EUROPEAN COMMISSION Strasbourg, 19.10.2021 SWD(2021) 288 final COMMISSION STAFF WORKING DOCUMENT Serbia 2021 Report Accompanying the document Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions 2021 Communication on EU Enlargement Policy {COM(2021) 644 final} - {SWD(2021) 289 final} - {SWD(2021) 290 final} - {SWD(2021) 291 final} - {SWD(2021) 292 final} - {SWD(2021) 293 final} - {SWD(2021) 294 final}



Table of Contents 1. Introduction 1.1 Context 1.2 Summary of the report 1.3 State of play of the accession negotiations 2. Cluster 1: The Fundamentals of the Accession Process 2.1. Functioning of democratic institutions and Public Administration Reform 2.1.1 Democracy 2.1.2. Public administration reform 2.2. Rule of law and fundamental rights 2.2.1. Chapter 23: Judiciary and fundamental rights 2.2.2 Chapter 24: Justice, freedom and security 2.3 Economic criteria 2.3.1. The existence of a functioning market economy 2.3.2. The capacity to cope with competitive pressure and market forces within the EU 2.4. Public Procurement, Statistics, Financial control Chapter 5: Public procurement Chapter 18: Statistics Chapter 32: Financial control

3. Good neighbourly relations and regional cooperation 4. Normalisation of relations between Serbia and Kosovo 5. Ability to assume the obligations of membership Cluster 2: Internal Market Chapter 1: Free movement of goods Chapter 2: Freedom of movement for workers Chapter 3: Right of establishment and freedom to provide services Chapter 4: Free movement of capital Chapter 6: Company law Chapter 7: Intellectual property law Chapter 8: Competition policy Chapter 9: Financial services Chapter 28: Consumer and health protection Cluster 3: Competitiveness and inclusive growth Chapter 10: Information society and media Chapter 16: Taxation Chapter 17: Economic and monetary policy Chapter 19: Social Policy and employment Chapter 20: Enterprise and industrial policy Chapter 25: Science and research

Chapter 26: Education and culture Chapter 29: Customs union Cluster 4: The Green agenda and sustainable connectivity Chapter 14: Transport Chapter 15: Energy Chapter 21: Trans-European networks Chapter 27: Environment and climate change Cluster 5: Resources, agriculture and cohesion Chapter 11: Agriculture and rural development Chapter 12: Food safety, veterinary and phytosanitary policy Chapter 13: Fisheries Chapter 22: Regional policy and coordination of structural instruments Chapter 33: Financial and budgetary provisions Cluster 6: External relations Chapter 30: External relations Chapter 31: Foreign, security and defence policy ANNEX I – RELATIONS BETWEEN THE EU AND SERBIA



1. Introduction

1.1 Context The European Council granted Serbia the status of candidate country in 2012. Since the opening of Serbia’s accession negotiations in January 2014, 18 out of 35 chapters have been opened, including all chapters in cluster 1 on the fundamentals. Two chapters have been provisionally closed. Serbia accepted the revised enlargement methodology and a first political inter-governmental conference was held in June 2021. This revised methodology focuses on the following aspects: (i) a stronger focus on the fundamental reforms, (ii) a stronger political steer, (iii) an increased dynamism, and (iv) the predictability of the process. The overall pace of negotiations will continue to depend in particular on the pace of rule of law reforms and on the normalisation of Serbia’s relations with Kosovo *. The Stabilisation and Association Agreement (SAA) between Serbia and the EU entered into force in September 2013. Serbia continued to implement the SAA, although a number of compliance issues remain. The Serbian government continued to declare European integration as its strategic goal and restructured the Ministry for European Integration to respond to the requirements of the revised methodology. The government prioritised EU-related reforms in the first half of 2021 and made the rule of law agenda one of its key priorities and fields of action. The government further delivered on a number of important outstanding benchmarks under clusters 3 (competitiveness and inclusive growth) and 4 (green agenda and sustainable connectivity). Therefore the Commission has recommended that the opening benchmarks in these clusters were fulfilled and the clusters should be opened. Effective policy planning and coordination, and sufficient human and financial resources on EU accession across all institutions involved need to be in place to match the government’s renewed political focus. In line with their EU accession objective, the Serbian authorities need to place more emphasis on proactive and objective communication about the EU, which is Serbia’s main political and economic partner. The COVID-19 pandemic continued throughout the reporting period. By early October 2021, Serbia had recorded around 974 000 cases and around 8 000 deaths due to the pandemic and administered around 6.3 million doses of vaccines. The Serbian economy recorded only a mild contraction – 1 % – in 2020, as the impact of the pandemic was mitigated by a strong pre-pandemic momentum, sizeable and timely fiscal and monetary support measures, a low dependency on the sectors of the economy hit most such as tourism, and a relatively short duration of containment measures. The fiscal space created prior to the crisis allowed Serbia to provide substantial fiscal support for crisis mitigation in 2020 and 2021 and to increase capital spending substantially. The EU continued to provide essential support to Serbia. It has allocated EUR 78.4 million to Serbia for socioeconomic recovery and EUR 15 million for immediate needs such as medical equipment, support to vulnerable groups in society, and exceptionally, the hiring of 200 extra medical workers to alleviate the pressure on medical personnel. In addition, almost EUR 12 million has been allocated to Serbia as part of the EU Solidarity Fund. The EU provided a grant of over EUR 27 million to Serbia so it could purchase vaccines from EU Member States, as well as equipment related to the ongoing vaccination campaign. Serbia can also benefit from a EUR 7 million regional EU project implemented by the World Health Organization, to support safe and effective vaccination in the Western Balkans. By early October 2021, Serbia had received around 8.3 million vaccines from different suppliers and had fully vaccinated around 2.75 million people (around 40% of the population). Serbia has become a regional vaccination hub and has donated around 600 000 vaccines to other countries in the Western Balkans, including North Macedonia, Montenegro and Bosnia and Herzegovina. It has also vaccinated thousands of foreign nationals, mainly from within this same region. Given the European perspective of the Western Balkans, the EU has continued to treat the region as privileged partners by associating them with the EU’s mechanisms and instruments, including the Health Security Committee, joint procurement agreements, Union Civil Protection Mechanism, Solidarity Fund, consular assistance in repatriation, and exemption from temporary EU export restrictions of medical equipment. The European Commission continues to recommend that emergency measures taken in the context of the COVID-19 pandemic be proportionate, restricted to what is necessary and limited in time so that rule of law and democratic and human rights standards are upheld. 1.2 Summary of the report As regards the political criteria, the Serbian Parliament and political forces continued to engage in the inter-party dialogue led by the European Parliament, with a view to forging broad cross-party consensus on EU-related reforms, which is vital for the country’s progress on its EU path. However, the political climate during the reporting period remained polarised. For the process to be successful, all political actors need to engage constructively and in good faith, and implement the measures identified in September 2021 by the Co-facilitators from the European and Serbian Parliament during the inter-party dialogue. On elections, Serbia started addressing long-standing recommendations by the Office for Democratic Institutions and Human Rights of the Organisation for Security and Cooperation in Europe (OSCE/ODIHR) and the government reinstated the relevant working group on elections. All key recommendations should be implemented in an inclusive and transparent manner, based on wider political consensus and well ahead of the next elections. The Serbian Parliament’s mandate, which was formally constituted in August 2020, has been limited in time from the start, as the political leadership announced new elections for no later than spring 2022. Overall, the Parliament significantly reduced the use of urgent procedures and adopted a new code of conduct for Members of Parliament. However, inflammatory language against political opponents and representatives of other institutions expressing diverging political views was still used during parliamentary debates. All politicians should counter hate speech and contribute to a political dialogue on EU-related reforms, particularly on the fundamentals of democracy and the rule of law. A newly created Ministry for human and minority rights and social dialogue initiated a series of public dialogues. However, further efforts are still needed to ensure systematic cooperation between the government and civil society. An enabling environment for developing and financing civil society organisations (CSOs) still needs to be established on the ground, as verbal attacks against CSOs continued, including in Parliament. Serbia is moderately prepared in the area of public administration reform. Limited progress was made overall during the reporting period. Serbia still needs to ensure (i) merit-based recruitment and a reduction in the excessive number of acting senior manager positions, (ii) a strong quality control role for the Public Policy Secretariat in policy development and coordination, and (iii) a single mechanism for prioritising all investments regardless of the type and source of financing. Serbia’s judicial system has some level of preparation. Limited progress was made over the reporting period. The constitutional reform of the judiciary was relaunched in December 2020, and is planned to be finalised by the end of 2021. The system for judicial appointments and for evaluating the work of judges and prosecutors needs to be thoroughly revised following the adoption of the constitutional amendments, to allow for merit-based judicial recruitments and careers since the current legal framework does not provide sufficient guarantees against potential political influence over the judiciary. Serbia has some level of preparation in the fight against corruption. Limited progress was made over the reporting period. As regards the prevention of corruption, the Council of Europe’s Group of States against Corruption (GRECO) concluded that its recommendation on the Agency for the Prevention of Corruption was fulfilled in a satisfactory manner. This recommendation concerned the need for an adequate degree of independence and financial and personnel resources as well as on extending the Agency’s competence. Serbia has yet to adopt a new anti-corruption strategy accompanied by an action plan and to establish an effective coordination mechanism to operationalise prevention or repression policy goals and effectively address corruption. The number of indictments and the number of first instance convictions for high-level corruption cases further decreased compared to previous years. Serbia should increase its efforts in addressing these shortcomings and step up the prevention and repression of corruption. In the fight against organised crime, Serbia has some level of preparation. Limited progress was made over the reporting period. Serbia has yet to establish a convincing track record of effective investigations, prosecutions and final convictions in serious and organised crime cases, including financial investigations leading to a track record of freezing and confiscating criminal assets. The number of convictions for organised crime decreased compared to 2019. Serbia