The Law on Amendments to the Law on Prevention of Money Laundering and Terrorist Financing ("Law") has been adopted, and a decree on its promulgation has been issued. The Law was published in the “Official Gazette of Montenegro” on 12th March 2025, and it enters into force on 20th March 2025.
Below, we have summarized some of the most important amendments introduced by the Law.
- Regulation of business operations related to crypto assets
Although the regulation of crypto assets should have been addressed through a separate law, the legislator has introduced a dedicated chapter on this matter through amendments to the existing Law on Prevention of Money Laundering and Terrorist Financing. The new provisions include an obligation for providers of services related to crypto assets in Montenegro to register before commencing operations. This means that any legal entity, business company, entrepreneur, or natural person with a registered office, residence, or approved permanent residence in Montenegro wishing to provide services related to crypto assets must be established in the Register before starting business operations. The same applies to service providers from EU member states not on the list of high-risk third countries, provided they hold the appropriate authorization or registration in their home country.
Article 145c of the Law stipulates that the supervisory authority must establish the Register within nine months from the date of entry into force of the amendments. A significant issue is the lack of transitional provisions regarding the provision of services related to crypto assets. Due to this omission, the legality of business operations related to crypto assets remains uncertain from the date the amendments enter into force until the establishment of the Register of Crypto Asset Service Providers (“Register”), which is expected to be created within nine months from the Law’s entry into force.
- New obligations for gambling operators
Article 18, paragraph 1, point 7 of the current Law on Prevention of Money Laundering and Terrorist Financing is amended so that gambling operators will be required to conduct customer due diligence and transaction monitoring when processing deposits of EUR 20,00 or more, whether as a single transaction or multiple linked transactions, instead of the previous minimum amount of EUR 2.000,00.
- Enhancement of the client identification system
The Law introduces the possibility for obligatories that have conducted video-electronic client identification to perform subsequent identity verification using reliable algorithms. This verification process is based on comparing the client’s video-recorded image with the photograph from their electronic identification document, obtained during the initial identification process. This verification is only possible if the electronic identification document has not expired at the time of verification. Additionally, obligatories may cross-check data through the Central Population Register, records of issued identification documents, and international databases of stolen, lost, and invalid documents. This measure enhances the efficiency and security of the identification process while ensuring a high level of data protection for clients.
- More precise definition of beneficial owners
The amendments to the Law provide a more precise definition of beneficial owners. A new criterion has been added to determine who qualifies as a beneficial owner – besides ownership interest and decisive influence, a beneficial owner is now also considered to be a person who controls a legal entity or business company "by other means." This amendment establishes clearer rules on what constitutes "other means of control," which may include a majority of voting rights, the right to appoint or dismiss most board members, veto rights, decision-making over profit distribution, or changes in assets. Additionally, control may stem from formal or informal agreements with owners, provisions in statutes, partnership agreements, and even family ties or arrangements with appointed representatives.
Furthermore, the Law explicitly defines who qualifies as a beneficial owner in foundations similar to trusts. These include the founder, members of the management and supervisory board, beneficiaries or categories of beneficiaries of the foundation, and people who directly or indirectly control it.
- Increase in financial penalties and amendments to misdemeanor provisions
Finally, the Law increases the minimum range of financial penalties for legal entities failing to comply with its provisions from EUR 3.000,00 to EUR 5.000,00. A new provision has been introduced in Article 137, stipulating stricter fines ranging from EUR 10.000,00 to EUR 40.000,00 if the violation is committed by credit institutions and branches of foreign credit institutions, entities engaged in receivables purchasing, financial leasing, safe deposit box rental, factoring, issuance of guarantees and other sureties, credit granting and brokerage, foreign exchange operations, payment institutions, and electronic money institutions.
Additionally, the amendments to the Law expand misdemeanor provisions to include cases where an obliged entity fails to submit data for maintaining the Register of Beneficial Owners within eight days of registration in the Central Register of Business Entities or within eight days of any change to the beneficial ownership information, in accordance with Article 43, paragraph 3 of the Law. In such cases, a fine ranging from EUR 500,00 to EUR 2.000,00 may be imposed.
The amendments to the Law introduce stricter regulations, increased transparency, and alignment with international standards. More precise definitions of beneficial owners, regulation of crypto assets, and enhancements to client identification are key steps toward more effective financial flow control. Increased fines and stricter misdemeanor provisions further strengthen legal security and accountability for obliged entities. However, the lack of transitional provisions regarding the provision of services related to crypto assets until the Register is established, as well as the fact that crypto asset regulation should have been addressed through a separate law, remain open issues.
By Lana Vukmirovic Misic, Senior Partner, and Mina Coguric, Associate, JPM & Partners
