# EUR-Lex - 52013SC0414 - EN

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# 52013SC0414

**COMMISSION STAFF WORKING DOCUMENT ALBANIA 2013 PROGRESS REPORT Accompanying the document COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL Enlargement Strategy and Main Challenges 2013-2014 /* SWD/2013/0414 final */**

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TABLE OF CONTENTS

1........... Introduction. 3

1.1........ Preface. 3

1.2........ Context 3

1.3........ Relations between the EU
and Albania. 4

2........... Political criteria. 5

2.1........ Democracy and the rule of
law.. 5

2.2........ Human rights and the
protection of minorities. 10

2.3........ Regional issues and
international obligations. 11

3........... Economic criteria. 12

3.1........ The existence of a
functioning market economy. 12

3.2........ The capacity to cope with
competitive pressure and market forces within the Union. 17

4........... Ability to take on the
obligations of membership. 19

4.1........ Chapter 1: Free movement
of goods. 19

4.2........ Chapter 2: Freedom of
movement for workers. 20

4.3........ Chapter 3: Right of
establishment and freedom to provide services. 20

4.4........ Chapter 4: Free movement
of capital 21

4.5........ Chapter 5: Public
procurement 21

4.6........ Chapter 6: Company law.. 22

4.7........ Chapter 7: Intellectual
property law.. 23

4.8........ Chapter 8: Competition
policy. 24

4.9........ Chapter 9: Financial
services. 25

4.10...... Chapter 10: Information
society and media. 26

4.11...... Chapter 11: Agriculture and
rural development 27

4.12...... Chapter 12: Food safety,
veterinary and phytosanitary policy. 28

4.13...... Chapter 13: Fisheries. 29

4.14...... Chapter 14: Transport
policy. 29

4.15...... Chapter 15: Energy. 30

4.16...... Chapter 16: Taxation. 31

4.17...... Chapter 17: Economic and
monetary policy. 32

4.18...... Chapter 18: Statistics. 33

4.19...... Chapter 19: Social policy
and employment 34

4.20...... Chapter 20: Enterprise and
industrial policy. 35

4.21...... Chapter 21: Trans-European
networks. 36

4.22...... Chapter 22: Regional policy
and coordination of structural instruments. 37

4.23...... Chapter 23: Judiciary and
fundamental rights. 38

4.24...... Chapter 24: Justice,
freedom and security. 47

4.25...... Chapter 25: Science and
research. 50

4.26...... Chapter 26: Education and
culture. 51

4.27...... Chapter 27: Environment and
climate change. 51

4.28...... Chapter 28: Consumer and
health protection. 53

4.29...... Chapter 29: Customs union. 55

4.30...... Chapter 30: External
relations. 55

4.31...... Chapter 31: Foreign,
security and defence policy. 56

4.32...... Chapter 32: Financial
control 57

4.33...... Chapter 33: Financial and
budgetary provisions. 57

1. 
Introduction
1.1. 
Preface

The Commission
reports regularly to the Council and Parliament on the progress made by the
countries of the Western Balkans region towards European integration, assessing
their efforts to comply with the Copenhagen criteria and the conditionality of
the Stabilisation and Association Process.

This progress
report, which largely follows the same structure as in previous years:

–   briefly describes the relations between Albania and
the European Union;

–   analyses the situation in Albania in terms of the
political criteria for membership;

–   analyses the situation in Albania on the basis of
the economic criteria for membership;

–   reviews Albania’s capacity to take on the
obligations of membership, i.e. the acquis expressed in the Treaties,
the secondary legislation, and the policies of the Union.

This report
covers the period from October 2012 to September 2013. Progress is measured on
the basis of decisions taken, legislation adopted and measures implemented. As
a rule, legislation or measures which are under preparation or awaiting
parliamentary approval have not been taken into account. This approach ensures
equal treatment across all reports and enables an objective assessment.

The report is
based on information gathered and analysed by the Commission. Many sources have
been used, including contributions from the government of Albania, the EU
Member States, European Parliament reports[1]
and information from various international and non-governmental organisations.

The Commission
draws detailed conclusions regarding Albania in its separate communication on
enlargement,[2]
based on the technical analysis contained in this report.

1.2. 
Context

The
Stabilisation and Association Agreement between Albania and the EU entered into
force in April 2009. Albania presented its application for membership of the
European Union on 28 April 2009. Following a request by the Council, the
Commission submitted its Opinion on Albania’s application
in November 2010. In December 2010, the Council noted that the opening of accession negotiations would
be considered once the Commission has assessed that the country has achieved
the necessary degree of compliance with the membership criteria and, in
particular, has met the key priorities set out in the Commission’s Opinion.

In view of the progress made by Albania,
the Commission recommended in October 2012 that Albania be granted candidate
status subject to the completion of key measures in the areas of judicial and
public administration reform and revision of parliament’s rules of procedure. In December 2012 with a view to deciding whether to grant candidate
status, the Council invited the Commission to report to the Council as soon as
necessary progress has been achieved, also taking into account the further
action taken by Albania to fight corruption and organised crime, including by
proactive investigations and prosecutions of such cases. Regarding the opening of negotiations, the
Council stressed that sustained implementation of reforms and fulfilment of all
key priorities would be necessary.

1.3. 
Relations between the EU and Albania

Albania is participating in the Stabilisation
and Association Process.

Overall, Albania has been implementing its
obligations under the Stabilisation and Association Agreement (SAA)
well. A Protocol to the SAA to take account of Croatia’s
accession to the EU has been agreed between the EU and Albania. The Protocol is
currently under ratification and measures for its provisional implementation
have been taken until the ratification process is completed on both sides.

Regular political
and economic dialogue between the EU and the country has continued
through the SAA structures. The Stabilisation and Association Committee and
Council met in March and April 2013 respectively. Meetings of six subcommittees
and a meeting of the special group on public administration reform were held. Albania
participates in the multilateral economic dialogue with the Commission and the
EU Member States to prepare the country for participation in multilateral
surveillance and economic policy coordination under the EU’s Economic and
Monetary Union.

Visa
liberalisation for citizens of Albania travelling
to the Schengen area has been in force since December 2010. In the framework of the post-visa liberalisation monitoring
mechanism, the Commission regularly assesses progress made by the country in
the implementation of reforms introduced under the visa roadmap. This also
includes an alert mechanism to prevent abuses, coordinated by Frontex. Within
this framework, the European Commission has regularly submitted its monitoring
reports to the European Parliament and Council. The next report will be
presented by the end of 2013. A readmission
agreement between the European Union and Albania has been in force since
2005.

Pre-accession financial
assistance is provided under the Instrument for Pre-Accession Assistance
(IPA). Albania has benefited from IPA components I — Transition Assistance and
Institution Building and II — Cross-border Cooperation. In the period 2007-13,
the EU allocated a total of approximately €594 million for Albania which
includes approximately €81 million in 2012 and €82 million in 2013 for the
national programme under IPA component I. The 2011-13 multiannual indicative
planning document for IPA component I envisages a sectoral approach with the
focus on justice and home affairs; public administration reform; transport;
environment and climate change; social development; and agriculture and rural
development. Assistance for this component is managed by the EU Delegation in
Tirana.

Under IPA component
II, Albania participates in the management and implementation of three
programmes in the Western Balkans (with Montenegro, the former Yugoslav
Republic of Macedonia and Kosovo*). It participates in one bilateral cross-border cooperation
programme with an EU Member State (Greece); and three multilateral programmes
(including EU Member States), i.e. the transnational programmes ‘South-East
Europe’ and ‘Mediterranean’ and the Adriatic regional programme.

For the period
2014-2020, the government of Albania and the Commission are discussing needs
and capacities for future assistance, under the new Instrument for
Pre-Accession Assistance (IPA II).

Albania
participates in the following EU programmes: the ‘Seventh research
framework programme’; ‘Entrepreneurship and innovation’ under the ‘Competitiveness
and innovation framework programme’; ‘Lifelong learning programme’; ‘Europe for
citizens’; ‘Culture’; and ‘Customs 2013’.

2. 
Political criteria

This section examines the progress made by Albania towards meeting
the Copenhagen political criteria, which require stability of institutions
guaranteeing democracy, the rule of law, human rights and respect for and
protection of minorities. It also monitors regional cooperation, good
neighbourly relations with enlargement countries and Member States and
compliance with international obligations.

2.1. 
Democracy and the rule of law

Despite a tense and often polarised
political climate in the run-up to the general elections in the first half of
2013, Albania continued its efforts on reforms in all areas under the key
priorities. The conduct of the
elections of 23 June, which resulted in a clear victory for the opposition
Socialist Party-led coalition Alliance for European Albania, was positively
assessed by the international election observation mission. The then incumbent
Prime Minister promptly conceded defeat, paving the way for a smooth change of
government.

Elections

The tense and polarised political climate
ahead of the June elections at times jeopardised the work of the election
administration bodies. The elections themselves were competitive and conducted
in an orderly manner overall. Voter turnout was 53.6%. Voting and counting
proceeded well, with the exception of some isolated incidents and procedural
irregularities which did not affect the generally smooth conduct of the
elections. Overall, the elections marked tangible progress with respect to
previous practice, therefore meeting the key priority on the conduct of
elections. Further enhancing the independence of the election administration at
all levels and implementing the OSCE/ODIHR recommendations following the
elections are important for continued improvement in future elections.

Parliament

During the autumn 2012 parliamentary
session, a substantial number of parliamentary acts were adopted with
cross-party support. At the end of May, after a prolonged period of cross-party
controversy, parliament adopted key measures required for progress on EU
integration, namely the Law on the Civil Service, the Law on the High Court and
parliament’s rules of procedure. The new rules of procedure will contribute
considerably to improving the proper functioning of the parliament,
consolidating the progress made last year in addressing the relevant key
priority.

In December, the former head of the High
Inspectorate for Declaration and Audit of Assets was voted into office as the
new General Prosecutor with the votes of the ruling majority. The opposition,
while not passing judgment on the merits of the candidate, did not vote, asserting
that the termination of the previous incumbent’s mandate in November had been
unconstitutional. The former General Prosecutor, who was dismissed in 2012, has
still not been restored to her former position as a judge.

The transparency of the legislative process
was increased. Minutes of committee meetings and plenary sessions are
systematically published on parliament’s website. The involvement of civil
society and interest groups in the legislative process has improved. A growing
number of interest groups have been asked for opinions on draft legislation.
Deadlines for providing comments generally remain too short and there are no
clear rules on public consultation. A more transparent and inclusive
consultation process, further involving civil society and social partners,
would increase public trust in legislative drafting. Draft laws have not always
been published on parliament’s website, and many of them have been put on the
agenda at short notice without sufficient public consultation or proper time for
scrutiny by members of parliament (MPs). Outreach by MPs to their
constituencies remains an area for improvement.

Parliament’s oversight role continued to be
limited. In particular, it has not properly followed up with the executive all
the findings of the reports of independent institutions such as the Ombudsman
and the State Audit Office. Parliament’s interaction with the various
independent institutions needs to be further strengthened.

The Parliamentary Committee on European
Integration has closely monitored the revised action plan addressing the key
priorities of the Commission’s Opinion. It also exercised its oversight role
through hearings with the Minister of European Integration, the Minister of
Foreign Affairs and the Minister of the Interior. European integration remained
a focus of parliament’s work.

The new Prime Minister has committed to
involving the opposition closely in the process of European integration.
Consolidating the political dialogue between the ruling majority and the
opposition is needed to further strengthen parliament’s democratic functioning.

Overall, the functioning of parliament improved. Transparency of the
legislative process and involvement of civil society and interest groups
increased. Albania needs to focus its efforts on a more inclusive consultation
process and on strengthening parliament’s oversight role. It is important that
cooperation between the government and the opposition functions well to provide
a solid basis for further reforms.

Government

The government continued to reiterate its
commitment to EU integration. The implementation of the revised action plan to
address the Opinion’s key priorities continued, albeit at a slow pace. The adoption of important strategic documents such as the national
strategy for development and integration for 2014-20 and the updated national
plan for implementation of the Stabilisation and Association Agreement was
postponed.

The Ministry of European Integration (MEI)
has consolidated its role as key coordinator for EU affairs; e.g. line
ministries have been tasked with institutional responsibilities for alignment
with and implementation of the EU acquis. To manage the challenges of
upcoming EU-related reforms, the ministry’s institutional capacity needs to be
strengthened. The functioning of the 35 interinstitutional working groups has
not improved and they largely remain ad hoc fora.

Cooperation between the MEI and line
ministries needs to be further improved, and the ministry’s coordinating role
systematically respected.

A government reshuffle
took place in April, after the Socialist Movement for Integration (SMI), the
Democratic Party’s junior coalition partner, withdrew from the ruling coalition
and formed an electoral coalition (‘Alliance for European Integration‘) with
the Socialist Party (SP). Following the general elections, a new coalition
government led by the SP and with the participation of the SMI was appointed
within the first week of the new legislature in early September. The transition
to the incoming government was smooth. European integration is a key priority
of the new government’s programme.

Regarding local
self-government, territorial administrative reform and decentralisation
have only marginally evolved. The Law on Urban Planning was adopted in April
with the aim of clarifying planning instruments, competences and relevant
procedures. Implementation of the Law on Territorial Planning is slow. Local
government units, especially those with low budgets and few human resources,
have difficulties in implementing relevant legislation and development
programmes.

Local government
revenues have fallen by 21%. Local government’s human resources management and
financial control remain weak. The lack of strategically oriented and
transparency-based central funding remains a challenge, as does the high
percentage of temporary contracts in local government administration. The
Council of Ministers’ decision on the structure and organisation of public
bodies has not been implemented at local level. The highly politicised debate
on the composition of some regional and municipal authorities has hindered
their effectiveness and limited the role of local authorities’ associations in
strengthening coordination between local and central government. Local
authorities need to develop an inclusive strategic dialogue with civil society.

Overall, the government continued its EU integration and political reform
efforts, in the run-up to the elections, in the post-election period and after
the new government took office. The implementation of the revised action plan
to address the Opinion’s key priorities continued, albeit at a slow pace. The
new government will need to focus immediately on strengthening strategic
planning and budgeting and on improving coordination at central level and/with
local level. Regarding EU-related reforms, monitoring of implementation,
follow-up, and corrective action need to be intensified.

Regarding local
government, local democracy and fiscal decentralisation need to be promoted.
Even greater efforts are needed to enforce effectiveness, transparency,
inclusiveness and strategic planning, fighting politicisation and corruption.
Closer coordination between central and local government is needed, including
strengthening the role of local government associations.

Public
administration

Public administration reform is another key
priority of the Opinion. The adoption in May of the Civil Service Law, one of
the measures required for obtaining candidate status, was a major step towards
de-politicising public administration. The law, entering into force in October,
is essential for building a professional, effective and merit-based public
administration. It aims to create a consistent legal framework comprising state
administration, independent institutions and local government units. It
provides a clear classification of civil servants, formally establishes a
top-level management civil servants corps and provides the basis for a
transparent recruitment and promotion system. The law abrogates existing
legislation without providing the necessary transitory provisions until its
implementing legislation enters into force; the government approved in
September 2013 technical amendments to avoid this legal vacuum. Timely adoption
of the secondary legislation compliant with the principles of the law and
proper implementation is essential. The Law on General Administrative
Procedures is still pending.

Implementation of the Law on Administrative
Courts was delayed pending the entry into force of the Law on the High Court,
one of the three laws needed to obtain candidate status. The implementation of
the Law on the Organisation and Functioning of the Public Administration needs
to be enforced. Implementation of the Law on Inspections progressed with the
adoption, in February, of provisions aimed at reducing the length and cost of
inspections. Further secondary legislation on the organisation, structure, and
code of ethics of the staff of the General Inspectorate has been adopted. The
number of inspectorates was reduced from 36 to 11.

The Council of Ministers’ decision on the
structure and organisation of public institutions has been implemented at
central level. With a view to meeting the 2.5% target set in 2010, the
proportion of temporary contracts in state bodies was further reduced to
currently 4.8%. The Department of Public Administration is unable to fully
enforce its decisions or to effectively coordinate with other institutions,
partly because of budgetary constraints. The Human Resources Management
Information System is not fully operational; its second pilot phase has faced
considerable delays.

The Training Institute for Public
Administration carried out its annual training plan despite financial
constraints. A decision to set up a school of public administration was adopted
in February. Further efforts are needed for the school to work properly,
including providing the necessary funding.

The rate of
implementation of Civil Service Commission decisions remains low. Under the new
Civil Service Law, the Commission will be replaced by a Civil Service
Commissioner, who will keep its monitoring tasks. The new institution needs to
function properly and to demonstrate its independence.

The Supreme State Audit Institution
improved its performance by adopting a new manual on auditing and performing
more audit assignments. It submitted an annual report on its work to parliament
in March. It conducted 177 audits and reported economic damage caused by
improper functioning of state institutions of €97.3 million from €50 million in
2011. It submitted 40 requests for criminal investigations (involving 125
employees) to the prosecution office, twice as many as during the three
previous years together, highlighting in particular the abuse of public
property by high ranking public administrators. More than two thirds of
recommendations by the Institution were implemented. Amendments to the State
Audit Institution Law are pending and sustainable performance auditing has yet
to be introduced.

Weak analytical capacity and high staff
turnover in line ministries, together with insufficient transparency and
consultation with relevant stakeholders, continue to hamper the legislative
drafting process. Regulatory impact assessment and the implementation and
monitoring of adopted legislation need to be improved.

Overall, progress has been made in public administration reform and a major
step taken on this key priority with the adoption of the Civil Service Law. It
now needs urgent implementation to enforce merit-based practice. Enforcement of
existing legislation and administrative acts needs to be stepped up. The
Department of Public Administration needs to be strengthened. Independent
institutions need to be enhanced and their recommendations acted upon. Further
efforts are needed to depoliticise the public administration, ensure
continuity, fight corruption, strengthen meritocracy in appointments,
promotions and dismissals, and increase its efficiency and financial
sustainability.

Ombudsman

The Ombudsman has taken a number of very
positive initiatives. He has actively promoted human rights, in particular
those of the most vulnerable groups, and cooperated intensively with civil
society. He submitted an annual report to parliament on the situation of
specific vulnerable groups in society and made recommendations to tackle their
exclusion. The follow-up to recommendations by the Ombudsman improved. For
instance, the majority of recommendations on ill-treatment in detention
centres— an issue covered by the key priorities —was addressed by prisons and
by the State Police. The Ombudsman’s special reports to parliament were not
included in parliament’s agenda, so they cannot be published and are not
officially acknowledged. The Ombudsman was not properly informed and consulted
by the government on draft legislation and reforms. The budget allocated to the
Ombudsman’s office remains insufficient and the institution needs further
financial and political support from both parliament and the government to
continue to carry out its duties.

Civil
society

Civil society
organisations remain fragmented and overly dependent on funding by foreign
donors. The tax framework for civil society organisations still includes
provisions that undermine their financial viability, particularly on VAT
reimbursement. The Law on Non-Profit Organisations has been amended to require
such organisations to report all their financial sources to the tax
administration in order to prevent money laundering and the financing of
terrorism.

Cooperation
between state institutions and civil society remains
weak, particularly at municipal level. One of the key
challenges for the Albanian authorities is to make consultation of civil
society more systematic, transparent and timely. This applies to policy
development, draft legislation and implementation. The
capacity of these organisations to participate in
public decision-making needs to be strengthened, particularly in rural areas.
Local government lacks adequate capacity to ensure proper cooperation and
funding of civil society. Further substantial efforts are required to develop
community-based services.

The Agency for
Support to Civil Society completed its fourth call for proposals in April and
awarded grants.

Judicial
system

The 2011-13 judicial reform strategy, a key
priority of the Opinion, is being implemented. The Law on the High Court, one
of the key measures in this area, and amendments to the Criminal Code, the
Civil Code and the Code of Civil Procedure were adopted. The Law on Judicial
Administration was adopted to provide a legal framework for the work of courts
and court staff; the independence of court chancellors is an issue of concern.
The Law on the National Judicial Conference and the Law on the Profession of
Lawyer have started to be implemented. The memorandum of understanding on
inspections between the Ministry of Justice and the High Council of Justice,
which seeks to reduce the risk of overlapping responsibilities, continued to be
implemented. Constitutional amendments and legislation essential to ensuring
the independence, transparency and efficiency of the judiciary have yet to be
adopted or finalised. The appointment procedure of members of the High Court
needs to be changed. Efficient court organisation, clear and effective budget
allocation, streamlined, expeditious and transparent court proceedings, and a
system of appointment of judges based on a sound evaluation of candidates’
performance need to be secured. Lifting judges’ immunity as part of the fight
against corruption has not yet led to any specific cases under the new
constitutional provisions.

For a detailed
analysis of the developments in the judicial system, see Chapter 23 —
Judiciary and fundamental rights.

Anti-corruption
Policy

There were
improvements in the fight against corruption, a key priority of the Opinion.
All recommendations of the third GRECO evaluation round were completed in a
satisfactory manner. This concerned notably political party financing. Initial
track records cover a variety of sectors and levels, including high-level
corruption, and show an increase in convictions. Some measures taken in key
sectors testify to increased awareness of corruption, an improved overall
set-up and a more streamlined cooperation between law enforcement bodies.
Provision of public services online and awareness-raising measures in various
sectors have created conditions for more transparency and accountability of
public administration. Corruption remains a particularly serious problem and is
prevalent in many areas, including law enforcement institutions. There are
still serious gaps, e.g. in monitoring local government corruption. An
assessment needs to be undertaken, also regarding the role and operation of the
relevant institutions and their coordination, to further strengthen the overall
anti-corruption set-up. An anti-corruption coordinator with a strong mandate
should be appointed to do this. There is also a need to improve cooperation
with independent control bodies such as the State Audit Institution. Following
the constitutional amendments limiting the immunity of judges and high
officials measures are needed to clarify investigative procedures. The
short-term challenge is to step up proactive investigations based on systematic
risk assessment, as a prerequisite to building up a track record of effective
prosecution at all levels, particularly in those areas where there is a strong
public perception of corruption.

For a detailed
analysis of the developments in the area of anti-corruption policy, see
Chapter 23 — Judiciary and fundamental rights.

