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Montenegro’s Struggle to Combat Financial Crime

Montenegro has faced significant challenges in combating financial crime, particularly money laundering and terrorist financing. Despite progress made in recent years, the country still lacks central registries for bank accounts and beneficial owners, which hinders financial intelligence efforts.

Suspicious Transactions Reporting Remains Low

According to data from the Ministry of the Interior, only 234 entities reported suspicious transactions in 2020, while 285 entities did so in 2021. This suggests that more needs to be done to increase reporting and improve financial intelligence gathering.

National Financial Intelligence Unit Initiative Falls Short

The national financial intelligence unit initiative aimed at improving financial intelligence gathering has seen limited success, with only 33 reports filed in 2020. Foreign financial intelligence units have fared better, with 115 reports filed in the same year.

Money Laundering Investigations Continue to Improve

However, money laundering investigations have shown improvement over the past three years, according to the European Commission. Between 2016 and 2022, Montenegro initiated 80 financial investigations, although only two were successfully completed.

Asset Confiscation Remains a Challenge

Montenegro’s legal framework addresses proceeds from criminal activities, but challenges remain in asset confiscation. While some permanent confiscations have been achieved, no final court decisions on asset confiscation were identified in 2021.

CSOs Fail to Address Terrorist Financing

The 2020 National Risk Assessment did not identify any civil society organizations (CSOs) involved in or intended to be involved in terrorist financing, leaving them unaddressed in the national counter-terrorism financing framework.

Recommendations for Policymakers

To improve Montenegro’s approach to combating financial crime, policymakers are recommended to:

• Improve the legal framework for supervision and strengthen controls on reporting entities
• Encourage collaborative efforts between government, civil society, and media to raise public awareness of IFFs (Illicit Financial Flows)
• Review and align financial investigations, asset recovery, and fight against money laundering with EU and international standards

By implementing these measures, Montenegro can significantly improve its effectiveness in combating financial crime and prevent the misuse of its financial system.