The United Arab Emirates (UAE) is included in the European Union’s (EU) grey list of high-risk third countries due to concerns regarding money laundering and terrorist financing. This situation necessitates caution from Montenegro regarding the two agreements it has finalized with the UAE.

This assessment was made during a conversation with an anti-corruption expert from Transparency International (TI), Eka Rostomashvili, as reported by the Center for Investigative Journalism of Montenegro (CIN-CG).

“Given the weak controls over the source of funds in the UAE—which has led to its listing as a high-risk jurisdiction by the EU—it is reasonable to question whether investments flowing into Montenegro are legitimate, meaning that they originate from lawful pursuits,” states Rostomashvili.

The expert explains that the UAE has a significant journey ahead to make its financial system robust against global money laundering practices.

“If Montenegro’s approach to agreements with the UAE is lenient or lacks regulation, it will be justified to suspect that the funds from the UAE are not legitimate,” says Rostomashvili.

TI has been tracking money movements in the UAE for an extended period.

“Numerous inquiries reveal that the UAE serves as a refuge for illicit funds worldwide, including money from corrupt officials, drug traffickers, fraudsters, and more,” the expert elaborates.

According to Rostomashvili, among the seven emirates, Dubai is frequently highlighted as a hub of illicit funds and various scandals, including gold smuggling from conflict zones in Africa and financing terrorist organizations such as Al-Qaeda and ISIS, along with harboring notorious criminal syndicates.

“Patterns have emerged showing that real estate investments are utilized as a method to launder profits derived from financial crimes, including drug trafficking,” Rostomashvili notes.

Recently ratified by the Montenegrin Parliament, the two agreements between the Government of Montenegro and the UAE—namely the Agreement on Economic Cooperation and the Agreement on Cooperation in Tourism and Real Estate Development—have raised alarms among opposition members, civil society, experts, and even the European Union, warning of potential harm to the nation’s competitiveness and transparency. The Agreement on Cooperation in Tourism and Real Estate Development has not received ratification from President Jakov Milatović, necessitating a second parliamentary vote. Meanwhile, the Government has announced an additional agreement with the UAE in the energy sector, which holds strategic importance for Montenegro.

ON MONTENEGRO’S GREY LIST, REMOVED IN 2024.

Despite Montenegro’s commitment to align its regulations with those of the EU, the UAE was recently removed from our List of High-Risk Third Countries, a record that the Financial Intelligence Unit of the Police Administration (UP) must maintain under the Montenegrin Law on Preventing Money Laundering and Financing of Terrorism.

The UAE remained on that list from 2022 to 2024. Concurrently, it was also featured on the grey list of the Financial Action Task Force (FATF), but despite numerous flags raised by Transparency International, the UAE was delisted from the FATF grey list last year.

“Montenegro formulates its list of high-risk third countries informed by the FATF black and grey lists, which are refreshed thrice annually,” stated the Financial Intelligence Unit of the Police Directorate (UP) to CIN-CG.

The UP further remarked that “Montenegro rigorously applies the same criteria as EU member states in terms of ‘caution towards individual nations’.”

However, when CIN-CG inquired why the UAE does not appear on Montenegro’s list, even though it remains on the EU’s record of suspicious third countries, and whether any particular precautions would be instituted in light of the recent agreements, the UP refrained from providing a response.

A CIN-CG source from Transparency International clarified that the EU’s list holds greater significance than that of the FATF. “When a nation is placed on the FATF list, it’s mostly a reputational concern with potential indirect consequences. On the other hand, if the EU places a country on the grey list, it brings tangible outcomes—prompting investigations into all suspicious transactions and possibly halting them,” explains Rostomashvili.

The EU’s list of risky nations includes 24 others from Asia, Africa, Oceania, and South America. Financial institutions are mandated by the EU to exercise enhanced vigilance when dealing with all these countries.

