TerraLex Guide to Anticorruption Legislation

Montenegro is not a signatory to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (OECD Convention).

Montenegrin anticorruption legislation consists of:

• the Criminal Code (“Official Gazette of the Republic of Montenegro”, nos. 70/2003, 13/2004 – corr. and 47/2006, and “Official Gazette of the Montenegro, nos. 40/2008, 25/2010, 32/2011, 64/2011 – other Act, 40/2013, 56/2013 – corr., 14/2015, 42/2015, 58/2015 – other Act, 44/2017, 49/2018 and 3/2020);
• the Anticorruption Act (“Official Gazette of Montenegro“, nos. 53/2014 and 42/2017 – decision of the Constitutional Court);
• the Act on the Liability of Legal Persons for Criminal Offenses (“Official Gazette of the Republic of Montenegro”, nos. 2/2007, 13/2007 – corr. and “Official Gazette of Montenegro”, nos. 30/2012 and 39/2016);
• the Prevention of Money Laundering and Terrorist Financing Act (“Official Gazette of Montenegro”, no. 110/2023);
• the Lobbying Act (“Official Gazette of Montenegro”, no. 54/2024);
• the Act on Financing Political Entities and Election Campaigns (“Official Gazette of Montenegro”, Nos. 3/2020 and 38/2020).

The Criminal Code sets out several criminal offenses against: a) payment transactions and business operations, b) official duty: - receiving a bribe in business transactions (Article 276a of the Criminal Code);

• giving a bribe in business transactions (Article 276b of the Criminal Code);
• the unlawful influence (Article 422 of the Criminal Code);
• soliciting unlawful influence (Article 422a of the Criminal Code);
• receiving a bribe (Article 423 of the Criminal Code);
• giving a bribe (Article 424 of the Criminal Code).

The Anti-Corruption Act prohibits various actions and prescribes fines for misdemeanors of: (i) a legal person, entrepreneur, and a responsible person in a legal person or state authority, state administration body, local government, and local self-government body; (ii) a public official; (iii) a person whose public function has been terminated. Some of the prohibitions are listed hereunder.

For a legal person, entrepreneur, and a responsible person in a legal person or state authority, state administration body, local government and local self-government body it is prohibited to enter into agreement with a company or other legal person in which the public official and the related person have a private interest.

For a public official it is prohibited to:

• subordinate the public to the private interest, as well as to initiate a conflict of interest in performing a public function;
• in the same month, generate income on the basis of membership in several permanent or occasional working bodies formed by the administrative authority;
• be a president or a member of the management and supervisory body, executive director, member of the management of a public company, public institution, or other legal person in more than one public company, public institution, or other legal person in which the state or municipality is the owner, to perform tasks in the state administration and local administration bodies and perform the function of deputies and councilors;
• realize income or other compensation on the basis of membership in the management, governing, or supervision body of a public company, public institution, or other legal person in which the state or municipality is the owner, or scientific, teaching, cultural, artistic, humanitarian, sports associations;
• to enter into a service providing agreement with a public company or with a public authority or a company that is in a contractual relationship, i.e. performs activities for the public authority in which the public official performs his/her function, if the value of these contracts exceeds EUR 1,000 per year, or to enter into a sponsorship agreement, or to receive donation on its own behalf, or on behalf of a government body in which he/she performs a public function that affect or could affect the legality, objectivity, and impartiality of the work of government bodies;
• to receive money, securities, or precious metal, regardless of their value, or receives a gift that is not protocol or convenient, or during one year to receive more gifts from the same donor, whose total value is more than EUR 50, or during equal time to receive gifts from several donors whose value is more than EUR 100.

No, the Montenegrin legislation does not cover bribes to foreign officials.

Yes, the Criminal Code addresses business-to-business corruption. Article 276a of the Criminal Code classifies the receipt of a bribe in business transactions as a criminal offense, while Article 276b classifies the act of giving a bribe in business transactions as a criminal offense.

Facilitation payments are not allowed by Montenegrin legislation. Moreover, the Anticorruption Act does not allow public officials to receive gifts except on some specific occasions.

The general rule is that a public official, in connection with the performance of a public function, may not receive money, securities, or precious metal, regardless of the value, except for protocol and convenient gifts.

A protocol gift is a gift given by a representative of another state or international organization during a visit, hosting, or on other similar occasions.

A gift worth up to EUR 50 is considered a convenient gift. If a public official receives more than one gift from the same donor in one year, the total value of those gifts may not exceed EUR 50, and if he/she receives gifts from more than one donor during that year, the value of those gifts may not exceed EUR 100.

