COMMISSION STAFF WORKING DOCUMENT COMPREHENSIVE MONITORING REPORT ON CROATIA accompanying the document COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL Comprehensive Monitoring Report on Croatia’s state of preparedness for EU membership
Date: 2012-10-10
Institutions: European Commission
Subjects: Community acquis, Croatia, accession criteria, economic reform, political reform, transitional period (EU)

EUROPEAN 
COMMISSION 

Brussels, 10.10.2012  
SWD(2012) 338 final 

COMMISSION STAFF WORKING DOCUMENT 

COMPREHENSIVE MONITORING REPORT ON CROATIA 

accompanying the document 

COMMUNICATION FROM THE COMMISSION 
TO THE EUROPEAN PARLIAMENT AND THE COUNCIL 

Comprehensive Monitoring Report on Croatia’s state of preparedness for EU 
membership 

{COM(2012) 601 final}

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TABLE OF CONTENTS 

1. 

2. 

3. 

3.1. 

3.2. 

4. 

4.1. 

4.2. 

4.3. 

4.4. 

4.5. 

4.6. 

4.7. 

4.8. 

4.9. 

Introduction .................................................................................................................. 4 

Political criteria ............................................................................................................ 5 

Economic criteria ....................................................................................................... 10 

The existence of a functioning market economy ....................................................... 10 

Capacity to cope with competitive pressure and market forces within the Union..... 12 

Commitments and requirements arising from the accession negotiations ................. 13 

Chapter 1: Free movement of goods .......................................................................... 14 

Chapter 2: Freedom of movement for workers .......................................................... 15 

Chapter 3: Right of establishment and freedom to provide services ......................... 15 

Chapter 4: Free movement of capital ......................................................................... 16 

Chapter 5: Public procurement................................................................................... 17 

Chapter 6: Company law............................................................................................ 18 

Chapter 7: Intellectual property law........................................................................... 19 

Chapter 8: Competition policy ................................................................................... 19 

Chapter 9: Financial services ..................................................................................... 20 

4.10.  Chapter 10: Information society and media ............................................................... 21 

4.11.  Chapter 11: Agriculture and rural development......................................................... 22 

4.12.  Chapter 12: Food safety, veterinary and phytosanitary policy .................................. 23 

4.13.  Chapter 13: Fisheries.................................................................................................. 24 

4.14.  Chapter 14: Transport policy ..................................................................................... 25 

4.15.  Chapter 15: Energy .................................................................................................... 26 

4.16.  Chapter 16: Taxation.................................................................................................. 27 

4.17.  Chapter 17: Economic and monetary policy.............................................................. 28 

4.18.  Chapter 18: Statistics.................................................................................................. 28 

4.19.  Chapter 19: Social policy and employment ............................................................... 29 

4.20.  Chapter 20: Enterprise and industrial policy.............................................................. 30 

4.21.  Chapter 21: Trans-European networks....................................................................... 31 

4.22.  Chapter 22: Regional policy and coordination of structural instruments .................. 31 

4.23.  Chapter 23: Judiciary and fundamental rights ........................................................... 32 

4.24.  Chapter 24: Justice, freedom and security ................................................................. 37 

4.25.  Chapter 25: Science and research .............................................................................. 41 

4.26.  Chapter 26: Education and culture............................................................................. 42 

4.27.  Chapter 27: Environment and climate change ........................................................... 43 

4.28.  Chapter 28: Consumer and health protection............................................................. 45 

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4.29.  Chapter 29: Customs union........................................................................................ 46 

4.30.  Chapter 30: External relations.................................................................................... 47 

4.31.  Chapter 31: Foreign, security and defence policy...................................................... 47 

4.32.  Chapter 32: Financial control..................................................................................... 48 

4.33.  Chapter 33: Financial and budgetary provisions........................................................ 49 

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1. 

INTRODUCTION 

Accession  negotiations  with  Croatia  were  closed  in  June  2011.  After  the  Commission’s 
favourable  opinion,  the  European  Parliament’s  assent  and  the  Council  decision  on  the 
admission  of  Croatia,  the  Accession  Treaty  was  signed  on  9  December  2011.  Croatia  will 
become  a  Member  of  the  European  Union  on  1  July  2013,  subject  to  the  Accession  Treaty 
being  ratified  by  all  Member  States.  As  an  acceding  country,  Croatia  has  active  observer 
status during the interim period before accession.  

In the course of the negotiations, Croatia has agreed to a number of commitments, which have 
to  be  implemented  by  the  date  of  accession,  at  the  latest,  unless  specific  transitional 
arrangements have been agreed. 

Article  36  of  the  Act  of  Accession  requires  the  Commission  to  closely  monitor  all 
commitments  undertaken  by  Croatia  in  the  accession  negotiations,  focusing  in  particular  on 
competition  policy,  judiciary  and  fundamental  rights,  and  freedom,  security  and  justice. 
Moreover, as an integral part of its regular monitoring tables and reports the Commission is to 
issue  six-monthly  assessments  up  to  accession  on  the  implementation  of  Croatia’s 
commitments  in  these  areas.  The  Commission  adopted  a  Monitoring  Report  on  Croatia’s 
accession preparations in April 20121 and Croatia developed an action plan to follow up on its 
recommendations. The Act further provides for the Commission to present a Comprehensive 
Monitoring Report to the European Parliament and the Council in autumn 2012. 

In  line  with  Article  36  of  the  Act  of  Accession,  this  Comprehensive  Monitoring  Report 
assesses the progress made by Croatia in its preparations for accession in the period October 
2011  to  September  2012,  provides  an  overall  assessment  of  the  level  of  preparedness  for 
membership  and  highlights  the  areas  in  which  further  efforts  are  necessary  in  order  for 
Croatia to be ready for membership on 1 July 2013.  

Furthermore,  Article  36  of  the  Act  of  Accession  provides  that  if  issues  of  concern  are 
identified during the monitoring process and not remedied by Croatia, the Commission will, if 
necessary,  address  early  warning  letters  to  the  Croatian  authorities  and  may  propose  to  the 
Council  that  all  appropriate  measures  be  taken even  before  accession.  In  addition,  as  in  the 
previous enlargement, the Act of Accession contains a general economic safeguard clause, an 
internal market safeguard clause and a safeguard clause on justice, freedom and security. 

The report contains three main parts: 

–  The  first  part  briefly  describes  the  situation  with  regard  to  compliance  with  the  political 

criteria. 

–  The  second  part  describes  the  situation  with  regard  to  compliance  with  the  economic 

criteria. 

–  The  third  part  gives  an  overview  of  where  Croatia  stands  in  terms  of  fulfilling  all  of  the 
commitments  and  requirements  arising  from  the  accession  negotiations  for  each  acquis 
chapter,  both  in  terms  of  legislation  and  implementation,  as  well  as  the  overall  level  of 
preparedness for each acquis chapter.  

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COM(2012) 186 final. 

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This assessment is based on information gathered and analysed by the Commission, including 
input  provided  by  Croatia,  and  information  shared  by  Member  States  and  international  and 
civil society organisations  in their regular contacts with the Commission. The assessment is 
also  based  on  the  Commission’s  findings  in  its  updated  Monitoring  Tables,  a  working  tool 
aimed  at  following  up  in  detail  on  all  of  Croatia’s  commitments  in  the  context  of  the 
negotiations.  

Through this report, the Commission also aims to assist Croatia in its further preparations for 
membership.  

In  this  context,  Croatia  must  ensure  that  the  EU  acquis  is  translated  into  Croatian.  Of  the 
nearly 144 000 pages of acquis, Croatia has already translated about 114 000 pages. However, 
about 50% of these already translated pages have still to be revised by the national authorities 
before they can be submitted to the EU institutions. 

Croatia  should  further  increase  its  capacity  to  ensure  the  completion  of  the  translation  and 
revision of the acquis in time for accession. The Commission calls on the Croatian authorities 
to  maintain  focus  on  this  issue,  which  is  essential  in  order  to  ensure  legal  certainty  in  the 
implementation of EU legislation. With regard to financial assistance, the 2012 Instrument for 
Pre-accession Assistance (IPA) programmes totalled € 156 million. This assistance is focused 
on  institution-building  and  preparing  for  implementation  of  the  EU’s  common  agricultural 
policy  and  cohesion  policy.  In  addition,  Croatia  continued  to  benefit  from  regional  and 
horizontal programmes.  

Overall,  Croatia  has  demonstrated  that  the  decentralised  implementation  system  under  the 
IPA functions satisfactorily, although some delays were encountered in implementation. The 
Court of Auditors issued a report on EU pre-accession assistance in Croatia in February 2012. 
The findings of the Court will be followed up by the Commission and addressed in bi-annual 
reports  by  Croatia.  Croatia  has  submitted  to  the  Commission  its  request  to  waive  ex  ante 
controls by the date of accession, in accordance with the provisions in the Accession Treaty. 
A  transition  facility  has  been  agreed  for  the  first  year  following  accession  to  strengthen 
judicial and administrative capacity. 

The Commission has drawn conclusions regarding Croatia in its separate Communication on 
Croatia’s state of preparedness for EU membership2, based on the technical analysis contained 
in this report. 

2. 

POLITICAL CRITERIA  

This  section  examines  Croatia’s  compliance  with  the  Copenhagen  political  criteria,  which 
require  stability  of  institutions  guaranteeing  democracy,  the  rule  of  law,  human  rights  and 
respect  for  and  protection  of  minorities.  It  also  monitors  regional  cooperation,  good 
neighbourly  relations  with  enlargement  countries  and  Member  States,  and  compliance  with 
international obligations, such as cooperation with the International Criminal Tribunal for the 
former Yugoslavia (ICTY). 

Issues  relating  to  the  judiciary,  corruption  and  human  rights  are  dealt  with  in  more  detail 
under Chapter 23 – Judiciary and fundamental rights, which also addresses cooperation with 
the International Criminal Tribunal for the former Yugoslavia (ICTY) and war crimes. 

2 

Comprehensive Monitoring Report on Croatia’s state of preparedness for EU membership, COM(2012) 
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Parliament / Election issues  

Parliamentary  elections  were  held  in  December  2011  and  a  new  government  appointed 
thereafter.  Elections  took  place  in  a  pluralistic  environment  and  were  administered  in  an 
efficient  and  transparent  manner.  However,  improvements  are  necessary  with  regard  to 
maintenance of the voters’ list and work has been initiated in this respect. This needs to be 
addressed as a matter of urgency, with a view to local elections and the election of Croatia’s 
members to the European Parliament scheduled for spring 2013.  

Public administration  

The  implementation  of  the  State  Administration  Reform  Strategy  (2008-2011)  has  been 
finalised.  No  follow  up  strategy  has  been  developed.  The  Civil  Service  Human  Resources 
Development Strategy (2010-2013) is being implemented. Amendments to the Civil Service 
Act entered into force, providing for increased mobility among civil servants. The process of 
harmonising the relevant sectoral legislation with the General Administrative Procedures Act 
has continued and almost reached completion. The legal framework on salaries, necessary to 
ensure  merit-based  promotion  and  reward  mechanisms  and  to  attract  and  retain  qualified 
personnel, still remains to be finalised.  

The administrative capacity to implement and monitor public administration reform requires 
further attention, in particular at local level. Further efforts are needed with regard to training 
staff  of  the  Ministry  of  Public  Administration  and  other  line  ministries,  in  particular  with  a 
view  to  their  role  in  the  future  management  of  the  Structural  Funds.  The  State  School  for 
Public  Administration  needs  to  be  further  strengthened.  Increased  efforts  are  required  to 
strengthen  administrative  capacity  for  the  future  implementation  of  cohesion  policy  and  to 
develop a mature project pipeline. 

Further  efforts  are  needed  to  improve  the  professionalism  of  the  public  service.  Efficient 
implementation of the relevant legal framework is necessary in order to continue building a 
modern, reliable, transparent and citizen-oriented public administration. In view of the recent 
substantial  restructuring  of  the  public  administration,  and  taking  into  account  the  additional 
responsibilities  of  EU  membership,  Croatia  should  address  without  delay  the  administrative 
capacity constraints identified in this Comprehensive Monitoring Report and ensure that the 
completion of preparations for EU membership is not affected.  

Judicial system (See also Chapter 23 – Judiciary and fundamental rights) 

Implementation  of  the  judicial  reform  strategy  and  action  plan  has  continued,  along  with 
efforts to strengthen the independence, accountability, impartiality and professionalism of the 
judiciary.  The  reformed  State  Judicial  Council  (SJC)  and  State  Prosecutorial  Council  (SPC) 
have  continued  to  function  independently.  Both  bodies  have  continued  to  appoint  judicial 
officials based on transparent, uniform  and objective  criteria. Efforts are needed to improve 
their functioning especially in order for them to carry out their increased tasks. Improvements 
are  needed  in  the  procedures  leading  to  the  selection  and  assignment  of  new  judges  and 
prosecutors.  Croatia  has  continued  to  implement  various  measures  aiming  at  improving  the 
efficiency  of  the  judiciary.  While  the  backlog  of  old  criminal  cases  continues  to  fall,  the 
number of old civil cases has increased over the last 18 months. This general trend of increase 
of  unresolved  cases,  mainly  civil,  commercial,  misdemeanours  and  enforcement  cases  is  a 
matter  of  concern.  The  merger  of  courts  as  part  of  the  court  rationalisation  process  is 
continuing,  as  is  the  functional  rationalisation  of  the  state  prosecutor’s  offices.  The  revised 
enforcement system needs to be adopted and implemented in order to lead to further concrete 
results.  

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Anti-corruption policy (See also Chapter 23 – Judiciary and fundamental rights)  

An  adequate  legal  and  institutional  framework  remains  in  place  and  a  track  record  of 
implementation  continues  to  be  developed.  Law  enforcement  bodies  remain  proactive, 
especially on higher-level cases. Local-level corruption needs attention, particularly in public 
procurement.  Croatia  has  improved  its  track  record  of  strengthened  prevention  measures  by 
means  of  a  number  of  legal  instruments.  However,  Croatia  has  not  fully  implemented  the 
conflict  of  interest  legislation  and  has  overturned  the  previous  provisions  on  the  criteria  for 
membership of supervisory and management boards of public companies. Some initial steps 
have been taken for the setting up of the Conflict of Interest Commission, with the publication 
of the request for expression of interests for the selection of the Commission’s members. The 
Commission  needs  to  be  established  and  start  operating  without  delay.  The  scope  and 
implementation  of  access  to  information  legislation  requires  attention.  As  regards  the 
financing  of  political  parties  and  election  campaigns,  the  State  Electoral  Commission,  the 
supervisory body, was strengthened and the new rules from 2011 were applied without major 
difficulties, with only a few shortcomings identified.  

Human  rights  and  the  protection  of  minorities  (See  also  Chapter  23  –  Judiciary  and 
fundamental rights) 

Human  rights  continue  to  be  generally  well  respected.  The  general  Ombudsman  and 
specialised  ombudspersons  continue  to  play  an  important  role  in  human  rights  protection. 
However,  there  has  been  no  proper  follow-up  of  the  Ombudsman’s  recommendations.  The 
gay  pride  events  in  Split  and  Zagreb  took  place  without  major  incidents,  with  strong 
commitment  from  the  Croatian  government  to  their  smooth  organisation.  Lesbians,  gays, 
bisexual  and  trans-gender  (LGBT)  people  still  face  discrimination  and  even  threats  and 
attacks.  

Protection of minorities has continued to improve, through the continued implementation of 
measures including the Constitutional Act on the Rights of National Minorities. However, the 
minority  employment  in  the  state  administration  and  judiciary  remains  below  the  level 
required by the act. In line with the Constitution, eight representatives of national minorities 
were elected in the parliamentary elections of December 2011. Croatia needs to foster a spirit 
of tolerance towards minorities, in particular Croatian Serbs and to take measures to protect 
those who may still be subjected to threats or acts of discrimination, hostility or violence. The 
Roma  minority  faces  particularly  difficult  living  conditions,  and  challenges  remain  in  the 
areas  of  education,  social  protection,  health  care,  employment  and  access  to  personal 
documents.  

The situation with regard to refugee return issues has improved and the implementation of the 
housing  care  programmes  continues,  although  at  a  slower  pace.  Conditions  for  sustainable 
refugee return need to be further developed.  

Freedom  of  expression,  including  freedom  and  pluralism  of  the  media  is  provided  for  in 
Croatian law and is generally respected. A new law on the public broadcaster was adopted in 
July  2012.  Continued  efforts  are  needed  to  ensure  the  independence  of  the  public  service 
broadcaster and to increase its transparency. 

ICTY and war crimes (See also Chapter 23 - Judiciary and fundamental rights) 

Croatia  continues  to  cooperate  with  the  International  Criminal  Tribunal  for  the  former 
Yugoslavia (ICTY). Croatia has continued to process war crimes cases including the priority 
cases  identified  at  the  national  and  regional  level  linked  to  the  2011  strategy  on  impunity. 
More  cases  were  transferred  to  the  specialised  chambers.  However,  efforts  to  address 
impunity  for  war  crimes  should  be  intensified,  as  the  majority  of  crimes  have  yet  to  be 

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successfully prosecuted. Measures need to be taken to facilitate the attendance of witnesses at 
trial, especially in cases relocated to specialised chambers. 

Regional cooperation  

Croatia  has  continued  the  dialogue  with  neighbouring  countries  in  order  to  address  open 
bilateral  issues.  The  Declaration  of  the  Croatian  Parliament  of  October  2011  on  promoting 
European  values  in  south-east  Europe  emphasised  Croatia’s  firm  commitment  to  supporting 
the other countries of the region on their path to EU integration. 

Croatia continued to engage in cooperation on war crimes at bilateral and regional level and 
cooperation  between  judicial  authorities,  in  particular  prosecutors,  continued  to  be  good. 
Discussions are ongoing with Serbia on a cooperation agreement, aimed also at addressing the 
potentially  negative  implications  of  the  Law  on  invalidation  of  certain  legal  acts  of  the 
judicial bodies of the Former Yugoslav National Army, the former Socialist Federal Republic 
of Yugoslavia and of the Republic of Serbia adopted in October 2011. 

Croatia has continued to contribute actively to the Sarajevo Declaration Process. A ministerial 
declaration  was  signed  in  November  2011  in  Belgrade  renewing  political  commitment  to 
bringing this chapter to a close. An international donors’ conference was held in April 2012 in 
Sarajevo  to  secure  funding  for  a  durable  solution  for  all  refugees  in  the  region  who  were 
displaced  as  a  result  of  the  armed  conflicts  in  the  former  Yugoslavia  in  the  1990s.  Croatia 
needs to allocate the necessary additional funding. 

The  unresolved  fate  of  missing  persons  from  the  conflicts  in  the  1990s  remains  a 
humanitarian  concern  in  the  Western  Balkans.  As  of  August  2012,  there  were  still 
approximately 13,250 people missing from the conflicts in the region. Of these, some 9,550 
were related to the conflict in Bosnia and Herzegovina, approximately 1,900 to the conflict in 
Croatia  and  over  1,800  to  the  conflict  in  Kosovo∗.  In  the  past  year  approximately  1,100 
remains  were  identified  at  regional  level.  A  comprehensive  process  to  review  the  cases  of 
missing persons needs to be carried out as an important step in the reconciliation process in 
the region. 

Bilateral relations with other enlargement countries and neighbouring EU Member States 

Relations  with  other  enlargement  countries  and  neighbouring  EU  Member  States  are 
continuing to improve. A number of bilateral and regional issues, including succession issues, 
remain to be addressed.  

The  second  informal  meeting  of  the  Presidents  of  Croatia,  Serbia  and  the  Bosnia  and 
Herzegovina Presidency took place in February 2012, focusing on the fight against organised 
crime and economic cooperation. 

Croatia  continues  to  have  good  relations  with  Albania  and  the  former  Yugoslav  Republic  of 
Macedonia. 

Relations with Bosnia and Herzegovina  have  intensified.  A  number  of  meetings  have  taken 
place  to  address  the  implications  for  bilateral  relations  of  Croatia’s  accession  to  the  EU.  In 
this  context,  discussions  have  continued  with  regard  to  the  outstanding  issues  on  border 
management, with limited progress. The local border traffic agreement and the agreement on 
free  transit  through  the  port  of  Ploče,  in  Croatia,  and  the  Neum  corridor,  in  Bosnia  and 
Herzegovina, should be aligned with the EU acquis and ready before accession (See Chapter 
24 – Justice, freedom and security). Urgent attention should be paid to complete preparations 

∗ 

This designation is without prejudice to positions on status, and is in line with UNSCR 1244 and the 
ICJ Opinion on the Kosovo Declaration of Independence. 

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for  border  inspection  posts  (See  Chapter  12  –  Food  safety,  veterinary  and  phytosanitary 
policy).  Limited  progress  was  achieved  in  resolving  outstanding  issues,  including  property 
issues  and  border  demarcation.  The  Croatian  government  has  announced  its  intention  to 
initiate the procedure for the ratification of the 1999 Border Agreement.  

Croatia  continues  to  have  good  relations  with  Montenegro.  The  temporary  agreement  on 
Prevlaka continues to function smoothly. There has been no further progress in the procedure 
for submitting the border demarcation to the International Court of Justice.  

Relations  with  Serbia  are  stable,  regardless  of  a  number  of  outstanding  issues  (border 
demarcation,  missing  persons).  The  two  countries  are  working  on  a  bilateral  agreement  on 
war crimes prosecution, aiming at addressing potentially negative implications of the Law on 
invalidation of certain legal acts of the judicial bodies of the former Yugoslav National Army, 
the  former  Socialist  Federal  Republic  of  Yugoslavia  and  the  Republic  of  Serbia,  which  has 
been  challenged  by  the  Croatian  President  at  the  Constitutional  Court.  There  have  been  no 
tangible  results  with  regard  to  border  demarcation  concerning  the  Danube.  The  Serbian 
government submitted its written pleadings supporting its counter-suit against Croatia before 
the International Court of Justice on genocide allegations in November 2011. A Protocol on 
the  return  to  Croatia  of  cultural  assets  taken  during  the  war  in  the  1990s  was  signed,  thus 
resolving an outstanding bilateral issue. 

Relations with Kosovo have been further developed. High-level visits continue to take place. 

Relations with Turkey continue to be good and high-level meetings between the two countries 
were held. 

Croatia continues to have good relations with neighbouring EU Member States Hungary and 
Italy. 

Relations  with  Slovenia  continued  to  improve.  The  procedure  on  the  international  border 
arbitration  between  Croatia  and  Slovenia  has  started.  The  Arbitral  Tribunal  held  its  first 
procedural  meeting  on  13  April  2012,  when  it  was  decided  that  the  parties’  first  memorials 
would  be  simultaneously  submitted  on  11  February  2013,  the  counter-memorials  would  be 
simultaneously submitted on 11 November 2013, and a hearing would be held in the spring of 
2014.  Concerning  the  Ljubljanska  Banka  case  (guarantee  of  foreign  currency  deposits), 
Croatia  has  reconfirmed  its  commitment  to  resuming  negotiations  under  the  auspices  of  the 
Bank for International Settlements. Two experts have been nominated by the parties with the 
aim of finding a mutually acceptable way forward to resolve the issue. 