BUSINESS IN MONTENEGRO AND THE UAE

Since gaining independence until the end of 2024, the UAE ranks as the eighth-largest foreign direct investment (FDI) contributor to Montenegro, which also encompasses investments in Montenegrin enterprises. Last year, it was the seventh largest FDI investor in the nation.

Funds also flow from Montenegro to the UAE. In 2024, the UAE emerged as the third largest source of fund outflows from Montenegro internationally.

UAE investors have a significant presence in Montenegro’s tourism and energy sectors, including notable entities like the Abu Dhabi Capital Group, managing the Capital Plaza center; the Dubai Investment Fund (ICD), owner of Porto Montenegro; and Masdar Energy B. V, operating the Krnovo wind farm, ultimately owned by the Abu Dhabi National Oil Company, as informed by CIN-CG’s Investment Agency of Montenegro (MIA). Additionally, a consortium led by PM Holdings LLC, including the ICD and Drydocks World Dubai, oversees the Adriatic 42 project, dedicated to mega yacht repair and maintenance in Bijela’s former shipyard. CIN-CG lacks information suggesting that these investments are sourced from illegal origins.

According to the Revenue and Customs Administration, 76 companies in Montenegro have founders from the UAE, the latest being “Eagle Hills Montenegro,” owned by UAE businessman Mohamed Alabar, who has ambitious plans to develop grand projects in Velika Plaza and other prime areas in Montenegro after signing the agreement with the UAE and has been visiting frequently in the past few weeks.

Even during the tenure of the Democratic Party of Socialists (DPS) under Milo Đukanović, Montenegro established robust connections with the UAE. One of the prominent foreign business figures in Montenegro, Greek entrepreneur Petros Statis, operates an investment firm registered in the UAE, Monterock International.

Statis arrived in Montenegro in the early 2000s. His firm, Adriatic Properties, currently holds the lease for the Sveti Stefan – Miločer hotel complex, part of the Aman Resorts chain.

Additionally, Statis is the majority stakeholder of Universal Capital bank and the owner of two Montenegrin news portals, Analitika and CDM, as well as the newspaper Pobjeda.

Statis’s Monterock International, as per their website, owns numerous luxury hotels and restaurants worldwide, inclusive of the Nammos, Amman, One&Only chains, and Ce La Vi sky bars, with several properties listed in Montenegro’s prime locales, both coastal and in Durmitor. The firm is also engaged in other projects like green energy production.

Former associate of ex-President Milo Đukanović, Ratko Knezevic, asserted that Đukanović and his son, Milder, are the true owners of Monterock, claiming that through Statis and an offshore Seychelles company, they possess Aman Resorts in Sveti Stefan and Venice. Knežević contends that this venture is part of the “empire” Đukanović has been clandestinely accumulating since 1999.

“In reference to your inquiries concerning former Montenegrin President Milo Đukanović, regarding claims from the source you mentioned, we can unequivocally state that these are unfounded,” stated the former President’s Office in response to CIN-CG’s questions.

Statis also refuted any business affiliations with Đukanović, asserting, “I categorically declare that I have never engaged in any financial or business affiliations, nor shared ownership in any entity with Mr. Milo Đukanović, the former president and prime minister of Montenegro, regarding Monterock International or associated firms.” Statis insisted that all his business dealings are conducted in a transparent and lawful manner.

MANS reported in 2021 that Đukanović and his son Blažo possess a network of offshore companies across various tax havens. They discovered that through a British Virgin Islands company called Victoria Trust, a law firm named Alcogal, allegedly managing Đukanović’s offshore interests, had sought to establish a subsidiary of Victoria Trust in the UAE. Yet, due to the lack of accessible company registries in the UAE, verifying the registration of the company associated with the Đukanovićs proved impossible.

Đukanović himself has highlighted his close relations with UAE leaders, frequently visiting during his rule. He built ties with the Al Nahyan royal family and other rulers, including Mohammed Al Maktoum.

Earlier reports suggested that Đukanović had connections to the UAE’s ruling elite through the controversial Palestinian figure, Mohamed Dahlan, who obtained Montenegrin citizenship and held various positions in Montenegro.

