EUROPEAN COMMISSION Brussels, 12.10.2022 SWD(2022) 337 final COMMISSION STAFF WORKING DOCUMENT North Macedonia 2022 Report Accompanying the document Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions 2022 Communication on EU Enlargement policy











































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1. Introduction 1.1. Context 1.2. Summary of the report 2.Cluster 1: The Fundamentals of the Accession Process 2.1.Functioning of democratic institutions and Public Administration Reform 2.1.1.Democracy 2.1.2Public administration reform 2.2.Rule of law and fundamental rights 2.2.1Chapter 23: Judiciary and fundamental rights 2.2.2Chapter 24: Justice, freedom and security 2.3. Economic criteria 2.3.1. The existence of a functioning market economy 2.3.2. The capacity to cope with competitive pressure and market forces within the Union 2.4. Public Procurement, Statistics; Financial control Chapter 5: Public procurement Chapter 18: Statistics Chapter 32: Financial control

3.Good neighbourly relations and regional cooperation 4.Ability to assume the obligations of membership Cluster 2: Internal Market Chapter 1: Free movement of goods Chapter 2: Freedom of movement for workers Chapter 3: Right of establishment and freedom to provide services Chapter 4: Free movement of capital Chapter 6: Company law Chapter 7: Intellectual property law Chapter 8: Competition policy Chapter 9: Financial services Chapter 28: Consumer and health protection Cluster 3: Competitiveness and inclusive growth Chapter 10: Digital transformation and media Chapter 16: Taxation Chapter 17: Economic and monetary policy Chapter 19: Social policy and employment Chapter 20: Enterprise and industrial policy Chapter 25: Science and research Chapter 26: Education and culture

Chapter 29: Customs union Cluster 4: The Green agenda and sustainable connectivity Chapter 14: Transport policy Chapter 15: Energy Chapter 21: Trans-European networks Chapter 27: Environment and climate change Cluster 5: Resources, agriculture and cohesion Chapter 11: Agriculture and rural development Chapter 12: Food safety, veterinary and phytosanitary policy Chapter 13: Fisheries Chapter 22: Regional policy and coordination of structural instruments Chapter 33: Financial and budgetary provisions Cluster 6: External Relations Chapter 30: External relations Chapter 31: Foreign, security and defence policy



1. Introduction 1.1. Context Implementation of the Stabilisation and Association Agreement (SAA) between North Macedonia and the European Union, which entered into force in April 2004, continued. Since 2009, the Commission has continuously recommended that the Council open accession negotiations with North Macedonia, a candidate country since 2005. In March 2020, the European Council endorsed the Council’s decision to open accession negotiations with North Macedonia . On 19 July 2022, the first Intergovernmental Conference on accession negotiations took place with North Macedonia, following the approval of the Negotiating Framework by the Council. The Commission immediately launched the analytical review of the EU acquis (screening) process, which is the first step in the negotiating process.

The authorities have continued to demonstrate, including publicly, their commitment to advancing on their EU path. North Macedonia has also fully aligned with the EU positions on the war in Ukraine, demonstrating thereby once more that it is a reliable partner. The country’s existing challenges have been exacerbated by the impact of the COVID-19 pandemic and by new risks stemming from Russia’s aggression against Ukraine, including high energy, commodity and food prices, combined with supply-chain disruptions. North Macedonia has taken measures to mitigate the impact of the war. 1.2. Summary of the report The reporting period was characterised by intense efforts, which led to the start of the accession negotiation process. The holding of the first Intergovernmental Conference in July 2022 was a historic moment and marked a new phase in the EU accession process for North Macedonia. This was a clear recognition of the determination of North Macedonia to implement EU related reforms. On the political criteria, North Macedonia continued its efforts to strengthen democracy and the rule of law, despite some challenges. The country has shown its commitment to continuing to deliver results in key areas of the fundamentals. Local elections took place in October 2021. The Office for Democratic Institutions and Human Rights of the Organisation for Security and Cooperation in Europe (OSCE/ODIHR) assessed that they were competitive and fundamental freedoms were widely respected. However, limited progress was made over the reporting period in addressing the outstanding recommendations made by the OSCE/ODIHR and the Venice Commission. As mentioned in the previous reports, the electoral legislation should be comprehensively reviewed to address existing inconsistencies and the relevant laws need to be adopted in a timely, inclusive and transparent manner, well before the next elections. In this regard, the authorities need to step up their efforts and show political will to further improve the electoral process. The work of Parliament was marred by political polarisation, which delayed the adoption of many pieces of legislation. Following intense debates, Parliament adopted conclusions on the proposal which paved the way for the opening of accession negotiations. Parliament needs to play an active and positive role in the EU accession negotiation process. Joint and prompt efforts by all parties are needed as a matter of priority to strengthen Parliament’s role as a forum for constructive political dialogue, particularly on the EU reform agenda. Parliament and government committed to launch and achieve as a matter of priority the relevant constitutional changes, with a view to including in the Constitution citizens who live within the borders of the state. Proper planning and consultations are necessary to limit the use of fast-track procedures in order to allow for effective scrutiny of and consultation on legislation. Oversight of the executive through parliamentary questions to ministers should be conducted on a more regular basis. The proposals for internal reform of Parliament agreed during the third round of the ‘Jean Monnet Dialogue’ in early 2020 should be implemented without further delay. Criminal responsibility for those who orchestrated or committed violence in the attack on Parliament on 27 April 2017 continued to be established, including with second instance verdicts. The government continued to work on the EU reform agenda and on addressing the consequences of the COVID-19 pandemic and of the war in Ukraine. Decisive efforts are needed to build momentum for reforms and move forward on the EU accession negotiation process. Particular focus is needed on ensuring the effective implementation of existing legislation rather than launching ad hoc initiatives. Inter-ethnic relations remained stable and the Ohrid Framework Agreement continued to be implemented. Civil society organisations (CSOs) continue to operate in an enabling environment, including with the adoption of the strategy of cooperation with and development of civil society 2022-2024. Civil society continued to play an important role in decision-making processes and in monitoring the activities of the state. However, efforts are needed to improve transparency in policymaking and the inclusiveness of consultation processes. The legal and financial frameworks still need to be improved and implemented in practice. North Macedonia implemented a comprehensive reform of its intelligence services. However, the country needs to strengthen its capacity for parliamentary oversight over the intelligence services. North Macedonia remains moderately prepared in terms of its public administration reform. It made limited progress in implementing last year’s recommendations. It adopted the new 2022-2025 public financial management reform programme. However, the adoption of the legislation on organisation and operation of state administrative bodies and the new legal framework for human resources management (revision of the Law on Administrative Servants and the Law on Public Service Employees and a new Law on Top Management Service) have been delayed. The new framework aims to improve the management of human resources across the administration and provide greater assurance for merit-based recruitment, promotion and dismissal, including at senior management level. The new organic budget law was adopted in September 2022. The State Commission for Prevention of Corruption has been proactive in addressing cases of nepotism, cronyism and political influence in the process of recruiting public sector employees and in appointing members of supervisory and management boards. The judicial system of North Macedonia has achieved some level of preparation / is moderately prepared. Some progress was achieved in the field of the judiciary, through the steady implementation of the judicial reform strategy, thereby addressing the recommendations made by the Venice Commission and the Senior Experts’ Group on systemic rule of law issues. The preparation of a new judicial reform strategy has started, in an inclusive manner, building upon the lessons learnt from the previous one. Implementation of the updated action plan on the judicial reform strategy has continued but needs to become more systematic. The judiciary has demonstrated its commitment to protect its integrity and independence. The pace of implementation of the human resources strategies for the judiciary and prosecution services needs to be stepped up. Judicial institutions have implemented consistently the new rules for the appointment, promotion, discipline and dismissal of judges and prosecutors. Promotions in the higher courts faced a delay and scheduled retirements further decreased the number of judges and prosecutors. The Judicial Council and the Council of Public Prosecutors continued implementing the strategic plans. Any new draft law on the Academy for Judges and Prosecutors should maintain the Academy as the sole entry point to the judiciary and prosecution and should ensure that access to these professions is fair and transparent. Work was undertaken to upgrade the software system aiming at putting into practice the provisions of the Law on case flow management for automatic and random distribution of cases in the courts, through the automated court case management information system (ACCMIS). The country has achieved some level of preparation / is moderately prepared in the prevention and fight against corruption. Some progress has been made as the country continued to consolidate its performance on investigating, prosecuting and trying several corruption cases, including at a high level. The cases initiated by the former Special Prosecutor’s Office (SPO) continued to move forward, establishing accountability for the illegal wiretaps. A number of cases were subject to first-instance rulings. In line with previous years’ recommendations, the State Commission for the Prevention of Corruption (SCPC) has been proactive in providing policy guidance to public institutions on preventing corruption and it opened several cases, including cases against high-level officials. The conclusions of its regular reports should be addressed in full. Efforts to improve the functioning of the SCPC should continue with a further allocation of financial and human resources. Additional human and financial resources should be made available to the Public Prosecution Office, investigative centres and law enforcements units in charge of investigating corruption. Sectors most vulnerable to corruption require targeted risk assessments and dedicated actions. North Macedonia has some level of preparation in the fight against organised crime. It has made some progress, mainly in operational cooperation with international partners, as well as in improving the coordination of activities to combat organised crime. More needs to be done to improve the effectiveness of law enforcement in fighting certain forms of crime, such as money laundering and financial crimes. The investigative centres at the Basic Public Prosecution Office need to be strengthened to achieve their objectives of increasing the efficiency of investigations and improving coordination between prosecutors, the police and other relevant bodies. Some progress has been made in the fight against terrorism and preventing/countering violent extremism in line with the objectives set out in the joint action plan on counter-terrorism for the Western Balkans and the bilateral implementing arrangement. A