Fight against organised crime

Progress was
made in the fight against organised crime, a key priority of the Opinion. A new
strategy and action plan on organised crime were adopted. International police
cooperation has been strengthened. The numbers of asset investigations,
seizures and cases sent to courts have increased. Risk analysis and the use of
criminal intelligence have been enhanced, partly through international
cooperation. Seizures of drugs have increased. The operational set-up for
witness protection has been considerably enhanced. Moneyval recommendations
regarding the fight against money laundering have been adequately addressed.
Criminal Code amendments addressed the issue of internal trafficking in human
beings, and criminalised the use of victims’ services. Cooperation between
prosecution officials, police and the judiciary on trafficking has been stepped
up. A police unit to fight cybercrime has been set up. Joint training was held
for police officers and prosecution officials on issues including asset
seizures and cybercrime. Organised crime remains a serious concern and further
significant efforts will be needed to improve Albania’s track record.
Amendments to the Criminal Procedure Code are pending. The number of
confiscations of criminal assets and convictions for money laundering remains
low. Proactive investigations into wealth acquired through criminal activity
abroad but reinvested in Albania need to be substantially stepped up. Albania
remains a source country for trafficking in adults and minors, including forced
begging by children. The issue requires better coordination between law
enforcement agencies and social services. Cultivation and trafficking of
cannabis remains a serious threat.

For a detailed
analysis of the developments in the fight against organised crime, see
Chapter 24 — Justice, freedom and security.

2.2. 
Human rights and the protection of minorities

Albania has
taken some concrete steps to reinforce protection of human rights, and to
effectively implement anti-discrimination policies — both areas are among the
key priorities. It presents a mixed picture regarding human rights and the
protection of minorities. Freedom of assembly and association, and freedom of
thought, conscience and religion has generally been respected.

Regarding
freedom of expression, progress has been made. The Law on Audiovisual Media was
adopted in March, substantially improving the legislative framework for
audiovisual media in Albania. The law fails, though, to provide a selection
procedure for the governing bodies of the regulator and the public broadcaster
that guarantees their independence. Further steps are needed to fully
decriminalise defamation. Interference in the media by political and economic
interests needs to be limited.

In the area of
anti-discrimination policies, some legislation is in place — e.g. regarding the
rights of lesbian, gay, bisexual, transgender and intersex (LGBTI) persons —
and some is lacking, e.g. regarding the Roma community. The Albanian
authorities need both to apply the existing legislation and to draft new
legislation in the area of anti-discrimination. A number of concrete steps have
been taken. An LGBTI action plan has been put in place, and the Criminal Code
has been amended to take aggravating circumstances into account for offences
relating to gender, race, ethnicity, gender identity, sexual orientation,
political beliefs, religion, health status, genetic predisposition or
disability.

In line with
the national action plan on the Roma Decade, Albania needs to swiftly improve
the living conditions of the Roma; coordination between central and local
government is essential in this context. Another key area to focus on
immediately is access to education and the inclusion of Roma children in the
educational system — from pre-school level to higher education.

Public
awareness of the Law on Protection from Discrimination and of the complaint
mechanism remains low. The implementation of the law needs to be enhanced;
victims of discrimination need to be encouraged to file complaints in order to
establish solid case law. The roles of the offices of the Ombudsman and of the
Anti-Discrimination Commissioner need to be clarified to render them more
effective.

The legal
framework for economic and social rights has been improved, but implementation
is slow, particularly regarding people with disabilities and children at risk
of abuse. Major and systematic efforts are needed to address persisting
problems in the area of property rights. Property restitution, compensation and
illegal construction are issues that need to be tackled. Albania needs to adopt
and communicate a credible plan for the enforcement of European Court of Human
Rights judgments on property rights. Labour and trade union rights have
generally been respected.

For a detailed
analysis of the developments in the area of human rights and the protection of
minorities, see Chapter 23 — Judiciary and fundamental rights. For
developments in the areas of trade union rights, anti-discrimination and equal
opportunities, see also Chapter 19 — Social policy and employment.

2.3. 
Regional issues and international obligations

Albania still maintains a 2003 bilateral
immunity agreement with the United States, granting exemptions from the
jurisdiction of the International Criminal Court. This does not comply
with the EU Common Position on the integrity of the Rome Statute or with the
related EU guiding principles on bilateral immunity agreements. The country
needs to align with the EU position.

Regional cooperation and good
neighbourly relations continue to be a major plank
of Albania’s regional policy. Albania continued to play
an active part in regional initiatives, including the South-East European
Cooperation Process, the Regional Cooperation Council, the Central European
Initiative, the Adriatic and Ionian Initiative (AII), the Migration, Asylum and
Refugees Regional Initiative, the Energy Community Treaty and the European
Common Aviation Area Agreement. In 2012 Albania held the rotating presidency of
the Central European Free Trade Agreement (CEFTA) and co-chaired activities in
the framework of the South-East Europe Investment Committee. Since June Albania
holds the one-year chairmanship of the AII.

Albania has continued overall to act as a
constructive partner in the region, further developing bilateral relations
with other enlargement countries and neighbouring EU Member States. A short-lived rise in
nationalist rhetoric in late 2012 and early 2013 triggered concerns among
neighbours and other partners but subsided thereafter. Albania, Bosnia and Herzegovina, Montenegro and
Croatia signed a memorandum of understanding on support and cooperation on both
the Trans-Adriatic Pipeline and Ionian-Adriatic Pipeline projects. A
bilateral convention on regional cooperation under Article 13 of the SAA has
not yet been concluded with neither Montenegro nor Serbia.

A Protocol on cooperation between the
Ministries of Justice of Albania and Bosnia and Herzegovina was signed,
enabling better exchange of information relating to legal issues and
enforcement of legal reforms.

A bilateral
agreement with the former Yugoslav Republic of Macedonia on mutual recognition of driving licences was signed
and a new joint border crossing point was
opened.

Agreements were signed in various fields
with Montenegro,
including mutual protection of classified information, education and electronic
exchange of customs data. In December, parliament ratified an agreement between
Albania and Montenegro on developing the cross-border railway.

The foreign minister of Serbia
visited Tirana in October 2012 for the first such visit in eight years. Bilateral relations were strained at times, with each
side blaming the other for declarations or actions which raised tensions.

Albania continued to have very good
relations with Kosovo, with which it signed agreements on exchange and protection of classified information, on judicial
assistance in penal cases, on extradition, on transferring sentenced persons
and on cooperation of taxation and fighting tax evasion.

Albania continues to have good relations
with Turkey.

In February,
Albania, Italy and Greece signed an inter-governmental agreement
confirming their support for the Trans-Adriatic Pipeline project.

Overall, Albania continued to play a constructive role in contributing to
the stability of the region. Albania continued to implement the Stabilisation
and Association Process conditions in this regard.

3. 
Economic criteria

In examining
economic developments in Albania, the Commission’s approach was guided by the
conclusions of the European Council in Copenhagen in June 1993, which stated
that membership of the Union requires the existence of a functioning market
economy and the capacity to cope with competitive pressure and market forces
within the Union.

3.1. 
The existence of a functioning market economy

Economic policy essentials

The main political parties agree on the key
essentials of a market economy, despite a tense political environment.
Macroeconomic stability was broadly preserved, but vulnerabilities remain. The
budget deficit exceeded the target in 2012. This led to the statutory debt
ceiling of 60% of GDP enshrined in the budget law being breached and abolished.
The privatisation process suffered certain setbacks. Albania submitted its
seventh Economic and Fiscal Programme, for 2013-15, in January. The programme’s
medium-term macroeconomic scenario is optimistic. Its coverage of risks to the
macroeconomic and budgetary outlook is insufficient, and the approach to
addressing structural obstacles to growth lacks a clear strategy and targeted
policy measures. Overall, the consensus on the main fundamentals of a
market-oriented economy has been maintained.

Macroeconomic
stability

According to
preliminary data, economic growth slowed to 1.6% in 2012 from 3.1% a year
earlier. Financial constraints, low confidence among consumers and investors
and the presence of spare production capacity held back private consumption and
investment spending. Total gross fixed capital formation decreased by around 5%
in 2012 compared with the previous year. Migrant workers’ remittances increased
slightly, by some 1.6% in 2012, but dropped by 33% on an annual basis in the
first six months of 2013. Private consumption remained at low levels. Net
exports were the main contributor to economic growth, with foreign sales
holding up while imports declined. After falling in four consecutive quarters,
economic sentiment indicators started to climb in late 2012 and early 2013, but
real GDP only grew by 1.7% in the first quarter of 2013 in annual terms,
reflecting still sluggish domestic spending. Foreign demand continued to
contribute positively to growth. Per capita GDP in purchasing power standards
was estimated at 30% of the EU-27 average in 2012, unchanged from 2011. Overall,
while growth remained positive, Albania experienced a slowdown in 2012 due to
weak private domestic spending, which also extended to the first quarter of
2013.

External
imbalances improved, as exports proved resilient while weak domestic demand
depressed imports. The current account deficit narrowed to 10.5% of GDP in 2012
from 13% a year earlier on the back of a contracting (but still large) trade
deficit. Imports fell by 5.2% compared with the previous year. Exports grew by
a marginal 0.9%, as an 8.5% increase in merchandise exports was largely offset
by a fall in services export. The effect of the improved trade performance
outweighed negative changes in the income and current transfer balances. The
trend towards a narrowing trade deficit continued in the first seven months of
2013 when merchandise exports, driven by a buoyant energy sector, expanded by
18.4% in annual terms, while imports of goods declined by 5%. The current
account deficit stood at 10.1% of GDP in the four quarters to June.

Net foreign
direct investment (FDI) inflows remained at the same level in 2012 as in 2011
and financed some 70% of the current account deficit, up from 60% in 2011.
Total capital account inflows fell by 11.3% on an annual basis in 2012, but the
overall balance of payments was positive and the stock of international
reserves increased by 4.2%, covering about 4.5 months of imports. In the first
half of 2013, FDI inflows increased by 12.3% in annual terms. Overall,
the current account deficit has been narrowing but remains a source of
vulnerability, especially in view of the potential adverse impact of the
volatile external environment on inflows of FDI and migrant workers’
remittances.

Labour market
conditions improved somewhat during 2012, but the registered unemployment rate
remained high at 13% on average, down slightly from 13.4% in 2011. Employment
grew by 2.8% both due to more private-sector, non-agricultural jobs and a
higher estimated number of employees in the agricultural sector. In the first
half of 2013, unemployment remained stable at 12.8%. Long-term unemployment
accounts for around two thirds of total jobseekers, reflecting its structural
nature. Labour market statistics continue to be weak and are distorted by a
large informal sector. Overall, there was a slight improvement in the
labour market but the informal sector remains large and unemployment is
persistently high.

Macroeconomic
stability continued to be enhanced by a sound monetary policy, which was
successful in keeping inflation low and anchoring inflation expectations. The
average inflation rate decelerated from 3.5% in 2011 to 2% in 2012, which
corresponds to the lower end of the Bank of Albania’s (BoA) target range of 2-4%.
Low inflation reflected the negative output gap, well-anchored inflation
expectations and the absence of supply-side shocks. Driven mostly by
fluctuating food prices, annual inflation decelerated from 2.5% in the first
quarter of 2013 to 2.2% in the second quarter. In the absence of inflationary
pressures and in an effort to stimulate growth, the BoA undertook several cuts
in the key interest rate, bringing it to a historic low of first 3.75% in
January and subsequently to 3.5% in July. The rate cut was swiftly reflected in
interbank rates, the primary market for government security and also in deposit
rates. However, the pass-through to lending rates remains limited due to
increased risk premia amid a growing share of non-performing loans.

The degree of
euroisation of the financial system has slightly decreased but remains high.
Foreign, mostly euro-denominated loans stood at 61% of
total credit outstanding in July, down from 64% a year earlier, while the share
of foreign currency-denominated deposits in the total deposit stock fell from
49% to 47% in the same period. Such high euroisation
inhibits monetary policy’s effectiveness and could expose banks to currency
mismatches or indirect credit risks; it is therefore a potential source of
instability in the financial system.

Albania
maintains a floating foreign exchange regime, unchanged since 1992. The
Albanian lek continued to remain stable in 2012, marking a slight appreciation
by 0.9% against the euro. In the second quarter of 2013, the Albanian currency
depreciated slightly against the euro by around 1% year-on-year. Overall,
monetary policy remained sound, inflation decelerated and exchange rate
stability was broadly preserved.

The government deficit reached 3.4% of GDP
in 2012, exceeding the 3% target in the initial budget but remaining slightly
lower than the 2011 deficit of 3.5%. Disappointing revenue performance meant
that new budgetary targets had to be set by the November Normative Act.
Overall, revenues underperformed by some 7% in 2012 compared with the initial
budget, as the largest items, VAT and excise tax revenues, fell significantly
short of the initial targets, reflecting sluggish domestic demand. Revenue
slippages were only partly offset on the expenditure side, where the largest
cuts affected capital spending, down by some 12% compared to the initial target
and by the same order of magnitude compared with 2011. In the wake of weak
revenue collection, the total-revenue-to-GDP ratio fell to 24.5% from 25.1% in
2011, while the total-expenditure-to-GDP ratio fell to 28.0% in 2012 from 28.6%
a year earlier. Public capital expenditure accounted for just 4.6% of GDP
compared to 5.4% in 2011.

The fiscal stance in 2013 is more
expansionary. The 2013 budget envisaged a deficit of 3.5% of GDP, based on an
optimistic assumed economic growth of 3.1%. The fiscal deficit (without the
receipt from the privatisation of three hydro-power plants) in the first seven
months was almost 130% higher than in the same period of the previous year,
reaching some 98% of its full year target. In the period January to July,
revenue from indirect taxes declined significantly, reflecting still fragile
domestic demand, lower imports and the effect of recent VAT exemptions.
Expenditure was 10.4% higher than in the same period the year before, mainly
due to the rapid increase in capital expenditure. Overall, budgetary
planning continues to be weak, reflecting optimistic revenue projections and
leading to the need for rebalancing.

Public debt increased from 59.4% of GDP in
2011 to 62.9% by the end of 2012, exceeding the statutory ceiling of 60%, which
was abolished in December. Some three fifths of the public debt is domestic but
it continues to show a short-term bias (around half of it has a maturity of one
year or less) which requires frequent re-financing. Households’ share of
purchases of public debt securities continued to increase, but the bulk of the
domestic debt is still held by banks, which could pose a challenge if they
decide to reduce their government debt holdings and also exposes banks to
sovereign risk. Although the weighted average yield on domestic debt has been
gradually decreasing, at such a high level, public debt remains a source of
macro-financial vulnerability. The estimated large amount of public sector
arrears continue to represent additional government liabilities, leading to
financial difficulties along the credit chain and contributing to the high
level of non-performing loans. Overall, the relatively high and increasing government debt and its
short-term bias are a cause for concern, as they represent a source of
macro-financial vulnerability, especially following the abolition of the
statutory debt ceiling. The accumulation of public arrears reflects serious
weaknesses in public finance management.

In the area of
tax administration, there were improvements in the electronic tax payment and
tax filing system, but the effects on tax collection remain to be seen. Measures
have also been adopted to exempt imports of machinery, equipment and raw
materials used for certain investments from VAT, and to introduce a non-taxable
income limit for personal income tax. Delays in the VAT refund procedure
continue to put an additional burden on businesses (see also Chapter 16 -
Taxation).

Overall,
macroeconomic stability has been maintained. Low inflation and anchored
inflation expectations created room for monetary policy easing, but the
pass-through to the economy remains limited. The fiscal
stance in 2013 is expansionary, contributing to a further increase in the
relatively high level of public debt, which remains a
source of macro-financial vulnerability. Fiscal
planning and predictability remain a concern, especially following the
abolition of the debt anchor. Unemployment remains high. External imbalances
have narrowed but are still high, reflecting persisting structural weaknesses.

Interplay
of market forces

The private sector remains dominant and
continues to account for about 80% of GDP. The privatisation process suffered
setbacks with the unsuccessful sale of Albpetrol, a state-owned oil company,
and of the remaining public stake in Albtelecom, a partly privatised
telecommunication firm. No progress was made on the privatisation of INSIG, the
state insurance company. The previously privatised power distributor CEZ
Shpërndarje returned into state hands after the energy regulator revoked its
distribution licence and appointed an administrator, on the grounds that the
Czech-owned company had failed to meet contractual obligations. The dispute
will be settled by international arbitration.

There has been some progress as regards
attracting greenfield investment in the energy sector with 11 new agreements
signed in 2012 to construct and operate hydropower plants (HPPs). The output of
privately-owned small HPPs surged by 76% year-on-year in 2012, raising their
share of total electricity generation to 5.6% in 2012, from 3.4% a year
earlier. In February the privatisation of three small HPPs was completed, for a
total of €109.5 million. Overall, state involvement in the economy
remains limited and is mainly concentrated in water supply, transport and
energy.

Market
entry and exit

Business registration and licensing
continued to perform well through the established network of one-stop shops.
Some improvement was made to the business registration system by making the
notarisation of incorporation documents optional. In 2012 the number of new
businesses registered grew by 8% year-on-year; they make up 12% of all active
enterprises.

A registry of certified bankruptcy
administrators was set up and 23 bankruptcy administrators were licensed until
April. However, the time taken and procedures for market exit remain slow. In
2012 the number of requests for voluntary business closures went up by 14% from
a year earlier. Overall, Albania has made incremental improvements to
its well-functioning procedures for starting a business. Market exit procedures
remain slow.

Legal
system

In the area of property rights implementing
legislation on registration of immovable property has been adopted. However,
first registration of properties is yet to be completed. Further efforts are
also needed in the area of property restitution and compensation and in the
legalisation of buildings that did not have permission. Amendments to the Civil
Procedure Code were adopted in April to allow easier recovery of collateral.
Cases of collateral recovery rose significantly in 2012, along with the number
of private bailiff offices. However, the full impact of the new legal measures
has yet to be assessed. Overall, there has been some progress in the
legal system but proper implementation needs to be ensured. Uncertainties over
property ownership, delays in court procedures and weaknesses in the rule of
law continue to be detrimental to the business environment.

Financial
sector development

The banking sector continued to dominate
the financial system, accounting for 93.6% of all financial system assets and
87.9% of GDP — 3 percentage points higher than in 2011. It is dominated by
foreign capital and remains highly concentrated, with the five largest banks
holding about 68% of the total credit portfolio and 74% of total deposits. Total
credit to the economy amounted to around 41% of GDP, suggesting that there is
significant scope for deeper financial intermediation. Credit growth fell to
7.4% in 2012 from 11.7% in 2011, and has recently fallen faster, with annual
credit growth at 1.6% in the first quarter of 2013 and just 0.7% in the second
quarter.

Weak lending, affecting both households and
investors, reflects tighter credit standards applied by banks amid a high and
rising share of non-performing loans and subdued credit demand due to economic
uncertainties. In an effort to reinvigorate lending, the BoA adopted specific
regulatory changes in March aiming at releasing financial resources for banks
and channelling them towards lending to the private sector, but so far credit
growth has not picked up.

In general, the
Albanian banking system remained well capitalised and liquid. The net results
of the banking system in 2012 amounted to €26.71 million, reflecting a
significant increase compared with the previous year. The capital adequacy
ratio increased to 16.7% in May from 15.6% at the end of 2011, with each
individual bank remaining above the 12% regulatory minimum. The ratio of liquidity
assets to short-term liabilities as of the end of December 2012 increased to
36.7%, comfortably exceeding the minimum regulatory requirement of 25%.
Deposits were the main source of financing and parent-bank credit lines were
significantly lower than at the end of 2011, strengthening the banking system’s
resilience to foreign shocks. However, banks’ exposure to credit risk has
increased, as the ratio of non-performing loans rose further to 24.4% in the
second quarter of 2013 compared to 21.2% a year earlier. This has led to a
surge in loan loss provisioning, up by 24.3% in June on an annual basis.

Total assets of
the non-banking financial sector stood at 2.8% of GDP. The insurance market, in
which foreign capital has a 50% stake, increased its gross written premium
revenues by some 9% in 2012 but its share of GDP remains low. The securities
market focused on government bonds and saw two new investment funds start up.
The voluntary pension market grew by 83% in 2012 from a very low base and is
still in the very early stages of development.

The BoA continued to strengthen the
regulatory and supervisory framework. It adopted regulations on the core
management principles of banks and foreign bank branches; on the licensing of
non-banking financial institutions; on risk-management of non-banking financial
institutions; and on e-payment instruments.

Overall, the
banking system remains well capitalised and liquid. However, non-performing
loans remain a cause for concern, while the sharp deceleration of credit growth
is detrimental to the economy.

3.2. 
The capacity to cope with competitive pressure
and market forces within the Union

Existence
of a functioning market economy

Macroeconomic stability was maintained. The
economic slowdown resulted in a shrinking current account deficit, but external
imbalances are still large, reflecting a narrow production base. Low inflation
reflects the lack of inflationary pressures and well anchored inflation
expectations. Fiscal policy remains constrained by the relatively large and growing
public debt, much of which is short-term and thus reinforces vulnerability.
Fiscal planning continues to be weak and its predictability has deteriorated
following the abolition of the debt anchor.

Structural bottlenecks are an obstacle to
growth. Despite some progress, weaknesses in property rights and law
enforcement continue to be detrimental to the business environment. The labour
market is characterised by persistently high unemployment. The privatisation
process is advanced but not yet complete. The diversification and
competitiveness of the economy are still low. Overall, although some progress was made on establishing a functioning
market economy, Albania needs to consolidate its public
finances and reduce the relatively high level of public debt, further bolster
governance, enhance labour market performance, provide protection for property
rights and strengthen the rule of law and the fight against corruption.

Human and
physical capital

Public expenditure on education is
estimated to have accounted for around 3.2% of GDP in 2012 and is expected to
be unchanged in the 2013 budget. New learning standards and syllabuses were
introduced in secondary education. Public spending on research and development
remained at low levels, at 0.03% of GDP in 2012 and 2013. The number of science
laboratories increased in 2012. The level of collaboration between industry and
universities remains weak.

Public capital expenditure bore the burden
of the budget rebalancing and shrank by 12.8% in 2012, accounting for just 4.6%
of GDP compared to 5.4% in 2011. It is projected to make up 5% of GDP in 2013.
The authorities identified education, healthcare, infrastructure, and
agriculture as priority areas, but spending plans project a decline in public
investment in these sectors in 2013. Road infrastructure remains the main
beneficiary of public investment. According to estimates, total investment
spending in the economy declined by around 5% in 2012 and decreased as a share
of GDP from about 32% in 2011 to 29.3%.

Albania remains highly dependent on
hydroelectric resources to ensure security of power supply. No progress was
made in increasing interconnection capacity with other countries. Preparations for the construction of the interconnection with Kosovo
were re-launched in January. Albania was able to export
electricity at the beginning of 2013 due to favourable weather conditions but
continues to be a net importer of electricity. The number of concessions signed
in the energy sector increased, while several irregularities in concession
procedures were identified by the Supreme State Audit Institution.

