Proposal, adopted by Government on October16,2008                                  

LAW ON PREVENTING CONFLIC OF INTERESTS IN EXERCISING PUBLIC FUNCTIONS
I GENERAL PROVISIONS 

Subject of the Law

Article 1 

In the aim of creating and maintaining the trust of citizens into conscientious and responsible exercise of  public functions, this Law defines the restrictions in exercising the public functions, submission of reports on revenues and property, other measures for prevention of conflict of public and private interest as well as the other issues relevant for execution of this Law.  

Conflict of Interest

Article 2

A public official shall exercise his public function in such a manner as not to give priority to his private interest over the public interest or to cause a conflict between public and private interest.
Conflict of interests arises if a private interest of a public official affects or may affect public official’s impartiality in exercising public function.

Public Official

Article 3

For the purposes of this Law, the term public official shall have the following meaning:
Every person elected directly in elections (President of Montenegro, Member of the Parliament of Montenegro, Councilor, Mayor  and Municipality President);
every person elected or appointed by the Parliament of Montenegro, or person whose election is confirmed by the Parliament of Montenegro (Speaker and Deputy Speaker of the Parliament, Prime Minister and member of Montenegrin Government, Constitutional Court President and judge, Supreme State Prosecutor and State Prosecutor, Supreme Court President, Protector of human rights and freedoms and his Deputy, Governor i.e. President and member of the Council of the Central Bank of Montenegro, President and member of the Senate of the State Auditing Institution, President and member of the Securities Commission, President and member of the Commission for prevention on conflict of interests, President and member of the Board of the Regulatory Agency for Energy Sector, director of a public company and public institution established by the Parliament of Montenegro, or the management body of which is elected and appointed by the Parliament of Montenegro, Secretary General of the Parliament of Montenegro and his deputy);
Person appointed by the President of Montenegro (ambassador of Montenegro and head of Montenegrin representative office abroad);
person elected, appointed or nominated by the Government of Montenegro, or whose election is confirmed by the Government of Montenegro (deputy Minister and secretary of a Ministry, Secretary General of the Government of Montenegro, head and deputy head of a public administration body, President and judge of Misdemeanor Court of Montenegro and regional misdemeanor body, Head of the State Protocol, Director of the National Tourism Organization, the Director of the Agency for Restructuring of the Economy and Foreign Investments, President and a member  of the Council of Electronic Communications and Postal Services, director of any fund established by the state, the President and members of the Commission for Control of Public Procurement Procedure, director of public institution established by the state,  president and member of management bodies, as well as director of public company or any other business organization, regulatory body or other legal entity not incorporated in this item and specially established by the Government of Montenegro, or with management bodies appointed by the Government of Montenegro);
President and member of the Judicial Council, Court President and judge elected by the Judicial Council, President and member of the Prosecutors’ Council, State Prosecutor Deputy, and director of the Broadcasting Agency;
person appointed by, or whose appointment is approved by the Assembly or the Mayor of the Capital, Historic Capital or municipality (President and Secretary of the Assembly, Vice-president of the municipality, Chief Administrator, agency director, manager, head of any local government body, President and member of a management body, i.e. body managing a public service established by the assembly).  

Independent body

Article 4 

Existence of the conflict of interest is established by the Commission for Prevention of Conflict of Interest (hereinafter referred to as Commission), and measures for preventing conflict of interest are undertaken by the Commission, as an independent body.
Opinions on existence of the conflict of interest and decisions on violation of provisions of this Law given or passed by the Commission in accordance with this law shall be binding for public official.
It is considered for  public official to violate provisions of this law in case when he/she does not behave in accordance with the opinion of the Commission or with the obligations prescribed by this law, or he/she behaves in a manner violating prohibitions and rules referring to prevention of conflict of interest prescribed by this law and other regulations defining the conflict of interests in the areas governed by these regulations.  

Definition

Article 5 

In this Law, the terms set out below shall have the following meanings:
  public interest shall be material and non-material interest in well-being and prosperity of all citizens under equal conditions;
  private interest  shall mean the ownership or other material or non-material interest of a public official;
  ownership interest – shall mean every interest of a public official in a business organization that exceeds the amount of ten minimum salaries in Montenegro;
  benefit  shall mean property or property rights and other material and non-material rights
Related person shall mean a direct relative of a public official, collateral relative up to the second degree, in-laws up to the first degree, spouse or partner in extra-marital relation, adoptive parent or adopted child gift of higher value shall include money, things, rights and services provided without any appropriate compensation, as well as any other benefit provided to a public official or to related person exceeding the amount of € 50;
public company shall be a company in which the state, municipality, Historic Capital or Capital (hereinafter referred to as municipality) have at least 25% of equity, company shall be every company except a public company as defined herein;
authority shall mean a state body, public administration body, municipal body, a public company, a public institution, regulatory or other body or commission where a public official exercises or used to exercise his function.

II RESTRICTIONS IN EXERCISING PUBLIC FUNCTIONS 

General restrictions 

           Exercise of other public activities 

Article 6 

A public official may be engaged in scientific, teaching, cultural and sports activities and may acquire revenues from copy, patent and similar rights, intellectual and industrial property.
Public official is obliged to report the revenues from paragraph 1 of this article to the Commission.
The membership of a public official, appointed or elected, in permanent or provisional working bodies or mixed commissions, established by an authority, shall not be considered as an exercise of two or more public functions within the meaning of this Law. 

Management rights in companies

Article 7 

A person who is the owner, i.e. founder of a public company, other company, institution or any other legal entity shall, within 15 days from his/her election, appointment or nomination to the public function, transfer his/her management rights in such entities to any other legal or physical entity unrelated to himself/herself, so that such a person can exercise such management rights on his own / her own right and on behalf of  the public official by the time of termination of his public function.In case that the company or other entity referred to in the paragraph 1 hereof has a management body established in which the public official, as a member of such a body, exercises his management rights, transfer of such management rights implies resigning from the membership of such a management body according to the law.
Public official shall within five days from the day of transfer of his management rights, deliver to the Commission the data of the person he transferred the rights to as well as the evidence of the management rights transfer.
The person, the public official transferred his management rights to, shall become a person connected with the public official as defined in the Article 5, item 5 hereof.
Public official shall not give any notifications, instructions or orders to the person he transferred his management rights to, nor shall he/she in any other way influence, through such a person, the activities in the company or other entity referred to in the paragraph 1 hereof. 