national strategy for the prevention of money laundering and financing terrorism (2021-2023) was adopted in 2021. Work should continue on reintegration and resocialisation of returnees as well as on de-radicalisation in prisons. The legal framework on the protection of fundamental rights is largely in line with European standards. The deinstitutionalisation process is progressing with the resettlement of persons with disabilities to community-based care. The Ministry of Labour and Social Policy continues to invest in community services, including support for victims of gender-based violence. It is of particular importance to implement all the provisions of the Law on prevention and protection from violence against women and domestic violence. Continued improvements can be noted in gender mainstreaming and respect for women’s rights. The recommendations made by the European Committee for the Prevention of Torture regarding the treatment of detainees and convicts were not adequately addressed. Implementation of the legislation on hate speech and of the national action plan for the Istanbul Convention’s provisions needs to be improved. The civilian external oversight mechanism over the police is still not fully functional and it lacks representatives from civil society organisations. North Macedonia has achieved some level of preparation/ is moderately prepared in the area of freedom of expression. Overall, it made limited progress during the reporting period to address the previous recommendations. The general context is favourable to media freedom and allows for critical media reporting, although there were some tensions during the 2021 local elections. Action on self-regulation of the media should resume and produce practical results in advancing professional standards of journalism. Greater transparency is needed to regarding media advertising by state institutions and political parties. The authorities need to step up their efforts to reform the public service broadcaster, ensuring its independence, professional standards and financial sustainability. The reform process of the public service broadcaster, in line with its five-year development strategy, is constrained by delays in appointing members of its programming council. The council of the Agency for Audio and Audiovisual Media Services still needs to be appointed. The labour rights of journalists still need to be addressed. On regional cooperation, the country maintained good relations with other enlargement countries and continued its engagement in regional initiatives. Existing bilateral agreements, including the Prespa Agreement between North Macedonia and Greece as well as the Treaty of Friendship, Good Neighbourliness and Cooperation with Bulgaria, need to be implemented in good faith by all parties. On the economic criteria, North Macedonia has made some progress and has achieved a good level of preparation in developing a functioning market economy. In 2021, the economy largely recovered from the COVID-19 pandemic. The government continued to implement fiscal support measures to help the recovery. Helped by rebounding tax revenue, the fiscal deficit fell to 5.4 % of GDP in 2021, while debt levels stabilised after rising significantly in 2020. With the rise in food and energy prices accelerating in early 2022, the government adopted a new set of fiscal measures to contain the negative impact on the economy, though the fiscal measures could have been better targeted. The central bank tightened its policy stance in view of rising inflationary pressures. Important policy reforms to improve fiscal governance and the sustainability of public finances stalled. After long delays, the new organic budget law, which provides for fiscal rules and a fiscal council, was adopted by the Parliament in mid-September. The management of public investment needs further improvement. The banking sector remained sound. Regulatory measures to ease borrowing requirements were phased out in 2021. The business environment continues to be held back by the large size of the informal economy and by slow progress in streamlining para-fiscal charges. North Macedonia has made some progress and is moderately prepared to cope with competitive pressure and market forces within the EU. Integration with the EU in trade and investment remained at a high level in 2021, in spite of lockdowns and disruptions of supply chains domestically and in trade partner countries. The share of high-value products in exports increased further. There was further progress towards improving vocational educational training, but major skills shortages persist to meet labour market needs, entailing a long school-to-work transition. These issues, as well as large gaps in transport and energy infrastructure, low investment and innovation spending are holding back the country’s potential for growth. The digitalisation of the economy is advancing, but the competitiveness of domestic businesses could be improved through a wider offering of public e-services. As regards its ability to assume the obligations of membership, North Macedonia is moderately prepared in most of the areas covered by Cluster 2 on the internal market, namely the free movement of goods, services and capital, intellectual property, competition policy, financial services and consumer and health protection. The country has achieved a good level of preparation on company law, although it is still at an early stage on freedom of movement for workers. In the reporting period, North Macedonia made good progress on free movement of capital and some progress on company law and financial services. No progress was made on competition policy. Overall, more progress is needed in the coming year in the areas covered by this cluster as it will feed into North Macedonia’s preparations to meet the requirements of the EU’s internal market. Work on this cluster is highly relevant for the development of the Common Regional Market. Overall, North Macedonia is moderately prepared in most of the areas covered by Cluster 3 on competitiveness and inclusive growth, including in digital transformation and media, taxation, enterprise and industrial policy, education and culture and economic and monetary policy. It has achieved a good level of preparation in science and research and in the customs union. Some progress was made in most of the areas covered by this cluster. Good progress was made in the area of economic and monetary policy, following the adoption of the Organic Budget Law in September 2022. More efforts are needed, however, particularly in areas where limited progress was made, such as digital transformation and media as well as education and culture. On Cluster 4 on the Green Agenda and sustainable connectivity, North Macedonia has achieved a good level of preparation in trans-European networks. The country is moderately prepared on transport policy and energy and has achieved some level of preparation on environment and climate change. Some progress was made in the areas of environment and climate change. Substantial efforts are needed in the areas where limited progress was made such as in energy, transport policy and trans-European networks. The country needs to accelerate the implementation of the Economic and Investment Plan and of the Green Agenda for the Western Balkans over the upcoming period.

North Macedonia is moderately prepared in most areas of Cluster 5 on resources, agriculture and cohesion. It has achieved a good level of preparation in the area of food safety, veterinary and phytosanitary policy and is at an early stage of preparation in financial and budgetary provisions. Over the reporting period, some progress was made in agriculture and rural development and in food safety, veterinary and phytosanitary policy. However, further efforts are needed, in particular in areas where limited or no progress was made, such as in fisheries, financial and budgetary provisions, and in regional policy and the coordination of structural instruments. Concerning Cluster 6 on external relations, North Macedonia is moderately prepared in the area of external relations and has reached a good level of preparation with regard to the common foreign and security policy. The country made limited progress during the reporting period on common commercial policy. North Macedonia has made very good progress by fully aligning with the EU common foreign and security policy, following Russia’s aggression against Ukraine. By doing so, North Macedonia has shown it can be a reliable partner. North Macedonia remains one of the main transit routes for migration movement. The country continues to play a constructive role in the management of mixed migration flows. It cooperates effectively with neighbouring countries and EU Member States, including with guest officers from the EU Member States on the ground. Efforts to ensure basic living conditions and services for all migrants staying in the country continued. The registration of migrants and adequate protection-sensitive profiling remains a priority and needs to be carried out in a more systematic manner. In August 2022, the Commission negotiated a status agreement with North Macedonia that would allow the European Border and Coast Guard Agency (Frontex) to deploy the European Border and Coast Guard standing corps to the country. The agreement is expected to be signed before the end of the year. The country should take a more systematic approach to fighting the smuggling of migrants. 2. Cluster 1: The Fundamentals of the Accession Process 2.1. Functioning of democratic institutions and Public Administration Reform 2.1.1. Democracy The reporting period was characterised by intense efforts, which led to the start of the accession negotiation process. The holding of the first Intergovernmental Conference in July 2022 was a historic moment and marked a new phase in the EU accession process for North Macedonia. This was a clear recognition of the determination of North Macedonia to implement EU related reforms. The country continued its efforts to improve democracy and the rule of law, despite some challenges. Elections Overall, the legal framework remains conducive to the organisation of democratic elections. However, limited progress has been made over the reporting period in addressing and implementing the outstanding recommendations made by the OSCE/ODIHR and the Venice Commission. As mentioned in previous reports, the electoral legislation should be comprehensively reviewed to address existing inconsistencies and the relevant laws need to be adopted in a timely, inclusive and transparent manner, well before the next elections. In this regard, the authorities need to step up their efforts and show political will to further improve the electoral process. Local elections took place on 17 and 31 October 2021. Overall, VMRO-DPMNE won 42 mayoral posts (against five in 2017) and SDSM won 16 (against 57 in 2017). The ethnic Albanian parties broadly retained their positions won in 2017. Only two women were elected as mayors. Political parties should take further steps to encourage the participation of women in the electoral process. According to the final report by the OSCE/ODIHR, the elections were competitive and fundamental freedoms were widely respected. However, there are still numerous gaps and inconsistencies in the electoral legal framework. The frequent and often unaligned changes to the Electoral Code, which were adopted in a hasty manner and just prior to elections, are contrary to international good practices. Candidates could campaign freely, but negative rhetoric, frequently targeting women, was noted. While the voting procedures were generally respected, frequent issues were identified with the use of biometric identification devices. A comprehensive reform of electoral legislation, in line with all outstanding OSCE/ODIHR recommendations and following a broad consultative process, needs to be finally completed well in advance of the next elections. The accuracy of the voter register should be improved through systematic data updates. In both rounds of the local elections, the State Election Commission met most legal deadlines, despite the short timeframe to adapt to the amendments to the Electoral Code adopted in September 2021. The State Election Commission needs to be allocated the necessary resources in a timely manner to carry out its mandate efficiently and independently. Parliament The work of Parliament was marred by political polarisation, which delayed the adoption of many pieces of legislation. Following intense debates, Parliament adopted conclusions on the proposal which paved the way for the opening of accession negotiations. The Parliament needs to play an active and positive