EUROPEAN COMMISSION Brussels, 6.10.2020 SWD(2020) 351 final COMMISSION STAFF WORKING DOCUMENT North Macedonia 2020 Report





Accompanying the Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions



2020 Communication on EU Enlargement Policy {COM(2020) 660 final} - {SWD(2020) 350 final} - {SWD(2020) 352 final} - {SWD(2020) 353 final} - {SWD(2020) 354 final} - {SWD(2020) 355 final} - {SWD(2020) 356 final}



Table of Contents 1.Introduction 1.2.Context 1.2.Summary of the report 2.Fundamentals first: political criteria and rule of law chapters 2.1.Functioning of democratic institutions and Public Administration Reform 2.1.1.Democracy 2.1.2Public administration reform 2.2Rule of law and fundamental rights 2.2.1Chapter 23: Judiciary and fundamental rights 2.2.2Chapter 24: Justice, freedom and security 3.Fundamentals first: economic development and competitiveness 3.1.The existence of a functioning market economy 3.2.The capacity to cope with competitive pressure and market forces within the Union 4.Good neighbourly relations and regional cooperation 5.Ability to assume the obligations of membership 5.1Chapter 1: Free movement of goods 5.2Chapter 2: Freedom of movement for workers

5.3Chapter 3: Right of establishment and freedom to provide services 5.4Chapter 4: Free movement of capital 5.5Chapter 5: Public procurement 5.6Chapter 6: Company law 5.7Chapter 7: Intellectual property law 5.8Chapter 8: Competition policy 5.9Chapter 9: Financial services 5.10Chapter 10: Information society and media 5.11Chapter 11: Agriculture and rural development 5.12Chapter 12: Food safety, veterinary and phytosanitary policy 5.13Chapter 13: Fisheries 5.14Chapter 14: Transport policy 5.15Chapter 15: Energy 5.16Chapter 16: Taxation 5.17Chapter 17: Economic and monetary policy 5.18Chapter 18: Statistics 5.19Chapter 19: Social policy and employment 5.20Chapter 20: Enterprise and industrial policy 5.21Chapter 21: Trans-European networks 5.22Chapter 22: Regional policy and coordination of structural instruments

5.25Chapter 25: Science and research 5.26Chapter 26: Education and culture 5.27Chapter 27: Environment and climate change 5.28Chapter 28: Consumer and health protection 5.29Chapter 29: Customs union 5.31Chapter 31: Foreign, security and defence policy 5.32Chapter 32: Financial control 5.33Chapter 33: Financial and budgetary provisions Annex I – Relations between the EU and North Macedonia



1.Introduction 1.2. Context The Stabilisation and Association Agreement (SAA) between the Republic of North Macedonia and the EU entered into force in April 2004. Since 2009, the Commission has continuously recommended to the Council to open accession negotiations with North Macedonia, a candidate country since 2005. In its June 2018 Conclusions, the Council acknowledged the progress achieved and set out the path towards opening accession negotiations in June 2019. In line with the Council Conclusions, the Commission started the preparatory work, including through the technical explanation of chapters of the EU acquis. In light of the progress achieved and the conditions set unanimously by the Council in June 2018 having been met, the Commission recommended to open accession negotiations in May 2019. In June 2019, the Council postponed its decision to no later than October 2019. The European Council decided in October 2019 to ‘revert to the issue of enlargement before the EU-Western Balkans summit in Zagreb in May 2020’. The Commission has continued to closely monitor developments in North Macedonia and reported in March 2020 that North Macedonia has increased its efforts and delivered further tangible and sustainable results in the key areas identified in the Council Conclusions of June 2018 such as the judiciary, fight against corruption and organised crime, intelligence services reform and public administration. In its update on North Macedonia published in March 2020, the Commission confirmed that the bases of the Commission’s 2019 recommendation to open accession negotiations with North Macedonia remain valid. On 26 March 2020, the European Council endorsed the Council’s decision to open accession negotiations with North Macedonia. The authorities continued to demonstrate publicly their commitment to advance on their EU path. The COVID-19 pandemic is a global shock that has not spared the Western Balkans. The final extent of its footprint in terms of loss of human lives and damage to the economies is still difficult to assess, but early estimates foresee a drop of between 4 and 6% of Gross Domestic Product (GDP) in the region. Thousands of citizens are at risk of losing their jobs, and temporary government support measures (unemployment benefits, deferrals/waivers to tax and social security contributions, etc.) have an important fiscal impact. While the EU is itself heavily affected by the pandemic, it has spared no time and effort to provide essential and unparalleled support to the Western Balkans. This includes financial support of more than EUR 3.3 billion for countries in the region to address the immediate health crisis and resulting humanitarian needs, as well as longer term and structural impact on their societies and economies. Given the European perspective of the Western Balkans, the EU is also treating the region as privileged partners by associating them with the Union’s mechanisms and instruments. These include the Health Security Committee, Joint Procurement Agreements, Union Civil Protection Mechanism, Solidarity Fund, consular assistance in repatriation or exemption from temporary EU export restrictions of medical equipment. These and other measures have provided immediate relief and are a clear message of the EU’s political commitment towards the region. Due to the COVID-19 outbreak, the President of the Republic declared a state of emergency from March until June 2020. Restrictive measures were put in place to protect the citizens and contain the pandemic (e.g. curfews, limitation of non-essential movement or gatherings, freezing of air traffic and closing of borders, suspension of procedural deadlines in judicial procedures and the move to online education). These were gradually phased out beginning of May, with a three-phase plan. The authorities have also taken measures to mitigate the socio-economic impact of the crisis. In summer, the country struggled with a second wave of infections, which severely stretched the capacities of the health system. The European Commission recommended that emergency measures taken in the context of the COVID-19 pandemic are proportionate, restricted to what is necessary and limited in time so that rule of law and democratic and human rights standards are respected.

1.2. Summary of the report Concerning the political criteria, North Macedonia continued to implement EU-related reforms throughout the reporting period. Efforts continued to strengthen democracy and the rule of law, including by activating existing checks and balances and through discussions and debates in key policy and legislative issues. Opposition parties remained engaged in the Parliament and supported key issues of common national interest, such as EU-related reforms and the NATO integration process, which North Macedonia joined in March 2020. Following the outcome of the European Council in October 2019, political parties decided in common agreement to hold early parliamentary elections on 12 April 2020. In line with the national legislation, a technical government, with Ministers and Deputy Ministers from the main opposition party, was appointed in January 2020. Following the outbreak of the COVID-19 pandemic, a state of emergency was declared between March and June 2020, which enabled the technical government to rule by decree. The early parliamentary elections were postponed to July 2020. The Office for Democratic Institutions and Human Rights at the Organisation for Security and Cooperation in Europe (OSCE/ODIHR) assessed that these elections were generally well run and the campaign was genuinely competitive, but legal stability was undermined by substantial revisions of the legal framework and subsequent government decrees. During the reporting period, the Parliament improved its role as the primary forum for constructive political dialogue and fullfilled its legislative functions, including by adopting key EU-related laws. However, the significant increase of the use of fast track procedures raises concerns and should be limited. The Parliament operated in greater transparency and used its oversight functions, restoring checks and balances over the executive. The Parliament dissolved in February 2020, in anticipation of early elections, and the Speaker’s view was that it could not reconvene. Following the July 2020 elections, the newly constituted Parliament elected the government in August 2020. The inter-ethnic situation remained calm overall. Efforts were made to strengthen inter-ethnic relations and to implement the Ohrid Framework Agreement, which ended the 2001 conflict and provides the framework for preserving the multi-ethnic character of the society. Civil society remains active and plays a key role in policy and decision-making processes. Measures have been taken to implement the 2018-2020 Strategy and Action Plan for the Cooperation between Government and Civil Society. However, efforts are needed to ensure a more meaningful and timely consultation process. The ongoing reform of the intelligence services resulted in the setting up in September 2019 of the National Security Agency, designed as an independent state body without police powers, unlike its predecessor the Bureau for Security and Counterintelligence (UBK). This is in line with recommendations of the Senior Experts’ Group on systemic rule of law issues. The Operational Technical Agency continued to function. Further efforts are needed to ensure that it has access to all necessary tools to fulfil its mandate. The capacity for parliamentary oversight over the intelligence services needs to be strengthened. North Macedonia is moderately prepared with the reform of its public administration. Some progress was made in improving transparency, with the adoption of the 2019-2021 Transparency Strategy, the operationalisation of the open government data portal and the publication of data on government spending. The monitoring reports on implementation of the Public Administration Reform Strategy and the Public Financial Management Reform Programme were produced and accompanied by adequate visibility actions. Ensuring respect for the principles of transparency, merit and equitable representation remains essential. The State Commission for Prevention of Corruption continued to address allegations of nepotism, cronyism and political influence in the process of recruitment of public sector employees. A proper follow-up to the reports and recommendations of the State Commission needs to be ensured. The judicial system of North Macedonia has some level of preparation/is moderately prepared. There was good progress