Home NewsTechnology Montenegro’s ban on electronic payments raises concerns for industry

Montenegro’s ban on electronic payments raises concerns for industry

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The gambling industry in Montenegro is concerned about proposed amendments to the gambling laws which would prohibit the use of electronic payments. Montenegro Bet’s Jovana Klisic said that the gambling industry was “at a forkroads”.

With the amendment of Article 68f in Montenegro’s gambling laws, a number of electronic payment options, including ebanking, mobile payments and online banking, will be disabled for depositing funds into betting accounts.

Montenegro bettors now have two choices if they want to place a bet on the internet. The players can go to a betting store and make a cash bet, which will then transfer online funds onto their account. Players can also pay with a card but this is only possible on terminals in betting shops.

Gambling companies are concerned about the impact of the new amendment on their business. In just five days, a petition to stop the amendment received around 8% (25,000) of Montenegrin voters.

Jovana Klisic is a representative from the Montenegrin association Montenegro Bet. She has criticised the impact of the possible job loss on those in the gambling industry, saying that the sector was “at a forkroad”.

Klisic states that “the sector employs almost 2% directly and indirectly of the workforce, in an environment with a 15% rate of unemployment. Any negative impact could have harmful and wide-reaching effects.”

The removal of electronic banking and newsagents as deposit methods, despite compliance and transparency of both, affects not only operational efficiency, but also puts jobs at risk, echoing negative effects of the wider economy in Montenegro.


Conflicts between EU law and

Critics of the changes point out contradictions between eu laws

The opposition has a strong reaction to these amendments, claiming that they are in conflict with EU law. Montenegro may not be in the EU at the moment, but recent polls show that the majority of the country is pro-EU. It is one of several countries that are vying to join the EU within the next few years.

Klisic listed five EU-wide legal provisions with which the proposed amendments are in conflict. Article 72 from the Montenegro EU Stabilisation and Association Agreement is one of them. Article 72 of the Montenegro-EU Stabilisation and Association Agreement mandates countries seeking to join the EU alignment with the union in certain aspects.

Klisic says that the change is also in contradiction with Payment Services Directive. This directive aims to create an integrated electronic payment market. These provisions are also in conflict with EU 4/5AML directives, which classify cash transactions as high-risk.

Klisic claims that the new law “inadequately” addresses the money laundering threat. Money laundering can be done with smaller amounts of cash.


Montenegro’s provisions are in conflict with EU’s introduction of eIDs

The EU, however, is looking at a method of electronic identification that will be standardised and called “European Digital Identity (e-ID)”.

This would require EU member states to provide an eID to their citizens. They could then authenticate themselves for services like online gambling.

Klisic called Montenegro’s decision to restrict electronic payments “outliers” in global trends.

Moneyval (Financial Action Task Force) and other bodies such as the FATF have advocated electronic payment systems to reduce cash payments.

The global financial community embraces digital solutions because of their efficiency and transparency. Montenegro is therefore isolated from EU practice, but also the direction of global financial community, by Montenegro’s decision.

The European Commission has urged Montenegro in 2021 to increase its efforts against money laundering. The move away from online payment could result in the country falling into a group of countries at higher risk for money laundering and terrorist financing.

These provisions are also in conflict with European Banking Authority (EBA), which has called for all EU citizens, and those from countries that want to become part of the EU to be able to access online banking. Klisic claims that the changes to Article 68f are in conflict with the EU’s “stance on financial inclusion”.

Klisic said, “We see the communication crisis in Montenegro as a chance to align Montenegro’s financial practices with EU standards.” It’s more than just rewriting a law.

It’s all about making sure that Montenegro has a financial and regulatory structure which is beneficial to a fair, competitive and transparent industry.


Industry’s Response

Montenegro Bet now has submitted the petition before the assembly of the country. Montenegro Bet has initiated constitutional reforms, raising concerns about the inconstitutionality.

Montenegro Bet also works with international organizations to bring attention to negative effects of law changes. Montenegro Bet also wants to draw attention to the fact that the law changes are in contradiction with EU directives.

Klisic hopes that the support shown by the public in the form of the petition can lead to an end to these changes.

This remarkable public support not only highlights widespread concerns but also illustrates the risk of job losses that could occur in our industry. It shows the economic implications of these legislative measures,” Klisic continued.

Our overarching goal is to align Montenegro’s regulatory framework both with EU and global financial standards, in order to ensure a fair and transparent industry.

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