# EUR-Lex - 52012DC0602 - EN

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# 52012DC0602

**COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on a Feasibility Study for a Stabilisation and Association Agreement between the European Union and Kosovo( /* COM/2012/0602 final */**

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COMMUNICATION FROM THE COMMISSION TO
THE EUROPEAN PARLIAMENT AND THE COUNCIL

on a Feasibility Study for a Stabilisation
and Association Agreement between the European Union and Kosovo*

1.
Introduction

The main
principles of the Stabilisation and Association Process (SAP) were set out in a
Commission Communication of May 1999[1]
and were confirmed by the Council in June 1999. Through this process, the
European Union (EU) expresses its determination to take up the challenge and responsibility to contribute
to the stability of the Western Balkans region. In return for compliance with
the relevant conditions, the EU offers the countries tailor-made contractual
relations: Stabilisation and Association Agreements. The conditions for
establishing contractual relations with the Western Balkans countries are set
in the Council Conclusions of April 1997. The main elements include a credible
engagement to undertake democratic reforms, respect and protect human rights,
minorities and freedom of expression, and free and regular elections. The
Council also expects implementation of the first economic reforms, readmission from
Member States and commitment to the regional cooperation.

The Feira European
Council (June 2000) gives a clear signal to the Western Balkans region establishing
the status of potential candidates for membership. This message is further
reinforced by the summit in Zagreb (November 2000). The European Council
Conclusions of March 2003 state that the future of the Western Balkans is
within the EU and strong political will and sustained efforts are required to
secure it. The Thessaloniki agenda for the Western Balkans of June 2003 makes
clear that the Western Balkans countries and support to their preparation for
the future integration into the European structures and ultimate membership
into the Union is a high priority for the EU.

To date, feasibility
studies have been prepared for Albania, Bosnia and Herzegovina, Croatia, the
former Yugoslav Republic of Macedonia, Serbia and Montenegro. Stabilisation and
Association Agreements have subsequently been signed with all these countries.
The December 2011 Council recalls the EU's willingness to assist the economic
and political development of Kosovo through a clear European perspective, in
line with the European perspective of the region. The Council underlines the
need to take concrete steps to that effect. In February 2012, the Council takes
note of the intention of the Commission to launch the feasibility study for a
Stabilisation and Association Agreement between the European Union and Kosovo,
without prejudice to Member States' position on status, or any future decisions
to be taken by the Council.

In the context of the
Council Conclusions of February 2012, the Commission made a Declaration stating
that "the Commission's feasibility study will examine whether the
political, economic and legal criteria for a Stabilisation and Association
Agreement are fulfilled. The launch of the feasibility study for a
Stabilisation and Association Agreement with Kosovo is without prejudice to the
legal status and Member States' positions on the recognition of Kosovo".

Methodology

This study is based on
the findings presented in the Commission Staff Working Document.[2]
This has been compiled on the basis of a questionnaire completed by the Kosovo
authorities, an assessment mission of 20 experts, contributions from the EU
Office in Pristina, international organisations and non-governmental
organisations. The study assesses whether Kosovo is ready to negotiate and
subsequently can implement a Stabilisation and Association Agreement. The
document identifies priority issues to be addressed before negotiations can
start and priority areas that Kosovo would need to address to be able to meet
its obligations under a Stabilisation and Association Agreement.

Legal aspects

The possibility for the
Union to conclude international agreements is not limited to generally
recognised independent states or international organisations. Such agreements
can be concluded with any entity with regard to which the other Contracting
Party accepts that it can enter into an agreement that will be governed by
public international law. In the past, the EU has concluded several
international agreements with entities other than sovereign states.

These agreements were
concluded by the Council on the basis of Article 218 Treaty on the Functioning
of the EU (TFEU) (or the predecessor articles, Article 300 -and previously 228-
EC). In this context, it is important to note that the use of Article 218 TFEU,
as the legal basis for an agreement with Kosovo, does not constitute
recognition of Kosovo by the Union as an independent state nor does it
constitute recognition by individual Member States of Kosovo, provided that an
express reservation to that effect is made. Equally, it does not constitute a
reversal of recognition by the Member States which have already recognised.

