COMMISSION STAFF WORKING DOCUMENT Serbia 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
Date: 2021-10-19
Institutions: Directorate-General for Neighbourhood and Enlargement Negotiations, European Commission
Subjects: Serbia, accession criteria, accession negotiations, pre-accession strategy, regional cooperation

EN 

  EN 

   EUROPEAN COMMISSION  Strasbourg, 19.10.2021  SWD(2021) 288 final  COMMISSION STAFF WORKING DOCUMENT Serbia 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 {COM(2021) 644 final} - {SWD(2021) 289 final} - {SWD(2021) 290 final} - {SWD(2021) 291 final} - {SWD(2021) 292 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 ............................................................................................................ 4 

1.3 State of play of the accession negotiations ................................................................................... 7 

2.    Cluster 1: The Fundamentals of the Accession Process ................................................................... 8 

2.1. 

Functioning of democratic institutions and Public Administration Reform ............................ 8 

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

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

2.2. Rule of law and fundamental rights ........................................................................................... 17 

2.2.1. Chapter 23: Judiciary and fundamental rights .................................................................... 17 

2.2.2 Chapter 24: Justice, freedom and security ........................................................................... 41 

2.3 Economic criteria ......................................................................................................................... 56 

2.3.1.  The existence of a functioning market economy ............................................................. 56 

2.3.2.  The capacity to cope with competitive pressure and market forces within the EU ........ 64 

2.4. Public Procurement, Statistics, Financial control ....................................................................... 68 

Chapter 5: Public procurement ..................................................................................................... 68 

Chapter 18: Statistics ..................................................................................................................... 70 

Chapter 32: Financial control ........................................................................................................ 72 

3. Good neighbourly relations and regional cooperation ..................................................................... 75 

4.  Normalisation of relations between Serbia and Kosovo .................................................................. 78 

5.    Ability to assume the obligations of membership .......................................................................... 79 

Cluster 2: Internal Market ................................................................................................................. 79 

Chapter 1: Free movement of goods ............................................................................................ 80 

Chapter 2: Freedom of movement for workers ............................................................................ 82 

Chapter 3: Right of establishment and freedom to provide services ........................................... 83 

Chapter 4: Free movement of capital ........................................................................................... 84 

Chapter 6: Company law ............................................................................................................... 84 

Chapter 7: Intellectual property law ............................................................................................. 85 

Chapter 8: Competition policy....................................................................................................... 86 

Chapter 9: Financial services ......................................................................................................... 89 

Chapter 28: Consumer and health protection .............................................................................. 89 

Cluster 3: Competitiveness and inclusive growth ............................................................................. 93 

Chapter 10: Information society and media ................................................................................. 94 

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Chapter 16: Taxation ..................................................................................................................... 96 

Chapter 17: Economic and monetary policy ................................................................................. 97 

Chapter 19: Social Policy and employment ................................................................................... 98 

Chapter 20: Enterprise and industrial policy ............................................................................... 101 

Chapter 25: Science and research ............................................................................................... 103 

Chapter 26: Education and culture.............................................................................................. 104 

Chapter 29: Customs union ......................................................................................................... 106 

Cluster 4: The Green agenda and sustainable connectivity ............................................................ 107 

Chapter 14: Transport ................................................................................................................. 108 

Chapter 15: Energy ...................................................................................................................... 110 

Chapter 21: Trans-European networks ....................................................................................... 112 

Chapter 27: Environment and climate change ............................................................................ 113 

Cluster 5: Resources, agriculture and cohesion .............................................................................. 116 

Chapter 11: Agriculture and rural development ......................................................................... 117 

Chapter 12: Food safety, veterinary and phytosanitary policy ................................................... 118 

Chapter 13: Fisheries ................................................................................................................... 119 

Chapter 22:  Regional policy and coordination of structural instruments .................................. 120 

Chapter 33: Financial and budgetary provisions ......................................................................... 121 

Cluster 6: External relations ............................................................................................................ 122 

Chapter 30: External relations ..................................................................................................... 123 

Chapter 31: Foreign, security and defence policy ....................................................................... 124 

ANNEX I – RELATIONS BETWEEN THE EU AND SERBIA ....................................................................... 127 

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1. INTRODUCTION 

1.1  

CONTEXT  

The  European  Council  granted  Serbia  the  status  of  candidate  country  in  2012.  Since  the 
opening of Serbia’s accession negotiations in January 2014, 18 out of 35 chapters have been 
opened,  including  all  chapters  in  cluster  1  on  the  fundamentals.  Two  chapters  have  been 
provisionally  closed.  Serbia  accepted  the  revised  enlargement  methodology  and  a  first 
political  inter-governmental  conference  was  held  in  June  2021.  This  revised  methodology 
focuses  on  the  following  aspects:  (i)  a  stronger  focus  on  the  fundamental  reforms,  (ii)  a 
stronger political steer, (iii) an increased dynamism, and (iv) the predictability of the process. 
The overall pace of negotiations will continue to depend in particular on the pace of rule of 
law reforms and on the normalisation of Serbia’s relations with Kosovo.  

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

The  Serbian  government  continued  to  declare  European  integration  as  its  strategic  goal  and 
restructured  the  Ministry  for  European  Integration  to  respond  to  the  requirements  of  the 
revised methodology. The government prioritised EU-related reforms in the first half of 2021 
and made the rule of law agenda one of its key priorities and fields of action. The government 
further  delivered  on  a  number  of  important  outstanding  benchmarks  under  clusters  3 
(competitiveness  and  inclusive  growth)  and  4  (green  agenda  and  sustainable  connectivity). 
Therefore  the  Commission  has  recommended  that  the  opening  benchmarks  in  these  clusters 
were fulfilled and the clusters should be opened. Effective policy planning and coordination, 
and sufficient human and financial resources on EU accession across all institutions involved 
need to be in place to match the government’s renewed political focus. In line with their EU 
accession  objective,  the  Serbian  authorities  need  to  place  more  emphasis  on  proactive  and 
objective  communication  about  the  EU,  which  is  Serbia’s  main  political  and  economic 
partner.  

The COVID-19 pandemic continued throughout the reporting period. By early October 2021, 
Serbia had recorded around 974 000 cases and around 8 000 deaths due to the pandemic and 
administered  around  6.3  million  doses  of  vaccines.  The  Serbian  economy  recorded  only  a 
mild contraction – 1 % – in 2020, as the impact of the pandemic was mitigated by a strong 
pre-pandemic  momentum,  sizeable  and  timely  fiscal  and  monetary  support  measures,  a  low 
dependency  on  the  sectors  of  the  economy  hit  most  such  as  tourism,  and  a  relatively  short 
duration of containment measures. The fiscal space created prior to the crisis allowed Serbia 
to  provide  substantial  fiscal  support  for  crisis  mitigation  in  2020  and  2021  and  to  increase 
capital spending substantially. 

The EU continued to provide essential support to Serbia. It has allocated EUR 78.4 million to 
Serbia for socioeconomic recovery and EUR 15 million for immediate needs such as medical 
equipment, support to vulnerable groups in society, and exceptionally, the hiring of 200 extra 
medical workers to alleviate the pressure on medical personnel.  In addition, almost EUR 12 
million  has  been  allocated  to  Serbia  as  part  of  the  EU  Solidarity  Fund.  The  EU  provided  a 
grant  of  over  EUR  27  million  to  Serbia  so  it  could  purchase  vaccines  from  EU  Member 
States,  as  well  as  equipment  related  to  the  ongoing  vaccination  campaign.  Serbia  can  also 
benefit  from  a  EUR  7  million  regional  EU  project  implemented  by  the  World  Health 
Organization,  to  support  safe  and  effective  vaccination  in  the  Western  Balkans. By  early 

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

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October 2021, Serbia had received around 8.3 million  vaccines from  different  suppliers and 
had fully vaccinated around 2.75 million people (around 40% of the population). Serbia has 
become  a  regional  vaccination  hub  and  has  donated  around  600 000  vaccines  to  other 
countries  in  the  Western  Balkans,  including  North  Macedonia,  Montenegro  and  Bosnia  and 
Herzegovina.  It  has  also  vaccinated  thousands  of foreign  nationals,  mainly  from  within  this 
same region.  

Given  the  European  perspective  of  the  Western  Balkans,  the  EU  has  continued  to  treat  the 
region as privileged partners by associating them with the EU’s mechanisms and instruments, 
including  the  Health  Security  Committee,  joint  procurement  agreements,  Union  Civil 
Protection  Mechanism,  Solidarity  Fund,  consular  assistance  in  repatriation,  and  exemption 
from  temporary  EU  export  restrictions  of  medical  equipment.  The  European  Commission 
continues  to  recommend  that  emergency  measures  taken  in  the  context  of  the  COVID-19 
pandemic be proportionate, restricted to what is necessary and limited in time so that rule of 
law and democratic and human rights standards are upheld.  

1.2  

SUMMARY OF THE REPORT1 2 

As  regards  the  political  criteria,  the  Serbian  Parliament  and  political  forces  continued  to 
engage  in  the  inter-party  dialogue  led  by  the  European  Parliament,  with  a  view  to  forging 
broad cross-party consensus on EU-related reforms, which is vital for the country’s progress 
on its EU path. However, the political climate during the reporting period remained polarised. 
For the process to be successful, all political actors need to engage constructively and in good 
faith, and implement  the measures identified in  September 2021 by the  Co-facilitators from 
the European and Serbian Parliament during the inter-party dialogue.  

On  elections,  Serbia  started  addressing  long-standing  recommendations  by  the  Office  for 
Democratic Institutions and Human Rights of the Organisation for Security and Cooperation 
in  Europe  (OSCE/ODIHR)  and  the  government  reinstated  the  relevant  working  group  on 
elections.  All  key  recommendations  should  be  implemented  in  an  inclusive  and  transparent 
manner, based on wider political consensus and well ahead of the next elections. 

The Serbian Parliament’s mandate, which was formally constituted in August 2020, has been 
limited in time from the start, as the political leadership announced new elections for no later 
than spring 2022. Overall, the Parliament significantly reduced the use of urgent procedures 
and  adopted  a  new  code  of  conduct  for  Members  of  Parliament.  However,  inflammatory 
language  against  political  opponents  and  representatives  of  other  institutions  expressing 
diverging  political  views  was  still  used  during  parliamentary  debates.  All  politicians  should 
counter hate speech and contribute to a political dialogue on EU-related reforms, particularly 
on the fundamentals of democracy and the rule of law. 

A newly created Ministry for human and minority rights and social dialogue initiated a series 
of public dialogues. However, further efforts are still needed to ensure systematic cooperation 
between  the  government  and  civil  society.  An  enabling  environment  for  developing  and 

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 Serbia, 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 the 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. 

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financing  civil  society  organisations  (CSOs)  still  needs  to  be  established  on  the  ground,  as 
verbal attacks against CSOs continued, including in Parliament. 

Serbia is moderately prepared in the area of public administration reform. Limited progress 
was  made  overall  during  the  reporting  period.  Serbia  still  needs  to  ensure  (i)  merit-based 
recruitment and a reduction in the excessive number of acting senior manager positions, (ii) a 
strong  quality  control  role  for  the  Public  Policy  Secretariat  in  policy  development  and 
coordination,  and  (iii)  a  single  mechanism  for  prioritising  all  investments  regardless  of  the 
type and source of financing.  

Serbia’s judicial system has some level of preparation. Limited  progress was made over the 
reporting  period.  The  constitutional  reform  of  the  judiciary  was  relaunched  in  December 
2020, and is planned to be finalised by the end of 2021. The system for judicial appointments 
and  for  evaluating  the  work  of  judges  and  prosecutors  needs  to  be  thoroughly  revised 
following  the  adoption  of  the  constitutional  amendments,  to  allow  for  merit-based  judicial 
recruitments  and  careers  since  the  current  legal  framework  does  not  provide  sufficient 
guarantees against potential political influence over the judiciary.  

Serbia has some level of preparation in the  fight against corruption. Limited progress was 
made  over  the  reporting  period.  As  regards  the  prevention  of  corruption,  the  Council  of 
Europe’s Group of States against Corruption (GRECO) concluded that its recommendation on 
the  Agency  for  the  Prevention  of  Corruption  was  fulfilled  in  a  satisfactory  manner.  This 
recommendation  concerned  the  need  for  an  adequate  degree  of  independence  and  financial 
and personnel resources as well as on extending the Agency’s competence. Serbia has yet to 
adopt  a  new  anti-corruption  strategy  accompanied  by  an  action  plan  and  to  establish  an 
effective coordination mechanism to operationalise prevention or repression policy goals and 
effectively  address  corruption.  The  number  of  indictments  and  the  number  of  first  instance 
convictions  for  high-level  corruption  cases  further  decreased  compared  to  previous  years. 
Serbia should increase its efforts in addressing these shortcomings and step up the prevention 
and repression of corruption. 

In the fight against organised crime, Serbia has some level of preparation. Limited progress 
was made over the reporting period. Serbia has yet to establish a convincing track record of 
effective  investigations,  prosecutions  and  final  convictions  in  serious  and  organised  crime 
cases, including financial investigations leading to a track record of freezing and confiscating 
criminal assets. The number of convictions for organised crime decreased compared to 2019. 
Serbia should adapt its approach from one based on cases to a strategy against organisations, 
and  from  focusing  on  cases  of  low  or  medium  importance  to  high  profile  cases  aiming  at 
dismantling big and internationally spread organisations and seizing the assets. 

Serbia’s legislative and institutional framework for upholding fundamental rights is broadly 
in  place.  However,  it  needs  to  ensure  the  framework  is  consistently  and  efficiently 
implemented.  Human  rights  institutions  need  to  be  strengthened  and  their  independence 
guaranteed,  including  by  means  of  allocating  the  necessary  financial  and  human  resources. 
Regarding  freedom  of  expression,  limited  progress  was  made  by  adopting  and  starting  to 
implement a limited number of measures under the action plan related to the media strategy. 
However,  verbal  attacks  against  journalists  by  high-level  officials  continued  and  cases  of 
threats and violence remain a concern. Most media associations withdrew from the group on 
the  safety  of  journalists  in  March  2021,  citing  hate  speech  and  smear  campaigns  against 
journalists and civil society representatives, including by the head of the ruling party caucus 
in Parliament. These verbal attacks in Parliament took place even after a code of conduct was 
adopted  in  December  2020.  The  overall  environment  for  exercising  freedom  of  expression 
without hindrance still needs to be further strengthened in practice.  

5 

 
 
On  the  economic  criteria,  Serbia  has  made  some  progress  and  is  moderately  prepared/at  a 
good  level  of  preparation  in  developing  a  functioning  market  economy.  The  Serbian 
economy recorded only a mild contraction in 2020 as the impact of the COVID-19 crisis was 
mitigated by a strong pre-crisis momentum, sizeable and timely fiscal and monetary support 
measures,  the  sectoral  structure  of  the  economy  and  a  relatively  low  average  stringency  of 
containment  measures.  External  imbalances  narrowed  in  the  crisis  while  their  financing 
continued to  be fully covered by  Foreign  Direct  Investment  (FDI) inflows. The fiscal  space 
created  prior  to  the  crisis  allowed  Serbia  to  provide  substantial  fiscal  support  for  crisis 
mitigation  in  2020  and  2021  and  to  substantially  increase  capital  spending.  Banking  sector 
stability  was  preserved  and  lending  growth  was  robust,  supported  by  monetary  easing,  loan 
moratoria  and  liquidity-enhancing  measures.  The  labour  market  has  recorded  a  further 
decrease in unemployment in 2020, reflecting in particular lower participation rates during the 
crisis.   

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

Serbia  has  made  some  progress  and  is  moderately  prepared  to  cope  with  competitive 
pressure and market forces within the EU. The structure of the economy improved further 
and  economic  integration  with  the  EU  remained  high.  However,  despite  some  progress,  the 
quality and relevance of education and training do not fully meet labour market needs. Public 
investment has continued to increase with the aim to address serious infrastructure gaps after 
years  of  underinvestment.  Although  the  cost  of  borrowing  for  small  and  medium-sized 
enterprises (SMEs) has  declined, they still face a number of challenges, including a volatile 
business environment and unfair competition. 

On  good  neighbourly  relations  and  regional  cooperation,  Serbia  overall  remained 
committed  to  bilateral  relations  with  other  enlargement  countries  and  neighbouring  EU 
Member  States.  However,  relations  with  Montenegro  have  been  marked  by  continued 
tensions. In general, Serbia actively participates in regional cooperation.  

Regarding  the  normalisation  of  relations  with  Kosovo,  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.  Serbia  needs  to  make  further  substantial  efforts  on  the 
implementation  of  all  past  agreements  and  contribute  to  reaching  a  comprehensive  legally 
binding  normalisation  agreement  with  Kosovo.  Such  an  agreement  is  urgent  and  crucial  so 
that Kosovo and Serbia can advance on their respective European paths.  

Concerning Serbia’s ability to assume the obligations of EU membership, the country has 
carried  out  important  work  on  alignment  with  EU  acquis  over  many  areas,  particularly  on 
taxation and energy.  

The cluster on internal market is key for Serbia’s preparations for meeting the requirements 
of the EU’s internal market and is highly relevant for possible early integration measures and 
the  development  of  the  Common  Regional  Market.  Progress  was  made  on  legislative 
alignment  on  company  law,  freedom  of  movement  for  workers  and  the  establishment  and 

6 

 
 
freedom to provide services. However, no progress was made in the areas of free movement 
of capital, financial services, and consumer and health protection.  

The competitiveness and inclusive growth cluster has significant links to Serbia’s Economic 
Reform  Programme.  Progress  was  made  in  the  areas  of  taxation,  social  policy  and 
employment,  industrial  policy,  scientific  and  technological  development  and  education.  On 
taxation,  social  policy  and  employment,  Serbia  has  also  met  the  opening  benchmarks. 
However, no progress was made on strengthening fiscal rules to anchor fiscal policy.  

The Green agenda and sustainable connectivity cluster is at the heart of the Green Agenda 
for the Western Balkans endorsed by Serbia in November 2020 and closely linked to Serbia’s 
Economic Reform Programme and the Commission’s Economic and Investment Plan. Serbia 
has met the opening benchmarks on energy. The country made progress  on road safety  and 
rail  reform.  It  also  adopted  a  climate  law,  as  well  as  a  package  of  major  energy  laws, 
including new laws on renewables and energy efficiency.  

The  cluster  on  resources,  agriculture  and  cohesion  comprises  policies  linked  to  EU 
structural  funds  and  to  developing  the  capacities  to  assume  the  responsibilities  of  a  future 
Member State. It also comprises some of the key policy areas crucial for ensuring sustainable 
food  systems  and  helping  rural  communities  to  develop  and  diversify  economically.  Serbia 
made progress on food safety by recruiting staff at the national reference laboratories and by 
drafting an action plan on fisheries; on financial and budgetary as regards the management of 
own resources; and on regional policy as regards financial management. 

On the external relations cluster, Serbia’s overall patterns in aligning with the EU’s common 
foreign and security policy remained broadly unchanged. A number of actions by Serbia went 
contrary  to  EU  positions  on  foreign  policy.  In  2020,  Serbia’s  alignment  rate  with  relevant 
High Representative statements on behalf of the EU and Council Decisions stood at 56%, but 
rose  to  61%  as  of  August  2021.  Serbia  continued  to  participate  in  EU  crisis  management 
missions and operations under the common security and defence policy. No concrete progress 
was made towards finalising the accession negotiations with the World Trade Organisation. 

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

1.3 STATE OF PLAY OF THE ACCESSION NEGOTIATIONS  

Clusters 

Chapters / areas  

State of play   

Fundamentals 

All chapters open 

Internal Market 

4 chapters open 

23 – Judiciary and fundamental rights  
24 – Justice, freedom and security  
  5 – Public procurement  
18 – Statistics  
32 – Financial control 
…Economic criteria 
…Functioning of democratic institutions  
…Public administration reform 

Opened July 2016  
Opened July 2016  
Opened December 2016  
Opened December 2018 
Opened December 2015  

1 – Free movement of goods   
2  –  Freedom  of  movement  for  workers                                                
3  –  Right  of  establishment  and  freedom   
to establish services  
 4 – Free movement of capital 
 6 – Company Law  
 7 – Intellectual property law  

Opened December 2019  
Opened December 2017  
Opened June 2017  

Serbia working on fulfilment of opening benchmarks  
Draft EU Common Position in Council 
Draft EU Common Position in Council 

7 

 
 
 
 
 
 
 
 
 8 – Competition  
 9 – Financial services  
28 – Consumer and health protection 

Serbia working on fulfilment of opening benchmarks  
Opened June 2019  
Serbia invited to present its negotiating position 

Competitiveness 
and 
growth 

inclusive 

5 chapters open 

10 – Information society and media  
16 – Taxation 
17 – Economic and monetary policy 
19 – Social policy and employment  
20 – Enterprise and industrial policy  
25 – Science and research 
26 – Education and culture 
29 – Customs union  

Draft EU Common Position in Council 
Opening Benchmarks Assessment Report in Council 
Opened December 2018  
Opening Benchmarks Assessment Report in Council 
Opened February 2017  
Opened December 2016 and provisionally closed  
Opened February 2017 and provisionally closed 
Opened June 2017 

Agenda 
Green 
Sustainable 
and 
connectivity           
No chapter open 

14 – Transport policy 
15 – Energy 
21 – Trans-European networks 
27 – Environment and climate change  

Draft EU Common Position in Council 
Opening Benchmarks Assessment Report in Council 
Draft EU Common Position in Council 
Draft EU Common Position in Council 

Resources, 
Agriculture 
cohesion 

and  

2 chapters open  

External Relations 
1 chapter opened  

Not part of a cluster: 

11 – Agriculture and rural development  
12 – Food safety, veterinary and 
phytosanitary policy  
13 – Fisheries  
22 – Regional policy and coordination of        
structural instruments  
33 – Financial and budgetary provisions  

Opening Benchmarks Assessment Report in Council 
Serbia working on fulfilment of opening benchmarks  

Opened June 2018 
Opening Benchmarks Assessment Report in Council 

Opened June 2018  

30 – External relations  
31 – Foreign, security and defence policy  

Opened December 2017   
Screening Report in Council 

Chapter 34 – Institutions is currently not applicable for Serbia 
Chapter 35 – Other Issues / Normalisation with Kosovo opened in December 2015 

2.    CLUSTER 1: THE FUNDAMENTALS OF THE ACCESSION PROCESS 

2.1. 

FUNCTIONING  OF  DEMOCRATIC  INSTITUTIONS  AND  PUBLIC  ADMINISTRATION 
REFORM  

2.1.1   Democracy  

The Serbian Parliament and political forces continued to engage in the inter-party dialogue led 
by  the  European  Parliament,  with  a  view  to  forging  broad  cross-party  consensus  on  EU-
related reforms, which is vital for the country’s progress on its EU path. The political climate 
during  the  reporting  period  remained  polarised.  Inflammatory  language  against  political 
opponents  and  representatives  of  other  institutions  expressing  diverging  political  views  was 
used  during  parliamentary  debates.  This  included  verbal  attacks  against  civil  society 
organisations  and  media  by  representatives  of  the  ruling  coalition.  All  politicians  should 
counter hate speech and contribute to a political dialogue on EU-related reforms in particular 
on  the  fundamentals  of  democracy  and  the  rule  of  law.  Institutions  need  to  improve 
cooperation with civil society and treat it as an essential partner in reforms and a guarantor of 
effective checks and balances.  

Elections  

Serbia  started  addressing  long-standing  recommendations  by  the  Office  for  Democratic 
Institutions  and  Human  Rights  at  the  Organisation  for  Security  and  Cooperation  in  Europe 
(OSCE/ODIHR) and the government reinstated the relevant working group on elections. All 

8 

 
 
 
 
 
 
 
 
 
key recommendations should be implemented in an inclusive and transparent manner, based 
on wider political consensus and well ahead of the announced 2022 elections. It is important 
that the authorities and all political actors in Serbia continue to engage constructively in the 
inter-party  dialogue  led  by  the  European  Parliament  and  implement  the  measures  identified 
therein.  

Further  to  the  regular  parliamentary  elections  of  21  June  2020,  which  were  observed  by  an 
ODIHR  Special  Election  Assessment  Mission,  ODIHR  issued  its  final  report  on  7  October 
2020.  The  report  corroborated  ODIHR’s  key  finding  of  the  preliminary  statement,  notably 
that  the  elections  were  administered  efficiently,  despite  challenges  posed  by  the  COVID-19 
pandemic,  but  dominance  of  the  ruling  party,  including  in  the  media,  was  of  concern.  The 
report  also  noted  that  many  previous  ODIHR  recommendations  remain  to  be  addressed, 
including  on  election  administration,  media,  campaign  finance,  dispute  resolution  and 
sanctions for electoral violations. 

In  December  2020,  the  government  reinstated  the  working  group  on  elections.  The  group 
worked on the amendments of several laws, including the law on election of MPs and the law 
on financing of political activities. However, gaps remain. Among other issues, the campaign 
finance regulatory framework still does not ensure transparency of campaign finance and the 
effectiveness of oversight. Work on meeting all ODIHR recommendations should be stepped 
up in a transparent and inclusive manner, to make use of the period between elections for a 
comprehensive and inclusive review of the electoral framework. 

On  1  March  2021,  the  Serbian  and  European  Parliaments  officially  kicked  off  the  second 
phase of the Inter-Party Dialogue. In April-June, the European Parliament held several rounds 
of  online  consultations  with  all  the  relevant  stakeholders.  Two  plenary  meetings  with  wide 
political  participation  were  held  in  July  and  September  in  Belgrade  focusing  on  electoral 
conditions, but also on improving the wider political climate and dialogue. At the September 
plenary  meeting,  the  Co-Facilitators  from  the  European  and  Serbian  Parliament  reached  an 
agreement on a working document containing 16 measures to increase trust and confidence in 
the electoral  process,  with  a set  of  concrete  actions  and timelines. The  Government  and the 
ruling  party  expressed  their  intention  to  implement  the  measures.  On  14  October  2021  the 
Government adopted a decision on formation of a temporary supervisory body for monitoring 
media  during  the  electoral  campaign,  as  foreseen  in  the  working  document.  A  number  of 
opposition representatives did not agree to the final document that was finally presented as the 
ownership  of  the  Co-Facilitators  and  did  not  commit  themselves  to  participating  in  their 
implementation.  The  authorities  held  a  separate  track  of  local  consultations  with  political 
actors who refused mediation by the European Parliament.  

Parliament  

Following parliamentary elections in June 2020, the mandate of the newly elected Parliament 
has been limited in time from the start as the political leadership announced new elections for 
no later than spring 2022. The Parliament overall reduced urgent procedures to 9% in 2020. 
The Parliament adopted a new code of conduct for Members of Parliament (MPs); however, 
it did  so under urgent  procedure and without consulting the public or relevant  international 
organisations.  Inflammatory  language  against  political  opponents,  journalists  and  civil 
society  was  used  during  plenary  debates.  The  code  of  conduct  should  be  used  more 
effectively  in  preventing  and  sanctioning  offensive  language.  The  Parliament  and  political 
actors should continue to engage constructively in the inter-party dialogue.  

Following  elections  in  June  2020,  the  new  Parliament  was  formally  constituted  at  the 
beginning  of  August,  while  the  parliamentary  leadership  was  elected  and  working  bodies 
constituted in October. In the new Parliament, the ruling coalition of the Serbian Progressive 
9 

 
 
Party list (SNS, 188 seats), the Socialist Party of Serbia list (SPS, 32 seats), and the Serbian 
Patriotic Alliance (SPAS, 10 seats), which later merged with the SNS, controls 230 of the 250 
parliamentary seats. Two national minority parties also support the government, while several 
national  minority  representatives  and  one  independent  MP  (together  seven  seats)  act  as  the 
opposition. Out of six deputy speakers, two are women and two belong to national minorities. 
Women chair five out of 20 committees. Of 250 MPs, 98 are women – the largest number so 
far – and there is an active women parliamentary network. The new Parliament – plenary and 
the committees – resumed physical sessions in October 2020, with epidemiological measures 
in place.  

The Parliament has no annual working plan. The weekly and monthly planning has improved 
due to regular weekly meetings of the parliamentary Collegium (composed of speaker, deputy 
speakers  and  chairpersons  of  parliamentary  groups).  The  use  of  urgent  procedures  has  been 
significantly reduced to 9% since March 2020, compared to 19% in the previous period: out 
of 133 laws, 12 were adopted under urgent procedure. In the first half of 2021, out of 75 laws 
only  two  were  adopted  under  urgent  procedure.  The  Code  of  Conduct  for  Members  of 
Parliament,  however,  was  adopted  under  urgent  procedure  and  without  public  consultation, 
thus limiting the transparency and inclusiveness of the process. There was a heavy legislative 
agenda.  The  vast  majority  of  bills  continued  to  be  tabled  by  the  government.  Three  public 
hearings were held in 2020 and 12 in the first half of 2021, out of which seven were in the 
context of constitutional changes.  

Committees  held  reviews  of  regular  periodic  reports  by  the  relevant  Ministries.  Regular 
monthly sessions with MPs questions to the Prime Minister and Ministers were held.  Twice a 
week,  at  the  outset  of  the  plenary,  MPs  seek  information  and  explanation  from  the 
government. There were 133 such requests in 2020, and 84 were answered.  

The  parliamentary  plenary  debated  regular  annual  reports  by  independent  bodies.  However, 
the  Parliament  should  support  the  work  of  the  independent  regulators  more  systemically, 
through regularly monitoring the implementation of their recommendations.   

In December 2020, for the first time, the European Commission report on Serbia was debated 
and  related  conclusions  adopted  in  the  plenary,  following  the  debate  in  the  European 
Integration Committee. In April 2021, the Committee also debated the European Parliament’s 
resolution  on  Serbia,  with  the  participation  of  the  European  Parliament  rapporteur.  The 
European  Integration  Committee  held  debates  with  the  participation  of  the  Ministry  for  EU 
integration, including one on the revised enlargement methodology, and related plans for the 
restructuring of the Serbian negotiating team. In May and June 2021, the Committee endorsed 
four draft negotiating positions (on chapters 19, 10, 16 and 15), tabled to the Committee by 
the government. In June 2021, the Parliament, with the participation of the President, debated 
the EU-facilitated dialogue with Pristina.  

The Parliament has constructively engaged in the second phase of the inter-party dialogue led 
by  the  European  Parliament.  For  the  process  to  be  successful,  all  political  groups  need  to 
engage  constructively  and  in  good  faith,  and  implement  the  measures  identified  during  the 
inter-party dialogue.  

The  Parliament  adopted  a  new  code  of  conduct  for  MPs  in  December  2020.  Nonetheless, 
inflammatory  language  against  political  opponents,  prominent  public  figures  expressing 
diverging political views, investigative media, civil society organisations, and Members of the 
European  Parliament  continued  to  be  used  in  parliamentary  debate.  In  March  2021,  the 
Parliament’s administrative committee, in charge of overseeing the application of the newly 
adopted  code  of  conduct,  rejected  the  first  cases  of  complaints  raised  by  civil  society 
representatives. This committee then found, for the first time in April 2021, a violation of the 

10 

 
 
code, in a case of verbal attacks against politicians from the opposition.  In September 2021, 
Parliament adopted a revised version of the code of conduct which was prepared with the aim 
to  follow-up  on  the  GRECO  recommendations.  The  code  of  conduct  should  be  used  more 
effectively  in  preventing  and  sanctioning  offensive  language,  for  example  through  the 
establishment of an independent oversight body. 

New rules of procedure still need to be adopted, in line with best standards and practices. The 
effectiveness,  autonomy  and  transparency  of  the  Parliament,  including  the  role  of  the 
parliamentary  opposition,  needs  to  be  unambiguously  strengthened,  in  order  to  ensure  the 
necessary checks and balances.  

Governance  

The  Serbian  government  continued  declaring  EU  membership  as  a  strategic  goal.  Ahead  of 
the  inter-governmental  conference  in  June  2021,  the  government,  in  particular  the  Ministry 
for  EU  integration  supported  by  line-Ministries,  delivered  on  accession  related  documents 
very  quickly.  Serbia  also  restructured  its  EU  negotiating  team  to  reflect  the  revised 
enlargement  methodology.  Still,  sufficient  human  and  financial  resources  on  EU  accession 
need to be in place across all institutions involved to match the renewed political focus by the 
government.  In  line  with  the  EU  accession  objective,  the  Serbian  authorities  need  to  place 
more emphasis on proactive and objective communication on the EU, which is Serbia’s main 
political and economic partner. 

As a result of the regular parliamentary elections in June 2020 and the constitution of the new 
Parliament, the Serbian government was elected and sworn in on 28 October 2020. The new 
cabinet has 24 members, out of whom 11, including the Prime Minister, are women. There are 
three  new  portfolios:  the  Ministry  for  Human  and  Minority  Rights  and  Social  Dialogue, 
Ministry for Family Care and Demographic Issues and Ministry for Rural Care. Rule of law 
and  accession-related  reforms  are  among  the  six  key  programmatic  priorities  of  the  new 
government.  The  government  prioritised  EU-related  reforms  in  the  first  half  of  2021  and 
made the rule of law agenda one of its key priorities and fields of action. However, Serbia’s 
strategic  choice  of  EU  accession  needs  to  be  communicated  more  pro-actively  and 
unambiguously  in  public  debate.  Further  efforts  are  needed  to  promote  EU  values  in  public 
debate and in practice.  

In  December  2020,  the  government  tabled  to  the  Parliament  the  initiative  for  the 
constitutional  revision  (see  under  judiciary).  There  was  regular  dialogue  and  consultations 
between  the  Prime  Minister  and  the  National  Convention  for  the  EU  on  accession-related 
issues such as the rule of law, sustainable growth, energy and environment. The Convention 
was  formally  invited  to  contribute  to  the  revision  and  to  the  drafting  of  several  important 
laws. In April 2021, the Prime Minister for the first time held a press conference to inform the 
wider public of the government’s activities in the rule of law area.  

Further efforts are however needed in order to improve the transparency and inclusiveness of 
the  reform  process,  particularly  on  issues  related  to  EU  accession.  The  Serbian  negotiating 
team,  headed  by  the  Minister  for  EU  integration,  was  restructured  to  reflect  the  revised 
enlargement  methodology.  The  new  structure  aims  in  particular  at  facilitating  coordination 
between line-Ministries under the new cluster approach and increase the political steer. It is 
important  that  sufficient  human  and  financial  resources  are  allocated  across  all  institutions 
involved so that Serbia can meet its objectives on EU accession negotiations.  The autonomy 
and  role  of  independent  bodies  needs  to  be  fully  acknowledged  and  respected,  and  their 
recommendations  followed  up  thoroughly  and  in  a  timely  manner.  The  Ombudsman  Office 

11 

 
 
needs to be strengthened and its independence guaranteed, including via the allocation of the 
necessary financial and human resources.  

As  regards  local  self-government,  the  law  on  Vojvodina’s  financing  resources  has  still  not 
been  adopted,  despite  being  provided  for  under  the  Constitution.  Local  administrative 
capacity 
is  still  weak  and  significant  disparities  between  municipalities  persist. 
Responsibilities still continue to be borne at local level without proper analysis of the capacity 
and  human/financial  resources  required.  In  June  2021,  the  government  adopted  for  the  first 
time the programme for local government system reform, which aims to address deficiencies 
in the functioning of local government.  

Civilian oversight of the security forces  

The Parliament remains responsible for the civilian oversight of security services. The Law on 
access to state security files has not yet been adopted.  

The relevant parliamentary committee continues to be responsible for the civilian oversight of 
the security sector. The Committee reviewed regular periodic reports by the civilian and two 
military security agencies, as well the activity report of the General Inspector of the Ministry 
of Defence. Because of  the pandemic, no  field  visits  to  security agencies were organised in 
2020. A law on the access to the state security files still needs to be adopted.  

Civil society 

A newly created Ministry for human and minority rights and social dialogue initiated a series 
of public dialogues. However, further efforts are still needed to ensure systematic cooperation 
between  the  government  and  civil  society.  An  enabling  environment  for  developing  and 
financing civil society organisations (CSOs) still needs to be created on the ground, as verbal 
attacks against CSOs continued, including in Parliament. 

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

CSOs  and  human  rights  defenders  continued  to  raise  awareness  about  civil  and  political 
rights.  This  takes  place  in  an  increasingly  polarised  environment.  In  December  2020,  the 
Financial Action Task Force (FATF) expressed concerns regarding the allegations that Serbia 
had misused in July 2020 its law on the prevention of money laundering and the financing of 
terrorism with the aim to restrict or coerce civil society actors for their work and criticism of 
the  government.  In  its  plenary  session  of  April  2021,  the  Committee  of  Experts  on  the 
Evaluation  of  Anti-Money  Laundering  Measures  and  the  Financing  of  Terrorism  of  the 
Council  of  Europe  (MONEYVAL)  called  on  all  members  to  ensure  that  the  FATF 
Recommendations  are  not  intentionally  or  unintentionally  used  to  suppress  the  legitimate 
activities  of  civil  society  (See  Chapter  4  –  Free  Movement  of  Capital,  and  Chapter  24  – 
Justice,  Freedom  and  Security).  Verbal  attacks  and  smear  campaigns  against  several  CSOs 
and their financing continued in tabloid newspapers, as well as in Parliament even after a code 
of conduct was adopted there in December 2020. Organisations and individuals that criticise 
the authorities in developments related to the rule of law, and increasingly to environmental 
protection, are under particular pressure. 

The legal framework for cooperation between the government and CSOs is broadly in place; 
its  implementation  needs  to  be  improved  and  systematised  (See  Public  Administration 
Reform). A number of CSOs have reported that the time given for public consultations was 
still  too  short,  or  that  their  comments  on  draft  laws  were  not  given  sufficient  consideration 
and follow-up. In October 2020, the newly formed government created a Ministry for Human 
and Minority Rights and social dialogue. It took over, among others, the competencies of the 

12 

 
 
Office for Cooperation with Civil Society and initiated a series of public dialogues on various 
topics  of  general  interest,  gathering  members  of  the  government,  independent  bodies, 
international organisations and CSOs. The National Convention on the EU has continued to 
monitor and assess the progress of accession negotiations. 

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

In order to mitigate the economic consequences of the COVID-19 pandemic, Serbia adopted a 
regulation  on  fiscal  benefits  and  direct  payments  to  economic  entities  recognising  CSOs  as 
potential users of economic aid.  

2.1.2. Public administration reform  

Serbia  is  moderately  prepared  as  regards  the  reform  of  its  public  administration.  Overall, 
limited progress  was made in this  area during the reporting period. The three Commission 
recommendations of last year remain still valid. On human resources management, there was 
no progress in reducing the excessive number of acting senior manager positions. As regards 
policy development  and  coordination, there is  still no mechanism in  place to  verify that the 
Public Policy Secretariat’s comments have been incorporated into the final draft versions of 
laws  and  policy  documents  submitted  for  government’s  approval.  On  public  financial 
management,  the  recommendation  to  develop  a  single  mechanism  for  prioritising  all 
investments  regardless  of  the type and source of financing still  needs to  be fully addressed. 
There is an urgent need to address all those shortcomings.  

Other  developments  include  the  adoption  of  a  new  PAR  strategic  framework  for  the  period 
2021-2030.  The  administration  also  swiftly  responded  to  the  COVID-19  crisis  through  the 
effective provision of related e-services. 

In the coming year, Serbia should in particular:  

  ensure that recruitment procedures are launched for all the acting posts in order to reduce 
the  excessive  number  of  acting  positions,  and  allocate  sufficient  resources  for  effective, 
merit-based recruitment processes;  

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

effective implementation of the law on the planning system;  

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

planning and management.  

Strategic framework for public administration reform  

In April 2021, the government adopted a new public administration reform (PAR) strategy 
2021–2030, with its action plan 2021-2025. The new strategy consists of six pillars covering 
the areas of the EU Principles on Public Administration. It includes, for the first time, a pillar 
dedicated  to  local  self-government  reforms.  Out  of  the  six  pillars,  three  are  operationalised 
further  by  the  aforementioned  action  plan,  and  the  other  three  are  covered  by  separate 
programmes, namely the public financial management (PFM) reform programme adopted in 
June  2021,  and  the  programmes  for  local  self-government  and  for  improving  public  policy 
management and regulatory reform which had not been adopted in the reporting period. Civil 
society organisations were actively involved in the preparation of the new strategy.  Political 
support for public administration reform continues to be ensured through the PAR Council, 
chaired by the minister in charge of public administration. Two meetings of the PAR Council 
were held  in  2020.  Financial sustainability  remains  an issue of concern due to  reliance on 
donor funding.  

13 

 
 
Policy development and coordination  

Institutions  are  in  place  for  a  central  government  policymaking  system,  including  for  the 
European integration process. The structure for coordinating the latter was changed in April 
2021 in order to take into account the revised enlargement methodology. Coordinators were 
appointed for each of the six negotiations clusters. The law on the planning system sets out 
clear  rules  for  developing,  monitoring  and  reporting  on  sector  strategies  but  is  not 
systematically  applied.  There  is  still  no  mechanism  to  verify  that  the  Public  Policy 
Secretariat’s comments  have been incorporated  and that the final  draft versions of laws and 
policy documents are compliant with the legislation. A limited number of policy documents 
has  been  entered  so  far  in  the  unified  information  system,  thus  limiting  the  number  of 
implementation  reports  deriving  from  it.  The  legal  requirement  to  have  mid-term  plans 
adopted by all institutions as of January 2020 has not yet been met. Only three ministries, the 
Public Policy Secretariat and three public service agencies adopted and published their mid-
term  plans  for  the  2021-2023  period.  The  national  plan  for  the  adoption  of  the  EU  acquis 
(NPAA) and the government annual work programme need to be better synchronised. 

The  capacity  for  inclusive  and  evidence-based  policy  and  legislative  development, 
including  when  aligning  with  the  EU  acquis,  still  needs  strengthening.  Administrative  data 
collection  and  its  systematic  use  for  policy  and  law-making  needs  to  be  further  improved 
across  the  administration.  The  methodology  on  impact  assessments  is  not  yet  consistently 
applied  in  practice.  The  Public  Policy  Secretariat’s  acceptance  of  ‘partial  compliance’  with 
the methodology does not contribute to the alignment with the legal requirements nor to the 
overall  quality  of  the  impact  assessments.  Better  coordination  between  the  Ministry  of 
Finance and the Public Policy Secretariat is needed to ensure that there are no discrepancies 
between  financial  impact  assessments  and  financial  information  in  the  regulatory  impact 
assessments. Regarding inter-ministerial consultations, official high-level mechanisms still do 
not exist for resolving possible conflicts between services before they reach the government 
level.  The  regulatory  framework  for  public  consultations  is  in  place,  the  scope  of  public 
consultations on public policy documents improved, and the government adopted a decision 
in June 2021 to launch a new ‘e-Consultations Platform’. However, its consistent application 
regarding  draft  laws  and  regulations  is  not  yet  ensured.  There  is  no  body  mandated  to 
scrutinise  the  manner  in  which  a  public  consultation  process  was  organised.  As  regards  the 
legal obligation to inform on the results of public consultations, consultations reports are not 
systematically  published  nor  are  explanations  on  the  acceptance  or  not  of  comments 
systematically provided (See Civil society).  

As regards public scrutiny of government work, no reports on the government annual work 
programme, NPAA, or sector strategies – except on the action plan of the PAR strategy and 
on  the  PFM  reform  programme  –  were  published  in  2020.  The  government’s  website  still 
does not provide a direct access to monitoring reports on implementation of key government 
planning  documents.  Agenda,  minutes  and  conclusions  of  government  sessions  are  not 
published either.  

Public financial management  

A  new  PFM  Reform  Programme  2021-2025  was  adopted  in  June  2021.  A  comprehensive 
package of monetary, fiscal and financial emergency measures was implemented to mitigate 
the  negative  economic  impact  of  the  COVID-19  pandemic.  The  cost  of  these  measures  has 
increased the overall fiscal deficit and the public debt. However, the government succeeded in 
keeping the public finances on a sustainable path in line with the medium-term fiscal goals. 
The capital budget execution level continued its upward trend but a unified, comprehensive, 
effective and transparent system for planning and management of capital investments needs to 
be put in place. Serbia needs to apply the full methodology of the decree on capital projects 
14 

 
 
to  guarantee 

management, as well as public procurement procedures, to all capital investments regardless 
of the type of investment or the source of financing, and ensure that effective procedures are 
in  place 
integration  of  capital  projects’  planning,  appraisal  and 
implementation  in  the  budget  process.  Furthermore,  the  government’s  investment  planning 
and management capacity needs to be improved. This includes the capacity for public assets 
management  and  for  assessing  possible  fiscal  risks  for  the  investment  projects  funded  by 
loans from third countries.  

the 

The link between the  government  programme and sector strategies and operational  plans of 
budget  beneficiaries  remains  weak.  The  improved  legislative  framework  for  public 
procurement  and  internal  control  needs  to  be  implemented  in  practice.  The  State  Audit 
Institution  has  continued  to  increase  both  the  coverage  and  quality  of  their  audits  of  public 
funds as well as its relations with stakeholders (See Chapters 5 – Public procurement, and 32 
– Financial control).  

Serbia did not progress in improving budget transparency. Neither a transparency roadmap, 
a  pre-budget  statement,  nor  a  mid-year  report  are  produced  and  published.  The  Ministry  of 
Finance does not publish the budget execution profile at the beginning of the year, preventing 
any analysis of deviations from targets. Public participation in the budget process and budget 
oversight by the legislature needs to be improved. The 2021 budget was adopted in line with 
the  budget  calendar  but  still  with  very  limited  qualitative  assessment  and  debate  among  the 
stakeholders.  

Public service and human resources management  

The  civil  service  legislation  provides  for  merit-based  recruitment  and  dismissal 
procedures,  but  too  much  discretion  to  heads  of  institutions  in  setting  up  selection 
committees.  The  enforcement  of  the  mandatory  competition  procedure  for  recruiting 
temporary  staff  in  cases  of  increased  workload  was  postponed  from  2021  to  2023.  The 
possibility  to  convert  certain  categories  of  temporary  contracts  into  permanent  civil  service 
contracts needs to be considered carefully in order to avoid possible abuse. Grades received 
by civil servants in the first year of implementation of the new performance appraisal system 
remain inflated. A high share (72%) of disciplinary decisions are annulled by courts. 

The lack of transparency in, and respect for, the merit-based recruitment procedure provided 
for under the Serbian legislation for senior civil service positions remains an issue of serious 
concern.  The  legal  provision  allowing  for  appointments  to  ‘acting  positions’  for  6  months 
(with  a  maximum  extension  of  3  months)  is  mostly  misused,  including  in  a  retroactive 
manner. As of June 2021, 62% (March 2020: 56%) of filled senior positions were held on an 
acting basis. Despite the amendments to the law on civil servants restricting the appointments 
to already existing civil servants as of 1 July 2019, the government continued to appoint non-
civil  servants  on  an  acting  basis.  More  than  half  of  appointed  acting  posts  after  the  set 
deadline  were  not  civil  servants.  The  limited  capacity  of  the  High  Civil  Service  Council 
remains a concern as regards the need to organise a large number of competitions in order to 
replace at a reasonable speed all the existing acting managers. Clear political will, sufficient 
resources  and  effective  monitoring  by  the  responsible  institutions,  are  necessary  to  address 
this  issue  as  a  matter  of  urgency.  Current  practices,  where  appointment  decisions  for 
management positions  can be overturned by a personnel  committee of the government  after 
the  selection  process  has  been  finalised  at  the  institutional  level,  continue  to  lack 
transparency.  

As  regards  the  new  competency-based  human  resources  management  system,  the  success 
rate of tested competences is extremely high (over 90%). The Human Resources Management 
Service  needs  to  strengthen  its  capacity  to  coordinate  and  harmonise  the  work  of  human 

15 

 
 
resources  units  of  the  line  institutions.  There  are  not  yet  reliable  statistical  data  and  annual 
reporting  as  the  setting  up  of  a  new  human  resources  management  information  system  is 
delayed.    The  current  system  does  not  interact  with  other  national  databases  such  as  the 
treasury  payroll  registry.  No  progress  was  made  regarding  remuneration  of  civil  servants. 
The  implementation  of  the  2016  law  on  the  salary  system  in  the  public  sector,  which 
introduces the principle of equal pay for equal work for all public sector employees, is further 
delayed as it was again postponed for another year, to 2022. The law on maximum number of 
employees in  the public  sector was no longer in  force in  2020.  However, restrictions in  the 
number of employees remained in place through the budget system law.   

With  regard  to  professional  development,  the  National  Training  Academy  for  Public 
Administration  continued  organising  training  for  all  public  officials,  including  at  the  local 
self-government 
trainings  and  webinars. 
Implementation  of  a  comprehensive  professional  development  programme  for  senior  civil 
servants was postponed to the second half of 2021.  

through  quickly  adapting 

to  online 

level, 

Further efforts are needed to  ensure that the existing  integrity plans  in  the judiciary  and in 
the  public  administration  are  fully  implemented.  The  integrity  of  the  civil  service  remains 
undermined by the aforementioned excessive number of acting senior manager posts.  There 
are no tangible improvements in relation to anti-corruption efforts at local level. 

Accountability of administration  

The  structure  of  the  public  administration  has  yet  to  be  streamlined.  The  lines  of 
accountability  between  agencies  and  their  parent  institutions  continue  to  be  blurred, 
contributing to overlapping functions, fragmentation, and unclear reporting lines. In spite of 
the existence of the law on public agencies, almost all agencies of this type have their status 
regulated  differently  with  a  special  law.  Political  commitment  to  managerial  accountability, 
performance  management  and  systematic  delegation  of  responsibilities  is  still  needed.  The 
planned establishment of a registry of holders of public powers has however been postponed 
to  2025  under  the  new  PAR  strategic  framework.  The  overdue  decree  on  organisation  and 
systematisation of work posts, introducing so-called “analytical units”, was adopted in March 
2021.  It  now  needs  to  be  enforced  in  practice  by  promptly  establishing  such  units  with 
adequately trained staff. Institutions still have a bureaucratic and process-oriented approach to 
planning, budgeting and the reporting of their activities (See Chapter 32 – Financial control).  

The  Ombudsman  has  a  key  role  in  ensuring  citizens’  rights  to  good  administration. 
According  to  the  Ombudsman’s  2020  report,  cases  of  violations  of  principles  of  good 
governance  represent  the  second  largest  number  of  cases  immediately  after  the  violation  of 
economic and property rights. The Ombudsman’s annual report was discussed in a Parliament 
plenary session and conclusions were adopted in December 2020 (See Governance). 

Citizens’ right to access public information is regulated in the law on access to information 
of public importance.  Administrative silence, whereby public  authorities  fail to  properly  act 
on  the  citizens’  information  requests,  remains  a  major  issue.  Enforcement  of  the  decisions 
taken by the Commissioner for Information of Public Importance has yet to be ensured (See 
Chapter 23 – Fight against corruption).  

On citizens’ right to administrative justice, the review of judgments  of the administrative 
court  is  possible  only  in  a  limited  number  of  cases  and  only  through  extraordinary  legal 
remedies.  Establishing  a  two-instance  network  of  administrative  courts  to  ensure  access  to 
justice, as well as an appeal procedure, are foreseen for 2023 in the revised chapter 23 action 
plan. Access to justice is negatively affected by the continuous backlog of cases standing at 
nearly  8,000  cases,  with  around  5,000  electoral  cases  received  in  2020  due  to  the 

16 

 
 
parliamentary elections. Court caseload increased further, owing to the continuous expansion 
of jurisdiction and a relatively small number of judges.  

The new free legal aid law has been implemented since October 2019. Available data indicate 
a gradual increase in the use of legal aid, predominantly in civil and administrative cases and 
for  victims  of  domestic  violence.  Only  one  third  of  local  municipalities  and  cities  have 
established specialised units for free legal aid so far  (see Fundamental rights section).While 
the citizens’ right to seek compensation  is regulated, still no statistical data is collected to 
monitor its implementation.  

Service delivery to citizens and businesses  

Creating a more user-oriented administration remains a government’s priority. Progress in 
developing  e-services  continued,  which  facilitated  to  a  great  extend  the  response  of  the 
administration to the COVID-19 pandemic. The e-government portal served as a single point 
of  contact  to  citizens  for  testing  and  vaccination  services.  The  central  population  registry, 
connecting thirteen official databases, was rolled out in November 2020. A full set of by-laws 
related  to  the  law  on  e-government  has  yet  to  be  adopted.  The  government  has  started  to 
implement the new e-government programme. Service delivery was included for the first time 
as a separate pillar of a newly adopted PAR strategy. The e-government office and the Prime 
Minister’s  Delivery  Unit  have  continued  to  ensure  coordination  and  leadership  in  this  area. 
Monitoring of e-services implementation is needed. Digital signatures are being used but the 
share of the population who avail of this service is still limited. 

The legal framework for simplification of administrative procedures is in place. However, 
regulatory  uncertainty  for  individuals  and  businesses  remains  due  to  persisting  delays  in 
aligning the sector legislation with the law on general administrative procedures. The capacity 
of the Ministry of Public Administration and Local Self-Government to efficiently oversee the 
implementation  of  this  law  remains  limited,  and  overlaps  exist  with  the  role  of  the  Public 
Policy Secretariat. This Secretariat started to implement the ‘e-paper’ programme 2019-2021 
for  the  optimisation  of  administrative  procedures  and  regulation,  including  the  adoption  in 
April  2021  of  a  law  on  the  register  of  administrative  procedures.  By  the  end  of  2020,  136 
procedures were simplified and 27 digitised. However, the e-paper programme is not clearly 
linked with the process of aligning sector legislation and/or special procedures with the law 
on general administrative procedures. 

2.2. RULE OF LAW AND FUNDAMENTAL RIGHTS 

2.2.1. Chapter 23: Judiciary and fundamental rights 

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

Serbia has some level of preparation in applying the EU acquis and the European standards 
in  this  area.  Limited  progress  was  made  in  the  reporting  period.  The  constitutional  reform 
aimed at strengthening the independence of the judiciary was relaunched in late 2020, and the 
parliamentary procedure started in spring 2021. Serbia undertook further efforts with the aim 
to  finalise  the  procedure  still  this  year.  The  current  legal  framework  does  not  provide 
sufficient guarantees against potential political influence over the judiciary. Serbia has a very 
weak  track  record  in  the  processing  of  war  crimes  cases.  Overall,  unambiguous  and 
determined steps on prevention and repression of corruption remain to be taken. Serbia’s legal 
framework  on  fundamental  rights  is  broadly  in  place  but  its  implementation  is  inconsistent. 
Regarding  freedom  of  expression,  limited  progress  was  made  by  adopting  and  starting  to 

17 

 
 
implement a limited number of measures under the action plan related to the media strategy, 
while verbal attacks against journalists by high-level officials continued. 

