1. EXTRACTS FROM THE EUROPEAN COMMISSION REPORTS ON MONTENEGRO (2005 – 2007), COUNCIL OF EUROPE REPORTS ON MONTENEGRO (2005 – 2008) AND GRECO EVALUATION REPORT ON MONTENEGRO (2006) (PDF) download >>>
2. ANALYSIS ON MONTENEGRO BASED ON THE EXTRACTS FROM THE EUROPEAN COMMISSION REPORTS (2005 – 2007), COUNCIL OF EUROPE REPORTS (2005– 2008) AND GRECO EVALUATION REPORT (2006)
General Overview
In the Feasibility Study and Progress Report (2005), European Commission points out that Montenegro suffers from a high level of corruption, with links between organized crime and segments of the political and institutional system, while the environment is conducive to corruption and nepotism. The Commission and Council of Europe conclude, in a similar way, that a few efforts are made by the authorities to fight corruption and organized crime which are a source of serious concern, underlining that this issue should be stepped up and concrete results should be delivered.
In 2006, statements of European Commission are somehow softening, pointing out that the influence of organized crime in certain spheres of economic and social life further limits the capacity of the state to fight corruption successfully. On the other hand, Group of States against Corruption (GRECO) in its Evaluation Report on the Republic of Montenegro, adopted in October 2006, points out that corruption is a complex, extremely dangerous and widespread criminal phenomenon which is present among high state officials, concluding that the situation is urgent since corruption is regarded as one of the main obstacles to the country’s economic and social development. In addition, GRECO stresses that Montenegro as a country in transition is vulnerable to organised criminal groups’ activities, while the European Commission European underlines that the causes of corruption are related to shortcomings in the transition process and the frequent abuse of administrative procedures.
In its Report for 2007, the Commission repeats that the lack of appropriate control over the state institutions and the influence of organized crime further limit the capacity to fight corruption. Moreover, Council of Europe emphasizes that corruption is one of the key problems facing Montenegro’s society and its political, economic, judicial and law-enforcement institutions. For the first time the Commission is requiring results on the ground in particularly in the area of high-level corruption.
Council of Europe underlines, in its Secretariat Monitoring Report issued on 11 June 2008, that its support for the fight against corruption and organised crime should be amongst the priorities in the next period.
Capacities to Fight Corruption and Anti-corruption Policies
In 2005 the Commission, as well as Council of Europe, welcomes the adoption of strategy for fighting corruption and organized crime. European Commission states that its implementation remains of utmost importance. The Commission and Council of Europe, underline that the structures for a fight against corruption are basically there but they are not efficient. It is pointed out, in the Commission’s Report, that no comprehensive action is taken to investigate financial crime, while commitment to fight corruption has remained largely rhetorical.
In the following year, the Commission greets adoption of the Action Plan to implement the Strategy against Corruption and Organized Crime and reporting of institutions on corruption cases. Moreover, European Commission and GRECO points out that particular attention should be paid to enhancing administrative capacity and law enforcement in fight against corruption and organized crime, where relevant institutions need to have sufficient resources, properly trained staff and necessary technical equipment. In addition, GRECO emphasizes a need for an efficient monitoring of the implementation of the anti-corruption programme through a specialized independent anti-corruption body.
In 2007, European Commission welcomes establishing of a National Commission for monitoring of implementation of the Action plan, raising, at the same time, question over independence of the National Commission. European Commission and Council of Europe express their concerns over the lack of implementation of the Action Plan, pointing out that the National Commission is falling short of tackling the real implementation of the measures required. It is pointed out, in the Commission’s report, that the capacity of the authorities to effectively monitor, prosecute and try corruption cases remained limited and therefore the number of persons convicted remains low. Therefore, the Commission repeats as well as Council of Europe that particular attention should be paid to enhancing administrative capacity, law enforcement and training in fight against corruption and organized crime.
In its Secretariat Monitoring Report, issued on 11 June 2008, Council of Europe greets setting up of a Working group in order to improve the Action Plan for 2008 and to target it towards more concrete and visible results, however, it repeats that, although, progress has been made in the legislative field and in the establishing of anti-corruption structures, concrete results and efficient criminal prosecution of cases before the courts are still lacking as no significant rulings have been handed down.
International Conventions and Obligations
In 2005, European Commission welcomes Montenegro’s joining of the Council of Europe’s GRECO initiative and ratification of the European Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime ( in its Eight Report, Council of Europe gives its opinion that Montenegro should pursue ratification of this Convention), concluding that UN convention provisions need to be adopted.
In its Progress Report 2006 European Commission stresses need for the training of all relevant agencies to be carried out with a view to fully implement the UN Convention on corruption.
