Companies face high corruption risks when dealing with Montenegro's judiciary. The judicial system suffers from inefficiency among judges, high levels of bureaucracy, pervasive corruption, and interference by politicians or members of organized crime (HRR 2014). Businesses perceive the ability of the courts to settle disputes and challenge government regulations to be weak (GCR 2015-2016), yet only a small percentage of companies see the courts as an obstacle (ES 2013). Judicial proceedings can be slow and burdensome, especially in relation to the enforcement of commercial contracts, and some laws contain contradictory provisions*,* which make implementation difficult. The average time and cost required to enforce contracts are higher than the regional and OECD countries' average (DB 2015). The outcome of judicial proceedings can be unpredictable, as court orders are not always enforced by responsible authorities. Commercial disputes are increasingly resolved through out-of-court mediation centers (European Commission, Oct. 2014).

Citizens have low confidence in the judicial system and perceive the levels of corruption and nepotism to be high (BTI 2014). The supreme state prosecutor has been continuously criticised for perceptions of a conflict of interest (NiT 2015). The government adopted a new Strategy for Reform to focus on improving the effectiveness of the judiciary and increasing the levels of impartiality, independence, and accountability. The government recently increased the budget allocated to the judiciary and set up a council to guarantee the attainment of the goals set by the strategy (NiT 2015). Montenegro has signed the New York Convention of 1958 and is party to the International Center for the Settlement of Investment Disputes (ICSID).

Corruption is widespread among the Montenegrin police forces (HRR 2014). The reliability of police services to protect companies from crime is considered moderate (GCR 2015-2016), and almost a quarter of firms pay for security (ES 2013). Nepotism and patronage contribute to the inconsistent application of the law (HRR 2014). The police are perceived by citizens to be among the most corrupt institutions in the country (DACI, 2013).

In one corruption case, a communal police officer in Kotor, Snezana Perisic, pressed charges against the head of the communal police, Zoran Vucinovic, for abuse of office. Vucinovic had allegedly pressed Snezana Perisic to withdraw misdemeanor charges she had filed against several companies that were connected to the local authorities (HRR 2014).

Corruption poses a risk for businesses dealing with public administration in Montenegro. Companies report that Montenegrin administrative requirements (permits, licenses, reporting, etc.) are burdensome, and inefficient government bureaucracy and corruption are ranked among the top constraints for doing business in the country (GCR 2015-2016). Companies expect to occasionally make bribery payments or offer gifts when obtaining public utilities or 'to get things done' (ES 2013).

There is a high risk of corruption when dealing with the Montenegrin land administration. Municipal land management, in particular, suffers from widespread corruption, and more than half of companies expect to give gifts in order to obtain a construction permit (ES 2013). Foreign investors can participate in the privatization process and may own land, but the Spatial Planning and Construction Law is often irregularly applied. The processes of sale and purchase of government property are reportedly carried out in a non-transparent manner and riddled with bribery and cronyism (ICS 2015). At the municipal level, regulations are often applied inconsistently, creating confusion for investors, and numerous municipalities lack adequate urban plans, making construction permit procedures lengthy and complex (ICS 2015). Registering property is more time-consuming and costly than the regional average (DB 2015).

In connection with a corruption case, the mayor of Budva, Lazar Radjenovic, the foreign investments advisor to the prime minister, Aleksandar Ticic, and the former office director of Budva, Prva Banka (First Bank), were arrested for paying off the private company SP Luna's bank loan with municipality funds and aiding in buying over six acres of municipal land (HRR 2014). Their trial is pending.

Corruption poses a moderate risk to companies operating in the Montenegrin tax administration. Tax rates and tax regulations are not identified as a competitive disadvantage for the country, while one-fifth of surveyed companies expect to give gifts when meeting with tax officials (ES 2013). Bribes and gifts offered to tax officials are reportedly aimed at reducing wait time or receiving better treatment (UNODC, 2011). The tax administration suffers from weak enforcement of policies, and favourable tax procedures established at the national level are often ignored at the local level (ICS 2015). Montenegro has a tax police department to fight tax evasion, money laundering and other financial crimes (European Commission, Oct. 2014).