in the implementation of the judicial reform strategy, thereby addressing the ‘Urgent Reform Priorities’ and recommendations from the Venice Commission and the Senior Experts’ Group on systemic Rule of Law issues. Efforts are still needed to ensure systematic implementation of the updated action plan of the judicial reform strategy. Judicial institutions are implementing new rules for appointment, promotion, discipline and dismissal of judges and the Judicial Council has been exercising its role more pro-actively. As a result of its reform efforts in recent years, North Macedonia has established mechanisms to ensure judicial independence and accountability, such as rules on merit-based appointments, checking assets and conflicts of interest and disciplinary procedures. It should ensure their determined and consistent use before envisaging further changes in this area. The Law on the Public Prosecutor’s Office entered into force in June 2020. The purpose of the law is inter alia to ensure a sustainable solution for the cases of the Special Prosecutor’s Office and to establish accountability for the crimes arising from and surrounding the illegal wiretaps. The revised Law on the Council of Public Prosecutors was also adopted. Effective implementation of the legal framework as well as increased efforts by all stakeholders to demonstrate their exemplarity will contribute to increasing public trust in the judiciary. As regards the fight against corruption, North Macedonia has some level of preparation/is moderately prepared. Good progress was made through consolidating its track record on investigating, prosecuting and trying high level corruption cases. The State Commission for Prevention of Corruption has been particularly pro-active in preventing corruption and opened a high number of cases, including those involving high-level officials from across the political spectrum, in line with last year’s recommendation. Efforts continue to move forward with the Special Prosecutor’s Office cases and establish accountability for the illegal wiretaps. The former Chief Special Prosecutor was convicted in June 2020 in the first instance verdict in the so-called ‘racket case’ concerning alleged extortion and abuse of office in relation to a case of the Special Prosecutor’s Office. Corruption is prevalent in many areas and a more proactive approach from all actors engaged in preventing and fighting corruption needs to be ensured. The country has some level of preparation in the fight against organised crime. The legislative framework is broadly in line with European standards, and efforts to implement strategies against organised crime must continue. Some progress was made in meeting last year’s recommendation to establish an asset recovery office in line with the EU acquis. The office will now have to demonstrate its capacity to support a proactive policy of asset confiscation. The country is engaged in threat assessment at the regional level, and will have to broaden its scope in line with the EU practices. There is some progress at the operational level, but more needs to be done to improve the effectiveness of law enforcement in fighting specific forms of crime, such as money laundering and financial crimes. The cooperation with Europol is increasing across the different criminal areas. Coordination remains crucial for all stakeholders involved in fighting organised crime. Some progress has been made in the fight against terrorism and preventing/countering violent extremism in line with the objectives set out in the Joint Action Plan on counter-terrorism for the Western Balkans and the bilateral implementing arrangement. The legal framework on the protection of fundamental rights is largely in line with European standards. The deinstitutionalisation process is under way and resettlement of children to community-based care is being carried out. The Ministry of Labour and Social Policy is investing in community services, including to support victims of gender-based violence. It is essential that these services continue to be made available. Additional efforts are needed to address recommendations of European and international human rights bodies, particularly regarding the treatment of detained and convicted persons. The Constitutional Court’s decision to repeal the Law on Prevention and Protection against Discrimination on procedural grounds means that the country currently lacks a comprehensive legal framework on non-discrimination and an equality body. This serious gap needs to be addressed by the new legislature. It is also important for the country to enhance implementation of the legislation on hate speech and of the national action plan for implementation of the Istanbul Convention. While the set-up of the external oversight mechanism of the police is complete, the absence of genuinely independent investigators may impede the work of the unit to effectively address police impunity. The country should take urgent measures to further improve the situation in prisons and to support alternatives to detention. The country has some level of preparation / is moderately prepared in the area of freedom of expression and has made limited progress during the reporting period. The overall situation and climate in which media operates remain generally conducive to media freedom and allow for critical media reporting, although there have been some increased tensions during the COVID-19 crisis and in the context of the elections. Self-regulation efforts need to be intensified to support advancement in professional standards and the quality of journalism. It is important to ensure greater transparency of media advertising by state institutions, political parties and public enterprises. Sustainable solutions to ensure the public service broadcaster’s independence, professional standards and financial sustainability are needed. It is essential to continue supporting media pluralism, promoting professionalism, unbiased reporting and investigative journalism, and building resilience to effectively combat disinformation. The financial sustainability of independent media and working conditions of journalists remain a challenge. With regard to regional cooperation, the country maintained its good relations with other enlargement countries and participated actively in regional initiatives. It is important to continue implementing bilateral agreements, including the Prespa agreement and the Treaty on Good Neighbourly Relations with Bulgaria. North Macedonia continues to play an active and constructive role in the management of mixed migration flows. It remains on one of the main transit routes for mixed movement. It cooperates effectively with neighbouring countries and EU Member States, including with guest officers from the EU Member States on the ground. Considerable efforts to ensure basic living conditions and services for all migrants staying in the country continued. The registration of migrants and adequate protection-sensitive profiling improved but needs to be carried out in a more systematic manner. The Status Agreement with the European Border and Coast Guard Agency has not been signed yet. The problem of frequent smuggling activities at the northern border needs to be further addressed. As regards the economic criteria, North Macedonia is at a good level of preparation in developing a functioning market economy but made limited progress during the reporting period. Economic growth accelerated in 2019 as investment picked up, but, since April 2020, the COVID-19 crisis has left its mark on the economy and on public finances. The authorities have taken a range of measures supporting companies and households, to mitigate the economic and social impact of the crisis. In the reporting period, fiscal transparency was further improved. However, fiscally significant reforms of income taxation and the pensions system, introduced at the beginning of 2019, were reversed. Moreover, public capital expenditure implementation remained markedly low, and public debt stabilisation is not yet secured. Before the COVID-19 crisis, unemployment rates declined further, also for young workers, and informal employment decreased slightly. However, the impact of the COVID-19 crisis will likely reverse those positive trends. Participation rates remain low, even though the share of women in the labour market increased. The financial sector remained robust and lending to the private sector strengthened. The business environment continues to be impeded by a high share of the informal economy. North Macedonia has made some progress and is moderately prepared to cope with competitive pressures and market forces within the EU. Integration with the EU in trade and investment deepened further. Exports and manufacturing output diversified further towards higher-value products. However, skills shortages, reflecting shortcomings in the education system and the outflow of skilled workers, as well as infrastructure investment gaps impair labour productivity and the competitiveness of the economy. While measures to mitigate the immediate adverse impact of the COVID-19 crisis on growth and employment are currently prevalent, addressing these structural needs in a timely manner would support a swift post-crisis economic recovery. As regards its ability to assume the obligations of membership, the country continues to be moderately prepared in most areas, including in the areas of competition, public procurement, statistics, financial control, transport, energy. The country shows a good level of preparation in areas such as company law, customs union, trans-European networks and science and research. The country is at an early stage of preparation in areas such as free movement of workers as well as financial and budgetary provisions. Over the coming period, more focus is also needed on administrative capacity and effective implementation. The country has continued to improve its alignment with the EU common foreign and security policy. 2.Fundamentals first: political criteria and rule of law chapters 2.1. Functioning of democratic institutions and Public Administration Reform 2.1.1. Democracy The reporting period was marked by the historic decision to open accession negotiations with the EU and by the accession to NATO. North Macedonia has increased its efforts and continued to deliver tangible results in implementing key EU reforms, in particular in the areas identified in the June 2018 Council Conclusions. Efforts continued to strengthen democracy and the rule of law, including by activating existing checks and balances and though a broad public outreach, discussions and debates on key policy and legislative issues. Opposition parties remained engaged in Parliament and the main opposition party joined the technical government from January to July 2020. Due to the COVID-19 outbreak, the President of the Republic declared a state of emergency from March until June 2020. Measures were taken to protect the citizens and contain the pandemic.