Serbia  adopted  a  revised  action  plan  for  chapter  23  in  July  2020.  It  sets  out  Serbia’s 
commitments, including in terms of timelines, in order to meet the interim benchmarks of the 
EU  common  positions  for  this  chapter.  In  general,  indications  of  delays  in  this  report  are 
measured  against the deadlines established by Serbia itself in the revised action plans. As a 
consequence  qualified  delays  (e.g.  “serious  delays”)  noted  in  previous  non-papers  are  not 
used in the current report. This “resetting of the clock” does not imply that previously noted 
long delays have necessarily disappeared. 

The first meeting of the new inter-institutional coordination body was held in April 2021. A 
new  methodology  aimed  at  improving  monitoring  and  reporting  was  presented  to  25 
representatives  of  various  institutions.  The  second  meeting  took  place  in  July  2021.  The 
publication,  on  the  website  of  the  Ministry  of  Justice,  of  reports  on  the  progress  in  the 
implementation  of  the  revised  action  plan  for  chapter  23  for  the  Serbian  public  resumed  in 
August  2021  after  an  interruption  in  December  2018.  There  is  a  need  to  improve  efforts  in 
implementation of the Action Plan on Chapter 23 including through consultations focused on 
the most demanding challenges with more involvement of all relevant stakeholders.  

Functioning of the judiciary 

Serbia  has  some  level  of  preparation  in  the  area  of  the  judiciary.  Limited  progress  was 
made overall. The administrative capacity of the High Judicial Council was strengthened and 
its  internal  organisation  improved.  The  number  of  old  enforcement  cases  continued  to 
decrease and court practice was further harmonised. Last year’s recommendations still need to 
be  implemented  and  therefore  remain  valid.  The  current  legal  framework  does  not  provide 
sufficient guarantees against potential political influence over the judiciary. The constitutional 
reform in the area of the judiciary was relaunched in December 2020, when the government 
submitted  the  initiative  to  Parliament.  A  broad  and  constructive  discussion  with  relevant 
stakeholders  has  been  launched,  in  order  to  define  the  best  solutions  bearing  in  mind  the 
Venice Commission recommendations, in line with European standards and based on a wide 
and inclusive  consultation  process.  The  Parliamentary  Committee has  adopted the draft text 
prepared  by  the  expert  working  group  on  6  September  2021  as  basis  for  the  next  round  of 
public  debates,  taking  place  from  13  to  17  September.  The  text  was  adopted  in  the 
parliamentary committee on 21 September sent to the Venice Commission for its opinion. On 
15 October, the Venice Commission issued a favourable opinion of the draft text, including 
key recommendations to be addressed. Once finalised, the text will be adopted in Parliament 
and put for a referendum, planned for December 2021. The timeline to complete the process 
was set in the action plan for chapter 23 for the end of 2021. There was also no progress on 
amending the laws on the High Judicial Council and the State Prosecutorial Council so that 
they  are  empowered  to  fully  assume  their  independent  role  to  proactively  defend  judicial 
independence  and  prosecutorial  autonomy.  These  amendments  require  the  constitutional 
amendments to be passed, as does the adoption of the implementing legislation in particular in 
the  area  of  judicial  appointments  and  promotion.  In  order  to  mitigate  the  impact  of  this 
legislative  stalemate  the  Councils  amended  their  rules  of  procedure  in  spring  2021  and 
enhanced  their  capacities,  however  it  remains  to  be  seen,  if  these  changes  will  result  in 
reducing political influence over the judiciary. There is also still no human resources strategy 
in place, although preparatory work is ongoing. 

In the coming year, Serbia should in particular:   

18 

 
 
  strengthen  the  independence  of  the  judiciary  and  the  autonomy  of  the  prosecution, 
including through amendments to constitutional  and legislative provisions related to the 
appointment, career management and disciplinary proceedings of judges and prosecutors; 

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

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

In  October  2020,  the  Constitutional  Court  issued  a  judgment  on  the  constitutionality  and 
legality  of  the  regulations  that  restricted  human  rights  during  the  state  of  emergency.  The 
court declared the provisions of the April 2020 governmental decree that allowed for a double 
punishment (misdemeanour and criminal) for violations of the restriction of movement, to be 
unconstitutional. In contrast to usual practice, no information was placed on the website of the 
Court; the judgment was only published in the Official Gazette.  

Strategic documents  

Serbia  adopted  major  strategic  reform  documents  in  July  2020  (the  revised  action  plan  for 
chapter 23 and the new national judicial development strategy 2020-2025), but without a prior 
comprehensive impact assessment and financial cost analysis. The World Bank completed its 
functional  review  of  the  prosecution  service.  The  World  Bank  handed  over  to  the  national 
authorities the draft update of the 2014 functional review of the court system. Its finalisation 
is  yet  to  be  completed.  Serbia  needs  to  ensure  that  recommendations  from  the  functional 
reviews  are  followed  up  on.  There  is  still  no  human  resources  strategy  in  place  for  the 
judiciary  (see  further  below  under  professionalism  and  competence).  The  upcoming  World 
Bank court functional review should be a source of information for this strategy, and it should 
comply with the law on planning with regard to both the content of the strategy as well as the 
procedure  for  its  adoption.  Overall,  Serbia  has  yet  to  establish  a  robust  performance 
assessment  framework  and  credible  record  of  accomplishment  of  implementation  and  the 
impact  of  reforms.  The  new  monitoring  and  reporting  mechanism  of  the  action  plan  for 
chapter  23  should  provide  information  based  on  a  qualitative  analysis  of  achievements 
towards  impact  indicators,  including  on  human  and  financial  resources,  as  well  as  early 
warning and corrective measures. 

Management bodies 

As  regards  the  organisation  of  the  courts  and  prosecution  offices,  responsibilities  remain 
divided  between  the  Ministry  of  Justice  and  the  councils,  notably  as  regards  budgetary 
planning, resource allocation and execution. This continues to adversely affecting courts’ and 
prosecution offices’ efficiency. Overall, the judicial institutions could  benefit from  a clearer 
system  of  governance.  The  judicial  development  strategy  and  the  revised  action  plan  for 
chapter 23 do not clearly determine the next steps in addressing this and do not decide upon 
the Serbian authority responsible for the residual judiciary budget, which includes salaries of 
court  and  prosecution  support  staff.  Budgetary  and  human  resources  planning  should  be 
merit-based, and be based on envisaged judiciary workload, which is defined in terms of both 
the number and the structure of cases, i.e. their complexity as determined by case-weighting 
procedure.  The  Ministry  of  Justice  started  introducing  case-weighting  formula  in  all  basic, 
higher and commercial courts. 

19 

 
 
The High Judicial Council (HJC) automated its main business processes through the creation 
of  an  overall  information  system,  which  enables  more  accurate,  reliable  and  efficient  data 
collection  and  processing.  A  financial  reporting  system  connecting  all  158  courts  and  90 
prosecutors’  offices  was  set  up.  Thereby,  financial  and  human  resources  management  was 
improved.  Some  steps  were  taken  to  improve  the  transparency  of  the  councils’  work,  by 
including the minutes of their sessions and certain decisions on their websites.  

New  members  joined  the  HJC  and  the  State  Prosecutorial  Council  (SPC),  both  ex  officio 
members (the Minister of Justice, the President of the Supreme Court, the Republican Public 
Prosecutor and the President of the Parliamentary Committee for  Constitutional Matters and 
Legislation)  and  the  new  members  elected  by  their  peers.  The  procedure  for  election  of  the 
new members (five for HJC and six for SPC) was carried out without irregularities, respecting 
the  national  legal  framework  and  good  practices.  Implementing  recommendations  from  the 
OSCE  Reports  would  increase  transparency  and  fairness  of  the  election  process.  The  new 
members  took  office  in  April  2021,  except  the  representatives  of  the  Bar  in  both  Councils, 
pending the approval by the Parliament. 

Independence and impartiality  

The current legal framework does not provide sufficient guarantees against potential political 
influence  over  the  judiciary.  Future  constitutional  and  legislative  changes  will  need  to 
increase  the  safeguards  for  judicial  independence.  A  fully  objective,  transparent  and  merit-
based system for appointing, transferring and promoting judges and prosecutors in line with 
European  standards  has  still  to  be  put  in  place.  Such  a  system  is  needed  also  to  promote 
professionalism and improve quality. 

The  constitutional  reform,  which  aims  at  strengthening  judicial  independence  and 
accountability,  was  relaunched  in  early  December  2020:  the  government  resubmitted  to 
Parliament  an  initiative  to  amend  the  constitution  (as  it  had  done  in  November  2018).  The 
Parliament’s Committee on Constitutional Matters and Legislation approved this initiative in 
May  2021 (as it had done also  in  June 2019).  Public sessions were organised for collecting 
information  and  views,  inviting  different  stakeholders  and  interested  parties.  A  plenary 
session of the Serbian Parliament approved the initiative on 7 June 2021. The Committee then 
established  an  expert  working  group  that  was  drafting  the  text  of  the  constitutional 
amendments during June and July 2021, using the 2018 text drafted by the Ministry of Justice 
in  2018,  which  took  on  board  the  Venice  Commission  (VC)  recommendations.  The  VC 
recommendations  also  included  a  reference  to  ‘creating  a  constructive  and  positive 
environment  around  the  public  consultations  to  be  held  when  the  National  Assembly  will 
examine  the  draft  amendments’.  The  Committee  has  adopted  the  draft  text  prepared  by  the 
expert working group on 6 September as basis for the next round of public debates that took 
place from 13 to 17 September. The Committee adopted the final text on 21 September. It was 
then  submitted  to  the  Venice  Commission  for  opinion.  On  15  October,  the  Venice 
Commission issued a favourable opinion of the draft text, including key recommendations to 
be addressed. Once finalised, the text will be submitted for the debate in Parliament. The final 
text needs to be approved by a two-thirds majority in the plenary followed by a referendum as 
the final step for approval of the amendments. 

The delay in the adoption of the constitutional amendments has repercussions on the drafting 
and  adoption  of  the  implementing  legislation,  including  for  appointment,  promotion  and 
regarding the law on the Councils, as clarity on the constitutional basis is still lacking.  

Pressure  on  the  judiciary  and  the  prosecution  still  remains  high.  Government  officials, 
including  of  highest  levels,  and  Members  of  Parliament  continue  to  comment  publicly  on 
ongoing  court  proceedings  and  to  attack  individual  judges  and  prosecutors.  Statements 

20 

 
 
regarding ongoing cases and seemingly coordinated insulting campaigns and attacks against 
judges and prosecutors continued in mainstream media and tabloids but worryingly also from 
government and in the Parliament, including during debates on judicial elections. Members of 
Parliament  negatively  influenced  the  public  opinion  and  trust  in  judiciary  and  individual 
judges. They also violated the new code of conduct establishing the Members’ of Parliament 
ethical  behaviour,  adopted  in  December  2020.  The  code  of  conduct  for  members  of  the 
government also recommends avoiding such behaviour. However, there is a need to prohibit 
and efficiently enforce sanctions to eliminate such behaviour. Overall, effective sanctions for 
undue influence on judges and prosecutors and attacks on individuals or public comments that 
undermine their independence and reputation are both inadequate and not being implemented. 
A monitoring mechanism with aimed at changing this practice, has yet to be established.  

The HJC and the SPC have a legal mandate to act as protectors and guarantors of the judicial 
independence  and  prosecutorial  autonomy  and  they  continue  to  monitor  complaints  from 
judges  and  prosecutors  reporting  undue  influence  on  their  work.  Upon  increased  external 
pressure  upon  the  judiciary,  the  HJC  issued  a  statement.  The  SPC  did  not  meet  in  person 
between February 2020 and April 2021, when the first session took place after the election of 
new  members.  The  mandate  of  the  SPC’s  Commissioner  for  Autonomy  expired  in  early 
March  2020.  The  nomination  of  his  successor  was  delayed  for  over  a  year,  suspending  this 
additional protection mechanism for prosecutors. In April 2021, the new members of the SPC 
nominated a new Commissioner for Autonomy. 

The HJC and the SPC amended their rules of procedure in April 2021 respectively, aimed at 
setting up a more effective reaction and protection mechanism for judges and prosecutors in 
cases of undue influence as well to prescribing the rights and obligations of the Commissioner 
for Independence. The HJC appointed and defined competences of one judge member to act 
in  individual  cases  of  undue  influence,  some  complaints  are  already  under  the  revision. 
Regular  quarterly  meetings  between  representatives  of  the  HJC’s  and  the  SPC’s  ethical 
boards, parliament and the government were set up. The first, constitutive meeting took place 
on  15  April  2021.  These  meetings  were  set  up  with  a  view  to  raising  awareness  of  public 
officials  and  politicians  for  full  respect  of  judicial  decisions  and  work  of  courts  and 
prosecution offices. However, it remains  to  be seen, if these changes  will  result in  reducing 
undue influence on judges and prosecutors in practice.  

The current  legal  framework authorises the head of every prosecution office to  intervene in 
individual  cases.  This  creates  a  certain  vulnerability  for  political  influence,  notably  when 
effective safeguards are not applied in practice.  

Accountability 

The disciplinary rules for judges and prosecutors and the ethical codes need to be revised with 
a view to, among other things, better defining the offences, strengthening the capacity of the 
disciplinary  bodies  and  clarifying  which  provisions  in  the  codes  should  entail  disciplinary 
liability for non-compliance.  

Concerning the judges ethical codes’ revision, as a first step, a comprehensive assessment of 
the current  regulatory framework was completed in December 2020.  In May 2021, the HJC 
adopted the rules of procedure of the ethics committee and the president of the HJC appointed 
members of the ethics committee. Training in disciplinary liability continued with 22 sessions 
for 528 judges. In order to improve the transparency of the disciplinary bodies’ work, the HJC 
posted 43 anonymised disciplinary decisions on its website, in line with its rulebook on data 
anonymisation. 

In April 2021, the SPC has revised the new code of ethics for public prosecutors and deputy 
public  prosecutors,  together  with  guidelines  for  the  application  of  ethical  principles. 

21 

 
 
Confidential counselling on ethical issues for public prosecutors was established by amending 
the  rules  of  procedure  of  the  ethics  committee  of  public  prosecutors  and  deputy  public 
prosecutors. 

In 2020, the HJC disciplinary prosecutor received 429 complaints against judges, mostly from 
citizens. In 10 cases, it initiated a disciplinary procedure. The HJC’s disciplinary commission 
dealt with 22 cases. A dismissal procedure was initiated in one case, public warnings decided 
also  in  one  case,  as  well  as  ban  of  promotion  and  salary  reductions  were  issued  in  several 
other cases. The SPC disciplinary prosecutor processed 111 cases, compared to 162 cases in 
2019. Complaints were filed against 30 public prosecutors and 95 deputy public prosecutors 
(2019:  61  against  public  prosecutors  and  111  against  deputy  public  prosecutors).  The 
disciplinary prosecutor rejected complaints against 87 prosecutors/deputies and processed 22 
cases. There were no proceedings before the SPC disciplinary commission. 

Professionalism and competence 

In 2020, 41 judges were elected to permanent positions (2019: 176) and 63 were promoted to 
higher-level courts (2019: 117). There was only one candidate for the position of the President 
of  the  Supreme  Court  of  Cassation.  She  was  nominated  by  the  HJC  and  then  elected  in 
Parliament without a debate in April 2021.  

The current State Public Prosecutor was also the only candidate for this selection process. She 
was re-elected in  Parliament for a third consecutive six-year term  (in contrast  to  the law on 
the  HJC  that  foresees  only  one  term  for  the  position  of  Chief  Justice  there  is  no  such 
limitation for the position of Public Prosecutor).  

At the end of 2020, there were 2 649 (2019:  2 703) full-time judges, i.e. 38.39 (2019: 38.81) 
per 100 000 inhabitants.  At the end of 2020, there were 765 holders of public prosecutorial 
function,  so  the  number  of  prosecutors  per  100 000  inhabitants  was  11.33.  The  European 
average is 21 judges and 12 prosecutors per 100 000 inhabitants.   

In  the  context  of  the  current  constitutional  reform  to  improve  independence,  autonomy  and 
accountability  of  the  judiciary,  there  is  a  need  to  revise  the  current  system  of  recruitment, 
transfer  and  promotion  of  judges  and  prosecutors.  Judicial  careers  should  be  fully  based  on 
merit,  with  a  clear  link  between  performance  evaluation  and  career  advancement.  The 
professional evaluation of judges should be based both on quantitative and qualitative criteria.  

At  present,  Serbia  still  has  two  categories  of  eligible  candidates  for  the  judicial  profession: 
graduates of the Judicial Academy, and judicial and prosecutorial assistants. No progress was 
made  in  addressing  the  Venice  Commission’s  advice  on  how  to  effectively  ‘protect  the 
independence  and 
Academy 
professionalism therefore remains a prerequisite for becoming a sole nationwide entry point to 
the profession at basic courts’ level.  

influence’.  Strengthening 

from  possible  undue 

its 

There is still no human resources strategy in place for the judiciary. The upcoming finalisation 
of the World Bank court functional review should be a source of information for this strategy, 
and  the  strategy  should  comply  with  the  law  on  planning.  It  should  enable  that 
recommendations  from  the  functional  reviews  are  followed  up,  thus  providing  concrete 
strategic  direction  to  a  number  of  relevant  issues,  including  entry  into  judiciary,  effective 
performance appraisal, budgetary planning and execution, further development of a functional 
ICT framework, and improvement of qualifications and skills through initial and continuous 
training. The human resources strategy should also include a methodology for determining the 
required  number  of  judges  and  prosecutors.  Moreover,  judges’  and  prosecutors’  assistants 
need  a  predictable  system  establishing  a  merit-based  career  development.  The  strategy  also 

22 

 
 
needs  to  be  supported  by  a  thorough  financial  impact  analysis  connected  to  a  mid-term 
financial plan.  

Quality of justice 

There is still an urgent need to improve the internal expertise, capacity and organisation of the 
Judicial  Academy,  as  well  as  the  cooperation  with  the  councils.  The  Academy  adopted  a 
multi-annual  work  programme  for  2020-2025.  Participation  in  continuous  training  should 
become a mandatory part of professional performance evaluation for judges. A mechanism for 
evaluating necessity and impact of training programmes should be established. This should be 
done in  correlation  with the evaluation of quality  of the work of judges  and prosecutors.  In 
2020, the Academy provided its training activities in an online format. The substance of the 
training offer should be further developed supporting the process of building the rule of law 
culture and the development of professional skills.  

Further  steps  were  taken  to  increase  the  harmonisation  of  jurisprudence  by  publishing 
anonymised judgments  of the Supreme Court of  Cassation  (SCC), four appellate courts, the 
Administrative Court and the Commercial Appellate court. Efforts to link the various existing 
databases continued but have not yet materialised, including the one on the judgments of the 
European Court of Human Rights, and to broaden their scope.  In 2020, the number of SCC 
anonymised  decisions  uploaded  in  the  database  increased  by  3  861;  in  the  same  period,  an 
additional 152 anonymised appellate court decisions were uploaded, as well as 23 402 integral 
decisions.  Furthermore,  for  the  first  time  decisions  by  the  Administrative  Court  were 
uploaded.  In  total,  there  are  now  139  222  integral  and  9  483  anonymised  Administrative 
Court decisions in the centralised SCC database. The number of the Misdemeanour Appellate 
Court decisions in the database increased from 4 335 to 5 858. In 2020, for the first time, the 
Commercial Appellate Court’s decisions were also integrated in the database (5 580 integral 
decisions and 1 111 anonymized decisions relevant).  By the end of 2020, the total number of 
decisions  uploaded  in  the  unique  SCC  case  law  database  is  205  139  integral  decisions  (all 
court types), out of which 24 888 decisions were anonymized (all court types). 

Structural  shortcomings,  including  a  lack  of  coherence  between  number  of  cases  and  staff 
should be analysed in  the context  of a comprehensive assessment of the  system’s  court and 
prosecution  network.  The  role  of  the  Supreme  Court  of  Cassation  in  effectively  orienting 
jurisprudence is subject to the current consultations on constitutional amendments. 

The  court  and  prosecution  network  consists  of  159  courts  and  90  prosecution  offices  of 
general  and  special  jurisdictions,  operating  in  four  instances  (basic,  higher,  appellate  and 
supreme), adding to complexity in the aspects of financing, procurement and court payments 
for the services. There are 2 570 judges in 2020, compared to 2 531 in 2019 and 10 795 court 
staff (2019: 10 685), including 7 857 (73%) civil servants and 2 938 (27%) state employees. 
The number of the state employees, i.e. staff whose work is not linked to processing of cases, 
slightly decreased compared to 2019 (2019: 2 996, 28%), but it is still high compared to the 
total number of staff, according to European average (CEPEJ Report).   

A  comprehensive  court  case  (and  document)  management  system  that  interlinks  cases 
across Serbian courts and prosecution offices is still not in place. The technical work for the 
national  rollout  of  case  management  systems  for  the  prosecution  and  for  the  prison 
administration  started  in  October  2019  and  is  nearing  completion.  Following  successful 
termination  of  the  tender  procedure,  the  work  on  centralised  case  management  system  in 
courts  officially  started  in  September  2021.  Once  in  place,  the  system  enables  a  case 
allocation  system,  which  takes  into  account  the  case  weighting  criteria  for  more  balanced 
distribution  of  workload,  as  well  as  better  quality  and  timely  statistical  reporting.  A 
memorandum  of  understanding  between  the  Ministry  of  Justice  and  the  Government’s 

23 

 
 
Information and Communication Technology (ICT) Office providing technical preconditions 
was signed in June 2020. Further work is  required to ensure that all systems can fulfil their 
function,  in  particular  with  regard  to  legislative  changes,  sufficient  staffing  and  budget. 
Overall,  the  ICT  strategy,  envisaged  for  2022  in  the  chapter  23  action  plan,  is  crucial.  It 
should  include  clear  timelines  and  related  financial  commitments  including  on  necessary 
human  and  technical  resources.  The  system  of  central  statistical  reporting  was  extended  to 
commercial courts. Since November 2020, their fees can also be electronically generated. 

There are 197 appointed notaries throughout Serbia, with 1 226 notary assistants, associates, 
trainees and administrative staff. The notary chamber continued its efforts for better services, 
including through using an electronic documentation system, training and standardisation of 
practice.  

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

There are 1 430 certified mediators. Based on their reports, 498 mediations were conducted in 
2020.This  represents  a  slight  drop  compared  to  569  in  2019,  and  638  in  2018.  Out  of  498 
mediated cases in 2020, 353 were concluded with a settlement agreement. In 218 proceedings, 
cases  were  referred  to  mediation  by  the  court.  As  for  training,  23  organisations  received 
licences to conduct training for mediators. 17 used these licences, and organised training for 
over 3 700 participants. The number of mediations compared to the number of pending civil 
court proceedings remains below 1%. The annual  report of the Supreme Court of Cassation 
indicate  increasing  inflow  of  litigation  cases  and  identified  space  for  an  increased  use  of 
alternative dispute resolution mechanisms as an effective way of resolving disputes. 

Efficiency 

The implementation of the national backlog reduction programme (for 2016–2020) continued 
under  the  supervision  of  the  Supreme  Court  of  Cassation.  It  continues  to  have  a  positive 
impact  on  the  courts’  efficiency,  with  the  backlog  of  old  enforcement  cases  continuously 
shrinking. In 2020, some 353 600 such cases were resolved (out of which some 261 600 were 
enforcement cases), which is a higher number than in 2019 (around 214 200 cases resolved, 
out  of  which  around  107  300  were  enforcement  cases).  There  are  also  cases  more  than  10 
years old and their number remains high with over 1 400 cases in second instance courts and 
around 187 100 cases in basic courts, mostly on civil matters. The number of cases alleging 
violations of the right to a trial within reasonable time was lower in 2020 (90 977) than it was 
in 2019 (100 600). There is still an overall high number of pending backlog cases, although it 
has decreased compared to previous years (382 646 cases more than 3 years old at the end of 
2020 compared to 621 324 at the end of 2019). The highest number of pending backlog cases 
remains at the level of basic courts (approx. 85.95% of the total). While the overall clearance 
rate dropped from 139.87% to 106.04% between 2016 and 2017, it increased again in 2018 to 
110.03%  before  dropping  again  in  2019  to  102.01%.  In  2020,  that  percentage  increased  to 
107.81%.  Thus,  for  the  fifth  year  in  a  row,  the  Serbian  judicial  system  was  able  to  process 
more cases  than  it received.  In  2020, the average duration  for  cases to be resolved was 274 
days,  compared  to  267  days  in  2019.  At  the  same  time,  the  courts  in  2020  received  a 
somewhat  lower  number  of  cases  (around  1  867  900)  than  they  did  in  2019  (around  2  224 
100). 

The  jurisdiction  of  the  Constitutional  Court  covers  assessing  compliance  of  laws  and  other 
general  acts  with  the  Constitution,  resolving  conflicts  of  jurisdictions  and  deciding  upon 

24 

 
 
constitutional complaints over a number of potential violations of human and minority rights 
and freedoms by individual acts. Additional protection foreseen by the Law on the Protection 
of the Right to a Trial within a Reasonable Time did not reduce the number of constitutional 
complaints. There is still a need for more transparency in the work of the court, including as 
regards accessibility of its sessions and interactions with the public. 

Significant  differences  in  workload  remain  between  the  courts  across  the  country,  with 
Belgrade courts bearing the highest overall workload. Lengthy proceedings and the slow pace 
of processing indemnity  claims continue to hamper the efficiency and quality of justice and 
people’s access to justice. The law on free legal aid has been implemented since October 2019 
(See procedural rights). 

Amendments to the law on enforcement and security, in force since January 2020, envisage 
the  transfer  of  additional  types  of  enforcement  cases  from  courts  to  public  enforcement 
agents. The law also introduced a new appeal system to better protect individual debtors and 
strengthen court control over public enforcement agents. This has not yet been matched with 
additional human resources in courts. The fees for enforcement procedures were lowered, and 
an e-auction platform was introduced.  

Domestic handling of war crimes  

Serbia  needs  to  fully  cooperate  with  the  International  Residual  Mechanism  for  Criminal 
Tribunals (IRMCT), including by fully accepting and implementing its rulings and decisions. 
Serbia  continues  to  publicly  challenge  the  judgments  of  the  International  Criminal  Tribunal 
for the former Yugoslavia  (ICTY), including at  the highest  levels.  Cooperation between the 
IRMCT  prosecution  office  and  the  Serbian  Office  of  the  War  Crimes  Prosecutor  (OWCP) 
needs to be improved. In April 2021 the trial judge found that Serbia was in a state of non-
cooperation with the tribunal, in relation to the arrest of two people indicted for contempt of 
court.  This  finding  has  been  formally  reported  by  the  President  of  the  IRMCT  to  the  UN 
Security Council as an act of non-cooperation. 

Regarding  judicial  cooperation  issues,  bilateral  agreements  exist  between  the  Prosecutors 
Office of Serbia and its counterparts in Bosnia and Herzegovina, Croatia and Montenegro. In 
the  second  half  of  2020,  cooperation  with  Bosnia  and  Herzegovina  led  to  five  indictments 
being issued in Serbia. Cooperation with Croatia has not led to tangible results. Serbia has yet 
to  enforce the  final  judgment of Bosnia and  Herzegovina in  the case of  Novak Djukić. The 
latter  fled  to  Serbia  following  his  conviction.  On  14  October  2021,  Serbia  handed  over  to 
Bosnia  and  Herzegovina  twenty  four  active  criminal  cases  against  twenty  eight  citizens  of 
Bosnia and Herzegovina. 

The  implementation  of  the  2016  national  strategy  for  the  investigation  and  prosecution  of 
war crimes continued at  a very slow pace. The number of self-initiated indictments remains 
low.  Case  proceedings  continue  for  a  disproportionate  amount  of  time,  with  some  cases 
requiring over 13 years to process after the indictment was issued. The implementation of the 
strategy was monitored by a multi-institutional mechanism, which has issued ten reports. The 
Government  adopted  the  new  National  Strategy  for  the  Prosecution  of  War  Crimes  on  14 
October 2021. The new Strategy is an opportunity to realise commitments to the fight against 
impunity and reconciliation, notably to increase investigations and indictments in high-level 
cases and strengthen regional co-operation. Moreover, the strategy should ensure that specific 
decisions  in  other  fields,  notably  on  granting  citizenship,  do  not  act  to  de  facto  foster 
impunity. Serbian authorities continue to provide support and public space to convicted war 
criminals.  The  capacities  of  the  OWCP  were  strengthened  in  early  2021.  Serbia  has  a  case 
backlog of 1 731 pre-investigative cases.   

25 

 
 
The  OWCP  filed  seven  indictments  against  seven  individuals  in  2020,  of  which  five 
indictments were transferred from Bosnia and Herzegovina. These latter indictments included 
two  defendants  who  held  a  high-ranking  position  at  the  time  of  the  offence  (brigade 
commander)  and  cover  crimes  concerning  hundreds  of  victims,  illustrating  a  concrete  step 
towards  changing  the  previous  practice  of  overall  prosecution  of  cases  involving  low-level 
perpetrators and a low number of victims. 

The  Higher  Court  rendered  seven  judgments,  convicting  seven  defendants  and  sentencing 
them to prison terms ranging from two to 15 years, while the Court of Appeals rendered four 
final decisions convicting nine defendants and sentencing them to prison terms from two to 15 
years. Two defendants were acquitted.  

As  of  31  December  2020,  the  trial  proceedings  were  ongoing  in  18  war  crimes  before  the 
Higher  Court  (15  cases)  and  the  Court  of  Appeals  in  Belgrade  (three  cases)  against  40 
defendants3. Three final judgments against 10 defendants were rendered in 2020 by the Court 
of  Appeals  of  whom  eight  defendants  were  found  guilty,  sentencing  them  to  prison  terms 
ranging from three to 15 years. Two defendants were acquitted. 

Overall, Serbia needs to show a genuine commitment for investigating and adjudicating war 
crimes cases. This is also a requirement for effectively dealing with the legacy of the past and 
for fostering reconciliation. Serbia should prioritise complex cases and those involving senior 
ranking  officials  and  provide  a  clear  legal  approach  to  resolve  the  issue  of  command 
responsibility. 

Fight against corruption  

Serbia has some level of preparation in the fight against corruption. Limited  progress has 
been made during the reporting period. The recommendation on prevention of corruption had 
been implemented insofar as the role of the Agency for the prevention of corruption had been 
strengthened  by  the  new  law  on  corruption  prevention  as  also  concluded  by  Council  of 
Europe’s  Group  of  States  against  Corruption  (GRECO)  in  November  2020.  However, 
GRECO  also  concluded  that  the  2020  law  on  corruption  prevention  presents  shortcomings, 
which  could  endanger  its  application.  New  amendments  to  the  Law  were  adopted  in 
September 2021. With regard to the other recommendations of the previous year, Serbia has 
still to prepare a new anti-corruption strategy, accompanied by an action plan and to establish 
an effective coordination mechanism to operationalise prevention and repression policy goals 
and  effectively  address  corruption.  The  number  of  indictments  and  the  number  of  first 
instance  convictions  for  high-level  corruption  cases  further  decreased  compared  to  previous 
years.  Serbia  should  increase  its  efforts  in  addressing  these  shortcomings  and  step  up  the 
prevention and repression of corruption. 

Last  year’s  recommendations  therefore  remain  valid.  In  the  coming  year,  Serbia  should  in 
particular:  

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

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

  continue to  make progress  in  implementing the  GRECO recommendations in  relation  to 

corruption prevention;  

  adopt and start implementing the new anti-corruption strategy underpinned by a credible 

and realistic action plan as well as an effective coordination mechanism. 

3 As of 31 March 2021, there were 20 war crimes cases with 41 defendants at first-instance before the Higher 
Court in Belgrade, and seven cases with 15 defendants at second-instance before the Court of Appeals). 

26 

 
 
                                                           
Track record 

Serbia  continued  to  implement  the  law  on  the  organisation  and  jurisdiction  of  government 
authorities  in  suppression  of  organised  crime,  terrorism  and  corruption.  In  relation  to  high-
level corruption, based on indictments from the Prosecutor’s Office for Organised Crime, the 
courts rendered first instance judgements against 22 individuals in 2020 (compared to 30 in 
2019, 21 in 2018). There were final convictions against 11 persons. The Prosecutor’s Office 
for Organised Crime ordered the conduction of investigations against 21 persons, and issued 
19  indictments  (compared  to  20  in  2019,  41  in  2018  and  50  in  2017).  There  were  no  cases 
with  final  confiscation  of  assets  (compared  to  three  in  2019).  Serbia  still  needs  to  show  a 
convincing track record of confiscating assets in corruption cases. 

In 2020, the special departments for combatting corruption in the higher prosecution offices 
received  2 936  criminal  complaints  (compared  to  3 577  in  2019).  They  ordered  189 
investigations, and against 23 persons parallel financial investigations were initiated. A total 
of  470  indictments  were  issued  (compared  to  583  in  2019).  The  courts  rendered  judgments 
against 230 persons at first instance based on indictments from these departments (compared 
to 399 in 2019). There were final convictions against 195 persons.  

Other prosecutions (not specialised departments) issued 22 orders to investigate in relation to 
corruption and economic crime offences, and filed 136 indictments. The courts convicted 186 
individuals at first instance, and 114 individual at final instance. A final confiscation of assets 
took place in three cases. 

Regarding  violations  of  the  conflict  of  interest  provisions  of  the  law  on  prevention  of 
corruption,  two  requests  for  initiating  misdemeanour  proceedings  were  submitted  by  the 
Agency  for  the  Prevention  of  Corruption  (Agency)  (2019:10).  The  Agency  initiated  439 
procedures  to  determine  violations  of  the  law  (2019:  310).  In  2020,  misdemeanour  courts 
issued first-instance decisions on the responsibility of 11 public officials (2019:27).  

The  Agency  submitted  29  requests  for  initiation  of  misdemeanour  proceedings  related  to  a 
failure  to  promptly  submit  asset  declarations  in  2020  (2019:  76;  2018:  45).  Based  on  the 
Agency’s work in previous years, misdemeanour courts issued 80 final criminal decisions in 
2020 (65 in 2019). The Agency filed 13 criminal charges in 2020 (2019: 25, 2018: 16) due to 
reasonable  suspicion  that  a  public  official  had  not  reported  assets  or  had  given  false 
information about assets intending to conceal the facts. Based on the Agency’s previous work, 
8 judgements were issued (2019: 19). 

In  2020,  the  Agency  controlled  the  reports  on  the  election  campaign  expenses  for  the 
parliamentary, provincial and local elections. It published reports on the control of financing 
of  political  activities  and  on  the  control  of  election  campaign  costs  in  March  2021.  The 
effectiveness  and  impact  of  the  legislative  changes  and  capacity  of  the  Agency  to  perform 
controls  in  relation  to  use  of  public  resources  during  the  electoral  campaigns  are  yet  to  be 
assessed. In the context of the 2020 election campaign, the Agency issued 34 decisions based 
on  reports  filed  against  political  parties  and  one  decision  ex  officio.  The  decisions  were 
published on the Agency's website. In 9 cases, it determined a violation of the law.   

Due to violations of the provisions of the law on financing of political activities, the Agency 
submitted  255  requests  for  initiating  misdemeanour  proceedings  (2019:  96).  Of  these,  144 
were  for  the  failure  to  submit  reports  on  campaign  expenses  in  2020.  Based  on  final 
judgments, 9 decisions were made on the loss of the right to obtain funds from public sources 
intended for financing regular work in the coming year (2019:59; 2018: 33). 

A comprehensive and evidence-based assessment of access to information is not possible, as 
the  majority  of  public  authorities  do  not  comply  with  the  obligation  to  provide  data  to  the 

27 

 
 
Commissioner  for  Access  to  Information  regarding  citizens’  requests  for  information.  The 
Commissioner established that 84% (2019: 83%; 2018: 87%) of citizens’ complaints  – most 
of them concerning administrative silence – were well-founded, meaning that the information 
requested  by  citizens  should  have  been  provided  by  the  authorities  according  to  the  law  on 
access  to  information  of public importance.  In 38% (2019:  41%;  2018:  55%) of these well-
founded  cases,  the  authorities  reported  that  they  acted  upon  the  Commissioner’s  request  to 
provide the information to the complainants even before a decision was made on the appeal. 
Administrative  enforcement  of  the  decisions  taken  by  the  Commissioner  has  yet  to  be 
ensured. As in the previous year, the administrative inspection did not submit any request to 
the misdemeanour courts to initiate proceeding for the non-execution of the Commissioner’s 
decisions. 

In 2020, courts in  Serbia received 117 (2019:  152) new cases based on the law on  whistle-
blower protection. Out of 177 pending cases, 128 cases were finalised (2019: 160). Whistle-
blower reports, such as in the case of Krusik, mentioned in the previous report have still not 
been investigated in accordance with the law. Serbia needs to step up its protection of whistle-
blowers and investigate allegations in high corruption cases, in order to strengthen trust in the 
institutions.  

A  number  of  by-laws  were  adopted  during  2020  with  the  aim  of  implementing  the  law  on 
public  procurement  (see  chapter  5  –  Public  procurement).  The  Public  Procurement  Office 
finalised activities with  the aim to  ensure  more transparency and improve the quality of the 
Public Procurement Portal e-platform and data. Disclosing all information on COVID-related 
procurements would contribute to enhanced transparency and trust. 

Institutional framework 

Prevention measures 

In November 2020, Serbia authorised the publication of the second compliance report on the 
implementation of recommendations on the prevention of corruption in respect of Members of 
Parliament,  judges  and  prosecutors  by  the  Council  of  Europe’s  Group  of  States  against 
Corruption (GRECO). In its report, GRECO noted that out of 13 recommendations, two were 
implemented  fully,  ten  partly  and  one  recommendation  was  not  yet  implemented.  GRECO 
considers the situation as ‘globally unsatisfactory’ and decided to launch its “non-compliance 
procedure” including a request to Serbia to report on the progress made.  

Serbia took some steps to partly meet one GRECO recommendation by adopting in December 
2020  under  urgent  procedure  a  code  of  conduct  for  Members  of  Parliament  aimed  at  the 
avoidance  and  resolution  of  conflicts  of  interest.  Aside  from  adoption  of  the  code,  GRECO 
also recommended that it should be effectively implemented in practice, and accompanied by 
proper guidance, training and counselling.  In September 2021, Parliament adopted a revised 
version of the code of conduct with the aim to follow-up on the GRECO recommendations.  

The law on the prevention of corruption entered into force in September 2020. All necessary 
bylaws were adopted. In February 2021, the Parliament adopted an authentic interpretation of 
the term ‘public official’ used in the law to define its scope. This authentic interpretation now 
specifies that the law applies only to persons directly elected by the Serbian citizens as well as 
persons elected, appointed or nominated by Parliament, the President, the SCC, the HJC, the 
SPC,  the  government,  assemblies  or  governments  of  autonomous  provinces  and  authorities 
from the local self-governments. The authentic interpretation also results in some categories 
of  persons,  among  others,  to  be  excluded:  directors  and  members  of  executive  bodies  of 
educational institutions, directors and members of steering and managing boards of healthcare 
institutions, and directors and members of the steering boards in companies in which Serbia, 
autonomous provinces or local self-governments have stakes or shares.  

28 

 
 
GRECO had assessed this law in light of its recommendations in the aforementioned second 
regular compliance report. It took the view that it is an improvement in some areas, while it 
still  “presents  shortcomings  which  could  endanger  its  application”.  These  include,  among 
others,  lack  of  criteria  for  allowing  or  restricting  public  officials  from  performing  business 
activities; discretionary rights for public officials for reporting on parts of their assets; several 
categories of public officials’ assets not being made public and low level of fines for breaches 
of  the  law.  GRECO  thus  concluded  that  this  recommendation  related  to  the  law  on  the 
prevention  of  corruption  was  only  partially  implemented.  Serbia  amended  the  Law  in 
September  2021,  with  the  aim  to  align  further  with  the  GRECO  recommendations.  Serbia 
needs to continue implementing the recommendations in line with the spirit of the report, and 
report  to  GRECO  by  31  October  2021.The  resources  and  capacity  of  the  Agency  for 
Prevention  of  Corruption  were  strengthened,  and  the  Agency  upgraded  its  electronic 
information system. In December 2020, it had 96 staff members out of the planned 163. The 
five  members  of  the  Agency’s  board  were  appointed  in  March  2021.  In  December  2020, 
Parliament discussed and formally accepted the report of the Agency for 2019, and in March 
2021, the Agency submitted the report for 2020, along with the report on the implementation 
of  the  Action  Plan  for  Chapter  23  sub-chapter  on  fight  against  corruption  to  Parliament  for 
adoption.  Workshops  or  discussions  within  the  relevant  parliamentary  committees  on  these 
reports did not take place.  

There  is  a  need  for  strong  political  will  to  effectively  implement  the  full  mandate  of  the 
Agency and ensure increased trust of citizens in the institutions preventing corruption.  

In  sectors  particularly  vulnerable  to  corruption  (such  as  public  procurement,  infrastructure 
projects,  healthcare,  education,  construction  and  spatial  planning,  and  public  companies), 
tangible improvements are still to be made in relation to the transparency and corruption risk 
mitigation  in  these  fields.  The  organisation  and  working  improvement  business  plan  of  the 
Customs Service for 2020-2024 was adopted in February 2020. One of the strategic goals is 
dedicated to fight against corruption, anti-corruption policies and preventive measures.  

A  policy  framework  for  the  fight  against  corruption  in  the  taxation  area  still  needs  to  be 
adopted. The risks of corruption in the implementation of public-private partnerships and in 
relation  to  the  use  of  exceptions  in  large  infrastructure  projects  have  not  yet  been 
systematically  addressed.  There  have  been  no  changes  to  the  law  on  special  procedures  for 
linear infrastructure projects which allows for the exemption from public procurement rules of 
projects of ‘strategic importance’.  

Out  of  the  106  (2019:  102)  local  self-governments  that  adopted  anti-corruption  plans,  22 
(2019:28)  established  a  body  to  monitor  their  implementation,  mostly  in  line  with  the 
Agency’s model. Overall, there were no tangible improvements in relation to anti-corruption 
efforts at the local level, and the impact of the local anti-corruption plans is yet to be seen. 

The  Anti-Corruption  Council,  in  its  advisory  role  to  the  government,  remained  active  in 
exposing  and  analysing  cases  of  systemic  corruption.  It  is  of  serious  concern  that  the 
authorities  still  have  not  established  a  more  constructive  relationship  with  the  Council.  The 
required  amendment  to  the  government’s  rules  of  procedure  for  systematic  consideration  of 
the  Anti-Corruption  Council’s  recommendations  is  delayed  since  2016.  The  Council  is  also 
still  not  systematically  consulted  on  draft  legislation.  The  government  failed  to  set  up  a 
procedure to consult the Council, although this was planned since 2016. The Council issued 
informative reports, including on infrastructure projects  in  the railway sector and on special 
rehabilitation of hospitals. There were no meetings of the relevant prosecution offices with the 
Anti-Corruption  Council,  in  order  to  improve  the  implementation  of  the  recommendations 
listed  in  their  reports.  The  Council  is  still  not  working  in  full  capacity:  only  6  out  of  13 
members are nominated.  

29 

 
 
Law enforcement 

The  number  of  staff  of  the  special  departments  for  combating  corruption  in  the  Higher 
Prosecutors’  Offices  in  Kraljevo,  Niš,  Novi  Sad  and  Belgrade  roughly  remained  the  same: 
there  are  44  deputy  public  prosecutors  (45  in  2019).  The  Higher  public  prosecutor's  offices 
envisage  positions  for  one  financial  forensic  expert  in  each  of  the  four  special  departments. 
Two are still missing, namely in Nis and Kraljevo. Furthermore, only one of the two financial 
forensic  experts  foreseen  in  the  Prosecutor's  Office  for  Organised  Crime  is  currently  being 
employed.   

The  Prosecutor’s  Office  for  Organised  Crime,  which  has  jurisdiction  over  high-level 
corruption cases, remains understaffed (see chapter 24 – Justice, Freedom and Security). The 
Rulebook on internal organisation and systematisation of work positions entered into force in 
May  2021,  establishing  new  organisational  units,  and  increasing  the  number  of  employees. 
The filling of the vacancies requires the existence of adequate accommodation capacities for 
all staff. The Higher Court in Belgrade dealing with corruption is also understaffed. There is a 
delay  in  developing  “systematisation  rulebooks”  (decisions  on  staffing)  for  the  Special 
Departments for the Suppression of Corruption, although a baseline analysis was carried out. 
In  view  of  this  delay,  the  technical  equipment  needs  for  these  offices  could  also  not  be 
determined. Training sessions for the prosecution were conducted. 

During 2020, three task forces composed of representatives of the relevant state authorities to 
investigate  corruption  offences,  one  in  the  Special  Department  in  Kraljevo  and  two  in  the 
Special Department in Nis were operating (six in 2019).  

Transparency about the work of the prosecution and courts in the area of fighting corruption 
should be increased. Monitoring by the Republic Public Prosecutor’s Office on the reasons for 
the  dismissal  of  criminal  charges  or  lengthy  investigation  of  corruption  offences  should  be 
stepped up. 

The State Audit Institution continued to audit statements from public funds beneficiaries. By 
verifying  the  establishment  and  provision  of  conditions  for  adequate  functioning  of  internal 
audit,  it  found  that  out  of  the  total  number  of  auditees  (99),  which  have  the  obligation  to 
establish  internal  audit,  45  auditees  (45.45%)  did  not  establish  internal  audit  procedures, 
signalling a positive trend (compared to 57% in 2019 and 76.5% in 2018).  

Legal framework 

Serbia is a party to all international anti-corruption conventions. The legal framework for the 
fight against corruption is broadly in place. It is of concern that the law on the financing of 
political activities has not been amended since 2016 in order to ensure compliance with all 
OSCE/ODIHR  recommendations  and  to  reinforce  the  independence  and  administrative 
capacity of relevant supervisory authorities.  

Amendments to the law on access to information of public importance were adopted at the 
level of Government on 7 October 2021.  

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

With  respect  to  transparency  and  integrity  within  the  public  administration,  there  has 
been no sizeable reduction in the excessive number – 62% of filled positions (June 2021) - of 
acting  senior  manager  posts,  and  non-civil  servants  continued  to  be  appointed  on  an  acting 
basis after the legal deadline of  July 2019, in breach of the law on civil servants. The similar 
issue of acting directors in state-owned enterprises – 22 out of 34 – has yet to be addressed. 
The law on the origin of assets adopted in 2020, which provides for further legal options and 

30 

 
 
human resources for the tax administration to check assets of natural persons, against declared 
income,  and  tax  any  assets  that  are  in  discrepancy  based  on  a  specific  tariff.  The  law  was 
amended in 2021 to clarify that it did not concern illegally acquired property, but property for 
which  there  is  no  explanation  of  origin.  Its  implementation  needs  to  be  non-discriminatory 
and not susceptible to corruption. 

Strategic framework 

Serbia  has  still  no  anti-corruption  strategy.  The  previous  national  strategy  for  the  fight 
against corruption for period 2013-2018 and its accompanying action plan expired. There is a 
clear need for an anti-corruption strategy accompanied by a credible action plan in addition to 
the relevant  section in  the chapter 23 action plan.  An operational  plan for the prevention of 
corruption  in  high-risk  fields  was  adopted  at  the  government  session  held  on  30  September 
2021.  However,  a  comprehensive  strategy  and  action  plan  on  prevention  and  repression  of 
corruption are still needed.   

The  Agency  for  Prevention  of  Corruption  prepared  the  report  on  the  implementation  of  the 
anti-corruption-related section of the action plan for chapter 23 sub-chapter, and submitted it 
to  Parliament  for  adoption  in  March  2021.  According  to  this  draft  report,  Serbia  only 
completed 26 (42%) actions, which either had to be completed in the second half of 2020 or 
were continuous actions.  

Fundamental rights 

Serbia’s  legislative  and  institutional  framework  for  upholding  human  rights  is  broadly  in 
place. However, it needs to ensure the framework is consistently and efficiently implemented. 
Serbia  has  yet  to  recruit  new  staff  in  the  Ombudsman’s  Office  and  in  the  Office  of  the 
Commissioner for Personal Data Protection. A new Ombudsman law and amendments to the 
law on access to information of public importance were adopted at the level of Government 
on 7 October 2021. The  adoption of a new  anti-discrimination strategy  and of  a new Roma 
action plan are delayed.  

In  addition  to  making  substantial  efforts  to  uphold  freedom  of  expression,  Serbia  needs  to 
address the recommendations of the 2020 report. In particular, Serbia needs to:  

  strengthen  human  rights  institutions,  including  by  means  of    allocating  the  necessary 

financial and human resources;  

  adopt  and  start  to  implement  a  new  anti-discrimination  strategy;  actively  pursue 

investigation and convictions for hate-motivated crimes;  

  demonstrate, through enhanced data collection, a tangible improvement across the country 
in  the  effective  exercise  of  the  rights  of  individuals  belonging  to  national  minorities, 
including under the targets set by the Poznan declaration as regards the Roma4.  

Serbia  has  ratified  the  main  international  human  rights  instruments  but  it  has  yet  to 
become a party to the International Convention on the Protection of the Rights of All Migrant 
Workers and Members of their Families. 

From  June  2020  to  June  2021,  the  European  Court  of  Human  Rights  delivered  ten 
judgments concerning Serbia and found that it violated the European Convention on Human 
Rights  in  seven  cases.  This  notably  included  four  violations  of  the  protection  of  property, 
three of the right to a fair trial, and two of the prohibition of torture.  Implementation of the 
mechanism  providing  individual  redress  to  parents  in  cases  similar  to  the  one  of  Zorica 

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

31 

 
 
                                                           
Jovanović  v.  Serbia  is  ongoing,  with  collection  of,  and  checks  over,  cases  submitted  by 
parents of missing babies.  

to 

the  Ombudsman, 

As  regards  the  promotion  and  enforcement  of  human  rights,  the  newly  established 
government  created  a  Ministry  for  Human  and  Minority  Rights  and  Social  Dialogue.  In 
December  2020,  the  Parliament  in  its  plenary  session  adopted  conclusions  on  the  annual 
reports of independent  bodies. Compared  with  2019, there has been  an increase of citizens’ 
complaints  submitted  to the  Ombudsman  in  2020  (2019:  3,276;  2020:  5,056),  as  well  as  an 
increase in the number of recommendations from the Ombudsman addressed to the authorities 
(2019:  934;  2020:  1,070).  According 
the  percentage  of  his 
recommendations  followed up by the authorities remains high (2019:  95.5%;  2020:  94.5%). 
However, certain recommendations related to ‘public interest’ have still not been addressed. 
Serbia has yet to recruit new staff in the Ombudsman’s Office (deadline in the action plan: Q4 
2021)  and  to  provide  appropriate  premises.  Staff  turnover  in  the  Office  continues  to  be  a 
concern.  The  number  of  filled  in  positions  actually  decreased  (2019:  93;  2020:  84).  A  new 
Law  on  the  Ombudsman  was  adopted  at  the  level  of  Government  on  7  October  2021.  In 
December 2020, the Accreditation Subcommittee of the Global Alliance of National Human 
Rights  Institutions  (GANHRI)  –  whose  secretariat  is  the  Office  of  the  UN  High 
Commissioner  for  Human  Rights  –  decided  to  defer  the  review  of  the  accreditation  of  the 
Ombudsman for one year, until additional information is provided on issues of concern, such 
as  selection  and  appointment,  handling  of  individual  complaints  and  cooperation  with  civil 
society. 

In  the  field  of  prevention  of  torture  and  ill-treatment,  the  Ombudsman,  in  its  role  of 
National Preventive Mechanism against Torture, continued to increase the number of visits to 
relevant  sites  (2019:  77;  2020:  85).  Training  sessions  on  the  methodology  for  investigating 
cases  of  torture  continued,  in  light  of  the  outstanding  recommendations  of  the  European 
Committee for the Prevention of Torture and Inhuman or Degrading Treatment or Punishment 
(CPT). These recommendations notably relate to the CPT’s report on its ad hoc visit to Serbia 
in 2017, stating that ill-treatment is an accepted practice within the current police culture.  In 
January 2021, the European Court of Human Rights ruled on the case Zličić v Serbia, finding 
that Serbia violated article 3 of the European Convention on Human Rights, namely inhuman 
and  degrading  treatment  while  in  police  custody,  and  failed  to  conduct  an  effective 
investigation. In February 2021, the Ombudsman published an analysis of the lawfulness of 
the work of the Ministry of the Interior during the July 2020 citizens’ protests related to the 
handling of the COVID-19 pandemic. In all eight cases under investigation, the Ombudsman 
determined ill-treatment of citizens by police officers. Irregularities included unauthorised use 
of  force  and  illegal  use  of  coercive  means,  lack  of  visible  official  IDs  on  police  officers’ 
uniforms,  and  lack  of  prompt  reaction  by  the  Ministry’s  Internal  Control  Sector.  The 
Ombudsman  recommended  to  the  Ministry  to  identify  and  sanction  responsible  police 
officers.  Investigations  have  been  initiated;  they  have  not  yet  resulted  in  any  disciplinary 
sanctions.  The  Ombudsman  found,  in  his  thematic  report  of  September  2020,  that  medical 
professionals  in  civilian  health  care  institutions  still  lack  both  the  knowledge  and  skills 
necessary to document signs of ill-treatment committed by the police in line with the Istanbul 
protocol, which may have an adverse effect on the investigation before the judicial authorities. 
In  September  2020,  an  independent  expert  contracted  by  the  Ministry  of  Justice  concluded 
that  the  May  2019  criminal  code  amendments,  introducing  life  imprisonment  without  the 
possibility  of  conditional  release  for  a  number  of  crimes,  were  not  compliant  with  the 
European  Convention  on  Human  Rights  and  the case  law  of  the  European  Court  of  Human 
Rights.  Similar  concerns  had  been  raised  by  the  Council  of  Europe’s  Commissioner  for 
Human Rights prior to the adoption of the amendments. No progress was made on adoption of 
a law for the prevention of ill-treatment and abuse in social institutions. 

32 

 
 
Regarding the prison system, the renovation programme continued in several prisons, in line 
with  the  expired  strategy  for  reducing  overcrowding  in  penal  institutions.  Treatment 
programmes in prisons and prison medical facilities continued to be improved, in line with the 
CPT recommendations. Following the 2018 decision on establishing a special department for 
alternative  measures  to  detention,  a  systematisation  decision  on  staff  was  adopted  in  May 
2021.  The  recruitment  of  additional  probation  staff  is  ongoing.  The  use  of  alternative 
measures to detention continued to increase, but a large percentage of convicted persons are 
under  house  detention  rather  than  serving  community  sanctions.  In  addition,  the  share  of 
alternative measures to  detention  – 35 per 100 000 of the population, including those under 
electronic monitoring – remains low. Previously identified shortcomings regarding detention 
conditions,  the  provision  of  legal  aid  and  healthcare  remain.  Post-release  programmes  for 
long-term  prisoners  were  developed,  but  institutions  at  local  level  need  more  resources  to 
ensure their implementation.  

