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EU and Council of Europe encourage Montenegrin authorities to reinforce the prevention of money laundering and terrorist financing

Effectiveness of the mechanisms for prevention of money laundering and terrorism financing (AML/CFT), and establishing an effective track record of investigation, seizure and confiscation of criminal proceeds are some of the main challenges that Montenegro is facing on its European path. The European Union and the Council of Europe are supporting Montenegrin authorities in reinforcing the existing safeguards in the legal and institutional framework and in fostering development of operational capacities necessary to stand up to the dangers that financial crime poses to Montenegrin economy and society. However, Montenegrin authorities are expected to undertake and assume ownership of comprehensive policy changes, as well as to ensure their vigorous application in practice, as delays and deficiencies in this area might endanger the stability of the financial system and undermine overall efforts in the European integration process.

This was the key message at the opening of the conference Anti-money laundering and counter-terrorist financing system in Montenegro: obstacles to the effective system and the way forward, which was organised in Podgorica by the EU Delegation to Montenegro and the Council of Europe Programme Office in Podgorica today.

The conference provided a platform to discuss the effectiveness of Montenegrin AML/CFT system, with the view to encourage rapid action to overcome the existing gaps in the legal, institutional and operational framework. The participants specifically discussed the effectiveness of the key elements of the Montenegrin system for prevention of money laundering and terrorist financing and the preparedness of Montenegro to apply the international standards in the areas of national co-ordination, regulation and supervision of financial and non-financial institutions, and competences of law enforcement agencies.

Over the past years Montenegro has taken steps to reinforce its legal system and align it with the newest EU Directives, as well as to establish risk-based supervision of financial institutions. However, challenges remain in the area of supervision of non-financial sectors and legal professions, identification of beneficial ownership and confiscation of criminal proceeds. For instance, Montenegro is yet to establish a system of efficient implementation of targeted financial sanctions, that would enable immediate enforcement of United Nations Security Council Resolutions.

Sergej Sekulovic, Minister of Interior Affairs of Montenegro, highlighted in his introductory remarks the immense importance of the support provided by the European Union and the Council of Europe to strengthening Montenegro's capacity in the fight against corruption, money laundering and terrorist financing, all in line with the European standards. “The Ministry of Interior is approaching its obligations regarding the reform of the system for the prevention of money laundering and terrorist financing in a serious and responsible manner. One of the concrete steps the Ministry has taken was the establishment of the inter-ministerial working group whose primary task is to intensify activities in this area, all with the aim of implementing international standards”, he said. “Some results of this working group include development of the Strategy for prevention and suppression of terrorism, money laundering and terrorist financing for the period 2022-2025, preparation of the draft Law on Prevention of money laundering and terrorist financing, as well as the formation of the Working Group for drafting a new Law on international restrictive measure”, added minister Sekulovic.

One of the strategic goals of the Government of Montenegro is the continuous regulation and improvement of customs policy and a more efficient control system, including among other things physical transfer of money across the border”, stated Janko Odovic, Secretary of Ministry of Finance, Labour and Social Welfare of Montenegro. Furthermore, the Ministry of Finance continues its dedicated work on drafting of the new Law on games of chance. “The new law aims to create a better environment for market development and attract organisers from abroad, greater fiscal discipline, but also to provide more funds for the budget of Montenegro, so that there will be less room for embezzlement, tax evasion, non-payment of fees", concluded Odovic.

Montenegro needs to make sure that its financial system does not allow dirty money to circulate and facilitate more crimes. This should be done by reviewing the legal and operational approach towards financial investigations, establishing an integrated approach between all bodies involved and providing them with the necessary legal and operational tools to efficiently fight these types of criminal activity”, said Yngve Ergstrom, Head of Sector for Co-operation in the EU Delegation to Montenegro. “The country can count of the EU’s continued support in the fight against money laundering and terrorist financing, because we are confident that those efforts strike at the very heart of organised crime”, he concluded.

The increased number of preliminary investigations on cases of money laundering, together with more cases reaching the courts, is a promising sign of the enhanced capacities of law enforcement agencies and prosecution to combat money laundering and terrorist financing. However, this indicator has to now be matched with increased numbers of final convictions and higher amounts of confiscated proceeds of crime”, concluded Evgenia Giakoumopoulou, Head of Operations in Council of Europe Programme Office in Podgorica.

The process has been undertaken by the Action against economic crime in Montenegro, a part of the joint European Union and Council of Europe programme “Horizontal Facility for the Western Balkans and Turkey 2019-2022”, implemented by Economic Crime and Co-operation Division of Council of Europe.

Podgorica 23 November 2021
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