TABLE OF CONTENTS

A........... Introduction.................................................................................................................... 3

a).......... Application for membership............................................................................................ 3

b).......... Relations between the EU and Serbia.............................................................................. 4

c).......... Contents of the Analytical Report.................................................................................... 7

B........... Criteria for membership.................................................................................................. 8

1........... Political criteria............................................................................................................... 8

1.1........ Democracy and the rule of law........................................................................................ 8

1.1.1..... Parliament...................................................................................................................... 9

1.1.2..... The executive............................................................................................................... 11

1.1.3..... Public administration..................................................................................................... 14

1.1.4..... Judicial system.............................................................................................................. 16

1.1.5..... Anti-corruption policy................................................................................................... 20

1.1.6..... Civilian oversight of security forces................................................................................ 22

1.2........ Human rights and the protection of minorities................................................................. 23

1.3........ Regional issues and international obligations................................................................... 33

1.4........ General evaluation........................................................................................................ 37

2........... Economic criteria.......................................................................................................... 40

2.1........ Economic developments............................................................................................... 40

2.2........ Assessment in terms of the Copenhagen Criteria............................................................ 43

2.2.1..... The existence of a functioning market economy.............................................................. 43

2.2.2..... The capacity to cope with competitive pressure and market forces within the Union........ 51

2.3........ General evaluation........................................................................................................ 54

3........... Ability to assume the obligations of membership............................................................. 54

3.1........ Chapter 1: Free movement of goods............................................................................. 55

3.2........ Chapter 2: Freedom of movement for workers.............................................................. 57

3.3........ Chapter 3: Right of establishment and freedom to provide services................................. 60

3.4........ Chapter 4: Free movement of capital............................................................................. 61

3.5........ Chapter 5: Public procurement...................................................................................... 63

3.6........ Chapter 6: Company law.............................................................................................. 65

3.7........ Chapter 7: Intellectual property law............................................................................... 66

3.8........ Chapter 8: Competition Policy...................................................................................... 68

3.9........ Chapter 9: Financial Services........................................................................................ 70

3.10...... Chapter 10: Information society and media.................................................................... 72

3.11...... Chapter 11: Agriculture and rural development.............................................................. 74

3.12...... Chapter 12: Food safety, veterinary and phytosanitary policy......................................... 77

3.13...... Chapter 13: Fisheries.................................................................................................... 79

3.14...... Chapter 14: Transport policy........................................................................................ 80

3.15...... Chapter 15: Energy....................................................................................................... 82

3.16...... Chapter 16: Taxation.................................................................................................... 85

3.17...... Chapter 17: Economic and Monetary Policy.................................................................. 87

3.18...... Chapter 18: Statistics.................................................................................................... 89

3.19...... Chapter 19: Social Policy and employment.................................................................... 91

3.20...... Chapter 20: Enterprise and industrial policy................................................................... 95

3.21...... Chapter 21: Trans European Networks......................................................................... 97

3.22...... Chapter 22: Regional policy and coordination of structural instruments........................... 98

3.23...... Chapter 23: Judiciary and fundamental rights............................................................... 100

3.24...... Chapter 24: Justice, freedom and security.................................................................... 105

3.25...... Chapter 25: Science and research............................................................................... 111

3.26...... Chapter 26: Education and Culture.............................................................................. 113

3.27...... Chapter 27: Environment............................................................................................ 114

3.28...... Chapter 28: Consumer and health protection............................................................... 120

3.29...... Chapter 29: Customs Union........................................................................................ 122

3.30...... Chapter 30: External relations..................................................................................... 125

3.31...... Chapter 31: Foreign, Security and Defence Policy....................................................... 127

3.32...... Chapter 32: Financial Control..................................................................................... 129

3.33...... Chapter 33: Financial and budgetary provisions........................................................... 131

3.34...... General evaluation...................................................................................................... 132

Statistical Annex....................................................................................................................... 135

A. Introduction

a) Application for membership

Serbia presented its application for membership of the European Union on 22 December 2009. Subsequently, on 25 October 2010, the Council of the European Union requested the Commission to submit its opinion on this application, in line with the procedure laid down in Article 49 of the Treaty on European Union, which states: 'Any European State which respects the values referred to in Article 2 and is committed to promoting them may apply to become a member of the Union. The European Parliament and national Parliaments shall be notified of this application. The applicant State shall address its application to the Council, which shall act unanimously after consulting the Commission and after receiving the consent of the European Parliament, which shall act by a majority of its component members. The conditions of eligibility agreed upon by the European Council shall be taken into account.'

Article 2 states that 'the Union is founded on the values of respect for human dignity, freedom, democracy, equality, the rule of law and respect for human rights, including the rights of persons belonging to minorities. These values are common to the Member States in a society in which pluralism, non-discrimination, tolerance, justice, solidarity and equality between women and men prevail.'

This is the legal framework within which the Commission submits its Opinion and the present analytical report.

The Feira European Council in June 2000 had acknowledged that Western Balkan countries participating in the Stabilisation and Association Process were 'potential candidates' for EU membership. The European perspective of these countries was further confirmed by the Thessaloniki European Council in June 2003, which endorsed the "Thessaloniki Agenda for the Western Balkans”. This agenda remains the cornerstone of the EU policy towards the region.

The European Council of December 2006 renewed the EU's commitment "that the future of the Western Balkans lies in the European Union" and reiterated that "each country's progress towards the European Union depends on its individual efforts to comply with the Copenhagen criteria and the conditionality of the Stabilisation and Association Process. A country's satisfactory track-record in implementing its obligations under a Stabilisation and Association Agreement (SAA), including trade related provisions, is an essential element for the EU to consider any membership application". At the Sarajevo EU-Western Balkans ministerial meeting on 2 June 2010, the EU reiterated its unequivocal commitment to the European perspective of the Western Balkans and that the future of these countries lies in the European Union.

In line with the Treaty requirements, the current assessment is made in terms of the conditions of eligibility laid down by the European Council. In Copenhagen in June 1993, the European Council concluded that:

"Accession will take place as soon as a country is able to assume the obligations of membership by satisfying the economic and political conditions required.

Membership requires:

that the candidate country has achieved stability of institutions guaranteeing democracy, the rule of law, human rights and respect for and protection of minorities; the existence of a functioning market economy, as well as the capacity to cope with competitive pressure and market forces within the Union; the ability to take on the obligations of membership including adherence to the aims of political, economic and monetary union".

The Union's capacity to absorb new members, while maintaining the momentum of European integration, is also an important consideration in the general interest of both the Union and the candidate countries.

In December 1995, in Madrid, the European Council referred to the need "to create the conditions for the gradual, harmonious integration of [the applicant] countries, particularly through the development of the market economy, the adjustment of their administrative structures and the creation of a stable economic and monetary environment".

The Stabilisation and Association Process (SAP) conditionalities were defined by the Council on 31 May 1999. They include co-operation with the International Criminal Tribunal for the Former Yugoslavia (ICTY) and regional co-operation. As a fundamental element of the SAP, these conditions are integrated into the Stabilisation and Association Agreement (SAA) with Serbia, currently under ratification, as well as in the Interim Agreement (IA) on trade and trade-related matters, which entered into force on 1 February 2010.

In December 2006, the European Council agreed that "the enlargement strategy based on consolidation, conditionality and communication, combined with the EU's capacity to integrate new members, forms the basis for a renewed consensus on enlargement".

In the present Opinion, the Commission analyses Serbia's application on the basis of the country's capacity to meet the criteria set by the Copenhagen European Council of 1993 and the conditionality of the Stabilisation and Association process. Serbia's track-record in implementing its obligations under the Stabilisation and Association Agreement and the Interim Agreement on trade and trade-related matters, is also being examined.

In line with the renewed consensus on enlargement, this Opinion also identifies key policy areas likely to require particular attention in the event of the accession of Serbia and provides initial impact estimates with regard to the policies and sectors concerned. The Commission will provide more detailed impact assessments for these key policy areas at later stages of the pre-accession process. In addition, an accession treaty for Serbia would involve a technical adaptation of the EU institutions in the light of the Treaty on the European Union.

b) Relations between the EU and Serbia

Relations between the EU and Serbia have developed since the democratic changes of 2000, initially with the Federal Republic of Yugoslavia and from 2003 onwards with the State Union of Serbia and Montenegro. The EU continued its relations with the Republic of Serbia as the successor state of the State Union when Montenegro became independent in 2006.

Serbia is participating in the Stabilisation and Association Process. The Stabilisation and Association Agreement provides a framework of mutual commitments on a wide range of political, trade and economic issues. It was signed, along with the Interim Agreement on trade and trade-related matters, in April 2008. EU ministers agreed to submit the SAA to their parliaments for ratification and to implement the Interim Agreement as soon as the Council decided that Serbia was fully cooperating with the International Criminal Tribunal for the former Yugoslavia. Serbia started on 1 January 2009 to implement the Interim Agreement. The Interim Agreement entered into force on 1 February 2010. At the 14 June 2010 Foreign Affairs Council, Ministers agreed to submit the Stabilisation and Association Agreement to their parliaments for ratification. The process is ongoing.

