Proposal for a Council Decision on the principles, priorities and conditions contained in the European Partnership with Serbia and Montenegro including Kosovo as defined by the United Nations Security Council Resolution 1244 of 10 June 1999 {SEC(2004) 376}
Date: 2004-03-30
Institutions: European Commission
Subjects: EU relations, European integration, Serbia and Montenegro, cooperation policy, financial aid

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 30.3.2004 
COM(2004) 206 final 

Proposal for a 

COUNCIL DECISION 

on the principles, priorities and conditions contained in the European Partnership with 
Serbia and Montenegro including Kosovo as defined by the United Nations Security 
Council Resolution 1244 of 10 June 1999 

(presented by the Commission) 

{SEC(2004) 376} 

EN 

   EN 

 
 
 
  
  
 
 
 
 
 
EXPLANATORY MEMORANDUM 

The  Thessaloniki  European  Council  of  19  and  20  June  2003  reiterated  its  determination  to 
fully  and  effectively  support  the  European  perspective  of  the  Western  Balkan  countries  and 
stated that “the Western Balkans countries will become an integral part of the EU, once they 
meet the established criteria”. It endorsed the Council’s Conclusions of 16 June 2003 on the 
Western  Balkans  including  the  annex  “The  Thessaloniki  Agenda  for  the  Western  Balkans: 
moving towards European integration”, which aims at further intensifying relations between 
the  European  Union  and  the  Western  Balkans,  building  also  on  practices  used  in  the 
enlargement  process,  inter  alia  through  the  introduction  of  European  Partnerships.  The 
Commission has been invited to submit the first set of European Partnerships to the Council 
for approval with the next Annual Reports on the Stabilisation and Association process (SAp) 
due end of March 2004.  

The  European  Partnership  for  Serbia  and  Montenegro  including  Kosovo  as  defined  by  the 
United  Nations  Security  Council  Resolution  1244  is  based  on  the  provisions  of  Regulation 
(EC) No. XXX/YY. It lists short- and medium term priorities for the preparations of Serbia 
and  Montenegro  including  Kosovo  as  defined  by  the  United  Nations  Security  Council 
Resolution  1244  for  further  integration  with  the  European  Union  identified  in  the 
Commission’s  2004  Annual  Reports  and  serves  as  a  checklist  against  which  to  measure 
progress. The European Partnership for Serbia and Montenegro including Kosovo as defined 
by  the  United  Nations  Security  Council  Resolution  1244  reflects  the  current  stage  of 
preparation of the country and is tailored to its needs in full compliance with United Nations 
Security  Council  Resolution  1244.  Serbia  and  Montenegro  including  Kosovo  as  defined  by 
the United Nations Security Council Resolution 1244 is expected to respond to the European 
Partnership  by  preparing  plans  with  a  timetable  and  details  of  how  it  intends  to  address  the 
European  Partnership’s  priorities.  The  progress  in  implementing  the  priorities  will  be 
monitored regularly by the Commission, notably in the SAp Annual Reports and through the 
structures set up under the SAp.  

The events that occurred in Kosovo in March 2004 are a major setback. These events confirm 
the need for firmly anchoring Kosovo into the Stabilisation and Association Process. In this 
respect, the European Partnership will contribute to provide the necessary guidance to ensure 
a stable future for a secure, democratic and multi-ethnic Kosovo with its place in Europe. In 
the  light  of  further  developments  and  of  a  thorough  assessment  of  the  causes  and 
consequences of recent events, the elements of the proposal related to Kosovo might need to 
be adapted later on in consultation with the United Nations Interim Administration Mission in 
Kosovo and other actors of the wider international community.  

The  European  Partnership  priorities  should  form  the  basis  for  programming  of  the  financial 
resources making up Community assistance, which will continue to be the assistance provided 
for  under  existing  financial  instrument(s),  in  particular  Council  Regulation  (EC)  No 
2666/2000 of 5 December 2000 (CARDS). 

The proposed Council Decision has no financial implications. 

In view of the above, the Commission invites the Council to adopt the attached decision. 

2 

 
 
  
 
Proposal for a 

COUNCIL DECISION 

on the principles, priorities and conditions contained in the European Partnership with 
Serbia and Montenegro including Kosovo as defined by the United Nations Security 
Council Resolution 1244 of 10 June 1999 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community, 

Having  regard  to  Council  Regulation  (EC)  No  xxx  on  the  establishment  of  European 
Partnerships in the framework of the Stabilisation and Association process1 and in particular 
to Article 2 thereof, 

Having regard to the proposal from the Commission, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

(5) 

The  Thessaloniki  European  Council  of  19  and  20  June  2003  endorsed  the 
“Thessaloniki  Agenda  for 
towards  European 
integration”  where  the  drawing-up  of  European  Partnerships  is  mentioned  as  one  of 
the means to intensify the Stabilisation and Association process. 

the  Western  Balkans:  moving 

Council Regulation (EC) No xxx sets out that the Council is to decide, by a qualified 
majority and following a proposal from the Commission, on the principles, priorities 
and conditions to be contained in the European Partnerships, as well as any subsequent 
adjustments. 

Council Regulation (EC) No xxx states that the follow up of the implementation of the 
European Partnerships will be ensured through the mechanisms established under the 
Stabilisation and Association process, notably the Annual Reports. 

The  2004  Commission's  Annual  Report  presents  an  analysis  of  the  preparations  of 
Serbia and Montenegro including Kosovo as defined  by the United  Nations Security 
Council Resolution 1244 for further integration into the European Union and identifies 
a number of priority areas for further work. 

In  order  to  prepare  for  further  integration  into  the  European  Union,  the  competent 
authorities  in  Serbia  and  Montenegro  should  develop  a  plan  with  a  timetable  and 
details  in  terms  of  measures  Serbia  and  Montenegro  intends  to  take  to  this  end.  As 
Kosovo  is  at  present  under  international  interim  administration  pursuant  to  United 
Nations  Security  Council  Resolution  1244,  a  separate  plan  addressing  the  priorities 

1 

OJ L […], […], p. […]. 

3 

 
 
  
 
                                                 
concerning  Kosovo  should  be  developed  under  the  authority  of  the  United  Nations 
Interim Administration in Kosovo. 

HAS DECIDED AS FOLLOWS: 

Article 1 

In accordance with Article 1 of Council Regulation (EC) No xxx, the principles, priorities and 
conditions  in  the  European  Partnership  for  Serbia  and  Montenegro  including  Kosovo  as 
defined  by  the  United  Nations  Security  Council  Resolution  1244  are  set  out  in  the  annex 
hereto, which forms an integral part of this Decision. 

