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(2005) 1423} {SEC(2005) 1428}
Date: 2005-11-09
Institutions: European Commission
Subjects: Kosovo, Serbia and Montenegro, accession criteria, accession to the European Union, association agreement (EU), cooperation agreement, economic policy, economic stabilisation, political situation, rule of law

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 9.11.2005 
COM(2005) 558 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(2005) 1423} 
{SEC(2005) 1428} 

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EXPLANATORY MEMORANDUM 

In Thessaloniki, the European Council of 19 and 20 June 2003 reiterated its determination to 
fully  and  effectively  support  the  European  perspective  of  the  Western  Balkan  countries.  It 
endorsed  the  Council’s  Conclusions  of  16  June  2003  on  the  Western  Balkan  countries 
including  the  annex  “The  Thessaloniki  Agenda  for  the  Western  Balkans:  moving  towards 
European integration”, which introduced the European Partnerships as a means to materialise 
the European perspective of the Western Balkan countries.  

In  early  2004,  the  Commission  presented  its  first  Partnership  with  Serbia  and  Montenegro 
including Kosovo as defined by the United Nations Security Council Resolution 1244 of 10 
June  1999.  It  was  adopted  by  the  Council  on  14  June  2004.  The  Commission  considers  it 
appropriate  to  update  this  first  Partnership  on  the  basis  of  its  findings  in  the  2005  Progress 
Report on Serbia and Montenegro.  

This renewed European Partnership is based on the provisions of Council Regulation (EC) No 
533/2004  of  22  March  2004.  It  lists  short-  and  medium-term  priorities  for  the  country’s 
preparations  for  further  integration  with  the  European  Union.  In  order  to  respond  to  the 
European Partnership, it is expected that the competent authorities in Serbia and Montenegro 
will develop a plan with a timetable and specified 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 
concerning  Kosovo  should  be  developed  under  the  authority  of  the  United  Nations  Interim 
Administration  in  Kosovo.  The  progress  in  implementing  the  priorities  will  be  monitored 
regularly by the Commission, through the Progress Reports and through the structures set up 
under the Stabilisation and Association Process. 

The  European  Partnership  priorities  should  form  the  basis  for  programming  the  financial 
assistance  of  the  Community,  which  will  continue  to  be  provided  under  relevant  financial 
instruments,  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 draft Council decision.  

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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  533/2004  on  the  establishment  of  European 
Partnerships in the framework of the Stabilisation and Association Process and in particular to 
Article 2 thereof1, 

Having regard to the proposal from the Commission, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

(5) 

The  European  Council  endorsed  the  introduction  of  the  European  Partnerships  as  a 
means to materialise the European perspective of the Western Balkan countries within 
the framework of the Stabilisation and Association Process. 

Council Regulation (EC) No 533/2004 sets out in its Article 2 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  533/2004  also  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  and  through  the 
Commission’s Progress Reports. 

It is appropriate to update the first European Partnership in order to identify renewed 
priorities  for  further  work  on  the  basis  of  the  findings  of  2005  Progress  Reports  on 
preparations  made  by  Serbia  and  Montenegro  and  Kosovo  as  defined  by  the  United 
Nations  Security  Council  Resolution  1244  of  10  June  1999  (referred  to  as  Kosovo 
(UNSCR 1244)) for further integration with the European Union.  

In  order  to  prepare  for  further  integration  with  the  European  Union,  the  competent 
authorities  in  Serbia  and  Montenegro  should  develop  a  plan  with  a  timetable  and 
specific measures to address the priorities of this European Partnership. As Kosovo is 
at  present  under  international  interim  administration  pursuant  to  UNSCR 1244,  a 

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OJ L 86, 24.3.2004, p. 1. 

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separate plan addressing the priorities 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  533/2004,  the  principles, 
priorities and conditions in the European Partnership with Serbia and Montenegro including 
Kosovo (UNSCR 1244) are set out in the annex hereto, which forms an integral part of this 
Decision. 

Article 2 

The implementation of the European Partnership shall be examined through the framework of 
the mechanisms established under the Stabilisation and Association Process and through the 
Commission’s Progress Reports.  

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 

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SERBIA AND MONTENEGRO, INCLUDING KOSOVO: 2005 EUROPEAN PARTNERSHIP 

ANNEX  

1. 

INTRODUCTION 

The  European  Council  endorsed  the  introduction  of  the  European  Partnerships  as  a  means  to 
materialise  the  European  perspective  of  the  Western  Balkan  countries  within  the  framework  of  the 
Stabilisation and Association Process.  

The first Partnership with Serbia and Montenegro including Kosovo (UNSCR 1244) was adopted by 
the Council on 14 June 2004. It is appropriate to update this first partnership on the basis the findings 
of the 2005 Commission’s Progress Reports on Serbia and Montenegro and Kosovo (UNSCR 1244). 
The second European Partnership identifies new priorities for action. The new priorities are adapted to 
the  specific  needs  and  stage  of  preparation  and  will  be  updated  as  necessary.  The  European 
Partnership  also  provides  guidance  for  financial  assistance  to  Serbia  and  Montenegro  including 
Kosovo (UNSCR 1244).  

It  is  expected  that  the  competent  authorities  in  Serbia  and  Montenegro  develop  a  plan  including  a 
timetable and specific measures to address the European Partnership priorities. As Kosovo is at present 
under 
to  United  Nations  Security  Council 
Resolution 1244,  a  separate  plan  addressing  the  priorities  concerning  Kosovo  should  be  developed 
under the authority of the United Nations Interim Administration in Kosovo. 

interim  administration  pursuant 

international 

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  relate  to  its  capacity  to  meet  the  criteria  defined  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 and 22 June 1999, 
the content of the final declaration of the Zagreb Summit of 24 November 2000 and the Thessaloniki 
Agenda. 

3. 

PRIORITIES 

The priorities listed in this European Partnership have been selected on the basis that it is realistic to 
expect that Serbia and Montenegro including Kosovo (UNSCR 1244) can complete them or take them 
substantially  forward  over  the  next  few  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. The priorities concern both legislation and the 
implementation thereof.  

Taking into account the substantial costs involved with meeting all the EU requirements as well as the 
complexity of these requirements in certain areas, this partnership does not include all important tasks 
at  this  stage.  Future  partnerships  will  include  further  priorities  in  line  with  progress  made  by  the 
country. 

Among  the  short  term  priorities,  the  key  priorities  have  been  identified  and  grouped  together  at  the 
beginning of the lists of priorities. The order of these key priorities does not imply a ranking in their 
importance. 

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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 under the existing financial instruments, in particular by Council Regulation 
(EC)  No  2666/20002.  Accordingly,  this  Decision  will  have  no  financial  implications.  Serbia  and 
Montenegro  including  Kosovo  (UNSCR  1244)  can  have  access  to  funding  from  multi-country  and 
horizontal programmes. 

5. 

CONDITIONALITY 

Community  assistance  under  the  Stabilisation  and  Association  Process  to  the  Western  Balkan 
countries is conditional on further progress in satisfying the Copenhagen criteria as well as progress in 
meeting the specific priorities of this European Partnership. Failure to respect these conditions could 
lead the Council to take appropriate measures on the basis of Article 5 of Council Regulation (EC) No 
2666/20003. 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  implementation  of  the  European  Partnership  shall  be  examined  through  the  framework  of  the 
mechanisms  established  under  the  Stabilisation  and Association  Process,  notably  the  annual  Reports 
presented by the Commission.  

