EUROPEAN COMMISSION Brussels, 29.5.2019 SWD(2019) 218 final COMMISSION STAFF WORKING DOCUMENT North Macedonia 2019 Report Accompanying the document Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions 2019 Communication on EU Enlargement Policy {COM(2019) 260 final}



Table of Contents 1Introduction 1.1Context 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 4Good 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 5.30Chapter 30: External relations 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 ANNEX II – STATISTICAL ANNEX



1 Introduction 1.1 Context The Stabilisation and Association Agreement (SAA) between the Republic of North Macedonia and the EU entered into force in April 2004. The passage to the second stage of the SAA, which the Commission had proposed in 2009, took place during the reporting period. Since 2009, the Commission has recommended to the Council to open accession negotiations with North Macedonia, a candidate country since 2005. In light of the progress achieved in previous years, in April 2018 the Commission repeated its unconditional recommendation to open accession negotiations. In June 2018, the Council set out the path towards opening accession negotiations in June 2019. The Commission has continued to thoroughly monitor the reforms set in the Council Conclusions and EU-related reforms across all sectors. North Macedonia has continued to deepen the reform momentum, delivering tangible results in the key areas identified in the June 2018 Council Conclusions. Good neighbourly relations have also been significantly strengthened. The entry into force in February 2019 of the historic agreement with Greece (also called the ‘Prespa agreement’) was a major breakthrough and sets an example of reconciliation for the region and beyond. 1.2. Summary of the report Concerning the political criteria, North Macedonia has continued to maintain a steady pace of implementation of EU reforms throughout the reporting period. The government has taken steps to restore checks and balances, and to strengthen democracy and the rule of law. The country has continued to undergo fundamental changes in an inclusive and open political atmosphere. The country has continued to deliver tangible results in key areas identified in the Council Conclusions such as the judiciary, fight against corruption and organised crime, intelligence services reform and public administration. The culture of compromise in the political landscape has improved by the government’s efforts to reach out to all stakeholders, including the opposition and civil society, in an inclusive and transparent manner. Following the signature of the historic agreement reached with Greece in June 2018 (also known as the ‘Prespa agreement’), a consultative referendum was organised in September 2018, whereby an overwhelming majority of voters who cast their ballots supported EU and NATO membership by accepting the Prespa agreement. The presidential elections were well organised and the fundamental freedoms were respected, allowing the citizens to make informed choices between the candidates. The Parliament has improved its performance as a forum for constructive political dialogue and enhanced its oversight and legislative functions, including by limiting the use of fast-track procedures. The inter-ethnic situation remained calm overall, despite some occasional tensions. The government pursued its commitment to increase trust among communities. The Ohrid Framework Agreement, which ended the 2001 conflict and provides the framework for preserving the multi-ethnic character of the society, is mentioned in the preamble of the Constitution and continued to be implemented. The climate in which civil society organisations operate has continued to improve. Civil society continued to play a constructive role in supporting democratic processes. Strategic documents have been adopted, providing guidance on the cooperation between government and civil society. Both governmental and non-governmental actors should aim at a meaningful consultation process. On intelligence services reform, North Macedonia has made good progress. Following the reform of the system for interception of communications, the new Operational Technical Agency is fully operational. The country has also embarked on the reform of its intelligence services in cooperation with NATO and other partners. A model has been selected and the legal framework for establishing a new National Security Agency has been adopted.

North Macedonia is moderately prepared with the reform of its public administration. Good progress has been made, especially with the implementation of the public administration reform strategic framework, improved public consultations and increased transparency in policy-making and in the area of policy development and coordination. Steps have been taken to address alleged politicised appointments. However, further efforts are needed to enhance accountability of the administration and prevent its politicisation. Respect for the principles of transparency, merit and equitable representation remains essential. The country’s judicial system has reached some level of preparation / is moderately prepared and good progress was made in addressing the ‘Urgent Reform Priorities’ and recommendations from the Venice Commission and the Senior Experts’ Group on systemic Rule of Law issues. The country demonstrated continued determination to improve the judicial system and the implementation of the new legal framework is a firm basis for continued progress. A new law on the Public Prosecutor Office to integrate the Special Public Prosecutor within the prosecutorial system has been prepared. The courts have been delivering judgements on some high profile cases filed by the Special Prosecutor’s Office. Beyond legal changes, all judicial institutions need to demonstrate their exemplarity and contribute, through additional efforts, to restoring public trust in the judiciary. As regards the fight against corruption, North Macedonia has some level of preparation. Good progress has been made through further consolidating a track record on investigating, prosecuting and trying high level corruption cases and through changes to the legislative framework. In this regard, the new legal framework for preventing corruption has improved and the appointment of the new members of the State Commission for Prevention of Corruption has been far more transparent than in the previous years. The Commission has taken important steps to proactively fight against corruption, involving high level officials across the political spectrum. The Special Public Prosecutor has confirmed its leading role in investigating and prosecuting high-level corruption cases. The authorities have to further step up efforts to demonstrate that fight against corruption is a national priority at all levels of powers. However, corruption is prevalent in many areas and remains an issue of concern. In the fight against organised crime, the country has some level of preparation. The legislative framework is broadly in line with European standards, and efforts to implement strategies against organised crime and actively measuring their impact need to continue. Some progress was also made in meeting last years’ recommendations on improving the track record, stepping up law enforcement cooperation and substantially improving the operational capacity to fight trafficking in human beings. Further progress was made at the operational level through improving the effectiveness of the National Coordination Centre for the Fight against Organised Crime and participation in joint operations with EU Member States and neighbouring countries. The legal framework for the protection of fundamental rights is largely in line with European standards and the country made good progress. It increased the protection against hate crime and discrimination with amendments to the Criminal Code and the adoption of the Law on Prevention and Protection from Discrimination. It also adopted an ambitious de-institutionalisation strategy and it transcribed its objectives to fight violence against women into an action plan for implementing the Istanbul Convention. However, the external oversight mechanism of the police is not yet fully operational and the country needs to develop further the use of alternative sanctions and probation. The country also needs to make additional efforts to consistently disseminate and address recommendations of European and international human rights bodies, notably regarding treatment of detained persons, women and persons with disabilities. The country has some level of preparation / is moderately prepared in the area of freedom of expression and it has made good progress over the last year. The climate for media freedom and freedom of expression continued to improve. It is essential that public officials and the political elites demonstrate a higher level of tolerance towards criticism, thereby upholding freedom of expression. The country needs to make sustained efforts to improve the independence and professional standards of the public broadcaster as well as its financial sustainability. Amendments to the Law on Audio and Audio-visual Media Services have been adopted and their implementation will require strong political commitment to guarantee professionalism, respect for the principles of transparency, merit-based appointments and equitable representation. With regard to regional cooperation, the country maintained its good relations with other enlargement countries and participated actively in regional initiatives. Historic steps have been taken to improve good neighbourly relations, including through the entry into force of the Prespa agreement and its implementation, putting an end to one of the oldest disputes in the region. The Commission looks forward to the continued implementation of the bilateral treaty with Bulgaria. As regards the economic criteria, North Macedonia has made some progress and is at a good level of preparation in developing a functioning market economy. Economic growth resumed after a year of stagnation, though investment remained subdued. The government took measures to improve public finance management and transparency. It adopted reforms of income taxation and the pensions system. However, the composition of spending worsened, and fiscal consolidation needs to be more ambitious in order to put public finances on a sustainable path. The functioning of the labour market is impaired by persisting structural problems. Contract enforcement and large informal economy continue posing challenges for the business environment. 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, and a lack of skills alignment with those required by companies, reflecting shortcomings in education curricula, impair labour productivity and the competitiveness of the economy. Important investment gaps in public infrastructure remain. As regards its ability to assume the obligations of membership, the country is moderately prepared in most areas, including in the areas of competition, public procurement, transport and energy. The country shows a good level of preparation in areas such as company law, customs union, trans-European networks and science and research. Further efforts are needed across the board, in particular in those few areas where the country is at an early stage of preparation, such as free movement of workers as well as financial and budgetary provisions. More focus is also needed on administrative capacity and effective implementation. The country has continued to improve its alignment with the EU declarations and Council decisions on Common Foreign and Security Policy. North Macedonia continues to play an active and constructive role in the management of mixed migration flows. It cooperates effectively with EU Member States and neighbouring countries. Considerable efforts to ensure basic living conditions and services for all migrants staying in the country continued. There are still uncertainties on the scope and structure of migration flows. The inconsistent registration of migrants apprehended in irregular movements prevents regular and adequate protection-sensitive profiling, as well as referral to national protection mechanisms. Effective control at the southern border has been ensured, including with the deployment of guest officers from EU Member States at the border. The European Border and Coast Guard Status Agreement with the EU was initialled. However, the problem of frequent smuggling activities at the northern border need to be further addressed. The country continues to be under severe pressure due to its geographic location. 