EN    EN  COMMISSION OF THE E UROPEAN COMMUNITIES 
Brussels, 30.3.2004 
COM(2004) 206 final 
  
Proposal for a 
COUNCIL DECISION 
on the principles, priorities and conditions contained in the European Partnership with 
Serbia and Montenegro including Kosovo as defined by the United Nations Security 
Council Resolution 1244 of 10 June 1999 
  
(presented by the Commission) 
     
{SEC(2004) 376} 
 
 2    EXPLANATORY MEMORANDUM  
The Thessaloniki European C ouncil of 19 and 20 June 2003 reit erated its determination to 
fully and effectively support the European pers pective of the Western Balkan countries and 
stated that “the Western Balkans countries will become an integral part  of the EU, once they 
meet the established criteria”. It endorsed the Council’s Conclusions of 16 June 2003 on the Western Balkans including the annex “The The ssaloniki Agenda for the Western Balkans: 
moving towards European integration”, which aims  at further intensifying relations between 
the European Union and the Western Balkans, building also on practices used in the enlargement process, inter a lia through the introduction of European Partnerships. The 
Commission has been invited to submit the first set of European Partne rships to the Council 
for approval with the next Annual Reports on th e Stabilisation and Association process (SAp) 
due end of March 2004.  
The European Partnership for Serbia and Mo ntenegro including Kosovo as defined by the 
United Nations Security Council Resolution 124 4 is based on the provisions of Regulation 
(EC) No. XXX/YY. It lists short- and medium term priorities fo r the preparations of Serbia 
and Montenegro including Kosovo as define d by the United Nations Security Council 
Resolution 1244 for further integration with  the European Union identified in the 
Commission’s 2004 Annual Reports and serves as  a checklist against which to measure 
progress. The European Partnership for Serbia  and Montenegro includi ng Kosovo as defined 
by the United Nations Security Council Reso lution 1244 reflects the current stage of 
preparation of the country and is tailored to its needs in full compliance with United Nations 
Security Council Resolution 1244. Serbia and Montenegro incl uding Kosovo as defined by 
the United Nations Security Council Resolution 1244 is expected to respond to the European 
Partnership by preparing plans wi th a timetable and details of how it intends to address the 
European Partnership’s priori ties. The progress in implementing the priorities will be 
monitored regularly by the Commission, notably  in the SAp Annual Reports and through the 
structures set up under the SAp.  
The events that occurred in Kosovo in March 2004 are a major setback. These events confirm 
the need for firmly anchoring Kosovo into the Stabilisation and Association Process. In this 
respect, the European Partnership will contribute to provide the necessary guidance to ensure a stable future for a secure, democratic and mu lti-ethnic Kosovo with its place in Europe. In 
the light of further developments and of  a thorough assessment of the causes and 
consequences of recent events, the elements of  the proposal related to Kosovo might need to 
be adapted later on in consultation with the United Nations Interim Ad ministration Mission in 
Kosovo and other actors of the wider international community.  
The European Partnership prio rities should form the basis for programming of the financial 
resources making up Community assistance, which will continue to be the assistance provided for under existing financial instrument(s), in particular Council Regulation (EC) No 
2666/2000 of 5 December 2000 (CARDS). 
The proposed Council Decision ha s no financial implications. 
In view of the above, the Commission invite s the Council to adopt the attached decision. 
 
 3    Proposal for a 
COUNCIL DECISION 
on the principles, priorities and conditions contained in the European Partnership with 
Serbia and Montenegro including Kosovo as defined by the United Nations Security 
Council Resolution 1244 of 10 June 1999 
THE COUNCIL OF THE EUROPEAN UNION, 
Having regard to the Treaty esta blishing the European Community, 
Having regard to Council Regulation (EC) No  xxx on the establishment of European 
Partnerships in the framework of the Stabilisation and Association process1 and in particular 
to Article 2 thereof, 
Having regard to the proposal from the Commission, Whereas: (1) The Thessaloniki European Counc il of 19 and 20 June  2003 endorsed the 
“Thessaloniki Agenda for the Wester n Balkans: moving towards European 
integration” where the drawing-up of Europ ean Partnerships is mentioned as one of 
the means to intensify the Stabi lisation and Association process. 
(2) Council Regulation (EC) No xxx sets out th at the Council is to decide, by a qualified 
majority and following a proposal from th e Commission, on the principles, priorities 
and conditions to be contained in the European Partnerships, as well as any subsequent adjustments. 
(3) Council Regulation (EC) No xxx states that  the follow up of the implementation of the 
European Partnerships will be ensured th rough the mechanisms established under the 
Stabilisation and Association pro cess, notably the Annual Reports. 
(4) The 2004 Commission's Annual Report presents  an analysis of the preparations of 
Serbia and Montenegro including Kosovo as  defined by the United Nations Security 
Council Resolution 1244 for further integration into the European Union and identifies 
a number of priority areas for further work. 
(5) In order to prepare for further integration into the European Union, the competent 
authorities in Serbia and Montenegro s hould develop a plan with a timetable and 
details in terms of measures Serbia and Montenegro intend s to take to this end. As 
Kosovo is at present under in ternational interim administ ration pursuant to United 
Nations Security Council Resolution 1244, a se parate plan addres sing the priorities 
                                                
 
1 OJ L […], […], p. […]. 
 
 4    concerning Kosovo should be developed unde r the authority of the United Nations 
Interim Administration in Kosovo. 
HAS DECIDED AS FOLLOWS: 
Article 1 
In accordance with Article 1 of Council Regulati on (EC) No xxx, the principles, priorities and 
conditions in the European Partnership for Serbia and Montenegro including Kosovo as 
defined by the United Nations Security Council Resolution 1244 are set out in the annex 
hereto, which forms an integr al part of this Decision. 
Article 2 
The implementation of the European Partnership shall be examined through the mechanisms 
established under the Stabilisat ion and Association process. 
Article 3 
This Decision shall take effect on the third day following its  publication in the Official 
Journal of the European Union . 
Done at Brussels, […] 
 For the Council 
 The President  […] 
 