There is no legal
obstacle for the Union to conclude on that basis an association agreement with
Kosovo. There is no precise definition of that notion in EU-law: Article 217
TFEU indicates that such an agreement establishes "an association
involving reciprocal rights and obligations, common action and special
procedure". It follows from the Union's practice that association
agreements create special, privileged links with a third country. In
particular, association agreements always lay much emphasis on the shared
values and principles, comprise an important trade component, provide for
approximation of the country's national legislation and policies with all core
policies of the Union, and organise cooperation on almost any area of Union
competence. The association is developed through an institutional framework,
which not only includes a decision-making mechanism, but provides also
intensive dialogue at civil service level.

Consequently, the Union
can conclude such an agreement with a third country if its political and
judicial authorities are capable to ensure that the terms of the agreement are
respected, applied and implemented. It is precisely the purpose of this
feasibility study to examine whether the political and economic development of
Kosovo would allow it to undertake the extensive obligations of an association
agreement. From the legal point of view, however, it suffices to find that the
fact that some Member States do not recognise Kosovo as an independent state
does not constitute a legal obstacle for the Kosovo authorities to implement
the obligations that would arise from an association agreement. The association
of Kosovo to the European Union is not in conflict with the fact that the
Member States of the Union have different positions on the status of Kosovo
under international law. Moreover, the precise legal nature of the agreement
would have to be determined at the end of the negotiations, in view of its
actual content and taking duly into account the legal context.

The international
presence[3] in Kosovo does not constitute an obstacle for
the Kosovo authorities to implement the obligations arising from a
Stabilisation and Association Agreement. Such an agreement would not be in
contradiction with the United National Security Council Resolution 1244 of 1999
and is consistent with the current presence of the United Nations Interim
Administration Mission in Kosovo.

The International
Civilian Office (ICO) was set up to supervise the implementation of the
Comprehensive Proposal for a Status Settlement for Kosovo. On 10 September, the
International Steering Group (ISG), having determined that Kosovo had
substantially implemented the terms of the Comprehensive Settlement proposal
and Kosovo having adopted the necessary constitutional and legal framework,
declared the end of the supervision of Kosovo's independence, and the end of
the mandate of the International Civilian Representative. As a consequence, the
International Civilian Office will be closed by the end of 2012. Following this
process, the EU will take on a more prominent role in Kosovo.

The central aim of the
EU rule of law mission, EULEX, is to assist and support the Kosovo authorities
in key areas of the rule of law – police, judiciary and customs. Its mandate
has certain executive responsibilities. If an association agreement were
concluded, this EU mission would, within its remit, support the Kosovo
authorities in the implementation of such an agreement.

Aspects related to
the north of Kosovo

The north of Kosovo refers to an area which
includes the municipalities of Leposaviq/Leposavić, Zubin Potok and Zveçan/Zvečan
as well as the part of Mitrovicë/Mitrovica municipality north of the river Ibër/Ibar.
This area is predominantly inhabited by Serbs.

Serbia has continued to
fund and maintain certain structures in this part of Kosovo. This includes not
only hospitals and schools, but also municipal administrations, security
services and judicial structures. Currently, the Mitrovica District Court can
only operate with the support of EULEX judges. The Serbian power utility
maintains an unlicensed branch in the north, unlicensed Serbian mobile
telephony companies continue to operate and the population in the north
frequently uses alternative roads to cross the border/boundary line.

The north of Kosovo faces a difficult
economic situation. The local population is overly dependent on public
employment and social assistance financed by Belgrade. The area's potential in
terms of natural resources, such as the Trepça/Trepča mine, remains
largely under-developed.

In 2011, a census was conducted across
Kosovo, but it did not include data on these parts of Kosovo. At the time of
the last Kosovo elections, the turnout in these municipalities was extremely
low. In May 2012, the municipalities of Zubin Potok and Zveçan/Zvečan unilaterally
organised separate local elections at the same time as elections were held in
Serbia. These elections were not recognised by Pristina, Belgrade or
international community.

Following the deployment of Kosovo police
and customs to the border/boundary crossing points over the summer 2011, a
number of barricades were erected. Most have now been dismantled. There is
still a barricade on the main bridge across the Ibër/Ibar river. The current
situation with outbursts of violence and frequently heightened tensions is not
sustainable. KFOR and EULEX have an
important role to play in helping maintain calm.

