COMMISSION STAFF WORKING DOCUMENT KOSOVO* 2015 REPORT Accompanying the document COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS EU Enlargement Strategy

EN EN
EUROPEAN
COMMISSION
Brussels, 10.11.2015
SWD(2015) 215 final
COMMISSION STAFF WORKING DOCUMENT
KOSOVO*
2015 REPORT
Accompanying the document
COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN
PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL
COMMITTEE AND THE COMMITTEE OF THE REGIONS
EU Enlargement Strategy
{COM(2015) 611 final}
{SWD(2015) 210 final}
{SWD(2015) 211 final}
{SWD(2015) 212 final}
{SWD(2015) 213 final}
{SWD(2015) 214 final}
{SWD(2015) 216 final}
Offentligt
KOM (2015) 0611 - SWD-dokument
Europaudvalget 2015
This designation is without prejudice to positions on status, and is in line with UNSCR 1244/1999 and
the ICJ Opinion on the Kosovo declaration of independence
2
Table of Contents
1. INTRODUCTION....................................................................................................... 4
1.1. Context ............................................................................................................. 4
1.2. Summary of the report....................................................................................... 4
2 POLITICAL CRITERIA............................................................................................. 6
2.1. Democracy ........................................................................................................ 6
2.2. Public administration reform........................................................................... 10
2.3. Rule of Law..................................................................................................... 12
2.4. Human rights and the protection of minorities................................................ 20
2.5. Regional issues and international obligations ................................................. 27
3 NORMALISATION OF RELATIONS BETWEEN KOSOVO AND SERBIA...... 29
4. ECONOMIC CRITERIA.......................................................................................... 30
4.1. The existence of a functioning market economy............................................. 30
4.2. The capacity to cope with competitive pressure and market forces within
the Union......................................................................................................... 35
5. EUROPEAN STANDARDS..................................................................................... 37
5.1. Internal market ................................................................................................ 37
5.1.1. Free movement of goods................................................................... 37
5.1.2. Movement of persons, services and right of establishment............... 38
5.1.3. Free movement of capital.................................................................. 39
5.1.4. Customs and taxation ........................................................................ 40
5.1.5. Competition....................................................................................... 41
5.1.6. Public procurement............................................................................ 41
5.1.7. Intellectual property law.................................................................... 43
5.1.8. Employment and social policies, public health policy...................... 44
5.1.9. Education and research...................................................................... 45
5.1.10. World Trade Organisation (WTO) issues ......................................... 46
5.2. Sector policies ................................................................................................. 47
5.2.1. Industry and SMEs............................................................................ 47
5.2.2. Agriculture and fisheries ................................................................... 47
5.2.3. Environment and climate change ...................................................... 48
5.2.4. Transport policy ................................................................................ 49
5.2.5. Energy ............................................................................................... 50
5.2.6. Information society and media.......................................................... 51
5.2.7. Financial control................................................................................ 52
5.2.8. Statistics ................................................................................................ 54
5.3. Justice, freedom and security .......................................................................... 56
5.3.1. Visa policy, border controls, asylum and migration ............................. 56
5.3.2. Money laundering.............................................................................. 58
3
5.3.3. Drugs ................................................................................................. 58
5.3.4. Police................................................................................................. 58
5.3.5. Fighting organised crime and terrorism ............................................ 59
5.3.6. Judicial cooperation in civil and criminal matters............................. 60
Annex I – Relations between the EU and Kosovo............................................................ 61
Annex II – Statistical Annex ............................................................................................. 63
4
1. INTRODUCTION1
1.1. Context
On 27 October 2015, the EU signed a Stabilisation and Association Agreement (SAA) with
Kosovo. This is a milestone on Kosovo's path towards a European future. The SAA
constitutes the first contractual relationship between the EU and Kosovo. It completes the
map of SAAs with all Western Balkan countries. The SAA provides a comprehensive
framework for closer political dialogue and economic relations between Kosovo and the EU,
including opening EU markets to Kosovo products.
Kosovo has demonstrated its commitment to the normalisation of relations with Serbia by
reaching a number of key agreements in August. Important decisions have also been taken to
pave the way towards the establishment of the Specialist Chambers. The new government has
also underlined its commitment to its goal of meeting all requirements for visa liberalisation.
1.2. Summary of the report
As concerns the political criteria, the six-month political stalemate following elections in
June 2014 delayed key reforms. It ended in December, when the Democratic Party of Kosovo
(PDK) formed a coalition with the Democratic League of Kosovo (LDK) and minority
parties. In August, the Kosovo Assembly voted in favour of constitutional amendments to
establish the Specialist Chambers and a Specialist Prosecution Office, which are to prosecute
cases of grave trans-boundary and international crimes committed during and in the aftermath
of the conflict in Kosovo. The government also reached key agreements with Belgrade in
August. Both decisions required strong political commitment from the government.
There has been increased polarisation between government and opposition. Members of the
opposition have been involved in incidents of violence against the government, criticising it
for its recent decision on the Specialist Chambers, the dialogue agreement with Belgrade, and
the border demarcation agreement with Montenegro.
Many independent institutions and regulatory authorities are currently not operational or are
negatively affected by delayed appointments of board members. Both the government and the
Assembly need to urgently select board members for these institutions and determine
mechanisms for their accountability. Appointments need to be made on the basis of
professional qualifications and merit, not political patronage. The recent election of the
Ombudsperson was a positive development in this regard.
The government has increased its focus on reform of the public administration, which has
reached some level of preparation. Good progress was made in advancing the legal and
strategic framework. The continued politicisation of the public administration, however, is a
major concern. Accountability needs to improve across the administration through proper
oversight. Any overlap of responsibilities of government agencies should be avoided.
Parliamentary oversight of budget implementation should become more reliable and
transparent. Sound financial management across public institutions should be ensured.
Kosovo's judicial system is at an early stage of preparation. A package of amendments to four
core laws was adopted, taking a step towards the modernisation of the justice system.
1
This report covers the period from October 2014 to September 2015. It is based on input from a variety of
sources, including contributions from the government of Kosovo, the EU Member States, European Parliament
reports and information from various international and non-governmental organisations. As a rule, legislation or
measures which are under preparation or awaiting parliamentary approval have not been taken into account.
5
However, the judiciary remains prone to political interference. Further efforts are required to
ensure independence in law and in practice, to prevent and fight corruption within the
judiciary, to recruit and train more qualified staff and to allocate adequate resources.
Kosovo is at an early stage of preparations in the fight against corruption. A comprehensive
and strategic approach is necessary to ensure real results in fighting the endemic corruption in
Kosovo. A track record of successful prosecution and convictions remains to be established.
The rare investigations into high-level corruption have so far not resulted in final convictions.
Kosovo is at an early stage of preparations in the fight against organised crime. Some
progress has been made in inter-institutional cooperation and information exchange among
law enforcement agencies on investigations. However, the number of investigations and final
convictions remain low. Asset confiscation is rarely applied. The focus on strategies and
action plans should not obscure the need for real results in fighting endemic organised crime
in Kosovo. Kosovo has stepped up its efforts to fight terrorism, but continues to face
challenges related to radicalisation.
The adoption of the human rights law package strengthened the institutional set-up and
clarifies the roles of various institutions. Increased political attention is needed, however, to
ensure proper implementation and addressing the lack of resources. In the area of freedom of
expression, Kosovo has some level of preparation. The legislative and institutional framework
remains fragmented and partly ineffective. The public broadcaster is vulnerable to political
pressure and lacks sustainable funding. Violence against women and women’s limited access
to property ownership hamper the full exercise of their rights. The protection of persons with
disabilities and persons belonging to minorities, in particular the Roma, Ashkali and Egyptian
communities, needs to be significantly strengthened.
Regarding the normalisation of relations with Serbia, Kosovo remained committed to the
implementation of the April 2013 'First agreement of principles governing the normalisation
of relations' and other agreements reached in the EU-facilitated dialogue. Key agreements
were finalised in August on energy, telecoms, establishment of the Association/Community of
Serb majority municipalities as well as the bridge in Mitrovicë/Mitrovica. The dialogue
achieved further concrete results in the fields of justice, civil protection integration, vehicle
insurance, customs collection and IBM. There were also constructive discussions to improve
cooperation in tackling migratory flows from Kosovo. The steps taken gave fresh momentum
to the normalisation of relations and should have a positive and concrete impact on the
everyday life of citizens in both Serbia and Kosovo.
As regards the economic criteria, Kosovo is at an early stage in developing a functioning
market economy. The persistent trade deficit reflects a weak production base and lack of
international competitiveness. Reliance on remittances and widespread informal economy
decrease employment incentives contributing to already low labour market participation and
high unemployment, which stands at 35.3%, rising to 61% among youth. Inefficient public
administration and an ad hoc approach to fiscal policy constitute significant fiscal risks.
Kosovo should strengthen the medium-term fiscal framework, improve the transparency of
public finance and shift budget expenditure towards growth. Kosovo should also speed up
privatisation and restructuring of public enterprises and improve bankruptcy and insolvency
procedures, as well as reduce reliance on customs duties by broadening domestic tax base and
modernising revenue collection.
Kosovo is at an early stage in achieving the capacity to cope with competitive pressures and
market forces within the Union. Major reforms are still needed to secure a stable energy
supply and reducing distribution losses, close the skills gap in the labour market, and channel
foreign direct investment and remittances into productive sectors.
6
Kosovo is at an early stage of alignment with European standards, including in the areas of
public procurement, statistics and financial control. Legislative alignment in some areas is
high but implementation is weak. Some progress was made in the area of public procurement,
especially as regards the enforcement of a centralised public procurement system, but
concerns about corruption persist. As regards financial control, some progress was made,
especially in external audit. However, significant efforts are needed to implement public
internal financial control throughout the administration and in state-owned enterprises.
2 POLITICAL CRITERIA
2.1. Democracy
Kosovo continued to consolidate the functioning of its democratic institutions. Following the
elections of June 2014, a new Assembly was formed and a new government took office in
December. The European Union's Special Representative in Kosovo and the European Union
Rule of Law Mission (EULEX) continue to implement their mandates. EULEX' current
mandate runs out in June 2016. In comparison to other years, the situation in the north of
Kosovo, inhabited predominantly by Kosovo Serbs, has improved during 2015. Kosovo has
made progress on integrating police and justice structures in the north and in August 2015
agreed, within the framework of the EU-facilitated dialogue with Serbia, to establish an
Association/Community of Serb majority municipalities. The Assembly successfully adopted
the constitutional amendments and legislation required for the establishment of Specialist
Chambers and a Specialist Prosecution Office to investigate allegations of international
crimes committed during and after the 1999 conflict.
Elections
The Kosovo Assembly has yet to undertake overdue electoral reforms. Kosovo's membership
of the Venice Commission can help in this regard. The Assembly also needs to initiate an
independent audit of political party financing and party electoral campaigning, as provided for
in the law on financing of political parties. In January 2015, well-managed municipal
elections were held, without incident, in Gračanica/Graçanicë, a Serb-majority municipality in
central Kosovo.
Parliament
The delay in establishing a new Assembly following the 2014 elections slowed down
Kosovo's reform process. Violent obstructions of recent plenary sessions by members of the
opposition have adversely affected the functioning of the Assembly. Such actions go against
European values. The Assembly needs to become more efficient and to comply with its own
rules of procedure. It should urgently appoint competent members to regulatory and
supervisory bodies to ensure the proper functioning of the state administration, on the basis of
merit based, transparent and non-political selection processes.
Six months after the parliamentary elections of June 2014, a new Assembly was formed on 8
December. The Democratic Party of Kosovo PDK (35 seats) and the Democratic League of
Kosovo LDK (33 seats) are in a governing coalition with the Serb Citizen’s Initiative 'Srpska'
(11 seats) and the non-Serb minority group '6+' (6 seats). With 85 out of 120 seats, the ruling
coalition has a comfortable majority. The ‘Vetëvendosje’ self-determination movement and
political party (16 seats) is the core of a small, but vocal, opposition.
Parliamentary work was effectively suspended from June until December 2014. However,
following the agreement on the new government, the Speaker was appointed and the
7
Assembly began its work. It confirmed the new government and passed the 2015 budget in
December. It adopted its annual work plan in February. Several important laws, including on
the judiciary and human rights, were enacted, all of which was adopted under fast-track
procedure. This limited the possibility for parliamentary debate, which is a matter of concern.
Many of the Assembly's deliberations were marked by a polarised atmosphere between the
ruling coalition and the opposition, in particular on politically sensitive issues such as the
Specialist Chambers and dialogue with Serbia. Recent disruptions of plenary sessions by the
opposition, including by violent means, have adversely affected the functioning of the
Assembly and have undermined confidence in the willingness of the opposition to partake in
democratic debate. The Assembly is a key democratic institution and all parliamentary
members must allow it to fulfil its duties.
Parliamentary debate was further affected by the lack of regular plenary sessions and frequent
exceeding of time limits set under the rules of procedure. This was to the detriment of the
quality of parliamentary review. There were also violations of the rules of procedure by the
government arbitrarily withdrawing draft laws submitted to the Assembly. The regulatory
framework for the Assembly should be improved. The new Assembly should strengthen its
oversight of the executive and the legislative process and implement standards for
consultations with civil society. Parliamentary checks and balances over budgetary control
needs to improve. The Assembly should ensure follow-up on reports by the Office of the
Auditor General and the Ombudsperson. A mechanism should be put in place to ensure that
recommendations by the public finance oversight committee are implemented.
The Assembly should supervise independent institutions, regulatory authorities and agencies
more closely, based on a clear mandate and with suitable reporting and accountability
mechanisms. It should urgently address delays in the selection of board members for these
institutions and authorities, and determine mechanisms for their accountability. Appointments
need to be made on the basis of professional qualifications and merit, not political patronage.
The EU integration committee should be further strengthened to reflect its key role in
Kosovo’s efforts to advance on its European reform agenda. Better screening of draft
legislation is needed to ensure alignment with the acquis. The Assembly administration needs
to strengthen its technical capacity to support effective policy-making and improve scrutiny of
draft legislation.
Governance
The new government continued to implement EU-related reform priorities and delivered on
two major international commitments in August. The executive should ensure that legislation
and policies are implemented in practice. Good communication with the Assembly, including
regular replies to parliamentary questions and strong inter-ministerial coordination, are crucial
in this regard. While legislation on the Ombudsperson was improved, the government
undermined its effective functioning through continued failure to provide suitable premises.
The new government of Prime Minister Isa Mustafa (LDK) took office in December. The
formation of the coalition followed a prolonged stand-off between the PDK and an alliance of
parties led by the LDK. The break-up of this alliance enabled the PDK and LDK to reach a
power-sharing agreement and form a grand coalition supported by minority parties. The
government has 23 members, including the Prime Minister and three deputy prime ministers.
There are only two women in the government. Five ministerial posts are held by minority
representatives, three of which represent the Serb, one the Turkish and one the Bosnian
communities.
8
The new government continued to implement EU-related reform priorities and remained
committed to the EU-facilitated dialogue with Serbia. The government programme focuses on
economic development, the rule of law, EU-related reform, education, science and culture,
and healthcare. With its agreements on the establishment of the Specialist Chambers and the
Association/Community of Serb majority municipalities, the government delivered on two
key international commitments in August 2015.
The government has faced significant challenges, including a spike in irregular migration by a
considerable number of Kosovo citizens early in 2015, a number of violent protests and
strikes, as well as violent attacks by the opposition in September and October 2015. The
dismissal of the Minister for Communities and Return as a result of statements made in
Gjakova/Djakovica led to a three-month boycott of the institutions by the Serb 'Srpska'
coalition partner. The appointment of a new Kosovo Serb Minister allowed for the return of
the 'Srpska' list to the government and the Assembly.
Limited cooperation between PDK- and LDK-led ministries has in some cases hindered
efficiency in making progress in key areas of governance. The government needs to meet
deadlines set out in its various strategies and work plans, with better coordination and
improved communication among coalition partners.
The government continued to implement European integration priorities. To support this
process and in anticipation of the Stabilisation and Association Agreement, the Kosovo
institutions have been involved in drafting the first National Programme for Adoption of the
EU Acquis. Kosovo has also been working on a monitoring and reporting system. The
National Council on European Integration has continued to meet and discuss the main
objectives and policy obligations of further integration with the EU. The executive
commissions in charge of the coordination and implementation of SAP Dialogue conclusions
continued to meet.
Efforts to further improve the capacity of local government have continued. The Ministry of
Public Administration is currently streamlining the number of job titles from around 8000 to
800. While these initiatives could bring about efficiency gains, their purpose and
implementation should be communicated better. There has been improvement in municipal
compliance with the law on local self-government. Municipal efforts need to continue to
increase transparency in decision-making and strengthen municipal assemblies' oversight.
The Serb-majority municipalities in the south submitted their budgets, which were approved
in line with those of other municipalities. They also took part in the agricultural census, which
the northern municipalities boycotted. Some southern Serb-majority municipalities face
budgetary difficulties, partly due to inaccurate population figures and political deadlock. In
April 2015, municipalities in the north adopted their budgets in line with Kosovo legislation,
which also included the numbers of employees in the health and education sectors.
On 3 August, the Kosovo Assembly adopted constitutional amendments allowing for the
establishment of the Specialist Chambers and the Specialist Prosecution Office. The
Constitution needs to be changed to ensure that the majority of Kosovo Judicial Council
members are elected by their peers, in line with Venice Commission recommendations.
Following Kosovo's membership of the Venice Commission (June 2014), two judges of the
Constitutional Court were appointed as Kosovo’s representatives. The Constitutional Court
operates with a quorum of seven judges; however, two appointments are currently pending.
The Assembly elected a new Ombudsperson in July 2015. The Assembly also adopted a
new Law on the Ombudsperson in May 2015, marking a significant step towards clarifying
the legal framework and strengthening the independence and impartiality of the institution. In
9
practice, however, the government has undermined the capacity of the institution to carry out
its duties due to the failure to provide it with suitable premises. In 2014, the
Ombudsperson received 2 224 cases, 8.6 % more than in 2013. The Kosovo authorities
at central and local level have not committed themselves to consistently following up
on the Ombudsperson's recommendations. The Assembly's committee on human rights
and the Office for Good Governance under the Prime Minister's Office should re-
confirm and implement their commitment to do so.
Civil society
Some progress was made in improving cooperation between the government and civil society.
However, input from civil society needs to be systematically sought and followed up. The
government’s strategy for cooperation with civil society needs to be fully implemented and
monitored effectively. Additional measures should be taken to ensure that civil society
organisations are properly included in public consultations. Public funding for civil society
organisations has to be provided in a transparent way using clearly defined criteria.
An empowered civil society is a crucial component of any democratic system and should be
recognised and treated as such by institutions in Kosovo. The implementation of the
government's strategy for cooperation with civil society is monitored by the Council on the
Implementation of the Government Strategy for Cooperation with Civil Society. To date, the
Council has only managed to draw up its own work plan and set up four working groups. The
lack of appropriate participation by relevant ministries, insufficient resources and capacity
and an overreliance on donor-funding illustrate the absence of political will to genuinely
engage with civil society. More work is required to ensure consistent implementation of the
existing legal framework for cooperation with civil society. Consultation needs to be timely
and the selection of civil society representatives needs to be transparent.
The manner in which public funding is provided to civil society is non-transparent and
unregulated. The government should set standards and criteria governing public funding of
civil society organisations so as to instil transparency, accountability and credibility in the
process. Tax relief for private donations has been increased from 5 to 10 %, but the legal
framework for tax deductions remains ambiguous and is not harmonised with provisions in
the law on freedom of association.
Recent amendments to money laundering and anti-terrorism legislation have led to the
suspension of 14 NGOs, allowing for arbitrary decisions on suspensions.
While meetings of the Assembly presidency have been made accessible to civil society, the
Assembly’s declaration on partnership between it and civil society has yet to produce any
concrete results.
Civilian oversight of the security forces
There has been limited progress in the work of the parliamentary committee on internal
affairs, security and supervision of the Kosovo security forces. The administrative staff of the
committee ensured continuity in the oversight of the security sector during consecutive
assembly mandates, but the committee has yet to exercise proper parliamentary control and
oversight of expenditure. Close ties between individual parliamentarians and former Kosovo
Liberation Army members and Kosovo Protection Corps have hindered independent
assessments.
Amendments to the law on classified information and security clearance have improved the
vetting process. However, vetting is still done by the Intelligence Agency instead of a separate
10
dedicated body. The Kosovo Security Council, which should have an advisory role on all
security matters, does not hold the regular meetings provided for by its mandate.
2.2. Public administration reform
Kosovo has some level of preparation in the reform of its public administration. Good
progress was made on developing a comprehensive strategic framework for public
administration reform (PAR) and on improving legislation. For the first time, public
administration reform has received high-level political support and commitment. Given
Kosovo's ambitious reform agenda, continued strong political commitment is essential to
ensure implementation of reforms. In the coming year Kosovo should in particular:
→ effectively monitor implementation of the PAR strategic framework under the umbrella of
the wider development strategy, ensuring a clear link between PAR and economic
development;
→ improve accountability through a thorough review of all agencies and improve access to
administrative justice by addressing the backlog of administrative cases;
→ adopt a comprehensive public financial management reform programme.
Public service and human resource management
The law on the civil service governs the employment conditions of civil servants at the central
government and municipal levels. Merit-based recruitment and promotion are enshrined in
law in line with the principles of public administration, but not systematically implemented.
This is particularly so for senior civil servant positions and appointments to boards of public
entities, where political influence over appointments is a matter of concern. Non-majority
communities are still not adequately represented in public institutions. A major hindrance in
this regard is the continued non-recognition of diplomas issued by the University in
Mitrovicë/Mitrovica, which is the university attended by many students from non-majority
communities.
The civil service law also regulates uniform criteria for dismissals. It provides for disciplinary
measures, including appeal possibilities. Few recommendations of the independent oversight
board are implemented – rulings are not followed up. Administrative judges are
overburdened, often leading to delays in decisions. Many Ombudsperson recommendations
are not implemented, often without explanation.