role in the EU accession negotiation process. Joint and prompt efforts by all parties are needed as a matter of priority to strengthen Parliament’s role as a forum for constructive political dialogue, particularly on the EU reform agenda. Proper planning and consultations are needed to limit the use of fast-track procedures in order to allow for effective scrutiny of and consultation on legislation. Oversight of the executive through parliamentary questions to ministers should be conducted on a more regular basis. Parliament should implement without further delay the proposals for internal reform agreed during the third round of the ‘Jean Monnet Dialogue’ in early 2020. Criminal responsibility for those who orchestrated or committed violence in the attack on Parliament on 27 April 2017 continued to be established. Some political parties took steps to improve their internal democracy. Further efforts are needed to increase the transparency of the funding of political parties. Following the replacement of Members of Parliament, who became mayors after the 2021 local elections, and ministers after the restructuring of the government in January 2022, the number of women Members of Parliament (50 out of 120, i.e. 42%) increased by three and is now the highest ever. The number of MPs from the non-majority communities remained unchanged (42 out of 120, i.e. 35%). Alternativa joined the ruling coalition in January 2022, while BESA moved to the opposition – see Governance. After difficult and tense debates, Parliament adopted in July 2022 the proposal that paved the way for the start of the EU accession negotiations. As a negotiating country, North Macedonia has new opportunities and responsibilities. In this regard, Parliament has an important role to play in the EU accession negotiation process. The governing coalition and opposition need to work together constructively within Parliament and focus on concrete steps in the negotiation process, including by taking forward EU related reforms in the interests of citizens. Over the reporting period, Parliament has remained the main forum for political dialogue. In March 2022, Parliament adopted with cross-party consensus a Declaration Condemning Military Acts which Jeopardise the Territorial Integrity and Sovereignty of Ukraine. The opposition supported several laws and a set of economic measures to address the consequences of COVID-19. The National Council for EU Integration, chaired by the opposition, has the responsibility for securing broad consensus on the EU agenda. It held three sessions during the reporting period. However, the work of Parliament was marred by persisting polarisation between the ruling parties and the opposition, which escalated into disruptions and attempted physical altercation on some occasions. Since May 2022, VMRO-DPMNE started an ‘active blockage’ of Parliament. Following the opening the accession negotiation process, the main opposition party submitted in September 2022 to Parliament an initiative for a referendum about the law on ratification of the Treaty of Friendship, Good Neighbourliness and Cooperation between Bulgaria and North Macedonia. This initiative was rejected by the Speaker. Controversies surrounding the composition of the Committee on Issues of Elections and Appointments delayed the work of that committee and of other committees. A lack of consensus further delayed important appointments of four new judges of the Constitutional Court, five deputy ombudspersons, two members of the Council of Public Prosecutors, members of the programme council of the public service broadcaster and the council of the Agency for Audio and Audiovisual Media Services, and a member of the Commission for Protection and Prevention against Discrimination. Appointments to these positions must be based on merit and not on political grounds. Challenges remain in terms of planning the law-making process more efficiently. In 2021, Parliament adopted 213 laws, of which 113 were under the regular legislative procedure, 81 under shortened procedure and 19 ratifications. The opposition challenged the use of the ‘EU flag’ procedure, a fast-track procedure aiming at aligning legislation with the EU acquis, and it blocked several draft laws at the level of committees. The number of laws adopted in shortened procedure decreased slightly but remains still high. These need to be significantly limited as they reduce opportunities for inclusive legislative processes and meaningful debates – see 2.1.2. Public Administration Reform. Parliament oversight of the executive continued with seven sessions for parliamentary questions in 2021. Such sessions were halted prior to the October 2021 local elections and resumed only in April 2022, more than three months after the new government took office. Two motions of no confidence in ministers of the former government were not debated as new ministers took on those portfolios. The plenary and relevant committees discussed the annual reports of regulatory, monitoring and supervisory bodies.

There was no significant progress in implementing the commitments made during the third round of the ‘Jean Monnet Dialogue’ in early 2020. These include amending the rules of procedures, including on the constitutive session, greater governmental oversight, public hearings, the parliamentary calendar and procedures for EU-flagged laws. While the working group on the ‘Jean Monnet Dialogue’ met twice in 2021 and one more time in 2022 to discuss the implementation of the commitments made, limited progress has been made and the Rules of Procedure remain unchanged. The process should be completed without further delay to ensure a better functioning of Parliament. As regards the protection of human rights and fundamental freedoms, Parliament approved with cross-party support the new organisation of the Ombudsman’s Office. The Club of Women MPs and inter party parliamentary groups on youth, LGBTIQ, people with disabilities and Roma implemented numerous activities in close cooperation with relevant civil society organisations. Parliament and government committed to launch and achieve as a matter of priority the relevant constitutional changes, with a view to including in the Constitution citizens who live within the borders of the state. Work continued to establish the accountability for the violent attacks in Parliament in April 2017. The Court of Appeals in Skopje upheld first instance sentences for those who committed violence. Efforts should continue to improve the efficiency of the democratic system, including transparency on the funding of political parties, to address the recommendations made by the Group of States against Corruption (GRECO). See Chapter 23 – Judiciary and fundamental rights. Political parties should also improve their internal democratic processes. SDSM held direct elections for a party leader for the second time. Governance The government continued to work on the EU reform agenda and on addressing the consequences of the COVID-19 pandemic and of the war in Ukraine. Decisive efforts are needed to build momentum for reforms and move forward on the EU accession negotiation process. Work should focus on ensuring that the existing legislation is implemented effectively rather than launching ad hoc initiatives. Inter-ethnic relations remained stable and the Ohrid Framework Agreement continued to be implemented. In January 2022, 62 of 120 Members of the Parliament supported the new government, led by a new Prime Minister. The new ruling coalition is composed of SDSM (together with its electoral coalition partners from smaller parties), DUI , Alternativa and DPA . In the government, 19% of ministers, 12% of deputy ministers and 36% of state secretaries are women. The main priorities of the government programme for 2022-2024 focus on sustainable economic growth, social inclusion and human capital development, rule of law and good governance, promoting democracy and freedom as well as NATO and EU integration. Following the start of the EU accession negotiations process, government adopted in September the Structure for Negotiation, led by the Chief Negotiator. It is important to ensure that this structure functions smoothly and effectively, while including the relevant stakeholders in a transparent and inclusive manner. The inter-ethnic situation remained calm overall. The Committee on Inter-Community Relations accelerated its efforts to improve inter-ethnic relations by holding regular sessions despite the COVID-19 pandemic, and by implementing intercultural activities between students from different ethnic communities. The 2001 Ohrid Framework Agreement, which fosters the multi-ethnic character of the society, continued to be implemented. The country needs to finalise the reform process of the local self-government system. The amendments to the law on financing local self-government units aim at securing additional financial resources for municipalities and strengthening public finance management at local level. Building on this, the government should progress with the overall reorganisation of competencies between the central and the subnational level. Municipalities have encountered severe financial difficulties as a result of inflation and increased energy costs. The polarisation between municipalities, mostly led by the opposition after the October 2021 local elections, and the government has complicated the negotiations to agree on measures to address this issue. Civil society Civil society organisations (CSOs) continue to operate in an enabling environment, aided by the adoption of the strategy of cooperation with and development of civil society 2022-2024. Civil society continued to play an important role in decision-making processes and in monitoring the activities of the state. However, efforts are needed to improve transparency in policymaking and the inclusiveness of consultation processes. The legal and financial frameworks still need to be improved and implemented in practice. Civil society is a key component of any democratic system and continues to be recognised as such by the state institutions. Civil society has played an essential role by monitoring government policies and providing important information for both citizens and state institutions. Civil society organisations continued to promote human rights and fundamental freedoms by being steadfast in their roles as watchdogs and through their involvement in policy-making. Despite the negative economic and social impact of the COVID-19 pandemic, civil society organisations have demonstrated a unified response in supporting activities to provide assistance to people in need. The Council for Cooperation between the Government and Civil Society continues to be the main structural channel for consulting and involving civil society in policy dialogue and decision-making. However, further efforts are needed to involve civil society in policy and structural policy-making in a more inclusive and transparent manner. The representatives of the civil society organisations have boycotted the work of the Council since March 2022. The authorities did not reinstate standard allocations for state funding of the annual programme for cooperation with civil society in the supplement to 2022 state budget. The strategy for cooperation with and development of civil society 2022-2024, adopted in December 2021, aims to improve the legal and institutional environment for civil society, with an adequate financial framework for activities of CSOs and a sound state-funding model. An effective monitoring framework is needed to implement the strategy. Local authorities are encouraged to involve civil society organisations in policy-making processes. Civilian oversight of the security/intelligence sector Parliamentary oversight of the intelligence services was exercised more regularly, but further work is needed to improve efficiency. The relevant committees carried out inspections of the institutions of the security sector. However, the delay in employing the technical experts impeded the performance of the Committee on Interception. The Civilian Oversight Council is not fully functional and needs to be allocated sufficient administrative and financial resources to carry out its mandate, as a matter of urgency. 2.1.2 Public administration reform

