COMMISSION STAFF WORKING DOCUMENT Kosovo* 2021 Report Accompanying the document Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions 2021 Communication on EU Enlargement Policy (*_x0009_This designation is without prejudice to positions on status, and is in line with UNSCR 1244/1999 and the ICJ Opinion on the Kosovo declaration of independence.)
Date: 2021-10-19
Institutions: Directorate-General for Neighbourhood and Enlargement Negotiations, European Commission
Subjects: Kosovo, accession criteria, accession negotiations, pre-accession strategy, regional cooperation

EN 

  EN 

   EUROPEAN COMMISSION  Strasbourg, 19.10.2021  SWD(2021) 292 final/2  COMMISSION STAFF WORKING DOCUMENT  Kosovo* 2021 Report    Accompanying the document Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions  2021 Communication on EU Enlargement Policy        (* This designation is without prejudice to positions on status, and is in line with UNSCR 1244/1999 and the ICJ Opinion on the Kosovo declaration of independence.)     {COM(2021) 644 final} - {SWD(2021) 288 final} - {SWD(2021) 289 final} - {SWD(2021) 290 final} - {SWD(2021) 291 final} - {SWD(2021) 293 final} - {SWD(2021) 294 final}  
 
 
TABLE OF CONTENTS 

1. Introduction ......................................................................................................................................... 3 

1.1.   Context .................................................................................................................................... 3 

1.2. 

Summary of the report   ............................................................................................................ 3 

2.  

The Fundamentals of the Accession Process ........................................................................... 7 

2.1. 

Functioning of democratic institutions and Public Administration Reform ............................ 7 

2.1.1  Democracy .......................................................................................................................... 7 

2.1.2  Public administration reform ............................................................................................ 12 

2.2 

Rule of law and fundamental rights ....................................................................................... 16 

2.2.1  Judiciary and fundamental rights ...................................................................................... 16 

2.2.2  Justice, freedom and security ............................................................................................ 37 

2.3. Economic development and competitiveness ............................................................................ 51 

2.3.1. The existence of a functioning market economy ................................................................ 51 

2.3.2. The capacity to cope with competitive pressure and market forces within the Union ........ 58 

2.4. Public procurement, statistics, financial control ........................................................................ 61 

Public procurement ....................................................................................................................... 61 

Statistics ........................................................................................................................................ 63 

Financial control ............................................................................................................................ 65 

3.  Good neighbourly relations and regional cooperation ................................................................. 68 

4.  Normalisation of relations between Kosovo and Serbia .............................................................. 70 

5.      European standards ...................................................................................................................... 71 

5.1. Internal Market ........................................................................................................................... 71 

5.1.1. Free movement of goods ..................................................................................................... 71 

5.1.2. Movement of workers, services and right of establishment .............................................. 73 

5.1.3.  Free movement of capital .................................................................................................. 74 

5.1.4. Company law ....................................................................................................................... 75 

5.1.5. Intellectual property law ..................................................................................................... 76 

5.1.6. Competition ........................................................................................................................ 77 

5.1.7. Financial services ................................................................................................................ 79 

5.1.8. Consumer and Health Protection ....................................................................................... 81 

5.2.   Competitiveness and inclusive growth .................................................................................... 83 

5.2.1. Information society and media ........................................................................................... 83 

5.2.2. Taxation ............................................................................................................................... 85 

5.2.3. Social policy and employment ............................................................................................ 86 

5.2.4. Enterprise and industrial policy .......................................................................................... 89 

5.2.4. Science and research .......................................................................................................... 91 

1 

 
 
5.2.5. Education and culture ......................................................................................................... 92 

5.2.5. Customs............................................................................................................................... 94 

5.3.  The Green Agenda and sustainable connectivity ................................................................... 95 

5.3.1.  Transport policy ............................................................................................................... 95 

5.3.2.  Energy ................................................................................................................................ 97 

5.3.3.  Trans-European Networks ............................................................................................... 99 

5.3.4.  Environment and climate change .................................................................................. 100 

5.4.  Resources, agriculture and cohesion ................................................................................... 103 

5.4.1. Agriculture......................................................................................................................... 103 

5.4.2. Food safety, veterinary and phytosanitary policy ............................................................ 104 

5.4.3.  Fisheries ......................................................................................................................... 105 

5.5. 

External relations ................................................................................................................. 106 

5.5.1. Trade issues ....................................................................................................................... 106 

Annex I – Relations between the EU and Kosovo ............................................................................... 108 

2 

 
 
 
 
 
1. INTRODUCTION 

1.1.   CONTEXT  

The  EU-Kosovo  Stabilisation  and  Association  Agreement  (SAA)  has  been  in  force  since 
April 2016. A second phase of the European Reform Agenda (ERA) was launched in October 
2020, to further guide the implementation of EU-related reforms under the SAA framework. 
The authorities continued to demonstrate publicly their commitment to Kosovo advancing on 
its European path. 

The Commission’s proposal to lift the visa requirements for Kosovo citizens is still pending 
in the Council. The Commission maintains the assessment it made in July 2018 that Kosovo 
has  fulfilled  all  visa  liberalisation  benchmarks.  The  European  Parliament  reconfirmed  its 
support for the Commission’s proposal for visa liberalisation.  

The  EU-facilitated  dialogue  on  normalisation  of  relations  between  Kosovo  and  Serbia 
continued with meetings at leaders’ and chief negotiators’ level.  

The  COVID-19  pandemic  continued  throughout  the  reporting  period,  following  similar 
patterns across the region. By end of September 2021, Kosovo had recorded around 159 000 
cases  and  over  2  900  deaths  related  to  the  pandemic.  Around  24.6%  of  the  population  was 
fully vaccinated. 

The authorities responded by re-introducing public health containment measures, as well as 
by  acquiring  additional  medical  equipment  to  tackle  the  emergency,  as  the  health  system 
came under serious strain. In order to mitigate the severe economic and social impact of the 
crisis,  Kosovo  adopted  two  fiscal  packages  during  the  reporting  period.  Kosovo  started  its 
vaccination  campaign  at  the  end  of  March  2021,  when  it  received  its  first  COVID-19 
vaccines.  By  early  September  2021,  Kosovo  had  reiceved  a  total  of  1.2  million  doses, 
including through the COVAX initiative, donations from the EU and other partners, as well 
as via direct procurement.  

1.2. 

SUMMARY OF THE REPORT1  2 

In terms of political criteria, most of the reporting period was marked by political instability 
in  Kosovo.  Following  early  parliamentary  elections  in  February  2021,  a  new  government 
took office, with an unprecedentedly strong parliamentary majority.  

During  most  of  the  reporting  period,  legislative  activities  were  limited  due  to  this  political 
instability,  including  EU-related  reform  efforts.  The  adoption  of  a  second  phase  of  the 
European  Reform  Agenda  (ERA  2)  and  its  Action  Plan,  endorsed  by  the  Assembly  in 
October  2021,  and  a  solid  government  focus,  confirmed  the  positive  trend  of  Kosovo’s 
renewed commitment to EU-related reforms.  

After  a  Constitutional  Court  decision  of  December  2020  invalidated  the  election  of  the 
previous government in June 2020, the Assembly was dissolved and early elections were held 

1  This  report  covers  the  period  from  June  2020  to  June  2021.  It  is  based  on  input  from  a  variety  of  sources, 
including contributions from the government of  Kosovo, the EU Member States, European Parliament reports 
and information from various international and non-governmental organisations. This also includes the results of 
comparative assessments and indices produced by other stakeholders, in particular on rule of law. 
2 For the  state of play the report uses the  following assessment scales: early stage, some level of preparation, 
moderately  prepared,  good  level  of  preparation  and  well  advanced.  For  progress  made  during  the  reporting 
period,  the  following  scale  has  been  used:  backsliding,  no  progress,  limited  progress,  some  progress,  good 
progress and very good progress. Where appropriate, also interim steps have been used. 

3 

 
 
                                                           
 
in February 2021. Following the landslide victory of an opposition alliance led by the party 
Vetëvendosje, the new Assembly majority approved a new government in March 2021.  

In November 2020, Kosovo’s President in office was indicted and he was arrested on charges 
of  war  crimes  and  crimes  against  humanity  by  the  Specialist  Prosecutor’s  Office.  He 
subsequently resigned from office. The then Assembly Speaker became acting President, in 
line  with  the  Constitution,  before  being  elected  by  the  new  legislature  to  serve  a  full 
presidential term in April 2021.     

For  a  large  part  of  the  reporting  period,  the  polarised  political  atmosphere,  the  lack  of  an 
effective government majority and the lack of a quorum severely affected decision-making in 
the  Assembly.  There  is  a  need  for  the  Assembly  to  improve  its  regulatory  framework, 
including the rules of procedure. The Assembly  remained open during the pandemic, while 
maintaining health protection measures. 

Overall,  the  legislative  elections  of  February  2021  were  well-administered,  transparent  and 
competitive,  despite  several  shortcomings.  Kosovo’s  electoral  process  remains  in  need  of 
comprehensive  strengthening  to  address  long-standing  weaknesses  throughout  the  electoral 
cycle, as identified in successive EU election observation missions since 2014. Strengthening 
the  legal  and  institutional  framework  on  campaign  and  political  party  financing  remains  a 
pending area in need of reform. 

The situation in the north of Kosovo remains challenging, in particular in terms of corruption, 
organised crime, and the conditions for freedom of expression. 

There  is  some  level  of  preparation  in  the  area  of  public  administration  reform,  but  there 
was  no  progress  on  this  front  during  the  reporting  period,  given  the  frequent  government 
changes.  The  Law  on  Public  Officials  entered  into  force  in  June  but  no  significant  efforts 
were  made  to  start  its  implementation  especially  with  regard  to  recruitments.  The 
establishment  of  an  effective  central  recruitment  department  was  delayed.  Undue  political 
influence over appointments and dismissals of senior public functionaries and civil servants 
has been observed in some instances and Kosovo has met only some of its commitments to 
merit-based  criteria.  It  made  no  progress  in  addressing  the  inequalities  in  the  public  sector 
salary  system.  The  process  to  streamline  agencies  has  stalled.  Legal  uncertainty  for 
businesses  and  individuals  persists  due  to  the  continued  lack  of  progress  on  harmonising 
sectorial  legislation  with  the  Law  on  General  Administrative  Procedure.  A  renewed 
commitment to public administration reform is urgent. 

Kosovo is still at an early stage in developing a well-functioning judicial system. The overall 
administration  of  justice  continues  to  be  slow,  inefficient  and  vulnerable  to  undue  political 
influence. Some progress was made during the reporting  period. The  Functional  Review of 
the Rule of Law Sector resulted in a Rule of Law Strategy and Action Plan, which outlines 
the main challenges in the rule of law system and was adopted in August 2021. Kosovo rolled 
out  an  electronic  case-management  system  and  set  up  a  central  criminal  records  system, 
however  challenges  remain.  It  has  made  efforts  to  implement  the  Law  on  mediation.  The 
COVID-19 pandemic affected effective case processing and the holding of (and public access 
to) court hearings in Kosovo. The new government has been considering several options for a 
process of ‘vetting’ of the judiciary and prosecution. In this context, the potential introduction 
of  a  one-off  full  re-evaluation  of  all  prosecutors  and  judges  is  a  source  of  serious  concern. 
Such a process should be considered only as an exceptional measure of last resort, once all 
existing  tools  and  mechanisms  to  ensure  integrity  and  fight  corruption  of  judicial 
officeholders  have  been  exhausted,  and  should  be  in  line  with  European  and  international 
standards as well as with Venice Commission advice.  

4 

 
 
Kosovo  is  at  an  early  stage/has  some  level  of  preparation  in  the  fight  against  corruption. 
During  the  reporting  period,  limited  progress  was  made,  including  on  the  investigation  and 
prosecution  of  high-level  cases  in  the  track-record.  Sustained  efforts  are  needed  to  achieve 
more  proactive  investigations,  final  court  decisions  and  final  confiscation  of  assets.  The 
Special  Prosecution  Office  was  strengthened  as  the  Corruption  and  Financial  Crime 
Department  became  operational  and  it  achieved  an  overall  increase  in  staffing  levels.  The 
anti-corruption  legal  package  and  the  revised  Criminal  Procedure  Code  still  need  to  be 
adopted. The legal framework on confiscation is in force but is not being consistently applied, 
and the value of finally confiscated assets remains low. Overall, corruption is widespread and 
remains  an  issue  of  serious  concern.  Despite  efforts  made,  there  is  a  need  for  strong  and 
continual  political  will  to  effectively  address  systemic  corruption  risks,  as  well  as  a  robust 
criminal justice response to high-level corruption.  

Kosovo is  at  an early stage in  the  fight against organised  crime.  It  made limited progress 
during  the  reporting  period  on  the  investigation  and  prosecution  of  organised  crime  cases. 
The  Special  Prosecution  Office  was  strengthened  with  additional  specialised  staff  and 
targeted training activities took place. However, the powerful tools envisaged by the Criminal 
Code and the Law on extended powers of confiscation are  yet to be fully utilised by police 
and prosecutors. Measures are needed to strengthen the prosecution as well as to ensure that 
there is no political interference in the operational activities of all law enforcement bodies.  

In  July  2020,  Europol  and  the  Kosovo  Police  concluded  a  Working  Arrangement.  The 
additional agreements necessary to operationalise this cooperation, allowing for access to the 
Secure  Information  Exchange  Network  Application  (SIENA)  and  the  exchange  of  Liaison 
Officers, were finalised in September 2021. 

Progress was made in the fight against terrorism, in line with the objectives set out in the 
EU-Kosovo implementing arrangement for the Joint Action Plan on counter-terrorism for the 
Western  Balkans,  especially  with  regard  to  the  rehabilitation  and  reintegration  of  foreign 
terrorist fighters and their families. The Kosovo authorities need to be more effective in their 
efforts to combat money laundering and the applicable law should be brought in line with EU 
acquis and with international standards.  

The legal framework broadly guarantees the protection of human and fundamental rights in 
line with European standards. However, additional efforts remain needed to fully implement 
it and to  improve coordination and oversight  of fundamental  rights  policies and legislation. 
Authorities  still  depend  on  donor  support  and  guidance,  and  need  to  assume  greater 
ownership. More needs to be done to effectively guarantee the rights of persons belonging to 
minorities, including Roma3 and Ashkali and displaced persons, to ensure gender equality in 
practice,  and  to  advance  the  protection  of  cultural  heritage.  As  regards  freedom  of 
expression, Kosovo has some level of preparation and benefits from a pluralistic and lively 
media  environment.  Concerns  remain,  however,  regarding  public  smear  campaigns,  threats 
and  physical  attacks  on  journalists.  The  lack  of  financial  self-sustainability,  further 
exacerbated  by  the  COVID-19  pandemic,  leaves  the  media  vulnerable  to  political  and 
business interests. The public broadcaster also remains vulnerable to political influence and a 
sustainable solution for its funding still needs to be found.  

The Kosovo authorities continued to make progress in managing both regular migration and 
mixed migration flows in the difficult context of the COVID-19 pandemic. Kosovo further 

3 All these groups are considered under the wider ’Roma‘ umbrella term under the EU framework for National 
Roma Integration Strategies 

5 

 
 
                                                           
increased  its  accommodation  capacity  and  stepped  up  preparedness  to  handle  an  increased 
influx of migrants.  

As regards the economic criteria, Kosovo has made limited progress and is at an early stage 
of developing a functioning market economy. The economy plunged into recession in 2020, 
but this trend was reversed in the first half of 2021. Long-standing structural problems, such 
as  the  lack  of  economic  diversification  and  the  dependence  on  financial  flows  from  the 
diaspora  made  Kosovo  very  vulnerable  to  the  pandemic-related  lockdown  and  travel 
restrictions. In response to the crisis, the authorities suspended the fiscal rule and adopted two 
fiscal packages. A strong increase in spending and shrinking tax revenues resulted in a large 
budget deficit in 2020 but recovery in tax revenue helped achieve a budget surplus in the first 
half of 2021. The business environment saw little improvement. Private sector development 
remains  constrained  by  a  widespread  informal  economy,  a  slow  and  inefficient  judiciary,  a 
high prevalence of corruption and the overall weak rule of law. 

Kosovo has made limited progress and is at an early stage in terms of capacity to cope with 
competitive pressure and market forces in the EU. Little progress was made on improving 
the quality of education and addressing skill gaps in the labour market. Kosovo made some 
progress  in  improving  road  infrastructure  and  increasing  investment  in  renewables,  but  the 
coal-based,  outdated  and  unreliable  energy  supply  remains  a  concern.  Kosovo  made  some 
progress as regards the digitalisation of the economy. Structural  changes are emerging only 
slowly  as  the  economy  remains  highly  reliant  on  small  and  very  small  firms  which  cannot 
compete  internationally,  while  the  export  structure  remains  dominated  by  a  few  products, 
such as base metals. 

As  regards  good  neighbourly  relations  and  regional  cooperation,  Kosovo  continued  to 
participate  in  most  regional  fora.  Kosovo  maintained  overall  good  relations  with  Albania, 
Montenegro and North  Macedonia. There has been no change in  Kosovo’s formal relations 
with Bosnia and Herzegovina, which does not recognise Kosovo’s independence and the two 
maintain a strict visa regime. 

Regarding the normalisation of relations with Serbia, the EU-facilitated dialogue continued 
with  high-level  meetings  on  15  June  and  19  July  2021,  as  well  as  three  chief  negotiators’ 
meetings.  During  the  reporting  period  both  parties  appointed  new  chief  negotiators  and 
negotiating  teams.  Kosovo  needs  to  engage  constructively  and  make  further  substantial 
efforts  on  the  implementation  of  all  past  agreements  and  contribute  to  reaching  a 
comprehensive  legally  binding  normalisation  agreement  with  Serbia.  Such  an  agreement  is 
urgent and crucial so that Kosovo and Serbia can advance on their respective European paths.  

As  regards  alignment  with  European  standards,  some  progress  was  made  during  the 
reporting period in the areas of public procurement, statistics and financial control. In most of 
the  areas  covered  by  Cluster  2  on  internal  market,  Kosovo  has  some  level  of  preparation 
namely the free movement of goods, capital, company law and intellectual property, whereas 
it is moderately prepared on movement of workers, services and right of establishment, and 
on financial services. Kosovo is at an early stage of preparation on competition, as well as on 
consumer policy and health protection. In the reporting period, Kosovo made some progress 
in all areas except on consumer policy and health protection, where only limited progress was 
made.  In  the  area  of  competitiveness  and  inclusive  growth,  it  made  some  progress  in  most 
areas (customs, taxation, information society and media, enterprise and industrial policy), but 
made only limited progress on research and education and culture. It made some progress on 
policy areas related to the Green Agenda and sustainable  connectivity, in the energy sector, 
but  only  limited  progress  in  the  areas  of  transport,  environment  and  climate  change.  In  the 

6 

 
 
field of resources and agriculture, it made only limited progress on agriculture, food safety, 
veterinary  and  phytosanitary  policy.  In  trade  policy,  some  progress  was  made  in  reducing 
Kosovo’s  trade  deficit,  but  Kosovo  has  not  yet  ratified  the  CEFTA  additional  protocols  on 
trade facilitation and trade in  services.  Overall, Kosovo needs to  improve its administrative 
capacity and coordination, across all sectors, to achieve effective implementation of the EU 
acquis.  

2.  

THE FUNDAMENTALS OF THE ACCESSION PROCESS 

FUNCTIONING OF DEMOCRATIC INSTITUTIONS AND PUBLIC ADMINISTRATION 

2.1. 
REFORM 

2.1.1  Democracy 

The reporting period was marked by political instability and by early parliamentary elections, 
the third one in less than four years. In this context, most legislative activities, including EU-
related reform efforts, were constrained. 

In  December  2020,  the  Constitutional  Court  invalidated  the  June  2020  election  of  the 
government  of Prime Minister Hoti,  and  requested the dissolution  of the  Assembly  and the 
holding of early elections, which subsequently took place on 14 February 2021. The elections 
were overall well-administered, despite shortcomings, and delivered a landslide victory to the 
opposition Vetëvendosje party. The new Assembly majority approved a new government led 
by Albin Kurti in March 2021.  

Kosovo’s President in office, Hashim Thaçi, was indicted and arrested on war crimes charges 
by  the  Specialist  Prosecutor’s  Office  and  resigned  from  office  in  November  2020.  Then 
Assembly  Speaker  Vjosa  Osmani  became  acting  President,  in  line  with  the  Constitution. 
Osmani was ultimately elected to a full presidential term by the new legislature in April 2021. 
Several opposition parties (PDK, AAK and Srpska Lista) boycotted the presidential election 
procedure in the Assembly. 

Elections 

The  early  legislative  elections  held  in  February  2021  were  overall  well-administered, 
transparent and competitive. However, significant vulnerabilities, in particular with regard to 
vote-counting, the process of out-of-Kosovo voting and handling of complaints were evident. 
In  Kosovo  Serb  areas,  the  campaign  was  more  subdued,  with  almost  no  visible  campaign 
activities  by  parties  other  than  the  dominant  Kosovo  Serb  political  party,  Srpska  Lista. 
Kosovo’s  electoral  process  remains  in  need  of  comprehensive  strengthening,  effectively 
addressing  long-standing  weaknesses  throughout  the  electoral  cycle,  as  identified  in 
successive EU election observation missions since 2014. The strengthening of the legal and 
institutional framework on campaign and political party financing remains outstanding. 

Following  a  ruling  by  the  Constitutional  Court  in  December  2020,  which  declared  the 
Assembly’s  election  of  the  government  led  by  Prime  Minister  Avdullah  Hoti  as 
unconstitutional, early general elections were held in Kosovo on 14 February 2021.  

The  election  delivered  a  landslide  victory  to  the  opposition  Vetëvendosje  party,  which 
received  50.3%  of  votes  cast,  winning  58  seats  in  the  Assembly.  The  Democratic  Party  of 
Kosovo won 19 seats (17.0%), while the former governing parties, the Democratic League of 
Kosovo  (12.7%)  and  the  Alliance  for  the  Future  of  Kosovo  (7.1%)  won  15  and  8  seats 
respectively.  Srpska  Lista  won  all  10  seats  reserved  for  the  Kosovo  Serb  community  with 
5.1% of the total  votes.  The remaining 10 seats  in  Kosovo’s 120 seat  Assembly  are shared 

7 

 
 
 
between  nine  political  parties  representing  Kosovo’s  Turkish,  Bosniak,  Roma,  Ashkali, 
Egyptian and Gorani communities. Overall voter turnout was 48.8% (compared with 44.5% 
in 2019).  

The elections were competitive, and campaign freedoms were generally respected. There was 
a  vibrant  campaign  except  in  Kosovo  Serb  majority  areas,  where  campaign  activities  of 
opposition  parties  to  Srpska  Lista  were  barely  visible.  Despite  a  very  short  timeframe  and 
challenges  caused  by  the  COVID-19  pandemic,  the  elections  were  well-administered  and 
conducted  in  a  transparent  manner,  although  problems  with  out-of-Kosovo  voting  reduced 
confidence in part of the process. The de-certification of a number of candidates due to their 
convictions in the last three years – including the head of the Vetëvendosje list, Albin Kurti – 
caused  controversy  and  underlined  the  need  to  harmonise  the  relevant  Kosovo  legal  and 
constitutional provisions, in line with international standards.  

Election day was assessed by observers as orderly, and voters participated in high numbers. 
However,  as  with  previous  elections,  a  large  number  of  recounts  were  ordered  due  to 
discrepancies in the results protocols (especially regarding the number of preferential votes), 
delaying the final results.  

Results  concerning  several  seats  reserved  for  the  Bosniak  and  Roma  communities  were 
appealed  by  competing  non-majority  parties.  The  Electoral  Complaints  and  Appeals  Panel 
partially accepted the complaints and annulled a number of votes from Serb-majority areas, 
arguing  that  the  principle  of  guaranteed  seats  for  the  representation  of  each  non-majority 
community  had  not  been  respected.  These  decisions,  confirmed  by  the  Supreme  Court, 
resulted in two of the accused political entities losing one seat each.  

More  women  candidates  were  positioned  in  the  first  places  in  the  political  parties’  lists 
and are increasingly gaining positions of responsibility within the parties. However, they still 
did not receive equal financial or logistical support for their campaigns.  

On 17 October 2021 local elections were held in Kosovo, with an EU Election Observation 
Mission deployed that will issue an assessment after the elections.  

The  electoral  legal  framework  remains  essentially  unchanged  since  2010,  despite  the 
recommendations  of  multiple  EU  election  observation  and  expert  missions.  Significant 
shortcomings remain, which continue to lead to inconsistent and selective implementation of 
electoral rules, including by the CEC and the courts. This impacts on important aspects of the 
election  process,  such  as  candidate  certification,  voter  registration  and  the  election  results. 
Almost all prior EU recommendations remain unaddressed. 

Despite a joint  commitment  undertaken by the Kosovo assembly parties  in  2019 to  address 
the  shortcomings  of  the  electoral  process  in  line  with  recommendations  of  the  electoral 
observation missions, the Assembly failed to establish an ad hoc parliamentary committee on 
these  matters.  A  short-lived  initiative  by  the  new  majority  in  April  2021  to  push  through 
changes  to  the  rules  governing  out-of-Kosovo  voting  was  abandoned  following  intense 
criticism,  including  by  civil  society.  The  new  legislature  should  establish  without  further 
delay the ad hoc committee in order to address the shortcomings comprehensively and in a 
cross-party manner. 

On  14  June  2021,  the  President  of  Kosovo  dismissed  and  replaced  the  Chairwoman  of  the 
CEC,  accusing  her  of  having  violated  the  principles  of  impartiality,  independence  and 
integrity  in  carrying  out  her  work.  The  Chairwoman  rejected  all  the  accusations,  and  the 
dismissal decision was strongly criticised by opposition parties and parts of the civil society 
as being politically motivated. 

8 

 
 
Parliament  

For a large part of the reporting period, a polarised political atmosphere, a lack of effective 
government majority and of quorum severely impacted decision-making in the Assembly. In 
general, the Assembly needs to improve its performance as a forum for constructive political  
dialogue  and  representation,  as  well  as  guarantee  proper  checks  and  balances.  It  urgently 
needs 
function  and  an 
effective oversight  of  the  executive.  The  new  legislature  needs  to  improve  its  regulatory 
framework, including rules of procedures. The Assembly remained open during the pandemic 
crisis, while maintaining sanitary protection measures.  

to  exercise 

functioning, 

legislative 

reinforce 

its 

its 

to 

The  preceding  (seventh)  legislature  lasted  only  one  year,  until  December  2020.  It  adopted 
only  17  laws  out  of  which  twelve  were  ratification  of  international  agreements.  The 
remaining ones were mainly financial bills. It took several months and seven failed attempts 
for the Assembly to adopt the Law on Economic Recovery, meant to mitigate the economic 
consequences  of  the  COVID-19  crisis.  Its  deliberations  were  further  marred  by  frequent 
absences of MPs from the Assembly proceedings, and procedural irregularities.   

Following  the  early  elections  of  14  February  2021,  the  new  (eighth)  legislature  of  the 
Assembly  of  Kosovo  was  constituted  on  22  March.  Glauk  Konjufca  (Vetëvendosje)  was 
elected Speaker of the Assembly the same day, prior to the election with 67 votes of the new 
government  led  by  Prime  Minister  Albin  Kurti.  The  government  is  based  on  a  coalition 
between  Vetëvendosje  and  individual  non-majority  community  political  representatives  and 
enjoys a stable majority.    

The  eighth  legislature has  the  highest  number  of  women  MPs  (40)  since  2008;  only  a  few 
needed the legal quota (one third) to be elected. Out of the fourteen functional committees of 
the Assembly, eight are chaired by women.  

inquiries, 

the  seventh 

legislature  formed 

three ad  hoc 
As  regards  parliamentary 
parliamentary  committees,  on  the  management  of  the  COVID-19  pandemic,  on  the 
privatisation  process  and  on  the  licensing  of hydropower-plant  construction.  However,  due 
to the dissolution of the Assembly none of the committees was able to finalise their reports. 
The Assembly’s Committee on Oversight of Public Finances reviewed the reports provided 
by  the  Office  of  the  Auditor  General,  but  there  was  no  effective  follow  up.  In  September 
2020,  the  Assembly  appointed  a  new  Ombudsperson.  In  August  2021,  it  elected  a  new 
Auditor General, upon the proposal of the President of Kosovo. 

During  the  first  months  of  its  new  legislature,  the  Assembly  initiated  changes  to  the 
management  of  several  publicly  owned  enterprises,  agencies  and  institutions.  New  boards 
and personnel should be appointed in line with transparent and merit-based procedures. 

The  parliamentary  oversight  of  the  executive  as  well  as  of  other  institutions  continues  to 
remain  weak.  The  Assembly  Presidency  needs  to  develop  a  meaningful  strategic  plan  and 
allocate  sufficient  budget  to  enhance  the  Assembly’s  administrative  capacities  and  human 
resources  in  order  to  strengthen  existing  parliamentary  instruments  for  oversight  of  the 
executive and other independent institutions. 

The financing and expenditures of political parties and electoral campaigns remains non-
transparent and the existing legal framework is mostly not enforced. Legislative amendments 
tabled by the previous government, were debated but not adopted. Independent oversight and 
accountability  mechanisms,  effective  enforcement  and  sanctions  remain  necessary.  Timely 

9 

 
 
 
 
publication of parties’ accounts needs to be ensured. The new government should work with 
all  parties  and  civil  society  to  ensure  that  comprehensive  reforms  are  adopted,  building  on 
work done previously and on the basis of the Venice Commission guidance. 

Governance 

During the first half of the reporting period, in a context of political instability and COVID-
19 pandemic, only limited progress was made in further implementing EU-related reforms. 
A second phase European Reform Agenda was launched in October 2020. In May 2021, the 
new  government  of  Prime  Minister  Kurti  adopted  its  programme,  which  prioritises  the 
management of the COVID-19 pandemic  and its consequences,  as  well as  the fight  against 
corruption  and  ambitious  plans  for  longer-term  economic  and  social  reforms.  The 
government  committed to implementing the second phase of the European Reform  Agenda 
through  a  dedicated  action  plan  adopted  in  August  2021  and  endorsed  by  the  Assembly  in 
October 2021. In pursuing its reform objectives, it is essential that the government builds on 
existing  achievements  and  commitments,  while  acting  in  line  with  European  standards. 
Deadlines  and  obligations  set  out  in  the  Stabilisation  and  Association  Agreement  must  be 
respected.  

The previous government led by Prime Minister Avdullah Hoti (LDK) was elected  in  June 
2020 with 61 votes, after the preceding short-lived coalition between Vetëvendosje and LDK 
collapsed in  March 2020. The Hoti  government  lacked a workable majority, and was faced 
systematically  with  a  lack  of  quorum  in  the  Assembly.  Under  such  circumstances,  it  was 
unable  to  implement  a  legislative  agenda  and  only  limited  progress  was  made  in 
implementing  reform  commitments  under  the  Stabilisation  and  Association  Agreement 
(SAA), the European Reform Agenda (ERA), for which the second stage was launched, and 
the Economic Reform Programme.  

After  months  of  delay,  the  government  managed  to  find  a  compromise  in  the  Assembly  to 
pass a new Law on Economic Recovery from the COVID-19 pandemic.  

Following early legislative elections, the new government led by Prime Minister Albin Kurti 
was sworn into office on 22 March. The government includes three deputy prime ministers, 
14  ministers  and  23  deputy  ministers.  Out  of  18  government  members,  six  are  women, 
including two deputy Prime Ministers.  

The  new  government,  which  enjoys  an  unprecedentedly  strong  majority,  adopted  its 
programme  in  May  2021.  The  programme  focuses  on  the  management  of  the  COVID-19 
pandemic and on the economic recovery, and features a strong focus on fighting corruption, 
economic  crime,  as  well  as  economic  and  social  reform  measures.  Most  of  the  specific 
measures remain to be designed in more detail. It is essential that policy initiatives build on 
Kosovo’s  previous  reform  achievements  and  be  subject  to  appropriate  consultations  and 
impact assessments. The government presented an action plan to implement the second phase 
of the European Reform Agenda, launched by the preceding  government, and subsequently 
adopted in August 2021 and endorsed by the Assembly in October 2021. In June 2021, the 
government  adopted  a  draft  amended  budget,  focused  on  the  management  of  the  pandemic 
and economic recovery, as well as several draft laws relevant to the EU acquis, which remain 
to be examined by the Assembly. During its first months in office, the government  has also 
initiated  changes  to  the  oversight  or  management  of  several  publicly  owned  enterprises, 
agencies and institutions. Any dismissal of boards should respect established procedures, and 
the appointment of new boards and personnel should be transparent and merit-based.  

Government  structures  tasked  with  the  coordination  of  EU-related  affairs  were  altered 
during  the  reporting  period.  Following  the  decision  of  the  Hoti  government  to  dissolve  the 

10 

 
 
Ministry  of  European  Integration  and  resultant  delays,  EU-related  coordination  functions 
were eventually integrated in the Office of the Prime Minister, retaining EU expertise, staff 
and experience. Later, the subsequent Kurti government set up inter-institutional coordination 
structures for the European integration process under the leadership of the first Deputy Prime 
Minister, composed of a ministerial council, working committee and sectoral working groups 
to  prepare  decision-making  for  the  implementation  of  EU-related  reforms.  Coordination, 
planning and monitoring of donor assistance as well as project preparation needs to be further 
strengthened,  in  order  for  Kosovo  to  effectively  benefit  from  opportunities  under  the  next 
phase  of  the  Instrument  for  pre-Accession  (IPA  III)  and  the  newly  launched  EU  Economic 
and Investment Plan for the Western Balkans. 

As regards local government, public services of the municipalities were highly disrupted by 
the COVID-19 pandemic. Significant disparities between municipalities in their performance 
and  service  delivery  continue  and  financial  constraints  undermine  municipalities’  ability  to 
carry out their local democratic mandates. Due to their limited budgetary powers, municipal 
assemblies do not play a strong oversight function over the municipal executive. Municipal 
administrations  remain  subject  to  undue  political  influence.  No  progress  was  made  in 
legislative reforms necessary to  realign funding and competences between central and local 
governments, better define the financing of municipalities based on clear, fair and transparent 
criteria and to create a specific grant for social services. Central government ministries should 
define  and  apply  rule  based,  fair  and  transparent  criteria  when  allocating  funds  to  local 
governments.  The  municipal  performance  grant,  established  by  the  Ministry  of  Local 
Government Administration, is a good model to ensure non-politicised grant disbursement.  

The  Consultative  Forum  on  Local  Government  comprised  of  19  civil  society  organisations 
was established in  2020 as a platform to  deliberate and consult  on local  governance issues. 
Overall, cooperation between civil society and local governments is increasing.  

Women  remain  underrepresented  in  local  government  decision-making  and  there  are 
currently  no  female  mayors  in  any  of  Kosovo’s  municipalities.  Municipal  assembly  and 
mayoral elections are scheduled for 17 October 2021. 

Civil society 

Civil  society  continue  to  operate,  overall  in  an  enabling  environment.  Civil  society  and  the 
government should continue to further improve their cooperation and enhance the ability of 
civil  society  to  contribute  meaningfully  to  public  policy  development.  Efforts  remain 
necessary  to  enhance  the  transparency  of  public  funding  for  civil  society  organisations 
(CSOs),  as  well  as  to  ensure  that  legal  requirements  stemming  from  the  Law  on  the 
Prevention of money laundering and terrorist  financing do not  put  undue limitations on the 
financial viability of low-risk CSOs.  

Civil society is a crucial component of any democratic system and continues to be recognised 
as such by the public institutions. 

During  the  pandemic,  Kosovo’s  civil  society  has  continued  to  be  played  an  important  role, 
particularly  at  the  local  level.  Civil  society  organisations  continue  to  support  directly  the 
design  and  implementation  of  EU-related  reforms.  Organisations  and  their  members  are, 
overall,  free  to  exercise  their  rights  of  association,  assembly  and  to  critically  express  their 
views  without  undue  pressure  from  public  authorities,  including  those  promoting  civil, 
political, economic, social and cultural rights.  

Implementing legislation to implement the 2019 law on freedom of association in NGOs still 
have to be adopted, in order to ease the organisations’ registration process. 

11 

 
 
There  was  limited  progress  regarding  the  government  strategy  for  cooperation  with  civil 
society  for  the  period  2019-2023  and  its  action  plan.  The  schedule  of  structured  working 
group  meetings  between  the  government  and  civil  society  have  been  disrupted  due  to  the 
COVID-19  restrictions.  The  human  and  financial  resources  to  implement  the  strategy  plan 
remain limited and continue to rely excessively on donor co-financing.  

Public consultations of government acts continue to be launched regularly by ministries. The 
latest  government  annual  report  on  public  consultation  shows  that  some  ministries  are  not 
organising consultations in accordance with the relevant regulation.   

At local level, consultations in municipalities are integrated into the general Online Platform 
for public consultation, yet implementation is still nascent. Awareness initiatives are needed 
to encourage citizens to participate in consultative processes at central and local level.  

Despite  some  improvements,  public  funding  of  CSOs  remains  at  risk  of  corruption  and 
conflict  of  interest.  Public  funding  for  civil  society  continues  to  be  reported  annually  and 
made  publicly  accessible.  Basic  information  about  funding  authorities,  recipient  bodies  and 
amount  disbursed  should  be  complemented  with  data  about  funded  projects  and  sectors.  A 
revision  of  the  current  regulation  of  public  funding  to  NGOs  to  address  key  bottlenecks 
identified during the first three years of implementation should be initiated in 2021.   

The  revision  of  the  Law  on  the  Prevention  of  Money  Laundering  and  Combating  Terrorist 
Financing, which limits access to banking services and undermines the financial viability of 
CSOs, is still pending. An updated sectoral risk assessment of the civil society sector remains 
necessary in  order to  allow for a flexible approach to  lower-risk CSOs (see sections on the 
fight against organised crime and on the free movement of capital).  

The  legislation  on  tax  exemption  and  related  administrative  procedures  should  be 
harmonised.  

The  enabling  environment  for  volunteering  needs  to  be  improved,  including  by  putting  in 
place  an  appropriate  legislative  framework  aligned  to  international  standards.  Financial 
resources  for  youth  volunteering  programmes  should  be  allocated,  taking  into  account 
demand and availability.  

2.1.2  Public administration reform 

Kosovo remains at some level of preparation in the reform of its public administration. No 
progress  was  made  in  implementing  last  year’s  recommendations  due  to  the  frequent 
changes of government that affected the functioning of the public administration and slowed 
down the implementation of reforms. The Law on Public Officials entered into force in June 
2020 but no significant efforts were made to start its implementation especially with regard to 
recruitment.  The  establishment  of  an  effective  central  recruitment  department  was  delayed 
and its capacity remains limited. Undue political influence over appointments and dismissals 
of  senior  public  functionaries  and  civil  servants  has  been  observed  in  some  instances,  and 
commitments to merit-based criteria have been only selectively respected. The inequities of 
the  public  salary  system  remain,  and  no  further  progress  was  made  in  this  regard.  The 
organisation and accountability of the administration has marginally improved with first steps 
being  taken  to  align  internal  organisation  with  the  law  in  force.  However,  most  internal 
regulations  governing  the  functioning  and  accountability  of  institutions  remain  in  need  of 
alignment  with  the  law.  The  process  of  rationalising  agencies  has  stalled  due  to  strong 
institutional resistance and lack of political leadership to overcome it. Legal uncertainty for 
businesses  and  citizens  persists  due  to  the  continued  lack  of  progress  on  harmonising 
sectorial  legislation  with  the  Law  on  General  Administrative  Procedure.  Renewed 

12 

 
 
commitment to  the public administration reform  and its diligent  implementation  is  urgently 
necessary in order to make progress in this area. 

As last year’s recommendations were not sufficiently implemented, they remain valid. In the 
coming year, Kosovo should in particular: 

  start  the  effective  implementation  of  the  Law  on  Public  Officials  in  line  with  the 

Constitutional Court ruling;  

  align contradictory special laws with the Law on General Administrative Procedures and 

address the current backlog of administrative court cases; 

  increase  accountability  in  the  public  sector  by  implementing  the  action  plan  on  the 
rationalisation of agencies and creating a clear framework for managerial accountability 
and the delegation of responsibilities in public institutions, in line with the new Law on 
Organisation and Functioning of State Administration and Independent Agencies;  

  ensure full respect for merit-based recruitment and dismissal of public officials, especially 

senior management. 

Strategic framework for public administration reform 

Overall progress on implementing reforms in this area slowed down significantly due to the 
political situation, elections and frequent changes of government.  

Kosovo has three public administration reform strategies: on modernisation of the public 
administration, on policy planning and coordination and on better regulation, ending in 2021. 
While monitoring of the three strategies has been further improved with the introduction of a 
uniform  methodology  for  reporting  against  indicators,  there  has  been  a  limited  actionable 
follow  up.  Linking  strategic  priorities  with  government  budgeting  has  improved.  Kosovo 
should start working on a single overarching public administration reform strategy to replace 
the three strategies. Civil society continues to monitor the government’s reform efforts. The 
implementation of the 2016-2020 public financial management reform strategy continued, 
while work on a new strategy (2021-2025) has yet to commence.  

Policy development and coordination 

As  regards  the  policymaking  system,  the  government  adopted  a  roadmap  for  the 
development  of  a  new  National  Development  Strategy  (2021-2030).  This  should  provide  a 
clear  hierarchy  of  objectives,  improved  performance  measurement  with  clear  targets  linked 
with  medium-term  policy  planning  and  budgeting  and  increase  managerial  accountability. 
The successful incorporation of the former Ministry of European integration into the central 
policy planning structures within the Office of Prime Minister (OPM) is  key  for  advancing 
policy planning and coordination reforms. The OPM has to ensure strong quality control and 
monitoring to support implementation. 

Limited progress was made in  further enhancing  inclusive and evidence-based policy and 
legislative  development.  There  is  a  need  for  a  stronger  centre-of-government  role  in 
ensuring quality control of regulatory and budget impact assessments.  Public consultations 
continue to  be organised regularly but  not  systematically. The minimum  standards for such 
consultations should be followed more consistently. In 2020, more than 98% of all primary 
policy documents and draft laws were published for consultation on the web portal.  

The ability of the public to scrutinise government work needs to be enhanced by a more 
user-friendly presentation of data available on the Open Data Portal. The number of data sets 
available  on  the  platform  increased  to  205  in  2020  (compared  to  195  in  2019).  Consistent 
implementation of the Law on Access to Public Documents remains necessary, as well as the 

13 

 
 
appointment  of  data  contact  points  within  the  administration.  Parliamentary  scrutiny  of  the 
government remains inadequate (see section 2.2.1 Democracy). 

Public finance management 

A new public finance management (PFM) reform strategy should be drafted as the previous 
one expired in 2020. Public procurement and public internal financial control are to be part of 
this new strategy. There is currently an action plan in place covering 2021. The repeat Public 
Expenditure and Financial Accountability (PEFA) assessment, undertaken in 2021, showed in 
general  terms  that  the  management  of  public  finance  in  Kosovo  is  good,  compared  both 
internationally  and  regionally.  The  new  PFM  strategy  should  address  the  weaknesses 
identified  in  these  assessments  and  aim  for  alignment  with  the  National  Development 
Strategy under development, by integrating national development priorities into the medium-
term expenditure framework and the budget planning process.  

In  the  area  of  public  procurement,  expansion  of  functioning  e-procurement  modules  and 
increased  linkages  between  this  system  and  the  Kosovo  financial  management  information 
system  will  assist  in  commitment  control  and  proper  budget  implementation.  Procurement 
contract  implementation,  however,  remains  prone  to  irregularities  and  vulnerable  to 
corruption.  Domestic  revenue  collection  decreased  during  2020  due  to  the  COVID-19 
pandemic. (see also sections on public procurement, taxation, customs and financial control)  

In the area of budget transparency, citizen-friendly budgets continued to be published, and 
information on budget implementation is now also available on the fiscal transparency portal 
of  the  government.  A  theft  using  the  Treasury’s  financial  management  information  system 
spurred  an  increase  in  security  put  in  place  for  that  system.  There  is  still  a  need  for  the 
Ministry  and 
to  ensure  better 
the  related  bodies 
interconnectedness and security of their IT-systems.  

look  at  further  measures 

to 

Public service and human resource management 

The  merger  of  the  Ministry  for  Public  Administration  and  the  Ministry  of  Internal  Affairs 
resulted in reduced political leadership on public administration reform and has undermined 
the efficacy, capacity and working processes for the implementation of public administration 
reforms.  

The  public  service  framework  consists  of  the  Law  on  Public  Officials,  which  entered  into 
force in June 2020 and is aimed at ensuring better merit-based recruitment, promotion and 
dismissal of civil servants. Following a Constitutional Court challenge of the Law, Kosovo is 
required  to  amend  some  of  its  provisions.  The  required  amendments  have  not  yet  been 
adopted, leaving the law un-implementable for independent institutions. Delays in setting up 
the  necessary  central  management  structures  for  public  officials  within  the  Ministry  of 
Internal  Affairs  and  endowing  it  with  the  necessary  staff  and  capacities  have  hampered  the 
implementation  of  the  new  public  officials’  management  system.  No  recruitment  to  state 
administration institutions has taken place since the law entered into force.  

Political  influence  over  appointments  and  dismissal  of  senior  civil  servants  remains  a 
concern.  Non-majority  communities  remain  under-represented  in  central  public  institutions 
and  women  are  still  highly  under-represented  in  senior  positions.  Following  concerns  over 
political  influence  and  non-merit  based  appointments  by  the  Independent  Civil  Service 
Oversight  Board,  in  June  2021  the  new  legislature  took  the  decision  to  dismiss  the  board, 
citing  irregularities.  This  leaves  the  institution  without  decision-making  powers  and  a  new 
board should be appointed swiftly in line with transparent and merit-based procedures. 

14 

 
 
The Constitutional Court struck down the Law on Salaries in its entirety in June 2020. This 
decision leaves Kosovo without a comprehensive legislation to regulate remuneration in the 
public sector to overcome the unfair salary structures, abuse of allowances and discretionary 
decision-making. No progress has been made on that since the Court ruling. 

The Kosovo Institute for Public Administration is the main training provider for civil servants 
in  the  central  and  local  administration.  Training  provision  remains  largely  dependent  on 
donor  funding  due  to  limited  funding  provided  to  the  Institute.  The  resultant  weak  training 
provision  undermines  the  professional  development  of  civil  servants.  New  regulations  on 
performance  appraisals  were  adopted  in  October  2020,  but  no  effective  performance 
management system is in place. 

Integrity plans exist to promote integrity in the public service but implementation remains 
limited.  The  Law  on  Conflict  of  Interest  should  be  fully  implemented.  The  full 
implementation  of  the  Law  on  Protection  of  Whistle-Blowers  is  impeded  by  the  lack  of 
secondary legislation. Reporting on disciplinary measures taken against civil servants is being 
published regularly. (see section on the fight against corruption) 

Accountability of the administration 

The  new  Law  on  Organisation  and  Functioning  of  State  Administration  and  Independent 
Agencies clarifies and strengthens lines of accountability but implementation remains weak. 
Most  agencies  and  ministries  are  yet  to  align  their  internal  organisation  with  the  legal 
framework.  Managerial  accountability  needs  to  be  significantly  strengthened  by  linking 
individual  performance  more  clearly  to  organisational  objectives  and  policy  plans,  and  an 
effective  delegation  of  decision-making  responsibilities.  There  have  been  no  further 
developments  on  the  implementation  of  the  action  plan  on  rationalisation  of  agencies.  The 
new government should clearly indicate its plans in this regard.  

