EUROPEAN COMMISSION Brussels, 20.12.2017 SWD(2017) 480 final COMMISSION STAFF WORKING DOCUMENT Accompanying the document REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL First Report under the Visa Suspension Mechanism

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TABLE OF CONTENTS I. INTRODUCTION II. ASSESSMENT OF SPECIFIC AREAS IN LINE WITH VISA LIBERALISATION BENCHMARKS II.1 WESTERN BALKANS II.1.1 ALBANIA II.1.2 THE FORMER YUGOSLAV REPUBLIC OF MACEDONIA II.1.3 BOSNIA AND HERZEGOVINA II.1.4 MONTENEGRO II.1.5 SERBIA II.2 EASTERN PARTNERSHIP II.2.1 REPUBLIC OF MOLDOVA II.2.2 GEORGIA II.2.3 UKRAINE III. ANNEX - STATISTICS III.1 IRREGULAR MIGRATION III.2 ASYLUM III.3 RETURN AND READMISSION

III.4 SECURITY I. INTRODUCTION The Commission Staff Working Document (CSWD) accompanies the First Report under the Visa Suspension Mechanism (First Report). The CSWD builds on the information and the assessment provided in the First Report and provides a detailed analysis of the most relevant developments relating to the implementation of the visa liberalisation benchmarks. II. ASSESSMENT OF SPECIFIC AREAS IN LINE WITH VISA LIBERALISATION BENCHMARKS II.1 WESTERN BALKANS II.1.1 ALBANIA Irregular migration, including readmission As regards irregular migration challenges, between 2015 and 2016, refusals of entry increased by 91% from 15,835 to 30,305. Greece was the most-affected Member State in 2016, followed by Italy: Refusals of entry for citizens of Albania 2008 2009 2010 2011 2012 2013 2014 2015 2016 Schengen+ area 1,135 1,715 2,195 15,990 12,495 12,260 13,240 15,835 30,305 Greece 305 670 1,015 9,000 7,415 4,845 3,800 4,440 15,930 Italy 355 435 575 4,930 2,920 3,105 3,375 3,760 5,280 Croatia N/A N/A N/A N/A N/A 1,125 1,560 1,730 1,955 Hungary 10 35 50 210 180 840 1,400 1,795 1,855 France 45 105 60 170 90 150 105 335 1,510

Illegal stay: Between 2015 and 2016, illegal stays fell by 30% from 47,755 to 33,445. Greece remained the most-affected Member State in 2016, followed by Germany: Illegal stay by citizens of Albania 2008 2009 2010 2011 2012 2013 2014 2015 2016 Schengen+ area 71,920 68,655 52,170 16,640 17,665 25,815 29,895 47,755 33,445 Greece 65,480 63,140 47,120 11,225 10,525 15,555 15,090 16,910 11,335 Germany 755 615 460 545 855 1,345 1,920 17,995 10,520 France 1,210 635 560 1,495 1,750 3,170 5,255 5,540 4,635 Italy 3,635 2,875 2,820 1,715 2,230 2,265 2,390 2,555 2,270 Switzerland 0 465 440 500 680 810 925 1,035 935

Asylum: Between 2015 and 2016, asylum applications fell by 54% from 66,715 to 30,840. Germany was the most-affected Member State in 2016, followed by France: Yearly total number of asylum applications by citizens of Albania 2008 2009 2010 2011 2012 2013 2014 2015 2016 Schengen+ area 1,160 1,810 1,720 2,685 6,670 9,685 15,185 66,715 30,840 Germany 75 55 45 85 250 1,295 8,110 54,760 17,230 France 345 560 515 505 2,705 5,065 3,000 3,650 7,445 Netherlands 10 15 20 30 20 35 90 1,010 1,700 Greece 200 515 695 275 385 580 570 1,005 1,425 Belgium 175 280 245 1,290 1,075 775 730 825 815

In the first half of 2017, asylum applications fell by 27% compared to the previous six months. In this period, France overtook Germany as the Member States most affected by Albanian asylum applications. These figures are still the absolute highest for any visa-free state: Monthly asylum applications by citizens of Albania 2016 M07 2016 M08 2016 M09 2016 M10 2016 M11 2016 M12 2017 M01 2017 M02 2017 M03 2017 M04 2017 M05 2017 M06 2016 2nd half 2017 1st half Schengen+ area 2,800 3,035 3,730 2,625 2,695 2,280 1,945 1,620 2,325 2,220 2,170 2,160 17,165 12,440 France 585 655 670 1,000 1,045 1,120 1,030 880 1,200 1,170 1,160 1,060 5,075 6,500 Germany 1,710 1,915 2,510 1,035 1,030 705 575 380 680 625 475 525 8,905 3,260 Greece 90 95 130 180 175 140 105 100 125 190 250 245 810 1,015 Belgium 75 75 70 95 130 60 55 85 95 60 50 60 505 405 Sweden 65 55 75 95 75 80 35 30 60 50 55 90 445 320

Albania has stepped up operational cooperation with Member States most affected by irregular migration from Albania, including information exchange with Member States on Schengen entry bans. Albania’s practice of conducting ‘exit interviews’ with travellers at BCPs must respect travellers’ fundamental rights. Since July 2017, Albanian authorities have been working very closely with most affected Member States to address the irregular migration of unaccompanied minors, the facilitation of irregular migration, operational cooperation to address irregular migration and information exchange, document fraud and information campaigns on the rights and obligations of the visa-free travel. Cross-checking information with Member State authorities enabled Albania, in August and September 2017, to persuade 4,271 Albanian travellers with SIS entry bans not to continue their journeys towards the EU. Albania has also begun negotiations with the European Commission enabling the deployment, on its territory, of team members of the European Border and Coast Guard Agency. Although the pressure on Albania represented by mixed migration flows route has been manageable, such an agreement could provide a further layer of protection in controlling mixed migration flows along this route. Albania has also amended its law on foreigners to further align it with the EU acquis on legal migration. Readmission and return: Readmission is functioning well, with the country swiftly honouring readmission requests from EU Member States. With 41,285 returns performed to Albania in 2016, the return rate to this country increased substantially from 86.45% in 2015 to 129.12% in 2016. Member States commend Albania's very good collaboration on readmission and return, especially given EU's concern on the high number of Albanian irregular migrants and asylum seekers in the EU. Albania's efforts to rigorously respect deadlines, run return operations smoothly, organise information campaigns to prevent irregular migration and improve the readmission of unaccompanied minors are a good step forward. 2014 2015 2016 Ordered to leave Returned Return rate Ordered to leave Returned Return rate Ordered to leave Returned Return rate Schengen+ area 27,125 23,260 85.75% 39,310 33,985 86.45% 31,975 41,285 129.12% Germany N/A N/A N/A 10,960 15,730 143.52% 10,900 22,890 210.00% Greece 15,090 17,145 113.62% 12,000 9,630 80.25% 7,730 9,690 125.36% France 4,505 2,125 47.17% 5,235 2,280 43.55% 4,170 2,335 56.00% Italy 2,390 1,070 44.77% 2,555 1,160 45.40% 2,270 1,115 49.12% Netherlands 130 255 196.15% 475 545 114.74% 1,585 1,765 111.36% Implementing protocols (IP) exist with Austria, Benelux, Bulgaria, France, Italy, Hungary, Malta, Portugal and Slovakia. Negotiations have been finalised with Spain and IP should be signed soon. Negotiations are ongoing with Greece. A bilateral agreement has been signed with Denmark. Readmission Agreements have also been signed with Serbia and Moldova. Negotiations started with Russia in 2015 and are ongoing. Following the recommendations of last year's progress report on the post-visa liberalisation, negotiations are also being conducted with Morocco, Afghanistan, Iraq and Iran. Public order and security Albanian-speaking organised crime groups are particularly active across a broad range of criminal activities in the EU, although they cannot be linked to Albania alone. These groups are usually poly-criminal and engage in drug trafficking, notably of cannabis, cocaine and heroin; migrant smuggling; organised property crime; racketeering and extortion. Albania also retains one of the largest weapon stocks in the region. Between 2012 and 2016, 144 Foreign Terrorist Fighters have travelled from Albania to Syria to join the armed conflict. According to the authorities there have been no new departures since 2015 to date. The monthly number of alerts created by Member States in the Schengen Information System (SIS) based on Article 26 alerts remained the absolute highest for any visa-free state, with 269 total entries, throughout the period October 2016-September 2017. Art. 26 SIS alerts 2016 M10 2016 M11 2016 M12 2017 M01 2017 M02 2017 M03 2017 M04 2017 M05 2017 M06 2017 M07 2017 M08 2017 M09 Grand Total Albania 24 31 18 20 16 30 23 11 23 31 20 22 269 To target organised crime, Albania has tightened its legislation on combating drug trafficking, as well as its criminal code on controlled deliveries. It has also amended its legislation to enable weapon tracing and identification. Albania has also taken steps to improve the effectiveness of its law enforcement efforts to combat serious and organised crime. Albania has also strengthened controls of documents at certain BCPs, including Rinas airport. Seizures of illicit drugs, cannabis in particular, increased substantially from 2015 to 2017. Albania has also amended it legal framework on corruption by extending the scope of asset investigations in criminal investigations. Relations with Europol have deepened between 2016-mid 2017, as demonstrated by the number of complex joint investigations on drug trafficking. II.1.2 THE FORMER YUGOSLAV REPUBLIC OF MACEDONIA Irregular migration, including readmission

As regards irregular migration challenges, between 2015 and 2016, refusals of entry fell by 2% from 2,555 to 2,495. Countries close to the former Yugoslav Republic of Macedonia, such as Hungary, Greece, Slovenia and Croatia have been most affected; further afield, French detections have increased. Refusals of entry for citizens of the former Yugoslav Republic of Macedonia 2008 2009 2010 2011 2012 2013 2014 2015 2016 Schengen+ area 2,115 2,300 4,165 3,320 2,325 2,465 2,560 2,555 2,495 Hungary 110 215 515 555 495 770 915 755 785 Greece 305 450 1,415 950 565 480 510 395 380 Slovenia 425 1,035 1,090 835 475 520 450 450 355 Croatia N/A N/A N/A N/A N/A 165 275 285 200 France 30 20 10 15 15 15 15 45 160