should adapt its approach from one based on cases to a strategy against organisations, and from focusing on cases of low or medium importance to high profile cases aiming at dismantling big and internationally spread organisations and seizing the assets. Serbia’s legislative and institutional framework for upholding fundamental rights is broadly in place. However, it needs to ensure the framework is consistently and efficiently implemented. Human rights institutions need to be strengthened and their independence guaranteed, including by means of allocating the necessary financial and human resources. Regarding freedom of expression, limited progress was made by adopting and starting to implement a limited number of measures under the action plan related to the media strategy. However, verbal attacks against journalists by high-level officials continued and cases of threats and violence remain a concern. Most media associations withdrew from the group on the safety of journalists in March 2021, citing hate speech and smear campaigns against journalists and civil society representatives, including by the head of the ruling party caucus in Parliament. These verbal attacks in Parliament took place even after a code of conduct was adopted in December 2020. The overall environment for exercising freedom of expression without hindrance still needs to be further strengthened in practice. On the economic criteria, Serbia has made some progress and is moderately prepared/at a good level of preparation in developing a functioning market economy. The Serbian economy recorded only a mild contraction in 2020 as the impact of the COVID-19 crisis was mitigated by a strong pre-crisis momentum, sizeable and timely fiscal and monetary support measures, the sectoral structure of the economy and a relatively low average stringency of containment measures. External imbalances narrowed in the crisis while their financing continued to be fully covered by Foreign Direct Investment (FDI) inflows. The fiscal space created prior to the crisis allowed Serbia to provide substantial fiscal support for crisis mitigation in 2020 and 2021 and to substantially increase capital spending. Banking sector stability was preserved and lending growth was robust, supported by monetary easing, loan moratoria and liquidity-enhancing measures. The labour market has recorded a further decrease in unemployment in 2020, reflecting in particular lower participation rates during the crisis. There has been some progress with tax administration reforms and the privatisation of state-owned banks. However, other major structural reforms of public administration and state‑owned enterprises (SOEs) continued to advance slowly, prolonging long‑standing inefficiencies. There has been no progress in strengthening the fiscal rules to anchor fiscal policy. The state retains a strong footprint in the economy and the private sector is underdeveloped and hampered by weaknesses in the rule of law, in particular corruption and judicial inefficiency, and in the enforcement of fair competition. Serbia has made some progress and is moderately prepared to cope with competitive pressure and market forces within the EU. The structure of the economy improved further and economic integration with the EU remained high. However, despite some progress, the quality and relevance of education and training do not fully meet labour market needs. Public investment has continued to increase with the aim to address serious infrastructure gaps after years of underinvestment. Although the cost of borrowing for small and medium-sized enterprises (SMEs) has declined, they still face a number of challenges, including a volatile business environment and unfair competition.

On good neighbourly relations and regional cooperation, Serbia overall remained committed to bilateral relations with other enlargement countries and neighbouring EU Member States. However, relations with Montenegro have been marked by continued tensions. In general, Serbia actively participates in regional cooperation. Regarding the normalisation of relations with Kosovo, the EU-facilitated dialogue continued with high-level meetings on 15 June and 19 July 2021, as well as three chief negotiators’ meetings. During the reporting period, both parties appointed new chief negotiators and negotiating teams. Serbia needs to make further substantial efforts on the implementation of all past agreements and contribute to reaching a comprehensive legally binding normalisation agreement with Kosovo. Such an agreement is urgent and crucial so that Kosovo and Serbia can advance on their respective European paths. Concerning Serbia’s ability to assume the obligations of EU membership, the country has carried out important work on alignment with EU acquis over many areas, particularly on taxation and energy. The cluster on internal market is key for Serbia’s preparations for meeting the requirements of the EU’s internal market and is highly relevant for possible early integration measures and the development of the Common Regional Market. Progress was made on legislative alignment on company law, freedom of movement for workers and the establishment and freedom to provide services. However, no progress was made in the areas of free movement of capital, financial services, and consumer and health protection. The competitiveness and inclusive growth cluster has significant links to Serbia’s Economic Reform Programme. Progress was made in the areas of taxation, social policy and employment, industrial policy, scientific and technological development and education. On taxation, social policy and employment, Serbia has also met the opening benchmarks. However, no progress was made on strengthening fiscal rules to anchor fiscal policy. The Green agenda and sustainable connectivity cluster is at the heart of the Green Agenda for the Western Balkans endorsed by Serbia in November 2020 and closely linked to Serbia’s Economic Reform Programme and the Commission’s Economic and Investment Plan. Serbia has met the opening benchmarks on energy. The country made progress on road safety and rail reform. It also adopted a climate law, as well as a package of major energy laws, including new laws on renewables and energy efficiency. The cluster on resources, agriculture and cohesion comprises policies linked to EU structural funds and to developing the capacities to assume the responsibilities of a future Member State. It also comprises some of the key policy areas crucial for ensuring sustainable food systems and helping rural communities to develop and diversify economically. Serbia made progress on food safety by recruiting staff at the national reference laboratories and by drafting an action plan on fisheries; on financial and budgetary as regards the management of own resources; and on regional policy as regards financial management. On the external relations cluster, Serbia’s overall patterns in aligning with the EU’s common foreign and security policy remained broadly unchanged. A number of actions by Serbia went contrary to EU positions on foreign policy. In 2020, Serbia’s alignment rate with relevant High Representative statements on behalf of the EU and Council Decisions stood at 56%, but rose to 61% as of August 2021. Serbia continued to participate in EU crisis management missions and operations under the common security and defence policy. No concrete progress was made towards finalising the accession negotiations with the World Trade Organisation. Serbia continued to significantly help manage the mixed migration flows towards the EU by playing an active and constructive role and cooperating effectively with its neighbours and EU Member States. It also continued to effectively implement the integrated border management strategy and its action plan. 1.3 State of play of the accession negotiations Clusters Chapters / areas State of play Fundamentals All chapters open 23 – Judiciary and fundamental rights 24 – Justice, freedom and security 5 – Public procurement 18 – Statistics 32 – Financial control …Economic criteria …Functioning of democratic institutions …Public administration reform Opened July 2016 Opened July 2016 Opened December 2016 Opened December 2018 Opened December 2015 Internal Market 4 chapters open 1 – Free movement of goods 2 – Freedom of movement for workers 3 – Right of establishment and freedom to establish services 4 – Free movement of capital 6 – Company Law 7 – Intellectual property law 8 – Competition 9 – Financial services 28 – Consumer and health protection Serbia working on fulfilment of opening benchmarks Draft EU Common Position in Council Draft EU Common Position in Council Opened December 2019 Opened December 2017 Opened June 2017 Serbia working on fulfilment of opening benchmarks Opened June 2019 Serbia invited to present its negotiating position Competitiveness and inclusive growth 5 chapters open 10 – Information society and media 16 – Taxation 17 – Economic and monetary policy 19 – Social policy and employment 20 – Enterprise and industrial policy 25 – Science and research 26 – Education and culture 29 – Customs union Draft EU Common Position in Council Opening Benchmarks Assessment Report in Council Opened December 2018 Opening Benchmarks Assessment Report in Council Opened February 2017 Opened December 2016 and provisionally closed Opened February 2017 and provisionally closed Opened June 2017 Green Agenda and Sustainable connectivity No chapter open 14 – Transport policy 15 – Energy 21 – Trans-European networks 27 – Environment and climate change Draft EU Common Position in Council Opening Benchmarks Assessment Report in Council Draft EU Common Position in Council Draft EU Common Position in Council Resources, Agriculture and cohesion 2 chapters open 11 – Agriculture and rural development 12 – Food safety, veterinary and phytosanitary policy 13 – Fisheries 22 – Regional policy and coordination of structural instruments 33 – Financial and budgetary provisions Opening Benchmarks Assessment Report in Council Serbia working on fulfilment of opening benchmarks Opened June 2018 Opening Benchmarks Assessment Report in Council Opened June 2018 External Relations 1 chapter opened 30 – External relations 31 – Foreign, security and defence policy Opened December 2017 Screening Report in Council Not part of a cluster: Chapter 34 – Institutions is currently not applicable for Serbia Chapter 35 – Other Issues / Normalisation with Kosovo opened in December 2015 2. Cluster 1: The Fundamentals of the Accession Process 2.1.Functioning of democratic institutions and Public Administration Reform 2.1.1 Democracy The Serbian Parliament and political forces continued to engage in the inter-party dialogue led by the European Parliament, with a view to forging broad cross-party consensus on EU-related reforms, which is vital for the country’s progress on its EU path. The political climate during the reporting period remained polarised. Inflammatory language against political opponents and representatives of other institutions expressing diverging political views was used during parliamentary debates. This included verbal attacks against civil society organisations and media by representatives of the ruling coalition. All politicians should counter hate speech and contribute to a political dialogue on EU-related reforms in particular on the fundamentals of democracy and the rule of law. Institutions need to improve cooperation with civil society and treat it as an essential partner in reforms and a guarantor of effective checks and balances. Elections