The  independent  oversight  institutions,  especially  the  Ombudsperson  and  the  Kosovo 
National  Audit  Office,  continue  to  address  citizens’  right  to  good  administration  but 
implementation of the recommendations by the relevant  institutions remains limited. Public 
access  to  information  is  regulated  by  the  Law  on  Access  to  Public  Documents,  though 
implementation was undermined by long delays in appointing a Head of the Information and 
Privacy Agency, which finally happened in May 2021. 

The judiciary needs to increase its efficiency in handling administrative disputes in order to 
ensure  citizens’  right  and  access  to  administrative  justice.  The  Basic  Court  in  Pristina  still 
struggles  with  a  large  backlog  of  administrative  cases,  as  well  as  many  incoming  minor 
offence  cases.  The  backlog  in  administrative  cases  was  1,993  by  the  end  of  August  2021, 
likely due to the courts only dealing with urgent cases during the COVID-19 pandemic. The 
liability of public authorities in cases of wrongdoing and the right to seek compensation are 
affected by fragmented legislation.  

Service delivery to citizen and businesses 

There  is  no  coherent,  centrally  driven  policy  on  user  centred  public  service  delivery. 
Institutional  responsibilities  for  policy  development  on  public  service  provision  need  to  be 
clarified and effective coordination mechanisms at the centre-of-government level is lacking. 
An ‘eKosova’ portal exists, however in order to become an effective single point of contact 
for  citizen  and  business,  the  inter-institutional  data  exchange  platform  should  be  further 
enhanced  and  outstanding  legal,  operational  and  technical  challenges  addressed.  An 
electronic signature authentication function should be created.  

15 

 
 
Progress towards simplification of administrative procedures has slowed. With the adoption 
of  the  Law  on  General  Administrative  Procedures,  special  regulations  addressing  different 
administrative rules and procedures were supposed to be aligned. The legislation that requires 
harmonisation  has  been  identified,  together  with  the  institutions  responsible  for  alignment. 
However,  the  repeated  changes  in  government  have  stopped  legislative  alignment. 
Considerable efforts are needed to uphold the legal obligations and rights under the Law and 
ensure legal certainty for citizen and businesses. 

2.2 

RULE OF LAW AND FUNDAMENTAL RIGHTS 

2.2.1  Judiciary and fundamental rights 

Kosovo is at an early stage in/has some level of preparation for applying the EU acquis and 
the European standards in the area of the judiciary and fundamental rights. Limited progress 
regarding  the  judiciary  and  prosecution  has  been  made,  including  in  functioning  of  the 
judiciary  and  the  investigation  and  prosecution  of  some  organised  crime  and  high-level 
corruption cases. The capacity of the judiciary and prosecution, including for handling cases 
in  a  timely  manner  remains  weak.  As  regards  fundamental  rights,  the  government  needs  to 
ensure  oversight  of  the  implementation  of  legislation,  streamlining  of  strategies  and  better 
coordination  of  policies.  The  new  Deputy  Prime  Minister  for  human  rights  and  minorities 
represents an opportunity for better coordination in this area, to ensure all institutions uphold 
fundamental rights.  

Functioning of the judiciary 

Kosovo is still at an early stage in developing a well-functioning judicial system. The overall 
administration  of  justice  continues  to  be  slow,  inefficient  and  vulnerable  to  undue  political 
influence.  Some  progress  was  achieved  during  the  reporting  period.  As  regards  last  year’s 
recommendations, advances were made, as the Functional Review of the Rule of Law Sector 
resulted in the adoption of a Rule of Law Strategy and Action Plan, which outlines the main 
challenges  in  the  rule  of  law  system.  Kosovo  rolled-out  an  electronic  case-management 
system and offset-up a central criminal records system, however challenges remain. Kosovo 
has made efforts to implement the Law on Mediation. The Ministry of Justice has prepared a 
concept  document  that  would  serve  as  the  basis  for  a  vetting  of  judges  and  prosecutors.  A 
potential one-off full re-evaluation of all prosecutors and judges is a serious concern. Such a 
process should be considered only as an exceptional measure of last resort, once all existing 
tools and mechanisms to ensure integrity and fight corruption of judicial officeholders have 
been exhausted, and should be in  line with  European and international  standards as  well as 
Venice  Commission  advice.  Existing  tools  and  strategies  have  yet  to  be  fully  utilised  and 
their improvement should first be explored thoroughly. Before any new mechanism is set up, 
the  effectiveness  and  implementation  of  existing  tools  should  be  analysed  and  improved, 
including through legislative changes. 

In the coming year, Kosovo should in particular: 

  improve the effectiveness and implementation of the existing tools to ensure integrity in 
the  judiciary  (asset-declaration  system,  disciplinary  proceedings  and  evaluations), 
including  through  legislative  changes  as  needed.  Ensure  that  any  new  accountability 
mechanism  is  set  up  only  as  a  measure  of  last  resort  and  is  in  line  with  European  and 
international standards, in particular Venice Commission opinions;  

  implement  the  Rule  of  Law  Strategy  and  Action  Plan  without  delay  through  a  regular, 

structured and unified process; 

16 

 
 
 
  step up efforts to reduce the backlog of cases, based on a digitalisation strategy, including 
the  generalised  use  of  the  Case  Management  Information  System  (CMIS)  by  judges, 
prosecutors  and  support  staff  and  promote  and  properly  finance  the  use  of  alternative 
dispute resolution tools, such as mediation. Ensure reliable statistical data, in line with the 
European Commission for the Efficiency of Justice (CEPEJ) methodology. 

The  COVID-19  pandemic  affected  efficient  case  processing,  the  holding  of  court  hearings 
and in some cases public access to hearings in Kosovo. While there were efforts to address in 
practice the issue of criminal trials affected by the so-called three-month rule due to COVID-
19  pandemic,  long-term  legal  effects  remain  possible.  Kosovo  authorities  should  follow-up 
on  this  issue  and  take  the  necessary  measures  to  ensure  effective  and  efficient  conduct  of 
justice in Kosovo. In particular, they should assess and address the impact of the COVID-19 
pandemic  and  its  long-term  effects  on  present  and  future  legal  practice,  especially  with 
respect  to  those  in  vulnerable  situations  and  their  access  to  justice.  An  IT  infrastructure 
investment and necessary legal amendments remain necessary to facilitate remote hearings to 
ensure the continued functioning of the justice system. 

Strategic documents 

The Kosovo Prosecutorial and Judicial Councils have strategic plans setting the objectives for 
the judiciary and prosecution system.  Both Councils have also adopted annual action plans. 
However,  they  do  not  always  ensure  a  clear  link  between  the  respective  strategies. 
Furthermore,  there  is  no  appropriate  monitoring  to  follow  and  assess  their  implementation. 
Therefore, Kosovo institutions should develop effective mechanisms to ensure proper inter-
institutional coordination including of the many rule of law programmes supported by various 
donors in order to avoid inefficiencies, incoherence and duplication of efforts.  

The  Functional  Review  of  the  Rule  of  Law  Sector  has  led  to  a  Rule  of  Law  Strategy  and 
Action Plan, which were adopted by the government in August 2021. The Strategy presents 
concrete  actions  aimed  at  increasing  the  integrity  and  performance  of  anti-corruption 
mechanisms  in  Kosovo,  strengthening  judiciary  and  prosecution,  improving  the  access  to 
justice for all, human rights and gender equality protection as well as reforming the Ministry 
of Justice in view of its ability to implement the EU  acquis and European standards. While 
the  adoption  of  the  strategy  and  action  plan  was  significantly  delayed  by  the  political 
situation  during  the  reporting  period,  its  implementation  should  now  be  supported  by  all 
actors.  

Management bodies 

The  Kosovo  Judicial  and  the  Prosecutorial  Council  are  the  main  bodies  responsible  for 
ensuring the independence and impartiality of the judiciary as well as managing the judicial 
system and careers of judges and prosecutors. Their composition and appointment procedures 
are broadly in line with European standards. 

The Kosovo Judicial Council elected its new Chair, without due regard to the legal provisions 
on  preventing  conflict  of  interest  and  the  Council  membership.  The  courts  and  prosecution 
have elected their members to both Councils to replace the members whose mandates expired 
during  the  reporting  period.  The  international  community,  including  the  EU,  declined  to 
monitor the election process conducted by the Kosovo Prosecutorial Council, due to concerns 
about the lack of transparency of the process and potential conflicts of interest. The Assembly 
has  not  yet  appointed  two  remaining  members,  out  of  13,  of  the  Kosovo  Prosecutorial 
Council (representing the Bar Association and the Civil Society) as well as one member, also 
out of 13, of the Kosovo Judicial Council (from the non-majority communities). In addition, 

17 

 
 
one  Judicial  Council  member  subsequently  resigned  during  2021.  The  Assembly  should 
ensure a full constitution of both Councils, without delay. 

Both  Councils  made  efforts  to  ensure  business  continuity  given  the  circumstances  and 
limitations  brought  by  the  COVID-19  pandemic.  The  budget  allocated  to  the  Judicial  and 
Prosecutorial  Councils  was  decreased  during  the  mid-term  review  in  2020,  mostly  due  to 
funds being redirected because of the pandemic. The budget remained at this level in 2021. 
This has further limited the number of positions of professional support staff for courts and 
prosecution offices. Councils have made some progress on making statistics accessible to the 
public  and  other  relevant  interlocutors  through  their  respective  websites.  More  effort  is 
needed,  also  in  regard  to  the  use  of  these  statistics  by  the  Councils  for  policy  analysis  and 
development. 

Kosovo Serb judges and prosecutors are formally integrated in the judicial system since 2017. 
This integration has been a success overall, but Kosovo still fails to implement the provisions 
on the composition of panels for cases coming from Serb-majority municipalities, especially 
in the Court of Appeal. Kosovo must also ensure that judicial proceedings can be accessed in 
all official languages across Kosovo. Lack of qualified translators and poor translation of the 
legislative framework remains an issue. Access to judgments and decisions, rendered by the 
Serbian  courts  in  Kosovo  between  1999  and  up  until  the  integration  of  Serbian  judges  in 
October 2017  remains  problematic, and, more importantly, the  agreement  providing for the 
recognition of such judgements and decisions is not yet implemented by Kosovo. 

Independence and impartiality 

Clear safeguards for the independence and impartiality of the judiciary are enshrined in the 
Constitution and the legal framework. However, more efforts must be invested to ensure this 
in  practice  and  effectively  shield  the  judicial  system  from  undue  pressure  and  interference. 
The  Councils  should  ensure  a  prompt  and  active  reaction  in  all  cases  of  alleged  political 
interference in the prosecution and the judiciary.  

The  regulatory  framework  provides  for  the  random  allocation  of  cases through a  case 
management information system. In practice, a significant number of cases remain manually 
assigned,  especially  when  a  judge  is  unavailable.  High  profile  and  sensitive  cases  are  not 
always processed in a timely manner. 

During the reporting period, there was one request for close protection made by prosecutors, 
which  was  granted.  One  close  protection  order  issued  for  a  prosecutor  in  previous  years 
remains valid. There was no request for close protection made by judges.  

Accountability 

While codes of ethics are in place for judges, prosecutors and attorneys, continuous efforts 
and awareness raising are necessary to ensure their effective implementation.  

Both  Councils  continue  to  conduct  disciplinary  procedures  based  on  the  2018  Law  on 
Disciplinary  Liability  of  Judges  and  Prosecutors.  Most  of  the  disciplinary  proceedings 
resulted either in the decision that there was no violation of the rules, or in the disciplinary 
measures  of  non-public  written  remarks  and  temporary  reductions  of  salary.  The  Judicial 
Council suspended one judge. The Prosecutorial Council suspended one prosecutor pending 
disciplinary investigation, however without a clear legal basis to do so. The Councils should 
ensure their proceedings are in line with the applicable legislation. While there are efforts in 
ensuring  proper  implementation  of  the  legal  framework  regarding  disciplinary  proceedings, 
continued willingness and work are needed to ensure consistent and effective application of 
disciplinary  proceedings  against  judges  and  prosecutors.  The  Councils  should  establish  the 

18 

 
 
electronic  database  to  register  all  complaints  and  requests  for  initiation  of  disciplinary 
investigations as required by law.  

Judges and prosecutors are obliged by law to declare their assets and gifts received, and to 
report  any  possible  conflict  of  interest  to  the  Anti-Corruption  Agency.  During  2020,  all 
prosecutors declared their assets on time, while four judges declared them after the deadline 
(see section on fight against corruption). 

Professionalism and competence 

The Councils independently organise recruitment processes for judges and prosecutors on 
the  basis  of  merit-based  criteria,  after  which  successful  candidates  are  appointed  by  the 
President for an initial three-year term. Due to the pandemic and reluctance of the President 
to give approval, there have been delays in filling vacant positions in courts and prosecution 
offices.  The  process  of  (re)appointment  of  judges  and  prosecutors  must  fully  respect  the 
principles of independent functioning of the judiciary and prosecution system, in line with the 
Constitution.  In  addition,  the  Councils  need  to  ensure  that  the  evaluation  and  background 
checks of judges and prosecutors have a clear legal basis and do not interfere unduly in the 
private lives of candidate judges and prosecutors.  

The Councils are required to carry out performance evaluations of prosecutors and judges 
with a permanent mandate every three years. In 2020, the Prosecutorial Council evaluated all 
prosecutors that were eligible for performance evaluation. However, as the Judicial Council 
was conducting a reform of its performance evaluation system, no judges with a permanent 
mandate were evaluated apart from those that were part of promotion processes. The quality 
of  performance  evaluations  conducted  by  both  Councils  remains  an  issue,  and  there  is  no 
realistic,  effective  and  systematic  evaluation  based  on  clear  criteria.  Both  Councils  have 
adopted  new  Regulations  on  Performance  Evaluations  with  detailed  lists  of  indicators  and 
measurements for evaluation. They now have to ensure rightful and objective application of 
such regulations.   

Quality of justice 

The  Academy  of  Justice  is  responsible  for  delivering  initial  and  in-service  training  for  all 
legal  professionals.  In  response  to  the  pandemic,  the  Academy  provided  online  training, 
which  is  a  positive  development  although  it  cannot  permanently  replace  in  person  training. 
Further in-service training is needed as regards values and professional skills. More work is 
needed  particularly  in  specialised  areas:  economic  crime,  mediation,  the  new  provisions  of 
the  revised  Criminal  Code  and  European  Court  of  Human  Rights  case  law.  Oversight  and 
reporting lines of the Academy should be strengthened in line with European best practices.  

Overall, the level of professionalism and competence, especially of prosecutors, remains a 
matter of concern, despite efforts to increase the available training.  

On jurisprudence, some progress has been made regarding the legal obligation for all courts 
to publish their judgments on an accessible and searchable web portal within 60 days, in all 
official  languages.  However,  publication  has  not  always  been  consistent  or  timely  due  to  a 
lack of resources. The prosecution offices publish relevant information on indictments on the 
website  of  the  State  Prosecutor  within  24  hours.  The  Academy  of  Justice  maintains  a 
database  of  legislation,  commentaries  and  other  legal  material  accessible  to  all  judges  and 
prosecutors.  

Following  the  appointment  of  24  judges  in  January  and  March  2021,  Kosovo  now  has  400 
judges  (132  women  and  268  men)  and  187  prosecutors  (79  women  and  108  men),  which 
means  around  21  judges  and  10  prosecutors  per  100  000  inhabitants.  According  to  the 

19 

 
 
Council  of  Europe’s  European  Commission  for  the  Efficiency  of  Justice  (CEPEJ),  the 
European average is 21 judges and 12 prosecutors per 100 000 inhabitants. Kosovo still has a 
low  percentage  of  female  judges  and  prosecutors  in  comparison  with  most  other  European 
countries. 

The initially approved budget for the judiciary (including prosecution, courts, the Academy 
of  Justice  and  the  Correctional  and  Probation  Service)  was  EUR  59.5 million  in  2020  and 
EUR 61.9 million in 2021 (EUR 59.2 million in 2019), or respectively 2.27 % and 2.46% of 
the general budget (2.53% in 2019).  

For e-justice tools, the implementation of the case management information system (CMIS) 
is in an advanced phase. All Basic Courts and Basic Prosecution Offices are using the CMIS 
and electronic transfer of cases has started. The Court of Appeals, Supreme Court, Appeals 
Prosecution  and  Chief  State  Prosecutor  Office  are  working  towards  full  connectivity  with 
CMIS. The police system is connected to the CMIS for exchange of data in criminal cases, 
and the connection with the Civil Registration Agency and the Business Registration Agency 
has  been  upgraded.  Continued  commitment  is  needed  to  ensure  that  the  system  is  used 
systematically  and  that  the  data  entered  is  accurate  and  complete,  in  particular  so  that  the 
automatically obtained statistical data on the performance of the judiciary and prosecution is 
reliable  (in  line  with  CEPEJ  recommendations  and  methodology).  Reform  of  training 
programmes  is  highly  needed  in  terms  of  usability  of  the  CMIS.  Work  on  a  National 
Centralised  Criminal  Records  Registry  (NCCR)  has  shown  good  progress  with  nearly  all 
cases and convicted persons entered into the system.  However, more commitment  from  the 
KJC and the courts is needed to ensure the system’s sustainability and court staff should be 
more  involved.  The  two  IT  systems  still  need  to  be  made  inter-operable.  Legislation 
concerning procedures and responsibility over the NCCR still needs to be developed.  

There  is  a  tracking  mechanism  for  high-level  corruption  and  organised  crime  cases;  it 
currently includes 78 cases. (see section on fight against corruption)  

The  mediation  system  has been operational  since 2008.  In 2020, the  courts referred 3 135 
cases  to  mediation,  marking  an  increase  compared  to  2019  (2  846  cases).  The  State 
Prosecutor  and  the  prosecution  offices  referred  2  902  cases,  also  an  increase  compared  to 
2019 (2 244). The 190 licensed mediators (67 women, 123 men), of whom 14 were from the 
Serb-majority  municipalities,  solved  3  980  cases.  Due  to  the  COVID-19  restrictions,  the 
Kosovo  Judicial  Council  issued  a  decision  directing  the  courts  to  start  referring  cases  to 
online mediation, which led to  10 online mediation cases.  Public  awareness  and familiarity 
with alternative dispute resolution tools remains low. The mediation system needs further 
strengthening, and this can be achieved through full implementation of the Law on Mediation 
and allocation of a sufficient budget.  

Efficiency 

The  efficiency  of  criminal  justice  is  seriously  hampered  by  shortcomings  in  criminal 
legislation. The revised Criminal Procedure Code which would address many of the existing 
issues still remains to be adopted by the Assembly. The capacity of judges to manage court 
proceedings  efficiently  needs  to  be  significantly  improved  to  avoid  unproductive  hearings, 
unreasonably protracted proceedings and ultimately low-quality decisions. Except for the first 
instance  administrative  cases,  the  clearance  rate  decreased  in  all  categories  and  instances 
from  2019 to  2020.  The clearance  rate  for severe criminal  cases  at  first instance (107% in 
2020),  administrative  cases  at  first  instance  (93%  in  2019  and  102%  in  2020)  and 
civil/commercial cases at second instance (123% in 2019 and 115% in 2020) remained above 
100%  in  2020  but  the  number  of  incoming  and  resolved  cases  was  notably  lower  than  in 

20 

 
 
2019.  Severe  criminal  cases  at  second  instance  have  a  clearance  at  93%  in  2020.  The 
clearance rate is particularly low for civil/commercial cases at first instance (85% in 2019 and 
70% in 2020) and administrative cases at second instance (80% in 2019 and 78% in 2020). 
There is also a backlog with a sizeable number of pending cases older than two years.  

To improve the quality and efficiency of the justice system in Kosovo, the full use of CMIS 
and  ongoing  training  of  judges  and  prosecutors  and  support  staff  are  needed.  In  addition, 
monitoring  and  evaluation  of  courts’  activities,  the  use  of  satisfaction  surveys  and  giving 
justice  systems  adequate  funding  and  staff  needs  to  be  prioritised.  Sentencing  policy  in 
relation  to  organised  crime  and  corruption  remains  erratic  with  courts  not  systematically 
implementing the Supreme Court’s 2018 sentencing guidelines. 

Overall,  all  this  leads  to  long  disposition  times  (i.e. the  average  time  from  filing  an 
indictment  to  receiving  a  judgment).  The  disposition  time  stands  at  1  150  days  for 
civil/commercial  cases  in  first  instance  and  1  188  days  for  administrative  cases  in  first 
instance,  an  increase  since  2019  (852  days  for  civil/commercial  cases  and  787  days  for 
administrative  cases).  At  second  instance,  that  is  424  days  (241  days  in  2019)  for 
administrative cases and 428 (425 days in 2019) for civil/commercial cases. Severe criminal 
cases  take  753  days  in  first  instance  and  133  days  in  second  instance.  Furthermore,  these 
delays  in  proceedings,  in  combination  with  a  preference  for  detention  over  other  restrictive 
measures,  have  led  again  to  cases  of  overly  long  detention.  In  2020,  the  Ombudsperson 
continued  to  receive  complaints  against  courts  and  prosecutors  with  allegations  of 
unjustifiable  delays  in  judicial  proceedings.  Authorities  need  to  consider  introducing  an 
effective judicial legal remedy to address such delays, including compensation. 

Also  for  this,  there  is  a  need  to  improve  strategic  planning,  which  also  requires  efforts  to 
introduce reliable statistical systems for the judiciary based on CEPEJ indicators, and to use 
the findings for the management and policy-making purposes.  

Although the number of professional associates in all Kosovo courts  has increased in 2020, 
the  number  of  legal  staff  directly  assisting  judges  and  prosecutors  is  still  insufficient.  A 
number  of  vacancies  remain  open  and  not  all  positions  needed  were  budgeted  in  the  2021 
budget.  

The  COVID-19  pandemic  has  created  unprecedented  challenges  to  Kosovo  rule  of  law 
institutions and highlighted inefficiencies in the justice system, such as the increased need for 
further  improvement  of  case  management  and  further  adoption  and  use  of  digital 
technologies. Some online hearings were held, but the legal and regulatory framework needs 
to  ensure  the  continued  functioning  of  the  justice  system  despite  pandemic  restrictions. 
During  the  pandemic,  almost  all  criminal  cases  in  trial  stage  were  affected  by  the  ‘three-
month  rule’  –  the  Criminal  Procedure  Code  (CPC)  provides  that  a  trial  has  to  re-start  after 
three months without any hearing. This includes in particular some very important corruption 
and organised crime cases. In almost all affected cases, the parties agreed to have all evidence 
presented in previous hearings considered as “read” while also inserting a relevant entry into 
the trial minutes. However, the CPC does not allow this practice explicitly. This creates legal 
uncertainty and should be urgently addressed, preferably through legislative action.  

Domestic handling of war crime cases  

The  new  government  has  put  forward  measures  to  strengthen  domestic  institutional 
mechanisms  dealing  with  war  crimes.  In  addition,  amendments  to  the  Criminal  Procedure 
Code  on  the  applicable  procedure  of  trial  in  absentia  of  war  crimes  were  adopted  in  the 
Assembly. 

21 

 
 
The  implementation  of  the  strategy  on  war  crimes  adopted  by  the  Kosovo  Prosecutorial 
Council in 2019 continues to be hampered by the political context, lack of resources and the 
lack  of  international  and  regional  cooperation.  In  the  reporting  period,  the  Kosovo  Police 
arrested  two  persons  suspected  of  war  crimes  and  three  new  investigations  were  opened. 
Progress  was  made  in  the  use  of  the  electronic  war  crimes  database  by  the  Kosovo  Police, 
with two cases being fully digitalised. Following the first conviction for a war crime at first 
instance since the end of EULEX’s executive judicial mandate, in the reporting period four 
other convictions were handed down by the Basic Courts. However, all of these judgements 
were  later  either  sent  back  for  re-trial  or  significantly  modified  in  appeal.  This  shows  that 
significant  obstacles  remain  in  the  proper  adjudication  of  war  crime  cases.  More  broadly, 
concerns  remain  about  the  willingness  to  hold  former  Kosovo  Liberation  Army  members 
accountable in war crimes cases. 

In  2020,  the  Special  Prosecution  Office  of  Kosovo  filed  three  indictments  for  war  crimes 
against three persons. Despite the increase of assigned prosecutors (from three to  four), the 
war crimes department of the Special Prosecution Office continues to struggle in processing 
the workload, which has constantly increased since 2018. There is a need for more training 
and support staff. 

Notwithstanding  a  few  requests  channelled  through  the  Office  of  the  EU  Special 
Representative (EUSR) in Kosovo, mutual legal cooperation between Kosovo and Serbia in 
war  crimes  cases  remains  limited.  Cooperation  with  the  United  Nations  International 
Residual Mechanism for Criminal Tribunals (IRMCT) in The Hague, although formalised via 
an agreement with a facilitation role of the EUSR, remains difficult.   

The Kosovo Specialist Chambers and Specialist Prosecutor's Office (SPO) have continued to 
investigate and prosecute violations of international law stemming from the 2011 Council of 
Europe  Report.  In  the  reporting  period,  pre-trial  preparations  were  ongoing  in  four  cases, 
including against the then President of Kosovo. In one case, the SPO charged the leadership 
of the KLA War Veterans Association with obstruction and intimidation, following the public 
release  of  sensitive  documents.  It  is  essential  that  Kosovo  institutions  provide  full 
cooperation with the Specialist Prosecutor’s Office and Specialist Chambers, enabling them 
to fulfil their mandate in full independence, without any outside interference.  

The Government Commission on Recognition and Verification of the Status of Survivors of 
Sexual Violence during the Conflict continues its work, at a slow, albeit more efficient, pace 
than  in  the  past.  The  rejection  of  more  than  200  applications  in  2020  triggered  some 
adjustments to the system. Still, the aspect of societal stigma that the survivors face and the 
limited  number  of  cases  approved  for  recognition  and  compensation  might  deter  future 
applicants. By August 2021, 1 528 individuals had submitted applications, of which 987 were 
accepted and 222 were rejected while 13 are still waiting to be reviewed. The timeframe of 
the law still excludes those who suffered conflict-related sexual violence after 20 June 1999. 

Kosovo  should  develop  an  overarching  strategy  for  transitional  justice,  including  a 
comprehensive approach to addressing its past. The future of an initiative to establish a Truth 
and  Reconciliation  Commission  (TRC)  remains  unclear.  Civil  society  remains  actively 
engaged in reconciliation initiatives.  

22 

 
 
 
 
Fight against corruption  

The fight against corruption in Kosovo is at an early stage/has some level of preparation. In 
the  reporting  period,  limited  progress  was  made,  including  on  the  investigation  and 
prosecution of high-level cases in the track record and as regards an improved performance 
and set-up of the Special  Prosecution Office. The Special Prosecution  Office  framework in 
the  field  on  anti-corruption  was  strengthened  when  the  Corruption  and  Financial  Crime 
Department  became  operational  and  increased  its  staffing  levels.  The  Special  Departments 
handling  cases  regarding  high-level  corruption  (and  organised  crime)  would  benefit  from 
more  (and  specialised)  support  staff.  Sustained  efforts  are  needed  to  have  more  proactive 
investigations, final court decisions and final confiscation of assets. The anti-corruption legal 
package and the revised Criminal Procedure Code are still not adopted, while the revision of 
political party financing legislation was delayed again. The legal framework on confiscation 
continues  to  be  largely  unimplemented  and  the  value  of  finally  confiscated  assets  remains 
low.  

Most of the recommendations of the 2020 report remain valid, with the main problem being 
still the lack of implementation of existing legislation. Overall, corruption is widespread and 
remains  an  issue  of  serious  concern.  Despite  efforts  made,  there  is  a  need  for  strong  and 
continual  political  will  to  effectively  address  systemic  corruption  risks,  as  well  as  a  robust 
criminal justice response to high-level corruption.  

As  the  recommendations  of  last  year  remain  largely  unaddressed,  Kosovo  should  in 
particular: 

  adopt the Law on the Agency for Prevention of Corruption, reforming the competences of 
the Anti-Corruption Agency,  and the new  Law on Asset  Declaration and  strengthen the 
capacity  of  the  Agency  to  ensure  a  proper  implementation  of  the  legislation  under  its 
competence. 

  strengthen  the  efficiency  of  confiscation  regime  by  promoting  systematic  use  of  both 
extended and ‘regular’ confiscation by criminal prosecution and police, by the creation of 
a  confiscation  fund  and  by  improving  the  sales  process  of  sequestrated  and  confiscated 
assets managed by Agency for the Management and Sequestrated and Confiscated Assets 
(AMSCA);  

  adopt  the  revised  Criminal  Procedure  Code,  including  provisions  on  the  suspension  of 

public officials indicted for corruption-related offences; 

  ensure  that  the  financial  reports  and  campaign  disclosure  reports  of  political  parties  are 
consistently published and audited, and sanctions applied for violations of relevant laws. 
Amend the legal framework governing political party and campaign financing in line with 
the  opinion  of  the  Venice  Commission,  to  ensure  effective  enforcement,  accountability 
and transparency. 

Track record  

In July 2018, the European Commission confirmed that Kosovo had met the benchmark in its 
visa liberalisation roadmap to strengthen the track record in the fight against organised crime 
and corruption. These efforts should continue to improve and the Commission will continue 
to  actively  monitor  the  further  development  of  this  specific  track  record.  The  track  record 
mechanism for visa liberalisation, established in 2015 to  monitor and coordinate high-level 
corruption  and  organised  crime  cases  includes  78  cases  by  September  2021.  There  have 
been 65 indictments - 27 cases concern organised crime and 38 cases concern corruption. 23 

23 

 
 
cases have final court decisions, out of which thirteen ended with a (partially) guilty verdict, 
leading  to  21  individuals  being  convicted  of  corruption-related  offences  and  4  individuals 
being convicted of organised crime-related offences.  

At  present,  the  track  record  mechanism  includes  only  the  cases  selected  in  the  specific 
context of visa liberalisation benchmarks. However, in the future it is expected that the track 
record will cover all high-level cases relating to organised crime and corruption. To this end, 
rules  governing  inclusion  of  cases  in  this  mechanism  should  be  revised  with  a  view  of 
creating  a  single  and  comprehensive  track  record,  including  all  cases  against  high-level 
officials, which should be prioritised and handled with the highest level of scrutiny.  

In  the  reporting  period,  the  number  of  cases  dealt  with  by  the  Anti-Corruption  Agency 
increased.  In  2020,  the  Agency  handled  over  300  cases  (134  pending  from  previous  years, 
179 new referrals in 2020), compared to 126 cases in 2019. Out of these cases, more than 100 
(against 180 persons) were referred to the prosecution and police for investigation.  

In 2020, almost 98% of the 4,721 officials obliged to submit annual  declarations of assets 
did so on time. Only 96 officials (2%) failed to do so. The Anti-Corruption Agency has 968 
officials  under  the  full  assets  control  procedure,  out  of  which  77  were  referred  to  the 
prosecution and police for further investigation (26 on suspicion of false declaration and 51 
for failure to declare assets). There were 23 court decisions in 2020 (11 in 2019). 

The COVID-19 pandemic increased the difficulties in verifying declarations by the Agency. 
Shortcomings  persist  in  the  system  for  declaring  and  assessing  the  origin  of  property 
belonging to senior public officials. The capacities of the Agency with respect to number of 
staff,  IT  resources  and  training  should  be  increased.  In  addition,  an  electronic  declaration 
system should be introduced in order to simplify the process of declaration and submission as 
well as increase transparency and accuracy in monitoring and verification. Cooperation and 
exchange of data with the police, the tax administration, the Financial Intelligence Unit, the 
cadastral registry and municipal authorities should be strengthened. 

In 2020, the Agency handled 160 cases of conflict of interest, of which one was addressed 
using the minor offence procedure and two were sent for further criminal investigation. In 70 
cases, a conflict of interest was avoided.  

In 2020, the Agency handled 80 cases of corruption in public procurement, out of which 54 
opinions were issued, 21 cases terminated, while four are under procedure and one was send 
for investigation.  

A new law on the Anti-Corruption Agency aimed at better defining the scope of the Agency’s 
competencies remains to be adopted (see below on prevention measures). The capacity of the 
Agency needs to be strengthen considering the new competences of the Agency and to ensure 
an effective implementation of the applicable legislation. 

Despite a fairly advanced legal framework in place, criminal asset confiscation continues to 
be largely overlooked, with insufficient focus and resources put into it. The Law on Extended 
Powers  of  confiscation  is  in  force  since  2019  but  is  not  being  consistently  applied. 
Confiscation as a means of targeting the economic interests of criminal organisations remains 
underutilised  by  prosecutors,  who  remain  the  weakest  link  in  this  regard.  Overall,  the 
willingness to confiscate assets remains low.  

In 2020, the value of preliminary confiscated assets rose again, to EUR 19 million (EUR 8.7 
million in 2019). However, the value of finally confiscated assets fell to EUR 476,490 (EUR 
991,593 in 2019). The Agency for the Management of Sequestrated  and Confiscated Assets 
(handling  more  than  EUR  1.6  million  in  various  assets  in  2020)  continues  to  struggle  in 

24 

 
 
managing  the  assets in  its  portfolio, partially due to  the courts not allowing  asset sales and 
partially due to the set-up of the Agency. The value of assets sold in 2020 (EUR 53,354) has 
decreased  compared  to  2019  (EUR  74,166).  No  progress  has  been  registered  in  the 
establishment of a Confiscation Fund, which would allocated confiscated funds in part to law 
enforcement, prosecution and courts and in part to social projects.  

Funding  for  political  parties  and  campaign  financing  lacks  transparency  and  the 
regulatory framework remains inadequate. Overall, the regulatory framework does not ensure 
timely  disclosure,  meaningful  oversight  or  accountability  for 
complete  reporting, 
irregularities.  During  the  reporting  period,  the  Assembly  committee  for  oversight  of  public 
finances initiated the procedure for auditing of financial reports of political party campaigns 
and financial declarations for three subsequent  years. The process of auditing has failed for 
two years due to the low budget allocated to hire auditors.  

Institutional framework  

Inter-institutional  coordination  and  cooperation  between  preventive  anti-corruption 
institutions  and  law  enforcement  entities  is  key  to  effectively  implement  anti-corruption 
legislation.  The  responsibilities  of  the  19  different  anti-corruption  institutions  in  Kosovo 
continue to frequently overlap.  

Prevention measures 

The main body competent for preventing corruption is the Anti-Corruption Agency, whose 
competences  include  asset  declarations  and  declarations  of  gifts,  and  dealing  with  whistle-
blowing  and  conflict  of  interest.  The  Auditor-General,  the  tax  authorities,  the  customs 
authorities  and  the  Financial  Intelligence  Unit  also  have  inspecting  and  auditing  powers. A 
draft law reorganizing the competences of the Anti-Corruption Agency has been finalised and 
should be adopted without delay in view of strengthening the Agency’s mandate in the field 
of  prevention  of  corruption.  Specifically,  the  Agency  will  be  entitled  to  implement  anti-
corruption  preventive  tools  such  as  corruption  proofing,  corruption  risk  assessment,  and 
integrity  plans  in  the  institutions.  Furthermore,  the  Agency  will  have  the  competence  to 
initiate administrative investigations and impose sanctions.  

More  training must  be provided  for  staff  of  the  main  anti-corruption  bodies,  especially  for 
the staff of the Agency, in particular concerning financial investigations together with other 
anti-corruption institutions. More training in the field of asset confiscation, money laundering 
and cybercrime is also needed.   

There is a continuous need to promote the elaboration and adoption of integrity plans in the 
public  service  as  a  tool  for  preventing  corruption  and  ensuring  discipline,  including  at 
municipal level.  

Law enforcement 

Specialised  institutions  for  fighting  corruption  remain  in  place,  including  the  National 
Coordinator  for  Combating  Economic  Crimes  within  the  prosecutorial  system  and  the 
relevant Police Directorate.  

The  decision  of  the  previous  government  in  October  2020  to  abolish  the  special  Anti-
Corruption Task Force within the Kosovo Police and also dismiss the Director of the police, 
raised  serious  concerns  about  Kosovo’s  commitment  to  the  fight  against  corruption  and 
organised  crime.  The  former  Task  Force  had  been  involved  in  some  investigations  of 
corruption within the institutions and, as a result, some high-profile cases were presented to 
the prosecution. The government needs to ensure a sound legal and organisational structure to 
the Special  Investigative Unit  as the successor of the abolished Task  Force. At present,  the 

25 

 
 
Special Investigative Unit has a temporary legal status through a decision issued in 2020 by 
the former Minister of Internal Affairs.   

During  the  reporting  period,  the  number  of  financial  investigators  working  on  organised 
crime and corruption investigations increased. Financial investigations need to be carried out 
systematically, independently and in parallel with the criminal procedure for  corruption and 
organised crime cases.  

In April 2020, the Special Prosecution Office (SPRK) was re-structured. In addition to the 
existing  War  Crimes  Department,  three  new  specialised  departments  were  created 
(Terrorism;  Corruption  and  Financial  Crimes;  Organised  Crimes  and  other  cases  falling 
within the SPRK competence). In 2020, despite the impact of the pandemic, the total number 
of  indictments  was  147  (146  in  2019),  while  the  total  number  of  sentencing  decisions  was 
122 (36 in 2019). In the reporting period, the SPRK was connected to the Case Management 
Information  System  (CMIS)  and  internal  efficiency  improvements  were  made  in  its 
administration.  

Despite these efforts,  the Special Prosecution Office still suffers from  a lack of sufficiently 
specialised staff with the required level of training and competence to deal specifically with 
financial and procurement cases. It currently has 16 prosecutors and is in the process of hiring 
three  more.  The  Basic  Prosecution  Office  in  Pristina  has  a  Special  Unit  for  Financial  and 
Corruption cases, to which ten prosecutors are assigned. In order to increase its efficiency, a 
re-structuring  is  ongoing.  Each  basic  prosecution  office  has  a  designated  anti-corruption 
prosecutor.  

The Special Departments in the Basic Court of Pristina and the Court of Appeals, which 
handle all cases of the Special Prosecution Office, including corruption cases, have continued 
to function albeit with shortages in professional support staff. During the reporting period, six 
new judges were appointed to the Special Department in the Basic Court in Pristina and three 
new  judges  to  the  Special  Department  at  the  Court  of  Appeals.  Recruitment  of  additional 
support  staff  for  the  Special  Departments  is  in  the  final  stage,  mainly  for  the  positions  of 
professional associates. 

Legal framework  

Despite  not  being  a  party  to  international  anti-corruption  conventions  (such  as  the  United 
Nations  Convention  against  Corruption  and  the  Council  of  Europe’s  Criminal  Law 
Convention  on  Corruption)  due  to  status-related  issues,  Kosovo’s  legislation  is  generally 
aligned with these instruments and in line with relevant European standards. 

On the implementation of the mandatory removal from office of public officials convicted of 
corruption,  as  included  in  the  Criminal  Code  of  2019,  one  decision  imposing  such 
punishment  was  taken  in  2020  and  one  in  2021.  Substantial  amendments  to  the  Criminal 
Procedure  Code,  under  preparation  since  2018,  aim  at  strengthening  the  criminal 
proceedings and the anti-corruption legal framework, such as provisions on the suspension of 
public  officials  indicted  also  for  corruption  were  proposed.  Given  the  long  delay,  the  new 
Criminal Procedure Code should be adopted as a matter of urgency.  

The so-called anti-corruption legal package (i.e. the Law on the Agency for Prevention of 
Corruption reforming the competences of the Anti-Corruption Agency and the new Law on 
Asset Declaration) has not been adopted.  

The legal framework on criminal confiscation remains fairly advanced, including through the 
2019  Law  on  Extended  Powers  of  Confiscation.  These  advanced  tools  now  need  to  be 
utilised. The government approved the Concept Paper on the issue of Unjustifiably Acquired 

26 

 
 
Assets  which  aims  to  introduce  in  Kosovo  a  system  of  non-conviction  based  confiscation. 
Such  an  advanced  system  requires  clear  safeguards  against  possible  misuse  and  abuse  and 
should  respect  the  principles  enshrined  in  the  Constitution  and  the  fundamental  rights  of 
individuals. Moreover such a system should not replace or undermine the application of the 
existing legal framework on criminal confiscation.   

The legal framework on money laundering is still not properly implemented. Although the 
law does not require the proof of a predicate offence to retain a conviction, many prosecutors 
and judges continue to consider a predicate offence as an essential part of money laundering 
offences. As a result, many stand-alone money laundering cases are dismissed either by the 
prosecutor or by the court. (see also section 6.3 on the freedom of movement of capital and 
the section on organised crime) 

The legal framework on the prevention of conflict of interest is in place since 2018 but still 
needs to be fully implemented. A number of senior public officials still occupy two or more 
posts, in direct violation of the law. Kosovo has no specific legislation on lobbying. 

The Law on the Protection of Whistle-Blowers is fairly advanced and in line with the new 
EU legislation in this area. Secondary legislation determining the procedure for receiving and 
handling  the  cases  of  whistleblowing  entered  into  force  on  May  2021.  Strengthened 
whistle-blowing  mechanisms  and  protection  requirements  still  need  to  be  implemented  in 
practice. 

The legal framework on political parties and election campaign finances prepared by the 
government  after consultation  of the Venice Commission is  yet  to  be adopted. Kosovo still 
needs better functioning, more accountable, more transparent  and enforceable party  finance 
and campaign finance legislation. The government and Assembly should take this forward on 
the basis of the existing draft law.  

Strategic framework 

The  Rule  of  Law  Strategy  and  Action  Plan  (see  section  on  Judiciary)  include  specific 
measures  aiming  to  improve  the  institutional  framework  against  corruption,  as  well  as  the 
assets  declaration  system  and  regulations  on  acceptance  of  gifts.  Since  2018,  Kosovo  does 
not  have  an  Anti-Corruption  Strategy  in  force.  While  the  Anti-Corruption  Strategy  and 
Action  Plan  2018-2022  were  finalised  and  approved  by  the  government,  they  failed  to  be 
adopted by the Assembly. The Anti-Corruption Strategy and Action Plan 2021-2023, adopted 
by the government, were not sent to the Assembly for approval. 

Fundamental rights  

The  legal  framework  guarantees  the  protection  of  fundamental  rights  and  is  in  line  with 
European  standards.  However,  additional  efforts  remain  needed  to  fully  implement  it.  The 
government’s coordination of human rights and minority protection mechanisms, both at the 
central  and  local  levels,  needs  to  improve  and  fundamental  rights  issues  need  to  feature 
higher on the political agenda. The new position of Deputy Prime Minister on Human Rights 
and  Communities  represents  an  opportunity  to  better  coordinate  and  oversee  fundamental 
rights  policies  and  legislation.  Human  and  financial  resources  remain  lacking  and  relevant 
authorities  are  still  dependant  on  donor  support  and  guidance  and  need  to  assume  greater 
ownership.  Inter-ministerial  coordination  mechanisms  are  often  treated  as  a  formality  and 
concrete steps must be taken by the government in order for these mechanisms to be effective 
in advancing human rights.  

27 

 
 
More  efforts  are  needed  to  address  recommendations  of  the  2020  report,  which  are  still 
applicable,  even  if  some  steps  were  taken  on  improving  overall  coordination,  on  gender 
equality, returns and Roma and Ashkali. In the coming year, Kosovo should in particular: 

  improve  the  efficiency  and  effectiveness  of  the  mechanisms  for  the  coordination  and 
implementation of human rights legislation, policies and strategies, including the role of 
the  Kosovo  Assembly,  via  a  sustainable  mechanism  of  coordination  and  oversight. 
Strengthen the role of the anti-discrimination officers in ministries and municipalities; 

  strengthen  the  implementation  of  the  Law  on  Gender  Equality  and  ensure  proper 
functioning  of  the  system  of  protection,  prevention  and  adjudication  of  all  forms  of 
gender-based violence;  

  adopt  the  Strategy  for  Return  and  Communities,  the  draft  Law  on  Kosovo  Property 
Comparison Verification Agency addressing the Ombudsperson’s recommendations, and 
prepare  a  new  Strategy  for  the  Inclusion  of  Roma  and  Ashkali  communities  in  Kosovo 
society 2022-2026 taking into account lessons learned; 

  adopt  the  Law  on  Cultural  Heritage  and  the  Law  on  Religious  Freedom  and  ensure 
consistent  functioning  of  the  Implementation  and  Monitoring  Council.  Advance 
protection  of  cultural  heritage  by  fully  enforcing  legislation  on  special  protective  zones 
and illegal construction. 

International human rights instruments form an integral part of Kosovo's legal framework 
and are directly applicable, as provided for in the Constitution. Kosovo continued to align its 
legislation with these instruments and maintained its practice of ad hoc reporting, including 
by  hosting  of  rapporteurs  of  the  European  Committee  for  the  Prevention  of  Torture  and 
Inhuman or Degrading Treatment or Punishment (CPT) and the Group of Experts on Action 
against Trafficking in Human Beings (GRETA).  

Measures  taken  in  relation  to  the  COVID-19  pandemic  by  the  Kosovo  government  were 
framed  by  the  August  2020  Law  on  preventing  and  combating  the  COVID-19  pandemic, 
which provided a solid legal basis for public health-related restrictions of fundamental rights. 
The  pandemic  has  disproportionally  affected  the  most  vulnerable  groups.  Their  access  to 
goods  and  services  has  been  disrupted,  including  with  regard  to  education.  Persons  with 
disabilities  have  been  lacking  access  to  quality  medical  care  and  other  services.  The 
economic  and social  consequences of the COVID-19 pandemic have  affected  women more 
severely  than  men.  With  many  of  them  employed  in  the  informal  economy,  they  had  more 
limited  access  to  mitigating  support  measures.  The  government  has  continued  protecting 
women  victims  of  domestic  and  gender-based  violence  during  the  outbreak  of  COVID-19. 
The  shelters  for  gender-based  violence  and  trafficking  in  human  beings  have  continued 
providing services at all times.  In prison, the pandemic was well managed, despite difficult 
circumstances. Restriction of contacts with the outside world was compensated by enabling 
contacts through video and other means.  

On  the  protection  and  promotion  of  human  rights,  the  implementation  of  human  rights 
legislation,  oversight  and  coordination  of  existing  human  rights  mechanisms  remains  a 
challenge. The new position of Deputy Prime Minister for Minority Issues and Human Rights 
represents  an  opportunity  to  ensure  more  consistent  and  coordinated  leadership.  Existing 
human  rights  strategies  lack  clear  objectives,  timelines  and  adequate  implementation 
mechanisms. The Human Rights Strategy, already being drafted for a long period of time, is 
not yet adopted. The Office of Good Governance (OGG) within the Prime Minister’s Office 
still  lacks  the  resources  to  fulfil  its  broad  mandate.  The  Kosovo  Assembly  needs  to  take  a 
more  proactive  role  in  overseeing  the  implementation  of  the  human  rights  legislation.  The 

28 

 
 
Inter-Ministerial Coordination Group for Human Rights still meets only rarely and it does not 
take decisions nor properly follow up on previous government commitments.  