2 
3 

OJ L 306, 7.12.2000, p. 1, as amended by Regulation (EC) No. 2415/2001 (OJ L 327, 12.12.2001, p. 3). 
Article 5 of Council Regulation (EC) No 2666/2000: 
"1. Respect for the principles of democracy and the rule of law and for human and minority rights and 
fundamental freedoms is an essential element for the application of this Regulation and a precondition 
of  eligibility  for  Community  assistance.  If  these  principles  are  not  respected,  the  Council,  acting  by 
qualified majority on a proposal from the Commission, may take appropriate measures.  
2.  Community  assistance  shall  also  be  subject  to  the  conditions  defined  by  the  Council  in  its 
Conclusions  of  29  April  1997,  in  particular  as  regards  the  recipients'  undertaking  to  carry  out 
democratic, economic and institutional reforms." 

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SERBIA AND MONTENEGRO4 

3.1. 

Short-term priorities  

Key Priorities 

–  Fully respect the Constitutional Charter and ensure the effective functioning of the State Union (in 
particular  with  regard  to  the  competences  of  the  State  Court,  the  functioning  of  the  State  Union 
Parliament and the adoption of legislation on the sustainable financing of the State Union); take a 
constructive approach in implementing the distribution of powers between the State Union and the 
Republics. 

–  Make further sustained efforts to implement the reform of the public administration, including the 
civil service pay system, to ensure transparent recruitment, professionalism and accountability; in 
particular strengthen the European integration structures at all levels (including with regard to line 
ministries and the parliaments) and improve cooperation among them.  

–  Pursue  with  determination 

independence, 
the 
professionalism  and  efficiency,  in  particular  review  the  system  of  recruitment  and  career  to  be 
based  on  technical  and  professional  criteria,  avoiding  political  influence,  and  secure  permanent 
tenure of judicial posts.  

the  reform  of 

to  guarantee 

judiciary 

its 

–  Ensure  effective  democratic  control  over  the  military  by  strengthening  parliamentary  control  and 

establishing a transparent financial management. 

–  Ensure full cooperation with International Criminal Tribunal for the former Yugoslavia (ICTY).  

–  Fully respect the UNSCR 1244 and intensify dialogue with Pristina. Show constructive approach 

with regard to Kosovo. 

Political Requirements 

DEMOCRACY AND THE RULE OF LAW 

Constitutional issues 

–  Revise the Constitutions of the Republics in line with European standards.  

Elections  

–  In  Serbia:  Complete  the  reform  of  the  electoral  law  reform  (including  electoral  register),  in  line 
with  the  recommendations  of  the  Office  for  Democratic  Institutions  and  Human  Rights;  fully 
implement legislation on financing of political parties.  

–  In  Montenegro:  De-politicise  election  administration  in  line  with  the  recommendations  of  Office 
for  Democratic  Institutions  and  Human  Rights  and  set  up  a  transparent  framework  for  campaign 
financing. 

Public administration 

–  In Serbia: Implement the legislation to set up an Ombudsman’s Office. 

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Not including Kosovo as defined by the United Nations Security Council Resolution 1244. 

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–  In Montenegro: Strengthen the administrative capacity of the Ombudsman’s Office; ensure proper 

follow-up to the Ombudsman recommendations. 

Judicial system 

–  In both Republics: Adopt and implement legislation on mandatory initial and continuous training 
for  judges,  prosecutors  and  court  support  staff,  and  strengthen  the  training  centres;  start 
rationalising the court system and modernise proceedings, in particular in the field of commercial 
law. Strengthen the autonomy of the prosecution system, particularly the offices of the prosecutors 
for organised crime. 

–  In  Serbia:  strengthen  the  office  of  the  prosecutor  for  war  crimes;  establish  administrative  and 

appellate courts. 

Anti corruption policy 

–  In both Republics: Fully implement the laws on conflict of interests. 

–  In  Serbia:  Adopt  and  implement  a  comprehensive  anti-corruption  strategy  and  subsequently 

detailed Action Plans, notably through establishing a competent body for implementation.  

–  In  Montenegro:  implement  the  anti-corruption  strategy,  notably  through  establishing  a  competent 

body for implementation. 

HUMAN RIGHTS AND THE PROTECTION OF MINORITIES 

–  Fulfil  all  remaining  obligations  arising  out  of  membership  of  the  Council  of  Europe.  Ensure 
uniform  effective  implementation  of  these  obligations,  throughout  the  State  Union,  notably  with 
regard  to  the  European  Convention  on  Human  Rights  and  Fundamental  Freedoms  and  the 
European Convention for the Prevention of Torture. 

–  In both Republics: Take comprehensive and transparent action in all alleged cases of ill-treatment. 

Strengthen the internal control services dealing with ill-treatment by law enforcement agents. 

–  In  both  Republics:  Improve  prison  conditions,  in  particular  as  regards  vulnerable  groups  such  as 
juvenile  offenders;  ensure  appropriate  monitoring  of  prison  conditions  for  long-term  inmates  and 
for  organised  crime  inmates,  ensure  further  training  of  penitentiary  staff  and  improvement  of 
special needs facilities. 

–  In Serbia: implement legislation on the execution of penal sentences. 

–  Adopt comprehensive anti-discrimination legislation.  

–  In Serbia: Enforce media legislation. Ensure effective independence of the Broadcasting Council, 
as well as fair and transparent allocation of broadcasting frequencies for media operators. Ensure 
the  full  and  timely  transformation  of  the  state-owned  broadcasting  media  into  public  service 
broadcasters;  complete  the  transformation  of  Radio  Television  of  Serbia  into  a  public  service 
broadcaster in line with European standards. Fully implement the law on free access to information. 

–  In Montenegro: Adopt law to ensure access to public information. Continue the transformation of 

Radio Television of Montenegro into a public service broadcaster. 

–  In  Serbia:  Encourage  the  development  of  civil  society  organisations  financially  and  otherwise, 
notably by adopting the law on associations, and legislation on the legal status of foreign NGOs. 

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–  In Montenegro: Adopt strategy on cooperation between NGOs and governmental bodies. 

–  In  Serbia:  Adopt  adequate  legislation  on  the  restitution  of  property  and  ensure  its  full 

implementation, notably by addressing the issue of (state-owned) urban property. 

–  In Montenegro: Fully implement legislation on the restitution of property.  

–  Ensure  adequate  cooperation  between  the  State  Union  and  Republics  and  where  appropriate  the 
provincial and local level as regards the legislative basis for and practical protection of the rights of 
minorities. Implement the Strategies and Action Plans relevant to the integration of Roma people, 
including returnees. 

–  In  Serbia:  Strengthen  the  functioning  of  minority  National  Councils.  Promote  good  inter-ethnic 
relations, in particular by taking adequate measures in the field of education. Promote participation 
of minorities in the judiciary and law enforcement bodies. 

–  In Montenegro: Adopt the law on protection of minority rights.  

REGIONAL ISSUES AND INTERNATIONAL OBLIGATIONS 

–  Fully respect Dayton Agreement. 

–  Strengthen  regional  cooperation  and  good  neighbourhood  relations.  Conclude  and  implement 
agreements with neighbouring countries, notably on free trade, cross-border co-operation, the fight 
against  organised  crime,  trafficking  and  smuggling,  judicial  co-operation,  border  management, 
environment, transport and energy. 