A European Partnership with Serbia was adopted by the Council in 2004 and updated in 2006 and 2008.

Political dialogue meetings at ministerial level have been held since 2003. Policy dialogue between the European Commission and the Serbian authorities has been taking place in the framework of the Enhanced Permanent Dialogue (EPD) since 2003. Inter-parliamentary meetings between representatives of the European Parliament and of the Serbian parliament have been held annually since 2006.

Serbia has built a positive track record in implementing the obligations of the Stabilisation and Association Agreement and the Interim Agreement on trade and trade-related matters. An interim committee and a number of sub-committees meet annually, including on the internal market, competition, transit traffic, trade, customs, taxation, agriculture and fisheries. Several sub-EPD meetings are covering all sectors of the SAA that are not included in the Interim Agreement, such as energy, environment, social policy, justice, freedom and security. In general terms, Serbia does respect its SAA commitments in these areas and cooperation is progressing well.

Serbia participates in the economic dialogue with the Commission and the EU Member States. The aim of this dialogue is to prepare Serbia for participation in the multilateral surveillance and economic policy co-ordination currently in place in the EU as part of the Economic and Monetary Union. In this framework, Serbia presented in January 2011 an update of its annual Economic and Fiscal Programme (EFP).

Visa liberalisation for Serbian citizens travelling to the Schengen area was granted by the Council, after consultation with the European Parliament, as of 19 December 2009. This decision was based on substantial progress in the areas of justice, freedom and security and fulfilment of the specific conditions set out in the roadmap for visa liberalisation. The rules for visa-free travel have been respected by the vast majority of travellers. To ensure the continued implementation of the commitments, a post visa liberalisation monitoring mechanism was established in view of increased numbers of asylum seekers from the region. The Commission presented its first monitoring report to the European Parliament and the Council in June 2011. An agreement on readmission between the European Union and Serbia has been in force since January 2008.

Serbia continued to be an active participant in regional initiatives, including the South East European Cooperation Process (SEECP) of which it has assumed the chairmanship in 2011, and the Regional Cooperation Council (RCC). Serbia held the Chairmanship of CEFTA in 2010.

Serbia signed the Energy Community Treaty in October 2005 and the European Common Aviation Area (ECAA) agreement in June 2006.

In October 2008, the Government of Serbia adopted the National Programme for the Integration of Serbia in the European Union for the period 2008-2012. A revised and updated version of this document was adopted in December 2009. In December 2010, the Government adopted an Action Plan on the fulfilment of priorities under the European Commission 2010 Progress Report, with the aim of increasing focus and achieving additional results on the reform agenda, ahead of the present Opinion.

As regards trade, Serbia has been a member of CEFTA since May 2007 and the negotiations for its accession to WTO are in a final stage. The EU is, with CEFTA, the main trading partner of Serbia. Trade integration with the EU is high. In 2010, 56% of Serbian imports worth €7.1 billion came from the EU (8.5% from CEFTA), mostly consisting of mineral fuels, chemicals, machinery and transport equipment, and manufactured goods. 57% of Serbian exports, or goods worth €4.2 billion, went to the EU (29% to CEFTA), consisting mainly of food products, cereals, basic metals, machinery and transport equipment. Serbia's trade deficit with the EU amounted to €2.9 billion in 2010.

The share of EU investments to Serbia is high, reaching in a peak of almost 88% of total FDI in 2010.

Serbia has been receiving EU financial assistance since 2001. Overall, between 2001 and 2011, the EU committed over €2 billion to Serbia in the form of grants and €5.8 billion in the form of soft loans. From 2001 to 2006, Serbia benefited from EU CARDS assistance worth €1,045 million. Since 2007, CARDS has been replaced by the Instrument for Pre-Accession Assistance (IPA), under which Serbia received assistance worth €974 million between 2007 and 2011.

The assistance under IPA is designed to support the reforms undertaken as part of the European integration process, with a focus on the rule of law, institution building, approximation with the EU acquis, sustainable economic and social development, and support to civil society.

The Commission adopted in June 2011 a Multi-Annual Indicative Planning Document for the IPA programme in Serbia for the period 2011-2013. It introduces a new sector-based approach, focusing assistance on the following seven sectors: justice and home affairs; public administration reform; social development; private sector development; transport; environment, climate change and energy; agriculture and rural development.

Financial aid under IPA is structured under two components. Component I focuses on political and socio-economic development (rule of law, alignment with the acquis, education, transport, energy, environment, agriculture etc.), while Component II focuses on cross-border cooperation (environment, culture, research, security etc.). Serbia received €100 million in the form of budgetary support under the 2009 IPA programme, to help it alleviate the socio-economic impact of the economic downturn. An Agreement on Macro Financial Assistance was signed in July 2010 between EU and Serbia and €100 million were disbursed in July 2011.

IPA assistance is currently managed centrally by the EU Delegation in Belgrade. Serbia is preparing for decentralised management of IPA funds. Further extensive efforts, including the strengthening of administrative capacities, remain necessary before Serbia is in a position to take over responsibility.

Serbia participates fully in a number of EU programmes: the 7th Framework Programme for research and technological development, PROGRESS, the Competitiveness and Innovation Programme, the Information and Communication Technologies Policy Support Programme, the Culture Programme, the Customs Programme and the Fiscalis Programme. IPA funds are used to meet part of the costs of participation in these programmes.

c) Contents of the Analytical Report

The analytical report takes account of the conclusions of the European Council in Copenhagen in 1993 and subsequent European Council conclusions. The report:

Describes the relations between Serbia and the Union;

Analyses the situation in respect of the political conditions established by the European Council (democracy, rule of law, human rights, protection of minorities; regional issues and international obligations);

Assesses the country's situation and prospects in respect of the economic conditions established by the European Council (functioning market economy, capacity to cope with competitive pressure);

Addresses the question of the capacity of the country to adopt the obligations of membership, i.e. the total body of EU legislation as expressed in the Treaty, the secondary legislation, and also the policies of the Union (acquis of the European Union);

Provides, in line with the December 2006 European Council conclusions, initial impact estimates in the fields of freedom of movement for workers (chapter 2), agriculture and rural development (chapter 11), regional policy and coordination of structural instruments (chapter 22), and financial and budgetary provisions (chapter 33). These have been identified as the main policy areas likely to require particular attention in the case of Serbian accession.

In assessing Serbia's situation with regard to the economic criteria and its capacity to assume the obligations of the acquis, the Commission has also estimated the progress which could reasonably be expected in the years ahead, before possible accession, taking account of the fact that the acquis itself will continue to develop.

The Commission has drawn on a number of sources of information: answers given by the Serbian authorities to a detailed questionnaire and additional follow-up questions, consultations with the EU Delegation in Serbia, reports of expert missions, reporting by the Member States' Embassies in Belgrade, European Parliament reports[1], assessments by international organisations (including the Council of Europe, OECD, OSCE, IMF, World Bank), as well as local and international non-governmental organisations.

This Opinion has been prepared following a methodology similar to that used in previous Opinions. The Commission organised a number of expert missions in Serbia, which were concentrated mainly in the fields covered by the political criteria. This methodology allowed a sound assessment to be made of the administrative capacities of Serbian institutions and of the way legislation is implemented, and it helped to better identify the remaining challenges and priorities for future action. The Commission has analysed both the present situation and the medium-term prospects. For the purpose of this Opinion, and without prejudging any future date of accession, the medium-term perspective has been defined as a period of five years.

B. Criteria for membership

1. Political criteria

The European Council in Copenhagen in 1993 set a number of political criteria for accession to be met by applicant countries. A country must have achieved 'stability of institutions guaranteeing democracy, the rule of law, human rights and respect for and protection of minorities'. In the case of the Western Balkans the conditions defined by the Stabilisation and Association Process are also a fundamental element of EU policy, which will be assessed in this report. These include regional cooperation, good neighbourly relations and compliance with international obligations, such as cooperation with the UN International Tribunal for the former Yugoslavia (ICTY).

The political criteria established in Copenhagen derive from the fundamental values on which the EU is founded, as set out in Article 2 of the Treaty on European Union. These principles are emphasised in the Charter of Fundamental Rights of the European Union. Article 6(1) of the Treaty states that: 'The Union recognises the rights, freedoms and principles set out in the Charter of Fundamental Rights of the European Union of 7 December 2000, as adapted at Strasbourg, on 12 December 2007, which shall have the same legal value as the Treaties'.

The assessment set out below examines the main ways in which public authorities are organised and operate, and the situation with regard to protection of fundamental rights. It is not confined to a formal description, but seeks to ascertain the way in which democracy and the rule of law actually function in practice.

1.1. Democracy and the rule of law

The Republic of Serbia continued as a successor state of the former State Union of Serbia and Montenegro, following Montenegro's proclamation of independence in June 2006.