The  Ombudsperson  continues  playing  an  important  role  in  the  promotion  and  protection  of 
human rights at central and local level. In September 2020, the Kosovo Assembly elected a 
new Ombudsperson for a period of 5 year. The election of five deputies of the Ombudsperson 
failed  as  the  Assembly  of  Kosovo  did  not  endorse  any  of  the  candidates  proposed  by  the 
Ombudsperson Institution. The process now needs to be repeated. The Institution has further 
strengthened its capacity to  review cases and continued its efforts to  increase awareness  on 
human  rights  protection  and  promotion.  The  number  of  complaints  received  by  the 
Ombudsperson in 2020 was 1,419, out of which 720 have been opened for investigation and 
43 cases were opened ex officio. The number of complaints dropped due to the impact of the 
pandemic  and  political  crisis,  as  well  as  the  selection  of  a  new  Ombudsperson  during  the 
reporting  period.  Although  there  is  an  increase  in  the  responsiveness  of  institutions  to  the 
recommendations of the Ombudsperson, consistent implementation remains a challenge. Law 
enforcement  and  the  judiciary  need  to  be  more  responsive  in  protecting  vulnerable  groups 
such as children, persons from non-majority communities (including Roma and Ashkali) and 
victims of gender-based violence.  

New initiatives to address the needs of social services, which are key in various areas related 
to  fundamental  rights,  have  been  launched  (see  sections  on  social  policy  and  public 
administration reform).  

On  the  prevention  of  torture  and  ill  treatment,  the  situation  remains  satisfactory  and  the 
Kosovo  authorities  continue  to  show  commitment  to  preventing  these  practices  in  all 
circumstances. Six complaints have been filed with the Ombudsperson – Kosovo’s National 
Preventive Mechanism (NPM) – about the physical abuse of citizens by the police. Of these, 
five  cases  are  still  under  investigation,  while  one  case  has  been  proceeded  to  the  Police 
Inspectorate  for  their  further  investigation.  Since  the  outbreak  of  COVID-19,  the  NPM 
reduced its visits to places of deprivation of liberty and the NPM conducted 52 ad hoc visits. 
In all cases, it received full cooperation, was granted rapid access to all visited facilities, and 
was  allowed  to  access  all  relevant  documents.  During  2020,  the  NPM  issued  nine 
recommendations;  two of them were partially  implemented during 2020,  and three of them 
during the first quarter of 2021. Kosovo should further strengthen ongoing efforts to provide 
adequate  medical  and  psychological  support  and  rehabilitation  to  all  victims  of  torture  and 
other ill-treatment in Kosovo. Efforts to address the recommendations issued by the CPT in 
2015  are  ongoing.  During  2020,  a  CPT  delegation  visited  Kosovo  to  prepare  a  new  report. 
(see section on the prison system). 

The prison system continues to comply broadly with the UN Standard Minimum Rules for 
the  Treatment  of  Prisoners  and  with  the  European  Prison  Rules.  According  to  the  NPM, 
during  its  visits  there  were  no  complaints  regarding  treatment  by  authorities,  no 
overcrowding was noticed, and the provision of health care was found to be adequate during 
that period. Efforts to improve the drug addiction treatment programmes in prisons and prison 
medical facilities are ongoing in light of the CPT recommendations. Authorities should make 
efforts  to  increase  out-of-cell  engagements  for  detainees,  as  far  as  possible.  The  Prison 
Inspectorate continues working with  a methodology based on the ‘Mandela rules’. Political 
pressure  still  continued  to  affect  decisions  on  the  categorisation  of  prisoners,  which  would 
allow for preferential treatment of high profile prisoners. The revised Law on the execution 
of penal sanctions, Law on correctional services and Law on probation services remain to be 
adopted  and  should  take  into  account  EU  expert  advice.  They  should  not  compromise 

29 

 
 
progress  achieved  by  previous  amendments  preventing  such  preferential  treatment. 
Alternative sanctions and measures continued to be imposed mainly on juveniles.  

On  personal  data  protection,  the  law  remains  broadly  in  line  with  the  EU  General  Data 
Protection  Regulation  and  the  Law  Enforcement  Directive.  However,  the  Information  and 
Privacy  Agency  entrusted  by  the  law  with  a  number  of  important  supervisory  tasks,  was 
unable to fulfil its obligations due to the persisting vacancy at its head for a number of years. 
The  long  overdue  appointment  by  the  Kosovo  Assembly  of  a  Commissioner  to  lead  the 
Information  and  Privacy  Agency  took  place  in  June  2021.  It  is  crucial  and  urgent  that  the 
Agency moves swiftly forward and becomes operational and effective. 

Concerning  freedom  of  thought,  conscience  and  religion,  although  there  are  legal 
provisions in place, the Kosovo Assembly still needs to adopt the long outstanding draft Law 
on  religious  freedom,  incorporating  the  recommendations  of  the  Venice  Commission  from 
2014.  The  May  2016  final  judgment  by  the  Constitutional  Court  on  the  land  dispute  case 
involving the Visoki Dečani monastery and Deçan/Dečane municipality, which confirmed the 
monastery’s legal ownership of the land, remains unimplemented.  

---------------------------------------------------------------------------------------------------------------- 

Freedom of expression  

Kosovo  has  some  level  of  preparation  regarding  freedom  of  expression.  Kosovo  benefits 
from a lively and pluralistic media environment. The legal framework is mostly in line with 
European  standards.  Limited  progress  was  made  during  the  reporting  period.  Some  of  the 
recommendations  of  the  previous  report  were  taken  into  consideration  leading  to  legal 
drafting  and  some  follow-up  on  threats  against  journalists.  Still,  concerns  remain  regarding 
public smear campaigns, threats and especially physical attacks on journalists. Not all threats 
against journalists and media are reported to the authorities. There continue to be particular 
concerns regarding freedom of expression in the north of Kosovo, including self-censorship.  

Work  on  amending  the  Law  on  the  Radio  and  Television  of  Kosovo  and  the  Law  on 
Independent Media Commission has stalled, both of which are long-standing issues. The lack 
of financial self-sustainability, further exacerbated by the COVID-19 pandemic, leaves media 
vulnerable  to  political  and  business  interests.  This  is  further  amplified  by  the  lack  of 
information and data on the final beneficiary of media ownership – provisions on this are still 
not enshrined in law.  

Similar to last year, Kosovo should: 

  review the Law on the Radio and Television of Kosovo to ensure sustainable funding in a 

manner which preserves its independence; 

  review  the  Law  on  the  Independent  Media  Commission  to  update  its  competences, 
including  regarding  audio-visual  media  in  line  with  Audio-visual  Media  Services 
Directive; 

  further  improve  the  response  of  the  responsible  institutions  to  physical  attacks  against 
journalists,  and  other  forms  of  pressure,  including  through  better  inter-institutional 
cooperation; 

  increase  availability  of  data  on  the  audio-visual  market,  especially  when  it  comes  to 

media ownership.  

Intimidation of journalists 

30 

 
 
According to the Association of Journalists in Kosovo (AJK), during 2020 there were eleven 
cases  of  non-physical  threats  and  harassments  and  four  cases  of  physical  assault  against 
journalists  in  Kosovo  (broadly  similar  levels  to  2019).  From  January  to  June  2021,  eight 
cases  had  been  registered.  In  some  cases,  high-level  officials  were  involved.  Derogatory 
statements and smears made by politicians and aimed at the media remain present, publicly 
undermining trust in journalistic reporting and the safety of journalists. Adjudication of cases 
remains  slow.  Politicians  and  public  officials  still  need  to  demonstrate  a  higher  level  of 
tolerance towards criticism and promote freedom of expression. 

During  the  reporting  period,  there  was  a  concerning  increase  in  the  number  of  SLAPP 
(Strategic Litigation Against Public Participation) cases brought in courts, which are used to 
threaten and sue journalists and civil society activists in order to silence them.  

Legislative environment  

The  Constitution  and  legislation  provide  for  freedom  of  expression  and  media  freedom.  In 
general,  media  laws,  including  on  defamation  and  access  to  information  are  in  line  with 
standards of the Council of Europe and the case law of the European Court on Human Rights. 
The Law on Protection of Journalistic Sources is not in line with European standards and best 
practices.   

The  effective  implementation  of  whistle-blower  legislation  still  requires  the  adoption  of 
implementing legislation. The Law on Access to Public Documents has been adopted, but not 
yet implemented. With the appointment of the Commissioner for the Information and Privacy 
Agency, implementation needs to start in earnest (see section on data protection).  

Building administrative  capacity within the  government  to  deal  with  freedom  of expression 
and media-related issues should be considered.  

Implementation of legislation/institutions  

The  implementation  of  existing  legislation  continues  to  be  insufficient.  The  Kosovo  Press 
Council  acts  as  a  self-regulatory  body  for  print  and  online  media,  mainly  by  reacting  to 
complaints. However, there is a growing number of online media that are not registered with 
the Press Council. They lack the transparency of ownership and funding, and are often linked 
to  single-source  reporting,  breach  of  copyrights  and  defamatory  language.  Cases  of 
defamation  and  hate  speech  in  online  and  social  media  are  rarely  addressed  with  effective 
judicial follow-up. 

The  Independent  Media  Commission  (IMC)  still  does  not  have  the  power  to  licence  and 
monitor  audio-visual  media  services  online  and  while  legislation  allows  for  broader 
monitoring to check news coverage is balanced and unbiased, the IMC only monitors content 
during election campaigns.  

Public Service Broadcaster  

The  public  broadcaster  Radio  Television  of  Kosovo  (RTK)  remains  exposed  to  political 
pressure and influence. RTK’s shortcomings should be addressed, including recruitments not 
based  on  merit,  non-transparent  remunerations,  insufficient  sustainability  of  programmes  in 
non-majority  languages  and  poor  online  presence.  Its  editorial  independence  and  long-term 
financial  sustainability  is  weakened  by  its  reliance  on  direct  state  funding,  with  its  budget 
determined annually by the Assembly. RTK still does not cover all the territory of Kosovo. 
Kosovo  Serb  communities  mostly  rely  on  local  and  Serbian  broadcasters.  The  Assembly 
dismissed  the  RTK  board  in  July  2021,  citing  RTK  board’s  failure  to  fulfil  its  legal  and 
financial obligations.   

31 

 
 
A review of the current Law on RTK is still ongoing. Steps still need to be taken to ensure 
that appointment and dismissal procedures of members of the respective governing bodies are 
transparent  and  inclusive  and  that  the  new  law  includes  a  realistic  and  sustainable  funding 
model for RTK. 

Economic factors 

Kosovo  benefits  from  a  lively  and  pluralistic  media  environment.  However,  the  sector 
remains  heavily  dependent  on  donors  and  advertising,  including  from  the  government  and 
political  parties.  Many  media  companies  struggle  to  sustain  themselves  financially  through 
commercial  means.  Private  broadcasters  depend  on  other  sources  of  funding  and  remain 
strongly linked to political and business interest groups. This poses continuing risks to their 
editorial  independence.  There  is  still  a  lack  of  data  on  the  advertising  market,  financing 
remains largely non-transparent and there is no audience measurement system.  

transparency  on  media  ownership  and  possible 

Information  on  media  ownership  structures,  in  particular  for  online  media,  remains  unclear 
and  often  fictitious,  as  most  media  do  not  provide  information  on  their  finances  or  real 
ownership.  Greater 
illegal  media 
concentration is  needed. The imbalance between media outlets  and  available funding raises 
concerns  as  to  the  financial  viability  of  media  outlets  and  over  media  integrity  and 
independence. The negative impact of the COVID-19 crisis on the financial stability of media 
sector is  a concern (including job  losses); even if media professionals were included in  the 
initial  financial  package  of  the  government  intended  to  ease  the  economic  impact  of  the 
pandemic. 

Professional organisations and working conditions 

The  pandemic  has  affected  media,  since  there  were  layoffs  of  journalists  and  all  remaining 
printed  newspapers  discontinued  printing  and  switched  to  online  access  only.  As  such,  no 
printed  newspapers  remain  in  Kosovo.  Associations  of  journalists  have  been  active  in 
condemning cases of threats and attacks against journalists. They have kept up a constructive 
dialogue  with  the  Police  and  have  been  vocal  in  defending  journalists  against  political 
pressures. The working conditions of media professionals and the implementation of labour 
laws  in  the  newsroom  remain  a  concern.  Women  journalists  are  more  affected  than  men. 
Many journalists work either with no contracts or only with service contracts. This situation 
makes journalists vulnerable to pressure.  

(See also the section on information society and media)  

-------------------------------------------------------------------------------------------------------------------------------------- 

Freedom  of  assembly  and  association  is  guaranteed  by  the  Constitution  and  generally 
respected. During the reporting period, demonstrations were limited in number and size due 
public  health  measures  related  to  the  pandemic.  In  most  cases,  COVID-19  preventive 
measures  were  respected,  with  the  notable  exception  of  the  political  party  campaign  events 
ahead  of  the  early  parliamentary  elections.  No  major  security  incident  related  to  public 
gatherings  was  reported.  Individuals  and  legal  entities  have  the  right  to  establish  an 
association without having to register it, but most organisations decide to register in order to 
secure legal personality.  

Issues of labour and trade union rights are further covered in section on social policy and 
employment. 

On  property  rights,  the  draft  law  on  the  Kosovo  Property  Comparison  and  Verification 
Agency (KPCVA) was revised according to the Ombudsperson’s recommendations, but not 
adopted  by  the  Assembly.  Overall,  implementation  of  the  judicial  decisions,  including 

32 

 
 
Constitutional  Court  decisions,  remains  an  issue  in  particular  in  conflict-related  property 
cases.  

In  2020,  institutions  took  some  positive  measures  towards  the  protection  of  the  property 
rights  of communities in  vulnerable situations, displaced persons  and women. The KPCVA 
performed 18 evictions  and one demolition of an illegal structure built on the property of a 
displaced  person,  providing  an  effective  restitution  of  property  rights.  Some  progress  has 
been made in the implementation of the Administrative Instruction on Demolition of Illegal 
Structures adopted in April 2020, though lack of funds prevent the KPCVA carrying out the 
demolitions swiftly.  

Concerns  about  fraudulent  property  transactions  and  illegal  transfers  of  ownership  of 
properties mainly belonging to displaced persons remain. There has been limited progress on 
the  issue  of  350,052  buildings  constructed  without  a  permit  as  only  around  5,000  people 
applied  for  legalization.  Local  institutions  issued  320  decisions  on  legalization  of 
constructions  built  without  permit.  The  regularisation  of  large-scale  informal  settlements 
whose  residents  mainly  belong  to  marginalised  vulnerable  communities  continues  to  be 
hampered  by  lack  of  political  will  to  address  the  issue.  In  April  2021,  the  Government 
extended  the  affirmative  measure  to  increase  registration  of  joint  immovable  property  on 
behalf  of  both  spouses  for  six  years.  This  measure,  first  introduced  in  2016,  has  led  a 
noticeable increase in the registration of women as property owners, from only 104 in 2016 to 
7,417 in 2020.  

On non-discrimination,  the 2015  Law on protection from  discrimination  is  broadly in  line 
with European and international standards, but its implementation remains limited. Domestic 
case law on non-discrimination is poor, partly due to victims often being discouraged to file 
cases due to the lengths of court proceedings. Discrimination cases are frequently not taken 
seriously  and  processed  slowly  by  the  police,  prosecution  and  courts.  Proper  inter-
institutional monitoring of court cases related to discrimination should be established. 145 out 
of  1,419  complaints  made  to  the  Ombudsperson  in  2020  related  to  discrimination.  The 
Kosovo  Prosecutorial  Council  continues  to  maintain  a  tracking  mechanism  on  hate  crimes. 
However,  overall,  data  collection  on  hate  crimes  remains  insufficient.  Hate  speech  against 
vulnerable  and  non-majority  communities  persists,  especially  on  social  media.  The  role  of 
anti-discrimination officers in the municipalities and Ministries need to be strengthened, with 
clear reporting lines and description of duties. 

Legislation  and  institutional  mechanisms  on  gender  equality  are  in  line  with  international 
and EU standards. The impact of the pandemic on well-being of women has been significant. 
The  government  and  Assembly  foresaw  specific  measures  for  women  within  the  recovery 
package  related  to  the  pandemic,  which  assisted  in  mitigating  some  adverse  effects. 
Ownership  of  property  by  women  has  further  increased  (see  property  rights).  However, 
women  continue  to  face  discrimination  in  the  labour  market  and  when  accessing  finance. 
They are still underrepresented, especially in decision-making positions, both in private and 
public  institutions,  even  if  the  presence  of  women  in  politics  has  notably  increased  (see 
sections on Elections, Parliament and Governance).  

Civil society continues to play a critical role in advancing gender equality. The government 
of  Prime  Minister  Kurti  is  making  significant  efforts  to  implement  the  Law  on  Gender 
Equality,  especially  in  relation  to  equality  in  recruitment  and  changing  stereotypes  in  the 
public administration. Still, the institutions need to improve their collection, maintenance and 
transparent reporting of gender-disaggregated data. The Agency for Gender Equality (AGE) 
plays  a  central  role  in  advancing  gender  equality,  including  in  legislation  and  policy, 
promoting the mainstreaming of gender in institutions' policies and actions and training civil 

33 

 
 
servants. Coordination with gender equality officers in the ministries and municipalities still 
needs to be strengthened. The Kosovo programme for gender equality (2020-2024) adopted 
in 2020 is in place and an Action Plan is being drafted. 

Domestic  violence  continues  to  be  the  most  prominent  form  of  gender-based  violence  in 
Kosovo.  The  government  responded  to  the  pandemic  by  opening  provisional  quarantine 
facilities  for  victims  of  domestic  violence  and  developed  a  safety  protocol  for  service 
providers  in  dealing  with  the  cases  during  the  lockdown.  The  legal  and  institutional 
framework  in  this  area  is  largely  in  line  with  EU  and  international  standards.  The  Law  on 
Domestic Violence is not aligned yet with the revised Criminal Code nor with the Council of 
Europe  Convention  on  preventing  and  combating  violence  against  women  and  domestic 
violence  (Istanbul  Convention),  the  latter  which  is  part  of  the  Kosovo  Constitution  since 
September  2020.  The  strategy  and  action  plan  on  protection  against  domestic  violence 
expired  in  2020,  there  is  not  yet  a  replacement.  Overall,  reporting  of  domestic  violence 
remains low (1 632 cases in 2020; 889 cases from January until May 2021). The integrated 
database  for  cases  of  domestic  and  gender-based  violence  is  increasingly  being  used  by 
police, victim advocates, courts, and social workers at centres for social services. Prosecutors 
need to enter data in a more consistent way. The Ministry of Justice has committed funding 
for the database for the next three years. Judges and prosecutors need to be familiarised with 
the  new  legislation  and  with  the  database  for  an  efficient  prosecution  and  adjudication  of 
cases (including appropriate sentencing).  

There  has  been  limited  progress  in  preventing  domestic  violence  and  protecting  and 
reintegrating victims, including adequate victims’ compensation. The functioning of the eight 
shelters for victims  of domestic violence and trafficking in  human beings  is  uneven mainly 
due  to  the  lack  of  sustainable  funding.  Other  forms  of  violence  against  women  have 
continued.  Women  in  public  life,  including  politicians,  continue  being  judged  and 
stereotyped.  Body-shaming  and  other  verbal  attacks  have  increased,  including  during 
Assembly  sessions,  triggering  widespread  reaction  by  civil  society  and  women  rights’ 
organisations.  To  combat  this,  the  Independent  Media  Commission  and  the  Agency  for 
Gender  Equality  with  the  support  of  women’s  civil  society  organisations,  signed  a  joint 
declaration  against  sexism.  Despite  efforts  made,  sexual  harassment  in  the  workplace, 
including in the public administration, is widespread. 

On  the  rights  of  the  child,  Kosovo’s  legal  framework  is  largely  in  line  with  international 
standards,  but  implementation  remains  limited.  The  new  Law  on  child  protection,  which 
protects children from all forms of physical and mental violence needs to be implemented. 18 
pieces of implementing legislation should be adopted. This process needs to be expedited by 
the relevant authorities, together with an awareness raising campaign to inform authorities at 
central and local level about their duties and responsibilities. The COVID-19 pandemic had 
an  impact  on  vulnerable  communities,  especially  regarding  schooling  (see  section  on 
education). Authorities should increase financial support to scale up community-based social 
and  health  services  for  children  with  disabilities  and  increase  efforts  to  integrate  them 
effectively into educational institutions. 

Child  begging  and  children  that  live  and  work  in  the  streets,  especially  among  Roma  and 
Ashkali  communities,  remains  a  problem  which  the  authorities  have  not  yet  effectively 
addressed.  Child,  early  and  forced  marriage  also  remains  prominent  in  these  communities. 
Municipalities should provide sustainable funding for pre-school learning centres for children 
in  these  communities.  Kosovo  does  not  host  children  in  large  residential  institutions,  and 
developed  alternative  care  solutions  for  children  deprived  of  parental  care.  Foster  care  for 
children  without  parental  care  is  not  applied  in  all  municipalities  of  Kosovo  and  does  not 

34 

 
 
meet  the  requirements  for  fostering  of  children  without  parental  care.  There  is  a  lack  of 
services  and  programmes  for  the  prevention  and  reintegration  of  children  victims  of  drug 
abuse.  

Persons with disabilities are subject to discrimination and lack of institutional care, starting 
from lack of proper medical care and lack of physical infrastructure. Limited access to public 
buildings, schools, medical  facilities and transport remains a problem,  despite the existence 
of relevant administrative instructions. There is a clear gap in harmonising the legislation and 
policies  with  the  Conventions  and  EU  acquis  on  the  rights  of  people  with  disabilities.  The 
Law  on  Paraplegic  and  Tetraplegic  continues  to  be  insufficiently  implemented.  Similarly, 
there  was  still  no  progress  on  the  implementation  of  the  Law  on  Blind  and  the  Law  on 
Employment,  notably  the  provisions  relating  to  employment  of  people  with  disabilities  in 
public  institutions.  A  comprehensive  law  for  all  persons  with  disabilities  would  improve 
provision  of  service  and  quality  of  life.  It  would  also  improve  upon  the  currently  disparate 
legal  framework.  The  National  Council  for  People  with  Disabilities  should  take  a  more 
proactive role in bringing the issues of people with disabilities higher on the political agenda.    

On  the  rights  of  lesbian,  gay,  bisexual,  transgender,  intersex  and  queer  (LGBTIQ) 
persons, the Constitution protects against discrimination based on sexual orientation. Despite 
this, public awareness on the rights of the LGBTIQ persons and general acceptance remains 
low.  There  have  also  been  incidents  of  hate  speech  towards  the  LGBTIQ  community, 
especially  on  social  media  and  cases  of  hate  crime  against  LGBTIQ  persons  are  still  not 
always properly investigated and brought to justice. Implementation of the Action Plan 2019-
2022, is not progressing, partly due to the COVID-19 pandemic. Activists held the fifth Pride 
Parade  in  Pristina  in  July  2021.  The  municipality  of  Pristina  announced  funding  for  and 
construction  of  a  shelter  during  2021  for  LGBTIQ  people  who  are  survivors  of  domestic 
violence or became homeless due to family rejection. Legal revisions to enable legal gender 
recognition are underway.   

The  procedural  rights  of  persons  who  are  suspected  of  crime  and  the  rights  of  victims  of 
crime are stipulated in the constitution and the law. Victims of crime, however, often lack the 
capacity  to  protect  and  pursue  their  legal  interests  in  criminal  proceedings,  tend  to  receive 
insufficient  legal  information  on  their  rights  and  are  rarely  assisted  during  criminal 
proceedings by professional legal representatives. The level of legal aid provision, although 
improved, still remains inadequate due to conflicting legislation, lack of public awareness and 
different  systems  in  place  for  providing  free  legal  aid.  In  addition,  there  is  no  system  of 
quality  assurance  in  the  provision  of  legal  aid.  Out  of  1  419  complaints  received  by  the 
Ombudsperson  in  2020,  13  concerned  the  right  to  a  fair  trial  within  a  reasonable  time. 
Whereas in the first quarter of 2021 the Ombudsperson received 380 such complaints with 50 
complaints  concerning  the  right  to  a  fair  trial  within  reasonable  time.  The  Law  on  crime 
victim Compensation is broadly aligned with the EU Directive on Compensation for Crime 
Victims. The quality of service of victim’s advocacy officers should increase. A crime victim 
compensation programme exists and, compared to previous years, the number of requests for 
compensation is  increasing.  In 2020, the total  number of requests for compensation was 56 
(10  in  2019).  The  Commission  approved  22  of  these  requests,  for  a  total  value  of 
compensation of EUR 91 935 (EUR 14 260 in 2019).  

Kosovo has well established mechanisms at the central and local level as well as an adequate 
legal  framework  to  protect  non-majority  communities  and  their  rights.  However,  the 
conditions for a truly multi-ethnic and integrated society throughout Kosovo are not fully in 
place.  The  need  for  a  secure  environment,  especially  in  areas  where  returnees  live,  and  to 
ensure access to property, personal documentation, language rights, and adequate provisions 

35 

 
 
for  education,  employment  and  social  welfare,  are  still  barriers.  Youth  from  majority  and 
non-majority  communities  from  all  parts  of  Kosovo  would  benefit  from  an  enabling 
environment and opportunities to interact with one another.   

Kosovo is still lacking adequate inter-institutional coordination, both at the central and local 
levels,  which  undermines  the  effective  delivery  of  services  and  implementation  of  the 
applicable  legislation.  Employment  of  people  from  non-majority  communities  in  the  public 
sector  still  falls  below  the  10%  threshold  stipulated  by  relevant  legislation  -  these 
communities  remain  generally  underrepresented  in  the  civil  service  at  both  the  central  and 
municipal levels.  

Increased  communication  and  coordination  between  the  relevant  departments  within  the 
Office  of  the  Prime  Minister  –  the  Office  for  Community  Affairs  (OCA)  and  the  Advisory 
Office  for  Good  Governance  –  also  remains  necessary.  These  offices  would  benefit  from 
engaging  increasingly  in  policy  implementation  as  they  remain  project  driven  and  largely 
donor  dependant.  OCA  director  still  needs  to  be  appointed.  The  Consultative  Council  for 
Communities  (CCC)  under  the  President’s  Office  continued  to  meet  regularly  during  the 
reporting  period  and  had  its  mandate  renewed.  However,  the  government’s  response  to  the 
CCC recommendations remains insufficient.  

The Technical Working Group for the implementation of the recommendations based on the 
Council  of  Europe’s  Framework  Convention  on  National  Minorities  –  set  up  by  the 
government – did not meet during the reporting period and there was scant implementation of 
recommendations.  Implementation of the  Law on the use of languages remains  uneven and 
limited  across  all  institutions  in  Kosovo.  Efforts  to  improve  timely  translation  and 
interpretation into all official languages, critical in improving inter-community relations, are 
needed. In spite of continued efforts by the Office of the Language Commissioner under the 
Prime Minister’s Office in promoting and protecting language rights, stronger support by the 
government to consolidate language policies is necessary.  

Young  people  in  particular  are  not  exposed  to  each  other’s  languages.  A  more  inclusive 
educational  system  offering  opportunities  to  learn  official  languages  as  well  as  other  non-
majority  languages,  where  suitable,  would  contribute  to  a  better  understanding  and  social 
cohesion between communities and counteract the growing trend towards monolingualism in 
Kosovo. In July 2021, the Department for Balkan studies at the Faculty of Philology of the 
University  of  Pristina  was  formally  re-accredited.  It  also  decided  to  open  a  language 
centre for learning Kosovo’s official languages and other foreign languages.  

While the overall security situation of non-majority communities remains stable, there was an 
increase in  the number  of incidents,  affecting mostly the  Kosovo Serb  community  south of 
the  Ibar/Ibër  River.  These  incidents  included  cases  of  robberies,  arson,  cattle  and  vehicle 
thefts,  as  well  as  physical  assaults  including  bodily  injuries,  shooting  incidents  as  well  as 
attempted  kidnapping.  Moreover,  vandalism  and  burglaries  of  religious  objects,  including 
churches  and  mosques,  also  occur  with  some  frequency.  The  Kosovo  Police  generally  acts 
swiftly  in  such  cases.  However,  further  coordination  between  the  law  enforcement  and 
judicial authorities to ensure proper adjudication is needed. Security incidents, irrespective of 
their motivation, instil a perception of insecurity among the victims and therefore affect inter-
community relations. Recruitment of police officers from non-majority communities, as well 
as strengthening community policing, could help the situation.  

The process of return and reintegration of refugees and displaced persons witnessed a slight 
increase,  with  394  people  returning  in  to  Kosovo  from  the  region.  However  the  return  rate 
still  remains  low  overall  which  can  be  attributed  to  a  combination  of  factors:  the  security 

36 

 
 
situation,  exercising  the  property  rights  and  lack  of  conditions  for  a  sustainable  return 
coupled by the COVID-19 pandemic (see also the sections on property rights and rights and 
protection  of  non-majority  communities).  The  previously  separate  strategy  on  returns  will 
now be included in the Migration Strategy (see section 2.2.2 Justice Freedom and Security). 

The situation of the Kosovo Roma and Ashkali and other vulnerable communities like the 
Kosovo Egyptians remains challenging, a fact compounded by the outbreak of the COVID-19 
pandemic. Members of these communities face limited access to clean water and sanitation, 
protective  equipment  and  healthcare,  while  access  to  education  and  formal  employment 
remain  difficult.  The  2017-2021  strategy  for  the  inclusion  of  the  Roma  and  Ashkali 
communities  in  Kosovo  society  was  only  partially  implemented.  The  government  needs  to 
accelerate preparations for a new 2021-2026 Strategy and Action Plan. Additional efforts are 
needed in order to facilitate access for the communities in the most vulnerable situations to 
the labour market and combat informal work. Furthermore, employment opportunities within 
Kosovo  institutions  are  largely  low  level,  menial  jobs.  Housing  for  the  Roma  and  Ashkali 
Internally Displaced Persons (IDPs) and returnees is the resistance of some municipalities to 
allocate  land  and  recognise  tenancy  or  possession  rights  in  informal  settlements  to  the 
families who lived there prior to the conflict. The Kosovo government needs to accelerate the 
mapping  of  informal  settlements  and  its  legalisation.  With  regard  to  education,  the  most 
vulnerable communities have access to schooling although more needs to be done, including 
with regards to access to remote education during the pandemic  (see section on education). 
The government has assumed more commitment following the signature of the Declaration of 
Western Balkans Partners on Roma Integration within the EU Enlargement Process (Poznan 
Declaration) and has established a Technical Group for the Protection from Discrimination of 
Roma Ashkali and Egyptian communities, to work on these commitments.   

On cultural rights, no progress was noted with regard to the draft Law on cultural heritage 
during the reporting period. The Implementation and Monitoring Council (IMC) remains the 
only  formal  mechanism  for  dialogue  between  the  government  and  the  Serbian  Orthodox 
Church  (SOC).  An  arrangement  was  reached,  following  renewed  tensions,  on  roadworks 
within  and  around  the  Deçan/Dečani  Special  Protective  Zone  (SPZ).  Whilst  the  IMC  is 
foreseen  to  monitor  this  progress,  there  is  a  need  for  communication  and  cooperation  to 
improve  between  both  sides.  The  protection  and  promotion  of  cultural  heritage  in  Kosovo 
still remains weak and donor driven. 

2.2.2  Justice, freedom and security 

Kosovo is at an early stage/has some level of preparation in this area. Some progress was 
made,  including  on  counterterrorism  and  fight  against  and  prevention  of  violent  extremism 
through the reintegration of foreign terrorist fighters and their families from the conflict zone. 
However,  the  entry  into  force  of  several  laws  important  to  combatting  organised  crime  has 
not  yet  led  to  tangible  results.  Results  achieved  by  prosecution  and  courts  remain  poor. 
Sustained efforts are needed to have more proactive investigations, final court decisions and 
final confiscation of assets. The authorities continued to make progress in managing regular 
and  irregular  migration  by  further  increasing  accommodation  capacities  and  stepping  up 
preparedness in case of increased influx of migrants, despite the difficult context of COVID-
19  pandemic.  However,  the  National  Centre  for  Border  Management  should  be  fully 
operationalised.  In  July  2020,  Europol  and  the  Kosovo  Police  concluded  a  Working 
Arrangement. 

Kosovo has only partly followed the recommendations of the 2020 report, especially related 
to  violent  extremism.  The  other  recommendations  remain  outstanding.  Therefore,  in  the 
coming year, Kosovo should in particular: 

37 

 
 
  continue implementing programmes on rehabilitation and reintegration, inside and outside 
the prison system by safeguarding coordination of pre-release and post-release processes, 
and ensuring that the Reintegration Division  of the Ministry of  Internal  Affairs, is  fully 
funded  (through  a  specific  budget),  staffed  and  trained,  and  that  it  has  dedicated  and 
experienced staff from the health, education and social services; 

  establish  a  Joint  Threat  Assessment  Centre,  including  a  threat  level  grading  system  on 

terrorism related risks; 

  implement the relevant action plan to make the National Centre for Border Management 
fully  operational,  and  to  strengthen  inter-institutional  and  international  cooperation  and 
coordination  against  transnational  organised  crime  and  in  the  field  of  migration  and 
asylum; 

  Improve  migration  governance  through  enhancing  government  capacities  for  data 
collection and analysis, as well as capacity to respond to the increased migration inflow 
(biometric registration, reception, identification of vulnerable, improved communication). 

 Fight against organised crime 

Kosovo is  at  an  early  stage  in  the fight  against  organised crime and  limited progress was 
made on the investigation and prosecution of organised crime cases. The Special Prosecution 
Office  was  strengthened  during  the  reporting  period,  including  an  increase  of  staff,  and  its 
specialisation increased. Sustained efforts are needed to have more proactive investigations, 
final court decisions and final confiscation of assets.  

The  powerful  tools  envisaged  by  the  Criminal  Code  and  the  Law  on  extended  powers  of 
confiscation  are  yet  to  be  fully  utilised  by  police  and  prosecutors.  Measures  are  needed  to 
strengthen  the  prosecution  as  well  as  to  ensure  that  there  is  no  political  interference  in  the 
operational activities of all law enforcement bodies. The situation in the north of Kosovo with 
regard to organised crime continues to pose challenges for law enforcement agencies. 

Despite the difficult  situation due to the COVID-19 pandemic, Kosovo has partly  followed 
the  recommendations  of  the  2020  report,  namely  on  the  training  and  awareness  raising 
regarding  new  legislation,  including  regarding  confiscation,  on  the  capacity  of  the  Special 
Prosecution Office, some elements of intelligence-led policing, and partial implementation of 
the laws adopted in 2018. Other recommendations however remain valid.   

In addition to recommendations to strengthen confiscation of criminal assets and to adopt the 
new Criminal Procedure Code (see section on fight against corruption), in the coming year, 
Kosovo should in particular:  

  within  the  police,  effectively  implement  the  intelligence-led  and  community  policing 
approaches, including through reorganisation and further resourcing of the Kosovo Police 
Directorate  for  Intelligence  Analysis  and  by  increasing  the  presence  of  officers  at 
community level, enabling confidence building and proactive policing; 

  adopt standard operating procedures to run financial investigations in line with Financial 

Action Task Force (FATF) recommendations; 

  continue  to  increase  the  capacity  of  the  Special  Prosecution  Office  investigating  and 
prosecuting  high-profile  organised  crime  cases,  and  provide  training  to  strengthen  their 
capacity  to  conduct  financial  investigations,  confiscate  assets  and  effectively  protect 
witnesses. 

38 

 
 
 
Institutional set-up and legal alignment  

Key  institutions  involved  in  the  fight  against  organised  crime  include  the  Special 
Prosecution Office (SPRK) and the Special Department of the Basic Court and the Court 
of  Appeals  in  Pristina.  The  staffing  with  specialised  judges  and  prosecutors  and  support 
staff ensures stronger centralisation and greater judicial specialisation in response to serious 
and  organised  crime.  The  KPC  also  intensified  the  support  for  the  SPRK  by  adding  a  new 
prosecutor position and one position for a professional associate. Further staffing should be 
based on a needs assessment for both the SPRK and the Special Departments. 

The  Kosovo  Police’s  (KP)  investigation  department  is  responsible  for  the  fight  against 
organised  crime,  complemented  by  six  specialised  central-level  directorates  focused  on  the 
fight  against various types of organised crime, and with  cooperating units at  regional level. 
The Kosovo Forensic Agency is  accordingly assisting in  criminal  investigations. The KP  is 
continuing  with  its  reform  programme  under  EU  expert  advice  and  has  set-up  necessary 
structures. 

There  were  464  police  officers  per  100,000  inhabitants  in  2020  (471  in  2019),  and  an  EU 
average  of  326  in  2017,  according  to  Eurostat.  The  KP  has  adopted  the  new  Strategic 
Development  Plan  2021-2025,  which  provides  a  new  strategic  direction  and  reflects  an 
intention to deliver a more proactive and effective police service to all citizens of Kosovo. In 
December  2020,  the  KP  adopted  the  Integrated  Intelligence-Led  Policing  and  Community 
Policing  Strategy  and  Action  Plan  2021-2025.  Further,  KP  adopted  the  2021-2025  Plan  on 
Strengthening  the  Integrity  in  Kosovo  Police.  The  Police  performance  continues  to  be 
affected by a number of tasks that are not core police service tasks, such as providing security 
in low-risk government  buildings. The Kosovo Academy for Public Safety provides a good 
quality of education for police and other public safety agencies in Kosovo. The involvement 
of a large number of officers from the investigation department in implementing various anti-
COVID-19 measures led to the suspension of many ongoing investigations. 

Kosovo  Customs,  the  Financial  Intelligence  Unit  (FIU)  and  the  Tax  Administration 
remain  responsible  for  monitoring  and  controlling  the  internal  and  cross-border/boundary 
flow of goods, materials and capital that might be involved in any form of organised crime. 
Both  Kosovo  Customs  and  the  FIU  have  generally  performed  well.  The  Asset  Recovery 
Office  established  in  2018  within  the  KP  is  operational  and  staffed  with  two  dedicated 
officers,  but  it  receives  only  limited  requests  and  should  be  better  utilised  by  all  relevant 
actors.  

Operational cooperation between police, tax administration and customs is facilitated through 
interoperable databases. The Kosovo Police Information System (KPIS) is linked to other 
law  enforcement  databases.  During  the  reporting  period,  standard  operating  procedures  for 
the  better  utilisation  of  KPIS,  especially  regarding  case  management 
in  criminal 
investigations,  were  finalised  but  not  yet  adopted.  The  KPIS  is  connected  to  the  Case 
Management Information System (CMIS).  

The  Civil  Registry  Agency  is  undergoing  a  process  of  internal  reorganisation  aiming  to 
provide  increased  effectiveness  of  the  services  provided  by  the  agency.  The  agency  should 
reinforce internal mechanisms (i.e. Inspectorate) to further discourage the potential misuse of 
authority within the service and limit possibilities for document forgery or other misconduct.  
Interoperability of the Civil Registry Agency’s IT system with the Kosovo Cadastral Agency, 
Law Enforcement Agencies and other institutions is challenged by limitations regarding staff, 
budget  as well as technical  capacity. Communication and coordination between  central  and 
municipal level needs to be further improved.  

39 

 
 
The main strategic framework is the 2018-2022 strategy and action plan against organised 
crime. Other strategies and action plans are also in place, e.g. on arms control; the informal 
economy,  money  laundering  and  terrorist  financing;  terrorism;  the  prevention  of  violent 
extremism;  trafficking  in  human  beings;  narcotics;  and  cybersecurity.  An  improved 
cooperation and coordination between all responsible institutions is necessary with respect 
to  these strategies and action plans.  The Kosovo Police is  producing  annual  strategic crime 
assessment reports. In December 2020 the FIU Board adopted the second Kosovo-wide risk 
assessment on money laundering and terrorist financing. 

Despite  not  being  a  party  to  international  conventions  in  the  fight  against  organised  crime, 
such  as  the  United  Nations  Convention  on  Transnational  and  Organised  Crime  (Palermo 
convention),  due  to  status-related  issues,  Kosovo’s  unilaterally  applies  these  international 
principles  in  its  criminal  legislation.  Moreover,  it  is  generally  aligned  with  relevant 
European standards.  

The Criminal Code of 2019 increases the number of offences that can be prosecuted in the 
framework  of  organised  crime,  it  extends  statutory  limitation  periods  for  various  serious 
crimes and provides for sufficiently dissuasive penalties for corruption and organised crime 
offences.  A  revised  Criminal  Procedure  Code  still  needs  to  be  adopted.  The  Law  on 
Extended  Powers  of  Confiscation  has  been  in  force  since  2019  (see  section  on  the  fight 
against corruption). 

The Law on Money Laundering and Terrorism Financing should be amended, to be fully 
in  line  with  the  EU  acquis  and  international  standards.  (see  section  6.3  on  the  freedom  of 
movement  of  capital).  In  December  2020,  the  Government  approved  an  action  plan  for 
improvement  of  Anti-Money  Laundering/Combating  the  Financing  of  Terrorism  (based  on 
the  standards  adopted  by  the  Financial  Action  Task  Force  (FATF)  and  the  Committee  of 
Experts  on  the  Evaluation  of  Anti-Money  Laundering  Measures  and  the  Financing  of 
Terrorism (MONEYVAL). 

With regard to implementation of the Law on Interception of Electronic Communications, 
interception  capacities  were  upgraded,  allowing  decentralisation  of  monitoring  centres  to 
other  KP  units  as  well  as  other  Law  Enforcement  Agencies.  Legislation  on  cybercrime  is 
generally in line with the EU acquis. A new Law on Cybersecurity, while prepared, has not 
yet  been adopted.  Legislation on trafficking in human beings  is  broadly  aligned with  the 
current relevant EU acquis, but implementation could be improved. Kosovo lacks a specific 
strategy and action plan against trafficking in human beings.  

Implementation and enforcement capacity  

Kosovo authorities continue to report on the total number of indictments and convictions for 
the  charge  of  ‘organised  crime’  as  defined  in  the  United  Nations  Convention  on 
Transnational and Organised Crime (reflected in art. 277 of the Criminal Code). In 2020, 
five new cases were initiated involving 63 persons (five new cases involving 60 persons in 
2019). One case received an indictment, involving four persons. During 2020, in all pending 
cases four convictions (of which three in retrial) were issued by Basic Courts, one appeal was 
rejected,  one  appeal  partly  granted  (two  cases  (involving  six  people)  received  final 
convictions,  while  one  case  (involving  five  people)  was  sent  for  re-trial  by  the  Court  of 
Appeals  in  2019).  At  the  Supreme  Court,  two  requests  for  protection  of  legality  were 
rejected.  

For the visa liberalisation-related track record in the fight against high level corruption and 
organised crime, see the section on the fight against corruption. 

40 

 
 
those  organised  crime-related  cases  currently  not 

the 
As  regards 
aforementioned  track  record,  during  2020,  regarding  trafficking  in  human  beings,  19  cases 
were initiated (21 in  2019), while the prosecution presented 36 indictments  (43 in  2019).  2 
were declared guilty (5 guilty persons in 2019). In addition, 23 persons were indicted (10 in 
2019) for arms trafficking and the court convicted three persons (four in  2019). For money 
laundering, 33 persons were indicted (nine in 2019) and there were three final court decisions 
(zero in 2019). Only a fraction of all cases involving trafficking in human beings, trafficking 
in arms and money laundering also include charges of organised crime.  

included 

in 

The  police  and  the  prosecution  need  to  actively  use  all  powers  at  their  disposal  to  target 
criminal networks and their economic support base. 

Sentencing  policy  remains  erratic  (see  section  on  judiciary).  The  low  number  of 
confiscated  criminal  assets  is  still  a  key  concern  (see  the  section  on  the  fight  against 
corruption). The institutions involved in the fight against organised crime need to set up and 
use multi-disciplinary, joint investigation teams, where possible. 

The Kosovo Police (KP) has adequate capacity and capability to combat organised crime in 
Kosovo.  However,  investigations  of  organised  crime  remain  vulnerable  to  corruption, 
political pressure and unlawful interference. A positive and increased trend of successful KP 
operations  against  organised  crime,  also  involving  international  police  cooperation,  have 
resulted  in  a  number  of  arrests  and  preliminary  confiscation  of  assets  in  early  2021,  which 
now needs to be followed-up on by prosecution and judiciary. The Government should ensure 
a sound legal and organisational structure to the Special Investigative Unit within the Kosovo 
Police as the successor of the abolished Anti-Corruption Task Force (see section on the fight 
against corruption). 

Intelligence-led policing remains weak. The KP Directorate for Intelligence Analysis needs 
to  be  restructured  and  manpower  increased  to  improve  intelligence-led  policing.  There  is  a 
need for more specialised training sessions for all institutions involved in fighting the more 
complex  occurrences  of  organised  crime.  Closer  day-to-day  co-operation  in  view  of 
developing  strategies  to  better  conduct  investigations  and  clear  division  of  responsibilities 
between the police and the special prosecution is still needed.  

Kosovo  regularly  exchanges  information  with  Interpol  via  the  United  Nations  Interim 
Administration  Mission  in  Kosovo  (UNMIK).  In  a  positive  step,  a  Working  Arrangement 
concerning  strategic  cooperation  with  Europol  was  concluded  in  July  2020.  The  Working 
Arrangement was followed-up by additional implementing agreements, allowing for access to 
the Secure Information Exchange Network Application (SIENA) and the exchange of Liaison 
Officers. The agreements were signed by the Minister of Internal Affairs in July 2021 and are 
nearly  finalised.  The  Kosovo  Police  has  a  consistently  growing  cooperation  with  police 
services in EU Member States on a bilateral basis, including through joint investigation teams 
and  exchange  of  information  on  civil  and  criminal  cases.  The  police  has  signed  96 
international police cooperation agreements, including with 11 EU Member States, five EU 
agencies  and  other  countries  and  international  organisations.  The  Kosovo  Police  mutually 
exchanges liaison officers with seven partner countries.  

Effective implementation of witness protection mechanisms continues to face challenges, as 
few potential witnesses have sufficient trust in Kosovo institutions’ ability to keep them safe. 
No  witnesses  are  currently  enrolled  in  Kosovo  protection  mechanism.  Kosovo  police 
participates  in  Europol’s  Platform  for  Witness  Protection.  Prosecutors  and  judges  need 
training on how to protect witnesses effectively. 

41 

 
 
The fight against money laundering and terrorist financing is  not producing convincing 
results.  Money  laundering  and  terrorist  financing  are  often  not  prosecuted  as  a  standalone 
crime, which slows  down the overall criminal  procedure.  There is  a pressing need to  foster 
prosecutors’  and  judges’  enhanced  understanding  of  the  concept  of  money  laundering  and 
terrorist  financing  and  to  improve  specialisation  in  this  field.  There  remains  insufficient 
awareness of reporting entities and relevant stakeholders. In 2020, the Financial Intelligence 
Unit  (FIU)  received a total of 902 suspicious  transaction reports (a decrease of 12 % when 
compared  to  2019,  most  likely  due  to  the  pandemic).  FIU  has  exchanged  a  total  of  123 
requests for international information  exchange through the Egmont Group. FIU has issued 
34 freezing orders for the total amount of EUR 1.1 million, and carried out 31 inspections of 
reporting  entities,  which  resulted  in  administrative  sanctions  totalling  EUR  900  000.  One 
significant case from 2019, which led to the conviction of two suspects and final confiscation 
of  nearly  EUR  1  million,  has  been  ordered  for  a  retrial  by  the  Supreme  Court.  Overall, 
although the efficacy of financial investigations has improved at the police level, they are still 
not  systematically  conducted  in  parallel  with  the  criminal  investigations/proceedings. 
Inter-agency  cooperation  and  coordination  needs  to  improve  significantly  (see  also  section 
6.3 on the freedom of movement of capital) 

he  involvement  of  organised  and  armed  groups  in  arms  trafficking  remains  a  serious 
concern. Kosovo is implementing its strategy in this area and the Law on the Legalisation and 
Surrender of Weapons, Ammunition and Explosive Devices. During 2020, the Kosovo Police 
sequestrated  1,135  weapons.  The  firearms  focal  point  in  the  police  is  fully  operational  and 
works  well,  and  the  ballistics  laboratory  is  well  equipped.  Kosovo  participated  in  the 
European  Multidisciplinary  Platform  Against  Criminal  Threats  (EMPACT)  regarding 
firearms  and  in  the  activities  related  to  the  Regional  Roadmap  on  Small  Arms  and  Light 
Weapons,  despite  challenges  linked  to  the  absence  of  direct  connection  with  some  law 
enforcement information tools. Kosovo has the highest level of harmonisation in the region 
with  the  provisions  of  the  UN  Firearms  Protocol.  Previously  undertaken  efforts  to  further 
improve and revise its arms control legislation remain stalled. 