Belgrade/Pristina
dialogue

The situation in the
north of Kosovo remains a challenge for Kosovo, Serbia, Western Balkans region
and international community. Following the UN General Assembly Resolution of
September 2010, the EU has facilitated a dialogue between Pristina and Belgrade.
The dialogue was launched in March 2011 to promote cooperation, achieve
progress on the path to the European Union and improve the lives of the people.
To date, the parties have reached agreements on free movement of persons,
customs stamps, recognition of university diplomas, cadastre records, civil
registries, IBM and on regional cooperation. Both Kosovo and Serbia need to continue implementing in good faith all agreements reached to date and to engage
constructively on full range of issues with the facilitation of the EU.

Further progress on the
issues in the north will require all relevant actors involved to work together
in a constructive spirit. The Kosovo authorities need to do their part. They
need to promote a multi-ethnic Kosovo and to respect the
particular needs of the local population. Kosovo has
continued preparing an agenda for the north in line with the Council
Conclusions of December 2011. Non-Serb minorities in the north will also
benefit from normalisation in this part of Kosovo.

The current situation
is challenging and needs to be urgently improved. In this regard, the
Commission considers that the benefits of a Stabilisation and Association
Agreement would serve as an encouragement for the population of all of Kosovo,
including the north.

2.
Relations between the European Union and Kosovo

Kosovo has gradually strengthened its
structures dealing with European integration processes. Kosovo has established a National Council for EU Integration chaired by
the President. The objective of this National Council is to mobilise Kosovo
institutions to deliver on its EU reform agenda. The Ministry of European
Integration leads a Task Force for European Integration. The Ministry has
demonstrated a good ability to mobilise other ministries and institutions by
coordinating a comprehensive contribution of Kosovo to the preparation of this feasibility
study.

Review of the 2009
Communication on Kosovo – Fulfilling its European perspective[4]

In 2009, the Commission
issued a Communication on Kosovo, which included recommendations for a number
of practical steps the EU could take to ensure Kosovo's continued progress
towards Europe.

The EU has launched a
visa liberalisation dialogue and presented the visa liberalisation roadmap to
the Kosovo authorities; the Kosovo authorities have now submitted their first
report. The EU agreed to extend the Autonomous Trade Measures for Kosovo in
2011. Kosovo has also been included in the Convention on Pan-Euro-Med
Cumulation of Origin, in which it can actively participate once a trade
agreement is in place. Kosovo continues to prepare for integration into the
economic and fiscal surveillance framework. In December 2011, the Council
recognised that Kosovo's socio-economic development would also be enhanced
through membership of the European Bank for Reconstruction and Development.

In March 2011, the
Commission recommended to the Council to authorise it to negotiate a framework
agreement allowing Kosovo to participate in EU programmes. The Commission and
Kosovo have completed three cycles of the Stabilisation and Association Process
Dialogue. This Dialogue has proven an effective mechanism to monitor and advise
Kosovo on measures it has to take to implement its European reform agenda. This
mechanism also provides for consultations with civil society organisations.

Kosovo benefits from
the Instrument for Pre-Accession Assistance cross-border cooperation programmes
with Albania, the former Yugoslav Republic of Macedonia and Montenegro.
Kosovo's allocations for Erasmus-Mundus, Tempus and the Young Cell scheme under
the Instrument have increased. Overall, within the 2007-2013 framework, € 635.4
million is available to Kosovo.

Jointly with the Kosovo
authorities, the Commission launched a Structured Dialogue on the Rule of Law.
This demonstrates the political commitment of the Kosovo authorities and the
Commission to address challenges in this area early in the enlargement process.

EU presence in
Kosovo

The double-hatted
office of the EU Special Representative and the International Civilian
Representative has been decoupled. The office of the EU Special Representative
and the European Commission Liaison Office have been merged into one EU Office.
This has enhanced the EU's presence and visibility in Kosovo. To reflect
increasing capacities of the Kosovo authorities, the mandate of EULEX has been
reconfigured and downsized. To assist the Kosovo authorities in facing the remaining
challenges, its mandate has been extended until June 2014. Kosovo needs to
maintain good cooperation with the mission and actively
support the implementation of its mandate. The
Commission is cooperating closely with EULEX throughout its reconfiguration to
ensure a smooth transition and sustained support to the Kosovo authorities.

Kosovo in the
regional context

Kosovo participates in
the Regional Cooperation Council, the Energy Community Treaty, the South
East-Europe (SEE) Transport Observatory and CEFTA, and is ready to participate
in other regional initiatives. The formula for Kosovo's participation in
regional cooperation arrangements agreed in February 2012 is a good basis for
Kosovo to increase and extend its direct participation in these mechanisms. These
include the Transport Community Treaty, judicial cooperation, and arrangements
for employment and social policies within the framework of SEE Employment and
Social Policy Network and the SEE Health Network. It should also ensure
Kosovo's full participation in the Roma Decade.

