EUROPEAN COMMISSION Strasbourg, 19.10.2021 SWD(2021) 294 final COMMISSION STAFF WORKING DOCUMENT North Macedonia 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) 288 final} - {SWD(2021) 289 final} - {SWD(2021) 290 final} - {SWD(2021) 291 final} - {SWD(2021) 292 final} - {SWD(2021) 293 final}



Table of Contents 1. Introduction 1.1. Context 1.2. Summary of the report 2.Cluster 1: The Fundamentals of the Accession Process 2.1. Functioning of democratic institutions and Public Administration Reform 2.1.1. Democracy 2.1.2 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 development and competitiveness 2.3.1. The existence of a functioning market economy 2.3.2. The capacity to cope with competitive pressure and market forces within the Union 2.4. Public Procurement, Statistics; Financial control Chapter 5: Public procurement Chapter 18: Statistics Chapter 32: Financial control 3. Good neighbourly relations and regional cooperation

4.Ability to assume the obligations of membership Cluster 2: Internal Market Chapter 1: Free movement of goods Chapter 2: Freedom of movement for workers Chapter 3: Right of establishment and freedom to provide services Chapter 4: Free movement of capital Chapter 6: Company law Chapter 7: Intellectual property law Chapter 8: Competition policy Chapter 9: Financial services Chapter 28: Consumer and health protection Cluster 3: Competitiveness and inclusive growth Chapter 10: 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 policy Chapter 15: Energy Chapter 21: Trans-European networks Chapter 27: Environment and climate change Cluster 5: Resources, agriculture and cohesion Chapter 11: Agriculture and rural development Chapter 12: Food safety, veterinary and phytosanitary policy Chapter 13: Fisheries Chapter 22: Regional policy and coordination of structural instruments Chapter 33: Financial and budgetary provisions Cluster 6: External Relations Chapter 30: External relations Chapter 31: Foreign, security and defence policy Annex I – Relations between the EU and North Macedonia



1. Introduction 1.1. Context The Stabilisation and Association Agreement (SAA) between the Republic of North Macedonia and the European Union entered into force in April 2004 and continues to be implemented. Since 2009, the Commission has continuously recommended to the Council to open accession negotiations with North Macedonia, a candidate country since 2005. Based on the progress achieved and the conditions having been met, the European Council endorsed the Council’s decision to open accession negotiations with North Macedonia in March 2020 . Overall, the country has continued to maintain a steady and determined pace in advancing EU reforms, focusing on the fundamentals. Pending bilateral issues between Bulgaria and North Macedonia need to be resolved as a matter of priority. The authorities in North Macedonia continued to demonstrate publicly their commitment to advance on their EU path. The delays in the official launch of accession negotiations are having a negative impact on the credibility of the EU.

The COVID-19 pandemic continued throughout the reporting period. By early October 2021, North Macedonia had recorded in total around 193,000 cases and about 6,750 deaths related to the pandemic. Around 35% of the population were fully vaccinated in early October. The authorities have taken measures to protect public health and mitigate the socio-economic impact of the COVID-19 crisis. The EU has provided substantial support to North Macedonia since the pandemic began and mobilised a package of EUR 66 million of non-repayable financial aid for immediate needs, emergency medical equipment and socio-economic response to the pandemic. This was complemented by EUR 160 million in macro-financial assistance for North Macedonia. The EU, as Team Europe has also supported the country’s vaccination campaign by providing almost 350,000 doses by early October as either donations or re-sales covered by an EU grant. 1.2. Summary of the report On the political criteria, North Macedonia continued its efforts to strengthen democracy and the rule of law, including by activating existing checks and balances and through an outreach on key policy and legislative issues. The country has shown its commitment to deliver in the key areas of the fundamentals, including through the ‘Europe at Home’ agenda and the ‘Action Plan 21’ on the fight against corruption. The first round of the local elections took place on 17 October. The Office for Democratic Institutions and Human Rights of the Organisation for Security and Cooperation in Europe (OSCE/ODIHR) has deployed an Election Observation Mission. Limited progress was made in addressing the outstanding recommendations from OSCE/ODIHR and the Venice Commission over the reporting period. The comprehensive review of electoral legislation and the adoption of the relevant laws still need to be finalised in a timely and inclusive manner. Opposition parties remained actively engaged in Parliament and on some occasions supported key EU related laws. Parliamentary work was nevertheless impeded by political polarisation, compounded by COVID-19, which on occasion affected its ordinary functions. Efforts are needed to strengthen the role of Parliament as a forum for constructive political dialogue, particularly on the EU reform agenda. Parliament continued to exercise its legislative functions. Great care should be taken in the use of fast track procedures, which need to be limited to ensure effective scrutiny and consultation of legislation. Parliament continued to exercise proper oversight of the executive. The proposals for internal reform of Parliament, agreed during the third round of the ‘Jean Monnet Dialogue’ in early 2020, have yet to be put in place. The criminal responsibility for those who orchestrated or committed violence in the attack on Parliament on 27 April 2017 continued to be established, including through first instance verdicts. The government needs to keep up the reform momentum and focus on the implementation of the existing legal framework rather than launching sporadic new initiatives. Timely and substantial implementation of the reform agenda requires sustained support from society as a whole. Inter-ethnic relations remained stable and the Ohrid Framework Agreement continued to be implemented. Civil society organisations continued to be active and have an important role to play in the reform process. Further efforts are needed to ensure a more timely, meaningful and transparent consultation process with civil society. In the context of the challenges faced in recovering from the COVID-19 crisis, governmental and non-governmental actors are expected to build long-term partnerships and to strengthen existing cooperation. The reform of the intelligence sector, resulting in new structures being established and a legal framework being developed, has almost been completed. The country needs to strengthen the capacity for parliamentary oversight over the intelligence services. North Macedonia is moderately prepared in the reform of its public administration. Some progress was made in finalising the horizontal functional review of the state administration. It is important that the horizontal functional review is adopted by the government. Recommendations were made for the new organisation of state administrative bodies with improved lines of accountability. These need to feed into the relevant legislation, which should be adopted and implemented. North Macedonia is currently reviewing the legislative framework on human resources management through the revision of the Law on Administrative Servants and the Law on Public Service Employees, and is introducing a new Law on Top Management Service. The new framework should improve the management of human resources across the administration and will contribute to ensuring better respect for merit-based recruitments, promotions and dismissals, including at senior management level. The monitoring reports on implementation of the Public Administration Reform Strategy and the Public Financial Management Reform Programme were presented. The State Commission for the Prevention of Corruption (SCPC) continued to address cases of alleged nepotism, cronyism and political influence in the process of recruitment of public sector employees and in the process of appointment of members of supervisory and management boards. Its findings and recommendations need to be systematically followed-up by the concerned institutions. The judicial system of North Macedonia has some level of preparation/ is moderately prepared. Some progress was achieved regarding the implementation of the judicial reform strategy, thereby further addressing the recommendations from the Venice Commission and the Senior Experts’ Group on systemic Rule of Law issues. Efforts are still needed to ensure systematic implementation of the updated action plan on the judicial reform strategy and the human resources strategies for the judiciary and prosecution. Judicial institutions continue applying the new rules for the appointment, promotion, discipline and dismissal of judges and prosecutors. Most of the implementing legislation of the revised Law on the Council of Public Prosecutors was adopted. It is important to continue implementing the legal framework and strategic plans related to the reform of the Judicial Council and the Council of Public Prosecutors. A new draft Law on the Academy for Judges and Prosecutors should maintain the Academy as the sole entry point to the judiciary and prosecution and should secure a fair and transparent access to these professions North Macedonia has some level of preparation / is moderately prepared in the prevention and fight against corruption. Some progress has been made, as the country continued to consolidate its track record on investigating, prosecuting and trying several corruption cases, including at high level, and strengthened its institutional framework, especially the State Commission for Prevention of Corruption (SCPC) and the Prosecutor for Organised Crime and Corruption (OCCPO). In April 2021, Parliament adopted the 2021-2025 National Strategy for the Prevention of Corruption and Conflict of Interest and related Action Plan, consolidating the country’s commitment to prevent corruption and sanction corrupt behaviour. The cases initiated by the former Special Prosecutor’s Office (SPO) continued to move forward, thereby establishing accountability for the illegal wiretaps. A number of cases were subject to first instance rulings and new cases were opened on the basis of investigative material from the former Special Prosecutor’s Office. The State Commission for the Prevention of Corruption has been pro-active in preventing corruption and opened several cases, including against high-level officials. The State Commission was allocated new premises. Nonetheless, the efforts to improve its functioning should continue, especially by allocating extra funding for the recruitment of expert staff. The country has some level of preparation in the fight against organised crime. The legislative framework is broadly in line with European standards and efforts to implement strategies against organised crime must continue. Some progress was made at the operational level, but more needs to be done to improve the effectiveness of law enforcement in fighting certain forms of crime, such as money laundering and financial crimes. Coordination remains crucial for all stakeholders involved in combatting organised crime. Some progress has been made in the fight against terrorism and preventing/countering violent extremism in line with the objectives set out in the Joint Action Plan on counter-terrorism for the Western Balkans and the bilateral implementing arrangement. A national plan for reintegration, resocialisation and rehabilitation of foreign fighters returnees and members of their families was adopted in June 2020, in order to implement the identified priorities for preventing violent extremism and radicalisation. The legal framework on the protection of fundamental rights is largely in line with European standards. The Law on the Prevention and Protection against Discrimination and the Commission for the Prevention and Protection against Discrimination are in place. The deinstitutionalisation process made real progress and almost all of the children concerned were resettled to community-based care. The Ministry of Labour and Social Policy is investing in community services, including supporting victims of