Kosovo  remains  a  country  of  origin,  transit  and  destination  of  victims  of  trafficking  in 
human beings, notably for sexual exploitation. In 2020, seven female victims and ten male 
victims  were  identified,  and  15  out  of  those  were  under  the  age  of  18.  More  efforts  are 
needed, especially regarding the pro-active identification of victims, ensuring assistance and 
support to victims and increasing prosecution and conviction of perpetrators  

Cigarette and tobacco smuggling exists and is of growing concern. Kosovo is used for the 
smuggling of counterfeit cigarettes as well as for legally produced tobacco products shipped 
illicitly via neighbouring countries in the Western Balkans. Progress was noted in the area of 
cybercrime,  for  the  detection,  traceability  and  prosecution  of  cyber  criminals.  In  2020,  53 
cases (46 in 2019) were initiated on cybercrime, while there were no indictments and no final 
judgements (in 2019, there were no indictments either, one termination of investigation and 
one person receiving a judgement of rejection by the court). However, there are still issues to 
be  addressed,  such  as  the  handling  of  electronic  evidence  by  people  with  insufficient 
knowledge and the limited availability of cybercrime training for newly appointed judges and 
prosecutors.  

A  working  arrangement  with  the  EU  Agency  for  Law  Enforcement  Training  (CEPOL)  has 
been in force since 2017. Kosovo actively takes part in a number of its activities. A dedicated 
contact point is in place. Kosovo has full access to the CEPOL Exchange Programme and its 
electronic learning system. Wherever possible, Kosovo should increase its involvement in the 

42 

 
 
EMPACT priorities, including the drafting of operational action plans and the participation in 
joint action days. 

Cooperation in the field of drugs 

Institutional set-up and legal alignment 

The  legislative  framework  to  combat  illicit  handling  of  and  trafficking  in  narcotic  drugs  is 
based on the 2007 Law on Narcotic Drugs, Psychotropic Substances and Precursors. A more 
comprehensive, revised draft law that in turn is aligned with more recent EU legislation is yet 
to be adopted. Drugs and trafficking-related crimes are dealt with through the Criminal Code.  

A coordination mechanism has been established to prevent and combat drug trafficking and 
the  illicit  use  of  precursors.  To  this  end,  and  in  accordance  with  the  current  strategy  and 
action  plan  (2018-2022),  the  National  Drug  Observatory  (NDO)  is  established  within  the 
Ministry  of  Internal  Affairs,  though  with  limited  resources  and  a  vacancy  at  its  head  since 
January 2019. While a decision was taken to increase the number of personnel, this has not 
yet  been  implemented.  Difficulties  also  remain  regarding  the  sustainable  and  routine 
collection  of  drug-related  data  throughout  Kosovo.  The  national  Early  Warning  System 
(NEWS)  is  not  fully  operational.  Kosovo  continued  to  cooperate  with  the  European 
Monitoring  Centre  for  Drugs  and  Drug  Addiction  (EMCDDA)  and  in  September  2020,  the 
Ministry of Internal Affairs and the Ministry of Health signed a Working Arrangement with 
them. The agreement provides for the exchange of expertise and information on drug related 
issues. Due to the lack of a head of the NDO, cooperation with EMCDDA does not always 
run smoothly.  

Implementation and enforcement capacity 

Kosovo  continues  to  be  both  a  storage  and  a  transit  country  for  narcotic  drugs  and  their 
derivatives.  Overall,  drug  seizures  remain  low:  around  256.7  kg  of  marijuana,  8.9  kg  of 
heroin, and 2.7 kg of cocaine were seized in 2020.     

During 2020, the Kosovo Police registered 1,006 new drug-related cases (1450 in 2019). Out 
of the total number of cases, 170 were charged as drug trafficking, 802 as illegal possession 
of  drugs  and  33  were  related  to  cultivation.  In  2020,  1,217  people  were  indicted  for  drug-
related offences and 367 people were found guilty by the courts (five were acquitted). In May 
2021,  the  Kosovo  Police,  in  close  cooperation  and  in  joint  investigation  with  Italian  and 
Albanian police seized 400kg of cocaine. It was the biggest one-off seizure of cocaine ever in 
Kosovo.  Provisions  are  present  for  the  secure  storage  of  seized  drugs  awaiting  destruction. 
However, a protocol for the handling, storage and destruction of drug precursors is still not in 
place.  

Organised crime groups continue to play a dominant role in large-scale drug trafficking and 
subsequent distribution in the EU. However, all actors in the chain of justice, including law 
enforcement, struggle with efficiency and inter-agency cooperation in the fight against drug 
trafficking.  The  prosecution  service  remains  too  understaffed  and  insufficiently  trained  to 
efficiently  deal  with  drug-related  offences.  Increased  cooperation  and  coordination  among 
law  enforcement  agencies  in  the  Western  Balkan  region  is  paramount.  This  can  only  take 
place  through  vastly  improved  inter-agency  cooperation  and  exchange  of  information  at  all 
levels.  

Educational  and  public  awareness  campaigns  for  the  prevention  of  drug  abuse  are 
implemented.  A  24-hour  drug  abuse  hotline,  is  available,  and  addiction  treatment  and 
methadone therapy is being offered. 

43 

 
 
 
Fight against terrorism  

Institutional set-up and legal alignment  

A  range  of  institutions  remain  active  and  involved  in  combating  terrorism  and  violent 
extremism, and in dealing with reintegration of returning Foreign Terrorist Fighters and their 
families. In April 2021, the Government of Kosovo appointed the Minister of Internal Affairs 
as  the  National  Coordinator  for  the  Prevention  of  Violent  Extremism  and  the  Fight  against 
Terrorism.  The  newly  appointed  Coordinator  should  re-establish  an  office  supporting  the 
coordinator and play a stronger role in inter-institutional coordination, with clarified structure 
and reporting lines.  

Kosovo’s legal framework is mostly in line with the EU acquis and international instruments 
on anti-terrorism. The Law on Combating Money Laundering and the Financing of Terrorism 
needs to be amended in order to be fully in line with EU and international standards (see fight 
against organised crime and section 6.3 on freedom of movement of capital). The draft law 
on  implementation  of  Targeted  International  Financial  Sanctions  is  finalised,  awaiting 
adoption by the Government.  

Kosovo  has  a  strategy  and  action  plan  against  terrorism  (2018-2023)  in  line  with  the  EU’s 
counterterrorism strategy. A strategy and action plan against violent extremism (2015-2020) 
expired at the end of 2020. A new Strategy and Action Plan (2021-2025), which covers both 
the  areas  of  terrorism  and  violent  extremism,  is  not  adopted  yet  by  the  Government.  A 
communications  strategy  remains  under  preparation.  Kosovo  authorities  continue  to 
implement the bilateral Implementing Arrangement with the EU for the Joint Action Plan on 
counter-terrorism  for  the  Western  Balkans,  whose  validity  and  continuation  has  been 
reaffirmed by the EU-Western Balkans Ministerial forum in October 2020. Kosovo submitted 
its second implementation report in January 2021. 

Implementation and enforcement capacity 

Kosovo  continued  to  fight  the  threat  of  terrorism.  During  the  reporting  period,  the  police 
initiated seven new cases related to terrorism (10 cases in 2019) and arrested three suspects. 
In  the  period,  January-May  2021  police  initiated  four  new  terrorism  related  cases.  For  17 
people  an  indictment  was  filed,  while  courts  found  32  people  guilty  and  rejected  the 
indictment  against  one  person.  Greater  consistency  of  sentencing  practices,  for  offences 
related  to  terrorism  and  violent  extremism,  is  necessary.  The  functioning  of  the  Special 
Department  within  the  Basic  Court  of  Pristina  and  within  the  Court  of  Appeals  have 
contributed to a more effective handling of terrorism cases compared to the past. 

Despite significant efforts, challenges in countering terrorism and preventing and countering 
violent extremism and radicalisation remain. Militant  Salafist ideology  and  ethnonational 
movements continue to be present in the region, including Kosovo, and remain a threat. The 
new strategy and action plan should address all forms of radicalisation and violent extremism, 
including  political,  ethno-nationalist  and  religious  ones.  It  is  important  that  the  existing 
strategies,  action  plans  and  reintegration  and  rehabilitation  programmes  are  continuously 
revised in order to demonstrate a risk-based approach. The authorities should set up a Joint 
Threat Assessment Centre, including a threat level grading system, which would facilitate a 
greater understanding among all agencies of the current operational climate, keep the public 
informed and improve responses, including as regards the protection of critical infrastructure.  

Despite challenges posed by the COVID-19 pandemic, important progress was made on the 
rehabilitation  and  reintegration  of  foreign  terrorist  fighters  (FTFs)  and  their  families 
that  returned  from  Syria/Iraq.  From  2012  until  2016,  an  estimated  355  Kosovo  citizens 
(257 men, 52 women and 46 children) left  for conflict  zones in  the Middle East,  mostly as 

44 

 
 
foreign  terrorist  fighters.  83  children  were  born  in  the  conflict  zone.  259  Kosovo  citizens 
have returned (131 men, 39 women, 89 children), 100 died, and 84 remain in theatre (35 men, 
8  women,  41  children).  On  18  July  2021,  the  Kosovo  authorities  carried  out  a  controlled 
return operation of Kosovo citizens from the conflict zone in Syria, including six FTFs, one 
women, and four children. The six suspected FTFs were detained upon arrival. To effectively 
address this challenge, the Reintegration Division of the Ministry of Internal Affairs needs to 
be  fully  funded,  staffed  and  trained,  including  a  specific  budget  and  dedicated  and 
experienced staff from the health, education and social services. Municipal authorities need to 
be more involved in planning and implementation of rehabilitation and reintegration process. 
The  National  Coordinator  on  CT/CVE  should  play  an  enhanced  role  in  overseeing  the 
rehabilitation  and  reintegration  process  including  by  linking  up  with  municipalities.  Civil 
society organisations should be given a greater role in rehabilitation and reintegration efforts 
in local communities. The focal point for counterterrorism and countering violent extremism 
and  established  Intelligence  Unit  within  the  Kosovo  Correctional  Service  contributed  in 
improving  coordination  of  pre-  and  post-release  processes,  but  de-radicalisation  and 
disengagement  programmes  within  the  correctional  system  need  to  be  significantly 
intensified. The issue of early and conditional release of Violent Extremist Offenders (VEOs) 
following decisions by the conditional release panel is of concern. The panel should consider 
security  and  risk  aspects  when  dealing  with  this  category  of  inmates.  During  the  reporting 
period, 15 VEOs were released from KCS custody. 

Kosovo  continues  to  participate  in  the  implementation  of  the  Western  Balkan  Counter 
Terrorism initiative (WBCTi). 

Legal and irregular migration 

Due the COVID-19 pandemic and related travel restrictions, Kosovo hosted more irregular 
migrants  and  refugees  simultaneously,  as  they  stayed  for  longer  periods  than  in  the  past. 
Preventive  measures  were  introduced  to  protect  the  migrant  population  from  the  pandemic, 
and no major outbreak of COVID-19 was reported in  the Asylum Centres.  Overall Kosovo 
has  managed  the  situation  in  the  Asylum  Centres  well  (including  living  conditions, 
information sharing) despite limited capacities, with support from partners. Stranded migrants 
outside of centres proved a particular challenge. As they did not register, they did not receive 
government assistance (it is estimated up to 200-300 migrants were stranded as such). A new 
temporary  reception  and  registration  centre  is  currently  under  construction.  The  EU,  EU 
Member States and Kosovo cooperated closely on mutually repatriating citizens stranded due 
to COVID-19 related measures. In view of their vulnerability, Kosovo included migrants and 
refugees in the vaccination programme.  

Institutional set-up and legal alignment 

The relevant  institutions  dealing  with  migration in  the Ministry of  Internal  Affairs and the 
Border Police remain in place. The legal framework is largely in line with the EU acquis. 

Kosovo  has  signed  readmission  agreements  with  24  countries,  including  20  EU  Member 
States  and  members  of  the  Schengen  area.  No  new  readmission  agreements  were  signed  in 
the reporting period. There is no readmission agreement with the EU as a whole. 

While overall, the Law on Asylum and the Law on Foreigners are somewhat aligned with 
EU  acquis  and  international  standards,  they  should  be  revised  to  include  a  humanitarian 
protection category, extending the voluntary return period and reflect on the existence of the 
new reception centre. It is also recommended to include refugees in social protection schemes 
to support their inclusion and integration into society. 

45 

 
 
The  Migration  Strategy  and  Action  Plan  2021-2025  has  been  prepared  and  is  awaiting 
government  approval.  It  is  based  on  the  analysis  and  recommendations  from  migration 
profiles  and  reflects  the  objectives  of  the  Global  Compact  on  Migration  and  the  new  EU 
Migration and Asylum Pact. The new Strategy was also merged with the previously separate 
strategic documents concerning reintegration as well as diaspora.  

The  Government  Authority  on  Migration  (GAM)  should  take  a  more  proactive  role  in 
migration  governance,  coordination  as  well  as  in  improving  the  monitoring  mechanism  for 
implementing  migration  policies.  GAM  has  finalised  its  new  statute  which  sets  the  duties, 
roles and responsibilities of this authority. While it should further strengthen the role of this 
body, the statute has not yet been adopted.  

Implementation and enforcement capacity 

Despite  the  COVID-19  travel  restrictions,  mixed  migration  flows  continued  to  transit 
Kosovo,  which  hosted  an  increasing  number  of  migrants  during  2020  and  the  beginning  of 
2021. Kosovo border police reported the interception of 2,564 irregular migrants in 2020. The 
three main nationalities  represented  were Syrians, Moroccans and Palestinians. Most of the 
migrants are single men, with a limited number of single women, families and children. Over 
90 % of those intercepted entered Kosovo irregularly  from  Albania.  Due to  the COVID-19 
travel restrictions, all migrants and refugees tend to remain in Kosovo for a longer time (on 
average 33 days compared to eight-11 days in 2019). Providing proper care and security for 
the  most  vulnerable  groups  of  migrants  remains  a  challenge.  Due  to  a  lack  of  biometric 
equipment, registering migrants at the borders or police stations continues to be a challenge. 

The number of people in the detention centre increased compared to the previous years. 45 
people were accommodated during the reporting period, with an average stay of 40 days. The 
detention centre has a limited capacity and does not meet all the necessary standards. During 
2021, 16 persons escaped from the detention centre, with two subsequently being returned to 
the detention centre. The return of third-country nationals continued to be hindered by status-
related issues. In 2020, 279 people were returned (95 forced, 150 through voluntary returns, 
and  34  deportations  based  on  a  court  decision).  It  is  of  utmost  importance  to  establish 
measures alternative to detention for migrants subject to return.  

The Contingency Plan for the management of the potential influx of migrants, refugees 
and  asylum  applicants  adopted  in  July  2019  has  been  revised  and  awaits  government 
approval. The authorities expanded accommodation capacities, which are currently sufficient. 
There are three asylum centres with a current  capacity of up to 600 persons (Magure  - 100 
persons;  Vranidoll  -  200  persons;  Belvedere  Camp  -  300  persons,  although  the  latter  could 
accommodate up to 2 200 persons in total based on the revised Contingency Plan). In June 
2021, the asylum Centre in Vranidoll was renovated ensuring access to quality services and 
rights.  In  2020,  the  decision  was  made  to  establish  an  additional  temporary  reception, 
registration and accommodation centre for migrants and refugees, also in Vranidoll.  It is 
currently under construction. Its sustainability and adequate budget beyond 2022 will need to 
be ensured. The Centre will improve the identification, registration and protection of migrants 
and refugees in vulnerable situations. It will be important to provide adequate interpretation 
services,  basic  psychosocial,  medical  and  other  specific  services  related  to  the  vulnerable 
groups.  

A rise in security incidents involving migrants/asylum seekers was noted (including clashes 
with the police, group fights, physical assault, arson and robberies). In the pandemic context, 
gender based violence has also been on the rise in the Centres.  

46 

 
 
Gaps in enforcement remain, in particular due to a lack of coordination between government 
agencies. In January 2021, the Department for Citizenship, Asylum and Migration within the 
Ministry  of  Internal  Affairs  increased  its  staff  with  an  additional  20  officers.  While 
fundamental  rights  are  generally  upheld,  the  centres  are  facing  structural  issues,  mainly 
relating to improper housing units, a lack of secure areas, a lack of in-house medical facilities 
and adequate specialised supervisory staffing, especially for psychosocial support. The border 
police needs further capacity building in the area of protection-sensitive migration. Qualified 
interpreters are needed to service both the asylum and detention centres and the border police. 
Kosovo has strengthened the inter- and intra-institutional systems for migration management, 
including  on  migration  statistics.  Kosovo  has  aligned  more  closely  with  EU  Regulation 
862/2007  on community statistics on migration and international  protection. Collection and 
analysis of migration statistics was improved, and efforts made in regional harmonization of 
such statistics. This should allow cross-country and regional analyses of migration trends.  

Enhanced border controls due to COVID-19, resulted in an increase in smuggling compared 
to  the  previous  year.  Transnational  smuggling  networks  that  include  Kosovo  citizens 
facilitate  secondary  movements  of  irregular  migrants  from  entry  points  along  the  Western 
Balkan route. In 2020 the police initiated 24 cases for migrant smuggling and investigated 34 
persons.  

The readmission agreements with EU Member States and Schengen associated countries are 
being implemented satisfactorily. The number of asylum requests made by Kosovo citizens in 
both  EU  and  Schengen  associated  countries  has  fallen  steadily,  from  the  peak  of  73,240  in 
2015 to 3,520 in 2019 and 2,265 in 2020. Mirroring the trend in asylum requests, the overall 
number  of  Kosovo  citizens  readmitted  has  dropped  from  18,789  in  2015  to  1,536  in  2019 
(1,162 forced and 374 voluntary) and 625 (512 forced and 113 voluntary) in 2020. Out of 942 
readmission requests in  2020, 635 requests were accepted (67.5%), 263 rejected (28%) and 
44 (4.7%) are still in process. The return rate of Kosovo citizens ordered to leave EU territory 
was 58% in 2018, 41% in 2019 and 29% in 2020. While statistics show a drop in the return 
rate, EU Member States have confirmed that Kosovo authorities continue to cooperate well 
on readmission. 

Over the last few years, important progress has been made by the government towards more 
comprehensive  policies  and  practices  on  return  and  reintegration  of  Kosovo  nationals.  A 
sustainable reintegration process is  in  place in Kosovo, but  it remains complex, involving 
many actors. Overall, there is a need for better inter-institutional coordination, including with 
municipalities, as  well  as improved systemic monitoring and evaluation.  Further efforts  are 
still  needed  to  put  in  place  a  gender-sensitive  system  that  reaches  the  most  vulnerable 
returnees and focuses more on sustainable community assistance. A referral mechanism was 
established and functions through the Reception Centre for Repatriated Persons. As regards 
identifying and advancing the referral of vulnerable cases to adequate reintegration services, 
a  manual  and  training  on  needs  assessment  were  provided  to  responsible  central  and  local 
reintegration officials. 

In  August  2021,  Kosovo  began  temporarily  hosting  US-linked  and  NATO-related 
evacuees/refugees from Afghanistan, based on the decision by the government to grant them 
temporary protection for one year. They are hosted in two open facilities in Kosovo, with the 
understanding they will be further resettled in the United States under a specific visa regime 
or in NATO member states committing to take them in.  

47 

 
 
 
 
Asylum 

Institutional set-up and legal alignment 

Kosovo’s asylum legal and institutional framework is in place. A steady increase of asylum 
seekers and the prolonged duration of stay of asylum seekers in 2020 and 2021 (from several 
days  to  several  weeks),  has  revealed  capacity  gaps  and  shortcomings  in  the  effective 
implementation of the legislation. Certain sectors of the system require further strengthening. 

The legal framework governing the asylum area is mostly in line with EU acquis. Specific 
regulations  and  procedural  guidelines,  deriving  from  the  legal  framework,  such  as  the 
guidelines on child protection, and integration of foreigners are being prepared.  

Implementation and enforcement capacity 

In 2020, Kosovo  recorded 1 409  asylum applications (2 081 in  2019).  A decreasing trend 
has been observed in the first quarter of 2021, when 94 claims were lodged, in comparison to 
the same period in 2020 when 655 asylum claims were lodged. All applicants enjoy access to 
the  asylum  procedure.  However,  Kosovo  is  still  mainly  a  transit  country.  Most  asylum 
requests  are  suspended,  as  applicants  disappear  without  completing  the  procedure.  During 
2020, 11 persons received refugee status, while three persons received subsidiary protection. 
Due to  the pandemic, certain  delays have been observed with  to  the processing of Refugee 
Status Determination.  

The establishment of a fully effective and protection-sensitive entry system is still a work 
in progress. The capacities of first-contact officials for identification, screening, and referrals 
of persons seeking international protection and persons with specific needs within the mixed 
migration flow should improve further. All asylum seekers are accommodated in the asylum 
facilities, where the registration takes place. With donor support the authorities worked on the 
refurbishment  of  facilities  and  improving  services  and  standards  in  the  asylum  centres, 
including healthcare services, psychological counselling and psychosocial activities. Detained 
foreigners who seek asylum are given the opportunity to be transferred to the asylum centre 
and provided access to asylum procedures. Although detention is considered as a last resort 
administrative  measure,  in  the  absence  of  alternatives,  authorities  continue  to  use  it  as  a 
temporary measure for different categories of migrants (e.g. those who do not request asylum 
or  are  not  considered  asylum  seekers).  Alternative  solutions  to  detention  need  to  be 
established. 

The integration system is at an early stage of development. The Ministry’s Department for 
Reintegration  of  Repatriated  persons,  as  a  responsible  authority  for  establishment  of  the 
functional  integration  system  in  Kosovo,  needs  to  be  strengthened.  Authorities  issue 
biometric  ID  cards  and  travel  documents  for  refugees,  although  long  delays  have  been 
observed.  The  assessment  of  claims  based  on  merit  needs  further  strengthening.  Regarding 
child  protection,  strengthening  of  procedures  concerning  unaccompanied  minors,  including 
age  determination,  legal  guardianship  and  communication,  remains  crucial.  Authorities 
should consider accelerating the process of hiring new staff in the asylum area, in accordance 
with new secondary legislation. 

The  European  Asylum  Support  Office  (EASO)  cooperates  with  Kosovo,  including  through 
regional training activities. EASO conducted a priority assessment in July 2021 in view of a 
future bilateral cooperation roadmap. 

Visa policy 

Kosovo  has  yet  to  fully  align  its  legislation  with  the  EU  visa  policy.  In  December  2020,  a 
revised  Administrative  Instructions  on  Conditions  and  Procedures  for  the  Issuance  of  the 

48 

 
 
Visas  at  the  Border  Crossing  Point  by  the  Ministry  of  Internal  Affairs  was  adopted,  which 
aims to align Kosovo with the EU Visa Code.  

Kosovo  currently  imposes  visa  requirements  on  nationals  of  88  countries,  based  on  a  2013 
government  decision.  The  visa-issuing  authorities  have  the  capacity  to  digitally  collect 
biometric  identifiers  from  visa  applicants,  although  the  equipment  needs  upgrading.  All 
granted visas and rejections are registered in Kosovo’s visa information system. 16 Kosovo 
consulates  issue  visas.  For  the  year  2020,  all  visas  issued  at  the  border  crossing  points 
belonged to the category of official visits. 

The citizens of Kosovo remain the only ones in the Western Balkans that need a visa to travel 
to  the  Schengen  area.  A  visa  liberalisation  dialogue  started  in  2012.  In  July  2018,  the 
Commission confirmed that Kosovo had fulfilled all the benchmarks of the visa liberalisation 
roadmap and recommended that the Council and European Parliament move forward with the 
proposal for visa liberalisation. The Commission continues to stand behind its assessment of 
July 2018. The European Parliament, in both the previous and current legislature, has voted 
in favour of the Commission’s proposal, but the latter is still pending in the Council. 

Schengen and external borders 

Institutional set-up and legal alignment 

The National Centre for Border Management (NCBM) is one of the most important tools of 
Kosovo to effectively manage the security of its border/boundary. It has a Joint Intelligence 
Risk  Analysis  and  Threat  Assessment  Unit,  which  collects,  analyses,  and  disseminates 
information  from  and  to  the  border  authorities  responsible  for  IBM.  A  revised  NCBM 
Development Plan (2020 – 2025) was approved in January 2021, however there has been no 
progress  in  implementing  the  NCBM  Action  Plan.  There  is  a  need  for  better  strategic 
assessment and analyses of border-related risks, including security, and for better cooperation 
with other border authorities. The lack of connection to important international networks such 
as Interpol’s I-24/7, due to status-related issues, affects its effectiveness. 

The  legislative  framework  for  managing  Kosovo’s  borders/boundary  is  mostly  in  line  with 
the EU and international standards. The IBM Strategy (2020 – 2025) and Action Plan (2020 – 
2023), which were completed last year, were approved in February 2021.  

Implementation and enforcement capacity  

The Border Department of the police is well staffed, with a total of around 1,250 officers, and 
generally meets EU minimum standards for border controls. The performance of the Border 
Police  working  at  the  border/boundary  crossing  points  and  their  knowledge  of  the  border 
procedures  has  improved.  The  Kosovo  Police  Information  System  is  linked  to  all 
border/boundary  crossing  points.  The  infrastructure  at  border/boundary  crossing  points  has 
improved and the Border Management System continues to operate satisfactorily. However, 
the  lack  of  access  to  international  databases  is  a  hindrance  to  effective  crime  prevention 
work. 

The Ministry of Internal Affairs of Kosovo’s working arrangement with the European Border 
and Coast Guard Agency (Frontex) enables close cooperation on irregular migration, cross-
border  crimes,  border  security  and  overall  border  management.  Kosovo  participates  in  the 
Western  Balkan  risk  analysis  network  and  in  several  other  regional  exercises  organised  by 
Frontex.  Inter-agency  cooperation  is  good,  but  it  could  be  further  improved  in  regards  of 
information exchange and joint risk analysis. 

The Interim IBM common crossing-points with Serbia continue to be operational. Only two 
of the six permanent Common Crossing Points (CCPs) have been established (Merdare and 

49 

 
 
Mutivodë/Mutivode)  (see  section  5  on  the  normalization  of  relations  between  Kosovo  and 
Serbia).  Facilities  of  two  EU-funded  crossing  points  Merdare  and  Mutivodë/Mutivode  are 
ready. However, at the latter Serbian authorities are still working in old interim facilities and 
in the former only one side (exit from Kosovo) is open, because Serbia has not manned the 
other side (exit from Serbia) of the CCP.  

Additional  measures  need  to  be  taken  to  combat  irregular  crossings  and  related  criminal 
activities  (including  corruption),  particularly  along  the  border/boundary  with  Serbia. 
Following a large police operation in  early 2020, which revealed a system  of border police 
involvement in organised smuggling across the border/boundary with Serbia, Kosovo police 
implemented a new anti-corruption strategy, whereby officers rotate every three months from 
one crossing point to another.  

 Judicial cooperation in civil and criminal matters 

While Kosovo is not party to most multilateral treaties governing mutual judicial cooperation, 
it unilaterally applies internationally recognised treaty standards.  

The legal framework for judicial cooperation in civil matters is outdated and not consolidated 
into one comprehensive law. During the reporting period, a new law on judicial cooperation 
in civil matters was prepared and adopted by the government, but has yet to be adopted by the 
Assembly. In 2020, Kosovo issued 123 requests on civil matters and received 200 responses. 
It received 299 requests on civil matters and provided 288 responses. 

Kosovo’s  international  legal  cooperation  in  criminal  matters  is  based  on  the  Law  on  legal 
cooperation in criminal matters of 2013 – which is in the process of being revised - as well as 
on 36 bilateral treaties. In 2020, Kosovo issued 101 requests in criminal matters and received 
127  responses.  It  received  341  requests  and  provided  224  responses.  In  December  2020, 
Kosovo  formally  appointed  two  Contact  Points  for  cooperation  with  Eurojust.  Cooperation 
with  countries  with  which  Kosovo  does  not  have  bilateral  agreements  is  based  on  the 
principle of reciprocity. Cooperative relations should be established with the European Public 
Prosecutor’s Office (EPPO), which started its operational activities on 1 June 2021. 

The  2015  Procedures  on  Mutual  Legal  Cooperation  agreed  between  Belgrade  and  Pristina 
form the basis for judicial cooperation between their judicial authorities. Most other countries 
that do not recognise Kosovo have voluntarily accepted the facilitating role of the EU Special 
Representative in Kosovo in the transmission of judicial requests (including those concerning 
extradition). However, the lack of cooperation by some non-recognising states has in practice 
resulted in cases of impunity.  

All aspects of customs cooperation are now covered in section 6.5 on Customs. 

Counterfeiting of the euro (criminal law aspects)  

Kosovo is broadly in line with the EU acquis on the suppression of counterfeit currency, and 
has  set  up  competent  authorities  and  procedures  for  dealing  with  counterfeit  money. 
However, the Criminal Code is only partially aligned with the EU Directive on the Protection 
of the Euro and Other Currencies against Counterfeiting, and further alignment is necessary 
including on altering money and import and export. Technical analysis of counterfeit money 
(including euro banknotes and coins) in line with international standards is mainly carried out 
by the Forensics Agency within the Ministry of Internal Affairs. The Agency has concluded 
an agreement with the European Commission on further cooperation on exchange, assistance 
and  training  for  the  protection  of  the  euro  against  counterfeiting  (the  Pericles  2020 
programme) (see section 6.25 on financial control). 

50 

 
 
 
2.3. 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  assessment  (see  below)  of  compliance  with  the  economic 
criteria  for  accession. Every year, each enlargement  country prepares an economic reform 
programme  (ERP),  which  sets  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. 

2.3.1. The existence of a functioning market economy 

Kosovo  has  made  limited  progress  and  is  at  an  early  stage  of  developing  a  functioning 
market economy. The economy plunged into recession in 2020, but this trend was reversed in 
the  first  half  of  2021.  Long-standing  structural  problems,  such  as  the  lack  of  economic 
diversification and the dependence on financial flows from the diaspora made Kosovo very 
vulnerable to the pandemic-related lockdown and travel restrictions. In response to the crisis, 
the authorities suspended the fiscal rule and adopted two fiscal packages. A strong increase in 
spending and shrinking tax revenues resulted in a large budget deficit in 2020 but recovery in 
tax  revenue  helped  achieve  a  budget  surplus  in  the  first  half  of  2021.  The  business 
environment  saw  little  improvement.  Private  sector  development  remains  constrained  by  a 
widespread  informal  economy,  a  slow  and  inefficient  judiciary,  a  high  prevalence  of 
corruption  and  the  overall  weak  rule  of  law.  Last  year’s  recommendations  were  partly 
addressed. 

51 

201820192020Kosovo - Key economic figuresGDP per capita (% of EU-27 in PPS)23.625.025.926.0Real GDP growth 3.33.84.9-4.1Economic activity rate of the population aged 15-64 (%), total39.740.940.538.3      female19.518.421.120.8      male59.663.359.756.0Unemployment rate of the population aged 15-64 (%), total31.229.625.725.9      female37.633.434.432.3      male29.128.522.623.5Employment of the population aged 15-64 (annual growth %)3.71)-3.45.2-4.0Nominal wages (annual growth %)2.41)5.15.3-2.3Consumer price index (annual growth %)1.01.12.70.2Exchange rate against EUR1.01.01.01.0Current account balance (% of GDP)-6.3-7.6-5.6-7.1Net foreign direct investment, FDI (% of GDP)3.73.42.74.2General government balance (% of GDP)-2.0-2.9-2.9-7.0General government debt (% of GDP)11.916.917.521.8Notes: 1) average of 2013-2017 Source: Kosovo statistics, World Bank and IMF2012-17 average 
 
 
In order to improve the functioning of the market economy, Kosovo should in particular:  

  support  post-crisis  recovery  by  targeting  most  affected  and  vulnerable  firms  and 
households while planning the return to the deficit ceiling of 2% of GDP in the medium 
term; 

  prepare  a  review  of  the  social  security  system,  including  war  veteran  pensions,  and  a 
review of tax expenditure with a view to improving the cost-efficiency and fairness of the 
social security schemes; 

  improve  the  quality  of  public  spending  by  reforming  the  public  wage  system  and 

addressing bottlenecks in the management of capital investment; 

  implement  relevant  business  environment  measures,  in  particular  the  simplification, 

merging and abolishment of licences and permits;  

  implement  active  labour market  measures  to  support employment, increase labour force 
participation and incentive measures with an aim to formalise informal employment.   

Economic governance 

Kosovo’s  economic  governance  focused  on  mitigating  the  crisis  impact  on  households 
and firms through the adoption of subsequent support packages and the suspension of 
the deficit rule.  The initial  emergency package  (EUR 180 million) adopted in  March 2020 
was supplemented by an additional provision of EUR 185 million for the economic recovery 
programme in the revised budget  adopted in July, bringing the budgeted 2020 crisis-related 
stimulus  to  a  grand  total  of  about  5.2%  of  2020  GDP.  The  economic  recovery  programme 
targeted broadly the same categories as the emergency package. It mainly supported affected 
businesses  and  most  vulnerable  households,  formal  and  informal  employment,  the  health 
sector,  and  provided  liquidity  to  financial  institutions  through  credit  guarantees  and 
regulatory measures. The implementation of the recovery package in the second half of 2020 
was slow, as  some support was not  possible without  the approval  of the  Law on Economic 
Recovery, which was adopted with a considerable delay. Once adopted, the law added a new 
ad  hoc  spending  item  to  support  operational  expenses  of  private  firms  (EUR 200  million) 
without  transparent  allocation  criteria.  Moreover,  the  Law  on  Economic  Recovery  allowed 
early, tax-free withdrawals of 10%of pension savings from the Kosovo Pension Saving Trust 
(KPST) (EUR 200 million or 3%of 2020 GDP), which the government promised to reimburse 
from 2023 onwards. To bridge the financing gap, Kosovo was granted concessional loans by 
donors,  including  Macro-financial  Assistance  (MFA)  from  the  EU,  the  IMF  emergency 
liquidity loan (Rapid Finance Instrument, RFI), as well as loans from the World Bank and the 
Council of Europe. 

The  policy  guidance,  jointly  agreed  at  the  May  2020  Economic  and  Financial  Dialogue 
between the EU and the Western Balkans and Turkey, has seen limited implementation. The 
2021-2023 Economic Reform Programme, which was submitted by the outgoing government, 
focuses  on  economic  recovery,  but  is 
vague  on  reform  priorities.  The  return  to 
the 2% deficit ceiling is planned by 2023. 

Macroeconomic stability 

Following  five  years  of  robust  growth, 
plunged 
Kosovo’s 
into 
to  COVID-19-related 
recession  due 

economy 

52 

 
 
restrictions. Annual GDP contracted by around 4% in 2020, driven by a strong fall in private 
and public investments and a strong negative contribution of net exports.  The impact of the 
crisis  on  financial  flows  from  the  diaspora,  notably  tourism  exports  and  investment,  was  a 
key  transmission  channel.  Declining  imports  and  elevated  government  spending  resulting 
from  fiscal  stimulus  packages  provided  some  cushion  against  the  economic  downturn.  In 
addition,  exports of goods held  up well and increased by  a solid 12.6%,  reflecting  a strong 
performance of base metals, which account for more than a third of total goods exports. The 
reported  increase  in  private  consumption  seems  at  odds  with  falling  imports  and  domestic 
trade, and likely reflects weaknesses in statistics. Economic activity rebounded in early 2021 
with GDP expanding by 5.6% year-on-year in the first quarter, supported by fiscal stimulus 
and  recovering  investment.  The  upward  trend  accelerated  in  the  summer  months  due  to  a 
massive return of diaspora tourism, stronger remittances and a strong growth in consumption 
loans.  The  pandemic  underlined  the  vulnerability  of  Kosovo  stemming  from  low  economic 
diversification,  which  was  advancing  at  a  slow  pace  despite  robust  GDP  growth  before  the 
crisis. 

Kosovo’s per capita GDP remains the lowest in the region.  It stood at about 26% of the 
EU average in 2020. COVID-19 had a negative impact on employment, wages and poverty. 
Inequalities  remain  widespread  due  to  a  large  informal  sector  and  high  inactivity  rates, 
especially among women.  

led 

imports 

The current account deficit  increased to 7.1% of GDP in 2020 and widened further in 
the  first  half  of  2021.  In  2020,  the  deterioration  was  driven  by  the  collapse  of  exports  of 
services,  mainly  diaspora  tourism  from 
Western  Europe,  which  fell  by  25.7% 
compared  to  the  previous  year.  While 
strong  performance  of  goods  exports  and 
declining 
to  a  marginal 
improvement  in  the  merchandise  trade 
deficit,  the  overall  deficit  of  goods  and 
services rose to 29% of GDP from 27% in 
2019.  The  key  offsetting  factor  was  an 
increase  in  remittances,  which  reached 
14%  of  GDP  in  2020.  The  increase  of 
remittances sent via official channels was mainly driven by travel restrictions that made less 
formal ways of transferring money to Kosovo less viable. In the first half of 2021, the current 
account  deficit  more  than  doubled  as  compared  to  the  same  period  in  2020.  An  impressive 
return of diaspora tourism led to an increase in the surplus of services trade by 88.3% year-
on-year, but the balance of goods trade deteriorated by 37%. Remittances increased by 27% 
over the same period.  

Net FDI inflows in 2020 increased to 4.2% of GDP on the back of reinvested earnings in 
the financial sector. Gross FDI fell by 4%; in particular, FDI in real estate, accounting for 
the bulk of FDI in 2018-2019, were affected by travel restrictions and the resulting drop in 
diaspora  arrivals  in  Kosovo.  Kosovo  does  not  attract  any  portfolio  investments.  In  the  first 
quarter  of  2021,  net  FDI  inflows  increased  further  to  6.2%  of  GDP  while  official  reserve 
assets stood at 3.2 months of imports of goods and services. 

In line with contracting economic activity, average annual inflation declined to 0.2% in 
2020.  Weak  demand  pressures,  low  imported  inflation  and  the  removal  in  April  of  100% 
import  tariffs  on  products  originating  from  Bosnia  and  Herzegovina  and  Serbia  led  to  a 
steady deceleration of annual consumer price inflation, which turned negative in the summer 

53 

 
 
despite  a  positive  contribution  from  food  prices.  In  the  first  five  months  of  2021,  inflation 
picked  up  and  averaged  1.2%  year-over-year  with  monthly  readings  turning  positive  in 
February. Inflation’s positive trend has continued to increase every month, reaching a record-
high figure of 3.5% year-over-year by July 2021. 

In 2020, the budget deficit widened significantly on the back of shrinking revenues and 
increased pandemic-related spending. The headline budget deficit reached 7% of GDP in 
2020, which  corresponds  to  a deficit of 5.3%  of  GDP under the fiscal  rule definition.4 The 
fiscal  rule  was  suspended  due  to  the  crisis,  allowing  the  deficit  to  exceed  the  prescribed 
ceiling  of  2%.  Tax  revenue  contracted  by  9.6%  while  public  spending  rose  by  6.7%  as 
compared  to  the  outcome  of  2019.  Tax  and  non-tax  budget  revenue  fell  also  short  of 
projections  of  the  revised  2020  budget,  with  the  collection  rates  from  direct  and  indirect 
taxation  standing  at  94%  and  96%,  respectively.  The  implementation  of  the  revised  2020 
budget  was uneven among different categories. Due to the implementation of the economic 
recovery programme in 2020, social transfers at the general government level rose by 39%. 
The  recurring  under-execution  of  capital  spending  hit  a  new  record-low  in  2020  due  to  the 
political  stalemate,  the  pandemic-related  restrictions  and  the  resulting  inability  to  advance 
donor-financed  projects.  Total  capital  spending  contracted  by  nearly  28%  as  compared  to 
2019.  This  trend  was  reversed  in  the  first  half  of  2021,  as  the  increase  in  public  revenue 
(19.6%) outpaced growth in expenditure (9.8%) resulting in a budget surplus three times as 
big as compared to the same period of 2020. Capital spending increased by 27.7% year-on-
year largely due to base effects. 

Due to a widening financing gap in 2020, the debt-to-GDP ratio increased to 23.2% in 
June  2021  from  17.5%  at  the  end  of  2019.  Domestic  debt,  which  is  held  by  a  narrow 
investor base, rose by 34% during this period with a large share of new issuances absorbed by 
the Kosovo Pension Saving Trust (KPST). The share of domestic debt held by the KPST has 
increased to 45% from 38% in 2019, while the amount held by commercial banks declined 
from  35% to  31%, respectively. Meanwhile, the  share held  by the Central  Bank of Kosovo 
(CBK) shrunk by 2 percentage points (pps) 
to  20%.  As  Kosovo  does  not  have 
sovereign  credit  rating  and  access 
to 
international 
foreign 
financing  was  provided  by  international 
donors.  Foreign  debt  increased  by  nearly 
40%  from  end-2019  to  mid-2021  on  the 
back  of  external  loans,  including  the  EU 
(EUR 100 
macro-financial 
million),  World  Bank 
(EUR 76 
million)  and  the  IMF  Rapid  Financing 
Instrument (EUR 52 million). 

bond  market, 

assistance 

loans 

Fiscal governance made little progress in 2020. While the draft 2021 budget was based on 
reasonable assumptions, the adoption of the Law on Economic Recovery, which included an 
additional  stimulus  package  of  EUR 200  million  and  some  tax  exemptions,  made  the  2021 

4 The fiscal rule places a cap on the fiscal deficit of 2% of forecast GDP, excluding capital projects financed by 
privatisation  proceeds  and  donors  (‘investment  clause’).  This  exemption  for  donor-financed  investments  can 
be invoked until 2025, provided the public debt ratio remains below 30% of GDP. As a part of the fiscal rule, 
the wage bill rule provides that the increase in the public wage bill cannot exceed nominal GDP growth. The 
government  deposits  used  as  fiscal  buffers  are  legally  required  to  stay  at  4.5%  of  GDP  as  long  as  the 
government  is  using  privatisation  proceeds.  The  debt  rule  provides  that  public  and  publicly  guaranteed  debt 
cannot exceed 40% of GDP. 

54 

 
 
                                                           
budgetary  projections  obsolete.  The  2022-2024  medium  term  expenditure  framework 
(MTEF) assumes a very large increase in public investment, which appears overly optimistic, 
given  the  repeated  under-execution  of  capital  spending  over  the  last  years.  In  June,  the 
government approved the mid-year revision of the 2021 budget, projecting higher tax revenue 
(8%  above  the  MTEF  value)  due  to  a  rebound  in  GDP  growth.  Public  spending  is  also  set 
somewhat higher as the revised budget includes the economic revival package amounting to 
EUR 420 million, out of which EUR 190 million was part of the original budget and a further 
EUR 230  are  expected  to  be  financed  through  additional  borrowing,  including  diaspora 
bonds.  Little  progress  was  made  in  reforming  the  pension  system,  in  particular  the  war 
veteran pension scheme, which needs adjustments in order to bring its costs into line with the 
legislated  cap.  In  contrast,  allowing  the  withdrawal  of  10%  of  pension  savings  from  KPST 
under the stimulus measures undermines the credibility of the contributory system and adds a 
liability  to  the  public  sector.  First  steps  have  been  taken  towards  improving  the  financial 
oversight  and  fiscal  risk  assessment  of  publicly  owned  enterprises  (POEs)  by  making  POE 
financial  data  publicly  available.  However,  these  reports  have  been  discontinued  in  the 
government’s most recent financial statements for the final quarter of 2020. 

While the overall policy mix of temporary loosening of fiscal and financial policies was 
appropriate, the implementation of the economic recovery programme in 2020 suffered 
from delays and not clearly defined allocation criteria. In 2020, some transfers to private 
firms  (EUR 60  million  or  1%  of  GDP)  were  done  universally  without  analysing  whether 
beneficiaries  were  hit  by  the  pandemic.  As  the  implementation  of  the  recovery  programme 
continues  in  2021,  steering  recovery-related  policies  towards  growth-enhancing  activities  is 
key.  While  fiscal  stimulus  is  important  to  support  the  fragile  recovery  in  2021,  rapidly 
increasing public debt and the quality of public finance raise concerns. Kosovo’s tax base is 
narrow and is weakened by tax exemptions and preferential tax rates, while public spending 
is  burdened  by  category-based  specific  transfers,  leaving  little  space  to  target  poverty  and 
employment  policies.  The  recurrent  under-execution  of  capital  investment  hinders  the 
enhancement of production base. 

Functioning of product markets 

Business environment 

The  gap  between  newly  registered  and  terminated  firms  increased  in  2020  due  to  the 
slowdown  in  business  closures.  The  total  number  of  new  businesses  in  2020  was  9  805, 
which  marks  a  decrease  of  2%  compared  to  2019  (10  004  registered  new  businesses).  The 
number  of  closed  businesses  in  2020  was  1,326,  a  decline  of  25%  compared  to  the  same 
period of the previous year (1 769). The gap was especially large in the second quarter when 
Kosovo had a lockdown. 

Due to pandemic-induced challenges little progress has been achieved in improving the 
business  environment.  The  general  inspection  reform  aiming  to  reduce  the  number  of 
overlapping  and  parallel  inspections  from  36  to  15  has  stalled  in  2020,  but  the  new 
government  is  committed  to  complete  the  process.  Within  the  Administrative  Burden 
Reduction  Programme,  aiming  to  achieve  30%  reduction  of  the  administrative  burden  over 
the next eight  years, Kosovo initiated a baseline measurement identifying all administrative 
burdens on businesses. The structural reorganisation of the Kosovo Investment and Enterprise 
Support  Agency  (KIESA),  whose  task  is  to  help  businesses  and  investors,  remains  behind 
schedule. The lack of a coherent policy for industry development throughout the supply chain 
undermines the competitiveness of SMEs. 

55 

 
 
Despite measures aimed at fighting the informal economy, it still accounts for more than 
30%  of  GDP.5  There  was  some  success  in  tackling  informality  and  improving  voluntary 
compliance, as the number of registered workers increased in the construction sector due to 
financial incentives, included in the first emergency package, to join formal employment. 

