COMMISSION STAFF WORKING DOCUMENT Serbia 2020 Report Accompanying the Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions 2020 Communication on EU Enlargement Policy
Date: 2020-10-06
Institutions: Directorate-General for Neighbourhood and Enlargement Negotiations, European Commission
Subjects: Serbia, accession criteria, accession negotiations, coronavirus disease, epidemic, pre-accession strategy

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 6.10.2020  SWD(2020) 352 final  COMMISSION STAFF WORKING DOCUMENT Serbia 2020 Report Accompanying the Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions  2020 Communication on EU Enlargement Policy    {COM(2020) 660 final} - {SWD(2020) 350 final} - {SWD(2020) 351 final} - {SWD(2020) 353 final} - {SWD(2020) 354 final} - {SWD(2020) 355 final} - {SWD(2020) 356 final}  
 
 
Table of Contents 

1. 

1.1  

1.2  

2. 

2.1. 

Introduction .................................................................................................................. 3 

Context ......................................................................................................................... 3 

Summary of the report ................................................................................................. 4 

Fundamentals first: political criteria and rule of law chapters ..................................... 8 

Functioning of democratic institutions and public administration reform ................... 8 

2.1.1   Democracy ................................................................................................................... 8 

2.1.2.   Public administration reform ...................................................................................... 13 

2.2. 

Rule of law and fundamental rights ........................................................................... 18 

2.2.1.  Chapter 23: Judiciary and fundamental rights ........................................................... 18 

2.2.2  Chapter 24: Justice, freedom and security ................................................................. 40 

3. 

3.1. 

3.2. 

4. 

5. 

6. 

6.1. 

6.2. 

6.3. 

6.4. 

6.5. 

6.6. 

6.7. 

6.8. 

6.9. 

Fundamentals first: economic development and competitiveness ............................. 53 

The existence of a functioning market economy ....................................................... 53 

The capacity to cope with competitive pressure and market forces within the EU ... 60 

Good neighbourly relations and regional cooperation ............................................... 64 

Normalisation of relations between Serbia and Kosovo ............................................ 66 

Ability to assume the obligations of membership ...................................................... 67 

Chapter 1: Free movement of goods .......................................................................... 67 

Chapter 2: Freedom of movement for workers .......................................................... 70 

Chapter 3: Right of establishment and freedom to provide services ......................... 70 

Chapter 4: Free movement of capital ......................................................................... 71 

Chapter 5: Public procurement ................................................................................... 73 

Chapter 6: Company law ............................................................................................ 75 

Chapter 7: Intellectual property law ........................................................................... 76 

Chapter 8: Competition policy ................................................................................... 77 

Chapter 9: Financial services ..................................................................................... 79 

6.10.  Chapter 10: Information society and media ............................................................... 81 

6.11.  Chapter 11: Agriculture and rural development ......................................................... 83 

6.12.  Chapter 12: Food safety, veterinary and phytosanitary policy .................................. 84 

6.13.  Chapter 13: Fisheries .................................................................................................. 85 

6.14.  Chapter 14: Transport ................................................................................................ 86 

6.15.  Chapter 15: Energy .................................................................................................... 88 

6.16.  Chapter 16: Taxation .................................................................................................. 90 

1 

 
 
 
6.17.  Chapter 17: Economic and monetary policy .............................................................. 91 

6.18.  Chapter 18: Statistics.................................................................................................. 92 

6.19.  Chapter 19: Social Policy and employment ............................................................... 94 

6.20.  Chapter 20: Enterprise and industrial policy .............................................................. 97 

6.21.  Chapter 21: Trans-European networks ....................................................................... 98 

6.22.  Chapter 22:  Regional policy and coordination of structural instruments ................. 99 

6.25.  Chapter 25: Science and research ............................................................................ 101 

6.26.  Chapter 26: Education and culture ........................................................................... 102 

6.27.  Chapter 27: Environment and climate change ......................................................... 104 

6.28.  Chapter 28: Consumer and health protection ........................................................... 108 

6.29.  Chapter 29: Customs union ...................................................................................... 112 

6.30.  Chapter 30: External relations .................................................................................. 113 

6.31.  Chapter 31: Foreign, security and defence policy .................................................... 114 

6.32.  Chapter 32: Financial control ................................................................................... 117 

6.33.  Chapter 33: Financial and budgetary provisions ...................................................... 119 

Annex I – Relations between the EU and Serbia ................................................................... 121 

2 

 
 
 
 
 
1. 

INTRODUCTION 

1.1  

Context  

The  European  Council  granted  Serbia  the  status  of  candidate  country  in  2012.  Since  the 
opening of Serbia’s accession negotiations in January 2014, 18 out of 35 chapters have been 
opened,  two  of  which  provisionally  closed.  In  2019,  two  negotiation  chapters  were  opened. 
The overall pace of negotiations will continue to depend in particular on a more intense pace 
of rule of law reforms and on the normalisation of Serbia’s relations with Kosovo. 

The Stabilisation and Association Agreement (SAA) between Serbia and the EU entered into 
force  in  September  2013.  Serbia  continued  to  implement  the  SAA,  although  a  number  of 
compliance issues remain.  

The  Serbian  government  continued  to  declare  European  integration  as  its  strategic  goal. 
However,  several  statements  were  initially  made  by  high-ranking  officials  in  the  context  of 
the COVID-19 crisis, which were not in line with this strategic commitment. Notwithstanding 
its latest more positive signals towards the EU, the Serbian authorities overall need to place 
more  emphasis  on  objective  and  unambigious  positive  communication  on  the  EU,  which  is 
Serbia’s main political and economic partner. 

The  COVID-19  pandemic  is  a  global  shock  that  has  not  spared  the  Western  Balkans.  It 
represents  an  unprecedented  burden  on  their  health  and  social  protection  systems.  The  final 
extent  of  its  footprint  in  terms  of  loss  of  human  lives  and  damage  to  the  economies  is  still 
difficult  to  assess,  but  early  estimates  foresee  a  drop  of  between  4-6%  of  gross  domestic 
product  (GDP)  in  the  region.  Thousands  of  citizens  are  at  risk  of  losing  their  jobs,  and 
temporary  government  support  measures  (unemployment  benefits,  deferrals/waivers  to  tax 
and social security contributions, etc.) have an important fiscal impact.  

While  the EU is itself heavily affected by the pandemic, it has spared no time and effort  to 
provide  essential  and  unparalleled  support  to  the  Western  Balkans.  This  includes  financial 
support  of  more  than  EUR  3.3  billion  for  countries  in  the  region  to  address  the  immediate 
health crisis and resulting humanitarian needs, as well as longer term and structural impact on 
their  societies  and  economies.  Given  the  European  perspective  of  the  Western  Balkans,  the 
EU  is  also  treating  the  region  as  privileged  partners  by  associating  them  with  the  Union’s 
mechanisms  and 
the  Health  Security  Committee,  Joint 
include 
Procurement  Agreements,  Union  Civil  Protection  Mechanism,  Solidarity  Fund,  consular 
assistance  in  repatriation  or  exemption  from  temporary  EU  export  restrictions  of  medical 
equipment. These and other measures have provided immediate relief and are a clear message 
of the EU’s political commitment towards the region. 

instruments.  These 

The  Serbian  government  announced  two  financial  packages  in  the  total  worth  of  EUR  5.7 
billion  to  support  the  economy  through  the  COVID-19  crisis.  The  packages  contained 
earmarked  budget  funds  for  direct  cash  subsidies  to  the  private  sector,  for  a  programme  of 
favourable  loans  and  for  state  guaranteed  loans.  Additional  financial  aid  through  support 
schemes  was  announced  for  particularly  affected  sectors,  such  as  tourism  and  transport. 
Furthermore,  the  government  paid  a  minimum  salary  for  employees  of  small  and  medium 
enterprises  for  three  months  and  deferred  the  payment  of  taxes  and  social  security 
contributions.  The  latter  two  measures  were  prolonged  in  July  2020  for  another  month  and 
were complemented by the establishment of a new programme granting state support for each 
newly created job for the period of nine months. All citizens over 18 were offered a EUR 100 

 This designation is  without  prejudice  to positions on status, and is line  with UNSCR  1244/1999 and the ICJ 
Opinion on the Kosovo declaration of independence. 

3 

 
 
                                                           
cash transfer. Serbia pledged EUR 2 million at the EU’s international conference of May 2020 
to help develop and ensure equitable access to COVID-19 vaccines, tests and treatments. 

The president, prime minister and speaker of parliament declared a state of emergency on 15 
March.  The  authorities  aligned  their  actions  to  deal  with  the  pandemic  with  World  Health 
Organisation  (WHO)  recommendations  and  imposed  wide-ranging  temporary  measures, 
including strict curfew hours, closure of schools and universities, bans on public gatherings, 
freezing of most air traffic and closing of borders. 

The  parliament  only  convened  just  over  six  weeks  after  the  state  of  emergency  was  called, 
which limited its ability to scrutinise the executive during this period.   

After the state of emergency was lifted on 29 April, the country held elections on 21 June and 
several  precautionary  measures  were  lifted.  Amid  a  rising  number  of  coronavirus  cases  in 
early July, the President announced the reintroduction of a stricter curfew. This led to protests 
in Belgrade and several other cities, during which protestors expressed dissatisfaction with the 
government’s  handling  of  the  pandemic  and  wider  concerns  over  the  state  of  democracy  in 
Serbia.  Protests  turned  violent  in  some  places  and  several  clashes  erupted  between  police 
forces  and  some  of  the  protestors.  The  EU  reminded  the  authorities  that,  while  protecting 
people’s lives and health should be the first priority and public order must be guaranteed, any 
use of force must be measured and proportionate at all times.  

1.2  

Summary of the report  

As  regards  the  political  criteria,  the  parliamentary,  provincial  and  municipal  elections  in 
Serbia initially  foreseen  for April were postponed following the outbreak of the COVID-19 
pandemic  and  held  on  21  June  2020.  While  contestants  were  able  to  campaign  and 
fundamental  freedoms  were  respected,  voter  choice  was  limited  by  the  governing  party’s 
overwhelming  advantage  and  the  promotion  of  government  policies  by  most  major  media 
outlets,  according  to  the  Organisation  for  Security  and  Co-operation  in  Europe/Office  for 
Democratic  Institutions  and  Human  Rights  (OSCE/ODIHR).  Numerous  recommendations 
previously  made  by  ODIHR  remain  unaddressed.  It  is  crucial  that  the  Serbian  authorities 
address  long-standing  electoral  shortcomings  through  a  transparent  and  inclusive  dialogue 
with  political  parties  and  other  relevant  stakeholders  well  ahead  of  the  next  elections.  A 
number of opposition parties boycotted the elections.  

sessions. 

The  newly  constituted  Serbian  parliament  is  marked  by  the  overwhelming  majority  of  the 
ruling coalition and the absence of a viable opposition, a situation which is not conducive to 
political  pluralism  in  the country. During the previous legislature, some steps were taken to 
address shortcomings in  the work of the parliament with the reduction of urgent procedures 
and previous practices of filibustering. Several  opposition parties continued their boycott of 
parliamentary 
and 
representatives  of  other  institutions  expressing  diverging  political  views  was  used  during 
parliamentary  debate.  The  effectiveness,  independence  and  transparency  of  the  parliament, 
including the role and prerogatives of the parliamentary opposition, need to be strengthened to 
ensure the necessary checks and balances indispensable in a democratic parliament. The new 
parliament and political forces should continue to engage in the inter-party dialogue led by the 
European  Parliament,  with  a  view  to  improving  parliamentary  standards  and  forging  broad 
cross-party  and  societal  consensus  on  EU-related  reforms,  which  is  vital  for  the  country’s 
progress on its EU path.  

against  political  opponents 

Inflammatory 

language 

Serbia is moderately prepared in the area of public administration reform. No progress was 
made  overall  as  the  excessive  number  of  acting  senior  manager  positions  was  not  sizeably 
reduced. Lack of transparency and respect of the merit-based recruitment procedure for senior 

4 

 
 
increasingly  serious  concern.  The  effective 
civil  service  positions 
implementation  of  the  law  on  the  planning  system  needs  to  be  ensured  through  a  strong 
quality control of the Public Policy Secretariat.  

issue  of 

is  an 

Serbia’s  judicial  system  has  some  level  of  preparation.  No  progress  was  made  over  the 
reporting  period.  The  constitutional  reform  on  the  judiciary  was  put  on  hold  until  after  the 
2020 parliamentary elections. This delay has repercussions on the adoption of related judicial 
legislation  that  is  needed  to  increase  safeguards  for  judicial  independence.  The  scope  for 
continued  political  influence  over  the  judiciary  under  the  current  legislation  is  a  serious 
concern.  Serbia  continued  its  efforts  to  reduce  old  enforcement  cases  and  harmonise  court 
practice. 

Serbia has some level of preparation in the  fight against corruption. Limited progress was 
made over the reporting period. Operational steps have been taken to strengthen the mandate 
and  to  ensure  the  independence  of  the  Anti-Corruption  Agency,  as  well  as  to  enhance  its 
capacities with a view to implementing the law on the prevention of corruption upon its entry 
into  force  in  September  2020.  The  changes  brought  by  the  law  on  the  organisation  and 
jurisdiction  of  government  authorities  in  suppression  of  organised  crime,  terrorism  and 
corruption,  in  force  since  March  2018,  produced  some  results  in  terms  of  finalised  cases. 
Overall,  corruption  remains  an  issue  of  concern.  There  is  still  no  effective  prevention 
coordination  mechanism  in  place.  The  number  of  finalised  high-level  corruption  cases  has 
decreased compared with the previous years. Serbia needs to increase its efforts and step up 
the prevention and repression of corruption.  

In  the  fight  against  organised  crime,  Serbia  has  some  level  of  preparation  with  limited 
progress  over  the  reporting  period  related  notably  to  structural  reforms  and  interagency 
cooperation.  Serbia  is  stepping  up  its  cooperation  with  Europol.  Overall,  Serbia  has  yet  to 
establish  a  convincing  track  record  of  effective  investigations,  prosecutions  and  final 
convictions  in  serious  and  organised  crime  cases,  leading  to  an  increased  amount  of 
confiscated assets. Serbia needs to increase its efforts in dismantling large and internationally 
active criminal organisations.  

The legislative and institutional  framework for upholding  fundamental rights  is  broadly in 
place. However, its consistent and efficient implementation still needs to be ensured. Human 
rights  institutions  need  to  be  strengthened  and  their  independence  guaranteed,  including  via 
the  allocation  of  the  necessary  financial  and  human  resources.  Serbia  has  adopted  a  new 
media  strategy,  which  was  drafted  in  a  transparent  and  inclusive  manner  and  identifies  the 
main  challenges  related  to  media  freedom  in  Serbia.  However,  implementation  of  the  new 
strategy  has  not  yet  started  and  no  progress  was  made  yet  on  the  ground  to  improve  the 
overall environment for freedom of expression. As identified in the media strategy, cases of 
threats,  intimidation  and  violence  against  journalists  are  still  a  source  of  serious  concern. 
Transparency of media ownership and of allocation of public funds, especially at local level, 
has  yet  to  be  established.  ODIHR  found  that  most  TV  channels  with  national  coverage  and 
newspapers promoted government policy during the electoral campaign. It also found that the 
few  media  outlets  which  offered  alternative  views  had  limited  outreach  and  provided  no 
effective  counterbalance,  which  compromised  the  diversity  of  political  views  available 
through traditional media, through which most voters receive information. 

Serbia continued to significantly contribute to the management of the mixed migration flows 
towards the EU by playing an active and constructive role and cooperating effectively with its 
neighbours and EU Member States. It also continued to effectively implement the integrated 
border management strategy and its action plan.  

5 

 
 
On the economic criteria, Serbia made some progress and is moderately prepared/at a good 
level  of  preparation  in  developing  a  functioning  market  economy.  Prior  to  the  COVID-19 
crisis,  the  pace  of  GDP  growth  picked  up  as  domestic  demand  strengthened.  External 
imbalances widened but their financing remained healthy due to high inflows of foreign direct 
investment.  Price  pressures  remained  subdued  and  inflation  expectations  contained.  By 
reducing the budgetary deficit and maintaining a prudent fiscal stance, Serbia has significantly 
improved  debt  sustainability.  Labour  market  performance  has  improved,  with  the  lowest 
unemployment rates in the last decade; however, this was also due to large-scale emigration. 
The  COVID-19  crisis  is  however  projected  to  strongly  deteriorate  the  economic  outlook  in 
2020,  in  particular  as  regards  GDP  growth,  public  finances  and  employment.  While  some 
progress has been made in the reforms of the tax administration and the privatisation of state-
owned  banks,  other  structural  reforms  of  public  administration  and  state  owned  enterprises 
advanced  slowly.  Weaknesses  in  the  budgetary  framework  need  to  be  addressed.  There  has 
been no progress  in  strengthening the fiscal  rules. The state retains a strong footprint in  the 
economy and the private sector is hampered by weaknesses in the rule of law. 

Serbia made some progress and is moderately prepared to cope with competitive pressure and 
market  forces within the EU. The structure of the economy improved further and economic 
integration  with  the  EU  remained  high.  However,  despite  some  progress,  the  quality  and 
relevance of education and training does not fully meet labour market needs. Investment has 
continued  to  increase  but,  after  years  of  underinvestment,  remains  insufficient  to  address 
serious  infrastructure  needs.  Serbia  needs  to  apply  the  same  rules  for  prioritising,  selecting 
and monitoring  all capital  investments regardless  of the type of investment  or the source of 
financing,  including  those  under  intergovernmental  agreements.  All  investment  decisions 
need  to  follow  EU  standards  on  public  procurement,  state  aid,  environmental  impact 
assessments and cost-benefit analysis. Although the cost of borrowing for small and medium-
sized  enterprises  has  declined  recently,  they  still  face  a  number  of  challenges,  including  a 
volatile business environment and unfair competition. 

Serbia overall remained committed to bilateral relations with other enlargement countries and 
neighbouring EU Member States and an active participant in regional cooperation. Relations 
with  Montenegro  have  been  marked  by  tensions,  including  concerning  the  30  August 
parliamentary  elections  in  Montenegro.  Serbia  demonstrated  its  commitments  to  provide  a 
renewed impetus to regional cooperation and enhanced regional ownership at the summits in 
Novi Sad, Ohrid and Tirana. It is important that regional initiatives include all partners in the 
Western Balkans and are based on EU rules, building on commitments previously taken in the 
framework  of  CEFTA,  the  Regional  Economic  Area  (REA)  or  the  Transport  Community 
Treaty. 

Regarding the normalisation of relations with Kosovo, the EU-facilitated dialogue resumed 
with high-level meetings on 12 and 16 July, and 7 September 2020. A number of expert level 
meetings  took  place  in  Brussels.  Serbia  needs  to  make  further  substantial  efforts  and 
legally  binding  agreement  with  Kosovo. 
contribute 
Such  an  agreement  is  urgent  and crucial so that Kosovo and Serbia can advance on their 
respective European paths. 

reaching  a comprehensive 

to 

As regards its ability to assume the obligations of membership, Serbia stepped up its work 
to  align  legislation  with  the  EU  acquis  in  the  economic  and  internal  market  chapters.  The 
country  made  good  progress  in  economic  areas  such  as  company  law,  intellectual  property 
law,  competition  and  financial  services.  However,  limited  progress  was  made  on  public 
procurement.  Even  though  Serbia  aligned  significant  parts  of  its  public  procurement 
legislation  with  the  acquis,  a  law  on  special  procedures  for  linear  infrastructure  projects, 
adopted in February 2020, allows exemption of infrastructure projects of “special importance” 

6 

 
 
for  Serbia  from  the  application  of  public  procurement  rules  and,  thus,  allows  for  the 
circumvention of EU rules and standards. Especially the implementation of intergovernmental 
agreements concluded with third countries do not seem to be systematically in line with the 
principles  of  equal  treatment,  non-discrimination,  transparency  and  competition  and  neither 
fully consistent with the relevant EU acquis and national legislation. Environment and climate 
change  need  to  receive  adequate  political  attention,  translating  into  better  coordination, 
stronger  institutions,  more  financing  and  mainstreaming  across  all  sectors  of  the  economy. 
Advancing on  a  green  energy transition,  away from  coal,  needs to  become a priority,  and a 
part  of  Serbia  redoubling  its  efforts  to  fight  air  pollution.  Regarding  transport,  Serbia 
continued  with  rail  reforms.  Transport  investment  decisions  need  to  ensure  best  value  for 
money.  Adequate  financial  and  human  resources  and  sound  strategic  frameworks  will  be 
crucial for the pace of reforms, including in particular the appointment of a head of Serbia’s 
EU negotiating team. 

Serbia  continued  to  develop  intense  relations  and  strategic  partnerships  with  a  number  of 
countries worldwide, including Russia, China and the US. Cooperation with China increased 
during the COVID-19 crisis and was marked by pro-China and EU sceptical rhetoric by high-
ranking  state  officials.  Frequent  high-level  contacts  and  regular  bilateral  visits  with  Russia 
were maintained as well as military technical cooperation, including joint military  drills and 
arms  trade  arrangements.  The  President  of  Serbia  pledged  to  move  the  Serbian  embassy  in 
Israel to Jerusalem by July 2021. Serbia aligned with 60% of the EU CFSP positions in 2019 
and needs to step up its efforts in order to progressively align its foreign and security policy 
with that of the European Union in the period up to accession. 

1.3 State of play of the accession negotiations  

9  Remaining chapters without opening benchmarks  

4 

Draft EU common 
position in Council 

  2 – Freedom of movement for workers   

3 – Right of establishment & freedom to provide services 

14 – Transport policy 

21 – Trans European Networks  

1  Serbia presented its 

  27 – Environment  

Negotiating Position, 
COM prepares Draft 
EU common position 

2  Serbia invited to 

  10 – Information society and media  

present its Negotiating 
Position 

1  Screening reports still 
discussed in Council 
working group 

28 – Consumer and health protection  

  31 – Foreign, Security and Defence Policy  

1 

  34 – Institutions – Currently not applicable  for Serbia 

8  Remaining chapters with opening benchmarks  

2  Opening benchmarks 
assessment reports 
discussed in Council 

  11 – Agriculture and rural development  

22 – Regional policy & coordination of structural 

7 

 
 
 
 
 
 
 
 
 
working group 

instruments 

6  Serbia working on 

  1 – Free movement of goods 

fulfilment of opening 
benchmarks  

8 – Competition policy 

12 – Food safety, veterinary and phytosanitary policy 

15 – Energy 

16 – Taxation 

19 – Social policy and employment 

16 Chapters opened (in total 18) – date 

Serbia working on 
fulfilment of interim 
or closing benchmarks 

  4 – Free movement of capital – 10/12/19 

5 – Public procurement – 13/12/16 

6 – Company law – 11/12/17 

7 – Intellectual property law – 20/06/17 

9 – Financial services – 27/06/19 

13 – Fisheries – 25/06/18 

17 – Economic and monetary policy – 10/12/18 

18 – Statistics – 10/12/18 

20 – Enterprise and industrial policy – 27/02/17 

23 – Judiciary and fundamental rights – 18/07/16 

24 – Justice, freedom, security – 18/07/16 

29 – Customs Union –  20/06/17 

30 – External relations – 11/12/17 

32 – Financial control – 14/12/15 

33 – Financial and budgetary provisions – 25/06/18 

35 – Other issues / Normalisation with Kosovo – 14/12/15 

+ 2 Chapters opened and provisionally closed 

  25 – Science and research (opened and closed at 13/12/16)  

26 – Education and culture (opened and closed at 27/02/17)  

2. 

FUNDAMENTALS FIRST: POLITICAL CRITERIA AND RULE OF LAW CHAPTERS 

2.1. 

Functioning of democratic institutions and public administration reform  

2.1.1   Democracy  

The reporting period was marked by deep political polarisation, in particular in the context of 
parliamentary,  provincial  and  municipal  elections  on  21  June  2020.  While  elections  were 
administered  efficiently,  the  dominance  of  the  ruling  party,  including  in  the  media,  was  of 
concern.  A  number  of  opposition  parties  boycotted  the  elections  despite  efforts  led  by  the 
European Parliament  to  create cross-party consensus  on electoral  reforms, citing democratic 
concerns and an uneven playing field. The newly constituted Serbian parliament is marked by 

8 

 
 
 
 
 
 
 
 
the  overwhelming  majority  of  the  ruling  coalition  and  the  absence  of  a  viable  opposition,  a 
situation which is not conducive to political pluralism in the country.  

Following  the  outbreak  of  the  COVID-19  crisis,  a  state  of  emergency  was  declared  on  15 
March  by  a  joint  decision  of  the  president,  prime  minister  and  speaker  of  parliament.  The 
authorities imposed wide-ranging measures restricting fundamental freedoms, including strict 
curfew hours. The adequacy and proportionality of some of these measures were disputed by 
several domestic and international organisations. The parliament only convened just over six 
weeks  after  the  state  of  emergency  was  called,  which  limited  its  ability  to  scrutinise  the 
executive  during  this  period.  The  state  of  emergency  was  approved  by  parliament  on  28-29 
April and lifted a week later.  

Following  that,  the  country  held  elections  on  21  June  and  several  precautionary  measures 
were lifted. Amid a rising number of coronavirus cases in early July, the President announced 
the reintroduction of a stricter curfew. This led to protests in Belgrade and several other cities, 
during  which  protestors  expressed  dissatisfaction  with  the  government’s  handling  of  the 
pandemic and wider concerns over the state of democracy in Serbia. Protests turned violent in 
some places and several clashes erupted between police forces and some of the protesters. The 
EU reminded the authorities that, while protecting people’s lives and health should be the first 
priority  and  public  order  must  be  guaranteed,  any  use  of  force  must  be  measured  and 
proportionate at all times. 

Elections  

The parliamentary, provincial and local elections initially foreseen for April were postponed 
to  21  June  2020  following  the  COVID-19  crisis.  While  contestants  were  able  to  campaign 
and fundamental freedoms were respected, voter choice was limited by the governing party’s 
overwhelming  advantage  and  the  promotion  of  government  policies  by  most  major  media 
outlets,  according  to  the  Office  for  Democratic  Institutions  and  Human  Rights  at  the 
Organisation  for  Security  and  Cooperation 
in  Europe  (OSCE/ODIHR).  Numerous 
recommendations  previously  made  by  ODIHR  remain  unaddressed.  It  is  crucial  that  the 
Serbian  authorities  address  long-standing  electoral  shortcomings  in  a  transparent  and 
inclusive dialogue with political parties and other relevant stakeholders well ahead of the next 
elections. 

The elections of 21 June were characterised by intense political polarisation, amidst a boycott 
by  most  of  the  opposition.  With  48.9%,  voter  turnout  was  lower  than  in  previous 
parliamentary  elections  (2016:  56%). Only three  lists passed the 3% threshold: The Serbian 
Progressive Party (SNS), led by the Serbian President, with  60.65% of the vote (188 of the 
250  seats  in  parliament);  SNS’  coalition  partner,  the  Socialist  Party  of  Serbia,  with  10.38% 
(32  seats),  and  the  Patriotic  Alliance  of  Serbia  with  3.83%  (11  seats).  Four  parties 
representing  national  minorities,  which  are  exempt  from  the  threshold,  obtained  overall  19 
seats. 

Despite travel and other restrictions, ODIHR deployed a special election assessment mission, 
upon the invitation of the Serbian authorities. ODIHR found that parliamentary elections were 
administered  efficiently,  despite  challenges  posed  by  the  COVID-19  pandemic,  but  the 
dominance of the ruling party, including in the media, was of concern.  

On election day, procedures were generally followed, but ODIHR observers noted cases and 
received reports of violations of the campaign silence that benefitted the ruling party. Local 
observers  found  irregularities  and  incidents  in  8-10%  of  the  polling  stations,  an  increase 
compared with previous elections.  

9 

 
 
The  official  campaign  period  started  on  4  March  but  was  suspended  during  the  state  of 
emergency.  The  campaign,  including  calls  for  a  boycott,  remained  overall  low-key  and 
focused on recovery from the COVID-19 pandemic, while EU accession and related reforms 
did not feature as main topics. Physical campaigning was limited and most of the campaign 
took place in the traditional media of TV and print, as well as in online media and on social 
networks. During the electoral campaign, ODIHR found that most TV channels with national 
coverage  and  newspapers  promoted  government  policy,  and  the  few  media  outlets  offering 
alternative  views  have  limited  outreach  and  were  therefore  unable  to  provide  an  effective 
counterbalance.  Another  aspect  noted  by  ODIHR  was  the  meshing  of  the  SNS’s  campaign 
with media coverage of the president and the government’s response to the COVID-19 crisis. 
The dual  role of the president as chairperson of  the ruling party  and nominal  ‘bearer’ of its 
electoral list blurred the line between his official duties and the election campaign. 

Ahead of the elections, some steps were taken to improve electoral conditions in the context 
of  a  European  Parliament-led  dialogue  between  the  ruling  and  several  opposition  parties. 
Subsequently,  the  government  adopted  decisions  amongst  others  aiming  to  improve  the 
accuracy  and  transparency  of  voting  lists,  to  strengthen  the  work  of  the  electoral 
administration,  and  to  clarify  conditions  for  the  work  of  election  observers.  Legislative 
amendments were adopted in December 2019 to clarify provisions on prohibiting the use of 
public  resources  for  electoral  campaign  purposes.  This  work  was  taken  forward  by  the 
government working group on elections, established in August 2019.  

A parliamentary supervisory board, charged with the overall monitoring of the campaign, was 
established.  The  three  vacant  posts  in  the  Council  of  the  Regulatory  Body  for  Electronic 
Media (REM), which has a key role in supervising the electronic media, were filled and two 
members replaced. REM adopted rules supplementing the legal framework for media conduct 
during elections, but these rules were not mandatory for private broadcast media, which raised 
questions given the perceived bias of the broadcast media overall. Despite the availability of a 
range of media monitoring efforts which would have allowed for scrutiny, ODIHR found that 
both  the  parliamentary  supervisory  board  and  the  REM  remained  passive  in  supervising 
media  conduct  during  the  campaign  period.  In  the  final  phase  of  the  campaign,  the  REM 
banned several election-related ads. 

In February 2020, the ruling coalition proposed the lowering of the electoral threshold from 
5%  to  3%  and  a  formula  for  enhanced  representation  of  national  minority  lists.  These  key 
amendments  were  passed  in  parliament  in  a  swift  manner  and  without  prior  consultations, 
limiting  the  inclusiveness  of  the  process.  European  standards  (e.g.  the  Venice  Commission 
code of good practice) provide that the fundamental elements of electoral law should not be 
significantly  amended less  than one  year before  an election. During the same parliamentary 
session,  at  the  request  of  an  opposition  member,  changes  were  introduced  to  increase  the 
minimum quota for the less represented gender from 33.3% to 40% on election lists. In May 
2020, legislative changes were adopted amending the rules for the certification of signatures 
necessary to support the election lists. 

While  the  legal  framework  enables  democratic  elections  to  be  held,  numerous  of  the 
recommendations  previously  made  by  ODIHR  remain  unaddressed,  including  areas  such  as 
election  administration,  media,  campaign  finance,  dispute  resolution  and  sanctions  for 
electoral  violations.  Amongst  other  issues,  the  campaign  finance  regulatory  framework  still 
does not ensure transparency of campaign finance and the effectiveness of oversight. Work on 
meeting all ODIHR recommendations should start immediately in a transparent and inclusive 
manner,  to  make  use  of  the  period  between  elections  for  a  comprehensive  and  inclusive 
review of the electoral framework. 

10 

 
 
Parliament  

The  newly  constituted  Serbian  parliament  is  marked  by  the  overwhelming  majority  of  the 
ruling coalition and the absence of a viable opposition, a situation which is not conducive to 
political  pluralism  in  the  country.  Following  the  outbreak  of  the  COVID-19  pandemic,  the 
parliament only convened just over six weeks after the state of emergency was called, which 
limited  its  ability  to  scrutinise  the  executive  during  this  period.  The  new  parliament  and 
political  forces  should  continue  to  engage  in  the  inter-party  dialogue  led  by  the  European 
Parliament,  with  a  view  to  forging  broad  cross-party  and  societal  consensus  on  EU-related 
reforms, which is vital for the country’s progress on its EU path.  

Overall,  parliamentary  oversight  of  the  executive  remains  rather  formalistic  and,  thus,  the 
democratic  accountability  of  the  executive  branch  is  weak.  This  trend  was  accentuated 
following  the  outbreak  of  the  COVID-19  pandemic,  which  tilted  the  democratic  balance  of 
power further towards the government. The parliament’s ability to scrutinise the executive, in 
particular  to  oversee  the  emergency  measures  introduced  by  the  government,  was  limited 
during  the  state  of  emergency.  Most  opposition  members  continued  their  boycott  of 
parliament  sessions  throughout  the  reporting  period,  and,  in  September  2019,  announced  a 
boycott of the upcoming parliamentary elections. 

Some  steps  were  taken  during  the  previous  legislature  to  address  shortcomings  in  the 
parliament’s  work.  Urgent  parliamentary  procedures  were  used  for  19%  of  legislative 
procedures between 1 March 2019 and 31 March 2020 compared with 44% during a similar 
timeframe  a  year  ago.  Previous  filibustering  practices  were  significantly  reduced.  The  2020 
budget  was  adopted  with  more  time  for  debate  than  in  the  previous  year.  For  the  first  time 
since  2014,  the  plenary  discussed  the  annual  reports  of  independent  bodies  and  adopted 
conclusions.  Six  public  hearings  were  held  in  2019  (compared  with  one  in  2018),  and  five 
question and answer sessions with the executive were held in 2019 (five in 2018). Committees 
held  regular  reviews  and  hearings  on  the  work  of  relevant  ministries.  However,  more 
systematic  support  for  the  work  of  independent  regulatory  bodies  needs  to  be  provided,  by 
regularly monitoring the implementation of their recommendations and holding the executive 
bodies accountable.  

Inflammatory  language  against  political  opponents  and  representatives  of  other  institutions 
expressing  diverging  political  views  was  used  during  parliamentary  debates.  This  included 
verbal  attacks,  amplified  by  some  media,  against  a  member  of  the  European  Parliament 
leading  the  inter-party  dialogue.  All  politicians  have  a  responsibility  to  avoid  inflammatory 
language and to counter hate speech. 

The newly constituted parliament and political forces should continue to engage in the inter-
party  dialogue,  with  a  view  to  creating  an  atmosphere  of  societal  dialogue  and  cross-party 
consensus  on EU-related reforms.  The rules  of procedure should  be amended and a code of 
conduct  adopted,  in  line  with  best  practices  and  with  EU  expertise.  The  effectiveness, 
independence and transparency of the parliament, including the role and  prerogatives of the 
parliamentary  opposition,  need  to  be  strengthened  to  ensure  the  necessary  checks  and 
balances indispensable in a democratic parliament. The opposition also has a responsibility to 
make  full  use  of  the  inter-party  dialogue  and  put  forward  constructive  proposals,  thereby 
representing the interests of their constituents. 

The  parliament  continued  to  hold  debates  on  Serbia’s  negotiating  positions  as  regards  EU 
accession chapters as well as exchanges with the core negotiating team and with the National 
Convention on the European Union. 

11 

 
 
Some  97  out  of  the  250  members  of  the  newly  constituted  parliament  are  women.  Changes 
were introduced to increase the quota for the less represented gender from 33.3% to 40% on 
election lists.  

Governance  

The Serbian government continued to declare EU membership as its strategic goal.  However, 
several  statements  were  initially  made  by  high-ranking  state  officials  in  the  context  of  the 
COVID-19 crisis, which were not in line with this strategic commitment. Notwithstanding its 
latest  more  positive  signals  towards  the  EU,  the  government  overall  needs  to  place  more 
emphasis on objective and unambigious positive communication on the EU, which is Serbia’s 
main  political  and  economic  partner.  Furthermore,  political  focus  and  human  and  financial 
resources on EU accession need to increase. A new head of the EU negotiating team should 
be appointed as a matter of urgency. 

The Serbian negotiating team saw substantial turnover of staff, which had a negative impact 
on  its  capacity  to  fulfil  its  coordinating  role.  Adequate  human  and  financial  resources  will 
need  to  be  allocated  across  all  institutions  involved  so  Serbia  can  meet  its  objectives  as 
regards EU  accession negotiations. The head of the negotiating team  resigned in  September 
2019 and a new one needs urgently to be  appointed.  

Consultations  continued  with  relevant  stakeholders,  including  civil  society  organisations 
(CSOs),  through  the  National  Convention  on  the  EU.  However,  the  inclusiveness  and 
transparency of the reform process, in particular on issues related to EU accession, need to be 
improved as a matter of priority and public consultations on policies and legislation need to be 
more substantive.  

The  role  of  independent  bodies  needs  to  be  fully  acknowledged  and  their  recommendations 
followed up promptly. Monitoring of the implementation and impact of the reform processes 
needs  to  be  further  improved.  Authorities  should  put  more  emphasis  on  objective 
communication  about  the  EU,  as  Serbia’s  main  political  and  economic  partner.  Serbia’s 
strategic  choice  of  EU  accession  needs  to  be  communicated  more  pro-actively  and 
unambiguously in public debate. Further efforts are needed to promote EU values in Serbian 
public debate and in education, including readiness for reconciliation. 

Regarding  local  self-government,  the  law  on  Vojvodina’s  financing  resources  has  yet  to  be 
adopted as provided for under the Constitution. Local administrative capacity is still weak and 
significant  disparities  between  municipalities  persist.  Responsibilities  still  continue  to  be 
borne  at  local  level  without  proper  analysis  of  the  capacity  and  human/financial  resources 
required.  The  few  local  governments  which  were  run  by  opposition  parties  have  reported 
continued political pressures by ruling party authorities. 

Constitutional  changes  are  still  needed  in  some  areas  to  address  issues  relevant  to  the 
accession negotiations. 

Civil society 

While some steps were initiated in terms of issuing guidelines and planning of consultations, 
further efforts are still needed to ensure systematic cooperation between the government and 
civil society. An enabling environment for the development and financing of civil society still 
needs to be established on the ground. 

An empowered civil society is a crucial component of any democratic system and should be 
recognised and treated as such by state institutions.  

12 

 
 
CSOs  and  human  rights  defenders  continued  to  raise  awareness  about  civil  and  political 
rights. This takes place in an increasingly polarised environment that is not open to criticism, 
with  the  authorities  making  negative  statements,  echoed  by  some  media,  about  CSOs  in 
general and  on the funding  of  certain  associations in particular. These  statements are made, 
for example, in the  context  of  smear campaigns  or in parliamentary  debates. Organisations 
and  individuals  that  criticise  the  authorities  in  developments  related  to  the  rule  of  law  are 
under  particular  pressure.  Harsh  criticism  against  human  rights  defenders  has  continued  in 
tabloid newspapers and intensified in the period preceding the parliamentary elections. In July 
2020, a list containing the names of CSOs and media reportedly subject to a risk assessment 
by  the  Administration  for  the  Prevention  of  Money  Laundering  (APML)  was  leaked  to  the 
public. The applicable legal basis for the APML’s actions, and the compliance of the APML 
with  the  recommendations  of  the  FATF  will  need  to  be  clarified  (See  Chapter  4  –  Free 
Movement of Capital and Chapter 24 – Justice, Freedom and Security).). 

A national strategy and action plan to help create a positive environment for CSOs have still 
not been adopted. A council for civil society cooperation has yet to be set up. 

The  National  Convention  on  the  EU  (composed  of  representatives  of  governmental  bodies, 
political  parties,  non-governmental  organisations,  experts,  trade  unions,  private  sector 
organisations and representatives of professional organisations), whose goal is to contribute to 
a structured debate on Serbia’s accession to the EU, has continued to monitor and assess the 
progress  of  accession  negotiations.  The  authorities  should  use 
its  expertise  more 
systematically, in order  to  benefit  from the  full potential of  the Convention and its  working 
groups. 

In  January  2020,  the  government  adopted  guidelines  on  the  inclusion  of  CSOs  in  working 
groups for drafting regulations and public policies. The government’s office for cooperation 
with civil society created a database of ‘CSO focal points’ in public institutions and local self-
governments.  The  use  of  the  urgent  procedure  for  adopting  laws  was  reduced,  potentially 
allowing  for more time  for consultations in  the law-making process.  However, a number of 
CSOs  have  reported  that  the  time  given  for  public  consultations  was  still  too  short,  or  that 
their comments on draft laws were not given sufficient consideration and follow-up.  

For the first time, all public administration bodies were obliged in 2019 to submit an annual 
plan as regards public calls for financing CSOs to the office for cooperation with civil society, 
which  then  published  an  e-calendar  of  public  calls.  The  implementation  in  practice  of  such 
annual plans needs to be monitored. The criteria for public financial support for CSOs need to 
be  better  defined  and  implemented  to  ensure  overall  transparency,  especially  at  local  level. 
Due  to  the  COVID-19  pandemic  and  reallocation  of  funds  under  the  state  of  emergency, 
several grant procedures for CSOs, at state and local level, have been suspended.  

2.1.2.   Public administration reform  

Serbia is moderately prepared with the reform of its public administration. It has developed 
further  e-services  delivery.  However,  no  progress  was  made  on  the  three  Commission 
recommendations of last year, which therefore remain valid. There was no sizeable reduction 
of the excessive number of acting senior manager positions. The law on the planning system 
and  its  implementing  legislation  started  being  applied.  However,  line  institutions  need  to 
further  take  into  account  the  quality  control  role  of  the  Public  Policy  Secretariat,  whose 
opinions  are  mandatory  –  meaning  that  the  Secretariat  must  be  consulted  –  but  not  legally 
binding,  as  there  is  no  mechanism  to  verify  that  the  Secretariat’s  comments  have  been 
incorporated and that the final draft versions of laws and policy documents are compliant with 
the  legislation.  Despite  the  adoption  of  a  decree  on  capital  projects  management,  the 
recommendation to develop a single mechanism for prioritising all investments regardless of 

13 

 
 
the type and source of financing still needs to be fully addressed. There is an urgent need to 
address all those persisting shortcomings.  

In the coming year, Serbia should in particular: 

  start  recruiting  senior  civil  servants  effectively  through  a  merit-based  procedure  and 

reduce the excessive number of acting positions; 

  ensure  a  strong  quality  control  role  of  the  Public  Policy  Secretariat  to  allow  for  the 

effective implementation of the law on the planning system; 

  put  in  place  a  unified,  comprehensive  and  transparent  system  for  capital  investment 

planning and management.  

Strategic framework for public administration reform  

Serbia continued implementing its public administration reform (PAR) strategy and action 
plan as well as its public financial management (PFM) reform programme. A new PAR 
strategy, for 2021–2030, is being prepared and aims to further streamline the sector strategic 
framework, including the public financial management programme, and multiple underlying 
strategic  documents.  The  government  ensures  regular  monitoring  and  reporting  on  the 
implementation  of  reforms,  but  a  coordinated  monitoring  and  reporting  system,  which  also 
covers  managerial  accountability,  is  yet  to  be  set  up  (see  Chapter  32  –  Financial  Control). 
CSOs  continue  to  take  part  in  the  monitoring  of  reforms.  Political  support  for  public 
administration  reform  is  in  place  through  the  PAR  Council,  chaired  by  the  Prime  Minister. 
However,  only  two  meetings  of  the  PAR  Council  were  held  during  the  reporting  period. 
Consistency between appropriations in the budget, the medium-term expenditure framework 
and  costing  of  the  overall  PAR  strategic  framework  improved.  Financial  sustainability  is 
still a concern due to reliance on donor funding. 

Policy development and coordination  

Institutions remain in place for a central government policy-making system, including for the 
European  integration  process,  but  weaknesses  persist  due  to  the  continuing  focus  on  formal 
and  procedural  issues.  The  strategic  planning  system,  regulated  through  the  law  on  the 
planning  system,  sets  out  clear  rules  for  developing,  monitoring  and  reporting  on  sector 
strategies. In that context, the effectiveness of quality control by the Public Policy Secretariat, 
including on the costing of strategies and their links to medium-term fiscal planning, has yet 
to be demonstrated. This is because the Secretariat’s opinions addressed to line institutions are 
mandatory – meaning that the Secretariat must be consulted – but not legally binding. There is 
no mechanism to verify that the Secretariat’s comments have been incorporated and that the 
final draft versions of laws and policy documents are compliant with the legislation. The full 
implementation of the law on the planning system will be further assessed when the majority 
of  the  current  strategic  documents  expire,  and  new  ones  will  need  to  be prepared  under  the 
new methodology described in the law. A unified information system, envisaged by the law 
on  the  planning  system,  has  yet  to  carry  out  its  intended  function  in  the  overall  policy 
planning  system.  Namely,  all  new  –  since  the  entry  into  force  of  the  above  law  -  policy 
documents and their monitoring indicators will need to be entered in the unified information 
system,  and  subsequent  reporting  will  also  need  to  be  carried  out  in  that  system.  Mid-term 
plans  for  2020,  which  were  legally  required  to  be  adopted  by  all  institutions  by  the  end  of 
January 2020, were only adopted by three institutions. The national plan for the adoption of 
the  acquis  (NPAA)  and  the  government  annual  work  programme  need  to  be  better 
synchronised. 

14 

 
 
The  capacity  for  inclusive  and  evidence-based  policy  and  legislative  development, 
including  when  aligning  with  the  EU  acquis,  still  needs  strengthening.  Administrative  data 
collection  and  its  systematic  use  for  policy  and  law-making  has  yet  to  improve  across  the 
administration.  The  methodology  on  impact  assessments,  as  well  as  the  obligation  for  line 
institutions  to  take  into  account  the  Public  Policy  Secretariat’s  opinion  prior  to  submitting 
documents  to  the  government,  have  yet  to  be  consistently  applied  in  practice.  Regulatory 
impact  assessments  need  to  be  systematically  submitted  to  the  parliament  together  with 
legislative  proposals.  Better  coordination  between  the  Ministry  of  Finance  and  the  Public 
Policy Secretariat has yet to be established to ensure that there are no discrepancies between 
financial  impact  assessments,  which  the  Ministry  of  Finance  coordinates,  and  financial 
information  in  the  regulatory  impact  assessments.  Regarding  inter-ministerial  consultations, 
official  high-level  mechanisms  still  do  not  exist  for  resolving  possible  conflicts  between 
services. The regulatory framework for public consultations requires that such consultations 
are organised early in  the policy-making process, and sets  detailed instructions on reporting 
publically  on  the  outcome  of  the  consultations.  The  scope  of  public  consultations  has 
improved.  However,  their  impact  and  consistent  application  will  need  to  be  assessed  in 
practice (See Civil society). 

As  regards  public  scrutiny  of  government  work,  planning  system  regulations  require  the 
government and ministries to prepare and publish monitoring reports on the implementation 
of  strategic  documents.  Measuring  achievements  against  stated  objectives  rather  than 
reporting  on  implemented  activities  has  yet  to  be  achieved.  Quarterly  reports  on  the 
implementation of the NPAA continue to be published regularly. The government’s website 
includes  the  annual  government  work  plan.  However,  it  still  does  not  provide  access  to  the 
rest of the government’s main public policy documents, such as action plans for implementing 
the  government  programme  or  monitoring  reports  of  key  government  work  plans.  Minutes 
and conclusions of government sessions are not published either. 

Public financial management  

The  2016-2020  PFM  reform  programme  is  being  implemented  with  delays.  The  future 
programme needs to ensure more realistic planning, costing and sequencing, better links with 
sector strategic framework and an increased focus on performance indicators and results.  

The  government  managed  to  keep  the  public  finances  on  a  sustainable  path  to  more 
realistically  planned  revenue  and  expenditure  projections.  Final  accounts  as  regards 
implementation  of  the  budget  2002-2018,  a  legal  obligation,  have  been  adopted  by  the 
parliament  after  several  years  of  non-compliance.  The  capital  budget  execution  level 
continued its upward trend but a unified, comprehensive, effective and transparent system for 
planning and management of capital investments is yet to be put in place. The adopted decree 
on capital projects management and related rulebooks represent a step in the right direction. 
However, Serbia needs to apply the full methodology of the decree and public procurement 
procedures  to  all  capital  investments  regardless  of  the  type  of  investment  or  the  source  of 
financing,  and  ensure  that  procedures  are  in  place  to  guarantee  the  integration  of  capital 
projects’  planning  and  appraisal  in  the  budget  process.  Furthermore,  the  government’s 
investment planning and management capacity needs to be improved, including the capacity 
to control public assets funded by loans from third countries.  

Although  the  budget  is  structured  by  programmes,  the  link  between  the  government 
programme  and  sector  strategies  and  operational  plans  of  budget  beneficiaries  is  still  weak. 
The legislative framework for public procurement and the strategic and legislative framework 
for conducting financial control was strengthened. The State Audit  Institution has continued 
to increase both the coverage and quality of their audits of public funds, most prominently by 

15 

 
 
multiplying  the  number  of  performance  audits  conducted  within  a  year  (See  Chapters  5  – 
Public procurement, and 32 – Financial control). 

Serbia did not progress in improving budget transparency. A transparency roadmap, a pre-
budget statement, and a mid-year report are still to be produced and published. The Ministry 
of  Finance  does  not  publish  the  budget  execution  profile  at  the  beginning  of  the  year, 
preventing  any  analysis  of  deviations  from  targets.  Budget  execution  reports  contain  only 
basic  elements  but  specify  expenditure  amounts  for  individual  budget  organisations.  Public 
participation  in  the  budget  process  and  budget  oversight  by  the  legislature  needs  to  be 
improved.  The  2020  budget  was  adopted  in  line  with  the  budget  calendar,  after  a  series  of 
parliamentary  debates,  thus  ending  the  lack  of  compliance  with  the  budget  system  law. 
However, assessment and debate among the stakeholders need to be further improved.  

Public service and human resources management  

The  civil  service  legislation  provides  for  merit-based  recruitment  and  dismissal 
procedures.  Under  the  law  on  civil  servants  last  amended  in  December  2018,  the  heads  of 
institutions still have too much discretion in setting up selection committees. The possibility 
to  convert  certain  categories  of  temporary  contracts  into  permanent  civil  service  contracts 
needs to be considered carefully in order to avoid possible abuse. With regard to the dismissal 
process,  the  revised  performance  appraisal  procedure  provides  for  a  longer  timeframe  for 
improving  performance.  Grades  received  by  civil  servants  during  performance  appraisal 
remain  inflated.  The  new  performance  assessment  system  reflecting  the  policy  priorities  of 
institutions will need to be assessed in practice.  

The lack of transparency in, and respect for, the merit-based recruitment procedure provided 
for under the Serbian legislation for senior civil service positions is an issue of increasingly 
serious  concern.  The  legal  provision  allowing  for  appointments  to  ‘acting  positions’  for  6 
months  (with  a  maximum  extension  of  3  months)  continues  being  often  misused.  This  has 
contributed  to  high  staff  turnover  and  loss  of  institutional  memory  in  some  cases,  and  in 
violation of the legal time limit in others. As of June 2020, 56% (March 2019: 63%) of filled 
senior positions are held on an acting basis. The amendments to the law on civil servants in 
December  2018  had  aimed  to  address  these  shortcomings  by  means  of  restricting  the 
appointments to already existing civil servants as of 1 July 2019. However, the government 
continues to appoint non-civil servants on an acting basis despite the deadline of 1 July 2019, 
which  is  in  breach  of  the  law.  The  limited  capacity  of  the  High  Civil  Service  Council  is  of 
concern as regards the need to organise a large number of competitions in order to replace at a 
reasonable  speed  all  the  existing  acting  managers.  The  phasing  out  of  the  current  acting 
positions  needs  to  be  addressed  urgently  and  with  more  political  will,  and  be  effectively 
monitored by the institutions responsible. Current practices, where appointment decisions for 
management positions can be overthrown by a personnel committee of the government after 
the  selection  process  has  been  finalised  at  the  institutional  level,  lack  transparency.  This 
affects  the  proper  functioning  of  the  selection  procedures  embedded  in  the  legislative 
framework. 

The  effectiveness  of  the  competency-based  human  resources  management  system,  which 
was introduced by the amendments to the law on civil servants in December 2018, will need 
to be assessed in practice. The Human Resources Management Service needs to strengthen its 
capacity  to  coordinate  and  harmonise  the  work  of  human  resources  units  of  the  line 
institutions.  The  ongoing  development  of  a  new  human  resources  management  information 
system is delayed and the current system does not interact with other national databases such 
as  the  treasury  payroll  registry.  No  progress  was  made  regarding  remuneration  of  civil 
servants. The implementation of the 2016 law on the salary system in the public sector, which 

16 

 
 
introduces  the  principle  of  equal  pay  for  equal  work  for  all  public  sector  employees,  is 
seriously delayed as it was again postponed for another year, to 2021. Serbia’s Commissioner 
for Equality reported on the adverse effect that the law on the maximum number of employees 
in the public sector had on female staff, as it increased the likelihood that women retire earlier 
and that women under 30 become unemployed.    

With  regard  to  professional  development,  the  National  Training  Academy  for  Public 
Administration  continued  developing  a  national  training  framework  and  organising  training 
for  all  public  officials,  including  at  local  level.  A  comprehensive  professional  development 
programme for senior civil servants was adopted as part of the training programme for 2020. 

A code of ethics for civil servants aims to ensure integrity in public service. Further efforts 
are  needed  to  ensure  the  existing  integrity  plans  in  the  judiciary  and  in  the  public 
administration are fully implemented. The integrity of the civil service is undermined by the 
aforementioned  excessive  number  of  acting  senior  manager  posts.  There  are  no  tangible 
improvements in  relation  to  anti-corruption efforts at  local  level  and the impact  of the local 
anti-corruption plans has yet to be assessed. 

Accountability of administration  

The  structure  of  the  public  administration  has  yet  to  be  streamlined.  The  lines  of 
accountability between agencies and their parent institutions remain blurred, contributing to 
overlapping  functions,  fragmentation,  and  unclear  reporting  lines.  Political  commitment  to 
managerial  accountability  and  systematic  delegation  of  responsibilities  is  still  needed. 
Institutions still have a bureaucratic and process-oriented approach to planning, budgeting and 
the reporting of their activities (See Chapter 32 – Financial control).  

to 

report  on 

implementation  of 

The Ombudsman has a key role in ensuring citizens’ rights to good administration. Public 
the  Ombudsman’s 
the 
authorities  are  obliged 
recommendations.  For  the  first  time  since  2014,  the  Ombudsman’s  annual  report  was 
discussed  in  a  parliament  plenary  session  and  conclusions  were  adopted  in  July  2019  (See 
Governance). Citizens’ right to access public information is regulated in the law on access 
to  information  of  public  importance,  which  has  yet  to  be  amended.  Administrative  silence, 
whereby public authorities fail to properly act on the citizens’ information requests, remains a 
major  issue.  Enforcement  of  the  decisions  taken  by  the  Commissioner  for  Information  of 
Public Importance has yet to be ensured (See Chapter 23 – Fight against corruption).  

On  citizens’  right  to  administrative  justice,  the  administrative  court  continues  to  operate 
with an insufficient number of judges. At the same time this court is  coping with broadening 
responsibilities and a high number of pending cases, especially in relation to labour disputes 
including at local self-government level, which affects its efficiency. The appointment of new 
judges in 2019 is  a positive step. It is too early to assess the impact of the new law on free 
legal  aid,  applied  as  of  October  2019.  While  the  citizens’  right  to  seek  compensation  is 
regulated, no statistical data is collected to monitor its implementation. 