2. FUNDAMENTALS FIRST: POLITICAL CRITERIA AND RULE OF LAW CHAPTERS 2.1. Functioning of democratic institutions and Public Administration Reform 2.1.1. Democracy In parallel to the implementation of the Prespa agreement, North Macedonia has continued to show its commitment to deliver tangible results in implementing EU reforms in key areas such as (i) the judiciary, fight against corruption and organised crime; (ii) intelligence services; and (iii) public administration reform, including through the ‘Plan 3-6-9’ and ‘Plan 18’. The culture of compromise among political actors has improved by the government’s efforts to reach out to all stakeholders, including the opposition and civil society, in an inclusive and transparent manner. The government has taken steps to restore proper checks and balances, and to strengthen democracy and the rule of law. Elections Overall, the legal framework is conducive to the organisation of democratic elections. Some progress has been made in addressing and implementing the recommendations of the Office for Democratic Institutions and Human Rights of the Organisation for Security and Cooperation in Europe (OSCE/ODIHR). The consultative referendum was well organised and fundamental freedoms were respected. The presidential elections took place in a peaceful, orderly and transparent atmosphere. The conduct of these elections paved the way towards further strengthening the democratic processes in the country. The work on the electoral legislation needs to be finalised to address the remaining recommendations of OSCE/ODIHR and of the Venice Commission ahead of the next election cycle. The state institutions and bodies, notably the Ministry of the Interior and the State Election Commission, should make further efforts to systematically improve the accuracy of the voters list (‘Urgent Reform Priority’). OSCE/ODIHR assessed that both rounds of the presidential elections (21 April and 5 May 2019) were well organised and the fundamental freedoms were respected, allowing the citizens to make an informed choice between candidates. Three candidates ran for the presidency, a woman and two men, including an ethnic Albanian. None of the candidate had an official party affiliation, but all of them were supported either by the ruling coalition or the opposition parties. In the second round, the coalition candidate won with 51.7% against the opposition candidate, who was supported by 44.8% of voters. The turnout was 46.7%. President Pendarovski took office in May 2019. A consultative referendum was held on 30 September 2018. Of the 36.9% of voters who cast their ballots, 91.5% supported EU and NATO membership by accepting the Prespa agreement. OSCE/ODIHR assessed that the referendum proceeded in an orderly manner without major irregularities. Parliament was the ‘authorised proposer’ of the referendum and financed a public campaign for the referendum. The ‘For’ campaign was led mainly by the ruling parties and across ethnic lines. Media provided voters with extensive information and diverse views, despite the absence of an active ‘against’ campaign. Calls for ‘boycott’ were mainly relayed on social media and through rallies. New provisions in the Electoral Code provided the grounds for electing the new State Election Commission (SEC), composed of members proposed by political parties, and the extension of their term to cover the presidential elections. SEC organised the referendum and the presidential elections impartially and professionally, and generally enjoyed public trust. A sustainable solution for the composition of the SEC needs to be found in a transparent and inclusive manner. Despite improvements of the voters’ list, discrepancies between databases need to continue to be addressed. In line with the recommendations of OSCE/ODIHR and the Venice Commission, the government undertook steps, in cooperation with civil society and political parties, towards a comprehensive reform of the electoral legislation. The legal framework underwent several changes, including the reimbursement of paid political advertisement from the state budget. Although the legal framework is conducive to the conduct of democratic elections, the referendum and the presidential elections highlighted that some aspects, such as campaign financing, remain unaddressed. The initial work on the electoral legislation needs to be finalised ahead of the new election cycle, in cooperation with OSCE/ODIHR.

Parliament The Parliament improved its performance as a forum for constructive political dialogue and enhanced its legislative function. It has made some progress in restoring checks and balances over the executive power, focusing on deepening the reforms, further increasing its oversight capacity and its transparency. The Parliament carried out the ratification process of the Prespa agreement, including the promulgation of constitutional changes. Parliament also engaged constructively in the ‘Jean Monnet Dialogue’ with the European Parliament. The accountability for those who committed violence and orchestrated the attacks of April 2017 in Parliament continued to be established. Further efforts are needed to address security-related issues. A functional oversight of the work of the government and of intelligence services, as well as the capacity to monitor the protection of human rights and fundamental freedoms, should be further strengthened. Political parties need to further improve their internal democratic processes. Parliament’s role as the main institution for political dialogue has improved considerably. Over the reporting period, there was an intense activity in Parliament with debates and adoption of EU-related laws. Consensus across party and ethnic lines was established on several occasions, including for the amendments to the laws requiring 2/3 majority, particularly in the areas identified by the Council Conclusions such as the judiciary, fight against corruption and intelligence services. The former President of the Republic refused to sign the laws adopted under the new name of the country, which required a second passage of these laws in the Parliament. The process of constitutional changes to implement the Prespa agreement revealed divisions between VMRO-DPMNE leadership and some of its members of Parliament, which resulted in the formation of a new parliamentary group. The country continued to deal with the aftermath of the violent attacks in Parliament of 27 April 2017. Accountability for those who committed violence and orchestrated the incidents continued to be established by the courts. The verdict of the trials were announced in March 2019. 16 defendants, including high-level officials, were sentenced from 7 to 18 years in prison. The Public Prosecutor’s Office also opened investigations on those who ordered the attacks, including high-level politicians. As part of a broader reconciliation process, a Law on Amnesty was adopted in December 2018. This law does not provide for impunity regarding the organisation or perpetration of serious crimes related to April 27 attacks. Although Parliament faces challenges in better planning and coordinating its work to achieve a more effective legislative oversight, the number of shortened and urgent procedures have significantly decreased. In 2018, 20% of laws were adopted in a shortened procedure and none in urgent procedure (compared with 75% in shortened procedure and one law in urgent procedure in the previous reporting period). Parliament adopted and started implementing its first 2018-2022 strategic plan. New inter-party groups on Roma and youth started working. The Parliament’s oversight role was significantly strengthened, including the oversight of the interception of communications. The Parliament should continue to work on the efficiency of the democratic political system, including on the implementation of the Group of States against Corruption (GRECO) recommendations on transparency of party funding. Parliament engaged constructively in the ‘Jean Monnet Dialogue’, an initiative of the European Parliament, aiming at creating an atmosphere of national dialogue and consensus among the political parties. The first round of dialogue took place in May 2018 and the second round is being prepared. The adoption of the Code of Ethics, aiming at addressing GRECO recommendations, was a concrete result of this process, and inclusive work on the Rules of Procedure is at an advanced stage. The ethnic representation of members of Parliament largely reflects the ethnic composition of the population. Women’s representation in the Parliament is 38.3%. Despite the latest changes, the transparency in financing of political parties needs to be further improved - see Chapter 23 – Judiciary and fundamental rights. Political parties also need to strengthen their democratic processes by further promoting freedom of assembly and expression. Governance Democratic governance was strengthened over the reporting period. The government continued to consolidate democracy and rule of law. It has sustained its commitment to deepen the reform momentum and to deliver tangible results, including through EU-related reform plans. It continued to improve its decision-making process and the transparency of its work. The inter-ethnic situation continued to be calm overall. The government has sustained efforts to foster inter-ethnic relations and to implement the Ohrid Framework Agreement (OFA). The Law on Government was amended to provide for the establishment of the technical government and the so-called ‘Pržino government’ arrangements (i.e. Ministers and deputy Ministers from the opposition in key ministries) in advance of future parliamentary elections. During the reporting period, the Minister of Justice was replaced and there was a government reshuffle in June 2018 to include two ethnic Albanian parties, Democratic Party of Albanians (DPA) and Alternativa. The total representation of women in the appointed functions and in decision-making, management and governing bodies is 11%. Out of these, 15% were appointed as Ministers, 7% as deputy Ministers, 25% as state secretaries and 9% in other appointed positions. Following the ‘Plan 3-6-9’, the government developed the ‘Plan 18’ for continuing the implementation of the EU reform agenda, prioritising the areas identified in the Council Conclusions. The administration participated actively in the meetings organised by the European Commission for the technical explanation of the acquis. The inter-ethnic situation remained calm overall, despite some occasional tensions. The government pursued good relations among communities. A reference to the Ohrid Framework Agreement (OFA), which ended the 2001 conflict and provides the framework for preserving the multiethnic character of the society, is mentioned in the preamble of the Constitution. The Law on the Use of Languages, which is considered by ethnic Albanian political parties as an important legislative element that contributes to complete the implementation of the OFA, entered into force in January 2019. The law was sent to the Venice Commission for its opinion. Decentralisation has been a commitment since the OFA was signed in 2001. The transition towards effective fiscal decentralisation to municipalities is still ongoing. The law on reporting and recording of public institutions’ obligations was changed to allow the state to take over up to 51% of existing debts of municipalities as a one-off measure. At the same time, work on introducing sound fiscal rules for local government has begun. These measures aim to avoid a possible relaxation of financial discipline among municipalities. Civil society The environment in which civil society operates has continued to improve, with its involvement in policy-making and legislative processes. Strategic documents were adopted, guiding the government's cooperation with civil society organisations. Both governmental and non-governmental actors should ensure that safeguards are in place to further strengthen checks and balances and should aim for a meaningful consultation process. An improved legal and financial framework is still needed to strengthen an enabling environment for civil society. An empowered civil society is a crucial component of any democratic system and is recognised as such by state institutions. Good progress was made towards the regular functioning of the Council for Cooperation between Government and Civil Society and the adoption of the 2018–2020 strategy, including its action plan. Further efforts are needed to address limited transparency, including through a more inclusive internal and sectorial consultation process within the Council. Additional efforts are needed to address the financial sustainability of civil society organisations such as a broader tax harmonisation and predictable public budgeting. Civilian oversight of the security/intelligence sector Thanks to cross-party compromise, the legal framework enabling the reform of the interception of communication was adopted with 2/3 majority. The new Operational Technical Agency (OTA) started working in November 2018. The parliamentary oversight committee over interception of communications is in the process of hiring experts to assist its work in this area. The Committee performed four inspection visits to the Bureau for Security and Counterintelligence (UBK), the OTA, the Customs Administration and the Financial Police in 2018 and 2019. A broader reform of the intelligence services is under way, in cooperation with NATO and other partners. New laws on the National Security Agency and on the coordination of the intelligence and security community have been adopted. It is essential that these laws are swiftly implemented, in cooperation with NATO and strategic partners. It is foreseen for the new Agency to replace the existing Bureau for Security and Counterintelligence as an independent state body, without police powers and with the competence to gather intelligence for guaranteeing the security of the State.

