Press release from the 39th Cabinet session

At today's 39th session, chaired by Prime Minister Milojko Spajić, the Montenegrin Cabinet adopted the Draft Law on Amendments to the Law on Recovery and Resolution of Credit Institutions, along with the Report from the public discussion. The proposed Law enhances the preventive mechanisms of the Central Bank for maintaining financial stability by further defining the conditions for setting MREL, as well as the criteria for eligible liabilities that can be used as instruments to meet the minimum requirement for own funds and eligible liabilities. Additionally, the law improves the powers to reduce and convert own funds and liabilities before applying resolution measures or in combination with resolution measures. It also improves the contractual recognition of internal resolution instruments in obligations governed by the law of a third country and establishes additional powers for the adoption of bylaws by the Central Bank, to fully align with the European Union's regulatory framework for resolution. The current Law is aligned with the credit institution resolution system established by Directive 2014/59/EU, providing resolution authorities with tools for early and rapid intervention in troubled credit institutions to ensure the continuation of critical functions while minimizing the impact of the institution's failure on the economic and financial system and reducing the possibility of taxpayers ultimately bearing the costs of resolution. In the meantime, the European Parliament adopted Directive (EU) 2019/879 amending Directive 2014/59/EU regarding loss-absorbing and recapitalization capacity of credit institutions and investment firms, as well as Directive 98/26/EC (BRRD II), which necessitated further harmonization through the prepared amendments to the Law that will additionally improve Montenegro's regulatory framework in this area.

The Cabinet also adopted the Draft Law on Amendments to the Law on Bankruptcy and Liquidation of Banks, along with the Report from the public discussion. The proposed legal solutions will enable the adequate application of the Law on Amendments to the Law on Recovery and Resolution of Credit Institutions, which will provide credit institutions with a transitional period to meet the minimum requirement for own funds and eligible liabilities (MREL), which will be prescribed by new bylaws (in accordance with EU regulations and practice) over a period of three years, with annual transitional periods to achieve the same. To ensure the earliest possible alignment of the operations of credit institutions with relevant European regulations in the field of credit institution resolution, it is necessary for the Central Bank to determine the first annual transitional period for achieving MREL requirements during 2024. Additionally, the proposed Law improves the regulatory framework in the area of bankruptcy and liquidation of credit institutions to further align it with the European Union's regulatory framework, as well as achieving greater protection of budgetary and other public funds. By more precisely defining the order of priority of claims in bankruptcy proceedings, the efficient use of resolution instruments for credit institutions is enabled, thus minimizing the use of extraordinary public financial assistance in the resolution of credit institutions.

The Cabinet adopted a Decision to establish public interest for the implementation of the Main Project for Emergency Interventions in relocating the Ćehotina River through the inner disposal area of PK Potrlica, a part of the Pljevlja Coal Mine. Recognizing that relocating the Ćehotina riverbed is a prerequisite for further coal exploitation at PK Potrlica, the decision establishes public interest in realizing this project to ensure the stability of the energy system and the security of electricity supply. The waterproof channel intended for the relocation of the Ćehotina River is planned to run through the inner disposal space of PK Potrlica, from the Durutovići dam to the bridge at the existing outlet portal of the Velika Pliješ tunnel, spanning approximately 3.2 km.

An amendment to the Decision on the Designation of Ports by Purpose was adopted. At the request of Adriatic Marinas, the Port of Tivat (Pier II) has been granted the status of a commercial port for passenger traffic.

The Cabinet adopted the 2024 Tourism Incentive Programme. The objective of the Programme is to enrich and enhance the quality of the tourism offer, improve marketing activities to attract tourists from new source markets, generate higher tourism revenue, extend the tourist season, increase accommodation occupancy rates, consumption, and employment. The Programme includes five support measures:

1. Support for organizing events/festivals;
2. Enhancement of services and quality in rural tourism;
3. Development of sustainable tourism products and services that enrich the cultural, sports and recreational, and adventure tourism offer;
4. Support for the development of MICE tourism;
5. Support for improving organized air arrivals through joint marketing campaigns with tour operators.

Funds for the incentive measures are allocated through public calls conducted by the Ministry of Tourism, Ecology, Sustainable Development, and Northern Development, along with the National Tourism Organization of Montenegro. The financial resources for the Programme are projected at €1,060,293.42. A notable addition to this Programme, compared to previous ones, is the support for improving organized air arrivals through joint marketing campaigns with tour operators that operate regular flights with their own fleets to Montenegro from source markets such as the United Kingdom, Germany, Switzerland, France, Poland, Denmark, Sweden, Norway, Finland, and Italy. Implementing these measures will improve the accessibility and visibility of the destination.

The Cabinet adopted the Action Plan for the implementation of the National Consumer Protection Programme 2022-2024 for the year 2024 and approved the Report on the implementation of the Action Plan for 2023. The mission of the National Consumer Protection Programme for the period 2022-2024 is aimed at achieving greater complementarity of consumer protection in all sectoral policies and attaining a high standard of consumer protection. This includes protecting the economic interests of consumers and providing information and education on the importance of consumer protection policies to all stakeholders in this field. Accordingly, the main strategic goal of the Programme is to improve the consumer protection system in Montenegro in line with new challenges in the global market, ensuring comprehensive consumer protection in accordance with the best practices of the European Union. The Action Plan for 2024 encompasses three operational goals with corresponding performance indicators and includes 35 activities. Regarding the 2023 Report, out of the 29 planned activities, 17 were implemented, four were partially implemented, and eight were not implemented.

The Cabinet adopted the Information on the need to grant approval for the demolition of a building. As stated in the Information, one of the largest and most significant projects currently funded by the European Union and implemented by the Ministry of the Interior with support from the International Organization for Migration (IOM) is the "Individual Measure to Strengthen Border Management Capacities in the Western Balkans." This project allocates €15 million to Montenegro. One of the key objectives of this project is to improve working conditions for the Border Police Sector by constructing a new administrative building for this sector's needs, including premises for the future National Coordination Center. According to the contract between IOM and the EU Delegation, there is an obligation to build the central administrative building in Zagorič for the Border Police's needs. The Ministry of the Interior prepared the project documentation, based on which IOM announced a tender, selected the contractor, and signed a contract that includes the removal of the old building located on the future administrative building site. Accordingly, the Government has given approval for the removal of the old building.

The Cabinet adopted the Information on damage in the Port of Bar caused by a natural disaster. The Information states that on 2 July 2024 a natural disaster caused by hurricane winds resulted in significant damage to the port superstructure owned by the Port of Bar. According to preliminary information, the Port of Bar estimates the cost of procuring the mentioned resources at around €35 million. It is evident that the Port of Bar cannot overcome the situation with its resources alone, thus necessitating assistance from the Government of Montenegro through appropriate forms of urgent procurement funding and simplified administrative procedures to address the situation as quickly as possible. Therefore, the Government has tasked the Ministry of Transport and Maritime Affairs, in collaboration with the Ministry of Finance and the Port of Bar, to urgently explore all possible modalities to secure financial support for the immediate restoration of the destroyed port superstructure.