COMMISSION STAFF WORKING DOCUMENT North Macedonia 2022 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 2022 Communication on EU Enlargement policy
Date: 2022-10-12
Institutions: Directorate-General for Neighbourhood and Enlargement Negotiations, European Commission
Subjects: North Macedonia, accession criteria, accession negotiations, pre-accession strategy

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 12.10.2022  SWD(2022) 337 final  COMMISSION STAFF WORKING DOCUMENT North Macedonia 2022 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 2022 Communication on EU Enlargement policy                       {COM(2022) 528 final} - {SWD(2022) 332 final} - {SWD(2022) 333 final} - {SWD(2022) 334 final} - {SWD(2022) 335 final} - {SWD(2022) 336 final} - {SWD(2022) 338 final}  
 
 
1.  

INTRODUCTION ...................................................................................................... 3 

1.1.  

1.2.  

CONTEXT ................................................................................................................. 3 

SUMMARY OF THE REPORT  .................................................................................... 3 

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 ..................................................................... 12 

2.2. 

RULE OF LAW AND FUNDAMENTAL RIGHTS.......................................................... 16 

2.2.1  Chapter 23: Judiciary and fundamental rights ........................................... 16 

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

2.3. ECONOMIC CRITERIA ................................................................................................... 48 

2.3.1. The existence of a functioning market economy ........................................... 48 

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

Union .......................................................................................................... 55 

2.4.  

PUBLIC PROCUREMENT, STATISTICS; FINANCIAL CONTROL .............................. 58 

Chapter 5: Public procurement ................................................................................. 58 

Chapter 18: Statistics ................................................................................................ 60 

Chapter 32: Financial control ................................................................................... 62 

3. 

4. 

GOOD NEIGHBOURLY RELATIONS AND REGIONAL COOPERATION 65 

ABILITY TO ASSUME THE OBLIGATIONS OF MEMBERSHIP ................ 67 

CLUSTER 2: INTERNAL MARKET ........................................................................................ 67 

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

Chapter 2: Freedom of movement for workers ........................................................ 69 

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

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

Chapter 6: Company law .......................................................................................... 72 

Chapter 7: Intellectual property law ......................................................................... 73 

Chapter 8: Competition policy ................................................................................. 73 

Chapter 9: Financial services ................................................................................... 74 

Chapter 28: Consumer and health protection ........................................................... 76 

CLUSTER 3: COMPETITIVENESS AND INCLUSIVE GROWTH................................................ 77 

Chapter 10: Digital transformation and media ......................................................... 77 

Chapter 16: Taxation ................................................................................................ 79 

 
 
 
 
Chapter 17: Economic and monetary policy ............................................................ 81 

Chapter 19: Social policy and employment ............................................................. 82 

Chapter 20: Enterprise and industrial policy ............................................................ 85 

Chapter 25: Science and research............................................................................. 86 

Chapter 26: Education and culture ........................................................................... 87 

Chapter 29: Customs union ...................................................................................... 89 

CLUSTER 4: THE GREEN AGENDA AND SUSTAINABLE CONNECTIVITY .............................. 90 

Chapter 14: Transport policy.................................................................................... 91 

Chapter 15: Energy................................................................................................... 92 

Chapter 21: Trans-European networks ..................................................................... 94 

Chapter 27: Environment and climate change ......................................................... 95 

CLUSTER 5: RESOURCES, AGRICULTURE AND COHESION .................................................. 97 

Chapter 11: Agriculture and rural development ....................................................... 97 

Chapter 12: Food safety, veterinary and phytosanitary policy................................. 99 

Chapter 13: Fisheries .............................................................................................. 100 

Chapter 22: Regional policy and coordination of structural instruments............... 100 

Chapter 33: Financial and budgetary provisions .................................................... 103 

CLUSTER 6: EXTERNAL RELATIONS ................................................................................. 104 

Chapter 30: External relations ................................................................................ 104 

Chapter 31: Foreign, security and defence policy .................................................. 105 

2 

 
 
 
 
 
1.  

INTRODUCTION  

1.1.   CONTEXT   

Implementation  of  the  Stabilisation  and  Association  Agreement  (SAA)  between  North 
Macedonia and the European Union, which entered into force in April 2004, continued. Since 
2009,  the  Commission  has  continuously  recommended  that  the  Council  open  accession 
negotiations  with  North  Macedonia,  a  candidate  country  since  2005.  In  March  2020,  the 
European Council endorsed the Council’s decision to open accession negotiations with North 
Macedonia1.  On  19  July  2022,  the  first  Intergovernmental  Conference  on  accession 
negotiations  took  place  with  North  Macedonia,  following  the  approval  of  the  Negotiating 
Framework by the Council. The Commission immediately launched the  analytical review of 
the EU acquis (screening) process, which is the first step in the negotiating process.  

The  authorities  have  continued  to  demonstrate,  including  publicly,  their  commitment  to 
advancing on their EU path. North Macedonia has also fully aligned with the EU positions on 
the  war  in  Ukraine,  demonstrating  thereby  once  more  that  it  is  a  reliable  partner.  The 
country’s  existing  challenges  have  been  exacerbated  by  the  impact  of  the  COVID-19 
pandemic  and  by  new  risks  stemming  from  Russia’s  aggression  against  Ukraine,  including 
high  energy,  commodity  and  food  prices,  combined  with  supply-chain  disruptions.  North 
Macedonia has taken measures to mitigate the impact of the war.   

1.2.   SUMMARY OF THE REPORT2  

The  reporting  period  was  characterised  by  intense  efforts,  which  led  to  the  start  of  the 
accession negotiation process. The holding of the first Intergovernmental Conference in July 
2022 was a historic moment and marked a new phase in the EU accession process for North 
Macedonia.  This  was  a  clear  recognition  of  the  determination  of  North  Macedonia  to 
implement EU related reforms.  

On the political criteria, North Macedonia continued its efforts to strengthen democracy and 
the  rule  of  law,  despite  some  challenges.  The  country  has  shown  its  commitment  to 
continuing to  deliver results in  key areas of the  fundamentals.  Local  elections  took  place in 
October 2021. The Office for Democratic Institutions and Human Rights of the Organisation 
for Security and Cooperation in Europe (OSCE/ODIHR) assessed that they were competitive 
and fundamental freedoms were widely respected. However, limited progress was made over 
the  reporting  period  in  addressing  the  outstanding  recommendations  made  by  the 
OSCE/ODIHR  and  the  Venice  Commission.  As  mentioned  in  the  previous  reports,  the 
electoral legislation should be comprehensively reviewed to address existing inconsistencies 
and the relevant laws need to be adopted in a timely, inclusive and transparent manner, well 
before the next elections. In this regard, the authorities need to step up their efforts and show 
political will to further improve the electoral process. 

The work of Parliament was marred by political polarisation, which delayed the adoption of 
many pieces of legislation. Following intense debates, Parliament adopted conclusions on the 
proposal which paved the way for the opening of accession negotiations. Parliament needs to 

1 https://www.consilium.europa.eu/media/43076/26-vc-euco-statement-en.pdf 
2  This  report  covers  the  period  from  June  2021  to  June  2022.  It  is  based  on  input  from  a  variety  of  sources, 
including contributions from the government of North Macedonia, 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 in rule of law. 
The  report  uses  the  following  assessment  scales  to  describe  the  state  of  play:  early  stage,  some  level  of 
preparation,  moderately  prepared,  good  level  of  preparation  and  well  advanced.  To  describe  progress  made 
during  the  reporting  period,  it  uses  the  following  scale:  backsliding,  no  progress,  limited  progress,  some 
progress, good progress and very good progress. Where appropriate, also interim steps have been used. 

3 

 
 
                                                           
play  an  active  and  positive  role  in  the  EU  accession  negotiation  process.  Joint  and  prompt 
efforts  by  all  parties  are  needed  as  a  matter  of  priority  to  strengthen  Parliament’s  role  as  a 
forum  for  constructive  political  dialogue,  particularly  on  the  EU  reform  agenda.  Parliament 
and  government  committed  to  launch  and  achieve  as  a  matter  of  priority  the  relevant 
constitutional changes, with a view to including in the Constitution citizens who live within 
the  borders  of  the  state.  Proper  planning  and  consultations  are  necessary  to  limit  the  use  of 
fast-track procedures in order to allow for effective scrutiny of and consultation on legislation. 
Oversight of the executive through parliamentary questions to ministers should be conducted 
on  a  more  regular  basis.  The  proposals  for  internal  reform  of  Parliament  agreed  during  the 
third  round  of  the  ‘Jean  Monnet  Dialogue’  in  early  2020  should  be  implemented  without 
further delay. Criminal responsibility for those who orchestrated or committed violence in the 
attack  on  Parliament  on  27  April  2017  continued  to  be  established,  including  with  second 
instance  verdicts.  The  government  continued  to  work  on  the  EU  reform  agenda  and  on 
addressing the consequences of the COVID-19 pandemic and of the war in Ukraine. Decisive 
efforts  are  needed  to  build  momentum  for  reforms  and  move  forward  on  the  EU  accession 
negotiation  process.  Particular  focus  is  needed  on  ensuring  the  effective  implementation  of 
existing  legislation  rather  than  launching  ad  hoc  initiatives.  Inter-ethnic  relations  remained 
stable and the Ohrid Framework Agreement continued to be implemented. 

Civil society organisations (CSOs) continue to operate in an enabling environment, including 
with the adoption of the strategy of cooperation with and development of civil society 2022-
2024. Civil society continued to play an important role in decision-making processes and in 
monitoring the activities of the state. However, efforts are needed to improve transparency in 
policymaking  and  the  inclusiveness  of  consultation  processes.  The  legal  and  financial 
frameworks still need to be improved and implemented in practice. 

North  Macedonia  implemented  a  comprehensive  reform  of  its  intelligence  services. 
However,  the  country  needs  to  strengthen  its  capacity  for  parliamentary  oversight  over  the 
intelligence services. 

North Macedonia remains moderately prepared in terms of its public administration reform. 
It  made  limited  progress  in  implementing  last  year’s  recommendations.  It  adopted  the  new 
2022-2025  public  financial  management  reform  programme.  However,  the  adoption  of  the 
legislation  on  organisation  and  operation  of  state  administrative  bodies  and  the  new  legal 
framework for human resources management (revision of the Law on Administrative Servants 
and the Law on Public Service Employees and a new Law on Top Management Service) have 
been  delayed.  The  new  framework  aims  to  improve  the  management  of  human  resources 
across  the  administration  and  provide  greater  assurance  for  merit-based  recruitment, 
promotion and dismissal, including at senior management level. The new organic budget law 
was  adopted  in  September  2022.  The  State  Commission  for  Prevention  of  Corruption  has 
been  proactive  in  addressing  cases  of  nepotism,  cronyism  and  political  influence  in  the 
process of recruiting public sector employees and in appointing members of supervisory and 
management boards.  

the 

implementation  of 

The  judicial  system  of  North  Macedonia  has  achieved  some  level  of  preparation  /  is 
moderately  prepared.  Some  progress  was  achieved  in  the  field  of  the  judiciary,  through  the 
the 
steady 
recommendations  made  by  the  Venice  Commission  and  the  Senior  Experts’  Group  on 
systemic rule of law issues. The preparation of a new judicial reform strategy has started, in 
an inclusive manner, building upon the lessons learnt from the previous one. Implementation 
of the updated action plan on the judicial reform strategy has continued but needs to become 
more systematic. The judiciary has demonstrated its commitment to protect its integrity and 
independence. The pace of implementation of the human resources strategies for the judiciary 

thereby  addressing 

strategy, 

judicial 

reform 

4 

 
 
and  prosecution  services  needs  to  be  stepped  up.  Judicial  institutions  have  implemented 
consistently the new rules for the appointment, promotion, discipline and dismissal of judges 
and  prosecutors.  Promotions  in  the  higher  courts  faced  a  delay  and  scheduled  retirements 
further  decreased  the  number  of  judges  and  prosecutors.    The  Judicial  Council  and  the 
Council of Public Prosecutors continued implementing the strategic plans. Any new draft law 
on the Academy for Judges and Prosecutors should maintain the Academy as the sole entry 
point to the judiciary and prosecution and should ensure that access to these professions is fair 
and transparent. Work was undertaken to upgrade the software system aiming at putting into 
practice  the  provisions  of  the  Law  on  case  flow  management  for  automatic  and  random 
distribution of cases in the courts, through the automated court case management information 
system (ACCMIS). 

The country has achieved some level of preparation / is moderately prepared in the prevention 
and  fight  against  corruption.  Some  progress  has  been  made  as  the  country  continued  to 
consolidate its performance on investigating, prosecuting and trying several corruption cases, 
including at a high level. The cases initiated by the former Special Prosecutor’s Office (SPO) 
continued to move forward, establishing accountability for the illegal wiretaps. A number of 
cases were subject to first-instance rulings. In line with previous years’ recommendations, the 
State Commission for the Prevention of Corruption (SCPC) has been proactive in providing 
policy  guidance  to  public  institutions  on  preventing  corruption  and  it  opened  several  cases, 
including cases  against  high-level  officials.  The  conclusions of its regular reports should be 
addressed  in  full.  Efforts  to  improve  the  functioning  of  the  SCPC  should  continue  with  a 
further allocation of financial and human resources. Additional human and financial resources 
should  be  made  available  to  the  Public  Prosecution  Office,  investigative  centres  and  law 
enforcements  units  in  charge  of  investigating  corruption.  Sectors  most  vulnerable  to 
corruption require targeted risk assessments and dedicated actions. 

North Macedonia has some level of preparation in the fight against organised crime. It has 
made some progress, mainly in operational cooperation with international partners, as well as 
in improving the coordination of activities to combat organised crime. More needs to be done 
to  improve the  effectiveness  of law enforcement in  fighting certain  forms of crime, such as 
money  laundering  and  financial  crimes.  The  investigative  centres  at  the  Basic  Public 
Prosecution  Office  need  to  be  strengthened  to  achieve  their  objectives  of  increasing  the 
efficiency of investigations and improving coordination between prosecutors, the police and 
other relevant bodies. 

Some  progress  has  been  made  in  the  fight  against  terrorism  and  preventing/countering 
violent  extremism  in  line  with  the  objectives  set  out  in  the  joint  action  plan  on  counter-
terrorism  for  the  Western  Balkans  and  the  bilateral  implementing  arrangement.  A  national 
strategy  for  the  prevention  of  money  laundering  and  financing  terrorism  (2021-2023)  was 
adopted  in  2021.  Work  should  continue  on  reintegration  and  resocialisation  of  returnees  as 
well as on de-radicalisation in prisons.  

The legal framework on the protection of fundamental rights is largely in line with European 
standards.  The  deinstitutionalisation  process  is  progressing  with  the  resettlement  of  persons 
with  disabilities  to  community-based  care.  The  Ministry  of  Labour  and  Social  Policy 
continues  to  invest  in  community  services,  including  support  for  victims  of  gender-based 
violence.  It  is  of  particular  importance  to  implement  all  the  provisions  of  the  Law  on 
prevention  and  protection  from  violence  against  women  and  domestic  violence.  Continued 
improvements  can  be  noted  in  gender  mainstreaming  and  respect  for  women’s  rights.  The 
recommendations made by the European Committee for the Prevention of Torture regarding 
the treatment of detainees and convicts were not adequately addressed. Implementation of the 
legislation  on  hate  speech  and  of  the  national  action  plan  for  the  Istanbul  Convention’s 

5 

 
 
provisions needs to be improved. The civilian external oversight mechanism over the police is 
still not fully functional and it lacks representatives from civil society organisations.  

North Macedonia has achieved some level of preparation/ is moderately prepared in the area 
of  freedom  of  expression.  Overall,  it  made  limited  progress  during  the  reporting  period  to 
address  the previous recommendations. The general  context  is  favourable to  media freedom 
and  allows  for  critical  media  reporting,  although  there  were  some  tensions  during  the  2021 
local  elections.  Action  on  self-regulation  of  the  media  should  resume  and  produce  practical 
results in  advancing professional  standards of journalism.  Greater transparency is  needed to 
regarding media advertising by state institutions and political parties. The authorities need to 
step  up  their  efforts  to  reform  the  public  service  broadcaster,  ensuring  its  independence, 
professional  standards  and  financial  sustainability.  The  reform  process  of  the  public  service 
broadcaster,  in  line  with  its  five-year  development  strategy,  is  constrained  by  delays  in 
appointing  members  of  its  programming  council.  The  council  of  the  Agency  for  Audio  and 
Audiovisual Media Services still needs to be appointed. The labour rights of journalists still 
need to be addressed. 

On  regional  cooperation,  the  country  maintained  good  relations  with  other  enlargement 
countries and continued its engagement in regional initiatives. Existing bilateral agreements, 
including the Prespa Agreement between North Macedonia and Greece as well as the Treaty 
of Friendship, Good Neighbourliness and Cooperation with Bulgaria, need to be implemented 
in good faith by all parties. 

On  the  economic  criteria,  North  Macedonia  has  made  some  progress  and  has  achieved  a 
good level of preparation in developing a functioning market economy. In 2021, the economy 
largely  recovered  from  the  COVID-19  pandemic.  The  government  continued  to  implement 
fiscal  support  measures  to  help  the  recovery.  Helped  by  rebounding  tax  revenue,  the  fiscal 
deficit fell to 5.4 % of GDP in 2021, while debt levels stabilised after rising significantly in 
2020.  With  the  rise  in  food  and  energy  prices  accelerating  in  early  2022,  the  government 
adopted a new set of fiscal measures to contain the negative impact on the economy, though 
the  fiscal  measures  could  have  been  better  targeted.  The  central  bank  tightened  its  policy 
stance  in  view  of  rising  inflationary  pressures.  Important  policy  reforms  to  improve  fiscal 
governance  and  the  sustainability  of  public  finances  stalled.  After  long  delays,  the  new 
organic budget law, which provides for fiscal rules and a fiscal council, was adopted by the 
Parliament  in  mid-September.  The  management  of  public  investment  needs  further 
improvement.  The  banking  sector  remained  sound.  Regulatory  measures  to  ease  borrowing 
requirements were phased out in 2021. The business environment continues to be held back 
by  the  large  size  of  the  informal  economy  and  by  slow  progress  in  streamlining  para-fiscal 
charges. 

North  Macedonia  has  made  some  progress  and  is  moderately  prepared  to  cope  with 
competitive pressure and market forces within the EU. Integration with the EU in trade and 
investment remained at a high level in 2021, in spite of lockdowns and disruptions of supply 
chains  domestically  and  in  trade  partner  countries.  The  share  of  high-value  products  in 
exports  increased  further.  There  was  further  progress  towards  improving  vocational 
educational training, but major skills shortages persist to meet labour market needs, entailing 
a long school-to-work transition. These issues, as well as large gaps in transport and energy 
infrastructure,  low  investment  and  innovation  spending  are  holding  back  the  country’s 
potential for growth. The digitalisation of the economy is advancing, but the competitiveness 
of domestic businesses could be improved through a wider offering of public e-services. 

As  regards  its  ability  to  assume  the  obligations  of  membership,  North  Macedonia  is 
moderately  prepared  in  most  of  the  areas  covered  by  Cluster  2  on  the  internal  market, 

6 

 
 
namely  the  free  movement  of  goods,  services  and  capital,  intellectual  property,  competition 
policy,  financial  services  and  consumer  and  health  protection.  The  country  has  achieved  a 
good level of preparation on company law, although it is still at an early stage on freedom of 
movement for workers. In the reporting period, North Macedonia made good progress on free 
movement of capital and some progress on company law and financial services. No progress 
was made on competition policy. Overall, more progress is needed in the coming year in the 
areas covered by this cluster as it will feed into North Macedonia’s preparations to meet the 
requirements  of  the  EU’s  internal  market.  Work  on  this  cluster  is  highly  relevant  for  the 
development of the Common Regional Market.  

Overall, North Macedonia is moderately prepared in most of the areas covered by Cluster 3 
on  competitiveness  and  inclusive  growth,  including  in  digital  transformation  and  media, 
taxation, enterprise and industrial policy, education and culture and economic and monetary 
policy. It has achieved a good level of preparation in science and research and in the customs 
union. Some progress was made in most of the areas covered by this cluster. Good progress 
was made in the area of economic and monetary policy, following the adoption of the Organic 
Budget  Law  in  September  2022.  More  efforts  are  needed,  however,  particularly  in  areas 
where  limited  progress  was  made,  such  as  digital  transformation  and  media  as  well  as 
education and culture.  

On  Cluster  4  on  the  Green  Agenda  and  sustainable  connectivity,  North  Macedonia  has 
achieved a good level of preparation in trans-European networks. The country is moderately 
prepared  on  transport  policy  and  energy  and  has  achieved  some  level  of  preparation  on 
environment  and climate change. Some progress  was made in  the areas of environment  and 
climate change. Substantial efforts are needed in the areas where limited progress was made 
such  as  in  energy,  transport  policy  and  trans-European  networks.  The  country  needs  to 
accelerate the implementation of the Economic and Investment Plan and of the Green Agenda 
for the Western Balkans over the upcoming period. 

North  Macedonia  is  moderately  prepared  in  most  areas  of  Cluster  5  on  resources, 
agriculture  and  cohesion.  It  has  achieved  a  good  level  of  preparation  in  the  area  of  food 
safety, veterinary and phytosanitary policy and is at an early stage of preparation in financial 
and budgetary provisions. Over the reporting period, some progress was made in agriculture 
and  rural  development  and  in  food  safety,  veterinary  and  phytosanitary  policy.  However, 
further efforts are needed, in particular in areas where limited or no progress was made, such 
as in fisheries, financial and budgetary provisions, and in regional policy and the coordination 
of structural instruments. 

Concerning Cluster 6 on external relations, North Macedonia is moderately prepared in the 
area  of  external  relations  and  has  reached  a  good  level  of  preparation  with  regard  to  the 
common foreign and security policy. The country made limited progress during the reporting 
period  on  common  commercial  policy.  North  Macedonia  has  made  very  good  progress  by 
fully aligning with the EU common foreign and security policy, following Russia’s aggression 
against Ukraine. By doing so, North Macedonia has shown it can be a reliable partner.  

North Macedonia remains one of the main transit routes for migration movement. The country 
continues  to  play  a  constructive  role  in  the  management  of  mixed  migration  flows.  It 
cooperates  effectively  with  neighbouring  countries  and  EU  Member  States,  including  with 
guest  officers  from  the  EU  Member  States  on  the  ground.  Efforts  to  ensure  basic  living 
conditions and services for all migrants staying in the country continued. The registration of 
migrants and adequate protection-sensitive profiling remains a priority and needs to be carried 
out  in  a  more  systematic  manner.  In  August  2022,  the  Commission  negotiated  a  status 
agreement  with  North  Macedonia  that  would  allow  the  European  Border  and  Coast  Guard 

7 

 
 
Agency  (Frontex)  to  deploy  the  European  Border  and  Coast  Guard  standing  corps  to  the 
country.  The  agreement  is  expected  to  be  signed  before  the  end  of  the  year.  The  country 
should take a more systematic approach to fighting the smuggling of migrants. 

2. 

CLUSTER 1: THE FUNDAMENTALS OF THE ACCESSION PROCESS 

FUNCTIONING OF DEMOCRATIC INSTITUTIONS AND PUBLIC ADMINISTRATION 

2.1. 
REFORM 

2.1.1.  Democracy 

The  reporting  period  was  characterised  by  intense  efforts,  which  led  to  the  start  of  the 
accession negotiation process. The holding of the first Intergovernmental Conference in July 
2022 was a historic moment and marked a new phase in the EU accession process for North 
Macedonia.  This  was  a  clear  recognition  of  the  determination  of  North  Macedonia  to 
implement EU related reforms. The country continued its efforts to improve democracy and 
the rule of law, despite some challenges.  

Elections  

Overall, the legal framework remains conducive to the organisation of democratic elections. 
However,  limited  progress  has  been  made  over  the  reporting  period  in  addressing  and 
implementing the outstanding recommendations made by the OSCE/ODIHR and the Venice 
Commission.  As  mentioned  in  previous  reports,  the  electoral  legislation  should  be 
comprehensively  reviewed  to  address  existing  inconsistencies  and  the  relevant  laws  need  to 
be  adopted  in  a  timely,  inclusive  and  transparent  manner,  well  before  the  next  elections.  In 
this  regard,  the  authorities  need  to  step  up  their  efforts  and  show  political  will  to  further 
improve the electoral process. 

Local  elections  took  place  on  17  and  31  October  2021.  Overall,  VMRO-DPMNE3  won  42 
mayoral  posts  (against  five  in  2017)  and  SDSM4  won  16  (against  57  in  2017).  The  ethnic 
Albanian parties broadly retained their positions won in 2017. Only two women were elected 
as mayors. Political parties should take further steps to encourage the participation of women 
in the electoral process. 

According  to  the  final  report  by  the  OSCE/ODIHR,  the  elections  were  competitive  and 
fundamental  freedoms  were  widely  respected.  However,  there  are  still  numerous  gaps  and 
inconsistencies in the electoral legal framework. The frequent and often unaligned changes to 
the  Electoral  Code,  which  were  adopted  in  a  hasty  manner  and  just  prior  to  elections,  are 
contrary  to  international  good  practices.  Candidates  could  campaign  freely,  but  negative 
rhetoric, frequently targeting women, was noted. While the voting procedures were generally 
respected, frequent issues were identified with the use of biometric identification devices. 

A comprehensive reform of electoral legislation, in line with all outstanding OSCE/ODIHR 
recommendations  and following a broad consultative  process, needs to be finally completed 
well in advance of the next elections. The accuracy of the voter register should be improved 
through systematic data updates. 

In  both  rounds  of  the  local  elections,  the  State  Election  Commission  met  most  legal 
deadlines,  despite  the  short  timeframe  to  adapt  to  the  amendments  to  the  Electoral  Code 
adopted  in  September  2021.  The  State  Election  Commission  needs  to  be  allocated  the 
necessary resources in a timely manner to carry out its mandate efficiently and independently.  