Elections Overall, the legal framework is conducive to the organisation of democratic elections. Some progress was made in addressing and implementing the recommendations of OSCE/ODIHR. Due to the COVID-19 outbreak, the early elections initially foreseen on 12 April were postponed to 15 July 2020. The comprehensive review of electoral legislation should be finalised to address the previous and upcoming recommendations of the OSCE/ODIHR and of the Venice Commission, in a timely and inclusive manner. The state institutions and bodies, notably the Ministry of the Interior and the State Election Commission, should make further efforts to systematically update the voters’ list. Following the outcome of the European Council in October 2019, all political parties decided to hold early parliamentary elections on 12 April 2020. Due to uncertainties posed by the COVID-19 outbreak and the announcement of the state of emergency in March 2020, the government, supported by the political party leaders, including the opposition, decided by decree to suspend the electoral activities. Following protracted negotiations, an agreement was reached among the political parties and the early elections were rescheduled for 15 July 2020. Given the restrictions due to the COVID-19 pandemic, the OSCE/ODIHR deployed a Special Assessment Election Mission. The team assessed that the election day proceeded smoothly, despite technical challenges in publishing results and longstanding issues related to the voter registration. However, the constant changes in legislation led to uncertainties. The campaign, althought negative in tone, was genuinely competitive and participants could deliver their messages despite the limitations due to the COVID-19 situation. The turnout was 51.34 %. The coalition of SDSM and BESA Movement obtained 46 seats in Parliament out of 120, VMRO-DPMNE 44 seats, DUI 15 seats, the Alliance for Albanians and Alternative 12 seats, Levica 2 seats and DPA 1 seat. The number of women Members of Parliament dropped to 45 (37.5 %), two less than in the previous Parliament. The elections were well administered, including by the State Election Commission (SEC), which carried out its duties within legal deadlines, despite complications caused by the suspension of the electoral process during the state of emergency. To ensure the stability and professionalism of the SEC, a sustainable solution should be found concerning its composition and the length of its mandate in a transparent and inclusive manner. Despite improvements of the voters’ list, the relevant authorities need to make further efforts to update and harmonise all relevant databases to ensure the continuous accuracy of the list. The legal framework supports the conduct of democratic elections. In February 2020, substantial amendments were made to the Electoral Code. These partially addressed previous recommendations from the OSCE/ODIHR, in particular regarding registration of voters whose IDs expired after the announcement of the elections and extending possibilities to appeal against campaign violations. A day prior to the dissolution of Parliament and the call for early elections, amendments relating to key elements of the electoral process, including constituency boundaries and the redistribution of certain responsibilities among election administration and state agencies, were passed hastily and with limited consultation. The OSCE/ODIHR assessed that the legal stability was undermined by substantial revisions of the Electoral Code and subsequent ad hoc regulations enacted during the state of emergency. The reform of the electoral legislation needs to be finalised ahead of the next election cycle to implement the outstanding OSCE/ODIHR recommendations. These include, inter alia, the harmonisation of the Electoral Code internally and with other relevant laws through a comprehensive and inclusive review. Parliament The Parliament improved its role as the primary forum for constructive political dialogue and it fullfilled its legislative functions, including by adopting key EU-related laws. However, the use of the shortened procedure needs to be limited. Parliament continued to restore checks and balances over the executive, by using its oversight functions and operating in greater tranparency. All parties contributed to two successful rounds of the ‘Jean Monnet Dialogue’ with the European Parliament. The accountability for those who orchestrated and committed violence on the 27 April 2017 continued to be established. Parliament promoted the protection of human rights and deepened cooperation with the external oversight actors. The new legislature is expected to work in an inclusive manner to build upon previous achievements, while further improving its functioning. Political parties need to enhance their internal democratic processes and improve transparency of their funding. Parliament was dissolved in February 2020, ahead of the early elections initially planned for April 2020. Following the COVID-19 outbreak, the Speaker’s view was that the Parliament could not reconvene and forwarded the proposal of the technical government to declare the state of emergency to the President of the Republic. The Constitutional Court did not accept the request to examine the legality and constitutionality of the decision to dissolve the Parliament. The lack of a sitting Parliament delayed the adoption, in many sectors, of laws and strategies that had been prepared. Following the July 2020 elections, the constitutive session of the new Parliament took place in August 2020. Over the reporting period, the Parliament’s role as the main institution for political dialogue improved, with the active participation of all parliamentary parties in its work and political debates on key policy and legislative issues, including in the area of rule of law. It continued to adopt EU-related laws, with the support of the opposition in some cases which required 2/3 majority votes. The appointment of members of the Programme Council of the Public Broadcasters and the Media Agency remain outstanding as cross-party compromise could not be reached. It is positive that a State Auditor was elected in December 2019. The Parliament faced challenges in better planning and coordinating its work to ensure a more predictable law-making process. Over the reporting period, Parliament adopted over its sessions a total of 86 laws, including 22 in regular legislative procedure and 11 ratifications, including the ratification of the North Atlantic Treaty. The number of laws adopted by a shortened procedure, mostly upon proposal of Members of Parliament, rose significantly during the reporting period, which is an issue of concern – see 2.1.2. Public Administration Reform. There should be limited use of fast track procedures as they prevent proper participation of the relevant stakeholders in the legislative processes and democratic debates. Progress was made in implementing the Parliament’s 2018-2022 strategic plan. Its oversight of the executive improved, including through parliamentary questions and interpelation. The Parliament also strengthened its relations with external oversight actors. In February 2020, the Parliamentary Budget Office was launched to improve parliamentary financial oversight. All political parties participated in two rounds of the ‘Jean Monnet Dialogue’ held in June 2019 and February 2020. In January 2020, the amendments to the Law on Parliament strengthened the independence of the Parliament’s human resources. The political parties reached an agreement on key amendments to the rules of procedure, which are due to be adopted by the newly composed Parliament. These include rules on the constitutive session, strengthened governmental oversight, public hearings, the budgetary calendar and procedures for EU-flagged laws. The Parliament helped to monitor the protection of human rights and fundamental freedoms. The Club of Women Members of Parliament supported several human rights initiatives across their political affiliation. The Parliament also adopted a cross-party declaration on the right of persons with disabilities to participate in the political processes. The accountability for the violent attacks in Parliament in April 2017 continued to be established. The trial of those indicted for organising the attacks started in February 2020. Work should continue on improving the efficiency of the democratic system, including transparency on the funding of political parties, along the recommendations of the Group of States against Corruption (GRECO) – see Chapter 23 – Judicial and fundamental rights. Political parties also should improve their internal democratic processes. Governance Democratic governance continued to be consolidated, with a focus on the EU reform agenda and NATO membership. Despite occasional tensions, the technical government fullfilled its mandate to organise early elections, while dealing with the consequences of the COVID-19 pandemic, including during the state of emergency. Existing mechanisms to ensure checks and balances were activated during this period, including by the Constitutional Court. The new government is expected to work together with all parts of society to further advance the EU reforms and priorities, while addressing the consequences of the COVID-19 crisis. The inter-ethnic situation remained calm and efforts continued to strengthen inter-ethnic relations and to implement the Ohrid Framework Agreement. A government reshuffle, involving all coalition partners, took place in summer 2019. A new Ministry for Political System and Relations among Communities replaced the Government Secretariat for Implementation of the Ohrid Framework Agreement. Following the outcome of the October 2019 European Council, the President of the Republic convened a meeting with all political party leaders, who agreed initially to hold early parliamentary elections on 12 April 2020. In line with the national legislation, Prime Minister Zaev resigned and a technical government, with the participation of two Ministers and three Deputy Ministers from the main opposition party (VMRO-DPMNE), was appointed on 3 January 2020. Despite occasional tensions, the core responsibility of the technical government was to organise early elections, while ensuring the implementation of reforms necessary for EU and NATO integration. The total representation of women in the technical government was 23%, including Ministers and Deputy Ministers. Due to the COVID-19 crisis, the President of the Republic declared the state of emergency from March until June 2020, which enabled the technical government to rule by decree with the force of law. Control mechanisms were activated during the state of emergency, including by the Constitutional Court and the Ombudsman’s Office. The Constitutional Court suspended or annulled several decrees, insisting on the separation of powers, respect for the rule of law and principles of proportionality and necessity. The Ombudsman issued recommendations on protection of vulnerable categories, children and prisoners and detainees. The new government, led by Prime Minister Zaev, was elected by Parliament in August 2020 and is composed of four Deputy Prime Ministers and 15 Ministers. There are four women Ministers (20%). The inter-ethnic situation remained calm overall. A pre-electoral coalition across the ethnic lines was formed for the first time by SDSM and BESA Movement. The proposal by DUI of an ethnic Albanian candidate for Prime Minister triggered debates both within and between ethnic communities. An agency was created, along with an inspectorate to oversee the overall implementation of the law on the use of languages.