North Macedonia remains moderately prepared in terms of its public administration reform. It made limited progress in implementing last year’s recommendations. It adopted the new 2022-2025 public financial management reform programme. However, the adoption of the legislation on organisation and operation of state administrative bodies and the new legal framework for human resources management (revision of the law on administrative servants and the law on public service employees and a new law on top management service) have been delayed. The new framework aims to improve the management of human resources across the administration and provide greater assurance for merit-based recruitment, promotion and dismissals, including at senior management level. The new organic budget law was adopted in September 2022. The State Commission for Prevention of Corruption has been proactive in addressing cases of nepotism, cronyism and political influence in the process of recruiting public-sector employees and in the process of appointing members of supervisory and management boards. As last year’s recommendations were not sufficiently addressed, they remain valid. In the coming period, the country should, in particular: ®adopt the law on administrative servants, the law on public service employees and the law on top management service and start their implementation; ®adopt the law on organisation and operation of state administrative bodies and related secondary legislation in line with the recommendations for the new organisation of state administrative bodies and start their implementation; ®ensure full implementation of the law on general administrative procedures with a focus on electronic exchange of documents. Strategic framework for public administration reform Implementation of the 2018-2022 public administration reform strategy and its monitoring and reporting continued with some delays. Only some of the planned activities were fully implemented. The 2018-2021 public financial management reform programme ended in December 2021. In June 2022, the government adopted a new programme for the period 2022-2025.The high-level Public Administration Reform Council and the Public Financial Management Council continued to provide both political support for and supervision of reforms. The Ministry of Information Society and Administration still lacks a properly staffed public administration department to drive the reforms at technical level. Efforts to improve managerial accountability (see Chapter 32 – Financial control) should be further enhanced. Implementation of both strategies continues to depend largely on donor funding. However, the annual budget allocation for the public administration reform increased noticeably. Policy development and coordination The legal framework and the institutional structures provide for a coherent policy-making system and include, an electronic system for strategic planning and preparation of the government’s annual work plan. Efforts continued to clarify the responsibilities of some policy-making institutions and ensure their proper functioning and in streamlining reporting lines. Medium-term budgetary planning and fiscal policies are consistent with the government’s strategic priorities. The government adopted a new methodology for preparing, monitoring and reporting on sector strategies in May 2022 with the aim of strengthening policy planning. The General Secretariat’s central coordination and quality control role remains insufficient. The new 2021-2025 National Programme for the Adoption of the Acquis was adopted in June 2021, reflecting the revised enlargement methodology. No report has been published on its implementation yet. Progress in EU-related reforms is addressed as a pre-agenda item at each government session. Evidence-based policy and legislative development continue to be partially ensured. There are still institutions that have not digitalised their registers, which hinders the quality of administrative data. The sharing of administrative data needs to be expanded and simplified in order to be more consistently used in the decision-making process. Regulatory impact assessments continued to be formally used for all laws that the government sent to Parliament in regular procedure, but not for the laws that were adopted in shortened procedure. All regulatory impact assessments, irrespective of the legislative procedure, should be sent to Parliament. Efforts are ongoing to improve the use and quality of regulatory impact assessments, in particular budgetary impact assessments. The Ministry of Information Society and Administration, which is responsible for the process, should strengthen its capacity to carry out more effective and consistent quality control. The national electronic consultation system allows for the inclusive participation of all stakeholders in public consultations. However, quality control and follow-up to the public consultation process needs to be further improved. The share of laws adopted under shortened procedures fell slightly, to 38% in 2021 (see 2.1.1. Democracy). These laws did not undergo a proper public consultation process and were not regularly accompanied by impact assessments. The quality of legislative drafting needs to be improved. Frequent legislative amendments create legal uncertainty and impede proper implementation. The use of the ‘EU flag’ procedure needs to be consistent and clearly linked to laws that aim primarily at aligning national law with the EU acquis (see 2.1.1 Democracy). Public scrutiny of government work is ensured through government press releases and the publication of the agendas and minutes of government sessions. Documents adopted at government sessions are not published. The publication of the 2020 and 2021 annual reports on the work of the government has also been delayed. Public financial management The national authorities have completed implementation of the 2018-2021 public financial management reform programme. There were some delays due to the COVID-19 pandemic, unrealistic planning and the delayed adoption of the organic budget law. The law was finally adopted in September 2022. The country submitted the 2022-2024 Economic Reform Programme in good time, which aims to stabilise debt in the medium term by curbing current expenditure. In June 2022, the government adopted a new public financial management programme for the period 2022-2025 (see also Chapter 17 – economic and monetary policy). The Ministry of Finance continued its efforts to improve the transparency of public finance management. It continued to publish data on the revenue and expenditure of public and state-owned companies on a quarterly basis. It also launched a new transparency tool on public debt and published quarterly reports on execution of local government budgets. The Ministry of Finance must invest further in increasing public participation at every phase of budget preparation, execution and reporting. Budgetary transparency and public expenditure effectiveness need to further improve through the efficient implementation of the new organic budget law as well as the development of an integrated financial management information system. The System is also foreseen in the 2022-2025 public financial management reform programme. The 2022-2024 Economic Reform Programme foresees the development of an integrated tax information system to improve the digitalisation of the public administration. Public service and human resources management North Macedonia needs to adopt the revised law on administrative servants and law on public sector employees and the new law on top management service, with the aim of ensuring merit-based recruitment and fair promotions and dismissals at management level. Amendments to these laws since they were adopted in 2014 have led to inconsistent application of recruitment and promotion procedures. Contradictory rules in the law on internal affairs that allow for employees to be excluded from the scope of the law on administrative servants still apply. The administration still frequently uses procedures to convert temporary or service employment contracts into permanent contracts. The grounds for dismissal also need to be made more transparent. A proper follow-up should be ensured to the recommendations of the State Commission for Prevention of Corruption on improving public-sector recruitment procedures (see Chapter 23 – Judiciary and fundamental rights). The Ministry of Information Society and Administration coordinates and monitors the management of human resources across the public administration. The commitment and capacity of all the institutions involved need to increase to ensure the systematic application of relevant legislation. The use of the Human Resources Management Information System by line institutions increased. The remuneration system is yet to be revised. A number of institutions still maintain the practice of paying salary supplements although for lower amounts under the Law on Execution of the 2022 budget. According to the register of public-sector employees, which does not include staff of institutions such as the army and law enforcement agencies, as of December 2021, 55.3% of all public service employees were women. However, women are by far less represented in top management positions, accounting for 14% of all management staff in June 2022. A resource centre for gender-responsive policy-making and budgeting was set up in March 2022 in the Ministry of Labour and Social Policy. Equitable representation of minorities remains inconsistent across the public sector and across all categories of civil servants. Concerns have been expressed, including by the State Statistical Office, over the initiative of the Ministry of Information Society and Administration to revise the percentage in the formula of the so-called ‘BalancER’. This is a human resources tool, which determines the proportion of public employees from each ethnic group. The transfer of employees from the Ministry of Political System and Relations between Communities to various institutions was not completed, thus continuing to undermine the principles of merit and effectiveness. Professional development is not systematic and the government still lacks a centralised database of all trainings offered by the various institutions. It upgraded the regulations on integrity in the public service at both central and local level and adopted a methodology for assessing the risk of institutional corruption in November 2021. The State Commission for Prevention of Corruption is working on strengthening professional integrity in the municipalities. Whistle-blower legislation is in place but there is no data on whether and how whistle-blowers are protected from retaliatory action. According to the annual report of the State Commission for Prevention of Corruption, the institutions reported 44 whistle-blower instances in 2021 and sent nine reports directly to the State Commission. Accountability of the administration Following the functional review of 139 central government institutions, in March 2022 the government adopted a report with recommendations and proposals on the reorganisation of functions per policy area, selecting three institutions in which to run a pilot. The government is currently working on adopting a new law on state organisation to streamline the institutional framework, eliminate overlapping competences, improve the administration’s efficiency and improve the lines of accountability. The delegation of decision-making authority to middle management both at central and at local level is still limited. Further efforts are needed to efficiently mainstream managerial accountability across the public administration (see Chapter 32 - Financial Control). Legislation provides for scrutiny by independent oversight bodies, in particular the State Audit Office and the Ombudsperson. However, the effectiveness of these bodies needs to be improved. There needs to be more systematic follow-up to their findings and recommendations. Citizens’ right to access public information is enshrined in legislation. The proactive disclosure of information and datasets on official websites should be further encouraged, however. The Agency for Protection of Free Access to Public Information increased its staff and training offers and created two new portals for applicants and information holders. The COVID-19 pandemic was the main reason for delays in responding to requests for public information by many institutions. The legal framework covering citizens’ right to good administration provides for administrative and judicial reviews. Most of the decisions continue to be based on procedural considerations and not on merit, which in combination with lengthy procedures, discourages citizens from pursuing administrative justice. There were delays in enforcing administrative court rulings by the respective institutions, which were themselves rarely decided on merit. The legislation gives citizens the right to seek compensation and stipulates the liability of public authorities in cases of wrongdoing. In 2021, courts awarded compensation for damages in eight cases.