Illegal stay: Between 2015 and 2016, illegal stays fell by 13% from 5,265 to 4,595. Germany has detected the bulk of irregular stay by citizens of the former Yugoslav Republic of Macedonia; Switzerland, Hungary and Slovenia are also affected by this irregular migration trend. Illegal stay by citizens of citizens of the former Yugoslav Republic of Macedonia 2008 2009 2010 2011 2012 2013 2014 2015 2016 Schengen+ area 2,770 2,200 3,580 3,765 3,840 3,835 4,505 5,265 4,595 Germany 1,225 560 1,125 1,255 1,805 1,970 2,205 3,530 2,560 Switzerland N/A 295 430 530 430 285 330 420 480 Hungary 35 80 130 225 500 395 505 370 365 Slovenia 105 85 420 685 45 35 40 40 365 Austria 380 345 195 175 200 215 180 95 140

Asylum: Between 2015 and 2016, asylum applications fell by 44% from 16,110 to 9,100. Germany was the most-affected Member State, but asylum applications increased rapidly in 2016 in Iceland, making it the second most-affected Associated Country in the Schengen area. Yearly total number of asylum applications by citizens of the former Yugoslav Republic of Macedonia 2008 2009 2010 2011 2012 2013 2014 2015 2016 Schengen+ area 930 1,010 8,090 6,565 10,780 11,175 10,435 16,110 9,100 Germany 135 160 3,545 1,755 6,890 9,415 8,905 14,130 7,010 Iceland 0 0 5 0 0 0 10 25 470 Netherlands 5 15 390 265 60 100 120 110 435 France 110 75 595 745 855 345 235 340 430 Sweden 60 90 900 875 615 455 425 465 185

In the first half of 2017, asylum applications fell by 28% from 5,240 to 3,755 compared to the previous six months. Germany remains the most-affected Member State, followed by France. Monthly asylum applications by citizens of the former Yugoslav Republic of Macedonia 2016 M07 2016M08 2016M09 2016M10 2016M11 2016M12 2017M01 2017M02 2017M03 2017M04 2017M05 2017M06 2016 2nd half 2017 1st half Schengen+ area 905 930 1,170 805 855 575 560 555 925 690 465 560 5,240 3,755 Germany 760 775 915 475 545 405 440 395 710 470 295 410 3,875 2,720 France 20 20 55 70 45 30 55 45 105 100 65 90 240 460 Belgium 10 15 20 30 20 10 10 25 35 25 30 15 105 140 Sweden 5 15 35 25 15 15 10 30 15 15 15 10 110 95 Netherlands 65 65 25 25 15 20 5 20 15 20 10 10 215 80 Readmission and return: Readmission is functioning well, with the country swiftly honouring readmission requests from EU Member States and an excellent return rate of 127.71% in 2016. Implementing Protocols are in place with Bulgaria, Estonia, Germany, Austria and Slovakia. The country is in the process of concluding implementing protocols with France, Hungary, Italy, Latvia, Lithuania and Iceland. While not necessary for the operation of the EU readmission agreement, these implementing protocols could buttress the agreement’s functioning. 2014 2015 2016 Ordered to leave Returned Return rate Ordered to leave Returned Return rate Ordered to leave Returned Return rate Schengen+ area 2,530 2,400 94.86% 5,700 5,800 101.75% 6,085 7,710 126.71% Germany N/A 2,160 N/A 2,880 4,825 167.53% 3,715 6,530 175.77% Austria 0 20 N/A 420 N/A N/A 525 245 46.67% Belgium 625 155 24.80% 520 105 20.19% 460 115 25.00% Netherlands 185 115 62.16% 145 60 41.38% 335 225 67.16% Sweden 410 270 65.85% 580 455 78.45% 260 225 86.54% The former Yugoslav Republic of Macedonia has also started negotiations with the European Commission enabling the deployment on its territory of team members of the European Border and Coast Guard Agency. These negotiations are expected to be concluded soon, adding a new layer of protection to controlling mixed migration flows along the Western Balkan migration route. It has concluded agreements with Austria, Hungary and Serbia on the management of mixed migration flows. The country has also amended its Law on foreigners to align it with EU standards on legal migration and has hosted a small number of stranded migrants since the de facto closure of the Western Balkan route in March 2016. Public order and security Criminals from the former Yugoslav Republic of Macedonia are active in the trafficking and distribution of drugs, notably heroin. The country remains a source of archaeological objects, religious items and cultural goods trafficked to the EU. Some criminal groups also engaged in sports corruption, notably betting fraud. Returning foreign terrorist fighters also pose a risk to this country. The monthly number of alerts created by Member States in the Schengen Information System (SIS) based on Article 26 remained stable throughout the period October 2016-September 2017, amount to 35 over this period. Art. 26 SIS alerts 2016 M10 2016 M11 2016 M12 2017 M01 2017 M02 2017 M03 2017 M04 2017 M05 2017 M06 2017 M07 2017 M08 2017 M09 Grand Total Former Yugoslav Republic of Macedonia 1 0 1 4 1 7 3 3 2 2 5 6 35

The former Yugoslav Republic of Macedonia has adopted a new national Serious and Organised Crime Threat Assessment (SOCTA) in line with Europol’s model, focusing on trafficking in human beings, notably unaccompanied minors, and a new strategy in combating the trafficking of small weapons, and new counter-terrorism strategy and aimed to step up its efforts to combat drug trafficking. It has also developed a regional SOCTA with Serbia and Montenegro. As regards law enforcement, efforts to crack down on drug trafficking have resulted in increased seizures of drugs, in particular cannabis and synthetic drugs, and the disruption of several drug trafficking gangs. A national coordinator has been appointed to oversee efforts to combat terrorism. Law enforcement cooperation with Western Balkan partners, Italy and Slovenia have improved, as has operational cooperation with Europol. It has also signed bilateral agreements or memoranda of understanding with Austria, Italy, Poland, Slovakia, Slovenia to enhance law enforcement cooperation and the fight against serious crime. Operational relations with Europol have also improved. II.1.3 BOSNIA AND HERZEGOVINA Irregular migration, including readmission As regards irregular migration challenges, the refusal of entry rate in 2016 stayed at the same level as in 2015 with 5,150 cases. The number of detected illegal stays remained low, and in comparison to 2015 decreased slightly in 2016 from 3,585 to 3,645 cases. Refusals of entry for citizens of Bosnia and Herzegovina 2008 2009 2010 2011 2012 2013 2014 2015 2016 Schengen+ area 1,610 1,280 865 1,695 1,610 6,045 4,910 5,185 5,150 Croatia N/A N/A N/A N/A N/A 4,515 3,540 3,525 3,525 Slovenia 930 1,025 630 1,230 1,215 1,145 865 865 720 Hungary 95 100 140 210 225 240 360 585 570 Illegal stay by citizens of Bosnia and Herzegovina 2008 2009 2010 2011 2012 2013 2014 2015 2016 Schengen+ area 2,500 2,170 2,320 2,770 2,870 3,220 3,950 3,585 3,645 Germany 1,115 685 650 790 1,095 1,330 1,640 1,715 1,440 Slovenia 210 315 400 555 140 115 175 175 495 Croatia N/A N/A N/A N/A N/A 195 400 390 395 Hungary 45 40 40 70 90 175 250 290 280 Switzerland N/A 85 85 90 135 125 150 180 225 After a period of elevated figures of around 400 asylum applications on average per month in the second part of 2016, the number of asylum applications lodged by the country's nationals in the Schengen zone dropped in the second quarter of 2017 and in June 2016 amounted to 180. The top destinations countries were: Germany and France. Yearly total number of asylum applications by citizens of Bosnia and Herzegovina 2008 2009 2010 2011 2012 2013 2014 2015 2016 Schengen+ area 1,115 1,600 2,295 2,965 6,395 7,320 10,895 9,100 4,495 Germany 215 250 355 405 2,370 4,845 8,475 7,475 3,105 France 235 450 500 250 785 925 845 400 480 Netherlands 15 20 10 30 70 85 130 125 295 Sweden 155 135 120 970 1,555 520 495 540 155 Monthly asylum applications by citizens of Bosnia and Herzegovina 2016 M07 2016M08 2016M09 2016M10 2016M11 2016M12 2017M01 2017M02 2017M03 2017M04 2017M05 2017M06 2016 2nd half 2017 1st half Schengen+ area 330 455 465 390 405 295 295 260 355 185 165 180 2,340 1,440 Germany 225 355 350 255 260 180 165 150 235 95 90 85 1,625 820 France 30 35 45 65 50 55 55 50 70 65 45 65 280 350 Netherlands 25 35 25 15 25 25 15 5 5 5 0 10 150 40 Sweden 10 5 20 25 20 5 25 5 15 5 10 10 85 70

