EUROPEAN COMMISSION Strasbourg,17.4.2018 SWD(2018) 156 final COMMISSION STAFF WORKING DOCUMENT KosovoFMT:Superscript*/FMT 2018 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 2018 Communication on EU Enlargement Policy {COM(2018) 450 final}



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. Table of Contents 1. Introduction 1.1. Context 1.2 Summary of the Report 2. Fundamentals first: political criteria and rule of law 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 Implementation and enforcement capacity 3. Fundamentals first: Economic development & competitiveness 3.1 The existence of a functioning market economy 3.2 The capacity to cope with competitive pressures and market forces within the Union 4. Regional issues and international obligations 5. Normalisation of relations between Kosovo and Serbia 6. European Standards 6.1. Free movement of goods 6.2. Movement of persons, services and right of establishment 6.3. Free movement of capital 6.4. Financial services 6.5. Customs 6.6. Taxation 6.7. Competition 6.8. Public Procurement 6.9. Company law

6.10. Intellectual property law 6.11. Social policy and employment 6.12. Consumer and Health Protection 6.13. Education and culture 6.14. Science and research 6.15. Trade issues 6.16. Enterprise and industrial policy 6.17. Agriculture 6.18. Food safety, veterinary and phytosanitary policy 6.19. Fisheries 6.20. Environment and climate change 6.21. Transport policy 6.22. Energy 6.23. Trans-European Networks 6.24. Information society and media 6.25. Financial control 6.26. Statistics Annex I – Relations between the EU and Kosovo Annex II – Statistical annex





1. Introduction 1.1. Context The EU-Kosovo Stabilisation and Association Agreement (SAA) has been in force since April 2016. In order to define reform priorities, the Kosovo government together with the European Commission launched in November 2016 the European Reform Agenda (ERA). The new government appointed in September 2017 committed itself to the implementation of EU related reforms, however progress to date has been slow. The border/boundary demarcation agreement with Montenegro was ratified by the Kosovo Assembly in March 2018, constituting an important achievement and the fulfilment of one of the key criteria for Kosovo's visa liberalisation. 1.2 Summary of the Report As concerns the political criteria, Kosovo held early elections in June 2017. A new Assembly and government took office in September. So far, however, the new ruling coalition has had limited success in bringing forward EU related reforms and building consensus on key strategic issues for Kosovo. The continuing political fragmentation and polarisation have adversely affected the role of the Assembly and have impacted the effectiveness of the government. Obstructive behaviour by some parliamentarians, including the use of teargas, has hindered the work of the Assembly. The ratification of the border/boundary demarcation agreement with Montenegro in March 2018 was an important breakthrough. Parliamentary and municipal elections, held in 2017, were generally competitive and welladministered in most places in Kosovo. However, patterns of intimidation within many Kosovo Serb communities, targeting particularly candidates not belonging to the Srpska Lista party, raised concerns. The context in the north of Kosovo poses particular challenges. The investigation of the murder of Kosovo Serb politician Oliver Ivanović in January 2018 continues. Attempts by members of the Kosovo Assembly in December 2017 to abrogate the Law on Specialist Chambers and Specialist Prosecutor's Office have raised serious concerns. It will be essential for Kosovo to fully comply with its international obligations regarding the Specialist Chambers and Specialist Prosecutor's Office and show full and unequivocal commitment to these institutions. There is some level of preparation in the area of public administration reform. Some progress has been made especially with the review of agencies and (semi)independent bodies. The continued politicisation of the public administration remains a concern, and adversely affects the efficiency and professional independence of the public administration. Kosovo's judicial system is at an early stage. Some progress has been achieved in implementing the 2015 justice package laws. The integration of Kosovo Serb judges and prosecutors and their support staff across Kosovo into the Kosovo judicial system was a big achievement of 2017. The judiciary is still vulnerable to undue political influence and rule of law institutions need sustained efforts to build up their capacities. The administration of justice remains slow and inefficient. Kosovo is at an early stage/has some level of preparation in the fight against corruption. Kosovo has made some progress as regards the track record on the investigation and prosecution for high level corruption and organised crime cases, including final convictions. Progress was also made on preliminary confiscation of assets although final confiscations remain low. Corruption is widespread and remains an issue of concern. Concerted efforts are needed to tackle this problem in a comprehensive and strategic manner. Kosovo is at an early stage in the fight against organised crime. Some progress was made with the track record on high level corruption and organised crime cases. While there is more preliminary confiscation of assets, there are still few final convictions, financial investigations and final confiscations of assets. Law enforcement agencies struggle to effectively fight organised crime in the north of Kosovo. Some progress was made in the fight against terrorism, including through measures to tackle violent extremism and radicalisation and in preventing citizens from joining conflicts abroad. The Kosovo authorities need to be more effective in their efforts to fight money laundering and the relevant law should be brought in line with EU acquis and international standards. The legal framework broadly guarantees the protection of human and fundamental rights in line with European standards. However, additional efforts are needed regarding enforcement. Implementation of human rights strategies and legislation is often undermined by inadequate financial and other resources, particularly at local level, limited political prioritisation and lack of coordination. 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, to set up an integrated child protection system and to advance the protection of cultural heritage. Kosovo has some level of preparation in the area of freedom of expression, which is enshrined in the constitution. Kosovo benefits from a pluralistic and lively media environment. However, threats and attacks against journalists have continued. The Assembly showed limited commitment to finding a solution for sustainable funding of the public broadcaster, leaving it vulnerable to political pressure. As regards the economic criteria, Kosovo has made good progress and is at an early stage of developing a functioning market economy. The business environment has improved and the government adhered to the fiscal rule on budget deficit; however, war veterans' benefits continue to pose a challenge for public finances. The informal economy remains widespread. The increase in the labour force participation rate was not matched by gains in employment so the unemployment rate increased further. It particularly affected women and young and unskilled workers. Despite strong export growth the high trade deficit reflects a weak production base. Kosovo has made some progress and is at an early stage in terms of capacity to cope with competitive pressure and market forces within the EU. No progress was made on improving the quality of education and addressing skills gaps in the labour market. Kosovo made some progress in improving road infrastructure but large infrastructure gaps in the railway and energy sectors remain. Structural changes in the economy are slow as it remains reliant on the retail trade sector. Integration with the EU is hampered by the slow implementation of the SAA. Kosovo continued its efforts to maintain good and constructive bilateral relations with other enlargement countries. Kosovo is represented in most regional organisations that fall within the scope of the Arrangements on Regional Representation and Cooperation agreed between Belgrade and Pristina in 2012. Regarding the normalisation of relations with Serbia, Kosovo has remained engaged in the dialogue. However, Kosovo needs to make further substantial efforts on the implementation of existing agreements and contribute to the establishment of circumstances conducive to the full normalisation of relations with Serbia, to be defined in a legally binding agreement. As regards alignment with European standards, Kosovo is at an early stage. Legislative alignment has continued in some areas but implementation is weak. Some progress was made in the area of free movement of goods and services, public procurement and competition as well as in improving the business environment. In the area of taxation and customs, some progress was also made in collecting revenue and simplifying administrative procedures, but Kosovo should step up the fight against the informal economy and tax evasion. The energy sector continues to face serious challenges. No progress has been achieved to address environmental issues. Overall, Kosovo needs to improve its administrative capacity and coordination, across all sectors, to ensure effective implementation of the acquis. Authorities have made progress in managing regular and irregular migration. These efforts should be continued and built on. In this context, Kosovo needs to put in place a return mechanism for irregular migrants in line with EU standards and practices.