gender-based violence. Important progress was achieved with the adoption of the Law on Prevention and Protection from Violence against Women and Domestic Violence, with cross-party support. An improvement is noted in terms of gender mainstreaming and women’s rights, although women are among the categories most severely affected by the pandemic. Recommendations of European and international human rights bodies, particularly regarding the treatment of detained and convicted persons must be fully implemented without delay. It is also important for the country to enhance the implementation of the legislation on hate speech and of the national action plan for the implementation of the Istanbul Convention’s provisions. The civilian external oversight mechanism over the police is not fully functional, and the absence of genuinely independent investigators impedes efforts to address police impunity and effective prosecution. The country should continue to improve the situation in prisons and to further increase alternatives to detention. North Macedonia has achieved some level of preparation/ is moderately prepared in the area of freedom of expression. Overall, there was limited progress during the reporting period. The general context is favourable to media freedom and allows for critical media reporting although there have been increased tensions during the COVID-19 crisis. Self-regulation efforts need to be resumed and followed by concrete results for the advancement in professional standards of journalism. Greater transparency should be ensured regarding media advertising by state institutions and political parties. The authorities need to increase their efforts to reform the public service broadcaster, ensuring its independence and financial sustainability. The public service broadcaster adopted a five-year development strategy but the reform process is hampered by delays in appointing the members in its managing council and of the council of the Agency for Audio and Audio-visual Media Services. The COVID-19 crisis had a strong economic impact on the media sector, especially on the regional and local actors. Media outlets were included in the relief package, but the labour rights of journalists still need to be addressed. On regional cooperation, the country maintained its good relations with other enlargement countries and maintained its engagement in regional initiatives. Existing bilateral agreements, including the Prespa Agreement between North Macedonia and Greece as well as the Treaty of Friendship, Good Neighbourliness and Cooperation with Bulgaria, need to be implemented in good faith by all parties. On the economic criteria, North Macedonia has made some progress and is at a good level of preparation in developing a functioning market economy. Severely hit by the pandemic, the economy slipped into a recession in 2020. A gradual recovery set in as of spring 2021. The government implemented a strong fiscal response to mitigate the crisis impact on households and firms. The fiscal deficit rose to 8.2 % of GDP in 2020 while the public debt level rose sharply to 60.2 % of GDP, as additional financing needs had to be covered. Capital expenditure was cut in a budget revision to create space for crisis-related transfer payments, yet it was still heavily under-executed. The authorities took some additional measures to improve fiscal transparency, although a fully operational state aid registry is yet to be developed. There has been little progress made in improving revenue mobilisation and collection, as well as public investment management, including through a stronger framework for public-private partnerships. The new organic budget law, which is expected to significantly improve fiscal governance, is yet to be adopted by Parliament, and its implementation is delayed. Bolstered by regulatory easing, the financial sector remained strong and lending to the private sector constant. The business environment continued to be impeded by the large size of the informal economy. North Macedonia has made some progress in addressing last year’s recommendations and is moderately prepared to cope with competitive pressure and market forces within the Union. Integration with the EU in trade and investment remained entrenched also during the pandemic. The level and structure of trade and manufacturing output were affected by lockdowns and supply chain disruptions, domestically and in trade partner countries. The structure of the industry is continuously improving. The deterioration in labour productivity and price competitiveness in 2020 reflects to a large degree the economic impact of the pandemic and the government’s job-retention measures. Vocational Educational Training (VET) curricula has improved. Still, skills shortages, reflecting shortcomings in education curricula, capital investment gaps, and limited integration of domestic firms in global supply chains are restricting potential growth. Digitisation of the economy is progressing. As regards its ability to assume the obligations of membership, North Macedonia is moderately prepared in most of the areas covered by Cluster 2 on internal market, namely the free movement of goods, services and capital, intellectual property and competition policy. Meanwhile, the country has a good level of preparation on company law, although it is still at an early stage on freedom of movement for workers. In the reporting period, North Macedonia made limited or no progress in all areas, except on free movement of capital, company law and intellectual property where it made some progress. Overall, more progress is needed in the coming year in the areas covered by this cluster as it is relevant for North Macedonia’s preparations to meet the requirements of the EU’s internal market and for the development of the Common Regional Market. Overall, North Macedonia is moderately prepared in most of the areas covered by Cluster 3 on competitiveness and inclusive growth, including in information society and media, taxation, enterprise and industrial policy, education and culture, and economic and monetary policy. However, additional efforts are needed to bring these areas to a higher degree of preparedness. It has a good level of preparation in the areas of science and research and customs union. Some progress was made in most of these areas. More efforts are needed, particularly in areas where limited progress was made, such as information society and media, science and research as well as education and culture.

On Cluster 4 on the Green Agenda and sustainable connectivity, North Macedonia has a good level of preparation in trans-European networks. It is moderately prepared on transport policy and energy and as some level of preparation on environment and climate change. North Macedonia is actively participating in meetings of the Transport Community and Energy Community. It has a high level of compliance with the Energy Community Treaty, notably on electricity. As all Western Balkans, North Macedonia endorsed the Green Agenda for the Western Balkans at the Sofia Summit in December 2020. This year, some progress was made in the energy sector, notably with the progress made towards the adoption of the National Energy and Climate Plan. However, limited progress were made in transport, environment and climate change. The country needs to substantially step-up its ambition to properly implement the acquis of chapters 14 and 27. These efforts will increase the efficiency of the Economic and Investment Plan and speed up the implementation of the Green Agenda for the Western Balkans. Administrative capacities need to be strengthened in all sectors. In addition, strategies, action plans and legislation in these sectors need to be coherent with the principles and priorities of the Green Agenda and to ensure consistency between relevant sectoral documents. North Macedonia is moderately prepared in most areas of Cluster 5 on resources, agriculture and cohesion. It has a good level of preparation in the area of food safety, veterinary and phytosanitary policy and is at an early stage of preparation in financial and budgetary provisions. Over the reporting period, good progress was made in food safety, veterinary and phytosanitary policy and some progress was made in agriculture and rural development. However, further efforts are needed, in particular in areas where limited or no progress was made such as fisheries, regional policy and the coordination of structural instruments as well as financial and budgetary provisions. North Macedonia is moderately prepared in the areas covered by Cluster 6 on external relations and has made some progress during the reporting period. In its common commercial policy, North Macedonia continued its efforts to coordinate its positions and closely align its commercial policies with those of the EU, including within the WTO. However, no progress was made in development policy and humanitarian aid. North Macedonia is moderately prepared in the area of common foreign, security and defence policy. The country has increased its alignment with the EU common foreign and security policy to 96% and its participation in EU crisis management missions and operations. North Macedonia remains on one of the main transit routes for migration movement. The country continues to play a constructive role in the management of mixed migration flows. It cooperates effectively with neighbouring countries and EU Member States, including with guest officers from the EU Member States on the ground. Efforts to ensure basic living conditions and services for all migrants staying in the country continued. The registration of migrants and adequate protection-sensitive profiling improved but needs to be carried out in a more systematic manner. The Status Agreement with the EU, that would allow the deployment of standing corps of the European Border and Coast Guard Agency (Frontex) in the country, has not yet been signed due to a bilateral issue. The country should take a more methodical approach to fighting the smuggling of migrants. 2. Cluster 1: The Fundamentals of the Accession Process 2.1. Functioning of democratic institutions and Public Administration Reform 2.1.1. Democracy North Macedonia continued its efforts to strengthen democracy and the rule of law, including by activating existing checks and balances and through an outreach on key policy and legislative issues. Opposition parties remained actively engaged in Parliament and on some occasions supported key EU related laws. North Macedonia has shown its commitment to deliver in the key areas of the fundamentals, including through the ‘Europe at Home’ agenda and the ‘Action Plan 21’ on the fight against corruption. Measures were taken to protect public health and contain the COVID-19 pandemic. Elections The first round of the local elections took place on 17 October 2021. Overall, the legal framework remains conducive to the organisation of democratic elections. Limited progress was made in addressing the outstanding recommendations from the OSCE/ODIHR and the Venice Commission over the reporting period. The Electoral Code was amended during the electoral process in September 2021. As mentioned in the previous reports, the comprehensive review of the electoral legislation and the adoption of the relevant laws needs to be finalised in a timely, inclusive and transparent manner. The state institutions and bodies, notably the Ministry of the Interior and the State Election Commission, should make further efforts to systematically improve the accuracy of the voters’ lists. The first round of the local elections took place on 17 October. In municipalities where no mayoral candidate receives the required absolute majority, the second round will be organised on 31 October 2021 between the two candidates with the most votes. OSCE/ODIHR has deployed an Election Observation Mission. Overall, preparations for the local elections have been carried out in line with the calendar of the State Election Commission (SEC). Some parties have announced cooperation agreements between them, including across ethnic lines. Among a total of 299 mayoral candidates, 8% are women. Women comprise some 45% of all councillor candidates and head 111 candidate lists (19%). The legal framework supports the conduct of democratic elections. The working group on electoral reform met several times, but it has not yet finalised the comprehensive legal changes in line with OSCE/ODIHR recommendations. Its work was conducted without meaningful participation from