The implementation of the European Partnership shall be examined through the mechanisms 
established under the Stabilisation and Association process. 

Article 2 

Article 3 

This  Decision  shall  take  effect  on  the  third  day  following  its  publication  in  the  Official 
Journal of the European Union. 

Done at Brussels, […] 

For the Council 
The President 
[…] 

4 

 
 
  
 
 
 
 
ANNEX  

1. 

INTRODUCTION 

The  Thessaloniki  Agenda  identifies  ways  and  means  of  intensifying  the  Stabilisation  and 
Association process, inter alia through the introduction of European Partnerships.  

Based  on  the  Commission’s  Annual  Report,  the  purpose  of  the  European  Partnership  for 
Serbia and Montenegro including Kosovo as defined by the United Nations Security Council 
Resolution 1244 is to identify priorities for action in order to support efforts to move closer to 
the European Union within a coherent framework. The priorities are adapted to specific needs 
and stage of preparation of Serbia and Montenegro including Kosovo as defined by the United 
Nations  Security  Council  Resolution  1244  and  will  be  updated  as  necessary.  The  European 
Partnership  also  provides  guidance  for  financial  assistance  to  Serbia  and  Montenegro 
including Kosovo as defined by the United Nations Security Council Resolution 1244. 

It is expected that Serbia and Montenegro including Kosovo as defined by the United Nations 
Security Council Resolution 1244 will adopt plans including a timetable and details in terms 
of  how  they  intend  to  address  the  European  partnership  priorities.  The  plan  should  also 
indicate  ways  to  pursue  the  Thessaloniki  agenda,  the  priorities  on  fighting  organised  crime 
and corruption identified at the 2002 London Conference and at the Ministerial meeting held 
in Brussels on 28 November 2003 in the framework of the EU-Western Balkans Forum and 
the  measures  presented  by  each  of  the  Western  Balkan  countries  at  the  meeting  of  5 
November  2003  in  Belgrade  as  a  follow-up  to  the  Ohrid  Conference  on  integrated  border 
management. 

2. 

PRINCIPLES 

The Stabilisation and Association process remains the framework for the European course of 
the Western Balkan countries, all the way to their future accession. 

The main priorities identified for Serbia and Montenegro including Kosovo as defined by the 
United Nations Security Council Resolution 1244 relate to its capacity to meet the criteria set 
by the Copenhagen European Council of 1993 and the conditions set for the Stabilisation and 
Association process, notably the conditions defined by the Council in its Conclusions of 29 
April 1997 and 21-22 June 1999, the content of the final declaration of the Zagreb Summit of 
24 November 2000 and the Thessaloniki agenda. 

3. 

PRIORITIES 

The Commission’s Annual Report assesses progress made and notes areas where the country 
needs  to  increase  its  efforts.  The  priorities  listed  in  this  European  Partnerships  have  been 
selected on the basis that it is realistic to expect that Serbia and Montenegro including Kosovo 
as defined by the United Nations Security Council Resolution 1244 can complete them or take 
them  substantially  forward  over  the  next  years.  A  distinction  is  made  between  short-term 
priorities, which are expected to be accomplished within one to two years, and medium-term 
priorities, which are expected to be accomplished within three to four years. 

5 

 
 
  
 
The European Partnership indicates the main priority areas for the preparations of Serbia and 
Montenegro including Kosovo as defined by the United Nations Security Council Resolution 
1244  for  further  integration  into  the  European  Union,  based  on  the  analysis  in  the  2004 
Annual  Report.  It  should  be  recalled  that  where  legislative  approximation  is  concerned, 
incorporation of the acquis into legislation is not in itself sufficient; it will also be necessary 
to prepare to its full implementation. 

The  priorities  concerning  Serbia  and  Montenegro  and  the  priorities  concerning  specifically 
Kosovo are presented in the lists attached. 

4. 

PROGRAMMING 

Community assistance under the Stabilisation and Association process to the Western Balkan 
countries will be provided by the relevant financial instruments, and in particular by Council 
Regulation  (EC)  No  2666/20002;  accordingly,  this  Decision  will  have  no  financial 
implications. In addition Serbia and Montenegro including Kosovo as defined by the United 
Nations Security Council Resolution 1244 will have access to funding from multi-country and 
horizontal programmes. The Commission is working with the European Investment Bank and 
the  International  Financial  Institutions,  in  particular  the  European  Bank  for  Reconstruction 
and Development and the World Bank, with a view to facilitate the co-financing of projects 
relating to the Stabilisation and Association process. 

5. 

CONDITIONALITY 

Community assistance under the Stabilisation and Association process to the Western Balkan 
countries is conditional on further progress in satisfying the Copenhagen political criteria and 
in particular progress in meeting the specific priorities of this European Partnership. Failure to 
respect  these  general  conditions  could  lead  the Council  to  take  appropriate  measures  on  the 
basis of Article 5 of Council Regulation (EC) No 2666/2000.  

Community  assistance  shall  also  be  subject  to  the  conditions  defined  by  the  Council  in  its 
Conclusions  of  29  April  1997  and  21-22  June  1999,  in  particular  as  regards  the  recipients’ 
undertaking to carry out democratic, economic and institutional reforms. 

6. 

MONITORING 

The  follow  up  of  the  European  Partnership  is  ensured  through  the  mechanisms  established 
under  the  Stabilisation  and  Association  process,  notably  the  Annual  Report  on  the 
Stabilisation and Association process. 

2 

OJ L 306, 7.12.2000, p. 1. 

6 

 
 
  
 
                                                 
SERBIA AND MONTENEGRO3 

SHORT-TERM PRIORITIES 

POLITICAL SITUATION 

DEMOCRACY AND RULE OF LAW 

• 

• 

• 

• 

Constitutional  issues  -  Fully  respect  the  Constitutional  Charter  and  ensure  the 
effective  functioning  of  the  state.  In  particular,  fulfil  all  outstanding  commitments 
laid down in the Constitutional Charter, notably the establishment of the State Court 
including  agreement  on  the  exact  scope  of  its  powers.  Revise  the  republican 
Constitutions  in  line  with  the  Constitutional  Charter.  Adopt  the  State  Parliament’s 
Rules of Procedures and establish its committees. Ensure the financial viability of the 
state institutions, through regular financing in accordance with agreed principles and 
the  preparation  of  individual  institutional  budgets  (covering  staff  and  operating 
costs). 

Army  reform  -  Adopt  a  defence  strategy  and  military  doctrine  in  line  with 
democratic  principles;  prepare  and  adopt  a  transparent  and  appropriate  legal 
framework to clarify the outstanding issue of military property. 

