By Responses from institutions and findings from a study by the Centre for Monitoring and Research (CeMI) show that the problem lies not only in the legal framework, but also in whether the system has enough experts, records, databases and operational capacity to enforce the law.
Author: Maja Boričić (CIN-CG)
Montenegro has been temporarily freezing increasing amounts of money and assets in recent years, but this growth has not been matched by results in permanent confiscation.
Despite broader legal powers, institutions face serious limitations. The prosecution service lacks financial and economic experts, the police do not have direct electronic access to all key registers, courts do not maintain separate records, and some information on cases handled by the Special State Prosecutor’s Office (SDT) and the Special Police Department (SPO) remains difficult to obtain.
The recently adopted Law on the Confiscation of Proceeds of Crime is intended to enable faster confiscation of assets linked to organised crime, in certain cases even before a criminal conviction becomes final. In cases involving a criminal association or criminal organisation, proceeds of crime worth at least €50,000 may be permanently confiscated once an indictment has been confirmed, or once the main hearing has been scheduled in summary proceedings. This is subject to the court establishing a clear disproportion between the value of the assets and the owner’s lawful income, with the owner failing to demonstrate a plausible lawful origin for the assets.
The aim is to address the problem of lengthy proceedings involving organised crime and high-level corruption, during which suspicious assets remain temporarily frozen, are transferred to other individuals or lose value. However, the new provisions will not apply to all proceedings already under way.
According to data from the Supreme State Prosecutor’s Office (VDT), 27 preliminary financial inquiries and 39 financial investigations were launched in the first half of 2026. The Higher State Prosecutor’s Office in Podgorica initiated 18 investigations and nine preliminary inquiries, while the SDT launched 16 investigations and 10 preliminary inquiries. The Basic State Prosecutor’s Office in Bijelo Polje initiated three investigations and six preliminary inquiries, its counterpart in Podgorica launched two investigations, while the prosecutor’s offices in Kotor and Nikšić each conducted one preliminary inquiry. According to the data provided, the remaining prosecutor’s offices initiated neither investigations nor preliminary inquiries.
The VDT stated that, since the implementation of the Instructions on Conducting Preliminary Financial Inquiries and Investigations, adopted in March 2025 by the prosecution service headed by Milorad Marković, no applications for permanent confiscation have been filed in these cases because no final criminal judgments have yet been delivered. The new law, they said, could allow asset confiscation to be considered at an earlier stage. They stressed that confirmation of an indictment does not automatically result in confiscation: the court makes the decision, and the owner has an opportunity to demonstrate the lawful origin of the assets.
In such cases, confiscation proceedings are conducted independently of the criminal proceedings. The conclusion of the criminal case, including an acquittal, a judgment dismissing the charges or a decision to discontinue proceedings, does not affect the confiscation proceedings or the decision on permanent confiscation.
MINISTRY MAINTAINS THAT THE PRESUMPTION OF INNOCENCE IS NOT VIOLATED
The Ministry of Justice maintains that this approach does not violate the presumption of innocence, the right to a fair trial or the right to property.
“In this particular case, it is a separate procedure in which the issue is not the asset holder’s guilt, but the lawfulness of the origin of the specific proceeds,” the Ministry stated.
According to the Ministry, asset holders and third parties may present evidence before the court to demonstrate that the assets are plausibly of lawful origin.
Experts believe the success of this model will depend on the quality of financial investigations. Without the swift identification of assets, beneficial owners, associated persons, lawful income and financial flows, stricter legislation will not guarantee an increase in permanent confiscations.
Between the adoption of the Instructions and 30 June 2026, a total of 62 preliminary financial inquiries and 108 financial investigations were launched. The VDT says a practice has been established of initiating financial investigations alongside criminal investigations to ensure that assets are identified and secured in a timely manner. So far, only provisional measures have been imposed in these cases.
According to the VDT, nine applications for provisional measures to secure assets were submitted in seven cases between the beginning of the year and mid-July. Two were granted, none were rejected, and the courts have yet to rule on the remaining applications. The measures cover real estate, land and residential properties, vehicles, wristwatches and cash.