Overall,
there is significant scope for redirecting investment into growth-enhancing
areas such as telecommunications and human capital, and for better-focused
policies promoting innovation initiatives and cooperation between the education
sector and industry.

Sectoral
and enterprise structure

The Albanian economy continues to be
dominated by the services sector, which accounted for around 60% of gross value
added (GVA) in 2012, followed by agriculture, providing around a fifth of GVA,
and industry (11%), comprising both extractive industries and manufacturing.
Manufacturing relies to a large extent on the low value-added textile, garment
and leather industries. Following a deep contraction by about 13% in 2012, the
construction sector’s share of GVA fell to below 9%. Agriculture continues to provide a very large proportion of jobs
(around 50%), suggesting that there is still significant scope for productivity
gains from sectoral shifts in employment.

The sectoral composition of merchandise
exports remained highly concentrated in 2012, with 84% of total exports
accounted for by minerals, fuels and electricity (36%), textiles and footwear
(29%) and construction materials and metals (19%). The minerals, fuels and
electricity sector increased foreign sales by some 31% compared with 2011.

Small and medium-sized enterprises (SMEs)
play a very important role in the economy, providing 71% of official
employment, although weaknesses in their operational environment persist. In
the non-agricultural sector, SMEs account for 47% of exports and 68% of value
added.

Significant weaknesses continued to prevail
in the electricity sector in terms of a lack of financial viability, high
levels of losses in the electricity network and distribution, low bill
collection rates and tariffs below cost-recovery level. Dependence on
hydropower continues to pose a substantial risk to the country’s electricity
supply.

The sizeable informal sector remains a substantial
problem and is detrimental to the business environment. The number of fiscal
devices (cash registers) installed by businesses increased, but the system for
monitoring their use in practice needs to be strengthened. The number of
suspected corruption cases referred to the prosecutor’s office by customs and
tax investigation units increased. Overall, the structure of the economy
remained unchanged. Albania’s production base lacks diversification in terms of
both sectors and export markets, leaving the economy vulnerable to
industry-specific shocks. Malfunctioning persists in the electricity sector.
The size of the informal sector remains a challenge.

State
influence on competitiveness

The ratio of state aid to GDP increased to
1.6% in 2012 from 1.3% the year before, with less distortive horizontal (i.e.
non sector-specific) aid continuing to account for the bulk of state aid
granted. Similarly to the previous year, the government provided a loan
guarantee to the state-owned power generation company KESH to help it survive
financial difficulties in late 2012 and early 2013. The unresolved problems of
the electricity sector are an enduring drain on public resources.

Economic
integration with the EU

Albania’s openness to trade decreased
somewhat in 2012, as the sum of total imports and exports accounted for 87% of
GDP in 2012 as compared with 92% in 2011, mainly on account of declining
imports following the economic slowdown. The EU remains Albania’s main trading
partner. Exports of goods to the EU increased by 13.4% compared with 2011 and
accounted for some 75% of total merchandise exports, while imports of goods
from the EU fell by 5.1% and made up 62% of total imports. From January to
July, the trend towards a narrowing trade deficit with the EU continued as
exports of goods to the EU surged by 18.8% over the previous year, while in the
same period merchandise imports from the EU declined slightly. Italy remains
the single most important trading partner, drawing more than half of Albanian
merchandise exports and providing a third of its imports. The EU also remains
the main source of inward investment in Albania, although its share of total
FDI stock has declined in the last four years. The pace of the increase in
trade with CEFTA countries slowed, from some 27% in 2011 to around 3% in 2012,
reflecting the overall deceleration of economic activity in the region. CEFTA
countries accounted for some 13% of Albanian merchandise exports and 8% of its
imports.

The positive
trend in net exports was supported by recent changes in the real effective
exchange rate (REER), showing a moderate depreciation of the lek both in the
last quarter of 2012 (by 0.91%) and the first quarter of 2013 (by 0.55%). Overall, the EU remained Albania’s leading trade and investment partner. The pace of trade integration
with CEFTA countries slowed.

4. 
Ability to take on the obligations of membership

This section
examines Albania’s ability
to take on the obligations of membership — that is, the acquis as
expressed in the Treaties, the secondary legislation and the policies of the
Union. It also analyses Albania’s administrative capacity to implement the acquis. The
analysis is structured according to the list of 33 acquis chapters. In
each sector, the Commission’s
assessment covers progress achieved during the reporting period, and summarises
the country’s overall level of
preparations.

4.1. 
Chapter 1: Free movement of goods

In the area of horizontal
measures, Albania has a good level of preparation.

In the area of standardisation, adoption
of European standards (EN) continued and Albania adopted 1158 more ENs, mostly
by the ‘cover page’ method, without translation.

In March, the General
Directorate for Standardisation (GDS) became a full member of the European
Telecommunications Standards Institute (ETSI). A technical committee covering
analogue and digital telecommunication systems was set up, but ETSI standards
have not yet been adopted. The database of the GDS was improved with regard to
registration and updating published standards. There is no national strategy on
standardisation yet.

In the area of conformity assessment, technical regulations on essential requirements and conformity
assessment of medical devices were adopted.

A new organisational structure for the
General Directorate for Accreditation (GDA) was adopted in October 2012. The
number of accredited conformity assessment bodies increased to 24. Laboratories conducting tests of air, water and noise and
laboratories testing electric meters were accredited. The laboratory testing
fuel dispensers in the legal metrology field applied for accreditation. The GDA adopted a new policy document on traceability, with
guidelines for implementation, to meet the preconditions for full membership of
European Co-operation for Accreditation (EA). Albania is not yet a full member
of EA. The draft Law on Accreditation of Conformity
Assessment Bodies, aiming to bring the legislation into line with the acquis,
still awaits adoption.

The General
Directorate for Metrology (GDM) adopted a
communication strategy on metrology in September 2012. The GDM moved to new premises and its laboratories
acquired new equipment for pressure, humidity and volume. The GDM’s calibration
and measurement capabilities were accepted for mass measurements in the Key
Comparison Database of the International Bureau of Weights and Measures.
Albania aligned its legislation with the Non-Automatic Weighing Instruments
Directive. Alignment with the Measuring Instruments Directive is still
outstanding and approximation of the Law on Metrology
to the acquis is at an early stage.

Implementing
legislation for the law on inspectorates, including the market surveillance
inspectorate, was adopted. Standard operating procedures for market
surveillance were drafted to implement the law on general safety of non-food
products. The market surveillance inspectorate is not yet operational.

As regards ‘Old Approach’ product
legislation, in the area of chemical fertilisers legislation was adopted on
production requirements, labelling, packaging, procedures for entering the
market and criteria for setting up the reference laboratory for analysis.

In the area of ‘New and Global Approach’
product legislation, technical regulations on energy labelling for
household appliances and on toy safety were adopted to approximate the
legislation to the acquis. Regulations were adopted with regard to
enforcement of legislation in the field of medicaments for human use.

In the area of procedural measures,
legislation on the return of cultural objects still awaits adoption. There were
no developments on firearms.

Conclusion

There has been some progress in the area of free movement of goods,
particularly in standardisation. Effective market surveillance needs to be
introduced and further efforts are required overall to
bring Albania’s legislation into line with the acquis.
Overall, preparations are moderately advanced.

4.2. 
Chapter 2: Freedom of movement for workers

As regards access to the labour market, amendments to the
Law on Foreigners, aiming at facilitating EU citizens’ access to the Albanian
labour market and guaranteeing equal treatment, were adopted in March.

The creation of an e-portal including
databases of job-seekers and employers registered in the 12 regional and the 24
local employment offices is a progress with a view to future participation in
the EURES (European Employment Services) network.

As regards coordination of social
security systems, negotiations on bilateral agreements with Hungary, the Czech Republic, the former Yugoslav
Republic of Macedonia and Romania have continued.
Negotiations with Luxembourg have started.

Conclusion

There has been some progress in the area of
freedom of movement for workers, notably in improving EU citizens’ access to
the Albanian labour market. Overall, preparations in the area of freedom of
movement for workers are at an early stage.

4.3. 
Chapter 3: Right of establishment and freedom to
provide services

In the area of the right
of establishment, steps were taken with regard to preparations for
simplifying procedures and shortening the process for obtaining building
permits.

As regards the freedom to provide
cross-border services, an inter-ministerial working group was set up and a
roadmap for aligning legislation on cross-border services with the Services
Directive was adopted in April. As regards the Services Directive, human
resources of relevant institutions need to be strengthened.

In the field of postal services, the
postal strategy was adopted in July. Liberalisation of postal services advanced
with the reduction of the reserved postal area from 100gr to 50gr in August.
The finalisation of the draft Postal Law, determining tariffs and weights, as
well as the new organisational structure of the Electronic Postal
Communications Authority are still pending.

In the field of mutual recognition of
professional qualifications, implementing legislation was adopted to allow
exemptions from state examinations for the regulated professions for people who
have successfully passed the state exam in one of the EU Member States, the
EFTA countries, the United States of America or a number of other countries.
Further efforts are needed to fully align the legislation in the field of
regulated professions with the acquis.

Conclusion

There has been some progress in the area of
the right of establishment and freedom to provide services, particularly in
postal services. Further efforts are required to align the legislation in this
field with the relevant acquis. Overall, preparations are moderately
advanced.

4.4. 
Chapter 4: Free movement of capital

In the area of capital
movements and payments, restrictions on the acquisition of real
estate by foreigners have not been removed.

The Law on Payment Systems was
adopted in April with the aim of liberalising the market and providing
stability and efficiency. Some amendments to the Civil Code and the Civil
Procedure Code were also adopted to make repossession easier. The Law on
Securing Charges was amended in April. The volume and the value of transactions
processed through the Albanian Inter-Banking Payment System increased by 2.4%
and 65% respectively in 2012 with the same trend in the first quarter of 2013.
As regards the Albanian Electronic Clearing House, the volume of payments fell
by 7%, while the value of transactions increased by 5% in 2012 and the first
half of 2013. The main user of the clearing house remains the Ministry of
Finance.

As regards the fight against money
laundering, implementing legislation was adopted for the Law on
Prevention of Money Laundering and Terrorism Financing, which had been amended
earlier in 2012. Instructions on methods and procedures for reporting,
including reporting by non-financial professionals, were adopted. The General
Directorate for the Prevention of Money Laundering increased its capacity by
employing three additional experts, reaching a total number of 28 employees. It
continued to provide training for its staff and other institutions such as
banks, currency exchanges, notaries, construction companies, accounting
experts, lawyers and car dealers. The number of inspections carried out as of
the end of 2012 was 347 of which 18% were on-site inspections, mainly of
currency exchanges and construction sites. Twenty-two administrative measures
were imposed but only 30% of fines were collected, as the remaining decisions
were appealed against in court. A similar trend continued in the first half of
2013 with 139 inspections and 13 administrative measures of which 38% of fines
were collected. There were 556 reports of suspicious transactions in 2012, 44%
more than in 2011. Leasing companies and lawyers submitted reports of
suspicious transactions for the first time. Some 36% of cases reported were
passed on either to the prosecutor’s office or to the police. Most of the
reports came from banks or money transfer and exchange offices. The number of
reports from the Immovable Property Registration Office and the General Tax
Department increased significantly.

Conclusion

Some progress was made in the area of free
movement of capital, with the adoption of the law on payment systems and further
legislative and reporting measures taken to combat money laundering. Overall,
preparations are moderately advanced.

4.5. 
Chapter 5: Public procurement

As concerns general
principles, there have been improvements in the public procurement review
system and legislation in the field of concessions has been adopted.

In the field of
the award of public contracts, the Public Procurement Law was
amended in December with the aim of further aligning it with the acquis.
It includes provisions on the coordination of procedures for awarding public
works, supply and services contracts and now covers the utilities sector.
Implementing legislation adopted in the first half of 2013 covered public
procurement procedures, definitions of small purchases and anomalous bids, and
the procedures to be followed by contracting authorities. Fines and
administrative penalties for infringements have also been redefined with the
aim of giving the members of tender commissions more responsibility. The number
of unpublished, negotiated procedures increased slightly during 2012,
accounting for 26.4% of all procedures and 14% of the total value of tenders.
This trend continued during the first half of 2013. This increase was partly
due to delays in releasing procurement funds to the
contracting authorities, combined with tight deadlines and weak planning.

The adoption of
the new Law on Concessions and Public Private Partnerships in April, followed
by implementing legislation and a concessions strategy in June, was important.
Concessions for hydropower plants were excluded from the law for a transitional
period of four years.

The Public Procurement Agency took further
measures to ensure transparency of public procurement procedures. E-procurement
continued to work well. The e-procurement implementing legislation was amended
to extend its scope to contracts above €72 and to limit scope for
interpretation by the contracting authorities. The
number of disciplinary measures taken by the agency against contracting
authorities increased from 27 to 55 and the number of reprimands from 3 to 15
in 2012, as compared with 2011, while the number of fines fell from 40 to 29.
In the first half of 2013, 26 disciplinary measures and eight fines were
imposed. Half of these cases were enforced by the agency after relevant reports
by the Supreme State Audit Institution. The agency started to conduct more
comprehensive monitoring of procurement procedures. Public procurement and
concessions are still one of the main sectors in which the audit institution
has found financial violations. The audit institution reported in March 2013
that violations by both central and local authorities regarding public
procurement for the period 2008-2011 caused damage to the state of €3.1
million. The agency has continued to provide awareness-raising and training on
the amended Public Procurement Law. The agency’s staff increased from 20 to 23
and two new experts cover concessions. The capacity of the agency and
contracting authorities needs to be strengthened to ensure that recent
legislation is implemented effectively.

In the field of remedies, the amended
Public Procurement Law abolished the office of public procurement advocate,
leaving the Public Procurement Commission to deal with reviewing and handling
complaints from economic operators. This has helped to clarify institutional
responsibilities and is expected to streamline procedures. The commission’s
administrative capacity was increased from 18 to 20 employees. The commission
received 270 complaints and took 214 decisions. Its professional independence
needs to be guaranteed.

Conclusion

There has been good progress in further
aligning legislation on public procurement, concessions and public private
partnerships with the acquis. Review mechanisms have also been
streamlined. Further work is needed to improve the professionalism of
contracting authorities and to reduce financial violations in the sector.
Overall, preparations in the field of public procurement are moderately
advanced.

4.6. 
Chapter 6: Company law

In the area of company
law, the Law on Cross-border Mergers of Companies, aiming at
alignment with the acquis, was adopted in November. The National
Registration Centre has applied the law in connection with registering
privately held companies. Preparations for bringing Albanian legislation into
line with the acquis as regards reporting and documentation requirements
in the case of mergers and divisions are on track.

There was some progress as regards the
establishment of technical infrastructure for electronic signature. In January,
the National Agency for the Information Society was accredited by the National
Authority for Electronic Certification to provide the public administration
with certificates enabling it to process electronic documents as from
September. The first application, to be used by the General Directorate of
Customs, is being set up. Licensing of a second private e-certification service
provider is ongoing. The number of businesses that have been given
e-certification increased to about 500. The implementation of e-signature by
the state authorities has yet to be verified.

In the area of corporate accounting,
preparations for aligning legislation on accounting and national accounting
standards with the acquis have started. The National Accounting Council
increased efforts to strengthen its capacity by training its staff and working on
a series of internal guidelines. The membership of the Council’s board was
revised in May.

In the field of auditing, the Public
Oversight Body continued its monitoring activities and was involved in a direct
review of the quality of auditing of public interest entities. The roadmap for
the reform of accounting and auditing for the period 2013-2015 was approved in
August. The independence of the Public Oversight Body and its funding remain to
be addressed as part of the reform.

Conclusion

Some progress was made in the field of
company law through the adoption of legislation in the area of cross-border
mergers. Some progress was made in the areas of corporate accounting and
auditing, but legislation remains to be aligned with the acquis. The
Public Oversight Body needs to be strengthened. Overall, preparations
are moderately advanced.

4.7. 
Chapter 7: Intellectual property law

In the area of copyright
and neighbouring rights, the new law on copyright has not been
adopted yet. Some amendments to the current Copyright Law were adopted,
including an increase in the level of administrative fines for infringement of
copyright, and a definition of the legal status of collective management
agencies.

In the field of
industrial property rights, the Law on Industrial Property was
amended in February to provide for a Market Surveillance Inspectorate, which
has not yet been set up. Further amendments to the law are pending. In
April, Albania adopted the Law on Adherence to the London Agreement for the
Implementation of Article 65 of the Convention on European Patents. Albanian
legislation is not yet in line with the acquis on protecting
topographies of integrated circuits.

As regards enforcement, the
rate of collection of fines for copyright infringements remains very low. Royalties
have reportedly not been paid to several right holders. The Interinstitutional
Monitoring Group set up to implement the national strategy on intellectual and
industrial property rights has met only once. In March, the General Directorate
for Customs adopted its sectorial intellectual property rights strategy. It
approved more requests for action to protect trademarks against counterfeiting,
piracy and other infringements of intellectual property rights in 2012 than in
2011, and the number was higher again in 2013. However, fake products are still
present in the market (See Chapter 29 — Customs union). Businesses
complain of weak enforcement of legislation on intellectual property rights.
The Copyright Office recommended that the licences of two collective management
agencies be suspended for failing to comply with their obligations. The
government has not yet taken a decision. There were some improvements in
administrative capacity, mainly through staff training for the Copyright Office
and the General Directorate for Patents and Trademarks. Alleged management
problems at the Copyright Office led to key members of staff resigning or being
replaced. The General Directorate for Patents and Trademarks drafted a manual
on intellectual property infringement cases and upgraded its IT system.
Awareness-raising events and training sessions with right holders, judges, tax
and customs officials, academics, the police and prosecution officials were
held. There is still a low level of understanding and awareness on copyright
and related rights provisions and especially on collective management systems,
including among judges.

Conclusion

There was little progress in the field of
intellectual property law. Some steps were taken to further align the
legislation on industrial property rights with the acquis. The Law on
Copyright has to be adopted. Efforts are needed to effectively enforce
intellectual and industrial property rights and to set up the Market
Surveillance Inspectorate. Serious shortcomings in the payment of royalties to
right holders need to be overcome. Albania has not yet met its commitments
under the SAA. Overall, preparations are not very advanced.

4.8. 
Chapter 8: Competition policy

In the field of anti-trust and mergers, the Albanian
Competition Authority adopted five by-laws, aligning with the acquis. In September 2012, the authority reduced the filing fees by almost
half for small businesses with an annual turnover of between €1.4 million and €7.1
million.

The authority
adopted six decisions on prohibited agreements and two on abuse of dominant
position, and authorised 14 mergers and acquisitions. It received 19
complaints, five more than the same period last year, due to enforcement
activity and advocacy.

The authority
concluded investigations in the field of compulsory third-party motor insurance
and fined eight companies for fixing market prices. After conducting
investigations, the authority concluded that competition in maritime transport
at Vlora port, in sugar and rice imports and vegetable oil trade had not been
restricted. It also started in-depth investigations into potential abuse of a
dominant position in oils, cement, mobile telephony and
Tirana road transport services.

The authority increased the number of fines
from one in 2011 to seven in 2012 and the number of decisions issued from 43 in
2011 to 48 in 2012. As regards appeals cases, the authority won 15 out of 26
appeal cases brought before the First Instance Court and 11 of the 18 which
went to the Appeal Court in 2012. In the first half of 2013, the authority won
two and lost one case before the First Instance Court. Many court decisions are
pending, which has resulted in considerable delays in the collection of 73% of
the fines imposed. Further efforts are needed to
increase the judiciary’s knowledge of competition law.

The new
structure of the authority still needs to be approved by parliament. Its
administrative capacity was increased by employing two additional experts,
bringing the number of employees to 36 including 24 experts. Its officials have
received training in various fields of competition law.
Further efforts are needed to increase officials’ knowledge of econometric
analysis and use of ICT.

As regards state aid, €15.34 million
were granted in state aid in 2012, 30% more than in 2011. In September 2012 the
State Aid Commission authorised a ‘de minimis’ aid scheme for a three-year
period to create an innovation fund. The commission examined the normative act
of December 2011 on loan guarantee to the state-owned power company KESH and concluded
in September 2012 that the measure did not constitute state aid. The number of
notifications by the government remains very low, and there have been no
notifications by regional or local authorities. The 2012 State Aid Report was
adopted in July. The State Aid Sector in the Ministry of Economy still lacks
the necessary administrative capacity to enforce state aid rules.

Some progress was made on completing
secondary legislation for state aid control to bring it into line with the acquis.
No progress was made in confirming the operational independence of the State
Aid Commission and the Sector.

Conclusion

Limited progress has been made in the area
of competition. The Competition Authority improved its overall performance and
increased its administrative capacity. The independence and administrative
capacity of the State Aid Commission and Sector need to be enforced. Overall,
preparations for the revision of state aid legislation are at an early stage.

4.9. 
Chapter 9: Financial services

In the area of banks and financial
conglomerates, in November the Bank of Albania (BoA) adopted
a regulation on the management principles of banks and branches of foreign
banks and criteria for approving their administrators. New regulations were
adopted in January on electronic payment instruments and in July on capital
adequacy, on credit risk administration an on liquidity risk administration. In
March, the BoA adopted a new strategy for 2013-15 which included developing
banking supervision in accordance with Basel I, II and III principles and EU
Directives. The BoA’s Supervisory Department employed three additional experts
increasing its capacity. Four posts out of 50 remain vacant.

As regards the
non-banking area, in December the Albanian Financial Supervisory Authority (AFSA)
adopted implementing regulations on inspection procedures at financial
non-banking institutions, and on licensing and the conduct of their activities,
and on the organisation and functioning of a multilateral trading facility. The
non-banking institutions remain 21. The AFSA’s administrative capacity
increased slightly with the recruitment of two more staff reaching a total of
52. Its operational and financial independence needs to be guaranteed.

In the area of insurance and
occupational pensions, the Albanian Competition Authority issued a
regulation in March on the implementation of the Law on Competition Protection,
promoting individual price-setting with regard to insurance premiums.
Amendments to the Law on Compulsory Insurance in the Transport Sector were
adopted in July, while the Law on Insurance and Reinsurance Activity is still
pending. The insurance market remains small. Non-life insurance continued to
dominate the insurance market and the ratio of claims to premiums has decreased
to 34.6% in the first half of 2013, compared to 37% in the same period of 2012.
The majority of the claims were on motor insurance. The AFSA licensed several
agents in the non-life insurance market. Regulations on the technical provisions of compulsory insurance in the transport sector,
on calculating the net asset value of voluntary pension funds and on time
limits for disclosing information were adopted in September 2012. The AFSA also
took further steps to prohibit the free use of insurance company assets. The
compulsory motor insurance database centre is fully operational. An e-fine
system is available.