The Ministry of Public Administration is responsible for central coordination of human
resources management. Resources within the ministry are very limited, preventing it from
effectively promoting the uniform application of legislation and principles across the public
administration. Professional human resources management is lacking due to politicisation and
limited capacity. The human resource management information system is not up-to-date. The
government should ensure that the system works properly.
The remuneration system of public servants does not ensure equal pay for equal work, even
though a standardised job classification has been in place since 2010. In practice, different
salary coefficients are applied to similar positions. Fairer remuneration is being held back by
the delay in job classification reform. However, the recently approved job catalogue should
help. A positive step was the temporary suspension of top-ups on salaries in September 2015,
to ensure a more regulated and merit-based approach.
Professional development for public servants is insufficient. Systematic training is hampered
by lack of resources and suitable facilities of the Kosovo Institute for Public Administration.
Performance appraisals are provided for by law but in practice are treated as a formality.
11
Kosovo has adopted measures and mechanisms to prevent corruption and promote integrity
in the public service. The approval of the Code of Ethics for civil servants in March 2015 is a
positive development and now needs to show practical impact. Public trust in institutions is
often undermined by corruption.
Policy development and coordination
The legal basis and institutional structures, including for European integration, are largely in
place to ensure a consistent policy-making system, but in practice policy planning is
fragmented and lacks prioritisation at government level. Sector strategies have rarely been
financially sustainable. As of June 2015, all strategies and policies have to contain a fiscal
impact analysis.
Some aspects of inclusive and evidence-based policy and legislative development are in
place. There have been major improvements in policy development, although policy-making
and legal drafting capacities, including capacity for alignment with the acquis, are still
insufficient. Inter-ministerial and public consultations are regulated, but timelines have often
been too short to allow for effective civil society input. The government should implement
minimum standards for effective public consultation. Regulatory impact assessments are not
used consistently, other than in a number of pilot areas.
Public scrutiny of government work is in theory possible, since the government reports
annually on implementation of the key government strategic documents. The focus is however
on achievement of outputs rather than on the impact of government policies. No reporting is
done on the implementation of sector strategies. Parliamentary scrutiny of government work
is undermined by frequent changes in the government's legislative plan.
Accountability of the administration
The overall organisation of the state administration is not conducive to ensuring the lines of
accountability. The weak legal framework has resulted in over 70 government agencies with
overlapping responsibilities and a large number of non-constitutional institutions reporting
directly to the Assembly. The Assembly often lacks the powers and capacity to effectively
supervise their activities. Lines of accountability within institutions are weak and there is no
clear delegation of powers to middle management. Managerial accountability is not yet
ingrained in the administrative culture. (See Financial control)
Internal and external mechanisms have been set up to protect the citizens’ right to good
administration. However, scrutiny by oversight institutions such as the Auditor General and
the Ombudsperson is severely limited by the state administration paying little heed to their
recommendations. The right to access public information is regulated in the law on access
to public documents. Over the past two years, the number of refused or unanswered requests
was low (only 5 % of the nearly 2 000 requests made each year).
No progress has been made on the right to administrative justice, as the law on general
administrative procedures is not yet adopted. The increasing backlog in resolving
administrative disputes is damaging public confidence in the court system. The right to seek
compensation is not yet effectively ensured due to fragmented legislation and lack of a
specific law on public liability.
Public financial management
Kosovo has so far focused on improving its public finances by addressing specific public
finance areas separately, without explicitly linking them and sequencing reforms under a more
comprehensive public financial management reform programme. However, following a
public expenditure and financial accountability assessment and other relevant assessments,
12
Kosovo is now preparing a comprehensive strategy and action plan, to be adopted in early
2016. This should take into account the new public internal financial control strategy from
April 2015 and the new public procurement strategy, which is yet to be adopted.
The annual budgeting process is based on the ‘line-item’ approach. Public debt is still low and
sustainable, although domestic and international borrowing has been increasing. Budget
transparency is insufficient. In particular, budget information needs to be more reliable and
comprehensive to strengthen accountability. The presentation of key budgetary information in
an accessible way would generate trust with the general public and contribute to an improved
citizen-state relationship.
Service delivery to citizens and businesses
The government is committed to a user-oriented administration. However, the development
of a coherent policy is often undermined by a lack of coordination and common vision
between the responsible ministries. Development of e-services is slow due to lack of an
appropriate interoperability framework. Legislation on equal access to services exists, but
implementation is a challenge, particularly for citizens with disabilities. Simplification of
administrative procedures is yet to be ensured, pending the adoption of the law on general
administrative procedures.
Strategic framework for public administration reform
A new public administration reform strategy framework has been set up under the
umbrella of the 2015-2020 development strategy. It includes the 2015-2020 public
administration reform modernisation strategy and accompanying 2015-2017 action plan,
adopted in September. The strategy sets targets and measurable indicators, including fiscal
impact analysis, which is a clear step forward. The Ministry of Public Administration will
need sufficient human resources to ensure coordination and monitoring of its implementation.
The new framework also includes a strategy adopted in June 2015 on an integrated planning
system, coordinated by the Prime Minister's Office, and the new public financial management
reform strategy, which is under preparation.
Political support and commitment has visibly increased in recent months, and the Ministerial
Council chaired by the Prime Minister is providing the necessary steer and coordination. The
monitoring and reporting framework is in place, but remains to be implemented. Sufficient
resources need to be allocated especially in the Ministry of Public Administration. Financial
sustainability needs to be ensured in the 2016 budget and in the medium-term expenditure
framework.
2.3. Rule of law
Functioning of the judiciary
Kosovo's judicial system is at an early stage of developing a well-functioning justice system.
Some progress has been achieved over the past year by adopting the package of four laws
(Law on Kosovo Judicial Council, Law Kosovo Prosecutorial Council, Law on Courts, Law
on State Prosecutor).
However, the administration of justice is slow and there is insufficient accountability of
judicial officials. Judicial structures are still prone to political interference. There are concerns
that disputed appointments and unclear mandates have undermined the activities of key
institutions such as the Kosovo Judicial Council, Kosovo Prosecution Offices, and the Office
of the Chief State Prosecutor. Rule of law institutions suffer from a consistent lack of funding.
In addressing the shortcomings outlined below, Kosovo should in the coming year:
13
→ implement the justice package, including timely adoption of any secondary legislation;
→ step up financial and human resources to the judicial sector to ensure the proper
functioning of the judicial system;
→ ensure lawful and timely appointments in critical institutions, such as the Kosovo Judicial
Council and the Kosovo Prosecutorial Council;
→ further reduce the backlog of cases.
Strategic documents
The 2014-2019 strategic plan for Kosovo’s judiciary, the 2014-2019 communication strategy
and the national strategy for reducing the backlog of cases are being implemented, addressing
substantial shortcomings in the judiciary.
Management bodies
Under the Constitution, the Kosovo Judicial Council (KJC) and the Kosovo Prosecutorial
Council (KPC) are responsible for ensuring the independence and impartiality of the
judiciary. Both councils have a mixed composition. In the KJC, five out of 13 members are
elected by the members of Kosovo’s judiciary and eight members are appointed by the
Kosovo Assembly. This results in strong political interference and jeopardises the
independence of the judiciary. This has not changed with the new law as it would require
amending the Constitution. At the KPC, five out of nine members were elected by
prosecutors, whilst the other three were non-prosecutors elected by the Council itself, and one
member was ex officio – the Minister of Justice. The new law sets out a new composition,
raising the number of members from nine to 13, ten of whom are to be elected by their peers
and three by the Assembly. Also under the new law, from 1 January 2016, the KPC will be
able to control its own budgetary resources. All meetings of the KJC and the KPC are open to
the media and the public. Both councils draw up and approve annual reports on their work, as
provided for by law, but their internal reporting mechanisms still need to be improved.
Applications have been received following vacancy notices published by the KJC and the
KPC in March 2015 for Kosovo Serb judges and prosecutors, both for courts in the south and
north of Kosovo, in accordance with the political agreement between Belgrade and Pristina.
Some positions were filled in July 2015, a significant step forward in the integration of the
judiciary in the north.
The KJC and the KPC experienced significant delays in approving strategic documents,
regulations and other decisions or acts. There is still not enough capacity to draft regulations
and take decisions in full compliance with the hierarchy of normative acts. There is a lack of
capacity within the KJC and the KPC to monitor the implementation of their decisions.
Independence and impartiality
Court Presidents are responsible for the management and operations of their courts. Both the
Constitution and laws still allow political influence over the judiciary, in particular over the
KJC and related to human resources matters. The activities of KJC and the KPC were
hampered by the post-electoral political crisis, notably the political pressure on the long and
drawn out process of nominating the Chief State Prosecutor. Amendments to the new laws,
adopted in May 2015 are in line with most EU recommendations. Additional amendments
including transitional clauses are needed.
There is no functional electronic case management system. Allocation of cases to judges is
regulated and carried out by the drawing of lots. Urgent cases are allocated to the presiding
judge. Sensitive cases are being allocated, but not always dealt with. The number of judges
14
dealing with serious crimes remains low. The KJC, as the competent body to act in case of
threats to judges, should raise awareness among judges of existing protection mechanisms to
protect them.
Accountability
A code of ethics for judges, prosecutors and attorneys is in place. The KJC and the KPC are
responsible for disciplinary proceedings. Further provisions on disciplinary proceedings
need to be adopted, such as a law on the Office of the Disciplinary Counsel/Prosecutor
(ODC/ODP) and provisions on the judicial review of disciplinary decisions taken by the
Councils. The ODC/ODP initiated around 40 cases against prosecutors on disciplinary and
ethical grounds. The President of Kosovo, based on recommendations made by the KJC and
the KPC, dismissed from office one judge and one prosecutor. Five judicial administration
officers under suspicion of abuse of power were suspended and later dismissed. In addition,
one judge was suspended by the ODC due to allegations of taking bribes. Under applicable
laws, judges and prosecutors are obliged to declare their assets and gifts received, and report
any possible conflicts of interest.
Professionalism and competence
Under Kosovo’s Constitution, the President of Kosovo appoints judges and prosecutors for
an initial three-year term, at the proposal of the KJC and the KPC respectively. The entry
exam for judges and prosecutors is based on merit. The new laws foresee an obligatory initial
training for both judges and prosecutors after they have been appointed. The performance
evaluation of prosecutors with a permanent mandate should be carried out by the KPC every
third year, but has experienced significant delays. The evaluation of judges is carried out by
the Commission for Evaluation of Judges and has proceeded as planned. To date, most judges
and prosecutors that were evaluated have passed; only one judge was not proposed for
permanent appointment. Merit-based performance criteria and an evaluation system within the
initial term of appointment, including at the end of the initial training, need to be adopted to
ensure professionalism.
Quality of justice
The Kosovo Judicial Institute (KJI) is responsible for initial and continuous training.
However, the new laws give the KJC and KPC more responsibilities with regard to policy
planning and organisation of the training courses. Out of 29 candidates who graduated from
the initial legal education programme in May, 17 have been appointed as judges. The KJI, the
KJC and the KPC jointly prepare annual training curricula on the basis of a comprehensive
needs assessment. The curricula, which are divided into training modules according to
responsibilities of departments of courts and prosecutors’ offices, specify the areas to be
covered by training, including training on EU law. A new curriculum for court administrators
has been approved and relevant staff is being trained. Kosovo currently has 19.5 judges per
100 000 inhabitants. In total, there are 350 local judges and 33 EULEX judges.
The budget for Kosovo’s prosecution service and court system for 2015 is around EUR 28
million, excluding some other services, such as mediation and legal aid. The total budget
allocated to the justice system has increased to 1.7 % of the overall Kosovo budget. A
comprehensive overview of public finances allocated to the entire judicial system is however
still not publically available.
The Palace of Justice was inaugurated in March 2015, providing the necessary infrastructure
to allow for the administration of justice under the appropriate conditions. To date, the Palace
of Justice houses the Supreme Court, the Basic Court of Pristina, the Appellate Court, the
Appellate Prosecution and the Basic Prosecution of Pristina.
15
There is no official court monitoring system in place. E-Justice tools remain under
developed.
Since 2008, a mediation system is operational, with seven regional mediation centres and 701
mediators licensed by the Ministry of Justice, 163 of which are active. The number of cases
has constantly increased – between 2012 and July 2015 the mediation system dealt with 2 598
cases. While notaries are dealing with more cases, their professional skills need to be
improved. Both the mediation and notary systems require further strengthening.
Efficiency
According to the Annual Report of the State Prosecutor, at the beginning of 2015, the State
Prosecutor had 120 706 cases pending. Correspondingly, according to the Department of
Statistics of KJC, at the beginning of 2015 the number of unsolved cases was 91 545.
Concerning the backlog (cases filed before 31 December 2011), 16 090 cases were completed
at the end of 2014 out of a total of 41 038. The number of backlog cases at the beginning of
2015 was 24 948, out of which approximately 3 000 cases were completed during the first
half of 2015.
Kosovo's courts now have a clearance rate of 84 % (up from 71 %) of cases resolved within
a year. There are no figures on the disposition time (i.e. the average time from filing the case
to a decision) in Kosovo’s courts. The success of Kosovo's judiciary continues to be
hampered by a high level of latent corruption and intimidation present in rule of law and
related public institutions. The time prescribed by law to investigate cases of organised crime
and corruption is too short resulting in courts not having sufficient information to come to an
informed decision.
Fight against corruption
Kosovo is at an early stage in the fight against corruption. Some progress has been achieved
over the past year, notably in improved cooperation between the Anti-corruption Agency and
the prosecution, and in requiring officials to declare property and gifts. However, overall
progress has been limited and strong political will and commitment is needed to tackle this
phenomenon properly. A comprehensive and strategic approach is necessary to ensure real
results in fighting endemic corruption in Kosovo. A track record of successful prosecution
and convictions would represent real progress. In addressing the shortcomings outlined below,
the government of Kosovo should pay particular attention in the coming year to:
→ prioritising handling of high-level corruption cases, especially in public procurement, with
a view to securing final convictions;
→ strengthening the cooperation between police and prosecution through joint investigation
teams on high-level corruption cases;
→ concluding the development of an efficient system to monitor the track record of case
handling from investigation to final court rulings;
→ revising the conflict of interest law and all related laws and regulations to bring in line
with European standards. In particular, categories of public officials should be clearly
defined and measures on preventing and sanctioning conflicts of interest and regulating
"revolving doors" need to be adopted.
Track record
Kosovo has not yet established a track record of investigations, prosecutions and
convictions in corruption cases. In 2014, the Anti-corruption Agency conducted
administrative procedures in a total of 304 cases, of which 56 were carried over from previous
16
years and 248 were new. The rare investigations into high-level corruption have so far not
resulted in final convictions.
The failure to conduct effective financial investigations is closely linked to undue political
influence and limited capacity. Kosovo’s expertise in tackling complex financial
investigations and to effectively confiscate criminal assets is still limited. Undue political
influence on law enforcement and judicial bodies continues. Political authorities should
ensure that law enforcement bodies are fully empowered to act effectively and impartially
when investigating corruption allegations.
Ten political parties failed to submit their party financing and electoral campaign
financing reports during the local elections, but all parties did so for the general elections in
2014. So far, no irregularities have been detected. Auditors at the Central Election
Commission are not independent as they are selected by the Assembly. In order to prevent
conflicts of interest, such auditing should be external. Whistle-blowing and witness
protection need to be properly implemented, including better regional and international
cooperation.
Declarations of assets by senior officials are made public on the Anti-corruption Agency's
website and 98.3 % of senior public officials have reported their assets in 2015. Criminal
charges were raised against the 71 senior public officials, who did not declare their assets. In
2015 the Anti-corruption Agency selected 20 % of officials for a review of their property
ownership. This is a positive development but could be further improved by prioritising
corruption-prone positions.
Kosovo should consider measures allowing it to effectively investigate inexplicable wealth.
Institutional framework
The four main institutions involved in the fight against corruption in Kosovo are the Anti-
corruption Agency, an independent and specialised agency; the National Anti-corruption
Council, a consultative body chaired by the President of Kosovo; the National Anti-corruption
Coordinator, who is assigned by the Chief State Prosecutor; and the Directorate for
Investigation of Economic Crimes and Corruption within the Kosovo police. The Anti-
corruption Agency does not have full investigative powers: rather its role is in prevention and
preliminary administrative investigations, in line with international standards. There is a
general disconnect and lack of integration between the main anti-corruption bodies in Kosovo,
which suffer from overlapping mandates and an unclear division of tasks.
On prevention, the Anti-corruption Agency launched an anti-corruption awareness campaign
in December 2014. Citizens have been encouraged to report corrupt behaviour to rule of law
agencies, but more remains to be done. While civil society is involved in developing and
monitoring anti-corruption policy, consultation needs to be improved through regular,
transparent and constructive communication.
Public procurement bodies have largely failed to ensure systematic monitoring and review of
procurement decisions. It is essential that new competent board members are appointed to
professionalise and de-politicise the procurement system.
On law enforcement, a prosecutor was assigned to each basic court prosecutor’s office to
increase coordination and communication between the State Prosecutor and the Anti-
corruption Agency. Over 70 % of cases for which the Agency conducted preliminary
investigations were dropped, mainly because prosecutors did not find sufficient grounds to
continue investigations. The Agency's investigators need to increase the quality of their
17
reporting, while prosecutors need to demonstrate the necessary capacity and willingness to
pursue cases.
More structured cooperation between law enforcement agencies was achieved with the
appointment of a National Coordinator against Economic Crime. The anti-corruption task
force with 30 investigators, eight prosecutors and five experts focusing on high-level
corruption and financial crime cases, should be further strengthened to improve inter-agency
co-operation. A positive step was the adoption of the standard operating procedure on
prioritising serious crime cases in 2014, which resulted in nine serious crime cases being
currently treated as priority, including on corruption and money laundering charges. Two of
these cases have been sent to court.
Legal framework
The legal anti-corruption framework has been consolidated with amendments to the law on
the financing of political parties and the law on the declaration, origin and control of the
property of senior public officials and the declaration, origin and control of gifts for all
official persons. The latter extended the list of persons obliged to declare their property and
lowered the threshold for the value of movable property to be declared from EUR 5 000 to
EUR 3 000 and has led to an increased number of declarations of properties and gifts. These
laws are in line with the relevant provisions of the criminal code, ensuring that corruption-
related offences are criminalised. In this way, Kosovo has aligned itself with the acquis.
Kosovo’s law on conflicts of interest has yet to be revised. The scope of the law should not
exclude certain categories of public officials such as political advisers, but instead define
public officials in line with European standards. Equally, the law should indicate exact
circumstances in which public officials may take on additional employment and
appointments. Clear procedures to identify, manage and resolve conflicts of interest should be
established in the law. Relevant legislation needs to be harmonised accordingly, in particular
on the sanctioning regime, including disciplinary measures.
The regulatory framework for political party financing has undergone many changes. The
closing of various loopholes has improved the process. However, major challenges remain in
this area, namely shortcomings in the way rules are implemented, a lack of monitoring and the
absence of regulatory bodies. In general, the financing of political parties lacks proper control
mechanisms, which would improve transparency and limit misconduct by political parties.
Strategic framework
Kosovo is implementing its 2013-2017 anti-corruption strategy and action plan, under the
monitoring of the Anti-corruption Agency. However, inadequate financing and a lack of any
measurable impact indicators are seriously undermining results. Implementation of the 2014-
2018 strategy and action plan for preventing and combating the informal economy, money
laundering, terrorist financing and other financial crimes is on schedule. In addition, sector
action plans are in place to fight corruption in particularly vulnerable areas (customs, police,
tax administration etc.). A corruption risk assessment of the health, education, judiciary,
energy, and mining sectors was published in 2015.
18
Fight against organised crime
Kosovo is at an early stage in the fight against organised crime. Some progress has been
made over the past year in inter-institutional cooperation and information exchange among
law enforcement agencies on investigations. Kosovo has also stepped up its efforts to fight
terrorism and the phenomenon of foreign fighters. Overall, the focus on strategies and action
plans should not obscure the need for real results in fighting endemic organised crime.
The number of final convictions and financial investigations remains low. Confiscations of
assets are rarely applied. In addressing the shortcomings outlined below, the government
should pay particular attention in the coming year to:
→ pursuing organised crime-related investigations with the aim of securing final convictions,
thus beginning to dismantle criminal groups active in Kosovo;
→ systematically applying tools for financial investigations and asset confiscations in order
to increase the number of permanent confiscations, and building up expertise at all levels;
→ fully developing an intelligence-led policing approach and collecting, harmonising,
analysing and using relevant criminal statistics, including through better inter-agency
cooperation.
Track record
The rate of convictions in cases against human trafficking remains low, despite Kosovo
being a source and transit country for trafficked women and children. Kosovo has worked
closely with Europol on the dismantling of migrant smuggling networks.
On drug trafficking, drug seizures and conviction rates remain low. A number of
investigations and arrests have been made as part of efforts to fight and prevent the spread of
terrorism in Kosovo. Implementation of applicable laws, secondary legislation and
regulations on money laundering and financial crime is still insufficient, despite progress
on putting appropriate systems in place. There is a policy of systematic serious financial
investigations, but results are lacking. The rate of confiscation and sequestration of
criminal assets remains low. Statistics on sequestration and confiscation are still not
sufficiently harmonised between Prosecutorial and Judicial Council, the Agency for
Managing the Sequestrated and Confiscated Assets and other agencies. While the overall
estimated value of frozen and temporarily confiscated assets has increased, final court rulings
are necessary to make sure that illicit assets are confiscated permanently.
Events in Kumanovo (the former Yugoslav Republic of Macedonia) and the involvement of
Kosovo citizens in armed violence highlight the continued existence of armed groups in the
region, threatening regional inter-ethnic stability. With military-grade weaponry, military
training and command structures, such groups have the capacity to undermine stability. Their
involvement in organised criminal activities, such as arms smuggling, and the apparent
impunity with which they are able to operate across borders are serious concerns. The
government, law enforcement agencies and the judicial system need to take swift action to
dismantle these networks.