3 Internal Macedonian Revolutionary Organisation – Democratic Party for Macedonian National Unity 
4 Social Democratic Union of Macedonia 

8 

 
 
                                                           
Parliament  

The work of Parliament was marred by political polarisation, which delayed the adoption of 
many pieces of legislation. Following intense debates, Parliament adopted conclusions on the 
proposal  which  paved  the  way  for  the  opening  of  accession  negotiations.  The  Parliament 
needs to  play  an active  and positive role in  the EU accession negotiation process.  Joint and 
prompt efforts by all parties are needed as a matter of priority to strengthen Parliament’s role 
as a forum  for constructive political dialogue, particularly on the EU reform agenda. Proper 
planning  and  consultations  are  needed  to  limit  the  use  of  fast-track  procedures  in  order  to 
allow  for  effective  scrutiny  of  and  consultation  on  legislation.  Oversight  of  the  executive 
through  parliamentary  questions  to  ministers  should  be  conducted  on  a  more  regular  basis. 
Parliament  should  implement  without  further  delay  the  proposals  for  internal  reform  agreed 
during the third round of the ‘Jean Monnet  Dialogue’ in early 2020. Criminal responsibility 
for  those  who  orchestrated  or  committed  violence  in  the  attack  on  Parliament  on  27  April 
2017 continued to be established. Some political parties took steps to improve their internal 
democracy. Further efforts are needed to increase the transparency of the funding of political 
parties. 

Following  the  replacement  of  Members  of  Parliament,  who  became  mayors  after  the  2021 
local  elections,  and ministers after the restructuring of the  government  in January  2022, the 
number of women Members of Parliament (50 out of 120, i.e. 42%) increased by three and is 
now  the  highest  ever.  The  number  of  MPs  from  the  non-majority  communities  remained 
unchanged (42 out of 120, i.e. 35%). Alternativa joined the ruling coalition in January 2022, 
while BESA moved to the opposition – see Governance. 

After difficult and tense debates, Parliament adopted in July 2022 the proposal that paved the 
way for the start of the EU accession negotiations. As a negotiating country, North Macedonia 
has new opportunities and responsibilities. In this regard, Parliament has an important role to 
play in the EU accession negotiation process. The governing coalition and opposition need 
to  work  together  constructively  within  Parliament  and  focus  on  concrete  steps  in  the 
negotiation  process,  including  by  taking  forward  EU  related  reforms  in  the  interests  of 
citizens.  Over  the  reporting  period,  Parliament  has  remained  the  main  forum  for  political 
dialogue.  In  March  2022,  Parliament  adopted  with  cross-party  consensus  a  Declaration 
Condemning  Military  Acts  which  Jeopardise  the  Territorial  Integrity  and  Sovereignty  of 
Ukraine. The opposition supported several laws and a set of economic measures to address the 
consequences  of  COVID-19.  The  National  Council  for  EU  Integration,  chaired  by  the 
opposition,  has  the  responsibility  for  securing  broad  consensus  on  the  EU  agenda.  It  held 
three sessions during the reporting period.  

However,  the  work  of  Parliament  was  marred  by  persisting  polarisation  between  the  ruling 
parties and the opposition, which escalated into disruptions and attempted physical altercation 
on  some  occasions.  Since  May  2022,  VMRO-DPMNE  started  an  ‘active  blockage’  of 
Parliament.  Following  the  opening  the  accession  negotiation  process,  the  main  opposition 
party submitted in September 2022 to Parliament an initiative for a referendum about the law 
on ratification of the Treaty of Friendship, Good Neighbourliness  and Cooperation between 
Bulgaria  and  North  Macedonia.  This  initiative  was  rejected  by  the  Speaker.  Controversies 
surrounding  the  composition  of  the  Committee  on  Issues  of  Elections  and  Appointments 
delayed  the  work  of  that  committee  and  of  other  committees.  A  lack  of  consensus  further 
delayed important  appointments of four new judges of the Constitutional Court, five deputy 
ombudspersons,  two  members  of  the  Council  of  Public  Prosecutors,  members  of  the 
programme council of the public service broadcaster and the council of the Agency for Audio 
and  Audiovisual  Media  Services,  and  a  member  of  the  Commission  for  Protection  and 

9 

 
 
Prevention  against  Discrimination.  Appointments  to  these  positions  must  be  based  on  merit 
and not on political grounds.  

Challenges  remain  in  terms  of  planning  the  law-making  process  more  efficiently.  In  2021, 
Parliament adopted 213 laws, of which 113 were under the regular legislative procedure, 81 
under shortened procedure and 19 ratifications. The opposition challenged the use of the ‘EU 
flag’ procedure, a fast-track procedure aiming at aligning legislation with the EU acquis, and 
it  blocked  several  draft  laws  at  the  level  of  committees.  The  number  of  laws  adopted  in 
shortened procedure decreased slightly but remains still high. These need to be significantly 
limited as they reduce opportunities for inclusive legislative processes and meaningful debates 
– see 2.1.2. Public Administration Reform.  

Parliament  oversight  of  the  executive  continued  with  seven  sessions  for  parliamentary 
questions  in  2021.  Such  sessions  were  halted  prior  to  the  October  2021  local  elections  and 
resumed only in  April 2022, more than three months  after the new  government took  office. 
Two  motions  of  no  confidence  in  ministers  of  the  former  government  were  not  debated  as 
new  ministers  took  on  those  portfolios.  The  plenary  and  relevant  committees  discussed  the 
annual reports of regulatory, monitoring and supervisory bodies. 

There  was  no  significant  progress  in  implementing  the  commitments  made  during  the  third 
round  of  the  ‘Jean  Monnet  Dialogue’  in  early  2020.  These  include  amending  the  rules  of 
procedures,  including  on  the  constitutive  session,  greater  governmental  oversight,  public 
hearings, the parliamentary calendar and procedures for EU-flagged laws. While the working 
group on the ‘Jean Monnet Dialogue’ met twice in 2021 and one more time in 2022 to discuss 
the implementation of the commitments made, limited progress has been made and the Rules 
of  Procedure  remain  unchanged.  The  process  should  be  completed  without  further  delay  to 
ensure a better functioning of Parliament. 

As regards the protection of human rights and fundamental freedoms, Parliament approved 
with  cross-party  support  the  new  organisation  of  the  Ombudsman’s  Office.  The  Club  of 
Women  MPs  and  inter  party  parliamentary  groups  on  youth,  LGBTIQ,  people  with 
disabilities  and  Roma  implemented  numerous  activities  in  close  cooperation  with  relevant 
civil society organisations. Parliament and government committed to launch and achieve as a 
matter  of  priority  the  relevant  constitutional  changes,  with  a  view  to  including  in  the 
Constitution citizens who live within the borders of the state.   

Work continued to establish the accountability for the violent attacks in Parliament in April 
2017.  The  Court  of  Appeals  in  Skopje  upheld  first  instance  sentences  for  those  who 
committed violence.  

Efforts  should  continue  to  improve  the  efficiency  of  the  democratic  system,  including 
transparency  on  the  funding  of  political  parties,  to  address  the  recommendations  made  by 
the  Group  of  States  against  Corruption  (GRECO).  See  Chapter  23  –  Judiciary  and 
fundamental rights. Political parties should also improve their internal democratic processes. 
SDSM5 held direct elections for a party leader for the second time. 

Governance 

The  government  continued  to  work  on  the  EU  reform  agenda  and  on  addressing  the 
consequences  of  the  COVID-19  pandemic  and  of  the  war  in  Ukraine.  Decisive  efforts  are 
needed to build momentum for reforms  and move forward on the EU accession negotiation 
process.  Work  should  focus  on  ensuring  that  the  existing  legislation  is  implemented 

10 

 
 
                                                           
 
effectively rather than launching ad hoc initiatives. Inter-ethnic relations remained stable and 
the Ohrid Framework Agreement continued to be implemented. 

In January 2022, 62 of 120 Members of the Parliament supported the new government, led by 
a  new  Prime  Minister.  The  new  ruling  coalition  is  composed  of  SDSM  (together  with  its 
electoral  coalition  partners  from  smaller  parties),  DUI6,  Alternativa  and  DPA7.  In  the 
government,  19%  of  ministers,  12%  of  deputy  ministers  and  36%  of  state  secretaries  are 
women. 

The  main  priorities  of  the  government  programme  for  2022-2024  focus  on  sustainable 
economic  growth,  social  inclusion  and  human  capital  development,  rule  of  law  and  good 
governance, promoting democracy and freedom as well as NATO and EU integration. 

Following  the  start  of  the  EU  accession  negotiations  process,  government  adopted  in 
September  the  Structure  for  Negotiation,  led  by  the  Chief  Negotiator.  It  is  important  to 
ensure  that  this  structure  functions  smoothly  and  effectively,  while  including  the  relevant 
stakeholders in a transparent and inclusive manner.  

The  inter-ethnic  situation  remained  calm  overall.  The  Committee  on  Inter-Community 
Relations accelerated its efforts to improve inter-ethnic relations by holding regular sessions 
despite  the  COVID-19  pandemic,  and  by  implementing  intercultural  activities  between 
students  from  different  ethnic  communities.  The  2001  Ohrid  Framework  Agreement,  which 
fosters the multi-ethnic character of the society, continued to be implemented.  

The  country  needs  to  finalise  the  reform  process  of  the  local  self-government  system.  The 
amendments  to  the  law  on  financing  local  self-government  units  aim  at  securing  additional 
financial  resources  for  municipalities  and  strengthening  public  finance  management  at  local 
level.  Building  on  this,  the  government  should  progress  with  the  overall  reorganisation  of 
competencies between the central and the subnational level. Municipalities have encountered 
severe  financial  difficulties  as  a  result  of  inflation  and  increased  energy  costs.  The 
polarisation between municipalities, mostly led by the opposition after the October 2021 local 
elections,  and  the  government  has  complicated  the  negotiations  to  agree  on  measures  to 
address this issue. 

Civil society  

Civil society organisations (CSOs) continue to operate in an enabling environment, aided by 
the adoption of the strategy of cooperation with and development of civil society 2022-2024. 
Civil  society  continued  to  play  an  important  role  in  decision-making  processes  and  in 
monitoring the activities of the state. However, efforts are needed to improve transparency in 
policymaking  and  the  inclusiveness  of  consultation  processes.  The  legal  and  financial 
frameworks still need to be improved and implemented in practice. 

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

Civil  society  has  played  an  essential  role  by  monitoring  government  policies  and  providing 
important  information  for  both  citizens  and  state  institutions.  Civil  society  organisations 
continued to promote human rights and fundamental freedoms by being steadfast in their roles 
as watchdogs and through their involvement in policy-making. Despite the negative economic 
and social impact of the COVID-19 pandemic, civil society organisations have demonstrated 
a unified response in supporting activities to provide assistance to people in need. 

6 Democratic Union for Integration 
7 Democratic Party of Albanians 

11 

 
 
                                                           
The Council for Cooperation between the Government and Civil Society continues to be the 
main  structural  channel  for  consulting  and  involving  civil  society  in  policy  dialogue  and 
decision-making.  However,  further  efforts  are  needed  to  involve  civil  society  in  policy  and 
structural policy-making in a more inclusive and transparent manner. The representatives of 
the civil society organisations have boycotted the work of the Council since March 2022. The 
authorities did not reinstate standard allocations for state funding of the annual programme for 
cooperation with civil society in the supplement to 2022 state budget.  

The  strategy  for  cooperation  with  and  development  of  civil  society  2022-2024,  adopted  in 
December  2021,  aims  to  improve  the  legal  and  institutional  environment  for  civil  society, 
with an adequate financial framework for activities of CSOs and a sound state-funding model. 
An effective monitoring framework is needed to implement the strategy. Local authorities are 
encouraged to involve civil society organisations in policy-making processes. 

Civilian oversight of the security/intelligence sector  

Parliamentary oversight of the intelligence services was exercised more regularly, but further 
work is needed to improve efficiency. The relevant committees carried out inspections of the 
institutions  of  the  security  sector.  However,  the  delay  in  employing  the  technical  experts 
impeded the performance of the Committee on Interception. The Civilian Oversight Council 
is  not  fully  functional  and  needs  to  be  allocated  sufficient  administrative  and  financial 
resources to carry out its mandate, as a matter of urgency. 

2.1.2  Public administration reform  

North Macedonia remains moderately prepared in terms of its public administration reform. 
It  made  limited progress  in  implementing last  year’s recommendations. It  adopted the new 
2022-2025  public  financial  management  reform  programme.  However,  the  adoption  of  the 
legislation  on  organisation  and  operation  of  state  administrative  bodies  and  the  new  legal 
framework for human resources management (revision of the law on administrative servants 
and  the  law  on  public  service  employees  and  a  new  law  on  top  management  service)  have 
been  delayed.  The  new  framework  aims  to  improve  the  management  of  human  resources 
across  the  administration  and  provide  greater  assurance  for  merit-based  recruitment, 
promotion and dismissals, including at senior management level. The new organic budget law 
was  adopted  in  September  2022.  The  State  Commission  for  Prevention  of  Corruption  has 
been  proactive  in  addressing  cases  of  nepotism,  cronyism  and  political  influence  in  the 
process  of  recruiting  public-sector  employees  and  in  the  process  of  appointing  members  of 
supervisory and management boards.  

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

  adopt the law on administrative servants, the law on public service employees and the law 

on top management service and start their implementation; 

  adopt  the  law  on  organisation  and  operation  of  state  administrative  bodies  and  related 
secondary legislation in line with the recommendations for the new organisation of state 
administrative bodies and start their implementation; 

  ensure full implementation of the law on general administrative procedures with a focus 

on electronic exchange of documents. 

Strategic framework for public administration reform 

Implementation of the 2018-2022 public administration reform strategy and its monitoring 
and  reporting  continued  with  some  delays.  Only  some  of  the  planned  activities  were  fully 

12 

 
 
implemented.  The  2018-2021  public  financial  management  reform  programme  ended  in 
December  2021.  In  June  2022,  the  government  adopted  a  new  programme  for  the  period 
2022-2025.The  high-level  Public  Administration  Reform  Council  and  the  Public  Financial 
Management  Council  continued  to  provide  both  political  support  for  and  supervision  of 
reforms. The Ministry of Information Society and Administration still lacks a properly staffed 
public  administration  department  to  drive  the  reforms  at  technical  level.  Efforts  to  improve 
managerial  accountability  (see  Chapter 32  – Financial control) should be further  enhanced. 
Implementation  of  both  strategies  continues  to  depend  largely  on  donor  funding.  However, 
the annual budget allocation for the public administration reform increased noticeably.   

Policy development and coordination  

The  legal  framework  and  the  institutional  structures  provide  for  a  coherent  policy-making 
system  and  include,  an  electronic  system  for  strategic  planning  and  preparation  of  the 
government’s  annual  work  plan.  Efforts  continued  to  clarify  the  responsibilities  of  some 
policy-making institutions  and ensure their proper functioning  and in  streamlining  reporting 
lines.  Medium-term  budgetary  planning  and  fiscal  policies  are  consistent  with  the 
government’s strategic priorities. The government adopted a new methodology for preparing, 
monitoring  and  reporting  on  sector  strategies  in  May  2022  with  the  aim  of  strengthening 
policy  planning.  The  General  Secretariat’s  central  coordination  and  quality  control  role 
remains insufficient. The new 2021-2025 National Programme for the Adoption of the Acquis 
was  adopted  in  June  2021,  reflecting  the  revised  enlargement  methodology.  No  report  has 
been  published  on  its  implementation  yet.  Progress  in  EU-related  reforms  is  addressed  as  a 
pre-agenda item at each government session. 

Evidence-based policy and legislative development continue to be partially ensured. There 
are  still  institutions  that  have  not  digitalised  their  registers,  which  hinders  the  quality  of 
administrative data. The sharing of administrative data needs to be expanded and simplified in 
order  to  be  more  consistently  used  in  the  decision-making  process.  Regulatory  impact 
assessments continued to be formally used for all laws that the government sent to Parliament 
in  regular  procedure,  but  not  for  the  laws  that  were  adopted  in  shortened  procedure.  All 
regulatory  impact  assessments,  irrespective  of  the  legislative  procedure,  should  be  sent  to 
Parliament.  Efforts  are  ongoing  to  improve  the  use  and  quality  of  regulatory  impact 
assessments, in particular budgetary impact assessments. The Ministry of Information Society 
and  Administration,  which  is  responsible  for  the  process,  should  strengthen  its  capacity  to 
carry  out  more  effective  and  consistent  quality  control.  The  national  electronic  consultation 
system  allows  for  the  inclusive  participation  of  all  stakeholders  in  public  consultations. 
However, quality control and follow-up to the public consultation process needs to be further 
improved. The share of laws adopted under shortened procedures fell slightly, to 38% in 2021 
(see 2.1.1. Democracy). These laws did not undergo a proper public consultation process and 
were  not  regularly  accompanied  by  impact  assessments.  The  quality  of  legislative  drafting 
needs to be improved. Frequent legislative amendments create legal uncertainty and impede 
proper implementation. The use of the ‘EU flag’ procedure needs to be consistent and clearly 
linked  to  laws  that  aim  primarily  at  aligning  national  law  with  the  EU  acquis  (see  2.1.1 
Democracy).  

Public scrutiny of government work is ensured through government press releases and the 
publication  of  the  agendas  and  minutes  of  government  sessions.  Documents  adopted  at 
government sessions are not published. The publication of the 2020 and 2021 annual reports 
on the work of the government has also been delayed. 

13 

 
 
Public financial management 

The  national  authorities  have  completed  implementation  of  the  2018-2021  public  financial 
management reform programme. There were some delays due to the COVID-19 pandemic, 
unrealistic planning and the delayed adoption of the organic budget law. The law was finally 
adopted  in  September  2022.  The  country  submitted  the  2022-2024  Economic  Reform 
Programme in good time, which aims to stabilise debt in the medium term by curbing current 
expenditure.  In  June  2022,  the  government  adopted  a  new  public  financial  management 
programme for the period 2022-2025 (see also Chapter 17 – economic and monetary policy).  

The Ministry of Finance continued its efforts to improve the transparency of public finance 
management. It continued to publish data on the revenue and expenditure of public and state-
owned  companies  on  a  quarterly  basis.  It  also  launched  a  new  transparency  tool  on  public 
debt and published quarterly reports on execution of local government budgets.  

The Ministry of Finance must invest further in increasing public participation at every phase 
of  budget  preparation,  execution  and  reporting.  Budgetary  transparency  and  public 
expenditure  effectiveness  need  to  further  improve  through  the  efficient  implementation  of 
the new organic budget law as well as the development of an integrated financial management 
information  system.  The  System  is  also  foreseen  in  the  2022-2025  public  financial 
management reform programme. The 2022-2024 Economic Reform Programme foresees the 
development  of  an  integrated  tax  information  system  to  improve  the  digitalisation  of  the 
public administration.  

Public service and human resources management 

North Macedonia needs to adopt the revised law on administrative servants and law on public 
sector  employees  and  the  new  law  on  top  management  service,  with  the  aim  of  ensuring 
merit-based  recruitment  and  fair  promotions  and  dismissals  at  management  level. 
Amendments  to  these  laws  since  they  were  adopted  in  2014  have  led  to  inconsistent 
application  of  recruitment  and  promotion  procedures.  Contradictory  rules  in  the  law  on 
internal  affairs  that  allow  for  employees  to  be  excluded  from  the  scope  of  the  law  on 
administrative  servants  still  apply.  The  administration  still  frequently  uses  procedures  to 
convert temporary or service employment contracts into permanent contracts. The grounds for 
dismissal also need to be made more transparent. A proper follow-up should be ensured to the 
recommendations of the State Commission for Prevention of Corruption on improving public-
sector recruitment procedures (see Chapter 23 – Judiciary and fundamental rights).  

The  Ministry  of  Information  Society  and  Administration  coordinates  and  monitors  the 
management  of  human  resources  across  the  public  administration.  The  commitment  and 
capacity of all the institutions involved need to increase to ensure the systematic application 
of relevant legislation. The use of the Human Resources Management Information System by 
line  institutions  increased.  The  remuneration  system  is  yet  to  be  revised.  A  number  of 
institutions  still  maintain  the  practice  of  paying  salary  supplements  although  for  lower 
amounts under the Law on Execution of the 2022 budget.  

According  to  the  register  of  public-sector  employees,  which  does  not  include  staff  of 
institutions such as the army and law enforcement agencies, as of December 2021, 55.3% of 
all public service employees were women. However, women are by far less represented in top 
management positions, accounting for 14% of all management staff in June 2022. A resource 
centre for  gender-responsive policy-making and  budgeting was set  up in  March 2022 in  the 
Ministry  of  Labour  and  Social  Policy.  Equitable  representation  of  minorities  remains 
inconsistent across the public sector and across all categories of civil servants. Concerns have 
been expressed, including by the State Statistical Office, over the initiative of the Ministry of 

14 

 
 
Information  Society  and  Administration  to  revise  the  percentage  in  the  formula  of  the  so-
called ‘BalancER’. This is a human resources tool, which determines the proportion of public 
employees from each ethnic group. The transfer of employees from the Ministry of Political 
System and Relations between Communities to  various institutions was not  completed, thus 
continuing to undermine the principles of merit and effectiveness.  

Professional  development  is  not  systematic  and  the  government  still  lacks  a  centralised 
database  of  all  trainings  offered  by  the  various  institutions.  It  upgraded  the  regulations  on 
integrity in the public service at both central and local level and adopted a methodology for 
assessing  the  risk  of  institutional  corruption  in  November  2021.  The  State  Commission  for 
Prevention  of  Corruption  is  working  on  strengthening  professional  integrity  in  the 
municipalities. Whistle-blower legislation is in place but there is no data on whether and how 
whistle-blowers  are  protected  from  retaliatory  action.  According  to  the  annual  report  of  the 
State  Commission  for  Prevention  of  Corruption,  the  institutions  reported  44  whistle-blower 
instances in 2021 and sent nine reports directly to the State Commission. 

Accountability of the administration 

Following  the  functional  review  of  139  central  government  institutions,  in  March  2022  the 
government  adopted  a  report  with  recommendations  and  proposals  on  the  reorganisation  of 
functions per policy area, selecting three institutions in which to run a pilot. The government 
is  currently  working  on  adopting  a  new  law  on  state  organisation  to  streamline  the 
institutional  framework,  eliminate  overlapping  competences,  improve  the  administration’s 
efficiency  and  improve  the  lines  of  accountability.  The  delegation  of  decision-making 
authority  to  middle  management  both  at  central  and  at  local  level  is  still  limited.  Further 
efforts  are  needed  to  efficiently  mainstream  managerial  accountability  across  the  public 
administration (see Chapter 32 - Financial Control). 

Legislation  provides  for  scrutiny  by  independent  oversight  bodies,  in  particular  the  State 
Audit Office and the Ombudsperson. However, the effectiveness of these bodies needs to be 
improved.  There  needs 
their  findings  and 
to  be  more  systematic  follow-up 
recommendations.  Citizens’  right  to  access  public  information  is  enshrined  in  legislation. 
The  proactive  disclosure  of  information  and  datasets  on  official  websites  should  be  further 
encouraged,  however.  The  Agency  for  Protection  of  Free  Access  to  Public  Information 
increased  its  staff  and  training  offers  and  created  two  new  portals  for  applicants  and 
information holders. The COVID-19 pandemic was the main reason for delays in responding 
to requests for public information by many institutions.  

to 

The  legal  framework  covering  citizens’  right  to  good  administration  provides  for 
administrative and judicial reviews. Most of the decisions continue to be based on procedural 
considerations and not on merit, which in combination with lengthy procedures, discourages 
citizens  from  pursuing  administrative  justice.  There  were  delays  in  enforcing  administrative 
court  rulings  by  the  respective  institutions,  which  were  themselves  rarely  decided  on  merit. 
The legislation gives  citizens the right to seek compensation  and stipulates the liability of 
public authorities in cases of wrongdoing. In 2021, courts awarded compensation for damages 
in eight cases. 

Service delivery to citizens and businesses 

Most administrative services for citizens and businesses are offered both offline and online – 
through  the  national  e-portal  for  service,  including  facilities  for  people  with  special  needs. 
Efforts  are  ongoing  to  upgrade  the  e-portal  to  bring  in  135  new  services  in  an  attempt  to 
develop  a  more  user-oriented  service  delivery.  The  number  of  both  registered  users  and 
completed  services  on  the  portal  increased  in  2021,  but  remains  below  expectations.  State 

15 

 
 
institutions offering services to citizens need to  demonstrate more commitment to providing 
services through the e-portal. The population register was used to crosscheck the 2021 census 
data. The quality of data in the register needs to improve as it is used as the principal register 
in  the  country.  The  government  encouraged  all  state  institutions  to  use  the  interoperability 
framework to its full potential. 

North Macedonia made no progress on simplifying administrative procedures. The law on 
general  administrative  procedures  is  not  yet  systematically  implemented  across  the 
administration. 

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,  high  quality  and  efficient)  judicial  system  and  an  effectively  fighting  against 
corruption are of paramount importance, as is the respect for fundamental rights in law and 
in practice.  

North  Macedonia  has  achieved  some  level  of  preparation  /  is  moderately  prepared  to 
apply the EU acquis and European standards in this area. Overall, it has made some progress, 
including through strengthened judicial independence. Implementation of the judicial strategy 
reached  its  final  stage  and  a  new  strategy  is  being  prepared.  The  Law  on  the  Public 
Prosecutor’s  Office  continued  to  be  implemented  consistently,  thereby  ensuring  the 
accountability for crimes arising from and related to the illegal wiretaps. This resulted notably 
in  important  verdicts  in  high  level  cases.  The  State  Commission  for  the  Prevention  of 
Corruption  continues  to  carry  out  its  mandate  proactively.  Corruption  remains  prevalent  in 
many  areas  and  is  an  issue  of  concern.  North  Macedonia  continues  to  meet  its  general 
obligations  on  fundamental  rights  but  there  are  challenges  in  implementing  existing 
legislation.  The  Ombudsman’s  Office  increased  budget  has  enable  it  to  recruit  specialised 
staff,  in  order  to  better  accomplish  its  role.  It  is  essential  to  complete  the  long-drawn 
appointment  of  members  of  independent  and  regulatory  bodies,  based  on  merit.  The 
functional independence of the human rights bodies must be guaranteed at all times, including 
by allocating sufficient financial resources to enable them to carry out their mandate properly. 
The situation in prisons remains dramatic. Systemic solutions to improve detention conditions 
should  be  implemented  with  the  utmost  urgency.  Freedom  of  expression  and  pluralistic 
viewpoints continued to thrive, but challenges remain. The country needs a strategy on further 
media reforms, elaborated with the support of all relevant stakeholders. 

