MEPs call for probe into Montenegro's First Bank over money laundering allegations

By bne IntelliNews January 24, 2016

Members of the European Parliament have called for pressure to be put on the Montenegrin authorities to start an investigation into First Bank (Prva Banka) over allegations the bank has been involved in money laundering.

First Bank is controlled by prime minister Milo Djukanovic’s brother, Aco Djukanovic, and local NGOs have dubbed the bank the “personal ATM” of Djukanovic’s family and close allies. As Montenegro aims for EU membership, the country’s leadership is coming under increased pressure to investigate high-level corruption.

The proposal to call for an investigation into First Bank was among 155 proposed amendments to the draft motion for a resolution on the European Commission’s 2015 Report on Montenegro.

The amendment proposed by MEPs Ulrike Lunacek and Terry Reintke, “calls for starting investigations and prosecutions of related high level cases including alleged money laundering cases involving the Prva Banka.”

The also express concern “about delays and blockades regarding ongoing investigations such as in the Telekom and KAP [Kombinat Aluminijuma Podgorica] cases.” The Montenegrin authorities launched a probe into the 2005 sale of state-owned telecoms incumbent Telekom to Magyar Telekom in 2012.

Another amendment tabled by the two MEPs recommends “proper follow-up” by the government to recommendations adopted by the parliament, and singles out the lack of action on an independent audit into spending by Montenegro’s largest industrial company KAP.

According to the Organised Crime and Corruption Reporting Project (OCCRP), First Bank was privatised back in 2006, when a 30% stake was sold to Aco Djukanovic’s firm Monte Nova, which already had another 12% in the bank. Over the next two years, via a series of capital hikes, Djukanovic took over the control of the bank.

An audit by PricewaterhouseCoopers, carried out in 2010, claims that the bank allegedly breached money laundering regulations as it failed to report shady transactions, OCCRP reported. The BBC quotes the same audit as saying that two companies connected to convicted money launderer Dusko Saric, brother of convicted cocaine smuggler Darko Saric, had accounts with First Bank and were among its biggest customers.

First Bank faced liquidity problems in 2007 and was bailed out by the government in 2008.

According to the latest available data from Montenegro’s central bank, First Bank’s assets totalled €310.3mn at the end of September 2015, up from €286.9mn a year earlier. Its net profit sank some 52% y/y to €0.15mn in the first nine months of last year.

Related Articles

Russian central bank governor Nabiullina to be nominated for further five-year term

The governor of the Central Bank of Russia (CBR), Elvira Nabiullina, will be nominated for another five-year term, President Vladimir Putin told the country’s top banker on March 22. The nomination ... more

Iran "hits impasse" in bid to set up Bank of England clearing accounts

Iran is failing to make headway with a request to the Bank of England (BoE) to set up special clearing accounts for its banks, Reuters reported on March 20. Sources said the BoE ... more

IMF delays new $1bn tranche to Ukraine due to Donbas blockade

Ukraine's main donor, the International Monetary Fund (IMF), has cancelled a board meeting scheduled for March 20 that was expected to see the release of a $1bn tranche to Ukraine, while demanding ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss