Bribery and Corruption in Montenegro

1. Legal Framework

1.1. What is the legal framework for bribery and corruption in your jurisdiction?

The legal framework for bribery and corruption is primarily defined by: (i) The Criminal Code of Montenegro (CCM), (ii) The Law on the Prevention of Corruption (LPC), (iii) The Law on Financing of Political Entities and Election Campaigns, (iv) The Law on Criminal Liability of Legal Entities, (v) The Law on Lobbying, (vi) The Law on Public Procurement, (vii) The Law on the Prevention of Money Laundering and Terrorism Financing, (viii) The Law on Seizure and Confiscation of Material Benefit Derived from Criminal Activity.

1.2. Which international anti-corruption conventions apply?

The key international anti-corruption conventions that apply to Montenegro are (i) the United Nations Convention against Corruption (UNCAC), (ii) the Council of Europe’s Criminal Law Convention on Corruption, and (iii) the Council of Europe’s Civil Law Convention on Corruption. Montenegro is also a member of the Council of Europe’s Group of States against Corruption (GRECO), which monitors member states’ compliance with the Council of Europe’s anti-corruption standards.

1.3. What is the definition of bribery?

CCM first defines the term “bribe” in its section on definitions. In this context, a bribe is a gift or other unlawful property or non-property benefit, regardless of its value.

Passive bribery occurs when a public official directly or indirectly solicits or receives a bribe or accepts a promise of a bribe for himself/herself or for another for agreeing to perform an official or another act which they must not perform, or for agreeing not to perform an official or another act which they must perform.

Active bribery is defined as directly or indirectly giving, offering, or promising a bribe to a public official, for himself/herself or for another person, for agreeing to perform an official or other act he/she must not perform or for agreeing not to perform an official or other act which he/she must perform, or whoever intercedes in bribing a public official in the manner described above.

1.4. Is private sector bribery covered by law? If yes, what is the relevant legislation?

Private sector bribery is also covered by the CCM in sections 276a (Passive Bribery in Commercial Activities) and 276b (Active Bribery in Commercial Activities).

Passive bribery exists when a responsible or another person who works for or in a business organization or other entity engaged in commercial activity, for himself/herself or for another person, directly or indirectly, solicits or receives a bribe or accepts the promise of a bribe in return for concluding a contract, or reaching a business agreement or providing a service or refraining from such acts to the detriment or in favor of the business organization for which or in which he works or of in favor of another person.

Active bribery is defined as the act of giving, offering, or promising a bribe to a responsible officer or any other person working for or within a business organization or other entity engaged in commercial activity, with the intent to conclude a contract, reach a business agreement, or provide a service either to the detriment or benefit of the business organization for which the person works, or for the benefit of another entity. It also includes acting as an intermediary in the act of giving such a bribe.

1.5. What is the definition of a public official and a foreign public official? Are employees at state-owned or state-controlled enterprises treated differently? Are there official lists of public officials, offices, or state-owned or state-controlled enterprises?

A public official, within the meaning of LPC, is an elected, appointed, or assigned person in a state body authority, a state administration body, a judicial authority, local self-government body, local government body, an independent body, a regulatory body, a public institution, a public enterprise, or another economic entity, or a legal entity that exercises public authority or activities of public interest, or is state-owned, as well as the person whose election, appointment or assignment to a post is subject to consent by an authority, regardless of the term of the office and remuneration. Notaries, public enforcement officers, and bankruptcy trustees are also considered public officials.

The definition of a foreign public official is provided in Article 142 (3) (5a) CCM and it is defined as a person performing in a foreign state legislative, executive, judicial, or another public office for a foreign state, a person who performs official duties in a foreign state in accordance with laws, other regulations, contract or arbitration agreement, a person performing official duty in an international public organization and a person performing judicial, prosecutorial or another office in an international tribunal.