political parties. The electoral code was amended twice in 2021. In April 2021, amendments were adopted to supplement provisions on biometric voter identification. In September 2021, Parliament amended the Electoral Code with a large majority. Some amendments aim to address previous recommendations of OSCE/ODIHR, including on permanent composition and tenure of the SEC, safeguards against the misuse of public resources, campaigning in the media, deadlines for the submission and review of complaints. However, last minute changes in legislation led to uncertainties. The reform of electoral legislation should continue in order to address the remaining recommendations of OSCE/ODIHR and the Venice Commission, including the harmonisation of the Electoral Code internally and with other relevant laws. This comprehensive process needs to be completed well in advance of the next elections, in a broad consultation process. Parliament appointed unanimously the members of the State Election Commission (SEC). Its composition and tenure of mandate were addressed by the latest amendments to the Electoral Code. On the voters’ list, further efforts are needed to address structural issues related to the voter register, such as the lack of standardisation of address data, harmonisation and interoperability across institutions. Parliament The work of Parliament was impeded by political polarisation compounded by COVID-19, which on occasions affected its ordinary functions. Efforts are needed to strengthen its role as a forum for constructive political dialogue, particularly on the EU reform agenda. Parliament continued to exercise its legislative functions, including through the work of parliamentary committees. Great care should be taken in the use of fast-track procedures, which need to be limited to ensure effective scrutiny and consultation of legislation. Parliament continued to exercise proper oversight of the executive. The proposals for the internal reform of Parliament agreed during the third round of the ‘Jean Monnet Dialogue’ in early 2020 have yet to be put in place. Criminal responsibility for those who orchestrated or committed violence in the attack on Parliament on 27 April 2017 continued to be established, including with first instance verdicts. Steps were taken by some political parties to enhance their internal political process, but further efforts are needed, including by increasing the transparency of the funding of political parties. Parliament has remained the main institution for political dialogue, with the participation of all parliamentary parties. Implementation of Parliament’s 2018-2022 strategic plan continued. However, its work was challenged by the polarisation between the ruling parties and the opposition on some issues, the thin ruling majority as well as frequent absences of the Members of Parliament (MPs) infected by COVID-19 or in self-isolation. A lack of quorum prevented the adoption of amendments to the rules of procedure to allow MPs affected by COVID-19 to work online. The National Council for EU Integration, led by the opposition, started working in June 2021 and has a responsibility to ensure a broad consensus over EU related reforms. In July 2021, Parliament adopted with cross-party support a Resolution, submitted by the main opposition party. Parliament carried out a transparent selection for members of the Commission for Protection and Prevention against Discrimination and elected unanimously the new members of the State Election Commission. The selection of three new judges of the Constitutional Court, of five Deputy Ombudspersons and of a member of the Judicial Council needs to proceed in a timely and inclusive manner. Parliament continued to face challenges in better planning and coordinating its work to ensure a more predictable law-making process. The adoption of some laws such as the package of economic measures designed to address the consequences of COVID-19 was delayed. To prevent filibustering, the government proposed numerous draft laws for adoption in shortened procedure, which reduced the time for a substantial consultation process with the stakeholders. The opposition criticised the use of the ‘EU flag’ procedure, i.e. a fast track procedure aiming at aligning legislation with the EU acquis. A total of six public debates were held. Parliament adopted 159 laws, out of which 67 in regular legislative procedure, 79 in shortened procedure and 13 ratifications. The number of laws adopted in fast track procedures remains a concern – see 2.1.2. Public Administration Reform. These need to be significantly reduced as they prevent proper participation of stakeholders on the legislative processes and democratic debates. Parliament exercised its oversight of the executive through sessions for parliamentary questions. Over the reporting period, four motions of no confidence were introduced against four Deputy Prime Ministers and Ministers, of which two were rejected and two are pending. The plenary and relevant committees debated the annual reports of regulatory, controlling and supervisory bodies, including those submitted after the dissolution of Parliament in February 2020. The working group on the ‘Jean Monnet Dialogue’, chaired by the Speaker, held two meetings in spring 2021 to discuss the implementation of the commitments made during the third round of the ‘Jean Monnet Dialogue’ in early 2020, notably amending the rules of procedure. Little progress was made and these commitments have yet to be put in place. Under the new composition of Parliament, the number of women Members of Parliament (47 out of 120, i.e. 39%) decreased by one compared to the previous legislature. The number of MPs from the non-majority communities is the highest ever (42, i.e. 35%). The Committee on Inter-Ethnic Relations held regular sessions.

As regards the protection of human rights and fundamental freedoms, Parliament adopted with cross-party support the Law on the prevention and protection against discrimination, the Law on prevention and protection from violence against Women and Domestic Violence and amendments to the Law on the rights of the child. The Club of Women MPs, and inter party parliamentary groups on youth, LGBTIQ, people with disabilities and Roma started their work. The accountability for the violent attacks in Parliament in April 2017 continued to be established. In July 2021, the first instance Criminal Court sentenced to imprisonment the former Speaker, two former Ministers as well as the former Director of the Bureau of Security and Counterintelligence (UBK) for organising the violent attacks on Parliament. Work should continue on improving the efficiency of the democratic system, including transparency on the funding of political parties, along the lines of the recommendations of the Group of States against Corruption (GRECO) – see Chapter 23 – Judicial and fundamental rights. Political parties should also improve their internal democratic processes. SDSM held the first-ever direct elections for a party leader. Governance The government worked on the EU reform agenda and on addressing the consequences of the COVID-19 pandemic. It needs to keep up the reform momentum and focus on the implementing the existing legal framework rather than launching sporadic new initiatives. Timely and substantial implementation of the reform agenda requires sustained support from society as a whole. Inter-ethnic relations remained stable. The Ohrid Framework Agreement, the 20th anniversary of which was celebrated in August 2021, continued to be implemented. In March 2021, all 62 coalition Members of Parliament confirmed their support for the government in a vote of confidence initiated by the Prime Minister. The government adopted the reform plan ‘Europe at Home’, aiming at streamlining reforms under the fundamentals cluster and based on the revised enlargement methodology, as well as the ‘Action 21’, an action plan on the fight against corruption. The National Plan for Adoption of the Acquis (2021-2025) was adopted in June 2021. In light of the COVID-19 situation, the Prime Minister and the leader of the biggest opposition party agreed to postpone the census from April to September 2021 and the local elections from the first to the second half of October 2021. Women constitute 20% of the Ministers, 7% of the Deputy Ministers and 25% of the State Secretaries. Inter-ethnic relations remain stable overall. Further commitment is needed, both at the local and the national level, to increase trust between ethnic communities. All political actors should further engage in a constructive and open dialogue with relevant stakeholders to meet the obligations arising from the 2001 Ohrid Framework Agreement, including by preserving the multi-ethnic character of the society. In August 2021, the country marked the 20th anniversary of the Ohrid Framework Agreement. The reform process of the system of local self-government launched in 2019 has stalled. The government should show active leadership, promoting coordination and a systemic dialogue between ministries and local self-government. Efforts to improve municipal finances produced mixed results. Revenue collected at local level increased as a percentage of total revenue of municipalities and transparency of local budgets improved. Ad hoc financial transfers from the central to the local level provide short term relief but do not contribute to build a sustainable financial framework based on predictable resources. More efforts are needed to strengthen public finance management capacities and internal audit at the local level. Civil society Civil society organisations (CSOs) continue to operate, overall, in an enabling environment. They continued to be active and have an important role to play in the reform process. Further efforts are needed to ensure a more a timely, meaningful and transparent consultation process with civil society. In the context of the challenges faced in recovering from the COVID-19 crisis, governmental and non-governmental actors are expected to build long-term partnerships and to strengthen existing cooperation. The financial framework under which CSOs operate still needs to be improved. Civil society is a crucial component of any democratic system and continues to be recognised as such by the state institutions. Civil society organisations continued to play the role of watchdog and participated in the decision-making process on key laws, including the laws on prevention and protection against discrimination and on prevention and protection against violence against women and domestic violence. Civil society significantly contributed to ensuring the protection of human rights and fundamental freedoms, especially with respect to assistance provided to the most vulnerable categories. Civil society engaged on a regular basis with public institutions and bodies such as the Council for Cooperation between the Government and Civil Society and the Council for Open Government Partnership. Continued efforts are needed to further strengthen the existing structured dialogue, coordinated by the government unit for cooperation with NGOs. Mechanisms for dialogue such as the inter-party parliamentary groups and the sectoral working groups need to be fully exploited. A systematic follow-up of exchanges with civil society is needed. Actors from the entire political spectrum are encouraged to enhance cooperation with civil society, based on a timely, meaningful and transparent consultation process. Similarly, local authorities are encouraged to further involve grassroots civil society organisations in policy and decision-making processes. The COVID-19 pandemic had an economic impact on civil society actors. The ongoing reform of the state funding for the civil society organisations is expected to further regulate the current legal framework and to ensure that sufficient means are put at the disposal of the sector. The process should be conducted in a transparent and inclusive manner. In order to maintain the positive trend, the government should finalise the 2021-2023 Strategy for Cooperation with Civil Society, together with a realistic action plan to implement the measures programmed in the Strategy. All relevant institutions should ensure the transparent and timely implementation of the objectives included in the Strategy. Civilian oversight of the security/intelligence sector The reform of the intelligence sector, resulting in new structures being established and a legal framework being developed, has almost been completed.