The law on personal data protection is mostly aligned with the EU General Data Protection 
Regulation.  In  his  2020  annual  report,  the  Commissioner  for  Information  of  Public 
Importance and Personal Data Protection pointed to the need for harmonising the provisions 
of  all  other  laws  related  to  the  processing  of  personal  data  with  the  new  personal  data 
protection law. Such harmonisation was due by the end of 2020 according to the personal data 
protection  law.  The  number  of  designated  ‘data  protection  officers’  within  public  entities 
remained  small.  The  Office  of  the  Commissioner  needs  to  be  provided  with  the  human, 
technical  and  financial  resources  necessary  for  the  effective  performance  of  its  tasks  and 
exercise of its powers. There are currently 99 staff members in the Office compared to the 129 
target.  The  Commissioner  for  Personal  Data  Protection  issued  negative  opinions  on  the 
Ministry of the  Interior’s  impact  assessment on street  video-surveillance, where he  assessed 
that there was no legal basis for the use of biometric surveillance. The Ministry put on hold 
processing of biometric personal data until the law on records and data processing in the field 
of  internal  affairs  is  amended  and  aligned  with  the  law  on  personal  data  protection.  The 
proportionality  and  necessity  of  such  surveillance  will  need  to  be  assessed,  under  the 
provisions  of  the  personal  data  protection  law,  before  its  possible  deployment.  Following  a 
privacy  breach  in  the  centralised  COVID-19  health  information  system  in  April  2020,  the 
Commissioner  for  Personal  Data  Protection  undertook  a  supervision  procedure  and  issued 
warnings to the Institute for Public Health. This was based on the fact that the data controller 
of  the  COVID-19  system  had  not  conducted,  prior  to  starting  data  processing,  an  impact 
assessment,  as  legally  required.  In  addition,  the  data  controller  had  not  undertaken  the 
appropriate  technical,  organisational  and  personnel  measures  for  the  protection  of  personal 
data, such as the adequate regulation of the relations between the data controller and the data 
processor. 

Freedom  of  thought,  conscience  and  religion  is  constitutionally  guaranteed  and  generally 
respected.  However,  the  lack  of  transparency  and  consistency  in  the  process  for  registering 
religious  communities  continues  to  be  one  of  the  main  obstacles  preventing  some  religious 
groups  from  exercising  their  rights.  No  progress  was  made  towards  aligning  the  law  on 
churches and religious communities with international standards.  

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

Freedom of expression  

Serbia  has  some  level  of  preparation  concerning  freedom  of  expression.  Overall,  limited 
progress  was  made  by  adopting  and  starting  to  implement  a  limited  number  of  measures 
under the action plan related to the media strategy, while verbal attacks against journalists by 
high-level  officials  continued.  The  Republic  Public  Prosecutor’s  Office  (RPPO)  issued  a 
mandatory instruction for all public prosecutors, ordering urgent action – using the expedited 
33 

 
 
procedure – in cases of threats and attacks against journalists. Prosecutors are obliged to keep 
special records in relation to criminal acts committed against journalists. In December 2020, 
Serbia adopted an action plan related to the media strategy. Implementation of the action plan 
was limited so far, while amendments of the media laws, including the role of the Regulatory 
Body for Electronic Media (REM), are scheduled for a later stage in 2021 and 2022. Serbia 
established  two  working  groups  reporting  to  the  Prime  Minister  that  include  media 
representatives: one to monitor how the media strategy is being implemented, the other on the 
safety  of  journalists.  Cases  of  threats  and  violence  against  journalists  remain  a  concern  and 
the  overall  environment  for  the  exercise  of  freedom  of  expression  without  hindrance  still 
needs  to  be  further  strengthened  in  practice.  Most  media  associations  withdrew  from  the 
group on safety of journalists in March 2021, citing hate speech and smear campaigns against 
journalists and civil society representatives, including by the head of the ruling party caucus 
in Parliament. These verbal attacks took place in Parliament even after a code of conduct was 
adopted in December 2020. 

The recommendations of last year still need to be implemented and therefore remain valid. In 
addressing  the  persisting  shortcomings,  Serbia  should  implement,  without  delays,  its  media 
strategy and action plan in a transparent and inclusive manner, respecting the letter and spirit 
of the objectives of that strategy, and focusing as a matter of priority on:  

  improving  the  overall  environment  for  freedom  of  expression  by  refraining  from  verbal 
attacks  and  threats  against  journalists  by  high-level  officials;  in  addition,  ensuring  that 
threats  and  cases  of  physical  and  verbal  violence  are  swiftly  followed  up  and  publicly 
condemned;  

  ensuring  timely  implementation  of  the  media  strategy  and  strengthening  of  media 
pluralism.  This  includes  measures  related  to  REM’s  functioning  and  mandate,  in  both 
electoral – in light of ODIHR’s recommendations – and non-electoral periods, as well as 
the public broadcasters; 

  ensuring timely implementation of the media strategy as regards transparent and equitable 
co-funding  for  media  content  serving  the  public  interest,  and  increased  transparency  in 
media ownership and advertising. 

Intimidation of journalists 

Overall,  cases  of  threats,  intimidation  and  violence  against  journalists  remain  a  source  of 
concern,  especially  at  local  level.  Despite  differences  in  the  numbers,  due  to  different 
methodologies,  the  two  main  media  associations  in  Serbia  both  recorded  an  increase  in  the 
number of attacks and pressures against journalists in 2020 compared to 2019. This was also 
reported  in  the  Ombudsman’s  2020  report.  The  Standing  Working  Group  on  the  Safety  of 
Journalists  continued  to  help  improve  the  sharing  of  information  between  the  police,  the 
prosecution and media associations. The government also established a new working group on 
the  safety  of  journalists,  which  is  reporting  to  the  Prime  Minister  and  includes  media 
representatives. In addition to periodical meetings, the working group met several times on an 
urgent  basis  when  cases  of  attacks  against  journalists  were  reported  and  issued  press 
statements.  Under  the  auspices  of  the  new  working  group,  a  24-hour  SOS  phone  line  for 
reporting attacks and pressures on journalists became operational in March 2021. A new web 
platform related  to  the safety  and protection of  journalists was launched  in April 2021. The 
Ombudsman, presented in August 2021 its work on establishing a central database of attacks 
and  threats  against  the  media.  Operationalisation  of  the  database  has  yet  to  be  completed. 
Following suggestions raised in the working group, the government categorised journalists as 

34 

 
 
 
a priority group in the process of vaccination against COVID-19. An analysis of the criminal 
code  including  draft  amendments  to  improve  the  protection  of  journalists  was  carried  out. 
Most media associations withdrew from the group on the safety of journalists in March 2021, 
citing  the  lack  of  official  reaction  to  verbal  attacks  against  journalists  in  the  context  of  an 
ongoing organised crime case. These verbal attacks, also targeting civil society organisations, 
were  notably  made  by  the  head  of  the  ruling  party  caucus  in  the  Parliament  and  took  place 
even after a code of conduct was adopted in December 2020. In March 2021, the Parliament’s 
administrative  committee,  in  charge  of  overseeing  the  application  of  the  code  of  conduct, 
rejected all complaints by civil society representatives. President Vučić publicly called for the 
attacks to stop and to let the media do their work. The same appeal was subsequently made by 
the  Ministry  of  Culture  and  Information.  The  Prime  Minister  appealed  to  the  media 
representatives to re-join the working group.  

In  December  2020,  the  Republic  Public  Prosecutor’s  Office  (RPPO)  issued  a  mandatory 
instruction for all public prosecutors, ordering urgent action – using the expedited procedure – 
in  cases  of  threats  and  attacks  against  journalists.  Prosecutors  are  obliged  to  keep  special 
records in relation to criminal acts committed against journalists. The previously established 
network  of  contact  points  in  the  public  prosecution's  offices  for  such  cases  now  consists  of 
115  deputy  public  prosecutors.  The  Minister  of  Culture  and  Information  withdrew  all  the 
requests for initiating court proceedings against journalists which had been sent to the State 
Attorney's  Office  by  the  previous  Minister,  as  well  as  five  criminal  charges  against  media 
representatives  filed  to  the Prosecutor's Office.  According to RPPO’s information regarding 
those acts that qualify for criminal prosecution, by the end of December 2020, out of the 55 
cases  filed  in  2020,  37  cases  were  considered  by  the  RPPO  and  18  cases  were  dismissed. 
Altogether three cases (three convictions in court) were finalised, while criminal proceedings 
continue for the 34 remaining cases (two cases before the court, nine in pre-investigation, 14 
in  investigation  (evidentiary  actions),  and  nine  cases  without  identified  perpetrators).  In 
February 2021, a former mayor was sentenced in the first instance to more than four years in 
prison for jeopardising the life of an investigative journalist writing about corruption at local 
level, by ordering an arson attack on his home in December 2018. Regarding the commission 
tasked with looking into three cases involving the murder of journalists, in September 2020 an 
appeal court revoked on procedural grounds the first-instance verdict against the accused for 
the murder of journalist Slavko Ćuruvija; a new trial is ongoing. Investigation is ongoing in 
the two other murder cases.  

Implementation of legislation / institutions  

The  independence  of  the  Regulatory  Body  for  Electronic  Media  (REM)  needs  to  be 
strengthened  to  enable  it  to  efficiently  safeguard  media  pluralism.  Relevant  measures  are 
foreseen by the media strategy to be implemented by 2022. After REM elected its president in 
December  2020  –  the  function  having  been  vacant  since  2016  –  a  REM  member  resigned, 
citing lack of transparency in the election procedure and also criticising the passivity of REM 
in  performing  its  basic  function  of  regulating  electronic  media.  This  vacancy  was  filled  in 
May 2021. Another vacancy was filled in July 2021, bringing REM Council to full capacity. 
In November 2020, REM published its final report on the media coverage of the June 2020 
parliamentary elections and concluded that public broadcasters fulfilled their legal obligation 
of  equal  representation  while  commercial  television  stations  favoured  different  political 
options. REM noted that a large portion of the air time was given to analysts who seemed to 
have been politically biased. In its final report on the elections, ODIHR found that most TV 
channels with national coverage and newspapers promoted the government policy and that the 
few  media  outlets  which  offered  alternative  views  had  limited  outreach  and  provided  no 
effective  counterbalance,  which  compromised  the  diversity  of  political  views  available 

35 

 
 
through traditional media, through which most voters receive information. ODIHR also found 
that both the Supervisory Board and REM had remained passive in supervising media conduct 
during  the  campaign  period,  although  REM  was  more  active  in  the  final  phase  of  the 
campaign  and  banned  several  election-related  ads.  Since  the  last  elections,  a  local  CSO 
calculated that 93% of air time on national news programmes for the period July 2020-June 
2021  was  given  to  members  of  the  ruling  coalition,  who  were  either  portrayed  in  a  neutral 
(63%) or positive (37%) manner, while 7% of time was given to members of the opposition, 
predominantly  portrayed  negatively  (57%).  The  Commissioner  for  information  of  public 
importance  issued  a  decision  in  March  2021  requesting  REM  to  publish  its  databases  on 
monitoring  of  broadcasters.  REM  replied  that  it  could  not  publish  them  due  to  contractual 
arrangements. Hate speech and discriminatory terminology are often used and tolerated in the 
media  and  are  rarely  tackled  by  regulatory  authorities  or  prosecutors.  Verbal  attacks  and 
smear  campaigns  against  journalists  continued.  The  Press  Council  continued  to  record 
breaches of the journalistic code of professional conduct in print media. Recurrent statements 
by  high-ranking  state  officials  on  the  daily  and  investigative  work  of  journalists  are 
preventing  the  creation  of  an  environment  where  freedom  of  expression  can  be  exercised 
without  hindrance.  The  frequent  refusal  by  public  bodies  to  disclose  information,  or  their 
administrative  silence,  following  requests  submitted  under  the  law  on  free  access  to 
information of public importance, continued to hinder the work of journalists.  

Public service broadcaster 

The representation by public service broadcasters of the plurality of political views needs to 
be  enhanced.  Since  the  summer  of  2021,  members  of  opposition  parties  have  started  to  be 
more  present  in  the  morning  programmes  of  Radio  Television  Serbia  (RTS)  but  not  yet  in 
primetime  (evening)  ones.  Public  broadcasting  services  in  minority  languages  need  to  be 
strengthened,  especially  as  regards  RTS.  As  foreseen  by  the  media  strategy  in  order  to 
reinforce its independence and stability, RTS was not included in the state budget for 2021. 
The Parliament adopted  instead  an increase  of the subscription fee  by amending the law on 
temporary regulation of subscription tax for public media services, while the law still foresees 
the possibility of public co-financing if needed.  

Economic factors  

Political and economic influence over the media continues to be a source of concern. Serbia’s 
media  strategy  foresees  measures,  including  amendments  to  the  media  laws,  to  be 
implemented by the end of 2021 and in 2022 to address issues of transparency in ownership 
structures and fairness  in financing  media content and advertising from state resources. The 
existing guidelines for media co-funding require an assessment of whether participants in the 
call  for  proposals  have  had  measures  imposed  by  state  bodies,  regulatory  bodies  or  self-
regulatory  bodies  due  to  violation  of  professional  and  ethical  standards.  However,  the  print 
media  with  the  most  violations  of  the  journalistic  code  of  professional  conduct  recorded  by 
Serbia’s  Press  Council  continued  to  receive  public  co-funding,  especially  at  the  local  level. 
Measures were taken in relation to the privatisation of Tanjug news agency, as foreseen by the 
media  strategy.  The  privatisation  process  of  the  media  sector  has  yet  to  be  completed.  The 
media strategy also highlighted the absence of suitable criteria and mechanisms to assess the 
existence  of  media  pluralism  in  Serbia,  and  identified  measures  aiming  at  addressing  these 
issues. Several legal disputes and proceedings are ongoing involving Telekom Srbija – whose 
majority  stakeholder  is  the  state  –  and  private  companies,  both  in  Serbia  and  abroad,  in 
context of the high concentration of the media market in Serbia.  

Freedom of artistic expression 

36 

 
 
Freedom of artistic expression is guaranteed by the Constitution. In October 2020, a group of 
masked  individuals  broke  into  a  comic  book  exhibition,  threw  tear  gas  and  destroyed  the 
works.  Death  threats  were  also  made  on  social  networks  and  reported  to  the  police,  which 
arrested  five  persons.  The  Ministry  of  Culture  publicly  condemned  the  incident  while  also 
criticising  the  content  of  the  exhibition.  Overall  in  2020,  four  cases  were  initiated  based  on 
criminal reports for criminal acts against artists in relation to exhibition of their work. 

Professional organisations and working conditions 

Lack of job security of journalists and the editorial environment, which favours ‘tabloidism’, 
is  not  conducive  to  improving  journalistic  standards  and  resilience  against  disinformation. 
The  COVID-19  pandemic  resulted  in  the  worsening  of  the  economic  situation  of  media  in 
Serbia, which were hit by a critical reduction of advertising revenues. 

(See also Chapter 10 – Information society and media) 

While legislation on freedom of assembly and association is generally in line with European 
standards, no progress  was made on alignment with the Guidelines on Freedom  of Peaceful 
Assembly of the ODIHR or on adoption of implementing legislation.  In February 2021, the 
Ombudsman  published  an  analysis  of  the  lawfulness  of  the  work  of  the  Ministry  of  the 
Interior  during  the  July  2020  citizens’  protests  related  to  the  handling  of  the  COVID-19 
pandemic  (see  also  the  section  on  of  prevention  of  torture  and  ill-treatment  under 
fundamental rights).  

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

Regarding property rights, the Agency for Restitution continued with restitutions in kind and 
first instance decisions on return of confiscated properties. In January 2021, the government 
adopted  a  coefficient  for  financial  restitution  when  restitution  in  kind  is  not  possible  and in 
March started issuing state bonds as a form of compensation. The implementation of the law 
on the restitution of heirless Jewish property, as well as the return of properties to churches 
and religious communities, has continued. 

In the field of non-discrimination, Serbia adopted amendments to the law on the prohibition 
of discrimination in May 2021. Further work will be required to fully align this law with the 
EU acquis, and in particular Directive 2000/78/EC establishing a general framework for equal 
treatment  in  employment  and  occupation,  as  well  as  with  European  standards.  Following 
expiry  of  the  previous  anti-discrimination  strategy  in  2018,  the  government  is  delayed  in 
adopting  a  new  strategy  (deadline  in  the  action  plan:  Q4  2020).  The  Commissioner  for 
Equality  was  re-elected  through  an  urgent  procedure  in  November  2020,  after  her  mandate 
had expired in May 2020. As a consequence of the prolonged vacancy, the Commissioner’s 
office  was  not  legally  able  to  act  upon  the  received  citizens’  complaints  during  that  period. 
Accordingly, the Commissioner’s 2020 report indicates a decrease in the number of citizens’ 
complaints (2019: 1,479; 2020: 1,188) and in the number of recommendations issued (2019: 
686; 2020: 476). The percentage of fulfilment of Commissioner’s recommendations remained 
high,  at  89%.  No  progress  was  made  towards  alignment  of  the  2016  amendments  to  the 
criminal  code  related  to  prohibition  and  punishment  of  criminal  racial  acts  with  the  EU 
acquis.  Since  the  introduction  of  hate  crime  as  an  aggravating  circumstance  in  the  criminal 
code  in  2012,  there  have  been  seven  final,  and  one  first  instance,  convictions.  Hate  speech, 
threats  and  violence  continued  to  target  human  rights  defenders  and  LGBTIQ  persons.  The 
Commissioner  for  Equality  also  reported  several  attacks  and  threats  against  migrants 
organised  by  extremist  and  far-right  groups,  as  well  as  attacks  based  on  hatred  and  ethnic 
identity. 

37 

 
 
On gender equality, Serbia adopted a new law in May 2021, which has been aligned with the 
EU acquis. The amended legal  act  defines general  and special measures  in  order to  achieve 
and  promote  gender  equality.  The  Government  adopted  a  National  Strategy  for  Gender 
Equality  on  14  October  2021.  During  the  COVID-19  crisis,  the  Commissioner  for  Equality 
issued several recommendations to the government related to the restriction of movement of 
the elderly, persons with disability and lack of support services to vulnerable groups. Roma 
women, older women, poor women, women with disabilities, refugee and internally displaced 
women,  continue  to  experience  intersecting  forms  of  discrimination,  which  was  further 
exacerbated by the COVID-19 crisis.  

On  violence  against  women  and  domestic  violence,  a  new  strategy  was  adopted  in  April 
2021.  The  latest  national  action  plan  for  the  implementation  of  UN  Security  Council 
Resolution 1325 on Women, Peace and Security covers the period 2017-2020 and a new one 
is  pending.  In  February  2021,  a  former  mayor  was  sentenced  to  three  months  in  prison  for 
‘illegal  sexual  activity’  towards  one  of  his  staff.  Although  the  case  was  not  qualified  as 
‘sexual harassment’, this was the first case of an elected official being sentenced to prison for 
this  type  of  case.  The  implementation  of  the  law  against  domestic  violence  needs  to  be 
improved. An integrated system for collecting and monitoring cases of violence disaggregated 
by  type  of  violence  and  by  relationship  between  perpetrator  and  victim  still  does  not  exist. 
The definition of rape still has to be amended in the criminal code in order to comply with the 
Istanbul  Convention.  An  action  plan  on  the  national  programme  for  safeguarding  and 
improving sexual and reproductive health has yet to be adopted. Additional funding is needed 
to ensure it is implemented as regards improving access to quality services in this area. 

The Council on the Rights of the Child, the coordination body in charge of monitoring the 
new  strategy  for  prevention  and  protection  of  children  from  violence,  was  re-established  in 
April 2021.  It  will  need to  be supported by a technical  body.  The  government is  delayed in 
adopting  amendments  to the law on juvenile offenders  and protection of minors in  criminal 
proceedings (deadline in the original version of the action plan: Q3 2016, revised to Q4 2020). 
Following expiry of the  previous national  action plan for the rights of the child in 2015, no 
progress has been made towards adoption of a new one. Statistical data on vulnerable groups, 
including Roma children and children with disabilities, is still not disaggregated. Although a 
relatively small number of children are placed in institutional care, violations of child rights in 
large-scale  institutions  for  children  with  disabilities  remain  a  concern,  which  was  further 
exacerbated under the COVID-19 pandemic as a result of physical distancing measures. 

is  delayed 

in  April  2021.  The  government 

An  action  plan  to  the  March  2020  strategy  for  the  rights  of  persons  with  disabilities  was 
adopted 
in  adopting  a  strategy  on 
deinstitutionalisation, as well as a law aiming at protecting persons with mental disabilities in 
institutions  of  social  welfare  to  be  regulated  in  accordance  with  the  UN  Convention  on  the 
Rights  of  Persons  with  Disabilities  (deadlines  in  the  action  plan:  Q4  2020).  Women  with 
disabilities  in  residential  institutions  continue  to  face  gender-specific  forms  of  violence. 
Funding  for  developing  community-based  services,  and  for  supporting  licensed  service 
providers  and  social  services,  remains  insufficient.  The  COVID-19  pandemic  has  had 
negative  consequences  for  persons  with  disabilities,  especially  those  living  in  residential 
institutions.  

As  regards  the  rights  of  Lesbian,  Gay,  Bisexual,  Transgender,  Intersex  and  Queer 
(LGBTIQ) persons, there was no pride parade in 2020 due to the COVID-19 pandemic but 
on-line events. The ministry for human and minority rights started a dialogue about a future 
law on same-sex partnership, as already foreseen in the previous anti-discrimination strategy. 
The  President  publicly  announced  that  such  draft  law  would  not  be  in  line  with  the  current 
constitution  and  that  he  would  not  sign  it.  The  Ombudsman  published  in  December  2020  a 

38 

 
 
recommendation to that ministry to draft legislation that would enable the regulation of legal 
gender  recognition,  also  foreseen  in  the  previous  strategy.  Difficulties  remain,  especially  in 
smaller municipalities, in  implementing the amendments of the law on birth registry,  which 
enable  data  on  gender  change  to  be  entered  into  the  registry.  The  implementation  of  hate 
crime legislation, including on grounds of sexual orientation, remains inadequate. Centralised 
official  data on hate crimes broken down by  bias motivation  is  still lacking. Due to lack of 
trust in institutions, cases of violence and discrimination towards LGBTIQ persons are often 
unreported.  Transgender  persons  are  particularly  vulnerable  to  violence,  abuse  and 
discrimination. Intersex persons remain invisible both socially and legally.  

Concerning procedural  rights, the  legal framework remains only  partially  aligned with the 
EU acquis, notably as regards procedural rights of suspects and accused persons. A strategy 
and  action  plan  on  the  rights  of  victims  and  witnesses  of  crime  were  adopted  in July  2020. 
Implementation  has  proceeded  at  a  slow  pace,  and  the  legal  framework  requires  further 
amendments. The government established a coordination body for the protection of victims of 
crimes and witnesses in criminal proceedings in April 2021. Sufficient funding will need to be 
allocated to allow for the deployment and staffing of a national network of victim and witness 
support  services,  as  foreseen  by  the  aforementioned  strategy.  Following  online  training 
courses  for  judges  and  prosecutors  on  compensation  in  criminal  proceedings,  several 
judgements  have  included  compensation  to  be  paid  to  the  victims.  Modern  technical 
equipment has been installed in five of the 25 Higher Courts to allow witness testimony to be 
delivered remotely. Regarding access to justice, the Council for monitoring implementation 
of the law on free legal aid has yet to be established. In the first year of implementation of the 
free legal  aid law, and according  to  partial statistics as not  all municipalities complied with 
the  obligation  to  report  to  the  Ministry  of  Justice,  92%  of  requests  were  approved  from 
October  2019  to  October  2020,  and  then  78%  from  October  2020  until  the  end  of  January 
2021.  Only  one  third  of  municipalities  and  cities  have  specialised  units  for  free  legal  aid. 
There is  a need  for further awareness  raising of  the existence of legal  aid towards the  most 
vulnerable and marginalised individuals. 

The legal framework for respect for and protection of minorities and cultural rights is broadly 
in place and generally upheld, in line with the Council of Europe Framework Convention on 
National  Minorities.  The  implementation  of  Serbia’s  ‘action  plan  for  the  realisation  of  the 
rights of national minorities’ and relevant legislation needs to lead to a tangible improvement 
in  the  effective  exercise  of  the  rights  of  individuals  belonging  to  national  minorities 
throughout  the country.  An  ex post  analysis of the current  action plan was  finalised in  June 
2021  and  presented  to  stakeholders  in  the  summer.  Serbia  needs  to  address  the 
recommendations  contained  in  the  fourth  opinion  of  the  Council  of  Europe’s  Advisory 
Committee  for  the  Framework  Convention.  Among  others,  it  needs  to  set  up  a  sustainable 
data collection framework and to revitalise inter-ethnic relations, taking into account the need 
to involve the majority in Serbian society in integrating and including national minorities. The 
new  Ministry  for  Human  and  Minority  Rights  and  Social  Dialogue  has  established  good 
cooperation with national minority councils. The Fund for the National Minorities remained 
the same as in 2020. The 2021 budget for National Minority Councils was initially decreased 
by  20%  but  then  maintained  by  budgetary  transfers  after  concerns  were  expressed  by  the 
Councils. The proper functioning of National Minority Councils remains important, including 
by ensuring their sustainable financing. As concerns were raised by members of the Albanian 
national  minority  on  the  way  police  controls  of  residence  status  are  being  carried  out  in 
Southern  Serbia,  resulting  in  the  ‘passivisation’  of  certain  addresses,  there  is  a  need  for  the 
authorities  to  better  explain  to  the  public  how  these  checks  are  being  conducted.  Local 
councils  for  inter-ethnic  relations  exist  in  all  73  municipalities  where  such  an  obligation  is 
stipulated by the law; however, the full implementation of their mandate has yet to materialise 

39 

 
 
as  council  members  have  not  always  been  nominated  or  councils  often  do  not  meet.  The 
Republic’s National Minority Council, in cooperation with all national minority councils, has 
worked  on  providing  necessary  information  on  COVID-19  vaccination.  Despite  the  legal 
obligation to  take into account  the ethnic composition  of the population, national  minorities 
remain  underrepresented  in  the  public  administration.  On  the  basis  of  the  amended  civil 
servants law, preparations for establishing a register of public employees, with the possibility 
of  voluntary  declaration  of  national  affiliation,  in  order  to  collect  data,  were  finalised;  the 
system is however not yet operational.  

There  has  been  further  progress  in  the  area  of  education.  The  process  of  preparing  and 
printing textbooks in minority languages continued and produced positive results, such as an 
additional 24 textbooks in Albanian language. Continued efforts are needed to complete this 
task. New curricula for teaching Serbian as a non-mother tongue have also been adopted, and 
support by external associates in pilot elementary schools has continued. The publication of 
textbooks in minority languages for use in secondary schools remains limited. In consultation 
with  eight  national  minority  councils  which  have  education  in  minority  languages,  the 
authorities  recorded  300  on-line  classes  of  Serbian  as  non-native  language,  which  are 
available on the national platform of Radio Television Serbia. Access to religious worship in 
minority  languages  has  yet  to  be  enabled  throughout  Serbia.  While  the  budget  of  Radio 
Television Vojvodina was decreased in September 2020, this did not affect the availability of 
programmes in minority languages. Overall, public broadcasting in minority languages is still 
not  sufficient,  except  in  Vojvodina.  Following  the  process  of  media  privatisation,  the 
broadcasting  of  programmes  in  minority  languages  remains  limited  and  needs  to  be  made 
sustainable. There have been occurrences of hate speech against national minorities, including 
by senior government officials and Members of Parliament. A higher court rejected a lawsuit 
filed  by  the  president  of  the  Albanian  National  Minority  Council  against  a  minister  for  the 
alleged use of hate speech; an appeal procedure is ongoing. 

Regarding Roma inclusion, a new strategy for the social inclusion of the Roma in Serbia, and 
the  related  action  plan,  have  yet  to  be  adopted.  The  new  minister  for  human  and  minority 
rights  and  social  dialogue  was  appointed  as  National  Roma  Contact  Point.  A  new 
coordination body, with the prime minister as chair and the minister for human and minority 
rights as deputy, was established in June 2021. Coordination between the national and local 
authorities,  as  well  as  Roma-sensitive  budgeting,  still  need  to  be  strengthened.  Job 
descriptions  for  local  Roma  coordinators,  pedagogical  assistants,  and  health  mediators  have 
yet to be unified and become an integral part of local self-government services. Amendments 
to  the  rulebooks  regulating  the  work  standards  of  pedagogical  assistants  in  primary  and 
secondary schools were adopted in September 2020. The network for pedagogical assistants 
needs additional financial means in order to be expanded.  

Most Roma people in Serbia have civil documentation. The solution planned by the Ministry 
of the Interior, the Ombudsman and UNHCR to enable the registration of individuals lacking 
an official address by means of registering at centres for social work led to more Roma people 
being  registered.  However,  all  births  need  to  be  registered  immediately  after  children  are 
born,  regardless  of  their  parents’  status.  Instructions  on  ‘acting  in  case  of  birth  of  a  child 
whose parents  do not  have identity documents  to  enable registration in  a registry of  births’ 
were  adopted  in  December  2020;  effective  implementation  will  need  to  be  ensured.  Roma 
students  in  elementary  and  secondary  education  have  continued  to  receive  scholarships 
through  affirmative  measures.  However,  school  drop-out  rates  remain  high,  especially  for 
Roma  girls.  Segregation  in  education  needs  to  be  addressed.  Roma  students  are  still 
overrepresented in special schools (18%) and classes (35%). Under the COVID-19 pandemic, 
Roma  children,  mainly  from  informal  settlements,  have  been  struggling  with  access  to  the 

40 

 
 
technical preconditions for participating in online education. Transition from education to the 
labour  market  is  especially  challenging  for  young  Roma  people.  Informal    employment  
continues    to    be    high  among    the    Roma    population    and    the    informality    gap    is    the  
highest   in   the  Western  Balkans region.  The  government  is  delayed in adopting a law on 
social entrepreneurship, which would aim at increasing labour activation of Roma and other 
vulnerable  individuals  (deadline  in  the  action  plan:  Q4  2020).  In  addition,  Roma  are  still 
underrepresented in the public administration.  

There  has  been  a  five-year  delay  in  adopting  a  national  housing  strategy  as  required  by  the 
2016  law  on  housing.  Almost  20%  of  the  population  of  the  Roma  settlements  that  were 
mapped  have  no  or  irregular  access  to  safe  drinking  water,  while  over  55%  have  no  or 
irregular access to sewer networks, and 14.5% have no or irregular access to electricity. These 
shortcomings  were  exacerbated  by  the  COVID-19  pandemic.  The  legalisation  of  Roma 
settlements needs to be tackled as a matter of priority as required by the Poznan Declaration5. 
Forced evictions are still taking place, which is not in line with the law on housing. This law 
needs  to  be  implemented  effectively,  especially  the  provisions  prescribing  housing  support 
and  a  procedure  for  relocation  of  informal  settlements.  Roma  returnees  under  readmission 
agreements are in a particularly difficult situation in terms of social and economic inclusion. 
Mechanisms for addressing their needs has to be strengthened. Although child marriage is not 
common  in  the  general  population  in  Serbia,  early  and  child  marriage  remains  an  issue  of 
concern  among  Roma  girls  living  in  settlements.  Domestic  violence  also  often  goes 
unreported. 

There  are  still  196 140  internally  displaced  persons  (IDPs)  in  Serbia,  of  whom  68 154 
remain  vulnerable  and  with  displacement-related  needs.  There  is  a  need  to  close  the  only 
remaining  collective  centre  in  Bujanovac.  The  related  strategy  expired  in  2020.  The  law  on 
permanent  and  temporary  residence  needs  to  be  consistently  applied  to  allow  Roma  IDPs 
to  basic 
living 
socioeconomic  rights.  Roma  IDPs  remain  the  most  marginalised  and  vulnerable.  Serbia  is 
engaged  in  the  regional  dialogue  on  ‘durable  solutions  for  displaced  persons  from  Kosovo’ 
(the ‘Skopje process’). 

to  obtain  registered  residence  and  access 

informal  settlements 

in 

2.2.2 Chapter 24: Justice, freedom and security  

The EU has common rules for border control, visas, external migration and asylum. Schengen 
cooperation entails the lifting of border controls inside the EU. There is also cooperation in 
the  fight  against  organised  crime  and  terrorism,  and  judicial,  police  and  customs 
cooperation.   

Serbia  has  some  level  of  preparation  to  implement  the  EU  acquis  on  justice,  freedom  and 
security.  Limited  progress  was  made  in  the  reporting  period.  Serbia  continued  to 
significantly contribute, as a transit country, to the management of the mixed migration flows 
towards the EU by playing an active and constructive role and cooperating effectively with its 
neighbours and EU Member States. It also continued to effectively implement the integrated 
border management strategy and its action plan. Serbia has yet to establish a convincing track 
record of effective investigations, prosecutions and final convictions in serious and organised 
crime  cases,  and  to  further  align  with  the  EU  visa  policy.  The  recommendations  from  the 
2020  country  report  remain  outstanding,  except  for  continuing  increasing  border  controls, 
especially border surveillance including identification and registration measures in full respect 
of fundamental rights, and increase efforts to detect and prevent smuggling of migrants. 

5  Declaration  of  Western  Balkans  Partners  on  Roma  Integration  within  the  EU  Enlargement  Process  (Poznan 
Declaration) signed at the Western Balkans Leaders’ Summit in Poznan, Poland on 5 July 2019. 

41 

 
 
                                                           
In the coming period, Serbia should in particular:  

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

for Organised Crime to perform their duties;  

  amend  the  Serbian  criminal  code  in  order  to  effectively  criminalise  the  trafficking  of 

weapons;  

  adopt  the  Schengen  Action  Plan  by  ensuring  a  sufficient  involvement  of  all  relevant 

government institutions;  

  refrain  from  further  diverging  from  the  EU  visa  policy  and  take  concrete  steps  to  fully 

align with it. 

Serbia  adopted  a  revised  action  plan  for  chapter  24  in  July  2020.  It  sets  out  Serbia’s 
commitments, including in terms of timelines, in order to meet the interim benchmarks of the 
EU common positions for these chapters.  In  general,  indications of delays in this  report are 
measured  against  the  deadlines  established  by  Serbia  in  these  revised  action  plans.  An 
implementation report of the revised action plan has not yet been published by the Ministry of 
the Interior. The last available report covers the period July-December 2019. Since February 
2020, no meetings were held between the Negotiating Group for Chapter 24 and civil society 
organisations  under  the  umbrella  of  the  Working  Group  for  Chapter  24  of  the  National 
Convention on the European Union.  

Fight against organised crime  

Serbia has some level of preparation in the fight against organised crime. Limited progress 
was made in this area. Last year’s recommendations remain valid. Serbia has yet to establish a 
convincing  track  record  of  effective  investigations,  prosecutions  and  final  convictions  in 
serious and organised crime cases, including financial investigations leading to a track record 
of freezing and confiscating criminal assets. The number of convictions for organised crime 
decreased compared to 2019. Serbia should adapt its approach from one based on cases to a 
strategy against organisations, and from  focusing on cases of low or medium importance to 
high  profile  cases  aiming  at  dismantling  big  and  internationally  spread  organisations  and 
seizing the assets. 

Serbia should increase its efforts in addressing the shortcomings and:    

  increase  the  track  record  of  investigation,  prosecution,  and  convictions  in  serious  and 
organised crime cases, including cases of money laundering, based on systematic tracking 
of  money  flows  and  on  the  efficient  use  of  special  investigative  measures  to  collect 
relevant evidence;   

  systematically increase the seizure and confiscation of criminal assets which includes both 
seizure  of  proceeds  of  crimes  or  their  equivalent  and  the  systemic  use  of  extended 
confiscation;  

  ensure a  clear separation of the mandates  and regulations  concerning the interception of 
communications for criminal investigation on the one hand, and for security purposes on 
the other.   

Institutional set-up and legal alignment  

There  were  40 119  police  officers  in  Serbia  in  April  2020,  equivalent  to  435  per  100 000 
inhabitants, compared with an EU average of 326 (Eurostat, 2017). The  Prosecutor’s Office 
for  Organised  Crime  still  needs  to  recruit  five  prosecutors  in  order  to  complete  its  current 
office  size  (25  prosecutor  posts).  More  generally,  there  is  a  need  for  developing 

42 

 
 
‘systematisation  rulebooks’  on  the  basis  of  a  baseline  analysis  which  was  carried  out,  and 
taking into consideration hat Serbia has a prosecution-led investigation system. Furthermore, 
this office should be technically reinforced to autonomously carry out relevant SIMs (special 
investigative means) such as covert interception of communication. 

Serbia is delayed in conducting an analysis of the roles and practices of security services as 
well  as  of  the  National  Security  Council  in  carrying  out  criminal  investigations  related  to 
serious and organised crime. A  clear separation  of the mandates and regulations concerning 
interception of communications for criminal investigation, on the one hand, and for security 
purposes on the other needs to be ensured. The fact that the current criminal procedure code 
allows  for  covert  interception  of  communication  to  be  executed  also  by  the  Security 
Information Agency (BIA) and the Military Security Agency should be subject to an analysis 
as to whether this is in line with best European practices.     

Serbia’s  legal  framework  on  weapons-related  offences  includes  under  the  same  provision 
conducts related to trafficking of weapons as well as the ones related to illegal possession and 
other less relevant conducts. There is an urgent need to amend the code in order to effectively 
criminalise the trafficking of firearms and weapons. 

The law on police still needs to  be harmonised  with  the criminal  procedure code. The  legal 
framework  is  still insufficient  to  guarantee  the  operational  autonomy  of  the  police  from  the 
Ministry of the Interior. When the new government was appointed in October 2020,  several 
representatives of the police were replaced: the Head of Border Police Directorate, the Head 
of the Sector for Human Resources, the Head of the Criminal Police Directorate, the Head of 
Department  for  Fight  against Organised Crime, the Head of the Sector for  Internal  Control, 
the  Head  of  Anti-corruption  Department  as  well  as  the  heads  of  several  regional  police 
directorates.  

Media relations, including press releases on ongoing operations, are still managed mainly by 
politicians  and  representatives  of  the  Ministry  of  Interior  and  not  by  the  prosecution  and/or 
the police. It is of concern that there were a series of media appearances and press conferences 
of  politicians  or  representatives  of  the  executive  who  have  repeatedly  made  confidential 
information  on  ongoing  investigations  of  high-profile  organised  crime  cases  public.  No 
official public statements from the organised crime prosecution office were rendered.  

In  December  2020,  legislation  on  digital  assets  was  adopted.  Serbia  thus  became  the  first 
country  in  the  region  to  have  a  special  law  regulating  virtual  currencies  and  digital  tokens. 
The adoption of this law also triggered amendments to the anti-money laundering legislation.  

Serbia is still reporting to Moneyval about the implementation of the outstanding 2016 Mutual 
Evaluation  Report  (2016  MER)  recommendations,  with  a  next  compliance  report  to  be 
expected by end of 2021. In December 2020, the Financial Action Task Force (FATF) found 
that  the  July  2020  decision  of  the  Ministry  of  Finance’s  Directorate  for  the  Prevention  of 
Money Laundering (APML) to request access to the bank records of a number of journalists 
and  CSOs  was  not  in  line  with  FATF  standards.  In  its  plenary  session  of  April  2021,  the 
Committee  of  Experts  on  the  Evaluation  of  Anti-Money  Laundering  Measures  and  the 
Financing  of  Terrorism  of  the  Council  of  Europe  (MONEYVAL)  called  on  all  members  to 
ensure  that  the  FATF  Recommendations  are  not  intentionally  or  unintentionally  used  to 
suppress  the  legitimate  activities  of  civil  society  (see  further  under  civil  society).  APML 
clarified that no investigation was conducted but only a request for information in the context 
of the preparation of the national risk assessment was made. According to APML, requests to 
the banks were part of a strategic analysis of a wider risk assessment concerning any potential 
criminal  activity  and  not  only  terrorism.  APML  also  provided  information  on  the  selection 

43 

 
 
criteria  used  for  selection  of  the  NGOs.  However,  APML  (likewise  other  law  enforcement 
bodies) should improve its communication skills towards media and public.  

Serbia has in place a well-functioning central record of beneficial owners. In order to ensure 
accuracy of the information contained in the central records, the Serbian Business Registers 
Agency (SBRA) has filed about 1 900 motions against legal entities that failed to provide the 
information on the beneficial owner. 

Overall,  the  fight  against  money  laundering  and  financing  of  terrorism  should  focus  on  the 
sectors  mostly  at  risk  for  money  laundering,  including  the  financial  sector  as  well  as 
designated non-financial business and professions (e.g. casinos, lawyers, notaries, real estate 
agents,  change  offices,  etc.).  Unusual  proliferation  of  assets  or  money  administration 
inconsistent  or  not  proportionate  with  the  regular  business  practices  should  be  subject  to 
preventive control in order to detect links with criminal activities.     

The Ministry of the Interior’s financial investigation unit carries out the functions of an Asset 
Recovery Office (ARO) related to the exchange of police data in line with the EU acquis. The 
unit  is  still  being  set  up.  In  order  to  make  the  ARO  fully  functional,  legislation  on  records, 
data  processing  and  on  keeping  records  on  received  requests  from  abroad  needs  to  be 
amended.  The  office  needs  to  have  access  to  all  relevant  Serbian  databases.  The  agreement 
with the tax administration was finalised. The office has a total of 64 positions allocated to it, 
62  of  which  were  filled  in  May  2021.  The  fact  that  the  ARO  office  is  not  fully  operational 
raises  concerns  in  respect  to  the  efficiency  and  effectiveness  in  seizure  and  confiscation  of 
proceeds from crime and more broadly the fight against organised crime. 

The  centralised  case  management  system  for  prosecutors  (SAPO)  needs  to  be  fully 
operational and running. This also negatively affects the full capacity of the SIDDA/SIDNA 
investigative software, which does not receive all relevant data. The establishment of a single 
centralised criminal intelligence system, advanced further in terms of technical preparations. 

Implementation and enforcement capacity  

As  regards  the  track  record  in  organised  crime,  the  data  provided  by  Serbia  show  a 
decrease in new investigations initiated into organised crime groups: against 110 individuals 
in 2020, compared to 156 in 2019, 146 in 2018 and 191 in 2017. The number of indictments 
increased  compared  to  2019  (108  persons  were  indicted  in  2020,  compared  to  65  in  2019). 
The number of first instance convictions in 2020 decreased compared to 2019: in 2020 first 
instance  convictions  were  rendered  against  127  individuals  (out  of  which  81  were  plea 
agreements  accepted  by  the  courts)  compared  to  167  in  2019  (out  of  which  42  were  plea 
agreements  accepted  by  the  courts.  Final  convictions  in  2020  were  rendered  against  72 
individuals (out of which 69 were plea agreements accepted by the courts).  

There is a delay in setting up a working group with a view to carrying out a comprehensive 
analysis of the effectiveness of the criminal legal system in order to increase the track record 
in organised crime cases; deadline in the action plan is Q4 2020.  

The use of plea agreements needs to be carefully balanced against the need for justice being 
seen  to  be  done  and  avoiding  any  impression  of  impunity  in  serious  and  organised  crime 
cases.  

There is well-established cooperation with Interpol and Europol. The secure communication 
channel SIENA is operational. Its use is continuously increasing and remained on a high level 
from 2018 onwards. The deployment of a Europol Liaison Officer to Serbia – in the context 
of a pilot project to deploy three such officers to the region - could not take place within the 

44 

 
 
 
timespan  of  the  project  due  to  difficulties  in  finalising  the  accreditation  procedure.  Thus, 
Europol  in  December  2020  decided  to  discontinue  the  project  for  Serbia.  Serbia  further 
intensified  its  participation  in  EMPACT  (the  European  Multidisciplinary  Platform  against 
Criminal  Threats)  for  the  period  2018-2021.  Serbia  is  using  SOCTA  to  set  operational 
priorities in order to fight organised crime (SOCTA). 

Cooperation between Serbia and the EU Agency for Law Enforcement Training (CEPOL) is 
well established and based on a working arrangement. A dedicated contact point is in place. 
Serbia  has  full  access  to  the  CEPOL  Exchange  Programme  as  well  as  to  the  free  of  charge 
electronic learning system of CEPOL. 

As  regards  the  fight  against  money  laundering,  the  number  of  convictions  for  money 
laundering  decreased  compared  to  2019.  In  2020,  there  were  convictions  against  11 
individuals, compared to 71 in 2019.  

The number of cases where seizure and confiscation of assets occurs is still limited, and the 
amounts continue to be very low (in 2020, two requests for permanent confiscation of assets 
were accepted by the courts against four persons). The criminal procedure code (CPC) and the 
2016 law on seizure and confiscation of proceeds of crime (LSCPC) do not draw a clear line 
between the systems of direct confiscation (“material gain” under the CC/CPC) and extended 
confiscation  (“assets”  under  the  LSCPC).  A  serious  limitation  to  the  application  and 
effectiveness of the LSCPC lies in the fact that it only applies to a limited number of criminal 
offences and only if a certain threshold of material gain is reached. Third party confiscation is 
not systematically applied also because the LSCPC foresees for its application the cumulative 
(and not alternative) presence of both (a) transfer of assets for a manifestly inadequate price 
and  (b)  in  any  case  with  the  aim  of  preventing  the  seizure.  Furthermore,  the  law  does  not 
foresee a rebuttable presumption of fraudulent transaction (thus liable to third-party extended 
confiscation)  when  assets  are  transferred  from  the  accused  to  a  close  family  member.  The 
above provisions reduce the effectiveness of extended confiscation. 

In  practice,  to  establish  the  disproportion  between  assets  and  lawful  income,  prosecutors, 
financial forensic experts and the Financial Investigation Unit frequently rely on open source 
databases  such  as  the  cadastre,  tax  administration,  or  city  heating.  This  approach  does  not 
involve  a  full  forensic  analysis  of  defendants’  properties  and  hardly  provides  an  accurate 
picture of a defendant’s lifestyle. The lack of an in-depth investigation or a lifestyle analysis 
may fail to reveal expenses by the defendant (e.g. travels, buying of movable goods, etc.) that 
may  increase  the  disproportion  between  the  defendant’s  lawful  income  and  the  assets  s/he 
owns. The proactive role of the judges in following and encouraging this approach is therefore 
essential.   

There were no individuals convicted for trafficking in human beings within the context of 
organised crime (one in 2019), but 36 convictions through plea agreements for illegal crossing 
of  state  border  and  smuggling  of  persons.  It  is  essential  to  ensure  adequate  protection  of 
victims  of trafficking  in  human beings during trials,  including  granting them  the status  of a 
particularly sensitive witness. This is important not only to avoid re-victimisation but also to 
collect information to prove either force, threating or exploitation as required by the criminal 
code for this offense.    

In March 2021, the Constitutional Court passed a landmark decision in a trafficking in human 
beings case. It rules that the state had violated its obligation to protect victims of trafficking 
(through registration, assistance and proper preventive action/s) as well as its duty to conduct 
a proper investigation, ensuring respect of the right to a fair trial, by extensively referring to 
international and human rights standards.  

45 

 
 
Serbia is implementing the strategy for the prevention and suppression of trafficking in human 
beings for 2017-2022, which has a focus on the protection of women and children. There is a 
delay in drafting the related action plan for the period 2021-2022. The centre for protection of 
victims of human trafficking is operational. The shelter segment of the centre is not functional 
since  August  2020,  lacking  the  necessary  licence.  Currently  only  a  civil  society  managed 
shelter  provides  support  to  girls  and  women.  Although  legally  possible,  compensation  to 
victims  is  rarely  granted,  as  there  is  no  official  scheme  or  fund  for  this.  The  most  common 
type  of  exploitation  remains  sexual  exploitation,  followed  by  labour.  There  is  to  date  no 
official set of indicators to identify victims. 

In  2020,  there  were  no  individuals  convicted  for  weapon-related  offences  (including 
trafficking in weapons) in the context of organised crime (one in 2019). The strategy and its 
accompanying action plan for small arms and light weapons control (2019 - 2024) are being 
implemented,  as  well  as  related  international  obligations  arising  from  the  roadmap  for  a 
sustainable solution to the illegal possession, misuse and trafficking of small arms and light 
weapons  (SALW)  and  their  ammunition  in  the  Western  Balkans.  The  Serbian  authorities’ 
capacities for marking of imported and deactivated firearms in Serbia significantly improved 
as  well  as  the  capacities  of  the  Ministry  of  the  Interior’s  ballistic  laboratory.  The  Firearms 
Focal Point was established in a virtual modality through the decision of the Minister. Serbia 
demonstrated a good track-record with a high number of weapons voluntarily surrendered to 
the authorities. 

The  strategy  and  action  plan  for  the  fight  against  cybercrime  are  being  implemented.  The 
operational capacity of the special prosecutor’s office for cybercrime was further strengthened 
through  training.  International  cooperation  through  Eurojust  in  order  to  effectively  address 
cybercrime  was  further  strengthened.  Human  resource  capacities  for  investigations  of  credit 
card, e-commerce, and e-banking abuses and for combating illicit and harmful content on the 
internet further improved. Efforts are also ongoing to raise awareness of the professional and 
general public on dangers of cybercrime and its impact on society. During 2020, cybercrime 
investigations/evidentiary actions were undertaken against 202 persons, indictments acts were 
filed against 61 defendants and 49 convictions were rendered. Concerning showing, procuring 
and 
pornography, 
investigations/evidentiary actions were commenced against 30 persons. Against 18 defendants 
indictment was filed. The courts rendered convictions against 23 defendants.  

pornographic  material 

and  minor 

possession 

person 

of 

In 2020, Serbia was involved in 16 cases related to organised crime opened at Eurojust, which 
included  participation  in  two  coordination  meetings  and  one  coordination  centre.  It  also 
participated  in  three  joint  investigation  teams  set-up  in  cases  related  to  drug  trafficking  (3), 
money laundering (1) and organised crime (1). 

Cooperation in the field of drugs  

Institutional set-up and legal alignment  

The national drug strategy expires at the end of 2021 and an action plan for the period 2018 - 
2021 has not yet been adopted. The Serbian National Drug Observatory is now fully staffed 
and  operational.  Serbia  regularly  updates  and  publishes  reliable  information  on  new 
psychoactive  substances.  The  coordination  role  and  responsibilities  of  the  Office  for 
Combatting  Drugs  are  still  not  clearly  delineated  with  regard  to  other  state  institutions.  A 
working  arrangement  between  the  European  Monitoring  Centre  for  Drugs  and  Drug  Abuse 
Addiction (EMCDDA) and the Office for Combatting Drugs, the Ministry of the Interior and 
the Ministry of Health was signed in December 2020. Serbia has a relatively well-established 
Early Warning System (EWS) to liaise with the EMCDDA on new psychoactive substances 
and  new  trends.  This  also  applies  to  the  the  associated  risk  assessment  procedure  and  the 

46 

 
 
subsequent  control  mechanism  for  adding  new  psychoactive  substances  (NPS)  to  national 
drug control legislation. Therefore, Serbia appears to be ready to be linked to the EU EWS as 
an associate/external partner.  

The Serbian National Drug Observatory (NDO) benefitted in 2020 from additional full-time 
staff members, which led to some progress made on the three core functions carried out by a 
the National Drug Observatory: data collection; monitoring, analysis and interpretation of the 
data collected and reporting and dissemination. Serbia is submitting data upon request and in 
the  framework  of  the  data  collection  exercises,  although  data  collection,  analysis  and 
reporting  are  yet  to  be  fully  aligned  with  the  requirements  and  the  methodology  of  the 
EMCDDA.  

The current legislation still requires that entire seized quantity is kept as material evidence for 
court  proceedings.  A  national  contact  point  for  the  transmission  and  analysis  of  samples  of 
psychoactive controlled substances is not yet established, though the Rulebook that regulates 
its work was adopted in December 2020.  

Implementation and enforcement capacity  

In  2020,  34  individuals  were  convicted  at  first  instance  for  unlawful  production  and 
circulation  of  narcotics  (art.  246  criminal  code)  within  the  context  of  organised  crime 
(including  17  through  plea  agreements).  16  individuals  were  convicted  at  final  instance 
(including 13 through plea agreements). 

During the second half of 2020, a total of 3.6 tonnes of various substances (including 31 kg of 
heroin  were  confiscated,  compared  to  4.5  tonnes  (including  109  kg  of  heroin)  during  the 
second half of 2019. There were no destructions of seized psychoactive controlled substances 
in 2020.  

In September 2020, the National Forensic Centre laboratories renewed the accreditation status 
during  the  supervisory  visit  of  the  European  Network  of  Forensic  Science  Institutes’ 
accreditation  body.  In  January  2021,  Serbia  started  to  implement  the  software  application 
‘operational  drug  records’  for  keeping  records  and  conducting  statistical  analyses  of  seized 
drugs on a regular basis. The software allows for daily updates on quantities of seized drugs, 
and  ensures  e-communication  with  the  National  Forensic  Centre  on  seized  drugs.  ‘Security 
bags’ were introduced preventing any tempering with collected evidence. Since January 2002, 
seized drugs are stored in line with clear conditions – based on a legal instruction - and in a 
centralised manner in five containers.  

The  Government  is  delayed  in  developing  a  programme  for  the  prevention  of  the  use  of 
psychoactive  substances  based  on  scientific  evidence  in  alignment  with  international 
standards.  

Fight against terrorism  

Institutional set-up and legal alignment  

Serbia  has  a  national  strategy  for  the  prevention  and  fight  against  terrorism  (2017  –  2021). 
The regular monitoring and reporting mechanism on the implementation of the strategy is still 
not  fully  functional.  The  strategy  has  yet  to  be  extended  in  order  to  cover  all  forms  of 
radicalisation  and  violent  extremism  (irrespective  of  political,  religious  or  ethno-nationalist 
root causes). Activities aimed to prevent political extremism and ethno-nationalist extremism, 
including the ones to be conducted in collaboration with civil society organisations, are still 
not forseen in the national strategic framework and almost inexistent in the field. 

47 

 
 
The  validity  of  the  Joint  Action  Plan  on  counter-terrorism  for  the  Western  Balkans6  was 
extended to  beyond 2020 by the EU-Western  Balkans Justice and Home Affairs Ministerial 
Meeting  in  October  2020,  aiming  at  fully  implementing  all  actions  included  in  the  bilateral 
implementing  arrangement  between  Serbia  and  the  European  Commission.  A  single  contact 
point  for  this  arrangement  was  appointed  in  2020.  However,  the  mechanism  to  monitor  the 
implementation  and  review  of  the  National  Strategy  for  Prevention  and  Suppression  of 
Terrorism and the Action Plan is not yet fully functional. 

By-laws for the implementation of the Law on critical infrastructure have yet to be finalised. 
The law on the national database for the prevention and fight against terrorism was adopted 
by Parliament on 10 June 2021. An action plan as regards returning foreign terrorist fighters 
and members of their families to the territory of Serbia was adopted.  

Implementation and enforcement capacity  

In 2020, there were no convictions for terrorist associations or financing of terrorism. There 
were also no convictions for recruiting and training in order to commit terrorist acts or public 
inciting  to  commit  terrorist  offences.  No  criminal  charges  were  filed  for  terrorist-related 
crimes. Numerous cases related to these criminal offences are in the pre-investigation phase. 
Progress  has  been  achieved  regarding  development  of  tolls  and  instruments  to  address 
radicalisation in prisons.   

