Money laundering is ‘easy’ in Montenegro, says MEP


Montenegro's use of the euro despite it not being in the euro zone means that bank notes are accumulated from outside the country, making it ''very easy'' for organised criminals based there to launder money, UK Conservative MEP Charles Tannock told EURACTIV in an interview.

Tannock, a member of the European Conservatives and Reformists (ECR) group and rapporteur on Montenegro for the European Parliament's committee on foreign affairs, said that because Montenegro does not have its own registered bank notes, criminal groups can buy large amounts of cash to launder with money from elsewhere.

Montenegro does not have a currency of its own. In 1996, the Montenegrin government severed ties with the Serbian government and developed its own economic policy, adopting the German Deutschmark as its currency.

In 2002, when the euro was fully introduced and replaced the Deutschmark in Germany, Montenegro switched to the euro too. Unlike eurozone countries, Montenegro does not have its own euro-denominated notes in circulation.

According to Tannock, Montenegro is ''a very easy place for organised crime to go, buy large amounts of unregistered euro notes through the banking system and launder them for their notes coming from another jurisdiction, because the banks don't keep track of where the notes come from''.

''They seem to mysteriously come in from Germany somehow, but nobody quite knows how that works,'' he said.

Tannock fears that a large number of the €500 bank notes in circulation in Montenegro are being used by organised criminals for money laundering and other activities, adding that this is a ''common problem'' in the Western Balkans.

As for corruption and poor governance, the MEP said there had been some ''frankly-admitted dodgy behaviour,'' referring to a cigarette smuggling operation that ''the government said it had to do to finance their deficit budget at one stage''.

In May 2010, a court cleared Miroslav Ivaniševi? – a former official of Prime Minister Milo ?ukanovi? – of the smuggling charges, ruling that he had acted within Montenegrin law. ?ukanovi? was also indicted in the case, but benefited from immunity.

Accession negotiations to open in 2011?

Despite these issues, Tannock is confident that Montenegro will be able to open its EU membership negotiations next year and will recommend this to the Parliament and Council – provided that the European Commission is satisfied with the country's responses to its accession questionnaire.

''Provided they give the green light, in my report – which I aim to bring out immediately after – I will be arguing strongly that they should also be allowed to open negotiations, which in all likelihood should be able to start in 2011,'' he stated.

Tannock said that Montenegro has ''surprised a lot of people'' and done ''extremely well'' in its progress towards EU accession talks. Its economy has coped fairly well with the global credit crisis but will need to be diversified, he cautioned.

Though he believes that naming a date for Montenegro actually joining the EU is a ''risky venture'', the MEP hopes that the country will join within the next five years.

To read the interview in full, please click here.

Subscribe to our newsletters