Functioning of the judiciary  

The  judicial  system  of  North  Macedonia  has  achieved  some  level  of  preparation  /  is 
moderately prepared. Some progress was achieved in the field of the judiciary, through the 
steady  implementation  of  the  judicial  reform  strategy,  thereby  further  addressing  the 
recommendations  made  by  the  Venice  Commission  and  the  Senior  Experts’  Group  on 
systemic rule of law issues. The preparation of a new judicial reform strategy has started, in 
an inclusive manner, building upon the lessons learnt from the previous one. Implementation 
of the updated action plan on the judicial reform strategy has continued but needs to become 
more systematic. The judiciary has demonstrated its commitment to protect its integrity and 
independence. The pace of implementation of the human resources strategies for the judiciary 
and  prosecution  needs  to  be  stepped  up.  Judicial  institutions  have  implemented  consistently 
the  new  rules  for  the  appointment,  promotion,  discipline  and  dismissal  of  judges  and 
prosecutors.  Promotions  for  higher  courts  faced  a  delay  and  scheduled  retirements  further 
decreased  the  number  of  judges  and  prosecutors.  The  Judicial  Council  and  the  Council  of 

16 

 
 
Public  Prosecutors  continued  implementing  the  strategic  plans.  Any  new  draft  law  on  the 
Academy for Judges and Prosecutors should maintain the Academy as the sole entry point to 
the  judiciary  and  prosecution  and  should  ensure  that  access  to  these  professions  is  fair  and 
transparent.  Work  was  undertaken  to  upgrade  the  software  system  aiming  at  putting  into 
practice  the  provisions  of  the  Law  on  case  flow  management  for  automatic  and  random 
distribution of cases in the courts, through the automated court case management information 
system (ACCMIS). 

In the coming year, the country should, in particular:  

  finish  implementing  the  judicial  reform  strategy  and  the  updated  action  plan,  with  a 
specific focus on adopting a new law on civil procedure, in line with European standards 
and on preparing the new strategy on judicial reform (for 2023-2027) without delay; 

  step  up  implementation  of  the  human  resources  strategies  for  the  judiciary  and  public 
prosecution network, and use them as an indicator to forecast upcoming recruitment;  

  deploy  all  the  necessary  resources  to  ensure  that  the  automated  court  case  management 
information  system  (ACCMIS) is  fully  functional  and compatible with  the new measure 
of complexity of court cases and the method for assessing judges and presidents of courts.  

Strategic documents 

Implementation of the strategy on judicial reform (2017-2022) entered its final phase and an 
assessment  report  on  implementation  of  the  strategy  was  prepared.  Its  findings  will  need  to 
feed  into  the  preparation  of  the  new  strategy  on  judicial  reform  for  the  period  2023-2027, 
which started in September 2022. The Council for Monitoring the Implementation of Judicial 
Reform  met  twice  during  the  reporting  period,  in  December  2021  and  April  2022  and 
approved  the  2021  annual  implementation  report.  Several  legislative  measures  remain 
pending in the Parliament, including a new draft law on civil procedure. The implementation 
of the Law on the Public Prosecutor’s Office continued, following its entry into force in 2020. 
There was limited progress in implementing the strategies for human resources management 
in the courts and in the Public Prosecutor’s Offices.  

Management bodies 

Parliament elected a new member of the Judicial Council in December 2021. In line with the 
method for qualitative assessments of judges and presidents of courts, the Judicial Council set 
up  commissions  to  assess  candidates  for  higher  courts  and  court  presidents.  In  September 
2022,  judges  elected  three  new  members  of  the  Council,  replacing  those  concerned  with 
scheduled  retirements.  In  September  2021,  the  administration  adopted  the  method  for 
determining the complexity of court cases by analysing the indicative number of cases to be 
heard each month by a judge. In September 2022, the Judicial Council adopted its programme 
and action plan for the prevention of corruption in the judiciary for 2022-2025. The Council 
needs to strengthen its role as guardian of the independence and impartiality of judges, and to 
improve its transparency.  

In March 2022, Parliament elected a new member of the Council of Public Prosecutors. The 
members of the Council elected its new President in September 2021. Scheduled retirements 
concerned  one  member  of  the  Council  and  there  are  two  vacancies  in  total.  The  Council 
should  provide  reasoning  for  its  decisions  and  ensure  regular  access  of  the  media  to  its 
sessions, which was not always possible due to the limited space and COVID-19 restrictions 
in  place.  The  budget  allocation  for  the  Council  increased  to  EUR  371,000  but  it  still  lacks 
sufficient staff and the IT resources needed to perform its tasks effectively. 

17 

 
 
Independence and impartiality  

Judicial  independence is  enshrined in  the constitution. The President of the Supreme Court, 
the Judicial Council, practitioners and some civil society organisations (CSOs) reacted against 
the proposed reopening of several judicial cases, included in the government programme, at 
the request of a coalition partner. Both Councils need to continue pursuing their commitment 
to full respect for the principle of independence of the judiciary and increasing transparency 
needs to continue in both Councils. It is important to ensure that the judiciary is shielded from 
any  risk  or  perception  of  undue  external  interference.  The  Declaration  on  Open  Judiciary 
signed  in  March  2022  by  12  different  judicial  institutions,  CSOs  and  professional 
associations, led by the Supreme Court, should help improve transparency and public trust in 
the judiciary.  

The software system aiming at  putting into practice the provisions of the  Law on case-flow 
management  for  automatic  and  random  distribution  of  cases,  through  the  automated  court 
case  management  information  system  (ACCMIS),  is  being  upgraded.  The  administration 
needs  reliable  statistical  data,  in  line  with  the  recommendations  and  methodology  of  the 
Council  of  Europe  European  Commission  for  the  Efficiency  of  Justice  (CEPEJ),  on  the 
performance of both the judiciary and the prosecution. 

Accountability 

The Advisory Body for Judicial Ethics of the Association of Judges met four times since June 
2021 and issued four opinions. The initial training programme at the Academy for Judges and 
Prosecutors for 2022/23 includes lectures on ethics, business culture and deontology.  

In 2021, the Judicial Council received 142 requests to determine the responsibility of a judge 
or  president  of  court  (two  more  than  in  2020).  Since  June  2020,  the  Judicial  Council  has 
dismissed six judges, and the Council of Public Prosecutors upheld the decision of the Chief 
Prosecutor  on  the  dismissal  of  one  prosecutor.  The  general  reason  provided  for  such 
dismissals  was related to  unprofessional  performance. The Judicial  Council issued a written 
reprimand to one judge and fined a president and a judge. 

In  2021,  the  State  Commission  for  the  Prevention  of  Corruption  issued  misdemeanour 
payment  orders  against  three  judges  or  court  presidents  of  courts  for  failing  to  submit  asset 
declarations or reports on the change of their property status and interests. 

Professionalism and competence  

The Judicial  Council started to  apply the new methodology for  professional  evaluation for 
the appointments and promotions with decisions on 97 candidates for judges and four for 
Presidents  of  courts.  Scheduled  retirement  of  three  members  of  the  Judicial  Council  further 
delayed  election  of  judges  for  higher  courts  whereas  vacancies  for  posts  of  Presidents  of 
Courts in smaller cities were difficult to fill.   

The  Council  of  Public  Prosecutors  appointed  five  prosecutors  in  the  Public  Prosecutor's 
Office for Prosecuting Organised Crime and Corruption (OCCPPO) and appointed two heads 
of  basic  PPOs.  A  total  of  1,639  professionals  participated  in  47  in-service  training  sessions 
organised by the Academy for Judges and Prosecutors.  

Quality of justice  

It is important that any new law on the Academy for Judges and Prosecutors maintains the 
Academy  as  the  sole  entry  point  to  the  judiciary  and  prosecution,  to  ensure  a  fair  and 
transparent  access  to  these  professions  in  line  with  the  recommendations  of  the  2018  peer 

18 

 
 
review  mission  on  judicial  training.  It  is  equally  important  that  the  Academy  heeds  the 
European Commission’s recommendations not to shorten the initial training.  

The initial training of 59 students of the seventh  intake is underway. The 97 students in the 
eighth intake, selected on 15 April 2022 started their training in May. The Academy marked 
its 15th anniversary and is actively cooperating with the European Judicial Training Network 
(EJTN)  and  the  Academy  for  European  Law  (ERA).  The  total  budget  allocated  to  training 
initiatives at the Training Centres and to other initiatives implemented directly by courts and 
prosecution  offices  in  2021  amounted  to  EUR  1,193,036,  a  38  %  increase  on  the  previous 
year. No new employees were recruited. 

The  Supreme  Court  and  the  four  Courts  of  Appeal  continued  their  efforts  to  improve  the 
consistency of judgments and to harmonise court practices. In December 2021, the Supreme 
Court adopted its new Rules of Procedure. In 2021 it has adopted 35 principle legal opinions, 
stances and conclusions, all published on its website.  

At the end of 2021, there were 473 judges, (26 per 100,000 inhabitants) 61% female judges 
and  170  prosecutors  (nine  per  100,000  inhabitants),  55%  female  prosecutors,  less  than  in 
2020.  According  to  the  European  Commission  for  the  Efficiency  of  Justice  (CEPEJ),  the 
European  averages  are  21  judges  and  12  prosecutors  per  100,000  inhabitants.  The  2021 
budgetary allocation for the judicial system was about EUR 40 million. The retirements from 
June  2022  decreased  further  the  number  of  judges  by  48  and  of  prosecutors  by  11.  It  is 
essential  to  speed  up  implementation  of  the  human  resources  strategies  for  the  courts  and 
public prosecutors' offices and to plan ahead for staffing needs. The Council for Digitalisation 
in the Judiciary intensified the work to implement the IT strategy. Five pilot courts received 
IT equipment provided by foreign donors. The recruitment of additional IT staff depends on 
offering working conditions that are competitive with those in the private sector.  

In December 2021, Parliament adopted a new law on mediation, which promotes the quality 
of mediation and unifies the application of the law by all licensed mediators. Work is needed 
to  continuously  promote  mediation  and  the  use  of  other  alternative  dispute  resolution 
methods, including through the relevant chambers, the Academy for Judges and Prosecutors 
and the Association of Judges.  

Efficiency 

Most of the courts continued the positive trend of maintaining a  clearance rate of 100% or 
higher, with the exception of administrative cases with 86.56% in first instance and 111.01% 
in appeal for the same cases. The number of unfinished cases under the old procedural laws 
continued to fall. No efforts were made to address the Venice Commission recommendations 
to  re-examine  the  provisions  of  the  Law  on  the  use  of  languages  related  to  bilingualism  in 
judicial proceedings. There is a need for a comprehensive and prompt solution to the issue of 
salaries  in  the  judiciary,  considered  inadequate.  The  claims  of  the  judicial  administration, 
including  for  career  advancement,  remained  pending.  No  steps  were  taken  to  tackle  the 
overall cost and duration of the enforcement process.  

Fight against corruption  

The  country  has  achieved  some  level  of  preparation  /  is  moderately  prepared  in  the 
prevention  and  fight  against  corruption.  Some  progress  has  been  made  as  the  country 
continued  to  consolidate  its  track  record  on  investigating,  prosecuting  and  trying  several 
corruption  cases,  including  at  a  high  level.  The  cases  initiated  by  the  former  Special 
Prosecutor’s  Office  (SPO)  continued  to  move  forward,  establishing  accountability  for  the 
illegal  wiretaps.  A  number  of  cases  were  subject  to  first-instance  rulings.  In  line  with  last 
years’ recommendations, the State Commission for the Prevention of Corruption (SCPC) has 

19 

 
 
been  proactive  in  providing  policy  guidance  to  public  institutions  on  preventing  corruption 
and  it  opened  several  cases,  including  against  high-level  officials.  Efforts  to  improve  the 
functioning  of  the  SCPC  should  continue,  and  a  further  allocation  of  financial  and  human 
resources  is  needed.  Additional  human  resources  and  financial  means  should  also  be  made 
available to the Public Prosecution Office, investigative centres and law enforcements units in 
charge of investigating corruption. The sectors most vulnerable to corruption require targeted 
risk assessments and dedicated actions. 

In the coming year, the country should, in particular:  

  continue  action  to  fight  corruption  by  increasing  support  to  the  bodies  responsible  for 
implementing  the  national  strategy  for  the  prevention  of  corruption  and  conflict  of 
interests and effectively enforce GRECO’s recommendations; 

  allocate  sufficient  resources  to  the  Office  of  the  Basic  Public  Prosecutor  for  Organised 
Crime  and  Corruption,  including  financial  experts,  in  order  to  ensure  effective 
accountability for high-level corruption cases; 

  continue  to  increase  the  number  of  final  convictions  in  high-level  corruption  cases, 
including  the  confiscation  of  criminal  assets,  value-based  confiscation,  extended 
confiscation and third-party confiscation. 

Track record 

North  Macedonia  has  continued  to  make  progress  in  investigating,  prosecuting  and  trying 
corruption cases, including for high-level corruption cases. The cases of the former Special 
Prosecutor’s Office (SPO) continued to be tried mostly by the Public Prosecution Office for 
Organised  Crime  and  Corruption.  So  far,  there  have  been  final  convictions  in  seven  cases 
against  17  defendants.  Trials  are  ongoing  for  most  of  the  remaining  cases.  First-instance 
verdicts have been issued in 11 cases. 

The  courts  issued  first-instance  convictions  including  against  prominent  former  government 
officials  such  as  the  former  Prime  Minister,  the  former  Minister  of  Transport,  the  former 
Minister of Interior and the former Director of the Bureau of Security and Counterintelligence 
(UBK). Three of those found guilty remain at large. 

In  the  case  brought  by  the  former  SPO,  called  ‘Titanic  1’,  eight  out  of  the  21  defendants 
pleaded  guilty  to  parts  of  the  charge.  In  February  2022,  four  defendants  were  sentenced  in 
first instance to prison: the former Minister for Transport and Communications to four years 
and six months, the former Minister of Interior to two years and six months, one defendant to 
one  year  and  another  to  three  years.  The  remaining  four,  including  the  former  Head  of 
Cabinet,  the  former  Deputy  Minister  of  Justice,  and  the  former  Secretary  General  of  the 
government, were sentenced to probation.  

In another former SPO case named ‘Toplik’, the Basic Criminal Court of Skopje found the six 
defendants guilty of abuse of official position and authority in relation to the selling of land 
for  the  construction  of  a  residential  complex.  In  April  2022,  the  Court  sentenced  on  a  first 
instance verdict a former Minister of Transport and Communications to three and a half years 
in  prison,  one  member  of  the  Ministry’s  public  procurement  commission  was  sentenced  to 
three years in prison. The four other members of the commission were sentenced to two years 
in prison, and suspended for five years. 

In another case of the former SPO, called ‘Tariff’, the Skopje Court of Appeal  annulled, in 
November  2021,  the  first-instance  verdict  from  December  2019  and  ordered  a  retrial.  The 
former  director  of  the  state-owned  electricity  company,  AD  ELEM,  was  accused  of  having 

20 

 
 
made unlawful payments to the consortium that had won the tender for providing a software 
system.  

In  April  2022,  the  Court  ruled  at  first  instance  on  the  ‘Vodno  Construction  Land’  case  and 
found five defendants out of six guilty. A former Prime Minister was sentenced in absentia to 
a  concurrent  prison  sentence  of  seven  years  and  a  fine  for  money  laundering  and  unlawful 
acquisition  of  property.  The 
the  Bureau  of  Security  and 
former  Director  of 
Counterintelligence  (UBK)  was  sentenced  to  one  year  and  three  months  in  prison,  two 
defendants to two years in prison, suspended for five years, and a businessman to one year in 
prison.  The  charges  against  the  sixth  defendant  were  dropped.  The  court  also  ordered  the 
confiscation of all real estate property that had been temporarily seized. 

In  July  2021,  the  Basic  Public  Prosecutor’s  Office  for  Organised  Crime  and  Corruption 
charged  four  people  in  relation  to  the  tender  for  Skopje’s  double-decker  buses.  A  former 
Minister  of  Transport  and  Communications  and  a  former  director  of  the  Public  Transport 
Enterprise  of  Skopje  (JSP),  who  is  currently  Member  of  Parliament,  are  accused  of  having 
used their official  position to  obtain gains  for the economic operator from  China to  procure 
202  buses,  causing  damage  to  the  state  budget  of  approximatively  EUR  4.77  million.  In 
March 2022, a former Minister of Transport and two other defendants pleaded guilty and were 
sentenced to two years’ probation. The trial is ongoing for the former director of JSP. 

In June 2022, the Supreme Court rejected the requests from the former Special Prosecutor for 
an  extraordinary  review  of  the  ‘Racket  case’,  thereby  upholding  the  verdicts  in  which  the 
former Special Prosecutor was sentenced to seven years’ imprisonment. 

In June 2022, in the former SPO ‘Talir 2’ case, the Court convicted in first instance a former 
Prime Minister to six years’ imprisonment and a former Secretary General of the government 
to two years’ suspended sentence for abuse of their official position enabling a legal entity to 
build the headquarters of a political party, at a time when the company had concluded public 
procurement  contracts  with  state  bodies  and  public  institutions  or  companies.  This  was  in 
breach of the  Law on political  parties, the  Law  on the financing of political  parties  and the 
Law  on  obligations.  The  ruling  also  ordered  the  confiscation  of  the  party  headquarters  and 
other premises across the country, owned by the political party.  

In  February 2022, the Supreme Court quashed on procedural  grounds  the decision taken by 
the Court of Appeals in Skopje against the former President of the Skopje Criminal Court for 
manipulation  of  ACCMIS.  In  May  2022,  the  Court  of  Appeals  in  Skopje,  in  a  repeated 
procedure,  decided  to  uphold  his  conviction  of  two  and  half  years’  imprisonment.  In  July 
2022, the Supreme Court rejected the request for extraordinary review of the final decision. 

In 2021, the Public Prosecutor for Prosecuting Organised Crime and Corruption opened 
investigations  into  seven  cases  of  alleged  corruption  against  25  suspects  (14  high-profile 
investigations  involving  49  individuals  in  2020).  Investigations  are  ongoing  against  21 
individuals regarding alleged abuse of official position and against nine individuals on alleged 
money laundering. Charges were filed in eight cases against 38 individuals. Trials are ongoing 
in 54 cases against 244 individuals. 48 individuals were convicted in first-instance judgments 
(50 individuals in 2020). 14 individuals were convicted in second-instance judgments.  

In  2021,  the  financial  police  office  investigated  27  cases,  which  led  to  criminal  charges 
related  to  corruption.  In  three  cases,  high-value  movable  and  immovable  assets  were 
temporarily  frozen.  In  four  cases,  valuable  assets  for  a  total  value  of  approximately  EUR 
256,000 were confiscated after the first-instance judgments. 

The State Commission for the Prevention of Corruption (SCPC) continued to fulfil its role 
proactively and opened several new cases. In 2021, the SCPC processed a total of 106 cases 

21 

 
 
of  alleged  conflict  of interest,  of  which  17  were  initiated  by  the  SCPC itself  and  89  at  the 
request of other parties. In 2021, 152 cases were closed (149 in 2020), of which 12 dated from 
2019 and six from 2020. In 2021, a conflict of interest was established in two cases for which 
the initiatives submitted to the competent authority were to determine responsibility, resulting 
in  one  disciplinary  procedure.  In  one  case,  the  SCPC  submitted  an  initiative  for  criminal 
proceedings  against  two  responsible  officials,  and  issued  a  public  reprimand  for  failure  to 
remedy a conflict of interest. The SCPC has issued opinions on all 85 requests received. The 
SCPC found grounds for suspected breaches of the Law on the prevention of corruption and 
conflict of interest, resulting in 32 misdemeanour payment orders.  

The SCPC also  submitted four  requests to the SCPC Misdemeanour Commission  to  initiate 
misdemeanour  proceedings  against  officials,  due  to  lack  of  payment  after  payment  orders 
were issues. In 2021, the SCPC received 1411 declarations of conflict of interest to verify. In 
2021, 7 758 asset declarations were accessible on the SCPC website (7 362 in 2020). 2,006 
assets  declarations  were  submitted  to  the  SCPC.  As  regards  irregularities  in  asset 
declarations, in 2021, the SCPC issues 86 misdemeanour payment orders, all of which were 
related to  non-submission/late submission,  except  one which was  related  to  failure to  report 
an  increase  in  property.  29  requests  to  initiate  misdemeanour  procedures  were  submitted  to 
the SCPC for unpaid fines.  

In 2021, a total of 599 cases of corruption were initiated, 16 at the initiative of the SCPC and 
583  based  on  reports  submitted  by  third  parties.  404  cases  were  addressed.  Of  the  cases 
submitted  on  the  basis  of  reports,  the  SCPC  found  grounds  for  suspected  breaches  of  the 
Criminal Code in seven cases and submitted initiatives to the public prosecutor (two cases in 
2020).  The  SCPC  launched  initiatives  before  the  competent  authorities  to  ascertain  the 
responsibility of officials in five cases. 

To  address  the  recommendations  made  by  the  Council  of  Europe  Group  of  States  against 
Corruption  (GRECO)  in  the  Fifth  Evaluation  Round  report,  North  Macedonia  adopted 
amendments to the law on internal affairs and to the law on police in April 2022. The changes 
to  the  legislative  framework  include  the  obligation  to  submit  asset  declarations,  the  ban  on 
employees being members of a political party or a body of a political party, a new integrity 
test, and of objective and professional criteria for the appointment of the director of the public 
security bureau (head of the police).  

Institutional framework 

In  January  2022,  the  incoming  government  created  a  new  post  of  Deputy  Prime  Minister 
responsible  for  good  governance  policies.  Implementation  of  the  anti-corruption  action  plan 
titled ‘Action 21’ is ongoing, as planned. 

Preventive measures 

The State Commission for the Prevention of Corruption continued to fulfil its role proactively 
and boosted its capacity to verify statements of interest and assets.  However, the authorities 
should make more efforts to fully address the conclusions of the SCPC reports. The Law on 
Prevention  of  Corruption  and  Conflict  of  Interest  needs  to  be  fully  implemented  and  the 
SCPC needs to be strengthened, supported, and adequately resourced. By the end of 2021, the 
SCPC had a total  of 34 employees out  of the 64 planned. New  IT software solutions  are in 
place  to  increase  information  sharing  with  all  public  institutions  for  the  prevention  of 
corruption and to increase integrity in the public sector, provide protection to whistle-blowers 
and monitor implementation of the national strategy for the prevention of corruption. 

Efforts  continue  to  improve  the  transparency  and  integrity  of  public  institutions.  The SCPC 
adopted an integrity policy with guidelines for state bodies and public sector institutions, and 

22 

 
 
guidelines for the local self-government. As of June 2022, 66 municipalities, 15 state bodies 
and public sector institutions, including the Ministry of Interior, have also adopted an integrity 
policy.  Public  campaigns  were  held  to  raise  awareness  on  integrity,  on  whistle-blower 
protection, and more generally on the fight against corruption.  

In  June  2021,  the  Customs  Administration  adopted  a  new  code  of  conduct  for  customs 
officers.  In  September  2021,  the  Ministry  of  Interior  adopted  its  regular  internal  anti-
corruption programme with an action plan and provided training on related topics, including 
on the protection of whistle-blowers and ethics for staff members. 

Law enforcement 

The  main  institutions  dealing  with  law  enforcement  are  the  Public  Prosecutor's  Office  for 
Prosecuting  Organised  Crime  and  Corruption  (OCCPPO)  within  the  Public  Prosecutor's 
Office and the Department for Serious and Organised Crime within the Ministry of Interior. 
The  OCCPPO  inherited  most  of  the  former  Special  Prosecutor’s  Office  (SPO)  high-profile 
cases. The OCCPPO has not yet moved to the allocated new premises. Together with the State 
Audit Office, the investigative centre/judicial police in the prosecutor’s office and the police 
need  sufficient  resources  allocated  in  order  to  pursue  high-profile  cases  properly.  In  March 
2022, five public prosecutors were elected in the OCCPPO. Staffing levels are insufficient to 
fully tackle cases of corruption and organised crime.  

The Chief Public Prosecutor suspended the Head of the OCCPPO from office in August 2022 
pending  a  disciplinary  procedure  initiated  following  a  criminal  complaint  by  the  former 
Acting Director of the Financial Police. The Council of Public Prosecutors (CPP) rejected the 
appeal  of  the  Head  of  the  OCCPPO,  as  being  groundless,  thus  confirming  her  suspension 
from office. 

In  2021,  assets  were  confiscated  in  four  cases  for  a  value  of  approximately  EUR  256,000. 
Real estate, movable and immovable property, and shares were frozen in temporary measures 
in three cases of alleged corruption. 

Legal framework 

The  country  is  party  to  all  international  anti-corruption  conventions,  including  the  United 
Nations Convention against Corruption. 

The Law on the financing of political parties stipulates how financial means can be provided 
to  political  parties  and  managed  correctly.  The  Electoral  Code  sets  out  the  rules  on  the 
financing  of  electoral  campaigns.  The  State  Audit  Office  (SAO)  carries  out  ex-post  checks 
and publishes annual  reports on its website. Seven audit reports were submitted to the State 
Election  Commission  (SEC)  and  the  State  Commission  for  the  Prevention  of  Corruption 
(SCPC) following the 2021 local elections.  

The Law on free access to public information allows applicants to obtain information on the 
public financing of political parties. 

Following  the  June  2021  adoption  of  the  new  Law  on  lobbying,  the  SCPC  adopted 
implementing  legislation  and  internal  acts  to  prepare  for  the  law  to  enter  into  force  in  June 
2022.  The  law  extends  the  competences  of  the  SCPC  adding  the  responsibility  to  keep  a 
register of lobbyists and lobbying organisations, which became operational in June 2022. The 
Law on the protection of whistle-blowers still needs to be further aligned with the EU acquis 
including  to  provide  for  civil,  criminal  and/or  administrative  liability  of  an  official  who 
recommended or participated in retaliation, and to reverse the burden of proof.    