Service delivery to citizens and businesses Most administrative services for citizens and businesses are offered both offline and online – through the national e-portal for service, including facilities for people with special needs. Efforts are ongoing to upgrade the e-portal to bring in 135 new services in an attempt to develop a more user-oriented service delivery. The number of both registered users and completed services on the portal increased in 2021, but remains below expectations. State institutions offering services to citizens need to demonstrate more commitment to providing services through the e-portal. The population register was used to crosscheck the 2021 census data. The quality of data in the register needs to improve as it is used as the principal register in the country. The government encouraged all state institutions to use the interoperability framework to its full potential. North Macedonia made no progress on simplifying administrative procedures. The law on general administrative procedures is not yet systematically implemented across the administration. 2.2. Rule of law and fundamental rights 2.2.1 Chapter 23: Judiciary and fundamental rights The EU’s founding values include the rule of law and respect for human rights. An effective (independent, high quality and efficient) judicial system and an effectively fighting against corruption are of paramount importance, as is the respect for fundamental rights in law and in practice. North Macedonia has achieved some level of preparation / is moderately prepared to apply the EU acquis and European standards in this area. Overall, it has made some progress, including through strengthened judicial independence. Implementation of the judicial strategy reached its final stage and a new strategy is being prepared. The Law on the Public Prosecutor’s Office continued to be implemented consistently, thereby ensuring the accountability for crimes arising from and related to the illegal wiretaps. This resulted notably in important verdicts in high level cases. The State Commission for the Prevention of Corruption continues to carry out its mandate proactively. Corruption remains prevalent in many areas and is an issue of concern. North Macedonia continues to meet its general obligations on fundamental rights but there are challenges in implementing existing legislation. The Ombudsman’s Office increased budget has enable it to recruit specialised staff, in order to better accomplish its role. It is essential to complete the long-drawn appointment of members of independent and regulatory bodies, based on merit. The functional independence of the human rights bodies must be guaranteed at all times, including by allocating sufficient financial resources to enable them to carry out their mandate properly. The situation in prisons remains dramatic. Systemic solutions to improve detention conditions should be implemented with the utmost urgency. Freedom of expression and pluralistic viewpoints continued to thrive, but challenges remain. The country needs a strategy on further media reforms, elaborated with the support of all relevant stakeholders. Functioning of the judiciary The judicial system of North Macedonia has achieved some level of preparation / is moderately prepared. Some progress was achieved in the field of the judiciary, through the steady implementation of the judicial reform strategy, thereby further addressing the recommendations made by the Venice Commission and the Senior Experts’ Group on systemic rule of law issues. The preparation of a new judicial reform strategy has started, in an inclusive manner, building upon the lessons learnt from the previous one. Implementation of the updated action plan on the judicial reform strategy has continued but needs to become more systematic. The judiciary has demonstrated its commitment to protect its integrity and independence. The pace of implementation of the human resources strategies for the judiciary and prosecution needs to be stepped up. Judicial institutions have implemented consistently the new rules for the appointment, promotion, discipline and dismissal of judges and prosecutors. Promotions for higher courts faced a delay and scheduled retirements further decreased the number of judges and prosecutors. The Judicial Council and the Council of Public Prosecutors continued implementing the strategic plans. Any new draft law on the Academy for Judges and Prosecutors should maintain the Academy as the sole entry point to the judiciary and prosecution and should ensure that access to these professions is fair and transparent. Work was undertaken to upgrade the software system aiming at putting into practice the provisions of the Law on case flow management for automatic and random distribution of cases in the courts, through the automated court case management information system (ACCMIS). In the coming year, the country should, in particular: ®finish implementing the judicial reform strategy and the updated action plan, with a specific focus on adopting a new law on civil procedure, in line with European standards and on preparing the new strategy on judicial reform (for 2023-2027) without delay; ®step up implementation of the human resources strategies for the judiciary and public prosecution network, and use them as an indicator to forecast upcoming recruitment; ®deploy all the necessary resources to ensure that the automated court case management information system (ACCMIS) is fully functional and compatible with the new measure of complexity of court cases and the method for assessing judges and presidents of courts. Strategic documents Implementation of the strategy on judicial reform (2017-2022) entered its final phase and an assessment report on implementation of the strategy was prepared. Its findings will need to feed into the preparation of the new strategy on judicial reform for the period 2023-2027, which started in September 2022. The Council for Monitoring the Implementation of Judicial Reform met twice during the reporting period, in December 2021 and April 2022 and approved the 2021 annual implementation report. Several legislative measures remain pending in the Parliament, including a new draft law on civil procedure. The implementation of the Law on the Public Prosecutor’s Office continued, following its entry into force in 2020. There was limited progress in implementing the strategies for human resources management in the courts and in the Public Prosecutor’s Offices. Management bodies Parliament elected a new member of the Judicial Council in December 2021. In line with the method for qualitative assessments of judges and presidents of courts, the Judicial Council set up commissions to assess candidates for higher courts and court presidents. In September 2022, judges elected three new members of the Council, replacing those concerned with scheduled retirements. In September 2021, the administration adopted the method for determining the complexity of court cases by analysing the indicative number of cases to be heard each month by a judge. In September 2022, the Judicial Council adopted its programme and action plan for the prevention of corruption in the judiciary for 2022-2025. The Council needs to strengthen its role as guardian of the independence and impartiality of judges, and to improve its transparency. In March 2022, Parliament elected a new member of the Council of Public Prosecutors. The members of the Council elected its new President in September 2021. Scheduled retirements concerned one member of the Council and there are two vacancies in total. The Council should provide reasoning for its decisions and ensure regular access of the media to its sessions, which was not always possible due to the limited space and COVID-19 restrictions in place. The budget allocation for the Council increased to EUR 371,000 but it still lacks sufficient staff and the IT resources needed to perform its tasks effectively. Independence and impartiality Judicial independence is enshrined in the constitution. The President of the Supreme Court, the Judicial Council, practitioners and some civil society organisations (CSOs) reacted against the proposed reopening of several judicial cases, included in the government programme, at the request of a coalition partner. Both Councils need to continue pursuing their commitment to full respect for the principle of independence of the judiciary and increasing transparency needs to continue in both Councils. It is important to ensure that the judiciary is shielded from any risk or perception of undue external interference. The Declaration on Open Judiciary signed in March 2022 by 12 different judicial institutions, CSOs and professional associations, led by the Supreme Court, should help improve transparency and public trust in the judiciary.