Performing executive and other functions in a company

Article 8 

A public official shall not be a president or member of any management or supervisory board nor shall he be an executive director or member of management in any company.
Person elected, appointed or nominated to public function shall within 15 days from the day of being elected, appointed or nominated to the public function public official shall resign from his duty referred to in the paragraph 1 hereof.
Exercising public functions in public companies and public institutions

Article 9 

Public official shall not be a president or member of any management or supervisory board, executive director or member of management of a public company, public institution or any other legal entity, except the public company, public institution or other legal entity in which the state, i.e. local government, is owner of more than 51% of the capital.
Public official may be a president or a member of the management or supervisory board of scientific, humanitarian, sports and similar associations, without any right to fee or gifts, except as a compensation for travel expenses and other costs.  

Duty to resign

Article 10 

The public official who, while exercising a public function, accepts to perform other duty or function referred to in the Article 8 paragraph 1 and Article 9 paragraph 1 hereof, shall resign from the public function within 15 days from the day of beginning exercising such other function.  

Services Contracts

Article 11 

A public official shall not conclude any contract on provision of services with a public company.
A public official shall not conclude any contract on provision of services with any company which is in a contractual relation, that is which performs any activity for the Government or local government unit, during the exercise of his/her public function, unless the value of such a contract is less than 500 € per year. 

Right of councilor to conclude contract

Article 12 

A councilor who is not employed, i.e. who is not a permanent employee, may conclude a contract on provision of services with subjects from Article 14 of this law, if conclusion of such a contract does not cause a conflict of interests.
In the case referred to in the paragraph 1 hereof, the councilor shall report the conclusion of such a contract to the Commission, which shall provide its opinion on whether there is a conflict of interest. 

Statement on presence of conflict of interests

Article 13 

If, within the authority in which he/she exercises a public function, public official takes part in dispute and decision-making on matters in which he/she or related person has interest in, he/she shall notify, by way of Statement on presence of private interest, other participants in the dispute and decision-making prior to his/hers taking part in the dispute and not later than the beginning of decision-making.
By way of an exemption, the commitment to provide statement from paragraph 1 hereof does not refer to members of the Parliament and councilors or to public officials exempted by way of Rules on Exemption prescribed by special law or similar act.
An authority, in which public official exercises public function, shall enter the Statement on presence of private interest into the Record and ask the Commission for the opinion on this matter.
In case from paragraph 1 hereof, a public official shall not participate in dispute or decision making until the Commission does not provide the opinion on presence of conflict of interests.  

 Restrictions after termination of public function

Article 14

At least one year after the termination of his/her public function, a public official shall not:
appear before the authority where he exercised the public function in the capacity of a representative or attorney of a legal entity that has or is establishing contractual that is business relations with such an authority;
represent a legal or physical entity before the authority where he exercised the public function, in case in which he/she participated in decision making;
perform the activities of management or auditing in the legal entity where, at least a year before the end of his/her public function, his/her duties were connected to supervisory or control activities
enter into contractual relations or any other form of business cooperation with the authority where he exercised his public function
use, for the purpose of his/her own or another person’s benefit or for the purpose of harming other person, the information and notifications which he/she obtained during the execution of public function unless these information and notifications are available for public. 

Prohibition of accepting gifts

Article 15 

A public official shall not accept money, securities or precious metal regardless of their value.
A public official shall not accept gifts, apart from protocolary gifts and appropriate gifts of a small value.
Gifts given by representatives of other states and international organization given during receiving and paying visits, as well as other gifts presented in similar occasions shall be considered protcolary gifts.
The gifts the value of which does not exceed 50 €, shall be considered appropriate gifts of small value. If a public official receives more than one gift from the same presenter during one year, the total of all gifts will be considered the full value.
Prohibition, i.e. restrictions referred to in the paragraphs 1 and 2 hereof shall refer to the members of the family of the public official referred to in article 20 paragraph 1 hereof.
Gift value is estimated according to its market value on the day of its acceptance. 

Refusing a gift

Article 16 

The public official offered a gift he may not accept, shall refuse the offer or, that is he shall inform the gift presenter that he cannot accept it.
The public official shall be obliged to submit a written report about the event referred to in the paragraph 1 hereof within the shortest possible time to the body in which he/she performs the public function.
If the public official, in the case referred to in the paragraph 1 hereof, was unable to refuse the gift or return the gift to the gift presenter, he/she shall hand over the gift to the body in which he/she performs the public function. The gifts handed over shall become state property as of the day of being handed over. 

Managing gifts

Article 17 

The accepted gifts and their value shall be entered into the records of gifts kept at the body the public official exercises his function in.
The gifts record referred to in the paragraph 1 hereof shall not contain the gifts the value of which does not exceed 30 €.
If it is established that the appropriate gift is of the value higher than the one referred to in Article 15 paragraph 4 hereof, such a gift shall be handed over to the body in which the public official exercises public function  and it shall become the property of the state, i.e. of the local government.
Protocolary gifts, regardless of their value, shall become the property of the state, i.e. of the local government.
Management of gifts referred to in the paragraph 1, 3, and 4 hereof, keeping records of gifts, as well as other issues concerning the restrictions and duties in accepting gifts related to exercising of a public function, shall be defined by the Commission.  