CCM differentiates the prescribed sanctions primarily between the acceptance of bribes and the giving of bribes, with more severe sanctions prescribed for the acceptance of bribes. Additionally, there is a distinction in the prescribed penalties between the private and public sectors. Specifically, for employees in the public sector, the prescribed sentences are more severe.

State ownership is any participation in an economic entity in which the state, a municipality, or the city holds at least 33% of the capital.

The Agency for the Prevention of Corruption (the “Agency”) keeps a Register of public officials as well as a list of public functions at the local level, while the establishment of a list of functions at the state level is anticipated. The Ministry of Finance keeps a Register of State Bodies and Institutions, while the Register of Local Self-Government Units and Institutions is expected to be established.

1.6. Are there any regulations on political donations?

Under the LPC donation means the transfer without charge or unencumbered transfer of particular material or non-material goods, movable or immovable property to authorities. A public official may not conclude a sponsorship agreement or receive donations on behalf of the authority in which he/she performs a public function, which affects or could affect the legality, objectivity, and impartiality of the work of the authority. The Agency keeps the Register of Donations and controls the receipt of donations.

1.7.  Are there any defenses available?

The offender who has reported the active bribery before its detection, or before he/she became aware that it had been uncovered, may be exempted from punishment.

Also, an offender who gave a bribe in commercial activities, who gave a bribe at the request of a responsible person or another person working for or in a business organization or another entity engaged in commercial activity, and who has reported the offense before learning that it was discovered, may be released from punishment.

1.8. Is there an exemption for facilitation payments?

No. Facilitation payments are not allowed and may constitute a punishable offense.

1.9. What are the criminal sanctions for bribery? Are there any civil and administrative sanctions related to bribery cases?

CCM stipulates imprisonment as a primary punishment for bribery offenses. The duration of the sentence depends on the severity and circumstances of the crime. CCM prescribes a prison sentence ranging from 2 to 12 years for accepting a bribe in the public sector. A sentence in the range from 6 months to 8 years is prescribed for giving a bribe in the public sector. A prescribed prison sentence for giving bribes in the private sector is, on average, one-third less.

Companies may be held criminally liable under the Law on Criminal Liability of Legal Entities. The sanctions that are imposed are (i) punishments that can be fines and termination of the legal entity (ii) suspended sentences and (iii) security measures such as confiscation of objects and prohibition of certain activities. Criminal acts for which legal entities are liable are subject to the following fines: (i) for receiving bribe in business operations, the maximum fine ranges between fifteen to twenty times the amount of the obtained illegal property benefit or from fifty to one hundred thousand euros (ii) for bribery in business operations, the maximum fine ranges between ten to fifteen times the amount of the damage done or from twenty to fifty thousand euros.

The criminal offense of bribery and corruption may result in a property claim that can refer to compensation of damage, restitution of things, or cancellation of a particular legal transaction. Such a request can be made in civil proceedings or in criminal proceedings. In the case of corruption or bribery, the person who received the bribe and the person who provided it can be considered civilly liable for any damage caused by their misconduct to third parties. In the case of corruption or bribery, the person who received the bribe and the person who gave it can be considered civilly liable for any damage caused by their misconduct to third parties.

Entities that violate anti-corruption laws, such as failing to disclose conflicts of interest or mishandling whistleblower reports, can be subject to administrative fines ranging from one thousand euros to twenty thousand euros. Responsible individuals within these entities can be fined between five hundred euros and two thousand euros for similar violations.

1.10. Does the national bribery and corruption law apply beyond national boundaries?

Montenegro primarily applies its bribery and corruption laws within its own territory, but some provisions allow for extraterritorial jurisdiction in certain circumstances, particularly involving Montenegrin nationals. Criminal legislation of Montenegro shall also apply to a person who is not a national of Montenegro who, outside the territory of Montenegro, commits a criminal offense against Montenegro or against a national of Montenegro, which is related to receiving or giving a bribe, in the execution of which a Montenegrin citizen is involved in any way, if he/she finds himself/herself on the territory of Montenegro or is extradited to it.

