Montenegro Takes Steps to Prevent Misuse of Legal Persons

Montenegro has taken several measures to prevent the misuse of legal persons, including requirements for registration and holding a bank account, in an effort to combat money laundering (ML) and terrorist financing (TF).

International Cooperation

In addition to these domestic efforts, Montenegro has strengthened its international cooperation in fighting ML/TF. Authorities actively seek Mutual Legal Assistance (MLA) when investigating cases with cross-border elements, and the country’s Financial Intelligence Unit (FIU) plays a key role in sharing financial intelligence with foreign partners.

Challenges

However, there is scope for improvement in this regard.

Risk Profile

Montenegro’s geographical location poses specific risks related to the smuggling of drugs, migrants, tobacco, and other goods. The country’s authorities have identified ML/TF as major concerns, with an estimated 20% of reported cases linked to these crimes.

Challenges

The lack of clear policy, criteria, and coordination mechanisms hampers the effectiveness of investigations and prosecutions.

Investigation and Prosecution

While Montenegrin authorities have sufficient powers to investigate ML, the effectiveness of these efforts is hindered by:

• Lack of clear policy, criteria, and coordination mechanisms
• Investigations often focus on confiscating crime proceeds rather than identifying and prosecuting associated ML
• Absence of judicial practice and guidance leads to uneven understanding of what constitutes proceeds of criminal activity for standalone ML cases

Recommendations

To improve its anti-money laundering and counter-terrorism financing efforts, Montenegro is advised to:

• Enhance the availability of accurate, adequate, and up-to-date basic and beneficial ownership information.
• Develop a clear policy, criteria, and coordination mechanism for identifying and investigating ML.
• Increase the scope of financial investigations to identify and investigate ML.
• Improve international cooperation by sharing financial intelligence with foreign partners.
• Enhance judicial practice and guidance on what constitutes proceeds of criminal activity for standalone ML cases.

Conclusion

By implementing these recommendations, Montenegro can further strengthen its efforts to combat ML/TF and protect the integrity of its financial system.