Montenegro - Corruption

Montenegro has made significant progress in overcoming its 1990s reputation as a hub for smuggling and organized crime. By large quantities of cigarettes continue to be declared transiting through the Port of Bar destined to third countries, including to certain destinations considered as suspect. According to Transparency International and Freedom House rankings, it is about even with most of its neighbors in corruption perceptions (as well as in most other democracy measures). However, as in other transition countries, it still faces significant rule of law challenges. Montenegro is located at an historic smuggling crossroads, and law enforcement officials and the judiciary are underfunded and underequipped. Many Montenegrins list corruption among the country's biggest problems.

By 2016 Montenegro had achieved some level of preparation in the fight against corruption. Despite some progress, corruption remains prevalent in many areas and continues to be a serious problem. Good progress was made on meeting last year’s recommendation on the establishment of the Anti-Corruption Agency, which started work on 1 January 2016. The process of institution building is in general at an advanced stage. In respect of prevention of corruption, some progress has been made in detecting irregularities in the areas of incompatibility of functions and asset declarations, while the number of cases remains limited in the areas of conflict of interest, political party financing, and codes of ethics. In all areas of prevention of corruption, sanctions provided for by the law have not been applied effectively. The practice among misdemeanour bodies of imposing low penalties, in most cases below the statutory minimum, counteracts enforcement of the rules.

Montenegro’s initial track record of investigations, prosecutions and convictions in organised crime cases has been mostly developed in the fields of drugs, smuggling of migrants, cigarettes, weapons, and cybercrime. No progress was reported by 2016 as regards cases of money laundering or trafficking in human beings, partly for the lack of consolidated case-law. The identification and protection of victims of trafficking also remains a persistent concern in the country. The lack of understanding of international human rights standards and case-law in this area continues to affect the performance of the judiciary. Financial investigations are still not systematically launched in parallel with regular investigations, especially in lower-level prosecutions. On anti-money laundering action, despite additional specialised training and other measures, no new cases were brought to court in 2016; reporting of suspicious bank transactions remained low compared to reporting of cash payments. These weaknesses related to addressing effectively various types of financial and economic crimes needed to be remedied.

While Montenegro has taken many steps to make the country more open for foreign investment, some deficiencies still exist. The absence of fully developed legal institutions has fostered corruption and weak controls over conflicts of interest. The judiciary is still slow to adjudicate cases, and court decisions are not always consistently applied or enforced. Montenegro’s significant grey economy impacts its market, negatively affecting businesses operating in accordance with the law. Favorable tax policies established at the national level are often ignored at the municipal level.

As is the case with many countries in transition and in the region, corruption is a significant issue in Montenegro. Corruption routinely places high on the list of citizens' concerns in opinion polls. Montenegro took 75th position in the Transparency International (TI) 2012 Corruption Perception Index list, which is nine positions lower than last year. Regionally, Croatia (62nd), Macedonia (69th), and Bosnia and Herzegovina (72nd) all rank higher. The only countries that ranked lower were Serbia (80th), Kosovo (105th), and Albania (113th).

In 2005, the government adopted an official Program for the Fight against Corruption and Organized Crime, and then created an Action Plan to implement the Program the following year. In 2007, the Government established a National Commission to monitor the implementation of the Action Plan. The Deputy Prime Minister and Minister of Justice Dusko Markovic currently heads the Commission.

A legal framework to help combat corruption and organized crime has been in force since the August 2006 adoption of the Law on Witness Protection. Montenegro is also preparing a criminal intelligence system, and has been a full member of the International Criminal Police Organization-Interpol since September 2006.

Since 2010, progress on combating corruption has been achieved through the passage of important legislation on public procurement, the treasury and budget system, and the courts. Nevertheless, there have been few high-profile corruption prosecutions. Implementation of these laws is considered a top priority for the government. On June 29th, 2012 Montenegro officially started negotiations with the EU and the most challenging chapters are related to the area of rule of law.

The law provides criminal penalties for corruption by officials, but the government did not implement the law effectively, and corruption remained a serious problem, as indicated in Transparency International’s 2012 Perception Index. Officials in many institutions at times engaged in corrupt practices with impunity, but such practices were perceived to be particularly rife at the local level--in zoning, public procurement, privatization, education, and health care. A survey conducted in December 2011 by the governmental Administration for Anti-Corruption Initiative, in cooperation with the OSCE, found that corruption was most evident in the health care system, the customs office, and among police. During the first nine months of 2012, citizens reported 67 cases of corruption to the competent government bodies.

Observers believed that public tenders, mainly used in the construction, trade, agriculture, and information technology sectors, often were rigged to suit companies with political influence. Institutional capacity for monitoring tenders was limited. In the first nine months of 2012, there were no final convictions for violating the public procurement law. A new law that took effect in January requires any tender involving more than 500,000 euros ($660,000) be reported to the Commission for Monitoring Public Procurement Procedures. During the first nine months of 2012, this procedure was used once.