 5    ANNEX  
1. INTRODUCTION 
The Thessaloniki Agenda identifies ways and means of intensifying the Stabilisation and 
Association process, inter al ia through the intr oduction of European Partnerships.  
Based on the Commission’s Annual Report, th e purpose of the Europ ean Partnership for 
Serbia and Montenegro including Kosovo as defined by the United Na tions Security Council 
Resolution 1244 is to identify priorities for action in order to support efforts to move closer to 
the European Union within a coherent framework. The priorities are adapted to specific needs and stage of preparation of Se rbia and Montenegro including Kosovo as defined by the United 
Nations Security Council Resolution 1244 and w ill be updated as necessary. The European 
Partnership also provides guidance for financ ial assistance to Serbia and Montenegro 
including Kosovo as defined by the United Nations Security C ouncil Resolution 1244. 
It is expected that Serbia and Montenegro including Kosovo as defined by the United Nations 
Security Council Resolution 1244 will adopt plans including a timetable and details in terms 
of how they intend to addres s the European partnership prio rities. The plan should also 
indicate ways to pursue the Thessaloniki ag enda, the priorities on fighting organised crime 
and corruption identified at the 2002 London Conf erence and at the Ministerial meeting held 
in Brussels on 28 November 2003 in the framew ork of the EU-Western Balkans Forum and 
the measures presented by each of the Wester n Balkan countries at the meeting of 5 
November 2003 in Belgrade as a follow-up to  the Ohrid Conference on integrated border 
management. 
2. PRINCIPLES 
The Stabilisation and Associati on process remains the framework for the European course of 
the Western Balkan countries, all the way to their future accession. 
The main priorities identified for Serbia an d Montenegro including Ko sovo as defined by the 
United Nations Security Council Re solution 1244 relate to its capac ity to meet the criteria set 
by the Copenhagen European Counc il of 1993 and the conditions set for the Stabilisation and 
Association process, notably the conditions de fined by the Council in its Conclusions of 29 
April 1997 and 21-22 June 1999, the content of the final declarat ion of the Zagreb Summit of 
24 November 2000 and the Thessaloniki agenda. 
3. PRIORITIES 
The Commission’s Annual Report assesses progre ss made and notes areas where the country 
needs to increase its efforts. The priorities lis ted in this European Partnerships have been 
selected on the basis that it is realistic to expe ct that Serbia and Montenegro including Kosovo 
as defined by the United Nations  Security Council Resolution 1244 can complete them or take 
them substantially forward over the next years.  A distinction is made between short-term 
priorities, which are expected to be accomplishe d within one to two years, and medium-term 
priorities, which are expected to be a ccomplished within three to four years. 
 
 6    The European Partnership indicates the main prio rity areas for the preparations of Serbia and 
Montenegro including Kosovo as defined by th e United Nations Security Council Resolution 
1244 for further integration into  the European Union, based on the analysis in the 2004 
Annual Report. It should be r ecalled that where legislative approximation is concerned, 
incorporation of the acquis  into legislation is not in itself sufficient; it will also be necessary 
to prepare to its full implementation. 
The priorities concerning Serbia  and Montenegro and the priori ties concerning specifically 
Kosovo are presented in the lists attached. 
4. PROGRAMMING 
Community assistance under the Stabilisation and Association process to the Western Balkan 
countries will be provided  by the relevant financial instrument s, and in particular by Council 
Regulation (EC) No 2666/20002; accordingly, this Decision will have no financial 
implications. In addition Serbia and Monteneg ro including Kosovo as  defined by the United 
Nations Security Council Resolution 1244 will have access to funding from multi-country and 
horizontal programmes. The Comm ission is working with the Eu ropean Investment Bank and 
the International Financial Inst itutions, in particular the Eu ropean Bank for Reconstruction 
and Development and the World Bank, with a view  to facilitate the co -financing of projects 
relating to the Stabilisati on and Association process. 
5. CONDITIONALITY 
Community assistance under the Stabilisation and Association process to the Western Balkan 
countries is conditional on furthe r progress in satisfying the Cope nhagen political criteria and 
in particular progress in meeting the specific prio rities of this European Partnership. Failure to 
respect these general co nditions could lead the Council to take appropriate measures on the 
basis of Article 5 of Council Regulation (EC) No 2666/2000.  
Community assistance shall also be subject to  the conditions defined by the Council in its 
Conclusions of 29 April 1997 and 21-22 June 1999, in particular as re gards the recipients’ 
undertaking to carry out democratic, economic and institutional reforms. 
6. MONITORING 
The follow up of the European Partnership is  ensured through the mechanisms established 
under the Stabilisation and Association pr ocess, notably the Annual Report on the 
Stabilisation and Association process. 
                                                 