Readmission and return: As regards implementation of the readmission agreement with EU, a satisfactory level of cooperation was reported by EU Member States. Eurostat figures show a constant trend of around 5,000 return decisions per year (of which more than 2,000 from Germany) and a stable the return rate around 73% over the period 2015-2016. 13 Implementation Protocols (IP) were concluded with 15 EU Member States: Estonia, Malta, Austria, Bulgaria, Hungary; Czech Republic, Romania, Belgium, The Netherlands, Luxemburg, Germany, France, Slovakia, Greece and Slovenia. An IP should be signed soon with Italy, as the internal procedures are finalised. Negotiations with Sweden are on-going. Spain, Portugal, Lithuania and Latvia expressed their willingness to conclude IP as well. 2014 2015 2016 Ordered to leave Returned Return rate Ordered to leave Returned Return rate Ordered to leave Returned Return rate Schengen+ area 5,450 3,320 60.92% 5,675 4,100 72.25% 5,080 3,755 73.92% Germany 2,065 1,665 80.63% 2,210 2,280 103.17% 2,105 2,235 106.18% Croatia 770 595 77.27% 695 535 76.98% 645 485 75.19% Austria 0 N/A N/A 355 N/A N/A 435 155 35.63% Slovenia 175 45 25.71% 175 45 25.71% 325 35 10.77% France 735 235 31.97% 435 205 47.13% 320 100 31.25% Public order and security According to Europol, nationals of Bosnia and Herzegovina are among the most frequently reported nationalities for organised property crimes in the EU. Organised crime groups from the country are involved in home theft, violent burglaries and rip-deals as well as in human trafficking. The country is also a destination country for vehicles stolen in various Member States. The monthly number of alerts created by Member States in the Schengen Information System (SIS) based on Article 26 increased in the recent months. Art. 26 SIS alerts 2016 M10 2016 M11 2016 M12 2017 M01 2017 M02 2017 M03 2017 M04 2017 M05 2017 M06 2017 M07 2017 M08 2017 M09 Grand Total Bosnia and Herzegovina 6 6 3 8 8 13 5 10 8 9 12 21 109 In October 2016 a framework action plan accompanying the 2015-2020 Strategy on prevention and fight against terrorism was adopted. The Council of Ministers established a supervisory body for the implementation of the Strategy. A counter-terrorism taskforce was established in order to coordinate counter-terrorism efforts in the country. Amendments to the criminal code qualify terrorism and joining foreign paramilitary formations as criminal offences. The Additional Protocol to the Council of Europe Convention on the Prevention of Terrorism is currently in the process of ratification. In 2016 there were 11 cases of terrorism against 26 persons brought to court. In two of them the final verdicts were pronounced with 5 persons found guilty. The government supports and promotes activities of the academic community, the Islamic community and civil society aimed at prevention of radicalisation and violent extremism. Financial challenges exist for programmes aimed at prevention of violent extremism, in particular at local administrative level. In the area of border management, an Integrated Border Management Strategy was adopted in 2016 together with an accompanying action plan. The projects on closing illegal border crossings with Croatia and Montenegro were finalised. The agreement with Serbia is in the final stage of implementation. The border demarcation agreement with Montenegro entered into force in April 2016. The border police works closely with EBCGA and Interpol through active engagement in international police operations and other events. A working arrangement with EBCGA is in place. Further improvements are needed on infrastructure and equipment at border crossing points. There are two joint centres for police cooperation with the neighbouring countries in Trebinje and Nova Sela. II.1.4 MONTENEGRO Irregular migration, including readmission As regards irregular migration challenges, between 2015 and 2016, the number of refused entry fell from 385 to 335 cases and the number of illegal stays also decreased from 770 to 570 persons. Refusals of entry for citizens of Montenegro 2008 2009 2010 2011 2012 2013 2014 2015 2016 Schengen+ area 75 135 315 300 250 435 400 385 335 5 30 115 115 95 170 195 145 140 N/A N/A N/A N/A N/A 90 45 90 65 35 45 110 85 75 70 60 60 40 0 0 10 0 5 5 15 10 35

Illegal stay by citizens of Montenegro 2008 2009 2010 2011 2012 2013 2014 2015 2016 Schengen+ area 355 305 365 385 480 610 810 770 570 Germany 210 140 175 165 230 245 275 430 250 France 100 70 70 80 85 140 200 120 95 Hungary 0 5 10 20 30 40 105 75 85 Asylum applications: A decrease could be observed in the number of asylum applications lodged by Montenegrin nationals in the Schengen area since the beginning of 2017. The figures amount to only 80 per month on average. There was no change in top destinations countries (i.e. Germany and France). Yearly total number of asylum applications by citizens of Montenegro 2008 2009 2010 2011 2012 2013 2014 2015 2016 Schengen+ area 310 275 435 670 1,305 975 1,870 4,115 1,830 Germany 55 95 95 125 395 380 1,270 3,635 1,625 France 120 80 80 200 320 245 260 160 110 Luxembourg 15 5 0 105 290 115 145 75 10 Monthly asylum applications by citizens of Montenegro 2016 M07 2016M08 2016M09 2016M10 2016M11 2016M12 2017M01 2017M02 2017M03 2017M04 2017M05 2017M06 2016 2nd half 2017 1st half Schengen+ area 105 230 150 75 115 100 115 70 75 100 80 70 795 510 Germany 100 210 130 70 90 75 100 45 45 70 75 50 675 385 France 0 5 15 5 20 15 10 15 20 20 5 20 60 90 Netherlands 0 10 0 0 0 10 0 0 0 5 0 0 20 5 Readmission and return: The readmission agreement with the EU continues to be implemented smoothly. Montenegro concluded implementing protocols with 13 EU Member States. Even if the number of returns performed to Montenegro in 2016 is not very high (2,405), Montenegro shows the highest return rate from Schengen+ area not only for the Western Balkans but for all third countries with a substantial increase from 78% in 2015 to 160 % in 2016. Most readmissions are taking place from Germany, France, Sweden and Luxembourg. So far, Montenegro signed Implementation Protocols with Slovenia, Malta, Austria, Bulgaria, Czech Republic, Germany, Slovakia, Benelux, Estonia, Italy and Hungary. Negotiations with Spain have been finalized and the implementation protocol is ready to be signed. The readmission agreement with Turkey, signed already in 2013, entered into force in December 2016. In July 2017 the readmission agreement with Azerbaijan was signed and its ratification is on-going. A set of training courses by EBCGA for Montenegrin officials was organised on European standards applicable in return operations. Montenegro made further progress in concluding readmission agreements with third countries. Readmission agreements with Georgia, Ukraine and Turkey entered into force in the second half of 2016. The readmission agreement with Azerbaijan was signed in July 2017, the agreement with Russia remains to be signed. Montenegro is negotiating readmission agreements with Iceland and China. Readmission agreements with all neighbouring countries as well as with the former Yugoslav Republic of Macedonia are in place and have been implemented in a satisfactorily manner. 2014 2015 2016 Ordered to leave Returned Return rate Ordered to leave Returned Return rate Ordered to leave Returned Return rate Schengen+ area 1,090 525 48.17% 1,565 1,225 78.27% 1,500 2,405 160.33% Germany 430 185 43.02% 945 825 87.30% 1,065 2,160 202.82% France 235 40 17.02% 160 40 25.00% 135 60 44.44% Sweden 70 60 85.71% 165 105 63.64% 45 45 100.00% Austria 0 N/A N/A 30 N/A N/A 45 20 44.44% The Strategy for the Integrated Migration Management for the period 2017-2020 was adopted in February 2017, together with an Action Plan. It should foster inter-agency cooperation between services concerned and lead to a more coherent policy approach towards migration. In the field of irregular migration, legislative work is under way to align legislation with EU acquis. Border surveillance activities were intensified since the migration crisis hit the region and a substantial number of joint patrols and operations were conducted with all neighbouring countries (apart from Croatia) with a special focus on detecting smuggling routes and activities. One investigation into people smuggling was launched in the second half of 2016. In July 2016 a second instance judgement led to a conviction to effective prison sentences of 10 persons, organisers and members of a criminal organisation specialised in migrant smuggling. The Centre for irregular migrants accommodated 123 people in 2016, compared with 112 in 2015. The existing capacities of the Centre fully meet the current needs. And its staff continued to receive relevant training. In the area of asylum, the overall capacity of Montenegro to handle asylum applications remains sufficient for the current flow of asylum seekers entering the country. In 2016, 335 requests for asylum were registered. The top three nationalities were citizens from Afghanistan, Syria and Iraq. The vast majority of asylum applicants leave the country during the course of the procedure. Montenegro reported good cross border cooperation with all its neighbours. Based on a thorough needs analysis covering staffing, training, equipment and infrastructure a Schengen Action Plan was adopted in February 2017. It determines further steps in the legislative alignment of domestic legislation with the EU acquis in the area of border management, as well as for the modernisation of infrastructure and training. Public order and security Montenegro adopted in recent years its own Serious and Organised Crime Threat Assessment on the basis of which is rolling out its security priorities. Montenegro has been a hub for trafficking of illicit tobacco products to the EU. Particular efforts need to be put to tackle drug trafficking, as the organised crime groups originating from the country are active in particular as regards trafficking of cocaine. The organised crime groups active in Montenegro have also invested illicit proceeds in sport clubs which can generate profits by selling players and can facilitate additional frauds.

