EUROPEAN COMMISSION Strasbourg, 19.10.2021 SWD(2021) 292 final COMMISSION STAFF WORKING DOCUMENT



Kosovo* 2021 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 2021 Communication on EU Enlargement Policy











(*

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





{COM(2021) 644 final} - {SWD(2021) 288 final} - {SWD(2021) 289 final} - {SWD(2021) 290 final} - {SWD(2021) 291 final} - {SWD(2021) 293 final} - {SWD(2021) 294 final}



Table of Contents 1. Introduction 1.1. Context 1.2. Summary of the report 2. The Fundamentals of the Accession Process 2.1. Functioning of democratic institutions and Public Administration Reform 2.1.1 Democracy 2.1.2 Public administration reform 2.2 Rule of law and fundamental rights 2.2.1 Judiciary and fundamental rights 2.2.2 Justice, freedom and security 2.3. Economic development and competitiveness 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 Public procurement Statistics Financial control 3. Good neighbourly relations and regional cooperation

4. Normalisation of relations between Kosovo and Serbia 5. European standards 5.1. Internal Market 5.1.1. Free movement of goods 5.1.2. Movement of workers, services and right of establishment 5.1.3. Free movement of capital 5.1.4. Company law 5.1.5. Intellectual property law 5.1.6. Competition 5.1.7. Financial services 5.1.8. Consumer and Health Protection 5.2. Competitiveness and inclusive growth 5.2.1. Information society and media 5.2.2. Taxation 5.2.3. Social policy and employment 5.2.4. Enterprise and industrial policy 5.2.4. Science and research 5.2.5. Education and culture 5.2.5. Customs 5.3. The Green Agenda and sustainable connectivity

5.3.1. Transport policy 5.3.2. Energy 5.3.3. Trans-European Networks 5.3.4. Environment and climate change 5.4. Resources, agriculture and cohesion 5.4.1. Agriculture 5.4.2. Food safety, veterinary and phytosanitary policy 5.4.3. Fisheries 5.5. External relations 5.5.1. Trade issues Annex I – Relations between the EU and Kosovo



1. Introduction 1.1. Context The EU-Kosovo Stabilisation and Association Agreement (SAA) has been in force since April 2016. A second phase of the European Reform Agenda (ERA) was launched in October 2020, to further guide the implementation of EU-related reforms under the SAA framework. The authorities continued to demonstrate publicly their commitment to Kosovo advancing on its European path. The Commission’s proposal to lift the visa requirements for Kosovo citizens is still pending in the Council. The Commission maintains the assessment it made in July 2018 that Kosovo has fulfilled all visa liberalisation benchmarks. The European Parliament reconfirmed its support for the Commission’s proposal for visa liberalisation. The EU-facilitated dialogue on normalisation of relations between Kosovo and Serbia continued with meetings at leaders’ and chief negotiators’ level. The COVID-19 pandemic continued throughout the reporting period, following similar patterns across the region. By end of September 2021, Kosovo had recorded around 159 000 cases and over 2 900 deaths related to the pandemic. Around 24.6% of the population was fully vaccinated. The authorities responded by re-introducing public health containment measures, as well as by acquiring additional medical equipment to tackle the emergency, as the health system came under serious strain. In order to mitigate the severe economic and social impact of the crisis, Kosovo adopted two fiscal packages during the reporting period. Kosovo started its vaccination campaign at the end of March 2021, when it received its first COVID-19 vaccines. By early September 2021, Kosovo had reiceved a total of 1.2 million doses, including through the COVAX initiative, donations from the EU and other partners, as well as via direct procurement.

1.2. Summary of the report In terms of political criteria, most of the reporting period was marked by political instability in Kosovo. Following early parliamentary elections in February 2021, a new government took office, with an unprecedentedly strong parliamentary majority. During most of the reporting period, legislative activities were limited due to this political instability, including EU-related reform efforts. The adoption of a second phase of the European Reform Agenda (ERA 2) and its Action Plan, endorsed by the Assembly in October 2021, and a solid government focus, confirmed the positive trend of Kosovo’s renewed commitment to EU-related reforms. After a Constitutional Court decision of December 2020 invalidated the election of the previous government in June 2020, the Assembly was dissolved and early elections were held in February 2021. Following the landslide victory of an opposition alliance led by the party Vetëvendosje, the new Assembly majority approved a new government in March 2021. In November 2020, Kosovo’s President in office was indicted and he was arrested on charges of war crimes and crimes against humanity by the Specialist Prosecutor’s Office. He subsequently resigned from office. The then Assembly Speaker became acting President, in line with the Constitution, before being elected by the new legislature to serve a full presidential term in April 2021. For a large part of the reporting period, the polarised political atmosphere, the lack of an effective government majority and the lack of a quorum severely affected decision-making in the Assembly. There is a need for the Assembly to improve its regulatory framework, including the rules of procedure. The Assembly remained open during the pandemic, while maintaining health protection measures. Overall, the legislative elections of February 2021 were well-administered, transparent and competitive, despite several shortcomings. Kosovo’s electoral process remains in need of comprehensive strengthening to address long-standing weaknesses throughout the electoral cycle, as identified in successive EU election observation missions since 2014. Strengthening the legal and institutional framework on campaign and political party financing remains a pending area in need of reform. The situation in the north of Kosovo remains challenging, in particular in terms of corruption, organised crime, and the conditions for freedom of expression. There is some level of preparation in the area of public administration reform, but there was no progress on this front during the reporting period, given the frequent government changes. The Law on Public Officials entered into force in June but no significant efforts were made to start its implementation especially with regard to recruitments. The establishment of an effective central recruitment department was delayed. Undue political influence over appointments and dismissals of senior public functionaries and civil servants has been observed in some instances and Kosovo has met only some of its commitments to merit-based criteria. It made no progress in addressing the inequalities in the public sector salary system. The process to streamline agencies has stalled. Legal uncertainty for businesses and individuals persists due to the continued lack of progress on harmonising sectorial legislation with the Law on General Administrative Procedure. A renewed commitment to public administration reform is urgent. Kosovo is still at an early stage in developing a well-functioning judicial system. The overall administration of justice continues to be slow, inefficient and vulnerable to undue political influence. Some progress was made during the reporting period. The Functional Review of the Rule of Law Sector resulted in a Rule of Law Strategy and Action Plan, which outlines the main challenges in the rule of law system and was adopted in August 2021. Kosovo rolled out an electronic case‑management system and set up a central criminal records system, however challenges remain. It has made efforts to implement the Law on mediation. The COVID-19 pandemic affected effective case processing and the holding of (and public access to) court hearings in Kosovo. The new government has been considering several options for a process of ‘vetting’ of the judiciary and prosecution. In this context, the potential introduction of a one-off full re-evaluation of all prosecutors and judges is a source of serious concern. Such a process should be considered only as an exceptional measure of last resort, once all existing tools and mechanisms to ensure integrity and fight corruption of judicial officeholders have been exhausted, and should be in line with European and international standards as well as with Venice Commission advice. Kosovo is at an early stage/has some level of preparation in the fight against corruption. During the reporting period, limited progress was made, including on the investigation and prosecution of high-level cases in the track-record. Sustained efforts are needed to achieve more proactive investigations, final court decisions and final confiscation of assets. The Special Prosecution Office was strengthened as the Corruption and Financial Crime Department became operational and it achieved an overall increase in staffing levels. The anti-corruption legal package and the revised Criminal Procedure Code still need to be adopted. The legal framework on confiscation is in force but is not being consistently applied, and the value of finally confiscated assets remains low. Overall, corruption is widespread and remains an issue of serious concern. Despite efforts made, there is a need for strong and continual political will to effectively address systemic corruption risks, as well as a robust criminal justice response to high-level corruption. Kosovo is at an early stage in the fight against organised crime. It made limited progress during the reporting period on the investigation and prosecution of organised crime cases. The Special Prosecution Office was strengthened with additional specialised staff and targeted training activities took place. However, the powerful tools envisaged by the Criminal Code and the Law on extended powers of confiscation are yet to be fully utilised by police and prosecutors. Measures are needed to strengthen the prosecution as well as to ensure that there is no political interference in the operational activities of all law enforcement bodies. In July 2020, Europol and the Kosovo Police concluded a Working Arrangement. The additional agreements necessary to operationalise this cooperation, allowing for access to the Secure Information Exchange Network Application (SIENA) and the exchange of Liaison Officers, were finalised in September 2021. Progress was made in the fight against terrorism, in line with the objectives set out in the EU-Kosovo implementing arrangement for the Joint Action Plan on counter-terrorism for the Western Balkans, especially with regard to the rehabilitation and reintegration of foreign terrorist fighters and their families. The Kosovo authorities need to be more effective in their efforts to combat money laundering and the applicable law should be brought in line with EU acquis and with international standards. The legal framework broadly guarantees the protection of human and fundamental rights in line with European standards. However, additional efforts remain needed to fully implement it and to improve coordination and oversight of fundamental rights policies and legislation. Authorities still depend on donor support and guidance, and need to assume greater ownership. More needs to be done to effectively guarantee the rights of persons belonging to minorities, including Roma and Ashkali and displaced persons, to ensure gender equality in practice, and to advance the protection of cultural heritage. As regards freedom of expression, Kosovo has some level of preparation and benefits from a pluralistic and lively media environment. Concerns remain, however, regarding public smear campaigns, threats and physical attacks on journalists. The lack of financial self-sustainability, further exacerbated by the COVID-19 pandemic, leaves the media vulnerable to political and business interests. The public broadcaster also remains vulnerable to political influence and a sustainable solution for its funding still needs to be found. The Kosovo authorities continued to make progress in managing both regular migration and mixed migration flows in the difficult context of the COVID-19 pandemic. Kosovo further increased its accommodation capacity and stepped up preparedness to handle an increased influx of migrants. As regards the economic criteria, Kosovo has made limited progress and is at an early stage of developing a functioning market economy. The economy plunged into recession in 2020, but this trend was reversed in the first half of 2021. Long-standing structural problems, such as the lack of economic diversification and the dependence on financial flows from the diaspora made Kosovo very vulnerable to the pandemic-related lockdown and travel restrictions. In response to the crisis, the authorities suspended the fiscal rule and adopted two fiscal packages. A strong increase in spending and shrinking tax revenues resulted in a large budget deficit in 2020 but recovery in tax revenue helped achieve a budget surplus in the first half of 2021. The business environment saw little improvement. Private sector development remains constrained by a widespread informal economy, a slow and inefficient judiciary, a high prevalence of corruption and the overall weak rule of law. Kosovo has made limited progress and is at an early stage in terms of capacity to cope with competitive pressure and market forces in the EU. Little progress was made on improving the quality of education and addressing skill gaps in the labour market. Kosovo made some progress in improving road infrastructure and increasing investment in renewables, but the coal-based, outdated and unreliable energy supply remains a concern. Kosovo made some progress as regards the digitalisation of the economy. Structural changes are emerging only slowly as the economy remains highly reliant on small and very small firms which cannot compete internationally, while the export structure remains dominated by a few products, such as base metals. As regards good neighbourly relations and regional cooperation, Kosovo continued to participate in most regional fora. Kosovo maintained overall good relations with Albania, Montenegro and North Macedonia. There has been no change in Kosovo’s formal relations with Bosnia and Herzegovina, which does not recognise Kosovo’s independence and the two maintain a strict visa regime. Regarding the normalisation of relations with Serbia, the EU-facilitated dialogue continued with high-level meetings on 15 June and 19 July 2021, as well as three chief negotiators’ meetings. During the reporting period both parties appointed new chief negotiators and negotiating teams. Kosovo needs to engage constructively and make further substantial efforts on the implementation of all past agreements and contribute to reaching a comprehensive legally binding normalisation agreement with Serbia. Such an agreement is urgent and crucial so that Kosovo and Serbia can advance on their respective European paths.