Serbia started addressing long-standing recommendations by the Office for Democratic Institutions and Human Rights at the Organisation for Security and Cooperation in Europe (OSCE/ODIHR) and the government reinstated the relevant working group on elections. All key recommendations should be implemented in an inclusive and transparent manner, based on wider political consensus and well ahead of the announced 2022 elections. It is important that the authorities and all political actors in Serbia continue to engage constructively in the inter-party dialogue led by the European Parliament and implement the measures identified therein. Further to the regular parliamentary elections of 21 June 2020, which were observed by an ODIHR Special Election Assessment Mission, ODIHR issued its final report on 7 October 2020. The report corroborated ODIHR’s key finding of the preliminary statement, notably that the elections were administered efficiently, despite challenges posed by the COVID-19 pandemic, but dominance of the ruling party, including in the media, was of concern. The report also noted that many previous ODIHR recommendations remain to be addressed, including on election administration, media, campaign finance, dispute resolution and sanctions for electoral violations. In December 2020, the government reinstated the working group on elections. The group worked on the amendments of several laws, including the law on election of MPs and the law on financing of political activities. However, gaps remain. Among other issues, the campaign finance regulatory framework still does not ensure transparency of campaign finance and the effectiveness of oversight. Work on meeting all ODIHR recommendations should be stepped up in a transparent and inclusive manner, to make use of the period between elections for a comprehensive and inclusive review of the electoral framework. On 1 March 2021, the Serbian and European Parliaments officially kicked off the second phase of the Inter-Party Dialogue. In April-June, the European Parliament held several rounds of online consultations with all the relevant stakeholders. Two plenary meetings with wide political participation were held in July and September in Belgrade focusing on electoral conditions, but also on improving the wider political climate and dialogue. At the September plenary meeting, the Co-Facilitators from the European and Serbian Parliament reached an agreement on a working document containing 16 measures to increase trust and confidence in the electoral process, with a set of concrete actions and timelines. The Government and the ruling party expressed their intention to implement the measures. On 14 October 2021 the Government adopted a decision on formation of a temporary supervisory body for monitoring media during the electoral campaign, as foreseen in the working document. A number of opposition representatives did not agree to the final document that was finally presented as the ownership of the Co-Facilitators and did not commit themselves to participating in their implementation. The authorities held a separate track of local consultations with political actors who refused mediation by the European Parliament. Following parliamentary elections in June 2020, the mandate of the newly elected Parliament has been limited in time from the start as the political leadership announced new elections for no later than spring 2022. The Parliament overall reduced urgent procedures to 9% in 2020. The Parliament adopted a new code of conduct for Members of Parliament (MPs); however, it did so under urgent procedure and without consulting the public or relevant international organisations. Inflammatory language against political opponents, journalists and civil society was used during plenary debates. The code of conduct should be used more effectively in preventing and sanctioning offensive language. The Parliament and political actors should continue to engage constructively in the inter-party dialogue. Parliament Following elections in June 2020, the new Parliament was formally constituted at the beginning of August, while the parliamentary leadership was elected and working bodies constituted in October. In the new Parliament, the ruling coalition of the Serbian Progressive Party list (SNS, 188 seats), the Socialist Party of Serbia list (SPS, 32 seats), and the Serbian Patriotic Alliance (SPAS, 10 seats), which later merged with the SNS, controls 230 of the 250 parliamentary seats. Two national minority parties also support the government, while several national minority representatives and one independent MP (together seven seats) act as the opposition. Out of six deputy speakers, two are women and two belong to national minorities. Women chair five out of 20 committees. Of 250 MPs, 98 are women – the largest number so far – and there is an active women parliamentary network. The new Parliament – plenary and the committees – resumed physical sessions in October 2020, with epidemiological measures in place. The Parliament has no annual working plan. The weekly and monthly planning has improved due to regular weekly meetings of the parliamentary Collegium (composed of speaker, deputy speakers and chairpersons of parliamentary groups). The use of urgent procedures has been significantly reduced to 9% since March 2020, compared to 19% in the previous period: out of 133 laws, 12 were adopted under urgent procedure. In the first half of 2021, out of 75 laws only two were adopted under urgent procedure. The Code of Conduct for Members of Parliament, however, was adopted under urgent procedure and without public consultation, thus limiting the transparency and inclusiveness of the process. There was a heavy legislative agenda. The vast majority of bills continued to be tabled by the government. Three public hearings were held in 2020 and 12 in the first half of 2021, out of which seven were in the context of constitutional changes. Committees held reviews of regular periodic reports by the relevant Ministries. Regular monthly sessions with MPs questions to the Prime Minister and Ministers were held. Twice a week, at the outset of the plenary, MPs seek information and explanation from the government. There were 133 such requests in 2020, and 84 were answered. The parliamentary plenary debated regular annual reports by independent bodies. However, the Parliament should support the work of the independent regulators more systemically, through regularly monitoring the implementation of their recommendations. In December 2020, for the first time, the European Commission report on Serbia was debated and related conclusions adopted in the plenary, following the debate in the European Integration Committee. In April 2021, the Committee also debated the European Parliament’s resolution on Serbia, with the participation of the European Parliament rapporteur. The European Integration Committee held debates with the participation of the Ministry for EU integration, including one on the revised enlargement methodology, and related plans for the restructuring of the Serbian negotiating team. In May and June 2021, the Committee endorsed four draft negotiating positions (on chapters 19, 10, 16 and 15), tabled to the Committee by the government. In June 2021, the Parliament, with the participation of the President, debated the EU-facilitated dialogue with Pristina. The Parliament has constructively engaged in the second phase of the inter-party dialogue led by the European Parliament. For the process to be successful, all political groups need to engage constructively and in good faith, and implement the measures identified during the inter-party dialogue. The Parliament adopted a new code of conduct for MPs in December 2020. Nonetheless, inflammatory language against political opponents, prominent public figures expressing diverging political views, investigative media, civil society organisations, and Members of the European Parliament continued to be used in parliamentary debate. In March 2021, the Parliament’s administrative committee, in charge of overseeing the application of the newly adopted code of conduct, rejected the first cases of complaints raised by civil society representatives. This committee then found, for the first time in April 2021, a violation of the code, in a case of verbal attacks against politicians from the opposition. In September 2021, Parliament adopted a revised version of the code of conduct which was prepared with the aim to follow-up on the GRECO recommendations. The code of conduct should be used more effectively in preventing and sanctioning offensive language, for example through the establishment of an independent oversight body. New rules of procedure still need to be adopted, in line with best standards and practices. The effectiveness, autonomy and transparency of the Parliament, including the role of the parliamentary opposition, needs to be unambiguously strengthened, in order to ensure the necessary checks and balances. Governance The Serbian government continued declaring EU membership as a strategic goal. Ahead of the inter-governmental conference in June 2021, the government, in particular the Ministry for EU integration supported by line-Ministries, delivered on accession related documents very quickly. Serbia also restructured its EU negotiating team to reflect the revised enlargement methodology. Still, sufficient human and financial resources on EU accession need to be in place across all institutions involved to match the renewed political focus by the government. In line with the EU accession objective, the Serbian authorities need to place more emphasis on proactive and objective communication on the EU, which is Serbia’s main political and economic partner. As a result of the regular parliamentary elections in June 2020 and the constitution of the new Parliament, the Serbian government was elected and sworn in on 28 October 2020. The new cabinet has 24 members, out of whom 11, including the Prime Minister, are women. There are three new portfolios: the Ministry for Human and Minority Rights and Social Dialogue, Ministry for Family Care and Demographic Issues and Ministry for Rural Care. Rule of law and accession-related reforms are among the six key programmatic priorities of the new government. The government prioritised EU-related reforms in the first half of 2021 and made the rule of law agenda one of its key priorities and fields of action. However, Serbia’s strategic choice of EU accession needs to be communicated more pro-actively and unambiguously in public debate. Further efforts are needed to promote EU values in public debate and in practice. In December 2020, the government tabled to the Parliament the initiative for the constitutional revision (see under judiciary). There was regular dialogue and consultations between the Prime Minister and the National Convention for the EU on accession-related issues such as the rule of law, sustainable growth, energy and environment. The Convention was formally invited to contribute to the revision and to the drafting of several important laws. In April 2021, the Prime Minister for the first time held a press conference to inform the wider public of the government’s activities in the rule of law area. Further efforts are however needed in order to improve the transparency and inclusiveness of the reform process, particularly on issues related to EU accession. The Serbian negotiating team, headed by the Minister for EU integration, was restructured to reflect the revised enlargement methodology. The new structure aims in particular at facilitating coordination between line-Ministries under the new cluster approach and increase the political steer. It is important that sufficient human and financial resources are allocated across all institutions involved so that Serbia can meet its objectives on EU accession negotiations. The autonomy and role of independent bodies needs to be fully acknowledged and respected, and their recommendations followed up thoroughly and in a timely manner. The Ombudsman Office needs to be strengthened and its independence guaranteed, including via the allocation of the necessary financial and human resources. As regards local self-government, the law on Vojvodina’s financing resources has still not been adopted, despite being provided for under the Constitution. Local administrative capacity is still weak and significant disparities between municipalities persist. Responsibilities still continue to be borne at local level without proper analysis of the capacity and human/financial resources required. In June 2021, the government adopted for the first time the programme for local government system reform, which aims to address deficiencies in the functioning of local government.

