Brussels, 9.11.2005

SEC (2005) 1424

Croatia

2005 Progress Report

{COM(2005) 561 final}

{COM(2005) 556 final}

A. Introduction (...)3

1. Preface (...)3

2. Relations between the EU and Croatia (...)4

B. Criteria for membership (...)9

1. Political criteria (...)9

1.1 Democracy and the rule of law (...)10

1.2 Human rights and the protection of minorities (...)16

1.3 Regional issues and international obligations (...)22

1.4 General evaluation (...)32

2. Economic criteria (...)34

2.1 Economic developments (...)34

2.2 Assessment in terms of the Copenhagen criteria (...)36

2.3 General evaluation (...)45

3. Ability to assume the obligations of membership (...)47

3.1 Chapters of the acquis (...)47

Chapter 1: Free movement of goods (...)47

Chapter 2: Freedom of movement for workers (...)50

Chapter 3: Right of establishment and freedom to provide services (...)51

Chapter 4: Free movement of capital (...)52

Chapter 5: Public procurement (...)54

Chapter 6: Company law (...)55

Chapter 7: Intellectual property law (...)56

Chapter 8: Competition policy (...)57

Chapter 9: Financial services (...)59

Chapter 10: Information society and media (...)60

Chapter 11: Agriculture and rural development (...)62

Chapter 12: Food safety, veterinary and phytosanitary policy (...)64

Chapter 13: Fisheries (...)67

Chapter 14: Transport policy (...)68

Chapter 15: Energy (...)70

Chapter 16: Taxation (...)71

Chapter 17: Economic and monetary policy (...)72

Chapter 18: Statistics (...)74

Chapter 19: Social policy and employment (...)75

Chapter 20: Enterprise and industrial policy (...)77

Chapter 21: Trans-European networks (...)79

Chapter 22: Regional policy and coordination of structural instruments (...)80

Chapter 23: Judiciary and fundamental rights (...)82

Chapter 24: Justice, freedom and security (...)90

Chapter 25: Science and research (...)95

Chapter 26: Education and culture (...)95

Chapter 27: Environment (...)97

Chapter 28: Consumer and health protection (...)100

Chapter 29: Customs union (...)101

Chapter 30: External relations (...)103

Chapter 31: Foreign, security and defence policy (...)104

Chapter 32: Financial control (...)105

Chapter 33: Financial and budgetary provisions (...)107

3.2 General evaluation (...)107

C. European Partnership: Overall assessment (...)109

STATISTICAL ANNEX (...)111

A. Introduction

1. Preface

Following the conclusions of the Luxembourg European Council in December 1997, the Commission has reported regularly to the Council and the Parliament on progress made by the candidate states in preparing for EU membership. This Progress Report is the first such report on Croatia following the decision of the European Council of 17 and 18 June 2004 that Croatia is a candidate country. In December 2004, the European Council stated that:

“The European Council noted with satisfaction the progress made by Croatia in preparation for the opening of accession negotiations. Reaffirming its conclusions of June 2004, it urged Croatia to take the necessary steps for full cooperation with ICTY and reiterated that the remaining indictee must be located and transferred to the Hague as soon as possible. It invited the Commission to present to the Council a proposal for a framework for negotiations with Croatia, taking full account of the experience of the fifth enlargement. It requested the Council to agree on that framework with a view to opening the accession negotiations on 17 March 2005 provided that there is full cooperation with ICTY.”

However, in the absence of confirmation of the above mentioned full cooperation, the General Affairs and External Relations Council (GAERC) of 16 March 2005 decided to postpone the opening of accession negotiations and agreed that a bilateral intergovernmental conference (IGC) would be convened by common agreement as soon as the Council has established that Croatia is cooperating fully with the International Criminal Tribunal for the former Yugoslavia (ICTY). The Council also adopted a negotiating framework for Croatia.

Following a positive assessment on 3 October 2005 from the ICTY Chief Prosecutor that cooperation was now full, the Council concluded on the same day that Croatia had met the outstanding condition for the start of accession negotiations and an IGC opening the negotiations was held. The Council agreed that less than full cooperation with ICTY at any stage would affect the overall progress of negotiations and could be grounds for their suspension.

The structure of the report is largely the same as that used in previous years. The report:

– describes the relations between Croatia and the Union;

– analyses the situation in respect of the political criteria for membership;

– assesses Croatia’s situation and prospects in respect of the economic criteria for membership;

– reviews Croatia’s capacity to assume the obligations of membership, that is, the acquis as expressed in the Treaties, the secondary legislation, and the policies of the Union;

– briefly examines the extent to which Croatia has addressed the European Partnership priorities.

This report takes into consideration progress since the Commission Opinion of April 2004 on Croatia’s application for EU membership. It covers the period to 30 September 2005. It looks at whether planned reforms referred to in the 2004 report have been carried out, examines new initiatives, and assesses the overall level of alignment in each of the areas under consideration.

As in previous reports, “progress” has been measured on the basis of decisions actually taken, legislation actually adopted and measures actually implemented. As a rule, legislation or measures which are in various stages of either preparation or parliamentary approval have not been taken into account. This approach ensures equal treatment for all countries and permits an objective assessment of each country in terms of its concrete progress in preparing for accession.

The report draws on numerous sources of information. Croatia has been invited to provide information on progress made in preparations for membership since the publication of the Commission’s Opinion. Additional sources have been: the information Croatia has provided within the framework of the Stabilisation and Association Agreement, the national programme for the Integration of the Republic of Croatia into the EU, and various peer reviews and technical consultations that have taken place to assess its administrative capacity in a number of areas. Council deliberations and European Parliament reports and resolutions have been taken into account in drafting the report. The Commission has also drawn on assessments made by various international organisations, in particular the contributions of the Council of Europe, the OSCE, the international financial institutions, and non-governmental organisations.

2. Relations between the EU and Croatia

Recent developments in bilateral relations

The Stabilisation and Association Agreement (SAA) between the European Union and Croatia entered into force in February 2005. The SAA provides the legal framework for relations with the European Union; it also provides a framework for political dialogue and enhanced regional cooperation, promotes the expansion of trade and economic relations between the parties and establishes a basis for Community technical and financial assistance. The institutional framework of the SAA provides a mechanism for implementation, management and monitoring in all areas of relations.

Prior to the entry into force of the SAA, an Interim Agreement was in force from 1 March 2002, having been applied provisionally from 1 January 2002. A third meeting of the Interim Committee was held in May 2004. Following the entry into force of the SAA, first meetings of the Stabilisation and Association Council and the Stabilisation and Association Committee were held in April and July 2005 respectively. A first meeting of the EU-Croatia Joint Parliamentary Committee was held in Zagreb in March 2005. A new system of seven subcommittees has replaced the five-subcommittee structure of the Interim Agreement. These subcommittees continue to serve as useful fora for technical discussions of all issues linked to the implementation of the SAA and to the legal approximation process. Five subcommittee meetings have been held so far under the SAA. [1]

Protocols adapting the Stabilisation and Association Agreement (and the Interim Agreement) to take into account the accession of ten new Member States to the Union have been applied with effect from 1 May 2004. Technical adaptations have been made in various areas, including adapting the trade preferences for agricultural products, both basic and processed, as well as fishery products, with a view to avoiding any disruption of traditional trade between Croatia and the enlarged Union.

Croatia has to a large degree implemented its obligations under the SAA, as it had done so for the Interim Agreement that preceded it, and it has contributed to the smooth functioning of the various joint institutions. Croatia’s internal arrangements for implementation of the agreement seem to operate effectively. However, some difficulties in implementation remain and particular attention needs to be paid to the fulfilment of obligations in the field of competition policy and the supply of services. In the field of competition, for example, considerable delays have occurred in the adoption of a national restructuring programme for the steel industry (deadline 1 March 2004), and work needs to be intensified under the Alignment Programme for existing aid, including completion of the list of existing aid schemes, to meet the alignment deadline of March 2006.

In January 2005 Croatia adopted its third “National Programme for the Integration of the Republic of Croatia into the EU”. This strategic document sets out Croatia’s ambitions and tasks with a view to meeting the political and economic criteria, bringing the Croatian legal framework into line with the acquis, enhancing administrative capacity and informing the Croatian public.

A Council Decision on the principles, priorities and conditions contained in the European Partnership with Croatia was adopted on 13 September 2004. With this Report, the Commission proposed to update the Partnership. These revised partnerships provide updated priorities for the preparations of Croatia for accession and can be used as a yardstick to measure progress in the reforms. The Commission has proposed to the Council to change the name of the Partnership in order to reflect the current status of Croatia in its preparations for membership.

Trade relations

The EU is Croatia's main trading partner. Between 2000 and 2004 trade between the EU and Croatia increased substantially. EU-25 imports from Croatia increased by 37%, from EUR 2.86 billion in 2000 to EUR 3.92 billion in 2004. EU-25 exports to Croatia grew by 66% over the same period, from EUR 5.89 billion to EUR 9.78 billion. The EU continued to be the most important destination for Croatian exports, in particular Italy, Germany, Austria and Slovenia, although the share of merchandise exports to the EU declined from 66.93% in 2003 to 64.67% in 2004. Still, Croatia's trade deficit with the EU-25 thus almost doubled between 2000 and 2004, increasing from EUR 3.03 billion to EUR 5.85 billion. Of this figure, approximately EUR 1 billion is accounted for by the trade deficit Croatia has with those countries which joined the EU in May 2004. In 2004 the EU accounted for 68% of Croatia’s external trade and is way ahead of Croatia’s second main trading partner, Bosnia-Herzegovina (6.2%). Croatia ranks as the EU’s 31st partner (0.7% of total EU trade), which makes it the EU’s main trading partner in the Western Balkans.