As regards alignment with European standards, some progress was made during the reporting period in the areas of public procurement, statistics and financial control. In most of the areas covered by Cluster 2 on internal market, Kosovo has some level of preparation namely the free movement of goods, capital, company law and intellectual property, whereas it is moderately prepared on movement of workers, services and right of establishment, and on financial services. Kosovo is at an early stage of preparation on competition, as well as on consumer policy and health protection. In the reporting period, Kosovo made some progress in all areas except on consumer policy and health protection, where only limited progress was made. In the area of competitiveness and inclusive growth, it made some progress in most areas (customs, taxation, information society and media, enterprise and industrial policy), but made only limited progress on research and education and culture. It made some progress on policy areas related to the Green Agenda and sustainable connectivity, in the energy sector, but only limited progress in the areas of transport, environment and climate change. In the field of resources and agriculture, it made only limited progress on agriculture, food safety, veterinary and phytosanitary policy. In trade policy, some progress was made in reducing Kosovo’s trade deficit, but Kosovo has not yet ratified the CEFTA additional protocols on trade facilitation and trade in services. Overall, Kosovo needs to improve its administrative capacity and coordination, across all sectors, to achieve effective implementation of the EU acquis. 2. The Fundamentals of the Accession Process 2.1. Functioning of democratic institutions and Public Administration Reform 2.1.1 Democracy The reporting period was marked by political instability and by early parliamentary elections, the third one in less than four years. In this context, most legislative activities, including EU-related reform efforts, were constrained. In December 2020, the Constitutional Court invalidated the June 2020 election of the government of Prime Minister Hoti, and requested the dissolution of the Assembly and the holding of early elections, which subsequently took place on 14 February 2021. The elections were overall well-administered, despite shortcomings, and delivered a landslide victory to the opposition Vetëvendosje party. The new Assembly majority approved a new government led by Albin Kurti in March 2021. Kosovo’s President in office, Hashim Thaçi, was indicted and arrested on war crimes charges by the Specialist Prosecutor’s Office and resigned from office in November 2020. Then Assembly Speaker Vjosa Osmani became acting President, in line with the Constitution. Osmani was ultimately elected to a full presidential term by the new legislature in April 2021. Several opposition parties (PDK, AAK and Srpska Lista) boycotted the presidential election procedure in the Assembly. Elections The early legislative elections held in February 2021 were overall well-administered, transparent and competitive. However, significant vulnerabilities, in particular with regard to vote-counting, the process of out-of-Kosovo voting and handling of complaints were evident. In Kosovo Serb areas, the campaign was more subdued, with almost no visible campaign activities by parties other than the dominant Kosovo Serb political party, Srpska Lista. Kosovo’s electoral process remains in need of comprehensive strengthening, effectively addressing long-standing weaknesses throughout the electoral cycle, as identified in successive EU election observation missions since 2014. The strengthening of the legal and institutional framework on campaign and political party financing remains outstanding. Following a ruling by the Constitutional Court in December 2020, which declared the Assembly’s election of the government led by Prime Minister Avdullah Hoti as unconstitutional, early general elections were held in Kosovo on 14 February 2021. The election delivered a landslide victory to the opposition Vetëvendosje party, which received 50.3% of votes cast, winning 58 seats in the Assembly. The Democratic Party of Kosovo won 19 seats (17.0%), while the former governing parties, the Democratic League of Kosovo (12.7%) and the Alliance for the Future of Kosovo (7.1%) won 15 and 8 seats respectively. Srpska Lista won all 10 seats reserved for the Kosovo Serb community with 5.1% of the total votes. The remaining 10 seats in Kosovo’s 120 seat Assembly are shared between nine political parties representing Kosovo’s Turkish, Bosniak, Roma, Ashkali, Egyptian and Gorani communities. Overall voter turnout was 48.8% (compared with 44.5% in 2019). The elections were competitive, and campaign freedoms were generally respected. There was a vibrant campaign except in Kosovo Serb majority areas, where campaign activities of opposition parties to Srpska Lista were barely visible. Despite a very short timeframe and challenges caused by the COVID-19 pandemic, the elections were well-administered and conducted in a transparent manner, although problems with out-of-Kosovo voting reduced confidence in part of the process. The de-certification of a number of candidates due to their convictions in the last three years – including the head of the Vetëvendosje list, Albin Kurti – caused controversy and underlined the need to harmonise the relevant Kosovo legal and constitutional provisions, in line with international standards. Election day was assessed by observers as orderly, and voters participated in high numbers. However, as with previous elections, a large number of recounts were ordered due to discrepancies in the results protocols (especially regarding the number of preferential votes), delaying the final results. Results concerning several seats reserved for the Bosniak and Roma communities were appealed by competing non-majority parties. The Electoral Complaints and Appeals Panel partially accepted the complaints and annulled a number of votes from Serb-majority areas, arguing that the principle of guaranteed seats for the representation of each non-majority community had not been respected. These decisions, confirmed by the Supreme Court, resulted in two of the accused political entities losing one seat each. More women candidates were positioned in the first places in the political parties’ lists and are increasingly gaining positions of responsibility within the parties. However, they still did not receive equal financial or logistical support for their campaigns. On 17 October 2021 local elections were held in Kosovo, with an EU Election Observation Mission deployed that will issue an assessment after the elections. The electoral legal framework remains essentially unchanged since 2010, despite the recommendations of multiple EU election observation and expert missions. Significant shortcomings remain, which continue to lead to inconsistent and selective implementation of electoral rules, including by the CEC and the courts. This impacts on important aspects of the election process, such as candidate certification, voter registration and the election results. Almost all prior EU recommendations remain unaddressed. Despite a joint commitment undertaken by the Kosovo assembly parties in 2019 to address the shortcomings of the electoral process in line with recommendations of the electoral observation missions, the Assembly failed to establish an ad hoc parliamentary committee on these matters. A short-lived initiative by the new majority in April 2021 to push through changes to the rules governing out-of-Kosovo voting was abandoned following intense criticism, including by civil society. The new legislature should establish without further delay the ad hoc committee in order to address the shortcomings comprehensively and in a cross-party manner. On 14 June 2021, the President of Kosovo dismissed and replaced the Chairwoman of the CEC, accusing her of having violated the principles of impartiality, independence and integrity in carrying out her work. The Chairwoman rejected all the accusations, and the dismissal decision was strongly criticised by opposition parties and parts of the civil society as being politically motivated.