A new Constitution was adopted by an overwhelming majority in parliament and in a subsequent referendum, and entered into force in November 2006. The Constitution lays down the rules of parliamentary democracy, separation of powers and independence of the judiciary. It defines the fundamental principles of rule of law, social justice, respect for human and minority rights, and prohibits capital punishment and discrimination of any kind. The Constitution establishes the right to constitutional appeal and the Ombudsman. It sets out the principle of democratic and civilian control of the armed forces. It provides that Serbia can only conclude international treaties that are compatible with the Constitution[2]. A two-thirds majority vote is required in parliament to both launch and approve a revision of the Constitution. The process of aligning the legal framework with the new Constitution has been almost completed.

The Constitution is largely in line with European standards. However, some provisions would still need to fully reflect the recommendations of the Venice Commission in its Opinion of March 2007, in particular those allowing control by political parties over parliamentary mandates (See also section infra) and those providing for an excessive role of parliament in appointments and dismissals, in particular in the judicial system.

Overall, the Constitution lays down the necessary principles for a parliamentary democracy based on the rule of law and the separation of powers. It is largely in line with European standards.

1.1.1. Parliament

The Serbian Parliament is unicameral, with 250 members elected by direct universal suffrage for a four-year term. The Constitution guarantees the right to vote to all Serbian citizens over the age of 18. The Law on the Election of Members of Parliament provides for proportional representation, according to the D'Hondt method, of candidate lists which have achieved a five per cent threshold of votes; in order to facilitate their representation, no threshold is applied to lists representing national minorities. Serbia is regarded as a single constituency.

The parliamentary elections, held in May 2008, were assessed by OSCE/ODIHR as being overall in line with international standards. The work of the election administration was good and transparent. However, significant shortcomings of the electoral legislation against EU standards were noted, particularly provisions that allowed political parties to appoint Members of Parliament (MPs) after the vote without adhering to the order of the lists of candidates presented to the voters. In April 2010, the Constitutional Court ruled similar provisions in the Law on Local Elections to be unconstitutional.

The electoral legislation has since been brought into line with European standards. The 2000 Law on the Election of Members of Parliament was amended in May 2011 and now requires that the appointment of MPs should follow the order of the lists. It also puts an end to the practice of 'blank resignations', by which MPs were tendering resignation letters to their parties. Similar changes were also introduced in the Law on local elections in July 2011. The 2009 Law on a Single Voters Register will also improve the accuracy and security of data when it enters into force in December 2011. The Law on Financing of Political Activities adopted in June 2011 covers the financing of electoral campaigns with provisions on transparency of funding sources, allocation of state funding and enhanced control prerogatives for the Anti-Corruption Agency.

The Speaker of Parliament is elected for a four-year term. Among the six deputy speakers, four are currently from the opposition. There are 30 standing committees, 12 of which are chaired by MPs from the opposition. Debates in committees are open to the media and plenary sessions are broadcast. The President of the Republic can dissolve parliament on a proposal from the government and shall dissolve parliament when it fails to elect a new government following its resignation or a motion of non-confidence. Women account for 22% of the number of MPs, a proportion which will be increased to at least 30% in the next legislature, in accordance with the May 2011 amendments to the electoral law. Requests to waive the immunity of an MP in cases involving criminal offences have recently begun to be processed.

Legislative proposals can be tabled by each MP, the government, the Assembly of the Autonomous Province, an initiative supported by 30,000 voters and, in their respective areas of competence, by the Ombudsman and the National Bank of Serbia. Laws are normally adopted after four readings: two in the relevant committees, followed by two readings in the plenary comprising, respectively, a general debate on the rationale, objectives and essential elements of the proposed legislation and a detailed debate on those articles that are the subject of amendments, before final adoption. A single debate may be organised for a number of bills that are related. An urgent procedure, which shortens the deadlines of readings and the length of debates, may be used under exceptional circumstances, including for the purpose of alignment with the EU acquis. A fast-track procedure, with similarly abbreviated stages, can be applied to legislation aimed at achieving harmonisation with the EU acquis. Laws are generally adopted by a simple majority vote and with the proviso that a majority of MPs are present.

The 2010 Law on the National Assembly established the budgetary autonomy of parliament, a "collegium" composed of the bureau of parliament and the heads of political groups, which meets occasionally, and rules on the transparency of parliamentary bodies. The first autonomous budget was approved in December 2010; an office for budget planning and analysis was established and an internal auditor was appointed in April 2011. The rules of procedure adopted in 2010 clarified the legislative procedures, introduced public hearings and enhanced the existing instruments of control over the executive. Under these rules the number of standing parliamentary committees will be reduced to 19 as from the next legislature. Amendments adopted in 2010 allowing MPs to hold other public functions were deemed invalid by the Constitutional Court in July 2011 and concerned MPs had to choose between their mandates in September 2011.

Twenty-one political parties are currently represented in parliament; four parties representing national minorities have constituted a parliamentary group. They took part in the parliamentary elections of May 2008, either individually or as part of coalition lists. The largest opposition party split after the elections into two separate political groups. The 2009 Law on Political Parties established stricter rules for party registration, including the obligation to collect 10,000 signatures (1,000 for parties representing national minorities). Following its entry into force, a total of 81 parties have been registered, of which 45 represent national minorities.

Parliamentary business has run more smoothly and effectively under the current legislature than previously. Since 2008, parliament engaged in extensive legislative activity aimed at establishing a systemic legal framework in line with European standards. New procedural rules have streamlined the parliamentary agenda and reduced the previously widespread practices of parliamentary obstruction. There was also an intense mobilisation in 2011 on the priorities of the government's Action Plan aimed to address the challenges identified in the 2010 Commission Progress report. Nevertheless, urgent and other abbreviated procedures were applied in many instances, including for key pieces of legislation, thereby limiting parliamentary and public debate. Stricter criteria should be applied to urgent and fast-track procedures aimed at harmonisation with the EU acquis in order to limit their application to measures of technical alignment with the EU acquis. There is no consistent approach to the consultation of stakeholders. Not enough attention is paid to the quality of legislation. As a result, the Constitutional court invalidated parts of several important pieces of legislation. Appointments that fall under the competence of parliament are often late and in some instances based on unclear criteria.

A Committee for European Integration has been in place since May 2004 and is tasked with verifying the compatibility of proposed legislation and other measures with European standards. Since 2009 it has held regular hearings of the government on the implementation of the National Plan for European Integration.

There has been a gradual improvement in parliament's role of oversight and control of the government. It is exercised mainly by means of parliamentary questions addressed to the government, to one or more ministers and to the Prime Minister, during sessions held on a monthly basis. There is provision for interpellations, votes of confidence and the establishment of committees of inquiry. The Government presents an annual report. Individual ministers provide specific reports and attend hearings of the relevant committees. Although the use of oversight tools has developed, it remains largely formal. Parliament adopted amendments to its rules of procedure in February 2011 that clarified its relations with independent regulatory bodies. It still needs to develop the use of their findings to enhance its own oversight over the executive.

The work of committees remains weak and largely reactive due to limited resources and expert staff. This hampers the ability of parliament to scrutinise draft legislation in depth, including its financial implications, and to monitor the implementation of legislation. A European Integration Department, with some initial capabilities, was established in the parliamentary service to support the work of the Committee for European Integration.

Overall, elections have been consistently conducted in accordance with international standards for democratic elections since 2001. The electoral legislation has recently been brought into line with European standards and consolidates the free exercise of parliamentary mandates, a principle which also needs to be fully enshrined, in due course, in the Constitution.

There has been a marked improvement in the functioning and the legislative activity of parliament in the current legislature. There was a striking mobilisation of efforts in the last year, which led to substantial results. Improved rules of procedure helped to streamline the debates, while at the same time reducing obstruction. Further efforts are needed in order to enhance the legislative process, including the conduct of proper impact assessments and a consistent approach to the consultation of stakeholders. Oversight of the government, including the monitoring of the implementation of legislation, has still to be strengthened.

1.1.2. The executive

The President of Serbia is elected by direct, universal suffrage for a five-year term of office, which is renewable once. The unity of the State is vested in the President. The President represents Serbia nationally and abroad, promulgates laws and may exercise a suspensive veto. He proposes a Prime Minister-designate to the Parliament. He appoints one third of the members of the Constitutional Court. The President may dissolve the Parliament upon a proposal from the Government. The President appoints and dismisses ambassadors and other diplomatic representatives upon a proposal from the Government, and grants amnesty and performs other duties laid down in the Constitution. He is the commander of the armed forces and has the power to appoint, promote and dismiss military officers. The President enjoys equivalent immunity to that of Members of Parliament and may not perform any other public function or professional activity. The President may be impeached for violation of the Constitution under a parliamentary procedure initiated by at least one third of MPs and confirmed by a two-thirds majority vote, following an opinion of the Constitutional Court.

The current President is Boris Tadic, who was elected in June 2004 as President of the Republic of Serbia within the State Union of Serbia and Montenegro, and elected in February 2008 as President of the Republic of Serbia.

