Communication from the Commission - Monitoring report on the state of preparedness for EU membership of Bulgaria and Romania {SEC(2006) 595} {SEC(2006) 596} {SEC(2006) 598}
Date: 2006-05-16
Institutions: European Commission
Subjects: Bulgaria, Community acquis, Romania, accession criteria, accession to the European Union, report

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 16.5.2006 
COM(2006) 214 final 

COMMUNICATION FROM THE COMMISSION 

Monitoring report  
on the state of preparedness for EU membership of  
Bulgaria and Romania 

{SEC(2006) 595} 
{SEC(2006) 596} 
{SEC(2006) 598} 

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COMMUNICATION FROM THE COMMISSION 

Monitoring report  
on the state of preparedness for EU membership of  
Bulgaria and Romania 

1. 

INTRODUCTION 

The accession of Bulgaria and Romania will complete the fifth enlargement of the EU, 
which  started  in  May  2004  with  the  accession  of  ten  new  Member  States,  mostly  from 
central  Europe.  This  round  of  enlargement  has  contributed  to  peace,  prosperity  and 
stability throughout Europe. 

The conditions of Bulgaria and Romania's accession were agreed in an Accession Treaty 
signed  in  April  2005  between  the  25  Member  States  and  both  countries.  Bulgaria, 
Romania  and  14  Member  States  have  already  ratified  it.  This  Treaty  provides  that 
Bulgaria  and  Romania  will  join  on  1  January  2007  unless  the  Council  decides,  upon  a 
recommendation from the Commission, to postpone the accession of either country until 
2008. 

The  Commission  is  firmly  committed  to  ensuring  that  both  countries  successfully 
complete their final preparations for accession. To that end, it has closely monitored the 
progress made by Bulgaria and Romania and has provided targeted support to help them 
in their reform efforts. 

Both  countries  can  be  commended  on  their  achievements  in  successfully  transforming 
their  political  and  economic  systems  into  functioning  democracies  and  market 
economies.  The  Commission's  October  2005  report  confirmed  that  Bulgaria  and 
Romania  met  the  political  criteria  for  membership  and  showed  that  both  countries  had 
continued  progress  towards  meeting  the  economic  and  acquis  criteria  in  full. 
Nonetheless, it drew attention to a number of areas in need of further improvement. 

The  Commission  will  continue  to  provide  support  for  Bulgaria's  and  Romania's 
preparations  for  membership.  Nevertheless,  if  shortcomings  persist  upon  accession,  the 
Commission  will  take  the  necessary  action  in  its  role  as  guardian  of  the  treaties. 
Safeguards and other measures could apply to the internal market, including food safety, 
the area of justice, freedom and security, and to the management of EU funds. 

This  report  follows  up  on  the  findings  of  the  October  2005  report.  It  is  based  on  the 
detailed assessment contained in the accompanying Monitoring Reports for each country. 
In this report, the Commission: 

–  reviews, as of end April 2006, developments and the preparedness of both countries in 

areas previously identified as in need of further improvement; 

–  examines  measures  required  to  remedy  any  shortcomings  that  might  persist  upon 

accession; 

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–  draws  conclusions  on  the  state  of  preparedness  for  EU  membership  of  Bulgaria  and 

Romania. 

2. 

SUMMARY OF MONITORING FINDINGS 

2.1. 

Bulgaria 

Political criteria 

Bulgaria fulfils the political criteria for EU membership. 

Since the October 2005 report, there has been progress in a number of areas, including 
the reform of the judiciary. As regards the justice system, the new penal procedure code 
and a legal framework for legal aid entered into force. Constitutional amendments have 
entrusted  the  prosecution  service  with  the  responsibility  for  leading  investigations. 
Amendments to the Law on the Judiciary have been adopted. 

Bulgaria  has  taken  a  number  of  measures  to  fight  corruption.  A  code  of  ethics  was 
adopted  for  the  executive  branch.  An  anti-corruption  strategy  for  2006-2008  was 
adopted. Constitutional amendments have reduced the scope of immunity of members of 
parliament.  The  prosecutor  general  presented  requests  for  lifting  the  immunity  of  ten 
members  of  parliament.  Five  voluntarily  abstained  from  their  immunity  and  the 
immunity was lifted for a sixth one by a vote in parliament; the other cases are still being 
examined. This allowed investigations into high-level corruption cases to be launched. 