3.
Assessment
3.1.
Political issues

Kosovo's political system is based on the
principles of a parliamentary democracy. These principles are enshrined in its
constitution and legal framework. Over the past three years, the functioning
of democratic institutions and the respect for the rule of law have been
consolidated. The necessary institutions have been established.

The president, government and parliament
are the main institutions responsible for driving forward the reform process.
The Constitutional Court has played an
important role in guaranteeing democratic principles and respect of the
constitution, for example through its judgements on the mandate of the current
President. The cooperation on legislation between the government and the parliament
has also been gradually improving. Kosovo has demonstrated sufficient
commitment to the democratic principles of governance to start negotiating a
Stabilisation and Association Agreement. To meet its obligations under such an agreement,
Kosovo needs to continue to implement democratic reforms. In particular, the Assembly
and its committees need to strengthen their oversight of the executive and the
security sector, through improved scrutiny of legislation and monitoring of
implementation of policies and laws. The financial and administrative
independence of the Assembly from the government needs to be strengthened. This
can be achieved through adopting legislation on the status of civil servants of
the Assembly. It is also important to ensure that the draft budget of the Assembly
is modified by the government in consultation with the Assembly before the
government submits the budget proposal to the Assembly for adoption.

Kosovo has held regular elections at both
central and municipal levels. The electoral system allows for competition between
different political parties and free choice for voters. This has resulted in a
differing composition of governing coalitions
over time. The most recent general elections in 2010/2011 demonstrated that new political parties can enter the Assembly. Kosovo
is ready to start negotiating a Stabilisation and Association Agreement. At the
same time, these elections were marked by serious shortcomings and technical
difficulties. Therefore, Kosovo needs to ensure that the legal framework
improves to better reflect best practices and standards in the EU to meet its
obligations under such an agreement.

On the rule of law, the legal framework is
complex, including legislation from the former Yugoslavia and from the Federal Republic of Yugoslavia, UNMIK legislation and new
Kosovo legislation. Some elements of the
necessary legislative reforms for the fight against organised crime have been
put in place. Several important laws are still missing or need amendment,
notably in the area of money laundering and asset confiscation. In the short
term, Kosovo needs to demonstrate a clear commitment to deliver results in the
fight against organised crime, including launching investigations, in close
coordination with EULEX. Kosovo needs to adopt new legislation on confiscation
of assets and adapt to the acquis the law on the prevention of money
laundering and financing of terrorism.

Enforcement of the legal framework for the
fight against various forms of organised crime remains an important challenge. For
Kosovo to meet its obligations under a Stabilisation and Association Agreement,
concrete evidence of results in fighting organised crime needs to be given as a
matter of priority. Kosovo also needs to continue in strengthening and
implementing its legislation particularly on prevention and fighting against
trafficking in human beings, drugs, their precursors and weapons trafficking. Kosovo
also needs to improve the reliability of its statistics.

Kosovo has put in place important elements
of the legislative framework necessary for the fight against corruption.
Examples include legislation on declaration of
assets, preventing conflicts of interest in exercising
public functions, whistle-blowers, public procurement and financing of
political parties. It is important that Kosovo now achieves tangible results in
this area.

Over the past three years, the prosecution service and the police have been
reorganised to strengthen their capacity to tackle corruption. Kosovo also has
an Anti-Corruption Agency with the right of administrative investigation and
reporting. The capacity of the Agency corresponds to its responsibilities. In
the short term, Kosovo needs to demonstrate a clear commitment to deliver
results in the fight against corruption, including launching investigations, in
close coordination with EULEX. Kosovo needs to adopt a new anti-corruption strategy.

To meet its obligations under a
Stabilisation and Association Agreement, Kosovo also needs to effectively
implement its anti-corruption legislation and establish an effective mechanism
for prevention of corruption. As a matter of priority, Kosovo needs to provide
concrete evidence of results in its fight against corruption. This would
include successful investigations and prosecutions of appointed and elected
officials guilty of corruption. Kosovo also needs to improve the reliability of
the statistics in this area.

The Council Conclusions of April 1997
underline the importance of satisfactory readmission procedures. Within the framework of the visa liberalisation process, Kosovo
has adopted a law on readmission and continues to cooperate
on readmission issues with EU Member States. It needs to fully implement its
law on readmission and needs to ensure the reintegration of the returned
persons.