Institutional and operational capacity
Kosovo’s police has around 9 000 staff, which makes an overall of approximately 500
policemen per 100 000 inhabitants. Approximately 83 % of police staff are ethnic Albanians
and 13 % ethnic Serbs, with the remainder coming from other communities. Kosovo’s police
force is structured in a way that provides for a career path and evaluation mechanism and has
also adopted a code of ethics. The Kosovo Academy for Public Safety is responsible for basic
19
and specialised training and offers a bachelor’s programme in public safety. The Kosovo
police has specialised units dealing with the various aspects of organised crime. The police
inspectorate is responsible for the prevention, detection, documentation and investigation of
criminal offences of police officers regardless of position or rank.
12 out of 15 positions for local prosecutors in Kosovo’s Special Prosecution Office have been
filled. However, the Special Prosecution Office does not have the required human resources to
cope with the expected workload in view of the planned handover of cases from EULEX.
Local prosecutors are dedicated but often do not have the necessary technical expertise,
especially as concerns investigations of war crimes. Cooperation between local and EULEX
prosecutors has improved.
Intelligence-led policing should be strengthened further, including with human resources and
managerial guidance. The new Kosovo police information system has yet to be used by all
levels of the Kosovo police, which would allow for improved risk analysis and proactive
operations. Kosovo is not a member of Interpol, though it applied in April 2015. It currently
participates in Interpol structures through UN intermediaries. Kosovo does not have a
cooperation agreement with Europol. Kosovo’s police has been involved, upon request of the
leading Member States, in three cross-border operations supported by Europol.
The Kosovo Forensic Agency and its DNA and serology laboratory have all the necessary
equipment and instruments to carry out DNA analysis, maintained and calibrated according to
international standards. The Kosovo Forensic Agency has an internationally accessible DNA
database, which enables research and electronic comparison of DNA profiles.
In December 2014, Kosovo’s police, custom authorities, Financial Intelligence Unit and the
Kosovo Prosecutorial Council signed a Memorandum of Understanding, agreeing on how to
improve cooperation and the exchange of data. Kosovo signed agreements with Albania on
cross-border cooperation and hot pursuit, while similar agreements have also been signed with
the former Yugoslav Republic of Macedonia.
Legal framework
There has not yet been any assessment of the alignment of Kosovo's criminal code with
European standards. An appropriate legal framework for witness protection is in place in the
form of the law on witness protection and the accompanying administrative instructions.
Legislation on the confiscation of proceeds of crime is mostly in line with the acquis, but
implementation remains poor. The law on the interception of telecommunications was
adopted in May 2015, setting out appropriate investigation measures to help identify and
prosecute suspects involved in serious criminal offences, with due respect for relevant human
rights. In January 2015, the Kosovo Assembly approved the law criminalising the joining of
armed conflicts outside of Kosovo, in line with the relevant UN Resolution.
Strategic framework
Kosovo's strategies and action plans to combat organised crime are largely aligned with EU
best practices. Kosovo produced a strategic organised crime threat assessment in 2013. The
assessment does not fully follow Europol's SOCTA methodology, but does provide the basis
for strategic decision-making and law enforcement. Training has been provided in 2015 on
the Europol SOCTA methodology.
To date Kosovo has implemented some 80 % of the action plan to accompany its 2012-2017
national strategy against organised crime. Additional national strategies and action plans are
in place on the prevention and combat of the informal economy, money laundering, terrorism,
20
radicalisation and extremism, and terrorist financing, human trafficking, cybersecurity and
narcotics trafficking.
Fight against terrorism
Kosovo has been affected by the phenomenon of foreign terrorist fighters and radicalisation.
Kosovo has stepped up its efforts in the fight against terrorism. As well as the law on foreign
terrorist fighters, it also adopted a strategy and action plan on prevention of violent extremism
and radicalisation that may lead to terrorism. The phenomenon of foreign terrorist fighters
needs a dedicated approach by the intelligence and law enforcement community and a
coherent judicial policy towards offenders.
2.4. Human rights and the protection of minorities
The legal framework broadly guarantees the protection of human and fundamental rights in
line with European standards. Some progress was made in this area, notably with the
incorporation of international standards into the legal framework, although Kosovo cannot
currently formally associate itself with international human rights instruments or
institutions. Implementation of human rights is hindered by a lack of resources and political
commitment, including at local level. The adoption of the package of human rights laws
strengthened the institutional set-up and clarified the roles of various institutions.
Shortcomings particularly affect the following areas:
• Gender-based violence and women’s limited access to property ownership significantly
hamper their full enjoyment of rights. Similarly, the rights of persons with disabilities
continue to be hindered by inadequate institutional support and health services, and poor
accessibility.
• Cases of verbal and physical assaults against lesbian, gay, bisexual, transgender and
intersex (LGBTI) persons are rarely investigated. This needs to change.
• Legislation and strategies on the rights of persons belonging to minorities and their
protection throughout Kosovo need to be rigorously implemented.
• Protection of cultural heritage, including cooperation between the Serbian Orthodox
Church and Kosovo authorities, remains problematic and legislation to address illegal
construction needs to be implemented and enforced.
Kosovo’s Constitution provides for the direct applicability in Kosovo of many international
human rights instruments, which form an integral part of its legal framework. Progress
continues to be made in aligning legislation with such instruments and Kosovo continues its
practice of ad hoc reporting.
On the promotion and enforcement of human rights, some progress has been made with
the adoption of the package of human rights laws (the laws on the Ombudsperson, gender
equality and protection from discrimination). This strengthened the institutional set-up and
clarified the roles of various civil and public institutions (e.g. the Ombudsperson's Office and
the Agency for Gender Equality). Proper implementation of these laws, including training and
establishing a judicial track record of discrimination cases, is crucial for the effective
promotion and enforcement of human rights throughout Kosovo. The human rights strategy
needs to be updated. Human rights issues need increased political and financial commitment
at all levels. Continued donor dependency of the government in this sector undermines
ownership and effective delivery.
21
As regards the prevention of torture and ill treatment, no violations of internationally
recognised human rights standards have been formally identified during the reporting period.
Through amending the law on the Ombudsperson, Kosovo has aligned with the requirements
of the Optional Protocol to the Convention Against Torture, establishing the role of the
Ombudsperson as the National Preventive Mechanism, thereby strengthening its institutional
framework with regard to the human rights of detainees.
Within the prison system, there is overall good compliance with the UN Standard Minimum
Rules for the Treatment of Prisoners and European Prison Rules, while further efforts are
necessary to ensure adequate treatment of prisoners in solitary confinement and with regards
to aligning with these standards. The housing of prisoners awaiting trial and those convicted
for minor offences together with long-term prisoners remains a concern. The
Mitrovicë/Mitrovica Detention Centre which should only hold pre-trial detainees, still houses
convicted prisoners. Recommendations stemming from inspections at Kosovo Correctional
Service facilities by the Internal Inspectorate of the Ministry of Justice are not systematically
addressed. Serious concerns remain over corruption and contraband goods in detention
centres and some correctional centres, as well as on privileges afforded to certain high-profile
detainees. The government needs to urgently address this. Inadequate staffing levels, in
particular at the high security prison, remain a concern. There is also concern over the
politicisation of appointments to the prison service.
The development of protection of personal data is at an early stage. Kosovo has an
independent data protection authority – the National Agency for the Protection of Personal
Data (NAPPD) – that contributes to the implementation of EU standards in the area.
However, further strengthening of its capabilities including with qualified staff and financial
resources is necessary. The institutional and legal framework for data protection and access to
public information has to be established and regularised. Out of 38 municipalities, 35 now
have data protection officers. The NAPPD carried out an increasing number of inspections
and repeat inspections. A significant increase in the number of complaints from members of
the public suggests increased awareness.
Legal provisions are in place in the field of freedom of thought, conscience and religion.
The Orthodox seminary in Prizren has expanded its membership and continues to function
well. Modalities on how to support the reconstruction of Serbian Orthodox Church sites, left
unfinished by the Reconstruction Implementation Commission, need to be agreed upon.
Interaction among religious leaders of all faiths has become more regular. Following the
recent decision by the Appellate Panel of the Special Chamber of the Supreme Court, there is
a need for intensified and renewed efforts to find a solution to the longstanding land dispute
between the municipality of Deçan/Dečane and the Visoki Dečani Monastery, to reduce
continuous tensions between the monastery, municipality and local community. There were
no reports of any serious incidents linked to the protection of historical and religious sites
under the responsibility of the Kosovo police. Continuing incidents of petty theft and
vandalism at religious heritage sites need to be followed up effectively. The authorities have
as a rule responded appropriately to such incidents, although a statement after an incident of
graffiti at the Visoki Dečani Monastery aggravated inter-communal tensions.
22
Freedom of Expression
Kosovo has some level of preparation on the right to freedom of expression; over the past
year there has been no progress in this area. There were no legislative developments on the
regulation of media ownership and transparency. No solution was reached on the sustainable
funding of the public broadcaster, leaving it vulnerable to political pressure and influence.
Implementation remains a serious challenge. The overall environment is not conducive to the
full exercise of freedom of expression. In addressing the shortcomings outlined below, in the
coming year, Kosovo should in particular:
→ ensure that cases of physical attacks against journalists and other forms of pressure are
thoroughly investigated;
→ ensure a sustainable financial solution for the public broadcaster and provide for
transparent information on media ownership.
Intimidation of journalists
Three serious physical assaults against journalists took place during the reporting period. A
total of 26 cases of attacks, threats and obstruction of journalists are under investigation. In
one case, the editor of a newspaper and chair of the Association of the Journalists were
physically attacked by the newspaper owner following the disclosure of non-payment of
newspaper staff’s salaries. In another case, a bomb was thrown at the premises of a Serb
online portal in Mitrovicë/Mitrovica North. A more systematic response, including public
denouncement, prompt investigation and timely adjudication, would strengthen the protection
of journalists. Investigations are slow and the record of final convictions low, with no
convictions in 2014.
Legislative environment
While freedom of media and expression are constitutionally guaranteed, and legislation on
libel, hate speech and defamation are in line with European Court of Human Rights case law,
effective implementation remains a challenge. The legislative and institutional framework in
this area remains fragmented and ineffective. Journalists’ right to conscientious objection and
the public’s right to reply and correction remain unregulated.
Implementation of legislation/institutions
Two members of non-majority communities were appointed, completing the board of the
Independent Media Commission (IMC). The IMC still failed to take decisions in good time,
undermining its targets for 2014, including timely preparation for the process of the digital
switchover. The IMC needs to complete secondary legislation in line with EU Directives and
more systematically monitor the content of audio-visual media. As a result of government
cuts across the board, the IMC is facing difficulties in meeting its financial obligations,
including for capital investment.
Freedom of expression online is not monitored by either the IMC or the Press Council.
Although this creates an ideal environment for online media, it also detracts from the privacy
of individuals, leading to many cases of alleged hate speech, libel and defamation.
Public service broadcaster
The public service broadcaster, Radio Television of Kosovo (RTK), is directly publicly
financed. The April 2015 deadline for adopting legislation to solve the funding issue was
missed. In the autumn of 2014, several protests were organised by the public broadcaster's
union, which accused the RTK of mismanagement, nepotism and corruption. In April, the
Assembly called on the Auditor General to carry out a detailed financial and performance
23
audit of the public broadcaster. In July, the Assembly appointed four out of five members to
the RTK Board, amid concerns that they do not meet the required professional criteria.
Economic factors
The economic sustainability of the media is not ensured. Media ownership structures, in
particular for print and online media, remain unclear. The lack of a strong private advertising
industry makes private broadcasters dependent on international donors and very few are able
to operate without political party support. Many Serbian-language media outlets risk closure
because their advertising market is too small to be economically viable.
Professional organisations / professional conditions
The Association of Journalists of Kosovo, representing most journalists, has been very active
in condemning pressures and in advocating for rights. Journalists tend to have low wages and
often work without contracts, vulnerable to corruption and prone to self-censorship. The
independence of journalists and editors and the protection of professional standards in
journalism remain unregulated. Editorial codes of conduct at individual media outlets would
be helpful.
Freedom of assembly and association is guaranteed by the Constitution and citizens have
been exercising it freely, including by staging protests against various levels of government.
There was no progress on property rights. The government’s Property Rights Coordinator
position has been vacant since January 2015. A strategy on property rights is being developed
which, once approved, may remove the need for a coordinator. The implementation of the
Law on Treatment of Construction without a Permit faces a number of problems whereby
documents required by law do not require proof of ownership over the land parcel when
submitting an application for legalisation nor is the relevant Ministry obliged to check land
registry records in the process of legalisation. Residents (in particular minority communities
and displaced persons) were not informed in time about the process of legalisation. Concerns
remain with regard to treatment of unpermitted constructions belonging to displaced persons
who have failed to apply, since such properties will be included in the demolition list.
Decisions by the Kosovo Property Agency (KPA) on applications to demolish illegal
constructions in private property have not been implemented due to a lack of financial
resources, seriously affecting the rights of internally displaced persons. There has been some
improvement on complying with legal obligations during expropriations. However, concerns
remain over language compliance and notification of vulnerable groups in the expropriation
process.
Kosovo needs to solve all conflict-related property claims. The Law on the Property
Comparison and Verification Agency is still pending. The Property Claims Commission of
the KPA has reached a decision in all cases, albeit with technical inconsistencies in some of
them. The KPA continues to clear illegally occupied properties south of the Ibër/Ibar river.
The strategy to regularise informal settlements is still pending. Some relatively limited
progress has been noted in addressing issues of social housing. Provision of social housing is
hampered by the failure of institutions at central level to adopt a three-year Kosovo-wide
strategy.
As regards non-discrimination, the adoption in May 2015 of the Law on the Protection from
Discrimination is a major step forward. The Ombudsperson now has a mandate to act as an
equality body. Hate crimes are proscribed in Art. 147 of the criminal code. The performance
of Kosovo institutions in processing and investigating cases of hate speech, targeting mainly
members of the LGBTI community and ethnic minorities, remains poor. The Kosovo
24
Prosecutorial Council’s tracking mechanism needs to be extended to cover cases of all kinds
of discrimination, not only those based on ethnicity.
Kosovo's legal framework on equality between women and men improved through the
adoption in May of the Law on Gender Equality in accordance with international standards.
However, significant structural challenges remain and implementation will require serious
effort. The impact of the inter-institutional secretariat monitoring implementation of the
action plan on UN Security Council Resolution 1325 has until now been limited. The role of
the Agency for Gender Equality in policy-making needs to be enhanced. Women remain
under-represented in decision-making positions, including at municipal level. At national
level, the situation worsened, as only two ministers out of 22 are women and only two out of
14 chairs of parliamentary committees.
Every police station has a unit responsible for gender-based violence. Despite the recent
appointment of a national coordinator for domestic violence, no progress has been made on
combating domestic and gender-based violence. The absence of a system of regular data
collection across institutions undermines the ability to cross-track and monitor cases in
investigation and judiciary proceedings. Kosovo needs to evaluate the implementation of the
2011–2014 strategy and action plan against domestic violence before drafting a new one. The
anti-trafficking and domestic violence help-line should provide assistance to non-Albanian-
speaking victims, including ensuring similar services for residents in the northern
municipalities. The mandate of the National Council for the survivors of sexual violence
during the war was extended to address the need for comprehensive support for surviving
victims. Effective implementation of women’s rights to inheritance remains limited, despite
the existence of legal provisions governing this issue. Further efforts need to be made by
cadastral and registration officers on registration of all co-owners of property, including
women, in order to strengthen the protection of their rights.
On the rights of the child, the legal framework is in place but implementation is weak at both
national and local level. An assessment of the implementation of the 2009-2013 strategy and
action plan on children's rights needs to be carried out and results taken into consideration
when developing a new strategy. The successful development of policies depends on the
availability of sex and age-disaggregated data. A law on child protection should avoid
duplication of existing legislation on children's rights. Municipal Child Rights Co-ordinators
need capacity building and sufficient budget. Awareness-raising and training on rights of the
child need to continue and the Ombudsperson’s Office needs to increase its activities in this
field. Physical or any other form of humiliating punishment in educational and training
institutions is prohibited by law but not in other settings such as public spaces or family.
Increased awareness among judges and prosecutors led to a systematic reduction of pre-trial
detention periods for juveniles. However, the legal framework needs to be revised to
accommodate the UN Committee on the Rights of the Child recommendations on reducing
pre-trial detention to six months.
On the integration of persons with disabilities, Kosovo needs to improve the
implementation of the 2013-2023 strategy for the rights of persons with disabilities and its
2013-2015 action plan. Health services and support for the rehabilitation of persons with
disabilities remain insufficient and physical access to public institutions remains a challenge.
The unsubstantiated removal of more than 1 000 members of the deaf community from the
disability pension scheme is a concern. The availability of personal assistants for children
with disabilities needs to be ensured. The National Disability Council has so far failed to
promote the rights of persons with disabilities and needs stronger support from the
government's Office for Good Governance to enable it to exercise its coordinating role in
implementing the strategy and action plan.
25
On the rights of lesbian, gay, bisexual, transgender and intersex (LGBTI) persons, the
package of human rights laws has addressed gaps in legislation on the protection of sexual
orientation and/or gender identity. Cases of verbal and physical assaults against the LGBTI
community are rarely addressed adequately by the authorities. Despite meeting regularly, the
advisory and coordinating group for the rights of the LGBTI community has yet to produce
concrete results. The government has started awareness-raising training for civil servants, law
enforcement officials, the judiciary, media and teachers. A pride walk to mark the
international day against homophobia took place for the second time in Pristina on 17 May,
with no incidents. However, Kosovo’s political leaders need to do more to raise awareness
and promote tolerance.
On labour and trade union rights, the General Collective Agreement signed in March 2014
is still not implemented due to lack of budget. This triggered a wave of protests across
different sectors. Implementation of the law on strikes remains unsatisfactory, due to a lack of
communication between strike organisers and the authorities. Representation of employees
within the Social and Economic Council is still challenged by the majority of trade unions and
amendments to the law on the Social and Economic Council need to clarify criteria and
procedures. (See also 4.1.8 — Employment and social policies, public health policy)
On procedural rights, the suspected, accused persons and victims of crime in Kosovo enjoy
solid protection under the legislation (the Criminal Procedure Code, Law on Police, Law on
the Kosovo Police Inspectorate, Law on Crime Victim Compensation as well as the Law on
Free Legal Aid). They have the right to interpretation and translation, the right to information
about rights, the right to legal advice before and at trial and to legal aid, and the right for the
detained person to communicate with family members, employers and consular authorities.
There is a strong political will for fair implementation of these rules but more training is
needed to secure Kosovo citizen's procedural rights in practice.
Kosovo's legal framework for safeguarding and protecting minorities is comprehensive,
although implementation remains a challenge. The political impasse following the dismissal
of the Minister for Communities and Return in early February 2015 affected the functioning
of the ministry. Appointment of a new minister in April led to renewed commitment to
identifying a durable solution for the issue of Kosovo displaced persons in the region, notably
through an Inter-ministerial Commission on Returns. The Technical Working Group for the
Framework Convention on National Minorities was established but has only met once in June
2015. The Office of Community Affairs needs to take on a more robust role on minority
policy, including on matters dealt with by the technical working group and the post-2015
policy for Roma, Ashkali and Egyptians. The Consultative Council for Communities met
regularly and set up five sector-based working groups, but urgently needs increased funding
and support to function effectively and have its recommendations taken into account.
Kosovo needs to continue improving the employment of non-majority communities within the
Kosovo civil service and public enterprises. A permanent solution to the issue of acceptance
of diplomas of the University in Mitrovicë/Mitrovica must be found to enable members of the
non-majority communities to better integrate, including through employment in government
institutions. Significant challenges remain in access to services in official languages both at
the central and municipal level, including languages used by minority communities. The
Office of the Language Commissioner continued to carry out its duties in a satisfactory
manner in spite of limited financial and human resources, including through increased
cooperation with other institutions. The Office has yet to establish relations with the four
northern municipalities.
26
Incidents at a football match between Serbia and Albania in October 2014 led to a short but
sharp increase in inter-ethnic incidents. While the overall security situation for non-majority
communities remains relatively stable, an increasing trend of incidents occurred targeting the
Kosovo Serb community residing in western Kosovo, with frequent thefts from homes
causing a heightened sense of insecurity within the affected community. Kosovo’s police and
judicial authorities need to develop a better understanding of what constitutes an inter-
ethnically motivated incident. Efforts are still needed to further stabilise and normalise inter-
ethnic relations. Incidents and crimes targeting members of minorities and their property
should be investigated and prosecuted thoroughly and promptly.
As regards the Roma, Ashkali and Egyptian communities, the 2009-2015 strategy and
action plan for the integration of Roma, Ashkali and Egyptian communities continued to be
implemented. The government must demonstrate commitment in practice to continue
developing and drafting credible, realistic and measurable post-2015 policy commitments. All
relevant stakeholders, including civil society and members of parliament representing the
three communities need to be involved and recommendations incorporated. 12 municipalities
adopted local action plans on the integration of the three communities. The learning centres
have played a positive role in reducing the school drop-out rates. The Roma, Ashkali and
Egyptian communities have the same access to healthcare services as other citizens and the
Ministry of Community and Returns sets aside budget for housing. Members of these
communities continue to face difficult living conditions, social exclusion and frequent
discrimination, while child labour and early marriages continue to be prevalent. Access to
labour market is difficult and informal employment prevails. Active measures to include these
communities in the job market need to be pursued. Progress has been made with regard to
solving registration problems for children and the government extended its assistance to the
registration process to over 600 displaced Roma, Ashkali and Egyptians currently in
Montenegro. In the absence of identity documents, Kosovo has yet to produce reliable data on
its Roma, Ashkali and Egyptian communities.
Authorities at local and central level did not do enough to facilitate return and reintegration of
refugees and internally displaced persons (IDPs). Illegal occupation of residential,
agricultural and commercial property continues to affect the property rights of IDPs and
hinders returns. Municipalities are still not taking the initiative to collect and maintain data on
numbers and locations of IDPs and returnees. Greater commitment at local level is urgently
needed. Figures from the reporting period show some of the lowest number of voluntary
returns (around 800) since 2000. A lack of government commitment and funding, together
with poor economic prospects, create an environment less conducive to returns.