In the following year the Commission greets the notification of Montenegro’s accession to the United Nations Convention against Corruption and the signing of a memorandum of understanding concerning cooperation in fighting corruption through the South – Eastern European Anti – Corruption Initiative in 2007.
In 2008, Council of Europe welcomes ratification of the Civil Law Convention on Corruption and the Additional Protocol to the Criminal Law Convention on Corruption, highlighting that it will be important for the remaining legislation concerning anti-corruption to be adopted in line with the recommendations of the GRECO.
Judiciary
In 2005 European Commission, as well as Council of Europe, expresses its concerns over the independence of the judiciary which is obstructed by political influence. Moreover, Council of Europe points out that there is a concern over existence of corruption within the judiciary and prosecution. According to Council of Europe causes for aforementioned issues could be found in: the system of appointment of judges and prosecutors by the Parliament, political or financial pressure, the fact that the courts and prosecution authorities must be financed from the regular state budget and the lack of effective disciplinary measures. The Commission stresses that proper implementation of the legislation in both criminal and civil matters, which is crucial according to the opinion of Council of Europe, remains a source of serious concern. Council of Europe concludes that further efforts are needed to produce in-depth reforms to secure the independence and impartiality of the judiciary and prosecution.
In 2006, the Commission repeats, and GRECO, also states in its Evaluation Report, that Parliament’s involvement in personnel management in the judiciary raises serious concerns for the independence of the judicial system – a clear risk of political interference in appointments, dismissals of judges and prosecutors, as well as in re-election of prosecutors, exists. Moreover, GRECO emphasizes that this situation is aggravated by the facts that judges and prosecutors have the right to be members of political parties and that judiciary is affected by corruption, concluding that this situation could be an obstacle to investigating high-level corruption cases. The Commission underlines that financing of the judicial system needs to be addressed in order to enhance independence of the judiciary, while GRECO concludes that there is a need for reviewing recruitment and promotion procedures of judges and prosecutors ensuring that they are based on objective criteria. European Commission repeats that the implementation of the criminal and civil legislation is weak because of the limited capacity of judicial professions and relevant administrative structures, where GRECO finds that most of citizens’ complaints are about the length of criminal investigations and proceedings and the non-enforcement of court decisions.
In the next year, European Commission and Council of Europe emphasize, again, that the consolidation of an independent and efficient judiciary remains a key concern and a central issue in the development of Montenegro’s democracy. Furthermore, the Commission points out that the political influence in judiciary is enabled through the system which allows parliament to decide on appointing, promotions, re-election, disciplinary proceedings and the dismissal of judges and prosecutors and through the fact that the government decides on the financing of the judicial system. Moreover, Council of Europe underlines, as well as GRECO in 2006, that further legislative guarantees and practical reforms will be needed to complete the new framework underpinning the judiciary system in order to clearly define the criteria for the appointment and dismissal of prosecutors, and in order to improve the material conditions of judges. European Commission repeats, as well as in 2006, that the implementation of the criminal and civil legislation is weak and it continues to be a matter of a serious concern.
In 2008, Council of Europe states that the principle concerning the role of the Parliament in appointing the Presidents of the Supreme Court and the Public Prosecution was not fully implemented in the new Constitution – which may hamper the independence of the judiciary and prosecution. According to the opinion of Council of Europe the High Judicial Council will have to work on the criteria and procedures for appointment of judges, which will be the primary guarantee of the independence of the judiciary.
Public Administration and Business Environment
In 2005 European Commission states that concerns are raised in relation to irregularities and the transparency in the ongoing privatisation process, concluding that there is a need for stable macroeconomic environment supported by the creation of a strong private sector through de-monopolisation and privatization which are sustained by a stable and transparent legal and regulatory framework. It is emphasized that Montenegro should devote particular attention to the issue of illegal economic activities.
In its Report for 2006, the Commission points out that the legal and administrative framework for the management of public assets contains loopholes which allow corrupt activities to take place particularly in the areas of privatization, concessions, construction, spatial planning and public procurements, while GRECO stresses, as well as the Commission in 2005, that there is reason to believe that irregularities occurred in the process of privatization. In addition, GRECO underlines that there is no law which compiles regulations on the conditions for obtaining a license – the system is complicated and the whole situation is conducive to corrupt practices. GRECO concludes that the main priority is the monitoring of sectors such as privatisation, concessions and public procurement, recommending preparation and adoption of special mandatory anti-corruption training programmes tailored to the needs of the various categories of civil servants.