1.11. What are the limitation periods for bribery offenses?

Criminal prosecution and enforcement of the sentence do not become statute-barred for crimes related to bribery and corruption.

1.12. Are there any planned amendments or developments to the national bribery and corruption law?

The Agency has filed an Initiative to the President of the Parliament of Montenegro, regarding the necessity of amending Draft Law on Prevention of Corruption No. 23-2/24-5, submitted by the Government of Montenegro to the Parliament of Montenegro on May 30, 2024.

2. Gifts and Hospitality

2.1. How are gifts and hospitality treated?

Under the LPC gift includes an item, right, or service acquired or performed without consideration and any other benefit provided to a public official or a person related to a public official in connection with the exercise of a public function. A public official, in connection with the performance of a public function, may not accept gifts, except protocol and appropriate gifts. A protocol gift is considered a gift from a representative of another country, or an international organization given during a visit, hospitality, or on other occasions, as well as other gifts given on similar occasions. A gift worth up to EUR 50 is considered an appropriate gift. The Agency for the Prevention of Corruption is responsible for overseeing the receipt of gifts.

2.2. Does the law provide any specific guidance on gifts and hospitality in the public and private sectors?

In addition to the LPC, there are specific regulations that further govern the matter of giving gifts in the public sector. These regulations include (i) Rulebook on the manner of handling gifts of public officials (ii) Rulebook on the manner of maintaining the register of sponsorships and donations and content of the report on received sponsorships and donations.

2.3. Are there limitations on the value of benefits (gifts and hospitality) and/or any other benefit) that may be given to a government/public official? If so, please describe those limitations and their bases.

A public official, in connection with the performance of public functions, must not accept gifts, except protocol and appropriate gifts. A protocol gift is considered a gift from a representative of another country, or an international organization given during a visit, hospitality, or on other occasions, as well as other gifts given on similar occasions. A gift worth up to EUR 50 is considered an appropriate gift.

If a public official receives multiple occasional gifts from the same donor in one year, the total value of these gifts must not exceed 50 euros. If the public official receives occasional gifts from multiple donors during that time, the total value of these gifts must not exceed EUR 100.

This prohibition, or limitation, also applies to the persons related to a public official who are the relatives of a public official in a straight line and to the second degree in a lateral line, a relative by marriage to the first degree, married and common-law spouse, adoptive parent or adopted child, member of a household, another natural or legal person with which the public official establishes or has established a business relationship if the receipt of gifts is in connection with the public official, or the exercise of public function

2.4. Are there any defenses or exceptions to the limitations (e.g., reasonable promotional expenses)?

No.

3. Anti-Corruption Compliance

3.1. Are companies required to have anti-corruption compliance procedures in place?

In Montenegro, companies are required to establish compliance procedures with anti-corruption measures in the situations prescribed by the LPC. For example, in order to carry out the procedure following a whistleblower report, an employer with at least 20 employees is obliged to designate an impartial person or organizational unit for receiving and handling the report, while an employer with less than twenty employees can designate an impartial person or organizational unit for receiving and application processing.

The employer is obliged to make the data on the designation of the person, and/or the organizational unit, easily available in the work environment and by publishing it on its website. The person, and/or the organizational unit, carries out the procedure to verify the veracity of the allegations in the application and proposes measures if it determines the existence of irregularities.

3.2. Is there any official guidance on anti-corruption compliance?

Yes, there are official guidelines on compliance with anti-corruption measures. These guidelines come from relevant regulatory bodies or ministries, such as the Agency or the Ministry of Justice. They provide detailed instructions and recommendations on how companies should establish and implement anti-corruption measures in accordance with Montenegrin legislation.

Based on estimates of the susceptibility of certain jobs and work processes to the emergence and development of corruption and other forms of biased conduct of public officials and employees of authority, the authority shall adopt an Integrity Plan containing measures to prevent and eliminate opportunities for the emergence and development of corruption and providing confidence of citizens in their work (Integrity Plan). The Integrity Plan shall be adopted in accordance with the rules for the preparation and implementation of the Integrity Plan adopted by the Agency. The Integrity Plan may be adopted by another legal person as well, and the Agency may, upon the proposal of this legal person, assess the integrity and propose recommendations for improving it.