2.1.2 Public administration reform North Macedonia is moderately prepared with the reform of its public administration. Good progress was achieved with the implementation of the public administration reform strategic framework and in the area of policy development and coordination. The Ministry of Information Society and Administration has now a designated team to coordinate public administration reform efforts with other key institutions, and the first government monitoring reports have been published. The Ministry has also set up a team to support public authorities with implementation of the Law on General Administrative Procedures. Further steps have been taken to improve transparency, including by publishing the number of public service employees and increasing the use of public consultations. The State Commission for Prevention of Corruption has started to address cases of politicised appointments by the current and previous governments. Further efforts are needed to enhance accountability of the administration and prevent politicisation of public service. The Commission’s 2018 recommendation on merit-based recruitments in open competitions remains valid, especially on senior management appointments. The respect for principles of transparency, merit and equitable representation remains essential. In the coming period, the country should, in particular: ®ensure 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 The 2018-2022 public administration reform strategy and the 2018-2021 public financial management reform programme are the umbrella strategies for public administration reform. The government has started to monitor and report on their implementation, but an integrated monitoring and reporting framework has yet to be established. Civil society has actively participated in the monitoring of the government’s reform efforts. The high-level Public Administration Reform Council and the Public Financial Management Council ensure political support and supervision of reforms. The Ministry of Information Society and Administration has increased its capacities to drive the reform at the technical level. The Ministry of Finance needs to become increasingly involved in the overall reform coordination, also due to increased focus on managerial accountability (see Chapter 32 – Financial Control). The reform also needs to be made financially sustainable and systematically costed in the state annual budget and the medium-term expenditure framework. Implementation of the reform strategies is still very much dependent on external donor funding. Policy development and coordination The legal framework and institutional structures provide for a policy-making system, including for managing the process of EU integration. Policy planning still needs to be reinforced and become consistent with medium-term budgetary planning. The government updated guidelines on preparation, monitoring and reporting of strategic planning documents in August 2018. The General Secretariat needs to enhance its central coordination and quality control role to follow up on implementation of these guidelines. It will also need to upgrade the procedural rules and guidance on development and monitoring of sector strategies. In December 2018, the government adopted a decision to improve coordination among the main ‘centre of government’ institutions. The improved coordination will be addressed in detail by the amendments to the government’s rules of procedure. Evidence-based policy and legislative development are only partially ensured. Administrative data collection and consistent use of data for decision-making need to be strengthened. The quality of regulatory impact assessments has slightly improved, while budgetary impact assessments are still either missing or they are not comprehensive. Inter-ministerial consultations need to be properly integrated in the process. Public consultations have improved through the national electronic consultation system. The government's proposals to use shortened and urgent procedures for adopting legislation have significantly decreased (see 2.1.1. Democracy). Public scrutiny of government work has improved, thanks to the increased number of published government monitoring reports and communication. Public financial management The government has implemented the 2018-2021 public financial management reform programme and published the first annual monitoring report in early 2019. The programme covers seven priorities. The 2019-2021 fiscal strategy report underwent sufficient parliamentary debate. It further strengthens budget management and fiscal discipline to maintain macroeconomic stability, achieve gradual fiscal consolidation and maintain a low budget deficit. The preparation of the 2018 and 2019 budgets has been enhanced and subjected to public consultation. Further efforts should be considered to strengthen the government’s investment management and planning capacities. Progress has been made in improving budget transparency through the publication of a citizens' budget and increased budgetary data. Budget transparency and accountability of public fund management should be ensured through efficient monitoring by the executive and the Parliament. This includes following up on the State Audit Office recommendations. Public service and human resources management While the Law on Administrative Servants and the Law on Public Sector Employees in principle ensure merit-based recruitment, promotion and dismissals, these laws are not fully applied across the administration. There are contradicting provisions in the Law on Internal Affairs, which allow employees to be excluded from the application of the Law on Administrative Servants. Procedures for temporary or service employments with lower criteria are used in many cases, bypassing the criteria set in the Law on Administrative Servants. The grounds for dismissals need to be made more transparent. Following public allegations of appointments of family members by the previous and current government, measures have been taken by the government and investigations have been launched by the State Commission for Prevention of Corruption. The findings of the State Commission for Prevention of Corruption may require further changes in the recruitment processes of public institutions to make them more transparent and merit-based. – See Chapter 23 – Judiciary and fundamental rights. While the government followed a specific procedure for the appointment of senior managers, after the latest early parliamentary and local elections, there have been concerns over consistent non-application of the principle of merit. A number of senior deputy positions were introduced without merit criteria. The government is preparing a new law to regulate the conditions for recruitment and dismissals for top managerial positions. The Ministry of Information Society and Administration is in charge of coordinating and monitoring the management of human resources across the public administration. However, its capacity needs to be strengthened to ensure systematic application of the legislation. Better functionality of the Human Resources Management Information System and its systematic use by line institutions has to be ensured. The remuneration system needs to be revised. The representation of women in the public service has remained over 50%. Equitable representation is not consistent across the public sector and across all categories of civil servants. There is higher representation of some minorities in the institutions whose hierarchy includes that minority. Smaller ethnic minorities remain underrepresented in the public sector. Despite the government’s announcements, no decision has been taken by the responsible institutions on how to tackle the issue of public employees not showing up for work and on determining their final job positions. Professional development is not yet systematic, and a centralised database of the training offered by various institutions is yet to be established. While integrity in the public service is sufficiently regulated, including whistle-blower legislation, data needs to be made available on how integrity mechanisms are implemented in practice. Accountability of the administration To improve the administration’s rationality and lines of accountability, a functional review has been launched to assess around 128 governmental institutions and their functions and possible overlaps. A number of institutions have continued to report to both their line ministry and to the government in parallel. Managerial accountability is not systematically implemented within institutions, and there is insufficient delegation of responsibility through the various management levels (see Chapter 32 - Financial Control). Citizens’ right to good administration is protected by the independent institutions, especially the Ombudsman and the State Audit Office. Systemic follow-up to their recommendations still needs to be ensured. Citizens’ right to access public information has improved through increased transparency of most central government institutions and the publication of 21 standard sets of documents. An open data mechanism was set up. It requires a commitment by all state institutions to regularly provide and update data. The delays in appointing of the Commission for Protection of Free Access to Public Information from May 2018 until the end of March 2019 made it non-responsive to appeals in that period. Its capacities have remained insufficient to monitor compliance with the proactive disclosure of information requirements.