Service delivery to citizens and businesses  

Creating a more user-oriented administration remains a government’s priority. Progress in 
developing  e-services  continued,  although  there  is  still  no  central  policy  ensuring  access  to 
services  for  the  public.  A  law  on  the  central  population  registry,  as  well  as  some  of  the 
implementing legislation on the e-government law, were adopted. The government adopted a 
new e-government  programme in  June 2020. There is  strong  coordination and leadership in 
this  area  from  the  e-government  office  and  the  Prime  Minister’s  Delivery  Unit.  Digital 
signatures  are  being  used  but  the  percentage  (7%  compared  with  5%  in  2018)  of  the 

17 

 
 
population who avail of this service is still limited. A more modern e-government portal was 
rolled out in February 2020.  

The  legal  framework  for  simplification  of  administrative  procedures  has  been  in  place 
since the 2016 law on general administrative procedures. However, regulatory uncertainty for 
individuals  and  businesses  remains  due  to  continuous  delays  with  aligning  the  sector 
legislation  with  this  law.  People  are  still  not  aware  of  their  improved  rights,  allowing  the 
administration to  apply  old  cumbersome procedures. The capacity of the Ministry of Public 
Administration and Local Self-Government to efficiently oversee the implementation of this 
law remains limited. Overlaps in coordination with the Public Policy Secretariat have yet to 
be addressed. 

2.2. 

Rule of law and fundamental rights 

2.2.1.  Chapter 23: Judiciary and fundamental rights 

The EU's founding values include the rule of law and respect for human rights. An effective 
(independent,  quality and efficient) judicial system and an  effective fight  against  corruption 
are of paramount importance, as is respect of fundamental rights in law and in practice. 

Serbia has some level of preparation to apply the EU acquis and the European standards in 
this  area.  Very  limited  progress  was  made  overall.  The  constitutional  reform  aimed  at 
strengthening  the  independence  of  the  judiciary  has  been  put  on  hold  until  after  the 
parliamentary  elections  in  spring  2020.  The  first  step  of  the  parliamentary  procedure  took 
place in June 2019 when the parliamentary committee approved the government’s initiative. 
The next required step, the vote in the plenary to approve this initiative, has yet to take place. 
Revision  of  the  related  judicial  legislation  started.  Overall,  corruption  remains  an  issue  of 
concern.  The  legal  framework  on  fundamental  rights  is  broadly  in  place  but  its 
implementation is inconsistent. Regarding freedom of expression, Serbia has adopted a new 
media  strategy,  which  was  drafted  in  a  transparent  and  inclusive  manner  and  identifies  the 
main  challenges  related  to  media  freedom  in  Serbia.  However,  implementation  of  the  new 
strategy  has  not  yet  started  and  no  progress  was  made  yet  on  the  ground  to  improve  the 
overall  environment  for  freedom  of  expression.  The  role  of  independent  and  regulatory 
bodies  needs  to  be  recognised,  their  capacities  strengthened,  including  their  budgets  and 
skilled staff, and their functional independence must be guaranteed in practice.  

Serbia continued implementing the action plan which was adopted prior to the opening of the 
accession negotiations  on this chapter in  July 2016.  It adopted  a revised  action plan in  July 
2020.  The  revised  plan  is  oriented  towards  meeting  the  interim  benchmarks  of  the  EU 
common position.  

Functioning of the judiciary  

Serbia  has  some  level  of  preparation  in  the  area  of  judiciary.  No  progress  was  made  in 
addressing  last  year’s  recommendations  which  therefore  remain  valid.  Efforts  continued  to 
reduce  old  enforcement  cases  and  harmonise  court  practice.  The  system  for  judicial 
appointments and for evaluating the work of judges and prosecutors needs to be thoroughly 
revised  following  the  adoption  of  the  constitutional  amendments  to  allow  for  merit-based 
judicial  recruitments  and  careers.  The  scope  for  political  influence  over  the  judiciary  is  a 
continuous and serious concern. The delay in the adoption of the constitutional amendments 
has  repercussions  on  the  adoption  of  related  judicial  legislation  that  is  needed  to  increase 
safeguards for judicial independence.  

In the coming year, Serbia needs in particular to: 

  strengthen  the  independence  of  the  judiciary  and  the  autonomy  of  the  prosecution, 

18 

 
 
including through amendments to  constitutional and legislative provisions related to  the 
appointment, career management and disciplinary proceedings of judges and prosecutors;  

  amend the laws on High Judicial Council and the State Prosecutorial Council so that they 
are  empowered  to  fully  assume  their  independent  role  to  proactively  defend  judicial 
independence and prosecutorial autonomy in practice in line with European standards; 

  adopt and implement a human resources strategy for the entire justice sector together with 
establishing  a  uniform  and  centralised  case  management  system,  necessary  for  a 
measurable improvement in efficiency and effectiveness of the justice system. 

Following  the  declaration  of  the  state  of  emergency,  the  work  of  the  courts  was  limited  to 
processing  urgent  cases  according  to  a  list  adopted  by  the  High  Judicial  Council,  mainly 
related to violations of the emergency measures. Furthermore, case-related time limits and the 
statute of limitation were suspended for the duration of the state of emergency. Some of the 
urgent hearings were held via Skype despite this modality lacking the necessary legal basis, as 
based only on an instruction by the Ministry of Justice. In some instances, these proceedings 
resulted in several years of imprisonment. On 1 April 2020, the government issued a decree, 
providing  that  it  was  for  the  judge  to  decide  whether  to  hold  distance  hearings  for  the 
accussed in detention, whenever it was difficult to secure his/her presence due to the risk of 
spreading the virus. Following the lifting of the state of emergency, the High Judicial Council 
instructed the Serbian courts to re-open under detailed health safety instructions as of 11 May.  

The Constitutional Court received some 66 initiatives for assessing the constitutionality of the 
emergency  measures  and  10  appeals  over  possible  violations  of  human  rights.  So  far,  the 
court has taken only one decision. On 21 May, it decided to dismiss the request to review the 
constitutionality  of  the  procedure  by  which  the  state  of  emergency  was  introduced  on 
procedural grounds. In the explanatory part of the decision, the court elaborated on the facts 
related to the epidemic situation, and did not assess the state of emergency decision in light of 
the Serbian Constitution and other legislation.    

Strategic documents  

Serbia’s  main  strategic  document,  together  with  the  action  plan  for  Chapter  23,  was  the 
national  judicial  reform  strategy  (2013-2018).  It  expired  in  December  2018.  The  follow-up 
strategy  (the  national  judicial  development  strategy)  was  adopted  in  July  2020  without  a 
comprehensive impact assessment having been carried out. A revised action plan for Chapter 
23 was also adopted in July 2020. These strategic documents are not underpinned by a clear 
financial analysis of the overall costs of the reform. A human resource strategy has also not 
yet  been  adopted.  The  World  Bank  completed  a  prosecution  functional  review  and  is  up-
dating  its  court  functional  review.  Serbia  needs  to  ensure  that  recommendations  from  the 
functional reviews are followed up on.  

Management bodies 

The  High  Judicial  Council  (HJC)  and  the  State  Prosecutorial  Council  (SPC)  decide  on  the 
required  number  of  judges  and  prosecutors,  on  appointments,  evaluation,  transfers  and 
assignments,  on  disciplinary  liability  and  dismissals  of  judges  and  prosecutors.  They  are 
responsible for initial and in-service training of the judiciary. In addition, the HJC is in charge 
of judicial administration and the management of budgetary funds for salaries of judges and 
related overhead expenses, including costs related to providing expert witnesses. The SPC is 
responsible  for  executing  the  budget  as  regards  salaries  of  public  prosecutors  and  deputy 
public prosecutors and for the costs of criminal procedures including related investigations.  

19 

 
 
As  regards  the  organisation  of  the  courts  and  prosecution  offices,  responsibilities  remain 
divided  between  the  Ministry  of  Justice  and  the  councils.  The  judicial  institutions  would 
benefit from an overall clearer system of governance which would lead to the entire judicial 
system’s independence, accountability and effectiveness being improved. Notably as regards 
the budget for the judiciary and the prosecution, divided responsibilities continue to adversely 
affect  budgetary  planning,  resource  allocation  and  execution.  The  workload  of  courts  and 
prosecution offices should be taken into account in budgetary planning, as well as the number 
of court staff and their responsibilities. The new judicial strategy and the revised action plan 
for  Chapter  23  do  not  clearly  determine  the  next  steps  in  addressing  this  and  do  not  decide 
upon  the  Serbian  authority  responsible  for  the  residual  judiciary  budget,  which  includes 
salaries  of  court  and  prosecution  support  staff.  Some  steps  were  taken  to  improve  the 
transparency  of  the  councils’  work,  by  including  the  minutes  of  their  sessions  and  certain 
decisions on their websites. The councils’ professional and administrative capacities still need 
to  be  further  strengthened.  Long-term  training  plans  for  the  councils’  members  and  support 
staff are needed. 

Independence and impartiality  

The  current  constitutional  and  legislative  framework  continues  to  leave  room  for  undue 
political  influence  over  the  judiciary.  Future  legislative  changes  will  need  to  increase  the 
safeguards  for  judicial  independence.  A  fully  objective,  transparent  and  merit-based  system 
for  appointing,  transferring  and  promoting  judges  and  prosecutors  in  line  with  European 
standards will need to be put in place also to promote professionalism and improve quality.  

The  constitutional  reform  which  aims  to  strengthen  the  judiciary’s  independence  and 
accountability  has  been  put  on  hold  until  after  the  parliamentary  elections  in  spring  2020. 
After the government had submitted to parliament an initiative to change the Constitution in 
November  2018,  the  first  step  of  the  parliamentary  procedure  took  place  in  June  2019:  the 
parliamentary  committee  approved  the  government’s  initiative  to  change  the  Constitution. 
However, the next step, the vote in the plenary to approve this initiative, has yet to take place. 
Once  approved,  the  parliamentary  committee  should  start  its  technical  work  in  drafting  the 
text  of  the  constitutional  amendments,  taking  into  account  the  draft  text  of  the  Ministry  of 
Justice  which  took  on  board  the  Venice  Commission  recommendations.  The  latter  also 
include  a  reference  to  ‘creating  a  constructive  and  positive  environment  around  the  public 
consultations to be held when the parliament will examine the draft amendments’. In January 
2019,  the  authorities  set  up  five  working  groups  to  revise  the  necessary  implementing 
legislation, including legislation on the jurisdiction and organisation of courts and prosecution 
offices,  on judges and on prosecutors, on the responsibilities and functioning of the judicial 
and prosecutorial councils and on the Judicial Academy. However, the delay in the adoption 
of  the  constitutional  amendments  has  repercussions  on  the  drafting  and  the  adoption  of  the 
implementing legislation as clarity on the constitutional basis is still lacking. The Minister of 
Justice  committed  to  consulting  the  Venice  Commission  on  mature  drafts  of  the  legislation 
aimed at implementing the new constitutional provisions.     

Pressure on the judiciary still remains high. Government officials, some at the highest level, 
as well as members of parliament, continue to comment publicly on a regular basis ongoing 
investigations  or  court  proceedings,  and  on  individual  judges  and  prosecutors.  Articles  in 
tabloid  newspapers  target  and  seek  to  discredit  members  of  the  judiciary.  In  some  cases, 
judges  have  asked  to  be  excused  from  adjudicating  on  cases  involving  local  politicians, 
referring to pressure exercised on them and their families. The HJC and the SPC continued to 
monitor complaints by judges and prosecutors. In 2019, the HJC issued two public statements 
condemning  public  commenting.  The  SPC  processed  18  complaints  in  2019,  and 
recommended measures in three cases. In one case, it justified the concern over influence by 

20 

 
 
means of public comments and media campaigns. The codes of conduct for members of the 
government  and  parliament  prohibit  such  behaviour.  However,  the  ongoing  undue  pressure 
and comments on the work of the judiciary show that effective sanctions for undue influence 
of the judicial office holders or public comments that undermine their independence are not 
available or implemented efficiently.    

The  HJC  proposal  for  the  election  of  court  presidents  was  rejected  by  the  relevant 
parliamentary  committee  in  February  2020,  and  it  was  removed  from  the  agenda  amid 
individual  candidates  had  criminal  connections  and  political  party 
allegations 
memberships.  Some  74  courts  in  Serbia  thus  continue  to  have  acting  presidents  for  an 
undefined period. 

that 

Accountability 

A  revision  of  the  disciplinary  rules  and  ethical  codes  is  ongoing  for  both  councils.  This 
revision is needed in order to, among other things, better define the offences,  strengthen the 
capacity  of  the  disciplinary  bodies  and  clarify  which  provision  in  the  codes  should  entail 
disciplinary  liability  for  their  non-compliance.  It  needs  to  be  ensured  in  line  with  European 
standards that only serious misconduct and not mere incompetence gives rise to disciplinary 
proceedings.   

Steps  were  taken  to  establish  the  ethical  boards  as  permanent  bodies  of  the  councils.  The 
members  of  the  boards  still  need  to  be  re-appointed  since  2018.  In  order  to  improve  the 
transparency  of  the  disciplinary  bodies’  work,  the  HJC  posted  43  anonymised  disciplinary 
decisions on its website, after adopting a rulebook on data anonymisation in June 2019.  

In 2019, the HJC disciplinary prosecutor received 491 complaints against judges, mostly from 
members  of  the  public.  In  seven  cases,  it  initiated  a  disciplinary  procedure.  The  HJC’s 
disciplinary commission dealt with 31 cases, 25 cases were solved. A dismissal procedure was 
initiated in one case, and sentences with public warnings and salary reductions were issued. 
The  SPC  disciplinary  prosecutor  rejected  complaints  in  113  cases  as  unfounded  and 
forwarded  7  cases  to  the  disciplinary  commission,  the  second  instance.  In  three  cases 
sanctions were issued including a public warning, prohibition of advancement in  career and 
decrease in salary. The mandate of the SPC’s Commissioner for Autonomy expired in March 
2020.  During  his  three-year  tenure,  the  Commissioner  raised  awareness  about  the  pressure 
exercised  on  prosecutors  in  concrete  cases,  endangering  their  autonomy.  Once  the  state  of 
emergency  was  lifted,  several  requests  for  scheduling  a  session  to  discuss  the  end  of  the 
mandate  the  Commissioner  as  well  as  issues  related  to  the  state  of  emergency  were  not 
responded to.  

Professionalism and competence  

In 2019, the HJC elected 108 judges to permanent positions (2018: 51), promoted 68 judges to 
higher-level courts (2018: 42) and proposed to parliament 221 candidates for first-time judges 
(2018:  187).  The  mandate  of  the  President  of  the  Supreme  Court  of  Cassation  expired  in 
December 2019. The HJC has yet to publish a call for candidates. The SPC elected 45 deputy 
prosecutors and proposed to parliament 19 candidates for first time deputy prosecutors. 

In  the  context  of  the  constitutional  amendments  which  aim  to  strengthen  the  judiciary’s 
independence and accountability, there is a need to revise the current system of recruitment, 
transfer and promotion of judges and prosecutors, in order to ensure that their careers are fully 
based on merit, with a clear link between performance evaluation and career advancement and 
that  final  decisions  are  taken  by  the  councils  and  not  by  the  parliament.  Participation  in 
continuous training (but not the evaluation of such participation) should become a mandatory 
part  of  professional  performance  evaluation  for  judges.  In  addition,  the  professional 

21 

 
 
evaluation of judges should be based not only on quantitative criteria but also on qualitative 
criteria.  At  present,  Serbia  still  has  two  categories  of  eligible  candidates  for  the  judicial 
profession:  graduates  of  the  Judicial  Academy,  and  judicial  and  prosecutorial  assistants.  No 
progress  was  made  in  addressing  the  Venice  Commission’s  advice  on  how  to  effectively 
‘protect  the  Academy  from  possible  undue  influence’.  Strengthening  its  independence  and 
professionalism therefore remains a prerequisite for becoming a sole nationwide entry point to 
the profession at basic courts’ level. 

Quality of justice  

The Judicial Academy is mandated to provide both initial training for qualified law graduates 
who aspire to  work in  the judicial profession  and in-service training for  judges, prosecutors 
and  court  staff.  The  Judicial  Academy  operates  under  the  supervision  of  the  Ministry  of 
Justice.  There  is  still  an  urgent  need  to  improve  the  academy’s  professionalism,  notably  as 
regards  its  internal  capacity  and  organisation.  In  addition,  its  cooperation  with  the  councils 
needs to be strengthened. The academy’s internal organisation reflects the composition of the 
HJC  and  SPC.  This  should  improve  the  quality  of  the  analysis  of  training  gaps  and  needs. 
While manuals and guidelines for evaluating the training provided were developed, there is no 
regular and effective quality  control mechanism applied consistently.  Impact  assessments of 
training  provided  should  demonstrate  that  the  skills  acquired  are  effectively  applied  in 
practice.  The  development  of  a  multiannual  work  programme  based  on  a  thorough  needs 
assessment has been delayed. A systematic approach to the training of judiciary staff is still 
lacking.  Continuous  training  activities,  which  also  require  coordination  efforts  in  order  to 
avoid  overlapping,  continue to  be highly dependent  on different  donors.  The academy is  an 
observer to the European Judicial Training Network (EJTN) but is not proactively benefiting 
from the expertise within the network. 

Further  steps  were  taken  to  improve  transparency  by  publishing  some  4 000  anonymised 
judgments of the four appellate courts. In line with the previous 2018 agreement between four 
Serbian appellate courts and the plan of activities to harmonise court practice, the regular joint 
sessions  and  meetings  with  lower  courts  with  the  aim  of  harmonising  court  practice 
continued.  A  number  of  appellate  court  and  misdemeanour  court  decisions  have  been 
uploaded onto the online database and are available to judges. Efforts need to continue to link 
the various existing databases, including the one on the judgments of the European Court of 
Human  Rights,  and  to  broaden  their  scope.  Harmonising  court  practice  in  the  present  court 
system  with  over  20  courts,  where  judgments  become  final  remains  difficult  to  achieve. 
Structural shortcomings should be analysed in the context of a comprehensive assessment of 
the system’s court and prosecution network, and the role of the Supreme Court of Cassation in 
effectively orienting jurisprudence should be considered. 

As of June 2020, there are 2 703 full time judges, i.e. 38.81 per 100 000 inhabitants. There are 
in total 786 public prosecutors, i.e. 8.9 per 100 000 inhabitants. The European average is 21 
judges and 11 prosecutors per 100 000 inhabitants. The average age for judges in Serbia is 52. 
The court and prosecution network is highly complex in terms of structure (160 courts and 90 
prosecution  offices)  and  overly  complex  in  the  aspect  of  financing,  procurement  and  court 
payments for services. The deployment of non-judicial staff is fragmented. Due to drop in the 
number  of  judicial  assistants  (due  to  an  employment  ban  in  public  administration)  courts 
became dependent on part-time and volunteer work.  

The  Serbian  justice  system  continues  to  rely  on  several  different  case  management 
applications  that  are  not  interconnected.  There  is  still  an  increasingly  urgent  need  for  a 
comprehensive  information  and  communication  technology  strategy  with  clear  timelines 
and  related  financial  commitments.  A  comprehensive  countrywide  system  to  process  and 

22 

 
 
interlink  cases  across  courts  and  prosecutorial  networks,  with  adequate  technological 
support  has  yet  to  be  put  in  place.  The  technical  work  for  the  national  roll-out  of  case 
management  systems  for  the  prosecution  and  for  the  prison  administration  started  in  early 
October  2019.  However,  further  work  is  required  on  fullfilling  the  necessary  preconditions 
such as legislative changes, adequate staffing and budget as well as upgraded communication 
infrastructure  to  ensure  that  all  of  the  case  management  systems  can  perform  including  the 
one for the courts.   

Once in place, such a comprehensive, centralised and country-wide court case (and document) 
management system should ensure a more efficient processing of cases. It should also provide 
the  necessary  stastical  data  in  line  with  the  methodology  of  the  Council  of  Europe’s 
commission  for  the  efficiency  of  justice.  It  could  also  support  an  automatic  case  allocation 
system  which  should  take  into  account  the  case  weighting  criteria  for  more  balanced 
distribution  of  workload.  A  case  weighting  formula  has  been  piloted  20  basic  and  higher 
courts, and should be rolled out at the national level. 

There are currently 198  public notaries in  Serbia covering almost  the entire country. Newly 
adopted bylaws have improved the management of documents while better access to different 
databases allows for electronic issuance of certificates and filing of property tax applications. 
Notaries  have  successfully  processed  inheritance  cases.  The  notary  chamber  continued  its 
efforts in improving training and standardisation of practice. 

In the area of alternative dispute resolution/mediation the working group on the revision of 
the  law  on  mediation  adopted  an  analysis  on  how  to  increase  the  use  of  mediation.  This 
analysis and possible subsequent legal changes were discussed in four public debates among 
lawyers,  judges,  mediators,  legal  professionals,  NGO  representatives  and  the  media  in  July 
2019 but further steps are yet to be taken.   

There  are  1 349  certified  mediators  (277  of  which  are  attorneys),  but  only  124  declared 
themselves as active in mediation in 2019 (9%). Based on their reports, 569 mediations were 
conducted in 2019. This represents a slight drop compared with 638 mediations in 2018 and 
619  in  2017.  Out  of  569  mediated  cases  in  2019,  403  were  concluded  with  a  settlement 
agreement. In 266 proceedings, cases were referred to mediation by the court. The number of 
mediations compared with the number of pending civil court proceedings thus remains below 
1%.   Additional  incentives  for  mediation,  including  legislative  amendments  to  increase  the 
scope of cases referable to mediation should be considered. 

The  system  and  criteria  for  certification  of  mediators  and  licensing  of  trainers  should  be 
further improved. The revised law on amendments and supplements to the law on court fees 
applicable  from  January  2019  has  further  encouraged  parties  to  resolve  their  disputes  by 
amicable means, including mediation, negotiated settlement, and court settlement.  

Efficiency  

The implementation of the national backlog reduction programme (for 2016–2020) continued 
under  the  supervision  of  the  Supreme  Court  of  Cassation.  It  continues  to  have  a  positive, 
although more reduced, impact on the courts’ efficiency with the backlog of old enforcement 
cases  shrinking.  The  definition  of  ‘old’  cases  has  also  been  altered  and  now  only  includes 
cases that are more than 3 years old, rather than those over 2 years old. In 2019 some 214 234 
old cases were resolved (out of which 112 473 were enforcement cases), which is lower than 
in 2018 (311 018 out of which 140 452 were enforcement cases). There are also cases more 
than  10  years  old  and  their  number  remains  high  with  1 184  in  second  instance  courts  and 
252 210  in  basic  courts,  mostly  dealing  with  civil  matters.  The  number  of  cases  alleging 

23 

 
 
violations of the right to a trial within reasonable time was higher in 2019  (100 600) than it 
was in 2018 (68 720).  

The overall high number of pending backlog cases continues to be a concern (685 456 cases 
more  than  2  years  old  at  the  end  of  2019  compared  with  781 137  at  the  end  of  2018).  The 
highest number of pending backlog cases (approx. 86.6% of the total) is in basic courts. While 
the  overall  clearance  rate  dropped  from  139.87%  to  106.04%  between  2016  and  2017,  it 
increased again in 2018 to 110.03% before dropping again in 2019 to 102.01%. In 2019, the 
average  duration  for  cases  to  be  resolved  was  267  days,  compared  with  270  days  in  2018. 
Thus, for the fourth year in a row, the Serbian judicial system was able to process more cases 
than it received. At the  same time, the courts in  2019 received  a higher  number of  cases in 
2019  (2 224 102)  than  it  did  in  2018  (2 089 237)  –  a  trend  which  continued  from  2017 
(2 202 692). 

The  jurisdiction  of  the  Constitutional  Court  covers  assessing  compliance  of  laws  and  other 
general  acts  with  the  Constitution  as  well  as  deciding  upon  constitutional  complaints  over 
potential  violations  of  human  or  minority  rights  and  freedoms.  In  2019,  36 892  cases  were 
pending  cases  (22 473  from  previous  years).  There  are  almost  1 300  cases  older  than  2017, 
and  almost  21 000  from  the  years  2017  and  2018.  The  constitutional  appeals  account  for 
around 98% of the total number (36 291). Only a very small percentage (around 6%) of them 
were  resolved  in  merits.  There  is  a  need  for  more  transparency  in  the  work  of  the  court, 
including as regards accessibility for the public.  

There  are  still  significant  differences  in  workload  between  the  courts  across  the  country.  In 
the  first  half  of  2019,  a  higher  number  of  cases  was  registered  in  the  Belgrade  courts  in 
particular,  where  judges  already  have  the  biggest  workload  in  civil  cases.  Lengthy 
proceedings, the absence of comprehensive and effective free legal aid system and the slow 
pace  of  processing  indemnity  claims  continue  to  hamper  the  quality  of  justice  and  people’s 
access  to  justice  (See  Procedural  rights).  The  impact  of  the  new  free  legal  aid  law, 
implemented only as of October 2019 is yet to be assessed.   

Amendments  to  the  law  on  enforcement  and  security  of  July  2019  (in  force  since  January 
2020)  envisage  the  transfer  of  additional  types  of  enforcement  cases  from  courts  to  public 
enforcement  agents.  Secondly,  the  law  introduces  a  new  appeal  system  to  better  protect 
individual debtors and strengthen court control over public enforcement agents. However, this 
has not yet been matched with additional human resources in courts. The fees for enforcement 
procedures were lowered. Furthermore, the law introduced an e-auction platform to increase 
access to information and improve transparency.  

Domestic handling of war crime cases  

Serbia  needs  to  fully  cooperate  with  the  International  Residual  Mechanism  for  Criminal 
Tribunals (IRMCT), including by fully accepting and implementing its rulings and decisions. 
As  in  previous  years,  Serbia  has  repeatedly  and  publicly  challenged  the  judgments  of  the 
International  Criminal  Tribunal  for  the  former  Yugoslavia  (ICTY),  including  at  the  highest 
levels.  Serbia’s  non-cooperation  in  relation  to  the  arrest  of  people  indicted  for  contempt  of 
court  had  not  been  resolved  by  the  time  of  the  ICTY’s  closure,  and  the  case  was  then 
transferred to the IRMCT. In February 2020, the IRMCT’s Appeals Chamber confirmed that 
the IRMCT has to hear the contempt of court case and it is not to be referred to Serbia. This 
decision is final.  

Regarding  judicial  cooperation  issues,  the  bilateral  agreements  between  the  prosecutor’s 
office of Serbia and its counterparts in Bosnia and Herzegovina, Croatia and Montenegro on 
cooperation related to the investigation of war crimes, crimes against humanity and genocide 

24 

 
 
have not been used to their full extent. In 2019, the cooperation with Bosnia and Herzegovina 
has led to indictments being issued in Serbia. Cooperation with Croatia has continued to face 
a  number  of  impediments  and  has  not  led  to  tangible  results.  Mutual  legal  cooperation 
continues  to  be  extremely  limited  in  war  crimes  cases.  Serbia  has  not  yet  enforced  the 
judgment  of  Bosnia  and  Herzegovina  in  the  case  of  General  Djukić.  The  latter  resides  in 
Serbia. Basic legal and procedural issues remain between the countries, which impede proper 
regional cooperation.   

The implementation of the 2016 national strategy for the investigation and prosecution of war 
crimes has continued at a very slow pace. Although this strategy expires at the end of 2020, 
no preparations are underway for a new strategy. A multi-institutional monitoring mechanism 
is  in  place.  It  has  issued  seven  reports,  which  fail  to  include  recommendations  on  how  to 
address the challenges in implementing the strategy. The Office of the War Crimes Prosecutor 
(OWCP) has not issued a report on its work since December 2018. The level of access and the 
prompt  release  of  information  on  the  website  of  the  OWCP  have  deteriorated  over  the  past 
three years.  

The OWCP filed four indictments against four individuals in 2019, of which three cases were 
transferred  from  Bosnia  and  Herzegovina.  Two  of  the  above-mentioned  indictments  were 
dismissed  as  the  two  defendants  were  found  permanently  incapable  of  following  the 
proceedings,  while after  confirmation  by the  court,  one of the  above-mentioned indictments 
was merged with another case. 

At the end of 2019, there were 16 cases ongoing at first instance, and one case at appeal level 
against a total of 44 defendants, most of whom are low-ranking staff (three mid-ranked and 41 
low-ranking  members  of  the  police,  the  military,  and  also  of  paramilitary  groups.  Several 
cases have been ongoing for over 5 years or more. Serbia continues to have more than 2 500 
cases at the pre-investigation phase.   

Seven  first-instance  judgments  were  handed  down,  whereby  15  defendants  were  convicted 
and sentenced to prison terms ranging from 2 to 15 years, while one defendant was acquitted. 
Two of the above-mentioned judgments involve war-related criminal acts of sexual violence. 
In one of the above-mentioned cases, the first instance court accepted a plea  agreement and 
sentenced the defendant to a one and a half year imprisonment. At second instance, four final 
judgements  were  handed  down,  convicting  seven  defendants  and  sentencing  them  to  prison 
terms from 3 to 12 years.  

Serbian  authorities  continue  to  provide  public  space  to  convicted  war  criminals,  and  permit 
hate speech. Denial of the Srebrenica genocide by certain members of parliament continued 
without sanctions. The parliament in 2019, as in previous years, has not taken a final decision 
regarding  the  termination  of  the  mandate  of  one  of  its  members  who  was  convicted  by  the 
ICTY at final instance. Overall, Serbia should show a genuine commitment for investigating 
and adjudicating war crimes cases. This is also needed for effectively dealing with the legacy 
of the past and for fostering reconciliation. Serbia should prioritise complex cases and those 
involving senior ranking officials as regards command responsibility.  

Fight against corruption 

Serbia has some level of preparation in the fight against corruption. Limited progress has 
been made in implementing last year’s recommendations. Operational steps have been taken 
to strengthen the mandate and to ensure the independence of the Anti-Corruption Agency, as 
well  as  to  enhance  its  capacities  with  a  view  to  implementing  the  law  on  the  prevention  of 
corruption upon its entry into force in September 2020. Legislative amendments were adopted 
in December 2019 to clarify provisions on the prohibition of use of public resources for the 

25 

 
 
purposes  of  electoral  campaigns,  following  the  recommendations  of  ODIHR.  As  regards 
repression of corruption, the changes brought by the law on the organisation and jurisdiction 
of  government  authorities  in  suppression  of  organised  crime,  terrorism  and  corruption,  in 
force since March 2018, produced some results in terms of finalised cases. Overall, corruption 
remains  an  issue  of  concern.  There  is  still  no  effective  coordination  mechanism  in  place  to 
operationalise  prevention  policy  goals  and  effectively  address  corruption.  Furthermore,  the 
number  of  finalised  high-level  corruption  cases  has  decreased  compared  with  the  previous 
years. 

Serbia should increase its efforts in addressing these shortcomings and step up the prevention 
and repression of corruption. It should:    

  improve its track record on investigations, indictments and final convictions in high-level 

corruption cases, including the seizure and confiscation of criminal assets; 

  effectively implement the law on the prevention of corruption in line with the EU acquis, 
international  agreements  and  Council  of  Europe’s  Group  of  States  against  Corruption 
(GRECO) recommendations, in order to strengthen the agency’s role as a key institution 
in a more effective fight against corruption; 

  adopt a new anti-corruption strategy underpinned by a credible and realistic action plan as 

well as an effective coordination mechanism.  

Track record 

Serbia  continued  to  implement  the  law  on  the  organisation  and  jurisdiction  of  government 
authorities in suppression of organised crime, terrorism and corruption. The changes brought 
by this law produced some results in terms of finalised cases for combating corruption in the 
special departments for supression of corruption in the higher prosecutors’ offices and special 
court  departments.  In  2019,  criminal  complaints  were  filed  against  3 577  individuals. 
Indictments  were filed against 583 individuals. The courts  convicted 399 individuals at first 
instance  based  on  indictments  by  these  special  departments  (2018:  332),  out  of  which  there 
were court-accepted plea agreements for 304 defendants (2018: 294).  

In  relation  to  high  level  corruption,  based  on  indictments  from  the  Prosecutor’s  Office  for 
Organised Crime, the courts rendered first instance judgements against 30 individuals in 2019 
(compared  with  41  in  2018  and  50  in  2017).  Of  these,  10  were  based  on  plea  agreements 
(compared  with  13  in  2018).  Confiscation  of  assets  was  imposed  in  3  of  these  cases 
(compared  with  2  in  2018).  The  Prosecutor’s  Office  for  Organised  Crime  indicted  20 
individuals (in comparison to 21 in 2018). Serbia still needs to show a convincing track record 
of confiscating assets in corruption cases.  

In relation to preventing corruption, the Anti-Corruption Agency issued 63 opinions related to 
requests  on  conflicts  of  interest  in  2019  (2018:  77).  It  filed  10  requests  for  misdemeanour 
proceedings.  The  agency  initiated  159  procedures  (15  based  on  reports  and  144  ex  officio) 
(151 for 2018: 37 based on complaints and 114 ex officio) on grounds related to accumulation 
of  functions  without  the  agency’s  prior  approval,  and  151  procedures  for  other  situations 
related  to  conflict  of  interest  or  nepotism  (131  based  on  reports  and  20  ex  officio)  (166  for 
2018: 145 based on complaints and 21 ex officio). In 2019, the misdemeanour courts issued 27 
first instance judgments, based on requests filed by the agency during that year.  

The agency submitted 76 requests related to a failure to promptly submit asset declarations for 
misdemeanour proceedings in 2019 (2018: 45). Based on the agency’s work in previous years, 
misdemeanour courts issued 65 convictions in 2019 (2018: 49). The agency filed 25 criminal 
charges in 2019 (2018: 16) due to reasonable suspicion that a public official had not reported 

26 

 
 
assets or had given false information about assets intending to conceal the facts. Based on the 
agency’s previous work, 19 final judgments were issued.  

The agency also performs  checks  on the funding of political  activities and of elections,  and 
has conducted selections and trained 144 election campaign observers.  

It submitted 96 requests for misdemeanour proceedings for violations of the law on political 
activities financing in 2019 (2018: 90). In the same period, courts rendered 175 final verdicts. 
Based  on  final  sentences,  in  2019,  the  agency  published  59  decisions  on  political  entities 
losing the right to use public funds for their regular work during 2019 (2018: 33). The agency 
signed two misdemeanour plea agreements in 2019.  

A comprehensive and evidence-based assessment of access to information is not possible, as 
the  majority  of  public  authorities  do  not  comply  with  the  obligation  to  provide  data  to  the 
Commissioner  for  Information  of  Public  Importance  regarding  citizens’  requests  for 
information.  The  Commissioner  established  that  4 321  or  83%  (2018:  3 444  or  87%)  of 
citizens’ complaints – most of them concerning administrative silence  – were well-founded, 
meaning  that  the  authorities  should  have  provided  the  information  requested  by  citizens 
according to the law on access to information of public importance.  In 1 786 or 41% (2018: 
1 889 or 55%) of these well-founded cases, the authorities reported that they acted upon the 
Commissioner’s request to provide the information to the complainants even before a decision 
was  made  on  the  appeal,  which  would  indicate  that  there  was  no  reason  not  to  disclose  the 
requested information in the first place. Administrative enforcement of the decisions taken by 
the Commissioner has yet to be ensured.   

In  2019,  courts  in  Serbia  received  152  new  cases  based  on  the  law  on  whistle-blower 
protection  (2018:  122)  and  out  of  the  total  caseload  of  220  cases,  160  cases  were  finalised 
(2018: 124). The protection of whistle-blowers in high corruption cases needs to be ensured, 
including in order to strengthening trust in the institutions. Whistle-blower reports should be 
investigated in accordance with the law, such as in the case of Krusik.  

The  new  law  on  public  procurement  (see  Chapter  5  –  Public  procurement)  contains 
provisions  for  detection  and  prevention  of  corruption  during  the  procurement  process.  The 
public  procurement  rules  continue  to  apply  and  provide  for  flexibility  in  case  of  extreme 
emergency  situations,  like  the  COVID-19  crisis.  However,  the  more  flexible  procedure  still 
requires abiding by the principle of transparency.  

Institutional framework 

Prevention measures 

The revised law on the  prevention of  corruption, previously  known as the law on the  Anti-
Corruption  Agency,  was  adopted  in  May  2019.  It  provides  for,  among  other  things,  an 
increase in the agency’s powers and an improvement in how it operates in order to meet the 
GRECO recommendations.  GRECO has yet to assess this law as it has yet to issue its next 
compliance report on the implementation of recommendations on the prevention of corruption 
in respect of members of parliament, judges and prosecutors.  

The  gradual  strengthening  of  the  agency’s  resources  and  capacity  is  ongoing  in  order  to 
empower  it  to  implement  the  law  as  from  September  2020.  The  new  law  should  be 
implemented  along  the  lines  of  the  GRECO  recommendations,  and  ensure  that  there  is 
increased  independence,  credibility  and  priority-setting  in  the  agency’s  work.  A  public 
competition  is  ongoing,  and the  agency  had,  as  of June 2020, 87 permanent  positions filled 
(compared  with  80  in  2018).  Improvements  to  the  agency’s  ICT  systems  have  been  put  in 

27 

 
 
place to allow it to step up data collection and analysis. Furthermore, regular training sessions 
have been provided to ensure the new law on prevention of corruption is implemented.  

The annual report of the Anti-Corruption Agency for 2018 was presented in May 2019 to 
parliament,  which  adopted  conclusions.  However,  the  workshops  with  the  relevant 
parliamentary committee in order to implement the agency’s recommendations were not held. 
The annual report for 2019 was adopted by the Anti-Corruption Agency in March 2020.  

The  law  on  lobbying  entered  into  force  in  August  2019.  Training  sessions  on  its 
implementation  have  been  organised,  and  the  agency  adopted  the  necessary  bylaws  and 
registers. The agency did not conduct public awareness and citizens’ engagement campaigns 
during 2019. 

The situation in the sectors particularly vulnerable to corruption (i.e. sectors where there is 
substantial public expenditure involved, or alternatively sectors where there is direct contact 
with the public) remains largely unchanged. These include public procurement, infrastructure 
projects,  healthcare,  education,  construction  and  spatial  planning,  and  public  companies. 
There  are  still  no  tangible  improvements  in  relation  to  the  transparency  and  corruption  risk 
assessments  and mitigation in  these fields.  The  risks of corruption  in  the  implementation  of 
public-private  partnerships  and  in  relation  to  the  use  of  exceptions  in  large  infrastructure 
projects  have  been  identified.  A  recently  adopted  law  on  special  procedures  for  linear 
infrastructure projects allowing for the exemption from public procurement rules of projects 
of  ‘strategic  importance’,  in  particular,  raises  serious  concerns  regarding  its  potential  for 
corruption.  

Out  of  the  102  local  self-governments  that  adopted  anti-corruption  plans,  28  established  a 
body  to  monitor  their  implementation,  mostly  in  line  with  the  Anti-corruption  Agency’s 
model. Overall, there were no tangible improvements in relation to anti-corruption efforts at 
the local level, and the impact of the local anti-corruption plans is yet to be assessed.  

The  Anti-Corruption  Council,  in  its  advisory  role  to  the  government,  remained  active  in 
exposing and analysing  cases of systemic corruption.  It  is  still not  working in  full capacity: 
only  7  out  of  13  members  are  nominated.  It  issued  informative  reports  in  2019  on 
enforcement agents, on the science fund, on the lack of transparency as regards signature of 
contracts by the government and on the rule of law, as well as on public procurement in 2020. 
The  government  has  yet  to  start  cooperating  with  this  council  and  does  not  systematically 
consult  it  on  draft  legislation.  The  required  amendment  to  the  government’s  rules  of 
procedure  for  systematic  consideration  of  the  Anti-Corruption  Council’s  recommendations 
has been seriously delayed. The authorities should establish a more constructive relationship 
with the council.  

Law enforcement 

Serbia continued to implement the law on the organisation and jurisdiction of government 
authorities  in  suppression  of  organised  crime,  terrorism  and  corruption.  The  special 
departments  for  combating  corruption  in  the  Higher  Prosecutors’  Offices  in  Kraljevo,  Niš, 
Novi Sad and Belgrade have a total of 45 deputy public prosecutors (44 in 2018). There are 
nine new workplaces for deputy prosecutors in the special department in Belgrade, and five in 
the other three special departments. The Prosecutor’s Office for Organised Crime, which has 
jurisdiction  over  high-level  corruption  cases,  is  understaffed  (see  Chapter  24  –  Justice, 
Freedom and Security). This is also the case for the section of the Higher Court in Belgrade 
dealing  with  corruption.  Serbia  has  continued  to  implement  the  concept  of  task  forces, 
composed  of  representatives  of  the  relevant  state  authorities  to  investigate  corruption 

28 

 
 
offences.  A  total  of  six  task  forces  were  established  by  the  special  anti-Corruption 
departments of the Higher Public Prosecutor’s Offices.   

There has been some improvement in relation to internal control functions in bodies audited 
by  the  State  Audit  Institution.  Overall,  they  still  remain  weak.  The  State  Audit  Institution 
continued to audit statements from public funds beneficiaries in 2019, and audited 159 out of 
which  for  88  it  concluded  that  the  internal  control  system  did  not  provide  reasonable 
assurance  that  the  goals  concerning  compliance  with  regulations  and  procedures  were 
achieved. Some 57% (2018: 76.5%) of the bodies audited by the State Audit Institution were 
found  not  to  have  appropriately  established  the  internal  audit  function.  The  State  Audit 
Institution has carried out financial statement audits and compliance audits on 5 (2018: also 5) 
political organisations in 2019.  

Legal framework 

Serbia is a party to all international anti-corruption conventions. The legal framework for the 
fight against corruption is broadly in place. The law on the prevention of corruption enters 
into force in September 2020. Amendments to the law on the anti-corruption agency, the law 
on  the  financing  of  political  activities  and  the  law  on  public  enterprises  with  a  view  to 
clarifying provisions on prohibiting the use of public resources for electoral campaigns were 
adopted. The law on the financing of political activities needs to be further amended to fully 
comply with all OSCE/ODIHR recommendations.  

The  law  on  free  access  to  information  of  public  importance  still  needs  to  be  further 
amended.  The  authorities  previously  drafted  amendments  including  provisions  aimed  at 
improving  the  enforcement  of  decisions  laid  down  by  the  Commissioner  for  Information  of 
Public  Importance.  They  also  included  provisions  limiting  access  to  information  of  public 
interest related to equity-based companies with shares owned by the state. While it would be 
legitimate to ensure the equal position of all companies (companies that are entirely privately 
funded and companies with shares owned by the state), the drafting of such provisions would 
leave a loophole to arbitrarily deny requests for access to information of public interest. 

The  legal  framework  on  whistle-blower  protection  needs  to  be  aligned  with  the  new  EU 
acquis.  

On  transparency  and  integrity  within  the  public  administration,  there  has  been  no 
sizeable  reduction  in  the  excessive  number  of  acting  senior  manager  posts,  and  non-civil 
servants have continued to be appointed on an acting basis after the legal deadline of 1 July 
2019, in breach of the law on civil servants. In the area of public health, legislation on health 
care and health insurance entered into force, and a number of bylaws to the law on medical 
devices were adopted. The recruitment procedure with the aim of improving the capacities of 
the inspection bodies was finalised. 

Serbia  adopted  a  law  on  the  origin  of  assets,  which  provides  for  further  legal  options  and 
human resources for the tax administration to check assets of natural persons, against declared 
income,  and  tax  any  assets  that  are  in  discrepancy  based  on  a  specific  tariff.  Its 
implementation needs to be non-discriminatory and not susceptible to corruption.     

Strategic framework 

The national anti-corruption strategy (2013-2018) has expired, and the follow-up strategic 
framework  and  coordination  mechanism  has  yet  to  be  decided  upon.  A  number  of  steps  to 
effectively  implement  and  monitor  this  strategy  and  its  follow-up  strategy,  as  well  as  the 
relevant sections in the action plan for Chapter 23, have been seriously delayed.  

29 

 
 
Fundamental rights 

The  legislative  and  institutional  framework  for  upholding  human  rights  is  broadly  in  place.  
However, consistent and efficient implementation of legislation and policies still needs to be 
ensured.  In  addition  to  making  substantial  efforts  to  uphold  freedom  of  expression,  Serbia 
needs to address  shortcomings  that were  already  identified in the 2019 report.  In particular, 
Serbia needs to:  

  strengthen  human  rights  institutions,  guarantee  their  independence,  including  via  the 
allocation of the necessary financial and human resources, and ensure timely follow-up to 
their recommendations; in particular, amend the Ombudsman law and the law on access to 
information  of  public  importance  in  line  with  European  and  international  standards  and 
without further delay; 

  step  up  measures  –  including  by  adopting  and  starting  to  implement  a  new  anti-
discrimination  strategy  –  to  protect  the  rights  of  persons  facing  discrimination;  actively 
pursue investigation and convictions for hate-motivated crimes;  

  ensure  a  consistent  implementation  of  legislation  regarding  individuals  belonging  to 
national  minorities, including Roma1, leading to  a tangible improvement in  the effective 
exercise  of  their  rights  across  the  country  that  can  be  monitored  through  enhanced  data 
collection.  

Serbia  has  ratified  eight  of  the  nine  international  human  rights  instruments.  It  has  yet  to 
become a party to the International Convention on the Protection of the Rights of All Migrant 
Workers  and  Members  of  their  Families.  Overall,  Serbia  still  needs  to  improve  the 
implementation  of  international  human  rights  instruments.  Serbia’s  Office  for  Human  and 
Minority Rights, together with civil society representatives, developed indicators to monitor the 
fulfilment of UN Human Rights bodies’ recommendations.  

When  declaring  the  state  of  emergency  on  15  March  2020,  the  government  adopted  a  decree 
restricting,  as  allowed  by  the  Serbian  Constitution,  certain  human  rights  and  fundamental 
freedoms, namely freedom of movement – including a quasi-complete restriction of movement 
for persons over 65 years of age in urban areas and 70 in rural areas-, freedom of assembly, as 
well as the right to vote. After three weeks, on 6 April, the authorities notified the Council of 
Europe of a derogation in time of emergency under article 15 of the European Convention on 
Human Rights, without, however, providing detail about the measures taken as required under 
that article. 

In  2019,  the  European  Court  of  Human  Rights  delivered  24  (2018:  13)  judgments 
concerning Serbia and found that it violated the European Convention on Human Rights in 22 
(2018: 12) cases. This notably included 10 violations related to the length of proceedings, 7 to 
non-enforcement, 5 to the protection of property, 3 to inhuman or degrading treatment, and 3 
to lack of effective investigation. In 2019, there were 57 (2018: 60) cases against Serbia in the 
enhanced monitoring procedure before the Committee of Ministers of the Council of Europe. 
In February 2020, Serbia adopted a lex specialis setting up a mechanism providing individual 
redress to parents in cases similar to the case of Z. Jovanović v. Serbia. This case involved the 
continuing  failure  by  the  Serbian  authorities  to  provide  the  applicant  with  any  information 
about the real fate of her missing baby which had been in the care of a state-run hospital. The 
Court had found in 2013 a violation of article 8 of the Convention (‘right to respect for private 
and family life’). The implementation of this new mechanism will need to be monitored. 

1  In  line  with  the  terminology  of  European  institutions  the  umbrella  term  ‘Roma’  is  used  here  to  refer  to  a 
number of different groups without denying the specificities of these groups. 

30 

 
 
                                                           
As  regards  the  promotion  and  enforcement  of  human  rights,  the  annual  reports  of 
independent bodies were discussed in a parliamentary plenary session and conclusions were 
adopted  for  the  first  time  since  2014.  Compared  with  2018,  a  similar  number  of  citizens’ 
complaints were submitted to the Ombudsman in 2019 (2018: 3,338; 2019: 3,276), while the 
number  of  recommendations  from  the  Ombudsman  addressed  to  the  authorities  increased 
(2018:  793;  2019:  934).  According 
the  percentage  of  his 
recommendations  followed up by the authorities remains high (2018:  93.2%; 2019:  95.5%). 
However, certain recommendations related to ‘public interest’ have still not been addressed. 
Three new deputy Ombudspersons were appointed a year after the expiration of the previous 
mandates, and one deputy has yet to be appointed. There is a serious delay in filling the posts 
in  the  Ombudsman’s  Office  provided  for  under  the  relevant  rulebook.  In  addition,  staff 
turnover is a concern for the Office’s efficiency, which still lacks appropriate premises. There 
has been a serious delay in amending the law on the Ombudsman.  

the  Ombudsman, 

to 

In the field of prevention of torture and ill-treatment, the capacity of the Ombudsman, in 
its  role  of  National  Preventive  Mechanism  against  Torture,  to  ensure  cooperation  with  civil 
society,  as  provided  for  under  Serbian  legislation,  was  questioned  by  several  NGOs  that 
consequently withdrew  from the Mechanism.  In  June 2020, new NGOs agreed to cooperate 
with the Ombudsman within the Mechanism. The Ombudsman increased the number of visits 
to  relevant  sites,  namely  police  stations,  prisons,  social  welfare  institutions,  psychiatric 
hospitals, and to oversee  the  treatment of refugees and migrants (2017: 61; 2018: 44; 2019: 
77).  The  commission  for  implementing  standards  in  police  conduct  related  to  investigating 
cases of torture continued its work, in light of the pending recommendations of the European 
Committee for the Prevention of Torture and Inhuman or Degrading Treatment or Punishment 
(CPT). Around 190 public prosecutors and police officers have completed training sessions on 
the methodology for investigations into allegations of torture and other forms of ill-treatment. 
A rulebook on applying police powers, which regulates the treatment of individuals detained 
in police custody, was adopted in June 2019. Amendments to the criminal code, which were 
adopted in May 2019, introduced stiffer penalties for torture  committed  by  staff working to 
keep  public  order  or  in  detention  facilities.  They  also  introduced  life  imprisonment  without 
the possibility of conditional release for a number of crimes, which is the subject of two cases 
filed  by  NGOs  before  the  Constitutional  Court  in  December  2019.  Prior  to  the  adoption  in 
May 2019, the Council of Europe’s Commissioner for Human Rights raised concerns on the 
compliance  of  these  amendments  with  the  European  Convention  on  Human  Rights  and  the 
case law of the  European  Court  of  Human Rights. An independent expert  contracted  by the 
authorities  has  now  concluded  that  the  criminal  code  is  not  compliant  with  the  European 
Convention  on  Human  Rights  in  that  regard.  A  law  for  the  prevention  of  ill-treatment  and 
abuse  in  social  institutions  has  yet  to  be  adopted.  The  UN  Committee  Against  Torture 
concluded,  in  a  decision  on  2  August  2019,  that  Serbia  had  violated  article  3  of  the  UN 
Convention  against  Torture  when  a  Turkish  citizen  of  Kurdish  origin  was  unlawfully 
extradited to Turkey in 2017, going against previous interim measures of the Committee. 

Regarding  the  prison  system,  several  prisons,  including  the  prison  hospital  in  Belgrade, 
continued  to  be  renovated  and  modernised  in  line  with  the  national  strategy  for  reducing 
overcrowding in penal institutions. The revision and improvement of treatment programmes 
in prisons and prison medical facilities is ongoing, in light of the CPT recommendations. The 
decision  of  2018  on  reorganising  the  service  for  treatment  programmes  and  alternative 
measures to detention has yet to be fully implemented in practice with adequate human and 
financial resources. Amendments to the law on enforcement of criminal sanctions, introducing 
new  forms  of  alternative  measures  to  detention,  were  adopted  in  May  2019.  The  use  of 
alternative  measures  to  detention  has  increased  and  a  large  percentage  of  convicted  persons 

31 

 
 
are  under  house  detention,  although  the  rate  of  alternative  mesaures  to  detention  –  26  per 
100 000  of  the  population,  including  those  under  electronic  monitoring  –  remains  low.  The 
secondary legislation regarding the Centre for Training and Vocational Training was amended 
to extend the Centre’s responsibilities to provide more frequent and advanced training to all 
prison staff. Shortcomings remain as regards detention conditions and in the provision of legal 
aid  and  healthcare.  Post-release  programmes  plan  for  the  national  employment  services  and 
CSOs to become involved. However, human and financial resources in probation services are 
insufficient and the rate of recidivism remains high. 

The new law on personal data protection started to be applied in August 2019. It is mostly 
aligned  with  the  EU  General  Data  Protection  Regulation.  The  new  Commissioner  for 
Information of Public Importance and Personal Data Protection, appointed by the parliament 
in July 2019 after a six-month delay, requested that the parliament postpone the law’s entry 
into application by 1 year to ensure sufficient capacity building and awareness of public and 
private stakeholders. This request was made so that the law could be effectively implemented. 
However,  the  parliament  did  not  follow  up  on  this  request.  The  Commissioner  pointed  out 
that, by the time of entry into application of the law, only a minority of data ‘controllers’ and 
‘processors’ had designated ‘data protection officers’, as required by the law. Only 2 323 data 
controllers  were  appointed  so  far  out  of  over  12  000.  A  new  draft  rulebook  on  internal 
organisation,  with  additional  posts  considering  the  Office  of  the  Commissioner’s  increased 
responsibilities under the new law, was adopted; it has yet to translate into new recruitments. 
In  November  2019,  Serbia  signed  the  Council  of  Europe’s  Protocol  of  2018  amending  the 
Convention for the Protection of Individuals with regard to Automatic Processing of Personal 
Data,  and  was  one  of  the  first  countries  to  ratify  the  Protocol  in  May  2020.  In  September 
2019,  that  is  after  the  setting  up  of  street  video-surveillance  systems,  the  Ministry  of  the 
Interior  submitted  an  assessment  of  the  impact  of  processing  personal  data  by  using  such 
systems to the Commissioner for Personal Data Protection. In the opinion that he published in 
response, the Commissioner underlined that such an impact assessment, according to the law 
on personal data protection, should have been submitted prior to the actual setting up of street 
video-surveillance.  He  noted  that  several  elements  were  lacking  in  the  impact  assessment, 
preventing  a  proper  risk  analysis  and  mitigation  of  those  risks  as  regards  the  fundamental 
rights of the individuals subject to the video-surveillance. The authories have yet to inform on 
follow-up measures taken in this regard.  

During  the  COVID-19  related  state  of  emergency,  the  government  established  a  centralised 
information  system  in  which  health  institutions  with  hospitalised  persons  suffering  from 
COVID-19  as  well  as  testing  laboratories  have  been  keeping  personal  data.  Such  data  have 
been  regularly  transmitted  to  the  Ministry  of  Health  for  statistical  purposes  and  to  the 
Ministry  of  Interior  for  the  supervision  of  isolation  and  self-isolation  measures.  The 
government  crisis  team  sent  an  SMS  message  on  the  epidemic  situation  to  all  users  of  the 
state-owned Telekom mobile network, while the message was not sent via the other operators. 
The authorities announced the tracking of mobile phones of the Serbian diaspora returning to 
the country.  In that overall context, the Commissioner for Personal  Data Protection stressed 
the importance of respecting lawful, limited and proportional processing of health and other 
sensitive personal data in line with the law on personal data protection. 

Freedom  of  thought,  conscience  and  religion  is  constitutionally  guaranteed  and  generally 
respected.  However,  the  lack  of  transparency  and  consistency  in  the  process  for  registering 
religious  communities  continues  to  be  one  of  the  main  obstacles  preventing  some  religious 
groups from exercising their rights. The law on churches and religious communities has yet to 
be aligned with international standards.  