2. Fundamentals first: political criteria and rule of law 2.1 Functioning of democratic institutions and Public Administration Reform 2.1.1 Democracy Following early elections in June 2017, a new Assembly and government took office in September. So far, however, the new ruling coalition has had limited success in bringing forward EU-related reforms and building consensus on key strategic issues for Kosovo. Continuing political fragmentation and polarisation has adversely affected the Assembly's role and impacted the effectiveness of the government. The ratification of the border/boundary agreement with Montenegro in March 2018 was an important breakthrough. Attempts to abrogate the Law on Specialist Chambers and Specialist Prosecutor's Office, established to address certain allegations of international crimes committed in the context of the Kosovo conflict, raised serious concerns about Kosovo's political leaders’ commitment to prosecute and judge these crimes and honour Kosovo’s related international obligations. Elections Parliamentary and municipal elections, held in 2017, were generally competitive and welladministered in most places in Kosovo. However, patterns of intimidation within many Kosovo Serb communities, targeting particularly candidates not belonging to the Sprska Lista party, raised concerns. A number of long-standing weaknesses, in particular political party financing, women participation, electoral dispute mechanisms, inaccurate voter lists and a largely defective voting system for Kosovo citizens resident abroad remain to be addressed. These challenges, guided by the recommendations of the EU election observation missions, should be tackled as a matter of priority. Following a motion of no confidence in the Assembly on 10 May 2017, early parliamentary elections took place on 11 June. The 120 members of parliament were elected for a four-year term through a proportional representation system with preference voting and guaranteed seats for non-majority communities. Elections were held within the short timeframe of 30 days. Voter turnout was low at 41.3 % (42.6 % in 2014). The "PAN coalition" (consisting mainly of the Democratic Party of Kosovo (PDK), the Alliance for the Future of Kosovo (AAK) and the Social Democratic Initiative (Nisma)) obtained 33.7 % (39 seats), Vetëvendosje (VV) 27.5 % (32 seats), the "LAA coalition" (consisting of the Democratic League of Kosovo (LDK), the New Kosovo Alliance (AKR) and Alternativa) 25.5 % (29 seats), and Srpska Lista 6.1 % (9 seats). While women caucuses exist in some political parties, this has not resulted in an increased participation of women in the electoral process. Out of 120 elected members of parliament, 39 are women. Discrepancies between the electoral legal framework and the equal representation provision of the Law on Gender Equality persist. Women candidates did not receive equal financial or logistical support from their political entities for their campaigns, and women candidates rarely spoke at rallies. The media gave priority coverage to male candidates. Regular municipal and mayoral elections took place on 22 October 2017 with the runoff for the mayoral elections on 19 November. These were the second local elections held in all municipalities throughout Kosovo. Out of 204 mayoral candidates only 8 were women. Of the 38 municipalities, LDK won mayoral posts in 8, AAK in 7, PDK in 5 and VV in 3. Srpska Lista won in all 10 Kosovo Serb-majority municipalities. AKR, NISMA and the Kosovo Turkish Democratic Party each won 1 municipality. Two independent candidates won mayoral posts. Out of 38 elected mayors, none are women. The EU deployed fully-fledged observation missions for both parliamentary and municipal elections. Elections in the north of Kosovo were technically assisted by the Organisation for Security and Co-operation in Europe (OSCE). Overall both elections were competitive and well-administered in most of Kosovo. Within many Kosovo Serb communities, however, the campaign environment was marred by a pattern of intimidation targeting in particular non-Srpska Lista political entities and their candidates. Instances of violence from within the Kosovo Serb community and an insufficient response from the law enforcement authorities were reported. The EU election observation mission noted that during the campaign, senior officials in Belgrade repeatedly urged voters to vote for Srpska Lista. All this raises deep concerns over the state of democracy in Kosovo Serb communities. Political will across the political spectrum is needed to undertake necessary electoral reforms well ahead of the next round of general elections. The Assembly needs to urgently address long-standing weaknesses, guided by the recommendations of the EU election observation mission. Allegations of intimidation should be promptly and thoroughly investigated. Inaccurate voter lists, susceptible to fraud, need to be cleaned and the largely defective voting system for Kosovo citizens resident abroad revised. Affirmative action needs to be taken to overcome the obstacles that prevent women from participating in politics and being elected. The regulation of political party financing and campaigning is made ineffective by the absence of systematic monitoring and control. Electoral dispute mechanisms need to be conducted in a more transparent and trustful manner. Parliament The Assembly needs to substantially improve its performance as a forum for constructive political dialogue and representation, as well as guarantee proper checks and balances. The frequent absence of parliamentarians from plenary sessions and continued political polarisation hampered legislative activity during the reporting period. Obstructive behaviour by some parliamentarians, including the use of teargas, has hindered the work of the Assembly. Cross-party work on long overdue reforms is urgently needed. Both the ruling coalition and the opposition should intensify their parliamentary work and seek consensus on EU-related reform priorities. The Assembly's ratification of the border/boundary demarcation agreement with Montenegro in March 2018 was an important achievement. Overall, the Assembly's effective oversight of the executive and the transparency and quality of lawmaking need to be improved, and the use of urgent procedures limited. Following the early elections on 11 June, it took about two months to constitute the Assembly and appoint the government. With 61 out of 120 votes, the ruling coalition (consisting of PDK, AAK, NISMA, AKR and Srpksa Lista as well as other minority parties) led by Prime Minister Haradinaj has a slim majority. For the first time, the opposition party VV became the single strongest party in parliament (32 seats). The parliamentary elections and formation of the government during the summer and the municipal elections in the autumn delayed parliamentary work and seriously slowed down Kosovo's EU related reforms. The reporting period was marked by political polarisation and dysfunction in both the previous and current Assembly. All political parties need to show responsibility and re-engage in a constructive dialogue, with the Assembly as the key forum for political debate. The Assembly continued holding irregular plenary sessions. The frequent absence of Assembly members, including its leadership, often resulted in a lack of quorum for decisionmaking. As a consequence, agenda items were delayed from session to session. Weaknesses and loopholes in the rules of procedures need to be addressed. The fast-track procedure was frequently used (22 out of 115 laws were adopted in this way). This resulted in legislation being adopted without substantive debate or stakeholder consultation, including legislation of vital importance such as the budget. The Assembly needs to establish an ambitious work plan to address the increasing workload and to make up for lost time. The Assembly should plan its work in advance by presenting agendas every 6 months with dates of regular weekly plenary sessions to enable proactive oversight and ensure checks and balances. Parliamentary oversight of the executive remains weak. Parliamentary committees continued consultations with relevant stakeholders, but improvements are required on early notification and follow-up. Furthermore, the Assembly lacks the powers and capacity to effectively supervise the 32 agencies / bodies which report directly to it. The government and the Assembly should implement the recommendations that came out of the review of the independent agencies, which was carried out to rationalise the number of agencies reporting to the Assembly. (see 2.3 Public Administration Reform). The Assembly failed to appoint, in a timely manner or on the basis of merit, professional board members for several independent institutions. The Assembly should use the annual report of the Office of Auditor General to scrutinise government work. The Assembly's Committee of Public Finance, which prepares recommendations for adoption by the Assembly, should also hold hearings of ministers and mayors. The parliamentary oversight of the Kosovo Security Forces and Kosovo's Intelligence Agency continues to be insufficient.

The Ombudsperson has continued to strengthen its capacity to review cases and has become the most trusted institution in Kosovo. The Assembly has appointed 5 deputies to the Ombudsperson, although with much delay. There is a need for the Assembly to review its internal regulations on this. Some progress was made in improving the transparency in and public access to the work of the Assembly. In November 2017, the Assembly launched an electronic tracking system, providing public access to all information and documents on draft laws under its review. Political parties’ finances and campaign funding and expenditure continue to lack transparency and related legislation remains largely unenforced. This undermines public trust in political parties and continues to expose the democratic process to significant risks of corruption and undue influence. A positive step has been taken with the publication of external audits of political party finances for the first time since 2013. However, these audits have confirmed serious violations of political party finance legislation and severe weaknesses in internal financial control by political entities. The legal provisions need to be urgently enforced and the overall legal framework effectively strengthened. Governance The strong polarisation between political parties undermined effective governance during large parts of the reporting period. The new government, appointed in September 2017, expressed commitment to the implementation of EU related reforms, notably the European Reform Agenda. Greater focus should be put on building consensus on key EU-related reforms. The government is over-sized, which erodes coherent policy-making. The government of Prime Minister Mustafa was dismissed following a no-confidence vote in the Assembly in May 2017. Even before, the government's cohesiveness had already eroded, and virtually no significant reforms were made during the first half of 2017. A new government under Prime Minister Haradinaj took office in September 2017. The government coalition is made up of the PDK, AAK, NISMA, AKR parties, Srpksa Lista and includes other minority representatives. With political attention on elections for most of the reporting period, the former and current governments have been unable to pursue a coherent and substantive policy agenda. There is a trend of appointing an excessive number of government members, such as the appointment of 70 deputy ministers in the current government and 45 in the previous one, sometimes without clear attributions. The authorities should consider imposing a cap on the size of the government to prevent such a practice. There are only 2 women ministers. Five ministerial posts are held by minority representatives, 3 of whom represent the Kosovo Serb community, 1 the Turkish community and 1 the Bosniak community. In November 2016, the Kosovo government together with the European Commission launched the European Reform Agenda (ERA), a tool to prioritise the implementation of the Stabilisation and Association Agreement (SAA). The ERA action plan was adopted by the Assembly; however its implementation has lagged behind. Kosovo's updated 2018-2022 programme for the implementation of the Stabilisation and Association Agreement serves as the main tool for planning, coordinating and monitoring EU related reforms. Implementation of the SAA is proceeding but much of the programme is lagging behind. The new government updated the short and medium-term measures in the programme, to make it more realistic, costed and better aligned with the annual work programme. The Assembly, after several attempts, ratified the border/boundary demarcation agreement with Montenegro in March 2018, thus fulfilling one of the key criteria for visa liberalisation. Ministerial attention to legislation in the Assembly, from proposals until adoption, needs to be improved. Ministers' failure to attend plenary sessions and failure to answer parliamentary questions continue to undermine transparency, accountability and communication with the Assembly. The dialogue between government institutions and the Ombudsperson has improved. Followup and implementation of the Ombudsperson's recommendations have further increased overall. However, the government, particularly the Prime Minister's Office on Good Governance and the Assembly, should be more active in ensuring proper follow up to the recommendations of the Ombudsperson. They should also develop effective monitoring systems for follow-up to recommendations of bodies and agencies which report to them. Efforts to further improve the capacity of local government have continued. Following the local elections in October and November 2017, most new municipal assemblies were constituted in a timely manner. Women remain underrepresented in local decision-making positions. While local municipalities have been given more powers, their human and financial resources are often insufficient. The Law on Local Government Finance should be amended by including a specific grant for social services to ensure transparency in the budget and a minimum level of support to social services at municipal level. Municipalities in northern Kosovo continued to improve their relations with central government institutions. The 4 northern municipalities complied with legislation on the adoption of the 2017 municipal budgets. However, due to continued inconsistencies in population figures, a census should be conducted in all 4 municipalities. Civil society Some progress was made in improving cooperation between civil society and the central government. Further efforts are needed to ensure meaningful involvement and cooperation also at local level. The publication of a first government report on public funding of nongovernmental organisations resulted in more transparency. An empowered civil society is a crucial component of any democratic system and should be recognised and treated as such by institutions in Kosovo. Civil society needs to continue to play an important role in the democratic debate and in the design and implementation of public policy. The rules setting up, registering, operating, suspending, terminating, and deregistering Non-Governmental Organisations (NGOs) still need to be clarified. The new draft law on freedom of association of NGOs, prepared in consultation with civil society, has yet to be adopted. Money laundering and anti-terrorism legislation remains restrictive for the NGO sector. In September 2017, a sectoral riskassessment on NGOs was initiated by Kosovo's Financial Intelligence Unit to identify to what extent the NGO sector is at risk of terrorist financing. The entry into force of two regulations setting standards for public consultation and laying down criteria and procedures for the public funding of NGOs has paved the way for improved governance and a more transparent use of public funds. This is part of Kosovo's governmentcivil society cooperation strategy. Nevertheless, several ministries and municipalities are still not ready to fulfil the obligations under the new regulations. They also lack technical capacities to effectively execute the assigned budget in accordance with new regulations and procedures. In March 2017, the government published the first ever report on public funding. This represents a positive step towards greater transparency of public funding. However the type of information provided does not yet allow for a meaningful analysis of budget execution. The legal framework for tax deductions for donations remains ambiguous.