Electoral  law  reform  -  In  Serbia:  complete  the  ongoing  electoral  law  reform 
(including  electorate  register)  to  bring  the  electoral  system  up  to  international 
standards notably by revising electoral laws, in line with ODIHR recommendations 
and fully implementing legislation on financing of political parties. 

Public Administration Reform: 

Strengthen  and  maintain  administrative  capacity  of  the  institutions  dealing  with 
European  integration  at  the  state  and  republican  level  (in  terms  of  staff,  training, 
equipment) and improve co-operation among them. 

In  Serbia:  Adopt  a  comprehensive  strategy  on  Public  Administration  Reform 
including a precise calendar of actions, in particular address civil service pay system 
reforms  and  related  human  resource  development  measures;  establish  and  maintain 
the relevant institutions and allocate the necessary resources; prepare the legislation 
on Government and Civil Service. 

In  Montenegro:  Implement  the  strategy  on  Public  Administration  Reform,  in 
particular  adopt  and  start  implementing  the  legislation  on  civil  service  to  ensure 
professionalism  and  accountability.  Adopt  the  law  on  salaries  of  civil  servants  and 
public employees. 

• 

Judicial reform: 

Ensure  the  smooth  transfer  military  jurisdiction  to  civilian  courts  in  line  with  the 
Constitutional Charter. 

3 

Not including Kosovo as defined by United Nations Security Council Resolution 1244 of 10 June 1999. 

7 

 
 
  
 
 
                                                 
In Serbia: Modernise and increase efficiency and independence of the court system, 
in particular its commercial courts; ensure the functional independence of war crime 
prosecutor. Prepare for the setting-up of administrative and appellate courts. 

In Montenegro: Continue preparations for implementation of the Criminal Code and 
of  the  Criminal  Procedure  Code,  and  law  on  prosecutors,  in  particular  ensure 
functional  independence  of  special  prosecutor  for  organised  crime.  Set  up 
administrative and appellate courts. 

• 

Fight against corruption: 

In  both  republics:  Prepare  a  comprehensive  anti-corruption  strategy  in  line  with 
Council of Europe standards and adopt law on conflict of interests.  

HUMAN RIGHTS AND PROTECTION OF MINORITIES 

• 

• 

• 

• 

• 

• 

Council  of  Europe  obligations  -  Fulfil  all  short  term  obligations  arising  out  of 
membership  of  the  Council  of  Europe  including  uniform  effective  implementation, 
throughout  the  State  Union,  of  European  Convention  on  Human  Rights  and 
Fundamental Freedoms and European Convention for the Prevention of Torture. 

Ombudsman: 

In Serbia: Adopt the legislation to set-up a Human Rights Ombudsman Office. 

In Montenegro: Strengthen the administrative capacity of Ombudsman Office. 

Elimination  of  torture:  In  both  republics:  Take  comprehensive  and  transparent 
action in all alleged cases of torture. 

Freedoms of expression and association: 

In  Serbia:  Depenalise  slander.  Enforce  media  legislation  in  particular  Broadcasting 
Law,  adopt  law  on  free  access  to  information,  in  line  with  Council  of  Europe 
standards.  Create  an  environment  (including  financial  aspects),  conducive  for  the 
development  of  NGO  and  civil  society  organisations  including  social  partners, 
notably by adopting the law on associations, and a law on the legal status of foreign 
NGOs. 

In  Montenegro:  Adopt  law  on  access  to  public  information  in  line  with  Council  of 
Europe Standards. Adopt strategy on cooperation between NGOs and governmental 
bodies. 

Property rights: In both republics: Adopt legislation on property restitution. 

Refugees,  displaced  persons  and  minorities:  Ensure  adequate  co-operation 
between the State Union and Republics as regards the legislative basis and practical 
protection of the rights of refugees, displaced persons and minorities. Strengthen co-
operation  with  Bosnia  and  Herzegovina  and  Croatia  to  enable  returns.  Engage  in 
dialogue  with  Pristina  on  return  of  displaced  persons  and  related  issues  such  as 
property  and  social  rights.  In  both  republics:  amend  legislation  to  repeal  all 
discriminatory  provisions.  In  Montenegro:  abolish  legal  prohibition  for  refugees  to 

8 

 
 
  
 
work  and  amend  restrictive  provisions  to  allow  them  possibility  to  apply  for 
citizenship. 

REGIONAL AND INTERNATIONAL CO-OPERATION/OBLIGATIONS 

• 

• 

• 

Ensure  full  co-operation  with  International  Criminal  Tribunal  for  the  former 
Yugoslavia. 

Fully respect the UNSCR 1244 and continue dialogue with Pristina on practical 
issues of common interests. Ensure recognition of UNMIK travel documents and car 
plates.  

Strengthen stability and regional co-operation. Comply with the Stabilisation and 
Association  process  requirements  and  Thessaloniki  commitments  in  terms  of 
regional  co-operation.  Ratify  and  fully  enforce  all  free  trade  agreements  concluded 
by  the  state.  Start  implementing  the  Memorandum  of  Understanding  on  the 
Development  of  the  South  East  Europe  Core  Regional  Transport  Network  and  in 
particular  take  measures  to  set  up  the  cooperation  mechanisms,  inter  alia,  the 
Steering  Committee  and  the  South  East  Europe  Transport  Observatory.  Make 
progress  in  meeting  commitments  under  the  2003  Athens  Memorandum  of 
Understanding on the Regional Energy Market in South East Europe. 

ECONOMIC SITUATION 

MARKET ECONOMY AND STRUCTURAL REFORMS 

• 

• 

• 

• 

• 

Sustain  macroeconomic  stability.  Implement  a  2004  budget  that  reflects  further 
necessary fiscal adjustment and consolidation. Continue efforts with a view to come 
to an agreement with commercial creditors (London Club) on debt restructuring. In 
particular,  in  Serbia:  continue  with a  prudent  monetary  policy stance, backed  by 
appropriate exchange 
rate  policy,  and  establish  more  efficient  monetary 
instruments with a view to improve the targeting of monetary aggregates. 

Liberalise  remaining  prices  and  remove  administrative  controls.  In  particular 
adjust  energy  prices  towards  cost  recovery  levels,  also gradually replacing all 
existing price subsidies to poor consumers by direct transfers. 

Speed up the restructuring, privatisation and/or liquidation of large socially- and 
state- owned enterprises.  Accelerate  also  the  restructuring,  of  large  publicly-
owned utilities (electricity,  oil  and  gas,  railway,  airline,  telecommunications  etc.). 
Continue banking sector reform more vigorously and in particular the preparation of 
privatisation in Serbia of the majority of the state-owned banks. Ensure allocation of 
sufficient budgetary resources for redundancy and restructuring costs. 

