Press release from 87th Cabinet session

Podgorica, Montenegro (26 July 2018) -- At its 87th session, the Montenegrin Cabinet reviewed and adopted the Information on the programme for acquiring Montenegrin citizenship by admission on the basis of a special investment programme and tasked the competent institutions to make all the necessary assumptions in order for the programme to become applicable by 1 October 2018.

The programme of economic citizenship will be available to up to 2,000 most relevant applicants from non-EU countries for a limited period of three years.

Interested individuals will have the following options: to invest EUR 250,000 in some of the development projects previously approved by the Government in an undeveloped area of Montenegro, or to invest EUR 450,000 in some of the development projects previously approved by the Government in the developed area of Montenegro.

Furthermore, the Government will charge a fee of up to EUR 100,000 per application. The fee will be directed to a special fund for the development of underdeveloped areas.

The programme will be managed by a special government agency that will hire pre-approved marketing agents. Marketing agents will be in charge of the successful promotion of this programme and attracting interested investors. The Government will also hire reputable Due Diligence agents specialised in checking interested applicants as well as some of the reputable audit firms/legal advisors to perform all other necessary checks of interested candidates.

This new program is part of the Government's ongoing effort to attract foreign direct investment.

Government expects this programme to result in the increase in economic activities and capital movement.

Government passed the Decision Amending the Decision on the criteria for determining scientific, economic, economic, cultural and sporting interests of Montenegro for the acquisition of the Montenegrin citizenship by admission.

The amended decision prescribes that the criteria, method and procedure for selecting applicants will be proposed by the state administration body in charge of economic affairs and the state administration body competent for sustainable development and tourism affairs within 120 days from the date the decision enters into force.

The Cabinet approved the Draft National Security Strategy - the most important strategic document that determines Montenegro's security policy and defines mechanisms and instruments for the realisation and protection of national security interests. Also, the Strategy is the starting point for the preparation of all other strategic documents and plans in the domain of the security policy. The document represents the revision of the 2008 Strategy and reflects the need to redefine the security responses of Montenegro in the light of constant and profound changes in the modern security environment, but also the fact that the country, by joining NATO, has achieved one of two key foreign policy goals and has become an integral part of the collective security system.

The Government unanimously supported the appointment of Veselin Veljović as Director of the Police Authority. The Prime Minister, the deputies and representatives of all coalition partners expressed full support to the candidate emphasising his expertise, experience, results, proven ability and loyalty to the State

Today's session adopted the Proposed Guidelines for Macroeconomic and Fiscal Policy of Montenegro for the period 2018 - 2021, as a document covering the medium-term macroeconomic and fiscal framework, based on which the consumption limits were set, binding for 2019, and indicative for the next medium-term period. The guidelines are designed to continue the economic growth based on growth in investment activity and domestic demand, as well as positive dynamics in net exports. Economic growth in 2018 will be 4.6% in nominal terms, and 3% in real terms. The average growth of the economy in the medium term by 2021 will be at the level of 4.05% in nominal terms, and 2.8% in real terms. Economic growth will also contribute to the growth of public revenues, which will amount to 2.16 billion euros in 2021. Public spending will have a downward trend, decreasing to 1.97 billion euros in 2012 or from 47.08% of GDP in 2018 to 39.7% of GDP in 2021, which will contribute to a reduction in the current but also capital consumption after completion of the priority section of the motorway. The guidelines envisage that current budget spending is financed from source revenues. Furthermore, the first numerical fiscal rule is enacted, which prescribes that the budget cash deficit will not exceed 3% of GDP. Finally, the deficit in public finances in 2018 will amount to 2.2% of GDP in 2018 and 1.8% of GDP in 2019, while in 2020 and 2021, public finances will be in surplus of 3.9% of GDP and 3.8% of GDP, respectively. According to the second fiscal criterion relating to public debt, a declining public debt trend will be established from 2019, primarily due to the completion of the motorway's priority section, reaching a level of 65.3% of GDP in 2020 and 60.5% of GDP in 2021. This is a much faster trend of declining public debt than predicted by the 2017 Government's Fiscal Strategy, but somewhat slower than the 2018 Economic Reform Programme.

The Government passed the Draft Law on Academic Integrity, which will be introduced for the first time not only in Montenegro, but beyond as well. The law will contribute to making the Montenegrin higher education system more transparent and recognisable as a system in which the fundamental values of higher education are consistently respected. In this way, Montenegro will be the first to regulate the field of academic integrity, forms of violation, as well as the procedure for determining violation of academic integrity according to a proposal that can be submitted by any natural or legal person. The law provides for, inter alia, the establishment of an ethics committee, as well as ethics committees in institutions, instead of the court of honour. The primary objective of the draft law is further improvement of quality in higher education in terms of transparency, production of quality staff and creation of the overall environment in which the respect of ethical principles will be one of the key missions of each institution.

The Montenegrin Cabinet adopted the Decision Amending the Decision on Determining the Annual Number of Permits for Temporary Stay and Work of Foreigners for 2018. Bearing in mind the needs of the labour market and the utilisation of the quota of licenses for individual purposes, in order to facilitate the smooth running of business entities, the Ministry of Labour and Social Welfare proposed an increase in the number of temporary residence permits and work of foreigners for 2018. Therefore instead of 18,185 permits, the quota for 2018 is 23,185. The Government announced very rigorous controls of all entities involved in the process of employment of foreigners.

