For a year and a half, the Ministry of Finance has been hiding data on payments from the budget for loan instalments and loan interests of the state-owned company Montenegro Airlines that has been reporting losses, and that has been illegally receiving state aid for years in order to survive.
MANS requested from the Ministry of Finance data on all payments in 2017 for paying the instalments and interests of Montenegro Airlines, but the request was rejected because, as explained, “the requested information is marked with degree of secrecy internal”.
In its response, the Ministry of Finance did not indicate whether it had conducted the so-called “harm test” that should show why it made a decision to hide the information from the public, i.e. who and whose interest was more important than the public’s interest in knowing in what way money from the state budget is spent.
This case of hiding data from the public is important bearing in mind that the Government of Montenegro continuously allocates significant funds for the survival of the national airlines and continues to provide aid to it, in spite of the European Commission’s warnings that it violates the Stabilization and Association Agreement in the part that refers to state aid.
The Special State Prosecutor’s Office is also granting state aid to Montenegro Airlines, and in their reports, auditors have been warning for years that the national airline company cannot settle the loss from regular sources, as well as its due liabilities, and almost entirely depends on the support of the Government.
At the end of 2018, accumulated loss of Montenegro Airlines amounted to almost €90 million, while, according to the new blacklist of the Tax Administration, the company owes €20.45 million for taxes and contributions to employees. Montenegro Airlines owes tens of millions of Euros to the Airports of Montenegro and Serbia and Montenegro Air Traffic Services LLC, which is why its account is often blocked.
All this speaks in favour of the fact that data on how the state repays the debts instead of Montenegro Airlines must be public and known to all citizens, instead of being declared secret.
Unfortunately, MANS has recently noted an increase in the practice of state institutions that public information is classified as a secret even regarding the manner in what taxpayers’ money is spent, which is completely contrary to international practices and standards.
Thus, in the case of Montenegro Airlines as well, it is a violation of the Law on Classified Information, because there is not one legally founded reason why the amount of instalments and interest for the loans of this company would be hidden from the public.
In order to legalize such behaviour of state institutions, the Government of Montenegro, the Ministry of Defence specifically, headed by the Minister Predrag Bošković, prepared amendments to the Law on Classified Information, which allows state institutions to declare any information secret if it is necessary to “perform their activities”. This broadly defined notion allows huge discretionary authority and may completely close all sources of data for any serious civilian control of the work of state institutions, which is also in conflict not only with international practice, but above all with the very essence of the EU integration.
The proposed amendments are particularly dangerous bearing in mind the possibility to conceal evidence of law violations and corruption much easier by simply declaring this kind of information secret. This would directly affect the capacities of civil society and free media to fight corruption and point to shortcomings in the work of the Government, which we presume was one of the main motives for introducing such amendments.
Once again, MANS urges the Ministry of Defence to withdraw such law from a public hearing until all incitements to corruption are removed from it and until it is fully harmonized with good international practice regarding free access to information.
Dejan Milovac
MANS Investigative Centre
Montenegro Airlines has been receiving generous aid for years
Earlier analysis of the MANS Investigative Centre and “Vijesti” showed that from the establishment of Montenegro Airlines to the end of 2014, the Government invested 58.5 million Euros in the company based on the recapitalization and subsidies, while due to decrease in the company’s share capital, it lost at least 14.3 million. The Government continued to provide aid to Montenegro Airlines even after that period, but the data was kept secret from the public. In 2017, the Government granted Montenegro Airlines 9.7 million Euros through three transactions, which Darko Radunović, the Minister of Finance, admitted at the session of the Committee on Economy, Finance and Budget in mid-November 2018.
Violation of the Law on State Aid Control
By providing aid to Montenegro Airlines, the Government also violates the Law on State Aid Control, which specifies that state aid is expenditure, reduced income or a reduction in the assets of a state or municipality, which distorts or may impede free competition in the market and which can affect trade between Montenegro and the European Community or the member states of the Central European Free Trade Agreement (CEFTA), by bringing of certain economic entities, products or services into a more favourable market position. The Law on State Aid Control stipulates that a company that receives state aid once cannot receive it again in the next 10 years.