The decision to appoint the Prime Minister is taken by parliament on a proposal by the President. Parliament approves the composition of the government and its programme by an absolute majority, on a proposal by the Prime Minister-designate. All government members, including the Prime Minister, enjoy immunity due to their function, but are accountable to parliament. Their position is incompatible with being an MP or holding executive or representational functions at the level of an autonomous province or local self-government.

The current government is led by Prime Minister Mirko Cvetkovic and was appointed in July 2008. It was restructured and downsized in March 2011. It has 21 members, of whom three are women, and it includes a Vice Prime Minister and three Deputy Prime Ministers, one of whom is in charge of EU integration. The Prime Minister currently also assumes the functions of Minister of Finance.

The government's powers, internal organisation and working procedures are regulated by the Constitution, the Law on Government, the Law on Ministries, the Law on Public Administration and its rules of procedure. The government is supported by a General Secretariat. There are rules on the coordination of public appearances and statements of ministers relating to the work and decisions of the government. The government, as well as all other public administration bodies, are bound to provide public access to information on their work, pursuant to the Law on free access to public information. Transparency of decision-making and access to sensitive information, such as appointments and salaries in public companies, have yet to be improved.

The government conducts Serbia's domestic and foreign policies and implements legislation. It steers the country's reforms, coordinates the work of public administration bodies, and adopts policy guidelines and strategies. The government meets and takes decisions in regular weekly sessions. It works on the basis of an annual work programme, including a legislative programme and a budget memorandum defining the fundamental objectives of public finances and of macroeconomic policy.

The government's rules of procedure were strengthened in June 2010 as regards the practice of drawing up for each legislative proposal a statement of compliance with the EU acquis, which is now mandatory and must also include a table of concordance. Such legislative proposals must also include an impact assessment with an estimate of their financial implications. Government is supported by a Legislative Secretariat, which checks the constitutionality and legality of draft measures, and an Office for Regulatory Reform and Regulatory Impact Analysis, established in November 2010, to assist in developing impact assessment. The Ministry of Finance reviews the financial implications of draft legislation.

In spite of those recent improvements, the government's capacity for strategic policy planning has yet to be developed. Inter-ministerial and inter-agency coordination need to be improved and compartmentalisation reduced. The quality of legislation prepared by government remains uneven. A more consistent and fully transparent approach to the consultation of stakeholders is needed for the preparation of draft legislation, as well as sufficient consideration of its enforceability. There is room for improvement of the consideration given to suggestions made by relevant state institutions and independent regulatory bodies.

The Serbian European Integration Office (SEIO) was established in 2004 and has since developed its capacities and demonstrated great ability to coordinate government activity in relation to the EU agenda of reforms. A structure comprising a high-level coordination body supported by an expert group and 35 expert sub-groups covering all chapters of the acquis was established in 2007. The government adopted a National Programme for EU Integration (NPI) in 2008 and revised it in 2009. It is a comprehensive planning document that encompasses the legislative and administrative reforms that are considered necessary in order to prepare for EU membership. In December 2010, the government adopted an Action Plan aimed to address the challenges identified in the 2010 Commission Progress report. The SEIO monitors the implementation of commitments identified in the NPI and the Action Plan, and reports on them on a quarterly basis. The rules of procedure of the government were adapted in May 2010 to step up the process of harmonisation of legislation with the acquis, in line with the stated priority attached by the government to the European integration process. A robust network of EU integration correspondents and departments in line ministries will be needed to help Serbia progress in its EU integration process.

Serbia has two main levels of government – central and local self-government – as well as the autonomous province of Vojvodina. A Law on Territorial Organisation, the Law on Local Government and the Law on the Capital City were adopted in 2007. Serbia encompasses 122 municipalities, 22 towns and the city of Belgrade, as a special territorial unit. As regards the Province of Vojvodina, a new Statute was adopted by the Provincial Assembly in 2008; the Statute and the Law determining the competences of Vojvodina were approved in the National Assembly in 2009. A Law on public property which entails transfers of competences to the Province of Vojvodina, as well as to municipalities, was adopted in September 2011. (See also political criteria – Human Rights and the protection of minorities – property rights.)

Central authorities have delegated competences to units of local self government in areas such as building permits, utilities, culture, education, health, social and child welfare, protection of the environment and agricultural land. A law on fiscal decentralisation was adopted in June 2011 which aims at providing municipalities with additional funding through allocations stemming from the income tax. However, a complete overview and inventory of the functions delegated to municipalities remain to be established. Transfers have been made without ensuring sufficient capacity and resources at local level, in part because of the impact of the economic crisis on public finances which meant that municipalities' own revenues were also shrinking. The National Council for Decentralisation was established in 2009, but has been mostly inactive since. There has been insufficient consultation with local authorities in the decision-making process relating to the development of new legislation or amendments to existing laws that have implications at the local level.

Overall, Serbia has a well-established functioning system of executive power. Serbia attaches high priority to the European integration process and the government has adapted its procedures accordingly. The Serbian European Integration Office plays a central and valuable role in the coordination of the EU reform agenda. Serbia has established a Statute for the province of Vojvodina and has taken steps to increase competencies at municipal level. The government's capacities for policy planning and coordination need to be seriously overhauled. Further efforts are needed in order to make effective use of the regulatory impact assessment and improve public consultation in the legislative process, particularly with regard to civil society and local self-government. Implementation of laws needs to be better prepared and monitored. Transfers of competences at local level should be backed up by corresponding resources and appropriate attention paid to sound financial management.

1.1.3. Public administration

The legal framework providing for public administration reform (PAR) is largely in place in Serbia and administrative capacities are generally well developed, in particular at central level. A Strategy for PAR was adopted by the Government in 2004 and supplemented by an Action Plan covering the period 2009-2012. The aim of the Strategy and Action Plan is to create a public administration oriented towards the citizens and based on the principles of depoliticisation, professionalisation, rationalisation, modernisation and decentralisation. The two main actors involved in coordinating and monitoring the reform are the Council for PAR, established in 2002, and the Ministry for Human and Minority Rights, Public Administration and Local Self-Government. The PAR Council is chaired by the Prime Minister and brings together the ministers holding the main responsibilities in the reform program. It ensures the strategic coordination of the PAR strategy. The Ministry is entrusted with the day-to-day coordination and monitoring of reforms. In order to ensure the coordination of all actors, reform coordinators/teams have been appointed in each relevant body of the public administration.

The implementation of the Strategy is making slow progress. The PAR Council has met several times since April 2009, but mainly to consider administrative and technical issues. A stronger political commitment and a strengthened strategic approach to reform are needed. Enhanced coordination is necessary because responsibilities are divided between several actors, and the monitoring of PAR implementation needs to be improved. Sufficient human and financial resources have to be allocated to the Ministry in order for it to efficiently carry out its PAR coordination tasks.

The Law on Civil Servants (LCS), adopted in 2005, regulates the position of employees in the public administration. The Law was subsequently amended to establish educational requirements for civil servant posts, aimed at increasing professionalism and reducing the risk of political influence and nepotism. However, the LCS exclusively regulates the legal regime of civil servants in state authorities and does not apply to local self-government employees. A significant number of appointments for senior civil servant positions are still pending. Selection procedures are not applied uniformly and, in the absence of criteria for final recruitment decisions, managers still have excessive discretionary powers when choosing candidates from lists prepared by the competitions' selection panels. Competence and professionalism in appointments at management and lower levels in the administration need to become the rule. Temporary employees are not recruited according to competitive criteria and contracts are allocated without internal or public competition.

A Human Resources Management Service was established in 2006, in charge of: internal advertising and public competitions for non-management jobs; checking staffing plans for Government bodies; keeping records of the central public administration personnel and overseeing the general professional training programme for civil servants. A Strategy for the professional training of civil servants for the period 2011- 2013 was adopted in July 2011. The Strategy aims at creating a new system of training, through the establishment of a central institution in charge of the implementation of training programmes for civil servants. A fifth annual training programme was adopted in January 2011. The programme embraces a wide range of topics, including development of senior management and EU integration. However, only a small percentage of civil servants, and in particular a very small percentage of managers, takes part in this training. Induction training is not provided.

The Law on Administrative Disputes, regulating the judicial control of administrative acts and the competences of the Administrative court, was adopted in December 2009. The Administrative court, as a court of special jurisdiction, became operational as of 1 January 2010. The adoption of a new Law on Administrative Procedures, aimed at introducing simplified procedures in order to reduce the caseload, is still pending. The Law on Administrative Disputes allows only individual administrative acts to be challenged before the administrative court, which is not in line with European standards on the judicial review of administrative acts.