As regards financial market
infrastructure, the Law on Payment Systems was adopted in April and
a regulation on licensing and supervision of operators in the national card
payment scheme was adopted in June.

In the area of securities markets and
investment services, the AFSA took measures to strengthen supervision and
management of securities market and collective investment undertakings. The
number of licensed operators in the securities market rose to 10. In the area
of investment services, the AFSA issued a decision on setting up a compensation
fund for insurance companies in 2013. A new investment fund, representing a new
investment alternative in foreign currency, was licensed. The AFSA approved the
respective prospectus filed for issuing bonds offered through a private
placement.

Conclusion

There has been
some progress in financial services, in the field of banking. Additional
efforts are needed to align legislation with the acquis in the areas of
insurance and occupational pensions, financial market infrastructure and
securities market and investment services. Supervisory capacity needs to be
strengthened. Overall, preparations are moderately advanced.

4.10. 
Chapter 10: Information society and media

Alignment with the acquis in the
area of electronic communications and information and communications
technologies (ICT) has progressed; amendments to the Law on Electronic
Communications were adopted in October 2012. Competition has been enhanced by
reducing the fees paid by companies to operate in the market. The Agency for
Electronic and Postal Communications (AKEP) completed the third round of tariff
reductions for mobile networks. Further progress has been made with implementing
competitive safeguards: fixed number portability was introduced in September
2012 and the incumbent published its wholesale broadband access reference offer
in early 2013. A third UMTS/3G licence was granted at the end of 2012.

The draft law on rights of way remains to
be adopted. The emergency number 112 has not been implemented due to a lack of
funds for setting up an integrated model for the 112 number and public safety
answering points. AKEP’s administrative capacity and resources remain weak.

Mobile usage remains high with subscription
penetration at 119% in July, while mobile broadband is at an early stage of
development. Penetration of fixed telephone and broadband are among the lowest
in the region. The fixed broadband penetration per population reached 7.6%
according to the latest available data.

In the field of
information society services, the GovNet network infrastructure has been
extended and ‘public key’ infrastructure, providing trusted communication
between government systems and users, has been set up. Amendments were made to
the law on electronic commerce to further align it with the E-Commerce
Directive. Alignment with the acquis on conditional access has
progressed, with the adoption of the audiovisual media service law in March 2013.
A national plan on broadband was adopted in May. The National Agency for
the Information Society has improved its technical capacity by building a
public data centre and setting up a new e-government portal and an
interoperability platform to help provide e-government services for citizens
and business. Electronic identity management for businesses has not yet been
standardised but is different for each e-service (e.g. procurement, tax),
hampering the development of e-services.

In the field of audiovisual policy, a
law on Audiovisual Media Services, aimed at the alignment of the media
legal framework with the acquis, was adopted in March 2013. The
appointment procedure of the members of the media regulatory authority -
Audiovisual Media Authority (AMA), provided for by the law, does not fully
guarantee their independence. Implementation of the digital switchover strategy
has halted, due to a court case of broadcasting operators. Efforts should be
put into the timely implementation of the digital switchover strategy due to be
completed in June 2015. Further efforts are required to free illegally used
frequencies. AMA still lacks sufficient capacity and concerns remain over its
independence. The public service broadcaster’s editorial independence and fee
collection system have not improved.

Conclusion

There has been
some progress in the field of the information society and media, particularly
in aligning legislation on audiovisual media services and electronic
communications with the acquis and enhancing competition in the
electronic communications market. Legal uncertainty on the rights-of-way regime
continues. The independence of the media and of its regulatory authority still
gives rise to concern, and the digital switchover has been further delayed, putting
at stake the timely implementation of the process. Overall, preparations are
moderately advanced.

4.11. 
Chapter 11: Agriculture and rural development

As regards horizontal issues, the
government allocated about €6.8 million in 2013 for direct support and national
investment schemes in agriculture and agro-processing. Agricultural production
in 2012 increased slightly, mostly due to improved production in fruit trees
and olives. Part of the growth is linked to the government direct support
schemes that have encouraged the planting of new trees. While exports
increased, the trade balance has improved marginally. There has been good
progress with agricultural statistics. Since the beginning of 2013 the National
Statistics Institute (INSTAT) has been responsible for agricultural statistics.
The Census of Agricultural Holdings was conducted in October 2012. According to preliminary results, the total
number of agricultural holdings is 324 013, compared to 350 654 in
2010. The share of holdings keeping livestock fell from 84% in 2010 to 71% in
2012. The work on setting up a functional land cadastre continues to progress
very slowly. Under the Law on agricultural cooperation companies, new
cooperatives have been registered for the production of oil, cereals and
vegetables. The work on creating a functioning electronic agricultural
information system (farm register, animal register, etc.) must intensify in
order to create a basis for sound financial management of national and EU
assistance.

In the area of the common market
organisation, a new law on olive oil was approved by parliament. It aims to
align with the acquis on marketing standards.

The adoption of the 2014-20 strategy for
agriculture and rural development is pending. Preparations to manage and
control rural development funds under the rural development component of the
Instrument for Pre-accession Assistance (IPARD) have continued. The first call
for proposals under an IPARD-like scheme took place from December to February,
followed by a second call launched in April. The expected results of the
project will need to be closely monitored.

An assessment of the preparedness of IPARD
operating structures (paying agency and managing authority in the Ministry of
Agriculture and other bodies involved, such as the National Authorising Officer
(NAO) and the national fund at the Ministry of Finance) to manage funds of IPA
component V was carried out in March. The main weaknesses identified include
the lack of progress made by the NAO and the national fund in managing
pre-accession assistance in agriculture, the lack of appropriate office space
and equipment, including checking tools, in the paying agency and the lack of a
clear policy to retain trained staff both at the managing authority and the
agency. Efforts are needed to further train staff on the appropriate procedures
and in order to build up the administrative capacity of all structures involved
in the accreditation process.

In the field of quality policy,
amendments to the Law on industrial property referring to geographical
indications have still to be adopted.

As regards organic farming,
subsidies through direct schemes and training on organic production have been
provided. The adoption of a law on organic farming is pending.

Conclusion

There has been limited progress in the area
of agriculture and rural development. The agricultural statistics have been
improved. While the administrative structure to implement IPARD schemes has
been established at the Ministry of Agriculture, all involved elements of the
management and control system need to be substantially strengthened in order to
carry out their respective functions, in particular the NAO and the national
fund. Overall, preparations in this area are not very advanced.

4.12. 
Chapter 12: Food safety, veterinary and
phytosanitary policy

In the area of general food safety,
risk assessment capacity has still not been established although a first step
has been made with a decision by the Ministry of Agriculture to set up a dedicated
Scientific Committee. The regulatory framework relating to the Scientific
Committee needs to be completed with clear rules and internal procedures that
govern the activities of this body, including relations with the National Food
Authority, risk communication, risk assessment methodology, and the allocation
of an adequate budget. The quality of inspections of food facilities has
gradually improved. However, the organisational and administrative framework of
the inspection system lacks appropriate procedures and inspection plans,
including for import controls.

As regards veterinary policy,
progress has been made with the identification and registration of sheep and
goats. Official veterinarians at regional level were assigned the role of data
managers. The ear tagging and data entry into the animal database are close to
completion. Two mass vaccinations against brucellosis in sheep and goats have
been carried out in conformity with required standards, including the use of
certified vaccines, fully controlled vaccine cold chain, enhanced awareness
campaign and monitoring of the process. Vaccination against classical swine
fever has started. Most of the data on vaccination of animals have been
recorded in the animal information system.

Field epidemiology officers were provided
with job descriptions and operational manuals. Nevertheless, due to intra- and
inter-institutional fragmentation of the veterinary service, a clear definition
of competencies, responsibilities, procedures and communication is lacking. Staff
levels at the central veterinary office remain inadequate. The role of the
Chief Veterinary Officer is only technical. Although a good animal information
system exists, no steps were taken with regard to animal waste management or
improving of physical infrastructure in animal markets.

In the area of placing on the market of
food, feed and animal by-products, the pace of progress is slow, with the
exception of the updating and validation of the food establishments database
(AKUnet) that now records 17 800 units. There has been no progress in
ensuring food traceability due to the lack of enforcement of rules, timely
reporting and updating of information on animal movements. Resources for
monitoring contaminants, hormones, veterinary medicines, pesticide residues,
etc. are insufficient. It is necessary to ensure that national residue
monitoring plans are carried out in accordance with procedures. Introduction of
new procedures and standards in order to align with the acquis has to be
accompanied with intensive awareness and information campaigns for food
business operators.

As regards food safety rules there
is a need for progressive compliance with EU requirements as regards
bacteriological criteria for raw milk.

There have been few significant developments
in the area of phytosanitary policy. Inspection tasks have been assigned
to the National Food Authority. The Plant Protection Section of the Ministry of
Agriculture will be responsible for drafting legislation, with regional staff
having an advisory function.

Conclusion

There was little progress in the area of
food safety, veterinary and phytosanitary policy. The capacity of the
inspection system needs to be increased and systematic inspection plans have to
be introduced. Risk assessment capacity remains to be established and the
regulatory framework relating to the Scientific Committee needs to be
completed. Overall, preparations remain at an early stage.

4.13. 
Chapter 13: Fisheries

Amendments to the Fisheries Law were
adopted in December, providing that fishing boats of more than 12 metres must
install a mobile transceiver unit, as required by Council Regulation
1224/2009/EC. Implementing legislation on the rules for the collection and use
of data in the fisheries sector and support for scientific advice on national
fisheries strategy, as well as on management measures for the sustainable
exploitation of fishery resources in the sea was adopted. The legal framework
needs to be properly enforced.

In the area of inspection and control,
implementing legislation on prevention of illegal, unreported and unregulated
fishing and establishing a catch certification scheme, as well as a control
system for ensuring compliance with the rules of the fisheries management
policy was adopted. Despite recent amendments to the Fisheries Law, through
which observers have been assigned to assist inspectors in carrying out their
duties, the capacity of the Fisheries Directorate to collect information on
landing of catches, which is necessary for the preparation of the multi-annual fisheries
management plans and in particular for meeting reporting obligations under
international agreements, remains limited. Prohibited species are still placed
on the market, along with fish smaller than the allowed minimum size. The
Vessel Monitoring System, which has been idle since August 2012, needs to be
reactivated.

As regards international agreements,
Albania has been attending the General Fisheries Commission for the
Mediterranean and re-established its collaboration with the International Commission
for the Conservation of Atlantic Tunas (ICCAT).

Conclusion

There has been very little progress in the
area of fisheries, mainly in adopting new legislation in the area of data
collection and the prevention of illegal, unreported and unregulated fishing.
Further efforts are needed to ensure enforcement of the legal framework,
clarify administrative responsibilities and strengthen capacity, particularly
in policy making and inspection. Overall, preparations are not very advanced.

4.14. 
Chapter 14: Transport policy

As regards road
transport, the Law on transport of dangerous goods, aimed at aligning with
the acquis, was adopted in December. Legislative alignment with the acquis
in the field of admission to the occupation of road transport operator and
access to the road haulage market has not progressed. Relevant impact
assessments and public consultations have not been carried out systematically.
There have been no developments as regards roadworthiness tests, driving
licences, vehicle inspections and the introduction of speed limiters. New
technical standards for road transport are still awaiting adoption. There have
been no improvements with regard to road safety; the number of road accidents
and the death toll remain high with pedestrians making up a high share of the
casualties. Implementation of the 2011-20 national strategy and action plan for
road safety is at an early stage. No effective road safety campaigns have been
carried out.

In the field of
rail transport, the border crossing agreement with Montenegro was
ratified in December. A network statement has been finalised and was published
in March. The new Railway Law is still awaiting adoption. No progress has been
made towards setting up independent railway institutions, infrastructure
managers and rail operators. Resources allocated for the development and
maintenance of railway infrastructure remain extremely low, resulting in
further deterioration.

As regards
air transport, further steps were taken towards fulfilling the requirements
under the first transitional period of the
European Common Aviation Area Agreement. Implementing legislation, aiming to
achieve further alignment with the acquis on air service operations, air
carrier liability, working time for mobile workers in civil aviation and insurance
regulations, has been adopted. One limited self-service license on ground
handling contributed to some extent to liberalisation of airport charges, which
remain overall excessive. Legislation on allocation of slots at airports has
not improved. The National Agency for Air Traffic was certified in November.
Qualifications of Civil Aviation Authority staff have improved through
training. The safety situation improved significantly but there is lack of
evidence of recurrent training for Flight Operations Inspectors. There is still
an over-reliance on external experts for safety oversight duties. The
administrative and technical capacity in the air transport sector requires
further strengthening.

In the area of maritime
transport, the detention rate of vessels flying the Albanian flag has
improved due to the fact that a number of vessels have been removed from
service, but it still remains high. A new law on the accession of Albania to
the Protocol on Preparedness, Response and Cooperation to Pollution Incidents
by Hazardous and Noxious Substances was adopted in September. Albania still
does not participate in the Paris Memorandum of Understanding on Port State
Control and remains on the black list of that organisation.

Conclusion

Little progress
has been made in transport policy. Further efforts are needed to align
legislation with the acquis and to strengthen administrative capacity in
all modes of transport. Road safety remains a serious cause of concern and has
to be urgently addressed. Air safety oversight capacities have improved but
still rely excessively on external experts. Overall, preparations in the area
of transport are not very advanced.

4.15. 
Chapter 15: Energy

The new energy sector strategy is still
being developed.

As regards security of supply, electricity generation capacity improved
with the operation since September 2012 of the new Ashta hydro-electric plant.
The government adopted a regulation on the identification, assessment and
granting of concessions for hydro-electric plants. An intergovernmental
agreement with Italy and Greece on the Trans-Adriatic Pipeline (TAP) project
and the Host Government Agreement between the TAP consortium and Albania were ratified in March and April
respectively. In June the TAP project was selected to
bring Azeri gas of the Shah Deniz 2 field from the Turkish border via Greece
and Albania to Italy. This pipeline will allow Albania
to have access to natural gas resources. Albania has adopted a national
sectoral plan for the development of the TAP project and has signed a joint
agreement with the energy regulators of Italy and Greece. Albania remains
over-dependent on hydropower and vulnerable to hydrological conditions. There was no progress with regard to increasing the capacity to
monitor the implementation by economic operators of the legal obligation on
emergency oil stocks.

In the field of the internal
energy market, adoption of the new Power Sector Law is still pending.
Substantial adaptation of the market model, including cost-reflective pricing
and a clear legal framework is urgently needed to ensure the viability of the
sector. The role and responsibilities of the different actors on the
electricity market need to be clarified and their accountability strengthened.
There has been no progress as regards the unbundling of the generation and
wholesale supply operations of the state-owned power company KESH. KESH’s
financial difficulties during 2012 undermined its capacity to import
electricity and to pay small local power generators and created a need for
increased commercial loans, which had to be guaranteed by the state. The
situation improved during the first half of 2013 due to heavy rainfall,
allowing Albania to increase its electricity exports. However, the low
financial liquidity of the entire electricity sector remains a concern. Losses and bill collection rates remain at an unsustainable level. The dispute between the distribution company CEZ Shperndarje (CEZ Sh) and KESH resulted in
the Energy Regulatory Entity (ERE) withdrawing CEZ Sh’s distribution licence
and putting the company under public administration for a one-year period. CEZ
Sh subsequently started an international arbitration procedure. New electricity
tariffs approved by the ERE in May are in place. ERE’s administrative capacity
and operational independence remain weak.

Amendments to the Law on Natural Gas,
aiming at further alignment with the acquis, have been adopted. ERE
issued licenses for gas transmission and distribution to Albpetrol, the
Albanian oil and gas company. Albpetrol has yet to fulfil all the legal
requirements of a transmission system operator.

The Law on renewable energy was
adopted aiming at further alignment with the acquis. Implementing
legislation for the new law remains to be adopted. The development of the
National Renewable Energy Action Plan is delayed. Rules concerning access to
the grid for renewable energy installations are to be included in the new Power
Sector Law. Administrative barriers for licensing and authorisation of
renewable energy investments and connection of renewable energy producers to
the grid have not been reduced. The law on biofuels remains to be amended in
order to approximate it to the acquis on the use of renewable energy in
transport.

Training was provided to auditors in the
field of energy efficiency of buildings. The Law on energy efficiency
has still not been adopted. Implementation of the national energy efficiency
action plan is hampered by a lack of political commitment, administrative
capacity and financial resources. The preparation of the second national energy
efficiency action plan is delayed

In the areas of nuclear energy, nuclear
safety and radiation protection, Albania ratified the amendments to the
Convention on the Physical Protection of Nuclear Material in April. Amendments
to the Law on protection against non-ionising radiation and implementing
legislation on public safety standards for exposure to non-ionising radiation
were adopted. Guidelines on the procedure for recognition of a medical
physicist by the Radiation Protection Commission were also adopted. The
Radiation Protection Office increased its capacity, hiring two additional
staff.

Conclusion

There has been
little progress in the field of energy. There have been some
improvements as regards the supply of energy, but diversification of
electricity sources is still lacking. The conditions for a competitive
electricity market are not yet in place. The high level of losses and low bill
collection rates need to be urgently addressed. Overall, preparations are not
very advanced.

4.16. 
Chapter 16: Taxation

In the area of indirect taxation, there is a positive trend
concerning the volume of Value Added Tax (VAT) refunds processed
and the rate of VAT refund requests approved. The implementation of tax
legislation still requires significant improvements, with special regard to VAT
refund procedures as delays persist. Legislation adopted exempting from VAT
certain imports for investment purposes is not in line with the acquis.
A VAT law which is more in line with the acquis needs to be adopted.

Albania began implementing the new (2012) excise
legislation. Further efforts are required to align the excise structure
and rates with the acquis. Technical difficulties with the
implementation of excise stamps persist.

In the field of direct taxation, the
number of first-time personal income declarations (PID) increased. Legislative
alignment with the acquis requires further efforts. The draft Law
on mergers and savings has not yet been adopted and transfer pricing practices
are not in line with EU and international standards.

As regards administrative cooperation
and mutual assistance, Albania signed an agreement with Kosovo on
cooperation on taxation and fighting tax evasion and an
agreement with the United Kingdom to avoid double taxation. It also ratified the Convention on Mutual
Administrative Assistance in Tax Matters, a multilateral agreement developed
jointly by the Council of Europe and the OECD.

In the area of operational capacity and
computerisation, a new structure of the General Directorate of Taxation
(GDT), including the Risk Management Directorate and the Unit on Transfer
Pricing, was approved in December with a view to improving tax collection and
the fight against tax evasion.

The Tax Investigation Department (TID)
stepped up its efforts in tackling tax evasion and the number of cases referred
to the prosecutor’s office increased. Penalties for tax evasion were increased.
Enhanced internal cooperation in the area of internal auditing and fighting
corruption resulted in more proposals for disciplinary actions and cases
referred to the prosecutor’s office. However, corruption in the tax
administration and tax evasion remain a concern.

The Tax and Customs Academy started working
in May. The TID received training on detection of tax evasion and on
investigation of tax crimes. Human resources and capacity need to be further
enhanced and interinstitutional cooperation for the monitoring of PID files
requires strengthening. The involvement of the business community in the
legislative and policy-making processes remains low.

As regards computerisation, electronic
systems for filing personal income tax declarations and giving access to
taxpayers’ data through mobile devices were introduced, although the level of
electronic payment of taxes remains low. Preparations for upgrading the IT
system, including a risk analysis system, have started.

Conclusion

There was
limited progress in the field of taxation. The fight against corruption and tax
evasion needs to be strengthened as, although some measures were taken, these
issues remain a concern. Further efforts are required in legislative alignment
with the acquis, tax investigation, including exchange of information
with EU countries, VAT refunds and IT. Overall, preparations are moderately
advanced.

4.17. 
Chapter 17: Economic and monetary policy

Overall, monetary policy has been
prudent, maintaining price stability with inflation within the Bank of Albania’s
target range of 2-4%. However, monetary policy is constrained by the relatively
high degree of euroisation of the financial system. The effective management of
monetary policy by the bank should be maintained, and the Law on the Bank of
Albania should be further aligned with the acquis to enhance the bank’s
independence.

As regards economic policy, Albania
adopted its 2013-15 economic and fiscal programme (EFP) in January. It is based
on the 2013 Budget Law adopted in December and on the macroeconomic and fiscal
programming for 2013-15 which was adopted in January. The main fiscal targets
for the years 2013-15 concern a decrease in total net borrowing as a percentage
of GDP from 3.5% in 2013 to 2.2% in 2015, while maintaining in each year the
level of capital expenditures not less than the overall fiscal deficit. In
December, Albania repealed the official ceiling of 60% of GDP for public debt,
which is estimated by the current EFP to reach 63.8% in 2013, failing to meet
one of the targets of the 2012-14 EFP. Fiscal data are not in full compliance
with ESA95 standards. The macroeconomic and fiscal frameworks seem rather
optimistic and macroeconomic projections are not supplemented with alternative
scenarios in the light of uncertainty. Almost all the relevant data are covered
in accordance with the EFP methodology but weaknesses persist, especially with
regard to labour market and wage statistics. Links between the macroeconomic
scenario and structural reforms are not explicit enough. The framework for
structural reforms is not coherent and comprehensive and lacks clear timeframes
and budgetary paths for implementation. The capacity for economic policy
coordination and implementation remains insufficient.

Conclusion

There was
little progress with regard to improving the quality of economic policy
documents. Further efforts are required as regards the policy planning and
implementation process. The policy drafting capacity of institutions involved
in the preparation of the EFP has to be increased. Overall, preparations are
not yet sufficient.

4.18. 
Chapter 18: Statistics

In the area of statistical
infrastructure, the new structure of the National Statistics Institute
(INSTAT) was approved in December. It includes two new Directorates on European
Integration and on Agricultural Statistics, reflecting the transfer of
statistical domains from the Ministry of Agriculture. INSTAT’s capacity has
been increased with the recruitment of 36 employees, while regional offices
have been reduced from 36 to 12 to make INSTAT more operational. The 2012-15 programme of official statistics was
adopted in February. The Law on Statistics was amended in February,
introducing the role of INSTAT as coordinator of national statistics, ensuring
broader representation in the Statistical Council and laying down the procedure
for the recruitment and dismissal of the Director General of INSTAT, allowing
for two five-year mandates. The latter’s mandate was reconfirmed in June.
Proper enforcement of this law needs to be ensured. Further efforts are
required to enhance the professional independence of INSTAT. Interinstitutional cooperation at national level
in many statistical sectors remains weak.