2.1.2 Public Administration Reform Kosovo has achieved some level of preparation in the reform of its public administration. Some progress has been made especially with the review of agencies and (semi) independent bodies, as recommended by the Commission in 2016. However, the action plan to implement the recommendations of the review is still under preparation. There remain concerns over non-merit-based recruitments which affect the efficiency and professional independence of the public administration. In the coming year, Kosovo should in particular: → adopt the legislative package covering laws on the civil service, salaries and the organisation and functioning of public administration in an inclusive and evidence-based process; → adopt and start to implement the action plan to rationalise agencies and (semi) independent bodies, as agreed by the Assembly and the government; → improve legal predictability for citizens and businesses by gradually amending the identified special laws and implementing regulations that contradict the new Law on General Administrative Procedures and address the current backlog of administrative cases. Policy development and coordination The legal basis and institutional structures for a coherent and coordinated policy-making system, including for EU related reforms, are largely in place. Public administration reform is included as a priority area in the government programme for 2015-2018, the National Development Strategy and the National Programme for Implementation of the Stabilisation and Association Agreement. The key weakness with policy development and coordination is that there are too many planning documents and planning is persistently over-ambitious. There is a legal requirement to prepare sector strategies, including costing and sources of funding. However, due to a lack of centralised quality control, sector strategies are rarely aligned with the mid-term expenditure framework and are often financially unsustainable. Some aspects of inclusive and evidence-based policy and legislative development are in place, but in practice problem analysis and justification for government intervention are often missing. While requirements for budget impact assessments have been made, more specific regulatory impact assessments are rarely of sufficient quality. Inter-ministerial and public consultations are regulated, and progress has been made in implementing the minimum standards for public consultations. These standards came into force in January 2017 and were followed in February 2017 by the launch of a web portal for both inter-ministerial and public consultations. In 2016, only 21 % of the primary policy documents and draft laws were published for consultation. The response rate from civil society and the public is still low. Effective public scrutiny of government work is undermined by the lack of clear requirements for both reporting on the implementation of the government’s annual work plan and sector strategies and publishing such reports. Parliamentary scrutiny of the government remains insufficient. Public financial management Kosovo is implementing the public financial management (PFM) reform strategy for 2016-2020. It addresses fiscal discipline, allocation and operational efficiency and crosscutting issues. The strategy, which is up for review in 2018, is complemented by the public procurement strategy adopted in 2017 and the public internal financial control strategy adopted in 2015. The first annual report on the PFM reform strategy was approved in 2017. Progress in implementing the PFM reform strategy has been satisfactory so far. The fiscal rule on debt-to-GDP ratio and the budget balance has been complied with. However, inclusion of an ‘investment clause’ in the Law on Public Financial Management and Accountability has made this rule less transparent. Annual tax collection has slightly improved, and revenue forecasting, commitment control and effective in-year allocation of expenditure have increased budget credibility at the aggregate level. While the overall public debt level as a share of GDP has increased from 14.3 % to 16.8 % of GDP, debt servicing costs have doubled in the past 2 years. The latest assessment with a reference year of 2015 shows a decrease in the grey economy, but the tax and customs administration needs further strengthening to reduce informality and broaden the tax base. Kosovo is committed to improving budget transparency. Reporting on public finances has become more detailed, comprehensive and systematic. The Ministry of Finance has also started publishing comparative financial data on a monthly basis on its website. This is a step towards meeting the standards of the IMF’s Government Financial Statistics Manual 2014. The Kosovo Office of the Auditor General, which audits the government’s financial management, has started to engage more proactively with civil society. However, implementation of the recommendations in the National Audit Office’s Annual Audit Report is modest and needs to improve (see section on Financial control). Public service and human resource management Work continued at government level with the drafting of a new law on civil service. This draft law is part of a legislative package with a law on salaries and the law on the organisation and functioning of public administration. The concept documents of the law on civil service and of the law on organisation and functioning of public administration have been adopted in May 2017, whereas the concept document for the law on salaries has been adopted in March 2018. The current Law on Civil Service formally provides for merit-based recruitment, promotion and dismissal based on objective criteria. However, the loopholes in the law have allowed for contradictory practices, including the conversion of temporary staff into permanent civil servants without a public competition. Political influence over appointments and dismissals continues to be a serious concern, especially for senior management. The Ministry of Public Administration still does not have sufficient capacity to actively supervise recruitment procedures. Non-majority communities remain underrepresented in central public institutions. The independent Civil Service Oversight Board lacks sufficient professional capacity. Around 87% of its recommendations and rulings have been implemented. Administrative judges are increasingly overburdened, leading to delays in rulings, and the further reduction in their numbers at the Basic Court of Pristina is of concern. The Ministry of Public Administration is responsible for central coordination of human resources management, although the current Law on Civil Service law does not explicitly assign such coordination role and it does not oblige ministries to report to the Ministry. A job classification system, which has been rolled out since January 2016, covers now approximately 80% of civil servants. Their positions are harmonised with the job catalogue, which will be aligned to the package of new laws upon their adoption. Although there has been progress with the human resources management information system, which now covers nearly all institutions, it is only partially developed and it is not being used for management and monitoring purposes. This makes it difficult to apply adequate, coherent standards. Kosovo urgently needs high-quality, coherent legislation to regulate remuneration in the public sector to avoid unfair salary structures, abuse of allowances and discretionary decision making in this area. The current system does not provide incentives for retaining and recruiting key professional staff. The government’s decision in December 2017 to increase the salaries of the government cabinet, ministers, deputy ministers and some civil servants in the office of the Prime Minister was suspended at the end of January 2018, pending the opinion of the Constitutional Court. The government's decision triggered wide public criticism and was identified by the Anti-Corruption Agency as a case of concern for potential conflict of interest. Progress has been made in civil servants’ professional development, but the Kosovo Institute for Public Administration has a very limited training budget to provide training for staff across all institutions. The use of performance appraisals has increased, but they continue to have little impact on career development.

