Montenegro Struggles to Combat Illicit Financial Flows

Despite efforts to improve its financial intelligence and law enforcement capabilities, Montenegro continues to struggle with illicit financial flows (IFFs). In recent reports, entities reporting suspicious transactions have seen a slight increase in the number of reports over the past three years. However, the country’s national financial intelligence unit initiative has only led to 25 reports, while foreign financial intelligence units have reported 115 cases.

Challenges Faced by Montenegro

Lack of central registries for bank accounts and beneficial owners
Outdated data in state records
Most financial investigations are opened after criminal investigations, rather than being conducted in parallel

These challenges hinder financial intelligence efforts and make it difficult to effectively combat IFFs. For example, money laundering-related full and preliminary investigations have increased slightly over the past three years, with 18 preliminary investigations initiated in 2022 alone. However, only two financial investigations were successfully completed between 2016 and 2022.

Asset Confiscation and Prosecution

Montenegro’s legal framework for asset confiscation is still evolving, with no final court decisions on asset confiscation identified in 2021. The country’s special prosecutor’s office has achieved some permanent confiscations, but the lack of traceable proceeds remains a challenge.

Role of Non-Profit Organizations

Non-profit organizations have also been slow to engage in the prevention of IFFs. None were identified as involved in or intended to be involved in terrorist financing in the 2020 National Risk Assessment (NRA).

Recommendations for Improvement

To combat IFFs effectively, policymakers are recommended to:

Improve the legal framework for supervision
Strengthen controls on reporting entities
Raise the level of transaction analysis and suspicious transactions reporting

Additionally, collaborative efforts between government, civil society, and media organizations are needed to develop campaigns to raise public awareness of the negative impact of IFFs.

Expert Opinion

“Montenegro must take a more comprehensive approach to combating IFFs,” said [Name], an expert in the field. “This includes strengthening its financial intelligence capabilities, improving its legal framework for asset confiscation, and engaging with civil society and media organizations to raise awareness of the issue.”