The Government passed the Strategy for the Development of Micro, Small and Medium Enterprises in Montenegro for 2018 - 2022, which sets out development priorities, i.e., strategic goals and corresponding operational objectives in this field and represents, to a large extent, the continuity of the policy defined by the previous strategy. The focus will be placed on more efficient implementation of incentive programmes and measures of support to MSMEs, with the inclusion of new target groups. The vision of the Strategy is the developed market economy, which has a competitive MSME sector, which adopts the concept of sustainable development based on knowledge and innovation and which contributes to the strengthening of Montenegro as an entrepreneurial society. In order to achieve the vision, the five strategic goals have been defined within which the operational objectives and measures for improving the competitiveness of the MMSP in the medium term, namely the improvement of the business environment; improving the access to financial sources for MSMEs; development of entrepreneurial knowledge, skills and competencies - compliance with the needs of the labour market; strengthening SME competitiveness; promotion of entrepreneurship of young people, women and social entrepreneurship.

The main objective of the Regulation Amending the 2018 Customs Tariff Regulation, which was adopted at today's session, is the undisturbed development of trade in goods between Montenegro and its trading partners, as well as the fulfillment of requirements arising from ITA 2 of the Agreement regarding the liberalisation of trade in IT products.

The Government adopted the Information on the implementation of the contract on the execution of the Put Option between A2A and Montenegro. According to the contract, the basic repayment plan envisaged the transfer of 17,252,885 shares of EPCG from A2A to Montenegro until 1 May 2018, which was realised, thus making the State the owner of 70.1% of shares of the company. The second step involves the process of acquiring its own shares, which is being undertaken by the EPCG, which reduces the share of A2A from the current 28% to around 18% and should be realised by 31 July 2018. At the same time, it is envisaged that until 10 July, the EPCG's net profit for the previous period will be paid to the shareholders. Considering that the acquisition of its own shares and the distribution of profits depend on the decision of the EPCG-s Shareholders Assembly, which, due to objective circumstances, was scheduled for 20 August 2018, it turned out that it was not possible to comply with the deadlines from the second step. Therefore, the EPCG and A2A agreed to extend the originally agreed deadlines for these two activities. The Government authorised Dragica Sekuli’, Minister of Economy, to exchange the letter with the authorised representative of A2A in relation to the Contract, which extends the deadline for the implementation of the second step by 30 September 2018, and the deadline for distribution of EPCG's profits is set at 30 days from the day of the EPCG General Meeting of Shareholders.

The Government adopted the Information on the activities on the integration of the regional energy market in 2018. The Western Balkan countries, within the framework of the Berlin Process, have committed to implement a set of measures for regional and national reform by 2020, aimed at the development of the electricity market and which, among other things, deal with the allocation and capacity calculation, market mergers and balancing markets. Regional measures focus on strengthening regional institutions and cooperation, while national measures aim to eliminate national obstacles to the development of the regional electricity market. In order to integrate the regional energy market, it is necessary to implement a set of synchronised activities related to the closer definition of the national legal and regulatory framework through legal and sub-legal acts and the creation of sets of harmonised regional methodologies and rules, which requires coordinated cooperation between relevant institutions and energy entities both at national and regional levels.

Today’s session also approved the Information on the initiative for the construction of the Brajići wind farm. The Information reads that potential investors showed interest in the construction of the wind farm and land lease in the locality of Brajići - the municipalities of Budva and Bar. The wind power plant would be of total installed power of 75 MW, which is expected to amount to direct investments of over EUR 100 million. The Government tasked the Ministry of Economy to set up a commission composed of the representatives of the Ministry of Finance, Ministry of Sustainable Development and Tourism, and the Ministry of Economy, for the preparation of the tender documentation for long-term lease of state-owned land in order to build a wind farm on the territory of the municipalities of Budva and Bar.

The Government adopted the Decision Amending the Decision on the Privatisation Plan for 2018, meaning that the joint-stock company Castelo Montenegro AD – Pljevlja, in which the State owns 86.8123% of the share capital is included in the 2018 Privatisation Plan on the proposal of the Privatisation Council. German-based Kohler Verpackungstechnik expressed interest in purchasing the company.

The Cabinet adopted the Information on the implementation of obligations taken over by the Anex II of the Long-Term Lease Agreement concluded between the Government of Montenegro and the Consortium consisting of Northstar d.o.o. Podgorica and Equest Capital Limited Jersey, UK No. 01-8193 / 1 of 14 September 2009. The Government concluded that the Consortium fulfilled all contractual obligations before the deadline and adopted the Protocol on Cooperation to resolve infrastructure issues.

The Government considered and adopted the Programme of Incentives in the field of tourism for 2018/2019 and allocated 645,000.00 euros for its implementation. The goal of the Programme is to enrich and improve the quality of the tourist offer, while boosting marketing activities in order to attract tourists from new emitting markets and generate higher revenues in tourism, extend the tourist season, increase the occupancy rate, as well as consumption and employment.

PUBLIC RELATIONS SERVICE OF THE GOVERNMENT OF MONTENEGRO