In recent years, Serbia created all of the necessary independent regulatory bodies (IRBs). Rules governing relations between parliament and IRBs were clarified in February 2011 to better acknowledge the role and independence of IRBs. It provides for a parliamentary review of the regular annual reports of the Ombudsman, the Commissioner for Free Access to Public Information and for Data Protection, the State Audit Institution, the Anti-corruption Agency and the Equality Protection Commissioner. Such reviews were held in July 2011 on the bodies' 2010 reports and provided valuable information for parliament to exercise its oversight powers over the executive. IRBs have slowly but surely been given additional resources to exercise their mandate. They have overall a clear basis for their funding and a satisfactory degree of autonomy for planning and implementing the budget. Despite recent improvements, Parliament has given only limited attention to legislative proposals tabled by IRBs, including in cases when they are making use of a statutory right of initiative. There is room for improving the transparency and timeliness of appointments of heads of IRBs, members of boards or executive directors. Several IRBs continue to be faced with logistical constraints, such as limited available space in current premises which slows down recruitment, and rigidities in the application of the law on civil service which does not allow remuneration that is commensurate with the expertise and qualifications required. Auditing of expenditure of IRBs needs to be ensured.

The first State Ombudsman was appointed by parliament in 2007 for a period of five years. There is also a specific ombudsman for Vojvodina and several others at municipal level with whom the State Ombudsman has established cooperation. A local field office was opened in Southern Serbia in June 2010. The public have demonstrated increasing interest and confidence in the Ombudsman. Ombudsman offices at both state and provincial level were very active and led to a greater awareness among the general public, which resulted in an increase in the number of complaints. The number of complaints has significantly increased each year. So far, the State Ombudsman has received almost 6,000 complaints from citizens, two third of which were resolved. The majority of complaints relate to social and economic rights and to the lack of responsiveness on the part of the administration. Since 2007, the State Ombudsman issued some 270 individual and 50 general recommendations, of which nearly 80% were satisfactorily followed up. He also proposed legislative changes, issued general recommendations, visited various institutions and was active in promoting the protection of human rights and minority rights.

The Commissioner for Free Access to Information of Public Interest was established in 2004. The Commissioner was appointed by parliament for a seven-year term. The 2008 Personal Data Protection Act extended its powers, and further amendments adopted in 2010 introduced a mechanism for enforcing its decisions. From the outset, the Commissioner has been very active and has enjoyed the confidence of the public. However, his recommendations are still not being followed up sufficiently.

The State Audit Institution (SAI) is the body in charge of auditing public funds in Serbia. It was established by the 2005 Law on the State Audit Institution and has been a member of the International Organisation of Supreme Audit Institutions (INTOSAI) since November 2008. The SAI performed its first audit in 2008, which was the first time the state budget had been audited since 2001. Since then, the SAI has steadily improved its performance; its cooperation with other independent regulatory bodies and the status of the auditors have improved, although its recruitment plan needs to be completed in order for the SAI to perform its tasks fully.

Overall, administrative capacity is in general well developed at central level and a strategy for public administration reform is in place under the auspices of a Council reporting to the Prime Minister. There is a need for further alignment of legislation and more effective implementation of the existing legal framework and strategy. Progress remains slow and is affected by a lack of coordination among stakeholders and insufficient managerial capacities. The establishment of a merit-based recruitment and career system is not yet complete and appointments remain vulnerable to politicisation. Public administration is weak at the local level. Independent regulatory bodies have been established in all important areas. The follow-up of their findings and decisions should be strengthened.

1.1.4. Judicial system (See also Chapter 23 – Judiciary and fundamental rights)

The Serbian judiciary is organised in a three-tier court system, which broadly respects the key requirements of independence, impartiality, accountability and efficiency. In 2010, the judicial budget amounted to 182 M € (0.61 % of the GDP). There are 34 Basic Courts, 26 Higher Courts, 4 Appellate Courts and the Supreme Court of Cassation. Courts of special jurisdiction are the 16 Commercial Courts and the Appellate Commercial Court, as well as 45 Misdemeanour Courts and the Higher Misdemeanour Court. An administrative court was established recently. The organisation of the public prosecution is hierarchical and reflects the structure of the general court system. The Republic Prosecutor's Office is the highest public prosecutor's office. Public prosecutor's offices of special jurisdiction have been established for war crimes and for organised crime and corruption.

The Constitutional Court was established in 2008, following the adoption of the 2006 Constitution. It has 15 judges with a renewable nine-year term of office; five of them are appointed by parliament, five by the President of the Republic and five by the general session of the Supreme Court of Cassation. The latter five judges were appointed as recently as April 2010. The Court rules on the constitutionality of legislation and on constitutional appeals for violation of human rights by individual acts or actions of state authorities. The Court faces a large backlog of cases. On 15 September 2011, the Court had 8,549 pending cases compared to some 7,000 in September 2010. Given the limited efficiency of the Court, urgent measures are needed to handle the increasing inflow of cases.

The independence of the judiciary is guaranteed by the Constitution and is generally ensured. Serbia launched an ambitious reform of the judiciary based on a national strategy adopted in 2006 and a package of judicial laws in 2008. The High Judicial Council and the State Prosecutorial Council were established as the key bodies for stronger self-administration of the judiciary and were set up in their transitional composition in June 2009 and in their permanent composition in April 2011. The High Judicial Council and the State Prosecutorial Council consist of eleven members, of whom three are ex officio members: respectively the President of the Supreme Court of Cassation or the Republic Public Prosecutor, the Minister of Justice and the President of the Parliamentary Committee for Judicial Affairs. The other eight members are appointed for five years by parliament: six of them are proposed after a secret ballot respectively among judges and public prosecutors; two are prominent lawyers – one representative of the bar and one professor of law selected by the relevant parliamentary committee. The Councils are responsible for defining the total number of positions and for the selection, appointment, promotion, dismissal and disciplinary measures concerning judges and deputy prosecutors respectively. They are also responsible for the administration of the budget for courts and prosecution offices. However, in the absence of sufficient capacities, the handing over of the management of the budget from the Ministry of Justice has been postponed.

Amendments of 2011 to the Law on Judicial Academy strengthened the merit based approach to recruitments, making the completion of a vocational training programme a general precondition for the appointment of basic court and misdemeanour judges, as well as for deputy basic prosecutors. The Judicial Academy is competent for the vocational training and continued professional development of judges, prosecutors and judicial staff. A first vocational training course started in September 2010. A proper merit-based career system for judges and prosecutors needs to be fully developed. It is still possible to enter the judicial profession, in particular at higher levels, on the basis of unclear criteria without having passed the Judicial Academy. Regular performance evaluations are only starting to be introduced. The Judicial Academy operates on scarce resources and has not yet finalised its curricula.

The constitutional and legislative framework still leaves some room for undue political influence on the judiciary. Parliament appoints and dismisses the President of the Supreme Court, who is also ex officio president of the High Judicial Council, and the Republic Public Prosecutor for a renewable six-year term of office, upon a proposal from the government and the opinion of the relevant parliamentary committee. Parliament also appoints court presidents and public prosecutors for a renewable six-year term on the basis of non-binding proposals by the respective Councils, as well as first time judges and deputy prosecutors for a probation period of three years. The prosecution service is vulnerable to political influence due to its hierarchical organisation and the ongoing practice of issuing oral instructions, despite the legal obligation for written instructions.

A re-appointment procedure for all judges and prosecutors, aimed at raising professional and integrity standards and removing unsuitable persons from the system, was carried out during the second half of 2009 and took effect as of January 2010. As part of this systematic exercise, the number of judges was reduced from 2,686 in 2009 to 1,972, out of which 1,802 posts were initially filled. Previous misdemeanour judges were integrated into the normal court system, which led to an overall number of 2,587 judges' posts. A total of 871 new judges entered the system, 292 of whom were first time judges with a three-year mandate and 579 were previous misdemeanour judges. In July 2011, 2.405 judges' positions were filled. The number of clerical staff in courts was reduced to some 12,900 positions. The number of prosecutors was reduced from 129 to 67 and the number of deputy prosecutors from 670 to 586. The prosecution service has some 1,400 clerical staff. Significant shortcomings affected the re-appointment procedure, which was carried out in a very short period of time. Both the High Judicial Council and the State Prosecutorial Council acted in their transitory forms and not all members had been appointed, which did not ensure adequate self-representation of the profession. Judges and prosecutors, as well as first time candidates, were not heard during the procedure. Criteria were applied in a non-transparent manner and reasoned decisions were not issued in a timely manner. Problems arose with the calculation of the number of necessary posts, which were reduced in the first stage and increased again at later stages. The right for non re-appointed judges and prosecutors to appeal was limited to taking their case to the Constitutional Court. Some 1,500 appeals were filed, but the Court lacked the capacity to deal with the large number of cases within a reasonable time.

