A Russian man buys real estate in Montenegro.

The sanctions on the Russian banking system have significantly reduced the number of Russians buying real estate in Montenegro, said the agency "Montenegro Prospects", which has been dealing with this market for many years.

In view of the invasion of Ukraine, the European Union (EU) has imposed sanctions on Russia, including a ban on financial transactions with key Russian banks, which also applies in Montenegro, which aligns its foreign policy with the EU. "It is impossible to send money to Russia and receive money from this country, the problem is also the closing of accounts for non-residents," real estate broker Ivan Dašić told Radio Free Europe.

Many of their clients who bought real estate and had no residency in Montenegro have been notified by banks that they need to provide proof of temporary or permanent residency in order to keep their bank accounts. "Those who did not do so had their accounts closed and the contract with the bank terminated," Dasic added, and because of all these restrictions, Russians are no longer the most numerous foreign buyers of real estate.

Only 11.66 thousand Russian citizens have temporary and permanent residence in Montenegro, according to the Ministry of Interior. "Those who don't have a formalized stay can't open an account like before," said Olesya, a Russian woman who lives permanently in Budva and works as a real estate broker.

Since most Russians don't have an account in another country, she explains, it is difficult for them to sell their real estate if they want to take money out of Montenegro. Many banks in Budva have confirmed to radio that to open an account Russian citizens need proof of temporary or permanent stay in Montenegro and proof of employment. However, Olesya says this is difficult to accomplish, although she notes that it is possible to open an account in two banks. "Most banks require proof of residency and employment to open a bank account, and to get a job or proof of residency you need to have a bank account, so it's a vicious circle," Olesia said.

Dasic says it is possible to transact with cryptocurrency, but it has not yet become popular, especially among people over 45, who are usually property owners here. The second option, he added, is that some Russians open accounts in neighboring Serbia. They open a company there, which allows them to get a bank account, and then they can do transactions with Montenegro. Tomislav Rankovic from the Kamin agency confirms this. "Not so long ago we were approached by clients from Russia who want to buyreal estate but are having difficulty transferring money. However, as far as I know, they are increasingly turning to Serbia, where they open accounts and send money not only to Montenegro," Rankovic said.

Fiscal rules in Serbia do not provide for restrictions regarding the opening of accounts for Russian citizens.

Real estate intermediaries say they hear concerns in their dealings with Russian clients that sanctions could extend to "ordinary" citizens. The Agency for Cadastre and State Property did not respond to the question of how much real estate owned by Russian citizens has been frozen so far and in which communities. At the end of July, the Authority announced that this process had begun and that one property had been frozen in Budva, while the administrative procedure for another on Žabljak was still in process. Tentatively, Interior Minister Filip Adzic said in early June that 44 real estate properties belonging to 33 Russian citizens had been frozen. The competent authorities have neither confirmed nor denied the names of all these citizens. Among them are political figures, as well as at least ten members of the Russian State Duma. This list does not include the name of Oleg Deripaska, one of the most famous Russian taikuns linked to real estate in Montenegro. His name is on a European list of sanctioned individuals published in April. According to official data, Russian citizens are owners or co-owners of 18.91 thousand properties and 3.9 million square meters of land in Montenegro. The most real estate is located in Budva - 6.67 thousand and Baru - 4.66 thousand.