32 

 
 
Freedom of expression  

Serbia  has  some  level  of  preparation  concerning  freedom  of  expression.  Serbia  adopted  a 
new media strategy in January 2020, which was drafted in a transparent and inclusive manner 
and  identifies  the  main  challenges  related  to  media  freedom  in  Serbia.  However, 
implementation of the new strategy has not yet started and no progress was made yet on the 
ground  to  improve  the  overall  environment  for  freedom  of  expression.  The  other 
recommendations of last year have  yet to be addressed and therefore remain valid. Cases of 
threats and violence against journalists remain a concern and the overall environment for the 
exercise  of  freedom  of  expression  without  hindrance  needs  to  be  further  strengthened, 
including in practice. As a step in that direction, the Ombudsman signed  an agreement with 
the  representatives  of  seven  media  associations  and  all  three  journalists’  trade  unions  on 
establishing  a  platform  for  registering  the  cases  of  pressures  on  journalists  and  other  media 
actors  and  endangering  of  their  safety  on  22  May  2020.  This  initiative  is  based  on  the 
previously established practice by media associations of publishing annual statistical reports. 
Transparency  of  media  ownership  and  of  allocation  of  budgetary  funds,  especially  at  local 
level, has yet to be established. Serbia’s new media strategy has pointed out these issues. As 
regards  the  media  monitoring  of  the  electoral  campaign,  ODIHR  found  in  its  preliminary 
report that both the newly established Supervisory Board in the parliament and the Regulatory 
body for Electronic Media  (REM)  remained passive,  although REM was  more active in the 
final phase of the campaign. ODIHR also found that most TV channels with national coverage 
and newspapers promoted the government policy and that the few media outlets which offered 
alternative  views  had  limited  outreach  and  provided  no  effective  counterbalance,  which 
compromised  the  diversity  of  political  views  available  through  traditional  media,  through 
which most voters receive information. 

In addressing the persisting shortcomings, Serbia should implement its new media strategy in 
a transparent and inclusive manner, focusing as a matter of  priority on:  

  creating  an  enabling  environment  in  which  freedom  of  expression  can  be  exercised 
without  hindrance  and  ensuring  that  threats,  physical  assaults,  violence,  and  cases  of 
invasion of privacy against journalists and bloggers are properly and swiftly followed up 
by  law  enforcement  and  judicial  authorities,  as  well  as  publicly  condemned  by 
government officials;  

  ensuring  the  full  implementation  of  media  laws,  and  strengthening  the  independence  of 
the Regulatory Body for Electronic Media and boost its capacity to work proactively; 

  ensuring  suitable  funding  of  public  broadcasting  services,  transparent  and  equitable 
co-funding  for  media  content  serving  the  public  interest,  and  increased  transparency  in 
media ownership and advertising. 

The new media strategy was drafted in a transparent and inclusive manner by a working group 
composed  of  both  media  associations  and  public  officials.  It  identifies  the  main  challenges 
related to media freedom in Serbia and sets out measures to address them. The same working 
group, which had drafted the strategy, started drafting an action plan covering the first three 
years  of  the  strategy.  The  strategy’s  actual  impact  on  the  overall  environment  for  media 
freedom in Serbia will need to be assessed during its implementation. 

Intimidation of journalists 

The Standing Working Group on the Safety of Journalists has helped increase the sharing of 
information  between  the  police,  the  prosecution  and  media  assocations.  In  May  2020,  the 
Ombusman signed an agreement with seven media associations and all three journalists’ trade 
unions  on  establishing  a  platform  for  registering  cases  of  pressure  on  journalists.  This 

33 

 
 
initiative is based on the previously established practice by media associations of publishing 
annual statistical reports. These reports cover cases of a criminal nature, together with other 
types of threats and attacks that do not necessarily fall within the criminal code but are still 
relevant  to  assess  the  overall  environment  for  media  freedom  in  Serbia.  One  of  the  media 
associations reported an increase in the total number of threats and attacks, from 30 cases in 
2018 to 67 cases in 2019. Following an analysis of the criminal code by the Standing Working 
Group,  the  Republic  Public  Prosecutors’  Office  (RPPO)  drafted  a  mandatory  instruction  on 
the  conduct  of  public  prosecutors  in  criminal  cases  of  violence  against  journalists.  Contact 
points,  within  prosecutors’  offices,  for  criminal  offences  motivated  by  prejudice  or  hatred, 
attended  training  sessions  related  to  the  safety  of  journalists.  A  network  of  those  contact 
points  has  enabled  journalists  to  establish  swifter  communication  with  the  authorities  for 
protection-related measures.  

However,  cases  of  threats,  intimidation  and  violence  against  journalists  remain  a  source  of 
serious  concern,  especially  at  local  level.  According  to  information  from  RPPO  regarding 
those acts that qualify for criminal prosecution, by the end of December 2019, out of the 59 
cases filed by the RPPO in 2019, 47 cases (an increase compared with the 34 cases in 2018) 
were  considered  by  the  RPPO  and  12  cases  dismissed  due  to  absence  of  legal  grounds  for 
criminal  proceedings.  Some  5  cases  were  finalised  with  a  conviction,  while  criminal 
proceedings  continue  for  the  42  remaining  cases  (5  cases  before  the  court,  33  in  pre-
investigation and 4 without identified perpetrators). Regarding the 57 cases filed by the RPPO 
in 2018, by the end of December 2019, 34 cases were considered by the RPPO and 23 cases 
dismissed due to absence of legal grounds for criminal proceedings. Altogether 10 cases – 5 
convictions in court, 2 penalties imposed in accordance with the principle of deferred criminal 
prosecution, 1 acquittal and 2 cases where the prosecution's indictment was dismissed by the 
court – were finalised, while criminal proceedings continue for the 24 remaining cases (1 case 
before the court, 17 in pre-investigation and 6 without identified perpetrators).  

During the COVID-19 related state of emergency, the government adopted on 28 March 2020 
a  decree  to  centralise  all  information  on  the  pandemic  exclusively  through  the  government 
crisis  team,  which  was  then  withdrawn  on  2  April.  A  journalist  was  arrested  after  having 
written an article describing lack of COVID-19 protective equipment in a hospital. While the 
criminal charges against her for causing panic were dropped a month later, the journalist has 
since then continued to be the victim of smear campaigns, verbal abuse and threats, including 
by  high-level  officals.  A  restriction  measure  on  access  of  journalists  to  the  daily  press 
conferences on the pandemic was in place for ten days and then withdrawn.  

Regarding  the  commission  tasked  with  looking  into  three  cases  involving  the  murder  of 
journalists from 1999 and 2001, an appeal procedure is ongoing on a sentence issued in April 
2019,  which  had  been  the  first  ever  in  a  case  involving  the  murder  of  a  journalist. 
Investigation is ongoing in the two other cases.  

Implementation of legislation / institutions  

The independence of the REM needs to be strengthened to enable it to efficiently safeguard 
media  pluralism.  As  a  result  of  the  inter-parliamentary  dialogue  facilitated  by  the  European 
Parliament,  the  three  vacant  positions  in  the  REM  Council  were  filled  in  December  2019, 
after a three-year delay. Two other members resigned in January 2020 and were replaced in 
February 2020. Other developments of the dialogue have included the eventual establishment, 
as required by the law on the election of representatives of 2000, of a Supervisory Board at 
the  parliament.  Its  mandate  is,  inter  alia,  to  monitor  electronic  and  print  media  during  the 
electoral  campaign.  REM  adopted  in  February  and  March  2020  respectively  a  rulebook  on 
obligation for public media services during the electoral campaign, and a recommendation for 

34 

 
 
private broadcasters. REM has yet to clarify how such distinction between public and private 
broadcasters complies with the law on electronic media and with the opinion of the Ministry 
of Culture and Information of January 2020, which foresees legal obligations also for private 
media.  During  the  electoral  campaign,  REM  published  weekly  media  monitoring  reports, 
focusing on time allocated to the different lists of candidates. REM’s methodology has yet to 
be  clarified  as  regards  its  choice  to  count  the  airtime  presence  of  “analysts”  as  a  separate 
category,  while  at  the  same  time  having  acknowledged  that  “analysts”  can  sometimes  be 
supporting certain political parties.  It also  has to be clarified  how REM counted the airtime 
presence  of  public  officials  when  those  officials  provided  explicit  support  to  electoral  lists 
when  appearing  in  the  media.  Overall,  ODIHR  found  in  its  preliminary  report  that  both  the 
Supervisory  Board  and  REM  remained  passive  in  supervising  media  conduct  during  the 
campaign  period,  although  REM  was  more  active  in  the  final  phase  of  the  campaign  and 
banned several election-related ads. ODIHR also found that most TV channels with national 
coverage  and  newspapers  promoted  the  government  policy  and  that  the  few  media  outlets 
which  offered  alternative  views  had 
limited  outreach  and  provided  no  effective 
counterbalance,  which  compromised  the  diversity  of  political  views  available  through 
traditional media, through which most voters receive information. 

Hate speech and discriminatory terminology are often used and tolerated in the media and are 
rarely  tackled  by  regulatory  authorities  or  prosecutors.  Verbal  attacks  and  smear  campaigns 
against  journalists  intensified  during  the  period  prior  to  the  elections.  The  Press  Council 
continued to record an increase of breaches of the journalistic code of professional conduct in 
print media. Recurrent statements by high-ranking state officials on the daily and investigative 
work  of  journalists  are  preventing  the  creation  of  an  environment  where  freedom  of 
expression  can  be  exercised  without  hindrance.  The  frequent  refusal  by  public  bodies  to 
disclose  information,  or  their  administrative  silence,  following  requests  submitted  under  the 
law  on  free  access  to  information  of  public  importance,  continued  to  hinder  the  work  of 
journalists. The number of journalists’ appeals to the Commissioner for Information of Public 
Importance increased in 2019 as compared with 2018. 

Public service broadcaster 

An unbalanced representation by public service broadcasters of the plurality of political views 
was observed during the overall reporting period. As regards the period preceeding elections, 
ODIHR found in its preliminary report that the public broadcasters provided contestants with 
free  airtime  and  equal  access  to  election  programming,  as  required  by  law.  However,  the 
government  benefitted  from  extensive  coverage  in  other  editorial  programmes.  Public 
broadcasting  services  in  minority  languages  need  to  be  strengthened,  especially  as  regards 
Radio Television Serbia. Despite the  increase of about 15% of the subscription fee in January 
2020, the temporary nature of the funding model – a combination of subscription fees, budget 
subsidies  and  commercial  contributions  –  leaves  public  broadcasters  vulnerable  to  political 
influence. 

Economic factors  

Political and economic influence over the media continues to be a source of concern. Serbia’s 
new  media  strategy  identified  a  lack  of  transparency  in  ownership  structures  and  lack  of 
fairness in financing from state resources such as media content co-financing and advertising 
funds from the state, state-owned companies and local government budgets. The strategy also 
highlighted the absence of suitable criteria and mechanisms to assess the existence of media 
pluralism in Serbia, and identified measures aiming at addressing these issues. The reporting 
period was characterised by a number of sales and acquisitions of media companies. Several 
companies were purchased by Telekom Srbija, whose majority stakeholder is the state. In one 

35 

 
 
case,  a  lack  of  agreement  on  the  renewal  of  a  distribution  contract  with  a  cable  television 
station led to a drop in access to diverse media for the public. The privatisation process of the 
media sector has yet to be completed. The COVID-19 pandemic resulted in the worsening of 
the  economic  situation  of  media  in  Serbia,  which  were  hit  by  a  critical  reduction  of 
advertising revenues. 

Professional organisations and working conditions 

Journalists  associations  have  actively  participated  in  the  working  group  which  drafted 
Serbia’s new media strategy, and continued to participate in the Standing Working Group on 
the  Safety  of  Journalists.  Overall,  journalists  have  little  job  security  and  the  editorial 
environment,  which  favours  ‘tabloidism’,  is  not  conducive  to  improving  journalistic 
standards. The new strategy underlined the need to strenghten journalists’ job security and the 
role of press associations in trade union and employment matters. 

(See also Chapter 10 – Information society and media) 

Freedom  of  assembly  and  association  is  guaranteed  by  the  Constitution  and  is  generally 
respected. Legislation is generally in line with European standards, but has yet to be aligned 
with  the  Guidelines  on  Freedom  of  Peaceful  Assembly  of  the  ODIHR.  Implementing 
legislation regarding the law on freedom of assembly has yet to be adopted.  

Issues of labour and trade union rights are further covered in Chapter 19 – Social policy and 
employment. 

Regarding  property  rights,  the  Agency  for  Restitution  continued  with  restitutions  in  kind, 
having  adopted  a  total  of  around  57 700  opinions  and  first  instance  decisions  on  return  of 
confiscated  properties  by  the  end  of  2019.  This  corresponds  to  around  77%  of  the  75 400 
submitted claims since the agency was established in 2012.  As regards compensation, when 
restitution  in  kind  is  not  possible,  the  deadline  for  the  repayment  of  financial  bonds  is 
unchanged  (December  2021)  after  having  been  extended  in  2018.  The  agency  proposed  a 
coefficient for calculating financial compensation but the government has not yet discussed or 
adopted  it.  The  implementation  of  the  law  on  the  restitution  of  heirless  Jewish  property 
continued  despite  complaints  from  some  of  the  Jewish  community  representatives.  The 
number of restituted properties increased, and so did the return of properties to churches and 
religious communities. 

In  the  field  of  non-discrimination,  legislation  is  broadly  in  line  with  European  standards, 
although the adoption of amendments to the law on anti-discrimination to further align with 
the EU acquis is seriously delayed. The anti-discrimination strategy expired in January 2018 
and has not yet been renewed. According to the Equality Commissioner’s annual report, the 
largest number of complaints relate to discrimination on grounds of disability, age and gender. 
The mandate of the Equality Commissioner expired in May 2020; a new Commissioner has 
yet  to  be  elected.  The  2016  amendments  to  the  criminal  code  related  to  prohibition  and 
punishment of criminal racial acts and other acts of discrimination have yet to be fully aligned 
with the EU acquis. Training courses for public prosecutors have been organised in order to 
improve  the  prosecution  of  hate  crimes.  Four  new  judgments  on  hate  crime  were  adopted, 
bringing to five the total number of final convictions since the introduction of this concept in 
the Criminal Code in 2012. Human rights defenders, together with LGBTI persons, often face 
hate speech, threats and violence. These abuses should be promptly and properly investigated 
and penalised. The Equality Commissioner raised concerns over the increased occurances of 
discriminatory  and  hate  speech  during  the  state  of  emergency,  which  were  targeting  in 
particular women, the elderly, people infected with COVID-19, those returning from abroad, 
and LGBTI persons.  

36 

 
 
On  equality  between  women  and  men,  the  adoption  of  a  new  law  on  gender  equality  has 
been  seriously  delayed.  The  division  of  responsibilities  between  the  sector  for  anti-
discrimination  policy  and  improvement  of  gender  equality  within  the  Ministry  of  Labour, 
Employment, Veterans and Social Affairs and the coordination body for gender equality still 
needs  to  be  clarified.  Furthermore,  an  efficient  institutional  set-up  with  adequate  resources 
needs  to  be  ensured.  The  Equality  Commissioner  assessed  in  her  special  report  on 
employment  that  the  socio-economic  status  of  women  was  significantly  worse  than  that  of 
men.  The  United  Nations  Committee  on  the  Elimination  of  Discrimination  against  Women 
recommended  to  Serbia  in  March  2019  to  take  measures  to,  for  example,  combat  the  anti-
gender  discourse  and  its  adverse  impact  on  women’s  rights,  and  strengthen  the  direct 
implementation of the said  UN Convention  and the  knowledge of the judiciary, prosecutors 
and lawyers in this regard.  

On violence against women and domestic violence, the adoption of the related strategy and 
action  plan  has  been  seriously  delayed.  The  implementation  of  the  law  against  domestic 
violence  needs  to  be  improved,  including  for  vulnerable  women  such  as  women  with 
disabilities and Roma women. The risk of domestic violence increased under the COVID-19 
state of emergency due to the imposition of curfews, the potential under-reporting of cases or 
difficulties  with  removing  perpetrators  from  their  homes.  The  Ombudsman  submitted  an 
initiative  to  amend  the  decree  on  emergency  measures  in  order  to  allow  free  movement  of 
victims  of  domestic  violence.  The  first  report  on  Serbia’s  implementation  of  the  Istanbul 
Convention by the Council of Europe’s Group of Experts on Action against Violence against 
Women and Domestic Violence stressed the need for a more comprehensive response to  all 
violence against women covered by the Convention, not only domestic violence. This should 
also  include  rape,  stalking,  sexual  harassment  and  forced  marriage.  The  very  few  support 
services for these cases of violence are predominantly run by NGOs. However, they operate 
on a limited budget. Furthermore, police protocols do not mandate cooperation with specialist 
support services or the routine referral of victims, resulting in the under-utilisation of existing 
NGO  expertise.  An  integrated  system  for  collecting  and  monitoring  cases  of  violence 
disaggregated by type of violence and by relationship between perpetrator and victim does not 
exist. An action plan on the national programme for safeguarding and improving sexual and 
reproductive  health  has  yet  to  be  adopted.  Additional  funding  is  needed  to  ensure  it  is 
implemented as regards improving access to quality services in this area. 

A new strategy on child protection and preventing violence against children was adopted in 
May 2020. A new national action plan for the rights of the child has yet to be adopted, the 
previous  plan  having  expired  in  2015.  The  adoption  of  amendments  to  the  law  on  juvenile 
offenders  and  protection  of  minors  in  criminal  proceedings,  has  been  seriously  delayed. 
Statistical data on vulnerable groups, including Roma children and children with disabilities, 
is  still  not  disaggregated.  Although  a  relatively  small  number  of  children  are  placed  in 
institutional  care,  violations  of  children  rights  that  happen  in  large-scale  institutions  for 
children  with  disabilities  remain  a  concern.  Ensuring  sustainable  funding  for  preventive 
family support services, including appropriate family-based alternatives when separation of a 
child  from  its  family  is  in  the  child’s  best  interest,  need  to  remain  the  priority.  Regarding 
access  to  justice  for  children,  prevention  programmes  and  programmes  for  reintegrating 
juvenile offenders into the community are still only available in large cities. Mechanisms for 
protecting  child  victims/witnesses  in  justice  proceedings  need  to  be  made  operational  and 
mainstreamed across the country. 

In  March  2020,  Serbia  adopted  a  strategic  framework  regarding  the  rights  of persons with 
disabilities,  while  a  comprehensive  strategy  on  deinstitutionalisation  is  still  lacking.  Serbia 
also  adopted  a  mental  healthcare  strategy  in  November  2019;  however,  placement  and 

37 

 
 
treatment in social institutions of people with psychosocial and intellectual disabilities is still 
not  regulated  in  accordance  with  the  UN  Convention  on  the  Rights  of  Persons  with 
Disabilities.  Women  with disabilities  in  residential institutions are particularly vulnerable to 
gender-specific  forms  of  violence  –  forced  contraception,  forced  sterilisation  and  forced 
abortion.  There  is  a  lack  of  funding  for  developing  community-based  services,  and  for 
supporting licensed service providers and social services. During the first three weeks of the 
COVID-19  state  of  emergency,  persons  with  disabilities  were  lacking  home  assistance 
services,  since  the  service  providers  did  not  have  permits  for  movement  during  the  curfew. 
Children with development disabilities and autism also particularly suffered from the curfew. 
These issues were eventually solved by the authorities following complaints of various CSOs 
and the Ombudsman’s recommendations. 

As  regards  the  rights  of  Lesbian,  Gay,  Bisexual,  Transgender  and  Intersex  (LGBTI) 
persons, two pride parades,  in  June and September 2019, took  place without any  incidents, 
the  latter  attended  by  the  Prime  Minister  and  several  high-level  officials.  In  May  2019,  a 
public  civil  society  event  aimed  at  marking  the  International  Day  against  Homophobia, 
Transphobia and Biphobia was successfully held in Novi Sad, the first time such an event was 
held  outside Belgrade.  Amendments to  the law  on birth registry, which  now enable data on 
gender  change  to  be  entered  into  the  registry,  came  into  force  in  January  2020.  Training 
courses for employees in municipality offices are needed to avoid uneven practices as regards 
implementing legislation. Overall, the situation of LGBTI persons in Serbia remains broadly 
the same as in previous years. The implementation of the hate crime legislation, including on 
grounds  of  sexual  orientation,  remains  inadequate.  Centralised  official  data  on  hate  crimes 
broken down by bias motivation is still lacking. Due to lack of trust in institutions and the fear 
of  stigmatisation  and  victimisation,  cases  of  violence  and  discrimination  towards  LGBTI 
persons  are  often  unreported.  Transgender  persons  are  particularly  vulnerable  to  violence, 
abuse and discrimination. Intersex persons remain invisible both socially and legally. A new 
rulebook on ‘Closer Conditions, Criteria and Methods for Selection, Testing and Evaluation 
of  Reproductive  Cell  Providers  and  Embryos’  includes  a  provision  banning  donation  of 
reproductive materials to people who had homosexual relations in the last 5 years.   

Concerning  procedural  rights, the legal  framework remains  only  partially  aligned with  the 
EU acquis. Regarding access to justice, a new law on free legal aid started to be applied in 
October 2019. NGOs without a lawyer registered in the bar are not, under this law, eligible 
legal  aid  providers,  apart  from  a  few  exceptions.  At  the  same  time,  the  Bar  Association  of 
Belgrade  warned  that  attorneys  who  act  as  statutory  representatives  for  NGOs  would  be 
disbarred; some disciplinary procedures are ongoing. Several NGOs expressed concerns that, 
due to the new law, legal aid may no longer reach some of the most vulnerable individuals. 
Statistical data on the first 6 months of implementation of the law indicate that 2 019 persons 
received  free  legal  aid  and  8 105  received  free  legal  support;  the  eligibility  criteria  being 
linked to benefiting from social welfare or child allowance, which covers a limited percentage 
of  persons  at  risk  of  poverty  in  Serbia.  A  national  strategy  on  the  rights  of  victims  and 
witnesses  of  crime,  and  the  corresponding  action  plan,  were  not  yet  adopted  during  the 
reporting  period.  As  regards  the  right  to  compensation  for  victims  of  crime  in  criminal 
proceedings,  guidelines  for  improving  first  instance  court  performance  were  adopted  by  the 
Supreme Court of Cassation. Amendments to allow for an urgent procedure within the law on 
witness protection were adopted.  

The legal framework for respect for and protection of minorities and cultural rights is broadly 
in place and generally upheld, in line with the Council of Europe Framework Convention on 
National  Minorities.  In  its  fourth  opinion  on  the  implementation  of  this  Convention,  the 
Council  of  Europe’s  Advisory  Committee  found  a  notable  discrepancy  in  the  protection  of 

38 

 
 
minority rights between the Autonomous Province of Vojvodina and other regions of Serbia, 
recommending that protection of national minorities’ rights outside Vojvodina be improved. 
The  Advisory  Committee  also  stressed  the  need  for  setting  up  a  sustainable  data  collection 
framework, and for revitalising inter-ethnic relations, taking into account the need to involve 
the  majority  in  Serbian  society  in  integrating  and  including  national  minorities.  The 
implementation of Serbia’s ‘action plan for the realisation of the rights of national minorities’ 
and relevant legislation needs to lead to a tangible improvement in the effective exercice of 
the rights of individuals belonging to national minorities throughout the country. The Fund for 
the  National  Minorities  was  further  increased.  A  catalogue  of  the  most  common  Albanian 
names and surnames was created,  to enable such names  to  be  accurately  entered  in  registry 
books. Local councils for inter-ethnic relations have been established in all 73 municipalities 
where such an obligation is stipulated by the law; however, the full implementation of their 
mandate  has  yet  to  materialise  as  council  members  have  not  always  been  nominated  or 
councils  do  not  meet  often.  Despite  the  legal  obligation  to  take  into  account  the  ethnic 
composition  of  the  population,  national  minorities  remain  underrepresented  in  the  public 
administration.  The  authorities  started  collecting  data  on  the  representation  of  persons 
belonging to national minorities in the public administration, on the basis of the amended law 
on civil servants. During the state of emergency, the Office for Human and Minority Rights 
and  the  Ministry  of  Public  Administration  and  Local  Self-Government  organised  an 
information campaign in 12 minority languages on preventive measures against COVID-19. 

There  has  been  further  progress  in  the  area  of  education.  The  process  of  preparing  and 
printing  textbooks  in  minority  languages  continued  and  produced  positive  results.  An 
additional nine textbooks in Albanian were provided. The Ministry of Education, Science and 
Technological Development included 24 new sets of textbooks in Albanian in its catalogue of 
textbooks for primary school. More work is needed to complete this task. New curricula for 
teaching Serbian as a non-mother tongue have been adopted. The publication of textbooks in 
minority languages for use in secondary schools remains limited. Access to religious worship 
in  minority  languages  has  yet  to  be  enabled  throughout  Serbia.  Public  broadcasting  in 
minority languages has still not been sufficiently extended outside  of  Vojvodina. Following 
the  process  of  media  privatisation,  the  broadcasting  of  programmes  in  minority  languages 
remains fragile and dependent on funding. 

Regarding  Roma  inclusion,  Serbia  signed  the  Western  Balkan  Partners  Roma  Integration 
declaration in Poznan in July 2019, which contained quantifiable commitments in key priority 
areas. The adoption of an action plan (2019-2020) under the strategy for the social inclusion 
of the Roma in Serbia has been seriously delayed. The coordination body for monitoring the 
strategy’s  implementation,  chaired  by  a  Deputy  Prime  Minister,  met  three  times  during  the 
reporting  period,  not  six  times  a  year  as  previously  agreed  in  the  2017  Roma  Seminar 
conclusions. The Expert Group involving CSOs, mandated to support the coordination body, 
never met. The fifth Roma Seminar was held  in  October 2019. The operational  conclusions 
were  finalised  but  their  adoption  has  yet  to  be  formalised  and  their  implementation  closely 
monitored and reported on. The institutional structure dealing with Roma integration remains 
ineffective  and  complicated,  without  a  clear  distribution  of  tasks.  Coordination  between  the 
national  and  local  authorities,  as  well  as  Roma-sensitive  budgeting,  still  need  to  be 
strenghtened.  There  is  a  serious  delay  in  establishing  the  legal  basis  for  local  Roma 
coordinators and pedagogical assistants. Their job descriptions should be uniform throughout 
Serbia and institutionalised.  

Most Roma people in Serbia have civil documentation. The solution planned by the Ministry 
of the Interior, the Ombudsman and UNHCR to enable the registration of individuals lacking 
an official address by means of registering at centres for social work led to more Roma people 

39 

 
 
being  registered.  However,  all  births  need  to  be  registered  immediately  after  children  are 
born,  regardless  of  their  parents’  status;  related  implementing  legislation  has  yet  to  be 
amended.  There  was  an  increase  in  the  number  of  Roma  students  benefiting  from 
scholarships, with  a total  of 2 220 Roma students  enrolled at  secondary level  in  2018/2019, 
compared  with  1 969  students  in  2017/2018.  However,  school  drop-out  rates  remain  high, 
especially for Roma girls. Segregation in education needs to be addressed. There is still a very 
low  coverage  of  Roma  children  in  preschool  education;  only  9%  of  Roma  children  attend 
kindergartens. The percentage of those completing tertiary education remains extremely low, 
namely  1%  compared  with  16%  of  the  non-Roma  population.  Transition  from  education  to 
the  labour  market  is  especially  challenging  for  young  Roma  people.  Local  mobile  teams 
continued  outreach  activities,  encouraging  unemployed  Roma  people  to  register  and 
participate  in  active  employment  measures.  However,  the  low  level  of  education  remains  a 
key  barrier  to  employment.  Informal  employment  is  decreasing  but  continues  to  be  high 
among  the  Roma  population  and  the  informality  gap  is  the  highest  in  the  Western  Balkans 
region. In addition, Roma are still underrepresented in the public administration.  

The  adoption  of  a  national  housing  strategy  is  pending.  Many  Roma  households  have  no 
access to electricity, drinking water or a connection to the sewage system. The legalisation of 
Roma  settlements  needs  to  be  tackled  as  a  matter  of  priority  as  required  by  the  Poznan 
declaration.  Roma  returnees  under  readmission  agreements  are  in  a  particularly  difficult 
situation  in  terms  of  social  and  economic  inclusion.  Mechanisms  for  addressing  their  needs 
has to be strengthened. CSOs and the Ombudsman have warned about the vulnerable situation 
of Roma living in informal settlements during the COVID-19 pandemic. In the area of health, 
there  is  a  serious  delay  in  establishing  the  legal  basis  for  health  mediators.  Although  child 
marriage  is  not  common  in  the  general  population,  almost  60%  of  girls  from  Roma 
settlements are married at an early age. Domestic violence  also often goes unreported. 

There  are  still  199 584  internally  displaced  persons  (IDPs)  in  Serbia,  of  whom  68 514 
remain  vulnerable  and  with  displacement-related  needs.  All  collective  centres  but  one  are 
closed.  The  law  on  permanent  and  temporary  residence  needs  to  be  consistently  applied  to 
allow Roma IDPs living in informal settlements to obtain registered residence and access to 
basic socio-economic rights. Roma IDPs remain the most marginalised and vulnerable. Serbia 
is engaged in the regional dialogue on ‘durable solutions for displaced persons from Kosovo’ 
(the ‘Skopje process’). 

2.2.2  Chapter 24: Justice, freedom and security  

The  EU  has  common  rules  for  border  control,  visas,  residence  and  work  permits,  external 
migration and asylum. Schengen cooperation entails the lifting of border controls inside the 
EU. EU Member States also cooperate with Serbia in the fight against organised crime and 
terrorism, and judicial, police and customs matters and are supported by the EU Justice and 
Home Affairs Agencies.  

Serbia  has  some  level  of  preparation  to  implement  the  EU  acquis  on  justice,  freedom  and 
security.  Some  progress  was  made  on  last  year’s  recommendations,  notably  as  regards  the 
adoption  of  the  strategy  and  action  plan  for  the  control  of  light  and  small-calibre  weapons. 
Serbia  also  continued  to  improve  its  international  police  cooperation.  Serbia  continued  to 
significantly contribute, as a transit country, to the management of the mixed migration flows 
towards the EU by playing an active and constructive role and cooperating effectively with its 
neighbours and EU Member States. It also continued to effectively implement the integrated 
border management strategy and its action plan.  

40 

 
 
Serbia has yet to establish a convincing track record of effective investigations, prosecutions 
and final convictions in serious and organised crime cases, and to further align with the EU 
visa policy.  

In the coming period, Serbia should in particular:  

  increase  the  financial  and  human  resources  capacity  of  the  Prosecutor’s  Office  for 

Organised Crime;   

  continue increasing border controls, especially border surveillance including identification 
and  registration  measures  in  full  respect  of  fundamental  rights,  and  increase  efforts  to 
detect and prevent smuggling of migrants;  

  refrain  from  further  diverging  from  the  EU  visa  policy  and  take  concrete  steps  to  fully 
align  with  it,  in  particular  with  regard  to  the  main  countries  of  origin  of  irregular 
migration to the EU.    

Serbia continued implementing the action plan which was adopted prior to the opening of the 
accession negotiations  on this chapter in  July 2016.  It adopted  a revised  action  plan in  July 
2020.  The  revised  plan  is  oriented  towards  meeting  the  interim  benchmarks  of  the  EU 
common position.  

Fight against organised crime  

Serbia has some level of preparation in the fight against organised crime. Limited progress 
was made in fulfilling last year’s recommendations, so that they remain largely valid. Serbia 
signed an inter-ministerial cooperation agreement on the establishment of a National Criminal 
Intelligence  System,  as  a  first  step  towards  improving  inter-agency  cooperation  in  the  fight 
against  organised  crime.  Overall,  Serbia  has  yet  to  establish  a  convincing  track  record  of 
effective  investigations,  prosecutions  and  final  convictions  in  serious  and  organised  crime 
cases, including financial investigations leading to a track record of freezing and confiscating 
criminal  assets.  The  number  of  final  convictions  for  serious  and  organised  crime  slightly 
increased  compared  with  2018.  It  is  necessary  to  switch  from  an  approach  on  cases  to  a 
strategy  against  organisations,  and  from  the  management  of  cases  of  low  or  medium 
importance  to  high  profile  cases  aiming  at  dismantling  big  and  internationally  spread 
organisations and seizing the assets. 

Serbia should increase its efforts in addressing the shortcomings and:    

  increase  the  track  record  of  investigation,  prosecution,  and  convictions  in  serious  and 

organised crime cases, including relevant cases of money laundering;   

  systematically  increase  the  freezing  and  confiscation  of  criminal  assets  based  on  a 
systematic tracking of money flows, in particular in cases of organised crime and money 
laundering;    

  ensure a  clear separation of the mandates  and regulations concerning the interception of 
communications for criminal investigation on the one hand, and for security purposes on 
the other, and put in place a robust oversight mechanism so as to avoid abuses.    

Institutional set-up and legal alignment  

There  were  40 119  police  officers  in  Serbia  in  April  2020,  equivalent  to  435  per  100 000 
inhabitants, compared with an EU average of 326 (Eurostat, 2017). The Prosecutor’s Office 
for  Organised  Crime  is  understaffed  with  only  21  prosecutors  in  charge  of  leading  both  the 
pre-investigation and investigation phase in the most complex crimes countrywide.  

41 

 
 
The  Ministry  of  the  Interior’s  financial  investigation  unit  is  designated  to  carry  out  the 
functions of Serbia’s Asset Recovery Office that are related to the exchange of police data in 
line with the EU acquis. The unit is still being set up in order to be fully operational and to 
cooperate  effectively  with  the  asset  recovery  offices  of  the  EU  Member  States.  This  will 
require  the  office’s  access  to  all  relevant  databases  in  Serbia,  which  Serbia  is  currently 
working  on.  Agreements,  in  particular  with  the  customs  and  tax  administrations  have  to  be 
concluded in this regard. 

The  establishment  of  a  single  centralised  criminal  intelligence  system,  advanced  further  in 
terms  of  technical  preparations.  An  inter-institutional  cooperation  agreement  was  signed  in 
September  2019.  This  system  will  serve  as  a  safe  and  unified  platform  for  managing  and 
exchanging  data  in  the  field  of  serious  and  organised  crime  between  law  enforcement  and 
judicial authorities and should improve inter-agency cooperation.  

The development of a new national serious and organised crime threat assessment (SOCTA) 
is in its final stage. Once adopted, Serbia should use it to set operational priorities for fighting 
organised crime. The Fugitive Active Search Team attained important results both in terms of 
quality of information shared and of fugitives arrested.  

The  capacity  of  the  internal  control  sector  of  the  Ministry  of  the  Interior  was  strengthened 
both in terms of equipment and human resources. However, the implementation of the anti-
corruption  measures,  including  integrity  tests,  has  yet  to  show  concrete  results.  The 
operational independence of the sector is still not fully guaranteed.  

The legislative reform concerning the human resources management system of the Ministry of 
the Interior and of the police was completed in June 2019. It provides for adequate staffing in 
a number of areas, in particular asset recovery and cybercrime. It is too early to assess its full 
impact.  The  reform  was  also  relevant  for  the  consistent  application  of  the  ‘intelligence-led 
policing  model’.  The  latest  amendments  to  the  law  on  police  raise  concerns  as  regards  the 
transparency  of  recruitment  procedures:  they  give  broader  discretionary  powers  to  the 
Minister of the Interior as compared with previous versions of the law.   

The  Law  on  police  still  needs  to  be  harmonised  with  the  criminal  procedure  code. 
Furthermore, the legal framework is still insufficient to guarantee the operational autonomy 
of  the  police  from  the  Ministry  of  the  Interior.  Thus,  during  the  pre-investigation  and 
investigation phase, the police continues to report to the Ministry of the Interior and not only 
to the prosecution office. Media relations, including press releases on ongoing operations, are 
still  managed  mainly  by  the  Ministry  of  the  Interior  and  not  by  the  prosecution  and/or  the 
police.    

The operational autonomy of the prosecution and police from the security services in criminal 
investigations  is  not  ensured  either  in  law  or  in  practice.  Interception  equipment  is  located 
only at the Security Intelligence Agency. Serbia is delayed in carrying out an analysis of the 
roles  and  practices  of  security  services  and  the  police  in  implementing  special  investigative 
measures, especially interception, in the pre-investigation phase in order to bring them in line 
with best European practices.   

Following  the  adoption  of  a  number  of  laws  on  the  fight  against  money  laundering  and 
terrorism financing, Serbia was removed, in June 2019, from the Financial Action Task Force 
(FATF)  list  of  countries  with  strategic  deficiencies  in  preventing  money  laundering  and 
terrorism financing. Serbia remains subject to MONEYVAL’s enhanced follow-up procedure 
until the country is placed back under regular follow up based on an assessment of continued 
progress.  It  was  further  upgraded  for  three  recommendations  in  the  December  2019 
MONEYVAL  report.  Serbia’s  legislation  was  further  aligned  with  the  recent  international 

42 

 
 
standards and EU acquis. In line with the national risk assessment action plan, in May 2019, 
the  Government  issued  guidelines  on  the  centralised  collection  of  data  regarding  cases  of 
money laundering and financing of terrorism. A new strategy on anti-money laundering and 
countering financing of terrorism for the period 2020-2024 was adopted in February 2020. In 
July  2020,  a  list  containing  the  names  of  CSOs  and  media  reportedly  subject  to  a  risk 
assessment  by  the  Administration  for  the  Prevention  of  Money  Laundering  (APML)  was 
leaked to the public. The applicable legal basis for the APML’s actions, and the compliance of 
the  APML  with  the  recommendations  of  the  FATF  will  need  to  be  clarified  (See  Political 
Criteria  –  Civil  Society  and  Chapter  4  –  Free  Movement  of  Capital).  The  capacities  of  the 
bodies that are obliged to report to  the APML on suspected cases of money laundering  and 
financing of terrorism was strengthened. The APML staff increased from 33 to 37 employees 
(full staffing being at 42).   

In June 2019, Serbia adopted a strategy for small arms and light weapons control for 2019–
2024, with its accompanying action plan. They are being implemented.  The strategy defines 
five strategic goals for improving the control of weapons. It also envisages the establishment 
of  an  expert  advisory  body  and  Firearms  Focal  Points.  In  December  2019,  a  team  for 
monitoring and exchanging all operational data regarding weapons was formed, and a national 
coordinator for the control of small arms and light weapons appointed.   

Implementation and enforcement capacity  

As  regards  the  track  record,  there  has  still  been  little  progress  in  dismantling  criminal 
networks  and  in  establishing  a  track  record  of  proactive  investigations,  prosecutions  and 
convictions in  the fight  against organised crime. New investigations into organised criminal 
groups were initiated in 2019 against 156 individuals (compared with 146 in 2018, and 191 in 
2017). Indictments were filed against 65 individuals. The number of convictions in organised 
crime cases is  slightly increasing:  convictions (first  instance) in  2019 were rendered against 
167  individuals  (out  of  which  42  were  plea  agreements  approved  by  the  courts)  compared 
with 155 in 2018.  

The use of plea agreements needs to be carefully balanced against the need for justice being 
seen to  be done  and avoiding any impression of  impunity in  cases of serious and organised 
crime.  Considering  that  the  prosecutor,  according  to  the  criminal  procedure  code,  has  a 
leading  role  in  the  pre-investigation  phase,  the  discrepancy  between  the  large  number  of 
arrests  carried  out  by  the  police,  notably  during  the  ‘mass  arrests’,  and  the  much  lower 
number of arrests confirmed by the prosecutor is a matter that needs to be looked at.    

for  serious  and 

There is well-established cooperation with  Interpol and Europol. The secure communication 
channel  SIENA  is  operational,  and  its  use  continuously  increased  since  its  introduction  and 
remained  on  a  high  level  from  2018  onwards.  The  rollout  of  SIENA  to  local  competent 
authorities is ongoing. In 2019, the number of new cases increased by 72% compared to 2018. 
In 2019, the number of messages increased by 16% compared with 2018. Serbia is speeding 
up  its  cooperation  with  Europol.  Serbia  has  further  strengthened  its  participation  in  the  EU 
policy  cycle 
(European 
multidisciplinary  platform  against  criminal  threats)  for  2018–2021.  In  2020,  Serbia  is 
participating in 15 analysis projects and has made notable advancement in EMPACT projects 
(out of 249 in total). This includes taking part in EMPACT priority areas such as ‘cannabis, 
cocaine  and  heroin’,  ‘child  sexual  exploitation’,  ‘firearms  trafficking’,  ‘organised  property 
crime’  and  ‘facilitation  of  illegal  immigration’.  Within  EMPACT,  Serbia  also  actively 
participates  in  joint  action  days  that  aim  to  counter  different  types  of  cross-border  crime. 
Serbia is  also  contributing with  information  to  the EU strategic reports.  In November 2019, 
Serbia ratified an amended agreement with Europol on operational and strategic cooperation, 

international  organised  crime/EMPACT 

43 

 
 
and on the deployment of a Europol liaison officer.  The accreditation of the liaison officer is 
still  pending  however  which  is  further  delaying  the  deployment.  The  level  of  cooperation 
through  the  working  arrangement  with  the  European  Union  Agency  for  Law  Enforcement 
Training  (CEPOL),  which  entered  into  force  in  April  2018,  is  satisfactory  although  the 
number of participants in residential activities decreased from 18 in 2018 to 3 in 2019 due to 
financial constraints. National contact points, lead managers and exchange coordinators have 
been appointed.  

As regards the fight against money laundering, the number of convictions over the reporting 
period increased compared with 2018. In 2019, there were convictions (first instance) against 
71 individuals, out of which 3 were for stand-alone cases of money laundering and 68 were 
for third-party money laundering, compared with convictions against six individuals in 2018. 
The  understanding  of  stand-alone  and  third-party  money  laundering  as  well  as  of 
independence  of  the  offence  of  money  laundering  from  a  predicate  crime  seems  to  have 
improved but needs to be increased further as results are not yet fully visible. More cases of 
stand-alone money laundering (based on inexplicable wealth) should be started up.  

The number of cases where seizure and confiscation of assets occurs is still limited, and the 
amounts  continue  to  be  low.  Measures  such  as  confiscating  the  equivalent  value  when  the 
proceeds of crime cannot be found in the perpetrator’s possession are rarely applied. Extended 
confiscation  is  not  applied  systematically,  partially  due  to  an  inconsistency  between  the 
criminal procedure code and the 2016 law on seizure and confiscation of proceeds of crime. 
Indirect  or  circumstantial  evidence,  especially  in  cases  of  inexplicable  wealth  is  rarely 
gathered  or  accepted  by  the  courts.  Serbia  needs  to  make  confiscation  of  criminal  assets  a 
strategic priority in the fight against organised crime, terrorism and high-level corruption, in 
order to take away the economic basis of criminal networks.    

The limited track record on confiscation of assets can also be explained by the fact that there 
are not enough financial investigations. Serbia needs to step up the application of the concept 
of financial investigations. Currently, financial investigations are mainly aimed at extended 
confiscation,  while  the  key  objective  is  to  identify,  document  and  disrupt  money  flows  that 
feed activities of criminal networks.   

Serbia adopted an action plan for 2019-2020 to implement to implement the strategy for the 
prevention  and  suppression  of  trafficking  in  human  beings  for  2017-2022.,  which  has  a 
focus on women and children.  Standard operating procedures for the treatment of victims of 
trafficking  in  human  beings  were  adopted  in  January  2019  and  are  currently  under  revision 
following  their  first  phase  of  implementation.  There  needs  to  be  further  cross-sectoral 
cooperation, coordination and a clearer mutual understanding of roles and responsibilities.  

A  centre  for  protection  of  victims  of  human  trafficking  is  operating  with  16  out  of  24 
envisaged staff. Its capacities need to be increased. A shelter for female victims was opened in 
February 2019. Although legally possible, compensation to victims is rarely granted. There is 
no scheme or fund for compensation. A significant fall in the numbers of formally identified 
victims was observed in 2019, though an official set of indicators to identify victims is still 
lacking. Twelve individuals were convicted (at first instance) for trafficking in human beings 
(with one of them convicted of having committed the offence within the context of organised 
crime).   

On trafficking in weapons, the number of convictions is low within the context of organised 
crime  (only  one  individual  convicted).  There  were  11  individuals  convicted  at  the  general 
competence (first instance). However, the Serbian criminal code has only a single article on 
weapons-related offences.  Hence, it is  not  possible to  distinguish  the number of convictions 

44 

 
 
related  to  trafficking  in  weapons  compared  with  the  ones  related  to  illegal  possession  and 
other less relevant conducts. 

Serbia also continues to participate in implementing the action plan on the illicit trafficking in 
firearms between the EU and the South East Region of Europe (2015-2019). While there was 
no destruction of weapons during 2018, a total of 15 430 small arms and light weapons, and 
54 111 pieces of ammunition were destroyed in December 2019.  

On  cybercrime,  convictions  were  rendered  against  49  individuals  (first  instance).  The 
operational  capacity  within  the  police  to  effectively  address  cybercrime  was  strengthened, 
including  through  the  establishment  of  special  investigative  units  which  deal  with  abuse  of 
credit  cards,  e-commerce  and  e-banking  and  suppress  illegal  and  harmful  content  on  the 
internet. Staff in the cybercrime department increased (from 15 to 22). Serbia’s cybercrime 
strategy, adopted in late 2018, is being implemented.  

Amendments  to  allow  for  an  urgent  procedure  within  the  law  on  witness  protection  were 
adopted. The witness protection unit of the Ministry of the Interior – covering organised crime 
and war crime cases - is operational. One psychologist and one social worker were recruited. 
Proactively  fighting  organised  crime  and  corruption  remains  critical  to  countering  criminal 
infiltration of the political, legal and economic systems. The criminal procedure code needs to 
be amended in order to further protect victims and witnesses. 

Cooperation in the field of drugs  

Institutional set-up and legal alignment  

Serbia  has  a  national  drugs  strategy  covering  2014–21.  In  April  2019,  Serbia  adopted 
amendments  to  the  law  on  substance  used  in  illicit  manufacturing  of  narcotic  drugs  and 
psychotropic substances. The National Monitoring Centre for Drugs, located in the Ministry 
of  Health,  manages  the  national  early  warning  system  (NEWS).  The  Serbian  NEWS  is 
operational  and  aligned  to  some  extent  with  European  standards.  The  first  Serbian  early 
warning  system  profile  was  published  in  July  2019  on  the  website  of  the  European 
Monitoring  Centre  for  Drugs  and  Drug  Addiction  (EMCDDA).  It  was  drafted  by  Serbian 
experts  who  were  supported  by  EMCDDA  staff,  and  presents  the  structure,  objectives  and 
working methods of the Serbian system. Serbia continued to report on first-time detections of 
new psychoactive substances on its territory during the first half of 2019.   

The responsibilities of the National Monitoring Centre for Drugs need to be better delineated 
from  other  state  bodies,  notably  as  regards  coordination  vis-à-vis  the  Office  for  Combating 
Drugs, an inter-ministerial coordination office. Both this office and the Serbian national drug 
observatory (NDO) have received the necessary staff increase. The NDO has achieved a good 
level  of  preparation  to  participate  as  a  full  member  of  the  EMCDDA  and  of  the  Reitox 
network (the European information network of drugs and drug addiction).  

Serbia  is  still  in  the  process  of  aligning  its  data  collection,  analysis  and  reporting  with 
EMCDDA requirements and methodologies. A working arrangement between the EMCDDA 
and the Office for Combatting Drugs, the Ministry of the Interior and the Ministry of Health 
was finalised for signature.     

Implementation and enforcement capacity  

In 2019, 995 individuals were convicted (at first instance) of illegal possession and trafficking 
of narcotics,  69 of whom  had committed the offence  within the context  of organised crime. 
During  the  second  half  of  2019,  a  total  of  4.5  tons  of  various  substances  (including  around 
109 kg of heroin) were confiscated compared with 2.7 tons, including 59 kg of heroin during 

45 

 
 
the  first  half  of  2019.  The  discrepancy  between  the  large  quantity  of  drugs  seized  and  the 
number of convictions is noteworthy.  

According  to  current  legislation,  it  is  not  possible  to  keep  only  a  small  sample  as  material 
evidence for court proceedings, instead, the entire seized quantity is required. An appropriate 
process for destroying drugs and drug precursors has yet to be set up. Overall, this policy area 
would benefit from a more proactive and comprehensive approach. 

Fight against terrorism  

Institutional set-up and legal alignment  

Since 2009, Serbia’s national security strategy recognises terrorism and violent extremism as 
one of the greatest threats to its security. A coordinator for the 2017 national strategy and its 
corresponding action plan on preventing and fighting terrorism  of 2017 was  re-appointed in 
June 2019. There is a need to set up a monitoring mechanism and ensure that there is regular 
reporting on the implementation of the strategy and the action plan. Also, the strategy has yet 
to  be  extended  in  order  to  cover  all  forms  of  radicalisation  and  violent  extremism.  In 
November  2019,  Serbia  and  the  EU  signed  an  arrangement  to  implement  the  joint  action 
plan  on  counter-terrorism  for  the  Western  Balkans,  covering  2019-2020.  It  outlines 
concrete actions to be taken. In the field of preventing and fighting radicalisation, all forms of 
radicalisation  and  violent  extremism,  irrespective  of  their  political,  religious  or  ethno-
nationalist  root  causes  still  need  to  be  included  in  the  national  strategy.  Serbia  has  not  yet 
appointed a single point of contact for the implementation of this arrangement.  

The  national  strategy  for  combating  violence  and  misconduct  at  sports  events  2013–2018 
expired without having been replaced. There is a further delay in setting up a single national 
database on terrorism-related information.  

In  May  2019,  Serbia  revised  its  criminal  code  criminalising  travel  for  the  purpose  of  the 
‘perpetration, planning, or preparation of, or participation in, terrorist acts or the providing or 
receiving of terrorist training’, as well as its financing in line with FATF standards.  

Implementation and enforcement capacity  

In 2019, there were no convictions for terrorist associations or financing of terrorism. There 
were also no convictions for recruiting and training in order to commit terrorist acts or public 
inciting to commit terrorist offences.  

The national coordination body for the prevention of money laundering and the financing of 
terrorism  set  up  a  platform  to  improve  the  dialogue  on  prevention  with  civil  society  and 
international stakeholders to raise awareness on the risk of terrorism financing. 

The  taskforce  on  combatting  terrorism  cooperates  and  exchanges  information  with  Europol, 
Interpol and its regional counterparts. Cooperation at regional level improved. In cooperation 
with  international  partners,  Serbia  thus  undertook  efforts  to  address  the  threat  of  Islamic 
extremism.  While  this  is  a  rather  limited  phenomenon  in  Serbia,  other  forms  of  violent 
extremism, including hooliganism, should be addressed.  

Serbia  is  actively  participating  in  the  revision  process  of  the  Integrative  Internal  Security 
Governance mechanism.    

Serbia  should  step  up  its  efforts  in  various  areas  and  aspects  of  radicalisation  and  violent 
extremism addressed in the counter-terrorism arrangement, including in football hooliganism. 
Furthermore,  research  on  radicalisation  and  violent  extremism  in  Serbia  is  still  scarce  and 
fragmented, and there is a need for baseline data in this area 

Legal and irregular migration  

46 

 
 
Institutional set-up and legal alignment  

Responsibilities for managing migration are shared between the Ministry of the Interior, the 
Commissariat  for  Refugees  and  Migration,  the  Ministry  for  Labour,  Employment,  Veteran 
and Social Affairs, the Ministries of Foreign Affairs, of Justice, of Defence and the Ministries 
of  Health  and  Education,  Science  and  Technological  Development.  Regarding  the  fight 
against  smuggling  and  trafficking  in  human  beings,  a  new  institutional  structure  was 
established in 2019 within the Criminal Police Directorate. This structure is led by the deputy 
prosecutor for organised crime and includes bodies such as the Security Intelligence Agency, 
which  were  previously  not  included.  As  part  of  organisational  changes  within  the  Border 
Police  Directorate,  a  new  department  for  suppressing  irregular  migration  within  the  service 
for  foreigners  was  established  to  strengthen  the  system  for  preventing  and  suppressing 
irregular  migration.  Within  that  service,  a  department  for  reception  and  accommodation  of 
foreigners  was  created.  Responsibilities  are  defined  in  the  existing  legal  framework  and 
coordination structures exist; however, coordination in practice could be further improved.  

The  EU-Serbia  readmission  agreement,  in  force  since  January  2008,  is  facilitated  by 
implementing  protocols  concluded  with  21  EU  Member  States.  Serbia  has  11  bilateral 
readmission  agreements,  including  with  Bosnia  and  Herzegovina,  North  Macedonia  and 
Montenegro. Negotiations to sign readmission agreements with Ukraine, Azerbaijan, Turkey, 
Georgia,  Belarus  and  Argentina  are  ongoing.  As  initiatives  to  conclude  readmission 
agreements with Afghanistan, Pakistan, Algeria, Morocco, Iran and Iraq that were launched in 
2017 remained unanswered, they were relaunched in 2019.  

The Government response plan to manage mixed migration for 2019 was implemented and 
the plan for 2020 was adopted by the government.   

Implementation and enforcement capacity  

The  Western  Balkan  migratory  route  continues  to  be  firmly  established  and  migrant 
smuggling networks remain very active as evidenced by reports of increased entries and exits 
as well as shorter stays of migrants in the reception centres. Most of the migrants currently in 
Serbia  are  place  in  temporary  accommodation  facilities  and  do  not  have  any  legal  status. 
During 2019 the number of migrants accommodated in Serbia fluctuated from over 4 000 in 
January, to 2 300 in the summer and reaching 4 500 by the end of 2019. The main countries of 
origin are Afghanistan, Syria, Pakistan, Iraq and Bangladesh. Large number of persons have 
also  been  registered  from  Morocco,  Algeria,  Palestine  and  Iran,  including  a  significant 
number of unaccompanied or separated children. 

Following the declaration of the state of  emergency, migrants,  refugees  and asylum seekers 
were  prohibited  from  leaving  the  reception  facilities  in  order  to  avoid  uncontrolled 
movements within the country. The number of persons present in these centres reached 9 000 
in April 2020, and consequently two new temporary facilities were opened as some facilities 
had reached 325% of their capacity. The Serbian authorities reacted with a set of measure to 
prevent the spread of COVID-19 in the reception facilities. A proactive communication policy 
was put in place aiming to contain and mitigate rising tensions due to prolonged confinement 
and overcrowded spaces. 

In  2019,  4 990  individuals  were  intercepted  at  the  border  (compared  with  3 648  in  2018). 
From January 2019 to beginning of November 2019, 136 criminal charges were filed against 
176 individuals suspected of smuggling of migrants. Some 67 individuals were convicted of 
illegal  crossing  of  state  borders  and  smuggling.  Efforts  to  combat  smuggling  need  to  be 
strengthened. 

47 

 
 
Serbia has started implementing the legislation on state border control, on foreigners and on 
asylum and temporary protection as well as the relevant implementing legislation, adopted in 
2018. Key staff have been trained. 