Civilian oversight of the security forces The Parliament remains responsible for the civilian oversight of security services. The Law on access to state security files has not yet been adopted. The relevant parliamentary committee continues to be responsible for the civilian oversight of the security sector. The Committee reviewed regular periodic reports by the civilian and two military security agencies, as well the activity report of the General Inspector of the Ministry of Defence. Because of the pandemic, no field visits to security agencies were organised in 2020. A law on the access to the state security files still needs to be adopted. Civil society A newly created Ministry for human and minority rights and social dialogue initiated a series of public dialogues. However, further efforts are still needed to ensure systematic cooperation between the government and civil society. An enabling environment for developing and financing civil society organisations (CSOs) still needs to be created on the ground, as verbal attacks against CSOs continued, including in Parliament. An empowered civil society is a crucial component of any democratic system and should be recognised and treated as such by state institutions. CSOs and human rights defenders continued to raise awareness about civil and political rights. This takes place in an increasingly polarised environment. In December 2020, the Financial Action Task Force (FATF) expressed concerns regarding the allegations that Serbia had misused in July 2020 its law on the prevention of money laundering and the financing of terrorism with the aim to restrict or coerce civil society actors for their work and criticism of the government. In its plenary session of April 2021, the Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism of the Council of Europe (MONEYVAL) called on all members to ensure that the FATF Recommendations are not intentionally or unintentionally used to suppress the legitimate activities of civil society (See Chapter 4 – Free Movement of Capital, and Chapter 24 – Justice, Freedom and Security). Verbal attacks and smear campaigns against several CSOs and their financing continued in tabloid newspapers, as well as in Parliament even after a code of conduct was adopted there in December 2020. Organisations and individuals that criticise the authorities in developments related to the rule of law, and increasingly to environmental protection, are under particular pressure. The legal framework for cooperation between the government and CSOs is broadly in place; its implementation needs to be improved and systematised (See Public Administration Reform). A number of CSOs have reported that the time given for public consultations was still too short, or that their comments on draft laws were not given sufficient consideration and follow‑up. In October 2020, the newly formed government created a Ministry for Human and Minority Rights and social dialogue. It took over, among others, the competencies of the Office for Cooperation with Civil Society and initiated a series of public dialogues on various topics of general interest, gathering members of the government, independent bodies, international organisations and CSOs. The National Convention on the EU has continued to monitor and assess the progress of accession negotiations. A national strategy and action plan to help create a positive environment for CSOs have still not been adopted. A council for civil society cooperation has yet to be set up. In order to mitigate the economic consequences of the COVID-19 pandemic, Serbia adopted a regulation on fiscal benefits and direct payments to economic entities recognising CSOs as potential users of economic aid. 2.1.2. Public administration reform Serbia is moderately prepared as regards the reform of its public administration. Overall, limited progress was made in this area during the reporting period. The three Commission recommendations of last year remain still valid. On human resources management, there was no progress in reducing the excessive number of acting senior manager positions. As regards policy development and coordination, there is still no mechanism in place to verify that the Public Policy Secretariat’s comments have been incorporated into the final draft versions of laws and policy documents submitted for government’s approval. On public financial management, the recommendation to develop a single mechanism for prioritising all investments regardless of the type and source of financing still needs to be fully addressed. There is an urgent need to address all those shortcomings. Other developments include the adoption of a new PAR strategic framework for the period 2021-2030. The administration also swiftly responded to the COVID-19 crisis through the effective provision of related e-services. In the coming year, Serbia should in particular: ®ensure that recruitment procedures are launched for all the acting posts in order to reduce the excessive number of acting positions, and allocate sufficient resources for effective, merit-based recruitment processes; ®ensure a strong quality control role for the Public Policy Secretariat to allow for the effective implementation of the law on the planning system; ®put in place a unified, comprehensive and transparent system for capital investment planning and management. Strategic framework for public administration reform In April 2021, the government adopted a new public administration reform (PAR) strategy 2021–2030, with its action plan 2021-2025. The new strategy consists of six pillars covering the areas of the EU Principles on Public Administration. It includes, for the first time, a pillar dedicated to local self-government reforms. Out of the six pillars, three are operationalised further by the aforementioned action plan, and the other three are covered by separate programmes, namely the public financial management (PFM) reform programme adopted in June 2021, and the programmes for local self-government and for improving public policy management and regulatory reform which had not been adopted in the reporting period. Civil society organisations were actively involved in the preparation of the new strategy. Political support for public administration reform continues to be ensured through the PAR Council, chaired by the minister in charge of public administration. Two meetings of the PAR Council were held in 2020. Financial sustainability remains an issue of concern due to reliance on donor funding. Policy development and coordination

Institutions are in place for a central government policymaking system, including for the European integration process. The structure for coordinating the latter was changed in April 2021 in order to take into account the revised enlargement methodology. Coordinators were appointed for each of the six negotiations clusters. The law on the planning system sets out clear rules for developing, monitoring and reporting on sector strategies but is not systematically applied. There is still no mechanism to verify that the Public Policy Secretariat’s comments have been incorporated and that the final draft versions of laws and policy documents are compliant with the legislation. A limited number of policy documents has been entered so far in the unified information system, thus limiting the number of implementation reports deriving from it. The legal requirement to have mid-term plans adopted by all institutions as of January 2020 has not yet been met. Only three ministries, the Public Policy Secretariat and three public service agencies adopted and published their mid-term plans for the 2021-2023 period. The national plan for the adoption of the EU acquis (NPAA) and the government annual work programme need to be better synchronised. The capacity for inclusive and evidence-based policy and legislative development, including when aligning with the EU acquis, still needs strengthening. Administrative data collection and its systematic use for policy and law-making needs to be further improved across the administration. The methodology on impact assessments is not yet consistently applied in practice. The Public Policy Secretariat’s acceptance of ‘partial compliance’ with the methodology does not contribute to the alignment with the legal requirements nor to the overall quality of the impact assessments. Better coordination between the Ministry of Finance and the Public Policy Secretariat is needed to ensure that there are no discrepancies between financial impact assessments and financial information in the regulatory impact assessments. Regarding inter-ministerial consultations, official high-level mechanisms still do not exist for resolving possible conflicts between services before they reach the government level. The regulatory framework for public consultations is in place, the scope of public consultations on public policy documents improved, and the government adopted a decision in June 2021 to launch a new ‘e-Consultations Platform’. However, its consistent application regarding draft laws and regulations is not yet ensured. There is no body mandated to scrutinise the manner in which a public consultation process was organised. As regards the legal obligation to inform on the results of public consultations, consultations reports are not systematically published nor are explanations on the acceptance or not of comments systematically provided (See Civil society). As regards public scrutiny of government work, no reports on the government annual work programme, NPAA, or sector strategies – except on the action plan of the PAR strategy and on the PFM reform programme – were published in 2020. The government’s website still does not provide a direct access to monitoring reports on implementation of key government planning documents. Agenda, minutes and conclusions of government sessions are not published either. Public financial management A new PFM Reform Programme 2021-2025 was adopted in June 2021. A comprehensive package of monetary, fiscal and financial emergency measures was implemented to mitigate the negative economic impact of the COVID-19 pandemic. The cost of these measures has increased the overall fiscal deficit and the public debt. However, the government succeeded in keeping the public finances on a sustainable path in line with the medium-term fiscal goals. The capital budget execution level continued its upward trend but a unified, comprehensive, effective and transparent system for planning and management of capital investments needs to be put in place. Serbia needs to apply the full methodology of the decree on capital projects management, as well as public procurement procedures, to all capital investments regardless of the type of investment or the source of financing, and ensure that effective procedures are in place to guarantee the integration of capital projects’ planning, appraisal and implementation in the budget process. Furthermore, the government’s investment planning and management capacity needs to be improved. This includes the capacity for public assets management and for assessing possible fiscal risks for the investment projects funded by loans from third countries. The link between the government programme and sector strategies and operational plans of budget beneficiaries remains weak. The improved legislative framework for public procurement and internal control needs to be implemented in practice. The State Audit Institution has continued to increase both the coverage and quality of their audits of public funds as well as its relations with stakeholders (See Chapters 5 – Public procurement, and 32 – Financial control). Serbia did not progress in improving budget transparency. Neither a transparency roadmap, a pre-budget statement, nor a mid-year report are produced and published. The Ministry of Finance does not publish the budget execution profile at the beginning of the year, preventing any analysis of deviations from targets. Public participation in the budget process and budget oversight by the legislature needs to be improved. The 2021 budget was adopted in line with the budget calendar but still with very limited qualitative assessment and debate among the stakeholders. Public service and human resources management The civil service legislation provides for merit-based recruitment and dismissal procedures, but too much discretion to heads of institutions in setting up selection committees. The enforcement of the mandatory competition procedure for recruiting temporary staff in cases of increased workload was postponed from 2021 to 2023. The possibility to convert certain categories of temporary contracts into permanent civil service contracts needs to be considered carefully in order to avoid possible abuse. Grades received by civil servants in the first year of implementation of the new performance appraisal system remain inflated. A high share (72%) of disciplinary decisions are annulled by courts. The lack of transparency in, and respect for, the merit-based recruitment procedure provided for under the Serbian legislation for senior civil service positions remains an issue of serious concern. The legal provision allowing for appointments to ‘acting positions’ for 6 months (with a maximum extension of 3 months) is mostly misused, including in a retroactive manner. As of June 2021, 62% (March 2020: 56%) of filled senior positions were held on an acting basis. Despite the amendments to the law on civil servants restricting the appointments to already existing civil servants as of 1 July 2019, the government continued to appoint non-civil servants on an acting basis. More than half of appointed acting posts after the set deadline were