The law on administrative disputes was adopted in May 2019. In practice, the appeal procedure for citizens’ right to administrative justice is overly complex and lengthy. Delays occur in enforcing administrative court rulings. While legislation defines citizens’ right to seek compensation and the liability of public authorities in cases of wrongdoing, data is yet to be collected to monitor compensation for damages. Service delivery to citizens and businesses The national portal for services is being upgraded to create a more user-oriented administration that will serve as a single contact point and allow for equal access and a digital interface with the state administration. The population register is yet to become functional as the basic source of information for both state institutions and citizens’ interaction with the administration. The application of the interoperability framework increased but political will and funding are needed for it to reach its full potential. The quality of services to citizens has remained lower than the services offered to businesses. Simplifying administrative procedures has been extremely difficult, as the Law on General Administrative Procedures has not yet been implemented systematically across the administration. The Ministry of Information Society and Administration has set up a ‘help desk’ team to support central and local government authorities in applying the law. Considerable further training and awareness-raising is 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. A proper functioning 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 acquis and European standards in this area. Recent legislative changes have largely addressed the ‘Urgent Reform Priorities’, recommendations of the Venice Commission and the Senior Experts’ Group on systemic Rule of Law issues. This led to good progress in completing the amendments to the legal framework, particularly in the area of judiciary and nondiscrimination, to address police impunity and to reinforce the protection of fundamental rights. The courts have pronounced final convictions in high profile cases under the remit of the Special Prosecutor’s Office. The Office has intensified its work in investigating and prosecuting crimes arising and surrounding the wiretaps. Discussions are ongoing between the government and the opposition to finalise a sustainable solution for the status of the Special Prosecutor’s Office. It is essential to continue establishing legal accountability for the crimes arising from and surrounding the wiretaps. The anti-corruption framework has been reinforced by a new law and new competences for the State Commission for the Prevention of Corruption. The work of the new Commission has already yielded results, including on high level cases. The full implementation of the new framework will be key to demonstrating the ability of the authorities to prevent corruption and conflict of interests. However, corruption is prevalent in many areas and remains an issue of concern. The legal and policy framework for fundamental rights is generally in place and the Ombudsman’s Office has been granted additional responsibilities. Efforts have been made to further improve the human rights situation in practice but a substantial allocation of funds and strong leadership are needed to ensure implementation and sustainability of measures taken. It is essential that choices made in appointment of members of independent and regulatory bodies are based on merit to ensure that they are composed of competent persons whose integrity cannot be questioned. The functional independence of these bodies must be guaranteed at all times, including through adequate funding. Functioning of the judiciary The judicial system has some level of preparation / is moderately prepared. There was good progress in addressing the ‘Urgent Reform Priorities’ and recommendations from the Venice Commission and the Senior Experts’ Group on systemic Rule of Law issues. The Venice Commission praised the authorities’ constant efforts to bring the rules governing the judicial system in line with international standards and practices. The country stepped up the implementation of the judicial reform strategy and revised its action plan. Regular monitoring at all levels is needed to ensure that timelines are respected. All stakeholders need to remain engaged to deliver a reform that will benefit citizens. Implementation of the new legal framework provides a firm basis for lasting change. Beyond legal changes, it is essential that all judicial institutions demonstrate their exemplarity and contribute, through additional efforts, to restoring public trust in the judiciary. In the coming year, the country should in particular: ®continue implementing the judicial reform strategy, prioritising the development of a human resources strategy and improving the automated court case management information system (ACCMIS) to ensure it is fully functional and reliable; ®ensure consistent implementation of the new rules for appointment, promotion, discipline and dismissal of judges, and demonstrate that the independence of the judicial system is respected and promoted at all levels, shielding it from any risk of political interference; ®fully implement the new legal framework related to the reform of the Judicial Council and adopt a reform of the Council of Public Prosecutors. Strategic documents The 2017-2022 Strategy on Judicial Reform is the guiding document for reform in this sector and the implementation of the related action plan, updated in October 2018, is well under way. The country adopted amendments to many laws governing this sector, notably the Laws on Courts and on the Judicial Council in line with Venice Commission recommendations as well as the Criminal Code, and the law on misdemeanours. The country’s consistent efforts to bring the rules governing the judicial system in line with international standards and best practices have been noted by the Venice Commission in its March 2019 Opinion on the Law on the Judicial Council. The Council for Monitoring the Implementation of the Judicial Reform established in April 2018 meets regularly. It acted as a forum for debate among professionals on the implementation of strategic steps. The Council adopted the first annual report on implementation of the Strategy in January 2019. Management bodies The Judicial Council maintained its mixed composition. In 2018, judges elected six new members of the Judicial Council from among their peers and the new Council President was elected from this contingent in April 2019. The Law on the Judicial Council was amended in May 2018 and in April 2019 following consultation with the Venice Commission and the Council updated its internal rules accordingly. The Council sessions are public and partly broadcast on audio-visual media. The changes made to the legal framework increased the accountability of the Council’s members. The Council remains a professional full-time body but the new provisions remove the possibility for immediate renewal of the six-year mandate for its judges-members and the voting rights of both ex-officio members for all procedures. The Parliament elected two practicing lawyers as new members of the Council of Public Prosecutors. The planned amendments to the Law on the Council of Public Prosecutors have yet to be adopted. The Council still lacks adequate human and financial resources and has no separate budget, which brings into question its independence from the State Public Prosecutor’s Office. The Council has not increased its transparency, with decisions on appointments still lacking reasoning and it needs to fulfil its role more proactively. Both Councils need to demonstrate a decidedly more proactive attitude in delivering on their respective mandates.

Independence and impartiality Judicial independence is enshrined in the Constitution. Measures taken have had a positive impact on the independence of the judiciary but continuous efforts are needed to remove the risk or perception of political interference. Provisions in the newly amended laws, provided they are properly implemented, can ensure the independence of the judiciary. The Association of Judges continued to actively participate in reforms. It established the first Judicial-Media Council bringing together judges and journalists to strengthen transparency. The Judicial Council’s efforts to protect judges’ independence were limited and it is essential that it steps up its efficiency to shield them from potential external or internal pressure. The Special Prosecutor's Office (SPO) continued its work, filed several indictments and opened new investigations (more details under Fight against corruption). There are different interpretations concerning the right of the SPO to open new investigations and file indictments after 18 months following the handover of wiretaps. A draft law to incorporate the SPO within the Public Prosecutor’s Office is under discussion with a view to enabling the SPO to continue its work. In September 2018, the SPO published a special report highlighting evidence of judicial misconduct revealed in the unauthorised interception of communications. The State Commission for the Prevention of Corruption has opened a file over alleged abuse of power and corruption targeting some members of the judiciary. The audit of the automated court case management information system (ACCMIS) was completed in the courts with extended competence and the Ministry of Justice, following adoption of a plan for regular supervision of the courts’ application of the system, has started its implementation. The audit led to investigations being open both by the Public Prosecutors' Office and the Judicial Council. The investigations are ongoing but have not yet yielded concrete results. An upgrade of the system is envisaged to address some of its deficiencies. It is essential that the country introduces a case management system that is fully functional, interconnected and reliable and that permits to extract data at the central level. Accountability Both judges and prosecutors are obliged to declare their assets upon election or following a change which exceeds an amount defined by law. Amendments to the Law on Courts and to the Law on the Judicial Council positively revised the criteria for disciplinary responsibility of judges and introduced the possibility for anyone to initiate a procedure before the Judicial Council, leading to six such requests being filed by legal professionals and lawyers. Additionally, the Law on the Judicial Council introduced accountability for members of the Judicial Council, thereby addressing a previously noted shortcoming. The Advisory Council for Judicial Ethics met twice but its impact is as yet limited. The Academy of Judges and Prosecutors organised training sessions on ethics and conflict of interest. In terms of accountability of judges, following the abolition of the Council for Determination of the Facts, the Judicial Council is processing five files against judges or Presidents of Courts, including of the Supreme Court. None has been completed, leading to some of the judges concerned perceiving this as a form of pressure. One judge was dismissed for unprofessional and inapt performance of duty in February 2019 and 10 disciplinary procedures were initiated in 2018. Disciplinary procedures were launched against three prosecutors. There was slow progress in enforcing the decisions of the European Court of Human Rights on dismissed judges. Professionalism and competence The amendments to the Law on Courts and the Law on the Judicial Council improved the system of appointment and promotion and introduced qualitative criteria in the professional evaluation of judges, in line with the Venice Commission's recommendations and the ‘Urgent Reform Priorities’. The amendments also provide that appointments to the first instance give prominence to candidates’ ranking upon their completion of the training in the Academy for Judges and Prosecutors in the appointment procedure. In 2018, the Judicial Council appointed 4 judges and 2 Presidents of courts. The amendments introduced a procedure for appeals to the Supreme Court regarding appointment procedures. The Council of Public Prosecutors appointed 25 prosecutors at different levels and enabled 21 prosecutors to perform their tasks beyond retirement age to address the shortage of staff. Both Councils need to improve the transparency of their work and ensure respect for meritocracy in appointments and promotions. The Academy for Judges and Prosecutors organised a total of 189 in-service training sessions. Consistent implementation of the new legal framework is essential for the following period. Quality of justice The Academy remains the sole entry point into the judiciary, in line with recommendations of the Senior Experts’ Group on systemic Rule of Law issues. A new managing board for the Academy for Judges and Prosecutors was elected in October and a new Director selected by the Board in November 2018. The post of Deputy remains vacant. The Supreme Court continued to work on improving the consistency of judgments and on harmonising court practice. According to figures received from the authorities, in 2018, the budget allocated to courts increased by approximately 2% and it stood at 0.29% of GDP. The budget for prosecution offices increased at a similar rate. In mid-2018, the