national programme for improving raw milk quality 
and  handling  non-compliant  milk.  Strengthening  administrative  and  inspection  capacity  and 
related infrastructure needs to remain a priority. 

107 

 
 
Further  implementing  legislation  on  food  safety  rules  and  on  specific  rules  for  feed  was 
adopted. The Program of food and feed safety measures for 2020 was implemented.   

On  phytosanitary  policy,  implementing  legislation  was  adopted  in  2020,  together  with 
implementing  programmes  on  phytosanitary  measures  and  on  the  monitoring  of  pesticide 
residues  in  food.  The  programme  of  phytosanitary  measures  for  2021was  prepared.  2020-
2021  actions  of  the  national  plan  for  sustainable  use  of  plant  protection  products  were 
implemented.  

The European and Mediterranean Plant Protection Organisation (EPPO) updated the status of 
the  harmful  Asian  longhorn  beetle  (Anoplophora  glabripennis)  in  Montenegro  to  “Absent, 
pest eradicated“, thanks to a strong supervision since the organism’s first observance in 2015. 

On genetically modified organisms, the 2020 programme for genetically modified food and 
feed monitoring was implemented and the programme for 2021 was prepared. 

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. Limited progress was made in the 
reporting period on the recommendations of the last report, which remain valid. Montenegro 
continued to be a reliable partner in international fora.  

In the coming period, Montenegro should in particular: 

  finalise  its  work  in  preparation  of  the  new  fisheries  and  aquaculture  strategy  with  the 

action plan on aligning with and enforcing the EU acquis;  

  continue  to  strengthen  administrative,  data  collection,  scientific  advice,  inspection  and 

control capacities. 

  continue,  within 

the  General  Fisheries  Commission  for  Mediterranean  (GFCM) 

the implementation of the multiannual plan for demersal species in the Adriatic.  

Montenegro  continued  to  implement  its  action  plan  on  aligning  with,  implementing  and 
enforcing the EU  acquis  under this chapter. The  preparation of a fisheries sectorial  study is 
ongoing.  It  will  provide  the  necessary  baseline  for  the  preparation  of  the  new  fisheries  and 
aquaculture strategy and related action plan. 

The  Law  on  structural  measures  and  State  aid  in  fisheries  and  aquaculture  and  the  Law  on 
market  organisation  in  fisheries  and  aquaculture,  adopted  by  the  government  in  December 
2019, remain pending adoption by new Government.  

Implementing  legislation  on  sport  and  recreational  fishing  at  sea  was  adopted  during  the 
reporting period.  

The  capacity  building  of  the  administration  and  inspection  staff  continued  with  TAIEX 
support. 

On resource  management, the annual  data  collection programme on Montenegrin fisheries 
for  2020  was  implemented  and  the  activities  have  continued  in  2021.  The  socio-economic 
research for 2019, disrupted by COVID-19 pandemic, was finalised and the data was provided 
to the General Fisheries Commission for Mediterranean (GFCM).  

In the area of fleet management, a public call on fleet modernisation is under preparation. 

108 

 
 
 
Regarding  inspections  and  control,  the  working  group  for  the  fight  against  all  forms  of 
illegal  fishing  continued  its  activities  in  line  with  its  action  plan.  The  new  state-of-the-art 
inspection vessel was put into full operation. 

There were no substantial developments on structural actions and market policy. In order to 
overcome the impact of the COVID-19 crisis on fisheries, the government set up a dedicated 
support programme for agriculture and fisheries in its economic packages adopted to mitigate 
the effects of the COVID-19 pandemic. For the fisheries, this includes income support, loan 
rescheduling and a favourable credit line. 

At  the  international  level,  Montenegro  continued  its  cooperation  with  MedFish4Ever,  the 
INTERREG programmes and the GFCM. 

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 
administrative  capacity,  as  well  as  with  investment  planning  and  preparation.  2020 
recommendations remain valid also in the coming year. Montenegro should in particular: 

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

EU cohesion policy; 

  increase  the  administrative  capacity  of  central,  regional  and  local  bodies  to  more 
effectively safeguard IPA funds, ensuring that the positions in the structures are filled on a 
permanent  basis,  retaining  key  staff  while  increasing  engagement  into  effective 
coordination mechanisms for improved project preparation and monitoring, with emphasis 
on the strengthening the single project pipeline; 

  ensure that all instruments are compliant with EU requirements in terms of programming 
and  partnership  principles  while  factoring  the  requirements  of  future  structural/cohesion 
funds into the institutional set-up increase. 