The monthly number of alerts created by Member States in the Schengen Information System (SIS) based on Article 26 remained stable throughout the period October 2016-September 2017. Art. 26 SIS alerts 2016 M10 2016 M11 2016 M12 2017 M01 2017 M02 2017 M03 2017 M04 2017 M05 2017 M06 2017 M07 2017 M08 2017 M09 Grand Total Montenegro 1 1 0 3 2 2 0 1 1 1 3 1 16 Montenegro has been a hub for trafficking of illicit tobacco products to the EU. Particular efforts need to be put to tackle drug trafficking, as the organised crime groups originating from the country are active in particular as regards trafficking of cocaine. The organised crime groups active in Montenegro have also invested illicit proceeds in sport clubs which can generate profits by selling players and can facilitate additional frauds. As regards fight against organised crime, a new draft law on Internal Affairs was prepared, which is supposed to introduce structural changes in the internal organisation of the police, in particular by promoting merit-based recruitment, evaluation and promotion. A new national Serious and Organised Crime Threat Assessment (SOCTA) is currently under preparation. The institutional set-up in the fight against organised crime was further strengthened. The Special Police Unit has now 20 positions filled as foreseen, however further staff increases remain necessary so as to meet the needs. The number of staff of the Special Prosecutor Office has increased to 29 civil servants while 8 vacant positions are still to be filled. Efforts should continue to develop the country's track record in organised crime cases, also as regards trafficking in human beings and money laundering where results are limited. Pro-active investigations remain rare and most investigations in organised crime cases still start on the basis of signals received. Money laundering is de facto not prosecuted as a standalone crime, which hampers the establishment of relevant track record. There are currently several criminal investigations into suspicions of money laundering but no case has been brought before the court in recent years. Use of financial investigations is still limited. As regards relations with Europol, the cooperation runs smoothly and Montenegro takes part in numerous Analysis Work Files. Its liaison officer was seconded to Europol already in 2015. II.1.5 SERBIA Irregular migration, including readmission As regards irregular migration challenges, the number of Serbia's nationals which were refused entry in 2016 was 7,910 (roughly the same as in 2015 where 7,850 cases were reported). The number of illegal stays decreased from 13,785 to 11,180 between 2015 and 2016. A significant decrease was reported in the number of asylum application, from over 30,325 in 2015 to 13,515 in 2016). Refusals of entry for citizens of Serbia 2008 2009 2010 2011 2012 2013 2014 2015 2016 Schengen+ area 5,615 3,580 6,500 6,620 5,590 9,170 9,520 7,850 7,910 1,515 1,730 2,920 3,580 3,325 5,445 6,530 4,805 4,710 N/A N/A N/A N/A N/A 1,235 730 740 765 615 825 1,575 1,245 1,050 865 700 700 605 390 260 455 450 245 715 600 575 510 355 55 45 45 55 65 110 175 265 Illegal stay by citizens of Serbia 2008 2009 2010 2011 2012 2013 2014 2015 2016 Schengen+ area 12,980 8,330 12,020 9,390 11,280 11,820 15,400 13,785 11,180 Hungary 355 495 540 1,125 2,030 2,275 3,350 2,580 2,455 Switzerland N/A 0 0 0 745 715 665 810 850 Austria 2,290 1,280 855 940 1,015 1,090 815 460 660 Slovenia 230 125 355 610 115 90 110 110 440 The number of asylum applications lodged by Serbian nationals in the Schengen area is still high and amounts to 600 on average per month in the second quarter of 2017. However, a significant decrease was registered if compared to figures from last year where average monthly rates exceeded 1,300 applications. Germany and France continued to constitute top destinations for asylum applicants from Serbia. Yearly total number of asylum applications by citizens of Serbia 2008 2009 2010 2011 2012 2013 2014 2015 2016 Schengen+ area 15,660 6,435 18,845 15,630 21,065 22,725 31,170 30,325 13,515 Germany 2,250 890 6,795 6,990 12,810 18,000 27,145 26,945 10,260 Netherlands 45 55 65 105 145 265 195 445 945 France 3,425 980 800 665 840 700 605 460 655 Sweden 2,035 585 6,255 2,645 2,670 1,670 1,510 1,055 460

Monthly asylum applications by citizens of Serbia 2016 M07 2016M08 2016M09 2016M10 2016M11 2016M12 2017M01 2017M02 2017M03 2017M04 2017M05 2017M06 2016 2nd half 2017 1st half Schengen+ area 1,255 1,415 1,375 930 1,175 990 815 695 910 710 565 530 7,140 4,225 Germany 1,005 1,100 1,080 650 845 670 555 445 610 410 320 285 5,350 2,625 France 35 45 70 50 80 60 100 70 125 125 100 100 340 620 Netherlands 130 135 80 35 60 80 20 35 5 30 10 25 520 125 Readmission and return: Serbia's cooperation on the readmission of own nationals is very good with a return rate that stayed more or less equal between 2015 (90.9%) and 2016 (90.1%) and 12,245 returns performed in 2016. However, readmission of third country nationals (especially from HU, RO and BG) constitutes an area of concern and needs to be further addressed. So far, less than 10% of readmission requests of third country nationals who illegally crossed the borders to the EU coming from Serbia have been approved. Good cooperation of Serbia on border controls is however appreciated by neighbouring Member States. So far, 19 Implementing Protocols have been signed with 21 Member States: Italy, Slovenia, France, Hungary, the United Kingdom, Austria, Malta, Slovakia, Germany, Romania, Bulgaria, Estonia, Czech Republic, Belgium, The Netherlands, Luxemburg, Cyprus, Greece, Latvia, Portugal and Sweden. Bilateral Readmission agreements have been signed with Bosnia and Herzegovina, Denmark, Canada, Norway, Croatia, Switzerland, Former Yugoslav Republic of Macedonia, Moldova, Montenegro and Russia. The first round of negotiations took place with Ukraine. Negotiations have been launched with Algeria, Morocco, Afghanistan, Iraq, Pakistan, Arab Emirates, Belarus and Georgia. 2014 2015 2016 Ordered to leave Returned Return rate Ordered to leave Returned Return rate Ordered to leave Returned Return rate Schengen+ area 12,145 8,705 71.68% 14,985 12,985 86.65% 13,870 12,350 89.04% Germany 6,690 6,040 90.28% 8,300 10,230 123.25% 7,560 9,910 131.08% Austria 0 N/A N/A 1,195 N/A N/A 1,715 685 39.94% Netherlands 310 180 58.06% 315 235 74.60% 850 635 74.71% Sweden 1,300 885 68.08% 1,450 1,085 74.83% 710 505 71.13% France 745 165 22.15% 655 190 29.01% 520 175 33.65% The coordination among all institutions involved, in particular at a strategic policy level in order to improve migration management in a systematic manner, as well as donor coordination still needs to be further strengthened. Also, the establishment and adoption of a multi-annual strategy for the fight against irregular migration is needed. Works on a new law on foreigners are on-going. Serbia has created a specific task force in response to the threat from organised migrant smuggling through its territory. The task force constitutes a positive and concrete response to the irregular migration threats in the country. It is headed by the State Prosecutor and includes stakeholders from Serbian law enforcement with a responsibility for facilitating anti-migrant smuggling prosecutions. In the area of asylum, work on the new Law on Asylum intended to ensure alignment with the acquis and to provide the basis for the implementation of the asylum procedure in line with European standards needs to be completed. Recruitment is still ongoing for vacant posts in the Asylum Office. Training continued on advanced interview techniques with vulnerable groups, on identification of persons with special needs as well as on collection of information on the country of origin. As regards border management, the revised integrated border management (IBM) strategy and its dedicated action plan were adopted by the Serbian authorities in the first half of 2017. The procedure for drafting a Schengen Action Plan is still in the early stages. The related necessary comprehensive assessment of the legal, technical, infrastructural and human requirements has been carried out. A substantial challenge concerns the technical equipment and infrastructure for border checks and border surveillance which needs to be strengthened and upgraded where needed in order to ensure a more effective control of the borders. Public order and security As regards organised crime, according to Europol, nationals of Serbia (along with those of Albania and Bosnia and Herzegovina) are among the most frequently reported nationalities for organised property crimes in the EU. Serbian organised crime groups carry out burglaries, thefts and robberies across the EU. Nationals of Serbia are also one of the most frequently encountered victims of trafficking in human beings originated from the Western Balkans region. Serbia enhanced its cooperation with Europol, increasing the number of Analysis Work Files it cooperates on. A Serbian liaison officer was sent to Europol's HQ in March 2017 and an EBCGA regional liaison officer has been sent to Belgrade in September 2017. Also in September 2017, the country signed a working arrangement with CEPOL. The monthly number of alerts created by Member States in the Schengen Information System (SIS) based on Article 26 has been increasing in the recent months. Art. 26 SIS alerts 2016 M10 2016 M11 2016 M12 2017 M01 2017 M02 2017 M03 2017 M04 2017 M05 2017 M06 2017 M07 2017 M08 2017 M09 Grand Total Serbia 12 13 15 12 32 24 24 20 32 30 41 42 297 In order to step up the fight against organised crime, the Law on Organisation and Jurisdiction of Government Authorities in Suppression of Organised Crime, Terrorism and Corruption (entering into force in March 2018) foresees the establishment of specialised authorities for investigating, prosecuting and adjudicating cases in the mentioned fields. There is a delay in adopting a new Financial Investigation Strategy after the previous one expired in 2016. In August 2017, a new Strategy for the Prevention and Suppression of Human Trafficking for 2017 – 2022 was adopted, together with accompanying action plan. On the basis of this strategy, Serbia needs to take steps towards a pro-active identification and due protection of human trafficking victims. An operational agreement with Europol is in place and a Serbian Police Liaison Officer is posted at Europol since March 2017. The working arrangement with the European Police College (CEPOL) was signed in September 2017. Providing for a solid basis for mutual support in training activities for law enforcement officials and the exchange of best practices in international and European cooperation mechanisms, this arrangement should help enhancing the effectiveness of fighting cross-border crime in particular. Further efforts need to be taken in order to develop a sustainable track record of final convictions and dismantling networks involved in organised crime, money laundering, people smuggling and trafficking in human beings.