country had 25 judges and 8.4 prosecutors per 100 000 inhabitants, compared to the 2016 European average of 21.5 judges and 11.7 prosecutors (as reported by the European Commission for the Efficiency of Justice). A procedure for hiring 190 staff in courts is ongoing and 33 new staff provided reinforcements to the Public Prosecutor’s Offices in February 2019. The information technology situation in the judiciary is improving along with the implementation of an IT strategy for the justice sector but it remains predominantly dependent on donor funding. Lack of funds and staff continues to hamper the renewal and maintenance of the IT tools. The physical conditions in courts are very varied and accessibility remains a challenge across the country, for instance in the civil court in Skopje. Whereas the Supreme Court started holding regular meetings with the four courts of appeal on consistency of jurisprudence in civil law cases, not all courts managed to promptly upload judgements in the database for online access to jurisprudence. Courts do not always have access to judgements of other courts, thereby impeding consistency. The procedure for secondments to the European Court of Human Rights was completed, thus fulfilling this ‘Urgent Reform Priority’. Efforts are needed to promote the use of alternative dispute resolution. Arbitration is still not considered as a viable tool to ensure justice, either by parties or by the courts. The effects of the implementation of the new law on mediation, adopted in 2013 are still to be assessed. Efficiency Nearly all courts maintained a clearance rate of 100% or higher, demonstrating continued efficiency. There is no issue of backlog of cases in courts. The implementation of the law on languages may affect the efficiency in courts and public prosecutor’s offices. In December 2018, amendments to the Law on Salaries of Judges were adopted as well as to the Law on Judicial Service, providing for modalities on payment of supplements to salaries of judges and of the judicial administration following previous salary increases in the prosecution. An initial assessment of the court network was carried out as a preliminary step to the development of a comprehensive human resources strategy in the judiciary. Work on a similar exercise for the prosecution has been initiated. This will help to ascertain the real needs in public prosecutor’s offices. The insufficient number of expert associates and other support staff puts a strain on the functioning of courts and Public Prosecutors’ Offices. The absence of a strategy affects the proper planning and allocation of human and budgetary resources.

Amendments to the Law on Notaries and to the Law on Enforcement were adopted in December 2018. A new tariff for enforcement officers was adopted in February 2019, following challenging negotiations. Overall, the system has proved to be an improvement compared to the previous system of enforcement by the courts. The notary payment order works well, discharging the burden on the courts. However, the overall cost of enforcement and the length of the procedure still obstruct the system’s efficiency. This, together with the mandatory presence of an attorney for procedures before notaries (including for inheritance) risks impeding access to justice. The monitoring of the enforcement officers’ activities by the Chamber and the Ministry of Justice needs to be improved. A holistic approach to the reform of the sector covering the different stakeholders is needed to address remaining challenges. Fight against corruption North Macedonia has some level of preparation in the fight against corruption. Good progress has been made through further consolidating its track record on investigating, prosecuting and trying high level corruption cases and by making changes to legislation. The new legal framework for preventing corruption has improved and the appointment of the new members of the State Commission for Prevention of Corruption has been far more transparent than in previous years. The Commission has taken important steps to proactively fight against corruption, involving high level officials across the political spectrum. The Special Public Prosecutor has confirmed its leading role in investigating and prosecuting high-level corruption cases. A new law on the Public Prosecutor Office to integrate the Special Public Prosecutor within the prosecutorial system has been prepared. There is an awareness at political level of the need to effectively address corruption. The criminal justice response against high-level corruption has started to generate concrete results, which needs to continue. The authorities have to further step up efforts to demonstrate that the fight against corruption is a national priority at all levels of power. In the coming year, the country should, in particular: ®proactively implement the new rules for preventing and fighting corruption and encourage, from the highest political level, a more proactive attitude on the part of all actors engaged in this area; ®reaffirm its political will to fight corruption by supporting all relevant institutions with the necessary autonomy in exercising their prerogatives as well as human and financial resources; ®consolidate the track record of final convictions in high-level corruption cases, including by confiscating criminal assets; ensure that the legal accountability of the wiretaps is continued independently from ongoing reforms within the prosecutorial system. Track record North Macedonia continued to build on its track-record for investigating, prosecuting and trying high level corruption cases. The Special Prosecutor’s Office (SPO) filed 18 indictments for serious criminal offences. Most of them concern abuse of office, abuse of position, forgery of documents, embezzlement, and large-scale fraud. One indictment is pending confirmation by the Court. A total of 112 individuals are on trial in 17 cases. Furthermore, the SPO has established its jurisdiction over two major cases where there were suspicions of procedural and substantial irregularities. In the case dubbed ‘Monster’ where five people were murdered, six individuals are standing trial. In the corruption case dubbed ‘Magyar Telekom’, three individuals are standing trial. Court hearings in several prominent cases have resumed involving former senior officials such as the former Minister of Transport, the former Minister of the Interior, several former Security and Counterintelligence officials, key business people and local officials. The courts ordered pre-trial detention for the former Minister of Transport, the former Secretary General of the Government and the former Director of the Bureau for Security and Counterintelligence. This was commuted into house arrest. In 2018, the courts issued five judgments against 19 individuals, including three verdicts based on a guilty plea. Final sentences were pronounced against the former Prime Minister, his assistant, the former Minister of the Interior and the former Director of the Bureau for Security and Counterintelligence. In first instance, the court pronounced a guilty verdict and imprisonment sentences from 3 years to 4 years and 6 months against four former members of the State Election Commission, the leader of the Democratic Party of Albanians (DPA) and the former Head of Security and Counterintelligence. There are 108 individuals currently under investigations in 19 ongoing investigations. The Courts need to consolidate their track record to demonstrate that the practice initiated in cooperation with the Special Prosecutor’s Office is reinforced. The Public Prosecutor for Prosecuting Organised Crime and Corruption has opened five new investigations involving seven individuals in high-level cases (compared to six in 2017 involving 10 suspects). In total, together with four cases still under investigation since 2017, there are nine ongoing cases involving 17 individuals. Cases mainly concern violation of procurement rules. Some cases involve high-level officials such as the former Minister of Health, the former Deputy Minister of Economy, and the former Secretary General of the Government. This is in line with the SPO practice of investigating senior officials to establish legal accountability of public office holders and tackle their impunity. The court issued a first instance judgment against one of the accused. In one case, one defendant is standing trial. 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 opened 11 new investigations involving 16 suspects. In three cases involving four individuals, investigations were closed. There are also 14 cases involving 26 suspects currently under pre-investigation. In 2018, the State Commission for Prevention of Corruption received 1 590 statements of interest and 1 852 declarations of assets. In total, there are 6 633 declarations from elected and appointed officials currently published on the Commission’s website. In March 2018, five out of the Commission’s seven members, including its President, resigned. The resignation was triggered by public reactions to the findings of the State Audit Office on alleged financial irregularities. Consequently, the regular verification of statements of interest and declarations of assets was hampered by procedural restrictions during the year. As a result, within the short lapse of time between January and February 2018 the Commission initiated only 26 procedures to determine the existence of conflict of interest (149 were initiated for the whole of 2017). Under the previous law, the Commission still had limited powers to act promptly and efficiently. The Commission sent seven cases to the Basic Court for Misdemeanour proceedings. In three cases, the court pronounced fines, and in one case, it issued a warning. The Commission sent eight requests to the Public Revenue Office after the violation by officials of their obligation to declare their property. With the new law, the Commission will be able to act and pronounce sanctions autonomously for a more meaningful impact of its assessments and decisions. The new Commission, whose members were appointed in February 2019, opened investigations over allegations of nepotism in the public administration in 65 cases. Investigations already yielded results. The commission determined that out of the 36 cases examined so far, there were 21 cases of possible nepotism and wrongdoings during the recruitment process. Those cases fall either under the responsibility of previous officials or under the current administration. Consequently, in at least four cases, family relatives already resigned, and two misdemeanour procedures are ongoing against one Minister and against the President of the Council of Public Prosecutors. The Commission closed 15 cases due to the lack of determining elements or because no conflict of interest was determined. The Commission also opened in May additional cases involving current and former high state officials. The State Commission for Prevention of Corruption also calls for reviewing several laws for preventing use of discretionary powers in the recruitment process. During 2018, within the Ministry of the Interior, the Department for Internal Control, Criminal Investigations and Professional Standards started five individual disciplinary procedures (14 in 2017). Procedures are ongoing. The Department also initiated criminal proceedings on seven corruption-related charges against six of the Ministry’s employees (compared with 13 proceedings against 15 employees in 2017). 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 members are stricter and require increased experience and a proven track record in the fight against corruption (10/12 years). Neither the members nor the President can be former members of Parliament, former government members or a donor or former member of a political party’s management board in the last 10 years. In an effort to be more inclusive and transparent, the selection is the result of a three tier process involving members of the political parties, the opposition, and representatives of specialised NGOs, and then a representative of the Ombudsman Office, journalists associations and members of the Academy of Sciences. Interviews of the candidates were broadcast on the parliamentary channel. To strengthen its capacity in fighting impunity and lack of integrity, the Commission is vested with additional powers. It will be able to directly request information from numerous financial institutions – banking, traffic institutions to facilitate the process of verification of the officials’ statements of interest and of assets. It will also be able to initiate misdemeanour procedures. The competence sharing with other competent institutions has been clarified and a long-overdue mechanism to support functional independence established. The budget will be voted directly by the Parliament and not through the Ministry of Finance to strengthen its financial autonomy. The new law also provides its Secretariat with extended executive (operational) powers to manage its work. There are several codes of ethics in place in various state institutions. Efforts continue to improve integrity policies, transparency and accountability of public institutions and state enterprises. 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 infrastructure has been improved but is still not interconnected with other relevant institutions.