As  in  previous  years,  Croatia  continues  to  fulfil  the  political  criteria  for  membership.  In  all 
areas  covered  by  the  political  criteria  (stability  of  institutions  guaranteeing  democracy,  the 
rule of law, human rights and respect for and protection of minorities) work has continued and 
results are becoming tangible. Further efforts are needed to continue strengthening the rule of 
law, by improving public administration and the justice system and by fighting and preventing 
corruption  effectively.  Croatia  needs  to  intensify  its  efforts  to  address  impunity  for  war 
crimes. In the area of human rights and the protection of minorities, further efforts are needed. 
Croatia  needs  to  continue  to  foster  a  spirit  of  tolerance  towards  minorities,  in  particular 
Croatian Serbs. The Roma minority continues to face particularly difficult living conditions. 
Regional cooperation and bilateral relations with neighbouring EU Member States and other 
enlargement countries have continued to improve. A number of bilateral issues remain to be 
addressed. 

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3. 

ECONOMIC CRITERIA 

In examining economic developments in Croatia, the Commission’s approach was guided by 
the  conclusions  of  the  European  Council  in  Copenhagen  in  June  1993,  which  stated  that 
membership  of  the  Union  requires  the  existence  of  a  functioning  market  economy  and  the 
capacity to cope with competitive pressure and market forces within the Union. 

3.1. 

The existence of a functioning market economy 

Economic policy essentials 

Croatia’s  Pre-accession  Economic  Programme  (PEP)  for  2012-2014,  submitted  in  March 
2012,  presented  a  comprehensive,  though  optimistic,  macroeconomic  and  fiscal  framework 
for  economic  policies.  The  government  plans  to  consolidate  public  finances  by  reining  in 
expenditures while stimulating economic growth through infrastructure-oriented investments 
by  publicly  owned  companies.  Monetary  policy  continues  to  be  conducted  within  the 
framework of exchange rate stability vis-à-vis the euro. The consensus on the fundamentals of 
a market economy was maintained.  

Macroeconomic stability 

In 2011, annual GDP is estimated to have stagnated (-0.0%) in real terms compared to 2010. 
GDP still declined in the first quarter, then started to expand in the second and third quarters, 
before contracting again in the final quarter. Final domestic demand continued to contract in 
2011, particularly  due to a further  drop in investment  activity (-7.2%). Private consumption 
was slightly positive (+0.2%), but this was partly offset by lower public consumption (-0.3%). 
The  level  of  real  GDP  was  held  up  by  inventory  accumulation,  which  contributed  1.1 
percentage  points  to  growth.  Net  exports  added  0.4  percentage  points  to  GDP  growth  as 
exports  of  goods  and  services  expanded  faster  than  imports.  GDP  per  capita  in  purchasing 
power terms remained unchanged from 2010 at 61% of the EU-27 average. 

The renewed output decline accelerated in the first seven months of 2012. Following a 0.4% 
contraction  in  the  fourth  quarter  of  2011,  GDP  declined  by  1.3%  year-on-year  in  the  first 
quarter  and  by  2.2%  in  the  second  quarter  of  2012.  In  July,  the  monthly  indicators  of 
economic  activity  were  all  sharply  lower  in  real  year-on-year  terms:  retail  sales  by  -5.1%, 
industrial production by -5.5% and construction output by -9.7%. The current account deficit 
narrowed  from  1.1%  of  GDP  in  2010  to  0.9%  in  2011  before  widening  again  in  the  first 
quarter of 2012. Like in the preceding year, Croatia’s trade performance in 2011 indicated a 
lack of international competitiveness. Market share was lost as exports of goods and services 
increased by 2.0% in volume terms while the weighted export market grew by 5.4%. Imports 
of  goods  and  services  in  volume  terms  increased  by  1.2%  although  domestic  demand 
contracted  by  0.6%.  Inflows  of  foreign  direct  investment  were  € 1  billion,  which  was  far 
below the pre-recession level, but 3 times higher than in 2010. Gross external debt declined 
slightly from a revised 105% of GDP at the end of 2010 to 103% at the end of 2011 before 
returning to 105% in mid-2012. Gross international reserves increased from 24.1% of GDP at 
the  end  of  2010  to  25.2%  at  the  end  of  2011  and  further  to  26.1%  at  the  end  of  July  2012 
helped by a large foreign-bond issue by the government in April. Despite a significant stock 
of international reserves, the high level of gross external debt remains a key vulnerability of 
the Croatian economy. 

The labour market continued to deteriorate in 2011. Unemployment was high at 13.5%, a 1.7 
percentage point increase on the previous year. Employment fell by 3.2%. The rising trend of 
unemployment  continued  into  2012.  In  July  the  registered  unemployment  rate  was  0.7 
percentage  points  higher  year-on-year.  There  has  only  been  little  progress  in  reducing  the 
structural weaknesses of Croatia’s labour market, which are reflected in low employment and 

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participation  rates  and  high  rates  of  youth  and  long-term  unemployment.  In  2011,  the 
employment  rate  declined  to  52.4%,  the  participation  rate  fell  to  60.8%,  while  youth 
unemployment increased to 36.1%. 

Consumer price inflation increased from 1.1% in 2010 to 2.3% in 2011, mainly as a result of 
higher international prices for energy and food commodities and their pass-through to related 
domestic prices. A small depreciation of the domestic currency contributed also to the rise in 
the  price  level.  Due  to  the  slack  in  resource  utilisation,  not  least  in  the  labour  market, 
underlying  inflationary  pressures  have  remained  low  on  the  domestic  side.  However,  a  2 
percentage point increase in the general VAT rate and increases in administered energy prices 
have pushed up the year-on-year increase of consumer prices to 2.8% in the first eight months 
of 2012. 

Monetary  policy  succeeded  in  preserving  exchange  rate  and  financial  stability.  It  remained 
oriented towards a tightly managed kuna/euro exchange rate with little variability, but without 
a formal peg to the euro. This monetary framework anchors inflation expectations and reduces 
exchange  rate-related  credit  risks  in  the  highly  euroised  economy.  The  kuna  appreciated  by 
1.4% against the euro between the beginning of October 2011 and 19 September 2012. In this 
period, the central bank stabilized the kuna/euro rate by selling € 724.4 million and by buying 
€ 58.1 million in the foreign exchange market. On two occasions the central bank supported 
the  domestic  currency  by  raising  the  reserve  requirement  rate  for  banks,  but  was  able  to 
reverse most of these increases when the kuna was strengthening. Foreign exchange liquidity 
was expanded by lowering the rate of minimum required foreign exchange currency claims of 
banks  relative  to  their  foreign  currency  liabilities.  Overall,  monetary  policy  was  able  to 
maintain  an  appropriately  accommodative  stance  in  a  context  of  persisting  recessionary 
conditions. 

Fiscal  policy  has,  to  some  extent,  contained  the  negative  budgetary  consequences  of  the 
continuing recession. In 2011 total expenditures of general government were held unchanged 
year-on-year in nominal terms as stipulated by the Croatian parliament in August 2010. The 
share of social transfers in total expenditures was reduced somewhat, but huge scope remains 
for  increasing  the  efficiency  of  public  spending  through  better  targeting  of  social  support. 
Total  revenues  declined  by  0.6%,  mainly  as  a  result  of  changes  in  the  tax  legislation  in  the 
preceding year. Net borrowing by general government increased from a revised 5.0% of GDP 
in  2010  to  5.1%  of  GDP  in  2011.  This  outcome  is  significantly  below  the  budgeted  deficit 
(5.6%  of  GDP)  mainly  because  realised  public  investment  expenditure  was  0.5  percentage 
points  of  GDP  below  budget.  General  government  consolidated  gross  debt  increased  from 
42.2% of GDP at the end of 2010 to 50.5% at the end of June 2012 (excluding outstanding 
state guarantees and the debt of the State Development Bank). A tax reform in February 2012 
included  an  increase  in  the  general  VAT  rate  from  23%  to  25%  and  a  reduction  in  the 
employers’ contribution to the compulsory health insurance from 15% to 13%. The Ministry 
of Finance projects a general government fiscal deficit of 3.9% of GDP in 2012. Revenues are 
budgeted  to  increase  by  1.7%  while  expenditures  are  projected  to  decrease  by  1.2%.  In  the 
first half of 2012, net borrowing of general government amounted to 2.0% of projected full-
year  GDP.  The  Ministry’s  current  budgeting  is  based  on  the  optimistic  assumption  of 
stagnating real GDP in 2012. Overall, the budgetary process continued to show weaknesses. 
The efficiency of public spending needs to be enhanced in order to ensure medium-term fiscal 
sustainability. 

Interplay of market forces 

The private sector’s share of GDP and employment has remained at around 70% of the overall 
economy. In the twelve months to the end of June 2012, the Government Asset Management 

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Agency (GAMA) reduced its holdings from 693 to 649 companies. The proceeds of the sales 
were relatively modest since many of the companies were liquidated in the process. GAMA’s 
remaining  portfolio  consists  predominantly  of  highly  indebted  and  often  loss-making 
companies. Overall, little progress has been made towards reducing the large role of the state 
in the economy. 

Market entry and exit 

The  legal  framework  for  companies  entering  and  leaving  the  market  did  not  change 
significantly in the reporting period. The average number of active legal entities in 2011 was 
9.4%  lower  than  in  2010.  The  investment  climate  remained  hampered  by  difficulties  in 
obtaining  the  necessary  licences,  building  permits  and  other  authorisations;  by  uncertainties 
arising from changes in the legal environment; and by the lack of certainty and uniformity of 
public administration decisions and the length of the related procedures, particularly at local 
level. A large number of non-tax fees at national and local levels continue to be a significant 
burden for entrepreneurs although their number and rates have been reduced. Overall, lengthy 
procedures  and  numerous  non-tax  fees  hamper  business  start-ups  and  the  business 
environment in general. 

Legal system 

The weaknesses of the judicial system continue to hinder the effective enforcement of creditor 
and  property  rights.  The  length  of  court  proceedings  remains  generally  excessive  and 
problems  persist  with  the  enforcement  of  court  decisions.  Investors  still  face  problems 
regarding  the  registration  of  property.  The  business  environment  continues  to  suffer  from 
inefficiencies in the public administration. 

Financial sector development 

The financial sector continued to be dominated by banks, which held 75% of the total assets 
of  financial  intermediaries  at  the  end  of  June  2012.  Market  concentration  has  remained 
moderate,  with  the  four  largest  banks  continuing  to  hold  about  two  thirds  of  total  banking 
assets.  Banking  sector  assets  were  1.9%  higher  year-on-year  at  the  end  of  July  2012  and 
amounted  to  122%  of  GDP.  The  sector  has  remained  stable  and  well  capitalised  with  the 
capital  adequacy  ratio  increasing  to  20.2%  at  the  end  of  June  2012.  Bank  profitability  has 
generally  remained  depressed  since  2009.  There  was  a  slight  improvement  in  the  return  on 
equity for banks in 2010 and 2011 followed by a renewed decrease in the first half of 2012. 
The quality of bank loans continued to deteriorate, with the share of non-performing loans in 
total loans rising by 1.4 percentage points year-on-year to 13.3% at the end of June 2012. The 
largely  unhedged  foreign  exchange  liabilities  of  the  non-financial  private  sector  remain  a 
significant risk. 

3.2. 

Capacity to cope with competitive pressure and market forces within the Union 

Existence of a functioning market economy 

Croatia  is  a  functioning  market  economy.  The  monetary  policy  stance  has  remained 
appropriate  given  the  existing  constraints  imposed  by  the  very  high  level  of  external  debt 
while fiscal policy has contained the rise of the budget deficit under recessionary conditions. 

Human and physical capital 

Further  steps  were  taken  to  improve  the  quality  of  education  at  all  levels.  The  government 
continued its programme of active labour market policy measures, but rigidities in the labour 
market remain a major challenge.  

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Investment  fell  for  a  third  consecutive  year  in  2011,  again  mainly  due  to  a  drop  in 
construction activity. As a share of GDP, investment declined from 21.6% in 2010 to 19.8% 
in 2011. Foreign direct investments, particularly greenfield investments, remained scarce. The 
30  public-sector  investment  projects  (mainly  in  energy,  tourism,  water  management  and 
transport infrastructure) which the government announced in late 2010 have not materialised. 
The  new  government’s  Investment  Cycle  Plan  schedules  investments  by  publicly-owned 
companies,  mainly  through  public-private  partnerships  and  with  funds  from  international 
financial  institutions.  These  projects  focus  predominantly  on  energy,  infrastructure  and 
education. 

Sector and enterprise structure 

The services sector increased its share of total gross value added slightly, from 69.3% in 2010 
to  69.7%  in  2011.  The  share  of  industry  rose  from  18.4%  to  18.8%  while  the  share  of 
agriculture,  forestry  and  fishing  fell  from  5.5%  to  5.4%.  These  gains  were  made  at  the 
expense of construction, whose share of total gross value added further declined, from 6.8% 
in 2010 to 6.1% in 2011. Small and medium-sized enterprises (SMEs) continued to account 
for  around  50%  of  GDP,  their  share  of  total  exports  amounted  to  around  40%,  and  they 
employ more than 63% of all employed people. The government continued to support SMEs 
through  the  Croatian  Agency  for  SMEs  (HAMAG  Invest)  and  the  State  Development  Bank 
(HBOR). 

State influence on competitiveness 

State aid amounted to 2.8% of GDP in 2010 and preliminary data indicate that it was in the 
range  of  2.6–2.8%  of  GDP  in  2011.  Sector-specific  aid,  including  for  agriculture  and 
fisheries, represented 87% of overall State aid in 2010, with the remainder going to horizontal 
aid (research and development, employment, SMEs, environmental protection, training, etc.). 
There has been little change in the share of horizontal aid in total State aid in the period 2008-
2010. 

Trade integration 

Croatia is an open economy with total trade in goods and services accounting for around 82% 
of GDP in 2011, up from 77% in 2010. The EU has continued to be Croatia’s largest trading 
partner. Its shares of total Croatian exports and imports of goods remained relatively stable in 
2011 at 60% and 62% respectively. 91% of all FDI stocks stemmed from EU Member States. 
Overall, integration with the EU in the areas of trade and investment remained high. 

The kuna depreciated slightly in real effective terms in 2011. The depreciation amounted to 
2.4% year-on-year on the basis of consumer prices, 1.4% on the basis of producer prices, and 
0.9%  on  the  basis  of  unit  labour  costs.  Unit  labour  costs  decreased  due  to  rising  labour 
productivity.  Overall,  standard  indicators  point,  on  balance,  to  a  slight  improvement  in 
Croatia’s international price competitiveness in 2011. 

4. 

COMMITMENTS  AND  REQUIREMENTS  ARISING 
NEGOTIATIONS 

FROM  THE  ACCESSION 

This section examines Croatia’s ability to take on the obligations of membership — that is, 
the  acquis  as  expressed  in  the  Treaties,  the  secondary  legislation  and  the  policies  of  the 
Union.  It  also  analyses  Croatia’s  administrative  capacity  to  implement  the  acquis.  The 
analysis  is  structured  in  accordance  with  the  list  of  33  acquis  chapters.  In  each  sector,  the 
Commission’s  assessment  covers  progress  achieved  during  the  reporting  period  and 
summarises  Croatia’s  overall  level  of  preparedness  for  accession  and  the  respect  of 

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commitments  taken  in  the  accession  negotiations.  Where  appropriate,  reference  is  made  to 
transitional arrangements agreed during accession negotiations. 

4.1. 

Chapter 1: Free movement of goods  

Croatia  has  largely  aligned  its  legislation  as  regards  the  general  principles.  It  has  almost 
completed implementing its action plan for compliance with Articles 34 to 36 of the Treaty on 
the  Functioning  of  the  European  Union  (TFEU).  Urgent  attention  must  be  paid  to  the 
requirements  imposed  by  Croatia  for  additional  intermediate  storage  of  imported  petroleum 
products, which constitute a measure having an effect equivalent to quantitative restrictions, 
not in line with the acquis.  

As regards horizontal measures, Croatia has largely aligned its legislation with the acquis. A 
further  revision  of  the  Act  on  technical  requirements  for  products  and  on  conformity 
assessment is necessary for further alignment the Croatian legislation with the acquis.  

As regards standardisation, the Croatian Standards Institute (HZN) has transposed nearly all 
European  standards  (ENs).  The  HZN  was  chosen  as  a  notification  body  for  the 
implementation of the Agreement on Technical Barriers to Trade (WTO/TBT).  

As regards conformity assessment, the Croatian legislation is advanced but needs some further 
amendments to align it with the new legislative framework.  

In  the  field  of  accreditation,  European  cooperation  for  Accreditation  (EA)  completed  in 
December  2011  the  re-assessment  of  the  Croatian  Accreditation  Agency  (HAA)  with  a 
successful outcome. At the 18 April 2012 meeting of the EA MAC (Multi-Lateral Agreement 
Council)  it  was  decided  that  the  HAA  remains  an  EA  MLA  signatory  in  all  accreditation 
fields  (calibration,  testing,  inspection  and  certification  management  systems,  products  and 
persons). So far the HAA has accredited a total number of 314 bodies and publishes a list of 
these  with 
the  official  website 
(www.akreditacija.hr).  

their  accreditation  on 

the  detailed 

scope  of 

Alignment with the acquis in the area of metrology is advanced, but finishing the transfer of 
responsibility for scientific metrology to the National Metrology Institute (NMI) remains the 
main outstanding issue in this field.  

Alignment  with  the  acquis  in  the  field  of  market  surveillance  is  well  advanced.  The  State 
Inspectorate’s  enforcement  measures  have  been  improved.  The  State  Inspectorate  ensured 
coordination  between  market  surveillance  institutions  and  carried  out  eight  joint  inspection 
programmes.  

Legislative  alignment  has  further  advanced  as  regards  the  ‘Old  Approach’  product 
legislation, where a number of regulations have been adopted such as on chemicals and good 
laboratory practice in pharmaceuticals. Further efforts are needed to achieve full alignment in 
particular  as  regards  data  exclusivity  in  pharmaceutical  products,  veterinary  medicinal 
products  and  pre-packaging.  Further  efforts  are  needed  to  build  up  the  necessary 
administrative capacity to ensure proper implementation of the legislation. Croatia continues 
to provide periodic reports to the Commission on the implementation of the transparency of 
measures regulating the prices of medicinal products for human use and their inclusion in the 
scope of national health insurance systems. 

In  accordance  with  the  transitional  arrangement  granted,  Croatia  is  committed  to  upgrading 
market  authorisations  for  medicinal  products  granted  before  accession,  to  comply  with  the 
level of quality, efficacy and safety stipulated by the Directive on medicinal products, at the 
latest four years after accession.  

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Croatia  has  further  advanced  as  regards  alignment  with  the  ‘New  and  Global  Approach’ 
product  legislation.  Safety  of  toys  regulation  has  been  adopted.  Further  efforts  are  still 
needed,  particularly  on  construction  products,  civil  explosives,  eco-design  requirements  for 
energy-related  products,  gas  appliances,  measuring  instruments,  non-automatic  weighing 
instruments, pressure equipment, simple pressure vessels and medical devices.  

Croatia has further advanced in aligning its legislation in the area of procedural measures, 
and alignment is almost complete. The transposition of Directive 98/34/EC on the provision 
of  information  in  the  field  of  technical  standards  and  regulations  has  yet  to  be  completed. 
Croatia  has  transposed  the  acquis  governing  acquisition  and  possession  of  weapons  in  June 
2012.  

Conclusion 

Croatia is meeting the commitments and requirements arising from the accession negotiations 
in the field of free movement of goods and is expected to be in a position to implement the 
acquis  as  of  accession.  Further  efforts  are  required,  in  particular  in  the  field  of  horizontal 
measures,  as  well  as  New  and  Old  Approach  product  legislation,  in  order  to  ensure  that 
Croatia completes its preparations for membership by the date of accession. Urgent attention 
must  be  paid  to  the  requirements  imposed  by  Croatia  for  additional  intermediate  storage  of 
imported petroleum products.  

4.2. 

Chapter 2: Freedom of movement for workers 

In the field of access to the labour market, Croatia has completed alignment with the acquis. 
A  transitional  arrangement  has  been  agreed  whereby  for  the  first  two  years  following 
accession,  current  Member  States  will  apply  national  measures,  or  bilateral  agreements,  to 
regulate  the  access  of  Croatian  workers  to  their  labour  markets.  These  arrangements  may 
continue for up to a maximum of seven years. Croatia may apply equivalent measures to any 
current Member State applying restrictions. 

In the area of future participation in the EURES (European Employment Services) network, 
Croatia is well prepared. Preparations have continued with a view to connecting the Croatian 
Employment Service to the European Job Mobility Portal.  

In  the  area  of  coordination  of  social  security  systems,  Croatia  is  well  prepared. 
Administrative capacity is being strengthened. Training has been provided to staff of the state 
administration on topics such as pension insurance, health insurance and family benefits. The 
required  estimate  of  the  additional  financial  costs  of  health  care  to  be taken  into  account  in 
internal budgetary planning is still pending.  

Preparations  in  relation  to  the  European  Health  Insurance  Card  (EHIC)  are  reaching 
completion. A Regulation on EHIC was adopted in December 2011 determining the period of 
validity of the card (one year for all insured persons, if necessary longer for posted workers 
and their family members), the form of the card (it will be issued as a separate card), and all 
other necessary details needed for its issuance. 

Conclusion 

Croatia is meeting the commitments and requirements arising from the accession negotiations 
in the field of freedom of movement for workers and is in a position to implement the acquis 
as of accession.  

4.3. 

Chapter 3: Right of establishment and freedom to provide services 

In  the  area  of  the  right  of  establishment  and  freedom  to  provide  cross-border  services 
Croatia has largely aligned its legislation with the acquis. The main principles of the Services 

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Directive have been transposed into a horizontal law, while several sector-specific legislative 
alignments are pending.  

Preparations  for  the  functioning  of  the  Point  of  Single  Contact  (PSC)  have  progressed  and 
need to continue in order to have a fully operational PSC before accession.  

Continuous  efforts  are  needed  to  strengthen  the  administrative  capacity  of  all  institutions 
working on implementing the Services Directive and on improving their cooperation with the 
relevant ministries. The Section for Internal Market Service Development at the Ministry of 
Economy currently employs 4 people out of 7 persons. The Section is constantly undertaking 
training  activities  for  its  own  staff  and  the  staff  of  other  relevant  institutions  working  on 
services,  in  particular  those  of  the  Croatian  Chamber  of  Economy,  i.e.  staff  working  on  the 
PSC. 