However, the National Security Agency (NSA) is still located inside the premises of the Ministry of Interior. The Operational Technical Agency (OTA) continued to acquire the necessary tools to fulfil its role. However, some authorised bodies have yet to be connected to the OTA. In January 2021, the Law on the Intelligence Agency was revised to harmonise its legal framework with the country’s new security system arrangements. It is essential that all these structures act according to the relevant laws and in an independent manner. Parliamentary oversight of the intelligence services was exercised after the establishment of the new Parliament. The relevant committees performed inspections in the institutions from the security sector. The procedure for the selection of technical experts for the Committee for Interception was completed. However, they have not been employed yet, which affected the performance of the committee’s oversight mandate. The work of the Civilian Oversight Council was impeded since the resignation of its president and deputy in 2020. There is an urgent need to provide all necessary administrative and financial resources for the Council to be fully functional. 2.1.2 Public administration reform North Macedonia is moderately prepared in the reform of its public administration. Some progress was made in finalising the horizontal functional review of the state administration. Recommendations were made for the new organisation of state administrative bodies with improved lines of accountability. These need to feed into the relevant legislation, which should be adopted and implemented. North Macedonia is currently reviewing the legislative framework on human resources management through the revision of the Law on Administrative Servants and the Law on Public Service Employees, and is introducing a new Law on Top Management Service. The new framework should improve the management of human resources across the administration and will contribute to ensuring better respect for merit-based recruitments, promotions and dismissals, including at senior management level. The monitoring reports on the implementation of the Public Administration Reform Strategy and the Public Financial Management Reform Programme were presented. The State Commission for the Prevention of Corruption (SCPC) continued to address cases of alleged nepotism, cronyism and political influence in the process of recruitment of public sector employees and in the process of appointment of members of supervisory and management boards. Its findings and recommendations need to be systematically followed-up by the concerned institutions. Most of last year’s recommendations have been partially implemented. In the coming period, the country should, in particular: ®adopt and implement the revised Law on Administrative Servants, the Law on Public Service Employees and the Law on Top Management Service; ®adopt and implement the Law on State Organisation and other related laws in line with the recommendations for the new organisation of state administrative bodies ; ®ensure full implementation of the Law on General Administrative Procedures. Strategic framework for public administration reform The implementation, monitoring and reporting of the 2018-2022 public administration reform strategy and the 2018-2021 public financial management reform programme continued. The high-level Public Administration Reform Council and the Public Financial Management Council ensured both political support for and supervision of reforms. To drive the process at the technical level, a properly staffed public administration sector is necessary within the Ministry of Information Society and Administration. The Ministry of Finance continues to be fully involved in the reform coordination efforts. Overall, managerial accountability in public institutions requires further strengthening (see Chapter 32 – Financial Control). The state budget includes a separate programme for public administration reform, but full implementation of both strategies continues to depend primarily on donor funding. Policy development and coordination The legal framework and institutional structures for a coherent policy-making system are in place. Efforts are ongoing to clarify the division of responsibilities between policy-making institutions to avoid overlaps, set out clear reporting lines and ensure their proper functioning. Medium-term budgetary planning and fiscal policies are in line with the government’s strategic priorities. The central coordination and quality control role of the General Secretariat was slightly improved, but remains insufficient. The coordination system for EU integration is being revised to match the revised enlargement methodology. A new IT solution is being developed to improve the technical level quality of the EU integration coordination system for policy measures and harmonisation with EU regulations. A new IT system for donnor assistance measures was introduced. Evidence-based policy and legislative development continue to be partially ensured. Administrative data collection further improved, but the quality of data remains an issue. The state institutions need to reinforce and simplify sharing of administrative data through the interoperability system and use this data more consistently in the decision-making process. The regulatory impact assessments continued to be used formally for all laws that the government sent to Parliament in regular procedure, but not for the laws that were adopted in shortened procedure. The quality of regulatory impact assessments needs to be further improved and quality control needs to be ensured. The budgetary impact assessments are either missing or are not comprehensive. There are inter-ministerial consultations at various levels, many of which take place online due to COVID-19 restrictions. Public consultations through the dedicated national electronic consultation system allow for inclusive participation of all stakeholders, however the electronic system is not used to its full potential. The quality control and the follow-up to the public consultation process needs to improve. The number of laws adopted under shortened procedures is still high, at 42% in 2020 (see 2.1.1. Democracy). The quality of legislative drafting continues to be an issue, with frequent legislative amendments creating legal uncertainty and impeding proper implementation. The use of ‘EU flag’ needs to be coherent and linked to laws, large part of which aim at being aligned with the EU acquis (see 2.1.1 Democracy). Public scrutiny of government work is ensured through the publication of government monitoring reports and improved communication. Public financial management The national authorities continued to implement the 2018-2021 public financial management (PFM) reform programme and the 2020 action plan, with some delays occurring, including due to the COVID-19 crisis. The 2021-2023 fiscal strategy, with prospects until 2025 aiming to enhance fiscal predictability, was adopted in December 2020 together with the 2021 budget, following a limited public debate. The strategy is not yet sufficiently used as a tool in the preparation of the budgetary cycle. The government adopted the new Organic Budget Law in December, following public consultations, however it has not yet been adopted by Parliament. The new law covers a medium-term budgetary framework, improved budget classification, a fiscal council and fiscal rules. Following a Public Investment Management Assessment (PIMA), the government adopted a national action plan for the implementation of the PIMA recommendations in December 2020. A co-ordination structure has to be established involving all key institutions in order to ensure efficient implementation. The Ministry of Finance continued its efforts to improve transparency in the management of public finances. The portal ‘Open Finance’ was enhanced by providing information on transactions made by municipalities. In addition, the Ministry of Finance launched a new transparency tool on public debt. A ‘SMART’ public finance system was promoted as one of the priorities of the government. Focus was put on replacing traditional budgeting with performance budgeting and the introduction of multi-annual budgetary framework. SMART key performance indicators were defined in order to assess the achievement of objectives and implementation of results. As of October 2020, the Ministry of Finance started to publish data on the revenue and expenditure of public and state-owned companies on a quarterly basis as well as data on the execution of the local government budget. The publication of the 2021 Citizens’ Budget was delayed to February 2021. The Ministry of Finance has to invest further efforts in increasing public inclusion at every phase of budget preparation, execution and reporting. In addition, the adoption and efficient implementation of the new Organic Budget Law as well as the foreseen development of an Integrated Financial Management Information System (IFMIS) will contribute to an increase in budgetary transparency. Public service and human resources management To ensure better respect for merit-based recruitment and promotion and have in place more objective criteria for dismissal, North Macedonia is currently revising the two major public service laws on Administrative Servants and on Public Sector Employees and is introducing a new Law on Top Management Service. The contradictory rules in the Law on Internal Affairs, which allow employees to be excluded from the provisions of the Law on Administrative Servants, are still in force. Procedures for temporary or service employment contracts, with lower criteria, continue to be used frequently, bypassing the criteria set in the Law on Administrative Servants. The grounds for dismissals need to be more transparent. A number of top management positions were filled with persons in an ‘acting’ capacity for an extended duration. Many of the managers in acting positions were appointed for a full mandate in the summer 2021. The State Commission for Prevention of Corruption continued to address cases of non-merit based appointments in 2020. The Commission issued a number of recommendations for the improvement of public sector recruitment procedures to eliminate nepotism, clientelism and cronyism, including for the appointment of managers and members of supervisory and management boards. See Chapter 23 – Judiciary and fundamental rights. These recommendations are not yet embedded in the respective legislation. The cooperation of some state institutions in providing data or following up on the Commission’s recommendations in individual cases is not sufficient. The Ministry of Information Society and Administration continues to coordinate and monitor the management of human resources across the public administration. The engagement and capacity of all concerned institutions still needs to be increased to ensure that legislation is applied systematically and data is uploaded regularly in the human resources management application. Not all line institutions use the human resources management information system, whose potential could be further exploited. The remuneration system has yet to be revised to ensure more consistent levels of pay and to promote mobility. With the amendments to the law on 2021 budget execution, the amounts for salary supplements for number of institutions were increased sevenfold. This includes the 21 institutions at central level, for which some criteria for awarding salary supplements was adopted. The representation of women in the public service remains over 50%, including in middle management. Women are, however, less represented in top management positions. The equitable representation of minorities is inconsistent across the public sector and across all categories of civil servants. A special law was adopted to transfer to various institutions public employees, who were recruited years ago and continued to receive a salary without a formal assignment and without having to show up for work. As of July 2021, more than 1,200 out of 1,349 such employees were assigned with new jobs in 237 different state institutions. Some institutions are reluctant to take over these employees as they are transferred to positions which do not match the needs of these institutions. This parallel recruitment procedure affects other institutions’ independence when selecting their employees according to institutions’ needs, following the requirements for equitable representation. The principle of fair representation of men, women and ethnic groups needs to be applied across the whole public sector.