Strategic framework 

23 

 
 
Implementation  of  the  national  strategy  for  the  prevention  of  corruption  and  conflict  of 
interest  (2021-2025)  and  the  related  action  plan  has  been  slow.  Only  20%  of  the  activities 
planned  for  2021  were  implemented  in  full  by  the  end  of  year.  In  order  to  be  effective, 
implementation  of  the  National  Strategy  should  be  carried  out  at  all  levels  of  the 
administration, not only at the level of the line ministries. 

Fundamental rights  

The legal framework on the protection of fundamental rights is largely in line with European 
standards.  The  deinstitutionalisation  process  is  progressing  with  the  resettlement  of  persons 
with  disabilities  to  community-based  care.  The  Ministry  of  Labour  and  Social  Policy 
continues  to  invest  in  community  services,  including  supporting  victims  of  gender-based 
violence.  It  is  of  particular  importance  to  implement  all  the  provisions  of  the  Law  on 
prevention  and  protection  from  violence  against  women  and  domestic  violence.  Continued 
improvements  can  be  noted  in  gender  mainstreaming  and  respect  for  women’s  rights.  The 
recommendations  made  by  the  European  Committee  for  the  Prevention  of  Torture  on  the 
treatment of detained and convicted persons were not adequately addressed.  Implementation 
of the legislation on hate speech and of the national action plan for the Istanbul Convention’s 
provisions needs to be improved. The civilian external oversight mechanism over the police is 
still not fully functional, lacking representatives from civil society organisations.  

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

  allocate  the  necessary  financial  and  human  resources  enabling  the  Commission  for 
Prevention and Protection against Discrimination to become fully functional and increase 
the cooperation with the Ombudsman Office; 

  the  recommendations  of  international  monitoring  bodies,  especially  with  regard  to  the 
rights  of  persons  in  detention/prison  and  the  dramatic  conditions  in  prisons  should  be 
implemented  with  utmost  urgency  and  efforts  should  be  stepped  up  to  promote 
alternatives to incarceration;  

  provide  adequate  support  and  community  services  to  vulnerable  categories  of  children, 
especially children victims of violence, Roma children and children with disabilities. 

North Macedonia has ratified most international human rights instruments. In June 2021, 
the  Parliament  ratified  the  Council  of  Europe  Protocol  amending  Convention  108  for  the 
Protection of Individuals with regard to Automatic Processing of Personal Data. In November 
2021,  the  country  became  the  35th  Member  State  party  of  the  International  Holocaust 
Remembrance Alliance. The country submitted periodic reports under the UN Convention on 
the Elimination of All Forms of Racial Discrimination, as well as the answers to the questions 
from periodic reports under the Convention on the Rights of Child. 

In June 2022, there were 813 applications pending before the  European Court for Human 
Rights (ECtHR). The ECtHR delivered 11 judgements  and found breaches of the European 
Convention on Human Rights in three cases (against 14 in 2021), relating to the right to a fair 
trial,  the prohibition  of torture and the  freedom  of expression.  In the  reporting  period, there 
were 370 new applications allocated to a decision body. Currently, there are 11 cases under 
enhanced supervision by the Committee of Ministers. 

The Ombudsman’s Office remains the central body for the  promotion and enforcement of 
the 
human  rights.  In  2021, 
implementation  of  the  principle  of  equitable  representation  and  on  gender  representation  in 
the  public  sector.  Five  deputy  ombudspersons  need  to  be  appointed  by  Parliament,  without 

issued  special  reports  on 

the  Ombudsman’s  Office 

24 

 
 
further  delay.  Cooperation  with  the  CSOs  needs  to  improve.  The  Office’s  budget  was  8% 
higher than it was in  2020, and a new systematisation of staff was  approved in  April 2022. 
Out  of  2,686  complaints  received,  breaches  were  confirmed  in  35.8%  of  cases  (2,448 
complained  received  in  2020).  These  predominantly  concerned  the  rights  of  the  child 
(18.4%);  judiciary  and  other  legal  professions  (10.9%);  social  protection  (8.8%);  consumer 
rights  (8.3%);  finances  (6.2%)  and  labour  rights  (5.4%).  Following  the  involvement  of  the 
Ombudsman’s office, all six complaints related to the conduct of the population census were 
addressed. There was a  slight  increase in  the responsiveness  of the administrative and other 
bodies  with  public  competences  (66.2%  of  the  cases,  against  63%  in  2020),  which  is  still 
lower than the 80% achieved in previous years. 

North  Macedonia  still  needs  to  implement  the  recommendations  made  by  the  European 
Committee for the Prevention of Torture (CPT) published in 2021. The July 2021 CPT report 
reiterated  past  findings  on  the  prevention  of  torture  and  ill  treatment.  The  main 
shortcomings  of  the  prison  system  remain:  the  poor  prison  management  system  and  staff 
performance, low staffing levels,  poor quality healthcare provided to  inmates, inter-prisoner 
violence, squalid material conditions, a lack of purposeful activities and endemic corruption. 

The external oversight mechanism for the police, including the prison police, is still not fully 
functional, with the three civil society organisations’ representatives still to be selected by the 
Parliament.  Past  issues  affecting  the  effective  participation  of  civil  society  representatives 
must  be  resolved,  including  the  extension  of  their  one-year  mandate.  In  2021,  the 
Ombudsman’s civil control mechanism acted on eight complaints, two against police officers 
and six against members of the prison police, a decrease since the previous year when it took 
action on 21 complains. It submitted one request to the Public Prosecutor’s Office to initiate a 
procedure  for  determining  criminal  responsibility,  against  ten  similar  requests  sent  in  2020. 
This led to one case being brought before the Basic Criminal Court Skopje for harassment in 
the act of duty by a police officer.  

In  2021,  the  dedicated  section  in  the  Public  Prosecutors’  Office  opened  91  new  cases 
(criminal  charges)  against  213  persons  with  police  powers  or  members  of  the  prison  police 
suspected of having committed criminal offences. As a result of the investigations, 33 persons 
were charged, 20 criminal order proposals were submitted, and first-instance verdicts against 
50  persons  (six  imprisonment  sentences,  36  conditional  sentences,  four  fines  and  four 
acquittals)  were  issued  in  2021.  There  needs  to  be  greater  awareness-raising  of  the  external 
oversight mechanism over the police to achieve a good understanding of the system. 

All reported cases must be investigated without delay and the safeguards against ill treatment 
by police must be implemented systematically. In 2021, the Department for Internal Control 
and  Professional  Standards  at  the  Ministry  of  Interior  handled  63  complaints  on  the  use  of 
excessive physical force by police officers (65 complaints in 2020), of which 19 were found 
to be ungrounded and 40 lacked evidence. Three criminal charges were filed for ill treatment 
in  the  act  of  duty  and  one  notification  was  submitted  to  the  Public  Prosecution  Office.  In 
2021, 112 reports on the use of means of coercion against sentenced persons were submitted 
by the prisons to the Directorate for Executions of Sanctions, of which 27 cases concerned the 
use of physical force, leading to inspections. In one reported case, the use of physical force in 
Idrizovo prison was established, but the prison did not submit a report to the Directorate for 
Executions  of  Sanctions.  Cooperation  with  civil  society  organisations  in  stamping  out  ill 
treatment continued during the reporting period.  

North  Macedonia  should  urgently  tackle  the  persistent  issue  of  inadequate  detention 
conditions  in  prisons,  police  stations,  social  care  and  psychiatric  facilities,  in  line  with  the 
recommendations in the last CPT report. In 2021, the National Preventive Mechanism made 

25 

 
 
33 visits to police stations, prisons and educational correctional institutions as well as places 
where  foreigners  and  asylum  seekers  are  accommodated  or  detained.  Issues  raised  in  the 
previous  years remain pending, especially the lack of information  and access  to  a lawyer in 
police stations and the lack of adequate healthcare in prisons. 

Although infrastructure was renovated and medical equipment was delivered to a number of 
penitentiary  facilities,  the  conditions  of  detention  in  parts  of  the  Idrizovo  Penitentiary-
Correctional  Facility  and  other  detention  facilities  of  the  prison  system  remain  inhumane. 
Reported  overcrowding  raises  additional  concerns  for  the  2,462  persons  sentenced  and 
detained  (data  of  March  2022).  Renovating  the  most  derelict  building  in  line  with  the  CPT 
recommendations should be a priority. To professionalise prison management it is important 
that  the  appointment  of  prison  directors,  including  interim  directors,  is  made  solely  on  the 
basis  of  the  2019  Law  on  the  execution  of  sanctions.  Regular  inspections  of  prisons  should 
continue. Corruption in prisons is also a recurrent issue. In February 2022, an annual plan to 
combat  corruption  was  adopted  and  needs  to  be  implemented.  Following  adoption  of  the 
programme  for  initial  and  continuous  training  and  specialisation  of  officials,  the  prison 
training  centre  in  Idrizovo  is  finally  operational  and  an  initial  training  session  for  new 
employees  has  been  organised.  The  lack  of  adequate  healthcare  or  measures  to  treat  drug 
addiction in prisons remains an issue of serious concern, to be addressed by the Ministry of 
Health. 

In order to be fully implemented, the strategy for the development of the penitentiary system 
2021-2025  requires  funds,  additional  staff  and  political  commitment.  An  inter-ministerial 
group was set up to monitor and evaluate the implementation of the strategy. The process of 
releasing  convicts  back  into  the  community  should  be  prepared  through  inter-institutional 
cooperation between prisons and the post-penal assistance.  

The  probation  system  continues  to  develop  and  the  number  of  cases  is  increasing.  In  2021, 
451  probation  cases  (276  in  2020)  were  recorded,  most  of  which  were  community  service, 
suspended  sentences  with  protected  supervision  and  supervision  for  conditional  release. 
Cooperation  between  the  public  and  private  sector  and  civil  society,  and  interagency 
cooperation should continue. Coordination has improved between probation officers, judges, 
public  prosecutors,  prison  staff  and  other  institutions  before  a  convict  is  released  and  this 
should  continue,  as  should  awareness  raising  on  the  benefits  of  probation.  No  progress  has 
been  made  in  adopting  amendments  to  the  legal  framework  regarding  alternative  sentences 
and alternative procedures to increase their use. These measures are necessary to improve the 
resocialisation and rehabilitation of convicts and to lower the risk of re-offending, including 
for juveniles. No meaningful progress has been made to address the overall lack of purposeful 
educational,  recreational  and  vocational  activities  for  sentenced  and  remand  prisoners. 
Educational  and  resocialisation  services,  and  treatment  programmes,  should  be  run  in  all 
penitentiary facilities and educational correctional facilities. 

Regarding the protection of personal data, the full application of the Law on Personal Data 
Protection  (LPDP)  started  in  August  2021.  The  new  law  aims  to  align  its  data  protection 
framework  with  the  General  Data  Protection  Regulation.  Additional  amendments  are  under 
preparation with a view of further alignment. 

Continued  understaffing  in  the  Personal  Data  Protection  Agency  (PDPA)  has  a  serious 
negative impact  on implementation of the law.  It  is  also undermining the PDPA’s ability to 
perform its tasks effectively and independently. 

Despite  this  situation,  in  2021,  the  PDPA  carried  out  304  supervisions  (a  29%  increase  on 
2020). 62 supervisions were in the public sector and the remaining in the private sector. The 
PDPA  also  received  540  complaints,  of  which  45%  were  related  to  alleged  breaches  of 

26 

 
 
personal  data  protection  rights  on  social  networks.  The  PDPA  issued  17  opinions  on  draft 
laws  and  implementing  legislation  and  one  order  in  the  field  of  personal  data  protection.  It 
initiated amendments to three laws in order to harmonise them with the LPDP. The PDPA is 
not systematically consulted on sectoral laws or implementing legislation and its advice is not 
always taken on board.  

Several  improvements  are  needed  in  the  field  of  data  protection  in  the  electoral  sector.  The 
Electoral Code brought in the use of biometric data, but the procedure did not include prior 
consultation with the PDPA. However, the State Election Commission addressed some of the 
supervision irregularities identified by the PDPA.  

In the reporting period, the PDPA carried out another supervisory check in the Operational-
Technical  Agency  (OTA)  into  the  interception  of  communications.  Progress  was  made  in 
terms of compliance with regulations on personal data protection. The OTA took action on 6 
out of 12 obligations and took partial action on other obligations.  

Freedom  of  thought,  conscience  and  religion  is  guaranteed  by  law  and  in  practice,  and 
discrimination  on  grounds  of  religion  is  prohibited.  The  Commission  for  Relations  with 
Religious Communities and Groups is encouraged to organise inter-religious dialogue and to 
improve cooperation between the religious communities. 

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

Freedom of expression  

North  Macedonia  has  achieved  some  level  of  preparation/  is  moderately  prepared  in  the 
area of freedom of expression. Overall, it made limited progress during the reporting period 
to address the previous recommendations. The general context is favourable to media freedom 
and  allows  for  critical  media  reporting  although  there  were  some  tensions  during  the  2021 
local  elections.  Action  on  self-regulation  of  the  media  should  resume  and  produce  practical 
results in advancing professional standards of journalism.  

Greater transparency is needed regarding media advertising by state institutions and political 
parties. The authorities need to step up their efforts to reform the public service broadcaster, 
ensuring  its  independence,  professional  standards  and  financial  sustainability.  The  reform 
process  of  the  public  service  broadcaster,  in  line  with  its  five-year  development  strategy,  is 
constrained by delays in appointing members of its programming council. The council of the 
Agency  for  Audio  and  Audiovisual  Media  Services  still  needs  to  be  appointed.  The  labour 
rights of journalists still need to be addressed. 

Last year’s recommendations remain valid. In the coming year, the country should:  

  revise  the  legal  framework  governing  the  media  in  accordance  with  the  EU  acquis  and 
European  standards,  in  particular  by  continuing  work  to  align  national  laws  with  the 
revised European Directive on Audiovisual Media Services; 

  step  up  action  to  implement  the  strategy  to  reform  the  public  broadcaster  and  finalise 
appointments  for  the  public  service  broadcaster's  programme  council  and  the  media 
regulator's council; 

  promptly  address  all  instances  of  threats  and  acts  of  violence  against  journalists  and 

ensure that the perpetrators are brought to justice. 

Freedom of expression and pluralistic viewpoints continued to thrive in a generally favourable 
overall  political  context.  Despite  this,  the  media  reforms  expected  stalled  due  to  a  lack  of 
political consensus and a shift in focus due to the COVID-19 pandemic. Challenges remain in 
implementing the legal  framework encompassing the work of media, especially on the  Law 

27 

 
 
on audio and audiovisual media services. Although instances of physical and verbal violence 
decreased, online threats against journalists and  media workers are increasing. The working 
conditions  for  media  workers  remain  challenging,  especially  their  labour  and  social  rights. 
The  authorities  and  the  media  regulator  supported  media  outlets  during  the  COVID-19 
pandemic.  The  country  now  needs  to  draw  up  a  strategy  on  reform  of  the  media,  with  the 
support of all stakeholders. 

Intimidation of journalists  

In 2021, the Ministry of Interior recorded eight cases of attacks against journalists (ten cases 
in  2020).  Criminal  charges  were  brought  in  three  cases  (for  a  crime  committed  during  a 
protest, a breach of copyright  and related rights  and an online threat).  Investigations for the 
remaining five attacks are ongoing. The association of journalists recorded five attacks, three 
of them against female journalists. During the 2021 local  elections, the number of incidents 
involving  journalists  increased,  which  was  condemned  by  the  Agency  for  Audio  and 
Audiovisual Media Services and the association of journalists.  

The existing legal framework and commitment to international standards provided sufficient 
mechanisms  for  law  enforcement  authorities  and  the  Public  Prosecutor’s  Office  to  bring 
perpetrators  to  justice.  Further  action  is  needed  to  ensure  impartial,  speedy  and  effective 
investigations.  A  TV  station  complained  of  prolonged  financial  investigations  and  its 
journalists being invited  for information  talks by  the prosecution office. Politicians from  all 
levels of governance and public officials should constantly set an example of high standards 
for the respect of freedom of media in their interactions with journalists. Online harassment 
and  verbal  attacks  on  journalists,  notably  on  social  media,  have  continued.  Old  cases  of 
physical attacks against journalists remain unresolved. 

Legislative environment  

In 2021, the authorities and the media regulator  continued supporting the media to  alleviate 
the impact of the COVID-19 pandemic.  

The process  of alignment  of the  Law on audio and audiovisual  media services with  the EU 
acquis  needs  to  continue.  In  September  2021,  Parliament  adopted  amendments  to  the 
Electoral  Code  related  to  the  media  and  to  paid  political  advertising.  The  OSCE/ODIHR 
report on the local elections recommended that regulations on paid political advertisement in 
the media should be reconsidered, in order to allow unimpeded access to the media based on 
reasonable and objective criteria.  

The  practice  of  providing  paid  political  advertising  in  broadcast,  print  and  online  media 
funded from the state budget continues to be a concern among media associations, due to the 
risk of political influence on media independence. Affected by a declining media market and 
the  pandemic,  some  media  outlets  have  lobbied  actively  to  remove  the  ban  on  government 
advertising  in  the  private  media,  in  order  to  increase  their  revenues.  However,  media 
associations have criticised the prospect of amending the Law on audio and audiovisual media 
services, which would allow advertising of public institutions in the media, highlighting the 
risk that it could undermine the independence of the media and disrupt the media market.  

In  March  2022,  in  the  context  of  disinformation  concerning  the  war  in  Ukraine,  the 
government  banned  the  retransmission  of  Russian  TV  channels  by  amending  the  Law  on 
restrictive measures based on the Council Regulation. The government continued cut funding 
for the regulator, the public broadcaster and the public enterprise for broadcasting, using the 
provisions of the Law on audio and audiovisual media services. Parliament also delayed the 
appointments of the new members of the public service broadcaster's programme council and 
media regulator's council, thereby demonstrating the absence of political consensus on media 

28 

 
 
reforms. Hate speech is prohibited both online and offline, but it persists online. In December 
2021,  an  online  threat  to  journalists  published  on  social  media  was  sanctioned  by  a  court 
judgment. 

Implementation of legislation/institutions  

During  the  2021  local  elections,  the  Agency  for  Audio  and  Audiovisual  Media  Services 
monitored the media coverage and reported no breaches of the Electoral Code. As part of its 
legal  obligations,  the  regulator  continued  its  supervisory  role  over  the  broadcasters,  print 
media,  operators  of  public  electronic  communication  networks  and  providers  of  on-demand 
media  services,  as  well  as  on  illicit  media  concentration  and  ownership  transparency.  The 
regulator  continued  working  with  civil  society  organisations  and  media  outlets  to  promote 
media literacy and human rights topics such as gender equality and the inclusion of persons 
with disabilities.  

The  financial  stability  and  independence  of  the  media  regulator  needs  to  be  consolidated 
following the harmonisation of national legislation with the EU Audiovisual Media Services 
Directive.  In  2021,  the  Council  of  Media  Ethics  received  109  complaints  for  breaches  of 
ethical  standards,  90%  of  which  concerned  online  cases.  The  self-regulatory  body  noted 
breaches  of  the  Code  of  Journalists  in  48  cases.  The  Council  of  Media  Ethics  reported 
increased  pressure  over  its  work  from  political  and  economic  actors,  but  also  from  media 
representatives.  In 2021, the association of journalists reported a decrease in court cases for 
insult  and  defamation  involving  journalists,  from  30  cases  in  2020  to  around  20  ongoing 
cases.  In  2021,  a  total  of  81  court  rulings  were  issued  in  connection  with  Article  10  of  the 
European  Convention  for  Human  Rights,  against  57  in  2020  and  99  court  rulings  in  2019 
respectively.  

Public service broadcaster  

The comprehensive reform of the public service broadcaster was further delayed. Despite the 
requirements  of the  Law on audio  and audiovisual  media services specifying the amount of 
public funding for the public broadcaster as a percentage of the state budget to be 1% as of 
2021, the actual rate only reached 0.59% in July 2022 because of the authorities’ use of  the 
discretionary  powers  granted  by  law.  This  was  insufficient.  The  total  budget  of  the  Public 
Service  Broadcaster  in  2021  amounted  to  13.4  million  EUR,  while  in  2022  it  is  15  million 
EUR.  The  financing  of  the  public  broadcaster  has  seen  a  steady  decline  over  the  last  few 
years. The continuous decrease in funding is hindering implementation of the public service 
broadcaster development strategy, creating uncertainty in planning processes and affecting the 
overall  quality  of  performance.  Solutions  for  the  public  service  broadcaster’s  old  debts 
towards state institutions were not found, including on the implementation of favourable court 
rulings  with  regard  to  the  public  service  broadcaster’s  premises.  The  independence  and 
sustainability of the public broadcaster, both financially and as regards the legal framework, 
has yet to be fully ensured. 

Economic factors  

The  COVID-19  outbreak  exacerbated  the  ongoing  trend  in  lower  income  for  the  media 
industry,  leading  the  government  to  adopt  measures  to  help  the  industry.  Concerns  about 
media  integrity  and  independence  continue  to  be  raised  by  media  associations  due  to  the 
precarious  financial  viability  of  media  entities.  Additional  steps  are  needed  to  support 
professional and investigative journalism. The Media Agency monitors media ownership on a 
regular  basis.  Efforts  must  be  made  to  safeguard  the  media's  independence  from  political 
intrusion.  Advertising  by  the  government  on  commercial  channels  is  prohibited.  Media 
associations continued to express their concern about the prospect of amending Article 102 of 

29 

 
 
the  Law  on  audio  and  audiovisual  media  services  to  allow  state-funded  public-interest 
campaigns.  The  media  associations  also  expressed  concern  over  the  prospect  of  political 
parties  using  state  funding  to  advertise  in  the  media  as  a  potential  way  to  gain  political 
influence on editorial lines. 

Out of twenty publishers of print media, there are five daily newspapers, including two in the 
Albanian  language.  The  authorities  continued  to  support  the  print  media by  allocating  EUR 
500,000  in  2021.  The  Agency  for  Audio  and  Audiovisual  Services  publishes  a  register  of 
broadcasting and print media, including information on the number of employees and type of 
employment.  

Internet  

Online media is not governed by a specific law, and there are differing views on the need for 
regulation, especially in  view of the growing threats from disinformation. Online media and 
social  media  platforms  are  the  main  source  of  disinformation,  misinformation,  hate  speech, 
breaches of professional standards and intellectual property rights infringements. Campaigns 
are  needed  to  boost  the  understanding  of  stakeholders  and  the  general  public  and  increase 
their  resilience  in  the  face  of  disinformation,  are  needed.  Media  associations  continued  to 
promote  the  established  registry  of  online  media  (promedia.mk)  in  order  to  increase 
professionalism and standards of online journalism. With regard to access to information, the 
Agency for the Protection of Free Access to Public Information received 798 complaints, of 
which 608 were predominantly from civil  society  organisations, while 190 complaints were 
filed by individuals.  

North  Macedonia  has signed up to  the  Declaration for the Future of Internet of 28  April 
20228.  Signed  by  60+  international  partners  to  date,  the  Declaration  sets  out  the  vision  and 
principles of a trusted Internet. 

Professional organisations and working conditions  

Journalists’  labour  and  social  rights  are  represented  by  the  Independent  Trade  Union  of 
Journalists and Media Workers. Journalists working for of the public service broadcaster and 
of news information agencies are organised in separate unions. The unions’ dialogue with the 
government  needs  to  be  improved,  in  order  to  find  acceptable  solutions  to  persisting 
challenges,  such as  the  high number of short-term  or part-time contracts without health and 
social  insurance.  Most  media  workers’  income  is  lower  than  the  national  average  salary. 
Labour rights, such as the right to annual leave, paid overtime hours and paid night shifts, are 
often disregarded.  

Numerous  media  outlets  lack  an  internal  code  of  ethics,  as  well  as  professional  and  career 
opportunities for professional training. Many journalists have a vulnerable contractual status 
and difficult socio-economic conditions which contributes to a culture of self-censorship and 
creates  openings  for  media  owners  to  strongly  influence  editorial  policy.  Further  efforts  are 
needed to protect journalists’ professional and labour rights, freedoms and security. 

In 2021, the total number of employees in the broadcasting media was 2,449, of which 1814 
in full-time employment and 635 employed part-time. There is no comprehensive data on the 
overall  number  of  journalists  due  to  the  fact  that  the  online  media  is  currently  not  covered. 
Additional measures to promote gender equality in the media industry are needed. 

(See also Chapter 10 - Digital transformation and media) 

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

8 Declaration for the Future of Internet | Shaping Europe’s digital future (europa.eu) 

30 

 
 
                                                           
The right to freedom of assembly and association is guaranteed by the constitution and the 
government  respects  the  law  on  citizens’  associations  and  foundations,  which  remains 
unchanged.  More  efforts  are  needed  to  implement  all  the  rulings  of  the  European  Court  of 
Human Rights with regard to the registration of associations. The legislation is in line with the 
EU  Charter  of  Fundamental  Rights  and  the  European  Convention  on  Human  Rights. 
Restrictions  on  assembly  rights  were  put  in  place  at  various  times  during  the  COVID-19 
pandemic. Despite short periods of restrictions, several lawful assemblies and gatherings took 
place without hindrance, respecting existing health and safety protocols due to the pandemic. 
However,  incidents  occurred  in  September  2021  when  hundreds  of  protestors  gathered  in 
Tetovo after a COVID-19 hospital caught fire, resulting in five people being detained.  

Several  protests  were  held  in  July  2022  against  the  proposals  designed  to  remove  the 
obstacles  to  the  opening  of  EU  accession  negotiations.  Between  7,000  and  15,000 
demonstrators participated in the protests, which on some occasions degenerated into clashes 
between demonstrators and police.  

The  naming  of  the  Bulgarian  Cultural  Club  opened  in  Bitola  in  April  2022  caused  deep 
concerns  amongst  citizens.  Public  officials  in  North  Macedonia  strongly  condemned  the 
incident of June 2022, when there was an attempt to set on fire the premises of the Cultural 
Club.  The  national  authorities  have  investigated  the  case  and  the  Court  convicted  the 
perpetrator to a suspended prison sentence.  