Existing penalties under the Law on the Prevention of Corruption and Conflict of Interest and the Electoral Code need to be applied more systematically and visibly. 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. A draft law is under discussion to enable the Special Prosecutor’s Office to continue its work. In cases of corruption, the police refer the cases to the public prosecutor who then leads investigations. The long overdue investigative centres were established, as required by the Law on Criminal Procedure. The investigative centres will support the public prosecutor assuming their leading role in investigations. The Public Prosecutor's Office must also demonstrate its capacity to act proactively in pursuing cases referred by the State Commission for Prevention of Corruption, the State Audit Office and other institutions. In the field of economic crime, experienced and trained police officers are working at central level, and some public prosecutors have solid knowledge about conducting financial investigations. Those skills need to be fully used through a comprehensive strategic approach with clear priorities within the public prosecutorial office. Setting up the investigative centres aims to support this process and alleviate shortcomings at local level. The electronic case management system at the Public Prosecutor’s Office is in place but must become more efficient. Investigations of corruption in public procurement and concessions are becoming more frequent due to the SPO’s activities. The SPO has also started financial investigations and making use of confiscation of assets. The powers and resources of the police, the Public Prosecutor’s Office, the courts and the Agency for Management of Confiscated Property need to be strengthened to allow seizure and confiscation of criminal assets, including in the early stages of criminal investigations. This should confirm the positive trend of adopting temporary measures for freezing bank accounts and property. It was decided to freeze bank accounts in four cases compared to only one last year. Legal framework North Macedonia is party to all international anti-corruption conventions, including the United Nations Convention against Corruption. The criminal code penalises a wide range of corruption related offences. In 2018, the government improved the legal framework for preventing corruption by adopting a new Law on Prevention of Corruption and Conflict of Interests. The new law increases the powers of the State Commission for Prevention of Corruption. It clarifies and strengthens a set of key rules governing incompatibilities between certain public functions, or restrictions on doing business while holding public functions. The law also includes sanctions against institutions that fail to provide information. It facilitates the collection of information by establishing a single form for the declaration of assets and statement of interests in line with the GRECO recommendations. The forms are submitted electronically into the database to ease control and verification. The Law on the Financing of Political Parties stipulates the manner and procedure for ensuring financial means and their management to political parties. Rules on the financing of pre-electoral campaigns are set out in the Electoral Code. Amendments to the Law on the Financing of Political Parties from the state budget increased the proportion of funds available from 0.06% to 0.15%, to increase the financial independence of political parties. In parallel, the maximum amount of donations by both legal entities and individuals was decreased. The State Audit Office exercises ex-post control and the State Commission for Prevention of Corruption’s new powers will allow it to carry out inspections at any time, allowing the continuous monitoring of party financing. Amendments to the law on free access to public information were adopted. These amendments incorporate the right to request information on public finances of political parties. The Law on lobbying adopted in 2008 regulates lobbying activities, the registration of lobbyists and includes a supervision mechanism. There is still a need for introducing rules on how members of Parliament engage with lobbyists and other third parties who seek to influence the legislative process. Amendments to the Law on the Protection of Whistle-blowers, and secondary legislation, implement the recommendations of the Venice Commission but require further alignment with the new EU acquis on this issue. A ‘Manual for the protection of whistle-blowers’ was prepared, and a software was developed to encrypt the data received by the State Commission for Prevention of Corruption. 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 priorities are to strengthen the institutional and legal framework, and ensure effective sanctions against corruption. It also aims to increase public participation and ensure efficient coordination, monitoring and evaluation. The recent reforms contribute substantially to achieving these objectives, notably the strengthening of the institutional and legal system, and the repression part via the work of the Special Public Prosecutor’s Office. Fundamental Rights The legal framework on the protection of fundamental rights is largely in line with European standards. Good progress was made with the adoption of amendments to the Criminal Code on hate crime and the adoption of the Law on Prevention and Protection from Discrimination, a national action plan for implementation of the Istanbul Convention and the deinstitutionalisation strategy. However, the external oversight mechanism of the police is not yet fully operational. The country also needs to make additional efforts to consistently disseminate and address recommendations of European and international human rights bodies, notably regarding the treatment of detained persons, women and persons with disabilities. The probation system needs to be further developed by ensuring availability of alternative sanctions, as this will have a positive effect on both individuals and on the penitentiary system as a whole. Continued efforts are needed to implement the judgments of the European Court of Human Rights. In the coming year, the country should, in particular: ®ensure that all recommendations of European and international human rights bodies are systematically disseminated and implemented, in particular those related to detention, gender equality and the rights of persons with disabilities; ®develop further community services to identify children at risk and to support children victims of violence, Roma and children with disabilities, including by improving inter-agency cooperation; ®implement the new Law on the Protection and Prevention against Discrimination, ensure the harmonisation of other laws with this new law, and improve follow-up of all new and outstanding cases of discrimination, hate crime and hate speech. The country has ratified most international human rights instruments. In the reporting period, the country underwent the United Nations’ Universal Periodic Review by the Human Rights Council and was reviewed by the UN Committees on the Elimination of Discrimination against Women and on the Rights of Persons with Disabilities respectively. Practitioners working in those areas must be made aware of the recommendations stemming from these bodies so that they may introduce adequate changes in their working practices.