The country has been committed to decentralisation since the signature of the Ohrid Framework Agreement in 2001. In 2019, municipalities had improved their financial management and collection of local taxes. The government initiated, in partnership with municipalities and the Association of the Units of Local Self-Government (ZELS), a process to reform the legislation on the local self-government system, in order to grant municipalities additional powers and financial resources. Civil society The environment in which civil society operates has continued to improve, including with the implementation of the 2018-2020 Strategy and Action Plan for the Cooperation between Government and Civil Society. Civil society remained active and played a key role in policy and decision-making processes. However, efforts are needed to ensure a more meaningful and timely consultation process. Both governmental and non-governmental actors should ensure that conditions are in place for proper checks and balances. The legal and financial frameworks still need to be improved and implemented in practice. An empowered civil society is a crucial component of any democratic system and is recognised as such by the state institutions. The legal framework guarantees the rights of freedom of expression, assembly and association and it paves the way for an enabling environment for civil society organisations. Since the adoption of the 2018-2020 Strategy and Action Plan, good progress has been made on the work of the Council for Cooperation between Government and Civil Society. Meetings between members of the Council are more frequent. Involvement of civil society in policy and decision-making processes has continued to improve after the adoption of the 2018-2020 Strategy, although practices differ among Ministries. Further efforts are needed to ensure a more meaningful and timely consulation process. The Law on Associations and Foundations specifies that organisations may receive funds from the state budget and the budgets of the municipalities. However, adequate administrative capacity and proper organisational set-up is needed in the Government unit for NGO Corporation, including sufficient state funding to ensure proper implementation of the 2018-2020 strategy. To ensure financial sustainability and improve the institutional framework of civil society organisations, the focus should continue to be on establishing a fully functional legal framework, by implementing the 2018-2020 strategy and harmonising the related fiscal legislation. Civilian oversight of the security/intelligence sector The ongoing reform of the intelligence services resulted in the setting up of a Council for coordination the security intelligence community which has met twice in 2020 and, most importantly, in the establishment of the National Security Agency (NSA) in September 2019. The Agency has completed its recruitment procedures. Its mandate is to gather intelligence for guaranteeing state security. Unlike its predecessor, the Bureau for Security and Counterintelligence (UBK), the NSA has been designed to be an independent Agency located outside of the Ministry of Interior and without police powers. This is in line with recommendations of the Senior Experts’ Group on systemic Rule of Law issues. It is essential that the reform be fully completed and implemented, ensuring a non-partisan operation of the intelligence services. Legislation governing the Intelligence Agency and the Military security and intelligence agency still need to be revised. The Operational Technical Agency (OTA) continued to function. Further efforts are needed to ensure that it has access to all the necessary tools to fulfil its mandate. Parliamentary oversight over the intelligence services has improved, notably in the area of interception of communications, but it needs further strengthening to be efficient. The relevant parliamentary oversight committee performed several inspections and visits to the relevant institutions related to the intelligence and security sector in 2019. Nevertheless, the procedure for hiring technical experts to assist the work of the committee over interception of communications is not completed, thereby impeding its work. The capacities of all three intelligence committees in Parliament should be reinforced. The president of the Citizen Oversight Council in Parliament and his deputy resigned in June 2020 over the lack of financial resources allocated to this body. There is an urgent need to ensure required resources to make the Council fully functional. Civilian oversight of the security/intelligence sector needs to be ensured as this will also have a positive impact on alleviating public mistrust in the intelligence institutions. All relevant laws need to be swiftly implemented, in cooperation with NATO and strategic partners. 2.1.2 Public administration reform North Macedonia is moderately prepared with the reform of its public administration. Some progress was made in improving transparency, with the adoption of the 2019-2021 Transparency Strategy, the operationalisation of the open government data portal and the publication of government finances data. The monitoring reports on implementation of the Public Administration Reform Strategy and the Public Financial Management Reform Programme were produced and accompanied with adequate visibility actions. The public consultation process improved, with an increasing number of comments to draft regulations and greater involvement of civil society in policy-making. Ensuring respect for the principles of transparency, merit and equitable representation remains essential. The State Commission for Prevention of Corruption continued to address cases of nepotism, cronyism and political influence in the process of recruitment of public sector employees. A proper follow up to the reports and recommendations of the State Commission needs to be ensured. In terms of accountability, after a long delay, the heads of the Directorate for Personal Data Protection, the Agency for Free Access to Public Information and the State Audit Office were finally appointed at the end of 2019 and in January 2020. The new government should ensure that the public administration reform remains a priority, demonstrate full respect for the public administration reform principles and follow on the reform efforts of the previous government. Further efforts are needed to address some of the 2019 recommendations. In the coming period, the country should, in particular: ®put in place a legislative framework that ensures full respect of merit-based recruitment for senior civil service and other positions; ®finalise the horizontal functional review and start implementing it to ensure clear accountability lines between institutions; ®ensure full implementation of the Law on General Administrative Procedures. Strategic framework for public administration reform A number of state institutions and civil society organisations were pro-active in the implementation, monitoring and reporting of the 2018-2022 public administration reform strategy and the 2018-2021 public financial management reform programme. The high-level Public Administration Reform Council and the Public Financial Management Council continued to ensure the political support for and supervision of reforms. The Ministry of Information Society and Administration’s capacity to drive the reform at technical level improved. The Ministry of Finance’s involvement in the overall reform coordination increased, also thanks to a greater focus on managerial accountability (see Chapter 32 – Financial Control). The public administration reform is costed as a separate budget programme in the state annual budget but the PAR budget was decreased as a result of reallocation of resources to economic measures in response to the COVID-19 crisis. Policy development and coordination The legal framework and institutional structures for a coherent policy-making system are in place. The responsibilities of some policy-making institutions need to be clarified and revised to ensure there are no overlaps. New negotiating structures to manage the process of EU integration were set up in July 2019. At technical level, the quality of the EU integration coordination system for policy measures and providing assistance needs to improve. Policy planning needs to be strengthened and to be consistent with the medium-term budgetary planning. The central coordination and quality control role of the General Secretariat remains insufficient. Evidence-based policy and legislative development continue to be partially ensured. Administrative data collection improved but this data needs to be more consistently used in the decision-making process. Regulatory impact assessments were regularly prepared for all laws that the government sent to Parliament in regular procedure until autumn 2019, when a number of laws were promulgated by Parliament without impact assessments and public consultations. The quality of regulatory impact assessments needs to be further improved, and the budgetary impact assessments are either missing or are not comprehensive. Inter-ministerial consultations at various levels increased, but they still need to be properly integrated in the process. Inclusive participation in public consultations continued to be encouraged through the national electronic consultation system. The quality control of the public consultation process needs to improve. The number of laws adopted under shortened procedures, mainly upon proposals of Members of Parliament, significantly increased standing at 61.6% in 2019, compared to 20% in 2018, which raises concerns (see 2.1.1. Democracy). These laws did not undergo a proper public consultation process and were not regularly underpinned by impact assessments. The quality of legislative drafting also remains an issue. Public scrutiny of government work continued to improve thanks to an increase in published government monitoring reports and improved communication. Public financial management

The national authorities continued to implement the 2018-2021 public financial management (PFM) reform programme and 2019 Action Plan. The 2019 annual progress report on the implementation of the programme was adopted and published on the Ministry of Finance’s website. The PFM Council meets twice per year in order to monitor the implementation of the programme. There have been considerable delays in finalising and adopting of the new Organic Budget Law. The 2020-2022 fiscal strategy was adopted following a parliamentary debate. It was supplemented by a comparative analysis of the mid-term projections made by national authorities and international institutions. In addition, data was provided on the main financial indicators for state-owned public companies for 2018 (transfer of funds from the budget to public enterprises as well as paid gains and dividends in the budget of public enterprises and joint stock companies in state ownership). Efforts were made to increase domestic revenue mobilisation and to improve public procurement procedures (see also Chapters 5, 16 and 29). There has been some progress on improving budget transparency in the management of public finances. Various monthly and quarterly budgetary reports and data are regularly published on the Ministry of Finance’s website, including the 2019 citizens’ budget. The ‘citizens’ budget’ web application gives users access to and an overview of the budget through an interactive interface. It provides information on budget planning, distribution and income. The ‘open finance’ portal also went live, providing the general public with detailed information on all budget users’ transactions (at central level). The process to prepare the 2020 budget was improved and included open public consultation. The budget was amended twice in the first half of 2020 to meet the costs arising from the COVID-19 crisis. Parliamentary scrutiny on budget preparation and execution needs to be improved. Transparency and accountability of management of public funds has to be ensured through efficient monitoring mechanisms both by the executive and by the Parliament. This includes following up on the State Audit Office’s recommendations. See also Chapter 32. Public service and human resources management The Law on Administrative Servants and the Law on Public Sector Employees ensure merit-based recruitment and fair promotions and dismissals. However, they are not systematically applied across the administration. The Law on Internal Affairs includes contradictory rules that allow employees to be excluded from the provisions of the Law on Administrative Servants. Procedures for temporary or service employment contracts, with lower criteria, are still frequently used, bypassing the criteria set in the Law on Administrative Servants. The grounds for dismissals should be made more transparent. The State Commission for Prevention of Corruption published the results of its investigations into some of the cases involving public allegations of appointments of family members by the previous governments. It also issued proposals for further changes in the recruitment processes of public institutions to make them more transparent and merit-based. Its findings and recommendations need to be systematically followed-up by the concerned institutions. See Chapter 23 – Judiciary and fundamental rights. The Ministry of Information Society and Administration reinforced its coordination and monitoring role for the management of human resources across the public administration. The willingness and capacity of all involved institutions need to be increased to ensure the legislation is applied systematically. Line institutions’ use of the human resources management information system increased, although it could be further exploited. The remuneration system needs to be revised to ensure more consistent levels of pay and to promote mobility. The representation of women in the public service is over 50%, including in middle management. Women are, however, less represented in top management positions. Equitable representation of minorities remains inconsistent across the public sector and across all categories of civil servants. There is still a higher representation of some minorities in the institutions whose hierarchy includes that minority. Smaller ethnic