As regards classifications and registers, work
on the statistical farm register is progressing, including tests on the
databases.

In the area of sectoral statistics,
INSTAT improved national accounts estimates and their methodology. There has
been progress in the production of quarterly Gross Domestic Product statistics.
Further efforts are needed to improve access to micro-data and datasets and to
develop an inventory of systematic processes and data.

INSTAT conducted
the Census of Agricultural Holdings in October 2012. Preliminary results were
published in March and final results are expected in December 2013. INSTAT
published the final results of the 2011 Population and Housing census at
national level in December and at regional and local level in May. Data on
employment, unemployment and occupation have not yet been published.

Efforts are needed to improve several areas of sectoral statistics,
especially agricultural, social, labour, tourism and macroeconomic statistics,
and to ensure that statistical data are available to the general public.

Conclusion

Progress has
been made in the area of statistics. Implementation of
the amendments to the Law on statistics is important. The credibility and
independence of INSTAT has to be ensured. Overall, preparations are moderately
advanced.

4.19. 
Chapter 19: Social policy and employment

As regards labour
law, amendments to the Labour Code are still awaiting adoption. Child
labour remains an important challenge. The first national child labour survey
conducted in May 2010 (published in May 2013) estimates that 7.7% of all
Albanian children aged 5-17 work. The statistical distribution of child
labourers per age group needs to be improved, taking also into account
international standards and provisions of the Labour Code on the minimum age
for working.

As regards health
and safety at work, several awareness-raising campaigns on occupational
health and safety, risk prevention and working conditions of employees have
been carried out. The number of accidents at work in 2012 was lower than in
2011 but the number of accidents resulting in death still raises concerns.
Overall, health and safety conditions at work remain poor. The State Labour
Inspectorate (SLI) has been reorganised and operates at the central and
regional levels. Inspectors were also trained, notably on EU health and safety
legislation. The impact of the reorganisation on administrative capacity needs
to be carefully monitored.

In the field of
social dialogue, the mandate of the National Labour Council expired at
the end of March. The Ministry of Labour, Social Affairs and Equal
Opportunities (MLSAEO) has proposed a new composition of the Council, partially
aligned with the representativeness criteria as defined by ILO standards, which
is still being discussed by the social partners. Bipartite social dialogue
remains very weak, especially in the private sector.

As regards employment policy, an employment strategy for 2014-20 is being drafted and is awaiting
adoption. The official unemployment rate fell slightly
in 2012 to 13%, but long-term unemployment (51% of the unemployed in 2012) and
youth unemployment are very high. The number of registered employees in 2012
shows a slight increase of 0.6% compared to 2011. However, labour market
participation and employment rates remain low, especially for women, while the
informal economy remains an important provider of jobs. Labour market
statistics need to be improved.

Unemployment benefit coverage remains low,
at an estimated 6% of the total number of registered unemployed. Altogether 969
unemployed job-seekers were involved in employment promotion programmes, out of
which around 70% were women job-seekers. National funds available for
employment programmes have further decreased and are largely insufficient to
cover the needs of the most vulnerable groups among the unemployed. A
new Vocational Training Centre was opened in Kukes in March. The MLSAEO has launched an e-portal which
covers 12 regional employment offices and 24 local employment offices and
serves as a platform for both job-seekers and employers to exchange labour
market information. Further efforts are needed to modernise the National
Employment Service, in particular with a view to increasing its attractiveness
and performance levels. Some efforts have been made to fight undeclared work.

There were no developments as regards
preparations for the European Social Fund.

As regards social
inclusion, the new draft strategy for social protection and social
inclusion 2013-2020 was drafted and widely consulted. The strategy incorporates
a new community- wide approach where anti-discrimination is an important driver
in achieving social inclusion. The last living
standards measurement survey (LSMS) shows that poverty levels have risen in
2012, reversing the decreasing trend of 2002-2008. According to the benchmarks
of the survey, poverty rose from 12.4% in 2008 to 14.3% in 2012. The Ministry
of Education and Science adopted quotas for the enrolment of Roma, Egyptians
and vulnerable students in public universities in the academic year 2012-13.
Accession to and retention in the education system remains challenging for
Roma, Ashkali and Egyptian children. Implementation of the social inclusion
policies targeting Roma remains slow.

As regards people with disabilities,
the Convention on the rights of people with disabilities was ratified and the
National Action Plan 2012–2021 was published in November 2012. The Minister of
Labour, Social Affairs and Equal Opportunities adopted three guidelines on
adjusting disability and caretaker allowance payments to the inflation rate
(increased consumer price index). The employment offices and vocational
training centres were trained on the Law on employment promotion, including the
quota for persons with disabilities. Awareness-raising activities took place on
the need to integrate sign language in schools. The draft framework law on
inclusion of and accessibility for persons with disabilities was not finalised.

In the area of social protection, no specific measures were taken to tackle delays in disability and
pension payments. In July a decision of the Council of Ministers on increasing
the salaries and pensions entered into force. The pension reform is not moving
ahead due to a lack of political will. The level of contributions for old-age pension increased by 60% in
2012 due to the higher number of private sector contributors. The 2012
published Social Insurance Institute data show that there were 554 102
recipients versus 651 613 contributors. Preliminary data show that the
number of contributors went down to 561 306 in the first half of 2013.

In the area of anti-discrimination,
the Commissioner for Protection against Discrimination (CPD) has focused on
raising awareness, providing legal recommendations and signing cooperation
agreements with central/local government institutions and some civil society
organisations. Compared to last year, the number of complaints submitted to the
CPD increased as did the number of investigations it initiated ex officio. The
CPD imposed five fines on public institutions for not implementing its
decisions and provided legal assistance in two cases. Implementation and
enforcement of the Law on protection against discrimination remains
insufficient. The level of public awareness of the law and of the complaint
mechanism remains low. More cases need to be brought to a final conclusion
with, if necessary, adequate penalties for the perpetrators. (See also
Chapter 23 – Judiciary and fundamental rights)

In the area of equal opportunities
between women and men, some employment programmes have
been undertaken to support women’s access to employment. No specific measures were taken to address the gender pay gap,
access to entrepreneurship and credit. In line with the 2012-15 strategy for
gender equality, the capacity of the administration dealing with gender issues
at state and municipal level has been strengthened through training. Additional financial and human resources are necessary to ensure the
proper implementation of the strategy. Representation of women in the labour
market, particularly in political and economic decision-making, remained
insufficient. Further efforts are required to foster cooperation with
civil society in this area. (See also Chapter 23 – Judiciary and fundamental
rights)

Conclusion

There has been little progress in the field
of social policy and employment. Further efforts are needed to improve health
and safety conditions at work, and amendments to the Labour Code are still
awaiting adoption. Labour market institutions and data remain weak. Some
efforts were made as regards anti-discrimination and equal opportunities but
more financial and human resources need to be invested in the implementation of
the respective policies at central and especially local level. Overall,
preparations in the area of social policy and employment are not very advanced.

4.20. 
Chapter 20: Enterprise and industrial policy

As regards enterprise and industrial
policy principles, Albania continued implementing the principles of
the Small Business Act (SBA). The legal and regulatory framework continued to
improve with some progress in the areas of bankruptcy and second chance for
SMEs and of company registration and business start-up. Some steps were taken to implement the inspectorate reform by
adopting amendments to sector laws, implementing legislation on the
organisation and structure of the General Inspectorate and the code of ethics
of its employees. The Business and Investment
Development Strategy for 2014-20, which takes into consideration the principles
of the SBA, has not yet been
adopted. There was no progress as regards legislative alignment on late
payment.

In the area of enterprise and industrial
policy instruments, financing to SMEs continued through the credit
guarantee fund and the European Fund for South-East Europe but SME access to
finance remains an issue. The Albanian Investment and Development Agency (AIDA)
promoted the business relay innovation centre and the Innovation and
Competitiveness Funds. AIDA’s capacity to implement SME promotion mechanisms
needs to be further increased.

Under the Competitiveness and Innovation
Programme 2007–13, Albania joined the European Network of Female
Entrepreneurship Ambassadors and the European Network of Mentors for Women
Entrepreneurs.

As regards sector policies, the Law
on tourism was amended, clarifying the legal status and scope of activity of
the Tourism Service Offices. Albania adopted in February the 2013 mining plan,
and legislation on mining was amended.

Conclusion

There was some progress in SME policy
implementation and policy convergence towards EU standards and practices,
particularly as regards company registration and business start-up. Albania
should continue focusing on improving the business environment, moving towards
the introduction of a full regulatory impact assessment for all legislation
with direct implications on business operations. Overall, preparations are
moderately advanced.

4.21. 
Chapter 21: Trans-European networks

In the area of transport
networks, Albania continued to participate in the South-East Europe
Transport Observatory and to implement the memorandum of understanding on the
development of the South-East Europe Core Regional Transport Network.

Improvements
continued throughout the road network. Construction work began on the Fier
by-pass on road corridor VIII, while construction of the Tirana–Elbasan road is
progressing and the Damës-Tepelenë segment is still
not completed. On the north-south corridor, the section from Shkodra to the
border with Montenegro has been completed with the exception of Shkodra ring
road which is delayed. Expropriation problems and lack of funds continue to
slow down some projects. Often works are not finished and roads are left
without signs and marking. Comprehensive environmental impact assessments are
not carried out systematically. The tender for the maintenance concession for
the Milot-Morine motorway, which was launched in February 2012, has not yet
been finalised. The road maintenance asset management scheme has been updated.
Funds allocated for maintenance are still insufficient. As regards port
infrastructure, works in Durres are progressing well, while procurement
procedures started for works planned in Vlora. Resources for dredging of port
access need to be secured in order not to jeopardise investments. Overall
maintenance of transport infrastructure remains an important challenge.

As regards energy networks, the new Ashta Hydro Power Plant came into operation. Investments in rehabilitation and modernisation of monitoring of
the 220 kV substations at Fier, Tirana, Elbasan and Burrel were completed. A
feasibility study for the construction of a 200 Kv interconnection with the
former Yugoslav Republic of Macedonia has been finalised. Preparations for the
construction of the 400 kV interconnection with Kosovo were re-launched in
January following a delay due to disputes regarding the outcome of the first
tender procedure. In June the Trans-Adriatic Pipeline
(TAP) project was selected to bring Azeri gas of the
Shah Deniz 2 field from the Turkish border via Greece and Albania to Italy (See also chapter 15— Energy). A national sectorial plan for the
development of the TAP project was adopted.

Conclusion

Some progress
was made in the area of trans-European networks. Development of road
infrastructure is continuing. There has been no progress in developing the rail
network. Transport infrastructure development and maintenance remain a
challenge. Overall, preparations in the area of trans-European networks are not
very advanced.

4.22. 
Chapter 22: Regional policy and coordination of
structural instruments

As regards the legislative framework,
steps have been taken to secure multi-annual sector programming, budget
flexibility and co-financing capacity for EU projects at national and local levels.

As regards the institutional framework,
national structures required for the decentralised management of IPA component
I are in place. Following submission of the accreditation package to the
Commission, two auditing missions have taken place to assess the readiness of
the structures. Albania has addressed most of the recommendations to manage IPA
component I funds. In relation to IPA component II, the implementing and
operational agreements between the national authorising officer, the head of
the operating structure and the programme authorising officer for component II
have not yet been adopted. Preparation for decentralised management in the area
of agriculture and rural development is ongoing (see also Chapter 11 -
Agriculture).

In the field of the administrative
capacity of all IPA structures, a workload analysis was completed in
December for the main IPA bodies and an updated training needs plan for 2013
was finalised in February. Further steps need to be taken to ensure adequate
staffing within IPA structures.

As far as programming is concerned,
administrative capacity needs to be significantly enhanced in order to be able
to frame and implement realistic sector policies and strategies. The
development of a mature projects pipeline remains an important issue to be
addressed, particularly in relation to future EU assistance under IPA 2.
Adoption of the national strategy for development and integration for 2014-20,
which inter alia addresses regional policy, has been postponed to the
first quarter of 2014.

As regards monitoring and evaluation,
the monitoring and evaluation procedures have been revised and a segregation of
monitoring functions across the IPA structures has been established.

In the area of financial management,
control and audit, the procedure for requesting IPA funds from the
national fund has been shifted from a forecast basis to an invoice basis. The
management board of the audit authority (AA) has been appointed. The staff of
the AA received training in auditing procedures. Capacity needs to be further
strengthened and staff numbers need to be increased.

Conclusion

Some progress was made in the area of
regional policy and coordination of structural instruments. In view of the
accreditation, management and control systems of IPA structures need to be
further strengthened to minimise risks of delays and decommitments. Programming
capacity needs to be improved, with particular regard to the preparation of a
solid projects pipeline. Overall, preparations in this area are moderately
advanced.

4.23. 
Chapter 23: Judiciary and fundamental rights

Judicial system

There has been
some progress in completing the legal framework for judicial reform, which is a
key priority of the Opinion. Implementation of the 2011-13 judicial reform
strategy and the relevant action plan was pursued. Some measures are still
pending, and a comprehensive assessment of the reform is hampered by the
absence of specific indicators. Poor interinstitutional cooperation, lack of
human resources and weak budget planning and allocation remain a concern.
Albania needs to update its judicial reform strategy and further promote the
independence, efficiency and accountability of its judicial institutions.

The Law on the
High Court was adopted in May, thus paving the way for implementation of the
2012 Law on administrative courts. The Law on judicial administration was
adopted in April and a significant number of amendments to the Civil and Civil
Procedure Codes and to the Criminal Code were introduced in April and May
respectively. The ongoing review of the Code of Criminal Procedure has yet to
be completed, in particular as regards the adoption of provisions aimed at
rationalising the High Court’s competences and procedures, and reducing its
workload. Important legislation on the reform of the Constitutional Court and
the High Council of Justice still needs to be adopted. The role of the Minister
of Justice in the High Council of Justice should be reviewed.

Regarding the
independence and impartiality of the judiciary, the Law on
the High Court, which entered into force on the 1st of October,
increases the number of judges from 17 to 19 with a view inter alia to
setting up an administrative chamber and dealing more efficiently with the
Court’s workload. The law also introduces stricter conditions and criteria for
the selection of judges and reduces the non-judiciary component of the Court’s
membership to a maximum of one quarter, thereby reinforcing the professional
character of the High Court. Further, the President of the Republic is henceforth
required to motivate his choice of candidates for any vacant seats on the
Court. The status of the High Court and the process of appointing judges to
this Court remain, however, issues of concern in terms of possible
politicisation, as long as the relevant constitutional provisions are not
amended. The independence and impartiality of the High Court is still not fully
guaranteed.

The evaluation
of judges — which has not yet been completed — is a crucial requirement for a
merit-based and transparent process of appointments, transfers and promotions.
There is an overall trend to give increased weight to applicant’s merits and
other objective criteria. The July round of appointments, transfers and
promotions of judges showed that the margin of discretion enjoyed by the High
Council of Justice is still too wide and should be reduced. The procedure for
the appointment of the new administrative judges has not been finalised.

The School of
Magistrates continued to provide good quality curricula and the candidate
admission process is reported to have been transparent and merit-based. The
School continues to face problems due to scarce budgetary allocations.

Random allocation of cases under the
unified case management system, which has not yet been extended to courts in
Tirana except for the Serious Crimes Court, needs to be ensured. Audio
recording, which is already being used in 19 district and appeal courts, should
be further extended.

Publication of court rulings - which is
still not fully ensured - should take into account all aspects relating to the
protection of personal data. Relevant recommendations of the Data Protection
Commissioner need to be followed up. There has been no progress in updating the
electronic database at the Judicial Documentation Centre.

In relation to accountability in
the judiciary, the memorandum of understanding between the Ministry of Justice
and the High Council of Justice on inspections has been implemented smoothly.
However, as long as the Law on the High Council of Justice is not changed, the
risk of overlapping remains. A manual on good practice on inspections was
published at the end of 2012 and the High Council of Justice inspection service
is being re-organised, but new rules on inspections are still to be drafted.
Disciplinary proceedings against judges and prosecutors have been applied in
only a few cases. The power to open and close a disciplinary procedure is still
the exclusive competence of the Minister of Justice, which goes against EU
standards.

The fight against corruption in the
judiciary has made limited progress. A modest increase (around 7% for appeal
court judges and 20% for first-instance court judges) in magistrates’
remuneration was adopted in April. Concerns about corruption in the judicial
system remain. Implementation of the 2012 constitutional reform limiting the
immunity of judges has still to be ensured. Amendments to the Code of Criminal
Procedure making the arrest of judges and house and personal searches possible
have not yet been adopted. The code of ethics was cited in some disciplinary
proceedings against judges but its implementation remains to be fully ensured.
The impact of the online procedure allowing citizens to lodge complaints
against judges and court proceedings is still to be assessed. There was no
progress on improving the drafting of court decisions, in particular as far as
their reasoning is concerned. Further, court decisions are generally delivered
without their reasoning, which in most cases is only issued after a significant
delay.

The lack of accountability of the General
Prosecutor’s Office is of concern. Procedures for the appointment and dismissal
of key personnel in this Office should be transparent and impartial and the
role of the Council of the Prosecutors reinforced.

As regards the efficiency of
the judiciary, a territorial reorganisation of courts and a reallocation of the
number of judges were approved in November by the President following a
proposal by the Ministry of Justice and a favourable opinion from the High
Council. The new provisions have not yet been implemented in many respects. The
new Law on judicial administration introduces a long-awaited legal framework
regulating the work of courts and court staff. The law does not guarantee the
independence of court chancellors, in particular because it does not provide
them with civil servant status. Implementing legislation needs to be finalised
and adopted. Adequate training of court staff remains to be ensured. Some
progress was made regarding working conditions in courts but hearings continue
to be held occasionally in judges’ offices. There is still no accurate civil
registry containing a proper address system. The budget allocated to courts and
court staff remains insufficient.

The 2013 budget for the overall justice sector
was slightly higher than in 2012 and amounted to €77 million, which represents
0.8% of GDP and 2.6% of the state budget.

The Criminal Code was amended by
introducing new offences and heavier penalties for some crimes, and aligning
the Albanian code with several European standards and international conventions,
including on the protection of women and children. The amended Code of Civil
Procedure reformed procedures applied at the High Court by establishing a panel
of only three judges for most cases. It also limits the Court’s civil
competence by excluding appeals on procedural grounds. The applicability of
these amendments to cases already pending before lower courts is still under
deliberation; if the amendments do not apply to such cases, this will
significantly delay their positive impact. Further amendments to the Code
provide for electronic notification, electronic minute taking, and streamlined
enforcement procedures. A simplification of inheritance procedures was
introduced through amendments to the Civil Code. Overall, the reform of the
Civil Code and the Code of Civil Procedure should help reduce the backlog of
cases and expedite court proceedings, thereby improving efficiency.

Implementation of the 2012 Law on the
profession of lawyer is ongoing: the director of the new school of lawyers has
been appointed and the disciplinary committee has begun to operate. The issue
of empowering judges to effectively punish lawyers for contempt of court,
including repeated absences during hearings in civil and criminal cases, has
not yet been addressed. Inefficient and lengthy court proceedings and backlogs
(27 623 and 24 415 cases pending before district and appeal courts by
January 2012 and January 2011) remain an issue of concern.

In June, the
Committee of Ministers of the Council of Europe adopted a Resolution calling
upon Albania to prepare an action plan with a view to establishing an effective
compensation mechanism so that decisions relating to restitution of or
compensation for property nationalised during the communist regime can be
enforced. Non-execution of court decisions, in particular those involving state
institutions, remains a serious problem.

Private
bailiffs currently deal with enforcement in most civil cases. No precise
information is available as regards the rate of effective enforcement of court
decisions or the time required for enforcement. The bailiff case management
system is not yet connected with the system used by the courts. Regarding the
Law on mediation, the Chamber of Mediators was established in July. Amendments
to the Law on arbitration are still pending.

In February,
the Tirana Court of Appeal confirmed the 2012 District Court convictions in the
so-called Gërdec case (the 2008 explosion that killed 26 people and injured
over 300) but further reduced the sentences given to some of the 29 defendants,
while placing others on probation. Both the prosecution and the defendants
appealed to the High Court against this ruling. In parallel, the charges
against a former Defence Minister were dismissed at the end of 2012 following a
general amnesty granted on the 100th anniversary of Albania’s independence. An
application filed by relatives of the victims contesting this decision was
brought before the European Court of Human Rights in May.

In relation to
the death of four demonstrators during the events of 21 January 2011, the
District Court of Tirana acquitted in February the three defendants accused of
being involved in the incident. The Court considered that the way in which the
prosecution had formulated the charges did not justify a verdict of ‘intentional
homicide’, which was the core of the accusation. This decision, which has
sparked strong controversy, has been appealed by the General Prosecutor’s
Office. In September, the Tirana Court of Appeal reversed the acquittal
decision and imposed prison sentences, of respectively one year and three
years, on two of the defendants for manslaughter, whereas the Prosecution had
sought sentences of respectively 21 and 23 years.

As regards access to justice, the
Law on legal aid was amended in May, introducing possible exemptions from
judicial fees for victims of trafficking and domestic violence, and
establishing local legal aid offices. The State Commission for Legal Aid called
on lawyers to apply to be listed as free legal aid lawyers. Implementation of
the law has been very slow and the budget allocation insufficient for local
offices to be set up in the short term. Despite the amendments of May, access
to justice was hampered by high judicial fees. Applicants requesting free legal
aid still need to submit many documents, from various state institutions. Most
free legal aid was provided by civil society.

A group of former political prisoners went
on hunger strike last autumn, claiming shortfalls in the implementation of the
2007 Law on compensation and the right to restitution and rehabilitation of
former political prisoners and persecuted persons.

Anti-corruption policy

Implementation
of the anti-corruption strategy progressed. Albania completed implementing all
recommendations of the third-round evaluation of the Group of States against
Corruption (GRECO), in particular by strengthening the legal framework on
transparency of the funding of political parties.

Initial track records have been
established. During the first six months of 2013, convictions at district
courts increased by 21% to reach 94 cases compared to the same period in 2012,
and convictions at the appeal courts more than doubled to reach 56 cases. A
variety of sectors was covered, such as health and education. Regarding
high-level corruption, four defendants were convicted during the first six
months of 2013. Following the constitutional amendments to restrict the
immunity of high-level public officials and judges, the Criminal Procedure Code
needs to be amended to clarify the relevant investigative procedures.