II.2 EASTERN PARTNERSHIP II.2.1 REPUBLIC OF MOLDOVA Irregular migration, including readmission The Commission confirmed Moldova's implementation of the Visa Liberalisation Action Plan benchmarks in its fifth (final) report of 15 December 2013. Visa-free travel for Moldovan citizens with a biometric passport started on 28 April 2014. According to statistics provided by the Moldovan authorities, more over 980,000 Moldovan citizens have made more than 2,700,000 trips to the EU Member States under the visa-free regime between 28 April 2014 and 25 April 2017. As regards irregular migration challenges, the number of Moldovan citizens being refused entry at the external Schengen borders has increased from 1,845 (in 2014) over 2,725 (in 2015) to 4,660 (in 2016). According to operational data received by EBCGA from the Member States, there was an increase by almost a quarter in refusal of entry between the second half of 2016 and the first half of 2017. When looking at the larger picture, there was an increase by almost half in refusal of entry between the first half of 2016 and the first half of 2017. During 2016 and the first half of 2017, the main countries issuing a refusal of entry were Romania, Poland and Italy, as has typically been the case since the introduction of the visa-free regime for Moldova. Refusal of entry for citizens of Moldova 2012 2013 2014 2015 2016 Schengen+ area 1,540 1,150 1,845 2,725 4,660 Romania 875 655 640 725 1,410 Hungary 280 160 460 605 835 Italy 40 30 225 510 790 Poland 110 100 115 165 740 Germany 15 20 25 65 110 According to Eurostat data, the number of Moldovan citizens apprehended as illegally present in the Schengen area amounted to 2,245 (in 2014), increasing to 4,050 (in 2015) and 7,660 (in 2016). On the basis of operational data provided by EBCGA, we can say that while the number of Moldovan citizens apprehended as illegally present appears to have risen by around 40% between the first half of 2016 and the first half of 2017, there appears to have been a decrease of less than 10% between the second half of 2016 and the first half of 2017, indicating a slight downward tendency. During 2016 and the first half of 2017, the Schengen countries where the highest numbers Moldovans apprehended al illegally present could be found in Hungary, Poland and Germany. Illegal stay by citizens of Moldova 2012 2013 2014 2015 2016 Schengen+ area 3,325 2,505 2,245 4,050 7,660 Hungary 255 305 425 2,040 3,015 Germany 265 260 205 285 2,050 Poland 75 50 80 160 870 France 865 435 575 435 410 Romania 350 340 225 175 360 Italy 670 500 370 365 295 At the start of the visa-free regime for Moldova, there was a sharp increase in asylum applications by Moldovan citizens in the Schengen countries: from 475 (in 2014) over 1,850 (in 2015) to 3,675 (in 2016). These numbers can be mainly attributed to Germany, where the number of asylum applications rose from 270 (in 2014) over 1,565 (in 2015) to 3,405 (in 2016). In all cases, over 95% of the asylum applications came from first-time applicants. Yearly total number of asylum application by citizens of Moldova 2012 2013 2014 2015 2016 Schengen+ area 435 315 475 1,850 3,675 Germany 35 70 270 1,565 3,405 Greece 20 20 10 35 45 Italy 10 5 20 35 35

Monthly data, however, indicates that the peak of monthly asylum applications was in March 2016 (660 asylum application Schengen-wide, of which 640 in Germany) with the number gradually falling after the summer and sharply after December 2016, now amounting to 120 monthly applications on average during the first six months of 2017. Monthly asylum applications by citizens of Moldova in Schengen+ area M01 M02 M03 M04 M05 M06 M07 M08 M09 M10 M11 M12 2014 20 20 15 20 20 35 35 50 35 40 65 55 2015 60 80 120 130 145 265 165 170 220 190 135 145 2016 235 625 660 110 75 185 215 285 115 250 355 510 2017 265 130 85 45 85 110 Monthly asylum applications by citizens of Moldova 2016

M07 2016

M08 2016

M09 2016

M10 2016

M11 2016

M12 2017

M01 2017

M02 2017

M03 2017

M04 2017

M05 2017

M06 2016 2nd half 2017 1st half Schengen+ area 215 285 115 250 355 510 265 130 85 45 85 110 1,730 720 Germany 195 265 100 230 330 495 245 115 50 35 35 25 1,615 505 Netherlands 5 0 5 5 0 0 5 5 15 0 35 65 15 125 Italy 5 0 0 0 0 0 10 5 10 0 5 5 5 35 Greece 0 10 5 5 5 5 0 0 5 5 5 5 30 20 The recognition rate was high (over 10% in 2015), but has dropped (to 2% in 2016 and further down to around 1% during the first half of 2017). Readmission and return: The number of return decisions issued to Moldovan citizens has almost tripled between 2014 and 2016 (from 1,700 to 5,035). This also translated into a large increase of the number of persons returned (from 1,060 in 2014 to 2,425 in 2016). The drop in return rate (Schengen-wide over 60% in 2014 and 2015, compared to 48% in 2016) has to be seen in this relative perspective. A closer insight shows that the existing challenges in effective returns were not due to lack of performance in this field by Moldovan authorities. The quality of their cooperation is greatly valued by the EU Member States, and is also proved by a high rate of positive replies to readmission applications. The meetings of the Joint Committee of the EU-Moldova Readmission Agreement allow for systematically discussions on arising practical issues. The last Joint Readmission Committee of 6 October 2017 assessed the cooperation with Moldova as generally positive. Between 2015 and 2017, Moldova signed a Readmission Agreement with Kazakhstan and finalised (pending signature) readmission agreements with Armenia and Ukraine. Negotiations on a readmission agreement with Azerbaijan, Russia and Lebanon are ongoing. 2014 2015 2016 Ordered to leave Returned Return rate Ordered to leave Returned Return rate Ordered to leave Returned Return rate Schengen+ area 1,700 1,060 62.35% 1,810 1,215 67.13% 5,035 2,425 48.16% Germany 55 20 36.36% 80 25 31.25% 2,435 590 24.23% France 405 350 86.42% 295 380 128.81% 355 335 94.37% Italy 370 130 35.14% 365 125 34.25% 295 130 44.07% Poland 80 60 75.00% 150 135 90.00% 820 825 100.61% Romania 215 220 102.33% 160 165 103.13% 165 165 100.00% Public order and security Europol's threat assessment tells that the activities of Moldovan organised crime groups continue to represent a substantial crime threat. Moldovan organised crime groups are particularly active in Austria, France, Germany, Latvia and Poland, and are primarily involved in drugs trafficking (with the trafficking of heroin being a significant concern), organised property crime, excise fraud, payment card fraud and money laundering. These crime groups tend to link up with other groups from primarily Romania, Ukraine and Bulgaria, while Russian-speaking organised crime groups exploit Moldova as a transit country to launder money and bring it into the EU. Illicit tobacco trade remains a primary driver of crime and corruption in Moldova. While Moldova is not a major course country for irregular migrants, it remains a source country for trafficking in human beings for sexual and labour exploitation. Moldova is working on a new National Strategy for Preventing and Combating Trafficking in Human Beings for the period 2018-2023, to be approved end of 2017. At the same time, it is working on a new National Anti-Drugs Action Plan. Europol has no evidence that Moldovans would still be involved in counterfeiting Italian Euro banknotes. To improve judicial cooperation, Moldova signed an agreement with Eurojust mid-2014, which entered into force in October 2016. The country also signed an agreement with Europol after the visa liberalisation. The monthly number of alerts created by Member States in the Schengen Information System (SIS) based on Article 26 remained stable throughout the period October 2016-September 2017.

Art. 26 SIS alerts 2016 M10 2016 M11 2016 M12 2017 M01 2017 M02 2017 M03 2017 M04 2017 M05 2017 M06 2017 M07 2017 M08 2017 M09 Grand Total Moldova 4 5 6 7 5 6 2 8 6 4 1 6 60 While Moldova has been working on adopting legislation to create a framework for the fight against corruption and money laundering, it is at times endangered and the implementation seriously lags behind. The National Integrity and Anti-Corruption Strategy (NIAS) for the period 2017-2020 comprises activities to ensure integrity and to fight corruption in the private sectors as well as the public sectors. The ten sectorial action plans to tackle corruption would need to be elaborated as a matter of priority in the implementation of the strategy. In the current structure, the institutional framework in Moldova primarily consists of: the Anti-Corruption Prosecutor’s office (APO); the National Anti-Corruption Centre (NAC), together with its subordinate Criminal Assets Recovery Agency (CARA) and Office for Prevention and Fight Against Money Laundering (OPFML); and the National Integrity Authority (NIA). There are issues in the functioning of this system and only limited progress is made on the efficiency and effectiveness of this framework. Since the finalisation of the VLAP, the NAC was made accountable to the Parliament again (as it was prior to 2013 when it was made accountable to the Government). There remain however concerns as regards political influence on the anti-corruption system in Moldova. Over the past months, there have also been attempts to undermine the anti-corruption framework by proposals such as the so-called "capital liberalisation law" or intentions to deprive the NAC from some of its prerogatives. A weakened anti-corruption framework and less investigative powers would further endanger the effectiveness of the investigations concerning the frauds around Banca de Economii, Banca Sociala and Unibank. An asset recovery office has been set up in 2017 under the umbrella of the NAC: the CARA. The CARA is supported by the OPFML for the financial investigations. However, while the CARA aims at strengthening the investigation, prosecution, recovery and management of criminal assets, its scope remains limited to corruption and money laundering offences. The CARA is currently not dealing with the proceeds stemming from other serious crime (such as cases of drugs trafficking or trafficking in human beings). It is currently considered to transfer the necessary competences for all types of crimes to the CARA in view of establishing an efficient single asset recovery office. Also, there is currently the intention to make the OPFML an independent boy under the direct responsibility of the government. In the area of integrity testing, professional and institutional integrity testing has been introduced. After many struggles regarding the legal set-up of an integrity system, a law was adopted in 2017 to unify the standards for preventing corruption and ensuring integrity in the public and private sectors. The law provides for the establishment of fixed responsibilities for the heads of authorities and civil servants (including judges), regulates the role of the national anti-corruption authorities in strengthening and controlling the implementation of the measures to ensure integrity and provides sanctions for the lack of integrity. The body responsible for the integrity system is the NIA, which replaces the old National Integrity Commission (NIC). The law on the NIA entered into force in August 2016 and envisaged that the establishment of the NIA would have taken 6 months, resulting in effective operation as of January 2017. According to the law on the NIA, the president and vice-president are crucial in making the NIA operational, including through appointing inspectors and deciding on the organisational structure. Unfortunately, the selection process for the senior management has seen no progress at all: after serious delays, the initial selection procedure for the president was cancelled in October 2017 (when the two final candidates both failed the last stage with a polygraph test) and a new selection procedure is now being organised. With no senior management in place, inspectors cannot be appointed, which means that declarations on assets, personal interests and conflicts of interest are currently not being verified. The competition for the selection of the NIA vice-president has however started. It has to be considered if the vice-president could take over the tasks of the president, until appointment of the latter, in order to ensure progress in the set-up and functioning of the NIA, notably by appointing inspectors. In autumn 2017 there was already a backlog of around 60,000 declarations. These declarations, made after August 2016, cannot be verified by the inspectors of the previous integrity authority NIC as they have seized their activity with the entry into force of the law on the NIA. The de facto non-functioning of the integrity system casts a shadow on the integrity climate in Moldova. Also, with an integrity system being part of the VLAP benchmark on anti-corruption, the continuous fulfilment of the VLAP benchmarks is at risk, also considering the slow developments to improve the efficiency and effectiveness of the NAC and its subordinate bodies highlighted above. With regard to the fight against money laundering, a draft law to align the legislation to the 4th EU Anti-Money Laundering Directive was voted in first reading in the Parliament in March 2017, after which serious delays in the final adoption occurred. This new law foresees in the establishment of centralised bank registries and also envisages the implementation of the 40 recommendations of the Financial Action Task Force. The non-adoption of the law can ultimately lead to the rejection of business relations and significant problems with foreign partners. II.2.2 GEORGIA