minorities remain underrepresented in the public sector. The number of public employees without a formal assignment, who were recruited years ago and continue to receive a salary without having to show up for work, went down slightly, as a number of them were finally assigned jobs in 2019. A decision on the final job assignment for the remainder of these employees needs to be taken by the relevant institutions, as this long-standing issue undermines the principles of merit and effectiveness. The principle of equitable representation and fair representation of men, women and ethnic groups should be applied across the public sector. Professional development is still not systematic. There is no centralised database of the training offered by various institutions. Integrity in the public service is well regulated, including whistle-blower legislation. However, no data is available on how the integrity mechanisms, including whistle-blower legislation, are implemented in practice, nor on whether and how whiste-blowers are protected against retaliation actions. Accountability of the administration The functional review of 128 central government institutions was launched. The development of a proposal for reorganisation of functions per policy area was postponed as a result of the COVID-19 outbreak. The reorganisation should improve the administration’s efficiency and lines of accountability. Some institutions still report to both their line ministry and to the government in parallel. Steps were taken at both central and local level to improve managerial accountability and to delegate responsibility to various management levels although delegation of decision-making authority to middle management remains limited. Further efforts are needed to efficiently mainstream managerial accountability across the whole public administration (see Chapter 32 - Financial Control). Legislation ensures that citizens’ right to good administration is protected by the independent institutions, especially the Ombudsman and the State Audit Office. Systematic follow-up to their recommendations is not yet ensured. Citizens’ right to access public information further improved thanks to the 2019-2021 transparency strategy adopted in November 2019, which includes setting up an open government data portal and publishing data on government finances. To ensure the system’s smooth functioning, all institutions need to regularly provide and update the data. A new Law on Free Access to Public Information, adopted in May 2019, authorises the Agency for Protection of Free Access to Public Information to monitor compliance with the rules on proactive disclosure of information, and reduces the grounds upon which requests for public information can be refused. The Agency’s capacity to implement the new law needs to be strengthened. Being without a director from May 2018 until January 2020, the Agency did not respond to appeals during that period, leading to an increase in unanswered requests for public information from public information providers. The director and deputy director were finally appointed in January 2020. The COVID-19 crisis has led to further delays in responding to requests for public information by many institutions. The Law on Administrative Disputes was adopted in May 2019. In practice, the appeal procedure for citizens’ right to administrative justice remained onerous, complex and lengthy, comprising several appeal layers and numerous repetitions of procedures. Most of the decisions are not based on merit, but on procedural considerations. There were delays in enforcing administrative court rulings, which were themselves rarely decided on merit. The legislation defines the citizens’ right to seek compensation and the liability of public authorities in cases of wrongdoing. In 2019, courts awarded compensation for damages in nine cases. Service delivery to citizens and businesses The national e-portal for services was upgraded to create a more user-friendly administration. The portal aims to serve as a single digital contact point with the state administration, enabling equal access for all. More commitment by all state institutions is needed to exploit the full potential of the e-portal. The population register became operational, serving as a basic source of information about the interaction of both state institutions and the public with the administration. The COVID-19 crisis has proved the importance of digitalising the public administration and strengthening the provision of online services to citizens and businesses through the e-portal. A Law on Electronic Management and Electronic Services was adopted in May 2019. Quality management tools, such as standards for services and guidelines for optimising services, were introduced. The interoperability framework increased in scope, but political will and funding are needed for it to reach its full potential. Simplifying administrative procedures has been difficult and the Law on General Administrative Procedures is not yet systematically implemented across the administration. The government adopted a decree-law allowing for some legal deadlines set in the Law to be extended during the state of emergency resulting from the COVID-19 outbreak. Further training and awareness-raising are needed to ensure legal certainty for citizens and businesses. 2.2 Rule of law and fundamental rights 2.2.1 Chapter 23: Judiciary and fundamental rights The EU’s founding values include the rule of law and respect for human rights. An effective (independent, quality and efficient) judicial system and an effective fight against corruption are of paramount importance, as is the respect for fundamental rights in law and in practice. The country has some level of preparation / is moderately prepared to apply the EU acquis and European standards in this area. Overall, good progress has been made, including through strengthened judicial independence and addressing instances of police impunity. New reforms have been adopted, including the Law on the Public Prosecutor’s Office, ensuring accountability for the crimes arising from and surrounding the illegal wiretaps. The implementation of previously adopted measures under the judicial strategy is under way. The State Commission for Prevention of Corruption has used its reinforced powers and continued to deliver results, including on high-level cases. Corruption is prevalent in many areas and remains an issue of concern. There was limited progress on fundamental rights. As regards the legal and policy framework, following its repeal by the Constitutional Court, the priority for the new legislature will be to re-adopt the Law on Prevention and Protection against Discrimination and establish the Commission for Prevention and Protection against Discrimination. The Ombudsman’s Office has additional staff and funding to exercise its role. Sustained efforts are needed to further improve the human rights situation in practice. It is essential to complete the appointment of members of independent and regulatory bodies based on merit. The functional independence of these bodies must be guaranteed at all times, including through appropriate allocation of funds.

Functioning of the judiciary The judicial system of North Macedonia has some level of preparation/is moderately prepared. There was good progress in the implementation of the judicial reform strategy, thereby addressing the ‘Urgent Reform Priorities’ and recommendations from the Venice Commission and the Senior Experts’ Group on systemic Rule of Law issues. Efforts are still needed to ensure systematic implementation of the updated action plan of the judicial reform strategy. Judicial institutions are implementing new rules for appointment, promotion, discipline and dismissal of judges and the Judicial Council has been exercising its role more pro-actively. As a result of its reform efforts in recent years, North Macedonia has established mechanisms to ensure judicial independence and accountability, such as rules on merit-based appointments, checking assets and conflicts of interest and disciplinary procedures. It should ensure their determined and consistent use before envisaging further changes in this area. The Law on the Public Prosecutor’s Office entered into force in June 2020. The purpose of the law is inter alia to ensure a sustainable solution for the cases of the Special Prosecutor’s Office and to establish accountability for the crimes arising from and surrounding the illegal wiretaps. The revised Law on the Council of Public Prosecutors was also adopted. Effective implementation of the legal framework as well as increased efforts by all stakeholders to demonstrate their exemplarity will contribute to increasing public trust in the judiciary. In the coming year, the country should, in particular: ®continue the consistent implementation of the judicial reform strategy and the updated action plan in an inclusive manner, and demonstrate firm commitment to the independence of the judicial system, shielding it from any risk of political interference, including by using available mechanisms to verify the professionalism and integrity of judges and prosecutors; ®finalise and start implementing the human resources strategies for the judiciary and prosecution, and improve the automated court case management information system (ACCMIS) to ensure that it is fully functional and reliable; ®continue implementing the new legal framework related to reform of the Judicial Council and the Council of Public Prosecutors and the new law on the Public Prosecutor’s Office. Strategic documents Implementation of the Strategy on Judicial Reform (2017-2022) continued. Importantly, the Law on the Public Prosecutors’ Office and the amendments to the Law on the Council of Public Prosecutors entered into force. However, there were delays in the adoption of some legislative measures. To address this and ensure effective implementation, an update to the Action Plan was approved in October 2019. Efforts to implement the latter should be stepped up. The Council for Monitoring the Implementation of the Judicial Reform was not able to meet due to the COVID-19 crisis and has yet to adopt the second annual implementation report. Management bodies The Parliament elected three new members of the Judicial Council, in line with the Law on Judicial Council and meeting the requirement of equitable representation. Another member was elected by judges. In December 2019, the Judicial Council took further steps to ensure its effective functioning by adopting rules of procedure and other implementing legislation. The Council has demonstrated an increasingly proactive attitude in delivering on its mandate as guardian of the independence and impartiality of judges. The President of the Council was the main contact point with the media and the public was regularly informed on the ongoing work via press releases. Six members of the Council of Public Prosecutors were elected, one by the Parliament and one each by the prosecutors from the Higher Public Prosecutor’s Office of Štip, Skopje, Bitola and Gostivar areas, as well as from among the prosecutors from non-majority communities. The amendments to the Law on the Council of Public Prosecutors adopted in February 2020 provide for strengthened competences, streamlined procedures for appointment and promotion, accountability of its members and procedures for their recusal, introduce competences with regard to disciplinary proceedings against public prosecutors, and provide for financial independence of the Council. The Council, in line with the amended law, needs to provide reasoning of its decisions on appointments.In order to enforce the new measures, the Council needs to adopt a rulebook on the procedure for establishing liability of public prosecutors. A positive step is the publication of agendas for sessions and Council decisions on its website. The Council still lacks the human and financial resources necessary to perform its tasks effectively. Independence and impartiality The Constitution guarantees judicial independence. Implementation of measures under the judicial reform strategy is ongoing and have contributed to improving the independence of the judiciary but some of the reforms have yet to bear all their fruits. Full implementation of the principles of independence and transparency needs to continue notably to curb any criticism of the judicial system succumbing to the executive, including by ensuring appointments are fully based on merit and competence. It remains essential to ensure the judiciary is shielded from any risk or perception of political interference. The Judicial Council has played an active role by stepping up its efforts to protect judges’ independence and to strengthen the sector’s resilience against potential external or internal pressure, for instance by publicly condemning derogatory statements or threats in two cases. The Association of Judges has also been active in this regard. The Association continued to actively support reforms. The Chief Special Prosecutor’s mandate expired in September 2019 and cases were transferred to the State Public Prosecutor. After her arrest in August 2019, the Chief Special Prosecutor resigned in September and was subsequently formally dismissed by Parliament. She was indicted for accepting bribes and misuse of office in October in the so called ‘racket case’ concerning alleged extortion and abuse of office in relation to a case of the Special Prosecutor’s Office. In a significant development, she was convicted in first instance to seven years’ imprisonment in June 2020. Efforts need to continue to put an end to corruption at all levels. In establishing accountability, the manner in which the SPO trial cases are handled and ultimately closed will be an important signal to restore trust in the system and end impunity. The prosecutors from the Special Prosecutor’s Office formally returned to their original Public Prosecution Offices and continued to be in charge of their cases. Due to the inconsistency of proceedings during the transition period, some cases reached the statute of limitations and some trials had to restart. Following intensive discussions, a new Law on the Public Prosecutor’s Office was adopted in February 2020, ensuring sustainability of the SPO’s work and accountability for the crimes