Since 2021, the state has gradually been closing the Free Zone of the Port of Bar to tobacco-related business. Under the new law, the ban has been expanded from warehousing to temporary storage, trade, transshipment and transit. The Government claims that the measure protects the fiscal system and prevents smuggling. Port of Adria argues that it interferes with its business operations and rights arising from the concession agreement and has sought the intervention of the Constitutional Court. Shipping companies warn that legal cargo is being diverted to competing ports. Meanwhile, MP Branislav Nenezić claims that the effects of the measure are already visible, raising the question of whether it is weakening the value of the Port of Bar. If the goal was to prevent cigarette smuggling through Bar, the state opted for the simplest possible solution in the new Law on Free Zones: it prohibited an entire range of activities involving tobacco and tobacco products.
The question that now arises is whether this has solved the problem the state sought to address – or whether, along with potential illegal channels, it has also shut down part of the legal business that had made the Free Zone of the Port of Bar important for regional transit for decades.
This question did not arise in February this year.
From a warehousing ban to a complete ban on tobacco-related activities
Back in 2021, the then Government of Zdravko Krivokapić prohibited the storage of tobacco products in the Free Zone of the Port of Bar, explaining that the measure was necessary to prevent possible smuggling.
The new law adopted in February 2026 tightened the regime further. The current Law on Free Zones entered into force on 14 February. It is no longer only about warehousing. The law prohibits activities involving tobacco and tobacco products within the Free Zone, including temporary storage, trade, transshipment and transit.
This has effectively removed business involving this category of goods from the regime of the Free Zone in Bar. And this is precisely where the story begins that, over the past several months, has divided the state, the port sector and the political scene.
The State: Bar was under particular scrutinty due to smuggling
The Ministry of Economic Development places this decision within the broader context of a years-long fight against cigarette smuggling and other forms of illicit trade in tobacco products.
In its responses to questions for this article, the Ministry states that Montenegro had long faced a serious problem with cigarette smuggling and that the Free Zone of the Port of Bar had been under particular scrutiny by both domestic institutions and international partners.
The Ministry also refers to previous European Commission reports and OLAF activities, noting that the European Commission, in its 2021 Report on Montenegro, had already highlighted the presence of offshore companies in the Free Zone of the Port of Bar and their role in tobacco supply chains.
According to the Ministry’s interpretation, the change in policy towards the Free Zone and the earlier ban on the storage of tobacco products have already significantly reduced opportunities for smuggling, resulting in the virtual disappearance of one of the previously dominant methods of cigarette smuggling through the zone.
This is one of the state’s key arguments: the measure should not be viewed solely in terms of the revenues of the Port or individual companies, but also in terms of the risk that the state associates with the Free Zone. However, this does not resolve the question of the consequences for legal business operations.
Port of Adria’s initiative
Port of Adria, majority-owned by Türkiye’s Global Ports Holding, has asked the Constitutional Court to review the constitutionality of the disputed provision.
The company argues that the contested legal provision directly violates fundamental constitutional principles, including equality before the law, the prohibition of discrimination and freedom of entrepreneurship. It maintains that, through this restriction, the state is interfering with rights arising from its concession agreement, disproportionately restricting its property rights and undermining legal certainty. Port of Adria considers the introduction of a general ban on activities involving tobacco products to be inconsistent with the principle of proportionality, arguing that illegal activities could have been addressed through stricter customs and security controls rather than by completely eliminating a legal economic activity.
In its initiative, the company also refers to the case law of the European Court of Human Rights in Strasbourg to support its argument that the state cannot arbitrarily restrict existing economic interests and investors’ rights.
Government: the risk is too high
In its response to Port of Adria’s initiative for a constitutional review before the Constitutional Court, the Government argues that the contested provision is not directed against that company, but is instead a general regulatory rule that applies equally to all users of free zones.
Its reasoning is that tobacco and tobacco products are goods presenting a high fiscal and security risk and therefore require a stricter regime. The Government also rejects the claim that the measure is disproportionate. Its argument is that international trade in tobacco has not been prohibited; rather, certain activities have been prohibited within the special legal regime of a free zone.