No measures were undertaken to prevent and address violent extremism in sport. Nothing has 
been  done  to  explore  possible  connections  between  right-wing  extremism  and  football 
hooliganism.   

There  is  no  systemic  response  from  state  authorities  in  addressing  far-right  groups’  actions. 
The lack of response was also criticised by the Ombudsperson7.  

Additional  efforts  to  investigate  and  prosecute  organisers  of  foreign  fighters  (criminalised 
since October 2014 under the chapter “Criminal  offences against  humanity and other rights 
guaranteed by international law” of the Criminal Code) traveling to Ukraine are necessary. In 
addition,  the  public  should  be  provided  with  accurate  and  official  information  about 
proceedings  against  foreign  fighters.  In  March  2021,  the  Balkan  Investigative  Network 
(BIRN)  launched  a  database  containing  court  verdicts  (from  2007-  2020)  handed  down  in 
Albania,  Bosnia  and  Herzegovina,  Montenegro,  North  Macedonia  and  Serbia  for  domestic 
terrorism and for going abroad to fight in the conflicts in Syria and Ukraine.  Serbian courts 
convicted  16  people  for  going  to  fight  in  Ukraine.  All  the  trials  ended  in  plea  bargains  and 
suspended sentences. 

Serbia  remains  a  reliable  cooperation  partner  for  Europol  and  Eurojust.  Serbia  updates 
Europol  on  the  foreign  fighters’  list  and  terrorism  related  incidents  and  effectively  uses  CT 
SIENA.  Cooperation  with  EUROPOL  has  started  on  addressing  terrorist  content  online. 
Serbia continues participating in the Integrative Internal Security Governance mechanism.  

Legal and irregular migration  

Institutional set-up and legal alignment  

Responsibilities for managing migration are shared between the Ministry of the Interior, the 
Commissariat for Refugees and Migration, the Ministry of Labour, Employment, Veteran and 

6 https://ec.europa.eu/home-affairs/system/files/2018-10/20181005_joint-action-plan-counter-terrorism-
western-balkans.pdf 
7  The  Ombudsperson  requested  from  the  Ministry  of  the  Interior  to  “provide  information  on  how  the  police 
intelligence model was applied in these cases, and what measures and actions have been taken regarding the fact 
that members of these organisations invoking xenophobia, racial and religious discrimination”. 

48 

 
 
                                                           
Social Affairs, the Ministries of Foreign Affairs, of Justice, of Defence and the Ministries of 
Health and Education, Science and Technological Development.  

In  line  with  the  strategy  on  migration  management,  the  Working  Group  for  Monitoring 
Migration,  chaired  by  the  Commissariat  for  Refugees  and  Migration,  functions  as  an 
operational  network  of  all  institutions  with  competences  in  the  field  of  migration.  It  meets 
regularly,  exchanges  relevant  information,  assesses  changes  in  migration  policies  and 
monitors the implementation of migration policies through an established list of indicators. 

In  November  2020,  Serbia  introduced  a  unique  administrative  place  for  submitting  a  joint 
request with the accompanying evidence required for a residence permit or issuance of a work 
permit, thus simplifying and accelerating the administrative procedure while respecting legal 
provisions  and  institutional  competences.  In  order  to  be  fully  aligned  with  the  EU  acquis, 
Serbia still needs to  change the joint request into a single one.  Since April 2021, temporary 
residence permits can also be introduced electronically. 

In  September  2020,  the  Ministry  of  the  Interior  adopted  new  standard  operating  procedures 
for the treatment of migrants and persons who express their intention to apply for asylum.  

The  EU-Serbia  readmission  agreement,  in  force  since  January  2008,  is  facilitated  by 
implementing  protocols  concluded  with  20  EU  Member  States.  Serbia  has  11  bilateral 
readmission  agreements,  including  with  Bosnia  and  Herzegovina,  North  Macedonia  and 
Montenegro. Negotiations to sign readmission agreements with Ukraine, Azerbaijan, Turkey, 
Georgia, Belarus and Argentina are ongoing. 

There  are  altogether  eight  strategies,  which  are  relevant  for  migration  and  border 
management.  Monitoring  is  ensured,  and  relevant  statistics  alongside  reports  on  the 
implementation of policies are published on an annual basis.  

The high-level Working Group to Manage Mixed Migration was reappointed in early 2021. 

Implementation and enforcement capacity  

The Western Balkan migratory route continues to be firmly established and to exert pressure 
on the entire region. In 2020, according to the Commissariat for Refugees and Migration, in 
total  63 408  migrants  passed  through  the  reception  and  asylum  centres  which  represents  an 
increase of 84% in comparison to 2019. The length of the average stay went down to 36 days. 
The average occupation per day of the centres in 2020 was 5 993 persons. The Ministry of the 
Interior reported for the  same period an increase  of nearly 150% of the number of irregular 
migrants  apprehended  within  the  territory,  namely  from  13 512  in  2019  to  33 772  in  2020. 
The main countries of origin were Afghanistan, Syria and Pakistan.  

Serbian authorities continued to strengthen the capacity for the accommodation and care for 
migrants under consideration of their specific vulnerabilities due to the COVID-19 pandemic.  

In 2020, 22 560 individuals were intercepted at the border; in the same period, 127 criminal 
charges (including 5 against 5 organised crime groups) were filed for 132 criminal offenses, 
involving  176  perpetrators  (56  members  of  organised  criminal  groups)  suspected  of  people 
smuggling. 

In 2020, 1 544 misdemeanour charges were filed for committing violations of illegal crossing 
of the state border, i.e. illegal stay, and 12 547 decisions on return were made. 

Cooperation with Europol’s European Migrant Smuggling centre is daily and takes place on 
several  levels,  including  through  EMPACT.  Serbia  participated  in  several  international 
operations combating irregular migration and trafficking in human beings.  

49 

 
 
As  regards  the  accommodation  of  migrants,  the majority  are  hosted  in  the  19  governmental 
reception  facilities  (asylum  centres,  reception  and  transit  centres)  with  a  capacity  of  overall 
6 000 places  (plus 10 % contingency). A limited number of irregular migrants  with  a return 
perspective  are  hosted  in  the  closed  shelter  in  Padinska  Skela,  which  has  a  capacity  of  50 
places.  Two  mobile  shelters  for  receiving  migrants  at  the  entry  points  in  Plandište  and 
Dimitrovgrad are, although finalised, still not operational.   

Migrants  in  the  centres  are  receiving  accommodation  and  protection  services.  Vulnerable 
groups  are  identified  and  social  protection  services  are  available.  The  majority  of 
unaccompanied  or  separated  children  are  hosted  in  the  reception  facilities  while  those  who 
require  special  attention  and  specific  care  are  hosted  in  specialised  institutions.  Migrant 
children  are  offered  education  through  inclusion  in  the  national  schooling  system.  Migrants 
are  provided  with  health  services  in  the  reception  centres  and  through  the  public  health 
system, funded by the EU.   

Serbia  has  a  programme  for  voluntary  return  support  to  foreigners  for  2019-2021  including 
funding for information and identification of potential returnees in place. With the support of 
the EU and Member States, the  International  Organisation  for Migration (IOM) implements 
the  Assisted  Voluntary  Return  and  Reintegration  (AVRR)  programme  pursuing  capacity 
building  of  Serbia’s  return  system  and  facilitating  access  to  Assisted  Voluntary  Return.  In 
2020, 61 migrants applied for assisted voluntary return, and 67 were returned to their country 
of origin, among them, 14 to Iraq, 13 to Tunisia, 7 to Algeria, 6 to Iran, 4 to Afghanistan.  

The Ministry of the  Interior is  in  charge of forced return.  It  did  not  return migrants  to  their 
country  of  origin  in  accordance  with  readmission  agreements.  92  migrants  were  returned  to 
their country of transition (Bulgaria, Montenegro and Romania). 150 migrants were returned 
to  the  territory  of  Serbia  in  accordance  with  bilateral  agreements.  The  lack  of  enforceable 
bilateral  readmission  agreements  with  third  countries  is  a  serious  obstacle  for  Serbia  to 
manage returns effectively.  

The  implementation  of  the  EU-Serbia  readmission  agreement  is  satisfactory.  Serbia  has 
considerably improved its implementation of the third country national provision since 2018. 
6 265 persons were ordered to leave in 2020, and 8 375 persons in 2019, as well as 7 295 in 
2018. 3 250were returned following an order to leave in 2020 (a return rate of 51%) and 5270 
in 2019 (63%).  

Human  resource  capacities  for  the  closed  centres  in  Padinska  Skela,  Plandište  and 
Dimitrovgrad  increased.  Human  resource  capacities  in  the  Commissariat  for  Refugees  and 
Migration foreseen are not filled, while staffing in the reception centres is fully dependent on 
external (EU) funding.  

The  Serbian  authorities  have  not  yet  accepted  the  resettlement  of  any  refugees  from 
Afghanistan. In respect to migration figures, Afghans remain one of the main nationalities in 
transit  mainly  to  Romania  and  Hungary.  On  15  September,  reception  centres  hosted  4602 
migrants  of  which  30%  (1400)  were  of  Afghan  origin.  Of  the  10  828  irregular  migrants 
apprehended within Serbia’s territory between January and mid-September 2021, 27% (2961) 
are of stated Afghan origin. 

Asylum 

Institutional set-up and legal alignment  

The Asylum Office, a separate unit within the  Border Police Directorate  decides on asylum 
claims  at  first  instance.  Appeals  against  its  decisions  can  be  submitted  to  the  Asylum 
Commission and subsequently to the Administrative Court of Appeal as a final instance. The 

50 

 
 
Asylum Commission is composed of representatives of different line ministries, including an 
independent  expert  and  chaired  by  a  representative  of  the  Ministry  of  the  Interior.  The 
Asylum  Commission  rendered  a  record  of  62  decisions,  but  none  of  them  granted 
international protection and only 10 appeals were upheld (i.e. the cases were referred back to 
the  Asylum  Office).  The  third  appeal  authority,  the  Administrative  Court,  rejected  all 
complaints. No hearing of applicants was carried out by the  appeal authorities. The Asylum 
Commission and Administrative Court did not exert corrective influence over the decisions of 
the Asylum Office.  

The Commissariat for Refugees and Migration is the state authority responsible for receiving 
and  accommodating  asylum  seekers,  managing  asylum  centres  and  integrating  people  who 
were granted international protection.  

Serbia’s legal framework is largely aligned with the EU acquis. Serbia needs to further adapt 
its legislation notably as regards effective ‘access to the procedure’ (Article 36 of the law on 
asylum  and  temporary  protection),  ‘appeal  bodies’  (Article  21),  ‘rights  and  obligations  of 
applicants/persons  under  international  protection’  (Articles  48-73),  ‘free  legal  aid’  (Article 
56), and ‘safe third country procedure’ (Article 45). 

Implementation and enforcement capacity 

The  number  of  persons  holding  a  registration  certificate  significantly  dropped  from  around 
12 900  registration  certificates  in  2019  to  only  2 813  certificates  in  2020.  Registration  of 
asylum seekers was suspended for almost three months, during the state of emergency. Out of 
the 2 813 persons who obtained a registration certificate, only 145 persons officially lodged 
an asylum application (compared to 174 in 2019).  

In 2020, 373 decisions (2019: 219) were made for a total of 353 asylum seekers (2019: 287). 
Some 17 asylum seekers received refugee status (2019: 17), 12 received subsidiary protection 
(2019:  17).  Some  73  asylum  seekers  (2019:  77)  had  their  asylum  request  rejected  (i.e. 
declared inadmissible). In 82 cases (2019: 130) concerning 106 asylum seekers (2019: 161), 
the procedure was discontinued because the applicant absconded.  

The Asylum office has a continuous presence only in two out of five asylum centres with one 
police  officer.  The  low  number  of  applications  to  the  asylum  procedure  as  compared  to  the 
declarations  of  intention  highlight  the  fact  that  Serbia  is  still  a  transit  country.  At  the  same 
time,  access  to  and  provision  of  information  regarding  the  asylum  procedure  needs  to  be 
improved,  as  well  as  access  to  information  and  legal  counselling  for  asylum  seekers  at 
Belgrade international airport, where transit procedures, envisaged by the law on asylum, are 
not yet being implemented. 

The Constitutional Court confirmed in a ruling in December 2020 the collective expulsion of 
17 Afghans in 2017 from Serbia to Bulgaria.  

The  Head  of  the  Asylum  Office  was  changed  twice  in  the  fourth  quarter  of  2020. 
Inconsistency  in  the  decision-making  process  regarding  similar  cases  and  the  length  of  the  
asylum  procedure  are  still  problematic.  The  Asylum  Office  demonstrated  good  practices, 
especially in relation to unaccompanied and separated children. For the first time in 2020, a 
family reunification procedure was carried out in Serbia. Despite some staff instability in the 
Asylum  Office,  effectiveness  is  demonstrated  in  more  timely  conduct  of  interviews. 
Additional capacity building for the Asylum Commission and the specialisation of judges in 
the Administrative Court could improve legal certainty. There is no state funded free legal aid 
in the asylum procedure. Two positions of translators in the Asylum Office were filled as of 
2021. 

51 

 
 
Serbia  has  a  fully  functioning  biometrics  database  and  a  system  for  automated  fingerprint 
identification  (AFIS)  used  within  the  Ministry  of  the  Interior,  including  for  the  purpose  of 
registering irregular migrants and asylum seekers. The preparations for EURODAC in Serbia 
focus on internal connectivity of databases, connection to the central EURODAC server and a 
satisfying  level  of  automatisation  in  order  to  create  an  efficient  registration  procedure. 
Currently  all police stations, but  not  all border crossing points, in  Serbia have access  to  the 
AFIS system.  

In  accordance  with  the  Law  on  Asylum  and  Temporary  Protection,  the  Commissariat  for 
Refugees  and  Migration  provides  material  conditions  for  the  reception  of  asylum  seekers. 
There are five centres for asylum with a total capacity of 1700 places. Reception conditions 
are regularly monitored  in  view of the EASO guidance on reception conditions.  95% of the 
relevant standards are reached. 

2 778  unaccompanied  or  separated  children  were  accommodated  in  Serbian  centres,  an 
increase of around 20% compared with 2019, while the duration of their stay further declined. 
An  average  of  360  unaccompanied  or  separated  children  were  present  in  Serbia  (max.  691, 
min.133) during 2020 out of which 122 were accommodated in social welfare institutions for 
specialised  and  tailor-made  services.  Social  protection  services  as  foreseen  by  the  law  are 
currently funded by the EU and implemented through the national social protection system.  

With  regard  to  integration,  implementing  legislation  in  different  sectors  needs  to  be 
harmonised  with  the  law  on  asylum  and  temporary  protection  to  provide  persons  granted 
international protection with effective access to socioeconomic rights. Biometric IDs and an 
earlier access to the labour market could improve integration perspectives.  

Funds necessary for integration programs for persons granted the right to asylum are provided 
in the budget on an annual basis. The budget provided for 2020 were sufficient to cover the 
current needs. 

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

The Ministry of the Interior and the Commissariat for Refugees and Migration cooperate with 
the European Asylum Support Office (EASO) on the basis of comprehensive roadmaps. The 
second roadmap for cooperation between Serbia and EASO 2020-2022 is being implemented. 
Serbia was granted observer status in the reception network organised by EASO. A European 
migration liaison officer, responsible for the entire region, operates from Belgrade. 

Visa policy 

The  Serbian  visa  issuing  system  is  partially  in  line  with  the  EU  visa  code.  For  further 
compliance,  Serbia  has  to  adjust  visa  procedures  and  visa  regimes  with  relevant  EU 
regulations.    The  Visa  Information  System  is  operational  in  all  diplomatic  missions  and 
consular posts. The issuing of visas at the state border crossing points is exceptional.  

Serbia’s visa policy is  still not aligned with  the EU´s list  of third countries  whose nationals 
are  visa  exempt  or  visa  required.  Nationals  from  the  following  countries  require  visas  for 
entry  to  the  Schengen  area  while  they  enjoy  visa-free  entry  Serbia:  Armenia,  Azerbaijan, 
Bahrain,  Belarus,  Bolivia,  Burundi,  China,  Cuba,  Guinea  Bissau,  India,  Indonesia,  Jamaica, 
Kyrgyzstan,  Kuwait,  Kazakhstan,  Mongolia,  Oman,  Qatar,  Russia,  Suriname,  Tunisia  and 
Turkey. 

52 

 
 
The  Commission’s  visa  suspension  mechanism  report8  of  August  2021  recommended  to 
further  align  Serbia’s  visa  policy  with  the  EU  lists  of  visa-required  third  countries,  in 
particular as regards those third countries which present irregular migration or security risks 
for the EU.  

The report also recommended that further efforts are needed in the areas of integrated border 
management,  anti-money  laundering,  counter-terrorism  and  in  the  prevention  and  fight 
against corruption and organised crime. 

Schengen and external borders  

Institutional set-up and legal alignment 

The Border police is a specialised civilian body and is part of the General Police Directorate 
within  the  Ministry  of  the  Interior.  It  has  eight  regional  centres  and  47  local  stations 
responsible for border surveillance as well as 40 stations for border control at the 94 border 
crossing points.  

Issues related to the state borders are regulated in the law on border control. A document on 
standardisation and management of border crossing points as well as staffing needs is pending 
adoption.  There  is  no  specific  strategic  document  addressing  the  surveillance  of  the  green 
border.  

The legal framework for border control is largely harmonised with the EU acquis. Continuous 
activities on further legal harmonization and implementation of EU requirements are needed. 

The  Integrated  border  management  (IBM)  strategy  2016-2020  needs  to  be  up-dated  and 
brought in line with the new EU policy on IBM and a new Action Plan needs to be adopted. 

The Coordination Body for monitoring the IBM Strategy and Action Plan directs the work of 
state administration authorities, and coordinates the work of existing and newly opened border 
crossing points in  Serbia.  It  monitors the implementation  of the  IBM Strategy and proposes 
the adoption of new and corrective measures through an annual revision of the Action Plan for 
implementation of the IBM Strategy in Serbia. The coordination mechanism is supported by 
the Border Police Directorate in the implementation of administrative and technical tasks and 
continued its activities in 2020. It was instrumental in ensuring coordination of measures that 
were put in place to prevent spreading of the COVID-19 virus.  

The  preparations  of  the  Schengen  Action  Plan  (SAP)  were  interrupted  in  2020  and  were 
continued in February 2021.  

A  Coordinating  Body  for  setting  up  Advanced  Passenger  Information  (API)  and  Passenger 
Name Record (PNR) systems in Serbia, was created and held its first session. 

A draft decree on the conditions that have to be met by the border crossing points in terms of 
premises,  equipment,  infrastructure,  sufficient  number  of  employees  and  other  material  and 
technical  equipment  necessary  for  the  proper  functioning  of  border  crossing  points  is  still 
pending adoption. 

Implementation and enforcement capacity 

Implementation  of  the  IBM  strategy  is  on  a  satisfactory  level.  Interagency  cooperation  is 
established  and  functioning.  A  common  training  programme  and  common  risk  analysis  is 
prepared and implemented.  

8 COM(2021) 602 final 

53 

 
 
                                                           
Additional efforts are needed in the area of staffing and vacancies in the border police. Border 
police Risk analysis units should be strengthened at the regional and local level. There is also 
a  need  for  additional  administrative  capacities  on  the  national  level  related  to  the 
implementation of the IBM and SAP strategies and action plans. 

Significant  investment  is  needed  in  the  area  of  border  control,  in  terms  of  human,  financial 
and  technical  resources  (second-line  checks,  border  surveillance  and  equipment  for  the 
detection of forged documents) as well in infrastructure at the border crossing points.  

Serbia should also enhance the capacities of the border police information system following 
latest  EU  requirements  on  this  field  and  in  view  of  achieving  interoperability  with  the  EU 
border management information systems. 

Training standards for the Border Police need to be further implemented in accordance with 
relevant  curricula  and  recommendations  provided  in  the  Schengen  Catalogue  on  External 
Borders Control, Removal and Readmission.  

Inter-agency  cooperation,  such  as  between  the  border  police  and  customs  at  the  border 
crossing  points,  is  satisfactory.  Further  improvements  are  needed  especially  on  information 
exchange  through  mutual  access  to  databases  and  a  formalised  and  secure  information 
exchange system.  

Serbian  authorities  have  established  solid  cooperation  links  with  the  European  Border  and 
Coast Guard Agency (Frontex). The status agreement with the EU that allows the European 
Border and Coast Guard Agency (Frontex) to deploy teams of the European Border and Coast 
Guard standing corps at the Serbian-Bulgarian border entered into force on 1 May 2021 and 
joint operations started on 16 June 2021.  

Based  on  the  Convention  on  Police  Cooperation  in  Southeast  Europe,  the  Ministry  of  the 
Interior  established  direct  cooperation  with  all  neighbouring  countries.  Cooperation  with 
neighbouring  countries  in  joint  patrols  was  suspended  in  April  2020  due  to  the 
epidemiological  situation  linked  to  COVID-19.  Information  exchange  takes  place  through 
joint  contact  centres.  Serbia  also  receives  assistance  for  capacity  building  and  border 
management from EU Member States.  

Bilateral  agreements  with  North  Macedonia  were  signed  on  combatting  migrant  smuggling 
and trafficking in human beings.  

In 2020, 50 control activities were performed in the organisational units of the Border Police 
Directorate.  The  Internal  Control  Unit  of  the  Ministry  of  the  Interior  filed  criminal  charges 
against 21 border police officers linked to corruption. A corruption risk analysis on the Border 
Police still needs to be carried out. 

The Interim IBM common crossing-points with Kosovo continue to be operational. Only two 
of the six permanent  Common Crossing Points (CCPs) have been established (Merdare  and 
Mutivodë/Mutivode)  (See  section  5  on  the  normalisation  of  relations  between  Kosovo  and 
Serbia).  Facilities  of  two  EU-funded  crossing  points  Merdare  and  Mutivodë/Mutivode  are 
ready. However, at the later Serbian authorities are still working in old interim facilities and in 
the former only one side (exit from Kosovo) is open as Serbia has not manned the other side 
(exit from Serbia) of the Common Crossing Point. 

Judicial cooperation in civil, commercial and criminal matters 

A  cooperation  agreement  between  Eurojust  and  Serbia  is  in  force  and  the  Serbian  liaison 
prosecutor  in  The  Hague  is  operational  since  March  2020.  Serbia  is  the  most  requested 
country in the region,  and the third most requested third state in  Eurojust’s network. Serbia 
continued  to  participate  in  three  joint  investigation  teams  initiated  in  previous  years  and 
54 

 
 
concluded  no  new  agreements  in  2020.  In  2020,  Serbia  acted  upon  112  Eurojust  cases, 
including  cases  from  previous  years.  The  total  number  of  newly  registered  cases  (66)  with 
Serbian  involvement  increased  by  62.5%  in  2020  (40  in  2019),  out  of  which  61  concerned 
requests for cooperation sent to Serbia, and five concerned requests from Serbia to Member 
States,  which  were  channelled  through  the  Liaison  Prosecutor  for  Serbia  at  Eurojust.  The 
representatives  of  the  public  prosecutor’s  office  of  Serbia  participated  in  12  coordination 
meetings and events. A new Law on judicial cooperation in criminal matters is in preparation. 
Cooperative relations should be established also with the European Public Prosecutor’s Office 
(EPPO), which started its operational activities on 1 June 2021. 

An analysis for IT and statistical gaps and needs in the area of judicial cooperation in civil and 
criminal matters was finalised. Serbia’s legislation still needs to be revised in order to  align 
with  the  EU  acquis.  The  2007  Hague  Convention  on  Child  Support  is  being  implemented 
since February 2021.  

During the second half of 2020, Serbia received 2 373 new requests for judicial  cooperation 
(both civil and criminal) and sent out a total of 1 467 requests. By comparison, during the first 
half  of  2020,  Serbia  had  a  total  of  2  285  new  incoming  requests,  and  sent  a  total  of  1  242 
requests. Serbia in 2020 handled 2 840 incoming judicial cooperation requests (both civil and 
criminal)  and  1  550  outgoing  requests  during  the  second  half  of  2020,  compared  to  2  285 
incoming requests during the first half of 2020 and 1 242 outgoing requests. Among those that 
Serbia  dealt  with,  it  replied  positively  to  2  166  incoming  requests  and  received  positive 
response on 1 188 outgoing requests and refused 674 incoming requests and received negative 
response  for  362  outgoing  requests.  At  the  end  of  2020,  the  number  of  pending  cases 
remained at 8 025 (compared to 7 196 in June 2020). Serbia continued its regular workflow. 
The extradition request from Montenegro concerning the former President of the State Union 
of Serbia and Montenegro has still not be officially answered by Serbia. 

55 

 
 
2.3 ECONOMIC CRITERIA 

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

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

2.3.1.  The existence of a functioning market economy 

Serbia has made some progress and is moderately prepared/at a good level of preparation 
in  developing  a  functioning  market  economy.  The  Serbian  economy  recorded  only  a  mild 
contraction in 2020, followed by a strong rebound in the first half of 2021. The impact of the 
COVID-19 crisis was mitigated by a strong pre-crisis momentum, sizeable and timely fiscal 
and  monetary  support  measures,  the  sectoral  structure  of  the  economy  and  a  relatively  low 
average stringency of containment measures. External imbalances narrowed in the crisis while 
their financing continued to be fully covered by Foreign Direct Investment (FDI) inflows. The 
fiscal space created prior to the crisis allowed Serbia to provide substantial fiscal support for 
crisis  mitigation  in  2020  and  2021  and  to  substantially  increase  capital  spending.  Banking 

56 

201820192020Serbia - Key economic figuresGDP per capita (% of EU-27 in PPS)1)39.740.041.043.0Real GDP growth 1.34.54.2-1.0Economic activity rate of the population aged 15-64 (%), total1)64.92)67.868.167.7      female57.22)60.661.360.8      male72.52)75.175.074.6Unemployment rate (%), total1)19.313.310.99.5      female20.314.211.59.9      male18.512.510.49.2Employment (annual growth %)3.61.42.4-0.2Nominal wages (annual growth %)3.94.310.59.5Consumer price index (annual growth %)3.82.01.81.6Exchange rate against EUR118.1118.3117.9117.6Current account balance (% of GDP)-5.6-4.8-6.9-4.3Net foreign direct investment, FDI (% of GDP)4.37.47.76.2General government balance (% of GDP)-3.60.6-0.2-8.1General government debt (% of GDP)62.653.752.157.3Notes: 1) Eurostat2) 2014-2017Source: national sources2012-17 average 
 
 
 
sector stability was preserved and lending growth was robust, supported by monetary easing, 
loan  moratoria  and  liquidity-enhancing  measures.  The  labour  market  has  recorded  a  further 
decrease in unemployment in 2020, reflecting in particular lower participation rates during the 
crisis, followed by some increase in the first half of 2021 in line with rising participation rates 
during recovery.   

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

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

  provide  well-targeted  and  temporary  pandemic-related  fiscal  support  to  vulnerable 
households  and  businesses;  provided  the  economic  recovery  is  well  entrenched,  plan  a 
gradual  return  to  a  deficit  close  to  balance  in  the  2022  budget  and  medium-term  fiscal 
framework; 

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

anchoring fiscal policy; 

  to reduce the grey economy, increase VAT collection and improve the tax control process, 
implement  the  new  model  of  electronic  fiscalisation  and  the  transition  to  electronic 
invoicing; 

  contain overall spending on wages as a percentage of GDP by adopting an adequate wage 
indexation  mechanism  and  taking  steps  towards  an  appropriately  designed  public  sector 
wage system reform; 

  increase  the  transparency  on  state-owned  enterprises’  fiscal  impact  and  implement  the 
new  SOE  ownership  and  management  strategy  to  improve  the  governance  of  SOEs  and 
reduce related fiscal risks. 

Economic governance 

The  authorities  have  remained  committed  to  macroeconomic  stability  and  economic 
reforms, even though some structural reforms have stalled during the crisis. In response 
to the COVID-19 crisis, both the government and the central bank took a series of sizable and 
timely fiscal and monetary measures to mitigate the economic effects of the pandemic. Fiscal 
measures could however have been more targeted in later stages of the crisis to preserve fiscal 
space  at  similar  overall  mitigation  levels.  Structural  reform  implementation  slowed  down 
during the crisis. The efficiency and predictability of the institutional environment has yet to 
be  ensured  to  more  sustainably  support  long-term  growth.  Weaknesses  remain  in  the  fiscal 
governance 
tax 
administration,  although  some  progress  has  been  made  in  the  latter  area.  There  also  remain 
weaknesses  in  the  way  the  state  intervenes  and  manages  its  presence  in  the  economy,  in 
particular as regards delayed reforms of state-owned enterprises (SOEs). After the conclusion 
of the July 2018 – January 2021 non-disbursing policy coordination instrument (PCI) with the 
International Monetary Fund, Serbia has agreed a new PCI with the IMF that runs from July 
2021 to December 2023. The policy guidance jointly agreed at the May 2020 Economic and 
Financial Dialogue between the EU and the Western Balkans and Turkey has been partially 

the  business  environment,  public  administration  and 

framework, 

57 

 
 
implemented. 

Macroeconomic stability 

Economic activity has been resilient. Following moderate growth in 2015-2107, annual real 
GDP expanded by more than 4 % in 2018 and 2019 before contracting by 1 % in 2020 due to 
the COVID-19 crisis. The crisis hit private consumption, net exports and private investment in 
particular, but  their decrease was partially offset  by  increased  government  consumption and 
public investment as well as higher inventories.  

The recession, which was mild compared to peers in the region, was mitigated by the strong 
pre-crisis momentum, sizeable and timely fiscal and monetary support measures, the sectoral 
structure  of  the  economy  with  a  limited  role  of  tourism  and  a  relatively  low  average 
stringency of containment measures. Moreover, contraction of goods exports was limited due 
to expansion of export capacity after strong manufacturing FDI and geographic diversification 
achieved  in  earlier  years.  After  three  quarters  of  negative  year-on-year  growth,  GDP 
expanded  by  1.7  %  y-o-y  in  the  first  quarter  of  2021,  mostly  driven  by  investment  and  net 
exports, and by 13.7 % y-o-y in the second quarter, mostly driven by private consumption and 
investment,  pointing  to  a  strong  rebound  in  2021.  After  remaining  broadly  unchanged  for 
most  of  the  last  decade,  the  income  gap  with  the  EU,  as  measured  by  per  capita  GDP  in 
purchasing power terms, has slightly narrowed in recent  years and  stood at 43 % of the EU 
average in 2020 (compared to 41% in 2019, 40 % in 2018 and 39 % in 2009).  

healthy. 
substantially 

The  current  account  deficit 
decreased,  while  its  financing 
After 
remained 
widening 
from 
2016  to  2019  from  around  3  % 
to  close  to  7  %  of  GDP,  driven 
by  growing  merchandise  trade 
deficits, 
the  current  account 
deficit narrowed substantially to 
4.3  %  of  GDP  in  2020.    This 
was mainly the result of a lower 
deficit 
income 
primary 
lower 
due 
(essentially 
reinvested earnings) and a lower 
goods  trade  deficit  (as  exports 
of goods contracted less than imports). These balance-improving factors were partially offset 
58 

to 

-12-9-6-3036920162017201820192020Graph 2: Serbia -Current account selected components and FDI Workers' Remittances balanceGoods and services trade balanceCurrent account balanceNet FDI% of GDPSource: IMF and National Bank of Serbia 
 
 
by lower secondary income, mainly  corresponding to  lower worker remittances in  the crisis 
context. The current account deficit continued to be more than fully covered by net inflows of 
foreign direct investment that stood at 6.2 % of GDP in 2020, also supported by the sale of 
Komercijalna  Banka.  The  current  account  deficit  narrowed  further  in  the  first  half  of  2021, 
decreasing by 65.3% year-on-year to 1.8% of the GDP of the first half of the year, largely due 
to higher service exports and higher workers’ remittances. After a gradual decline from 73.4% 
in 2015 to 61.5% in 2019, external debt to GDP increased to 66.3% in 2020 and 68.9% in Q1-
2021, reflecting in particular the financing of COVID-19 crisis mitigation measures. Official 
foreign exchange reserves have remained at more than twice the level of short-term external 
debt and covered 6 months of imports of goods and services in 2020 and Q1-2021, providing 
an adequate safeguard against adverse shocks.  

Price  pressures  remained  largely  subdued  and  inflation  expectations  contained. 
Following  seven  years  of  low  and  rather  stable  inflation,  consumer  price  inflation  averaged 
1.6 % in 2020, hovering mostly close to the lower end of the central bank’s target tolerance 
band of 3 % ± 1.5 pps. After remaining subdued in the first quarter of 2021, inflation picked 
up  in  the second  quarter  of  2021  to  3.6  %  in  May  driven  by  energy  and  food  prices  before 
decelerating to 3.3% in June. To mitigate the crisis, the central bank lowered the key policy 
rate  in  four  steps  from  March  to  December  2020  by  overall  125  bps.  to  1.0  %.  This  was 
accompanied  by  a  series  of  liquidity-supporting  measures  to  provide  dinar  and  foreign 
exchange liquidity to the market, including purchases on the secondary market of government 
securities and corporate bonds issued by SOEs. To stabilise the exchange rate, particularly in 
view  of  some  crisis-induced  depreciation  pressures  from  February  to  October  2020,  the 
central  bank  continued  to  apply  its  policy  of  frequent  interventions  on  both  sides  of  the 
foreign exchange market, selling a net EUR 1450 million in 2020.  

support 

The fiscal space created in previous years allowed for substantial fiscal crisis mitigation 
in 2020 and 2021. After surpluses in 2017 and 2018 and a fiscal outturn close to balance in 
2019, the COVID-19 crisis increased sharply the general government deficit to 8.1 % of GDP 
in  2020,  mostly  as  a  result  of  implementing  discretionary  fiscal  support  measures.  These 
the  deferral  of 
included 
income 
tax  payments  and 
social  security  contributions, 
direct wage subsidies, limited 
the 
direct 
direct 
hospitality 
lump-sum 
to 
certain groups and to all adult 
citizens.  In  addition  to  the 
measures 
direct 
budgetary  impact,  the  fiscal 
also 
support 
included  the  setting  up  of  a 
guarantee  scheme  for  loans 
worth  4.4  %  of  GDP  in  2020,  bringing  the  total  planned  size  of  the  package  of  fiscal  and 
liquidity-support  measures  to  12.5  %  of  GDP  in  2020.  The  original  2021  budget,  which  
targeted  a  strong  reduction  of  the  deficit  to  3  %  of  GDP,  was  amended  in  April  2021.  The 
revision foresees a higher than initally planned deficit of 6.9 % of GDP in 2021, mostly due to 
renewed and additional crisis support and increased capital spending. The general government 
deficit decreased by 87.5 % year-on-year to 0.6% of estimated annual GDP in the first half of 
2021, driven by a 27% increase in revenue while expenditure overall remained broadly stable. 
Notwithstanding the crisis context, capital spending has further increased from 4.9 % of GDP 

sector, 
  payments 

packages 

with 

to 

59 

020406080-10-505201520162017201820192020Graph 3: Serbia -Fiscal developmentsPrimary balance (lhs)Interest (lhs)GG balance (lhs)Public Debt (rhs)Source: National sources% ofGDP 
 
in 2019 to a record level of 5.4 % of GDP in 2020 and is  budgeted to reach around 7 % of 
GDP  in  2021,  also  impacted  by  a  further  increase  in  defence  spending.  Overall,  the  track 
record of prudent  fiscal  policy has played  a major role in  increasing investor and  consumer 
confidence  in  the  economy,  supporting  economic  growth  and  significantly  reducing 
government  debt  before  the  crisis,  thereby  creating  the  fiscal  space  for  sizeable  crisis 
mitigation in 2020 and 2021. Government debt had fallen from a peak of over 70 % of GDP 
in 2015 to 53 % of GDP in 2019 (closer to the ceiling of 45 % of GDP laid down in the fiscal 
rules of the budget system law) before increasing to 58 % of GDP in 2020 as a result of the 
high crisis-induced deficit.  

Public sector reforms have progressed unevenly, prolonging long-standing inefficiencies 
and fiscal governance challenges. Revenue collection has surpassed expectations in the two 
years preceding the crisis and has performed relatively well throughout the crisis, supported 
also  by improvements in  the tax administration, in particular the strenghtening of the  Large 
Taxpayer  Office  and  the  concentration  of  core  activities  in  fewer  sites.  A  new  tax 
administration transformation  programme 2021-2025 was adopted by the  government  on 20 
May  2021.  Progress  in  addressing  weaknesses  in  budget  planning  and  implementation  has 
been slow. Large public wage increases exceeding nominal GDP growth in three consecutive 
years before the crisis were contrary to  government commitments and have led to an increase 
of the share of expenditure for  employees from  9 % of GDP in  2017 to  10.5 % in  2020.  A 
new  system  to  control  general  government  employment  based  on  medium-term  workforce 
planning remains outstanding. The wage system reform has been postponed by another year 
while the fiscal space for future implementation of such a reform appears more limited after 
recent high wage increases. Ad-hoc extraordinary increases for some categories of the public 
sector (such as  the security forces)  also  tend to  complicate the potential    implementation of  
such a reform in the future.  

While budget adoption broadly followed legislative procedures, the reform of fiscal rules 
is  still  pending.  While  approval  of  the  2021  budget  was  delayed  due  to  the  lengthy 
government formation and the crisis context, the budget was adopted broadly in line with the 
normal legislative procedure, including a series of parliamentary debates on the draft budget. 
The Fiscal Council was also consulted in the process. The system of fiscal rules remains weak 
as  it  is  not  sufficiently  binding  and  relevant  for  policy-making.  In  particular,  the  annual 
ceiling  for  the  overall  general  government  fiscal  deficit  does  not  appear  to  be  sufficiently 
transparent  and  operational.  The  accountability  framework  also  calls  for  reinforcement  as  it 
currently  does  not  offer  adequate  sanctions  in  cases  of  non-compliance  nor  effective 
enforcement  mechanisms.  Work  on  strengthening  the  fiscal  rules  has  been  postponed  by 
another year.  The new fiscal rules are now expected to be finalised by end-June 2022 to be 
applied to the 2023 budget law according to the new PCI programme agreed with the IMF. 

The  macroeconomic  policy  mix  has  remained  appropriate. 
It  helped  sustain 
macroeconomic stability and supported the resilience of economic activity. The prudent fiscal 
policy  and  cautiously  supportive  monetary  policy  before  the  crisis  ensured  the  policy  space 
for sizable fiscal and monetary support to mitigate the impact of the COVID-19 crisis while 
maintaining  macroeconomic  stability.  The  acceleration  of  economic  reforms  and  their  full 
implementation  remain  key  to  ensure  a  sustainable  recovery  and  further  strengthen  the 
economy’s potential in view of sustainable real convergence with the EU.  

Functioning of product markets  

Business environment  

The business environment has been slowly improving despite a general slowdown in the 
reform  momentum.  Over  the  last  few  years,  Serbia  has  improved  its  standing  in  various 

60 

 
 
international  business  rankings  mostly  due  to  regulatory  improvements,  for  example  in 
issuing  construction  permits,  registering  property,  making  it  easier  to  pay  tax,  and  better 
protecting minority investments. In 2020, 39 000 new legal business entities were registered 
of which about 9 000 companies: while the number of registrations for companies was almost 
unchanged (+0.2 %) compared with 2019, the registrations of solo entrepreneurs fell by 25 % 
due to the crisis. About 30 000 legal entities (of which 8 000 companies) were deleted from 
the register, around 40 % less than in 2019. This was mostly due to the base effect from the 
very high number of compulsory liquidations in 2019 (concerning companies failing to fulfil 
their financial reporting obligations within a certain timeframe) but, supported by the crisis-
mitigating  measures,  non-compulsory  exits  also  declined  by  around  13  %  in  2020.  In  June 
2020,  the  Government  adopted  a  2020-2021  action  plan  for  simplification  of  administrative 
procedures through the “E-paper” programme aimed at the optimisation of 890 administrative 
procedures and establishment of a single public register of administrative procedures. The law 
on foreign exchange transactions is widely considered by the business community to be too 
restrictive in its design and unpredictable in its application but there are no indications that it 
might be revised any time soon.  

The  institutional  and  regulatory  environment  is  still  challenging.  While  the  number  of 
urgent  parliamentary  procedures  decreased,  business-related  laws  and  by-laws/decrees  are 
still adopted with  very tight  consultation  deadlines,  leaving insufficient time for business to 
contribute to policy preparation and notably to prepare for changes affecting their operations. 
The  ongoing  setup  of  a  centralised  website  for  consultation  procedures  could  make  the 
consultation process more accessible.  Despite a solid legal framework on public procurement 
and  state  aid  control,  implementation  of  these  policies  remains  weak.  The  law  on  state  aid 
control,  which  entered  into  force  on  1  January  2020,  grants  legal  independence  to  the 
Commission for the State Aid Control. However, its operational independence remains to be 
demonstrated  and  a  credible  track  record  in  implementation  of  the  state  aid  law  to  be 
established. Delays in adopting secondary legislation continue to hamper the implementation 
of  adopted  laws.  In  general,  contract  enforcement  is  weak,  and  the  courts  that  enforce 
property rights remain overburdened. Moreover, the business environment remains hampered 
by red tape, political interference and limited public administration efficiency. Serbia ranked 
94th out of 180 countries in the 2020 corruption perception index compiled by Transparency 
International,  compared  to  87th  in  2018  and  91st  in  2019.  Fair  competition  is  negatively 
affected by the large informal economy.  

Some measures were taken to fight the informal economy. The authorities have established 
a working group chaired by the labour inspectorate to combat informal employment. Another 
tool is  a single information  system  for inspections (eInspector), which aims  to  ensure better 
coordination among various inspections, standardisation of their work, and better availability 
of data. 36 inspection services started using the tool in July 2019 and then this was extended 
to  several  more  inspections  comprising  44  in  total.  A  contact  centre  where  citizens  can 
directly  report  on  irregularities  linking  central  level  inspections  with  local  self-governments 
started  working  in  March  2020.  A  special  working  group  for  coordination  of  inspection 
activities  related  to  the  COVID-19  pandemic  was  established  in  October  2020.  Further 
improvements in anti-money laundering/combating the financing of terrorism are ongoing.  

State influence on product markets  

State  ownership  has  continued  to  gradually  decline,  but  state  presence  remains  large 
amid persistent governance weaknesses. In April 2021, the Government adopted the 2021-
2027 strategy on state ownership and management of SOEs which aims at more sustainable 
and  efficient  management  of  SOEs.  Currently,  however,  governance  of  these  enterprises 
remains  under  strong  political  influence.  This  includes  the  irregular  appointment  of  acting 

61 

 
 
managers  for  extended  periods  instead  of  using  the  standard  nomination  process.  The 
financial  performance  of  SOEs  may  imply  the  build-up  of  fiscal  risks,  e.g.  in  the  case  of 
strongly rising debt levels profiting from implicit state guarantees, such as for Telekom Srbija, 
that  also  benefitted  from  secondary  market  acquisition  by  the  central  bank  of  a  substantial 
share of its 2020 bond issuance. Overall, SOEs still account for almost a fifth of value added 
and  formal  employment  in  Serbia.  The  share  of  administered  prices  remained  broadly 
unchanged, at around 20 % of the consumer basket. The new law on state aid control entered 
into force on 1 January 2020. The law has secured the legal independence of the Commission 
for  State  Aid  Control,  with  a  separate  budget  and  autonomous  spending  that  allows  it  to 
considerably  increase  its  administrative  capacities  and  improve  operations.  Although  the 
overall GDP share of reported state aid has decreased, the track record of enforcing state aid 
rules is still uneven, while transparency is also lacking.  

Privatisation and restructuring  

Privatisation of SOEs advanced. Since 2015, when the privatisation law was adopted, more 
than  310  SOEs,  mostly  with  no  or  only  a  small  number  of  employees,  have  been  put  into 
bankruptcy procedure, increasing the total number of SOEs under bankruptcy procedure to 2 
000.  A  smaller  number  of  companies  have  been  privatised,  and  non-EU  investors  acquired 
some of the largest firms in mining, metallurgy, and agriculture. The status of the remaining 
78 SOEs employing some 28 000 workers has yet to be addressed through either bankruptcy 
or privatisation. Six companies with an overall 6 000 employees are planned to be privatised 
in  2021.  The  implementation  of  the  strategy  for  banks  with  state  ownership  continued.  The 
privatisation  of  Komercijalna  Banka  (the  third  largest  bank  by  assets  and  the  largest 
remaining state-owned bank) was completed by a transfer of EUR 395 million to the Serbian 
budget in December 2020. The state remains in control of key entities in the insurance sector.  

Restructuring of key utility companies is ongoing but is advancing slowly. In May 2021, 
the government adopted an Action Plan for the unbundling in the gas sector including of state 
owned  public  utility  Srbijagas.  The  state  is  now  the  owner  of  the  transmission  system 
operator,  after  Srbijagas  transferred  its  shares  in  "Transportgas  Srbija"  to  the  Republic  of 
Serbia.  In  January  2021,  a  new  legally  independent  company  in  charge  of  the  electricity 
distribution  network  and  supply  Elektrodistribucija  Srbije  was  licensed,  after  having  been 
separated  from  the  state  owned  EPS  company.  Both  separations  in  the  gas  and  electricity 
sector  should  be  confirmed  by  the  Energy  Community  Secretariat  to  certify  that  the  whole 
new  organisational  structure  is  in  line  with  the  requirements  of  the  Third  Energy  Package 
including  non-discriminatory  third-party  access  to  the  gas  transmission  system.  The 
decarbonisation  of  the  energy  sector  remains  the  biggest  challenge  for  the  government.  A 
national  energy  and  climate  plan  is  currently  being  drafted  to  address  this  challenge.  The 
pricing policy for the regulated electricity market does not provide adequate cost coverage for 
investments  in  the network and the security of supply, also  as  concerns investments  needed 
for Serbia’s energy and climate reforms.  

Functioning of the financial market  

Financial stability 

Financial  stability  was  maintained  in  2020.  Supported  by  crisis-mitigation  measures, 
macro-prudential  indicators  remained  sound.  The  aggregate  capital  adequacy  (regulatory 
capital to risk-weighted assets) was at 22.4 % at the end of 2020, well above the minimum set 
by the central bank. Liquidity remained high at 37.3 % (share of liquid assets to total assets) 
and  50.9  %  (share  of  liquid  assets  to  total  short-term  liabilities)  respectively  at  the  end  of 
2020,  also  supported  by  the  central  bank’s  liquidity-enhancing  measures.  As  a  result  of 
increased  loans  loss  provisions,  the  profitability  of  the  banking  system  worsened  with  a 

62 

 
 
decline in return on assets (1.1% at the end of 2020 vs 1.8 % at the end of 2019) and in return 
on equity (6.5 % at the end of 2020, compared to 9.8 % at the end of 2019). The NPL ratio 
increased to 3.9 % at the end of the first quarter of 2021, partly due to the expiration of the 
second  loan  moratorium,  before  decreasing  to  3.7  %  at  the  end  of  the  second  quarter.  The 
authorities have continued to  address  legacy NPLs in  the portfolio of the Deposit  Insurance 
Agency.  Two  portfolios  of  NPLs  worth  a  total  EUR  2  billion  at  face  value  have  been 
successfully  sold  notwithstanding  persisting  obstacles  in  NPL  resolution.  The  central  bank 
and  the  government  continued  to  implement  their  dinarisation  strategy  addressing  the  high 
degree  of  euroisation  in  the  banking  system.  Despite  uncertainties  related  to  the  crisis,  the 
share  of  dinar-denominated  loans  and  deposits  of  both  households  and  firms  increased  in 
2020.  

Access to finance  

Access  to  finance  was  supported  by  crisis-mitigation  measures.  Foreign-owned  banks 
continued  to  dominate  the  financial  system,  holding  around  six  sevenths  of  banking  system 
assets  following  the  sale  of  Komercijalna  Banka  to  Nova  Ljubljanska  Banka  at  the  end  of 
2020.  The  continuing  consolidation  of  the  banking  system  via  mergers  and  acquisitions  has 
further reduced the number of banks from 26 at the end of 2020 to 24 at the end of June 2021. 
Favourable  financing  conditions,  resulting  inter  alia  from  the  central  bank’s  rate  cuts  and 
further  crisis-mitigation  measures  and  the  government-backed  guarantee  schemes,  have 
supported growth in lending. Credit expanded by 9 % for corporates and 11% for households 
in 2020, which was however largely related to moratorium-related maturity extensions as the 
volume of newly approved loans decreased at double-digit rates (by around 13 % and 20 % 
respectively).  Non-banking  financial  institutions  continue  to  be  largely  absent,  the  legal 
framework  for  the  leasing  sector  has  still  not  been  reformed  and  there  was  no  progress  in 
establishing the legal framework for microfinance institutions.  

Fucntioning of the labour market 

remain. 

While  the  labour  market  has  seen  considerable  improvements  in  recent  years  and  the 
impact  of  the  COVID-19  pandemic  is  expected  to  be  transitory,  structural  problems, 
demographic  and  migration 
challenges 
Strong 
economic  growth  in  the  years 
before the pandemic was reflected 
in  continuously  improving  labour 
market 
indicators  until  2020. 
Thus,  prior  to  the  crisis,  activity 
and  employment  rates  increased 
steadily, while the unemployment 
rate  (15-64)  fell  to  10.9  %  in 
2019.  As  an  increased  number  of 
the 
discouraged  workers 
labour 
of 
the 
force, 
unemployment  decreased  further  to  9.5  %  in  2020,  despite  a  simultaneous  decrease  in 
employment. Long-term (4.9 %) as well as female (9.9 %) and youth unemployment (26.6 %) 
also  continued  their  downward  trend  in  2020.  Reflecting  the  higher  number  of  discouraged 
workers, the corresponding activity rate (15-64) fell to 67.7 % in 2020 and the proportion of 
young people in the 15-24 age group not in employment, education or training rose to 15.9% 
in  2020.  The  share  of  informal  employment,  two-thirds  of  which  was  in  agriculture,  fell  to 
16.4  %  of  total  employment  in  2020.  As  the  economic  recovery  got  underway,  jobseekers 

left 
rate 

63 

4555657501020302014201520162017201820192020Graph 4: Serbia -Labour market trends(15-64 age group)Unemployment rate (lhs)Participation rate (rhs)Employment rate (rhs)Source: EUROSTAT and StatisticalOffice (SORS) 
 
returned to the labour market, which pushed up both employment and unemployment rates (to 
61.8 % and 11.4% respectively in Q2-2021, also impacted by the changed LFS methodology 
as of 2021). However, in structural terms, the labour force may have peaked as the declining 
working  age  population  is  taking  its  toll  on  labour  supply.  A  steady  population  decline  of 
around 0.5 % every year, along with large-scale emigration across the occupational spectrum 
remains  a  key  medium-  to  long-term  challenge  for  economic  development.  In  addition, 
persistent skills mismatches, the gender employment gap and inadequate activation of young 
people as well as large regional disparities have continued to be major labour market issues. 
In  February  2020,  the  government  adopted  the  2021-2027  strategy  on  economic  migration 
aiming  to  foster  circular  migration  by  retaining  workers  and  by  encouraging  professionals 
from the diaspora to return to the country. The government packages aimed at mitigating the 
impact  of  the  COVID-19  crisis  –  with  incentives  given  only  to  companies  that  would  not 
reduce  their  workforce  by  more  than  10  %  of  staff  –  have  contributed  to  preserve  formal 
employment and to thereby limit the increase in the number of unemployed during the crisis. 

Real  wages have increased.  Despite the COVID-19 crisis  real  wages went  up  by 7.7  %  in 
2020, strongly influenced by wage increases already decided before the crisis, in particular in 
the public sector. The authorities have continued to gradually reduce the overall tax wedge by 
increasing  the  non-taxable  part  of  salaries  from  RSD  16  300  to  RSD  18  300  as  of  January 
2021. However, the tax wedge is still disproportionally high for people with low salaries and  
therefore  aggravates  in-work-poverty.  It  also  continues  to  be  an  impediment  for  the 
formalisation  of  labour.  In  line  with  expectations  for  the  overall  increase  of  wages,  the 
government  increased  the  minimum  hourly  wage  by  6.6  %  in  2021.  Around  one  in  six 
registered employees receives the minimum wage.  

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

Serbia  has  made  some  progress  and  is  moderately  prepared  to  cope  with  competitive 
pressure and market forces within the EU. The structure of the economy improved further and 
economic integration with the EU remained high. However, despite some progress, the quality 
and  relevance  of  education  and  training  does  not  fully  meet  labour  market  needs.  Public 
investment has continued to increase with the aim to address serious infrastructure gaps after 
years  of  underinvestment.  Although  the  cost  of  borrowing  for  small  and  medium-sized 
enterprises (SMEs) has  declined, they still face a number of challenges, including a volatile 
business  environment  and  unfair  competition.  Last  years’  recommendations  have  been 
partially  implemented.  In  order  to  improve  competitiveness  and  long-term  growth,  Serbia 
should in particular: 

  further  tailor  education  and  training  to  labour  market  needs,  in  particular  in  the  area  of 

vocational education and training (VET);  

  ensure  a  harmonised  approach,  using  feasibility  studies,  cost-benefit  analyses  and 
environmental impact assessments, for prioritising and monitoring all public infrastructure 
investment regardless of the source of financing, and apply the principles of competition, 
equal treatment, non-discrimination and transparency in public procurement and state aid 
procedures  in  line  with  EU  standards  to  all  projects  including  those  based  on 
intergovernmental agreements;  

  advance on green energy transition and start with decarbonisation of industry especially in 
the  energy  sector;  substantially  increase  investments  into  renewables  and  energy 
efficiency  supported  by  cost-recovering  tariffs;  implement  the  action  plan  on  gas 
unbundling in a timely manner.  

64 

 
 
 
 
Education and innovation 

Despite  some  progress,  skills  mismatches  in  Serbia  remain  high.  Public  spending  on 
education  stood  at  around  3.3  %  of  GDP  in  2019,  below  the  EU  average  of  4.7  %.  Pre-
primary  school  enrolment  remained  around  64  %  in  2019,  while  the  compulsory  six-month 
pre-school  programme  is  almost  universal.  Enrolment  rates  remained  high  in  general  in 
primary  and  lower  secondary  education,  at  some  99.7  %,  and  at  around  90  %  in  upper 
secondary level. The gross enrolment ratio in tertiary education also increased in recent years 
to around two thirds (67.8 %) while higher education attainment in the population aged 30-34 
increased  to  33.5  %  in  2019.  A  basic  system-wide  teacher  training  to  support  the 
implementation of the new curricula and the development of students’ key competencies has 
continued  and  reached  out  to  some  75  %  of  education  professionals.  The  authorities  are 
gradually  updating  both  the  general  and  vocational  pre-university  curricula  to  make  them 
more  relevant  to  labour  market  needs,  consolidating  the  national  qualification  framework 
(NQF) set-up. Although the pace in adoption of new qualification standards has picked up (32 
new  qualification  standards),  a  majority  of  vocational  education  and  training  (VET) 
qualifications  remain  outdated.  VET  education  is  not  well  oriented  to  labour  market  needs 
with low exposure of students to the workplace. While the roll-out of dual VET education has 
been  progressing,  it  still  concerned  only  5%  of  students  in  the  first  year  of  secondary 
vocational  school  in  the  school  year  2020/21.  Initial  efforts  to  introduce  a  monitoring  and 
feedback mechanism under the national  work-based VET model are made. Serbia improved 
slightly in the Human Development  Index. Serbia is rated third in the region in view of the 
World  Bank  Human  Capital  Index.  There  is  concern  that  the  COVID-19  pandemic  may 
jeopardise the achieved progress in the struggle to maintain health and education services in 
the period of restrictions introduced to protect public health. 