arising from and surrounding the wiretaps. The law aims to provide a basis for a professional and impartial prosecutorial system, which is more resilient to political and other pressures, but a lot will depend on proper implementation. On court case management, the inspections of the automated court case management information system (ACCMIS) continue and have yielded initial results. In August 2020, the former president of the Skopje Criminal Court was sentenced at first instance to 3.5 years in prison for manipulation of ACCMIS. Deficiencies identified previously in the system, such as reliability of statistics, remain to be addressed. The Law on court case management was adopted by Parliament in February 2020, providing safeguards to ensure a smooth functioning of the system, including by mandatory use of ACCMIS in assigning and managing the flow of cases. Continued commitment is needed to ensure the system’s capacity to produce automatically reliable statistical data (in line with the recommendations and methodology of the CEPEJ) about the performance of both judiciary and prosecution. Accountability The Judicial Council lifted the immunity of one of its members who is the main suspect in a case concerning the illegal privatisation of construction land, but did not allow for his detention, and of one judge. A new Council for Judicial Ethics was established under the new Code of Ethics and met for the first time in February 2020. Breaching of the Code of Ethics is not listed as a ground for disciplinary procedure in the law. In 2019, the Academy for Judges and Prosecutors organised 11 training sessions on ethics, ethical behaviour, and anti-corruption measures for 200 professionals in the judiciary. The Judicial Council received 107 requests for determining the responsibility of a judge/president of court in 2019, filed mainly by parties in court cases. It dismissed the President and two judges of the Supreme Court, as well as 3 other judges, including the former President of the Basic Criminal Court in Skopje for tampering with the case management system. Demonstrating accountability for wrongful acts will help foster a culture of independence, and impartiality in the judiciary. Professionalism and competence In line with the new legal framework, the Judicial Council changed the system of appointment and promotion and has yet to approve qualitative criteria in the professional evaluation of judges. In the reporting period, the Judicial Council appointed 28 judges and 16 Presidents of courts, and allowed 32 retired judges to perform their tasks for an additional year. The Council of Public Prosecutors appointed 18 graduates from the Academy for Training for Judges and Prosecutors to serve as prosecutors in Basic Public Prosecutors Offices, appointed heads of four Basic Public Prosecutor’s Offices and allowed 12 retired prosecutors to perform their tasks due to staff shortages. The two Councils appointed 31 out of 37 graduates of the 6th generation at the Academy for Judges and Prosecutors. The appointment process was completed in line with the new requirements of the Law on the Judicial Council, whereas the new legal framework for the Council of Public Prosecutors entered into force in June 2020 and implementing legislation is being prepared. No complaints or appeals on these appointments were lodged. Both Councils improved transparency, procedures, and respected the principle of meritocracy in appointments and promotions. The Academy for Judges and Prosecutors organised a total of 253 in-service training sessions for 5,661 professionals.

Quality of justice The Academy for Judges and Prosecutors continued to improve its operation, by strengthening its curricula for basic and continuous training. The draft Law on the Academy for Judges and Prosecutors, which incorporates several key recommendations from a peer review mission on judicial training and reaffirms the Academy as the sole point of entry to the judiciary, is due to be adopted by the new composition of the Parliament. The Academy is an observer to the European Judicial Training Network (EJTN) but is not proactively benefiting from the expertise of the network. The post of Deputy Director remains vacant since the establishment of the Academy in 2006. The initial programme for 60 candidates of the 7th generation – a significant increase in numbers – will start in autumn 2020. It is essential to further consolidate the Academy, including by guaranteeing adequate human resources as well as appropriate office and training space. The Supreme Court, in cooperation with four Courts of Appeal stepped up its efforts to improve the consistency of judgments and to harmonise court practice. Some courts improved their consistency in uploading judgments onto the central database, allowing for greater online access to jurisprudence. It is essential that this is done in a systematic manner. The allocations of the 2020 state budget saw an increase of approximately 6% for the courts and a decrease of 15% for the Public Prosecution Office. According to CEPEJ data, the budget expenditure for courts and prosecution offices remains lower than the Western Balkan average, at EUR 21 per inhabitant while the Western Balkan average for the judicial system (courts, prosecution services and legal aid) is EUR 41.4. There are respectively 496 professional judges in the country (23.88 per 100 000 inhabitants), 198 men and 298 women and 190 prosecutors (9.15 per 100 000 inhabitants), with 89 men and 101 women. A total of five new members of staff were hired in courts and 106 under temporary contracts, and 37 in the Public Prosecutors' Offices. It remains essential to ensure an adequate assessment of the needs, notably in the prosecution service and evidence-based human resource strategies, currently under preparation, should be adopted. It is equally important to ensure adequate staffing, including expert associates, and the provision of funds to renew and properly maintain the IT infrastructure in the judiciary. The implementation of the IT strategy for the justice sector is heavily dependent upon foreign assistance and funding. Three new IT staff were recruited in the Public Prosecutor’s Offices but none in the courts. The recruitment of IT staff is difficult due to uncompetitive salaries. Efforts are needed to further promote the use of alternative dispute resolution, including through the relevant chambers. The number of mediation cases has decreased over recent years, notably as regards labour disputes. Efficiency Nearly all courts continued a positive trend by maintaining a clearance rate of 100% or higher, with the exception of misdemeanour and second instance administrative cases. Overall, only unfinished cases under the old procedural laws suffer from protracted proceedings, impeding their resolution. In its Opinion on the Law on Use of Languages, the Venice Commission invited the legislator to re-examine the law and to take into account, in consultation with all parties concerned, its recommendations, including on provisions related to bilingualism in judicial proceedings. The average salaries of judges and prosecutors are slightly below the Western Balkan average. Judges are yet to receive all supplements to their salaries related to complexity and sensitivity of cases they handled. The claims in the judicial administration, including for career advancement, are pending. The delayed preparation of comprehensive human resources strategies for the judiciary and public prosecution is negatively affecting proper planning and allocation of human and budgetary resources, including the revision of court and Public Prosecutor’s Office networks in the country. Bailiffs reacted to the reduced tariffs for their services by organising public protests and threatening to leave the profession. The overall cost and duration of enforcement procedures should be addressed in all layers of the enforcement chain, not solely at the bailiffs’ level. The mandatory presence of an attorney, including for payment orders procedures and for inheritance cases, is restricting or impeding access to justice for the poorest citizens. In May 2020, the Constitutional Court annuled the article in the Law on enforcement on payment of interest rate from the debtor’s account. The Ministry of Justice started to publish its annual plan for regular inspections of enforcement agents as well as the final decisions of the disciplinary committee of the Chamber of private enforcement officers on its website, to increase transparency. However, the monitoring with specific indicators should be further enhanced. Following the outbreak of COVID-19, the government adopted a decree suspending all deadlines for initiating and ongoing criminal, civil and non-contentious court cases, administrative disputes, misdemeanours, and proposals for enforcement or securing of claims until the end of the state of emergency. Exceptions were made for cases close to reaching statute of limitations. Based on this decree, courts published lists of urgent cases which were set to continue, including ones involving detention. Courts also implemented preventive health measures and introduced hearings via online communication tools, whenever possible. Following the decree and instructions from the Judicial Council, a majority of the courts adopted internal acts to regulate their work but there is an absence of clear and precise regulation. The Judicial Council instructed the courts to prioritise cases dealing with domestic violence. A majority of the judges donated 20% of their April and May salaries to the fund for fighting againts COVID-19. In June, courts started to gradually resume their regular functions. Among the lessons learned from the crisis, it appears necessary to have measures in place for the organisation and work of courts, as well as for communication of the judiciary with the wider public during states of emergency. Additionally, IT connections need to be prioritised, including full digitalisation of cases and summoning, ensuring training for judges and judicial staff. Fight against corruption North Macedonia has some level of preparation/is moderately prepared in the prevention and fight against corruption. Good progress has been made as the country consolidated its track record on investigating, prosecuting and trying high level corruption cases. The State Commission for Prevention of Corruption has been particularly pro-active in preventing corruption and opened a high number of cases, including those involving high-level officials from across the political spectrum, in line with last year’s recommendation. Efforts continued to move forward with the Special Prosecutor’s Office cases, thereby establishing accountability for the illegal wiretaps. The so called ‘racket’ case has raised serious concerns. The former Chief Special Prosecutor was convicted in June 2020 in the first instance verdict. After expiry of the mandate of the prosecutors of the Special Prosecutor’s Office, cases were transferred. In the coming year, the country should, in particular: ®implement the new legislation transfering some of the prerogatives of the former Special Prosecutor’s Office to the Office of the Public Prosecutor for Prosecuting Organised Crime and Corruption and regulating the status of the wiretaps so that accountability for the crimes arising from and surrounding the wiretaps continues; ®increase the track record of final convictions in high-level corruption cases including by further confiscating criminal assets; ®demonstrate political will to fight corruption by supporting relevant bodies with further financial and human resources and by providing clear policy guidance to all state institutions on how to tackle corruption in line with the State Commission for Prevention of Corruption’s recommendations. Track record The State Commission for Prevention of Corruption (SCPC) has been pro-active in preventing corruption and opened a high number of cases. Progress in investigating, prosecuting and trying corruption cases has continued, including targeting high level officials. There were some new high level corruption cases. After the expiry of their mandate, the prosecutors of the Special Prosecutor’s Office (SPO) were transferred back to their Public Prosecutor’s Office of origin. They retained competence over their SPO cases. Since autumn 2019, a total of 25 cases involving 178 persons were transferred from the Special Prosecutor’s Office to the Public Prosecutor’s Office for Prosecuting Organised Crime and Corruption. Most of them concern abuse of office or position, falsification or forgery of documents, embezzlement, money laundering and fraud. There were final convictions in three cases against four defendants. A former Minister of the Interior was sentenced to six years imprisonment. In the second case, the court found a businessman and one of his associates guilty of forging documentation for winning a tender from the state-owned electricity generation company. The legal entities involved in the case were also found guilty. The asset confiscation verdict was confirmed on appeal. In the third case, the accused received a suspended sentence of six months’ imprisonment with two years’ probation. Trials are ongoing in 10 cases, with several dozen hearings throughout the year. Due to inconsistency of proceedings, some cases reached the statute of limitations while others were forced to restart. The Public Prosecutor for Prosecuting Organised Crime and Corruption has opened ten new investigations involving 55 individuals and one legal entity in high-level cases (compared to five cases involving seven suspects in 2018)). In total, there are six ongoing cases involving 38 individuals and one legal entity. Some cases involve high-level officials such as the former Chief Special Prosecutor who was convicted in first instance to seven years imprisonment. The court issued first instance judgments against seven of the accused. The trend of investigating and prosecuting high-level cases needs to continue. Regarding investigations of other officials such as administrative Directors, the Public Prosecutor for Prosecuting Organised Crime and Corruption ordered 24 new investigations involving 78 suspects. In 11 cases involving 41 individuals, investigations were closed (half of the cases initiated in 2017).