Legislative alignment in the area of postal services is almost completed. However, the recent 
administrative  practice  raises  some  concerns  as  to  its  compatibility  with  the  postal  acquis, 
notably on the regulatory treatment of value added services. Further legislative efforts are still 
needed to ensure full transposition of the Third Postal Directive. The national regulator, the 
Croatian  Post  and  Electronic  Communications  Agency  (HAKOM),  has  continued  to 
strengthen  its  overall  administrative  capacity  and  regulatory  expertise.  In  particular,  it  is 
currently  actively  working  on  a  cost  accounting  separation  method  and  on  a  manual  for 
accounting  separation.  This  is  of  utmost  importance  in  view  of  regulatory  significance  of 
separate cost accounts and recently raised concerns about unjustified pricing practices by the 
national postal operator.The Croatian Post, the designated universal service provider, adopted 
a new business plan for 2012, to prepare for full liberalisation of the postal services market. 
Work on a new central logistic centre for the public operator is advancing. Further efforts are 
needed to modernise the national  postal operator,  to fully establish separate cost accounting 
and to ensure adequate supervision by the regulator.  

Croatia  is  on  track  to  meeting  its  commitments  in  the  field  of  mutual  recognition  of 
professional  qualifications.  Croatia  has  considerably  aligned  its  legislation  with  the  EU 
acquis for the four sectorial professions of doctors, dental practitioners, nurses responsible for 
general care and midwives. Few issues, notably regarding the nurses responsible for general 
care and midwives and some minor legal drafting issues regarding basic medical doctors and 
medical specialists, still remain to be addressed before accession.  

Conclusion  

Croatia is meeting the commitments and requirements arising from the accession negotiations 
in the field of the right of establishment and freedom to provide services and is expected to be 
in a position to implement the acquis as of accession. Further efforts are needed particularly 
for  alignment  with  the  Services  Directive  and  in  the  field  of  mutual  recognition  of 
professional  qualifications  in  order  to  ensure  that  Croatia  completes  its  preparations  for 
membership by the date of accession. 

4.4. 

Chapter 4: Free movement of capital 

Preparations  are  almost  completed  in  the  field  of  payment  systems,  but  some  further 
legislative  alignment  is  needed  to  ensure  direct  application  of  the  cross-border  payment 
Regulation.  

As  regards  the  fight  against  money  laundering,  preparations  are  almost  completed.  The 
Croatian  Financial  Intelligence  Unit  (FIU)  and  other  supervisory  bodies  continued  their 
training  activities  for  the  reporting  entities.  The  Financial  Inspectorate  strengthened  its 
administrative capacity with the recruitment of 6 new employees. Croatia still has to keep up 
its  efforts  in  this  area.  The  administrative  capacity  of  all  bodies  dealing  with  anti-money 

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laundering  should  be  further  strengthened.  Croatia  should  continue  to  co-ordinate  criminal 
and  financial  investigations.  Croatia  has  stepped  up  efforts  in  identifying  money  laundering 
offences, resulting in increased number of investigations. There is good level of interagency 
cooperation. Special attention is needed with respect to designated non-financial business and 
professionals (DNFBP).  

In the area of free movement of capital Croatia has achieved a good level of alignment with 
the acquis. Further attention must be paid to the amendments to the Act on the Privatisation of 
INA and the Act on the Privatisation of Telecom concerning special government rights and to 
the  amendments  of  the  provisions  for  acquisition  of  land  in  areas  covered  by  the  Nature 
Protection Act to explicitly eliminate existing restrictions.  

In  accordance  with  the  transitional  arrangement  granted,  Croatia  is  committed  to  removing 
restrictions on the acquisition of agricultural land by EU/EEA nationals at the latest before the 
seventh year after accession. 

Conclusion 

Croatia is meeting the commitments and requirements arising from the accession negotiations 
in the field of the free movement of capital and is expected to be in a position to implement 
the acquis as of accession. Further efforts are required, in particular as regards amendments to 
the Acts on the Privatisation of INA and of Telecom as well as the Nature Protection Act and 
the continued implementation of the action plan against money laundering, in order to ensure 
that Croatia completes its preparations for membership by the date of accession. 

4.5. 

Chapter 5: Public procurement 

Legislative  alignment  as  regards  the  general  principles  has  further  advanced  and  is  almost 
complete. The new Public Procurement Act (PPA) entered into force in January 2012 and a 
number of implementing acts were adopted. The defence procurement act was adopted and in 
force  since  August  2012.  The  Act  on  the  establishment  of  the  State  Commission  for 
supervision of public procurement procedures needs to be amended in order to be harmonised 
with  the  new  PPA  Croatia  has  decided  to  draft  a  new  law  on  Concessions.  The  sector 
regulating  legislation  needs  to  be  aligned  with  the  law  once  adopted.  Efforts  need  to  focus 
primarily on the implementation of the new PPA, especially at local level, also with a view to 
the future management of the Structural Funds. 

Croatia  has  further  advanced  as  regards  the  award  of  public  contracts;  administrative 
capacity  needs  to  be  enhanced  to  ensure  appropriate  implementation.  New  Act  on  Public 
Private  Partnership  was  adopted  on  6  July;  full  alignment  of  the  final  text  with  the  acquis 
remains  to  be  confirmed.  The  new  e-Notices  platform  has  been  in  operation  since  January 
2012  but  a  strategy  on  e-procurement  together  with  a  concrete  Action  Plan  have  to  be 
prepared and implemented.  

With  regard  to  administrative  capacity,  the  Department  for  the  Public  Procurement  System 
(DPPS) at the Ministry of Economic Affairs has continued to steer enforcement of the PPA. 
The  Department  for  the  Public  Procurement  System  (DPPS)  at  the  Ministry  of  Economic 
Affairs together with the other key institutions in the sector continued the work to improve the 
transparency  and  accountability  of  the  system.  Sustained  effort  is  needed  to  ensure 
coordination  in  the  sector  and  efficient  prevention  of  corruption,  fraud  and  irregularities  in 
public procurement. Following the adoption of the new PPA, intensive training activities were 
organised  involving  civil  servants,  economic  operators  and  contracting  authorities  at  central 
and  local  level.  Their  capacities  still  need  to  be  enhanced  further,  especially  with  regard  to 
avoiding  conflicts  of  interest  in  public  procurement  procedures,  corruption,  fraud  and 
irregularities.  

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In the area of concessions, the administrative capacity of the Ministry of Finance needs to be 
enhanced  by  further  developing  the  professional  skills  not  only  of  its  staff  but  also  of 
concession grantees. The Concessions and Public Private Partnerships (PPP) Service has been 
established following the adoption of the new Decree on the internal structure and functions 
of  the  Ministry  of  Finance.  The  Concessions  and  PPP  Service  comprises  a  department  for 
registration  of  concessions  and  a  department  for  PPPs.  Seven  of  the  13  planned  employees 
have  been  recruited.  Sustained  efforts  are  needed  to  maintain  coordination  between  the 
Ministry of Finance and the Agency for Public Private Partnerships (APPP) to ensure efficient 
implementation of concessions and PPP projects in the country. Additional efforts are needed 
in order to stimulate private sector investments through PPPs.  

The APPP continued to improve its capacity to evaluate and approve PPP project proposals, 
tender  documents  and  final  draft  contracts  pursuant  to  the  provisions  of  the  PPP  Act.  New 
methodological tools have to be devised and further efforts invested, especially in building up 
the capacities of economic operators to develop high-quality projects and effectively apply the 
PPP guides and manuals.  

As  regards  the  remedies  system,  the  legislative  alignment  has  advanced  moderately.  The 
functioning of the State Commission for supervision of public procurement procedures needs 
to be enhanced. The State Commision needs to improve its internal organisation and structure. 
Even  if  most  of  the  registered  cases  were  solved  during  the  12-month  period,  the  growing 
numer  of  appeals,  the  increasing  length  of  time  required  for  issuing  the  Commission’s 
decisions (70 days instead of the mandatory 15 days), and the lack of a legally binding statute 
and rules on internal organisation cause some concern. Further efforts are needed in order to 
improve  the  quality  of  the  decisions  taken,  especially  with  a  view  to  the  preparations  for 
future Structural Funds management and given the key role of the State Commission as the 
main supervisory body in the area of remedies after accession. 

The State Office for Central Public Procurement achieved good results  in implementing the 
centralised  public  procurement  procedures.  Its  current  staffing  is  16.  Further  efforts  are 
needed to improve its efficiency.  

Conclusion 

Croatia is meeting the requirements and commitments arising from the accession negotiations 
in the field of public procurement and is expected to be in a position to implement the acquis 
as  of  accession.  Further  efforts  are  required,  in  particular  for  implementation  of  the  new 
public procurement act, especially at local level, also with a view to the future management of 
the structural funds, in order to ensure that Croatia completes its preparations for membership 
by  the  date  of  accession.  Improvements  concerning  the  system  of  remedies  are  required. 
Administrative  capacity  of  different  bodies  in  the  public  procurement  area  should  be 
strengthened.  

4.6. 

Chapter 6: Company law 

In  the  field  of  company  law,  Croatia’s  legislation  is  largely  in  line  with  the  acquis.  Some 
inconsistencies still have to be addressed, in particular with regard to shareholders’ rights. 

In  the  field  of  corporate  accounting,  legislation  is  largely  in  line  with  the  acquis.  The 
Croatian  Financial  Reporting  Standards  Board  continues  to  publish  translations  of  the 
International  Accounting  Standards,  the  International  Financial  Reporting  Standards  (IFRS) 
and  interpretations  of  the  International  Financial  Reporting  Interpretations  Committee 
(IFRIC). 

In  the  field  of  auditing,  legislation  is  largely  in  line  with  the  acquis.  The  Audit  Public 
Oversight  Committee  (APOC)  and  the  Quality  Assurance  Team  (QAT)  performed 

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satisfactorily over the period. The QAT within the Croatian Audit Chamber is fully functional 
with five full-time staff members.  

Conclusion  

Croatia is meeting the commitments and requirements arising from the accession negotiations 
in the field of company law and is in a position to implement the acquis as of accession.  

4.7. 

Chapter 7: Intellectual property law 

Croatia  has  aligned  its  legislation  in  the  field  of  copyright  and  neighbouring  rights  and 
industrial property rights.  

With  regard  to  enforcement,  in  September  2011,  a  Memorandum  of  Understanding  on 
cooperation  between  the  Office  for  Harmonisation  in  the  Internal  Market  (OHIM)  and  the 
State Intellectual Property Office (SIPO) was signed, followed by the signature of two further 
cooperation  agreements  on  specific  activities  relating  to  trademarks.  New  joint  information 
website of the enforcement bodies was launched in April 2012. 

As  regards  intellectual  property,  further  emphasis  needs  to  be  placed  on  developing  the 
capacity  of  the  police  and  prosecutors  to  handle  more  complex  cases  and  on  raising  public 
awareness  of  intellectual  property  rights.  The  State  Intellectual  Property  Office  (SIPO)  has 
sufficient administrative capacity.  

Conclusion 

Croatia is meeting the commitments and requirements arising from the accession negotiations 
in  the  field  of  intellectual  property  law  and  is  in  a  position  to  implement  the  acquis  as  of 
accession. 

4.8. 

Chapter 8: Competition policy 

Croatia has largely aligned its legislation in the fields of anti-trust and mergers and of State 
aid.  It  has  also  kept  up  its  efforts  to  build  a  positive  enforcement  record.  Croatia’s 
Competition Agency (CCA) is fully operational and functionally independent; it carries out its 
duties in line with the legislation in force. A proper system of merger and State aid control is 
in place. 

In the field of  anti-trust and mergers, since 1 October 2011, the CCA issued 29 decisions 
and  25  opinions.  The  CCA  continued  to  provide  the  government  with  assessments  of  draft 
laws and other expert opinions.  

In the field of State aid, the CCA took 30 decisions, of which 13 involved aid schemes and 
17 concerned individual aid measures.  

With  regard  to  Croatia’s  reporting  obligations  in  the  steel  sector,  the  first  reports  were 
submitted  to  the  Commission  on  15  December  2011  and  18  June  2012  in  line  with  the 
requirements agreed during the negotiations. 

Sisak has yet to reimburse the aid received. In October 2011, the owners decided to close and 
sell the steel mill, resulting in production being completely halted. The owners of CMC Sisak 
sold the steel mill to a new investor, the Italian group Danieli.  

The reports also provide updated information on the bankruptcy proceedings concerning the 
other steel mill, Željezara Split.  

With  regard  to  Croatia’s  obligations  to  report  on  the  shipbuilding  industry,  on  16  January 
2012 it submitted the first six-monthly report on the restructuring of the Croatian shipyards in 
difficulty as required by Annex VIII of the Act of Accession. The report contains data on the 
measures  taken  to  return  to  viability,  aid  used,  own  contribution  and  production  capacity, 

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following  the  methodology  for  monitoring  implementation  by  Croatia  agreed  with  the 
Commission.  The  report  also  provides  details  on  the  agreements  regulating  property  law  in 
the context of expropriation in the maritime domain. On 16 July 2012 Croatia submitted its 
second  six  monthly  report  on  the  restructuring  of  the  Croatian  shipbuilding  industry.  In 
addition,  Croatia  submitted  the  first  Report  on  the  Annual  Output  of  the  Shipyards  under 
Restructuring.  

In March 2012, the bid for the shipyard Brodosplit was accepted. Its restructuring plan had to 
be  revised  in  light  of  the  changes  that  occurred  after  the  original  acceptance  of  the  plan  in 
February 2011, namely the substantial increase of the aid received by the yard. According to 
the  Act  of  Accession,  the  Commission  must  accept  any  amendments  to  the  restructuring 
plans. The Commission accepted the revised plan on 16 August 2012. Croatia has indicated 
that  the  privatisation  contract  will  be  signed  without  delay.  The  bids  for  the  shipyards 
Kraljevica  and  Brodotrogir  were  rejected  by  the  government  and  the  bid  for  the  shipyard 
3.Maj  was  withdrawn  by  the  potential  investor.  The  government  has  decided  to  initiate 
bankruptcy proceedings for Kraljevica and to sell Brodotrogir to a new investor. As regards 3. 
MAJ, Croatia has decided to seek a new privatisation and restructuring arrangement. 

As regards existing aid, Croatia has provided the Commission with a list of 11 aid measures 
that  it  wishes  to  be  considered  as  existing  aid  at  the  date  of  accession.  Seven  of  these 
measures  have  been  included  in  the  Act  of  Accession.  Croatia  needs  to  provide  further 
information on the remaining ones for the Commission to complete its assessment.  

Conclusion  

Croatia  is  generally  meeting  the  commitments  and  requirements  arising  from  the  accession 
negotiations in the field of competition policy and should be in a position to implement the 
acquis  as  of  accession.  Increased  efforts  must  be  paid  to  the  signature  of  the  contracts  for 
privatising the shipyards in difficulty.  

4.9. 

Chapter 9: Financial services 

In the field of banks and financial conglomerates Croatia has largely aligned its legislation. 
Further alignment is required to fully implement the latest the Capital Requirements Directive 
(CRD  III).  Preparations  are  pending  for  the  implementation  of  CRD  IV.  Croatian  National 
bank experts started to participate in the working bodies of the European Systemic Risk Board 
and European Banking Authority as observers. In general terms Croatia is well advanced on 
banking legislation and supervision.  

Croatia  has  largely  aligned  its  legislation  in  the  area  of  insurances  and  occupational 
pensions.  Croatia  now  fully  complies  with  Directive  2003/41/EC  on  the  activities  and 
supervision  of  institutions  for  occupational  retirement  provision.  Preparations  for  the 
implementation  of  the  Solvency  II  Directive  are  on-going.  The  Croatian  Financial  Services 
Supervisory  Agency  (HANFA)  has  been  cooperating  with  the  European  Securities  and 
Markets Authority (ESMA) and the European Insurance and Occupational Pensions Authority 
(EIOPA)  on  technical  details  regarding  the  participation  of  HANFA  representatives  in  the 
work of both European regulators.  

In the area of financial market infrastructure legislative alignment with the acquis is almost 
completed with the adoption of the legislation aimed at the full implementation of Directive 
2009/44/EC  on  settlement  finality.  Further  efforts  are  needed  to  implement  Directive 
2010/78/EU (Omnibus I). 

As  regards  securities  markets  and  investment  services  legislative  alignment  is  almost 
completed. Further efforts are needed to implement the Prospectus Directive 2010/79/EU and 
the UCITS IV Directive 2009/65/EC. 

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As regards administrative capacity, both regulators, the Croatian National Bank and HANFA, 
continued with the educational programmes for their staff and the staff of supervised entities. 
They also kept up their cooperation with domestic and foreign regulators, in particular from 
the EU Member States. HANFA increased the number of its employees from 134 to 138. Its 
internal organisation has been changed through the creation of the new position of Secretary 
General,  to  whom  executive  powers  were  transferred.  Also,  the  president  and  members  of 
HANFA’s  Management  Council  were  appointed.  It  remains  to  be  seen  how  this  will  affect 
HANFA’s supervisory function and its independence. Strong administrative capacity of both 
supervisory institutions needs to be maintained. 

Conclusion 

Croatia is meeting the commitments and requirements arising from the accession negotiations 
in the field of financial services and is in a position to implement the acquis as of accession.  

4.10.  Chapter 10: Information society and media 

Legislative  alignment  in  the  field  of  electronic  communications  and  information  and 
communications  technologies  (ICT)  to  allow  competition  and  to  achieve  a  higher  level  of 
consumer protection has further advanced and is almost complete. The Act on the fee for the 
provision  of  services  in  mobile  communications,  re-introduced  in  January 2012  as  a 
temporary measure, was abolished again in July. At the same time, however, a new Ordinance 
that  entered  into  force  in  August 2012  has  increased  the  one-off  spectrum  licence  fee  on 
mobile operators. Implementation of competitive safeguards and market analysis procedures 
is well advanced. Activities have continued related to the project to develop a cost accounting 
model.  The  broadband  penetration  rate  has  increased  slightly,  reaching  26%  at  the  end  of 
2011.  While  mobile  broadband  is  well  developed  by  EU  standards,  the  overall  broadband 
take-up by households needs to be improved. A project on broadband services in non-profit 
areas (islands and mountains) has been launched in order to bring broadband internet access 
e.g. to schools and hospitals. Measures have also been taken to improve access to electronic 
communications  services  for  people  with  disabilities.  Croatia  needs  to  focus  now  to  ensure 
sustainable  competition,  including  improved  access  to  rights-of-way,  and  to  make  finalising 
the  cost  accounting  model  one  of  its  priorities.  The  incumbent  continues  to  retain  a  strong 
position in fixed broadband access and in fixed voice markets. 

Administrative  capacity  of  the  Croatian  Post  and  Electronic  Communications  Agency 
(HAKOM)  is  considered  sufficient,  with  a  staff  of  more  than  170.  Continuous  efforts  are 
needed to further develop the Agency’s strategic and operational capacities. 

In the area of information society services, Croatia has completed alignment with the acquis. 
Amendments to the Electronic Commerce Act were adopted in November 2011 to align with 
the acquis. A new Strategy for the development of broadband access 2012–2015, along with 
an  implementation  plan,  was  adopted  in  October 2011  based  on  the  Digital  Agenda  for 
Europe  (DAE).  Establishment  of  a  coordination  body  involving  all  stakeholders  is  ongoing, 
while  the  Ministry  of  Administration  has  taken  over  responsibility  for  information  society 
policy.  A  Decision  establishing  eGovernment  development  goals  in  the  state  administration 
for  2011–2015  was  adopted  in  October 2011.  Croatia  is  advanced  in  the  area  of  e-health. 
Croatia  plays  an  active  role  in  many  of  the  related  EU  initiatives.  However,  no  overall 
national strategy for developing the information society is in place. 

In  the  field  of  audiovisual  policy,  Croatia  has  completed  alignment  with  the  acquis.  The 
Electronic  Media  Act  and  the  implementing  legislation  governing  the  electronic  media 
continue to be applied. A new Croatian Radio and Television Act was adopted in July 2012. 
Amendments to the Criminal Code adopted in October 2011 confirmed the decriminalisation 

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of  defamation.  The  administrative  capacity  of  the  Electronic  Media  Agency  has  been 
strengthened. Continued efforts are needed to ensure the independence of the public service 
broadcaster  and  to  increase  its  transparency,  in  particular  through  proper  implementation  of 
the legislative framework.  

Conclusion  

Croatia is meeting the commitments and requirements arising from the accession negotiations 
in the field of the information society and media and is in a position to implement the acquis 
as of accession.  

4.11.  Chapter 11: Agriculture and rural development 

In  the  field  of  horizontal  issues,  Croatia  has  reached  a  good  level  of  alignment  with  the 
acquis and preparations are on track. In accordance with the transitional arrangements agreed, 
Croatia is committed to prepare for the phasing in  of direct payments as of 2013, including 
direct payments for demined land put into agricultural use. Croatia amended the Act on State 
Aid to Agriculture and Rural Development, and published the Ordinance on Direct Payments 
and  Rural  Development  for  2012,  although  it  is  only  partially  aligned  with  the  acquis. 
Consequently,  the  2012  national  campaign  based  on  an  acquis-compatible  direct  payments 
system was launched. Croatia still needs to fully align its legislation on direct payments with 
the  acquis  and  to  implement  it  to  prepare  for  the  2013  applications  for  direct  payments. 
Croatia  needs  to  ensure  that  accreditation  of  the  paying  agency  is  completed  by  the  end  of 
2012 and that the paying agency is fully functioning in line with the acquis as of January 2013 
in  order  to  benefit  from  reimbursement  of  direct  payments  in  2013  from  EU  budget.  The 
capacity  of  the  Competent  Authority  needs  to  be  further  strengthened.  In  accordance  with 
transitional arrangements granted, Croatia is committed to use only up to 20% of the annual 
rural  development  funds  in  2014,  2015  and  2016  to  finance  complementary  national  direct 
payments. 

Implementation  of  the  plan  for  establishing  an  integrated  administration  and  control  system 
and  setting  up  a  paying  agency  is  on  track.  The  capacity  of  the  Paying  Agency  has  been 
further strengthened by completing the software for the management of EU direct payments 
and  training  of  staff.  The  land  parcel  identification  system  has  been  continuously  updated. 
Software for the implementation of rural development measures was developed and will later 
have  to  be  adapted  to  the  future  Croatian  Rural  Development  Programme  for  2014-2020. 
Croatia  will  need  to  avoid  any  delay  in  restructuring  of  the  regional  offices  and  the 
recruitment of additional staff. 

Croatia continued the farm accountancy data network (FADN) pilot surveys. Under the new 
act  on  agricultural  advisory  services,  the  implementation  of  FADN  will  be  ensured  by  the 
Croatian Agricultural Extension Institute. Human and financial resources in that sector need 
further strengthening. Croatia needs to prepare for due reporting of 2013 accounting year data 
in FADN. 

Alignment  of  legislation  in  the  area  of  the  common  market  organisation  is  ongoing. 
Implementation  of  the  plan  to  prepare  for  the  application  of  the  Single  Common  Market 
Organisation  by  the  time  of  accession  is  on  track.  Croatia  adopted  several  implementing 
regulations  related  to  the  fruit  and  vegetables,  sugar,  milk  and  milk  products  sectors. 
Marketing  standards  for  fruit  and  vegetables  are  being  implemented.  Croatia  will  need  to 
further strengthen human resources in order to meet the EU reporting requirements. 