Although authorities took steps to strengthen anticorruption laws and institutions, implementation lagged. Efforts to investigate, prosecute, and convict officials for corruption remained largely ineffective. The State Auditor General has not taken any legal action related to embezzlement since his office was created in 2005. The leading anticorruption NGO MANS criticized the chief state prosecutor for inefficiency, complicity in corruption, and failure to take appropriate anticorruption measures against top state officials. The NGO Civic Alliance claimed that officials did not act on many instances of corruption that MANS brought to their attention. MANS stated that police attempted to intimidate them by summoning a MANS activist, Dejan Milovac, for an “informational talk” on July 16, without stating a clear reason.

Internal controls seldom resulted in efficient prosecution of the perpetrators. A reform initiative was underway, but the public sector remained politicized and overstaffed. Authorities were slow to introduce measures that they themselves had identified as necessary. The commissions and working groups established to devise and implement the reforms were often themselves staffed by high-ranking state employees, who received pay in addition to their salaries.

Mechanisms for controlling the funding of political parties and electoral campaigns remain weak. According to the Amendments to the Law on Political Party Financing, enacted in December 2011, the state auditor general is responsible for auditing political parties’ annual balance sheets and reports on election campaign costs, while the State Election Commission is in charge of monitoring the implementation of other aspects of the law. The professional capacity and independence of the State Election Commission and the state auditor general were insufficient to ensure fully effective independent oversight. The mechanisms for verifying the funding of political parties and electoral campaigns and imposing penalties remained ineffective. Very few sanctions were applied to political parties for breaching financing rules.

Several law enforcement officials faced corruption charges during 2012. On July 1, the Supreme State Prosecutor’s Office indicted three employees from the Ministry of Interior for taking bribes in return for issuing forged personal documents. Those cases were initiated on the basis of evidence provided by a third party. Verdicts by primary courts were issued against former Budva mayor Rajko Kuljaca, Deputy Mayor Dragan Marovic, and nine associates on charges of abuse of power, with a possible sentence of two to five years’ imprisonment. Kuljaca was believed to have enabled the firm Zavala Invest to start construction of a hotel complex that was illegally built on the protected Zavala peninsula. The president and a judge of the basic court in Cetinje, Goran Vrbica and Nebojsa Markovic, were indicted for bribery. The former mayor of Ulcinj, Gzim Hajdinaga, together with Naser Keljmendi, who was alleged by Interpol to head one of the region’s largest criminal organizations, reached a settlement with the supreme state prosecutor to pay 10,000 euros ($13,000) in damages stemming from illegal construction deals in Ulcinj municipality. The number of corruption cases in which the assets were confiscated was very low.

Police corruption and inappropriate government influence on police behavior remained problems. The close-knit nature of Montenegrin society discouraged the reporting of corruption and made it easy for criminals, using family or social connections, to gain access to law enforcement officers.

During 2012 the Ministry of Interior’s Internal Affairs Unit reported that 36 law enforcement officers had faced criminal charges since 2008. Internal investigations by a variety of institutions significantly reduced, but did not eliminate, impunity. NGOs noted that many police officers found responsible for violating rules of service, as well as senior officers implicated in former cases of torture, remained on duty. The OSCE and resident diplomatic missions continued to provide training for police, security, and border and customs officers on combating terrorism, corruption, and financial crimes. Government officials were subject to financial disclosure laws, and most complied with the requirements in a timely fashion. The governmental Commission for the Prevention of Conflicts of Interest (CPCI) has the power to investigate the truthfulness of officials’ disclosures about their property and income, except for their bank accounts. Any gift exceeding 50 euros ($66) must be reported to the CPCI. The NGO Center for Monitoring stated that many top state officials who are required to report their annual income reported that they were deeply in debt. In the view of the NGO, such reports were not consistent with the earnings of the officials in question.

During the first ten months of 2012, 159 of 3,496 officials failed to report their income; the consequences for those who declined to file, if any, were unknown. During the same period, the CPCI initiated procedures to remove 21 officials. It reported that courts issued verdicts in cases involving 11 officials during the first three months of 2012 but failed to publish their names due to the opinion of the Agency for Protection of Personal Data that the names of public officials should not be disclosed. On June 25, the agency ordered the CPCI to reduce the scope of information published about state officials.

Excessive discretion granted to officials in the disposition of public property likely encouraged corruption. For example, on September 28, the media reported that the City of Podgorica gave full ownership of city-owned apartments to 19 local government officials to address their housing needs. According to the media, many of those officials were financially secure. In spite of two decisions of the Administrative Court during 2012 requiring that it do so, the City of Podgorica failed to publish names of 300 municipal employees, persons in need, and other persons whom Podgorica authorities deemed worthy of receiving apartments based on their “significant contributions to the city.”