Bulgaria  has  made  progress  in  the  field  of  public  administration,  in  particular  with  the 
adoption of amendments to the laws on administration and on civil servants, and a new 
Code  of  Administrative  Procedure.  As  regards  ill-treatment  in  custody,  there  has  been 
some reduction of incidents, while conditions have improved in certain detention centres. 
Policy  initiatives  were  taken  for  the  disabled  and  for  the  mental  health  care  system. 
Social support for the disabled has been increased. 

However,  certain  outstanding  issues  remain  to  be  addressed.  The  accountability, 
transparency  and  efficiency  of  the  justice  system  need  further  strengthening.  Further 
efforts  are  needed  to  consolidate  implementation  of  the  random  allocation  of  cases 
throughout  the  country.  More  objective  and  transparent  mechanisms  are  needed  for 
assessing the quality of magistrates' work. Any ambiguities regarding the independence 
of the judiciary need to be removed. There were bottlenecks in the pre-trial process due 
to procedural rules and insufficient investigators. There have been few tangible results in 
combating organised crime. 

The structures to coordinate and implement the anti-corruption policy need strengthening 
in  order  to  perform  their  roles  effectively.  Indictments,  prosecutions,  trials,  convictions 
and dissuasive sentences remain rare in the fight against high-level corruption. Bulgaria 
needs to present clear evidence of results in this area. 

The  strategy  to  decentralise  the  administration  has  not  been  adopted  yet.  Bulgaria 
remains a country of transit and to a lesser extent a country of origin and destination for 
trafficking  in  human  beings.  There  continue  to  be  cases  of  ill-treatment  of  detainees. 
Living  conditions  in  many  child  welfare  and  mental  health  care  institutions  need  to  be 

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improved by implementing policy initiatives, and alternative care systems created. Social 
inclusion  of  the  Roma  minority  still  requires  substantial  efforts.  Further  efforts  are 
needed  to  combat  all  forms  of  intolerance,  particularly  by  fully  applying  existing 
legislation  on  broadcasting  and  other  activities  aiming  to  combat  any  form  of  racism, 
discrimination or xenophobia. 

Economic criteria 

Bulgaria  is  a  functioning  market  economy.  The  continuation  of  the  current  reforms 
should enable it to cope with competitive pressure and market forces within the Union in 
the  near  term.  Bulgaria  has  broadly  maintained  macroeconomic  stability  and  advanced 
structural reforms. 

Progress has continued since the October 2005 report. Useful steps were taken to contain 
the external  deficit.  The  privatisation process and the liberalisation and restructuring  of 
utilities  are  well  advanced.  Some  additional  progress  has  been  made  in  improving  the 
business environment and in reducing non-wage labour costs. 

However, the current account deficit widened and warrants continued prudent fiscal and 
wage policies. Deepening of structural reforms requires improving the functioning of the 
judicial  system  and  further  easing  the  regulatory  burden  on  businesses.  The  regulatory 
framework for the labour market needs to be made more flexible. 

Commitments and requirements arising from the accession negotiations 

Bulgaria has reached a considerable degree of alignment with the acquis. 

The October 2005 report concluded that Bulgaria would be ready by accession in a large 
number of areas. A number of other areas required increased efforts, and 16 areas gave 
rise to serious concern. 

Since then, further progress has been made. Bulgaria should be ready by accession in the 
following  additional  areas  if  the  current  pace  of  progress  is  maintained:  public 
procurement, mutual recognition of industrial product specifications; freedom to provide 
non-financial services; most agriculture Common Market Organisations; aviation; excise 
duties;  taxation  implementing  structures;  postal  services  liberalisation;  regional  policy 
legislation; chemicals and genetically modified organisms, noise legislation; visa policy; 
and customs preparations. 

Progress has also been made in a number of areas, which no longer give rise to serious 
concern but still require increased efforts to complete preparations: the insurance sector, 
the protection of intellectual property rights, the paying agency for agriculture, the milk 
common  market  organisation,  animal  diseases  control  measures,  veterinary  border 
inspection  posts;  animal  welfare,  trade  in  live  animals  and  animal  products,  veterinary 
aspects  of  public  health;  institutional  and  financial  management  structures  for  regional 
policy, as well as Schengen preparations and the management of the future EU external 
borders. 