not civil servants. The limited capacity of the High Civil Service Council remains a concern as regards the need to organise a large number of competitions in order to replace at a reasonable speed all the existing acting managers. Clear political will, sufficient resources and effective monitoring by the responsible institutions, are necessary to address this issue as a matter of urgency. Current practices, where appointment decisions for management positions can be overturned by a personnel committee of the government after the selection process has been finalised at the institutional level, continue to lack transparency. As regards the new competency-based human resources management system, the success rate of tested competences is extremely high (over 90%). The Human Resources Management Service needs to strengthen its capacity to coordinate and harmonise the work of human resources units of the line institutions. There are not yet reliable statistical data and annual reporting as the setting up of a new human resources management information system is delayed. The current system does not interact with other national databases such as the treasury payroll registry. No progress was made regarding remuneration of civil servants. The implementation of the 2016 law on the salary system in the public sector, which introduces the principle of equal pay for equal work for all public sector employees, is further delayed as it was again postponed for another year, to 2022. The law on maximum number of employees in the public sector was no longer in force in 2020. However, restrictions in the number of employees remained in place through the budget system law. With regard to professional development, the National Training Academy for Public Administration continued organising training for all public officials, including at the local self-government level, through quickly adapting to online trainings and webinars. Implementation of a comprehensive professional development programme for senior civil servants was postponed to the second half of 2021. Further efforts are needed to ensure that the existing integrity plans in the judiciary and in the public administration are fully implemented. The integrity of the civil service remains undermined by the aforementioned excessive number of acting senior manager posts. There are no tangible improvements in relation to anti-corruption efforts at local level. Accountability of administration The structure of the public administration has yet to be streamlined. The lines of accountability between agencies and their parent institutions continue to be blurred, contributing to overlapping functions, fragmentation, and unclear reporting lines. In spite of the existence of the law on public agencies, almost all agencies of this type have their status regulated differently with a special law. Political commitment to managerial accountability, performance management and systematic delegation of responsibilities is still needed. The planned establishment of a registry of holders of public powers has however been postponed to 2025 under the new PAR strategic framework. The overdue decree on organisation and systematisation of work posts, introducing so-called “analytical units”, was adopted in March 2021. It now needs to be enforced in practice by promptly establishing such units with adequately trained staff. Institutions still have a bureaucratic and process-oriented approach to planning, budgeting and the reporting of their activities (See Chapter 32 – Financial control). The Ombudsman has a key role in ensuring citizens’ rights to good administration. According to the Ombudsman’s 2020 report, cases of violations of principles of good governance represent the second largest number of cases immediately after the violation of economic and property rights. The Ombudsman’s annual report was discussed in a Parliament plenary session and conclusions were adopted in December 2020 (See Governance). Citizens’ right to access public information is regulated in the law on access to information of public importance. Administrative silence, whereby public authorities fail to properly act on the citizens’ information requests, remains a major issue. Enforcement of the decisions taken by the Commissioner for Information of Public Importance has yet to be ensured (See Chapter 23 – Fight against corruption). On citizens’ right to administrative justice, the review of judgments of the administrative court is possible only in a limited number of cases and only through extraordinary legal remedies. Establishing a two-instance network of administrative courts to ensure access to justice, as well as an appeal procedure, are foreseen for 2023 in the revised chapter 23 action plan. Access to justice is negatively affected by the continuous backlog of cases standing at nearly 8,000 cases, with around 5,000 electoral cases received in 2020 due to the parliamentary elections. Court caseload increased further, owing to the continuous expansion of jurisdiction and a relatively small number of judges. The new free legal aid law has been implemented since October 2019. Available data indicate a gradual increase in the use of legal aid, predominantly in civil and administrative cases and for victims of domestic violence. Only one third of local municipalities and cities have established specialised units for free legal aid so far (see Fundamental rights section).While the citizens’ right to seek compensation is regulated, still no statistical data is collected to monitor its implementation. Service delivery to citizens and businesses

Creating a more user-oriented administration remains a government’s priority. Progress in developing e-services continued, which facilitated to a great extend the response of the administration to the COVID-19 pandemic. The e-government portal served as a single point of contact to citizens for testing and vaccination services. The central population registry, connecting thirteen official databases, was rolled out in November 2020. A full set of by-laws related to the law on e-government has yet to be adopted. The government has started to implement the new e-government programme. Service delivery was included for the first time as a separate pillar of a newly adopted PAR strategy. The e-government office and the Prime Minister’s Delivery Unit have continued to ensure coordination and leadership in this area. Monitoring of e-services implementation is needed. Digital signatures are being used but the share of the population who avail of this service is still limited. The legal framework for simplification of administrative procedures is in place. However, regulatory uncertainty for individuals and businesses remains due to persisting delays in aligning the sector legislation with the law on general administrative procedures. The capacity of the Ministry of Public Administration and Local Self-Government to efficiently oversee the implementation of this law remains limited, and overlaps exist with the role of the Public Policy Secretariat. This Secretariat started to implement the ‘e-paper’ programme 2019-2021 for the optimisation of administrative procedures and regulation, including the adoption in April 2021 of a law on the register of administrative procedures. By the end of 2020, 136 procedures were simplified and 27 digitised. However, the e-paper programme is not clearly linked with the process of aligning sector legislation and/or special procedures with the law on general administrative procedures. 2.2. Rule of law and fundamental rights 2.2.1. Chapter 23: Judiciary and fundamental rights The EU's founding values include the rule of law and respect for human rights. An effective (independent, quality and efficient) judicial system and an effective fight against corruption are of paramount importance, as is respect of fundamental rights in law and in practice. Serbia has some level of preparation in applying the EU acquis and the European standards in this area. Limited progress was made in the reporting period. The constitutional reform aimed at strengthening the independence of the judiciary was relaunched in late 2020, and the parliamentary procedure started in spring 2021. Serbia undertook further efforts with the aim to finalise the procedure still this year. The current legal framework does not provide sufficient guarantees against potential political influence over the judiciary. Serbia has a very weak track record in the processing of war crimes cases. Overall, unambiguous and determined steps on prevention and repression of corruption remain to be taken. Serbia’s legal framework on fundamental rights is broadly in place but its implementation is inconsistent. Regarding freedom of expression, limited progress was made by adopting and starting to implement a limited number of measures under the action plan related to the media strategy, while verbal attacks against journalists by high-level officials continued. Serbia adopted a revised action plan for chapter 23 in July 2020. It sets out Serbia’s commitments, including in terms of timelines, in order to meet the interim benchmarks of the EU common positions for this chapter. In general, indications of delays in this report are measured against the deadlines established by Serbia itself in the revised action plans. As a consequence qualified delays (e.g. “serious delays”) noted in previous non-papers are not used in the current report. This “resetting of the clock” does not imply that previously noted long delays have necessarily disappeared. The first meeting of the new inter-institutional coordination body was held in April 2021. A new methodology aimed at improving monitoring and reporting was presented to 25 representatives of various institutions. The second meeting took place in July 2021. The publication, on the website of the Ministry of Justice, of reports on the progress in the implementation of the revised action plan for chapter 23 for the Serbian public resumed in August 2021 after an interruption in December 2018. There is a need to improve efforts in implementation of the Action Plan on Chapter 23 including through consultations focused on the most demanding challenges with more involvement of all relevant stakeholders. Functioning of the judiciary Serbia has some level of preparation in the area of the judiciary. Limited progress was made overall. The administrative capacity of the High Judicial Council was strengthened and its internal organisation improved. The number of old enforcement cases continued to decrease and court practice was further harmonised. Last year’s recommendations still need to be implemented and therefore remain valid. The current legal framework does not provide sufficient guarantees against potential political influence over the judiciary. The constitutional reform in the area of the judiciary was relaunched in December 2020, when the government submitted the initiative to Parliament. A broad and constructive discussion with relevant stakeholders has been launched, in order to define the best solutions bearing in mind the Venice Commission recommendations, in line with European standards and based on a wide and inclusive consultation process. The Parliamentary Committee has adopted the draft text prepared by the expert working group on 6 September 2021 as basis for the next round of public debates, taking place from 13 to 17 September. The text was adopted in the parliamentary committee on 21 September sent to the Venice Commission for its opinion. On 15 October, the Venice Commission issued a favourable opinion of the draft text, including key recommendations to be addressed. Once finalised, the text will be adopted in Parliament and put for a referendum, planned for December 2021. The timeline to complete the process was set in the action plan for chapter 23 for the end of 2021. There was also no progress on amending the laws on the High Judicial Council and the State Prosecutorial Council so that they are empowered to fully assume their independent role to proactively defend judicial independence and prosecutorial autonomy. These amendments require the constitutional amendments to be passed, as does the adoption of the implementing legislation in particular in the area of judicial appointments and promotion. In order to mitigate the impact of this legislative stalemate the Councils amended their rules of procedure in spring 2021 and enhanced their capacities, however it remains to be seen, if these changes will result in reducing political influence over the judiciary. There is also still no human resources strategy in place, although preparatory work is ongoing. In the coming year, Serbia should in particular: ®strengthen the independence of the judiciary and the autonomy of the prosecution, including through amendments to constitutional and legislative provisions related to the appointment, career management and disciplinary proceedings of judges and prosecutors; ® amend the laws for the High Judicial Council and the State Prosecutorial Council, so that they are empowered to fully assume their role to proactively defend judicial independence and prosecutorial autonomy in practice in line with European standards; ®adopt and implement a comprehensive human resources strategy for the entire justice sector together with establishing a uniform and centralised case management system, necessary for a measurable improvement in efficiency and effectiveness of the justice system. In October 2020, the Constitutional Court issued a judgment on the constitutionality and legality of the regulations that restricted human rights during the state of emergency. The court declared the provisions of the April 2020 