Given the initial shortcomings, the Serbian authorities launched a review of the procedure at the end of 2010. Legislative amendments were adopted in December 2010, transferring the cases back from the Constitutional Court to the High Judicial Council and the State Prosecutorial Council. Respective guidelines for the review procedure for non re-appointed judges and prosecutors were adopted in May 2011 by the High Judicial Council and the State Prosecutorial Council in their permanent form. Broad consultation of all stakeholders was conducted on the guidelines. These guidelines include clear and transparent criteria and provided a sound basis for the review procedure which was launched at the end of June. In the 837 cases concerning non re-appointed judges, 375 hearings had been conducted and 155 cases decided by mid September. As regards the 157 cases of prosecutors, 127 decisions had been made. While written justifications yet have to be issued for most cases, the review on judges has been so far conducted in a satisfactory manner. Despite some procedural shortcomings, the majority of decisions were generally taken in line with the guidelines. As regards prosecutors, certain procedural shortcomings occurred and remaining doubts on the observance of the guidelines will have to be dispelled by the written decisions. The review for newly elected judges and prosecutors and for those re-appointed despite ongoing disciplinary procedures is under preparation. The review process of re-appointment of judges and prosecutors still needs to be brought to a satisfactory conclusion.

The impartiality of judges is broadly ensured. Legal provisions on conflict of interest are in place. Cases are generally allocated on a random basis, which is more difficult in small courts or court units with only a few judges.

The regulatory and institutional framework ensuring the accountability of the judiciary is generally in place. A code of ethics for judges was adopted in 2010. Internal inspections on technical and administrative matters are carried out by the Ministry of Justice, based on reports from the court president and on the spot visits. Presidents of higher courts are also entitled to inspect lower courts. The Republic Public Prosecutor is accountable for the work of the prosecution service to parliament, which also decides on his re-election for another (six-year) term and on termination of office. A track record of effective inspections still needs to be established.

There is a twin-track procedure for ordinary disciplinary offences (leading to disciplinary sanctions) and serious disciplinary offences (which can result in dismissal). The competent bodies are the Disciplinary Prosecutors and Disciplinary Commissions, established by the respective Councils. Procedures for ordinary offences are launched by the Disciplinary Prosecutors, decided by the Disciplinary Commissions and can be appealed against before the Councils. Dismissal procedures are conducted by the respective Councils, which also decide in the case of judges and deputy prosecutors. For court presidents and public prosecutors, the final decision is taken by the parliament upon recommendation of the respective Council. The High Judicial Council set up the disciplinary authorities in December 2010. Until 15 September, 104 complaints were examined and one disciplinary case was opened, but has not yet been finalised. The State Prosecutorial Council has not yet set up the relevant disciplinary bodies. The double-track procedure for disciplinary offences should be streamlined in order to avoid possible gaps between the proceedings. Disciplinary authorities for the prosecution service need to be set up and a track record of effective disciplinary procedures developed.

Judges and prosecutors, as well as the elected members of the two Councils, enjoy functional immunity. Procedures for lifting immunity are in the hands of parliament, and prior approval of the High Judicial Council is needed for judges. In practice there were only five cases, two concerning judges and three concerning prosecutors, in which the immunity has been lifted since the entry in force of the new Constitution in 2006. This low number raises concerns over too high protection for judges and prosecutors from criminal investigations.

Another key step in the judicial reform process was the overhaul of the court network in order to rationalise the system and increase its efficiency. The previous 138 municipal courts were replaced by 34 basic courts as of January 2010. District courts were abolished and their competences divided between Higher Courts and Appellate Courts. Competences of the previous Supreme Court were divided between the Appellate Courts and the Supreme Court of Cassation. The reduction of the number of courts had positive effects towards a more equal distribution of work between the courts. New laws on enforcement of judgements – introducing private bailiffs – and on public notaries were adopted in May 2011. Additional measures included the launch of a programme to reduce the number of old cases in five pilot courts, as well as improvements to the infrastructure and equipment. The newly-established Administrative Court with 33 judges took over the entire backlog from the previous administrative section of the Supreme Court and succeeded in processing a large number of cases, despite the continuously high inflow of new cases.

New Civil and Criminal Procedure Codes have been adopted in September 2011. The Civil Procedure Code aims at streamlining civil procedures and is generally a good basis to increase the efficiency of the Serbian judiciary. The Criminal Procedure Code profoundly changes criminal proceedings by giving the lead of investigations to the prosecution service and introducing an adversarial system. In a first stage, it will only be applied to proceedings carried out by the special prosecutors for organised crime and for war crimes, before extending it to the whole system. There are concerns over insufficient procedural safeguards in the new Code.

Serbia continues to face a large backlog of old cases. On 30 June 2011, some 1.9 million pending cases were older than 9 months. Many of these relate to the enforcement of both civil and criminal decisions, with an average duration of over 600 days for civil cases. The present system of enforcement of civil cases relies on an insufficient number of court agents. Serbia needs to pursue the establishment of public notaries and private bailiffs, foreseen under the new laws, without further delays. The impact of the rationalisation of the court network has not yet reached its full potential. There continue to be significant differences in the workload between courts, with a particularly high influx of cases in the Belgrade courts. Basic courts maintained court units dealing with civil cases in the locations of the previous municipal courts. Continued operation of court units still creates maintenance costs for the buildings and travelling expenses of judicial staff and can entail some risks to the security of the proceedings, in particular in view of the need to transport files and to secure the court unit buildings. The IT based case management system is not fully operational for the entire court network.

Overall, substantial reforms of the judiciary have been pursued in Serbia since the adoption of the national strategy in 2006, and were intensified in 2009 and 2010. Independence and self-administration were strengthened with the establishment of the new High Judicial and State Prosecutorial Councils. The restructuring of the court network, including the creation of an administrative court, and a new law on enforcement of court decisions were appropriate steps for increasing the efficiency of the judiciary. The initial significant shortcomings identified in the re-appointment procedure are in the course of being addressed through a review process, for which there are clear guidelines. The review process remains to be satisfactorily completed in a transparent manner, in line with these guidelines. At the same time, the Serbian judiciary still faces a number of challenges. Constitutional and legal provisions on appointments, promotion and dismissals in the judiciary will need in due course to be brought into line with European standards. Further efforts are needed in order to increase public confidence in the judiciary, improve the effectiveness of disciplinary proceedings, reinforce the execution of judgements and further reduce the large backlog of pending cases.

1.1.5. Anti-corruption policy (See also Chapter 23 – Judiciary and fundamental rights)

Serbia has established the relevant institutional and legal framework to combat corruption. Its main components are the 2008 Law on the Anti-Corruption Agency, the 2009 Law on the Organisation and Competence of the State Authorities in Suppressing Organised Crime, Corruption and other especially serious criminal offences, the 2008 Law on Seizure and Confiscation of the Proceeds from Crime, amendments of 2007 to the Criminal Procedure Code regarding special investigative measures, the Law of 2005 on Civil Servants, and the amendments of 2009 to the Law on Free Access to Information of Public Importance. However, implementation of legislation and practical results are still lagging behind.

The government adopted a National Anti-Corruption Strategy and a respective Action Plan in 2005. The Strategy and Action plan have been implemented slowly and need to be updated. The current Strategy does not cover the education and health sectors, which are areas prone to corruption. The Action Plan does not precisely define activities and does not set clear indicators. The Strategy and the Action Plan are in the process of being revised. The Minister of Justice was appointed anti-corruption coordinator in May 2011 to improve the so far inadequate cooperation between the stakeholders involved in the fight against corruption.

The Anti-Corruption Agency became operational as the central anti-corruption body in 2010. It is managed by a Director, who is appointed by an Anti-Corruption Board whose members are appointed by parliament. The Agency reports annually to parliament. The powers of the Agency are focused on the prevention of corruption. They include supervision of the implementation of the National Anti-Corruption Strategy and Action Plan, conflicts of interest, declarations of assets and gifts, financing of political parties, revision of draft legislation to identify and eliminate corruption risks, integrity plans, and education on corruption. The Agency took over the responsibilities of the Republic Board for the Resolution of Conflicts of Interest, which was phased out from that point. The Agency has no mechanism to ensure the enforcement of its decisions. Currently, the Agency lacks capacity with only 60 employees, when its organisation chart has provision for 96 posts. The Agency was allocated adequate premises in September 2011, which will enable it to complete its recruitment plan.

The Agency has been very active in some of its areas of responsibility, particularly in the verification of asset declarations. By the end of 2010, over 18,000 asset declarations had been received from the 25,000 public officials who are required to fulfil that obligation. The Agency processed 3,500 of these. Between October 2010 and September 2011, the Agency initiated misdemeanor procedures in 8 cases and criminal procedures in 2 cases; 2 cases were transferred to the prosecution service. In the area of conflict of interest, the Agency issued some 800 decisions and received over 4,000 requests from officials asking to retain their dual functions. However, the capacity and powers to investigate fraudulent declarations and discrepancies between income and assets are lacking. Not all relevant data have been entered into the Assets Registry on the Agency's website, thus preventing the public from gaining full insight into the property disclosure reports of public officials.

A new Law on the Financing of Political Activities was adopted in June 2011. It covers both the regular financing of political parties and the funding of electoral campaigns. The law enhanced the transparency of funding sources and the allocation of state funding. It considerably strengthened the investigative powers of the Anti-Corruption Agency. The Anti-Corruption Agency had previously carried out controls on the electoral campaigns of five parties or coalitions and submitted six misdemeanour complaints due to the failure to report funds collected and spent in election campaigns. In March 2010, the Agency issued rules on the content of the records and financial reports of political parties. It still has to establish a track record of effective control of party funding.

