The Montenegrin government has recently enacted a new Law on Free Zones, which introduces significant changes to the operations of these zones, particularly by prohibiting all activities related to cigarettes and tobacco products. This ban encompasses storage, processing, transit, and transshipment of tobacco goods. The government aims to curtail the use of free zones for cigarette smuggling, a longstanding issue at the Port of Bar and other facilities where tobacco products have been illegally stored and moved outside standard customs regulations.
Under this new legal framework, any handling of tobacco and related products within free zones is strictly forbidden and subject to enforcement by state authorities. Senior officials from the government assert that this measure marks a decisive shift from previous practices, reflecting Montenegro’s commitment to combat illegal tobacco trafficking and enhance institutional oversight. They believe that eliminating cigarettes from free-zone activities will close a major avenue for contraband and align the country with international anti-smuggling standards.
However, not all stakeholders agree with this assessment. Industry representatives and chambers of commerce have expressed concerns that the comprehensive ban may inadvertently harm the market for legal cigarettes and tobacco products. Critics argue that an outright prohibition on all tobacco flows through free zones—rather than implementing strict regulations—could disrupt legitimate trade operations, create logistical challenges, and disadvantage companies that previously utilized these zones for valid storage and transit under regulated conditions. They propose alternative solutions like increased customs oversight or compliance mechanisms to maintain the utility of free zones while preventing smuggling.
The government has dismissed these concerns, defending the extensive prohibitions as essential due to past experiences with abuse. Officials emphasize that previous efforts to impose stricter monitoring without an outright ban were ineffective in reducing illicit cigarette trade. They contend that strong state control is crucial for domestic law enforcement and meeting Montenegro’s international responsibilities. Past actions, such as the destruction of large amounts of seized tobacco products and the permanent closure of certain tobacco activities in free zones, are cited as evidence of the government’s dedication to fighting smuggling.
With the law now in effect, businesses engaged in the legal trade of cigarettes and tobacco are adapting to the new regulatory landscape. The significant reduction of tobacco operations within free zones is anticipated to alter supply chains substantially and may lead to a shift in legal flows into more tightly regulated customs environments. The impact on pricing, distribution efficiency, and competitiveness in the regional tobacco market remains uncertain as enforcement practices and supporting regulations evolve alongside the new framework for free zones.