–  Ensure adequate cooperation between the State Union and Republics as regards the legislative basis 
for  and  practical  protection  of  the  rights  of  refugees  and  internally  displaced  persons.  Repeal  all 
discriminatory provisions, in particular in Montenegro in the field of the labour market, access to 
property  rights,  legal  redress  and  access  to  citizenship;  guarantee  unhindered  access  to  health 
services  and  personal  documents.  Ensure  right  of  a  real  choice  between  sustainable  return  and 
integration.  

Economic Requirements 

In Serbia: 

–  Sustain macroeconomic stability. Continue with the necessary fiscal adjustment and consolidation 
to help reduce external imbalances and contain inflationary pressures. Maintain a prudent monetary 
policy stance, backed by an appropriate exchange rate policy. Pursue a moderate wage policy and 
avoid  public  sector  wage  increases  above  productivity  gains.  Monitor  rapid  credit  expansion  and 
adjust  prudential  rules.  Further  develop  and  implement  the  reform  of  the  pension  system  and 
continue the reform of the health insurance system. 

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

–  Speed up the restructuring and privatisation of large socially-owned and state-owned enterprises to 
strengthen financial and corporate discipline. Continue with bankruptcy procedures against heavily 
indebted  loss  making  socially-owned  companies  to  reduce  quasi-fiscal  losses.  Accelerate  the 
restructuring  of  large  publicly-owned  utilities.  Ensure  the  allocation  of  sufficient  budgetary 
resources for redundancy and restructuring costs. 

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–  Complete the banking sector reform, in particular the privatisation of state-owned banks. Continue 

with the restructuring and privatisation of the insurance sector. 

–  Reform the system of regulated and administered prices. In particular, further adjust energy prices 
towards  cost  recovery  levels,  also  gradually  replacing  all  existing  price  subsidies  to  the  poor 
consumers with direct transfers. 

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

–  Continue  to  promote  employment  and  combat  unemployment,  in  particular  through  vocational 
training  and  labour  market  reforms,  involving  all  relevant  actors;  improve  public  employment 
services and allocate sufficient staff and financial resources to policy implementation. 

–  Continue to make the necessary adjustments to the Serbian trade regimes, to render it compatible 

with the autonomous trade measures, the WTO rules and the future SAA.  

In Montenegro: 

–  Sustain macroeconomic stability. Maintain necessary fiscal adjustment and consolidation to reduce 

external imbalances.  

–  Implement the Public Expenditure Management System. 

–  Ensure  flexible  labour  market  price-setting  mechanisms.  Implement  the  law  on  employment, 
improve public employment services and allocate sufficient staff and financial resources to policy 
implementation.  

–  Complete remaining price liberalisation. Further adjust energy prices towards cost recovery levels, 
by  implementing  the  new  system  for  determining  electricity  tariffs.  Gradually replace all  existing 
price subsidies to poor consumers with direct transfers. 

–  Speed up the restructuring of state-owned enterprises. Complete the privatisation of socially-owned 

enterprises. Adopt and implement the law on insurance supervision. 

–  Develop a stable and functioning land/real estate market. Adopt the law on the spatial planning and 

the law on construction land, and ensure their effective implementation. 

–  Continue  to  make  the  necessary  adjustments  to  the  Montenegrin  trade  regimes,  to  render  it 

compatible with the autonomous trade measures, the WTO rules and the future SAA.  

European Standards 

INTERNAL MARKET  

–  Dismantle existing obstacles and avoid new obstacles to the State Union's common market. Ensure 
State  Union-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 decisions by the Republics on market access. 

Free movement of goods 

–  Continue  efforts  to  align  rules  and  regulations  on  standardisation,  certification,  metrology, 
accreditation  and  conformity  assessment  with  the  EU  acquis  to  create  conditions  favourable  to 
trade. Start adopting European standards.  

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–  Establish an internal consultation and notification mechanisms for new technical regulations prior 

to their adoption on measures having an impact on trade.  

–  Establish a legal framework and administrative capacity for active consumer protection in line with 

EU consumer policy. 

Free movement of capital 

–  Implement a system of corresponding accounts in commercial banks to ensure the free movement 

of capital between the Republics. 

Customs and taxation 

–  Further  align  customs  legislation  and  procedures  with  the  EU  acquis.  Continue  to  modernise  the 
customs  administrations  in  order  to  ensure  a  high  level  of  administrative  capacity  and  to  fight 
against  corruption,  cross-border  crime  and  fiscal  evasion.  Strengthen  administrative  cooperation 
and ensure continuous observance of obligations related to the implementation of preferential trade 
measures (origin).  

–  Further  approximate  tax  legislation  with  the  EU  acquis.  Improve  implementation  of  tax  laws, 

focussing on revenue collection and control in order to reduce tax fraud.  

–  Commit to the principles  of the Code  of Conduct  for Business  Taxation and ensure that  new tax 

measures are in conformity with these principles. 

Competition 

–  Put  in  place  anti-trust  regimes,  applicable  to  all  anti-competitive  effects.  Ensure  administrative 

capacity for the efficient and independent enforcement of these rules.  

–  Strengthen state aid coordination points and create full state aid transparency, as a first step towards 

state aid control.  

Public procurement 

–  Implement  consistent  and  effective  public  procurement  regimes  in  both  Republics.  Ensure 
transparent  procedures,  regardless  of  the  value  of  the  contract  concerned,  and  non-discrimination 
between Serbian, Montenegrin and EU suppliers. 

Intellectual property law 

–  Further  strengthen  the  protection  of  Intellectual  Property  Rights  by  adopting  the  remaining  laws 
and by-laws. Ensure penal provisions and strengthen implementation and enforcement capacity in 
this field, notably in border services. 

Statistics 

–  In  both  Republics:  Develop  reliable  economic  statistics.  Revise  and  adopt  the  master  plan  on 
statistics with a view to enhancing the quality and broadening the scope of statistics. Co-ordinate its 
implementation  between  the  Republics  and  with  the  State  Union.  Reinforce  the  collection  and 
processing of agriculture statistics in line with EU standards and methodology; finalise process of 
harmonisation with HS nomenclature 2000/2002. In Serbia: Adopt legislation on statistics. 

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SECTORAL POLICIES  

Industry and SME 

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

–  In  Serbia:  continue  implementation  of  the  new  accelerated  company  registration  system  and, 
introduce  quicker  procedures  for  licensing.  Continue  the  introduction  of  regulatory  impact 
assessments.  Improve  possibilities  for  business  advocacy  and  representation.  Further  develop 
local/regional business support structures (clusters, incubators, business/technology parks). 

–  In  Montenegro:  Strengthen  the  newly  established  autonomous  investment  promotion  agency. 
Continue implementation of the national guarantee fund. Improve business advocacy/consultation. 
Step  up  efforts  to  streamline  and  accelerate  licensing  systems.  Introduce  ‘silent  approval’  in 
licensing and registration. Start introduction of regulatory impact  assessments.  Improve access to 
finance and develop business support structures (clusters, incubators, business/technology parks).  