State influence on product markets 

Kosovo’s  state  aid  policy  framework  is  at  an early  stage  and  needs  to  be  aligned with 
EU  rules  and  principles.  Kosovo  lacks  a  coherent  approach  to  state  aid  as  well  as  a 
comprehensive  strategy  and  cost-benefit  evaluations  for  aid  and  subsidies  granted.  The 
authorities have established an inventory of aid schemes, as provided in the Stabilisation and 
Association Agreement (SAA), but their alignment with the existing legislation on state aid is 
at  an  early  stage.  In  September  2020,  the  State  Aid  Commission  (SAC)  initiated  an 
assessment of the financial assistance package approved by the government in response to the 
COVID-19 outbreak. While state aid to public and private companies increased, its allocation 
is  not  always  well  targeted,  e.g.  the  distribution  of  EUR  60  million  to  all  active  private 
businesses or the suspension of mining royalty for five months in 2021. The SAC currently 
consists of three members instead of five that might affect its ability to function and carry out 
decision in a timely manner.  

Privatisation and restructuring 

Privatisation  of  socially-owned  enterprises6  (SOEs)  is  advancing  very  slowly.  Due  to 
frequent  government  changes  and  their  decisions  to  suspend  and  subsequently  resume  all 
activities  related  to  privatisation/liquidation  proceedings,  in  2020  the  Kosovo  Privatisation 
Agency (PAK) sold only 93 SOE assets in the value of around EUR 8 million, compared to 
222 sold assets in 2019, in the value of EUR 32 million. There is a lack of transparency in 
SOE financial  reporting  and recruitment.  During  2020, 36 of 589 SOEs have been put  into 
liquidation,  while  only  one  liquidation  proceeding  dated  from  2014  was  concluded. 
Historically,  most  POEs  have  underperformed  financially  –  a  situation  that  was  further 
deteriorated by the COVID-19 crisis. During the reporting period, both the Hoti government 
and  the  Kurti  government  took  decisions  to  dismiss  several  boards  of  Publicly  Owned 
Enterprises  (POEs)  due  to  poor  performance  and  replace  them  with  temporary  boards. 
Furthermore, in May 2021 the Assembly dismissed the board of PAK: new board members 
were elected in August 2021. The board’s tasks will be centred on auditing the privatisation 
undertakings of former PAK boards. The government has announced its plan to dissolve the 
agency  and  replace  it  by  a  sovereign  fund,  which  would  be  responsible  for  investments 
aiming to increase the value of strategic POEs such as mining company Trepca and Post and 
Telecom of Kosovo, among others. 

Functioning of the financial market 

Financial stability 

Supported by regulatory measures, the financial sector continued to expand in 2020 and 
the  first  half  of  2021  while  maintaining  adequate  capitalisation  and  liquidity  buffers. 
The  predominantly  foreign-owned  banking  sector  accounts  for  67.9%  of  financial  system 
assets, followed by pension funds, insurance and microfinance institutions with 25.3%, 2.8% 
and 4%, respectively.  In response to the crisis, the Central Bank of Kosovo (CBK) allowed 
for  a  3-months  loan  repayment  moratorium  in  spring  2020  and  loan  restructurings  of  up  to 
one  year in  June-September 2021.  In February 2021, the CBK issued a third guide on loan 

5 IMF 2020 Article 4 consultation. 
6 The ownership of socially-owned enterprises was considered as shared social property in former Yugoslavia.  

56 

 
 
                                                           
restructuring  which  remained  open  until  the  end  of  March  2021.  The  CBK  also  applied 
regulatory  forbearance  on  loan  loss  provisions  and  capital  requirements  on  reprogrammed 
loans.  These  measures  helped  contain  the  impact  of  the  crisis  on  the  banking  sector  and 
supported credit growth in 2020, but there might be lagged effects on asset quality once the 
measures  expire.  While  declining  from  18.9%  in  2019,  banking  sector’s  return  on  average 
equity (RAE) remained high at 14% in 2020, and increased to 20% in mid-2021. Profitability 
increased  in  the  insurance  sector,  while  it  dropped  sharply  for  micro-financial  institutions, 
mainly due to  the impact  of the pandemic.  The  ratio of bank non-performing loans (NPLs) 
registered only a small increase to 2.6% in mid-2021 from 2% in 2019, as the deteriorating 
economic situation was mitigated by the CBK measures on reclassification of loans, but the 
NPLs  might  rise  as  the  regulatory  flexibility  is  gradually  phased  out.  The  ratio  of  banks’ 
regulatory  capital  to  risk-weighted  assets  stood  at  some  17%  in  mid-2021,  comfortably 
exceeding  the  regulatory  minimum  of  12%.  Banks  continued  to  be  financed  by  deposits, 
predominantly from households. The loan-to-deposit ratio declined to  74.5  % in  2020 from 
77.6 % a year earlier, as deposit growth (11.5 %) outpaced the expansion of loans (7.1 %). 
High  deposit  growth  was  supported  by  the  one-off  stimulus  measure  of  allowing  the  10% 
withdrawal  of  pension  savings  from  the  KPST,  a  stable  inflow  of  remittances  and 
precautionary savings. Credit growth accelerated in 2021 and by mid-year the loan-to-deposit 
ratio increased to 77%. 

Access to finance 

Financial  intermediation  has  continued  expanding  from  a  low  base.  Despite  the 
pandemic, bank lending increased by 7.1% in 2020, while in April-June 2021 it accelerated to 
over  10  %  year-on-year.  Loan  growth  was  facilitated  by  low  interest  rates,  a  continued 
increase  of  deposits,  improved  contract  enforcement,  and  increased  guarantees  extended  by 
the  Kosovo  Credit  Guarantee  Fund  (KCGF)  for  lending  to  micro,  small  and  medium-size 
enterprises  to  cushion  the  impact  of  the  crisis.  Lending  to  both  firms  and  households 
continued  to  grow,  by  7.2%  and  7.1%,  respectively.  The  average  interest  rate  spread 
increased slightly to 4.7 pps in June 2021 from 4.4 pps in late 2019, suggesting more cautious 
bank  behaviour.  The  amount  of  credit  compared  to  the  size  of  the  economy  remained 
moderate  even  by  Western  Balkan  standards,  at  around  40%.  The  lack  of  easily  accessible 
and  affordable  credit  serves  as  a  barrier  to  the  growth  of  SMEs.  This  is  partly  due  to  the 
existing  disparity  between  the  market  value  of  collaterals  and  their  legally  assigned  value 
taken  into  account  by  banks.  The  Kosovo’s  capital  market  remains  at  an  early  stage  of 
development. The main activities remain in the government securities market, auctioned and 
recorded by the CBK. A first-ever ‘diaspora bond’ issuance was made during the summer of 
2021 through commercial banks in collaboration with the ministry of finance. Targeting the 
Kosovo  diaspora  abroad,  this  issuance  managed  to  raise  EUR  10  million  of  the  EUR  20 
million initially offered. 

Functioning of the labour market 

The economic downturn resulted in a fall in employment and a shrinking labour force. 
The  labour  market  situation,  which  had  been  a  concern  already  before  the  outbreak  of 
COVID-19,  deteriorated  further  in  2020.  While  the  unemployment  rate  (15-64)  rose  only 
slightly  to  25.9%  in  2020  from  25.7%  in  2019,  employment  and  labour  force  participation 
rates  declined  to  28.4  %  and  38.3  %  from  30.1  %  and  40.5  %  respectively  over  the  same 
period.  The  wide  gap  between  male  and  female  employment  rates  (42.8%  and  14.1% 
respectively) narrowed slightly due to a fall in male employment (down from 46.2% in 2019). 
While  the  impact  of  the  pandemic  was  more  pronounced  in  the  manufacturing  and  trade 
sectors,  employment  in  the  construction  sector  held  up  rather  well  despite  contraction  in 

57 

 
 
output,  due  to  the  financial  incentives,  included  in  the  emergency  package,  to  join  formal 
employment. Very high rates of inactivity (61.7 %), in particular for women (79.2%), and an 
alarming  rate  of  youth  unemployment  (49.1%  for  the  age  group  15-24)  persisted,  implying 
structural problems such as undeclared work and misalignment between education outcomes 
and  labour  market  needs.  The  share  of  young  people  not  in  employment,  education  or 
training  aged  15-24,  increased  somewhat  to  33.6%  in  2020.  Active  labour  market  policies, 
pre-qualification schemes and vocational training programmes remain inadequate to labour 
market  needs.  Kosovo  endorsed  the  Western  Balkans  Declaration  on  ensuring  sustainable 
labour  market  integration  of  young  people  in  the  summer  of  2021,  and  committed  to 
gradually establish and implement the Youth Guarantee scheme. 

join 

formal 

the  pandemic,  an 
Even  before 
inadequate 
social 
of 
system 
assistance was creating disincentives 
to 
employment. 
Unemployed  people  do  not  have 
social 
the 
social assistance scheme has a limited 
coverage  due  to  restrictive  eligibility 
criteria.  Moreover,  category-based 
transfers,  e.g.  war  veteran 
social 
pension 
the 
soundness  and  fairness  of  the  social 
benefit system and motivates other specific groups to request similarly generous allowances. 
In  2020,  the  spending  on  transfers  and  subsidies  exceeded  12%  of  GDP  while  within  this 
amount  payments  on  social  assistance  was  less  than  1%.  Relatively  high  public  wages  and 
remittances  increase the  reservation wage and hamper private-sector employment. The lack 
of childcare and elderly care facilities hinders female employment. 

insurance  rights,  while 

scheme,  undermines 

2.3.2.  The  capacity  to  cope  with  competitive  pressure  and  market  forces  within  the 
Union 

Kosovo has made limited progress and is at an early stage in terms of capacity to cope with 
competitive pressure and market forces in the EU. Little progress was made on improving the 
quality  of  education  and  addressing  skill  gaps  in  the  labour  market.  Kosovo  made  some 
progress  in  improving  road  infrastructure  and  increasing  investment  in  renewables,  but  the 
coal-based,  outdated  and  unreliable  energy  supply  remains  a  concern.  Kosovo  made  some 
progress as regards the digitalisation of the economy. Structural  changes are emerging only 
slowly  as  the  economy  remains  highly  reliant  on  small  and  very  small  firms  which  cannot 
compete  internationally,  while  the  export  structure  remains  dominated  by  a  few  products, 
such  as  base  metals.  The  recommendations  from  2020  were  not  fully  implemented  and 
remain valid.  

In  order  to  support  the  economic  recovery,  improve  competitiveness  and  sustain  long-term 
growth, Kosovo should in particular:  

 

 

 

 

improve  the  quality  of  vocational  training  and  education  at  all  levels  and  align  the 
curricula with labour market needs; 

increase energy efficiency incentives in the residential and private sectors; 

increase the share of renewables in power generation in a cost-efficient way;  

advance  tailored  financial  and  non-financial  support  for  SMEs  to  improve    their 

58 

 
 
competitiveness and export capacity. 

Education and innovation 

Little progress has been achieved in reforming the education system. Public spending on 
education  stood  unchanged  at  4.7%  of  GDP  in  2020,  which  is  comparable  to  the  EU-27 
average,  but  given  Kosovo’s  young  population,  the  spending  per  student  is  insufficient, 
focusing  mainly  on  remuneration  of  teachers.  Moreover,  schools  lack  educational  material, 
while the selection of teachers suffers from political influence. The new Law on Textbooks 
and  Educational  Material,  aiming  to  improve  the  quality  of  learning  material,  is  still  in  the 
process  of  preparation.  The  enrolment  of  children  in  primary,  lower  and  upper  secondary 
education is universal, but a participation of children in early school education and care (3-5 
years) is still quite low. Despite some progress achieved with the participation rate increasing 
to  38.1% in 2020 from 30.9% in  2016, it  is still far below the EU average of over 80%. A 
persistent  problem  remains  due  to  the  urban-rural  divide,  extreme  poverty  and  a  lack  of 
educational  facilities.  Following  the  expulsion  from  the  European  Association  for  Quality 
Assurance  in  Higher  Education,  Kosovo  Accreditation  Agency  (KAA)  continued  efforts  to 
regain membership. A new KAA board was appointed in June 2021, following a competitive 
process.  The  draft  law  on  KAA  has  not  been  approved  due  to  political  situation  in  2020, 
which has a negative impact on the independence of the agency.  

Little  progress  has  been  achieved  in  improving  Kosovo’s  research,  development  and 
innovation system. Public research spending remained very low at 0.1% of GDP, and there 
is a lack of strategic approach on promoting research activities. In November 2020, Kosovo 
joined  the  GÉANT  research  network,  which  is  Europe’s  leading  collaboration  on  network 
and e-infrastructure services. 

Physical capital and quality of infrastructure 

Kosovo  is  making  significant  investments  in  road  and  railway  infrastructure.  The 
preparatory work on route 7 has been completed, and two segments of the “Peace Highway” 
part  of  route  7  received  financing  from  the  EU,  EIB,  WBIF  and  EBRD,  as  part  of  the  EU 
Connectivity Agenda. The Railway Route 10 rehabilitation works, aimed at linking Kosovo 
with  the wider European railway network continued at  a slow pace, and  are  expected to  be 
completed  between  late  2021  and  2023,  with  the  signalling  and  telecom  project  beginning 
late 2021 until 2025. While Kosovo achieved a significant decline in road fatalities (53.7%) 
in 2010-2020, the transport system still faces a number of challenges in terms of road safety, 
inadequate road maintenance, and weak administrative capacity of regulatory institutions. 

Despite  some  progress  on  renewables,  the  unreliable  and  health-hazardous  energy 
supply, which  mainly  relies  on  coal,  remains  a  concern.  The  bulk  of  power  supply  (880 
MW)  is  produced  by  two  highly  polluting  lignite  power  plants  which  the  new  government 
plans to  upgrade.  The new  government  does not intend to  proceed with  the construction of 
Kosova  e  Re.  In  2020  Kosovo  has  achieved  its  target  share  of  energy  from  renewable 
sources, which rose to 25.7% in gross final energy consumption. By the end of 2020, Kosovo 
registered  a  total  of  139  MW  of  renewable  energy  capacity,  out  of  which  95  MW  of 
hydropower,  34  MW  of  wind  and  10  MW  of  solar.  Compared  to  2019,  the  increase  came 
entirely  due  to  an  additional  19  MW  of  hydropower,  which  in  some  cases  implied 
environmental costs.  

Further  options  are  explored  in  order  to  diversify  energy  supply.  The  development  of 
natural gas infrastructure is still to be determined in the upcoming Kosovo’s Energy Strategy, 
currently  still  being  drafted  along  with  the  National  Energy  and  Climate  Plan  (NECP). 
Preparatory  work  is  continuing  for  the  connection  and  expansion  of  the  Trans-Adriatic  gas 

59 

 
 
pipeline.  Assessment  of  the  interconnection  between  Kosovo  and  Albania  has  been  already 
completed,  while  a  pre-feasibility  study  for  the  Kosovo-North  Macedonia  pipeline  is  still 
ongoing.  Both  projects  have  the  potential  to  assist  in  the  diversification  of  energy  sources 
away from coal, as well as in energy-grid stability. Kosovo achieved an important objective 
with the entry into force of the new Connection Agreement between the Kosovo transmission 
system operator (KOSTT) and the European Network of Transmission Systems Operators for 
electricity  (ENTSO-E),  which  allowed  for  the  operationalisation  of  the  interconnection  line 
between Kosovo and Albania, and the formation of the Control Area within Albania-Kosovo 
Control Bloc (Control Block AK). Following the appointment of the boards of directors, the 
Energy Efficiency (EE) fund became operational. Some progress was made in extending EE 
support  schemes  in  private  and  public  buildings,  but  most  of  EE  investment  is  done  by 
international donors. The distribution network still suffers from high losses. 

The digitalisation of the economy is progressing. After achieving the mid-term targets of 
its 2013-2020 digital agenda, with the penetration of fixed broadband internet exceeding 90% 
and  the  number  of  mobile  phone  users  standing  at  115.7%  of  the  population,  Kosovo  is 
preparing  a  new  strategy  for  2021-2030.  Since  2018,  the  implemention  of  a  5-year  project, 
aiming  to  bridge  the  urban-rural  digital  infrastructure  divide,  and  investing  in  the  remote 
areas which are not attractive for private investors, is continuing.  

Sectoral and enterprise structure 

The hospitality and construction sectors were the hardest hit by the pandemic. Based on 
quarterly  data,  annual  output  in  the  hospitality  and  construction  is  estimated  to  have 
contracted  by  more  than  20%  in  2020,  while  manufacturing  held  up  well  (around  10% 
increase). More general medium-term problems, such as informal economy, lack of access to 
finance, insufficient implementation of standards in products, labour skills mismatch, lack of 
access to information and export opportunities, persisted.  

Kosovo’s private sector is dominated by  small firms with difficult access to affordable 
finance. Due to delay in legislative approval, the increase of additional guarantees for SME 
loans  via  the  KCGF  has  become  operational  only  in  January  2021.  Guarantee  windows, 
totalling  EUR  40  million,  focus  on  lending  support  to  the  manufacturing,  agribusiness, 
services,  trade  sectors,  with  a  particular  focus  on  women  in  business  and  start-ups.  The 
KCGF  signed  the  guarantee  agreements  with  its  partner  financial  institutions  for  the 
guarantee  windows  within  Economic  Recovery  Package,  which  envisage  increasing  the 
coverage  with  a  credit  guarantee  of  up  to  80%  of  the  loan  value  and  ensures  a  more 
transparent process considering that its implementation relies on market mechanisms, i.e. the 
commercial banks’ assessments on which businesses to support. Kosovo lacks an export risk 
insurance and finance institution to  help promote exports and support market access.  

Economic integration with the EU and price competitiveness 

60 

0204060201220132014201520162017201820192020Graph : Kosovo -Exports of goodsEUCEFTAOtherSource: WiiW% ofGDP0204060201220132014201520162017201820192020Graph : Kosovo -Imports of goodsEUCEFTAOtherSource: WiiW% ofGDP 
 
 
The  balance  of  goods  trade  has  slightly  improved.  Robust  performance  of  base  metals 
supported export growth while imports of goods declined in line with contracting economic 
activity.  The  merchandise  deficit  narrowed  to  38.8%  of  GDP  from  40.2%  in  2020,  but 
Kosovo’s export structure remains dominated by base metals, which account for about 36.9% 
of goods exports. In 2020, the EU accounted for more than 45% of the total imports of goods. 
CEFTA’s share increased to 18.7%, as Kosovo abandoned the 100% import tariffs on goods 
originating from Serbia and Bosnia and Herzegovina. The share of goods exports to the EU 
and CEFTA rose slightly to 34.4% and 44.4%, respectively.  

The  EU  remains  the  main  investor  in  Kosovo.  Net  FDI  inflows  are  estimated  to  have 
increased by 34% in 2020, on the back of lower profit repatriation in the financial sector and 
a  drop  in  outward  FDI.  The  shares  of  Germany  and  Switzerland  (two  countries  with  large 
diasporas from Kosovo) increased from the previous year to over 13% of net FDI stock each, 
while the overall share of the EU stood at 36%.  

Due  to  severe  contraction  of  service  exports,  trade  openness  dropped  significantly  in 
2020.  Although  Kosovo  preserved  trade-friendly  regulations,  overall  trade  openness  fell  by 
10  percentage  points  in  2020  to  75.6%  of  GDP.  This  is  mainly  due  to  the  severe  export 
contraction,  driven  by  tourism  services  to  the  diaspora,  which  fell  to  21.6%  of  GDP  from 
29% in 2019. The imports-to-GDP ratio declined less dramatically from 56% to 54% of GDP 
over the same period.  

2.4. PUBLIC PROCUREMENT, STATISTICS, FINANCIAL CONTROL  

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. 

Kosovo has some level of preparation/is moderately prepared in public procurement. There 
was  some  progress  during  the  reporting  period.  Transparency  of  public  procurement  has 
further  increased  with  the  addition  of  two  new  e-procurement  modules  and  improved 
monitoring  of  contract  implementation.  Enhanced  coordination  and  information  exchange 
between  the  Procurement  Review  Body  (PRB)  and  the  Public  Procurement  Regulatory 
Commission  (PPRC)  is  positive  and  should  be  further  enhanced  with  other  relevant 
stakeholders. However, public procurement remains prone to irregularities and vulnerable to 
corruption  during 
implementation.  As  most 
recommendations from the previous report remain valid, in the coming year Kosovo should 
in particular:  

the  procurement  process  and  contract 

  adopt  a  public  procurement  law  in  line  with  the  EU  acquis  on  public  procurement, 

including concessions, and ensure its proper implementation;  

  increase the capacity of all public procurement institutions and the cooperation between 
them  to  ensure  consistent  implementation  of  the  public  procurement  regulatory 
framework;  

  ensure  that  the  PRB  is  fully  operational,  independent  and  professional,  and  that  staff 

capacity limitations are addressed. 

Institutional set-up and legal alignment  

Kosovo's  legal  framework  on  public  procurement  is  partly  aligned  with  the  2014  EU 
Directives on classical and utility procurement. Legislation adopted on defence and security 
procurement remains partially aligned with the EU acquis.  

61 

 
 
During  the  reporting  period,  Kosovo  took  some  steps  to  bring  the  legal  framework  further 
into line with the EU acquis and adopted a concept document for a new public procurement 
law  addressing  the  remaining  gaps  in  the  areas  of  e-procurement.  However,  the  authorities 
have  not  started  to  prepare  any  relevant  implementing  legislation  and  guidelines  for 
contracting  authorities.  This  includes  legislation  on  procurement  plans  and  their  pre-
approvals at commitment stage. In October 2020, the government issued a decision repealing 
exceptions  from  the  application  of  the  public  procurement  law,  which  had  been  previously 
granted, including to Kosovo Telecom. 

Kosovo's public procurement strategy (2017-2021) and action plan (2020-2021) are coming 
to  an  end  and  an  assessment  of  their  implementation  is  still  pending.  A  new  public 
procurement  strategy  and  action  plan  will  be  incorporated  into  the  new  Public  Finance 
Management Reform Strategy 2022–2026.  

The  Central  Procurement  Agency  (CPA),  under  the  Ministry  of  Finance,  Labour  and 
Transfers,  is  in  charge  of  coordinating  centralised  purchases.  The  Public  Procurement 
Regulatory Commission (PPRC) is responsible for the overall coordination and supervision 
of  the  public  procurement  system.  The  Procurement  Review  Body  (PRB)  examines  all 
allegations of breaches to the public procurement law and reviews bidders’ complaints. Since 
October  2020,  the  Procurement  Review  Body  and  the  Public  Procurement  Regulatory 
Commission  held  regular  meetings  to  address  specific  procurement-related  issues,  ensure 
coordination of actions and joint  policy development. To increase transparency, the Body’s 
decisions  are  published  on  its  official  website  and  sessions  are  broadcasted  live  on  its 
website.  Other  relevant  stakeholders,  such  as  the  Kosovo  Competition  Authority  should 
develop cooperation with the PPRC, the PRB and the CPA to advocate fair competition. On 
enforcement, inter-institutional coordination, also with the State Audit Office, is relevant to 
detect any bid rigging and reduce its risks through careful design of the tenders.  

Implementation and enforcement capacity 

Kosovo's  public  procurement  market  was  estimated  at  7.5%  of  GDP  in  2020  (based  on 
preliminary data), compared to 10.7% in 2019. End of 2020, approximately 9 576 (6 000 in 
2019) economic operators and around 25 000 (10 000 in 2019) active users were registered in 
the  e-procurement  system.  In  2020,  a  total  of  10  935  public  contracts  have  been  signed 
compared  to  12  412  in  2019.    Due  to  the  pandemic,  a  significant  amount  of  public 
procurement activities, 10.4%, have been carried out via negotiated procedure during 2020.  

On monitoring of contract awards and implementation, 86.2% of contracts were awarded 
through open procedure in 2020. 99.02% of public contracts were awarded according to the 
lowest-price criterion with only 0.98% using the best-price-quality ratio in line with the EU 
Directive on public procurement. Two new e-procurement modules have been introduced to 
evaluate  contractors’  performance  and  monitor  contract  implementation.  Additional  efforts 
are  needed  to  ensure  the  interoperability  between  the  e-procurement  system  and  other 
relevant government IT systems, including from Treasury. The exchange of data between the 
e-procurement  and  the  treasury  system  will  allow  the  tracking  of  payments  for  ongoing 
contracts.  

The  capacity  to  manage  public  procurement  processes  varies  between  contracting 
authorities. The tender evaluation process, market research, and in particular implementation 
and  monitoring  of  contracts  need  to  improve.  Poorly  drafted  technical  specifications  can 
undermine the quality, efficiency and transparency of procurement. The PPRC in cooperation 
with  the Kosovo  Institute for Public Administration  has organised training  for procurement 
officers to address this issue. A careful design of tenders can reduce the risks of bid rigging. 

62 

 
 
Limited  enforcement  with  insufficient  managerial  accountability  and  quality  control 
throughout  the  public  procurement  cycle  combined  with  limited  contract  management 
capacity, risks mismanagement and corruption.  

Centralised  procurement  is  mandatory  for  agencies  with  fewer  than  50  employees  and  14 
listed  categories  of  goods  and  services.  16  out  of  165  contracting  authorities,  that  are 
accountable to the Assembly, have to procure through the CPA. The Agency continues to be 
understaffed  and  lags  behind  in  implementation.  The  use  of  negotiated  procurement 
procedures has increased significantly due to the COVID-19 pandemic. In 2020, contracts for 
a  total  amount  of  EUR  56.8  million  were  concluded  using  this  accelerated  procedure.  To 
mitigate the risks of misuse and fraud, it is especially important to ensure solid justification, 
maintain audit trails and full transparency. 

In 2020, the backlog of complaint cases before the PRB increased. The institution needs more 
qualified staff, especially review experts and legal officials. Its decision-making lacks quality 
and consistency.  

The  current  legislation  on  economic  recovery,  which  is  due  to  expire  end  of  2021,  had 
introduced  the  preferential  treatment  to  local  producers  and  local  services  in  public 
procurement, granting an advantage to those bids over others.   

There  were  no  developments  as  regards  integrity  and  conflicts  of  interest.  Accountability 
among  the  public  procurement  officers  is  often  lacking.  Kosovo  has  a  code  of  ethics  for 
public  procurement  but  compliance  is  not  monitored.  Most  contracting  authorities  do  not 
fulfil their legal obligation to publish public procurement plans. Further efforts are underway 
to  strengthen  local  government  procurement  systems  and  audit  oversight  and  an  increasing 
number of municipalities are publishing procurement contracts.  

Efficient remedy system  

The legislation on the right to legal remedy is broadly in line with the EU acquis. The PRB is 
a  quasi-judicial  body  reviewing  complaints  from  bidders.  The  remedy  system  in  Kosovo  is 
mainly used by economic operators, which is an indicator for easy access.  

During  the  reporting  period,  the  Body  has  received  1,184  complaints  from  economic 
operators,  an  increase  compared  to  2019  (981  complaints).  This  continued  to  exert  a 
significant  strain  on  the  capacity  of  its  board,  which  remains  impaired,  as  two  of  the  five 
members are not appointed, while the mandates of the remaining members expired in March 
2021.  The  government  appointed  a  selection  committee  for  the  recommendation  of 
candidates  for  the  PRB  Board.  The  selection  process  and  further  appointment  by  the 
Assembly needs to urgently advance in order to address the increasing backlog of cases at the 
PRB.  

Statistics 

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

Kosovo has some level  of preparation  in  the area of statistics.  Some  progress  was made, 
notably  in  improving  data  collection  methodology  and  data  transmission  to  Eurostat. 
Kosovo’s  Agency  for  Statistics  needs 
the 
to 
recommendations  of  the  Eurostat  peer  review.  Communication  between  the  statistical 
institutions has somewhat improved but the coordination at the technical level and the use of 
available  administrative  data  sources  has  not  notably  improved  since  last  year.  During  the 

its  efforts 

implement 

intensify 

to 

63 

 
 
reporting period, there has been little improvement in the alignment of sectorial statistics with 
European  standards  or  the  provision  of  new  statistical  products.  The  planned  population 
census was not conducted and has been postponed until the spring of 2022.   

Following  on  last  year’s  not  implemented  recommendations,  in  the  coming  year,  Kosovo 
should in particular: 

 increase the number of statistical products and their transmission to Eurostat;  

  improve  statistical  governance  and  coordination  between  the  main  statistical  institutions 
and ensure better access to and use of available administrative data sources;   

 improve contacts and relations with external data users; 

  intensify  preparations  for  the  next  population  census  in  2022  by  ensuring  adequate 
resources and full coverage of the territory.  

On  statistical  infrastructure,  the  legal  framework  is  broadly  in  line  with  the  European 
statistics  Code  of  Practice;  however  its  implementation  needs  to  be  enforced  by  preserving 
the  lead  role  of  the  Kosovo  Agency  for  Statistics,  improving  statistical  governance  and 
coordination between main statistical institutions and ensuring better access to administrative 
data sources. The Agency needs to intensify the implementation of the Eurostat peer review 
recommendations  particularly  by  increasing  its  cost-effectiveness,  strengthening  quality 
management and relations with data users. During the reported period, the agency has not had 
any  increase  in  the  number  of  staff,  however  efficient  internal  systems,  processes  and 
delegated  management  remain  a  challenge  and  should  be  enhanced.  The  current  Agency 
premises remain inadequate. Data transmission to Eurostat continues to improve, but needs 
to improve further. Despite improvements with its web-based dissemination of statistics, the 
Agency  needs  to  strengthen  its  active  relations  with  data  users  and  academia.  Kosovo 
continues to use the European classification of economic activities (NACE Rev.2) but has not 
improved  in  the  use  of  other  European  classifications.  Likewise  the  existing  registers 
(agriculture, business and schools/education) are updated regularly but the population register 
still  needs  significant  improvements  in  order  to  provide  adequate  basis  for  census  related 
activities. 

On macroeconomic statistics, Kosovo has made some slight improvements from last year; 
further  alignment  with  the  European  System  of  Accounts  2010  is  ongoing.  The  Agency 
compiles annual and quarterly national accounts and has managed to shorten the production 
period,  however  methodological  inconsistencies  need  to  be  addressed.  Annual  and  quarter 
sector  accounts,  supply/use  tables  and  the  regional  accounts  are  not  regularly  compiled. 
Fiscal  notifications  are  not  yet  available.  The  number  of  ESA  2010  transmission  tables  to 
Eurostat has seen some improvements during the reported period. Monthly statistics for trade 
in  goods  are  submitted  to  Eurostat.  Balance  of  payments  data  are  compiled  by  the  Central 
Bank and are broadly in line with the EU acquis; annual and quarterly data are submitted to 
Eurostat.  Government  finance  statistics  are  published  quarterly.  The  Harmonised  Index  of 
Consumer Prices is published based on EU Standards (ECOICOP classification). 

Structural business statistics and some short-term statistics are partially in line with the EU 
acquis  however  their  availability  is  limited  and  they  lack  distinction  between  public  and 
private  investments  or  by  sectors.  Industry  statistics  are  produced  broadly  in  line  with  the 
relevant  regulation; KAS has for the  first  time published services sector statistics  (covering 
the  period  Q1  2018-Q4  2020)  in  March  2021.  Construction  sector  statistics  are  largely  not 
available; only the construction cost index is produced on a quarterly basis (Q4 2020 statistics 

64 

 
 
published in March 2021). Industry statistics (PRODCOM survey) for the year 2019 has not 
been  published  (the  last  one  remains  the  one  from  year  2018).  Foreign  Affiliates  Statistics 
(FATS) are not available. Tourism statistics and transport statistics are still not aligned with 
the EU acquis, while statistics on development and innovation are not produced on a regular 
basis.  The  information  and  communication  technologies  (ICT)  statistics  for  households 
started  in  2018  and  is  now  regularly  being  published  (the  results  for  2020  have  been 
published in December 2020) whereas the ICT statistics for enterprises were collected for the 
reference  year  of  2019  and  results  have  been  published  in  December  2020  but  due  to 
technical problems not transmitted to Eurostat. 

In  the  area  of  social  statistics,  only  demographic  statistics  are  broadly  in  line  with  the  EU 
acquis.  The  preparations  for  the  forthcoming  population  census  2021  has  been  affected  by 
covid-19 pandemics and political instability; KAS conducted pilot census during the autumn 
of 2021 but was not able to follow with the general census which has been postponed to the 
spring of 2022. The new Government should allocated adequate funds in order to ensure that 
the general census can be conducted in its entire territory as planned in April 2022. Statistics 
on Income and Living Conditions (regular EU-SILC Survey) are produced annually; the one 
for  year  2018  was  published  in  August  2020,  whereas  the  one  for  2019  is  expected  to  be 
published  during  the  current  year.  Social  protection  and  labour  market  statistics  are  only 
partially produced. An annual and quarterly labour force survey is carried out regularly and 
its publication timeframe has improved. The labour cost index, structure of earnings data and 
job vacancy statistics are still not produced. Education statistics are partially produced but are 
still not classified according to international education classification standards (ISCED 2011). 
Public health and crime statistics are not  yet in line with EU standards. Vocational training 
statistics are still not produced. 

For agricultural statistics, the Agency published data on annual agricultural crops, livestock 
production and orchard statistics. The agricultural holding survey is regularly produced and 
aligned with acquis standards. The last farm structure survey was conducted in 2014 and the 
new  one  is  not  planned  until  2023.  Agricultural  price  indices  and  economic  accounts  for 
agriculture are produced on a regular basis. Supply balance sheets and the agriculture labour 
index are not yet produced on regular basis. 

Energy and environment statistics are partially in line with the acquis. During the reporting 
period,  the  Agency  shortened  the  deadlines  for  publishing  energy  balance  results  and  has 
increased  the  number  of  statistical  products  sent  to  Eurostat,  but  further  improvements  are 
needed  in  this  field.  Energy  consumption  statistics  for  residential,  services  and  transport 
sectors are collected but the results are not published regularly. Monthly data and the monthly 
share  of  renewables  are  not  provided  to  Eurostat.  The  lack  of  energy  efficiency  indicators 
continues  to  be  an  obstacle  to  reporting  on  energy  savings.  Waste  and  water  statistics  are 
produced  regularly.  Greenhouse  gas  emission  statistics  are  being  collected  but  the 
information  is  not  published  regularly.  Other  environmental  statistics  such  as  air  emissions 
accounts,  environmentally  related  taxes  by  economic  activity,  environmental  protection 
expenditure and material flow balances are not yet produced.     

Financial control 

The  EU  promotes  the  reform  of  Kosovo  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.  

65 

 
 
Kosovo has some level of preparation in the area of financial control. Some progress was 
made  on  addressing  remaining  gaps  in  the  implementation  of  primary  and  secondary 
legislation on public internal financial control.  

High level political support is needed for the implementation of appropriate internal controls 
at all levels of the administration. The functioning of internal control and audit and the timely 
implementation of internal and external audit recommendations needs to be strengthened. In 
the coming year, Kosovo should in particular:  

  integrate all elements of the PIFC strategy in the new public finance management strategy 

2022-2026, and finalise the corresponding PIFC Action Plan; 

  improve  accountability  by  aligning  special  laws  with  the  overarching  Law  on  the 
organisation  and  functioning  of  the  state  administration  and  independent  agencies,  and 
clarify the accountability lines within and between public institutions; 

  improve more systematic and timely implementation of external audit recommendations, 
especially with regard to performance audits that have been undertaken in recent years. 

Public internal financial control 
The  strategic  framework  for  public  internal  financial  control  (PIFC)  is  generally  in  place 
but  needs to  be updated. The PIFC Strategy  expired at  the end of December 2019. Kosovo 
needs to  integrate  all elements of the PIFC strategy in the new public  finance management 
strategy  2022-2026,  which  are  expected  to  be  rolled  out  from  September  2021,  focusing  in 
particular on definition and implementation of managerial accountability. Kosovo also needs 
to finalise the corresponding action plan to have a stronger connection between the strategic 
and  operational  objectives  and  needs  to  include  indicators  that  measure  not  only 
administrative but also managerial accountability.  

Kosovo  needs  to  include  managerial  accountability  in  an  articulated  manner  within  its 
administrative culture at central and local level. The Regulation on financial management and 
control  spelled  out  the  rules  for  delegating  responsibilities.  However,  in  practice  its 
implementation  is  incomplete  and  managerial  accountability  is  focusing  mainly  on 
compliance  rather  than  performance.  The  Law  on  the  organisation  and  functioning  of  the 
administration  and  independent  agencies  adopted  in  2019  has  clarified  the  lines  of 
accountability within and between institutions and agencies. It now needs to be implemented 
to allow decentralised delegation of authorities and responsibilities. There is no progress on 
rationalising  agencies,  with  the  aim  of  reducing  the  high  number  of  (semi-)  independent 
agencies  and  introducing  better  supervision  and  reporting  lines.  (See  section  on  Public 
Administration Reform).  

While  the  legal  framework  on  internal  control  is  largely  harmonised  with  international 
standards,  the  financial  control  manual  was  updated  in  2020,  Kosovo  now  needs  to  further 
revise  its  internal  control  functions  in  line  with  the  Commission  of  Sponsoring 
Organizations of the Treadway Commission (COSO) principles. The financial control manual 
is expected to be updated once more by the end of September 2021. Risk management needs 
to  be  included  into  management  and  governance  processes  and  reinforced.  A  risk-based 
approach to the selection of cases for controls is under preparation.   

The administrative capacities of internal audit units at central and local level are still limited 
and  the  internal  audit  practice  concentrates  mainly  on  observing  rules  and  procedures.. 
Challenges remain with the effective establishment of internal audit committees in all budget 
organisations,  including  at  municipal  level.  Most  internal  audit  units  submit  strategic  and 
annual audit plans as required, but quality assurance should be further implemented.  

66 

 
 
The Central Harmonisation Unit (CHU) monitored eight public sector entities specifically 
for the quality of their financial management and control (6 in 2019). The CHU prepares an 
annual  report  on  the  implementation  of  PIFC  on  the  basis  of  replies  to  self-assessment 
questionnaires and its own quality reviews. However, there is a need for more evidence-based 
recommendations and more systematically implemented. 

A certification scheme for internal auditors is in place, but needs to be improved as regards 
management  and 
to  have 
professionally trained internal auditors, who have undergone rigorous technical examination. 
Kosovo  is  expected  to  finalise  the  Administrative  Instruction  for  certification  of  internal 
auditors by the end of the next reporting period.  

technical  content.  Kosovo  should  make  further  efforts 

External audit 

In  line  with  the  standards  of  the  International  Organisation  of  Supreme  Audit  Institutions, 
Kosovo’s  constitutional  and  legal  framework  provides  for  the  functional,  organisational 
and  financial  independence  of  the  National  Audit  Office  (NAO).  The  NAO  became  a  full 
member  of  the  European  Organisation  of  Supreme  Audit  Institutions  (EUROSAI)  in 
November 2020. The Law on the Auditor General and the National Audit Office of Kosovo 
should  be  modified  to  remove  the  obligation  to  conduct  regularity  audits  annually  on  all 
budget  organisations  (regardless  of  their  size,  complexity,  risk,  etc.);  audits  should  be 
selected based on risk level assessment of public finance. These changes would increase the 
number of Audits of Publicly Owned Enterprises and performance audits.  

The Office’s institutional capacity remained largely stable with 171 staff, of whom 141 are 
audit  staff  (170  and  141  in  2019).  The  Office  is  implementing  its  2018-2021  strategic 
development  plan,  which  includes  objectives,  performance  indicators  and  a  monitoring 
framework.  It  introduced  audit  quality  control  and  assurance  procedures  and  continued  to 
implement a certification programme for auditors.  

The  Office  finalised  11  performance  audit  reports,  compared  to  8  in  2020.  It  worked  with 
civil  society  organisations,  especially  at  local  level,  to  improve  the  impact  of  audit  work; 
municipality-level public debates on the audit recommendations took place. The percentage 
of fully implemented recommendations rose slightly from 40% in the previous year to 45%. 
A better follow-up and review of performance audits, should be ensured by the government, 
and the parliamentary committees of the Assembly 

Protection of the EU’s financial interests  

Kosovo  is  invited  to  take  the  necessary  steps  in  the  process  of  legislative  approximation 
with the acquis in the fight against fraud in line with the Union's financial interests, and by 
means  of criminal  law.  Kosovo is  also  invited to  set  up an  anti-fraud  coordination service 
(AFCOS)  and  adopt  an  anti-fraud  strategy.  Cooperation  is  governed  by  an  administrative 
agreement  between  the  Kosovo  Police  and  the  European  Anti-Fraud  Office  (OLAF).  It  is 
designed to ensure the timely transmission of information and cooperation in cases relating to 
alleged fraud and other illegal activities affecting the financial interests of the EU.  

Protection of the euro against counterfeiting  

Kosovo  has  established  competent  authorities  and  procedures  for  dealing  with  counterfeit 
money, but alignment with the acquis in this area still needs to be assessed. The Law on the 
Central  Bank prohibits the circulation of counterfeit money. The Central  Bank has issued a 
regulation  on  cash  operations  to  strengthen  rules  and  procedures  for  financial  institutions 
operating  in  Kosovo.  The  Commission  has  a  cooperation  agreement  on  coins  with  the 

67 

 
 
Kosovo  Agency  on  Forensics.  Kosovo  takes  part  in  the  actions  of  the  Pericles  2020 
programme. 

3. 

GOOD NEIGHBOURLY RELATIONS AND REGIONAL COOPERATION 

Good  neighbourly  relations  and  regional  cooperation  form  an  essential  part  of  Kosovo’s 
European  integration  process  and  contribute  to  stability,  reconciliation  and  a  climate 
conducive to addressing open bilateral issues and the legacies of the past. Kosovo 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. 

The  COVID-19  pandemic  has  accelerated  the  ambition  to  enhance  regional  integration,  by 
displaying the important links between markets in the region as well as between the EU and 
the six Western Balkans economies. Given the European perspective of the Western Balkans, 
the EU has continued to treat the region as privileged partners by associating them with the 
Union’s  mechanisms  and  instruments,  including  an  exemption  from  temporary  EU  export 
restrictions of medical equipment.  

At  the  Sofia  Summit  on  10  November  2020,  the  six  Western  Balkans  leaders  adopted  the 
Declaration on the Common Regional Market and the Declaration on the Green Agenda for 
the  Western  Balkans.  This  followed  upon  previous  commitments  taken  at  the  EU-Western 
Balkans  Zagreb  summit  in  May  2020  and  the  recognition  of  the  role  of  deepened  regional 
economic  integration  to  support  the  economic  recovery  of  the  Western  Balkans.  The 
Common Regional Market is structured around the four freedoms (free movement of goods, 
services,  capital  and  people)  while  also  covering  aspects  of  digital,  investment,  innovation 
and industrial policy. This makes it the most ambitious regional integration effort to date in 
the Western Balkans. The Common Regional Market builds on EU rules and standards and 
represents  a stepping-stone to  integrate the region more closely with  the  EU Single Market 
already before accession. 

The  Common  Regional  Market  will  be  critical  in  increasing  the  attractiveness  and 
competitiveness  of  the  region.  It  will  help  Kosovo  to  speed  up  the  recovery  from  the 
aftermath  of the pandemic, notably to  attract  investors looking for diversification of supply 
and shorter value chains and to maximise the benefits of the infrastructure investments under 
the  Economic  and  Investment  Plan.  It  is  therefore  important  that  all  parties  play  a 
constructive  role  in  building  the  Common  Regional  Market  and  deliver  on  their  joint 
commitments.  

The Green Agenda for the Western Balkans aims at reflecting, the European Green Deal in 
a  proportionate  and  adapted  manner  in  the  Western  Balkans.  The  objective  is  to  turn 
environmental  and  climate  challenges,  similar  in  the  region,  into  opportunities.  Given  that 
natural  resources  and  climate  change  do  not  know  any  border,  the  Green  Agenda  foresees 
joint  actions,  which  will  contribute  to  the  sustainable  socio-economic  development  and  the 
green recovery of the entire region in the post-pandemic period. Kosovo should contribute to 
successfully implement this joint regional vision, with high level of ambition.   

The  Berlin  Process  summit  on  5  July  2021  was  an  occasion  for  the  Commission  to 
announce targeted assistance related to combating the COVID pandemic and post-pandemic 
recovery,  as  well  as  the  preparations  of  a  2021  financial  package  under  WBIF  for  the 
implementation of the Economic and Investment Plan. The participants also took stock of the 
achievements of the connectivity agenda with the region, which now includes 45 investment 

68 

 
 
 
projects,  supported  by  EUR  1  billion  in  EU  grants  that  have  leveraged  EUR  3.8  billion  in 
loans.  Regrettably,  despite  good  technical  progress,  the  Western  Balkan  partners  were  not 
able to conclude several important agreements related to the Common Regional Market and 
CEFTA,  because  of  bilateral  and  status  issues.  The  participating  Member  States  and  the 
Commission called for a constructive approach to making progress on the Common Regional 
Market, which will help the region take full advantage of the Economic and Investment Plan.    

In  July  2021,  the  regional  agreement  on  roaming  fees  signed  at  the  April  2019  Western 
Balkans  digital  summit  in  Belgrade  entered  into  force,  enabling  “roam  like  at  home” 
(RLAH).   

The  unresolved  fate  of  missing  persons  who  disappeared  in  relation  to  the  conflicts  of  the 
1990s remains a humanitarian concern in the Western Balkans. In April 2021, 9 996 people 
are still missing as a result of the conflicts in the region. Of these, 6 377 cases are related to 
the  conflict  in  Bosnia  and  Herzegovina,  1  980  to  the  conflict  in  Croatia  and  1  639  to  the 
conflict in Kosovo. The resolution of the fate of 1 639 missing persons related to the conflict 
in  Kosovo  and  its  aftermath  continues  to  be  hampered  by  a  lack  of  new  information  on 
gravesites and politicisation of the issue. In addition, the COVID-19 pandemic slowed down 
the work in this area. A total of seven cases (four in 2020, three in 2021) have been closed 
with  body  remaining  handed  over  to  their  families.  The  resumption  of  the  EU-facilitated 
Dialogue  between  Belgrade  and  Pristina,  in  July  2020,  gave  a  new  impetus  to  the  work 
carried out by the International Committee of the Red Cross as chair of the Belgrade-Pristina 
working group on missing persons, with three sessions held in 2020. With the support of the 
International  Commission  on  Missing  Persons  and  EULEX,  Serbia  conducted  a  joint 
excavation with Kosovo representatives in Kizevak (Serbia) from November 2020 onwards. 
During  the  reporting  period,  Kosovo’s  Government  Commission  on  Missing  Persons 
conducted assessment excavations in nine locations. In January 2021, it signed with ICRC a 
Memorandum  of Understanding reinforcing the exchanges of information in  the framework 
of  the  ICRC-led  Working  Group.  The  government  should  ensure  political  and  financial 
support  to  the  Commission  including  the  further  strengthening  of  the  inter-institutional 
cooperation.  Efforts  continued  to  produce  a  unified  list  of  missing  persons.  Despite  recent 
progress on digitalisation of available archives, a functional case management system is still 
not in place. The Institute of Forensic Medicine and the Ministry of Justice, after long delays, 
adopted the secondary legislation needed for the restructuring of the Institute in July 2020. 

Kosovo has continued to maintain bilateral relations with the countries of the region. 