Develop a stable and functioning land/real estate market. Prepare legislation on 
cadastre. 

Employment Policy 

In  both  republics:  develop  and  implement  a  comprehensive  strategy  to  promote 
employment  and  combat  unemployment,  in  particular  with  regard  to  vocational 
training  and  labour  market  reforms,  involving  all  relevant  actors;  improve  public 

9 

 
 
  
 
employment  services  and  allocate  sufficient  staff  and  financial  resources  to  the 
implementation. 

• 

Develop  reliable  statistics.  Revise  and  adopt  the  master  plan  on  statistics  with  a 
view  to  ensure  a  clear  allocation  of  responsibilities  among  the  three  Statistical 
Offices at State Union level and the republican level and an effective co-ordination 
among  them.  Adopt  the  laws  on  statistics  at  the  State  Union  level  and  in  both 
republics. 

MANAGEMENT OF PUBLIC FINANCES 

• 

• 

• 

• 

Continue  to  formalise  the  grey  economy  and  broaden  the  tax  base 
through implementation of Public Expenditure Management System (treasury, public 
internal  financial  control)  and  comprehensive  tax  reforms,  with  fewer  exemptions 
and lower rates in particular on labour and improved implementation of tax laws.  

In particular, in Serbia, adopt and implement the tax reform package, including the 
adoption  of  VAT  and  necessary  related  IT  systems.  Continue  to  strengthen  and 
modernise the Public Revenue Agency, focussing on revenue collection and control 
in order to reduce tax fraud.  

In  Montenegro,  start  reviewing  the  present  tax  legislation  and  the  administrative 
procedures  in  order  to  ensure  effective  and  non-discriminatory  enforcement  of  tax 
legislation. Strengthen the administrative capacity of the tax legislation to effectively 
collect and control fiscal revenues, in particular VAT.  

For both republics, the legislation and implementation of VAT throughout the State 
Union should be harmonised in order not to lead to obstacles to the functioning of the 
internal market. 

EUROPEAN STANDARDS 

INTERNAL MARKET AND TRADE 

• 

• 

• 

• 

• 

Complete  and  fully  implement  all  elements  of  the  Internal  Market  /  Trade 
Action  Plan.  In  particular,  urgent  attention  should  be  given  to  the  definition  of 
common  tariffs  for  all  products  and  harmonise  all  additional  import  levies  and 
charges, in line with the respective tariff harmonisation schedule. 

Abolish all import levies and additional charges that were introduced in violation of 
the standstill clause enshrined in the EU’s autonomous trade preferences. 

Abolish the import licensing system for steel and iron products that was introduced 
in  violation  of  the  standstill  clause  enshrined  in  the  EU’s  autonomous  trade 
preferences. Abolish export duties on ferrous and non-ferrous metals and raw hide. 

Ensure  the  necessary  institutional  set-up  for  the  state  to  act  as  a  single 
trade/customs  interlocutor  internationally,  especially  by  strengthening  the  Joint 
Customs  Office,  the  veterinary/phyto-sanitary  Liaison  Offices  and  the  Statistical 
Office, and by granting these institutions the necessary powers. 

Continue  to  modernise  the  customs  administrations  in  order  to  ensure  the 
development  of  a  high  level  of  administrative  capacity.  Strengthen  administrative 

10 

 
 
  
 
cooperation  and  ensure  continuous  observance  of  obligations  related  to  the 
implementation of preferential trade measures (origin).  

Dismantle  existing  and  avoid  new  obstacles  to  the  state’s  internal  market  as 
provided in the Constitutional Charter. Ensure state-wide market access for domestic 
and  foreign  operators  regarding  goods,  services,  capital  and  persons.  Ensure 
legislative  consultation  and  apply  the  principle  of  mutual  recognition  of  all 
republican decisions on market access. 

Implement  a  consistent  and  effective  public  procurement  regime  in  Serbia  and 
Montenegro.  Ensure  transparent  procedures,  regardless  of  the  value  of  the  contract 
concerned, and non-discrimination between Serbian and Montenegrin suppliers. 

Install  a  direct  link  between  business  registers  to  safeguard  free  state-wide 
establishment.  In  Serbia,  adopt  the  Law  transferring  the  business  register  from  the 
Commercial Courts to an independent agency. 

Ensure  a  state-wide  anti-trust  regime,  applicable  to  all  anti-competitive  effects 
both within and between the republics, as well as to effects on bilateral trade with the 
EU. Ensure the administrative capacity for the efficient and independent enforcement 
of these rules, including the strengthening of the Joint Competition Commission on 
state-level.  Establish  State  aid  coordination  points  and  create  full  State  aid 
transparency, as a first step towards State aid control. Ensure  a coherent  horizontal 
approach to promote competition policy. 

Strengthen  the  protection  of  Intellectual  Property  Rights  by  adopting  a  set  of 
revised  Laws.  Ensure  harmonised  penal  provisions  and  strengthen  implementation 
capacity in this field, notably in border services. 

Implement  a  system  of  corresponding  accounts  in  commercial  banks  to  ensure  the 
free movement of capital between the republics. 

• 

• 

• 

• 

• 

• 

SECTOR POLICIES 

• 

Agriculture: 

In  Serbia:  Adopt  Food  Safety  legislation  and  strengthen  food  safety  laboratories; 
adopt legislation on veterinary matters and strengthen controls. Establish Food-Chain 
Laboratories Agency. 

In  Montenegro:  Adopt  Law  on  Veterinary  Matters  (including  fishery  products)  and 
establish the veterinary and phyto sanitary laboratories, including for fish and wine; 
strengthen controls. 

• 

Transport: 

In  Serbia:  Adopt  law  on  Railways.  Begin  development  of  a  national  transport 
strategy, including economic viability of the sector. 

In  Montenegro:  Adopt  and  start  implementing  the  road  transport  law  (including 
establishment of the relevant implementation structures) and adopt the Law on Rail 
Transport. 

11 

 
 
  
 
• 

Energy: 

In Serbia: Adopt the Energy Law and establish the independent Energy Regulatory 
Agency, continue environmental audits on energy plants and address worst polluters. 

In  Montenegro:  Prepare  and  adopt  the  energy  development  strategy,  also  covering 
energy efficiency strategy; strengthen the administrative capacity of the Ministry of 
Economy as regards energy; unbundle and restructure the electric power utility. 

• 

Industry and SMEs:  

In  both  republics:  Continue  implementing  the  European  Charter  for  Small 
Enterprises. 