Measures and mechanisms to prevent corruption and promote integrity in the public service are in place. Good initial progress has been made with the publication in December 2017 of an annual report on disciplinary measures against civil servants. These measures are taken either by the administration or the court for violation of ethics and anti-corruption clauses. In line with the European Reform Agenda, the government should adopt legislative amendments necessary to enable, on the basis of a court decision, the suspension of the public officials indicted for corruption-related criminal offences and the removal of the public officials convicted for corruption-related criminal offences (see section on Fight against corruption). Accountability of the administration The public administration is fragmented and does not ensure effective lines of accountability; neither between many administration bodies nor within institutions, where there is no clear delegation of responsibilities to middle management. The current law regulating the administration has allowed 46 (semi) independent government agencies to be set up, many with overlapping responsibilities with their parent ministries. Many of these institutions and agencies do not comply with the Law on Civil Service and have more favourable salary conditions than civil servants in ministries doing equivalent jobs (See section on Financial control). During the reporting period the government and the Assembly have not demonstrated sufficient will to jointly address these shortcomings. A comprehensive review of the (semi) independent agencies was published in December 2016. The recommendations of this review will be implemented as part of an action plan that is being developed. The action plan should provide that the government will reduce the overall number of such agencies and change the reporting lines of several bodies from the Assembly to the government. The aim is more efficiency, better lines of accountability and greater oversight. Citizens' right to good administration is being addressed by independent oversight institutions such as the Auditor General and the Ombudsperson. Although there has been marked improvement during the reporting period, not all institutions systematically followed up on their recommendations. The Law on Access to Public Documents aims to ensure the right to access public information, but implementation remains uneven. The Law requires a thorough revision to address the challenging and fragmented implementation. Kosovo should adopt a new law on administrative disputes to further strengthen citizens' right to administrative justice. The Basic Court of Pristina has a substantial backlog of administrative cases, which they should continuously address. This backlog is unlikely to be reduced, especially since the new Law on Minor Offences, which came into effect in January 2017, risks substantially adding to the backlog of the court. The right to seek compensation and the liability of public authorities in cases of wrongdoing are affected by fragmented legislation. No data is collected to monitor actual implementation. Service delivery to citizens and businesses The government promotes a user-oriented administration, but lack of clear vision, leadership and coordination hamper reform efforts. Many institutions have therefore started to implement their own solutions outside the central electronic identification (eID) tools that are being developed. Central tools to collect public and business feedback on service delivery are at an early stage of development. Technical solutions for interoperability are yet to be developed. Legislation on equal access to services exists, but applying it is a challenge, particularly as regards persons with reduced mobility. Simplification of administrative procedures has moved forward with the entry into force of the Law on General Administrative Procedures in June 2017. The government has made an inventory of laws that contain special administrative procedures. These laws now need to be amended to avoid contradictions with the new law. Considerable efforts are needed to inform and educate the Kosovo administration and public on obligations and rights under the new law. Strategic framework for public administration reform The strategic framework for public administration reform consists of 4 strategies on better regulation, policy planning and coordination, modernisation of public administration and public financial management. Implementation has been weak, mainly due to overambitious planning and lack of resources. Two of these strategies were revised in 2017 and 1 is being revised to improve targets and indicators and to ensure more realistic planning. Public administration reform has so far enjoyed strong political support. The Ministerial Council, led by the Prime Minister, has steered the reform process. The financial sustainability of the reforms is of concern, as implementation of the strategies relies heavily on the support of external donors. Despite government commitments, the actual annual budget allocations and provisions in the medium-term expenditure framework are lower than planned in the strategic documents. 2.2 Rule of Law and fundamental rights 2.2.1 Judiciary and fundamental rights Kosovo is at an early stage/has some level of preparation to apply the acquis and European standards in this area. Some progress has been made, particularly with the integration of Kosovo Serb judges and prosecutors and their support staff across Kosovo in the unified Kosovo judicial system, with the investigation and prosecution of some high-level corruption cases and the launch of the application process for recognition and verification of the status of victims of sexual violence during the conflict. As regards fundamental rights, implementation of the relevant laws and strategies is often undermined by inadequate financial and other resources, limited political prioritisation and lack of coordination. The arrest and subsequent deportation of six Turkish nationals legally residing in Kosovo in March 2018 raised questions about the respect of the due process of law. In the coming year, Kosovo should in particular: ®take concrete measures to maximise the independence, accountability, professionalism and efficiency of the judiciary; ®continue to strengthen the track record on the fight against corruption, including final judgments and confiscations, and amend the relevant criminal legislation. Expand the existing IT tracking system to all high-level corruption cases; ®give higher political priority to the protection of human and fundamental rights and ensure adequate capacity and budgetary resources for their implementation, enforcement and promotion, including for key services and assistance to vulnerable groups. Functioning of the judiciary Kosovo is at an early stage in developing a well-functioning judicial system. Some progress was achieved in 2017 in implementing the 2015 justice package laws. The integration of Kosovo Serb judges and prosecutors and their support staff across Kosovo into the Kosovo judicial system was a major achievement in 2017. The judiciary is still vulnerable to undue political influence and rule of law institutions need sustained efforts to build up their capacities. The administration of justice remains slow and inefficient. As the recommendations of the 2016 report have only partly been addressed, they remain valid. In the coming year, Kosovo should in particular: ®continue to strengthen the capacity of judges, prosecutors and support staff and improve the court administration in particular through a functioning case management system that should also perform random allocation of cases and provide reliable statistical data in line with the European Commission for the Efficiency of Justice (CEPEJ) methodology;

®adopt a new law on the disciplinary liability of judges and prosecutors in line with European standards to strengthen accountability; ®continue efforts to reduce the backlog of cases, including by using alternative dispute resolution tools, the use of which shall be properly financed and promoted. Strategic documents Overall, there is slow progress in implementing the Kosovo Judicial Council's (KJC) 20142019 strategic plan, the 2014-2019 communication strategy and the strategy for reducing the backlog of cases. The Kosovo Prosecutorial Council (KPC) has demonstrated more progress in the implementation of its strategic plan for 2016-2018 but it is also lagging behind. Kosovo lacks a comprehensive strategy for the justice sector reforms and a proper mechanism for inter-institutional coordination. There is insufficient coordination of donors by the Kosovo authorities. This leads to inefficiencies, incoherence and duplication of efforts. In November 2016, the government adopted a decision to conduct a functional review of the rule of law sector. However, there have been no significant further developments since its launch. Management bodies Under the Kosovo Constitution, the Kosovo Judicial Council and the Kosovo Prosecutorial Council are responsible for ensuring the independence and impartiality of the judiciary. Their composition and appointment procedures are broadly in line with European standards. The Law on the Kosovo Judicial Council still needs to be aligned with the constitutional amendment of 2016 whereby the majority of its members are to be elected by their peers. While the Prosecutorial Council adopted all internal regulations, the Judicial Council lacks the capacity to create the conditions for implementing the laws of the July 2015 justice package. The budget allocated to both Councils was increased in the reporting period. Meetings of both Councils are open to both the media and the public. Both Councils publish annual reports online, but their reporting mechanisms still need to be improved. In line with the 2015 justice agreement between Belgrade and Pristina, the President appointed 40 Kosovo Serb judges, 13 prosecutors and their respective support staff by decree in October 2017. They began working shortly after this. Prosecutors were assigned to the Basic Prosecution Office in Mitrovica and the judges to the Mitrovica Basic Court, as well as the division of the Court of Appeals. This concludes the process of integration of Kosovo Serb judges and prosecutors into the Kosovo judicial system. Further efforts are required to ensure access to judicial proceedings in the Albanian and Serbian languages across Kosovo and use of both languages in the work of judicial bodies. The Constitutional Court operates on the verge of the quorum with 1 judicial seat remaining vacant for months and 3 more posts to be vacated in 2018. Independence and impartiality Legal safeguards on independence and impartiality are enshrined in the Constitution and the legal framework. Judges cannot be transferred without their consent. The Councils should establish a mechanism to react more efficiently and actively in cases of alleged political interference in the judiciary. The system of case allocation works properly and is managed by drawing lots. Urgent cases are allocated by the courts' presidents. High-profile and sensitive cases are not always processed in a timely manner by the judges assigned to judge them. The Judicial and Prosecutorial Councils are responsible for taking protective measures, to secure the safety of judges and prosecutors. The technical aspects of protection are dealt with by the police. During the reporting period, 3 prosecutors have been granted close protection due to threats they received for cases they were investigating. Accountability Codes of ethics are in place for judges, prosecutors and attorneys but their effective implementation remains weak. Disciplinary procedures are in place, but experience long delays and have proven inefficient. A new law on the disciplinary liability of judges and prosecutors providing for more robust disciplinary mechanisms with rigorous deadlines and clear division of powers and responsibilities is yet to be adopted. Judges and prosecutors may be dismissed by the President on a proposal by the Judicial and Prosecutorial Councils for a number of criminal and disciplinary offences. They are entitled to appeal. In 2017, 7 cases against judges and 9 cases against prosecutors were submitted by the Office of the Disciplinary Counsel to the Judicial and Prosecutorial Councils. The Councils imposed a number of disciplinary measures. There were no dismissals of judges or prosecutors. Judges and prosecutors are obliged by law to declare their assets and gifts received, as well as report any possible conflict of interest to the Anti-Corruption Agency. In 2017, all Kosovo judges and prosecutors submitted their assets declarations on time. Professionalism and competence The President of Kosovo appoints judges and prosecutors for an initial three-year term, following a proposal from the Kosovo Judicial and Kosovo Prosecutorial Councils respectively. The recruitment process and entry exams for judges and prosecutors are organised by the Judicial and the Prosecutorial Councils respectively and are formally meritbased. However, the recruitment of judges in the reporting period raised doubts about the fairness of the process as the rules were altered in the middle of the selection process. Following criticism the process was cancelled and repeated. The recent selection process for presidents of the Supreme Court and the Court of Appeals also raised concerns in this regard. Following two decisions by the Constitutional Court, the Judicial Council amended the regulation on selecting court presidents in July 2017 to comply with the principles of meritocracy and transparency. The subsequent process for selecting supervisory judges of court branches showed improvements. The recruitment system has to become fully transparent and merit-based. The evaluation and verification unit of the Judicial Council operates without a clear legal basis. This is in particular a concern as the unit has a profound impact on the selection processes and heavily interferes with the private life of judges. Merit-based performance criteria and an evaluation system are in place. The Judicial Council adopted the regulation on performance evaluation of judges in April 2017. The Councils are required to carry out performance evaluations for prosecutors and judges with a permanent mandate every third year, but this has experienced delays in the Judicial Council. The Prosecutorial Council evaluated 81 prosecutors and the Judicial Council 66 judges in 2017. To date, most judges and prosecutors have passed the evaluation. The level of professionalism and competence, especially of prosecutors, is still a matter of concern; some are inadequately trained and some are unwilling to apply the training received and to take full responsibility for their cases. A system has yet to be implemented where judges and prosecutors undergo an effective and systematic evaluation based on clear criteria and with the results feeding into their career paths.

