The 64th Cabinet session – 31 March 2022

The Montenegrin Cabinet, at its 64th session held on 31 March 2022, chaired by Prime Minister Zdravko Krivokapić, was briefed about the Report on the results of external audit in majority state owned companies for the period from 2016 to 2020. The aim of this Report is to draw attention to the importance of external audit in the management and reporting process, as well as the auditor's reservations regarding errors in accounting and reporting in the previous period, with a view to eliminating them as soon as possible in the interest of the state as the largest shareholder, but also of all citizens who finance the work of a certain number of these companies from their own funds by paying taxes and other duties. In 2020, out of a total of 32 companies subject to audit, in as many as 17 companies the auditor expressed a reservation regarding the (in) compliance of financial statements with international standards, while in the case of one company he refrained from expressing an opinion. Only 14 companies received a positive opinion of the external audit on the adopted financial statements. Also, the analysis of the data showed that the problems pointed out by the auditors have not been significantly resolved for years. In this regard, the Cabinet instructed the Ministry of Finance and Social Welfare to begin activities to amend the Law on Audit in order to establish the obligation to conduct an external audit of financial statements for all majority state owned companies.

The Cabinet approved the Work Plan and Financial Plan of LLC "Montenegro Works" for 2022.

The Cabinet adopted the Report on the Public Debt of Montenegro on 31 December 2021.Total government debt (excluding deposits), on 31 December 2021 amounted to 4,090.02 million euros, or 83.27% of GDP. Total government debt, including deposits, at the end of 2021 amounted to 3,625.19 million euros or 73.81% of GDP. External debt amounted to EUR 3,688.48 million, or 75.10% of GDP, while internal debt amounted to EUR 401.54 million, or 8.18% of GDP. Compared to the end of 2020, there was a reduction in government debt in the total amount of EUR 240.81 million, which is a result of the reduction of external debt by EUR 146.79 million, and the reduction of domestic debt by EUR 94.02 million. The decrease in external debt was primarily due to the repayment of debt on the basis of Eurobonds issued in 2016 in the amount of EUR 227.45 million, as well as other credit arrangements concluded with foreign creditors. Domestic debt decreased mainly due to the repayment of treasury bills in the amount of EUR 41.70 million and principal on short-term and long-term loans in the amount of approximately EUR 43.61 million.

The Decision on the formation of the Coordination Body for supervising the implementation of the Decision on granting temporary protection to persons from Ukraine was adopted. The Decision defines that the Coordination Body monitors and coordinates activities and measures taken by competent bodies and institutions in order to implement the Decision, i.e. to exercise the right of persons from Ukraine to accommodation, health care, primary and secondary education, information on rights and obligations, work, documents and the right to apply for international protection, as well as cooperation with international organisations dealing with the rights of refugees and migrants and the Red Cross of Montenegro. In this regard, the Cabinet approved redirection of funds from the spending unit of the Ministry of Finance and Social Welfare to the spending unit of the Ministry of the Interior in the amount of up to € 2,000,000.00 for the implementation of the Decision on granting temporary protection to persons from Ukraine.

The Cabinet adopted the Decision on the establishment of the Anti-Doping Commission. By adopting this decision, Montenegro has fully harmonized its national legislation with international standards in the field of anti-doping. The decision stipulates that the Anti-Doping Commission is formed by the Government, and that it includes representatives of the Montenegrin Olympic Committee, Paralympic Committee and Sports Council, and is headed by a director elected through a public competition, which ensures full functional independence of the Commission.

The Decision on amendments to the Decision on the formation of the Commission for conducting a public auction for the allocation of emission credits was adopted. Amendments to the Decision prescribe an odd number of members of the Commission in order to facilitate decision-making at sessions. Also, it is additionally defined that the task of the Commission is to determine the text of the public invitation which contains the number of emission credits for awarding.

