Montenegro adopts new Law on Prevention of Corruption
On 1 January 2016 the new Law on Prevention of Corruption ("Law") entered into force in Montenegro, replacing the Law on Prevention of Conflicts of Interest and certain provisions of the Law on Public Officials and the Labour Law. The aim of this Law is to comprehensively regulate potential conflicts of interest and impose restrictions on the exercise of public duties, as well as to protect whistleblowers who were previously protected under different regulations. The law has also centralised all authority related to the fight against corruption under the newly established Agency for Prevention of Corruption ("Agency"), which supersedes the Directorate for Anti-Corruption Initiatives and the Commission for the Prevention of Conflicts of Interest. Importantly, the Agency is now responsible for the control of lobbying and financing of political entities and election campaigns.
The Law defines corruption as any abuse of official, business or social position or influence for personal benefit or the benefit for others and seeks to prevent or limit such behaviour through various measures. For example, state authorities are now required to adopt an "integrity plan" containing information on the exposure of state authorities to corruption, work positions that are highly exposed to corruption and measures and activities focused on reducing the risk of corruption. Plans will be publicly available and the Agency will monitor their implementation in practice.
Duties of public officials and restrictions in exercising public functions
Although the Law incorporates many provisions from the former Law on Prevention of Conflicts of Interest, it has also introduced several novelties such as tighter restrictions on public officials. Public officials cannot receive additional income or other remuneration in addition to the income for their basic work with a state authority when they are involved in the management of public companies, public institutions or scientific, humanitarian, sports and similar situations.
Apart from the well-known restrictions related to gifting, new rules have been introduced for sponsorships and donations to public authorities. It is now prohibited for public officials to conclude sponsorship agreements and for public officials to receive donations on behalf of a state authority, if such act has an effect or could have an effect on the legality, objectivity and impartiality of the state authority. Any agreement concluded contrary to the above mentioned restrictions will be considered null and void. The Law also imposes an obligation on state authorities to submit annual reports on sponsorships and donations received to the Agency, to maintain records on these issues and to make such records publicly available on their internet page.
Protection of Whistleblowers
Among the most significant changes introduced by the new Law are the protections provided to whistleblowers. A whistleblower is a person who has justified reasons to suspect that the public interest has been endangered indicating the existence of corruption (i.e. a violation of regulations, ethical rules or the possibility of such violation which causes, has caused or threatens to cause danger to life, health and safety of people and the environment, a violation of human rights or monetary and non-monetary damage to that state or a legal or natural person, and the act of hiding such violation). In addition to whistleblowers, the Law also provides protection to persons who assist whistleblowers and to persons who are likely to suffer damage as a result of their connection to a whistleblower.
When a whistleblower suspects corruption which endangers the public interest, the whistleblower can submit a complaint to:
- the public authority, company, other legal entity or entrepreneur where the public interest is allegedly endangered; and/or
- the Agency.
All companies must appoint a person for receiving complaints, examining the accuracy of allegations arising out of complaint and proposing relevant measures to the responsible person in case the complaint of the whistleblower is founded. A whistleblower who is not satisfied with the measures adopted or informed about their implementation is entitled to report this to the Agency. If corruption exists, the Agency will render a binding opinion and recommendation. In case of non-compliance with the opinion and recommendation, the Agency will inform the competent supervising authority, submit a special report to Parliament and inform the public of such non-compliance.
The Agency is obliged to protect the whistleblower who has justified reasons to suspect that corruption exists and who reports such suspicions in good faith. A whistleblower who suffers damage or will potentially suffer damage because of the submission of a complaint is entitled to seek protection from the Agency within 6 months as of the occurrence of damage or upon becoming aware of the potential damage. If the whistleblower initiates court proceedings for damage compensation, he or she can request that the Agency provide the necessary professional assistance in proving the damage. A whistleblower is also entitled to judicial protection against discrimination and harassment at work due to the reporting of corruption.
Interestingly, the Law allows for the possibility of awarding the whistleblower who has contributed to the protection of the public interest by reporting corruption. This solution is not characteristic for European countries, but it is common practice in United States of America that whistleblowers are generously rewarded. With respect to the Montenegrin Law, if a whistleblower has contributed to the generation of public funds, whereby such income would not have been generated but for the reporting, the whistleblower is entitled to a monetary award which cannot be lower than 3% or higher than 5% of generated income or assets. A whistleblower is entitled to such an award when the judgement on confiscation of assets becomes final.
The Law prescribes penalties in the range of between EUR 1,000 and EUR 20,000 for legal entities and between EUR 500 and EUR 20,000 for responsible person within a legal entity for violating the protections afforded to whistleblowers under the Law.
It is expected that the Law will meet expectations and will reduce corruption on the part of public officials in Montenegro, considering the fact that the country must demonstrate reduced levels of corruption and an adequate legal framework for combatting corruption as part of its EU accession efforts.