Quality of justice In February 2017, the Academy of Justice succeeded the Kosovo Judicial Institute. It is responsible for delivering initial and continuous training for judges and prosecutors and their legal and administrative staff. The training is based on the annual training curricula jointly prepared by the Judicial and Prosecutorial Councils and the Academy following a comprehensive needs assessment. The Academy also prepared an orientation training programme for the recently appointed Kosovo Serb judges and prosecutors. There is an initial 12 months training that both judges and prosecutors must take after they have been appointed. The budget allocated to the Academy of Justice increased by 16 % from 2016 to 2017. Continuous training remains necessary, in particular in specialised areas such as economic crimes, confiscation, public procurement and gender-based violence, including sexual harassment. Judicial education needs to play a more prominent role in the evaluation process. In 2017 Kosovo recruited 52 new judges bringing the overall number to 403, following a number of resignations, retirements and limited recruitments in previous years. Twenty-one new prosecutors were decreed in January 2018 bringing the overall number to 198. There are 22.6 judges and 11.1 prosecutors per 100 000 inhabitants. According to CEPEJ the European average is 21 judges/11 prosecutors per 100 000 inhabitants. The overall budget for the judiciary was EUR 46.4 million in 2017 (EUR 42.7 million in 2016) or 2.32 % of the general budget (2.38 % in 2016). E-justice tools remain underdeveloped and new IT systems in the different justice sector institutions are developed in a fragmented manner without any overall strategy or coordinated monitoring. The IT strategy of the Kosovo Judicial Council expired in 2017. There is a tracking mechanism for high-level corruption and organised crime cases which currently includes 42 cases and should be expanded to include all high-level corruption and organised crime cases. Preparations to establish a case management information system have continued, albeit with delays. Greater commitment is needed to ensure the system's timely implementation in all courts and prosecution offices. Work on a central criminal records registry has recently started and should be completed as soon as possible. More efforts should be made to introduce reliable statistical systems for the judiciary based on CEPEJ standard indicators. Measures to ensure consistency of jurisprudence are limited and need to be strengthened. Verdicts are often not electronically accessible. The online database of legislation with jurisprudence and legal commentaries to assist judges and prosecutors set up by the Kosovo Judicial Institute is still accessible via its website. However, the Institute has been succeeded by the Academy of Justice and the database has not been updated. It needs to be easily accessible and continuously updated and promoted among legal practitioners. This remains particularly relevant for the publication of Supreme Court decisions. A mediation system has been operational since 2008. However, it suffers from low remuneration and a lack of funding which resulted in the closure of 3 of the 7 regional mediation centres. Public awareness or familiarity with alternative dispute resolution tools remains low, but the number of referred and solved cases has increased to about 1600 in 2017. Both the mediation and notary systems need further strengthening. Efficiency Kosovo still needs to be more efficient in dealing with the backlog of cases. Courts face a high number of incoming criminal cases most of which are minor offence cases. This risks courts not being able to dedicate the necessary attention to high-profile and serious cases. The judicial system needs to ensure proper follow-up of all high-profile cases, including cases handed over by the European Union Rule of Law Mission in Kosovo (EULEX). The efficiency of the judiciary is seriously hampered by shortcomings in criminal legislation. Many provisions in the Criminal Procedure Code are too cumbersome and formalistic to permit robust and successful investigation and prosecution. They should be amended (for example the time prescribed by law to investigate cases). Additionally, the low capacity and commitment of some judges to manage court proceedings, to sanction the parties causing delays and to ensure the presence of all parties at sessions leads to numerous postponements of hearings and unreasonably protracted criminal proceedings. These aspects and the tendency by the Appellate Court to send cases for retrial to the basic courts contribute to a lengthy average disposition time (i.e. the average time taken from filing indictment to a judgment). These delays in proceedings, in combination with the preference for detention over other restrictive measures, have led to cases of overly long detention. The organisation of courts and resource allocation rests with the court presidents and heads of prosecution offices. When necessary, judges and prosecutors can be temporarily transferred. This has proven to be an effective tool to bolster understaffed courts and prosecution offices. The number of legal staff directly assisting judges and prosecutors is considered insufficient. Domestic handling of war crimes The war crimes department within Kosovo's Special Prosecution Office continues its work but challenges persist. The Office's workload has increased significantly due to the downsizing and handover of EULEX cases to local prosecutors. There is an acute need for more training, more staff and more translation capacity. Also, the lack of completed war crime case files, the low number of prosecutors (two) working on war crimes, and insufficient cooperation between Kosovo's and Serbia's prosecution offices are jeopardising access to justice, including for survivors of conflict related sexual violence. In cases where the suspects are ethnic Serbs, residing mainly in Serbia, mutual legal cooperation with Serbia remains effectively non-existent. This applies to cases the Kosovo prosecution tries to investigate and cases the Serbian prosecution tries to investigate. Significant concerns remain about the willingness to investigate, prosecute and judge war crimes cases involving former Kosovo Liberation Army (KLA) members. The ongoing preferential treatment of convicted war criminals in Kosovo’s prisons risks affecting witnesses' willingness to cooperate in investigations. The recent pardoning of three ex-KLA members by the President also raised serious concerns. The Kosovo Specialist Chambers, aimed to judge allegations of international crimes committed during and after the conflict in Kosovo as laid out in the 2011 Council of Europe Parliamentary Assembly report, have been set up. In December 2017, 43 Members of the Assembly mostly belonging to the government coalition launched an initiative to abrogate the Law on the Specialist Chambers and the Specialist Prosecutor’s Office. This initiative, which triggered immediate, strong and negative reactions from both the international community and Kosovo media and civil society, raised serious concerns about Kosovo political leaders' commitment to prosecute and judge the aforementioned crimes and honour Kosovo's related international obligations. In November 2017, the government established the secretariat of the Government Commission on Recognition and Verification of the Status of Sexual Violence Victims during the Conflict and allocated budgetary resources for victim's pensions. Since February 2018 victims can apply for recognition and verification to receive individual benefits. The timeframe of the relevant law excludes those who suffered conflict-related sexual violence after 20 June 1999. The Inter-Ministerial Working Group on Dealing with the Past and Reconciliation, established to deal with gross violations of human rights and international humanitarian law during Kosovo's conflict, has failed to develop the strategy on transitional justice and has effectively stopped its work. The President of Kosovo has initiated the establishment of a Truth and Reconciliation Commission. The authorities need to develop a comprehensive approach to dealing with the past linking the work on the Truth and Reconciliation Commission with the government's commitment for a strategy on dealing with the past and other transitional justice initiatives. These processes need to be locally and nationally owned, as well as inclusive, gender, and victim sensitive. Fight against corruption Kosovo is at an early stage/has some level of preparation in the fight against corruption. In the reporting period, some progress has been made on a track record for the investigation and prosecution of high-level cases, including final convictions. Progress was also made on the preliminary confiscation of assets although final confiscations remain low. Corruption is widespread and remains an issue of concern. Concerted efforts are needed to tackle this problem in a comprehensive and strategic manner. As the recommendations in the 2016 report have only been partly addressed, they remain valid. In the coming year, Kosovo should in particular: ®with a view to continue progress on the track record, increase the number of prosecutors in the Special Prosecution Office investigating and prosecuting high-level corruption cases, and provide training to strengthen their capacity to conduct financial investigations, confiscate assets and effectively protect witnesses;

