Montenegro Country Summary

FATF Status

Montenegro is not on the FATF List of Countries that have been identified as having strategic AML deficiencies

Compliance with FATF Recommendations

The last Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Montenegro was undertaken in 2023. According to that Evaluation, Montenegro was deemed Compliant for 2 and Largely Compliant for 19 of the FATF 40 Recommendations. It was deemed Highly Effective for 0 and Substantially Effective for 2 with regard to the areas of Effectiveness of its AML/CFT Regime.

Montenegro is grappling with significant corruption issues that permeate both public and private sectors, leading to widespread concerns among citizens and foreign investors alike. Despite recent government initiatives aimed at combating corruption, including the establishment of a National Council for the Fight against Corruption and high-profile investigations, the effectiveness of these measures is undermined by political instability and a fragmented judicial system.

The country also faces challenges related to organized crime, with mafia-style groups exerting considerable influence over drug trafficking, money laundering, and other illicit activities. While there have been some improvements in law enforcement and economic stability, the overall resilience to crime remains low due to persistent corruption, inadequate legal frameworks, and insufficient support for civil society initiatives aimed at victim protection and anti-corruption advocacy.

Montenegro's economy is primarily driven by tourism, energy, and agriculture, with tourism alone contributing significantly to the GDP, estimated to be over one-third when including informal activities. The country is undergoing a transformation in its energy sector, focusing on renewable resources and infrastructure development, including major projects like a wind power plant and an underwater electricity cable to Italy, which enhances its energy export capabilities. Despite recent political changes and economic reforms aimed at improving the business environment, Montenegro faces challenges such as high public debt, reliance on a few economic sectors, and ongoing issues with corruption and the informal economy, which pose risks to its investment climate and overall economic stability.