In the following year European Commission repeats its concerns over the management of public assets and the situation in which exists a considerable room for corruption, especially in the cases of construction and land-use planning, privatisation, concessions and public procurement. It welcomes appointment of a commission for monitoring of the transparency of privatization procedures, while pointing out that procedures for reporting conflicts of interest in privatization have not been established. The Commission states that conflict of interests and politicisation affect the performance of the public administration, emphasizing that there is a lot to be done especially in the areas of transparency, accountability, licensing procedures and impartiality at both national and local levels.
In its Secretariat Monitoring Report issued on 11 June 2008 Council of Europe persuades the authorities of Montenegro to give particular consideration to guaranteeing transparency and accountability of public administration at both national and local levels.
Public Procurement
In its Feasibility Study and Progress Report (2005), the Commission states that Montenegro should create transparent and open public procurement procedures ensuring fair and non discriminatory conditions of competition for EU suppliers, while Council of Europe notes that a Law on Public Procurement is in the process of being amended.
In 2006, European Commission calls the Government to address allegations of corruption and fraud in the awarding of public contracts, underlining that more efforts are required to prevent corruption by upgrading and strengthening legal, institutional and administrative capacity and the systems for monitoring and controlling procurement activities. In addition, GRECO states that the Law on Public Procurement was not prepared thoroughly enough and required amending, which resulted by situation which is conducive to corruption. Moreover, it is emphasized in CRECO Evaluation Report that significant lacunae in the Law exist and that it suffers from a significant lack of clarity – all these issues make it very difficult for applying. GRECO recommends that the Law on Public Procurement should be revised with a view to clarifying its provisions and ensuring a more transparent procedure.
According to the opinion of European Commission, expressed in the Progress Report 2007, the Public Procurement Law fails to comply with the acquis in several areas and the agreed institutional framework is not completely established. In the previous year European Commission required from the Government to address allegations of corruption in the awarding of public contracts, however, in Progress Report 2007, there is no information if the Government has done anything concerning this issue.
Money Laundering
In its Progress Report 2005, European Commission welcomes coming into the force of the relevant legislation on fight against money laundering. However, the Commission concludes that the enforcement of the anti-money laundering legislation needs serious improvement in particular in the context of the perceived scale of the problem of corruption and organised crime.
In 2006 European Commission points out that the Directorate against Money Laundering has not developed guidelines on what should be considered as a suspicious transaction and there is no proper monitoring of financial transactions beyond the banking system particularly in relation to real estate and inward investment. In addition, GRECO recommends keeping under careful review all reporting institutions, enhancing training to increase awareness of suspicious transactions reporting and monitoring progress in this area.
In the next year, European Commission repeats, as well as in 2006, that there is no proper monitoring of financial transactions beyond the banking system, especially in relation to real estate and inward investment. Therefore, European Commission calls Montenegro for an urgent action and reinforcement of its efforts to replace cash transactions by electronic transactions, in order to ensure proper control on suspicious transactions.
In its Report issued on 11 June 2008, Council of Europe welcomes adoption of the law on Prevention of Money Laundering and Financing of Terrorism.
Conflict of Interests
In 2005, European Commission states that legislative progress has been achieved with the adoption of the Law on the Prevention of Conflicts of Interest. However, the Commission emphasizes that it has been implemented with difficulty, underlining, as well as Council of Europe, that it contains problematic provisions allowing members of parliament to be members of boards of public companies. In addition, the Commission underlines that this legislation should be reviewed in line with international standards, and Council of Europe concludes that the creation of a Commission for the identification of the conflict of interest is a positive development, while pointing out that it has no monitoring or reporting powers.
In its Progress Report 2006, the Commission stresses that the lack of an appropriate legal framework to deal with the conflict of interests of officials has a crucial impact, pointing out, again, that the Law on Conflict of Interest contains problematic provisions. In addition, GRECO points out that the system of prevention of conflicts of interest suffers from several shortcomings: the Law does not impose any restrictions on members of the Commission with regard to their membership of political parties, also allowing the highest-ranking officials to serve on the board of companies with predominant state and to simultaneously negotiate the privatisation of state property on behalf of the state. Therefore, GRECO recommends taking of legislative measures to prohibit aforementioned situations, while European Commission repeats, as well as in 2005, that the Law on Conflict of Interest should be significantly reviewed.
In the following year, European Commission points out that the current Law on Conflict of Interest should be significantly amended.
In 2008, Council of Europe underlines that the amendment of the law on the conflict of interests is required.
Free Access to Public Information
In its Progress Report 2005 European Commission states that the draft Law on Free Access to Public Information is only in preparation. Council of Europe in its Quarterly Reports, during 2005, continuously repeats that Montenegro should adopt the Law on Free Access to Information and subsequently ensure its effective implementation, emphasizing that legislation on free access to information has an instrumental role in the fight against corruption.