Parliament For a large part of the reporting period, a polarised political atmosphere, a lack of effective government majority and of quorum severely impacted decision-making in the Assembly. In general, the Assembly needs to improve its performance as a forum for constructive political dialogue and representation, as well as guarantee proper checks and balances. It urgently needs to reinforce its functioning, to exercise its legislative function and an effective oversight of the executive. The new legislature needs to improve its regulatory framework, including rules of procedures. The Assembly remained open during the pandemic crisis, while maintaining sanitary protection measures. The preceding (seventh) legislature lasted only one year, until December 2020. It adopted only 17 laws out of which twelve were ratification of international agreements. The remaining ones were mainly financial bills. It took several months and seven failed attempts for the Assembly to adopt the Law on Economic Recovery, meant to mitigate the economic consequences of the COVID-19 crisis. Its deliberations were further marred by frequent absences of MPs from the Assembly proceedings, and procedural irregularities. Following the early elections of 14 February 2021, the new (eighth) legislature of the Assembly of Kosovo was constituted on 22 March. Glauk Konjufca (Vetëvendosje) was elected Speaker of the Assembly the same day, prior to the election with 67 votes of the new government led by Prime Minister Albin Kurti. The government is based on a coalition between Vetëvendosje and individual non-majority community political representatives and enjoys a stable majority. The eighth legislature has the highest number of women MPs (40) since 2008; only a few needed the legal quota (one third) to be elected. Out of the fourteen functional committees of the Assembly, eight are chaired by women. As regards parliamentary inquiries, the seventh legislature formed three ad hoc parliamentary committees, on the management of the COVID-19 pandemic, on the privatisation process and on the licensing of hydropower-plant construction. However, due to the dissolution of the Assembly none of the committees was able to finalise their reports. The Assembly’s Committee on Oversight of Public Finances reviewed the reports provided by the Office of the Auditor General, but there was no effective follow up. In September 2020, the Assembly appointed a new Ombudsperson. In August 2021, it elected a new Auditor General, upon the proposal of the President of Kosovo. During the first months of its new legislature, the Assembly initiated changes to the management of several publicly owned enterprises, agencies and institutions. New boards and personnel should be appointed in line with transparent and merit-based procedures. The parliamentary oversight of the executive as well as of other institutions continues to remain weak. The Assembly Presidency needs to develop a meaningful strategic plan and allocate sufficient budget to enhance the Assembly’s administrative capacities and human resources in order to strengthen existing parliamentary instruments for oversight of the executive and other independent institutions. The financing and expenditures of political parties and electoral campaigns remains non-transparent and the existing legal framework is mostly not enforced. Legislative amendments tabled by the previous government, were debated but not adopted. Independent oversight and accountability mechanisms, effective enforcement and sanctions remain necessary. Timely publication of parties’ accounts needs to be ensured. The new government should work with all parties and civil society to ensure that comprehensive reforms are adopted, building on work done previously and on the basis of the Venice Commission guidance. Governance During the first half of the reporting period, in a context of political instability and COVID-19 pandemic, only limited progress was made in further implementing EU-related reforms. A second phase European Reform Agenda was launched in October 2020. In May 2021, the new government of Prime Minister Kurti adopted its programme, which prioritises the management of the COVID-19 pandemic and its consequences, as well as the fight against corruption and ambitious plans for longer-term economic and social reforms. The government committed to implementing the second phase of the European Reform Agenda through a dedicated action plan adopted in August 2021 and endorsed by the Assembly in October 2021. In pursuing its reform objectives, it is essential that the government builds on existing achievements and commitments, while acting in line with European standards. Deadlines and obligations set out in the Stabilisation and Association Agreement must be respected. The previous government led by Prime Minister Avdullah Hoti (LDK) was elected in June 2020 with 61 votes, after the preceding short-lived coalition between Vetëvendosje and LDK collapsed in March 2020. The Hoti government lacked a workable majority, and was faced systematically with a lack of quorum in the Assembly. Under such circumstances, it was unable to implement a legislative agenda and only limited progress was made in implementing reform commitments under the Stabilisation and Association Agreement (SAA), the European Reform Agenda (ERA), for which the second stage was launched, and the Economic Reform Programme. After months of delay, the government managed to find a compromise in the Assembly to pass a new Law on Economic Recovery from the COVID-19 pandemic. Following early legislative elections, the new government led by Prime Minister Albin Kurti was sworn into office on 22 March. The government includes three deputy prime ministers, 14 ministers and 23 deputy ministers. Out of 18 government members, six are women, including two deputy Prime Ministers. The new government, which enjoys an unprecedentedly strong majority, adopted its programme in May 2021. The programme focuses on the management of the COVID-19 pandemic and on the economic recovery, and features a strong focus on fighting corruption, economic crime, as well as economic and social reform measures. Most of the specific measures remain to be designed in more detail. It is essential that policy initiatives build on Kosovo’s previous reform achievements and be subject to appropriate consultations and impact assessments. The government presented an action plan to implement the second phase of the European Reform Agenda, launched by the preceding government, and subsequently adopted in August 2021 and endorsed by the Assembly in October 2021. In June 2021, the government adopted a draft amended budget, focused on the management of the pandemic and economic recovery, as well as several draft laws relevant to the EU acquis, which remain to be examined by the Assembly. During its first months in office, the government has also initiated changes to the oversight or management of several publicly owned enterprises, agencies and institutions. Any dismissal of boards should respect established procedures, and the appointment of new boards and personnel should be transparent and merit-based. Government structures tasked with the coordination of EU-related affairs were altered during the reporting period. Following the decision of the Hoti government to dissolve the Ministry of European Integration and resultant delays, EU-related coordination functions were eventually integrated in the Office of the Prime Minister, retaining EU expertise, staff and experience. Later, the subsequent Kurti government set up inter-institutional coordination structures for the European integration process under the leadership of the first Deputy Prime Minister, composed of a ministerial council, working committee and sectoral working groups to prepare decision-making for the implementation of EU-related reforms. Coordination, planning and monitoring of donor assistance as well as project preparation needs to be further strengthened, in order for Kosovo to effectively benefit from opportunities under the next phase of the Instrument for pre-Accession (IPA III) and the newly launched EU Economic and Investment Plan for the Western Balkans. As regards local government, public services of the municipalities were highly disrupted by the COVID-19 pandemic. Significant disparities between municipalities in their performance and service delivery continue and financial constraints undermine municipalities’ ability to carry out their local democratic mandates. Due to their limited budgetary powers, municipal assemblies do not play a strong oversight function over the municipal executive. Municipal administrations remain subject to undue political influence. No progress was made in legislative reforms necessary to realign funding and competences between central and local governments, better define the financing of municipalities based on clear, fair and transparent criteria and to create a specific grant for social services. Central government ministries should define and apply rule based, fair and transparent criteria when allocating funds to local governments. The municipal performance grant, established by the Ministry of Local Government Administration, is a good model to ensure non-politicised grant disbursement. The Consultative Forum on Local Government comprised of 19 civil society organisations was established in 2020 as a platform to deliberate and consult on local governance issues. Overall, cooperation between civil society and local governments is increasing.

Women remain underrepresented in local government decision-making and there are currently no female mayors in any of Kosovo’s municipalities. Municipal assembly and mayoral elections are scheduled for 17 October 2021. Civil society Civil society continue to operate, overall in an enabling environment. Civil society and the government should continue to further improve their cooperation and enhance the ability of civil society to contribute meaningfully to public policy development. Efforts remain necessary to enhance the transparency of public funding for civil society organisations (CSOs), as well as to ensure that legal requirements stemming from the Law on the Prevention of money laundering and terrorist financing do not put undue limitations on the financial viability of low-risk CSOs. Civil society is a crucial component of any democratic system and continues to be recognised as such by the public institutions. During the pandemic, Kosovo’s civil society has continued to be played an important role, particularly at the local level. Civil society organisations continue to support directly the design and implementation of EU-related reforms. Organisations and their members are, overall, free to exercise their rights of association, assembly and to critically express their views without undue pressure from public authorities, including those promoting civil, political, economic, social and cultural rights. Implementing legislation to implement the 2019 law on freedom of association in NGOs still have to be adopted, in order to ease the organisations’ registration process. There was limited progress regarding the government strategy for cooperation with civil society for the period 2019-2023 and its action plan. The schedule of structured working group meetings between the government and civil society have been disrupted due to the COVID-19 restrictions. The human and financial resources to implement the strategy plan remain limited and continue to rely excessively on donor co-financing. Public consultations of government acts continue to be launched regularly by ministries. The latest government annual report on public consultation shows that some ministries are not organising consultations in accordance with the relevant regulation. At local level, consultations in municipalities are integrated into the general Online Platform for public consultation, yet implementation is still nascent. Awareness initiatives are needed to encourage citizens to participate in consultative processes at central and local level. Despite some improvements, public funding of CSOs remains at risk of corruption and conflict of interest. Public funding for civil society continues to be reported annually and made publicly accessible. Basic information about funding authorities, recipient bodies and amount disbursed should be complemented with data about funded projects and sectors. A revision of the current regulation of public funding to NGOs to address key bottlenecks identified during the first three years of implementation should be initiated in 2021. The revision of the Law on the Prevention of Money Laundering and Combating Terrorist Financing, which limits access to banking services and undermines the financial viability of CSOs, is still pending. An updated sectoral risk assessment of the civil society sector remains necessary in order to allow for a flexible approach to lower-risk CSOs (see sections on the fight against organised crime and on the free movement of capital). The legislation on tax exemption and related administrative procedures should be harmonised. The enabling environment for volunteering needs to be improved, including by putting in place an appropriate legislative framework aligned to international standards. Financial resources for youth volunteering programmes should be allocated, taking into account demand and availability. 2.1.2 Public administration reform Kosovo remains at some level of preparation in the reform of its public administration. No progress was made in implementing last year’s recommendations due to the frequent changes of government that affected the functioning of the public administration and slowed down the implementation of reforms. The Law on Public Officials entered into force in June 2020 but no significant efforts were made to start its implementation especially with regard to recruitment. The establishment of an effective central recruitment department was delayed and its capacity remains limited. Undue political influence over appointments and dismissals of senior public functionaries and civil servants has been observed in some instances, and commitments to merit-based criteria have been only selectively respected. The inequities of the public salary system remain, and no further progress was made in this regard. The organisation and accountability of the administration has marginally improved with first steps being taken to align internal organisation with the law in force. However, most internal regulations governing the functioning and accountability of institutions remain in need of alignment with the law. The process of rationalising agencies has stalled due to strong institutional resistance and lack of political leadership to overcome it. Legal uncertainty for businesses and citizens persists due to the continued lack of progress on harmonising sectorial legislation with the Law on General Administrative Procedure. Renewed commitment to the public administration reform and its diligent implementation is urgently necessary in order to make progress in this area. As last year’s recommendations were not sufficiently implemented, they remain valid. In the coming year, Kosovo should in particular: ®start the effective implementation of the Law on Public Officials in line with the Constitutional Court ruling; ®align contradictory special laws with the Law on General Administrative Procedures and address the current backlog of administrative court cases; ®increase accountability in the public sector by implementing the action plan on the rationalisation of agencies and creating a clear framework for managerial accountability and the delegation of responsibilities in public institutions, in line with the new Law on Organisation and Functioning of State Administration and Independent Agencies; ®ensure full respect for merit-based recruitment and dismissal of public officials, especially senior management.