In the area of rural development, preparations are moderately advanced. Croatia continued 
implementing the Instrument for Pre-Accession Assistance for Rural Development (IPARD). 
Despite improvements, the absorption capacity needs to be stepped up. In accordance with the 

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transitional arrangement granted, Croatia is committed to continue IPARD during 2013 and to 
implement  a  post-accession  rural  development  programme  as  of  2014.  Croatia  will  need  to 
speed up the preparation of the future rural development programme and partnership contract 
for the funds covered by the Common Strategic Framework. The development of measures on 
agri-environment and organic farming as well as the payment scheme for areas facing natural 
constraints will need special attention. Croatia will need to ensure the continuity of the staff as 
well as their training.  

Alignment in the fields of quality policy and organic farming is advanced. Croatia adopted 
implementing regulations on aquaculture, the labelling of designations of origin, geographical 
indications  and  traditional  specialities  and  published  guidelines  for  their  registration.  In 
accordance  with  the  transitional  arrangement  granted,  Croatia  is  committed  to  submit 
applications for the registration at EU level of agricultural products as designations of origin, 
geographical  indications  or  traditional  specialities  guaranteed  not  later  than  1 July 2014.  In 
the  area  of  organic  farming,  Croatia  will  need  to  ensure  that  an  efficient  control  system 
including supervision by a competent authority is in place as of accession. 

Conclusion 

Croatia  is  generally  meeting  the  commitments  and  requirements  arising  from  the  accession 
negotiations in the field of agriculture and rural development and should be in a position to 
implement  the  acquis  as  of  accession.  Increased  efforts  are  needed  in  the  area  of  direct 
payments and rural development, in order to ensure that Croatia completes its preparations for 
membership by the date of accession. 

4.12.  Chapter 12: Food safety, veterinary and phytosanitary policy 

Croatia  has  completed  aligning  its  legislation  in  the  field  of  general  food  safety.  It  moved 
closer  towards  full  implementation  and  enforcement  of  the  aligned  legislation.  Continued 
efforts will be needed to ensure even implementation over the entire Croatian territory. 

Legislative  alignment  in  the  field  of  veterinary  policy  has  further  advanced  and  is  almost 
completed.  Croatia  has  continued  with  the  adoption  of  implementing  legislation.  Control 
capacity has improved as, in addition to official veterinarians, some control bodies employing 
authorised  veterinarians  were  accredited.  The  accreditation  process  is  still  ongoing.  In 
accordance with the transitional arrangement granted, Croatia can exceptionally maintain and 
not more than 12 months after accession non-EU compliant cages for laying hens already in 
lay  at  the  date  of  accession.  Croatia  will  need  to  ensure  that  eggs  from  such  cages  are 
identified with a special mark and are only placed on the Croatian market. Croatia needs to 
speed up work on building and fitting out the agreed border inspection posts. In accordance 
with the arrangement agreed, Croatia is committed to operate as of accession a regime for the 
transiting  of  products  of  animal  origin  through  the  territory  of  Bosnia  and  Herzegovina  at 
Neum  (‘Neum  corridor’)  allowing  such  consignments  to  be  exempted  from  required 
veterinary checks before they re-enter EU territory. Croatia will need to have fully equipped 
and staffed points of entry to the north and south of the corridor in place as well as effective 
technical surveillance systems to ensure efficient controls. 

Alignment with the acquis in the field of placing on the market of food, feed and animal 
by-products  has  further  advanced.  Croatia  continued  to  implement  its  plan  for  upgrading 
establishments for food and feed of animal origin. Close monitoring of the national upgrading 
plan  remains  necessary.  In  accordance  with 
transitional  arrangement  agreed, 
establishments for milk, meat, fish and animal-by products must comply with the acquis on 
food safety by the end of 2015. Croatia will need to step up its efforts with a view to setting 
up intermediate plants for the handling of high-risk animal by-products. 

the 

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Legislative alignment in the fields of the food safety rules and the specific rules for feed has 
further  advanced  and  is  almost  completed.  Croatia  needs  to  ensure  that  sufficient 
administrative and control capacity is in place. 

Legislative alignment in the field of phytosanitary policy has further advanced and is almost 
completed. Additional implementing legislation has been adopted in the areas of plant health 
and plant protection products. Croatia needs to keep up its efforts, in particular with regard to 
setting  up  border  inspection  posts  and  further  strengthening  administrative  capacities.  In 
accordance  with  the  transitional  arrangement  granted,  Croatia  is  committed  to  cease  by  the 
end of 2014 the marketing of seeds of certain varieties of beet, cereals, oil and fibre plants, 
fodder  plants,  vegetables  and  seed  potatoes  which  have  not  yet  passed  the  Distinctness, 
Uniformity and Stability (DUS) examinations. Croatia will need to ensure that such plants and 
seeds may not be marketed in EU territory during the transitional period. 

Croatia will need to ensure alignment of its bilateral veterinary and phytosanitary agreements 
with the acquis by accession. 

Croatia  has  progressed  in  alignment  with  the  acquis  on  genetically  modified  organisms 
(GMOs).  It  has  developed  new  procedures  and  carried  out  reporting  and  monitoring 
activities. Continuous efforts are still required in this field. 

Conclusion  

Croatia  is  generally  meeting  the  commitments  and  requirements  arising  from  the  accession 
negotiations in the field of food safety, veterinary and phytosanitary policy and should be in a 
position to implement the acquis as of accession. Increased efforts are needed in the area of 
the  animal  by-products  sector,  the  upgrading  and  the  monitoring  of  establishments,  and  in 
particular with regard to border inspection posts. Continued attention needs to be paid to the 
further strengthening of administrative capacity in this area.  

4.13.  Chapter 13: Fisheries 

In the areas of resource and fleet management, Croatia has generally aligned its legislation 
with  the  acquis.  Croatia  continued  adopting  implementing  legislation  in  the  fields  of 
commercial  fishing,  fishing  licences  and  data  collection.  The  fisheries  monitoring  centre  is 
continuing  operation.  Croatia  started  preparing  the  management  plans  required  under  the 
Mediterranean  Regulation  and  in  accordance  with  the  transitional  arrangement  agreed, 
allowing it to continue certain fishing methods until 30 June 2014. Croatia is progressing in 
the finalisation of the fleet register and to fully establish the entry-exit scheme. It will need to 
ensure that commitments are met according to plan in order to enable the necessary fleet data 
to be transmitted by accession. Croatia will need to speed up the process of phasing out the 
category of subsistence fisheries in order to complete it by the end of 2014 as agreed under 
the transitional arrangement. 

Legislation is generally aligned in the fields of inspection and control and preparations are 
progressing.  Improvement  of  the  administrative  and  control  capacity  continued,  but  further 
strengthening is needed, in particular concerning the recruitment of fisheries inspectors at sea 
and on land. Croatia will need to complete the satellite-based vessel monitoring system.  

In  the  field  of  structural  actions,  alignment  is  moderately  advanced.  The  administrative 
bodies to implement the European Fisheries Fund are in place. Croatia will need to agree the 
national  strategic  plan  and  prepare  the  operational  programmes  without  delay.  A  reliable 
management  and  control  system  ensuring  sound  and  efficient  implementation  of  the 
operational programmes needs to be set up. Croatia will need to accelerate the preparation for 
the partnership contract for the funds covered by the Common Strategic Framework and for 
the implementation of the future European Maritime and Fisheries Fund. 

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Croatia has generally aligned its legislation with the acquis in the fields of market policy and 
State  aid.  Collection  of  information  on  species,  quantities  and  prices  has  been  further 
improved.  Croatia  will  need  to  step  up  efforts  to  establish  producers’  organisations  and  to 
align marketing standards.  

In  the  area  of  international  agreements,  alignment  is  moderately  advanced.  Croatia 
continued  to  implement  all  the  recommendations  of  the  International  Commission  for  the 
Conservation of Atlantic Tunas (ICCAT) regulating catches, farming and trading. Concerning 
the General Fisheries Commission for the Mediterranean (GFCM), Croatia continues aligning 
its  national  legal  framework  with  GFCM  recommendations.  It  will  need  to  ensure  timely 
alignment with the acquis in this area by the date of accession. 

Conclusion 

Croatia  is  generally  meeting  the  commitments  and  requirements  arising  from  the  accession 
negotiations in the field of fisheries and should be in a position to implement the acquis as of 
accession.  Increased  efforts  are  needed  in  the  area  of  fleet  and  resource  management, 
inspection  and  control  and  structural  policy,  in  particular  as  regards  the  preparation  of  the 
management plans, the phasing out of the category of subsistence fisheries and the completion 
of the satellite based vessel monitoring system.  

4.14.  Chapter 14: Transport policy 

Alignment in the area of road transport is almost completed. Croatia amended its legislationt 
to ensure compliance with the acquis on driving licences, qualification and training of drivers 
and road infrastructure safety management. Implementing legislation still needs to be adopted, 
and  the  on-going  efforts  to  ensure  effective  enforcement  the  road  safety  acquis  need  to  be 
further sustained. 

Legislative  alignment  in  the  field  of  rail  transport  is  at  an  advanced  level,  but  efforts  will 
need  to  be  increased  in  certain  areas  to  fully  align  with  the  acquis.  The  Rail  Market 
Regulatory  Agency  took  steps  against  the  lack  of  the  independence  of  the  infrastructure 
manager. Furthermore, the financial viability of the infrastructure manager and the passanger 
operator without support from public funds remains problematic. With respect to the Croatian 
Railway  Safety  Agency,  an  action  plan  was  adopted  for  strengthening  its  administrative 
capacity.  However,  current  staffing  level  and  the  available  facilities  remain  inadequate. 
Necessary  ordinances  for  the  functioning  of  the  Agency  are  still  to  be  adopted,  and  vehicle 
authorisation  has  not  yet  been  transferred  from  the  ministry  to  the  agency.  The  agency  has 
stepped  up  its  cooperation  at  EU  level,  notably  with  the  European  Railway  Agency.  The 
agency  awarded  the  authorisations  for  HZ  Infrastruktura  recently  and  work  on  the  vehicle 
register has started. As regards the established of a multi-modal accident investigation body, 
the law has yet to be adopted and implemented.  

As  regards  inland  waterways  transport  preparations  are  advanced.  Implementation  of  the 
River  Information  System  (RIS)  in  Croatia  is  ongoing,  with  construction  and  installation  of 
equipment  to  be  completed  by  the  date  of  accession.  The  RIS  is  planned  to  be  fully 
implemented on the Danube River by the date of accession; implementation of the RIS on the 
entire  length  of  the  Sava  River  has  been  postponed  to  2015  to  achieve  coordinated  RIS 
implementation with the other countries crossed by this waterway.   

Concerning combined transport preparations are advanced, but the relevant law still needs to 
be revised in order to comply fully with the acquis. 

In  the  area  of  air  transport,  alignment  with  the  acquis is  well  advanced,  in  particular  with 
regard to implementation of the European Common Aviation Area Agreement and the Single 
European Sky initiative. Croatia needs to keep up efforts to ensure full alignment of the Civil 

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Action  Act  and  related  bylaws  with  the  acquis,  as  well  as  make  the  necessary  updates 
following the establishment of the multi-modal accident investigation body.  

With  regard  to  maritime  transport  preparations  are  almost  complete,  as  Croatia  has 
established a Vessel Traffic Monitoring and Information System (VTMIS), and the system is 
planned  to  be  fully  operational  at  the  beginning  of  2013.  The  Croatian  flag  continued  to 
remain in 2011 on the White List of the Paris MoU. Particular attention needs to be paid to 
ensuring  non-discriminatory  market  access  in  maritime  agreements  and  establishment  of  an 
independent accident investigation body.  

With respect to satellite navigation preparations are complete. Following accession Croatia 
will participate in the Galileo programme as an EU Member State. 

Conclusion 

Croatia is meeting the commitments and requirements arising from the accession negotiations 
in the field of transport policy and is expected to be in a position to implement the acquis by 
the  date  of  accession.  Further  efforts  are  required,  in  particular  to  strengthen  the 
administrative  capacity  and  to  ensure  the  independence  of  the  yet  to  be  established  joint 
accident  investigation  body,  in  order  to  ensure  Croatia  completes  its  preparations  for 
membership by the date of accession. 

4.15.  Chapter 15: Energy 

In  the  field  of  security  of  supply  preparations  are  advanced.  As  regards  the  mandatory  90 
days  of  emergency  oil  stocks,  Croatia  has  established  the  reserve  targets  in  line  with  the 
acquis. It needs to continue efforts to establish its own storage.  

In  the  field  of  the  internal  energy  market  alignment  is  moderately  advanced.  Croatia  has 
adapted implementing legislation to bring it further into line with the acquis. The alignment 
with  the  third  energy  package  is  significantly  delayed  compared  to  Croatia’s  original 
timetable  and  remains  to  be  achieved.  Further  efforts  are  needed  to  improve  competition  in 
the  electricity  and  gas  markets,  in  particular  by  ensuring  the  cost-reflectivity  of  regulated 
energy  tariffs  and  the  predictability  and  transparency  of  tariff  setting  measures.  Temporary 
price  caps  for  eligible  customers,  which  have  become  a  regular  practice,  remain  to  be 
removed.  In  addition,  the  energy  regulatory  authority  needs  to  play  a  more  assertive  and 
independent role, which will require it to be de-politicised. The tariff for the procurement of 
gas by suppliers to tariff customers needs to be removed.  

In the areas of renewable energy sources and energy efficiency, preparations are moderately 
advanced. Investments have been increasing, but are still below the targets set by the acquis. 
Although the issue of complicated and lengthy administrative procedures for RES projects has 
been  addressed  in  2012  further  efforts  are  needed  in  this  regard.  Investments  in  the 
transmission  and  distribution  network  will  also  be  necessary  to  accommodate  an  increasing 
uptake  of  intermittent  electricity  in  the  system.  The  Act  on  Energy  End-Use  Efficiency  and 
the Act on Physical Planning and Adoption have been amended. Full alignment will require 
the  adoption  of  implementing  legislation,  in  particular  regarding  energy  performance  of 
building. 

In the area of nuclear energy, nuclear safety and radiation protection, Croatia has largely 
aligned  its  legislation  with  the  acquis.  Implementing  legislation  relating  to  the  physical 
security of radioactive sources, nuclear material and nuclear facilities has been enacted. The 
previous different regulatory authorities, now merged under the State Office for Radiological 
and  Nuclear  Safety  (SORNS),  function  as  a  single  entity,  but  further  attention  is  needed  to 
ensure its independence and to continue improving its administrative capacity. The Euratom 
Directives on public  information  and  on shipment of radioactive waste and substances have 

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not  yet  been  transposed.  A  draft  national  emergency  plan  for  nuclear  accidents  has  been 
developed  and  an  Emergency  Preparedness  and  Review  (EPREV)  mission  has  been  carried 
out by the IAEA. Implementing legislation on certain aspects, such as control of high-activity 
sealed radioactive sources and orphan sources, has not yet been enacted. Furthermore, Croatia 
needs  to  establish  a  national  programme  for  the  management  of  spent  fuel  and  radioactive 
waste from generation to disposal, including radioactive waste and spent fuel from the Krško 
Nuclear  Power  Plant,  which  is  in  compliance  with  the  recently  adopted  Directive 
2011/70/EURATOM. 

Conclusion 

Croatia is meeting the commitments and requirements arising from the accession negotiations 
in  the  field  of  energy  and  is  expected  to  be  in  a  position  to  implement  the  acquis  as  of 
accession.  However,  further  efforts  are  required,  in  particular  to  align  to  the  third  internal 
energy  market  package  and  ensure  the  development  of  a  competitive  market  for  electricity 
and gas. Croatia also needs to continue efforts to meet the 2020 requirements regarding the 
promotion  of  energy  efficiency  and  renewable  energy,  as  well  enhance  administrative 
capacity, especially in the Sector for Energy of the Ministry of Economy, in order to ensure 
that Croatia completes its preparations for membership by the date of accession. 

4.16.  Chapter 16: Taxation 

Legislative  alignment  in  the  field  of  indirect  taxation  has  further  advanced  and  is  almost 
completed. New legal provisions were adopted on the introduction of an electronic system for 
supervising  movements  of  excise  goods.  Legal  alignment  in  the  area  of  excise  duties  and 
VAT needs to be completed, with special reference to the scope of the reduced rates, tobacco 
products, exemptions and special schemes.  

In accordance with the transitional arrangement granted, Croatia is committed to remove the 
exemption from VAT regarding the supply of building land, whether or not built on, by the 
end of 2014. Similarly, in accordance with the transitional arrangement, Croatia is committed 
to remove by the end of 2017 the excise duties on cigarettes that are lower than the minimum 
level set in the acquis. 

Legislative  alignment  in  the  field  of  direct  taxation  has  further  advanced  and  is  almost 
completed. In November 2011 and February 2012 legislation implementing the Profit Tax Act 
was adopted which is in line with the acquis on direct taxation.  

Alignment  in  the  field  of  administrative  cooperation  and  mutual  assistance  has  further 
advanced and is almost complete. Further efforts to prepare staff of the Central Liaison Office 
and the Excise Liaison Office for administrative cooperation and mutual assistance tasks are 
required. An IT application for the exchange of information as regards the acquis on taxation 
of savings needs to be developed. Further efforts are needed to reduce the backlog of appeals 
suspending the payment of taxes, as this has a significant impact on the collection of national 
revenues  (and  likewise  of  EU  own  resources  after  accession).  (See  also  Chapter  33  — 
Financial and budgetary provisions) 

Alignment  in  the  field  of  operational  capacity  and  computerisation  has  further  advanced 
and is almost complete. Both the Tax Administration and the Customs Directorate (in charge 
of collection of excise duties) updated their business strategies for the period up to and after 
accession, together with some of the associated sector strategies, e.g. for human resources and 
IT.  Further  efforts  are  required  to  implement  these  strategies  in  practice,  especially  through 
developing  concrete  action  plans  and  further  sector  strategies  for  particular  core  areas 
(including controls and risk management). The personal identification number (PIN) has been 
made  fully  operational  and  access  to  the  electronic  system  for  declaring  taxes  has  been 

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broadened. Further attention must be given to the need for Croatia to ensure that all relevant 
IT systems are in place and to be able to exchange information with the EU institutions and 
other Member States from the day of accession. Efforts need to continue to launch the Excise 
Movement and Control System (EMCS) at national level in March 2013. 

Conclusion 

Croatia is meeting the commitments and requirements arising from the accession negotiations 
in  the  field  of  taxation  and  is  expected  to  be  in  a  position  to  implement  the  acquis  as  of 
accession. Alignment with the acquis is almost complete with the exception of some areas of 
excise duties and VAT. Further efforts are required to ensure that all relevant IT systems are 
in place and to be able to exchange information with EU institutions and other Member States 
as  from  the  day  of  accession,  in  order  to  ensure  Croatia  completes  its  preparations  for 
membership by the date of accession. 

4.17.  Chapter 17: Economic and monetary policy 

Legislative alignment has been completed in the field of monetary policy. 

In  the  area  of  economic  policy  Croatia  has  further  advanced  and  has  almost  completed 
fulfilling  the  commitments  and  requirements  arising  from  the  accession  negotiations. 
Improvement  of  the  institutional  and  technical  capacity  for  developing  medium-term 
macroeconomic  and  fiscal  frameworks  continued.  The  Fiscal  notification  and  the  Pre-
accession  Economic  Programme  (PEP)  2012-2014  was  submitted  in  March  2012  and 
presented  a  comprehensive,  though  optimistic,  and  consistent  macroeconomic  and  fiscal 
framework for economic policies. Overall, broad political consensus on the fundamentals of a 
market economy was maintained.  

Implementation  of  the  necessary  structural  reforms  needs  to  be  stepped  up.  Alignment  of 
fiscal reporting with ESA95 standards needs to be further enhanced.  

Conclusion  

Croatia is meeting the commitments and requirements arising from the accession negotiations 
in the field of economic and monetary policy and is in a position to implement the acquis as 
of accession. 

4.18.  Chapter 18: Statistics 

Legislative alignment in the field of statistics has further advanced and is almost complete.  

The  responsibilities  of  the  Croatian  Bureau  of  Statistics  (CBS)  have  increased  and  it  is 
gradually  taking  the  leading  methodological  role  in  the  compilation  of  Excessive  Deficit 
notifications.  

Croatia has further advanced in the field of classifications and registers, where the Croatian 
Bureau  of  Statistics  (CBS)  is  steadily  working  on  improving  the  coverage  the  Statistical 
register of business entities and the statistical farm register. 

Croatia  has  advanced  in  the  area  of  sectoral  statistics.  Publication  of  the  annual  GDP  data 
according to the EU requirements has been completed. Increased efforts are needed to provide 
all  data  in  accordance  with  the  ESA95  transmission  programme,  a  complete  GNI  Inventory 
and a complete set of government deficit and debt statistics (EDP). 

Concerning  agriculture  statistics,  the  2010  Farm  structure  survey  (FSS)  data  and  Survey  on 
Agricultural  Production  Methods  (SAPM)  data  were  transmitted  to  Eurostat  in  April  2012. 
The use of administrative data in producing agricultural statistics is constantly increasing.  

A  pilot  survey  for  Intrastat  was  carried  out.  Testing  the  Intrastat  methodology  and  related 

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applications in CBS and in the Customs Administration (CA) is on-going. 

Conclusion 

Croatia is meeting the commitments and requirements arising from the accession negotiations 
in the field of statistics and is in a position to implement the acquis as of accession.  

4.19.  Chapter 19: Social policy and employment  

Croatia  has  largely  aligned  its  legislation  in  the  field  of  labour  law.  A  new  Aliens  Act 
transposing the acquis on posting of workers was adopted in October 2011. Legal alignment 
still needs to be completed, notably as regards working conditions of mobile workers engaged 
in  interoperable  cross-border  services  in  the  railway  sector  and  on  the  European  Works 
Council Directive. Strengthening the administrative capacity of the Wage Guarantee Agency 
needs to continue. A municipal court for work-related disputes in Zagreb has been operational 
since January 2012. Training of judges in the area of labour law needs to continue. 

Croatia  has  largely  aligned  its  legislation  in  the  field  of  health  and  safety  at  work.  Legal 
alignment still remains  to be completed as  regards  the Occupational  Safety  and Health  Act. 
As regards administrative capacity, training of labour inspectors has continued. The number 
of  labour  inspectors  (111)  still  falls  short  of  the  requirements  of  the  State  Inspectorate  Act 
(139).  

In  the  area  of  social  dialogue,  Croatia  is  well  prepared.  Regular  meetings  of  the  Economic 
and  Social  Council  have  continued  following  the  constitution  of  the  new  government,  with 
strategic  reform  issues  being  debated  in  plenary.  Representativeness  criteria  for  the 
participation of trade unions in collective bargaining were adopted in July 2012. Two bipartite 
sectoral  councils  (social  councils  for  road  and  railway  transport)  have  been  established  in 
addition to the two already established tripartite sectoral councils. Training has been provided 
for  mediators  in  collective  labour  disputes.  Capacity  building  of  social  partners  to  assume 
their responsibilities for social dialogue at EU level needs to continue.  