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

North Macedonia did not make any significant improvements in the procedures for enforcing 
property rights, which remain lengthy and expensive for citizens, due to the lack of a central 
institution and the lack of coordination between institutions dealing with these rights. Despite 
announcements,  the  administration  has  still  not  developed  a  national  strategy  on  property 
rights.  Property  registers  are  not  regularly  updated  and  are  still  kept  in  analogue  format, 
particularly at the municipal level. The Cadastre Office maintained a satisfactory rate of over 
90% of cases resolved. The registration of land and properties has been completed and laser-
scanning  has  been  conducted  across  the  whole  country.  The  administrations  that  handle 
restitution,  compensation  and  legalisation  processes  still  struggle  to  manage  their  caseload, 
mainly due to understaffing and a lack of funds. Over 6,000 denationalisation cases are still 
open and form the bulk of complaints addressed to the Ombudsman’s Office, even though this 
process was officially declared closed in 2013. 

Regarding  non-discrimination,  numerous  logistical  and  financial  challenges  continued  to 
hamper  the  work  of  the  equality  body  –  the  Commission  for  the  Prevention  and  Protection 
against Discrimination. The government has cut the annual budget of this Commission again 
and  the  recruitment  of  administrative  staff  has  not  been  completed.  These  issues  affect  the 
enforcement of the  Law on prevention and protection against discrimination  and need to  be 
addressed  as  a  matter  of  urgency.  There  has  been  criticism  concerning  the  lack  of 
independence of the Commission as regards budgetary expenditure due to inconsistencies in 
the  law.  Parliament  failed  to  fill  a  vacancy  in  the  Commission.  Commissioners  and  civil 
society have also  criticised the lack of diversity in the new Commission, notably as regards 
gender and persons with disabilities.  

Despite existing challenges, in  2021, the Commission  adopted its internal  acts and strategic 
documents  and worked  on 167 complaints.  It confirmed discrimination  in 60% of the cases 
brought  against  the  public  sector.  Based  on  its  wide-ranging  powers,  including  ex  officio 
powers, the Commission acted as amicus curiae in two court proceedings and submitted two 
requests for a misdemeanour procedure. The Commission suggested improvements to the law 

31 

 
 
on  the  prevention  of  and  protection  against  discrimination.  A  new  strategy  for  equality  and 
non-discrimination 2021-2026 was adopted. The new members of the National Coordinative 
Body  for  Equality  and  Non-discrimination  have  not  been  appointed  which  prevents  the 
institution  from  functioning  at  its  full  potential.  The  Ombudsman’s  Office  received  43 
complaints  on  grounds  of  discrimination  (62  in  2020),  predominantly  concerning  work  and 
labour  relations,  and  it  issued  23  opinions.  In  collecting  statistics  by  areas  and  grounds  of 
discrimination,  the  Ombudsman  followed  the  law  on  the  prevention  and  protection  against 
discrimination.  The  Ombudsman's  department  for  anti-discrimination  protection  remains 
understaffed.  The  Ombudsman’s  Office  and  the  Commission  for  the  Prevention  and 
Protection against Discrimination still need to establish regular and effective coordination in 
order to ensure that the non-discrimination principle is properly addressed. 

The Ministry of Interior manages a website for citizens to report hate crime, hate speech and 
other forms of violence, but the follow-up actions are not fully transparent. There should be a 
systematic practice of collecting data on hate speech. A more proactive and holistic approach 
in addressing hate speech and hate crime is needed.  

Some  progress  was  made  on  gender  equality  by  developing  a  normative  framework  for 
alignment  with  the  Istanbul  Convention  and  a  policy  framework  to  integrate  gender 
perspectives and align national law with the EU gender equality acquis. With the adoption of 
the National Strategy for Gender Equality 2021-2026, in July 2022, good progress was made 
towards establishing an effective system for gender mainstreaming. However, adoption of the 
draft law for gender equality is still pending. The cross-institutional mechanisms designed to 
implement  and  monitor  policies  promoting  gender  equality  need  strengthening,  notably  by 
improving  the  organisational  arrangements,  boosting  its  technical  capacity,  budget  and 
professionals trained according to the international standards.  

Further  alignment  with  the  provisions  of  the  Istanbul  Convention  on  preventing  and 
combating  violence  against  women  and  domestic  violence  remains  a  challenge.  Action  is 
pending to align related laws and adopt implementing legislation to the Law on the prevention 
of and protection from violence against women and domestic violence. In April 2022, North 
Macedonia  submitted  its  first  Report  to  the  Group  of  Experts  on  Action  against  Violence 
against Women and Domestic Violence (GREVIO). 

The  Ministry  of  Justice  still  needs  to  amend  the  Criminal  Code  in  order  to  provide  full 
protection  to  victims  from  all  forms  of  violence  including  femicide.  Services  for  victims  of 
gender-based violence need to be expanded and a proper budget is needed to meet the Istanbul 
Convention  standards,  including  access  for  women  with  disabilities  and  respecting  different 
cultural, ethnic, and religious factors when reporting violence. The country lacks clear cross-
institutional protocols and the police and health workers lack the capacity to fully assess the 
consequences of violence and to take adequate measures. The state budget supports only the 
existing  five  operational  shelters,  one  crisis  centre  and  three  centres  for  victims  of  sexual 
violence. The provision of psychosocial and other prevention services remains uncoordinated 
and  dependent  on  financing  from  local  self-government,  foreign  donors  and  the  business 
community. A specialised 24/7 team for the urgent protection of vulnerable groups operates 
only in the capital. Due to the overburdened health system during the pandemic, the lack  of 
adequately  trained  staff  and  the  limited  number  of  accommodation  facilities,  victims  of 
gender-based and domestic violence faced serious challenges in accessing health services. 

In March 2022, the Ministry of Labour and Social Policy opened a resource centre for gender-
responsive  policymaking  and  budgeting  to  increase  the  capacity  of  public  administration  to 
implement  measures  related  to  the  EU  Directive  2006/54/EC  on  the  implementation  of  the 
principle  of  equal  opportunities  and  equal  treatment  of  men  and  women  in  matters  of 

32 

 
 
employment  and  occupation  and  include  gender  mainstreaming  in  institutional  planning, 
programming and actions. However, the administration lacks proper gender-strategic planning 
and  budgeting  tools  are  lacking,  which  limits  the  opportunities  for  effective  gender 
mainstreaming in policymaking and for integrating the gender perspective into sector dialogue 
and public finance management.  

The lack of reliable gender-disaggregated data across sectors creates significant constraints in 
developing  evidence-based policies and measures. The first  National  Gender Equality index 
was  published  in  2019  but  has  not  been  updated.  Collecting  and  analysing  gender  statistics 
requires boosting the capacity of relevant institutions and improved institutional coordination. 

Gender  gaps  and  stereotypes  remain  evident  in  public  and  political  life  (see  2.1.1. 
Democracy).  

The  two  ‘Public  Room’  cases,  where  explicit  photos  and  private  information  of  girls  and 
women were shared on an online platform, resulted in a court ruling against the founder and 
administrator of the platform for the production and distribution of child pornography (female 
minors).  There  are  still  gaps  in  the  related  legislative  framework  as  the  Criminal  Code  and 
related  implementing  legislation  is  not  being  harmonised  with  the  Istanbul  Convention. 
Follow-up by the institutions in cases of rape and domestic violence needs to be improved by 
clear cross-institutional protocols and standardised reintegration services for the victims. 

The administration amended the legal framework governing the protection of the rights of the 
child in line with international standards. However, a wider societal and inter-party consensus 
is  needed  on  key  legislative  reforms  to  bridge  legal  gaps,  following  the  needs  and  best 
interests  of  children.  Discrepancies  between  the  family  law  provisions  on  adoption  and 
international  standards  have  not  been  addressed.  An  action  plan  for  children,  including  a 
sufficient budget and sectoral models to provide effective services for children, has yet to be 
prepared.  

Further  efforts  are  needed  to  address  structural  challenges,  such  as  the  lack  of  resources  by 
state institutions dealing with child rights, the lack of strategic documents on child rights and 
functioning  of  the  statutory  body  responsible  for  overseeing  implementation  of  the 
Convention on the Rights of the Child. Consultations of young people in policymaking needs 
to  be  improved.  There  is  a  need  to  improve  cooperation  among  institutions  to  better 
understand and address the challenges faced by different groups of children are facing, such 
as children with disabilities or children from the Roma community. 

In  2021,  254  complaints  were  filed  with  the  Ombudsman  related  to  breaches  of  children’s 
rights, nine of which concern children with disabilities. The Ombudsman issued 139 opinions, 
which were accepted in 93 cases. However, institutions need to put in place systemic changes 
following  the  Ombudsman’s  recommendations.  Parents/caregivers  continue  to  file  the 
majority of complaints, rather than children themselves. The National Coordinating Body for 
the  Protection  of  Children  from  Violence  adopted  a  Protocol  on  the  actions  of  multi-sector 
teams for the protection of children victims of abuse, neglect and violence. Training for multi-
sector teams was provided in 12 cities across the country.  

However, challenges remain to fully implement the national strategy to end violence against 
children  (2020-2025).  The  authorities  should  allocate  sufficient  resources  to  the  child 
protection  system  to  address  the  increasing  challenges  of  online  violence  and  abuse  (cyber-
bullying).  Further  efforts  are  needed  to  raise  awareness  of  violence  against  children  among 
the  general  public  and  professionals  to  recognise  abuse  and  report  it.  The  country  needs  to 
bring in programmes to support the rehabilitation, resocialisation, or reintegration of children 
victims of violence. 

33 

 
 
The COVID-19 pandemic demonstrated that the digitalisation of services should go in parallel 
with increased efforts to educate and facilitate the access to these technologies for vulnerable 
groups, who often lack digital skills.  

Despite  the  substantial  set  of  social  and  child  protection  measures  to  combat  the  socio-
economic consequences of COVID-19, analysis has demonstrated that relative child poverty 
has increased, putting an additional 19,000 children at risk. Further efforts are needed to make 
the  social  protection  system  more  child-sensitive  based  on  a  child-centred  service  delivery 
model, including by strengthening professional development and supervision in the delivery 
of good quality child protection services.  Local  governments  and civil  society organisations 
should improve cooperation with social work centres to develop and support new community 
services around the country, including services to support children at risk, Roma children and 
children with disabilities who are victims of discrimination and segregation. 

North Macedonia continued its work to fully include children with disabilities in mainstream 
schools  and  pre-schools  continued.  However,  the  change  from  a  medical-based  to  a  social 
model of disability assessment based on human rights has not been brought in systematically. 
Despite the improvements in the legal framework, action to provide equal access to education 
for children with disabilities is at an early stage. With regard to children without parental care, 
investments  were  made  to  strengthen  the  childcare  system,  particularly  in  foster  and 
community-based care homes. Community-based services and sub-regional centres for foster 
family assistance were made available throughout the country and no children remain now in 
institutionalised care. 

The  authorities  identified  six  child  victims  of  trafficking  in  human  beings  in  2021.  An 
additional  five  children  were  identified  as  being  potential  victims  of  trafficking  in  human 
beings.  More  measures  are  needed  to  ensure  that  vulnerable  children  are  protected  from 
sexual  exploitation.  It  is  necessary  to  expand  the  legal  education  provided  to  judges  and 
public prosecutors is necessary on issues such as discrimination based on disability, gender-
based and sexual violence against women, and violence against children. 

The  law  on  juvenile  justice  requires  systematic  implementation.  Access  to  justice,  legal 
representation and the capacity of public officials involved with child victims, child witnesses 
and  children  in  conflict  with  the  law  are  still  inadequate.  The  inter-sectoral  approach  to 
implementation  of  the  legal  framework  needs  to  be  systematised  and  streamlined  among 
professionals of juvenile justice. The legal framework should also be further updated in line 
with  international  standards  and  EU  directives,  including  the  Directive  (EU)  2016/800  on 
procedural  safeguards  for  children  who  are  suspects  or  accused  persons  in  criminal 
proceedings9.  

The detention conditions for boys in the juvenile educational-correctional facility near Tetovo 
have improved. However, between September 2021 and June 2022 they have not had access 
to  education.  The  facility  is  in  a  remote  location,  making  it  unfit  for  resocialisation  and 
rehabilitation purposes. Girls have been detained for one year in the educational correctional 
facility  in  the  female  ward  of  Idrizovo,  prison  which  did  not  allow  for  appropriate  care, 
education,  resocialisation  and  rehabilitation  support.  The  legislation  should  be  amended  to 
find a long-term solution for educational correctional measures for girls.  

North Macedonia made limited progress in improving the rights of persons with disabilities. 
The mechanism to  monitor the implementation  of the Convention for the Rights  of Persons 

9  Directive  (EU)  2016/800  of  the  European  Parliament  and  of  the  Council  of  11  May  2016  on  procedural 
safeguards for children who are suspects or accused persons in criminal proceedings, OJ L 132, 21.5.2016, p. 1–
20. 

34 

 
 
                                                           
with Disabilities is functioning within the Office of the Ombudsman. The National Strategy 
on Achieving Equal Rights for the Persons with Disabilities is in place. Preparatory work has 
started to draft the national strategy on the rights of people with disabilities. The government 
adopted the action plan to implement the deinstitutionalisation strategy for 2022-2024. Work 
continues to resettle the beneficiaries from the Special Institute Demir Kapija continues. The 
Ombudsman signed a memorandum for cooperation with 22 civil society organisations, part 
of  the  National  Monitoring  mechanism.  However,  the  mandate  of  the  national  coordination 
body for implementing the Convention and its capacity to influence decision-makers in state 
structures  remains  minor.  In  2021,  the  Commission  for  Prevention  and  Protection  against 
Discrimination  took  action  on  six  complaints  related  to  discrimination  on  the  basis  of 
disability. 911 students with special needs have been enrolled in general primary schools and 
312  in  secondary  education,  supported  by  educational  assistants  to  assist  inclusive  teams. 
Persons with disabilities continue to face considerable discrimination, both direct and indirect, 
due  to  infrastructure-related  barriers,  a  lack  of  information  and  services,  discriminatory 
attitudes and social exclusion. (see also Chapter 19 – Social policy and employment) 

The promotion of equality  and the condemnation  of hate speech, hate crime, discrimination 
and intolerance against lesbian, gay, bisexual, transgender, intersex and queer (LGBTIQ) 
should be systematic.  Despite having  a legal  framework that protects  against  discrimination 
and  hate  crime  on  the  grounds  of  sexual  orientation  and  gender  identity,  the  implementing 
these  laws  remains  challenging.  Following  a  European  Court  for  Human  Rights’  judgment 
(January 2019), authorities prepared amendments to  the law on civil registry to  bring in  the 
law  was  withdrawn  from 
legal  gender  recognition  procedure.  However, 
parliamentary  procedure  in  March  2022,  for  additional  changes.  The  legal  framework  does 
not allow for the official recognition of same-sex couples.  

the  draft 

Several politicians have made homophobic and discriminatory statements. Investigations into 
the  attacks  in  2012,  2013  and  2014  on  the  LGBTIQ  support  centre  have  not  progressed.  In 
November  2021,  the  office  of  an  LGBTIQ  organisation  in  Tetovo  was  vandalised  and 
activists  received  death  threats.  The  absence  of  systematic  data  collection  on  hate  crimes 
based  on  sexual  orientation  and  gender  identity  and  their  ineffective  follow-up  by  the 
authorities  remains  a  serious  issue.  Hate  crime  cases  are  registered  in  the  civil  society 
database leading to reports. Action is  needed to  increase the capacity and awareness of law 
enforcement officers and legal professionals to effectively prevent and prosecute all instances 
of  violence,  hate  crimes  and  hate  speech.  There  was  no  progress  made  to  remove  of  the 
negative  stereotypes  and  hate  speech  toward  LGBTIQ  people  in  textbooks,  or  to  adopt  the 
national action plan for LGBTIQ for 2021-2025. In June 2021, the authorities facilitated the 
successful  organisation  of  the  Pride  Parade,  attended  by  the  President  of  North  Macedonia 
and a number of ministers. Hate speech and derogatory terms for LGBTIQ persons continue 
to be prevalent in the online space. Serious efforts are needed to protect and ensure people can 
exercise their LGBTIQ rights. 

Concerning procedural rights, the country remains partially aligned with the EU acquis. The 
authorities should take concrete steps to adopt the draft law on the compensation for victims 
of crime, including victims of trafficking in human beings. The draft law was withdrawn from 
parliamentary procedure, for additional consultations.  

As regards free legal aid, the Ministry of Justice has intensified its efforts to provide access to 
primary  and  secondary  legal  aid  to  the  citizens  who  cannot  afford  to  hire  an  attorney.  Free 
legal aid is accessible through the 34 regional branch offices of the Ministry of Justice, civic 
associations authorised to give legal aid, legal clinics within the faculties of law and lawyers 
certified  to  give  secondary  legal  aid.  A  register  of  associations  and  individual  lawyers  who 
provide legal aid is available on the website of the Ministry of Justice. Increasing numbers of 

35 

 
 
requests have been submitted and approved for primary and secondary legal aid. The system 
of legal aid in criminal proceedings needs to be reformed to improve access to justice, mainly 
to  revise  the  criteria  to  access  legal  aid  in  criminal  proceedings  (in  cases  of  mandatory 
defence, defence of indigent persons and cases of representation of the interests of victims of 
crime).  The  budget  allocated  for  legal  aid  in  2021  amounted  to  EUR  81,000.  The  budget 
implemented for legal aid in 2021 amounted to EUR 28,000. 

The authorities should also take concrete steps to adopt legislation in line with the Directive 
(EU) 2016/800 on procedural safeguards for children who are suspects or accused persons in 
criminal proceedings. 

As regards the protection of minorities, the authorities continued to implement the national 
strategy  ‘One  Society  for  All  and  Interculturalism’.  The  Agency  for  Protection  of  Non-
majority Communities moved to the premises of the Ministry of Political System and  Inter-
Community Relations, which ought  to  accelerate  the communication between this body and 
the authorities responsible for rights of persons belonging to smaller ethnic communities. In 
the course of 2021, the Agency started to provide funds to finance projects run by civil society 
organisations working to promote and protection of the rights of non-majority communities. 

Coordination between the Permanent Advisory Body of the government and the Coordination 
Body of the Prime Minister’s office is ongoing, though it still lacks transparency. More efforts 
are needed to ensure the full independence of the Agency for Communities Rights Realisation 
and the Language Implementation Agency in terms of protecting their focal interest group, the 
smaller ethnic communities. Both institutions remain understaffed and insufficiently funded. 
The local authorities should make use of the national strategy to improve the situation at the 
municipal level, where the representation of non-majority communities remains insufficient. 

There  was  some  progress  on  the  inclusion  of  Roma.  North  Macedonia  adopted  the  new 
strategy for Roma inclusion 2022-2030 covering antigypsyism, education, employment, social 
care and healthcare, housing, civic registration and culture was adopted. The strategy does not 
systematically  address  participation,  empowerment  and  capacity  building.  The  country  also 
adopted  the  action  plan  for  the  protection,  promotion  and  fulfilment  of  the  human  rights  of 
Roma women and girls 2022-2024 was also adopted. The remaining action plans in other key 
areas still need to be prepared. The government appointed an adviser to the Prime Minister in 
charge of Roma inclusion issues. In the school year 2021/2022, 420 Roma children, of which 
208  coming  from  families  at  social  risk,  attended  kindergartens  in  15  municipalities.  1,601 
Roma children aged six were enrolled in primary school for the school year 2021/2022. The 
annual  dropout  rate  per  grade  for  Roma  children  in  primary  education  is  4%  and  for 
secondary education is 5%. No measures were taken to prevent irregular attendance of Roma 
children  in  primary  education,  to  reintegrate  children  who  are  not  enrolled  in  education  on 
time  or  have  left  education  without  completing  it.  There  are  no  systematic  measures  to 
address  the  issue  of  street  children.  The  Minister  of  Education  and  Science  hired  30  Roma 
educational mediators to work in 17 municipalities. Segregation in school remains high.  

Pursuant  to  the  Law  on  unregistered  persons  in  the  birth  registry  adopted  by  the  end  of 
January 2020, of the 700 identified unregistered persons, 318 applications for registration in 
the special birth registry were submitted, of which 292  people were registered. 15 displaced 
families are from Kosovo, including 60 children housed in temporary shelters in Vizbegovo. 

The number of unemployed Roma is 12,990 which is a slight decrease from 13,703 in 2021. 
The number of Roma benefiting from active measures for employment was 589 or 5.2% of all 

 This designation is without prejudice to position on status and is in line with UNSCR 1244(1999) and the ICJ 
Opinion on the Kosovo declaration of independence. 

36 

 
 
                                                           
beneficiaries. No new measures were brought in that take a targeted approach to Roma. The 
2021  Youth  Guarantee  Plan  included  979  Roma  (488  were  women).  The  government 
completed  a  geographic  mapping  of  Roma  settlements  was  completed,  which  provides  an 
overview  of  the  living  conditions  in  Roma  settlements  in  14  municipalities  with  the  largest 
Roma population. The majority of Roma settlements are still not covered by urban plans. In 
2021,  the  Commission  for  the  Prevention  and  Protection  against  Discrimination  recorded 
seven  cases  of  discrimination  based  on  Roma  ethnicity.  Roma  women  and  girls  remain 
particularly  vulnerable,  often  due  to  unemployment.  The  government  is  working  on  the 
priority actions identified in the November 2019 Roma seminars; monitoring and reporting is 
ongoing.  The  commitment  to  implement  the  Poznan  Declaration  priorities  remains 
satisfactory. 

EU citizens’ rights 

In  December  2012,  North  Macedonia  amended  the  law  allowing  the  acquisition  of 
citizenship  for  special  economic  interest.  The  migratory  and  security  risks  this  scheme 
could pose to the EU are being closely monitored, especially keeping in mind inconsistencies 
in  the  criteria  for  granting  citizenship.  North  Macedonia  should  refrain  from  enabling 
systematic acquisition of citizenship based on special economic interest. 

2.2.2  Chapter 24: Justice, freedom and security  

The  EU  has  common  rules  for  border  control,  visas,  residence  and  work  permits,  external 
migration and asylum. Schengen cooperation entails the lifting of border controls within the 
EU.  Member  States  also  cooperate  with  North  Macedonia  in  the  fight  against  organised 
crime and terrorism, and on judicial, police and customs matters all with the support of the 
EU justice and home affairs agencies. 

North Macedonia is moderately prepared to implement the EU acquis. Some progress was 
made  in  this  chapter  and  in  addressing  last  year’s  recommendations,  mainly  with  the 
implementation of the Joint Action Plan on Counterterrorism, as well as adoption of strategic 
documents  in  the  field  of  border  management  and  migration.  Measures  to  counter  violent 
extremism and fight terrorism need to continue. Registration of migrants needs to be carried 
out  in  a  systematic  manner  and  protection-sensitive  profiling  needs  to  be  improved.  The 
country  should  establish  a  proper  system  for  managing  irregular  movement  and  stop  the 
practice  of  returning  migrants  outside  a  legal  framework.  Cooperation  with  the  EU  law 
enforcement  agencies  remains  good,  and  a  liaison  prosecutor  to  EUROJUST  has  been 
appointed.  Since  only  partial  progress  was  made  on  last  year’s  recommendations,  these 
remain valid. 

In the coming year, the country should, in particular:  

  continue  the  proactive  implementation  of  the  institutional  reforms  of  the  structures 
fighting organised crime with a focus on increasing operational capacity and cooperation;  

  continue  to  implement  the  Joint  Action  Plan  on  Counterterrorism,  with  a  focus  on 
terrorist  fighters  and 

prevention  of  extremism,  reintegration  of  former  foreign 
deradicalisation in prisons; 

  systematically  register  migrants  and  improve  protection-sensitive  profiling,  as  well  as 
adopting  a  more  systematic  approach  to  fighting  migrant  smuggling;  align  national 
legislation with the EU’s list of visa required third countries. 

Fight against organised crime 

North Macedonia has some level of preparation in the fight against organised crime. Some 

37 

 
 
progress was made mainly in operational cooperation with international partners, as well as 
in improving the coordination of activities against organised crime, but more needs to be done 
to  improve the  effectiveness  of law enforcement in  fighting certain  forms of crime, such as 
money  laundering  and  financial  crimes.  The  investigative  centres  at  the  Basic  Public 
Prosecution  Office  need  to  be  strengthened  to  achieve  their  objectives  of  increasing  the 
efficiency  of  the  investigations  and  improving  the  coordination  between  prosecutors,  the 
police and the other relevant bodies. 

In the coming year, the country should, in particular:  

  further improve its track record on investigating, prosecuting and convicting instances of 
organised crime and money laundering with a focus on confiscation of proceeds of crime; 

  adopt and implement the necessary legislation on asset recovery; 

  prepare  the  necessary  legislation  on  cybersecurity  and  set  up  a  coordinated  and  unified 

system for tackling cybercrimes. 

Institutional set-up and legal alignment  

The country has 330 police officers per 100 000 inhabitants, compared with an EU average of 
333 (Eurostat, 2018-2020). In 2021, 590 police officers were employed, and 600 new public 
vacancies were announced. 

Key  institutions  in  the fight  against organised crime include specialised  police units within 
the  Ministry  of  Interior,  which  deal  with  different  types  of  organised  crime  and  financial 
investigation. In addition, there is a Financial Intelligence Unit under the Ministry of Finance 
that  collects  information  and  helps  identify  suspicious  transactions.  Financial  Investigation 
units operate within the Customs Administration, the Financial Police and within the Ministry 
of Interior. 

The  police  is  generally  well-equipped  and  trained.  The  Police  Training  Centre  within  the 
Ministry of the Interior provides both initial and vocational training. The Ministry of Interior 
has prepared a Strategic  Plan for the period of 2021-2023 that determines the medium  term 
priorities  and  contains  objectives  for  the  development  of  the  police  force  and  replaced  the 
previous Police Development Strategy. 

North  Macedonia  implemented  a  comprehensive  reform  of  its  intelligence  services.  The 
National Security Agency (NSA) is  still located in the premises of Ministry of Interior. The 
technical  conditions  for  the  proper  functioning  of  the  system  for  the  interception  of 
communications  have  been  further  improved.  The  Operational  Technical  Agency  has 
continued to provide connection in the system for the interception of communications. 