As regards the accommodation of migrants, the extension of the detention centre in Padinska 
Skela is still ongoing. It will provide additional 100 places and thus increase the capacity to 
150  places.  Mobile  centres  for  irregular  migrants  for  the  purposes  of  registration  and  short-
term  accommodation  are  operational.  While  being  faced  with  increased  mixed  migratory 
movements  and  a  large  number  of  arrivals,  Serbia  continued  to  make  substantial  efforts  to 
meet the essential needs of migrants passing through or remaining on its territory. Altogether, 
19  governmental  reception  facilities  (asylum  centres,  reception  and  transit  centres),  two  of 
which have been temporarily put on stand-by, can provide long-term accommodation for up 
to  6 000  people  and  temporary  shelter  for  around  1 000  people.  Children  receive  education 
through  their  inclusion  in  the  national  schooling  system.  Serbia  provides  a  considerable 
amount  of  health  services  to  migrants  through  the  public  health  system.  An  information 
management  system  for  regular  monitoring,  planning  and  managing  accommodation  and 
reception facilities in accordance with European standards for reception conditions is in place 
within the Commissariat for Refugees and Migration. The commissariat regularly reviews its 
contingency  plan.  The  overall  staffing  situation  in  the  area  of  migration  depends  on 
international funding.  

Serbia has put in place a programme for voluntary return support to foreigners for 2019-2021 
including  funding  for  information  and  identification  of  potential  returnees.  In  cooperation 
with International Organisation for Migration, the Commissariat for Refugees and Migration 
hold  more  than  180 information  sessions  in  asylum  and  reception  centres  in  2019.  In  2019, 
288 migrants applied for assisted voluntary return and 193 were returned to their country of 
origin, among them 103 to Iran, 23 to Algeria, 15 to Iraq, and 15 to Pakistan. The Ministry of 
the Interior is in charge of forced return and it returned 46 migrants to their country of origin 
in  2019.  The  lack  of  enforceable  bilateral  readmission  agreements  with  third  countries  is  a 
serious obstacle for Serbia to manage returns effectively, notably with the main countries of 
origin including Afghanistan, Pakistan, Iraq and Iran.  

The  implementation  of  the  EU-Serbia  readmission  agreement  is  satisfactory.  Serbia  has 
considerably improved its implementation of the third country national provision since 2018. 
8 375  persons  were  ordered  to  leave  in  2019  and  7 295  in  2018.  5 270  were  returned 
following an order to leave in 2019 (a return rate of 63%) and 5 895 in 2018 (80%).  

Asylum  

Institutional set-up and legal alignment  

The Asylum Office, the authority that decides on asylum claims at first instance, is a separate 
unit in the Ministry of the Interior’s Border Police Directorate. Appeals against its decisions 
can be submitted to the Asylum Commission and subsequently to the Administrative Court of 
Appeal  as  a  final  instance.  The  Asylum  Commission  is  composed  of  representatives  of 
different  line  ministries,  including  an  independent  expert  and  chaired  by  a  representative  of 
the  Ministry  of  the  Interior.  The  Commissariat  for  Refugees  and  Migration  is  the  state 
authority  responsible  for  receiving  and  accommodating  asylum  seekers,  managing  asylum 
centres and integrating people who were granted international protection.  

Serbia’s legal framework is largely aligned with the EU acquis. Serbia needs to further adapt 
its legislation notably as regards effective ‘access to the procedure’ (Article 36 of the law on 
asylum  and  temporary  protection),  ‘appeal  bodies’  (Article  21),  ‘rights  and  obligations  of 

48 

 
 
applicants/persons  under  international  protection’  (Articles  48-73),  ‘free  legal  aid’  (Article 
56), and ‘safe third country procedure’ (Article 45). 

Implementation and enforcement capacity  

In 2019, the number of asylum seekers remained approximately the same as in 2018. In 2019, 
out  of  12 930  individuals  who  expressed  an  intention  to  seek  asylum  (2018:  8 380),  174 
lodged an application (2018: 341). In 2019, 219 decisions (2018: 199) were made for a total 
of 287 asylum seekers (2018:  272). Some 17 asylum  seekers received refugee status  (2018: 
10), 17 received subsidiary protection (2018: 14) and 17 received a negative decision (2018: 
25).  Some  77  asylum  seekers  (2018:  45)  had  their  asylum  request  rejected  (i.e.  declared 
inadmissible).  In  130  cases  (2018:  128)  concerning  161  asylum  seekers  (2018:  178),  the 
procedure was discontinued because the applicant absconded. 

With  the  current  numbers  of  asylum  seekers  in  Serbia,  the  Asylum  Office  has  sufficient 
numbers  of  staff  to  process  all  asylum  requests.  Its  capacity  to  handle  cases  and  assess  the 
merits  of  applications  continues  to  improve,  including  information  regarding  the  country  of 
origin. Continuous standardised and sustainable training of the Asylum Office staff is needed. 
Certain  aspects  of  decision-making  improved,  such  as  recognising  child  specific  claims, 
claims  based  on  sexual  orientation  and  gender-based  persecution.  The  office  tried  to  hire 
translators for the envisaged translator positions. It was unsuccessful due to limited offering 
on the labour market.  In the medium term, the Ministry of the Interior will need to change its 
administrative procedures to enable outsourcing of the translation function. 

There is a single biometric database used by the police for identifying and registering asylum 
seekers. An electronic database with personal information of asylum seekers and information 
on  the  stage  of  the  asylum  proceedings  is  managed  by  the  Asylum  Office.  Plans  have  been 
made  to  improve  the  interconnection  of  these  databases  in  order  to  speed  up  the  process  of 
verification of identities. Local police stations sometimes lack capacity to facilitate efficient 
processing of applications. Preparations for connecting to the EU asylum fingerprint database 
(Eurodac) are in their initial phase. 

Overall, access  to  and provision of information  regarding the asylum procedure needs to  be 
improved  at  all  stages.  At  Belgrade  international  airport  access  to  information  and  legal 
counselling for asylum seekers needs to be improved. Transit procedures, as envisaged by the 
law on asylum, are not yet being implemented; adequate premises for accommodation at the 
airport are lacking. Training on the transit procedures was provided.  

Following the declaration of the state of emergency, a government decision was issued which 
confirmed the validity of legal stays of foreigners and their identity cards as well as those of 
asylum  seekers  for  the  duration  of  the  state  of  emergency,  while  registration  and  taking  of 
biometric data was suspended.  

A  total  of  2 186  unaccompanied  or  separated  children  (UASC)  were  accommodated  in 
Serbian centres in 2019, an increase of around 25% compared with 2018, while the duration 
of  the  stay  declined.  The  majority  (1 906)  were  accommodated  in  centres  managed  by  the 
Serbian Commissariat for Refugees and Migration while another 198 were accommodated in 
the three social welfare institutions dedicated to hosting UASC under the responsibility of the 
Ministry of Labour, Employment, Social and Veterans’ Affairs.  In addition, 82 UASC were 
accommodated  in  two  facilities  managed  by  non-governmental  organisations.  At  the  same 
time, the number UASC staying rough outside government  facilities increased in  2019. The 
accommodation capacity in government centres dedicated to hosting UASC within the social 
welfare  system  is  limited,  and  more  suitable  accommodation  for  UASC  with  individualised 
care is needed. 

49 

 
 
Programmes for social integration, access to accommodation, language learning and access to 
the  labour  market  for  people  granted  asylum  or  subsidiary  protection  are  in  place.  All 
individuals  who  applied  for  assistance  in  2019  received  it.  26  received  assistance  for 
accommodation, and 43 individuals attended Serbian language classes.  

Integration  bylaws  have  been  adopted  and  the  basic  legal  framework  for  integration  exists. 
However, major obstacles to integration remain. Implementing legislation in different sectors 
needs to be harmonised with the law on Asylum and Temporary Protection to provide those 
granted international protection with effective access to socio-economic rights. 

The  law  on  asylum  and  temporary  protection  provides  that  people  granted  international 
protection  have  the  right  to  a  travel  document,  but  in  practice  no  travel  document  has  been 
issued  so  far.  The  documents  provided  to  people  under  international  protection  need  to  be 
improved in order to facilitate access to their socio-economic rights. 

Serbia  signed  the  Global  Compact  for  Refugees  as  well  as  the  Global  Compact  for  Safe, 
Orderly  and  Regulated  Migration.  The  Ministry  of  the  Interior  and  the  Commissariat  for 
Refugees and Migration cooperate with the European Asylum Support Office (EASO) on the 
basis  of  comprehensive  roadmaps.  A  first  roadmap  was  implemented  from  2017-2019,  a 
second  one  is  being  finalised.  Serbia  was  granted  observer  status  in  the  reception  network 
organised by EASO. A European migration liaison officer, responsible for the entire region, 
operates from Belgrade. 

Visa policy  

The  visa  system  is  not  fully  aligned  with  the  EU  list  of  third  countries  whose  nationals  are 
visa  exempt  or  visa  required.  In  2019,  Serbia  further  aligned  with  the  EU  positive  list  by 
granting  visa  free  access  to  holders  of  ordinary  passports  from  Georgia,  St  Kitts  and  Nevis 
and the Republic of Palau. However, Serbia moved further away from alignment with the EU 
negative  list  by  granting  visa  free  access  to  holders  of  ordinary  passports  from  Armenia  in 
October 2019. The following countries are blocked from visa free entry to the Schengen area 
while  they  enjoy  visa  freedom  in  Serbia:  Armenia,  Azerbaijan,  Bahrain,  Belarus,  Bolivia, 
Burundi,  China,  Cuba,  Guinea  Bissau,  India,  Indonesia,  Jamaica,  Kyrgyzstan,  Kuwait, 
Kazakhstan, Mongolia, Oman, Qatar, Russia, Suriname, Tunisia and Turkey. 
The  European  Commission’s  third  report  under  the  visa  suspension  mechanism2  concluded 
that Serbia continues to meet the visa liberalisation benchmarks. However, in order to ensure 
a  well-managed  migration  and  security  environment,  Serbia  needs  to  refrain  from  further 
diverging from the EU common visa policy and take concrete steps to ensure full alignment 
with the EU visa policy, in particular with regard to the main countries of origin of irregular 
migration to the EU.  

Serbia’s visa issuing system is  partially in  line  with  the EU visa code.  It has  completed the 
interconnection  of  the  integrated  Serbian  visa  information  system  with  Serbia’s  diplomatic 
and  consular  missions  and  other  relevant  databases  is  complete  and  is  operational  in  all  91 
diplomatic/consular missions. The number of visas issued at borders remained low throughout 
2019 and were available only in exceptional humanitarian circumstances.   

Serbia  continued  to  implement  the  relevant  measures  to  prevent  the  abuse  of  the  visa-free 
system it has with the EU under the post-visa-liberalisation process.  

The  number  of  the  first  time  asylum  applications  in  the  EU  and  Schengen  asociated 
countries from the country was 4 060, which was a continuous decrease in comparison to 
the previous years (4 575 in 2018, 5 300 in 2017). 

2 COM(2020) 325 final 

50 

 
 
                                                           
No  progress  was  observed  regarding  improvement  of  the  system  dealing  with  the 
successful  reintegration  of  returnees,  especially  the  most  vulnerable  such  as  the  Roma 
representing a large number of returnees. Better communication and coordination is needed 
between  the  relevant  governments,  between  governments  and  local  authorities  and  with 
international organisations and NGOs active in the reintegration of returnees. 

Schengen and external borders  

Institutional set-up and legal alignment  

The Border police is a specialised civilian body and is part of the General Police Directorate 
within  the  Ministry  of  the  Interior.  Thanks  to  internal  restructuring  a  new  division  for 
integrated border management was established in the department for border checks as well as 
a  department  for  combatting  irregular  migration  and  a  department  for  reception  and 
accommodation of foreigners within the service for foreigners.  

Issues  related  to  the  state  borders  are  regulated  in  the  law  on  border  control.  In  2019,  the 
Ministry of the Interior adopted instructions on record keeping within the scope of the Border 
Police. A document on standardisation and management of border crossing points as well as 
staffing needs was prepared but still needs to be adopted.    

Several  agreements  were  signed  between  Serbia  and  Montenegro  regulating  the  opening  of 
border crossings and the conduct of border traffic. The agreements with Montenegro include 
arrangements  to  close  29  routes  between  Serbia  and  Montenegro.  Preparations  for  similar 
agreements with Bosnia and Herzegovina are ongoing. 

The agreement on cooperation in the field of integrated border management and the protocol 
on the exchange of data and information between the services involved in integrated border 
management (IBM) were signed.  

In  preparation  of  the  Schengen  action  plan,  relevant  assessments  and  gap  analyses  were 
carried out.  

Serbia still needs to create a single coordination centre for exchanging police information and 
start preparations for setting up a SIRENE (supplementary information request at the national 
entries) office.  

Implementation and enforcement capacity 

Serbia has made further progress in implementing its IBM strategy and its related action plan. 
The  government  provided  funding  for  additional  187  border  police  staff.  A  separate  budget 
line for funding of the implementation of the IBM strategy was introduced in the budget law. 
Amendments to the law on foreigners and the law on employment of foreigners were adopted 
which  facilitate  issuing  work  permits  for  foreign  nationals  holding  a  long-stay  visa  on  the 
basis  of  employment.  The  amendments  will  also  allow  speeding  up  the  procedures  for 
obtaining  a  temporary  residence  permit.  Regulations  on  entry  ban  and  control  of  foreigners 
moving through Serbia and on closer conditions for refusing a foreigner to enter Serbia were 
adopted as well as on issuing ID cards to foreigners.  

Joint controls were introduced at the border crossing point Preševo-Tabanovce at the border 
with North Macedonia. Equipment and infrastructure at border crossing points was improved 
in  Bajmok,  Gostun,  Kotroman,  Sot,  Nakovo  and  Morava  Airport.  Video  surveillance  was 
improved  at  some  at  border  crossing  points  and  traffic-monitoring  cameras  were  installed, 
which provide citizens with real time information on the situation at border crossings. 

An electronic information exchange platform to be used by all IBM agencies is being set up. 

51 

 
 
The  status  agreement  with  the  EU  for  the  deployment  of  the  European  Border  and  Coast 
Guard  (Frontex)  teams  with  executive  powers  was  signed  in  November  2019.  The  EU 
finalised  its  ratification  procedures.  Once  Serbia  has  finalised  its  procedures,  the  agreement 
will  enter  into  force.  Joint  preparations  for  the  operationalisation  of  this  agreement  are 
ongoing.  International  border  cooperation  was  further  strengthened  and  joint  patrols  are 
operating along the borders with Montenegro, Bulgaria, North Macedonia, Hungary, Bosnia 
and Herzegovina and Romania. The start of joint patrols with Croatia is still pending. There is 
regular cooperation and information exchange in joint contact centres. Serbia also participates 
in the Western Balkans risk analysis network led by Frontex. 

Shortly following the declaration of the state of emergency, all border crossings were closed 
for  international  road,  railway  or  waterway  traffic  (including  border  crossing  at  airports). 
Authorisation could be granted on an exceptional basis for humanitarian and national interest 
reasons. 

Interim IBM common crossing points with Kosovo continue to be operational. There was no 
progress in establishing the six permanent IBM common crossing points between Serbia and 
Kosovo  as  stipulated  in  the  IBM  agreement  in  the  context  of  the  EU-facilitated  Belgrade-
Pristina  Dialogue  (see  under  Normalisation  of  relations  between  Serbia  and  Kosovo). 
Additional  measures  need  to  be  taken  to  prevent  irregular  crossings  and  criminal  activities, 
including corruption.  

Judicial cooperation in civil, commercial and criminal matters 

A  cooperation  agreement  between  Eurojust  and  Serbia  entered  into  force  in  December 
2019.  The agreement is a positive step towards more efficient cooperation in the fight against 
organised crime through sharing of information including personal  data between Serbia and 
Eurojust.  Also,  following  the  agreement,  a  Serbian  liaison  prosecutor  took  office  on  10 
March. Regular cooperation with Eurojust continued through contact points in the Ministry of 
Justice  and  the  Republic  Public  Prosecutor’s  Office.  Serbia  also  took  part  in  three  joint 
investigation teams with Eurojust. Serbia is the most requested country in the region, and the 
fifth  most  requested  third  state  in  Eurojust’s  network.  Serbia  was  involved  in  41  cases 
(compared with 34 in 2018 and 28 in 2017).  

In 2019, an analysis for IT and statistical gaps and needs in the area of judicial cooperation in 
civil and criminal matters was finalised while the review of the administrative, budgetary and 
training has yet to be completed. Serbia started to work on aligning with the acquis on judicial 
cooperation while tangible progress has yet to be made. Serbia is in the process of becoming a 
party to the 2007 Hague Convention on Child Support.   

Judicial cooperation takes place mainly with EU Member States and within the region. During 
the  second  half  of  2019,  Serbia  had  3 028  new  incoming  requests  for  judicial  cooperation 
(both  civil  and  criminal)  and  sent  out  a  total  of  1 653   requests.  By  comparison,  during  the 
first half of 2019, Serbia had a total of 2 654 new incoming requests, and sent a total of 1 637 
requests. In the case of the former President of the State Union of Serbia and Montenegro who 
was  convicted  in  Montenegro  for  high-level  corruption  and  is  currently  staying  in  Serbia, 
Montenegro sent an official request to Serbia for his extradition in April 2019. Serbia has not 
yet  formally  responded  to  this  request.  It  needs  to  be  ensured  that  the  judgment  is  being 
enforced. 

According  to  the  Serbian  authorities,  Serbia  handled  2 970  incoming  judicial  cooperation 
requests (both civil and criminal) and 1 796 outgoing requests during the second half of 2019, 
compared  with  3 077  incoming  requests  during  the  first  half  of  2019  and  1 104  outgoing 
requests. Among those that Serbia dealt with, it replied positively to 2 514 incoming requests 

52 

 
 
and received positive response on 1 304 outgoing requests and refused 456 incoming requests 
and received negative response for 492 outgoing requests. At the end of December 2019, the 
pending  cases  (both  incoming  and  outgoing  requests)  remained  at  7 445  (compared  with 
7 168 at the end of June 2019). Serbia continued its regular workflow.    

3. 

FUNDAMENTALS FIRST: ECONOMIC DEVELOPMENT AND COMPETITIVENESS 

In  line  with  the  conclusions  of  the  European  Council  in  Copenhagen  in  June  1993,  EU 
accession  requires  the  existence  of  a  functioning  market  economy  and  the  capacity  to  cope 
with competitive pressure and market forces within the Union. 

Economic  governance  has  become  even  more  central  in  the  enlargement  process  in  recent 
years.  The  Commission’s  monitoring  takes  place  in  two  processes:  the  Economic  Reform 
Programme exercise and the below assessment of compliance with the economic criteria for 
accession.  Each  enlargement  country  prepares  an  Economic  Reform  Programme  (ERP) 
annually, setting out a medium-term macro-fiscal policy framework and a structural reform 
agenda aimed at ensuring competitiveness and inclusive growth. The ERPs are the basis for 
country-specific  policy  guidance  jointly  adopted  by  the  EU  and  the  Western  Balkans  and 
Turkey at ministerial level in May each year. 

3.1. 

The existence of a functioning market economy 

Serbia has made some progress and is moderately prepared/at a good level of preparation 
in developing a functioning market economy. Prior to the COVID-19 crisis, the pace of GDP 
growth  picked  up  as  domestic  demand,  including  investment,  strengthened  further.  External 
imbalances widened but their financing remained healthy thanks to record-high FDI inflows. 
Price  pressures  remained  subdued  and  inflation  expectations  contained.  Serbia's  success  in 
reducing the budgetary deficit and maintaining a prudent fiscal stance significantly improved 
debt  sustainability,  and  created  policy  space  for  a  sizeable  fiscal  stimulus  to  mitigate  the 

53 

Table :201720182019Serbia - Key economic figuresGDP per capita (% of EU-28 in PPS)1)39.238.039.041.0Real GDP growth 1.32.04.34.3Economic activity rate of the population aged 15-64 (%), total1)64.22)66.767.868.1      female56.42)59.660.661.3      male72.12)73.875.175.0Unemployment rate (%), total1)20.914.113.310.9      female21.914.814.211.5      male20.013.512.510.4Employment (annual growth %)2.22.81.42.4Nominal wages (annual growth %)5.14.04.310.5Consumer price index (annual growth %)5.23.12.01.8Exchange rate against EUR114.9121.4118.3117.9Current account balance (% of GDP)-6.5-5.2-4.8-6.9Net foreign direct investment, FDI (% of GDP)4.86.27.47.8General government balance (% of GDP)-4.51.11.5-0.2General government debt (% of GDP)60.657.953.752.0Notes: 1) Eurostat2) 2014-2016Source: national sources2011-16 average 
 
 
economic impact of the crisis. Banking sector stability was preserved and lending growth was 
robust. Labour market performance further improved, with the lowest unemployment rates in 
the  last  decade,  also  due  to  large-scale  emigration.  The  COVID-19  crisis  is  projected  to 
strongly  deteriorate  the  economic  outlook  in  2020,  in  particular  as  regards  GDP  growth, 
public finances and employment. 

There has been some progress in the reforms of the tax administration and in the privatisation 
of state-owned banks. However, other major structural  reforms of public administration and 
state-owned  enterprises  (SOEs)  continued  to  advance  slowly,  prolonging  long-standing 
inefficiencies.  There  has  been  no  progress  in  strengthening  the  fiscal  rules  to  anchor  fiscal 
policy.  The  state  retains  a  strong  footprint  in  the  economy  and  the  private  sector  is 
underdeveloped and hampered by weaknesses in the rule of law, in particular corruption and 
judicial inefficiency, and in the enforcement of fair competition. 

In order to improve the functioning of the market economy, Serbia should in particular: 

  mitigate  crisis-induced  economic  fall-outs  via  automatic  stabilisers  and  appropriate 
discretionary fiscal measures while making the budget composition more growth-friendly; 

  strengthen  fiscal  rules  by  making  them  more  credible  and  binding  and  capable  of 

anchoring fiscal policy; 

  take steps to advance the reform of public administration, including the public sector wage 

system; 

  increase  the  transparency  on  state-owned  enterprises’  fiscal  impact  and  improve  their 

governance including via further restructuring; 

  increase funding and the implementation of active labour market measures adjusted to the 

needs of the unemployed. 

Economic governance 

The  authorities  have  remained  committed  to  macroeconomic  stability  and  economic 
reforms, even though some structural reforms have stalled. Since July 2018, Serbia has a 
new non-disbursing policy coordination instrument in place with the International Monetary 
Fund  that  runs  until  January  2021.  The  policy  guidance  jointly  agreed  at  the  May  2019 
Economic and Financial Dialogue between the EU and the Western Balkans and Turkey has 
been  partially  implemented.  The  macroeconomic  policy  mix  has  been  appropriate,  and 
macroeconomic  and  fiscal  indicators  improved  until  the  outbreak  of  the  COVID-19  crisis. 
However, the record on implementing structural  reforms remains mixed. The efficiency and 
predictability of the institutional environment has yet to be ensured and does not sufficiently 
support  long-term  growth.  Weaknesses  remain  in  the  fiscal  governance  framework,  the 
business  environment,  public administration and tax administration, although some progress 
has been made in the latter area. There also remain weaknesses in the way the state intervenes 
and manages its  presence in  the economy, in  particular as regards delayed reforms  of state-
owned enterprises (SOEs). In response to the COVID-19 outbreak, both the government and 
the central bank reacted swiftly by taking a series of significant fiscal and monetary measures 
to mitigate the economic effects of the pandemic. 

Macroeconomic stability 

Economic  growth  has  been  robust. 
Following  moderate  growth  in  recent 
years, 
real  GDP  growth 
accelerated  significantly  to  4.3%  in 

annual 

54 

-4-202468201420152016201720182019Graph : Serbia -Real GDP growth and contributionsPriv. cons.Gov. cons.GFCFStocksNet exportsreal GDP growthSource: Macrobond, own calculations% y-o-y 
 
2018 and retained a solid pace in 2019 (4.3%) and in the first quarter of 2020 (5%). In 2019, 
robust domestic demand was the main  growth driver. Private consumption further increased 
its contribution to GDP growth, sustained by rising employment and real incomes. Investment 
activity was  also very strong, benefiting from increased capital spending by the government 
and  a  stream  of  foreign  direct  investments,  including  some  large  infrastructure  projects,  in 
particular  the  TurkStream  gas  pipeline.  Rising  domestic  demand  led  to  strong  growth  in 
imports, resulting in a negative contribution of net exports to growth for a third consecutive 
year. Despite the pace of growth picking up in recent years, the income gap with the EU has 
remained broadly unchanged over the last decade. Per capita GDP in purchasing power terms 
was 41% of the EU average in 2019 (compared to 40% in 2018 and 39% in 2009). As a result 
of the COVID-19 pandemic, GDP is expected to contract significantly in 2020. In addition to 
the  internal  impact  of  pandemic-related  restrictions  on  private  consumption  and  investment, 
the Serbian economy, due to its relatively high trade openness, is also expected to be strongly 
hit  by  the  COVID-19  crisis-induced  contraction  of  external  demand,  particularly  from  its 
main trading partners in the EU. 

While external imbalances continued to widen, their financing remains healthy. Driven 
by  a  growing  trade  deficit  in  goods,  the  current  account  deficit  has  broadly  doubled  as  a 
percentage of GDP since 2016, reaching 
close to 7% in 2019 after hitting around 
5%  of  GDP  in  2017  and  2018.  The 
growing 
in 
economy 
imports  of 
double-digit  growth 
goods;  however,  this  mostly  concerned 
intermediate 
reflecting 
expanding 
investment  and  exports. 
Export  performance  remained  robust  in 
2019.  Manufacturing  exports,  which 
constitute  the  bulk  of  all  foreign  sales, 
continued  to  expand,  while  exports  of 
agricultural  products  also  rebounded. 
The  current  account  deficit  was  fully  covered  by  record-high  net  inflows  of  foreign  direct 
investment  in  a  range  of  economic  sectors.  Official  foreign  exchange  reserves  have  been 
steadily increasing to around twice the level of short-term external debt, and covered around 6 
months  of  imports  of  goods  and  services,  providing  an  adequate  safeguard  against  adverse 
shocks. 

resulted 

goods, 

in 

Price  pressures  remain  subdued  and  inflation  expectations  contained.  Despite  robust 
economic growth and strong wage increases, inflation remained low in 2019, hovering in the 
lower half of the central bank’s tolerance band of 3% +/-1.5 percentage points, rather close to 
the lower limit towards the end of the  year. Price stability was supported by a continuously 
strong  dinar  exchange  rate.  After  a  seasonal  peak  in  spring  2019,  a  decelerating  increase  in 
food  prices  and  decreasing  energy  prices  helped  to  moderate  inflation  in  the  third  quarter, 
before picking up again  in  the fourth  quarter.  Low and stable  core inflation, which hovered 
around 1.3% for most of 2019, also attested to the absence of inflationary pressures. Monetary 
policy has cautiously supported economic activity: the key policy rate of the central bank was 
cut by 25 basis points three times in 2019 – in July, August and November – to 2.25%. The 
central bank continued its frequent interventions on the foreign exchange market, buying a net  
EUR 2.7 billion in 2019. In response to the COVID-19 crisis, the central bank has cut its key 
policy rate by  50 basis  points in  March 2020, 25 basis points in  April and another 25 basis 

55 

-12-9-6-3036920152016201720182019Graph : Serbia -Current account selected components and FDI Workers' Remittances balanceGoods and services trade balanceCurrent account balanceNet FDI% of GDPSource: IMF and National Bank of Serbia 
 
points in June 2020, bringing the rate to a record low level of 1.25%. It has also taken a series 
of additional measures to provide dinar and forex liquidity to the market. 

targeted 

After  a  major  fiscal  adjustment  implemented  in  previous  years,  the  fiscal  stance  has 
become broadly neutral. After 2 years of surpluses in 2017 and 2018, both the 2019 budget 
(as revised by an amending budget in October 2019) and the initial 2020 budget (adopted on 
28 November 2019) 
small 
deficits of 0.5% of GDP. In reaction to 
the COVID-19 pandemic, an amending 
budget  was  adopted  in  April  2020, 
projecting  a  2020  deficit  of  6.9%  of 
GDP.  Good  revenue  performance  has 
created  room 
to  unwind  previous 
pension  cuts,  implement  large  public 
wage increases  in 2 consecutive years, 
increase  capital  spending  and  reduce, 
albeit only marginally, labour taxation. 
increases  were, 
The  public  wage 
however,  expected  to  significantly  exceed  nominal  GDP  growth  even  before  the  crisis, 
contrary to earlier government commitments. Due to the use of fiscal space mostly for current 
spending,  the  expenditure  composition  remained  inadequate:  the  proportion  of  capital 
expenditure  remains  low  compared  to  public  infrastructure  needs,  in  particular  in 
environmental infrastructure. Overall, however, the track record of prudent fiscal policy has 
played  a  major  role  in  increasing  investor  and  consumer  confidence  in  the  economy, 
supporting  economic  growth,  and  significantly  reducing  government  debt.  Due  to  the 
COVID-19  crisis,  the  fiscal  position  will  profoundly  deteriorate  in  2020.  In  March,  the 
Government  adopted  a  sizeable  package  of  fiscal  measures  of  around  6%  of  GDP  of  direct 
budgetary impact and another 5% in liquidity-enhancing measures. The package will have an 
impact on both the revenue (deferred collection of personal income tax, social contributions, 
corporate  income  tax)  and  expenditure  side  (increased  salaries  in  the  health  sector,  one-off 
payment to pensioners, direct payment of salaries in micro and SMEs, one-off payment to all 
adult citizens). As a result the general government deficit is expected to increase strongly to 
around 7% of GDP in 2020. Government debt fell from a peak of over 70% of GDP in 2015 
to around 52% of GDP in 2019, bringing it closer to the ceiling of 45% of GDP laid down in 
the fiscal rules of the budget system law. As a result of the expected higher deficit and lower 
GDP induced by the COVID-19 crisis, debt is projected to increase to around 60% of GDP in 
2020. 

Public sector reforms have progressed unevenly, prolonging long-standing inefficiencies 
and  fiscal  governance  challenges.  Revenue  collection  has  surpassed  expectations  over  the 
last  2  years,  supported  also  by  steps  to  improve  tax  administration,  in  particular  by 
strengthening  the  Large  Taxpayer  Office  (for  the  biggest  taxpayers)  and  concentrating  core 
activities  in  fewer  sites.  Progress  in  addressing  weaknesses  in  budget  planning  and 
implementation  has  been  slow.  While  the  framework  to  control  general  government 
employment based on the law on the maximum number of public sector employees expired at 
the  end  of  2019,  continuing  with  the  hiring  freeze  mechanism  undermines  the  quality  of 
public service. The wage system reform has been postponed by another year. Substantial pay 
rises across all categories of public sector employees above the growth rate of nominal GDP 
have  reduced  the  fiscal  space  for  future  implementation  of  the  reform.  Ad  hoc  increases  in 
some  parts  of  the  public  sector  also  tend  to  undermine  the  viability  of  implementing  the 
reform in the future. A decree on capital investment management was adopted in July 2019 to 

56 

020406080-10-50510201420152016201720182019Graph : Serbia -Fiscal developmentsPrimary balance (lhs)Interest (lhs)GG balance (lhs)Public Debt (rhs)Source: National sources% ofGDP 
 
establish a single mechanism for national investment prioritisation and planning as of January 
2020; however, it introduces a large number of exemptions from the application of the rules, 
most  notably  the  projects  of  ‘special  importance  for  the  Republic  of  Serbia’,  which  are  put 
forward  based  on  a  government  decision.  The  method  for  deciding  which  projects  may  fall 
within  this  category  is  not  defined  in  the  decree.  Projects  financed  through  public-private 
partnerships  or  concessions  are  also  exempted  from  the  full  application  of  the  decree.  The 
system needs to be applied consistently to all projects regardless of the type of investment or 
the  source  of  financing,  including  government-to-government  projects  that  have  been  a 
recurring concern in terms of transparency, cost efficiency and conformity with EU standards. 
However,  preparation  of  the  corresponding  detailed  rulebook  and  IT  systems  may  lead  to 
delays in effective implementation.  

While  compliance  with  budgetary  legislative  procedures  has  improved,  fiscal  rules 
remained weak and were only partially complied with. The budget for 2020 was adopted 
broadly  in  line  with  the  normal  legislatory  procedure,  including  a  series  of  parliamentary 
debates  on  the  draft  budget.  The  Fiscal  Council  was  also  consulted  in  the  process.  After 
several  years  of  non-compliance  with  this  legal  obligation,  final  annual  budget  reports  for 
2002-2018  have  been  presented  to  Serbian  Parliament.  According  to  the  reports,  significant 
amounts of revenue and expenditure of the order of magnitude of 1% of GDP annually had 
not  been  covered  by  previous  regular  reporting,  and  amounts  of  around  2%  of  GDP  were 
spent  differently  from  what  had  been  planned  in  the  budget.  The  system  of  fiscal  rules 
remains  weak  as  it  is  not  sufficiently  binding  and  relevant  for  policy-making.  Work  on 
strengthening them has stalled, although it remains a stated short-term government priority. 

The  macroeconomic  policy  mix  has  remained  appropriate. 
It  helped  sustain 
macroeconomic stability and supported the resilience of economic activity. The prudent fiscal 
policy and cautiously supportive monetary policy helped contain the growing external risks, 
despite  still  widening  external  imbalances,  and  sustained  growth  of  private  and  public 
consumption and investment. As in previous years, the acceleration of economic reforms and 
their full implementation remain key to further strengthening the economy’s potential and to 
supporting  real  convergence  with  the  EU.  In  the  context  of  the  COVID-19  crisis,  the 
macroeconomic policy mix has had to adapt to the new circumstances with prompt reaction 
on both fiscal and monetary side. 

Functioning of product markets 

Business environment 

The business environment has been slowly improving despite a general slowdown in the 
reform  momentum.  Over  the  last  few  years,  Serbia  has  improved  its  standing  in  various 
international  business  rankings  mostly  due  to  regulatory  improvements,  for  example  in 
issuing  construction  permits,  registering  property,  making  it  easier  to  pay  tax,  and  better 
protecting minority investments. In 2019, 36,000 new legal entities were registered. While the 
overall  number  of  new  registrations  remained  largely  unchanged,  there  were  3.8%  more 
registrations  for  companies  but  1.2%  fewer  for  entrepreneurs  compared  with  2018.  Almost 
51,000  companies  were  deleted  from  the  register  (almost  double  that  in  2018)  due  to  the 
compulsory liquidation of companies that failed to fulfil their financial reporting obligations 
within a certain timeframe. The law on charges, adopted in December 2018, aimed to reduce 
complexity and uncertainty by consolidating all parafiscal charges and removing or merging 
some of them. However, the problem has  not  been addressed  enough as some charges have 
been  reintroduced  at  a  later  stage.  The  law  on  foreign  exchange  transactions  is  widely 
considered by the business community to be too restrictive in its design and unpredictable in 
its application.  

57 

 
 
The institutional and regulatory environment remains weak. While the number of urgent 
parliamentary  procedures  decreased,  business-related  laws  and  by-laws/decrees  are  still 
adopted  with  very  tight  consultation  deadlines,  leaving  insufficient  time  for  business  to 
contribute to policy preparation and to prepare for changes affecting their operations. While 
important  steps have been taken in introducing EU-compliant legislation,  particularly in the 
fields  of  public  procurement,  state  aid  rules  and  taxation,  implementation  of  these  policies 
remains  weak.  Delays 
the 
implementation of adopted laws. In general, contract enforcement is weak, and the courts that 
enforce  property  rights  remain  overburdened.  Moreover,  the  business  environment  remains 
hampered by red tape, political interference and limited public administration efficiency. Fair 
competition is negatively affected by the large informal economy. 

in  adopting  secondary 

legislation  continue 

to  hamper 

Some measures were taken to fight the informal economy. The authorities have established 
a working group chaired by the labour inspectorate to combat informal employment. Another 
tool is  a single information  system  for inspections (eInspector), which aims  to  ensure better 
coordination among various inspections, standardisation of their work, and better availability 
of data. 36 inspection services started using the tool in July 2019, with the remaining services 
expected to be included in the system by the end of the year. After the Financial Action Task 
Force  on  Money  Laundering  had  put  Serbia  on  the  list  of  jurisdictions  with  strategic 
deficiencies  in  early  2018,  the  authorities  addressed  the  identified  technical  shortcomings, 
which resulted in Serbia being taken off the list in June 2019. Further improvements in anti-
money laundering/combating the financing of terrorism are ongoing. Serbia ranked 91 out of 
180  countries  in  the  2019  corruption  perception  index  compiled  by  Transparency 
International, compared to 87 in 2018. 

State influence on product markets 

State  ownership  has  continued  to  gradually  decline,  but  state  presence  remains  large 
amid  persistent  governance  weaknesses.  The  financial  performance  of  SOEs  improved, 
helped  also  by  the  cyclical  economic  upswing.  However,  governance  of  these  enterprises 
remains  under  strong  political  influence.  This  includes  the  irregular  appointment  of  acting 
managers  for  extended  periods  instead  of  using  the  standard  nomination  process.  Overall, 
SOEs still account  for  almost a fifth  of value added and  formal employment  in  Serbia. The 
government  published  a  comprehensive  list  of  SOEs  in  October  2019.  While  the  state 
continues to withdraw from direct involvement in the economy in general, its presence is still 
strong. The share of administered prices remained broadly unchanged, at around 20% of the 
consumer basket. The new law on state aid control entered into force on 1 January 2020. The 
law  has  increased  the  operational  independence  of  the  Commission  for  State  Aid  Control, 
with a separate budget and autonomous spending that will allow it to considerably increase its 
administrative capacities and improve operations. Although the overall GDP share of state aid 
has decreased, positive steps that have been taken towards enforcing the state aid rules need to 
be reaffirmed with a stronger law implementation track record in the coming period. 

Privatisation and restructuring 

Privatisation of SOEs advanced, while restructuring progressed slowly. Since 2015, when 
the privatisation law was adopted, more than 310 SOEs, mostly with no employees or only a 
small  number,  have  been  put  into  bankruptcy  procedure,  increasing  the  total  number  of 
companies under bankruptcy procedure to 2,000. A smaller number of companies have been 
privatised,  and  non-EU  investors  acquired  some  of  the  largest  firms  in  mining,  metallurgy, 
and agriculture. The status of around 70 SOEs employing some 30,000 workers has yet to be 
addressed with either bankruptcy or privatisation.  

58 

 
 
Restructuring  of  key  utility  companies  is  still  incomplete.  The  financial  performance  of 
these  companies,  particularly  in  the  energy  sector,  has  improved  in  recent  years,  but  their 
restructuring  has  advanced  rather  slowly.  The  state-owned  power  utility  Elektroprivreda 
Srbije still has to fully address its corporate governance issues. While long overdue, a change 
in the legal status to a joint stock company is envisaged in 2020. The company also needs to 
reconsider  the  practice  of  giving  priority  to  investments  in  coal  and  instead  rather  invest  in 
environmental  protection  and  securing  new  production  capacities  from  renewable  sources, 
transition  from  coal-dominated  production.  The  financial 
taking 
consolidation  of  Srbijagas  remains  a  key  aspect  of  its  reorganisation  plan.  Government 
support for servicing Srbijagas debt is set to stop by the end of 2020. Serbia did not unbundle 
Srbijagas and provide non-discriminatory third-party access to its transmission system in line 
with the Third Energy Package. Finally, awareness regarding state aid rules still remains low 
among  the  aid-granting  authorities,  thus  advocacy  activities  should  be  continued  and 
intensified in 2020. 

into  account 

the 

Functioning of the financial market 

Financial stability 

In 2019, the financial sector’s performance and financial stability improved. Supported 
by  rising  economic  activity,  the  profitability  of  commercial  banks  remained  high.  Other 
indicators also point to strong performance in the banking system. Capital adequacy was well 
above the minimum set by the central bank. Liquidity, although declining, remained high. The 
profitability of the banking system remained broadly stable, recording only a slight decline in 
return on assets (1.8% at the end of 2019 vs 2.2% at the end of 2018) and in return on equity 
(9.8%  at  the  end  of  2019  compared  to  11.3%  at  the  end  of  2018).  Completion  of  the 
implementation of the resolution strategy for non-performing loans (NPLs) in 2015-2018 and 
the start of implementation of the 2018-2020 NPL resolution programme, focusing on limiting 
the rise of new NPLs, resulted in a further reduction of NPLs to 4.1% of total gross loans by 
February 2020. The authorities have started addressing the legacy NPLs in the portfolio of the 
Deposit  Insurance Agency. The government and the agency successfully completed the sale 
of the first portfolio of NPLs worth EUR 242 million at face value in June 2019. Preparation 
for  the  sale  of  the  second  portfolio  –  worth  around  EUR  1.9  billion  –  is  under  way.  The 
central bank and the government continued to implement their dinarisation strategy (updated 
in  December  2018)  in  order  to  address  the  persistently  high  degree  of  euroisation  in  the 
banking system. The implementation of the strategy for banks with state ownership continued. 
The  privatisation  of  Komercijalna  Banka  (the  third  largest  bank  by  assets  and  the  largest 
remaining  state-owned  bank)  was  completed  by  signing  an  agreement  on  sale  in  February 
2020  while  the  closure  of  the  transaction  is  expected  in  the  course  of  this  year.  The  state 
remains in control of key entities in the insurance sector.  

Access to finance 

Access  to  finance  improved.  Foreign-owned  banks  continued  to  dominate  the  financial 
system,  holding  around  three  quarters  of  banking  system  assets.  Favourable  financing 
conditions and higher economic activity have supported growth in lending. Credit expanded 
by  double  digits  for  both  corporates  and  households  (the  latter  slowed  down  in  Q-3), 
excluding  the  effects  from  exchange  rate  changes,  NPL  sales  and  write-offs.  Despite  brisk 
credit activity, the central bank estimated that the overall credit-to-GDP ratio is still below its 
long-term trend and, therefore, has kept the countercyclical capital buffer unchanged at 0%. 
However,  the  central  bank  introduced  new  measures,  including  a  gradual  shortening  of  the 
repayment period, to curb growing risks from excessive loan growth in some segments, such 
as cash loans for households with long maturities. As a reaction to the COVID-19 pandemic, 

59 

 
 
the  central  bank  introduced  in  spring  2020  a  moratorium  on  loan  repayments  and  secured 
additional  liquidity  for  banks  through  additional  EUR/RSD  swap  auctions  and  purchases  of 
government  securities.  Non-banking  financial  institutions  continue  to  be  largely  absent,  the 
legal framework for the leasing sector has still not been reformed, and there was no progress 
in  establishing  the  legal  framework  for  microfinance  institutions.  The  ad  hoc  and  urgent 
adoption  of  a  special  law  on  converting  mortgages  denominated  in  Swiss  francs  into  euro, 
which was adopted in April 2019, came at a significant cost that was shared between banks 
and the state budget. 

Functioning of the labour market 

The labour market has seen considerable improvements in recent years, but structural 
problems,  demographic  and  migration  challenges  remain.  Strong  economic  growth  was 
reflected in labour market indicators, which have reached record levels since the start of the 
(revised) labour force survey in  2014. Activity  rates and employment rates increased, while 
the unemployment rate (15-64) fell to 10.9 in the yearly average of 2019. Long-term (6.1%) 
as well as female (11.5%) and youth unemployment (27.5%) continued their downward trend. 
The corresponding activity rate (15-
64) increased to 68.1% in 2019. The 
proportion  of  young  people  in  the 
15-24 age group not in employment, 
education  or  training  fell  further  to 
15.3% 
in  2019.  The  share  of 
informal employment, two-thirds of 
which  was  in  agriculture,  fell  to 
18.2% 
employment. 
total 
However, the labour force may have 
peaked as the declining working age 
population  is  taking  its  toll  on 
labour  supply.  A  steady  population 
decline  of  0.5%  every  year,  along  with  large-scale  emigration  across  the  occupational 
spectrum  remains  a  key  medium-  to  long-term  challenge  for  economic  development.  In 
addition,  persistent  skills  mismatches  and  large  regional  disparities  have  continued  to  be  a 
major labour market issue. In February 2020, the government  adopted a 2021-2027 strategy 
on economic migrations aiming to prevent further emigration and encourage professions from 
the diaspora to return to the country. The government package aimed at mitigating effects of 
the  COVID-19  crisis  –  with  incentives  given  only  to  companies  that  do  not  reduce  their 
workforce by more than 10% of staff – may contribute to limit the increase in the number of 
unemployed in the immediate aftermath of the pandemic outbreak. 

of 

Real  wages have increased. The revival of economic activity  and tighter labour conditions 
pushed up real wages in 2019. The authorities have continued to reduce the overall tax wedge 
by abolishing the pension contribution paid by employers (0.5% of gross salary) as of January 
2020. However, the tax wedge is still disproportionally high for people with low salaries and 
is  therefore  an impediment  for the formalisation of labour.  In line with  expectations for the 
overall increase of wages, the government increased the minimum hourly wage by 11.1% in 
2020. Around 1 in 6 registered employees are paid the minimum wage.   

3.2. 

The capacity to cope with competitive pressure and market forces within the EU 

Serbia  has  made  some  progress  and  is  moderately  prepared  to  cope  with  competitive 
pressure and market forces within the EU. The structure of the economy improved further and 
economic integration with the EU remained high. However, despite some progress, the quality 

60 

4555657501020302013201420152016201720182019Graph : Serbia -Labour market trends(15-64 age group)Unemployment rate (lhs)Participation rate (rhs)Employment rate (rhs)Source: EUROSTAT and StatisticalOffice (SORS) 
 
and relevance of education and training does not fully meet labour market needs. Investment 
has continued to increase but, after years of underinvestment, remains insufficient to address 
serious  infrastructure  gaps.  Although  the  cost  of  borrowing  for  small  and  medium-sized 
enterprises (SMEs) has declined recently, they still face a number of challenges, including a 
volatile business environment and unfair competition.  

In order to improve competitiveness and long-term growth, Serbia should in particular: 

  further tailor education and training to labour market needs; 

  use the single mechanism for prioritising and monitoring all public investment regardless 
of the source of financing and apply EU standards to all projects including those based on 
intergovernmental agreements; 

  substantially  increase  investments  into  energy  efficiency  and  modernising  energy 
infrastructure duly supported by cost-covering tarification; complete unbundling Srbijagas 
and provide third-party access to gas infrastructure. 

Education and innovation 

Despite  some  progress,  skills  mismatches  in  Serbia  remain  high.  Public  spending  on 
education stood at around 3.1% of GDP in 2018, below the EU average of around 5%. The 
scores  achieved  by  Serbian  students  in  the  2018  Pisa  international  student  assessment  were 
below the OECD  average in  all areas, while  remaining broadly stable compared to  Serbia’s 
Pisa  results  in  2012.  Pre-primary  school  enrolment  remains  around  60%,  while  the 
compulsory six-month pre-school  programme is  almost  universal.  Enrolment  rates remained 
high in general in primary and lower secondary education, at some 95%, and at around 90% 
in  upper  secondary  level.  The  gross  enrolment  ratio  in  tertiary  education  also  increased  in 
recent  years  to  nearly  two  thirds  while  attainment  increased  to  32.8%  in  2018.  However, 
employers and recent  graduates signal  that the country’s  education institutions do not  equip 
students  with  key  transversal  skills,  such  as  problem-solving  and  decision-making.  The 
authorities  are  gradually  updating  pre-university  curricula  to  make  them  more  relevant  to 
labour  market  needs.  In  this  regard,  the  establishment  of  the  Agency  for  Qualifications  and 
Sector Skills Councils in 2018 was a positive stride towards reducing the mismatch between 
the  skills  required  in  the  labour  market  and  the  education  outcomes.  Systematic  teacher 
training to support the implementation of new curricula and the development of students’ key 
competencies  has  been  lacking.  Vocational  education  and  training  (VET)  qualifications 
remain  outdated.  Efforts  to  introduce  a  national  work-based  VET  model  still  lack  a  solid 
monitoring and feedback mechanism. The institutional framework to implement the national 
qualifications  framework  for  classifying  national  qualification  standards  needs  to  be 
strengthened, including functional and effective social partnerships. This framework is part of 
a progressive reform of the education system at all levels, including non-formal and informal 
learning. Serbia improved slightly in the Human Development Index, moving up two places 
in the ranking in 2018.  

R&D  spending  remains  low  at  around  0.9%  of  GDP.  Government  funding  is  stable  at 
around 0.4% of GDP, providing close to half of total R&D financing in 2018. The number of 
scientific  research  organisations  was  broadly  unchanged.  To  support  innovation,  Serbia 
established an innovation fund and introduced specialised instruments — collaborative grants 
for  joint  business-academia  projects  to  promote  and  support  collaboration  and  innovation 
vouchers. 4 years after a science and technology park was established in Belgrade, 3 more are 
being built in other cities. A smart specialisation strategy was adopted by Serbia in February 
2020.  The  country  is  now  working  on  the  Action  Plan  to  this  strategy  to  prepare  for  the 
implementation process. 

61 

 
 
Physical capital and quality of infrastructure 

Investment  is  increasing,  but  after  years  of  underinvestment  its  level  remains 
insufficient to effectively address infrastructure gaps.  The rise in both public and private 
investment  observed  in  recent  years  has  continued.  The  economy  is  attracting  significant 
foreign direct investment, well above the region’s average and gradually rising in the last few 
years. However, the share of total  investment  in the economy still stands at  or only slightly 
above  20%  of  GDP,  while  physical  infrastructure  needs  further  upgrading  and  expansion. 
Despite  the  increase  in  public  investments,  particularly  in  roads  and  railways,  which  also 
contributes to connectivity with neighbouring countries, their level still does not correspond to 
the needs of the economy. The fiscal space available from favourable revenue developments 
has mostly been used for increased current spending rather than for higher capital spending in 
physical infrastructure. 

The  institutional  framework  supporting  new  investment  is  weak.  The  ‘user  pays’ 
principle is not sufficiently applied when it comes to maintaining existing infrastructure and 
implementing new infrastructure investment plans. Although a new legislative framework for  
public  investment  management  was  put  in  place  in  July  2019,    issues  of  transparency, 
assessment and prioritisation of investment still need to be addressed properly. A preliminary 
assessment  shows  that  the  new  arrangement  allows  too  many  exceptions  to  the  rule,  as 
demonstrated also by the law on special proceedures for linear infrastructure projects adopted 
in  February  2020  that  allows  linear  infrastructure  projects  of  ‘special  importance  for  the 
Republic of Serbia’ to be exempted from public procurement rules. Public procurement rules 
are not always fully complied with, nor are they always fully compatible with EU standards, 
particularly when it comes to big infrastructure projects financed by loans provided by third 
countires  and  as  a  result  of  these  agreements,  directly  assigned  to  companies  from  these 
countries, without complying with the requirements of transparency, equal treatment or non-
discrimination. It currently appears highly unlikely that the new legal arrangement will duly 
address the gap in transparency and sound public financial management. 

largely 

The  energy  sector  remains 
inefficient  and  highly  polluting.  Serbia’s 
competitiveness  continues  to  be  negatively  impacted  by  an  inefficient  and  highly-polluting 
energy sector that also lacks proper regulation. The energy infrastructure is largely outdated, 
and  the energy supply is mostly based on heavily-polluting lignite. Low electricity tariffs and 
inadequate financial management do not allow for the necessary investment in infrastructure, 
and were only increased slightly in 2019. Most energy companies are state-owned and have 
still not been reformed.  

Digitalisation continues to top the list of government priorities. Sub-legal  acts  related to 
the  e-government  law  still  need  to  be  completed  to  ensure  its  full  implementation.  The 
strategic framework for e-government also still needs to be adopted. The government’s main 
objective in this area is to improve the quality of public services by ensuring interoperability, 
efficient coordination, project management and legal certainty over e-government use and the 
use of open data.  An upgraded e-government  national  portal  is  set  to  be rolled out  in  2020, 
serving  as  a  one-stop  shop  for  e-government  services  and  as  a  central  point  of  access  for 
business  and  citizens  alike.  Some  progress  has  already  been  made  on  public  access  to 
institutional  data  thanks  to  the  National  Open  Data  portal  (making  data  available  from  22 
public  institutions  so  far).  The  robust  growth  of  the  information  and  communication  sector 
continued, accounting for a 5% share of the economy  and a 5% share of total  exports, with 
exports  for  2018  valued  at  EUR  1.1  billion.  Statistics  on  the  use  of  computers,  broadband 
penetration and e-commerce further improved in 2019. 

62 

 
 
Sectoral and enterprise structure 

Construction  and  some  services  have  increased  their  weight  in  the  economy.  Services 
dominate  the  economy,  providing  more  than  60%  of  total  value  added.  Sectors  like 
transportation, retail trade, and information and communication – the last increasingly geared 
towards  exports  –  benefited  from  the  revival  of  domestic  economic  activity  and  the  steady 
expansion of foreign sales to increase their economic weight. Reflecting the new investment 
cycle, the construction sector, which had a share of only 3% in 2013, has gradually recovered, 
with  its  output  rising  to  4.5%  of  GDP  in  2018.  It  is  now  one  of  the  main  sectors  driving 
economic growth. The agricultural sector rebounded strongly in 2018 after the impact of the 
drought in 2017, while its economic weight has been on a downward trend over the last few 
years in line with the growing shares of manufacturing and services. The weight of industry 
declined  slightly  in  part  due  to  a  drop  in  the  energy  sector.  Changes  in  the  structure  of 
employment  reflected  these  trends:  the  share  of  agricultural  employment  has  fallen  steadily 
from nearly 20% in 2014 to around 15% in 2018, while there have been increases in the share 
of employment in the industry and service sectors. 

Small  and  medium-sized  enterprises  (SMEs)  are  the  backbone  of  the  economy.  They 
provide 60% of total employment and turnover in the economy, and nearly half of the value 
added. SMEs are particularly active in construction, accommodation and food services, retail, 
and  real  estate.  The  authorities  are  implementing  several  programmes  to  support  SME 
development,  focusing  on  boosting  innovation,  finance,  and  internationalisation.  SMEs 
receive up to 70% of new corporate loans. Their cost of borrowing has declined recently, but 
is  still  above  that  of  large  companies.  SMEs  however  still  face  a  number  of  challenges, 
including a volatile business  environment  and lack of non-bank financing. SMEs have been 
particularly  affected  by  the  COVID-19  outbreak  –  the  March  assistance  package  is 
particularly  aimed  at  supporting  them  through  deferral  of  tax  and  social  contributions 
payment,  but  also  payment  of minimum  salaries to  their employees, and access  to  loans for 
liquidity.   

Economic integration with the EU and price competitiveness 

Economic integration with the EU remained high. The EU remains Serbia’s biggest trading 
and investment partner, accounting for almost two thirds of its total trade and more than half 
of  net  foreign  direct  investment  inflows  in  2019.  Total  bilateral  trade  between  the  EU  and 
Serbia grew by 4.8% between 2018 and 2019 to a total of EUR 26.5 billion. Over the last 10 
years,  bilateral  trade  has  grown  by  an  impressive  156%  and  the  EU  remains  Serbia’s  first 
trading  partner  accounting  for  63%  of  total  trade  (68%  of  total  exports  and  59%  of  total 
imports  of  goods).  Thanks  to  a  greater  increase  in  Serbia’s  exports  to  the  EU  than  imports 
from the EU in 2019, trade is almost in balance, with the EU showing only a slight surplus of 
EUR 116 million.  After the EU, Serbia’s main trade partners are Russia (7% of total trade), 
China  (6%)  and  Bosnia  and  Herzegovina  (5%).  Trade  with  the  signatories  of  the  Central 
European Free Trade Agreement represented 16.1% of total exports and 3.8% of total imports 
in 2019. The introduction of a 100% tariff by Kosovo in late 2018 on imports from Serbia and 
Bosnia and Herzegovina continued to affect Serbia’s goods exports, with estimated losses of 
around EUR 400 million , representing around 1% of GDP per year. These tariffs were lifted 
by Kosovo as of 1 April 2020 and further non-tariff obstacles for imports from Serbia were 
lifted  in  early  June.  There  are  still  significant  bottlenecks  at  border  crossing  points  with 
neighbouring EU countries; these hamper further trade with the EU and transport facilitation 
with the EU. 

