Even after more than four and a half years, the Agency for the Protection of Competition (AZZK) has not made a decision on whether the state aid that the Municipality of Tivat, under pressure from the Government, gave to Adriatic Marinas-Porto Montenegro in 2018, was in compliance with the Law on State Control help.
This is a problem that can result in the legalization of the practice of any investor, referring to this case, requesting to be exempted from the obligation to pay duties to which all others in Montenegro are subject.
This examination procedure was opened in October 2019. Previously, in August 2018, Porto Montenegro was exempted from paying the fee for communal equipment of construction land in the amount of 5,6 million euros. The Agency did not deal with this case ex officio, but initiated the investigation after the EU Delegation in Montenegro approached it regarding this matter, considering the resolution of this case important for the further progress of Montenegro in the negotiations with the EU in Chapter 8 - protection of competition.
In the Decision opening the examination procedure, the Agency specified a deadline of 90 days to complete it.
They will notify the public when they have completed the work
"Vijesti" asked the Agency what stage this procedure is in and what has happened since November last year, when the oral hearing was concluded, attended by representatives of the Adriatic Marnas company and the Municipality of Tivat. It was answered that "The Agency carries out continuous activities within its jurisdiction through the examination procedure for determining the compliance of the potential state aid granted to "Adriatic Marinas", which is ongoing".
"The procedure obligates us not to comment on the actions we take during the investigation phase. When it comes to the decision in this case, the media and the public will be informed after its adoption, which is the practice of the Agency in all other cases, and all with the aim of complete transparency of the work of this institution", said the Agency.
There was no concrete answer to the question of what measures and actions AZZK has taken since then.
In the decision on the initiation of the investigation, the agency stated that the grant of 5,6 million euros to Porto Montenegro, which was supposed to belong to the budget of the Municipality of Tivat, was state aid to that company that brought Adriatic Marinas to a privileged position, and it left itself a deadline that after The Municipality of Tivat submits the additional requested documentation and makes a final decision on the legality of this transaction within 90 days, but it has not completed it to date. The recipient of the aid is one of the most important foreign investors in Montenegro, which was enabled by the former DPS-led governments to sign a series of contracts that in a certain way put it outside the current Montenegrin legal framework, which could lead Adriatiuc Marinas to perhaps initiate arbitration and sue Montenegro. Burning. If the Agency declares it a legal transaction, it could be the basis that all other investors present in Montenegro will use in the future as an argument in their requests to exempt them from the obligation to pay duties paid by all citizens and legal entities in Montenegro.
To the question why the Agency did not meet the deadline for the decision that it stated in the decision on the initiation of the investigation procedure, the answer was that "appreciating the complexity and volume of this case, we point to the fact that it is a multi-party administrative matter, the procedural actions that the Agency had to undertake, as and that the documentation required for decision-making was with various authorities at the local and state level".
Nothing was in dispute with Katnić
"These reasons affect the fact that the examination procedure takes longer, compared to the previous practice of the Agency when it comes to state aid control procedures. Please note that there is no reference period in comparative practice, nor a comparable case, in relation to which the "inefficiency and incompetence of the Agency" can be concluded when it comes to this examination procedure. It is conducted in accordance with the rules of administrative procedure and the regulations governing the area of control of state aid, whereby the Agency is guided by EC practice," said this institution.
The decision to forgive utilities was made by the former DPS-SD-HGI government of Tivat. At the end of 2017, 17 DPS councilors gave consent to sign the contract with Adriatic Marinas, which is building the elite nautical and tourist center Porto Montenegro, but the then mayor Snezana Matrijevic for half a year she refused to sign an arrangement whereby the city would give up 5,6 million of its income, doubting its legality. Under the pressure of his party - DPS and its leaders, the president of the state Milo Đukanović and the then prime minister Duško Marković who publicly demanded that the arrangement with Porto be signed as soon as possible. Matijević resigned in the summer of 2018. Her successor, Siniša Kusovac (DPS), not long after, put his signature on the arrangement and thus caused the city multi-million financial damage. The Special State Prosecutor's Office headed by the then Chief Special Prosecutor Milivoj Katnić never problematized this case.
Legal representative of the Municipality of Tivat in the proceedings before the Agency, lawyer Predrag Savic presented an argument in which he asserted that the manner in which this aid was given to Adriatic Marinas violated "several articles of the Law on Control of State Aid, but also Article 107 paragraph 3 point C of the Treaty on the Functioning of the European Union (TFEU), as well as all six criteria from announcement of the European Commission for regional state aid C(2021)2594, which was also accepted as part of the domicile legislation in the process of controlling the legality of state aid in Montenegro."
Savić, pointing to the practice of the European Court in Strasbourg and Decision EK2017/1283, which declared state aid to the Irish company Apple in the form of tax breaks worth almost 13 billion euros illegal and Apple is obliged to return that money to the Irish state, asked the Agency to establish that and in the case of the forgiveness of utilities by the Municipality of Tivat to Porto Montenegro, it was about illegal state aid, and that the Agency obliges Porto Montenegro to return 5,6 million euros to the local government.
They may be declared incompetent for this case
According to the unofficial information of "Vijesti", the Agency should finish this examination procedure by the end of the second quarter of this year (April-June) at the latest, and there is also a decision to declare the Agency incompetent for this case.
According to well-informed "Vijesti" sources, this could be the outcome in which the Agency would try to avoid responsibility and official duty, because it would invoke its alleged incompetence to assess the legality of the procedure, which basically derives its genesis from the contract between the state and the then of the owner of Adriatic marinas, the company PM Securities from Barbados from 2006 on the purchase and investment in the former military shipyard Arsenal in Tivat.
That contract was signed before the establishment of the Agency and the entry into force of the Law on the Control of State Aid, so by referring to it and declaring itself incompetent, AZZK would have avoided another possible serious consequence of its eventual final decision in this procedure - if that contract from 2006 which was signed by then Prime Minister Milo Đukanović (DPS) and a Canadian businessman Peter Munk was unconstitutional and illegal in relation to the then and now valid Montenegrin legal framework, and what would be clear if the AZZK declares illegal such a contract resulted from the million-dollar forgiveness of Porto Montenegro utilities by the Municipality of Tivat, and obliges that company to return that money to the local government.
The Agency initiated the examination procedure after being approached by the EU Delegation in Montenegro, considering the resolution of this case important for the further progress of Montenegro in the negotiations with the EU in Chapter 8 - protection of competition.
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