Strategic framework for public administration reform Overall progress on implementing reforms in this area slowed down significantly due to the political situation, elections and frequent changes of government. Kosovo has three public administration reform strategies: on modernisation of the public administration, on policy planning and coordination and on better regulation, ending in 2021. While monitoring of the three strategies has been further improved with the introduction of a uniform methodology for reporting against indicators, there has been a limited actionable follow up. Linking strategic priorities with government budgeting has improved. Kosovo should start working on a single overarching public administration reform strategy to replace the three strategies. Civil society continues to monitor the government’s reform efforts. The implementation of the 2016-2020 public financial management reform strategy continued, while work on a new strategy (2021-2025) has yet to commence. Policy development and coordination As regards the policymaking system, the government adopted a roadmap for the development of a new National Development Strategy (2021-2030). This should provide a clear hierarchy of objectives, improved performance measurement with clear targets linked with medium-term policy planning and budgeting and increase managerial accountability. The successful incorporation of the former Ministry of European integration into the central policy planning structures within the Office of Prime Minister (OPM) is key for advancing policy planning and coordination reforms. The OPM has to ensure strong quality control and monitoring to support implementation. Limited progress was made in further enhancing inclusive and evidence-based policy and legislative development. There is a need for a stronger centre-of-government role in ensuring quality control of regulatory and budget impact assessments. Public consultations continue to be organised regularly but not systematically. The minimum standards for such consultations should be followed more consistently. In 2020, more than 98% of all primary policy documents and draft laws were published for consultation on the web portal. The ability of the public to scrutinise government work needs to be enhanced by a more user-friendly presentation of data available on the Open Data Portal. The number of data sets available on the platform increased to 205 in 2020 (compared to 195 in 2019). Consistent implementation of the Law on Access to Public Documents remains necessary, as well as the appointment of data contact points within the administration. Parliamentary scrutiny of the government remains inadequate (see section 2.2.1 Democracy). Public finance management A new public finance management (PFM) reform strategy should be drafted as the previous one expired in 2020. Public procurement and public internal financial control are to be part of this new strategy. There is currently an action plan in place covering 2021. The repeat Public Expenditure and Financial Accountability (PEFA) assessment, undertaken in 2021, showed in general terms that the management of public finance in Kosovo is good, compared both internationally and regionally. The new PFM strategy should address the weaknesses identified in these assessments and aim for alignment with the National Development Strategy under development, by integrating national development priorities into the medium-term expenditure framework and the budget planning process. In the area of public procurement, expansion of functioning e-procurement modules and increased linkages between this system and the Kosovo financial management information system will assist in commitment control and proper budget implementation. Procurement contract implementation, however, remains prone to irregularities and vulnerable to corruption. Domestic revenue collection decreased during 2020 due to the COVID-19 pandemic. (see also sections on public procurement, taxation, customs and financial control) In the area of budget transparency, citizen-friendly budgets continued to be published, and information on budget implementation is now also available on the fiscal transparency portal of the government. A theft using the Treasury’s financial management information system spurred an increase in security put in place for that system. There is still a need for the Ministry and the related bodies to look at further measures to ensure better interconnectedness and security of their IT-systems. Public service and human resource management The merger of the Ministry for Public Administration and the Ministry of Internal Affairs resulted in reduced political leadership on public administration reform and has undermined the efficacy, capacity and working processes for the implementation of public administration reforms. The public service framework consists of the Law on Public Officials, which entered into force in June 2020 and is aimed at ensuring better merit-based recruitment, promotion and dismissal of civil servants. Following a Constitutional Court challenge of the Law, Kosovo is required to amend some of its provisions. The required amendments have not yet been adopted, leaving the law un-implementable for independent institutions. Delays in setting up the necessary central management structures for public officials within the Ministry of Internal Affairs and endowing it with the necessary staff and capacities have hampered the implementation of the new public officials’ management system. No recruitment to state administration institutions has taken place since the law entered into force. Political influence over appointments and dismissal of senior civil servants remains a concern. Non-majority communities remain under-represented in central public institutions and women are still highly under-represented in senior positions. Following concerns over political influence and non-merit based appointments by the Independent Civil Service Oversight Board, in June 2021 the new legislature took the decision to dismiss the board, citing irregularities. This leaves the institution without decision-making powers and a new board should be appointed swiftly in line with transparent and merit-based procedures. The Constitutional Court struck down the Law on Salaries in its entirety in June 2020. This decision leaves Kosovo without a comprehensive legislation to regulate remuneration in the public sector to overcome the unfair salary structures, abuse of allowances and discretionary decision-making. No progress has been made on that since the Court ruling. The Kosovo Institute for Public Administration is the main training provider for civil servants in the central and local administration. Training provision remains largely dependent on donor funding due to limited funding provided to the Institute. The resultant weak training provision undermines the professional development of civil servants. New regulations on performance appraisals were adopted in October 2020, but no effective performance management system is in place. Integrity plans exist to promote integrity in the public service but implementation remains limited. The Law on Conflict of Interest should be fully implemented. The full implementation of the Law on Protection of Whistle-Blowers is impeded by the lack of secondary legislation. Reporting on disciplinary measures taken against civil servants is being published regularly. (see section on the fight against corruption) Accountability of the administration The new Law on Organisation and Functioning of State Administration and Independent Agencies clarifies and strengthens lines of accountability but implementation remains weak. Most agencies and ministries are yet to align their internal organisation with the legal framework. Managerial accountability needs to be significantly strengthened by linking individual performance more clearly to organisational objectives and policy plans, and an effective delegation of decision-making responsibilities. There have been no further developments on the implementation of the action plan on rationalisation of agencies. The new government should clearly indicate its plans in this regard.