On cultural rights, cooperation between the Kosovo authorities and the Serbian Orthodox
Church within the Implementation and Monitoring Council (IMC) continues, although
meetings have become less regular and the Ministry of Culture has become less involved. In
the interest of sustainability, the government should plan for and allocate necessary funds for
the functioning of the IMC secretariat. The Religious and Cultural Heritage Unit of the
Kosovo police fulfils its mandate, in four regions, to protect Serbian religious and cultural
heritage sites with 205 officers. Ongoing challenges include improving communication with
the resident Orthodox clergy and the provision of sufficient equipment.
The Village Council of Velika Hoča/Hoçë e Madhe was established and a budget was
allocated, marking the first step of the implementation of the law. With limited municipal
capacity, central-level guidance continues to be needed to ensure full implementation of these
laws. There has been progress in implementing the Law on the Historic Centre of Prizren with
equipment and premises provided for the Cultural Heritage Council, although funds have yet
to be allocated. Incidents of illegal demolition of cultural heritage have continued. The task
27
force set up last year to deal with illegal construction in Prizren, has been reinvigorated but
has to date not delivered concrete action. More efforts are needed to investigate violations and
sanction perpetrators. Concrete results in countering illegal construction, demolition and
adverse development are needed to demonstrate the Government's commitment to protecting
cultural heritage
Of particular concern was an attempt, through the introduction of a draft law on cultural
heritage, to undermine legislation deriving from the Comprehensive Settlement Proposal
(CSP), which establishes specific rights and privileges for the Serbian Orthodox Church
(SOC). The draft was quickly withdrawn but is expected to be soon introduced again. Kosovo
needs to demonstrate its commitment to respect legal provisions deriving from the CSP and
offer assurances to the SOC that its rights, privileges and identity will not be challenged.
2.5. Regional issues and international obligations
In August 2015, the Kosovo Assembly adopted constitutional amendments and passed the
necessary legislation creating the conditions for the establishment of the Specialist Chambers
and Specialist Prosecution Office to follow up on allegations of grave trans-boundary and
international crimes committed during and after the conflict in Kosovo, as relating to those
reported in the 2011 Council of Europe Parliamentary Assembly report. The Chambers will
be subject to Kosovo law, but will be located outside of Kosovo. The Kosovo authorities
should now work on completing the regulatory framework.
Kosovo has set up a war crimes department within its Special Prosecution Office. However,
the department does not have enough prosecutors to carry out its current tasks, which would
increase when EULEX investigations and cases are handed over. The Kosovo police war
crimes investigation unit has received additional staff. However, the lack of investigators with
an ethnic Serb background, limited criminal intelligence analysis staff, a lack of language and
translation capacity and a lack of basic equipment such as vehicles and computers mean that
the unit cannot function properly. EULEX is supporting Kosovo in building up the capacity to
effectively take over war crimes investigations and prosecution. In most pending war crimes
cases, the suspects are ethnic Serbs residing mainly in Serbia. Given the political climate, the
local unit will not be able to deal with these cases independently. In the rest of the cases (166)
the suspects are ethnic Albanians and usually ex-KLA members. There is concern over the
capacity and willingness to investigate these cases.
The unresolved fate of missing persons from the conflicts of the 1990s remains a
humanitarian concern. As of August 2015, a total of 10 814 persons were still missing
according to the International Committee of the Red Cross. Of these, 1 670 cases relate to the
conflict in Kosovo. Ascertaining the fate of missing persons remains vital for regional
reconciliation and stability. The inter-ministerial working group on dealing with the past,
tasked with drafting the strategy on this issue, needs to be more active and produce concrete
results, with a special emphasis on victims groups and transitional justice. The governmental
commission on missing persons appointed municipal focal points. Pristina's dialogue with
Belgrade, through the working group on missing persons, chaired by the International
Committee of the Red Cross, has not made significant progress. The Pristina delegation to the
working group is currently incomplete and the new head needs to be appointed. Kosovo needs
to engage more pro-actively and provide information from its own sources. High-level
political support is needed to address the issue of the fate and whereabouts of missing
persons. Following the completion of the exhumation process at the gravesite located in
Rudnica, Raška (Serbia), human remains were identified and transferred to Kosovo.
28
Kosovo’s Department of Forensic Medicine (DFM) does not, despite some progress, have the
capacity to meet the standards required for sustainable forensic practice, including in forensic
anthropology and toxicology. Coordination and cooperation between the governmental
commission on missing persons and the DFM needs to improve. Capacity needs to be
strengthened and staff from non-ethnic Albanian communities integrated.
The Commission and the DFM need to find a sustainable solution and allocate resources to
continue data entry in the ante-mortem/post-mortem database. The lack of progress on this
issue prevents the government from assuming its responsibility to establish, maintain and
manage the list of missing persons, in compliance with the law on missing persons. No
progress has been made regarding the unidentified human remains stored at the Pristina
morgue for which forensic action has been exhausted.
Regional cooperation and good neighbourly relations form an essential part of Kosovo's
process of moving towards the EU. Kosovo participates in several regional organisations,
further to arrangements on regional representation and cooperation agreed with Belgrade in
February 2012. However, despite government efforts, Kosovo is still not represented in all
regional organisations, for instance the Southeast European Law Enforcement Centre.
A fresh impetus has been given to regional cooperation through the 'Berlin process' and the
Western Balkan six initiative, intensifying cooperation among the Western Balkan countries
and with the EU, notably regarding the connectivity agenda. In April, the Western Balkan
six countries reached an agreement on the core transport network and in June 2015 on
extending three Trans-European Transport Networks core corridors to the Western Balkans.
They also identified the priority projects along sections of these corridors to be implemented
by 2020. To ensure sustainability and achieve short term results, the countries agreed to
implement before the next summit in Paris a number of 'soft' measures such as aligning and
simplifying border crossing procedures, road safety and maintenance schemes.
Kosovo has further improved its relations with Albania. An agreement on mutual cooperation
was signed during Prime Minister Mustafa’s visit to Tirana in March 2015. The agreement
includes a wide range of protocols and memoranda on regional and cross-border cooperation
in a variety of sectors.
There are no official relations with Bosnia and Herzegovina as the latter does not recognise
Kosovo's independence. A reciprocal visa regime is in place.
Relations with the former Yugoslav Republic of Macedonia have remained constructive. A
memorandum of cooperation between the public prosecutors of both countries in combating
cross-border crime and terrorism was signed in late December. An agreement on the
encouragement and reciprocal protection of investments and a protocol on cooperation in the
field of diplomatic education were signed in Skopje in January. Following allegations of
involvement of Kosovo citizens in the attack on the border police station in Goshince
(21 April) and in the incidents in Kumanovo (9-10 May), the government of Kosovo
condemned the violence and called for territorial integrity to be respected. The government
also called for the full implementation of the Ohrid Framework Agreement.
A joint commission on border demarcation with Montenegro concluded its work in June
2015 and Ministers signed the border agreement during the August Western Balkans Summit
(Vienna), now pending parliamentary approval by both. There were no developments
concerning the constitutional recognition of the Montenegrin minority in Kosovo.
Kosovo has maintained very close relations with Turkey. Negotiations on a readmission
agreement are ongoing with a view to concluding it by the end of the year.
29
3 NORMALISATION OF RELATIONS BETWEEN KOSOVO AND SERBIA
Kosovo and Serbia have remained engaged in the implementation of the agreements reached
in the dialogue, in particular the April 2013 ‘First agreement of principles governing the
normalisation of relations’. Work under the EU-facilitated dialogue has continued at technical
level throughout the reporting period. The high-level dialogue resumed in February 2015, and
four meetings attended by Prime Ministers Mustafa and Vučić were held in April, June and
August.
Key agreements were finalised on 25 August 2015. General principles/main elements on the
establishment of the Association/Community of Serb majority municipalities in Kosovo
through the adoption of its Statute were agreed. The text defines the legal framework of the
Association/Community, its objectives, organisational structure, relations with central
authorities, legal capacity, budget and financial support. It also provides the modalities/next
steps for its establishment. In the field of energy, two new Serbian energy companies (one
dealing with import, export and transit; the other with supply and distribution services) were
established in Kosovo. These companies are proceeding with their internal organisation
before being able to apply for licenses. An action plan detailing the implementation steps of
the telecoms arrangement was also approved. Kosovo and Serbia agreed to ask the European
Union to revitalise the Mitrovicë/Mitrovica bridge and its surroundings so that it can be
reopened to all traffic by summer/not later than June 2016. In line with the same timetable, it
was also agreed that the North Mitrovicë/Mitrovica municipality will revitalise its main street
(King Peter Street) by turning it into a pedestrian zone.
Progress has been made in other important areas. Following an agreement in February 2015,
the dismantling of the Serbian structures on justice is well-advanced. Serbia facilitated
applications of Kosovo Serb judges and prosecutors in the Kosovo judiciary. The proper
handling of cases in the Mitrovicë/Mitrovica Basic Court, where Serbian official statements
have at times interfered with the proceedings, requires a dispassionate environment.
Integration of Kosovo Serb police and civil protection personnel is nearing completion. An
agreement on vehicle insurance of June 2015, providing for the recognition in each other's
jurisdiction of Serbia and Kosovo's respective vehicle insurance, is being implemented. On
customs, agreements were reached on the import of controlled goods into Kosovo, including
for medicines. In the context of the liaison arrangements, and following an agreement
reached in November 2014, all official visits are directly arranged by Liaison Officers.
Progress was also reached in the field of cadastre: a new archives building was opened in
Belgrade, where the scanning of documents pertaining to Kosovo is to be completed by June
2016. Following the Serbian Constitutional Court's rulings adjudicating that the form in which
some dialogue agreements have been transposed was unconstitutional, Serbia has adjusted its
regulatory framework related to these agreements, with the exception of freedom of
movement. The Constitutional Court's rulings on the energy and telecoms agreements are still
pending. Serbia needs to find legal solutions for the implementation of agreements that are
sustainable and can withstand legal challenges.
Implementation of other agreements has continued, albeit at a slower pace. On IBM, further to
the six interim facilities, two additional permanent crossing points were agreed, for which
Serbia has initiated the expropriation process on its territory. However, illegal crossing
roads/by-passes, in particular in the north of Kosovo, continue to be regularly used to smuggle
substantial amounts of goods. Additional measures need to be taken by Serbia to stop illegal
crossings. The processing of cases in the framework of the 2013 general modalities for
Mutual Legal Assistance has been suspended between October 2014 and August 2015 by the
Serbian authorities. The handling of over 600 pending cases has resumed in September 2015.
On regional cooperation, Kosovo became a permanent participant in RACVIAC (the Centre
30
for Security Cooperation) and joined MARRI (Migration, Asylum, Refugees Regional
Initiative). However, Serbia needs to remain committed to the continued implementation of
the agreement on representation and participation of Kosovo in regional forums.
Serbia and Kosovo also participated in constructive discussions to improve cooperation in
tackling migratory flows from Kosovo early this year.
Overall, Serbia and Kosovo have remained engaged in the dialogue and committed to the
implementation of the April 2013 'First agreement of principles governing the normalisation
of relations' and other agreements reached in the dialogue. The steps taken gave fresh
momentum in the normalisation of relations and should have a positive and concrete impact
on the everyday life of citizens in both Kosovo and Serbia. Further progress in this area
remains essential for advancing the European future of both Serbia and Kosovo.
4. ECONOMIC CRITERIA
Key economic figures 2013 2014
Gross domestic product per capita (% of EU28 in PPS) N/A N/A
GDP growth (%) 3.4 0.9
Unemployment rate (female; male) (%) 30 (38.8; 26.9) 35.3 (41.6; 33.1)
Economic activity rate for persons aged 20–64:
proportion of the population aged 20–64 that is
economically active (female; male) (%)
46.4 (23.7; 69.5) 47.7 (24.2; 71.4)
Current account balance (% of GDP) -6.4 -8
Foreign direct investment (FDI) (% of GDP) 4.5 2.3
Source: Eurostat
In line with the conclusions of the European Council in Copenhagen in June 1993, EU
accession requires the existence of a functioning market economy and the capacity to cope
with competitive pressure and market forces within the Union.
The monitoring of these economic criteria should be seen in the context of the increased
importance of economic governance in the enlargement process. In order to improve their
economic governance, in 2015 the enlargement countries were asked to prepare Economic
Reform Programmes (ERPs), which set out a medium-term macro-fiscal policy framework
together with key structural reforms aimed at supporting the framework and boosting
competitiveness. The ERPs were the basis for country-specific recommendations jointly
adopted by the EU and the Western Balkans and Turkey in the Economic and Financial
Dialogue meeting on 12 May 2015.
4.1. The existence of a functioning market economy
Kosovo is at an early stage in developing a functioning market economy. The pursuit of
economic reforms received a new momentum after the post-election impasse. Some progress
was made, particularly on facilitating business creation, improving the legal system and on
financial sector stability. The persistent trade deficit reflects a weak production base and lack
of international competitiveness. An inefficient public sector and ad hoc fiscal policy
31
decision-making constitute significant fiscal risks. Reliance on remittances and widespread
informal economy additionally decrease employment incentives resulting in low labour force
participation, especially among women, high unemployment rates, in particular among young
and unskilled workers. Kosovo should reduce reliance on customs duties by broadening
domestic tax base and modernising revenue collection.
In line with the ERP recommendations and in order to support long-term growth, in the
coming year Kosovo should pay particular attention to:
→ ensuring fiscal sustainability;
→ speeding up the privatisation and restructuring of publicly owned enterprises;
→ improving bankruptcy and insolvency procedures.
Economic policy essentials
The government's strategic documents show a strengthened commitment to pursuing
economic reforms. This should be translated into determined policy implementation and
an avoidance of ad hoc decision-making in economic policy. The 2014 post-election
political impasse delayed the pursuit of sound economic policies, including the adoption of
the 2015 government budget.
Kosovo submitted its first Economic
Reform Programme (ERP) to the
Commission in January 2015. Together
with the new government programme, the
ERP reflects a clear commitment to
pursuing a stable fiscal policy and
structural reforms to boost competitiveness.
Following the joint adoption of the ERP
recommendations, the Kosovo government
has started launching ERP-based reforms.
A new EUR 184 million 22-month stand-
by programme with the IMF has been
approved in July 2015. The programme
aims at strengthening the credibility of
public finances, in line with ERP
recommendation 1, further enhancing financial stability and boosting competiveness and
productive capacity.
Macroeconomic stability
ERP recommendation 1: "Sustain the
commitment to fiscal discipline and improve
transparency of public finances by considering
establishing an independent fiscal council, or fiscal
agency, with a clear mandate to preserve
sustainability of public finances, and reduce deficit
bias, and by better coordination between
government and parliamentary bodies responsible
for budgetary processes. Improve the budget
process by legislatively strengthening the role of
the Medium Term Expenditure Framework and
enshrine principles of cost-benefit analysis as the
basis of the policy planning process. Take steps to
increase government deposits to the threshold
implied by the fiscal rule (4.5 % of GDP) to
provide additional financing buffer."
32
The macroeconomic situation remained
stable but challenging, having been hit by
the political uncertainties in 2014.
Preliminary data shows that economic growth
in 2014 dropped to 0.9 %, below the ten-year
average of 3.5 %, as a result of political
impasse which caused delays in capital
investments. Economic growth was mainly
driven by private consumption (1.2pp
contribution to growth) resulting from higher
remittances and increased pensions and wages
in the public sector. Net exports continued to
weigh on GDP growth (-1 pp). Production
capacity is poorly developed. Trade and real estate activities continued to positively influence
growth while construction contracted. Preliminary results for Q1 2015 show further growth
slowdown, possibly influenced by the migration outflows at the beginning of the year.
External imbalances worsened slightly in
2014, despite the continued economic
recovery in Kosovo's main trading partners
and diaspora countries. In 2014 the current
account deficit increased to 8 % of GDP, after
having fallen since 2011. This increase
resulted from weaker transfers to the
government from abroad caused by delays in
ongoing projects due to the political impasse.
Growing remittances (12.6 % of GDP in
2014) continued to offset the traditionally
high trade deficit (31.6 % of GDP in 2014).
The inflow of foreign direct investment (FDI)
amounted to 2.6 % of GDP, the lowest in the
last ten years, which averaged 6.7 % of GDP. The bulk of financial inflows was informal and
unrecorded (5 % of GDP). Kosovo's external debt remained relatively low at 31.6 % of GDP
in 2014 and is not a cause for immediate concern.
Employment is extremely low and efforts to improve labour market conditions have
been limited. Moderate economic growth over recent years has not translated into a better
performance by the labour market. Kosovo has the lowest employment and activity rates in
Europe (26.9 % and 41.6 % respectively); this is due to a weak production base and low
competitiveness in human capital and labour costs. Reliance on remittances and widespread
informal economy additionally decrease employment incentives.
The unemployment rate increased to 35.3 % in 2014 from 30 % in 2013. Labour market
conditions are especially difficult for women. Only one in five women of working age were
active in the labour market and only one in eight were employed. Limited job opportunities,
especially for young people (61 % youth unemployment), are also putting a strain on social
cohesion and encouraging emigration. Financing for active labour market policies remains
fragmented and insufficient. Labour market statistics have remained inadequate and more
harmonised data is needed in order for Kosovo to be able to make informed policy choices.
ERP Recommendation 2: "Address immediate
fiscal risks with necessary measures aimed at
33
Inflation is mainly dependent on import
prices, specifically food and energy
prices. The consumer price index inflation
in Kosovo has been on a downward trend
since 2011, reaching 0.4 % on average in
2014 and declining further to -0.7 % by
July 2015.
The execution of the 2014 budget was
characterised by lower-than-expected
revenues and ad hoc pre-election
spending increases. The 2014 budget was
the first budget to be subject to the new 2
% of GDP deficit fiscal rule. As a result of the April 2014 government increase in salaries,
pensions and benefits, current expenditures accounted for a higher proportion of total
spending at 71.3 % in 2014 compared with 63.5 % in 2013. In addition, the caretaker
government committed roughly 32 % of the overall capital spending in the next four years to
highway construction, thus further limiting fiscal space in the following years. Overall
expenditure underperformed by 11 % compared to the plan. This decrease was due to delays
in public investments.
Budget revenues underperformed by 12 %; this
is due to lower-than-expected growth and the
postponement of some one-off transfers. Kosovo
needs to take further measures to improve
revenue collection in line with ERP
recommendation 3. The overall fiscal deficit
stood at 2.5 % of GDP, higher than the fiscal
rule threshold of 2 %. Considering however the
exceptions allowed by the rule, the 2014 budget
can be considered to be in conformity with it.
The breach of fiscal rule was in any case only
avoided due to under execution of capital
spending.
Total public debt continued to increase,
reaching 10.6 % in 2014. An increasing
proportion of this comes from domestically
issued treasury bills. Kosovo has a
relatively low level of public debt.
However, given its reliance on short-term
domestic financing and loans from
international financing institutions and its
inability, in the absence of a credit rating,
to issue international debt, prudent fiscal
policy is crucial for Kosovo. Government
deposits, maintained as an emergency source of financing, fell steadily to 1.8 % of GDP at the
end of 2014, substantially below the 4.5 % threshold suggested by the fiscal rule.
Due to the post-electoral political deadlock, the 2015 budget was adopted only in December
2014 and it was based on overly optimistic revenue projections (18.3 % rise compared to
2014 budget execution). In the July mid-term budgetary review both revenue and expenditure
targets were adjusted, now standing, still ambitiously, 14.1 % and 11.5 % higher than the
reducing unsustainably high current expenditures
while preserving growth enhancing capital
spending. Develop a legal framework for
maintaining a sustainable public wage bill and
strengthen targeting and means testing of transfers.
Ensure planned increases in agricultural subsidies
are directed exclusively at productivity increasing
initiatives. Advance public administration reform
with special attention on improving productivity
and reducing costs. Take further steps in
strengthening public finance management
practices."
ERP Recommendation 3: "Modernize revenue
collection to reduce reliance on customs receipts by
improving property tax collection and
strengthening the legal framework for collection of
tax and municipal tax arrears. Revisit local
government grant financing scheme to incentivise
better collection of municipal revenues. Further
broaden tax base by introducing the planned
mandatory health sector contributions, and reassess
planned tax exemptions."
34
2014 budget execution. By July 2015, revenues grew by 9.3 % compared to the same period
in 2014 thus lagging behind the plan. To increase revenue, the government has introduced
changes to excise duties and the VAT system applicable from 1 September 2015.
Successful reforms in the customs administration directed at better goods evaluation and
fighting smuggling yielded a 7.4 % increase in border revenues compared to the first seven
months in 2014. Spending is also lagging behind the budget plan, again mainly due to
underperformance of capital spending. Without further improvements in revenue collection or
additional expenditure cuts, satisfying both the fiscal rule deficit and capital spending targets
will be difficult.
The fiscal rule and the law on public finance form the backbone of public finance
management in Kosovo. However, their enforcement and monitoring mechanisms need to be
improved. Repeated ad hoc fiscal decision-making, with a large fiscal impact is the main risk
to fiscal sustainability. Budget planning procedures have not been transparent and coordinated
so far, and budget spending programmes are not joined up with the government's long term
priorities. The launch of a central procurement system and better checks on contracting
procedures at the local level are welcome steps, but more needs to be done to meet ERP
recommendation 2.
Interplay of market forces
Overall, very limited progress was
achieved in the privatisation and
liquidation of publicly owned
enterprises. No new privatisations took
place. The privatisation agency remained
dysfunctional and its credibility was further
tarnished amid political controversy and
corruption allegations. The privatisation
agency still does not have a new, credible,
independent and functioning board; its
merit-based management selection procedures and anti-corruption mechanisms need to be
strengthened in line with ERP recommendation 4. The unresolved status of property rights
and lengthy legal proceedings in dealing with financial claims on privatised assets hinder the
privatisation process and delay disbursement of privatisation revenue held at the central bank.
Among centrally-managed enterprises, only two, the Kosovo Energy Corporation and Post
and Telecommunications Kosovo, continued to generate a profit in 2014. Government
influence on price controls for utilities and postal and telecommunications services has
continued.