The Agency may, on its initiative or at the request of an authority, company, legal person, entrepreneur, or natural person, give an opinion to improve the prevention of corruption, reduce the risk of corruption, and enhance ethics and integrity in authorities and other legal persons, which includes an analysis of the risk of corruption, measures to eliminate the risk of corruption and corruption prevention.

3.3. Does the law protect whistleblowers reporting bribery and corruption allegations? If an EU member, was the EU Directive on Whistleblowing implemented in your jurisdiction?

The LPC protects individuals who report allegations of bribery and corruption. Authorities in Montenegro, companies, other legal entities, and entrepreneurs, including the Agency, are obliged to act in accordance with laws regulating the confidentiality of information. A whistleblower exercises the right to protection if he/she has a justified reason to believe that the reported information about irregularities is true when submitting the report to the employer, to the Agency, or at the time of public disclosure of the information. In court proceedings related to a whistleblower’s report, including proceedings for copyright infringement, breach of data confidentiality, breach of data protection rules, disclosure of trade secrets, or claims for compensation from employment, the whistleblower is not liable for filing the report. It is forbidden by direct or indirect action, omission, or failure to act in the working environment to cause damage to the whistleblower by putting him/her in a disadvantageous position in connection with the submission of a report, and/or public disclosure of information. The whistleblower is entitled to compensation for damage caused due to the submission of the whistleblower’s report and the public disclosure of information, in accordance with the law governing contracts and torts.

3.3.1. What can be reported?

An individual who has reasonable grounds to suspect endangerment of public interest indicating the existence of corruption may file a report. Public interest, in terms of the LPC, is a material and immaterial interest in the well-being and prosperity of all citizens under equal conditions.

3.3.2. Who is protected?

The whistleblower exercises the right to protection if he/she had a justified reason to believe that the reported information about irregularities is true at the time of submitting the report to the employer or the Agency, or at the time of public disclosure of the information.

3.3.3. What are the conditions for protection?

The whistleblower exercises the right to protection if he/she had a justified reason to believe that the reported information about irregularities is true when submitting the report to the employer, to the Agency, or at the time of public disclosure of the information. In court proceedings related to a whistleblower’s report, including proceedings for copyright infringement, breach of data confidentiality, breach of data protection rules, disclosure of trade secrets, or claims for compensation from employment, the whistleblower is not liable for filing the report. It is forbidden by direct or indirect action, omission, or failure to act in the working environment to cause damage to the whistleblower by putting him/her in a disadvantageous position in connection with the submission of a report, i.e., public disclosure of information. The whistleblower is entitled to compensation for damage caused due to the submission of the whistleblower’s report and the public disclosure of information, in accordance with the law governing contractual relationships.

3.3.4. What companies does the relevant legislation apply to?

The relevant legislation in Montenegro that protects whistleblowers’ reports applies broadly to all types of companies and organizations. The legislation applies to the authority, business company, other legal entity, or entrepreneur where the whistleblower is employed or has been employed or should become employed soon.

4. Corporate Criminal Liability

4.1. Can corporate entities be held liable for bribery and corruption? If so, what is the nature and scope of such liability?

Corporate entities can be held criminally liable for bribery and corruption under the Law on Criminal Liability of Legal Entities. Corporate entities can be criminally liable for offenses committed by their responsible person if the offense was committed for the benefit of the corporate entities or on its behalf, or if it occurred due to a lack of adequate internal controls and procedures to prevent such conduct. The sanctions that are imposed are (i) punishments that can be fines and termination of the legal entity (ii) suspended sentences and (iii) security measures such as confiscation of objects and prohibition of certain activities. Corporate entities shall not be allowed to retain any material gain obtained by a criminal offense. Also, the corporate entity is responsible for misdemeanors, in accordance with the Law on Prevention of Corruption.