63 

 
 
In 2019, trade openness continued to  rise, exceeding EUR 40 billion or 112% of GDP, up 
from  92%  of  GDP  in  2014.  Both  the  dinar  nominal  and  the  real  effective  exchange  rates 
remained broadly stable in 2019. 

4. 

GOOD NEIGHBOURLY RELATIONS AND REGIONAL COOPERATION  

Good  neighbourly  relations  and  regional  cooperation  form  an  essential  part  of  Serbia’s 
European  integration  process  and  contribute  to  stability,  reconciliation  and  a  climate 
conducive to addressing open bilateral issues and the legacies of the past. Serbia maintained 
its engagement in a number of regional cooperation initiatives, such as the Central European 
Free Trade Agreement (CEFTA), Energy Community, Transport Community, the South-East 
European Cooperation Process (SEECP) and the Regional Cooperation Council.3 The seat of 
the Transport Community Treaty was inaugurated in Belgrade in September 2019. The new 
youth representative of Serbia to the Governing Board of Regional Youth Cooperation Office 
(RYCO) was elected in September 2019. Serbia donated 420 000 EUR to RYCO on top of its 
regular yearly contribution. 

During the COVID-19  crisis,  inclusive regional  cooperation has proven to be essential. The 
establishment of green lanes within the region has proven the capacity of the region to address 
common  challenges  swiftly  and  efficiently.  Inclusive  regional  organisations  –  the  Regional 
Cooperation  Council,  the  Transport  Community  Treaty,  and  the  CEFTA  –  have  been 
instrumental  in  responding  to  the  COVID-19  crisis.  These  achievements  need  to  be  turned 
into sustainable improvements.  

Serbia demonstrated its commitments to  provide a renewed impetus  to  regional  cooperation 
and  enhanced  regional  ownership  at  the  summits  in  Novi  Sad,  Ohrid  and  Tirana.  It  is 
important that regional initiatives include all partners in the Western Balkans and are based on 
EU  rules,  building  on  commitments  previously  taken  in  the  framework  of  CEFTA,  the 
Regional  Economic  Area  (REA)  or  the  Transport  Community  Treaty.  Many  commitments 
and  decisions  have  already  been  taken  in  these  regional  frameworks  and  they  need  to  be 
swiftly  implemented.  Building  on  the  results  of  the  previous  summits  with  the  region,  the 
Western  Balkans  summit  in  Poznan  under  the  Berlin  Process  focussed  on  strengthening 
regional  cooperation  in  the  fields  of  economy  and  trade,  the  digital  agenda,  connectivity, 
security, fight against corruption, promoting reconciliation and youth. The summit endorsed a 
number of achievements in these fields, in particular the Clean Energy Transition Declaration 

3 Serbia also participates in the Adriatic-Ionian Initiative, the European Union Macro-Regional Strategies for the 
Danube  Region,  the  Adriatic  and  Ionian  Region,  the  Coalition  the  Commission  Tasked  with  Establishing  the 
Facts about All Victims of War Crimes and Other Serious Human Rights Violations Committed on the Territory 
of  the  Former  Yugoslavia  for  Reconciliation  Commission  (RECOM),  the  Regional  School  of  Public 
Administration (ReSPA) and the Brdo-Brijuni process. 

64 

0204060201120122013201420152016201720182019Graph : Serbia -Exports of goodsEUCEFTAOtherSource: WiiW% ofGDP0204060201120122013201420152016201720182019Graph : Serbia -Imports of goodsEUCEFTAOtherSource: WiiW% ofGDP 
 
 
 
                                                           
signed  in  Podgorica,  the  Regional  Roaming  Agreement  signed  in  Belgrade,  a  substantial 
connectivity package and the Roma Integration Declaration. It was also the occasion to kick-
start the preparation of a Green Agenda for the Western Balkans.   

At  the  Zagreb  Summit  on  6  May  2020,  EU  and  Western  Balkans  leaders  agreed  that 
deepening regional economic integration has to be a prominent part of recovery efforts of the 
Western  Balkans.  To  do  so,  Serbia  needs  to  play  a  constructive  role  in  building  a  common 
regional market, which will be critical in increasing the attractiveness and competitiveness of 
the region. It will help Serbia to speed up the recovery from the aftermath of the pandemic – 
notably  to  attract  investors  looking  for  diversification  of  supply  and  shorter  value  chains. 
Such  a  common  regional  market  has  to  be  inclusive,  based  on  EU  rules  and  built  on  the 
achievements of the regional economic area multiannual action plan. 

There  are  no  outstanding  issues  concerning  Serbia’s  respect  for  the  Dayton/Paris  Peace 
Agreement. Serbia continues to support Bosnia and Herzegovina’s territorial integrity and its 
path to joining the EU. As envisaged by the Dayton agreement, Serbia continues to develop 
special relations with the Republika Srpska entity and it publicly promotes such relations.   

Along  with  Bosnia  and  Herzegovina,  Croatia  and  Montenegro,  Serbia  has  continued  to 
cooperate  closely  under  the  Sarajevo  Declaration  Process,  which  aims  to  find  sustainable 
solutions for some 74 000 people who became refugees or displaced persons as a result of the 
armed conflicts in former Yugoslavia in the 1990s. In Serbia, some progress has been made 
on implementing the upgraded plan for 6 289 housing units worth EUR 105 million funded by 
the  EU;  so  far  1 100  housing  solutions  have  been  delivered.    The  implementation  is  behind 
schedule  but  picking  up.  The  issue  of  refugees’  pensions  between  Croatia  and  Serbia 
continues to be unresolved. 

The  unresolved  fate  of  missing  persons  who  disappeared  in  relation  to  the  conflicts  of  the 
1990s  remains  a  key  issue  to  be  solved  in  the  Western  Balkans.  In  April  2020,  a  total  of 
10 027 people are still missing as a result of the conflicts in the region. Of these, 6 409 cases 
are  related  to  the  conflict  in  Bosnia  and  Herzegovina,  1 974  to  the  conflict  in  Croatia  and 
1 644 to the conflict in Kosovo. 51 cases of missing persons related to the conflict in Croatia 
were  resolved  in  2019.  The  political  stalemate  between  Belgrade  and  Pristina  continued  to 
affect  the  progress  on  the  resolution  of  missing  cases  related  to  the  Kosovo  conflict.  Only 
eight  cases  related  to  the  conflict  in  Kosovo  were  resolved  in  2019.  One  session  of  the 
Working Group on Missing Persons between Belgrade and Pristina was held in 2019, and one 
in 2020. No official meetings between the relevant Serbian and Croatian authorities were held 
since May 2019. Serbia needs to increase its efforts in working with its neighbours in tracing 
and identifying the fate of missing persons or their remains, including through swift exchange 
of information. The families of missing persons also still need more comprehensive support 
than currently available and the capacity of the state mechanism for searching missing persons 
should be further strengthened. The drafting of a law on missing persons has been initiated in 
2019. It should aim to strengthen support to the families of missing persons, and to reinforce 
the capacity of the state mechanisms for the search of missing persons. 

Serbia remained overall committed to bilateral relations with other enlargement countries and 
neighbouring  EU  Member  States.  Bilateral  conventions  on  regional  cooperation  (under 
Article 15 of the SAA) are in force with Montenegro and North Macedonia. The convention 
with  Bosnia  and  Herzegovina  was  signed  in  January  2018  and  is  yet  to  be  ratified.  Serbia 
initiated  the  process  of  concluding  a  convention  with  Albania.  In  May  2019,  a  trilateral 
protocol establishing a demarcation border point  shared by Serbia, Bosnia and Herzegovina 
and Montenegro was signed in Sarajevo. 

65 

 
 
Relations with Albania are good. Leaders of both countries regularly meet in the framework 
of  regional  and  international  events.  The  two  countries  signed  a  Memorandum  of 
Understanding in the field of pre-university education. 

Relations with  Bosnia  and Herzegovina  are stable. The  first  visit  of the  new  Presidency of 
Bosnia  and  Herzegovina  to  Serbia  took  place  in  October  2019,  and  a  trilateral  summit 
between Turkey, Serbia, and Bosnia and Herzegovina was held. The two countries also signed 
a  cooperation  agreement  on  the  construction  of  the  Sarajevo-Belgrade  highway.  Serbia  and 
Bosnia and Herzegovina need to reach an agreement on two river dams on the Drina river and 
a portion of the Belgrade-Bar railway which crosses into Bosnia and Herzegovina’s territory.  

Relations  with  North  Macedonia  are  good.  In  August  2019,  Prime  Ministers  Zaev  and 
Brnabić  inaugurated  the  Preševo-Tabanovce  joint  border  crossing.  President  Pendarovski 
visited Belgrade in November 2019. 

Relations  with  Montenegro  were  marked  by  tensions  during  the  reporting  period.  Protests 
were  organised  in  Belgrade  in  reaction  to  Montenegro’s  adoption  in  December  2019  of  the 
law on the freedom of religion or belief and the legal status of religious communities. At the 
Digital Summit in Belgrade in April 2019, the two countries signed several joint agreements. 
There have been no developments on issues related to citizenship rights in the two countries. 

Relations  with  Turkey  intensified.  President  Erdoğan  visited  Serbia  in  October  2019.  A 
trilateral summit between Bosnia and Herzegovina, Serbia and Turkey took place in October, 
during which an official ceremony for the start of construction work of the Sarajevo-Belgrade 
Highway was held. In January 2020, TurkStream – the new pipeline from Russia to Turkey – 
was opened in Istanbul in the presence of President Vučić. 

Relations with neighbouring EU Member States Hungary, Romania and Bulgaria remained 
good. Relations with Croatia continued to be mixed.  

5. 

NORMALISATION OF RELATIONS BETWEEN SERBIA AND KOSOVO 

In  the  framework  of  the  EU-facilitated  dialogue, the  efforts  aiming  at  concluding  a  fully 
comprehensive  and  legally  binding  agreement  between  Serbia  and  Kosovo  had  been 
interrupted  since  November  2018  following  the  decision  by  the  Kosovo  government  to 
impose customs tariffs of 100% on imported goods from Serbia and Bosnia and Herzegovina, 
citing political and trade related grievances.  

The decision taken by the Kosovo government to lift these tariffs and all reciprocity measures 
by early June 2020 led to a restoration of the flow of goods with both Serbia and Bosnia and 
Herzegovina.    In  April  2020,  the  Council  appointed  Miroslav  Lajčák  as  EU  Special 
Representative for the Belgrade-Pristina Dialogue and other Western Balkan regional issues, 
to  assist  High-Representative/Vice-President  Josep  Borrell 
the 
normalisation talks.  

forward 

taking 

in 

When  it  comes  to  the  state  of  play  on  implementation  of  past  agreement:  the  full 
implementation  of  the  justice  agreement  drawn  from  the  April  2013  ‘First  agreement  of 
principles governing the normalisation of relations’ continues to require further efforts by 
judicial authorities in Pristina.  

Implementation of the 25 August 2015 Agreements has overall remained slow. No progress 
has been made on the Association/Community of Serb majority municipalities and Kosovo 
has  yet  to  engage  constructively  in  its  establishment.  Regarding  the  energy  agreement 
between Serbia and Kosovo, a new Connection Agreement between the Kosovo transmission 
system  operator  and  the  European  Network  of  Transmission  System  Operators  (ENTSO-E) 
has  been  approved.  Serbia  has  not  yet  filed  for  the  licensing  of  Elektrosever,  but  has 

66 

 
 
submitted a new business  registration application that includes  additional business  activities 
that it wishes to undertake in Kosovo. The works on the Mitrovica bridge are completed and 
the bridge should be opened to vehicle traffic without further delay or obstructions.  

As regards the Technical Dialogue Agreements (2011-2012), some are not or only partially 
being implemented. Both sides need to remain committed to the continued implementation of 
the agreement on representation and participation of Kosovo in regional forums. The issues 
of implementation of the cadastre and university diplomas recognition agreements are yet to 
be solved as are the licence plate related elements of the agreement on freedom of movement. 
Serbia  has  yet  to  address  the  issue  of  re-located  Serbian  administrative  customs  structures 
with  Kosovo  denomination  that  operate  from  within  Serbia,  and  to  cease  the  issuance  of 
documentation  or  affixing  of  stamps  with  denomination  that  contravenes  the  related 
agreement.  On  IBM,  the  interim  common  crossing  points  with  Kosovo  continue  to  be 
operational.  There  has  been  no  progress  in  establishing  the  six  permanent  IBM  common 
crossing points  between  Serbia and Kosovo as stipulated in  the IBM agreement.  Serbia did 
not engage constructively in starting the establishment of these crossing points on the Serbian 
side (in Jarinje, Mucibabe, and Konculj). This led to a suspension of EU funds in July 2018. 
Additional  measures  need  to  be  taken  by  Serbia  to  close  illegal  crossings.  The  parties  have 
continued  to  largely  comply  with  their  respective  obligations  under  the  telecoms  agreement 
during the reporting period. 

Requests for mutual legal assistance are in principle being processed.   

Overall,  Serbia  has  remained  engaged  in  the  dialogue.  The  Serbian  government  needs  to 
continue  to  uphold  its  commitments  and  continue  implementation  of  past  Dialogue 
agreements.  Serbia  showed  restraint  in  its  response  to  the  customs  tariffs,  up  until  their 
suppression. However, following the Kosovo government’s decision to lift the tariffs, Serbia 
needs  to  make  further  substantial  efforts  and  contribute,  in  particular  in  its  international 
relations,  to  the  establishment  of  a  conducive  environment  to  the  conclusion  of  a  legally 
binding  agreement  with  Kosovo.  The  EU-facilitated  dialogue  resumed  with  a  virtual  high-
level meeting on 12 July 2020, followed by high-level meetings in Brussels on 16 July and 7 
September.  A  number  of  expert  level  meetings  took  place  in  Brussels.  Reaching  a 
comprehensive, legally binding agreement is urgent and crucial so that Serbia and Kosovo can 
advance on their respective European paths.  

6. 

ABILITY TO ASSUME THE OBLIGATIONS OF MEMBERSHIP 

6.1. 

Chapter 1: Free movement of goods 

The free movement of goods ensures that many products can be traded freely across the EU 
based on common rules and procedures. Where products are governed by national rules, the 
principle of the free movement of goods prevents these creating unjustified barriers to trade. 

Serbia  is  moderately  prepared  in  the  area  of  free  movement  of  goods.  Limited  progress 
was  made  on  implementing  recommendations  of  the  previous  report,  in  particular  with  the 
removal  of  ‘transitional  provisions’  regarding  the  Serbian  conformity  mark  from  certain 
legislation and with  preparatory work for an  action plan to  ensure compliance with  Articles 
34-36 TFEU and on the strategy and action plan for the alignment with the EU acquis in this 
chapter.  Serbia  has  also  taken  steps  for  the  partial  alignment  of  the  legal  framework  on 
product safety with the EU acquis. Recommendations from last year’s report remain valid. 

In the coming year, Serbia should in particular: 

  ensure  that  all  ‘transitional  provisions’  in  regard  to  the  use  of  the  Serbian  Conformity 

mark and Certificate of Conformity after accession to the EU are removed; 

67 

 
 
  adopt  an  action  plan  to  ensure  compliance  with  Articles  34-36  of  the  Treaty  on  the 
Functioning  of  the  European  Union  (TFEU)  and  adopt  a  strategy  and  action  plan  for 
implementing the EU acquis in this chapter for both the sectoral (‘new approach’ and ‘old 
approach’) and horizontal legislation and relevant organisations; 

  provide  adequate  administrative,  financial  and  human  resources’  capacities  for  market 
surveillance, metrology and for the Agency for the Homologation of Vehicles, as well as 
for  the  implementation  of  the  European  Regulation  on  Registration,  Evaluation, 
Authorisation and Restriction of Chemicals (REACH). 

General principles 

On the general principles, Serbia has yet to adopt a strategy and an action plan to implement 
the EU acquis in this chapter for both the sectoral (‘new approach’ and ‘old approach’) and 
horizontal  legislation  as  well  as  for  relevant  organisations.  All  ‘transitional  provisions’  in 
regard to the use of the Serbian conformity mark and certificate of conformity after accession 
to the EU need to be removed. Serbia’s legal framework for product safety (see Chapter 28 - 
Consumer  and  health  protection)  has  been  partly  aligned  to  the  EU  acquis  thanks  to  the 
adoption  of  the  amended  law  on  general  product  safety  in  October  2019.  As  a  response  to 
COVID-19, upon the joint initiative of the Permanent Secretariat of the Transport Community 
and the CEFTA Secretariat, Serbia, along with the other governments in the Western Balkans, 
has successfully implemented measures to facilitate the transport and trade of essential goods 
within the region. 

Non-harmonised area 

On  horizontal  measures,  the  law  on  technical  requirements  for  products  and  conformity 
assessment is not yet aligned to the EU acquis with regard to the functioning of the product 
contact point (PCP). An action plan ensuring compliance with Articles 34-36 of the Treaty 
on the Functioning of the European Union (TFEU) has yet to be adopted. 

Harmonised area: Quality infrastructure 

Administrative  structures  dealing  with  the  legal  bases  for,  and  implementation  of,  technical 
regulations,  accreditation,  metrology  and  conformity  assessment  were  upgraded  but 
nevertheless require further strengthening. 

On  standardisation,  in  the  fourth  quarter  of  2019  the  Serbian  Institute  for  Standardisation 
adopted 99.72% of the European Committee for Standardisation (CEN) standards, 97.68% of 
the  European  Committee  for  Electrotechnical  Standardisation  (CENELEC)  standards  and 
86.68%  of  the  European  Telecommunications  Standards  Institute  (ETSI)  standards.  It  has 
been a member of both CEN and CENELEC since 2018. 

The number of designated conformity assessment bodies in Serbia is currently 57 and out of 
these,  a  total  of  26  are  designated  and  registered  for  carrying  out  conformity  assessment 
according to various pieces of technical legislation. The obligations regarding certificates for 
conformity, which had constituted a technical barrier to trade concerning the European Radio 
equipment  and  Telecommunications  Terminal  Equipment  (RTTE)  Directive,  were  removed 
during the reporting period, except those on drones and on transmitters for radio or television 
broadcasting.  This  will 
import  procedures  and  effective 
implementation of the presumption of conformity for goods imported from the EU. However, 
there is still a small number of certificates of conformity applying to imports of other type of 
goods,  such  as  certain  types  of  cement  or  hot-rolled  steel  rods.  The  number  of  accredited 
conformity  assessment  bodies  in  Serbia  totalled  718.  During  the  reporting  period, 

facilitate  straightforward 

68 

 
 
accreditation  was  awarded  to  130  control  bodies,  22  testing  laboratories,  one  medical 
laboratory,  three  calibration  laboratories,  one  proficiency  testing  provider,  two  certification 
bodies for management systems, two certification bodies for certification of products and one 
certification  body  for  certification  of  persons,  while  the  accreditation  was  revoked  for  four 
testing laboratories, one certification body for certification of products and one control body.    

Concerning  accreditation,  the  amended  law  on  accreditation  has  yet  to  be  adopted.  The 
Accreditation  Body  of  Serbia,  which  is  a  full  member  of  European  Cooperation  for 
Accreditation, prepared and is starting to implement the national plan for the accreditation of 
conformity assessment bodies, in line with the 2015-2020 strategy for improvement of quality 
infrastructure. The ATS focused in the reporting period on testing and calibration laboratories, 
inspection bodies and certification bodies for products. Activities related to the accreditation 
of  inspection/certification  bodies  for  inspection/certification  of  playgrounds  and  equipment 
according to the national regulation on children’s playgrounds’ safety have been completed, 
along  with  the  ones  related  to  the  accreditation  of  laboratories  in  the  field  of  soil  testing  in 
accordance  with  national  regulation.  The  activities  aiming  to  expand  the  ATS  areas  of 
operation  were  undertaken  on  accreditation  of  testing  laboratories/inspection/certification 
bodies  in  the  field  covered  by  the  law  on  construction  products,  and  accreditation  of 
certification bodies in the field covered by law on medical devices. 

In the field of metrology, the Directorate for Measures and Precious Metals as the National 
Metrology  Body  became  a  full  member  of  Eurachem  in  May  2019.  The  amended  law  on 
metrology  has  yet  to  be  adopted.  The  number  of  internationally  recognised  standards  for 
calibration and measurement stands at 38. 

The  financial  and  human  resources’  capacities  for  market  surveillance  require  additional 
strengthening.  In 2019, the market surveillance authorities carried out 7 465 inspections and 
ordered  486  corrective  and  restrictive  measures  for  105 435  non-compliant  or  unsafe 
products. There is no data available on relevant initiated or resolved judiciary proceedings. 

Harmonised area: sectoral legislation 

On ‘new and global  approach’ product legislation, pieces of implementing legislation on 
toy  safety,  low  voltage  and  electromagnetic  compatibility  were  adopted  in  2019.  Several 
pieces of implementing legislation were adopted during the reporting period to further ensure 
alignment in the area of construction products.  

Old approach legislation 

In  the  area  of  the  ‘old  approach  product  legislation’,  the  implementing  legislation  on 
labelling  of  textile  products  was  adopted  in  December  2019,  designed  to  ensure  further 
alignment with the EU acquis. Implementing legislation designed to ensure further alignment 
on  classification,  labelling  and  packaging  (CLP)  entered  into  force  as  of  March  2020.  No 
further  progress  was  made  regarding  the  EU  Regulation  on  the  Registration,  Evaluation, 
Authorisation  and  Restriction  of  Chemicals  (REACH).  The  administrative  and  inspection 
capacity  for  implementing  the  REACH,  the  CLP  regulation,  and  the  legislation  on  vehicle 
homologation, needs to be strengthened. 

On procedural measures, in April 2019, Serbia adopted and implemented a national control 
list  for  dual-use  goods  designed  to  be  aligned  with  the  EU  acquis.  Furthermore,  in  May 
2019, it adopted the national list of arms and military equipment in order to be aligned with 
the  EU’s  Common  Military  List.  In  June  2019,  Serbia  adopted  the  2019-2024  strategy  for 
control of small and light arms, aiming to align with relevant international and EU acquis on 
control,  acquisition  and  possession  of  weapons.  The  amended  law  on  import  and  export  of 
dual-use goods was adopted in October 2019, abolishing the import controls in line with the 

69 

 
 
EU  acquis.  There  was  no  progress  during  the  reporting  period  on  the  adoption  of  the  EU 
acquis regarding the return of  cultural objects unlawfully removed from the territory of an 
EU Member State.  

6.2. 

Chapter 2: Freedom of movement for workers 

Citizens of one Member  State  have  the right to  work in another Member State and  must  be 
given the same working and social conditions as other workers.  

Serbia  is  moderately  prepared  in  the  area  of  freedom  of  movement  for  workers.  Some 
progress  was  made,  in  particular  in  relation  to  last  year’s  recommendation  to  carry  out 
preparations for joining the European network of employment services (EURES).  

In the coming year, Serbia should in particular: 

  continue  to  enhance  cooperation  with  EU  Member  States  on  coordination  of  social 

security systems. 

Amendments to the legislation on access to the labour market adopted in April 2019, and in 
force  since  January  2020,  further  streamlined  the  procedure  for  issuing  work  permits. 
Foreigners  can  now  obtain  a  work  permit  provided  that  they  possess  a  temporary  or 
permanent  residence  permit.  Procedures  for  issuing  work  permits  to  EU  citizens,  who  are 
currently covered by rules for third country nationals, need to be further simplified. In 2019, 
more than 13 800 work permits were issued, of which more than 3 000 went to EU citizens.   

Serbia  has  carried  out  some  preparations  for  joining  EURES.  In  particular,  the  National 
Employment  Service  (NES)  strengthened  its  migration  service  centres  and  EURES-related 
training sessions were organised. Serbia upgraded the information system in NES, which will 
secure Serbia's access to EURES immediately upon accession to the EU.    

Regarding the coordination of social security systems, Serbia has continued to take part in 
ongoing  negotiations  on  agreements  on  electronic  exchange  of  social  security  data  with 
Germany, Austria, Italy, Hungary and Poland, and launched an initiative to open negotiations 
with  Bulgaria.  Electronic  exchange  of  social  security  data  is  operational  with  Slovenia, 
Croatia,  North  Macedonia  and  Montenegro.  Overall,  Serbia  has  bilateral  agreements  with 
social security institutions in 19 EU Member States. Legislative and technical conditions for 
social security institutions to cooperate with their counterparts in EU Member States should 
be further improved. 

There has been no progress on the European Health Insurance Card. 

6.3. 

Chapter 3: Right of establishment and freedom to provide services  

EU natural and legal persons have the right to establish themselves in any Member State and 
to provide cross-border services. For certain regulated professions, there are rules on mutual 
recognition of qualifications. Postal services are gradually being opened up to competition. 

Serbia  is  moderately  prepared  in  these  areas.  Good  progress  was  made  on  the  right  of 
establishment and freedom to provide services with the adoption of the law on postal services 
the  recognition  of  professional  qualifications.  The  Commission 
and 
recommendations from 2019 were thus partially implemented.  

law  on 

the 

In the coming year, Serbia should in particular:  

  adopt  the  horizontal  law  on  services,  complete  harmonisation  of  sectoral  laws  with  the 
horizontal law and the EU acquis and establish a point of single contact via a portal that 

70 

 
 
offers  online  information  to  service  providers,  including  all  relevant  administrative 
procedures;  

  finalise the adoption of secondary legislation in the area of postal services and increase the 

capacity of the postal services inspectorate;  

  continue harmonisation on mutual recognition of professional qualifications. 

There were no developments on the  right of establishment. No point of single contact  has 
been  established  –  its  establishment  and  functioning  are  dependent  on  the  adoption  of  the 
horizontal law on services. 

In  the  area  of  freedom  to  provide  cross-border  services,  the  horizontal  law  on  services, 
aiming to align with the EU services directive, is still in the process of government adoption. 
Serbia  has  continued  with  the  screening  and  alignment  of  sectoral  laws  with  the  draft 
horizontal law and the EU services directive. 

A new law on postal services entered into force in November 2019. It replaced the postal act 
and is aligned with the provisions of the first and second postal services directives and partly 
with  the  third  postal  services  directive.  The  law  contains  provisions  regarding  access  to  the 
network,  tariff  principles  for  universal  postal  service,  cost  accounting  and  accounting 
separation, and mediation in out-of-court dispute resolution between users and operators and 
further liberalisation of the postal market. However, the law is not aligned with the regulation 
on cross-border parcel delivery services yet. The adoption of the related secondary legislation 
remains to be completed, with the new postal law stipulating the deadline of November 2020. 
Two pieces of secondary legislation regulating the licencing process were adopted in March 
2020. 

In  the  field  of  mutual  recognition  of  professional  qualifications,  the  Serbian  law  on  the 
recognition of professional qualification, adopted in September 2019, and the amendments to 
the law on planning and construction are under review to ensure their full alignment with EU 
acquis.  

6.4. 

Chapter 4: Free movement of capital  

 In  the  EU,  capital  and  investments  must  be  able  to  move  without  restriction  and  there  are 
common rules for cross-border payments. Banks and other economic operators apply certain 
rules to support the fight against money laundering and terrorist financing. 

Serbia  remains  moderately  prepared  on  free  movement  of  capital.  Limited  progress  was 
made  on  meeting  last  year’s  recommendations.  However,  Serbia  took  positive  steps  on 
legislative  alignment  in  the  fight  against  money  laundering  and  counter  terrorism  financing 
and was subsequently removed from the Financial Action Task Force (FATF) grey list. The 
Commission recommendations from 2019 were only partially met and thus remain valid. 

In the coming year Serbia should in particular: 

  liberalise  capital  movements  in  line  with  its  obligations  under  the  Stabilisation  and 

Association Agreement (SAA); 

  demonstrate  through  a  track  record,  increasing  effectiveness  in  monitoring,  supervision, 

financial intelligence, investigation and reporting. 

As regards  capital  movements and payments,  there have been no developments  regarding 
the agricultural law. The law still does not provide EU citizens and Serbian citizens with the 
same conditions in terms of acquiring agricultural land and is, as such, not compliant with the 
Stabilisation  and  Association  Agreement  (SAA).  Restrictions  on  capital  movements, 

71 

 
 
remaining  for  reasons  of  public  policy  and  macro-financial  stability,  must  be  justified, 
targeted  and  proportionate.  In  February  2020,  amendments  were  made  to  the  decision  on 
terms  and  conditions  under  which  residents  may  hold  foreign  exchange  accounts  in  bank 
accounts  abroad.  The  amendments  widen  the  conditions  under  which  this  is  acceptable,  as 
they  include  residents  involved  in  transport  of  energy,  subject  to  approval  by  the  National 
Bank of Serbia. 

On  payment  systems,  the  amendments  to  the  law  on  payment  services  and  the  four 
subsequently  adopted pieces of secondary legislation, which aimed to  further align with  the 
EU directive on payment accounts, entered into force in March 2019. In 2019, nearly seven 
million  transactions  at  a  value  of  RSD  90.6  billion  were  processed  through  the  instant 
payment system introduced in October 2018, which allows payment service providers to carry 
out instant fund transfers. 

The  limit  for  interchange  fees  was  lowered  to  0.2%  for  debit  cards  and  to  0.3%  for  credit 
cards.  This  was  introduced  under  the  Law  on  Multilateral  Interchange  Fees  and  Special 
Operating Rules for Card-Based Payment Transactions, adopted in June 2018 (See Chapter 8 
– Competition policy).  

Following  the  adoption  of  a  number  of  laws  on  the  fight  against  money  laundering  and 
terrorism financing, Serbia was removed from the Financial Action Task Force (FATF) list 
of  countries  with  strategic  deficiencies  in  preventing  money  laundering  and  terrorism 
financing  in  June  2019.  Serbia  remains  subject  to  MONEYVAL’s  enhanced  follow-up 
procedure until the country is placed back under regular follow up based on an assessment of 
the progress made. Serbia was further upgraded for three recommendations in the December 
2019  MONEYVAL  report.  Serbia’s  legislation  was  further  aligned  with  the  recent 
international  standards  and  the  EU  acquis.  In  line  with  the  national  risk  assessment  action 
plan,  the  government,  in  May  2019,  issued  guidelines  on  the  centralised  collection  of  data 
regarding  cases  of  money  laundering  and  financing  of  terrorism.  A  new  strategy  on  anti-
money  laundering  and  countering  financing  of  terrorism  for  the  period  2020-2024  was 
adopted  in  February  2020.  In  July  2020,  a  list  containing  the  names  of  CSOs  and  media 
reportedly  subject  to  a  risk  assessment  by  the  Administration  for  the  Prevention  of  Money 
Laundering  (APML)  was  leaked  to  the  public.  The  applicable  legal  basis  for  the  APML’s 
actions, and the compliance of the APML with the recommendations of the FATF will need to 
be  clarified  (See  Political  Criteria  –  Civil  Society  and  Chapter  24  –  Justice,  Freedom  and 
Security). 

In  December  2019,  Serbia  took  additional  steps  to  align  further  with  the  EU  acquis  by 
amending  the  law  on  the  prevention  of  money  laundering  and  financing  of  terrorism.  The 
amendments  address  issues  related  to  the  implementation  of  FATF’s  and  MONEYVAL’s 
recommendations from 2016 and include a definition of virtual currencies. Two registers were 
subsequently  established  on  1  June  2020  compiling  data  on  safe-deposit  boxes  and  foreign 
transactions.  Both  registers  aim  to  align  with  requirements  under  the  5th  anti-money 
laundering  directive.  As  a  preventive  measure,  amendments  were  also  made  to  the  law  on 
games  of  chance  in  February  2020  and  to  the  law  on  real  estate  and  trade  and  lease  in 
December 2019.  

The administrative capacity of the APML increased, from  33 to  37 employees (full staffing 
being at 42). In 2019, 2 267 suspicious transactions were reported. The highest number came 
from  payment  institutions,  with  891  reports  on  suspicious  clients.  The  APML  submitted 
information  on 298 reports to  relevant  enforcement  authorities. Altogether 158  reports were 
submitted to the prosecution services.  

72 

 
 
6.5. 

Chapter 5: Public procurement 

EU  rules  ensure  that  the  public  procurement  of  goods,  services  and  works  in  any  Member 
State  is  transparent  and  open  to  all  EU  companies  on  the  basis  of  non-discrimination  and 
equal treatment. 

Serbia is moderately prepared on public procurement. Limited progress was made during 
the  reporting  period.  The  new  law  on  public  procurement  is  an  important  positive  step 
towards  alignment.  However,  the  recently  adopted  law  on  special  procedures  for  linear 
infrastructure projects will likely seriously undermine the effective implementation of the law 
on public procurement as it  allows for the  exemption  of projects  “of  special importance for 
the  Republic  of  Serbia” 
from  public  procurement  procedures.  The  Commission 
recommendations from 2019 were only partially implemented and remain valid. 

In the coming year, Serbia should in particular: 

  ensure  further,  full  alignment  with  the  2014  EU  directives  on  public  procurement,  in 
particular  by  adopting  amendments  to  the  law  on  public-private  partnerships  and 
concessions and by ensuring that projects financed from public funds are subject to public 
procurement procedures; 

  ensure  that  intergovernmental  agreements  concluded  with  third  countries  do  not  unduly 
restrict competition and comply with the basic principles of public procurement, such as 
transparency, equal treatment and non-discrimination, in line with the national legislation 
and the EU acquis; 

  continue to strengthen the capacity of the Public Procurement Office, the Commission for 
Public-Private Partnerships and Concessions, the Republic Commission for the Protection 
of Rights in Public Procedures, and the Administrative court. 

Institutional set-up and legal alignment 

treatment,  non-discrimination, 

transparency,  and  competition 

Serbia’s legal and institutional frameworks on public procurement are broadly aligned with 
the EU acquis. A new law on public procurement aiming to further align with the 2014 EU 
directives  on  public  procurement,  on  utilities,  and  on  remedies  was  adopted  in  December 
2019  and  has  entered  into  force  in  July  2020.  The  new  law  introduces  obligatory  e-
procurement practices, such as electronic communication and exchange of data in the public 
procurement  procedures.  Furthermore,  it  includes  provisions  on  applying  the  principles  of 
equal 
international 
agreements.  Further  harmonisation  is  needed  on  the  rules  governing  the  treatment  of 
economic  operators  in  public  procurement  procedures.  The  adoption  of  amendments  to  the 
law  on  public-private  partnerships  and  concessions  aiming  to  align  with  the  directive  on 
concessions are still pending. Although, further legislation is needed to ensure full alignment 
with the EU acquis, the new law on public procurement is an important positive step forward. 
However,  in  February  2020,  Serbia  adopted  a  new  law  on  special  procedures  for  linear 
infrastructure projects, that allows the government to exempt linear infrastructure projects of 
‘special  importance  for  the  Republic  of  Serbia’  from  the  application  of  public  procurement 
rules. National public procurement legislation can be suspended for entire or particular phases 
of a project and the government is  empowered to select  a strategic partner in  circumstances 
deemed as urgent. This new law undermines the added value and effective implementation of 
the  new  law  on  public  procurement.  Through  allowing  for  the  circumvention  of  national 
legislation  as  well  as  EU  rules  and  standards  in  this  way,  Serbia  maintains  serious 
discriminatory rules in the field of public procurement. 

to 

73 

 
 
the 
The  new  public  procurement  development  programme  for  2019-2023  and 
accompanying action plan for 2019-2020 were adopted in November 2019. Planned activities 
from the previous programme and the 2018 action plan that were delayed were included under 
the new action plan. 

The Public Procurement Office (PPO) conducts compliance supervision of the law on public 
procurement and maintains the public procurement portal. The PPO was involved in preparing 
the new law on public procurement and is in charge of implementing legislation instead of the 
Ministry of Finance. 

Implementation and enforcement capacity 

The  public  procurement  market  represented  8.14%  of  GDP  in  2019,  continuing  modest 
upward trend from 2018. The average number of bids per tender remained stable at 2.5, yet is 
notably  lower  than  3  bids  in  2017.  For  the  first  time  since  2015,  the  share  of  contracts 
awarded  to  foreign  bidders  dropped  to  2%  of  the  total  number  of  contracts,  spread  equally 
between EU and non-EU companies. 

Regarding  monitoring  of  contract  award  and  implementation,  in  2019  the  proportion  of 
negotiated procedures without prior publication increased from 3% in 2018, to 4%, while the 
share of open procedures increased from 91% to 93% of the total value of contracts. The level 
of  centralised  public  procurement  contracts  has  continued  a  downward  trend  and  further 
dropped from 15% of the total annual procurement budget in 2018 to 12% in 2019. The use of 
the best price-quality ratio criterion has remained low at 10%, while the lowest price criterion 
remained dominant in 90 % of cases. It is in the best interest of both contracting authorities 
and Serbian taxpayers to increase the utilisation of the best price-quality criterion, mostly due 
to higher quality and increased life cycles costs related to the lowest price criterion. The State 
Audit Institution found irregularities in 9.6% of inspected procuring entities in 2019, marking 
a  significant  decrease  from  12.1%  in  2018,  and  a  notable  increase  from  7.4%  in  2017.  The 
government's  Anti-Corruption  Council  has  noted  that  current  framework  of  internal  and 
external control over the expediency of public procurements in large public utility companies 
is  both  inadequate and prone to  abuses. Considering that such contracts  represented 27% of 
the  total  number  and  44%  of  the  total  value  of  concluded  contracts  in  2019,  the  relevant 
institutions should investigate these claims and continuously monitor these processes on both 
state and local  level.   Good progress has been noted on development  of  e-procurement  tool 
with the launch of live demo/test version of the new public procurement portal in June, which 
will  be  operational  by  the  time  the  new  law  entered  into  force  in  July  2020.  Numerous 
workshops  and  seminars  have  been  organised  to  train  PPO  staff,  bidders,  and  contracting 
authorities  to  operate  and  use  the  new  e-procurement  portal.  However,  the  planned  training 
activities have halted and partially moved to a remote/webinar format due to the COVID-19 
outbreak. 

The COVID-19 response enabled the use of exceptional procedures to expedite procurement 
processes.  The  Public  Procurement  Office  informed  contracting  authorities  about  the 
flexibilities provided by the national public procurement legislation in that regard. To mitigate 
the risks of fraud and corruption, it is especially important to maintain audit trails. Disclosing 
all  procurement  information  related  to  procurement  conducted  in  relation  to  COVID-19  on 
government portals would also contribute to enhanced transparency and trust.  

Capacity  to  manage  public  procurement  processes  continued  to  improve  with  the 
certification  of  481  public  procurement  officers  in  2019.  The  introduction  of  an  advanced 
course for those who already have a certificate is pending. With diverse responsibilities and a 
total  of  28  out  of  the  38  staff  members  planned,  the  PPO  continues  to  lack  adequate 
administrative capacity to carry out many of its tasks. By the end of the reporting period, the 

74 

 
 
Commission  for  Public-Private  Partnerships  and  Concessions  has  approved  a  total  of  154 
public-private partnership project proposals, including 62 with concession elements, mostly in 
the transport, sanitation, and urban planning sectors. The Commission remains understaffed. 

There were no developments in integrity and conflicts of interest. 

Efficient remedy system 

Legislation on the right to legal remedy is broadly in line with the EU acquis and is enforced 
by the Republic Commission for the Protection of Rights in Public Procedures (the Republic 
Commission), an independent state body. 

The Republic Commission solved 921 cases on requests for the protection of rights between 
March 2019 and March 2020. Public procurement procedures were partially or fully annulled 
in 477 cases (51.8% of all solved cases). The number of contracting authorities not complying 
with decisions remains stable at below 1% of the overall decisions taken. During the reporting 
period,  the  Republic  Commission  took  decisions  in  99  cases  on  complaints  about  the 
conclusions  of  contracting  authorities.  It  also  imposed  seven  financial  fines  to  contracting 
authorities not complying with its orders and decisions, and annulled contracts in 12 cases.  

Regarding  the  Republic  Commission’s  implementation  capacity,  the  number  of  staff  has 
dropped by 4 people compared to 2019, but remains relatively stable with 54 staff members, 9 
of which are elected officials. Due to  limited specialisation and training,  the Administrative 
Court’s  (AC)  capacity  to  deal  with  complexity,  diversity,  and  overall  quantity  of  cases  and 
lengthy legal proceedings remains weak. Improved cooperation between the PPO and AC on 
exchange of knowledge and information should be established. Limited collaboration between 
the  Republic  Commission  and  AC  is  hampering  better  enforcement  of  rights  in  the  public 
procurement  procedures.  There  are  no  feedback  mechanisms  informing  the  procurement 
officers of the Republic Commission’s and/or AC’s decisions. 

6.6. 

Chapter 6: Company law  

The  EU  has  common  rules  on  the  formation,  registration  and  disclosure  requirements  of  a 
company,  with  complementary  rules  for  accounting  and  financial  reporting,  and  statutory 
audit. 

Serbia has a good level of preparation in company law. Good progress was made with the 
adoption of amendments to the law on accounting and the law on auditing. The Commission 
recommendations from 2019 were thus partially implemented.  

In the coming year, Serbia should in particular:  

  improve further alignment with the company law acquis by adopting necessary laws and 

bylaws;  

  adopt  implementing  legislation  to  the  law  on  auditing  establishing  the  Securities 
Commission as the competent audit oversight authority and ensure adequate funding and 
resources . 

As regards company law, no relevant legislative amendments were adopted in 2019. Serbia’s 
legislation  is  largely  aligned  with  the  EU  acquis.  On  company  takeovers  full  alignment  is 
planned to be reached in 2021. Further alignment is also required in the area of shareholder 
rights.  Serbia’s  Corporate  Governance  Code  is  based  on  EU  best  practice  and  OECD 
principles. The Serbian Business Registers Agency acts as a one-stop shop, where companies 
obtain  a  unique  registration  and  tax  identification  number  and  online  access  to  company 
information.  Electronic  establishment  of  multi-member  limited  liability  companies  has  been 
enabled  as  of  28  June  2019.  The  database  of  companies  in  the  business  register  should  be 

75 

 
 
ready  to  interconnect  with  EU  Member  States’  business  registers  in  the  future.  Further 
legislative  steps  are  needed  to  align  on  transparency  requirements  for  listed  companies 
dependent on the adoption of laws on capital markets and joint stock company acquisitions. 

Concerning corporate accounting, amendments to the Law on Accounting were adopted in 
October  2019,  aiming  to  further  align  with  the  EU  acquis.  The  amendments  to  the  Law  on 
Accounting  redefine  thresholds  for  the  classification  of  legal  entities  and  company  size 
requirements  decreasing  costs  and  financial  burdens  for  smaller  companies,  such  as  by 
exempting  them  from  the  obligation  of  compiling,  submitting  and  disclosing  consolidated 
annual  financial  statements  or  management  reports.  The  Law  on  Accounting  also  contains 
provisions  aiming  to  align  with  the  Non-Financial  Reporting  Directive.  The  amendments  to 
the  law  on  auditing,  adopted  together  with  the  Law  on  Accounting,  further  regulate  the 
conditions,  obligations  and  professional  qualifications  needed  to  perform  audits.  Statutory 
audits are mandatory for annual financial statements of large and medium-sized companies, as 
well as public interest entities, irrespective of their size. The amendments also prescribe the 
adoption of implementing legislation within the next year to allow the Securities Commission 
to  take  over  audit  public  oversight  activities.  The  application  of  International  Standards  on 
Auditing is also mandatory. 

6.7. 

Chapter 7: Intellectual property law 

The EU has harmonised rules for the legal protection of intellectual property rights (IPR), as 
well  as  rules  for  the  legal  protection  of  copyright  and  related  rights.  Rules  for  the  legal 
protection  of  IPRs  cover,  for  instance,  patents  and  trademarks,  designs,  biotechnological 
inventions and pharmaceuticals. Rules for the legal protection of copyright and related rights 
cover, for instance, books, films, computer programmes and broadcasting. 

Serbia  has  a  good  level  of  preparation  on  intellectual  property  rights.  There  was  good 
progress with the adoption of the amendments to the law on copyright and related rights and 
to  the  law  on  the  protection  of  topographies  of  semiconductor  products,  as  well  as  the 
adoption of the law on trademarks.  

In the coming year, Serbia should in particular: 

  harmonise  copyright  and  related  rights  legislation  with  the  EU  directives  on  collective 

rights management and on orphan works; 

  adopt  amendments  to  align  with  the  regulation  on  the  SPC  manufacturing  waiver  to  the 

Law on Patents; 

  strengthen  enforcement,  by  improving  capacities  and  further  increasing  coordination  of 

different stakeholders. 

Amendments  to  the  law  on  copyright  and  related  rights  aiming  at  alignment  with  the 
relevant EU acquis and ensuring exhaustion of rights on the territory of the EU and EEA were 
adopted  in  September  2019.  Serbia  also  adopted  amendments  to  align  with  the  directive  on 
the protection of topographies of semiconductor products. In January 2020, Serbia ratified the 
Marrakesh  treaty  to  facilitate  access  to  published  works  for  persons  who  are  blind,  visually 
impaired, or otherwise print disabled. Further  alignment is  needed in  the areas of collective 
rights management and orphan rights.  

On  industrial  property  rights,  the  law  on  trademarks  aiming  at  alignment  with  the  EU 
acquis was adopted in January 2020. Serbia is also in the process of preparing a law on trade 
secrets  to  align  with  the  EU  acquis.  Amendments  to  the  Law  on  Patents  to  align  with 

76 

 
 
Regulation  496/2009  (SPC  manufacturing  waiver)  are  being  prepared.  The  Intellectual 
Property Office remains relatively well staffed and efficient in registering trademarks. 

Concerning  enforcement,  the  overall  number  of  employees  in  the  Market  Inspectorate  fell 
from 384 to 338,  yet the number of market inspectors specialised in the field of intellectual 
property  has  remained  stable  at  47.  The  overall  amount  of  counterfeit  and  pirated  goods 
confiscated  by  the  Market  Inspectorate  dropped  considerably  in  2019,  while  the  number  of 
requests submitted by economic operators notably increased in 2019. The number of customs 
officers specialised in intellectual property protection further decreased from 14 in 2018 to 13 
in  2019.  Continuing  the  last  year's  trend,  the  number  of  items  detained  by  the  customs 
administration  fell  substantially  in  2019,  while  the  number  of  items  destroyed  increased 
significantly  in  2019.  The  number  of  inspectors  specialised  in  intellectual  property  rights 
within  the  tax  administration  has  remained  stable,  while  the  Special  Prosecution  for 
Cybercrime Office obtained one additional deputy Public Prosecutor. The number of software 
legality checks  carried out by the Tax Administration in 2019 continued to fall steeply from 
2018. Due to judges not being adequately specialised and the increasing number of incoming 
cases,  the  capacities  of  the  judiciary  to  handle  intellectual  property  rights  cases  remain 
limited. 

Legislation  aiming  at  full  harmonisation  with  the  EU  directive  on  the  enforcement  of 
intellectual  property  rights  is  still  pending.  The  Government  decision  on  the  permanent 
coordination  body  for  the  enforcement  of  intellectual  property  rights  was  amended  in 
September  2019,  so  the  body  could  operate  and  manage  enforcement  more  efficiently.  The 
renewed coordination body met four times in during the reporting period, after a long break. 
However, further meetings were delayed due to the COVID-19 crisis. The implementation of 
the goals under the strategic framework for intellectual property rights for 2018-2022 should 
be continued, mainly focusing on stakeholder coordination and awareness raising activities.  

6.8. 

Chapter 8: Competition policy 

EU rules protect free competition. They include antitrust rules against restrictive agreements 
between  companies  and  abuse  of  dominant  position,  and  include  rules  on  concentrations 
between  companies,  which  would  significantly  impede  competition.  EU  rules  also  set  out  a 
system  of  State  aid  control.  Governments  are  only  allowed  to  grant  State  aid  if  restrictive 
conditions are met, with a view to preventing distortion of competition. 

Serbia is moderately prepared in the area of competition policy. Good progress was made 
in legislative alignment of state aid rules with the adoption of a new law on state aid control 
and  increasing  the  operational  independence  of  the  Commission  for  State  Aid  Control 
(CSAC). Last year’s recommendations were partially implemented.  

In the coming year, Serbia should in particular: 

  take  additional  steps  to  align  the  existing  aid  schemes,  in  particular  the  fiscal  state  aid 

schemes with the EU acquis; 

  align  the  law  on  multilateral  interchange  fees  and  special  operating  rules  for  card-based 

payment transactions with the EU acquis and SAA obligations; 

  provide  a  solid  track  record  in  the  implementation  of  laws  on  protection  of  competition 

and state aid control.  

Antitrust and mergers 

The  legislative  framework  is  broadly  in  line  with  Articles  101  and  102  TFEU  and  related 
provisions of the SAA. The current law on protection of competition provides for an ex ante 

77 

 
 
control of mergers. However, the legislative framework has yet to be fully brought into line 
with  EU  guidelines  and  communications  in  this  area.  Work  on  a  new  law  on  protection  of 
competition aiming at further alignment with the EU acquis has halted. 

Regarding  the  institutional  framework,  the  Commission  for  Protection  of  Competition 
(CPC) is the main authority responsible for implementing the legal framework, and remains 
operationally independent. In November 2019, the new CPC President and Council members 
were  appointed.  The  established  credibility  and  image  of  the  institution  will  need  to  be 
reaffirmed by the new management with a strong track record on implementing law. 

Concerning enforcement capacity, the CPC has 52 employees of which 34 are case handlers 
with adequate level of expertise. On implementation, the CPC has continued to investigate a 
significant number of antitrust cases. In 2019, the CPC adopted five decisions on restrictive 
agreements and five on abuse of dominant positions. One dawn raid was conducted during the 
reporting  period,  while  the  leniency  programme  was  also  used  once.  The  level  of  imposed 
fines remained significant with EUR 0.86 million, yet substantially lower than in 2018 (over 
EUR  3.8  million).  The  CPC  did  not  prohibit  any  merger  in  the  reporting  period,  while  it 
imposed  remedies  in  two  cases.  The  CPC  launched  eight  sector  enquiries  in  the  reporting 
period,  investigating  the  retail  sector  (non-specialised  stores  with  food,  beverages  and 
tobacco), the oil and oil derivatives market, the international rail freight transport market, the 
intercity bus transportation market, the sunflower production and sales market, the wholesale 
market  of  mineral  fertilisers,  the  tour  operators  market,  and  the  sugar  and  sugar  beet 
production  and  wholesale  markets.  Competition  advocacy  activities  have  continued 
throughout the reporting period. The CPC issued six opinions on draft legislation in 2019, yet 
these  opinions  were  not  always  taken  into  account,  particularly  in  the  field  of  passenger 
transport. The practice of consulting the CPC on all relevant legislation should be reaffirmed 
and their opinions systematically and seriously applied. The number of CPC decisions upheld 
by  appeal  courts  continued  to  increase.  However,  the  capacity  and  specialisation  of  the 
judiciary  to  deal  with  complex  competition  cases  remains  modest  and  needs  to  be 
significantly improved. 

On  the  law  on  multilateral  interchange  fees  and  special  operating  rules  for  card-based 
payment transactions, no developments have been made in aligning Article 9 of this law to the 
EU acquis and relevant provisions of the SAA. 

State aid 

Regarding  the  legislative  framework,  Serbia  adopted  a  new  law  on  state  aid  control  in 
October 2019, which entered into force on January 1, 2020. The new legislative framework is 
broadly in line with the EU acquis and the relevant provisions of the SAA. However, further 
alignment  is  needed,  especially  as  regards  implementing  legislation.  The  existing  aid 
schemes,  namely  the  fiscal  state  aid  schemes  part  of  the  laws  on  corporate  income  tax,  on 
personal  income  tax  and  on  free  zones,  are  not  yet  harmonised  with  the  EU  acquis.  Some 
progress has been noted on creation of a new inventory of schemes. CSAC made progress in 
fulfilling its obligations under Article 73(5) of the SAA to provide the European Commission 
with information on individual decisions approving large amounts of state aid. Drafting of the 
regional aid map is pending. 

On the institutional framework, the CSAC is responsible for implementing the law on state 
aid  control.  The  newly  adopted  law  has  increased  the  CSAC’s  operational  independence, 
which the CSAC will need to confirm by checking through its track record of implementing 
this  law.  According  to  the  new  legislative  provisions,  the  CSAC  is  accountable  to  the 
Parliament. The CSAC can now also exercise its power to propose legislation via competent 
authority,  i.e.  Ministry  of  Finance,  and  adopt  certain  implementing  legislation,  mainly 

78 

 
 
secondary  legislation.  The  President  and  four  members  of  the  CSAC  Council  were  elected 
through a public competitive procedure, and confirmed by the Parliament in December 2019. 

The CSAC’s enforcement capacity remains insufficient with only five full-time employees 
in its Secretariat. Nevertheless, the approved 2020 budget with more attractive remuneration 
provisions  will  allow  the  CSAC  to  employ  up  to  27  additional  staff.  Employees,  case  files, 
archives, equipment and corresponding assets of the Department for State Aid Control within 
the  Ministry  of  Finance  have  been  fully  absorbed  by  the  CSAC  and  became  a  part  of  its 
professional  service  unit.  On  implementing  the  law  on  state  aid,  the  number  of  decisions 
taken  upon  notification  in  2019  significantly  increased  from  56  in  2018  to  167,  while  the 
number of decisions in ex post procedure in the same year slightly decreased from 14 in 2018 
to 13. CSAC did not prohibit any state aid or decided in favour of recovery, while in only one 
case a conditional decision was adopted. The number of CSAC decisions that were appealed 
against  remained  low.  A  specialised  electronic  platform  is  being  developed  to  help  monitor 
compliance  with  conditions  for  the  accumulation  of  aid.  The  CSAC  should  closely  monitor 
the  implementation  of  State  aid  rules  in  intergovernmental  agreements  concluded  with  non-
EU countries. Awareness  regarding State aid  rules still remains low among the aid-granting 
authorities, thus advocacy activities should be continued and intensified in 2020.  

Due to the COVID-19 outbreak, CSAC started to allow, as of March, the granting of aid as 
part  of  recovery  measures,  in  accordance  with  the  national  state  aid  law  and  the 
Article 107(3)(b) TFEU.  Within  the  temporary  framework  for  state  aid  measures,  the 
Government  adopted  two  decrees  in  April  2020,  earmarking  budget  funds  for  direct  cash 
subsidies  to  private  sector  (cc. EUR 831.6 million),  adopting  the  financial  programme  of 
favourable  loans  delivered  through  the  Development  Fund  (cc. EUR 200 million),  state 
guarantee  scheme  for  loans  through  commercial  banks  (cc. EUR 2 billion),  direct  cash 
subsidies  to  agriculture  sector  (cc. EUR 9.82 million),  and  favourable  loans  to  agriculture 
sector  (cc. EUR 12.39 million).  Additional  financial  aid  in  form  of  support  schemes  to 
tourism and transport sectors has been announced during the reporting period. Serbia needs to 
ensure that allocation of state funds under this economic recovery framework is conducted in 
a non-discriminatory and transparent way. 