In Serbia: Adopt the amended bankruptcy law. 

In  Montenegro:  Transform  and  rationalise  the  institutions  involved  in  restructuring 
and  privatisation  of  enterprises,  notably,  the  Development  Fund.  Establish  an 
autonomous  investment  promotion  agency.  Continue  implementation  of  the  newly 
established national guarantee fund. 

• 

Telecommunications: 

In  both  republics:  Ensure  that  the  electronic  communications  sector  is  liberalised 
effectively  including  the  strengthening  of  regulatory  bodies  and  the  adoption  of 
suitable laws and policies for the sector.  

• 

Environment: 

In Serbia: Adopt a Law on Environment Protection and set-up and operationalise the 
Environment Protection Agency. 

In Montenegro: Adoption of the strategy on waste water and solid waste with a view 
to approximating with EU acquis. 

CO-OPERATION IN JUSTICE AND HOME AFFAIRS 

• 

Law enforcement reform: Improve judicial and law enforcement co-operation both 
within each republic and between republics. Full implementation of Memorandum on 
Cooperation, signed between Republican Ministries of Interior in December 2003. 

In  Serbia:  Adopt  law  on  Police  in  order  to  improve  professionalism  and 
accountability. Implement a revision of the laws on the organisation of the judiciary 
(Law  on  Courts,  Law  on  Judges,  Law  on  Prosecutors,  and  Law  on  High  Judicial 
Council) and on Criminal legislation (Criminal Procedure Code, Criminal Code and 
Law on Enforcement of Criminal Sanctions), as provided for in the protocol on co-
operation with the Council of Europe. 

In Montenegro: Adopt Laws on Police and State Security to ensure professionalism 
and accountability. 

12 

 
 
  
 
• 

• 

• 

Border  Management:  develop  a  state-level  approach  and  mechanisms  and  ensure 
consistent  implementation  at  the  republican  level  in  line  with  the  Memorandum  of 
Understanding. As a follow-up to the Ohrid regional Conference on border security 
and management in May 2003, start implementation of the short term measures that 
were  adopted  by  the  Government  and  presented  at  the  meeting  of  JHA  ministers 
within the framework of the EU-Western Balkans Forum on 28 November 2003. 

In Serbia: Take further steps to implement best practices concerning Border Police, 
in  line  with  European  Standards;  proceed  in  co-ordination  with  the  State  level 
authorities with demilitarisation of the border control. 

In Montenegro: Strengthen civilian control of borders (including training, equipment 
compatible with Schengen). 

Fight  organised  crime,  trafficking,  drugs  and  money  laundering,  terrorism: 
Strengthen  inter  agency  co-operation  within  the  republic  and  formalise  inter 
republican  co-operation.  Develop  the  capacity  to  seize  assets.  Strengthen  criminal 
intelligence.  Start  implementing  the  specific  action  oriented  measures  that  were 
agreed at the JHA ministerial meeting in November 2003. Take the necessary steps 
to  prepare  for  the  conclusion  of  a  co-operation  agreement  with  Europol.  Increase 
capacity to fight against drug trafficking and develop a national drugs strategy in line 
with  the  EU  Drugs  Strategy  and  Action  Plan  on  Drugs.  Strengthen  fight  against 
trafficking  of  human  beings,  including  by  providing  adequate  assistance  and 
protection  to  the  victims.  In  particular  in  Montenegro:  Implement  anti-money 
laundering law notably by setting up financial investigation unit.  

Increase international cooperation and implement relevant international conventions 
on terrorism; improve cooperation and exchange of information between police and 
intelligence services within the State and with other States; prevent the financing and 
preparation of acts of terrorism. 

Visa,  asylum  and  migration:  Develop  a  unified  state-level  approach  to  issues 
related to visa, asylum and migration in line with the Constitutional Charter, notably 
with  the  complete  harmonisation  of  visa  regimes  as  applied  in  the  republics,  the 
adoption  of  the  Asylum  Law  and  the  further  conclusion  and  implementation  of 
readmission agreements. Put in place the mechanisms to monitor the implementation 
of  policies  in  the  areas  of  asylum,  migration  and  visa  which  are  elaborated  at  the 
state level but which are implemented at the republican level. In particular for both 
republics,  full  participation  in  the  co-ordination  mechanisms  for  the  adoption  and 
implementation of the relevant state level policies. 

MEDIUM-TERM PRIORITIES 

POLITICAL SITUATION 

DEMOCRACY AND RULE OF LAW 

• 

Continue  process  of  restructuring  of  the  armed  forces,  including  as  appropriate 
military conversion and downsizing (taking into account the social impact). 

13 

 
 
  
 
 
• 

Continue Public Administration Reform: 

Further  develop  the  European  Integration  structures,  notably  by  strengthening  the 
European  Integration  Offices,  establishing  smooth  cooperation  mechanisms  as  well 
as European Integration Units in the line of Ministries of State and Republican level. 

At the State level: Ensure appropriate administrative capacity to adequately perform 
the State competences and that a reform strategy for the State Public Administration 
is developed and implemented, including the necessary legislative basis. 

In  Serbia:  Adopt  civil  service  and  Public  Administration  Laws.  Implement  civil 
service human resources development measures. Strengthen capacity (policy making 
and  inter-ministerial  coordination)  of  the  public  administration  at  government  and 
local  levels,  notably  by  establishing  a  centralised  payroll  system.  Strengthen  the 
economic  policymaking  process,  e.g.  through  continued  support  to  strengthen  the 
statistical services and the creation of a medium term economic planning unit. 

In Montenegro: Implement the law on civil service and set up the agency for human 
resources  management  (which  needs  to  become  sustainable).  Develop  training  and 
recruitment policy. Strengthen policy making process, e.g. through continued support 
to  strengthen  the  statistical  services  and  the  creation  of  a  medium  term  economic 
planning unit. 

• 

Parliament: 

In Serbia: Develop and implement a reform strategy for the Parliament  to bring its 
working  standards  and  resources  to  a  level  at  which  it  can  act  as  an  effective 
institution. 

• 

Promote local government: 

In Serbia: Adopt and implement decentralisation reform  and ensure sufficient local 
capacities  to  deal  with,  among  others,  administrative  and  financial  issues  and 
forthcoming regional programmes. 

In  Montenegro:  Implement  law  on  local  government,  notably  by  establishing  the 
equalisation fund. 