The Cabinet adopted amendments to the Draft Law on Amendments to the Law on Excise Duties. The proposed amendments, among other things, provide the possibility of exercising the right to a refund of part of the paid excise duty when purchasing gas oils used as motor fuel for industrial and commercial purposes, for legal entities and registered entrepreneurs performing activities of taxi services. It is envisaged that the right to a refund of part of the excise duty paid for this activity can be exercised in the amount of up to 7% of turnover.

The Action Plan for the implementation of the Schengen Action Plan for 2022 was adopted and the Report on the implementation of the Action Plan for the implementation of the Schengen Action Plan for 2021 was adopted. The implementation of the measures from the Action Plan will ensure the continuation of activities on harmonization with the Schengen requirements, progress in the implementation of legal, regulatory and institutional reforms needed to achieve the goals of the Action Plan, as well as further improvement of administrative, infrastructural and technical capacities.

The Cabinet also adopted the Action Plan for the Implementation of the Integrated Border Management Strategy for 2022 and adopted the Report on the Implementation of the Action Plan for the Implementation of the Integrated Border Management Strategy for 2021. The Action Plan is a part of the Framework Action Plan for the Implementation of the Integrated Border Management Strategy for the period 2020-2024. It was made on the basis of the progress made in this area in the process of Montenegro's accession to the EU, with special emphasis on comprehensive preparations for taking responsibility for the management of the European Union's external borders and for compliance with Schengen requirements. The activities contained in this document have been jointly defined by the bodies involved in integrated border management, and the planned measures, as well as the coordination system, will ensure the achievement of the objectives set out in the Strategy. According to the Law on Budget in 2022, EUR 3,621,867.67 million is planned for the Development of the Integrated Border Management System, for the implementation of 26 projects.

The Programme for construction, reconstruction, maintenance and protection of main and regional roads for 2022 was adopted and the Report on the implementation of the Programme for 2021 was adopted. The programme for 2022 plans to provide € 106,445,004.80 for regular and investment maintenance, reconstruction and construction of state roads in order to continue or start the construction and reconstruction of about 350 km of regional and main roads, namely: 213 km in the northern region, 89km in the central region and 75km in the coastal region.

The Cabinet adopted the Plan for the preparation of 2022 summer tourist season. The goal of drafting the Plan is to create preconditions for improving the business environment of the tourism and hospitality industry, which should result in reaching the income from tourism from 2019 and mitigate negative impacts of the war in Ukraine. Since the tourism industry of Montenegro is developing faster than the institutional and systemic mechanisms that support it, the intention of the Plan is to promote integration and coordination in the work of state and local institutions, in order to create a successful summer tourist season and create high-quality and highly diversified tourist product.

The Work Plan for 2022 and the Programme of Cooperation between the Government of Montenegro and the United Nations Children's Fund (UNICEF) were adopted.

The Information on creating conditions for the construction of processing capacities in the fisheries sector of Montenegro "Montenegrin REGROW" with the proposed measures was adopted. Concept of the Montenegrin REGROW project is based on the formation of the Montenegrin Blue Growth Cluster and strengthening the capacity of members of the fisheries and aquaculture sector through the construction of fish processing plants and other aquatic foods originating from commercial fishing and farming in the Industrial Zone of Kotor. The discussion expressed the belief that the implementation of the project and the construction of the first modern processing facilities in the marine fisheries sector with certain capacities for storage and preservation of fish and other aquatic foods will greatly contribute to stabilizing, organizing and increasing the efficiency of Montenegro's fisheries sector.

The Cabinet adopted the Information on activities on the implementation of priority projects in the field of tourism for the period July - December 2021. According to the data presented in the Information, it was stated that most projects in the reporting period, despite the limitations caused by the COVID-19 pandemic, are implemented in accordance with obligations under contracts and investment programmes, with small changes in dynamics of implementing planned activities.

The Information on the activities for the implementation of the "Special Investment Programme of Special Importance for the Economic Interest of Montenegro" for the period July - December 2021 was adopted.

The Analysis of the legal framework for the development of electronic services was adopted. For the purposes of this Analysis, a list of priority services was obtained, the implementation of which would accelerate digital transformation and enable citizens to communicate more easily and exercise their rights, which was especially needed during the COVID-19 pandemic. The analysis covered 21 priority services.