Records of gifts

Article 18 

The authority from Article 17 paragraph 1 hereof is obliged to provide the print from records of gifts that it is keeping and submit it to the Commission by the end of February of the following year for the previous year.
 If in reviewing the records referred to in the paragraph 1 hereof, the Commission establishes that a violation has occurred, it shall notify such a finding to the body that submitted these records.
The Commission shall prepare a public catalogue of gifts accepted in the previous year and publish it on its website.  

Illegal accepting of gifts

Article 19 

When the Commission is informed that a public official accepted gifts in a manner contrary to this Law, it shall inform the authority the public official exercises his function in and the body in charge of election i.e. appointment of the public official.
If the authorities referred to in the paragraph 1 hereof, confirm the opinion of the Commission that the public official accepted gifts contrary to this Law, such a conduct of the public official shall be considered a violation of the provisions hereof. The Commission shall make a Decision in that respect.
In the case referred to in the paragraph 2 hereof, the public official shall return the gift or the equivalent value of the gift in money. 

III REPORTS ON INCOMES AND PROPERTY

Submitting reports on incomes and property

Article 20 

Within 15 days on taking the public office, a public official shall submit to the Commission a report on his /her property and incomes, as well as the property and income of his/her spouse and children if they live in the same household (hereinafter: Report), according to the day of being elected, appointed or nominated.
Public official is obliged to provide the accurate data in the Report.
In the course of exercising the public function, public official shall submit the Report:
once a year, by the end of February of the current year for the previous year,
in case of any change in data contained in the Report, in terms of the increase in property exceeding 5,000 €, within 15 days from the day of such a change
Upon expiry of his term of office, public official shall submit report to the Commission within 15 days upon termination of the public function, and one year on termination of his/her term of office, according to the state of affairs on the day of submitting the Report. 

Data to be reported

Article 21 

  The Report shall contain:

Personal data of public official and members of his family referred to in the Article 20, paragraph 1 hereof (name and surname, the unique identity number, place of permanent i.e. temporary residence and the address, education level and title)data regarding the public function he exercises and data on property and incomes, particularly:
ownership rights over immovable assets and the right to lease immovable assets for the period of time exceeding one year, in the country and abroad, ownership rights over movable assets which are required to be registered with competent authorities (motor vehicles, vessels, aircrafts, arms etc.),deposits in banks and other financial organizations, in the country and abroad, shares and parts in legal entities,cash and securities of value exceeding 5,000 euros copyrights, patent rights and similar intellectual and industrial property rights, debts (principal, interest and term of payment) and claims,source and amount of incomes from working in academic institutions, educational institutions, institutions of culture, and sport institutions,membership in steering committees and supervisory boards of public companies, institutions and other legal entities with state or municipality capital share and in academic, humanitarian, sport, or similar associations
More detailed contents of the Disclosure form and the form for submitting data shall be defined by the Commission.   

Register of incomes and property

Article 22 

Data from the report shall be registered into the Register of income and property kept by the Commission.
Data referred to in the paragraph 1 hereof shall be available to the public.
Commission shall define the manner of keeping the register of incomes and property. 

IV PROCEDURE 

1. Giving of the opinion 

Giving opinion upon the request of public official in the case of suspicion of a conflict of interests

Article 23 

Should a public official have any doubts that he/she might be in the situation of conflict of interests, he/she shall be obliged to undertake all measures aimed at eliminating the conflict of interests, in accordance with the Law, and he/she shall report the suspicion to the Commission, which shall give its opinion.
A public official whose public function has been terminated may submit a request to the Commission for the purpose of obtaining opinion on existence of a conflict of interests referred to in Article 14 hereof.
A public official or a public official whose public function has been terminated shall be obliged to present accurate data on possible conflict of interests in the request for obtaining opinion referred to in paragraphs 1 and 2 hereof.
A public official may require from the Commission to give its opinion within an adequate deadline in order to be able to exercise and protect his/her rights and interests or to exercise his/her duties that the opinion has been required for.  

Exemption form the rule on confidentiality of the procedure

Article 24 

The procedure upon the request referred to in Article 23 hereof is confidential.
By way of an exemption, if a public official does not act upon the opinion of the Commission, the opinion shall be made public.  

2. Procedure for identifying violation of the provisions hereof 

Initiating the procedure

Article 25 

The procedure for deciding on whether there has been a violation hereof, shall be initiated by the Commission upon the request of the authority where the public official is performing or has performed his/her public function, the authority responsible for election, i.e. appointment of a public official, other state body or municipal body, other legal or physical entity.
The procedure may be initiated by the Commission ex officio.  

Form and contents of the initiative

Article 26 

Initiative referred to in Article 25, paragraph 1 hereof, shall be submitted in written form and shall contain: name, surname and address of the public official; name of the function he/she exercises; more detailed factual data with the evidence of existence of conflict of interests or other violations of the provisions hereof that the person submitting the request possesses or is familiar of; possibly the names of the persons that may confirm the allegations of the initiative, if the person submitting the request knows such persons; the name, surname and address of the physical entity, i.e. the name and the registered office of the legal entity which submits the request.
By way of an exemption, the request may be given in verbal form and recorded in the minutes with the authorized member of the Commission. 

Complementing and modifying the initiative and procedure upon the initiative

Article 27 

If the initiative is not made in accordance with Article 26, paragraph 1 hereof, or if it is not intelligible or if it does not contain all the required items in order to proceed upon such a request, the Commission shall invite the person submitting such an initiative to complement the initiative, i.e. to correct the initiative within the term defined by the Commission, which shall not exceed eight days.
If the person submitting the initiative does not act upon the Commission’s request to complement or modify the initiative, the Commission shall reject that initiative as improper. 

Statement of public official

Article 28 

The Commission shall inform the public official in written form about the initiating of the procedure, i.e. about the properly received, complemented, or modified initiative, and require the public official to submit a written statement regarding the allegations contained in the initiative within 15 days from the day of receipt of the initiative.
If the public official does not provide his/her statement in the manner and within the deadline referred to in paragraph 1 hereof, the Commission shall continue the procedure according to this Law.
Procedure before the Commission shall be conducted by an authorized Commission member. 