As regards employment policy, Croatia is sufficiently prepared. Amendments to the Law on 
Contributions were adopted in February 2012 with the aim of making the labour market more 
competitive. An employment incentive package focusing on providing long-term traineeships 
for young people has been adopted; providing a quality framework in implementation will be 
essential.  Funds  for  active  labour  market  policies  have  been  increased.  The  situation  on  the 
labour  market  has  further  deteriorated,  with  the  young  and  the  long-term  unemployed 
particularly hard hit. So far, effects to make the labour market more dynamic and overcome 
its  structural  weaknesses  have  been  limited.  Low  participation  and  employment  rates  still 
need to be addressed (See Economic criteria). Employment policy also needs to be subject to 
regular  monitoring  and  evaluation.  The  mismatch  between  demand  and  supply  and  skills 
forecasting still needs to be addressed. A full-fledged strategy for lifelong learning still needs 
to be adopted. As regards undeclared work, more efforts are needed to address the issue, in 
terms of both policy targets and implementation. 

As regards preparations for the European Social Fund, Croatia is well prepared. Recruitment 
and  training  of  staff  are  ongoing.  Further  capacity  building  of  relevant  structures  needs  to 
continue to allow sufficient absorption of the future funds under the ESF.  

In the area of social inclusion, Croatia is sufficiently prepared. A new Social Welfare Act was 
adopted by the parliament in March 2012, aimed at rationalising social benefits and advancing 
the  fiscal  and  administrative  decentralisation  of  social  services.  Decentralisation  of  social 
services is still at an early stage. Further efforts are needed to make the labour market more 
inclusive  and  to  provide  adequate  pensions  or  income  support  for  the  elderly.  Particular 
attention  needs  to  be  paid  to  the  employment  of  minorities  in  the  state  administration. 

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Challenges  remain  in  terms  of  reducing  health  and  regional  inequalities  and  in  terms  of 
inclusive rural development. Implementation of measures envisaged under the Master Plan on 
De-institutionalisation 2011–2016 needs to be speeded up.  

People  with  disabilities  continue  facing  discrimination  on  the  labour  market,  and  children 
with disabilities still face problems in access to education. In the public sector, employment 
quotas  are  not  being  met.  Public  awareness  of  the  rights  of  people  with  disabilities  remains 
low,  especially  in  rural  areas.  Attention  needs  to  be  paid  also  to  the  implementation  of 
regulations ensuring physical accessibility.  

In the area of social  protection, Croatia is sufficiently prepared.  New  legislation regulating 
the second and third pension system pillars entered into force in October 2011. Efforts need to 
continue  to  ensure  the  adequacy  and  sustainability  of  pensions,  and  to  reduce  further  the 
system of privileged pensions. More efforts to improve employment of older workers and to 
protect  elderly  people  without  income  are  needed.  Efforts  need  to  continue  to  implement  a 
comprehensive reform of health care to ensure that it is efficient and sustainable. 

Croatia  has  aligned  its  legislation  in  the  area  of  anti-discrimination  through  adoption  of 
amendments  to  the  Anti-discrimination  Act  in  September 2012.  Measures  aimed  at 
developing a comprehensive system of monitoring of cases of discrimination are ongoing. A 
number of measures have been taken to raise the awareness of anti-discrimination efforts and 
to  train  relevant  stakeholders.  These  efforts  need  to  continue,  in  particular  at  local  and 
regional levels, with a particular focus on remote and rural areas. Implementation of the Plan 
for Employment of National Minorities in State Administration Bodies for the period 2011–
2014 needs to continue. As regards administrative capacity, a new Law on Ombudsman was 
adopted in June 2012 providing for the existence of a general Ombudsman Office and other 
specialised Ombudsmen’s offices.  

Croatia has largely aligned its legislation in the field of equal opportunities. Legal alignment 
of the Occupational Safety and Health Act with Directive 92/85/EEC, on the introduction of 
measures  to  improve  safety  and  health  of  pregnant  workers  and  workers  who  have  recently 
given birth or are breastfeeding in the workplace, still needs to be completed. Follow-up and 
evaluation  of  measures  envisaged  under  the  National  Policy  for  the  Promotion  of  Gender 
Equality 2011–2015 need to continue. Employment rates for women remain much lower than 
those for men. 

Conclusion  

Croatia is meeting the commitments and requirements arising from the accession negotiations 
in the field of social policy and employment and is expected to be in a position to implement 
the acquis as of accession.  

Further  efforts  are  required,  in  particular  to  complete  legal  alignment  in  the  field  of  equal 
opportunities,  address  the  structural  weaknesses  on  the  labour  market,  better  target  social 
welfare, and to strengthen administrative capacity, in order to ensure that Croatia completes 
its preparations for membership by the date of accession.  

4.20.  Chapter 20: Enterprise and industrial policy 

In  the  field  of  enterprise  and  industrial  policy  principles  alignment  has  further  advanced 
and is almost complete. 

Excessive regulation in some areas and the cost of registration prevent expansion of the SME 
sector.  Administrative  and  judicial  weaknesses  continue  to  affect  the  business  environment. 
Croatia needs to continue taking action to further improve the conditions for doing business, 
by  increasing  the  predictability  of  the  business  environment,  such  as  by  implementing  the 

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regulatory impact assessment, and increasing transparency of decision making, particularly at 
local level.  

Croatia  has  further  advanced  in  developing  administrative  capacity  in  enterprise  policy. 
Alignment of the definition of SMEs with the EU recommendation has been completed with 
the  amendment  of  the  Act  on  SME  Support,  which  was  adopted  in  April  2012.  Other  acts 
mentioning  the  definition  of  SMEs  (e.g.  the  Accounting  Act)  remain  to  be  aligned  with  the 
EU  recommendation.  Croatia  needs  to  complete  alignment  with  the  EU  Directive  on 
combating late payment in commercial transactions. 

In  the  area  of  enterprise  and  industrial  policy  instruments,  Croatia  has  established 
appropriate instruments and is in advanced stage of implementation. Croatia continues to play 
an active part in the EU’s Competitiveness and Innovation Programme (CIP).  

Croatia  has  made  some  progress  in  the  field  of  sector  policies,  notably  in  the  wood  and 
shipbuilding sectors. (See Chapter 8 — Competition policy)  

Conclusion  

Croatia is meeting the commitments and requirements arising from the accession negotiations 
in the field of enterprise and industrial policy and is expected to be in a position to implement 
the acquis as of accession. Efforts are necessary to improve the business environment and to 
start the enforcement of the regulatory impact assessment. Further work is needed to align the 
legislation as regards combating late payment in commercial transactions. 

4.21.  Chapter 21: Trans-European networks 

In  the  field  of  trans-European  transport  and  energy  networks,  Croatia  has  completed 
alignment with the acquis. 

As regards the development of transport networks, the ISPA measure ‘Vinkovci to Tovarnik 
to State Border Railway Rehabilitation’ was completed and the section was opened to traffic 
at  the  end  of  2011.  However,  for  another  major  project,  ‘Zagreb  Main  Railway  Station 
Signalling  and  Interlocking  System’,  there  are  some  delays  in  implementation  due  to 
necessary works unforeseen in the initial planning.  

Croatia  has  actively  participated  in  the  development  of  new  network  development  plans  by 
the European Network of Transmission System Operators for Electricity (ENTSO-E) and in 
the first phase of the North-South Interconnection Initiative. The feasibility study for the first 
phase of an LNG terminal (1-2 bcm/year) is on-going. 

Further efforts are needed to ensure the necessary expertise and capacity for developing and 
implementing  complex  infrastructure  projects  so  as  to  maximise  absorption  of  the  currently 
available IPA funds and future cohesion and structural funds in this area. 

Conclusion 

Croatia is meeting the commitments and requirements arising from the accession negotiations 
in  the  field  of  trans-European  networks,  and  is  in  a  position  to  implement  the  acquis  as  of 
accession. 

4.22.  Chapter 22: Regional policy and coordination of structural instruments 

As  regards  the  legislative  framework  necessary  to  ensure  that  operations  financed  by  the 
Structural  and  Cohesion  Funds  are  fully  compatible  with  EU  policies,  alignment  with  the 
acquis is largely in place. A new law on public procurement together with legislation on the 
supervision of its implementation came into force in January 2012. Implementing legislation 
in the area of public procurement needs to be completed.  

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Preparations with regard to the institutional framework have further advanced and are now 
the 
almost  complete.  Following 
implementation  of  EU  funds,  a  revised  decision  regarding  the  management  and  control 
structures  for  post-accession  programmes  has  been  adopted  in  July  2012  and  is  to  be 
submitted  to  the  Commission.  Croatia’s  institutional  framework  for  implementing  the  EU 
cohesion policy will largely build on the existing implementation structures for IPA.  

the  reorganisation  of 

institutions 

involved 

the 

in 

Preparations are moderately advanced in the field of administrative capacity. Some delays 
have occurred in building up staffing levels as shown by delays in the implementation of IPA. 
Following a workload assessment, the Government adopted a decision in July to recruit 232 
staff  by  October  in  view  of  preparation  for  the  Structural  Funds  and  the  Cohesion  Fund. 
Increased  efforts  are  needed  to  enhance  capacity  in  line  with  the  Institutional  Development 
and Capacity Building Strategy and the Action Plan for Implementation for the period 2010-
2013. Croatia needs to accelerate measures in building up the required administrative capacity 
for managing the Structural Funds and the Cohesion Fund.  

Croatia is at an advanced stage in preparations in relation to programming requirements. The 
finalised  National  Strategic  Reference  Framework  and  the  Structural  Funds  Operational 
Programmes for the whole period 2007-2013 are to be submitted to the Commission by end 
2012.  Sustained  and  increased  efforts  are  required  to  build  up  a  high  quality  and  mature 
project pipeline with a view to swift absorption of regional policy funds.  

Preparations are moderately advanced in the field of monitoring and evaluation. Based on 
the set-up and experience under IPA, the development of a Monitoring and Evaluation System 
and  an  electronic  management  and  information  system  for  structural  and  cohesion  funds 
continued.  An  evaluation  strategy  was  adopted  in  March  2012  that  provides  a  coherent 
framework  for  evaluations  under  the  cohesion  policy.  The  interim  evaluation  of  current 
Operational Programmes (OPs) and ex ante evaluations of future OPs has started. Continuous 
efforts are needed to complete the establishment of the required system and ensure that it is 
fully functioning. 

Croatia’s  preparations  in  the  field  of  financial  management,  control  and  audit  are 
moderately advanced (See also Chapter 32 — Financial control). Requests for the waiver of 
ex ante controls under IPA were sent to the Commission and are being assessed. Waiver of ex 
ante controls for IPA components preparing for structural and cohesion funds should facilitate 
compliance  assessment,  which  is  a  precondition  for  payments  of  structural  and  cohesion 
funds.  Croatia  needs  to  further  strengthen  its  capacity  in  these  fields  so  as  to  comply,  upon 
accession, with the specific financial control provisions applicable to the Structural Fund and 
the Cohesion Fund. 

Conclusion 

Croatia  is  generally  meeting  the  commitments  and  requirements  arising  from  the  accession 
negotiations  in  the  field  of  regional  policy  and  coordination  of  structural  instruments  and 
should be in a position to implement the acquis as of accession.  

Increased  efforts  are  required  to  strengthen  the  administrative  capacity  for  future  cohesion 
policy implementation and to develop a high quality and mature project pipeline, with a view 
to  swift  absorption  of  regional  policy  funds,  building  on  the  recent  report  of  the  European 
Court of Auditors. 

4.23.  Chapter 23: Judiciary and fundamental rights (See also Political criteria) 

Croatia  is  generally  meeting  the  commitments  and  requirements  arising  from  the  accession 
negotiations in the field of the judiciary and fundamental rights and should be in a position to 
implement the acquis as of accession, as outlined in the 10 areas set out in Annex VII of the 

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Act of Accession. However, increased efforts are needed to continue strengthening the rule of 
law  and  to  fight  and  prevent  corruption  effectively.  Prosecution  of  domestic  war  crimes, 
respect for human rights and the protection of minorities requires continuous attention.  

1)  To  continue  to  ensure  effective  implementation  of  its  Judicial  Reform  Strategy  and 
Action Plan 

Implementation of the judicial reform strategy and action plan has continued generally in line 
with  the  deadlines  set,  and  included  legislative  fine-tuning  in  a  number  of  areas.  Working 
groups  have  been  established  and  are  active  to  further  improve  specific  legislation  and  to 
increase coordination of legal instruments. Human resources planning, including for the long-
term  needs  of  the  judiciary,  remains  to  be  improved.  The  budget  available  for  the  judiciary 
remained  stable  at  around  € 337  million,  or  0.7%  of  GDP.  A  council  for  monitoring  the 
implementation of the Judicial Reform Strategy was established in February 2012, focusing in 
particular on the efficiency of court proceedings. Amendments to the State Judicial Council 
Act  were  adopted  in  October  2011  to  further  increase  scope  for  transferring  judicial  staff 
according to needs. 

2)  To  continue  to  strengthen  the  independence,  accountability,  impartiality  and 
professionalism of the judiciary 

Implementation  of  the  various  measures  taken  in  2010  and  2011  to  strengthen  the 
independence, accountability, impartiality and professionalism of the judiciary has continued. 
The  reformed  State  Judicial  Council  (SJC)  and  State  Prosecutorial  Council  (SPC)  have 
continued to function independently.  

Both  bodies  have  continued  to  appoint  judicial  officials  based  on  transparent,  uniform  and 
objective  criteria.  Since  2011  63  judges  have  been  appointed.  Improvements  in  the 
implementation  of  the  transitional  system  of  appointing  judges  and  prosecutors  have  been 
introduced,  including  greater  transparency  in  marking  interviews,  with  attention  paid  to 
ensuring  equal  treatment  of  all  candidates.  This  is  important  in  the  final  months  of 
implementation  of  the  transitional  system,  up  to  December  2012.  Lessons  learned  from  the 
implementation of the transitional system should be applied to the implementation of the new 
system  of  appointments  through  the  State  School  for  Judicial  Officials,  which  will  start  in 
January  2013.  This  experience  should  also  be  taken  into  account  in  upgrading  the  selection 
procedure for transferring judges to different positions. The first intake of candidates for the 
State School for Judicial Officials is finishing the second school year. However, enrolment of 
the  second  annual  intake  of  55  candidates  was  substantially  delayed,  with  candidates  being 
selected only in July for the programme to start in September. 

The  SJC  has  begun  implementation  of  the  new  system  of  asset  declarations  for  judges. 
Disciplinary measures are being taken in cases of wrongdoing by judicial officials. Both SJC 
and  SPC  became  more  proactive.  However,  the  track  record  of  implementation  of  the  new 
system of disciplinary proceedings needs to be further developed. 

The SJC and SPC need to be provided with further administrative resources to function more 
effectively  and  need  to  demonstrate  independence  and  accountability  in  carrying  out  their 
increased  tasks,  including  systematic  and  accurate  checking  of  asset  declarations  and 
proactive application of disciplinary procedures. 

Secondary legislation remains to be amended to limit judges’ immunity, thereby completing 
the  legislative  framework  in  this  field,  and  further  guidance  should  be  provided  on  the 
application of the code of conduct.  

The Judicial Academy continued to work well. Professional training programmes, including 
initial training, have continued. Training on EU law has been stepped up. The involvement of 

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the  Judicial  Academy  in  Europe-wide  activities  has  increased  and  Croatia  has  signed  a 
Memorandum  of  Understanding  with  the  Commission  on  participation  in  the  EU  Civil  and 
Criminal  Justice  Programmes.  However,  budget  limitations  (a  cut  of  approximately  28%  in 
the 2012 budget compared to 2011) affected the functioning of the Academy. Attention has to 
be paid to fully preparing judges to apply EU law and jurisprudence as of accession. 

3) To continue to improve the efficiency of the judiciary 

Croatia has continued to implement various measures aiming at improving the efficiency of 
the  judiciary.  In  the  first  semester  2012  the  backlog  of  criminal  cases  continued  to  fall  by 
around 12%, and the number of old civil cases decreased by around 5%. However, a bigger 
effort  is  needed  to  reduce  the  number  of  unresolved  civil  and  commercial  cases  further. 
Slightly  more  new  cases  entered  the  system  in  the  first  semester  2012  (844,218)  than  were 
resolved (836,160).  

Also  the  number  of  enforcement  cases  increased  by  around  5%  in  the  first  semester  2012, 
although  the  enforcement  system  for  monetary  claims  run  by  the  financial  agency  FINA 
worked  well.  In  July  2012  the  government  submitted  to  Parliament  proposals  for  new 
enforcement legislation, which no longer provides for the introduction of public bailiffs. The 
new system, once adopted, will have to demonstrate its capacity to ensure the enforcement of 
court  decisions  and  writs  of  executions  and  to  reduce  the  backlog  of  enforcement  cases. 
Further attention needs to be paid to ensuring that higher courts, including the Supreme Court, 
are adequately equipped to handle the disproportionate increase as cases advance through the 
system. The new system of administrative justice came into force in January 2012, albeit with 
some  delays  in  appointing  the  necessary  staff.  Croatia  needs  to  continue  to  implement 
efficiency measures with vigour, in particular to ensure improved rates of case handling and 
reductions in the number of old cases.  

Some progress has been made with the physical infrastructure and computerisation of courts. 
The merger of courts as part of the court rationalisation process is continuing. The roll-out of 
the integrated case management system (ICMS) in 33 municipal courts is underway. Once it 
is finished, it will cover almost all courts in Croatia. However, the system should be applied to 
the  High  Commercial  Court  and,  for  case  management  of 
all  courts, 
misdemeanours,  the  High  Misdemeanour  Court.  Moreover,  further  improvements  are  still 
needed in statistical data collection and analysis and in the monitoring of the overall length of 
proceedings.  In  general,  misdemeanour  courts  need  better  equipment  and  premises.  Further 
efforts  are  needed  to  increase  mobility  of  judges  and  to  develop  the  framework  criteria  for 
assessing their productivity.  

including 

4) To continue to improve the handling of domestic war crimes cases 

Croatia has continued to process domestic war crimes cases. Implementation of the strategy 
for addressing impunity has started and a number of priority cases identified at national and 
regional  level  have  been  addressed,  with  further  arrests,  indictments  and  court  rulings. 
However,  the  majority  of  crimes  have  not  yet  been  pursued  in  Court.  A  more  balanced 
approach  to  trials  has  continued,  with  further cases  being  transferred  to  the  four  specialised 
courts  (87).  Measures  have  been  taken  to  protect  witnesses  with  improved  witness  support 
services  at  certain  courts.The  war  crimes  database  should  be  upgraded  to  enable  more 
analytical information searches and should be effectively used by county prosecutors. Courts 
should  further  specialise  in  war  crimes  trials,  through  specific  training  of  dedicated  judges, 
and  should  prepare  for  an  increasing  number  of  cases.  Croatia  needs  to  give  continuous 
attention to the issue of witness protection and attendance of witnesses in war crimes trials, 
especially in cases relocated to the specialised chambers. The review of cases tried in absentia 
should  continue.  The  Law  on  invalidation  of  certain  legal  acts  of  the  judicial  bodies  of  the 

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Former Yugoslav National Army, the former Socialist Federal Republic of Yugoslavia and of 
the Republic  of Serbia adopted in October 2011 gave rise to concerns about future bilateral 
cooperation with Serbia in war crimes cases. The law has been challenged by the Presidentin 
the  Constitutional  Court  on  procedural  grounds.  Croatia  has  made  contact  with  Serbia  to 
address  the  possible  adverse  effects  of  the  law,  and  has  started  technical  negotiations  with 
Serbia on an agreement on cooperation in this field.  

Further efforts have to be made to tackle impunity especially as the majority of cases have yet 
to reach final verdict or are still to be investigated. Croatia needs to give continuous attention 
to the issue of witness protection and attendance of witnesses in war crimes trials, especially 
in cases relocated to the specialised chambers.  

5)  To  continue  to  ensure  a  sustained  track  record  of  substantial  results  based  on 
efficient, effective and unbiased investigation, prosecution and court rulings in organised 
crime  and  corruption  cases  at  all  levels  including  high  level  corruption,  and  in 
vulnerable sectors such as public procurement 

An  adequate  legal  and  institutional  framework  remains  in  place  for  the  fight  against 
corruption  and  organised  crime  and  a  track  record  of  implementation  continues  to  be 
developed.  Law  enforcement  bodies  remain  proactive,  especially  in  higher-level  cases. 
Developments include guilty verdicts against a former manager of a state-owned company, a 
city mayor and a County Court judge for abuse of office and indictment of a political party for 
corruption.  While  the  law  enforcement  bodies  continue  to  focus  on  more  complex,  higher-
level cases, the overall number of cases being handled is falling. 

Local-level  corruption  needs  attention,  particularly  in  public  procurement.  The  legal 
framework  for  the  seizure  and  confiscation  of  assets  needs  to  be  better  implemented  across 
the board.  

Further attention should be paid to the system for checking on dismissals of criminal cases by 
the prosecutor. The current system does not provide for independent checks on decisions by 
State prosecutors to dismiss reports of crime. 

A number of senior appointments to the police were made. The implementation of the Law on 
the  Police  should  be  ensured,  in  particular  to  depoliticise  the  police  and  increase 
professionalism of the police. 

6) To continue to improve its track record of strengthened prevention measures in the 
fight against corruption and conflict of interest  

Croatia  improved  its  track  record  of  strengthened  prevention  measures  in  the  fight  against 
corruption by means of a number of legal instruments, e.g. on the financing of political parties 
and electoral campaigns, access to information and public procurement. However, Croatia has 
not efficiently implemented all legal measures to prevent conflict of interest. 

As  regards  the  financing  of  political  parties  and  election  campaigns,  the  State  Electoral 
Commission, which is the supervisory body, was strengthened and new rules were applied to 
the  general  elections  in  December  2011  without  major  difficulties  and  with  few  reported 
shortcomings. A working group was set up to draw on lessons learnt in preparing for the local 
elections planned for 2013. Continuous efforts are needed to effectively control the financing 
of political parties, including outside the election period. 

New  rules on access to information are being applied, with the first appeals reaching court. 
However,  general  monitoring  by  the  Data  Protection  Agency,  which  is  in  charge  of 
implementing the law, is difficult because in 2011 less than half of the institutions concerned 
submitted a report to the agency. In 2011, no public interest test was applied to classified data. 

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The current practice of the Administrative Court is to confirm the existence of such data and 
deny  access  to  it.  The  practice  of  applying  the  public  interest  test  to  classified  information 
needs to be developed, including through legislative changes.  

The  new  public  procurement  legislation  in  force  since  January  2012  provides  for  increased 
transparency, including publication of information on the actual execution of contracts. The 
effective implementation of this legislation is key. 