Market entry and exit
Some progress was made in simplifying
business registration, but insolvency
procedures still present an obstacle. The
establishment of one-stop shops in 2014
has reduced the time needed for company
registration down to three days. However,
the announced online registration has still
not been fully implemented. Numerous obstacles to market entry remain: a weak and
unaccountable administration; insufficient access to finance; an underdeveloped infrastructure
(especially in electricity supply); a deficient rule of law; extortion practices; a widespread
ERP Recommendation 4: "Advance restructuring
and restart the privatisation of non-essential
Publicly Owned Enterprises (POEs). Take steps to
improve the efficiency and corporate governance of
strategic POEs. Address the lack of quorum of the
board of Privatisation Agency of Kosovo (PAK)
and accelerate privatisation of Socially Owned
Enterprises still in PAK's portfolio."
ERP Recommendation 5: "Address the
underlying causes for high costs of bank-based
financing, reduce the duration and cost of
insolvency procedures by adopting the new
bankruptcy law and further improve contract
enforcement with a view to increase overall
financial intermediation in the economy."
35
informal economy; and insufficient academic and professional/vocational education. Weak
insolvency procedures still hinder market exit and delay payments to creditors. A draft law on
bankruptcy needs to be approved in line with ERP recommendation 5.
Legal system
Despite some progress made on the legal rules governing business, their implementation
has remained insufficient. Very weak institutional capacity for legal enforcement combined
with widespread corruption continued to hinder the business environment. The judicial system
suffers from poor accessibility, inefficiency, delays and a growing backlog of unresolved
cases (400 000 in July 2015). The politically influenced appointments of judges and
prosecutors limit the independence of the judiciary. More work is needed on reviewing the
civil code on business lawsuits and practices and on developing register (cadastre) databases,
in line with ERP recommendation 8.
Financial sector development
Financial sector stability was maintained and credit growth picked up pace. The steady
credit growth in Kosovo's banking sector rebounded in 2014 (4.2 % increase) and continued
to grow in 2015. Kosovo's financial system remains dominated by the banking sector (69.5 %
of the total financial sector assets). The stability of the banking sector was strengthened, with
the proportion of non-performing loans fully covered by bank provisions falling to 7.1 %
(July 2015). Private loan enforcement agents established at end 2014 contributed to the NPL
decline. The improved profitability of banks in 2014 (131.1 % rise in profits) further
strengthened their capital buffers to 19 %, which is substantially above regulatory
requirements. Although total lending grew, a still relatively low loan-to-deposits ratio (74.3
%) means that there is ample room for stronger banking activity. Average loan interest rates
fell below 10 % for the first time, but have remained above the regional average.
The insurance sector is dominated by non-life insurance companies. The cost of car insurance
is artificially high, due in part to Kosovo not being a member of the 'green card' system, but
also to it not having fully liberalised third party liability insurance prices.
The Central Bank of Kosovo continued to improve the SWIFT infrastructure for international
payments which is accessible and used by all banks. Since February 2015, banks in Kosovo
have been using IBAN for international payments.
4.2. The capacity to cope with competitive pressure and market forces within the
Union
Kosovo is at an early stage in achieving the capacity to cope with competitive pressures
and market forces within the Union. No progress was made on improving the quality of
education, which is a key driver for improving long-term growth and competitiveness.
In line with the ERP recommendations and in order to support long-term growth, in the
coming year Kosovo should pay particular attention to:
→ securing a stable energy supply and reducing distribution losses;
→ closing the skills gap in the labour market;
→ channelling foreign direct investments and remittances into productive sectors.
Human and physical capital
36
No progress was made in improving the quality of education. Increases in public spending
on education (up to 4.4 % of GDP in 2014
with 4.6 % planned for 2015) have so far
been used almost entirely to cover salary
increases. More funding should be directed
to other aspects of education reform, as
referenced in ERP recommendation 7. The
establishment of the Agency for Vocational
Education and Training and Adult
Education (VET) should help to address
the evident skills mismatch in the labour
market.
Nevertheless, the unemployment rate
among vocational graduates is 71 %.
Insufficient funding, a low level of
cooperation between vocational schools and businesses and delays in implementing policies
remain major concerns.
Kosovo made some progress on improving physical capital, but road investments clearly
dominate over energy efficiency and water distribution. In 2014, total investment
continued to fall, reaching 26.2 % of GDP. Government capital spending agenda is dominated
with road building, namely the construction of the Route 6 highway to Skopje. ERP
recommendation 6 deals with ways of improving the assessment of major infrastructure
projects.
Lack of reliable energy supply is still seen
as one of the biggest obstacles to
investment growth. Investments in the
electricity network have improved network
stability and reduced technical losses.
Construction has started on the new 400kV
transmission interconnector to Albania and
the district heating project at the Kosovo B
power plant. Negotiations with the only
bidder for the construction of the new
modern power plant are stalled.
Almost all incoming foreign direct investment went to the non-tradable sector, in particular
real estate and financial intermediation. However, a EUR 409 million contract for investment
in the Brezovica ski resort was signed in April. Work is due to start in the following months
and is expected to provide around 3 000 new jobs.
Sectoral and enterprise structure
ERP Recommendation 7: "Improve the quality of
education by continuing to roll out teacher
licencing and training as well as improving quality
assurance and strengthening related incentives;
improve access to pre-primary and primary school
education; accelerate modernisation of vocational
education, continue improve quality of higher
education and improve focus on aligning the
education system so as to make it more responsive
to the labour market. Assure the timely
operationalisation of the recently established Public
Employment Service and its effectiveness in
lowering the high unemployment rate."
ERP Recommendation 6: "Strengthen
government oversight and consider setting up an
advisory body to contribute to the assessment of
future major infrastructure projects, including their
fiscal impact and make sure they align with the
regional agenda on connectivity (core network).
Advance towards securing a reliable energy supply
while ensuring the compliance with the EU
environmental standards in the production of
energy."
ERP Recommendation 8: "Continue to improve
the business environment and continue with the
clearing of court backlogs, strengthening capacities
of judicial system, and developing cadastre
databases. Advance measures to tackle informality
in line with the strategy for the prevention and fight
against informal economy, including incentives to
reduce undeclared work. Reduce the administrative
37
Kosovo’s private sector continues to be
fragmented and unable to benefit from
efficiency gains, as micro-, small- and
medium-sized enterprises account for
99 % of total employment. Although still
above its regional peers, the share of
agriculture in Kosovo’s GDP fell to
11.4 %, compared with 14.1 % in 2009,
while the share of services rose from 47 %
to 49.2 % of GDP. Shifts in the employment structure away from agriculture and towards
services are evident. This is in line with expected developments as part of Kosovo’s transition
towards a modern services-oriented economy.
The structure of operating enterprises is dominated by trade (29.9 % of operating enterprises),
followed by accommodation and food services (11 %) and industry (10.4 %, up from 5.2 % in
2013). Productivity gains are limited by poor access to broader markets and a lack of
investments in new technologies. Kosovo should improve its business environment, in line
with ERP recommendation 8.
State influence on competitiveness
There was no progress on developing institutional capacity to check state aid and
subsidies are still being provided without a proper strategy and evaluation. Publicly
owned enterprises in the energy, transport and waste/water sectors continued to be subsidised.
New subsidies and direct payments to agriculture were introduced. These need to be more
closely linked to increasing productivity. Tax and customs exemptions were introduced for
certain sectors (agriculture, IT), but without a clear impact assessment.
The authorities continued to establish economic zones and industrial parks. However, this was
done without a national plan (which was a legal requirement) and without transparent
disclosure of tax and customs incentives approved to companies.
Economic integration with the EU
The EU is Kosovo’s biggest trade and investment partner. However, Kosovo’s export
capacity remains limited. Kosovo’s economy is still relatively unintegrated in global trade
flows, with a trade openness of 71.1 % of GDP. However, the value of Kosovo’s goods trade
with the EU has been rising continuously since 2008, standing at 41.2 % of overall trade in
2014.
In spite of that increase, Kosovo’s total trade volume with the EU remains very limited (EUR
98.08 million in exports and EUR 1.08 billion in imports in 2014), reflecting the low
competitiveness of its products and other structural obstacles hindering this potential. The
Central European Free Trade Agreement (CEFTA) countries remained Kosovo’s second
largest trade partner (29.6 % of total trade).
burden for business by implementing the Better
Regulation Strategy and the Law on Permits and
Licences. Develop measures to provide targeted
support for SMEs and to widen their access to
finance. Step up the fight against corruption and
efforts to improve public procurement, by
enhancing administrative capacity, increasing
efficiency and effectiveness of the Public Review
Board, and implementing central procurement."
ERP Recommendation 9: "Facilitate trade by
amending the Customs Code and adopting new
legislation on customs enforcement of IPR."
ERP Recommendation 10: "Adopt a holistic
approach to Foreign Direct Investment that anchors
38
EU countries are the biggest foreign
investors in Kosovo (35 % of overall
investment). The planned entry into force
of Kosovo’s Stabilisation and Association
Agreement with the EU is expected to
further incentivise economic ties with the
EU countries. Kosovo will, however, need to continue with reforms in order to facilitate trade
and foreign direct investment, in line with ERP recommendations 9 and 10.
5. EUROPEAN STANDARDS
5.1. Internal market
5.1.1. Free movement of goods
Kosovo is at an early stage of preparation in the area of free movement of goods. Some
progress was made in the last year. In the coming year, Kosovo should in particular:
→ improve inter-institutional coordination to ensure that legislation is enforced;
→ further improve quality infrastructure, strengthen market surveillance capacity and increase
consumers’ awareness of their rights.
The Ministry of Trade and Industry (MTI) has made gradual progress in implementing the
strategy on free movement of goods that it adopted in February 2013.
On horizontal measures, as regards standardisation, 1 064 European standards have been
adopted as a standard reference in the reporting period. The cooperation agreement concluded
with the Albanian Standards Body is the way for Kosovo to adopt European standards.
Kosovo’s Standards Agency needs to be consolidated as an institution, and expand the online
sales of standards (e-Commerce function).
In 2014 Kosovo adopted several regulations and administrative instructions, to put in place a
system of conformity assessment. The MTI also authorised several conformity assessment
bodies. Harmonisation with EU rules and the use and enforcement of conformity assessment
needs to be strengthened.
As regards accreditation, in November 2014 the General Accreditation Directorate was the
subject of a full European Cooperation for Accreditation peer evaluation. This is a crucial step
towards the signing of the European multilateral agreement for accreditation of test
laboratories. The recommendations are being implemented.
On metrology, the Agency for Metrology still lacks capacity. The laboratories for time,
frequency, length and force are not operational due to lack of equipment. Kosovo is fully
aligned with the Directive on Non-Automatic Weighing Instruments. Since 2014, laboratory
activities have increased in the areas of mass, flow and volume, electrical measurement,
precious metals and thermometry. The quality system imposed by the applicable ISO
standards must be implemented and awareness-raising improved. In general, the laboratories’
operational capacity needs to increase to meet the necessary quality standards.
On market surveillance, market inspectorates carried out 1622 inspections resulting in 145
corrective measures (fines and confiscations). A Regulation on Establishment and
Functioning of the Rapid Exchange of Information System on Dangerous Products is at a very
early stage of implementation. Communication and coordination mechanisms between those
responsible for market surveillance need to be improved and enforcement strengthened.
supportive policies in a strategic framework and
focus on removing existing obstacles. Increase
investor protection by developing an investor after-
care program and establish an investor grievance
mechanism."
39
As regards consumer protection, further efforts are needed. While a number of awareness-
raising activities have been carried out, people are not sufficiently aware of their rights as
consumers. Between September 2014 and September 2015 307 consumer complaints were
submitted to the Department of Consumer Protection; 125 were resolved in favour of the
consumer, 110 were found ungrounded and 72 have not yet been reviewed.
Some administrative instructions were adopted on the classification, labelling and packaging
of chemicals. There is no evidence on alignment with the Registration, Evaluation,
Authorisation and Restriction of Chemicals (REACH) Regulation yet.
5.1.2. Movement of persons, services and right of establishment
Kosovo is at an early stage of preparation in the free movement of persons, services and the
right of establishment. Some progress was made, particularly on financial services. Thorough
and transparent auditing and accounting are crucial for the development of a sound financial
services market and the economy at large, especially small and medium-sized enterprises
(SMEs). In the coming year, Kosovo should in particular:
→ further align the law with the EU services and professional qualifications directives;
→ further harmonise existing regulations and procedures with EU practice, particularly in the
area of corporate accounting and auditing.
As regards the movement of persons, no new agreements were concluded on the movement
of workers and the coordination of social security systems.
On freedom to provide services, Kosovo is at an early stage of alignment with the services
directive. A database on trade in services has been set up in the MTI to support ongoing trade
negotiations on services liberalisation within the Central European Free Trade Area.
On postal services, Kosovo has to a large extent aligned its legislation with the acquis.
However, universal service delivery is hindered by political difficulties in Serb-majority
municipalities. In spite of some reductions in the weight limit for reserved services in
previous years, these are still not in line with the acquis. International postal services are
provided to all postal administrations except Serbia, due to lack of an agreement.
On mutual recognition of professional qualifications, alignment with the acquis is at an
early stage. A Kosovo-wide framework on regulated professions still needs to be adopted.
Kosovo should step up its efforts to align legislation with the services directive and the
professional qualifications directive. To do this, Kosovo should draft a list of minimum
training requirements for regulated professions to be included in its legislation and an action
plan for harmonising professional qualifications legislation with the acquis.
The Central Bank of Kosovo continued to review existing financial services legislation,
including laws on insurance, micro-finance institutions and non-banking financial institutions.
Alignment of these laws with the acquis needs to be ensured. Kosovo is still not part of the
‘green card’ system so additional vehicle insurance is required for most foreign vehicles
entering Kosovo. Under the future Stabilisation and Association Agreement (SAA), Kosovo
must ensure development of the insurance sector based on fair competition practices and a
level playing field. Amendments to the current banking regulations on mortgage loans, on real
estate appraisal and on capital adequacy were adopted in February 2015, further but not fully
aligning with the acquis. The standardised approach to credit risk and the basic indicator and
standardised approach for operational risk according to Pillar I of the Basel II Regulatory
Framework are in force. The central bank is working on further adoption of Basel capital
standards and the capital requirements directive and capital requirements regulation. The
financial services market remains at an early stage of development.
40
On company law, some administrative measures were adopted in July 2015, providing a basis
for the reduction of business registration fees. The law outlining the role and responsibilities
of the Kosovo Business Registration Agency has still not been adopted.
As regards corporate accounting and auditing, an amendment to the draft law on
accounting, financial reporting and audit still needs to be adopted. The capacity of the
institutional audit oversight structures needs to be strengthened considerably; enforcement
remains weak and substantial efforts are needed to ensure the development of reliable and
efficient financial reporting, in line with EU practice. Kosovo still needs to align its rules with
international accounting and financial reporting standards.
5.1.3. Free movement of capital
There is some level of preparation in this area. Some progress was made on free movement
of capital. Capital movements remain largely free, with no restrictions on foreign ownership
or investment in the financial sector, and the central bank’s capacity to supervise the sector
remains sufficient.
Movement of capital remains largely free in Kosovo. The draft law on general insurance,
covering such issues as minimum capital requirements, solvency requirements and other
issues related to proper risk-based supervision requirements for insurance companies still
needs to be adopted. Increased efforts are needed to achieve tangible results in the fight
against economic and financial crime.
There was limited progress on the issue of acquisition of real estate, including the purchase of
land, by foreign citizens. Provisions in the relevant laws, implementing acts and
administrative practices are still an obstacle to equal treatment. Other difficulties, e.g. in
registering property, need to be addressed.
As regards the payment system, regulations on issues including payment instrument
statistics, the bank account standards numbering system and international payments were
approved in 2014. The Central Bank of Kosovo continued to reinforce supervision of payment
systems and improve the SWIFT infrastructure for international payments, following its
connection to SWIFT in December 2013. In February, Kosovo started using the International
Bank Account Number (IBAN) system for international payments. Further efforts are needed
to continue alignment with the acquis in payment services.
5.1.4. Customs and taxation
Kosovo is moderately prepared in the area of customs and at an early stage in taxation, with
some progress made in both areas. It took some initial steps towards merging the customs
and tax administrations and upgrading internal controls. Customs legislation is largely
compliant with the EU’s customs code. In the coming year, Kosovo should in particular:
→ implement customs legislation in line with EU practice;
→ strengthen the Kosovo tax administration’s internal IT platform, its internal performance
controls and the fight against corruption;
→ step up the fight against the informal economy and tax evasion and prevent any undue
influence on the work of their institutions.
The customs service has further improved its legislative, administrative and organisational
capacity. The first steps towards merging the customs and tax administrations into a single
revenue agency have been taken. Despite an overall fall in imports, the 2014 reorganisation of
the customs administration resulted in an increase of 3.9 % in the collection of revenues
compared with 2013 and new systems reduced the scope for corruption. The merger of
41
investigation units also brought positive results. Kosovo Customs operate throughout Kosovo,
although to a limited extent in the north. In 2015, Kosovo applied to join the Common Transit
Convention and signed bilateral agreements with Albania on trade facilitation, including
common transit, and on cooperation in criminal customs matters with the United Kingdom.
The exchange of pre-arrival electronic information with regional customs administrations is
working well. Nevertheless, inconsistencies between the customs and excise code and the
criminal code continue to hinder the fight against customs crime. The informal economy and
smuggling across the border/boundary lines continue to harm the economy. Following an
agreement in the Pristina-Belgrade dialogue, two new co-located crossing points have been
agreed.
In taxation, Kosovo has started to implement the 2014-2018 strategy and action plan for
preventing and combating the informal economy, money laundering and financing of
terrorism. The tax administration has continued to improve its human and administrative
capacity. Progress has been made in introducing electronic services including online tax
returns, verification and payment system and business registration centres (one-stop shop).
There was no progress in modernising the administration’s internal IT platform and its
procedures. The capacity to enforce tax collection in northern Kosovo remains extremely
limited. The existing backlog of complaints against the customs and tax administrations was
finally dealt with and, as a result, the Independent Review Board dealing with such cases was
abolished in December 2014.
5.1.5. Competition
Kosovo is at an early stage in the area of competition. There was no progress in this field as
the Kosovo Competition Authority (KCA) faced substantial challenges to its investigative and
decision-making capacity. In the coming year, Kosovo should in particular:
→ ensure that pending appointments are made to the Kosovo Competition Commission
(KCC), that staffing, facilities and training for the KCA are appropriate, and that enforcement
restarts as soon as possible;
→ approve the amendments to state aid legislation and start to enforce it without delay.
As regards antitrust and mergers policy, secondary legislation to implement changes to the
February 2014 law on the protection of competition is still lacking.
The KCA is still not operational, lacking a quorum since November 2013 due to delays in
replacing five members of the KCC whose terms of office had ended. The KCA has thus not
been able to carry out its duties as new investigations have to be approved by the KCC board,
and very little enforcement is taking place. Instead, it has concentrated on advocacy and
providing opinions on other bodies’ initiatives. Although the budget has been approved, the
KCA still lacks staff and adequate premises, internal controls and information systems.
Cooperation between the KCA and other regulatory authorities needs to be strengthened.
The current law on state aid requires further amendment to bring it into line with European
standards, in particular to ensure the independence and impartiality of the State Aid
Commission. The activities of the State Aid Office were limited to the distribution of
notification forms to potential aid granters. The Office, currently established as a department
of the KCA, is understaffed and does not have the capacity to screen existing aid schemes.
5.1.6. Public procurement
Kosovo is at an early stage in this area. Effective implementation remains a major challenge
and procurement is particularly vulnerable to corruption. Some progress was achieved,
especially in enforcement of a centralised public procurement system. However, considerable
42
efforts are still needed to use public procurement efficiently. It remains essential to
professionalise and de-politicise the system and make it transparent and accountable,
including the appointment of senior management. In the coming year, Kosovo should pay
particular attention to:
→ strengthening the capacity and ensuring the proper functioning of public procurement
bodies, in particular through the timely appointment of competent members of boards;
→ further aligning public procurement legislation with the acquis;
→ improving implementation of public procurement processes through enhanced use of
competitive tender procedures, centralised purchasing, and development of e-procurement.
Institutional set-up and legal alignment
Kosovo’s legal framework is largely in line with the acquis and other public procurement
principles, but does not cover all areas. The law on public procurement is broadly aligned
with the directives on classical procurement and to some extent on utilities. The law on
concessions and public-private partnerships is largely compatible with EU legislation.
However, rules on defence and sensitive security procurement have yet to be drafted and the
law on public procurement still gives preference to domestic bidders.
In 2014, Kosovo developed a strategy and action plan for the years 2015-2020 for the
development of the public procurement system which has not yet been approved by the
government.
The public procurement administration in Kosovo is in place and consists of three main
bodies: the Public Procurement Regulatory Commission (PPRC), responsible for the overall
development, operation and supervision of the public procurement system; the Procurement
Review Body (PRB), an independent administrative review body examining all allegations of
breaches of the public procurement law; and the Central Procurement Agency (CPA), in
charge of central and coordinated purchases. Concerns remain about capacity limitations,
corruption investigations and the process of appointments to the board of the PRB. Only three
of the five members of the PRB board are in place, which seriously restricts its activities,
including reviews of high value and complex procurement. Implementation capacity needs to
be strengthened at all levels to ensure enforcement.
Implementation and enforcement capacity
The public procurement market stood at 8.9 % of gross domestic product (GDP) in 2014, a
slight decline over the last three years. In 2014, 11 362 contracts for a total value of close to
EUR 389 million were awarded. Of these, almost 73 % were awarded using an open
procedure, a significant 17 % decrease. High value contracts account for 63 % of all contracts
and the average number of bids per tender increased to 6.1 in 2014, compared with 5.2.
Effective implementation and enforcement is a major challenge, largely due to weak planning
and corruption. Almost 30 % of contract notices were cancelled, pointing to a need to improve
procurement planning. Risks and shortcomings exist at all stages of public procurement. The
legal provisions on evaluating contract performance, the effectiveness and efficiency of public
procurement proceedings, and contract management are in place, but implementation capacity
needs to be reinforced. Ways and means to increase value for money should be explored.