Regarding  the  legislative  framework,  a  number  of  implementing  regulations  related  to  the 
Law on public procurement, the Law on public-private partnership and the Law amending the 
Law on concessions were prepared and adopted in 2020.  

The institutional framework for cohesion policy has still to be decided while its formal and 
legal  definition  should  be  framed  under  the  Law  on  European  Structural  and  Investment 
Funds. This should link to the future Managing Authority and be based on the rules foreseen 
in the draft EU Regulation establishing the Instrument for Pre-accession Assistance (IPA III) 
for  the  period  2021-2027.  Capacities  and  resources  for  managing  the  EU’s  IPA  financial 
assistance still require strengthening.  Moreover, Indirect Management should best be used in 
sectors that are precursors of shared management upon accession. 

Regarding  administrative  capacities,  the  lack  of  adequate  resources  of  key  institutions 
involved  in  the  planning  and  management  of  EU  funds  remains  a  weakness.  The  employee 
turnover  in  the  IPA  system  was  high  during  2020  resulting  in  the  suboptimal  quality  of 
documents,  and delays cumulating in  the financial  loss of more than EUR 6 million  of  IPA 
2016  funds.  The  practice  of  contracting  large  proportions  IPA  funds  close  to  contracting 
deadlines  must  be  avoided.  The  retention  policy  introduced  in  2019,  was  temporarily 
discontinued  until  February  2021  impacting  negatively  on  performance.  Absorption  of 

109 

 
 
capacity  building  remains  low.  Further  investment  in  resources,  particularly  in  the  Public 
Works Administration is needed. 

In  the  area  of  programming,  first  drafts  of  the  strategic  response  and  of  the  IPA  2021 
programmes were prepared. There remains a need to allocate resources efficiently and build 
sector  pipelines  for  future  structural  funds  management  since  the  lack  of  project  maturity 
hinders  programming  and  implementation.  The  first  ever  project  preparation  facility  for  the 
environmental  sector  was  only  contracted  in  December  2020.  While  a  decision  on  the 
composition of the National Investment Committee (NIC) was adopted in March 2021, there 
is  still  a  requirement  for  greater  coordination  around  investment  planning,  better  synergies 
and  coherence  between  the  development  of  national  policies  and  strategies  and  EU 
membership requirements. Capacity for the management of capital/infrastructure investments 
remains  weak,  particularly  at  the  level  of  line  ministries.  The  greater  involvement  of  social 
partners, business, academia and international actors in the definition of policy priorities, their 
development and implementation, is still needed.  

In  the  area  of  monitoring  and  evaluation,  regular  activities  continued  in  line  with  IPA 
procedures but the pace of contracting programmes under indirect management remains slow. 
For the first time, a mid-term evaluation of projects in indirect management was conducted, 
while  a  wider  country  Commission  managed  evaluation  with  conclusions  and 
recommendations was completed in June. The development of a comprehensive monitoring, 
evaluation  and  learning  framework  is  recommended  in  order  to  improve  the  monitoring  of 
priority policy measures.  

For  financial  management,  control  and  audit,  limited  progress  was  made  in  the 
establishment  of  the  Management  and  Information  System.  The  capacity  of  the  Audit 
Authority continued to improve. The impact of the reorganisation made in the internal audit 
IPA system made during 2020 is still not clear. 

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;  (iii)  the  non-recycled  plastic  resource;  and  (iv)  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.  

Montenegro  has  some  level  of  preparation  regarding  EU  financial  and  budgetary 
provisions.  Some  progress  was  achieved  under  this  chapter  during  the  reporting  period, 
both  in  the  coordination  and  management  of  own  resources  and  in  the  underlying  policy 
areas  affecting  the  correct  application  of  the  own  resources  system.  However,  the  2020 
recommendations remain largely valid.  

In the coming year, Montenegro should, in particular:  

  further  set  up    the  institutional  framework  and  rules  of  administration  for  the  own 

resources system;  

  further  align  the  legal  basis  for  the  underlying  policy  areas  affecting  the  correct 
application  of  the  own  resources  system:  taxation  (VAT),  customs  union,  financial 
control and statistics;  

  ensure  adequate  capacity  at  the  Directorate  for  Coordination  and  Management  of  EU 
resources and at  all institutions involved in  the own resources system  and implement 

110 

 
 
the own resources system action plan within the deadlines set. 