EU imports in 2004 were primarily composed of industrial goods (76.6%), including principally machinery (18.4%), textiles products (13.5%), transport equipment (12.2%) and chemical products (8.9%). EU exports in 2004 were mainly industrial goods (80.3%) including machinery (23.1%), transport equipment (15.1%), of which 11.4% cars and trucks, chemical products (11.9%) and textiles products (6.2%).

Concerning agricultural trade, in February 2005 the Council approved directives authorising the Commission to negotiate an amendment to the Stabilisation and Association Agreement with Croatia whereby the existing duty-free access to the Community market for unlimited quantities of sugar and sugar products exported from Croatia would be replaced by a duty-free tariff rate quota. After some delay on the Croatian side, these negotiations began in early October 2005 and are currently ongoing.

Currently there are two anti-dumping measures in place against Croatia: one on imports of seamless pipes and tubes of iron or non-alloy steel, which is partially suspended, and one on imports of urea. An anti-dumping investigation on imports of seamless pipes and tubes of iron or steel was initiated in March 2005. Regarding safeguard measures (erga omnes), the proceedings on imports of farmed salmon initiated in March 2004 were terminated in April 2005. A safeguard investigation on imports of frozen strawberries was opened in July 2005.

In June 2005, Croatia announced the launch of an investigation in advance of possible safeguard measures against imports of beef – most of which are from the Community – which had resumed following the lifting of its BSE-related import ban in June 2004. The initiation of this investigation does not appear to be justified in light of Croatia’s SAA and WTO obligations.

Community assistance

Overall, between 1991 and 2004 Croatia received EUR 631 million of Community assistance. The EU consolidated its assistance in 2000 under the Community Programme for Assistance, Reconstruction, Development and Stabilisation (CARDS), at the same time as launching the Stabilisation and Association process (SAP). In the framework of the CARDS National Programmes, the total financial allocation for the period 2001 to 2004 amounted to EUR 262 million for the following five main priorities:

- Democratic stabilisation;

- Economic and social development;

- Justice and home affairs;

- Administrative capacity building;

- Environment and natural resources.

Since becoming a candidate country in 2004, Croatia has stood to benefit from all three pre-accession financial instruments: Phare for institution-building and economic and social cohesion, ISPA for environment and transport infrastructures and SAPARD for agricultural and rural development. Croatia also remains eligible for the CARDS Regional Programme in 2005 and 2006. Pre-accession financing will amount to EUR 105 million in 2005 (Phare: EUR 80 million, ISPA: EUR 25 million) and EUR 140 million in 2006 (Phare: EUR 80 million, ISPA: EUR 35 million, SAPARD: EUR 25 million). The Memorandum of Understanding on the Establishment of the National Fund, which provides a legal basis for the introduction of a decentralised implementation system for EU pre-accession assistance, was signed in May 2005.

Croatia has used its experience in implementing CARDS to adapt and extend the current CARDS mechanism in order to implement PHARE. On the programming and monitoring side, the National Aid Coordinator and its secretariat have updated their procedures. Relevant units have been created and their management appointed (National Authorising Officer, Head of National Fund, Director of the Central Financing and Contracting Unit, Internal Audit teams). Croatia submitted a request to the Commission for accreditation of its PHARE decentralised implementation system in June 2005.

In June 2005, the National ISPA Coordinator submitted applications for EC assistance under the ISPA instrument, together with final drafts of the National ISPA Strategies for environment and transport. The overall cost of the proposed investment amounts to approximately EUR 125 million, of which approximately EUR 63 million is proposed for ISPA financing while the remaining EUR 62 million is to be financed from national resources (including in part IFI loans). The Central Financing and Contracting Unit has been designated the Implementing Agency for the ISPA programme. Croatia submitted a request for the accreditation of the ISPA decentralised implementation system in July 2005.

For the SAPARD programme, Croatia has prepared a Rural Development Plan 2005-2006 identifying four measures to be financed: 1) Farm investment; 2) Processing and marketing of agricultural and fish products; 3) Improvement of rural infrastructure; and 4) Technical assistance, information and a publicity campaign. The legal framework for the SAPARD Paying Agency has been established by government decree. The preparations for Agency and National Fund procedures and check lists are under way, as are recruitment and training of personnel.

A Protocol to the SAA on a Framework Agreement on the general principles for Croatia’s participation in Community Programmes was signed in November 2004. Croatia currently participates as a third country in various Community programmes such as the 6th Framework Programme for RTD, Youth, Gender Equality, Tempus, Employment, and Life.

A Commission-EU Member States coordination mechanism for assistance has been in place on the spot since 2001, to maximise the impact of CARDS and Member States’ bilateral aid. In July 2004, the Croatian Government adopted a paper called “Pre-Accession Assistance Needs (PAAN)” which aims at improving donor coordination.

The Croatian government is undertaking a series of activities to improve the current implementation record of EU assistance. In October 2004, the government adopted an Action Plan listing the detailed responsibilities and tasks of individual public administration bodies. A government Coordination Group and a Technical Working Group have been set up to facilitate the coordination of overall assistance received by the Republic of Croatia from foreign sources. Nevertheless, the Croatian administration needs to continue its efforts to meet agreed project conditionalities, such as policy decisions; the establishment and strengthening of institutions and the allocation of resources.

Twinning

One of the main challenges facing the candidate countries is the need to strengthen their administrative and judicial capacity to implement and enforce the acquis. As of 1998, the European Commission began to mobilise significant human and financial resources to help them with this process, using the mechanism of twinning administrations and agencies.

A total of 27 twinning contracts worth EUR 23 million are currently being contracted and implemented in Croatia. Three twinning contracts under CARDS 2002 are being managed in a decentralised manner by the CFCU. Eighteen contracts under CARDS 2001, 2002 and 2003 are ongoing, three have been finalised. Preparations for contracting a further six twinning contracts are under way. Six twinning contracts under CARDS 2003 and eight under CARDS 2004 with an overall worth of EUR 11.85 million will be launched within the last quarter of 2005.

Negotiations and screening

Following the positive Commission Opinion of April 2004 on Croatia’s application and the decision of the European Council in June 2004 that Croatia is a candidate country, the European Council decided in December 2004 that accession negotiations would be opened on 17 March 2005 provided that there was full cooperation with the UN International Criminal Tribunal for the former Yugoslavia in The Hague (ICTY). However, in the absence of confirmation of full cooperation, the General Affairs and External Relations Council (GAERC) of 16 March 2005 decided to postpone the opening of accession negotiations and agreed that a bilateral Intergovernmental Conference (IGC) would be convened by common agreement as soon as the Council has established that Croatia is cooperating fully with the ICTY. The Council also adopted a negotiating framework for Croatia.

Following a positive assessment on 3 October 2005 from the ICTY Chief Prosecutor that cooperation was now full, the Council concluded on the same day that Croatia had met the outstanding condition for the start of accession negotiations and an IGC opening the negotiations was held. The Council agreed that less than full cooperation with ICTY at any stage would affect the overall progress of negotiations and could be grounds for their suspension.

The Commission started the so-called screening process on 20 October 2005, through which Croatian legislation is compared in detail with EU legislation. The screening will enable the EU to decide upon the opening of individual chapters for negotiations.

Croatia has made good progress with its own organisational preparations for the accession negotiations. In February 2005 the presidents of Croatia’s parliamentary parties reached agreement with the Prime Minister on the heads of 13 negotiating groups bringing together the 35 negotiation chapters. This followed the appointment of the Minister of Foreign Affairs and European Integration as the head of the national delegation for negotiations with the EU and the appointment of a deputy head of the delegation as chief negotiator.

In March 2005 a National Committee for the Supervision of Croatia's Membership Talks with the European Union was established in Parliament in order to expedite the EU accession process. This committee, which will include representatives of the parliamentary majority and opposition, employers and trade unions, should help streamline the passage of EU accession-related legislation.

B. Criteria for membership

1. Political criteria

The political criteria for accession to be met by the candidate countries, as laid down by the Copenhagen European Council in June 1993, stipulate that these countries must have achieved “stability of institutions guaranteeing democracy, the rule of law, human rights and respect for and protection of minorities.” [2] In the case of Croatia and the other Western Balkan countries, the conditions defined by the Stabilisation and Association Process are also a fundamental element of EU policy. In this section, the Commission therefore also monitors cooperation with the UN International Criminal Tribunal for the former Yugoslavia (ICTY), regional cooperation and other related issues such as developments in war crimes trials and refugee return.

In its 2004 Opinion, the Commission found that:

“Croatia has stable democratic institutions which function properly respecting the limits of their competences and cooperating with each other. The 2000 and 2003 elections were free and fair. The opposition plays a normal part in the operation of the institutions.

There are no major problems over assuring the rule of law and respect for fundamental rights. However, Croatia needs to take measures to ensure that the rights of minorities, in particular of the Serb minority, are fully respected. Croatia should speed up the implementation of the constitutional Law on National Minorities and accelerate efforts to facilitate the return of Serb refugees from Serbia and Bosnia and Herzegovina. Croatia needs to make substantial improvements in the functioning of the judicial system. The effectiveness of the fight against corruption needs further strengthening.