MORE THAN HALF OF PROSECUTOR’S OFFICES DO NOT CONDUCT FINANCIAL INVESTIGATIONS
A CeMI study examining the results of financial investigations from 2023 to 2025 shows that this mechanism is being used increasingly often, but its application remains uneven.
According to the study, the SDT launched 51 financial investigations against 345 individuals and seven legal entities between 2023 and the end of 2025, while also handling 91 cases carried over from previous years. The number of new investigations rose from 12 in 2023 and 13 in 2024 to 26 in 2025, twice as many as in the previous year.
CeMI reports that basic prosecutor’s offices did not initiate a single financial investigation in 2023. Two cases were recorded in 2024, followed by a total of 32 in 2025.
CeMI considers this a significant step forward for the institutions, although serious inconsistencies in implementation remain.
“More than half of prosecutor’s offices have not used the financial investigation mechanism,” the CeMI study states.
Over the same three-year period, the Higher State Prosecutor’s Offices in Podgorica and Bijelo Polje launched a total of 34 financial investigations: 31 in Podgorica and three in Bijelo Polje, all during 2025.
The most visible result has been the temporary freezing of funds. According to CeMI, the value of funds frozen in SDT cases increased from €6.18 million in 2023 to more than €69 million in 2025.
“In just two years, the value of temporarily frozen funds increased more than elevenfold,” the CeMI study emphasises.
However, this increase has not been accompanied by a corresponding rise in permanent confiscations. According to CeMI, the SDT submitted five confiscation applications between 2023 and the end of 2025. One application filed in 2025 concerned two passenger vehicles and real estate. In response to an application filed in 2024, the Higher Court in Podgorica ordered the permanent confiscation of a Mercedes-Benz S600 passenger vehicle.
In early October, the SDT submitted new applications for permanent confiscation, on which the Higher Court in Podgorica has yet to rule. In the case of Radoje Zvicer, prosecutors are seeking the confiscation of at least 54,567 square metres of real estate in Podgorica, Kotor, Herceg Novi and Tivat, as well as expensive armoured vehicles. In the case of Milan Vujotić, they are seeking the confiscation of at least 19,131 square metres of real estate in Podgorica and Nikšić and one armoured vehicle. For Slobodan Kašćelan, Igor Božović and Dragan Knežević, prosecutors are seeking the confiscation of at least 10,399 square metres of real estate. These applications were filed following final convictions and therefore do not illustrate the new possibility of confiscating assets before a criminal conviction becomes final.
SHORTAGE OF QUALIFIED STAFF
According to the VDT, 11 of the 16 designated financial analyst positions at the SDT have been filled.
The VDT also identifies the insufficient number of advisers with expertise in economics and finance as a key challenge.
“The number of experts employed in these positions remains insufficient due to a lack of interest in this type of work,” the VDT stated.
Employing more such experts would enable prosecutors to analyse complex financial flows more effectively, conduct investigations more quickly and prepare stronger evidence, the VDT added.
CeMI recommends recruiting advisers specialising in economics and finance, financial analysts, accountants and forensic financial experts, particularly outside the SDT.
“The complexity of financial investigations requires a multidisciplinary approach that goes beyond expertise in criminal law alone,” CeMI states.
The Police Directorate told CIN-CG that it acted on orders to conduct 53 financial investigations during 2025 and 54 in the first half of 2026, almost as many as in the entire previous year.
These figures refer to orders issued by basic and higher prosecutor’s offices. The police stated that they received no orders from the SDT to conduct financial investigations in 2025. For information on investigations carried out by the SPO on the SDT’s orders, the police referred CIN-CG to the SDT.
The SDT did not respond directly to CIN-CG’s questions, instead referring the organisation to the semi-annual and annual reports published on its website. CIN-CG could not find a semi-annual report for 2026 in the website’s activity reports section.
LIMITED ACCESS TO DATABASES
A significant number of registers relevant to financial investigations fall under the jurisdiction of other authorities, according to the Police Directorate.