Inspections
carried out by the Department of Internal Control and Anti-Corruption (DIACA)
have continued. Nevertheless, there is a need to clarify the role of DIACA and
to enhance capacity in this area. An assessment of the over-all set-up of the
institutions involved in the prevention and fight against corruption, including
the role, operation and impact of the relevant institutions and their
coordination, needs to be undertaken. There is a need to ensure effective
reporting, policy coordination and monitoring at central level.

The memorandum
of understanding (MoU) between the High Inspectorate for Declaration and Audit
of Assets (HIDAA) and the High Council of Justice is still pending. An
assessment of the implementation of existing MoUs remains to be made. The
impact of the amendments to the Law on the prevention of conflicts of interest
in the exercise of public functions and the Law on the declaration of assets
and audit of assets should be evaluated.

Implementation
of the agreement on exchange of information with the customs service and the
Directorate General of Road Transport Services is progressing smoothly. An
electronic registry for notaries has been launched for the registration of acts
in a centralised national system. The digitalisation of information provided by
the Immovable Property Registration Office has not yet been completed.

The number of
corruption cases investigated by the Joint Investigative Units increased by 28%
in 2012 compared to 2011, whereas the proceedings sent to court increased by
52% in 2012. HIDAA also continued detecting cases of suspicious asset
declarations. However, overall, the number of investigations and convictions
remains low. There is a need to improve HIDAA’s audit capacity. Coordination
among institutions and further investigation of these cases needs to be stepped
up. Overall, investigations continue to have a reactive, rather than proactive,
nature and risk assessments for corruption are not carried out systematically.

State institutions
dealing with the fight against corruption remain vulnerable to political
pressure and influence. It is particularly important to ensure transparent and
merit-based criteria for appointments and dismissals. The role of civil society
is still limited despite a recent increase in the use of social media as a
means of drawing attention to complaints and reporting abuses.

The use of a
24-hour camera monitoring system has been extended to all customs border
points. In 2012 disciplinary investigations were conducted against 28 customs
employees, mostly for small-scale bribery. The use of proactive investigations
and risk assessment in the tax service needs to be enhanced. Corruption in the
tax service remains an issue of concern.

A track record
of disciplinary measures against judges has started to be built. However, there
is no effective system of asset declarations and verifications. Risks of
corruption and undue influence over the transfer and promotion of judges have
not been addressed sufficiently. Corruption in the judiciary remains a
particularly serious problem.

Inspections of
higher education establishments continued. Online procedures for the ‘State
Matura’ examination were further developed and a new code of ethics for
teachers was introduced. Measures centralising drugs procurement have recently
been taken to tackle problems of corruption in the health sector. A ‘green line’
was set up in order to allow citizens to lodge complaints against corruption
concerning medical personnel. The effectiveness of these measures needs to be
assessed. Corruption in the health sector remains an area of concern.

The number of
contact points (green lines, e-mail addresses) for citizens to provide
information on corruption cases has increased. There is a need to evaluate their
effectiveness and the action taken on the information provided.

Fundamental rights

Regarding international
human rights instruments, Albania ratified the Council of Europe Convention
on Preventing and Combating Violence against Women and Domestic Violence, the
UN Convention on the Rights of Persons with Disabilities and the Third Optional Protocol to the UN Convention on the Rights of the
Child concerning a communications procedure. Delays in application of and
non-compliance with judgments of the European Court of Human Rights,
with particular regard to property rights and the right to a fair trial,
remained a concern. The Court delivered judgments on 6 applications finding
that Albania had violated rights guaranteed by the European Convention on Human
Rights.

A total of 143 applications have been submitted to the Court since September
2012, bringing the total number of pending applications to 446.

Measures have
been taken to strengthen the prevention of torture and ill-treatment,
another area covered by a key priority of the Opinion. In 2013, the
State Police signed a cooperation agreement with a third civil society
organisation on monitoring places of deprivation of liberty, including
unannounced visits. All police officers have been trained on human rights; this
has not been extended to civilian staff such as doctors or psychologists
working within the police force. The Istanbul Protocol on documentation of
cases of ill-treatment is used in all prisons and was introduced in district
police directorates. The guidelines and protocols on hunger strike management
were approved by the General Directorate of Prisons in 2013. The National
Mechanism for the Prevention of Torture increased the number of inspections by
41%, from 98 to 138. The number of its recommendations increased from 37 to 53.
The Ombudsman received 107 complaints against the State Police and the General
Directorate of Prisons, which represents a 48% decrease. Most of the Ombudsman’s
recommendations on ill-treatment were addressed by prisons and the State
Police.

Non-compliance
by state-institutions with recommendations and insufficient budget, in
particular for enlisting specialist expertise and for enabling monitoring
visits to places of detention, hampered the mechanism’s operations. Infrastructure
standards for detention cells were met in only seven police commissariats. The
Commissioner for Protection against discrimination also issued a decision
against a State Police employee in the first half of 2013.

Following the
adoption of the 2012 Law on mental health, the Ministry of Health, responsible
for specialised treatment of mentally ill persons in penitentiaries, has not
recruited additional psychiatric and psychological staff, nor has it allocated
a budget to improve living conditions. Concerns remain regarding the distribution to and sufficiency of
medicines, particularly in prisons outside the capital. Little progress has
been made on the establishment of a specialised institution for treating
mentally ill detainees under obligatory treatment. Mentally ill persons in the
Kruja Institute continued to be kept in detention, meaning that the prevention
of ill-treatment or degrading treatment was not guaranteed.

As regards the prison system, the
area covered by the Probation Service was extended to four further districts
and the number of staff was increased. In March, a pilot of the electronic
monitoring system as an alternative to custody started, with a target national
capacity of 300 offenders. A debit card system and a sentence management system
have been introduced for prisoners. Issues of privacy remain, especially as
regards visit areas on a single bench system or lack of privacy hoods to prison
pay phones.

To guarantee the right to education for
juveniles in detention, education staff was appointed in all penitentiary
institutions. New education centres were opened in prisons and new programmes
for 18-21 year olds have been introduced for both adult male and female
prisoners. Budget and didactic material is still needed to provide compulsory
education to all juveniles. Human and financial resources for civil society
organisations certified to supervise work with juveniles need to increase; so
does the budget to guarantee the effectiveness of the probation service.

Poor infrastructure and problems of
maintenance of recently built infrastructure remained a concern in many
prisons, including pre-trial sections. Overcrowding has been reduced, but still
persisted in some pre-trial sections. Inmates depended on food, equipment and
medicine supplies from their families. Judges and prosecutors need to increase
use of alternatives to detention. Working inmates, albeit in small numbers,
have their sentences remitted instead of receiving remuneration. The legal
framework for employment scheme payments needs to be improved. Anti-corruption
efforts in prisons need to be strengthened.

In the area of freedom of expression,
the Law on audiovisual media was adopted in March, improving substantially the
legislative framework for audiovisual media in Albania. The law fails to
provide a selection procedure for the governing bodies of the regulator and the
public broadcaster that would guarantee their independence. The moratorium on
the use of defamation suits by government officials has been observed. Further
efforts are required to ensure proper implementation of amendments on
defamation and guidelines on setting damages at a reasonable level, in
particular through training of the judiciary. The public service broadcaster’s
subscription fee collection system has not been revised and concern remains
over its editorial independence.

Some cases of
violence against journalists have been reported. Media continue to be used as a
tool to promote political and private economic interests. Public advertising is
still not regulated in a way that guarantees transparent and non-discriminatory
allocation of funds. The lack of transparency of media financing remains an
important challenge. Further efforts are needed, particularly by the State
Labour Inspectorate, to ensure proper enforcement of labour rights,
particularly the right for media workers to be covered by a formal employment
contract. Protection from arbitrary dismissal is crucial to prevent
self-censorship. The capacity of journalists’ trade unions remains weak. Professional
and ethical standards in journalism require strengthening. Privacy concerns in
reporting need to be addressed, including in the case of minors and vulnerable
groups. Further efforts are needed to ensure that reader/viewer complaints are
dealt with in an effective and impartial manner.

Freedom of
assembly and association has generally been
respected.

Freedom of thought, conscience and religion was generally respected.

A positive step
regarding women’s rights and gender equality was taken in May, when the
Criminal Code was amended to introduce rape and sexual violence in the marriage
as a criminal offence. The referral mechanism for domestic violence needs
further consolidation, coordination between central and local institutions
needs to be improved, and the missing structures need to be established, namely
public shelters and relevant social services for victims. Gender-discriminatory
provisions remain in some codes and laws. Court decisions showed evidence of
gender bias. Implementation of policies to protect women against all forms of
violence needs to be strengthened. As many as 50% of women who had filed for
court protection withdrew their petitions subsequently. Reports of serious
cases of domestic violence increased substantially. A national toll-free line
for survivors and a system of victim compensation need to be established. The
national shelter for victims of domestic violence applies unnecessarily
restrictive criteria for admission and provides few facilities for emergency
needs. Neither CSO-run shelters nor victims receive financial aid from the
state. The reintegration programme for victims is minimal.

Women continued
to be under-represented in public office. In the run-up to the 2013 general
elections, the three largest political parties were fined for not meeting the
gender quota requirement in their candidate lists. The gender quota is
respected in the composition of the new government with six ministers. Further
efforts are required to enforce laws and policies on women’s rights. Some local
governments initiated gender mainstreaming in the preparation of their local
development strategies. At central level, four ministries made gender
mainstreaming efforts.

In the area of children’s
rights, the Criminal Code amendments adopted in May introduce possession of
child pornography and trafficking of children as criminal offences. There are
155 child protection units (CPUs) in municipalities and communes. Out of 155
CPU specialists, 25 worked full-time while others were primarily social service
workers. The number of CPU needs to be substantially increased in order to meet
the child protection needs of the country’s vulnerable children in a meaningful
way. The capacity of the state agency for children’s rights increased. The
child protection system lacks sufficient budgetary means, staff sustainability
and minimum standards of operation, in particular protocols, and legal
requirements. The national
child helpline that provides an emergency and referral service is run by a
non-governmental organisation with donor funding. Deinstitutionalisation has
not progressed. Foster care has not expanded. Special protection for children
in residential institutions was not systematically enforced. The emigration of
unaccompanied minors, particularly Roma, from Albania to the EU continued to be
a challenge. The cases of children confined to their homes for fear of
retribution in blood feud conflicts persist.

The strategy and action plan on juvenile
justice have not been adopted. Cases of ill-treatment of juveniles in
places of detention were reported. There were no
special chambers in police commissariats for children under 14 who have
committed crimes and a psychologist was not regularly present during evening or
night interrogations. Limited progress has been made
regarding the treatment of juveniles in police commissariats. No specific
measures were taken to address long detention periods of juveniles.
Psycho-social assistance and rehabilitation programmes to juveniles were donor
provided. After-care support for juveniles’ reintegration has not been
established.

Regarding child
labour, the number of children (mainly Roma) working or begging in the
streets and subjected to the worst forms of exploitation and extreme
marginalisation remained very high. The first national child labour survey
conducted in May 2010 (published in May 2013) estimates that 7.7% of all
Albanian children aged 5-17 work. The report estimates that over 5% of all
children aged 5-17 are child labourers, working in hazardous economic
activities, for excessively long hours or under dangerous conditions. The
statistical distribution of child labourers per age group needs to be improved,
taking also into account international standards and provisions of the Labour
Code on the minimum age for working.

No effective
measures were taken by the state to address child labour and exploitation. A
child protection system is needed that provides specialist support services
for children at risk of abuse or exploitation focusing on stronger support for
families with difficulties and community-based services. Adequate action has not been taken to provide specialised services
to sexually abused children.

Implementation and monitoring mechanisms
need to be in place to guarantee protection for socially vulnerable and/or
persons with disabilities. The needs of persons with disabilities
were not considered in programmes and budget plans of line ministries.
Differentiated status for certain disabilities remained. Delays in payment of
the disability benefit have been reported. Persons with disabilities continued
to face difficulties in accessing education, employment, healthcare, social
services or decision-making. Full access and vote secrecy for disabled people
in the June elections was not guaranteed.

Albania has taken a number of important
steps in the area of anti-discrimination policies. The Anti-Discrimination Commissioner
dealt with a number of cases, and in June, the District Court of Fier issued
the first-ever court decision on a discrimination case, ruling in favour of a
female employee who had been treated in a discriminatory manner at the
workplace. Public awareness of the Law on protection
against discrimination and of a complaint mechanism remained low. The
implementation of the law needs to be further strengthened; in this context,
victims of discrimination need to be encouraged to file complaints in order to
establish solid case law. A clarification of the roles of the office of the
Ombudsman and the office of the Anti-Discrimination Commissioner is needed — to
render both offices more effective. Discrimination against the Roma minority
and other vulnerable groups remained.

In December, the Ministry of Labour, Social
Affairs and Equal Opportunities launched the action plan on the rights of lesbian, gay, bisexual, transgender and intersex (LGBTI) persons. Amendments to the Criminal Code
introduce an aggravating circumstance for offences relating to gender, race,
ethnicity, gender identity, sexual orientation, political beliefs, religion,
health status, genetic predisposition or disability. In
May, Prime Minister Berisha and then opposition leader Rama met with
representatives of the LGBTI community, thus setting an unambiguous example for
an anti-discriminatory approach within Albanian society. First steps have been
taken to review compulsory education textbooks in order to eliminate
stereotypes fostering discrimination. There were cases of homophobic speech
without judicial follow-up. An inter-ministerial working group needs to be
established to ensure implementation of the action plan on the rights of LGBTI
persons.

Labour and
trade union rights have been generally respected.
Amendments to the Labour Code are still awaiting adoption. The tripartite
social dialogue has been interrupted since the mandate of the National Labour
Council ended in March 2013. Bipartite social dialogue
remains weak, particularly in the private sector.

In the area of property
rights, a key priority of the Opinion, a property reform strategy approved
in 2012 is under implementation, although very little progress has been made
with regard to the implementation of key strategic objectives such as
finalisation of property registration, property restitution, compensation and
legalisation. The related action plan needs to be reviewed to ensure that it is
realistic and sustainable in terms of targets and sources of funding. The
government established three monitoring and consultative structures dedicated
to its implementation. Cooperation between institutions remained very weak.
Initial property registration has shown limited progress. No progress has been
made as regards the integration of the electronic land and property databases.
Significant efforts were devoted to the digitalisation of information held by
the Immovable Property Registration Office (IPRO), but there was no
coordination with databases of other public institutions. The government took
some legislative measures to speed up the process of legalising buildings, but
legalisations did not progress in practice. A new methodology for land
evaluation and a land value map for each region were adopted. The Property
Restitution and Compensation Agency (PRCA) started the process of financially
compensating owners expropriated due to the legalisation process. The
government approved a number of decisions on criteria and procedures allowing
the transfer of ownership of agricultural land and land belonging to the former
agricultural cooperatives. A normative act on the evacuation of buildings and
their return to their former owners was adopted and enforced without properly
taking into consideration the right to housing for vulnerable people. Claims by
former owners for compensation and restitution of property confiscated during
the communist regime remain unresolved. The government has yet to communicate a
clear plan and timetable for enforcement of judgments of the European Court of
Human Rights regarding property rights.

As regards the
respect for and protection of minorities, inter-ethnic relations
remained good overall. A series of measures still need to be taken to guarantee
respect for human rights, integration and social inclusion in practice — such
as clearly defining minorities in Albanian legislation. The mandate of the
State Committee for Minorities has not been enhanced. The adoption of comprehensive
legislation, following a broad consultation process, and taking into account
the recommendations of the
Advisory Committee of the Framework Convention for the Protection of National
Minorities, would help to address legal gaps that have
been identified and clarify state policy towards minorities. Short-term
measures ensuring equal access in practice to rights for persons belonging to
all minorities throughout Albania, abolishing any ground for differentiated
treatment between the categories of national and ethno-linguistic minorities
and enhancing the representativeness and consultative role of the State
Committee on Minorities, would be steps in the right direction. The results of
the Population and Housing Census were contested by minority representatives,
including some Roma and Egyptian associations, as not reflecting the reality on
the ground. Data collected through the Census should
not constitute the exclusive source of information for the development of the
legal and policy framework on minorities. Regarding cultural
rights, the traditional minority name of one municipality has been restored
with cross-party parliamentary support, but the use of minority languages needs
to be further enhanced. Albania has not adopted the European Charter for
regional and minority languages and the right of persons belonging to
minorities to receive instruction in their language is still not available for
all.

Regarding Roma inclusion, the
implementation of policies, including the operational conclusions of the
December 2011 seminar on inclusion of the Roma and Egyptian communities in the
framework of Albania’s EU integration, remained inadequate overall. Roma and
Egyptian continue to face very difficult living conditions and frequent
discrimination, particularly regarding access to education, social protection,
health, employment and housing. In line with the national action plan Albania
needs to swiftly improve the living conditions of Roma; coordination between
the public administration at central and local level is essential in this
context. Evictions of Roma families from their settlements in August 2013 have
been of particular concern. Another key area to focus on immediately is access
to education and integration of Roma children in the education system — from
pre-school level to higher education. The state authorities’ response mechanism
to protect Roma children is insufficient.

New
instructions on data security were adopted in the area of protection of
personal data. The Data Protection Commissioner is still not listed among
the institutions to be consulted when legislative proposals are being drafted.
In practice its involvement in the process grew. The Commissioner issued
numerous recommendations on corrective actions. The number of inspections and awareness-raising
activities increased. A toll-free number for citizens’ complaints was launched.

Conclusion

Overall, Albania has made some progress in
judicial reform by adopting various policies aimed at addressing the key
priorities. Significant gaps remain in terms of both the legislative framework
and the implementation of legislation. Further constitutional reform is
necessary. Progress has also been made in the fight against corruption.
Inter-institutional cooperation and exchange of information has improved.
Albania completed implementing all recommendations of the third-round
evaluation of the Group of States against Corruption (GRECO), in particular by
strengthening the legal framework on transparency of the funding of political
parties. Initial track records cover a variety of sectors and levels, including
cases of high-level corruption, and show an increase in convictions. An
assessment of the overall institutional set-up, including the role and
operation of the relevant institutions and their coordination, needs to be
undertaken. Independent institutions need to be strengthened. Resource
allocation needs to be reviewed and the efficiency and operational capacity of
the competent law enforcement agencies at central level need to be
strengthened. A track record of effective prosecutions needs to be further
developed at all levels. In some areas of fundamental rights, the legal
framework has improved and some encouraging practical steps have been taken.
Implementation generally lags behind, in particular regarding persons with
disabilities, children at risk of abuse or exploitation and the Roma community.
Major efforts are necessary to address persisting problems in the area of
property rights through credible and coherent measures. Albania needs to adopt
and communicate a credible plan for the enforcement of judgments of the
European Court of Human Rights regarding property rights. Most of the Ombudsman’s
recommendations on ill-treatment were addressed by prisons and the State Police;
the key priority regarding the treatment of detainees was met.

4.24. 
Chapter 24: Justice, freedom and security

In the area of migration policy,
progress continued on gathering and publishing analytical information on legal
and irregular migration. Implementation of the readmission agreement has
continued. In 2012, 10 129 return cases were recorded, continuing the
declining trend that began after the entry into force of visa liberalisation.
However, the technical and financial resources of the Border and Migration
Police (BMP) need to be strengthened in order to control growing irregular
migration flows to Albania. Work on the preparation of a new national migration
strategy has not started yet. The strategy and action plan for returned
migrants should be implemented and its institutions supported. Preparations in
this area are at an early stage.

A new Law on asylum has been
prepared. By May 2013, Albania had granted asylum to 89 individuals, with 150
applications pending. No ID documents are yet issued to refugees and persons
granted complementary protection. The pre-screening process at the border needs
to be strengthened in view of the growing migratory pressures and to provide
effective international protection to asylum seekers. Preparations are
moderately advanced.

As regards visa policy, a new Law on
foreigners was adopted in March, aiming to approximate the acquis on
short-term visa policy. However, the country has only partially aligned its
legislation with the EU positive and negative lists contained in Regulation
539/2001. Implementation of the visa-free regime with the EU continued smoothly
overall. Although the majority of travellers to the Schengen areas are bona
fide, a number have abused the visa-free regime by lodging manifestly unfounded
asylum applications. As in the previous periods, seasonal peaks of asylum
seekers continued to be registered. This confirms that targeted measures have
to be further pursued and be intensified, among others: public campaigns,
investigations on facilitators, long-term policies to improve social and
economic inclusion of the most vulnerable groups of the population most likely
to migrate, including Roma. Further efforts in these areas need to continue
systematically and be properly funded. The Commission will submit its regular
report to the European Parliament and Council by the end of 2013. Preparations
in this area are moderately advanced.

In the area of external borders and
Schengen, three joint border control agreements were signed in April with
Kosovo. A Joint Police Cooperation Centre was established and started its
operations at the Morina border crossing point in June.
Regular joint and synchronised BMP patrols are operated
with Kosovo. The problems stemming from the lack of an information exchange
interface between the Kosovo (BMS) and Albanian (TIMS) Border Police IT systems
have been solved. An agreement with the former Yugoslav Republic of Macedonia
was signed in November to establish a new joint border control point. The ban
on speedboats expired in March. The risk assessment capacity of the BMP has
improved at local and central level. Practical cooperation with Frontex in the
field of border management and security is consolidated, in particular the
Western Balkans Risk Analysis Network (WBRAN), trainings and joint operations. Cooperation
and coordination among the institutions involved in managing the blue border
should be stepped up. The financial sustainability of surveillance mechanisms
still needs to be ensured. A new integrated border management strategy 2014-20
and action plan are being finalised. The Interinstitutional Maritime Operations
Centre (IMOC) is now connected to the MEMEX criminal intelligence information
system. Coordination and cooperation among institutions which are part of IMOC
needs to be strengthened and its operational capacity should be ensured through
appropriate planning of budgetary resources. IMOC risk assessment needs to take
account of the expiry of the speedboat ban. Preparations in this area are
advancing.

In the area of judicial cooperation in civil
and criminal matters, implementation of the Third Additional Protocol to
the European Convention on Extradition has started. Cooperation agreements were
signed with Austria and the United Kingdom. Preparations for concluding a
cooperation agreement with Eurojust have not progressed, but the data
protection legislation is currently under assessment. Albania ratified the
Convention of 23 November 2007 on the international recovery of child support
and other forms of family maintenance, which has entered into force on 1
January 2013. Preparations in this area are at an early stage.

In the field of police cooperation and
the fight against organised crime — one of the key priorities set in the
Commission’s Opinion — there has been progress. International police
cooperation has continued to provide good results in terms of police
operations, arrests and cooperation in investigations, including on criminal
assets. Albanian police and the prosecutor’s office have been involved in
increased cooperation, including with regard to criminal intelligence.

