The Agreement on Cooperation in Tourism and Real Estate Development between the Governments of Montenegro and the United Arab Emirates (UAE) raises important questions regarding adherence to the Constitution, the Law on Protection of Competition, and the Law on State Property. Competent institutions must address these concerns, as well as consider its potential impact on Montenegro’s EU accession process.

This insight was shared with “Vijesti” by the country’s President, Jakov Milatovic, who expressed his enthusiasm for investments and the significance of enhancing economic ties with countries, particularly the UAE.

Last week, Montenegro and the UAE signed agreements on economic collaboration and joint investments during a ceremony at the presidential palace in Abu Dhabi.

The Montenegrin Prime Minister Milojko Spajic and the UAE’s Deputy Prime Minister and Minister of Foreign Affairs, Sheikh Abdullah Bin Zayed Al Nahyan, with the presence of President Sheikh Mohammed bin Zayed Al Nahyan, signed the agreements.

“Montenegro holds immense potential for development—natural, social, and economic. It is our responsibility to leverage this for the benefit of our citizens and future generations. I am committed to all initiatives that foster sustainable economic growth. Since my tenure began, I have emphasized promoting Montenegro as an attractive, safe destination. I welcome investments that create jobs and bolster our economy. Therefore, enhancing economic cooperation with countries like the UAE, with whom we share strong bilateral relations, is vital,” Milatović stated.

Regarding the Agreement on Cooperation in Tourism and Real Estate Development, Milatović pointed out that several critical questions must be answered by relevant institutions.

“Article 3a of the Agreement with the UAE allows exceptions to domestic laws concerning public procurement, tenders, and competition processes. In contrast, Article 140, paragraph 3 of Montenegro’s Constitution bans any practices that distort free competition or create a monopolistic market position, raising valid concerns about the Agreement’s compatibility with the Constitution. It’s important to note that this cooperation does not pertain to defense or national security, but rather to tourism and real estate—areas grounded on principles of free competition, which challenges the direct negotiation model for investor selection outlined in the Agreement. Additionally, there are questions about whether these provisions conflict with the Law on Protection of Competition,” Milatović elaborated.

He emphasized that state property is integral to national sovereignty, belonging to all citizens now and in the future, and that its management must adhere to stringent control mechanisms as defined by the Law on State Property.

“According to Article 40 of the Law on State Property, leasing state assets through direct negotiations—such as this Agreement—should only occur if previous attempts at public tender or bids have failed after three consecutive calls,” Milatović remarked.

Potential issues include the Agreement’s possible inconsistency with the Stabilization and Association Agreement (SAA) between Montenegro and the EU, which forms the essential contractual relationship with the EU and its member states.

“As per the SAA, state aid that distorts market competition by favoring one participant is prohibited. Montenegro must also ensure non-discriminatory terms for domestic and EU firms in awarding state contracts. This begs the question of whether this Agreement could hinder Montenegro’s EU accession efforts,” Milatović highlighted.

He stressed the importance of accountability among decision-makers, particularly at this juncture when significant choices are being made regarding Montenegro’s future.

“Every decision made must be grounded in legality, transparency, and a long-term development vision for Montenegro’s path as a prospective EU member. Considering these factors, I urge the relevant authorities to clarify any public uncertainties surrounding the Agreement,” Milatović urged.

Montenegro Commits to Unforeseen Costs in Advance

Milatović indicated that the Agreement with the UAE imposes unknown financial burdens on Montenegro that might exceed its fiscal capacity and are not integrated into the medium-term financial framework, as previously mentioned by the Ministry of Finance.

“The Agreement requires Montenegro to designate land and invest in necessary public infrastructure for the UAE’s project contractor. Thus, it is crucial to attain a clear understanding of the commitments related to land provision and public infrastructure investments.

“In this critical period for Montenegro’s direction, it is imperative to acknowledge the weight of decision-makers’ responsibilities. Each decision must align with legality, transparency, and a strategic vision for Montenegro’s development as a future EU member,” Milatović reiterated.

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