Liberalisation 

Provisions on financing of services of general economic interest within the regulation on rules 
for  state  aid  granting  need  to  be  further  aligned  with  the  EU  acquis.  Enforcement  of 
competition rules on public companies needs to be intensified. There are no monopolies of a 
commercial character within the meaning of Article 37 TFEU. 

6.9. 

Chapter 9: Financial services  

EU rules aim at ensuring fair competition between and the stability of financial institutions, 
namely  banking,  insurance,  supplementary  pensions,  investment  services  and  securities 
markets. They include rules on authorisation, operation and supervision of these institutions. 

Serbia  remains  moderately  prepared  in  the  area  of  financial  services.  Good  progress  was 
made  on  further  implementing  international  standards.  The  chapter  was  opened  in  the  EU 
accession negotiations in June 2019. Last year’s recommendation was largely fulfilled. 

In the coming year Serbia should in particular: 

  continue  to implement outstanding Basel III standards in line with their finalisation and 

introduction at EU level; 

  continue  work  towards  full  alignment  with  the  Solvency  II  directive  in  the  field  of 

insurance. 

79 

 
 
On  banks  and  financial  conglomerates,  Serbia  has  largely  implemented  the  Basel  III 
standards.  

The banking sector’s prudential ratios are being regularly monitored by the National Bank of 
Serbia  (NBS)  following  the  adoption  of  the  amendments  to  the  decision  on  reporting 
requirements for banks in 2016. Alignment of national legislation with the new version of the 
EU Bank Recovery and Resolution Directive (BRRD) is still to be completed.  

The application of the International Financial Reporting Standards (IFRS) 9, applicable as of 
1 January 2018, has  been completed.  Banks will continue to  implement  IFRS as adopted at 
international level under NBS’s supervision. The level of non-performing loans continues to 
decrease (gross NPL ratio of 4.1% at the end of February 2020).  

Amendments to the law on deposit insurance were adopted in October 2019. The amendments 
aim to further align with the EU directive on deposit guarantee schemes. Amendments include 
an increase in the coverage level from EUR 50 000 to EUR 100 000 per depositor per bank, 
an  extended  scope  of  protected  depositors,  introduction  of  risk-based  premium  system  and 
covered deposits as the basis for the insurance premiums assessment.   

In  spring  2020,  in  response  to  the  COVID-19  emergency,  the  National  Bank  of  Serbia 
introduced a 3-months moratorium on all repayments under bank loans and financial leasing 
agreements, in addition to different monetary policy measures. 

Regarding  insurance  and  occupational  pensions,  Serbia  adopted  a  plan  for  implementing 
the  directive  on  insurance  distribution  in  April  2019.  In  December  2019,  Serbia  adopted 
amendments  to  the  law  on  pension  and  disability  insurance.  However,  legislation  on 
compulsory traffic insurance is still missing.  

Preparatory work is ongoing in the context of aligning with the Solvency II directive in line 
with  the  strategy  for  implementation,  also  supported  by  EU  funds.  Certain  provisions  were 
implemented regarding qualitative requirements under Pillar 2, but further work is still to be 
carried out to ensure full alignment with the EU acquis.  In terms of the NBS’s administrative 
capacity in  the insurance area, the  Insurance Supervision  Department  was reorganised. Two 
new units were formed on the development of prudential supervision and on the development 
of regulation. The new units will be responsible for implementing of the Solvency II regime.  

Alignment  with  the  Directive  on  the  Activities  and  Supervision  of  Institutions  for 
Occupational  Retirement  Provision  in  the  areas  of  cross-border  activities,  investment  rules 
and regulation of technical provisions is still to be completed.  

No progress was made regarding financial market infrastructure.  

Two new laws were adopted in the field of securities markets and investment services: the 
law  on  open-end  investment  funds  with  a  public  offering  and  the  law  on  alternative 
investment  funds.  The  laws  aim  at  further  alignment  with  the  Undertakings  for  Collective 
Investment in Transferable Securities Directive (UCITS) IV and V as well as the Directive on 
Alternative  Investment  Fund Managers respectively. Related secondary legislation still need 
to be adopted. The planned adoption of amendments to align the capital market law with the 
Markets  in  Financial  Instruments  Directive  (MiFID  II)  and  the  Directive  on  Settlement 
Finality in Payment and Securities Settlement Systems (SFD) was postponed until Q3 2021. 
However, amendments were made to align with the domestic law on public debt and further 
attract  foreign  investors.  The  administrative  capacity  of  the  Ministry  of  Finance  to  regulate 
the securities market remains weak.   

80 

 
 
6.10.  Chapter 10: Information society and media  

The EU supports the proper functioning of the internal market for electronic communications, 
electronic  commerce  and  audio-visual  services.  The  rules  protect  consumers  and  support 
universal availability of modern services. 

Serbia  is  moderately  prepared  in  the  field  of  information  society  and  media.  Limited 
progress  was  made  on  implementing  recommendations  of  the  previous  report,  in  particular 
with  respect  to  the  financial  indepence  of  the  regulator  for  electronic  communication  and 
postal  service  (RATEL).  Serbia  also  took  steps  in  the  areas  of  Digital  Single  Market,  e-
government,  information  society  and  adopted  a  number  of  sectoral  laws.  However,  the 
recommendations of the last report remain largely valid. 

In the coming year, Serbia should in particular: 

  align  the  electronic  communications  legislation  with  the  updated  EU  regulatory 

framework, including the new European Electronic Communications Code;  

  ensure  full  financial  and  operational  independence  of  the  regulators  for  electronic 
communication  and  postal  services  (RATEL)  and  for  electronic  media  (REM)  in 
compliance with the EU acquis and boost their capacity to work proactively;  

  ensure  implementation  of  competitive  safeguards  and  market  operators’  access  to  the 
relevant  infrastructure  (ducts,  poles,  fibre  optics  and  local  loop  infrastructure),  in 
particular at a local government level.  

In  line  with  EU's  digital  single  market  objectives.  There  have  been  achievements  in  the 
wider  regulatory  framework  for  e-commerce,  through  the  adoption  of  the  sectoral  laws  on 
trade  and  the  amended  law  on  e-commerce,  while  the  implementation  of  the  law  on  e-
documents, electronic identification, and trust services, and transposing the eIDAS regulation 
into Serbian legislation continued. The Central  Bank introduced an instant  payment  system, 
allowing  immediate  real-time  monetary  transactions  and  an  additional  instant  payment 
channel by means of using the scanned QR code. The 2020-2024 digital  skills development 
strategy  was  adopted  in  February  2020  that  aims  to  raise  the  digital  literacy  level  and  for  a 
more  effective  cross-sectoral  collaboration  using  all  available  resources.  Digital  skills  and 
introduction of informatics and computer science, engineering and technology subjects in the 
primary schools curricula were further promoted. The tax legislation on the personal income 
tax  and  social  contributions  laws  was  adjusted.  As  regards  the  IT  sector,  this  adjustment 
mostly affects sole entrepreneurs in the IT industry. However, the law on broadband has yet to 
be  adopted.  A  more  universal  and  coherent  approach  to  digitalisation  and  an  effective 
coordination  of  the  various  stakeholders  is  needed  to  overcome  high  fragmentation  and 
inconsistent policy implementation.  

In  the  field  of  electronic  communications  and  information  technology,  the  law  on 
electronic communications to align with the relevant EU regulatory framework has yet to be 
adopted.  The  financial 
independence  of  Serbia’s  regulatory  agency  for  electronic 
communications  (RATEL)  has  improved.  There  were  no  further  developments  concerning 
regulators’  operational  independence.  Although  its  administrative  capacities  have  slightly 
increased, 
the 
implementation of competitive safeguards, RATEL has completed all rounds of deregulated 
and ex ante relevant market analyses. However, there are still difficulties with access for both 
users-operators'  to  infrastructure  including  ducts,  poles,  local  loop  infrastructure  and  public 
operators’  dark  fibres,  along  with  restrictions  imposed  by  the  environmental  and  municipal 
planning legislation, in particular at local government level. The line ministry´s administrative 

they  be  further  strengthened.  Concerning 

is  recommended 

that 

it 

81 

 
 
capacity  backslid  even  further,  while  the  inspection  capacities  remained  the  same.  Staff 
turnover remains a concern.  

Progress was made on implementing the Regional Roaming Agreement, with preparations for 
the next phase ongoing.  

Activities  towards  evaluating  the  needs  for  the  112  European  emergency  number  calling 
system  according  to  EU  standards  were  initiated.  However  the  system  has  yet  to  be  
implemented. 

In the field of information society services, the strategic framework for e-government – the 
2020-2022 e-government development programme and action plan was adopted in June 2020 
while  the  strategy  on  development  of  artificial  intelligence  was  adopted  in  December  2019. 
The  remaining  sub-legal  regulation  of  the  law  on  e-government  has  yet    to  be  adopted  to 
allow for its full implementation. The number of databases connected to the new government 
service  bus  information  system  has  been  increased  to  29.  This  new  information  system  is 
managed by ten government bodies and used by about 330 institutions and beneficiaries. The 
upgraded  National  e-Government  Portal,  which  relies  on  the  European  e-Government 
Benchmark  Method  Paper  was  rolled  out  in  February  2020.  The  Portal  uses  two-factor 
authentication  and  e-delivery  of  documents  and  communications  from  public  administration 
to the Portal users, serving as a one-stop shop for e-government services and as a central point 
of  access  for  business  and  citizens  alike.  The  number  of  interoperable  public  registers 
providing  for  easier  exchange  of  data  increased.  The  building  of  a  new  cutting-edge 
technology data centre in the city of Kragujevac is ongoing. There is potential to improve the 
data presented on the country´s Open Data Portal, notably presenting it in a ‘machine-reading 
language’. The amended law on information security was adopted in October 2019, aiming 
to  further  align  with  the  Directive  on  network  and  information  systems.  RATEL,  as  the 
national Computer Emergency Response Team  (CERT) became an associate member of the 
European  Union  Agency  for  Cybersecurity  –  ENISA  –‘Article  13a  Expert  Group’  on 
resilience  and  security  of  communication  infrastructure,  networks  and  services.  RATEL 
would  benefit  from  association  to  the  Agency’s  other  expert  groups  as  well.  It  would  also 
benefit from upgrading its cybersecurity administrative capacities.  

No  progress  was  made  in  audio-visual  policy  in  the  reporting  period.  Electronic  media 
outlets are still regulated by the same legislation, pending possible revisions in the future, as 
foreseen in  the new media strategy adopted in January 2020.  

The strategy of the Regulatory Authority of Electronic Media (REM) for developing radio and 
audio-visual media services, pending since 2015, has still not been adopted and now seems to 
be outdated. REM is still failing to effectively monitor and penalise broadcasters that do not 
meet all programme content obligations under the law.  

REM  addressed  the  issue  of  increasing  accessibility  to  programme  content  for  people  with 
disabilities, through recommendations proposing quotas for subtitling, audio descriptions and 
specific provisions on access for people with intellectual disabilities. REM also adopted a by-
law document on logical numeration of TV channels. However, the process did not meet the 
required  procedure.  In  December  2019,  three    members  of  the  REM  Council,  who  were 
waiting  to  be  elected,  finally  took  their  seat  after  three  years,  followed  by  two  additional 
members,  elected  in  February  2020.  Legislation  on  regulatory  bodies  remains  unchanged. 
REM´s  financial  stability  and  staff  capacity  remain  a  concern,  and  its  lack  of  independence 
needs to be addressed. 

Financial and staff concerns apply to public broadcasters as well, as these have a direct impact 
on  their  editorial  independence.  Although  subscription  to  RTS  increased  by  approximately 

82 

 
 
15% as of January 2020, it still does not allow for a stable financial model that would secure 
its independent and professional work.  

Content  intended  for  national  minorities  is  limited  to  only  one  short  news  programme  in 
Albanian on RTS2. Therefore, RTS is not fulfilling its obligation as the national broadcaster 
to provide relevant content for other national minorities. 

In an effort to improve media literacy, the Ministry of Culture and Information developed a 
recommended    guideline  for  improving  and  developing  of  media  literacy  in  pre-university 
education. 

6.11.  Chapter 11: Agriculture and rural development  

The  common  agricultural  policy  (CAP)  supports  farmers  and  rural  development.  This 
requires  strong  management  and  control  systems.  There  are  also  common  EU  rules  for 
quality policy and organic farming. 

Serbia has some level of preparation in agriculture and rural development. Some progress 
was  made  on  addressing  recommendations  of  the  previous  report,  in  particular  through  the 
submission of the second package for entrustment with implementation of the instrument for 
pre-accession  assistance  for  rural  development  (IPARD  II)  in  November  2019  as  well  with 
taking  first  steps  for  the  establishment  of  the  integrated  administration  and  control  system 
(IACS).  

In the coming year, Serbia should in particular: 

  speed up the processing of applications received for the measures already entrusted under 
the  IPARD  II  programme  to  avoid  any  loss  of  EU  funds  and  continue  working 
entrustment  with  budget  implementation  tasks  for  the  remaining  measures  of  the 
programme;  

  continue,  in  a  timely  manner,  with  the  implementation  of  the  action  plan  to  ensure 

alignment with the EU acquis on agriculture and rural development. 

As regards horizontal issues, sectoral analysis has been completed in March 2020 within six 
sectors  in  preparation  for  drafting  the  next  national  programs  for  agriculture  and  rural 
development for the period 2021-2024. Implementation of the action plan for alignment with 
the EU acquis on agriculture and rural development continues but more focus is required to 
overcome  delays.  A  pilot  project  concerning  the  land  parcel  identification  system  was 
implemented  as  a  first  step  in  establishing  the  integrated  administration  and  control  system 
(IACS). This should now be extended over a wider area without delay. No progress was noted 
in decoupling payments from production and in the linkage of area-based payments to cross-
compliance standards. The farm accountancy data network has been established but its sample 
size and the quality of the data will need to be further improved to be fully representative. 

In  the  area  of  the  common  market  organisation,  the  horizontal  law  has  yet  to  be  adopted 
through  secondary  legislation  in  areas  including  marketing  standards,  public  and  private 
storage,  and  producer  organisation  spending  as  a  result.  This  delay  should  be  addressed  so 
that the acquis alignment plan can proceed.  

On rural development, Serbia is implementing two investment measures under the EU pre-
accession  programme  for  rural  development  (IPARD  II).  With  the  recent  recruitment  of  16 
employees,  the  IPARD  Agency  should  speed  up  the  processing  of  applications.  The  new 
systematisation  act  was  approved  in  January  2020,  granted  a  further  101  new  posts  to  the 
IPARD  Agency.  In  November  2019,  Serbia  submitted  the  second  entrustment  package 
containing the measures ‘Farm Diversification and Businesses Development’ and ‘Technical 

83 

 
 
Assistance’.  In  March  2020,  the  European  Commission  sent  the  Letter  of  Closure  to  the 
IPARD  Authorities  granting  entrustment,  with  one  condition  and  six  recommendations.  In 
order to receive funds for these two measures, Serbia should fulfil, in particular, the condition 
concerning  staff  contracts.  The  first  call  for  the  submission  of  applications  for  the  ‘Farm 
Diversification and business Development’ measure was launched on 8 June. 

The  spending  of  EU  funds  under  IPARD  should  be  a  priority  to  avoid  a  de-commitment. 
Work  should  continue  on  obtaining  entrustment  with  budget  implementation  task  for  the 
remaining measures – LEADER and Agri-Environment. 

Progress in the area of quality policy is slow due principally to delays in adopting legislation 
in  the  area  of  quality  schemes  for  agricultural  products  and  foodstuffs.  There  has  been 
progress in the area of spirit drinks with recognition of the first geographical indication and 
the accreditation of a control body in this field. 

As  regards  organic  farming,  the  area  under  organic  production  continues  to  grow,  year  by  
year,  with  fruit  production  being  the  most  significant.  The  legislation  still  needs  to  be  fully 
aligned with the EU acquis on organic production.  

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

EU hygiene rules for  foodstuff production ensure a high  level  of  food  safety. Animal health 
and welfare and the safety of food of animal origin are safeguarded together with quality of 
seeds, plant protection material, protection against harmful organisms and animal nutrition.  

Serbia  is  moderately  prepared  in  the  area  of  food  safety,  veterinary  and  phytosanitary 
policy. Some progress was made on implementing recommendations of the previous report, 
in particular with preparatory work for the strategy for alignment with the EU acquis and the 
extension  of  accreditation  of  the  National  Reference  Laboratories  Directorate.  The 
recommendations of the last report remain, however, largely valid. 

In the coming year, Serbia should in particular: 

  develop a comprehensive strategy for alignment, implementation and enforcement of the 

EU acquis on food safety, veterinary and phytosanitary policy; 

  continue  strengthening  the  administrative  capacity  of  the  veterinary,  phytosanitary  and 
national reference laboratories directorates, complete the ongoing recruitment procedure, 
and retain competent staff; 

  further improve the application of the risk based approach to official controls for imports.  

In the area of  general  food safety, Serbia is  yet  to  adopt  a strategy and  action plan for full 
alignment  with  the  EU  acquis,  following  a  proper  and  inclusive  public  consultation.  While 
rulebooks  on  monitoring  programmes  were  adopted  for  food  of  animal  and  plant  origin  as 
well  as  animal  feed,  it  is  important  that  Serbia  further  improves  its  risk-based  approach  for 
imports,  including  for  goods  subject  to  sanitary  checks,  and  that  it  puts  in  place  audit  of 
inspection staff. Integrated multiannual control plans have yet prepared.  

On  veterinary  policy,  annual  programmes  consisting  of  animal  health  protection  measures 
were  adopted  in  2019.  The  rulebook  which  aims  to  discontinue    mandatory  vaccination  of 
domestic  pigs  against  classical  swine  fever  throughout  most  of  the  country  was  adopted  in 
December 2019. Cases of African swine fever were confirmed requiring urgent action by the 
competent  bodies.  The  multiannual  programme  to  eradicate  rabies  in  wildlife  continued. 
Further  improvements  in  staffing  in  the  Veterinary  Inspectorate  took  place  through  further 
delegation of inspection  duties.  In 2020, 39 new  veterinary inspectors have been employed. 

84 

 
 
The  procedure  to  recruit  about  40  inspectors  has  been  launched.  It  is  important  that  this  is 
followed  by  continuous  training  of  staff.  Animal  welfare  legislation  has  yet  to  be  fully 
harmonised with the EU acquis. Implementation of legislation on animal welfare needs to be 
improved, including by means of recording this aspect of the official controls at the time of 
slaughter.    

As regards the placing of food, feed and animal by-products on the market, Serbia started 
to  implement  the  decree  on  categorisation  of  establishments  for  compliance  with  the  EU 
acquis.  The  process  is  yet  to  be  completed.  The  programme  for  the  improvement  of 
management of animal by-products was adopted by the Government in February.   

On  food  safety  rules  and  specific  rules  for  feed,  the  permitted  level  of  aflatoxins  in  milk 
remains five times higher than permitted by the EU acquis. The accreditation of the national 
reference laboratories directorate was extended for milk (additional methods), food and seeds. 

In  the  area  of  phytosanitary  policy,  the  procedure  to  recruit  about  16  new  inspectors  was 
launched.  The  annual  programmes  of  plant  health  measures  were  adopted.  Contracts 
delegating certain tasks related to evaluating plant protection products to scientific institutions 
were  signed,  and  their  implementation  started.  The  list  of  approved  active  substances  of 
pesticides  was  aligned  with  the  EU  acquis.  To  mitigate  the  impact  on  public  health  and 
environment,  Serbia  needs  to  step  up  its  efforts  on  sustainable  management  of  pesticides 
through further alignment with the EU acquis and improved implementation of the legislation 
in force (e.g. collection and safe disposal of pesticides packing, training, control of application 
devices, etc.).     

There  was  no  progress  on  adopting  the  framework  legislation  on  genetically  modified 
organisms that should be aligned with the EU acquis. 

6.13.  Chapter 13: Fisheries  

The  common  fisheries  policy  lays  down  rules  on  fisheries  management,  protects  living 
resources  of  the  sea  and  limits  the  environmental  impact  of  fisheries.  This  includes  setting 
catch  quotas,  managing  fleet  capacity,  rules  on  markets  and  aquaculture  and  support  for 
fisheries and coastal communities. 

Serbia  is  moderately  prepared  in  the  area  of  fisheries.  Limited  progress  was  made  on 
implementing  the recommendation of the previous  report by means of preparatory work  for 
the development of an action plan. 

In the coming year, Serbia still needs to: 

  adopt  an  action  plan  that  will  ensure  full  compliance  with  the  requirements  of  the  EU 
acquis  by  the  date  of  accession,  in  particular  regarding  organisation  of  the  markets, 
aquaculture,  data  collection  and  control  measures  against  illegal,  unreported  and 
unregulated fishing.  

Serbia  has  yet  to  strengthen  its  policy  formulation,  implementation,  and  enforcement 
capacities  in  this  area.  The  overall  coordination,  including  coordination  of  customs  and 
veterinary inspections, needs to be improved. Structural measures are yet to be put in place 
for small-scale or inland fisheries. Legislation needs to be adopted on market support, in line 
with the EU acquis. The collection of statistical data on aquaculture for 2018 was carried out 
in line with the acquis. Serbia should implement the rulebook on catch certification and bring 
its legal framework, including implementation measures, into full alignment with the  acquis 
on illegal, unreported and unregulated (IUU) fishing as soon as a solution has been found 
for the fish catch certificate issue.  

85 

 
 
6.14.  Chapter 14: Transport 

The EU has common rules for technical and safety standards, security, social standards, state 
aid  and  market  liberalisation  in  road  transport,  railways,  inland  waterways,  combined 
transport, aviation and maritime transport. 

Serbia  has  a  good  level  of  preparation  in  this  field.  Some  progress  was  made  in  the 
reporting  period  on  road  safety  and  rail  reform.  However,  the  2019  recommendations  were 
overall only partially addressed. 

In the coming year, Serbia should in particular: 

  continue  with  the  rail  reform  process,  in  particular  by  regulating  contractual  relations 
between  the  railway  infrastructure  manager  and  operators  in  a  cost-efficient  and 
transparent  manner,  further  implement  adopted  legislation  and  strengthen  institutional 
capacities; 

  continue  implementing  connectivity  reform  measures,  in  particular  by  advancing  in 
Intelligent Transport Systems (define strategic framework, adopt legislation, and improve 
capacity  for  implementation  and  enforcement);  adopt  credible  costed  rail  and  road 
maintenance plans and start  implementing them;  align and simplify road  and rail border 
crossing  procedures  and  further  improve  road  safety  by  undertaking  actions  to  remove 
blackspots on sections with high accident rates; 

  improve prioritisation and preparation of transport infrastructure to achieve best value for 
money. In particular, this could be achieved by strictly prioritising investments according 
to  their  relevance  for  Serbia’s  economic  development  and  EU  integration  and  basing 
investment  decisions  on  feasibility  studies  with  cost-benefit  analyses  conducted  in 
accordance  with  EU  best  practices  and  following  EU  standards  on  procurement 
procedures. 

As  regards  the  general  transport  acquis,  Serbia  needs  to  revise  and  update  its  strategic 
framework  to  reflect  new  developments  and  ensure  coherence;  particularly  in  the  overall 
transport strategy and the general transport master plan. Strategic documents should be based 
on  option  analyses,  take  into  account  regional  aspects,  and  be  properly  costed.  Serbia 
continues  to  actively  participate  in  the  EU  strategies  for  the  development  of  the  Danube 
Region and for the Adriatic and Ionian Region.  

Investments  in  transport  infrastructure  should  be  prioritised  through  a  single  mechanism, 
ranked according to  their relevance  for Serbia’s economic development  and EU integration. 
Decisions need to be based on feasibility studies and technical designs in line with EU best 
practices and follow EU standards on procurement procedures, ensuring best value for money. 
Currently, an increasing number of investments in Serbia do not apply these principles. 

Overall,  staffing  in  transport  institutions  has  slightly  increased,  improving  capacities  in  the 
road  and  rail  sector  (e.g.  road  passenger  transport,  rail  public  service  contract  management, 
passenger  rights,  accident  investigation  and  road  and  rail  safety)  and  positively  affecting 
international  cooperation  and  EU  integration.  Administrative  capacity  needs  further 
strengthening  in  particular  in  dealing  with  transport  of  dangerous  goods,  road  safety, 
intelligent  transport  systems  (ITS)  and  rail,  notably  the  railway  regulatory  body.  Serbia  has 
yet to adopt an overall ITS strategy, fully transpose the ITS Directive and allocate resources 
for ITS implementation.  

Regarding  public  services,  Serbia  has  a  high  level  of  alignment  with  the  EU  acquis  on  rail 
transport, but it is only partially aligned on road transport. In August 2019, Serbia adopted a 
new  regulation  for  calculating  the  compensation  for  public  service  obligations  for  rail 

86 

 
 
transport,  which  is  in  line  with  the  acquis.  The  methodology  for  track  access  charges  still 
needs to be prepared, together with the new pricing model for access to railway infrastructure. 
Amendments to the law on road transportation of passengers adopted in 2018 raise concerns 
regarding competition.  

On road transport, Serbia’s level of alignment with the EU acquis is satisfactory. During the 
reporting period, Serbia adopted eight rulebooks on road safety, although the new law on road 
traffic safety is still pending. Statistics on road traffic accidents in Serbia show that there is no 
sustained  downward  trend.  The  number  of  road  fatalities  in  Serbia  remains  well  above  EU 
average. Regular inspections,  roadside checks  and checks at  premises are being  carried out, 
but staffing and equipment are insufficient. Strengthening the capacity of inspection officers 
and  implementing  penalties  for  infringements  of  the  Agreement  concerning  the  Work  of 
Crews  of  Vehicles  Engaged  in  International  Road  Transport  (AETR)  remain  a  priority. 
Overall,  Serbia  needs  to  step  up  work  on  road  safety  through  i)  further  alignment, 
implementation  and  enforcement  of  road  safety  acquis,  ii)  education,  iii)  awareness  raising 
and  iv)  strengthening  of  capacities  at  national  and  local  levels.  Legislation  on  transport  of 
dangerous  goods  is  well  aligned  with  the  EU  acquis;  it  covers  also  transport  of  hazardous 
substances.  

Facilitating  border  crossing  procedures  and  improving  the  road  maintenance  system  remain 
priorities. Performance-based maintenance contracting need to continue and responsibilities in 
the area of road maintenance need to be further clarified. Serbia needs to address the issue of 
potentially discriminatory road charges against foreign operators.  

On  rail  transport,  reforms  continued  and  the  operational  and  financial  sustainability  of 
independent railway service/infrastructure operators is improving. Serbia regularly updates its 
railway network statement but it is not  yet  fully  compliant with the EU  acquis and Serbia’s 
negotiating  framework.  In  2019,  Serbia  adopted  five  regulations  governing  the  railway 
market,  11  rulebooks  on  rail  safety  as  well  as  a  rulebook  on  licences  for  rail  transport 
services.  In  November  2019,  Serbia’s  transport  minister  and  railway  authorities  signed  the 
Declaration on European Railway Safety Culture, which aims to raise awareness and promote 
a positive safety culture throughout the industry. Positive developments have been noted on 
rail  market  opening  with  nine  private  freight  companies  operating  on  the  market  in  2019. 
However,  further  efforts  are  required  to  ensure  the  market  fully  opens,  including  on  the 
issuance of train drivers licenses and safety certificates for railway undertakings, and mutual 
recognition of the rolling stock.  

Serbia  provisionally  published  all  11  technical  specifications  for  interoperability.  All 
specifications need to be adopted and implemented, and railway infrastructure has to be built 
accordingly.  Human  resource  development  plans  should  be  available  for  all  authorities 
dealing  with  railways,  reflecting  the  technological  and  administrative  developments  in  the 
railway field. The role and capacities of the Railway Directorate should be strengthened.  

Legislation  on  maritime  transport  is  well  aligned  with  the  EU  acquis.  Serbia’s  law  on 
maritime  navigation  complies  with  the  EU  acquis  on  vessel  traffic  monitoring  and 
information systems. Serbia should continue implementing international conventions.  

In inland waterway transport, Serbia continues to improve its level of alignment, which is 
already  high.  Serbia  has  an  operational  river  information  services  system  which  is  highly 
interoperable  with  those  of  EU  Member  States.  Serbia  has  signed  the  main  international 
agreements  on  inland  waterways,  such  as  the  Belgrade  Convention  and  the  Framework 
Agreement  on  the  Sava  River  Basin  as  well  as  bilateral  agreements  with  its  neighbouring 
countries.  Serbia  continues  improving  its  infrastructure  for  inland  waterway  transport 

87 

 
 
services.  Improvements  to  the  river  ports  network  statement  and  the  strengthening  of 
administrative capacity are still pending.  

Serbia  has  a  good  level  of  alignment  with  the  EU  acquis  on  aviation,  and  continues 
improving  it.  Serbia  is  close  to  fulfilling  all  obligations  stipulated  in  the  first  transitional 
period  of  the  European  Common  Aviation  Agreement.  On  the  Single  European  Sky  (SES), 
Serbia completed its transposition process and the local implementation of SES I and SES II 
on air traffic. No tangible progress  was made regarding lifting the suspension  of articles on 
the licensing of air carriers and the normalisation of the lower airspace regime over Kosovo, 
which remain important priorities. 

There is no specific legislation on combined transport. For the second year, Serbia has been 
allocating funds to promote the development of combined transport. Construction of the first 
modern intermodal terminal in Belgrade is expected to start in 2020.  

6.15.  Chapter 15: Energy  

EU  energy  policy  covers  energy  supply,  infrastructure,  the  internal  energy  market, 
consumers, renewable energy, energy efficiency, nuclear energy, nuclear safety and radiation 
protection.  

Serbia is  moderately  prepared  in  this field.  Limited progress was made including on last 
year’s recommendations, which remain essential. Serbia should therefore: 

  fully  unbundle  and  certify  Srbijagas,  Transportgas  and  Yugorosgaz,  and  develop 
competition  in  the  gas  market,  ensure  third-party  access  to  the  gas  network  as  well  as 
implement  the  conditions  requested  by  the  Energy  Community  Secretariat  on  the 
exemption of Gastrans;  

  fully  implement  outstanding  connectivity  reform  measures  as  committed  to  under  the 
Connectivity Agenda including filing for Elektrosever licencing urgently in the context of 
establishing a regional electricity market;  

  advance  on  green  energy  transition:  strengthen  human  resources  capacity  and  promote 
investment  in  energy  efficiency  and  in  substitution  of  coal  power  plants  with  gas  and 
renewables, implement  consumption-based metering and billing and  move towards cost-
reflective electricity prices.  

Serbia  maintained  a  high  level  of  alignment  with  the  EU  acquis  on  security  of  supply 
including  on  emergency  oil  stocks.  In  September  2019,  Serbia  adopted  an  emergency 
response plan for oil stocks. Oil  stocks continue to  increase slightly, corresponding, in  June 
2020, to 20 days of average daily consumption. However, the lack of gas market opening and 
third  party  access  to  the  gas  network  could  affect  security  of  supply  in  the  gas  sector. 
Preparations for the gas interconnector with Bulgaria have continued. The construction permit 
was  issued  in  September  2019  and  the  tender  documentation  is  currently  being  prepared. 
Serbia  also  continued  preparations  to  upgrade  the  Trans-Balkan  electricity  corridor,  in 
particular  the  transmission  line  connecting  Serbia  with  Bosnia  and  Herzegovina  and 
Montenegro and the transmission system in Western Serbia. The construction contract for the 
400 kV line Kragujevac-Kraljevo was signed in February 2020 and works commenced in June 
2020. 

Serbia is  still delaying the implementation  of its energy  agreement with  Kosovo. Following 
approval of a new connection agreement between the Kosovo transmission operator and the 
European  Network  of  Transmission  System  Operators  for  Electricity  ENTSO-E.  Serbia  has 

88 

 
 
not  yet  filed  for  the  licencing  of  Elektrosever.  Serbia  did  not  make  progress  in  setting  up 
regionally coordinated auctions with its Western Balkan neighbours.  

As  regards  the  internal  energy  market,  Serbia’s  primary  legislation  is  compliant  with  the 
EU’s  third  energy  package.  Trading  volumes  on  the  organised  power  exchange  market 
continued  to  increase.  In  June  2019,  Serbia  introduced  a  new  product  on  the  market,  the 
‘power  futures’.  The  electricity  balancing  market  is  operational,  despite  having  only  one 
provider  of  balancing  services.  The  functional  unbundling  of  EMS,  Serbia’s  electricity 
transmission  system  operator,  needs  to  be  completed  in  line  with  requirements  under  the 
Energy Community Treaty. 

The  unbundling  of  EPS,  Serbia’s  electricity  distribution  system  operator,  was  formally 
completed with the adoption of a new statute. However, concerns remain over how effective 
functional  unbundling  is  implemented  in  relation  to  independent  decision-making.  Serbia 
established  a  new  gas  transmission  company,  Transportgas,  and  transferred  246  employees 
from Srbijagas to the new company. However, transfer of assets and contracts, the adoption of 
the grid code, certification and the functional unbundling of Transportgas in accordance with 
the  third  energy  package  have  yet  to  take  place.  There  is  no  third-party  access  to  the  gas 
system infrastructure of Srbijagas and Yugorosgaz and their unbundling is still pending. The 
energy  regulator  AERS  revoked  the  certificate  issued  to  Yugorosgaz  Transport,  as  the 
company  did  not  comply  with  unbundling  legislation.  The  AERS  decision  to  exempt  the 
Serbian  part  of  the  Balkan  Stream  pipeline  project  from  third  energy  package  rules  is  still 
valid.  It  only  partly  reflects  the  conditions  set  by  the  Energy  Community  Secretariat.  In 
February  2020,  AERS  certified  the  Balkan  Stream  promoter  Gastrans  and  approved  the 
network code in April 2020. 

Electricity  and  gas  supply  prices  are  deregulated  for  all  customers.  Households  and  small 
customers  have  the  right  to  be  supplied  under  regulated  prices.  In  2018,  the  non-regulated 
market slightly increased and accounted for 48.6% of total end-user electricity consumption 
and  85.3%  of  total  end-user  gas  consumption.  In  the  same  year,  some  3.4%  of  delivered 
electricity quantities and 8.4% of gas quantities were subject to supplier switching. There is 
still no timeline for the phase-out of cross-subsidies between network and supply activities of 
Srbijagas.  Electricity  prices  should  cover  investment  needs  for  Serbia’s  energy  and  climate 
reforms, including transition from coal production to renewables, and take into account social 
security implications. The electricity price regulation needs to be modified accordingly.  

The  Serbian  Energy  Agency  is  legally  and  functionally  independent  from  any  other  public 
entity. It still has to establish a track record for enforcing compliance of regulated companies 
with  Serbian  and  Energy  Community  law  in  all  cases.  Staff  levels  are  still  insufficient  to 
allow the agency implement all regulatory responsibilities under the third energy package and 
the new acquis  upfront.  Further increasing the number of employees  from  the current  44 to 
51, as envisaged in the organigram, is pending. 

On  hydrocarbons,  Serbia  has  yet  to  align  its  legislation  with  the  Hydrocarbon  Licensing 
Directive,  especially  regarding  conditions  for  granting  and  using  authorisations  for 
prospection, exploration and production.  

On  renewable  energy,  Serbia  further  progressed  on  transposing  EU  acquis  into  its 
legislation.  Serbia  adopted  several  pieces  of  secondary  legislation  on  bio-fuels  but 
implementation is pending. Bio-fuels are not yet used in the transport sector. Human resource 
capacity in the Ministry of Mining and Energy’s department for renewables is insufficient. In 
September 2019, EMS became a full member of the European Association of Issuing Bodies, 
ensuring that Serbian guarantees of energy origin are accepted by other members. The latest 
data  for  2018  show  that  renewable  sources  accounted  for  a  share  of  20.32%  of  gross  final 

89 

 
 
energy consumption, which is well below Serbia’s national renewables target set at 27% for 
2020. Total capacity of wind power installed now exceeds 400 MW, while total capacity for 
other renewable technologies not including big hydropower plants is 100 MW. Serbia needs 
to intensify its efforts to switch from feed-in tariffs to an auction-based scheme. Implementing 
legislation  to  enable  prosumers  to  interact  with  the  energy  market  should  be  adopted.  Any 
further development of hydropower should be in line with EU environmental acquis.  

Serbia  achieved  some  progress  in  energy  efficiency  by  adopting  rules  on  energy  labelling. 
Serbia still needs to adopt amendments to the law on efficient use of energy, improve energy 
audits  and  energy  management,  and  implement  requirements  in  the  field  of  eco-design  and 
related  secondary  legislation.  Further  secondary  legislation  is  necessary  to  achieve  full 
alignment, in particular with the Directive on Energy Performance of Buildings. In November 
2019, Serbia submitted the third annual report under the Energy Efficiency Directive. Serbia 
is  not  taking  the  necessary  steps  to  implement  consumption-based  metering  and  billing  in 
district  heating  on  a  large  scale.  This  is  a  prerequisite  for  implementing  energy  efficiency 
measures  in  residential  buildings.  During  the  reporting  period,  human  resources  in  the  line 
ministry’s  department  for  energy  efficiency  slightly  increased.  Yet,  staff  levels  are  still 
insufficient.  Since  July  2019,  Serbia  has  been  applying  a  new  fee  on  energy  efficiency,  but 
does not allocate funds in full to finance energy efficiency measures. Better coordination and 
policy alignment between the Ministry of Mining and Energy and the Ministry of Finance is 
necessary, also in view of establishing a sustainable financing system. 

On  nuclear  energy,  nuclear  security  and  radiation  protection,  Serbia’s  legislation  is 
partially in line with the EU acquis. In August 2019, Serbia submitted its first National Report 
on  the  Nuclear  Safety  Convention.  In  March  2019,  Serbia  applied  to  become  party  to  the 
agreement between European Atomic Energy Community and non-EU countries on the early 
exchange  of  information  in  the  event  of  radiological  emergency  (ECURIE);  signing 
procedures are under way. Neither Serbia’s two  nuclear research reactors nor its  abandoned 
uranium mine are licenced. Licences for two old storage facilities expired in November 2019. 
An  action  plan  has  yet  to  be  drafted  for  decommissioning  the  research  reactors.  The  new 
radioactive  waste  processing  facility  has  not  been  licenced  yet.  Activities  to  improve  the 
radiological and security situation at the Vinča site have continued. The number of staff at the 
Serbian  Radiation  and  Nuclear  Safety  and  Security  Directorate  increased  from  21  to  32. 
Serbia  transferred  nuclear-related  tasks  and  staff  from  the  Ministry  of  Environmental 
Protection’s  inspectorate  to  the  Directorate.  Now,  it  is  mandated  to  deal  with  all  regulatory 
matters and its financing is sufficient to ensure its proper functioning including being able to 
carry out inspections.  

6.16.  Chapter 16: Taxation  

EU rules on taxation cover value-added tax and excise duties as well as aspects of corporate 
taxation.  They  also  deal  with  cooperation  between  tax  administrations,  including  the 
exchange of information to prevent tax evasion. 

Serbia  is  moderately  prepared  in  the  area  of  taxation.  Some  progress  was  made  with  the 
ratification  of  the  OECD  Convention  on  mutual  administrative  assistance  in  tax  matters 
(MAC) as well as on further reform of the tax administration. Last  year’s recommendations 
were thus partially implemented. 

In the coming year, Serbia should in particular: 

  remove discrimination in the application of excise duties on imported spirits;  

90 

 
 
  continue  with  implementation  of  the  tax  administration  reform  programme  in  order  to 
streamline  the  tax  administration’s  activities  while  ensuring  sufficient  human  and  IT 
resources for this purpose, improve tax collection and combat the informal economy. 

In  the  area  of  indirect  taxation,  amendments  to  the  law  on  VAT  were  adopted  in  October 
2019.  Some  of  these  amendments,  such  as.  those  concerning  the  calculation  of  VAT  for 
supplies  involving  vouchers,  or  those  on  lowering  the  threshold  for  VAT  refund  to  foreign 
travellers,  are  aimed  at  further  aligning  with  the  EU  legislation.  The  VAT  law  was  also 
amended to exempt goods used in the construction of infrastructure of public interest. Specific 
and ad valorem excise duties continue to be applied on tobacco products and the minimum is 
set twice a year. Excise duties on fuels are only partly harmonised with the EU acquis. With 
regard to direct taxation, amendments to the laws on income tax, corporate tax and property 
tax  were  adopted  in  December  2019  as  well  as  on  contributions  to  mandatory  social 
insurance.  The  laws  aimed  to  reduce  the  tax  wedge  on  salaries  in  order  to  stimulate  the 
increase in salaries and the creation of new jobs. Tax and contribution relief is envisaged for 
the  first  3  years  of  employment,  including  for  returnees  from  abroad.  While  the  laws  were 
adopted through the regular parliamentary  procedures,  insufficient time  was  given to  public 
consultations,  including  on  specific  fiscal  secondary  legislation.  Business  associations  were 
not  sufficiently  consulted  resulting  in  the  weakening  of  the  business  environment’s 
predictability.  In response to  COVID-19 pandemic and  with  the aim to  help  businesses, the 
government adopted in March a set of measures that included personal income tax and social 
contributions deferrals and postponement of second quarter profit tax payment to 2021. The 
economic effects of the pandemic in terms of increased unemployment and the reduction in 
disposable income and consumption will impact revenue from both direct and indirect taxes 
and consequently the country´s overall fiscal performance.       

As  regards  administrative  cooperation  and  mutual  assistance,  Serbia  ratified  the  OECD 
Convention on mutual administrative assistance in tax matters (MAC) in August 2019.  Serbia 
has double taxation agreements with 26 EU Member States (no agreement with Portugal) and 
it remains committed to apply the OECD base erosion and profit shifting minimum standards.  

Efforts to improve operational capacity and computerisation of the Tax Administration and 
to fight tax evasion, notably on VAT and excise duties, have resulted in better tax collection. 
The  Tax  Administration  still  lacks  administrative  capacity  and  adequate  staffing.  The 
implementation  of  the  2015-2020  general  programme  for  transformation  of  the  Tax 
Administration, and revised the 2018-2023 action plan for its implementation have continued 
and accelerated. The number of field offices has been reduced (from 78 to 37) as of July 2019. 
Some  non-core  activities  have  been  transferred  to  other  bodies  or  assigned  to  a  “non-core 
activities sector” still within the Tax Administration. The Large Tax Payers’ Office has been 
partly reorganised and its development programme for 2018-2023 adopted. The Strategic Risk 
Department has intensified its activities. A number of training sessions have been organised in 
2019.  Further  efforts  are  still  needed  to  improve  the  predictability  and  consistency  of  tax 
decisions  and  provide  timely  and  good  quality  services  to  tax  payers.  Appeal  procedures 
against Tax Administration decisions remain lengthy. 

6.17.  Chapter 17: Economic and monetary policy 

EU rules require the independence of central banks and prohibit them from directly financing 
the  public  sector.  EU  Member  States  coordinate  their  economic  policies  and  are  subject  to 
fiscal, economic and financial surveillance.   

Serbia  is  moderately  prepared  and  has  established  a  good  institutional  and  administrative 
framework  in  the  area  of  economic  and  monetary  policy.  Some  progress  was  made  in 

91 

 
 
economic  policy  coordination,  in  particular  in  designing  and  prioritising  structural  reforms. 
Despite the progress in implementing the reforms, in particular those related to the business 
environment, the pace of implementation needs to be further improved. The implementation 
of the budgetary procedure has improved. Recommendations of the 2019 report were partially 
implemented.  

In the coming year, Serbia should take measures to: 

  further  align  the  legislation  on  National  Bank  of  Serbia  (NBS)  with  the  EU  acquis  to 

ensure its full independence; 

  strengthen  fiscal  rules  by  making  them  more  binding  and  capable  of  anchoring  fiscal 

policy.  

On monetary policy, the legal  framework for the NBS is well developed. According to the 
law, price stability is the NBS’s principal objective, fully in line with the primary objective of 
the European System of Central Banks. The public sector does not have privileged access to 
financial institutions. However, further efforts are needed to comprehensively ensure the NBS 
independence and prohibition of monetary financing in line with the EU acquis.  

With  regard  to  economic  policy,  further  alignment  with  the  Directive  on  Requirements  for 
Budgetary Frameworks is needed. The overall institutional environment related to the budget 
process has improved, but remains challenging. The submission time of the 2020 draft budget 
allowed more time for a parliamentary debate than in the previous year. After four years, the 
authorities submitted the final annual budget execution 2014-2018 reports to the Parliament. 
The  alignment  of  fiscal  reporting  with  the  European  System  of  National  and  Regional 
Accounts  (ESA  2010)  is  incomplete  and  improvements  are  happening  slowly.  Programme 
budgeting needs to be strengthened and administrative and IT capacity bolstered. Fiscal rules 
are  weak,  non-binding  and  unable  to  anchor  fiscal  policy.  The  adoption  of  new  fiscal  rules 
was  delayed.  The  Fiscal  Council  is  an  independent  institution  and  actively  participates  in 
debates over economic and fiscal policy.  

In  response  to  the  COVID-19  pandemic,  both  economic  and  monetary  policy  had  to  be 
adjusted,  and  appropriate  measures  have  been  taken  in  the  immediate  aftermath  of  the 
beginning of the crisis. While the overall impact is impossible to envisage, it is certain that the 
negative impact on overall economic and notably fiscal performance will be significant.    

The 2020-2022 economic reform programme was submitted on time. As in previous years, 
its analytical diagnostics are well prepared. The structural reform framework is coherent and 
sufficiently comprehensive. In order to strengthen inter-ministerial coordination, an Economic 
Analysis Unit was created within the Public Policy Secretariat – and is now fully operational. 
However, as the implementation of some of the key reforms has been delayed, particularly in 
the  energy  sector,  further  efforts  are  needed  to  improve  the  capacity  for  economic  planning 
and inter-institutional coordination as well as budgeting. 

6.18.  Chapter 18: Statistics 

EU  rules  require  that  Member  States  are  able  to  produce  statistics  based  on  professional 
independence,  impartiality,  reliability,  transparency,  and  confidentiality.  Common  rules  are 
provided for the methodology, production and dissemination of statistical information.   

Serbia  is  moderately  prepared  in  the  area  of  statistics.  Some  progress  was  made  on  the 
implementation  of  last  year’s  policy  recommendations.  In  particular,  the  compilation  of 
macroeconomic  statistics  has  significantly  improved  in  line  with  the  European  System  of 
Accounts  (ESA)  2010.  The  submission  of  statistical  data  to  Eurostat  has  also  continued  to 
improve. However, the new statistical law has yet to be adopted. The Statistical Office needs 

92 

 
 
to  retain highly qualified staff and  recruit additional staff to  meet  the obligations of the EU 
acquis.  

In the coming year, Serbia should in particular:       

  adopt the new statistical law to increase the independence of the Statistical Office;  

  continue preparations for the population and housing census 2021; 

  further improve compilation of macroeconomic statistics in line with ESA 2010. 

The  legal  framework  for  statistical  infrastructure  is  largely  in  line  with  the  European 
Statistics  Code  of  Practice.  The  long  pending  law  on  official  statistics  enhancing  the 
professional  independence  of  the  Statistical  Office  (SORS)  has  still  not  been  adopted, 
resulting in the lack of progress in this area. The administrative capacity of the SORS needs to 
be  further  strengthened,  as  its  operations  remain  hampered  by  the  lack  of  skilled  staff.  The 
SORS  has  signed  memoranda  of  understanding  with  a  large  number  of  administrative  data 
providers, but further efforts are needed to broaden and develop this cooperation in order to 
improve quality of statistical production. The SORS has continued to increase submission of 
data to Eurostat, but the coverage of data submission needs to be further expanded. The main 
classifications  (NACE  Rev.  2,  ISCO-08)  are  aligned  with  the  EU  acquis.  Registers  are 
updated regularly. 

Concerning  territorial  classification,  Serbia  has  continued  to  compile  regional  ESA  2010 
data  and  submit  them  to  Eurostat.  Serbia  provided  regional  accounts  data  at  level  2  and  3 
according  to  the  new  benchmark  for  national  accounts,  but  the  number  of  years  is  not  yet 
uniform across variables.  

Regarding  macroeconomic  statistics,  the  SORS  continued  to  compile  quarterly  and  annual 
GDP at current and constant prices. Seasonally adjusted quarterly national accounts are sent 
to Eurostat.  In 2019, the SORS completed the implementation of the benchmark revision of 
its  GDP  back  data  to  eliminate  the  breaks  in  series.  Revised  GDP  data  for  1995-2004  were 
published in October 2019, completing the data set from 1995. Serbia has sent annual data on 
employment,  compensation  of  employees  and  gross  wages  and  salaries  for  2015-2017. 
However, all quarterly data on employment, compensation of employees and grows wages are 
yet  to  be  provided.  Quarterly  sector  accounts  have  yet  to  be  compiled.  Serbia  has  further 
advanced  work  on  compiling  supply-use  and  input-output  tables  –  the  tables  for  2015-2017 
were published in September 2019 and transmitted to Eurostat. The SORS sends good-quality 
monthly  data  on  international  trade  in  goods  according  to  the  required  breakdown  by 
mandatory partner country. However, further efforts are needed to complete the compilation 
of  trade  by  enterprise  characteristics  (TEC)  data  to  meet  all  requirements  set  out  in  the 
compilers guide on TEC. The NBS compiles the monthly and quarterly balance of payments, 
as well as quarterly international investment position data, in compliance with the Balance of 
Payments  and  International  Investment  Position  Manual  (BPM6).  It  sends  annual  data  on 
international trade in services in accordance with the Balance of Payments Vademecum. The 
SORS  continues  to  provide  the  Commission  twice  a  year  with  notification  tables  for  the 
excessive deficit procedure (EDP) that are jointly prepared with the NBS and the Ministry of 
Finance. The number of submitted tables increased in 2019; yet the quality and completeness 
of  the  EDP  notification  data  and  the  government  finance  statistics  need  to  be  further 
improved. NBS is setting up the system for compiling the financial accounts statistics, but the 
system needs to be further developed. Continued efforts are needed to produce the complete 
data required by the ESA 2010 transmission programme. 

93 

 
 
With regard to structural business statistics, data coverage is not yet fully in line with the EU 
acquis  but  methods  for  sending  data  have  been  established.  Most  of  the  data  on  internal 
tourism  and  some  data  on  national  tourism  are  collected.  For  inland  waterway,  road  and 
railway  transport  data  are  collected  but  need  to  be  further  harmonised  with  the  acquis.  Air 
transport  statistics  are  already  fully  compliant.  Serbia  fully  complies  with  the  EU  acquis  in 
research and development statistics as all R&D sectors are covered by statistical survey. The 
Community innovation survey is conducted regularly every two years and the data are sent to 
Eurostat.  The  annual  surveys  on  information  and  communication  technology  fully  meet  EU 
standards  and  are  carried  out  regularly,  covering  households/individuals  and  businesses. 
Serbia is fully compliant for most of the short-term business statistics indicators. 

Serbia partially complies with the EU acquis on social statistics. The survey on income and 
living conditions is carried out regularly in compliance with EU standards and data are sent to 
Eurostat.  Social  protection,  labour  market  and  labour  cost  statistics  are  broadly  in  line  with 
the acquis. Serbia carries out the labour force survey (LFS) according to the regulations and 
promptly  sends  good  quality  data  to  Eurostat.  It  also  promptly  provides  good  quality  LFS 
quality  reports  (annual  and  quarterly).  The  LFS  data  are  disseminated  regularly.  The 
fieldwork  for  the  structure  of  earnings  survey  was  carried  out  in  2019.  Work  to  produce 
statistics on job vacancies is only progressing slowly. Public health statistics in line with the 
acquis are not yet fully available. In particular, causes of death statistics and non-expenditure 
healthcare  data  are  highly  compliant,  while  expenditure  healthcare  statistics  and  European 
health interview survey data are lacking. However, European health interview survey (EHIS) 
was  conducted  in  2019  and  data  submission  is  expected  in  2020  (in  line  with  the  EHIS 
regulation).  Statistics  on  external  migration  and  asylum  are  collected  by  the  Ministry  of 
Interior,  and  are  only  partly  harmonised  with  the  relevant  EU  requirements.  Further 
harmonisation is needed, particularly on reporting on issuing residence and work permits and 
on  migration.  Statistics  on  education  and  vocational  training  are  partly  compiled.  Serbia 
progressed  in  preparing  the  methodology  and  the  technical  specifications  for  the  next 
population and housing census in 2020/2021. A pilot census was conducted in April 2019 in 
51  municipalities/cities,  with  two  data  collection  techniques  tested.  The  law  on  census  of 
population  was  adopted  in  February  2020.  Other  activities  related  to  the  2021  population 
census are ongoing.   

Regarding  agricultural  statistics,  Serbia  is  highly  compliant  in  producing  crop  statistics, 
livestock meat statistics as well as milk and milk products statistics. Serbia has continued to 
submit aquaculture data to Eurostat and is fully compliant with EU requirements in fisheries 
statistics.  Regular  submission  of  data  on  activity  of  hatcheries  and  eggs  for  consumption 
started  in  2019.  Further  efforts  are  needed  in  continuing  the  development  of  a  vineyard 
register, which is established but not fully in use yet. Preparations for agriculture census – to 
take place after the 2021 population census – are ongoing. The farm structure survey 2018 has 
been  conducted  and  data  was  sent  to  Eurostat,  together  with  the  national  methodological 
report, in June 2019. 

The annual and monthly energy statistics are produced for all relevant energy sources: coal, 
electricity  and  gas  data  are  regularly  sent.  Waste  and  water  statistics  have  been  collected 
and  data  on  waste  treatment  infrastructure  are  regularly  submitted.  Some  environmental 
accounts data are produced, while some new data, particularly on environmental goods and 
services sector accounts, has started to be produced. 

6.19.  Chapter 19: Social Policy and employment 

Serbia  is  moderately  prepared  in  the  area  of  social  policy  and  employment.  Serbia  made 
limited progress in further aligning its legislation in this area with the EU acquis. Regarding 

94 

 
 
last year’s Commission recommendations, budget allocations for active labour market policies 
slightly increased in 2019 but decreased again in 2020. They are by far too low to cover the 
number of jobseekers. Other recommendations of last year remain valid.  

Therefore, in the coming period, Serbia should in particular: 

  ensure adequate financial and institutional resources for employment and social policies to 
more systematically target the young, women and long-term unemployed, and improve the 
adequacy of social benefits for people below the poverty threshold; 

  significantly strengthen the bipartite and tripartite social dialogue at all levels; 

  ensure consistent implementation of the  labour and social  welfare legislation throughout 

the country. 

The  action  plan  for  aligning  with  the  EU  acquis  in  social  policy  and  employment  in  the 
context of chapter 19 of the accession negotiations was adopted in May 2020. 

In the field of labour law, the law of 2014 is only partially aligned with the EU acquis. Serbia 
adopted  a  Law  on  Work  through  Temporary  Employment  Agencies  in  December  2019.  A 
new law on the right to strike has yet to be adopted. The proportion of undeclared work stood 
at 18.2% at the end of 2019.  Labour inspections have focused on tackling undeclared work, 
but do not yet have a significant impact. The law on inspection oversight needs to be amended 
to comply with the relevant International Labour Organisation Conventions that were ratified 
by Serbia, notably to ensure that labour inspectors are empowered to enter workplaces freely 
and without giving notice. 