The independent oversight institutions, especially the Ombudsperson and the Kosovo National Audit Office, continue to address citizens’ right to good administration but implementation of the recommendations by the relevant institutions remains limited. Public access to information is regulated by the Law on Access to Public Documents, though implementation was undermined by long delays in appointing a Head of the Information and Privacy Agency, which finally happened in May 2021. The judiciary needs to increase its efficiency in handling administrative disputes in order to ensure citizens’ right and access to administrative justice. The Basic Court in Pristina still struggles with a large backlog of administrative cases, as well as many incoming minor offence cases. The backlog in administrative cases was 1,993 by the end of August 2021, likely due to the courts only dealing with urgent cases during the COVID-19 pandemic. The liability of public authorities in cases of wrongdoing and the right to seek compensation are affected by fragmented legislation. Service delivery to citizen and businesses There is no coherent, centrally driven policy on user centred public service delivery. Institutional responsibilities for policy development on public service provision need to be clarified and effective coordination mechanisms at the centre-of-government level is lacking. An ‘eKosova’ portal exists, however in order to become an effective single point of contact for citizen and business, the inter-institutional data exchange platform should be further enhanced and outstanding legal, operational and technical challenges addressed. An electronic signature authentication function should be created. Progress towards simplification of administrative procedures has slowed. With the adoption of the Law on General Administrative Procedures, special regulations addressing different administrative rules and procedures were supposed to be aligned. The legislation that requires harmonisation has been identified, together with the institutions responsible for alignment. However, the repeated changes in government have stopped legislative alignment. Considerable efforts are needed to uphold the legal obligations and rights under the Law and ensure legal certainty for citizen and businesses. 2.2 Rule of law and fundamental rights 2.2.1 Judiciary and fundamental rights Kosovo is at an early stage in/has some level of preparation for applying the EU acquis and the European standards in the area of the judiciary and fundamental rights. Limited progress regarding the judiciary and prosecution has been made, including in functioning of the judiciary and the investigation and prosecution of some organised crime and high-level corruption cases. The capacity of the judiciary and prosecution, including for handling cases in a timely manner remains weak. As regards fundamental rights, the government needs to ensure oversight of the implementation of legislation, streamlining of strategies and better coordination of policies. The new Deputy Prime Minister for human rights and minorities represents an opportunity for better coordination in this area, to ensure all institutions uphold fundamental rights. Functioning of the judiciary Kosovo is still at an early stage in developing a well-functioning judicial system. The overall administration of justice continues to be slow, inefficient and vulnerable to undue political influence. Some progress was achieved during the reporting period. As regards last year’s recommendations, advances were made, as the Functional Review of the Rule of Law Sector resulted in the adoption of a Rule of Law Strategy and Action Plan, which outlines the main challenges in the rule of law system. Kosovo rolled-out an electronic case‑management system and offset-up a central criminal records system, however challenges remain. Kosovo has made efforts to implement the Law on Mediation. The Ministry of Justice has prepared a concept document that would serve as the basis for a vetting of judges and prosecutors. A potential one-off full re-evaluation of all prosecutors and judges is a serious concern. Such a process should be considered only as an exceptional measure of last resort, once all existing tools and mechanisms to ensure integrity and fight corruption of judicial officeholders have been exhausted, and should be in line with European and international standards as well as Venice Commission advice. Existing tools and strategies have yet to be fully utilised and their improvement should first be explored thoroughly. Before any new mechanism is set up, the effectiveness and implementation of existing tools should be analysed and improved, including through legislative changes. In the coming year, Kosovo should in particular: ®improve the effectiveness and implementation of the existing tools to ensure integrity in the judiciary (asset-declaration system, disciplinary proceedings and evaluations), including through legislative changes as needed. Ensure that any new accountability mechanism is set up only as a measure of last resort and is in line with European and international standards, in particular Venice Commission opinions; ®implement the Rule of Law Strategy and Action Plan without delay through a regular, structured and unified process; ®step up efforts to reduce the backlog of cases, based on a digitalisation strategy, including the generalised use of the Case Management Information System (CMIS) by judges, prosecutors and support staff and promote and properly finance the use of alternative dispute resolution tools, such as mediation. Ensure reliable statistical data, in line with the European Commission for the Efficiency of Justice (CEPEJ) methodology. The COVID-19 pandemic affected efficient case processing, the holding of court hearings and in some cases public access to hearings in Kosovo. While there were efforts to address in practice the issue of criminal trials affected by the so-called three-month rule due to COVID-19 pandemic, long-term legal effects remain possible. Kosovo authorities should follow-up on this issue and take the necessary measures to ensure effective and efficient conduct of justice in Kosovo. In particular, they should assess and address the impact of the COVID-19 pandemic and its long-term effects on present and future legal practice, especially with respect to those in vulnerable situations and their access to justice. An IT infrastructure investment and necessary legal amendments remain necessary to facilitate remote hearings to ensure the continued functioning of the justice system. Strategic documents The Kosovo Prosecutorial and Judicial Councils have strategic plans setting the objectives for the judiciary and prosecution system. Both Councils have also adopted annual action plans. However, they do not always ensure a clear link between the respective strategies. Furthermore, there is no appropriate monitoring to follow and assess their implementation. Therefore, Kosovo institutions should develop effective mechanisms to ensure proper inter-institutional coordination including of the many rule of law programmes supported by various donors in order to avoid inefficiencies, incoherence and duplication of efforts. The Functional Review of the Rule of Law Sector has led to a Rule of Law Strategy and Action Plan, which were adopted by the government in August 2021. The Strategy presents concrete actions aimed at increasing the integrity and performance of anti-corruption mechanisms in Kosovo, strengthening judiciary and prosecution, improving the access to justice for all, human rights and gender equality protection as well as reforming the Ministry of Justice in view of its ability to implement the EU acquis and European standards. While the adoption of the strategy and action plan was significantly delayed by the political situation during the reporting period, its implementation should now be supported by all actors. Management bodies

The Kosovo Judicial and the Prosecutorial Council are the main bodies responsible for ensuring the independence and impartiality of the judiciary as well as managing the judicial system and careers of judges and prosecutors. Their composition and appointment procedures are broadly in line with European standards. The Kosovo Judicial Council elected its new Chair, without due regard to the legal provisions on preventing conflict of interest and the Council membership. The courts and prosecution have elected their members to both Councils to replace the members whose mandates expired during the reporting period. The international community, including the EU, declined to monitor the election process conducted by the Kosovo Prosecutorial Council, due to concerns about the lack of transparency of the process and potential conflicts of interest. The Assembly has not yet appointed two remaining members, out of 13, of the Kosovo Prosecutorial Council (representing the Bar Association and the Civil Society) as well as one member, also out of 13, of the Kosovo Judicial Council (from the non-majority communities). In addition, one Judicial Council member subsequently resigned during 2021. The Assembly should ensure a full constitution of both Councils, without delay. Both Councils made efforts to ensure business continuity given the circumstances and limitations brought by the COVID-19 pandemic. The budget allocated to the Judicial and Prosecutorial Councils was decreased during the mid-term review in 2020, mostly due to funds being redirected because of the pandemic. The budget remained at this level in 2021. This has further limited the number of positions of professional support staff for courts and prosecution offices. Councils have made some progress on making statistics accessible to the public and other relevant interlocutors through their respective websites. More effort is needed, also in regard to the use of these statistics by the Councils for policy analysis and development. Kosovo Serb judges and prosecutors are formally integrated in the judicial system since 2017. This integration has been a success overall, but Kosovo still fails to implement the provisions on the composition of panels for cases coming from Serb-majority municipalities, especially in the Court of Appeal. Kosovo must also ensure that judicial proceedings can be accessed in all official languages across Kosovo. Lack of qualified translators and poor translation of the legislative framework remains an issue. Access to judgments and decisions, rendered by the Serbian courts in Kosovo between 1999 and up until the integration of Serbian judges in October 2017 remains problematic, and, more importantly, the agreement providing for the recognition of such judgements and decisions is not yet implemented by Kosovo. Independence and impartiality Clear safeguards for the independence and impartiality of the judiciary are enshrined in the Constitution and the legal framework. However, more efforts must be invested to ensure this in practice and effectively shield the judicial system from undue pressure and interference. The Councils should ensure a prompt and active reaction in all cases of alleged political interference in the prosecution and the judiciary. The regulatory framework provides for the random allocation of cases through a case management information system. In practice, a significant number of cases remain manually assigned, especially when a judge is unavailable. High profile and sensitive cases are not always processed in a timely manner. During the reporting period, there was one request for close protection made by prosecutors, which was granted. One close protection order issued for a prosecutor in previous years remains valid. There was no request for close protection made by judges. Accountability While codes of ethics are in place for judges, prosecutors and attorneys, continuous efforts and awareness raising are necessary to ensure their effective implementation. Both Councils continue to conduct disciplinary procedures based on the 2018 Law on Disciplinary Liability of Judges and Prosecutors. Most of the disciplinary proceedings resulted either in the decision that there was no violation of the rules, or in the disciplinary measures of non-public written remarks and temporary reductions of salary. The Judicial Council suspended one judge. The Prosecutorial Council suspended one prosecutor pending disciplinary investigation, however without a clear legal basis to do so. The Councils should ensure their proceedings are in line with the applicable legislation. While there are efforts in ensuring proper implementation of the legal framework regarding disciplinary proceedings, continued willingness and work are needed to ensure consistent and effective application of disciplinary proceedings against judges and prosecutors. The Councils should establish the electronic database to register all complaints and requests for initiation of disciplinary investigations as required by law. Judges and prosecutors are obliged by law to declare their assets and gifts received, and to report any possible conflict of interest to the Anti-Corruption Agency. During 2020, all prosecutors declared their assets on time, while four judges declared them after the deadline (see section on fight against corruption). Professionalism and competence The Councils independently organise recruitment processes for judges and prosecutors on the basis of merit-based criteria, after which successful candidates are appointed by the President for an initial three-year term. Due to the pandemic and reluctance of the President to give approval, there have been delays in filling vacant positions in courts and prosecution offices. The process of (re)appointment of judges and prosecutors must fully respect the principles of independent functioning of the judiciary and prosecution system, in line with the Constitution. In addition, the Councils need to ensure that the evaluation and background checks of judges and prosecutors have a clear legal basis and do not interfere unduly in the private lives of candidate judges and prosecutors. The Councils are required to carry out performance evaluations of prosecutors and judges with a permanent mandate every three years. In 2020, the Prosecutorial Council evaluated all prosecutors that were eligible for performance evaluation. However, as the Judicial Council was conducting a reform of its performance evaluation system, no judges with a permanent mandate were evaluated apart from those that were part of promotion processes. The quality of performance evaluations conducted by both Councils remains an issue, and there is no realistic, effective and systematic evaluation based on clear criteria. Both Councils have adopted new Regulations on Performance Evaluations with detailed lists of indicators and measurements for evaluation. They now have to ensure rightful and objective application of such regulations. Quality of justice The Academy of Justice is responsible for delivering initial and in‑service training for all legal professionals. In response to the pandemic, the Academy provided online training, which is a positive development although it cannot permanently replace in person training. Further in‑service training is needed as regards values and professional skills. More work is needed particularly in specialised areas: economic crime, mediation, the new provisions of the revised Criminal Code and European Court of Human Rights case law. Oversight and reporting lines of the Academy should be strengthened in line with European best practices. Overall, the level of professionalism and competence, especially of prosecutors, remains a matter of concern, despite efforts to increase the available training. On jurisprudence, some progress has been made regarding the legal obligation for all courts to publish their judgments on an accessible and searchable web portal within 60 days, in all official languages. However, publication has not always been consistent or timely due to a lack of resources. The prosecution offices publish relevant information on indictments on the website of the State Prosecutor within 24 hours. The Academy of Justice maintains a database of legislation, commentaries and other legal material accessible to all judges and prosecutors. Following the appointment of 24 judges in January and March 2021, Kosovo now has 400 judges (132 women and 268 men) and 187 prosecutors (79 women and 108 men), which means around 21 judges and 10 prosecutors per 100 000 inhabitants. According to the Council of Europe’s European Commission for the Efficiency of Justice (CEPEJ), the European average is 21 judges and 12 prosecutors per 100 000 inhabitants. Kosovo still has a low percentage of female judges and prosecutors in comparison with most other European countries.