On  traditional  own  resources,  analysis  of  the  accounting  rules  (A&B  accounts)  continued 
and progress was made to mark and define income according to its future classification in A 
and  B  accounts,  based  on  whether  the  receivables  are  paid,  unpaid,  secured,  unsecured  or 
disputed.  Simulation  exercises  on  A  and  B  accounting  and  on  submission  of  reports  on 
detected cases of fraud and irregularities were organised. The fraud reporting in line with the 
own  resources  database  (OWNRES)  requirements  improved  with  the  preparation  of  several 
reports on seized goods. Amendments to the Customs Law for the regulation of compulsory 
enforcement on movable and immovable property are under preparation. On the collection of 
customs debt, the adoption of the model for the write-off of the customs debt is pending.  The 
application of the Law on public sector accounting is postponed to 2022, and the Revenue and 
Customs Administration is preparing to use the double bookkeeping rules as from next year. 

On value added tax-based resource, in July 2020, the Parliament approved amendments to 
the  Value  Added  Tax  Law,  which  led  to  adjustments  to  trade  taxation  of  certain  products, 
services  and  imports.  Further  alignment  of  the  Law  on  VAT  with  the  EU  acquis  remains 
necessary, in  particular removing VAT  and other tax exemptions that are not  aligned to  the 
EU acquis. 

On gross national income-based resources, Montenegro’s gross domestic product (GDP) is 
calculated  using  the  European  system  of  national  and  regional  accounts  (ESA)  2010 
methodology. Gross national  income (GNI) data  are  available since 2010 and are published 
on the website of the Statistical office of Montenegro. Sustained efforts are needed as regards 
the exhaustiveness of the national accounts and GDP/GNI calculations.  

As regards administrative infrastructure, the administrative capacities of the Directorate for 
coordination  and  management  of  own  Resources  of  the  EU  within  the  Ministry  of  Finance 
and  Social  Welfare  and,  more  in  general,  of  all  institutions  involved  in  the  own  resources 
system, remain weak. An EU Twinning project under preparation will support Montenegro in 
setting up an efficient management of own resources. 

The  implementation  of  the  own  resources  action  plan,  adopted  in  spring  2019,  is  ongoing. 
Annual progress reports are prepared and submitted to the government for adoption.  

CLUSTER 6: EXTERNAL RELATIONS  

There  are  two  chapters  in  this  cluster:  namely,  chapter  30-external  relations,  which  was 
provisionally closed in June 2017, and chapter 31-foreign, security & defence policy, where 
the  single  closing  benchmark  (concerning  Montenegro’s  bilateral  immunity  agreement  with 
the United States) has yet to be fulfilled.  

Montenegro continues full alignment with the EU’s Common Foreign and Security policy, as 
well  as  coordinating  its  positions  with  those  of  the  EU,  including  within  the  WTO,  and 
maintains  good  cooperation  with  international  organisations.  Progress  can  be  noted  on  non-
proliferation,  with  some  positive  results  within  CEFTA,  in  particular  during  the  COVID-19 
pandemic through the ‘priority green lanes’ initiative.   

Montenegro  is  encouraged  to  continue  its  full  alignment  with  all  EU  positions  and 
declarations and the alignment with the EU common positions on the integrity of the Rome 
Statute  would  allow  the  provisional  closure  of  the  remaining  chapter  under  this  cluster. 
Montenegro  is  invited  to  continue  legislative  alignment  where  necessary,  and  is  also 
encouraged  to  implement  actions  under  the  common  regional  market  based  on  EU  rules, 
including through cooperation with CEFTA and the Regional Cooperation Council. 

111 

 
 
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. 

Concerning European standards on external relations, Montenegro has achieved a good level 
of  preparation.  Some  progress  was  achieved  in  terms  of  full  implementation  of  CEFTA 
Additional  Protocol  (AP)  5  on  trade  in  goods,    and  launch  of  AP  7  negotiations  on  dispute 
settlement.  The  recommendation  to  adopt  the  draft  law  on  export  control  of  dual-use  goods 
has been outstanding for several years and thus remains valid. 

In the coming year, Montenegro should in particular: 

→ adopt the law on export control of dual-use goods, in line with the EU acquis; 

→ ratify and implement CEFTA AP 6 on trade in services,  

→ actively participate in the implementation of actions under the Common Regional Market.  

On the common commercial policy, Montenegro continued to coordinate its positions with 
those  of  the  EU,  including  within  the  WTO,  also  in  view  of  the  WTO  XII  Ministerial 
conference.  Adoption  of  the  trade  facilitation  strategy  implementation  report  covering  2019 
and  the  first  half  of  2020  is  pending.  Since  the  outbreak  of  the  COVID-19  pandemic, 
Montenegro  has  not  banned  the  import,  export,  or  transit  of  goods,  nor  has  it  imposed  any 
trade restrictions. 