Over the past three years, Kosovo has
adopted legislation for major judicial reforms. The principles of impartiality,
independence, accountability and efficiency are at the heart of this reform. The
reforms change the structure of the court
system and the prosecution. A Prosecutorial Council has been established and
the Judicial Council has been strengthened. Key institutions of the judiciary
are in place, although in the court in northern Mitrovica only EULEX judges are
present. They have progressively increased their capacity and have a good
understanding of how to take these reforms forward. The efforts made to reduce
the backlog of old cases are now slowly showing results. While implementing the
new structure of courts, Kosovo needs to ensure that the Special Prosecution
responsible for cases of organised crime, war crimes and corruption maintains
its competencies.

It is clear that Kosovo faces many
important challenges in this area. To meet its obligations under a
Stabilisation and Association Agreement, Kosovo needs to continue improving the
effectiveness, accountability and impartiality
of the judiciary. It needs to successfully implement the four main judicial
reform laws, including by ensuring their consistency. Kosovo needs to take
measures to decrease the total backlog of cases. The Kosovo authorities need to
provide appropriate security and protection to judges, prosecutors, witnesses
and plaintiffs, as well as court staff. Kosovo needs to ensure trials are
conducted in appropriate premises and in line with court procedures.
Recruitment of judges and prosecutors from minorities, as set out in the
legislative framework, needs to continue.

The legal framework providing for the basic
conditions for a stable and professional civil service is largely in place. Legislation is inspired by
the latest approaches to public administration in Europe. The capacity
of the public administration at the central level are better developed than
those at the municipal level. Kosovo has also established the institution of the Ombudsperson,
which is a key independent body to promote human and fundamental rights. The
Ombudsperson however faces challenges, notably in terms
of budget and premises.

In the short term, Kosovo needs to adopt
the necessary secondary legislation on civil service
and on salaries for the civil service. Furthermore, it
needs to allocate premises to the Ombudsperson and to ensure its budgetary independence. The
government needs to include the Ombudsperson's draft budget proposal without
modifications into the global draft budget submitted to the parliament.

At the same time, Kosovo needs to continue
to implement the necessary reform of the public administration. To meet its obligations under a Stabilisation and Association
Agreement, Kosovo needs to make
progress in implementing the public administration strategy and action plan and
related legislation. It also needs to ensure sustainable public administration
reform, including the necessary funding and staffing. The share of persons
belonging to minorities in the public administration needs to be increased. An efficient and professional public administration is key for the
successful implementation of an agreement.

The constitution of Kosovo and the overall
legislative framework provide guarantees for basic human rights and the
protection of minorities. Although Kosovo
is not a member of the UN or the Council of Europe, its constitution stipulates
that key UN and Council of Europe conventions
and protocols are directly applicable in Kosovo and take precedence over
Kosovo's legislation. Over the past three years, Kosovo has taken steps to
implement these provisions in practice.

There are important challenges that need to
be addressed by Kosovo in order to meet its obligations under a Stabilisation
and Association Agreement. This area is particularly important in light of the
new EU Strategic Framework and Action Plan on Human Rights and Democracy
adopted by the Council in June 2012. Kosovo needs to investigate and prosecute
any physical attacks against journalists and complete the
parliamentary procedure changing the Criminal Code on criminal liability of the
media and protection of journalist sources. Kosovo also needs to streamline and
simplify the multitude of different bodies dealing with the protection of human
and fundamental rights to ensure effective monitoring and enforcement of the
legal framework in this area. Kosovo needs to make progress in enforcing
property rights, for example through decreasing the backlog of cases and
improving enforcement of judicial and administrative decisions. Legislation on
personal data protection needs to be further harmonised with EU standards and
administrative capacities strengthened in this area.

The legislative framework for the
protection of minorities is in place, including constitutional guarantees.
According to Kosovo's constitution, the
Council of Europe Framework Convention for the Protection of National
Minorities is directly applicable in Kosovo. Persons belonging to minorities
are well represented in the Assembly and in political functions at the
government level.

With strong international support, Kosovo
has continued offering the possibility of
return for displaced persons. Overall, over 23,000 persons belonging to
minorities have returned to Kosovo since 2000.

Kosovo has also started implementing decentralisation, including the establishment of new
municipalities with a majority of minority population. In the short term,
Kosovo needs to ensure existence of a body enabling direct consultation on the
promotion and protection of religious and cultural heritage with religious
communities, notably the Serbian Orthodox Church.