Croatia’s cooperation with the International Criminal Tribunal for the Former Yugoslavia has improved significantly in the past months. In April 2004, the Prosecutor stated that Croatia is now cooperating fully with ICTY. Croatia needs to maintain full cooperation and take all necessary steps to ensure that the remaining indictee is located and transferred to ICTY in The Hague. Croatia remains committed to regional cooperation; sustained efforts are needed in this area. In particular to resolve border issues with neighbouring countries in line with international standards for dispute settlement, and issues arising from the unilateral declaration of the protected “Ecological and Fishing Zone” in the Adriatic.”

The section below provides an assessment of developments in Croatia, seen from the perspective of the Copenhagen political criteria, including the overall functioning of the country’s executive and its judicial system. Such developments are in many ways closely linked to developments regarding Croatia’s ability to implement the acquis, in particular in the domains of anti-discrimination and equal opportunities, judiciary and fundamental rights as well as justice, freedom and security. Specific information on progress in implementing the acquis in these fields can be found in Chapter 19 (social policy and employment), Chapter 23 (judiciary and fundamental rights) and Chapter 24 (justice, freedom and security) of the section dealing with the ability of Croatia to assume the obligations of membership (see Section B. 3.).

1.1 Democracy and the rule of law

Parliament

The Parliament (Sabor) has generally functioned satisfactorily since the Opinion.

However, while in 2003 the Parliament adopted a significant proportion of the EU-related legislation relevant to judicial and institutional reform, the work of the Parliament in the year following the Opinion was hampered by a number of political conflicts and a slowdown of legislative activities.

In October 2004 the Head of the Committee for the Prevention of Conflicts of Interest resigned in protest over the alleged irregular replacement of two of its six members. The Committee, which had only recently been established, stopped functioning until parties finally agreed on its membership and Parliament appointed a new Committee on 20 January 2005. The new Committee started its work at a slow pace, however, and appears to have not yet defined its operating procedures. Following the defeat of a no-confidence motion against the then Foreign Minister in November 2004, a disagreement arose on the system of voting. Opposition parties accused the Government of falsifying numbers in order to reach the required majority and boycotted the work of the Parliament. A dispute over voting arose once more in December 2004 when an HDZ member admitted that during the Parliament’s session of 8 December, he had used the electronic voting key of an absent HSLS member of Parliament in order to ensure the quorum.

In January 2005 Government and opposition eventually reached a compromise to establish clear regulations for the voting procedure. However no quorum was reached on this occasion. A dispute over the establishment of Parliamentary Investigation Commissions against different party officials was also resolved, with an agreement that all such cases should be reviewed by the Committee for the Prevention of Conflicts of Interest. Despite delays in adopting this committee’s operating procedures, two Investigative Commissions were established in February 2005, one to establish the facts concerning the issuance of State guarantees to the creditors of the private shipyard “Viktor Lenac” under the former government, the other to establish whether the former Speaker of Parliament and the former Minister of Development and Construction had a conflict of interest during their mandate. Progress has been slow in both cases, however. There seems, in these cases and more generally, to be no real enthusiasm within Government and Parliament for the investigation of serious wrong-doing for its own sake.

Government

The last Presidential elections were held over two rounds on 2 and 16 January 2005, with victory going to the incumbent President Stjepan Mesić who won 66% of the vote in the second round. The HDZ ruling party’s candidate and Deputy Prime Minister Jadranka Kosor won 34%. The President of the Republic is elected by direct universal suffrage for a renewable five-year term of office. Turnout in rounds one and two was 50.6% and 51% respectively.

Local elections were held on 15 May 2005 for 426 municipal and 123 city councils, 20 county assemblies and a new Zagreb City Assembly. The overall turnout was very low at under 35%, continuing a trend in recent years. In view of the complexity of the election results and the large number of parties and independent candidates involved, coalition negotiations lasted several weeks. The difficult and sometimes unpredictable process of coalition building appears to have had a negative impact on citizens’ trust in the existing political parties and their politicians.

According to the State Elections Committee and local NGO GONG, which observed both elections through a network of a large number of observers, voting in both the presidential and local elections was held in a tolerant atmosphere without major irregularities.

The irregularities observed in the presidential elections mainly concerned out-of-country voting, particularly in Bosnia and Herzegovina, and cases of double voting where the same person voted once in Croatia and once in Bosnia and Herzegovina. These irregularities appear to have arisen due to shortcomings in the voting procedure and the managing of the voters’ lists, including for example the absence of any cross check between the diaspora voters' list and the voters' lists of the constituencies.

In March 2005, Parliament adopted Amendments to the Law on Local Elections, the main element of which was the abolition of the provision that members of national minorities can participate in local elections only if they have their registered permanent residence in Croatia and actually reside there. With the aim of introducing a similar provision for all citizens, in March 2005 the Government also submitted draft amendments to the Law on Permanent Residence and Temporary Residence to Parliament in urgent procedure. However, it did not clarify who would check whether a citizen was actually residing at the place of his/her registered permanent residence or how, or according to what criteria. While the Government did eventually withdraw these draft amendments, the way in which they were prepared, submitted to Parliament, changed and, eventually, withdrawn is illustrative of the often ad hoc rather than systematic law-making process in Croatia.

Before and even after the local elections of May 2005 there was a serious lack of clarity on how to implement those provisions of the Constitutional Law on National Minorities concerning the allocation of reserved seats for minority representatives. According to a Government decision of 22 July 2005, it appears that the number of reserved seats for minority representatives was based on the 2001 census lists, without any adjustment to take into account the most recently updated voters lists. With regard to the Serb minority, the difference between the 2001 census and the 2005 voters list is considerable, particularly in return areas. It is therefore vital that the provisions of the CLNM are correctly applied in order to ensure minority rights are fully respected. More generally, there is a need in Croatia for consistent and permanent electoral legislation which regulates issues such as the voters lists, out-of-country voting, and campaign financing in a transparent manner.

Public administration

The structure and tasks of the state administration are defined by the Law on the Organisation and Scope of the Ministries and State Administrative Organisations. This law was revised in February 2005 in view of the Government’s decision to merge the Ministry of Foreign Affairs and the Ministry of European Integration, thereby reducing the number of ministries from 14 to 13. The number of state administrative organisations has been increased to nine. The Central State Office for Public Administration created in December 2003 is now operational.

A Law on the Civil Service was adopted by Parliament in July 2005. The amendments address deficiencies in the legal basis of the status of civil servants and other public employees highlighted in the Opinion, most notably with regard to the depoliticisation of public administration, recruitment, selection, promotion and training policies, as well as the regulation of possible conflicts of interest. Most provisions of the new law will enter into force on 1 January 2006 and are dependent on drafting the necessary implementing legislation. While the new law addresses – to a degree [3] – the need to reduce the number of political appointees in the public administration, these de-politicisation clauses will only take effect upon formal assumption of office of the government established after the first parliamentary elections following the entry into force of the new Law. An important opportunity has thereby been missed to put the professionalisation of the Croatian civil service on a more secure footing. The Law on State Officials, the Law on the Structure of State Administration and the Law on the Transfer of Power will also still need to be amended in order to ensure the de-politicisation provisions can be properly implemented.

As regards training of civil servants, the Civil Service Training Centre established in December 2003 was officially opened in June 2005 but is not yet operational. Besides the Director, the Centre currently has 3 employees, with some additional staff unofficially affiliated to the Centre. The Ministry of Foreign Affairs and European Integration continues in the meantime to implement the already well developed EU training programmes.

Work on the decentralisation of state administration to local and regional authorities has continued, albeit slowly, since the Opinion. In December 2004, the Government set up a Decentralisation Commission tasked with coordinating a new Framework Decentralisation Programme for the period 2004-07. This Commission is expected to set the broad guidelines and principles for the decentralisation process and create expert groups to study and make recommendations on a sectoral basis. By the end of September 2005, the Decentralisation Commission had met twice and no expert groups had been set up. In September 2005, amendments to the Law on Local and Regional Self-Government were pending in Parliament, which include provisions on minority representation in executive and administrative bodies at local level and the transfer of various responsibilities to local government units.

Overall, the issue of public administration reform does not appear to have been a matter of urgent priority for the current Government. The limited progress made has tended to be in a piecemeal manner rather than as part of an overall reform strategy in Croatia. While the recently adopted Law on the Civil Service is important and addresses on paper a number of the critical deficiencies previously highlighted, it remains to be seen to what degree its implementation will lead to the professional, efficient, accountable, transparent and independent public administration Croatia needs, not least to provide an important basis for the successful implementation of the acquis.

The army and the police are under civilian control. On-going reform of the army has led to a reduction in the number of military personnel by about 10% between April 2004 and mid September 2005. The army is under the control of Parliament and the executive. The law provides for civilian control of the secret services by the Council for the Supervision of the Secret Services. Since the Opinion, the activities of the secret service have been subject to much public scrutiny, mainly but not exclusively in connection with the case of the fugitive war crimes indictee, Ante Gotovina.

In December 2004, the Head of the Counter-intelligence Agency (POA) was dismissed because of alleged misconduct by the Agency in an interrogation of a journalist. The conclusion of investigations carried out by the Council for Civilian Supervision of Intelligence, endorsed by two Parliamentary Committees, was that the POA did not overstep its competence in interviewing the journalist, but that there were indications of possible violation of her human rights. In this context, on 1 December 2004, the Parliamentary Committee on Human Rights and National Minorities concluded that the journalist’s human rights had been violated and recommended that the POA’s rulebook be examined as to its compliance with the Constitution with regard to the protection of human rights. Apart from the dismissal of the Head of the POA, there appears to have been no follow-up on this case so far.