Agriculture and fisheries 

–  In  Serbia:  Continue  strengthening  administrative  capacity  for  policy  formulation  and 
implementation.  Adopt  and  begin  implementing  food  safety,  veterinary  and  phytosanitary 
framework  legislation;  upgrade  veterinary,  phytosanitary  and  sanitary  laboratories,  inspectorates 
and controls at external borders; complete the establishment of a bovine animal identification and 
registration system. 

–  In  Montenegro:  Continue  strengthening  administrative  capacity  for  policy  formulation  and 
implementation.  Implement  the  law  on  veterinary  matters  (including  fishery  products)  and 
strengthen  the  veterinary  and  phyto-sanitary  laboratories;  strengthen  controls.  Step  up  efforts  to 
align  legislation  with  the  EU  veterinary  and  phytosanitary  acquis.  Align  the  system  of  animal 
identification and registration for bovines with EU requirements.  

Environment 

–  In Serbia: Continue approximating legislation to EU legislation and standards (air pollution, waste 
management  and  nature  protection);  adopt  and  begin  implementing  the  National  Environment 
Protection Strategy. Strengthen administrative capacity notably of institutions and bodies in charge 
of  planning,  permitting,  inspecting  and  monitoring,  as  well  as  project  management.  Develop  a 
multi-annual  plan  for  financing 
legislation,  notably  on 
environmental assessments and industrial pollution. Start construction of a facility for the treatment 
and safe disposal of hazardous waste.  

investment.  Implement  adopted 

–  In  Montenegro:  Continue  approximating  legislation  to  EU  legislation  and  standards,  notably 
environmental  protection  framework  legislation.  Implement  and  enforce  adopted  legislation. 
Develop an overall environment protection strategy (water, waste, air). Adopt the Land Use Plan; 
Adopt  the  Sustainable  Development  Strategy  and  sectoral  strategies  (integrated  coastal  zone 
management, biodiversity, climate change). Strengthen administrative capacity. 

Transport policy 

–  Complete the programme and continue to align the aviation legislation with the EU acquis in view 

of the European Common Aviation Area (ECAA). 

–  Implement the Memorandum of Understanding on the Development of the South East Europe Core 

Regional Transport Network including the Transport Observatory. 

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–  In Serbia: Adopt and implement a national transport strategy (road, rail, aviation and waterways), 
with  attention  to  the  economic  viability  of  the  sector.  Implement  the  law  on  rail.  Complete  the 
master plan for inland navigation. 

–  In  Montenegro:  Implement  the  road  transport  law  (including  establishment  of  the  relevant 
implementation structures). Start earmarking sufficient resources for the maintenance of transport 
infrastructures and institutions. 

Energy 

–  Start  implementing  the  commitments  undertaken  in  the  framework  of  the  Energy  Community 

Treaty. 

–  In Serbia: Fully implement the Energy Law also ensuring a smooth functioning of the independent 
Energy Regulatory Agency; continue environmental audits on energy plants and address the worst 
polluters.  Ensure  unbundling  with  a  view  to  restructuring  and  privatisation.  Strengthen  the 
necessary  administrative  structures.  Make  further  progress  towards  a  regional  energy  market 
(including through improved interconnectivity). 

–  In  Montenegro:  Complete  and  implement  the  energy  development  strategy,  including  the  energy 
efficiency strategy; strengthen the administrative capacity of the Ministry of Economy in the field 
of  energy;  unbundle  and  restructure  the  electric  power  utility.  Strengthen  the  Energy  Regulator. 
Complete the restructuring and liberalisation of the internal energy market; privatise and/or allow 
development of public/private partnerships in the sector. 

Information society and media 

–  In Serbia: Ensure that the electronic communications sector is liberalised, that the regulatory bodies 
are independent and effectively functioning and that the necessary laws and policies for the sectors 
are adopted and applied.  

–  In  Montenegro:  Foster  competition  in  the  market  through  strengthening  of  the  Agency  for 
Telecommunications, in particular by introducing the necessary competitive safeguards and setting 
terms and conditions for interconnection charges. 

Financial control 

–  Develop a Public Internal Financial Control strategy. 

JUSTICE, FREEDOM AND SECURITY  

Visa, border control, asylum and migration 

–  Develop  a  State  Union-level  approach  on  integrated  border  management  and  ensure  consistent 
implementation  at  the  level  of  the  Republics  in  line  with  the  relevant  Memorandum  of 
Understanding.  As  a  follow-up  to  the  Ohrid  regional  Conference  on  border  security  and 
management  in  May  2003,  implement  the  short-term  measures  that  were  adopted  by  the 
Government. 

–  In  Serbia:  Take  concrete  steps  to  implement  best  practices  concerning  border  police;  proceed 
without  delay  with  the  demilitarisation  of  border  control  in  coordination  with  the  State  Union 
authorities. 

–  In  Montenegro:  Further  strengthen  civilian  control  of  borders  (including  training  and  equipment 

compatible with EU standards). 

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–  Develop a State Union-level approach to issues related to visas, asylum and migration in line with 
the Constitutional Charter, notably through the complete harmonisation of the visa regimes applied 
in  the  Republics.  Put  in  place  mechanisms  to  monitor  the  consistent  implementation  of  these 
policies at the level of the Republics. 

–  Adopt the Asylum Laws in both Republics and proceed with the conclusion and implementation of 

readmission agreements. 

–  In Serbia: enhance the  capacity and infrastructure of the reception centre for  asylum seekers and 

refugees. 

–  In Montenegro: Carry out the construction of the planned reception centres for asylum seekers and 

refugees. 

Money laundering 

–  In  both  Republics:  Ensure  efficient  implementation  of  the  anti-money  laundering  legislation  and 

strengthen the financial intelligence units. 

Drugs 

–  In  both  Republics:  Increase  the  capacity  to  fight  against  drug  trafficking  and  develop  and  start 

implementing a national drugs strategy in line with the EU drugs strategy. 

Police 

–  Implement  the  agreed  institutional  frameworks  for  judicial  and  law-enforcement  cooperation 
between the  Republics, notably through full implementation of the Memoranda of Understanding 
signed by the respective Ministries of Justice and Interior.  

–  In Serbia: Adopt the law on Police in order to establish professionalism and accountability.  

–  In  Montenegro:  Implement  the  Laws  on  Police  and  National  Security  Agency  and  ensure 

professionalism and accountability. 

Fight against organised crime and terrorism 

–  Establish efficient institutional mechanisms for inter-agency cooperation within the Republics and 

formalise cooperation between them.  

–  In  both  Republics:  Adopt  the  legislation  and  develop  the  capacity  to  seize  assets.  Strengthen 
criminal  intelligence.  Adopt  legislation  on  the  protection  of  personal  data  and  take  the  necessary 
steps to prepare for the conclusion of a cooperation agreement with Europol. Strengthen the fight 
against  the  trafficking  of  human  beings,  including  the  provision  of  adequate  assistance  and 
protection to the victims.  

–  Increase  the  efficiency  of  international  cooperation  and  implementation  of  the  relevant 
international  conventions  on  terrorism;  improve  cooperation  and  the  exchange  of  information 
between  all  branches  of  the  security  services  and  with  other  States;  prevent  the  financing  and 
preparation of acts of terrorism.  

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3.2.  Medium-Term Priorities  

Political Requirements 

DEMOCRACY AND THE RULE OF LAW 

Public administration 

–  Further  strengthen  European  integration  units  in  the  line  ministries  and  cooperation  mechanisms 

with European Integration Offices.  