Corruption in Montenegro's customs administration is considered a serious problem for exporting, while corruption at neighbouring borders only constitutes a small obstacle for importing (GETR 2014). Businesses report that irregular payments when importing and exporting may occur (GETR 2014), yet less than one-fifth expect to give gifts to receive an import licence (ES 2013). Despite having simplified customs regulations (ICS 2015), procedures for importing and exporting remain burdensome (GCR 2015-2016). Trading across boarders is less time consuming and half as costly as the regional average (DB 2015). Several mid-level customs officials have faced corruption charges in recent years, and some have been convicted (HRR 2014).

Corruption is widespread in Montenegrin public procurement. Public contracts within the construction, trade, agriculture and IT sectors are often believed to be rigged to fit the demands of companies with political influence or connections (HRR 2014). Institutional capacity for monitoring public tenders has been strengthened by the Law on Public Procurement, which requires all public procurement contracts to be published (CPPiM 2012). Only limited progress has been achieved in terms of enforcing the law (European Commission, Oct. 2014). Weak anti-corruption mechanisms impede efforts to increase the levels of transparency within the sector, and every third respondent believes that control in public procurement should be strengthened in state-authorities, organisations and services (CPPiM 2012). Only one-fifth of citizens consider public procurement is implemented to serve public interests, and most believe it concedes to political influence (CPPiM 2012). The authorities' laxity in cracking down on corruption in the sector is reflected by the number of corruption investigations and/or prosecutions being very low (CPPiM 2012). A Montenegrin NGO reported that seven local governments violated the Public Procurement Law, and the same was reported by the state auditor, which noted that many state agencies violated procurement laws through direct agreements with interested parties (HRR 2014). Companies are recommended to implement special due diligence procedures to counter the likelihood of encountering corruption in the procurement process.

In the 'Telekom Affair' corruption case, allegations suggest that Ana Kolarevic, the sister of Montenegro's prime minister, received a bribe on her brother's behalf while overseeing the sale of the former state-owned Montenegrin Telekom in 2005. The US Securities and Exchange Commission detected corrupt activities in the privatisation process, including the bribing of at least two officials with a total of EUR 7.35 million by the purchasing company, Hungarian Magyar Telekom (Independent Balkan News Agency, Apr. 2015). Ana Kolarevic denies the allegations, claiming that she had received EUR 246,000 in return for legal services. The Prime Minister denies involvement in corruption and backs his sister's claims (Independent Balkan News Agency, Apr. 2015). The US Securities and Exchange Commission have decided to waive the charges against Montenegro, yet Ana Kolarevic is still on the witnesses list (Kurir, Oct. 2015).

The Montenegrin Criminal Code applies to individuals in public and private sectors and criminalises active and passive bribery, abuse of office, trading in influence, fraud and abuse of authority in business. The code stipulates that a bribe does not need to be of monetary value, but can also constitute gifts and other types of benefits, whether given directly or through intermediaries. Companies are held liable for criminal offences committed by their representatives under the Law on Criminal Liability of Legal Entities, which carries fines up to EUR 5 million or 100-fold the amount of the material damage caused or material gain obtained. Law enforcement authorities may order the seizure and confiscation of assets obtained through corrupt practices, but this measure has not yet been applied in practice. The enforcement of anti-corruption legislation is limited due to inadequate implementation, monitoring and institutional coordination (European Commission, Oct. 2014). The Prevention of Corruption law established an independent anti-corruption agency responsible for unifying and strengthening competences of all existing institutions combatting corruption in the country. The bill also addressed the protection of whistleblowers. Other important pieces of legislation include the Law on the Prevention of Money Laundering and Terrorism Financing, the Law on Free Access to Information, the Law on the Financing of Political Parties and the Law on the Prevention of Conflict of Interest. The latter stipulates that public officials may only receive gifts below EUR 50, and gifts exceeding this value must be reported to the Commission for the Prevention of Conflicts of Interest (CPCI). The Law on Prevention of Illegal Business aims at limiting tax evasion by increasing banks' transparency on money transactions and prohibiting the establishment of new businesses for owners of companies undergoing bankruptcy proceedings. The Law on Public Procurement makes it mandatory for contracting authorities both to adopt elaborated public procurement plans and to publish all calls, requests and decisions on public contracts on the Public Procurement Portal. The Law on Civil Servants and State Employees provides protection from unfair dismissal to public servants who report acts of corruption, and both public and private sector whistleblowers are entitled to witness protection under the Law on Witness Protection Programme. Montenegro has ratified the Council of Europe's Civil and Criminal Law on Corruption and the United Nations Convention Against Corruption. Access the Lexadin World Law Guide for a collection of legislation in Montenegro.