Establishing facts and circumstances

Article 29 

All the facts and circumstances relevant for decision-making ought to be established in the procedure.
The authorized Commission member shall be obliged to, ex officio, obtain data and information about the facts, necessary for conducting the procedure and decision-making, of which official records are kept by the competent state body, public administration bodies and municipal bodies, or by public companies, companies, institutions or other types of legal entities.
Bodies and legal entities referred to in paragraph 2 hereof shall be obliged to submit the requested data and information to the Commission, within the deadline set up by the Commission.

Presentation of evidence

Article 30 

The authorized Commission member, in charge of conducting the procedure, shall ex officio order the presentation of the evidence, if he/she considers it necessary for establishing the facts and circumstances relevant for decision-making, all in accordance with the general administrative procedure rules. 

Hearing

Article 31 

The authorized Commission member in charge of conducting the procedure shall, upon the request of the participants in the procedure or if he/she considers it necessary, order a hearing to take place. 

Statements

Article 32 

In the procedure before the Commission, the person submitting the initiative shall be obliged to present the facts that his/her initiative is based upon in a true and precise manner.
As a rule, the person submitting the initiative and the public official in the procedure shall make their statements in verbal form, and they may make the statements in written form as well.
In case that more comprehensive expert explanation is required, the authorized Commission member may order to the participant in the procedure to submit a written statement as well, and define a deadline for submitting such a statement. 

The participant in the procedure may request to be allowed to make a written statement. 

Protection of rights of the participants in the procedure

Article 33 

The public official and other participants in the procedure ought to be allowed to exercise and protect their rights and legal interests, which is under the responsibility of the authorized Commission member. 

Delivering writs to the Commission

Article 34 

After the procedure is completed and evidence presented, the authorized Commission member shall deliver all the writs to the Commission necessary for decision-making. 

Decision making in the Commission

Article 35 

The Commission shall make their decision determining whether the public official violated the provisions hereof by his/her act, activity, or omission. The Commission shall make such a decision in its session, without the presence of the public, not later than 15 days from the day of the closure of the procedure conducted according to this Law. 

Participants in the procedure may take part in the Commission’s session.
Decision referred to in paragraph 1 hereof ought to be substantiated.  

Delivering the decision

Article 36 

Decision of the Commission shall be delivered to the public official, to the person submitting the initiative, as well as to the authority that the public official performs his/her public function in or to the authority competent for election, i.e. appointment of the public official, if such authorities were not the entities submitting the initiative, not later than five days from the day on which it was passed.  

Decision review

Article 37 

Within eight days from the receipt of the decision, the public official and the person submitting the initiative may submit a request for decision review to the Commission.
The request referred to in the paragraph 1 hereof shall contain the reasons for the need to review or change the decision.
The Commission shall decide upon the request for the decision review within 30 days from the day of submission of the request.
Decision of the Commission upon the request referred to in the paragraph 1 hereof is final.

Administrative procedure may be initiated against the final decision of the Commission.
Application of the rules of general administrative procedure

Article 38 

Unless otherwise provided for under this Law, provisions of the law governing the general administrative procedure shall apply to the procedure of establishing the existence of violation hereof. 

Legal effect of the decisions

Article 39 

Violation of the provisions hereof, established in the final and legally valid decision, shall be considered unconscientious performance of public function, of which the Commission shall inform the authority that the public official is exercising his/her public function in as well as the authority competent for election, i.e. appointment of the public official, with the view of possible initiating of the dismissal procedure.
 If the public official is dismissed due to unconscientious performance of public function referred to in paragraph 1 hereof, the authority competent for election, i.e. appointment or nomination of the public official shall inform the Commission about the dismissal.
The public official dismissed due to the violation hereof may not perform the duties of civil servants and public employees within the period of four years from the date of dismissal.

Before making any decision on the election, appointment or nomination of a public official, the authorities competent for the appointment or nomination referred to in Article 3 hereof shall be obliged to check with the Commission if the proposed candidate was dismissed from any position of a public official defined in Article 3 hereof in the period of last four years preceding the candidacy.
If in any of the stages of the procedure, the Commission has doubts that a public official committed a criminal offence prosecuted ex officio, the Commission shall, without any delay, file a criminal charge to the State Prosecutor. 

Reimbursement of material damage

Article 40 

If violation of provisions hereof caused a material damage to a legal or physical entity, that entity has the right to reimbursement of damage, by filing a complaint to a competent court in the legal proceedings, in which general rules on damage reimbursement shall be applied.

                                                                  V COMMISSION 

                                                                     Competences

Article 41 

The Commission shall have the competences of:
conducting the procedure and making decisions regarding any violation of the provisions hereof;
giving its opinion on the existence of a conflict of interests;
establishing the value of the gift referred to in Article 15, paragraph 6 hereof;
passing rules and rules of procedure for the operation of the Commission, upon the proposal of the President of the Commission;
giving its opinion on draft laws, other regulations and general acts, if the Commission considers it necessary for the purposes of preventing conflict of interests;
launching the initiative for amendments to the laws, other regulations and general acts for the purposes of their alignment with European and other international standards in the field of anti-corruption initiative and transparency of business operations;
submitting a request for initiating an offence procedure;
performing other activities in compliance with this Law.
Rules of procedure for the operation of the Commission shall define in details the method of work and other issues of importance for the operation of the Commission.  

Composition of the Commission

Article 42 

The Commission shall have a President and six members.
The president and members of the Commission shall be elected by the Parliament of Montenegro (hereinafter referred to as: “Parliament”) upon the proposal of the competent Parliamentary working body, for the period of five years, without the possibility of re-election.
Persons who have proved their impartiality and conscientiousness by their professional work and moral qualities may be elected to the positions of the President and members of the Commission and at least one member of the Commission shall have a law degree and judicial exam passed. 