Following a probe into the POA’s activities against five other journalists in 2003 and 2004, the Parliamentary Committee for Domestic Policy and National Security concluded in March 2005 that while the POA acted in line with the Law on Secret Services and its Rulebook with regard to the surveillance of one of the journalists, there were nevertheless grounds for suspicion that the POA had violated without reason the human rights and freedoms of the journalists in question. Again, there appears to have been no specific follow-up. These cases raise the question of the degree to which the democratic principle of civilian supervision of intelligence services is assured. Particular attention will need to be paid to ensuring that the civil institutions overseeing the work of the POA and other intelligence services can adequately carry out their functions.

As regards the police service, efforts to implement ongoing police reform need to be sustained. Progress is particularly called for with regard to recruitment and career management policy within the Police. Also, the under-representation of minorities and women in the police should be tackled.

Croatia has a general Ombudsman, as well as an Ombudsman for Children and an Ombudsman for Gender Equality. All three issued reports for 2004, which were adopted by Parliament. One of the main areas of concern highlighted by the Ombudsman in this year’s report was the ineffectiveness of the state administration, which, in general, does not act within legal deadlines. This applies in particular to pension claims and housing reconstruction cases, where individuals have been awaiting decisions for several years. The lack of discipline on the part of some administrative bodies in responding to the questions of the Ombudsman was also noted, as was the high proportion of complaints involving repossession of property or termination of occupancy rights, and the generally vulnerable position of the Roma community. Although the Ombudsman has no authority over the judiciary, an increasing number of complaints relate to the unreasonable length of judicial proceedings.

In 2004 the Ombudsman received 2,011complaints (a slight decrease from 2003 when 2,389 complaints were received) bringing the total number of pending cases in 2004 to 2,710. The Ombudsman also issued opinions on high profile cases, such as in July 2005 when he described the new Mayor of Zagreb's takeover of the management of 23 public companies owned by the City as ‘morally and legally questionable’. The Ombudsman is playing an important role, particularly in the protection of minorities. However, despite an increase in funding in 2005, the work of the Ombudsman is limited by a lack of funding and personnel.

Judicial system

The role and structure of the Croatian judicial system and the functions and competences of the Constitutional Court have not changed since the Commission’s Opinion.

The Constitutional Court continues to face a constant increase in the number of petitions submitted by individuals who consider that their constitutional rights have been violated by the final acts of state authorities or bodies of local or regional self-government (3,373 in 2003, 3,602 in 2004, 1,286 by the end of April 2005).

Improving the functioning of the judiciary remains a major challenge for Croatia. Problems highlighted in the Opinion such as the inefficiency of courts, the excessive length of court proceedings, weaknesses in the selection and training of judges and difficulties with the enforcement of judgements remain. These structural difficulties have contributed to an increase in the already very large backlog of cases before the Croatian courts, thus further weakening judicial capacity. A coherent long-term strategy to tackle systemic problems is crucial if the goal of an independent, reliable, transparent and efficient judicial system is to be achieved.

Judicial reform has been the subject of much attention since the Opinion. Several steps have been taken by the Croatian authorities to improve the functioning of the judiciary, including through specific legal amendments and procedural and organisational improvements. (see Chapter 23 – Judiciary and fundamental rights). However, several significant reforms which have been planned for several years are still outstanding. These include amendment of the Civil Procedure Code to place a limit on the number of times appealed cases can be remitted back to first instance before a final decision is made; an overhaul of the system of attorneys’ fees, linking fees to the value of the dispute regardless of the length of proceedings and number of hearings; introduction of new legal aid legislation extending it systematically to civil as well as criminal cases; creation of an integrated court management system; streamlining of the court document delivery system to speed up proceedings and prevent abuse by the parties; reorganisation of judicial traineeships to include pre-service training at the Judicial Academy and the physical rationalisation of the court network. A comprehensive new judicial reform strategy, addressing in detail the current shortcomings of the Croatian judiciary, was adopted by the government in September 2005. This positive step needs to be followed up with full commitment to its implementation and financing as well as the establishment of precise deadlines, which are currently missing from the Action Plan accompanying the strategy.

The total overall backlog of the Croatian judicial system amounts to around 1.6 million cases, up from the 1.38 million cases reported in the Opinion. 17% more cases were dealt with in 2004 than in 2003, but the rate of new cases being brought before the courts is increasing such that the backlog could not be reduced. There remain significant difficulties with the enforcement of judgements in Croatia. The lion’s share of the backlog within the Croatian judiciary – amounting to around 540,000 cases at first instance alone – is connected with the enforcement of civil judgements, especially those imposing financial obligations on debtors or requiring certain types of action from them. While some amendments to the Enforcement Act were made in July 2005, changes which would entrust execution procedures to enforcement officers vested with public powers need to be urgently adopted. Moreover, courts and parts of the state administration do not always respect or execute in a timely manner the decisions of higher courts.. However, significant progress has been made in tackling the serious backlogs affecting the Land Registry, which constitutes the second main category of the overall case backlog. In September 2004, there were 325,000 unresolved land registration cases pending nationwide. Following implementation of the amendments made in 2004 to the Land Registration Act, this figure had been reduced to around 257,000 cases by July 2005 (see Chapter 23 – Judiciary and fundamental rights).

As regards the duration of court proceedings, it should be noted that since the Constitutional Court was given competence in 2002 to hear complaints from parties concerning the excessive length of proceedings, the number of such complaints has been rising rapidly (542 in 2003, 925 in 2004 and 585 in the first third of 2005) and now forms over one quarter of the Constitutional Court’s caseload. A continuation of this trend could jeopardise the Constitutional Court’s own ability to act expediently.

With respect to the impartiality of the judicial system, some problems remain, most notably in the area of war crimes trials where, despite progress since the Opinion, ethnic bias against Serbs in local courts persists.

In conclusion, positive initial efforts are being made by the Croatian authorities to tackle the systemic weaknesses of the judicial system. However, the challenges faced are immense and not to be underestimated. The reform process is at an early stage and will require constant attention, including appropriate political and financial support, and a coherent long-term strategic approach is called for. Particular attention will need to be paid to reducing the case backlog, ensuring proper enforcement of judgements, improving the case management system and efficiency of courts and introducing transparent procedures for the recruitment and career management of judicial staff, as well as ensuring continuous in-service training. Rationalisation of the court network including case reallocation measures and the closure of some courts should also be pursued.

More details on the judicial system can also be found under chapter 23 – Judiciary and fundamental rights.

Anti-corruption policy

Corruption continues to be a serious problem in Croatia that affects various aspects of society. Croatia is one of the few European countries where surveys highlight the public perception that corruption has actually got worse over the past year. The main areas of perceived corruption are the health and construction sectors, as well as the judiciary. Various surveys and reports indicate the prevalence of corruption as a major concern of Croatian citizens. On the other hand, general tolerance of petty corruption appears to be widespread. Public awareness of all forms of corruption as a serious criminal offence needs to be raised.

The legal framework to combat corruption seems to be largely in place, although legislation on the financing of political parties is missing. The Additional Protocol to the European Criminal Law Convention on Corruption was ratified in April 2005 as was the UN Convention against Corruption. In October 2004, amendments to the Criminal Code entered into force, which aim at further harmonising Croatian legislation with international instruments. Amendments to the Act on Prevention of Conflict of Interest in the Exercise of Public Office and to the Act on Financing Presidential Electoral Campaigns, in both cases aimed at improving transparency, entered into force in July and August 2005 respectively. Croatia has been a member of the Group of States against Corruption (GRECO) since 2000. In December 2004 GRECO issued a compliance report on Croatia which concluded that half of the 16 recommendations from its May 2002 Evaluation Report had been dealt with satisfactorily.

Amendments to the Act on the Office for the Prevention of Corruption and Organised Crime (USKOK) strengthening the role and jurisdiction of the Office and providing for better coordination with police and other investigative bodies entered into force in March 2005. The failure of USKOK to successfully prosecute a number of highly publicised cases since its inception was partly explained by shortcomings in the old law. The degree to which USKOK will now become fully operational remains to be seen. In any case, administrative capacity in the fight and against corruption needs to be considerably further improved, not only at USKOK, but across the board including the courts, the State Attorney’s Office and other bodies and agencies involved in fighting corruption. At the enforcement level, more attention should be given to the effective prosecution of corruption cases. Action plans to prevent and combat corruption in the relevant law enforcement agencies (border police, police, customs, judiciary) need to be developed.

A new National Strategy against Corruption is still awaited as a successor to the 2002 National Programme to Combat Corruption. It is vital that a new multi-annual anti-corruption strategy and action plan is implemented with the necessary resolve so as to avoid the lack of effective implementation associated with the current programme. This should also clearly build on lessons learnt from the implementation of the 2002 Programme. Attention should be paid to high level and political corruption as well as to prevention and awareness raising on the negative impact of corruption, including on the investment climate. An overall statistical methodology is also needed in order to better monitor corruption.

More details on anti-corruption policy can also be found under chapter 23 – Judiciary and fundamental rights.

1.2 Human rights and the protection of minorities

Observance of international human rights law

Croatia has put in place a number of legislative provisions to guarantee respect for human rights and the rights of minorities. The Constitution deals with fundamental freedoms and rights. These rights are underpinned by certain international conventions, foremost of which is the European Convention for the Protection of Human Rights and its main additional protocols, ratified by Croatia in 1997. Individuals may take their case to the European Court of Human Rights if they consider that their rights under this Convention have been violated.

Croatia signed the European Convention on Nationality in January 2005 and in April 2005, it signed Protocol No 12 to the Convention on the Protection of Human Rights and Fundamental Freedoms. The Convention on Action Against Trafficking in Human Beings was signed in May 2005.