Improved and stricter conflict of interest legislation was adopted in early 2011; however, the 
new  Conflict  of  Interest  Commission  has  still  not  been  appointed,  and  this  has  delayed  the 
implementation  of  the  law.  Some  initial  steps  have  been  taken  for  the  setting  up  of  the 
Commission, with the publication by the Parliament of the request for expressions of interest 
for the selection of the Commission’s members in August 2012. The system for checking on 
asset  declarations  and  unjustified  wealth  needs  to  be  strengthened  and  effectively 
implemented.  

Provisions  of  the  previous  legislation  on  criteria  for  membership  of  the  supervisory  and 
management boards of public companies have been overturned. Croatia needs to ensure that a 
strong  system  is  in  place  to prevent  corruption  in  state-owned  companies.  The  Conflict  of 
Interest  Commission  needs  to  be  established  without  delay.  The  concept  of  political 
accountability and zero tolerance of corruption needs to continue being developed.  

7)  To  continue  to  strengthen  the  protection  of  minorities,  including  through  effective 
implementation  of  the  Constitutional  Act  on  the  Rights  of  National  Minorities 
(CARNM) 

Implementation  of  the  Constitutional  Act  on  the  Rights  of  National  Minorities  continues. 
Eight  members  of  parliament  representing  national  minorities  were  elected  in  December 
2011.  Some  steps  have  been  taken  by  the  government  to  implement  the  May  2011  plan  for 
minority employment for the period 2011-2014. The level of employment of minorities in the 
state  administration  and  judiciary  remains  below  the  requirements  set  by  the  Constitutional 
Act on the Rights of National Minorities. While this may be partially explained by relatively 
few  new  recruitments  due  to  the  general  economic  crisis,  more  efforts  should  be  made  to 
ensure implementation of this plan, including increased monitoring efforts. 

Croatia also needs to continue to foster a spirit of tolerance towards minorities, in particular 
Serbs, and to take appropriate measures to protect those who may still be subjected to threats 
or acts of discrimination, hostility or violence. The Roma minority faces particularly difficult 
living  conditions,  and  challenges  remain  in  the  areas  of  education,  social  protection,  health 
care, employment and access to personal documents. 

8) To continue to address outstanding refugee return issues 

Housing Care programmes for returning refugees continue to be implemented, although at a 
slower pace. Under the March 2011 plan for dealing with the approximately 2,350 remaining 
applications, by August 2012, 259 were settled, out of which 139 families took over the keys. 
By August 2012, 1,305 positive approvals for housing care above the benchmark for housing 
care have been given. 106 appeals for housing reconstruction are still pending. The decision 
on  validating  pension  rights  continues  to  be  implemented.  Croatia  has  also  continued  to 
engage  with  the  other  countries of  the  region  in  the  Sarajevo  Declaration  Process,  in  which 
progress is being made, particularly on the regional housing project. There has been limited 
implementation  of  the  new  purchase  options  under  favourable  conditions  for  housing  care 
beneficiaries and no significant progress with regard to the 15 unsolicited investment cases. 
Conditions for sustainable refugee return need to be further developed. 

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9) To continue to improve the protection of human rights 

Human  rights  continued  to  be  generally  well  respected.  However,  existing  legal  provisions 
need 
to  be  applied  with  more  vigour.  The  general  Ombudsman  and  specialised 
ombudspersons continue to play an important role in human rights protection. However, the 
follow-up  of  the  Ombudsman’s  recommendations  needs  to  be  ensured.  The  Constitutional 
Court revoked a law on the merger of the Ombudsman’s offices with the Centre for Human 
Rights and with the three specialised Ombudspersons for gender equality, for children and for 
disabled  persons,  due  to  procedural  reasons.  New  legislation,  which  no  longer  foresees  the 
merger  of  the  offices,  was  adopted  in  July  2012.  The  Ombudsman  offices  need  to  be 
strengthened to further improve the human rights protection system. This includes providing 
adequate financing and office premises, and setting up a joint database.  

Croatia  has  further  developed  its  track  record  of  implementation  of  the  Anti-discrimination 
Act and legislation on hate crimes. This needs to continue to develop, with attention paid to 
ensuring  that  dissuasive  sanctions  are  applied.  Amendments  to  the  Anti-discrimination  Act 
were adopted by the Parliament in September 2012. The gay pride events in Split and Zagreb 
took place without major incidents, with strong commitment from the Croatian government to 
their smooth organisation. Lesbians, gays, bisexual and trans-gender (LGBT) people still face 
threats and attacks. The legal framework for free legal aid has to be improved to enable better 
access to legal aid and to foster the role of NGOs as legal aid providers. 

10)  To  continue  to  cooperate  fully  with  the  International  Criminal  Tribunal  for  the 
former Yugoslavia 

Croatia  continues  to  cooperate  with  the  International  Criminal  Tribunal  for  the  former 
Yugoslavia  (ICTY).  There  have  been  no  particular  developments  with  respect  to  Croatia’s 
investigations  aimed  at  locating  or  determining  the  fate  of  missing  military  documents 
requested by the Office of the ICTY Prosecutor. Croatia’s request to act as amicus curiae in 
the appeal against the verdict of 15 April 2011 in the case of Croatian Generals Gotovina and 
Markač was rejected by the Court. The ICTY Chief Prosecutor has issued a positive report on 
Croatia’s cooperation with the ICTY.  

4.24.  Chapter 24: Justice, freedom and security 

In the field of migration, Croatia has further aligned with the acquis and preparations in this 
area are almost complete. The number of irregular migrants apprehended in 2011 increased to 
3,461.  Over  the  same  period,  552  unaccompanied  irregular  minors  were  identified  (their 
number  is  almost  twice  as  high  as  the  previous  year).  Good  cooperation  with  the  other 
countries of  the region in the  field  of readmission  can be noted; the agreement  with Bosnia 
and  Herzegovina  entered  into  force  in  April  2012.  A  similar  agreement  was  signed  with 
Germany  in  March  2012.  Work  is  on  track  to  build  the  facility  for  minors  and  other 
vulnerable  groups  of  illegal  migrants  in  Jezevo.  Further  efforts  are  needed  to  start  building 
two  additional  transit  reception  centres  for  irregular  migrants.  On  legal  migration,  the  new 
Aliens  Act  entered  into  force  in  January  2012,  further  aligning  the  national  legislation  with 
the acquis in this field. The preparation of a new migration strategy needs to continue without 
delays.  Croatia  will  need  to  implement  the  legal  framework  on  unaccompanied  minors,  by 
developing  for  them  appropriate  assistance  and  start  building  the  new  reception  centres  for 
irregular migrants before accession. Alternative temporary solutions, taking into account the 
growing number of migrants entering the country, especially in the border areas, need to be 
considered. 

In the field of asylum Croatia has almost completed alignment with the acquis. Preparations 
need to ensure sufficient institutional capacity in this field, in terms of sufficient and trained 

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personnel, taking due account of the steady increase in the number of asylum seekers in the 
country.  Implementing  legislation  in  the  field of  free  legal  aid  during  the  asylum  procedure 
was  adopted  in  March  2012.  The  administrative  courts  took  over  responsibility  for  second-
instance  asylum  cases  as  of  January  2012.  Following  a  three-month  transitional  period,  the 
commission for asylum ceased its work in March 2012. An initial number of posts for judges 
and administrative staff of the new courts were filled; training on asylum for the staff began. 
Refugees still face difficulties in securing access in practice to the rights granted to them by 
national law. The recruitment and training of the administrative courts’ judges and employees 
need to continue. The number of asylum seekers increased sharply, from 290 in 2010 to 807 
in  2011.  The  Ministry  of  the  Interior  has  stepped  up  its  efforts  to  offer  certain  services  to 
asylum  seekers,  with  the  support  of  local  NGOs,  but  the  involvement  of  all  the  other 
ministries  needs  to  be  ensured.  Preparations  for  implementing  the  Dublin  and  Eurodac 
Regulations  have  continued,  including  by  providing  the  personnel  of  the  Ministry  of  the 
Interior and the border police with relevant training. Croatia will need to ensure that refugees 
enjoy full access to their rights before accession.  

Legislative alignment is moderately advanced as regards visa policy and needs to progress, to 
reach full alignment with the acquis on visa issuance and travel documents. The new Aliens 
Act entered into force in January 2012; the related implementing legislation has not yet been 
adopted. On visa requirements, Croatia has fully aligned its legislation with the EU positive 
list  of  Regulation  539/2001.  Further  alignment  is  required  with  the  uniform  procedure  for 
issuing  visas  and  the  EU  visa  code.  The  list  of  countries  whose  nationals  require  a  visa  to 
enter Croatian territory is not yet fully aligned with that of the EU. The government adopted a 
decision  temporarily  liberalising  the  visa  regime  for  citizens  of  the  Russian  Federation, 
Ukraine  and  Kazakhstan  for  transit  through  or  staying  up  to  90  days  from  1  April  to  31 
October  2012,  which  is  not  in  line  with  the  acquis;  the  decision  will  cease  to  apply  as  of 
November.  Biometric  passports  are  compliant  with  EU  standards;  the  old  ID  cards  issued 
before 2003 are still in circulation but in August 2012 the Government adopted the decision 
that they cannot be used as valid travel documents.  

As regards requirements to be met as of accession to the Schengen area, further alignment is 
necessary on the procedure for issuing visas in line with the EU visa code. 

With  regard  to  external  borders  and  Schengen,  legislative  alignment  with  the  acquis  has 
progressed moderately and needs to continue for Croatia to be prepared to take over control of 
the EU external borders. The State Border Control Act and its implementing legislation were 
amended  at  the  end  of  2011.  The  Integrated  Border  Management  (IBM)  Action  Plan  was 
revised in April 2012. The National Maritime Centre in Zadar has started to be operational; 
yet  its  interconnectivity  with  relevant  Ministries  has  to  be  ensured.  The  cooperation  with 
Frontex  was  enhanced  and  includes  Croatia’s  participation  in  different  activities  and  joint 
operations. Regular coordination meetings take place with neighbouring countries, as do joint 
patrols  of  the  borders;  those  with  Serbia  and  with  Montenegro  need  to  be  enhanced.  A 
common  contact  point  with  Serbia  was  established  at  the  border  crossing  point  (BCP)  of 
Bajakovo-Batrovci and it is fully operational. A first coordination meeting with the authorities 
of Bosnia and Herzegovina, to implement the mutual agreement on state border control, was 
held  in  December  2011.  Discussions  with  both  countries,  and  with  Montenegro,  to  bring 
bilateral agreements on local border traffic in line with the acquis are advancing and need to 
be  finalised  before  accession.  The  Free  Transit  Agreement  with  Bosnia  and  Herzegovina 
(‘Neum agreement’) needs to be brought in line with the acquis before accession. 

Staffing  targets  for  the  border  police  set  for  2011  were  almost  completely  met;  308  new 
officers were hired in 2011. The total number as of May 2012 is 6,017, of which 4,647 are at 
the future external border. The recruitment needs to continue to reach the Schengen standards. 

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Basic and specialised training continued; full alignment with the programme of the Common 
Core Curriculum needs to be ensured, with the specialised training systematically included in 
the curricula of the border police.  

The IBM Action Plan was partly implemented; certain activities planned in 2011, relating to 
the procurement of technical equipment and to infrastructures, have been postponed to 2012. 
Delays in these areas need to be properly monitored and addressed, particularly with regard to 
the Neum corridor. The construction of the BCPs at the Neum corridor needs to be finalised 
such  that  they  are  operational  upon  accession.  The  installation  of  the  National  Border 
Management  Information  System  (NBMIS)  has  continued  but  the  new  system  is  not  yet 
installed at all BCPs. As of August 2012, it was operational at 81 BCPs. The preparation and 
the relevant training need to continue. Efforts need to be made to conclude the interministerial 
agreement and to continue recruitment, purchase of equipments and trainings, with a view to 
making the National Maritime Centre in Zadar fully operational. Inter-agency cooperation on 
IBM issues has continued, but a joint risk analysis is missing. Croatia will need to address the 
delays in implementing the IBM Action Plan, especially those related to infrastructures. All 
bilateral agreements need to be brought in line with the acquis before accession.  

Croatia has continued to align its legislation in the field of judicial cooperation in civil and 
criminal  matters  and  the  preparation  is  almost  completed.  An  agreement  on  mutual 
execution  of  criminal  judgments  with  Montenegro,  and  an  extradition  agreement  with  the 
former Yugoslav Republic of Macedonia, were signed in October 2011. A working group has 
been  set  up  and  met  several  times  to  prepare  the  new  Act  on  International  Private  Law. 
Cooperation  with  the  European  Judicial  Network  in  civil  and  commercial  matters  has 
progressed; a network of national contact points is being developed in this regard.  

Croatia  will  need  to  continue  strengthening  interinstitutional  coordination  on  judicial 
cooperation. 

As  regards  police  cooperation  and  the  fight  against  organised  crime,  activities  have 
continued  with  the  aim  of  bringing  the  national  legislation  into  line  with  the  acquis  and 
coping with the future challenges of fighting organised crime within the EU. In this area, the 
country  is advanced, but needs  to remain vigilant given  the important challenges as  regards 
organised crime activities in the region. 

A number of bilateral agreements in the field of police cooperation and organised crime were 
signed;  those  with  Bulgaria  and  with  Poland  were  ratified.  Good  cooperation  with  Europol 
has continued. Two new liaison officers have been appointed, respectively for Europol and for 
Bosnia  and  Herzegovina.  The  technical  preparation  and  staff  training  to  establish  the 
Supplementary Information Request at the National Entry (SIReNE) Office and the National 
Office  for  the  Schengen  Information  System  (SIS)  have  progressed;  yet  the  regulatory 
framework  for  the  SIS  office  is  still  missing.  A  decision  on  the  premises,  staff  and  the 
budgetary allocation destined to the SIReNE office needs to be taken. 

Both  the  legal  framework  and  the  institutions  in  charge  of  combating  organised  crime  have 
effectively  contributed  to  counteracting  this  phenomenon,  at  both  national  and  international 
level, taking into account the good level of alignment with the EU standards achieved in this 
area.  Training  and  activities  to  improve  police  performance  continued.  The  government 
decided  not  to  revise  the  Law  on  Police  currently  in  force;  part  of  the  legislation 
implementing  the  Police  Act  is  still  missing  and  needs  to  be  prepared  without  delay.  The 
Ministry of the Interior needs to develop IT support to ensure transparent implementation of 
the  Strategy  for  its  Human  Resources  Management.  The  track  record  on  organised  crime 
cases  has  continued  to  develop,  not  least  on  drug  trafficking.  Implementation  of  the  legal 
framework  on  the  seizure  and  confiscation  of  assets  needs  to  be  consolidated,  as  does  the 

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coordination  between  criminal  and  financial  investigations.  The  total  level  of  assets  seized 
and confiscated is relatively low and further efforts are necessary in this regard. A monitoring 
system to fight corruption in border management is in place. The equipment and the premises 
of  PNUSKOK’s  regional  office  in  Split  would  still  need  to  be  upgraded;  operational 
guidelines  and  specialised  training  for  the  newly  employed  staff  of  the  office  need  to  be 
introduced.  The  second-instance  body  which  reviews  cases  of  offences  against  the  public 
administration remains to be strengthened.  

Inter-agency  cooperation  in  exchanging  data  on  transactions  suspected  of  involving  money 
laundering or terrorist financing is now facilitated by the signature of an annex to the protocol 
on  cooperation  between  authorities  dealing  with  corruption,  organised  crime  and  the 
associated  crimes  of  money  laundering  and  terrorist  financing.  Training  on  anti-money 
laundering  measures  and  on  the  fight  against  cybercrime  has  continued.  Administrative 
capacities in the anti-money laundering field need to be improved (see also Chapter 4 — Free 
movement of capital), as well as the capacities of the law enforcement authorities to conduct 
financial investigations. 

The new Criminal Code, adopted in October 2011, splits the criminal offence of trafficking in 
human  beings  and  slavery,  introducing  new  types  of  exploitation.  The  national  action  plan 
against trafficking in human beings for the period 2012-2015 was adopted in February 2012; a 
new  national  committee  for  action  against  trafficking  was  set  up  in  March  2012. 
Implementation of the legislative framework on trafficking needs to be strengthened, as does 
public  awareness,  to  ensure  better  identification  and  protection  of  the  victims.  The  new 
national committee for action against trafficking has not yet met, since the beginning of 2012. 
In 2011, only 14 victims were identified (7 in 2010). Further measures need to be put in place 
to ensure their rehabilitation and compensation. The training for judges, prosecutors and other 
civil  servants  dealing  with  trafficking  needs  to  be  improved,  as  the  level  of  sentencing  in 
cases of human trafficking is very low compared to other types of organised crime.  

Croatia will need to complete a number of steps in this field before accession. These include 
putting  in  place  the  regulatory  framework  for  the  SIS  office  and  making  the  SIReNE’s  one 
fully operational, upgrading police equipment and the facilities of PNUSKOK, increasing the 
level  of  seized  and  confiscated  assets  and  better  coordinating  criminal  and  financial 
investigations. In the fight against trafficking in human beings, attention needs to be paid to 
implementation of the relevant legal framework and to the overall definition of policies in this 
area.  

With regard to internal border control, a decision on the application of the relevant Schengen 
acquis in Croatia shall be taken by the Council, in accordance with the applicable Schengen 
procedures  and  while  taking  into  account  a  Commission  report  confirming  that  Croatia 
continues to fulfil the commitments undertaken in its accession negotiations that are relevant 
for the Schengen acquis. 

Alignment  is  moderately  advanced  in  the  fight  against  terrorism  and  will  require  further 
attention,  especially  to  implement  the  Action  Plan  for  the  prevention  and  suppression  of 
terrorism  and  the  Maritime  anti-terrorism  plan.  Experts  from  the  police  attended  various 
training sessions on topics related to anti-terrorism, such as counter-explosive protection and 
measures  to  protect  against  ionising  radiation.  The  Ministry  of  the  Interior  completed  the 
examination  of  the  Murat  storage  facility  for  explosives  and  ammunition,  in  line  with  the 
acquis;  additional  efforts  need  to  be  made  to  complete  the  work  at  a  similar  location  near 
Djakovo.  Safety  studies  for  the  areas  where  ammunition  is  to  be  destroyed  have  yet  to  be 
prepared.  The  protocol  on  cooperation  between  the  Interior  and  Defence  Ministries  for  the 
destruction  of  explosives  and  ammunition  needs  to  be  adopted.  Croatia  needs  to  step  up  its 

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efforts  in  implementing  the  action  plans  relating  to  anti-terrorism  and  in  completing  the 
examination  of  ammunition  and  explosive  storage  sites,  to  bring  them  into  line  with  the 
acquis. 

Legislative alignment in cooperation in the field of drugs has achieved significant progress 
and  is  almost  complete;  Croatia  is  ready  to  face  the  challenges  in  the  fight  against  drug 
trafficking  within  the  EU.  The  new  National  Strategy  on  Combating  Drug  Abuse,  for  the 
period  2012-2017,  was  prepared  taking  account  of  the  evaluation  of  the  previous  Strategy 
(2006-2012). A first national survey on the use of drugs and other addictive substances in the 
general  population  was  conducted  in  2011,  with  a  view  to  improving  reporting  to  the 
European Monitoring Centre for Drugs and Drug Addiction (EMCDDA). The number of drug 
offences  and  drug  offenders  identified  in  2011  remained  quite  stable  compared  to  last  year; 
7,767  drugs-related  offences  were  reported  (7,782  in  2010),  5,269  for  the  purpose  of 
possession  or  use  and  2,498  for  the  purpose  of  trafficking  or  production.  A  total  of  5,715 
offenders were reported. Croatia’s regional and international cooperation in the field of drug 
smuggling  and  trafficking  has  continued  to  be  very  good.  With  a  view  to  improving  its 
national Early Warning System on New Psychoactive Substances, the Office for Combating 
Drug Abuse set up an expert group to improve the reporting and sharing of data on drugs and 
drug trends with other countries. The office set up a database to take stock of the projects in 
Croatia in the fields of prevention, treatment, harm reduction and social reintegration; the best 
programmes  will  receive  a  joint  quality  certificate  from  the  National  Office  and  the 
EMCDDA, giving them priority access to the funds available at national level. Croatia needs 
to keep up its efforts to implement the acquis in this field by accession.  

Preparations in the field of customs cooperation are well advanced. 

For the fight against counterfeiting of the euro, see Chapter 32 — Financial control. 

Conclusion 

Croatia  is  generally  meeting  the  commitments  and  requirements  arising  from  the  accession 
negotiations  in  the  field  of  justice,  freedom  and  security  and  should  be  in  a  position  to 
implement the acquis as of accession.  

Attention  must  be  given  to  further  legislative  alignment  across  the  board,  including  with 
regard to new acquis, in order to ensure that Croatia will be fully aligned as from the date of 
accession. Specific efforts are required to complete the alignment with the EU visa regime. 

In  the  area  of  border  management,  continued  attention  needs  to  be  paid  to  timely 
implementation of the relevant action plan, including by filling the vacant positions according 
to the schedule; efforts are still needed on equipment and infrastructures. The country needs to 
make  sure  sufficient  financial  allocation  is  made  available  in  this  field  already  before 
accession. Croatia should also continue developing a track record of cases in the fight against 
organised crime. Further efforts are needed in the implementation of the legal framework on 
the seizure and confiscation of assets.  

4.25.  Chapter 25: Science and research 

In  the  area  of  research  and  innovation  policy,  Croatia  is  sufficiently  prepared.  It  has 
continued  to  participate  successfully  in  the  Seventh  EU  Research  Framework  Programme 
(FP7) and has taken several measures to reform the national research landscape with a view to 
further  integration  into  the  European  Research  Area.  Measures  have  been  taken  also  to 
stimulate innovation and to contribute to the Innovation Union flagship. 

In  the  area  of  the  Seventh  EU  Research  Framework  Programme  (FP7),  Croatia  is  well 
prepared.  Participation  in  FP7  has  continued  to  increase.  Croatia  has  a  good  level  of 

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administrative  capacity  and  a  good  knowledge  of  cooperation  with  EU  partners  and  the 
region. In a number of important FP7 programmes, participation is insufficient; in particular, 
the  number  of  successful  Marie  Curie  grants  is  still  very  low,  the  number  of  SMEs 
participating in FP7 is weak and no grants have been obtained from the European Research 
Council. This remains to be addressed, in particular in preparation for the next Research and 
Innovation programme  Horizon 2020.  Croatia  needs  to  also  consider  more  actively  research 
opportunities on nuclear research under the Seventh Euratom Framework Programme 2011–
2013.  