The initially approved budget for the judiciary (including prosecution, courts, the Academy of Justice and the Correctional and Probation Service) was EUR 59.5 million in 2020 and EUR 61.9 million in 2021 (EUR 59.2 million in 2019), or respectively 2.27 % and 2.46% of the general budget (2.53% in 2019). For e-justice tools, the implementation of the case management information system (CMIS) is in an advanced phase. All Basic Courts and Basic Prosecution Offices are using the CMIS and electronic transfer of cases has started. The Court of Appeals, Supreme Court, Appeals Prosecution and Chief State Prosecutor Office are working towards full connectivity with CMIS. The police system is connected to the CMIS for exchange of data in criminal cases, and the connection with the Civil Registration Agency and the Business Registration Agency has been upgraded. Continued commitment is needed to ensure that the system is used systematically and that the data entered is accurate and complete, in particular so that the automatically obtained statistical data on the performance of the judiciary and prosecution is reliable (in line with CEPEJ recommendations and methodology). Reform of training programmes is highly needed in terms of usability of the CMIS. Work on a National Centralised Criminal Records Registry (NCCR) has shown good progress with nearly all cases and convicted persons entered into the system. However, more commitment from the KJC and the courts is needed to ensure the system’s sustainability and court staff should be more involved. The two IT systems still need to be made inter-operable. Legislation concerning procedures and responsibility over the NCCR still needs to be developed. There is a tracking mechanism for high-level corruption and organised crime cases; it currently includes 78 cases. (see section on fight against corruption) The mediation system has been operational since 2008. In 2020, the courts referred 3 135 cases to mediation, marking an increase compared to 2019 (2 846 cases). The State Prosecutor and the prosecution offices referred 2 902 cases, also an increase compared to 2019 (2 244). The 190 licensed mediators (67 women, 123 men), of whom 14 were from the Serb-majority municipalities, solved 3 980 cases. Due to the COVID-19 restrictions, the Kosovo Judicial Council issued a decision directing the courts to start referring cases to online mediation, which led to 10 online mediation cases. Public awareness and familiarity with alternative dispute resolution tools remains low. The mediation system needs further strengthening, and this can be achieved through full implementation of the Law on Mediation and allocation of a sufficient budget. Efficiency The efficiency of criminal justice is seriously hampered by shortcomings in criminal legislation. The revised Criminal Procedure Code which would address many of the existing issues still remains to be adopted by the Assembly. The capacity of judges to manage court proceedings efficiently needs to be significantly improved to avoid unproductive hearings, unreasonably protracted proceedings and ultimately low-quality decisions. Except for the first instance administrative cases, the clearance rate decreased in all categories and instances from 2019 to 2020. The clearance rate for severe criminal cases at first instance (107% in 2020), administrative cases at first instance (93% in 2019 and 102% in 2020) and civil/commercial cases at second instance (123% in 2019 and 115% in 2020) remained above 100% in 2020 but the number of incoming and resolved cases was notably lower than in 2019. Severe criminal cases at second instance have a clearance at 93% in 2020. The clearance rate is particularly low for civil/commercial cases at first instance (85% in 2019 and 70% in 2020) and administrative cases at second instance (80% in 2019 and 78% in 2020). There is also a backlog with a sizeable number of pending cases older than two years. To improve the quality and efficiency of the justice system in Kosovo, the full use of CMIS and ongoing training of judges and prosecutors and support staff are needed. In addition, monitoring and evaluation of courts’ activities, the use of satisfaction surveys and giving justice systems adequate funding and staff needs to be prioritised. Sentencing policy in relation to organised crime and corruption remains erratic with courts not systematically implementing the Supreme Court’s 2018 sentencing guidelines. Overall, all this leads to long disposition times (i.e. the average time from filing an indictment to receiving a judgment). The disposition time stands at 1 150 days for civil/commercial cases in first instance and 1 188 days for administrative cases in first instance, an increase since 2019 (852 days for civil/commercial cases and 787 days for administrative cases). At second instance, that is 424 days (241 days in 2019) for administrative cases and 428 (425 days in 2019) for civil/commercial cases. Severe criminal cases take 753 days in first instance and 133 days in second instance. Furthermore, these delays in proceedings, in combination with a preference for detention over other restrictive measures, have led again to cases of overly long detention. In 2020, the Ombudsperson continued to receive complaints against courts and prosecutors with allegations of unjustifiable delays in judicial proceedings. Authorities need to consider introducing an effective judicial legal remedy to address such delays, including compensation. Also for this, there is a need to improve strategic planning, which also requires efforts to introduce reliable statistical systems for the judiciary based on CEPEJ indicators, and to use the findings for the management and policy-making purposes. Although the number of professional associates in all Kosovo courts has increased in 2020, the number of legal staff directly assisting judges and prosecutors is still insufficient. A number of vacancies remain open and not all positions needed were budgeted in the 2021 budget. The COVID-19 pandemic has created unprecedented challenges to Kosovo rule of law institutions and highlighted inefficiencies in the justice system, such as the increased need for further improvement of case management and further adoption and use of digital technologies. Some online hearings were held, but the legal and regulatory framework needs to ensure the continued functioning of the justice system despite pandemic restrictions. During the pandemic, almost all criminal cases in trial stage were affected by the ‘three-month rule’ – the Criminal Procedure Code (CPC) provides that a trial has to re-start after three months without any hearing. This includes in particular some very important corruption and organised crime cases. In almost all affected cases, the parties agreed to have all evidence presented in previous hearings considered as “read” while also inserting a relevant entry into the trial minutes. However, the CPC does not allow this practice explicitly. This creates legal uncertainty and should be urgently addressed, preferably through legislative action. Domestic handling of war crime cases The new government has put forward measures to strengthen domestic institutional mechanisms dealing with war crimes. In addition, amendments to the Criminal Procedure Code on the applicable procedure of trial in absentia of war crimes were adopted in the Assembly. The implementation of the strategy on war crimes adopted by the Kosovo Prosecutorial Council in 2019 continues to be hampered by the political context, lack of resources and the lack of international and regional cooperation. In the reporting period, the Kosovo Police arrested two persons suspected of war crimes and three new investigations were opened. Progress was made in the use of the electronic war crimes database by the Kosovo Police, with two cases being fully digitalised. Following the first conviction for a war crime at first instance since the end of EULEX’s executive judicial mandate, in the reporting period four other convictions were handed down by the Basic Courts. However, all of these judgements were later either sent back for re-trial or significantly modified in appeal. This shows that significant obstacles remain in the proper adjudication of war crime cases. More broadly, concerns remain about the willingness to hold former Kosovo Liberation Army members accountable in war crimes cases. In 2020, the Special Prosecution Office of Kosovo filed three indictments for war crimes against three persons. Despite the increase of assigned prosecutors (from three to four), the war crimes department of the Special Prosecution Office continues to struggle in processing the workload, which has constantly increased since 2018. There is a need for more training and support staff. Notwithstanding a few requests channelled through the Office of the EU Special Representative (EUSR) in Kosovo, mutual legal cooperation between Kosovo and Serbia in war crimes cases remains limited. Cooperation with the United Nations International Residual Mechanism for Criminal Tribunals (IRMCT) in The Hague, although formalised via an agreement with a facilitation role of the EUSR, remains difficult. The Kosovo Specialist Chambers and Specialist Prosecutor's Office (SPO) have continued to investigate and prosecute violations of international law stemming from the 2011 Council of Europe Report. In the reporting period, pre-trial preparations were ongoing in four cases, including against the then President of Kosovo. In one case, the SPO charged the leadership of the KLA War Veterans Association with obstruction and intimidation, following the public release of sensitive documents. It is essential that Kosovo institutions provide full cooperation with the Specialist Prosecutor’s Office and Specialist Chambers, enabling them to fulfil their mandate in full independence, without any outside interference. The Government Commission on Recognition and Verification of the Status of Survivors of Sexual Violence during the Conflict continues its work, at a slow, albeit more efficient, pace than in the past. The rejection of more than 200 applications in 2020 triggered some adjustments to the system. Still, the aspect of societal stigma that the survivors face and the limited number of cases approved for recognition and compensation might deter future applicants. By August 2021, 1 528 individuals had submitted applications, of which 987 were accepted and 222 were rejected while 13 are still waiting to be reviewed. The timeframe of the law still excludes those who suffered conflict-related sexual violence after 20 June 1999. Kosovo should develop an overarching strategy for transitional justice, including a comprehensive approach to addressing its past. The future of an initiative to establish a Truth and Reconciliation Commission (TRC) remains unclear. Civil society remains actively engaged in reconciliation initiatives.