2 OJ L 306, 7.12.2000, p. 1. 
 
 7    SERBIA AND MONTENEGRO3 
 SHORT-TERM PRIORITIES 
POLITICAL SITUATION  
DEMOCRACY AND RULE OF LAW  
• Constitutional issues - Fully respect the Constitutional Charter and ensure the 
effective functioning of the state. In particular, fulfil all outstanding commitments laid down in the Constitutional Charter, not ably the establishment of the State Court 
including agreement on the exact scope of its powers. Revi se the republican 
Constitutions in line with the Constitutional Charter. Adopt the State Parliament’s 
Rules of Procedures and establish its committ ees. Ensure the financial viability of the 
state institutions, through regular financing in accordance with agreed principles and the preparation of individual instituti onal budgets (covering staff and operating 
costs). 
• Army reform - Adopt a defence strategy and m ilitary doctrine in line with 
democratic principles; prepare and adopt  a transparent and appropriate legal 
framework to clarify the outstanding issue of military property.  
• Electoral law reform  - In Serbia:  complete the ongoing electoral law reform 
(including electorate registe r) to bring the electoral system up to international 
standards notably by revising electoral la ws, in line with ODIHR recommendations 
and fully implementing legislation on financing of political parties. 
• Public Administration Reform: 
Strengthen and maintain administrative cap acity of the institutions dealing with 
European integration at the state and republ ican level (in terms of staff, training, 
equipment)  and improve co-operation among them. 
In Serbia : Adopt a comprehensive strategy on Public Administration Reform  
including a precise calendar of  actions, in particular addr ess civil service pay system 
reforms and related human resource devel opment measures; establish and maintain 
the relevant institutions and allocate the necessary resources; prepare the legislation 
on Government and Civil Service. 
In Montenegro : Implement the strategy on Public Administration Reform, in 
particular adopt and start implementing the legislation on civil service to ensure 
professionalism and accountability. Adopt the law on salaries of civil servants and 
public employees. 
• Judicial reform: 
Ensure the smooth transfer military jurisdicti on to civilian courts in line with the 
Constitutional Charter. 
                                                
 
3 Not including Kosovo as defined by United Nations Security Council Resolution 1244 of 10 June 1999. 
 
 8    In Serbia : Modernise and  increase efficiency and inde pendence of the court system, 
in particular its commercial courts; ensu re the functional inde pendence of war crime 
prosecutor. Prepare for the setting-up of administrative a nd appellate courts. 
In Montenegro : Continue preparations for implem entation of the Criminal Code and 
of the Criminal Procedure Code, and la w on prosecutors, in particular ensure 
functional independence of special prosecutor for or ganised crime. Set up 
administrative and appellate courts. 
• Fight against corruption: 
In both republics : Prepare a comprehensive anti-corruption strategy in line with 
Council of Europe standards and a dopt law on conflict of interests.  
HUMAN RIGHTS AND PROTECTION OF MINORITIES  
• Council of Europe obligations - Fulfil all short term obligations arising out of 
membership of the Council of Europe in cluding uniform effective implementation, 
throughout the State Union, of Europ ean Convention on Human Rights and 
Fundamental Freedoms and European Convention for the Prevention of Torture. 
• Ombudsman: 
In Serbia : Adopt the legislation to set- up a Human Rights Ombudsman Office. 
In Montenegro : Strengthen the administrative  capacity of Ombudsman Office. 
• Elimination of torture : In both republics: Take comprehensive and transparent 
action in all alleged cases of torture. 
• Freedoms of expression and association : 
In Serbia : Depenalise slander. Enforce media legi slation in particul ar Broadcasting 
Law, adopt law on free access to informa tion, in line with Council of Europe 
standards. Create an envir onment (including financial as pects), conducive for the 
development of NGO and civil society or ganisations including social partners, 
notably by adopting the law on associations, and a law on the legal status of foreign 
NGOs. 
In Montenegro : Adopt law on acce ss to public information in  line with Council of 
Europe Standards. Adopt strategy on cooperation between NGOs and governmental 
bodies. 
• Property rights : In both republics : Adopt legislation on property restitution. 
• Refugees, displaced persons and minorities:  Ensure adequate co-operation 
between the State Union and Republics as re gards the legislative basis and practical 
protection of the rights of refugees, displa ced persons and minorities. Strengthen co-
operation with Bosnia and Herzegovina and Croatia to enable returns. Engage in 
dialogue with Pristina on return of displ aced persons and related issues such as 
property and social rights. In both republics : amend legislation to repeal all 
discriminatory provisions . In Montenegro : abolish legal prohibition for refugees to 
 
 9    work and amend restrictive provisions to  allow them possibility to apply for 
citizenship.  
REGIONAL AND INTERNATIONAL CO -OPERATION /OBLIGATIONS  
• Ensure full co-operation with International Criminal Tribunal for the former 
Yugoslavia. 
• Fully respect the UNSCR 1244 and co ntinue dialogue with Pristina  on practical 
issues of common interests. Ensure rec ognition of UNMIK travel documents and car 
plates.  
• Strengthen stability and regional co-operation.  Comply with the Stabilisation and 
Association process requirements and Th essaloniki commitments in terms of 
regional co-operation. Ratify and fully enforc e all free trade agreements concluded 
by the state. Start implementing the Memorandum of Understanding on the 
Development of the South East Europe Core Regional Trans port Network and in 
particular take measures to set up the cooperation mechanisms, inter alia, the Steering Committee and the South East Europe Transport Observatory. Make 
progress in meeting commitments under the 2003 Athens Memorandum of Understanding on the Regional Energy Market in South East Europe. 
E
CONOMIC SITUATION  
MARKET ECONOMY AND STRUCTURAL REFORMS  
• Sustain  macroeconomic stability . Implement a 2004 budget that reflects further 
necessary fiscal adjustment and consolidati on. Continue efforts with a view to come 
to an agreement with commercial credit ors (London Club) on debt restructuring. In 
particular, in Serbia : continue with a prudent monetary policy stance, backed by 
appropriate exchange rate policy, a nd establish more efficient monetary 
instruments with a view to improve th e targeting of monetary aggregates. 
• Liberalise remaining prices and remove administrative controls . In particular 
adjust energy prices towards cost recove ry levels, also gradually replacing all 
existing price subsidies to poor consumers by direct transfers. 
• Speed up the  restructuring, privatisation  and/or liquidation of large socially- and 
state- owned enterprises. Accelerate al so the restructuring, of large publicly-
owned utilities (electricity, oil and gas, railway, airlin e, telecommunications etc.). 
Continue banking sector reform more vigorou sly and in particular the preparation of 
privatisation in Serbia  of the majority of the state- owned banks. Ensure allocation of 
sufficient budgetary resources for re dundancy and restructuring costs. 
• Develop a stable and functioning land/real estate market.  Prepare legislation on 
cadastre. 
• Employment Policy  
In both republics : develop and implement a comprehensive strategy to promote 
employment and combat unemployment, in particular with regard to vocational training and labour market reforms, invol ving all relevant actors; improve public 
 