The Montenegrin constitution guarantees freedom of the press, and libel has been decriminalised under European standards. The media environment is diverse, access to the internet is unrestricted, and press freedom is generally respected in practice (FotP 2015). Recent years have witnessed several cases of pressure, intimidation and attacks on journalists with a lack of prosecution of the offenders, leading to an environment of increased self-censorship and a lack of objectivity (FotP 2015). Journalists investigating government corruption often face criminal allegations from officials (FotP 2015). Requests for government information regarding official corruption or illegal activity were refused or went unanswered (HRR 2014). Corruption cases and trial proceedings are usually highly publicised (BTI 2014). The Montenegrin media environment is considered 'partly free' (FotP 2015).

Civil society organisations (CSOs) generally operate without state interference. The European Union requires strong civil society involvement in Montenegro's accession process, but the transparency of the government's procedures for cooperation, consultation and funding is limited (European Commission, Oct. 2014). Requests for government information usually go unanswered, while government agencies often refuse to share information that may reveal corruption or other illegal activity (HRR 2014). Several Montenegrin CSOs are active in the fight against corruption. The Interior Ministry recently drafted a framework for decentralising funding to NGOs, and several NGOs, including organisations dealing with the rule of law and corruption, became eligible for state support. These achievements remain ink on paper, as the law is still not implemented in practice (NiT 2015).

• World Economic Forum: Global Competitiveness Report 2015-2016.
• Freedom House: Nations in Transit - Montenegro 2015.
• Freedom House: Freedom of the Press - Montenegro 2015.
• US Department of State: Investment Climate Statement 2015.
• Kurir: 'Republica: Similar pattern as with Shekerinska and Buckovski - Magyar Telekom was also paying the sister of Milo Djukanovich?', 7 October 2015.
• Independent Balkan News Agency: 'US Prosecution Office submitted to Montenegrin judicial authorities documents on the 'Telekom Affair', 27 April 2015.
• European Commission: Montenegro — Progress Report, October 2014.
• US Department of State: Country Report on Human Rights Practices — Montenegro 2014.
• US Department of State: Investment Climate Statement 2014.
• Freedom House: Freedom in the World — Montenegro Country Profile 2014.
• Bertelsmann Foundation: Bertelsmann Transformation Index — Montenegro Country Report 2014.
• World Economic Forum: The Global Enabling Trade Report 2014.
• Heritage Foundation: Index of Economic Freedom 2014.
• US Department of State: Country Report on Human Rights Practices for 2013 — Montenegro.
• DACI: Survey Results - Familiarity with the work DACI and Public Opinion on Corruption, December 2013.
• SETimes: 'Montenegro focuses on healthcare corruption', 8 November 2013.
• Balkan Insight: 'Montenegro Probes Alleged Ruling Party Corruption', 3 June 2013.
• Institute Alternative: Corruption and Public procurement in Montenegro, June 2012.

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