Fight against corruption The fight against corruption in Kosovo is at an early stage/has some level of preparation. In the reporting period, limited progress was made, including on the investigation and prosecution of high-level cases in the track record and as regards an improved performance and set-up of the Special Prosecution Office. The Special Prosecution Office framework in the field on anti-corruption was strengthened when the Corruption and Financial Crime Department became operational and increased its staffing levels. The Special Departments handling cases regarding high-level corruption (and organised crime) would benefit from more (and specialised) support staff. Sustained efforts are needed to have more proactive investigations, final court decisions and final confiscation of assets. The anti-corruption legal package and the revised Criminal Procedure Code are still not adopted, while the revision of political party financing legislation was delayed again. The legal framework on confiscation continues to be largely unimplemented and the value of finally confiscated assets remains low. Most of the recommendations of the 2020 report remain valid, with the main problem being still the lack of implementation of existing legislation. Overall, corruption is widespread and remains an issue of serious concern. Despite efforts made, there is a need for strong and continual political will to effectively address systemic corruption risks, as well as a robust criminal justice response to high-level corruption. As the recommendations of last year remain largely unaddressed, Kosovo should in particular: ®adopt the Law on the Agency for Prevention of Corruption, reforming the competences of the Anti-Corruption Agency, and the new Law on Asset Declaration and strengthen the capacity of the Agency to ensure a proper implementation of the legislation under its competence. ®strengthen the efficiency of confiscation regime by promoting systematic use of both extended and ‘regular’ confiscation by criminal prosecution and police, by the creation of a confiscation fund and by improving the sales process of sequestrated and confiscated assets managed by Agency for the Management and Sequestrated and Confiscated Assets (AMSCA); ®adopt the revised Criminal Procedure Code, including provisions on the suspension of public officials indicted for corruption-related offences; ®ensure that the financial reports and campaign disclosure reports of political parties are consistently published and audited, and sanctions applied for violations of relevant laws. Amend the legal framework governing political party and campaign financing in line with the opinion of the Venice Commission, to ensure effective enforcement, accountability and transparency. Track record In July 2018, the European Commission confirmed that Kosovo had met the benchmark in its visa liberalisation roadmap to strengthen the track record in the fight against organised crime and corruption. These efforts should continue to improve and the Commission will continue to actively monitor the further development of this specific track record. The track record mechanism for visa liberalisation, established in 2015 to monitor and coordinate high-level corruption and organised crime cases includes 78 cases by September 2021. There have been 65 indictments - 27 cases concern organised crime and 38 cases concern corruption. 23 cases have final court decisions, out of which thirteen ended with a (partially) guilty verdict, leading to 21 individuals being convicted of corruption-related offences and 4 individuals being convicted of organised crime-related offences. At present, the track record mechanism includes only the cases selected in the specific context of visa liberalisation benchmarks. However, in the future it is expected that the track record will cover all high-level cases relating to organised crime and corruption. To this end, rules governing inclusion of cases in this mechanism should be revised with a view of creating a single and comprehensive track record, including all cases against high-level officials, which should be prioritised and handled with the highest level of scrutiny. In the reporting period, the number of cases dealt with by the Anti-Corruption Agency increased. In 2020, the Agency handled over 300 cases (134 pending from previous years, 179 new referrals in 2020), compared to 126 cases in 2019. Out of these cases, more than 100 (against 180 persons) were referred to the prosecution and police for investigation. In 2020, almost 98% of the 4,721 officials obliged to submit annual declarations of assets did so on time. Only 96 officials (2%) failed to do so. The Anti-Corruption Agency has 968 officials under the full assets control procedure, out of which 77 were referred to the prosecution and police for further investigation (26 on suspicion of false declaration and 51 for failure to declare assets). There were 23 court decisions in 2020 (11 in 2019). The COVID-19 pandemic increased the difficulties in verifying declarations by the Agency. Shortcomings persist in the system for declaring and assessing the origin of property belonging to senior public officials. The capacities of the Agency with respect to number of staff, IT resources and training should be increased. In addition, an electronic declaration system should be introduced in order to simplify the process of declaration and submission as well as increase transparency and accuracy in monitoring and verification. Cooperation and exchange of data with the police, the tax administration, the Financial Intelligence Unit, the cadastral registry and municipal authorities should be strengthened. In 2020, the Agency handled 160 cases of conflict of interest, of which one was addressed using the minor offence procedure and two were sent for further criminal investigation. In 70 cases, a conflict of interest was avoided. In 2020, the Agency handled 80 cases of corruption in public procurement, out of which 54 opinions were issued, 21 cases terminated, while four are under procedure and one was send for investigation. A new law on the Anti-Corruption Agency aimed at better defining the scope of the Agency’s competencies remains to be adopted (see below on prevention measures). The capacity of the Agency needs to be strengthen considering the new competences of the Agency and to ensure an effective implementation of the applicable legislation. Despite a fairly advanced legal framework in place, criminal asset confiscation continues to be largely overlooked, with insufficient focus and resources put into it. The Law on Extended Powers of confiscation is in force since 2019 but is not being consistently applied. Confiscation as a means of targeting the economic interests of criminal organisations remains underutilised by prosecutors, who remain the weakest link in this regard. Overall, the willingness to confiscate assets remains low. In 2020, the value of preliminary confiscated assets rose again, to EUR 19 million (EUR 8.7 million in 2019). However, the value of finally confiscated assets fell to EUR 476,490 (EUR 991,593 in 2019). The Agency for the Management of Sequestrated and Confiscated Assets (handling more than EUR 1.6 million in various assets in 2020) continues to struggle in managing the assets in its portfolio, partially due to the courts not allowing asset sales and partially due to the set-up of the Agency. The value of assets sold in 2020 (EUR 53,354) has decreased compared to 2019 (EUR 74,166). No progress has been registered in the establishment of a Confiscation Fund, which would allocated confiscated funds in part to law enforcement, prosecution and courts and in part to social projects.