The  Asset  Recovery  Office  (ARO)  set  up  within  the  Public  Prosecution  Office,  is 
understaffed,  employing  only  one  public  prosecutor,  out  of  five  foreseen.  The  law  on  the 
Asset Recovery Office has still not been adopted. 

The National Cyber Security Council is composed of the Ministers of Defence, Interior and 
Information  Society  and  Administration,  but  was  not  active  in  the  reporting  period.  The 
National Cybersecurity Strategy 2018-2022 and related action plan will expire in the end of 
2022. The new strategy is under preparation and needs to take into account assessment of the 
implementation of the previous strategy.  

Regarding  the  legal  framework,  the  Criminal  Code  is  broadly  in  line  with  European 
standards and criminalises  trafficking in  human  beings, online child pornography, computer 
crime  and  drug  trafficking.  North  Macedonia  is  party  to  the  Council  of  Europe  ‘Budapest’ 
Convention on cybercrime and was among the 22 countries that signed its Second Additional 

38 

 
 
Protocol  on  enhanced  co-operation  and  disclosure  of  electronic  evidence.  In  relation  to  the 
negotiation for a United Nations convention on cybercrime based on resolution 74/247 of the 
United  Nations  General  Assembly,  North  Macedonia  demonstrated  voting  patterns  that  are 
fully convergent with the position taken by the EU and its Member States. 

As regards the strategic framework, there is a National Strategy for the prevention of money 
laundering and financing terrorism (2021-2023), and a National Strategy for capacity building 
for financial investigations and confiscation of property (2021-2023) together with the Action 
Plan.  In  June  2022,  the  Parliament  adopted  new  legislation  on  the  fight  against  money 
laundering  and  the  financing  of  terrorism  that  aims  to  align  with  the  5th  Anti  Money 
Laundering  Directive,  including  crypto-assets  and  to  address  the  recommendations  of  the 
Financial Action Task Force. Cooperation among institutions continues to increase, and new 
tools have been set up to ease reporting and monitoring of suspicious transactions based on a 
risk  assessment  approach.  The  Financial  Intelligence  Office  strengthened  its  analytical 
capacity for data processing and financial analysis. 15 people were indicted and 7 convictions 
were reached against 16 perpetrators for money laundering in 2021. 

A National Strategy for combating trafficking in human beings and illegal migration (2021-
2025) continued to be implemented. The National  Commission  for combating trafficking  in 
human beings  and illegal  migration is  responsible for monitoring the implementation  of the 
strategy.  The  decentralisation  of  the  National  Commission,  through  the  creation  of  local 
commissions at the municipal level, still needs to be implemented effectively on the ground. 
The National Strategy for Control of Small Arms and Light Weapons and Action Plan 2022-
2025  aiming  to  harmonize  with  the  objectives  of  the  2018  Roadmap  sustainable  solution  to 
the  illegal  possession,  misuse  and  trafficking  of  small  arms  and  light  weapons,  and  their 
ammunition in the Western Balkans remains to be adopted. 

Implementation and enforcement capacity  

The track record of investigations, prosecutions and convictions in the fight against organised 
crime has overall improved. 

In  2021,  investigations  were  launched  against  119  people.  There  were  indictments  brought 
against 55 persons. Financial investigations were conducted in 3 cases. There were 10 cases 
with first instance decisions to confiscate assets (cars, money, mobile phones). There are 15 
ongoing trials. In 2021, 173 verdicts for organised crime have been reached at all instances.  

The  external  oversight  mechanism  is  being  implemented.  The  Special  Department  for 
investigation  and  prosecution  of  crimes  committed  by  persons  with  police  powers  and 
members of the prison police in the Public Prosecutor's Office has only two investigators. The 
department registered cases of excessive use of force by law enforcement officials against 135 
persons. Investigative procedures were against 31 persons and verdicts were passed against 18 
persons.  

The National Coordination Centre for the Fight against Organised Crime is operational but it 
needs to improve its operational capacity. Its activity has contributed to shortening of the time 
of exchange of data and information about the needs of the involved institutions; sharing of 
information  between  institutions  on  the  ‘need-to-know’  principle;  coordination  between 
institutions  in  cases  when  there  is  a  request  for  data  and  information  on  the  same  targeted 
natural  or  legal  person;  as  well  as  support  for  the  international  exchange  of  information, 
especially in the area of international police cooperation, which is an important segment in the 
fight  against  organised  and  serious  crime.  All  participating  authorities  have  access  to  their 
respective databases, and all have nominated their representatives.  

39 

 
 
The  Basic  Public  Prosecutor’s  Office  for  Organised  Crime  and  Corruption  has  insufficient 
human  resources  and  lacks  financial  resources  for  expert  services.  Specialisation  within  the 
Office is needed, as well as a pro-active approach in pursuing cases.  

The  investigative  centres  in  the  Basic  Public  Prosecution  Office  in  Skopje,  Kumanovo  and 
Tetovo and in the Basic Public Prosecutor’s Office for Organised Crime and Corruption are 
operational, but still lack sufficient human and financial resources and adequate equipment to 
perform  properly.  These  investigative  centres  have  still  not  achieved  their  objectives  of 
increasing  the  efficiency  of  the  investigations  and  improving  the  coordination  between 
prosecutors, the police and the other relevant bodies. 

The  country  participates  in  international  police  cooperation  activities  through  the  main 
cooperation channels. Cooperation with Europol is well established following the conclusion 
of a strategic agreement in 2007 and an operational agreement in 2011. There is operational 
cooperation  in  the  fight  against  trafficking  of  human  beings,  weapons,  and  drugs.  A  secure 
communication link for information exchange (SIENA) is established.  

North  Macedonia  continued  to  cooperate  with  EU  police  services  through  the  European 
Network  of  Fugitive  Active  Search  Teams  (ENFAST),  in  which  it  has  an  observer’s  status. 
The country also participates in EMPACT (the European Multidisciplinary Platform Against 
Criminal  Threats).  In  2022,  North  Macedonia  committed  to  participate  in  26  operational 
actions in nine of the 15 EMPACT operational action plans (OAPs), including as co-leader for 
1  operational  action.  In  2021,  North  Macedonia  participated  in  32  EMPACT  operational 
actions. North Macedonia appointed a National EMPACT Coordinator. 

The country continued to participate actively in EMPACT Joint Action Days (JADs), such as 
the JAD South East Europe 2021 (promoting closer cooperation in the work against firearms 
trafficking,  the  smuggling  of  migrants  and  drugs  trafficking),  the  JAD  Mobile  4  (targeting 
various  modalities  of  motor  vehicle  crime,  including  smuggling  of  stolen  vehicles  via  the 
external borders, parts of vehicles, as well as associated document fraud) and the JAD Danube 
6 (focused on combatting the smuggling of migrants, fighting trafficking in human beings and 
document fraud).  

The National Serious and Organised Crime Threat Assessment was adopted on 15 December 
2021 in accordance with the EUROPOL policies EMPACT cycle 2022-2025. 

Cooperation  between  the  country  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. North Macedonia has full access to the CEPOL Exchange Programme. 

Confiscation of criminal assets is not sufficiently used in criminal proceedings with only four 
cases of confiscation of property in 2021. The confiscation of criminal assets should become 
a strategic priority in the fight against organised crime, terrorism and high level corruption in 
the country.  

On  small  arms  and  light  weapons,  there  are  visible  results  with  328  pieces  of  firearms 
seized in 2021. In the same year, 178 criminal offences on illegal production, possession and 
trading in weapons were detected, for which 195 perpetrators were criminally charged.  

Regarding cybercrime, the cyber incident response unit and Ministry of Interior (Cybercrime 
unit)  are  obliged  to  exchange  cyber  incident  and  cybercrime  data  in  accordance  with  the 
Criminal Code. Cybercrime statistics (criminal justice statistics) are published by Ministry of 
Interior on an annual basis. There has been an increase in detection by 5.6 % with a total of 
169 computer crimes detected. In 2021, the number of registered crimes of sexual exploitation 
of children on the internet has increased by 37.5 % to 11 cases. 

40 

 
 
Efforts in key areas of the implementation of activities of within the goals related to Western 
Balkans  in  the  EU  Action  Plan  on  firearms  trafficking10,  which  include  harmonisation  of 
legislation  with  EU  acquis,  drafting  of  a  new  Small  Arms  and  Light  Weapons  strategy  and 
action  plan,  defining  new  rules  of  procedure  for  the  SALW  Commission  as  well  as  in 
improving  the  investigation  and  record  keeping  capacities.  Activities  on  awareness  raising, 
outreach and education on the dangers and risks related to the misuse, illicit possession  and 
trafficking  of  firearms/SALW  are  limited,  as  well  as  reduction  of  illicit  firearms  through 
legalisation, voluntary surrender, deactivation and destruction. 

Cooperation in the field of drugs 

Institutional set-up and legal alignment 

A national drugs observatory (NDO) exists since 2007 in the Ministry of Health. However, it 
lacks  sufficient  staff  and  hence  its  operational  capacity  (e.g.  in  terms  of  data  collection) 
remains  limited.  There  is  still  no  national  early  warning  system  to  liaise  with  the  European 
Monitoring Centre for Drugs and Drug Addiction on new psychoactive substances and new 
trends.  

The 2021-2025 National Drug Strategy and the Action Plan 2021 - 2023 were adopted in July 
2021. The Strategy is based on human rights, guaranteed security of all citizens, and aims at 
providing quality services by state government bodies, the bodies of the local self-government 
units,  the  institutions,  and  the  civic  associations.  Proper  implementation,  monitoring  and 
evaluation of the Strategy need to be ensured. 

A new law on Control of Narcotic Drugs and Psychotropic Substances has been drafted. Any 
changes to the law must comply with the EU acquis and international standards.  

Implementation and enforcement capacity 

The operational capacity of the NDO is limited. It needs to have sufficient staff and a regular 
process of cooperation with relevant stakeholders. A national early-warning system needs to 
be set up.  

In 2021, there was a significant improvement in the prevention of drug trafficking. A total of 
701 criminal  offences were recorded against 840 perpetrators. 10 organised criminal  groups 
with 61 members were uncovered and supressed, while in the first half of 2022, 9 organised 
groups of 36 members.  

In  2021,  the  Ministry  of  Interior  confiscated  18,301  stems  of  cannabis  and  as  6,960  ml  of 
alcoholic  solutions  of  tetrahydrocannabinol  from  legal  entities  holding  a  License  for 
production  of  cannabis  oil  extracts  for  medical  purposes,  whose  production  premises  and 
equipment were used for illegal cultivation of the narcotic drug - cannabis and production of 
oil  extracts.  The  control  of  those  entities  by  law  enforcement  authorities  needs  to  be 
strengthened. 

Cooperation with neighbouring countries is good, including on ad hoc operations. 

Fight against terrorism 

Institutional set-up and legal alignment  

There  is  a  national  coordinator  for  counter-terrorism  and  countering  violent  extremism  and 
two  deputies  responsible  for  the  prevention  of  violent  extremism  and  for  the  fight  against 

10  Aligned  with  the  goals  and  key  performance  indicators  of  the  2018  Regional  Roadmap  for  a  sustainable 
solution to the illegal possession, misuse and trafficking of small arms and light weapons and their ammunition 
in the Western Balkans. 

41 

 
 
                                                           
terrorism.  

The  Office  is  responsible  for  coordinating  inter-institutional  cooperation,  in  the  form  of  the 
National  Committee  for  the  Prevention  of  Violent  Extremism  and  the  Fight  Against 
Terrorism,  chaired  by  the  National  Coordinator.  The  committee  includes  representatives  of 
the  key  institutions  countering  terrorism  and  violent  extremism.  The  new  composition  was 
nominated in November 2021. 

Responsibility  for  terrorism-related  issues  is  with  the  Ministry  of  Interior’s  Department  for 
the Suppression of Organised and Serious Crime. 

The legal framework is broadly aligned with the EU acquis and international anti-terrorism 
instruments. A bank account register is still not established. Legislation on the protection of 
critical infrastructure is under preparation.  

The  national  strategy  for  countering  terrorism  (2018-2022)  and  the  strategy  for  countering 
violent extremism (2018-2022), and related action plans, will expire at the end of 2022. The 
drafting  of  new  strategic  documents  has  started,  and  those  need  to  be  aligned  with  the  EU 
policy  and  key  principles  on  Preventing  and  Countering  Violent  Extremism  (P-CVE), 
following an evaluation and in consultation with relevant stakeholders and adopted. 

A National Plan for reintegration, resocialisation and rehabilitation of foreign terrorist fighters 
returnees and members of their families (women and children) continued to be implemented. 
Further progress  is  needed to  develop  a single and comprehensive  approach in  dealing with 
foreign terrorist fighters and their families. 

The implementation of the Bilateral  Implementing Arrangement of the Joint Action Plan on 
Counter-Terrorism for the Western Balkans progresses well and the parties agreed to update 
the arrangement. North Macedonia submitted the fourth interim report in March 2022. Further 
efforts  are  required  in  order  to  implement  the  remaining  activities  envisaged  in  the 
arrangement. 

Implementation and enforcement capacity  

There are currently 9 foreign terrorist fighters in prison. No prisoners were released in 2021 
and two persons were released in the first half of 2022. 

143 citizens of the country have left for conflict zones since 2012: of these 69 have returned, 
38  have  been  killed.  There  are  5  active  fighters  in  the  conflict  zones.  No  departures  to  the 
conflict zone were registered in 2021 and 2022.  

Local  mechanisms  for  the  prevention  and  countering  of  violent  extremism  are  in  place. 
Community  action  teams  are  set  up  in  four  sensitive  municipalities  (Cair,  Gostivar,  Kicevo 
and Kumanovo) and have prepared their own action plans. 

Efforts were made to set up structures and mechanisms to deal with reintegration at the local 
level  with  a  whole-of-society  approach  and  inclusion  of  civil  society.  Nine  local 
multidisciplinary  teams  have  been  set  up  in  Skopje,  Tetovo,  Kumanovo,  Gostivar,  Ohrid, 
Struga, Kicevo, Plasinca and Makedonski Brod in order to provide support to returnees and 
their families and are starting with their activities. Coordination between the different bodies 
established  at  local  level  is  needed,  as  well  as  making  them  fully  operational.  A  better 
clarification of competences, tasks and responsibilities between local and central level on P-
CVE is needed.  

Radicalisation in prisons remains a concern and more actions are needed in that respect. 

42 

 
 
Judicial cooperation in civil and criminal matters  

The liaison prosecutor with EUROJUST facilitated ongoing investigations of serious, cross-
border, organised crime, terrorism, given the increased number of cases that have connection 
with the Western Balkans. 

Progress was limited regarding the legal framework for cooperation in civil and commercial 
matters.  An  Agreement  for  mutual  legal  aid  in  civil  matters  was  concluded  with  Kosovo. 
North  Macedonia  should  ratify  the  four  Hague  Conventions  that  it  has  already  signed.  In 
2021, there were 856 incoming and 233 outgoing requests for mutual legal assistance in civil 
matters. The employees in the international legal aid department attended a workshop on the 
application of the Hague Conventions. 

There were 429 incoming and 141 outgoing requests for mutual legal  assistance in  criminal 
matters.  During  2021, 
the  country  has  not  sent  out  nor  received  any  requests 
for the transfer of sentenced nationals back to their country of origin or extradition requests. 

Staff  in  the  Department  for  Mutual  Legal  Assistance  attended  English  courses.  One  of 
employees  in  the  unit  for  criminal  matters  is  the  EUROJUST  contact  point  and  another  is 
the  European  Judicial  Network  (EJN)  contact  point.  The  country  has  appointed  a  liaison 
prosecutor  for  EUROJUST,  who  works  only  part  time.  The  country  participated  in  32  new 
cases at EUROJUST, most of them relating to organised property crime, money laundering, 
terrorism  and  swindling  and  fraud.  Steps  were  taken  to  establish  cooperation  with  the 
European Public Prosecutor’s Office (EPPO). 

Legal and irregular migration 

Institutional set-up and legal alignment  

The legal framework is largely in line with EU standards. The declaration of a state of crisis at 
the  country’s  borders  was  extended  until  the  end  of  2022,  allowing  for  the  continued 
deployment of the army. The Ministry of Interior is the main actor in the field of migration. 
The fragmentation of tasks between the institutions dealing with migration persists, making 
management  less  effective.  In  December  2021,  Parliament  adopted  a  new  Resolution  on 
Migration  Policy  and  its  Action  Plan  (2021-2025)  which  defines  the  country’s  strategic 
directions and measures in migration management. The country’s new migration profile 2021 
was developed, which includes relevant statistics on legal and irregular external migration and 
on internal migration, as well as analysis based on the perception of migration trends in the 
last decade (2009-2019). The new strategy for integration of refugees and foreigners is still 
pending adoption, as there is no political will to move it forward. The implementation of the 
National  Strategy  for  Cooperation  with  Diaspora  2019-2023  should  be  enhanced.  The 
readmission agreements with EU countries continue to be implemented.  

Implementation and enforcement capacity  

North  Macedonia  continues  to  play  an  active  role  in  the  management  of  mixed  migration 
flows on one of the main transit routes for irregular mixed movement. The contingency plan 
to manage large migratory flows still needs to be finalised and adopted. With the support of 
guest  officers  from  EU  Member  States,  effective  control  at  the  southern  border  has  been 
ensured.  

While  the  registration  of  migrants  apprehended  in  the  country  resumed  at  the  beginning  of 
2021,  the  lack  of  proper  protection-sensitive  profiling  and  referral  to  national  protection 
mechanisms  of  all  persons  identified  as  needing  international  protection  or  having  other 
protection  needs  remains  a  concern.  Registration  of  migrants  needs  to  be  carried  out  in  a 
systematic manner and protection-sensitive profiling needs to be improved. With the support 

43 

 
 
of the national authorities, European Border and Coast Guard Agency developed an in-depth 
assessment  (Masterplan)  for  North  Macedonia,  providing  a  comprehensive,  detailed  and 
feasible  implementation  plan  for  the  development  of  IT  systems  and  communication 
infrastructure for the identification and registration of mixed migration flows in line with EU 
requirements to support future interoperability with EU large-scale IT systems. In the absence 
of  effective  readmission  arrangements  with  the  neighbouring  countries,  the  practice  of 
returning  apprehended  migrants  outside  of  the  legal  and/or  procedural  framework  to 
neighbouring countries continued and should be discontinued as a matter of priority. There is 
a  systematic  substantial  discrepancy  between  the  figures  of  reported  irregular  crossings  and 
presence in the transit centres, which are often almost empty.  

Irregular movements through the territory  continued at a decreased pace  compared with  the 
previous  years.  The  number  of  irregular  arrivals  in  2021  was  20  874  persons,  compared  to 
41 257 persons recorded in 2020, traveling predominantly from Greece towards Serbia (some 
86 %), with the nationals of Pakistan (34 %) and Afghanistan (22 %) constituting the largest 
groups,  mainly  single  males.  People  in  irregular  movement  remain  targets  of  organised 
criminal  groups  engaged  in  people  smuggling,  that  often  extort  money  and  abuse  them  in 
various ways. They are at risk of human rights violations along the route. Five migrants died 
in 2021 while on the move in the country. 

Although  police  operations  were  carried  out  and  some  arrests  took  place,  smuggling  of 
migrants continues. 64 cases of smuggling of 815 migrants were detected. In comparison to 
2020 the detected cases of migrant smuggling showed a decrease of 33 %, and there is also a 
decrease  of  more  than  70 %  with  regard  to  smuggled  migrants.  The  number  of  migrants 
smuggled remains high and combating smuggling networks must be improved as a priority.  

Two  temporary  transit  centres  at  the  borders  are  still  in  function,  offering  short-term 
accommodation for a total number of 2 810 persons (798 in Vinojug and 2 012 in Tabanovce) 
in  2021.  Neither  of  the  transit  centres  are  suitable  for  long-term  stays,  and  the  authorities 
continue to be reluctant to provide for more than a temporary stay. The running costs of both 
centres  continues  to  be  covered  from  non-governmental  sources.  The  legal  status  of  both 
centres remains a serious gap that has led to the adoption of several practices not in line with 
legal standards. There is no procedure or judicial oversight of the decision for accommodating 
migrants  in  Vinojug  that  became  a  closed  centre,  with  limited  freedom  of  movement  for 
migrants.  In  2021,  the  national  authorities  also  used  Vinojug  to  de  facto  detain  migrants 
intercepted  during  the  smuggling  incidents  for  the  purpose  of  taking  their  statements  as 
evidence  before  the  Criminal  Court  (many  of  them  unaccompanied  minors),  while  those 
seeking  asylum  were  processed  within  3-4  days  and  transported  to  Vizbegovo  Reception 
Centre for Asylum Seekers. 

The readmission agreement with the EU is being implemented in a satisfactory manner by the 
country. In August 2021, the Protocol between the Government and the States of the Benelux 
on the Implementation of the Readmission Agreement. The implementing protocols with ten 
EU  Member  States  continue  to  be  efficiently  implemented.  In  2021,  the  decrease  in  the 
number of return decisions issued to nationals of North Macedonia continued. (2 200 in 2021 
compared to 2 360 in 2020, representing a 7% decrease), as well as in the number of people 
effectively returned (940 in 2021 compared to 1 445in 2000, representing a 35% decrease). In 
the first  six months of 2022, 940 citizens of North  Macedonia were ordered to  leave, while 
540 were effectively returned. 

In 2021, North Macedonia temporarily hosted some 633 evacuees/refugees from Afghanistan. 
The evacuees were hosted in local hotels, while awaiting resettlement to other countries. By 
the end of November, 85 evacuees/refugees were resettled.  

44 

 
 
As  of  March  2022,  North  Macedonia  has  started  hosting  refugees  from  Ukraine,  mostly  in 
private accommodation, who have been granted a temporary protection status.  

Refugees  from  Kosovo,  mainly  Roma  estimated  at  251,  remain  in  limbo  with  an  uncertain 
status. Except for a limited number (14) of recognised refugees, the rest have either subsidiary 
protection (87) or no status (150). While the national authorities are not returning or deporting 
them, they remain without status and without access to rights. After two decades of living in 
the country, with various statuses, there is a need for a sustainable solution. In 2021 through 
the assisted voluntary return and reintegration programme, a total of 6 third country nationals 
not  in  need  of  international  protection,  were  assisted  with  their  return  to  their  countries  of 
origin, including Türkiye, Armenia and Iraq. 

Asylum 

Institutional set-up and legal alignment  

The Law on international and temporary protection, is largely aligned with the EU acquis and 
relevant by-laws are in  place. A gap remains in the area of detention for people in irregular 
movement, as the current legislation does not provide alternatives to detention. The absence 
of personal identification numbers for asylum-seekers and persons under temporary protection 
remains  unaddressed  and  is  a  critical  gap  in  the  protection  of  rights  guaranteed  by  the  law, 
such  as  the  right  to  work,  opening  a  bank  account  and  managing  property,  certification  of 
education and others. The law provides the right for family reunification. Recognised refugees 
can benefit  from  it immediately but  concerns  remain regarding delayed  family  reunification 
for  people  under  subsidiary  protection,  for  two  years  following  status  recognition.  Since 
subsidiary  protection  is  becoming  a  prevalent  form  of  protection  granted  in  the  country, 
including for unaccompanied children, such delays may significantly affect the right to family 
unity and, in the case of children, contravene the principle of the best interest of the child.  

The  law  on  foreigners  allows  for  granting  long-term  residence  to  people  who  have  enjoyed 
international  protection,  thus  facilitating  their  local  integration.  However,  they  must  still 
present  proof  of  regular  income  and  a  registered  place  of  residence  to  benefit  from  this 
provision.  Given the extreme vulnerability of some applicants,  there is  a risk that the rights 
under  this  provision  remain  only  theoretical.  Such  requirements  are  especially  difficult  for 
Kosovo Roma who are still under subsidiary protection. Their status is  reviewed every  year 
and prevents them from acquiring long-term employment. 

Implementation and enforcement capacity  

The  implementation  of  the  asylum  procedure  is  not  yet  in  line  with  the  EU  acquis.  The 
arbitrary detention of people apprehended in irregular movements in the reception centre for 
foreigners in the Gazi Baba municipality to ensure their testimony as witnesses in court cases 
against smugglers continued. This practice is not in line with international standards. During 
2021, a total of 197 adults (171 men and 26 women) were detained in the centre for foreigners 
in  Gazi  Baba  as  well  as  18  minors  (3  accompanied  and  15  unaccompanied).  Following  a 
government decision of October 2021 to suspend construction activities for the new reception 
centre  for  foreigners  in  Bardovci,  no  new  location  was  found  for  this  building.  The  only 
remaining facility of this type is the old reception centre for foreigners in Gazi Baba. Regular 
reception  capacity  remained  unchanged  and  is  adapted  to  current  needs.  The  authorities  did 
not put in place alternative state-run accommodation facilities for persons with specific needs. 
In  2021,  the  time  spent  in  detention  was  between  29  and  50  days  on  average,  which  is 
considered  as  too  lengthy.  There  is  still  no  effective  judicial  control  over  the  detention 
practices  and  migrants  in  detention  do  not  benefit  from  legal  counselling  and  assistance  to 
have effective access to justice and legal remedies. 

45 

 
 
Access to the asylum procedure continued to be ensured. In 2021, 100 applications for asylum 
were  submitted  (a  decrease  in  comparison  to  211  in  2020),  out  of  which  22 %  from  Syria, 
16 %  from  Pakistan,  9 %  from  Türkiye,  7 %  from  Cuba  and  5 %  from  Chechnya.  Asylum 
claims  were  promptly  registered  and  processed.  By  the  end  of  2021,  the  Sector  for  Asylum 
conducted  25  online  asylum  interviews,  granted  subsidiary  protection  to  four  persons  and 
rejected  23  persons,  while  the  procedures  for  the  others  were  discontinued  as  the  asylum-
seekers  had  absconded.  Refugee  status  has  not  been  granted  to  anyone  since  2016.  The 
existing database on foreigners still needs to be upgraded through the development of a new 
asylum module, which should provide a case-management tool for processing asylum claims. 
There  is  no  backlog  of  asylum  cases,  and  the  majority  of  cases  are  discontinued  due  to  the 
high rate of claim abandonment.  