®amend the legal framework (on the suspension and removal of public officials indicted for and convicted of corruption, on declarations of assets and on whistle-blowers) bringing it in line with European standards; ®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 on the basis of an opinion of the Venice Commission to ensure effective enforcement, accountability and transparency. Track record Following the establishment in 2015 of a multidisciplinary team to effectively coordinate efforts to deal with high-level corruption cases and high-profile serious and organised crime, 42 investigations resulted in 31 indictments out of which 24 for corruption and 7 for organised crime, including a number of political and senior public officials. There have been 7 convictions for corruption-related offenses. The IT tracking mechanism should be extended to all high-level corruption and organised crime cases in order to build a universal track record for proactive investigation, prosecution, final convictions and confiscations of criminal assets. Asset confiscations have increased but final confiscations remain low. During the reporting period 26 835 assets with a value of close to EUR 11 million were frozen and seized, while 25 assets were finally confiscated, with an approximated value of close to EUR 1.9 million. Since it was set up, the Anti-Corruption Agency has sent more than 700 cases to the prosecution. Based on more than 80 referrals in 2017, the prosecution has filed indictments in less than 30 cases. The reports that the Agency submits to the prosecution need to be of better quality, and the prosecution needs to improve its capacity and willingness to pursue cases. In 2017, of 4 498 officials obliged to submit annual declarations of assets, only 77 (less than 2 %) failed to do so. The Anti-Corruption Agency sent 50 cases against 50 people for prosecution. Most concerned non-reporting or false reporting of assets, movable property higher than EUR 3 000 and possession of shares in commercial companies and income. The Agency still lacks tools and resources to verify asset declarations. These checks would require closer cooperation and the exchange of data with the police, the tax administration, the Financial Intelligence Unit, the land registry and municipal authorities. In 2017, the Agency handled more than 150 cases of conflicts of interest, of which fewer than 5 cases were submitted for the minor offences procedure and fewer than 5 cases were sent to the prosecution service for criminal investigation. In more than 100 cases, the conflict of interest was prevented or the Agency gave an opinion to the institutions responsible. Most cases dealt with local government officials. In 2017, the Agency handled more than 40 cases on prevention of corruption in public procurement and issued more than 20 opinions, of which around 20 % were not considered. Officials from the north of Kosovo did not meet their obligations regarding the submission of asset declarations to the Anti-Corruption Agency. The situation in the north of Kosovo with regards to corruption poses particular challenges for law enforcement agencies. Transparency and accountability of funding for political parties and campaign financing need to be strengthened. Reports of political parties' finances are still not consistently and fully published and parliamentary and local elections campaigns were conducted without any meaningful financial disclosures by the parties. Independent audits of the political parties’ finances from 2013 to 2016 were carried out - with much delay - during the reporting period. The auditors found that the political parties had significant amounts of unverifiable income and expenditures, persistent violation of financial accounting, internal control and reporting standards and showed instances of being in violation of the tax laws and the Law on the Prevention of Money Laundering. The Central Election Commission and competent authorities should investigate and ensure that legal requirements are effectively enforced and that these audit reports are properly followed up in line with the provisions and sanctions of the law. Political parties should submit their financial reports for 2017 by the legal deadline, which should then be audited properly and in due time. Further to the assessments carried out to determine the risk of corruption – which assess weaknesses of the legal/institutional set-up of various sectors – in the health, education, energy, and mining sectors, corruption risk assessments of the public procurement, judicial and prosecution systems were carried out. Steps need to be taken to effectively address corruption in these particularly prone sectors. There is still no policy to prevent corruption in the private sector. Institutional framework The anti-corruption institutions in Kosovo are not well integrated, their remits overlap and the division of tasks needs to be clarified. Kosovo needs to strengthen inter-institutional coordination mechanisms and bodies and ensure that the institutions have access to the relevant databases (e.g. e-procurement). Prevention measures The main body for prevention remains the independent and specialised AntiCorruption Agency. It is tasked to conduct administrative investigations, check asset declarations, monitor conflicts of interest and public procurement activities and improve awareness. Other bodies with inspecting and auditing powers are the Auditor General, the tax authorities the customs authorities and the Financial Intelligence Unit. Law enforcement Kosovo has specialised institutions for fighting corruption: the National Coordinator against Economic Crime, the AntiCorruption Coordinator appointed by the Chief State Prosecutor and the Police Directorate for the Investigation of Economic Crimes and Corruption, which maintains anticorruption units at police stations and headquarters. Each basic prosecution office has an anti-corruption prosecutor, and two prosecutors are appointed by the Special Prosecutor to handle high-level corruption cases. These cases are dealt with by the serious crime departments of the Kosovo Basic Courts. Investigations and indictments need to be of higher quality, and cases need to be better presented before the courts. The Special Prosecution Office does not have enough specialised staff with the required level of training and competence to deal with financial cases, including procurement cases. In order to increase the number of prosecutors in the Special Prosecution Office investigating and prosecuting high-level corruption cases, the amended Law on State Prosecutor was adopted. Financial investigations are still not systematically launched in cases of corruption and organised crime. Kosovo needs to apply the concept of financial investigations in line with Financial Action Task Force (FATF) standards. Police, prosecutors and judges need to continue receiving specialised training in the fight against corruption, including confiscation of assets and money laundering. Legal framework

Criminal law provisions on corruption are generally in line with relevant European standards, the exception being provisions on confiscation of proceeds from crime, which are too cumbersome and complex to use, and contain unreasonably short deadlines for investigations. The Law on Prevention of Conflict of Interest was revised, to bring it more in line with European standards. Legislation making the suspension and removal of public officials respectively indicted and convicted for corruption mandatory has still not been adopted. A comprehensive review of the current legislation on political party financing should be carried out on the basis of wide public consultations and in accordance with international best practices and standards, particularly those of the Venice Commission. Such a review should aim at ensuring transparency, accountability and effective enforcement and should define sanctions. Kosovo should also implement measures allowing effective investigation of unjustified wealth. There is still no efficient system in place for the declaration, origin and control of the property of senior public officials and the declaration, origin and control of gifts for all official persons. The amendments to both laws should be finalised in order to give the Anti-Corruption Agency more robust powers to verify asset declarations and to make the declaration system more effective in tackling graft. Amending legislation is needed to allow the burden of proof to be reversed for asset confiscation, separating the money laundering offence from the predicate offence (the underlying criminal activity which generated the money laundered) and prohibiting the transfer of criminal assets to third persons. The current Law on Protection of Informants has still not been brought in line with international standards. Whistleblowing mechanisms and protection requirements need to be strengthened in law and in practice. Strategic framework Inadequate financing seriously hampered implementation of the 2013-2017 anticorruption strategy and the revised anti-corruption action plan for the prosecution service. They lacked measurable impact indicators. Although action plans were put in place to fight corruption in vulnerable sectors such as customs, the police, and the tax administration, little has been achieved in practice. The anti-corruption strategy and action plan for 2018-2022 were drafted after a consultation process and adopted in March 2018. The government still needs to demonstrate genuine leadership, the ability to practice advance planning and a willingness to allocate adequate resources to the fight against corruption. Their credibility will depend on the resources allocated to implementing them. A monitoring mechanism should be established to regularly assess the impact of the strategy and action plan. Fundamental rights The legal framework broadly guarantees the protection of human and fundamental rights in line with European standards. However, additional efforts are needed to enforce it. Implementation of human rights strategies and legislation is often undermined by inadequate financial and other resources, particularly at local level, limited political prioritisation and lack of coordination. In the coming year, Kosovo should in particular: ®reinvigorate the Inter-Ministerial Coordination Group for Human Rights as main coordinating body for human rights and reinvigorate the Inter-Ministerial Commission for Return and Community Affairs to improve the implementation of human rights legislation, including the rights of persons belonging to minorities and displaced persons; ®strengthen the implementation of the Law on Gender Equality and the strategy and action plan on protection against domestic violence; ®ensure that the legal framework on the rights of the child is duly implemented; for the draft Law on Child Protection, envisage a budget line, ensure proper accountability of relevant institutions and actors, and integration of the child protection systems at both central and local level; ®advance the protection of cultural heritage by fully implementing and enforcing legislation addressing illegal construction. Adopt the Laws on Cultural Heritage and Religious Freedom and ensure the active functioning of the Implementation and Monitoring Council; ®ensure the implementation of the strategy and action plan for the inclusion of Roma and Askhali including the allocated funding. International human rights instruments form an integral part of Kosovo’s legal framework and are directly applicable, as provided for in the Kosovo Constitution. Kosovo continued to align its legislation with these instruments and maintained its practice of ad hoc reporting. On the promotion and enforcement of human rights, effective implementation of human rights legislation remains a challenge. The Advisory Office for Good Governance lacks the necessary resources and capacity to manage its workload effectively. As a result, it has been unable to perform monitoring and coordination duties for a number of important human rights strategies, and it has not been able to monitor the implementation of recommendations by the Office of the Ombudsperson. The authorities should assess the institutional capacities of the Advisory Office and evaluate how it can meet the requirements to fulfil its mandate. The Inter-Ministerial Coordination Group for Human Rights, established in May 2016 as the main coordinating body for human rights, held its first and only meeting in February 2017. Stronger political leadership and commitment are required to ensure that the Group delivers on its mandate. There has been no significant progress in the development of an overarching human rights strategy incorporating the twelve human rights-related strategies. On the prevention of torture and ill treatment, the situation remains broadly satisfactory and there is a sustained commitment by the Kosovo authorities to prevent such practices in all circumstances. However, there have been a number of complaints and allegations about incorrect treatment of prisoners by correctional staff. Following the establishment of the National Preventive Mechanism against Torture in 2016, the relevant staff in the Ombudsperson Institution has been extensively trained and has started to review and investigate complaints received. Kosovo should further strengthen ongoing efforts to provide adequate medical and psychological support and rehabilitation to all victims of torture and other ill-treatment in Kosovo. There are ongoing efforts to address recommendations issued by the European Committee for the Prevention of Torture and Inhuman or Degrading Treatment or Punishment (see prison system). In the prison system, compliance has continued with the UN Standard Minimum Rules for the Treatment of Prisoners and European Prison Rules. Material conditions vary widely among the different establishments of the Kosovo Correctional Service. Overcrowding is generally not a problem. However, inadequate staffing levels remain a concern. There is a lack of meaningful activities for inmates, such as work and other rehabilitative programmes. Efforts to establish a prisoner-centred integrated sentence management system should continue. There has been no progress in addressing concerns with housing detainees with convicted prisoners at the Mitrovica Detention Centre. Work has begun on revising the Law on Disciplinary Procedures and Measures for Inmates in compliance with international prison standards. Visible progress has been noted on the transfer of prison healthcare from the Ministry of Justice to the Health Ministry. Political pressure and interference continue to affect the decision-making process for the categorisation of prisoners. This allows for preferential treatment and makes it easier to suspend sentences for high-profile prisoners. The authorities need to ensure merit-based recruitment for high-level positions within the Correctional Service. No progress has been made during the reporting period on data protection. The National Agency on the Protection of Personal Data continues to be run provisionally. Since 2016, when the mandate of all five data protection supervisors expired, the activities of the Agency remain limited. This concerns inter alia monitoring the compliance with the data protection law, and carrying out inspections. The law on data protection needs to be amended to address shortcomings in the system and to further align it with the new EU data protection framework.