Kosovo maintained overall good relations with Albania. In October 2020, both governments 
met  and  signed  14  agreements,  mainly  on  economic  cooperation  and  connectivity.  Despite 
the  high  number  of  bilateral  agreements  signed  under  the  Strategic  Partnership  (70  since 
2014),  implementation  remains  limited,  but  the  trade  volume  is  nonetheless  increasing.  A 
bilateral  agreement  to  establish  a  joint  electricity  control  block  with  Albania  became 
operational in December 2020. Negotiations on a social security agreement and an initiative 
to conclude a bilateral treaty with Albania on legal cooperation are ongoing. 

Kosovo  has  maintained  good  relations  with  Montenegro.  The  Deputy  Prime  Minister  of 
Montenegro visited Prizren in March 2021. In June 2021, Kosovo and Montenegro signed an 
agreement eliminating vehicle insurance tax for entry into their respective territories.  

Kosovo  continues  to  enjoy  overall  good  relations  with  North  Macedonia.  There  has  been 
some progress towards an agreement to open the rail Border/boundary Crossing Point (BCP) 
between Kosovo and North Macedonia. 

69 

 
 
 
There  has  been  no  change  in  Kosovo’s  formal  relations  with  Bosnia  and  Herzegovina, 
which does not recognise Kosovo’s independence and the two maintain a strict visa regime. 
An initiative to simplify the visa procedure for all citizens of Kosovo is still pending.  

Kosovo has maintained good relations with Turkey, including in the political, economic and 
cultural  sectors.  High-level  bilateral  meetings  took  place  in  the  margins  of  the  SEECP 
Summit in June 2021 in Antalya.  

4. 

NORMALISATION OF RELATIONS BETWEEN KOSOVO AND SERBIA  

The  EU-facilitated  Dialogue  on  normalisation  of  relations  between  Kosovo  and  Serbia 
continued in June 2021, after early parliamentary elections were held in Kosovo in February 
2021. Until then, the Dialogue had been on hold after December 2020 after the government 
collapse in Kosovo and organisation of new elections. High-level meetings between the new 
Prime Minister of Kosovo and the President of Serbia were held on 15 June and 19 July 2021. 
Additionally,  three  meetings  on  chief  negotiators’  level  took  place,  with  the  latest  meeting 
held  on  30  September  2021.  Both  parties  appointed  new  chief  negotiators  and  negotiations 
teams.  

During  the  reporting  period,  no  further  progress  was  achieved  in  the  negotiations  on  the 
comprehensive  and  legally-binding  normalisation  agreement.  Initial  progress  on  the 
agreement had been made in 2020, when the parties agreed to provisionally close the issues 
of  missing  persons,  displaced  persons  and  economic  cooperation  and  start  negotiations  on 
property  and  financial  claims.  The  new  Kosovo  government  is  encouraged  to  engage 
constructively and resume the negotiations on the comprehensive normalisation agreement. 

Following tensions in the north of Kosovo, an arrangement was reached in the EU-facilitated 
Dialogue on 30 September 2021 on de-escalation and a temporary measure for licence plate 
issues.  The  Parties  also  agreed  to  establish  a  Working  Group  led  by  the  EU,  to  find  a 
permanent  solution  within  6  months  based  on  EU  standards  and  practices.  The  EU  expects 
the  Parties  to  engage  constructively  in  this  process  to  ensure  freedom  of  movement  for 
citizens. 

When it comes to the state of play on implementation of past agreements:  

-  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  the  authorities  in  Pristina.  During  the  reporting  period,  the 
provisions of the agreement were not respected by Kosovo in one case; 

-  During the reporting period, there has been no further progress on the implementation 
of  the  25  August  2015  Agreements.  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  has  come  into  effect.  Serbia  filed  an 
application to license Elektrosever, which is currently being reviewed by the Kosovo 
Energy Regulatory Office; 

-  The works on the Mitrovica bridge have long been 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 parties need to remain committed to the continued 
implementation  of  the  agreement  on  representation  and  participation  of  Kosovo  in 

70 

 
 
regional  forums.  The  implementation  of  the  cadastre  and  university  diplomas 
recognition agreements is still pending. The implementation of some elements of the 
agreement  on  freedom  of  movement,  in  particular  related  to  license  plates,  are  also 
pending.  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  limited  progress  in  establishing  the  six  permanent  IBM  common 
crossing  points  between  Serbia  and  Kosovo  as  stipulated  in  the  IBM  agreement. 
Serbia agreed to take possession of the newly constructed EU-funded facilities at the 
Merdare  crossing  point  in  October  2020,  but  it  has  not  engaged  constructively  in 
starting  the  establishment  of  the  crossing  points  on  the  Serbian  side  (in  Jarinje, 
Mucibabe, and Konculj). This has led to a suspension of EU funds for this project in 
July  2018.  Additional  measures  continue  to  be  required  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;  
-  Kosovo needs to respect the Arrangements for Official visits consistently.  

Overall,  Kosovo  has  remained  engaged  in  the  dialogue.  However,  the  Kosovo  government 
needs  to  uphold  its  previous  commitments  and  commit  to  the  full  implementation  of  past 
Dialogue agreements. Moving forward, Kosovo also needs to make further substantial efforts 
refraining  from  any  unilateral  actions  and  contributing  to  a  conducive  environment  for  the 
conclusion  of  a  legally-binding  normalisation  agreement  with  Serbia,  including  in  its 
international relations. Kosovo is expected to engage constructively in the negotiations on the 
legally-binding  normalisation  agreement  in  the  coming  period  in  order  to  make  rapid  and 
concrete  progress.  Reaching  a  comprehensive,  legally-binding  agreement  is  urgent  and 
crucial so that Serbia and Kosovo can advance on their respective European paths. 

5.      EUROPEAN STANDARDS 

5.1. INTERNAL MARKET  

Kosovo has some level of preparation in most of the areas of the internal market, namely the 
free  movement  of  goods,  capital,  company  law  and  intellectual  property,  whereas  its 
preparations  are  moderately  prepared  on  movement  of  workers,  services  and  right  of 
establishment and on financial services. It is at an early stage of preparation on competition, 
as well as on consumer policy and health protection. During the reporting period, Kosovo has 
made  some  progress  in  all  areas,  except  on  consumer  policy  and  health  protection,  where 
only limited progress was made. 

5.1.1. 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 from creating unjustified barriers to 
trade. 

Kosovo has some level of preparation for the free movement of goods. Some progress was 
achieved  during  the  reporting  period  by  adopting  implementing  legislation  on  market 
surveillance,  metrology,  accreditation,  technical  requirements  and  conformity  assessment. 

71 

 
 
Efforts were made on the calibration of measurement standards and the electronic register of 
technical  regulations.  The  administrative  and  human  resources  capacity  of  quality 
infrastructure  institutions  needs  to  be  further  strengthened  and  structural  weaknesses 
addressed.  

Some  recommendations  from  the  previous  report  remain  valid  and  Kosovo  should  in 
particular:  

→  increase  the  enforcement  capacity  of  quality  infrastructure,  in  particular  of  conformity 
assessment and market surveillance bodies;  

→  adopt  the  new  law  on  general  product  safety  to  further  align  legislation  with  the  EU 
acquis;  

→  amend  the  law  on  chemicals  to  start  implementing  requirements  of  the  European 
Regulation  on  Registration,  Evaluation,  Authorisation  and  Restriction  of  Chemicals 
(REACH).  

General principles  

As regards production, distribution and marketing of industrial products, a new law on 
general  product  safety  needs  to  be  adopted  to  unify  the  provisions  of  Kosovo’s  order 
competencies  of  various  inspectorates  for  non-food  product  groups  and  render  the  system 
more  coherent  and  transparent.  Implementing  legislation  on  the  form  and  content  of 
conformity marking and recognition of foreign documents was adopted in September 2020.   

Non-harmonised area  

The action plan on ensuring alignment with the obligations of Articles 34-36 of the Treaty on 
the  Functioning  of  the  European  Union  (TFEU)  was  finalised  and  adopted  by  the 
government.  An  electronic  “intranet”  register  of  Kosovo’s  technical  regulations  was 
established. It will enable smoother implementation of existing obligations under the CEFTA 
Agreement and EU acquis.  

Harmonised area: quality infrastructure  

The  Standardisation  Management  Information  System 
the 
standardisation processes, but also for exchanging vital information and data with European 
and International Standardisation Organisations. Its functioning is crucial for the adoption of 
standards in line with the European Committee for Standardisation/European Committee for 
Electro-technical Standardisation (CEN/CENELEC) and international standardisation bodies. 
However,  the  system  is  in  need  of  urgent  upgrading  to  continue  its  operation.  Kosovo 
Standardisation Agency’s affiliate membership of CEN/CENELEC is still pending. 

is  used  for  managing 

As  a  response  to  the  large  number  of  medical  laboratories  that  were  established  since  the 
beginning  of  the  COVID-19  pandemic,  a  new  scheme  for  medical  laboratories  was 
established  which  led  to  the  accreditation  of  two  medical  laboratories.  There  are  now  58 
accredited  conformity  assessment  bodies  in  Kosovo  (37  test  laboratories  and  21  inspection 
bodies), but their capacity still needs to be strengthened. 

In the area of metrology, nine relevant pieces of implementing legislation designed to align 
with the EU acquis entered into force during 2020. The Kosovo Metrology Agency had six 
measurement  standards  calibrated  by  metrology  bodies  in  2020  (on  temperature,  mass  and 
humidity  of  air).  In  May  2021,  the  Agency  sent  the  necessary  data  to  apply  for  associated 
membership of the European Association of National Metrology Institutes (EURAMET).  

72 

 
 
As regards market surveillance, Kosovo adopted legislation on groups of products that were 
subject  to  inspection  surveillance  in  October  2020.  The  legislation  is  based  on  the  law  on 
technical  requirements  for  products  and  conformity  assessment.  This  completes  the  step  to 
unify the rules on competencies of various inspectorates for groups of non-food products.  

During the reporting period, 412 product safety inspections were conducted with 5  harmful 
products identified, including 2 with serious risks.  

Harmonised area: sectoral legislation 

On “new and global approach” product legislation, Kosovo adopted legislation designed 
to  be  aligned  with  the  EU  acquis  on  personal  protective  equipment,  machinery,  pressure 
equipment  and  gas  appliances.  Some  alignment  in  the  area  of  construction  products  took 
place but further alignment is needed. 

As regards “old approach” product legislation, there is still a substantial lack of capacity for 
the alignment as well as the practical implementation of the EU Regulation on Registration, 
Evaluation,  Authorisation  and  Restriction  of  Chemicals  (REACH).  The  law  on  chemicals 
requires  substantial  changes  to  align  with  EU  legislation.  The  motor  vehicles  legislation  is 
partly aligned with the EU acquis.  

There was no further progress on alignment with procedural measures. Kosovo’s legislation 
is  partly  aligned  with  the  EU  acquis  in  the  areas  of  cultural  goods,  textile  labelling  and 
defence products. 

5.1.2. Movement of workers, services and right of establishment 

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

Kosovo remains  moderately  prepared for the free movement  of workers, services and the 
right  of  establishment.  Some  progress  was  made  during  the  reporting  period.  The  legal 
framework  regulating  postal  services  in  Kosovo  is  partially  aligned  with  the  EU  postal 
acquis. A contact point for services platform was launched in October 2020. There is still no 
effective monitoring system to check the compliance of sectoral laws with the EU Services 
Directive and further acquis alignment is required. Kosovo needs to align legislation with the 
EU  acquis  on  the  mutual  recognition  of  professional  qualifications.  As  most  of  the  last 
report’s recommendations have not been addressed yet, in the coming year Kosovo should, in 
particular:  

  remove  the  identified  barriers  to  the  right  of  establishment  and  freedom  to  provide 
services, by rolling out the action plan for the full implementation of the law on services;  

  complete the alignment with the EU acquis on postal services, including the Regulation 

on cross-border parcel delivery services; 

  align with the EU acquis on mutual recognition of professional qualifications. 

On the free movement of workers, EU nationals and their family members are not eligible 
to  work  in  Kosovo  without  a  work  permit.    During  the  reporting  period,  the  Employment 
Agency  issued  70  short-term  work  permits,  of  which  41  for  EU  nationals.  Kosovo  has  in 
place one bilateral social security agreement with an EU Member State (Belgium) ensuring 

73 

 
 
that periods of activity will be taken into account for entitlement to social security benefits.  
Negotiations for similar agreements are ongoing with the Netherlands, Slovenia and Albania.  

In the area of freedom to provide services, there is still no effective monitoring system that 
screens  the  compliance  of  relevant  sectoral  legislation  with  the  EU  Services  Directive.  No 
track record exists on the implementation of the 5-year action plan adopted in 2018. As the 
plan  has  only  been  partially  implemented,  the  harmonisation  process  of  sectoral  legislation 
with the Services Directive remains slow. At present, foreign companies are still required to 
establish  an  office  in  Kosovo.  To  coordinate  efforts  in  the  process  of  aligning  Kosovo’s 
legislation with the Services Directive, legal departments of relevant line ministries, agencies 
and other public and professional bodies need to be supported and their capacity enhanced. 

The  Contact  Point  for  Services  platform  was  launched  in  October  2020  and  contains  some 
400  laws  and  bylaws  that  cover  trade  in  services.  This  is  an  important  first  step  in  the 
implementation of the action plan on the establishment of a Point of Single Contact.  

The  legal  framework  regulating  postal  services  in  Kosovo  is  partially  aligned  with  the  EU 
postal acquis. The existing Law on Postal Services in Kosovo stipulates the timetable of full 
postal  market  opening.  This  way,  the  alignment  with  the  Postal  Services  Directive  will 
automatically  take  place  as  of  1  January  2022,  when  the  reserved  area  for  the  provision  of 
universal  postal  services  will  be  abolished.  Alignment  with  the  Regulation  on  cross-border 
parcel delivery services is yet to be completed. The Regulatory Authority of Electronic and 
Postal Communications (RAEPC) is preparing on the system for cost accounting and net cost 
calculation  of  universal  postal  services.  The  activities  of  the  postal  service  providers  are 
supervised,  monitored  and  inspected  by  RAEPC  in  the  event  of  regulatory  violations  and 
customers’ complaints. A new sectoral strategy (2021-2025) supporting the transition to full 
liberalisation of the postal services market is being prepared. At the end of 2020, a total of 45 
operators had been registered providing postal services under the general authorised regime, 
and one universal service provider. 

The Law on regulated professions broadly defines the requirements, conditions, and criteria 
for the exercise of a regulated profession. The division for regulated professions needs to be 
properly staffed and functionalised. The State Council for Regulated Professions established 
in  December  2020  is  not  operational.  The  State  Examination  Agency  has  yet  to  be 
established. 

During  the  reporting  period,  the  responsible  ministry  issued  implementing  legislation  on 
criteria and procedures of regulated professions, on the functioning of the State Examination 
Commission  and the procedures to  conduct  the relevant  exams.  Kosovo  still needs to  carry 
out a mapping of all regulated professions.  

In  the  framework  of  regional  cooperation,  the  joint  working  group  on  the  recognition  of 
professional  qualifications  has  started  negotiating  a  stand-alone  agreement  on  mutual 
recognition of professional qualifications.  

5.1.3.  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. 

Kosovo  has  some  level  of  preparation  in  this  area.  The  movement  of  capital  remains 
largely  free  in  Kosovo,  with  no  restrictions  on  foreign  ownership  or  investments  in  the 
financial sector. The legal framework still has to be amended to further align with the EU 
Payment  Service  Directive.  During  the  reporting  period,  some  progress  was  made  by 

74 

 
 
 
approving the risk assessment of money laundering and terrorist financing and the action 
plan  for  improving  the  anti-money  laundering  and  counter-terrorist  financing  system. 
Inter-institutional cooperation  to ensure proper investigation and prosecution of offences 
in 
the 
recommendations of the previous report remain valid. In the coming year, Kosovo should, 
in particular:  

  should  be  strengthened.  Although 

initial  steps  were 

that  area 

taken, 

  further align Kosovo’s legal framework with the EU Payment Service Directive 2; 

  increase  efforts  to  fight  economic  and  financial  crime  and  align  the  Law  on  the 

prevention of money laundering and terrorist financing with the EU acquis; 

  strengthen  inter-institutional  cooperation  in  the  fight  against  economic  and  financial 

crime. 

The  movement  of  capital  is  largely  liberalised  and  aligned  with  the  EU  acquis.  The 
execution of payments and money transfers is limited to banking and non-banking financial 
institutions  licensed  by  the  Central  Bank  of  Kosovo.  The  law  on  property  rights,  which 
addresses the issue of real estate acquisition by foreigners in Kosovo still needs to be adopted 
by the Assembly. In terms of payment systems, Kosovo needs to further align its legislation 
with the EU Payment Service Directive 2. 

The law on the prevention of money laundering and combating terrorism financing needs 
further  alignment  with  EU  standards.  A  new  draft  Law  on  implementation  of  targeted 
international  financial  sanctions  to  improve  the  legal  framework  in  line  with  applicable 
European and international standards to combat terrorism financing is awaiting approval. An 
administrative instruction on beneficial ownership has been adopted.  

In  December  2020,  the  Kosovo  government  approved  the  risk  assessment  on  money 
laundering  and  terrorist  financing  and  the  action  plan  for  improving  the  anti-money 
laundering and counter terrorist financing system. The action plan is based on the 2018 anti-
money laundering and combating financing of terrorism assessment and contains measures to 
improve  Kosovo’s  technical  compliance  with  the  Financial  Action  Task  Force  and 
MONEYVAL  recommendations.  Strengthening  inter-institutional  cooperation  in  the  fight 
against economic and financial crime is still needed (See also section 2.2.2 - Justice, freedom 
and security). 

5.1.4. 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. 

Kosovo  has  some  level  of  preparation  in  the  area  of  company  law.  Some  progress  was 
made during the reporting period with the adoption of implementing legislation in the area of 
company  law  and  financial  reporting  and  the  adoption  of  a  corporate  governance  code.  As 
recommendations  from  the  previous  report  have  only  been  partly  addressed,  in  the  coming 
year Kosovo should pay particular attention to:  

  further  strengthen  the  institutional  audit  oversight  structures  and  the  professional 

independence and objectivity of auditors and audit firms; 

  further align with EU company law acquis, including in the field of shareholders rights. 

75 

 
 
On  company  law,  Kosovo  took  concrete  steps  to  implement  the  Law  on  business 
organisations by introducing a number of implementing acts related to the Kosovo Business 
Registration Agency (KBRA). Further alignment with the EU company law acquis is needed, 
particularly  concerning  minimum  capital  requirements,  shareholder  rights,  company 
takeovers,  some  aspects  of  cross-border  mergers  and  companies’  and  foreign  branches’ 
disclosure requirements and the 2019 EU Directives on use of digital tools and cross-border 
operations.  Insufficient  coordination  and  data  sharing  between  the  KBRA  and  the  Kosovo 
Council  for  Financial  Reporting  (KCFR)  leads  to  a  situation  where  timely  reporting  and 
publication  of  accounting  documents  is  limited.  Besides,  the  Agency  does  not  publish 
information on companies in some legal situations (e.g. under insolvency proceedings). There 
is no legal obligation to publish accounting documents in the business register.  

Although the assessment of technical requirements to ensure the interoperability of Kosovo’s 
business register is still pending, KBRA has signed a memorandum of understanding with the 
Business  Agency  of  Slovenia  for  public  legal  records  and  related  services.  A  Corporate 
Governance Code following OECD principles has been finalised and adopted.  

The KCFR has pursued implementation of the Law on Accounting, Financial Reporting and 
Audit,  which  regulates  the  accounting  and  financial  reporting  of  businesses.  The  KFCR 
issued implementing legislation on reporting of micro-enterprises as well as on the structure, 
content and submission of financial reports. The legislation still needs to be aligned with the 
relevant EU acquis on non-financial reporting. The KCFR and the Tax Administration have 
strengthened cooperation by exchanging company information electronically. Some company 
financial  reports  submitted  in  2020  have  been  published  on  the  website  of  the  Ministry  of 
Finance,  Labour  and  Transfers.  During  the  reporting  period,  there  were  no  on-site  quality 
assurance inspections of licensed professional bodies that provide education, examination and 
certification  services.  No  punitive  measures  in  the  form  of  administrative  fines  have  been 
imposed  on  economic  operators  or  professional  associations  by  the  Commission  on 
Investigations  and  Discipline.  A  sustainable  financing  solution  to  enable  the  Public  Audit 
Oversight Board to function as the competent authority for public audit oversight, has yet to 
be found. 

5.1.5. Intellectual property law 

The  EU  has  harmonised  rules  for  the legal  protection  of  intellectual  property  rights  (IPR), 
and for the legal protection of copyright and related rights. Rules for the legal protection of 
IPR  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. 

Kosovo has some level of preparation in this area. Some progress was made by preparing 
further  alignment  of  the  legal  framework  on  intellectual  property  rights  (IPR)  with  the  EU 
acquis  and  reducing  the  backlog  of  applications.  However,  limited  cooperation  between 
policy-making and enforcement institutions continues to hinder the effective enforcement of 
intellectual property rights.  

As  recommendations  from  the  previous  report  have  only  been  partly  implemented,  in  the 
coming year, Kosovo should in particular:  

  further  align  legislation  with  the  EU  acquis,  notably  regarding  patents,  trademarks, 

industrial design, topographies of integrated circuits, trade secrets and copyright;  

76 

 
 
  take concrete steps to increase the capacity and coordination of policy-making institutions 
and law enforcement agencies to enforce intellectual, industrial and commercial property 
rights;  

  ensure  that  appropriate  collective  licensing  agreements  are  enforced  to  guarantee 

remuneration for right holders. 

Kosovo did not yet make sufficient progress to guarantee a level of protection of intellectual, 
industrial  and  commercial  property  rights  equivalent  to  that  applied  in  the  EU,  despite  its 
SAA commitment to do so by April 2021.  

Existing  laws  and  implementing  legislation  in  the  area  of  patents,  trademarks,  industrial 
design,  topographies  of  integrated  circuits  and  copyright  are  partially  aligned  with  the  EU 
acquis. Implementing legislation in some of the IPR related fields still needs to be adopted.  

Initial steps were taken in drafting new legislation on  copyright and related rights  in  line 
with the latest EU Directive. 

The  National  Strategy  to  Strengthen  the  Copyright  System  2019–2023  foresees  the 
establishment  of  a  division  for  promotion  and  education  of  copyright  and  of  a  division  for 
collective  management  and  supervision  of  collective  management  organisations,  which  are 
still pending. 

The implementation of the government decision of October 2020 approving general tariffs for 
the  retransmission  of  audiovisual  works  exploitation  of  copyright-protected  subjects  has 
recently  started..  On  industrial  property  rights,  Kosovo  has  prepared  draft  legislation  on 
patents, trademark, industrial design, topographies of integrated circuits and trade secrets, but 
still  needs  to  adopt  it.  Implementing  legislation  addressing  the  restructuring  and  staffing 
needs of the Industrial Property Agency is still pending.  

In 2020, the Agency received 2,128 applications for trademarks, 26 applications for patents 
and  12  applications  for  industrial  design.  The  number  of  applications  for  trademarks  has 
increased by 22.81% compared to the previous year. The Agency has carried out only limited 
activities  to  raise  awareness  of  businesses  and  citizens  on  the  importance  of  industrial 
property. 

The State Intellectual Property Council and the Task Force against Piracy and Counterfeiting 
are  the  main  bodies  tasked  with  coordinating  enforcement.  No  meetings  of  the  Council  or 
the Task Force were held during the reporting period. The Kosovo Prosecutorial Council and 
Police  have  established  points  of  contact  for  IPR  infringements  in  each  basic  prosecution 
office  and  each  regional  police  office.  Furthermore,  lengthy  procedures  for  treating 
applications and the enforcement of the final decision remain major constraints to effectively 
implement the IPR legal framework. 

Due to restrictions caused by the pandemic, there were fewer inspections against piracy and 
counterfeiting.  In  2020,  Kosovo  Customs  initiated  182  investigation  cases  including  101 
cases with fake goods for a total value of EUR 478,250, nearly a 75% decrease compared to 
2019.  

The  members  of  the  Commission  on  Geographical  Indication  have  been  nominated.  Four 
pending applications await treatment by the Commission. Members of the Commission still 
need to receive adequate training. 

5.1.6. Competition 

77 

 
 
EU  rules  protect  free  competition.  These  include  antitrust  rules  against  restrictive 
agreements between companies and abuse of dominant position. They also 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 prevent distortion of competition. 

Kosovo is at an early stage /has some level of preparation on competition. Some progress 
was made in revising the legal framework on Competition and State Aid and by updating the 
State  aid  inventory  with  new  schemes.  Kosovo  needs  to  strengthen  its  enforcement  record 
and align implementing legislation with the EU acquis in both areas.  

All  recommendations  from  the  previous  report  remain  valid.  In  the  coming  year,  Kosovo 
should in particular:  

  further align the legislative framework on both Competition and State aid and ensure its 

enforcement; 

  ensure the functional capacity and operational independence of the competition and State 
aid  authorities  and  increase  cooperation  and  coordination  between  all  stakeholders, 
including ministries, regulators and the judiciary; 

  fulfil SAA obligations by aligning State aid schemes with State aid rules. 

Antitrust and mergers 

The  legislative  framework  is  partially  in  line  with  the  EU  competition  acquis.  Kosovo 
started to further align legislation on protection of competition with the EU acquis. The draft 
legislation  is  awaiting  approval  by  the  government.  The  Kosovo  Competition  Authority 
(KCA) adopted implementing legislation on investigative procedures that sets out clear steps 
and  procedures  on  its  handling.  Further  revision  of  implementing  legislation  related  to  the 
new draft Law on Competition is needed.  

On  the  institutional  framework,  the  KCA  is  the  institution  responsible  for  implementing 
competition  law,  initiating  investigations,  conduct  on-site  inspections,  impose  fines  and 
remedies  and  prohibit  anti-competitive  mergers.  The  Authority’s  mandate  expired  in  June 
2021  and    new  appointments  should  be  finalised  soon.  The  Authority  has  developed  an 
annual action plan following last years strategic plan  (2020-2023).  

On  its  capacity  to  enforce  competition,  more  efforts  are  needed  to  improve  cooperation 
between  the  Authority  and  sector  regulators.  The  expertise  of  judges  dealing  with 
competition  cases  and  merger  control  should  be  improved  through  ad  hoc  training. 
Challenges  remain  due  to  delays  and  contradictory  judgments  by  some  court  instances. 
Advocacy among judges on enforcement of competition law remains key. Further efforts are 
needed to enforce the decisions by imposing fines or remedies.  

On  implementation,  in  2020,  the  KCA  issued  16  decisions,  recommendations  and 
professional  opinions  including  in  the  sectors  of  energy,  petroleum  and  construction 
materials.  It  conducted a study on the insurance  market  of vehicles and  monitored licensed 
laboratories for COVID-19 tests.  

Case numbers remain low and to date, the Authority has not carried out any dawn raids. The 
leniency programme has never been used. 

State aid  

78 

 
 
 
 
The  legislative  framework  on  State  aid  remains  largely  in  line  with  the  EU  acquis. 
Preparations  to  further  align  the  current  legislative  framework  with  the  EU  acquis  are 
ongoing.  The  regulations  on  services  of  general  economic  interest  and  horizontal  aid 
including the block exemptions and regional aid rules were drafted and are awaiting adoption. 

Kosovo has established an inventory of aid schemes as required by the SAA, although their 
alignment with the existing legislation on state aid is at an early stage.   

As  regards  the  institutional  framework,  the  State  Aid  Department  (SAD)  as  part  of  the 
Ministry  of  Finance  remains  in  charge  of  assessing  proposals  for  State  aid,  drafting 
assessment reports for the State Aid Commission (SAC) and updating the State aid inventory. 
Steps were taken by Kosovo to advance the cooperation between the SAC and the SAD. The 
capacity  to  enforce  State  aid  rules  and  control  remains  weak  and  needs  to  be  improved 
through training. The selection process  of two SAC members  who previously resigned  was 
started. 

On  implementation,  some  progress  was  achieved  on  the  State  aid  register,  which  is  being 
updated with new schemes, containing aid authorised or granted, including de minimis aid. In 
August 2020, the Commission has prepared a draft of the regional map of State aid in Kosovo 
for the period 2021–2026. In October 2020, the Commission approved its first annual report 
on  State  aid.  The  SAC  should  be  systematically  consulted  on  draft  sectoral  legislation 
containing elements of State aid. 

The SAC adopted 18 case decisions during 2020, up from three in 2019, out of which 9 were 
positive  but  conditional,  7  positive  and  2  negative.  They  were  published  in  the  Official 
Gazette. There are no cases of recovery of aid granted unlawfully yet. 

Liberalisation   

Public undertakings are subject to the Law on competition and the Law on State aid. Kosovo 
has monopolies of a commercial nature within the meaning of Article 37 TFEU. There is still 
little  awareness  of  the  possible  application  of  State  aid  rules  to  the  activities  of  central 
institutions  and  publicly  owned  enterprises.  The  SAC  notified  potential  aid  grantors  but 
responses have been received only partially. It is crucial to  raise awareness among state aid 
grantors on the obligation to notify ex-ante aid to the SAC. In this respect, since 1 January 
2012,  the  SAC  is  working  together  with  the  EU  and  has  held  several  trainings  to  granting 
authorities. Vehicle homologation has only been partially addressed and needs to be aligned 
with the competition rules in force.  

5.1.7. Financial services  

EU rules on banking, insurance, supplementary pensions, investment services and securities 
markets  aim  to  ensure  fair  competition  between  financial  institutions  and  their  stability, 
namely rules. They include rules on their authorisation, operation and supervision. 

Kosovo is moderately prepared in the area of financial services. Some progress was made 
on  implementation  of  the  Solvency  I  framework  and  development  of  the  roadmap  for 
implementation of the Solvency II measures. As the recommendations in the previous report 
have not been fully addressed, in the coming year Kosovo should in particular:  

  rapidly make the Non-Executive Governing Board of the Central Bank fully functional; 

  continue  to  implement  the  roadmap  for  implementation  of  Solvency   II  measures  and 

enhance the supervisory role on the insurance sector; 

79 

 
 
  further advance in implementation of the Basel III framework and adopt amendments to 
Kosovo's  legal  framework  governing  microfinance  institutions  and  non-bank  financial 
institutions, in accordance with best practices; 

  take immediate action to address the issue of uninsured, unregistered vehicles.  

levels  of  predominantly 

On banks and financial conglomerates, the Central Bank of Kosovo (CBK) continued with 
gradual implementation of the Basel III framework around the capital adequacy and leverage 
ratio requirements. The financial sector withstood the Covid-19 crisis mainly due to the high 
capitalisation 
foreign-  subsidiary  banks.  Overall,  banks’ 
capitalisation  ratio  remained  stable  and  well  above  the  required  minimum  capital  adequacy 
ratio of 12%. Nevertheless, the CBK needs to strengthen bank supervision as it starts to lift 
the  regulatory  forbearance  on  loan  provisions  and  capital  requirements  on  reprogrammed 
loans. The CBK negotiated a EUR 100 million re-purchasing line of credit from the European 
Central Bank to maintain the bank liquidity buffers against any possible shocks. 

The Supervisory Governing Board of the CBK continues to be non-operational and without 
quorum, due to vacancies. This affects the governance of the Central  Bank and its decision 
making  process.  Kosovo  has  not  yet  established  an  independent  recovery  and  resolution 
authority. Amendments to the Law on banks, to assign this function to the Central Bank, must 
ensure  that  the  authority  has  functional  independence.  Gaps  in  the  legislation  on  micro-
finance  and  non-bank  financial  institutions  should  be  addressed  to  ensure  alignment  with 
international  best  practices.  As  a  result  of  the  moratorium  decision  on  reprogramming  of 
loans,  the  number  of  complaints  from  the  users  of  financial  services  has  increased.  The 
Central  Bank  must  ensure  that  complaints  are  reviewed  in  a  timely  manner,  in  accordance 
with  relevant  regulations,  to  ensure  that  consumers  are  adequately  protected  and  to  prevent 
unfair banking practices.  

CBK  is  Kosovo’s  sole  authority  on  insurance  and  occupational  pensions,  with  full 
competence for licensing, regulating and supervising insurance companies and occupational 
pension funds. Without being licensed by CBK, foreign insurers are not allowed to offer or 
take  on  direct  insurance  attached  to  a  person,  object  or  liability  located  in  the  territory  of 
Kosovo.  Foreign  institutions  are  treated  like  domestic  undertakings,  but  still  need  to  fulfil 
additional  criteria.  CBK  continued  to  implement  Solvency  I  measures  and  revoked  the 
licence of one insurance company that failed to comply with such measure. It has developed 
and  started  gradual  implementation  of  a  5-year  roadmap  on  implementation  of  Solvency  II 
measures.  CBK  should  enhance  the  supervisory  and  surveillance  role  in  the  insurance 
industry. In spite of the opinion presented by the Kosovo Competition Authority, the prices 
on  the  compulsory  motor  liability  insurance  market  remain  fixed.  The  action  plan  on  price 
liberalisation of Motor Third Party Liabilities has not been adopted by the CBK’s supervisory 
board due to its lack of quorum.   

Despite  some  initial  steps  being  taken,  the  authorities  have  still  not  addressed  the  issue  of 
uninsured  and  unregistered  vehicles,  and  the  associated  costs  for  the  insurance  sector.  As 
Kosovo  is  still  not  covered  by  the  ‘green  card’  system,  insurance  is  required  for  foreign-
registered  vehicles  entering  Kosovo  and  vehicles  with  Kosovo  plates  leaving  Kosovo.  This 
continues to represent a financial burden for travellers (other than those from countries with 
which  Kosovo  has  bilateral  vehicle  insurance  arrangements).  A  government  working  group 
was recently established to undertake the necessary steps for the future potential membership 
of Kosovo in the green card system. 

No further progress was made with the adoption and operationalisation of the manual on the 
on-site supervision of pension funds; further alignment with the EU acquis is needed. 

80 

 
 
On  securities  markets  and  investment  services,  most  activity  focuses  on  the  government 
bonds  market,  which  are  solely  auctioned  by  CBK.  The  Regulation  on  the  repurchase  of 
securities  with  the  Central  Bank  enables  repurchase  of  the  securities  between  commercial 
banks  on  the  secondary  market.  It  aims  to  help  eligible  banks  to  manage  their  liquidity 
efficiently in the short term. 

5.1.8. Consumer and Health Protection  

U 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,  as  well  as  medicines  for  human  and 
veterinary use. The EU also ensures high common standards for upholding patients’ rights in 
cross-border  healthcare  and  tackling  serious  cross-border  health  threats  including 
communicable diseases.  

Kosovo is at an early stage of preparation in this area. There was limited progress overall, 
with  some  progress  on  consumer  protection,  and  the  government’s  recognition  of 
independent consumer rights organisations. There was limited progress on health protection, 
notably  with  the  partial  introduction  of  a  basic  health  information  system.  During  the 
COVID-19  pandemic  Kosovo  made  significant  progress  in  improving  surveillance,  case 
investigation, contact tracing, case management and vaccination. 

As  most  of  the  recommendations  of  the  previous  report  have  not  been  addressed,  in  the 
coming year, Kosovo should:  

  amend  the  Law  on  consumer  protection  to  remove  problematic  articles  and  increase 

awareness on consumers’ rights and traders’ obligations;  

  increase the necessary resources to allow implementation of the health sector reforms and 
for strengthening of the  health system  including  further  roll-out  of the electronic public 
health information system;  

  adopt and start to implement the health promotion and education strategy. 

Consumer protection  

Kosovo’s  legislation  is  partly  aligned  with  the  EU  acquis  on  consumer  protection;  it  is  not 
aligned with the EU acquis on mortgage credit and alternative consumer dispute resolution or 
on  better  enforcement  and  modernisation  of  consumer  protection  rules.  In  addition,  the 
competent  inspection  authorities  also  need  to  be  empowered  to  have  the  right  to  take 
administrative  measures  to  ensure  enforcement.  The  lack  of  secondary  legislation  prevents 
the  application  of  fines  in  case  of  non-compliance  .  Kosovo  still  requires  products  to  be 
labelled with the flag of the country of origin, which is not in line with the EU acquis.   

Enforcement of consumer rights protection remains limited, pending the reform of the market 
inspectorate.  Progress  was  made  by  adopting  implementing  legislation  for  maintaining  the 
electronic register of collective claims. Implementing legislation on what product groups are 
subject to Inspection Surveillance was adopted in October 2020. This is an important step to 
unify the competencies of various inspectorates for groups of non-food products.   

As  regards  non-safety  issues,  the  Law  on  consumer  protection  addresses  consumers’ 
economic  interests,  but  it  cannot  be  properly  enforced  pending  reform  of  the  market 
inspectorate. The weakness of consumer rights organisations remains a problem. The Central 
Bank  established  requirements  via  implementing  legislation  for  the  safe-keeping  of  clients’ 
funds by registered Non-Banking Financial Institutions for the provision of payment services 

81 

 
 
and the issuance of electronic money, as well as encouraging competition in this industry that 
would increase efficiency in providing payment services by citizens. 

Public Health  

Health authorities in Kosovo focused mainly on management of COVID-19 pandemic during 
2020-21.  They  achieved  significant  progress  in  improving  surveillance,  case  investigation, 
contact  tracing  and  case  management.  Vaccination  is  ongoing  according  to  the  National 
Deployment and Vaccination Plan. New facilities and equipment was established in Pristina 
and  regional  centres  to  support  efforts  of  the  Ministry  of  Health  to  manage  the  pandemic. 
Diagnostic capacities of central and regional laboratories have been significantly increased. 

The  COVID-19  pandemic  has  put  Kosovo’s  health  system  under  significant  strain.  The 
government declared a public health emergency in March 2020 and introduced containment 
measures. In August 2020, the Kosovo Assembly adopted a new Law on prevention and fight 
against  the  COVID-19  pandemic.  Kosovo  became  a  member  of  the  Joint  Procurement 
Agreement on medical  counter-measures,  as well as an observer in  the EU Health Security 
Committee. Kosovo is also providing information to the Commission’s data collection system 
on COVID-19 and nominated a correspondent to the European Centre for Disease Prevention 
and Control. 

The COVAX facility, which is foreseen to provide enough COVID-19 vaccines to cover 20% 
of Kosovo’s population free of charge, ensured the first delivery of 24 000 doses arrived in 
Kosovo  at  the  end  of  March  2021,  marking  the  beginning  of  the  mass  vaccination 
programme. Further deliveries by COVAX and also via EU funded deliveries facilitated by 
Austria, are continuing – 163,020 doses were delivered by end June via COVAX, and the EU 
will deliver over 95 000 doses by the end of August. Government signed an agreement with 
the Pfizer for 1.2 million doses of the vaccine, which resulted in first deliveries in June 2021. 

On  public  health  policy,  while  there  was  some  progress  on  access  to  health  services,  the 
quality  of  healthcare  remains  of  concern.  Kosovo  has  yet  to  introduce  a  universal  health 
coverage  scheme.  The  adoption  of  the  Law  on  health  insurance  is  again  delayed,  as  is  the 
start  of the  collection of health premiums.  The public health information  system is  still not 
functional. The increasing emigration of health workers, predominantly doctors and qualified 
nurses, has a detrimental impact on the health system. The overall 2021 budget for the health 
sector was increased by  10%, compared to  2020. Despite this increase, the overall share of 
health expenditures at around 3% of GDP.  

There was no progress on the health sector strategy. Around one fifth of the population have 
very  limited  access  to  healthcare.  Access  to  basic  healthcare  is  free,  but  spending  on 
diagnostic services and medications is not reimbursed. High reliance on private out-of-pocket 
expenditures  (estimated  at  40%  of  total  medical  costs  –  only  65%  of  annual  public  health 
needs  are  covered  by  public  spending,  mostly  on  fixed  costs)  limits  access  for  vulnerable 
groups.  Health  financing  is  not  based  on  needs  assessments  and  institutional  accountability 
has not increased.  

Mental health services function as integrated services, with no notable developments in the 
reporting  period.  The  comprehensive  Law  on  tobacco  control  (in  force  since  2013)  is  not 
enforced, due to lack of political will and the poor performance of enforcement authorities.  

The  legislation  on  blood,  tissues,  cells  and  organs  is  partly  aligned  with  the  EU  acquis. 
Additional human and financial resources are needed, and the administrative and monitoring 
capacity  should  be  strengthened.  In  the  field  of  serious  cross-border  health  threats, 
including  communicable  diseases,  immunisation  coverage  remains  high  with  vaccination 
rates of over 95% reported among school-age children. Kosovo has not yet fully implemented 

82 

 
 
the  action  plan  addressing  recommendations  from  the  2018  European  Centre  for  Disease 
Prevention and Control technical assessment report. Legislation on patients’ rights in cross-
border  healthcare  is  partially  aligned  with  the  acquis.  For  specialised  health  services  that 
are  not  available  in  Kosovo,  patients  can  benefit  from  the  health  insurance  fund  for  health 
services  abroad.  Kosovo  has  bilateral  agreements  with  Albania,  Croatia  and  Turkey  on 
certain  medical  services.  However,  available  funding  covers  only  45%  of  the  needs  of  the 
population.  

There was some progress on the development and rollout to some health institutions of the e-
health information system based on the European core health indicators, though it is not yet 
used by all health institutions or to support evidence-based health care policy. It captures data 
on patient admissions, discharges and transfers. Further functionalities (pathology, radiology, 
blood  transfusion,  vaccination  and  other  interventions)  should  be  added.  In  March  2021 
primary health care providers in Pristina started providing e-health services, enabling virtual 
communication between users/patients and their general practitioners and provide counselling 
services whenever possible. 

The  revised  cancer-screening  programme  is  not  yet  prepared.  Although  additional  funding 
has been provided for systematic screening for cervical and breast cancer, further support in 
coordination and capacity building is needed, as well as improving the cancer incidence data. 
The number of women screened for cervical cancer is low.  

An action plan on health promotion was adopted in the reporting period as well as strategic 
plans  on  mother  and  child  healthcare,  intra-hospital  infections  and  human  resources 
management.  However,  the  prevention  of  non-communicable  diseases  remains  weak. 
Kosovo  has  not  made  any  progress  in  adopting  the  nutrition  action  plan  on  nutrition  and 
physical activity.  

Legislation of medicines for human use and medicines for veterinary use are partially aligned 
with the EU legislation. 

As regards health inequalities, the situation of the Roma and Ashkali communities remains a 
source  of  concern  given  their  very  low  immunisation  levels  and  particular  difficulties  in 
accessing  healthcare  due  to  their  difficult  socio-economic  conditions.  The  distribution  of 
information on public services and the incidence of discrimination have not improved. 

5.2.   COMPETITIVENESS AND INCLUSIVE GROWTH  

Kosovo is moderately prepared in the area of customs, as well as on entreprise and industrial 
policy. It has some level of preparation in the area of taxation, information society and media, 
as well as social policy and employment, and is at an early stage of preparation in the areas of 
science and research, and in the field of education and culture. During the reporting period, 
some  progress  was  achieved  in  most  areas  of  this  cluster,  but  only  limited  progress  on 
research as well as on education and culture. 

5.2.1. Information society and media 

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

internal  market 

functioning  of 

the  smooth 

the 

Kosovo has some level of preparation in the area of information society and media. There 
was some progress with further aligning the legislative framework with the acquis and with 
implementation. Kosovo continued the necessary technical preparations for the full rollout of 

83 

 
 
 
the Regional Roaming Agreement, providing Kosovo consumers with roaming free service as 
of  July  2021.  Kosovo  further  advanced  with  the  implementation  of  the  2013-2020  Digital 
Agenda.  A  sustainable  solution  for  the  funding  of  the  public  broadcaster  still  needs  to  be 
found. The process of digital switchover from analogue to digital television has not advanced.  

Last report’s  recommendations were mostly  not addressed  and remain valid.  In the coming 
year, Kosovo should in particular: 

  ensure  that  telecoms  and  media  regulators  are  given  adequate  resources  to  fulfil  their 
mandates  independently and develop a solution for the sustainable funding of the public 
service broadcaster: 

  implement number portability to ensure effective use of numbering resources and foster  

competition; 

  free the first digital dividend / liberate frequencies; 

  revise  the  Law  on  the  Independent  Media  Commission  in  line  with  the  Audio  visual 
Media  Service  Directive  and  strengthen  the  regulator’s  regulatory,  monitoring  and 
enforcement powers. 

As regards electronic communications and information and communication technologies 
(ICT),  the  existing  resources  of  the  Electronic  and  Postal  Communications  Regulatory 
Authority  remain  limited  and  not  proportional  to  their  responsibilities.  According  to  the 
Kosovo  Agency  for  Statistics,  in  2020  96.4%  of  households  had  access  to  the  Internet 
(compared to 93.2% in 2019). 95.1% (from 91.2% in 2019) access the Internet through fixed 
connections  and  54.7%  through  mobile  connections  (up  from  39.6%  in  2019).  In  2020,  the 
share of individuals purchasing or ordering goods and services online rose to 35.4%, a 12.7 
percentage point increase compared to 2019.  

The  authorities  should  ensure  that  markets  are  genuinely  competitive  including  through 
number  portability,  without  which  numbering  resources  cannot  be  used  effectively.  A 
decision obliging public institutions to use services provided by the publicly owned operator 
Kosovo  Telecom,  putting  private  providers  at  an  unfair  competitive  disadvantage,  was 
abolished. 

Kosovo achieved a satisfactory implementation of its 2013-2020 Digital Agenda. The follow 
up strategy has not been finalised yet. The authorities continued implementing the Regional 
Roaming Agreement (RRA), signed in April 2019. To facilitate implementation, the Telecom 
regulator adopted on 24 June 2021 a new administrative instruction on Implementation of the 
right use policy and Methodology of Assessment of Sustainability of Removing the Roaming 
Tariffs in  line with  the  RRA. As regards  information society, the  Kosovo government  has 
adopted the Law on Electronic Identification and Trust Services for Electronic Transactions, 
aiming  to  align  with  the  EU  Electronic  Identification,  Authentication  and  Trust  Services 
Regulation. The draft has yet to be adopted by the Assembly.  

Preparation  is  ongoing  for  a  new  Law  on  Network  Security  Measures  and  Information 
Systems,  to  ensure  alignment  with  the  relevant  EU  acquis.  The  computer  security  incident 
response team remains understaffed. The e-government portal is in place, but further efforts 
are needed for it to be able to deliver effective electronic services to citizens and businesses. 
(see section 2.1.2 Public Administration Reform)  

On  audio-visual  policy,  the  Independent  Media  Commission  (IMC)  failed  to  make  any 
progress on the digital switchover to align with EU standards. The Law on the IMC gives it 
broadly  sufficient  regulatory,  enforcement  and  monitoring  powers  to  ensure  pluralism  and 

84 

 
 
competitiveness  in  the  market.  However,  further  alignment  with  the  Audio-visual  Media 
Service Directive is necessary to extend its powers to online audio-visual media, and it lacks 
adequate staffing and resources to exercise its powers independently. It should also ensure it 
is transparent and inclusive in its decision-making, including through more consistent public 
consultation. In part due to a lack of information on media ownership and the distribution of 
advertising  funds,  the  IMC  does  not  impose  effective  sanctions  on  broadcasters  and  no 
significant enforcement interventions were undertaken. 

A review of the current Law on Radio Television of Kosovo (RTK) was launched in 2019 but 
the process is slow. The new law includes a realistic and sustainable funding model for RTK. 
The Assembly dismissed the RTK board in July 2021, citing the RTK’s management refusal 
to  be audited, and its  failure to  comply with  procurement procedures and compile a legally 
required long-term strategy. 