 10    employment services and allocate sufficient staff and financial resources to the 
implementation. 
• Develop reliable statistics. Revise and adopt the master  plan on statistics with a 
view to ensure a clear allocation of re sponsibilities among th e three Statistical 
Offices at State Union level and the republican level and an effective co-ordination 
among them. Adopt the laws on statistics at the State Union level and in both 
republics. 
MANAGEMENT OF PUBLIC FINANCES  
• Continue to formalise the grey economy and  broaden the tax base  
through implementation of Public Expenditu re Management System (treasury, public 
internal financial control) and comprehens ive tax reforms, with fewer exemptions 
and lower rates in particul ar on labour and improved implementation of tax laws.  
• In particular, in Serbia , adopt and implement the tax reform package, including the 
adoption of VAT and necessary related IT  systems. Continue to strengthen and 
modernise the Public Revenue Agency, fo cussing on revenue collection and control 
in order to reduce tax fraud.  
• In Montenegro , start reviewing the present tax legislation and th e administrative 
procedures in order to ensure effective and non-discriminatory enforcement of tax 
legislation. Strengthen the administrative capac ity of the tax legislation to effectively 
collect and control fiscal re venues, in particular VAT.  
• For both republics,  the legislation and implementa tion of VAT throughout the State 
Union should be harmonised in order not to lead to obstacles to the functioning of the 
internal market. 
EUROPEAN STANDARDS  
INTERNAL MARKET AND TRADE  
• Complete and fully implement all elem ents of the Internal Market / Trade 
Action Plan . In particular, urgent attention should be given to the definition of 
common tariffs for all products and harm onise all additional import levies and 
charges, in line with the resp ective tariff harmonisation schedule. 
• Abolish all import levies  and additional charges that we re introduced in violation of 
the standstill clause enshrined in th e EU’s autonomous trade preferences. 
• Abolish the  import licensing  system for steel and iron products that was introduced 
in violation of the standstill clause en shrined in the EU’s autonomous trade 
preferences. Abolish  export duties  on ferrous and non-ferrous metals and raw hide. 
• Ensure the necessary institutional set-up for the state to act as a single 
trade/customs interlocutor internationally , especially by st rengthening the Joint 
Customs Office, the veterinary/phyto-sanita ry Liaison Offices and the Statistical 
Office, and by granting these inst itutions the necessary powers. 
• Continue to modernise the customs administrations in order to ensure the 
development of a high level of administ rative capacity. Strengthen administrative 
 
 11    cooperation and ensure continuous obser vance of obligations  related to the 
implementation of preferentia l trade measures (origin).  
• Dismantle existing and avoid new  obstacles to the state’s internal market  as 
provided in the Cons titutional Charter.  Ensure state-wide market access for domestic 
and foreign operators regarding goods, se rvices, capital and persons. Ensure 
legislative consultation and apply the principle of mutual recognition  of all 
republican decisions on market access. 
• Implement a consistent and effective  public procurement regime in Serbia and 
Montenegro. Ensure transparent procedures, regardless of the value of the contract 
concerned, and non-discrimination between  Serbian and Montenegrin suppliers. 
• Install a direct link between business registers  to safeguard free state-wide 
establishment. In Serbia , adopt the Law tr ansferring the  business register  from the 
Commercial Courts to an independent agency.  
• Ensure a state-wide  anti-trust  regime, applicable to all anti-competitive effects 
both within and between the re publics, as well as to effect s on bilateral trade with the 
EU. Ensure the administrative capacity for the efficient and independent enforcement 
of these rules, including the strengthening of the Joint Competition Commission on 
state-level. Establish State aid coordi nation points and crea te full State aid 
transparency, as a first step towards State aid control. Ensure a coherent horizontal 
approach to promote competition policy. 
• Strengthen the protection of  Intellectual Property Rights by adopting a set of 
revised Laws. Ensure harmonised penal provisions and strengthen implementation capacity in this field, nota bly in border services.  
• Implement a system of corresponding account s in commercial banks to ensure the 
free movement of capital  between the republics.  
S
ECTOR POLICIES  
• Agriculture: 
In Serbia : Adopt Food Safety legislation and st rengthen food safety laboratories; 
adopt legislation on veterinary matters and strengthen controls. Establish Food-Chain 
Laboratories Agency. 
In Montenegro : Adopt Law on Veterinary Matter s (including fishery products) and 
establish the veterinary and phyto sanitary laboratories, including for fish and wine; 
strengthen controls. 
• Transport: 
In Serbia : Adopt law on Railways. Begin deve lopment of a national transport 
strategy, including economic viability of the sector. 
In Montenegro : Adopt and start implementing the road transport law (including 
establishment of the relevant implementa tion structures) and adopt the Law on Rail 
Transport. 
 
