0.63 million
CORRUPTION INDEX (2024)44 / 100
CRIMINALITY SCORE5.9
total area13.8 km2
US$10.47 billion
FREEDOM OF THE PRESS (2024)72,83 / 100
RESILIENCE SCORE4.75
GDP PER CAPITA (2023)US$12 221.5
More about the Organized Crime Index
Montenegro ranks second highest for criminality in the Western Balkans, just behind Serbia, with a score of 5.90 on the Global Organized Crime Index 2023, above the regional average of 5.60. Montenegro has a low resilience score of 4.75, the second lowest in the region. Financial crimes are one of the most challenging criminal markets in the country, with a score of 6.0.
Montenegro is vulnerable to illicit financial flows (IFFs), largely due to its role as a transit route for the trafficking of illicit commodities and people between Asia and Western Europe. The main components contributing to IFFs in Montenegro are increased corruption and abuse of power, as acknowledged by the government.
In Montenegro, about 30 of the 5 700 registered civil society organizations (CSOs) focus on countering organized crime and corruption. Their efforts against IFFs face significant obstacles, including limited space to operate, verbal attacks from officials, financial instability and restricted access to information. Despite government recognition, civil society feels neglected, leading to various civic initiatives. Despite political pressure and attempts to discredit them, Montenegrin media and civil society persist in their work. CSOs gaining increasing public support, even as half of all journalists experience intimidation while performing their professional duties. Media interest in investigating and reporting on these cases is rising, despite their limited capacity. There is little evidence of civil society and media involvement in the development of the National Risk Assessment (NRA) for money laundering and terrorist financing risk assessment.
Montenegro's most recent NRA was conducted in 2020, categorizing money laundering in the country as 'medium' risk. The assessment highlighted several vulnerable areas and identified systemic weaknesses that need to be improved (see Figure 1). Drug trafficking at the international level poses the highest risk.
Improving international cooperation has been highlighted as a top priority across Montenegro's strategic documents on money laundering and IFFs. In the last three years, substantial data has been obtained from foreign police services and financial investigation units through collaborative efforts.
In 2023, the total number of international police cooperation cases remained fairly consistent at 10 901, with a slight decrease from 10 938 in 2022. In 2021, the number of cases opened by foreign financial intelligence services increased significantly by 170%, from 46 in 2020 to 115 in 2021. However, this upward trend was reversed in 2022, when the number of cases dropped to 66 cases, followed by a further decrease to 35 cases in 2023.
Montenegro underwent a legal and institutional shift from an administrative to a police model for its FIU, which lead to its cessation as a member of the Egmont Group of Financial Intelligence Units in 2019. Subsequently, Montenegro signed bilateral memoranda of understanding with the FIUs of Serbia, Kosovo, North Macedonia, Slovenia, Cyprus and Azerbaijan. A liaison officer and INTERPOL channels have been established with the United Kingdom, as well as an INTERPOL channel with the FIU of Bosnia and Herzegovina.
Montenegro’s FIU is effective at international collaboration and uses foreign intelligence to initiate money laundering investigations, although only two cases have resulted from mutual legal assistance (MLA) requests. While considered a reliable partner with timely responses, the FIU is less proactive in spontaneously sharing relevant intelligence.
The anti-money laundering regulation has pinpointed key supervisory institutions. The 2020 NRA identified three institutions that play a crucial role in combating money laundering and illicit financial transactions: the special state Prosecutor's Office, the police administration and the national security agency.
According to MONEYVAL, Montenegro’s banking sector, which dominates the financial system with 93% of total assets, has a good understanding of money laundering risks and compliance with anti-money laundering and countering the financing of terrorism (AML/CFT) obligations. Nevertheless, supervisory authorities should aim to enhance awareness of money laundering and terrorist financing risks among financial institutions and designated non-financial businesses and professions (excluding banks and money remitters), with a particular focus on high-risk sectors such as notaries, company formation agents and casinos.
The 2020 NRA outlines detailed measures to effectively combat IFFs and money laundering. Strengthening the legal framework in specific areas, identifying offences that generate illicit proceeds and tracing assets derived from such activities are key priorities. The implementation of investigative measures will lead to more identified cases, prosecutions and confiscation of illicit proceeds.
Estimating the scale of IFFs in Montenegro is difficult, but civil society and official reports provide similar estimates. According to civil society, inflows of IFFs amount to about 3.95% of Montenegro's GDP, while outflows amount to 4.10%. Similarly, the finance ministry reports that illicit outflows represent about 4.1% of GDP.
The Department for Financial Intelligence Affairs acts as the FIU in Montenegro. It was integrated into the Police Administration in 2019, as a result of legal and institutional reforms. The FIU plays a central role in Montenegro's AML/CFT legislation, focusing on data collection, analysis and cooperation for the detection and prosecution of money laundering and terrorist financing.
Over the past three years, Montenegro’s track record on money laundering investigations has continued to improve, according to the European Commission (see Figure 5). Between 2016 and 2022, Montenegro initiated 80 financial investigations, of which, according to our research, only two were successfully completed. According to the NRA, the special prosecutor’s office predominantly initiates financial investigations, highlighting the limitations of other prosecution offices.
Montenegro's legal framework addresses proceeds from criminal activities in line with international legal standards, but faces challenges in asset confiscation. While the special prosecutor's office achieved some permanent confiscations in the period 2016–2021, no final court decisions on asset confiscation were identified in 2021. At the same time, two temporary confiscation orders were issued. In cases where there are no traceable proceeds, the legal framework still does not include the confiscation of assets of equivalent value.
The 2020 NRA did not identify any CSOs that were involved in, or intended to be involved in, terrorist financing. As a result, CSOs were not considered a threat and remain unaddressed in the national counter-terrorism financing framework.
MONEYVAL has highlighted that the risk of civil society being misused (specifically for terrorism financing) has not been comprehensively addressed, as mitigation efforts rely primarily on banks, limiting oversight to financial transactions. While CSOs are generally aware of how they can be misused by criminals, their understanding is less specific when it comes to terrorism financing.
Civil society in Montenegro is increasingly under pressure, as evidenced by government-backed initiatives like the proposed Law on Foreign Agents, which aims to restrict the space for civil society activity.
While the role of civil society in monitoring government and security institutions is growing, improvements in the legal framework for transparency and freedom of information are needed. Civil society and the media show a strong interest in money laundering issues in Montenegro. However, their capacity and understanding of IFFs needs to be strengthened to allow for more effective oversight.
A number of comprehensive measures are recommended to improve the overall approach to combatting IFFs in Montenegro. Implementing these measures collectively will contribute significantly to a more robust and effective framework for combating IFFs.