In January, a memorandum to strengthen
cooperation between the institutions involved in the fight against organised
crime and financing of terrorism was concluded. The number of assets
investigations and cases sent to the prosecutor has increased. Joint training
activities for police officers and prosecution officials were held, including
on issues relating to asset seizures and cybercrime. Cooperation between the
Financial Investigative Units (FIUs) and the police has improved. A new
strategy on organised crime 2013-2020 and the Action Plan 2013-2016 were
adopted in July. Nevertheless, organised crime remains a serious concern in
Albania. Problems persist regarding the implementation of the ‘anti-mafia law’,
in particular with the confiscation of seized assets. Proactive investigations
into wealth originating from criminal activities abroad but re-invested in
Albania need to be stepped up. Cooperation between the police and the General
Prosecutor’s Office (GPO) needs to be improved and the capacity of the police
to respond appropriately and in due time to prosecutors’ requests for the use
of special investigative techniques should be strengthened. The number of
prosecutors in the Serious Crimes Prosecution Office needs to be increased and
technical skills in specialised areas such as cybercrime and financial
investigations upgraded. The harmonisation of statistics across institutions
for the track record of investigations, prosecutions and convictions needs to
be improved. The operational capacity of the forensic laboratory, especially
regarding DNA interpretation and the DNA database, needs to be enhanced. The
capacity to obtain the best evidence possible for court convictions by
improving the capacity of the police and law enforcement agencies to draft
quality reports should be improved.

A cooperation agreement with CEPOL was
signed in May. An Albanian liaison officer, responsible for supporting contacts
between the Albanian Ministry of the Interior and Europol and for facilitating
the exchange of information, is assigned to Europol headquarters. An
operational agreement with Europol is awaiting signature.

The organisational set-up for witness
protection in the police has been considerably enhanced by the creation of a flexible
operational unit, the streamlining and stricter regulation of protection
programmes and measures to ensure the financial autonomy and confidentiality of
operations. A comprehensive training programme has been carried out.

As regards the fight against money
laundering, the recommendations of the last Moneyval evaluation round have
been adequately addressed and the ‘compliance-enhancing procedure’ has been
lifted. A technical manual on how to conduct money laundering investigations
was published and delivered to all bodies involved in the investigation cycle.
There has been an increase in the number of registered money laundering cases.
During the first six months of 2013 convictions doubled to reach 12 at first
instance courts compared to the same period in 2012; 5 convictions were passed
at second instance courts compared to 3 during the same timeframe in 2012.
However, the number of convictions for money laundering remains low. The
implementation of the law on anti-money laundering is weak and a track record
of high-level cases is still to be ensured.

With regard to the fight against trafficking
in human beings, recent amendments to the Criminal Code address the issue
of internal trafficking, and criminalise the use of services of the victims.
The Office of the National Anti-Trafficking Coordinator (ONATC) was actively
engaged within the joint working group established between the Ministry of
Interior, the General Prosecutor’s Office and the Ministry of Justice to
discuss concrete trafficking cases in order to improve investigations and trial
proceedings. Further strengthening of the ONATC is required. Police
investigations and the use of special investigative means against trafficking
in adults and minors show a positive trend. Yet, Albania remains a source
country for trafficked adults and minors, including forced begging of children.
Internal trafficking remains a concern and proactive investigations need to be
further stepped up. A comprehensive, multi-disciplinary and victim-oriented
approach to trafficking in human beings still needs to be developed and the
identification of victims needs to be improved. Albanian authorities should
strengthen the coordination and referral mechanism and ensure that victims have
unhindered access to assistance, support and protection, including
re-integration upon return. It is essential that efforts on prevention and
addressing demand of trafficking in human beings be stepped up. Transposition
of international conventions relating to the fight against human trafficking
should be completed.

As regards the fight against cybercrime,
the Albanian Cyber Incident Response Agency (ALCIRT) was established in
January. A cybercrime unit within the police has been established. However, a
cybersecurity strategy has not yet been finalised and there is a need for
training and specialisation of the police and prosecution officials in this
area. The number of prosecutions for cybercrime increased in 2012 but is still
low.

Regarding the human resources of the
police, gender balance has continued to improve through increased recruitments
of female police officers. Human resource management based on transparent and
merit-based criteria needs to be further improved. Internal control standards
to fight corruption and mismanagement should be further enhanced.

Albania has continued to implement the
strategy and action plan on the fight against terrorism. Albania should
address the Financial Action Task Force recommendations on terrorist assets and
international cooperation related to terrorism financing.

Regarding cooperation in the field of
drugs, cooperation with EMCDDA has continued and Albania actively
participated in the different training sessions organised. Seizures and
prosecutions increased due to effective use of new equipment and tools,
effective risk analysis and international cooperation. For the period September
2012 to May 2013, successful police operations resulted in the seizure of 70 kg
of heroin, 2.27 kg of cocaine and 20 674 kg of marijuana (in
comparison to 58 kg of heroin, 4.5 kg of cocaine and 11 685 kg
of marijuana for the much longer period from September 2011 to August 2012). Green
and blue border control has improved, leading to several high-profile seizures
and arrests. These efforts need to be enhanced, including by stepping up threat
assessments and international cooperation. A national action plan and an
operational plan to address in particular the cultivation of narcotic plants,
including cannabis, were adopted in March. These need to be fully implemented
to achieve sustainable results in the fight against cultivation and trafficking
of cannabis, which remains a serious threat.

As regards customs cooperation, a
24-hour digital camera monitoring system has been installed and is operational.
The number of investigations of customs officials increased as compared with
previous years (see Chapter 29 — Customs union).

For details of measures against counterfeiting
of the euro, see Chapter 32 — Financial control.

Conclusion

Albania has made further progress in the
area of justice, freedom and security, in particular in border management, and
in the fight against organised crime, money laundering and drugs trafficking.
More efforts are needed to enhance cooperation between law enforcement
institutions, and to establish a solid and convincing track record of proactive
criminal and financial investigations, prosecutions and convictions.
Appropriate budget planning and allocations are crucial to sustain all
institutions involved in border control and the fight against organised crime.
A migration strategy has not yet been adopted. Overall, preparations in this
field are advancing.

4.25. 
Chapter 25: Science and research

As regards research and innovation
policy, some actions to stimulate innovation and to strengthen human
capital building have been taken. The Agency for Research, Technology and
Innovation (ARTI) has stepped up the actions to promote participation in EU
research programmes but overall the success rate is still very low. The
national budget for research slightly increased but the level of investment in
research and technological development is still very low. Increased financial
resources are required in particular to strengthen the capacities and modernise
infrastructure.

With respect to Albania’s participation in
the EU Seventh research Framework Programme (FP7), ARTI has increased
the promotion efforts and support for the scientific community but the overall
level of participation and success rate (13%) is still very low. Due to
budgetary constraints, ARTI’s participation in EU networking events has
decreased. ARTI engaged in bilateral cooperation with Italy, Greece,
Montenegro, the former Yugoslav Republic of Macedonia, Slovenia and Turkey. For
the first time information day on the Joint Research Centre took place in Tirana.
ARTI started preparations for participation in the EU’s next research framework
programme Horizon 2020. As regards integration into the European Research
Area (ERA), some steps have been taken to build up human capital, mainly
through increasing the resources of the Fund for Excellence and extending the
Brain Gain programme in cooperation with the UNDP. ARTI is successfully
implementing the Euraxess portal. Funding research on Albanian language and
history has been recognised as a priority theme. Due to the lack of reliable
statistics it remains difficult to establish the level of investment in
research as a share of GDP which is around 0.35% of GDP. The contribution of
the private sector and SMEs in research and technological development in
particular is very limited. With respect to the Innovation Union, the Business
Relay and Innovation Centre within the Albanian Investment and Development
Agency (BRIC/AIDA) continued to stimulate innovation by entrepreneurs with an
increasing number of technology audits and measures targeting SMEs.

Conclusion

There has been
very little progress in the area of science and research. Further capacity
building and investment in research are required to ensure integration into the
European Research Area and contributing to the Innovation Union. Increased
efforts for successful participation in the EU’s next research framework
programme Horizon 2020 will also be necessary. Overall, preparations are not
sufficiently advanced.

4.26. 
Chapter 26: Education and culture

In the area of education, training and
youth, legislation implementing the Law on pre-university education remains
to be adopted. Teachers have been given additional training and the National
Inspectorate for Pre-University Education has continued its inspections in kindergartens,
elementary schools and secondary schools. New learning standards and syllabuses
were introduced in secondary education and the state ‘matura‘ procedure was
made more transparent.

A strategy for vocational education and
lifelong learning needs to be adopted. The number of students enrolled on
vocational and educational (VET) courses in the year 2012-13 increased by 23%
compared to the previous year. Existing VET schools are not properly maintained
due to the lack of financial resources. Participation of the private sector,
which is a key factor for a successful VET reform, is still insufficient. The
low participation in VET contrasts with the economic demand for skilled
workers.

The accreditation agency has continued to
evaluate and inspect higher education institutions and programmes. While
enrolment levels in higher education have increased in the last decade, the
qualifications provided do not match the country’s economy; a skills needs
analysis is required. No progress has been made with regard to the higher
education reform, the performance and ranking scheme and development of the
Albanian Qualifications Framework (AQF). Alignment in this area is uneven.

Educational provision at all levels
requires to be improved and meet labour market needs. As demonstrated by the
PISA results, the education system requires reform, including teacher training,
quality assurance measures, transparency, practical learning experiences and
links with the business sector.

In July 2013, Albania signed a memorandum of
understanding for its participation, in the budget year 2013, in the
Centralised Actions of the EU Lifelong Learning Programme.

In the area of culture, the Ministry
of Education and Science has promoted the Culture Programme, in particular
through public information sessions. Participation in the Europe for Citizens
programme has increased. Rehabilitation of important cultural heritage sites
took place in Shkodra, Elbasan, Berat and Korca. The new 2012-20 strategy on
cultural heritage remains to be adopted.

Conclusion

There was
little progress in the field of education and culture, in particular as regards
participation in European programmes. Overall, preparations are moderately
advanced. Improvement in the overall quality and relevance of education provision
needs to be pursued.

4.27. 
Chapter 27: Environment and climate change

As regards the environment, in the
area of horizontal legislation the government prepared a new
cross-cutting environmental strategy for 2013-17; a solid budgetary allocation
is necessary for its implementation. The Law on strategic environmental
assessment, aimed at aligning with the Strategic Environmental Assessment
Directive, was adopted in February. The Law on environmental impact assessment
and the Law on environmental permits are not aligned with the Environmental
Impact Assessment Directive. Non-implementation of the environmental
legislation continues to constitute a major problem. Environmental impact
assessments are not systematically carried out or followed before infrastructure
projects are launched. Public access to information and participation in
decision making are not properly ensured.

A draft Law on ambient air quality
and implementing legislation on air quality assessment and requirements on
certain related pollutants have not yet been adopted. An amendment to the Law
on national taxes adopted in April 2013, which reduces taxes on used cars, is
not in line with the acquis on environmental protection. There is still
no reliable air quality monitoring programme, except in Tirana. The maintenance
of the air quality stations in other cities is not fully ensured. The Tirana
air management plan needs to be adopted.

Implementing legislation on waste
management was adopted and management plans were prepared in Tirana, Lezha
and Shkodra. Waste management remains a serious cause of concern in Albania. Separation of waste has not yet started with
few exceptions and recycling
rates are very low. The recycling industry is nascent and has to import most of
the required raw materials from outside the country. Municipalities have very weak capacities to manage waste, including at the end
destination. Most of the waste is still disposed of
unsafely in legal and illegal
dumpsites or burned. To date, only two sanitary landfills complying with EU
standards exist. The construction of one landfill in
Korça is under way. There are still no facilities for hazardous, medical and
construction waste, and no clear procedure for the management and control of
landfills. New investments in the area of waste should focus more on waste
separation and recycling. In the area of water quality, the Law on
integrated water management was adopted in November and a water supply and
sewerage master plan was finalised in April. Implementation of the acquis remains
at a very early stage. Centralised wastewater collection only exists in the
larger cities. Four wastewater treatment plants are functioning while three
other plants are completed but not yet operational and two more are under
construction. Current financial and human investments are not sufficient to
ensure the proper functioning and maintenance of existing wastewater treatment
plants. The capacity of public water companies to manage basic services in
delivering drinking water and waste water treatment is weak. Development of
river basin management plans, including at regional level, is at an early
stage.

In the field of nature
protection, the proportion of protected territory was increased by 0.75% to
reach 15.83%. However, the protection of those areas still needs to be
guaranteed. A new Ramsar site was designated in June. The rules adopted in 2011
for the establishment of zones of specific protection in the framework of
Natura 2000 have not yet been implemented. Only a few steps have been taken
following the acceptance by the Bern Convention in 2011 of the candidate sites
proposed by Albania for the Emerald Network. Illegal
activities such as hunting, wood cutting and construction are quite frequent in
the protected areas and the administrative
capacity of the inspectorates to fight them remains weak.

As regards
industrial pollution control and risk management, Albania ratified in
September 2012 the Protocol on Preparedness, Response and Cooperation to
Pollution Incidents by Hazardous and Noxious Substances (OPRC-HNS).

As regards
environmental noise policies, a permanent task force has been
established to deal with noise pollution in urban centres and costal tourist
areas but enforcement of its decisions remains challenging. There were no
developments in the chemicals and civil protection sectors.

Regarding climate
change, a comprehensive country-wide climate policy and strategy are
lacking. Albania regularly associated itself with EU positions in the
international context. While having associated itself with the Copenhagen
accord, it has not yet put forward a mitigation commitment by 2020. Albania
should consider taking mitigation commitments consistent with those of the EU
and its Member States for the purpose of the post-2020 climate agreement to be
reached by 2015. In line with the EU Green Paper ‘A 2030 framework for climate
and energy policies’, the country needs to start reflecting on its climate and
energy framework for 2030.

As regards alignment with the climate acquis,
legislation has been adopted in the field of fuel quality. The country
identified 13 stationary installations for the purpose of future implementation
of an emissions trading system. Significant efforts are still required to
enhance the country’s monitoring, reporting and verification capacity. Albania
participated regularly in the climate component of the Regional Environmental
Network for Accession (RENA). Climate awareness at all levels remains low and
cooperation between all relevant stakeholders requires further strengthening.

As regards administrative capacity in
the environment sector, the number of staff in the National Environmental
Agency and the State Environmental Inspectorate was increased. The Environment
Ministry’s capacity for programming and implementation remains weak. Further
efforts are required to strengthen law enforcement, including training of
judges, prosecutors and police on environmental issues. Local authorities have
scarce financial and administrative resources to develop the required
infrastructure and services. The limited resources of
the inspection service do not provide a credible guarantee that infringements
are properly monitored on the ground and punished. Sufficient
funding for the environment sector is not provided in the budget and
coordination between ministries and the local government is weak. As regards
climate change, the limited administrative capacity and weak interinstitutional
cooperation are delaying the preparation and implementation of a climate policy
in line with the acquis. The administrative set-up on climate change
requires considerable strengthening in order to address the significant
capacity, cooperation and coordination needs.

Conclusion

There has been
little progress in the fields of environment and climate change. Alignment with
the acquis has progressed but further efforts are urgently needed to
ensure proper implementation and enforcement of legislation. Resources remain
limited and substantial investments are needed. Public consultation on public
investments and participation in legislative initiatives need to be fostered.
Substantial efforts and political will are required to develop a more strategic
approach for the country and to strengthen administrative capacity and interinstitutional cooperation.
Preparations in the fields of the environment and climate change are at an
early stage.

4.28. 
Chapter 28: Consumer and health protection

In the area of consumer protection,
with regard to horizontal aspects, the 2013-20 consumer protection and
market surveillance strategy is awaiting adoption. The Consumer Protection
Commission (CPC) has held regular meetings and has handled complaints in the
fields of university education, the electricity sector and telecommunications.
A gap analysis on the alignment of Albanian legislation with the acquis
in the field of consumer protection was finalised, including components on
health protection. The CPC and the Consumer Protection Unit continued their
consumer awareness activities. The online complaint handling system has not
generated effective complaints due to the poor information provided to users.
Information on the CPC official website is not regularly updated.

In the area of product safety-related
issues, in March, amendments to several laws were
adopted with the aim of aligning legislation with the new provisions of the
Inspection Law, including on the general safety of non-food products, marketing
and market surveillance, and metrology. Implementing legislation has been
prepared to regulate the organisation of the Inspectorate. Technical
regulations aimed at aligning with the acquis on child-resistant
lighters and novelty lighters were adopted. Efforts were also made to
align with the acquis in the field of dangerous imitations. The market
inspectorate is not yet in place.

There were no developments as regards non-safety
related issues.

The lack of capacity in healthcare
management, low public spending and corruption has slowed down progress in the
area of public health. Primary healthcare lacks appropriate funding and
human resources. The coverage of insurance-based care
is still very low. The public hospital sector remains
underdeveloped whereas the private sector is growing without proper regulation.
The Ministry of Health signed a contract in January for the establishment of a National Electronic Health Record (NEHR)
system but the necessary financial resources still need to be secured. The
draft e-health strategy has not yet been adopted.

In the area of tobacco control, the
Law on health protection against tobacco products, aimed at enforcing more effectively
the tobacco ban in public places, was amended in February. A national
anti-tobacco communication campaign was carried out in schools. The State
Sanitary Inspectorate continued to perform inspections in the country. But the
ban on smoking in public places and institutions is not respected and tobacco
products continue to be sold in the streets, in particular by minors.

With regard to communicable diseases,
a new draft Law on the control of infectious diseases remains to be adopted and
national guidelines on antimicrobial resistance are being drafted. At the
national level, reported immunisation coverage for 2012 was over 98%. The
Ministry of Health established a national committee and a secretariat for
reactions after vaccination. Awareness-raising activities, mainly targeting
Roma, were carried out. Implementing legislation ensuring the right to health
for persons and children living with HIV/AIDS and people at risk is still
awaiting adoption. Laboratory capacity requires
improvement.

In the area of blood, tissues, cells and
organs, a regulation on the functioning of tissue, cells and organ banks,
including the activities of procurement, selection, testing, storage and
distribution of substances of human origin for medical treatment, was adopted
in September 2012.A new two-year project on ‘Prevention of infection
transmission through safer blood and components‘ started in 2013.

A national strategy and action plan 2013–22
for the development of mental health services was adopted in February.
The lack of doctors specialised in treating persons with intellectual
disabilities remains a challenge. There has been no progress towards the
development of community-based mental health services.

As regards drug abuse prevention, an
action plan on drugs control and data system for
reporting on drugs is being developed. The National
Information Centre for Drugs has completed a national overview on drugs, based on European Monitoring Centre for
Drugs and Drug Addiction (EMCDDA) standards. The
Institute of Public Health has signed a MoU with relevant drug treatment units.
Some steps were taken to reduce health inequalities,
with patronage nursing for Roma children and home visits to Roma families. Access to healthcare improved through registration of Roma children
and women and the adoption of a joint action plan between the Municipality of
Tirana and the Ministry of Health. The pace of delivery
of health cards to Roma families is slow. Equal access to healthcare in rural
areas is not ensured, especially for the most vulnerable groups. Nutrition
education programmes have been initiated and healthy eating habits for children
promoted, nevertheless child malnutrition remains a serious matter of concern.
Steps have been taken to reduce alcohol-related harm with the adoption
of the Audiovisual Law, which regulates the broadcasting of commercial
communications on alcoholic beverages. In the field of cancer screening,
several awareness-raising campaigns and training activities for the health
workforce have taken place and guidelines have been adopted for establishing
palliative care services. Preparations started to establish cervical cancer
screening. Administrative capacity requires considerable strengthening to
ensure proper implementation.

Conclusion

There has been
some progress in the area of consumer and health protection. The establishment
of a proper market surveillance system has been delayed. The health sector
remains substantially underfunded and understaffed, hampering the proper
implementation of the public health legislation and policies, especially in the
field of primary healthcare. Overall, preparations are starting.

4.29. 
Chapter 29: Customs union

In the field of customs legislation,
Albania updated its nomenclature of goods in line with the 2013 version of the
EU Combined Nomenclature. It ratified the Regional Convention on Pan-Euro-Med
preferential rules of origin and implemented the ATA Convention on Temporary
Importation. The capacity for implementing and overall awareness of the
procedures of the ATA Convention should be enhanced. The rate of use of
transaction value increased but still remains low by EU standards. Further
efforts are required on introducing simplified procedures, security measures
and the concept of authorised economic operator. Unified procedures should be
implemented throughout the country to reduce the scope for interpretation by
customs officials. The new Customs Code has not yet been adopted.

As regards administrative and
operational capacity, Albania started participating in the EU Customs 2013
programme. The Tax and Customs Academy started working in May with the customs’
training strategy as part of its programme. The new Tirana customs terminal was
inaugurated and the infrastructure at border crossing points is being improved.
The capacity and efficiency of the customs laboratory were enhanced. The
General Directorate of Customs (GDC) stepped up its cooperation with other
institutions, including as regards the detection of radioactive materials.

An internal regulation on security policy for
the customs IT system was adopted. Electronic payments
of customs dues and fees and online declarations of
excise were introduced. Electronic
exchange of data with the Kosovo customs was made operational. Further efforts
are required to enhance the online interoperability of the GDC, including with the
EU customs and excise systems. The IT strategy is not yet aligned with the
business strategy.

The GDC adopted the internal strategy on
intellectual property rights and stepped up its efforts to prevent fake
products entering Albania (see also Chapter7 — Intellectual property).
The Internal and Anti-corruption Investigation Directorate increased its
activities and reported breaches of the ethical code by customs officials to
the disciplinary committee. The 24-hour camera surveillance system at border
crossing points was extended.

Conclusion

There has been
some progress in the area of customs union, particularly as regards tariff,
origin and temporary importation. The customs administration stepped up its
internal investigation activities and the IT system was improved. Further
efforts are required as regards IT compatibility with the EU and trade
facilitation and simplified procedures. The adoption of the new Customs Code
should be speeded up. Transaction value needs to be used more extensively in
line with EU standards. Overall, preparations are moderately advanced.

4.30. 
Chapter 30: External relations

In the area of the common commercial
policy, Albania has continued to coordinate its policies with the European
Union positions towards third countries, among other things in the WTO and
during Doha Development Agenda negotiations.

Administrative capacity for dealing with
trade policy issues has increased. A legislative gap analysis was adopted and
training was delivered to relevant line institutions. Training curricula on
trade-related matters, including the EU common commercial policy, the WTO and
international law, were finalised and are now included in the programme of the
Training Institute for Public Administration. However, further efforts are
required in order to improve coordination among state institutions involved in
trade policy matters.