The Anti-Corruption Council, an advisory body to the government, was established in 2001 with the task of proposing legislative changes and other measures aimed at combating corruption and assessing on-going anti-corruption activities. The Council continued to raise public awareness of high-profile cases of corruption, mostly in the media and in public events. It filed two criminal charges against high profile politicians and well-known businessmen. It has also identified a number of, mainly large, privatisation transactions in which there were suggestions of corruption, but only a few were investigated and even fewer were prosecuted. The State Audit Institution performed the second partial audit of state finances in 2010, which widened the scope of the audited entities, and also included some public enterprises. Internal control systems need to be strengthened and the capacities of the State Audit Institution significantly increased.

The law enforcement bodies and the judiciary have enhanced their specialisation on corruption cases. The competences of the prosecutor for organised crime were extended to higher level corruption cases in January 2010. In 2011, its office significantly increased its activities; until mid September, it launched investigations in some 330 corruption cases. These include several medium to high level cases. The police have the means and the ability to carry out basic investigations. Its capacities for proactive investigation of such cases have yet to be developed. An internal control sector has been established in the police with some initial results and an increasing number of cases of corruption being detected within the police. The Head of the Directorate for internal control and the Head of the Sector for internal control were appointed in June 2011. The customs authority has been increasingly active in combating corruption amongst customs officials and has taken a number of disciplinary measures against wrongdoers. Preventive measures against corruption need to be strengthened in the judiciary. Further efforts are needed overall in order to establish a track record of pro-active prosecutions and final convictions, in particular in high-level cases resulting in significant harm to state funds. The capacities of law enforcement bodies to conduct financial investigations need to be strengthened.

Corruption continuous to affect many areas, particularly public procurement, privatisation procedures and public expenditure, as well as the health and education sectors. While the 2008 Public Procurement Law contains specific anti-corruption rules, the coordination between all stakeholders needs to be strengthened in order to ensure effective prevention and processing of corruption cases in the area of public procurement. Stronger political will and further efforts are needed in order to process corruption cases more effectively, from investigations to final convictions, in particular in relation to the spending of public money.

Integrity plans are envisaged for a number of State institutions, public bodies and State-owned companies on the basis of guidelines issued in 2010 by the Anti-Corruption Agency. In spite of the legal obligation and in the absence of a legal deadline, the majority of bodies failed to appoint a person in charge of the preparation and implementation of the integrity plans.

Amendments in 2010 to the Law on the Anti-Corruption Agency and the Law on Free Access to Information of Public Importance have strengthened the legal basis for the protection of whistleblowers. A rulebook on whistleblowers, produced by the Anti-Corruption Agency, entered into force in August 2011. However, whistleblower protection is only applicable in cases where no classified information has been disclosed. Practical implementation remains weak.

Overall, Serbia has put in place the legal and institutional framework to combat corruption, including an Anti-Corruption Agency and a new law on funding of political parties in line with European standards. The Minister of Justice was appointed anti-corruption coordinator. The authorities have launched a review of the outdated strategy and action plan for the fight against corruption. Steps have been taken towards specialisation of the law enforcement agencies and a greater number of cases have been prosecuted. Corruption remains prevalent in many areas and continues to be a serious problem. Stronger political will is needed in order to significantly improve the performance in combating corruption. The competences and capacities of the Anti-Corruption Agency need to be strengthened. Law enforcement authorities need to adopt a more pro-active approach in investigating and prosecuting corruption and the judiciary needs to gradually and significantly build up a track record of final convictions, including in high level cases.

1.1.6. Civilian oversight of security forces

Civilian control of the security forces is regulated by an extensive legal framework. According to the Constitution, the armed forces are under democratic and civilian control and parliament must authorise their use outside Serbian borders. As part of the constitutional adjustments, a Law on the Army of Serbia, a Defence Law and a Law on Basic Principles of Establishment of Security Services were adopted in December 2007. The Defence Strategy, the National Security Strategy and the Law on the Military Security Agency and the Military Intelligence Agency were adopted in October 2009. The legislative framework also includes the Law on the Military, Labour and Material Obligations, the Law on Civilian Service, the Law on the Use of the Army and other Defence Forces in Multinational Operations outside Serbia and the Decision abolishing compulsory military service.

Security forces are divided into three main categories: the armed forces, the police forces and the security services. Security services are civilian, the Security-Information Agency (BIA), and military, the Military Security Agency (VBA) and Military Intelligence Agency (VOA). The Defence Inspectorate is the administrative body in the Ministry of Defence which inter alia inspects the implementation of public procurement rules and deals with citizens' complaints. The armed forces assist civilian authorities in countering security threats, including terrorism, organised crime, natural and man-made disasters.

The police, including the gendarmerie, is in charge of internal security and the prevention and suppression of all forms of crime. It is organised through the general police directorate at central level, the City of Belgrade police directorate, regional police directorates and police stations at municipal level. The reform of the police is based on the 2005 Law on Police and the development strategy for the Ministry of Interior for the period 2011-2016. It includes a border police that is responsible for the protection and control of the state border. The accountability of the police is enforced through the work of the sector for internal control, which has established close working relations with the State Ombudsman.

The Security-Information Agency is a separate state agency in charge of the protection of Serbia's internal security and constitutional order. It is accountable to the government and parliament and provides regular reports at least twice a year. The government appoints and dismisses its Director. In 2010, the State Ombudsman reviewed the legality of the Agency's activities and their implications in the area of human rights and protection of minorities. Its overall assessment was that the Agency abided by the legal order, but that further legislative and procedural improvements were needed in order to better regulate the agency's procedures related to the protection of the guaranteed human rights. The Military Security Agency and the Military Intelligence Agency are accountable to the government and parliament. An Inspector General, in charge of their oversight, was appointed by the government in February 2011 for a five-year term.

Parliament has the key role in the oversight of the security forces. The Defence and Security Committee currently performs this function, reviews proposed legislation and conducts inspection visits to the three security agencies. Under the new Rules of Procedure, the oversight will be performed by two standing bodies as from the next legislature: the Committee for Defence and Internal Affairs and the Committee for the Oversight of Security Services. A Council for National Security, chaired by the President of the Republic, reviews issues relevant to national security, and steers and coordinates the work of the security services.

Parliamentary oversight remains weak, as the Committee does not have the resources, expertise and specialised staff to deal with the wide range of jurisdiction which currently covers defence, internal affairs and security issues. Its work is mainly reactive and limited to routine periodic hearings as required by law. A law regulating access to state security files has not yet been adopted. The internal control department in the Ministry of Interior needs to be reinforced and coordination with the department in charge of prevention of corruption enhanced. Unlike most EU intelligence agencies, the Serbian security agencies have investigative powers. This raises serious concerns, as they are in the position of controlling intelligence material used in criminal investigations.

Overall, an extensive constitutional and legal framework for the democratic civilian oversight of security forces is in place. Further efforts are needed in order to strengthen parliamentary capacity and expertise. The ability of security agencies to carry out special investigative measures in criminal investigations gives rise to serious concerns.

1.2. Human rights and the protection of minorities (See also Chapter 23 – Judiciary and fundamental rights)

Observance of international human rights law

The legislative framework on human rights and the protection of minorities is in place and generally in line with EU standards. The Constitution guarantees a wide range of human rights and fundamental freedoms. It also provides for the possibility of filing a Constitutional appeal as a final remedy for the protection of human rights. A number of laws relating to the promotion, implementation and protection of human rights and the prevention of discrimination have also been introduced. Serbia has signed and ratified all significant international human rights instruments that are relevant for the protection of human rights.

Following the dissolution of the State Union with Montenegro in 2006, Serbia became the successor state in the Council of Europe and took over its obligations and commitments, including under the European Convention for the Protection of Human Rights and Fundamental Freedoms. On 1 September 2011, 5,704 allocated applications regarding Serbia were pending before the European Court for Human Rights (ECtHR). Between October 2010 and September 2011, there were five judgments finding violations of the Convention. The largest numbers relate to the violation of the right to a fair trial and to the length of proceedings, including non-enforcement of judicial decisions.

Several State bodies and institutions are responsible for the promotion and enforcement of human rights. The Ministry for Human and Minority rights was merged with the Ministry for Public Administration and Local Self-Government in March 2011. The Ministry is tasked with the preparation and coordination of the periodic reports on the implementation of the main international instruments. Investigations into threats and violence against human rights defenders have been slow. Although a number of investigations relating to high profile cases were initiated by the police or prosecution, only a few resulted in a final conviction and an appropriate sentence. Public officials often refrained from publicly condemning such attacks.

Besides the Ministry, the institutional framework providing for the promotion, monitoring and protection of human rights includes other bodies: the various Ombudsman offices – at state and local level – the Commissioner for the Protection of Equality and parliament's Committee on Human and Minority Rights and Gender Equality. Training programmes on human rights standards have been organised for judges, prosecutors, legal practitioners, police and prison officers and other relevant professionals. The direct enforcement of ratified international treaties has still to be improved. Access to information is supervised by the Commissioner for Free Access to Information of Public Importance and Personal Data Protection.