• 

Continue the judicial reform: 

In Serbia: Ensure full legal and practical safeguards for independence and efficiency 
of the courts, including the reform of the current system of appointment procedure; 
implement  legislation  on  mandatory  training  and  ensure  budgetary  sustainability  of 
the Judicial Training Centre; create an IT network for prosecutors at all levels; ensure 
enforcement of court decisions. Develop the capacity to try war crimes domestically 
in full compliance with international obligations as to cooperation with ICTY. Set up 
appellate and administrative courts. 

In Montenegro: Ensure mandatory training of judges, through revision of the law on 
courts and budgetary sustainability of the Judicial Training Centre. Implement the IT 
strategy for the judiciary. 

14 

 
 
  
 
• 

Prison conditions: 

In  Serbia:  Improve  prison  conditions  in  line  with  Council  of  Europe  standards,  in 
particular  as  regards  vulnerable  groups  such  as  juvenile  offenders;  ensure  further 
training of penitentiary staff and improvement of facilities. 

In Montenegro: Further training of penitentiary staff and improvement of facilities. 

• 

Fight against corruption: 

In both republics: Adopt and implement a comprehensive anti-corruption strategy. 

HUMAN RIGHTS AND THE PROTECTION OF MINORITIES 

• 

• 

• 

• 

Council of Europe obligations. Put in place the necessary mechanisms to monitor 
and  ensure  a  coherent  and  consistent  implementation  of  all  Council  of  Europe 
obligations as provided for under the accession commitments. 

Equality: Adopt/implement anti-discrimination legislation. 

Freedom of expression: 

In  Serbia:  Transform  Radio  Television  Serbia  into  a  public  service  broadcaster. 
Support  development  of  media 
line  with  European  standards.  Foster 
professionalism of journalists and media operators. 

in 

In Montenegro: Continue the transformation of Radio Television Montenegro into a 
public  service  broadcaster;  support  development  of  media  in  line  with  European 
standards. Foster professionalism of journalists and media operators. 

Refugees, displaced persons and minorities: In both republics: ensure full respect 
of their human rights, including access to health services, and easy access to personal 
documents; ensure right of a real choice between sustainable return and integration; 
facilitate  integration  for  those  who  choose  not  to  return.  In  Serbia:  Adopt  new 
legislation on refugees; continue to implement the National strategy.  

REGIONAL AND INTERNATIONAL CO-OPERATION 

• 

improve  regional  co-operation.  Further  deepen 

Further 
trade 
liberalisation on the basis of the Free Trade Agreements in force. With regard to the 
Athens process on the Regional Energy Market in South East Europe, prepare Serbia 
and  Montenegro  for  the  establishment  in  2005  of  an  integrated  regional  energy 
market.  Continue  to  implement  the  Memorandum  of  Understanding  on  the 
Development of the South East Europe Core Regional Transport Network.  

regional 

ECONOMIC SITUATION 

MARKET ECONOMY AND STRUCTURAL REFORMS 

• 

Continue  sustainable  macroeconomic  policies:  Continue  fiscal  adjustment  and 
consolidation  to  reduce  relatively  high  fiscal  and  in  particular  external  imbalances. 
Take  account  of  the  inevitable  costs  of structural  reforms and  rising  interest 
payments, clearly prioritise public spending in short and medium term budgeting; in 

15 

 
 
  
 
particular  reduce  subsidies,  transfers  and  the  civil  service  wage  bill.  Continuously 
reduce overall public spending as a share of GDP and complement prudent monetary 
policy  with  careful exchange  rate  policies.  In  Serbia:  Reform  the  health  system,  in 
particular, the health insurance fund, with a view to ensure its financial sustainability 
and with a view to improve health protection and the health of the population. 

Complete the privatisation process and financial (bank) restructuring. 

Strengthen  a  business  environment  conducive  to  private  sector  development  and 
employment  with  competitive  markets,  level  playing  fields  and  access  to  finance 
through financial sector development. 

Achieve a stable and functioning land/real estate market. Adopt and  implement 
legislation  on  cadastre.  Start  land  reform,  restructuring  and  privatisation  of  large 
farms. 

• 

• 

• 

MANAGEMENT OF PUBLIC FINANCES 

• 

• 

• 

Improve  the  budget  process  and  financial  management:  Strengthen  capacity 
building  for  budget  preparation  and  execution  to  enable  prioritisation.  Improve 
financial management at central and local government level. Adopt the Law on the 
Supreme Audit Institution.  

Establish effective procedures for the detection, treatment and follow-up of cases of 
suspected fraud and other irregularities affecting national and international funds. 

Continue reviewing the fiscal legislation and the administrative procedures in order 
to  ensure  effective  and  non-discriminatory  enforcement  of  the  tax  legislation. 
Continue strengthening the administrative capacity of the Tax Administrations. 

EUROPEAN STANDARDS 

INTERNAL MARKET AND TRADE 

• 

• 

Fully  establish  a  single  external  trade  regime  under  the  Internal  Market  /  Trade 
Action Plan. Enforce common tariffs, levies and charges for all products after the end 
of the transition periods foreseen. 

Ensure the full implementation of the customs reform plan to secure a high degree 
of administrative capacity. 

SECTOR POLICIES 

• 

Industry and SMEs: 

In Serbia: Implement the European Charter for SMEs. Rationalise complex Chamber 
of  Commerce  organisation.  Make  arrangements  to  facilitate  NGO  micro  credit 
facilities.  

In  Montenegro:  Implement  the  European  Charter  for  SMEs.  Proceed  with  the 
development  and  establishment  of  a  national  guarantee  fund.  Further  develop 
dialogue  between  government  and  private  sector,  including  through  the  SME 
Agency, by establishing a formal forum for consultation and business advocacy.  

16 

 
 
  
 
• 

• 

Telecommunications: 

Transpose and implement the new EU framework for electronic communications.  

Agriculture: 

In  Serbia:  Further  build  administrative  capacity  for  policy  formulation  and 
implementation. Design and start implementing a rural development policy. Continue 
strengthening  veterinary,  sanitary,  phyto-sanitary  and  food-safety  legislation  and 
controls,  including  wine  laboratories.  Improve  waste  management  and  reduce 
agricultural pollution. 

In  Montenegro:  Adopt  an  overall  strategy  covering  agriculture,  rural  development, 
fisheries,  phyto-veterinary  matters.  Increase  capacity  building  of  the  Ministry  of 
Agriculture. Adopt the law on phytosanitary matters. 

• 

Transport: 

In Serbia: Adopt and implement a transport policy strategy (road, rail, aviation and 
waterways).  Strengthen  capacity  building,  including  project  preparation  for  large 
investments.  Earmark  sufficient  resources  for  the  maintenance  of  transport 
infrastructures and institutions. 

