Montenegro Lacks Strong Internal Control Measures to Combat Money Laundering and Terrorism Financing

Montenegro’s Weaknesses in Combating Financial Crimes Revealed

A recent evaluation has identified significant gaps in Montenegro’s internal control measures to combat money laundering and terrorism financing. The country’s Criminal Code lacks explicit provisions criminalizing the financing of terrorism, and its laws do not provide sufficient powers for authorities to confiscate or seize proceeds from crime or property used to finance terrorism.

Money Laundering Laws Not Sufficient

• Money laundering is criminalized under Article 129a(5) of the Criminal Code, carrying a maximum penalty of 12 years’ imprisonment.
• However, there is no specific provision on terrorist financing, and authorities rely on generic provisions on aiding and abetting to prosecute such offenses.

Insufficiencies in Confiscation and Seizure Powers

• There are no provisions for the seizure of proceeds from crime, making it difficult for authorities to confiscate ill-gotten gains.
• Bank accounts cannot be seized as evidence in court, further hindering efforts to combat financial crimes.

Lack of International Cooperation

• Montenegro’s Financial Intelligence Unit (FIU) lacks a legal basis and sufficient powers to retrieve information from databases, request additional information, and forward compiled data to law enforcement authorities and foreign FIUs.
• This limits the country’s ability to share intelligence and best practices with other nations in combating financial crimes.

Recommendations for Improvement

• Adopt a specific provision on terrorist financing as a matter of urgency.
• Establish an FIU with adequate legal and technical capabilities to combat money laundering and terrorism financing.
• Develop laws and regulations providing sufficient powers for authorities to confiscate or seize proceeds from crime or property used to finance terrorism.
• Establish a framework for the seizure and freezing of assets intended to be used in acts of terrorism.

Enhancing International Cooperation

• Ratify and implement relevant international treaties and conventions.
• Establish relationships with foreign FIUs to share intelligence and best practices.

Conclusion

The evaluation highlights the need for Montenegro to strengthen its internal control measures to combat money laundering and terrorism financing. The country must take immediate action to address these weaknesses and ensure compliance with international standards. By implementing these recommendations, Montenegro can improve its ability to detect and prevent financial crimes, ultimately safeguarding its economy and national security.