governmental decree that allowed for a double punishment (misdemeanour and criminal) for violations of the restriction of movement, to be unconstitutional. In contrast to usual practice, no information was placed on the website of the Court; the judgment was only published in the Official Gazette. Strategic documents Serbia adopted major strategic reform documents in July 2020 (the revised action plan for chapter 23 and the new national judicial development strategy 2020-2025), but without a prior comprehensive impact assessment and financial cost analysis. The World Bank completed its functional review of the prosecution service. The World Bank handed over to the national authorities the draft update of the 2014 functional review of the court system. Its finalisation is yet to be completed. Serbia needs to ensure that recommendations from the functional reviews are followed up on. There is still no human resources strategy in place for the judiciary (see further below under professionalism and competence). The upcoming World Bank court functional review should be a source of information for this strategy, and it should comply with the law on planning with regard to both the content of the strategy as well as the procedure for its adoption. Overall, Serbia has yet to establish a robust performance assessment framework and credible record of accomplishment of implementation and the impact of reforms. The new monitoring and reporting mechanism of the action plan for chapter 23 should provide information based on a qualitative analysis of achievements towards impact indicators, including on human and financial resources, as well as early warning and corrective measures. Management bodies As regards the organisation of the courts and prosecution offices, responsibilities remain divided between the Ministry of Justice and the councils, notably as regards budgetary planning, resource allocation and execution. This continues to adversely affecting courts’ and prosecution offices’ efficiency. Overall, the judicial institutions could benefit from a clearer system of governance. The judicial development strategy and the revised action plan for chapter 23 do not clearly determine the next steps in addressing this and do not decide upon the Serbian authority responsible for the residual judiciary budget, which includes salaries of court and prosecution support staff. Budgetary and human resources planning should be merit-based, and be based on envisaged judiciary workload, which is defined in terms of both the number and the structure of cases, i.e. their complexity as determined by case-weighting procedure. The Ministry of Justice started introducing case-weighting formula in all basic, higher and commercial courts. The High Judicial Council (HJC) automated its main business processes through the creation of an overall information system, which enables more accurate, reliable and efficient data collection and processing. A financial reporting system connecting all 158 courts and 90 prosecutors’ offices was set up. Thereby, financial and human resources management was improved. Some steps were taken to improve the transparency of the councils’ work, by including the minutes of their sessions and certain decisions on their websites.

New members joined the HJC and the State Prosecutorial Council (SPC), both ex officio members (the Minister of Justice, the President of the Supreme Court, the Republican Public Prosecutor and the President of the Parliamentary Committee for Constitutional Matters and Legislation) and the new members elected by their peers. The procedure for election of the new members (five for HJC and six for SPC) was carried out without irregularities, respecting the national legal framework and good practices. Implementing recommendations from the OSCE Reports would increase transparency and fairness of the election process. The new members took office in April 2021, except the representatives of the Bar in both Councils, pending the approval by the Parliament. Independence and impartiality The current legal framework does not provide sufficient guarantees against potential political influence over the judiciary. Future constitutional and legislative changes will need to increase the safeguards for judicial independence. A fully objective, transparent and merit-based system for appointing, transferring and promoting judges and prosecutors in line with European standards has still to be put in place. Such a system is needed also to promote professionalism and improve quality. The constitutional reform, which aims at strengthening judicial independence and accountability, was relaunched in early December 2020: the government resubmitted to Parliament an initiative to amend the constitution (as it had done in November 2018). The Parliament’s Committee on Constitutional Matters and Legislation approved this initiative in May 2021 (as it had done also in June 2019). Public sessions were organised for collecting information and views, inviting different stakeholders and interested parties. A plenary session of the Serbian Parliament approved the initiative on 7 June 2021. The Committee then established an expert working group that was drafting the text of the constitutional amendments during June and July 2021, using the 2018 text drafted by the Ministry of Justice in 2018, which took on board the Venice Commission (VC) recommendations. The VC recommendations also included a reference to ‘creating a constructive and positive environment around the public consultations to be held when the National Assembly will examine the draft amendments’. The Committee has adopted the draft text prepared by the expert working group on 6 September as basis for the next round of public debates that took place from 13 to 17 September. The Committee adopted the final text on 21 September. It was then submitted to the Venice Commission for opinion. On 15 October, the Venice Commission issued a favourable opinion of the draft text, including key recommendations to be addressed. Once finalised, the text will be submitted for the debate in Parliament. The final text needs to be approved by a two-thirds majority in the plenary followed by a referendum as the final step for approval of the amendments. The delay in the adoption of the constitutional amendments has repercussions on the drafting and adoption of the implementing legislation, including for appointment, promotion and regarding the law on the Councils, as clarity on the constitutional basis is still lacking. Pressure on the judiciary and the prosecution still remains high. Government officials, including of highest levels, and Members of Parliament continue to comment publicly on ongoing court proceedings and to attack individual judges and prosecutors. Statements regarding ongoing cases and seemingly coordinated insulting campaigns and attacks against judges and prosecutors continued in mainstream media and tabloids but worryingly also from government and in the Parliament, including during debates on judicial elections. Members of Parliament negatively influenced the public opinion and trust in judiciary and individual judges. They also violated the new code of conduct establishing the Members’ of Parliament ethical behaviour, adopted in December 2020. The code of conduct for members of the government also recommends avoiding such behaviour. However, there is a need to prohibit and efficiently enforce sanctions to eliminate such behaviour. Overall, effective sanctions for undue influence on judges and prosecutors and attacks on individuals or public comments that undermine their independence and reputation are both inadequate and not being implemented. A monitoring mechanism with aimed at changing this practice, has yet to be established. The HJC and the SPC have a legal mandate to act as protectors and guarantors of the judicial independence and prosecutorial autonomy and they continue to monitor complaints from judges and prosecutors reporting undue influence on their work. Upon increased external pressure upon the judiciary, the HJC issued a statement. The SPC did not meet in person between February 2020 and April 2021, when the first session took place after the election of new members. The mandate of the SPC’s Commissioner for Autonomy expired in early March 2020. The nomination of his successor was delayed for over a year, suspending this additional protection mechanism for prosecutors. In April 2021, the new members of the SPC nominated a new Commissioner for Autonomy. The HJC and the SPC amended their rules of procedure in April 2021 respectively, aimed at setting up a more effective reaction and protection mechanism for judges and prosecutors in cases of undue influence as well to prescribing the rights and obligations of the Commissioner for Independence. The HJC appointed and defined competences of one judge member to act in individual cases of undue influence, some complaints are already under the revision. Regular quarterly meetings between representatives of the HJC’s and the SPC’s ethical boards, parliament and the government were set up. The first, constitutive meeting took place on 15 April 2021. These meetings were set up with a view to raising awareness of public officials and politicians for full respect of judicial decisions and work of courts and prosecution offices. However, it remains to be seen, if these changes will result in reducing undue influence on judges and prosecutors in practice. The current legal framework authorises the head of every prosecution office to intervene in individual cases. This creates a certain vulnerability for political influence, notably when effective safeguards are not applied in practice. Accountability The disciplinary rules for judges and prosecutors and the ethical codes need to be revised with a view to, among other things, better defining the offences, strengthening the capacity of the disciplinary bodies and clarifying which provisions in the codes should entail disciplinary liability for non-compliance. Concerning the judges ethical codes’ revision, as a first step, a comprehensive assessment of the current regulatory framework was completed in December 2020. In May 2021, the HJC adopted the rules of procedure of the ethics committee and the president of the HJC appointed members of the ethics committee. Training in disciplinary liability continued with 22 sessions for 528 judges. In order to improve the transparency of the disciplinary bodies’ work, the HJC posted 43 anonymised disciplinary decisions on its website, in line with its rulebook on data anonymisation. In April 2021, the SPC has revised the new code of ethics for public prosecutors and deputy public prosecutors, together with guidelines for the application of ethical principles. Confidential counselling on ethical issues for public prosecutors was established by amending the rules of procedure of the ethics committee of public prosecutors and deputy public prosecutors. In 2020, the HJC disciplinary prosecutor received 429 complaints against judges, mostly from citizens. In 10 cases, it initiated a disciplinary procedure. The HJC’s disciplinary commission dealt with 22 cases. A dismissal procedure was initiated in one case, public warnings decided also in one case, as well as ban of promotion and salary reductions were issued in several other cases. The SPC disciplinary prosecutor processed 111 cases, compared to 162 cases in 2019. Complaints were filed against 30 public prosecutors and 95 deputy public prosecutors (2019: 61 against public prosecutors and 111 against deputy public prosecutors). The disciplinary prosecutor rejected complaints against 87 prosecutors/deputies and processed 22 cases. There were no proceedings before the SPC disciplinary commission. Professionalism and competence In 2020, 41 judges were elected to permanent positions (2019: 176) and 63 were promoted to higher-level courts (2019: 117). There was only one candidate for the position of the President of the Supreme Court of Cassation. She was nominated by the HJC and then elected in Parliament without a debate in April 2021. The current State Public Prosecutor was also the only candidate for this selection process. She was re-elected in Parliament for a third consecutive six-year term (in contrast to the law on the HJC that foresees only one term for the position of Chief Justice there is no such limitation for the position of Public Prosecutor). At the end of 2020, there were 2 649 (2019: 2 703) full-time judges, i.e. 38.39 (2019: 38.81) per 100 000 inhabitants. At the end of 2020, there were 765 holders of public prosecutorial function, so the number of prosecutors per 100 000 inhabitants was 11.33. The European average is 21 judges and 12 prosecutors per 100 000 inhabitants. In the context of the current constitutional reform to improve independence, autonomy and accountability of the judiciary, there is a need to revise the current system of recruitment, transfer and promotion of judges and prosecutors. Judicial careers should be fully based on merit, with a clear link between performance evaluation and career advancement. The professional evaluation of judges should be based both on quantitative and qualitative criteria. At present, Serbia still has two categories of eligible candidates for the judicial profession: graduates of the Judicial Academy, and judicial and prosecutorial assistants. No progress was made in addressing the Venice Commission’s advice on how to effectively ‘protect the Academy from possible undue influence’. Strengthening its independence and professionalism therefore remains a prerequisite for becoming a sole nationwide entry point to the profession at basic courts’ level.