Integrated border management, migration management and asylum Visa free travel for Georgian citizens with a biometric passport entered into force on 28 March 2017, on the same day as the revised visa suspension mechanism. According to information received from Georgia, between 28 March and 30 November 2017, 173,396 Georgian citizens enjoyed the visa free travel to the Schengen area. Georgia has made further progress in establishing the Unified Migration Analytical System (testing launched in October 2016), the Unified System of Threat and Risk Analysis at the borders, the Migration Risk Analysis methodology, updating the 2015 Migration Profile, and thereby continued implementing the visa liberalisation benchmarks in a sustained manner. One of the biggest remaining challenges is to assess and address the root causes of irregular migration from the country, as well as integration of internally displaced persons. Georgia has been carrying out three phases of nation-wide campaigns and trainings on the rules of visa free travel and is monitoring travels to the Schengen area. Regarding asylum: the significant number of asylum applications rejected based on national security considerations during the first half of 2017 , which was an issue raised in the third and fourth progress reports on Georgia's implementation of the action plan on visa liberalisation , is of concern, and Georgia needs to ensure that appropriate legal and procedural guarantees are in place for effective legal remedy in such cases. As regards irregular migration challenges, according to Eurostat data, in 2015 1,330 Georgian citizens were refused entry at the external borders of the Schengen+ area. In 2016, this number was much less: 810. According to the operational data received by EBCGA from the Schengen+ countries, the trend is a sustained number of refusals of entry in the first half of 2017 compared to the second half of 2016 and a slight increase compared to the first half of 2016. Quarterly EBCGA data in 2017 seems to indicate an increase in April-June compared to January-March. In 2016, most refusals were done by Poland, Greece and France. Refusal of entry for citizens of Georgia 2008 2009 2010 2011 2012 2013 2014 2015 2016 Schengen+ area 370 6,050 3,315 2,820 8,965 8,160 3,185 1,330 810 Poland 40 5,685 2,885 2,340 8,245 7,250 1,345 505 200 Greece 50 125 75 75 95 160 210 135 130 France 30 25 15 30 20 30 5 25 105 Romania 25 5 20 15 10 25 230 170 55 According to Eurostat data, there were 5,405 Georgian citizens apprehended as illegally present in the Schengen+ Area in 2015 and 5,240 in 2016. Operational data received by EBCGA in 2017 seems to indicate similar trends for the first half of 2017 (slight decrease compared to the second half of 2016 but increase compared to the first half of 2016). In 2016 Germany (1,810), Greece (865), France (615), Spain (495) Austria and Italy reported the most of illegal stays. Illegal stay by citizens of Georgia 2008 2009 2010 2011 2012 2013 2014 2015 2016 Schengen+ area 4,745 6,785 5,095 4,360 5,425 5,165 6,550 5,405 5,240 Germany 460 605 710 585 1,085 1,380 1,580 1,495 1,810 Greece 1,915 2,395 1,340 850 795 590 820 1,055 865 France 0 410 400 285 390 400 905 830 615 Spain 635 595 440 355 290 245 390 455 495 According to Eurostat annual data, the number of asylum seekers in the Schengen+ area increased from 8,110 in 2015 to 8,700 in 2016. In 2016, the most affected Member States were Germany (3,770), France (1,165), Greece (690), Sweden (720) and the Netherlands (595).

Yearly total number of asylum application by citizens of Georgia 2008 2009 2010 2011 2012 2013 2014 2015 2016 Schengen+ area 5,340 10,985 7,465 7,450 11,620 9,750 8,570 8,110 8,700 Germany 285 640 750 525 1,430 2,485 3,180 3,195 3,770 France 460 540 1,435 1,740 2,680 2,695 1,610 1,325 1,165 Sweden 225 370 290 280 750 620 805 890 720 Greece 2,240 2,170 1,160 1,120 895 535 350 385 690 Netherlands 75 425 610 235 250 215 335 265 595 Switzerland 480 640 640 400 725 655 465 405 465 Austria 510 975 370 260 300 255 415 405 350 Belgium 275 385 365 400 505 370 430 300 240 Italy 65 85 80 30 65 105 90 135 195 Poland 70 4,180 1,085 1,735 3,235 1,240 720 390 125 Monthly Eurostat data show an increase in the first half of 2017 (average 771) compared to 2016 (average 721), but if we compare the first half of 2017 to the second half of 2016 (average 791), the trend is not increasing. Monthly asylum application by citizens of Georgia (2016) 2016 M01 2016 M02 2016 M03 2016 M04 2016 M05 2016 M06 2016 M07 2016 M08 2016 M09 2016 M10 2016 M11 2016 M12 2016 1st half 2016 2nd half Schengen+ area 590 685 645 605 610 770 915 855 785 815 745 635 3,905 4,750 France 100 105 80 85 125 115 60 105 100 90 110 90 610 555 Germany 205 280 230 275 220 360 525 480 390 345 275 180 1,570 2,195 Greece 55 65 70 25 45 45 65 35 55 60 85 85 305 385 Sweden 70 70 70 60 50 50 50 65 55 65 65 50 370 350 Italy 5 15 15 15 25 25 10 5 10 25 25 20 100 95 Switzerland 40 25 40 30 35 55 60 40 30 30 35 35 225 230 Netherlands 25 30 60 40 40 40 60 45 40 70 80 65 235 360 Austria 30 30 30 10 20 20 20 40 45 40 30 40 140 215 Iceland 0 0 0 0 0 0 5 0 10 15 5 5 0 40 Monthly asylum application by citizens of Georgia (2017) 2017 M01 2017 M02 2017 M03 2017 M04 2017 M05 2017 M06 2017 1st half Schengen+ area 690 720 830 725 830 835 4,630 France 85 105 110 125 160 175 760 Germany 205 205 215 270 240 170 1,305 Greece 70 75 85 65 110 105 510 Sweden 90 65 80 40 50 70 395 Italy 30 25 45 20 45 50 215 Switzerland 35 35 45 25 50 50 240 Netherlands 75 85 75 40 35 40 350 Austria 25 30 45 35 20 40 195 Iceland 0 5 5 5 5 40 60 If we compare the last two months for which Eurostat data seems to be complete to a reliable extent, May-June 2017 (830 and 835) to the same two months in 2016 (610 and 770), there is an increase of 20%. Among the most effected Schengen countries, asylum requests are going down in Germany but increasing in France, Greece and Iceland and seem to be stable in the other countries. The recognition rate for asylum requests lodged by Georgian citizens at first instance was 6.62% in 2015 and 6.48% in 2016. Readmission and return: The number of persons of Georgian nationality ordered to leave decreased from 6,415 in 2015 to 5,635 in 2016, while the return rate increased from 45% in 2015 to 55.9% in 2016. However, this relatively modest return rate does not necessarily reflect Georgia's response to readmission application once these are submitted by the Member States. In fact, cooperation with Georgia on readmission is assessed as exemplary. This was confirmed in the last meeting of the Joint Readmission Committee which took place on 21 March 2017 in Tbilisi. With EU support, Georgia has an Electronic Readmission Case Management System (RCMS) currently used by 17 Member States who all expressed satisfaction with its use. MS using RCMS currently receive travel documents free of charge. Georgia also intends to develop a possibility of printing travel documents directly by EU MS. Georgia is also making efforts to conclude further readmission agreements with EU and other countries. In the course of 2016, the following new readmission agreements entered into force: with Denmark (1 August); Belarus (18 June) and Moldova (1 August). Furthermore, Georgia initiated new agreements with other third countries, both origin and destination countries (Serbia, Montenegro, Pakistan, Iceland, Afghanistan, Kazakhstan, Kyrgyzstan, Iraq etc.). The Ministry of Internally Displaced Persons from the Occupied Territories, Accommodation and Refugees of Georgia is now fully responsible for the implementation of the national reintegration programme of returned Georgian migrants. Annual reintegration programmes are prepared with annual national budget allocations dedicated to their implementation, and it is important to maintain the appropriate level of budget allocations. 2014 2015 2016 Ordered to leave Returned Return rate Ordered to leave Returned Return rate Ordered to leave Returned Return rate Schengen+ area 6,260 3,375 53.91% 6,415 2,895 45.13% 5,635 3,150 55.90% Germany 1,040 620 59.62% 1,090 730 66.97% 1,350 1,180 87.41% France 1,535 280 18.24% 1,500 265 17.67% 1,255 220 17.53% Greece 820 1,200 146.34% 1,240 810 65.32% 830 690 83.13% Sweden 320 155 48.44% 360 230 63.89% 395 165 41.77%