Increased  efforts  are  also  needed  for:  mutual  recognition  of  professional  qualifications; 
financial services, information society services, protection of personal data; legislation to 
the  Common  market 
fight  money 

laundering;  agriculture 

trade  mechanisms; 

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organisations  on  wine  and  alcohol  and  on  beefmeat;  legislation  in  the  veterinary  and 
phytosanitary sector; most aspects of fisheries; sea transport; VAT, direct taxation rules; 
labour  law,  social  dialogue,  social  inclusion,  anti-discrimination  policy,  the  European 
Social  Fund,  public  health;  energy  market  liberalisation;  nuclear  energy  and  nuclear 
safety, in particular the commitments to early closure and subsequent decommissioning 
of  the  reactors  of  the  Kozloduy  plant  ;  steel  industry  restructuring;  electronic 
communications;  programming,  monitoring  and  procurement  capacity  for  regional 
policy;  horizontal  environmental 
integrated  pollution 
prevention  and  control,  waste  management;  consumer  protection;  asylum,  judicial  co-
operation;  fight  against  drugs;  protection  of  the  EU's  financial  interests;  and  the 
translation of the acquis into Bulgarian. 

legislation,  water  quality, 

There remain six areas of serious concern, which require urgent action: 

–  setting up a proper integrated administration and control system (IACS) in agriculture 

(acquis chapter 7); 

–  building-up of rendering collection and treatment facilities in line with the acquis on 

TSE and animal by-products (acquis chapter 7); 

–  clearer evidence of results in investigating and prosecuting organised crime networks 

(acquis chapter 24); 

–  more  effective  and  efficient  implementation  of  laws  for  the  fight  against  fraud  and 

corruption (acquis chapter 24); 

–  intensified enforcement of anti-money laundering provisions (acquis chapter 24); 

–  strengthened  financial  control  for  the  future  use  of  structural  and  cohesion  funds 

(acquis chapter 28). 

2.2. 

Romania 

Political criteria 

Romania fulfils the political criteria for EU membership. 

Since the October 2005 report, there has been progress in a number of areas. Significant 
steps  have  been  taken  in  the  reform  of  the  judiciary.  Implementing  measures  were 
adopted as regards the specialised court sections and panels, following the 2005 justice 
reform.  The  process  of  randomly  allocating  cases  to  judges  continues  to  function 
throughout  the  country.  It  has  enhanced  the  impartiality  of  the  justice  system.  The 
Directorate  General  for  Protection  and  Anticorruption,  the  Ministry  of  Justice’s  part-
militarised  security  service,  was  abolished.  The  resources  of  the  justice  system  have 
increased, including those of the Superior Council of the Magistracy. Working conditions 
in courts have improved. 

Romania has made progress in fighting corruption, by establishing sound structures and 
launching  investigations  into  a  considerable  number  of  high-level  corruption  cases. 
Following such investigations, four senior figures have been indicted. 

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Regarding  public  administration  reform,  the  civil  service  statute  was  revised  and 
decentralisation  legislation  was  adopted.  Certain  progress  has  taken  place  in  fighting 
trafficking  in  human  beings,  as  well  as  in  the  reform  of  the  systems  of  care  for  the 
disabled and the mentally ill. Romania has made significant progress in the area of child 
protection,  where  the  overall  situation  has  substantially  improved.  Progress  has  been 
made on property restitution. 

However,  certain  outstanding  issues  remain  to  be  addressed.  As  regards  the  justice 
system, the procedural codes need to be further rationalised. The Superior Council of the 
Magistracy should step up its activities to promote the uniform interpretation of the law 
and check the quality of judgements. Courts and prosecutor offices need to make better 
use of available resources. 

In the fight against high-level corruption, Romania needs to continue efforts with a view 
to  consolidating  and  building  on  the  progress  made  in  its  fight  against  corruption.  The 
reforms  led  by  the  Ministry  of  Justice  and  the  National  Anti-Corruption  Directorate 
(DNA) need to be followed by sustained efforts of all other state institutions so that the 
progress made becomes irreversible.  

In the area of public administration, the government continued to have extensive recourse 
to emergency ordinance, which is detrimental to the parliament. The review of the public 
sector  pay  scale  remains  of  particular  importance  for  professional  ethics  in  the  civil 
service. Romania remains a country of transit and to a lesser extent a country of origin 
and  destination  for  trafficking  in  human  beings.  Follow-up  of  cases  of  ill-treatment  in 
custody  remains  rare  and  some  prisons  suffer  from  overcrowding  and  poor  living  and 
sanitation  conditions.  Living  conditions  in  psychiatric  institutions  are  in  need  of 
improvement. The national strategy for the disabled and other policy initiatives need to 
be implemented. Social inclusion of the Roma minority still requires substantial efforts. 
The  debate  on  the  draft  law  on  minorities  in  parliament  should  be  closely  followed. 
Additional efforts are also needed to combat racism, discrimination, xenophobia and all 
forms of intolerance. 