In other words, the state claims that it is not shutting down tobacco trade in Montenegro, but closing a particular channel through which these goods had previously moved. The Ministry also presents the new law as part of a broader reform aimed at making free zones safer, more transparent and less susceptible to abuse.
Nenezić: two barriers to business
Branislav Nenezić, an MP from the European Alliance who, together with Boris Mugoša and Nikola Zirojević, was among the proponents of amendments to the law, sees the problem as broader than the tobacco ban alone. Their proposal sought to amend several provisions of the law, including those concerning the status of foreign users and the ban on activities involving tobacco products.
Nenezić says that, at a session of the Municipal Assembly of Bar, representatives of companies, freight forwarders, logistics operators and shipping companies confirmed what he had been warning about for months. “A large number of foreign companies are planning to leave, and some have already left, the Free Zone of the Port of Bar because of a single article of the law,” Nenezić says.
In his view, another problem lies in the provision requiring zone users to be registered domestically.
“The requirement is that every foreign company that owns goods located in the Free Zone – even if those goods are there only for storage and transit – must establish a company in Montenegro,” Nenezić adds, describing this as a major business barrier that directly affects the competitiveness of the Port of Bar. The European Alliance MP therefore sees two separate barriers – one concerning the status of foreign users and the other concerning the goods themselves.
Shipping companies warn of loss of business
At a session of the Municipal Assembly of Bar in late May, representatives of the port sector spoke about the possible loss of users and cargo.
Ilija Pješčić, Executive Director of Luka Bar, said that if the law remained in force, the Port of Bar could lose as many as 24 users of the Free Zone, who might redirect their business to ports in neighbouring countries. Miroslav Radoman, Operations Director at Port of Adria, warned that the consequences of the law were being borne by legal businesses.
Representatives of major shipping companies were even more specific, noting that competing routes through Durrës, Rijeka, Koper, Ploče and Thessaloniki could prove more attractive.
Nenezić claims that the effects can already be seen in the number of ships. “The biggest problem is that this will, unfortunately, probably result in one of the shipping companies, CMA CGM, leaving the Free Zone of the Port of Bar, which would make the competitiveness of the Port of Bar almost negligible and, more generally, lead to fewer ships calling at the Port of Bar – something we can already see these days,” Nenezić says.
Port of Bar: We earned nothing from tobacco
Luka Bar states that, between 2023 and 2025, there was no transshipment of tobacco or tobacco products as part of its ship-handling operations, nor were there any other operations involving such goods. Consequently, Luka Bar AD generated no revenue from these activities during that period. This means that the overall decline in Luka Bar’s business cannot simply be attributed to the ban on tobacco-related business.
Luka Bar AD’s total cargo throughput fell from 1,906,639 tonnes in 2023 to 1,841,053 tonnes in 2024 and 1,729,181 tonnes in 2025. In the first six months of 2026, 684,332 tonnes were handled. Revenue amounted to €16.22 million in 2023, €16.97 million in 2024 and €15.69 million in 2025, while in the first six months of 2026 it stood at €6.44 million.
Luka Bar does not link this decline to tobacco, but rather explains it by movements in key commodities – primarily bauxite, copper concentrate and coal. However, a distinction needs to be made between Luka Bar AD as a company and the Free Zone as a broader business system.
As of 30 June 2026, there were 58 active contracts in the Free Zone. Of these, 34 users were headquartered in Montenegro and 24 abroad. Twenty-three contracts are being implemented in the area managed by Luka Bar, 16 in the area managed by Port of Adria, 11 at the PGS Montenegro facility, three at the Mediteran Shipping facility, while five are being implemented at other locations.
Luka Bar also states that it is not yet possible to quantify the effects of the new law, which requires zone users to be registered in Montenegro, because only around six months have passed since it entered into force. This is an important fact: there are 24 foreign-based users, but we do not yet know how many of them will actually leave the zone as a result of the new legal regime.
And it is precisely here that Luka Bar’s position partially coincides with the response of the Ministry of Economic Development. The Ministry also states that the actual economic effects of such a significant change cannot be reliably assessed immediately after the adoption of the legislation, but only after a period of its full implementation and an analysis of business operations and cargo flows.