–  In Serbia: Continue full implementation of 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; establish 
a  centralised  payroll  system.  Strengthen  the  economic  policy-making  process.  Adopt  and 
implement decentralisation reform ensuring viability of local governments. 

–  In  Montenegro:  Ensure  sustainability  of  the  Authority  for  human  resources  management. 

Strengthen policy-making process. Implement decentralisation reform. 

Defence reform 

–  Continue  process  of  restructuring  and  reform  of  the  armed  forces,  including,  as  appropriate, 
downsizing (taking into account the social impact) conversion and privatisation of military assets 
and defence industry as well as increased transparency and civilian control. 

Judicial system 

–  In Serbia: Adapt national strategy for judicial reform and subsequent action plan, particularly in the 
field  of  appointment  and  trial  period  for  judges,  and  autonomy  of  prosecutors.  Create  and 
implement  an  IT  network  for  prosecutors  at  all  levels;  ensure  enforcement  of  court  decisions. 
Further strengthen the capacity to try war crimes domestically in full compliance with international 
obligations as to cooperation with ICTY. 

–  In  Montenegro:  Ensure  adequate  functioning  of  the  Judicial  Training  Centre.  Implement  the  IT 

strategy for the judiciary. 

Anti-corruption policy  

–  Ensure full compliance with the UN Convention on the fight against corruption.  

HUMAN RIGHTS AND THE PROTECTION OF MINORITIES 

–  Implement the anti-discrimination legislation. 

–  Ensure the inclusion of disabled or minority children in mainstream education; reform the childcare 

system. 

–  Continue to promote integration of minorities and good inter-ethnic relations. 

REGIONAL ISSUES AND INTERNATIONAL OBLIGATIONS 

–  Facilitate integration for refugees who choose not to return. 

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–  In Serbia: Adopt new legislation on refugees; continue to implement the national strategy. 

–  In Montenegro: Implement the National strategy on refugees as part of a comprehensive strategy on 

social inclusion and social integration.  

Economic Requirements 

In Serbia: 

–  Continue  sustainable  macroeconomic  policies;  continue  fiscal  adjustment  and  consolidation  to 
further reduce external imbalances and contain inflationary pressures. Prioritise public spending in 
annual  and  medium-term  budgeting;  in  particular  reduce  quasi-fiscal  losses  of  the  part  of  state-
owned  or  socially-owned  companies.  Continue  implementing  a  moderate  wage  policy.  Further 
pursue the reform of the pension and health insurance systems.  

–  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.  

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

fraud and other irregularities affecting national and international funds. 

–  Continue  the  process  of  privatising  large  socially-owned  and  state-owned  enterprises  and,  where 
appropriate, publicly-owned utilities to help increase the share of the private sector in the economy. 

–  Strengthen  the  business  environment  to  promote  the  development  of  the  private  sector  and 
employment  with  competitive  markets,  level  playing  fields  and  access  to  finance  through 
development of the financial sector. 

–  Strengthen  the  functioning  of  the  land/real  estate  market.  Adopt  and  implement  legislation  on 
cadastre and legislation allowing private ownership of urban land. Start land reform, restructuring 
and privatisation of large farms.  

–  Continue the necessary reforms to comply with WTO rules and obligations in order to accelerate 

the WTO accession process. 

–  Start designing and applying an integrated research policy. 

In Montenegro: 

–  Continue  sustainable  macroeconomic  policies;  continue  fiscal  adjustment  and  consolidation  to 
further reduce external imbalances. Prioritise public spending in short and medium term budgeting; 
in particular, reduce subsidies, transfers and the civil service wage bill. Continuously reduce overall 
public spending as a share of GDP.  

–  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.  

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

fraud and other irregularities affecting national and international funds. 

–  Strengthen  the  business  environment  to  promote  the  development  of  the  private  sector  and 
employment  with  competitive  markets,  level  playing  fields  and  access  to  finance  through  the 
development of the financial sector. Streamline commercial judiciary procedures. 

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–  Continue the necessary reforms to comply with WTO rules and obligations in order to accelerate 

the WTO accession process. 

–  Start designing and applying an integrated research policy. 

European Standards 

INTERNAL MARKET  

Free movement of capital 

–  Further liberalise short- and medium-term capital movements, in both Republics. 

Free movement of goods 

–  Further develop standardisation, in particular through the adoption of European standards. 
Continue  transposing  the  New  and  Global  Approach  and  Old  Approach  directives. 
Establish a market surveillance structure required by the acquis.  

Customs and taxation 

–  Ensure  continued  approximation  of  Serbian  and  Montenegrin  customs  and  taxation  legislation  to 
the acquis, and further increase the administrative capacity to implement customs legislation, and 
to fight against corruption, cross-border crime and fiscal evasion. 

–  Improve  transparency  and  the  exchange  of  information  with  EU  Member  States  in  order  to 

facilitate the enforcement of measures preventing the avoidance or evasion of taxes.  

Statistics 

–  In both Republics: Develop reliable economic statistics. Build up institutional capacity to produce 
and  publish  basic  statistical  data  harmonised  with  European  standards  in  the  area  of  business 
statistics, labour market statistics and national accounts.  

SECTORAL POLICIES 

Industry and SME 

–  In both Republics: Implement the European Charter for SMEs. 

Agriculture and fisheries 

–  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.  Strengthen  agricultural  and  food  market  systems, 
including  quality  controls  and  HACCP;  reduce  policy  distortions  of  agricultural  markets  and 
reform  the  Directorate  for  Commodity  Reserves.  Extend  animal  identification  and  registration  to 
other  species.  Prepare  a  programme  for  up-grading  food  processing  establishments  to  meet  EU 
requirements. 

–  In  Montenegro:  Further  build  administrative  capacity  for  policy  formulation  and  implementation. 
Design  and  start  implementing  a  rural  development  policy.  Strengthen  institutional  capacity  for 
food  safety.  Prepare  a  programme  for  up-grading  food  processing  establishments  to  meet  EU 
requirements.  Start  action  in  view  of  identification  of  sheep  and  goats  and  registration  of  their 

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movements.  Start  action  in  view  to  ensure  an  efficient  control  of  domestic  plant  production  in 
particular  for  products  with  EU  specific  requirements.  Take  measures  to  ensure  that  the  fisheries 
policy moves closer to EU standards, in particular in the areas of resource management, inspection 
and control and in market and structural policies. 

Environment 

–  In  both  Republics:  Continue  implementing  and  enforcing  legislation  approximated  to  EU 
legislation. Continue to implement legislation on environmental impact assessment. Ratify and start 
implementation of the Kyoto protocol. Ensure a viable financial framework for the implementation 
of a mid to long-term environmental protection policy. 

–  In Serbia: Adopt and start implementing strategies on air pollution, waste management and nature 
protection.  Continue  implementing  the  National  Environment  Protection  Strategy,  and  the  water 
strategy.  Continue  strengthening  administrative  capacity  of  environmental  institutions  and  bodies 
Begin  implementing  the  multi-annual  plan  for  financing  investment.  Finalise  construction  of  a 
facility for the treatment and safe disposal of hazardous waste. 