Position of a Commission member

Article 43 

The president and members of the Commission shall not be members of any political party.
The president of the Commission shall perform his duty professionally and shall be entitled to a salary to the amount equal to the salary defined for the Protector of Human Rights and Freedoms.
Members of the Commission shall be entitled to a compensation for their work, which shall be defined by the Parliamentary working body.  

Termination of duties in the Commission

Article 44 

Duties of the president and members of the Commission shall terminate upon the expiry of the term of office that the president or members were elected to, as well as upon a resignation or dismissal.
The president and member of the Commission shall be dismissed in the following cases:
unconscientious or biased performance of the duties that he/she has as a member of the Commission; 
becoming a member of a political party body;
a final court verdict sentencing him/her for a criminal or any other punishable offence which makes him/her unworthy of performing the duty of a Commission member;
if the Commission establishes that, as a public official, he/she did not act in the manner required by this Law.
Existence of the reason for dismissal referred to in paragraph 2 hereof shall be established by the Commission in its session, and inform the Parliament thereof.
The Commission may decide that its president or a member shall not perform his/her duties until the Parliament shall pass the dismissal decision. 

Administrative service

Article 45 

The Commission shall establish the administrative service (hereinafter referred to as: “administrative service”) for performing expert and administrative matters.
Administrative service shall be headed by the secretary.
The secretary shall be appointed and dismissed by the Commission.
The Rulebook on internal organization and systematization of the administrative service shall be adopted by the Commission, with the previous opinion given by a competent working body of the Parliament of Montenegro.  

Rights of the persons employed in Administrative service

Article 46 

Regulations on civil servants and public employees shall apply to the rights, obligations and duties of the persons employed in the administrative service of the Commission.  

Resources of the Commission

Article 47 

Resources for the operation of the Commission shall be provided from the Budget of Montenegro upon the proposal of the Commission.  

Public nature of the operation of the Commission

Article 48 

Decisions of the Commission regarding the existence of a conflict of interests shall be published on the Commission’s web site and delivered to the media.
The Commission shall submit reports on its work to the Parliament, if appropriate, at least once a year. 

Ensuring data protection

Article 49 

When informing the public, the Commission shall ensure protection of personal data from possible abuses, particularly the data of public officials and persons connected with public officials in cases when no conflict of interest is identified in terms of this Law, i.e. when the decision on violation of the provisions of this Law was not passed.
Decision establishing that a public official did not violate provisions hereof, i.e. data related to passing of such a decision shall not be published without a consent of the public official that such a decision and data refer to.

VI PENALTY PROVISIONS 

                                                                         Article 50

A fine in the amount of fifteen to twenty minimum salaries in Montenegro shall be imposed on the public official for violating the provisions of the law if:
the public official does not report any income acquired by performing scientific, educational, cultural or sport activities, or from copyrights, patent rights, and other related intellectual and industrial property rights to the Commission (Article 6, paragraph 2);
the public official, who is the owner or founder of a public company, other company, institution or any other legal entity, does not transfer his/her managerial rights in such entities to any other legal or physical entity that is not connected with him/her, within 15 days from the day of being elected, appointed or nominated to the public function, (Article 7, paragraph 1);
the public official gives any notifications, instructions or orders to the person he/she transferred his/her managerial rights to, or in any other manner influences through such a person the activities in the public company, other company, institution or other legal entity, of which he/she is owner or founder (Article 7, paragraph 5);
the public official does not resign from the function of the President or the member of the management body or supervisory body, executive director or member of the management in the company, within 15 days from the day of being elected, appointed or nominated to the public function (Article 8, paragraph 2);
the public official does not resign from the public function, when in exercising public function accepts to perform other duty, i.e. function of the president or member of the management body or supervisory body, executive director or member of the management in the company, public company, public institution, or other legal entity with a capital share owned by the state or municipality, within 15 days from the day of starting other function or duty (Article 10);
the public official concludes any contract on provision of services with a public company or any contract on provision of services with other company which is under a contractual relation with the Government or municipality i.e. which performs any activity for the Government or municipality, unless the value of such a contract is less than € 500 per year (Article 11);
the public official accepts money, securities or precious metal, regardless of their value, a gift, except the protocolary and appropriate gift of small value (Article 15, paragraphs 1 and 2);
the public official does not return a gift or equivalent money value of the gift, in case when the authority in which the public official performs public function and body competent for election and appointment of the public official confirm the opinion of the Commission that the public official accepted gifts contrary to the provisions hereof (Article 19, paragraph 3);
the public official does not submit the report to the Commission in due time, or does not present accurate data in the report (Article 20, paragraphs 1 and 2).

A fine in the amount of five to twenty minimum salaries in Montenegro shall be imposed on family member of the public official for violation referred to in paragraph 1, item 7.

Along with the fine imposed for violations referred to in paragraph 1, items 7 and 8, and paragraph 2 hereof, a safeguard measure of seizure of objects – gifts shall be imposed as well.   

Article 51 

A fine in the amount of five to twenty minimum salaries in Montenegro shall be imposed on a public official for violation, if:
he/she does not submit to the Commission data on person to whom he/she transferred managerial rights and evidence on transfer of managerial rights, within five days following the day of transfer of managerial rights (Article 7, paragraph 3);
he/she does not hand over the gift that he/she could not refuse nor return to the gift-giver or to the authority in which he/she performs the public function (Article 16, paragraph 3). 

A safeguard measure of seizure of objects – gifts shall be imposed for violations referred to in paragraph 1, item 2 hereof. 

Instead of the fine for violation referred to in paragraph 1, item 1 hereof, a warning may be issued. 