“Officers of the Police Directorate currently do not have direct electronic access to all registers relevant to the effective conduct of financial investigations,” the police stated.
The police identified records held by the Real Estate Administration, the Tax Administration, financial and payment institutions, notarial records and vessel registers as key databases that need to be interconnected.
Without such integration, financial investigations depend on slower exchanges of information between institutions, even though criminal assets are often quickly transferred, concealed or formally registered in other people’s names.
According to the police, improvements require stronger staffing capacity, technological modernisation, modern equipment, digitalisation and the integration of databases with other state authorities and relevant institutions.
The VDT emphasises the importance of high-quality investigations at an early stage, supported by timely access to information on assets, income, associated persons and transfers of property to third parties. Additional training for prosecutors and professional associates, as well as stronger cooperation with the police, tax authorities and other competent institutions, is also needed.
According to the police, the most common challenges involve sophisticated methods of concealing the origin of assets, including transfers to family members, associated persons and fictitious companies, international financial flows and technologies such as cryptocurrencies.
“Methods of concealing assets are considerably more complex” in cases falling under the jurisdiction of the SPO and SDT, the Police Directorate stated.
The new law also allows assets to be confiscated from legal predecessors, legal successors, family members and third parties if they knew, could have known or should have known that the purpose of the transfer or acquisition was to avoid confiscation.
Government amendments clarified how the role of third parties should be assessed. Courts must consider all specific facts and circumstances, particularly whether assets were transferred without compensation or for an amount clearly below their actual value, and whether the offender retained effective control over them.
DIGITAL ASSETS ALSO COVERED
The law covers property rights of all kinds, including digital assets and crypto-assets. The question remains whether institutions have the technical expertise and capacity to identify, freeze, value and preserve such assets.
Assets may also be confiscated through separate proceedings if the person against whom criminal proceedings have been initiated dies, or if the proceedings cannot continue because of illness, flight from justice, immunity, amnesty, a pardon or, under certain conditions, the expiry of the statutory limitation period for criminal prosecution.
The condition is that the evidence must indicate that the proceedings would have resulted in a conviction had one of the circumstances permanently preventing criminal prosecution not arisen.
This is particularly important in cases involving lengthy proceedings, defendants who have fled justice and procedural obstacles.
NEW PROVISIONS WILL NOT APPLY TO ALL ONGOING PROCEEDINGS
The transitional provisions determine how the law applies depending on the stage reached in each case.
Permanent confiscation proceedings already initiated will continue under the previous law. If a first-instance decision has been issued, any appeal proceedings will also be conducted under the old law.
If a first-instance decision has been overturned and the case remitted for reconsideration, the new law will apply.
Financial investigations initiated under the previous law before the new law entered into force will be completed, but any subsequent permanent confiscation proceedings will be conducted under the new law.
The possibility of permanent confiscation at an earlier stage will therefore not automatically extend to all major cases that have been ongoing for years.
The VDT did not answer CIN-CG’s question about which major ongoing cases could fall under the new legal framework, given their current procedural stage.
WHO PAYS IF CONFISCATED ASSETS LOSE VALUE?
By the time of publication, the State Property Administration had not responded to CIN-CG’s questions concerning the use of temporarily confiscated vehicles and real estate, storage and maintenance costs, depreciation, restitution, compensation for damage and asset management capacity.
The law requires confiscated assets to be managed “with the care of a prudent owner”, with the aim of preserving their value as much as possible while keeping costs to a minimum. Temporarily confiscated assets may be leased or entrusted to a manager, with rental income used to cover management and maintenance costs. Movable property may be sold before a final decision if these costs significantly exceed its value or if there is a risk of deterioration. Real estate may also be sold under similar conditions, subject to court approval.
If a court issues a final decision rejecting an application for permanent confiscation, the owner is entitled to the return of the temporarily confiscated assets and compensation for damage. Assets must also be returned following an acquittal or a judgment dismissing the charges when confiscation is linked to the outcome of criminal proceedings. In independent confiscation proceedings, however, such a judgment does not automatically require the return of the assets if an application for permanent confiscation has been filed or can still be filed.