Professional development remains unsystematic. Many institutions offer specialised training to their employees. Nevertheless, there is no centralised database of all trainings offered by various institutions. Adequate regulations on integrity in the public service are in place, including through whistle-blower legislation. However, there is no data on how the integrity mechanisms are implemented in practice, nor on whether and how whistle-blowers are protected from retaliatory actions. Accountability of the administration In North Macedonia, the new Law on State Organisation, aiming at streamlining the institutional framework, eliminating overlapping competences and enhancing the administration’s efficiency, has yet to be adopted. The functional review of 139 central government institutions was completed. During the reporting period, some institutions reported to both their line ministry and to the government in parallel. Delegation of decision-making authority to middle management remains limited both at central and at local level. Continued efforts are needed to efficiently mainstream managerial accountability across the entire public administration (see Chapter 32 - Financial Control). The protection of the citizens’ right to good administration by independent institutions, especially the Ombudsman and the State Audit Office, is provided for in the law. A systematic follow-up to their recommendations needs to be ensured. The legal framework safeguards the citizens’ right to access public information. All institutions need to regularly provide and update the data on their websites. New IT tools are in testing phase and allow the Agency for Protection of Free Access to Public Information to monitor compliance with the rules on proactive disclosure of information. This reduces the grounds upon which requests for public information can be refused. The Agency’s capacity to implement the new law was somewhat improved. All accrued appeals to the Agency were resolved. The COVID-19 crisis led to delays in responding to requests for public information by many institutions. The legal framework for the citizens’ right to administrative justice is in place. In practice, the appeal procedures are still onerous, complex and lengthy, comprising several appeal layers and numerous repetitions. Most of the decisions are not based on merit but on procedural considerations. Enforcing administrative court rulings, which were themselves rarely decided on merit, continued to be delayed by the respective institutions. The legislation regulates the citizens’ right to seek compensation and the liability of public authorities in cases of wrongdoing. Service delivery to citizens and businesses The national e-portal for services is being upgraded in an attempt to make the administration more user-oriented, an encouraging development given the importance of digitalising the public administration and strengthening the provision of online services to citizens and businesses in the current COVID-19 context. State institutions must demonstrate more commitment to provide services through the national e-portal and encourage citizens to use the e-portal and the electronic register of population to their full potential. The electronic register of population will also be used to crosscheck census data. The use of electronic signatures for services to citizens and companies modestly increased. The interoperability framework improved in scope, but political will and funding are needed for it to reach its full potential. A number of basic key services, such as issuance of passports, driving licences, school certificates, registration of vehicles, incurred significant delays and caused dissatisfaction among citizens. No developments were made towards simplifying administrative procedures. The Law on General Administrative Procedures (LGAP) is still not systematically implemented across the administration despite the recurrent recommendations of the European Commission. This creates legal uncertainty for the recipients of administrative services. Many legal deadlines set in the LGAP were not respected due to the COVID-19 pandemic. The administration needs to reinforce training and awareness-raising for its employees to ensure legal certainty for citizens and businesses. 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 the respect for fundamental rights in law and in practice. The country has some level of preparation / is moderately prepared to apply the EU acquis and European standards in this area. Overall, some progress has been made, including through strengthened judicial independence and addressing instances of police impunity. The implementation of the judicial strategy continues, including the Law on the Public Prosecutor’s Office, ensuring accountability for the crimes arising from and related to the illegal wiretaps. The State Commission for the Prevention of Corruption, using its reinforced powers, continues to deliver results, including on high-level cases. Corruption is prevalent in many areas and remains an issue of concern. North Macedonia continue to meet its general obligations on fundamental rights but there are challenges in implementing the existing legislation. As regards the legal and policy framework, the new Parliament re-adopted the Law on the Prevention and Protection against Discrimination, after it had been struck down on procedural grounds by the Constitutional Court, and appointed the members of the Commission for the Prevention and Protection against Discrimination. The Ombudsman’s Office needs an increase of its budget, allowing recruitment of specialised staff, in order to better accomplish its role. It is essential to complete the appointment of members of independent and regulatory bodies based on merit. The functional independence of these bodies must be guaranteed at all times, including through the appropriate financial resources. Functioning of the judiciary The judicial system of North Macedonia has some level of preparation/ is moderately prepared. Some progress was achieved regarding the implementation of the judicial reform strategy, thereby further addressing the recommendations from the Venice Commission and the Senior Experts’ Group on systemic Rule of Law issues. Efforts are still needed to ensure systematic implementation of the updated action plan on the judicial reform strategy and the human resources strategies for the judiciary and prosecution. Judicial institutions continue applying the new rules for the appointment, promotion, discipline and dismissal of judges and prosecutors. Most of the implementing legislation of the revised Law on the Council of Public Prosecutors was adopted. It is important to continue implementing the legal framework and strategic plans related to the reform of the Judicial Council and the Council of Public Prosecutors. Any new draft Law on the Academy for Judges and Prosecutors should maintain the Academy as the sole entry point to the judiciary and prosecution and should secure a fair and transparent access to these professions In the coming year, the country should, in particular: ®step up the consistent implementation of the judicial reform strategy and the updated action plan, with a specific focus on adopting a new law on civil procedure, in line with the European standards; ®implement the human resources strategies for the judiciary and public prosecution network, use them as an indicator for projections on next recruitments; ®improve the automated court case management information system (ACCMIS) to ensure that it is fully functional and reliable. Strategic documents Implementation of the Strategy on Judicial Reform (2017-2022) has continued. The Council for Monitoring the Implementation of the Judicial Reform approved the bi-annual implementation report for 2019 and 2020. The implementation of the updated Action Plan adopted in October needs to be stepped up. The long awaited strategies for Human Resources Management in the courts and in the Public Prosecutor’s Offices were adopted in November 2020 and December 2020 respectively with relevant action plans for their implementation.

Management bodies In December 2020, Parliament elected a new member of the Judicial Council. The election of another member of the Judicial Council has been pending since July 2021. The Council elected its new president in April 2021 from among its lay members, in line with the Law on Judicial Council. The Judicial Council adopted several documents, in order to ensure its effective activity: a Strategic Plan 2020-2022; a Plan for Strategic Communication; methodologies for qualitative assessment of judges and of presidents of courts; and an Internal Plan for the assessment of the courts, judges and presidents of courts in 2021. The methodology for determining the complexity of court cases, by analysing the indicative number of cases to be addressed each month by a judge, was adopted in September 2021. The Council needs to maintain its role as a guardian of the independence and impartiality of judges, and to build on its efforts to operate in a transparent manner. In December 2020, Parliament elected two new members of the Council of Public Prosecutors. The Council adopted rules for monitoring the performance of the work of the Public Prosecutor’s Offices. The Strategic Plan 2021-2023 was adopted in August 2020. The Council should provide reasoning for its decisions, and ensure regular access of the media to its sessions. The Council received a budget allocation equivalent to EUR 320000 but still lacks the human and IT resources to perform its tasks effectively. Independence and impartiality Judicial independence is enshrined in the Constitution. The commitment to the full respect of the principle of independence of judiciary as well as increased transparency, notably in the work of the Council for Public Prosecutors, needs to continue. It is important to ensure that the judiciary is shielded from any risk or perception of undue external interference. The Association of Judges and the Judicial Media Council actively promoted strengthening transparency as one of the tools to restore public trust in the judiciary. The proceedings in the so called ‘racket case’ continue. In July 2021, the Skopje Court of Appeals rejected as unfounded the appeal of the defendant, the former Special Prosecutor, and upheld the first instance conviction verdict. Public trust in the judicial system will be enhanced by handling and finally closing the trial cases of the former Special Prosecutor’s Office (SPO). The sustainability of the former SPO’s work, in ensuring the accountability for the crimes arising from and related to the wiretaps, was enforced by the implementation of the Law on the Public Prosecutor’s Office. The provisions of the law have to be properly implemented, in order to ensure a professional and impartial prosecutorial system, more resilient to risks of external interference. The Law on Case Flow Management in the courts entered into force on February 2020. The provisions of the law regulate the automatic and random distribution of cases in the courts, through the automated court case management information system (ACCMIS). In October 2021, the Court of Appeal in Skopje upheld the first instance judgement against the former president of the Skopje Criminal Court for manipulation of ACCMIS. The alleged wrongdoings were revealed during inspections, which were suspended due to COVID-19 and resumed in 2021. Full implementation of the law depends on the decision to upgrade the current software or to develop a new one. Continued commitment is needed to ensure the system’s capacity to produce automatically reliable statistical data, in line with the recommendations and methodology of the CEPEJ, on the performance of both the judiciary and the prosecution. Accountability The Council for Judicial Ethics has met six times since February 2020. The initial training programme at the Academy for Judges and Prosecutors for 2020/21 includes 27 lectures on ethics, business culture