–  In  Montenegro:  Continue  approximating  legislation  to  EU  legislation  and  standards,  notably 
legislation  on  air  pollution,  water  and  waste.  Begin  implementing  the  Land  Use  Plan  and  the 
overall  environment  protection  strategy.  Develop  an  overall  environment  protection  strategy 
(water,  waste,  air).  Begin  implementing  the  Sustainable  Development  Strategy  and  sectoral 
strategies  (integrated  coastal  zone  management,  biodiversity,  climate  change).  Continue 
strengthening the administrative capacity of line ministries and bodies in charge of environmental 
planning, permitting, inspecting and monitoring, as well as project management. 

Transport policy 

–  In  both  Republics:  Strengthen  capacity  building,  including  project  preparation  for  large 
investments.  Continue  to  earmark  sufficient  resources  for  the  maintenance  of  transport 
infrastructures and institutions. 

–  Implement international commitments under International Maritime Organisation conventions and 
improve  maritime  safety  conditions  of  the  fleet  in  the  light  of  the  Paris  Memorandum  of 
Understanding. 

Energy 

–  In  both  Republics:  Adopt and  implement  a  long  term  strategy  for  an  environmentally  sustainable 

energy policy. 

–  Continue to implement regional and international commitments in this area in view of establishing 

a competitive regional energy market. 

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Information society and media 

–  In  both  Republics:  Transpose  and  implement  the  new  EU  framework  for  electronic 
communications.  Ensure  the  independence,  sufficient  resources  and  expertise  of  the  regulatory 
authorities. Start the alignment with the EU audiovisual acquis. 

Financial control 

–  Develop and implement the principles of decentralised managerial accountability and functionally 
independent  internal  audit in  accordance  with  the  internationally  accepted  standards  and  EU  best 
practice. 

–  Strengthen  the  operational  capacity  and  functional  as  well  as  financial  independence  of  the 

Supreme Audit Institution. 

–  Develop procedures and administrative capacities to ensure effective protection of the EU financial 

interests. 

JUSTICE, FREEDOM AND SECURITY 

Visa, border control, asylum and migration 

–  In  both  Republics:  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.  Enhance  the 
cooperation between the Republics’ agencies responsible for fighting human trafficking. 

Police 

–  In  both  Republics:  Continue  restructuring;  ensure  accountability;  reform  police  education;  ensure 

cooperation among law enforcement agencies. 

Fight against organised crime and terrorism  

–  In  both  Republics:  Develop  an  effective  system  of  witness  protection  which  also  incorporates 
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 
legislation.  Facilitate  the  placement  of  liaison  officers,  seconded  by  EU  member  states  in  the 
relevant  state  bodies  involved  in  the  fight  against  organised  crime.  Implement  the  Palermo 
Convention on trans-national organised crime. 

–  In  Serbia:  Strengthen  capacity  at  the  Ministry  of  Interior  (notably  the  directorate  for  organised 

crime). Develop procedures and the capacity to share intelligence between agencies.  

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

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KOSOVO as defined by the United Nations Security Council Resolution 1244 of 10 June 1999 

3.1. 

Short-Term Priorities 

–  In  order  to  ensure  a  secure,  democratic  and  multi-ethnic  Kosovo,  implementation  of  the  Kosovo 

Standards endorsed by the UN Security Council needs to be pursued.  

–  The following priorities are to be addressed in this context: 

Key Priorities 

–  Ensure  full  respect  for  the  rule  of  law  and  pursue  a  policy  of  zero  tolerance  against  corruption, 

organised crime and financial crime. 

–  Ensure  democratic  governance  of,  and  delivery  of  public  services  to,  all  people  of  Kosovo 
establishing  a  professional,  accountable,  accessible,  representative  and  transparent  public 
administration free from political interference.  

–  Create  a  climate  for  sustainable  multi-ethnicity  and  conducive  to  returns.  Ensure  the  respect, 
security,  freedom  of  movement  and  participation  of  all  communities.  Explicitly  condemn  all 
manifestations  of  anti  minority-communities  sentiment.  Vigorously  prosecute  all  inter-ethnic 
crime. 

–  Create the conditions for investment, trade and economic growth. 

–  Ensure  full  cooperation  with  UN  International  Criminal  Tribunal  for  the  former  Yugoslavia 

(ICTY). 

–  Fully respect the United Nations Security Council Resolution 1244 (UNSCR 1244) and intensify 

well prepared dialogue with Belgrade. Show a constructive attitude. 

Political Requirements 

DEMOCRACY AND THE RULE OF LAW 

Provisional institutions of self-government 

–  Ensure  fully  effective  functioning  of  the  Assembly  and  its  committees,  the  government  and 
municipalities,  including  full  respect  of  the  respective  rules  of  procedure,  and  the  rights  and 
interests of all communities. 

–  Increase executive oversight by, and accountability and transparency, within the Assembly. 

–  Increase  minority  representation  in  all  institutions  and  the  civil  service  at  municipal  and  central 

level. 

–  Prepare and carry out a population and housing census in full respect of international standards. 

Elections 

–  Hold  free,  fair  and  transparent  elections.  Strengthen  the  independent  and  multi-ethnic  Central 

Election Commission to administer the 2006 elections in a timely manner. 

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–  Make sure that adequate voting sites, security and other measures are provided to all communities 
to exercise their voting rights. Enable internally displaced people and refugees to participate in the 
elections even if their ability to return to Kosovo is curtailed. 

Public administration 

–  Enforce  transparent  procedures  on  recruitment,  transfer,  appraisal,  promotion,  conduct  and 
dismissal  of  civil  servants  including  Kosovo  Protection  Corps  (KPC),  police  and  justice  system 
employees and on financial management.  

–  Improve  quality  and  availability  of  basic  public  services  to  all  communities,  including  as  a 

contribution to reduce the demand for services provided by parallel structures. 

–  Develop  and  maintain  effective  public  service  training  institutions  free  from  political  influence. 
Improve higher management training. Develop the Kosovo institute of public administration into a 
body capable of delivering professional training to all civil servants. 

–  Adopt the Law on emergency management and further improve the performance, professionalism 
and coordination of relevant Kosovo institutions, including the KPC, on civil protection matters. 

–  Advance  the  reform  of  local  self-government  taking  into  account  the  views  and  interests  of  all 
communities  in  Kosovo  including  the  allocation  of  appropriate  budgetary  resources  and  increase 
administrative capacity to facilitate the decentralisation process. 

Judicial system 

–  Ensure effective and impartial courts free from political influence.  

–  Protect witnesses. 

–  Implement the automated case management system to reduce the backlog of court proceedings in 

particular in civil law. Ensure enforcement of civil court decisions.  

–  Further develop legal education and training, particularly for judges, prosecutors and administrative 
personnel.  Adopt  and  implement  the  law  on  the  Kosovo  Judicial  Institute  and  transform  it  into  a 
viable institution responsible for judicial training. 

–  Strengthen municipal courts and police action to prevent, sanction and address illegal occupation, 

use and construction of property. 

–  Strengthen the Prosecutor’s Office to ensure that is able to comply with the principles of autonomy 

and impartiality. 

–  Develop capacity free from political influence to take on competences in the areas of justice and 

interior. 

Anti-corruption policy 

–  Implement  the  law  on  the  suppression  of  corruption.  Establish  the  anti-corruption  agency.  Adopt 

and implement the anti corruption plan. 

HUMAN RIGHTS AND THE PROTECTION OF MINORITIES  

–  Ensure  the  continued  independent  functioning  and  the  financial  viability  of  an  impartial 

ombudsperson institution, and due consideration of Ombudsperson recommendations.  