The Act on the Liability of Legal Persons for Criminal Offenses does not prescribe a liability of a corporation for acts of overseas agents, intermediaries, joint venture partners, or any third parties.

A legal person can be prosecuted and liable only for a criminal offense committed by the responsible person acting on behalf of the legal person within its powers, intending to gain any benefit for the legal person, or when the responsible person's actions were contrary to the legal person's business policy or orders.

The Act on the Liability of Legal Persons for Criminal Offenses applies to: - a foreign legal entity liable for a criminal offense committed abroad to the detriment of Montenegro, Montenegrin citizen, or legal person registered in Montenegro;

• a domestic legal entity liable for a criminal offense committed abroad;

This Act shall not be applied if the offender: i) has fully served the sentence abroad ; ii) has been released abroad by a final judgment or the sentence has become obsolete or forgiven; iii) is prosecuted for a criminal offense under foreign law at the request of the injured party, and such a request has not been submitted, or iv) if an appropriate security measure has been taken abroad against the insane offender.

The Criminal code applies:

• to a citizen of Montenegro (and anyone who become a citizen) who commits any criminal offense abroad (except for criminal offenses against the state, domestic money falsification, and other explicitly listed criminal offenses) if he/she is found on the territory of Montenegro or is extradited to it;
• to a foreign citizen who commits a criminal offense against Montenegrin citizen outside the territory of Montenegro in which a citizen of Montenegro is involved in any way, and if found in Montenegro or is extradited to it. Anyone who commits a criminal offense abroad if committed against the Republic of Serbia or its citizen;
• to a foreign citizen who commits a criminal offense against a foreign state or a foreign citizen, which is punishable by four years' imprisonment or a more severe sentence under the law of the state in which it was committed, if found on the territory of Montenegro and not extradited to a foreign state.

Yes, directors can be found personally liable for some criminal offenses. For example, the Criminal Code prescribes that responsible person (broadly defined in the Criminal Code includes, among others, the directors of the companies) or other person working for or in a company or other business entity who, for himself/herself or another, directly or indirectly, requests or accepts a bribe or a promise of a bribe to enter into an agreement or provide a service or refrain from such acting to the detriment or for the benefit of the company for which or in which he/she works or another person, is criminally liable for receiving bribe in business transactions.

Additionally, a responsible person who, after reaching such a deal or after providing a service or refraining from such action, requests or accepts a bribe for himself/herself or another or accepts a promise of a bribe, is also liable for this criminal offense.

The sanction for s responsible person (director) who requests or accepts a bribe or a promise of a bribe to do something is imprisonment from 1 to 8 years. The responsible person (director) who requests or accepts a bribe or a promise of a bribe after performing subject actions, shall be sentenced to prison for up to 3 years.

Speaking of sanctions for the corporations for the said criminal offenses, the legal person shall be fined:

• in the amount of fifteen to twenty times of the caused damage or obtained illegal material gain, or from fifty thousand to one hundred thousand euros for a criminal offense punishable by imprisonment for up to eight years;
• in the amount of five to ten times, or from ten to twenty thousand euros for a criminal offense punishable by imprisonment for up to three years.

Yes, companies in Montenegro can be held liable for corruption offenses. A legal entity is responsible for a criminal offense committed by a responsible person who, acting on behalf of the legal entity within the scope of their authority, committed the offense with the intention of benefiting the legal entity. The liability of the legal entity exists even when the actions of the responsible person were contrary to the business policy or directives of the legal entity.

Thus, the liability of the legal entity is premised on the culpability of the responsible person. However, a legal entity is liable for a criminal offense even if the responsible person who committed the offense has not been convicted of that offense. Additionally, if a legal entity ceases to exist before the conclusion of the criminal proceedings, a fine, security measures, and the confiscation of assets may be imposed on the legal entity that is its legal successor.

No, there is no obligation on companies to implement preventive measures such as a compliance program or a whistleblowing line.

The implementation of a compliance program is not specifically regulated by the law as a mitigating circumstance in case of an established offense. Nevertheless, in each case, the court will determine the punishment within the limits prescribed by law for that offense, considering the purpose of punishment and taking into account all circumstances that may warrant a lesser penalty, i.e., mitigating circumstances.

Corporate settlement procedures for corruption offenses are not explicitly regulated. Generally, a plea agreement may be negotiated between the public prosecutor and the defendant. Such an agreement must be in writing, signed by all parties, and submitted no later than the first hearing of the main trial.