Some important steps have been taken to enforce a centralised system of procurement. In
February 2015, a list of common items, including six categories that must be procured
centrally, was approved for the first time since the CPA’s establishment.
43
Monitoring of public procurement is insufficient. The ex post monitoring performed by the
PPRC is still confined to non-systematic, occasional checks of completed procurement
contracts. Only a small share of concluded procurement contracts is monitored. Last year, the
PPRC started ex ante monitoring of contract notices sent by contracting authorities for
publication, a positive contribution to preventing irregularities which should be expanded.
A central public procurement portal is in place. To increase transparency and promote
efficiency in public procurement, the websites of all public procurement institutions need to
be improved and the procurement plans of public bodies could be published. Kosovo plans to
introduce e-procurement and is currently developing information and communications
technology infrastructure and a contract management information system, with support by
international donors. Appropriate sequencing of the steps, including the necessary legislative
amendments and capacity building, needs to be determined and implemented.
As regards the authorities’ capacity to manage public procurement, the law provides for
obligatory training for public procurement officers. Training courses and exams are offered by
the Kosovo Institute of Public Administration with the involvement of the PPRC. However,
the certification system and capacity to manage public procurement still needs to improve.
There is a lack of rules on integrity and conflicts of interest, insufficient enforcement to
identify and address corrupt and fraudulent practices, and lack of a risk indicator system. The
perception of corruption in public procurement remains prevalent in Kosovo. There are
statutory disciplinary procedures but concerns about their implementation remain. The
integrity of and cooperation between all public procurement bodies need to be strengthened.
Efficient remedies system
The right to legal remedy is stipulated in the laws on public procurement and concessions.
The public procurement law is in line with the acquis provisions on contract annulment and
penalties, although in practice this is not frequently used. On remedies, in 2014, the PRB
received and processed 537 appeals. Of these, 161 cases were returned for re-evaluation,
while in 104 cases the review panel decided to cancel procurement. The highest proportion of
irregularities continues to be in the evaluation of bids and irregularities in tender dossiers.
On implementation capacity, the PRB is understaffed and the quality and transparency of its
decisions leaves room for improvement. Discrepancies between expert review assessments
and actual decisions undermine stakeholders’ trust in the system. Cooperation between
different institutions in this field, notably between public procurement, anti-corruption, audit
and other law enforcement bodies needs to be enhanced.
5.1.7. Intellectual property law
Kosovo has some level of preparation in this area. Some progress was made in the area of
intellectual property rights. In the coming year, Kosovo should in particular:
→ develop a legislative framework to implement obligations under the future SAA;
→ step up efforts to ensure the enforcement of intellectual property rights;
→ appoint the director and address the existing backlog of applications at the Industrial
Property Agency.
On copyright and neighbouring rights, the Law on Copyright and Related Rights was
amended and further aligned with the acquis. It now requires implementing provisions on
private copy schemes and digital piracy, which are essential for enforcement. The task force
against piracy and counterfeiting set up by the government has continued with awareness-
raising. It seized several thousand counterfeit goods and brought several criminal cases to
44
court. The process for negotiating fees between collective management organisations and
broadcasters was re-launched in 2015 but no agreement has been reached yet.
On industrial property rights, amendments to the laws on patents and trademarks were
adopted in August 2015, further aligning them with the acquis. The Industrial Property
Agency’s administrative capacity was strengthened by allocating and training some
permanent and temporary staff. However, the director of the agency still needs to be
appointed. There is still a backlog of industrial property rights applications although there has
been progress in the processing thereof. The Intellectual Property Council met in March 2015,
but cooperation between institutions and law enforcement still needs to improve. Kosovo also
needs to increase awareness among holders and users of intellectual property rights.
As regards enforcement, Kosovo Customs has carried out operations against goods that
breach intellectual property rights, many in response to requests by rights holders. In 2014,
the total number of interventions by Kosovo Customs stood at 304, and the value of goods
seized at EUR 4.7 million; 280 of these interventions were based on responses to requests for
action by rights holders. However, greater efforts are needed to ensure enforcement, including
accessible and effective legal measures that can be undertaken by rights holders and greater
administrative coordination between the institutions involved. The police still do not have a
unit specialised in intellectual property rights. The draft law on customs measures still needs
to be adopted and aligned with the relevant EU regulation.
5.1.8. Employment and social policies, public health policy
Kosovo is at an early stage of preparation in this area. There has been no progress in
employment, social and health policies. In the coming year, Kosovo should in particular:
→ implement the 2014-2020 employment sector strategy, monitor the results and ensure that
the new employment agency becomes operational;
→ enforce the law on labour and legislation on health and safety at work. Implement
inspection legislation and provide the Labour inspectorate with appropriate resources to fulfil
its mandate.
On employment policy, the 2014-2020 employment sector strategy is in place, but
implementation is lagging, pending adoption of the action plan and the allocation of funding.
Data from the labour force survey for 2014 show that unemployment increased to 35.5 %
compared to 30 % in 2013. Labour market participation has seen a slight increase but remains
very low at 41.6 % (40.5 % in 2013). Labour force participation and employment rates for
women remained unchanged between 2013 and 2014 at around 21 % and 12.5 %. Informal
employment remains high. There was also an increase in the number of long-term
unemployed, from 68.9 % in 2013 to 73.8 % in 2014. Youth unemployment increased from
55.9 % to 61.0 %. The share of young people (between 15-24), who are not employed, not in
education and not in training, fell from 35.3 % in 2013 to 30.2 % in 2014.
The Public Employment Service helped to find jobs for 3 % of registered jobseekers and
organised training for 2.5 % of registered jobseekers, of which 38 % were women. The budget
allocated for active labour market measures for 2015 has increased by 224 %. However, the
funding for employment services and training and re-training remains insufficient and
fragmented across several entities. The lack of funding prevents the implementation of the
announced plan to merge services in the new employment agency.
On social policies, Kosovo still needs to amend the labour law to align it with the acquis
(e.g. employment contracts, working hours) and implementation remains unsatisfactory.
45
Effective implementation of the law on health and safety at work is still needed as concerns
labour inspectors, to prevent deaths and injuries. In 2014, 63 workplace accidents were
reported, of which nine were fatal (during the first six months of 2015, 26 accidents with five
fatalities) but incidents are under-reported. The Labour Inspectorate needs to target the
informal part of the construction sector more efficiently. The number of inspectors should
increase as only 50 cover implementation of laws on labour and on health and safety at work.
On social dialogue, the implementation of the General Collective Agreement, which lays
down the rights and obligations of employers and employees, is still pending. Amendments to
the law on the Social and Economic Council, still being drafted, need to provide clear
membership selection criteria and procedures. The council needs to strengthen its capacity to
improve the quality of social dialogue. Bi-partite social dialogue hardly exists.
As regards social inclusion, Kosovo needs to ensure that municipalities have sufficient
resources to deliver the social services under their responsibility.
On social protection, the first round of licensing of individual social and family service
providers has been completed and the second phase of licensing legal entities/organisations
has started. In 2014, four new minimum standards for social and family services were
adopted, increasing the number to 16. However the decentralisation of social services has still
not been implemented by municipalities and allocation of funding from the central budget is
still needed to ensure effective decentralisation. Budget constraints have delayed the
introduction of the new pension scheme.
On equal opportunities, the law on gender equality has been adopted but implementation and
enforcement of legislation needs to be improved to address high unemployment among
women and under-representation of women at all levels of decision-making. Insufficient
maternity leave provisions undermine efforts to tackle discrimination against women in the
workplace, especially in the private sector. The Agency for Gender Equality has not assessed
the implementation of the programme for gender equality (2008-2013).
On public health policy, the first phase of the Health Information System (HIS) has been
completed and continued to be implemented. However, public health spending remains
among the lowest in the region. This hinders implementation and enforcement of sector
reforms and policies. For example, the 2014-2020 action plan to implement the health sector
strategy still needs to be adopted, the law on health insurance needs to be implemented,
implementation of the HIS needs to be completed to allow reliable collection of health data,
the health insurance fund needs to be set up and the 2013-2015 rare diseases action plan needs
to be implemented. Out-of-pocket payments continue to impede access to healthcare for all,
including vulnerable groups. Child mortality remains among the highest in Europe. The health
law needs to be amended following the adoption of the law on the health insurance fund.
The law on tobacco control needs to be enforced. The communicable diseases infrastructure
and reporting system need to be further developed. On blood, tissues, cells and organs, the
law on transplantation of tissues and cells needs to be implemented. Concerning patients’
rights in cross-border healthcare, pharmaceutical, mental health, drug abuse
prevention, health inequalities and cancer screening, no progress was made.
Insufficient funding for the health sector still hampers its ability to meet basic needs for
maternal and child health, public health and nutrition, with a risk of stunting among children.
46
5.1.9. Education and research
Preparations in education and research are at an early stage. There has been no progress in
this area over the last year. The quality of education needs to be considerably improved. In the
coming year, Kosovo should in particular:
→ improve quality of education at all levels and improve access to quality education for
marginalised groups, especially children with disabilities, Roma, Ashkali and Egyptian
children;
→ ensure the autonomy and independent operation of higher education institutions and adopt
a new law for higher education based on international standards;
→ strengthen research and innovation capacity through reform of higher education
institutions and increase investment in research, both in the public and private sectors.
On education, the Kosovo curriculum framework and core curriculum need to be
implemented. The National Teacher Licensing Council developed a professional teacher
development system with performance evaluation mechanisms but the decision to allow an
across-the-board salary increase for all teachers is not in line with the reform principles
approved by the Ministry of Education and undermines the performance-based approach to
teacher policy. In April 2014, Kosovo participated in the Programme for International Student
Assessment (PISA) for the first time and results will be published in December 2016.
According to government data, total public spending on education is 4.4 % of GDP.
Rates of school enrolment are comparable with countries in the region, with the exception of
access to pre-school education or early childhood education. Only 4.5 % of children attend
pre-school education (age 0-5). 74% of children aged 5-6 attend pre-primary education.
The government continued actions to prevent early school leaving, particularly for children
from the Roma, Ashkali and Egyptian communities. However, implementation of legislation
on responding to non-enrolment and early school leaving needs to be further improved.
Kosovo continued work to provide access to quality education for children with disabilities
but the current rate of training is insufficient to meet the target of reaching all teachers within
a reasonable timeframe.
The current Vocational Education and Training (VET) system is not in tune with labour
market needs. A few VET programmes possess the required standards to receive accreditation
by the National Qualifications Authority. The VET school network needs to be rationalised
and the VET provision needs to be revisited.
The higher education system in Kosovo has been affected by the lack of a clear strategic plan,
which would be needed to avoid duplication and ensure the added value of study programmes.
The operation of higher education institutions in Kosovo is not transparent, particularly as
regards to recruitment procedures, which are weak and very vulnerable to politicisation at all
levels and sectors of education. The education sector remains a high-risk area for corruption.
Although the Kosovo Accreditation Agency has become a full member of the European
Network for Quality Assurance in Higher Education, its reputation has been significantly
tarnished both inside and outside Kosovo after key members of its senior management were
arrested on suspicion of corruption.
Difficulties in the implementation of the Pristina-Belgrade dialogue agreement on higher
education diplomas need to be overcome for full implementation in 2016.
47
Kosovo continues to participate in the Erasmus+ programme for cooperation in higher
education and youth sectors. Cooperation is important to help enhance competences and skills
in staff and students, as well as employability of youth.
Kosovo has taken limited action to develop its research and innovation capacity. The
capacity of universities in Kosovo to undertake research work is extremely limited, which
negatively affects the quality of post-graduate programmes and innovation. The budget for
research remains insufficient as the level of investment in research is still below 0.2 % of
GDP. The law on scientific research activities is not being implemented due to a lack of
funding. The link between research and business remains weak. Kosovo participates in the EU
research and innovation programme 'Horizon 2020' but the number of projects evaluated
successfully and receiving funding is very small.
5.1.10. World Trade Organisation (WTO) issues
Kosovo’s preparations remain at an early stage and no progress was made in this area.
Kosovo is not a member of WTO and has taken no formal steps to join.
5.2. Sector policies
5.2.1. Industry and SMEs
Kosovo has some level of preparation on industry and SMEs. Some progress was made in
this field. In the coming year, Kosovo should in particular:
→ follow up on the recommendations of the ‘Small Business Act’ assessment;
→ introduce regulatory impact assessments to reduce the administrative burden on SMEs.
As regards industrial policy and SMEs, the implementation of Kosovo’s 2013-2017 private
sector development strategy and the EU’s ‘Small Business Act’ are advancing slowly.
Communication between ministries and executive agencies needs to improve. To reduce
administrative burden on SMEs, the government needs to introduce regulatory impact
assessments. Strategies and action plans in this field need to be timed and monitored. The
Kosovo Investment and Enterprise Support Agency is operational and but not yet fully
staffed, so its impact is still limited. Although full online company registration has not yet
been introduced, the process for registering individual businesses and companies is quick (1-3
days). Nevertheless, the main obstacles to SME development and further growth are access to
finance, weak legal enforcement of contracts and business regulations, administrative barriers,
unfair competition from the informal sector, inefficient judiciary and corruption.
5.2.2. Agriculture and fisheries
Kosovo has some level of preparation in agriculture and rural development and in food
safety, veterinary and phytosanitary policy. Some progress was made by further
strengthening the institutions responsible and increasing the budget. In the coming year,
Kosovo should in particular:
→ improve land consolidation;
→ transfer inspection responsibilities to the Kosovo Food and Veterinary Agency;
→ set up the internal audit unit in the Agriculture Development Agency.
48
On agriculture and rural development policy, the government has continued to increase
spending on agriculture. The volume of direct payments has almost doubled compared to
2014 and now stands at EUR 23 million. Similarly, the amount allocated to agricultural
investment grants stands at EUR 20 million. However, there are insufficient staff to ensure
proper monitoring and prompt payment. The Agriculture Development Agency’s Internal
Audit Unit has not been set up.
Further efforts are needed to tackle illegal changes of agricultural land use, which continue to
be an obstacle to implementing the law on spatial planning. Not enough is being done to
implement land consolidation to rationalise land holdings, establish a transparent market in
land and enforce sanctions.
Reliable agricultural data are a basic requirement for sound policy decisions. There are still
discrepancies between Eurostat’s and national statistics. The first agricultural census was
finalised in 2015.
Implementation of the law on organic production is weak, and the establishment of a
functioning supervisory authority and a commission on organic production is still pending.
Kosovo lacks minimum standards and cross-compliance measures in the areas of food safety,
animal health and welfare and the environment. The volume of illegal logging is still too high
for sustainable forest management.
As regards food safety and veterinary sectors, progress has been made in securing co-
financing and a location for a rendering plant for processing and disposing of animal by-
products. However, a package of laws (the food law, veterinary law, sanitary inspection law
and livestock law) has not yet been finalised. The annual inspection plan has been approved,
but the multiannual inspection plan for animal diseases is out of date.
Responsibility for inspection, which should have taken place by 1 January 2015 (already three
years late) has still not been transferred from municipalities to the Kosovo Food and
Veterinary Agency. There have been few developments in improving and systematising data
management for animal identification, movement and registration.
Illegal trade, particularly in animals from Serbia, continues to be a problem. The process of
upgrading food processing establishments to EU standards should continue.
In the phytosanitary sector, although the law on plant protection was amended, the plant
disease surveillance programme has not yet been set up. Further updates are needed to the list
of plants and plant products.
5.2.3. Environment and climate change
Kosovo remains at an early stage of harmonisation with the acquis. No progress was made
on environment and climate change and in the coming year, Kosovo should in particular:
→ set up an environmental monitoring network for air and water;
→ establish systematic strategic planning on climate action.
Legislation to address increasing environmental challenges in Kosovo has not yet been fully
harmonised with the acquis or implemented. As regards horizontal legislation,
environmental impact assessments and strategic environmental assessments need to be better
implemented, especially locally. Public participation and consultation need strengthening.
The air quality monitoring system is equipped, but still not fully operational. Although there
are advanced analytical laboratories, the lack of regular maintenance and calibration of the
monitoring equipment jeopardises the accuracy of monitoring. Data collection and processing
49
is manual, with no automatic system to inform the public in real time. In addition, the Kosovo
Environmental Protection Agency’s air quality reports contain no inventory of air polluters
and pollution from the main sources is not adequately measured (in particular from the
Kosovo A power plant). Air quality plans for the biggest urban agglomerations are needed.
On waste management, the Ministry of Environment and Spatial Planning should step up
efforts to finalise a master plan for waste management and increase opportunities for
investment in this sector. Basic waste management definitions and concepts such as recycling
and recovery of different waste streams are not sufficiently supported by current legislation,
limiting opportunities for private sector involvement. Both investment funding and the
capacity of municipalities and operators to implement the 2012 law on waste remain very low.
The high number of illegal landfills needs to be addressed urgently.
On water management, an inter-ministerial water council chaired by the Prime Minister was
set up in early 2015. Kosovo lacks a water policy strategy, investment plan and strategy, and a
disaster risk reduction strategy. There is no progress in setting up river basin authorities or an
independent water management authority. The water resource monitoring and record system
remains incomplete for underground, surface, drinking and bathing water. Maintenance or
stolen and vandalised measuring equipment is an issue. Monitoring of the quality of drinking
water has improved but further quality control measures compliant with EU standards are
needed. A quality control system for bottled water has not been set up. On infrastructure, the
need for investment to improve efficiency is considerable (leakages are estimated at around
75 % of piped water). The recommendations from a dam safety study have yet to be
implemented. As a result of the introduction of checks, revenue collection has improved but is
still low. Recent droughts have highlighted the need to urgently reduce free water supplies
and develop alternative water resources. Regional water companies need to improve water
resource management and prepare drought management plans.
On nature protection, there has been very little progress in implementing the acquis. The
management plan for the "Sharri" park has been prepared but measures to combat illegal
construction activities in this park have stalled. There is very little progress in starting to set
up the Natura 2000 network of protected areas. Institutions in this area remain weak. Any
further development of hydropower should take place in conformity with EU legislation.
On industrial pollution and risk management, two integrated permits have been issued,
while three applications are currently under review from the total of 30 operators found to fall
under the industrial emissions Directive.
No progress was made on civil protection (floods, draughts, forest fires and other
environmental disasters).
A draft framework strategy on climate change, comprising a low emissions development
strategy and an adaptation strategy, has yet to be adopted. It should be made consistent with
the EU 2030 framework. Significant efforts are also needed to integrate climate action into all
relevant sector policies and strategies. Kosovo is at an early stage of transposing and
implementing the climate acquis. Even if there was some progress in the preparation of a
country-wide greenhouse gases (GHG) inventory report for 2013, significant efforts are
needed to align Kosovo with the EU monitoring mechanism regulation, and ensure that
Kosovo's capacity is enhanced. By-laws on substances that deplete the ozone layer, on
fluorinated greenhouse gases and on consumer information and CO2 emissions from new cars
were adopted but no practical measures are being implemented. An ad hoc decision by the
government to allow the import of second hand vehicles (over 10 years old) will have an
adverse impact on carbon dioxide emissions and air quality.
50
Administrative capacity in the environment and climate sectors remains weak. The
government adopted a decision to establish the National Council on Climate Change in
August 2015. Effective inter-ministerial co-operation to enable adoption and implementation
of low-carbon growth policies is further needed. Significant further efforts are needed to raise
awareness on environmental issues.
5.2.4. Transport policy
Kosovo is at an early stage of preparation in transport policy. Some progress was made in
with the adoption of the 2015-2025 multimodal transport sector strategy. In the coming year,
Kosovo should in particular:
→ strengthen its regulatory institutions and ensure their independence;
→ continue reforms in the railway sector;
→ step up efforts to improve road safety.
Kosovo agreed to a priority list of 'soft measures' in transport presented at the Western
Balkans 6 Vienna Summit and will ensure that they are all fully implemented before the WB6
Summit in June 2016. On trans-European transport networks, Kosovo continued to
participate in the South East Europe Transport Observatory (SEETO). Kosovo played an
active role in the Western Balkans 6 connectivity agenda by endorsing the agreement on the
regional core transport network in Brussels in April, the agreement in Riga in June on the core
network corridors and on the list of projects to be implemented by 2020 at the Western
Balkans 6 Summit in Vienna and by establishing the National Investment Council.
On road transport, the strategy and action plan for road traffic safety was adopted in
September 2015. However, the law on road traffic safety still needs to be approved. Kosovo
has still not aligned its legislation with the acquis on market access, the profession of road
transport operators and digital tachographs. The maintenance budget for motorways is still
insufficient to ensure regular maintenance.
On rail transport, the Rail Regulatory Authority is operational, but there was no progress on
strengthening its capacity. The regulator’s independence needs to be ensured as regards the
licensing process and market regulation. There has been no new entrant in the railway
transport market during the reporting period. The decision of the regulator to revoke the
licence issued in March 2014 to a private operator was found unlawful by the Basic Court in
Pristina. The civil aviation and railway accident and incident investigation body is not
operational. Upgrading the railway infrastructure is at an early stage of implementation.
On air transport, the incorporation of the first-phase requirements for the European Common
Aviation Area Agreement into domestic legislation is nearly complete, pending alignment of
the labour law with the acquis on working time. The Kosovo Civil Aviation Authority is still
not part of the Safety Assessment of Foreign Aircraft programme as no board members have
been appointed since September 2013. There was no progress on implementing the law on the
air navigation services agency. Implementing legislation still needs to be adopted to ensure
professional air navigation and safety services. The air navigation service provider does not
meet the safety and financial criteria required for certification.
As regards intermodal transport, the 2015-2025 multimodal transport sector strategy and its 5
year action plan have been approved by the government in October 2015.
5.2.5. Energy
Kosovo remains at an early stage of legislative alignment with the acquis but there was some
progress in the energy area. In the coming year, Kosovo should in particular:
51
→ start implementing the acquis on security of supply and make a final decision as regards
new generation capacity and decommissioning the Kosovo A power plant;
→ continue to strengthen institutional capacity for the energy market, in particular
safeguarding the regulator’s independence, appointing its full board, ensuring its financial
stability, and setting up transparent mechanisms to adjust energy prices.