R&D  spending  remains  low  at  around  0.9%  of  GDP.  Government  funding  is  stable  at 
around  0.4  %  of  GDP,  providing  close  to  half  of  the  total  R&D  financing  in  2019.  The 
number  of  scientific  research  organisations  remained  broadly  unchanged.  To  increase 
innovation  and  scientific  research,  Serbia  continues  to  support  the  innovation  fund  and  the 
science fund that are running numerous specialised financing instruments and grant schemes. 
Five  years after a science and technology park was established in Belgrade, three additional 
are  being  built  in  Novi  Sad,  Čačak  and  Niš.  Serbia  adopted  an  Action  Plan  for  the 
implementation of its smart specialisation strategy in April 2021. 

Physical capital and quality of infrastructure 

Investment  is  increasing,  but  after  years  of  underinvestment,  it  needs  to  effectively 
address infrastructure gaps. The rise in public investment observed in recent years has been 
further  reinforced  while  private  investment  is  expected  to  rebound  strongly  in  2021  after  a 
crisis-induced  decrease  in  2020.  The  economy  is  attracting  significant  foreign  direct 
investment, well above the region’s average and gradually rising in the last few years prior to 
the pandemic. Although declining by around a fifth as compared to the record FDI inflow in 
2019,  substantial  amounts  of  foreign  direct  investments  were  recorded  even  in  2020  (also 
supported by the sale of Komercijalna Banka). However, the share of total investment in the 
economy  still  stands  only  slightly  above  20  %  of  GDP,  while  physical  infrastructure  needs 
further upgrading and expansion. A further increase in public investments is planned in 2021, 
particularly in roads and railways. 

The  institutional  framework  supporting  new  investment  is  weak.  The  ‘user  pays’ 
principle is not sufficiently applied when it comes to maintaining existing infrastructure and 
implementing new infrastructure investment plans. The new legislative framework for public 
investment  management  put  in  place  in  July  2019  provides  a  basis  for  a  sounder  project 
selection process, better prioritisation and more comprehensive planning across different tiers 
65 

 
 
of the government. However, the arrangement allows too many exceptions to the rule, which 
significantly reduces its effective impact. Moreover, the law on special procedures for linear 
infrastructure projects (road, rail, waterways, airports, metro, water and wastewater systems) 
adopted in February 2020 allows linear infrastructure projects of ‘special importance for the 
Republic of Serbia’ to be exempted from public procurement rules. Public procurement rules 
are  not  always  fully  complied  with  and  they  are  not  always  fully  compatible  with  EU 
standards. This concerns particularly big infrastructure projects financed via loan agreements 
with  third  countries  that  are  directly  assigned  to  companies  from  these  countries,  without 
complying with the requirements of transparency, equal treatment or non-discrimination. The 
increasing  number  of  exemptions  from  the  application  of  the  public  procurement  law  and  a 
large  number  of  inspected  irregularities  in  public  procurement  contracts  found  by  the  State 
Audit Institution raise concerns. 

The energy sector remains largely inefficient and highly polluting while some regulatory 
reform steps have been taken. Serbia made some progress towards attracting investments in 
the energy and mining sector by the regulatory changes adopted in four laws in April 2021 in 
the field of energy, energy efficiency, renewable energy and mining.  The competitiveness is 
increasingly  negatively  impacted  by  an  inefficient  energy  sector  based  on  lignite.  The 
introduction of the new  market  based auction scheme to  support production  of energy from 
renewable  sources  (as  included  in  the  newly  adopted  legislation)  should  attract  new 
investments into renewables. Low electricity tariffs do not allow for the necessary investment 
in  infrastructure;  tariffs  were  only  increased  slightly  in  January  2021.  In  May  2021,  the 
government adopted an Action Plan for the restructuring of state-owned enterprise Srbijagas 
and started implementing it. The BalkanStream  gas pipeline was  finished  but  the regulatory 
regime must yet to be brought in line with EU legislation. 

Digitalisation  remains  a  top  government  priority.  The  2020-2022  e-government 
development  programme  and  related  action  plan  adopted  in  June  2020  have  started  to  be 
implemented. The government’s main objective in this area is to improve the quality of public 
services  by  ensuring  interoperability,  efficient  coordination,  project  management  and  legal 
certainty  over  e-government  use  and  the  use  of  open  data.  An  upgraded  e-government 
national portal was set out in 2020, serving as a one-stop shop for e-government services and 
as  a  central  point  of  access  for  business  and  citizens  alike.  The  portal  is  used  for  a  high 
number of services and played a particular role as an efficient vehicle for vaccination during 
the  COVID-19  pandemic.  Some  progress  has  already  been  made  on  public  access  to 
institutional  data  thanks  to  the  National  Open  Data  portal  (making  data  available  from  22 
public  institutions  so  far).  The  Artificial  Intelligence  Strategy  2020-2025  has  started  to  be 
implemented via the related action plan for 2020-2022, including inter alia the foundation of a 
Research and Development Institute for Artificial Intelligence in Novi Sad. The robust growth 
of the information and communication sector continued, accounting for a 5 % share of value 
added and a similar share of total exports, with exports for 2020, the year of the COVID-19 
crisis, valued at EUR 1.4 billion, which is 4.4 % higher than in 2019. Available data confirm 
improvements  in  2020  regarding  the  use  of  computers,  broadband  penetration  and  e-
commerce. 

Sectoral and enterprise structure 

Construction  and  some  services  have  increased  their  weight  in  the  economy.  Services 
dominate  the  economy,  providing  more  than  60  %  of  total  value  added.  Sectors  like 
transportation, retail trade, and information and communication – the last increasingly geared 
towards exports – benefited from strong growth before the crisis and the steady expansion of 
foreign  sales  to  increase  their  economic  weight.  Reflecting  the  new  investment  cycle,  the 
construction  sector  increased  its  share  in  GDP  from  3%  in  2013  to  5.7 %  of  GDP  in  2019, 

66 

 
 
strongly  supported  by  the  construction  of  the  Balkanstream  gas  pipeline.  The  weight  of  the 
agricultural sector has broadly stabilised around 6 % since 2017 after a downward trend over 
the  previous  few  years  in  line  with  the  growing  shares  of  manufacturing  and  services.  As 
regards  the  structure  of  employment  the  share  of  agricultural  employment  has  continued  to 
fall steadily from 20 % in 2014 via 17 % in 2017 to around 15 % in 2020, while there have 
been increases in the share of employment in the industry and service sectors. 

Small  and  medium-sized  enterprises  (SMEs)  are  the  backbone  of  the  economy.  They 
provided close to 60 % of total employment and turnover in the economy, and around half of 
the  value  added  in  2019  (SORS  annual  structural  business  statistics).  SMEs  are  particularly 
active  in  construction,  accommodation  and  food  services,  retail,  and  real  estate.  The 
authorities are implementing several programmes to support SME development, focusing on 
boosting innovation, finance, and internationalisation. Loans to SMEs accounted for 68 % of 
total corporate loans in June 2021. Their cost of borrowing has declined recently, but is still 
above that of large companies. SMEs however still face a number of challenges, including a 
volatile  business  environment  and  lack  of  non-bank  financing.  SMEs  are  facing  a  lack  of  a 
level-playing  field:  big  enterprises  and  foreign  investors  often  have  a  direct  communication 
line to the government and therefore enjoy an advantage over domestic SMEs. Also, the level 
of subsidies being channelled to foreign investors and large companies, including particularly 
SOEs,  is  much  higher  compared  to  SMEs.  In  view  of  all  this,  SMEs  often  complain  about 
unfair  competition.  Furthermore,  SMEs  have  been  particularly  affected  by  the  COVID-19 
crisis  –  the  2020  assistance  packages  were  particularly  aimed  at  supporting  them  through 
deferral  of  tax  and  social  contributions  payment,  but  also  payment  of  minimum  salaries  to 
their employees, and access to loans for liquidity, while the assistance package in spring 2021 
granted all companies equal access to payment of minimum salaries.   

Economic integration with the EU and price competitiveness 

Economic integration with the EU remained high. The EU remains Serbia’s biggest trading 
and investment partner, accounting for 61.4 % of its total trade and two thirds of net foreign 
direct investment inflows in 2020. Total bilateral trade between the EU and Serbia contracted 
by  2.4  %  between  2019  and  2020  to  a  total  of  EUR  24.4  billion  as  a  consequence  of  the 
COVID-19 crisis. Thanks to a faster increase of Serbia’s exports to the EU than imports from 
the EU over the past several years, trade has become more balanced, with the EU registering a 
surplus of EUR 2.3 billion in 2020. After the EU, Serbia’s main trade partners in 2020 were 
China (7.2 % of total trade), Russia (5.3 %) and Bosnia and Herzegovina (4.7 %). Trade with 
the  signatories  of  the  Central  European  Free  Trade  Agreement  represented  15.9  %  of  total 
exports and 3.8 % of total imports in 2020. Introduction of a 100 % tariff by Kosovo in late 
2018 on imports from Serbia and Bosnia and Herzegovina affected Serbia’s goods exports in 
2019 and early 2020, with estimated annual losses of around EUR 400 million, representing 
around 1% of GDP per year. These tariffs were however lifted by Kosovo as of 1 April 2020 
while  further  non-tariff  obstacles  for  imports  from  Serbia  were  lifted  in  June  2020  thus 
allowing for a partial recovery of deliveries to Kosovo. There are still significant bottlenecks 
at border crossing points with neighbouring EU countries; these hamper further trade with the 
EU and transport facilitation with the EU. Trade openness, after a steady increase from 92 % 
of GDP in 2014 to 111.6 % in 2019, decreased to 104.5 % in 2020 due to the crisis, before 
rebounding strongly to 112.4 % in the first quarter of 2021. 

67 

 
 
Real  effective  exchange  rates  have  been  on  an  appreciating  trend  in  recent  years.  The 
dinar-euro  nominal  exchange  rates  remained  broadly  stable  in  2020  as  initial  depreciation 
pressures  at  the  beginning  of  the  health  crisis  were  successfully  neutralised  by  the  central 
bank.  The  CPI  based  real  effective  exchange  rate  has  been  broadly  stable  over  the  longer 
term, with depreciation by 9 % over the period 2014-2016 being followed by appreciation by 
9 % over the period 2017-2020. Serbia’s cost competitiveness improved in the period 2014-
2016  with  unit  labour  cost  (ULC)  based  RER  depreciating  by  a  cumulative  8  %  and  then 
deteriorated in the period 2017-2020 RER appreciating by a cumulative 27 % (13 % in 2020 
alone,  due  the  decline  in  economic  activity  accompanied  by  increases  in  wages  in  both  the 
private and public sector). The latest IMF external sustainability assessment (done within the 
Article IV consultations in spring 2021) considered the exchange rate broadly consistent with 
fundamentals. 

2.4. PUBLIC PROCUREMENT, STATISTICS, FINANCIAL CONTROL  

Chapter 5: Public procurement 

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

Serbia is moderately prepared on public procurement. Limited progress was made during 
the  reporting  period,  in  particular  by  launching  a  new  public  procurement  portal  and 
strengthening  administrative  capacities  of  the  public  procurement  office.  The  new  public 
procurement law, largely aligning Serbia’s legislation with the EU acquis, entered into force 
in  July  2020.  However,  the  law  of  February  2020  on  special  procedures  for  linear 
infrastructure projects seriously undermines the effective implementation of the law on public 
procurement.  The  increasing  number  of  exemptions  from  the  application  of  the  public 
procurement  law  and  a  large  number  of  inspected  irregularities  in  public  procurement 
contracts  found  by 
the  State  Audit  Institution  raise  concerns.  The  Commission 
recommendations from 2020 were only partially implemented and remain valid.  

In the coming year, Serbia should in particular: 

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

  ensure  that  intergovernmental  agreements  concluded  with  third  countries  do  not  unduly 
restrict  competition  and  comply  with  the  basic  principles  of  public  procurement,  in  line 
with the national legislation and the EU acquis;  

68 

0204060201220132014201520162017201820192020Graph 5a: Serbia -Exports of goodsEUCEFTAOtherSource: WiiW% ofGDP0204060201220132014201520162017201820192020Graph 5b: Serbia -Imports of goodsEUCEFTAOtherSource: WiiW% ofGDP 
 
 
  continue to strengthen the capacity of the public procurement office, the commission for 
public-private  partnerships  and  concessions,  the  Republic  commission  for  the  protection 
of rights in public procedures and the administrative court. 

Institutional set-up and legal alignment  

Serbia’s legal and institutional frameworks on public procurement are broadly aligned with 
the EU acquis. The law on public procurement entered into force in July 2020 together with 
all the necessary implementing legislation. However, adoption of amendments to the law on 
public-private partnerships and concessions to align with the EU Directive on concessions is 
still  pending.  In  February  2020,  Serbia  adopted  a  new  law  on  special  procedures  for  linear 
infrastructure projects that allows the government to exempt linear infrastructure projects of 
‘special  importance  for  the  Republic  of  Serbia’  from  the  application  of  public  procurement 
rules. Under this latter law, national public procurement legislation can be suspended for the 
entire lifetime or for particular phases of a project, and the government is empowered to select 
a  strategic  partner  in  circumstances  deemed  as  urgent.  This  law  and  its  wide  application 
undermine  the  effective  implementation  of  the  law  on  public  procurement.  By  allowing  for 
the circumvention of national legislation as well as EU rules and standards in this way, Serbia 
maintains discriminatory rules in the field of public procurement. 

The  public  procurement  development  programme  for  2019-2023  was  implemented 
through the action plan for 2019-2020. A new action plan for 2021 was adopted in May 2021. 

The public procurement office (PPO) conducts compliance supervision of the law on public 
procurement  and  maintains  the  public  procurement  portal.  The  PPO  is  also  in  charge  of 
proposing implementing legislation. 

Implementation and enforcement capacity  

The public procurement market shrank to 6.88% of GDP in 2020 in comparison to previous 
years when it stood at around 8%. The average number of bids per tender remained stable at 
2.6, yet it is notably lower than the 3 bids in 2017. The share of contracts awarded to foreign 
bidders remained low at 2% of the total value of contracts, spread equally between the EU and 
non-EU companies.  

Regarding monitoring of contract award and implementation, the proportion of negotiated 
procedures without prior publication stood at 2.57% of the total value of contracts concluded 
under the old law on public procurement i.e. by July 2020. This share soared to 23.2% in the 
second  half  of  2020  with  the  entry  into  force  of  the  new  law.  This  procedure  was 
predominantly  used  for  COVID-related  procurement  starting  from  July  2020.  The  share  of 
open  procedures  remained  roughly  the  same  (94%  of  the  total  value  of  contracts  in  2020 
compared to 93% in 2019) based on the application of the old law, but it dropped to 69% in 
the second half of the year. The use of the best price-quality ratio criterion halved from 10% 
in 2019 to an average of 5% in 2020, while the lowest price criterion remained dominant in 
95% of cases. A new public procurement portal was launched in June 2020, which is welcome 
progress in terms of transparency. Numerous workshops and webinars have been organised to 
train bidders and contracting authorities to use the new e-procurement portal.  

The value of procurements exempted from the application of the Law on public procurement 
increased by approximately EUR 500 million from 2019 to 2020 to a total value of EUR 1.73 
billion, i.e. 54% of the cumulative value of all public procurement contracts conclude in 2020. 
In 2020, the state audit institution identified contracts worth approximately EUR 450 million 
that were exempted from public procurement procedures with no valid justification. The state 
audit institution furthermore found irregularities in 14.2 % of the value of public procurement 
contracts inspected in combined audits in 2020, but the share of inspected irregularities soared 

69 

 
 
to 60 % of the value of public procurement contracts inspected in  compliance audits during 
the year. These findings raise serious concerns and need to be appropriately followed up. The 
COVID-19  response  enabled  the  use  of  exceptional  procedures  to  expedite  procurement 
processes. To mitigate the risks of fraud and corruption, it is especially important to maintain 
audit  trails.  Disclosing  all  procurement  information  related  to  procurement  conducted  in 
relation to COVID-19 on government portals would also contribute to enhanced transparency 
and trust.  

Capacity to manage public procurement processes has further improved through filling all 
planned staff positions in the PPO, standing now at a total of 38 staff members, up from 28 in 
2019. The process  of certification of public procurement officers was halted in  2020 due to 
COVID-19 crisis, but is continuing since March 2021.  

The commission for public-private partnerships and concessions has approved a total of 170 
public-private partnership project proposals, including 66 with concession elements, mostly in 
the transport, sanitation and urban planning sectors. The commission remains understaffed.  

There were no developments in integrity and conflicts of interest.  

Efficient remedy system  

Legislation on the right to legal remedy is broadly in line with the EU acquis and is enforced 
by the Republic Commission  for the protection of rights in  public procedures  (the Republic 
Commission),  an  independent  state  body.  In  December  2020,  the  Parliament  re-elected  the 
president  of  the  Republic  Commission  and  one  member  for  another  five-year  term.  The 
Republic  Commission  solved  835  cases  on  requests  for  the  protection  of  rights  in  2020. 
Public  procurement  procedures  were  partially  or  fully  annulled  in  419  cases  (50%  of  all 
solved  cases).  The  number  of  contracting  authorities  not  complying  with  decisions  of  the 
Republic  Commission  remains  stable  at  below  1%  of  the  overall  decisions  taken.  The 
Republic  Commission  took  decisions  in  98  cases  on  complaints  about  conclusions  of 
contracting authorities in 2020. It also imposed seven financial fines on contracting authorities 
not complying with its orders and decisions and annulled one contract.  

Regarding  the  Republic  Commission’s  implementation  capacity,  the  number  of  staff 
remains  relatively  stable  with  54  staff  members,  nine  of  which  are  elected  officials.  Due  to 
limited  specialisation  and  training,  the  Administrative  Court’s  capacity  to  deal  with  the 
complexity,  diversity,  and  overall  quantity  of  cases  and  lengthy  legal  proceedings  remains 
weak. Cooperation between the PPO and the Republic Commission with the  Administrative 
Court on exchange of knowledge and information remains to be strengthened. 

Chapter 18: Statistics 

EU rules require that Member States are able to produce good quality statistics in line with 
the  principles  of  the  European  statistics  Code  of  Practice  and  based  on  professional 
independence,  impartiality,  reliability,  transparency,  and  confidentiality.  Common  rules  are 
provided for the methodology, production and dissemination of statistical information.  

Serbia  is  moderately  prepared  in  the  area  of  statistics.  Overall,  some  progress  was  made 
during  the  reporting  period.  Serbia  progressed  well  in  preparing  the  methodology  and  the 
technical  specifications  for  the  next  population  and  housing  census,  even  if  the  census  was 
postponed from spring 2021 to autumn 2022 due to the COVID-19 pandemic. The submission 
of  statistical  data  to  Eurostat  has  also  continued  to  improve,  as  well  as  the  compilation  of 
macroeconomic statistics in line with the European System of Accounts (ESA) 2010. The new 
statistical law was not adopted. The statistical office needs to retain highly qualified staff and 
recruit additional staff to meet the obligations of the EU acquis.  

70 

 
 
In the coming year, Serbia should in particular: 

  adopt the new statistical law to increase the independence of the statistical office;  
  carry out the population  and housing census in line with the relevant EU legislation and 

international standards;  

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

The  legal  framework  for  statistical  infrastructure  is  largely  in  line  with  the  European 
Statistics  Code  of  Practice.  A  new  law  on  official  statistics,  which  should  enhance  the 
professional  independence  of  the  statistical  office  (SORS),  is  pending  for  several  years.  A 
five-year programme of the official statistics (2021-2025) was prepared in 2020 and adopted 
in March 2021. The administrative capacity of the SORS needs to be further strengthened, as 
its operations remain hampered by the lack of skilled staff and a number of vacant posts. The 
SORS  continued  to  increase  submission  of  data  to  Eurostat,  but  the  coverage  of  data 
submission needs to be further expanded. The main classifications (NACE Rev. 2, ISCO-08) 
are aligned with the EU acquis. Registers are updated regularly.  

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

Regarding  macroeconomic  statistics,  the  SORS  continued  to  compile  quarterly  and  annual 
GDP at current and constant prices. Seasonally adjusted quarterly national accounts are sent 
to Eurostat. In 2020, the process of GDP revision was completed and a revised data series of 
GDP and other national accounts indicators and aggregates from 1995 on was transmitted to 
Eurostat. In 2020, SORS provided Eurostat with non-financial sector accounts for 2015-2019 
and  data  for  the  period  2015-2018  are  published  on  the  Eurostat  webpage.  Quarterly  sector 
accounts have yet to be compiled. Serbia has further advanced work on compiling supply-use 
and input-output tables – the tables for 2018 at current and constant prices were published in 
2020 and transmitted to Eurostat. The SORS sends good-quality monthly data on international 
trade  in  goods  according  to  the  required  breakdown  by  mandatory  partner  country.  The 
compilation  of  trade  by  enterprise  characteristics  (TEC)  data  was  submitted  to  Eurostat  but 
more work is needed to meet all requirements set out in the compilers guide on TEC. In 2020, 
Serbia participated in the voluntary transmission of 2019 trade in goods statistics by invoicing 
currency (TIC) data. These data were consistent and of good quality. The NBS compiles the 
monthly  and  quarterly  balance  of  payments,  as  well  as  quarterly  international  investment 
position data. In 2020, Serbia further improved compilation of data on international trade in 
service (ITSS): it timely transmitted ITSS data for 2019, following official reporting standards 
and providing an almost complete dataset.  The SORS continues to  provide the Commission 
twice a year with notification tables for the excessive deficit procedure (EDP). The number of 
submitted tables increased in 2020; yet the quality and completeness of the EDP notification 
data and the government finance statistics need to be further improved. NBS is setting up the 
system for compiling the financial accounts statistics, but no new data was sent to Eurostat in 
2020. Continued efforts are needed to produce the complete data required by the ESA 2010 
transmission programme.  

With regard to structural business statistics, data coverage is not yet fully in line with the EU 
acquis  but  methods  for  sending  data  have  been  established.  Most  of  the  data  on  internal 
tourism  and  some  data  on  national  tourism  are  collected  and  transmitted.  For  inland 
waterway,  road  and  railway  transport,  data  are  collected  but  need  to  be  further  harmonised 
with  the  EU  acquis.  Air  transport  statistics  are  highly  compliant;  for  the  full  compliance 
dataset  C1  has  to  be  provided  on  a  regular  basis.  Serbia  provided  in  a  timely  manner  the 

71 

 
 
mandatory  research  and  development  (R&D)  data  and  statistics  on  government  budget 
allocation for R&D, some for which transmission is voluntary. Furthermore, for the first time, 
Serbia  also  provided  the  regional  data.  The  Community  innovation  survey  is  conducted 
regularly every two years and the data are sent to Eurostat. The annual surveys on information 
and communication technology (ICT) fully meet EU standards and are carried out regularly, 
covering  households/individuals  and  businesses.  Serbia  is  fully  compliant  for  most  of  the 
short-term business statistics indicators.  

Serbia partially complies with the EU acquis on social statistics. The survey on income and 
living conditions is carried out regularly in compliance with EU standards and data are sent to 
Eurostat.  Serbia  is  fully  compliant  in  social  protection  statistics  and  provide  Eurostat  with 
European System of integrated Social Protection Statistics (ESSPROS) data and metadata of 
very  good  quality  according  to  the  legal  deadlines.  Labour  market  and  labour  cost  statistics 
are  broadly  in  line  with  the  EU  acquis.  Serbia  carries  out  the  labour  force  survey  (LFS) 
according to the regulations and promptly sends good quality micro data to Eurostat (annual 
and quarterly), as well as  LFS quality  reports. The new  LFS questionnaire, which  redefines 
the  concepts  of  employment  and  unemployment,  in  accordance  with  the  new  Eurostat  and 
ILO  regulations  and  recommendations,  is  applied  from  2021.  Further  progress  is  needed  to 
produce good statistics on job vacancies. Public health statistics in line with the EU acquis are 
not  yet  fully  available.  In  particular,  non-expenditure  healthcare  data  are  highly  compliant, 
while  healthcare  expenditure  statistics  are  lacking.  However,  a  European  health  interview 
survey  (EHIS)  was  conducted  in  2019  and  data  submitted  in  2020  in  line  with  the  EHIS 
regulation.  Statistics  on  external  migration  and  asylum  are  collected  by  the  ministry  of 
interior;  they  are  only  partly  harmonised  with  the  relevant  EU  requirements.  Further 
harmonisation is therefore needed. Serbia provides most of the required education statistics. A 
pilot project on the Continuing Vocational Training Survey (CVTS) was started in December 
2020. Serbia progressed in preparing the methodology and the technical specifications for the 
next population and housing census. The law on the census of population from February 2020 
was amended in April 2021. Due to the COVID-19 pandemic, Serbia decided to postpone the 
census from spring 2021 to autumn 2022.  

Regarding  agricultural  statistics,  Serbia  is  highly  compliant  in  producing  crop  statistics. 
Animal production statistics as well as milk and milk  products  statistics are fully  compliant 
with applicable EU regulations. Further efforts are needed in continuing the development of a 
vineyard  register.  Preparations  for  an  agriculture  census  –  postponed  to  2022  due  to  the 
COVID-19 pandemic – are ongoing. SORS still needs to develop and produce supply balance 
sheets according to the Eurostat methodology. 

The  annual  and  monthly  energy  statistics  are  produced  and  sent  for  all  relevant  energy 
sources. Serbia is almost fully compliant in water statistics and transmit good quality data on 
waste statistics to Eurostat. Only the dataset on number and capacity of recovery and disposal 
facilities  is  not  complete,  otherwise  Serbia  would  be  fully  compliant.  Some  environmental 
accounts data are produced and the quality of data increased, but further efforts are needed in 
this  area.  Serbia  is  also  making  progress  in  the  area  of  pesticide  statistics,  but  does  not  yet 
deliver data on fertiliser consumption or gross nutrient balances. 

Chapter 32: Financial control  

The  EU  promotes  the  reform  of  national  governance  systems  to  improve  managerial 
accountability, sound financial management of income and expenditure and external audit of 
public  funds.  The  financial  control  rules  further   protect  the  EU's  financial  interests  
against fraud in the management of EU funds and the euro against counterfeiting. 

72 

 
 
Serbia  is  moderately  prepared  in  this  chapter,  with  good  progress  made  in  the  reporting 
period.  The  Commission’s  recommendations  from  2020  were  largely  implemented.  A  new 
mid-term  approach  on  public  internal  financial  control  (PIFC)  has  been  developed.  It  is 
coherent with the Law on planning system. In addition, building on the lessons learned from 
2019 pilot  projects  on managerial  accountability, all the relevant  guidelines  were developed 
and implementation has started. Also guidelines for reporting of irregularities and handling of 
exceptions were updated in 2020. However, further work on putting in place a comprehensive 
system  for  detecting  and  handling  irregularities  is  required.  Overall,  additional  efforts  are 
needed to embed managerial accountability in the administrative culture and to strengthen the 
functioning of internal control and internal audit. High-level political support remains critical 
for  the  required  shift  to  performance  management  and  implementation  of  PIFC  reforms  in 
entire public sectors.  

In the coming year, Serbia should in particular:   

  ensure full coherence of PIFC legal basis with the horizontal legal framework; 
  start  implementing  peer  reviews  of  internal  audit  arrangements  within  public  funds 

beneficiaries; 

  establish an effective internal audit function in all central budget institutions. 

Public internal financial control (PIFC)  

A new strategic framework for PIFC is broadly in place, with the adoption of the new PAR 
strategy  2021-2030  and  the  new  public  financial  management  (PFM)  reform  programme 
2021-2025. PIFC is now comprehensively covered as a separate pillar embedded in the PFM 
reform programme. The  further development of managerial  accountability is included in the 
accountability and transparency pillar of the PAR Strategy. The effectiveness of the envisaged 
mechanisms  for  coordination,  monitoring  and  reporting  of  the  related  reforms  is  yet  to  be 
assessed in practice. 

In  the  reporting  period,  Serbia  continued  to  focus  on  operationalising  the  principle  of 
managerial  accountability  through  improving  methodological  guidance  on  delegating 
decision-making  and  on  performance  management.  Further  efforts  are  needed  to  fully 
incorporate  managerial  accountability  in  the  administrative  culture  of  the  public  sector. 
Weaknesses  in  performance  management  and  lines  of  accountability  between  independent 
bodies  and  their  parent  institutions  persist.  Serbia  needs  to  address  them  as  part  of  ongoing 
work on PAR (see Public administration reform). Given the fundamental necessity of having 
objectives  linked  to  resources,  the  ministry  of  finance  needs  to  continue  its  active 
participation in actions related to the implementation of managerial accountability.  

The  legal  framework  for  internal  control  is  broadly  in  line  with  the  internal  control 
framework  of  the  Committee  of  Sponsoring  Organisations  of  the  Treadway  Commission 
(COSO).  However,  the  capacities  to  implement  internal  control  standards,  including  risk 
management, have to be further enhanced at both central and local government and be better 
accepted  in  the  administrative  culture  of  the  public  sector.  Serbia  started  to  implement  the 
obligation  for  heads  of  institutions  using  public  funds  to  sign  an  annual  statement  on  the 
status of their internal control systems in January 2021.  

Preparation  of  mid-term  plans,  which  link  overall  government  policy  with  organisational 
objectives, although continued on pilot basis, is behind schedule. A regulation that introduces 
analytical units as basis for further development of performance management came into force 
in  March 2021.The Ministry of  Finance has  a centralised budget  inspection function, which 
needs  to  be  strengthened.  Mapping  the  entire  national  inspection  environment  remains  a 
priority.  

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Internal  audit  practice  is  broadly  in  line  with  international  standards.  However,  not  all 
institutions that are required to establish an internal audit unit have done so and many internal 
audit units do not have sufficient number of auditors. Most central institutions carry out audits 
according  to  strategic  and  annual  audit  plans.  Internal  audit  recommendations  need  to  be 
implemented in a timely manner and the quality assurance of internal audit further developed.  

The  central  harmonisation  unit  (CHU)  continued  to  focus  on  system  development  and 
dissemination  of  methodological  guidance.  It  has  continued  to  conduct  internal  audit  and 
internal  control quality reviews. The quality of the CHU annual  report on the state of PIFC 
implementation  is  improving.  However,  its  use  as  a  tool  to  improve  PIFC  needs  to  be 
enhanced, and timely publication need to be ensured. 

External audit  

Serbia’s  constitutional  and  legal  framework  provides  for  the  independence  of  the  State 
Audit Institution (SAI) in line with the standards of the International Organisation of Supreme 
Audit  Institutions  (INTOSAI).  The  SAI’s  financial  independence  was  respected  during  the 
2021 budget approval process.  

The  SAI  has  currently  331  staff,  including  292  audit  staff,  out  of  a  planned  number  of  431 
posts,  which  represents  an  improvement.  The  SAI’s  institutional  capacity  to  carry  out  its 
core  audit  tasks  is  adversely  affected  by  the  continued  focus  on  the  detection  of  errors  and 
filing of misdemeanour and economic offence and criminal charges against individuals. This 
drains  its  resources  and  affects  its  capacity  to  undertake  its  core  audit  task.  The 
appropriateness of this requirement in SAI law should be reviewed in the medium term. The 
long-standing issue of not having suitable business premises is yet to be resolved.  

The quality of audit work is continuously improving with the support of the dedicated sector 
for audit methodology and quality control.  SAI has maintained increased focus and improved 
capacity  for  performance  audits  with  additional  13  performance  audits  carried  out  in  2020, 
compared to  12 in  2019 and two in  2018. Since 2019, SAI publishes responses to  the audit 
reports and post-audit reports at its website.  

The SAI has continued to increase the impact of its audit work by improving monitoring the 
implementation of its recommendations, cooperation with stakeholders, overall transparency 
of  its  work  and  by  increasing  its  communication  with  the  media.  The  SAI's  activity  report 
continues  to  be  discussed  in  the  relevant  parliamentary  committee,  and  the  recently 
established good practice of discussing it in the plenary, has been maintained. SAI’s internal 
audit unit currently employs one single employee and remains to be properly staffed. 

Protection of the EU’s financial interests  

Serbia has achieved a high degree of acquis alignment, but full harmonisation with the EU 
Directive on the fight against fraud to the EU’s financial interests by means of criminal law 
still needs to be ensured. The 2017-2020 national anti-fraud strategy expired. Serbia is in the 
process of finalising its next national anti-fraud strategy covering 2021-2023. The anti-fraud 
coordination service (AFCOS) in the Ministry of Finance has seven employees, falling short 
of the planned number of 10 staff members. Due to the impact of COVID-19, during 2020, 
the AFCOS conducted eight administrative checks, compared to a total of 18 in 2019. Serbia 
continued  its  good  cooperation  with  the  European  Commission  during  investigations 
including  the  follow-up  of  recommendations.  Serbia  reported  four  irregularities  via  the 
irregularity management system in 2020, out of which one concerns suspected fraud. Serbia 
should  keep  up  its  efforts  in  further  developing  a  solid  track  record  on  cooperation  in 
investigations and reporting of irregularities.  

74 

 
 
 
Protection of the euro against counterfeiting  

In  this  area,  Serbia  has  achieved  a  high  degree  of  acquis  alignment.  The  national  bank  of 
Serbia  carries  out  the  technical  analysis  and  provides  specialised  training  for  the  licenced 
entities  that  perform  authentication  of  euro  coins  and  processing  of  euro  denominated 
banknotes since 1 January 2020. The central bank has formal  cooperation agreements with 
the  European  Commission  on  coins  and  with  the  European  central  bank  on  banknotes. 
Regional cooperation with other central banks is ongoing. Serbia continues to take part in the 
Pericles 2020 programme. 

3. GOOD NEIGHBOURLY RELATIONS AND REGIONAL COOPERATION  

Good  neighbourly  relations  and  regional  cooperation  form  an  essential  part  of  Serbia’s 
European  integration  process  and  contribute  to  stability,  reconciliation  and  a  climate 
conducive to addressing open bilateral issues and the legacies of the past. Serbia maintained 
its engagement in a number of regional cooperation initiatives, such as the Central European 
Free Trade Agreement (CEFTA), Energy Community, Transport Community, the South-East 
European Cooperation Process (SEECP) and the Regional Cooperation Council. 

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 Serbia to speed up the recovery from the aftermath 
of the pandemic, notably to attract investors looking for diversification of supply and shorter 
value  chains  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  socioeconomic  development  and  the 
green recovery of the entire region in the post-pandemic period. Serbia should contribute to 
successfully implement this joint regional vision, with high level of ambition. 

75 

 
 
The Berlin Process summit on 5 July 2021 was an occasion for the Commission to announce 
targeted  assistance  related  to  combating  the  COVID-19  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 
projects,  supported  by  1bn  EUR  in  EU  grants  that  have  leveraged  3.8  bn  EUR  in  loans. 
Despite  good  technical  progress,  the  Western  Balkan  partners  were  not  able  to  conclude 
several  important  agreements  related  to  the  Common  Regional  Market  and  CEFTA  due  to 
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”.   

On  29  July  political  leaders  from  Albania,  North  Macedonia  and  Serbia,  met  to  launch  the 
Open Balkan Initiative, this aims to remove economic barriers between the three countries by 
2023. Two memorandums were signed one on trade facilitation and movement of persons, the 
second on steps towards a single labour market. 

There  are  no  outstanding  issues  concerning  Serbia’s  respect  for  the  Dayton/Paris  Peace 
Agreement. Serbia continues to support Bosnia and Herzegovina’s territorial integrity and its 
path to joining the EU. As envisaged by the Dayton agreement, Serbia continues to develop 
special  relations  with  Republika  Srpska  entity  and  it  publicly  promotes  such  relations.  A 
session of the High Cooperation Council was held in April 2021 and a joint session of the two 
governments took place in May. 
Serbia  has  continued  to  cooperate  closely  with  Bosnia  and  Herzegovina,  Croatia  and 
Montenegro  under  the  Sarajevo  Declaration  Process,  which  aims  to  find  sustainable 
solutions for some 74 000 people who became refugees or displaced persons as a result of the 
armed conflicts in former Yugoslavia in the 1990s. Amongst them, there are still persons who 
are  potentially  entitled  to  receive  pensions.  In  Serbia,  good  progress  has  been  made  on 
implementing the upgraded plan for 7 400 housing units worth EUR 166 million, out of which 
EUR 135 million are funded by the EU and other donors and EUR 31 million are the national 
contribution;  so  far  5 478  housing  solutions  have  been  delivered.   The  final  phase  of  the 
implementation is ongoing and progressing well.  

The  unresolved  fate  of  missing  persons  who  disappeared  in  relation  to  the  conflicts  of  the 
1990s remains a key issue to be solved in the Western Balkans. According to the relevant data 
of  the  ICRC,    9  969  people  were  still  missing  as  a  result  of  the  conflicts  in  the  region.  Of 
these, 6 371 cases are related to the conflict in Bosnia and Herzegovina, 1 968 to the conflict 
in  Croatia  and  1  630  to  the  conflict  in  Kosovo.  10  cases  of  missing  persons  related  to  the 
conflict in Croatia were resolved in 2020 (compared to 51 in 2019 and 17 since January 2021) 
while 32 cases were resolved in relation to the conflict in Bosnia and Herzegovina (14 since 
January 2021). Four cases related to the conflict in Kosovo were resolved in 2020 (compared 
to  eight  in  2019  and  12  since  January  2021).  In  2020,  the  Serbian  Commission  on  Missing 
Persons conducted six reconnaissance visits and six terrain searches of potential locations of 
mass  or  individual  clandestine  graves  in  Serbia,  as  well  as  six  exhumations,  two  re-
exhumations,  nine  identifications  and  it  officially  closed  28  cases  that  were  registered  in 
Serbia’s official register of missing persons. One official meeting took place in October 2020 
with  the  relevant  Croatian  authorities,  during  which  Serbia  informed  about  nine  potential 
locations of clandestine graves. Serbia is considering Croatia’s request to undertake joint field 
work in Serbia. The Serbian Commission on Missing Persons also provided information about 
three potential locations of clandestine graves on the territory of Kosovo through the existing 

76 

 
 
mechanism of cooperation. 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  and  one  in  April  2021  (in  addition  to  one  ad  hoc 
meeting on 2  April). Since April 2021, no meetings of the Belgrade-Pristina working group 
have taken place. 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,  which  allowed  to  exhume  the  human  remains  of  nine 
individuals so far.  

Serbia  remained  overall  committed  to  bilateral  relations  with  other  enlargement  countries 
and neighbouring EU Member States. In the context of the COVID-19 pandemic, Serbia has 
become  a  regional  vaccination  hub  and  has  donated  around  600 000  vaccines  to  the  region, 
including  to  North  Macedonia,  Montenegro  and  Bosnia  and  Herzegovina.  It  has  also 
vaccinated thousands of foreign nationals, mainly from the region.  

Bilateral conventions on regional cooperation (under Article 15 of the SAA) are in force with 
Montenegro and North Macedonia. The convention with Bosnia and Herzegovina, signed in 
2018,  is  yet  to  be  ratified.  Serbia  initiated  the  process  of  concluding  a  convention  with 
Albania.  

Relations  with  Albania  are  good.  In  December  2020,  the  Serbian  Parliament  ratified  the 
agreement liberalising the travel of Serbian and Albanian citizens between the two countries 
by allowing the use of biometric IDs.  

Relations with Bosnia and Herzegovina are stable. In November 2020, the Chairman of the 
House  of  Representatives  of  Bosnia  and  Herzegovina  visited  Belgrade.  In  March  2021,  the 
Serbian  President  flew  to  Sarajevo  to  donate  vaccines,  and  the  Serbian  Foreign  Affairs 
Minister  visited  Bosnia  and  Herzegovina  in  the  same  month.  The  border  demarcation  issue 
between the two countries is still open. The countries also need to reach an agreement on two 
dams on the Drina river and a portion of the Belgrade-Bar railway which crosses into Bosnia 
and Herzegovina.  

Relations with North Macedonia are good. In February 2021, the Serbian President and the 
Prime Minister of North Macedonia met at Tabanovce border crossing for Serbia’s donation 
of  vaccines.  In  March  2021,  the  Minister  of  Foreign  Affairs  of  North  Macedonia  visited 
Belgrade.    

Relations  with  Montenegro  are  strained.  There  were  continued  tensions  in  connection  with 
issues  and  events  linked  to  the  Serbian  Orthodox  Church,  leading  to  an  increase  in 
nationalistic  rhetoric.  In  November  2020,  Serbia  revoked  the  initial  reciprocity  decision  of 
declaring  Montenegrin  Ambassador  a  persona  non  grata.  The  President  of  Serbia  visited 
Montenegro  in  November  2020  to  attend  the  funeral  of  Metropolitan  of  Montenegro.  In 
February  2021,  the  Serbian  Prime  Minister  visited  Podgorica  and  donated  vaccines  to  her 
Montenegrin  counterpart.  In  March  2021,  the  Montenegrin  Minister  of  Health  visited 
Belgrade.  

Relations with Turkey remain good. The Serbian and Turkish Presidents maintained contacts 
and dialogue. In June 2021, the Serbian Prime Minister met with the Turkish President, on the 
margins of a meeting of the South-East European Cooperation Process.   

Relations  with  neighbouring  EU  Member  States  Hungary,  Romania  and  Bulgaria  are 
good. Relations with Croatia continued to be mixed. The border demarcation issue between 
the countries remains unsolved. In December 2020, the Serbian government earmarked EUR 
1 million of assistance to Croatia after the devastating earthquake.  

77 

 
 
4.  NORMALISATION OF RELATIONS BETWEEN SERBIA AND KOSOVO  

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  29  and  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.  

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;  

to  remain  committed 

implemented.  Both  parties  need 

-  As regards the technical dialogue agreements (2011-2012), some are not or only partially 
being 
the  continued 
implementation  of  the  agreement  on  representation  and  participation  of  Kosovo  in 
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;  

to 

78 

 
 
-  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,  Serbia  has  remained  engaged  in  the  dialogue.  However,  the  Serbian  government 
needs  to  uphold  its  commitments  and  commit  to  the  full  implementation  of  past  Dialogue 
agreements. Moving forward, Serbia 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  Kosovo,  including  in  its  international 
relations.  Serbia  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.    ABILITY TO ASSUME THE OBLIGATIONS OF MEMBERSHIP 

CLUSTER 2: INTERNAL MARKET  

This cluster covers chapters 1-free movement of goods, 2-freedom of movement for workers, 
3-right  of  establishment  and  freedom  to  provide  services,  4-free  movement  of  capital,  6-
company law, 7-intellectual property law, 8-competition policy, 9-financial services, and 28-
consumer and health protection. Four chapters have been opened, namely chapters 4, 5, 7 and 
9. Opening benchmarks are yet to be met on chapters 1 and 8. This cluster is key for Serbia’s 
preparations  for  the  requirements  of  the  EU’s  internal  market  and  is  of  high  relevance  for 
early integration and the development of the Common Regional Market. 

Progress was achieved in several areas within the cluster, particularly on legislative alignment 
on company law; freedom of movement for workers, through simplification of issuing work 
permits to third country nationals and coordination of social security systems; and legislative 
alignment  in  the  area  of  establishment  and  freedom  to  provide  services.  No  progress  was 
made  in  the  areas  of  free  movement  of  capital,  financial  services,  and  consumer  and  health 
protection. 

In the coming period, Serbia is invited to focus on the following areas: to adopt an action plan 
to  ensure compliance with  Articles 34-36 of the  Treaty on the Functioning of the European 
Union and a strategy and action plan for implementing the EU acquis  on free movement  of 
goods;;  enhancing  cooperation  with  EU  Member  States  on  coordination  of  social  security 
systems;  setting  up  a  fully  operational  Point  of  Single  Contact  for  regulated  professions; 
liberalising capital movements in line with the obligations under the SAA;  aligning with the 
acquis  on  company  law  and  corporate  accounting;  harmonising  copyright  and  related  rights 
legislation  with  the  EU  acquis;  aligning  the  existing  fiscal  state  aid  schemes  with  the  EU 

79 

 
 
acquis and improving the track record in the area of competition and State aid; implementing 
the laws aligning with the capital requirement acquis in the banking sector; further alignment 
with  the  EU  consumer  protection  and  health  protection  acquis,  including  on  substances  of 
human origin, tobacco and medicines for human and veterinary use.  

Chapter 1: Free movement of goods  

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

Serbia  is  moderately  prepared  in  the  area  of  free  movement  of  goods.  Limited  progress 
was  made  by  adopting  the  law  on  technical  requirements  for  products  and  conformity 
assessment. Serbia implemented one of the recommendations of the 2020 report, by removing 
most  of 
the  Serbian  conformity  mark.  The 
recommendations from last year’s report still largely remain valid. 

the  ‘transitional  provisions’  regarding 

In the coming year Serbia should in particular: 

  ensure  that  all  remaining  ‘transitional  provisions’  on  the  use  of  the  Serbian  conformity 

mark and certificate of conformity after accession to the EU are removed;  

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

  provide  adequate  administrative,  financial  and  human  resources  capacity  for  market 
surveillance, standardisation, the agency for the homologation of vehicles, as well as for 
the implementation of the European Regulation on Registration, Evaluation, Authorisation 
and Restriction of Chemicals (REACH). 

General principles  

On  the  general  principles,  Serbia  still  needs  to  adopt  a  strategy  and  an  action  plan  to 
implement  the  EU  acquis  in  this  chapter  for  both  the  sectoral  (‘new  approach’  and  ‘old 
approach’) and horizontal legislation as well as for relevant organisations. Serbia has removed 
the majority of ‘transitional provisions’ in regard to the use of the Serbian conformity mark 
and certificate of conformity after accession to  the EU from  its legislation;  however, Serbia 
needs to repeal all such provisions.  

Non-harmonised area  

On  horizontal  measures,  Serbia  adopted  a  law  on  technical  requirements  for  products  and 
conformity assessment in May 2021, aiming for full alignment with the EU acquis. An action 
plan  ensuring  compliance  with  Articles  34-36  of  the  Treaty  on  the  Functioning  of  the 
European Union (TFEU) has yet to be adopted.  

Harmonised area: Quality infrastructure  

Key  national  quality  infrastructure  institutions  are  already  well  established  and  regulated, 
maintaining  a  level  of  development  confirmed  by  continuous  membership  in  relevant 
European and international organizations. Room for improvement exists, with shortage noted 
in  financial  and  human  resources  in  the  institutions  dealing  with  the    standardisation 
(technical  committees),  accreditation  (conformity  assessment  bodies),  sanitary  inspection 
(budgeting and human resources) and market surveillance (budgeting), which require further 
strengthening. 

80 

 
 
On  standardisation,  a  shortage  of  technical  experts  at  the  Institute  for  Standardisation 
technical  committees  was  noted  in  a  certain  number  of  fields  (machinery  equipment, 
passenger vehicles, trucks, containers, construction machines and agriculture). As regards the 
adoption of standards, in the fourth quarter of 2020 the Serbian Institute for Standardisation 
adopted 99.58% of the European Committee for Standardisation (CEN) standards, 98.03% of 
the  European  Committee  for  Electrotechnical  Standardisation  (CENELEC)  standards  and 
95.56% of the European Telecommunications Standards Institute (ETSI) standards. As of 30 
June  2021,  1,534  European  standards  and  26  European  deliverables  were  adopted  by  the 
‘translation method’ and the rest’ by the ‘cover page’ method. 

The number of designated conformity assessment bodies in Serbia is currently 59 and out of 
these,  a  total  of  11  are  designated  and  registered  for  carrying  out  conformity  assessment 
according to technical legislation. The obligations regarding certificates for conformity, which 
had  constituted  a  technical  barrier  to  trade,  were  repealed  by  Serbia  for  the  majority  of 
directives. However, a small  number of  certificates of conformity  still applies to  imports of 
goods  such  as  drones,  toys  and  construction  products  such  as  cement,  steel  for  the 
reinforcement of concrete and screws. Removing these certificates of conformity will further 
facilitate  import  procedures  from  the  EU  and  allow  for  the  effective  implementation  of  the 
presumption of conformity for EU-imported goods.  

The number of accredited conformity assessment bodies in Serbia totalled 729, consisting of 
282  accreditated  inspection  bodies,  21  accreditated  certification  bodies  for  certification  of 
products,  16  accreditated  certification  body  for  certification  management  system,  9 
accreditated  certification  body  for  certification  of  persons,  322  accreditated  testing 
laboratories, 63 accreditated calibration laboratories, 14 accreditated medical laboratories and 
two accreditated proficiency testing (PT) providers. In 2021, accreditation was awarded to six 
inspection  bodies,  five  testing  laboratories,one  calibration  laboratory,two  for  certification  of 
persons, while the accreditation was revoked for two testing laboratories and two  inspection 
bodies.  

Concerning  accreditation,  amendments  to  the  law  on  accreditation  were  adopted  in  May 
2021  aiming  at  partial  alignment  with  the  EU  acquis.  In  the  reporting  period,  the 
Accreditation  Body  of  Serbia  (ATS)  expanded  the  scope  of  its  work  to  the  accreditation  of 
certification  bodies  for  assessment  and  verification  of  continuity  of  performance  of 
construction  products  and  for  conformity  assessment  in  the  field  of  construction  products. 
However, it has a lack of experts for accrediting testing laboratories and the efficiency of the 
conformity  assessment  bodies’ 
their  human  resources  need 
testing  procedures  and 
strengthening  

As regards metrology, during the reporting period, the Directorate for Measures and Precious 
Metals (DMDM) focused on its regular activities. The amended law on metrology remains to 
be adopted. DMDM has published 13 new Calibration and Measurement  Capabilities in  the 
field of thermometry in the International Bureau of Weights and Measures (BIPM) database 
KCDB  2.0.  The  number  of  internationally  recognised  standards  for  calibration  and 
measurement stands at 38. Serbia acceded to the Hallmarking Convention on 24 June 2020. 

The human resources capacity  for  market surveillance  totals  350 employees;  however, the 
financial  aspects  and  budgeting  require  additional  strengthening.  In  2020,  the  market 
surveillance authorities carried out 3 409 inspections in the field of electrical equipment, gas 
appliances,  personal  protective  equipment,  radio  equipment,  oil  and  oil  derivatives  and 
general products safety and ordered 257 corrective and restrictive measures for non-compliant 
or unsafe products. Other inspectorates, such as the sanitary, performed inspection on 6 829 
tons of toys, removing unsafe 4.2 tons due to increased levels of phthalate; the environmental 
inspection performed 30 checks on chemicals and biocides products, ordering 17 measures for 
81 

 
 
non-compliance and on 58 000 tons of detergent, removing 0.04 tons due to non-conformity 
with chemical and declaration requirements. There is no available data on relevant initiated or 
resolved judiciary proceedings.  

Harmonised area: sectoral legislation  

No  new  developments  can  be  reported  in  the  area  of  ‘new  and  global  approach’  product 
legislation.  The  legislation  on  cableways,  radio  equipment,  gas  appliances,  pressure 
equipment,  simple  pressure  vessels,  construction  products,  civil  explosives,  pyrotechnic 
articles, eco-design, energy labelling remain partially aligned with the acquis. 

In  the  area  of  the  ‘old  approach  product  legislation’,  no  further  progress  was  made 
regarding alignment to the EU Regulation on the Registration, Evaluation, Authorisation and 
Restriction of Chemicals (REACH) in the reporting period. The administrative and inspection 
capacity  for  implementing  the  REACH,  the  CLP  (classification,  labelling  and  packaging) 
regulation, and the legislation on vehicle homologation requires strengthening.  

On procedural  measures, in June 2020 Serbia adopted and implemented a national  control 
list for dual-use goods designed to be aligned with the EU acquis. In May 2020, Serbia also 
adopted a national list of arms and military equipment designed to be aligned with the EU’s 
common  military  list.  There  was  no  further  progress  on  the  alignment  with  EU  acquis 
regarding  the  return  of  cultural  objects  unlawfully  removed  from  the  territory  of  an  EU 
Member State. 

Chapter 2: Freedom of movement for workers 

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

Serbia  is  moderately  prepared  in  the  area  of  freedom  of  movement  for  workers.  Some 
progress was made on last year’s recommendation to enhance cooperation with EU Member 
States  on  coordination  of  social  security  systems.  In  addition,  Serbia  simplified  further  the 
issuance of work permits to third country nationals and continued to carry out preparations for 
joining the European network of employment services (EURES).  

In  the  coming  year,  Serbia  should  in  particular  continue  to  enhance  cooperation  with  EU 
Member States on coordination of social security systems. 

Amendments  to  the legislation  on  access  to the  labour market  adopted  in  December 2020 
further simplified the procedure for issuing work permits to third country nationals. Namely, 
through the establishment of a single administrative post, a single request for both temporary 
residence and work permit can now be done at the same place, at the Ministry of the Interior, 
while the formal legal procedures remain separate. Procedures for issuing work permits to EU 
citizens,  who  are  currently  covered  by  rules  for  third  country  nationals,  need  to  be  further 
simplified.  In  2020,  almost  13  000  permits  were  issued,  of  which  more  than  2  300  to  EU 
citizens.  

Serbia’s  National  Employment  Service  has  continued  to  carry  out  preparations  for  joining 
EURES, notably by organising EURES-related training sessions for the staff of its migration 
services centres and by upgrading its information system. 

Regarding the coordination of social security systems, bilateral agreements are in place with 
19  EU  Member  States.  There  were  no  developments  in  negotiations  on  the  electronic 
exchange  of  social  security  data  with  Germany,  Italy,  Hungary,  and  Poland,  while  several 
meetings were held with Austria and Bulgaria. Electronic exchange of social security data is 
operational  with  Slovenia,  Croatia,  North  Macedonia  and  Montenegro.  Overall,  legislative 

82 

 
 
and technical conditions for social security institutions to cooperate with their counterparts in 
EU Member States need to be further improved.  

There  were  no  developments  on  the  European  Health  Insurance  Card.  So  far,  Serbia 
concluded agreements on the use of the card with nine EU Member States. 

Chapter 3: Right of establishment and freedom to provide services  

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

Serbia  is  moderately  prepared  in  these  areas.  Some  progress  was  made  on  the  right  of 
establishment  and  freedom  to  provide  services  with  the  adoption  of  all  planned  bylaws  on 
postal  services.  The  Commission  recommendations  from  2020  nonetheless  remain  largely 
valid. 