Legal provisions on freedom of thought, conscience and religion are in place and religious leaders of all faiths continue to interact. However, the draft law on amending and supplementing the Law on Religious Freedom needs to be adopted and include the recommendation by the Venice Commission. The Serbian Orthodox seminary in Prizren continues to function well. In May 2016, the Constitutional Court issued a final judgement on the land dispute case involving the Visoki Dečani monastery and Deçan / Dečane municipality and confirmed the monastery's legal ownership of the land. However, the judgement remains unimplemented and local resistance, including overt defiance by municipal officials, continues to raise concerns. In September 2017, the Appellate Court upheld the dismissal by Pristina Basic Court in 2015 of the lawsuit brought by the University of Pristina in 2012, requesting the demolition of the unfinished church of Christ the Saviour and the transfer of the land back to the university. Municipal authorities in Pristina allocated land for a graveyard for members of the Protestant community. They should continue to demonstrate full respect for the rights of religious communities as stipulated by the law. Freedom of expression Kosovo has some level of preparation in the area of freedom of expression. There has been no progress in this area over the reporting period. Freedom of expression is enshrined in the Constitution and Kosovo benefits from a pluralistic and lively media environment. However, threats and attacks against journalists have continued and developments on other issues have mainly stagnated. The Assembly showed limited commitment to finding a solution for sustainable funding of the public broadcaster, leaving it vulnerable to political pressure and influence. There were no legislative developments on the regulation of media ownership and transparency. Media started publishing the impressum (publisher data). The implementation of legislation remains a challenge, in particular the law on the public broadcaster. Kosovo has done little to address the 2016 recommendations. As the recommendations of the 2016 report have not been addressed, they remain valid. In the coming year Kosovo should in particular: → ensure that cases of physical attacks against journalists and other forms of pressure are promptly investigated and ruled on by a judge; → ensure a sustainable financial solution for the public broadcaster; → implement measures to provide for transparent information on media ownership. Intimidation of journalists The number of threats and attacks against journalists has increased. According to the Association of Journalists of Kosovo, in 2017 alone 24 incidents were reported, twice the number compared to the previous reporting period. Among the cases, 2 editors-in-chief have received death threats and a journalist who was physically attacked was on a later occasion threatened by a member of parliament. Authorities have opened investigations into all these cases but in general, these investigations are slow and there were only 2 final convictions in 2017 regarding threats and attacks in previous years. A more systematic response, including prompt investigation and a timely judgment, is needed to strengthen the protection of journalists. There must be zero tolerance for threats or attacks against media. Legislative environment Freedom of expression and the media are constitutionally guaranteed, and legislation on libel, hate speech and defamation is in line with the European Court of Human Rights case-law. However, the legislative and institutional framework in this area remains fragmented and ineffective. The right of journalists to conscientious objection and the public’s right to reply and correction remain unregulated. Police, prosecutors and judges need proper training in the standards established by the Council of Europe and the European Court of Human Rights for dealing with journalistic sources and materials. The right of access to public information is undermined by the authorities’ fragmented implementation of relevant legislation. Implementation of legislation/institutions Effective implementation of legislation remains a challenge, notably the law on the public broadcaster. Ensuring ethical standards is also proving difficult. The Independent Media Commission has still not started to make preparations for the digital switchover. It monitors the content of audio-visual media but lags behind in initiating cases and implementing fines for legal breaches. It is facing difficulties in meeting its financial obligations, including capital investment. Neither the Independent Media Commission nor the Press Council of Kosovo monitors freedom of expression online. Although this creates an unhindered environment for online media, it also undermines the privacy of individuals, leading to many cases of alleged hate speech, libel and defamation. Such cases need to be thoroughly followed up. Public service broadcaster The public broadcaster, Radio Television of Kosovo (RTK), remains directly state-funded. This continues to undermine its independence, weakens its long-term sustainability and leaves it prone to political influence. The Assembly has yet to find a sustainable financing solution for the RTK, with the legal deadline having expired in April 2015. In October 2017, the Assembly indicated its intention to adopt a completely new law on the RTK, following a European model, though plans remain unclear. A solution for the premises of the public broadcaster is yet to be found. The RTK Board is complete, but its performance needs to be improved. The number of employees has increased through the years, with recruitment procedures being criticised by the trade unions as non-transparent.



Economic factors Media outlets are generally not economically sustainable. Information on media ownership structures, in particular for online media, remains unclear and often fictitious, as most media do not provide information on their finances or real ownership. The fact that media started publishing the impressum (publisher data) in early 2017 is nevertheless a positive development. The lack of a strong private advertising industry makes private broadcasters dependent on other sources of funding, and few are able to operate without strong links to political and business interest groups. Professional organisations/professional conditions