In the area of health and safety at work, a draft law on health and safety at work has yet to 
be adopted. Serbia adopted implementing legislation on health and safety measures for work 
on  display  screen  equipment  and  work  during  exposure  to  noise  and  to  vibrations.  After  a 
record number of fatalities in the workplace in 2018 (53), the number of fatal injuries in 2019 
increased  further  to  54,  with  the  majority  of  cases  occurring  again  in  the  construction 
industry. This was linked to a sharp increase in the number of construction sites, but also to 
the lack of enforcement of the health and safety legislation in place.  

Social  dialogue  remains  weak,  in  particular  regarding  the  involvement  of  social  partners  in 
policy  developments  relevant  to  them.  Serbia  still  needs  to  adjust  the  legal  framework  and 
strengthen the capacity  of social  partners to  foster the use of collective  bargaining. Sectoral 
collective agreements are typical in the public sector. However, they are hardly concluded in 
the private sector. No progress was made in tripartite dialogue. In the second half of 2019, the 
minimum  hourly  wage  was  increased  by  11.1%  by  means  of  a  government  decision,  as 
consensus could not be reached within Serbia’s Economic and Social Council. 

On  employment  policy,  labour  market  indicators  continued  to  improve  in  2019.  The 
employment  rate  for  15-64  year  olds  increased  from  58.8%  in  2018  to  60.7%  in  2019. 
Unemployment  went  down  from  13.3%  in  2018  to  10.9%  in  2019,  while  the  activity  rate 
increased from 67.8% in 2018 to 68.1% in 2019. Youth unemployment decreased from 29.7% 
in  2018 to  27.5% in  2019 but  remains high.  Long-term unemployed people, women,  young 
people and low-skilled workers still face severe challenges integrating into the labour market. 
Measures  aimed  at  promoting  the  employment  of  Roma  have  yet  to  deliver  results.  Budget 
allocations for active labour market policies slightly increased in 2019 compared to 2018 but 
decreased again in 2020.They are by far too low to cover the number of jobseekers. Only 28% 
of people who are registered as unemployed benefit from a measure, and most measures are 

95 

 
 
 
one-off  actions  such  as  job-search  training  sessions  and  job  fairs.  The  2020  national 
employment  action  plan  was  adopted  in  December  2019.  The  first  report  on  the 
implementation  of  the  employment  and  social  reform  programme  (for  2016-2017)  was 
eventually  published in April 2019 and the second report (for 2018) in February 2020. 

In  the  context  of  the  COVID-19  outbreak,  aid  instruments  were  introduced  for  preventing 
layoffs and negative labour market trends, by means of direct grants for employee salaries and 
postponement  of  tax  and  social  contributions.  Workers  engaged  on  a  contract  basis 
(temporary or seasonal work contracts, service contracts, agency contracts, vocational training 
and  advanced  training  contracts,  supplementary  work  contracts)  are  not  covered  by  these 
measures. The impact of the pandemic on unemployment needs to be closely monitored and 
adequate measures implemented. 

There  were  no  developments  as  regards  preparations  for  the  European  Social  Fund,  apart 
from a few awareness-raising events.  

In  the  area  of  social  inclusion  and  social protection,  in  2018,  7.1%  of  the  population  was 
considered  to  be  living  in  absolute  poverty  (7.2%  in  2017).  According  to  the  survey  on 
income  and  living  conditions  (SILC),  carried  out  for  the  sixth  time  in  2018,  the  at-risk-of-
poverty rate was 24.3% (EU-28 17.1%) and the at-risk-of-poverty or social exclusion rate was 
34.3% (EU-28 21.8%). As in previous years, there is more poverty in rural areas than in urban 
areas (10.4% vs. 4.8%). Some 10% of employed people are at risk of poverty, which means 
that  they  cannot  fulfil  their  basic  needs,  despite  working.  Some  58.4%  of  the  population  is 
subjectively poor, i.e. they respond to the question on the possibility for a household to ‘make 
ends meet’ with ‘difficulty’ and ‘great difficulty’, positioning Serbia at the bottom of the list 
of European countries that conduct SILC surveys. Inequality in income distribution stood at 
35.6% of the Gini coefficient according to income in 2018. The income quintile ratio was at 
8.58 and is hence considerably higher than the EU average at 5.12. The impact of the COVID-
19 pandemic on vulnerable individuals needs to be closely monitored and adequate measures 
implemented.  A  new  strategy  for  social  protection  in  Serbia  for  2019-2025,  amendments  to 
the  law  on  social  welfare,  and  a  draft  law  on  social  cards,  are  still  pending.  Payments  for 
maternity  leave  were  reduced  as  a  result  of  the  2018  amendments  to  the  law  on  financial 
support  for  families  with  children,  as  women  now  need  to  have  worked  18  consecutive 
months – instead of 12 months prior to the amendments – to be entitled to the full amount of 
maternity compensation. The coverage and adequacy of cash benefits to provide for essential 
needs is insufficient to cover essential needs. In addition, the quality and coverage of service 
need to improve, and oversight and regulatory mechanisms, monitoring and evaluation should 
be  strengthened.  No  progress  was  made  in  local-level  social  care  services  or  in  the  de-
institutionalisation  process.  The  system  of  earmarked  transfers  introduced  in  2016  by  the 
social  welfare  law  is  still  not  implemented  systematically  and  transparently.  Budgetary 
allocations  are  now  available  annually,  but  without  multi-annual  commitments  that  would 
allow for the continuity of service provision at local level and for an evidence-based system of 
priority setting and monitoring of results.  

In the field of non-discrimination in employment and social policy, the authorities need to 
step  up  their  efforts  on  implementing  recommendations  from  the  Commissioner  for  the 
Protection  of  Equality  on  developing  an  anti-discrimination  policy  for  employers  in  Serbia 
(‘Equality Code of Practice’). A new law on gender equality, as well as draft amendments to 
the law prohibiting discrimination, have yet to be adopted.  

In  the  area  of  equal  opportunities  between  women  and  men  in  employment  and  social 
policy, the employment rate for men (15-64 years) is 12.8 percentage points higher and their 
activity rate 13.6 percentage points higher than those for women. Women’s inactivity reflects: 

96 

 
 
i)  unpaid  work  in  the  household,  including  care  of  children,  sick  and/or  elderly  people;  ii) 
inadequate  support  in  reconciling  work  and  family  responsibilities;  iii)  employers’ 
discriminatory  treatment  of  young  women;  iv)  the  existing  wage  gap;  v)  lower  statutory 
retirement  age;  and  vi)  the  existence  of  a  statutory  minimum  base  for  social  insurance 
contributions, which discourages formal part-time work. Although the legislation grants both 
maternity  and  paternity  leaves,  gender-based  stereotypical  preconceptions  persist  about 
childcare and household work being a woman's responsibility. The lack of state services for 
childcare in rural areas increases the amount of unpaid household work for women. Women 
have  been  at  the  frontline  of  the  COVID-19  pandemic,  as  healthcare,  shop  and  pharmacy 
workers.  Closure  of  businesses  is  expected  to  have  a  negative  effect  on  women-dominated 
professions.  

6.20.  Chapter 20: Enterprise and industrial policy 

EU enterprise and industrial policy strengthens competitiveness, facilitates structural change 
and  encourages  a  business-friendly  environment  that  stimulates  small  and  medium  size 
enterprises (SMEs).  

Serbia  is  moderately  prepared  on  enterprise  and  industrial  policy.  Some  progress  was 
made,  in  particular  on  the  new  strategy  for  industrial  policy.  Nevertheless,  last  year’s 
recommendations remain to a large extent valid.  

In the coming year, Serbia should in particular: 

  develop  an  action  plan  for  the  implementation  of  the  new  industrial  strategy  using  the 

findings of the smart specialisation exercise and start with its implementation; 

  make  further  efforts  to  improve  the  predictability  of  the  business  environment,  with  the 

emphasis on involving business more directly in the process of regulation. 

The main tool of industrial policy remains the strategy and policy for industrial development: 
the new strategy for industrial development 2021-2030 was adopted in March 2020. However, 
an  action  plan  outlining  concrete  actions  for  its  implementation  has  yet  to  be  adopted.  The 
action  plan  should  be  developed  using,  among  others  things,  the  findings  of  the  smart 
specialisation exercise. The new strategy puts an emphasis on replacing the current model of 
competitiveness  based  on  cost  advantage  (i.e.  cheap  low-skilled  workforce)  by  skill-based 
advantage,  i.e.  knowledge-based  industries.  The  2021-2030  strategy  also  has  a  mix  of 
horizontal policy measures implemented in six specific areas in order to achieve specific goals 
as well. A Smart Specialisation Strategy was also adopted in February 2020. 

On enterprise policy, the strategy to support the development of SMEs, entrepreneurship and 
competitiveness  2015-2020  is  being  implemented  and  remains  a  relevant  policy  document. 
An  independent  mid-term  evaluation  of  the  strategy  was  conducted  in  early  2019.  A  new 
strategy  is  planned  for  2020.  As  a  response  to  the  COVID-19  outbreak,  the  government 
adopted  a  set  of  measures  –  deferral  of  tax  obligations,  payment  of  salaries  to  employees 
primarily aimed at assisting SMEs, access to additional loans – which all aim to alleviate the 
negative consequences of the crisis for businesses. By June 2020, the number of companies in 
the  privatisation  process  fell  to  72  from  87  at  the  same  time  the  year  before.  This  does  not 
meet the target set by the Serbian authorities (50 companies by the end of 2019) due to a lack 
of interest on the part of investors for most of the companies in the portfolio. 

Serbia needs to increase predictability in the  business and administrative environment, in 
particular  for  SMEs.  To  this  end,  performance  measurements  for  policy-making  activities 
should be developed and more emphasis put on implementing the ‘think small first’ principle. 
A  multiannual  reform  aimed  at  optimising  and  improving  the  transparency  of  all 

97 

 
 
administrative procedures is under way. Proposals for optimising these procedures are drafted 
in  consultation  with  the  private  sector.  After  attempting  to  streamline  and  increase 
transparency as regards the system of para-fiscal charges in 2018 through the Law on Fees for 
the  Use  of  Public  Goods,  some  charges  (e.g.  the  environmental  fee)  were  (re)introduced  in 
2019,  without  proper  public  consultation.  The  lack  of  transparency  in  adopting  such 
(secondary)  legislation  negatively  affects  business  predictability.  In  particular,  Government 
decisions in a number of businesses-relevant areas are occasionally taken without appropriate 
consultation  and  under  such  time  constraints  that  businesses  do  not  have  sufficient  time  to 
plan  their  operations  under  new  rules.  The  regulatory  impact  assessment  and  the  SME  test 
need  to  be  systematically  carried  out  when  formulating  laws  and  secondary  legislation.  In 
general,  businesses  need  to  be  better  informed  about  regulatory  changes  and  be  invited  to 
provide input in the process leading up to the adoption of legislation or rules.  

On enterprise and industrial instruments, Serbia continues to use budgetary subsidies for 
newly  created  jobs  as  an  incentive  for  foreign  direct  investments.  The  lack  of  specialised 
business-related services limits the potential of domestic companies to modernise. Favourable 
loans and guarantees for SMEs are provided by the Ministry of Economy and Development 
Fund  through  joint  programmes  with  commercial  banks,  including  through  the  EU 
programme for the competitiveness of small and medium-sized enterprises (COSME) and the 
Instrument for Pre-accession Assistance (IPA). These programmes provide financial support 
for the purchase of production equipment, financial support to start-ups, and financial support 
for development projects. New financial instruments need to be developed to better respond to 
the needs of companies, particularly the most innovative ones. Serbia successfully participates 
in the EU’s COSME programme for SMEs with participation in COSME’s major actions like 
Erasmus for Young Entrepreneurs and the Enterprise Europe Network, giving opportunities to 
build business and technology partnerships between SMEs from both sides. With regard to the 
payment  discipline,  Serbia  should  speed  up  in  aligning  its  rules  on  payments,  indemnity 
interest rates, expedited recovery procedures and compensation with the EU Directive in this 
area.   

In sectoral policies, the current support for investment continues to prioritise manufacturing. 
The new industrial strategy should take into account the findings of the smart specialisation 
pilot project and decide whether some sectors merit more support than others. Until recently, 
the approach in policy-making was not sector-specific, resulting in the lack of specific sector 
policies and programmes (except for tourism). This has changed recently as four sectors (food 
processing, wood and furniture, rubber and plastic, and machinery and equipment) have been 
identified  as  sectors  with  highest  growth  potential  among  industries.  Monitoring  and 
evaluation will be carried out based on specific sectoral strategies. 

6.21.  Chapter 21: Trans-European networks  

The EU promotes trans-European networks in the areas of transport, telecommunications and 
energy to strengthen the internal market and contribute to growth and employment. 

Serbia  is  moderately  prepared  for  trans-European  networks.  Some  progress  was  made 
overall. Positive steps were taken on the 2019 recommendation on the gas interconnector with 
Bulgaria. The other recommendations from 2019 remain fully valid. 

In the coming year, Serbia should in particular:  

  revise  and  adopt  an  updated  transport  strategy  in  line  with  EU  guidelines  for  the 
development  of  trans-European  transport  networks,  providing  coherence  to  Serbia’s 
strategic framework for transport;  

98 

 
 
  strengthen  administrative  capacities  for  transposing,  implementing  and  enforcing  the 

Trans-European networks acquis.  

On transport networks, Serbia made limited progress on connectivity reform measures in the 
framework of the Western Balkan 6 connectivity agenda. Multiannual maintenance plans and 
their  implementation  as  well  as  more  efficient  border  crossing  procedures  for  road  and  rail 
need to be addressed more rigorously. Serbia must ensure that its transport network projects 
are  implemented  in  line  with  the  TEN-T  regulatory  framework,  in  addition  to  fulfilling  EU 
standards  on  public  procurement,  state  aid  and  environmental  impact  assesments.  All  rail 
infrastructure  needs  to  comply  with  the  EU’s  technical  specifications  for  interoperability. 
Additionally,  investments  need  to  be  implemented  in  accordance  with  cost-benefit  analyses 
following EU best practices.  

In September 2019, the Secretariat of the Transport Community was inaugurated in Belgrade. 
Serbian authorities supported the opening of the Secretariat and the smooth start it made, and 
actively  participated  in  its  work  (Regional  Steering  Committee  meetings,  technical 
committees  on  railway,  transport  facilitation,  road  safety  and  road).  In  the  coming  period, 
intensive  cooperation  on  all  substantive  transport  matters  will  be  key  and  Serbia  should 
continue to intensify its cooperation under the Transport Community Treaty.  

As  a  reaction  to  the  COVID-19  pandemic,  green  corridors  were  established  and  are 
functioning effectively throughout the major corridors. 

As regards road infrastructure, the construction of the Orient East-Med corridor (Corridor X) 
was  finalised  in  2019.  The  part  of  the  corridor  going  towards  the  border  with  North 
Macedonia (May 2019) and the part going towards the border with Bulgaria (November 2019) 
were both opened. Construction of the first section on the Niš–Merdare highway is expected 
to  start  in  2020.  As  regards  rail  infrastructure,  construction  works  on  the  Niš–Dimitrovgrad 
railway line, due to start in 2019, were delayed. Serbia actively pursues upgrading its inland 
waterway infrastructure. 

On trans-European energy networks, administrative capacities for transposing, implementing 
and enforcing the EU acquis remain insufficient and need to be improved. Energy networks 
need to be upgraded in line with EU legislation on trans-European networks. Serbia continued 
to  prepare  for  the  upgrade  of  the  Trans-Balkan  electricity  corridor,  in  particular  for  the 
overhead transmission line connecting Serbia with Bosnia and Herzegovina and Montenegro 
and the upgrade of the transmission system in Western Serbia to 400 kV voltage level. Good 
progress  was  made  on  the  gas  interconnector  between  Serbia  and  Bulgaria.  In  September 
2019,  state  authorities  issued  the  construction  permit:  the  preparation  of  the  tender 
documentation is underway. 

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

Regional  policy  is  the  EU’s  main  tool  for  investing  in  sustainable  and  inclusive  economic 
growth.  Member  States  bear  responsibility  for  its  implementation,  which  requires  adequate 
administrative capacity and sound financial management of projects’ design and execution.  

Serbia is moderately prepared on regional policy and coordination of structural instruments. 
Limited  progress  has  been  made  in  last  year’s  recommendations,  starting  with  the 
implementation of the adopted action plan for meeting the EU cohesion policy requirements.  

The  2019  recommendations  remain  largely  valid  also  in  the  coming  year,  Serbia  should  in 
particular:  

99 

 
 
  timely  implement  the  adopted  action  plan  for  meeting  the  requirements  of  the  EU 
cohesion  policy,  including  nominating  the  institutions  and  bodies  for  cohesion  policy 
implementation, as necessary and appropriate in view of the revision of this EU policy; 

  ensure  adequate  capacity  to  manage  indirect  management  programmes  under  EU 
pre-accession assistance and guarantee that the key positions in the structures are filled on 
a permanent basis; 

  speed up the implementation of IPA II pre-accession funds in order to avoid last-minute 

contracting. 

Further  preparatory  work  was  carried  out    to  introduce  the  legislative  framework  for  EU 
cohesion policy into the national system.  In November, the Ministry of European Integration 
established a working group  to draft the law on cohesion policy by the end of 2020. The law 
should  define  the  goals  of  cohesion  policy,  introduce  key  principles  and  establish  the  legal 
basis for developing the institutional framework for implementation of cohesion policy.  

The transposition of key legislation under other chapters (e.g. acquis on environmental impact 
assessment,  anti-discrimination  legislation,  public  procurement,  and  state  aid  control)  is  a 
prerequisite for using European structural and investment funds. Multiannual budget planning 
is  regulated  through  the  law  on  the  budget  system.  National  co-financing  for  EU  pre-
accession  programmes  is  ensured  at  project  level.  A  systematic  approach  to  ensure  national 
co-financing for multiannual cohesion policy programmes needs to be developed. 

The institutional framework for cohesion policy has still to be decided. The appointment of 
institutions and bodies to implement the cohesion policy, planned for 2019 in the action plan, 
has  been  delayed  and  should  be  advanced,  along  with  building  up  their  capacity.  The 
institutional framework for managing the EU’s Instrument for Pre-accession Assistance (IPA) 
is  in  place.  However,  the  implementation  capacities  of  the  indirect  management  structures 
need to be improved in order to ensure timely and efficient contracting and implementation of 
IPA programmes.  

Weaknesses in the administrative capacity in key institutions managing EU funds still need 
to  be  addressed.  The  continuous  changes  in  key  managerial  positions  within  the  indirect 
management  structures  and  appointments  in  acting  functions  make  the  system  unstable  and 
limit  the  capacity  to  smoothly  implement  programmes.  The  high  turnover  of  staff  also 
remains  an  issue  to  be  tackled  in  the  context  of  the  public  administration  reform,  with  the 
development  of  an  appropriate  retention  policy  in  the  public  sector.  The  practice  of 
contracting a large proportion of IPA funds very close to the contracting deadline needs to be 
avoided.  

Capacity  building  activities  for  managing  EU  pre-accession  funds  and  for  introducing 
cohesion policy have continued. The training courses provided by the National Academy of 
Public  Administration  include  the  programme  “Managing  the  international  development 
assistance  and  EU  funds”  as  part  of  the  general  training  programme  for  civil  servants. 
Regarding cohesion policy, two courses were provided: “Introduction to EU cohesion policy” 
and “Planning and programming in the context of cohesion policy”. 

In the area of programming  the Law on the planning system aims to improve the system of 
public  policy  management  and  medium  term-planning  allowing  for  better  links  between 
public policies and the medium-term expenditure framework. Regarding the need to allocate 
resources efficiently and build sector pipelines for future structural funds management, Serbia 
adopted the Decree on Capital Projects  Management in July 2019, establishing a system for 
preparation, selection and monitoring of capital investments. However, Serbia needs to ensure 

100 

 
 
that the full methodology of the decree is applied to all capital investments regardless of the 
type  of  investment  or  the  source  of  financing,  including  those  under  intergovernmental 
agreements.  

On  monitoring  and  evaluation,  the  relevant  monitoring  committees  set  up  under  indirect 
management continue to meet regularly. The evaluation plan for indirect management of IPA 
funds has been adopted but implementation has not yet started. The assessment of readiness 
for monitoring and evaluation in accordance with the requirements of cohesion policy needs 
to be carried out. 

On financial management, control and audit, the capacities of the national systems in place 
for  indirect  management  of  IPA  funds  have  been  improved.  The  Audit  Authority  is  
established  and  operational.  The  newly  developed  management  and  information  system  for 
IPA is being tested.  

6.25.  Chapter 25: Science and research 

The  EU  provides  significant  support  to  research  and  innovation.  All  Member  States  can 
benefit  from  the  EU's  research  programmes,  the  more  so  where  there  is  specific  excellence 
and solid investment in research. 

Serbia is at a good level of preparation in the area of science and research. Some progress 
was  made  with  the  adoption  of  the  first  Smart  Specialisation  Strategy  and  the  new  law  on 
science and research. National funding for research increased, in particular through the newly 
established  Science  Fund,  but  remains  low  as  a  percentage  of  GDP.  Last  year’s 
recommendation have therefore not been sufficiently addressed.   

In the coming year, Serbia should in particular: 

  start to implement the smart specialisation strategy; 

  further increase the national funding for research; 

  stimulate  more  intense  cooperation  between  industry  and  academia,  in  line  with  the 

national research strategy. 

On research and innovation policy, the main priorities of the European Research Area are 
incorporated in the strategy on scientific and technological development. Some progress was 
made  with  the  new  law  on  science  and  research  and  the  adoption  of  the  first  smart 
specialisation strategy, although an action plan for the strategy has yet to  be adopted. A new 
funding mechanism, the Science Fund, was established, bringing more competitive approach 
into the national system. National open science and open access initiatives are well underway. 
The  Strategy  for  the  Development  of  Artificial  Intelligence  for  2020-2025  was  adopted  in 
December  2019  and  an  action  plan  for  its  implementation  is  being  developed.  In  the  2020 
European innovation scoreboard Serbia is listed as a moderate innovator, with an increase in 
performance  of  13.3%.  Work  on  developing  a  new  research  and  innovation  strategy  for  the 
next 7-year period and a roadmap on science, technology and innovation – based on the smart 
specialisation  strategy  –  has  started.  The  national  level  of  investment  in  research  further 
increased for 8% compared to the year before, but remains low at 0.92% of GDP with only 
one third of this amount coming from the private sector.  

Regarding the EU framework programme and international cooperation, Serbia continues to 
be  active  and  successful  in  Horizon  2020  as  well  as  in  EUREKA  and  the  European 
Organisation  for  cooperation  in  science  and  technology  (COST).  In  March  2019,  Serbia 
joined CERN, the European organisation for nuclear research and the European Social Survey 
ESFRI research infrastructure. 

101 

 
 
In  Horizon  2020,  Serbian  entities  have  participated  503  times  to  350  signed  grants  of 
collaborative,  Marie  Skłodowska-Curie  (MSCA),  European  Research  Council  (ERC)  and 
SME Instrument actions. Serbia received EUR 113.1 million of direct EU contributions and 
reached a success rate of 11.6% as compared to 12% of the overall Horizon 2020 programme. 

With  regard  to  measures  for  the  Innovation  Union,  the  Serbian  Innovation  Fund  and  the 
Science  and  Technology  Park  Belgrade  continues  to  be  active  with  increased  contributions 
from the budget. In addition to the call published in April for innovative projects combating 
the  effects  of  the  COVID-19  pandemic,  the  Fund  should  provide  additional  grants  for  the 
same  purpose  in  the  future.  As  the  private  sector  continues  increasing  its  investment  in 
research, the government needs to make more decisive steps to support cooperation between 
businesses  and  academia.  In  this  regard,  Serbia  should  actively  implement  the  new  smart 
specialisation  strategy  and  ensure  that  its  findings  are  incorporated  into  the  new  industrial 
strategy. 

6.26.  Chapter 26: Education and culture  

The EU supports cooperation in education and culture through funding programmes and the 
coordination of Member State policy through the open method of coordination. The EU and 
the Member States must also prevent discrimination and ensure quality education for children 
of migrant workers, including those from disadvantaged backgrounds.   

Serbia remains at a good level of preparation in the area of education and culture. Overall, 
good  progress  was  made  on  the  implementation  of  last  year’s  recommendations.  Some 
progress was made in modernising the curricula and good progress was made in referencing 
the  national  qualifications  framework  (NQF)  system  with  the  European  qualifications 
framework. Serbia took active part in the Erasmus+ programme as a programme country. 

Serbia  partially  implemented  recommendations  from  last  year  and  should  thus  take  further 
measures to:  

  increase participation in early childhood education and care, in particular of children from 

disadvantaged backgrounds;  

  make the institutional set-up of the NQF fully operational; 

  ensure full compliance of the policy and institutional framework for quality assurance in 
higher  education  with  the  recommendations  of  the  European  Association  for  Quality 
Assurance in Higher Education. 

In  the  area  of  education  and  training,  the  education  strategy  and  its  action  plan  are  being 
implemented, albeit with delays, particularly in higher education. The student population has 
continued  to  decrease  due  to  negative  demographic  trends  and  emigration.  Enrolment  and 
attainment rates in pre-university education remain high. However, still only half of children 
from aged between 6 months and 6.5 years attend formal early childhood education and care. 
The rate of early school leavers increased slightly to 6.8% in 2018 from 6.2% in the previous 
year. Lifelong learning participation slightly dropped to 4.1%, which is far below the national 
and  EU  targets  (7%  and  15%  respectively).  Teachers  should  be  consistently  supported  in 
implementing  the  ongoing  outcome-based  curricular  changes,  particularly  with  regard  to 
developing students’ key competencies.  Legal  preconditions  are set  for the establishment of 
an education management information system, which is expected to improve significantly the 
monitoring and management of the education system.  

The reform of the general secondary education curriculum continued, aiming to increase the 
take-up  of  general  secondary  education  on  the  account  of  vocational  education  and  training 

102 

 
 
(VET).  Improving  the  relevance  of  VET  needs  to  accelerate  by  modernising  qualifications 
standards and abolishing the obsolete ones. The law on dual education is fully implemented as 
of  the  2019/2020  school  year.  The  national  work-based  learning  model  in  VET  should  be 
further  developed  with  a  particular  focus  on  setting  up  quality  assurance  and  monitoring 
mechanisms.  The  employment  rate  of  VET  graduates  (aged  20-34)  remains  low  at  53.6%, 
significantly  below  the  EU  average  of  76.8%.  Efforts  have  been  made  to  make  the  final 
examinations  in  primary  education  more  efficient  and  secure.  The  introduction  of  final 
examinations  in  secondary  education  has  been  postponed  for  a  year.  The  preparations  for 
introducing the examinations need to be accelerated to meet the timeline. 

The  policy  and  institutional  framework  for  quality  assurance  in  higher  education  should  be 
further strengthened, in  particular in  terms  of transparency.  In  February  2020, the European 
Association for Quality Assurance in Higher Education (ENQA) suspended the membership 
of  the  Serbian  National  Accreditation  Body  (NEAQA).  This  was  due  to  insufficient 
compliance  with  the  principles  of  quality  assurance  set  in  the  European  Standards  and 
Guidelines for Quality Assurance in the European Higher Education Area. The decision was 
taken after a two-year suspension during which the NEAQA failed to implement the ENQA’s 
recommendations  on  better  governance  and  quality  assurance  principles.  The  NEAQA  may 
re-apply  for  renewed  membership  in  2022.  Vocational  colleges  are  being  integrated  into 
vocational academies, with the aim of achieving a higher level of operational efficiency and 
transparency. The attainment of tertiary level qualifications for persons aged 30-34 is slowly 
increasing, reaching 32.8% in 2018, below the EU target of at least 40%. Education remains a 
high-risk sector for corruption, especially higher education. Serbian NQF was referenced with 
the  EQF  in  February  2020.  The  NQF  institutional  set-up  should  be  further  strengthened  to 
make  the  system  fully  operational,  including  the  functioning  of  sector  skills  councils.  First 
qualification standards are being published and communicated to the end users. The system of 
validation of non-formal and informal learning is yet to be piloted and institutionalised.  

In  the  area  of  gender  equality,  further  efforts  are  needed  to  enrich  teaching  materials  with 
gender-relevant  content  that  would  promote  discussion  and  encourage  students  to  take  a 
critical stance towards the structural foundations of gender relations.  

Some progress was made in increasing the participation of disadvantaged students in all levels 
of  education.  This  was  achieved  by,  among  other  targeted  measures,  an  increase  in 
scholarships for exceptional and low-achieving students, affirmative actions, and an increase 
in  the  number  of  pedagogical  assistants.  However,  the  implementation  of  measures  for 
reducing dropout rates and segregation needs to be strengthened, especially at local level. The 
rulebook for teaching and andragogic assistants was adopted, as a step towards regulating  the 
conditions  for  their  engagement.  Activities  have  been  stepped  up  to  combat  discrimination 
and violence in schools. 

Education  institutions  were  closed  in  mid-March  due  to  the  COVID-19  pandemic.  Distance 
learning for pre-university students, including VET, was organised via national and local TV 
broadcasters. Schools were prompted to maintain the learning process, primarily by means of 
digital  tools.  Rulebooks  on  assessment  were  adapted  to  enable  more  flexible  assessment  of 
students’ achievement. Further efforts are needed to compensate for the learning gaps caused 
by digital exclusion in this period, in particular among disadvantaged students. 

Serbia's results in the OECD’s 2018 programme for international student assessment (PISA) 
indicate  that  over  one  third  of  15-year  olds  are  considered  functionally  illiterate  in  reading, 
mathematics  and  science.  This  proportion  is  much  higher  among  3-year  VET  students  and 
totals 80%. Serbia will take part in 2019 TIMSS and 2021 PIRLS assessments. Based on the 
data from  external  evaluation of pre-university institutions,  close to  30% of all primary  and 

103 

 
 
secondary schools in Serbia do not meet sufficient quality standards. A new cycle of external 
evaluation was launched, based on a revised external evaluation framework.  

Serbia was granted the status of a programme country in the Erasmus+ programme in 2019. 
Serbia continued to participate successfully in the programme with 7 800 outgoing mobilities 
of  students  and  staff  and  4 500  incoming  mobilities  since  2015.  In  addition,  45  capacity 
building  projects  are  currently  being  implemented  in  the  field  of  higher  education,  29  of 
which have Serbian coordinators. Serbia is successfully implementing the sports component 
of the programme, where relevant organisations coordinate eight projects and are partners in 
34  projects.  Serbia  actively  joined  the  fifth  edition  of  European  Week  of  Sport  (23-30 
September 2019). Serbia benefited from EU funding based on the same rules as EU Member 
States. 

In the area of culture, Serbia recognises the importance of culture and cultural diversity, and 
identified  creative  industries  as  a  sector  with  potential  for  economic  development  and 
connectivity.  The  work  of  the  Council  for  creative  industries,  established  by  the  Prime 
Minister’s  Office  continues.  In  2019,  Serbia  launched  a  national  and  international 
communication campaign ‘Serbia creates’, to bolster Serbia's image as a place where creative 
industries can flourish. 

Budget  amendments  to  overcome  the  economic  impacts  of  the  COVID-19  pandemic 
considerably reduced the budget allocated to culture and managed by the Ministry of Culture 
and  Information,  initially  stable  compared  to  2019.  While  creative  industries  are  eligible  to 
the measures for economic recovery, this is not the case of the whole cultural sector, which 
was deeply impacted by the crisis.  The activities related to the Novi Sad European Capital of 
Culture in 2021 have been postponed until 2022. 

Serbia  is  implementing  measures  under  the  UNESCO  Convention  on  the  protection  and 
promotion of the diversity of cultural expression. 

Serbia  is  participating  in  the  Creative  Europe  programme,  which  is  well  promoted  and 
supported by the Ministry. Serbian cultural organisations are successful in all streams of the 
programme.  

In March 2020, the Belgrade Fortress and its surrounding were placed on the list of the seven 
Most Endangered moments and heritage sites in Europe in 2020 by Europa Nostra. 

The youth strategy action plan 2018-2020 is being implemented. The number of youth policy 
coordination  mechanisms  at  the  local  level  has  increased,  and  they  should  be  further 
strengthened. A number of local youth action plans has expired and should be adopted anew. 
An  increasing  number  of  young  and  skilled  people  are  emigrating.  The  unemployment  and 
inactivity rates among young people remain high. 

6.27.  Chapter 27: Environment and climate change  

The  EU  promotes  strong  climate  action,  sustainable  development  and  protection  of  the 
environment. EU law contains provisions addressing climate change, water and air quality, 
waste  management,  nature  protection,  industrial  pollution,  chemicals,  noise  and  civil 
protection.   

Serbia  has  achieved  some  level  of  preparation  in  the  area  of  environment  and  climate 
change. Overall, Serbia made limited progress in the past year, mainly on strategic planning.  

The  2019  recommendations  remain  valid.  Serbia  should  considerably  step  up  ambitions 
towards a green transition and continue focusing on:  

104 

 
 
  enhancing  administrative  and  financial  capacity  of  the  public  central  and  local 
administration  authorities,  in  particular  the  Environmental  Protection  Agency  and 
environmental inspectorates, earmarking and utilising income from environmental fees for 
to  manage 
environmental  purposes,  building  an  effective 
environmental  investments  and  further  improving  inter-institutional  coordination,  in 
particular between central and local levels;  

institutional  set-up 

  intensifying  implementation  and  enforcement  work,  such  as  closing  non-compliant 
landfills,  investing  in  waste  reduction,  separation  and  recycling,  reinforcing  air  quality 
monitoring, advancing river basin management and preparing for Natura 2000;  

  implementing  the  Paris  Agreement,  including  by  adopting  a  comprehensive  climate 
strategy and law, consistent with the EU 2030 framework for climate and energy policies 
and  well  integrated  into  all  relevant  sectors,  and  developing  a  National  Energy  and 
Climate Plan in line with Energy Community obligations. 

Environment 

Following intensive preparatory work, Serbia submitted its negotiating position for chapter 27 
in January 2020 to the Council. Some 4 years after its creation, Serbia’s green fund has yet to 
become fully operational. Its 2019 financial allocations were not fully used. Its 2020 budget 
was  reduced  by  25%  to  address  needs  arisen  from  the  COVID-19  crisis.  Income  generated 
from  environmental  fees  is  not  earmarked  for  environmental  purposes.  This  leads  to  a 
diversion of funds for other purposes. Serbia needs an effective institutional set-up to manage 
environmental  investments,  which  need  to  increase  much  faster  than  previously.  The 
investment plan needs to be turned into an investment programme, targeting projects with the 
highest  environmental  impact.  Investment  decisions  need  to  be  based  on  feasibility  studies 
and technical designs in line with EU best practices and transparent competitive procurement 
procedures, ensuring best value for money.  

In the area of horizontal legislation, Serbia has a high level of alignment with the EU acquis. 
Overall,  Serbia  needs  to  improve  its  administrative  capacities  at  central  and  local  level, 
including  inspectorates,  to  draft  legislation,  give  adequate  time  for  legislative  consultations 
and  carry  out  qualitative  public  consultations,  particularly  at  local  level.  Legislation  on 
environmental  impact  assessment  needs  to  be  further  aligned  and  its  implementation 
strengthened. The non-compliance of environment  impact  assessment (EIA) legislation with 
other  laws,  especially  with  the  law  on  planning  and  construction  according  to  which  the 
impact  assessment  is  carried  out  after  the  issuance  of  the  construction  permit,  needs  to  be 
urgently addressed. Strategic environmental assessments need to be carried out for plans and 
programmes from all relevant policy areas, not only the environment. Some progress can be 
reported on the implementation of the INSPIRE Directive. Strengthening the capacities of the 
judiciary and the environmental inspectorate and establishing a track record on implementing 
the  Environmental  Crime  Directive  remain  priorities.  Serbia  needs  to  improve  the 
implementation of the polluter pays principle, for example by strengthening capacities at local 
level to collect environmental fees.  

105 

 
 
In the field of air quality, Serbia has a good level of alignment with the EU acquis. However, 
Serbia  needs  to  speed  up  implementation  of  legislation  and  air  quality  plans.  While  an  air 
quality monitoring network is in place and is being extended, and real-time data are available, 
the monitoring of air quality still needs to  be considerably strengthened.  Serbia’s annual  air 
quality report for 2018 lists 11 agglomerations with air pollution above the limits: Belgrade, 
Subotica,  Pančevo,  Užice,  Smederevo,  Kosjeric,  Valjevo,  Kraljevo,  Sremska  Mitrovica, 
Kragujevac and Niš. Five of these cities do not have air quality management plans in place. 
Pollution induced by the Kostolac B thermal power plant needs to be addressed as a priority. 
Alignment with EU legislation on volatile organic compound emissions needs to continue.  

Regarding  waste  management,  Serbia  has  a  good  level  of  alignment  with  the  EU  acquis, 
however the implementation remains at an early stage. In 2019, Serbia adopted a number of 
regulations  and  rulebooks,  for  example,  on  pharmaceutical  and  medical  waste.  Serbia  also 
developed a national waste management strategy and a national sludge management strategy, 
which are  currently in the adoption process.  The by-law on treatment  of the  equipment  and 
waste containing PCB, currently in  the adoption procedure, will fully transpose the relevant 
EU  directive.  Serbia  proceeded  with  the  permanent  disposal  of  historic  hazardous  waste. 
Additional  economic  instruments  for  special  waste  streams  need  to  be  developed.  The 
proportion of recycled waste in overall waste management is still low, e.g. 3% for municipal 
waste. Serbia needs to redouble efforts to close its non-compliant landfills and invest in waste 
reduction,  separation  and  recycling.  The  remediation  of  the  Belgrade  landfill  and  the 
construction of a waste to energy facility are expected to start in 2020. 

The level of alignment with the EU acquis on water quality is moderate. Work on an action 
plan for implementing the water management strategy has not progressed. Untreated sewage 
and  wastewaters  are  still  the  main  source  of  water  pollution.  Non-compliance  with  water 
quality standards remains a big concern in some areas, such as that on arsenic. Serbia needs to 
make significant efforts to align further its legislation with the EU  acquis, and to strengthen 
administrative  capacity,  in  particular  for  monitoring,  enforcement  and  inter-institutional 
coordination.  Work  on  the  river  basin  management  plan  is  progressing  slowly.  Improving 
local governance, in particular for operating and maintaining water and wastewater facilities, 
remains a priority. Work on adequate water fees and tariffs is at an early stage. Lack of human 
and financial resources and data availability hinder the development of flood hazard and flood 
risk maps for all relevant areas. 

Alignment  with  the  EU  acquis  in  the  field  of  nature  protection,  in  particular  with  the 
Habitats  and  Birds  Directive,  remains  moderate.  Serbia  has  still  not  addressed  gaps  in 
transposition,  allowing  hunting  of  non-huntable  birds,  especially  the  goshawk  and  the  turtle 
dove.  Serbia  needs  to  fully  incorporate  EU  standards  on  prohibited  means  of  capturing  and 
killing  wild  animals  throughout  its  entire  legislation,  including  in  legislation  on  hunting. 
Progress  on  establishing  Natura  2000  sites  is  slow.  Institutional  and  human  resource 
capacities at national and local level remain weak, in particular as regards enforcement, and 
wildlife  trade.  Any  further  development  of  hydropower  should  be  in  line  with  EU 
environmental  legislation,  including  environmental  impact  assessments  with  proper  public 
consultations, nature protection and water management legislation. 

106 

 
 
As  regards  industrial  pollution  and  risk  management,  alignment  with  most  of  the  EU 
acquis is at an early stage, including on the Industrial Emissions Directive. In January 2020, 
Serbia  adopted  its  long-awaited  national  emission  reduction  plan.  Serbia  also  established  a 
database  strengthening  the  monitoring  on  Seveso  III  operators.  However,  persistent 
administrative capacity constraints continue to hamper progress in implementation across the 
industrial  sector.  Inspection  and  law  enforcement  remain  areas  of  concern.  Serbia  needs  to 
increase capacities for managing the integrated permitting processes. 

Serbia has a high level of alignment with the EU acquis on chemicals. In 2019, Serbia opened 
an  online  platform  for  registering  biocidal  products.  During  the  reporting  period,  there  was 
neither progress on REACH and CLP Regulations, nor on the alignment with the  acquis on 
animal experiments, asbestos or biocides. Serbia needs to boost its administrative capacity to 
implement  legislation  in  these  areas,  and  ensure  proper  monitoring  of  persistent  organic 
pollutants. 

Serbia’s level of alignment with EU rules on noise is good, but their implementation remains 
at  an  early  stage.  Serbia  needs  to  build  administrative  capacity  for  drafting  strategic  noise 
maps and action plans. A noise map for Niš was completed during the reporting period. 

Serbia is moderately prepared as regards civil protection. Serbia has a strategic framework in 
place, which is in line with the Sendai framework for disaster risk reduction. It consists of a 
law  on  disaster  risk  reduction  and  emergency  management  and  a  national  disaster  risk 
management  programme  and  action  plan  for  2017-2020.  Serbia  needs  to  develop  a  strategy 
for disaster risk reduction. Serbia also carried out a national disaster risk assessment. Work on 
local risk assessments and protection and rescue plans is ongoing. More focus on multi-hazard 
risk assessments is needed. The COVID-19 pandemic highlighted the need to strengthen the 
legal framework and institutional capacities as well as human and financial resources of civil 
protection authorities also with regard to health emergencies. Serbia still needs to connect to 
the  Common  Emergency  Communication  and  Information  System  (CECIS)  -  the  main  tool 
for  crisis  communication  among  members  of  the  European  Union  Civil  Protection 
Mechanism.  Pre-condition  for  CECIS  is  the  installation  of  Secure  Trans  European  Services 
for  Telematics  between  Administrations  (sTESTA)  in  the  country  and  designating  the 
responsible  ministry  as  an  entry  point.  Serbia  needs  to  ensure  that  the  Niš  Humanitarian 
Centre  does  not  duplicate  the  role  of  the  European  Commission’s  Emergency  Response 
Coordination  Centre  and  does  not  contradict  the  conditions  for  its  participation  in  the  EU 
Civil Protection Mechanism. 

Climate change 

Serbia has some level of preparation on climate change, but implementation is at a very early 
stage. Developments during the reporting period largely came to a standstill, reflecting a lack 
of political consensus about the urgency to act. Serbia has still not adopted the climate law it 
had prepared in 2018. The adoption and implementation of a climate strategy and action plan, 
which is consistent with the EU 2030 framework for climate and energy policies and which 
addresses  adaptation  to  climate  change,  is  paramount  for  Serbia’s  future  low  carbon 
development. Serbia needs to do more to integrate climate action into other sectors.  

107 

 
 
Work on improving greenhouse gas inventories and updating Serbia’s Nationally Determined 
Contribution to the Paris Agreement is progressing. However, the alignment of legislation on 
monitoring,  reporting  and  verification  of  greenhouse  gas  emissions  in  line  with  the  EU 
emissions  trading  system  and  Effort  Sharing  Regulation  is  pending.  Serbia  needs  to 
considerably  strengthen  its  administrative  and  technical  capacity,  in  particular  so  it  can 
implement,  monitor  and  report  on  climate  acquis.  Awareness-raising  activities  need  to  be 
stepped  up.  Serbia  needs  to  invest  much  more  into  the  transition  towards  green  energy, 
including upgrading outdated infrastructure in order to reduce pollution. 

6.28.  Chapter 28: Consumer and health protection  

EU rules protect consumers’ economic interests and in relation to product safety, dangerous 
imitations and liability for defective products. The EU also ensures high common standards 
for  tobacco  control,  blood,  tissues,  cells  and  organs,  patients’  rights  in  cross-border 
healthcare, and serious cross-border health threats including communicable diseases, as well 
as medicines for human and veterinary use. 

Serbia  is  moderately  prepared  in  consumer  and  health  protection.  Limited  progress  was 
made on the chapter with the adoption of the 2019-2024 Consumer Protection Strategy  and 
legal alignment relevant to cosmetics. However, the recommendations of the previous report 
have not been met and remain valid.  

In the coming year, Serbia should in particular:  

  strengthen  the  administrative  capacity  of  relevant  authorities  for  consumer  protection, 

market surveillance and sanitary inspection; 

  strengthen the overall managerial capacity, human resources and financial sustainability of 

the public health insurance fund; 

  further  align  its  legislation  with  the  EU  acquis  on  substances  of  human  origin  and  on 

medicines for human use. 

Concerning  general  aspects  of  consumer  protection,  the  2019-2024  consumer  protection 
strategy was adopted in December 2019. The amended law on consumer protection aiming for 
further  alignment  with  the  EU  acquis  has  yet  to  be  adopted.  The  National  Council  for 
Consumer  Protection,  established  to  strengthen  the  system  of  consumer  protection  and 
cooperation  between  relevant  institutions  delivered  no  visible  output.  There  were  a  total  of 
105  initiated  collective  redress  cases  based  on  consumer  complaints  conducted  by  the  line 
ministry which, as part of its role, is tasked with initiating proceedings for the protection of 
collective  interests  of  consumers.  Out  of  these,  22  decisions  on  imposed  legal  measures 
concerning violation of collective interest of consumers and 18 corrective statements imposed 
on traders were put into effect, at the end of proceedings. There are 26 registered consumer 
organisations,  and  a  registered  list  of  10  alternative  dispute  resolution  bodies  (ADRs),  with 
the National  Bank of Serbia serving  as an ADR for financial institutions and the regulatory 
agency  for  electronic  communications  (RATEL)  for  disputes  between  subscribers  and 
electronic  communications  operators  or  between  consumers  and  postal  operators.  Out-of-
court settlements are still voluntary for both consumers and traders. No general overview on 
initiated  and  concluded  proceedings  exists  for  all  ADR  bodies  in  charge  of  alternative 
consumer disputes, following the number of complaints filed by consumers. 

Cooperation  between  ministries  and  consumer  organisations  improved  while  consumer 
protection  organisations  would  benefit  from  further  promotion  of  their  work  and  activities. 

108 

 
 
The authorities’ administrative capacity  for  consumer protection and the  inspection services 
for  consumer  protection,  product  safety  issues  need  strengthening.  The  institutional  setting 
and protection of consumer protection rights  and  interests at  the local  government  level  has 
yet to be strengthened with the adoption of the amended law on consumer protection, which 
should also address unfair commercial practices, contract terms and vulnerable consumers. 

Regarding product safety-related issues, the legislation was further aligned with the acquis 
on  product  safety  as  amendments  to  the  Law  on  general  product  safety  were  adopted  in 
October 2019. Alignment with the EU acquis on cosmetics was strengthened by the adoption 
of  implementing  legislation.  Regarding  market  surveillance,  the  administrative  capacities  as 
regards sanitary inspection need strengthening. The Product Safety Council held a session in 
January  2020.    In  2019  there  were  26 332  consumer  complaints  and  from  January  to  June 
2020  the  number  was  9 409.  In  2019,  the  market  surveillance  authorities  carried  out  7 465 
inspections and ordered 486 corrective and restrictive measures for 105 435 non-compliant or 
unsafe  products.  There  is  no  data  available  on  relevant  initiated  or  resolved  judiciary 
proceedings.  

On  non-safety-related  issues,  full  compliance  with  the  Directive  2015/2302  on  package 
travel and linked travel arrangements is yet to be achieved, as Serbia has yet to adopt the law 
on consumer protection and transpose the directive through sectoral laws. Further alignment 
with  the  EU  acquis  regarding  cooperation  between  national  authorities  responsible  for 
enforcing  consumer  protection  laws,  multiannual  consumer  programmes,  regulations  on 
package  travel,  online  resolutions  of  consumer  disputes,  and  alternative  resolution  of 
consumer disputes has yet to be achieved. 

From  1  March  2019  to  5  June  2020,  in  the  capacity  of  an  ADR  in  charge  of  financial 
institutions, NBS received a total of 4 639 cases,  of which 2 483 complaints, 340 mediation 
requests  and  1 816  questions.  Concerning  individual  complaints,  it  issued  seven  decisions, 
ordering  a  financial  service  provider  to  eliminate 
the  fine 
simultaneously, three decisions ordering a financial service provider to eliminate irregularities 
without  imposed  fines  and  issued  12  fines  to  the  financial  service  providers.  The  NBS 
resolved 21 mediation proceedings, which resulted in an agreement among parties. Pursuant 
to  the  Decision  on  advertising,  the  NBS  fined  three  banks  on  advertising  campaign 
irregularities, issued four letters of warning and two fines pursuant to the law on banks and 
one  letter  of  warning  to  a  bank  concerning  unfair  contract  terms.  Moreover,  the  NBS  fined 
three banks due to irregularities in their advertising campaign. 

irregularities 

imposing 

In the area of  public health, legislation on healthcare is  partly  aligned with the EU  acquis. 
The sustainability of the public health insurance fund still needs to be ensured. The national 
plan  for  human  resources  in  the  health  sector  has  still  not  been  implemented,  while  the 
number  of  physicians  leaving  the  country  still  remains  high.  The  EU-funded  centralised 
electronic health record system is still not used and compliance with EU health indicators is 
not yet ensured.  

Tobacco control legislation is partly aligned with EU acquis, but the use of tobacco in public 
places is  not  aligned with  EU standards. A strategy on  tobacco  control  needs to  be adopted 
and the implementation of pictorial warnings on cigarette packets, smoke-free environments 
and increases in the price of cigarettes is needed. There was a small increase in the percentage 
of smokers among women in the reporting period.  

On blood, tissues, cells and organs, laws on the transplantation of cells and tissues, and on 
human  organ  transplantation  were  adopted,  both  designed  to  be  fully  aligned  with  the  EU 
acquis. The implementation of these laws, expected to start in 2019 has not yet commenced. 
EU-level  quality,  safety  standards  and  inspection  services  still  need  to  be  developed.  The 

109 

 
 
overall  administrative  and  technical  capacity  of  the  Directorate  for  Biomedicine  to  conduct 
oversight of the sector as the competent authority is still very limited.  

On serious cross-border health threats including communicable diseases, the surveillance 
and  response  capacity  remains  limited  and  needs  to  be  modernised.  A  centralised  health 
information and communication system has yet to be implemented. 

Harmonising  Serbian  legislation  with  the  Directive  on  the  application  of  patients’  rights  in 
cross-border healthcare has yet to be completed. An e-health unit at the Ministry of Health 
should  be  established  to  coordinate  the  complex  activities  involved  in  setting  up  a 
comprehensive health information system at all levels of care.  

Regarding  communicable  diseases,  attention  needs  to  be  given  to  effective,  sustainable 
financing  of  disease-specific  strategies,  including  the  national  HIV/AIDS  strategy,  and  to 
raising  awareness,  particularly  on  the  importance  of  child  vaccination.  Additional  work  is 
needed  on  surveillance  of  anti-microbial  resistance,  quality  control,  and  standardisation  of 
laboratories.  The  prescription  of  antibiotics  needs  to  be  strictly  controlled  to  strengthen  the 
fight against anti-microbial resistance. 

In  response  to  the  COVID-19  pandemic,  Serbia  applied  measures  foreseen  by  the  law  on 
population  protection  against  infectious  diseases  and  had  aligned  its  actions  with  the 
recommendations  of  the  World  Health  Organisation.  In  February  2020,  the  government 
established  a  high-level  Crisis  Team  on  health  issues,  led  by  the  Prime  Minister.  Serbia 
declared  a  state  of  emergency  on  15  March  2020,  introducing  strict  curfew  hours;  closed 
schools,  universities  and  banned  public  gatherings;  deployed  the  army  to  assist  civilian 
services;  and  shut  down  all  non-essential  government  operations.  A  large  number  of 
businesses were closed. On 20 March 2020, all border crossings were closed for international 
air,  road,  and  railway  or  waterway  traffic.  Exceptionally,  authorisation  was  granted  for 
reasons of humanitarian and national interest. Restrictive measures did not apply to transport 
of  goods,  medicine  and  medical  equipment.  All  Serbian  citizens  entering  the  country  were 
checked. Those with increased body temperature underwent immediate testing for the virus, 
others went into self-isolation for a period of 28 days. In the second part of April 2020, Serbia 
slowly started  with  a progressive relaxation of some measures.  The state of emergency was 
lifted  on  6  May  and  all  preventive  measures  were  abolished  in  the  following  days,  with 
recommendations for personal responsibility of each individual to maintain physical distance, 
wear facial masks and exercise hand hygiene. This gave rise to an even greater increase in the 
number of cases in June, culminating in July, filling the hospitals to 100% capacity. However, 
the system managed to absorb this peak and the numbers decreased significantly in August, 
with  application  of  prevention  measures  such  as  hand  hygiene  and  mask  wearing  in  closed 
places as well as bans on public gatherings of more than 10 persons. 

Regarding the capacity of the health system in dealing with this crisis, the National Institute 
of Public Health ‘Dr Milan Jovanovic Batut’, in cooperation with the Ministry of Health and 
the  relevant  health  institutions  monitored  the  epidemiological  status  of  the  disease  and 
informed  the  public,  issuing  guidelines  and  standard  operating  procedures  to  health 
institutions  and  to  all  entrance  points  into  the  country.  The  Belgrade  University  Clinic  for 
Infectious  and  Tropical  Diseases  is  the  relevant  referral  institution  for  public  health  threats 
due to infectious agents, while other secondary and tertiary health institutions with their own 
infectious  disease  departments  (a  total  of  41  general  hospitals  and  8  clinical  centres)  and  a 
network of 25 institutes of public health monitored the public health situation in the country 
on a daily basis. As the epidemic struck, many hospitals were pronounced exclusive COVID-
19  facilities,  treating  only  those  infected  with  SARS-Cov-2.  In  primary  health  care,  158 
municipal health care centres were tasked with primary prevention, and temporary COVID-19 

110 

 
 
clinics were set up in each of them with examination and testing facilities for all citizens. A 
number of temporary health care facilities were set up by the Army Forces in fairgrounds and 
sports  halls  throughout  the  country  hosting  more  than  1 650  people  at  the  peak  of  the 
epidemic. 

However, the system still suffers a lack of resources on all levels and a constant outflow of 
professional  workforce.  Although  the  counter-epidemic  measures  implemented  by  the 
government  were  well-devised,  weaknesses  of  the  existing  system  became  evident.  Serbia 
lacked resources in terms of personal protection equipment and medical equipment, medical 
expertise, and laboratory testing capacities as well as data processing and contact tracing. This 
led  to  a  large  number  of  medical  personnel  testing  positive  for  the  virus  (9%  of  the  staff). 
Strong Government efforts directed at alleviating these shortages toward the seventh week of 
the  outbreak  in  the  country  by  numerous  procurements  of  equipment  and  employment  of 
2 500 new healthcare personnel during March/April, had favourable results. 

As part of its global response to the pandemic, the EU has allocated EUR 15 million to Serbia 
for  immediate  needs  such  as  the  procurement  and  aerial  cargo  transport  of  medical 
equipment,  the support to vulnerable groups in  society, and exceptionally, the hiring of 200 
extra  medical  workers  for  the  second  half  of  2020  to  alleviate  the  pressure  on  medical 
personnel.  