In the coming year, Serbia should in particular: 

  adopt  the  horizontal  law  on  services,  complete  harmonisation  of  sectoral  laws  with  the 
horizontal law and the EU acquis and establish a Point of Single Contact via a portal that 
offers  online  information  to  service  providers,  including  on  all  relevant  administrative 
procedures;  

  complete  the  alignment  of  the  postal  services  law  with  the  EU  acquis  and  reinforce  the 

capacity of the postal services inspectorate; 

  continue harmonisation on mutual recognition of professional qualifications.  

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

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

The  law  on  postal  services,  which  entered  into  force  in  November  2019,  is  partly  aligned 
with the Postal Services Directive but maintains a reserved area for the provision of universal 
service. Nine by-laws related to the law on postal services have been adopted in 2020. Serbia 
still needs to align its national legislation with  the Regulation on cross-border parcel delivery 
services.  

In  terms  of  administrative  capacity,  the  number  of  staff  in  the  postal  services  inspectorate 
increased from three to five strengthening its regulatory function of the postal sector. In 2020, 
one designated universal  service provider and 50 other operators were  active in  the Serbian 
postal and courier market. 

In  the  field  of  mutual  recognition  of  professional  qualifications,  the  Serbian  law  on  the 
recognition of professional qualification, adopted in September 2019, and the amendments to 
the law on planning and construction are under review to ensure their full alignment with the 
EU  acquis.  Serbia  needs  to  continue  aligning  all  its  relevant  sectoral  legislation  to  ensure  a 
full alignment with the EU acquis.  

83 

 
 
Chapter 4: Free movement of capital  

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

Serbia remains  moderately  prepared on free movement of capital.  No  progress  was made 
during the reporting period. Last year’s recommendations thus remain valid. 

In the coming year Serbia should in particular: 

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

Association Agreement (SAA); 

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

financial intelligence, investigation and reporting. 

As regards capital movements and payments, the agricultural law still does not provide EU 
citizens and Serbian citizens with the same conditions in terms of acquiring agricultural land. 
It is, as such, not compliant with the SAA. Certain restrictions on capital movements remain 
for  reasons  of  public  policy  and  macro-financial  stability.  These  must  be  justified,  targeted 
and proportionate and should be gradually lifted. On 17 December 2020, Parliament adopted 
the  digital  property  act  regulating  the  issuance,  use  and  surveillance  of  cryptocurrencies.  It 
does not aim to align with any existing EU legislation.  

On  payment  systems,  [more  than  25  million  (26  062  288)]  transactions  were  processed 
during  2020  through  the  instant  payment  system  introduced  in  October  2018.  On  18  June 
2020,  instant  payments  were  introduced  also  at  online  point-of-sales  for  merchants  through 
the usage of QR-codes.  

No changes were made to align the law on multilateral interchange fees and special operating 
rules for card-based payment transactions with the acquis and SAA obligations (See Chapter 
8 – Competition policy).  

On the fight against money laundering and terrorism financing, Serbia remains subject to 
MONEYVAL’s enhanced follow-up procedure until the country is placed back under regular 
follow up based on an assessment of the progress made.  

In March 2021, the  authorities appointed  coordinators to  monitor the implementation  of the 
national strategy on anti-money laundering and counter terrorism financing for 2020-2024 and 
the accompanying action plan. 

In  17  December  2020,  amendments  were  adopted  to  the  law  on  prevention  of  money 
laundering  and  terrorism  financing  to  align  it  with  the  new  digital  property  act  regulating 
cryptocurrencies.  

The  administrative  capacity  of  the  administration  for  the  prevention  of  money  laundering 
(APML)  decreased  from  37  to  35  employees  (full  staffing  being  at  42).  In  2020,  2  276 
suspicious  transactions  were  reported.  The  highest  number  came  from  banks,  with  1  026 
reports  on  suspicious  clients.  The  APML  submitted  information  on  276  reports  to  relevant 
enforcement authorities. Altogether 97 reports were submitted to the prosecution services.  

Chapter 6: Company law  

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

84 

 
 
Serbia has a good level of preparation in company law. Good progress was made during the 
reporting  period  through  the  adoption  of  by-laws  to  the  law  on  accounting  and  the  law  on 
auditing,  with  the  securities  commission  now  fully  established  as  the  public  audit  oversight 
body. Further alignment is needed in the company law area.  

In the coming year, Serbia should in particular: 

  further  align  with  the  acquis  on  company  law,  including  on  company  takeovers  and  on 

shareholder rights; 

  take further legislative steps to align on transparency requirements for listed companies. 

As regards company law, Serbia’s legislation is largely aligned with the EU acquis, although 
no  relevant  legislative  amendments  were  adopted  during  the  reporting  period.  On  company 
takeovers, full alignment is planned in 2021 through the adoption of a new law on takeovers 
of joint stock companies and related legislation. Serbia is drafting an amendment to its Law 
on  companies  to  align  with  the  acquis  on  long-term  shareholder  engagement.  Further 
alignment  is  needed  with  the  2019  company  law  acquis  on  the  use  of  digital  tools  and  on 
cross-border operations.  

Serbia’s corporate governance code is based on EU best practice and OECD principles. The 
Serbian business registers agency acts as a one-stop shop, where companies obtain a unique 
registration and tax identification number and online access to company information; it also 
allows  for  electronic  registration  of  the  establishment  of  limited  liability  companies.  The 
database  of  companies  in  the  business  register  should  be  ready  to  interconnect  with  EU 
Member States’ business registers in the future.  

A  new  Law  on  capital  market  is  currently  being  drafted  aiming  at  addressing  outstanding 
alignment with the Transparency Directive for listed companies. The Securities Commission 
is the ‘officially appointed mechanism’. 

Concerning  corporate  accounting,  eight  rulebooks  were  adopted  in  June  2020  and  one  in 
November  2020,  contributing  to  the  implementation  of  the  amendments  to  the  law  on 
accounting,  adopted  in  October  2019.  All  by-laws  to  the  law  on  accounting  have  now  been 
adopted. During 2021, the new financial reporting rules will become applicable to around 250 
000 companies. In line with the new law, biannual dialogues take place between the Ministry 
of  Finance  and  accounting  and  auditing  entities  facilitated  by  the  chamber  of  certified 
auditors.  The  Law  on  Accounting  contains  provisions  aimed  at  aligning  with  the  Non-
Financial  Reporting  Directive.  As  regards  auditing,  four  out  of  five  by-laws  to  the  law  on 
auditing, amended in October 2019, were adopted during the reporting period. The securities 
commission has accordingly fully taken over the role of sole public audit oversight body.  

Chapter 7: Intellectual property law 

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

Serbia has a good level of preparation on intellectual property rights. Limited progress was 
made with the adoption of the law on trade secrets and preparation of amendments to the law 
on patents. Recommendations from last year’s report remain valid.  

In the coming year Serbia should in particular: 

85 

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

rights management and on orphan works;  

  adopt  amendments  to  align  with  the  regulation  on  the  supplementary  protection 

certificates (SPC) manufacturing waiver to the Law on patents;  

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

different stakeholders. 

Serbia is in the process of drafting a new law on copyrights and related rights with the aim 
to  ensure  full  alignment  with  the  acquis,  including  in  the  areas  of  collective  rights 
management and orphan rights.  

On  industrial  property rights,  in  May  2021,  Serbia  adopted  a  law  on  trade  secrets  further 
aligning Serbia’s legislation with the EU acquis in this field. The Intellectual Property Office 
remains relatively well staffed and efficient in registering trademarks.  

Concerning  enforcement,  the  overall  number  of  employees  in  the  market  inspectorate 
increased from 338 to 350 in 2020 while the number of market inspectors specialised in the 
field of intellectual property decreased from 47 to 40. The overall amount of counterfeit and 
pirated goods confiscated by the inspectorate increased in 2020, while the number of requests 
submitted  by  economic  operators  slightly  dropped.  The  number  of  customs  officers 
specialised  in  intellectual  property  protection  recovered  to  14  in  2020  from  13  officers  the 
year  before.  The  number  of  items  detained  by  the  customs  administration  increased 
substantially in 2020, while the number of destroyed items dropped significantly. The number 
of inspectors specialised in intellectual property rights within the tax administration dropped 
significantly  from  12  in  2019  to  only  four  in  2020,  while  the  special  prosecution  for 
cybercrime  office  obtained  two  additional  assistant  prosecutors.  The  number  of  software 
legality checks carried out by the tax administration remained stable in 2020. Due to judges 
not being adequately specialised and the increasing number of incoming cases, the capacities 
of the judiciary to handle intellectual property rights cases remains limited.  

Legislation  aiming  at  full  harmonisation  with  the  EU  directive  on  the  enforcement  of 
intellectual  property  rights  is  still  pending.  The  coordination  body  for  the  enforcement  of 
intellectual  property  rights  that  was  renewed  in  September  2019  met  four  times  since.  Two 
new working groups of this coordination body were established in March 2020. A dedicated 
platform for information exchange among intellectual property rights enforcement institutions 
is  being  established.  Implementation  of  the  goals  under  the  strategic  framework  for 
intellectual  property  rights  for  2018-2022  should  continue,  mainly  focusing  on  stakeholder 
coordination and awareness raising activities.  

Chapter 8: Competition policy 

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

Serbia  is  moderately  prepared  in  the  area  of  competition  policy.  Limited  progress  was 
made  during  the  reporting  period  on  legislative  alignment  of  state  aid  rules  with  the  EU 
acquis  (adoption  of  implementing  legislation)  and  on  strengthening  the  administrative 
capacities of the Commission for State Aid Control (CSAC). No progress was made towards 
the  alignment  of  the  fiscal  state  aid  schemes  and  the  law  on  multilateral  fees  and  special 
operating rules for card-based payment transactions with the EU acquis and SAA obligations. 
Last year’s recommendations therefore remain valid.  

86 

 
 
In the coming year, Serbia should in particular: 

  align the existing fiscal state aid schemes and the law on multilateral interchange fees and 
special operating rules for card-based payment transactions with the EU acquis and SAA 
obligations;  

  ensure that the notification and the standstill obligations are systematically respected for 
all state aid measures and provide a solid track record in the implementation of laws on 
protection of competition and state aid control; 

  complete  an  inventory  of  existing  State  aid  measures  and  define  an  action  plan  for  the 
alignment of all existing aid schemes identified as incompatible with the SAA obligations. 

Antitrust and mergers  

The  legislative  framework  is  broadly  in  line  with  Articles  101  and  102  TFEU  and  related 
provisions of the SAA. The current law on protection of competition provides for an ex ante 
control  of mergers. Three block exemption  regulations providing further  alignment with  the 
EU  acquis  are  in  the  adoption  process  with  the  Government.  However,  the  legislative 
framework has yet to be fully brought in line with EU guidelines and communications in this 
area.  No  progress  has  been  made  on  the  preparation  of  a  new  law  on  protection  of 
competition. On the law on multilateral interchange fees and special operating rules for card-
based payment transactions, no progress was made in  aligning article 9 of this law with the 
EU acquis and the relevant provisions of the SAA.  

Regarding  the  institutional  framework,  the  Commission  for  Protection  of  Competition 
(CPC) is the legally independent authority responsible for implementing the legal framework. 
Over the past years, the CPC has built a reputation of an operationally independent institution. 
However, the transparency of the institution’s work remains to be strengthened and decisions 
should be systematically published.  

Concerning enforcement capacity, the CPC has 56 employees of which 30 are case handlers 
with  an  adequate  level  of  expertise.  On  implementation,  the  CPC  has  continued  to 
investigate a significant number of antitrust cases. In 2020, the CPC adopted six decisions on 
restrictive  agreements  and  one  on  abuse  of  dominant  position.  Furthermore,  due  to  several 
legal  disputes and proceedings ongoing  involving Telekom Srbija, relating to alleged unfair 
competitions  practices,  the  CPC  investigated  in  particular  the  individual  exemption  of  a 
restrictive  agreement  between  Telenor  and  the  state-owned  Telekom.  The  CPC  reached  a 
positive  decision  in  April  2021,  strongly  contested  by  competitors.  The  decision  was 
published  on  14  October  2021.  A  total  of  18  dawn  raids  in  the  context  of  five  cases  were 
conducted during the reporting period, while the leniency programme was not used. The level 
of imposed fines remained significant with around EUR 535 million, yet substantially lower 
than  in  2018  (over  EUR  3.8  billion).  There  were  no  mergers  prohibited  and  no  remedies 
imposed  in  merger  cases  during  the  reporting  period.  So  far,  the  CPC  has  not  delivered  a 
negative  opinion  on  concentration.  The  CPC  published  a  total  of  seven  sector  enquiries  in 
2020 concerning the international  rail freight  transport market,  wholesale  market  of mineral 
fertilisers,  tour  operators  market,  sugar  and  sugar  beet  production  and  wholesale  markets, 
retail sector (non-specialised stores with food, beverages and tobacco) as well as oil and oil 
derivatives  market.  Another  two  sector  inquiries  are  ongoing  in  intercity  bus  transportation 
market  and  market  for  primary  education  textbooks.  Competition  advocacy  activities  have 
continued, mainly through online outreach due to the COVID-19 crisis. The CPC issued five 
opinions  on  draft  legislation  in  2020.  The  practice  of  consulting  the  CPC  on  all  relevant 
legislation should be reaffirmed and their opinions systematically and seriously applied. The 
number  of  CPC  decisions  upheld  by  appeal  courts  continued  to  increase.  The  capacity  and 

87 

 
 
specialisation  of  the  judiciary  to  deal  with  complex  competition  cases  remains  modest  and 
needs to be significantly improved.  

State aid  

Regarding  the  legislative  framework,  the  new  law  on  state  aid  control,  which  entered  into 
force on January 1, 2020, is broadly in line with the EU acquis and the relevant provisions of 
the SAA. Five decrees were adopted on regional and de minimis aid, aid in culture, horizontal 
aid as well as rescue and restructuring aid. Four decrees established a temporary framework 
on  state  support  to  the  economy  in  the  context  of  the  COVID-19  crisis,  including  through 
subsequent  amendments.  The  CSAC  also  adopted  guidelines  on  regional  aid  and  two 
rulebooks on state aid reporting and on state aid schemes inventory by June 2021. However, 
further  alignment  is  needed  as  regards  implementing  legislation.  The  existing  aid  schemes, 
most notably the fiscal state aid schemes established by the laws on corporate income tax, on 
personal  income  tax  and  on  free  zones,  are  not  yet  harmonised  with  the  EU  acquis.  A  new 
inventory of schemes is under preparation by the CSAC. Drafting of the regional aid map is 
still pending.  

On the institutional framework, the CSAC is responsible for implementing the law on state 
aid control. The law secured the CSAC’s legal independence, which the commission needs to 
demonstrate now by adequately implementing the law. The CSAC is now accountable to the 
parliament.  

The  CSAC’s  enforcement  capacity  was  significantly  strengthened  during  the  reporting 
period, totalling now 22 members of staff including the president, four council members and 
11 case handlers. The CSAC is allowed to employ up to 27 staff members in addition to the 
president and council members. 

The  implementation  of  the  law  on  state  aid  should  be  strengthened.  In  particular,  the 
notification and the standstill obligations are not being systematically respected and state aid 
is occasionally provided to economic operators, particularly foreign investors, without a prior 
approval of the CSAC. The number of decisions taken upon notification in 2020 significantly 
decreased from 167 in 2019 to 38. In February 2021, through the effective work of the CSAC, 
the long standing case relating to  the  Zelezara Smederevo steel  plant was  closed. This  is  of 
particular importance since it was one of the opening benchmarks for Chapter 8. The number 
of  decisions  in  ex  post  procedure  also  decreased  from  13  in  2019  to  one  decision  in  2020. 
Companies complain that state aid complaints are not always being followed up. The CSAC 
did not prohibit any state aid or decide in favour of recovery. No conditional decisions were 
adopted.  The  number  of  CSAC  decisions  that  were  appealed  against  remained  low.  A 
specialised electronic platform is being developed to help monitor compliance regarding the 
cumulation of aid. The CSAC should closely monitor the implementation of state aid rules in 
intergovernmental agreements concluded with third countries. Advocacy activities among aid-
granting  authorities  were  intensified  in  2020,  but  awareness  regarding  state  aid  rules  still 
remains  to  be  addressed  systematically.  Serbia  needs  to  ensure  that  the  allocation  of  state 
funds  under  the  post  COVID-19  economic  recovery  framework  is  conducted  in  a  non-
discriminatory and transparent way.  

Liberalisation  

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

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Chapter 9: Financial services  

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

Serbia  remains  moderately  prepared  in  the  area  of  financial  services.  No  progress  was 
made during the reporting period. Last year’s recommendations thus remain valid. 

In the coming year, Serbia should in particular: 

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

introduction at EU level;  

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

insurance.   

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

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

The application of the international financial reporting standards (IFRS), applicable as of 1 
January 2018, has been completed. Banks will continue to implement IFRS as adopted at 
international level under NBS’s supervision. The level of non-performing loans continued to 
decrease (gross NPL ratio of 3.6% at the end of June 2021)   

Regarding  insurance  and  occupational  pensions,  there  have  been  no  developments.  New 
legislation on compulsory traffic insurance is still missing.  

Preparatory work is ongoing in the context of aligning with the Solvency II directive in line 
with  the  strategy  for  implementation,  also  supported  by  EU  funds.  Certain  provisions  were 
already implemented regarding qualitative requirements under pillar 2, but further work is still 
to be carried out to ensure full alignment with the EU acquis.  

Alignment is still to be completed as regards the Directive on the activities and supervision of 
institutions  for  occupational  retirement  provision  in  the  areas  of  cross-border  activities, 
investment rules and regulation of technical provisions.  

No progress was made regarding financial market infrastructure.  

On  securities  markets  and  investment  services,  the  planned  adoption  of  amendments  to 
align the capital market Law with the markets in financial instruments Directive (MiFID  II) 
and the Directive on settlement finality in payment and securities settlement systems (SFD) is 
still  outstanding.  Non-EU  related  amendments  were  adopted  on  17  December  2020  to  the 
Law on the capital market regarding personal rules for single prospectus relating to the debt 
security.  

The administrative capacity of both the Ministry of Finance and of the Securities Commission 
in this area remains weak. 

Chapter 28: Consumer and health protection  

EU rules protect consumers’ economic interests and in relation to product safety, dangerous 
imitations and liability for defective products. The EU also ensures high common standards 
for tobacco control, blood, tissues, cells and organs, and as well as medicines for human and 
89 

 
 
veterinary use. The EU also ensures high common standards for upholding patients’ rights in 
cross-border  healthcare  and 
including 
communicable diseases. 

tackling  serious  cross-border  health 

threats 

Serbia is moderately prepared in consumer and health protection. No progress was made on 
implementing the recommendations of the previous report, which remain valid.  

In the coming year, Serbia should in particular:   

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

market surveillance and sanitary inspection; 

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

the public health insurance fund; 

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

control, and on medicines for human and for veterinary use. 

Concerning general aspects of consumer protection, Serbia’s legislation is partly aligned to 
the EU acquis on consumer protection. The new law on consumer protection was amended in 
September 2021, aiming at partial alignment with the Directive on package travel and linked 
travel arrangements. The national council for consumer protection was re-established by the 
new government in February 2021, though it is yet to hold its first meeting. Serbia initiated 16 
collective redress proceedings based on consumer complaints in 2020 and three in 2021. Out 
of  these,  six  decisions  to  terminate  proceedings  were  initiated  and  one  corrective  statement 
imposed  on  traders  were  put  into  effect  with  no  decisions  on  imposed  legal  measures 
concerning violation of collective interest of consumers.  

There  are  24  registered  consumer  organisations  in  the  Ministry  of  trade,  tourism  and 
telecommunications’  registry  24.  In  2020  nine  of  these  with  programmes  in  the  field  of 
consumer  protection  were  selected  for  financing  by  the  ministry  for  four  administrative 
regions. A registered list of 13 alternative dispute resolution bodies (ADRs) exists, including 
the national  bank of Serbia as ADR for financial  institutions, and the regulatory  agency for 
electronic  communications  (RATEL)  for  disputes  between  subscribers  and  electronic 
communications operators and between consumers and postal operators.  

Out-of-court  settlements  are  still  voluntary  for  both  consumers  and  traders.  A  general 
overview on initiated and concluded proceedings does not exist for all ADR bodies in charge 
of alternative consumer disputes, following the number of complaints filed by consumers,   

The  cooperation  between  ministries  and  consumer  organisations  stagnates,  while  consumer 
protection organisations would benefit from further promotion of their work and activities to 
the  general  public.  The  authorities’  administrative  capacity  for  consumer  protection, 
inspection  services  for  consumer  protection  and  for  product  safety  issues  still  needs 
strengthening, as well as the institutional setting and protection of consumer protection rights 
and interests at the local government level. Amendments to the law on consumer protection 
need  to  be  adopted  which  should  address  unfair  commercial  practices,  contract  terms  and 
vulnerable consumers.  

There  were  no  developments  regarding  product  safety-related  issues.  Regarding  market 
surveillance,  the  sanitary  inspection’s  administrative  capacities  need  strengthening.  The 
product  safety  council  did  not  hold  any  sessions  in  2021.  In  2020  the  market  inspection 
registered  18  consumer  complaints,  while  in  the  same  period  the  National  Register  of 
Consumer  Complaints  registered  622  product  safety  related  complaints,  including  food.  In 
2020,  the  market  surveillance  authorities  carried  out  3  409  product  inspections  covering 
general product safety and ordered 257 corrective and restrictive measures for non-compliant 

90 

 
 
or  unsafe  products.  There  is  no  data  available  on  relevant  initiated  or  resolved  judiciary 
proceedings.  

On  non-safety-related  issues,  Serbia´s  legislation  is  partly  aligned  with  the  EU  acquis  on 
package  travel  and  linked  travel  arrangements.  Further  alignment  with  the  EU  acquis 
regarding  cooperation  between  national  authorities  responsible  for  enforcing  consumer 
protection  laws,  multiannual  consumer  programmes,  regulations  on  package  travel,  online 
resolutions of consumer disputes, and alternative resolution of consumer disputes is also  yet 
to be achieved.  

In 2020, in the capacity of an ADR in charge of financial institutions, the National Bank of 
Serbia  (NBS)  received  a  total  of  3  561  cases,  of  which  2  143  complaints,  202  mediation 
requests  and  1  216  questions.  It  issued  six  decisions  on  individual  complaints,  ordering  a 
financial service provider to eliminate irregularities, one decision ordering a financial service 
provider to  eliminate irregularities without imposed fines  and three fines were issued to  the 
financial service providers. The NBS also resolved 12 mediation proceedings, fined one bank 
on advertising campaign irregularities, and issued two letters of warning to the bank based on 
competences  derived  from  conversion  of  housing  loans  indexed  to  Swiss  Francs  and  two 
letters of warning related to unfair contract terms to a bank. The banks frequently self-correct 
irregularities  prior  to,  or  during  the  procedure  of  correcting  irregularities  imposed  by  the 
relevant NBS decisions. 

In the area of public health, Serbia’s legislation on healthcare is partly aligned with the EU 
acquis.  The  sustainability  of  the  public  health  insurance  fund  still  needs  to  be  ensured.  The 
national plan for human resources in the health sector has not been implemented even though 
over 2,500 health professionals were newly employed due to the COVID-19 crisis. The EU-
funded centralised electronic health record system is still not being used and compliance with 
EU health indicators is not yet ensured.  

Tobacco control legislation is partly aligned with EU acquis, but the use of tobacco in public 
places is  not  aligned with  EU standards. A strategy on tobacco control needs to  be adopted 
and the implementation of pictorial warnings on cigarette packets, smoke-free environments 
and increases in the price of cigarettes in line with EU obligations needed to be ensured.  

On blood, tissues, cells and organs, laws on the transplantation of cells and tissues, and on 
human  organ  transplantation  were  adopted,  both  designed  to  be  fully  aligned  with  the  EU 
acquis.  The  implementation  of  these  laws,  foreseen  in  2019,  has  not  yet  commenced.  EU-
level quality, safety standards and inspection services still need to be developed. The overall 
administrative and technical capacity of the directorate for biomedicine to conduct oversight 
of the sector as the competent authority is still very limited.  

Serbian legislation is partly aligned with the EU acquis on the application of patients’ rights 
in cross-border healthcare. An e-health unit at the ministry of health should be established 
to  coordinate  the  complex  activities  involved  in  setting  up  a  comprehensive  health 
information system at all levels of care.  

On  serious  cross-border  health  threats,  including  communicable  diseases,  surveillance 
and  response  capacity  remains  limited  and  requires  modernisation.  In  2020,  amendments  to 
the Law on protection of population from communicable diseases were adopted to overcome 
practical  problems  faced  in  applying  legislation  relevant  to  the  COVID-19  pandemic.  A 
centralised health information and communication system has yet to be implemented. 

Regarding  communicable  diseases,  attention  needs  to  be  given  to  effective,  sustainable 
financing  of  disease-specific  strategies,  including  the  national  HIV/AIDS  strategy,  and  to 
raising  awareness,  particularly  on  the  importance  of  child  vaccination.  Additional  work  is 

91 

 
 
needed  on  surveillance  of  anti-microbial  resistance,  quality  control,  and  standardisation  of 
laboratories.  The  prescription  of  antibiotics  needs  to  be  strictly  controlled  to  strengthen  the 
fight against anti-microbial resistance.  

In  response  to  the  COVID-19  pandemic,  Serbia  applied  measures  foreseen  by  the  law  on 
population  protection  against  infectious  diseases.  Serbia  aligned  its  actions  with  the 
recommendations  of  the  World  Health  Organization.  On  11  January  2021,  Serbia  started  a 
successful  three-phase  vaccination  campaign  following  the  vaccination  operational  plan 
published by the national institute of public health. Citizens can apply for vaccination via the 
e-government  platform  by  choosing  their  preferred  vaccine.  In  February  2021  300  mass 
vaccination  points  were  opened  throughout  the  country,  including  in  all  primary  healthcare 
centres and even shopping centres, and with constant deliveries of vaccines made available by 
the government by early-September, 40% of the population were fully vaccinated.  

Regarding the  capacity  of the health system in dealing  with  the COVID-19 pandemic, the 
national institute of public health, in cooperation with the ministry of health and the relevant 
health  institutions,  monitored  the  epidemiological  status  of  the  disease,  kept  the  public 
informed, and issued guidelines and standard operating procedures to health institutions and 
to  all  entrance  points  into  the  country.  The  Belgrade  university  clinic  for  infectious  and 
tropical diseases is the relevant referral institution for public health threats due to infectious 
agents.  Other  secondary  and  tertiary  health  institutions  with  their  own  infectious  disease 
departments  (a  total  of  41  general  hospitals  and  eight  clinical  centres)  and  a  network  of  25 
institutes of public health monitored the public health situation in the country on a daily basis. 
As  the  epidemic  struck,  many  hospitals  were  pronounced  exclusive  COVID-19  facilities, 
treating only those infected with SARS-Cov-2. In primary health care, 158 municipal health 
care centres were tasked with primary prevention, and temporary COVID-19 clinics were set 
up  in  each  of  them  with  examination  and  testing  facilities  for  all  citizens.  A  number  of 
temporary  health  care  facilities  were  set  up  by  army  forces  in  fairgrounds  and  sports  halls 
throughout  the  country,  hosting  more  than  1  650  people  at  the  peak  of  the  epidemic.  In 
addition to these, two special intensive care COVID-19 hospitals were opened in December 
2020 in Belgrade and Kruševac with a total capacity of 1 500 beds. This was instrumental in 
dealing with the December and March epidemic waves. A third 500-bed COVID hospital is 
being built in Novi Sad to become operational in September 2021. 

However, the system still suffers from a lack of resources on all levels, due to the previous 
constant  outflow  of  professional  workforce.  Although  the  counter-epidemic  measures 
implemented  by  the  government  were  well-devised,  weaknesses  of  the  existing  system 
became  evident.  Serbia  lacked  resources  in  terms  of  personal  protection  equipment  and 
medical  equipment,  medical  expertise,  and  laboratory  testing  capacities  as  well  as  data 
processing  and  contact  tracing.  This  led  to  a  large  number  of  medical  personnel  testing 
positive  for  the  virus  ultimately  with  many  fatalities.  Strong  government  efforts  directed  at 
alleviating  these  shortages  toward  the  seventh  week  of  the  outbreak  in  the  country  such  as 
numerous  procurements  of  equipment  and  employment  of  2,500  new  healthcare  personnel 
during March/April 2020, had favourable results.  

The  European  Centre  for  Disease  Prevention  and  Control  (ECDC)  shares  all  its  COVID-19 
related  guidance  and  assessments  with  Serbia.  Serbia  also  joined  the  European  COVID-19 
Surveillance  Network,  reporting  COVID-19  data  to  the  European  Surveillance  System 
(TESSy).The  ECDC  focal  point  in  Serbia  was  active  before  the  start  of  the  epidemic  and 
reported  promptly  daily  on  the  state  of  affairs.  The  EU  invited  Western  Balkan  partners  to 
join the EU joint procurement agreement to procure medical countermeasures. Serbia signed 
the  agreement  on  21  April  2020  and  ratified  it  in  December  2020.  Serbia  is  an  observing 

92 

 
 
member  of  the  EU  Health  Security  Committee  since  2017  and  has  access  to  the  EU  Early 
Warning and Response System for all information related to the COVID-19 pandemic.  

Health  promotion  regarding  non-communicable  diseases  is  still  not  at  an  advanced  level. 
Cancer screening for colorectal, breast and cervical cancers is slowly progressing. In many 
regions  of  the  country  it  is  not  performed  in  a  systematic  manner.  The  cancer  register  is 
maintained by the national institute for radiology and oncology.  

There is still a need to develop community-based mental health services and progress needs 
to  be  made  regarding  nutrition  and  physical  activity.  Serbia  should  continue  to  address 
health promotion and disease prevention, including mental health in order to reach the United 
Nations Sustainable Development Goals and the targets of the World Health Organisation on 
non-communicable diseases. 

There were no developments on medicines for human and veterinary use, or on maximum 
sale price criteria for medicines, neither on preventing drug abuse. Regarding the prevention 
of harmful use of alcohol, a national programme to reduce the harmful effects of alcohol and 
alcohol-induced disorders has been adopted.  

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

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

CLUSTER 3: COMPETITIVENESS AND INCLUSIVE GROWTH  

This cluster covers chapters 10-information society and media, 16-taxation, 17-economic and 
monetary  policy,  19-social  policy  and  employment,  20-industrial  policy,  25-science  and 
research, 26-education and culture, and 29-customs. Five chapters are open (chapters 17, 20, 
25, 26 and 29) and two are provisionally closed (chapters 25 and 26). No opening benchmarks 
are  left  to  be  met  on  any  of  the  chapters  within  this  cluster.  This  cluster  and  the  reforms 
concerned have significant links to Serbia’s Economic Reform Programme. 

Progress  was  achieved  in  some  of  the  areas  under  this  cluster,  particularly  in  the  area  of 
taxation, through removing the discrimination  in  taxation of imported alcohol; social policy 
and  employment,  through  aligning  further  with  the  EU  acquis;  industrial  policy,  through 
adoption  of  an  action  plan  for  the  implementation  of  the  industrial  strategy;  scientific  and 
technological development, via adoption of a new strategy for 2021-2025; and in the area of 
education, 
the  national 
qualifications framework operational.  

the  academic  curricula  and  rendering 

through  modernising 

In the coming period, Serbia is invited to particularly focus on the following areas:  align to 
the EU electronic communication code and ensure implementation of competitive safeguards 
and  market  operators’  access  to  the  electronic  communication  infrastructure;  make  progress 
towards  alignment  in  the  areas  of  VAT,  excise  duties  and  direct  taxation;  strengthen  fiscal 
rules by making them more binding and capable of anchoring fiscal policy; ensure adequate 
financial and institutional resources for employment and social policies; make further efforts 
to  improve  the  predictability  of  the  business  environment;  increase  the  national  funding  for 
research and innovation; and ensure full compliance of the policy and institutional framework 
for  quality  assurance  in  higher  education  with  the  recommendations  of  the  European 
Association for Quality Assurance in Higher Education (ENQA). 

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Chapter 10: Information society and media  

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

Serbia  is  moderately  prepared  in  the  field  of  information  society  and  media.  Limited 
progress was made concerning digitalisation in the area of e-government and in aligning to 
EU  digital  single  market  objectives,  along  with  initiatives  on  development  of  ultra-fast 
broadband infrastructure in the rural areas and support to digitalisation of schools. However, 
the recommendations of the last report remain valid.  

In the coming year, Serbia should in particular: 

  align  the  electronic  communications  legislation  with  the  updated  EU  regulatory 

framework, including the new European electronic communications code;  

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

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

In the context of digital single market objectives, efforts were noted towards regulating the 
broader  digital  economy  environment.  A  set  of  laws  intended  to  fight  grey  economy  and 
create  more  favourable  digital  economy  environment  were  adopted.  E-commerce  saw 
significant  increase  in  Serbia  due  to  the  pandemic,  but  the  abuse  of  electronic  platforms 
increased as well. Solutions employed in the amended Law on electronic document, electronic 
identification and trust service in electronic business take into account the facilitation of cross 
border  electronic  transactions  in  the  field  of  electronic  identification  and  qualified  trust 
services.  It  considers  solutions  for  implementing  recognised  EU  electronic  identification 
schemes  along  with  issuing qualified electronic  certificates for signature to  foreign citizens. 
The Council for the promotion of development of the digital economy, innovation, high-tech 
entrepreneurship and digitalisation of business economic entities was established. The action 
plan for implementation  of the 2020-2027 smart  specialization strategy for the period 2021-
2022 and an action plan for the implementation of the 2021-2030 industrial policy strategy for 
the  period  2021-2023  were  adopted,  aiming  to  improve  digital  skills  and  raising  the 
competitiveness  of  Serbian  industry  by  improving  digitalisation  of  business  models  of 
industrial  production.  The  digital  gap,  notably  with  the  senior  and  marginalised  population, 
needs to be addressed.   

The research and development institute for artificial intelligence operating as a public service 
institution  was  established,  in  line  with  the  2020-2025  strategy  for  the  development  of 
artificial intelligence. It is important that Serbia aligns with EU policies on the ethical use of 
artificial intelligence in this respect. 

The first phase of the ultra-fast broadband communication infrastructure roll-out in rural areas 
was  initiated  with  the  aim  of  boosting  the  accessibility  of  underserved  areas  to  digital 
infrastructure. However, the law on broadband has yet to be adopted. 

Efforts towards a more centralised approach to digitalisation were noted; a more universal and 
coherent  approach  to  digitalisation,  in  line  with  an  open  and  competitive  single  market  and 
strong rules embedding European values is recommended along with effective coordination of 
the various stakeholders and consistent digital single market policy implementation.  

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When it comes to regional aspect, Serbia proclaimed adherence to the policy priorities of the 
digital  agenda  for  the  Western  Balkans.  Further  progress  was  made  on  implementing  the 
regional roaming agreement, with the next phase of abolishing tariffs coming into force as of 
1 July 2021. During the Western Balkans digital summit in Tirana in November 2020, Serbia 
signed  the  Memorandum  of  Understanding  on  interoperability  and  trust  services.  It  is 
important  that  Serbia  signs  and  implements  the  memorandum  of  understanding  on  a  5G 
roadmap for digital transformation, which aims at further aligning with the implementation of 
the EU toolbox of risk mitigation measures on the security of 5G networks.   

In  the  field  of  electronic  communications  and  information  technology,  the  law  on 
electronic communications has yet to be adopted. The new management board of the national 
regulator  RATEL  was  elected  with  no  further  developments  concerning  the  regulator’s 
operational 
the  regulator’s 
administrative  capacities  either,  which  nevertheless  require  strengthening,  notably  on 
performing market analysis.  

independence.  There  were  no  developments  concerning 

Concerning the implementation of competitive safeguards, difficulties with access for users-
operators  to  infrastructure  including  optical  fibres,  ducts,  poles  and  public  operators’  dark 
fibres,  along  with  restrictions  imposed  by  the  environmental  and  municipal  planning 
legislation, persist - in particular at local government level. The line ministry’s administrative 
capacity and the inspection capacities remain low and require strengthening.  

Serbia is preparing ground for the 5G frequency auction, announced for the end of 2021 by 
adopting relevant radio frequency allotment secondary legislation in the 700, 3400 and 3800 
MHz frequency bands.    

Activities  towards  needs  assessment  for  the  introduction  of  the  112  European  emergency 
number calling system according to EU standards have started; however, the system has yet to 
be fully implemented. 

In the field of information society services, the legal framework on the law on e-government 
remains  to  be  completed  in  order  to  allow  for  its  full  implementation.  The  number  of 
databases connected to the new government service information system has increased, as well 
as  a  number  of  services  at  the  upgraded  national  e-government  portal.  These  services  now 
feature, among others, COVID-19 vaccination appointments for domestic and foreign citizens 
alike,  issuance  of  green  digital  vaccination  certificates,  e-citizenship  services  for  local  and 
foreign  citizens,  e-consulate  services  for  working  visa  applications  as  well  as  local  tax 
government  e-notifications  for  the  first  time.  The  number  of  interoperable  public  registers 
providing  for  easier  exchange  of  data  increased,  and  the  central  population  register  was 
activated, including data from 13 official registers such as the birth and death certificate, the 
citizenship  certificate,  various  tax  administration  certificates  etc.  Concerning  open  data,  the 
address register codebook has become available for use to the widest range of users without 
restrictions.  There  is  further  potential  to  improve  the  data  presented  on  the  country’s  open 
data portal in a machine-reading language.   

The  new  cutting-edge  technology  data  centre  in  the  city  of  Kragujevac  was  officially 
inaugurated in December 2020; it uses Microsoft technologies for the platform for collection 
and  processing  of  data  from  various  public  sources.  Serbia  now  has  two  data  centres, 
including the one in Belgrade. 

In  the  field  of  information  security,  the  2021-2026  strategy  for  development  of  information 
society and information security with the accompanying action plan for the period 2021-2023 
remains to be adopted. The regulator RATEL, as the national computer emergency response 
team  (CERT),  would  benefit  from  upgrading  its  cybersecurity  administrative  capacities  as 

95 

 
 
well  as  from  further  association  to  expert  groups  of  the  European  Union  agency  for 
cybersecurity (ENISA). 

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

The  regulatory  authority  for  electronic  media  (REM)  still  fails  to  exercise  its  full  mandate 
through  effectively  monitoring  and  penalising  broadcasters  that  do  not  meet  all  programme 
content obligations under the law. The REM council worked for several months with all nine 
members  but  returned  again  to  incomplete  capacity  as  one  of  the  members  resigned,  after 
criticising the election of the president of REM council in December 2020 as non-transparent.  
This vacancy was filled  in in May 2021. Another vacancy was filled in July 2021, bringing 
the  REM  Council  to  full  capacity.  REM´s  financial  stability  and  staff  capacity  remain  a 
concern, and its lack of independence needs to be addressed more rigorously. 

The  financial  independence  and  stability  of  the  public  broadcasters  have  been  reinforced: 
Radio Television Serbia (RTS) has for the first time in five years been removed from the state 
budget  funding, (although the possibility is  available throughout  2021 by the amended  Law 
on public media services, which was fully compensated by the 17% increase in subscription 
fees  for  public  broadcasters.  Radio  Television  Vojvodina  (RTV)  has  remained  on  the  state 
budget support. 

RTS is still not fulfilling its obligation as the national broadcaster to provide enough relevant 
content for all national minorities: content intended for national minorities is limited to only 
one news programme in Albanian on RTS2. 

In  an  effort  to  improve  media  literacy,  the  Ministry  of  culture  and  information  produced  a 
series  of  videos  on  media  literacy.  They  were  broadcasted  by  both  public  broadcasters  in 
between online lessons during COVID-19 remote learning. 

Chapter 16: Taxation  

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

Serbia  is  moderately  prepared  in  the  area  of  taxation.  Good  progress  was  made  with  the 
amendment  of  the  law  on  excise  duties  removing  a  long-standing  discrimination  in  the 
taxation  of  imported  alcohol,  and  with  further  activities  in  the  implementation  of  the 
programme of transformation of the Tax Administration. Last  year’s recommendations were 
thus partially implemented. 

In the coming year, Serbia should: 

  continue  with  implementation  of  the  tax  administration  reform  programme  in  order  to 
streamline  the  tax  administration’s  activities  while  ensuring  sufficient  human  and  IT 
resources for this purpose, improve tax collection and combat the informal economy; 
  make progress towards legislative alignment in the areas of VAT, excise duties and direct 

taxation.     

In the area of indirect taxation, amendments to the Law on VAT were adopted in December 
2020.  Furthermore,  the  Law  on  fiscalisation  was  adopted  in  December  2020.  It  aims  at 
modernising  the  process  of  VAT  collection  and  increasing  the  efficiency  of  the  control  and 
fight against grey/informal economy. The law will be applicable as of January 2022. Specific 
and ad valorem excise duties continue to be applied on tobacco products and the minimum is 

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set  twice  a  year.  The  amendments  to  the  Law  on  excise  duties  were  adopted  in  December 
2020  with  the  adjustment  of  excise  duties  as  of  January  2021  and  adoption  of  the  plan  of 
adjustments for the period 2021-2025. Excise duties on fuels are only partly harmonised with 
the EU acquis. The additional amendments to the Law on excise duties adopted in May 2021 
removed the discrimination in the application of excise duties on imported spirits. The Law on 
excise duties, however, remains to be brought fully in line with the EU acquis.  

With regard to direct taxation, amendments to the Law on income tax and Law on corporate 
tax and a new Law on digital property were adopted in December 2020. The latter regulates 
digital property market, addresses the misuse of digital property for criminal acts, and allows 
for  financing  and  development  of  the  financial  market  through  digital  technology.  The 
amendments  to  the  Law  on  income  tax  aim  to  further  reduce  the  tax  wedge  on  salaries  by 
increasing  the  threshold  for  non-taxed  monthly  income  in  order  to  stimulate  the  increase  in 
salaries  and  the  creation  of  new  jobs.  The  amendments  were  adopted  through  regular 
parliamentary procedures. Nevertheless, business associations warn that insufficient time was 
given  for  public  consultations,  including  on  specific  fiscal  secondary  legislation.  Proper 
public consultation are important for a good business environment. The numerous para-fiscal 
charges  remain  high  and  non-transparent,  lacking  rationalisation,  and  thus  undermining  the 
predictability and stability of Serbia’s tax system. This is an impediment for local economic 
development.  In  response  to  the  COVID-19  pandemic,  the  government  adopted  three 
packages  of  financial  assistance  in  2020  and  2021  that  included,  among  others,  deferrals  of 
personal income tax and social contributions as well as postponement of profit tax payment.  

As regards  administrative cooperation and mutual assistance, Serbia has  double taxation 
agreements  with  26  EU  Member  States  (no  agreement  with  Portugal).  Serbia  remains 
committed to apply the OECD base erosion and profit shifting minimum standards.  

Efforts to improve operational capacity and computerisation of the tax administration and 
to fight tax evasion, notably on VAT and excise duties, have resulted in better tax collection. 
The  Tax  Administration  still  lacks  administrative  capacity  and  adequate  staffing;  however, 
concerning  the latter the situation has somewhat improved with recruitment of over 100 staff 
in  2020.  Serbia  accelerated  implementation  of  the  2015-2020  general  programme  for 
transformation of the tax administration, and the revised 2018-2023 action plan. In May 2021, 
the government adopted the new tax administration transformation programme with the action 
plan for the period 2021-2025. The number of field offices was reduced from 78 to 37 since 
July 2019. Some non-core activities were transferred to other bodies  or  assigned to a  “non-
core  activities  sector”  still  within  the  tax  administration.  The  large  tax  payers’  office  was 
partly  reorganised.  The  strategic  risk  department  has  intensified  its  activities.  A  number  of 
training  sessions  were  organised  in  2020  but  the  planned  programme  was  not  fully 
implemented due to the COVID-19 pandemic. Further efforts are still needed to improve the 
predictability and consistency of tax decisions and to provide timely and good quality services 
to tax payers. Appeal procedures against tax administration decisions remain lengthy. 

Chapter 17: Economic and monetary policy 

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

Serbia  is  moderately  prepared  and  has  established  a  good  institutional  and  administrative 
framework  in  the  area  of  economic  and  monetary  policy.  Limited  progress  was  made  in 
economic policy coordination, in particular due to the context of the introduction of measures 
to  mitigate  the  effects  of  the  COVID-19  pandemic.  The  implementation  of  the  budgetary 
procedure was impacted by the COVID-19 crisis. No progress was made with strengthening 
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fiscal rules, largely due to the pandemic; this should be addressed as a matter of priority. The 
recommendations from last year’s report therefore remain valid. 

In the coming year, Serbia should take measures to: 

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

ensure its full independence;  

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

policy.   

On monetary policy, the legal  framework for the NBS is well developed. According to the 
law, price stability is the NBS’s principal objective, fully in line with the primary objective of 
the European System of Central Banks. The public sector does not have privileged access to 
financial  institutions.  However,  in  September  2020,  NBS  bought  about  40%  of  five-year 
corporate bonds of state-owned Telekom Srbija  (worth  approximately EUR 200 million) on 
the  secondary  market  immediately  after  their  issuance,  raising  concerns  of  the  lack  of 
transparency  and  potential  avoidance  of  state  aid  rules.  Further  efforts  are  needed  to 
comprehensively ensure the independence of NBS and prohibition of monetary financing in 
line with the EU acquis.  

With  regard  to  economic  policy,  further  alignment  with  the  Directive  on  Requirements  for 
budgetary frameworks is needed. The overall institutional environment related to the budget 
process has stabilised, but remains challenging. Due to the crisis, the presentation of the fiscal 
strategy was delayed until late November 2020 and the submission of the 2021 draft budget to 
parliament was delayed to early December 2020. Despite the delayed submission of the 2021 
draft  budget,  there  was  a  more  substantial  parliamentary  debate  than  in  the  previous  years. 
The  authorities  submitted  the  report  on  the  final  annual  budget  execution  for  2019  to  the 
parliament,  which  adopted  it  as  a  law.  The  alignment  of  fiscal  reporting  with  the  European 
system  of  national  and  regional  accounts  (ESA  2010)  is  incomplete  but  slowly  improving. 
Programme budgeting needs to be strengthened and administrative and IT capacity bolstered. 
Fiscal  rules are weak, non-binding and unable to anchor  fiscal  policy. The adoption of new 
fiscal  rules  was  further  delayed.  The  Fiscal  Council  is  an  independent  institution,  which 
actively participates  in  debates on economic and  fiscal  policy. A new member of the  Fiscal 
Council was approved by the parliament in December 2020.  

In  response  to  the  COVID-19  pandemic,  both  economic  and  monetary  policy  had  to  be 
adjusted,  and  appropriate  measures  have  been  taken  in  the  immediate  aftermath  of  the 
beginning  of  the  crisis.  Two  more  sets  of  support  measures  followed  in  autumn  2020  and 
early  spring  2021.  While  overall  the  measures  have  very  significantly  contributed  to  the 
mitigation  of  the  economic  impact  of  the  crisis,  the  second  and  third  fiscal  packages  could 
have been more targeted to limit the increase of general government deficit and debt. 

The 2021-2023 economic reform programme was submitted on time. As in previous years, 
its analytical diagnostics were well prepared. The structural reform framework is coherent and 
sufficiently  comprehensive.  The  implementation  of  some  of  the  key  reforms  has  been 
delayed,  partly  due  to  the  COVID-19  pandemic.  The  new  programme  lacks  ambition, 
particularly  in  the  energy  sector.  Further  efforts  are  needed  to  improve  the  capacity  for 
economic planning and inter-institutional coordination as well as budgeting. 

Chapter 19: Social Policy and employment 

Serbia  is  moderately  prepared  in  the  area  of  social  policy  and  employment.  Limited 
progress was made in aligning further with the EU acquis. After a decrease in 2020, budget 
allocations  for  active  labour  market  policies  decreased  further  in  2021.  Last  year’s 
recommendation on this matter remains therefore valid.  

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In the coming period, Serbia should in particular: 

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

  significantly strengthen the bipartite and tripartite social dialogue at all levels; 
  ensure timely implementation of the action plan for chapter 19, in particular on adopting a 

new labour law and a new law on health and safety at work. 

In the field  of  labour law, the law of 2014 is  only partially  aligned  with  the EU  acquis. A 
new  law  on  the  right  to  strike  has  yet  to  be  adopted.  The  proportion  of  undeclared  work 
decreased slightly (18.2% in 2019; 16.4% in 2020). This is mainly a statistical effect as the 
informal sector in services was most hit by the COVID-19 pandemic. Labour inspections have 
focused  on  tackling  undeclared  work,  but  do  not  yet  have  a  significant  impact.  The  law  on 
inspection  oversight  still  needs  to  be  amended  to  comply  with  the  relevant  International 
Labour Organization Conventions that were ratified by Serbia, notably to ensure that labour 
inspectors are empowered to enter workplaces freely and without giving notice. 

In the area of  health and safety at work, a law on health and safety  at  work has  yet  to  be 
adopted. Serbia adopted implementing legislation on health and safety measures on exposure 
to  biological  agents  and  on  work  in  surface  and  underground  mineral-extracting  industries. 
After a record number of fatalities in the workplace in 2018 (53) and 2019 (54), the number of 
fatal  injuries  in  2020  fell  below  50,  with  the  majority  of  cases  occurring  again  in  the 
construction industry.  

Social  dialogue  remains  weak,  in  particular  regarding  the  involvement  of  social  partners  in 
policy  developments  relevant  to  them.  Serbia  still  needs  to  adjust  the  legal  framework  and 
strengthen  the  capacity  of  social  partners  to  foster  collective  bargaining.  Sectoral  collective 
agreements  are  typical  in  the  public  sector,  with  11  currently  concluded  agreements. 
However,  they  are  hardly  concluded  in  the  private  sector,  with  only  two  sectoral  collective 
agreements. In the second half of 2020, the minimum hourly wage was increased by 6.6% for 
2021 by means of a government decision, as consensus could not be reached within Serbia’s 
Economic  and  Social  Council.  The  latter  needs  to  be  consulted  in  due  time  on  new  policy 
initiatives and draft laws in order to be able to fulfil its role. 

On  employment  policy,  the  employment  rate  for  20-64  year  olds  increased  from  65.2%  in 
2019 to 65.9% in 2020. The COVID-19 pandemic led to a decrease in the unemployment rate 
and an increase in the inactivity rate as individuals who were unable to search for a job or to 
start working due to the sanitary prevention measures now appear in the inactive part of the 
population instead of the unemployed one. Unemployment of 15-74 year olds decreased from 
10.5%  in  2019  to  9.1%  in  2020,  while  the  inactivity  rate  increased  from  31.9%  in  2019  to 
32.3%  in  2020.  Youth  unemployment  (15-24  year  olds)  decreased  from  27.5%  in  2019  to 
26.6%  in  2020  but  remains  high,  while  the  share  of  young  people  (15-29  year  olds)  not  in 
employment,  education  or  training  (NEET)  increased  from  19%  to  20%  in  2020.  Serbia 
continued  to  implement  the  “My  First  Salary”  programme,  which  aims  at  activating  young 
people  without  prior  work  experience.  A  monthly  benefit  of  RSD  20  000  (EUR  170)  is 
granted  for those who  finished high school  and take up an internship or  employment in the 
public  or  private  sector,  and  of  RSD  24  000  (EUR  204)  for  those  who  graduated  from 
university. In 2020, some 8 000 young individuals participated in this programme. Serbia has 
endorsed  the  Western  Balkans  Declaration  of  8  July  2021  on  ensuring  sustainable  labour 
market  integration  of  young  people  and  committed  to  take  concrete  steps  to  gradually 
establish and implement the Youth Guarantee scheme. Serbia initiated preparations to be able 
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to pilot the Youth Guarantee, by setting up in May 2021 an inter-ministerial task force, and 
requested assistance to develop a Youth Guarantee implementation plan in line with the EU 
model.  Long-term  unemployed  people,  women,  young  people  and  low-skilled  workers  still 
face  severe  challenges  integrating  into  the  labour  market.  Measures  aimed  at  promoting  the 
employment of Roma have yet to deliver results. After a decrease in 2020, budget allocations 
for active labour market policies decreased further in 2021. They are by far too low to cover 
the number of jobseekers. A new national employment strategy for 2021-2026 was adopted in 
February 2021  and its accompanying three-year  action plan 2021-2023 in  March 2021. The 
latest available report on the implementation of the employment and social reform programme 
dates from February 2021 and covered the 2019 period. 

To address the economic impact of the COVID-19 pandemic, the government adopted several 
packages of fiscal support measures, including wage subsidies for all companies. Employment 
safeguard  measures  were  not  complemented  by  support  to  the  unemployed  and  inactive 
workers. 

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

In  the  area  of  social  inclusion  and  social  protection,  in  2019,  7%  of  the  population  was 
considered to be living in absolute poverty (7.1% in 2018). According to the latest survey on 
income and living conditions (SILC), the at-risk-of-poverty rate was 23.2% in 2019 (EU-27 
16.5%) and the at-risk-of-poverty or social exclusion rate was 31.1% (EU-27 21.1%). As in 
previous years, there is more poverty in rural areas than in urban areas. Every tenth employed 
person  (9.2%)  is  at  risk  of  poverty,  which  means  that  they  cannot  fulfil  their  basic  needs, 
despite  working.  Some  47.7%  is  subjectively  poor  (an  improvement  from  58.4%  in  2018), 
namely they respond to  the question on the possibility for a household to ‘make ends meet’ 
with ‘difficulty’ and ‘great difficulty’, positioning Serbia at the bottom of the list of European 
countries  that  conduct  SILC  surveys.  Inequality  in  income  distribution  is  high  and  stood  at 
33.3% of the Gini coefficient according to income in 2019 (35.6% in 2018), which was above 
this coefficient in EU-27 (30.2%). The income quintile ratio was at 6.5 in 2019 (8.58 in 2018). 
This  means that the richest  20% of the population  had  an income 6.5 times higher than the 
20% of the poorest. In the same period, the value of the quintile ratio in the EU-27 was 4.99. 
The consequences of the COVID-19 pandemic on vulnerable individuals  need to  be closely 
monitored. There have been no measures designed specifically for the protection of the most 
vulnerable.  The  impact  of  social  transfers  on  poverty  reduction  is  with  18.02%  in  2019  far 
below the EU-27 average of 32.38%. 