In  Montenegro:  Earmark  sufficient  resources  for  the  maintenance  of  transport 
infrastructures and institutions. 

• 

Energy: 

In  Serbia:  Ensure  unbundling  in  view  of  restructuring  and  privatisation.  Set  up  the 
necessary  institutional  structures:  Transmission  System  Operator,  Market  Operator, 
and  Energy  Regulatory  Agency.  Progress  towards  a  regional  energy  market 
(including through feasibility studies on interconnectivity). 

In  Montenegro:  Strengthen  the  energy  regulator.  Complete  restructuring  and 
liberalisation  of  the  internal  energy  market;  Privatise  and/or  allow  development  of 
public/private partnerships in the sector. 

• 

Environment: 

In  both  republics:  Adopt  and  implement  legislation  on  environmental  impact 
assessment in line with the EU acquis. 

In Serbia: Adopt and start implementing a strategy on pollution of air (notably from 
power plants), water (waste water) and soil (solid waste); Strengthen administrative 
capacity  notably  as  regards  planning,  permitting,  inspecting,  monitoring,  as  well  as 
project  management.  Develop  a  multi-annual plan  for  financing  investments,  based 
on estimations of costs and realistic sources of public and private funding. 

In Montenegro: Develop an overall environmental strategy (waste water, solid water, 
air)  with  a  view 
legislation 
approximating with the EU acquis and set up an environment protection agency. 

to  adopt  environmental  protection  framework 

17 

 
 
  
 
CO-OPERATION IN JUSTICE AND HOME AFFAIRS 

• 

• 

Continue restructuring the police: ensure accountability; reform police education; 
ensure co-operation among law enforcement agencies. 

Border management: 

In  both  republics:  On  the  basis  of  state  level  policy,  develop  the  technical 
infrastructure  and  human  resource  capacities  to  implement  the  Integrated  Border 
Management  policy  including  strengthening  the  border  police  and  the  customs 
services. Improve cross-border facilitations through new border posts. 

• 

Fight against organised crime, trafficking, drugs and money laundering: 

In  both  republics:  Develop  an  effective  system  of  witness  protection  which 
incorporates  republican  but  also  regional  elements.  Reinforce  the  fight  against 
economic  and  financial  crime  (including  money-laundering  and  counterfeiting  of 
currencies), fraud and corruption as well as improve the related national legislation 

In  Serbia:  Strengthen  capacity  building  at  the  Ministry  of  Interior  (notably 
directorate  for  organised  crime)  Develop  procedures  and  the  capacity  to  share 
intelligence  between  agencies.  Develop  an  effective  system  of  witness  protection 
which  incorporates  republican  but  also  regional  elements.  Set-up  Financial 
Investigation Unit in the Ministry of Finance. 

In Montenegro: Increase administrative and judicial  capacity to implement the new 
criminal  code  as  regards  organised  crime.  Strengthen  the  Unit  for  fight  against 
organised  crime  at  the  Ministry  of  Interior  and  ensure  co-ordination  of  all  the 
enforcement bodies.  

18 

 
 
  
 
KOSOVO 

as defined by United Nations Security Council Resolution 1244  

SHORT-TERM PRIORITIES  

GENERAL PRIORITY 

–  In order to ensure a stable future for a secure, democratic and multi-ethnic Kosovo, 
make  substantial  progress  in  achieving  the  Standards  for  Kosovo,  which  were 
presented by the UN Special Representative of the Secretary General and representatives 
of the Provisional Institutions of Self Government in December 2003 and endorsed by the 
UN  Security  Council.  In  particular,  carry  out  the  concrete  actions  set  in  the  Kosovo 
Standards Implementation Plan covering :  

•  Functioning of democratic institutions;  

•  Rule of law;  

•  Freedom of movement;  

•  Sustainable returns and rights of communities and their members;  

•  Economy;  

•  Property rights;  

•  Dialogue with Belgrade; 

•  Kosovo Protection Corps. 

In addition to the above general priority, the following complementary priorities need to be 
addressed: 

POLITICAL SITUATION 

DEMOCRACY AND RULE OF LAW 

–  The  Provisional  Institutions  of  Self  Government  must  take  all  necessary  steps  as 
required  by  the  United  Nations  Interim  Administration  in  Kosovo  to  overcome  the 
consequences and address the  causes of the March 2004 events, notably by explicitly 
condemning  violence  against  minority  communities,  fully  co-operating  with  UNMIK-
KFOR  to  bring  those  responsible  to  justice,  encouraging  witnesses,  restoring  and 
rebuilding properties and allowing return of displaced persons. 

–  EU compatibility: Develop the EU orientation of the Kosovo Government policy-making 
by  institutionalising  within  the  Prime  Minister  Office  the  mechanism  for  effective 
verification  of  EU  consistency  of  government  policies  and  draft  laws;  developing  at  the 
ministerial level and the Assembly of Kosovo capacity to ensure EU compatibility.  

19 

 
 
  
 
 
–  Fight against corruption: Improve cooperation between UNMIK and PISG effectively to 
implement  the  “zero  tolerance”  policy  against  corruption,  notably  by  providing  all 
necessary  support  to  the  investigations  undertaken  by  OLAF  and  OIOS  (the  UN  internal 
audit service). 

REGIONAL AND INTERNATIONAL CO-OPERATION 

•  Ensure full co-operation with ICTY 

–  Effectively  participate  in  the  Working  Groups  established  in  the  context  of  Pristina-
Belgrade dialogue on practical issues of common interests, which is part of the Standards 
for Kosovo. 

–  Enhance  regional  co-operation.  Further  integration  into  the  regional  network  of  Free 
Trade Agreements under the Stability Pact MOU on Trade Liberalisation and Facilitation 
in  South  Eastern  Europe,  in  compliance  with  UNSCR  1244.  Start  implementing  the 
Memorandum  of  Understanding  on  the  Development  of  the  South  East  Europe  Core 
Regional  Transport  Network  and  in  particular  take  measures  to  set  up  the  cooperation 
mechanisms,  inter  alia,  the  Steering  Committee  and  the  South  East  Europe  Transport 
Observatory.  Make  progress  in  meeting  commitments  under  the  2002  and  2003 
Memoranda of the Athens process on the Regional Energy Market in South East Europe.  

ECONOMIC SITUATION 

MARKET ECONOMY AND STRUCTURAL REFORMS 

–  Define the macro-economic priorities for Kosovo in close co-operation with IMF. 

–  Revitalise the privatisation process to support economic development. 

MANAGEMENT OF PUBLIC FINANCES 

–  Develop technical support systems and procedures to ensure transparency, efficiency, and 

better control of public spending. 