“The same containers are going via Božaj”
Nenezić does not speak only about the possible diversion of cargo. He cites the specific example of Philip Morris tobacco products manufactured in Niš. “The goods that were discussed – namely, Philip Morris tobacco products manufactured in Niš – were exported through Port of Adria in closed, satellite-tracked and sealed containers, which were never opened in the Free Zone but merely passed through it in transit.” According to him, that same cargo is now using a different route, passing entirely unhindered through Montenegro and the Božaj border crossing towards the Port of Durrës.
He then poses the question: “How can the same goods leave Montenegro through the Božaj border crossing, but not through the border crossing at the Port of Bar?” This is a question that cannot be resolved solely through a debate over whether the ban is legal. If Nenezić’s claim is accurate, the same goods can travel by road through Montenegro to an Albanian port, while their transit through the Free Zone in Bar is prohibited.
This raises another question: does the measure actually eliminate the risk of smuggling, or does it merely change the logistics route taken by legal cargo?
Nenezić sees this as a direct blow to Montenegro’s logistics sector.
“This has a direct impact on Montenegro’s economy, while at the same time directly benefiting the economy of neighbouring Albania.”
It is important to emphasise, however, that Luka Bar says it has no data indicating that any cargo previously handled there has been redirected to Durrës. Nor do the available responses from the Ministry provide confirmation of either the volume or the number of shipments that may have been redirected to Durrës.
Calculation for the Monteput
Nenezić also offers a broader calculation: if containers are diverted from ships in Bar to a road route towards Durrës, the financial consequences extend to other infrastructure systems. As an example, he cites Monteput and container trucks travelling along the Princess Xenia Motorway and through the Sozina Tunnel. “I gave the example of Monteput and trucks carrying containers along the Princess Xenia Motorway and through the Sozina Tunnel, where the amount generated per truck in both directions would be around €70.”
He then calculates the potential loss per ship: “Bear in mind that each ship can carry around 2,000 containers, which means that, literally, the loss per ship would be between €100,000 and €150,000 for Monteput alone.” Nenezić claims that four such ships per month have already ceased transiting for the past four months.
This calculation should be treated as his estimate. However, it illustrates the broader problem: if cargo no longer passes through Bar, the loss does not necessarily stop with the port operator. It can affect freight forwarders, logistics companies, road hauliers, the motorway, warehouses and other participants in the supply chain.
Durrës as an unexpected winner?
Throughout the story of the Free Zone in Bar, the name of another port is repeatedly mentioned – Durrës. Shipping companies have cited it as one of the competing routes. Nenezić claims that part of the cargo that previously passed through Bar is now being redirected there. Luka Bar, however, says it has no such data. For the time being, it is therefore not possible to claim that Durrës has “taken over” a specific volume of cargo from Bar. But a question can be raised: If Montenegro prohibits a certain form of legal transit through its largest commercial port, while the same goods subsequently travel by road through Montenegro to a port in another country, who ultimately gains and who loses?
The Ministry’s response does not, for now, confirm that such redirection has occurred. At the same time, however, the Ministry states that the actual economic consequences of the law will only be possible to assess more reliably after a longer period of its full implementation.
Croatia shows that another model exists
The new Croatian Law on Free Zones provides for a broad range of permitted activities within free zones, including warehousing, while users operate subject to prescribed conditions and customs supervision.
This in itself does not mean that the Montenegrin model is contrary to European law.
However, it shows that a different regulatory approach exists: controlling users, goods and customs procedures instead of imposing a complete ban on certain activities. But, this is also important in the context of the argument put forward by Nenezić and the other proponents of amendments to the law – namely, that the fight against smuggling can be pursued through customs procedures and supervision, rather than necessarily excluding an entire category of legal transit from the Free Zone.
The question is therefore straightforward: if smuggling is the problem, could controls over legal transit have been strengthened instead of completely banning an entire type of port business? The Government has its own answer to that question: the legislator assessed that tobacco, as excise goods presenting a high fiscal and security risk, warranted a special regulatory regime.