As  regards  preparations  for  integration  into  the  European  Research  Area,  Croatia  is 
sufficiently  prepared.  Implementation  of  the  Action  Plan  for  Mobility  of  Researchers  has 
continued  and steps  have  been taken to host foreign researchers in Croatia. Croatia actively 
participates  in  EURAXESS  network.  Thematic  evaluation  of  public  research  institutes  has 
been concluded with a view to boosting scientific excellence. There has been no increase in 
the level of investment in research, which is still rather low (less than 1% of GDP, compared 
to an EU average of 2%). Conditions for enhanced cooperation between the private and public 
sectors need to be encouraged. Further measures such as establishing a national roadmap for 
research infrastructure and transfer of technology management have to be further considered 
in order to be fully in line with EU standards and targets. 

Conclusion 

Croatia is meeting the commitments and requirements arising from the accession negotiations 
in  the  field  of  science  and  research  and  is  in  a  position  to  implement  the  acquis  as  of 
accession. 

4.26.  Chapter 26: Education and culture 

In  the  field  of  education,  training  and  youth,  Croatia  has  completed  alignment  with  the 
acquis.  Amendments  to  the  Act  on  Primary  and  Secondary  Education  were  adopted  by  the 
Parliament  in  July 2012  providing  inter  alia  for  the  establishment  of  a  National  Education 
Council in charge of monitoring quality and elaborating recommendations for early, primary 
and secondary education system, and of facilitating students who completed a three-year VET 
programme  to  continue  or  to  complete  four-year  VET  programmes.  Also  reform  of  higher 
education  and  of  vocational  education  has  continued  through  application  of  a  learning 
outcomes  approach.  The  process  of  self-assessment  of  vocational  education  schools  has 
continued. Reform of adult education has also continued. Croatia actively takes part in the EU 
open method of coordination activities. As regards the benchmarks that the EU has set itself 
in the context of the strategic framework for European cooperation in education and training 
(ET  2020),  Croatia  continues  to  perform  below  the  EU  average  for  tertiary  education 
attainment  and  participation  in  pre-school  education.  It  lags  behind  also  as  regards  the 
participation of adults in lifelong learning.  

As  regards  participation  of  Croatia  in  EU  programmes,  the  Croatian  National  Agency 
continues to ensure sound and efficient management of the decentralised actions.  

In  the  area  of  culture,  Croatia  is  well  prepared.  Amendments  to  the  Act  on  Protection  and 
Preservation of Cultural Goods were adopted  in  February  2012, easing the requirements for 
the payment of a fee for the use of cultural goods. Good results have continued to flow from 
Croatia’s  participation  in  the  Culture  Programme.  Funds  absorbed  through  the  Europe  for 
Citizens Programme and the number of projects implemented remained at a satisfactory level.  

Conclusion  

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Croatia is meeting the commitments and requirements arising from the accession negotiations 
in  the  field  of  education  and  culture  and  is  in  a  position  to  implement  the  acquis  as  of 
accession.  

4.27.  Chapter 27: Environment and climate change 

As  regards  the  environment,  legislative  alignment  in  the  field  of  horizontal  legislation  has 
further  advanced  and  is  almost  complete.  Further  efforts  are  needed  to  implement  the 
Environmental Impact Assessment (EIA) and Strategic Environmental Assessment (SEA). In 
particular,  the  quality  of  environmental  impact  studies  as  well  as  the  quality  check 
mechanisms  need  to  be  significantly  improved.  Implementation  of  provisions  on  public 
participation and access to justice in environmental matters has improved. Cooperation with 
the  public,  NGOs,  judiciary  and  law  enforcement  institutions  was  enhanced  during  the 
reporting period. 

Legislative alignment in the field of air quality has further advanced and is almost complete. 
A  new  Air  Protection  Act  has  been  enacted,  incorporating  provisions  of  the  new  acquis  on 
ambient air quality and cleaner air for Europe. Investments for implementation of the acquis 
are insufficient and need to increase to reach EU targets. 

Legislative  alignment  in  the  field  of  waste  management  has  further  advanced  but  needs 
further attention, in particular as regards the Waste Framework Directive and the Restriction 
of the Use of Certain Hazardous Substances in Electrical and Electronic Equipment Directive 
(RoHS  Directive).  The  new  waste  management  strategy  has  not  yet  been  adopted. 
Considerable efforts are needed to meet the deadlines for full implementation of the acquis in 
this area, In particular as concerns  the timely  development  of  a  pipeline  of  mature  projects. 
Transitional arrangements have been agreed for the remediation of existing landfills and the 
building of new waste management centres to comply with the acquis by 31 December 2018, 
and  by  31  December  2020  concerning  the  amount  of  biodegradable  municipal  waste  to  be 
landfilled.  

Croatia has largely aligned its legislation in the field of water quality. The new draft Water 
Act  due  to  ensure  further  compliance  with  the  acquis  was  not  adopted  yet.  Transitional 
arrangements have been agreed until 31 December for 2023 for urban waste water collection 
and treatment systems with intermediate deadlines for part of the Decision until 31 December 
2018 and 31 December 2020, and for the quality of water intended for human consumption 
with  regard  to  microbiological  parameters  until  31  December  2018.  Croatia  will  as  agreed 
start implementing the new Bathing Water Directive from the date of accession. Reforms in 
the  water  sector  are  proceeding  slowly.  Pending  problems  linked  to  insufficient  quality  of 
environmental  impact  studies  for  water  projects  need  to  be  solved.  Efforts  to  develop  and 
adopt river basin management plans (RBMPs) need to be stepped up. Croatia needs to speed 
up investments in infrastructure to comply with the acquis. 

The legislative alignment in the field of nature protection has further progressed and is almost 
complete.  The  sector  has  been  transferred  from  the  Ministry  of  Culture  to  the  Ministry  of 
Environment  and  Nature  Protection.  Sectoral  consultations  relating  to  the  establishment  of 
Natura  2000  have  continued.  Preparations  for  the  establishment  of  a  list  of  marine  Natura 
2000  sites  have  progressed  and  a  framework  has  been  enacted  in  the  field  of  marine 
environmental  protection.  Specific  attention  needs  to  be  paid  to  the  quality  of  Appropriate 
Assessments  as  per  Art.6(3)  of  the  Habitats  directive.  Administrative  capacity  for 
enforcement  of  the  acquis  nature  protection  inspection  and  technical  support  by  the  State 
Institute  for  Nature  Protection  needs  to  be  strengthened,  in  particular  for  the  management 
plans for Natura 2000 sites at the local level. 

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Croatia has largely aligned its legislation in the field of industrial pollution control and risk 
management  (IPPC).  Three  transitional  periods  have  been  agreed,  one  with  a  final 
implementation  date  of  31  December  2017  for  the  modernisation  of  existing  IPPC 
installations, and , a second until 31 December 2017 for the limitation of emissions into the 
air of certain pollutants from large combustion plants, and a third until 31 December 2015 for 
the limitation of emissions of volatile organic compounds due to the use of organic solvents in 
certain activities and installations. The permitting process for existing installations needs to be 
significantly  sped  up  and  appropriate  funding  for  upgrading  such  installations  needs  to  be 
secured.  Administrative  capacity  in  the  area  of  IPPC  needs  strengthening,  especially  at  the 
local level. 

Croatia has largely aligned its legislation in the field of chemicals. An adaptation period of six 
months  after  the  accession  date  has  been  agreed  for  the  pre-registration  of  phase-in 
substances,  registration  dossiers  and  authorisation  applications.  The  Department  for 
Chemicals  and  Biocidal  Products  has  been  established  within  the  State  Sanitary  Inspection 
Service  of  the  Ministry  of  Health.  The  Department  needs  further  reinforcement  of  its 
administrative capacity.  

In  the  field  of  noise,  Croatia  has  completed  alignment  with  the  EU  requirements.  The 
Department for Objects of Common Usage and Noise Protection was established within the 
State Sanitary Inspection Service of the Ministry of Health.  

Croatia is progressing well in its preparations in the area of civil protection and is part of the 
EU Civil Protection Mechanism.  

The  legislative  alignment  is  moderately  advanced  in  the  field  of  climate  change.  The  Air 
Protection Act, of October 2011 represented a step forward. Legislative acts still need to be 
adopted  to  align  with  the  EU  acquis  on  the  Monitoring  Mechanism  Decision,  the  EU 
Emissions  Trading  System  (aviation,  monitoring,  auctioning  and  registries),  geological 
storage of carbon dioxide, and light commercial vehicles. Croatia has submitted preliminary 
information  on  national  implementing  measures,  on  free  allocation  of  allowances,  on 
exclusion of small emitters, and on new gases and new sectors, which is being assessed by the 
Commission. 

Significant further efforts are needed to catch up delays which have occurred in transposition 
and  implementation  so  far,  in  particular  with  respect  to  the  EU  Emissions  Trading  System 
(monitoring and reporting as well as aviation) and geological storage of carbon dioxide. This 
is particularly important since Croatia will join the third phase of the EU Emissions Trading 
System  as  of  1st  of  January  2013  in  so  far  as  stationary  installations  are  concerned.  In 
accordance with the transitional arrangement granted, Croatia will take part in the EU ETS for 
aviation as of 1 January 2014. 

Croatia  regularly  associated  itself  with  EU  positions  in  the  international  context.  Following 
close coordination with the EU, Croatia submitted in April its provisional quantified emission 
limitation  or  reduction  objectives  (QELROs)  for  the  second  commitment  period  under  the 
Kyoto Protocol, which is based on the understanding that it will be fulfilled jointly with the 
EU and its Member States, in accordance with Article 4 of the Kyoto Protocol. The country 
continues to fulfil its reporting obligations under the UNFCCC and the Kyoto Protocol.  

Croatia participated regularly in climate work under the Regional Environmental Network for 
Accession (RENA). 

Efforts to strengthen Croatia’s administrative capacity have further slowed down. Due to the 
generalised shortage of human resources within the Ministry and the Agency, and also partly 
related to high staff turnover. The administrative capacity is clearly not sufficient to properly 

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transpose  and  implement  the  EU  climate  acquis.  Further,  strengthening  of  administrative 
capacity is also needed within the Ministry of Health in the field of chemicals. Coordination 
mechanisms between ministries and administrative bodies need to be further strengthened.  

Conclusion 

Croatia  is  generally  meeting  the  commitments  and  requirements  arising  from  the  accession 
negotiations and should be in a position to implement the environment acquis as of the date of 
accession.  However,  increased  efforts  are  needed  to  properly  implement  and  enforce 
legislation. In particular in the field of climate change, urgent steps need to be taken to be in a 
position to implement the acquis by the date of accession. Administrative capacity needs to be 
strengthened  in  some  sectors,  especially  in  the  fields  of  climate  change,  industrial  pollution 
control  and  risk  management,  nature  protection  and  chemicals.  Investments  need  to  be 
increased  across  the  sectors,  but  more  particularly  in  the  fields  of  air  quality,  industrial 
pollution  control  and  risk  management,  water  and  waste,  in  order  to  ensure  that  Croatia 
completes its preparations for membership by the date of accession. Specific attention needs 
to  be  paid  to  the  timely  fulfilment  of  commitments  in  the  fields  of  waste  and  IPPC.  The 
quality of environmental impact assessment for projects needs to be significantly improved.  

4.28.  Chapter 28: Consumer and health protection 

In the area of consumer protection, Croatia is well prepared. Advice given to consumers in 
the four regional counselling centres increased by 15% in 2011 as compared to 2010. Various 
activities have been carried out with a view to raising public awareness of consumers’ rights 
in  line  with  the  national  consumer  protection  programme.  Support  for  the  consumer 
movement  needs  to  continue.  Steps  have  been  taken  to  develop  the  system  for  out-of-court 
settlement  of  consumer  disputes.  Public  awareness  of  the  system  needs  to  be  raised,  as  the 
existing mechanisms are still underused. 

In the field of product safety-related issues, Croatia has completed alignment with the acquis. 
A  conference  addressing  general  product  safety  was  held  in  Zagreb  in  March 2012.  Market 
surveillance  continues  to  be  at  a  satisfactory  level.  (See  Chapter 1  —  Free  movement  of 
goods) 

Croatia has aligned its legislation in the field of non-safety-related issues. Amendments to the 
Consumer  Protection  Act  were  adopted  in  July 2012  aiming  at  aligning  with  the  acquis  on 
timeshare. Legislation on consumer credit was adopted by the Parliament in September 2012. 
Technical  preparations  will  be  necessary  to  ensure  timely  implementation  of  the  acquis  on 
cooperation  between  national  authorities  responsible  for  the  enforcement  of  the  consumer 
protection laws by accession.  

As  regards  public  health,  Croatia  has  completed  alignment  with  the  acquis  in  the  field  of 
tobacco control. Measures have continued to promote smoke-free environments and smoking 
prevention.  

Croatia meets the requirements in the field of communicable diseases. 

Legislative alignment in the field of blood has made further progress and is almost complete. 
Amendments to the Act on Blood and Blood Components were adopted in October 2011 with 
a  view  to  completing  legal  alignment.  Clarity  needs  to  be  provided  on  the  status  of  the 
restructuring of blood services and when it is expected to be completed. Croatia has largely 
aligned  its  legislation  in  the  field  of  tissues,  cells  and  organs.  A  new  Act  on  Medically 
Assisted Fertilisation was adopted by the Parliament in July 2012. Implementing legislation in 
this area still needs to be adopted. Facilities for handling blood, tissues and cells need to be 
upgraded  and  restructured  in  accordance  with  the  EU  technical  requirements.  The  National 

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Competent  Authority  needs  to  become  fully  operational  and  staffed.  Capacity  building  and 
continuous education of professional staff need to continue. 

In  the  field  of  mental  health,  Croatia  is  sufficiently  prepared.  Community-based  services 
remain  insufficiently  developed  as  an  alternative  to  institutionalisation.  Further  efforts  are 
needed to promote socially inclusive treatment and care models and to promote mental health 
of  children  and  young  people.  Financial  resources  allocated  to  mental  health  care  remain 
scarce, although a strong commitment to mental health does exist.  

In the area of cancer screening, Croatia is moderately advanced. The National Programme for 
early  detection  of  cervical  cancer  has  yet  to  be  implemented.  Further  efforts  are  needed  to 
achieve full implementation of breast and colorectal cancer screening programmes. 

Conclusion 

Croatia is meeting the commitments and requirements arising from the accession negotiations 
in the field of consumer and health protection and is expected to be in a position to implement 
the acquis as of accession.  

Further efforts are required to ensure that Croatia completes its preparations for membership 
by  the  date  of  accession,  in  particular  in  the  area  of  medically  assisted  reproduction,  where 
legal alignment remains to be completed, and in the areas of blood, tissues and cells, where 
facilities for handling them need to be upgraded and restructured in accordance with the EU 
technical  requirements,  and  as  regards  staffing  of  the  National  Competent  Authority  in  this 
field.  

4.29.  Chapter 29: Customs union 

Legislative alignment in the field of customs legislation has further advanced and is almost 
complete. The national customs tariff nomenclature for 2012 was aligned with the 2012 EU 
Combined Nomenclature. Alignment with the acquis of the Croatian provisions on transit and 
the  single  administrative  document  was  completed.  In  April  2012,  Croatia  ratified  the 
Convention  on  a  common  transit  procedure  and  the  Convention  on  the  simplification  of 
formalities  in  trade  in  goods  and  joined  these  Conventions  in  July  2012.  Apart  from  some 
minor discrepancies remaining in the allocation of tariff quotas, and the procedures used for 
authorising inward and outward processing, Croatia needs to swiftly abolish the fees impeding 
free  access  to  customs  services,  especially  the  fees  for  access  to  the  terminals  where  the 
Customs offices are located.  

Alignment in the field of administrative and operational capacity has further advanced and 
is  almost  complete.  Croatia  adopted  an  updated  customs  business  strategy  and  Action  Plan 
2012-2014.  In  July  2012,  Croatia  started  as  planned  to  redeploy  customs  officers  from  the 
future  EU  internal  borders,  to  further  reinforce  internal  supervision,  mobile  teams,  the  fight 
against  corruption,  and  its  strategy,  risk  assessment  and  planning  capacities.  Further 
development and testing of the New Computerised Transit System (NCTS) at national level 
ensured full compatibility with the EU NCTS system from July 2012, when Croatia started to 
operate under the Convention on a common transit procedure. Work has continued to upgrade 
the  automated  risk  management  system  in  line  with  EU  standards.  The  NCTS  system  was 
integrated  into  the  risk  management  system.  A  new  customs  laboratory  was  fully  equipped 
but  needs  to  be  fully  staffed.  Further  efforts  are  in  particular  required  in  the  area  of 
interconnectivity and interoperability with the EU customs systems.  

Conclusion 

Croatia is meeting the commitments and requirements arising from the accession negotiations 
in the field of customs union and is expected to be in a position to implement the acquis as of 

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accession. Further efforts are required to ensure that all relevant IT systems are in place and 
able  to  exchange  information  with  the  EU  and  other  Member  States  as  from  the  day  of 
accession, in order to ensure Croatia completes its preparations for membership by the date of 
accession. 

4.30.  Chapter 30: External relations 

Legislative  alignment  in  the  field  of  the  common  commercial  policy  has  further  advanced 
and is almost complete. Croatia continued to coordinate and align its positions with those of 
the EU in international organisations. A State Office for Trade Policy was established with the 
aim of strengthening administrative capacity in the area of trade policy. 

As regards dual-use items, legislative alignment is as complete as possible before accession to 
the  EU  when  the  acquis  in  this  area,  including  the  Community  regime  for  the  control  of 
exports, transfer, brokering and transit of dual use-items as well as the single market for dual 
use items will apply. Training of relevant staff in procedures, licensing, and control of dual-
use items continued under the export control component of the EU Stability Instrument.  

Croatia largely aligned bilateral trade and investment agreements with third countries with 
the acquis but further progress is required in accordance with Croatia’s Action Plan updated 
in  February  2012.  Croatia  continued  to  actively  participate  in  the  work  of  the  Central 
European  Free  Trade  Agreement  (CEFTA).  An  Additional  Protocol  to  CEFTA,  enabling 
further  liberalisation  of  trade  in  agricultural  and  food  products  between  interested  parties, 
entered into force in November 2011. Croatia will need to withdraw before accession from all 
free  trade  agreements  with  third  countries  and  align  with  the  acquis  Bilateral  Investment 
Treaties (BITs). 

Croatia  has  completed  alignment  with  the  acquis  in  the  field  of  development  policy  and 
humanitarian  aid.  The  National  Strategy  for  Development  Cooperation  2009–2014 
continued  to  be  implemented.  Croatia  provides  humanitarian  aid  within  its  financial 
capabilities  and  commitments.  Croatia  needs  to  continue  to  build  up  its  administrative 
capacity so as to be able to fully participate in EU development and humanitarian policies.  

Conclusion 

Croatia is meeting the commitments and requirements arising from the accession negotiations 
in the field of external relations and is expected to be in a position to implement the acquis as 
of accession. Further efforts are required, in particular as regards alignment with the acquis of 
Croatia’s bilateral investment agreements with third countries, in order to ensure that Croatia 
completes its preparations for membership by the date of accession. 

4.31.  Chapter 31: Foreign, security and defence policy 

The  regular  political  dialogue  with  the  EU  on  foreign  policy  issues  is  in  place  and  has 
continued  in  all  relevant  fora,  including  through  participation  in  meetings  of  the  EU-27 
ministers of foreign affairs.  

As  regards  the  common  foreign  and  security  policy  (CFSP),  during  the  reporting  period, 
Croatia aligned itself, when invited, with 70 out of the 70 relevant Council decisions and EU 
declarations  (100%  alignment).  It  has  continued  to  actively  participate  in  the  Barcelona 
Process — Union for the Mediterranean. Croatia has adequate administrative capacity to work 
within the EU CFSP structures. As a party to the Rome Statute establishing the International 
Criminal Court (ICC), Croatia continues to fully support the EU Common Position on the ICC 
(2003/444/CFSP) and will not sign an agreement with the US on the exemption of American 
citizens. 

EN 

47 

   EN 

With  regard  to  restrictive  measures  and  conflict  prevention,  Croatia  adopted  the  relevant 
decisions  to  implement  sanction  regimes  deriving  from  UN  Security  Council  Resolutions. 
Croatia has continued to implement sanctions introduced by the EU.  

As regards non-proliferation, implementation of the National Strategy and Action Plan for the 
Control  of  Small  Arms  and  Light  Weapons  has  continued  and  its  regional  component 
strengthened. Public-awareness activities and measures to collect and destroy weapons have 
continued.  Implementation  and  enforcement  capacity  has  been  strengthened,  as  has 
networking with other enlargement countries and Member States.  

With regard to cooperation with international organisations, Croatia has, as a member of the 
UN, the OSCE, the Council of Europe and NATO, maintained its involvement in the policy-
making  of  these  organisations.  Croatia  continued  to  provide  support  to  a  wide  range  of  UN 
and NATO missions. 

Preparations are complete with regard to security measures (classified information). 

Croatia continued its participation in EU missions to support implementation of the common 
security and defence policy (CSDP). Regarding civil and military crisis management, it has 
been participating in the EU operation Atalanta (Somalia). Croatia continued to support EU 
civilian missions. Croatia is participating in the EU rule of law mission (EULEX) in Kosovo 
and the EUPOL mission in Afghanistan.  

Conclusion 

Croatia is meeting the commitments and requirements arising from the accession negotiations 
in the field of foreign, security and defence policy and is in a position to implement the acquis 
as of accession.  

4.32.  Chapter 32: Financial control 

Alignment in the field of public internal financial control (PIFC) has further advanced and 
is  almost  complete.  The  Central  Harmonisation  Unit  (CHU)  at  the  Ministry  of  Finance 
updated  and  further  developed  methodological  tools  for  the  transparent  and  effective 
management  of  public  funds  in  all  budget  users.  Implementation  of  the  action  plan  of  the 
PIFC strategy for the period 2009–2011 has been successfully completed. An updated Action 
Plan for the period 2012-2013 still needs to be adopted. Training in financial management and 
control (FMC) and in internal audit (IA) continued to be provided by the CHU in cooperation 
with  other  public  bodies,  line  ministries,  professional  associations,  academics,  local 
authorities,  the  State  Audit  Office  and  the  Agency  for  Audit  of  EU  programmes 
implementation system (ARPA). Capacities of budget users, especially at the local level, need 
to be further enhanced with a view to preparations for future Structural Funds management. In 
addition, the independence of the internal audit function throughout the public administration 
needs to be strengthened.  

Alignment  in  the  field  of  external  audit  has  further  advanced  and  is  almost  complete.  The 
State Audit Office (SAO) continued to successfully implement its Strategic Development Plan 
(2008–2012).  Efforts  continued  to  gradually  shift  from  transaction-based  to  system-based 
audits. The parliament adopted a report on the work of the SAO in 2010 together with a report 
on  the  audit  activity.  The  SAO  drew  up  an  Annual  Plan  and  Work  Programme  for  2012. 
Further  improvement  of  the  follow-up  of  the  SAO’s  recommendations  by  the  parliament  is 
needed  and  quality  control  of  the  SAO’s  performance  needs  to  be  improved.  Training  of 
external auditors in modern audit techniques as per international standards needs to continue. 
Cooperation  between  the  CHU  and  the  SAO  needs  to  be  enhanced  as  to  ensure  improved 
quality of audit performance by internal and external auditors. 