The software system aiming at putting into practice the provisions of the Law on case-flow management for automatic and random distribution of cases, through the automated court case management information system (ACCMIS), is being upgraded. The administration needs reliable statistical data, in line with the recommendations and methodology of the Council of Europe European Commission for the Efficiency of Justice (CEPEJ), on the performance of both the judiciary and the prosecution. Accountability The Advisory Body for Judicial Ethics of the Association of Judges met four times since June 2021 and issued four opinions. The initial training programme at the Academy for Judges and Prosecutors for 2022/23 includes lectures on ethics, business culture and deontology. In 2021, the Judicial Council received 142 requests to determine the responsibility of a judge or president of court (two more than in 2020). Since June 2020, the Judicial Council has dismissed six judges, and the Council of Public Prosecutors upheld the decision of the Chief Prosecutor on the dismissal of one prosecutor. The general reason provided for such dismissals was related to unprofessional performance. The Judicial Council issued a written reprimand to one judge and fined a president and a judge. In 2021, the State Commission for the Prevention of Corruption issued misdemeanour payment orders against three judges or court presidents of courts for failing to submit asset declarations or reports on the change of their property status and interests. Professionalism and competence The Judicial Council started to apply the new methodology for professional evaluation for the appointments and promotions with decisions on 97 candidates for judges and four for Presidents of courts. Scheduled retirement of three members of the Judicial Council further delayed election of judges for higher courts whereas vacancies for posts of Presidents of Courts in smaller cities were difficult to fill. The Council of Public Prosecutors appointed five prosecutors in the Public Prosecutor's Office for Prosecuting Organised Crime and Corruption (OCCPPO) and appointed two heads of basic PPOs. A total of 1,639 professionals participated in 47 in-service training sessions organised by the Academy for Judges and Prosecutors. Quality of justice It is important that any new law on the Academy for Judges and Prosecutors maintains the Academy as the sole entry point to the judiciary and prosecution, to ensure a fair and transparent access to these professions in line with the recommendations of the 2018 peer review mission on judicial training. It is equally important that the Academy heeds the European Commission’s recommendations not to shorten the initial training. The initial training of 59 students of the seventh intake is underway. The 97 students in the eighth intake, selected on 15 April 2022 started their training in May. The Academy marked its 15th anniversary and is actively cooperating with the European Judicial Training Network (EJTN) and the Academy for European Law (ERA). The total budget allocated to training initiatives at the Training Centres and to other initiatives implemented directly by courts and prosecution offices in 2021 amounted to EUR 1,193,036, a 38 % increase on the previous year. No new employees were recruited. The Supreme Court and the four Courts of Appeal continued their efforts to improve the consistency of judgments and to harmonise court practices. In December 2021, the Supreme Court adopted its new Rules of Procedure. In 2021 it has adopted 35 principle legal opinions, stances and conclusions, all published on its website. At the end of 2021, there were 473 judges, (26 per 100,000 inhabitants) 61% female judges and 170 prosecutors (nine per 100,000 inhabitants), 55% female prosecutors, less than in 2020. According to the European Commission for the Efficiency of Justice (CEPEJ), the European averages are 21 judges and 12 prosecutors per 100,000 inhabitants. The 2021 budgetary allocation for the judicial system was about EUR 40 million. The retirements from June 2022 decreased further the number of judges by 48 and of prosecutors by 11. It is essential to speed up implementation of the human resources strategies for the courts and public prosecutors' offices and to plan ahead for staffing needs. The Council for Digitalisation in the Judiciary intensified the work to implement the IT strategy. Five pilot courts received IT equipment provided by foreign donors. The recruitment of additional IT staff depends on offering working conditions that are competitive with those in the private sector. In December 2021, Parliament adopted a new law on mediation, which promotes the quality of mediation and unifies the application of the law by all licensed mediators. Work is needed to continuously promote mediation and the use of other alternative dispute resolution methods, including through the relevant chambers, the Academy for Judges and Prosecutors and the Association of Judges. Efficiency Most of the courts continued the positive trend of maintaining a clearance rate of 100% or higher, with the exception of administrative cases with 86.56% in first instance and 111.01% in appeal for the same cases. The number of unfinished cases under the old procedural laws continued to fall. No efforts were made to address the Venice Commission recommendations to re-examine the provisions of the Law on the use of languages related to bilingualism in judicial proceedings. There is a need for a comprehensive and prompt solution to the issue of salaries in the judiciary, considered inadequate. The claims of the judicial administration, including for career advancement, remained pending. No steps were taken to tackle the overall cost and duration of the enforcement process. Fight against corruption The country has achieved some level of preparation / is moderately prepared in the prevention and fight against corruption. Some progress has been made as the country continued to consolidate its track record on investigating, prosecuting and trying several corruption cases, including at a high level. The cases initiated by the former Special Prosecutor’s Office (SPO) continued to move forward, establishing accountability for the illegal wiretaps. A number of cases were subject to first-instance rulings. In line with last years’ recommendations, the State Commission for the Prevention of Corruption (SCPC) has been proactive in providing policy guidance to public institutions on preventing corruption and it opened several cases, including against high-level officials. Efforts to improve the functioning of the SCPC should continue, and a further allocation of financial and human resources is needed. Additional human resources and financial means should also be made available to the Public Prosecution Office, investigative centres and law enforcements units in charge of investigating corruption. The sectors most vulnerable to corruption require targeted risk assessments and dedicated actions. In the coming year, the country should, in particular: ®continue action to fight corruption by increasing support to the bodies responsible for implementing the national strategy for the prevention of corruption and conflict of interests and effectively enforce GRECO’s recommendations;

®allocate sufficient resources to the Office of the Basic Public Prosecutor for Organised Crime and Corruption, including financial experts, in order to ensure effective accountability for high-level corruption cases; ®continue to increase the number of final convictions in high-level corruption cases, including the confiscation of criminal assets, value-based confiscation, extended confiscation and third-party confiscation. Track record North Macedonia has continued to make progress in investigating, prosecuting and trying corruption cases, including for high-level corruption cases. The cases of the former Special Prosecutor’s Office (SPO) continued to be tried mostly by the Public Prosecution Office for Organised Crime and Corruption. So far, there have been final convictions in seven cases against 17 defendants. Trials are ongoing for most of the remaining cases. First-instance verdicts have been issued in 11 cases. The courts issued first-instance convictions including against prominent former government officials such as the former Prime Minister, the former Minister of Transport, the former Minister of Interior and the former Director of the Bureau of Security and Counterintelligence (UBK). Three of those found guilty remain at large. In the case brought by the former SPO, called ‘Titanic 1’, eight out of the 21 defendants pleaded guilty to parts of the charge. In February 2022, four defendants were sentenced in first instance to prison: the former Minister for Transport and Communications to four years and six months, the former Minister of Interior to two years and six months, one defendant to one year and another to three years. The remaining four, including the former Head of Cabinet, the former Deputy Minister of Justice, and the former Secretary General of the government, were sentenced to probation. In another former SPO case named ‘Toplik’, the Basic Criminal Court of Skopje found the six defendants guilty of abuse of official position and authority in relation to the selling of land for the construction of a residential complex. In April 2022, the Court sentenced on a first instance verdict a former Minister of Transport and Communications to three and a half years in prison, one member of the Ministry’s public procurement commission was sentenced to three years in prison. The four other members of the commission were sentenced to two years in prison, and suspended for five years. In another case of the former SPO, called ‘Tariff’, the Skopje Court of Appeal annulled, in November 2021, the first-instance verdict from December 2019 and ordered a retrial. The former director of the state-owned electricity company, AD ELEM, was accused of having made unlawful payments to the consortium that had won the tender for providing a software system. In April 2022, the Court ruled at first instance on the ‘Vodno Construction Land’ case and found five defendants out of six guilty. A former Prime Minister was sentenced in absentia to a concurrent prison sentence of seven years and a fine for money laundering and unlawful acquisition of property. The former Director of the Bureau of Security and Counterintelligence (UBK) was sentenced to one year and three months in prison, two defendants to two years in prison, suspended for five years, and a businessman to one year in prison. The charges against the sixth defendant were dropped. The court also ordered the confiscation of all real estate property that had been temporarily seized. In July 2021, the Basic Public Prosecutor’s Office for Organised Crime and Corruption charged four people in relation to the tender for Skopje’s double-decker buses. A former Minister of Transport and Communications and a former director of the Public Transport Enterprise of Skopje (JSP), who is currently Member of Parliament, are accused of having used their official position to obtain gains for the economic operator from China to procure 202 buses, causing damage to the state budget of approximatively EUR 4.77 million. In March 2022, a former Minister of Transport and two other defendants pleaded guilty and were sentenced to two years’ probation. The trial is ongoing for the former director of JSP. In June 2022, the Supreme Court rejected the requests from the former Special Prosecutor for an extraordinary review of the ‘Racket case’, thereby upholding the verdicts in which the former Special Prosecutor was sentenced to seven years’ imprisonment. In June 2022, in the former SPO ‘Talir 2’ case, the Court convicted in first instance a former Prime Minister to six years’ imprisonment and a former Secretary General of the government to two years’ suspended sentence for abuse of their official position enabling a legal entity to build the headquarters of a political party, at a time when the company had concluded public procurement contracts with state bodies and public institutions or companies. This was in breach of the Law on political parties, the Law on the financing of political parties and the Law on obligations. The ruling also ordered the confiscation of the party headquarters and other premises across the country, owned by the political party. In February 2022, the Supreme Court quashed on procedural grounds the decision taken by the Court of Appeals in Skopje against the former President of the Skopje Criminal Court for manipulation of ACCMIS. In May 2022, the Court of Appeals in Skopje, in a repeated procedure, decided to uphold his conviction of two and half years’ imprisonment. In July 2022, the Supreme Court rejected the request for extraordinary review of the final decision. In 2021, the Public Prosecutor for Prosecuting Organised Crime and Corruption opened investigations into seven cases of alleged corruption against 25 suspects (14 high-profile investigations involving 49 individuals in 2020). Investigations are ongoing against 21 individuals regarding alleged abuse of official position and against nine individuals on alleged money laundering. Charges were filed in eight cases against 38 individuals. Trials are ongoing in 54 cases against 244 individuals. 