4.2. Can a company be liable for a bribery offense committed by an entity controlled or owned by it? Are there requirements for the parent to avoid liability in these situations?

The Law on the Liability of Legal Entities for Criminal Offenses provides for the liability of a company only in the situation where the criminal offense was committed by a shareholder, a natural person, so in this regard, there is no liability of the company for a criminal offense which was carried out by a legal entity owned or controlled by him.

4.3. Can a company be liable for corrupt actions of a third-party agent engaged to help it obtain or retain business or business advantage (such as government or regulatory actions or approvals)? If so, are there measures recognized in law, enforcement, or regulatory guidance to mitigate this liability?

Companies can be held liable for the corrupt actions of third-party agents engaged to help them obtain or retain business advantages, such as government approvals. Specifically, if an agent acting on behalf of a company commits bribery to secure a business deal or advantage, whether to the benefit or detriment of the company, the company itself can be held responsible. This responsibility arises if the agent’s actions were within their authorized scope, intended to benefit the company, or even if they were contrary to the company’s official policies or directives. A company will be responsible for a criminal offense committed in the manner described above, even when the responsible person who committed the criminal offense has not been convicted of that criminal offense.

4.4. What are the sanctions for the corporate criminal entity?

Sanctions are specified in items 1.9 and 4.1 above.  For criminal acts for which legal entities are liable, fines are as follows: (i) for receiving bribes in business operations, the maximum amount of the fine is in the range of fifteen to twenty times the amount of the obtained illegal property benefit or from fifty to one hundred thousand euros (ii) for bribery in business operations, the maximum amount of the fine ranges from ten to fifteen times the amount of the damage done or from twenty to fifty thousand euros. In addition to criminal responsibility, a company can also be held liable for misdemeanor, in which case fines range from one thousand to twenty thousand euros.

5. Criminal Proceedings for Bribery and Corruption Cases

5.1.  What authorities can prosecute corruption crimes?

Several authorities have the mandate to prosecute and address corruption crimes: (i) Special State Prosecutor’s Office (SSPO) which is primarily responsible for investigating and prosecuting high-profile corruption, (ii) Regular Public Prosecutor’s Offices which handles general criminal cases, including corruption offenses that do not fall under the jurisdiction of the SSPO, (iii) the Agency which does not have prosecutorial powers, but plays a crucial role in preventing corruption, conducting investigations, and forwarding cases to the relevant prosecutorial authorities when there is a reasonable suspicion that a criminal offense prosecutable ex officio has been committed

5.2. Is there a legal obligation to report bribery and corruption cases? If so, to whom does it apply and what are the sanctions for failing to meet such an obligation?

The obligation to report bribery and corruption cases exists for (i) a person who knows that someone has committed a criminal offense for which a long-term prison sentence can be imposed by law (ii) a person who knows that such an offense has been committed and does not report it before the offense is committed or the perpetrator discovered (iii) an official or responsible person who knowingly fails to report a criminal offense learned in the performance of his duty if that offense can be sentenced by law to five years in prison or a heavier penalty. The prescribed punishment is imprisonment for up to two years. The agency is obliged to forward cases to the relevant prosecutorial authorities when there is a reasonable suspicion that a criminal offense prosecutable ex officio has been committed.

5.3. Is there any civil or administrative enforcement against corruption crimes?

There are civil and administrative enforcement mechanisms against corruption crimes in Montenegro. These mechanisms are in addition to the criminal sanctions outlined in the criminal code.

Civil enforcement includes confiscation of any bribes or illegal gains received as a result of corrupt activities. The commission of the criminal offense of bribery and corruption may result in a property claim that can refer to compensation of damage, restitution of things, or cancellation of a certain legal transaction. Such a claim can be filed in civil proceedings or in criminal proceedings. In the case of corruption or bribery, the person who received the bribe and the person who provided it can be considered civilly liable for any damage caused by their misconduct to third parties.