Civil and political rights

The Constitution prohibits the death penalty. Serbia has ratified Protocol No 13 to the European Convention for the Protection of Human Rights and Fundamental Freedoms, concerning the abolition of the death penalty in all circumstances.

The Constitution prohibits torture and ill-treatment. In July, the Parliament adopted legislative amendments establishing a national prevention mechanism for the implementation of the Optional Protocol of the Convention Against Torture and Other Cruel, Inhuman or degrading Treatment or Punishment and designating the State Ombudsman to perform these prerogatives. The national prevention mechanism is not yet operational. Poor conditions in police custody facilities are a matter of concern. Regular independent inspections should be carried out to ensure prevention of potential ill-treatment.

Efforts have been made to improve conditions in the prison system, but significant challenges remain due to the increasing overcrowding. A strategy on overcrowding was adopted in July 2010. The decision to establish the Parliamentary Commission in charge of oversight of prisons was adopted in May 2011 and its members were appointed in September 2011. Efforts have been undertaken to build new prisons, improve outdated prison infrastructure and train prison staff, as well as to amend treatment rules, respecting the rights of prisoners and improving medical care. Enforcement of alternative sanctions started in 2008 and house arrest under electronic surveillance was introduced in 2010 as a new procedure for serving prison sentences for minor offences. However, overcrowding of prisons continued to increase. The actual prison population amounted to 11,500 persons in 2010, while prison capacities are between 4,500 and 6,000 places. Alternative penalties are only used in a few cases, while short term imprisonment sentences of up to six months are still frequent. The large number of pre-trial detainees, which stands at 3,500, is due to the broad application of such pre-trial detention and to lengthy court proceedings. The majority of prisons in Serbia are outdated and lack adequate facilities. Poor and deteriorating living conditions, unsatisfactory healthcare and lack of adequate treatment programmes in prisons are causes of serious concern. The prison service is facing problems of ensuring security due to insufficient numbers of frontline prison staff. An internal control mechanism for prisons has yet to be established. Programmes for education and rehabilitation are only available for a few prisoners.

The Constitution guarantees access to justice. However, the length of court proceedings and the backlog of cases remain issues of concern. Legislation and funding for an effective system of free legal aid need to be developed.

Freedom of expression is guaranteed by the Constitution and broadly ensured. The media landscape is diverse and pluralistic. Independent investigative journalism exists. The Law on Public Information, amended in 2009, defines the rights of freedom of expression, the right to access public information and to distribute information through media and broadcasting agencies. The law prohibits incitement to violence or racial, ethnic or religious hatred. The Law on Broadcasting, adopted in 2009, lays down broadcasting standards and prohibits unauthorised media concentration. A code of ethics for journalists was adopted in 2006 and the establishment of a Press Council as self-regulatory body for print media was agreed in 2009 between the representatives of journalists and media associations. Prison sentences for libel cases were abolished in 2005.

Violence and threats against journalists remain a matter for concern. The Serbian authorities provided police protection to journalists and media outlets which received threats, but reactions by the government, including public condemnation, remained weak. Investigations into the murders of journalists dating back to the late 1990s/early 2000s and into recurring threats against journalists have been unable to identify the perpetrators. A more comprehensive and proactive approach by the police and the judiciary are essential. Application of existing legislation in court judgments is not always consistent as regards the scope of journalistic freedom and the level of sanctions; civil and criminal libel cases are sometimes used to exert undue pressure on journalists. Gaps prevail in the supervision carried out by the Republican Broadcasting Agency, in particular as regards the monitoring of discriminatory or hate speech. The procedure by which its members are appointed raises concerns about the independence of this body and creates a risk of politicisation. Advertising access to media is under the influence of a few key players, which creates a significant risk of political and economic influence on the media and of increasing self-censorship. The lack of transparency in media ownership hampers effective monitoring and creates a risk of hidden media concentration. A long awaited Strategy for the Development of the Media Sector (media strategy) was adopted in September 2011. It aims at increasing editorial independence and better protecting media outlets from undue influence. It also lays down the foundations for forthcoming legislative changes which should clarify the market environment in which media outlets are operating.

Freedom of assembly and association are guaranteed by the Constitution. Assemblies are covered by the 1992 Law on Public Assembly. Public gatherings in the open are subject to registration, but do not require authorisation, while gatherings indoors do not even need to be registered. Police may only prohibit public gatherings for the purposes of protecting public health, morality, security or the rights of others. Provisional prohibition, pending a final court decision, is possible in cases involving threats to the constitutional order or violation of human rights. Legislation banning gatherings of far right organisations and prohibiting the use of national-socialist and fascist symbols was adopted in 2009. There have been improvements in cooperation and action by the Serbian police to provide protection during public gatherings. A first Belgrade Pride Parade took place in October 2010, representing a step forward in the promotion of constitutionally guaranteed fundamental rights. The police took appropriate action, including making a number of arrests, in response to violent incidents by rioters protesting against the Parade. A second parade which was scheduled to take place on 2 October 2011 had to be called off for security reasons. Rules regulating the prevention of sports related violence have been tightened up and the reaction by law enforcement agencies to sports incidents has improved. The trial in connection with the murder of a French football fan in September 2009 was concluded in first instance in 2011 and the perpetrators were given long prison sentences. The Law on Public Assembly needs to be updated in order to reduce the requirements for the registration of assemblies, to lessen restrictions imposed regarding locations of assemblies and to limit the liabilities of organisers.

Freedom of association is respected on the whole. The Constitution prohibits secret and paramilitary associations. A decision banning an association may be made by the Constitutional Court on grounds prescribed by the Constitution. The 2009 Law on Associations introduced rules regulating foreign associations. Army and police officers, judges, prosecutors and the State Ombudsman are prohibited from being members of a political organisation. Members of the police are allowed to establish trade unions and professional associations. Activities of extreme right-wing organisations and of violent groups of so-called sports fans are a major cause of concern. One such organisation was banned in June 2011 following a Constitutional Court ruling.

Civil society organisations are well developed and play an important role in the social, economic and political life of Serbia. Some 8,500 associations have so far completed the registration procedure. NGOs are exempted from the 2.5% of taxes on gifts and donations provided they are performing activities of public interest. An Office for cooperation with civil society, aimed at improving cooperation between public administration and civil society organisations was established in April 2010. The first Director of the Office was appointed in January 2011. However, the Office is still not fully operational. Cooperation between state bodies and civil society organisations remains on an ad hoc basis and is unevenly developed across Serbia, with civil society activities still predominantly Belgrade-centred. Awareness-raising on human rights is needed most at local level. NGO activists dealing with sensitive issues, in particular war crimes and the fight against organised crime, as well as human rights defenders, continue to be subjected to threats, verbal abuse and even physical attacks.

Freedom of thought, conscience and religion is guaranteed by the Constitution and laws, and is respected in practice. The number of religiously motivated incidents has decreased over the past years. The Constitution prescribes separation between the state and the church and prohibits a state religion. Conscientious objection is guaranteed and the relevant law was adopted in October 2009. The Constitution prescribes equality of churches and their freedom to organise themselves independently. A decision on a possible ban of a religious organisation may be made by the Constitutional Court, on strictly defined grounds. The key systemic act in this area is the 2006 Law on Churches and Religious Communities. However, the law differentiates between the seven 'traditional' churches, automatically assigned legal status and registration by the law, and other religious organisations, which have to apply for registration in the procedure regulated by a Ministerial act. The lack of transparency and consistency in the registration process is one of the main obstacles preventing some smaller religious groups from exercising their rights. The constitutionality of the law is currently being assessed by the Constitutional Court. Sporadic graffiti and vandalism on places of worship or graveyards persist. The response to such acts by police and prosecutors has been insufficient, and such cases continue to be referred to as minor offences. Extremist organisations and right-wing groups continued to propagate anti-Semitic comments and publications and hate speech against smaller churches. The Republic Broadcasting Authority intervened in early 2011, for the first time, in a case of anti-Semitic language on television and instructed TV stations to cease live broadcasting of certain programmes.

Overall, the legal and institutional framework for the protection of civil and political rights is in place, is broadly in line with European standards and is generally respected. The Ombudsman and the Commissioner for access to information and data protection are playing an increasingly effective role in oversight of the administration. Implementation and full enforcement of the guaranteed rights need to be further developed. Particular efforts are needed in order to display public support to journalists and the media in view of threats and violence. A newly adopted media strategy aims to address important shortcomings in the media sector. Conditions in prisons are a matter of serious concern.

Economic and social rights (see also Chapter 19 – Social policy and employment)

As regards women's rights and gender equality, gender equality is guaranteed by the Constitution. Serbia is party to the UN Convention on the Political Rights of Women and the Convention Concerning Equal Remuneration of Men and Women for Work of Equal Value. The National Strategy for Imp