Economic criteria  

Romania  is  a  functioning  market  economy.  Vigorous  implementation  of  its  structural 
reform programme should enable it to fully meet the economic criteria in the near term. 
Romania  has  broadly  maintained  macroeconomic  stability  and  advanced  structural 
reforms. 

Progress has continued since the October 2005 report. More appropriate fiscal, monetary 
and wage policies have been adopted. Tax compliance was enhanced, corporate financial 
discipline  was  better  enforced  and 
improved. 
Restructuring continued in the energy, mining and transport sectors. 

the  bankruptcy  framework  was 

However,  public  expenditure  reform  must  be  advanced  and  tax  revenue  should  be 
strengthened.  Deepening  of  structural  reforms  notably  requires 
the  continued 
restructuring  of  the  energy,  mining  and  transport  sectors  and  progress  in  implementing 
the  privatisation  programme.  New  arrears  are  still  accumulating  and  the  bankruptcy 
framework still suffers from shortcomings. 

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Commitments and requirements arising from the accession negotiations 

Romania has reached a considerable degree of alignment with the acquis. 

The October 2005 report concluded that Romania would be ready by accession in a large 
number of areas. A number of other areas required increased efforts, and 14 areas gave 
rise to serious concern. 

Since then, further progress has been made. Romania should be ready by accession in the 
following  additional  areas  if  the  current  pace  of  progress  is  maintained:  public 
procurement, protection of personal data; animal welfare; fisheries resource, fleet, control 
and  market  policies;  regional  policy  legislation;  visa  policy;  customs  preparations;  and 
protection of the EU's financial interests. 

Progress has also been made in a number of areas, which no longer give rise to serious 
concern  but  still  require  increased  efforts  to  complete  preparations:  protection  of 
intellectual  property  rights;  veterinary  border  inspection  posts  and  animal  identification 
and  registration,  animal  diseases  control  measures,  and  veterinary  aspects  of  public 
health; institutional and financial management structures for regional policy ; industrial 
pollution  prevention  and  control;  Schengen  preparations  and  management  of  the  future 
EU external borders, and fight against fraud and corruption. 

Increased  efforts  are  also  needed  for:  industrial  product  horizontal  and  procedural 
measures;  product  requirements  under  the  old  approach  including  the  production  and 
marketing  of  GMOs;  EU  citizens'  rights;  freedom  to  provide  non-financial  services; 
capital  requirements  for  banks  and  investment  funds,  motor  insurance;  fight  against 
money laundering; State aid control and steel restructuring programmes implementation; 
most  agriculture  common  market  organisations,  quality  policy,  agriculture  trade 
mechanisms,  zootechnics,  animal  nutrition,  trade  in  live  animals  and  animal  products; 
structural actions in fisheries; VAT, direct taxation; labour law, occupational health and 
safety,  social  dialogue,  social  inclusion,  equal  treatment  of  women  and  men,  the 
European  Social  Fund;  public  health;  Community  Youth  programme;  audio-visual 
policy;  regional  policy  monitoring;  horizontal  environmental 
legislation,  nature 
protection,  waste  management,  water  quality,  police  co-operation  and  fight  against 
organised  crime,  judicial  co-operation,  fight  against  drugs;  public  internal  financial 
control, external audit and control over structural actions expenditure; and the translation 
of the acquis into Romanian. 

There remain four areas of serious concern, which require urgent action: 

–  accrediting fully operational paying agencies for handling direct payments to farmers 
and  operators  under  the  common  agriculture  policy,  building  on  progress  made 
(acquis chapter 7); 

–  setting up a proper integrated administration and control system (IACS) in agriculture, 

building on progress made (acquis chapter 7); 

–  building-up of rendering collection and treatment facilities in line with the acquis on 

TSE and animal by-products (acquis chapter 7); 

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–  tax administration IT systems ready for inter-operability with those of the rest of the 
Union,  to  enable  a  correct  collection  of  VAT  throughout  the  EU  internal  market 
(acquis chapter 10). 

3. 

SAFEGUARDS AND OTHER MEASURES 

It  is  the  responsibility  of  the  authorities  of  both  countries  to  take  all  the  necessary 
measures to address the outstanding issues identified in this Report, so as to be able to 
carry  out  their  obligations  under  the  acquis  upon  accession.  This  concerns  mainly  the 
areas  giving  rise  to  serious  concern,  but  also  areas  identified  in  this  report  as  requiring 
increased efforts. 