In 2019, the State Commission for Prevention of Corruption received 7275 declarations of assets. As regards conflict of interest, the State Commission may initiate a procedure for determining the facts ex officio, or at the request of a third party. From February 2019 until 31 March 2020, the State Commission opened investigations over allegations of nepotism in the public administration in 82 cases. It closed 40 cases because no conflict of interest was determined or because the conflict of interest was removed. In two cases, the cases were transferred to the Public Prosecutor’s Office. In 16 cases, the competent institutions were requested to act on the State Commission’s recommendations and in 11 cases, the procedure is still ongoing. Due to some legal requirements and deadlines (e.g. to obtain information from other bodies), not all cases could be resolved yet. In addition, the State Commission received requests for opinions from officials themselves or institutions on whether or not there is a potential conflict of interest. There are 213 requests still pending while 84 are closed. In 2019, the department for internal control criminal investigations and professional standards brought charges against six law enforcement officers for allegations of corruption. All are under investigation. In 2018, the Council of Europe Group of States against Corruption (GRECO) had concluded in its compliance report on the ethics and integrity of parliamentary members, judges and prosecutors, that out of 19 recommendations, six were satisfactorily implemented, eight were partially implemented and five were not implemented. The recommendations which were fully implemented concerned mainly the judiciary and legal amendments adopted in the Law on judicial council and the Law on courts. Those recommendations which were not implemented concerned mainly prevention of conflict of interest, contacts with lobbyists, and sanctions for misconducts. In 2019, the country has undertaken key reforms further addressing those recommendations by revising the legal framework for prevention of corruption and conflict of interest and appointing a new State Commission for Prevention of Corruption vested with additional powers. As regards ethics, progress was made with the adoption of a new Code of Ethics for Judges and Lay Judges as well as guidelines for its implementation, and adoption of amendments to the Code of Ethics for Public Prosecutors. Along the recommendations of GRECO on prevention of corruption and promotion of integrity at the central government and the law enforcement agencies, the government adopted a new Code of Ethics for members of the government and holders of public functions appointed by the government. Institutional framework Prevention measures A new State Commission for Prevention of Corruption was appointed in February 2019. In accordance with the new law, selection criteria for all members are stricter and require increased experience and a proven track record in the detection and prevention of corruption. The Commission is vested with additional powers that reinforce its capacity to verify statements of interest and assets and reinforce its authority. The State Commission for Prevention of Corruption has announced its intention to look into allegations of misuse of authority and funds during the COVID-19 crisis, including in the area of public procurement. The work of the State Commission in this respect is important to maintain the trust of the citizens in the institutions. The Commission has the right to initiate misdemeanour procedures. Its budget has steadily increased. The State Commission deserves to be further consolidated and continue to be supported with an appropriate methodology and resources. There are several codes of ethics in place in various state institutions. Efforts continue to improve transparency of public institutions. However, they need to be complemented by an effective and timely control mechanism for public procurement, concessions, public-private partnerships and execution of public contracts. There is a need to be able to apply administrative penalties to contracting authorities in case of breach of the procurement law. The State Audit Office’s IT needs to be connected with other relevant institutions. Law enforcement The main institutions dealing with law enforcement are the Department for Serious and Organised Crime within the Ministry of the Interior and a specialised Public Prosecutor's Office for Prosecuting Organised Crime and Corruption within the Public Prosecutor's Office. The newly established investigative centre/judicial police in the Prosecutor’s office must demonstrate its capacity to support the office in stepping up its investigations. It also needs to improve a comprehensive strategic approach to fight corruption. A new law on the Public Prosecutor’s Office has been adopted to enable the Public Prosecutor for Organised Crime and Corruption to inherit some of the prerogatives of the Special Prosecutor’s Office thus ensuring long-term accountability for the crimes arising from and surrounding the illegal wiretaps. The Public Prosecutor's Office must demonstrate its capacity to be proactive in pursuing cases referred by the State Commission for Prevention of Corruption, the State Audit Office and other institutions. The electronic case management system at the Public Prosecutor’s Office is in place but must become more efficient. In addition to the positive trend of adopting temporary measures for freezing bank accounts and property, the seizure and confiscation of criminal assets need to be increased. Legal framework North Macedonia is party to all international anti-corruption conventions, including the United Nations Convention against Corruption. The 2018 Law on Prevention of Corruption and Conflict of Interests has increased the powers of the State Commission for Prevention of Corruption. The Law on the Financing of Political Parties stipulates the manner and procedure for providing financial means to political parties and ensure their management. Rules on the financing of pre-electoral campaigns are set out in the Electoral Code. The State Audit Office exercises ex-post control. In 2019, the audit of regular operations of five political parties was initiated. The State Audit Office is also currently conducting an audit of electoral campaign expenses of candidates for the 2019 presidential elections. In the course of 2018 and 2019, 21 final audit reports were submitted to the Public Prosecutor's Office and two were submitted to the State Commission for Prevention of Corruption on suspicion of a misdemeanor offence. The State Commission can carry out inspections on party financing. The law on free access to public information can be utilised to obtain information on public financing of political parties. The Law on lobbying adopted in 2008 regulates lobbying activities, the registration of lobbyists and includes a supervision mechanism. Its implementation needs to be stepped up. The country needs to regulate rules of engagement between members of Parliament and lobbyists as recommended by GRECO. The Law on the Protection of Whistle-blowers requires further alignment with the new EU acquis. Strategic framework The State Programme for Prevention and Repression of Corruption and Reduction of Conflict of Interests, with a multiannual action plan (2016-2019), is the fifth strategic document. The SCPC has adopted a new national strategy for 2020-2024 with an analysis of the sectors with the highest risks for corruption and prioritisation of these sectors for future action. The strategy was drafted in an inclusive process, involving relevant stakeholders and experts. It needs to be adopted by the Parliament. Fundamental rights

The legal framework on the protection of fundamental rights is largely in line with European standards. The deinstitutionalisation process is under way and resettlement of children to community based care is being carried out. The Ministry of Labour and Social Policy is investing in community services, including to support victims of gender-based violence. It is essential that these services continue to be made available. Additional efforts are needed to address recommendations of European and international human rights bodies, particularly regarding the treatment of detained and convicted persons. The Constitutional Court’s decision to repeal the Law on Prevention and Protection against Discrimination on procedural grounds means that the country currently lacks a comprehensive legal framework on non-discrimination and an equality body. This serious gap needs to be addressed by the new legislature. It is also important for the country to enhance implementation of the legislation on hate speech and of the national action plan for implementation of the Istanbul Convention. While the set-up of the external oversight mechanism of the police is complete, the absence of genuinely independent investigators may impede the work of the unit to effectively address police impunity. The country should take urgent measures to further improve the situation in prisons and to support alternatives to detention. In the coming year, the country should, in particular: ®swiftly re-adopt the Law on the Prevention and Protection against Discrimination, ensuring it is in line with the EU acquis and European standards on non-discriminationand that provisions of the previously adopted law, including the list of protected grounds, be preserved, and establish the Commission for Prevention and Protection against Discrimination; ®accelerate efforts to address recommendations of international monitoring bodies, notably with regard to the rights of persons in detention/prison; promote, protect and guarantee rights of persons with disabilities, children, and women; ®improve community services to identify children at risk and to support children victims of violence, Roma children and adults, and children with disabilities, including by improving inter-agency cooperation. North Macedonia has ratified most international human rights instruments. In January 2020, the country acceeded to the 1961 UN Convention on the Reduction of Statelessness. The country needs to make additional efforts to ensure recommendations of international monitoring bodies are addressed. In April 2020, following the declaration of the state of emergency in the context of the COVID-19 crisis, the country informed the Council of Europe that, pursuant to article 15 of the European Convention on Human rights, it would exercise its right to derogate from its obligations under the Convention, thereby suspending or restricting certain human rights and fundamental freedoms guaranteed under the Constitution. In order to curb the spread of the disease, the government introduced measures restricting freedom of movement and assembly. Control mechanisms have been activated. The Constitutional Court has a mandate to review any decree adopted by the government and it has been actively performing its prerogatives. In 2019, the European Court for Human Rights found violations of the European Convention on Human Rights in 9 out of 12 cases, relating mainly to right to a fair trial and property rights. In 2019, new