If the assets have been sold, the owner is entitled to receive the sale price plus the average interest rate on demand deposits. If the assets have been donated or destroyed while under management, the owner is entitled to compensation for damage, for which Montenegro is liable in cases prescribed by law.
The law does not grant the police general authority to use temporarily confiscated vehicles. Such movable property may be made available to a state authority free of charge for the purpose of protecting the security of persons under official protection.
Companies may be placed under temporary administration. The Government, acting on a proposal from the competent authority, appoints a temporary administrator and, in the case of a joint-stock company, a temporary board of directors. They assume the powers of the company’s management bodies and report on its operations to the competent authority and the court every three months. However, these provisions do not specifically address who bears the consequences of operating losses or a decline in the company’s value during temporary administration.
A temporarily confiscated house or apartment may be leased, with the rental income used for management and maintenance. The law does not specifically regulate properties subject to a mortgage, nor does it require the competent authority to assume responsibility for repaying a private housing loan.
COURTS DO NOT MAINTAIN SEPARATE RECORDS
The lack of separate court records on asset confiscation also makes it difficult to monitor results.
The Court of Appeal told CIN-CG that it could not provide the requested information because such statistics are not recorded separately.
To provide an answer, the court said it would have to “manually review more than 2,300 cases”, for which it has “neither the administrative nor the technical capacity”.
The Higher Court in Podgorica also does not maintain a separate register of confiscations of assets acquired through criminal activity and was therefore unable to provide the requested data.
CeMI highlights precisely this problem in its recommendations. The study identifies “limited availability and inconsistency of data” as one of the challenges.
It recommends establishing a uniform methodology for recording and reporting on financial investigations, provisional measures, applications for permanent confiscation and assets permanently confiscated under final court decisions across all prosecutor’s offices and courts.
According to CeMI, such a system would allow for “more accurate measurement of results” and more transparent reporting to the public and international organisations.
Without early financial investigations, rapid access to registers, experts capable of tracing complex financial flows, accurate court records and asset management that prevents loss of value, Montenegro may end up with a stricter law, but not necessarily a more effective system for confiscating criminal profits.
EUROPE IS INCREASINGLY MOVING AWAY FROM WAITING FOR FINAL CONVICTIONS
Italy is a well-known example of a country that allows asset confiscation without a prior final criminal conviction, particularly in the fight against the mafia and organised crime. Preventive confiscation proceedings may be conducted independently of criminal proceedings, subject to judicial oversight and an assessment of the origin and value of the assets and their relationship to lawful income.
The 2024 EU Directive on Asset Recovery and Confiscation provides for broader confiscation powers, including assets transferred to third parties and certain forms of confiscation without a prior criminal conviction. It also introduces the confiscation of unexplained wealth linked to a criminal organisation, allowing authorities to assess significant discrepancies between the value of assets and lawful income.
Italy’s national agency ANBSC manages seized and confiscated assets, including companies, while some permanently confiscated assets are used for public and social purposes.
Different models of confiscation without a prior final criminal conviction also exist in Ireland, the United Kingdom and the Netherlands. The European Court of Human Rights has confirmed that confiscation without a criminal conviction is not, in itself, incompatible with the European Convention on Human Rights, provided appropriate procedural safeguards are in place.
Albania has a separate system of preventive asset confiscation linked to organised crime, and its legislation also provides for the confiscation of certain assets without a criminal conviction.
European rules also require sufficient capacity to preserve the value of frozen assets. The EU also provides for the possibility of using permanently confiscated assets for public or social purposes. The focus is therefore shifting away from waiting for lengthy criminal proceedings to conclude and towards examining the origin and preserving the value of assets, while ensuring judicial oversight and procedural safeguards for owners and bona fide third parties.
This article was produced as part of the project “Open Trials Project – Monitoring High-Level Corruption and Organised Crime Cases”, jointly implemented by the Centre for Monitoring and Research (CeMI) and the Trade Union of Media of Montenegro, with the support of the Embassy of the Kingdom of the Netherlands. The views expressed in this article are the sole responsibility of the author and do not necessarily reflect those of the donor
