Restrictions on cash transactions in Montenegro

Montenegro has taken a significant step towards strengthening financial transparency by joining the group of countries that have restricted the use of cash in business transactions. This measure aims to prevent abuses such as money laundering and terrorist financing and is being implemented through amendments to the Law on the Prevention of Money Laundering and Terrorist Financing.

KEY LIMITATION: CASH UP TO 10,000€

According to Article 65 of the mentioned law, new rules are clearly defined for legal entities and individuals:

• Legal entities, entrepreneurs, and individuals conducting business activities are not allowed to receive or pay in cash any amount exceeding 10,000€. This also applies to several smaller transactions that cumulatively exceed 10,000€.
• For amounts over 10,000€, the transaction must be executed non-cash – via transfer of funds to a transaction account with a credit institution. Cash payments are not permitted in these cases.

WHO OVERSEES COMPLIANCE?

Compliance with these regulations is controlled by the government authority responsible for tax collection.

EXCEPTIONS AND PENALTIES

It is important to note that this restriction does not apply to credit institutions and payment service providers, who are subject to other regulatory rules and supervision.

For those who do not comply with these rules, the law provides for significant financial penalties – ranging from 3,000€ to 20,000€ for legal entities. There have also been announcements of potential tightening of penalties in the future to further discourage unlawful financial activities.

WHY ARE THESE MEASURES IMPORTANT?

By introducing such restrictions, Montenegro is aligning itself with modern European practices in the fight against money laundering. Limiting cash operations not only reduces the risk of money laundering but also contributes to greater safety and transparency within the financial system as a whole.