In the next year, European Commission and Council of Europe welcome the adoption of the Law on free access to public information. Council of Europe, in its Report, repeats that its implementation represents a challenge for the whole society, and should be closely observed in the forthcoming year, while GRECO highlights that appropriate information on the Law should be made available to the public at large.
In 2007 European Commission states that NGO representatives encountered difficulties as regards access to information.
In its Secretariat Monitoring Report issued on 11 June 2008, Council of Europe states that the law on Access to Public Information, as an important tool for fighting corruption, is weakly enforced by the courts, in particular in relation to privatisations, pointing out that NGOs and civil society face a long, difficult and expensive process to gain access to the information. According to the opinion of the Council, there could potentially be a useful role to play of an independent Commissioner on access to public information as an independent form of transparent public oversight.
Financing of Political Parties
In its Progress Report 2005, European Commission states that legislative progress has been achieved with the adoption of the Law on Financing of Political Parties. However, the Commission, as well as Council of Europe, underline that the Law is implemented with difficulty. Furthermore, European Commission points out that, political parties fail to fully observe the legal deadlines and procedures for reporting financial assets and the financial management of electoral campaigns. The Commission and Council of Europe emphasize that the constitutionality of a recent amendment of the legislation related to the allocation of resources for financing electoral campaigns is challenged.
In 2006, European Commission repeats that the laws on political parties and their financing are implemented with difficulty and political parties failed to observe the legal deadlines and procedures for reporting financial assets and the financial management of electoral campaigns.
In the following year European Commission repeats, for the third time, that the laws on political parties and their financing are not implemented sufficiently, underlining that there are no improvements in activities to curb political corruption.
In its Report issued on 11 June 2008, Council of Europe states that there continues to be a lack of clarity in the rules governing the financing of the campaigns since new legislation on political parties, especially on the funding of political campaigns, has not yet been adopted. Therefore, Council of Europe points out that Montenegro need to adopt laws on political parties, their financing and the financing of election campaigns in line with the recommendations of the Venice Commission.
Customs
In its Feasibility Study (2005) European Commission underlines that for the improvement of the fight against corruption in the area of customs further reforms are required.
In the opinion of European Commission, in 2006, the fight against corruption in customs is, to some extent, strengthened by the opening of a 24-hour customs helpline in an attempt to combat corruption, emphasizing that the efforts in the area of the fight against corruption in customs need to be pursued and strengthened.
However, in the later Progress Report in 2007 the issue concerning the fight against corruption in customs was not mentioned.
Taxation
In its Progress Report 2005, European Commission states that more efforts are needed in order to tackle fraud in the area of excise duties and to pursue and reinforce the fight against corruption in order to achieve a non discriminatory application of tax laws.
In the following year, the Commission repeats the statement that the fight against corruption requires reinforcement in order to achieve a non discriminatory application of tax laws.
However, in the later Progress Report in 2007 the issue concerning the fight against corruption in area of taxation was not mentioned.
Competition
In Feasibility Study and Progress Report 2005, European Commission states that Montenegro needs to ensure fully independent competition authorities which would be equipped to ensure efficient enforcement practice, giving priority to cases with a serious effect on the market and ensuring deterrent sanctioning of infringements. In its opinion, Montenegro needs to develop its competition advocacy by: promoting competition policy, the screening of draft legislation regarding competition aspects and improved public procurement practices.
In 2006, the Commission welcomes entering into force of the Law on the Protection of Competition. The Law envisaged a department, which, as a supervisory authority, will deal with certain cases of mergers, abuse of dominant position and anti-competitive agreements and which should be operationally independent.
In the next year, according to the opinion of European Commission, Montenegro has made some progress in the area of anti-trust by amending the Law on Competition Protection, which provides for the establishment of an operationally independent competition authority – the Directorate for Competition Protection. The Commission emphasizes, again, that the system needs to be established for imposing effective deterrent fines, and that further improvements are needed to its legislative framework and in setting up operationally independent competition authorities.
State Aid
In its Progress report 2005, the Commission recommends that Montenegro should strengthen its state aid structures and ensure full transparency.
In 2006, European Commission points out that Montenegro needs to strengthen its state aid structure by setting up a system of ex ante control through an operationally independent state aid authority, with the power to authorise or prohibit all aid measures and to order recovery of unlawfully granted aid.
In the following year, the Commission welcomes the approval and entering in force of a state aid law under which will be established the state aid control commission with powers to authorise the granting of aid and order recovery of unlawful aid and ex-post supervision. European Commission underlines, again, that Montenegro needs to make further improvements to its legislative framework and in setting up operationally independent state aid authorities.