The  amendment  of  the  two  laws  should  be  done  in  an  open  and  transparent  manner,  in 
consultation with civil society organisations, media professionals and other interest groups. 

5.2.2. Taxation  

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

Kosovo has some level of preparation in the area of taxation. There was some progress 
in further increasing the excise duty on tobacco in line with EU legislation and with initial 
steps on implementing the Tax Administration modernisation plan. The recommendations 
in the previous report have not been fully addressed. In the coming year, Kosovo should in 
particular: 

  pursue  further  alignment  of  tax  legislation  including  the  personal  income  tax  (PIT), 

and value added tax (VAT) with the EU acquis;  

  ensure  more  systematic  implementation  of  risk-based  tax  audits  and  continue 
implementing  the  strategy  for  combating  the  informal  economy,  money  laundering, 
financing of terrorism and financial crime (2019-2023); 

  increase  cooperation  with  law  enforcement  and  judicial  institutions  to  ensure  timely 

adjudication of tax evasion and fraud cases, with emphasis on high risk sectors. 

On  indirect  taxation,  the  VAT  system  is  broadly  aligned  with  the  EU  acquis.  Kosovo 
applies  a  standard  18%  rate  and  a  reduced  8%  rate.  The  Law  on  VAT  needs  to  be  further 
harmonised  with  the  EU  acquis.  Considering  the  increasing  levels  of  e-commerce  activity, 
Kosovo  should  also  further  clarify  the  legal  framework  and  procedures  on  e-commerce 
taxation  and  increase  cooperation  with  other  tax  jurisdictions  on  exchange  of  information. 
Kosovo has maintained a relatively good operational capacity on lowering the average time 
of VAT refunds to 20 days down from the 30-day legal maximum; however, it should further 
improve the average time of VAT returns filing in the taxpayer’s registry.  In July 2020, the 
government adopted a calendar of progressive increases in excise duty on tobacco; however, 
the price remains relatively low compared to the EU.  

On direct taxation, no progress was made on amending the Law on personal income tax to 
remove  contradictory  provisions  and  further  align  it  with  EU  acquis.  On  administrative 
cooperation  and  mutual  assistance,  Kosovo  is  not  part  of  the  inclusive  framework  of  the 
OECD  Base  Erosion  and  Profit  Shifting  (BEPS).  However,  in  relation  to  double  taxation 
agreements, Kosovo has introduced some of the minimum standards of OECD BEPS such as 

85 

 
 
implementation of BEPS measures related to preventing treaty abuse and mutual agreement 
procedures. Kosovo should consider adopting the standards enshrined in the OECD-Council 
of Europe Convention on Mutual Administrative Assistance in Tax Matters. When reviewing 
its  existing  legislation,  it  should  also    align  the  tax  system/jurisdiction  with  the  rest  of  the 
minimum standards of the OECD BEPS inclusive framework. A review of the legislation and 
the existing tax agreements in this regard is underway. 

On operational capacity and computerisation, the Kosovo Tax Administration made some 
progress  in  streamlining  its  organisational  structure  to  improve  its  service  delivery.  It  has 
initiated actions aiming at strengthening of  professional capacities, however, these have to be 
stepped  up  especially  in  the  investigation  area.,  Further,  more  efforts  are  needed  to  ensure 
that  principles  of  transparency  and  merit-based  selection  processes  apply.  Any  political 
influence  on  the  appointments  in  the  tax  administration  undermines  the  confidence  of  the 
public in this service.  

Kosovo should continue to improve and implement its medium-term action plan to reduce the 
large  stock  of  tax  debt,  and  intensify  its  efforts  to  comply  with  risk-based  approach  on  tax 
audit  processes,  with  a  focus  on  regional  level.  Data  quality  and  exchange  of  data  across 
different agencies for the administration of taxes continue to remain a challenge. Therefore, 
authorities including the Kosovo Tax Administration, the Kosovo Business Registration and 
Cadastre  Agencies  and  the  Credit  Registry  of  the  Central  Bank  should  step  up  their 
coordination  and  improve  the  quality  of  their  registers.  The  Tax  Administration  has 
developed a good taxpayer service focus, in particular with the widespread use of e-filing and 
e-payment.  Between  2020  and  end-March  2021,  tax  evasion  to  the  value of  around  EUR  7 
million was detected. The number of anti-tax evasion operations increased to 290 compared 
with 176 operations carried out in 2019. Tax evasion and informality continue to hamper the 
economy  and  further  efforts  are  needed,  in  particular  on  risk-based  field  inspections  and 
inter-institutional  cooperation.  As  domestic  revenue  mobilisation  is  relatively  low,  Kosovo 
should  review  its  tax  policy  and  intensify  efforts  to  broaden  the  tax  base  by  further 
formalisation of the economy. The Tax Administration improved the investigation capacities 
on  serious  tax  fraud  allegations  and  established  a  new  Intelligence  Unit  within  the 
investigation department.  

5.2.3. Social policy and employment 

EU  social  rules  include  minimum  standards  for  labour  law,  equality,  health  and  safety  at 
work and non-discrimination. They also promote social dialogue at European Union level. 

Kosovo  is  at  an  early  stage  of  preparation  in  the  area  of    social  policy  and  employment. 
There was limited progress during the reporting period, in particular on implementation of 
health and safety regulations. The rate of fatal incidents remains concerningly high.   

Last  year’s  recommendations  were  not  fully  implemented  and  remain  valid.  In  the  coming 
period, Kosovo should in particular: 

  take  steps  to  establish  and  implement  the  Youth  Guarantee  by  developing  a  Youth 

Guarantee Implementation Plan in line with the EU model and guidance; 

  adopt  and  enforce  the  Law  on  Labour  in  line  with  relevant  EU  acquis,  in  particular  in 

relation to non-discrimination in employment and parental leave;  

  adopt and implement the Law on the Socio-Economic Council and enforce rules on health 

and safety at work to ensure a decrease in workplace accidents; 

86 

 
 
  pursue  thorough  reforms  in  the  area  of  the  social  assistance  schemes  to  ensure  better 
targeting and impact on poverty and improve delivery of social services in municipalities. 

The adoption of the revised Law on labour to ensure further alignment with the EU acquis, 
including EU rules on non-discrimination in employment and social policy and maternity and 
paternity leave, is still pending.  

Half of those benefiting from social assistance are children under the age of 18, but less than 
10% are children with special needs. As many as 10% of children in Kosovo are involved in 
work,  of  whom  6.8%  work  in  hazardous  conditions,  with  the  problem  particularly  evident 
among the Roma and Ashkali communities.  

In  2020,  Kosovo  further  aligned  its  legislation  with  the  EU  Directives  on  Occupational 
Health  and  Safety  at  Work,  but  implementation  remains  weak,  particularly  in  the  private 
sector. Only a small portion of workers, mainly in the private sector, are covered by health 
insurance  or  insurance  against  work-related  accidents  or  illnesses.  The  Labour  Inspectorate 
carried  out  an  increased  number  of  inspections  but  with  very  little  impact  on  the  ground, 
particularly as  attention was shifted to  COVID-19  related inspections. Plans to  increase the 
capacities  with  more  inspectors  have  not  materialised.  The  construction  sector  remains  the 
most  problematic.  The  number  of  accidents  at  work  increased  in  2020  to  177  accidents,  of 
which 55 accidents serious injuries and 11 deaths.  

On  social  dialogue,  Kosovo  should  adopt  a  new  Law  on  the  Socio-Economic  Council  to 
improve its capacities, decision-making and overall performance A new  General  Collective 
Agreement  is  being  negotiated.  The  capacity  of  social  partners,  in  particular  that  of  trade 
unions, remains limited. Public sector trade unions were relatively active over the past year, 
in particular in demanding salary increases and organising social dialogue trainings for local 
branches. The private sector unions are under pressure, with cases of retaliation for industrial 
action; as a result, they are generally less organised.  

On employment policy, although the targets of the 2018-2022 Sectoral Strategy (Ministry of 
Labour  and  Social  Welfare)  and  the  2018-2020  Youth  Employment  Action  Plan  were 
modest,  evaluations  show  a  low  implementation  rate.  Capacities  for  implementing, 
monitoring and evaluating such strategies continue to be under-developed and dependent on 
external  support.  Taking  into  account  evaluation  findings  and  employment  challenges 
resulting  from  the  COVID-19  pandemic,  Kosovo  needs  to  amend  the  Youth  Employment 
Action  Plan  and  revise  the  current  Employment  Strategy.  Kosovo  has  commited  to 
implement the Youth Guarantee Scheme, to address the high unemployment rates among its 
youth.  It  has  still  to  start  the  concrete  preparations,  starting  with  the  apointment  of  a 
coordinator and coordinating body and preparation of a YG implementation plan.    

Kosovo continues to face structural  labour market  challenges stemming  from  the mismatch 
between the rapid growth of the working-age population and job creation, the persistently low 
participation of women and generally precarious employment opportunities (fewer than half 
of employees have permanent work contracts).  

Education attainment is a key predictor of employment. In 2020, the employment rate (15-64) 
was  59.9%  among  people  with  tertiary  education  but  only  11.3%  for  those  with  primary 
education.  Although  women  tend  to  attain  higher  education  levels  (e.g.  over  40%  active 
women  hold  tertiary  qualifications  against  20%  of  active  men),  they  remain  under-
represented  in  employment.  Young  people  (15-24  years-old)  remain  most  affected  by 
unemployment and inactivity. In 2020, a third of them were not in employment, education or 
training  (33.6%).  Youth  unemployment  remains  high  (49.1%),  particularly  among  women. 

87 

 
 
Demographic  pressures,  joblessness  growth  pattern,  a  propensity  towards  emigration  and 
poor  education  are  key  factors  in  the  precarious  position  of  young  people.  Kosovo  has 
endorsed the Western Balkans Declaration on ensuring sustainable labour market integration 
of  young  people  (8  July  2021)  and  committed  to  take  concrete  steps  to  gradually  establish 
and  implement  the  Youth  Guarantee  scheme.  The  first  expected  deliverable  is  the  Youth 
Guarantee Implementation Plan. 

The overall activity rate stood at 38.3% in 2020, a decrease from 40.5% in 2019. The number 
of  registered  unemployed  people  increased  to  over  120  000  compared  to  74  488  in  2019. 
Unemployment rates in 2020 were 25.9% (25.7% in 2019). The rates are persistently higher 
among women, 32.3% (34.4% in 2019) and 23.5% among men (22.6% in 2019). There was a 
decrease in numbers of employees with long-term contracts (42.3% 2020, compared to over 
49%  in  2019)  and  increase  in  temporary  contracts  (57.7%  in  2020  compared  to  54.7%  in 
2019). The indicators that still give rise to most concerns are the high inactivity rate (61.7% 
in 2020) and youth unemployment (49.1%). Unemployment is even higher (over 90%) in the 
Roma and Ashkali communities. Members of these communities usually work in the informal 
sector,  holding  insecure,  low-skilled  and  low-status  jobs  and  few  of  them  are  registered  as 
unemployed.  Self-employment  slightly  increased  to  22.1%  in  2020  compared  to  21.6%  in 
2019.  

The  Employment  Agency,  the  key  body  implementing  employment  policy,  continued    to 
consolidate its management and operational procedures and data management, and to refine 
the  portfolio  of  active  labour  market  programmes.  However,  further  work  is  still  needed  to 
improve  its  operational  capacity,  including  as  regards  monitoring,  evaluation,  as  well  as 
employment  counselling,  including  for  priority  groups  such  as  youth  or  long-term 
unemployed.  Further  progress  was  achieved  in  improving  the  labour  market  information 
system,  by  launching  the  Kosovo  Labour  Market  Barometer,  to  support  evidence-based 
policy making and planning. In May 2021 Kosovo launched the Skills Barometer, as a tool 
for planning of VET and determining priority sectors in targeted regions. Although half of the 
unemployed  have  a  low  level  of  education  attainment,  they  are  under-represented  among 
participants in the Agency’s active labour market measures. 

There  were  no  developments  as  regards  preparations  for  the  European  Social  Fund.  (See 
Chapter 22 - Regional policy and coordination of structural instruments). 

n social inclusion and protection, Kosovo’s spending on social protection amounts to 6% of 
GDP, but less than 0.5% of GDP is allocated for the social assistance scheme as most of the 
amount is spent on old-age and war veterans’ pensions. The scheme is the only programme 
that targets  poverty reduction and identifies beneficiaries on the basis of  household  income 
and  assets.  Its  poverty  reduction  impact  for  families  with  children  is  severely  limited.  The 
authorities  should  initiate  a  thorough  reform  of  the  social  assistance  scheme,  including  the 
war veteran pension scheme in order to bring its costs into line with the legislated cap.  

Funding  allocation  by  municipalities  for  social  services  remained  a  problem  in  2020.  The 
central  authorities  have  yet  to  introduce  changes  in  the  Law  on  Local  Finances  to  earmark 
funding  from  the  general  grant  for  municipalities.  Furthermore,  municipalities  should 
improve  service  planning  and  delivery,  data  collection  and  integrated  care.  Care  for  the 
elderly  remains  a  serious  issue.  Shelters  for  domestic  violence  remain  poorly  funded  and 
stretched  to  their  limits  with  new  cases.  No  specific  actions  have  been  undertaken  to 
significantly change public perceptions towards LGBTIQ people. 

Around  18%  of  Kosovo's  population  lives  below  the  poverty  line  (EUR  45  per  month  as 
defined by the World Bank), with 5.1% percent of the population below the extreme poverty 

88 

 
 
line. Children from poor households, socially vulnerable communities and those with special 
needs lack equal access to vital health and education services due to financial barriers.  

On non-discrimination in employment and social policy, Kosovo has to intensify efforts to 
address discrimination against women, among else by adopting implementing legislation for 
the Law on Protection from Discrimination. Institutions continue to perform poorly when it 
comes to processing and investigating cases of discrimination, including sexual violence and 
gender discrimination at the working place. 

On  equality  between  women  and  men  in  employment  and  social  policy,  gender-based 
discrimination continued to be widespread in recruitment, promotion, pay, contract length. In 
2020, the employment rate for the population aged 20-64 was 16% for women and 48.8% for 
men,  resulting  in  a  very  high  gender  employment  gap  of  32.8  percentage  points.  Limited 
access  to  childcare  and  flexible  working  arrangements,  as  well  as  regulations  which 
discourage  the  recruitment  of  women  (e.g.  lenghtey  maternity  leave)  remain  important 
barriers. Other challenges faced by women, especially in rural areas, are the lack of care for 
the elderly, discrimination when it comes to access to property and gender-based violence.   

5.2.4. 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-sized 
enterprises (SMEs).  

Kosovo remains moderately prepared in this area. Some progress was made in maintaining 
a functioning business environment during the COVID-19 crisis and lockdowns, which took 
a heavy toll on Kosovo’s economy in 2020. Kosovo’s efforts to remove structural barriers to 
businesses have been stagnant as attention was focused on fighting the immediate effects of 
the pandemic. The National Council for Economy and Investment has become a more regular 
and effective forum for public-private business dialogue. The Kosovo Credit Guarantee Fund 
has  further  facilitated  access  to  finance  by  increasing  its  coverage  of  credit  guarantee  of 
loans.  

There was some progress in the recommendations from the 2020 report.  in the coming year 
Kosovo should: 

  adopt  and  start  implementing  a  strategy  to  support  Kosovo’s  business  environment  and 

industrial development; 

  reorganise  the  Kosovo  Investment  and  Enterprise  Support  Agency  (KIESA)  to  improve 
its  support  schemes  and  provision  of  advisory  services  to  SMEs  and  add  an  investor 
aftercare unit;  

Kosovo’s enterprise and industrial policy lacks a strategy aiming to improve the business 
environment and promote industrial development. The capacity of the Ministry of Industry, 
Entrepreneurship  and  Trade  to  provide  industrial  policy  advice  is  limited,  even  though  this 
should  be  its  main  function.  The  Kosovo  Investment  and  Enterprise  Support  Agency 
(KIESA)  is  responsible  for  implementing  Micro,  Small,  and  Medium  Enterprise  support 
programmes,  attracting  foreign  direct  investment  and  following  up  the  Small  Business  Act 
recommendations. To date, KIESA is unable to cater all these needs, which are fulfilled by 
other  organisations.  Kosovo  does  not  have  a  streamlined  process  to  handle  investors’ 
grievances to prevent disputes and retain investments.  Its reorganisation with clear strategic 
goals is long overdue. The stepping up of the role of the National Council for Economy and 
Investment as the dialogue platform between the private sector and the government has been 
a welcome move.  

89 

 
 
The COVID-19 crisis  took a heavy toll  on Kosovo’s economy in  2020.  Sluggish  growth  at 
the beginning of the year turned into a recession due to the pandemic-related lockdown and 
travel  restrictions.  On  the  back  of  severely  contracting  service  exports  and  investment, 
economic  activity  fell  by  an  estimated  6.7%  in  2020.  Kosovo  authorities  have  provided 
financial support via the economic recovery package, which is largely insufficient to mitigate 
the  economic  fallout  and  private  sector  backdrop.  The  Government  distributed  EUR  60 
million  to  all  active  businesses,  using  a  flat  rate  to  subsidise  salaries  without  taking  into 
account the financial state of the benefiting economic operator. .  

Courts continue to  struggle to  ensure a timely and coherent  adjudication of cases in  courts. 
The  draft  legal  framework  to  establish  a  Commercial  Court  for  resolving  trade  disputes  of 
businesses  and  foreign  investors  was  prepared  during  2020.  However,  the  overall 
implications and effective implementation of this initiative have been only partially assessed, 
while financing from the annual budget still needs to be foreseen.  

Some  efforts  were  made  towards  simplifying  licences  and  permits  through  repealing  a 
number  of  unnecessary  procedural  requirements.  However,  coordination  between  central 
institutions responsible for licenses and permits remains limited.  

Although the current legislation on foreign investment foresees to treat foreign nationals and 
companies on equal basis with local investors, in practice foreign citizens and legal persons 
encounter difficulties to register property rights. In line with its SAA commitments,  Kosovo 
still has to amend the legal framework to grant national treatment to EU nationals acquiring 
real  estate  in  Kosovo.  Initial  steps  were  made  towards  amending  legislation  on  strategic 
investments.  

Amendments  to  the  Law  on  economic  zone  were  prepared.  The  decision  to  establish  the 
Malisheva  Economic  Zone  was  repealed  as  the  zone  had  no  feasibility  study.  Decision-
making on the establishment of economic zones remains based on unclear criteria and lacks 
economic analysis.  On access to finance, the lack of easily accessible and affordable credit 
serves as a substantial barrier to the growth of SMEs in Kosovo. The Central Bank of Kosovo 
placed  a  temporary  moratorium  and  postponed  loan  payments  because  of  the  COVID-19 
crisis, which alleviated some financing issues in the economy. 

Because  of  the  delayed  legislative  approval,  the  increase  of  additional  security  for  loans 
issued to SMEs via the Kosovo Credit Guarantee Fund has only been possible as of January 
2021.  Guarantee  windows  totalling  EUR  40.7  million  focus  on  lending  support  to  the 
manufacturing,  agribusiness,  services,  trade  sectors,  with  a  particular  focus  on  women  in 
business and start-ups.  

In    total,    644  MSMEs  and  four  major  investments  were    financed    from    the    Enterprise 
Development & Innovation Facility (EDIF), and over 1 200 transactions benefited from the 
programme for  the  competitiveness  of  SMEs  (COSME)  since  these  instruments  were  
set  up.  Organisations  from  Kosovo  successfully  participate  in  the  COSME  financed 
Enterprise  Europe  Network  and  Erasmus  for  Young  Entrepreneurs.  Efforts  are  needed  on 
raising  private  sector  awareness  on  how  to  make  better  use  of  COSME  and  EDIF.  Kosovo 
has officially requested to join the Single Market Programme 2021-2027.  

On  sectoral  policies,  the  approach  in  policy-making  is  not  sector-specific,  resulting  in  the 
lack of specific sector policies and programmes.  

90 

 
 
 
 
 
5.2.4. Science and research 

The  EU  provides  significant  support  for  research  and  innovation.  All  Member  States  can 
benefit  from  the  EU’s  research  programmes,  especially  where  there  is  scientific  excellence 
and solid investment in research. 

Kosovo  is  at  an  early  stage  of  preparation  in  the  area  of  science  and  research.  Limited 
progress was made during the reporting period. Kosovo further improved its performance in 
Horizon 2020.  

Since the recommendations of the previous report were not fully addressed, Kosovo should in 
particular: 

  develop a strategic approach to the development, prioritisation and promotion of scientific 
research  and  innovation  and  ensure  higher  government  spending  on  research;  seek  to 
stimulate  investment  from  the  private  sector  by  completing  a  Smart  Specialisation 
Strategy; 

  continue efforts to increase participation in the EU’s Horizon Europe programme; 

  provide statistical data on numbers of researchers, percentage of GDP spent on research 

and innovation, and performance related to the European Research Area priorities. 

Kosovo’s research and innovation policy  remains nascent.  It lacks a strategic approach to 
develop, prioritise and promote research activities. The legal framework, namely the Law on 
scientific  research  activities  and  the  Law  on  scientific  innovation,  transfer  and  technology 
lacks efficient implementation.  

Work is ongoing on revising and upgrading research strategies, as well as taking advantage of 
the  available  research  and  programmatic  partnership  grants  by  pairing  with  international 
partners.  

In November 2020, Kosovo joined the GÉANT research infrastructure. Work is ongoing to 
establish  a  Kosovo  register  of  researchers  and  to  collect  statistics  on  research  and 
development,  including  in  higher  education  institutions.  A  Smart  Specialisation  Strategy 
(S3) is under development since 2019. A thematic analysis identifying scientific priorities has 
been  done.  A  new  online  platform  serves  as  a  communication  platform  between/among 
stakeholders.  

The  sector  continues  to  be  underfunded,  with  public  research  spending  amounting  to  only 
0.01%  of  GDP,  despite  a  0.7%  target  mandated  by  law.  An  increased  budget  in  this  area 
would  support  the  economic  recovery,  also  given  the  relevance  of  innovation  to  the 
Economic  and  Investment  Plan  for  the  Western  Balkans.  The  quality  of  programmes 
preparing postgraduates for research careers remains unsatisfactory (see 6.13 Education and 
culture).  

There was no progress  on integration into the  European Research Area. Kosovo needs to 
submit  reliable  statistics  to  monitor  progress  in  this  field.  On  framework  programmes, 
Kosovo has upgraded its system of National Contact Points, in line with EU requirements and 
will be associated to Horizon Europe.  

Kosovo  entities  have  participated  20  times  in  18  collaborative  actions,  Marie  Skłodowska-
Curie  actions  and  European  Research  Council  actions  of  Horizon  2020,  receiving  EUR  2.5 
million. Despite 2019 being by far Kosovo’s best year of participation with a success rate of 
20.4%,  well  above  the  12%  overall  Horizon  2020  average,  its  performance  could  still 
improve.  Kosovo  participates  in  the  European  Cooperation  in  Science  and  Technology 

91 

 
 
(COST), which enables researchers to participate easily in research and innovation meetings 
all over Europe.  

5.2.5. 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. 

Kosovo is at an early stage of preparation in the field of education and culture. There was 
limited  progress  over  the  past  year  and  the  quality  of  education  needs  to  be  improved 
considerably.  

Last  year’s  recommendations  were  only  partially  implemented  and  remain  mostly  valid.  In 
the coming year, Kosovo should in particular: 

  systematically  apply  quality  assurance  mechanisms  at  all  education  levels,  improve 
access  to  quality  education  at  pre-school  level  and  for  disadvantaged  groups,  improve 
quality assurance in higher education by meeting the recommendations of the European 
Association  for  Quality  Assurance  in  Higher  Education  and  revising  the  relevant 
legislation (such as  the Law on higher education  and the  Law on Kosovo Accreditation 
Agency); 

  finalise  the  implementation  of  the  new  curricular  framework  for  basic  education  with 

quality textbooks and by providing sustainable training to teachers; 

  increase  the  provision  of  quality  vocational  education  and  training  for  professions  in 

demand;  

  Take steps to establish and implement Youth Guarantee by developing a Youth Guarantee 

Implementation Plan in line with the EU model and guidance. 

Kosovo’s  public  spending  on  education  in  2020  remained  unchanged,  at  4.7%  of  GDP. 
However, expenditure per student remains insufficient, with expenses focused on salaries and 
capital  expenditures  rather  than  quality  education.  It  is  estimated  that  a  total  of  9,070  (or 
2.8%)  children  were  not  involved  in  distance  learning  organised  during  the  period  March-
June  2020,  during  the  pandemic,  due  to  lack  of  access  to  learning  tools  and  equipment. 
Authorities should increase financial support to scale up community-based social and health 
services  for  children  with  disabilities  and  increase  efforts  to  integrate  them  effectively  into 
educational institutions. University classes were organised online during the pandemic.  

Enrolment  of  children  in  compulsory  education  -  primary,  lower  and  upper  secondary 
education  -  is  universal  (100%  attending  grades  1-5,  90.5%  5-9  and  86.6%  9-12). 
Participation of children in pre-school education and care (age 0<5) remains low, despite an 
increase  to  8.5%  from  6.2%,  and  well  below  the  OECD  average  (over  87%)  or  the  2020 
Education  and  Training  targets  (95%).  A  persistent  problem  remains  the  small  number  and 
uneven distribution of pre-school institutions in Kosovo (44 public kindergartens in 23 out of 
38 municipalities), lack of appropriate infrastructure and lack of didactic materials. The new 
Law  on  Pre-school  Education  has  not  been  approved  and  the  curriculum  for  this  level  of 
education still has to be re-developed. The proportion of students in higher education remains 
high, but the graduation rate is still low.   

The quality of education remains poor, as evidenced by the last two OECD Programme for 
International  Student  Assessment  (PISA)  evaluations,  with  Kosovo  ranking  third  from 
bottom.  Kosovo  participated  in  the  2019  Trends  in  International  Mathematics  and  Science 

92 

 
 
Study  (TIMSS),  and  in  participating  in  the  in  the  2021  Progress  in  International  Reading 
Literacy Study (PIRLS) and PISA 2022. In TIMSS 2019, Kosovo was among the 10 poorest 
performers. Reforms  are still lagging behind  due to  the lack of suitable textbooks, teaching 
materials  and  sustainable  professional  development  schemes  for  teachers.  Another  major 
issue is the mismatch between education outcome and skill requirements.  

Higher  education  institutions  should  invest  more  in  research  and  appraise  the  scientific 
achievements,  publications  and  performance  of  teachers.  Academic  integrity  remains  an 
issue,  despite  improvements  as  a  result  of  public  scrutiny.  Progress  was  made  in  meeting 
minimum  transparency  criteria  (according  to  international  norms)  of  higher  education 
institutions.  

Kosovo should adopt the new Law on Higher Education that would strengthen the autonomy 
and academic integrity of higher education institutions and improve quality assurance.  

The  Kosovo  Accreditation  Agency  (KAA)  continued  efforts  to  regain  membership  of  the 
European Association for Quality Assurance in Higher Education and the European Quality 
Assurance Register for Higher Education. The capacities of the Agency were increased with 
four additional staff in 2020 and another eight vacancies will be open in the course of 2021. 
The  Agency  managed  to  complete  the  full  accreditation  cycle  for  the  2021-2022  academic 
year,  reducing  the  number  of  programmes  and  institutions,  based  on  quality  criteria.  New 
members  were  appointed  to  the  KAA  Board,  having  been  selected  through  open  and 
transparent procedures, following the resignations of five Board members. 

The  number  of  secondary  schools  students  choosing  vocational  education  and  training 
(VET) remains high but nearly all of them enrol in higher education afterwards. The statistics 
for  the  2019/2020  academic  year  show  that  out  of  77,907  students  enrolled  in  upper 
secondary education, 40,817 students are enrolled in vocational education schools, compared 
to  37,090  students  enrolled  in  gymnasiums.  The  problems  of  the  VET  system  need  to  be 
addressed,  specifically  the  lack  of  practical  and  applied  courses,  lack  of  teaching  materials 
and textbooks, insufficient cooperation between vocational schools and business entities, and 
most importantly, the  absence of adequate professional development  opportunities for VET 
teachers.  Some  27  new  occupational  standards  were  approved  by  National  Qualifications 
Authority in 2020, bringing the total number of approved occupational standards to 122. 

More  efforts  are  required  to  provide  children  with  disabilities  access  to  quality  education. 
Currently,  only  86  supporting  teachers  and  71  assistants  are  working  with  children  with 
special needs. Lack of sufficient assistants forces parents to engage such services with their 
own finances. In an effort to address this, the Ministry has organised training of 26 teams for 
assessment of children with special needs. Further capacity building will continue.  

The  dropout  rate  remains  higher  among  Roma,  Ashkali  and  Egyptian  children  though 
statistics  are  unreliable.  Kosovo  must  increase  support  for  municipal  dropout  prevention 
teams. Kosovo needs to pay more attention to learning progress and academic achievement in 
these communities, while they continue to face instances of discrimination in universities and 
halls  of  residence.  After  several  years  without  budget,  the  Ministry  has  opened  a  call  to 
support 
the 
implementation  is  due in October 2021.  Budget  for the next  fiscal  year is also  planned for 
this purpose.  

learning  centres  assisting  children  from 

those  communities  and 

the 

Participation in Erasmus+ under call 2020 was increasing moderately compared to 2019, with 
141  selected  projects  in  International  Credit  Mobility  involving  around  1  700  students  and 
staff  going  to  and  from  Kosovo.  There  was  one  Erasmus  Mundus  Joint  Master  Degree 
selected  in  2020  involving  a  higher  education  institution  in  Kosovo,  and  three  selected 

93 

 
 
projects  in  Capacity  Building  in  Higher  Education  with  coordinating  higher  education 
institutions from Kosovo.  

On  culture,  Kosovo  should  maintain  efforts  to  meet  the  standards  of  the  2005  UNESCO 
Convention  on  the  Protection  and  Promotion  of  the  Diversity  of  Cultural  Expressions. 
Progress  has  yet  to  be  made  on  drafting  the  Law  on  cultural  heritage,  reflecting  its 
commitments  under  Annex  V  of  the  Ahtisaari  Plan.  The  Implementation  and  Monitoring 
Council needs to resume meetings and identify joint solutions to be reached between Kosovo 
and the Serbian Orthodox Church. 

Kosovo currently participates in the Creative Europe programme, as a partner. Kosovo is to 
apply for the MEDIA sub-programme and initiate efforts to apply for full membership, once 
legislation is aligned with the EU Audio-visual Media Service Directive. 

5.2.5. Customs  

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

Kosovo is moderately prepared in the area of customs. It made  some progress during the 
reporting  period  by  continuing  to  improve  systematic  exchange  of  excise  data  with  other 
customs  jurisdictions  and  by  enforcing  customs  measures,  such  as  for  the  protection  of 
intellectual property rights (IPRs). As the recommendations in the previous report have been 
addressed to a limited extent, in the coming year Kosovo should in particular: 

  pursue  further  alignment  with  the  Union  customs  code  and  the  excise  acquis,  including 

the Customs and Excise Code.  

  continue to carry out field inspections and coordinated actions between Kosovo Customs 
and other law enforcement agencies in the fight against customs fraud and tax evasion;  

  phase  out  the  use  of  privately  owned  inland  customs  terminals  and  remove  the  fees 

charged to exporters/importers, in accordance with EU customs legislation. 

In the area of customs legislation, there was no progress in the progressive alignment of the 
Customs  and  Excise  Code  with  that  of  the  Union  customs  code,  as  recommended  in  the 
previous  report.  Due  to  status  issues,  there  was  no  progress  on  Kosovo’s  application  to 
become  an  observer  under  the  Common  Transit  Convention.  Kosovo  has  not  ratified  the 
Regional Convention on Pan-Euro-Mediterranean preferential rules of origin but it applies its 
provisions. Kosovo Customs continues to participate in the systematic electronic exchange of 
excise  data  among  Western  Balkan  economies.  It  has  been  further  improved  automated 
exchange  of  information.  The  legislation  on  customs  measures  governing  intellectual 
property rights (IPRs) and export controls for cultural goods is aligned with the EU  acquis, 
but the legislation on drug precursors requires further alignment. Kosovo Customs continues 
to progress on trade facilitation with approving the fourth authorised economic operators and 
continued to improve its systems, procedures and administrative capacities in this area. Initial 
steps were taken in establishing an inland custom terminal in public premises. However, no 
progress  was  made  on  removing  the  associated  fees  charged  to  every  truck  to  discharge 
custom obligations when entering the inland terminals located in  privately owned facilities. 
These  fees,  which  are  not  in  line  with  the  SAA  provisions  and  EU  acquis,  need  to  be 
abolished.  

Kosovo Customs maintains a reasonable administrative and operational capacity, in spite 
of further reduction on customs revenues from certain products as a result of implementing 

94 

 
 
the  Stabilisation  and  Association  Agreement  (6.4%  in  2020  –  yet  largely  mitigated  by 
increased trade under the Agreement).  

Kosovo Customs  should strengthen its administrative and professional capacity, and  ensure 
that merit-based and transparent transfers and selection processes apply. As in other revenues 
services,  any  political  influence  on  the  appointments  in  the  customs  administration 
undermines  the  public’s  overall  confidence  vis-a-vis  the  service.  Continuous  work  on 
paperless approach and an e-payments system, including voluntary declarations by businesses 
will  help  eliminate  administrative  barriers  and  lead  to  a  streamlining  of  customs  clearance 
procedures.  Such  approach  would  help  decrease  the  currently  high  number  of  business 
complaints  against  the  administration’s  decisions.    Kosovo  Customs  should  continue  to 
implement  its  medium  term  strategic  plan  (2019-2023)  aimed  at  strengthening  its  capacity, 
modernising  revenue  collection  and  facilitating  trade  and  the  fight  against  tax  evasion, 
organised crime and other illicit activities. 

While Kosovo Customs work on the fight against illegal cross-border activities, including the 
smuggling  of  goods  such  as  narcotics  and  hazardous  materials,  including  that  of  IPR 
infringements,  additional  measures  are  needed  to  improve  its  effectiveness  and  efficiency. 
Among  these,  the  need  to  step  up  the  implementation  of  its  anti-corruption  plan,  conduct 
more  investigations  and  asset  declarations  checks  filled  by  customs  officials.  Increased 
cooperation is noted in the fight against the informal economy and customs fraud between the 
Kosovo  Customs  and  other  law  enforcement  authorities  and  other  line  institutions.  Kosovo 
authorities should step up the implementation  of the strategy  against the  informal economy 
and regularly report on achievements.  

Only  two  of  the  six  permanent  Common  Crossing  Points  (CCPs)  have  been  established 
(Merdare and Mutivodë/Mutivode). Facilities of two EU-funded crossing points Merdare and 
Mutivodë/Mutivode are ready. However, at the latter Serbian authorities are still working in 
old  interim  facilities  and  in  the  former  only  one  side  (exit  from  Kosovo)  is  open,  because 
Serbia has not manned the other side (exit from Serbia) despite agreeing to take possession of 
the  newly  constructed  EU-funded  facilities  at  the  Merdare  crossing  point  in  October  2020.  
(See section on normalisation of relations between Kosovo and Serbia).  

5.3. 

 The Green Agenda and sustainable connectivity  

Overall,  Kosovo  has  some  level  of  preparation  on  areas  related  to  the  Green  Agenda  and 
sustainable  connectivity.  Kosovo  is  actively  participating  in  the  Transport  Community  and 
Energy Community meetings. Like all Western Balkans, Kosovo endorsed the Green Agenda 
for  the  Western  Balkans  at  the  Sofia  Summit  in  November  2020.  It  made  some  progress 
during  the  reporting  period  in  the  energy  sector,  notably  with  the  increased  investments  in 
renewables. Despite this progress, Kosovo remains heavily reliant on coal. Limited progress 
was  made  in  the  areas  of  transport,  environment  and  climate  change.  Kosovo  needs  to 
substantially  increase  its  ambition  to  properly  implement  EU  standards  on  transport  and 
environment. Administrative capacities needs to be reinforced in all sectors. Strategies, action 
plans and legislation in these sectors need to be more consistent among themselves and with 
the principles and objectives of the Green Agenda.   

5.3.1.  Transport policy 

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. 

95 

 
 
Kosovo  remains  at  an  early  stage/has  some  level  of  preparation  in  the  area  of  transport 
policy  and has  achieved  limited progress,  notably on  road safety.  As all recommendations 
from the previous report are still pending, in the coming year Kosovo should in particular: 

  continue  its  efforts  to  prevent  road  accidents  by  targeting  the  reduction  of  fatalities, 
investing  in  road  maintenance,  prevention  campaigns  and  the  establishment  of  a 
systematic monitoring mechanism for the collection of crash data; 

  strengthen  the  capacity  of  the  railway  regulator,  ensuring  its  financial  and  operational 

independence and updating its legal framework; 

  continue  efforts  to  align  Kosovo’s  Aviation  Regulation  with  the  European  Common 

Aviation Area agreement; 

  adopt legislation and implementing regulations on the Intelligent Transport System (ITS), 
aligning  with  the  acquis  on  the  establishment  of  common  rules  for  certain  types  of 
combined transport of goods between Member States and, ensure sufficient capacity and 
resources for its implementation and continue efforts to transpose the EU passenger rights 
acquis across all modes of transport; 

On  general  transport  issues,  Kosovo  maintained  its  level  of  involvement  in  the  Transport 
Community,  despite  the  limitations  imposed  by  the  COVID-19  pandemic.  Kosovo  should 
continue  its  engagement  with  the  Permanent  Secretariat  of  the  Transport  Community  and 
speed up the process of the appointment of the road and rail technical committee members. 
Kosovo  should  pay  its  share  of  financial  contribution  to  the  Transport  Community 
Secretariat. 

The  implementation  of  Kosovo’s  2015-2025  multimodal  transport  Strategy  and  action  plan 
was affected by the changes of government as well as the impact of the COVID-19 pandemic. 
The  document  needs  to  be  updated  to  reflect  higher  ambition  for  environment,  greener 
transport  projects,  civil  aviation  and  intelligent  transport  system  (ITS).  The  staffing  of  the 
independent  investigative  bodies  of  air  and  railway  accidents  needs  to  be  strengthened. 
Decisive  progress  will  be  needed  to  match  the  objectives  of  the  Green  Agenda  for  the 
Western Balkans in the area of transport. 

There  has  been  little  progress  on  the  legal  framework  related  to  road  transport.  Further 
efforts to  align with the EU road transport  acquis is necessary. Kosovo started to prepare a 
Strategy for road maintenance. However, further work is needed to extend road maintenance 
planning  to  the  entire  network.  The  implementation  of  legislation  continues  to  face  delays 
due  to  a  shortage  of  inspectors  and  qualified  staff  the  Ministry  of  Infrastructure.  Kosovo 
should continue to identify high-risk road axes and implement in full the recommendations to 
improve the quality of the road network.  

Kosovo  has  improved  its  traffic  accident  figures  (the  number  of  fatalities  per  million 
inhabitants  is  43).  Kosovo  should  fully  implement  the  actions  set  out  in  the  Transport 
Community  Treaty  Road  Safety  regional  action  plan  adopted  in  October  2020.  In  addition, 
Kosovo should develop a comprehensive road safety strategy for 2021-2030, which includes 
targets and more reliable collection of crash data. This initiative needs to be reflected by the 
development of a proper institutional set-up with the establishment of a lead Agency for road 
safety. The CONNECTA report recommendations on rail and road maintenance, road safety 
inspections, intelligent  transport systems  and the  establishment of a crash data system  have 
not yet been implemented. Further work needs to be done to adopt the Road Safety Inspection 
guidelines and develop the three-year inspection plan, the establishment of the Road Accident 
Records database and a permanent awareness public campaign on road safety.  

96 

 
 
The  legislative  framework  of  Kosovo’s  rail  transport  system  needs  to  be  updated,  in  line 
with  the  objectives  established  in  the  Transport  Community  Treaty  Rail  Transport  Action 
Plan  endorsed  in  October  2020.  Efforts  are  needed  to  further  align  legislation  with  the  EU 
single  rail  market  acquis  including  opening  the  market  for  domestic  passenger  transport 
services  by  rail  and  the  governance  of  the  railway  infrastructure.  Rail  networks  extension, 
maintenance and rehabilitation are necessary to increase the number of passengers and freight 
transported.  

Kosovo  should  ensure  the  signature  and  implementation  of  the  2020-2024  financial 
agreement with INFRAKOS, the railway network operator. A new managing board needs to 
be appointed at INFRAKOS. 

On air transport, Kosovo is part of the European common aviation area and covered by the 
single European sky arrangements. The sector continues to face a number of challenges from 
Kosovo’s  non-membership  of  several  international  civil  aviation  organisations.  Lack  of 
revenue  from  upper  airspace  management  and  institutional  weakness  of  the  Air  Navigation 
Service  Agency  and  the  Civil  Aviation  Authority  remains  a  challenge.  These  institutions 
should be strengthened, with the appointment of managers respecting merit-based recruitment 
principles.  The  Civil  Aviation  Authority  reorganisation  and  administrative  reforms  should 
take into account both the commitments made on public administration reform principles, as 
well  as  the  specific  circumstances  and  requirements  of  the  aviation  sector.  Additionally, 
Kosovo  has  continued  its  progressive  alignment  with  the  EU  acquis  of  the  European 
Common  Aviation  Area  Agreement  and  should  continue  this  work  in  order  to  fulfil  all 
requirements. 

5.3.2.  Energy 

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

Kosovo  has  some  level  of  preparation  in  the  field  of  energy.  Kosovo  has  made  some 
progress, with the increase of investments in renewable energy, achieving 2020 goals under 
the  Energy  Community  Treaty  and  developed  interconnection  with  the  region’s  energy 
networks.  

In line  with  the principles and priorities of the  Green  Agenda  for the  Western Balkans, the 
review  of  the  energy  Strategy  and  Action  Plan  should  ensure  their  coherence  with  the 
integrated National Energy and Climate Plan and put in place policies and measures to reach 
those targets in the most cost-effective way. Kosovo remains heavily reliant on coal, which in 
addition  to  being  a  dominant  greenhouse  gases  emission  source,  causes  serious  health  and 
environmental hazards. 

Recommendations  from  the  previous  report  were  only  partially  addressed.  In  the  coming 
year, Kosovo should in particular:  

  continue the environmental upgrade of the Kosovo B thermal power plant and works for 

decommissioning of the Kosovo A thermal power plant; 

  continue the roll out of the Energy Efficiency Fund, implement energy efficiency projects 
in  municipalities  and  introduce  energy  efficiency  incentives  in  residential  and  private 
sectors; 

  update Kosovo’s energy strategy with a main focus on renewables, energy efficiency and 
decarbonisation  targets.  Take  measures  to  enable  a  cost-effective  deployment  of 

97 

 
 
renewable energy and introduce renewable energy auctions; 

  adopt a plan for the gradual adjustment of energy tariffs, reflecting expected increases in 

costs, and including mitigation measures for vulnerable consumers. 

Good progress was made on security of supply. A Connection Agreement between Kosovo’s 
transmission  system  operator  KOSTT  and  the  European  Network  of  Transmission  System 
Operators for Electricity (ENTSO-E) entered into force, leading to the operationalisation of 
the  400kV  interconnection  line  between  Albania  and  Kosovo.  In  December  2020,  KOSTT 
has started operation as a Control Area within the Albania-Kosovo Control Bloc and the first 
auction of capacity took place. 

In order to further strengthen the security of energy supply, Kosovo should implement several 
connectivity reform measures, such as the continuous operation of the branch of the Albanian 
Power Exchange (ALPEX) in Kosovo, increasing the cross-border capacity and coordinating 
cross-border capacity with all neighbouring Transmissions System Operators. 

With  98%  of  electricity  generated  by  two  aging  and  highly  polluting  lignite  thermal  power 
plants,  Kosovo’s  electricity  system  remains  highly  inflexible.  This  adds  significantly  to 
Kosovo’s  heavy  air  pollution  and  environmental  and  health  problems.  Kosovo  should 
continue its work on the decommissioning of the obsolete parts of Kosovo A thermal power 
plant,  where  there  is  an  urgent  need  to  find  a  location  for  the  disposal  of  hazardous  waste. 
Works to enhance the environmental performance of Kosovo B thermal power plant started 
in 2020 and are expected to bring levels of gaseous emissions into line with the EU acquis. 
The legal framework needs to be aligned with the EU Directives on large combustion plants 
and industrial emissions. 

Kosovo abandoned the project  to  build a new 500 MW coal-based power plant (“Kosova e 
Re”)  after  the  company  selected  to  build  the  new  plant  announced  in  March  2020  that  it 
would not proceed with the project.  

The  development  of  gas  infrastructure  is  not  determined  in  the  upcoming  Kosovo’s  energy 
Strategy. Investments and preparation continue for the realisation and expansion of the Trans-
Adriatic  gas  pipeline.  Assessment  of  the  interconnection  between  Kosovo  and  Albania  has 
been  already  completed,  while  a  pre-feasibility  study  for  the  Kosovo-North  Macedonia 
pipeline is still ongoing. Both projects have potential to assist in the energy transition away 
from coal and energy-grid stability.    

As regards the internal energy market, the implementation of the retail market opening, as 
well  as  the  gradual  adjustment  of  energy  tariffs,  reflecting  expected  increase  in  costs  and 
mitigation  measures  for  vulnerable  consumers  remain  necessary.  The  Energy  Regulatory 
Office is now functional with a complete board.  

Kosovo made some steps in implementing the EU acquis on petroleum trade and compulsory 
oil  stocks,  as  well  as  biofuels  and  bio  liquids.  Kosovo  achieved  its  target  share  of  energy 
from  renewable  sources  in  2020,  which  rose  to  25.7%.  By  the  end  of  2020,  Kosovo 
registered a total of 139 MW of renewable energy, 95 MW of hydropower, 34 MW of wind 
and 10 MW of solar. The increase is due to an additional 19 MW of hydropower. Despite this 
increase, the current trend should be revised to achieve ambitious goals of the Green Agenda 
for the Western Balkans. An assessment of alternative sustainable energy sources should be 
carried  out,  in  line  with  the  sustainable  green  transition  in  the  EU.  The  adoption  of  an 
integrated  National  Energy  and  Climate  Plan  should  present  the  2030  renewable  energy 
targets and establish policies and measures to reach them in the most cost-effective way.  

Measures  to  make  the  biomass  power  plant  in  Gjakova/Đakovica  operational  should  be 

98 

 
 
carried out. The development of small hydropower plants faced strong public resistance due 
to concerns over their environmental impact. Any new projects should comply with the EU 
acquis  on  concessions  and  the  environment,  and  they  should  always  be  accompanied  by 
proper environmental and social impact assessments. The existing rules for granting support 
to renewable energy producers should include a competitive process and improve the support 
schemes  for  renewable  energy  projects  by  introducing  competitive  bidding  for  support  for 
renewables. The necessary legislation should be amended to achieve these goals.   