The European Court for Human Rights (ECtHR) has found violations of the European Convention on Human Rights in 12 cases related mainly to freedom of association in conjunction with freedom of religion, right to liberty and security and right to a fair trial. The number of new applications lodged with a decision-making body decreased to 305 and there are 339 cases pending before the court. The number of pending ECtHR judgements to be executed stood at 51 at the end of March 2019, with four undergoing an enhanced monitoring procedure. The authorities have made progress in execution of protracted judgments and in April 2018 they issued a public apology in the El Masri case. The staff of the Bureau for Representation before the ECtHR was increased to five people in 2018. The promotion and enforcement of human rights was strengthened with the new competences granted to the Ombudsman’s office on the external oversight of the police. The Ombudsman’s office was also tasked with monitoring implementation of the UN Convention on the Rights of Persons with Disabilities. The government made good progress on the implementation of measures stemming from the Ombudsman’s 2016 report. The Office’s budget was increased and additional staff recruited. This additional staff will help the Ombudsman’s Office to fully exercise its prerogatives. However, it will need further strengthening to effectively fulfil its new obligations. The Office received 3 458 complaints in 2018, with the largest share concerning the judiciary followed by labour relations, penitentiary conditions and consumer rights. The largest number of confirmed violations related to financial and tax issues, followed by labour relations, child rights and judiciary. The government has prepared an action plan to address the recommendations of the European Committee for the Prevention of Torture and provided quarterly reports to the Committee. This led to improvements in the prevention of torture and ill-treatment. Staff members in penitentiary and educational-correctional institutions were trained on the new Code of Conduct for Prison Personnel based on the European Code of Ethics for Prison Staff. Amendments to the Laws on Courts and on the Public Prosecution Office completed the legislative framework for establishing an external oversight mechanism over the work of the police and the prison police. Prosecutors have been assigned and have started their work on overseeing the police. However, the mechanism is not fully operational as investigators still need to be nominated and the civil society members of the civil control mechanism with the Ombudsman's Office have yet to be selected. Work is ongoing to take the most derelict facilities out of operation to address the inhumane conditions noted by the Committee for the Prevention of Torture in some detention facilities. Poor conditions in police stations, social care facilities and psychiatric institutions need to be urgently addressed. Despite reinforcements in terms of staff, the National Preventive Mechanism against torture continues to be hindered by insufficient resources. In 2018, only three complaints for excessive use of force and ill-treatment were filed to the Directorate for Execution of Sanctions. However, this could indicate a low level of trust in complaint mechanisms. The nine complaints filed with the Ombudsman’s Office for ill-treatment in prisons were dismissed as unfounded while three complaints for ill-treatment by the police were transmitted to the Public Prosecutor’s Office. Out of the 64 complaints from citizens on the use of force by police officers, only five were deemed admissible by the Unit for Internal Control and Professional Standards at the Ministry of Interior. In turn, the unit submitted criminal charges for ill-treatment in three cases involving four police officers and notified two other cases involving three police officers to the Public Prosecutor’s Office. The number of criminal charges against police and prison officers for cases of ill-treatment remains very low. It is expected that the new external oversight mechanism over the work of the police and the prison police will address the perception of impunity. From January to mid-March 2019, the relevant unit within the Public Prosecutors’ Office received and started investigating 50 reports against police officers and a few reports of the use of excessive force in prisons. Construction and refurbishment in the prison system is ongoing. New semi-open and open units were inaugurated in Idrizovo Prison but the transfer of inmates to the new premises is slow. The new Law on Execution of Sanctions, adopted in March 2018 addresses weaknesses in the development of a professional management approach in the prison system and introduces new rules limiting the duration of solitary confinement. The strategy for the development of the penitentiary system continued to be implemented and some prison staff were trained on the treatment of violent prisoners, dynamic security, and on international standards and national legislation. The penitentiary sector remains underfunded, understaffed and overly reliant on donor assistance. Healthcare in prisons remains deficient and the transfer to the Ministry of Health is still not finalised. The release of 795 persons based on the December 2017 Law on Amnesty reduced prison overcrowding but is not a sustainable solution as the probation system is still at an early stage of development. The rollout of probation was further delayed until probation officers were recruited for 26 basic courts in November 2018. Following the adoption of the relevant secondary legislation in May 2018, the courts have slowly started issuing alternative sanctions to detention. Developing alternatives to detention is fundamental for sustainably alleviating overpopulation, improving the resocialisation and rehabilitation of convicts and reducing the risk of re-offending. Additional efforts are required to ensure that education and re-socialisation services are available in all penitentiary and educational-correctional facilities. On the protection of personal data, the Directorate for Personal Data Protection needs adequate resources to perform its tasks effectively. In 2018, the Directorate received 396 complaints and carried out 291 inspections, including in the fields of judiciary and law enforcement. Most complaints concerned alleged abuse of personal data on social networks, and alleged unlawful direct marketing and video surveillance. Nine misdemeanour cases were initiated in 2018 but the number of administrative sanctions in cases of breach of personal data protection legislation remains low. The Directorate has continued to review draft legislation, including on the reform of the interception of communication, to ensure its compliance with data protection rules. The Directorate continued to provide training to personal data controllers and processors and to law enforcement personnel and judiciary personnel. Although amendments to the Criminal Code strengthened personal data protection in criminal cases, there was no concrete progress on alignment with the General Data Protection Regulation 2016/679 and Directive 2016/680 (Law Enforcement Directive). The country has not 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. Freedom of thought, conscience and religion continued to be guaranteed and discrimination on grounds of religion prohibited. In April 2018, the European Court of Human Rights ruled that the State violated the Convention by refusing to renew the registration of the Tetovo-based Bektashi Community. The Court's rejection of the country's complaint on the Orthodox Ohrid Archdiocese (Greek-Orthodox Ohrid Archdiocese of the Peć Patriarchy) judgment with respect to freedom of association seen in the light of freedom of religion means it now has to be implemented. The Committee of Ministers of the Council of Europe examined the same case in March 2019 and it welcomed the decision to reopen the registration proceedings and to ensure redress for the applicants in compliance with the Convention. Pope Francis visited the country in May 2019. ---------------------------------------------------------------------------------------------------------Freedom of expression The country has some level of preparation / is moderately prepared in the area of freedom of expression and made good progress. The climate for media freedom and freedom of expression has improved. Open political debate and critical media reporting continued. Further selfregulation efforts are required to improve professional standards and the quality of journalism. The ban on government advertising was respected. Sustained efforts are needed to improve the independence, professional standards and financial sustainability of the public broadcaster. It is essential that the authorities continue to promote freedom of expression. Amendments to the Law on Audio and Audio-visual Media Services have been adopted and their implementation will require strong political commitment to guarantee professionalism, respect for the principles of transparency, merit-based appointments and equitable representation. The financial sustainability of private media and working conditions of journalists remain a challenge. The country has addressed some of the recommendations from the 2018 report, notably by creating a climate that is favourable for expressing pluralistic viewpoints. In the coming year, the country should, in particular: ®continue supporting media pluralism, promoting professionalism, objective reporting and investigative journalism. Build resilience to effectively combat disinformation; ®continue reforming the public broadcaster, ensuring its financial viability and independence; ®continue paying attention to the swift and effective follow-up by law enforcement and judicial authorities of all instances of physical and verbal violence against journalists. The overall situation and political climate for media continued to improve. The government intensified its efforts to support media through legislative changes and by providing financial subsidies for print media. The open dialogue and increased transparency of institutions is acknowledged by professional organisations. Challenges remain however and additional measures are needed to support freedom of expression. Intimidation of journalists Since March 2018, there were five new cases of intimidation of journalists, marking a decrease from the previous year. The Ministry of the Interior started to cooperate with the Association of Journalists to establish accountability for incidents of physical and verbal abuse or threats against journalists. However, there were two incidents of statements against the media being made by high government officials. Politicians and public officials still need to demonstrate a higher level of tolerance towards criticism and promote freedom of expression. Procedures for police conduct towards journalists and registration of attacks need to be improved. Law enforcement authorities and the Public Prosecutor’s Office need to effectively follow-up all incidents against journalists. Old cases of the most serious physical attacks against journalists (13) have not been resolved due to unprofessional conduct in the investigations. Legislative environment The Law on Audio and Audiovisual Media Services was amended in December 2018 and February 2019. The law is now in general accordance with European and international standards on audiovisual media. Some stakeholders criticised the opacity of the process and absence of public consultation on last minute changes to the law. In view of changing market realities, the legislative framework will nonetheless need to be further aligned with the new Audio-visual Media Services Directive. Hate speech is illegal both online and offline. Preliminary steps have been taken to reduce fines for defamation to a symbolic amount which is expected to improve the sense of balance between freedom of expression and protection of reputation.