→ strengthen the capacity of the Nuclear Safety and Radiation Protection Agency, and
identify a temporary storage facility for radioactive waste.
The energy sector continues to face problems, even if some progress was made. Power
stability improved and cuts are now infrequent, although the situation deteriorated due to last
year’s explosion in the hydrogen laboratory of the Kosovo A power plant. Those units which
were severely damaged by the explosion are now operational.
On security of supply, investment and maintenance continue to improve the reliability of the
power transmission system and reduce transmission losses. Whilst distribution losses
dropped, combined commercial and technical losses are high at 28.46 %. Two laws regulating
the oil sector, including on obligatory petroleum reserves have still not been adopted. Current
oil stocks are estimated to be only four days. There is no progress in the Energy Community’s
dispute settlement procedure about customs duties on imports of petroleum products.
While there was substantial progress with Serbia in terms of relations between transmission
companies, little progress was made, until the August 2015 agreement, on the parts of the
2013 agreement that provide for the establishment of a Serbian power supply company in the
north. The parallel management that Serbia installed at the Gazivode/Ujmani hydropower
plant continues to interfere in its operation, with a risk of flooding.
As regards the internal energy market, the third energy package has not yet been transposed.
Negotiations with the single bidder for building the new lignite power plant are ongoing and
the offer still needs to be evaluated. No progress was made on decommissioning Kosovo A or
refurbishing Kosovo B. Kosovo is highly unlikely to meet its Energy Community Treaty air
quality obligations, and has not prepared the necessary emissions plan.
There was no progress either as regards account unbundling or phasing-out cross-subsidies
between different categories of customers. In January, the power company Kosovo Electricity
Distribution and Supply Company (KEDS) and the public supplier Kosovo Electricity Supply
Company (KESCO) were legally unbundled. No progress was made on market opening and
customer switching a legal obligation as a member of the Energy Community from 1 January
2015. The operability and independence of the Energy Regulatory Office (ERO) have long
been undermined by political interference, low administrative capacity, a lack of human
resources and a 17 % budget cut. The ERO board currently has only two out of five members,
meaning that it cannot legally assume many of its responsibilities. The government has not yet
designed a mechanism to support vulnerable customers.
The existing renewable energy policy framework, authorising and licensing procedures have
yet to produce results or even remotely approach Kosovo’s renewable energy target of 25 %
by 2020. Kosovo is still not in line with the 2009 renewables directive and has no mechanism
to monitor progress in reaching its 2020 targets. Any further development of hydropower
should respect EU environmental legislation. There was no progress in meeting the
requirements for the use of biofuels in transport.
The law on energy efficiency is not aligned with the acquis. The directive on energy
performance of buildings is not being implemented. Kosovo still has not set up its own energy
efficiency fund. The combined heat and power project at the Kosovo B power plant started
52
operating in November, resulting in lower costs to households, reduced environmental
pollution and a more secure supply for Pristina residents. The Kosovo Agency for Energy
Efficiency is understaffed and has no capacity to monitor, evaluate and verify progress
towards targets. There was progress in municipal energy efficiency planning, but local
capacity needs strengthening.
In nuclear safety and radiation protection, the law on protection from ionising and non-
ionising radiation has still not been adopted. The staff of the regulatory agency has increased
but its licensing and inspection capacity remains poor. Funding for the agency is insufficient
for it to implement its mandate, in particular licensing, public health and safety aspects. There
is no radiation monitoring (for example of potential depleted uranium sites). There is no
control of radioactive waste and no radiological emergency plan. Kosovo should identify a
temporary radioactive waste storage facility while work continues to find a permanent site.
5.2.6. Information society and media
Kosovo has some level of preparation in this area. Some progress was made, in particular in
electronic communication and information and communication technologies. However,
Kosovo needs to continue efforts to complete the legal framework. In the coming year,
Kosovo should in particular:
→ ensure appropriate capacity, resources and independence of telecoms and media regulators;
→ implement, as a matter of urgency, the digital switchover and develop a solution for
sustainable funding of the public service broadcaster.
In electronic communications and information and communication technologies, the
Regulatory Authority of Electronic and Postal Communications (RAEPC) has completed the
secondary legislation based on the 2012 law on electronic communications. Kosovo has
continued efforts to use excess infrastructure capacity of the public service operators
(railways, energy and road infrastructure) for electronic communications. The three mobile
operators launched 4G services in December 2014. Mobile telephony penetration reached 95
% of active users. Overall internet penetration increased from 9.18 % in 2013 to 10.51 % in
2014.
RAEPC has not seen any improvements in its financial and organisational independence. This
year the regulator has auctioned a new frequency band for the use of telecommunications
operators. It is in the final stage of reviewing offers. A national computer emergency response
team, set up in 2014, still lacks trained staff.
At the end of August 2015, Kosovo and Serbia agreed the Action Plan to implement the 2013
Brussels telecom arrangements, including arrangements for the allocation of a 3 digit dial
code for Kosovo by the International Telecommunications Union (ITU).
On information society services, Kosovo adopted a new IT strategy. The Information
Society Agency is now fully operational and serving as the central government entity for e-
government services and infrastructure.
On audiovisual policy, Kosovo failed to meet the internationally agreed June 2015 deadline
for the digital switchover, on which the law was adopted only in July. The Independent Media
Commission was very late in adopting a strategy for digitalisation which leaves important
issues undefined. Consequently, the preparation of necessary implementing legislation will
also be delayed. Technical preparations are still at an early stage. Kosovo needs to ensure that
the digital switchover process is carried out in full transparency.
53
Since Kosovo is not a member of the ITU, its frequencies are under the authority of Serbia.
The public service broadcaster RTK remains dependent on state financing from the Kosovo
budget, which undermines its editorial independence. In 2014, the public broadcaster’s union
organised a string of protests accusing management of nepotism, corruption and bias in favour
of one political party. RTK’s management responded by dismissing two leaders of the union,
who were reinstated by a decision by the Labour Inspectorate. Kosovo has failed to meet its
legal obligation to ensure RTK’s financial independence within the required timeframe.
5.2.7. Financial control
Kosovo is at an early stage of preparation in this area. Some progress was made in the past
year, especially with the adoption of the strategy and action plan for public internal financial
control (PIFC) and in relation to external audit. However, lack of systematic implementation
of managerial accountability and delegation of responsibilities within organisations hampers
further development of PIFC. Significant efforts are needed to implement PIFC at all levels of
the administration and in publicly owned enterprises. In addition to addressing the
shortcomings outlined below, in the coming year Kosovo should in particular:
→ start implementing the activities set out in the 2015-2017 PIFC strategy and adopt the
revised implementing legislation for PIFC;
→ ensure systematic follow-up to external audit findings and recommendations.
Public internal financial control
The government adopted a public internal financial control strategy and action plan for
2015-2019 in April 2015. The strategy provides for the setting up of a PIFC Council to
monitor and report on the implementation of the strategy on an annual basis.
The Central Harmonisation Unit (CHU) is carrying out its duties as provided for in the law
on public finance management and accountability. It needs to strengthen its capacity for
training and capacity building among its 13 existing staff. The CHU provides an annual report
to the government on progress on the introduction of PIFC, based on responses to self-
assessment questionnaires, which is also considered by the Assembly Committee on
Oversight of the Public Finances. It is, however, not followed up by conclusions or
recommendations, neither by the government nor the Assembly.
The legal framework regulating financial management and control is largely in line with the
model of the Committee of Sponsoring Organisations (COSO) Internal Control Framework
and the guidelines of the International Organisation of Supreme Audit Institutions
(INTOSAI). Further amendments to the law on public financial management and
accountability and its implementing legislation are foreseen. Managerial accountability and
the delegation of responsibilities within organisations is neither well regulated nor
implemented coherently. Risk management is misunderstood to be a compliance exercise
rather than a management tool and is rarely applied. Neither financial commitments nor use of
financial resources are systematically kept within budget. The centralised budget inspection
function still needs to be regulated in line with PIFC requirements.
The law on internal audit is partially compliant with international standards for the
professional practice of internal auditing. 85 (out of 96) organisations required by law to set
up an internal audit function have done so. A national scheme for the certification of internal
auditors is in place. All auditors have undergone training for international certification and 67
(out of 149) have been certified with EU financial support. In order to ensure sustainability,
Kosovo needs to allocate sufficient funds for certification and continuous professional
54
training. All institutions with an audit function have an audit charter and perform audits
according to strategic and annual audit plans. The implementation of audit findings and
recommendations varies, however, depending on the skills of auditors and their management.
External audit
On the constitutional and legal framework, the National Audit Office's (NAO) role is
recognised by the Constitution. A new law on the NAO is being drafted which should define
more clearly the functional, operational and financial independence of the General Auditor, in
line with the INTOSAI standards.
On institutional capacity, the NAO is led by an acting Auditor General since November
2014. A candidate selected by the President was not approved by the Assembly and the
President has not yet restarted the process. The NAO office is fully staffed with 146 posts, of
which 120 are audit posts. Training is provided systematically, both on the job and externally.
A certification programme for regularity audit is in place and implemented based on the
international standards of supreme audit institutions (ISSAI).
The NAO has improved the quality of audit work by adopting a financial audit manual in
line with INTOSAI standards over the past year. It continues to annually update its regularity
audit and performance audit manuals in line with the ISSAI standards. A quality management
framework is in place. A specific audit support department with six staff carries out quality
assessments in addition to the quality control, which his part of the audit processes.
The impact of audit work needs to be further improved. The annual activity report is
discussed by the Assembly Committee for Oversight of the Public Finances, but there is no
systematic parliamentary follow-up to the audit report. The NAO makes all its reports
available online and proactively informs the media about important reports.
Protection of the EU’s financial interests
As regards acquis alignment, protect of the EU’s financial interests remains weak. Under
Kosovo’s criminal code, fraud relating to EU funding is a crime. The Ministry of Finance is
responsible for supporting anti-fraud and anti-corruption activities in public administration
institutions and for raising awareness of fraud in general. A special regulation is in place that
sets out the responsibilities and duties of ministries in this regard.
Kosovo does not yet have an anti-fraud coordination service (AFCOS) or AFCOS network.
No regular reporting system or risk assessment tools have been developed. Policy documents,
such as a strategy and action plan to prevent and combat fraud for the protection of the EU’s
financial interests, have yet to be developed.
With regard to cooperation with the European Commission, Kosovo has taken initial steps
to cooperate with Commission investigators during their on-the-spot missions in the past year.
There are still no clearly determined basic procedures for reporting irregularities and
suspected fraud cases, and an irregularity management system needs to be set up.
Protection of the euro against counterfeiting
Concerning acquis alignment, the legislation establishes the competent authorities and
procedures for dealing with counterfeit money. Medals and tokens similar to euro coins have
not yet been regulated. Technical analysis of counterfeit money, including euro banknotes
and coins, is mainly performed by the forensic agency within the Ministry of Internal Affairs.
The Central Bank of Kosovo does not have a specific department devoted to this analysis but
provides guidance on what to do about counterfeit money to the financial institutions licensed
55
by it. There are no formal cooperation agreements with the European Commission and the
European Central Bank.
5.2.8. Statistics
Kosovo is at an early stage of aligning its statistics with European standards in some sectors,
whereas in other sectors some level of preparations is visible. However, Kosovo faces
difficulties in implementing its own legislation in the area. Good progress was made in a few
areas, most notably in the implementation of the agricultural census. Nevertheless, the
Agency of Statistics (KAS) faces substantial shortages in terms of administrative capacity that
prevent it from producing on-time, accurate statistics relevant for evidence-based policy-
making. The production of essential macro-economic and business statistics remains limited.
In addition to addressing the shortcomings outlined below, in the coming year Kosovo should
in particular:
→ ensure sufficient human and financial resources in the budget to allow the statistical
agency to fulfil its mandate;
→ make more sector statistics available: e.g. macroeconomic and business statistics, statistics
on energy and income and living conditions.
On statistical infrastructure, the legal framework is broadly in line with the European
Statistics Code of Practice. The law on official statistics still needs to be amended and the
implementation of the existing provisions requires improvement. KAS is the main producer
and coordinator of statistics and in 2015 it introduced a web-based dissemination database,
thereby improving the accessibility of data. However, its administrative capacity and lack of
financial resources hampers the timely production of statistics and it prevents the agency
from taking full advantage of international support. All agency staff, but especially newly
recruited staff, need additional training, both on quality issues and on statistical methods and
tools. The current premises of KAS do not allow for optimal work and use of modern
technology. Data transmission to Eurostat should be improved. As regards classifications
and registers, not all the latest versions of different classifications are in place. While the
introduction of the European classification of economic activities (NACE Rev.2) in the
business register has been completed, consistency problems have been encountered. The
statistical business register needs to be updated and the quality of the data improved.
On macroeconomic statistics partial implementation of the European System of Accounts
2010 started in 2014. The KAS currently compiles annual national accounts and started
publishing quarterly national accounts in December 2014, but further development of short-
term statistics is necessary to improve quarterly accounts. Supply-use tables and input-
output tables, are not produced nor are regional and sector accounts or fiscal notifications.
Statistics on the balance of payments are compiled by the Central Bank of Kosovo and are
broadly in line with the acquis. Government finance statistics are published annually. KAS
started publishing the Harmonised Index of Consumer Prices in January 2015 and further
work is required to increase compliance with EU standards.
Structural business statistics (SBS) and some short-term statistics are partially in line with
the acquis, but the availability of short term statistics is limited. Industry and construction
statistics are broadly in line with the SBS Regulation, while statistics on the service sector
need to be developed. No data is produced on construction activities as the KAS has no data
on building permits and more staff is required to provide additional quality short-term
statistics. PRODCOM (list of products of the European Union) statistics have not yet been
introduced. Tourism statistics are partially compliant with the acquis. Research and
56
development, innovation and information and communication technology statistics are not
produced on a regular basis.
Most social statistics other than demographic statistics still need to be produced, in line with
the acquis. A pilot survey on income and living conditions (SILC) is being conducted.
Resources should be provided for SILC to become a regular survey. Some social protection
statistics are produced but the unemployment scheme needs to be added and the quality of
administrative data needs to be improved. An annual labour force survey is carried out but
the labour cost index, structure of earnings data and job vacancy statistics are still not
produced. Public health and crime statistics are not yet in line with the acquis.
In agricultural statistics an agriculture census was held in November 2014, albeit without
the participation of the four northern municipalities. The preliminary results were published
in February and final results are not yet available. Agricultural price indices and economic
accounts for agriculture are produced on a regular basis, while milk and dairy and slaughter
statistics are still not. The farm structure survey was carried out as part of the 2014
agriculture census and the 2013 agriculture household survey. Supply balance sheets and the
agriculture labour index are not yet produced.
Energy statistics cover parts of the regulation on energy statistics. Some annual energy data
and energy prices are provided to Eurostat but further improvements are needed. The lack of
energy efficiency statistics continues to be an obstacle to reporting on energy savings.
On environment statistics, waste and water statistics are already collected but statistics on
environmental protection expenditure, material flow balances and air emissions accounts are
not yet produced.
5.3. Justice, freedom and security
Kosovo is at an early stage in the area of justice, freedom and security, but has made some
progress over the past year. The authorities managed to successfully address and bring down
the significant rise in migration flows seen earlier this year. However, strong political
commitment is needed to tackle the underlying push factors of irregular migration.
Despite some operational improvements, final convictions resulting in permanent confiscation
of assets obtained through crime are still rare. The number of arrests, seizures and court
verdicts for drug trafficking remains low. The investigative capacity of the police is generally
good, but the implementation of intelligence-led policing concepts needs to be further
improved. Kosovo is actively involved in international and regional police investigations;
however, its formal cooperation is limited due to status-related reasons.
In the coming year, Kosovo should pay particular attention to:
→ fully implementing the intelligence-led policing approach, including by making full use of
the potential of the National Centre for Border Management;
→ systematically applying tools for financial investigation and asset confiscation, enhancing
the capacity and expertise of police, prosecution and judges;
→ pursuing organised crime-related investigations with the aim of securing final convictions,
especially in the fight against drug trafficking and human trafficking, and in dismantling
migrant smuggling groups.
5.3.1. Visa policy, border controls, asylum and migration
As regards visa policy, in line with the European Union Schengen Visa Code and with the
expansion of consular missions, Kosovo managed to decrease the number of visas issued at
57
border crossing points. A total of 943 visas were issued from September 2014 to July 2015, of
which only six were issued at border crossing points. Citizens of 88 countries currently need a
visa to enter Kosovo.
An improved version of the Civil Status Registration System (CSRS) was launched in July, in
line with the adopted revised legislation. Civil status certificates are issued after checking the
CSRS data against the civil registry books. In August 2015, Kosovo started digitalising the
civil registry books returned from Serbia in order to electronically link and match them with
CSRS data. The process should be completed by mid-2016.
There was little action on the development plan for the National Centre for Border
Management (NCBM). Based on the new law on inter-agency cooperation, a joint
intelligence, risk and threat analysis unit was set up in the NCBM and a strategic threat
assessment for integrated border management (IBM) produced. Within the new structure,
clearer communication is needed on intelligence requirements, from central to regional and
local level.
Joint patrols were carried out with Albania, the former Yugoslav Republic of Macedonia and
Montenegro. A joint cooperation centre was opened in January with the former Yugoslav
Republic of Macedonia. The technical work on delineating the remaining nine kilometres of
the border with Montenegro was completed and Ministers signed the agreement in August
2015, which now needs parliamentary ratification by 2/3 majority. All six interim IBM
crossing points with Serbia are operational and two more were agreed in principle. Technical
agreements on the exact location and construction of permanent IBM crossing points were
reached. There have been improvements in checks on documents. The detection rate of
offences at the borders has increased across the three IBM agencies (Kosovo police, Kosovo
Customs and the Kosovo Veterinary and Food Agency) due to improved risk analysis and
subsequent operational actions. The Kosovo police has not yet put in place a maintenance
contract for the EU-funded border management IT system; this hinders progress on effective
border control.
Since June 2014 Kosovo has been a full member of the Migration, Asylum, Refugees
Regional Initiative to further promote security, stability and regional cooperation in this field.
Unlike some of its neighbours, Kosovo has not been seriously affected by the refugee crisis.
Though it has increased, the number of asylum claims filed in Kosovo is still limited. Kosovo
received 98 asylum claims in 2014 and 53 from January to August 2015. The majority of
asylum applicants came from Syria. Asylum-seekers are referred to the asylum centre for the
duration of the procedure, where they enjoy freedom of movement and have access to all
basic services. Most asylum-seekers choose to continue their journey before their claim has
been decided. So far Kosovo authorities granted subsidiary protection to only one person in
2015 (one in 2014, three in 2013). The detention centre for foreigners was made operational
in June 2015, providing for a more effective return policy. The accommodation centre at
Pristina airport is also operational.
Kosovo has aligned most of its legislation with the acquis and international standards in this
area. Availability of interpreters has been ensured. However, effective mechanisms to identify
countries of origin and profiles of people in need of international protection need to be
implemented.
December 2014 to March 2015 saw a significant increase in irregular migration from Kosovo
via Serbia into the EU. This was mirrored in a corresponding increase of asylum seekers from
Kosovo. The number of asylum applications lodged by Kosovo citizens increased to 37 905 in
2014 (from 20 215 in 2013). From January to June 2015, 62 860 Kosovo citizens applied for
58
asylum in the EU. This number has decreased significantly since May 2015. Still, Kosovo
must address the high number of manifestly unfounded asylum applications lodged by its
citizens in the EU. Kosovo undertook some effective short-term measures to curb irregular
migration early in 2015. Reinforced checks on buses in Kosovo, stringent checks of licenses
of bus companies, awareness-raising and Serbian border control measures at the border with
Hungary resulted in a significant decline in irregular migration. The EU-sponsored dialogue
with Serbia on irregular migration led to closer cooperation with Belgrade in this area.
Kosovo must ensure effective long-term policies to prevent further spikes in irregular
migration. Measures are also needed to tackle the underlying causes of emigration, in
particular high unemployment, especially among young people. The 2013 migration profile,
providing analysis and data for policy guidance on migration, was adopted in March 2015; the
2014 profile is expected to be approved by end-2015.
Many of the migrants who left Kosovo have since been returned. A functioning readmission
process is in place and the acceptance rate from Kosovo is high (97 % in the first half of
2015). Kosovo readmitted 4 610 people in 2014, of whom 3 352 were forced and 1 258
voluntary returnees. In the first half of 2015 Kosovo readmitted 12 330 people, of whom a
majority (6 834) were voluntary returnees and 5 496 forced. Kosovo has signed readmission
agreements with 22 countries. Further readmission agreements, including with Turkey, are
currently being negotiated and Kosovo should encourage their swift conclusion.
The regulation governing the reintegration fund has been amended, providing for broader
access of returnees, who are economically particularly disadvantaged, to reintegration
services. Central processing of repatriated people is largely efficient and emergency
assistance is provided to those in need. The Reintegration Case Management System has
improved. An increased number of returnees has benefited from employment schemes and
start-ups of businesses. Agreements with local companies have been reached to further
increase this number. The long-term integration of returnees, through access to education,
employment and healthcare, remains a challenge. Kosovo needs to ensure that the budget of
the reintegration fund is spent, making full use of the resources available to support
reintegration. The capacity of municipalities to efficiently manage reintegration at local level
should be further increased.
5.3.2. Money laundering
The action plan for the national risk assessment on money laundering and combating financial
terrorism was mostly implemented on time. With regard to the criminal offence of money
laundering, Kosovo’s legal framework is largely in compliance with the Vienna and Palermo
Conventions. However, certain gaps, for instance on the declaration of assets by senior public
officials and on market manipulation, remain.
Cooperation between the Financial Intelligence Unit in the Ministry of Finance and key
bodies in the anti-money laundering chain needs to be further enhanced. Better co-operation
and interaction with in particular police and prosecution is vital. The anti-corruption
department within the Kosovo Special Prosecution Office should be strengthened to tackle
more anti-money laundering cases, in cooperation with the EU Rule of Law Mission,
EULEX. There has been an increase in the number of anti-money laundering cases forwarded
to the prosecution. Nevertheless, there have been few convictions to date. Cooperation
between the prosecution and police should be strengthened. Kosovo should make an effort to
align its legislation and practices to the FATF recommendations.