The Agency for Prevention of Corruption plays a crucial role in the administrative enforcement of anti-corruption laws. It has an autonomous and independent role in preventing corruption, monitoring compliance, and ensuring the implementation of integrity plans and conflict of interest regulations.

Entities that violate anti-corruption laws, such as failing to disclose conflicts of interest or mishandling whistleblower reports, can face administrative fines ranging from EUR 1,000 to EUR 20,000. Responsible individuals within these entities can be fined between EUR 500 and EUR 2,000 for similar violations.

The Misdemeanor Court is responsible for ruling on applications to initiate misdemeanor proceedings related to corruption and for performing other duties as prescribed by law. This includes adjudicating administrative penalties and fines imposed for corruption-related offenses.

5.4. What powers do the authorities have generally to gather information when investigating corruption crimes?

Generally, the authorities can (i) search premises, vehicles, and individuals, and seize relevant evidence such as documents and electronic devices, (ii) conduct surveillance and wiretap communications, with judicial approval,  (iii) access financial records, track transactions, and examine bank accounts, (iv) summon and question witnesses, suspects, and other relevant individuals, (v)  work with national and international bodies, including financial intelligence units and INTERPOL, (vi) issue subpoenas for documents and testimony, and obtain court orders for specific investigative actions, (vii) employ informants and conduct undercover operations to gather information.

5.5. Is there any form of leniency law in your jurisdiction, allowing a party to a bribery or corruption crime to voluntarily confess to the crime in exchange for a release from liability or reduction of the penalty?

As before mentioned, there are provisions for leniency in cases of bribery and corruption. These provisions allow individuals involved in such crimes to voluntarily confess in exchange for a reduction of the penalty or even a release from liability. Here are the specific cases in the CCM: (i) Giving Bribes in Business Transactions (Article 276b): if the person who gave the bribe reports the act before it is discovered, they can be exempt from punishment, (ii) Bribery in Bankruptcy Proceedings (Article 276c): if the bribe giver reports the act before it is discovered, they can be exempt from punishment, (iii) Inducement to Unlawful Influence (Article 422a): if the person who gave the bribe reports the act before it is discovered, they can be exempt from punishment (iv) Giving Bribes (Article 424): if the person who gave the bribe reports the act before it is discovered, they can be exempt from punishment.

5.6. Can a person plea bargain in corruption cases? If so, how is such a process conducted?

While there are no specific plea bargain provisions exclusively for cases of corruption, Montenegro’s Criminal Procedure Code allows for plea bargaining in criminal cases, which can include corruption cases. This process is known as the “agreement on the admission of guilt”. A prosecutor can make a plea bargain to the suspect or defendant, or the suspect, defendant, and their defense attorney can make one to the prosecutor, after which the parties negotiate the conditions of the guilty plea for the crime(s) charged. The agreement must be in written form and signed by all parties, including the defense attorney. It can be filed no later than the first hearing before the first-instance court. If submitted before an indictment, it is forwarded to the president of the trial council. If after, it is submitted to the president of the council together with the indictment.

The agreement includes the defendant fully admitting to the crime(s) charged.  The agreement specifies the penalty and other criminal sanctions, the costs of the criminal procedure, and any restitution. The defendant waives the right to appeal the court’s decision if the agreement is fully accepted by the court.

The court decides whether to reject, deny, or accept the plea agreement. If the agreement is submitted before an indictment, the president of the council decides; if after, the court decides. The court reviews the agreement at a hearing with the prosecutor, defendant, defense attorney, and the victim or their legal representative. The court will approve the agreement if it meets all legal requirements: the defendant’s admission is voluntary, the agreement complies with the law, the defendant understands the consequences, the victim’s rights are not violated, and the agreement is fair and just. If any of these conditions are not met, the court rejects the agreement, and the defendant’s admission cannot be used as evidence.

Once the court’s decision to accept the plea agreement is final, the court issues a verdict within three days, declaring the defendant guilty in accordance with the agreement. Appeals are only allowed if the verdict does not align with the agreed terms.