48 individuals were convicted in first-instance judgments (50 individuals in 2020). 14 individuals were convicted in second-instance judgments. In 2021, the financial police office investigated 27 cases, which led to criminal charges related to corruption. In three cases, high-value movable and immovable assets were temporarily frozen. In four cases, valuable assets for a total value of approximately EUR 256,000 were confiscated after the first-instance judgments. The State Commission for the Prevention of Corruption (SCPC) continued to fulfil its role proactively and opened several new cases. In 2021, the SCPC processed a total of 106 cases of alleged conflict of interest, of which 17 were initiated by the SCPC itself and 89 at the request of other parties. In 2021, 152 cases were closed (149 in 2020), of which 12 dated from 2019 and six from 2020. In 2021, a conflict of interest was established in two cases for which the initiatives submitted to the competent authority were to determine responsibility, resulting in one disciplinary procedure. In one case, the SCPC submitted an initiative for criminal proceedings against two responsible officials, and issued a public reprimand for failure to remedy a conflict of interest. The SCPC has issued opinions on all 85 requests received. The SCPC found grounds for suspected breaches of the Law on the prevention of corruption and conflict of interest, resulting in 32 misdemeanour payment orders. The SCPC also submitted four requests to the SCPC Misdemeanour Commission to initiate misdemeanour proceedings against officials, due to lack of payment after payment orders were issues. In 2021, the SCPC received 1411 declarations of conflict of interest to verify. In 2021, 7 758 asset declarations were accessible on the SCPC website (7 362 in 2020). 2,006 assets declarations were submitted to the SCPC. As regards irregularities in asset declarations, in 2021, the SCPC issues 86 misdemeanour payment orders, all of which were related to non-submission/late submission, except one which was related to failure to report an increase in property. 29 requests to initiate misdemeanour procedures were submitted to the SCPC for unpaid fines. In 2021, a total of 599 cases of corruption were initiated, 16 at the initiative of the SCPC and 583 based on reports submitted by third parties. 404 cases were addressed. Of the cases submitted on the basis of reports, the SCPC found grounds for suspected breaches of the Criminal Code in seven cases and submitted initiatives to the public prosecutor (two cases in 2020). The SCPC launched initiatives before the competent authorities to ascertain the responsibility of officials in five cases. To address the recommendations made by the Council of Europe Group of States against Corruption (GRECO) in the Fifth Evaluation Round report, North Macedonia adopted amendments to the law on internal affairs and to the law on police in April 2022. The changes to the legislative framework include the obligation to submit asset declarations, the ban on employees being members of a political party or a body of a political party, a new integrity test, and of objective and professional criteria for the appointment of the director of the public security bureau (head of the police). Institutional framework

In January 2022, the incoming government created a new post of Deputy Prime Minister responsible for good governance policies. Implementation of the anti-corruption action plan titled ‘Action 21’ is ongoing, as planned. Preventive measures The State Commission for the Prevention of Corruption continued to fulfil its role proactively and boosted its capacity to verify statements of interest and assets. However, the authorities should make more efforts to fully address the conclusions of the SCPC reports. The Law on Prevention of Corruption and Conflict of Interest needs to be fully implemented and the SCPC needs to be strengthened, supported, and adequately resourced. By the end of 2021, the SCPC had a total of 34 employees out of the 64 planned. New IT software solutions are in place to increase information sharing with all public institutions for the prevention of corruption and to increase integrity in the public sector, provide protection to whistle-blowers and monitor implementation of the national strategy for the prevention of corruption. Efforts continue to improve the transparency and integrity of public institutions. The SCPC adopted an integrity policy with guidelines for state bodies and public sector institutions, and guidelines for the local self-government. As of June 2022, 66 municipalities, 15 state bodies and public sector institutions, including the Ministry of Interior, have also adopted an integrity policy. Public campaigns were held to raise awareness on integrity, on whistle-blower protection, and more generally on the fight against corruption. In June 2021, the Customs Administration adopted a new code of conduct for customs officers. In September 2021, the Ministry of Interior adopted its regular internal anti-corruption programme with an action plan and provided training on related topics, including on the protection of whistle-blowers and ethics for staff members. Law enforcement The main institutions dealing with law enforcement are the Public Prosecutor's Office for Prosecuting Organised Crime and Corruption (OCCPPO) within the Public Prosecutor's Office and the Department for Serious and Organised Crime within the Ministry of Interior. The OCCPPO inherited most of the former Special Prosecutor’s Office (SPO) high-profile cases. The OCCPPO has not yet moved to the allocated new premises. Together with the State Audit Office, the investigative centre/judicial police in the prosecutor’s office and the police need sufficient resources allocated in order to pursue high-profile cases properly. In March 2022, five public prosecutors were elected in the OCCPPO. Staffing levels are insufficient to fully tackle cases of corruption and organised crime. The Chief Public Prosecutor suspended the Head of the OCCPPO from office in August 2022 pending a disciplinary procedure initiated following a criminal complaint by the former Acting Director of the Financial Police. The Council of Public Prosecutors (CPP) rejected the appeal of the Head of the OCCPPO, as being groundless, thus confirming her suspension from office. In 2021, assets were confiscated in four cases for a value of approximately EUR 256,000. Real estate, movable and immovable property, and shares were frozen in temporary measures in three cases of alleged corruption. Legal framework The country is party to all international anti-corruption conventions, including the United Nations Convention against Corruption. The Law on the financing of political parties stipulates how financial means can be provided to political parties and managed correctly. The Electoral Code sets out the rules on the financing of electoral campaigns. The State Audit Office (SAO) carries out ex-post checks and publishes annual reports on its website. Seven audit reports were submitted to the State Election Commission (SEC) and the State Commission for the Prevention of Corruption (SCPC) following the 2021 local elections. The Law on free access to public information allows applicants to obtain information on the public financing of political parties. Following the June 2021 adoption of the new Law on lobbying, the SCPC adopted implementing legislation and internal acts to prepare for the law to enter into force in June 2022. The law extends the competences of the SCPC adding the responsibility to keep a register of lobbyists and lobbying organisations, which became operational in June 2022. The Law on the protection of whistle-blowers still needs to be further aligned with the EU acquis including to provide for civil, criminal and/or administrative liability of an official who recommended or participated in retaliation, and to reverse the burden of proof. Strategic framework Implementation of the national strategy for the prevention of corruption and conflict of interest (2021-2025) and the related action plan has been slow. Only 20% of the activities planned for 2021 were implemented in full by the end of year. In order to be effective, implementation of the National Strategy should be carried out at all levels of the administration, not only at the level of the line ministries. Fundamental rights The legal framework on the protection of fundamental rights is largely in line with European standards. The deinstitutionalisation process is progressing with the resettlement of persons with disabilities to community-based care. The Ministry of Labour and Social Policy continues to invest in community services, including supporting victims of gender-based violence. It is of particular importance to implement all the provisions of the Law on prevention and protection from violence against women and domestic violence. Continued improvements can be noted in gender mainstreaming and respect for women’s rights. The recommendations made by the European Committee for the Prevention of Torture on the treatment of detained and convicted persons were not adequately addressed. Implementation of the legislation on hate speech and of the national action plan for the Istanbul Convention’s provisions needs to be improved. The civilian external oversight mechanism over the police is still not fully functional, lacking representatives from civil society organisations. Last year’s recommendations were addressed only partially and remain valid. In the coming year, the country should, in particular: ®allocate the necessary financial and human resources enabling the Commission for Prevention and Protection against Discrimination to become fully functional and increase the cooperation with the Ombudsman Office;

®the recommendations of international monitoring bodies, especially with regard to the rights of persons in detention/prison and the dramatic conditions in prisons should be implemented with utmost urgency and efforts should be stepped up to promote alternatives to incarceration; ®provide adequate support and community services to vulnerable categories of children, especially children victims of violence, Roma children and children with disabilities. North Macedonia has ratified most international human rights instruments. In June 2021, the Parliament ratified the Council of Europe Protocol amending Convention 108 for the Protection of Individuals with regard to Automatic Processing of Personal Data. In November 2021, the country became the 35th Member State party of the International Holocaust Remembrance Alliance. The country submitted periodic reports under the UN Convention on the Elimination of All Forms of Racial Discrimination, as well as the answers to the questions from periodic reports under the Convention on the Rights of Child. In June 2022, there were 813 applications pending before the European Court for Human Rights (ECtHR). The ECtHR delivered 11 judgements and found breaches of the European Convention on Human Rights in three cases (against 14 in 2021), relating to the right to a fair trial, the prohibition of torture and the freedom of expression. In the reporting period, there were 370 new applications allocated to a decision body. Currently, there are 11 cases under enhanced supervision by the Committee of Ministers. The Ombudsman’s Office remains the central body for the promotion and enforcement of human rights. In 2021, the Ombudsman’s Office issued special reports on the implementation of the principle of equitable representation and on gender representation in the public sector. Five deputy ombudspersons need to be appointed by Parliament, without further delay. Cooperation with the CSOs needs to improve. The Office’s budget was 8% higher than it was in 2020, and a new systematisation of staff was approved in April 2022. Out of 2,686 complaints received, breaches were confirmed in 35.8% of cases (2,448 complained received in 2020). These predominantly concerned the rights of the child (18.4%); judiciary and other legal professions (10.9%); social protection (8.8%); consumer rights (8.3%); finances (6.2%) and labour rights (5.4%). Following the involvement of the Ombudsman’s office, all six complaints related to the conduct of the population census were addressed. There was a slight increase in the responsiveness of the administrative and other bodies with public competences (66.2% of the cases, against 63% in 2020), which is still lower than the 80% achieved in previous years. North Macedonia still needs to implement the recommendations made by the European Committee for the Prevention of Torture (CPT) published in 2021. The July 2021 CPT report reiterated past findings on the prevention of torture and ill treatment. The main shortcomings of the prison system remain: the poor