59
5.3.3. Drugs
The Kosovo police directorate for investigating trafficking in narcotics has paid some
attention to prevention and supply reduction in implementing the strategy and action plan
against narcotics. Operations, including house raids, led to the dismantling of some criminal
groups. Further implementation of intelligence-led policing is nevertheless necessary.
Kosovo cooperates with the European Monitoring Centre for Drugs and Drugs Addiction, but
has yet to appoint a national focal point or an operational drug observatory. Special attention
needs to be paid to raising public awareness of the consequences of drug abuse. A new
training programme on the dangers of drug abuse has been developed for Kosovo police
community safety officers and selected teachers. Addiction treatment services and methadone
therapy services were set up in five hospitals and two prisons, strengthening drug abuse
prevention and harm reduction strategies. Kosovo continues to be used mainly for transit and
storage of heroin and cannabis (skunk), but drug seizures remain low.
5.3.4. Police
The Kosovo police continues to be perceived as the most trusted rule of law institution in
Kosovo. Cooperation between the Kosovo police and Europol is currently facilitated by an
EU Member State official working within EULEX. The Kosovo police has already
contributed to successful joint investigations supported by Europol, including the large-scale
destruction of a Europe-wide migrant smuggling network in March. Kosovo applied to join
Interpol in April.
Cooperation between the independent police inspectorate (PIK) and the Kosovo police
Professional Standards Directorate continue to be good. In 2014, the PIK received 1 304
complaints and information, on the basis of which 132 cases were sent to the prosecution
service. Criminal indictments were filed against 28 suspects and are being processed in the
competent courts.
The integration of former Serbian Ministry of Internal Affairs Units officers into the police
led to unrest when others who had not been integrated into the police protested against their
non-selection. Additional staff were allocated to war crimes investigations within the police,
but investigations remain largely non-operational. Continued efforts remain necessary on
witness protection.
5.3.5. Fighting organised crime and terrorism
Track record
Kosovo needs to build a track record of fighting organised crime, including confiscation and
sequestration of assets and final conviction of perpetrators, but there is little concrete evidence
of this so far. In 2014, the estimated value of frozen and temporarily confiscated assets was
more than EUR 30 million, while the value of permanently confiscated assets, managed by
the Agency for Managing the Sequestrated and Confiscated Assets, was a total of EUR 128
298, covering 29 assets.
The police arrested a substantial number of people who had either joined terrorist groups in
conflicts abroad or intended to do so. During 2014, the directorate against terrorism
investigated and filed charges in several terrorism-related cases and conducted two
operational plans and 484 raids in different regions.
During 2014, 9.3 kg of heroin, 21.1 kg of cocaine and 722.8 kg of marijuana were
confiscated, and 17 criminal gangs were identified and disrupted.
Institutional and operational capacity
60
To boost the police’s capacity to effectively tackle organised crime, police officers were
trained on advanced investigation techniques for hate crime, airport security check points and
strategic assessment and tactical tasking and coordination. More financial investigations were
conducted compared to previous years and nine financial experts were trained and certified to
further step up the capacity to conduct financial investigations. Kosovo needs to further
increase the level of expertise to tackle complex criminal investigations, such as financial
crime and procurement fraud, essential to dealing with corruption effectively. Kosovo
institutions have to commit themselves to a zero-tolerance approach in the fight against
organised crime and corruption in practice and in all decision-making processes. A new
national coordinator against trafficking in narcotics should be appointed.
Legal framework
Some progress has been made and Kosovo has established the key components of the legal
framework necessary for the fight against organised crime. Based on the law on preventing
and combating cybercrime, the police department for investigating organised crime set up a
sector for cybercrime investigations and staff received specialised training.
In January a law was adopted criminalising the phenomenon of foreign terrorist fighters in
line with UN Security Council Resolution 2178 (2014). The criminal code does not provide a
sufficient legal base for tackling the financing of terrorism and the terminology used is
inconsistent. Kosovo’s legislative framework for seizure and confiscation lacks specific
provisions to enable the authorities to take the necessary preventive and punitive measures to
freeze and, if appropriate, seize terrorist-related funds or other assets without delay, in
accordance with the relevant UN Resolutions. Efforts need to be enhanced to identify, prevent
and disrupt the flow of foreign terrorist fighters traveling to conflict areas such as Iraq and
Syria.
The parliament adopted the law on the interception of telecommunications in May 2015.
Strategic framework
The implementation of the 2012-2017 strategy and action plan against organised crime is
ongoing. In November 2014, the third annual review of the 2012-2017 strategies and action
plans against organised crime, narcotics and terrorism took place. The assessment covered the
practical implementation of the activities in the 2013-2014 action plans. A new strategy
against trafficking in human beings (2014-2019) was adopted in May 2015.
In September 2015 Kosovo adopted the 2015-2020 strategy and action plan on prevention of
violent extremism and radicalisation that may lead to terrorism. The strategy is the result of
close cooperation with religious communities, social and frontline workers, the education
system and youth organisations.
Fighting organised crime and corruption remains fundamental to countering criminal
infiltration of the political, legal and economic systems.
5.3.6. Judicial cooperation in civil and criminal matters
With regard to the Hague Conventions, in particular the 1980 Convention on international
child abduction, the Department for International Legal Cooperation within the Ministry of
Justice only deals, albeit professionally, with the civil aspects of international child abduction
cases. Kosovo needs to enhance its capacity to become an effective partner in the context of
mutual legal assistance. No new bilateral agreements on judicial cooperation were concluded.
61
62
Annex I – Relations between the EU and Kosovo
On 27 October 2015, the European Union signed a Stabilisation and Association
Agreement (SAA) with Kosovo. The SAA constitutes the first contractual relationship
between the EU and Kosovo. The SAA is a comprehensive agreement that provides a
framework for political dialogue and covers co-operation in a wide variety of sectors,
including justice and home affairs, trade, education, employment, energy, environment and a
range of other policy areas.
Kosovo has continued to address the priorities set out in last year’s Progress Report and in the
Commission's feasibility study for a Stabilisation and Association Agreement issued in 2012.
In particular, progress has been made on the EU-facilitated dialogue with Serbia and
requirements of the visa liberalisation dialogue. However, the political deadlock following the
June 2014 elections only ended in November 2014 with the formation of a new coalition
government. This has caused delays in a number of areas.
Kosovo’s commitment to its EU-facilitated dialogue with Serbia and the normalisation of
their relations has been instrumental to the fulfilment of its European ambitions. Kosovo
needs to continue to focus on the implementation of agreements reached with Serbia and
continue negotiating new ones.
Kosovo has remained engaged in the Stabilisation and Association Process Dialogue. Visa
liberalisation continues to be one of Kosovo's key priorities. The Commission has issued two
reports on Kosovo's progress towards visa liberalisation (February 2013 and July 2014).
Following Kosovo's report in June, expert missions took place in July 2015.
As regards financial assistance, during 2014 the EU Office in Kosovo continued to work
closely with the Ministry of European Integration in the preparation of the 2014 programme
under the IPA II financial framework. The IPA 2014 programme was approved by the IPA
Committee on 27 November 2014 with an EU contribution of EUR 66.05 million,
complemented with co-financing from Kosovo for an overall budget of EUR 75.38 million.
The Framework Agreement between Kosovo and the European Commission on the
arrangements for the implementation of union financial assistance to Kosovo under the
Instrument for Pre-accession Assistance (IPA II) was signed in April 2015. The Financing
Agreement for IPA 2014 entered into force on 14 September 2015. In 2014, the EU Office
signed 212 contracts for projects in Kosovo for a total of EUR 79.3 million. It continued to
ensure the co-ordination of donors active in Kosovo by organising – together with the Kosovo
Ministry of European Integration – regular donor co-ordination meetings.
The Commission submitted its proposal to sign and conclude the framework agreement on the
participation of Kosovo in EU programmes in April 2013. This proposal is still pending
Council approval.
Following the extension of the mandate of the EU Rule of Law Mission EULEX until June
2016, a new Head of Mission took office in October 2014. In response to allegations of
corruption within the mission, the HRVP in November 2014 appointed an independent legal
expert to review EULEX's handling of these allegations. The expert issued his final report in
April 2015. Throughout the reporting period, Kosovo institutions maintained good co-
operation with EULEX.
In August 2015 the Kosovo Assembly adopted the constitutional amendments and the law
allowing for the establishment of the Specialist Chambers and a Specialist Prosecution
63
Office, which are to prosecute cases of grave trans-boundary and international crimes
committed during and in the aftermath of the conflict in Kosovo.
To date, Kosovo has been recognised by 110 UN member countries, including 23 EU
Member States.
During the reporting period, the UN Secretary-General continued to provide regular updates
on the implementation of the UN’s mission in Kosovo (UNMIK). He urged the Kosovo
Assembly to adopt the legislation concerning the establishment of the Specialist Chambers
swiftly. He also called for full engagement by Belgrade and Pristina in the establishment of
the Association/Community of Serb majority municipalities. He expressed concern at the
population outflows from Kosovo in late 2014 and early 2015.
The NATO-led Kosovo Force (KFOR) has continued to help ensure a safe and secure
environment in Kosovo. During the reporting period, it had some 4 500 personnel.
64
Annex II – Statistical Annex
STATISTICAL DATA (as of 7.09.2015)
Kosovo
Basic data Note 2002 2010 2011 2012 2013 2014
Population (thousand) 1) : 2 208p 1 799b 1 816 1 821e 1 805e
Total area of the country (km²) 10 887 10 887 10 887 10 887 10 887 10 887
National accounts Note 2002 2010 2011 2012 2013 2014
Gross domestic product (GDP) (million euro) : 4 402 4 814 5 059 5 327 :
GDP (euro per capita) 2) : 2 480 2 672 2 799 2 935 :
GDP (in Purchasing Power Standards (PPS) per
capita)
: : : : : :
GDP (in Purchasing Power Standards (PPS) per
capita), relative to the EU average (EU-28 =
100)
: : : : : :
Real GDP growth rate: change on previous year
of GDP volume (%)
: 3.3 4.4 2.8 3.4 :
Gross value added by main sectors
Agriculture, forestry and fisheries (%) : 16.2 15.6 14.8 14.4 :
Industry (%) : 20.7 19.7 19.9 20.3 :
Construction (%) : 7.7 9.2 8.2 7.9 :
Services (%) : 55.4 55.6 57.1 57.4 :
Final consumption expenditure, as a share of
GDP (%)
: 102.6 103.3 105.2 104.0 :
Gross fixed capital formation, as a share of GDP
(%)
: 29.6 30.7 26.0 24.8 :
Changes in inventories, as a share of GDP (%) : 3.4 3.3 2.9 2.8 :
Exports of goods and services, relative to GDP
(%)
: 19.9 19.6 18.2 17.4 :
Imports of goods and services, relative to GDP
(%)
: 55.5 56.8 52.4 49.0 :
Business Note 2002 2010 2011 2012 2013 2014
Industrial production volume index (2010 = 100) : : : : : :
Number of active enterprises (number) : : : : 32 651 33 937
Birth rate: number of enterprise births in the
reference period (t) divided by the number of
enterprises active in t (%)
: 16.1 13.6 16.8 12.4 13.7
Death rate: number of enterprise deaths in the
reference period (t) divided by the number of
enterprises active in t (%)
: 13.8 12.9 12.3 8.6 :
People employed in SMEs as a share of all
persons employed (within the non-financial
business economy) (%)
: 73.7 72.1 74.2 74.5 74.1
Value added by SMEs (in the non-financial
business economy) (EUR million)
: : : : : :
Total value added (in the non-financial business
economy) (EUR million)
: : : : : :
Inflation rate Note 2002 2010 2011 2012 2013 2014
Consumer price index (CPI), change relative to
the previous year (%)
-1.0 3.5 7.3 2.5 1.8 0.4
65
Balance of payments Note 2002 2010 2011 2012 2013 2014
Balance of payments: current account total
(million euro)
3) -104 -516 -658 -380 -339 -437
Balance of payments current account: trade
balance (million euro)
3) -890 -1 742 -2 047 -2 050 -1 996 -2 059
Balance of payments current account: net
services (million euro)
3) -23 176 256 324 312 336
Balance of payments current account: net
income (million euro)
3) 154 67 111 154 122 114
Balance of payments current account: net
current transfers (million euro)
3) 655 982 1 021 1 193 1 222 1 172
of which government transfers (million euro) 3) 661 370 329 402 342 292
**3 year backward moving average of the current
account balance relative to GDP (%)
3) : 11.4 12.0 11.4 9.5 7.4
Net inward foreign direct investment (FDI)
(million euro)
3) : 331.1 387.0 213.3 250.2 123.8
Foreign direct investment (FDI) abroad (million
euro)
3) : 37.4 5.0 15.8 30.0 27.3
of which FDI of the reporting economy in the EU-
28 countries (million euro)
3) : 1.0 0.0 5.2 21.5 10.1
Foreign direct investment (FDI) in the reporting
economy (million euro)
3) : 368.5 392 229.1 280.2 151.2
of which FDI of the EU-28 countries in the
reporting economy (million euro)
3) : 217.9 205.3 123.2 172.2 92.5
**Net international investment position, relative
to GDP (%)
3) : 10.2 2.9 5.0 7.0 5.5
Year on year rate of change in gross inflow of
remittances (in national currency) from migrant
workers (%)
3) : -0.2 0.1 3.6 2.5 11.7
Public finance Note 2002 2010 2011 2012 2013 2014
***General government deficit / surplus, relative
to GDP (%)
6.2p : : : : :
***General government gross debt relative to
GDP (%)
4) 0.0 6.1e 5.3e 8.3e 9.0e :
Total government revenues, as a percentage of
GDP (%)
: 26.8 27.1 30.4 26.8 :
Total government expenditure, as a percentage
of GDP (%)
: 28.9 28.8 29.0 28.2 :
Financial indicators Note 2002 2010 2011 2012 2013 2014
Gross foreign debt of the whole economy,
relative to GDP (%)
: 31.2 29.7 30.0 30.2 32.3
Gross foreign debt of the whole economy,
relative to total exports (%)
: : : : : :
Money supply: M1 (banknotes, coins, overnight
deposits, million euro)
998 : : : : :
Money supply: M2 (M1 plus deposits with
maturity up to two years, million euro)
1 126 : : : : :
Money supply: M3 (M2 plus marketable
instruments, million euro)
: : : : : :
Total credit by monetary financial institutions to
residents (consolidated) (million euro)
86 1 459 1 698 1 763 1 806 1 882
Interest rates: day-to-day money rate, per
annum (%)
: : : : : :
Lending interest rate (one year), per annum (%) 5) : 14.63 14.14 13.42 12.36 10.70
Deposit interest rate (one year), per annum (%) 5) : 3.70 3.49 3.57 3.39 1.07
Euro exchange rates: average of period (1 euro
= … national currency)
1 1 1 1 1 1
Trade-weighted effective exchange rate index
(2005 = 100)
: : : : : :
66
Value of reserve assets (including gold) (million
euro)
: 585 491 760 724 746
External trade in goods Note 2002 2010 2011 2012 2013 2014
Value of imports: all goods, all partners (million
euro)
: 2 158 2 437 2 462 2 421 2 538
Value of exports: all goods, all partners (million
euro)
: 296 306 267 272 325
Trade balance: all goods, all partners (million
euro)
: -1 862 -2 131 -2 195 -2 148 -2 214
Terms of trade (export price index / import price
index * 100) (number)
: 125 97 87 97 107
Share of exports to EU-28 countries in value of
total exports (%)
: 45.5 45.5 41.1 43.5 30.2
Share of imports from EU-28 countries in value
of total imports (%)
: 41.0 41.5 42.6 44.7 42.6
Demography Note 2002 2010 2011 2012 2013 2014
Crude rate of natural change of population
(natural growth rate): number of births minus
deaths (per thousand inhabitants)
: : 11.4p 11.3 11.9 13.3
Infant mortality rate deaths of children under one
year of age (per thousand live births)
11.2 8.8 12.1e 11.4 5.5 6.6
Life expectancy at birth: male (years) : : 68.0e 74.1 74.2 74.2
Life expectancy at birth: female (years) : : 71.9e 79.4 79.4 79.5
Labour market Note 2002 2010 2011 2012 2013 2014
Economic activity rate for persons aged 20–64:
proportion of the population aged 20–64 that is
economically active (%)
: : : 42.5 46.4 47.7
*Employment rate for persons aged 20–64:
proportion of the population aged 20–64 that are
in employment (%)
: : : 29.7 33.0 31.3
Male employment rate for persons aged 20–64
(%)
: : : 46.6 51.5 48.4
Female employment rate for persons aged 20–
64 (%)
: : : 12.4 14.9 14.5
Employment rate for persons aged 55–64:
proportion of the population aged 55–64 that are
in employment (%)
18.4 : : 25.8 30.8 29.8
Employment by main sectors
Agriculture, forestry and fisheries (%) 10.3 : : 4.6 5.9 2.6
Industry (%) 17.2 : : 19.0 16.8 17.7
Construction (%) 11.2 : : 9.5 11.4 10.9
Services (%) 61.3 : : 65.0 64.1 67.2
People employed in the public sector as a share
of total employment, persons aged 20–64 (%)
: : : : : 31.4s
People employed in the private sector as a
share of total employment, persons aged 20–64
(%)
: : : : : 68.6s
Unemployment rate: proportion of the labour
force that is unemployed (%)
55.0 : : 30.9 30.0 35.3
Male unemployment rate (%) 45.2 : : 28.1 26.9 33.1
Female unemployment rate (%) 74.5 : : 40.0 38.8 41.6
Youth unemployment rate: proportion of the
labour force aged 15–24 that is unemployed (%)
77.7 : : 55.3 55.9 61.0
Long-term unemployment rate: proportion of the
labour force that has been unemployed for 12
months or more (%)
26.0 : : 18.5 20.7 26.1
Unemployment rate for persons (aged 25–64)
having completed at most lower secondary
education (ISCED 0–2) (%)
: : : : : :
Unemployment rate for persons (aged 25–64) : : : : : :
67
having completed tertiary education (ISCED 5 &
6) (%)
Social cohesion Note 2002 2010 2011 2012 2013 2014
Average nominal monthly wages and salaries
(national currency)
: : : : : :
Index of real wages and salaries (index of
nominal wages and salaries divided by the
inflation index) (2000 = 100)
: : : : : :
GINI coefficient — see definitions : : : : : :
Poverty gap : : : : : :
*Early leavers from education and training:
proportion of the population aged 18–24 with at
most lower secondary education who are not in
further education or training (%)
: : : : : :
Standard of living Note 2002 2010 2011 2012 2013 2014
Number of passenger cars relative to population
size (number per thousand population)
: 90.6p 111.2e 111.3 125.0 158.0
Number of mobile phone subscriptions relative
to population size (number per thousand
population)
: 442.3 543.7 532.5 : 487.8
Infrastructure Note 2002 2010 2011 2012 2013 2014
Density of railway network (lines in operation per
thousand km²)
: 30.3 30.6 30.6 31.0 31.0
Length of motorways (kilometres) 0 0 38 60 80 80
Innovation and research Note 2002 2010 2011 2012 2013 2014
Public expenditure on education relative to GDP
(%)
: 3.8 4.1 4.0 : 4.4
*Gross domestic expenditure on R&D relative to
GDP (%)
: : : : : :
Percentage of households who have internet
access at home (%)
: : 57 : : :
Environment Note 2002 2010 2011 2012 2013 2014
Energy intensity of the economy (kg of oil
equivalent per 1 000 euro GDP at 2005 constant
prices)
: : : : : :
Electricity generated from renewable sources
relative to gross electricity consumption (%)
: : : : : :
Road share of inland freight transport (based on
tonne-km) (%)
: : : : : :
Energy Note 2002 2010 2011 2012 2013 2014
Primary production of all energy products
(thousand TOE)
: : : : : :
Primary production of crude oil (thousand TOE) : : : : : :
Primary production of hard coal and lignite
(thousand TOE)
6) 5 528 7 960 8 212 8 028 8 219 7 204
Primary production of natural gas (thousand
TOE)
: : : : : :
Net imports of all energy products (thousand
TOE)
: : : : : :
Gross inland energy consumption (thousand
TOE)
: : : : : :
Electricity generation (thousand GWh) 3.2 5.5 5.7 5.9 6.2 5.3
68
Agriculture Note 2002 2010 2011 2012 2013 2014
Agricultural production volume index of goods
and services (at producer prices) (previous year
= 100)
: : : : : :
Utilised agricultural area (thousand hectares) : 242e 243e 276 295 258p
Livestock numbers: live bovine animals
(thousand heads, end of period)
319 357e 362e 314 321 235p
Livestock numbers: live swine (thousand heads,
end of period)
110 51e 51e 56 49 :
Livestock numbers: live sheep and live goats
(thousand heads, end of period)
116 229e 247e 123 160 199p
Production and utilisation of milk on the farm
(total whole milk) (thousand tonnes)
: : : : : :
Harvested crop production: cereals (including
rice) (thousand tonnes)
396 431e 435e 442 540 :
Harvested crop production: sugar beet
(thousand tonnes)
: : : : : :
Harvested crop production: vegetables
(thousand tonnes)
135 239e 247e 117 185 :
: = not available
b = break in series
e = estimated value
p = provisional
s = Eurostat estimate
* = Europe 2020 indicator
** = Macroeconomic Imbalance Procedure (MIP) indicator
*** = The government deficit and debt data of enlargement countries are published on an "as is" basis and without any
assurance as regards their quality and adherence to ESA rules.
Footnotes:
1) 2011: data are based on 2011 census data and estimates that the Kosovo agency of statistics (KAS) have for 3 northern
municipalities who did not participate in the census and natural growth for the period April 15–31 December 2011.
2) Population figures were revised after GDP publication. These changes will be included in the annual publication of GDP (in
November 2015).
3) 2010–14: based on balance of payments manual edition 6 (BPM6).
4) 2010–13: the value of GDP is obtained from the Medium Term Expenditure Framework 2014–2016 (April 2013).
5) Includes disbursement fee charged by banks.
6) Thousand tonnes.