Public order and security In view of the significant and sustained impact Georgian organised crime groups represent for the EU, this report focuses on preventing and fighting organised crime, judicial and law enforcement cooperation. According to Europol's threat assessment, OCGs from Georgia are still reported as one of the most frequently represented non-EU nationalities (including dual nationals) of suspects involved in serious and organised crime in the EU. Georgian OCGs are particularly active in France, Greece, Germany, Italy and Spain. In many cases, Georgian organised crime groups are linked to so-called thieves-in-law. These groups are highly mobile and they are mainly involved in organised property crime (particularly organised burglaries and thefts), but also corruption, document fraud, extortion and racketeering, and their control of the criminal markets is gradually increasing. Georgia remains a transit country for various illicit commodities trafficked to the EU, in particular drugs (heroin being the main concern). Georgia is also increasingly used to launder illicit proceeds generated by organised crime groups in the EU. These include groups originating from Georgia as well as other EU and non-EU-based organised crime groups. Georgia has been also emerging as a transit for laundered criminal proceeds flowing from Europe to the ultimate beneficiaries and organisers of fraud schemes located in Israel, China, and Hong Kong. This is in itself a significant crime threat, one to focus on in the future. The number of alerts created by Member States in the Schengen Information System based on Article 26 slightly increased over the last six months compared to the previous six months, with a more sharp increase in September 2017. This may indicate a trend and will need to be monitored. Art. 26 SIS alerts 2016 M10 2016 M11 2016 M12 2017 M01 2017 M02 2017 M03 2017 M04 2017 M05 2017 M06 2017 M07 2017 M08 2017 M09 Grand Total Georgia 5 12 1 2 7 10 3 7 4 8 11 18 88 Georgia continues to progress and demonstrates serious commitment in preventing and fighting organise crime, including cross-border cooperation for this purpose. Steered by the Interagency Coordinating Council for Combating Organised Crime (established in 2013), a new National Strategy of 2017-2020 for Combating Organised Crime and Action Plan 2017-2018 was adopted focusing on: fight against thieves-in law; drug-transit, cybercrime, applying modern police methods and international cooperation. A new Anti-Drugs Action Plan for 2016-2018 was also adopted in December 2016 and the legislative package aimed at implementing the rulings of the Constitutional Court was adopted on 26 July 2017. The Financial Monitoring Service prepared a draft AML/CFT Law aiming to implement the 4th EU AML Directive (2015/849). The Ministry of Internal Affairs continues the reforms started in 2015 to introduce intelligence-led policing and building a unified crime analysis system which are key aspects of the fight against organised crime. A new package of legislative amendments on racketeering and organised crime was prepared, based on international experiences. The Central Criminal Police Department underwent structural reforms, specialised units have been created, some representing good example of inter-agency cooperation, such as the Unit of Fighting against Drug Transit which involves both police and customs officers. In the coming months, Georgia will have to demonstrate that the newly adopted strategies and action plans are thoroughly implemented with adequate resources allocated, and their implementation is regularly evaluated. The Government or the Ministry of Internal Affairs have signed new law enforcement agreements or Memoranda of Understanding with several EU Member States and other countries in 2016-2017, which brought the number of EU Member States with which Georgia has such agreements in force to 16, including the key Member States most affected by Georgian crime groups. The International Criminal Cooperation Centre (ICCC) created within the Central Criminal Police Department is responsible for ensuring cooperation in fight against international crime and coordinating activities through police attachés and liaison officers. On 3 October, a Co-operation Plan was signed between the Ministry of Internal Affairs and CEPOL which defines organised crime as a priority. Georgian authorities pursued very active operational cooperation also at regional (i.e. in the framework of GUAM-Organisation for Democracy and Economic Development) and international level.

The Operational and Strategic Cooperation Agreement with the European Police Office (Europol) was signed in April 2017 and entered into force in July. The process for the conclusion of a Memoranda of Understanding on confidentiality and information assurance and the establishment of a secure line is ongoing and Georgia requested posting a liaison officer to Europol. It is of outmost importance that operational cooperation with Europol starts as soon as possible. The negotiations of a cooperation agreement with Eurojust have not yet started, in May 2017 a delegation from Eurojust carried out an assessment mission to Georgia. In October 2017, Eurojust sent a letter to the Council informing that Eurojust envisages launching, on 15 January 2018, formal negotiations with the intention of entering into a cooperation agreement with Georgia. According to the Memorandum of Understanding signed with the European Monitoring Centre for Drugs and Drug Addiction (EMCDDA), Georgia is expected to set up a National Drugs Minoring Centre. There is delay in setting the Centre up, originally foreseen for mid-2015. Anti-corruption: While Georgia has an electronic system of asset declarations of public servants since 2012, an effective verification mechanism of the declarations was missing. The relevant amendments to the Law on Conflict of Interest and Corruption in Public Institutions entered into force on 1 January 2017. Georgia has to demonstrate in the coming years that the verification mechanism functions effectively. External relations and fundamental rights During the assessment of the effective implementation of legislation and policies on anti-discrimination, (including by ensuring effective legal aid and implementation of relevant UN and Council of Europe instruments), Georgia reported that it expected the amendments to the Anti-Discrimination Law as proposed by the Public Defender to be adopted by Parliament by end 2015. These changes would, inter alia, require private persons to provide the Public Defender with necessary materials, documents or information for the examination of a case. However, no amendments have been adopted to date which would make the anti-discrimination legislation more effective. II.2.3 UKRAINE Integrated border management, migration management and asylum According to figures received from Ukraine, the total number of entries of Ukrainian citizens to the Schengen area from 11 June to 10 November 2017 was 9,594,490. Of them 2,332,682 entries were based on with biometrical passports and 235,795 329,670 entries to the Schengen area were without visas (3% of the total). As regards irregular migration challenges, according to Eurostat data, in 2015, 23,795 Ukrainian citizens were refused entry at the external borders of the Schengen+ area. In 2016, this number slightly decreased: 22,495. According to the operational data received by EBCGA from the Member States, in the second half of 2016 the number of refusals increased compared to the first half and this trend seems to be sustained in the first half of 2017 (18% compared to the second half of 2016, 36% compared to the first half). EBCGA quarterly data seems to indicate an increase in January-June 2017 compared to January-July 2016. In 2017, Poland, Romania, Hungary, Slovakia and Lithuania seem to be the most affected Member States. In 2016, most refusals were done by Poland, Hungary, Germany and Czech Republic. Refusal of entry for citizens of Ukraine 2008 2009 2010 2011 2012 2013 2014 2015 2016 Schengen+ area 15,375 19,100 18,725 16,115 18,345 16,775 15,585 23,795 22,495 Poland 9,445 12,800 11,095 9,115 12,555 12,060 11,185 19,020 18,775 Hungary 2,355 3,710 4,780 4,560 2,985 2,190 2,040 1,825 0 Romania 1,185 935 1,190 1,125 1,320 1,000 855 1,090 1,490 Slovakia 1,435 750 790 550 530 395 410 440 705 Lithuania 120 105 100 60 55 60 70 330 345

According to Eurostat data, there were 23,480 Ukrainian citizens illegally present in the EU+ area in 2015 and 29,565 in 2016. Operational data received by EBCGA in 2017 seems to indicate a positive outlook for the first half of 2017 (increase compared to the first half of 2016, however a decrease compared to the second half of 2016). The most affected Member States are Poland, Hungary, Germany, Czech Republic, Slovakia and France. Illegal stay by citizens of Ukraine 2008 2009 2010 2011 2012 2013 2014 2015 2016 Schengen+ area 12,275 10,860 10,400 11,370 11,980 12,265 16,520 23,480 29,565 Poland 3,200 2,070 1,885 3,995 4,800 5,210 7,455 11,885 17,445 Hungary 795 1,000 1,605 1,095 1,310 1,905 1,695 2,820 3,620 Germany 1,325 1,155 1,070 1,095 1,280 1,265 1,455 2,550 2,270 Czech Republic 1,545 1,500 955 1,125 1,065 890 1,020 1,225 1,550 Slovakia 600 410 365 370 335 355 500 785 1,165 France 555 355 290 375 310 340 565 935 625 Asylum: According to Eurostat annual data, the number of asylum seekers in the Schengen+ area decreased from 22,100 in 2015 to 12,460 in 2016. The most affected Member States were Spain, Italy, Germany, Poland, France and Sweden. Yearly total number of asylum application by citizens of Ukraine 2008 2009 2010 2011 2012 2013 2014 2015 2016 Schengen+ area 955 915 790 920 1,090 1,020 14,090 22,100 12,460 Spain 5 10 5 10 20 15 895 3,345 2,570 Italy 15 10 20 20 35 35 2,080 4,665 2,570 Germany 45 85 70 55 135 150 2,705 4,660 2,490 Poland 40 35 45 65 70 45 2,275 2,295 1,300 France 75 75 90 100 145 135 1,425 1,645 660 Sweden 55 130 120 190 130 170 1,320 1,415 615 Monthly Eurostat data shows a slight decrease in the second half of 2016 (average 906) compared to the first half (average 1,001). Similar monthly figures can be found in the first half of 2017 (average 897). Monthly asylum application by citizens of Ukraine 2016

M07 2016

M08 2016

M09 2016

M10 2016

M11 2016

M12 2017

M01 2017

M02 2017

M03 2017

M04 2017

M05 2017

M06 2016 2nd half 2017 1st half Schengen+ area 875 890 880 970 1,000 820 850 915 985 735 935 960 5,435 5,380 Italy 190 125 140 195 215 185 180 230 260 155 280 255 1,050 1,360 Spain 135 140 150 230 250 160 275 270 235 170 185 220 1,065 1,355 Germany 180 210 170 135 185 105 80 80 130 120 140 140 985 690 Austria 40 20 15 40 20 35 15 25 25 20 20 65 170 170 France 50 60 45 55 40 55 50 55 60 40 55 60 305 320 Czech Republic 45 40 50 50 30 45 50 50 40 35 40 40 260 255 If we compare the last two months for which Eurostat data seems to be complete to a reliable extent, April-May 2017 (735 and 935) to the same two months in 2016 (1,390 and 970), there is a decrease in asylum applications of 30%. Among the most effected Schengen countries, asylum requests are decreasing in Italy, Spain, Germany, Austria and France. Readmission and return: The cooperation with Ukraine on readmission remains very good, which is proved by both qualitative assessment of the EU Member States, and by a high return rate (82.58% in 2016). The latter remains stable despite a surge of return decisions issued in the Schengen+ area in the last years to Ukrainian nationals (2016 - 26,865; 2015 - 19,200; 2014 – 12,220). A large majority of returns are voluntary, or – where stipulated in the readmission agreement – are processed without a readmission application, or under accelerated procedure. Positive experience is also reported with respect to readmission of third-country nationals. The 10th Joint Readmission Committee held on 22 September 2017 took account of the proper implementation of the readmission agreement, and agreed on ways to handle remaining practical issues. In 2016, most return decisions were issued by Poland, Czech Republic, Slovakia, Sweden, Germany, France. 2014 2015 2016 Ordered to leave Returned Return rate Ordered to leave Returned Return rate Ordered to leave Returned Return rate Schengen+ area 12,220 9,135 74.75% 19,200 14,670 76.41% 26,865 22,185 82.58% Poland 6,575 6,405 97.41% 10,780 10,410 96.57% 16,170 15,360 94.99% Czech Republic 940 95 10.11% 1,330 110 8.27% 2,200 220 10.00% Slovakia 480 455 94.79% 770 740 96.10% 1,160 1,105 95.26% Sweden 140 110 78.57% 435 270 62.07% 960 455 47.40% Germany 270 140 51.85% 540 325 60.19% 815 1,370 168.10% France 450 190 42.22% 695 385 55.40% 815 330 40.49% Public order and security