Implementation of legislation/institutions The Agency for Audio and Audiovisual Media Services has been exercising its supervisory role, including during the referendum and the presidential elections. Due to ambiguities in the legal framework, the State Election Commission and the media regulator each presented contradictory instructions on the access of referendum stakeholders to paid advertising. As part of the media monitoring during the referendum, the Agency initiated five misdemeanour procedures notably for misuse of paid public propaganda and disrespecting deadlines. The number of investigative articles rose from 0.8% in 2017 to 2% in 2018 but the quality of reporting and respect for professional standards need further improvement. The Public Prosecutor’s Office opened an investigation against a journalist on the grounds of hate speech. In 2018, the Council of Media Ethics received 68 complaints for disrespect of ethical standards, notably online (76.5%). Since March 2018, 12 new lawsuits on defamation were registered against journalists. Public service broadcaster The reform of the public service broadcaster is at an early stage. As provided for by the Law on Audio and Audiovisual Media Services, funding for the public broadcaster, the regulator and the broadcasting public enterprise from the state budget will increase to 0.8% after the budget rebalance. The financial sustainability of the public broadcaster needs to be ensured. Upholding the public broadcaster’s independence and preventing undue political influence needs continuous attention. Additional efforts are required to improve the quality and objectivity of its reporting, to improve procedures and to modernise its technical equipment. A longer-term strategic reform needs to be developed in consultation with stakeholders. Economic factors The media agency increased its efforts to disclose the possible existence of illegal media concentration. It is essential to further strengthen the capacity of the regulator to identify collusion between media and politics which impedes editorial independence. The economic impact of rapid technological developments on the audio-visual media market needs to be evaluated by the authorities when preparing new legislation. Government advertising on commercial channels is banned. Media stakeholders expressed concerns that legal changes permitting public funding of the referendum campaign via media advertisements risked repeating influence of political parties on editorial lines. There are six daily newspapers, including two in Albanian language. Following the recommendations of the Senior Experts' Group on systemic Rule of Law issues in 2017, the authorities allocated approximately EUR 700 000 to support the print media. Internet The legislation prohibiting internet service providers from controlling internet traffic continued to be applied. Online media remains unregulated. Disinformation, hate speech, disrespect of professional standards and violations of intellectual property rights are frequent in online media. The authorities need to take measures to effectively combat disinformation. Self-regulatory principles and ownership transparency are needed to increase the respect for ethics and professionalism in online media. Professional organisations and working conditions There was no progress on improving the labour and social rights of journalists whose working conditions are very poor. Consequently, journalists still practice self-censorship. Lengthy negotiations led by the independent union of journalists and media workers did not result in any collective union agreement with any media outlet. Union members are part of working groups working on updating relevant laws. (See also Chapter 10 - Information society and media) ---------------------------------------------------------------------------------------------------------Freedom of Assembly and Association are guaranteed by the Constitution which, similar to the Law on Public Assemblies, allows assemblies without prior announcement. However, no new legal safeguards were introduced regarding the provision on ‘participation in a crowd which commits a crime’ during the process of amendments to the Criminal Code. During 2018 there were no restrictions on the exercise of these rights, including in terms of location. The ‘boycott’ campaign against the 30 September referendum took the form of rallies and social media activity. It featured nationalistic language which was often inflammatory. Regular gatherings also took place to protest against the process of changing the name of the country resulting from the Prespa agreement. These gatherings did not give rise to concerns in terms of use of force. On freedom of association, the Law on Associations and Foundations does not contain undue restrictions to the exercise of this right. Issues of labour and trade union rights are further covered in Chapter 19 - Social policy and employment. Regarding property rights, the absence of strategic documents results in lengthy procedures and insufficient coordination between institutions. This leads to delays in updating registers by the municipal authorities and the Central Register. The Cadastre Office maintained a high rate of resolved cases in 2018 (98%). The reduction of costs introduced in January 2018 led to improvements in citizens’ access the Cadastre services. Registration of land and properties is complete and in December 2018, a funding agreement was signed for the laser scanning of the country's territory. However, the administrations that handle restitution, compensation, and legislation processes struggle to manage their caseload. There remain approximately 7 000 denationalisation cases which still need to be resolved. The legal framework on non-discrimination has been further aligned with the EU acquis and European standards with the adoption of the Law on Prevention and Protection against Discrimination. This law covers a wide range of protected grounds which now also includes sexual orientation and gender identity. A National Coordinative Body was set up to monitor the implementation of the legal and strategic framework on non-discrimination. Weaknesses in terms of budgetary allocations and implementation of the 2016-2020 National Strategy for Equality and Non-Discrimination remained. Deficiencies in the work of the Commission for Protection from Discrimination persisted while its premises and financial resources remained inadequate. There is public mistrust of this body, which is seen as politicised and linked to the former ruling party. The new Law foresees the election of a new Commission. The Ombudsman’s Office received 77 complaints on discrimination. Amendments to the Criminal Code adopted in December 2018 clarified provisions on hate crime and expanded the protected grounds. The Public Prosecutor’s Office became more proactive in opening investigations for alleged hate speech. Collection of data on hate speech is not systematic while an increase in cases of hate crime was noted in the Civil Society database. The Agency for Audio and Audiovisual Media Services reported one case of alleged hate speech and discrimination, which was rejected by the Commission for Protection from Discrimination. Some progress was made on equality between women and men. The legal framework is largely in line with the acquis but it needs upgrading following the ratification of the Istanbul Convention. The government adopted a national action plan for implementing the Convention and a national action plan for gender equality (2018-2020) which proposes to introduce a 50% quota for ensuring participation of women in electoral processes and decision-making by 2020. The plan envisages measures to raise awareness of gender equality and address gender stereotyping. The Parliament adopted a new Law on Termination of Pregnancy, which removes some of the restrictions and administrative obstacles (compulsory counselling followed by a three-day waiting period) which had been previously introduced in 2013. Gender budgeting provisions were implemented at ministerial level. In 2018, three new crisis centres for victims of sexual violence were set up in Skopje, Tetovo and Kumanovo. However, additional shelters for victims of sexual and gender-based violence and human trafficking will be needed to meet the standards of the Istanbul Convention. The gender equality unit of the Ministry of Labour and Social Policy plays a key coordination role and it needs to be adequately resourced to ensure legal and policy tools are implemented effectively. The legal framework for the rights of the child largely complies with international standards. The amendments to the Criminal Code adopted in December 2018 expand the definition of violence against a child, explicitly covering psychological violence, online violence and peer violence and raise the minimum age for unwed life with a child from 16 to 18. Implementation of legislation needs to be reinforced and stakeholders should make the best interest of the child a guiding principle. The national Coordination Body for Protection of Children from Abuse and Neglect has been monitoring violence against children against a set of indicators. Following the monitoring of the Lanzarote Committee of the Council of Europe, a number of recommendations were issued to the country related to protection of children from sexual abuse, covering for example prevention, awareness-raising and screening of professionals in contact with children.

A new action plan for children is still pending since the last one expired in 2015. The deinstitutionalisation process is under way and resettlement of children to community based care has started, leading to the closure of three residential institutions. Additional community services are needed to identify children at risk and to support Roma and children with disabilities who are victims of discrimination and segregation. 2018 saw an increase in child trafficking and a study found that 8 out of 10 children in the country faced violence. Despite measures taken to improve inter-agency cooperation, coordination in preventing and responding to violence is limited. The Ombudsman’s Office confirmed 66 violations of child rights in 2018. The Law on Juvenile Justice is being implemented but access to justice and legal representation should be improved. There were no improvements in the material conditions and availability of education for detained children. There was some progress in improving the rights of persons with disabilities. The national coordinative and monitoring bodies for implementing the UN Convention on the Rights of Persons with Disabilities were established. In October 2018, the UN Committee on the Rights of Persons with Disabilities recommended further efforts to guarantee non-discrimination, to repeal provisions allowing involuntary deprivation of liberty, to improve accessibility, to ensure inclusive education, etc. The government adopted an ambitious National Strategy on Deinstitutionalisation (2018-27) and corresponding action plan. The government is committed to ensuring that by 2020 no child under 3 years old will be institutionalised. The resettlement of some children with disabilities to small community homes has begun. The moratorium on admitting new residents to the Special Institute of Demir Kapija remains in effect but conditions in this institution remain very poor. In 2018, the Ombudsman’s Office reported 21 complaints related to discrimination against children with disabilities. (See also Chapter 19 – Social Policy and employment) The rights of lesbian, gay, bisexual, transgender and intersex (LGBTI) persons are better protected following amendments to the Criminal Code and adoption of the new Law on Prevention and Protection from Discrimination. Sexual orientation and gender identity are grounds for protection in both. The positive attitude from the political leadership and advocacy by the LGBTI inter-party group of 13 MPs continued. However, societal prejudice, hate speech, discrimination and widespread intolerance are prevalent against LGBTI persons. Incitement to homophobic/transphobic hatred and violence needs to be more effectively prevented and prosecuted. No final convictions have been issued for the 2012, 2013 and 2014 attacks on the LGBTI support centre. Further efforts are needed on tackling and collecting data on hate crimes and hate speech based on sexual orientation and gender identity. The legal framework does not allow for the official recognition of same-sex couples. Transgender persons’ access to healthcare remains limited. Preparations to establish legally regulated gender recognition procedures were initiated in November 2018. In January 2019, the ECtHR found the country to be in violation of the Article 8 of the Convention related to the right to private and family life following a case related to