The draft Law on export control of dual-use goods has been pending parliamentary adoption 
since  May  2020.  Further  investment  in  upgrading  the  administrative  and  control  capacity 
would be beneficial. Montenegro`s application process to join the Wassenaar Arrangement is 
still pending, while the country launched an initiative for membership in the Australia Group. 

In  February  2021,  the  government  adopted  amendments  to  the  decree  on  foreign  trade  of 
rough  diamonds,  amending  the  list  of  participants  in  line  with  the  Kimberley  Process 
certification scheme. 

Once  the  written  opinion  of  the  Agency  for  Protection  of  Competition  is  received  on 
compliance with state aid rules, Montenegro should complete the draft decree on export credit 
insurance  against  non-market  risks.  This  decree  follows  the  adoption  of  the  Law  on  the 
investment and development fund, which regulates the issuing and financing of export credits.  

Montenegro  continued  to  participate  in  CEFTA  during  the  reporting  period.  In  view  of  the 
COVID-19  pandemic,  Montenegro  took  part  in  CEFTA’s  coordination  body  establishing 
‘green  priority  lines’  that  ensured  the  free  flow  of  necessary  goods,  the  exchange  of 
information on consignments via the System of Electronic Exchange of Data (SEED) as well 
as  the  submission  of  notifications  to  the  relevant  inspections.  Ratification  of  Additional 
Protocol  6  on  trade  in  services  is  pending  in  Parliament.  Montenegro  committed  to  a 
constructive  approach  in  negotiations  on  Additional  Protocol  7  on  trade  dispute  settlement 
and participation within the Common Regional Market. Montenegro should reflect the latest 
EU  policy  developments  in  its  new  bilateral  investment  treaty  model,  currently  being 
developed. Montenegro has 23 bilateral investment treaties currently in force, more than half 
with EU member states. 

Concerning  bilateral  trade agreements, negotiations continue to  amend Montenegro’s free 
trade  agreement  (FTA)  with  EFTA  countries  concerning  the  rules  of  origin  related  to  the 
revised  PEM  (pan-Euro-Mediterranean)  Convention.  The  ratification  process  is  ongoing 

112 

 
 
regarding  amendments  to  the  2019  FTA  with  Turkey,  which  aim  to  ensure  additional 
liberalisation of trade in agricultural products and access to the services market.  

In  March  2021,  Montenegro  adopted  information  on  concluding  the Agreement  on  Trade, 
Partnership and Cooperation between Montenegro and the United Kingdom of Great Britain 
and Northern Ireland. The negotiations are yet to start on the matter. Montenegro should take 
continued  care  to  avoid  any  violation  of  obligations  arising  from  the  Stabilisation  and 
Association Agreement. 

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  on  donor  support  projects  that  would  use  the  OECD  Development 
Assistance Committee methodology remains to be developed. 

Montenegro  should  continue  working  on  this  chapter  in  accordance  with  its  overall  action 
plan on external relations. 

Chapter 31: Foreign, security and defence policy  

Member  States  must  be  able to  conduct  political dialogues in  the framework of  the foreign, 
security  and  defence  policy,  align  with  EU  statements,  take  part  in  EU  actions  and  apply 
agreed sanctions and restrictive measures. 

Concerning  EU  foreign,  security  and  defence  policy,  Montenegro  has  a  good  level  of 
preparation. Some progress was made during the reporting period, including in the area of 
non-proliferation.  Montenegro  continued  to  fully  align  with  EU  positions  and  participate  in 
EU  crisis  management  missions  and  operations  under  the  common  security  and  defence 
policy.  

In the coming year, Montenegro should in particular: 

  maintain its full alignment with the EU foreign, 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.) 

On common foreign and security policy, Montenegro continued its 100% alignment with all 
relevant High Representative statements on behalf of the EU, and Council decisions. This is a 
strong signal of the country’s commitment to its EU path. 

Montenegro  maintains  a  bilateral  immunity  agreement  with  the  United  States,  granting  US 
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, in July 2020 Montenegro took over the semi-annual presidency 
of the consultative commission of the sub-regional arms control agreement (Article IV of the 
Dayton agreement) and hosted several online meetings in this framework. In November 2020, 
the  government  adopted  a  decision  to  establish  the  national  coordination  body  for  the  non-
proliferation of weapons of mass destruction. Work is underway to prepare a roadmap for the 
period  2022-2027 
to  encompass  measures  addressing  CBRN  (chemical,  biological, 
radiological  and  nuclear)  threats  and  risks,  as  well  as  measures  for  the  implementation  of 
UNSC Resolution 1540.  