and deontology. The Judicial Council received 140 requests to determine the responsibility of a judge/president of court in 2020. Since June 2020, the Judicial Council has dismissed seven judges including a former president of the Supreme Court. The general reason provided for the dismissals is related to unprofessional performance. The Judicial Council established its Commission tasked to prepare an Action Plan for monitoring corruption in the judiciary by determining specific target groups, methods of monitoring, indicators and timelines. In 2020, the State Commission for the Prevention of Corruption issued misdemeanour payment orders against 15 judges or presidents of courts and 10 prosecutors (from the former Special Prosecutor’s Office) for failing to submit asset declarations or reports on change of property status and interest. Professionalism and competence The Judicial Council started to apply the new methodology for professional evaluation in view of appointments and promotions. In February 2021, the Judicial Council elected the President of the Supreme Court. Since June 2020, the Judicial Council has appointed seven judges and eight Presidents of courts, and allowed 18 retired judges to perform their tasks for an additional year. In April 2021, it recruited the remaining six graduates of the Academy for Judges and Prosecutors. The Council of Public Prosecutors appointed five prosecutors each in the Higher Public Prosecutor’s Office Skopje and in the Public Prosecutor's Office for Prosecuting Organised Crime and Corruption (OCCPO), and heads of two Basic Public Prosecutor’s Offices. The Academy for Judges and Prosecutors organised 130 in-service training sessions for 2,858 professionals. Quality of justice A proposed draft Law on the Academy for Judges and Prosecutors should maintain the Academy as the sole entry point to the judiciary and prosecution, secure a fair and transparent access to these professions, and must follow the recommendations of the 2018 peer review mission on judicial training and address European Commission’s concerns about possible limited restructuring of initial training. The first ever Deputy Director of the Academy was elected in March 2021. The training of 60 students of the seventh intake started in September 2020. The selection of 97 candidates of the eighth intake is still ongoing. The Academy is an observer to the European Judicial Training Network (EJTN) and it started to be more pro-active in benefiting from the expertise of the network. The 2021 budget of the Academy saw an increase of approximately 35%. Three new employees were recruited in 2021. The Supreme Court and the four Courts of Appeal have continued their efforts to improve the consistency of judgements and to harmonise court practices. According to the European Commission for the Efficiency of Justice (CEPEJ), the implemented judicial system budget for 2020 was EUR 40 million. This amounts to EUR 19.5 per inhabitant, which is less than the Western Balkans median of EUR 37, 8. The Judicial System Budget (the budget for courts, public prosecution services and legal aid) has decreased by -8,3% since 2019. At the end of 2020 there were 493 judges, (23 per 100 000 inhabitants) 61% female judges and 187 prosecutors (nine per 100 000 inhabitants), 55% female prosecutors. Compared with 2019, there is a slight decrease in the number of judges and prosecutors for 2020. It remains essential to ensure an adequate assessment of staffing needs, notably in the prosecution services, based on timely implementation of the adopted human resources strategies for the courts and Public Prosecutors' Offices. Implementation of the IT strategy in the judiciary remains predominantly funded by donors. Initial considerations for the digitalisation of all 34 courts will require the engagement of additional IT staff, a challenging task due to uncompetitive salaries on offer for such tasks in the public sector. Permanent efforts are needed to promote the use of alternative dispute resolution including for commercial cases. In 2020, the number of mediation cases rose by 55% compared to 2019. Efficiency

Nearly all courts continued a positive trend by maintaining a clearance rate of 100%. The number of unfinished cases under the old procedural laws decreased further. The Venice Commission recommendations to re-examine the provisions of the Law on the Use of Languages related to bilingualism in judicial proceedings have not yet been addressed. Judges have yet to receive all the supplements to their salaries, while claims in the judicial administration, including for career advancement, are still pending. The overall cost and duration of enforcement procedures should be addressed at all points of the enforcement chain. In October 2020, the Association of Judges prepared a detailed protocol for the implementation of Protection Measures in Courts concerning the COVID-19 pandemic. The protocol aims to protect the health of court employees and of all citizens who exercise their rights before the court. Fight against corruption North Macedonia has some level of preparation / is moderately prepared in the prevention and fight against corruption. Some progress has been made as the country continued to consolidate its track record on investigating, prosecuting and trying several corruption cases, including at high level, and strengthened its institutional framework, especially the State Commission for Prevention of Corruption (SCPC) and the Prosecutor for Organised Crime and Corruption (OCCPO). In April 2021, Parliament adopted the 2021-2025 National Strategy for the Prevention of Corruption and Conflict of Interest and related Action Plan, consolidating the country’s commitment to prevent corruption and sanction corrupt behaviour. The cases initiated by the former Special Prosecutor’s Office (SPO) continued to move forward, thereby establishing accountability for the illegal wiretaps. A number of cases were subject to first instance rulings and new cases were opened on the basis of investigative material from the former Special Prosecutor’s Office. The State Commission for the Prevention of Corruption has been pro-active in preventing corruption and opened several cases, including against high-level officials. The State Commission was allocated new premises. Nonetheless, the efforts to improve its functioning should continue, especially by allocating extra funding for the recruitment of expert staff. In the coming year, the country should, in particular: ®continue the efforts to fight corruption by increasing the support for the relevant bodies, implementing the National Strategy for the Prevention of Corruption and Conflict of Interests and providing clear policy guidance to state institutions; ®ensure that proper resources are allocated to the Office of the Basic Public Prosecutor for Organised Crime and Corruption in order to ensure the efficient accountability for the crimes arising from and related to the wiretaps as well as for new high-profile corruption cases; ®continue to increase the track record of convictions in high-level corruption cases, followed by confiscation of criminal assets, building upon last years’ positive results. Track record Progress in investigating, prosecuting and trying corruption cases has continued, including high-level corruption cases, despite the fact that the hearings slowed down because of COVID-19. In addition, new high-level corruption cases were opened. The cases of the former Special Prosecutor’s Office continued to be tried mostly under the Public Prosecutor for Organised Crime and Corruption. So far, there have been final convictions in seven cases against 17 defendants. Trials are ongoing for most of the remaining cases, with several dozen hearings having taken place throughout the year. The statute of limitations was reached for some charges against one defendant in one case, while other cases had to restart, because of the inconsistency of the proceedings. First-instance verdicts have been issued in nine cases. The Courts issued 39 imprisonment sentences including against prominent former government officials such as a former Prime Minister, former Minister of Transport, former Minister of Interior and former Director of the Bureau of Security and Counterintelligence (UBK). Three of those found guilty remain at large. In February 2021, the Court ruled in first instance on the former Special Prosecutor’s Office ‘Monster’ and ‘Target-Fortress’ cases. In the ‘Monster case’, the court ordered life imprisonment for three defendants, who were found guilty of terrorism, and ordered prison sentences of 15 and 9 years, respectively, to two others, accused of the murder of four teenagers and a fisherman near the Smiljkovci Lake, in Skopje in 2012. In a core case brought by the former Special Prosecutor’s Office called ‘Target-Fortress’, the court found the defendants guilty of abuse of official position, conducting illegal wiretapping of over 4,200 telephone numbers of citizens and illegally destroying the equipment used for these activities in an attempt to destroy evidence. A former UBK director was sentenced to 12 years in prison, the former Head of Cabinet to six years in prison and former Minister of Interior to four years in prison. Two former police officials who are currently at large, were given 15 years in prison in absentia. A former Head of Department at the Ministry of Interior, was given three years in prison. The remaining five defendants (UBK employees) were sentenced to two year suspended prison sentences. In April 2021, the Court ruled in another case of the former Special Prosecutor’s Office called the ‘Treasury Case’ and sentenced the former director of the UBK to eight years in prison, a former head of the fifth UBK directorate, to 15 years in prison in absentia; a former chief of staff to five years in prison; the former assistant of the Minister of Interior to five years in prison. They were charged with abuse of office and causing damage to the state budget in the amount of over 862,000 euros for the procurement of electronic-communication equipment and training for its use. In July 2021, the Criminal Court froze the assets and accounts of the former Government Secretary General and extended his house detention until September 2021. The initial assessment of the fraud against the state budget is EUR 290,000. The Office of the Public Prosecutor for Prosecuting Organised Crime and Corruption, on the basis of the Special Prosecutor investigations and pre-investigations, opened one new case and filed several indictments against high officials. In 2020, the Public Prosecutor for Prosecuting Organised Crime and Corruption opened investigations into 14 cases of alleged corruption against 49 suspects (10 high profile investigations involving 55 individuals in 2019). Investigations are ongoing against 35 individuals regarding alleged abuse of official positions and against 14 individuals on alleged money laundering. Indictments were filed in ten cases against 28 individuals and one legal entity. Trials are ongoing in 36 cases against 189 individuals. 