Despite  some  progress,  the  quality  of  asylum  decisions  remains  of  concern.  Most  of  those 
granted  subsidiary  protection  are  vulnerable  persons  and  unaccompanied  and  separated 
children  without  a  proper  consideration  of  the  merits  of  the  claim  but  rather  of  the 
humanitarian needs. The length of the entire asylum procedure may last several years, which 
is  not  efficient.  Inter  alia,  credibility  assessments,  the  legal  reasoning  of  decisions,  the 
individual assessment of the personal circumstances of the applicants, the correct assessment 
of  relevant  and  updated  country  of  origin  information,  and  the  prioritisation  of  manifestly 
founded cases remain to be addressed. Although guaranteed by law, no favourable procedure 
has been implemented in relation to persons with specific needs. 

The  Administrative  Court  and  the  High  Administrative  Court  continue  to  take  decisions  on 
procedural  grounds rather than on the merit of the asylum claims. The cases returned to the 
administrative  authority  remain  unchanged  despite  the  court  ruling.  Therefore,  the  asylum 
procedure  is  prolonged  with  no  effective  remedy.  The  in-person  hearing  of  attorneys  and 
asylum officials, but not of the asylum-seekers, continued. Decisions on status determination 
are  usually  accompanied  by  an  automatic  ruling  of  expulsion  without  quality  assessment  of 
whether an individual may be subject to persecution upon return. 

In 2021, the Sector for Asylum continued the practice of terminating international protection 
for  refugees  from  Kosovo  who  were  granted  subsidiary  protection.  Between  January  and 
December  2021,  43  Kosovo  Roma  (21  cases)  lost  subsidiary  protection.  Such  practices 
undermine  the  possibilities  of  finding  a  lasting  solution  for  the  remaining  refugees  from 
Kosovo and closing this long-standing issue. There are no state-funded interpretation services 
provided at any stage of the asylum procedure or for any language, and this represents a major 
gap in the asylum procedure. Free legal aid foreseen under the amended Law on Free Legal 
Assistance remained unavailable.  

In  2021,  the  government  continued  to  enrol  asylum-seeking  children  in  primary  education 
shortly  after  their  arrival.  However,  proper  inclusion  in  the  educational  process  needs  to  be 
addressed, providing that children undergo a procedure to determine their level of knowledge 
as  foreseen  by  the  Law  on  Primary  Education  and  are  placed  in  the  appropriate  education 
level. In addition, no systematic Macedonian language and extracurricular classes are offered 
to  foster  an  easy  transition  between  education  levels,  including  secondary  education.  Older 
children continue to miss education opportunities due to these gaps. Teachers should benefit 
from support and guidance in working with refugee children.  

High level political will is needed to implement further improvements in the asylum system. 
The  country  cooperates  with  the  European  Union  Agency  for  Asylum  (EUAA)  through 
implementation  of  a  comprehensive  Roadmap  to  support  the  establishment  of  asylum  and 
reception systems in line with EU standards for the period 2020-2022. 

46 

 
 
Visa policy 

The visa regime is largely aligned with that of the EU. The Commission’s fourth Report under 
the Visa Suspension Mechanism11 of August 2021 concluded that North Macedonia continues 
to meet the visa liberalisation benchmarks. The national legislation is not fully in line with the 
EU list of countries whose nationals are subject to a visa for short stays in the EU. Short stay 
visas have been unilaterally abolished for nationals of third countries who are national holders 
of  a  permanent  or  temporary  residence  permit  issued  by  an  EU/Schengen  Member  State  as 
well as for nationals of third countries who are in possession of valid multiple US, Canadian 
and UK visas. North Macedonia has re-introduced the visa requirement for Russian nationals 
in March 2022. 

The  visa  policy  needs  to  be  further  aligned  for  a  number  of  countries  currently  on  the  EU 
visa-free list, whose nationals are still required to have a visa to enter North Macedonia.  

Schengen and external borders  

Institutional set-up and legal alignment  

The Department of Border Affairs and Migration is a specialised unit within the Ministry of 
Interior.  The  border  police  is  structured  into  four  regional  centres,  within  which  police 
stations for border surveillance and for border checks operate. 

The legislative framework for the management of external borders is largely aligned with EU 
standards. The National Strategy for Integrated Border Management 2022-2025 was adopted 
in 2022 and is aligned with the 2006 EU concept on integrated border management. The Law 
on Border Control remains to be amended in order to align it with Directive 2016/681 on the 
use  of  passenger  name  record  (PNR)  data  for  the  prevention,  detection,  investigation  and 
prosecution of terrorist offences and serious crime. 

Implementation and enforcement capacity  

Mixed  police  patrols  are  deployed  at  the  southern  border  involving  members  of  the  border 
police  of  Austria,  Croatia,  Czechia,  Hungary,  Poland,  Slovenia,  Slovakia  and  Serbia,  to 
manage  migration  flows.  The  national  authorities  cooperate  with  the  European  Border  and 
Coast  Guard  Agency  (Frontex)  and  participate  in  joint  operations.  In  August  2022,  the 
Commission  negotiated  a  status  agreement  with  North  Macedonia  that  is  expected  to  be 
signed  before  the  end  of  the  year.  In  the  meantime,  the  country  cooperates  with  Frontex  in 
developing an operational plan, allowing for the rapid deployment of teams in the country. 

North  Macedonia’s  National  Coordination  Centre  for  cooperation  in  the  field  of  external 
border  surveillance  is  partially  operational  with  more  progress  required  on  institutional  and 
operational capacity, IT and technical expertise. 

Cooperation  with  neighbouring  countries  continues  to  be  good.  There  is  a  smooth 
implementation of border agreements with most neighbouring countries. Joint border patrols 
with  neighbouring  countries  and  the  joint  police  contact  centres  continued  to  regularly 
exchange information. There were mixed patrols with Albania, Serbia and Kosovo. There are 
currently  two  common  border-crossing  points  for  local  traffic  with  Serbia  and  one  with 
Albania 

All aspects of customs cooperation are now covered under Chapter 29 – Customs Union.  

11  COM(2021) 602 final  

47 

 
 
 
                                                           
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,  which  sets  out  a  medium-term  macro-fiscal  policy  framework  and  a  structural 
reform  agenda  aimed  at  ensuring  competitiveness  and  inclusive  growth.  The  ERPs  are  the 
basis for country-specific policy guidance jointly adopted by the EU and the Western Balkans 
and Türkiye at ministerial level in May each year.' 

2.3.1. The existence of a functioning market economy 

North  Macedonia  has  made  some  progress  and  is  at  a  good  level  of  preparation  in 
developing a functioning market economy. In 2021, the economy largely recovered from the 
COVID-19 crisis, partly reflecting fiscal support measures implemented to help the recovery. 
Simultaneously, the government stepped up public investment although capital spending still 
lagged behind plans. Helped by rebounding tax revenue, the fiscal deficit declined to 5.4 % of 
GDP in 2021, while the general government and the public debt levels stabilised after a large 
increase  in  2020.  With  the  rise  in  food  and  energy  prices  accelerating  in  early  2022,  the 
government  adopted  a  new  set  of  fiscal  measures  to  contain  the  negative  impact  on  the 
economy. These measures were though not well targeted to those most in need. The central 
bank tightened its policy stance in view of rising inflationary pressures. 

Important  policy  reforms  to  improve  fiscal  governance  and  the  sustainability  of  public 

48 

201920202021North Macedonia - Key economic figuresGDP per capita (% of EU-27 in PPS)1)37383742Real GDP growth 2.93.2-6.14.0Economic activity rate of the population aged 15-64 (%), total1)65.166.365.565.5      female52.054.854.053.4      male77.877.376.777.1Unemployment rate of the population aged 15-64 (%), total1)25.217.416.615.8      female24.718.616.114.7      male25.516.616.916.6Employment of the population aged 15-64 (annual growth %)2.55.4-0.50.2Nominal wages (annual growth %)2.55.18.35.7Consumer price index (annual growth %)0.80.81.23.2Exchange rate against EUR61.5861.5161.6761.63Current account balance (% of GDP)-1.3-3.3-3.4-3.5Net foreign direct investment, FDI (% of GDP)3.03.21.53.7General government balance (% of GDP)-3.1-2.0-8.2-5.4General government debt (% of GDP)38.340.551.951.8Notes: 1) EurostatSource: national sourcesTable 3.1:2013-18 average 
 
 
finances  stalled.  The  management  of  public  investment  remains  to  be  improved;  the  new 
framework  for  governing  public-private  partnerships  has  not  yet  been  adopted  by  the 
government;  and  the  indexation  of  pensions  has  been  changed  to  also  reflect  wage 
developments  alongside  inflation,  implying  further  expenditure  pressures  on  the  already 
strained Pension Fund. After long delays, the new Organic Budget  Law, which provides for 
fiscal rules and a fiscal council, was adopted by the Parliament in mid-September. 

The  banking  sector  remained  sound,  liquid  and  profitable,  and  financial  stability  was 
bolstered by progress on some key legislation. Credit growth to the private sector accelerated, 
in particular to companies. Regulatory measures to ease borrowing requirements were phased 
out  in  2021.  The  business  environment  continued  to  be  impeded  by  the  large  size  of  the 
informal economy and slow progress in streamlining para-fiscal charges. 

As  the  recommendations  of  last  year  were  partly  implemented  and  in  order  to  improve  the 
functioning of the market economy, North Macedonia should in particular: 

  Improve  the  targeting  of  fiscal  support  to  help  vulnerable  households  and  companies 
facing rising food and energy prices and ensure its the temporary nature; improve revenue 
collection  and  broaden  the  tax  base  in  line  with  the  Tax  System  Reform  Strategy, 
including by streamlining tax exemptions; 

  Implement  the  Organic  Budget  Law  and  ensure  the  timely  establishment  of  the  Fiscal 

Council; 

  To improve the business environment, widen the range of services available for businesses 
and citizens on the government’s e-portal and streamline para-fiscal charges in line with 
the established inventory. 

Economic governance 

The government provided large-scale fiscal support to the economy to cope with rising 
price  pressures,  but  progress  on  important  reforms  was  slow.  While  continuing  to 
implement  pandemic-related  anti-crisis  measures  from  six  packages  adopted  in  2020  and 
2021, the government agreed on a new set of measures, in March 2022, to ease the burden of 
high food and energy prices on the economy. At the same time, it bolstered public investment, 
by raising capital expenditure in 2021 and launched a new Growth Acceleration Plan for the 
period 2022 to 2026, which foresees sizeable public investment to leverage additional private 
financing.  Yet,  some  important  reforms  have  progressed  only  slowly  or  stalled,  such  as 
improvements  in  public  investment  management;  the  broadening  of  the  tax  base;  the 
establishment  of  a  fully  functioning  state-aid  registry;  and  the  adoption  of  a  new  legal 
framework for public-private partnerships. The new Organic Budget Law, which provides for 
fiscal rules, a fiscal council and a proper medium-term budgetary framework was submitted to 
the Parliament in December 2021 and was finally adopted in mid-September 2022. There was 
reform reversal with regard to the move back to a price and wage-linked indexation formula 
for pensions, which is likely to raise the pensions bill considerably.  

The  policy  guidance  jointly  agreed  at  the  July  2021  Economic  and  Financial  Dialogue 
between the EU and the Western Balkans and Türkiye has  been partially implemented. The 
government  fulfilled  all  conditions  for  the  disbursement  of  the  second  tranche  (EUR  80 
million)  of  macro-financial  assistance  from 
the European Union. 

Macroeconomic stability 

Domestic  demand  recovered 
in  2021 
amidst  accelerating  inflation.  After  output 

49 

 
 
dropped  by  6.1 %  in  2020,  the  economy  rebounded  by  4 %  in  2021,  driven  by  domestic 
demand.  Remittances  from  abroad  returned  to  pre-crisis  levels,  bolstering  household’s 
disposable  income,  and  wage  subsidies  from  the  government  helped  to  keep  employment 
stable.  COVID-19-related  containment  measures  were  gradually  lifted.  Growth  dynamics 
slowed  down  towards  the  end  of  2021,  as  external  demand  weakened,  disruptions  in  global 
supply  chains  aggravated,  and  food  and  energy  prices  started  to  rise  rapidly.  Due  to  strong 
import growth, driven by steeper global commodity prices as well as reinvigorated domestic 
demand, net exports’ contribution to GDP growth turned negative in 2021. In the first half of 
2022,  annual  GDP  growth  averaged  2.6%,  driven  partly  by  a  robust  rise  in  investment. 
Convergence  with  EU  income  levels  has  remained  sluggish.  Real  GDP  per  capita  has 
increased only marginally in the past five years, from 36 % of the EU-28 average in 2015 to 
38 % in 2020. 

The external position started to deteriorate in late 2021, as the post-pandemic recovery 
strengthened  while  import  prices  rose  sharply.  In  2021,  the  current  account  deficit 
remained  at  the  same  level  as  one  year  earlier,  at  3.5 %  of  GDP,  above  its  average  of  the 
period 2017 to 2019 (1.5 %). However, since the last quarter of 2021, the merchandise trade 
balance  has  deteriorated  steadily,  largely  on  account  of  rising  energy  prices,  reflecting  the 
country’s  high  dependence  on  energy  imports.  This 
led to a widening in the current account deficit, even 
though  private  transfers  from  abroad,  including 
workers’  remittances,  picked  up  markedly  in  2021 
and  beyond,  after  their  pandemic-related  decline  in 
2020,  and  the  surplus  in  the  services  balance 
increased, as  containment  measures were lifted.  The 
shortfall in the current account in 2021 was covered 
by  net  FDI  inflows,  which  reached  3.7 %  of  GDP, 
from a low 1.5 % in 2020, hence surpassing their average in the period 2017 to 2019 (3.5 %). 
After having decreased each year between 2016 and 2019, the external debt ratio jumped by 
7.3pps in 2020 to 80.3 % and it rose further to 81.4 % in 2021, mainly as a result of continued 
foreign  financing  for  crisis-induced  needs.  However,  the  structure  of  the  debt  implies 
moderate  risks.  Long-term  debt  makes  up  about  70 %  of  the  total,  and  the  share  of 
intercompany  debt  and  trade  credits,  which  constitute  less  volatile  components  of  foreign 
debt, is high.  

Foreign  reserves  came  under  pressure  in  early  2022  which  abated  somewhat  over  the 
summer.  Foreign  reserves  were  bolstered  in  2021  (+8.4 %  year-over-year  at  end-2021, 
representing  five  months  of  prospective  imports)  by  financial  inflows,  including  the  second 
tranche  of  macro-financial  assistance  from  the  European  Union,  a  pickup  in  foreign  direct 
investment, as well as portfolio inflows. However, in the first quarter of 2022 and beyond, due 
to  a  large  increase  in  the  energy  trade  deficit,  domestic  conversion  pressures  into  euro-
denominated  assets,  and  public  debt  repayments,  foreign  reserves  declined.  Partly  due  to  a 
seasonal increase in private transfers, reserves increased slightly over the summer. However, 
at end-August they were still lower by 9.8 % compared to end-2021.  

The  central  bank  continued  its  accommodative  monetary  policy  in  2021,  but  started 
tightening in early 2022, in light of accelerating inflation. The central bank raised the key 
policy rate four times between April and July 2022, from the historic low of 1.25% to 2.5%, 
effectively putting an end to its accommodative 
policy  stance  during  the  pandemic.  Beginning 
in late 2021, import price increases accelerated, 
firmed  up, 
and  domestic  price  pressures 

50 

 
 
including  from  sustained  wage  growth,  which  was  further  fuelled  by  an  18.5 %  hike  in  the 
minimum  wage  as  of  March  2022.  The  consumer  price  index  rose  by  3.2 %  in  2021, 
compared  to  1.2 %  in  2020,  with  increases  accelerating  further  each  month  since  the 
beginning  of  2022,  to  an  average  of  11.6 %  in  the  first  eight  months.  The  currency  is  in  a 
stable,  de  facto  pegged  exchange  rate  regime  with  the  euro.  Concerns  arose  about  the 
operational independence of the central bank, as it has not been exempted from the draft laws 
on  administrative  servants  and  the  law  on  public  sector  employees.  Overall,  the  monetary 
policy  stance  has  been  in  line  with  current  economic  fundamentals,  responding  to  market 
expectations of further rising inflation, while mitigating the negative impact on the economy 
stemming from the pandemic and the energy crisis.  

Public finances improved in 2021, as tax revenue recovered.  In the 5 years preceding the 
pandemic,  the  general  government  fiscal  deficit  was  declining  each  year,  in  terms  of  GDP, 
partly  on  the  back  of  under-execution  of  budgeted  capital  expenditure,  before  jumping  to 
8.2 %  of  GDP  in  2020  as  the  COVID-19  crisis  hit  public  finances.  Driven  by  higher  tax 
income, public revenue recovered gradually through 2021 from the pandemic-related trough. 
Capital spending, at 79 % of the revised budget, was, again, severely under-implemented, yet 
much  increased  compared  with  2020.12  The  deficit  (5.4 %  of  GDP)  remained  below  the 
revised target, and substantially below the 2020 deficit. Implementation of measures in 2021 
from the six sets of anti-crisis measures amounted to some 2.5 % of GDP. The 2022 budget 
foresees a gradual phasing out of pandemic-related support amidst a large increase in capital 
expenditure.  In  March  2022,  the  government  adopted  measures  totalling  some  EUR  400 
million,  to  mitigate  the  negative  economic  impact  from  rising  food  and  energy  prices.  This 
includes transfers to the state-owned electricity producer to subsidise prices on the regulated 
market,  as  well  as  temporary  reductions  in  the  VAT  rate  on  fuel,  gas  oil  and  liquified 
petroleum gas (LPG) from 18% to 10 % (these measures expired on 1 June), and an extension 
of the lower VAT rate on electricity, delaying the gradual return to the regular 18 % rate,13 as 
well  as  a  temporary  zero  rate  on  basic  food  products.  To  accommodate  this  package,  the 
government,  in  May  2022,  revised  the  budget,  raising  the  deficit  target  to  5.3 %  (+1pp 
compared to the original 2022 budget), in spite of an inflation-driven boost to tax income in 
the first quarter.  

Debt  levels  stabilised  in  2021  after  the  pandemic-induced  surge  in  2020.  Both  general 
government debt and public debt declined marginally in 2021 as a share of GDP. Government 
debt amounted to 51.8 % of GDP at end-2021 (-0.1pp y-o-y), after surging by 10.4pps y-o-y 
in  2020.  The  share  of  foreign  currency  debt  increased  in  both  years,  because  financing 
requirements were covered to a large part through borrowing abroad. Apart from funding the 
still  elevated  budget  deficit  in  2021,  the  government  needed  to  roll  over  a  Eurobond  worth 
EUR  500  million,  which  it  had  refinanced  through  a  new  Eurobond  issued  in  March  2021 
(EUR 700 million). With no Eurobond maturing, debt rollover needs are benign in 2022, but 
financing the still elevated budget  deficit requires careful debt  management amid tightening 
global financial conditions.  

Deficiencies  in  public  finance  management  remain.  Shortcomings  in  revenue  collection 
and a large number of tax exemptions  eroding the tax base have contributed to  a decline in 
public  revenue  ratios  in  recent  years.  The  rising  pensions  bill  poses  further  risks  to  fiscal 
sustainability,  exacerbated  by  the  recent  change  in  the  indexation  formula,  a  steep  rise  in 

12 However, this does not account for capital expenditure carried out by off-budget entities, the most significant 
one  being  the  Public  Enterprise  for  State  Roads,  which  is  implementing  a  sizable  multi-year  investment 
programme of over EUR 1 billion. Central and local government habitually accounts for about one third of total 
public sector investment. 
13 The planned increase from 5 % to 10 % has been postponed from July to December 2022. 

51 

 
 
                                                           
minimum wages, and a one-off pension increase in the first half of 2022. Further fiscal risks 
emanate from the recent resurgence of high budget arrears in the health sector.  

Implementation  of  fiscal  governance  reforms  has  been  sluggish.  Implementation  of  the 
Action Plan for improving public investment management (PIM) is heavily delayed, including 
the  setting  up  of  a  dedicated  PIM  unit  in  the  Ministry  of  Finance.  A  draft  law  on  public-
private partnerships (PPPs) to address shortcomings in the current framework governing PPPs 
and concessions, was finalised in 2021, but is still awaiting adoption by the government. The 
law,  which  also  provides  for  improved  monitoring  of  fiscal  risks  arising  from  PPPs,  would 
facilitate the planned increase in  public investment.  The  government  did  not  progress  much 
on  the  implementation  of  its  March  2021  Action  Plan  operationalising  the  2020-2023  Tax 
System  Reform  Strategy.  Rather,  the  tax  base  was  further  narrowed  through  new,  partly 
permanent  exemptions,  such  as  for  personal  income  tax  in  the  IT  industry.  In  August,  the 
government announced plans for tax reforms aimed at expanding the tax base, including the 
introduction of progressive income taxation, to be implemented in the period 2023-25. 

Progress  on  the  implementation  of  the  Organic  Budget  Law  is  slow.  The  new  Organic 
Budget  Law  was  adopted  by  the  Parliament  in  September  2022  after  a  lengthy  procedure, 
requires  substantial  secondary  legislation,  the  development  of  which  is  only  in  its  initial 
phase.  Moreover,  its  implementation  depends  heavily  on  the  introduction  of  the  new 
integrated IT system (IFMIS), which is yet to be established as well.   

The policy mix aimed to cushion the impact of the pandemic and the rise in the cost of 
living, but fiscal support could have been better targeted in view of the available fiscal 
space.  With  pressures  on  the  budget  increasing,  broad-based  fiscal  support,  such  as  tax 
exemptions for energy products, poses a risk to fiscal sustainability. The government faces the 
challenge of targeting support to vulnerable households and companies, and to keep support 
temporary.  Shortcomings  in  the  planning,  implementation,  and  monitoring  of  measures,  as 
well  as  in  their  transparency  and  accountability,  impact  on  their  effectiveness.14  The 
government also needs to envisage a gradual return to fiscal consolidation once the recovery 
is  firmly  entrenched.  The  recent  tightening  of  monetary  policy  was  appropriate,  in  light  of 
increasing price pressures.  

Functioning of product markets 

Business environment 

Streamlining  the  array  of  para-fiscal  fees  has  progressed  slowly.  After  the  government 
took a first step in early 2021 towards reducing the number of para-fiscal fees, the process of 
assessing  and optimising  the published list  of 377 charges at  central  and  local  level  has not 
progressed  much.  The  implementation  of  other  key  measures  to  improve  the  business 
environment  is  also  protracted,  such  as  the  implementation  of  the  2019  Law  on  inspection 
supervision and implementing transparent and consistent procedures for inspections. The new 
bankruptcy law, intended to facilitate market exit by reducing the cost and time of procedures, 
has  not  yet  been  adopted.  The  use  of  fast-track  procedures  for  public  consultation  has  not 
abated,  while  quality  control  and  ex  post  follow  up  to  consultations  remains  deficient.  The 
scope  of  digital  services  available  on  the  national  e-service  portal  with  full  electronic 
interaction  has  not  much  increased,  with  implementation  suffering  from  low  institutional 
capacity.  In  general,  the  government’s  approach  to  simplifying  the  business  environment  is 
not sufficiently systematic and consistent. 

14 See also the findings of the April 2022 Performance Audit Report on the government’s COVID-19 measures 
by the State Audit Office of North Macedonia.  

52 

 
 
                                                           
Challenges posed by the large informal economy are not addressed in a decisive manner. 
The  informal  economy  continues  to  pose  an  important  obstacle  to  business  operations  for 
regulated firms. According to IMF estimates, it could account for as much as 38 % of GDP.15 
Implementation  of  the  government’s  Strategy  and  Action  Plan  to  combat  the  informal 
economy remains sluggish, in particular regarding the formalisation of undeclared workers. In 
October 2021, the government adopted a report assessing the implementation of this Plan, and 
also  adopted  a  new,  2021-2022  Action  Plan.  The  country’s  informal  sector  takes  various 
forms, of which the most prominent are unregistered labour, partially undeclared wages and 
other irregularities in the enforcement of the Labour Relations Act.  

State influence on the product market 

Transparency  and  efficiency  of  state  aid  remains  deficient.  State  aid  was  stepped  up  in 
2020  (7.9 %  of  GDP)  and  2021  (6.8 %),  compared  to  the  pre-COVID-19  period  (average 
2017-2019: 5.3 %), but its governance deteriorated further. While the authorities have ensured 
public  dissemination  of  information  related  to  the  adoption  of  the  COVID-19  support 
measures,  including  through  a  dedicated  webpage,  the  information  provided  remains 
incomplete  and  the  criteria  for  the  selection  of  beneficiaries  are  often  unclear.  Anti-crisis 
measures  suffer  from  inadequate  planning,  implementation  and  monitoring,  as  well  as 
transparency and accountability. There is little  ex-ante analysis of potential impact and little 
ex-post efficiency evaluation, as the April 2022 report from the State Audit Office found. The 
government also provided liquidity support to companies, in the form of interest-free credit. 
Overall, transparency and effectiveness of state aid is affected by the high number of state aid 
providers,  the  lack  of  an  updated  registry,  and  the  still  marginal  competences  of  the 
Commission  for  the  Protection  of  Competition  (CPC)  in  state  aid  supervision.  As  a 
precondition  for  the  establishment  of  a  state  aid  registry,  the  government  is  setting  up  a 
management information system connecting different  institutions, but  overall, the process  is 
delayed. The energy market was fully liberalised in 2019. However, in 2021, reforms in the 
energy sector slowed down since there was no tangible progress, either in the unbundling of 
the gas transmission system operator GA-MA AD, although a long-standing dispute over its 
ownership  was  finally  settled.  In  2021,  53.5 %  of  the  electricity  needs  are  provided  on  the 
open electricity market. This share increased compared to 52.24 % in 2020. Over 20 000 retail 
customers switched suppliers in 2021.  

Privatisation and restructuring 

The public sector’s stake in the economy remains low. In 2021, the number of companies 
in  full-state  ownership  went  up  by  one  (GA-MA  AD  Skopje,  gas  transmission),  to  17, 
compared  to  the  three  preceding  years.  The  number  of  companies  in  partial  ownership 
decreased by one, to 39, most of these with a state ownership share of below 1 % of issued 
capital).16 The total value of state ownership in enterprises amounted to some 10 % of GDP. 
There are currently no plans for further privatisations.  