To meet its obligations under a
Stabilisation and Association Agreement, Kosovo needs to promote a multi-ethnic
Kosovo, by creating conditions
for Kosovo Serbs to feel part of Kosovo's future and to facilitate return for
persons wishing to do so. The Commission also expects that Kosovo will continue
to implement decentralisation, notably in the new municipalities and thereby help
the integration of Kosovo Serbs. Budget, staff and premises need to be
allocated to the Office of the Language Commissioner.

Kosovo also needs to implement legislation on
protection of the cultural heritage and of the Serbian Orthodox Church, notably
laws on the historic centre of Prizren and on
the village Velika Hoča/Hoçë e Madhe. The Kosovo public broadcaster needs to ensure broadcasting in Serbian
language. Attacks motivated by ethnicity or religion need to be investigated
and perpetrators brought to justice and discrimination tackled. With regard to
Roma, Ashkali and Egyptians who still live in very poor conditions, Kosovo
needs to demonstrate progress on implementation of the strategy and action
plan, including through allocation of the necessary resources.

On war crimes, Kosovo has maintained good
cooperation with the International Criminal Tribunal for the former Yugoslavia. Kosovo also needs
to support the work of the Special Investigative Task Force of EULEX.

3.2.
Economic issues

Kosovo has implemented the initial
essential reforms towards establishing a fully functioning market economy. This
is sufficient to establish contractual
relations with countries from the Western Balkans, as stated in the Council Conclusions of April 1997. At the same
time, Kosovo's economy faces many important challenges. Unemployment is very high and the private sector remains weak.
Informalities are widespread and the rule of law needs to be enhanced to
improve the business environment and support private sector development. Significant
further efforts are needed to better target economic policies, address fiscal
consolidation, job creation and competitiveness issues, and promote private
investments to achieve more sustainable and inclusive growth.

3.3.
Ability to assume the obligations resulting from
a Stabilisation and Association Agreement

The Commission analysis confirms that for majority
of the sectors, Kosovo has put in place elements of the legislative framework
and the basic administrative capacity. This is sufficient to start negotiating
a Stabilisation and Association Agreement. At the same time, the Staff Working
Document highlights that there are significant gaps and many
issues that need to be addressed by Kosovo, to meet its obligations under such
an agreement.

Trade is a key sector in the context of a
Stabilisation and Association Agreement. Kosovo has a liberal trade regime and
is a very open economy, with
few restrictions to trade. Kosovo is a member of CEFTA and has a tariff-free regime for all industrial goods and agriculture products with
all members of CEFTA. Kosovo also enjoys customs-free access to the EU market
for manufactured products and almost all agricultural products, through the EU's
autonomous regime. Kosovo has been taking steps to
modernise the regulatory framework related to the free
movement of goods with a view to approximation with the acquis by
adopting new legislation in line with EU standards and eliminating non-EU
compatible regulations.

The Ministry for Trade and Industry is
being reorganised to improve capacity in this area in view of the trade-related
parts of a Stabilisation and Association Agreement. The restructuring has not
yet been fully completed. Therefore, in the short term Kosovo needs to
implement the government decision on the restructuring of the Ministry and put
in place a structure to lead and coordinate such negotiations. To improve the
understanding of the impact of trade provisions of a Stabilisation and
Association Agreement on Kosovo's economy, Kosovo needs to prepare an analytical study,
including a clear statement of its negotiating priorities.

There are further areas in which Kosovo
needs to make progress to meet its obligations under a Stabilisation and
Association Agreement. One of the key elements is implementation of the legal framework
on trade, competition and internal market issues. Illegal animal trade and slaughtering continues and
Kosovo needs to enhance control of these practices. The controls at livestock
markets also need to be strengthened. Kosovo would benefit from improved
business statistics.

To meet its obligations under a
Stabilisation and Association Agreement, Kosovo needs to enhance facilities
dedicated to the phytosanitary and veterinary import controls as well as the
capacity to transfer samples. The transfer of the food safety and veterinary
inspectors from municipalities to the Kosovo Food and Veterinary Agency needs
to be finalised. Data entry into the animal identification, registration and
movement database needs to be systematised. The laboratories involved in food
controls need to be accredited.