113 

 
 
Montenegro  continues  to  implement  its  2019-2025  strategy  and  action  plan  for  combating 
illegal  possession,  misuse  and  trafficking  of  small  arms  and  light  weapons  (SALW),  and 
remains  actively  engaged  in  the  implementation  of  the  Western  Balkans  SALW  Roadmap. 
The country also continued to participate in the EU cooperation programme on effective arms 
export  control,  strengthening  intra-agency  cooperation  and  participating  in  relevant  expert 
meetings.  

On security and defence, Montenegro continued implementing the Defence Strategy adopted 
in  2019  and  the  related  action  plan,  as  well  as  its  agreement  with  the  EU  on  security 
procedures  for  exchanging  and  protecting  classified  information,  including  issuing  EU 
security clearances for relevant Montenegrin personnel.  

Montenegro  continued  good  cooperation  with  international  organisations  (UN,  OSCE, 
Council  of  Europe)  and  remains  an  active  member  in  NATO  exercises  and  missions, 
including in NATO KFOR in Kosovo. The country harmonised its national defence planning 
with the NATO defence planning process and in July 2020 adopted the rulebook on defence 
planning.  

The  country  continued  to  participate  in  EU  crisis  management  missions  and  operations 
under  the  common  security  and  defence  policy,  namely  in  the  EU  NAVFOR  ATALANTA 
and the EU Training Mission (EUTM) in Mali. Montenegro continued its participation in the 
UN peacekeeping operation MINURSO. In December 2020, the Ministry of Defence rotated 
its officers, sending female officers to the mentioned UN mission in support of the UN policy 
on greater representation of women in peacebuilding processes.  

Regarding  hybrid  threats,  Montenegro  engaged  in  the  EU’s  hybrid  risk  survey,  with  the 
objective of identifying systemic vulnerabilities and further focusing the assistance provided 
by the EU in this field. A draft strategy on countering hybrid threats and related action plan 
are pending adoption. The mapping of potential joint support actions with the EU continued 
during the reporting period and the establishment of an independent cyber security agency is 
under  preparation.  Montenegro  is  a  member  of  the  European  Centre  of  Excellence  for 
Countering Hybrid Threats. 

ANNEX I – RELATIONS BETWEEN THE EU AND MONTENEGRO  

Within  the  framework  of  the  accession  negotiations,  by  October  2021,  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 
Committee met in December 2020. Regular subcommittee meetings were held throughout the 
period. The Stabilisation and Association Parliamentary Committee met in May 2021. 

Montenegro  participates  in  the  ministerial  dialogue  between  the  economic  and  finance 
ministers of the EU and the candidate countries, which aims at helping the latter to 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 17 June 2021. 

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 

114 

 
 
liberalisation, the Commission has been regularly assessing the progress made by the country 
in  implementing  reforms  introduced  under  the  visa  roadmap.  The  Commission’s  July  2021 
fourth  report under the visa suspension mechanism concluded that Montenegro continues to 
meet  the  visa  liberalisation  benchmarks.  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 allocation of EUR 279.5 million for the period 2014-
2020. This was programmed based on the priorities set out in the Indicative Strategy Paper. 
However, with the outbreak of the COVID-19 pandemic EUR 53 million was 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  for 
providing the delivery of emergency health supplies, a focused social and health programme, 
and  a  Budget  Support  programme.  As  part  of  the  wider  COVID-19  response,  the  EU  also 
made available a Macro Financial Assistance scheme of EUR 60 million in highly favourable 
loans in order to underpin the local economy.  
The IPA III Regulation for the 2021-2027 financial period4will continue to provide financial 
support to  the region  and also  finance the regional  Economic  Investment  Plan (EIP) for the 
Western Balkans. The EIP, accompanied by the Green Agenda for the Western Balkans, was 
agreed by the Commission  and the  governments  of the region in  October 2020 and aims to 
spur the long-term economic recovery of the region, support a green and digital transition, and 
foster regional integration and convergence with the European Union.  

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  participates  in  four  cross-border 
cooperation programmes with neighbouring Western Balkan candidate countries and potential 
candidates as well as 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  Small  and  Medium-Sized  Enterprises  Programme  (COSME).  Montenegro 
also participates with their own funds in the EU Justice Programme.  

Montenegro  received  48,000  doses  of  Astra  Zeneca  vaccine  through  the  global  COVAX 
vaccine  sharing  mechanism  as  a  self-financing  partner.  Under  the  EU’s  scheme  to  share 
vaccines  with  the  Western  Balkans  (via  Austria),  Montenegro  received  over  42,000 
Pfizer/BioNTech doses between May-August 2021. The cost of this scheme was covered by a 
specific IPA grant amounting to EUR 70 million for the Western Balkan region.  

