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.

Corruption remains a significant issue in Montenegro, affecting both public and private sectors, with a corruption perceptions index of 46, ranking 63 out of 180 countries. Although the government has made some progress in combating corruption, including the establishment of a National Council for the Fight against Corruption and high-level investigations, challenges persist, particularly in government procurement and municipal regulations. Foreign investors often cite corruption as a barrier to investment, and while anti-corruption laws exist, their enforcement is limited due to inadequate institutional coordination.

Montenegro's economy is primarily driven by tourism, energy, and agriculture, with tourism contributing approximately 25% to the GDP. The country is undergoing significant energy sector transformations aimed at increasing renewable energy reliance, while also focusing on infrastructure development, including new highways. Despite a decline in foreign direct investment in 2023, Montenegro has seen GDP growth of 6%, largely due to private consumption and a robust tourism season.

Montenegro has established a framework that encourages foreign direct investment (FDI), allowing foreign entities to own 100% of domestic companies and repatriate profits without restrictions. However, the country still faces challenges in creating a fully liberal business climate due to structural barriers and a significant grey economy, which complicates the investment landscape. Despite these issues, Montenegro has made strides in simplifying business registration and improving transparency, although the implementation of laws remains inconsistent.