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–  Facilitate  and  encourage  the  return  of  refugees  and  displaced  persons  from  all  communities  and 
finalise the rehabilitation of damaged and destroyed properties caused by the March 2004 events, 
including historic and religious sites.  

–  Strengthen administrative structures and accountability mechanisms in the ministry of communities 
and  returns.  Further  develop  and  implement  the  joint  strategic  framework  on  communities  and 
returns  and  develop  mechanisms  at  municipal  level  for  facilitating  the  sustainable  integration  of 
returnees and existing minority communities. 

–  Adopt  and  enforce  an  effective  law  on  official  languages  and  set  up  effective  mechanism  to 

monitor its implementation. 

–  Regularise informal settlements. Find sustainable repatriation solutions for the integration of Roma 
minority communities that are living in hazardous living conditions in camps and for IDP groups 
living in informal centres. 

–  Adopt the law on the preservation of cultural heritage and establish administrative mechanisms to 

ensure its implementation. 

–  Adopt  laws  on  public  broadcasting  and  against  on  civil  defamation.  Consolidate  the  media  self-
regulatory  system  with  the  establishment  of  the  Independent  Media  Commission,  the  effective 
functioning of the Press Council and the implementation of the Press Code. 

–  Establish an adequate legal framework for non-government organisations and ensure that they can 

operate freely within it. 

–  Complete  legislation  and  actions  to  safeguard  property  rights  notably  on  ownership  possession; 
occupancy  and  rights  to  residential  and  non-residential  property  including  the  legislative 
framework  to  regulate  construction.  Harmonise  municipal  regulations  and  establish  a  mechanism 
for  the  effective  resolution  of  commercial  and  agriculture  property  disputes.  Increase  public 
awareness on consequences of illegal construction.  

–  Develop  and  implement  a  strategy  including  sustainable  successor  arrangements  to  the  Housing 

and Property Directorate in order to implement all outstanding residential property claims. 

–  Improve  the  quality  of  primary  and  secondary  education,  higher  education  and  vocational  and 

educational training. 

–  Ensure effective implementation of the anti-discrimination law.  

–  Take concrete measures to prevent and sanction all forms of violence against women. 

REGIONAL ISSUES AND INTERNATIONAL OBLIGATIONS 

–  Strengthen regional cooperation and good neighbourhood relations. 

–  Conclude  and  implement  free  trade  agreements  within  the  region  and  participate  in  all  relevant 

regional initiatives notably under the auspices of the Stability Pact. 

Economic Requirements 

–  Finalise the privatisation process in accordance with the Kosovo Trust Agency schedule.  

–  Complete the incorporation of publicly-owned enterprises, namely the electricity utility, railways, 
district heating and water and waste services. Implement further restructuring steps to improve their 

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governance, efficiency and financial sustainability. Further strengthen the regulatory framework for 
public utilities and enhance the administrative capacity of the independent regulators. 

–  Strengthen the transparency and sustainability of public finances. Ensure consistency of the 2006 

budget with the consolidated Medium-Term Expenditure Framework. 

–  Define and apply the macroeconomic and budget priorities in close cooperation with the IMF. 

–  Enhance  fiscal  discipline  and  better  control  of  public  expenditure.  Establish  effective  procedures 
for  the  detection,  treatment  and  follow-up  of  cases  of  suspected  fraud  and  other  irregularities 
affecting national and international funds.  

–  Continue  the  development  of  a  legislative  and  policy  framework  for  trade  and  trade-related 
policies,  ensuring  EU-  and  WTO-compatibility.  Promulgate  and  implement  the  Law  on  External 
Trade Activity. 

European Standards 

–  Strengthen the administrative capacity of all institutions for effective verification on consistency of 
policies  and  legislation  with  EU  requirements,  in  particular  by  reinforcing  the  structures  dealing 
with European approximation.  

INTERNAL MARKET  

Free movement of goods 

–  Prepare  the  necessary  legislation  and  establish  the  infrastructure  as  regards  standardisation 
into  account 

certification,  metrology,  accreditation  and  conformity  assessment, 
complementarities with the region. 

taking 

–  Implement the law on Domestic Trade. 

Free movement of capital 

–  Adopt appropriate prudential requirements and strengthen the supervisory process in the financial 

sector. 

Customs and taxation 

–  Enhance  the  capacity  of  the  customs  administration  to  fight  against  corruption  and  cross-border 

crime. Enhance the capacity of the criminal investigation unit. 

–  Ensure  observance  of  obligations  related  to  the  implementation  of  preferential  trade  measures 

(origin). 

–  Commit to the principles  of the Code  of Conduct  for Business  Taxation and ensure that  new tax 

measures are in conformity with these principles. 

Public procurement 

–  Adopt  and  implement  effectively  the  revised  public  procurement  law,  including  related 

implementing legislation. Establish effective review procedures. 

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Intellectual property law 

–  Design  and  implement  legislation  on  the  protection  of  intellectual,  industrial  and  commercial 

property rights. Define a medium-term strategy to improve the enforcement of these rights. 

Statistics 

–  Establish a first set of reliable (national type) accounts statistics. 

SECTORAL POLICIES 

Industry and SME 

–  Adopt  a  medium-term  strategy  on  SME  policy,  including  the  establishment  of  the  SME  support 
agency  and  the  investment  promotion  agency.  Continue  implementation  of  the  European  Charter 
for Small Enterprises. 

–  Adopt  a  general-purpose  financial  reporting  framework  appropriate  for  Kosovo’s  circumstances, 
limiting  the  use  of  IFRS/IAS  to  public  interest  entities  and  making  full  use  of  the  exemptions 
foreseen in the 4th and 7th company law directives. 

Agriculture and fisheries 

–  Design and start implementing a rural development policy.  

–  Continue the alignment of legislation on the EU veterinary and phytosanitary acquis.  

–  Align the system of animal identification and registration for bovines with EU requirements. 

Environment 

–  Prepare the adoption and the implementation of legislation on environmental impact assessment in 

line with the EU acquis. 

–  Prepare  a  comprehensive  environmental  action  plan,  particularly  relating  to  public  health  issues, 

with a view to approximating with the EU acquis. 

–  Prepare  activities  to  increase  public  awareness  and  civil  society  participation  in  environmental 

matters. 

Transport policy 

–  Implement the Memorandum of Understanding on the development of the South East Europe Core 

Regional Transport Network including the Transport Observatory. 

–  Implement  the  Law  on  road  transport.  Adopt  a  Law  on  Road  Safety  and  start  to  implement 

measures in this field. 

–  Enhance transport-planning capacity to adopt and start implementing a transport policy framework, 

including the development of a multi-modal transport strategy on central and local level. 

–  Continue improving data led asset management for maintenance and rehabilitation. 

–  Continue  to  align  the  aviation  legislation  with  EU  acquis  in  view  of  the  European  Common 

Aviation Area. 

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–  Develop the civil operator of Pristina airport, its staff and facilities, to ensure an adequate level of 

security and sound and accountable management. 

Energy 

–  Start  implementing  the  commitments  undertaken  in  the  framework  of  the  Energy  Community 
Treaty. Ensure the viability and sustainability of the electricity company, notably by substantially 
increasing revenue collection and improving governance structures.  