prison management system and staff performance, low staffing levels, poor quality healthcare provided to inmates, inter-prisoner violence, squalid material conditions, a lack of purposeful activities and endemic corruption. The external oversight mechanism for the police, including the prison police, is still not fully functional, with the three civil society organisations’ representatives still to be selected by the Parliament. Past issues affecting the effective participation of civil society representatives must be resolved, including the extension of their one-year mandate. In 2021, the Ombudsman’s civil control mechanism acted on eight complaints, two against police officers and six against members of the prison police, a decrease since the previous year when it took action on 21 complains. It submitted one request to the Public Prosecutor’s Office to initiate a procedure for determining criminal responsibility, against ten similar requests sent in 2020. This led to one case being brought before the Basic Criminal Court Skopje for harassment in the act of duty by a police officer. In 2021, the dedicated section in the Public Prosecutors’ Office opened 91 new cases (criminal charges) against 213 persons with police powers or members of the prison police suspected of having committed criminal offences. As a result of the investigations, 33 persons were charged, 20 criminal order proposals were submitted, and first-instance verdicts against 50 persons (six imprisonment sentences, 36 conditional sentences, four fines and four acquittals) were issued in 2021. There needs to be greater awareness-raising of the external oversight mechanism over the police to achieve a good understanding of the system. All reported cases must be investigated without delay and the safeguards against ill treatment by police must be implemented systematically. In 2021, the Department for Internal Control and Professional Standards at the Ministry of Interior handled 63 complaints on the use of excessive physical force by police officers (65 complaints in 2020), of which 19 were found to be ungrounded and 40 lacked evidence. Three criminal charges were filed for ill treatment in the act of duty and one notification was submitted to the Public Prosecution Office. In 2021, 112 reports on the use of means of coercion against sentenced persons were submitted by the prisons to the Directorate for Executions of Sanctions, of which 27 cases concerned the use of physical force, leading to inspections. In one reported case, the use of physical force in Idrizovo prison was established, but the prison did not submit a report to the Directorate for Executions of Sanctions. Cooperation with civil society organisations in stamping out ill treatment continued during the reporting period. North Macedonia should urgently tackle the persistent issue of inadequate detention conditions in prisons, police stations, social care and psychiatric facilities, in line with the recommendations in the last CPT report. In 2021, the National Preventive Mechanism made 33 visits to police stations, prisons and educational correctional institutions as well as places where foreigners and asylum seekers are accommodated or detained. Issues raised in the previous years remain pending, especially the lack of information and access to a lawyer in police stations and the lack of adequate healthcare in prisons. Although infrastructure was renovated and medical equipment was delivered to a number of penitentiary facilities, the conditions of detention in parts of the Idrizovo Penitentiary-Correctional Facility and other detention facilities of the prison system remain inhumane. Reported overcrowding raises additional concerns for the 2,462 persons sentenced and detained (data of March 2022). Renovating the most derelict building in line with the CPT recommendations should be a priority. To professionalise prison management it is important that the appointment of prison directors, including interim directors, is made solely on the basis of the 2019 Law on the execution of sanctions. Regular inspections of prisons should continue. Corruption in prisons is also a recurrent issue. In February 2022, an annual plan to combat corruption was adopted and needs to be implemented. Following adoption of the programme for initial and continuous training and specialisation of officials, the prison training centre in Idrizovo is finally operational and an initial training session for new employees has been organised. The lack of adequate healthcare or measures to treat drug addiction in prisons remains an issue of serious concern, to be addressed by the Ministry of Health. In order to be fully implemented, the strategy for the development of the penitentiary system 2021-2025 requires funds, additional staff and political commitment. An inter-ministerial group was set up to monitor and evaluate the implementation of the strategy. The process of releasing convicts back into the community should be prepared through inter-institutional cooperation between prisons and the post-penal assistance. The probation system continues to develop and the number of cases is increasing. In 2021, 451 probation cases (276 in 2020) were recorded, most of which were community service, suspended sentences with protected supervision and supervision for conditional release. Cooperation between the public and private sector and civil society, and interagency cooperation should continue. Coordination has improved between probation officers, judges, public prosecutors, prison staff and other institutions before a convict is released and this should continue, as should awareness raising on the benefits of probation. No progress has been made in adopting amendments to the legal framework regarding alternative sentences and alternative procedures to increase their use. These measures are necessary to improve the resocialisation and rehabilitation of convicts and to lower the risk of re-offending, including for juveniles. No meaningful progress has been made to address the overall lack of purposeful educational, recreational and vocational activities for sentenced and remand prisoners. Educational and resocialisation services, and treatment programmes, should be run in all penitentiary facilities and educational correctional facilities. Regarding the protection of personal data, the full application of the Law on Personal Data Protection (LPDP) started in August 2021. The new law aims to align its data protection framework with the General Data Protection Regulation. Additional amendments are under preparation with a view of further alignment. Continued understaffing in the Personal Data Protection Agency (PDPA) has a serious negative impact on implementation of the law. It is also undermining the PDPA’s ability to perform its tasks effectively and independently. Despite this situation, in 2021, the PDPA carried out 304 supervisions (a 29% increase on 2020). 62 supervisions were in the public sector and the remaining in the private sector. The PDPA also received 540 complaints, of which 45% were related to alleged breaches of personal data protection rights on social networks. The PDPA issued 17 opinions on draft laws and implementing legislation and one order in the field of personal data protection. It initiated amendments to three laws in order to harmonise them with the LPDP. The PDPA is not systematically consulted on sectoral laws or implementing legislation and its advice is not always taken on board. Several improvements are needed in the field of data protection in the electoral sector. The Electoral Code brought in the use of biometric data, but the procedure did not include prior consultation with the PDPA. However, the State Election Commission addressed some of the supervision irregularities identified by the PDPA. In the reporting period, the PDPA carried out another supervisory check in the Operational-Technical Agency (OTA) into the interception of communications. Progress was made in terms of compliance with regulations on personal data protection. The OTA took action on 6 out of 12 obligations and took partial action on other obligations. Freedom of thought, conscience and religion is guaranteed by law and in practice, and discrimination on grounds of religion is prohibited. The Commission for Relations with Religious Communities and Groups is encouraged to organise inter-religious dialogue and to improve cooperation between the religious communities. ----------------------------------------------------------------------------------------------------------------

Freedom of expression North Macedonia has achieved some level of preparation/ is moderately prepared in the area of freedom of expression. Overall, it made limited progress during the reporting period to address the previous recommendations. The general context is favourable to media freedom and allows for critical media reporting although there were some tensions during the 2021 local elections. Action on self-regulation of the media should resume and produce practical results in advancing professional standards of journalism. Greater transparency is needed regarding media advertising by state institutions and political parties. The authorities need to step up their efforts to reform the public service broadcaster, ensuring its independence, professional standards and financial sustainability. The reform process of the public service broadcaster, in line with its five-year development strategy, is constrained by delays in appointing members of its programming council. The council of the Agency for Audio and Audiovisual Media Services still needs to be appointed. The labour rights of journalists still need to be addressed. Last year’s recommendations remain valid. In the coming year, the country should: ®revise the legal framework governing the media in accordance with the EU acquis and European standards, in particular by continuing work to align national laws with the revised European Directive on Audiovisual Media Services; ®step up action to implement the strategy to reform the public broadcaster and finalise appointments for the public service broadcaster's programme council and the media regulator's council; ®promptly address all instances of threats and acts of violence against journalists and ensure that the perpetrators are brought to justice. Freedom of expression and pluralistic viewpoints continued to thrive in a generally favourable overall political context. Despite this, the media reforms expected stalled due to a lack of political consensus and a shift in focus due to the COVID-19 pandemic. Challenges remain in implementing the legal framework encompassing the work of media, especially on the Law on audio and audiovisual media services. Although instances of physical and verbal violence decreased, online threats against journalists and media workers are increasing. The working conditions for media workers remain challenging, especially their labour and social rights. The authorities and the media regulator supported media outlets during the COVID-19 pandemic. The country now needs to draw up a strategy on reform of the media, with the support of all stakeholders. Intimidation of journalists In 2021, the Ministry of Interior recorded eight cases of attacks against journalists (ten cases in 2020). Criminal charges were brought in three cases (for a crime committed during a protest, a breach of copyright and related rights and an online threat). Investigations for the remaining five attacks are ongoing. The association of journalists recorded five attacks, three of them against female journalists. During the 2021 local elections, the number of incidents involving journalists increased, which was condemned by the Agency for Audio and Audiovisual Media Services and the association of journalists. The existing legal framework and commitment to international standards provided sufficient mechanisms for law enforcement authorities and the Public Prosecutor’s Office to bring perpetrators to justice. Further action is needed to ensure impartial, speedy and effective investigations. A TV station complained of prolonged financial investigations and its journalists being invited for information talks by the prosecution office. Politicians from all levels of governance and public officials should constantly set an example of high standards for the respect of freedom of media in their interactions with journalists. Online harassment and verbal attacks on journalists, notably on social media, have continued. Old cases of physical attacks against journalists remain unresolved. Legislative environment In 2021, the authorities and the media regulator continued supporting the media to alleviate the impact of the COVID-19 pandemic. The process of alignment of the Law on audio and audiovisual media services with the EU acquis needs to continue. In September 2021, Parliament adopted amendments to the Electoral Code related to the media and to paid political advertising. The OSCE/ODIHR report on the local elections recommended that regulations on paid political advertisement in th