Associations of journalists in Kosovo have been active in condemning incidents and threats against journalists. They have also increased cooperation with the Kosovo Police and Prosecution services on following up on these cases. Their involvement in discussing legislative initiatives on media issues remains limited. The journalist associations largely remain divided along ethnic lines and are considered weak. Journalists often work without contracts, which makes them vulnerable to corruption and prone to self-censorship. Protection of professional standards in journalism is governed by codes of ethics, but neither the Independent Media Commission nor the Press Council has brought any cases for breach of the code. Freedom of assembly and association is guaranteed by the Constitution and citizens have been making use of their rights by demonstrating and protesting against the different levels of government. Individuals and legal entities have the right to establish an association without the need to register the organisation, but most organisations decide to register to gain legal personality. On property rights, in November 2016, the former Kosovo Property Agency, mandated to deal with the resolution of conflict-related property claims, was transformed into the Kosovo Property Comparison and Verification Agency (KPCVA). A strategy for property rights was adopted in January 2017, but implementation remains inadequate. Concerns remain about the lack of implementation of the compensation scheme for owners of former socially owned residential property affected by the conflict. Another challenging issue is the illegal reoccupation of properties, as the Property Agency has no authority to act on re-occupation following a second eviction. The Ombudsperson has recommended amending the Law on the KPCVA to ensure its compliance with the Kosovo Constitution, European and international human rights standards and to allow for multiple evictions to be carried out by the Agency. There are also concerns about fraudulent property transactions and illegal transfers of ownership of properties mainly belonging to displaced persons. Following the discovery of 350 000 constructions built without a permit, the government is revising its policy and the Law on the Treatment of Constructions without Permit. The long-awaited strategy on legalising informal settlements has not yet been adopted. Municipal authorities have made limited progress in adopting three-year social housing plans, thus preventing thus the central authorities from concluding a Kosovowide strategy on social housing. On non-discrimination, some progress has been noted, given that in 2017 Kosovo adopted the Regulation on Institutional Mechanisms for Protection from Discrimination in Government and Municipalities. This Regulation aims to define the duties and responsibilities of the relevant staff at central and municipal level and define their coordination, reporting and cooperation with other institutional mechanisms for protection from discrimination. The tracking mechanism of the Prosecutorial Council still needs to be extended to cover cases of all forms of discrimination, not only those based on ethnicity. Kosovo’s legal framework for equality between women and men is broadly in line with international standards. However, women often face gender-based violence and high discrimination in the labour market, the judiciary and the police. Women are severely underrepresented in decision-making in both the central government and the municipalities. Women also continue to face challenges with property ownership and inheritance. During the reporting period, the government adopted two remaining secondary laws stemming from the Law on Gender Equality. However, effective implementation of the Law is lagging behind. The 2016-2020 strategy and action plan on protection against domestic violence were adopted in December 2016 but their implementation is weak. The National Coordinator for the Protection from Domestic Violence was appointed in January 2018. The role of the Agency for Gender Equality and the role of gender equality officers in ministries and municipalities in policymaking need to be strengthened. Gender-disaggregated data is lacking, and gender mainstreaming in laws and policies remains poor. On gender-based violence, further efforts are needed to address the weak coordination between the police, prosecutors and other players and to address the inadequate monitoring by the police and the courts of protection orders in cases of domestic violence. A legal definition of domestic violence and sexual harassment should be introduced in the Criminal Code. It is also imperative to ensure that shelters for victims of gender-based violence and trafficking in human beings are sustainably funded and that measures are taken for the effective reintegration of victims. On the rights of the child, Kosovo’s legal framework is largely in line with international standards, but implementation remains limited. A child protection law is currently being drafted. Authorities must ensure that the law is followed up with an adequate budget and institutional ownership. Data collection and management remain a challenge for many child-related issues. Child labour continues to be a concern. Efforts to prevent all forms of violence against children are insufficient, and the legal framework does not explicitly prohibit corporal punishment. Foster care must be extended in all the municipalities. The new Educational Correctional Facility inaugurated in September 2017 should help provide further opportunities for juveniles in detention. Children with disabilities face several limitations of their rights, especially access to education and access to adequate intervention services. Institutions should increase financial support to day-care rehabilitation centres and make more efforts to effectively integrate children with disabilities into educational institutions. Little progress has been made on the rights of persons with disabilities and their integration in society remains a challenge due to limited support, inadequate health services, and poor accessibility to existing services. Physical access to public buildings and transport remains limited for persons with disabilities. Inclusive planning and budgeting for appropriate interventions and service delivery are undermined by the lack of accurate data on persons with disabilities. The legal framework on mental health is also incomplete. Implementation of the Law on Blind Persons and the Law on the Status of the Rights of Persons with Paraplegia and Tetraplegia is limited. The same applies for the 2013-2023 strategy on the rights of persons with disabilities. In December 2017, the government adopted the 2018-2020 action plan for the rights of persons with disabilities. The Kosovo Disability Forum became operational in January 2017. The National Disability Council continues to underperform. It should meet regularly and take a more proactive role to improve the wellbeing and promote the right of persons with disabilities. On the rights of lesbian, gay, bisexual, transgender and intersex (LGBTI) persons, Kosovo's Constitution protects against discrimination based on sexual orientation, and a 2015 anti-discrimination law covers both sexual orientation and gender identity. However, further efforts are necessary to ensure their adequate implementation, including through the second LGBTI action plan. In October 2017, the first ever official LGBTI Pride parade was organised in Pristina and was attended by senior representatives of the authorities. Despite these positive developments, prejudice and stereotyping remain widespread in society and in the media. More efforts are needed to counter intolerance towards LGBTI persons, as many remain at risk of discrimination and abuse. Cases of hate crime against LGBTI persons need to be properly investigated and brought to court. The legal framework for legal gender recognition should be improved. Issues of labour and trade union rights are covered in section Social policy and employment. On procedural rights, persons suspected, accused or victims of crime have the right to solid protection under the Criminal Procedure Code, the Law on Police, the Law on the Kosovo Police Inspectorate, the Law on Crime Victim compensation and the Law on Free Legal Aid. They have the right to interpretation and translation, the right to information about their rights, the right to legal advice before and during trials and to legal aid, and the right to communicate with family members, employers and consular authorities. The Law on Crime Victim Compensation is broadly aligned with the EU Directive on Compensation for Crime Victims. A crime victim compensation programme was established in 2016. The commission verifying requests for compensation has so far received seven requests of which two were approved, two were rejected and three are still being processed. Kosovo has an adequate institutional and legal framework for the rights and protection of minorities, including strategies and action plans. However, implementation is weak and there is a large dependency on international donors for support to minority communities. The institutional set-up and mechanisms for protecting minority communities are in place but lack coordination. The Municipal Communities' Safety Councils still need to be established in the north of Kosovo to further strengthen the protection of minority communities. The technical working group, set up to implement recommendations of the Council of Europe's Framework Convention for National Minorities did not convene during the reporting period. Representation of minority communities in the public administration has slightly improved, but the minimum threshold required by the Law on Civil Service has yet to be fully achieved. In October 2017, the new head of the Office of Community Affairs was appointed. It is important that this Office is fully involved in policy-making on the protection of minorities. Stronger support by the government to mainstream language policies is still needed. Implementation of the Law on Languages is still inadequate despite the efforts made by the Office of the Language Commissioner. The government has not yet approved the strategy to promote and protect language rights. A more integrated and inclusive education system with opportunities to attend classes both in the Albanian and Serbian languages as well as minority languages, where relevant, could contribute to better understanding between communities. The overall security situation for minority communities remains relatively stable. However, there are recurring incidents of property theft and burglary, which frequently affect Kosovo Serb returnees in western Kosovo and other minority communities in other municipalities. The insufficient follow-up by judicial authorities increases insecurity and hampers the return process. Law enforcement and judicial authorities should take urgent action to bring the perpetrators to justice. Overall, continued efforts are required to properly and consistently address incitement to hatred and hate crimes against minorities. Increased recruitment of minority police officers would contribute to an enhanced sense of security among the affected communities. The pace of return and reintegration of refugees and displaced persons continues to slacken, with 498 individuals returning in 2017. The non-settlement of property claims by displaced persons is an important factor explaining why there is no enabling environment for returning. The Kosovo Property Comparison and Verification Agency and the Ministry for Communities and Return have to improve their cooperation to facilitate property restitution for the return process. The Constitutional Court decisions on property cases must be fully observed and swiftly implemented. The situation of Roma and Ashkali communities remains difficult. The new strategy and action plan for 2017-2021 for their inclusion in Kosovo society was not adopted until April 2017, 16 months after the previous strategy expired. Just before its adoption by the government, the strategy was amended to exclude from its scope the Egyptian community. The European Commission and civil society organisations have expressed concern that this could lead to a further marginalisation of Egyptian community members. Coordination mechanisms at all levels as foreseen in the strategy need to be fully operational and politically supported. Low completion rates of compulsory education are frequent for Roma and Ashkali children. Enrolment in pre-primary education has increased. The number of students attending college or university remains very low. Learning centres continue to play an important role in reducing the number of drop-outs. The sustainability of additional educational support for vulnerable communities needs to be ensured. Continued efforts are needed to train, accredit and integrate teaching staff from these communities into the education system. Access to public health is free of charge; however, it covers only very basic needs. A budget needs to be allocated in order to meet the housing needs of the communities, and measures to include them into the labour market need to be taken. Kosovo has one of the highest rates in the region of Roma informal work. Efforts need to be undertaken to prevent widespread child marriage affecting especially girls and to prevent child labour. There are still persons who face difficulties with civil documentation often linked to return or repatriation. On cultural rights, relations between the Kosovo authorities and the Serbian Orthodox Church were strained during the reporting period. Cooperation with the Implementation and Monitoring Council ceased, although a recent initiative to revitalise it is promising. The government established the IMC secretariat. The Religious and Cultural Heritage Unit of the Kosovo Police fulfils its mandate in four regions to protect Serbian religious and cultural heritage sites. Some minor incidents of petty theft and vandalism at cultural and religious sites were reported. The Ministry of Culture is engaging with the Serbian Orthodox Church on ways to support the reconstruction of its sites left unfinished by the Reconstruction Implementation Commission. However, the terms of this support need to be clarified to ensure that the Serbian Orthodox Church can exercise full discretion in the management of its properties, while following legal procedures. Kosovo should demonstrate that it respects this right in practice. Kosovo authorities have committed to reinstate all the substantive provisions included in Annex V of the Comprehensive Status Settlement Proposal regarding Serbian heritage in Kosovo. The government proactively liaised with the EU in drafting the cultural heritage strategy for 2017-2027 and adopted it in December 2016. The same is expected for the drafting of the law on amending and supplementing the Law on Cultural Heritage, which should accurately reflect all of Kosovo's commitments under Annex V of the Proposal. The Village Council of Velika Hoča / Hoçë e Madhe and the Cultural Heritage Council in Prizren are operating in accordance with the law. The government is cooperating more closely with civil society in managing of cultural heritage. Incidents of cultural heritage being demolished illegally continued, and sanctions against perpetrators have not been enforced. The task force set up in 2014 to deal with illegal construction in Prizren has not met for over a year. However, in 2017 the Ministry of Culture initiated interventions to preserve monuments at risk. More effort is still needed to ensure cultural heritage throughout Kosovo is adequately protected and managed.

2.2.2 Justice, freedom and security Kosovo is at an early stage/some level of preparation in this area. Some progress has been made, especially in the fight against terrorism, including measures to tackle violent extremism and radicalisation and in preventing terrorist fighters from joining conflicts abroad. In the fight against organised crime, there is more preliminary confiscation of assets. However, final confiscations of assets remain low. Authorities have made progress in managing regular and irregular migration. Further efforts are needed. Kosovo has only partly fulfilled the recommendations of the 2016 report, namely those on the intelligence-led policing approach and the results on the track record. The recommendations on confiscation-related legislation and the expanding of the tracking mechanism to all organised crime cases have yet to be addressed. In the following year, Kosovo should in particular: ®develop a strategic approach towards financial investigations, including by (i) adopting the FATF concept on financial investigations; (ii) automatically implementing financial investigations when dealing with organised crime, terrorism, money laundering and serious corruption cases; (iii) starting financial investigations from the very start of the criminal investigation; and (iv) applying a multidisciplinary and proactive approach to financial investigations; ®continue to str