Developing the Accountancy Profession

Confronting Corruption in Montenegro

Igor Pavicevic | March 27, 2020

In recent years, the EU Commission has noted that high rates of corruption continue to persist in Montenegro and collaborative, institutional efforts to combat it must be increased. It is a pressing issue, especially considering the new EU Directive on whistleblowers protection. The new directive requires anti-corruption measures extend to all private and public sector organizations. Professional accountants are critical in this fight against corruption.

The Institute of Certified Accountants of Montenegro (ICAM) has a leading role in anti-corruption efforts and bolstering transparency in both the public and private sector. Our commitment to ethics and investigation & discipline of our members underpin all of our work in uncovering corruption.

We know, however, that not all public institutions in Montenegro are sufficiently aware of the important role that ICAM, and subsequently accountants and auditors, play in stemming corruption. To combat this misunderstanding, ICAM has launched new advocacy initiatives and extended our expertise to the Government of Montenegro to help shape national anti-corruption legislation and whistleblower protections that help fulfill the new EU Directive.

Bringing Montenegro’s Informal Economy into the Fold

With the effective passage of the latest EU Directive, some public institutions that have historically operated commercial businesses outside the legally established regulatory scope—with unrecorded sources of finance and revenue and untaxed income—now needed to brought in.

We’ve turned our attention to providing training to these organizations on international accountancy standards. This will help both publicize and harmonize available financial and tax information. It has also required extensive negotiations amongst regulators and institutions in search of the most appropriate framework.

ICAM’s expertise and knowledge of international accountancy best practices and the Financial Action Task Force guidelines facilitated the new policies now in place for these organizations. These policies will ultimately contribute to greater fiscal control and ensure compliance with applicable regulations.

Expanding & Improving Integrity Plans

The new EU Directive also requires creating reporting channels for companies with more than 50 employees so that employees utilize internal whistleblowing procedures before turning to external ones.

In Montenegro, all public sector entities already must develop and implement institutional Integrity Plans as per the Law on Anti-Corruption. Integrity Plans must report data on: organizational structure, risks and risks’ likelihood, severity of risks, potential consequences, and proposed mitigation for reducing or eliminating risks. They also include management and personnel policies, such as public procurement and other financial management and the proper procedures on data and document security.

ICAM intends to advocate for expanding Integrity Plans to cover all companies with more than 50 employees—private and public—as part of national and regional anti-corruption efforts. We also see an opportunity to improve Integrity Plans by introducing a section on detecting and mitigating risks, which professional accountants play a direct role in.

Advocate and Advisor

ICAM has successfully leveraged our position as an advisor and advocate to drive procedural legislative changes to further reduce corruption. For example, we’ve proposed that Montenegro’s Anti-Corruption Committee and Anti-Corruption Agency should be consulted prior to any related law being presented to parliament, which was agreed to. ICAM is also often involved in the consultation process, supporting initiatives to amend public procurement and criminal laws to hold individuals accountable, using our experience in investigating claims and supporting ethical conduct.

Our Journey to Change

None of these undertakings were without challenges. Rooting out corruption and protecting whistleblowers requires both legislative changes and cultural shifts. As in many European countries, Montenegro’s legal system is based on civil law which, generally speaking, means that all procedures and systems must be ratified and codified in official statues. This is different from common law systems, such as in the United States and Canada, where legislation is characterized by case law developed by judges through court decisions.

In practical terms, successful changes to Montenegrin laws require a great deal of advocacy and influence—and requires investments in time and resources from ICAM to meet with members of parliament and their staffs, staff and ministers from multiple departments, and encourage our membership to advocate locally.

ICAM also encountered hesitation from a small number of its members. Some of our members raised concerns about involving themselves in problematic issues, such as telling a state authority about suspicious money transfers or the risk of losing a client that continues to make timely payments even during an economic crisis. Some members were truly, and understandably, concerned for their safety (and the safety of their families) if asked to take a stronger stance in reporting fraud or money laundering. These are serious, real-life risks regarding our members’ livelihoods and well-being.

In the end, ICAM always relies on what makes the accountancy profession unique—our International Code of Ethics for Professional Accountants—and urged our members to remain consistent and steadfast in its implementation. ICAM and our members are committed to an overarching national objective of becoming an EU member and complying with EU legislation.

Our contributions do not rest solely on signing cooperation agreements with key stakeholders and assuming that they will then regulate themselves. This often leaves professional accountants as the “last line of defense” in protecting the public interest—which we see as a significant strategic mistake for PAOs.

Rather, we are committed to maintaining a persistence and urgency in addressing corruption and proactively seeking out opportunities and channels to realize initiatives. By doing this, we help to move the “defense line” up and create a business environment in which professional accountants can readily do their jobs. At ICAM, we ask ourselves—if this not our goal, then what is?


Igor Pavicevic

Igor Pavicevic, Secretary General of the Institute of Certified Accountants of Montenegro

Mr. Igor Pavicevic is, since 2010, Head of ICAM. Under his leadership, ICAM became an IFAC Associate in 2011 and an IFAC Member in 2017. Mr. Pavicevic is Certified Auditor, Forensic Accountant and Certified Appraiser. Since 2014, he is the President of ICAM’s Investigative Committee. Since 2015, he is a member of Open Government Partnership for Areas Enhancement of Public Integrity and Efficient Management of Public Resources. Since 2012, he is a member of Working Group for negotiation Chapter 6 – Corporate Law in EU accession process.


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