The Constitutional Court will answer the legal question, but not the business one
Port of Adria bases its initiative before the Constitutional Court precisely on the issue of proportionality. The company acknowledges that the state may protect the public interest, but challenges the manner in which this has been done and the consequences the ban has for its business operations.
The Government responds that the law is general in nature and does not specifically target Port of Adria. In its submission, the Government states that the contested provision constitutes a general and abstract regulatory norm that applies equally to all current and future users of free zones.
At the same time, the Government rejects the claim that the ban has jeopardised international trade in tobacco products, arguing that the restriction applies specifically to the free-zone regime.
The Constitutional Court will have to answer the question of where the state’s legitimate regulatory discretion ends and disproportionate restrictions on business activity begin. Yet even if the Constitutional Court resolves the legal dispute, an economic question will remain – one that a court ruling cannot answer: how much has Bar lost in the meantime?
Nenezić: Is the port being deliberately weakened?
In the interview, Nenezić went a step beyond the issues of the law and economic damage. Asked about claims that the Port of Bar may be deliberately weakened so that a future privatisation could take place at a lower price, he replied: “My concern is that this is, in some way, placing Luka Bar and Port of Adria in an unfavourable position, all with the aim of some future privatisation at a significantly lower price than what could have been the market price.”
This raises the question: can a regulatory policy that reduces a port’s competitiveness also reduce its market value? However, there is no confirmation of this claim in the available responses from the institutions.
“Ready to talk,” but no talks have taken place
Nenezić says that he also tried to discuss the problem with Prime Minister Milojko Spajić.
“After the law was put forward, I presented Prime Minister Spajić with an example and a question during a special parliamentary session. At the time, he said that he was ready to talk.”
According to Nenezić, three months have passed since then. “He still has not sat down to talk with representatives of the operators, shipping companies or logistics companies.” Nenezić has announced that he will raise the issue again during the autumn session of Parliament.
His political message is clear: if there is a willingness to help the Port of Bar, he believes that a compromise must be found between controlling tobacco trade and preserving legal transit.
In the end – what is the goal?
The state has a legitimate reason to prevent cigarette smuggling. None of the serious actors in this story disputes that. Nenezić does not dispute the objective either. “We fully support the fight against cigarette smuggling.” The dispute concerns the means.
Is cigarette smuggling best prevented by completely banning certain activities in one free zone, or through stricter controls over legal transit? Is the price of the ban merely the loss of several contracts, or does it alter an entire logistics route?
For now, several things are certain. Following years of warnings about abuses of the Free Zone, the state decided to introduce a much stricter regime for tobacco. The Ministry justifies this move by citing fiscal and security interests and the long-standing problem of smuggling. According to its own data, Luka Bar generated no revenue from the transshipment of tobacco between 2023 and 2025. Its overall cargo throughput has declined, but the company itself does not link that decline to tobacco products. At the same time, there are 24 users of the Free Zone headquartered abroad, and it is still too early for a definitive assessment of how the new regime will affect their decision to remain in the zone. Port of Adria is challenging the constitutionality of the ban, while the Constitutional Court has yet to rule. Meanwhile, claims that legal cargo, including Philip Morris products from Niš, is now travelling through Montenegro towards Durrës represent the most striking, but for the time being insufficiently documented, part of the story.
Ultimately, data showing what is actually happening to cargo, ships and Free Zone users following the changes introduced in February 2026 will reveal whether the new regime merely closed the space for abuse – or whether, together with the smuggling channels, it also pushed part of the legal business out of Bar.
Žarko Vujović, journalist of portal Antena M
The text was originally published on the portal Antena M
This text was produced within the framework of the MediaLit project, implemented by the Centre for Civic Education (CCE) in partnership with the Helsinki Committee for Human Rights in Serbia, the Helsinki Committee for Human Rights in North Macedonia, the Tirana Centre for Journalistic Excellence in Albania, and the Atlantic Initiative in Bosnia and Herzegovina. The project is funded by the European Union and co-funded by the Ministry of Regional-Investment Development and Cooperation with Non-Governmental Organisations of the Government of Montenegro. The content of this text is the sole responsibility of the author and does not necessarily reflect the views of CCE, the partner organisations, the European Union, or the Ministry.