Funding for political parties and campaign financing lacks transparency and the regulatory framework remains inadequate. Overall, the regulatory framework does not ensure complete reporting, timely disclosure, meaningful oversight or accountability for irregularities. During the reporting period, the Assembly committee for oversight of public finances initiated the procedure for auditing of financial reports of political party campaigns and financial declarations for three subsequent years. The process of auditing has failed for two years due to the low budget allocated to hire auditors. Institutional framework Inter-institutional coordination and cooperation between preventive anti-corruption institutions and law enforcement entities is key to effectively implement anti-corruption legislation. The responsibilities of the 19 different anti-corruption institutions in Kosovo continue to frequently overlap. Prevention measures The main body competent for preventing corruption is the Anti-Corruption Agency, whose competences include asset declarations and declarations of gifts, and dealing with whistle-blowing and conflict of interest. The Auditor-General, the tax authorities, the customs authorities and the Financial Intelligence Unit also have inspecting and auditing powers. A draft law reorganizing the competences of the Anti-Corruption Agency has been finalised and should be adopted without delay in view of strengthening the Agency’s mandate in the field of prevention of corruption. Specifically, the Agency will be entitled to implement anti-corruption preventive tools such as corruption proofing, corruption risk assessment, and integrity plans in the institutions. Furthermore, the Agency will have the competence to initiate administrative investigations and impose sanctions. More training must be provided for staff of the main anti-corruption bodies, especially for the staff of the Agency, in particular concerning financial investigations together with other anti-corruption institutions. More training in the field of asset confiscation, money laundering and cybercrime is also needed. There is a continuous need to promote the elaboration and adoption of integrity plans in the public service as a tool for preventing corruption and ensuring discipline, including at municipal level. Law enforcement Specialised institutions for fighting corruption remain in place, including the National Coordinator for Combating Economic Crimes within the prosecutorial system and the relevant Police Directorate. The decision of the previous government in October 2020 to abolish the special Anti-Corruption Task Force within the Kosovo Police and also dismiss the Director of the police, raised serious concerns about Kosovo’s commitment to the fight against corruption and organised crime. The former Task Force had been involved in some investigations of corruption within the institutions and, as a result, some high-profile cases were presented to the prosecution. The government needs to ensure a sound legal and organisational structure to the Special Investigative Unit as the successor of the abolished Task Force. At present, the Special Investigative Unit has a temporary legal status through a decision issued in 2020 by the former Minister of Internal Affairs. During the reporting period, the number of financial investigators working on organised crime and corruption investigations increased. Financial investigations need to be carried out systematically, independently and in parallel with the criminal procedure for corruption and organised crime cases. In April 2020, the Special Prosecution Office (SPRK) was re-structured. In addition to the existing War Crimes Department, three new specialised departments were created (Terrorism; Corruption and Financial Crimes; Organised Crimes and other cases falling within the SPRK competence). In 2020, despite the impact of the pandemic, the total number of indictments was 147 (146 in 2019), while the total number of sentencing decisions was 122 (36 in 2019). In the reporting period, the SPRK was connected to the Case Management Information System (CMIS) and internal efficiency improvements were made in its administration. Despite these efforts, the Special Prosecution Office still suffers from a lack of sufficiently specialised staff with the required level of training and competence to deal specifically with financial and procurement cases. It currently has 16 prosecutors and is in the process of hiring three more. The Basic Prosecution Office in Pristina has a Special Unit for Financial and Corruption cases, to which ten prosecutors are assigned. In order to increase its efficiency, a re-structuring is ongoing. Each basic prosecution office has a designated anti-corruption prosecutor. The Special Departments in the Basic Court of Pristina and the Court of Appeals, which handle all cases of the Special Prosecution Office, including corruption cases, have continued to function albeit with shortages in professional support staff. During the reporting period, six new judges were appointed to the Special Department in the Basic Court in Pristina and three new judges to the Special Department at the Court of Appeals. Recruitment of additional support staff for the Special Departments is in the final stage, mainly for the positions of professional associates. Legal framework Despite not being a party to international anti-corruption conventions (such as the United Nations Convention against Corruption and the Council of Europe’s Criminal Law Convention on Corruption) due to status-related issues, Kosovo’s legislation is generally aligned with these instruments and in line with relevant European standards. On the implementation of the mandatory removal from office of public officials convicted of corruption, as included in the Criminal Code of 2019, one decision imposing such punishment was taken in 2020 and one in 2021. Substantial amendments to the Criminal Procedure Code, under preparation since 2018, aim at strengthening the criminal proceedings and the anti-corruption legal framework, such as provisions on the suspension of public officials indicted also for corruption were proposed. Given the long delay, the new Criminal Procedure Code should be adopted as a matter of urgency. The so-called anti-corruption legal package (i.e. the Law on the Agency for Prevention of Corruption reforming the competences of the Anti-Corruption Agency and the new Law on Asset Declaration) has not been adopted. The legal framework on criminal confiscation remains fairly advanced, including through the 2019 Law on Extended Powers of Confiscation. These advanced tools now need to be utilised. The government approved the Concept Paper on the issue of Unjustifiably Acquired Assets which aims to introduce in Kosovo a system of non-conviction based confiscation. Such an advanced system requires clear safeguards against possible misuse and abuse and should respect the principles enshrined in the Constitution and the fundamental rights of individuals. Moreover such a system should not replace or undermine the application of the existing legal framework on criminal confiscation. The legal framework on money laundering is still not properly implemented. Although the law does not require the proof of a predicate offence to retain a conviction, many prosecutors and judges continue to consider a predicate offence as an essential part of money laundering offences. As a result, many stand-alone money laundering cases are dismissed either by the prosecutor or by the court. (see also section 6.3 on the freedom of movement of capital and the section on organised crime)

The legal framework on the prevention of conflict of interest is in place since 2018 but still needs to be fully implemented. A number of senior public officials still occupy two or more posts, in direct violation of the law. Kosovo has no specific legislation on lobbying. The Law on the Protection of Whistle-Blowers is fairly advanced and in line with the new EU legislation in this area. Secondary legislation determining the procedure for receiving and handling the cases of whistleblowing entered into force on May 2021. Strengthened whistle‑blowing mechanisms and protection requirements still need to be implemented in practice. The legal framework on political parties and election campaign finances prepared by the government after consultation of the Venice Commission is yet to be adopted. Kosovo still needs better functioning, more accountable, more transparent and enforceable party finance and campaign finance legislation. The government and Assembly should take this forward on the basis of the existing draft law. Strategic framework The Rule of Law Strategy and Action Plan (see section on Judiciary) include specific measures aiming to improve the institutional framework against corruption, as well as the assets declaration system and regulations on acceptance of gifts. Since 2018, Kosovo does not have an Anti-Corruption Strategy in force. While the Anti-Corruption Strategy and Action Plan 2018-2022 were finalised and approved by the government, they failed to be adopted by the Assembly. The Anti-Corruption Strategy and Action Plan 2021-2023, adopted by the government, were not sent to the Assembly for approval. Fundamental rights The legal framework guarantees the protection of fundamental rights and is in line with European standards. However, additional efforts remain needed to fully implement it. The government’s coordination of human rights and minority protection mechanisms, both at the central and local levels, needs to improve and fundamental rights issues need to feature higher on the political agenda. The new position of Deputy Prime Minister on Human Rights and Communities represents an opportunity to better coordinate and oversee fundamental rights policies and legislation. Human and financial resources remain lacking and relevant authorities are still dependant on donor support and guidance and need to assume greater ownership. Inter-ministerial coordination mechanisms are often treated as a formality and concrete steps must be taken by the government in order for these mechanisms to be effective in advancing human rights. More efforts are needed to address recommendations of the 2020 report, which are still applicable, even if some steps were taken on improving overall coordination, on gender equality, returns and Roma and Ashkali. In the coming year, Kosovo should in particular: ®improve the efficiency and effectiveness of the mechanisms for the coordination and implementation of human rights legislation, policies and strategies, including the role of the Kosovo Assembly, via a sustainable mechanism of coordination and oversight. Strengthen the role of the anti-discrimination officers in ministries and municipalities; ®strengthen the implementation of the Law on Gender Equality and ensure proper functioning of the system of protection, prevention and adjudication of all forms of gender-based violence; ®adopt the Strategy for Return and Communities, the draft Law on Kosovo Property Comparison Verification Agency addressing the Ombudsperson’s recommendations, and prepare a new Strategy for the Inclusion of Roma and Ashkali communities in Kosovo society 2022-2026 taking into account lessons learned; ®adopt the Law on Cultural Heritage and the Law on Religious Freedom and ensure consistent functioning of the Implementation and Monitoring Council. Advance protection of cultural heritage by fully enforcing legislation on special protective zones and illegal construction. International human rights instruments form an integral part of Kosovo's legal framework and are directly applicable, as provided for in the Constitution. Kosovo continued to align its legislation with these instruments and maintained its practice of ad hoc reporting, including by hosting of rapporteurs of the European Committee for the Prevention of Torture and Inhuman or Degrading Treatment or Punishment (CPT) and the Group of Experts on Action against Trafficking in Human Beings (GRETA). Measures taken in relation to the COVID-19 pandemic by the Kosovo government were framed by the August 2020 Law on preventing and combating the COVID-19 pandemic, which provided a solid legal basis for public health-related restrictions of fundamental rights. The pandemic has disproportionally affected the most vulnerable groups. Their access to goods and services has been disrupted, including with regard to education. Persons with disabilities have been lacking access to quality medical care and other services. The economic and social consequences of the COVID-19 pandemic have affected women more severely than men. With many of them employed in the informal economy, they had more limited access to mitigating support measures. The government has continued protecting women victims of domestic and gender-based violence during the outbreak of COVID-19. The shelters for gender-based violence and trafficking in human beings have continued providing services at all times. In prison, the pandemic was well managed, despite difficult circumstances. Restriction of contacts with the outside world was compensated by enabling contacts through video and other means. On the protection and promotion of human rights, the implementation of human rights legislation, oversight and coordination of existing human rights mechanisms remains a challenge. The new position of Deputy Prime Minister for Minority Issues and Human Rights represents an opportunity to ensure more consistent and coordinated leadership. Existing human rights strategies lack clear objectives, timelines and adequate implementation mechanisms. The Human Rights Strategy, already being drafted for a long period of time, is not yet adopted. The Office of Good Governance (OGG) within the Prime Minister’s Office still lacks the resources to fulfil its broad mandate. The Kosovo Assembly needs to take a more proactive role in overseeing the implementation of the human rights legislation. The Inter-Ministerial Coordination Group for Human Rights still meets only rarely and it does not take decisions nor properly follow up on previous government commitments. The Ombudsperson continues playing an important role in the promotion and protection of human rights at central and local level. In September 2020, the Kosovo Assembly elected a new Ombudsperson for a period of 5 year. The election of five deputies of the Ombudsperson failed as the Assembly of Kosovo did not endorse any of the candidates proposed by the Ombudsperson Institution. The process now needs to be repeated. The Institution has further strengthened its capacity to review cases and continued its efforts to increase awareness on human rights protection and promotion. The number of complaints received by the Ombudsperson in 2020 was 1,419, out of which 720 have been opened for investigation and 43 cases were opened ex officio. The number of complaints dropped due to the impact of the pandemic and political crisis, as well as the selection of a new Ombudsperson during the reporting period. Although there is an increase in the responsiveness of institutions to the recommendations of the Ombudsperson, consistent implementation remains a challenge. Law enforcement and the judiciary need to be more responsive in protecting vulnerable groups such as children, persons from non-majority communities (including Roma and Ashkali) and victims of gender-based violence. New initiatives to address the needs of social services, which are key in various areas related to fundamental rights, have been launched (see sections on social policy and public administration reform). On the prevention of torture and ill treatment, the situation remains satisfactory and the Kosovo authorities continue to show commitment to preventing these practices in all circumstances. Six complaints have been filed with the Ombudsperson – Kosovo’s National Pr