Article 52 

A fine in the amount of five to twenty minimum salaries in Montenegro shall be imposed on person whose public function terminated, if within one year from the termination of the public function:
appears before the authority where he exercised his public function in the capacity of a representative or attorney of a legal entity that has or is establishing business relations with such an authority (Article 14, paragraph 1, point 1);
represents a legal or physical entity before the authority where he exercised his public function, if as a public official he participated in decision making in that particular case;
            (Article 14, paragraph 1, point 2);
Performs the activities of management or auditing in the legal entity where, at least a year before the end of his public function, his duties were connected to supervisory or control activities (Article 14, paragraph 1, point 3);
Enters into contractual relations or any other form of business cooperation with the authority where he exercised his public function, two years before termination of the public function in that management body (Article 14, paragraph 1, point 4);
Uses , for the purpose of getting benefit for themselves or somebody else, or for the purpose of causing damage to another person, knowledge and information acquired in the performance of public office, unless those information and knowledge are available to the public (Article 14, paragraph 1, point 5).
       Along with the punishment for the offences form the paragraph 1 of this article, there is another protective measure which can be declared and that is the prohibition on performing of duties lasting from six months to one year.   

IX TRANSITIONAL AND FINAL PROVISIONS

Article 53 

Within 90 days from the day of coming of this Law into effect, the Parliament shall establish the Commission from the Article 42 of this law.
Before the Commission referred to in the paragraph 1 hereof is established, its duties according to this Law shall be discharged by the Commission for establishing conflict of interests. 

Article 54 

Within 90 days from the day of being established, the Commission shall pass the Rulebook, Rules of procedure and other enactments according to this Law.  

Article 55 

The Commission shall take over, within 30 days following its establishment, the official premises, cases and other documentation, equipment, funds for operation and other means used by the Commission for establishing conflict of interests. 

Article 56 

The Commission shall take over, within thirty days after its establishment, the employees from the administrative service of the Commission for establishing conflict of interests 

The employees referred to in the paragraph 1 hereof that are not assigned duties according to the document on organization and job descriptions of the Administrative service shall exercise their labour rights and rights stemming from labour according to the regulations regulating rights and obligations of civil servants and state employees. 

Article 57 

A public official who, before coming into effect of this Law, was not obliged to submit Disclosure form on his/her incomes and property to the Commission according to the Law on Conflict of Interests, shall submit the Disclosure form referred to in the Article 20, paragraph 3, item 1 hereof within 15 days from the day of coming into effect of the by-law referred to in the Article 22, paragraph 3 hereof. 

Article 58 

By coming into effect of this Law, the Law on Conflict of Interest (“Official Gazette of Montenegro” No. 42/04) shall cease to be in effect.   

      Article 59

This law shall come into effect on the eighth day after its publishing in the “Official Gazette of Montenegro”. 

RATIONEL 

I CONSTITUTIONAL BASIS FOR PASSING THE LAW

Constitutional basis for passing this Law is contained in the provision of the Article 16, paragraph 1, item 5 of the Constitution of Montenegro, which reads that the law, in accordance with Constitution shall regulate other matters of interest for Montenegro.  

II REASONS FOR PASSING THE LAW

The Law on Conflict of Interests (“Official Gazette of Montenegro” No. 42/04, 12/05, 17/2005) was adopted by the Parliament of Montenegro on 21 April, 2004. That law regulated the terms and manner of performing public control over the activities of public officials, with the view of preventing conflict of private and public interest. Apart from this, the Law was also aimed at raising the level of trust in legitimate and impartial exercising of public functions, i.e. of strengthening public trust in the political system and its institutions. 

Now the Law has been in force for almost four years, and the Commission for establishing conflict of interests in its current composition has been implementing this Law for more than three years. Undoubtedly, it is a relatively optimal time period to face problems that impede achievement of the scope and purpose of the Law. 

The following reasons order the passing this new Law on solving conflicts of interests in exercising public functions:
The existing Law does not contain:
adequate legal mechanisms, which would combat conflict of interests in a more efficient manner, as well as the explicit rules, in a broader sense, on the incompatibility of functions.
specific rules that apply when a public official moves from public into private sector, since there is always a potential risk that former public officials might abuse their contacts and information, particularly in cases when the new employment is closely related to their previous functions. This includes development of clear rules for the cases of movement of public officials from the public to the private sector („pantouflage“) so that the conflict of interests is avoided.  

Inconsistency with the UN Convention against Corruption, especially the Article 2 (the definition of a public official), also requires changes of certain solutions in that sense. 

Some public officials still do not act according to the Commissions Decision, in spite the fact that they found themselves in the conflict of interests.  

Sanctions for violating provisions of the current law (the proposal for dismissal of such a public official and publishing the decision), although having its political and moral gravity, have not achieved their goals so far at the smaller number of officials. 

The above mentioned reasons indicate the weak points, lacunas, and lacks of the current Law Conflict of Interests, which urged the drafters to propose amendments of the legal solutions aimed at preventing the undesired consequences that conflict of interests might cause.  

Starting from the undertaken international commitments and recommendations of the United Nations, European Union and the Council of Europe in the field of fighting organized crime, corruption and money laundering, particularly the GRECCO recommendations (Group d’Etats contre la corruption- Group of countries against corruption) the Law contains international standards adapted to Montenegrin legal environment. 

Draft law has four key points – principles that are binding also beyond the scope of this law, general limitations in performing public office, especially a separate body to implement the Law and sanctions that are general and specific prevention of abuse. 

In comparison to the current Law, the Draft Law on Preventing Conflict of Interests in Exercising Public Functions extends the duties and prohibitions that refer to public officials. For example, prohibited activities of public officials are explicitly and separately stated, and the duration of duties envisaged by the law for the period after the termination of the public function is separately defined, as well as the duty to register all the fees the public official is entitled to. The specific characteristic of the Draft Law lies in the fact that it is founded on the principles that are both legal but also moral standards of conduct.  

Draft Law on Preventing Conflict of Interests in Exercising Public Functions provides for new sanctions. There are fines, but also completely new sanctions like prohibition from running any candidacy in the period of four years following the day of dismissal.  

Finally, in drafting the Law we used:

- The experiences in applying the law so far;
- Comparative solutions from the legislation of the countries in the region (Albania, Bosnia and Herzegovina, Macedonia, Croatia, Slovenia and Serbia) but also from European legislation (Hungary, France, England, Germany, Czech Republic, Bulgaria, Slovakia). 