There is still no human resources strategy in place for the judiciary. The upcoming finalisation of the World Bank court functional review should be a source of information for this strategy, and the strategy should comply with the law on planning. It should enable that recommendations from the functional reviews are followed up, thus providing concrete strategic direction to a number of relevant issues, including entry into judiciary, effective performance appraisal, budgetary planning and execution, further development of a functional ICT framework, and improvement of qualifications and skills through initial and continuous training. The human resources strategy should also include a methodology for determining the required number of judges and prosecutors. Moreover, judges’ and prosecutors’ assistants need a predictable system establishing a merit-based career development. The strategy also needs to be supported by a thorough financial impact analysis connected to a mid-term financial plan. Quality of justice There is still an urgent need to improve the internal expertise, capacity and organisation of the Judicial Academy, as well as the cooperation with the councils. The Academy adopted a multi-annual work programme for 2020-2025. Participation in continuous training should become a mandatory part of professional performance evaluation for judges. A mechanism for evaluating necessity and impact of training programmes should be established. This should be done in correlation with the evaluation of quality of the work of judges and prosecutors. In 2020, the Academy provided its training activities in an online format. The substance of the training offer should be further developed supporting the process of building the rule of law culture and the development of professional skills. Further steps were taken to increase the harmonisation of jurisprudence by publishing anonymised judgments of the Supreme Court of Cassation (SCC), four appellate courts, the Administrative Court and the Commercial Appellate court. Efforts to link the various existing databases continued but have not yet materialised, including the one on the judgments of the European Court of Human Rights, and to broaden their scope. In 2020, the number of SCC anonymised decisions uploaded in the database increased by 3 861; in the same period, an additional 152 anonymised appellate court decisions were uploaded, as well as 23 402 integral decisions. Furthermore, for the first time decisions by the Administrative Court were uploaded. In total, there are now 139 222 integral and 9 483 anonymised Administrative Court decisions in the centralised SCC database. The number of the Misdemeanour Appellate Court decisions in the database increased from 4 335 to 5 858. In 2020, for the first time, the Commercial Appellate Court’s decisions were also integrated in the database (5 580 integral decisions and 1 111 anonymized decisions relevant). By the end of 2020, the total number of decisions uploaded in the unique SCC case law database is 205 139 integral decisions (all court types), out of which 24 888 decisions were anonymized (all court types). Structural shortcomings, including a lack of coherence between number of cases and staff should be analysed in the context of a comprehensive assessment of the system’s court and prosecution network. The role of the Supreme Court of Cassation in effectively orienting jurisprudence is subject to the current consultations on constitutional amendments. The court and prosecution network consists of 159 courts and 90 prosecution offices of general and special jurisdictions, operating in four instances (basic, higher, appellate and supreme), adding to complexity in the aspects of financing, procurement and court payments for the services. There are 2 570 judges in 2020, compared to 2 531 in 2019 and 10 795 court staff (2019: 10 685), including 7 857 (73%) civil servants and 2 938 (27%) state employees. The number of the state employees, i.e. staff whose work is not linked to processing of cases, slightly decreased compared to 2019 (2019: 2 996, 28%), but it is still high compared to the total number of staff, according to European average (CEPEJ Report). A comprehensive court case (and document) management system that interlinks cases across Serbian courts and prosecution offices is still not in place. The technical work for the national rollout of case management systems for the prosecution and for the prison administration started in October 2019 and is nearing completion. Following successful termination of the tender procedure, the work on centralised case management system in courts officially started in September 2021. Once in place, the system enables a case allocation system, which takes into account the case weighting criteria for more balanced distribution of workload, as well as better quality and timely statistical reporting. A memorandum of understanding between the Ministry of Justice and the Government’s Information and Communication Technology (ICT) Office providing technical preconditions was signed in June 2020. Further work is required to ensure that all systems can fulfil their function, in particular with regard to legislative changes, sufficient staffing and budget. Overall, the ICT strategy, envisaged for 2022 in the chapter 23 action plan, is crucial. It should include clear timelines and related financial commitments including on necessary human and technical resources. The system of central statistical reporting was extended to commercial courts. Since November 2020, their fees can also be electronically generated. There are 197 appointed notaries throughout Serbia, with 1 226 notary assistants, associates, trainees and administrative staff. The notary chamber continued its efforts for better services, including through using an electronic documentation system, training and standardisation of practice. In the area of alternative dispute resolution/mediation, the working group on the revision of the law on mediation adopted an analysis on how to increase the use of mediation. This analysis and possible subsequent legal changes were discussed in four public debates among lawyers, judges, mediators, legal professionals, representatives of civil society and media in July 2019 but further steps following up on the analysis are yet to be taken. There are 1 430 certified mediators. Based on their reports, 498 mediations were conducted in 2020.This represents a slight drop compared to 569 in 2019, and 638 in 2018. Out of 498 mediated cases in 2020, 353 were concluded with a settlement agreement. In 218 proceedings, cases were referred to mediation by the court. As for training, 23 organisations received licences to conduct training for mediators. 17 used these licences, and organised training for over 3 700 participants. The number of mediations compared to the number of pending civil court proceedings remains below 1%. The annual report of the Supreme Court of Cassation indicate increasing inflow of litigation cases and identified space for an increased use of alternative dispute resolution mechanisms as an effective way of resolving disputes. Efficiency The implementation of the national backlog reduction programme (for 2016–2020) continued under the supervision of the Supreme Court of Cassation. It continues to have a positive impact on the courts’ efficiency, with the backlog of old enforcement cases continuously shrinking. In 2020, some 353 600 such cases were resolved (out of which some 261 600 were enforcement cases), which is a higher number than in 2019 (around 214 200 cases resolved, out of which around 107 300 were enforcement cases). There are also cases more than 10 years old and their number remains high with over 1 400 cases in second instance courts and around 187 100 cases in basic courts, mostly on civil matters. The number of cases alleging violations of the right to a trial within reasonable time was lower in 2020 (90 977) than it was in 2019 (100 600). There is still an overall high number of pending backlog cases, although it has decreased compared to previous years (382 646 cases more than 3 years old at the end of 2020 compared to 621 324 at the end of 2019). The highest number of pending backlog cases remains at the level of basic courts (approx. 85.95% of the total). While the overall clearance rate dropped from 139.87% to 106.04% between 2016 and 2017, it increased again in 2018 to 110.03% before dropping again in 2019 to 102.01%. In 2020, that percentage increased to 107.81%. Thus, for the fifth year in a row, the Serbian judicial system was able to process more cases than it received. In 2020, the average duration for cases to be resolved was 274 days, compared to 267 days in 2019. At the same time, the courts in 2020 received a somewhat lower number of cases (around 1 867 900) than they did in 2019 (around 2 224 100). The jurisdiction of the Constitutional Court covers assessing compliance of laws and other general acts with the Constitution, resolving conflicts of jurisdictions and deciding upon constitutional complaints over a number of potential violations of human and minority rights and freedoms by individual acts. Additional protection foreseen by the Law on the Protection of the Right to a Trial within a Reasonable Time did not reduce the number of constitutional complaints. There is still a need for more transparency in the work of the court, including as regards accessibility of its sessions and interactions with the public. Significant differences in workload remain between the courts across the country, with Belgrade courts bearing the highest overall workload. Lengthy proceedings and the slow pace of processing indemnity claims continue to hamper the efficiency and quality of justice and people’s access to justice. The law on free legal aid has been implemented since October 2019 (See procedural rights). Amendments to the law on enforcement and security, in force since January 2020, envisage the transfer of additional types of enforcement cases from courts to public enforcement agents. The law also introduced a new appeal system to better protect individual debtors and strengthen court control over public enforcement agents. This has not yet been matched with additional human resources in courts. The fees for enforcement procedures were lowered, and an e-auction platform was introduced. Domestic handling of war crimes Serbia needs to fully cooperate with the International Residual Mechanism for Criminal Tribunals (IRMCT), including by fully accepting and implementing its rulings and decisions. Serbia continues to publicly challenge the judgments of the International Criminal Tribunal for the former Yugoslavia (ICTY), including at the highest levels. Cooperation between the IRMCT prosecution