–  Establish  effective  procedures  for  the  detection,  treatment  and  follow-up  of  cases  of 

suspected fraud and other irregularities affecting national and international funds. 

EUROPEAN STANDARDS 

INTERNAL MARKET AND TRADE 

–  Continue development of a legislative and policy framework for trade and trade-related 
policies, ensuring EU- and WTO-compatibility. Fully implement the new Customs Code. 
Adopt a Domestic Trade Law and a Law on Trade Inspection. 

SECTOR POLICIES 

–  Environment:  

Prepare  a  comprehensive  environmental  action  plan,  particularly  relating  to  public  health 
issues, with a view to approximating with the EU acquis. 

20 

 
 
  
 
Adopt  and  implement  legislation  on  environmental  impact  assessment  in  line  with  the  EU 
acquis. 

–  Transport  

Prepare  and  adopt  a  transport  policy  framework  on  transport  including  the  gradual 
development of a multi-modal transport strategy.  

Develop  the  civil  operator  of  Pristina  Airport,  its  staff  and  facilities,  to  ensure  an  adequate 
level of security and sound and accountable management. 

–  Energy  

Establish  effective  and  functioning  governance  structures  in  the  energy  sector  to  ensure  the 
viability  and  sustainability  of  Kosovo  electricity  company  (KEK)  notably  by  substantially 
increasing revenue collection. 

CO-OPERATION IN JUSTICE AND HOME AFFAIRS 

–  Implement the new Criminal and Criminal Procedure Codes.  

MEDIUM-TERM PRIORITIES 

POLITICAL SITUATION 

DEMOCRACY AND RULE OF LAW 

–  Improve EU compatibility: Strengthen the capacity of all Kosovo institutions to enact and 
effectively  enforce  EU  compatible  policies  and  legislation,  notably  by  reinforcing  the 
structures dealing with European integration in the context of the SAP. 

–  Strengthen public administration reform: Implement a Public Administration reform in 
order  to  streamline  public  administration  and  build  a  professional  and  accountable  civil 
service  able  to  attract  and  retain  qualified  staff.  Improve  the  capacity  of  local 
administration  to  provide  services  to  their  constituencies  in  an  equitable  and  effective 
manner. 

–  Reinforce  judicial  reform:  Strengthen  the  judiciary  and  law  enforcement  agencies, 
notably  by  improving  infrastructure,  equipment  and  training.  Transform  the  Kosovo 
Judicial Institute into a viable future institution responsible for judicial training. Ensure the 
viability of a comprehensive legal aid system for Kosovo. Improve the penitentiary system 
with particular attention to management, vocational training and reintegration schemes.  

–  Fight  against  corruption:  Implement  a  comprehensive  anti-corruption  strategy 
comprising prevention measures and an effective investigation and prosecution, notably by 
strengthening local capacity, in line with Council of Europe standards. 

HUMAN RIGHTS AND PROTECTION OF MINORITIES 

–  Ombudsman:  Ensure  the  viability  and  the  continued  independence  of  the  Ombudsman 

institution in Kosovo. 

21 

 
 
  
 
 
–  Further  develop  freedom  of  expression:  Ensure  the  long-term  viability  of  the  public 
broadcaster  and  its  capacity  to  perform  its  role  as  a  public  service  broadcaster  to  all 
communities. 

–  Improve protection of minorities: Ensure the viability of minority communities and their 
non-discriminatory participation in Kosovo society, notably by establishing the necessary 
framework to ensure the equitable provision of public utilities and universal services. 

ECONOMIC SITUATION 

MARKET ECONOMY AND STRUCTURAL REFORMS 

–  Ensure viability of a borrowing and debt management capacity. 

–  Develop guarantee mechanisms for political risk to attract foreign investment. 

–  Further  develop  the  regulatory  framework  for  public  utilities  with  regard  to  EU  and 
international  standards,  notably  by  adopting  and  implementing  subsidiary  legislation, 
procedures and guidelines. Strengthen the administrative capacity of the regulators. Ensure 
that regulators have suitable local staff and develop their professional skills and technical 
equipment to discharge their functions.  

–  Develop  the  capacity  of  the  banking  sector  to  provide  long-term  financing  to  the 

economy.  

–  Develop  a  social  policy  to  promote  employment  and  social  cohesion,  to  address  poverty 
and  social  exclusion,  to  further  improve  social  standards  and  to  develop  effective  social 
protection systems. 

–  Increase efforts to ensure the compatibility of the statistical system with EU standards.  

MANAGEMENT OF PUBLIC FINANCES 

–  Develop  capacity  of  the  Tax  Administration  in  order  to  increase  non-customs  revenue 
(direct  and  indirect  taxation)  through  the  progressive  development  of  a  taxation  system 
based  on  EU  standards.  Start  reviewing  the  present  tax  legislation  and  elaborate  and 
implement  a  realistic  action  plan  in  order  to  progressively  strengthen  the  administrative 
capacity of the Tax Administration. 

–  Ensure  viability  of  the  budget  cycle  notably  by  capacity  building  for  budget  preparation 
and execution. Develop the capacity of the Assembly of Kosovo to effectively participate 
in  the  public  finance  process.  Ensure  smooth  spending  across  the  financial  year  and  the 
“carry-over” principle for unspent funds. 

EUROPEAN STANDARDS 

INTERNAL MARKET AND TRADE 

–  Continue gradual alignment of Kosovo's legislation with all aspects of the EU's company 

law acquis. 

22 

 
 
  
 
SECTOR POLICIES 

–  Agriculture:  

Develop  a  regulatory  framework  and  appropriate  mechanisms  to  ensure  food  safety  and 
improved  phyto-sanitary  controls  in  line  with  relevant  EU  standards,  also  to  improve 
Kosovo’s  export  opportunities.  Develop  a  policy  and  a  regulatory  framework  to  support 
viable  land  reform.  Support  the  protection  of  agricultural  land  against  unplanned  urban 
development. 

–  Environment:  

Adopt  and  implement  the  environmental  action  plan  with  a  view  to  approximating  with  the 
EU acquis. 

–  Transport 

Implement a transport policy framework on transport including the gradual development of a 
multi-modal transport strategy. 

–  Energy: 

Develop  policy  framework  for  public-private  partnerships  and  mixed  investments  in  the 
energy sector. 

CO-OPERATION IN JUSTICE AND HOME AFFAIRS 

–  Strengthen  cooperation  between  border/boundaries  management  agencies  and  strengthen 
capacity  for  implementation  of  veterinary  and  sanitary  and  phytosanitary  standards  as  a 
part of the integrated border management system. 

23