applications allocated to a decision-making decreased further to 262, from 305 the previous year. At the end of 2019, there were 345 cases pending before the Court. The country reduced the number of judgements still to be executed to 36, of which five are under enhanced supervision. The Council of Europe Committee of Ministers' Deputies closed its examination of the execution of the judgment in the El Masri case. The promotion and enforcement of human rights continued to be strengthened with a new competence granted to the Ombudsman who, in December 2019, became the National Rapporteur on Human Trafficking and Illegal Migration. The Parliament appointed three new Deputy Ombudspersons. The Office’s budget was increased by 19% compared to 2018, and an additional 8 staff were recruited. Out of 3,453 complaints received in 2019, the highest number concerned the judiciary (notably bailiffs) followed by consumer rights, labour relations, penitentiary institutions and children’s rights. The highest number of violations was confirmed in the judiciary, followed by children’s rights, finances, health protection and consumer rights. The authorities need to improve their responsiveness to the Ombudsman’s recommendations. As regards the prevention of torture and ill-treatment, the government continued to report to the European Committee for the Prevention of Torture (CPT) every quarter on its action plan to address the Committee's recommendations. However, despite high-level commitment and regular dialogue, many of the outstanding recommendations from previous CPT reports have yet to be implemented. Progress on the ground is very slow, in particular as regards the detention conditions in some prison sections and the dysfunctional healthcare system. It is imperative that the authorities turn commitments into real change. All outstanding and future recommendations of the CPT need to be thoroughly addressed. Training sessions on human rights for prison staff were organised throughout 2019 and new staff members were trained on the Code of Conduct for Prison Staff based on the European Code of Ethics for Prison Staff, and on the proper conditions for and methods of coercion. However, the Prison Training Centre in Idrizovo still lacks a structured training curriculum for initial and continuous professional trainings. The external oversight mechanism for the police, including prison police, is in place. The mechanism for civil control has been established in the Ombudsman's Office and became operational in July 2019. Three civil society members were selected for the civil control mechanism in December 2019. Despite the lack of fully independent investigators assigned within the dedicated section in the Public Prosecutors' Office for the Prosecution of Organised Crime and Corruption, the system is functional. There were 248 cases against 446 persons with police powers or members of the prison police submitted to this section upon suspicion of criminal offence. As a result of investigations, six police officers have been put in custody and 18 have been indicted. There were first-instance verdicts against seven of them, including four imprisonment sentences. Two police officers were handed one-year prison sentences in first instance, one police officer was handed 26 months’ imprisonment, one police officer a five-month prison sentence and three police officers were handed 2-years suspended sentences. Systematic implementation of safeguards against ill-treatment by police needs to be ensured, in line with the Standard Operating Procedures for the Detention of Persons Deprived of their Liberty. In 2019, 62 complaints were filed with the Directorate for Execution of Sanctions, including three complaints for ill-treatment. In these cases, extraordinary oversight was organised, which confirmed the indications of abuse in one case, but the disciplinary committee rejected the disciplinary procedures, finding no grounds for responsibility of the prison police officers. The Ombudsman’s Office received 12 complaints for torture or ill-treatment in prisons and five complaints against the police on similar grounds. The Department for Internal Control and Professional Standards at the Ministry of the Interior handled 65 complaints on the use of physical force by police officers in 2019, out of which 26 were found to be ungrounded and 38 had no evidence. In one case, criminal charges for severe bodily injury and an initiative for a disciplinary decision were filed against one police officer, but the case was dismissed. The Department has submitted 97 notifications to the Section for the investigation and prosecution of criminal acts committed by individuals with police authority. The Department has filed seven criminal charges against ten police officers for nine criminal acts, including for five crimes of abuse of official position and authority, one crime of severe bodily injury and one crime of torture or other inhuman or degrading treatment or punishment. The external oversight mechanism for the work of the police, including the prison police, has raised citizens' expectations, and more cases have been reported directly to the Public Prosecution Office. Work to improve conditions in detention facilities is progressing unevenly. It essential to urgently address the poor conditions persistent in some prisons, police stations, social care facilities and psychiatric institutions. The Ombudsman has reported allocation of adequate resources for the activities of the National Preventive Mechanism against Torture and the civil control mechanism in 2019, while visits to places of deprivation of liberty were suspended during the COVID-19 outbreak. In March 2020, the National Preventive Mechanism issued recommendations for the treatment of persons deprived of their liberty under the circumstances of the COVID-19 pandemic and reiterated the absolute prohibition of torture and ill-treatment, even in cases of emergency. While construction and refurbishment in the prison system continues, conditions in the closed section and ‘ambulanta’ of the Idrizovo Penitentiary-Correctional Facility remain inhumane. The authorities should urgently transfer convicts out of the most derelict buildings and accelerate the rehabilitation of unsuitable facilities. The new Law on the execution of sanctions entered into force in May 2019, with legal improvements to strengthen the system of management and supervision of prisons. Despite the implementation of the 2017 corruption mitigation plan, regular supervision is essential to curb the persistent issue of corruption in prisons. The strategy for the development of the penitentiary system continued to be implemented, yet preparations for releasing convicted persons back into the community remains insufficient. Despite recruiting new prison officers, the penitentiary sector remains understaffed and underfunded. The payment of health insurance for convicted people to the Health Insurance Fund started in June 2019. However, healthcare in prisons remains an issue of serious concern, including with regard to juveniles and to treatment of drug addictions. Training for the probation officers and activities to develop the probation system increased in 2019. Througout 2019, 165 probation cases were recorded, most of which were for supervision of convicted persons conditionally released from prison and for cases of suspended sentences with protected supervision. A further 34 cases were recorded in 2020. Cooperation between the public and private sector and civil society exists and it should be further developed. There has been progress in interagency cooperation. However, coordination between probation officers, judges, public prosecutors, prison staff and other institutions before the release of a convicted person should also be reinforced. The emphasis should remain on developing alternatives to detention in order to avoid overcrowding and to improve the resocialisation and rehabilitation of convicts with the aim of decreasing instances of re-offending. The level of purposeful activities (educational, recreational, vocational) on offer is insufficient for sentenced and inexistent for remand prisoners. Educational and resocialisation services, as well as treatment programmes, should be reinforced in all penitentiary facilities and especially in educational-correctional facilities. On the protection of personal data, in December 2019, the country signed the 2018 Protocol amending the Convention for the Protection of Individuals with regard to the Automatic Processing of Personal Data of the Council of Europe. A new Law on Personal Data Protection was adopted in February 2020, to align with the General Data Protection Regulation 2016/679, expanding the tasks and powers of the new Personal Data Protection Agency. Thirteen bylaws were adopted in May 2020. There was no concrete progress on alignment with Directive 2016/680 (Law Enforcement Directive). The Personal Data Protection Agency was consulted on the preparation of the ‘StopKorona’ contact tracing application to ensure its compliance with the new legislation. The Agency has published recommendations for personal data protection in the context of COVID-19 pandemic on its website. The absence of a director and deputy director has impeded the proper functioning of the Directorate for Personal Data Protection, after the resignation of its Director in May 2019. A new director and deputy director were elected by Parliament at the end of December 2019. In the reporting period, the Directorate received 463 complaints and carried out 213 inspections, both of which are a decrease compared with 2018 due to the absence of a director. All supervisions were suspended in March due to the COVID-19 pandemic. The Agency conducted an ex officio extraordinary inspection to investigate a possible breach of the safety of personal data processed by the State Election Commission (SEC), following an incident on the SEC website on the 15 July election day. Unplanned inspections upon citizens’ requests increased in 2019, including at the Ministry of the Interior, establishing some breaches of personal data protection legislation, which were later corrected. Most complaints concerned allegations of violation of personal data protection rights on social networks, video surveillance in apartment buildings, alleged unlawful direct marketing and processing of personal identification numbers. Thirteen misdemeanour cases for breach of data protection laws were acted upon in the reporting period, eight of which dated from 2018, which resulted in eight misdemeanour fines, which remains low. In the reporting period, the Directorate gave 17 opinions and recommendations to other institutions on harmonising sectoral legislation with the Law on personal data protection. However, these recommendations are not fully implemented by the institutions concerned and not all laws and by-laws regulating personal data processing are submitted to the Directorate before adoption. The Directorate continued to provide training to personal data controllers and processors. Freedom of thought, conscience and religion continued to be guaranteed and discrimination on grounds of religion prohibited. The country still needs to impl