Failure  to  do  so  would  lead  the  Commission,  as  guardian  of  the  Treaties,  to  take  the 
necessary preventive or remedial action to safeguard the functioning of EU policies. 

This part sets out the safeguards and other measures which could be imposed in the event 
of certain shortcomings not having been adequately addressed upon accession. These are 
outlined  in  three  broad  areas:  the  internal  market,  the  judiciary  and  fight  against 
corruption, and the disbursement of EU funds.  

3.1. 

Internal market 

The  acquis  itself  and  the  Accession  Treaty  provide  for  a  certain  number  of  safeguard 
measures in the event that Bulgaria or Romania is not able to abide by all its obligations 
upon  accession.  The  Accession  Treaty  safeguard  can  be  taken  up  to  three  years  after 
accession.  Other  instruments,  such  as  the  infringement  procedure,  and  the  enforcement 
mechanisms for competition rules, may also be applied. 

This section covers both the four freedoms, and the EU policies on competition, energy, 
transport,  environment,  telecommunication,  taxation,  agriculture  and  consumer  and 
health protection insofar as they have cross-border effects. 

Regarding  transmissible  spongiform  encephalopathies,  the  acquis  requires  rendering 
collection and treatment facilities to be fit to ensure that no specified risk materials return 
into  the  animal  feed  chain.  Bulgaria  and  Romania  still  need  to  build  up  such  treatment 
facilities.  If  this  situation  is  not  remedied  upon  accession,  the  Commission  will  take  a 
decision  on  the  basis  of  the  acquis  in  order  to  prevent  the  related  animal  products 
awaiting treatment from returning into the feed chain. 

The  EU  framework  for  VAT  and  excise  duties  foresees  computerised  systems 
interconnected  within  the  EC  data  systems.  Romania's  preparations  need  to  be 
accelerated  to  ensure  that  its  IT  systems  are  fully  operational  and  ready  for 
interconnection upon accession. Otherwise the abolition of the fiscal borders will not be 
possible upon accession and the Commission will take measures based on Article 37 of 
the Act of Accession to maintain physical fiscal controls at the internal borders between 
Romania and the rest of the EU. 

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3.2. 

Justice, freedom and security 

Judiciary and fight against corruption 

The  Accession  Treaty  provides  for  safeguard  measures  for  up  to  three  years  from 
accession,  in  the  event  that  Bulgaria  or  Romania  is  not  able  to  abide  by  its  obligations 
pertaining to judicial co-operation.  

If implementation of reforms in the justice system is not sufficiently advanced in either 
country before accession, or if the fight against corruption in the judiciary has not yielded 
sufficient tangible results, the Commission will establish on the basis of Article 38 of the 
Act of Accession a mechanism for further monitoring in this area. 

The mechanism would be in place for up to three years and would require a yearly report 
to the Commission on progress in implementing  reforms in the judiciary and in  related 
law  enforcement  bodies,  and  on  anti-corruption  measures  affecting  them.  The  decision 
establishing  the  mechanism  would  contain  benchmarks  tailored  to  the  specific 
shortcomings observed in each country, and against which progress will be measured. 

The  Commission  would  report  yearly  on  the  results  of  the  mechanism  to  the  European 
Parliament and Council. Should either country fail to address shortcomings adequately, 
the Commission would adopt safeguard measures suspending obligations of the current 
Member States to automatically recognise judgements or execute warrants issued by that 
country's courts or prosecutors. 

Fundamental rights 

The  European  Monitoring  Centre  on  Racism  and  Xenophobia  monitors  the  protection 
and integration of minorities in the Member States. Upon the accession of Bulgaria and 
Romania, its remit or that of its successor agency will be extended to those countries. 

3.3. 

Disbursement of EU funds 

Disbursement  of  EU  funds  affects  the  livelihood  of  citizens  and  economic  operators  in 
the  new  Member  States,  as  well  as  the  overall  balance  of  financial  transfers  between 
those countries and the Community budget. 

A Member State needs to offer the necessary guarantees on proper spending of EU funds 
under  shared  management,  i.e.  the  Common  Agricultural  Policy  and  the  Structural  and 
Cohesion Funds. Any shortcoming in this respect may delay the disbursement of funds or 
give rise to subsequent claims by the Commission for financial corrections or recovery. 