The Cabinet adopted the Information on concluding agreements with banks in order to establish an Electronic Payment System. This system enables citizens to make an electronic payment of administrative fees and other public revenues using payment cards.

The Information on the conducted public procurement procedure of Oracle licenses in 2022 for state institutions was adopted. The Public Procurement Plan for 2022 envisages the launch of an open procedure for the procurement of Oracle licenses for state administration bodies that base their information systems on Oracle technologies, totaling 553,719.01 EUR without VAT or 670,000.00 EUR including VAT. The Ministry of Public Administration, Digital Society and Media conducted the necessary procedures for the implementation of the public procurement procedure and after the evaluation of the bid, the Decision on the selection of the most favorable bid was made, according to which the CoreIT from Podgorica was rated as the most favorable. Also, the Information on the conducted public procurement procedure for Microsoft licenses and authorization to sign the Enterprise Agreement for the period 2022-2024 was adopted.

The Action Plan for the implementation of the Strategy for Disaster Risk Reduction for the period 2022-2023 was adopted. For the implementation of all activities of this Action Plan, it is necessary to provide funds in the amount of about 13,000,000.00 euros. The planned activities will be financed from the Budget of Montenegro, the budget of local self-government units, funds from the Protection and Rescue Fund, loans, implementation of programmes and projects financed from EU funds and funds of other international organisations and other sources.

The Cabinet adopted the Report on the Work of the Public Administration Reform Council for 2021. It was emphasised in the discussion that public administration reform is a priority of this Government. The Public Administration Reform Council promotes high-quality services to citizens, the creation of public administration that will contribute to economic stability, increase the quality of life and competitiveness of the economy, all in order to meet the conditions for EU membership.

The Final Report on the Implementation of the Strategy for the Protection of Persons with Disabilities from Discrimination and Promotion of Equality 2017-2021 was adopted.

The Cabinet adopted the 2021 Report on the Implementation of the Strategy of Inclusive Education in Montenegro 2019-2025.

The Information on the process of drafting the Media Strategy of Montenegro 2022-2026 was adopted. The Information states that the Ministry of Public Administration, Digital Society and Media, in cooperation with its partners, has prepared the Draft Media Strategy of Montenegro 2022-2026, as well as the accompanying Action Plan 2022-2023. This Strategy aims to create favourable working conditions, which will contribute to the improvement of the environment for free and professional journalism, i.e. to enable citizens the right to true, timely and complete information.

The Cabinet adopted the Information on the vote for the adoption of the Draft Decision of the European Bank for Reconstruction and Development entitled "Suspending or modifying Russia's access to Bank resources under Article 8.3 of the EBRD's constitution" and the Draft Decision of the European Bank for Reconstruction and Development entitled "Suspending or modifying Belarus' access to Bank resources under Article 8.3 of the EBRD's constitution". The Cabinet accepted the draft decisions and authorized the Minister of Finance and Social Welfare to vote in favor of their adoption.

The Information on the necessity of increasing the allocation for defence to the amount of 2% of GDP in 2022 or 2023 was adopted. 

The Cabinet adopted the Decision on dissolving the Municipal Assembly of Budva. Bearing in mind that, even after the warning from the Government, the Municipal Assembly of Budva did not hold a session, i.e. did not ensure its functioning or execute its legal duties, which jeopardized the exercise of citizens' rights, the Cabinet assessed that the conditions for dissolving the Municipal Assembly have been met. The Board of Creditors appointed by the Government shall be in charge of the functioning of the Assembly, until the newly elected Assembly is constituted.

The Cabinet passed a Decree amending the Decree on the conditions, manner and dynamics of implementing agricultural policy measures for 2022 - AGROBUDGET. The reason for the changes in the Agrobudget are additional subsidies for the production of cereals and late season potatoes in order to reduce the negative impacts of the war in Ukraine on Montenegrin agriculture, increase the area under these crops in Montenegro, provide larger quantities of agricultural products and reduce import dependence.