4.
Overall conclusions and recommendations

Kosovo has made considerable progress on
its path towards the EU since the conflict of the late 1990s. It has put in place a stable institutional and legal framework required for
democratic governance and protection of human rights, of all minorities living in Kosovo as well as of rights of
returning displaced persons.

The core institutional and legal framework
to ensure the rule of law is in place. The legislation provides for strong
guarantees of the independence of the judiciary. The basic institutions of the
judiciary have started to perform their role. The legal framework necessary for
a stable and professional public administration is also largely in place.

Kosovo has implemented the initial
essential reforms towards establishing a functioning market economy. Kosovo has
a liberal
trade regime and is overall, a very open economy, with few restrictions to trade.
One of the key economic challenges Kosovo faces is a very high level of
unemployment.

Through engagement in the EU-facilitated
dialogue with Serbia, Kosovo has demonstrated commitment to regional
cooperation and stability. Kosovo has also established good relations with most
of its neighbours. It participates in some of the regional fora and chaired
CEFTA.

Over the past three years, Kosovo has
increased its capacity to meet obligations stemming from a Stabilisation and
Association Agreement. Kosovo is currently the only country of the Western
Balkans that does not yet have contractual relations with the EU or benefit from the visa
liberalisation. In trade, it relies on EU autonomous trade measures.

From a legal point of view, the EU can
conclude a Stabilisation and Association Agreement with Kosovo, as per Articles
217 and 218 TFEU. A Stabilisation and Association Agreement between Kosovo and
the EU can be concluded in a way that it respects the positions of Member
States on the status of Kosovo. On several occasions, the Council has confirmed the European
perspective of the Western Balkans. Most recently, the Council confirmed this
perspective for Kosovo in December 2011. Kosovo’s European ambitions enjoy
strong support from the general public in Kosovo.

The situation in the north of Kosovo
remains an important challenge for Kosovo, the Western Balkans region at large
as well as the EU. All actors involved need to take positive and proactive
steps to help resolve this situation. It is for the Kosovo authorities to
promote a multi-ethnic Kosovo. They need to create conditions for Kosovo Serbs
to feel they have future in Kosovo. The current situation is not an obstacle to negotiate the
agreement, but further improvements are required for Kosovo to meet the
obligations under a Stabilisation and Association Agreement. It is in the
interest of people living in this part of Kosovo to benefit from the provisions
of a possible future Stabilisation and Association Agreement. The EU is
committed to help all parties concerned to find solutions to improve the lives
of people living in the north of Kosovo.

The analysis presented in the Staff Working
Document and summarised in this Communication suggests that Kosovo is largely
ready to open negotiations for a Stabilisation and Association Agreement. It is
also essential that Kosovo continues implementing in good faith all agreements
reached between Belgrade and Pristina to date and that it engages constructively on the full range of issues with the
facilitation of the EU. On this understanding, the Commission will propose negotiating
directives for such an agreement, once Kosovo takes the following steps:

·
Rule of law: demonstrate a clear commitment to deliver results in the fight
against organised crime and corruption, including launching investigations and
ensuring continuous good cooperation with EULEX. Support
the work of the Special Investigative Task Force. While implementing the new
structure of courts, ensure that the Special Prosecution responsible for cases
of organised crime, war crimes and corruption maintains its competencies. Adopt
the legislation on confiscation of assets and revise the law on prevention of
money laundering and financing of terrorism. Adopt a new anti-corruption
strategy.

·
Public administration: adopt the necessary secondary legislation of laws on civil service
and on salaries for the civil service. Allocate premises to the Ombudsperson
Institution and ensure its budgetary independence through obliging the
government to include the Ombudsperson's draft budget proposal into the global
draft budget submitted to the parliament without changes.

·
Protection of minorities: ensure existence of a body enabling direct consultation on the
promotion and protection of religious and cultural heritage with religious
communities, notably the Serbian Orthodox Church.

·
Trade: implement
the government decision on the restructuring of the Ministry for Trade and
Industry, put in place a mechanism to lead and coordinate negotiations within
Kosovo and prepare an impact analysis of trade aspects of a Stabilisation and
Association Agreement.

Kosovo needs to continue demonstrating its
commitment to the overall EU reform agenda, including by increased alignment of
legislation with the acquis. To meet
its obligations under a Stabilisation and Association Agreement, Kosovo needs to make progress in the
following areas in particular:

·
Rule of law: provide
concrete evidence of results in fighting organised crime and corruption as a
matter of priority, and strengthen legislation and its implementation
particularly on prevention and fighting against trafficking in human beings,
drugs, their precursors and weapons trafficking. Improve the reliability of
statistics on the fight against serious and organised crime and corruption. Actively
support implementation of the mandate of EULEX, including of the Special
Investigative Task Force. Ensure readmission from Member States.