In  the  area  of  agriculture,  accredited  paying  agencies  as  well  as  a  proper  integrated 
administration and control system (IACS) are necessary for handling direct payments to 
farmers  and  operators.  In  Romania,  the  paying  agencies  are  not  fully  operational  and 
accredited. A proper IACS is not set up in Bulgaria and Romania. If this is not remedied, 
in  addition  to  the  existing  mechanisms,  the  Commission  may  take  measures  based  on 
Article 37 of the Act of Accession to withhold payments to Bulgaria or Romania. 

Implementation of EU structural actions requires effective programming and monitoring 
structures,  as  well  as  financial  management  and  control  systems,  including  for 

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procurement.  Bulgaria's  preparations  for  the  control  over  structural  funds  expenditure 
need improvement. If these are not remedied, this would delay the release of payments 
by the Commission. 

4. 

CONCLUSION 

Bulgaria  and  Romania  have  continued  to  make  progress  in  their  preparations  for 
membership. In many areas the countries are generally meeting their commitments or are 
on track to fulfil the acquis requirements. However, a number of outstanding issues still 
need  to  be  addressed.  Some  of  these  require  increased  efforts,  and  in  a  few  cases 
immediate action is needed. 

The  Accession  Treaty  provides  that  Bulgaria  and  Romania  will  join  in  2007  unless  the 
Council  decides,  upon  a  recommendation  from  the  Commission,  to  postpone  the 
accession of either country until 2008. The Council may so decide: 

–  by qualified majority, if serious shortcomings have been observed in the fulfilment by 
Romania of one or more of a number of the specific commitments and requirements 
related to justice and home affairs and competition policy, listed in Annex IX to the 
Act of Accession, or 

–  by unanimity, if there is clear evidence that the state of preparations for adoption and 
implementation  of  the  acquis  in  Bulgaria  or  Romania  is  such  that  there  is  a  serious 
risk  of  either  country  being  manifestly  unprepared  to  meet  the  requirements  of 
membership by 1 January 2007 in a number of important areas. 

In  the  light  of  the  overall  progress  made  by  Bulgaria  and  Romania  assessed  in  the 
accompanying  Monitoring  Reports  and  summarised  in  this  communication,  the 
Commission considers that Bulgaria and Romania should be prepared for membership by 
1 January 2007, provided that they address a number of outstanding issues. 

An  impartial,  independent  and  effective  justice  system  properly  equipped  to  fight 
corruption  and  organised  crime  is  of  paramount  importance,  as  it  underpins  the 
functioning of the whole society and economy. In this regard: 

–  Bulgaria needs to demonstrate clear evidence of results in the fight against corruption, 
in particular high-level corruption, notably in terms of investigations and subsequent 
judicial proceedings. 

–  Building  on  progress  already  made,  Romania  needs  to  continue  its  efforts  and 
demonstrate further results in the fight against corruption, notably in terms of further 
investigations and subsequent judicial proceedings. 

–  Bulgaria  needs  to  further  reform  the  judiciary,  in  particular  to  reinforce  its 
transparency,  efficiency  and  impartiality,  and  remove  any  ambiguity  regarding  its 
independence. 

–  Building on progress already made Romania needs to consolidate the implementation 
of the ongoing judicial reforms, and further enhance the transparency, efficiency and 
impartiality of the judiciary. 

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In addition, Bulgaria needs to:  

–  demonstrate  clearer  evidence  of  results  in  investigating  and  prosecuting  organised 
crime networks; implement more effectively and efficiently laws for the fight against 
fraud and corruption; intensify the enforcement of anti-money laundering provisions; 
set  up  a  proper  integrated  administration  and  control  system  (IACS)  in  agriculture; 
build  up  the  necessary  rendering  collection  and  treatment  facilities  in  line  with  the 
acquis on TSE and animal by-products; and strengthen financial control for the future 
use of structural and cohesion funds. 

In addition, Romania needs to:  

–  accredit paying agencies for handling common agriculture policy expenditure; set up a 
proper  integrated  administration  and  control  system  in  agriculture;  build  up  the 
necessary rendering collection and treatment facilities in line with the acquis on TSE 
and animal by-products; and ensure that the tax administration IT systems are ready 
for inter-operability with those of the rest of the Union, to enable a correct collection 
of VAT throughout the EU internal market. 

The  Commission  will  report  on  Bulgaria's  and  Romania's  progress  in  addressing  the 
outstanding  issues  no  later  than  early  October.  On  this  basis,  the  Commission  will 
consider  whether  the  date  of  their  accession  to  the  European  Union  on  1  January  2007 
can  be  maintained.  This  report  will  also  specify  any  areas  where  safeguards  or  other 
remedial measures may be needed upon accession. 

EN 

11 

   EN