After one of Đukanović’s visits to the Emirates in 2008, significant projects were proposed for areas like Velika Plaza, Valdanos, and Buljarica, while Montenegrin agriculture received loans from the Abu Dhabi Fund, some of which are now under judicial scrutiny.

The UAE’s influence extends regionally, as evidenced by the contentious mega project “Belgrade on the Water” in Serbia, which has yielded considerable profits for investors with minimal benefits to the state. Allegations have surfaced suggesting that Đukanović and Dahlan were instrumental in attracting Arab investors to Belgrade. An image featuring Mohamed Dahlan, Milo Đukanović, and Aleksandar Vučić has circulated in various regional media outlets.

In a 2016 meeting in Tivat with Dubai’s Emir Mohammed Al Maktoum, Đukanović pledged incentives for investors from the Emirates. Additional benefits were also promised under the recently concluded agreements with the UAE by Montenegro’s new Prime Minister Milojko Spajić, who has emphasized his commitment to transparency and European practices to combat corruption and malpractices originating from the DPS era. Following backlash concerning the agreements with the UAE, Prime Minister Spajić reiterated that measures against money laundering would be enforced. “In terms of illicit funds, we have the Law on the Prevention of Money Laundering, enacted in November 2023,” he assured.

A HAVEN FOR THE POWERFUL

According to the Organized Crime and Corruption Reporting Project (OCCRP), Transparency International, and other respected organizations, Dubai has evolved into a refuge for criminals, despots, and those profiting from illicit funds due to a deficit in transparency and regulatory oversight in recent decades.

MANS reports that the UAE operates 39 different company registries, most of which remain inaccessible, and public registries frequently lack information about actual owners, listing only formal representatives, whose purpose is to mask the identity of true owners. This obscurity complicates the verification of who is genuinely behind investments originating from the UAE.

The British Tax Justice Network designates the UAE as the eighth most opaque jurisdiction concerning financial data. The organization indicates that the UAE is among the jurisdictions most prone to facilitating tax evasion for companies globally.

The OCCRP has published numerous investigations showing how Dubai has succeeded in becoming one of the leading locales for laundering money from various global addresses. Their investigation, based on leaked property ownership databases in the UAE, discloses that numerous criminals, politicians, and entrepreneurs, including former Nigerian Vice President Atiku Abubakar, who owns properties worth $4.8 million in the UAE, have settled there. Additionally, several Armenian politicians, including Garik Beglaryan—a former high-ranking official facing 27 money laundering allegations in Armenia—find refuge in Dubai alongside controversial Russian oligarch Dimitry Rybolovlev and the alleged Irish drug cartel leader Daniel Kinahan.

Experts opine that Dubai’s current level of development would not have been attainable without the authorities permitting the influx of questionable funds into the framework. Today’s geographical advantages combined with government support for dubious businesses render Dubai an ideal destination for those seeking to launder money, evade taxes, circumvent sanctions, or conceal wealth from competent authorities in their home nations, according to OCCRP.

As per a New World Wealth study, the UAE is a highly sought-after destination for millionaires globally. In 2017 alone, approximately 5,000 foreign millionaires chose Dubai for investment opportunities. The array of services available includes money laundering through a non-transparent banking system, the acquisition of luxury real estate, trading in gems, gold, and minerals, cash transfers free from regulatory oversight, transactions in free zones that allow smugglers to bypass tariffs and tax obligations, and more. The United Nations warns that a significant volume of gold smuggled from Africa heads to Dubai, particularly from conflict-afflicted nations.

Nonetheless, in recent years the UAE has initiated steps to enhance its legal framework. The FATF removed it from its grey list last year, but Transparency International cautioned that there remains inadequate evidence to indicate that the nation has notably improved its regulations.