4 Official Journal L 330, 20.9.2021 

115 

 
 
 
 
 
 
 
                                                           
STATISTICAL DATA (as of 09.09.2021) 
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 (2015 = 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 (%) 

Note 

Note 

Note 

116 

2008 
616 s 
13 812 w 

2015 
622 s 
13 812 w 

2016 
622 s 
13 812 w 

2017 
622 s 
13 812 w 

2018 
622 s 
13 812 w 

2008 
3 103 
5 030 
10 920 
42.4 
7.2 
: 
: 

: 
: 
: 

9.3 
14.1 
7.9 
68.6 s 
112.1 
39.2 
2.0 
39.5 
92.8 
: 

2008 
142.3 
: 
: 

2015 
3 655 
5 870 
12 280 
42.7 
3.4 
 c 
 c 

: 
: 
 c 

9.7 
12.8 
4.5 
72.9 s 
98.4 
20.1 
-  0.1 
42.1 
60.6 
: 

2015 
100.4 
: 
14.9 w 

2016 
3 954 
6 350 
13 000 
44.8 
2.9 
 c 
 c 

: 
: 
 c 

9.0 
12.2 
6.7 
72.0 s 
96.4 
23.2 
2.9 
40.5 
62.9 
: 

2016 
97.0 
: 
13.1 w 

2017 
4 299 
6 910 
13 770 
46.1 
4.7 
: 
: 

: 
: 
: 

8.4 
11.3 
6.9 
73.5 s 
93.2 
26.9 
3.3 
41.1 
64.5 
: 

2017 
92.9 
: 
7.1 w 

2018 
4 663 
7 490 
14 890 
48.3 
5.1 
: 
: 

: 
: 
: 

8.2 
12.5 
7.0 
72.4 s 
91.9 
29.2 
2.7 
42.9 
66.7 
: 

2018 
113.7 
: 
11.2 w 

2019 
622 s 
: 

2019 
4 951 
7 960 
16 020 
50.2 
: 
: 
: 

: 
: 
: 

7.9 
11.9 
7.9 
72.2 s 
89.2 
27.3 
4.6 
43.7 
64.8 
: 

2019 
106.7 
: 
11.2 w 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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) (%) 
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 
Consumer price index (CPI), 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 (%) 

7.6 w 

6.1 w 

5.4 w 

4.8 w 

3.3 w 

: 

: 

: 

: 

: 

: 
1 212 w 

: 
1 336 w 

: 
1 530 w 

: 
1 780 w 

2008 
: 
: 

2008 
- 1 535.2 w 
- 2 025.3 w 
371.2 w 
45.8 w 
73.1 w 
: 
: 
: 
582.0 w 
73.7 w 
: 
655.7 w 
: 
: 
: 

2008 
-  0.5 w 
28.8 w 
50.1 w 
50.5 w 

2008 
: 
: 

2015 
1.4 w 
: 

2015 
-  402.0 
- 1 463.0 
789.0 
79.0 
193.0 
5.0 
-  11.6 
: 
619.3 w 
11.0 
9.0 w 
630.3 w 
393.2 w 
: 
5.3 s 

2015 
-  7.3 w 
66.2 w 
41.7 w 
50.0 w 

2015 
: 
: 

2016 
0.1 w 
: 

2016 
-  642.0 
- 1 658.0 
771.0 
34.0 
213.0 
26.0 
-  13.2 
: 
371.6 w 
-  167.0 
-  4.6 w 
204.5 w 
-  44.0 w 
-  177.0 w 
4.8 s 

2016 
-  2.8 w 
64.4 w 
42.6 w 
46.2 w 

2016 
162.6 s 
: 

2017 
2.8 w 
: 

2017 
-  692.0 
- 1 860.0 
852.0 
89.0 
229.0 
22.0 
-  14.4 
: 
484.3 w 
10.0 
-  4.6 w 
494.4 w 
161.4 w 
-  169.5 w 
4.7 s 

2017 
-  5.7 w 
64.2 w 
41.5 w 
46.8 w 

2017 
160.6 s 
: 

1) 

Note 

Note 
2) 
2) 
2) 
2) 
2) 

Note 

Note 

117 

: 

: 
: 

2018 
2.9 w 
: 

2018 
-  793.0 
- 2 050.0 
935.0 
55.0 
265.0 
34.0 
-  16.4 
19.3 
322.5 w 
92.0 
78.0 
414.8 w 
19.0 
-  168.6 w 
4.9 s 

2018 
-  4.6 w 
70.1 ew 
42.2 w 
46.2 w 

2018 
164.7 s 
: 

: 

: 
: 

2019 
0.5 w 
: 