office and the Serbian Office of the War Crimes Prosecutor (OWCP) needs to be improved. In April 2021 the trial judge found that Serbia was in a state of non-cooperation with the tribunal, in relation to the arrest of two people indicted for contempt of court. This finding has been formally reported by the President of the IRMCT to the UN Security Council as an act of non-cooperation. Regarding judicial cooperation issues, bilateral agreements exist between the Prosecutors Office of Serbia and its counterparts in Bosnia and Herzegovina, Croatia and Montenegro. In the second half of 2020, cooperation with Bosnia and Herzegovina led to five indictments being issued in Serbia. Cooperation with Croatia has not led to tangible results. Serbia has yet to enforce the final judgment of Bosnia and Herzegovina in the case of Novak Djukić. The latter fled to Serbia following his conviction. On 14 October 2021, Serbia handed over to Bosnia and Herzegovina twenty four active criminal cases against twenty eight citizens of Bosnia and Herzegovina. The implementation of the 2016 national strategy for the investigation and prosecution of war crimes continued at a very slow pace. The number of self-initiated indictments remains low. Case proceedings continue for a disproportionate amount of time, with some cases requiring over 13 years to process after the indictment was issued. The implementation of the strategy was monitored by a multi-institutional mechanism, which has issued ten reports. The Government adopted the new National Strategy for the Prosecution of War Crimes on 14 October 2021. The new Strategy is an opportunity to realise commitments to the fight against impunity and reconciliation, notably to increase investigations and indictments in high-level cases and strengthen regional co-operation. Moreover, the strategy should ensure that specific decisions in other fields, notably on granting citizenship, do not act to de facto foster impunity. Serbian authorities continue to provide support and public space to convicted war criminals. The capacities of the OWCP were strengthened in early 2021. Serbia has a case backlog of 1 731 pre-investigative cases. The OWCP filed seven indictments against seven individuals in 2020, of which five indictments were transferred from Bosnia and Herzegovina. These latter indictments included two defendants who held a high-ranking position at the time of the offence (brigade commander) and cover crimes concerning hundreds of victims, illustrating a concrete step towards changing the previous practice of overall prosecution of cases involving low-level perpetrators and a low number of victims.

The Higher Court rendered seven judgments, convicting seven defendants and sentencing them to prison terms ranging from two to 15 years, while the Court of Appeals rendered four final decisions convicting nine defendants and sentencing them to prison terms from two to 15 years. Two defendants were acquitted. As of 31 December 2020, the trial proceedings were ongoing in 18 war crimes before the Higher Court (15 cases) and the Court of Appeals in Belgrade (three cases) against 40 defendants . Three final judgments against 10 defendants were rendered in 2020 by the Court of Appeals of whom eight defendants were found guilty, sentencing them to prison terms ranging from three to 15 years. Two defendants were acquitted. Overall, Serbia needs to show a genuine commitment for investigating and adjudicating war crimes cases. This is also a requirement for effectively dealing with the legacy of the past and for fostering reconciliation. Serbia should prioritise complex cases and those involving senior ranking officials and provide a clear legal approach to resolve the issue of command responsibility. Fight against corruption Serbia has some level of preparation in the fight against corruption. Limited progress has been made during the reporting period. The recommendation on prevention of corruption had been implemented insofar as the role of the Agency for the prevention of corruption had been strengthened by the new law on corruption prevention as also concluded by Council of Europe’s Group of States against Corruption (GRECO) in November 2020. However, GRECO also concluded that the 2020 law on corruption prevention presents shortcomings, which could endanger its application. New amendments to the Law were adopted in September 2021. With regard to the other recommendations of the previous year, Serbia has still to prepare a new anti-corruption strategy, accompanied by an action plan and to establish an effective coordination mechanism to operationalise prevention and repression policy goals and effectively address corruption. The number of indictments and the number of first instance convictions for high-level corruption cases further decreased compared to previous years. Serbia should increase its efforts in addressing these shortcomings and step up the prevention and repression of corruption. Last year’s recommendations therefore remain valid. In the coming year, Serbia should in particular: ®improve its track record on investigations, indictments and final convictions in high-level corruption cases, including the seizure and confiscation of criminal assets; ®continue to make progress in implementing the GRECO recommendations in relation to corruption prevention; ®adopt and start implementing the new anti-corruption strategy underpinned by a credible and realistic action plan as well as an effective coordination mechanism. Track record Serbia continued to implement the law on the organisation and jurisdiction of government authorities in suppression of organised crime, terrorism and corruption. In relation to high-level corruption, based on indictments from the Prosecutor’s Office for Organised Crime, the courts rendered first instance judgements against 22 individuals in 2020 (compared to 30 in 2019, 21 in 2018). There were final convictions against 11 persons. The Prosecutor’s Office for Organised Crime ordered the conduction of investigations against 21 persons, and issued 19 indictments (compared to 20 in 2019, 41 in 2018 and 50 in 2017). There were no cases with final confiscation of assets (compared to three in 2019). Serbia still needs to show a convincing track record of confiscating assets in corruption cases. In 2020, the special departments for combatting corruption in the higher prosecution offices received 2 936 criminal complaints (compared to 3 577 in 2019). They ordered 189 investigations, and against 23 persons parallel financial investigations were initiated. A total of 470 indictments were issued (compared to 583 in 2019). The courts rendered judgments against 230 persons at first instance based on indictments from these departments (compared to 399 in 2019). There were final convictions against 195 persons. Other prosecutions (not specialised departments) issued 22 orders to investigate in relation to corruption and economic crime offences, and filed 136 indictments. The courts convicted 186 individuals at first instance, and 114 individual at final instance. A final confiscation of assets took place in three cases. Regarding violations of the conflict of interest provisions of the law on prevention of corruption, two requests for initiating misdemeanour proceedings were submitted by the Agency for the Prevention of Corruption (Agency) (2019:10). The Agency initiated 439 procedures to determine violations of the law (2019: 310). In 2020, misdemeanour courts issued first-instance decisions on the responsibility of 11 public officials (2019:27). The Agency submitted 29 requests for initiation of misdemeanour proceedings related to a failure to promptly submit asset declarations in 2020 (2019: 76; 2018: 45). Based on the Agency’s work in previous years, misdemeanour courts issued 80 final criminal decisions in 2020 (65 in 2019). The Agency filed 13 criminal charges in 2020 (2019: 25, 2018: 16) due to reasonable suspicion that a public official had not reported assets or had given false information about assets intending to conceal the facts. Based on the Agency’s previous work, 8 judgements were issued (2019: 19). In 2020, the Agency controlled the reports on the election campaign expenses for the parliamentary, provincial and local elections. It published reports on the control of financing of political activities and on the control of election campaign costs in March 2021. The effectiveness and impact of the legislative changes and capacity of the Agency to perform controls in relation to use of public resources during the electoral campaigns are yet to be assessed. In the context of the 2020 election campaign, the Agency issued 34 decisions based on reports filed against political parties and one decision ex officio. The decisions were published on the Agency's website. In 9 cases, it determined a violation of the law. Due to violations of the provisions of the law on financing of political activities, the Agency submitted 255 requests for initiating misdemeanour proceedings (2019: 96). Of these, 144 were for the failure to submit reports on campaign expenses in 2020. Based on final judgments, 9 decisions were made on the loss of the right to obtain funds from public sources intended for financing regular work in the coming year (2019:59; 2018: 33). A comprehensive and evidence-based assessment of access to information is not possible, as the majority of public authorities do not comply with the obligation to provide data to the Commissioner for Access to Information regarding citizens’ requests for information. The Commissioner established that 84% (2019: 83%; 2018: 87%) of citizens’ complaints – most of them concerning administrative silence – were well-founded, meaning that the information requested by citizens should have been provided by the authorities according to the law on access to information of public importance. In 38% (2019: 41%; 2018: 55%) of these well-founded cases, the authorities reported that they acted upon the Commissioner’s request to provide the information to the complainants even before a decision was made on the appeal. Administrative enforcement of the decisions taken by the Commissioner has yet to be ensured. As in the previous year, the administrative inspection did not submit any request to the misdemeanour courts to initiate proceeding for the non-execution of the Commissioner’s decisions. In 2020, courts in Serbia received 117 (2019: 152) new cases based on the law on whistle-blower protection. Out of 177 pending cases, 128 cases were finalised (2019: 160). Whistle-blower reports, such as in the case of Krusik, mentioned in the previous report have still not been investigated in accordance with the law. Serbia needs to step up its protection of whistle-blowers and investigate al