Since November 1998, the European Court of Human Rights has delivered 42 judgements concerning Croatia, and there have been 24 friendly settlements. On 40 occasions the Court found that Croatia had violated the ECHR and in 2 cases, no violation was found. Most of the violations have concerned the right to a fair trial and the length of proceedings, under Article 6 ECHR. There are currently 959 applications against Croatia pending before a decision body of the Court.

In December 2004 the European Court of Human Rights Grand Chamber panel accepted the request of Mrs Blecic to review the judgment of 29 July 2004 in the case Blecic v. Croatia, which had held that the judicial termination of Mrs Blecic’s occupancy/tenancy rights was in accordance with domestic law and did not violate the right to her home or the right to peaceful enjoyment of possessions guaranteed by the Convention. The Grand Chamber’s decision to accept Blecic’s request to review the case could re-open the issue of terminated occupancy/tenancy rights in Croatia.

Civil and political rights

There have been some developments in the area of civil and political rights since the Opinion. As regards access to justice, implementation of a free legal aid scheme introduced in May 2005 has begun for the Roma community, also for those without citizenship. However, foreigners and those without citizenship generally remain ineligible for legal aid in civil cases. In civil cases, currently only the Bar Association provides free legal aid with no state control over the eligibility criteria. There is no legal aid in civil cases organised by the state. A working group, including representatives from NGOs, has been established by the government to draft a new Legal Aid Act. Croatia should adopt as soon as possible the foreseen legislation and provide the necessary training and funds for its implementation.

There are generally no difficulties reported as regards arbitrary arrest, which is forbidden by the Constitution. Despite some progress in the reduction in the number of unfounded charges for war crimes being levelled at members of the Serb minority (see the section on domestic war crimes trials), a number of Serb returnees have faced arrest on return to Croatia since the Opinion only for charges subsequently to be dropped.

Freedom of religion is guaranteed by the Constitution. There have been no particular difficulties reported as regards violations of this freedom. Some tensions between religious communities remain in certain areas, however.

There have generally been few difficulties reported with respect to the freedom of expression. The media remains to a large extent deregulated and generally subject to free market rules. Concerns expressed in the Opinion concerning the possibilities for political influence at the local level remain valid, however, with local electronic and print media in many Croatian municipalities continuing to be partly or fully owned by local authorities. Despite generally fair media coverage of the May 2005 local elections, some difficulties were evident both with respect to political control of the media and in terms of a less than helpful portrayal of minorities. A new Media Law adopted in April 2004 goes some way in meeting the recommendations of the joint Council of Europe/European Commission/OSCE expert mission of February 2004. However, further measures are still needed to ensure transparency in media ownership. Croatian media is also becoming more highly concentrated. In August 2005, Europapress Holding (EPH) took over Split-based Slobodna Dalmacija, bringing EPH’s share of the daily market in Croatia to above the 40% market share limit on daily newspaper ownership stipulated in the new Media Law. EPH is therefore obliged to take measures to reduce its total stake to below 40% within six months.

Regarding audiovisual media, a number of adaptations to the legislative framework created in 2003 remain outstanding. No progress has been made in following up the recommendations of the above mentioned joint expert mission for changes to the Law on Electronic Media and to the Law on Croatian Radio and Television. The new Telecommunications Act adopted in May 2005 more clearly defines relations between the Telecommunication Agency and the Council for Electronic Media. Notwithstanding the need for further legislative changes, it appears that the Croatian Radio and Television Council has generally been functioning relatively smoothly. The Council for Electronic Media has on the other hand been facing some teething problems. (see also Chapter 10 – Information society).

Changes to the Criminal Code in 2004 allows for a more liberal libel regime in Croatia but fall short of full decriminalisation. [4] Since October 2004, four journalists have received suspended prison sentences for libel. The revised libel regime still appears to lead to a certain degree of self-censorship among journalists and could be further improved.

Freedom of association and assembly are guaranteed by the Constitution. The relevant law, which entered into force on 1 January 2002, continues to be implemented without reported problems.

There has been limited progress in the anti-discrimination field since the Opinion. The Criminal Code, which makes the violation of human rights through discrimination a criminal offence, has been further strengthened with regard to the categories of discrimination covered. It also contains specific provisions on racism and xenophobia. A comprehensive national strategy and action plan on the suppression of all forms of discrimination has not been adopted yet. Public awareness regarding these issues also needs to be raised. Since the Opinion, a number of apparently racially motivated attacks have been reported, mainly concerning members of the Serb minority. In one case, the attack resulted in the death of the victim. While these attacks have been investigated by the authorities, it appears that these investigations have not produced results in identifying and prosecuting the perpetrators. In general terms, it appears that the level of protection against discrimination is still far from the EU standards requiring the implementation of the principle of equal treatment between persons irrespective of racial or ethnic origin and the establishment of a general framework for equal treatment in employment and occupation, irrespective of religion or belief, disability, age or sexual orientation. (see the section on minority rights, cultural rights and the protection of minorities, below).

The right of property is recognised by the Constitution. Since the Opinion, there have been no changes to certain limitations on foreigners’ ownership of agricultural land, forests, protected parts of nature (national parks, nature reserves, etc.). The principle of reciprocity applies to the acquisition of real estate by non-Croatian citizens, also in the case of inheritance.

The process of restitution of dispossessed property that was taken during the Yugoslav communist regime continues to proceed very slowly.

The number of registered civil society organisations in Croatia continues to grow and further diversify. The number of registered NGOs has increased, from 23,740 in August 2003 to 27,955 in 2005. NGOs continue to play an important role in the promotion and protection of human rights and democracy in Croatia.

Economic and social rights

There are no significant developments to report in the field of gender equality. While in general it appears that the basic legislation is largely in place, a number of legal adjustments will be necessary to align with EU rules (see Chapter 19 – Social policy and employment).The enforcement of existing provisions in this field also remains problematic, and is hampered by the absence of gender-segregated statistical indicators and inadequate attention being paid to the Gender Equality Action Plan. The impact of the new National Policy for the Promotion of Gender Equality remains to be seen.

As regards education, while there appear to be no general difficulties to report since the Opinion, a number of specific challenges in relation to minority education remain (see next section, on minority rights, cultural rights and the protection of minorities).

In the area of children's rights, in May 2004 Croatia presented its second periodic report on progress on implementation of the UN Convention on the Rights of the Child. In its concluding observations of October 2004, the Committee on the rights of the Child noted satisfaction with Croatia’s adoption of new laws and harmonisation with international standards in this field, but concerns remained regarding the implementation of those laws. The Committee’s recommendations included additional measures to ensure education and training of staff working with children, and strengthening of administrative and judicial measures to eliminate discrimination against children belonging to minorities. Croatia has adopted a National Action Programme for Children. Special attention should be paid to issues such as violence against children and the need to develop quality standards and ensure the proper functioning and monitoring of care institutions and foster care. An investigation into a series of sexual abuses of minors at the Brezovica orphanage run by Caritas, the main Catholic charity organisation, is currently ongoing and was the subject of extensive media attention in June 2005. It appears that the case was known to the competent authorities for some time but that they failed to take the necessary steps. Disciplinary proceedings against the persons responsible within the State Prosecutor’s Office for obstruction of the criminal investigation have been initiated. Currently, one male former employee of the orphanage is in custody, while an official investigation has been opened against five female members of staff. The Office of the Children’s Ombudsman in Croatia seems to have been functioning well since its creation in 2003. It played an important role in progressing the Brezovica case, for example. In September 2005, however, the Children’s Ombudsman resigned for health reasons. Two Deputy Children's Ombudsman resigned at the same time, also for health reasons. According to press reports, the Children's Ombudman had received threats from an individual related to a case she has been dealing with and was dissatisfied with the proper functioning of the system of childrens' care.

As for the treatment of socially vulnerable or disabled persons, budgetary constraints continue to limit the scope of their rights to health and special care and their social integration. The National Plan for the Disabled is mostly unimplemented due to a lack of funds.

As regards labour rights and trade unions, there are no particular developments to report.

Minority rights, cultural rights and the protection of minorities

Croatia has ratified all the Council of Europe conventions it had committed itself to, such as the European Convention on Human Rights and Fundamental Freedoms, the Framework Convention for the Protection of National Minorities, the European Charter for Regional and Minority Languages, and the UN Convention on Civil and Political Rights. Furthermore, since the Opinion, Croatia has concluded a bilateral agreement on the protection of national minorities with Serbia and Montenegro, adding to similar existing bilateral agreements with Italy and Hungary.

The Constitutional Law on the Rights of National Minorities (CLNM), adopted in December 2002, sets the domestic legal framework for minority rights in Croatia. Implementation of the CLNM has been far too slow in some key areas, however, and needs to be stepped up. Problems have arisen in connection with the application of those provisions of the CLMN concerning reserved seats for minority representatives in local and regional governments (see Section B.1.1 Democracy and the rule of law – Government). Implementation of the CLNM has also been particularly limited with respect to those provisions on minority representation in State administrative and judicial bodies and in the police, where there is clear under-representation of minorities, especially Serbs. Discrimination appears to be commonplace when new vacancies arise and no programme has been developed by the government to ensure implementation of the provisions for minority representation laid out in the CLNM. Croatia needs urgently to take measures to provide statistical data on the representation of minorities in these institutions. Changes to certain legislation such as the Law on State Administration, the Law on Courts, the Law on the State Judicial Council and the Law on the State Prosecutor’s Office also still have to be made to bring these laws in line with the CLNM.