A law on social cards was adopted in February 2021. It aims at a fairer distribution of social 
assistance and a reduction of abuse through the establishment of a single social card register, 
connecting  various  public  databases  and  enabling  an  overview  of  the  social  and  material 
status of beneficiaries. A new strategy for social protection for 2019-2025 and amendments to 
the law on social welfare are still pending. In 2020, two and a half years after the beginning of 
the  implementation  of  the  law  on  financial  support  to  families  with  children,  the 
Constitutional  Court  determined  that  certain  provisions  of  this  law  were  not  in  accordance 
with  the  constitution.  The  coverage  and  adequacy  of  cash  benefits  to  provide  for  essential 
needs is insufficient to cover essential needs. In addition, the quality and coverage of service 
need to improve, and oversight and regulatory mechanisms, monitoring and evaluation should 
be  strengthened.  No  progress  was  made  in  local-level  social  care  services  or  in  the  de-
institutionalisation  process.  The  system  of  earmarked  transfers  introduced  in  2016  by  the 
social  welfare  law  is  still  not  implemented  systematically  and  transparently.  Budgetary 
allocations  are  available  annually,  but  without  multi-annual  commitments  that  would  allow 

100 

 
 
for  the  continuity  of  service  provision  at  local  level  and  for  an  evidence-based  system  of 
priority setting and monitoring of results.  

to 

In  the  field  of  non-discrimination  in  employment  and  social  policy,  Serbia  adopted 
in  May  2021.  The  Equality 
amendments 
Commissioner’s 2020 report underlined that out  of 112 complaints on discrimination on the 
grounds  of  ethnicity,  94  were  filed  by  Roma,  with  the  main  issues  being  access  to 
employment and sources of income. 

law  prohibiting  discrimination 

the 

In  the  area  of  equal  opportunities  between  women  and  men  in  employment  and  social 
policy, Serbia adopted a new law on gender equality in May 2021. The employment rate for 
men (20-64  year olds) is  14 percentage points higher and their activity rate 13.8 percentage 
points  higher  than  those  for  women.  Women’s  inactivity  reflects:  i)  unpaid  work  in  the 
household,  including  care  of  children,  sick  and/or  elderly  people;  ii)  inadequate  support  in 
reconciling  work  and  family  responsibilities;  iii)  employers’  discriminatory  treatment  of 
young  women;  iv)  the  existing  wage  gap;  v)  lower  statutory  retirement  age;  and  vi)  the 
existence of a statutory minimum base for social insurance contributions, which discourages 
formal  part-time  work.  Although  the  legislation  grants  both  maternity  and  paternity  leaves, 
gender-based stereotypical preconceptions persist about childcare and household work being a 
woman's  responsibility.  The  lack  of  state  services  for  childcare  in  rural  areas  increases  the 
amount of unpaid household work for women. The first ever gender analysis of the monetary 
value  of  unpaid  care  work  in  Serbia  confirmed  the  burden  of  unpaid  care  work  on  women. 
The  analysis  showed  that  annual  monetary  value  of  unpaid  care  work  performed  in 
households, mostly by women, is EUR 9.2 billion or 21.5 % of Serbia’s GDP. Women have 
been at the frontline of the COVID-19 pandemic, as healthcare, shop and pharmacy workers. 
As  a  result  of  the  crisis,  7%  of  employed  women  lost  jobs  or  were  made  to  take  leave 
compared to 4% of employed men. 

Chapter 20: Enterprise and industrial policy 

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

Serbia  is  moderately  prepared  on  enterprise  and  industrial  policy.  Some  progress  was 
made, in particular by adopting an action plan for the strategy on industrial policy.   

In the coming year, Serbia should in particular: 

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

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

  adopt a new SME and entrepreneurship policy strategy; 
  reallocate  budgetary  resources  for  FDI  incentives  to  financial  and  technical  support  to 

SMEs. 

With  regard  to  industrial  policy,  a  strategy  for  the  industrial  development  2021-2030  was 
adopted  in  March  2020.  The  strategy  puts  an  emphasis  on  replacing  the  current  model  of 
competitiveness  based  on  cost  advantage  (i.e.  cheap  low-skilled  workforce)  by  skill-based 
advantage,  i.e.  knowledge-based  industries.  The  2021-2030  strategy  introduces  a  mix  of 
horizontal policy measures implemented in six areas in order to achieve a set of far-reaching 
goals.  An  action  plan  for  the  implementation  of  the  strategy  for  the  first  three  years  (2021-
2023) was adopted in April 2021. The action plan defines specific measures and activities, the 
main  institutions  for  the  implementation  of  measures,  and  the  appropriate  indicators, 
timeframes  and  budgets.  The  action  plan  builds  on  the  findings  of  the  smart  specialisation 

101 

 
 
strategy, adopted in February 2020. The dedicated action plan for smart specialisation strategy 
was adopted in April 2021. 

On  enterprise  policy,  the  implementation  of  the  strategy  to  support  the  development  of 
SMEs, entrepreneurship and competitiveness 2015-2020 was finalised. An independent mid-
term evaluation of the strategy was conducted in early 2019. A new strategy was announced 
for 2020, but is yet to be adopted. Serbia’s legislation is largely aligned with the EU acquis on 
combating  late  payments  in  commercial  transactions.  Serbia  needs  to  continue  its  efforts 
towards full alignment in order to further improve its business environment. As a response to 
the  COVID-19  pandemic,  the  government  adopted  a  set  of  measures  –  deferral  of  tax 
obligations,  payment  of  salaries  to  employees  primarily  aimed  at  assisting  SMEs,  access  to 
additional  loans  –  which  all  aimed  to  alleviate  the  negative  consequences  of  the  crisis  for 
businesses. The governance reform and restructuring of industrial state-owned enterprises and 
privatisation  are  awaiting  implementation.  By  December  2020,  the  number  of  companies  in 
the  privatisation  process  stood  at  79  as  the  process  slowed  down  due  to  the  COVID-19 
pandemic.  The  intention  is  to  sell  10  to  20  companies  in  2021;  some  of  them  have  already 
been identified and the process has been launched. 

Enterprises  in  Serbia  identify  corruption  and  problems  in  the  exercise  of  the  rule  of  law, 
including  shadow  economy,  as  key  obstacles  to  the  investment  climate  and  economic 
development.  Serbia  also  needs  to  increase  predictability  in  the  business  and  administrative 
environment,  in  particular  for  SMEs.  To  this  end,  performance  measurements  for  policy-
making  activities  should  be  developed  and  more  emphasis  put  on  implementing  the  ‘think 
small  first’  principle.  The  regulatory  impact  assessment  with  the  SME  test  needs  to  be 
systematically  carried  out  when  formulating  laws  and  secondary  legislation.  A  multiannual 
reform aimed at optimising and improving the transparency of all administrative procedures is 
under  way.  Proposals  for  optimising  these  procedures  are  drafted  in  consultation  with  the 
private sector. After attempting to streamline and increase transparency as regards the system 
of  para-fiscal  charges  in  2018  through  the  Law  on  fees  for  the  use  of  public  goods,  some 
charges (e.g. the environmental fee) were (re)introduced, without proper public consultation. 
The lack of transparency in adopting such (secondary) legislation negatively affects business 
predictability.  In  particular,  government  decisions  in  a  number  of  businesses-relevant  areas 
are occasionally taken without appropriate consultation and under such time constraints that 
businesses  do  not  have  sufficient  time  to  plan  their  operations  under  new  rules.  In  general, 
though  the  business  environment  is  gradually  improving  businesses  need  to  be  better 
informed about regulatory changes and be invited to provide input in the legislative process.  

On enterprise and industrial instruments, Serbia continues to use budgetary subsidies for 
newly  created  jobs  as  an  incentive  for  foreign  direct  investments.  This  approach  is  not 
consistent with its industrial policy goal of privileging value added over labour cost and with 
the continued weakness  in  supplier development.  The budget  for SME measures is  growing 
but remains modest compared to the amounts of state aid and tailor-made services offered to 
large investors. The lack of specialised support and advisory services for businesses limits the 
possibilities  of  domestic  companies  to  modernise  and  qualify  as  suppliers  to  multi-national 
enterprises.  Favourable  loans  and  guarantees  for  SMEs  are  provided  by  the  ministry  of 
economy  and  the  development  fund  through  joint  programmes  with  commercial  banks, 
including  through  the  EU  programme  for  the  competitiveness  of  small  and  medium-sized 
enterprises  (COSME)  and  the  Instrument  for  Pre-accession  Assistance.  These  programmes 
provide  financial  support  for  the  purchase  of  equipment,  financial  support  to  start-ups,  and 
financial  support  for  development  projects.  Nevertheless,  access  to  finance  by  start-ups 
continues  to  constitute  an  impediment  to  their  growth.  Serbia  participates  in  the  COSME 
programme for SMEs with participation in COSME’s major actions like Erasmus for Young 

102 

 
 
Entrepreneurs and the Enterprise Europe Network. With regard to payment discipline, Serbia 
should  align  its  rules  on  payments,  indemnity  interest  rates,  expedited  recovery  procedures 
and compensation with the EU Directive in this area.  

In sectoral policies, the current support for investment continues to prioritise manufacturing. 
Until recently, the approach in  policy-making was  not  sector-specific, with  the exception of 
tourism. This has changed as four sectors were identified in the smart specialisation strategy 
as  having  the  highest  growth  potential  among  industries:  wood  and  furniture,  rubber  and 
plastic together with two of the priority industries, which are food processing and machinery 
and equipment. 

Chapter 25: Science and research 

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

Serbia is at a good level of preparation in the area of science and research. Some progress 
was made with the adoption of the new strategy on scientific and technological development 
for  the  period  2021-2025  and  the  action  plan  for  the  implementation  of  the  smart 
specialisation strategy. The national level of investment in research remains low and was even 
reduced. 

In the coming year, Serbia should in particular: 

  increase the national funding for research and innovation; 
  transpose  the  European  research  infrastructure  consortium  (ERIC)  Regulation  into 

national law; 

  address the actions of the European Research Areas. 

On research and innovation policy, the main priorities of the European Research Area are 
incorporated  in  the  new  strategy  on  scientific  and  technological  development  2021-2025, 
adopted  in  February  2021.  In  April  2021,  Serbia  adopted  an  action  plan  for  the 
implementation  of  the  Smart  Specialisation  Strategy  (S3).  The  Science  Fund,  established  in 
2018, is fully operational as a funding mechanism. The action plan for the implementation of 
the  strategy  for  the  development  of  artificial  intelligence  for  the  period  2020-2025  was 
adopted in June 2020. 

The  national  level  of  investment  in  research  remains  low  at  0.89  %  of  GDP  with  only  one 
third of this amount coming from the private sector. Serbia should continue to integrate with 
the  new  European  Research  Area,  in  accordance  with  its  plan  to  increase  investment  into 
research and innovation by 50 % in the next five years, also given the relevance of innovation 
to the Economic and Investment Plan for the Western Balkans. 

Regarding the EU framework programme and international cooperation, Serbia continues to 
be  active  and  participate  successfully  in  Horizon  2020  as  well  as  in  EUREKA,  COST  and 
NATO science and peace for security programmes. 

With  regard  to  measures  for  the  Innovation  Union,  the  Serbian  innovation  fund  and  the 
science  and  technology  parks  (STP)  in  Belgrade,  Niš  and  Čačak  continue  to  be  active  with 
increased  contributions  from  the  budget.  The  STP  in  Novi  Sad  is  in  the  second  phase  of 
construction. As the private sector continues increasing its investment in research, significant 
steps are needed on the public side to support cooperation between businesses and academia. 
Serbia scores high in the European innovation scoreboard. However, research and innovation 
expenditures of the private business sector remain too low.  

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Chapter 26: Education and culture  

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

Serbia  remains  at  a  good  level  of  preparation  in  the  area  of  education  and  culture.  Some 
progress  was  made on the implementation  of last  year’s recommendations, by modernising 
the  academic  curricula  and  rendering  the  national  qualifications  framework  (NQF)  system 
operational. Some steps have been taken to ensure compliance of the quality assurance system 
in  higher  education  with  the  recommendations  of  the  European  Association  for  Quality 
Assurance in Higher Education (ENQA). The COVID-19 pandemic disrupted the organisation 
and  quality  of  instruction  on  all  levels  of  education.  The  recommendations  from  the  2020 
report remain largely valid. 

In the coming year, Serbia should take further measures to: 

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

disadvantaged backgrounds;  

  consolidate the NQF system, with additional focus on the quality and scope of non-formal 

education;  

  ensure full compliance of the policy and institutional framework for quality assurance in 

higher education with the recommendations of the ENQA. 

In the area of education and training, the new education strategy until 2030 and the action 
plan  guiding  the  former  until  2023  were  adopted.  Mechanisms  ensuring  annual  monitoring 
and implementation reporting of both documents are recommended to be set up timely. The 
student  population  has  continued  to  decrease  due  to  negative  demographic  trends  and 
emigration.  Enrolment  and  attainment  rates  in  pre-university  education  remained  high. 
However,  while  the  number  of  children  aged  between  3  and  5  years  who  attended  early 
childhood education has increased (from 50.2 % in 2014 to 60.6 % in 2019), the coverage of 
Roma children remains low (5.7 % in 2014, 7.4 % in 2019). Similarly, the enrolment rate of 
mandatory pre-school education remained very high (97 % in 2019), while being substantially 
lower  for  Roma  children  (76  %).  Further  effort  is  required  to  achieve  equitable  pre-school 
education,  strengthen  governance  and  expand  the  scope  and  quality  of  infrastructure  and 
services. The rate of early school leavers fell to 5.6 % in 2020 down from 6.6 % the previous 
year.  Lifelong  learning  participation  slightly  dropped  to  3.7  %  in  2020  from  4.3  %  in  the 
previous years, which is far below the national and EU targets (7 % and 15 % respectively). 
Participation is particularly low among low-skilled adults (0.3 %).   

The  COVID-19  pandemic  led  Serbia  to  adopt  a  hybrid  education  model  depending  on  the 
pandemic  incidence.  Additional  legislation  on  distance  learning  and  mandatory  guidelines 
were  adopted  to  facilitate  instruction.  Distance  learning  was  organised  via  TV  broadcasters 
and digital tools. However, further efforts are required to compensate for learning gaps caused 
by digital exclusion, in particular among disadvantaged students.  

The  digital  transformation  of  education  is  progressing  and  is  to  be  further  prioritised, 
including by removing technology and literacy barriers for both teachers and students. While 
the development of the education management information system has progressed, it requires 
further  consolidation.  Serbia  is  active  in  piloting  and  scaling  up  the  Self-reflection  on 
effective  learning  by  fostering  the  use  of  the  tool  Self-reflection  on  Effective  Learning  by 
Fostering the use of Innovative Educational technologies (SELFIE) for schools to assess their 

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level  of  digital  maturity,  including  a  new  module  for  work-based  learning  in  a  number  of 
vocational education and training (VET) schools and companies. 

The reform of the general secondary education curriculum continued. No significant change is 
reported  in  the  low  take-up  of  general  secondary  education  on  the  account  of  VET.  Serbia 
needs  to  continue  modernising  and  streamlining  qualifications  standards  to  improve  VET 
relevance as well as to further develop the national work-based learning model for VET. The 
introduction  of  final  examinations  in  secondary  education  was  postponed  by  two  additional 
years. The preparations for introducing the examinations are to accelerate in  order to ensure 
its  full  implementation  as  of  the  2023-2024  school  year.  Serbia  endorsed  the  Osnabruck 
Declaration  on  Vocational  Education  and  Training  as  an  enabler  of  recovery  and  just 
transitions to digital and green economies in November 2020. 

Some  steps  were  taken  to  strengthen  the  policy  and  institutional  framework  for  quality 
assurance in higher education. Amendments to the Law on higher education were adopted in 
June  2021,  aiming  to  ensure  compliance  with  the  ENQA  recommendations  on  better 
governance  and  quality  assurance  principles.  Concrete  operational  steps  to  meet  the  ENQA 
recommendations are still pending. The Serbian national accreditation body may re-apply for 
renewed membership of ENQA in 2022 following its suspension in early 2020. Following the 
adoption of the respective law and accreditation standards, the first dual study programmes in 
higher  education  with  a  reinforced  work-based  component  are  being  accredited.  The 
attainment  of  tertiary  level  qualifications  for  persons  aged  30-34  is  slowly  increasing, 
reaching 33.5 % in 2019 (up from 32.8 % in 2018), remaining below the EU target of 40 %. 
Only 24 % of Serbian students manage to study and work at the same time, which is among 
the  lowest  in  Europe.  The  education  sector,  higher  education  in  particular,  remains  a 
vulnerable area for corruption.  

The National Qualifications Framework (NQF) is operational and referenced to the European 
Qualifications Framework. Its institutional set-up should be further strengthened to make the 
system fully operational, including the functioning of sector skills councils based on a more 
solid  social  partnership.  The  pace  of  adoption  of  qualification  standards  is  picking  up  but 
should be further accelerated, especially in higher education. The system of validation of non-
formal and informal learning is being piloted and relevant implementing legislation has been 
adopted, but is yet to be embedded at system level. 

Some progress was made in increasing the participation of disadvantaged students at all levels 
of  education.  Progress  was  made  in  the  enrolment  of  Roma  children  in  primary  education 
(from 85 % in 2014 to 92 % in 2019) and secondary education (from 22 % in 2014 to 28 % 
2019).  However,  the  implementation  of  measures  to  reduce  dropout  rates  and  segregation 
needs  to  be  strengthened,  especially  at  local  level.  Serbia  adopted  legislation  on  assistive 
technology  resource  centres,  which  is  expected  to  provide  additional  support  services  for 
inclusive education.  

Teachers  should  be  consistently  supported  in  implementing  the  ongoing  outcome-based 
curricular changes, particularly with regard to developing students’ key competences. Further 
efforts  are  required  to  develop  teaching  materials  and  empower  teachers  to  build  student 
competences  related to  gender equality, health, reproductive health, mental  health, sexuality 
education,  prevention  and  response  to  all  forms  of  gender-based  violence,  including  sexual 
abuse. 

Serbia  participated  in  the  Trends  in  International  Mathematics  and  Science  Study  (TIMSS) 
2019 and the Programme for International Student Assessment (PISA) 2018, and the results 
were published in 2020. Serbia is participating in several international assessments, including 

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Progress  in  International  Reading  Literacy  Study  (PIRLS)  2021,  International  Civic  and 
Citizenship Education Study (ICCS) 2022 and PISA 2022.   

Serbia  continued  its  participation  in  the  Erasmus+  programme  as  a  programme  country. 
Under  the  2020  call  for  proposals,  Serbian  institutions  are  participating  in  more  than  800 
projects including around 5 600 mobilities of students, staff and pupils. Serbia is successfully 
implementing  the  sports  component  of  the  programme,  where  relevant  organisations 
coordinate  five  projects  and  are  partners  in  44  projects.  Serbia  participated  in  the  Erasmus 
Days  2020  initiative.  Serbia  expressed  willingness  to  re-associate  to  Erasmus+  as  an 
associated  third  country  for  the  programme  period  2021-2027;  the  formal  association  is 
expected to be completed during the second half of 2021. 

In the area of culture, Serbia has recognised creative industries as a sector with potential for 
economic and social development. The Council for creative industries continued its national 
and  international  communication  campaign  ‘Serbia  creates’.  In  January  2021,  the  Serbian 
government adopted its ‘strategic priorities for the development of culture of the Republic of 
Serbia from 2021 to 2025’, setting objectives and priorities for cultural policy.  

The  COVID-19  pandemic  greatly  affected  the  cultural  and  creative  scene  of  Serbia,  though 
not evenly. While creative industries were eligible to economic recovery measures, this was 
not the case for the whole sector. The Ministry of Culture and Information carried out open 
calls  to  support  projects  in  culture,  although  with  a  reduced  budget  compared  to  previous 
years.  Specific  support  was  provided  to  independent  artists  to  cope  with  the  limited 
possibilities to perform. 

The  activities  of  Novi  Sad  as  European  Capital  of  Culture,  initially  planned  for  2021,  were 
postponed to 2022. 

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

Serbia participated in the Creative Europe programme 2014-2020, which was well promoted 
and supported by the relevant Ministry. Serbian cultural organisations were successful in all 
streams  of  the  programme,  and  have  taken  good  advantage  of  the  specific  call  to  support 
cooperation projects in the Western Balkans. Regarding the association of Serbia to Creative 
Europe 2021-2027, the agreement  and entry ticket were agreed with Serbian authorities and 
the process of signing the new agreement is under way.  Full association is foreseen for the 
last quarter of 2021.  The youth strategy action plan 2018-2020 has expired. Preparations for 
the revision of the legislative and strategic framework in the field of youth are underway. The 
national youth council is active and involves youth representatives. Youth policy coordination 
mechanisms at the local level should be further strengthened. A number of local youth action 
plans are being revised in line with the provisions of the planning system Law. An increasing 
number of  young  and skilled people are emigrating. The unemployment  and inactivity rates 
among young people remain high. On average, it takes two years for a young person in Serbia 
to find their first stable employment after finishing education (compared to 6.5 months in the 
EU). 

Chapter 29: Customs union 

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

Serbia is at a good level of preparation in the area of customs union. Limited progress was 
made  through  the  adoption  of  amendments  to  the  customs  law  and  the  law  on  customs 

106 

 
 
services.  No  progress  was  made  with  upgrading  the  customs  processing  system  and 
developing the  IT system of the national  customs, largely to the COVID-19 pandemic. Last 
year’s recommendations were therefore not addressed and remain fully valid.  

In the coming year, Serbia should in particular:   

  further upgrade the customs processing system by integrating risk management;  
  further develop  the  IT system of the national  customs to  enable integration with  the EU 

systems. 

Serbia’s customs legislation remains largely aligned with the EU acquis. Amendments to the 
customs  law  and  the  law  on  customs  service  were  adopted  in  November  2020  in  order  to 
improve  the  efficiency  and  enforcement  of  customs  legislation.  Serbia  is  a  party  to  the 
Common  Transit  Convention,  applying  EU  rules  on  transit  movements.  Rules  on  customs 
enforcement  of  intellectual  property  rights  remain  broadly  in  line  with  the  EU  acquis.  The 
Regional  Convention  on  Pan-Euro-Mediterranean  (PEM)  preferential  rules  of  origin  are 
applied in Serbia. Serbia is finalising negotiations on the revised rules of origin with members 
of  the  PEM  region  that  are  willing  to  accept  the  revisions  proposed  by  the  European 
Commission.  Serbia’s  customs  tariff  nomenclature  for  2020  was  harmonised  with  the  EU 
combined nomenclature in November 2020.  

Legislation on cultural  goods, free zones, and security aspects still needs to be aligned with 
the  EU  acquis.  Fees  are  still  charged  on  lorries  entering  customs  terminals  to  discharge 
customs obligations, which is not in line with Serbia’s SAA obligations.  

Concerning  administrative  and  operational  capacity,  total  customs  and  VAT  revenues 
collected by the customs administration decreased by 5.2 % in 2020 as a consequence of the 
COVID-19 pandemic. The customs administration’s development plan for customs e-systems 
was adopted in February 2020, aiming to ensure integration with the EU system. In February 
2020, Serbia also adopted the 2020-2024 customs administration’s business plan.  

Work  is  also  ongoing  on  strengthening  the  risk  management  system.  It  is  important  that 
Serbia  consistently  carry  out  pre-arrival/pre-departure  risk-based  analysis  including  food-
safety  checks,  in  line  with  the  EU  Customs  Code.  The  customs  laboratory  remains  under-
equipped. 

In  terms  of  fight  against  tobacco  smuggling,  Serbia  has  been  a  party  to  the  Protocol  to 
Eliminate  Illicit  Trade  in  Tobacco  Products  since  2017,  but  the  information  on  the 
implementation  of  the  Protocol  is  still  pending,  and  administrative  capacity  for  tobacco 
control is still insufficient. Serbia needs to continue work and reinforce efforts to establish a 
tracking and tracing system of tobacco products, as provided for by the FCTC Protocol. 

In  the  context  of  the  COVID-19  pandemic,  seven  border  crossings  with  neighbouring 
countries  were  designated  as  ‘green  lane’  border  crossings  to  ensure  the  smooth  and 
prioritised  passage  of  essential  goods.  The  green  lane  border  crossings  continue  to  provide 
24/7  operations,  including  phytosanitary  procedures,  and  electronic  pre-arrival  information 
through the system of electronic exchange of data.  

CLUSTER 4: THE GREEN AGENDA AND SUSTAINABLE CONNECTIVITY  

This cluster covers four chapters: 14-transport policy, 15-energy, 21-trans-European networks 
and  27-environment  and  climate  change.  The  entire  cluster,  i.e.  all  chapters  have  yet  to  be 
opened. In the first half of 2021, Serbia submitted an action plan on oil stocks and an action 
plan on gas unbundling, fulfilling the remaining requirements to move towards opening of the 
cluster. This cluster is at the heart of the Green Agenda for the Western Balkans endorsed by 

107 

 
 
Serbia in  November 2020 and closely linked to  Serbia’s Economic Reform Programme and 
the Commission’s Economic and Investment Plan. 

Limited progress was achieved overall with the exception of energy and climate, where Serbia 
advanced  alignment  with  the  EU  acquis.  In  March  2021,  Serbia  adopted  a  climate  law  that 
sets  the  legal  framework  for  its  future  climate  action.  In  April  20221,  Serbia  adopted  a 
package of important energy laws, including new laws on renewables and energy efficiency.  

In the coming period, Serbia is  invited to focus on the following areas:  improve investment 
prioritisation, planning and management across all areas; adopt a new transport strategy and 
strategy on intelligent transport systems in line with the EU’s sustainable and smart mobility 
strategy; implement its action plan on gas unbundling in line with planning and fully engage 
on regional energy integration; adopt a National energy and climate plan consistent with the 
European Green Deal’s zero emission target for 2050 and step up efforts on implementing and 
enforcing  environment  and  climate  legislation,  in  particular  on  environmental  impact 
assessment,  waste  management,  air  and  water  quality,  trans-boundary  cooperation  and  law 
enforcement by inspectorates.  

Chapter 14: Transport 

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

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

In addition to addressing the shortcomings set out below, in the coming year, Serbia should in 
particular: 

  continue  with  the  rail  reform  process,  in  particular  by  implementing  a  public  service 
obligation  contract  and  a  multi-annual  infrastructure  contract  in  evidence-based  manner; 
further implement adopted legislation and strengthen institutional capacities; 

  adopt  a national  strategy and action plan on intelligent  transport systems; adopt  credible 
costed rail and road maintenance plans; align and simplify road and rail border crossing 
procedures and further improve road safety by undertaking actions to remove blackspots 
on sections with high accident rates;  

  prioritise investments according to their relevance for Serbia’s economic development and 
EU  integration,  in  line  with  the  EU’s  sustainable  and  smart  mobility  strategy;  and  base 
investment decisions on feasibility studies conducted in accordance with EU best practices 
and apply transparent procurement procedures. 

As  regards  the  general  transport  acquis,  Serbia  needs  to  update  its  strategic  framework  to 
reflect new developments and ensure coherence by adopting a new  transport strategy in line 
with the EU’s  sustainable and smart mobility strategy targets. Strategic documents should be 
based on option analyses, take into account regional aspects, and be properly costed. 

Investments  in  transport  infrastructure  should  be  prioritised  through  a  single  mechanism, 
ranked according to  their relevance  for Serbia’s economic development  and EU integration. 
Decisions need to be based on feasibility studies and technical designs in line with EU best 
practices and follow EU standards on procurement procedures, ensuring best value for money.  
A  significantly  increased  number  of  investments  in  Serbia  did  not  apply  these  standards 
during the reporting period. Some recent positive developments are noted.  

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Overall,  capacities  in  the  road  and  rail  sector  improved,  positively  affecting  international 
cooperation  and  EU  integration.  Administrative  capacity  needs  further  strengthening  in 
particular  in  dealing  with  transport  of  dangerous  goods,  road  safety,  intelligent  transport 
systems (ITS) and rail, notably the railway regulatory body. Regarding public services, Serbia 
has  a  high  level  of  alignment  with  the  EU  acquis  on  rail  transport,  but  it  is  only  partially 
aligned  on  road  transport.  The  methodology  for  track  access  charges  is  being  prepared, 
together with the new pricing model for access to railway infrastructure.  

On road transport, Serbia’s level of alignment with the EU acquis is satisfactory. During the 
reporting  period,  Serbia  adopted  a  rulebook  on  child  restraint  system  and  a  rulebook  on 
roadworthiness tests for motor vehicles, aligning the technical inspection of vehicles with the 
EU  acquis.  However,  the  new  law  on  road  traffic  safety  is  still  pending.  Statistics  on  road 
traffic  accidents  in  Serbia  show  that  there  is  no  sustained  downward  trend.  Regular 
inspections,  roadside  checks  and  checks  at  premises  are  being  carried  out,  but  staffing  and 
equipment  remain  insufficient.  Strengthening  the  capacity  of  inspection  officers  remains  a 
priority.  Overall,  Serbia  needs  to  step  up  work  on  road  safety  at  national  and  local  level. 
Legislation on transport of dangerous goods is well aligned with the EU acquis and it covers 
also transport of hazardous substances.  

Serbian  authorities  are  managing  border  crossing  procedures  well  during  the  challenging 
COVID  19  crisis.  Improving  the  road  maintenance  system  remains  a  priority.  Performance-
based  maintenance  contracting  needs  to  continue  and  responsibilities  in  the  area  of  road 
maintenance  need  to  be  further  clarified.  Serbia  needs  to  address  the  issue  of  potentially 
discriminatory road charges against foreign operators. ITS strategy and action plan remain to 
be developed.  

On  rail  transport,  reforms  continued  and  the  operational  and  financial  sustainability  of 
independent railway service/infrastructure operators is improving. Serbia regularly updates its 
railway network statement but it is not  yet  fully  compliant with the EU  acquis and Serbia’s 
negotiating framework. Serbia actively participates in the work of the Transport Community. 
Serbia needs to adopt a European railway traffic management system (ERTMS) deployment 
plan. Positive trends continued when it comes to rail market opening with 11 private freight 
companies  operating on  the market  in  2020. However,  further  efforts are required to  ensure 
full opening of the market. This includes progressing on the issuance of train driver licenses 
and safety certificates for railway undertakings. Progress on mutual recognition of the rolling 
stock is expected, too.  

Serbia  still  needs  to  adopt  11  provisionally  published  technical  specifications  for 
interoperability.  Railway  infrastructure  has  to  be  built  accordingly.  Human  resource 
management  in  the  railway  field  needs  to  be  improved  (development  plans  for  all  rail 
authorities,  incorporating  technological  and  administrative  developments).  The  role  and 
capacities of the Railway Directorate should be strengthened.  

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

In inland waterway transport, Serbia continues to improve its level of alignment, which is 
already  high.  Serbia  has  an  operational  river  information  services  system,  which  is  highly 
interoperable with those of EU Member States. Serbia should continue working on fulfilling 
the preconditions for recognition of navigation certificates in the EU in accordance with the 
Directive  2017/2397.  Serbia  continues  improving  its  infrastructure  for  inland  waterway 
transport  services.  Improvements  to  the  river  ports’  network  statement  and  strengthening  of 
administrative capacity require more attention.  

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Serbia  has  a  good  level  of  alignment  with  the  EU  acquis  on  aviation.  With  regards  to  the 
aviation  regulations,  Serbia  is  close  to  fulfilling  all  obligations  stipulated  in  the  first 
transitional  period  of  the  European  Common  Aviation  Area  Agreement.  In  the  domain  of 
aviation  safety,  the  European  Union  Aviation  Safety  Agency  continues  monitoring  the 
application of the EU safety  standards  implemented in  Serbia, and in the course of 2021, it 
detected several deficiencies in the oversight of certain maintenance organisations, which led 
to the suspension of two approvals. The Agency will conduct a standardisation inspection in 
Serbia in April 2022.  

On  the  Single  European  Sky,  Serbia  completed  its  transposition  process.  No  progress  was 
made  regarding  lifting  the  suspension  of  articles  on  the  licensing  of  air  carriers  and  the 
normalisation of the lower airspace regime over Kosovo, which remain important priorities. 

There  is  no  specific  legislation  on  combined  transport.  Serbia  regularly  allocates  budget 
funds to promote combined transport. Construction of the first modern intermodal terminal in 
Belgrade started in November 2020.  

Chapter 15: Energy  

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

Serbia  is  moderately  prepared  in  this  field.  Good  progress  was  made  overall,  including 
progress on meeting last year’s recommendations. In April 2021, Serbia adopted new energy 
legislation advancing EU alignment, in particular on renewable energy. In May 2021, Serbia 
adopted  action  plans  on  gas  unbundling  and  oil  stocks  in  view  of  fulfilling  the  opening 
benchmark for the chapter. In the coming period, Serbia should: 

  implement action plans to fully unbundle its gas sector in line with planning, in particular 
adopt  all  legislation  necessary  for  full  unbundling  of  the  whole  gas  sector  (December 
2021) and certify Transportgas (February 2022);  

  in the context of establishing a regional electricity market, to ensure all necessary steps for 
finalising  the  Elektrosever  licencing,  and    determine  net  transmission  capacities  and 
capacity allocation with all neighbouring control blocks; 

   advance on green energy transition by adopting a national energy and climate plan with 
ambitious targets on reducing CO2 emissions and increasing the share of renewables and 
energy savings;  make concrete steps forward towards coal  phase out  as committed to  in 
the Sofia declaration on the Green Agenda for the Western Balkans; launch a first auction 
for renewables in 2021.  

Serbia  maintained  a  high  level  of  alignment  with  the  EU  acquis  on  security  of  supply 
including on emergency  oil stocks.  In May 2021, Serbia adopted an updated action plan on 
emergency oil stocks. Oil stocks continue to increase slightly, in June 2021 corresponding to 
21 days of average daily consumption. In December 2020, the construction of 2 x 20,000 m3 
of  oil  storage  capacity  started  in  the  port  of  Smederevo.  Only  about  half  of  the  collected 
revenue from the fee on mandatory oil stocks is currently being allocated for the purposes of 
emergency oil stockholding. This resulted in delayed implementation of previous plans. Lack 
of  gas  market  opening,  diversification  of  sources  and  third  party  access  to  the  gas  network 
potentially affect security of supply in the gas sector. Preparations for the construction of the 
gas interconnector with Bulgaria have continued with the launch of the works tender in March 
2021. Serbia also continued preparing technical documentation to upgrade the Trans-Balkan 
electricity  corridor. Construction of the 400 kV line Kragujevac-Kraljevo  and substations is 
ongoing since June 2020  

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Following  the  decision  of  the  European  network  of  transmission  system  operators  for 
electricity (ENTSO-E), the Kosovo transmission system operator KOSTT was separated from 
the Serbia control block and started to operate in the Albania-Kosovo control block in January 
2021. The Serbian electricity transmission system operator EMS so far did not determine net 
transmission capacities and capacity allocation with the Kosovo control block. The licencing 
of  Elektrosever  is  not  finalised.  Serbia  did  not  make  progress  in  setting  up  regionally 
coordinated auctions with its Western Balkan neighbours. 

As  regards  the  internal  energy  market,  Serbia’s  primary  legislation  is  compliant  with  the 
EU’s  third  energy  package.  In  April  2021,  Serbia  amended  the  Law  on  energy,  partially 
transposing rules on wholesale energy market integrity and transparency. Trading volumes on 
the  organised  day-ahead  market  continued  to  grow  in  2020.  A  balancing  energy  market  is 
operational,  but  prices  for  balancing  reserves  are  still  regulated.  The  unbundling  of  the 
electricity  transmission  system  operator  EMS  is  still  not  completed  in  a  manner  compliant 
with  Energy  Community  rules.  In  December  2020,  the  electricity  distribution  network  and 
system  operator  was  separated  from  EPS.  The  new  company  Elektrodistribucija  Srbije  was 
licenced by the Serbian energy agency AERS in January 2021. In May 2021, Serbia adopted 
plans for the unbundling of Srbijagas and Yugorosgaz. An agreement on the transfer of shares 
of  Transportgas  Srbija  LLC  from  Srbijagas  to  the  Republic  of  Serbia  was  signed  in    May 
2021.  Certification  and  unbundling  of  new  companies  is  continuing  in  accordance  with  the 
third energy package but not  yet finished. AERS approved a ten-year network development 
plan  of  Yugorosgaz  Transport  in  August  2020.  There  is  no  third-party  access  to  the  gas 
system  infrastructure  of  Srbijagas  and  Yugorosgaz.  The  Balkan  Stream  pipeline  section  in 
Serbia  was  finished.  As  regards  the  regulatory  regime  for  this  project,  Serbia,  in  its 
negotiating position, recognised the need for a tailor-made solution for the Gastrans company, 
in compliance with EU legislation.  

Electricity and gas supply prices are deregulated for all customers; however, households and 
small  customers  have  the  right  to  be  supplied  under  regulated  prices.  In  2020,  the  non-
regulated market  accounted for 48.6% of total  end-user electricity  consumption  and 83% of 
total  end-user  gas  consumption.  In  the  same  year,  some  2.25%  of  delivered  electricity 
quantities and only 0.15% of gas quantities were subject to supplier switching. The regulated 
electricity price of universal supply to small customers and households, which is significantly 
below the market  price,  is  impeding competition. Electricity prices should cover investment 
needs for Serbia’s energy and climate reforms including decarbonisation. 

The  Serbian  energy  agency  is  legally  and  functionally  independent  from  any  other  public 
entity.  AERS  needs  to  have  more  effective  enforcement  power  to  ensure  compliance  of 
regulated  companies.  Staff  levels  decreased  in  the  reporting  period  from  44  to40,  though  a 
level of 55 staff has been set in the organigram. Increasing staff numbers is necessary to allow 
the agency implement all regulatory responsibilities under the third energy package, the new 
Law on renewable energy and new acquis upfront.  

A  new  Law  on  mining  was  adopted  in  April  2021,  which  is  a  step  forward  in  aligning 
legislation  with  the  hydrocarbon  licensing  Directive,  especially  regarding  conditions  for 
granting and using authorisations for prospection, exploration and production.  

On  renewable  energy  (RES),  Serbia  further  progressed  on  aligning  with  the  EU  acquis.  In 
April  2021,  Serbia  adopted  a  new  Law  on  renewable  energy.  It  partially  transposes  the 
renewable  energy  directive  (RED  II,  Directive  2018/2001/EU).  The  law  introduces  RES 
auctions, creates conditions for the development of the renewable energy market, and allows 
citizens  and  companies  to  produce  electricity  for  their  own  consumption  and  become 
prosumers. This is a positive structural reform step as the energy sector is the main source of 
pollution in Serbia, responsible for 80% of the country’s greenhouse gas emissions. For full 
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transposition of RED II, Serbia needs further primary legislation in the construction sector as 
well  as  amendments  to  its  RES  law.  Additional  secondary  legislation  on  RES  share  in 
transport and sustainability criteria for biofuels is also needed. A major recommendation is to 
launch  a  RES  auction  still  in  2021.  The  human  resource  capacity  in  the  ministry  of  mining 
and  energy’s  department  for  renewables  is  insufficient.  The  latest  data  for  2019  show  that 
renewable sources accounted for a share of 21.44% of gross final energy consumption, which 
is below the interim target for 2019 set at 25.6% and the national target for 2020 set at 27%. 
Total capacity of wind power installed until June 2021 exceeds 400 MW, while total capacity 
of other renewable sources not including big hydropower plants is about 140 MW.  

Serbia  made  important  progress  in  aligning  with  the  EU  acquis  on  energy  efficiency  by 
adopting  a  new  Law  on  energy  efficiency  (April  2021).  Serbia  still  needs  to  adopt  further 
primary and secondary legislation to achieve full alignment with the Directive on the energy 
performance  of  buildings  and  on  energy  labelling.  Energy  intensity  in  Serbia  is  nearly  four 
times  higher  than  the  EU  average.  In  its  National  energy  and  climate  plan  (NECP),  Serbia 
should  therefore  set  ambitious  targets  for  energy  efficiency,  and  share  of  renewable  energy 
sources,  in  final  energy  consumption.  Work  on  the  NECP  started  in  February  2021.  In 
September  2020,  Serbia  submitted  the  fourth  annual  report  under  the  energy  efficiency 
Directive.  Serbia  needs  to  step  up  work  on  implementing  consumption-based  metering  and 
billing  in  district  heating  on  a  large  scale.  Human  resource  capacity  in  the  line  ministry 
remains insufficient. The newly established Directorate for energy efficiency requires robust 
financial,  institutional  and  human  resource  capacities  to  take  the  sector  forward  efficiently. 
The recent launch of housing renovation programmes is a welcome development. Serbia need 
to  better  coordinate  energy  efficiency  action  and  establish  a  sustainable  and  effective 
financing system. 

On  nuclear  energy,  nuclear  security  and  radiation  protection,  Serbia’s  legislation  is 
partially  in  line  with  the  EU  acquis.  Serbia  still  needs  to  finalise  adopting  the  agreement 
between European Atomic Energy Community and non-EU countries on the early exchange 
of information in the event of radiological emergency (ECURIE). The Serbian public utility 
‘Nuclear  Objects’  should  finalise  licencing  of  two  old  storage  facilities  which  expired  in 
November  2019,  along  with  the  new  radioactive  waste  processing  facility  and  two  nuclear 
research  reactors  and  abandoned  uranium  mine.  The  Serbian  Radiation  and  Nuclear  Safety 
and  Security  Directorate  is  the  independent  regulatory  body  with  executive  functions  in  the 
area of radiation and nuclear safety and security including inspection function. The number of 
staff at the directorate increased further from 32 to 34.   

Chapter 21: Trans-European networks  

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

Serbia  is  moderately  prepared  for  trans-European  networks.  Some  progress  was  made 
overall. Positive steps were taken on the 2020 recommendation on the gas interconnector with 
Bulgaria.  

In  the  coming  year,  Serbia  should  in  particular  adopt  its  planned  new  national  transport 
strategy 2022-2030 (including action plan) and national strategy and action plan for intelligent 
transport systems (ITS); these should be in line with the EU’s sustainable and smart mobility 
strategy and EU guidelines for the development of trans-European transport networks.  

On  transport  networks,  Serbia  is  improving  its  border  crossing  procedures.  Multiannual 
maintenance  planning  and  implementation  for  road  and  rail  should  accelerate.  Serbia  must 
ensure that its transport network projects are implemented in line with the TEN-T regulatory 

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framework,  in  addition  to  fulfilling  EU  standards  on  public  procurement,  state  aid  and 
environmental impact assessments. Infrastructure needs to be developed in a sustainable and 
smart  way,  in  particular  addressing  decarbonisation,  digitalisation  and  resilience  of  the 
transport sector. All rail infrastructure needs to comply with the EU’s technical specifications 
for  interoperability.  Investments  need  to  be  implemented  in  accordance  with  cost-benefit 
analyses following EU best practices.  

Serbia  needs  to  demonstrate  its  full  commitment  to  the  implementation  of  the  Transport 
Community  Treaty.  As  a  reaction  to  the  COVID-19  pandemic,  green  corridors  were 
established and are functioning effectively throughout the major corridors.  

As regards road infrastructure, Serbia launched a works tender for the first section of the Niš–
Merdare highway in March 2021. Technical preparations for the remaining sections continue 
with  EU  grant  support  but  work  needs  to  accelerate.  As  regards  rail  infrastructure, 
construction  works  on  the  Budapest-Belgrade  line  are  ongoing.  Construction  works  on  the 
Niš–Dimitrovgrad railway line are 2 years delayed, mainly due to lack of capacity and lengthy 
procedures.  

Serbia’s decision to cooperate with the EU and European IFI’s to modernise railway corridor 
X, Belgrade-Niš-Preševo (state border) under the Economic and  Investment  Plan underlines 
the importance Serbia gives to the Trans-European networks. Serbia continues upgrading its 
inland  waterway  infrastructure.  Projects  in  this  sub-sector  need  to  be  based  on  cost-benefit 
analyses and fully respect environmental standards.  

On trans-European energy networks, administrative capacities for transposing, implementing 
and enforcing the EU acquis need to be strengthened. Energy networks need to be upgraded 
in line with EU legislation on trans-European networks to advance on green energy transition. 
Serbia  continued  with  the  preparation  of  documentation  for  the  construction  of  the  Trans-
Balkan electricity corridor, in particular for the overhead transmission line connecting Serbia 
with Bosnia and Herzegovina and Montenegro and the upgrade of the transmission system in 
Western Serbia to  400 kV voltage level.  Construction of the latter is  planned to  start in  the 
beginning of 2022. Construction of the 400 kV line between Kragujevac and Kraljevo is on 
schedule,  planned  to  be  finalised  by  January  2022.  Good  progress  was  made  on  the  gas 
interconnector between Serbia and Bulgaria. The works tender was launched in March 2021. 
Financing is secured by an EU grant and EIB loan. 

Chapter 27: Environment and climate change  

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

Serbia  has  achieved  some  level  of  preparation  in  the  area  of  environment  and  climate 
change.  Overall,  Serbia  made  limited  progress  during  the  reporting  period,  mainly  by 
addressing last year’s recommendation to adopt the climate law.  

Last  year’s  recommendations  remain  largely  valid.  Serbia  should  considerably  step  up 
ambitions towards a green transition and focus on:  

  developing  an  ambitious  national  energy  and  climate  plan  in  a  transparent  manner, 
consistent with  the European Green Deal’s zero  emission target  for 2050 and the  Green 
Agenda for the Western Balkans; adopt and start implementing the plan; 

  intensifying  implementation  and  enforcement  work,  such  as  ensuring  strict  adherence  to 
rules  on  environmental  impact  assessment,  closing  non-compliant  landfills,  increasing 

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investing  in  waste  reduction,  separation  and  recycling,  improving  air  and  water  quality 
including  through  phasing  out  coal,  intensifying  trans-boundary  cooperation,  improving 
law  enforcement  by  inspectorates  and  judiciary,  advancing  river  basin  management  and 
preparing for Natura 2000; 

  enhancing  administrative  and  financial  capacity  of  central  and  local  authorities,  in 
particular  in  the  environmental  protection  agency  and  environmental  inspectorates,  by 
further  improving  inter-institutional  coordination,  continuing  to  raise  environmental 
investments as well as  further improving strategic investment planning and management 
including transparency of procedures.  

Environment 

In 2020, Serbia’s budget for environment  increased by 48%  compared to  the previous  year, 
mainly through foreign borrowing. All income generated from environmental fees should be 
earmarked  for  environmental  purposes.  Although  Serbia 
increasing 
investments into environmental protection, the green fund is not yet fully operational. Serbia 
needs  an  effective  institutional  set-up  to  improve  strategic  planning,  co-financing  and 
managing its environmental investments. Serbia should prioritise environmental projects with 
the  highest  environmental  impact,  and  select  and  implement  them  through  transparent 
procedures. Large long-term (industrial) investment projects need to comply with highest EU 
environmental standards.  

is  substantially 

In the area of horizontal legislation, Serbia has a high level of alignment with the EU acquis. 
Overall,  Serbia  needs  to  improve  its  administrative  capacities  at  central  and  local  level, 
including  at  inspectorates  and  judiciary.  Legislation  on  environmental  impact  assessment 
(EIA) needs to be further aligned and compliance with other laws ensured, especially with the 
law on planning and construction. EIA implementation needs to be strengthened. The quality 
of public consultations deteriorated during the reporting period, partly due to the continuing 
COVID  19  crisis.  Serbia  needs  to  ensure  transparency  about  investments  and  their 
environmental  effects  and  respect  for  freedom  of  expression  and  assembly  in  the 
environmental  sector.  Serbia  needs  to  carry  out  strategic  environmental  assessments  for  all 
plans  and  programmes,  which  set  the  framework  for  the  future  development  consent9of 
projects  listed  in  the  EIA  Directive,  such  as  Serbia’s  spatial  plan,  which  is  in  adoption 
procedure.  As  regards  the  Jadar  project,  in  early  2021  the  government  committed  to  the 
highest  environmental  standards,  and  to  carrying  out  a  strategic  evaluation  of  its 
environmental impact before changes to the spatial plan are made.  Legislative alignment on 
environmental  liability  and  environmental  criminal  law  (Directives  2004/35/EC  and 
2008/99/EC) has not progressed. Enforcement remains a key priority, including establishing a 
track record on implementing the environmental crime Directive.  

In the field of air quality, Serbia has a good level of alignment with the EU acquis. However, 
Serbia needs to speed up implementation including of air quality plans, and further improve 
its air quality monitoring system. Adopting the EU air quality index is a key recommendation, 
as  well  as  ensuring  adequate  staffing  of  the  Serbian  Environmental  Protection  Agency. 
Serbia’s annual air quality report for 2019 lists 13 agglomerations with air pollution above the 
limits:  Belgrade,  Niš,  Smederevo,  Pančevo,  Novi  Sad,  Užice,  Bor,  Kraljevo,  Subotica, 
Požarevac, Zaječar, Beočin, and Kosjerić. Pollution induced by the Kostolac B thermal power 
plant  needs  to  be  addressed  as  a  priority.  Requirements  of  Directive  2016/2284/EU  for 
national  emission  ceilings  have  not  yet  been  transposed.  Alignment  with  EU  legislation  on 
volatile organic compound emissions needs to continue. 

9 The term ‘development consent’ refers to permits and alike, authorising the execution of a project. 

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Regarding  waste  management,  Serbia  has  a  good  level  of  alignment  with  the  EU  acquis; 
however,  implementation  remains  at  an  early  stage.  Serbia  developed  with  EU  financial 
assistance a national waste management strategy and a national sludge management strategy. 
It  is  in  the  adoption  procedure  since  2019.  The  by-law  on  treatment  of  the  equipment  and 
waste  containing  polychlorinated  biphenyl,  currently  in  the  adoption  procedure,  will  fully 
transpose the relevant EU directive. Serbia proceeded with the permanent disposal of historic 
hazardous  waste.  Additional  economic  instruments  for  special  waste  streams  need  to  be 
developed. The proportion of recycled waste in overall waste management is still low, e.g. 3% 
for municipal waste. Serbia needs to  redouble its efforts to  close its non-compliant landfills 
and  invest  in  waste  reduction,  separation  and  recycling.  The  remediation  of  the  Belgrade 
landfill and the construction of a waste to energy facility have continued in 2020. 

The level of alignment with the EU acquis on water quality is moderate. Work on an action 
plan for implementing the water management strategy has not progressed. Untreated sewage 
and  wastewaters  are  still  the  main  source  of  water  pollution.  Non-compliance  with  water 
quality standards remains a big concern in some areas, such as those where arsenic is present. 
Serbia needs  to  step up  its efforts to  further align its legislation with  the EU  acquis,  and to 
strengthen  administrative  capacity,  in  particular  for  monitoring,  enforcement  and  inter-
institutional coordination. Serbia should address river pollution more rigorously, including by 
the  Danube,  Drina, 
for 
conducting 
Draghovishtitsa  and  Pek  rivers.  Work  on  the  river  basin  management  plan  is  progressing 
slowly.  Improving  local  governance,  in  particular  for  operating  and  maintaining  water  and 
wastewater  facilities,  remains  a  priority.  Increased  transparency  on  planning,  selecting  and 
managing environmental investments will ensure better adherence to EU laws and standards 
in  this  sector  and  better  value  for  money.  Work  on  adequate  water  fees  and  tariffs  is  at  an 
early  stage.  Limited  progress  was  achieved  as  regards  the  development  of  flood  risk 
management plans.  

trans-boundary  consultations 

rivers  such  as 

Alignment  with  the  EU  acquis  in  the  field  of  nature  protection,  in  particular  with  the 
habitats and birds Directive, increased through amendments to the law on nature protection. 
Serbia needs to address gaps in legislation, allowing hunting of non-huntable birds, especially 
the goshawk and the turtledove. Serbia needs to fully incorporate EU standards on prohibited 
means  of  capturing  and  killing  wild  animals  throughout  its  entire  legislation,  including  in 
legislation  on  hunting.  Authorities  need  to  address  illegal  hunting  and  illegal  lodging  more 
effectively. Work on establishing Natura 2000 sites has accelerated including through further 
alignment.  Institutional  and  human  resource  capacities  at  national  and  local  level  remain 
weak,  in  particular  as  regards  enforcement,  and  wildlife  trade.  Any  further  development  of 
hydropower  should  be  in  line  with  EU  environmental  legislation.  The  new  ban  on  building 
small hydropower plants in protected areas is positive; however, its scope should be widened, 
in particular to include the procedure on the appropriate assessment of the ecological network. 

As  regards  industrial  pollution  and  risk  management,  alignment  with  most  of  the  EU 
acquis is  at  an early stage across the industrial  sector, including on the  industrial  emissions 
Directive (IED). Serbia’s national emission reduction plan is not implemented in practice for 
sulphur  dioxide  and  dust.  The  Serbian  Kostolac  B  thermal  power  plant  is  Europe’s  biggest 
sulphur dioxide polluter. A desulphurisation unit built in 2017 was only put into operation in 
the fourth quarter of 2020.  Inspection and law enforcement  remain areas  of concern. Serbia 
needs to increase capacities for managing the integrated permitting processes. Serbia should 
tackle industrial pollution by enforcing the polluters' pay-principle in order to encourage the 
industry to invest in green solutions. 

Serbia  has  a  high  level  of  alignment  with  the  EU  acquis  on  chemicals  but  developments 
stagnated in the past two years on REACH and CLP Regulations and on animal experiments, 

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asbestos or biocides legislation. Serbia needs to boost its administrative capacity to implement 
legislation in these areas, and ensure proper monitoring of persistent organic pollutants. 

Serbia’s level of alignment with EU rules on noise is good, but their implementation remains 
at an early stage. Serbia needs to improve administrative capacity for drafting strategic noise 
maps and action plans and for enforcing noise legislation.  

Serbia is moderately prepared as regards civil protection. The legal and policy framework for 
disaster  risk  management  is  based  on  the  law  on  disaster  risk  reduction  and  emergency 
management  and  the  national  disaster  risk  management  programme.  No  progress  has  been 
made in developing a strategy for disaster risk reduction. Work on local risk assessments and 
protection  and  rescue  plans  is  slowly  progressing.  More  focus  on  multi-hazard  risk 
assessments is needed. The COVID-19 pandemic highlighted the need to strengthen the inter-
institutional  collaboration  framework  with  regard  to  health  emergencies.  Very  limited 
progress  has  been  made  towards  connecting  to  the  common  emergency  communication  and 
information system (CECIS) - the main tool for crisis communication among members of the 
European  Union  civil  protection  mechanism.  Pre-condition  for  CECIS  is  the  installation  of 
secure  trans-European  services  for  telematics  between  administrations  (sTESTA)  and 
designating  the  responsible  ministry  as  an  entry  point.  Serbia  needs  to  ensure  that  the  Niš 
humanitarian  centre  does  not  duplicate  the  role  of  the  European  Commission’s  emergency 
response coordination centre and does not contradict the conditions for its participation in the 
EU civil protection mechanism. 

Climate change 

Serbia has some level of preparation on climate change, but implementation is at a very early 
stage.  Recent  positive  developments  include  the  adoption  of  the  long-prepared  Law  on 
climate  change  in  March  2021.  In  2021,  Serbia  should  develop  an  ambitious  integrated 
National  energy  and  climate  plan  (NECP)  in  a transparent  and  effective  way,  translating  its 
commitment to the Green Agenda for the Western Balkans into concrete action including on 
introducing carbon-pricing instruments and phasing out coal subsidies. 