It is undisputable that passing of the new law will again provoke controversial comments and different opinions, that its application will face difficulties, but it will take some time before a uniform practice is created that will serve as the basis for assessing the activities of public officials in future and it will contribute to  their stronger responsibility. 

III EXPLANATION OF BASIC LEGAL INSTITUTES

The Law contains seven chapters, which represent separate units that in line with the basic provisions elaborate on the scope and purpose of the Law. 

GENERAL PROVISIONS (art. 1 to 5)

Draft Law contains the definition of the conflict of interests. Conflict of interests exists when his/her private interest influences or can influence the impartiality of the public official in performing the public function. As a general rule, it is defined that a public official is obliged to perform his function in such manner that a public interest is not breached by a personal one. Draft Law precisely defines the group of persons this Law applies to, as well as persons considered to be connected with public officials. Persons which are by the Draft Law considered to be public officials are also heads of local self-government bodies who are categorised as the holders of public functions, which derives from the Article 2 of the UN Convention against Corruption.  

LIMITATIONS IN EXCERCISING PUBLIC FUNCTIONS (art. 6 to 19)

Obligations of public officials deriving from this Law represent the rules of conduct in accordance with principles which officials should be familiar with, pointing on their behaviour and informing the public about it. Provisions of some articles of the Draft Law regulate the basic rules of exercising public functions i.e. they explicitly designate activities public officials are prohibited from in exercising public function which occur in various situations. The basic goal of the solution proposed in this way is to prevent domination of private interest, so that public functions wouldn’t loose credibility, ethic quality, and expectations of the public, which is directly connected with the personal integrity and legitimacy in work of the public official to, further, perform certain public function.
Therefore, the Draft Law regulates all the issues related to avoiding conflict of interests when a public official is: 1) owner, i.e. founder of a company, including a public company, which in terms of this Law includes joint stock companies and other companies with mixed private  and state capital, institutions or other legal entities where a public official exercises management rights on the grounds of ownership; 2) president or member of the management body, person in management position (executive director or member of management) or member of a supervisory board in business entities; 3) president or member of a management body and supervisory board, executive director, member of management of a public company, public institution or other legal entity with capital interest the owner of which is the state or local government. The defined restrictions in terms of prohibition of exercising a number of functions assume the transfer of management authorities and resignation from management and other functions in the companies when a person is appointed, elected or nominated to a public function; special conditions for performing managerial competencies in public companies, public institutions, and other legal entities to which exclusive and special rights in providing public services have been transferred; so as obligation to  resign from a public function in case a public official accepts other duties, i.e. other functions. 
Public officials are prohibited from entering into services agreements with any public company, as well as from entering into agreements with private companies that have contracts or work with the Government or local government unit while they are exercising public functions unless the value of such an agreement is less than 500 Euro a year.
Public official is allowed to participate in scientific, academic, cultural and sports activities and to gain incomes from copy, patent and similar rights of industrial and intellectual property, so that he/she wouldn’t be limited in performing these activities which are in the broader sense extremely important for the country.   

The Draft Law defines the rules of conduct for a public official and authority when it comes to participation in discussing and decision making in matters in which such public official or a person connected with him has a private interest. Public official has the duty to make a statement regarding the existence of such a private interest before he participates in the discussion and the authority has the duty to enter such a statement into the minutes, to take a stand regarding the existence of the conflict of interests and request the opinion of the Commission for preventing conflict, which is obliging for the public official. Public official can not participate in the decision making process until the Commission gives the opinion on the possible conflict of interest.  

 According to the recommendation contained in the Report on the evaluation of the Republic of Montenegro adopted by GRECCO in the 30 plenary session in Strasbourg which took place from October 9 – 13, 2006, we defined the limitations to be valid after the termination of a public function, where there is a doubt of the unjust privilege of the previous function or official position. These provisions mean the introduction of the institute of pantouflage or revolving doors in Montenegrin legislation, which has become immanent to much legislation lately.  

Provisions of the law define the restrictions and prohibitions in case of accepting gifts, as one of the issues through which publicity and integrity are ensured as well as prevention and elimination of the causes of corruptive conduct. In this respect, the Draft Law regulates this issue in a well-organized manner so that it can reduce or alleviate possibility of ungrounded opinions or doubts in public official and his exercising of public function. On the other side, public official is provided with the possibility to comply with the law and thus to avoid any dilemmas or misunderstandings when accepting gifts within protocol, diplomatic or other events. With such an intention, the quoted provisions regulate a precise procedure for reporting conduct regarding any gift and managing the gifts as well as the supervision of the Commission in this field. If the Commission establishes that a state body, local government or a public official accepted a gift, which has an impact or might have an impact on legality, objectivity or impartiality of exercising a public function, such a gift is to become state ownership. 

REPORTS ON INCOMES AND ASSETS (art. 20 to 22)

Provision in the law regulate supervision over property of public officials, through submitting a Disclosure form as a precondition for publicity and honesty in exercising a public function and naturally an integral part of the integrity of exercising such a function. The experience has shown that the first and simplest way to misuse official duties is to obtain various forms of fees and incomes on top of one’s salary and therefore all of these have to be registered. This also includes the incomes from academic, educational, and cultural activities. Rules of conduct for public officials and competences of the Commission in performing the supervision over the property of public officials, type and scope of data related to property that a public official has to disclose in the Disclosure form he submits are listed in the Draft Law.  

PROCEDURE (art. 23 to 40)

In comparison to the solutions contained in the current Law, the Draft defines more precisely the rules for conducting the procedure before the Commission for establishing the existence of conflict of interests, when the Commission decides about rights and obligations of public officials, connected persons and other legal and physical persons, referring to the application and enforcement of the law. There is a provision that defines a procedure in the case when a public official has a doubt that he/she is in the situation with a presence of conflict of interests or other mode of law breeching. Public official in the mandate or a public official whose service has ended has a right and obligation to report to the Commission a doubt of the existence of conflict of interests, i.e. to ask for the opinion on the existence of conflict of interests which the Commission is obliged to give within the time defined by the public official. Thus, a clear difference has been made between the submission of request of the public official for the opinion on the existence of a conflict of interests and making decision upon the initiative of launching the procedure for determining the breeching of provisions of this law.  