There  was  some  progress  on  the  implementation  of  the  Energy  Efficiency  Fund.  Kosovo 
should prioritise energy efficiency investments in residential buildings and the private sector, 
increasing efforts to monitor and verify energy savings, including making the online platform 
for  energy  efficiency  monitoring  and  verification  operational.  Kosovo  should  take  into 
consideration  the  replenishment  of  the  fund  and  enforce  secondary  legislation  needed  to 
implement the Law on energy efficiency. The fund should mobilise investments for energy in 
the  residential  and  private  sectors.  A  revolving  mechanism  needs  to  be  designed  for 
residential and private sectors to ensure long-term sustainability of the fund 

The capacities of the Nuclear Safety and Radiation Protection Agency remain weak, and 
Kosovo has still not found a solution for the temporary storage of radioactive waste. Kosovo 
should  adopt  the  Regulation  on  Radiation  Emergency  and  Monitoring  and  a  radiological 
emergency plan.  

5.3.3.  Trans-European Networks 

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

In  the  area  of  trans-European  networks  (TENs),  Kosovo  has  some  level  of  preparation. 
Limited progress was achieved, notably by implementing parts of the Transport Community 
Treaty  and 
interconnection  with  Albania. 
Recommendations  from  the  previous  report  were  only  partially  addressed.  In  the  coming 
year, Kosovo should: 

the  operationalisation  of 

the  electric 

  harmonise the legal framework with the TEN-T and TEN-E acquis;  

  implement  the  pending  connectivity  reform  measures  and  strengthen  institutional  and 
administrative capacities for the implementation of strategic infrastructure projects;  

  improve 

the  capacity  of 

the  Regulatory  Authority  of  Electronic  and  Postal 

Communications to enforce telecommunications market regulations. 

On  transport  networks,  Kosovo  is  encouraged  to  maintain  its  active  involvement  in 
Transport  Community  Treaty  meetings.  The  development  of  the  trans-European  Transport 
Network  (TEN-T)  is  covered  in  Kosovo’s  multimodal  transport  strategy  2015-2025  and 
action plan. However, progress was limited due to government  changes and the COVID-19 
pandemic. The inter-institutional capacity to implement infrastructure projects remains very 
limited,  not  only  for  the  completion  and  extension  of  priority  projects,  but  also  for  the 
maintenance of the existing networks. Current and future transport infrastructure investments 
need to be based on realistic cost/benefit analyses and should comply with EU standards on 
public procurement, state aid and environmental impact assessment.  

Segment  of  the  “Peace  Highway”  part  of  Route  7  received  financing,  as  part  of  the  EU 
Connectivity  Agenda.  The  road  has  been  classified  as  an  extension  of  the  Trans-European 
Transport Network (Orient/East Mediterranean corridor). The works on the Orient/East-Med 
railway Corridor (R10)  connecting  Fushë Kosovë/Kosovo Polje and Mitrovicë/Mitrovica to 

99 

 
 
North  Macedonia  continue.  Despite  preparations,  there  is  no  five-year  road  and  rail 
maintenance plan yet. The missing railway Border Crossing Protocol with North Macedonia 
was signed.  

Kosovo  achieved  some  progress  on  rail  market  opening,  with  the  Transport  Community  
Secretariat  assessing  a  60%  implementation  rate.  Obstacles  remain,  such  as  the  mutual 
recognition  of  train  driver  licenses,  institutional  framework  and  recognition  of  safety 
certificates and authorizations.  

On  energy  networks,  the  new  Connection  Agreement  between  the  Kosovo  transmission 
system operator (KOSTT) and the European Network of Transmission Systems Operators for 
electricity  (ENTSO-E)  entered  into  force,  leading  to  the  operationalisation  of  the  400kV 
transmission line and load frequency control between Kosovo and Albania. As of December 
2020,  KOSTT  has  started  operation  as  Control  Area  within  Albania-Kosovo  joint  control 
bloc and the first auction of capacity took place.  

Investments and preparation continue for the realisation and expansion of the Trans-Adriatic 
gas  pipeline.  Assessment  of  the  interconnection  between  Kosovo  and  Albania  has  been 
already completed, while a pre-feasibility study for the Kosovo-North Macedonia pipeline is 
still  ongoing.  Both  projects  have  the  potential  to  assist  in  the  sustainable  energy  transition 
away from coal and energy-grid stability.    

On  telecommunications  networks,  the  institutional  capacity  of  the  Electronic  and  Postal 
Communications  Regulatory  Authority  needs  to  be  reinforced.  Kosovo  completed  the 
necessary technical preparations for the full rollout the Regional Roaming Agreement, fully 
enabling Kosovo consumers to roam freely as of July 2021. 

5.3.4.  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.  

Kosovo  is  at  an  early  stage  of  preparation  on  environment  and  climate  change.  Limited 
progress was achieved during the reporting period, notably on environmental reporting and 
air quality monitoring. In order to be aligned with the Green Agenda for the Western Balkans 
goals,  Kosovo  needs  to  increase  its  political  commitment  to  address  environmental 
degradation  and  climate  change  challenges.  All  recommendations  from  the  previous  report 
are still pending. In the coming year, Kosovo should in particular: 

  establish  an  effective  water  monitoring  system,  publish  data  and  undertake  urgent  and 

permanent measures to reduce air and water pollution;  

  continue  to  increase  the  waste  collection  coverage,  notably  with  the  introduction  of 
separation of waste and recycling, introduce circular economy measures to  reduce waste 
and address effectively the issue of illegal dumpsites; 

  enforce  legal  provisions  on  environmental  liability,  damage  and  crime;  implement  the 
polluter  pays  principle  and  create  and  start  a  permanent  campaign  for  raising  public 
awareness on environmental protection;  

  implement the climate change strategy and the action plan on climate change, prepare a 
roadmap  for  alignment  with  the  Green  Agenda  for  the  Western  Balkans  and  climate 
acquis,  adopt  a  National  Energy  and  Climate  Plan,  in  line  with  the  Energy  Community 
requirements, and start drafting the long-term decarbonisation strategy. 

100 

 
 
Environment  

As  regards  horizontal  issues,  Kosovo  authorities  should  reassess  and  review  relevant 
strategies, action plans and legislation to ensure the coherence with Green Agenda objectives. 
Kosovo  should  urgently  prepare  the  environment  strategy  for  the  post  2021  period. 
Insufficient  funding  and  administrative  capacity  prevent  the  proper  implementation  of  the 
current strategic framework. Environmental protection is hampered by the lack of alignment 
with  the  Environmental  Liability  Directive.  Environmental  inspections  legislation  is  not 
adopted  and  inspectorate  lacks  the  capacity  for  enforcement.  The  preparation  and 
implementation of the environmental impact assessment and strategic impact assessment laws 
need  to  be  considerably  enhanced.  Inter-institutional  coordination  and  civil  society 
involvement remains limited. Awareness raising needs to be improved, as most activities are 
carried  by  the  international  community  and  civil  society  organisations.  Some  strategic 
investments have been cancelled or postponed due to pandemic.  

Air quality continues to pose a major threat to health. Air pollution, notably from outdated 
thermal power plants, household heating, traffic, industrial emissions and the incineration of 
waste  and  other  toxic  materials,  calls  for  urgent  action.  The  authorities  failed  to  adopt  and 
implement  concrete  measures  to  improve  it,  in  particular  through  an  emissions  reduction 
plan. The air quality Strategy is not enforced. Measures to enforce the ban on coal for heating 
are limited and not effective. Subsidies and investments for other forms of heating should be 
introduced. Air quality plans have not yet been prepared for zones in which pollutant levels 
clearly  exceed  limit  values.  There  has  been  some  progress  on  the  real  time  monitoring, 
identification of air pollution sources and reporting of air quality.  

The solid waste management system continues to be unsustainable. The legal framework is 
partially  aligned  with  the  EU  acquis  but  still  needs  to  be  extended  as  regards  producer 
responsibility and the polluter pays principle. The Law on waste needs to be further aligned 
with  the  Waste  Framework  Directive.  There  was  progress  in  the  alignment  with  the 
hazardous  waste  management  legislation,  but  implementation  is  lacking.  The  Strategy  on 
integrated  waste management, and its  dedicated  action plan, for 2021-2030 was adopted.  It 
addresses the EU principles of waste management . Currently most waste ends up in landfills 
that are not properly managed, or are categorised as illegal dumpsites. The number of illegal  
dumpsites  has  decreased  (from  2,529  in  2019,  1,489  in  2020  and  1,189  in  2021).  Proper 
implementation  would  require  an  increase  in  capacity  at  all  levels  and  establishment  of 
targets and a timeframe for the main stages in the integrated waste management and circular 
economy  in  Kosovo.  There  was  some  progress  in  the  reporting  of  waste  and  adoption  of 
modern integrated municipal waste management  plans; however, these plans have not  been 
endorsed by all municipalities. The coal ash deposit lake operated by the Kosovo Electricity 
Company  and the Mirash landfill  in  Obiliq/Obilić remains open despite its negative impact 
on the environment. The government need to step up efforts in selecting locations for the new 
landfills and ensure agreements with the local authorities. 

Progress  was  made  on  aligning  water  legislation  with  the  EU  acquis.  Kosovo  has  a  2017- 
2036  water  Strategy,  but  the  level  of  alignment  with  the  EU  acquis  remains  very  low  and 
monitoring  mechanism  is  not  sufficient.  The  implementation  of  the  water  Law  needs  to  be 
significantly  strengthened.  The  setting  up  of  an  inter-ministerial  water  council  within  the 
Office of the Prime Minister is a positive step. Water resource monitoring networks are still 
incomplete,  especially  for  groundwater.  Water  protection  zones  are  not  being  monitored  or 
properly managed. Urgent efforts are required to ensure that the river basin district authority 
becomes operational. The management plan for the White Drin basin has been completed and 
progress is ongoing for the other river basin plans. There was some progress on cooperation 

101 

 
 
with  neighbouring  partners  on  integrated  water  management  and  flood  protection.  Some 
progress  was  achieved  with  the  planning  and  construction  of  wastewater  treatment  plants. 
Tariff collection needs to be improved and water losses to be reduced, especially commercial 
losses. The construction of numerous small hydroelectric power plants should be done in full 
respect  of  the  environmental  legislation  and  go  through  proper  environmental  assessments, 
due  to  their  harmful  environmental  cumulative  effects.  Preliminary  flood  risk  assessments 
have  been  completed  for  all  basins  but  flood  risk  and  hazard  maps  need  to  be  developed. 
Treatment  facilities  are  not  properly  functional  and  untreated  sewage  and  discharge  remain 
the  main  sources  of  water  pollution.  Kosovo  should  identify  agglomerations  and  sensitive 
areas,  in  line  with  the  Urban  Waste  Water  Treatment  Directive.  Tariff  collection  has  been 
affected  by  the  pandemic  and  the  government  did  not  provide  support  for  the  coverage  of 
social cases.  

Limited progress was made in the area of nature protection. The Law on the proclamation 
of  protected  and  strictly  protected  wild  species  of  plants  and  animals  is  approved  and 
provides alignment with the Habitats Directive. The 2016-2020 action plan for biodiversity is 
partially implemented. However, these areas continue to be polluted and poorly maintained. 
Illegal  activities  such  as  construction,  hunting  and  logging  are  not  properly  addressed. 
Effective  measures  remain  necessary  to  ensure  protection  of  critically  endangered  species. 
The  establishment  of  a  monitoring  system  for  the  Balkan  lynx  in  Kosovo  represents  a  first 
step towards its conservation. Kosovo has taken steps to start inventories of natural habitats 
and  species,  but  designation  of  potential  NATURA  2000  sites  is  still  at  a  very  early  stage. 
Some  progress  on  forestry  was  made  on  planning  and  management,  with  the  adoption  of 
relevant  secondary  acts  as  well  as  steps  towards  afforestation.  The  forest  Strategy  and  the 
forestry  Law  are  yet  to  be  adopted.  Deforestation  and  particularly  illegal  logging  remain 
improperly addressed and problematic. 

No developments were noted on alignment with the EU acquis on industrial pollution and 
risk  management,  which  remain  at  early  stage.  Slow  progress  in  drafting  the  legislation  on 
pollution prevention and control and polluter accountability is hampering the setting-up of a 
system  for  preventing  industrial  and  chemical  accidents.  Hazardous  mine  waste,  industrial 
discharge into rivers and industrial dumpsites continue to pose serious threats to soil, water 
and  health.  No  location  has  yet  been  established  for  the  future  hazardous  waste  storage 
facility.  

No  progress  was  registered  on  chemicals,  where  alignment  with  the  EU  acquis  and 
implementation  of  existing  legislation  remains  at  low  level.  Kosovo  is  not  party  to  the 
Rotterdam Convention and still needs to implement the regulatory framework on the export 
and import of hazardous chemicals. Some progress was achieved in providing information to 
stakeholders  but  further  effort  are  needed  to  develop  a  centre  for  control  of  chemical 
poisoning. 

There were no significant improvement in the area of noise in the reporting period. 

Kosovo is not part of the Union Civil Protection Mechanism, but benefits from regional civil 
protection programmes under the Instrument for Pre-Accession Assistance. Kosovo can also 
benefit  from  certain  tools  under  the  Union  Civil  Protection  Mechanism  such  as  trainings, 
exercises,  prevention  and  preparedness  projects  and  exchange  of  experts.  It  has  not  yet 
established  an  operational  centre  and  emergency  communication  system.  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.  Some  progress  has  been  made  regarding  the  risk  assessment 
development  and  the  preparation  of  disaster  response  plans.  Kosovo  is  encouraged  to 

102 

 
 
participate more actively in the activities under the Union Civil Protection Mechanism, such 
as  trainings,  exchange  of  experts,  prevention  and  preparedness  projects,  exercises,  peer 
reviews and advisory missions.  

Climate change  

The implementation of the 2019-2028 climate change Strategy is still at an early stage. The 
action  plan  for  the  period  2021-2023  has  not  yet  been  drafted.  Strategic  and  legislative 
framework is not adapted to the EU strategic goals stemming from the European Green Deal. 
The  Law  on  climate  change  is  in  the  early  stage  of  preparation.  Kosovo  continues  to  rely 
heavily on coal and is not complying with the emission ceilings established under its National 
Emission  Reduction  Plan  (NERP).  The  Council  for  the  Environment  and  Climate  Change 
took no concrete measures to mainstream climate action or raise public awareness, and there 
is  little  evidence  of  policies  being  aligned  with  climate  change  objectives.  Administrative 
capacity  and  awareness  raising  declined  and  need  to  be  strengthened  considerably  at  all 
levels.  Although  Kosovo  is  not  a  signatory  to  the  UN  Framework  Convention  on  Climate 
Change  and  therefore  does  not  have  a  nationally  determined  contribution  under  the  2015 
Paris Agreement, full implementation of its climate change Strategy should serve as a guide 
to  achieving  the  objectives  of  the  Agreement.  Kosovo  drafted  the  updated  inventory  of 
Greenhouse gas emissions for the period 2014-2019. 

5.4. 

Resources, agriculture and cohesion  

Kosovo has some level of preparation on cluster 5 as the system for the implementation of the 
agricultural and rural development policy is in place. Legislation in food, rural development, 
spirit  drinks,  plant  protection  and  forestry  still  needs  to  be  adopted.  The  agricultural 
information  system  interconnecting  the  various  elements  is  still  under  construction.  The 
measures  encouraging  land  consolidation  are  insufficient.    The  long  lasting  problem  of 
transferring  the  inspectors  from  municipalities  to  the  Kosovo  Food  and  Veterinary  Agency 
remains unaddressed. Kosovo needs to increase its efforts to properly implement chapter 12 
of  the  acquis  as  several  areas  need  progress.  Implementation  of  the  relevant  acquis  on 
fisheries requires  some effort, as well.  

5.4.1. Agriculture  

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. 

Kosovo  has  some  level  of  preparation  on  agriculture  and  rural  development.  Limited 
progress  was  made  overall,  especially  in  relation  to  the  design  and  implementation  of  the 
agriculture  and  rural  development  programmes.  Progress  on  land  consolidation  and  land 
protection is insufficient.  

Not  all  2020  recommendations  were  implemented.  In  the  coming  year,  Kosovo  should  in 
particular: 

→  perform  a  qualitative  assessment  of  the  effectiveness  of  direct  payments  and  rural 
development programmes provided under the financial framework 2014-2020, and adopt 
the strategy and program for agricultural and rural development 2021-2027;  

→  take urgent and effective measures to stop the loss of agricultural land and implement the 

legislation on spatial planning. 

On  horizontal  issues,  Kosovo’s  institutional  set-up  includes  the  necessary  system  for  the 

103 

 
 
 
development and implementation of agriculture and rural development policy. The sector is 
affected  by  a  predominance  of  small  farms  and  fragmented  arable  land.  The  positive  trend 
with  respect  to  budget  allocation  for  direct  payments  and  grants  continued  in  2020:  the 
allocation  rose  to  EUR  61.6m,  35%  higher  than  in  2019.  The  agriculture  and  rural 
development  programme  2020  included  important  support  for  agricultural  households, 
processing  and  marketing  of  agricultural  products,  farm  diversification  and  irrigation  of 
agricultural land. Cross-compliance remains unaddressed. In order to secure good efficiency 
and  effectiveness  of  future  direct  payments  and  grant  programmes,  the  Ministry  of 
Agriculture initiated the preparation of the agriculture and rural development program 2021-
2027,  based  on  independent  sector  studies.  However,  an  ex-post  evaluation  of  the 
programmes  implemented  under  the  financial  framework  2014-2020  is  needed  to  better 
prepare and adopt the strategy and the programme for agricultural and rural development for 
2021-2027.  

Kosovo  is  in  the  process  of  establishing  an  integrated  agricultural  information  system  by 
upgrading  and  improving  interconnectivity  of  the  existing  elements,  which  include  the 
administration  and  control  system  (IACS),  the  agricultural  market  information  system 
(AMIS)  and  the  farm  accountancy  data  network  (FADN).  Cross-compliance  remains 
unaddressed under  IACS. A number of issues that could  affect  effectiveness  of this system 
require  urgent  attention,  such  as  the  old  ortho-imagery  for  the  land  parcel  identification 
system (LPIS) and the online connection between stakeholder institutions.  

On  common  market  organisation  (CMO),  no  progress  was  made.  Foreseen  already  for 
2020,  the  law  on  Common  Market  Organisation  as  well  as  the  related  implementing 
legislation have been postponed to 2022.  

On rural development, a Kosovo-wide strategy remains to be developed.  

Regarding  quality  policy,  some  secondary  legislation  was  adopted  but  no  progress  was 
registered  in  aligning    the  relevant  legislation  with  the  EU  acquis.  The  members  of  the 
Commission on Geographical Indication have been nominated.  

Organic  farming  is  governed  by  the  2018-2021  action  plan  for  organic  agriculture.  In  the 
absence  of  a  dedicated  domestic  agency,  the  certification  is  provided  by  two  international 
organisations.  

There was no progress on arable land consolidation and protection. Kosovo is yet to establish 
a  clear  action  plan  and  a  taskforce,  involving  the  Ministry  of  Agriculture  and  Rural 
Development,  the  Ministry  of  Environment,  Spatial  Planning  and  Infrastructure,  and  local 
authorities, to address the steady loss and degradation of farmland. 

5.4.2. Food safety, veterinary and phytosanitary policy 

EU  hygiene  rules  for  food  production  ensure  a  high  level  of  food  safety.  The  rules  ensure 
animal  health  and  welfare,  the  safety  of  food  of  animal  origin  and  animal  nutrition,  the 
quality of seed, plant protection material and protection against harmful organisms.  

Kosovo  has  some  level  of  preparation  in  the  area  of  food  safety,  veterinary  and 
phytosanitary  policy.  Limited  progress  was  achieved  in  developing  the  food  control  and 
traceability  system  as  well  as  the  management  of  the  food  safety  and  veterinary  laboratory 
information.  

Not  all  2020  recommendations  were  implemented.  In  the  coming  year,  Kosovo  should  in 
particular: 

→  operate fully the existing Food Control and Traceability Management System as well the 

104 

 
 
Laboratory  Information  Management  System,  including  by  finalising  the  transfer  of 
inspectors from the municipalities to the Food and Veterinary Agency; 

→  select  the  operator  for  managing  the  rendering  plant  and  animal  by-product  collection 
system  and put into operation the animal by-product collection and disposal system; 

→  implement  the  disease  control  and  surveillance  programmes  and  inform  the  European 

Commission on the results. 

Kosovo made some progress in developing its IT infrastructure for the control of food safety 
and traceability as well as the laboratory information management system. Further effort is 
required  in  order  to  achieve  alignment  of  legislation  with  the  EU  acquis in  order  to  ensure 
consistent  implementation  of  food  safety  and  phytosanitary  legislation.  The  long  overdue 
process of transferring 76 inspectors from municipalities to the Food and Veterinary Agency 
started  in  August  2021  with  the  adoption  of  the  Law  on  budget,  providing  the  necessary 
funds,  and  should  be  urgently  finalised  in  order  to  allow  for  the  proper  implementation  of 
legislation.    The  food  and  veterinary  laboratory  has  continued  testing  and  participated  in 
proficiency  testing  with  EU  reference  laboratories.  However,  no  progress  was  achieved  in 
obtaining international accreditation. 

No  relevant  progress  was  made  on  the  veterinary  policy,  where  the  Food  and  Veterinary 
Agency  is  yet  to  design  and  implement  a  comprehensive  disease  monitoring  and  control 
system, in line with EU legislation and World Organisation for Animal Health requirements. 
The  long-term  planning  and  implementation  of  programmes  to  eradicate  diseases  that  are 
endemic  in  Kosovo  still  require  approval  and  implementation.  The  same  applies  to  animal 
health  controls  at  farm  level,  the  transport  of  animals,  and  livestock  markets.  The 
implementation of programmes  in  these areas is  unsatisfactory due to  the lack of necessary 
resources, both human and financial, as well as the lack of in-service training and education 
programmes. The overall 2021 budget of the Agency decreased by 18%.  

o  relevant  developments  were  made  on  animal  health.  The  multi-annual  animal  disease 
control  and  surveillance  programme  still  requires  adoption  and  implementation  .Kosovo 
continued rabies eradication vaccination campaigns with EU support. Taking  full  ownership  
of these campaigns, Kosovo should transition to using its own means for future campaigns in 
line with  obligations to harmonise with the relevant EU acquis. 

No  progress  was  made  on  the  system  for  collection  and  disposal  of  animal  by-products, 
which is not yet functional despite the existence of a new and equipped rendering plant. The 
Agency is due to select an operator to manage the rendering plant and the collection system 
in 2021 . 

No progress was made on animal identification and registration, where the under-reporting 
of animal movements remains a challenge. The Agency has yet to adopt measures to enforce 
the  relevant  regulation  at  the  level  of  livestock  markets,  slaughterhouses  and  transport.  No 
progress  was  made  on  identifying  basic  cross-compliance  measures  in  the  areas  of  food 
safety, animal health and welfare.   

With  regard  to  phytosanitary  matters,  no  progress  was  made  on  the  harmonisation  of  the 
relevant  legal  acts.  The  Kosovo  Institute  of  Agriculture  (the  scientific  body  supporting  the 
phytosanitary  sector)  is  yet  to  implement  the  quality  assurance  system  and  complete  the 
accreditation of the plant protection laboratory. 

5.4.3.  Fisheries 

The  common  fisheries  policy  lays  down  rules  on  fisheries  management,  protects  living 

105 

 
 
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.  
Kosovo  is  still  at  an  early  stage  of  preparation  in  the  area  of  fisheries.  No  progress  was 
made  during  the  reporting  period.  None  of  the  recommendations  of  previous  reports  was 
implemented. In the coming year, Kosovo should in particular:  

  further align its market policy with the EU acquis; 

  establish an inventory of fish species. 

Kosovo has no coastline, therefore the EU acquis on catch quotas, inspection and control is 
of very limited applicability. The fisheries sector consists of aquaculture operations and the 
focus  should  be  on  establishing  a  market  policy  in  line  with  the  EU  acquis  as  well  as  an 
inventory  of  fish  species  and  stronger  administrative  capacity  for  policy  management, 
inspection and control.  

The Ministry of Agriculture provided grants and subsidies to registered producers. The grants 
selection was based on the potential for jobs and production capacity, without considering the 
market and export potential criteria. 

5.5. 

External relations  

In  the  area  of  trade,  Kosovo  is  at  an  early  stage  of  preparation.  Some  progress  was  made 
during the reporting period in reducing Kosovo’s trade deficit, however Kosovo has not yet 
adopted a comprehensive trade policy, nor ratified the CEFTA Additional Protocols on trade 
facilitation and trade in services.  

5.5.1. Trade issues 

The  EU  has  a  common  trade  and  commercial  policy  towards  third  countries,  based  on 
multilateral and bilateral agreements, and autonomous measures. 

Kosovo is at an early stage of preparation in this area. Some progress over the past  year 
was  made  in  reducing  the  long-standing  trade  deficit,  thanks  to  a  good  performance  of 
exported goods, and in spite of the COVID pandemic limiting the existing opportunities for 
service exports.  

Work  has  continued  to  develop  a  trade  policy  aimed  at  addressing  Kosovo’s  chronic  trade 
deficit.  The  ratification  and  subsequent  implementation  of  CEFTA  protocols  5  on  trade 
facilitation  and  6  on  trade  in  services,  and  more  efforts  in  line  with  Kosovo’s  international 
and regional trade commitments would expand export opportunities further. To date, Kosovo 
has  not  been  able  to  make  full  use  of  the  trade  preferences  of  the  Stabilisation  and 
Association  Agreement  (SAA)  with  the  EU.  Kosovo  is  at  an  early  stage  of  preparation  as 
regards its application for WTO observer status. 

Not  all  recommendations  from  the  previous  report  were  implemented.  In  the  coming  year, 
Kosovo should in particular: 

  finalise and adopt a trade policy to address Kosovo’s chronic trade deficit on goods and to 

expand trade on services;  

  ratify  and  implement  CEFTA  Additional  Protocol 5  on  trade  facilitation  and  Additional 
Protocol 6 on trade in services, and negotiate Additional Protocol 7 on dispute settlement; 
implement commitments under the Common Regional Market Action Plan 2021-2024. 

Overall, Kosovo  remains highly reliant  on imports and suffers from  a chronic trade deficit. 

106 

 
 
However, in 2020 the trade deficit has decreased by 10% compared to 2019, with EUR 2.82 
billion of imports and EUR 475 million of exports. The increase of exports in 2020 compared 
to  the  previous  year  has  been  significant,  representing  almost  24%.  The  SAA  has  shown 
positive  effects  on  the  economy,  with  an  increase  of  exports  by  83%  since  2016,  whereas 
imports increased by 38%. 

The  Ministry  of  Trade,  Entrepreneurship  and  Industry  worked  on  developing  a 
comprehensive  framework (trade policy document  and laws) for domestic and international 
trade. However, none of these has been adopted yet 

Most  of  Kosovo’s  goods  exports  still  consist  of  basic  raw  materials  and  mineral  products, 
reflecting  a  limited  diversification  of  the  production  sector.  Although  Kosovo’s  use  of  the 
EU’s  wine  tariff  rate  quota  increased  last  year,  only  85%  of  the  available  quota  was  used. 
There is therefore still some room for further expansion.  

Services  exports  are  strongly  dependent  on  travel  services,  which  represented  65%  of  the 
total  in  2020.  While  lower  than  in  previous  years  due  to  pandemic  travel  restrictions,  the 
majority  of  them  were  Kosovo  diaspora  visits,  not  foreign  tourism.  This  alongside  overall 
mobility in Kosovo raises concerns over the sector’s long-term sustainability. 

Kosovo  took  initial  step  towards  implementing  the  Common  Regional  Market  Action  Plan 
2021-2024, launched in  November 2020 during the Western Balkans Summit in Sofia. The 
Common  Regional  Market  will  facilitate  Kosovo’s  integration  into  regional  and  European 
value chains, and help increase the attractiveness of the economy for FDI in tradeable sectors.  

There is  a need to  enhance the capacity of the trade department to  undertake trade defence 
related investigations, in line with EU procedures, and to determine protective measures for 
imports.  Information  on  the  scope  and  reach  of  trade  defence  measures  should  be  better 
disseminated to the private sector. Delays in access to the Kosovo Customs trade databases 
and  to  the  Kosovo  Agency  of  Statistics  statistics  negatively  affected  the  efficiency  of  the 
trade department. 

The Contact Point on Services was launched in October 2020. Its platform allows businesses 
to explore opportunities and expand their services between Kosovo and EU Member States. 
The  National  Committee  on  Trade  in  Services  was  formed  in  July  2020,  with  public  and 
private representatives.   

The current framework on e-commerce in Kosovo suffers from regulatory shortcomings such 
as  a  weak  electronic  payment  system.  A  draft  Law  on  Electronic  Identification  on  Trusted 
Services in Electronic Transactions was approved and is now in the final stages of adoption 
by  the  Assembly.  The  law  will  reduce  the  administrative  burden  for  electronic  transactions 
between parties and increase their security.  

The CEFTA area has remained Kosovo’s main export market, accounting for 43% of its total 
exports  in  2020.  The  ratification  of  CEFTA’s  additional  protocols  5  and  6  is  still  pending, 
limiting  the  potential  for  increasing  the  export  of  goods  and  services.  In  June  2021  the 
government has proposed a new framework to replace CEFTA called the Southeast European 
Free  Trade  Agreement  (SEFTA),  however  its  adoption  by  CEFTA  parties  remains  under 
question.    The  first  Joint  Committee  between  Kosovo  and  the  European  Free  Trade 
Association (EFTA) took place in November 2020, where Kosovo proposed the examination 
of a free trade agreement. A bilateral Agreement between Kosovo and Hungary on the mutual 
promotion and protection of investments  was signed and entered into force in  March 2021. 
Kosovo also concluded an investment incentive agreement with the USA, which entered into 
force  the  same  month.  The  partnership,  trade  and  cooperation  agreement  with  the  United 
Kingdom, concluded in 2019, entered into force on 1 January 2021. 

107 

 
 
 
ANNEX I – RELATIONS BETWEEN THE EU AND KOSOVO  

In  April  2016,  the  EU-Kosovo  Stabilisation  and  Association  Agreement  (SAA)  entered 
into  force.  The  SAA  constitutes  the  first  contractual  relationship  between  the  EU  and 
Kosovo.  It  is  a  comprehensive  agreement  that  provides  a  framework  for  political  dialogue 
and covers cooperation in a wide variety of sectors, including justice and home affairs, trade, 
education,  employment,  energy,  environment  and  a  range  of  other  policy  areas.  Four 
Stabilisation  and  Association  Council  meetings  and  five  cycles  of  subcommittee  meetings 
took  place  since  2016.  Kosovo  also  participates  in  the  ministerial  dialogue  between  the 
economic  and  finance  ministers  of  the  EU  and  the  candidate  countries  and  potential 
candidates, which aims at helping the latter to gradually meet the economic accession criteria 
and be better prepared in terms of economic reforms, competitiveness and job creation. The 
most recent meeting was held in June 2021. 

To  guide  reforms  under  the  implementation  of  the  SAA,  the  Commission  and  Kosovo 
adopted in November 2016 the European Reform Agenda (ERA) for Kosovo. The Agenda 
outlines priority actions in the fields of good governance and the rule of law, competitiveness 
and investment climate, and employment and education. Kosovo adopted the second phase of 
the ERA through a dedicated action plan in  August 2021. Since 2012, the Commission has 
issued five reports on Kosovo's progress towards visa liberalisation (the most recent in June 
2018).  In  July  2018,  the  Commission  confirmed  that  Kosovo  has  met  the  two  outstanding 
requirements, thus fulfilling all benchmarks set out in the Visa Liberalisation Roadmap. The 
European  Parliament  has  voted  in  support  of  the  Commission  proposal.  The  proposal  is 
pending in the Council. 

The  bilateral  EU  support  for  Kosovo  under  the  Instrument  for  Pre-accession  Assistance 
(IPA II) in 2014-2020 amounts to EUR 562 million. The 2019 and 2020 action programmes 
include  an  EU  contribution  amounting  to  EUR  181  million.  The  assistance  is  implemented 
under  direct  management  by  the  EU  Office  in  Kosovo,  as  well  as  through  budget  support 
operations on public administration reform,  public financial management  and on support to 
Kosovo’s socio-economic recovery.   

As  part  of  the  response  to  the  COVID-19  pandemic,  EU’s  COVID  related  assistance  to 
Kosovo amounts to EUR 68 million: EUR 5 million have been refocused for urgent medical 
equipment and EUR 63 million for socio-economic recovery measures, including a resilience 
contract  (budget  support).  As  part  of  the  wider  COVID-19  response,  the  EU  also  made 
available  a  Macro  Financial  Assistance  scheme  of  EUR  100  million  in  highly  favourable 
loans in order to underpin the local economy.  
The IPA III Regulation for the 2021-2027 financial period7 will continue to provide financial 
support  to  the  region  and  will  also  finance  the  Economic  Investment  Plan  (EIP)  for  the 
Western Balkans. The EIP, accompanied by the Green Agenda for the Western Balkans, was 
agreed by the Commission and the candidate countries and potential candidates of the region 
in October 2020 and aims to spur the long-term economic recovery of the region, support a 
green  and  digital  transition,  and  foster  regional  integration  and  convergence  with  the 
European Union.  

Kosovo  continues  to  benefit  from  support  under  the  IPA  multi-country  and  regional 
programmes. These programmes have been also, in part, repurposed to address the response 
to the COVID-19 crisis. Additionally, Kosovo participates in three cross-border cooperation 

7Official Journal L 330, 20.9.2021 

108 

 
 
                                                           
programmes,  and  also  benefits,  with  IPA  support,  from  participation  in  some  EU 
programmes. 

Kosovo and Europol have concluded a working arrangement in July 2020. The arrangement 
constitutes  the  basis  for  enhanced  cooperation  between  Kosovo  Police,  Europol  and  EU 
Member  States,  in  particular  in  addressing  terrorism  and  extremism  as  well  as  organised 
crime. 

On  17  July  2017,  the  Council  approved  the  Framework  Agreement  between  the  EU  and 
Kosovo on the general principles for the participation of Kosovo in EU programmes. Since 
2018,  Kosovo  has  joined  the  following  programmes:  Erasmus+,  COSME,  Europe  for 
Citizens, Creative Europe, Customs 2020 and Fiscalis 2020. 

The  Kosovo  Specialist  Chambers  and  Specialist  Prosecutor's  Office,  established  to 
investigate  and  prosecute  allegations  stemming  from  the  2011  Council  of  Europe  Report, 
which  alleges  serious  violations  of  international  law,  continued  their  work  (see  section  on 
transitional justice).  

Since  2008,  the  European  Rule  of  Law  Mission  in  Kosovo  (EULEX)  has  been  assisting 
Kosovo authorities in establishing sustainable and independent rule of law institutions. Under 
its  current  mandate  extended  in  June  2021,  the  Mission  continues  to  undertake  monitoring 
activities and has limited executive functions.  

To  date,  according  to  the  government,  Kosovo  has  been  recognised  by  117  countries, 
including 23 EU Member States.  

During the reporting period, the UN Secretary-General continued to provide regular updates 
on the implementation of the UN's mission in Kosovo (UNMIK). He notably welcomed the 
resumption of the EU-facilitated Dialogue in 2020.  

The  NATO-led  Kosovo  Force  (KFOR)  has  continued  to  help  ensure  a  safe  and  secure 
environment in Kosovo. In June 2021, it had 3,672 personnel. 

109 

 
 
 
 
 
Note 

1) 

Note 

STATISTICAL DATA (as of 09.09.2021) 
Kosovo 

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

National accounts 
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 (2015 = 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 (%) 
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) (%) 

Note 

2008 
2 153 s 
10 908 w 

2015 
1 805 es 
10 908 w 

2016 
1 772 es 
10 908 w 

2017 
1 784 es 
10 905 w 

2018 
1 799 es 
10 905 w 

2019 
1 796 s 
10 905 w 

2008 
3 538 
1 803 s 
: 
: 
: 
: 
: 

: 
: 
: 

13.5 
23.5 
9.0 
53.9 s 
105.1 
29.8 
7.5 
17.2 
59.5 
: 

2008 
: 
: 
: 

: 

: 

2015 
5 674 
3 217 es 
: 
: 
5.9 
 c 
 c 

: 
: 
: 

9.4 
23.8 
9.4 
57.4 s 
98.7 
28.3 
2.2 
22.5 
51.6 
: 

2016 
6 037 
3 426 es 
: 
: 
5.6 
 c 
 c 

: 
: 
: 

10.2 
24.3 
9.1 
56.4 s 
93.8 
28.0 
5.5 
23.8 
51.2 
: 

2017 
6 357 
3 596 es 
: 
: 
4.8 
 c 
 c 

: 
: 
: 

9.2 
24.1 
10.1 
56.5 s 
91.1 
30.0 
4.7 
27.3 
53.1 
: 

2018 
6 672 
3 740 es 
: 
: 
3.4 
 c 
 c 

: 
: 
: 

8.1 
24.2 
10.4 
57.2 s 
91.9 
31.7 
4.6 
29.1 
57.3 
: 

2015 
: 
35 472 w 
11.7 w 

2016 
: 
33 274 w 
9.2 w 

2017 
: 
34 355 w 
8.7 pw 

2018 
: 
31 028 pw 
4.8 pw 

8.3 pw 

15.8 pw 

4.3 pw 

3.7 pw 

78.3 sw 

78.5 sw 

78.8 sw 

78.4 psw 

2019 
7 056 
3 956 s 
: 
: 
4.8 
 c 
 c 

: 
: 
: 

9.0 
23.4 
10.1 
57.5 s 
92.6 
31.0 
3.5 
29.3 
56.4 
: 

2019 
: 
: 
: 

: 

: 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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 
Consumer price index (CPI), 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 (%) 
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 (%) 

Note 

Note 

Note 

Note 

: 
: 

2008 
9.4 w 
: 

2008 
-  460.9 w 
- 1 644.7 w 
146.6 w 
164.0 w 
873.2 w 
: 
: 
: 
341.5 w 
28.4 w 
: 
369.9 w 
: 
23.5 w 
: 

2008 
: 
0.0 zw 
24.3 w 
24.5 w 

2008 
19.0 sw 
121.1 w 
: 
: 
: 
1 183.4 w 
: 
: 
: 

: 
: 

2015 
-  0.5 w 
: 

2015 
-  512.1 
- 2 109.3 
473.8 
88.7 
1 034.6 
171.2 
-  5.9 
5.9 
271.8 w 
37.1 
8.4 w 
308.8 w 
60.6 w 
-  0.7 w 
13.0 s 

2015 
: 
13.1 ew 
29.6 w 
28.0 w 

2015 
33.3 sw 
151.6 w 
: 
: 
: 
2 101.9 w 
: 
: 
: 

: 
: 

2016 
0.3 w 
: 

2016 
-  499.9 
- 2 290.7 
650.7 
73.8 
1 066.3 
173.0 
-  7.5 
6.6 
177.2 w 
42.7 
13.2 w 
220.0 w 
16.4 w 
-  1.3 w 
11.3 s 

2016 
: 
14.6 ew 
: 
: 

2016 
33.2 sw 
140.1 w 
: 
: 
: 
2 338.9 w 
: 
: 
: 

: 
: 

2017 
1.5 w 
: 

2017 
-  348.6 
- 2 464.2 
827.3 
127.4 
1 161.0 
199.7 
-  7.6 
28.5 
212.0 w 
43.4 
14.1 w 
255.4 w 
86.1 w 
-  1.8 w 
11.9 s 

2017 
: 
16.6 ew 
: 
: 

2017 
32.6 sw 
120.2 w 
: 
: 
: 
2 629.5 w 
: 
: 
: 

: 
: 

2018 
1.1 w 
: 

2018 
-  508.8 
- 2 737.7 
855.8 
113.1 
1 260.0 
226.1 
-  7.1 
37.9 
225.8 w 
46.3 
13.0 
272.1 w 
58.7 
-  6.1 w 
12.0 s 

2018 
: 
17.1 ew 
: 
: 

2018 
: 
105.0 w 
: 
: 
: 
2 939.2 w 
: 
: 
: 

: 
: 

2019 
2.7 w 
: 

2019 
-  399.5 
- 2 840.2 
926.0 
160.6 
1 354.1 
236.6 
-  6.3 
37.5 
188.4 w 
66.2 
6.1 
254.6 w 
158.6 
-  5.8 w 
12.1 s 

2019 
: 
: 
: 
: 

2019 
: 
106.4 w 
: 
: 
: 
: 
: 
: 
: 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2) 
2) 

Note 

Note 

Note 

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 (2010 = 100) 
**3 year change (T/T-3) in the trade-weighted effective exchange rate index, 42 countries 
(2010 = 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 (%) 
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 
(%) 

: 
14.80 w 
4.20 w 
1 w 
: 
: 

: 
8.32 w 
0.90 w 
1 w 
: 
: 

: 
7.47 w 
1.01 w 
1 w 
: 
: 

: 
6.83 w 
1.04 w 
1 w 
: 
: 

: 
6.65 w 
1.31 w 
1 w 
: 
: 

: 
6.51 w 
1.46 w 
1 w 
: 
: 

670.3 w 

706.4 w 

605.1 w 

683.4 w 

769.3 w 

863.7 w 

2008 
1 930 
196 
- 1 734 
: 
48.0 s 
38.2 s 

2008 
12.7 

9.7 
: 
: 

2008 
: 

2015 
2 635 
325 
- 2 309 
100.0 sw 
32.4 s 
41.6 s 

2015 
9.2 e 

9.7 
: 
: 

2015 
42.8 w 

2016 
2 790 
310 
- 2 480 
90.6 sw 
22.3 s 
42.4 s 

2016 
8.4 e 

8.5 
75.9 p 
81.6 p 

2016 
44.0 w 

2017 
3 047 
378 
- 2 669 
93.0 sw 
22.0 s 
42.3 s 

2017 
8.2 e 

9.7 
: 
: 

2018 
3 347 
368 
- 2 980 
91.0 sw 
27.5 s 
42.7 s 

2018 
7.7 

10.6 
: 
: 

2019 
3 497 
384 
- 3 114 
94.2 sw 
33.2 s 
49.1 s 

2019 
6.9 

8.7 
: 
: 

2017 
49.0 w 

2018 
46.6 w 

2019 
45.2 w 

: 

29.1 w 

32.3 w 

34.4 w 

33.2 w 

34.2 w 

: 
: 
23.8 w 

8.0 w 
15.4 w 
8.6 w 
68.1 w 
: 

44.9 w 
13.2 w 
27.2 w 

2.3 w 
18.7 w 
9.5 w 
69.5 w 
32.6 w 

49.9 w 
14.6 w 
29.6 w 

4.2 w 
18.0 w 
11.5 w 
66.3 w 
30.8 w 

54.0 w 
14.6 w 
32.7 w 

4.4 w 
17.4 w 
12.9 w 
65.3 w 
28.4 w 

52.6 w 
14.1 w 
31.5 w 

3.5 w 
14.3 w 
11.9 w 
70.3 w 
30.8 w 

53.0 w 
15.6 w 
32.2 w 

5.2 w 
15.1 w 
12.6 w 
67.1 w 
27.6 w 

: 

67.4 w 

69.2 w 

71.6 w 

69.2 w 

72.4 w 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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) (2016 = 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 (%) 

Note 

47.5 w 
42.7 w 
59.6 w 
73.0 w 
18.5 w 

: 

: 

2008 
: 
: 

: 
: 
: 

32.9 w 
31.8 w 
36.6 w 
57.7 w 
23.8 w 

27.5 w 
26.2 w 
31.7 w 
52.4 w 
18.0 w 

30.3 w 
28.5 w 
36.4 w 
52.7 w 
21.7 w 

29.4 w 
28.3 w 
33.3 w 
55.4 w 
17.2 w 

25.5 w 
22.4 w 
34.4 w 
49.4 w 
16.2 w 

45.1 w 

29.6 w 

32.5 w 

35.8 w 

28.3 w 

17.4 w 

15.6 w 

23.4 w 

16.8 w 

18.0 w 

2015 
415 w 
: 

: 
: 
14.5 w 

2016 
422 w 
: 

: 
: 
12.7 w 

2017 
431 w 
: 

: 
: 
12.2 w 

2018 
453 w 
: 

44 
47.4 
9.6 w 

2019 
477 w 
: 

: 
: 
8.2 w 

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) 

Infrastructure 

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 (%) 

Note 

1) 

Note 

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 2015 constant 
prices) 

Note 

Note 

2008 
74.1 sw 
376.2 w 

2015 
156.1 esw 
487.8 w 

2016 
146.8 esw 
545.1 w 

2017 
153.6 esw 
553.1 w 

2018 
155.9 esw 
927.1 w 

2019 
162.2 sw 
982.7 ew 

: 
: 

2008 

: 
0 zw 

2008 
: 
: 
: 

: 

2008 
: 
537.5 

: 
: 

2015 

30.5 sw 
80 w 

2015 
4.5 sw 
: 
: 

: 
: 

2016 

30.5 sw 
98 w 

2016 
4.6 sw 
: 
: 

1.2 w 
: 

2017 

30.5 sw 
108 w 

2017 
4.4 sw 
: 
: 

: 
: 

2018 

30.5 sw 
119 w 

2018 
4.5 sw 
: 
: 

: 

: 

89.0 

93.0 

2015 
: 
444.9 

2016 
: 
451.3 

2017 
: 
409.0 

2018 
: 
398.1 

: 
: 

2019 

30.5 sw 
137 w 

2019 
: 
: 
: 

93.0 

2019 
: 
392.3 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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) 

Note 

1.0 
: 

2008 
1 676 
0 
1 438 
0 
601 s 
2 219 
5 162 

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) 

Note 

3) 

2008 
98.5 w 
413.2 
341.6 w 
55.3 w 
180.1 sw 
: 
437.5 
: 

1.8 
: 

2015 
1 804 
0 
1 536 
0 
697 s 
2 524 
6 119 

2015 
100.0 w 
410.8 
258.5 
44.2 
224.1 s 
: 
443.6 
: 

4.0 
: 

2016 
2 016 
0 
1 640 
0 
638 s 
2 704 
5 982 

2016 
116.9 w 
416.7 
265.0 
42.3 
212.0 s 
375.7 w 
562.9 
: 

3.6 
: 

2017 
1 793 
0 
1 412 
0 
769 s 
2 569 
5 918 

2017 
112.4 w 
417.0 
259.7 
41.1 
210.7 s 
365.1 
477.9 
: 

4.2 
: 

2018 
1 822 
0 
1 428 
0 
757 s 
2 585 
5 915 

2018 
108.3 w 
419.5 
259.7 
40.2 
209.8 s 
334.3 
441.8 
: 

5.2 
: 

2019 
1 849 
0 
1 503 
0 
815 s 
2 669 
6 351 

2019 
119.0 w 
421.0 
257.7 
40.5 
216.3 s 
342.3 w 
459.4 
: 

Source: Eurostat and the statistical authorities in Kosovo 

: = not available 
c =  confidential value 

  e = estimated value 
  p = provisional 

s = Eurostat estimate 

  w = data supplied by and under the responsibility of the national statistical authority and published on an "as is" basis and without any assurance as regards their quality and adherence to 

EU statistical methodology 
z =  not applicable and therefore equal to 0 
* = Europe 2020 indicator 
** = Macroeconomic Imbalance Procedure (MIP) indicator 
*** = This designation is without prejudice to positions on status, and is in line with UNSCR 1244/1999 and the ICJ Opinion on the Kosovo Declaration of Independence. 

  Footnotes: 

1)  The change of the area between 2016 and 2017 reflects measurements made by the Kosovo Cadastral Agency. 
2) 
3) 

Includes disbursement fee charged by banks. 
Including estimated data for four municipalities in the north of Kosovo which did not participate in the survey.