The  adoption  and  implementation  of  a  climate  strategy  and  action  plan  embedded  in  an 
ambitious  NECP,  which  is  consistent  with  the  EU  2050  framework  for  climate  and  energy 
policies and which addresses adaptation  to  climate change, is  paramount  for Serbia’s future 
low  carbon  development.  Serbia  needs  to  do  more  to  integrate  climate  action  into  other 
sectors.  Serbia’s  draft  spatial  plan  based  on  Serbia’s  current  energy  strategy  includes  new 
thermal  power  plants.  Serbia  should  consider  setting  a  coal  phase  out-date  as  an  effective 
means to comply with its obligations under Energy Community law and commitments made 
under  the  Green  Agenda  for  the  Western  Balkans  on  reaching  the  EU  target  of  climate 
neutrality.  The  suspension  of  activities  to  build a  new  thermal  power  plant  (Kolubara  B)  in 
May 2021 was an important step in this direction.  

Work on improving greenhouse gas inventories and updating Serbia’s Nationally Determined 
Contribution  to  the  Paris  Agreement  is  slowly  progressing.  Alignment  of  legislation  on 
monitoring,  reporting  and  verification  of  greenhouse  gas  emissions  in  line  with  the  EU 
emissions  trading  system  and  effort-sharing  Regulation  is  pending.  Serbia  needs  to 
considerably  strengthen  its  administrative  and  technical  capacity  at  all  levels  and  further 
increase investments towards green energy transition.  

CLUSTER 5: RESOURCES, AGRICULTURE AND COHESION  

This cluster covers chapters 11-agriculture and rural development, 12-food safety, veterinary 
and  phystosanitary  policy,  13-fisheries,  22-  regional  policy  &  coordination  of  structural 

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instruments,  and  33-financial  &  budgetary  provisions.  Two  out  of  five  chapters  are  open 
(chapter 13 and 33) with closing benchmarks that remain to be fulfilled in each chapter. The 
Commission  has  assessed  that  opening  benchmarks  have  been  met  for  chapters  11  and  22, 
Serbia has to meet three opening benchmarks to open chapter 12. 

This  cluster  comprises  policies  linked  to  European  structural  funds  and  building  up  the 
capacities to implement them upon accession. It also comprises some of the key policy areas 
crucial for ensuring sustainable food systems  and helping rural  communities to  develop  and 
diversify economically. 

Progress was achieved in different areas e.g. on food safety through the recruitment of staff at 
the national reference laboratories and with the drafting of an action plan for acquis alignment 
in the area of fisheries; on financial and budgetary provisions as regards the underlying policy 
areas  affecting  the  correct  functioning  of  the  own  resources  system;  on  regional  policy  as 
regards financial management.  

In the coming period, Serbia is invited to focus on the following areas: to focus on increasing 
the pace of  IPARD implementation  to  ensure a timely use of the financial  support from  the 
EU  and  to  progress  with  the  implementation  of  the  action  plan  for  acquis  alignment  in 
agriculture  and  rural  development;  adopt  a  strategy  and  action  plan  for  alignment  with  the 
acquis  on  food  safety,  veterinary  and  phytosanitary  policy;  adopt  the  action  plan  for 
alignment  with  the  acquis  on  fisheries;  implement  the  action  plan  for  meeting  the 
requirements  of  the  EU  cohesion  policy  and  improve  capacity  to  manage  indirect 
management programmes under EU pre-accession assistance; draft an action plan to meet the 
administrative own resources conditions. 

Chapter 11: Agriculture and rural development  

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

Serbia has some level of preparation in agriculture and rural development. Some progress 
was made on addressing the recommendations of the previous report, in particular through the 
adoption of the framework law on common market organisation and the conclusion of the first 
call  of  the  newly  entrusted  IPARD  II  measure  on  ”Farm  diversification  and  business 
development” in October 2020.  

In the coming period, Serbia should in particular: 

  speed up the processing of applications received for the measures already entrusted under 

the IPARD II programme to avoid any loss of EU funds; 

  submit  in  appropriate  time  and  quality  the  IPARD  III  Programme  for  the  period  2021-

2027; 

  progress with the implementation of the action plan for EU acquis alignment in agriculture 

and rural development. 

As regards  horizontal issues, the drafting of the  next  national  programs  for agriculture and 
rural  development  for  the  period  2021-2024  is  ongoing,  where  complementarity  with  the 
IPARD III programme should be ensured. The experience gained during IPARD II period has 
a great importance on the development of the IPARD III programme in Serbia, as well as the 
acquired practical experience of the recipients in the implementation of EU-funded projects. 
Implementation  of  the  activities  under  the  action  plan  on  alignment  with  the  EU  acquis  on 
agriculture and rural development should continue. Serbia should speed up the establishment 
of  the  integrated  administration  and  control  system,  and  the  transition  from  manual  to 

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electronic processing of aid applications. The land parcel identification system (LPIS) should 
be extended to the whole territory of Serbia without delay. Serbia has to ensure decoupling of 
payments from production and linkage of area-based payments to cross-compliance standards. 
The farm accountancy data network (FADN) is established but its sample size and the quality 
of the data will need to be further improved to be fully representative. 

In the area of the common market organisation (CMO), the framework law was adopted in 
June 2021. The secondary legislation in the areas of marketing standards, public and private 
storage, and producer organisations should also be adopted so that the EU acquis alignment 
plan can proceed.  

On  rural  development,  with  the  two  newly  entrusted  measures  (“Farm  diversification  and 
business  development”  and  “Technical  assistance”)  Serbia  is  now  implementing  four 
measures under the IPARD II Programme. There are still 111 vacant positions from the 235 
posts dedicated to IPARD within the Directorate of Agrarian Payments (IPARD Agency). The 
filling  of  vacant  posts  is  a  pre-condition  for  the  speeding-up  of  the  processing  of  IPARD 
applications  to  avoid  risk  of  de-commitment  of  EU  funds.  An  amendment  to  the  Financial 
Agreement  between  the  Republic  of  Serbia  and  the  European  Commission,  which  includes 
measures  7  (Farm  diversification  and  business  development)  and  9  (Technical  assistance), 
besides  already  accredited  two  investment  measures,  entered  into  force  on  17  November 
2020.  The  first  call  for  the  submission  of  applications  for  the  ‘Farm  diversification  and 
business development’ measure was concluded in October with 311 applications received.  

The  spending  of  EU  funds  under  IPARD  should  be  a  priority  to  avoid  financial  de-
commitments.  Work  should  also  continue  on  the  completion  and  timely  submission  of  the 
IPARD  III  Programme,  and  to  obtain  entrustment  with  budget  implementation  tasks  for  all 
new measures. 

As  regards  the  quality  policy,  the  continuing  delays  in  adopting  the  legislation  on  quality 
schemes  for  agricultural  products  and  foodstuffs  must  be  addressed  so  that  the  sector  can 
develop. 

As  regards  organic  farming,  the  area  under  organic  production  continues  to  grow,  year  by 
year,  with  fruit  production  having  the  most  significant  increase.  The  legislation  has  been 
aligned with the EU acquis on organic production but its adoption is still pending.   

Recommendation from the Twinning project on strengthening capacities in the field of 
organic production and food quality policy, which concluded early in 2021 should be 
followed-up. 

Chapter 12: Food safety, veterinary and phytosanitary policy  

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

Serbia  is  moderately  prepared  in  the  area  of  food  safety,  veterinary  and  phytosanitary 
policy.  Limited progress was  made on implementing the recommendations  of the previous 
report,  in  particular  through  the  preparatory  work  for  the  development  of  the  strategy  for 
alignment with the EU acquis, and recruitment of staff.  

In the coming year, Serbia should: 

  adopt  a  comprehensive  strategy  and  action  plan  for  alignment,  implementation  and 

enforcement of the EU acquis on food safety, veterinary and phytosanitary policy; 

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  step up the efforts on the sustainable management of pesticides; 
  improve the application of the risk-based approach to official controls for imports.  

In  the  area  of  general  food  safety,  Serbia  advanced  preparation  but  still  needs  to  adopt  a 
strategy  and  action  plan  for  the  alignment  with  the  EU  acquis,  following  inclusive  public 
consultations. While rulebooks on monitoring programmes were adopted for food of animal 
and plant origin as well as animal feed, it is important that Serbia considerably improves its 
risk-based  approach  for 
imports,  and  considers  electronic  exchange  of  data  and 
documentation where possible, in particular in light of the current epidemiological situation. 
Serbia has not yet carried out an audit of inspection staff. Integrated multiannual control plans 
are yet to be prepared.  

On  the  veterinary  policy,  annual  programmes  consisting  of  animal  health  protection 
measures  were  adopted  in  2021.  Mandatory  vaccination  of  domestic  pigs  against  classical 
swine fever discontinued in December 2019; no new cases have been reported since. African 
swine  fever  continued  to  spread  with  new  cases  being  detected  in  additional  municipalities, 
which  necessitated  continued  resource  consuming  actions  by  the  competent  bodies.  The 
multiannual programme to eradicate rabies in wildlife started in 2010 and resumed in spring 
2021.  Taking  full  ownership  of  vaccination  campaigns,  Serbia  should  transition  to  using  its 
own means for future campaigns (post 2023) in  line with  obligations to  harmonise with  the 
relevant  EU  acquis.  The  strengthening  of  the  Veterinary  Directorate  needs  to  continue, 
including through recruitment of additional policy specialists and continuous training of staff. 
Alignment  of  the  national  legislation  on  animal  welfare  with  the  EU  acquis  needs  to  be 
finalised.  

As  regards  the  placing  of  food,  feed  and  animal  by-products  on  the  market,  Serbia 
implements the decree on categorisation of food establishments for compliance with the EU 
acquis but completion of the process is still pending. There is a need for improving the animal 
by-products  management.  The  order  on  classification  and  upgrading  of  establishments  for 
animal by-products was adopted but their classification is yet to be completed.  

On  food  safety  rules  and  specific  rules  for  feed,  the  permitted  level  of  aflatoxins  in  milk 
remains five times higher than permitted by the EU acquis. Since the situation has persisted 
for years, focused measures are needed in order to reduce the presence of aflatoxins in animal 
feed and milk in line with the EU acquis. The national reference laboratories Directorate was 
further  strengthened  through  recruitment  of  additional  staff.  In  the  area  of  phytosanitary 
policy,  18  new  inspectors  were  recruited.  The  annual  programmes  of  plant  health  measures 
were  adopted. The list  of approved active substances of pesticides remains  aligned  with the 
EU acquis. To mitigate the impact on public health and environment, Serbia still needs to step 
up efforts on the sustainable management of pesticides through further alignment with the EU 
acquis  and  an  improved  implementation  of  the  legislation  in  force  (e.g.  collection  and  safe 
disposal of pesticides packing, training, control of application devices, etc.).  

There  was  no  progress  on  adopting  the  framework  legislation  on  genetically  modified 
organisms  that  should  be  aligned  with  the  EU  acquis.  This  is  crucial  for  progress  in 
negotiations on membership to the World Trade Organisation and for opening this chapter. 

Chapter 13: Fisheries  

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

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Serbia  is  moderately  prepared  in  the  area  of  fisheries.  Limited  progress  was  made  on 
implementing the recommendation of the previous report, in particular by drafting an action 
plan for the alignment with the acquis.  

In the coming year, Serbia still needs to: 

  finalise  the  process  of  adoption  of  an  action  plan  for  full  compliance  with  the 
requirements  of  the  EU  acquis  by  the  date  of  accession,  in  particular  regarding 
organisation  of  the  markets,  aquaculture,  data  collection  and  control  measures  against 
illegal, unreported and unregulated fishing; 

  address  severe  understaffing  of  competent  authorities  responsible  for  policy  formulation 

and anti-fraud controls for fisheries (including border controls).  

Serbia still needs to step up efforts to strengthen its policy formulation, implementation, and 
enforcement  capacities  in  this  area.  Inter-institutional  coordination  in  the  area  of  fisheries, 
including  border  and  other  anti-fraud  controls,  should  be  considerably  improved.  This 
includes  coordination  of  customs  and  veterinary  inspections  and  the  development  of  clear 
protocols for inter-institutional coordination. Structural measures remain to be put in place for 
small-scale or inland fisheries. Legislation on market support still needs to be adopted, in line 
with the EU acquis. The collection of statistical data on aquaculture for 2020 was carried out 
in line with the acquis. Serbia adopted legislation on quality for fisheries products, shellfish, 
sea  urchins,  sea  cucumbers,  frogs,  turtles,  snails  and  their  products  aiming  at  further 
alignment  with  the  acquis.  Serbia  should  implement  the  rulebook  on  catch  certification  and 
bring  its  legal  framework,  including  implementation  measures,  into  full  alignment  with  the 
acquis on illegal, unreported and unregulated fishing as soon as a solution has been found for 
the fish catch certificate issue.  

Chapter 22:  Regional policy and coordination of structural instruments  

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

Serbia is moderately prepared on regional policy and coordination of structural instruments. 
Limited  progress  has  been  made  in  implementing  last  year’s  recommendations,  mainly  on 
financial management. 

The  2020  recommendations  remain  largely  valid  also  in  the  coming  year.  Serbia  should  in 
particular: 

  implement  the  adopted  action  plan  for  meeting  the  requirements  of  the  EU  cohesion 
policy, including nominating the institutions and bodies as necessary and appropriate, in 
line with planning;  

  further  improve  capacity  of  central,  regional  and  local  bodies,  with  an  emphasis  on  the 
indirect  management  of  programmes  under  EU  pre-accession  assistance  and  guarantee 
that the key positions in the structures are filled on a permanent basis, while retaining key 
staff;  

  ensure that all instruments are compliant with EU requirements in terms of programming 
and  partnership  principles  and  factor  the  requirements  of  the  future  structural/cohesion 
funds in the institutional set-up. 

Serbia has still to adopt a legal framework for cohesion policy. The work on the draft law on 
cohesion  policy  from  2020,  which  defines  the  goals  of  cohesion  policy,  introduces  key 
principles  and  establishes  the  legal  basis  for  developing  the  institutional  framework  for 
implementation of cohesion  policy, needs to  be  accelerated. Multiannual  budget  planning is 

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regulated through the law on the budget system. National co-financing for EU pre-accession 
programmes  is  ensured  at  project  level.  A  systematic  approach  to  develop,  co-finance  and 
implement multiannual operational programmes needs to be ensured.  

The institutional framework for cohesion policy has still to be decided. The appointment of 
institutions  and  bodies  to  implement  the  cohesion  policy  should  be  accelerated,  along  with 
building up their capacity. The institutional framework for managing the EU’s Instrument for 
Pre-accession Assistance (IPA) is in place. However, indirect management structures need to 
improve further to fully ensure efficient contracting and implementation of IPA programmes, 
which need to be accelerated.  

Weaknesses  persist  in  the  administrative  capacity  in  key  institutions  managing  EU  funds, 
including  continuous  changes  in  key  managerial  positions  within  the  indirect  management 
structures and managerial appointments in acting functions. The high turnover of staff in key 
ministries implementing IPA funds remains a problem, as well as the outflow of experienced 
staff.  Amore  effective  retention  policy  in  the  public  sector  is  needed.  Improvements  in 
administrative capacity will minimise risks to lose EU IPA funds.  

Serbia is participating in the European Strategy of Adriatic Ionian Region (EUSAIR), which 
promotes cooperation and synergies among the participating EU and non-EU countries. 

On  programming,  a  development  plan,  which  is  the  legally  defined  basis  for  its  regional 
development policy, has yet to be adopted. It should valorise the development potentials of all 
regions  in  Serbia  and  reduce  regional  and  local  disparities.  The  number  of  operational 
programmes  for  cohesion  policy  needs  to  be  established.  The  investment  planning  system 
lacks coherence, leading to non-transparent investment planning and investment financing and 
varied technical standards. 

On  monitoring  and  evaluation,  the  relevant  monitoring  committees  set  up  under  indirect 
management continued to function. No progress can be reported on the implementation of the 
evaluation plan for indirect management of IPA funds and the establishment of a monitoring 
and evaluation system in accordance with the requirements of cohesion policy. 

On  financial  management,  control  and  audit,  the  capacities  of  the  national  systems  for 
indirect management of IPA funds, including in the Audit Authority, continue to improve.  

Chapter 33: Financial and budgetary provisions 

This  chapter  covers  the  rules  governing  the  funding  of  the  EU  budget  (‘own  resources’). 
These  resources  mainly  consist  of:  (i)  contributions  based  on  the  gross  national  income  of 
each  Member  State;  (ii)  customs  duties;  (iii)  the  non-recycled  plastic;  and  (iv)  a  resource 
based on value-added tax. Member States must have the appropriate administrative capacity 
to adequately coordinate and ensure the correct calculation, collection, payment and control 
of own resources.  

Serbia has some level of preparation in the area of financial and budgetary provisions. Some 
progress was made on the implementation of last year’s policy recommendations and within 
the underlying policy areas affecting the correct functioning of the own resources system. The 
previous report’s recommendations remain largely valid. In the coming year, Serbia should in 
particular:   

  further  strengthen  the  administrative  capacity  of  the  coordination  group  and  institutions 

involved in the own resources system;  

  develop organisational and procedural links between these institutions;  

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  step up preparations to meet the specific administrative conditions for own resources, as 
laid  down  in  the  own  resources  regulations.  To  this  end,  draft  an  action  plan  with 
timelines to meet the administrative own resources conditions. 

There was some progress in the underlying policy areas indirectly affecting the own resources 
system (for progress in these areas, see Chapters 16 – Taxation, 18 – Statistics, 29 – Customs 
union, and 32 – Financial control).  

Regarding traditional own resources (TOR), the customs legislation is largely aligned with 
the  EU  acquis.  Serbia’s  customs  administration  procedures  ensure  that  cases  of  fraud  and 
irregularities are reported to the national authorities. However, reporting is manual and Serbia 
does not use OWNRES, or any other similar national electronic database, to report on fraud 
and irregularities for amounts over EUR 10 000. Customs continued the simulation of TOR 
accounts  in  2020.  However,  the  current  accounting  system  does  not  use  two  different 
accounts,  one  for  collected  or  secured  debts  (so-called  A  account)  and  the  other  for 
uncollected/unsecured  debts  or  secured  but  appealed  debts  (so-called  B  account).  Several 
departments in the customs administration, including its internal audit department, carry out 
control activities. The state audit institution is in charge of carrying out external audits.  

As regards the value added tax (VAT)-based resource, Serbia continued to further align the 
national VAT system with EU rules. Sufficient data sources are available for the calculation 
of the weighted average rate, deriving from the supply and use tables that were published for 
the first time in 2019.  

As regards the gross national income-based resource national accounts are compiled largely 
in  line  with  the  European  system  of  accounts  (ESA  2010).  However,  continued  efforts  are 
needed to produce the complete data required by the ESA 2010 transmission programme.  In 
2020,  Serbia  completed  its  GDP  revision.  This  resulted  in  a  fully  revised  data  series  of  the 
essential macroeconomic aggregates for the period 1995-2019. Serbia made further efforts to 
improve  the  exhaustiveness  of  the  national  accounts  and  the  gross  national  income  (GNI) 
calculations.  The  GNI  estimates  include  those  of  the  non-observed  economy.  VAT  fraud  is 
not yet estimated. The results of tax audits are not yet used to improve the exhaustiveness of 
the  national  accounts.  The  statistical  office  continuously  improves  its  methods  and  data 
sources  and  regularly  transmit  GNI  and  GDP  data  to  Eurostat.  Work  on  drafting  the  GNI 
inventory, based on the already existing description of sources and methods used to compile 
national accounts, started in 2018 and is planned to intensify.  

Regarding  administrative  infrastructure,  the  capacity  of  the  institutions  in  the  relevant 
policy areas needs to be further strengthened. The group for the coordination and management 
of own resources of the EU tasked with ensuring correct calculation, accounting, forecasting, 
collection, payment, control and reporting on the implementation of the EU’s own resources 
policy  and  rules  has  been  strengthened  (as  of  December  2020  it  has  three  employees)  but 
needs  support  (e.g.  a  twinning  light  project  to  benefit  from  expertise  of  a  recently  acceded 
Member  State)  to  fulfil  its  coordination  tasks.  Also,  the  organisational  and  procedural  links 
between the institutions involved in own resources should be developed.  

CLUSTER 6: EXTERNAL RELATIONS  

There  are two  chapters in  this cluster: chapter 30-external  relations, and  chapter 31-foreign, 
security and defence policy. Serbia is  yet  to  meet  the two opening  benchmarks  for chapters 
30, which includes finalising the accession to the World Trade Organisation (WTO). In this 
regard,  Serbia  should  adopt  a  WTO-compliant  law  on  the  trade  of  Genetically  Modified 
Organisms (GMOs) as a matter of urgency. 

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The screening report on chapter 31 is still in the Council.  Serbia’s CFSP alignment patterns 
remained  largely  unchanged.  In  2020,  Serbia’s  alignment  rate  with  relevant  High 
Representative statements on behalf of the EU and Council Decisions was 56%, but  rose to 
61%  as  of  August  2021.  Serbia  continued  to  participate  in  EU  crisis  management  missions 
and operations under the common security and defence policy. 

Serbia is invited to continue legislative alignment where necessary, and is also encouraged to 
implement actions under the common regional market based on EU rules, including through 
cooperation with CEFTA and the Regional Cooperation Council. 

Chapter 30: External relations 

The  EU  has  a  common  trade  and  commercial  policy  towards  third  countries,  based  on 
multilateral and bilateral agreements, and autonomous measures. There are also EU rules in 
the field of humanitarian aid and development policy.  

Serbia  remains  moderately  prepared  in  the  area  of  external  relations.  Some  progress  was 
made as Serbia continued with the implementation of CEFTA Additional Protocol (AP) 5 on 
Trade Facilitation and started the implementation of CEFTA AP 6 on Trade in Services. The 
capacity  to  pursue  key  challenges  in  trade  policy  remains  to  be  strengthened  further.  No 
progress was made regarding the accession to the World Trade Organisation (WTO).  

In the coming year, Serbia should in particular:   

  finalise  its  accession  to  the  WTO,  inter  alia  by  adopting  a  WTO-compliant  law  on 
genetically  modified  organisms  and  complete  remaining  bilateral  market  access 
negotiations;  

  further  strengthen  the  administrative  capacity  of  the  Ministry  of  Trade,  Tourism  and 
Telecommunications  for  handling  trade  with  the  EU  and  CEFTA,  as  well  as  WTO 
accession;  

  implement actions under the Common Regional Market (CRM), in particular: ensure the 
full  implementation  of  CEFTA  AP  5  on  Trade  Facilitation;  continue  with  the 
implementation of CEFTA AP 6 on Trade in Services; negotiate and conclude CEFTA AP 
7 on Dispute Settlement. 

As regards the common commercial policy, no progress was made on Serbia’s accession to 
the  WTO.  Serbia’s  membership  to  the  WTO  depends,  primarily,  on  the  adoption  of  a 
modified law on trade with genetically modified organisms, and on the completion of market 
access  negotiations  with  a  small  number  of  WTO  members.  The  Regional  Convention  on 
Pan-Euro-Mediterranean (PEM) preferential rules of origin is being applied in Serbia. Serbia 
is finalising negotiations on the revised rules of origin with members of the PEM region that 
are  willing  to  accept  the  revised  rules  as  proposed  by  the  European  Commission.  Revised 
rules of origin with EFTA and CEFTA were ratified in July 2021. 

Serbia should ensure smooth implementation of the SAA. In this regard, measures adopted in 
December 2020 with regard to the management of wine imports from the EU and restricting 
the allocation per trader  create a less favourable trade environment.  Serbia is  encouraged to 
restore the first come/first served arrangement. 

In  September  2020,  Serbia  submitted  an  updated  action  plan  for  its  remaining  legislative 
alignment  under  chapter  30.  The  amendments  to  the  law  on  dual-use  goods  in  effect  since 
November 2019 abolished import control of dual-use items while retaining export controls in 
accordance with the relevant EU legislation. In June 2020, Serbia adopted the national control 
list  of  dual-use  goods  aimed  at  full  alignment  with  the  EU’s  Regulation  on  setting  up  a 
Community regime for the control of exports, transfer, brokering and transit of dual-use items  

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from October 2019. The national control list of arms and military equipment, aligned with 
the Common Military  List,  was adopted in  May  2020. Serbia’s 2009 application to  join the 
Wassenaar  Arrangement  is  still  under  consideration,  as  well  as  the  2017  application  to  the 
Australia Group. Serbia is not a signatory of the Kimberly process on conflict diamonds.  

Concerning the administrative and operational capacity within the Ministry of Trade, Tourism 
and Telecommunications, work continued to build up the Ministry’s capacity in the WTO unit 
with one additional member of staff. However, the administrative capacity of units in charge 
of  trade  with  the  EU  and  WTO  accession  remains  to  be  further  strengthened.  The  unit 
responsible for export controls  is  expected to  benefit from  an upgrade of software solutions 
enabling the  relevant  licenses to  be issued electronically by 2025. Further work is  yet  to  be 
done  to  improve  the  capacity  of  the  administration  to  collect  market  statistics  through  the 
work of the national coordination body for trade facilitation. 

As  regards  the  country’s  participation  in  CEFTA,  Serbia  made  progress  towards  the 
implementation  of  AP  5.  The  ongoing  efforts  should  continue,  in  particular  based  on  the 
decision of the CEFTA Joint Committee on fruits and vegetables. Serbia should continue with 
the implementation of AP 6 on Trade in Service and with negotiations within CEFTA on AP 
7  on  Dispute  Settlement.  Serbia  should  continue  to  play  a  constructive  role  in  CEFTA  and 
within the Common Regional Market, in line with commitments taken at the Sofia summit on 
10 November 2020 and the Berlin process.  

Regarding bilateral agreements with third countries, Serbia signed a free trade agreement 
(FTA) with the Eurasian Economic Union (EAEU) on 25 October 2019. The agreement was 
ratified in February 2020 and  entered into force in July 2021. Serbia had pre-existing FTAs 
with three members of the EAEU (Russia, Belarus and Kazakhstan), thus only expanding the 
agreement to Armenia and Kyrgyzstan. The scope of the agreement has been widened through 
minimally  extended  tariff  concessions  on  goods,  an  annex  on  rules  of  origin  and  new 
provisions  on  dispute  settlement.  The  FTA  includes  an  exit  clause,  which  guarantees  that 
Serbia can denounce the agreement upon accession to the EU. The negotiations of a free trade 
agreement with Ukraine are ongoing. Since December 2018, negotiations are also ongoing on 
a Bilateral Investment Treaty with South Korea.  

Serbia signed the Partnership, Trade and Cooperation Agreement with the United Kingdom of 
Great  Britain  and  Northern  Ireland  in  April  2021.  The  provisional  application  of  this 
agreement  started  in  May  2021.  As  for  all  investment  and  trade  agreements,  it  is  important 
that Serbia ensures compatibility with the EU acquis and includes a sunset clause allowing it 
to denounce the agreement upon accession to the EU. Serbia should also develop a strategy 
for  amending  or  terminating  existing  bilateral  investment  agreements  that  fail  short  of  EU 
standards and expose the country to risks due to the broad and open language used.  

No substantial progress was made on development policy and humanitarian aid. A new law 
on  development  cooperation  and  humanitarian  aid  is  still  being  prepared.  Development 
assistance and humanitarian aid are granted on an ad hoc basis. Serbia participates in the EU 
Civil Protection Mechanism. 

Chapter 31: Foreign, security and defence policy 

Member  States  must  be  able  to  conduct  political  dialogues  under  the  foreign,  security  and 
defence  policy,  align  with  EU  statements,  take  part  in  EU  actions,  and  to  apply  agreed 
sanctions and restrictive measures. 

Serbia is  moderately prepared in the area of common foreign, security  and defence policy 
(CFSP) and made some progress over the reporting period. Serbia’s CFSP alignment patterns 
remained largely unchanged. A number of Serbia’s actions went contrary to EU positions on 

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foreign policy. In 2020, Serbia’s alignment rate with relevant High Representative statements 
on  behalf  of  the  EU  and  Council  Decisions  was  56%,  but  rose  to  61%  as  of  August  2021. 
Serbia  continued  to  participate  in  EU  crisis  management  missions  and  operations  under  the 
common security and defence policy.  

In the coming year, Serbia should in particular:  

  improve its alignment with EU Common Foreign and Security Policy and avoid  actions 

that go against EU positions on foreign policy; 

  adopt  the  action  plans  for  the  implementation  of  new  national  security  and  defence 

strategies, in a manner fully reflecting Serbia’s EU orientation in these areas. 

The political dialogue between the EU and Serbia on foreign and security policy continued. 
In  October  2020,  Serbia  participated  in  the  sixth  informal  EU-Western  Balkans  meeting  of 
Political  Directors  in  Sarajevo.  A  video  call  was  held  in  February  2021  between  the  EEAS 
Secretary-General  and  the  Serbian  Minister  of  Foreign  Affairs.  In  May  2021,  High 
Representative/Vice-President Borrell met with the President of Serbia for discussions, which 
included a strong focus on CFSP. 

(See Political criteria - Regional issues and international obligations - for more information 
on  developments  in  bilateral  relations  with  other  enlargement  countries  and  EU  Member 
States.) 

The  institutional  framework  enabling  Serbia’s  participation  in  the  CFSP  and  CSDP  is  in 
place.  Action  plans  for  the  implementation  of  Serbia’s  new  national  security  and  defence 
strategies are in preparation.  

On the Common Foreign and Security Policy (CFSP), in 2020, Serbia’s alignment rate with 
relevant  High  Representative  statements  on  behalf  of  the  EU  and  Council  Decisions  fell  to 
56% in 2020 but rose as of August 2021 to 61%. Serbia aligned with the EU’s Human Rights 
Sanction  Regime,  but  it has  not  aligned  with  any  of  the  listings  adopted  under  the  Regime. 
Serbia  has  aligned  with  the  HRVP  Declarations  on  Belarus  and  with  part  of  the  restrictive 
measures on Belarus (a ban on the overflight of EU airspace and on access to EU airports). 
Serbia  has  continued  not  to  align  with  EU  Declarations  on  Hong  Kong  and  with  sanctions 
against Russia. In December 2020, Serbia voted against UNGA resolution on the problem of 
the  militarisation  of  the  Autonomous  Republic  of  Crimea.  Serbia  needs,  as  a  matter  of 
priority, to make additional efforts regarding its alignment with the EU CFSP. The increase in 
Serbia’s alignment rate during 2021 is a positive initial step in this respect. 

In March 2021, the Ministry of Foreign Affairs established a working group for following the 
implementation of international restrictive measures.   

Serbia does not have bilateral immunity agreements granting exemption from the jurisdiction 
of  the  International  Criminal  Court  and  complies  with  the  EU  common  positions  on  the 
integrity  of  the  Rome  Statute  together  with  the  related  EU’s  guiding  principles  on  bilateral 
immunity agreements.  

Serbia continued to develop intense relations and strategic partnerships with a number of 
countries worldwide, including Russia and China. Frequent high-level contacts and regular 
bilateral  visits  with  Russia  were  maintained.  In  December  2020,  the  Russian  Minister  of 
Foreign Affairs visited Belgrade, and in February the Russian Deputy Prime Minister was in 
Belgrade  for  the  meeting  of  the  inter-governmental  committee  for  trade,  economic  and 
scientific-technical  cooperation.  In  February  2021,  the  Chairman  of  the  State  Duma 
Committee  on  International  Affairs,  listed  on  the  EU  sanctions  list,  was  in  Belgrade.  The 
Serbian Minister of Foreign Affairs visited Moscow in April and June 2021. During his visit 
to  Moscow  in  June  2021  the  Serbian  Minister  of  Defence  assessed  that  the  defence 
125 

 
 
cooperation  between  Serbia  and  Russia  was  at  a  historic  high.  In  July  2021  the  Serbian 
President received the Director of the Foreign Intelligence Service of the Russian Federation, 
listed  on  the  EU  sanctions  list.  Two-overhauled  MIG-29  from  Belarus  were  delivered  to 
Serbia  in  April  2021.  In June  2021,  Serbia  participated  in  the  annual  tripartite  military  drill 
with  Russia  and  Belarus  (“Slavic  brotherhood”).  Russian  assistance  during  the  COVID-19 
pandemic  was  continuously  emphasised  by  the  Serbian  leadership.  Close  contacts  and 
cooperation  with  China  continued.  In  February  2021,  the  Serbian  President  took  part  in  a 
video  summit  of  the  “17+1”  initiative.  The  Chinese  Minister  of  National  Defence  was  in 
Belgrade in March 2021. In July 2021, the Serbian President delivered a statement at a virtual 
ceremony  marking  100th  anniversary  of  the  Chinese  Communist  Party.  Moreover,  the 
assistance  provided  by  China  during  the  COVID-19  pandemic  has  been  emphasised  by 
Serbia’s political leadership.  

Serbia supported EU measures and documents on conflict prevention. 

Serbia has joined almost all key non-proliferation, disarmament and arms control treaties 
promoted by the EU. Serbia should consider ratifying Protocol V on Explosive Remnants of 
War  of  the  Convention  on  Certain  Conventional  Weapons  (CCW).  Serbia  has  a  transparent 
reporting  system  on  its  strategic  exports  controls.  At  the  same  time,  frequent  and  recurring 
allegations  of  corruption  in  arms  trade  deals  need  to  be  investigated.  In  December  2020,  a 
representative of the Serbian Ministry of Foreign Affairs took part in an online meeting of the 
conference  of  the  Agreement  on  Sub-regional  arms  control  under  the  Dayton  Agreement. 
Serbia is a very active State Party to the Chemical Weapons Convention. However, Serbia has 
not in recent years aligned with EU statements agreed in The Hague for the Organisation for 
the  Prohibition  of  Chemical  Weapons  (OPCW)  Conference  of  States  Parties  and  Executive 
Council meetings.  

In Geneva, in  the context  of the Conference on Disarmament, Serbia tends to  align with  all 
EU  statements.  At  the  UN  in  New  York,  however,  Serbia  often  does  not  align  with  EU 
statements and sometimes supports positions at UN General Assembly First Committee that 
are opposed by the EU.  

Serbia continued to engage actively with international organisations. Serbia maintained its 
policy  of  military  neutrality  but  cooperation  and  contacts  with  NATO  continued.  In  May 
2021,  the  Serbian  President  visited  NATO  and  met  with  the  NATO  Secretary-General.  In 
November  2020,  the  Serbian  Parliamentary  Speaker  took  part  in  the  online  meeting  of  the 
CSTO Council and plenary.  

Serbia  continued  implementing  its  agreement  with  the  EU  on  security  procedures  for 
exchanging and protecting classified information. 

Serbia continued to actively participate in EU crisis management missions and operations 
under the common security and defence policy (CSDP), notably the EU training missions 
in Somalia and Central African Republic, and EU NAVFOR Atalanta. Serbia is planning to 
contribute  to  civilian  CSDP  missions  but  it  needs  to  complete  the  legal  and  administrative 
framework for the participation of civilians. Serbia continued to participate in the roster of the 
EU Battle Groups. Serbia also continued to participate in five UN peacekeeping missions. 

On hybrid threats, the EU offered the hybrid risk survey for Serbia in 2018 as a mechanism 
that could strengthen Serbia’s resilience and response capacity to hybrid challenges. Since the 
offer, no interaction has been taken place with Serbia on this matter. 

126 

 
 
 
 
 
ANNEX I – RELATIONS BETWEEN THE EU AND SERBIA  

Within  the  framework  of  the  accession  negotiations,  eighteen  chapters  have  been  opened, 
two of which have been provisionally closed (chapters 25 and 26). Serbia accepted the revised 
enlargement methodology and a first political inter-governmental conference with Serbia was 
held on 22 June 2021. As a novelty, negotiation chapters are grouped in six thematic clusters 
and  negotiations  should  be  opened  for  each  cluster  as  a  whole  –  after  fulfilling  opening 
benchmarks – rather than on individual chapters. All chapters of cluster 1 (fundamentals) are 
already opened; cluster 3 (competitiveness and inclusive growth) and cluster 4 (green agenda 
and sustainable connectivity) are the most advanced clusters to be opened next. Serbia tabled 
its negotiating positions on chapters 2, 3, 10, 14, 21 and 27. Serbia was also invited to table its 
negotiating position on chapter 28.  

Serbia  is  participating  in  the  Stabilisation  and  Association  Process.  Serbia  continued  to 
build  a  track  record  in  implementing  the  obligations  of  the  Stabilisation  and  Association 
Agreement  (SAA).  Serbian  legislation  remains  noncompliant  with  the  SAA  in  a  number  of 
areas, including on restrictions on the acquisition of real estate and on discriminatory issuance 
of  payment  cards  by  banks.  As  regards  public  procurement,  inter-governmental  agreements 
concluded  with  third  countries  and  their  implementation  do  not  always  follow  the  EU 
principles of equal treatment, transparency, non-discrimination and competition. As a result, 
EU  companies  may  be  prevented  from  participating  in  large-scale  infrastructure  projects 
implemented in the country.  

Regular  political  and  economic  dialogue  between  the  EU  and  Serbia  continued.  Sub-
committee  meetings  were  held,  together  with  a  meeting  of  a  special  group  on  public 
administration  reform.  The  Stabilisation  and  Association  Parliamentary  Committee  met  in 
January 2021. Serbia also participates in the ministerial dialogue between the economic and 
finance  ministers  of  the  EU  and  the  candidate  countries,  where  joint  recommendations  are 
adopted. The most recent meeting was held in July 2020.  

In 2020, Serbia’s alignment rate with EU Common Foreign and Security Policy positions was 
56%.  Serbia  continued  to  participate  actively  in  EU  crisis  management  missions  and 
operations under the Common Security and Defence Policy.  

Visa-free travel for citizens of Serbia travelling to the Schengen area has been in force since 
December 2009. A readmission agreement between the European Union and Serbia has been 
in  force  since  2008.  The  Commission’s  July  2021  fourth  report  under  the  visa  suspension 
mechanism concluded that Serbia continues to meet the visa liberalisation requirements.  

Under  IPA  II,  Serbia  continues  to  benefit  from  pre-accession  assistance  with  a  total 
allocation of EUR 1.4 billion for the period 2014-2020. This was programmed based on the 
priorities  set  out  in  the  Indicative  Strategy  Paper.  The  second  part  of  the  IPA  National 
Programme 2020 was adopted in November 2020 amounting to EUR 86.1 million with most 
of the funding supporting environment and climate action and Serbia’s alignment with the EU 
acquis.  The  programme  is  also  part  of  the  overall  response  package  to  the  COVID-19 
pandemic.  A  dedicated  action  contributes  to  socio-economic  recovery  of  the  COVID-19 
impact  and  development  and  social  cohesion  of  the  Serbian  society.  An  additional  EUR  45 
million  in  2020  were  allocated  to  the  IPA  Rural  Development  programme (IPARD  II). The 
EU  has  continued  to  support  Serbia  in  border  and  migration  management  following  the 
refugee  crisis  of  2015-2016  with  an  additional  special  measure  adopted  in  August  2020 
amounting to EUR 11.8 million. Serbia also benefits from the IPA multi-country and regional 
programmes  and  participates  in  four  cross-border  cooperation  programmes,  as  well  as  in 
transnational  cooperation  programmes.  The  IPA  III  Regulation  for  the  2021-2027  financial 

127 

 
 
period10 will continue to provide financial support to the region continue to provide financial 
support to the region and will also finance the regional 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  partners  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. 

Serbia participates with IPA support in EU programmes, including Horizon 2020; COSME; 
Erasmus+ and Creative Europe; Europe for Citizens; Employment and Social Innovation.  

10 Official Journal L 330, 20.9.2021 

128 

 
 
 
 
 
 
 
                                                           
STATISTICAL DATA (as of 09.09.2021) 
Serbia 

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

National accounts 
Gross domestic product (GDP) (million national currency) 
Gross domestic product (GDP) (million euro) 
GDP (euro per capita) 
GDP per capita (in purchasing power standards (PPS)) 
GDP per capita (in PPS), relative to the EU average (EU-27 = 100) 
Real GDP growth rate: change on previous year of GDP volume (%) 
Employment growth (national accounts data), relative to the previous year (%) 
Labour productivity growth: growth in GDP (in volume) per person employed, relative to the 
previous year (%) 
Unit labour cost growth, relative to the previous year (%) 
**3 year change (T/T-3) in the nominal unit labour cost growth index (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 (%) 

Note 

Note 

2008 
7 366 s 
77 474 

2008 
2 908 445 
35 713 
4 860 
9 980 
38.8 
5.7 
: 
: 

2015 
7 114 s 
77 474 

2015 
4 315 020 
35 740 
5 040 
11 220 
39.0 
1.8 
: 
: 

2016 
7 076 s 
77 474 

2016 
4 528 192 
36 779 
5 210 
11 330 
39.1 
3.3 
 c 
 c 

2017 
7 040 s 
77 474 

2017 
4 760 686 
39 235 
5 590 
11 620 
38.9 
2.1 
 c 
 c 

2018 
7 001 s 
77 474 

2018 
5 072 932 
42 892 
6 140 
12 250 
39.7 
4.5 
 c 
 c 

2019 
6 964 s 
77 474 

2019 
5 417 725 
45 970 
6 620 
12 990 
40.7 
4.2 
: 
: 

: 
: 
: 

8.9 
27.8 
5.2 
58.1 s 
95.4 
23.7 
2.7 
28.4 
50.2 
: 

: 
: 
 c 

8.1 
26.4 
4.5 
61.0 s 
88.4 
17.0 
1.7 
45.2 
52.2 
: 

: 
: 
 c 

8.2 
26.4 
4.7 
60.6 s 
86.7 
17.1 
1.0 
48.5 
53.3 
: 

: 
: 
 c 

7.2 
26.5 
5.0 
61.4 s 
87.0 
17.7 
1.8 
50.5 
57.1 
: 

: 
: 
 c 

7.7 
25.4 
5.4 
61.6 s 
86.0 
20.0 
2.6 
50.4 
59.1 
: 

2018 
110.8 
87 407 

: 
: 
: 

7.2 
24.0 
6.9 
61.9 s 
84.9 
22.5 
2.6 
51.0 
61.0 
: 

2019 
111.2 
: 

Business 
Industrial production volume index (2015 = 100) 
Number of active enterprises (number) 

Note 

1) 

2008 
107.4 
82 280 w 

2015 
100.0 
86 138 w 

2016 
104.9 
90 905 p 

2017 
109.3 
85 546 p 

129 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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) (%) 
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 (%) 

12.5 w 

8.2 w 

: 

: 

: 

: 

: 

: 

: 

11.5 p 

10.0 

6.3 p 

6.1 p 

: 

: 

6 900 sw 
13 730 w 

6 620 sw 
13 532 w 

7 257 sw 
14 998 p 

8 136 sw 
16 442 p 

9 165 sw 
18 047 

2008 
11.9 d 
: 

2015 
1.5 d 
: 

2008 
- 7 126.3 w 
- 8 488.2 w 
-  196.1 w 
-  982.5 w 
2 540.6 w 
: 
: 
62.1 w 
2 485.7 w 
225.8 w 
: 
2 711.5 w 
: 
: 
-  11.1 sw 

2008 
-  2.5 w 
26.1 w 
41.0 w 
43.5 w 

2015 
- 1 529.0 
- 3 936.0 
725.0 
- 1 658.0 
3 340.0 
152.0 
-  5.1 
22.7 w 
1 803.8 w 
309.0 
48.8 w 
2 114.2 w 
1 509.6 w 
94.8 w 
12.8 sw 

2015 
-  3.5 w 
71.2 w 
39.3 w 
42.8 w 

2016 
1.3 d 
: 

2016 
- 1 317.0 
- 3 423.0 
896.0 
- 1 951.0 
3 161.0 
82.0 
-  4.4 
33.5 
1 899.2 w 
217.0 
63.2 w 
2 126.9 w 
1 370.8 w 
94.3 w 
-  4.0 sw 

2016 
-  1.2 w 
68.8 w 
40.8 w 
41.9 w 

2017 
3.3 d 
: 

2017 
- 2 049.0 
- 3 997.0 
966.0 
- 2 532.0 
3 514.0 
140.0 
-  4.4 
46.6 
2 418.1 w 
130.0 
67.2 w 
2 548.1 w 
1 701.7 w 
90.7 w 
8.6 sw 

2017 
1.1 w 
58.7 w 
41.5 w 
40.4 w 

2018 
2.0 d 
: 

2018 
- 2 092.0 
- 5 244.0 
1 093.0 
- 2 067.0 
4 126.0 
251.0 
-  4.6 
26.5 
3 156.5 w 
307.0 
95.5 w 
3 464.5 w 
1 932.9 w 
87.6 w 
: 

2018 
0.6 ew 
54.4 ew 
41.5 ew 
40.9 ew 

1) 

Note 

Note 

Note 

: 

: 

: 

: 
: 

2019 
1.9 d 
: 

2019 
- 3 273.0 
- 5 680.0 
1 012.0 
- 2 478.0 
3 873.0 
276.0 
-  5.7 
31.4 
3 551.1 w 
263.0 
124.0 
3 815.3 w 
2 310.0 
88.0 w 
: 

2019 
-  0.2 ew 
52.9 ew 
42.1 w 
42.3 w 

Financial indicators 

Note 

2008 

2015 

2016 

2017 

2018 

2019 

130 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2) 

3) 
4) 
5) 

Note 

Note 

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 (%) 
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 (%) 

58.8 sw 
218.9 w 
2 717.2 w 
4 458.5 w 
11 198.0 w 
12 925.6 w 
: 
: 
: 
18.42 w 
20.25 w 
15.25 w 
81.441 
: 
: 

73.5 sw 
166.8 w 
4 148.0 w 
5 776.0 w 
16 193.0 w 
20 719.0 w 
3.1 pw 
: 
: 
2.61 w 
6.50 w 
2.50 w 
120.733 
: 
: 

72.1 sw 
152.4 w 
4 923.0 w 
6 546.5 w 
17 793.9 w 
21 632.4 w 
4.9 pw 
: 
: 
3.04 w 
5.50 w 
2.50 w 
123.118 
: 
: 

65.1 sw 
132.2 w 
5 652.6 w 
7 360.4 w 
19 206.3 w 
22 806.4 w 
3.4 pw 
: 
: 
2.27 w 
5.00 w 
2.00 w 
121.337 
: 
: 

62.5 sw 
126.0 w 
6 703.6 w 
8 611.4 w 
22 047.1 w 
24 605.8 w 
12.6 pw 
: 
: 
2.43 w 
4.25 w 
1.75 w 
118.272 
: 
: 

: 
121.0 w 
7 684.2 w 
10 090.7 w 
24 011.2 w 
26 743.3 w 
17.2 pw 
: 
: 
1.06 w 
3.50 w 
1.00 w 
117.852 
: 
: 

8 161.8 w 

10 378.0 w 

10 204.6 w 

9 961.7 w 

11 261.8 w 

13 378.5 w 

2008 
15 489 
7 039 
- 8 450 
92.2 sw 
58.5 s 
54.6 s 

2008 
-  4.6 

6.7 
71.3 
76.6 

2015 
14 425 
11 447 
- 2 978 
100.0 sw 
65.5 s 
55.9 s 

2016 
15 225 
12 742 
- 2 483 
103.2 sw 
65.7 s 
57.4 s 

2017 
17 559 
14 365 
- 3 194 
100.1 sw 
65.7 s 
57.5 s 

2015 
-  5.4 

5.3 
72.8 
77.9 

2015 
68.1 

2016 
-  5.1 

5.4 
73.2 
78.3 

2016 
70.0 

59.1 

2017 
-  5.5 

4.7 
73.1 
78.1 

2017 
71.2 

61.4 

2018 
20 074 
15 650 
- 4 424 
98.1 sw 
67.0 s 
55.9 s 

2018 
-  5.4 

4.9 
73.5 
78.4 

2018 
72.5 

63.1 

2019 
22 216 
16 859 
- 5 356 
98.9 sw 
66.3 s 
54.7 s 

2019 
-  5.3 

4.8 
73.4 
78.6 

2019 
72.9 

65.2 

Note 

2008 
67.5 bw 

58.2 bw 

56.0 

131 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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 
(%) 
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 (%) 

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) 

Note 
6) 7) 
8) 

9) 

Note 

132 

68.0 bw 
48.9 bw 
37.6 bw 

25.0 w 
20.6 w 
6.3 w 
48.1 w 
29.5 w 

63.7 
48.4 
37.4 

19.4 s 
19.9 s 
4.5 s 
56.1 s 
29.7 w 

66.3 
51.9 
42.7 

18.6 s 
20.2 s 
4.3 s 
57.0 s 
28.3 w 

68.5 
54.5 
45.5 

17.2 s 
21.2 s 
4.1 s 
57.5 s 
27.8 w 

70.5 
55.8 
46.5 

15.9 s 
22.5 s 
4.4 s 
57.2 s 
27.3 w 

72.1 
58.2 
50.2 

15.6 s 
22.6 s 
4.8 s 
56.9 s 
26.6 w 

70.5 w 

70.3 w 

71.7 w 

72.2 w 

72.7 w 

73.4 w 

13.8 bw 
12.0 bw 
16.0 bw 
35.2 bw 
9.8 bw 

11.5 w 

8.1 w 

17.8 
16.9 
18.8 
43.2 
10.6 

15.8 

14.3 

15.4 
14.8 
16.2 
34.9 
9.1 

13.7 

13.4 

13.6 
13.0 
14.4 
31.9 
7.2 

12.3 

11.8 

12.8 
12.1 
13.8 
29.7 
6.5 

13.4 

10.6 

10.5 
10.0 
11.2 
27.5 
5.3 

11.4 

8.1 

2008 
45 674 w 

2015 
61 145 w 

2016 
63 474 w 

2017 
65 976 w 

2018 
68 629 bw 

2019 
75 814 w 

: 

: 
: 
11.7 bw 

98 

40 
37.5 
7.5 

100 

40 
39.4 
7.0 

105 

38 
38.8 
6.2 

110 b 

36 
37.4 
6.8 

111 

33 
32.1 
6.6 

2008 
201.8 sw 
1 194.2 w 

2015 
257.7 sw 
1 293.8 w 

2016 
267.7 sw 
1 291.8 w 

2017 
279.6 sw 
1 231.4 w 

2018 
285.7 sw 
1 207.5 w 

2019 
299.2 sw 
1 217.2 w 

: 

: 

: 

: 

: 

: 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed broadband penetration (per 100 inhabitants) 

: 

: 

: 

35 w 

30 w 

28 w 

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 (%) 

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) 
Electricity generated from renewable sources relative to gross electricity consumption (%) 
Road share of inland freight transport (based on tonne-km) (%) 

Energy 

Primary production of all energy products (thousand TOE) 
Primary production of crude oil (thousand TOE) 
Primary production of solid fuels (thousand TOE) 
Primary production of gas (thousand TOE) 
Net imports of all energy products (thousand TOE) 
Gross inland energy consumption (thousand TOE) 
Gross electricity generation (GWh) 

Agriculture 
Agricultural production volume index of goods and services (at producer prices) (2010 = 100) 
Utilised agricultural area (thousand hectares) 
Livestock numbers: live bovine animals (thousand heads, end of period) 
Livestock numbers: live swine (thousand heads, end of period) 
Livestock numbers: live sheep and live goats (thousand heads, end of period) 
Raw milk available on farms (thousand tonnes) 
Harvested crop production: cereals (including rice) (thousand tonnes) 
Harvested crop production: sugar beet (thousand tonnes) 

2008 
49.2 

465 w 

2008 
: 
0.67 sw 
0.33 w 

2015 
48.6 

693 

2015 
3.8 
0.81 
0.41 

2016 
48.6 

741 

2016 
: 
0.84 
0.36 

2017 
48.6 

963 

2017 
3.6 d 
0.87 
0.38 

33.2 w 

64.0 

64.7 w 

68.0 

2008 
87.5 w 
483.3 

25.9 
: 

2008 
10 750 
676 
8 224 
214 
6 366 s 
16 874 
37 376 

2008 
94.5 w 
3 625.1 
1 057.0 
3 594.0 
1 889.3 sw 
1 659.1 w 
9 333.5 
2 454.6 

2015 
75.3 w 
415.0 

28.9 
41.2 w 

2015 
10 763 
1 121 
7 201 
456 
4 108 s 
14 809 
38 298 

2015 
103.2 w 
3 488.4 
916.0 
3 284.0 
1 992.0 s 
1 610.8 
8 437.0 
2 183.2 

2016 
77.5 w 
418.4 

29.2 
48.7 w 

2016 
10 695 
1 028 
7 201 
417 
4 593 s 
15 432 
39 342 

2016 
112.3 w 
3 460.1 
893.0 
3 021.0 
1 865.0 s 
1 603.7 
10 868.0 
2 683.9 

2017 
78.5 w 
418.0 

27.4 
51.5 w 

2017 
10 496 
988 
7 216 
389 
5 330 s 
15 748 
37 045 

2017 
98.9 w 
3 438.1 
899.0 
2 911.0 
1 887.0 s 
1 599.3 
6 793.3 
2 513.5 

2018 
48.6 

963 w 

2018 
: 
0.92 
0.37 

73.0 

2018 
76.5 w 
394.5 

28.7 
55.5 w 

2018 
10 025 
976 
6 609 
358 
5 385 s 
15 528 
37 426 

2019 
48.6 

781 w 

2019 
: 
0.89 
0.40 

80.0 

2019 
75.1 w 
375.8 

30.1 
68.0 w 

2019 
10 219 
941 
6 826 
349 
5 497 s 
15 420 
37 600 

2018 
113.3 w 
3 486.9 
878.0 
2 782.0 
1 908.0 s 
1 590.0 
10 529.1 
2 325.3 

2019 
116.8 w 
3 481.6 
898.0 
2 903.0 
1 833.0 s 
1 597.0 
10 436.4 
2 305.3 

Note 
10) 

Note 

Note 

Note 

Note 

133 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Harvested crop production: vegetables (thousand tonnes) 

1 053.9 

1 060.7 

1 133.1 

1 086.6 

829.8 

738.5 

Source: Eurostat and the statistical authorities in Serbia 

: = not available 
  b = break in series 

c =  confidential value 

  d =  definition differs 
  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 
* = Europe 2020 indicator 
** = Macroeconomic Imbalance Procedure (MIP) indicator 

  Footnotes: 

1)  Unincorporated enterprises are not included. 
2)  Official external debt of the Republic of Serbia. 
3)  The money supply M1 consists of currency in circulation and funds in giro, current and other accounts belonging to the owners of money balances in banks' 

liabilities, including money balances in the accounts of local government bodies, i.e. accounts from which payments can be made without any restrictions. 

4)  The money supply M2, in addition to M1, includes other dinar deposits, both short-and long-term. 
5)  The money supply M3, in addition to M2, includes short-and long term foreign currency deposits (without the so-called frozen foreign currency savings). 
6)  Wages and salaries paid to employees of legal entities. 
7)  Wages and salaries paid to employees of legal entities and of unincorporated enterprises. 
8)  Wages and salaries are obtained from administrative sources (tax administration records). Average earnings are calculated on the basis of the total amount 

of accrued earnings for the reporting month and the number of full-time equivalent (FTE) employees. 

9)  Change of weighting system. 

10)  Underestimate as the density has been calculated relative to the surface area (including inland waters) rather than to the land area. 

134