EN 

48 

   EN 

Alignment in the field of protection of the EU’s financial interests has further advanced and 
is  almost  complete.  The  Independent  Service  for  Combating  Irregularities  and  Fraud  at  the 
Ministry  of  Finance  (ISCIF),  together  with  the  other  bodies  of  the  Anti  Fraud  Coordination 
Structure  (AFCOS),  continued  to  successfully  implement  the  National  Anti-fraud  Strategy 
and its Action Plan. The legal basis for the efficient functioning of the AFCOS structure still 
needs  to  be  finalised.  ISCIF  needs  to  improve  its  ability  to  play  a  leading  role  in  the 
coordination  of  the  AFCOS  network  on  the  basis  of  its  functional  independence.  Further 
efforts are needed in streamlining fraud prevention, detection, reporting and follow-up at all 
levels of the public service, especially with a view to preparations for cohesion policy.  

Alignment in the field of protection of the euro against counterfeiting has further advanced 
and  is  almost  complete.  The  Croatian  National  Bank  (CNB)  improved  its  coordination 
capacity by strengthening cooperation with the Ministry of the Interior and other institutions 
involved.  The  CNB  communicated  its  analysis  of  suspicious  banknotes  and  coins  on  a 
monthly  basis  to  the  European  Central  Bank  and  through  quarterly  reports  to  the  European 
Commission.  Training  was  organised  for  employees  of  commercial  banks  and  exchange 
offices so as to enhance their fraud detection skills. 

Conclusion 

Croatia is meeting the commitments and requirements arising from the accession negotiations 
in the field of financial control and is expected to be in a position to implement the acquis as 
of accession. Further efforts are required to consolidate the implementation of public internal 
financial control and the independence of internal audit at central and local level, to enhance 
the impact of external audit, and to improve the functioning of the Anti Fraud Coordination 
Structure for protecting the EU’s financial interests, in order to ensure that Croatia completes 
its preparations for membership by the date of accession. 

4.33.  Chapter 33: Financial and budgetary provisions 

Alignment  in  the  field  of  traditional  own  resources  (TOR)  has  further  advanced  and  is 
almost  complete.  The  testing  environment  for  the  TOR  accounting  module  (A  and  B 
accounts)  has  been  enhanced  and  the  IT  application  is  now  applied  throughout  the  country. 
The professional knowledge and skills of customs officers on EU TOR was further improved. 
Measures  have  continued  to  combat  customs  duty  and  VAT  fraud.  Effective  tools  to  fight 
against  tax  evasion  and  fraud  and  to  decrease  the  informal  economy  are  to  be  further 
developed.  Continued  efforts  are  needed  to  ensure  efficient  and  independent  internal  and 
external  control  and  audit  of  the  collection,  accounting  and  making  available  of  traditional 
own resources, including further development of post-clearance control at traders’ premises. 
Special attention needs to be paid to the development of criteria for the evaluation of potential 
financial liability towards the EU budget in the event of non-recovery of customs debt.  

Croatia  has  undertaken  further  measures  to  ensure  an  adequate  legislative  and  institutional 
framework for the implementation of sugar levies. Cooperation among all bodies within the 
network of anti-fraud coordinating services (AFCOS) continued. Training sessions were held 
for  customs  officials  in  the  fight  against  fraud  and  the  reporting  of  irregularities.  The 
legislative framework was completed and written procedures are currently elaborated. 

Alignment  in  the  field  of  the  VAT  resource  has  further  advanced  and  is  almost  complete. 
Croatia  continued  to  work  on  improving  the  methodology  used  in  calculating  the  Weighted 
Average Rate. The Agreement implementing the Protocol on the Privileges and Immunities of 
the EU was signed by Croatia in November 2011 and by the Commission in June 2012. 

Alignment  in  the  field  of  the  GNI  resource  has  further  advanced  and  is  almost  complete. 
Administrative  capacity  of  key  bodies  in  the  field  has  been  improved  and  relevant 

EN 

49 

   EN 

methodological  tools  and  procedures  for  managing  the  Own  Resources  (OR)  system  have 
been  elaborated.  The  Croatian  Action  Plan  to  complete  own  resources  preparations  was 
updated  in  April  2012.  The  Department  for  Coordination  and  Management  of  EU  own 
resources in the Ministry of Finance needs to continue to build up its capacity to coordinate 
the overall system of own resources efficiently after accession.  

Conclusion 

Croatia is meeting the commitments and requirements arising from the accession negotiations 
in  the  field  of  financial  and  budgetary  provisions  and  is  expected  to  be  in  a  position  to 
implement the acquis as of accession. Further efforts are required, in particular to strengthen 
the  capacity  to  coordinate  the  overall  system  of  own  resources  efficiently  after  accession. 
Modernisation  of  the  customs  control  strategy,  so  that  it  focuses  more  on  post-clearance 
controls,  needs  to  be  stepped  up,  in  order  to  ensure  Croatia  completes  its  preparations  for 
membership by the date of accession.  

EN 

50 

   EN 

Statistical Annex 

Note

1) 

Note
2) 
2) 
2) 

2) 

2) 
3) 

3) 

3) 

2) 
2) 
2) 
2) 
2) 
2) 
2) 
2) 
2) 

Note

Note

Note

STATISTICAL DATA  
Croatia 

Basic data 
Population (thousand) 
Total area of the country (km²) 

National accounts 
Gross domestic product (GDP) (million national currency) 
GDP (million euro) 
GDP (euro per capita) 
GDP (in Purchasing Power Standards (PPS) per capita) 
GDP per capita in PPS (EU-27 = 100) 
Real GDP growth rate (growth rate of GDP volume, national currency, 
% change on previous year) 
Employment growth (national accounts, % change on previous year) 
Labour productivity growth: GDP growth per person employed (% 
change on previous year) 
Real unit labour cost growth (national accounts, % change on 
previous year) 
Labour productivity per person employed (GDP in PPS per person 
employed, EU-27 = 100)  
Gross value added by main sectors (%) 

Agriculture and fisheries 
Industry 
Construction 
Services 

Final consumption expenditure, as a share of GDP (%) 
Gross fixed capital formation, as a share of GDP (%) 
Changes in inventories, as a share of GDP (%) 
Exports of goods and services, relative to GDP (%) 
Imports of goods and services, relative to GDP (%) 

Industry 
Industrial production volume index (2005=100) 

Inflation rate 
Annual average inflation rate (HICP, % change on previous year) 

Balance of payments 
Balance of payments: current account total (million euro) 
Balance of payments current account: trade balance (million euro) 
Balance of payments current account: net services (million euro) 
Balance of payments current account: net income (million euro) 
Balance of payments current account: net current transfers (million 
euro) 

of which government transfers (million euro) 
Net foreign direct investment (FDI) (million euro) 
Foreign direct investment (FDI) abroad (million euro) 

of which FDI of the reporting economy in EU-27 countries (million 

euro) 
Foreign direct investment (FDI) in the reporting economy (million 
euro) 

Public finance 
General government deficit/surplus, relative to GDP (%) 
General government debt relative to GDP (%) 

Note

Note
Financial indicators 
Gross foreign debt of the whole economy, relative to GDP (%) 
4) 
Gross foreign debt of the whole economy, relative to total exports (%)  4) 
Money supply: M1 (banknotes, coins, overnight deposits, million euro)
Money supply: M2 (M1 plus deposits with maturity up to two years, 
million euro) 
Money supply: M3 (M2 plus marketable instruments, million euro) 
Total credit by monetary financial institutions to residents 
(consolidated) (million euro) 
Interest rates: day-to-day money rate, per annum (%) 
Lending interest rate (one year), per annum (%) 

2001 
4 437 
56 542 

2007 
4 441 
56 594 

2008 
4 436 
56 594 

2009 
4 435 
56 594 

2010 
4 426 
56 594 

2011 
4 412 
56 594 

2001 
192 289 
25 738 
5 800 
10 018 
51 
3.7 

2007 
318 308 
43 390 
9 770 
15 156 
61 
5.1 

2008 
343 412 
47 543 
10 717 
15 796 
64 
2.1 

2009 

2011 

2010 
328 672  326 980p 333 956p
44 922p 
44 876p 
44 781 
10 181p 
10 140p 
10 097 
15 500p 
14 843 
14 627 
61 
64 
61 
0.0p 
-1.4p 
-6.9 

0.5 
10.1 

-1.6 

3.5 
3.2 

3.2 

1.1 
0.8 

1.0 

-1.8 
-5.2 

-1.4 

-5.1p 
2.7p 

-2.4p 
3.3p 

3.8p 

1.6p 

67.4 

75.6 

78.2 

76.9 

77.3 

80.1 

6.5 
23.1 
5.6 
64.8 
82.4 
19.5 
1.8 
43.4 
47.2 

2001 
87.9 

2001 
4.3 

2001 
-785 
-4 604 
3 348 
-628 
1 100 

65 
1 677 
210 
152 

4.9 
20.0 
8.1 
67.1 
78.2 
26.2 
2.8 
42.3 
49.5 

2007 
109.3 

2007 
2.7 

2007 
-3 151 
-9 470 
6 367 
-1 090 
1 043 

-17 
3 867 
216 
564 

5.0 
19.2 
8.5 
67.3 
77.3 
27.4 
3.1 
42.1 
49.8 

2008 
110.6 

2008 
5.8 

2008 
-4 258 
-10 855 
7 075 
-1 548 
1 071 

-20 
5 189 
970 
740 

5.1 
19.5 
7.9 
67.4 
78.6 
24.5 
0.5 
36.6 
40.1 

2009 
100.4 

2009 
2.2 

2009 
-2 293 
-7 416 
5 886 
-1 799 
1 036 

-30 
3 303 
888 
529 

1 468 

3 651 

4 219 

2 415 

2001 
5.6 
35.7 

2001 
52.9 
126.0 
3 216 
: 

2007 
-2.4 
32.9 

2007 
77.7 
184.6 
7 901 
: 

2008 
-1.4 
28.9b 

2008 
83.6 
200.4 
7 539 
: 

2009 
-4.1 
36.0 

2009 
97.7 
268.1 
6 458 
: 

5.0p 
20.1p 
6.7p 
68.2p 
78.8p 
20.6p 
1.1p 
39.4p 
39.9p 

2010 
99.0 

2010 
1.1 

2010 
-481 
-5 991 
5 987 
-1 566 
1 088 

-40 
184 
-113 
-407 

298 

204 

2010 
-5.0p 
41.6p 

2010 
103.6p 
262.4 
6 655 
: 

5.1p 
20.5p 
6.0p 
68.4p 
79.0p 
18.8p 
2.3p 
41.8p 
41.9p 

2011 
97.8 

2011 
2.2 

2011 
-437 
-6 360 
6 371 
-1 601 
1 154 

-60 
1 107 
32 
50 

1 075 

995 

2011 
-5.2p 
46.1p 

2011 
101.8p 
243.3 
7 018 
: 

: 
11 891 

: 
30 863 

: 
34 756 

: 
34 700 

: 
36 912 

: 
39 726 

3.0 
10.0 

5.6 
7.5 

6.6 
9.0 

7.8 
9.0 

1.1 
9.0 

1.3 
6.3 

of which FDI of EU-27 countries in the reporting economy (million 

1 344 

3 664 

3 253 

2 339 

euro) 

EN 

51 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deposit interest rate (one year), per annum (%) 
euro exchange rates: average of period - 1 euro = … national 
currency 
Effective exchange rate index (2005=100) 
Value of reserve assets (including gold) (million euro) 

External trade 
Value of imports: all goods, all partners (million euro) 
Value of exports: all goods, all partners (million euro) 
Trade balance: all goods, all partners (million euro) 
Terms of trade (export price index / import price index) 
Share of exports to EU-27 countries in value of total exports (%) 
Share of imports from EU-27 countries in value of total imports (%) 

Note

5) 

- 
7.471 

97.6 
5 334 

2001 
9 903.0 
5 072.0 
-4 831.0 
94.4 
68.3 
71.9 

0.5 
7.336 

90.8 
9 307 

0.5 
7.223 

89.0 
9 121 

0.5 
7.340 

0.5 
7.286 

0.3 
7.434 

90.0 
10 376 

90.9 
10 660 

92.9 
11 195 

2008 

2011 

2010 

2007 

2009 
18 692.0  19 022.0  15 144.0  15 137.0  14 367.0 
8 437.0 
7 458.0 
9 004.0 
-5 931.0 
-7 686 
-9 688 
101.3 
109.2 
97.5 
62.3 
60.8 
60.3 
61.8 
62.6 
64.5 

8 965.0 
-10 057.0 
96.1 
63.2 
62.3 

8 905.0 
-6 232.0 
100.9 
61.1 
60.2 

Demography 
Natural growth rate: natural change (births minus deaths) (per 1000 
inhabitants) 
Infant mortality rate: deaths of children under one year of age per 
1000 live births 
Life expectancy at birth: male (years) 
Life expectancy at birth: female (years) 

Labour market 
Economic activity rate (20-64): share of population aged 20-64 that is 
economically active (%) 
* Employment rate (20-64): share of population aged 20-64 in 
employment (%) 

Note

Employment rate male (20-64) (%) 
Employment rate female (20-64) (%) 

Employment rate of older workers (55-64): share of population aged 
55-64 in employment (%) 
Employment by main sectors (%) 

Agriculture 
Industry 
Construction 
Services 

Unemployment rate: share of labour force that is unemployed (%) 

Share of male labour force that is unemployed (%) 
Share of female labour force that is unemployed (%) 

Unemployment rate of persons < 25 years: share of labour force aged 
<25 that is unemployed (%) 
Long-term unemployment rate: share of labour force that is 
unemployed for 12 months and more (%) 

6) 

7) 
7) 
7) 
7) 
6) 
6) 
6) 
6) 

8) 

Note

2001 
-1.9 

2007 
-2.4 

2008 
-1.9 

2009 
-1.8 

2010 
-2.0 

2011 
: 

7.7 

5.6 

4.5 

5.3 

4.4 

71.1 
78.1 

2001 
: 

72.3 
79.3 

2007 
68.6 

72.4 
79.7 

2008 
68.3 

73.0 
79.7 

2009 
67.5 

73.5 
79.6 

2010 
66.2 

: 

: 
: 

2011 
65.5 

: 

62.3 

62.9 

61.7 

58.7 

57.0 

: 
: 
23.7 

15.6u 
23.1u 
6.3u 
55.0u 
16.3 
14.4 
18.7 
41.7 

70.3 
54.5 
35.8b 

10.7u 
22.4u 
9.1u 
57.8u 
9.6b 
8.4b 
11.2b 
24.0b 

70.7 
55.2 
36.7 

11.3u 
22.3u 
9.1u 
57.3u 
8.4 
7.0 
10.1 
21.9 

68.2 
55.4 
38.5 

11.5u 
20.8u 
9.1u 
58.6u 
9.1 
8.0 
10.3 
25.1 

64.7 
53.0 
37.6 

12.6u 
20.4u 
7.8u 
59.3u 
11.8 
11.4 
12.3 
32.6 

63.2 
50.9 
37.1 

13.0u 
21.2u 
7.3u 
58.6u 
13.5 
13.8 
13.2 
36.1 

10.1 

5.7 

5.3 

5.1 

6.7 

8.6 

Social cohesion 
Average nominal monthly wages and salaries (national currency) 
Index of real wages and salaries (index of nominal wages and 
salaries divided by the CPI/HICP) (2000=100) 
* Early school leavers - Share of population aged 18-24 with at most 
lower secondary education and not in further education or training (%)

Note
9) 
9) 

2001 
5 061.0 
99.2 

2007 
7 047.0 
120.4 

2008 
7 544.0 
121.5 

2009 
7 711.0 
121.3 

2010 
7 782.0 
121.2 

2011 
7 796.0 
118.7 

6) 

: 

3.9u 

3.7u 

3.9u 

3.7u 

4.1u 

Standard of living 
Number of passenger cars per 1000 population 
Number of subscriptions to cellular mobile telephone services per 
1000 population 

Infrastructure 
Density of railway network (lines in operation, per 1000 km²) 
Length of motorways (km) 

Innovation and research 
Spending on human resources (public expenditure on education in % 
of GDP) 
* Gross domestic expenditure on R&D in % of GDP 
Percentage of households who have Internet access at home (%) 

Environment 
* Greenhouse gas emissions, CO2 equivalent (tons, 1990=100) 
Energy intensity of the economy (kg of oil equivalent per 1000 euro 
GDP) 
Electricity generated from renewable sources in % of gross electricity 
consumption 
Road share of inland freight transport (% of tonne-km)  

Note

Note

Note

Note

2001 
269.4 
390.1 

2007 
335.7 
1 133.6 

2008 
346.1 
1 325.4 

2009 
345.6 
1 360.8 

2010 
342.4 
1 437.5 

2011 
344.1 
1 159.3 

2001 
48.2 
429 

2001 
4.2 

0.9 
: 

2001 
86.7 
331.0 

2007 
48.1 
1 156 

2007 
4.0 

0.8 
41.0 

2007 
102.4 
292.0 

2008 
48.1 
1 199 

2008 
4.3 

0.9 
45.0 

2008 
98.5 
278.2 

2009 
48.1 
1 244 

2009 
4.3 

0.9 
50.0 

2009 
91.8 
284.3 

2010 
48.1 
1 244 

2010 
: 

0.7p 
56.0 

2010 
91.0 
282.7 

2011 
48.1 
1 254 

2011 
: 

: 
60.0 

2011 
: 
: 

42.9 

23.0 

27.9 

36.9 

45.4 

: 

78.0b 

75.6 

72.7 

73.7 

71.2 

74.0 

EN 

52 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Energy 
Primary production of all energy products (thousand TOE) 
Primary production of crude oil (thousand TOE) 
Primary production of hard coal and lignite (thousand TOE) 
Primary production of natural gas (thousand TOE) 

Net imports of all energy products (thousand TOE) 
Gross inland energy consumption (thousand TOE) 
Electricity generation (thousand GWh) 

Agriculture 
Agricultural production volume index of goods and services (producer 
prices, previous year=100) 
Total utilised agricultural area (thousand hectare) 
Livestock: cattle (thousand heads, end of period) 
Livestock: pigs (thousand heads, end of period) 
Livestock: sheep and goats (thousand heads, end of period) 
Production and utilisation of milk on the farm (total whole milk, 
thousand tonnes) 
Crop production: cereals (including rice) (thousand tonnes, harvested 
production) 
Crop production: sugar beet (thousand tonnes, harvested production) 
Crop production: vegetables (thousand tonnes, harvested production)

Note

10) 

Note
11) 

12) 
13) 
13) 
13) 

2001 
3 758 
1 061 
- 
1 642 
6 121 
7 995 
12.1 

2001 
107.4 

1 178 
438 
1 234 
632 
672 

2007 
4 057 
773 
- 
2 362 
8 141 
9 330 
12.2 

2007 
97.3 

1 202 
467 
1 348 
738 
881 

2008 
3 950 
720 
- 
2 194 
8 001 
9 082 
12.3 

2008 
108.0 

1 288 
454 
1 104 
709 
848 

2009 
4 065 
676 
- 
2 196 
7 277 
8 726 
12.8 

2009 
100.1 

1 300 
447 
1 250 
695 
843 

2010 
4 216 
623 
- 
2 215 
4 497 
8 575 
14.1 

2010 
91.8 

1 335 
444 
1 231 
705 
809 

2011 
: 
: 
- 
: 
: 
: 
: 

2011 
99.0 

1 326 
447 
1 233 
709 
826 

2 829 

2 534 

3 726 

3 442 

3 007 

2 827 

965 
208 

1 583 
282 

1 270 
309 

1 217 
338 

1 249 
234 

1 168 
240 

: = not available 
- = not applicable 
p = provisional 
e = estimated value 
b = break in series 
u = unreliable or uncertain data 
* = Europe 2020 indicator 
The  balance  of  payments  sign  conventions  are  used  for  FDI.  For  FDI  abroad  a  minus  sign  means  investment  abroad  by  the  reporting 
economy exceeded its disinvestment in the period, while an entry without sign means disinvestment exceeded investment. For FDI in the 
reporting  economy  an  entry  without  sign  means  that  investment  into  the  reporting  economy  exceeded  disinvestment,  while  a  minus  sign 
indicates that disinvestment exceeded investment. 
Footnotes: 
1) 
2) 

Land area; 2003, break in series due to improved methodology. 
For the period from 2008 to 2009 data are annual; for the period from 2010 to 2011 data are calculated on the basis of the sum of 
quarterly values and are provided according to NACE Rev. 1.1 
For the period from 2008 to 2009 data are annual; for the period from 2010 to 2011 data are calculated on the basis of the sum of 
quarterly values, and are revised according to the annual GDP calculation (as well, data are provided according to NACE Rev 2.) 
2000 -2007, Gross foreign debt of the whole economy excluding Special Purpose Entities; 2008-2009, gross foreign debt of the 
whole  economy  excluding  Special  Purpose  Entities  (in  December  2008  round-tripping  transaction  related  to  SPE  amounted  to 
825.7 million euro and in December 2009 round-tripping transaction related to SPE amounted to 1499.0 million euro); 2000-2007 
and 2010-2011, gross foreign debt of the whole economy does not include round tripping component of direct investment; from 
December 2005 external debt statistics include data on non-resident investment in debt securities issued by Croatian issuers in 
the Croatian market. 
Calculated on the basis of exports and import values expressed in US dollars; break in series in 2004, change in methodology as 
of 1 January 2004. 
Data used until 2006 refer to half-year periods (second half of the year) and from 2007 onwards data refer to annual average of 
quarterly data. 
Until 2006 data refer to half-year periods; from 2007 onwards, data refer to quarter periods. Until 2008 employment data are given 
according to NACE 1.1 sections 
2001, Long-term unemployment refers to thirteen months or more; data used until 2006 refer to half-year periods (second half of 
the year) and from 2007 onwards data refer to annual average of quarterly data. 
Persons employed in crafts, trades and as free-lances, as well as in the police and defence-related activities are excluded; from 
2004 onwards the number of persons employed in the police and defence-related activities are included. 
Croatia closed all coal mines in 1999 and 2000 and therefore, there is no production of coal from 2000 onwards. 
Volume indices of agricultural production have been calculated on the basis of production data for 65 agricultural products since 
1977; the moving average of producer's prices in the last three years has been taken as a weighting factor for the calculation of 
the index. 
Break in series in 2005, up to 2005, data on land areas, number of fruit trees, grapevines, production and home processing by 
individual family farms were obtained by the estimation method; since 2005, data is obtained by using the interview method done 
by interviewers on a selected sample; data for 2000-2004 are recalculated. 
2000 - 2005, data as on 31 December for legal entities and 15 January for private family farms, from 2006 onwards, data as on 1 
December for both legal entities and private family farms. 

3) 

4) 

5) 

6) 

7) 

8) 

9) 

10) 
11) 

12) 

13) 

EN 

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   EN