In the area of bilateral
agreements with third countries, Albania held the CEFTA chair during 2012.
Bilateral agreements on economic cooperation were signed with Azerbaijan and
Bulgaria. Albania adopted an agreement on trade facilitation with Kosovo.

Conclusion

There has been some progress as regards
training on the EU common commercial policy, mainly with regard to administrative
capacity and interinstitutional coordination on trade policy. Albania
maintained good cooperation within WTO and CEFTA. Overall, preparations are
moderately advanced.

4.31. 
Chapter 31: Foreign, security and defence policy

Albania has continued to
pursue the regular political dialogue with the EU on foreign security
policy issues. (Concerning relations with other enlargement countries and
Member States, see Political criteria, 2.3 — Regional issues and international
obligations.)

As regards the common
foreign and security policy (CFSP), Albania aligned itself, when invited,
with all relevant EU declarations and Council decisions (100% alignment).
Albania also aligned itself with EU positions at the United Nations, and
co-sponsored EU resolutions. (As regards the International Criminal Court,
see Political criteria, 2.3 — Regional issues and international obligations.)

Albania implemented the EU’s
restrictive measures
applied to third countries, introduced
by Council Decisions.

On non-proliferation of weapons of mass
destruction and disarmament issues, Albania has continued
implementing the action plan for the destruction of surplus weaponry and has
endorsed an EU-Western Balkans joint declaration on enhancing the fight against
illicit trafficking of firearms and ammunition in the Western Balkans. A new
Law on weapons, aimed at aligning with the acquis, was adopted in March.
The online register of weapons and ammunition under the management of the State
Police is not yet operational. In June, Albania signed the UN Arms Trade
Treaty.

Albania has engaged in cooperation
with international organisations (UN, OSCE, Council of Europe, etc.). From
May to October 2012, it held the rotating chairmanship of the Committee
of Ministers of the Council of Europe. Albania
was elected a member of the UN Economic and Social Council for the period
2013-15.

On security measures,
the security agreement with the EU on the exchange and mutual protection of
classified information has not yet been signed.

Albania continued to
participate in civil and military crisis management operations under the
common security and defence policy. The Framework Agreement on the participation of Albania in EU crisis
management operations entered into force on 1 February. Albania has continued
to take part in the EUFOR Althea mission in Bosnia and Herzegovina (one general
staff member). Participation of Albania in the EU Training Mission in
Uganda was confirmed in May.

Conclusion

Albania
continued its alignment with the acquis in the field of foreign, security
and defence policy. Efforts are still needed to complete the online register of
weapons and ammunition under the management of the Albanian State Police.
Overall, preparations in this field remain on track.

4.32. 
Chapter 32: Financial control

In the area of public internal financial
control (PIFC), the Central Harmonisation Unit for Financial Management and
Control (CHU/FMC) has further trained budget users on FMC implementation in
line with the legal requirements. Reform of the government financial information
system and the creation of a finance director role are ongoing on a pilot
basis. There is, however, little delegation by senior officials and,
consequently, budget users continue to understand managerial accountability and
principles such as risk management in a narrow sense. Procedures for financial
inspection have still to be adopted. The Public Financial Inspection
Directorate in the Ministry of Finance is staffed on a need basis and
inspectors should be further trained. The Central Harmonisation Unit for
Internal Audit (CHU/IA) has continued to focus primarily on the implementation
of the internal audit certification programme. In
relation to Internal Audit training, the CHU/IA should oversee and steer
training policy and provide quality assurance, rather than act as a training
provider.

In the area of external audit,
organisational changes and new procedures have been introduced to boost the
efficiency of the State Audit Institution (SAI). Training and public relations
activities have increased and bilateral cooperation with other countries has
been enhanced. Performance audit work has restarted. The 2013‐17 strategic
development plan is in preparation. However, the amendments to the SAI Law are
since 2012 under scrutiny of the parliament and remain to be adopted by a
three-fifths majority. Currently, there is no systematic parliamentary
follow-up to the SAI’s reports.

In the area of protection
of the EU’s financial interests, the recruitment of staff for the Public
Financial Inspection Directorate, which serves as the contact point for
cooperation with the European Commission, has not been completed.
Administrative capacity still needs to be developed.

As regards the protection of the euro
against counterfeiting, the Bank of Albania has adopted a regulation on
authenticity assurance of Albanian banknotes and it has set up a forensic
laboratory that will examine all banknotes suspected of being counterfeit,
including euro banknotes.

Conclusion

There has been
some progress in the area of financial control. The legal framework for PIFC is
in place, but further efforts are needed to increase capacity for
implementation. In the area of external audit, amendments to the SAI Law need
to be adopted. Overall, preparations are moderately advanced.

4.33. 
Chapter 33: Financial and budgetary provisions

There were no developments in the fields of
traditional own resources, the Gross National Income (GNI) resource or
the VAT-based resource. (For progress in the underlying policy areas,
see Chapters 16 — Taxation; 18 — Statistics; 29 — Customs union; and
32 — Financial control.)

As regards administrative infrastructure,
Albania has in place the main infrastructure for the underlying policy areas
indirectly affecting the own resources system. However, the institutions and
the coordinating body in charge of preparing the administrative conditions for
applying the own resources rules are not yet in place and will need to be
established in due course. In addition, effective tools to fight tax evasion
and fraud and to shrink the informal economy need to be further developed.

Conclusion

In the area of
financial and budgetary provisions, a coordinating body will have to be set up
in due course to steer pre-accession preparations in the own resources field.
Overall, preparations in the area of financial and budgetary provisions are at
an early stage.

Statistical Annex

STATISTICAL DATA || || || || || || || ||

Albania || || || || || ||

|| || || || || || ||

Basic data || Note || 2001 || 2008 || 2009 || 2010 || 2011 || 2012

Population (thousand) || 1) || 3 068e || 2 927e || 2 898e || 2 870e || 2 843e || 2 816e

Total area of the country (km2) || || 28 750 || 28 750 || 28 750 || 28 750 || 28 750 || 28 750

|| || || || || || ||

National accounts || Note || 2001 || 2008 || 2009 || 2010 || 2011 || 2012

Gross domestic product (GDP) (million national currency) || 2) || 583 369 || 1 089 293 || 1 148 082 || 1 222 462 || 1 282 255p || 1 302 799ep

GDP (million euro) || || 4 541 || 8 870 || 8 694 || 8 872 || 9 137 || 9 370ep

GDP (euro per capita) || 3) || 1 482 || 3 045 || 3 014 || 3 106p || 3 229 || 3 344ep

GDP (in Purchasing Power Standards (PPS) per capita) || || : || 6 980e || 7 154e || 7 385e || 7 584e || :

GDP per capita in PPS (EU-27 = 100) || || : || 26 || 28 || 30pb || : || :

Real GDP growth rate (growth rate of GDP volume, national currency,% change on previous year) || 4) || 7.9 || 7.5 || 3.3 || 3.7p || 3.1p || 1.6ep

Employment growth (national accounts,% change on previous year) || || : || : || : || : || : || :

Labour productivity growth: GDP growth per person employed (% change on previous year) || || 30.3 || 19.0 || 4.4 || : || : || :

Real unit labour cost growth (national accounts,% change on previous year) || || : || : || : || : || : || :

Labour productivity per person employed (GDP in PPS per person employed, EU-27 = 100) || || : || : || : || : || : || :

Gross value added by main sectors (%) || || || || || || ||

Agriculture and fisheries || || 23.6 || 18.7 || 18.7 || 19.3 || 19.5 || 20.6

Industry || || 7.3 || 9.8 || 10.1 || 11.7 || 12.0 || 11.3

Construction || || 10.4 || 14.9 || 14.2 || 11.0 || 10.7 || 8.6

Services || || 58.6 || 56.6 || 57.0 || 58.0 || 57.8 || 59.5

Final consumption expenditure, as a share of GDP (%) || || 80.9 || 89.5ep || 90.1ep || 86.1ep || 85.7ep || :

Gross fixed capital formation, as a share of GDP (%) || || 38.4 || 40.9ep || 37.9ep || 31.2ep || 31.2ep || :

Changes in inventories, as a share of GDP (%) || || 1.3 || -3.8ep || -2.9ep || 3.5ep || 6.2ep || :

Exports of goods and services, relative to GDP (%) || || 18.4 || 29.4 || 28.4 || 32.9p || 34.5p || 33.9p

Imports of goods and services, relative to GDP (%) || || 39.0 || 56.0 || 53.6 || 53.8p || 57.6p || 53.2p

|| || || || || || ||

Industry || Note || 2001 || 2008 || 2009 || 2010 || 2011 || 2012

Industrial production volume index (2010=100) || 5) || : || 135.2 || 152.8 || 182.2 || 212.5 || 218.7

|| || || || || || ||

Inflation rate || Note || 2001 || 2008 || 2009 || 2010 || 2011 || 2012

Annual average inflation rate (CPI,% change on previous year) || || 3.5 || 2.2 || 2.3 || 3.6 || 3.4 || 1.9

|| || || || || || ||

Balance of payments || Note || 2001 || 2008 || 2009 || 2010 || 2011 || 2012

Balance of payments: current account total (million euro) || || -316 || -1 381 || -1 330 || -1 019 || -1 185 || -1 021

Balance of payments current account: trade balance (million euro) || || -1 149 || -2 431 || -2 304 || -2 083 || -2 242 || -1 999

Balance of payments current account: net services (million euro) || || 100 || 69 || 174 || 232 || 135 || 195

Balance of payments current account: net income (million euro) || || 150 || 44 || -138 || -90 || 23 || -89

Balance of payments current account: net current transfers (million euro) || || 583 || 937 || 938 || 922 || 899 || 872

of which government transfers (million euro) || || 31 || 31 || 27 || 45 || 21 || 25

Net foreign direct investment (FDI) (million euro) || || 231 || 610 || 689 || 788 || 715 || 727

Foreign direct investment (FDI) abroad (million euro) || || 0 || -55 || -28 || -5 || -30 || -18

of which FDI of the reporting economy in EU-27 countries (million euro) || || : || : || : || : || : || :

Foreign direct investment (FDI) in the reporting economy (million euro) || || 231 || 665 || 717 || 793 || 745 || 745

of which FDI of EU-27 countries in the reporting economy (million euro) || || : || : || : || : || : || :

|| || || || || || ||

Public finance || Note || 2001 || 2008 || 2009 || 2010 || 2011 || 2012

General government deficit/surplus, relative to GDP (%) || || -6.9 || -5.0 || -4.9 || -3.1 || -3.5 || -3.4e

General government debt relative to GDP (%) || || 58.5 || 54.7 || 59.5 || 58.5 || 60.2 || 63.5

|| || || || || || ||

Financial indicators || Note || 2001 || 2008 || 2009 || 2010 || 2011 || 2012

Gross foreign debt of the whole economy, relative to GDP (%) || 6) || 17.2 || 37.6 || 41.3 || 46.2 || 52.5 || 56.5

Gross foreign debt of the whole economy, relative to total exports (%) || 7) || 93.1 || 128.0 || 142.4 || 140.2 || 152.1 || 166.5

Money supply: M1 (banknotes, coins, overnight deposits, million euro) || || 1 113 || 2 303 || 2 154 || 1 999 || 1 973 || 2 023

Money supply: M2 (M1 plus deposits with maturity up to two years, million euro) || || 2 376 || 4 520 || 4 378 || 4 387 || 4 611 || 4 816

Money supply: M3 (M2 plus marketable instruments, million euro) || || 3 069 || 6 643 || 6 599 || 7 114 || 7 626 || 8 080

Total credit by monetary financial institutions to residents (consolidated) (million euro) || || 217 || 3 227 || 3 335 || 3 506 || 3 862 || 3 990

Interest rates: day-to-day money rate, per annum (%) || || : || : || : || : || : || :

Lending interest rate (one year), per annum (%) || 8) || 11.9 || 11.8 || 12.5 || 11.3 || 11.2 || 10.3

Deposit interest rate (one year), per annum (%) || 9) || 7.8 || 6.9 || 6.8 || 6.4 || 5.9 || 5.4

euro exchange rates: average of period - 1 euro = ... national currency || || 128.470 || 122.800 || 132.060 || 137.790 || 140.331 || 139.040

Effective exchange rate index (2005=100) || || : || : || : || : || : || :

Value of reserve assets (including gold) (million euro) || || 834 || 1 694 || 1 650 || 1 905 || 1 912 || 1 972

|| || || || || || ||

External trade || Note || 2001 || 2008 || 2009 || 2010 || 2011 || 2012

Value of imports: all goods, all partners (million euro) || || 1 486 || 3 790 || 3 259 || 3 328 || 3 867 || 3 797

Value of exports: all goods, all partners (million euro) || || 340 || 684 || 780 || 1 169 || 1 400 || 1 531

Trade balance: all goods, all partners (million euro) || || -1 145 || -3 106 || -2 479 || -2 160 || -2 467 || -2 267

Terms of trade (export price index / import price index) || || 101.5 || 96.0 || 97.6 || 98.4 || 108.3 || 105.8

Share of exports to EU-27 countries in value of total exports (%) || || 91.2 || 75.8 || 79.2 || 70.2 || 72.7 || 75.4

Share of imports from EU-27 countries in value of total imports (%) || || 80.3 || 63.0 || 64.3 || 64.9 || 64.0 || 61.9

|| || || || || || ||

Demography || Note || 2001 || 2008 || 2009 || 2010 || 2011 || 2012

Natural growth rate: natural change (births minus deaths) (per 1000 inhabitants) || || 11.1e || 4.3e || 4.7e || 4.9e || 5.0e || 5.1e

Infant mortality rate: deaths of children under one year of age per 1000 live births || || 17.4e || 11.1e || 10.3e || 9.6e || 8.7e || 8.8e

Life expectancy at birth: male (years) || || : || 73.0e || 73.7e || 74.6e || 75.1e || 75.3e

Life expectancy at birth: female (years) || || : || 78.4e || 78.7e || 79.0e || 79.7e || 79.6e

|| || || || || || ||

Labour market || Note || 2001 || 2008 || 2009 || 2010 || 2011 || 2012

Economic activity rate (20-64): share of population aged 20-64 that is economically active (%) || 10) || 72.3 || 69.3e || 69.6e || 69.7e || 75.6e || 73.2e

- Employment rate (20-64): share of population aged 20-64 in employment (%) || 10) || 55.5 || 60.8e || 60.4e || 60.3e || 64.9e || 63.4e

Employment rate male (20-64) (%) || 10) || 70.6 || 72.1e || 73.2e || 71.5e || 84.0e || 83.3e

Employment rate female (20-64) (%) || 10) || 40.6 || 51.0e || 48.9e || 49.8e || 67.3e || 63.3e

Employment rate of older workers (55-64): share of population aged 55-64 in employment (%) || 10) || 27.5 || 44.0e || 48.9e || 48.3e || 54.7e || 57.7e

Employment by main sectors (%) || || || || || || ||

Agriculture || 10)11) || 50.6 || 44.6e || 44.1e || 41.8e || 45.4e || 51.1e

Industry || 11) || 7.1 || 9.3e || 10.0e || 11.0e || 10.6e || 10.9e

Construction || 11) || 6.6 || 8.5e || 9.9e || 9.9e || 8.2e || 6.5e

Services || 10)11) || 35.7 || 37.6e || 36.0e || 37.3e || 35.8e || 31.6e

Unemployment rate: share of labour force that is unemployed (%) || 10) || 22.8 || 13.0e || 13.8e || 14.0e || 13.9e || 13.9e

Share of male labour force that is unemployed (%) || 10) || 18.8 || 12.5e || 12.2e || 12.6e || 13.8e || 15.0e

Share of female labour force that is unemployed (%) || 10) || 28.4 || 13.5e || 15.9e || 15.9e || 14.1e || 12.5e

Unemployment rate of persons < 25 years: share of labour force aged <25 that is unemployed (%) || 10) || 35.5 || 27.2e || 27.2e || 30.5e || 23.6e || 27.9e

Long-term unemployment rate: share of labour force that is unemployed for 12 months and more (%) || 10) || : || 8.5e || 9.1e || 10.6e || 10.2e || 10.8e

|| || || || || || ||

Social cohesion || Note || 2001 || 2008 || 2009 || 2010 || 2011 || 2012

Average nominal monthly wages and salaries (national currency) || || 17 218.0 || 36 537.0 || 40 874.0 || 44 375.0 || 46 665.0 || 50 093.0

Index of real wages and salaries (index of nominal wages and salaries divided by the CPI/HICP) (2000=100) || || 11.6 || 91.7 || 109.8 || 116.1 || 123.5 || 138.2

- Early school leavers - Share of population aged 18-24 with at most lower secondary education and not in further education or training (%) || || : || 39.0e || 35.5e || 31.9e || 35.2e || 31.6e

|| || || || || || ||

Standard of living || Note || 2001 || 2008 || 2009 || 2010 || 2011 || 2012

Number of passenger cars per 1000 population || || 43.5e || 83.3 || 88.2 || 104.4 || 106.3p || 106.6

Number of subscriptions to cellular mobile telephone services per 1000 population || || 120.6e || 1 013.0e || 1 444.0e || 1 584.4 || 1 841.8 || :

|| || || || || || ||

Infrastructure || Note || 2001 || 2008 || 2009 || 2010 || 2011 || 2012

Density of railway network (lines in operation, per 1000 km2) || || 14.3 || 13.9 || 13.9 || 13.9 || 13.9 || 13.9

Length of motorways (km) || || : || : || : || : || : || :

|| || || || || || ||

Innovation and research || Note || 2001 || 2008 || 2009 || 2010 || 2011 || 2012

Spending on human resources (public expenditure on education in% of GDP) || || 3.3 || 3.5 || 3.4 || 3.5 || 3.3 || :

- Gross domestic expenditure on R&D in% of GDP || || : || : || : || : || : || :

Percentage of households who have Internet access at home (%) || || : || 3.4 || : || : || : || :

|| || || || || || ||

Environment || Note || 2001 || 2008 || 2009 || 2010 || 2011 || 2012

- Greenhouse gas emissions, CO2 equivalent (tons, 1990=100) || || : || : || : || : || : || :

Energy intensity of the economy (kg of oil equivalent per 1000 euro GDP) || || 386.5 || : || : || : || : || :

Electricity generated from renewable sources in% of gross electricity consumption || || : || : || : || : || : || :

Road share of inland freight transport (% of tonne-km) || || : || : || : || : || : || :

|| || || || || || ||

Energy || Note || 2001 || 2008 || 2009 || 2010 || 2011 || 2012

Primary production of all energy products (thousand TOE) || || 933 || 1 159 || 1 263 || 1 643 || 1 494 || 1 676

Primary production of crude oil (thousand TOE) || || 335 || 578 || 577 || 744 || 895 || 1 031

Primary production of hard coal and lignite (thousand TOE) || || 15 || 20 || 3 || 3 || 2 || 2

Primary production of natural gas (thousand TOE) || || 8 || 8 || 8 || 13 || 15 || 15

Net imports of all energy products (thousand TOE) || || 1 001 || 1 033 || 895 || 552 || 668 || 320

Gross inland energy consumption (thousand TOE) || || 1 934 || 2 119 || 2 104 || 2 106 || 2 162 || 2 014

Electricity generation (thousand GWh) || || 3.7 || 3.9 || 5.2 || 7.7 || 4.1 || 4.3

|| || || || || || ||

Agriculture || Note || 2001 || 2008 || 2009 || 2010 || 2011 || 2012

Agricultural production volume index of goods and services (producer prices, previous year=100) || || : || 107.4 || 102.0 || 107.3 || 3.9 || :

Total utilised agricultural area (thousand hectare) || || 1 139 || 1 121 || 1 138 || 1 201 || 1 201 || 1 201

Livestock: cattle (thousand heads, end of period) || || 708 || 541 || 494 || 493 || 492 || 498

Livestock: pigs (thousand heads, end of period) || || 106 || 161 || 160 || 164 || 163 || 159

Livestock: sheep and goats (thousand heads, end of period) || || 2 933 || 2 620 || 2 540 || 2 581 || 2 517 || 2 619

Production and utilisation of milk on the farm (total whole milk, thousand tonnes) || || 984 || 1 040 || 1 045 || 1 070 || 1 101 || 1 105

Crop production: cereals (including rice) (thousand tonnes, harvested production) || || 503 || 608 || 630 || 662 || 701 || :

Crop production: sugar beet (thousand tonnes, harvested production) || || 39 || :z || :z || :z || :z || :

Crop production: vegetables (thousand tonnes, harvested production) || 12) || 677 || 715 || 730 || 860 || 890 || :

: =
not available

:z
= not applicable

b =
break in series

e =
estimated value

p =
provisional

- =
Europe 2020 indicator

The balance of payments
sign conventions are used for FDI. For FDI abroad a minus sign means investment
abroad by the reporting economy exceeded its disinvestment in the period, while
an entry without sign means disinvestment exceeded investment. For FDI in the
reporting economy an entry without sign means that investment into the
reporting economy exceeded disinvestment, while a minus sign indicates that
disinvestment exceeded investment.

Footnotes:

1) The figures of the population are based on the calculation of retro projection made by INSTAT.

2) 2011, flash, annual estimation, GDP at market prices; 2012, flash based in quarterly estimation

3) Estimation of GDP per capita is based on annual average population calculated by INSTAT (1402/Y1001-A)

4) 2012, based on quarterly estimation of  GVA at basic prices (2005=100)

5) Base year is 2005; according to Nace Rev 1.1.

6) Data on GED  from 2003 are disseminated by Bank of Albania.

7) 2001, Debt Outstanding Disbursed (DOD) cumulative stock covering external public debt and external publicly guaranteed debt, but excluding IMF credit. Total exports are calculated according national accounts concepts.

8) 2001 - 2009, average weighted rate applied on new 12-month loans over the respective month, on 12-month maturity.

9) 2001 - 2009, deposit interest rate represents the average weighted rate for newly accepted deposits over the respective month, on 12-month maturity.

10) 2001 based on 2001 census data, 2008-2012 based on LFS data.

11) Data are provided according to Nace rev 1.1

12) Including melons.

[1]               Until 17 September 2013, the
rapporteur for Albania was Mr Nikolaos Chountis. The current rapporteur is Mr
Nikola Vuljanic.

[2]               Enlargement Strategy and
Main Challenges 2013-2014, COM(2013) 700.

*               This designation is
without prejudice to positions on status, and is in line with UNSCR 1244/99 and
the ICJ Opinion on the Kosovo declaration of independence.