According to Europol, OCGs originating from Ukraine are heavily involved in excise fraud, particularly the production and smuggling of illicit tobacco products to the EU. Cybercriminals based in Ukraine are among the most sophisticated in the world and represent a serious threat to EU digital infrastructures. Cybercrime originating from Ukraine continues to increase, both in scale and sophistication. Heroine is trafficked along the Caucasus route via Georgia, Moldova and Ukraine to the EU in large quantities, though no significant production exists in these countries. Ukrainian OCGs provide couriers to deliver drugs or stolen goods and establish their own distribution channels to supply drugs from Spain, Netherlands to Russia and Ukraine. Ukrainian OCGs operate across the EU and are particularly active in Austria, France, Germany, Latvia and Poland. They are involved in corruption, drug trafficking, organised property crime, excise fraud, money laundering and contract killings. Over the past two years, there has been a rapid increase in the cross-border activities of Ukrainian thieves-in-law. Ukrainian OCGs maintain close links with Russian OCGs and have increasingly reached out to establish links with EU-based OCGs. The monthly number of alerts created by Member States in the Schengen Information System (SIS) based on Article 26 increased throughout the period October 2016-September 2017. Art. 26 SIS alerts 2016 M10 2016 M11 2016 M12 2017 M01 2017 M02 2017 M03 2017 M04 2017 M05 2017 M06 2017 M07 2017 M08 2017 M09 Grand Total Ukraine 7 8 7 3 12 16 13 15 24 27 8 13 153 Ukraine is potential source country for illegal firearms trafficking to the EU. Currently, the level of trafficking activity appears to be low. However, the large number of firearms in circulation and diverted from military stockpiles constitute a considerable risk of increased trafficking activity in the future. As regards measures against organised crime, in July 2017, Ukraine ratified an agreement with Europol on Operational and Strategic Cooperation. The agreement aims at expanding cooperation, exchanging intelligence in criminal proceedings, participating in joint investigations in a wider range of crimes, locating persons involved in the commission of crimes, participating in intelligence analysis and creating joint investigation teams. It replaces an earlier agreement between Ukraine and Europol of December 2009. Furthermore, in September 2017, a Cooperation agreement with Eurojust entered into force. It will allow for a faster exchange of information between Ukrainian and EU law enforcement agencies through shared access to databases and shared investigative records. In a first step to establish a system of cyber security, in October 2017 the Parliament adopted a cyber security law to start state policy formation in this field and create conditions for ensuring cyber protection of the country's information infrastructure. The establishment of the State Bureau of Investigation (SBI) has advanced at a slow pace with its leadership only being appointed in late November 2017. It will be important to swiftly make the new agency fully operational while taking further measures to ensure its independence from political interference. The National Police of Ukraine (NPU) created in 2015 continues to enjoy a relatively high trust in the population but deeper reforms in the field of criminal investigation, which are necessary to combatting organised crime, remain slow. Recently, the Minister of Interior rejected calls for the creation of a dedicated unit to combat organised crime in the NPU to replace the previous UBOZ, disbanded in 2015. A reform concept for the Security Service of Ukraine (SSU) was elaborated in 2016 to transform it into a European-style intelligence service The Reform Concept envisages the removal of ordinary law-enforcement competencies from the SSU to retain only counter-terrorism, counter-intelligence, and protection of state secrets. The removal of SSU's law-enforcement competencies within organised crime, including smuggling (among others), would create a delineation of competencies and delimit the SSU's current ad-hoc practice of taking responsibility for investigations that seem to be of interest for the political level or a source of corruption within the SSU itself. However, no decision has been taken towards the adoption of the SSU Reform Concept, which is stalled at political level. In the first nine months of 2017, the Ukrainian law enforcement agencies uncovered 188 organised crime groups with a total of more than 800 persons. Crime groups were predominantly active in drug-related crimes, theft, robbery and illegal excise operations. The State Border Guard Service has further advanced towards a modern law-enforcement agency in line with the EU best practices. It is foreseen to further enhance SBGS capacity through an EU financed twinning project lead by three EU MS (Germany, Lithuania and Poland). This aims at strategy revision, legislative revision and operational improvements. The Ukrainian authorities have as per their reports ensured until now access to Interpol databases at 126 international border crossing points. This needs to be expanded to local and inter-state border crossing points. Prevention and fight against corruption The Commission confirmed Ukraine’s implementation of all benchmarks in its sixth and final report on 18 December 2015. The sustained reforms progress in the prevention and fight against corruption and the commitments taken by the Ukrainian leadership in this area have led to the completion of the visa liberalisation process and entry into force of the visa free regime on 11 June 2017. The National Anti-Corruption Bureau (NABU), the Specialised Anti-Corruption Prosecution (SAP), the National Agency for Prevention of Corruption (NAPC), as well as the Asset Recovery and Management Office Agency (ARMA) are now in place and first results have been already achieved, notably by NABU. Nevertheless, the sustainability of the reforms achieved requires measures to ensure both the independence and effectiveness of anti-corruption institutions. NABU's effectiveness would be improved with independent access to wire-tapping. The independence of NABU and SAP is under serious threat.

In particular, the upcoming audit of NABU raises concerns since it threatens to undermine the leadership of NABU with a politically-driven appointment of auditors.. The recent amendments to the Criminal Procedural Code – which were adopted on 3 October 2017 without prior consultation with the main stakeholders, who were not aware of these amendments until the text was published on 29 November 2017. Concerns relate notably to a shortening of time-limits for investigations which will result in many cases having to be closed because the maximum time-limit for investigations has expired. The requirement to have many investigative decisions approved by the judge is also problematic in light of the current bottlenecks which NABU cases are facing in the courts. NABU's capacity to effectively fight corruption is further undermined by the recent raid of its undercover operations by the SSU and the subsequent public disclosure of the identities of NABU's undercover agents by the GPO which destroyed NABU's undercover operations and thwarted several ongoing investigations of high-level public officials. In addition, as also highlighted by the Venice Commission's opinion, there is still a missing link as regards the set up an anti-corruption court to adjudicate high level corruption cases and ensure a track record of convictions. Out of 92 criminal proceedings sent to court, only 23 convictions were passed, most of which concerning secondary participants in high-level cases. 17 convictions came into force, out of which 15 were results of the plea-bargaining agreements with suspects. The electronic declaration system has been successfully launched on 1 September 2016 and as of 14 August 2017 the e-declaration register contained 1,463,214 declarations. However, very little progress has been made since then on the verification of asset declarations. Since the setting-up of NAPC in 2015, its envisaged five-member board has still not been fully elected. Currently two board members still remain to be elected. The delays in the selection process of the leadership, challenges related to the internal management of the NAPC, an inadequate legal and regulatory framework, the lack of direct and automated access to external databases and registries, as well as of a data verification software system prevented NAPC from being fully functional in its tasks control and verify asset declaration of high level officials. The current regulatory set-up and dysfunctionality of the agency risk resulting in impunity of declarants due to the expiry of time limits. In November, three former NAPC employees publically accused NAPC Head Natalya Korchak of falsifying the verification of e-declarations of public officials and accused the Presidential Administration of political interference in the verification process. The Assets Recovery and Management Agency (ARMA) was set up under the law passed in June 2016. It is at an early stage of institutional and operational capacity development. At the present, ARMA has 60 officers employed out of the maximum 130 workforce positions envisaged in the law. It has initiated signature of memorandum of understanding with the national bodies, including the Prosecutor General’s Office, Ministry of Justice and the National Police, to be able to exchange information more quickly efficiently. On the international scale, it has become a national contact point of the Camdem Assets Recovery Interagency Network in Europe (CARIN), Interpol and the partnership between the World Bank and the United Nations Office on Drugs and Crime, StAR. ARMA has already started to receive requests from NABU, the General Prosecutors Office, National Police, and the State Security Service of Ukraine to conduct operational searches. Serious concerns are related to legislative amendments to the law on corruption prevention, adopted by the Rada in 23 March 2017. The amendments extended the scope of declarants to include among others independent experts and anti-corruption NGOs involved in international assistance projects on anti-corruption to submit electronic asset declarations in 2018. As a result of wide spread criticism, a draft law removing these reporting obligations has been registered in the Rada early July but its adoption is still pending. The recent increase of criminal investigation and physical attacks against civil society activists and journalists exposing corrupt practices is also worrying.

III. ANNEX - STATISTICS III.1 IRREGULAR MIGRATION Third country nationals refused entry

at the external borders Schengen+ area 2015 2016 Albania 15,835 30,305 Ukraine 23,795 22,495 Serbia 7,850 7,910 Bosnia and Herzegovina 5,185 5,150 Moldova 2,725 4,660 Former Yugoslav Republic of Macedonia 2,555 2,495 Georgia 1,330 810 Montenegro 385 335 Third country nationals found

to be illegally present Schengen+ area 2015 2016 Albania 47,755 33,445 Ukraine 23,480 29,565 Serbia 13,785 11,180 Moldova 4,050 7,660 Georgia 5,405 5,240 Former Yugoslav Republic of Macedonia 5,265 4,595 Bosnia and Herzegovina 3,585 3,645 Montenegro 770 570



III.2 ASYLUM