Some changes in the right direction were made in the Law on the Civil Service adopted in July 2005. Article 42(2) of this Law requires that the civil service admission plan ascertains the actual status of posts filled by members of national minorities so that representation of minorities in the state administration in line with the CLNM can be achieved (see also Section B.1.1 Democracy and the rule of law – Government). These provisions need to be fully implemented as soon as possible to ensure the current disadvantaged position faced by minority groups is adequately tackled.

Based on the relevant provisions of the CLNM, a Council for National Minorities has been established at national level, as have some 260 local minority councils which have an advisory role at municipal and county council level in Croatia. Misunderstandings and a lack of awareness among both the local authorities and the minority groups are widespread with respect to the role of the local minority councils, despite the good work of the umbrella Council for National Minorities in addressing these difficulties. This is especially the case when it comes to the difference in the role of representatives of minorities elected to the local executive bodies. Financial sustainability of the minority councils is not guaranteed everywhere; some local authorities provide funds, others do not. The umbrella Council for National Minorities has exclusive authority to distribute funds from the State budget to minorities, in line with the CLNM. In 2004, the Council received HRK 23.9 million (EUR 3.19 million) from the State budget, with an allocation in 2005 of HRK 24.5 million (EUR 3.27 million). The allocation of this funding in 2004 appears to have run smoothly on the basis of consensus following consultation with the minority associations concerned.

As regards citizenship questions, Serbs from Croatia still face difficulties when applying for citizenship due to the continued application of outdated rules from 2000. According to Article 115 of the Law on Foreigners which entered into force in January 2004, those who had the status of habitual residents of Croatia in the former Yugoslavia are entitled, within a limited period of time, to request its confirmation. Further to this, they are entitled to request citizenship status without having to wait for the 5-year period of residence in Croatia required of other foreigners. Roma also face difficulties but due to different factors, such as problems establishing/proving permanent residence, inadequate knowledge of the Croatian language or low levels of literacy. The National Plan for Roma should address those issues (see below).

National minorities are still generally perceived and presented in the media as separate entities and not as an integral part of society, with a narrow focus on problems rather than more positive aspects of their integration. Provisions of the CLNM that public radio and TV stations at national and local level have to produce and/or broadcast programmes for minorities in their languages are only being slowly implemented.

As regards education, some progress was made when following two years of discussions since the expiry of a moratorium on history teaching in Serb language classes in Eastern Slavonia, a Ministry of Education-appointed Commission of historians including minority members concluded work on a history supplement covering the period from the 1991-95 “Homeland War” until present. This history supplement was introduced as from the school year starting September 2005. Unfortunately, its introduction has not been short of controversy and led to negative reactions among the Croat majority community. In August 2005, the Ministry of Science, Education and Sport and representatives of the Serb minority agreed on the use of standardised history textbooks for all children regardless of their ethnicity as from the school year 2006/07. Implementation of these new provisions will need to be carefully monitored to ensure that minority issues are adequately covered in national curricula. As regards the use of the Serbian language and script in schools, according to a recent Council of Europe report there is a degree of legal uncertainty in the Croatian legislation concerning the conditions and procedures for the implementation of educational models envisaged in the Croatian Law on Education in Languages and Scripts of National Minorities.

As the largest minority in Croatia with 4.5% of the total population (201 631 according to the 2001 census), the Serb minority remains in a particular situation. Relations between the Croatian State and the Serb minority are burdened by the legacy of the 1991-95 war, in particular the question of refugee return and the restitution of these refugees’ property.

The position of the Serb minority in Croatia has improved since the Opinion, not least due to progress in terms of repossession and reconstruction of Serb-owned housing. However, a number of incidents in 2005 threatened to undo some of the advances made. For example, in May 2005, an elderly Serb man was murdered in Karin (near Zadar), apparently on account of his ethnicity. Also in May 2005 a bomb exploded in the building of a local Serb organisation in Vukovar followed one day later by two further bomb explosions in front of the Municipal Government buildings in the Serb-majority municipalities of Trpinje and Borovo near Vukovar. The government and all major political parties condemned these acts. Such incidents nevertheless highlight the need for greater efforts towards the objective of peaceful coexistence and reconciliation between ethnic groups. While ethnically motivated incidents are generally being investigated, it appears that prosecutions are few. Shortcomings in the judiciary, particularly as regards ethnic bias in war crimes trials, but also as regards severe backlogs of cases and difficulties accessing justice, weigh particularly heavily on the Serb minority.

There are also still real obstacles to the sustainable return of Serb refugees, such as enduring, hostility in certain localities, and remaining housing concerns, including those involving former tenancy rights holders (see below). Serbs, including those who remained in Croatia during the war, face major difficulties regarding access to employment, especially in the war affected areas. There appear to be many cases, particularly in the education area where adequately qualified Serbs were refused jobs even where no non-Serbs had applied. As mentioned above, little has been done to implement the provisions of the CLNM for representation of minorities in State administrative and judicial bodies and in the police. Additional efforts are needed to integrate the Serb community into Croatian society at all levels.

It has to be noted, however, that the existing institutions of the Serb minority (political parties, schools, cultural organisations) can work without any particular obstacles. In the Danube region, most of the provisions of the Erdut Agreement and the Government Letter of Intent have been implemented, with the important exception of proportional representation of Serbs in the judiciary. Despite occasional hiccups, the agreement reached in December 2003 between the then newly elected ruling Government party HDZ and the Serb minority party SDSS remains valid. There is also in general an increasing dialogue between Croatian authorities and national minorities. For example, in July 2004 the first meeting between the Government's Commission for Relations with Religious Communities and the Serb Orthodox Church's Commission for Relations with the State took place, with the discussion focusing on the return of Serb Orthodox Church property, reconstruction of 23 religious monuments and health insurance for Serb Orthodox clergy. Although issues remain open, relations between the Serb Orthodox Church and the Croatian State are improving. Important symbolic gestures such as the Prime Minister’s participation at the celebration of the Orthodox Christmas have contributed to an improved atmosphere.

In April 2005 the Coordinating Body of the Serb National Minority held its constituent session in Zagreb. According to the Constitutional Law, local minority councils may establish such a coordination body at State level for the purpose of promoting joint interests. Representatives of the Croat minority in Serbia have welcomed the establishment of a coordinating body of the Serb minority in Croatia and stressed the need for cooperation between the two communities.

The Roma minority also deserves particular attention. Making up 0.21% of the population officially but perhaps up to four times that amount in reality (30,000 to 40,000), most of their number are for a variety of reasons not integrated in Croatian society. Recent research indicates that 89% of Roma households do not have a single member with permanent income [5] and more than 50% of Roma are receiving social benefits.

Croatia approved a national programme for the Roma in October 2003 and signed up to the "Decade of Roma Inclusion 2005-2015" initiative, for which the Government adopted an action plan in spring 2005. Implementation of a free legal aid scheme provided for in the action plan and introduced in May 2005 has begun for the Roma community. This legal assistance should be particularly helpful in terms of regulating the basic status of Roma, especially as many are without citizenship. A Roma National Forum was established in June 2005 to coordinate among the numerous Roma associations and to assist the Government in implementing the Government Action Plan. Croatia now needs to ensure implementation of its other obligations and commitments through provision of adequate funding and concerted action from all levels of Government so that real improvements in the Roma’s position are achieved. It appears that the financing currently foreseen for implementing measures aimed at improving the position of Roma will not be sufficient.

Despite some positive initial steps since the Opinion to improve the Roma’s disadvantaged position, serious difficulties remain, not least in the area of education and employment where discrimination is widespread and the problem of segregation in schools remains. There also seems to be a lack of institutional structures within the relevant ministries, and an unwillingness or inability of some local authorities to finance Roma programs. Improvements in terms of expertise among Roma themselves will also be needed for successful implementation of Roma programmes.

1.3 Regional issues and international obligations

The Government has committed itself to complying with its obligations under the Dayton and Paris Agreements. It respects the sovereignty and territorial integrity of Bosnia and Herzegovina. Under the Erdut Agreement, signed in November 1995, Croatia accepted a number of obligations in order to achieve the peaceful reintegration of the Croatian Danube Region (Eastern Slavonia, Baranja and Western Sirmium) under the sovereign control of the Croatian Government as of January 1998 (when UNTAES, the UN Transitional Authority, withdrew from the territory). This Agreement and its Letter of Intent of January 1997 to the UNSC continue to be legally binding obligations. Some provisions which have been incorporated in the Constitutional Law on National Minorities, are not yet fully implemented. Croatia maintains its commitment to implementing all obligations related to the return of refugees and internally displaced persons (IDPs).

In general terms, Croatia’s cooperation with the International Criminal Tribunal for the former Yugoslavia (ICTY) since the Opinion has been good, and there have been no difficulties to report in terms of ICTY’s access to internal documentation, ability to interview potential witnesses and cooperation with the relevant Croatian authorities on ongoing cases.

However, in the case of fugitive war crimes indictee, General Ante Gotovina [6], Croatia’s cooperation with ICTY deteriorated after the Opinion was issued and Croatia’s efforts to locate, arrest and transfer Gotovina to The Hague were not sufficiently robust to yield significant results. Serious weaknesses in the functioning of the concerned services and the lack of results in this case led the ICTY Chief Prosecutor to conclude in March 2005 that Croatia was no longer fully cooperating with the Tribunal. Following the subsequent decision of the Council on 16 March 2005 to postpone the start of accession negotiations, the Croatian Government undertook a number of measures, centred around a newly adopted Action Plan, aimed at ensuring full cooperation with ICTY. While the implementation of these measures did not lead to the arrest of Ante Gotovina, by 3 October 2005, the ICTY Chief Prosecutor was able to conclude that Croatia was fully cooperating with ICTY and was doing everything it could to locate and arrest him. It is crucial that Croatia maintains full cooperation with ICTY and that it takes all necessary steps to ensure the last remaining indictee is located, arrested and transferred to The Hague.