50 individuals were convicted in eight first instance judgments (first instance judgements against 7 individuals in 2019). Two individuals were convicted in two second instance judgements. In 2020, following financial investigations of the Ministry of Interior, criminal charges for corruption were brought in two cases where temporary measures regarding the disposal of immovable property were adopted. In three cases valuable assets were confiscated after the first instance judgements. The State Commission for the Prevention of Corruption (SCPC) has continued to be pro-active in preventing corruption and opened several new cases. In regard to allegations of conflict of interest, in 2020, the SCPC processed a total of 86 cases, out of which six were initiated by the SCPC itself and 80 upon the request of other parties. In 2020, a total of 149 cases were closed (40 in 2019), out of which 116 dating from 2019 and 33 from 2020. In 2021, a conflict of interest was established in eight cases. Six cases were resolved upon follow up by institutions/individuals. In seven cases, the SCPC found grounds for suspicion of violation of the provisions of the Law on the Prevention of Corruption and Conflict of Interest (LPCCI) as a result of which it submitted initiatives to determine responsibility to the competent authority. In two cases, the suspects were dismissed from their institutions. A total of 47 cases were established based on 47 requests for opinions. In regard to violations of the LPCCI provisions on conflict of interest, the SCPC issued 20 misdemeanour payment orders. The SCPC also submitted five requests to initiate misdemeanour proceedings against officials to the SCPC Misdemeanour Commission, due to non-execution of payment after issuance of payment orders. In 2020, the SCPC submitted six indications/recommendations to various institutions in cases where there was a suspicion of potential conflict of interest. As of 24 August 2021, 7,672 asset declarations are accessible on the SCPC website (7275 in 2019). On irregularities in asset declarations, in 2020, 73 misdemeanour payment orders were issued by the SCPC, out of which 60 were related to non-submission/untimely submission and 13 to failure to report an increase in property. 16 requests to initiate misdemeanour procedures were submitted to the SCPC. In regard to corruption cases, in 2020, a total of 418 cases were initiated, 12 on the own initiative of the SCPC and 406 based on reports submitted by third parties. 378 cases were resolved. Out of the cases submitted on the basis of reports, the SCPC found ground for suspicion of violation of the criminal code in two cases and submitted initiatives to the public prosecutor (2 cases in 2019). The SCPC instigated initiatives before the competent authorities to determine the responsibility of officials in 11 cases. According to the 2020 Council of Europe Group of States against Corruption (GRECO) activity report, North Macedonia implemented 52% and partially implemented 40% of the recommendations. Twelve of the implemented recommendations regarded judges, six regarded prosecutors and seven members of Parliament. According to the 2021 GRECO Compliance Report to the fifth evaluation round, four recommendations were met and nine recommendations were partially met. These concerned the introduction of integrity checks for government advisers, increased transparency of police by enhancing access to information, the conducting of a study on post-employment activities of police employees and complaints against police staff being reflected in comprehensive statistics. The adoption of a code of conduct for ‘persons entrusted with top executive functions’ from the central government was welcomed in the report. However, placing the implementation of the code of conduct in the hands of a Deputy Prime Minister was considered incompatible with GRECO practice, because the Deputy Prime Minister could at the same time investigate/sanction violations and provide confidential counselling on the code. Concerns were also raised regarding the substantial number of cases of conflict of interest and asset disclosure involving top executive functions processed by the SCPC. Most of the ten non-implemented recommendations regarded the police.

Institutional framework In 2020, the government appointed a Deputy Prime Minister responsible for anti-corruption, sustainable development and human resources. The Deputy Prime Minister is tasked with coordinating the anticorruption policies and the institutions involved in the fight against corruption. In March 2021, the government adopted an anti-corruption action plan titled ‘Action 21’ with priorities and measures related to digitalisation, the functioning of the investigation centres, the increased use of the National Interoperability Platform and amendments to anticorruption legislation. In January 2021, the Ministry of Interior also developed its own anti-corruption programme aimed at ensuring the integrity of employees, inter-institutional co-operation and fostering public trust. Preventive measures The State Commission for the Prevention of Corruption, appointed in February 2019, reinforced its capacity to verify statements of interest and assets and to initiate misdemeanour procedures. The State Commission finally received appropriate new premises. Its resources now need to be further consolidated and supplemented, in particular, through the provision of expert staff. A new Code of Ethics for members of the government and public office holders appointed by the government was adopted in 2020 and amended in 2021. Efforts continue to improve the transparency of public institutions. The new National Strategy for the Prevention of Corruption and Conflict of Interest systematises measures in public procurement and employment in the public as well as other sectors. Law enforcement The main institutions dealing with law enforcement are the Public Prosecutor's Office for Prosecuting Organised Crime and Corruption within the Public Prosecutor's Office (OCCPO) and the Department for Serious and Organised Crime within the Ministry of the Interior. The OCCPO inherited most of the former Special Prosecutor’s Office (SPO) high-profile cases and also deals with organised crime, often related to the smuggling of migrants. The OCCPO was allocated new premises, although it has not moved yet. The State Commission for the Prevention of Corruption, the State Audit Office and the other institutions with competences in fighting corruption need an appropriate allocation of resource in order to be able to pursue high-profile cases. One of these key resources is represented by additional prosecutors, their appointment being described as a matter of urgency in the new Public Prosecutor Law. Five new prosecutors were appointed in April 2021. The newly established investigative centre/judicial police in the Prosecutor’s office still needs to demonstrate its capacity to support the office by increasing its investigations. In 2020, accounts were frozen in one case, while in two cases temporary measures were adopted to prohibit the use, alienation or disposal of real estate. Three cases of alleged corruption were opened and assets, including money and luxury goods, were confiscated following a first instance verdict. Between January and March 2021, movable and immovable property, as well as shares of significant value, were frozen in one case. Legal framework The country is part of all international anti-corruption conventions, including the United Nations Convention against Corruption. The Law on the Financing of Political Parties stipulates how financial means can be provided to political parties and managed correctly. The Electoral Code sets out the rules on the financing of electoral campaigns. The State Audit Office (SAO) exercises ex-post control. In 2020, according to SAO, 13 political parties failed to submit within the legally prescribed deadline one or all of the three types of financial reports – annual accounts, annual financial reports and reports from the register of donations received for 2019. A procedure was initiated before the Ministry of Justice and a measure of suspension of payment of funds for regular annual financing was pronounced. In 2020, audits of the financial statements for the regular operation of four political parties as well as audits of the financial statements of all 15 organisers of electoral campaigns for the 2020 early parliamentary election were performed. According to a new systematisation, the SAO established a new sector with competence to audit political parties, the State Commission for Prevention of Corruption, the State Election Commission and the Agency for Audio and Audiovisual Media Services. The Law on free access to public information allows information to be obtained on the public financing of political parties. The 2008 Law on lobbying regulates lobbying activities, the registration of lobbyists and includes a supervision mechanism. A new Law on lobbying was adopted by Parliament in June 2021. The law extends the competences of the SCPC adding the responsibility to keep a register of lobbyists and lobbying organisations. The Law on the Protection of Whistle-blowers still needs to be further aligned with the EU acquis. Recommendations for harmonisation of the Law with the EU Directive 2019/1937 were provided in the framework of an EU funded project. Strategic framework The National Strategy for the Prevention of Corruption and Conflict of Interest (2021-2025) and the related Action Plan is the main reference document. The strategy was drafted in an inclusive process, involving relevant stakeholders and experts. It was adopted by Parliament in April 2021. Fundamental rights The legal framework on the protection of fundamental rights is largely in line with European standards. The Law on the Prevention and Protection against Discrimination and the Commission for the Prevention and Protection against Discrimination are in place. The deinstitutionalisation process made real progress and most of the children concerned were resettled to community-based care. The Ministry of Labour and Social Policy is investing in community services, including supporting victims of gender-based violence. Important progress was achieved, with the adoption of the Law on Prevention and Protection from Violence against Women and Domestic Violence, with cross-party support. An improvement is noted in gender mainstreaming and respect for women’s rights, although women are part among categories most severely affected by the pandemic. Recommendations of European and international human rights bodies, particularly regarding the treatment of detained and convicted persons must be fully implemented without delay. It is also important for the country to enhance the implementation of the legislation on hate speech and of the national action plan for the implementation of the Istanbul Convention’s provisions. The civilian external oversight mechanism over the police is not fully functional, and the absence of genuinely independent investigators impedes addressing police impunity and effective prosecution. The country should continue to improve the situation in prisons and to further increase alternatives to detention. In the coming year, the country should, in particular: ®implement all the provisions of the Law on the Prevention and Protection against Discrimination, and allocate the necessary resources enabling the Commission for Prevention and Protection against Discrimination to become fully functional;