 12    • Energy: 
In Serbia : Adopt the Energy Law and establish the independent Energy Regulatory 
Agency, continue environmental audits on en ergy plants and address worst polluters. 
In Montenegro : Prepare and adopt the energy deve lopment strategy, also covering 
energy efficiency strategy; strengthen the ad ministrative capacity of the Ministry of 
Economy as regards energy; unbundle and re structure the electr ic power utility. 
• Industry and SMEs:   
In both republics : Continue implementing the European Charter for Small 
Enterprises.  
In Serbia:  Adopt the amended bankruptcy law. 
In Montenegro : Transform and rationalise the inst itutions involved in restructuring 
and privatisation of enterprises, nota bly, the Development Fund. Establish an 
autonomous investment promotion agency.  Continue implementation of the newly 
established national guarantee fund. 
• Telecommunications: 
In both republics : Ensure that the electronic communications sector is liberalised 
effectively including the st rengthening of regulatory bodies and the adoption of 
suitable laws and policies for the sector.   
• Environment: 
In Serbia : Adopt a Law on Environment Protect ion and set-up and operationalise the 
Environment Protection Agency. 
In Montenegro : Adoption of the strategy on waste wa ter and solid waste with a view 
to approximating with EU acquis. 
CO-OPERATION IN JUSTICE AND HOME AFFAIRS  
• Law enforcement reform: Improve judicial and law enforcement co-operation  both 
within each republic and between republic s. Full implementation of Memorandum on 
Cooperation, signed between Republican Mi nistries of Interior in December 2003. 
In Serbia : Adopt law on Police in order to improve professionalism and 
accountability. Implement a revision of the laws on the organisation of the judiciary 
(Law on Courts, Law on Judges, Law on Prosecutors, and Law on High Judicial 
Council) and on Criminal legi slation (Criminal Procedure Code, Criminal Code and 
Law on Enforcement of Criminal Sanctions), as provided for in the protocol on co-operation with the Council of Europe. 
In Montenegro : Adopt Laws on Police and State Security to ensure professionalism 
and accountability. 
 
 13    • Border Management: develop a state-level approach and mechanisms and ensure 
consistent implementation at the republican  level in line with the Memorandum of 
Understanding. As a follow-up to the Ohri d regional Conference on border security 
and management in May 2003, start implementa tion of the short term measures that 
were adopted by the Government and pres ented at the meeti ng of JHA ministers 
within the framework of the EU-Western Balkans Forum on 28 November 2003. 
In Serbia : Take further steps to implement best  practices concerning Border Police, 
in line with European Standards; proceed  in co-ordination with the State level 
authorities with demilitarisa tion of the border control. 
In Montenegro : Strengthen civilian c ontrol of borders (including training, equipment 
compatible with Schengen). 
• Fight organised crime, trafficking, drugs and mo ney laundering, terrorism:  
Strengthen inter agency co-operation within the republic and formalise inter 
republican co-operation. Deve lop the capacity to seize a ssets. Strengthen criminal 
intelligence.  Start implementing the specific action oriented measures that were 
agreed at the JHA ministerial meeting in  November 2003. Take the necessary steps 
to prepare for the conclusion of a co-ope ration agreement with Europol. Increase 
capacity to fight against drug trafficking a nd develop a national dr ugs strategy in line 
with the EU Drugs Strategy and Action Plan on Drugs. Strengt hen fight against 
trafficking of human bei ngs, including by providing ad equate assistance and 
protection to the victims. In particular in Montenegro : Implement anti-money 
laundering law notably by setting up financial investigation unit.  
Increase international cooperation and impl ement relevant international conventions 
on terrorism; improve cooperation and exchange of information between police and intelligence services within the State and w ith other States; prevent the financing and 
preparation of acts of terrorism. 
• Visa, asylum and migration:  Develop a unified state-le vel approach to issues 
related to visa, asylum and migration in lin e with the Constitutional Charter, notably 
with the complete harmonisation of visa regimes as applied in the republics, the 
adoption of the Asylum Law and the furt her conclusion and implementation of 
readmission agreements. Put in place the me chanisms to monitor the implementation 
of policies in the areas of asylum, migration and visa wh ich are elaborated at the 
state level but which are implemented at th e republican level. In particular for both 
republics , full participation in the co-ordinat ion mechanisms for the adoption and 
implementation of the relevant state level policies. 
 MEDIUM-TERM PRIORITIES 
P
OLITICAL SITUATION  
DEMOCRACY AND RULE OF LAW  
• Continue process of  restructuring of the armed forces , including as appropriate 
military conversion and downsizing (taki ng into account the social impact). 
 
 14    • Continue Public Administration Reform:  
Further develop the European Integration structures, notably by strengthening the 
European Integration Offices, establishi ng smooth cooperation mechanisms as well 
as European Integration Units in the line of Ministries of  State and Republican level. 
At the State  level: Ensure appropriate administrative capacity  to adequately perform 
the State competences and that a reform strategy for the State Public Administration is developed and implemented, includi ng the necessary legislative basis. 
In Serbia : Adopt civil service and Public Ad ministration Laws. Implement civil 
service human resources development meas ures. Strengthen capacity (policy making 
and inter-ministerial coordination) of th e public administration at government and 
local levels, notably by establishing a cen tralised payroll system. Strengthen the 
economic policymaking process, e.g. thr ough continued support to strengthen the 
statistical services and the creation of a medium term economic planning unit.  
In Montenegro : Implement the law on civil service and set up the agency for human 
resources management (which needs to b ecome sustainable). Develop training and 
recruitment policy. Strengthe n policy making process, e.g. through continued support 
to strengthen the statistical services a nd the creation of a medium term economic 
planning unit. 
• Parliament: 
In Serbia : Develop and implement a reform stra tegy for the Parliament to bring its 
working standards and resources to a level at which it can act as an effective institution. 
• Promote local government: 
In Serbia : Adopt and implement decentralisation reform and ensure sufficient local 
capacities to deal with, among others, ad ministrative and fina ncial issues and 
forthcoming regional programmes. 
In Montenegro : Implement law on local government, notably by establishing the 
equalisation fund. 
• Continue the judicial reform: 
In Serbia : Ensure full legal and practical safe guards for independence and efficiency 
of the courts, including the reform of the current system of appointment procedure; 
implement legislation on mandatory traini ng and ensure budgetary sustainability of 
the Judicial Training Centre; create an IT ne twork for prosecutors at all levels; ensure 
enforcement of court decisions. Develop the capacity to try war crimes domestically in full compliance with intern ational obligations as to c ooperation with ICTY. Set up 
appellate and administrative courts. 
In Montenegro:  Ensure mandatory training of judge s, through revision of the law on 
courts and budgetary sustainability of the Judicial Training Centre. Implement the IT 
strategy for the judiciary. 
 