In terms of other ICTY war crimes indictments of against Croatian citizens from the Republic of Croatia (27 Croats from Bosnia and Herzegovina have been indicted for criminal offences committed in the territory of that State), the confirmation of the indictment against retired General Mirko Norac in May 2004 was the sixth such indictment. General Norac is charged on the basis of individual and command responsibility for crimes against humanity and violations of the laws and customs of war, which were committed against Serb civilians during the Croatian military operation “Medak Pocket” in 1993. In July 2004 Norac appeared in front of the Tribunal in The Hague to plead not guilty to all five counts of the indictment. After entering his plea, Norac, on the same day, returned to Croatia where he is currently serving a 12-year sentence in Rijeka for war crimes against Serb civilians in the Gospic region in 1991. The ICTY judge in charge decided that Norac will be detained in Croatia, however, under the supervision of the Tribunal. In September 2005, the ICTY Referral Bench decided to refer the case against Rahim Ademi and Mirko Norac to Croatia (see below).

In December 2004, the ICTY Appeals Chamber decided to grant provisional release pending trial to Generals Cermak and Markac who are charged with crimes against humanity and violations of the laws and customs of war during and after the Croatian military operation “Storm”. The indictees surrendered voluntarily to the ICTY in March 2004 and had been held in custody in Scheveningen prison. In December 2004 Cermak and Markac returned to Zagreb. The request for provisional release was the third filed by the defence attorneys. The first two were rejected in April and September 2004. The ICTY Prosecution supported the appeals stating that conditions for granting temporary release had been met, namely (i) voluntary transfer, (ii) full cooperation (e.g. they have been interviewed by the prosecution), and (iii) Government guarantees.

In April 2005, the ICTY issued indictments against the former head of the Croatian military intelligence service and three Croatian journalists charging them with contempt of the Tribunal - punishable under rule 77(A)(ii) of the Rules of Procedure - for publishing the identity and testimony of a protected witness. A similar indictment was issued in September 2005 against two other Croatian journalists. An arrest warrant was issued in only one case, not because of the gravity of the charges, but because the accused refused to appear before the Tribunal. At their initial appearances before the Tribunal, all indictees pleaded not guilty.

As regards the prosecution of war crimes trials in domestic courts, Croatia has continued its preparations aimed at ensuring it will be in a position to try cases transferred by the ICTY as part of the ICTY completion strategy. The Special Investigative departments in the four County Courts in Split, Zagreb, Rijeka and Osijek designated for this purpose have undergone reinforcement, including through a number of training measures for judges, prosecutors and court counsellors from these courts. In May 2004, the Ministry of Justice and ICTY experts organised the first seminar in a series of three training modules on international criminal law and ICTY case law.

As regards legal preparations, the Croatian Parliament amended the Criminal Code in July 2004 to include new offences of crimes against humanity and subsequent assistance to the perpetrator of a criminal act against values protected under international law. The Code also introduces the concept of criminal liability on the basis of command responsibility, with levels of punishment depending on the degree of the commander’s subjective knowledge and whether the crime occurred due to “failure to prevent” or “failure to punish” war crimes. While the question of whether these new provisions can be applied retroactively is a matter of debate, an alternative legal solution is available in that command responsibility could be tried on the basis of the old criminal code through the criminal act of omission and with reference to the Geneva Conventions (ratified by Croatia).

In May 2005, the ICTY and the OSCE agreed that the latter would monitor the war crimes trials transferred to Croatia. The ability of Croatia to adequately prosecute transferred war crimes cases remains to be seen. While the experience of locally initiated war crimes trials leaves a lot to be desired (see below), the OSCE concluded in April 2005 that a limited number of Croatian courts could possibly deal adequately with one or a limited number of ICTY transferred cases. In September 2005, the ICTY Referral Bench decided to refer the case against Rahim Ademi and Mirko Norac to Croatia. This was the first time that a case in which persons were indicted by the ICTY was transferred to Croatian jurisdiction. The Referral Bench concluded in this case that the conditions of rule 11 bis of the ICTY Rules were met and that it was satisfied that appropriate measures were in place to ensure a fair trial and witness protection and that the death penalty would not be imposed. The existence of the above mentioned monitoring mechanism was also of particular relevance.

Croatia has also been active in trying war crimes cases on its own initiative. Until recently the vast majority of these cases had been against Serbs, with little appetite to try Croats, and many cases have been tried in absentia as well as based on unsubstantiated evidence. Croatia has made some progress since the Opinion in tackling the persistent ethnic bias that has tarnished much of its domestic war crimes prosecution. Serbs have been convicted at a lower rate than in previous years and unsubstantiated charges have been dropped at trial in a number of cases, including in about half of the cases brought in 2004. A review of lists of suspected war criminals initiated by the Croatian State Prosecutor has continued, leading to a major reduction in the number of Serbs against whom unsubstantiated charges had been made. The number of fully in absentia trials has remained low, although partially in absentia trials where only some of the defendants are present make up the majority of all trials. There has been noticeable progress on interstate cooperation, in particular on war crimes trials where bilateral agreements have been reached between the Croatian State Prosecutor and his counterparts from Serbia, Montenegro and from Bosnia and Herzegovina. This cooperation needs to be continued, as a number of issues hindering the prosecution of war crimes remain open, such as difficulties with the extradition of one State’s nationals to the jurisdiction of another.

Despite the recent progress, ethnic bias in domestic war crimes prosecution persists. In 2004, around 55% of local court verdicts in war crimes cases were reversed by the Supreme Court. In the first seven months of 2005, the figure stands at more than 60%. While a good sign that justice is eventually done, such a reversal rate reflects poorly on what is happening at the local level. Different levels of criminal responsibility are still pursued in domestic cases, with Serbs pursued in large numbers for less serious offences while Croats are pursued almost exclusively for killings. Witness security measures appear to be improving but are still not sufficient; despite the Law on Witness Protection, which entered into force in early 2004, witnesses, particularly those called to testify against members of the Croatian army, still face intimidation, and further efforts are needed to address witness (particularly minority witness) confidence in police. In a recent case in Osijek, the identity of a protected witness was revealed by the media. Although a criminal offence, it appears no measures have been taken against those responsible.

The risk of facing unsubstantiated charges is still cited by Croatian Serb refugees as an impediment to return. Also, to date it appears that nobody has been prosecuted in Croatia in connection with aiding fugitive indictees nor does it appear that anybody has been prosecuted for aiding in the removal of traces of war crimes.

There have been some important developments in certain war crimes cases since the Opinion. In June 2004, the Supreme Court confirmed the original verdict of the Rijeka County Court in the case of the Gospic Group of 24 March 2003. Tihomir Oreskovic, Mirko Norac and Stjepan Grandic were sentenced to 15, 12 and 10 years of prison, respectively, for war crimes committed against Serb civilians in Gospic in 1991. The conviction of General Norac was the first time that a high-ranking ethnic Croat military officer had been sentenced by a Croatian court for war crimes committed by the Croatian side during the 1991-95 war. Norac is also indicted by ICTY for crimes against Serb civilians during Croatian military operation “Medak Pocket” in 1993.

In the ‘Lora prison’ case, the Supreme Court on 19 August 2004 formally annulled the verdict of the Split County Court, which, in November 2002, had acquitted eight Croatian military police officers due to lack of evidence. The Supreme Court ordered a retrial before a completely different panel of judges. However, following serious lapses in the execution of a subsequent detention order in October 2004, four out of the eight defendants managed to escape and have been on the run ever since. The conduct of the retrial, which began in September 2005, will deserve particularly close attention, not least given that Split County Court is one of the four designated courts with exclusive jurisdiction to prosecute war crimes cases transferred from ICTY to Croatia.

Following a ruling of the Supreme Court, the trial against a Croatian police officer accused of killing 13 Serb prisoners of war in 1991 started for the third time at the Karlovac County Court (the “Hrastov” case) in September 2004. The same Court had previously acquitted the defendant twice, following the argument of the defence that the killings had been in self defence. The first two trials had been held in a heated and intimidating atmosphere created by the defendant’s supporters. The “Hrastov case” has been pending for more than 10 years and is illustrative of both the difficulties in achieving unbiased and professional prosecution of war crimes at local level and the important corrective role played by the Supreme Court.

On 8 April 2004 the Osijek County Court convicted Nikola Ivankovic for war crimes against civilians in Paulin Dvor near Osijek (Eastern Slavonia) in 1991 and sentenced him to 12 years imprisonment. The other indictee, Enes Viteskic, was acquitted due to insufficient evidence. Ivankovic and Viteskic, former members of the Croatian army, were charged with the killing of 19 Serb civilians in Paulin Dvor on 11 December 1991. In 1997, to pre-empt planned exhumations by ICTY experts, their bodies were transferred to a mass grave near Gospic in the Dalmatian hinterland. This is one of a relatively small number of cases to date where a Croat was convicted for war crimes against Serbs. It is also worth noting that the trial dealt only with the killing of the civilians and not the subsequent transfer of their bodies to cover up the crime, for which no one has been prosecuted to date.

Given the difficulties with war crimes trials at local level and in order to avert the risk of creating a two-speed system of war crime adjudication in Croatia (local versus ICTY indictments), training measures for the four special courts set up to deal with cases transferred from ICTY should ideally be extended to all judges and prosecutors assigned to county courts trying war crime cases.