The European Centre for Disease Prevention and Control (ECDC) shares all its COVID-
19 related guidance and assessments with Serbia. The ECDC focal point in Serbia was active 
before the start of the epidemic and prompt reporting on the state of affairs took place daily 
using  this  channel  along  with  regular  reporting  on  the  outbreak  to  the  WHO  in  accordance 
with the International Health Regulations.  

The  EU  invited  Western  Balkan  partners  to  join  its  Joint  Procurement  Agreement  to 
procure  medical  countermeasures.  Serbia  signed  the  agreement  on  21  April  2020  and 
nominated  representatives  for  the  Steering  Committee.  A  ratification  is  still  pending  due  to 
the emergency state thereby rendering Serbia in observer status.  

Serbia  is  an  observing  member  of  the  EU  Health  Committee  since  2017.  The  European 
Commission  offered  Serbia  access  to  the  Early  Warning  and  Response  System  for  all 
information  related  to  the  COVID-19  outbreak  and  Serbia  nominated  its  representatives  to 
access  the  system.  Serbian  national  reference  laboratories  received  positive  control  material 
for COVID-19 tests from the EU’s Joint Research Centre. 

The  Joint  Research  Centre  requested  data  from  Serbia  for  its  worldwide  data  collection 
system on COVID-19. Serbia nominated a contact point for the JRC and an exchange of data 
needs to follow swiftly.  

Health  promotion  regarding  non-communicable  diseases  is  still  not  at  an  advanced  level. 
Cancer  screening  for  colorectal,  breast  and  cervical  cancers  slowly  is  progressing  but  in 
many  regions  of  the  country  is  still  only  sporadic  and  is  not  performed  in  a  systematic 
manner.  The  cancer  register  is  maintained  by  the  National  Institute  for  Radiology  and 
Oncology.  

There is still a need to develop community-based mental health services and progress needs 
to be made regarding nutrition and physical activity.  

There were no developments on medicines for human and veterinary use, or on maximum 
sale  price  criteria  for  medicines.  There  was  also  no  progress  on  preventing  drug  abuse. 
Regarding  the  prevention  of  harmful  use  of  alcohol,  a  national  programme  to  reduce  the 
harmful effects of alcohol and alcohol-induced disorders has been adopted.   

111 

 
 
On cosmetics, the law on products of general use was adopted in April 2019, which aims at 
aligning with the EU acquis. 

On  health  inequalities,  access  to  healthcare  services  needs  to  be  improved  for  people  with 
disabilities,  people  living  with  HIV,  children  and  adults  who  use  drugs,  prisoners,  women 
involved in prostitution, LGBTI people, internally displaced persons and the Roma.  

Serbian legislation on pricing of medicinal products has yet to be aligned to the EU acquis. 

6.29.  Chapter 29: Customs union 

All Member States are part of the EU customs union and follow the same customs rules and 
procedures.  This  requires  legislative  alignment,  adequate  implementing  and  enforcement 
capacity, and access to the common computerised customs systems. 

Serbia is at a good level of preparation in the area of customs union. Limited progress was 
made  on  the  adoption  of  several  by-laws  to  the  customs  law  and  to  the  law  on  customs 
services.  However,  further  efforts  are  needed  to  fully  address  last  years’  recommendations, 
which therefore remain valid. 

In the coming year, Serbia should in particular: 

  further upgrade the customs processing system by integrating risk management; 

  further develop  the  IT system of the national  customs to  enable integration with  the EU 

systems. 

Serbia’s  customs  legislation  remains  largely  aligned  with  the  EU  acquis.  The  customs  law 
and the law on customs service, adopted in December 2018, entered into force in June 2019. 
Related  implementing  legislation,  aimed  at  further  alignment  with  the  EU  acquis,  has  been 
adopted, including that on duty relief in April 2019. Serbia also took a number of measures to 
align with the EU acquis on drug precursors.    

Serbia  is  a  party  to  the  Common  Transit  Convention,  applying  EU  rules  on  transit 
movements.  Rules on customs enforcement of intellectual property rights remain broadly in 
line  with  the  EU  acquis.  The  Regional  Convention  on  Pan-Euro-Mediterranean  preferential 
rules  of  origin  is  applied  in  Serbia.  Serbia’s  customs  tariff  nomenclature  for  2019  was 
harmonised  with  the  EU  combined  nomenclature,  while  legislation  to  align  with  the 
nomenclature for 2020 was adopted in December 2019. 

Legislation on cultural  goods, free zones, and security aspects still needs to be aligned with 
the  EU  acquis.  Fees  are  still  charged  on  lorries  entering  customs  terminals  to  discharge 
customs obligations, which is not in line with the SAA obligations.  

Concerning administrative and operational capacity, customs duty collection increased by 
10.8%  in  2019.  The  customs  administration’s  development  plan  for  customs  e-systems  was 
adopted in February 2020, aiming to ensure integration with the EU system. The 2020-2024 
customs administration’s business plan was also adopted in February.  

Work  is  also  ongoing  on  strengthening  the  risk  management  system.  It  is  important  that 
Serbia  carries  out  pre-arrival/pre-departure  risk-based  analysis  including  food-safety  checks 
consistently and across the board, and in harmonisation with the EU Customs Code. Despite 
ongoing work, the customs laboratory remains under-equipped.  

In  terms  of  fight  against  tobacco  smuggling,  Serbia  is  a  party  to  the  Protocol  to  Eliminate 
Illicit Trade in Tobacco Products since 2017, but the information on the implementation of the 
Protocol  is  still  pending.  Additional  measures  are  needed  to  further  strengthen  the 
administrative capacity for tobacco control. 

112 

 
 
In  the  context  of  the  outbreak  of  the  COVID-19  pandemic,  seven  border  crossings  with 
neigboring  countries  were  designated  as  ‘green  lane’  border  crossings  to  ensure  the  smooth 
and  prioritised  passage  of  essential  goods.  The  initiative  follows  a  proposal  by  the  CEFTA 
Secretariat and the Secretariat of the Transport Community of 25 March 2020, based on the 
European  Commission  Communication  of  23  March  2020.  The  green  lane  border  crossings 
include  24/7  operations,  including  phytosanitary  procedures,  and  electronic  pre-arrival 
information through the System of Electronic Exchange of Data (SEED). The introduction of 
green lanes proved to be efficient as difficulties and long waiting hours experienced at border 
crossings  in  the early stages of the pandemic were reduced to  below the target  of 12 hours, 
although still exceeding the European Commission’s recommended limit of 15 minutes. 

6.30.  Chapter 30: External relations 

The  EU  has  a  common  trade  and  commercial  policy  towards  third  countries,  based  on 
multilateral and bilateral agreements and autonomous measures. There are also EU rules in 
the field of humanitarian aid and development policy. 

Serbia  remains  moderately  prepared  in  the  area  of  external  relations.  Some  progress  was 
made on the 2019 recommendation concerning the Regional Economic Area (REA) as Serbia 
started with the implementation of CEFTA Additional Protocol (AP) 5 on Trade Facilitation 
and ratified CEFTA AP 6 on Trade in Services. The capacity to pursue key challenges in trade 
policy  needs  to  be  strengthened  further.  The  2019  recommendation  on  World  Trade 
Organisation (WTO) accession remains valid. 

In the coming year, Serbia should in particular: 

  complete  accession  to  the  WTO  by  adopting  an  amended  law  on  genetically  modified 

organisms and complete remaining bilateral market access negotiations; 

  further  strengthen  the  administrative  capacity  of  the  Ministry  of  Trade,  Tourism  and 

Telecommunications for handling trade with the EU, CEFTA and WTO accession;  

  implement  actions  under  the  multiannual  action  plan  for  the  development  of  REA,  in 
particular:  ensure  the  full  implementation  of  CEFTA  AP  5  on  Trade  Facilitation; 
implement CEFTA AP 6 on Trade in Services; negotiate and conclude CEFTA AP 7 on 
Dispute Settlement; and adopt regional standards for International Investment Agreements 
and pursue the implementation of the individual reform action plan on investment. 

As regards common commercial policy, no progress was made on Serbia’s accession to the 
WTO. The possibility of Serbia becoming a member of the WTO depends on the adoption of 
a  modified  law  on  trade  with  genetically  modified  organisms,  and  on  the  completion  of 
market access negotiations with a small number of WTO members.   

In October 2019, Serbia submitted a draft action plan for its remaining legislative alignment 
under  chapter  30.  The  amendments  to  the  law  on  dual  use  goods  entered  into  force  in 
November 2019. With this, Serbia abolished import control of dual use items while retaining 
export controls in accordance with the relevant EU legislation. In April 2019, Serbia adopted 
the  national  control  list  of  dual-use  goods  aimed  at  fully  aligning  with  the  EU’s  2018 
Regulation on setting up a Community regime for the control of exports, transfer, brokering 
and  transit  of  dual-use  items.  The  national  control  list  of  arms  and  military  equipment, 
aligned with the Common Military List, was adopted in May 2019. Serbia’s 2009 application 
to join the Wassenaar Arrangement is still under consideration, as well as the 2017 application 
to  the  Australia  Group.  Serbia  is  not  a  signatory  of  the  Kimberly  process  on  conflict 
diamonds.  

113 

 
 
Concerning  administrative  and  operational  capacity  within  the  Ministry  of  Trade,  Tourism 
and Telecommunications, work continued to build up the Ministry’s capacity particularly in 
the CEFTA unit. However, the administrative capacity of units in charge of trade with the EU 
and WTO accession has yet to be further strengthened. Units responsible for export controls 
would also benefit from additional human resources and an upgrade of adequate equipment. 
The upgrade of software solutions enabling the relevant licenses to be issued electronically in 
order to replace paperwork is expected by 2025. Further work has yet to be done to improve 
the  capacity  of  the  administration  to  collect  market  statistics  through  the  work  of  the 
coordination body.  

Serbia  continued  its  participation  in  CEFTA.  The  ongoing  efforts  in  implementing  AP  5 
should  continue,  in  particular  based  on  the  decisions  of  the  CEFTA  Joint  Committee  on 
authorised  economic  operators,  fruits  and  vegetables,  and  risk  management  strategy  for 
customs. Serbia ratified AP 6 on Trade in Service in February 2020 and should now proceed 
with  its  implementation.  With  regard  to  AP  7  on  Dispute  Settlement,  Serbia  appointed  a 
negotiation team; Serbia’s constructive role would be important for ensuring the completion 
of negotiations in 2020.  

Regarding bilateral agreements with third countries, Serbia signed a free trade agreement 
(FTA) with the Eurasian Economic Union (EAEU) on 25 October 2019. The agreement was 
ratified in February 2020 but will enter into force only once ratified by all parties. Serbia had 
pre-existing FTAs with three members of the EAEU (Russia, Belarus and Kazakhstan), thus 
expanding  the  agreement  only  to  Armenia  and  Kyrgyzstan.  The  scope  of  the  agreement  is 
widened through minimally extended tariff concessions on goods, an annex on rules of origin 
and new provisions on dispute settlement. The FTA includes an exit clause, which guarantees 
that Serbia can denounce the agreement upon accession to the EU. The negotiations of a free 
trade  agreement  with  Ukraine  are  ongoing.  Since  December  2018,  negotiations  are  also 
ongoing on a Bilateral Investment Treaty with South Korea.  

Talks on a future trade agreement with the UK were initiated in 2019. A decision on the type 
and scope of the agreement is still pending. As for all investment and trade agreements, it is 
important that Serbia ensures compatibility with the EU  acquis and includes a sunset clause 
allowing it to denounce the agreement upon accession to the EU. Serbia should also develop a 
strategy for amending or terminating existing bilateral investment agreements that fail short of 
EU standards and expose the country to risks due to the broad and open language used. 

No substantial progress was made on development policy and humanitarian aid. A new law 
on development cooperation and humanitarian aid is being prepared. Development assistance 
and  humanitarian  aid  is  granted  on  an  ad  hoc  basis.  Serbia  participates  in  the  EU  Civil 
Protection Mechanism. 

As  a  response  to  market  disruptions  related  to  the  outbreak  of  the  COVID-19  pandemic,  a 
temporary (30 days) export ban, later extended, was introduced on 15 March 2020 for basic 
food  products  (including  white  flour,  salt,  bread,  milk,  sunflower  oil,  yeast),  personal 
protective equipment, and medicines. The list, initially covering 36 products, was updated on 
a regular basis to adapt to developments on the market and the overall situation. At most, 56 
products  were  included  in  the  list.  The  export  ban  was  lifted  on  a  product-by-product  basis 
and was fully lifted on 7 May 2020, following the end of the state of emergency. 

6.31.  Chapter 31: Foreign, security and defence policy 

Member  States  must  be  able  to  conduct  political  dialogue  under  the  foreign,  security  and 
defence policy, to align with EU statements, to take part in EU actions and to apply agreed 
sanctions and restrictive measures. 

114 

 
 
Serbia  is  moderately  prepared  in  this  area.  Some  progress  was  made  as  the  country's 
Parliament  adopted  new  security  and  defence  strategies  but  during  the  reporting  period 
Serbia’s CFSP alignment patterns remained largely unchanged. A number of statements and 
pledges  were  made  by  high-level  officials  which  went  contrary  to  EU  positions  on  foreign 
policy.  In  2019  Serbia’s  alignment  rate  with  relevant  High  Representative  declarations  on 
behalf of the EU and Council Decisions was 60%. Serbia continued to participate in EU crisis 
management missions and operations under the common security and defence policy.  

In the coming year, Serbia should in particular:  

  improve its alignment with EU Common Foreign and Security Policy; 

  implement the national security and defence strategies and adopt the related action plans 

in a manner fully reflecting Serbia’s EU orientation in these areas. 

The  political  dialogue  between  the  EU  and  Serbia  on  foreign  and  security  policy  issues 
continued, and the third Common Foreign and Security Policy (CFSP)/Common Security and 
Defence Policy (CSDP) informal political dialogue was held in Belgrade in November 2019.  
Serbia  also  regularly  participated  in  the  EU-Western  Balkans  informal  political  dialogue 
meetings.  Parliament  adopted  new  national  security  and  defence  strategies,  which  have 
evolved compared to  the previous versions, in  particular by references  to  EU accession, the 
EU Global Strategy and the CFSP. Action plans for their implementation are in preparation. 
When  implementing    these    strategies,  Serbia  should  move  towards  a  policy  based  on  the 
EU’s guiding principles for international  action,  in  line  with  Serbia’s  strategic  goal   of  
EU  membership. 

(See Political criteria - Regional issues and international obligations for more information on 
developments in bilateral relations with other enlargement countries and EU Member States). 

The  institutional  framework  enabling  Serbia’s  participation  in  the  CFSP  and  CSDP  is  in 
place.  

On  the  Common  Foreign  and  Security  Policy  (CFSP),  Serbia  continued  to  endorse  the 
Global  Strategy  for  the  European  Union’s  foreign  and  security  policy.  In  2019,  Serbia’s 
alignment  rate  with  relevant  High  Representative  declarations  on  behalf  of  the  EU  and 
Council  Decisions  was  60%.  Serbia  has  not  to  aligned  with  the  EU  restrictive  measures 
related, inter alia, to Russia, Venezuela, Myanmar and Iran. In 2019 and 2020 Serbia has also 
not  aligned,  inter  alia,  with  seven  HRVP  declarations  on  behalf  of  the  EU  on  Hong  Kong, 
with  the  HRVP  Declaration  calling  to  promote  and  conduct  responsible  behaviour  in 
cyberspace  and  with  the  HRVP  declaration  on  Russia  listing  the  European  Endowment  for 
Democracy  as  an  “undesirable  organisation”.  While  Serbia  has  not  aligned  with  restrictive 
measures  related  to  Belarus,  in  2020  it  has  aligned  with  the  HRVP  declaration  on  the 
presidential elections in Belarus and with the HRVP declaration on the escalation of violence 
and intimidation against members of the Coordination Council. Serbia needs, as a matter of 
priority, to make additional efforts regarding its alignment with the EU CFSP. 

Serbia does not have bilateral immunity agreements granting exemption from the jurisdiction 
of  the  International  Criminal  Court  and  complies  with  the  EU  common  positions  on  the 
integrity  of  the  Rome  Statute  together  with  the  related  EU’s  guiding  principles  on  bilateral 
immunity agreements.  

Serbia  continued  to  develop  intensive  relations  and  strategic  partnerships  with  a  number  of 
countries  worldwide,  including  Russia,  China  and  the  US.  Frequent  high-level  contacts  and 
regular bilateral visits with Russia were maintained as well as military technical cooperation, 
including  joint  military  drills  (also  together  with  Belarus),  and  arms  trade  arrangements. 

115 

 
 
However,  on  9  September  2020  Serbia  announced  that  it  would  freeze  its  participation  in 
international  military  cooperation  activities,  including  military  drills,  for  6  months.  Russia 
delivered a battery of Pantsir-S1 air defence missile systems to Serbia in February and March 
2020. Serbia continued to further strengthen its economic, political and security relations with 
China,  including  through  major  joint  infrastructure  and  greenfield  projects,  joint  drills  of 
special police units, procurement of  substantial  video-surveillance equipment and arms and 
security  systems  purchases.    Moreover,  assistance  provided  by  China  at  the  start  of  the 
COVID-19  outbreak  in  Serbia  was  particularly  emphasised  by  Serbia’s  political  leadership 
and  a  high-level  government  official  publicly  praised  Chinese  policies  in  Xinjiang.  The 
President of Serbia visited Russia in December 2019 and June 2020. Russian Prime Minister 
Medvedev visited Serbia in October 2019 and Foreign Minister Lavrov visited Serbia on the 
eve  of  the  June  2020  elections.  The  Serbian  President  visited  China  in  April  2019  and  the 
Serbian  Prime  Minister  paid  a  visit  in  November  2019.  The  President  of  Serbia  pledged  to 
move the Serbian embassy in Israel to Jerusalem by July 2021. 

Serbia supported EU measures and documents on conflict prevention. 

Serbia  has  joined  almost  all  major  non-proliferation,  disarmament  and  arms  control 
treaties  promoted  by  the  EU.  Serbia  should  consider  ratifying  Protocol  V  on  Explosive 
Remnants  of  War  of  the  Convention  on  Certain  Conventional  Weapons  (CCW).  Serbia  has 
aligned itself with Common Position 2008/944 on common rules governing arms  exports. It 
has a transparent reporting system on its strategic exports controls. At the same time, frequent 
and recurring allegations of corruption in arms trade deals need to be investigated. Serbia also 
remained  actively  engaged  in  the  implementation  of  the  2018  Regional  Roadmap  for  a 
sustainable solution to the illegal possession, misuse and trafficking of small arms and light 
weapons and their ammunition in the Western Balkans and adopted a strategy and a national 
action  plan  in  June  2019.  The  process  for  collecting  and  destroying  illegally-possessed 
weapons  and  ammunition  continues.  Serbia’s  2009  application  to  join  the  Wassenaar 
Arrangement is still pending.  In the reporting period Serbia did not align itself with the EU 
statements in the OPCW. Serbia also did not align itself with a number of EU statements in 
the UN First Committee in New York.  

Serbia continued to engage actively with international organisations. Serbia maintained its 
policy  of  military  neutrality  but  cooperation  and  intense  contacts  with  NATO  continued.  A 
second Individual Partnership Action Plan (2019-2021) was adopted. Serbia continued taking 
part in joint military exercises with the US and NATO. 

Serbia’s Deputy Speaker took part in meetings of the Collective Security Treaty Organisation 
(CSTO)  Parliamentary  Assembly,  in  which  the  Serbian  Parliament  has  observer  status,  in 
May  2019  and  June  2020.  Cooperation  with  the  CSTO  is  included  in  the  country's  new 
security and defence strategies.   

Serbia  continued  implementing  its  agreement  with  the  EU  on  security  procedures  for 
exchanging and protecting classified information. 

The Serbian defence budget in 2019 increased by almost 30% compared to 2018.  

Serbia  continued  to  actively  participate  in  crisis  management  missions  and  operations 
under the Common Security and Defence Policy (CSDP), notably the EU training missions 
in Mali, Central African Republic and Somalia, and EU NAVFOR Atalanta. Serbia intends to 
contribute  to  civilian  CSDP  missions  and  operations,  but  it  needs  to  finalise  the  legal  and 
administrative framework to allow for the participation of civilian personnel. Serbia continued 
to participate in the roster of the EU Battle Groups. Serbia also continued to participate in UN 
peacekeeping missions. 

116 

 
 
6.32.  Chapter 32: Financial control 

The  EU  promotes  the  reform  of  national  governance  systems  to  improve  managerial 
accountability, sound financial management of income and expenditure and external audit of 
public  funds.  The  financial  control  rules further protect  the  EU's  financial  interests  against 
fraud in the management of EU funds and the euro against counterfeiting.  

Serbia  is  moderately  prepared  in  this  chapter,  with  good  progress  made  in  the  reporting 
period.  The  Commission’s  recommendations  from  2019  were  largely  implemented,  in 
particular the pilot projects on managerial accountability and initiation of quality reviews on 
internal controls.  

However, further efforts are needed to embed managerial accountability in the administrative 
culture  and  to  strengthen  the  functioning  of  internal  control  and  internal  audit.  The  timely 
implementation of external audit recommendations needs to be further improved.  

In the coming period, Serbia should in particular:  

  prepare  and  adopt  a  new  medium-term  approach  on  PIFC  with  specific  focus  on  the 
implementation  of  managerial  accountability,  ensuring  coherence  with  the  Law  on  
Planning System;   

  ensure  the  adoption  and  implementation  of  the  guidelines  developed  on  the  basis  of 
lessons  learned  from  2019  pilot  projects  on  managerial  accountability,  improving,  thus, 
the functioning and effectiveness of internal control systems; 

  conduct  a  comprehensive  mapping  of  the  national  inspection  environment  and  define  a 
clear  system  for  detecting  and  handling  irregularities,  both  for  EU  funds  and  for  the 
national budget. 

Public internal financial control (PIFC)  

The  strategic  framework  for  PIFC  is  broadly  in  place  and  being  implemented  but  it  will 
expire  by  the  end  of  2020.  A  new  approach  for  PIFC  focusing  on  the  period  beyond  2020 
needs to be developed ensuring coherence with the public administration reform strategy and 
public  financial  management  reform  programme,  in  line  with  the  Law  on  Planning  System. 
Effective  coordination,  monitoring  and  reporting  of  the  related  reforms  need  to  be  ensured 
(see under Public administration reform).  

In  the  reporting  period,  the  focus  was  on  operationalising  the  principle  of  managerial 
accountability  through  the  implementation  pilot  projects  in  four  ministries.  A  financial 
management  and  control  rulebook  was  adopted  in  December  2019  and  methodological 
guidance  on  delegation  of  decision-making  and  performance  management  is  being  updated. 
Further  efforts  are  needed  to  fully  embed  managerial  accountability  in  the  administrative 
culture  of  the  public  sector.  The  continued  weaknesses  in  lines  of  accountability  between 
independent bodies and their parent institutions need be addressed as part of ongoing public 
administration  reform  efforts  (see  Public  administration  reform).  Given  the  fundamental 
necessity of having objectives linked to resources, all the Ministry of Finance should be part 
of the action for the implementation of managerial accountability. 

The  legal  framework  for  internal  control  is  broadly  in  line  with  the  internal  control 
framework  of  the  Committee  of  Sponsoring  Organisations.  However  the  capacities  to 
implement internal control standards, including risk management have to be further enhanced  
at both central and local government and better accepted in the administrative culture of the 
public  sector.  An  obligation  for  heads  of  institutions  using  public  funds  to  sign  an  annual 
statement on the status of their internal control systems has been introduced. The Ministry of 

117 

 
 
Finance has a centralised budget inspection function, which needs to be strengthened with a 
view to having  a clear mapping of the entire national inspection environment.  

Internal  audit  practice  is  broadly  in  line  with  international  standards.  However,  not  all 
institutions that are required to establish an internal audit unit have done so and many internal 
audit units do not have sufficient number of auditors. Most central institutions carry out audits 
according  to  strategic  and  annual  audit  plans.  The  timely  implementation  of  internal  audit 
recommendations  needs  to  be  improved  and  the  quality  assurance  of  internal  audit  further 
developed. 

The Central Harmonisation Unit (CHU) has continued to focus on system development and 
dissemination of methodological guidance. It has continued to conduct internal audit quality 
reviews  and  has  initiated  internal  control  quality  reviews.  The  quality  of  the  CHU  annual 
report on the state of PIFC implementation is improving. In addition to recommendations on 
systemic weaknesses, it now contains relevant State Audit Institution (SAI) recommendations 
and follows up on the recommendations from the previous period. The Government included, 
for the first time, mandatory instructions to ministries to act upon recommendations provided 
in the 2018 consolidated annual report which was adopted in September 2019. 

External audit  

Serbia’s constitutional and legal framework provides for the independence of the state audit 
institution (SAI) in line with the standards of the International Organisation of Supreme Audit 
Institutions  (INTOSAI).  The  SAI’s  financial  independence  was  respected  during  the  2020 
budget approval process.  

The  SAI  has  currently  305  staff,  including  268  audit  staff,  out  of  a  planned  number  of  431 
posts. The SAI’s institutional capacity to carry out its core audit tasks is adversely affected 
by  the  continued  focus  on  the  detection  of  errors  and  filing  of  misdemeanour,  economic 
offence and criminal charges against individuals which it drains its resources and affects its 
capacity to undertake its core audit task. The appropriateness of this requirement in SAI law 
should  be  reviewed  in  the  medium  term.  The  long-standing  issue  of  not  having  suitable 
business premises is yet to be resolved.  

The quality of audit work is continuously improving with the support of the dedicated sector 
for audit methodology and quality control. Due to optimisation of its organisational structure 
and an ongoing effort to increase performance audits, the SAI has significantly stepped up its 
performance audit capacity and has carried out 12 performance audits in 2019, compared to 
two in 2018. Since 2019, responses to the audit reports and post-audit reports are published at 
SAI's website.  

The  SAI  has  continued  to  increase  the  impact  of  its  audit work  by  improving  cooperation 
with stakeholders and by increasing its communication with the media. For the first time since 
its  establishment,  SAI's  activity  report  was  not  only  discussed  in  the  relevant  parliamentary 
committee,  but  also  in  the  plenary  in  June  2019.  Consequently,  the  National  Assembly 
adopted  a  conclusion  recommending  the  government  to  act  within  its  powers  to  ensure  the 
implementation of SAI recommendations. 

Protection of the EU’s financial interests  

Serbia has achieved a high degree of  acquis alignment, but full harmonisation with the EU 
Directive ‘on the fight against fraud to the EU’s financial interests by means of criminal law’ 
still needs to be ensured. Serbia is implementing the 2017-2020 national anti-fraud strategy to 
protect  the  EU’s  financial  interests.  The  anti-fraud  coordination  service  (AFCOS)  in  the 
Ministry of Finance has six employees, even though the planned number of staff is 10. During 

118 

 
 
2019, the AFCOS conducted 18 administrative checks, compared to a total of 15 since 2015. 
This  resulted  in  the  termination  of  eight  contracts  and  requests  for  reimbursement  of 
improperly  spent  funds.  Serbia  cooperates  with  the  European  Commission  during 
investigations  and  it  reports  on  irregularities  and  suspected  fraud  cases.  Since  2012,  Serbia 
has reported 36 cases via an online irregularity management system, including nine cases in 
2019.  Serbia  needs  to  keep  up  its  efforts  in  further  developing  a  solid  track  record  on 
cooperation in investigations and reporting of irregularities.  

Protection of the euro against counterfeiting  

In this area, Serbia has achieved a high degree of acquis alignment. The technical analysis is 
carried  out  by  the  National  Bank  of  Serbia.  It  provides  specialised  training  programmes  for 
licenced  entities,  which  are  authenticating  euro  coins  and  which  have  been  processing  euro 
denominated  banknotes  since  1  January  2020.  The  central  bank  has  formal  cooperation 
agreements with the European Commission on coins and with the European Central Bank on 
banknotes. Regional cooperation with other central banks is ongoing. Serbia continues to take 
part in the Pericles 2020 programme.  

6.33.  Chapter 33: Financial and budgetary provisions 

This  chapter  covers  the  rules  governing  the  funding  of  the  EU  budget  (‘own  resources’). 
These  resources  mainly  consist  of:  (i)  contributions  based  on  the  gross  national  income  of 
each  Member  State;  (ii)  customs  duties;  and  (iii)  a  resource  based  on  value-added  tax. 
Member  States  must  have  the  appropriate  administrative  capacity  to  adequately  coordinate 
and ensure the correct calculation, collection, payment and control of own resources.  

Serbia  has  some  level  of  preparation  concerning  the  specific  administrative  conditions  for 
own resources. The group for the coordination and management of the EU’s own resources is 
operational. Some progress was made in terms of preparatory work for the implementation of 
the  previous  report’s  recommendations  and  within  the  underlying  policy  areas  affecting  the 
correct functioning of the own resources system.  

The  previous  report’s  recommendations  remain  largely  valid  also  for  the  coming  period. 
Serbia should in particular: 

→  take further steps to strengthen  the administrative capacity of the coordination group and 

institutions involved in the own resources system; 

→  develop the organisational and procedural links between these institutions; 

→  step up preparations to meet the specific administrative conditions for own resources, as 

laid down in the own resources regulations. 

There was some progress in the underlying policy areas indirectly affecting the own resources 
system (for progress in these areas, see Chapters 16 – Taxation, 18 – Statistics, 29 – Customs 
union, and 32 – Financial control).    

Regarding traditional own resources (TOR), the customs legislation remains largely aligned 
with the EU acquis. The customs law and the law on customs service adopted in December 
2018  entered  into  force  in  June  2019.  Serbia’s  Customs  Administration  has  procedures  in 
place to ensure that  cases of fraud  and irregularities are reported to  the national  authorities. 
However,  reporting  is  manual  and  it  remains  to  be  seen  whether  the  national  reporting  can 
serve  OWNRES  purposes.  Customs  continued  the  simulation  of  TOR  accounts  in  2019. 
Control  of  activities  is  carried  out  by  several  departments  in  the  customs  administration, 
including its internal audit department, as well as the external audit carried out by the SAI.  

119 

 
 
As regards the value added tax (VAT)-based resource, Serbia continued to further align the 
national VAT system with EU rules. Sufficient data sources are available for the calculation 
of the Weighted Average Rate, deriving from the Supply and Use Tables that were published 
for the first time in 2019.  

As regards the gross national income-based resource national accounts are compiled largely 
in  line  with  the  European  System  of  Accounts  (ESA  2010).  In  2018  and  2019,  Serbia  has 
conducted a major revision of gross domestic product (GDP) data including a whole series of 
methodological improvements. Serbia made further efforts to   improve the exhaustiveness of 
the  national  accounts  and  the  gross  national  income  (GNI)  calculations.  The  GNI  estimates 
include those of the non-observed  economy. VAT fraud is not yet estimated. The results of 
tax  audits  are  not  yet  used  to  improve  the  exhaustiveness  of  the  national  accounts..  The 
Statistical Office continuously improves its methods and data sources and regularly transmit 
GNI and Gross Domestic Product (GDP) data to Eurostat. Serbia is recommended, based on 
the already existing description of sources and methods used to compile National Accounts, to 
start drafting the GNI Inventory. 

Regarding  administrative  infrastructure,  the  capacity  of  the  institutions  in  the  relevant 
policy areas needs to be further strengthened. The group for the coordination and management 
of own resources of the EU tasked with ensuring correct calculation, accounting, forecasting, 
collection, payment, control and reporting on the implementation of the EU’s own resources 
policy and rules needs to be better staffed (currently it has only one employee) and supported 
to  fulfil  its  coordination  tasks.  Also,  the  organisational  and  procedural  links  between  the 
institutions involved in own resources should be developed. 

120 

 
 
 
 
 
 
 
ANNEX I – RELATIONS BETWEEN THE EU AND SERBIA 

Within  the  framework  of  the  accession  negotiations,  eighteen  chapters  have  been  opened 
(including since last year’s report: 4 – free movement of capital; and 9 – financial services), 
two  of  which  have  been  provisionally  closed  (chapters  25  and  26).  Serbia  tabled  its 
negotiating  positions  on  chapters  2,  3,  14,  21  and  27.  Serbia  was  also  invited  to  table  its 
negotiating positions on chapters 10 and 28.  

Serbia  is  participating  in  the  Stabilisation  and  Association  Process.  Serbia  continued  to 
build  a  track  record  in  implementing  the  obligations  of  the  Stabilisation  and  Association 
Agreement (SAA). In 2019, Serbia adopted a new law on state aid control that largely aligns 
the country’s legislation with the EU acquis in this area. Compliance issues remain in the area 
of  fiscal  discrimination  on  alcohol,  on  restrictions  on  the  acquisition  of  real  estate,  and  on 
discriminatory  issuance  of  payment  cards  by  banks.  Finally,  as  regards  public  procurement, 
inter-governmental  agreements  concluded  with  third  countries  and  their  implementation 
should  follow  the  EU  principles  of  equal  treatment,  transparency,  non-discrimination  and 
competition. This has also the effect of preventing EU companies from participating in large-
scale infrastructure projects implemented in the country. 

Serbia  is  participating  in  the  Stabilisation  and  Association  Process.  Serbia  continued  to 
build  a  track  record  in  implementing  the  obligations  of  the  Stabilisation  and  Association 
Agreement (SAA). In 2019, Serbia adopted a new law on state aid control that largely aligns 
the  country’s  legislation  with  the  EU  acquis  in  this  area.  Serbian  legislation  remains  non-
compliant with the SAA in a number of areas, including fiscal discrimination on alcohol, on 
restrictions on the acquisition of real estate, and on discriminatory issuance of payment cards 
by  banks.  As  regards  public  procurement,  inter-governmental  agreements  concluded  with 
third  countries  and  their  implementation  do  not  always  follow  the  EU  principles  of  equal 
treatment, transparency, non-discrimination and competition. As a result, EU companies may 
be  prevented  from  participating  in  large-scale  infrastructure  projects  implemented  in  the 
country. 

the  EU  and  Serbia  continued. 
Regular  political  and  economic  dialogue  between 
Sub-committee  meetings  were  held,  together  with  a  meeting  of  a  special  group  on  public 
administration  reform.  The  Stabilisation  and  Association  Parliamentary  Committee  met  in 
October 2019. Serbia also participates in the ministerial dialogue between the economic and 
finance  ministers  of  the  EU  and  the  candidate  countries,  where  joint  recommendations  are 
adopted. The most recent meeting was held in May 2020. 

In 2019, Serbia’s alignment rate with EU Common Foreign and Security Policy positions was 
60%.  Serbia  continued  to  participate  actively  in  EU  crisis  management  missions  and 
operations under the Common Security and Defence Policy. 

Visa-free travel for citizens of Serbia travelling to the Schengen area has been in force since 
December 2009. A readmission agreement between the European Union and Serbia has been 
in  force  since  2008.  The  Commission’s  July  2020  third  report  under  the  visa  suspension 
mechanism concluded that Serbia continues to meet the visa liberalisation requirements. 

Under  IPA  II,  Serbia  continues  to  benefit  from  pre-accession  assistance  with  a  total 
allocation of EUR 1.4 billion for the period 2014-2020. The IPA National Programme 2019, 
adopted in November 2019, amounts to EUR 138.5 million overall, with most of the funding 
supporting  alignment  with  the  EU  acquis,  rule  of  law,  competitiveness,  research  and 
development and innovation, as well as helping to improve the capacities for civil protection 
and disaster resilience. The first part of the IPA National Programme 2020 amounting to EUR 
70.2 million was adopted in February 2020. The programme supports Serbia’s EU integration 

121 

 
 
and negotiation process, local development and sustainable social development and economic 
growth. An additional EUR 40 million in 2019 and EUR 45 million in 2020 were allocated to 
the IPA Rural Development programme (IPARD). As part of the response to the COVID-19 
pandemic, EUR 15 million have been refocused for urgent medical equipment and EUR 78.4 
million  for  socio-economic  recovery  measures  under  IPA  II.  Other  programmes  have  also 
been reoriented to help reduce the impact of the pandemic. The EU has continued to support 
Serbia in border and migration management following the refugee crisis of 2015-2016. Serbia 
also  benefits  from  the  IPA  multi-country  and  regional  programmes  and  participates  in  four 
cross-border cooperation programmes, as well as in transnational cooperation programmes. 

Serbia participates with IPA support in EU programmes, including Horizon 2020; COSME; 
Customs  and  Fiscalis  2020;  Erasmus+  and  Creative  Europe;  Europe  for  Citizens; 
Employment and Social Innovation. 

122 

 
 
 
 
STATISTICAL DATA (as of 03.04.2020) 
Serbia 

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

National accounts 
Gross domestic product (GDP) (million national currency) 
Gross domestic product (GDP) (million euro) 
GDP (euro per capita) 
GDP per capita (in purchasing power standards (PPS)) 
GDP per capita (in PPS), relative to the EU average (EU-27 = 100) 
Real GDP growth rate: change on previous year of GDP volume (%) 
Employment growth (national accounts data), relative to the previous year (%) 
Labour productivity growth: growth in GDP (in volume) per person employed, relative to the 
previous year (%) 
Unit labour cost growth, relative to the previous year (%) 
**3 year change (T/T-3) in the nominal unit labour cost growth index (2010 = 100) 
Labour productivity per person employed: GDP (in PPS) per person employed relative to EU 
average (EU-27 = 100) 
Gross value added by main sectors 
Agriculture, forestry 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 (%) 
Gross fixed capital formation by the general government sector, as a percentage of GDP (%) 

Business 
Industrial production volume index (2015 = 100) 
Number of active enterprises (number) 
Birth rate: number of enterprise births in the reference period (t) divided by the number of 
enterprises active in t (%) 

Note 

Note 

2007 
7 398 
77 474 

2007 
2 523 496 
31 558 
4 280 
8 870 
36.1 
6.4 
: 
: 

2014 
7 147b 
77 474 

2014 
4 160 549 
35 468 
4 970b 
10 500 
39.5 
-1.6 
: 
: 

2015 
7 114 
77 474 

2015 
4 312 038 
35 716 
5 030 
10 730 
39.1 
1.8 
: 
: 

2016 
7 076 
77 474 

2016 
4 521 265 
36 723 
5 200 
11 050 
39.2 
3.3 
: 
: 

2017 
7 040 
77 474 

2017 
4 754 368 
39 183 
5 580 
11 390 
39.0 
2.0 
: 
: 

2018 
7 001 
77 474 

2018 
5 068 589 
42 856 
6 140 
12 120 
40.2 
4.4 
: 
: 

: 
: 
: 

7.4 
28.7 
5.4 
58.5 
96.0 
23.8 
1.2 
27.3 
48.3 
: 

2007 
106.2 
: 
15.1 

: 
: 
: 

8.4 
26.2 
3.8 
61.6 
91.6 
15.9 
0.6 
42.1 
50.2 
: 

2014 
93.2 
: 
: 

: 
: 
: 

8.0 
26.4 
4.5 
61.1 
88.4 
16.8 
1.8 
45.3 
52.3 
: 

2015 
100.0 
: 
: 

: 
: 
: 

8.2 
26.3 
4.7 
60.8 
86.9 
16.9 
1.0 
48.6 
53.4 
: 

: 
: 
: 

7.3 
26.5 
5.0 
61.2 
87.0 
17.7 
1.8 
50.5 
57.1 
: 

2016 
104.9 
90 905p 
: 

2017 
109.3 
85 546p 
11.5p 

: 
: 
: 

7.7 
25.4 
5.4 
61.5 
85.8 
20.1 
2.6 
50.8 
59.3 
: 

2018 
110.8 
: 
: 

Note 

123 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Death rate: number of enterprise deaths in the reference period (t) divided by the number of 
enterprises active in t (%) 
People employed in SMEs as a share of all persons employed (within the non-financial 
business economy) (%) 
Value added by SMEs (in the non-financial business economy) (EUR million) 
Total value added (in the non-financial business economy) (EUR million) 

Inflation rate and house prices 
Harmonised consumer price index (HICP), change relative to the previous year (%) 
**Annual change in the deflated house price index (2015 = 100) 

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 balance for primary income (million euro) 
Balance of payments current account: net balance for secondary income (million euro) 
Net balance for primary and secondary income: of which government transfers (million euro) 
**3 year backward moving average of the current account balance relative to GDP (%) 
**Five year change in share of world exports of goods and services (%) 
Net balance (inward - outward) of foreign direct investment (FDI) (million euro) 
Foreign direct investment (FDI) abroad (million euro) 
of which FDI of the reporting economy in the EU-27 countries (million euro) 
Foreign direct investment (FDI) in the reporting economy (million euro) 
of which FDI of the EU-27 countries in the reporting economy (million euro) 
**Net international investment position, relative to GDP (%) 
Year on year rate of change in gross inflow of remittances (in national currency) from migrant 
workers (%) 

Public finance 
***General government deficit / surplus, relative to GDP (%) 
***General government gross debt relative to GDP (%) 
Total  government revenues, as a percentage of GDP (%) 
Total government expenditure, as a percentage of GDP (%) 

Financial indicators 
Gross external debt of the whole economy, relative to GDP (%) 
Gross external debt of the whole economy, relative to total exports (%) 

7.5 

: 

: 
: 

2007 
5.8 
: 

2007 
-5 473.6 
-7 112.9 
-245.0 
-981.6 
2 866.0 
125.3 
-11.5 
86.3 
2 528.2 
691.0 
: 
3 219.2 
: 
: 
: 

2007 
-1.8 
30.1 
41.5 
43.3 

2007 
55.1 
214.3 

Note 

Note 

1) 
2) 

Note 

Note 

124 

: 

: 

: 
: 

2014 
2.3 
: 

2014 
-1984.7 
-4110.7 
465.3 
-1342.6 
3 003.3 
89.2 
-7.4 
13.6 
1 236.3 
264.2 
35.1 
1 500.4 
1 051.7 
-91.5 
-5.4 

2014 
-6.2 
67.5 
39.0 
45.2 

2014 
72.4 
177.7 

: 

: 

: 
: 

2015 
1.5 
: 

2015 
-1 233.8 
-3 644.5 
729.2 
-1 658.0 
3 339.6 
125.2 
-4.9 
22.7 
1 803.8 
310.4 
48.8 
2 114.2 
1 509.6 
-94.9 
12.8 

2015 
-3.5 
71.2 
39.3 
42.8 

2015 
73.5 
166.8 

: 

: 

: 
: 

2016 
1.3 
: 

2016 
-1 074.9 
-3 118.9 
907.0 
-2 022.2 
3 159.2 
79.2 
-4.0 
33.6 
1 899.2 
227.8 
63.2 
2 126.9 
1 370.8 
-94.4 
-4.0 

2016 
-1.2 
68.8 
40.8 
41.9 

2016 
72.1 
152.4 

6.3p 

: 

: 
16 442 

2017 
3.3 
: 

2017 
-2 050.8 
-3 997.5 
966.1 
-2 533.4 
3 513.9 
141.3 
-3.9 
47.2 
2 418.1 
130.0 
67.2 
2 548.1 
1 701.7 
-90.8 
8.6 

2017 
1.1 
58.7 
41.5 
40.4 

2017 
65.1 
132.2 

: 

: 

: 
: 

2018 
2.0 
: 

2018 
-2 222.8 
-5 245.3 
1 091.6 
-2 206.6 
4 137.5 
262.1 
-4.4 
27.1 
3 187.9 
307.9 
95.5 
3 495.8 
1 961.3 
-86.9 
: 

2018 
0.6e 
54.4e 
41.5e 
40.9e 

2018 
62.5 
126.0 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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) 
**Annual change in financial sector liabilities (%) 
**Private credit flow, consolidated, relative to GDP (%) 
**Private debt, consolidated, relative to GDP (%) 
Interest rates: day-to-day money rate, per annum (%) 
Lending interest rate (one year), per annum (%) 
Deposit interest rate (one year), per annum (%) 
Euro exchange rates: average of period (1 euro = … national currency) 
Trade-weighted effective exchange rate index, 42 countries (2005 = 100) 
**3 year change (T/T-3) in the trade-weighted effective exchange rate index, 42 countries 
(2005 = 100) 
Value of reserve assets (including gold) (million euro) 

External trade in goods 
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 * 100) (number) 
Share of exports to EU-27 countries in value of total exports (%) 
Share of imports from EU-27 countries in value of total imports (%) 

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

Labour market 
Economic activity rate for persons aged 20–64: proportion of the population aged 20–64 that 
is economically active (%) 
*Employment rate for persons aged 20–64: proportion of the population aged 20–64 that are 
in employment (%) 
Male employment rate for persons aged 20–64 (%) 
Female employment rate for persons aged 20–64 (%) 

3) 
4) 
5) 

6) 

7) 

Note 

Note 

Note 
8) 

8) 

8) 
8) 

125 

3 141 
4 928 
11 407 
10 771 
: 
: 
: 
8.27 
12.50 
7.50 
79.964 
: 
: 

3 562 
5 075 
15 280 
19 708 
0.5p 
: 
: 
9.45 
10.50 
5.50 
117.306 
: 
: 

4 148 
5 776 
16 193 
20 719 
3.1p 
: 
: 
2.61 
6.50 
2.50 
120.733 
: 
: 

4 923 
6 546 
17 794 
21 632 
4.9p 
: 
: 
3.04 
5.50 
2.50 
123.118 
: 
: 

5 653 
7 360 
19 206 
22 806p 
3.4p 
: 
: 
2.27 
5.00 
2.00 
121.337 
: 
: 

6 704 
8 611 
22 047 
24 606 
12.6p 
: 
: 
2.43 
4.25 
1.75 
118.272 
: 
: 

9 633.6 

9 907.2 

10 378.0 

10 204.6 

9 961.6 

11 261.8 

2007 
13 501 
6 615 
-6 886 
101.8 
59.9 
56.8 

2007 
-4.7 

7.1 
70.9 
76.5 

2007 
67.9 

55.7 

65.1 
46.5 

2014 
13 512 
10 562 
-2 950 
105.5 
64.6 
55.8 

2014 
-4.9b 

5.7 
72.8b 
78.0b 

2014 
68.0b 

54.8b 

62.5b 
47.2b 

2015 
14 425 
11 447 
-2 978 
107.8 
65.5 
55.9 

2015 
-5.4 

5.3 
72.8 
77.9 

2015 
68.1 

56.0 

63.7 
48.3 

2016 
15 225 
12 742 
-2 483 
111.2 
65.7 
57.4 

2016 
-5.1 

5.4 
73.2 
78.3 

2016 
70.0 

59.1 

66.3 
51.9 

2017 
17 559 
14 365 
-3 194 
107.9 
65.7 
57.5 

2017 
-5.5 

4.7 
73.1 
78.1 

2017 
71.2 

61.5 

68.5 
54.5 

2018 
20 074 
15 650 
-4 424 
105.7 
67.0 
55.9 

2018 
-5.4 

4.9 
73.5 
78.4 

2018 
72.5 

63.1 

70.5 
55.8 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Employment rate for persons aged 55–64: proportion of the population aged 55–64 that are 
in employment (%) 
Employment by main sectors 
Agriculture, forestry and fisheries (%) 
Industry (%) 
Construction (%) 
Services (%) 
People employed in the public sector as a share of total employment, persons aged 20–64 
(%) 
People employed in the private sector as a share of total employment, persons aged 20–64 
(%) 
Unemployment rate: proportion of the labour force that is unemployed (%) 
Male unemployment rate (%) 
Female unemployment rate (%) 
Youth unemployment rate: proportion of the labour force aged 15–24 that is unemployed (%) 
Long-term unemployment rate: proportion of the labour force that has been unemployed for 
12 months or more (%) 
Unemployment rate for persons (aged 25–64) having completed at most lower secondary 
education (ISCED levels 0-2) (%) 
Unemployment rate for persons (aged 25–64) having completed tertiary education (ISCED 
levels 5-8) (%) 

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 
inflation index) (2010 = 100) 
GINI coefficient 
Poverty gap 
*Early leavers from education and training: proportion of the population aged 18–24 with at 
most lower secondary education who are not in further education or training (%) 

Standard of living 
Number of passenger cars relative to population size (number per thousand population) 
Number of mobile phone subscriptions relative to population size (number per thousand 
population) 
Mobile broadband penetration (per 100 inhabitants) 
Fixed broadband penetration (per 100 inhabitants) 

8) 

33.5 

36.7b 

37.3 

42.7 

45.5 

46.5 

: 
: 
: 
: 
: 

: 

18.1 
15.8 
21.2 
43.7 
14.6 

: 

: 

2007 
38 744 
95.5 

: 
: 
10.7 

2007 
199.6 
1 142.6 

: 
: 

8) 
8) 
8) 
8) 
8) 

Note 
9) 

8) 

Note 

19.9 
20.2 
4.5 
55.4 
31.4 

68.6 

19.4b 
18.5b 
20.5b 
47.4b 
13.0b 

18.6 

14.5 

2014 
61 426b 
97.5 

38 
39.3 
8.5b 

2014 
251.5b 
1 317.1 

: 
: 

19.4 
19.9 
4.5 
56.1 
29.7 

70.3 

17.8 
16.9 
18.8 
43.2 
11.4 

15.8 

14.4 

18.6 
20.2 
4.3 
57.0 
28.3 

71.7 

15.4 
14.8 
16.2 
34.9 
10.0 

13.7 

13.4 

2015 
61 145 
95.2 

40 
37.5 
7.5 

2016 
63 474 
97.6 

40 
39.4 
7.0 

2015 
257.7 
1 293.8 

2016 
267.7 
1 291.8 

: 
: 

: 
: 

17.2 
21.2 
4.1 
57.5 
27.8 

72.2 

13.6 
13.0 
14.4 
31.9 
8.2 

12.3 

11.8 

2017 
65 976 
98.5 

38 
38.8 
6.2 

2017 
279.6 
1 231.4 

: 
35.4 

15.9 
22.5 
4.4 
57.2 
27.3 

72.7 

12.8 
12.1 
13.8 
29.7 
7.6 

13.4 

10.6 

2018 
68 629b 
102.3 

36 
37.4 
6.8 

2018 
285.7 
1 211.4 

: 
37.8 

Infrastructure 

Note 

2007 

2014 

2015 

2016 

2017 

2018 

126 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Density of railway network (lines in operation per thousand km²) 

Length of motorways (kilometres) 

Innovation and research 
Public expenditure on education relative to GDP (%) 
*Gross domestic expenditure on R&D relative to GDP (%) 
Government budget appropriations or outlays on R&D (GBAORD), as a percentage of GDP 
(%) 
Percentage of households who have internet access at home (%) 

Environment 
*Index of greenhouse gas emissions,  CO2 equivalent (1990 = 100) 
Energy intensity of the economy (kg of oil equivalent per 1 000 euro GDP at 2010 constant 
prices) 
Electricity generated from renewable sources relative to gross electricity consumption (%) 
Road share of inland freight transport (based on tonne-km) (%) 

Energy 
Primary production of all energy products (thousand TOE) 
Primary production of crude oil (thousand TOE) 
Primary production of solid fuels (thousand TOE) 
Primary production of gas (thousand TOE) 
Net imports of all energy products (thousand TOE) 
Gross inland energy consumption (thousand TOE) 
Gross electricity generation (GWh) 

Agriculture 

Agricultural production volume index of goods and services (at producer prices) (2010 = 100) 
Utilised agricultural area (thousand hectares) 
Livestock numbers: live bovine animals (thousand heads, end of period) 
Livestock numbers: live swine (thousand heads, end of period) 
Livestock numbers: live sheep and live goats (thousand heads, end of period) 
Raw milk available on farms (thousand tonnes) 
Harvested crop production: cereals (including rice) (thousand tonnes) 
Harvested crop production: sugar beet (thousand tonnes) 
Harvested crop production: vegetables (thousand tonnes) 

Source: Eurostat and the statistical authorities in Serbia 

49.2 

374 

2007 
4.2 
0.58 
0.39 

26.0 

2007 
97.1 
543.2 

27.5 
: 

2007 
10 481 
662 
7 893 
198 
6 042 
16 601 
36 550 

2007 
86.7 
3 572.9 
1 087.1 
3 831.9 
1 881.2 
1 669.6 
6 663 
3 412 
964 

10) 

Note 

Note 

Note 

Note 

127 

49.3 

607 

2014 
4.0 
0.72 
0.40 

62.8 

2014 
72.0 
410.5 

31.0 
41.5 

2014 
9 444 
1 216 
5 713 
444 
3 736 
13 359 
34 060 

2014 
110.1 
3 518.2 
920.1 
3 235.7 
1 966.7 
1 596.1 
10 848 
3 507 
965 

48.6 

693 

2015 
3.7 
0.81 
0.41 

63.8 

2015 
81.7 
447.5 

27.1 
41.2 

2015 
10 763 
1 121 
7 201 
456 
4 108 
14 809 
38 298 

2015 
103.2 
3 480.4 
915.6 
3 284.4 
1 991.9 
1 610.8 
8 437 
2 183 
1 108 

48.6 

741 

2016 
3.6 
0.84 
0.36 

64.7 

2016 
81.5 
449.8 

29.0 
48.7 

2016 
10 695 
1 028 
7 201 
417 
4 593 
15 432 
39 342 

2016 
112.3 
3 456.0 
892.8 
3 021.2 
1 865.1 
1 603.7 
10 869 
2 684 
1 156 

48.6 

963 

2017 
3.7 
0.87 
0.38 

68.0 

2017 
80.4 
449.4 

24.5 
51.5 

2017 
10 496 
988 
7 216 
389 
5 330 
15 748 
37 045 

2017 
98.9 
3 438.1 
898.7 
2 910.5 
1 886.8 
1 599.3 
6 793 
2 514 
1 087 

48.1 

963 

2018 
3.6 
0.92 
0.37 

72.9 

2018 
: 
424.3 

28.0p 
63.1 

2018 
10 025 
976 
6 609 
358 
5 385 
15 528 
: 

2018 
113.3 
3 486.9 
878.3 
2 782.3 
1 907.6 
1 590.0 
10 529 
2 325 
830 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
: = not available 

b = break in series 

e = estimated value 

f = forecast 

p = provisional 

s = Eurostat estimate 

u = low reliability 

* = Europe 2020 indicator 

** = Macroeconomic Imbalance Procedure (MIP) indicator 
*** = The government deficit and debt data of enlargement countries are published on an "as is" basis and without any assurance 
as regards their quality and adherence to ESA rules. 

Footnotes 

1)  Secondary income only. 
2)  2007: based on balance of payments manual edition 5 (BPM5). 
3)  The money supply M1 consists of currency in circulation and funds in giro, current and other accounts belonging to 

the owners of money balances in banks' liabilities, including money balances in the accounts of local government 
bodies, in other words accounts from which payments can be made without any restrictions. 
4)  The money supply M2, in addition to M1, includes other dinar deposits, both short-and long-term. 
5)  The money supply M3, in addition to M2, includes short and long-term foreign currency deposits (without the so-

called frozen foreign currency savings). 

6)  2014: the total financial sector liabilities are the sum of all liabilities of the financial sector excluding captive financial 

institutions. 

7)  Arithmetic mean of official middle exchange rates of the dinar against the euro on working days. 
8)  2014: change of weighting system. 
9)  2007: wages and salaries paid to employees of legal entities. 2014-2017: wages and salaries paid to employees of 
legal entities and of unincorporated enterprises. 2018: average earnings calculated on the basis of the total amount 
of accrued earnings for the reporting month and the number of full-time equivalent (FTE) employees. 

10)  Underestimate as the density has been calculated relative to the surface area (including inland waters) rather than to 

the land area. 

128