 15    • Prison conditions: 
In Serbia : Improve prison conditions in line with  Council of Europe standards, in 
particular as regards vulnera ble groups such as juvenile offenders; ensure further 
training of penitentiary staff and improvement of facilities. 
In Montenegro:  Further training of penitentiary st aff and improvement of facilities. 
• Fight against corruption: 
In both republics:  Adopt and implement a comprehe nsive anti-corruption strategy. 
HUMAN RIGHTS AND THE PROTECTION OF MINORITIES  
• Council of Europe obligations. Put in place the necessary mechanisms to monitor 
and ensure a coherent and consistent im plementation of all Council of Europe 
obligations as provided for under the accession commitments.  
• Equality : Adopt/implement anti-discrimination legislation. 
• Freedom of expression: 
In Serbia : Transform Radio Television Serbia into a public service broadcaster. 
Support development of media in line with European standards. Foster 
professionalism of journa lists and media operators. 
In Montenegro : Continue the transformation of Ra dio Television Montenegro into a 
public service broadcaster; support devel opment of media in line with European 
standards. Foster professionalism of journalists and media operators. 
• Refugees, displaced persons and minorities : In both republics : ensure full respect 
of their human rights, including access to he alth services, and easy access to personal 
documents; ensure right of a real choice be tween sustainable return and integration; 
facilitate integration for thos e who choose not to return. In Serbia : Adopt new 
legislation on refugees; continue to implement the National strategy.  
REGIONAL AND INTERNATIONAL CO -OPERATION  
• Further improve regional co-operation . Further deepen regional trade 
liberalisation on the basis of the Free Trade Agreements in force. With regard to the Athens process on the Regional Energy Market  in South East Europe, prepare Serbia 
and Montenegro for the establishment in  2005 of an integrated regional energy 
market. Continue to implement th e Memorandum of Understanding on the 
Development of the South East Europe  Core Regional Transport Network.  
E
CONOMIC SITUATION  
MARKET ECONOMY AND STRUCTURAL REFORMS  
• Continue sustainable macroeconomic policies:  Continue fiscal adjustment and 
consolidation to reduce relatively high fiscal  and in particular external imbalances. 
Take account of the inevitable costs of structural reforms and rising interest payments, clearly prioritise public spending in short and medium term budgeting; in 
 
 16    particular reduce subsidies, transfers and the civil service wage  bill. Continuously 
reduce overall public spending as a share of  GDP and complement prudent monetary 
policy with careful exchange rate policies.  In Serbia : Reform the health system, in 
particular, the health insurance fund, with a view to ensure its financial sustainability  
and with a view to improve health pr otection and the health of the population. 
• Complete the privatisation process and financial (bank) restructuring . 
• Strengthen a business environment  conducive to private sector development and 
employment with competitive markets, le vel playing fields and access to finance 
through financial sector development. 
• Achieve a stable and functioning land/real estate market.  Adopt and implement 
legislation on cadastre. Start land reform, restructuring and privatisation of large 
farms. 
MANAGEMENT OF PUBLIC FINANCES  
• Improve the budget process and financial management:  Strengthen capacity 
building for budget preparation and executio n to enable priori tisation. Improve 
financial management at central and local  government level. Adopt the Law on the 
Supreme Audit Institution.  
• Establish effective procedures  for the detection, treatmen t and follow-up of cases of 
suspected fraud and other irregularities  affecting national a nd international funds. 
• Continue reviewing the fiscal legislation  and the administrative procedures in order 
to ensure effective and non-discriminatory  enforcement of the tax legislation. 
Continue strengthening the administrativ e capacity of the Ta x Administrations. 
EUROPEAN STANDARDS  
INTERNAL MARKET AND TRADE  
• Fully establish a single external trade regime  under the Internal Market / Trade 
Action Plan. Enforce common tariffs, levies and charges for all products after the end 
of the transition periods foreseen. 
• Ensure the full implementation of the customs reform  plan to secure a high degree 
of administrative capacity. 
SECTOR POLICIES  
• Industry and SMEs: 
In Serbia : Implement the European Charter fo r SMEs. Rationalise complex Chamber 
of Commerce organisation. Make arrangeme nts to facilitate NGO micro credit 
facilities.  
In Montenegro:  Implement the European Charter for SMEs. Proceed with the 
development and establishment of a na tional guarantee fund. Further develop 
dialogue between government and privat e sector, including through the SME 
Agency, by establishing a formal forum for consultation and business advocacy.  
 