As regards refugees, as a result of the 1991-95 war, approximately 550,000 Croats and 32,000 Serbs became displaced in Croatia (Displaced Persons – DPs). Some 370,000 Croatian Serbs fled Croatia, mainly in connection with the 1995 operations Flash and Storm. Of this total, around 330,000 found refuge in Serbia and Montenegro and 40,000 in Bosnia and Herzegovina.

The issue of DPs has largely been resolved; on 1 May 2005, the number of DPs was 6,776, including 1,676 of Serb ethnicity. As regards refugees, the results of a re-registration in Serbia and Montenegro and Bosnia and Herzegovina at the end of 2004 and the beginning of 2005 show a substantial decrease in the number of refugees from Croatia as compared to previous official figures. The numbers of refugees from Croatia in Serbia and Montenegro as of July 2005 was 101,875, and 7,566 in Bosnia and Herzegovina, down from a total of approximately 208,000 in both countries in May 2004. The total number of refugees and DPs is therefore currently somewhere in the region of 116,000.

The total number of Croatian Serbs registered as returnees to Croatia is 96,892 or just over one quarter of those who left the country during the war. Approximately 85,002 of these returned from Serbia and Montenegro and 11,890 from Bosnia and Herzegovina. It would appear, based on the latest figures, that a large number of Serb refugees have opted for local integration in the country they reside in. It should also be noted that many of the 96,892 officially registered returnees to Croatia have subsequently left the country. Estimates point to a sustainability rate of return of around 60-70%.

The main issues refugees face upon return relate to housing, a lack of public infrastructure in the return villages, especially electricity; difficulties in terms of economic reintegration and employment, and an often negative atmosphere within some receiving communities. The potential for harassment based on unfounded “war crimes” allegations, has been considerably reduced thanks to an initiative of the Croatian State Prosecutor to review and weed out the numerous unfounded cases against Croatian Serbs (see also the section on domestic war crimes trials). Some return areas are also still contaminated by mines. Both refugees who return and those who opt for local integration also often encounter difficulties with access to pension rights in particular with regard to the so-called “convalidation” for rights accumulated in the period 1991-1995.

The principle focus of the Croatian Government since the Opinion has been on housing and de-mining. The latter has been dealt with through Croatian budget resources and is planned to be completed by 2010. In terms of economic reintegration, the Government has put in place some measures for the economic development of the areas of return but no specific measures targeted at returnees. Little has been done to date to improve the atmosphere within the receiving communities.

The housing problem can be divided into three parts which, in order of expected impact on the return process, are: (i) reconstruction; (ii) provision of housing care for former tenancy right holders; and (iii) repossession of property.

To date, the Government has reconstructed over 130,000 out of the 200,000 destroyed houses and apartments. On 26 March 2004 the Croatian Government decided to re-open the period for requests for reconstruction, between 1 April 2004 and 30 September 2004. As a result, 16,346 new requests were received. At the end of July 2005, 7,092 reconstruction applications had not yet been processed. Also, there were 11,072 pending appeals out of a total of 12,447 against first instance adverse decisions. The Government’s objective is that that all pending requests will be processed by the end of 2005 and the pending appeals by the end of 2006. There appear to be no major delays in implementing the reconstruction programme for the estimated 10,000 houses currently scheduled. Outstanding cases should be treated expediently and particular care taken that sound reasons are given for adverse eligibility decisions. Completion of the outstanding reconstruction programme should make possible the return of approximately 30,000 people.

Based on amendments to the Law on the Areas of Special State Concern dating from July 2002 and a Government Decision of June 2003, publicly financed housing care is available both within and outside the Areas of Special State Concern for those former tenancy right holders who wish to return. The deadline for submission of requests from former tenancy right holders outside the Areas of Special State Concern (ASSC) who wish to return was originally set for the end of 2004 but has since been extended twice, with the current deadline of 30 September 2005. There is no deadline for applications inside the ASSC.

By the end of August 2005, there had been 7,521 requests for housing care inside the Areas of Special State Concern, of which 5,320 had not yet been processed. Of the pending requests, about 40% of families were already living in the apartment. Outside the Areas of Special State Concern some 3,628 requests had been received by the end of August 2005, but no decisions at all had been taken, despite EUR 3 million being allocated in the 2004 budget to facilitate the construction/purchase of 400-500 apartments outside the ASSC to cover the first requests. In the 2005 State budget, EUR 6 million is allocated for the same purpose, but to date no apartment has been purchased or allocated. The Government's target has been to meet all requests by the end of 2006.

Thus, the only major remaining housing scheme, more than two years after its adoption, remains at a very early stage of implementation: no apartment has been allocated and the vast majority of requests have not been processed. The Government has been particularly slow in terms of publicity of the housing care programme; the publicity campaign outside Croatia got under way with UNHCR support relatively late in 2004, thereby necessitating a further extension of the deadline to the end of September 2005. Resistance to the programme at local authority level has also hampered progress.

Potential beneficiaries – amounting to around 30,000 families in total, 24,000 of which in urban areas – are also not fully convinced they should apply. It would seem that the majority of them would prefer to be given the opportunity to buy “their” apartment at the same favourable price as in the 1990s and, then, sell. This option is not available to them. The programme does not address the issue of whether the termination of occupancy and tenancy rights was legally justified. There are currently a large number of domestic court proceedings ongoing on this issue. The Blecic v. Croatia case will be important in this respect (see section Human rights and the protection of minorities).

By August 2005, out of a total of approximately 20,000 applications for houses to be repossessed, only around 107 properties remained to be vacated. Over 3,000 housing units were still empty because either the owner had not reacted to the official notice or the owners’ whereabouts were unknown. There appears to be only a handful of properties still occupied ‘illegally’ i.e. where the occupation without the owner’s consent was not on the basis of the Law on Temporary Take Over and Administration of Specified Property of 1995. The Government’s deadlines to finalise the process of property restitution have been consistently missed, having been put back several times from the original deadline of 2002. Since the Opinion there has been some acceleration in dealing with repossession cases, however. The current target is to complete the repossession process in the second half of 2005.

Where repossession does take place, there are still a number of unresolved claims for compensation for damage to and looting of properties before repossession as well as claims by temporary occupants for ‘investments’ they have made without the owner's consent. A solution through out-of-court settlement has been promised on a number of occasions. However, while some conclusions in this respect were adopted by the Government in July 2005, there are currently no implementing rules that would allow these compensation cases to be adequately dealt with. In any case, it would seem advisable to exclude the possibility of claims for compensation for investments made without the owner’s consent being made against the owner.

There remain difficulties with respect to the lack of public infrastructure in the return areas which acts as an obstacle both to refugee return and to the sustainability of return itself. On the basis of a 2004 OSCE survey on the state of electrification in return areas it was established that 189 return hamlets and/or settlements were without electricity. The Croatian Electricity Company and the relevant state authorities have included some of the villages in a priority list for connection with the electricity network. However, a comprehensive action plan for the reconnection of all villages has so far not been adopted.

The validation of documents issued by the so-called “Republika Srpska Krajina” (RSK) is still an outstanding issue. “Convalidation” is necessary for recognition of working years during the 1991-1995 period and, thus, pension rights. The Government accepts the principle that working years should be “convalidated” and pension rights ensured. However, there are a number of specific issues to be resolved. The original deadline for requests for convalidation expired already in 1999 and needs to be reopened for the many potential beneficiaries who could not reasonably have been expected to apply by then, a large number of whom were, and still are, abroad and, thus, could not submit applications. Moreover, all adverse decisions made on the basis of applications submitted after the deadline expired should be reviewed.

There has been relatively good progress in terms of regional cooperation on the refugee issue. A regional ministerial conference on refugee return was held in Sarajevo on 31 January 2005. At that conference, the relevant ministers from Bosnia and Herzegovina, Croatia and Serbia and Montenegro adopted a joint Declaration which now forms the policy basis for dealing with refugee issues at regional level. In so doing, the three countries committed themselves to resolving the remaining population displacement by the end of 2006; to facilitating the return or local integration of refugees, depending on the latter’s decision, without any discrimination; to granting refugees the same rights and and the same responsibilities as all other citizens; to providing assistance and support to refugees in cooperation with UNHCR, the EU and OSCE; and to ensuring access to all rights and entitlements, including the right to accommodation, in a fair and transparent manner.

According to the Sarajevo Declaration, each country should produce a ‘roadmap’ for the implementation of the above mentioned goals. These roadmaps would then be unified in a joint implementation matrix. A task force working group has been set up to assist this process and while a certain degree of progress on technical issues has been made, deadlines are slipping and road maps are being finalised with a certain delay. If further delays occur, the deadline set of end 2006 for resolving the refugee issue will become increasingly unrealistic. The Sarajevo initiative is a positive development and an important political opportunity for Croatia: for the first time ever, it is proposed to address not only refugee return but also local integration in Bosnia and Herzegovina and Serbia and Montenegro, such that the refugee file can be closed once and for all.

In conclusion, despite the generally good progress since the Opinion notably on property repossession and reconstruction, the refugee return issue remains a major challenge and Croatia needs to intensify its efforts and provide the necessary financial means. In particular, Croatia needs to accelerate the planned housing care programmes for former tenancy rights holders, and pending reconstruction applications and appeals need to be treated expediently and actual reconstruction completed according to schedule. More efforts are required to ensure that the conditions for sustainable return for all categories of refugees are created. To this end, local authorities need to engage more actively in the process of refu