2019 
-  705.0 
- 2 065.0 
1 020.0 
55.0 
284.0 
49.0 
-  15.8 
26.9 
305.1 w 
67.0 
1.0 
372.6 w 
41.0 
-  168.6 w 
4.8 s 

2019 
-  2.0 w 
76.5 w 
43.4 w 
45.4 w 

2019 
: 
: 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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 (%) 
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 (2010 = 100) 
**3 year change (T/T-3) in the trade-weighted effective exchange rate index, 42 countries 
(2010 = 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 (%) 

3) 
4) 
5) 
6) 

7) 
7) 

Note 

Note 

Note 

118 

512.4 w 
1 208.5 w 
2 338.6 w 
2 754.3 w 
: 
: 
: 
: 
9.40 w 
4.10 w 
1 w 
: 
: 

: 
: 
: 
1 955.7 w 
: 
: 
: 
: 
8.53 w 
1.23 w 
1 w 
: 
: 

: 
: 
: 
2 078.4 w 
: 
: 
: 
: 
7.45 w 
0.93 w 
1 w 
: 
: 

: 
: 
: 
2 291.9 w 
: 
: 
: 
: 
6.81 w 
0.69 w 
1 w 
: 
: 

: 
: 
: 
2 519.0 w 
: 
: 
: 
: 
6.36 w 
0.56 w 
1 w 
: 
: 

: 
: 
: 
2 714.6 w 
: 
: 
: 
: 
6.01 w 
0.40 w 
1 w 
: 
: 

313.0 w 

624.0 w 

752.9 w 

847.2 w 

1 049.8 w 

1 366.8 w 

2008 
2 530 
416 
- 2 114 
: 
62.4 s 
46.2 s 

2008 
4.1 

7.5 
72.6 
77.8 

2008 
67.2 w 

56.1 w 

64.6 w 
47.8 w 

2015 
1 842 
317 
- 1 524 
100.0 sw 
33.9 s 
40.6 s 

2016 
2 062 
326 
- 1 736 
98.0 sw 
36.6 s 
47.4 s 

2017 
2 304 
372 
- 1 932 
103.3 sw 
33.3 s 
46.5 s 

2018 
2 554 
400 
- 2 154 
100.7 sw 
43.1 s 
47.1 s 

2019 
2 601 
416 
- 2 185 
99.1 sw 
37.0 s 
47.0 s 

2015 
1.7 

2.2 
74.4 
78.6 

2015 
68.5 

56.7 

61.9 
51.6 

2016 
1.8 

3.4 
74.1 
78.9 

2016 
69.1 

57.1 

63.0 
51.3 

2017 
1.5 

1.3 
73.9 
79.2 

2017 
69.3 

58.2 

65.2 
51.4 

2018 
1.2 

1.7 
74.5 
79.3 

2018 
70.5 

59.8 

66.7 
52.9 

2019 
1.0 

2.4 
74.0 
79.5 

2019 
71.8 

60.8 

67.5 
54.2 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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 
(%) 
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) (2016 = 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 (%) 

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) 

8) 

9) 
10) 