An important novelty in comparison to the currently valid legal solutions is the provision stipulating that the request of the public official for the opinion (when there is a doubt of the presence of the conflict of interests) has a confidential nature, so that this opinion will be published only if the public official does not act according to the Commission’s opinion.

 The Draft Law defines the procedure of deciding whether there is the breech of provisions of this law, which can be launched 1) upon the Commission’s own initiative, 2) upon the initiative of a state authority where the public official does his/her public function, 3) upon the initiative of the state body authorized for the election and appointing of the public official, 4) state or municipality body, 5) other legal or physical person.       

Provisions define the contents of the request for establishing conflict of interests, procedure upon such a request, statement of the public official, establishing facts and circumstances, public hearing, confidentiality of the procedure, statement of the applicant before the Commission and delivering the writs to the Commission.  

The Commission brings decision on its session, establishing whether has the public official violated provisions of this law by his/her acts, deeds or no doing, without a presence of participants of the procedure or the public, not later than 15 days from the end of the procedure, carried out in line with this law. The public official can submit a request for the reconsideration of this decision within eight days.  

 An important novelty in comparison to the currently valid legal solutions is the provision of the Article 39 of the Draft Law defining legal effects of the final decisions of the Commission, which ensures the enforcement of the Commission’s decision execution, because the violation of the provisions of this Law is considered to be the unconscientious exercising of the public function. The Commission informs the authority the public official exercises his public function in and the authority in charge of election i.e. appointment of the public official so that they can initiate the procedure of dismissal if applicable. Proposals of dismissal, prohibition from running any candidacy for public function in the period of four years and prohibition from working in public bodies, particularly the prohibition from running any candidacy are forms of „exposing“the public official to the public, since it is the publicity that is the condition without which a public function cannot be exercised and it can imply the termination of exercising a public function. If the Commission, in any stage of the procedure, has doubts that a public official committed a crime, it will without any delays submit a report to the competent State Prosecutor, which is the solution taken from the current Law. 

COMMISSION (art. 41 to 49)

Draft Law defines that the procedure for establishing conflict of interests is conducted by the Commission in line with the standards of profession. Openness of the organization, position, and independence of the Commission as an anti-corruption body in the state system, according to the Draft Law, is guaranteed by the procedure of appointment and dismissal of its members. The tasks and competences of the Commission are defines as well, whereby some of the tasks are identical to the current tasks of the Commission. One of the new tasks, particularly worth mentioning is giving opinion in case of a doubt that an appointment of a public official to a new function is inappropriate, and passing of a decision in case of a doubt that there is a conflict of interest.  

The provisions define the composition and the position of the Commission members with detailed conditions for the election and the seizure of duties in the Commission. In relation to the presently valid legal solutions, the law stipulates that the Chairman of the Commission does his/her function professionally and is entitled to the income provided for the protector of human rights and freedoms, and that members of the Commission are entitled to the fee determined by the working body of the Parliament, thus enforcing de facto state. There is also an obligation of training the staff for performing expert and administrative work run by the Secretary, as well as the act on the internal organization and systematization of the professional service brought by the Commission with the previous opinion of the authorised working body of the Parliament of Montenegro. Rights of the employees of the expert service, position and status of the Chairman and members of the Commission have so far been regulated by the Rules of Procedure of the Commission, instead by the law, so that the Draft Law has bees harmonized with the Constitution and system laws (the Law on the General Administrative Procedure, the Law on Incomes, the Law on Public Servants and Employees).    

The Draft Law also defines collection and protection of personal data. Precise definition of this issue is of extreme importance, because these are very sensitive situations in which improper use of data can cause serious consequences to the detriment of the rights and personal dignity of a public official. On the other side, publishing these data has to be proportionate to the need to prevent and deter corruptive behaviours as well as to establish integrity in public sector and it supports the prohibitions defined by this Law. 

PENALTY PROVISIONS (art. 50 to 52)

As a novelty this Draft introduces fines for violations in the amount defined by the law. Fine is a sort of borderline for the public officials that do not comply with the provisions of this Law. To cross that borderline means to be exposed to the court and to the public. In this way, the Law provides for the regional misdemeanour body to impose fines on basis of the decision of the Commission, which also ensures the enforcement of the sanctions according to the current misdemeanour legislation. It can be expected that due to the modified manner of sanctioning, public officials will mostly comply with the provisions of this Law, as well as that the procedures before the Commission will be extremely rare. Legal protection in terms of a guaranteed legal redress is possible within judiciary. Since these are public officials, namely, as well as the highest state officials, their rights should and can be protected by the body which is independent and which has the authority in protection of human rights.  

TRANSITIONAL AND FINAL PROVISIONS (art. 53 to 59)

These provisions define coming into effect of the Law and cessation of the effect of the previous Law as well as the transitional solutions ensuring the continuity in the work of the Commission until the appointment of the new Commission for Establishing Conflict of Interests. 

IV COMPLIANCE WITH THE EUROPEAN UNION LEGISLATION

There are no corresponding EU regulations in this area, except the Council of Europe Criminal Law Convention on Corruption signed on 27 January 1999 in Strasburg/ 91999JHA10302;
The law is harmonized with the United Nations Convention against corruption, adopted in New York 31.10.2003; 92000JHA10003UN Convention against Transnational Organized Crime, Palermo 12-25 December 2002.  

V ASSESSMENT OF THE NECESSARY BUDGETARY FUNDS
FOR THE IMPLEMENTATION OF THIS LAW 

No special financial recourses for the Budget of Montenegro are necessary for the implementation of this law.