 17    • Telecommunications: 
Transpose and implement the new EU fram ework for electronic communications.  
• Agriculture: 
In Serbia : Further build administrative cap acity for policy formulation and 
implementation. Design and start implementing a rural development policy. Continue strengthening veterinary, sa nitary, phyto-sanitary and f ood-safety legislation and 
controls, including wine laboratories. Improve waste management and reduce 
agricultural pollution. 
In Montenegro:  Adopt an overall strategy coveri ng agriculture, rural development, 
fisheries, phyto-veterinary matters. Increas e capacity building of the Ministry of 
Agriculture. Adopt the law on phytosanitary matters. 
• Transport: 
In Serbia : Adopt and implement a transport polic y strategy (road, rail, aviation and 
waterways). Strengthen capacity building, including project preparation for large 
investments. Earmark sufficient resources for the maintenance of transport infrastructures and institutions. 
In Montenegro:  Earmark sufficient resources fo r the maintenance of transport 
infrastructures and institutions. 
• Energy: 
In Serbia : Ensure unbundling in view of restru cturing and privatis ation. Set up the 
necessary institutional structures: Transmission System Operator, Market Operator, and Energy Regulatory Agency. Progre ss towards a regional energy market 
(including through feasibility st udies on interc onnectivity). 
In Montenegro:  Strengthen the energy regulator.  Complete restructuring and 
liberalisation of the internal energy mark et; Privatise and/or allow development of 
public/private partnerships in the sector. 
• Environment: 
In both republics : Adopt and implement legislation on environmental impact 
assessment in line with the EU acquis. 
In Serbia : Adopt and start implementing a strate gy on pollution of ai r (notably from 
power plants), water (waste water) and soil (solid waste); Strengthen administrative 
capacity notably as regards planning, pe rmitting, inspecting, monitoring, as well as 
project management. Develop a multi-annual plan for financing investments, based 
on estimations of costs and realistic sources of public a nd private funding. 
In Montenegro:  Develop an overall environmental strategy (waste water, solid water, 
air) with a view to a dopt environmental protectio n framework legislation 
approximating with the EU acquis and se t up an environment protection agency. 
 
 18    CO-OPERATION IN JUSTICE AND HOME AFFAIRS  
• Continue restructuring the  police : ensure accountability; re form police education; 
ensure co-operation among law enforcement agencies. 
• Border management:  
In both republics : On the basis of state level policy, develop the technical 
infrastructure and human resource capacitie s to implement the Integrated Border 
Management policy including strengtheni ng the border police and the customs 
services. Improve cross-border faci litations through new border posts. 
• Fight against organised crime, tra fficking, drugs and money laundering: 
In both republics : Develop an effective system of witness protection which 
incorporates republican but also regional elements. Reinforce the fight against 
economic and financial crime (including money-laundering and counterfeiting of 
currencies), fraud and corrupt ion as well as improve the related national legislation  
In Serbia : Strengthen capacity building at the Ministry of Inte rior (notably 
directorate for organised crime) Devel op procedures and the capacity to share 
intelligence between agencies. Develop an effective system of witness protection 
which incorporates republican but also  regional elements. Set-up Financial 
Investigation Unit in the Ministry of Finance.  
In Montenegro : Increase administrative and judicial capacity to implement the new 
criminal code as regards organised crim e. Strengthen the Unit for fight against 
organised crime at the Ministry of Interi or and ensure co-ordination of all the 
enforcement bodies.  
 
 19    KOSOVO 
as defined by United Nations Security Council Resolution 1244  
 SHORT-TERM  PRIORITIES   
GENERAL PRIORITY  
– In order to ensure a stable future for a secure, democratic and multi-ethnic Kosovo,  
make substantial progress in achieving the Standards for Kosovo, which  were 
presented by the UN Special Representative of the Secretary General and representatives of the Provisional Institutions  of Self Government in December 2003 and endorsed by the 
UN Security Council. In particular,  carry out the concrete actions set in the Kosovo 
Standards Implementation Plan covering :  
• Functioning of democratic institutions;  
• Rule of law;  
• Freedom of movement;  
• Sustainable returns and rights of communities and their members;  
• Economy;  
• Property rights;  
• Dialogue with Belgrade; 
• Kosovo Protection Corps. 
In addition to the above genera l priority, th e following complementary priorities
 need to be 
addressed: 
POLITICAL SITUATION  
DEMOCRACY AND RULE OF LAW  
– The Provisional Institutions of Self Gov ernment must take all necessary steps as 
required by the United Nations Interim Administration in Kosovo to overcome the 
consequences and address the causes of the March 2004 events , notably by explicitly 
condemning violence against minority commu nities, fully co-operating with UNMIK-
KFOR to bring those responsible to justic e, encouraging witnesses, restoring and 
rebuilding properties and allowing return of displaced persons.  
– EU compatibility : Develop the EU orientation of the Kosovo Government policy-making 
by institutionalising within the Prime Mini ster Office the mechanism for effective 
verification of EU consistency of government policies and draft laws; developing at the 
ministerial level and the Assembly of Kos ovo capacity to ensure EU compatibility.  
 
 20    – Fight against corruption : Improve cooperation between UNM IK and PISG effectively to 
implement the “zero tolerance” policy against corruption, notably by providing all necessary support to the inves tigations undertaken by OLAF and OIOS (the UN internal 
audit service). 
R
EGIONAL AND INTERNATIONAL CO -OPERATION  
• Ensure full co-opera tion with ICTY 
– Effectively participate in the Working Groups  established in the context of Pristina-
Belgrade dialogue on practical i ssues of common interests, whic h is part of the Standards 
for Kosovo. 
– Enhance regional co-operation.  Further integration into th e regional network of Free 
Trade Agreements under the Stability Pact MOU on Trade Liberalisation and Facilitation 
in South Eastern Europe, in complianc e with UNSCR 1244. Start implementing the 
Memorandum of Understanding on the Development of the South East Europe Core Regional Transport Network and in particular take measures to set up the cooperation mechanisms, inter alia, the Steering Committ ee and the South East Europe Transport 
Observatory. Make progress in mee ting commitments under the 2002 and 2003 
Memoranda of the Athens process on the Regi onal Energy Market in South East Europe.  
E
CONOMIC SITUATION  
MARKET ECONOMY AND STRUCTURAL REFORMS  
– Define the macro-economic priorities  for Kosovo in close co-operation with IMF. 
– Revitalise the privatisation  process to support economic development. 
MANAGEMENT OF PUBLIC FINANCES  
– Develop technical support system s and procedures to ensure transparency, efficiency, and 
better control of public spending. 
– Establish effective procedures for the dete ction, treatment and follow-up of cases of 
suspected fraud and other irregularities  affecting national a nd international funds.  
EUROPEAN STANDARDS  
INTERNAL MARKET AND TRADE  
– Continue development of a legislative and policy framework  for trade and trade-related 
policies, ensuring EU- and WTO-compatibility. Fully implement the new Customs Code . 
Adopt a Domestic Trade Law and a Law on Trade Inspection. 
SECTOR POLICIES  
– Environment:  
Prepare a comprehensive environmental action pl an, particularly relati ng to public health 
issues, with a view to appr oximating with the EU acquis. 
 