Information society and media 

–  Adopt and start implementing policy concerning electronic communication networks and services 

aimed at creating a stable competitive environment in order to attract foreign investment. 

Financial control 

–  Develop  a  Public  Internal  Financial  Control  strategy  as  a  basis  for  fulfilling  the  medium  term 

recommendations in this area. 

JUSTICE, FREEDOM AND SECURITY 

Visas, border control, asylum and migration 

–  Strengthen cooperation between border/boundary management agencies.  

Money laundering 

–  Ensure that the Financial Information Centre effectively fulfils its role in collecting and analysing 

data in relation to money laundering. 

Drugs 

–  Further strengthen local capacity in the narcotics investigation section. 

Police 

–  Improve the effectiveness of investigations of crime. Adopt and implement legislation to establish 
the  Kosovo  Police  Service  (KPS)  and  strengthen  its  investigative  and  internal  control  capacities. 
Strengthen its leadership. 

–  Ensure that the future academy for public safety education and training will be an independent and 

professional training body. 

Fighting against organised crime and terrorism 

–  Further strengthen local capacity in the organised crime directorate within the KPS. Implement the 

action plan against trafficking in human beings. 

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3.2.  Medium-Term Priorities 

Political Requirements 

DEMOCRACY AND THE RULE OF LAW 

Public administration 

–  Proceed  with  a  sustainable  public  administration  reform  while  respecting  budgetary  constraints. 
Improve  the  capacity  of  local  administration  to  provide  services  to  their  constituencies  in  an 
equitable and effective manner.  

Judicial system 

–  Define and consolidate a complete body of law that respect rights and interests of all communities, 

drawing from all legal sources currently applicable in Kosovo. 

–  Design and implement a comprehensive strategy to enhance independence of judiciary, as well as 

the autonomy of the prosecution system. 

–  Strengthen the administrative capacity and effectiveness of the judiciary and all law enforcement 
agencies. Ensure the viability of a comprehensive legal aid system. Develop an alternative dispute 
resolution mechanism.  

–  Improve  the  penitentiary  system  with  particular  attention  to  security,  control,  management, 

vocational training and reintegration schemes, as well as the conditions of facilities.  

HUMAN RIGHTS AND THE PROTECTION OF MINORITIES  

–  Adopt legislation and establish and respect mechanisms for the protection of human and minority 

rights in line with Council of Europe recommendations. 

–  Ensure the viable existence of minority communities and their non-discriminatory participation in 
society,  taking  concrete  measures  to  ensure  their  safety,  freedom  of  movement  as  well  as  the 
equitable provision of and access to public and universal services. 

–  Implement  the  law  on  gender  equality.  Ensure  gender  mainstreaming  of  women’s  rights  in  all 

existing policies and legislation. 

–  Develop an integrated conservation policy for cultural heritage. Actively engage in increasing the 

general awareness of and respect for cultural heritage.  

–  Ensure that the public broadcaster performs its role as a public service to all communities and in 
their languages. Promote minority broadcasting and facilitate the sustainability of minority media. 
Ensure a level playing field for both private and public media. 

–  Ensure that the Kosovo Cadastral Agency and the municipal cadastral offices offer transparent and 
to  full  property  records  and  have  functioning  accountability 

non-discriminatory  access 
mechanisms. 

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REGIONAL ISSUES AND INTERNATIONAL OBLIGATIONS 

–  Further  strengthen  mechanisms  of  regional  and  international  cooperation  in  the  field  of  law 
enforcement,  including  transfer  of  suspects  and  sentenced  persons  and  mutual  legal  assistance  to 
jurisdictions. 

Economic requirements 

–  Prepare the ground for the development of a borrowing and debt management capacity. 

–  Examine possible guarantee mechanisms to attract foreign investment, in particular in cooperation 

with the Multilateral Investment Guarantee Agency. 

–  Improve the taxation system  and strengthen the capacity of the tax administration to increase tax 

collection.  

–  Develop flexible social policies to promote employment and social cohesion and address poverty 

and social exclusion. 

–  Develop the capacity of the banking sector to provide competitive banking services and long-term 
competitive financing. Ensure reliable and effective supervision of banking, insurance and pension 
institutions. 

–  Advance the formulation of a medium term development strategy and plan that is linked to sector 
strategies, takes into account poverty alleviation and is aligned with the medium term expenditure 
framework and the public investment programme. 

European Standards 

INTERNAL MARKET  

Free movement of goods 

–  Start transposing the New and Global Approach and Old Approach directives. 

–  Continue transposing European standards (ENs). 

–  Establish on market surveillance structure. 

Customs and taxation 

–  Continued approximation of tax and customs legislation to the EU acquis and further increase the 
administrative  capacity  to  enforce  legislation  and  to  fight  against  corruption,  cross-border  crime 
and fiscal evasion. 

Public procurement 

–  Ensure  that  public  procurement  rules  are  effectively  implemented  by  contracting  authorities  and 
entities  at  all  levels,  including  through  developing  operational  tools,  providing  training  and 
strengthening the administrative capacity. 

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Intellectual property law 

–  Continue strengthening the enforcement of intellectual, industrial and commercial property rights, 

in line with the medium-term strategy. 

Statistics 

–  Increase efforts to establish a reliable statistical system. 

SECTORAL POLICIES 

Industry and SME 

–  Continue implementing the European Charter for SMEs and the medium-term SME strategy.  

–  Continue gradual alignment of company law, including financial reporting standards. 

Agriculture and fisheries 

–  Develop a policy and a regulatory framework to support viable land reform. Support the protection 

of agricultural land against unplanned urban development. 

–  Start action for identification of sheep and goats and registration of their movements. 

–  Prepare a programme for up-grading food processing establishments.  

–  Start  action  for  efficient  control  of  domestic  plant  production  in  particular  for  products  with  EU 

specific requirements.  

Environment 

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

acquis. 

–  Implement  and  support  activities  to  increase  public  awareness  and  civil  society  participation  in 

environmental matters. 

Transport policy 

–  Continue  the  implementation  of  the  Memorandum  of  Understanding  on  the  development  of  the 

South East Europe Core Regional Transport Network. 

Energy 

–  Develop legislative and regulatory frameworks to encourage public-private partnerships and mixed 
investments in the power sector in line with the conclusions of the investment generation study. 

Information society and media 

–  Implement  the  legislation  on  electronic  communication  networks  and  services  and  strengthen  the 

position of the independent regulator. 

Financial control 

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–  Under  the  coordination  of  the  Ministry  of  Finance,  develop  and  implement  the  principles  of 
decentralised managerial accountability and functionally independent internal audit in accordance 
with  international  standards  and  EU  best  practise  through  coherent  legislation  and  adequate 
administrative capacity.  

–  Strengthen  the  operational  capacity  and  functional  as  well  as  financial  independence  of  the 

Supreme Audit Institution. 

JUSTICE, FREEDOM AND SECURITY 

Drugs 

–  Design and implement effective legislation and strategies against drugs trafficking and drug abuse.  

Fighting against organised crime and terrorism 

–  Design  and  implement  a  comprehensive  strategy  to  fight  organised  crime,  financial  crime  and 
terrorism.  Strengthen  local  capacities  to  investigate  organised  criminal  activities.  Strengthen 
judicial capacities to prosecute and try organised and financial crime cases.  

–  Develop a weapon collection strategy, complete and enforce small arms related legislation. 

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