·
Judiciary: take
measures to reduce the total backlog of cases. Implement the judicial reform,
including by ensuring consistency among the laws on courts, Judicial and
Prosecutorial Councils and prosecution. Provide appropriate security and
protection measures for judges and court staff, as well as for prosecutors,
witnesses and plaintiffs, and provide effective safeguards against threats or
intimidation. Ensure trials are conducted in appropriate premises and in line
with the court procedures. Continue recruiting judges and prosecutors from
minorities, as set out in the legislative framework.

·
Public administration: make progress in implementing the public administration strategy
and action plan and related legislation. Ensure a sustainable public
administration reform, including the necessary funding and staffing. Increase
the overall share of persons belonging to minorities in the public
administration.

·
Electoral reform and the Assembly: ensure that the legal framework for elections better reflects best
practice in the EU and that implementation is also in line with international
standards. Assembly to enhance its oversight of the executive, including of the
security sector, through improved scrutiny of legislation and monitoring of
implementation of policies and laws. Assembly's financing and administration to
be made more independent from the government, notably through adopting
legislation on the status of civil servants of the Assembly, ensuring that the
draft budget of the Assembly is modified by the government in consultation with
the Assembly before it is submitted to the Assembly for adoption.

·
Human and fundamental rights: investigate and prosecute any physical attacks against journalists
and complete the parliamentary procedure to change the Criminal Code on
criminal liability of media and protection of journalist sources. Streamline
and simplify the multitude of bodies dealing with the protection of these
rights to ensure effective monitoring and enforcement of the legal framework in
this area. Make progress on the enforcement of property rights for example
through decreasing the backlog of cases and improving enforcement of judicial
and administrative decisions. Harmonise legislation on personal data protection
with EU standards and focus on its implementation, notably by drafting
secondary legislation and building up administrative capacities.

·
Protection of minorities: promote multi-ethnic Kosovo; create conditions for Kosovo Serbs to
feel part of Kosovo's future and conditions for the return of persons who wish
to do so. Continue implementing decentralisation, notably in the new
municipalities. Allocate budget, staff and premises to the Office of the
Language Commissioner. Implement legislation related to the protection of
cultural heritage and the Serbian Orthodox Church. Ensure broadcasting in
Serbian by the public broadcaster. Investigate and prosecute any physical
attacks motivated by ethnicity or religion and bring perpetrators to justice.
Progress on implementing the strategy and action plan for the Roma, Ashkali and
Egyptians, including through the allocation of the necessary resources.

·
Trade and internal market issues: implement the legal framework on trade, competition and internal
market. Enhance the control of the continuing illegal animal trade and
slaughtering and strengthen the controls at livestock markets. Improve business
statistics.

·
Phytosanitary and veterinary issues: enhance the facilities for phytosanitary and veterinary import
controls as well as the capacity to transfer samples. Strengthen food safety
and phytosanitary controls, including through finalising the transfer of the
food safety and veterinary inspectors from municipalities to the Kosovo Food
and Veterinary Agency. Systematise data entry into the animal identification,
registration and movement database. Accredit the laboratories involved in food
controls.

The Commission invites Kosovo to intensify
reforms in these areas and focus on implementation. The pace of progress
depends on Kosovo. Public and political consensus in Kosovo on the EU reform
agenda are key to its swift implementation.
The Commission will continue to monitor Kosovo's
progress through the Stabilisation and Association Process Dialogue, the
Structured Dialogue on the Rule of Law, the visa dialogue process as well as
through its regular progress reports.

*               This designation is without prejudice to positions on
status, and is in line with UNSCR 1244/1999 and the ICJ Opinion on the Kosovo
declaration of independence.

[1]               COM(1999) 235 final.

[2]               SWD(2012) 339 final.

[3]               It can be recalled that the presence in Bosnia and
Herzegovina of a High Representative, supported by the Office of the High
Representative (OHR), appointed by the Peace Implementation Council to oversee
the civilian implementation of the Dayton Peace Agreement, was not considered a
legal impediment for the signature of a Stabilisation and Association Agreement
between the European Union and Bosnia and Herzegovina.

[4]               COM(2009) 534 final.