®address in a prompt and more systematic manner the recommendations of international monitoring bodies, especially with regard to the rights of persons in detention/prison; promote, protect and guarantee rights of persons in a disadvantaged or marginalised situations; ®further improve the quality of community services to identify children at risk and to provide adequate support to vulnerable categories of children, especially children victims of violence, Roma children and children with disabilities. North Macedonia has ratified most international human rights instruments. In October 2020, the country informed the Committee on the Elimination of Discrimination against Women (CEDAW) of the measures to implement the recommendations contained in the Sixth Periodic Country Report. In 2020, there were 320 applications pending before the European Court for Human Rights. The ECtHR found violations of the European Convention on Human Rights in 14 cases (against nine in 2019), relating mainly to the right to a fair trial, protection of property, respect for private and family life, and the prohibition of torture. According to CEPEJ, 11 cases were considered as closed after a judgement of the ECtHR, and the execution of judgements process (against 26 in 2019). The Ombudsman Office remains the central body for the promotion and protection of human rights. The appointment of the new Ombudsman in January 2021 raised concerns due to the political affiliation of the selected candidate. Five Deputy Ombudspersons need to be appointed by Parliament. The Ombudsman’s Office issued special reports and recommendations on online education, the rights of children, persons with disabilities and those in custodian-type institutions during the COVID-19 pandemic. The budget of the Office increased by 2.3% compared to 2019 and there were no additional recruitments. Out of 2,448 complaints received in 2020, the highest number again concerned the judiciary (notably bailiffs), followed by labour relations, consumers rights, detention conditions, social protection and property rights. The institutions responded to 63% of the Ombudsman’s recommendations, which is a decrease compared to previous years. The government continued to be committed to improving the prevention of torture and ill-treatment and to have a regular dialogue with the European Committee for the Prevention of Torture (CPT) on its recommendations. The latest CPT reports were published on 11 May 2021 and on 27 July 2021. Many of the past recommendations by the Committee are outstanding and progress in their implementation remains slow. The main shortcomings of the prison system remain: the poor management and performance of staff, low staffing levels, poor quality of health-care provided to inmates, inter-prisoner violence, squalid material conditions and endemic corruption. The external oversight mechanism for the police, including the prison police, is not fully functional, as the three civil society organisations’ representatives selected in December 2019 did not join the Department of the Ombudsman's Office. Outstanding issues for the effective participation of civil society representatives must be resolved, including extension of their one-year mandate. Only two investigators were assigned to the dedicated section in the Public Prosecutors’ Office for Organised Crime and Corruption. In 2020, the Ombudsman’s civil control mechanism acted upon 21 complaints, 14 against police officers and seven against members of the prison police. It submitted a total of ten requests (eight concerning police officers and two members of the prison police) to the Public Prosecutor’s Office to initiate a procedure for determining criminal responsibility. This led to two indictments against members of the police for the criminal offences of harassment in the performance of duty and torture and other cruel, inhuman treatment or punishment. The dedicated section in the Public Prosecutors’ Office opened 80 new cases against 143 persons with police powers or members of the prison police upon suspicion of having committed criminal offences. As a result of investigations, ten indictment proposals and four criminal orders proposals were submitted, one police officer was indicted, and first-instance verdicts against ten persons (four imprisonment sentences and six suspended sentences) were issued in 2020. Cooperation between the main actors should intensify. Further awareness-raising of this mechanism, including with judges, law enforcement and legal professionals is still required to ensure a good understanding of the system. Safeguards against ill-treatment by police and regular trainings of law enforcements agents must be implemented systematically, and reported cases must be thoroughly investigated. Cooperation with civil society organisations in the fight against ill-treatment has increased with the signature of a memorandum of cooperation with the Directorate for Execution of Sanctions, in February 2020, and the Ministry of Interior in March 2021. In 2020, the Department for Internal Control and Professional Standards at the Ministry of Interior handled 65 complaints on the use of excessive physical force by police officers, out of which 27 were found to be ungrounded and 30 lacked evidence. Two submissions were partially substantiated. In six cases, charges were filed for harassment in the performance of duty and one case for torture and other cruel and inhuman or degrading treatment or punishment. The Department has submitted 30 cases to the Section responsible for the investigation and prosecution of criminal acts committed by individuals with police authority. In 2020, 39 complaints were filed by the prisoners directly with the Directorate for Execution of Sanctions, including two complaints for ill-treatment. The persistent issue of inadequate detention conditions in some prisons, police stations, social care and psychiatric facilities should be urgently addressed, in line with the recommendations of the last CPT report. The Ombudsman has reported that adequate resources were allocated for the activities of the National Preventive Mechanism against Torture and the civil control mechanism in 2020. The National Preventive Mechanism has drawn attention to important weaknesses in efforts to prevent ill-treatment, including the lack of information and access to a lawyer in police stations and the lack of adequate healthcare in prisons. The findings of its reports should be thoroughly addressed. While the opening of the Bitola prison and the Educational-Correctional Facility near Tetovo at the end of 2020 are positive steps to improve overall conditions of detention in the prison system, the inhumane detention conditions in the Idrizovo Penitentiary-Correctional Facility and in parts of other detention facilities remain. The rehabilitation of the most derelict buildings should be fast-tracked. The need for quarantine cells due to the COVID-19 pandemic puts additional pressure on some prisons, which are already overcrowded. The 2019 law on the execution of sanctions and related by-laws are not yet fully applied and have not led to an improvement in prisons’ management and supervision. Inspection of prisons should be systematised, including to tackle the recurrent issue of corruption. In 2020, one member of the prison police was dismissed after a disciplinary procedure for corruption. At the Prison Training Centre in Idrizovo, there is still no structured training programme in place for initial and continuous professional trainings, allowing for the professionalisation of the staff. The new strategy for the development of the penitentiary system 2021-2025 was adopted in July 2021 and will require funds and additional staff for proper implementation. Inter-institutional coordination within prisons and for post-penal assistance should be developed, at the same time as preparations for releasing convicted persons back into the community. Healthcare and treatment of drug addictions in prisons continues to remain an issue of serious concern. The probation system has steadily developed, including with the opening of two new probation offices and recruitment of probation officers. In 2020, 276 probation cases were recorded, an increase from 2019, most of which were for conditional release and cases of suspended sentences with protected supervision. A strategy for development of the probation services 2021-2025 was adopted in June 2021. The cooperation between the public and private sector and civil society, and interagency cooperation should continue. Coordination between probation officers, judges, public prosecutors, prison staff and other institutions before the release of a convicted person has developed and should continue, as well as awareness raising on the benefits of probation. Amendments to the legal framework regarding alternative sentences and alternative procedures have yet to be adopted to increase the application of alternative sanctions to detention, as a means to improve the resocialisation and rehabilitation of convicts and to decrease the risk of re-offending, including for juveniles. No meaningful progress has been made to address the overall lack of purposeful activities educational, recreational and vocational for sentenced and for remand prisoners. Educational and resocialisation services, as well as treatment programmes, should be implemented in all penitentiary facilities. Regarding the protection of personal data, in June 2021 Parliament ratified the Protocol CETS No 223 of the modernised Convention for the Protection of Individuals and Personal Data Protection. In August 2021, the transitional period ended by which all controllers and processors had to align data processing in accordance with the February 2020 Law on Personal Data Protection. The Personal Data Protection Agency is executing its enhanced tasks and powers created by the new law. Despite a temporary suspension in March 2020 due to the COVID-19 pandemic, the Agency conducted 235 supervisions in 2020, 45 more compared with 2019. Almost half of these supervisions (106) were conducted online and about 60% of them in the public sector. A supervision mission to the Operational Technical Agency (OTA), for interception of communications, was conducted and recommendations provided. Additionally, the Agency published a report on processing of personal data by municipalities. In 2020, the Agency received 418 complaints, of which 65% were related to allegations of violation of personal data protection rights on social networks. The Agency received eight notifications and performed three supervisions in reaction to a reported data breach, a novelty in the new Law on Personal Data Protection. The Agency acted upon four cases of misdemeanour concerning breach of data protection laws, which resulted in two misdemeanour fines. Training of personal data controllers and processors is ongoing. The Agency issued 15 opinions and 27 recommendations to other institutions on harmonising sectoral legislation with the Law on Personal Data Protection. Despite some progress, these recommendations have not been fully implemented and not all sectoral laws and by-laws regulating personal data processing have been submitted to the Agency before adoption. The Agency overall functioning depends largely on the Ministry of Finance (MoF) and the Ministry of Information Society and Administration (MISA). For staff recruitment the Agency needs the approval of the MoF, while for promotion of staff and revision of the organisational chart it needs the approval of the MISA. This undermines, to a certain extent, the Agency’s ability to perform effectively and fully independently. Freedom of thought, conscience and religion is guaranteed in law and in practice, and discrimination on grounds of religion prohibited. Coordinated by the Commission for Relations with Religious Communities and Groups, the religious leaders jointly agreed to support the government in combating the spread of COVID-19, and to dissuade people from mass gatherings during the religious celebrations. The recently elected new head of the Islamic Religious Community played a positive role in improving inter-religious dialogue in the country. ----------------------------------------------------------------------------------------------------------------- Freedom of expression North Macedonia has achieved some level of preparation/ is moderately prepared in the area of freedom of expression. Overall, there was limited progress during the reporting period. The general context is favourable to media freedom and allows for critical media reporting although there have been increased tensions during the COVID-19 crisis. Self-regulation efforts need to be resumed and followed by concrete results for the advancement in professional standards of journalism. Greater transparency should be ensured regarding media advertising by state institutions and political parties. The authorities need to increase their efforts to reform the public service broadcaster, ensuring its independence and financial sustainability. The public service broadcaster adopted a five-year development strategy but the reform process is hampered by delays in appointing the members of its managing council and of the council of the Agency for Audio and Audio-visual Media Services. The COVID-19 crisis had a strong economic impact on the media sector, especially on the regional and local actors. Media outlets