 21    Adopt and implement legislation on environmen tal impact assessment in line with the EU 
acquis. 
– Transport  
Prepare and adopt a transport policy fram ework on transport including the gradual 
development of a multi-modal transport strategy.  
Develop the civil operator of Pristina Airport, it s staff and facilities, to ensure an adequate 
level of security and sound and accountable management. 
– Energy  
Establish effective and functioning governance stru ctures in the energy s ector to ensure the 
viability and sustainability of Kosovo electri city company (KEK) notably by substantially 
increasing revenue collection. 
CO-OPERATION IN JUSTICE AND HOME AFFAIRS  
– Implement the new Criminal and Criminal Procedure Codes.  
 MEDIUM-TERM  PRIORITIES 
POLITICAL SITUATION  
DEMOCRACY AND RULE OF LAW  
– Improve EU compatibility : Strengthen the capacity of all Kosovo institutions to enact and 
effectively enforce EU compa tible policies and legislation, notably by reinforcing the 
structures dealing with European inte gration in the context of the SAP. 
– Strengthen public administration reform : Implement a Public Administration reform in 
order to streamline public administration a nd build a professional and accountable civil 
service able to attract and retain qualified staff. Improve the capacity of local administration to provide services to their constituencies in an equitable and effective 
manner.  
– Reinforce judicial reform: Strengthen the judiciary and law enforcement agencies, 
notably by improving infrastructure, equi pment and training. Transform the Kosovo 
Judicial Institute into a viable  future institution responsible for judicial training. Ensure the 
viability of a comprehensive legal aid system  for Kosovo. Improve the penitentiary system 
with particular attention to management, vo cational training and reintegration schemes.  
– Fight against corruption : Implement a comprehensive anti-corruption strategy 
comprising prevention measures and an effective investigation and prosecution, notably by strengthening local capacit y, in line with Council of Europe standards. 
H
UMAN RIGHTS AND PROTECTION OF MINORITIES  
– Ombudsman: Ensure the viability and the conti nued independence of the Ombudsman 
institution in Kosovo.  
 
 22    – Further develop freedom of expression : Ensure the long-term viability of the public 
broadcaster and its capacity to  perform its role as a public service broadcaster to all 
communities.  
– Improve protection of minorities : Ensure the viability of minority communities and their 
non-discriminatory participation in Kosovo so ciety, notably by establishing the necessary 
framework to ensure the equitable provision of public utilities a nd universal services. 
ECONOMIC SITUATION  
MARKET ECONOMY AND STRUCTURAL REFORMS  
– Ensure viability of a borrowing and debt management  capacity. 
– Develop guarantee mechanisms for political risk to attract foreign investment . 
– Further develop the regulatory framework  for public utilities with  regard to EU and 
international standards, notably by adoptin g and implementing subsidiary legislation, 
procedures and guidelines. Strengthen the admi nistrative capacity of the regulators. Ensure 
that regulators have suitable local staff and de velop their professional skills and technical 
equipment to discharge their functions.  
– Develop the capacity of the banking sector  to provide long-term financing to the 
economy.  
– Develop a social policy  to promote employment and social cohesion, to address poverty 
and social exclusion, to further improve social  standards and to deve lop effective social 
protection systems. 
– Increase efforts to ensure the compatibility of the statistical system  with EU standards.  
MANAGEMENT OF PUBLIC FINANCES  
– Develop capacity of the Tax Administration  in order to increase non-customs revenue 
(direct and indirect taxation) through the pr ogressive development of a taxation system 
based on EU standards. Start reviewing the present tax legislation and elaborate and 
implement a realistic action plan in order to  progressively strengthen the administrative 
capacity of the Tax Administration. 
– Ensure viability of the budget  cycle notably by capacity building for budget preparation 
and execution. Develop the capacity of the Asse mbly of Kosovo to e ffectively participate 
in the public finance process. Ensure smoot h spending across the financial year and the 
“carry-over” principle for unspent funds. 
EUROPEAN STANDARDS  
INTERNAL MARKET AND TRADE  
– Continue gradual alignment of Kos ovo's legislation  with all aspects of the EU's company 
law acquis. 
 
 23    SECTOR POLICIES  
– Agriculture:  
Develop a regulatory framework and appropriate  mechanisms to ensure food safety and 
improved phyto-sanitary controls in line with  relevant EU standards, also to improve 
Kosovo’s export opportunities. Develop a polic y and a regulatory framework to support 
viable land reform. Support the protection of agricultural land against unplanned urban 
development. 
– Environment:  
Adopt and implement the environmental action pl an with a view to approximating with the 
EU acquis. 
– Transport 
Implement a transport policy framework on trans port including the gra dual development of a 
multi-modal transport strategy.  
– Energy: 
Develop policy framework for public-private pa rtnerships and mixed investments in the 
energy sector. 
CO-OPERATION IN JUSTICE AND HOME AFFAIRS  
– Strengthen cooperation between border/boundarie s management agencies and strengthen 
capacity for implementation of veterinary a nd sanitary and phytosanitary standards as a 
part of the integrated border management system.