Restrictions on real estate trading for Russians in Montenegroenegro

According to the Real Estate Administration, Russian citizens are owners or co-owners of about19,000 properties and nearly four million square meters of land in Montenegro. These are the first official data since2006, when Russians began buying real estate en masse after Montenegro gained independence. The data was provided by the Real Estate Administration to the magazine Pobjeda..

More than98 percent of real estate is located in coastal cities along the300-kilometer Montenegrin coast, where there are over a hundred beaches. Most of the real estate is located in Budva and Bar.

Russian citizens we spoke to in Montenegro rarely talk about the financial problems caused by the sanctions imposed due to Russia's invasion of Ukraine on February24th of this year. Alexey Abazovich announced new sanctions against Russia during a conversation with Escobar. Montenegro has closed its airspace to Russian planes. Olga from Moscow, who is permanently residing in Bar, tells RSE that she does not currently feel the effects of the sanctions, but they are affecting her work. "I lost two already agreed contracts for the sale with Russian clients, because the banking turnover between Russia and other countries has been suspended, and clients cannot pay from their Russian accounts," says Olga, a real estate intermediary.

It is unknown what the total value of Russian real estate in Montenegro is, and whether it is linked to oligarchs close to Russian President Vladimir Putin, whose assets are being frozen under Western sanctions due to the invasion of Ukraine. Despite the fact that Zdravko Krivokapic's government formally supported sanctions against Russia, it has not yet officially made a decision on sanctions, even though Montenegro has been coordinating its foreign policy with the European Union for the past ten years.

Do Russians fear for their real estate in Montenegro??

The majority of real estateagency owners we contacted could not confirm that some Russian citizens are trying to "rewrite" their property to Montenegrin citizens out of fear of a new round of sanctions. Sasha Vukicevic from Montenegro Prospects agency tells Radio Free Europe (RFE) that so far there are only isolated cases of Russians considering a "quick sale" of their property, due to false news they read on social media about freezing of Russian assets in Montenegro. Russians are the most numerous clients for real estate in Montenegro. Russian properties in Montenegro are for sale. As an example, he cites one Russian social network where unreliable information about the freezing of Russian assets in Montenegro was published last week. He adds that in this whirlpool of misinformation, it is difficult to understand, and that some, succumbing to such false news, turn to real estate agents. "The biggest fear of property owners from Russia who contact us is that their property will be frozen, they will not be able to dispose of it, and even in extreme cases they say: 'My property will be seized in Montenegro.' It would be good if official authorities issued statements informing people that their personal property is safe and no one will take it," says Vukicevic.

** In the real estate market in Montenegro, where Russians have been one of the most numerous buyers for many years, the situation is currently uncertain due to the war in Ukraine and sanctions against Russia, explains Vukicevic.

Problems with Russian bank cards

**Nearly a quarter of our Russian clients, says Vukicevic, who were planning to sell their real estate, are now backing out of this idea, partly because they believe it would be more advantageous to keep it as a living option for their family, and also due to sanctions that have disrupted global banking transactions between Russia and other countries. One of the harshest measures of sanctions imposed by the European Union, the United States, and Canada against Russia for military aggression in Ukraine is the blocking of access to the SWIFT system for certain Russian banks.

At the Montenegro Prospect agency, they explain that due to the cessation of bank transfers, Russian citizens who want to sell their property are forced to think about where to receive their money and how to manage it.

Non-residents who own property in Montenegro, have employment, or close family ties with Montenegrin citizens can open private bank accounts. Additionally, banks do not have a fully agreed-upon procedure and require extra documents. People who have arrived in Montenegro from Russia in the last month are facing difficulties opening a bank account because they need to have property in Montenegro, establish a company, and resolve their residency status, says Marat Guelman, an artist and dissident who has been living in Budva for seven years.

Rich Russians in Montenegro

When asked if he knows of any examples of some Russians transferring their property to others out of fear for their assets due to sanctions, Guelman responds negatively. "I don't know of such cases. We know that some people under sanctions own real estate in Montenegro, but I don't personally know them," Guelman concludes.

Rich Russians mainly own real estate in luxurious residential complexes such as Porto Montenegro in Tivat, Zavala in Budva, Portonovi, and Luštica Bay in Herceg Novi. Russian oligarch Oleg Deripaska has owned land at Cape Platamuni in the Kotor municipality since 2005, where his company Overseas Assets Management built a luxury complex consisting of two large villas and a dozen smaller ones, in which he invested about 50 million euros. The Attorney General of Moscow, appointed by a personal decree from Putin, Denis Popov, also owns property in Montenegro. According to data obtained by RSE from the Montenegro Property Administration, a building of 296 square meters with apartments and 700 square meters of land in the Bay of Kotor is registered under the name of Denis Popov's wife's company, Monte Biser. The company also owns three luxury properties and 8,000 square meters of land near the ski resort of Jezerine, north of Podgorica. Neither Deripaska nor Popov are subject to existing sanctions.

On what grounds do Russians obtain citizenship in Montenegro?

Russians were the main recipients of economic citizenship, which offers numerous advantages, including the ability to own real estate and bank accounts, and is granted to individuals investing between 250,000 and 450,000 euros in Montenegro. From the end of 2020 until mid-February of this year, the outgoing government of Zdravko Krivokapić issued a total of 315 honorary citizenships. Of this number, 291 were granted based on economic interest, with 190 going to Russians, according to the Center for Civil Education of RSE. The government did this despite calls from the European Commission to cancel this program. It is unknown whether any of those individuals are on the EU and US blacklists.

Relations between Montenegro and Russia

After declaring independence in 2006, Montenegro had good relations with Russia until 2014, when it joined the sanctions imposed by Brussels against Moscow due to the annexation of Crimea, following the foreign policy course of the EU. Relations further deteriorated after Montenegro became a member of NATO in 2017, which led Russia to sharply criticize the then-government of Montenegro, especially President Milo Đukanović. There are about two and a half thousand Ukrainians living in Montenegro, while the number of Russians is several times higher.