Note 

34.2 w 

40.0 

41.2 

43.7 

46.6 

50.1 

: 
: 
: 
: 
37.0 w 

7.7 s 
10.9 s 
6.6 s 
73.9 s 
32.4 w 

7.8 s 
9.9 s 
7.7 s 
73.8 s 
31.2 w 

7.9 s 
9.5 s 
7.6 s 
74.1 s 
32.6 w 

8.0 s 
9.9 s 
9.0 s 
72.5 s 
31.7 w 

7.1 s 
9.5 s 
9.9 s 
73.1 s 
29.3 w 

43.5 w 

47.2 w 

47.5 w 

45.7 w 

63.9 bw 

66.5 w 

16.8 w 
15.9 w 
17.9 w 
30.5 w 
13.3 w 

22.2 w 

6.5 w 

2008 
338 w 
96 w 

: 
: 
8.6 w 

17.6 
17.8 
17.3 
37.6 
13.5 

28.7 

9.4 

2015 
480 w 
96 w 

37 
36.6 
5.7 

17.8 
18.3 
17.1 
35.9 
13.4 

22.1 

11.5 

2016 
499 w 
100 w 

37 
35.6 
5.5 

16.1 
15.4 
17.0 
31.7 
12.5 

21.7 

10.7 

2017 
510 w 
100 w 

37 
34.0 
5.4 

15.2 
15.3 
15.1 
29.4 
11.4 

21.0 

10.0 

2018 
511 w 
98 w 

35 
35.3 
4.6 

15.2 
14.7 
15.7 
25.2 
12.0 

26.9 

11.0 

2019 
515 w 
98 w 

34 
33.1 
5.0 

Note 

2008 
304.3 sw 
1 611.5 w 

2015 
282.8 sw 
1 620.1 w 

2016 
296.9 sw 
1 632.5 w 

2017 
310.5 sw 
1 636.7 w 

2018 
331.7 sw 
1 822.8 w 

2019 
350.3 sw 
1 850.9 w 

1.3 w 
5 w 

8.6 w 
18 w 

8.9 w 
19 w 

10.5 w 
22 w 

8.8 w 
25 w 

8.0 w 
29 w 

Infrastructure 

Note 

2008 

2015 

2016 

2017 

2018 

2019 

119 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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 (%) 

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 2015 constant 
prices) 
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) 

Note 

Note 

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) 

Note 

12) 
12) 

13) 

Source: Eurostat and the statistical authorities in Montenegro 

120 

18.1 sw 
0 zw 

18.1 sw 
0 zw 

18.1 sw 
0 zw 

18.1 sw 
0 zw 

18.1 sw 
0 zw 

2008 
: 
1.20 sw 
: 

2015 
: 
0.37 
: 

2016 
: 
0.32 
: 

2017 
: 
0.35 
: 

: 

67.5 ew 

69.8 ew 

71.0 

2008 
95.2 w 
357.3 

38.3 
43.0 w 

2008 
669 
0 
383 
0 
570 s 
1 233 
2 828 

2008 
: 
221.7 
106.4 w 
10.0 w 
: 
160.0 w 
4.0 
0.0 

2015 
65.7 w 
278.8 

49.6 
80.8 w 

2015 
705 
0 
390 
0 
306 s 
1 019 
3 003 

2015 
: 
231.4 
92.0 
25.0 
225.0 s 
183.1 
7.1 
0.0 

2016 
62.3 w 
263.1 

51.0 
58.5 w 

2016 
662 
0 
317 
0 
342 s 
990 
3 141 

2016 
: 
255.9 p 
89.0 p 
55.0 p 
223.0 ps 
180.6 p 
7.7 p 
0.0 

2017 
64.8 w 
263.3 

50.1 
39.0 w 

2017 
624 
0 
335 
0 
420 s 
1 037 
2 483 

2017 
: 
256.4 p 
87.0 p 
25.0 p 
218.0 ps 
181.4 p 
7.9 p 
0.0 

: 
0 zw 

2019 
: 
: 
: 

74.0 

2019 
: 
: 

52.7 
45.4 w 

2019 
735 
0 
396 
0 
365 s 
1 112 
3 431 

2019 
: 
257.5 p 
81.4 p 
23.0 p 
210.8 ps 
178.0 p 
7.6 p 
0.0 

2018 
: 
0.50 
: 

72.0 

2018 
70.0 w 
259.5 

52.4 
55.7 w 

2018 
728 
0 
362 
0 
334 s 
1 074 
3 811 

2018 
: 
256.8 p 
83.3 p 
23.6 p 
216.0 ps 
181.5 p 
8.0 p 
0.0 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
: = not available 
  b = break in series 

c =  confidential value 

  e = estimated value 
  p = provisional 

s = Eurostat estimate 

  w = data supplied by and under the responsibility of the national statistical authority and published on an "as is" basis and without any assurance as 

regards their quality and adherence to EU statistical methodology 
z =  not applicable and therefore equal to 0 
* = Europe 2020 indicator 
** = Macroeconomic Imbalance Procedure (MIP) indicator 

  Footnotes: 

1)  Data compiled according to NACE Rev. 1.1. 
2)  Data are in accordance with the IMF Balance of Payments Manual, fifth edition. 
3)  End of year (31 December). 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)  End of year (31 December). National definition of M11, comprised of bank deposits with the CBM (settlement account and reserve requirement account) 
and the estimated amount of cash in circulation, 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)  End of year (31 December). National definition of M21, comprised of bank deposits with the CBM (settlement account and reserve requirement account) 
and the estimated amount of cash in circulation, 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, 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, annual. 
8)  Data refer to number of employees in the public sector as a share of the total number of persons employed. 
9)  Data refer to number of employees in the private sector as a share of the total number of persons employed. Comprises data of private companies or 

enterprises, entrepreneurs, private households and NGO. 

10)  Break in series as previously only employees were answering this question; Since 2018 all employed persons are giving answer to this question. 
11)  Total freight traffic (national territory and international transport). 
12)  Livestock held by enterprises, cooperatives and households. 
13) 

In million litres. Net quantity. From enterprises, cooperatives and households. 

121