In April 2024, the European Parliament (EP) voted to retain the UAE on the high-risk countries list, despite intense lobbying efforts by the UAE for its removal. The EP stated that the UAE will remain on the list until it can convincingly demonstrate “the implementation and enforcement of measures against money laundering and terrorist financing” and remarked that maintaining the UAE on the grey list sends a strong message to countries that facilitate sanctions evasion, arms trafficking, and the trade of gold from conflict-ridden regions.

Despite the challenges faced, negotiations for a free trade agreement between the EU and the UAE have commenced, albeit contingent upon meeting certain conditions for signing.

INADEQUATE MEASURES AGAINST MONEY LAUNDERING

Last year, the Council of Europe’s anti-money laundering agency, Moneyval, alerted Montenegro that it must bolster its measures against money laundering and terrorist financing. Moneyval found that while understanding of the risks and threats leading to illegal financial activities remains limited, investigations and prosecutions for money laundering are scarce, necessitating improved cross-border monitoring of financial flows.

In terms of terrorist financing, Montenegro faces technological deficiencies and, outside the banking sector, lacks comprehensive understanding and effective implementation of money laundering prevention strategies. The real estate, casino, and accounting sectors, in particular, are struggling to grasp these risks.

Montenegro narrowly avoided placement on the FATF list at the close of 2023. Experts have long warned that Montenegro’s tax policies are not progressive. The Organization for Economic Cooperation and Development (OECD) blacklisted Montenegro in July 2024, marking it as a jurisdiction not meeting international tax transparency standards—this decision came about as Montenegro failed to initiate automatic information exchanges among tax authorities, which was expected to be implemented by the end of 2023.

Beyond this system, Montenegro was also supposed to establish a dedicated unit to combat tax fraud.

The lack of transparency regarding money flows deters credible international investors and fosters unchecked growth in the shadow economy, further favoring investors hailing from non-democratic nations, a concern that CIN-CG has previously addressed.

“In light of Montenegro’s aspirations for EU membership, ensuring compliance with this Agreement during execution with the EU acquis on public procurement is crucial,” remarked Marta Kos, the European Commissioner for Enlargement, in relation to the agreements with the UAE signed by Prime Minister Spajić. She emphasized that public procurement processes must be conducted without discrimination, maintaining equality and transparency.

REAL ESTATE WITH QUESTIONABLE OWNERSHIP

The core of the UAE’s money laundering system lies in its real estate market, which affords wealthy buyers complete anonymity, eschewing inquiries into the source of funds. The UAE’s Financial Intelligence Unit itself has flagged real estate investment in the nation as ideal for laundering money. An analysis released by the unit in 2023 disclosed various patterns indicating that drug proceeds are laundered through the banking and real estate sectors, with frequently cash-based transactions conducted by foreigners through shell companies or other dubious financial methods. While some instances are tied to organized crime rings, establishing a direct connection remains complex in many cases, as per the analysis.

In Transparency International’s Real Estate Ownership Transparency Index (OREO), published in March 2025, the UAE received one of the lowest rankings. Alarmingly, properties can be purchased without a clearly designated owner, without adequate risk controls against money laundering, and in cash, bypassing bank intervention that could facilitate verification of origins, according to the TI report.

In nearly all countries evaluated by the OREO Index, real estate firms are prohibited from conducting transactions unless the ultimate owner is identified; however, the UAE allows the deferral of such identification, thereby avoiding interruption of business activities.

According to CIN-CG sources, numerous Montenegrins, with substantial profits accumulated over recent decades, own properties in the UAE. Last year, MANS uncovered that Aleksandar Mijajlović serves as the director of the Bemax branch registered in Dubai and has been recognized for years as one of the owners of the local Bemax. The Special State Prosecutor’s Office has initiated an investigation against him for cigarette smuggling. Through a Dubai-based company, Bemax is undertaking the development of opulent complexes on St. Lucia, in the Caribbean, as claimed by MANS. The Dubai branch is listed at the address of a luxury apartment within the old town, but whether Mijajlović owns or rents the apartment remains unclear due to the lack of publicly available information.

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