Functioning of the financial market 

Financial stability 

The  banking  sector  remained  sound  throughout  the  crisis.  Banks  are  well-capitalised, 
liquid and profitable. The capital adequacy ratio increased further in 2021 and was above its 
level of five  years earlier (+2.1 pps. at 17.3 % of risk-weighted assets), much exceeding the 

15 The IMF figure is at the upper range of estimates. 
16  The  figures  are  based  on  information  from  the  government.  A  new  harmonised  and  internationally 
standardised  Global  Database  of  State-Owned  Enterprises  (SOEs)  by  the  World  Bank  shows  that  there  are  88 
SOEs, of which 35 owned by the Government of North Macedonia at 100 percent ownership. 

53 

 
 
                                                           
regulatory  minimum.  Liquid  assets  accounted  for  over  one  third  of  total  assets  at  end-2021 
and  covered  more  than  half  of  short-term  liabilities.  Return  on  equity  (12.9 %)  was  higher 
than one year earlier. Bank funding was stable, with the loan-to-deposit ratio unchanged year-
on-year (82 %). However, financial diversification progresses slowly, with banks accounting 
for  some  80.5 %  of  financial  sector  assets  at  end-2020,  lower  by  5.3pps.  compared  to  end-
2015. The share of foreign equity in total bank equity has been consistently high in the past 
five years, at about 75 %.  

Demand  for  foreign  currency  deposits  remains  strong.  The  appetite  of  savers  for  euro-
denominated deposits, induced by, first, the COVID-19 crisis, followed by the energy crisis, 
continued.  The  share  of  foreign  currency  in  total  bank  deposits  has  increased  each  quarter 
since end-2020, amounting to 47.4% at the end of the first quarter 2022 (+5.2pps. year-over-
year).  This  prompted  monetary  authorities,  in  late  March  2022,  to  amend  reserve 
requirements,  in  order  to  promote  local  currency  deposits  in  line  with  its  2018  denarisation 
strategy. The share of foreign-denominated in  total  loans, on the other hand, dropped in  the 
same period. The ratio of non-performing loans (NPL in total loans to the non-financial sector 
has been decreasing continuously since the end of 2013, to a record low of 3.1 % at the end of 
the  first  quarter  2022.  Households  and  corporates  benefitted  from  regulatory  easing  with 
regard to lending, including measures enabling banks to approve a temporary moratorium on 
loan repayments, which were phased out in 2021.  

Steps have been taken to strengthen the institutional framework for ensuring financial 
stability.  Amendments  to  the  Financial  Stability  Law,  which  would  assign  the  central  bank 
the  leading  role  in  developing  and  implementing  macro-prudential  and  financial  stability 
policies  remain  to  be  adopted.  A  regulation  to  facilitate  the  sale  of  NPLs  was  adopted  in 
March  2022.  Improved  instruments  to  deal  with  NPLs  are  vital,  as  the  economy  might  still 
face  a  rise  in  NPL,  following  regulatory  normalisation  and  renewed  cost  pressures  on 
companies from rising import prices and the war in Ukraine. Also, in July 2022, the National 
Bank adopted a decision to  increase the countercyclical  capital  buffer to 0.5% as of August 
2023.  

With a view to improving financial literacy, the financial regulators, led by the central bank, 
adopted  the  first  national  Strategy  for  Financial  Education  and  Financial  Inclusion  in  2021. 
On  this  basis,  the  central  bank  adopted  a  Code  of  Good  Practices  for  Financial  Education, 
establishing  the  principles  to  be  respected  by  institutions  offering  financial  education 
programmes. 

Access to finance 

Bank lending has sped up, but financial deepening progresses only slowly. Central bank 
action  as  well  as  liquidity  support  from  the  government  have  eased  access  to  finance  for 
companies since the onset of the pandemic. Credit growth to the non-financial private sector 
picked up in 2021 (+0.3pps year-over year to 6.2 % on average), and accelerated further in the 
first  three  months  of  2022.  Unhabitually,  growth  in  lending  to  corporates  exceeded  the 
increase for households. Local currency lending rose faster than credit in foreign currency. At 
88.3 %, the ratio of total assets of the banking sector to GDP was below its level of one year 
earlier, but substantially above its level of end-2016 (74.8 %).  

Functioning of the labour market 

The recovery and government support measures have bolstered the labour market, but 
structural  problems  remain.  Wage  subsidies  and  liquidity  support  from  the  government 
bolstered labour market resilience also in 2021 and beyond. According to data for the second 
quarter  of  2022  from  the  Labour  Force  Survey,  which  has  been  based  on  the  results  of  the 

54 

 
 
2021 population  census  since the  first  quarter of 2022, the labour force (15-64) dropped by 
14.2 % year-over-year (end of second quarter 2022), while the activity rate rose by 0.9 pps in 
this period, to 66.4 %, implying a large drop in the 
working  age  population.17  The  number  of 
unemployed decreased even more sharply than the 
labour  force,  bringing  the  unemployment  rate 
down  to  14.7%  (-1.3pps.  year-over-year).  Labour 
market  participation  rates  rose  for  both,  men  and 
women.  Yet  the  gender  gap  widened  for  the 
second year in a row, after narrowing consistently 
between  2014  and  2019,  as  the  participation  rate 
for  men  rose  by  more  during  the  pandemic  than  the  rate  for  women.  The  gap  widened  by  
2.5pps,  to  25.8pps.  (end  of  second  quarter  2022),  compared  to  the  same  period  one  year 
earlier. Youth unemployment remains high, at 30.9 %, but is declining steadily (-6.9pps. year-
over-year. Compared to the first quarter of 2022, the unemployment rate for the age group 15-
24  years  declined  by  3.9pps,  with  the  labour  force  in  this  cohort  lower  by  7.9%.  Youth 
unemployment  has  declined  significantly  since  the  government’s  Youth  Guarantee  scheme 
entered into force in 2018. Around 80 % of unemployed are so long-term, largely reflecting 
an entrenched skills mismatch. Given limited human and financial resources in employment 
agencies, the government faces the challenge of better targeting the vulnerable unemployed, 
with  a  view  to  their  participation  in  active  labour  market  policies.  The  share  of  informal 
workers in  total  employees remained high, at  some 14 % in  2019, according to  government 
data, even though declining persistently since 2015. The average tax wedge is  regressive in 
North  Macedonia  at  the  bottom  of  the  income  distribution:  the  average  contribution  rate 
therefore takes a much higher share of the total income of low-wage earners.  

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

North  Macedonia  has  made  some  progress  and  is  moderately  prepared  to  cope  with 
competitive pressure and market forces within the Union. Integration with the EU in trade and 
investment remained at a high level in 2021, in spite of lockdowns and disruptions of supply 
chains  domestically  and  in  trade  partner  countries.  The  share  of  high-value  products  in 
exports  increased  further.  There  was  further  progress  towards  improving  vocational 
educational  training  (VET),  but  major  skills  shortages  persist  with  regard  to  labour  market 
needs, entailing long school-to-work transition. These, as well as large gaps in transport and 
energy  infrastructure,  coupled  with  low  investment  and  innovation  spending  are  restricting 
potential growth. The digitalisation of the economy is advancing, but the competitiveness of 
domestic businesses could be improved through a wider offering of public e-services. 

As some of the 2021 recommendations have not been fully implemented, most requirements 
stay the same and North Macedonia should in particular:  

  Increase financial and human resources to speed up reforms of the VET system; 

  Adopt and implement energy efficiency legislation, including implementing legislation to 

the energy efficiency law and enhance related human and technical capacity; 

  Set up an energy efficiency fund. 

17 The new census implies a structural shift in labour market data, impacting the results of the LFS. Hence, as the 
Statistical  Office  points out, this affects the comparability  with data  from preceding  years. Compared  with the 
first quarter 2022, the labour force (15-64) rose slightly in Q2, by 0.1pps, and the unemployment rate declined 
by 0.2pps., partly reflecting seasonal effects.  

55 

 
 
                                                           
Education and innovation 

Progress in reforming education curricula and reducing skills mismatches is hampered 
by lack of funding and capacity. While North Macedonia has progressed very well in terms 
of the number of people with  higher educational attainment,  curricula are not  well suited to 
equip  graduates  with  necessary  skills  to  match  labour  demand.  State  financial  support  for 
education  is  insufficient  and  coordination  between  the  education  sector  and  businesses  is 
weak.  In  2020,  public  spending  on  education  and  training  amounted  to  3.3 %  of  GDP, 
compared to an average of 3.7 % of GDP in the past five years. This is much below the EU-
level (5 %) and also below peer-country averages. It hinders an adequate implementation of 
the  2018-2025  education  strategy.  Moreover,  spending  is  highly  inefficient,  mainly  on 
account  of  outdated  formulas  for  the  redistribution  of  public  education  funds  by  the 
municipalities.  There  was  substantial  improvement  in  the  2018  PISA  ranking,  compared  to 
2015, but the country still ranks in the lowest quartile. Vocational training (VET) curricula are 
under  revision  since  2019,  so  as  to  adjust  them  to  labour  market  needs.  However,  the 
modernisation of the country’s three VET centers is hampered by slow parliamentary adoption 
of necessary legislation. Innovation activity remains, overall, low. At 0.4 % of GDP, including 
a small share from the private sector, the economy’s expenditure on research and innovation 
has  not  increased  over  recent  years,  and  remains  significantly  below  the  EU  average.  The 
country remains an emerging innovator, according to the EU innovation scoreboard.  

Physical capital and quality of infrastructure  

Investment  spending  remains  low  in  light  of  major  needs  to  increase  physical  capital. 
Gross capital formation (GCF) as a share of GDP rose to 33.8 % in 2021, up from 29.6 % in 
2020. The share of gross fixed capital formation (GFCF) in GCF amounted to 76 % in 2020, 
or  22 %  of  GDP  (compared  to  24 %  in  2015).  The  share  of  investment  in  construction  has 
been rising in recent years and made up about 29.5 % of GFCF in 2020, followed by industry 
(22 %).  Trade,  transportation,  food  and  services  accounted  for  17 %  of  GFCF.  In  terms  of 
ownership,  public  sector  investment  makes  up  about  22 %  of  the  total  amount  of  GFCF, 
mainly on account of road construction through the Public Enterprise for State Roads. In the 
face of the current energy crisis, as well as the protracted works on a number of major road 
and rail projects, the need to modernise the country’s capital stock, in particular the transport 
and energy networks, appears ever more pressing.  

Regional  transport  connectivity  progresses  slowly.  There  has  been  some  progress  on 
upgrading  major  road  sections  to  highway  level,  but  the  works  on  Rail  Corridor  VIII  to 
Bulgaria  are  still  stalled.  After  the  second  deadline  to  complete  the  construction  of  the 
Kicevo-Ohrid motorway was missed in June 2021, the period for completion was extended by 
another  two  years.  Works  on  Road  Corridor  X  have  restarted  with  a  new  contractor.  The 
construction of the Eastern end of Rail Corridor VIII towards Bulgaria, which suffered from 
the termination of contracts  in  2020 upon lack of progress  on site  and poor implementation 
capacity,  is  still  facing  significant  problems,  and  no  new  contractor  has  been  selected. 
Regarding Rail Corridor X, the joint agreement with Greece for facilitation of the rail border 
procedures is still pending. There was some progress on the Joint Railway Border Station with 
Serbia,  with  the  tender  procedure  to  be  launched  by  end-2022.  Maintenance  and  service  of 
regional and local roads and rail systems need to be improved.  

The digitalisation of the economy is advancing further, but remains low compared with 
the  EU.  The  percentage  of  households  with  internet  access  at  home  increased  by  10 pps. 
between  2015  and  2020,  to  79 %.  A  fixed  broadband  connection  to  the  Internet  is  used  by 
88 % of household users, and by 92 % of enterprises with ten or more employees, but smaller 
companies  still  face  obstacles.  Of  the  total  number  of  enterprises,  54.5 %  had  a 

56 

 
 
website/homepage. Overall, there is a particular need to increase access to broadband; expand 
available e-government services; and develop digital skills.  

Energy diversification needs are pressing, while measures to improve energy efficiency 
are  lagging.  The  economy  is  characterised  by  high-energy  intensity  with  low  efficiency  in 
energy production and consumption. Electricity generation is highly dependent on coal,  and, 
with domestic coal reserves declining, on imports. The government plans to increase the share 
of renewable energy sources to 35-45 % of energy consumption by 2040. The distribution of 
natural gas, as an intermediate step in the decarbonisation process, is advancing, with efforts 
made to increase the transmission and distribution network. The total distributed quantity in 
2021  was  around  426  million  m3  (+26.13 %  compared  with  2020).  Gas  accounts  for  some 
11 %  of  electricity  production,  and  100 %  of  the  country’s  gas  is  imported  from  Russia 
through a single connection. The connection to regional gas pipelines progresses only slowly. 
Works  on  the  gas  interconnection  with  Greece  have  not  yet  started.  This  project  would 
support diversification of natural gas sources and facilitate access to transit pipelines. Further 
improving  energy  efficiency,  including  in  residential  and  public  buildings,  is  important  to 
lower the economy’s dependence on energy imports and to  allow for the reduction of fiscal 
subsidies for energy. Yet, partly on account of limited technical capacity, the government has 
not  progressed  with  the  adoption  of  the  needed  by-laws  to  implement  the  2020  Law  on 
Energy  Efficiency.  Also,  the  legal  and  regulatory  framework  for  the  establishment  of  the 
Energy  Efficiency  Fund  remains  to  be  adopted.  The  government  is  providing  a  range  of 
financial initiatives to support the private sector in its greening efforts, including the recently 
adopted Plan for Accelerated Growth (2022-2026), which foresees two funds to finance green 
economy projects. 

Sectoral and enterprise structures 

The economy’s output structure diversified further through the pandemic. Even through 
the past two years, in which economic activity was troubled by pandemic-related restrictions, 
the  sectoral  and  business  structure  continued  their  gradual  transformation  towards  a  higher 
share  of  services,  including  trade,  in  value  added  and  in  employment.  The  output  structure, 
too, is increasingly determined by the service industries, which together accounted for some 
66 % of total value added in 2021 (compared to 60.4 % in 2016 and 64 % in 2020). The share 
of  manufacturing  decreased  slightly,  compared  to  the  preceding  year,  after  having 
progressively  gained  ground  in  previous  years.  It  stood  at  14.8 %  of  value  added  in  2021 
(-0.3pps.  year-over  year).  Construction,  too,  weighed  more  lightly,  overall  (5.8 %  of  value 
added,  compared  to  6.2 %  in  2020  and  an  average  of  7.2 %  in  the  period  2016-2020), 
reflecting weak investment dynamics during the pandemic. The share of agriculture dropped 
further in 2021, to 9 % (-0.8pps.).  

Employment  in  services  remained  robust  in  spite  of  lockdowns.  Although  services  were 
badly hit by pandemic-related containment measures, they still accounted for over half of total 
employment  in  2021  (57.6 %),  which  is  a  stark  increase  compared  to  5  years  earlier  (2016: 
52.3 %), and higher than in 2020 (57 %), when lockdown rules were even stricter. In spite of 
the  weak  performance  of  the  manufacturing  sector  in  2021,  its  share  in  total  employment 
remained almost unchanged from the preceding year, possibly owing to government support 
schemes such as wage subsidies and reduced working hours. It is significantly above its level 
of five years earlier (19 %). The agricultural sector is gradually becoming less significant for 
overall  employment.  Its  share  in  total  employment  dropped  further  in  2021  (11.5 %,  down 
from 12 % in 2020 and 16.6 % in 2016). Overall, it is likely that financial support from the 
government’s anti-crisis measures, which prioritised certain sectors of the economy, to some 
extent impacted on sectoral employment trends over the past 2 years. 

57 

 
 
The  number  of  businesses  increased  again  in  2021,  after  the  large  drop  in  2020.  The 
number  of  total  companies  in  business  decreased  slightly  further  in  2021,  on  account  of  a 
furth  drop  in  micro  companies  (1-9  employees).  On  the  other  hand,  the  number  of  SMEs 
increased  (+1.4%  year-on-year)  again,  after  the  pandemic-induced  decline  in  2020.  Overall, 
the share of SME and micro enterprises in total enterprises increased by 0.2 pps in 2021, to 
99.8%,  which  is  the  average  of  the  past  five  years.  Micro  and  small  companies  account  for 
97.8% of total (+0.1pps), broadly stable compared to the pre-COVID-19 level.  

Economic integration with the EU and price competitiveness 

Trade  openness  remains  relatively  high.  The  economy  posted  a  large  increase  in  trade 
openness (exports and imports in goods and services as a share of GDP), to 148 % of GDP in 
2021, after a drop in 2020 (to 130 % from 138 % in 2019), when trade volumes declined by 
more than GDP. The share of higher-value added products in the export structure rose further 
in  2021,  including  chemicals  (26.8 %)  and  machinery  and  transport  equipment  (31.5 %),  at 
the expense of the traditional exports such as iron and textile (below 20 %).  

Mainly  reflecting  the  product  trade  structure,  which  was  impacted  by  the  pandemic  and  its 
disruption of supply chains, exports to CEFTA countries increased, as a share of total, while 
those to the EU remained the same. In 2021, exports to the EU accounted for 77.3 % of total 
exports, which is only slightly less than in 2020, and partly due to the continued weakness in 
automotive  supply  exports,  for  which  EU  economies  are  the  most  important  destination 
markets. The EU’s share of imports, at 46.2 % of total, was about the same as in the preceding 
year.  The  share  of  exports  to  CEFTA  countries  (11.8 %  of  total  exports)  was  higher  by 
0.8pps., while the share of imports from CEFTA countries remained about the same, at 9.5 % 
of the total in 2021. EU countries remain the most important investors in North Macedonia, 
accounting for some 56 % of total FDI inflows in 2021, but the EU-27 share in the total stock 
of direct investment has been declining since 2015 (66.1%), and amounted to 61.9 % in 2020 
(EU-27). Concerns over external competitiveness have increased as wage growth accelerated, 
fuelled  by  the  recent  18.5 %  hike  in  minimum  wages,  coupled  with  compensating  wage 
subsidies to employers, and by increases in public sector wages. The real effective exchange 
rate (CPI-based) continued to  remain broadly stable also  in  2021, appreciating somewhat  in 
the last quarter, and depreciating in spring 2022. 

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.  

58 

 
 
 
North  Macedonia  is  moderately  prepared  in  the  area  of  public  procurement.  Limited 
progress was made with the adoption of the new Public Procurement Strategy 2022-2025 and 
the  launching  of  the  new  e-market  system  for  low  value  procurement.  Capacities  of  key 
institutions,  contracting  authorities  and  economic  operators  have  to  be  further  enhanced 
through  continuous  training.  National  authorities  should  implement  more  effective  anti-
corruption  measures  in  the  procurement  cycle.  The  Strategic  Partnership  Law  for  the 
construction  of  Corridor  VIII  and  part  of  Corridor  X  adopted  last  year  raises  concerns  as  it 
exempts the project from the application of the law on public procurement. 

As  the  recommendations  from  last  year’s  report  were  not  fully  implemented,  in  the  coming 
year, the country should in particular: 

  adopt  the  Public-Private Partnership  (PPP)  Law  and  the  Law  on  Concessions,  to  further 

align the legal framework in these areas with the EU acquis; 

  improve  the  co-ordination  among  key  stakeholders  and  strengthen  their  capacities  to 
implement  the  principles  of  transparency,  free  competition,  equal  treatment  and  non-
discrimination; 

  improve  control  of  public  procurement  procedures  through  the  efficient  follow-up  and 

reporting of irregularities, cases of conflict of interest and fraudulent practices. 

Institutional set-up and legal alignment 

The  legal  framework  on  public  procurement  is  largely  aligned  with  the  EU  acquis.  The 
practice  of  ‘blacklisting’  companies  due  to  professional  misconduct  during  the  procurement 
phase continued, which is not in line with the EU rules. In 2021, 33 negative references were 
issued  by  contracting  authorities,  six  negative  references  were  removed  by  the  Public 
Procurement  Bureau  (PPB).  The  finalisation  and  adoption  of  the  Public-Private  Partnership 
(PPP) Law and the Law on Concessions is delayed.  

In July 2021, the law nominating a strategic partner for the construction of Corridor VIII and 
part  of  Corridor  X  was  adopted  by  the  Parliament.  The  Law  exempts  the  project  from  the 
application  of  the  law  on  public  procurement  and  directly  awards  the  contract  without  a 
competitive  procedure.  The  State  Commission  for  the  Prevention  of  Corruption  initiated  a 
procedure  to  assess  the  constitutionality  of  this  law.  In  December  2021,  the  Constitutional 
Court did not accept the initiative.  

The Public Procurement Strategy 2022-2026 accompanied by an action plan for the year 2022 
was  adopted  in  March  2022.  The  PPB  continued  to  modernise  and  improve  the  public 
procurement  system  in  the  country  in  order  to  enhance  its  performance  and  functionalities. 
However, the monitoring and control competencies of the PPB need to be strengthened.  

The  cooperation  among  the  PPB,  the  Ministry  of  Economy  and  the  State  Appeals 
Commission (SAC) remains insufficient. A more effective exchange of data and information 
should be ensured including with the State Commission for the Protection of Competition, the 
State Audit Office (SAO) and the State Commission for the Prevention of Corruption. 

The  capacity  of  the  Ministry  of  Economy,  dealing  with  concessions  and  PPPs,  remains 
limited.  During  2021,  five  new  agreements  establishing  a  PPP  were  concluded.  The  PPP 
register and the register on concessions need to be established. In March 2021, four trainings 
for  public-private  partnership  were  held,  one  for  the  media  and  non-governmental 
organisations and three continuous general trainings for the employees of the central state and 
local institutions. 

59 

 
 
The electronic system for public procurement is functioning efficiently. The development of a 
platform  for  e-marketplace,  e-catalogues  and  further  improvement  of  the  SAC  processing 
system  is  ongoing.  Annual  procurement  needs  plans  of  the  contracting  authorities  are 
regularly  published  on  the  electronic  system  for  public  procurement.  The  electronic  archive 
module  ensures  the  integrity  of  electronic  procedures  by  keeping  the  documentation  in 
original electronic form, while the e-complaints module provides for an electronic exchange 
of data with the appeals procedures. 

Implementation and enforcement capacity 

In  2021,  the  public  procurement  market  amounted  to  11%  of  the  country’s  GDP  as 
compared to 8.5% in 2020. It represented 32% of the state budget.  Capacities of contracting 
authorities on central and local level need to be strengthened.  

In  terms  of  award  criteria  used  in  public  procurement  procedures,  the  use  of  most 
economically  advantageous  tender  (MEAT)  criterion  is  still  limited.  Continuous  training  of 
contracting authorities on the application of this criterion needs to be organised.  

On monitoring of contract award and implementation, the use of negotiated procurement 
procedures increased to 8% in 2021, as compared to 5.4% in 2020. An assessment of the use 
of centralised procurement and framework agreements by the PPB is ongoing. The proportion 
of  the  overall  value  of  public  procurement  awarded  to  SMEs  decreased  to  53%  in  2021  as 
compared to 63 % in 2020. Tender cancellation decreased to 28.8% as compared to 30.8 % in 
2020. 

The  capacity  to  manage  public  procurement  processes  needs  to  be  further  enhanced, 
especially at the local level, in order to ensure a more coherent approach in procurement cycle 
management. The quality of tender documentation remains a challenge for smaller contracting 
authorities. 

The regulatory and institutional mechanisms regarding integrity and conflict of interest are 
still insufficient. There is no risk assessment system incorporated in the procurement cycle in 
order to ensure timely information on possible corrupt practices or irregularities.  

Efficient remedy system 

The legislation on the right to legal remedy is broadly harmonised with the EU acquis. The 
implementation  capacity  of  the  SAC  remains  insufficient.  In  view  of  the  significantly 
increased  number  of  appeals  compared  to  the  past  years  (1 109  in  2021,  1 076  in  2020  and 
902 in 2019), there is a need for additional qualified staff in order to ensure timely processing 
of the appeals. The resolution rate in 2021 was at 97.9 %. 

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. 

The country is moderately prepared in the area of statistics.  Good progress was made, in 
particular with the publication of the first batch of the population census data in spring 2022. 
Improvements are noted in all statistical areas and in further aligning of sectoral statistics with 
EU standards, including enhanced use of administrative sources. Continued efforts are needed 
to improve the scope and data quality of macroeconomic and social statistics. As last  year’s 
recommendations  were  not  fully  carried  out,  in  the  coming  year,  the  country  should,  in 
particular: 

60 

 
 
  publish all results of the population census by the end of 2022 and ensure that the results 

of the census are considered in decision-making and resource allocation; 

  urgently ensure adequate staffing and sufficient financial resources for the State Statistical 

Office; 

  continue  to  align  financial  accounts  and  quarterly  national  accounts  with  the  European 

System of Accounts 2010 (ESA 2010). 

The  legal  framework  for  statistical  infrastructure  is  broadly  in  line  with  the  European 
Statistics  Code  of  Practice.  In  December  2021,  the  State  Statistical  Office  (SSO)  started 
preparing  the  new  programme  for  statistical  surveys  for  2023-2027  in  consultation  with 
stakeholders.  Regarding  other  main  statistical  producers,  the  central  bank  remains  fully 
committed  to  the  European  statistics  code  of  practice.  The  Ministry  of  Finance  has  yet  to 
appoint  a  head  of  statistics.  The  SSO  backup  storage  equipment  was  configured  and  made 
operational  at  the  national  Disaster  Recovery  Centre  in  Prilep;  the  SSO  data  are  backed  up 
daily. At the end of 2021, SSO adopted a new communication strategy to streamline the use 
of  social  media.  During  the  reporting  period,  the  SSO  has  adopted  several  strategic  papers 
related  to  quality  management  such  as  the  Quality  Declaration,  the  Quality  Policy  and  the 
Roadmap  for  introducing  Internal  Quality  Audit.  Human  resources  of  the  state  statistical 
system continued to decrease and the SSO financial plan for new posts for 2021 and 2022 was 
not approved. In 2021 and 2022, the SSO’s annual budgets for regular operations have been 
reduced, continuing a negative trend. 

On classifications and registers, the main classifications comply with the EU acquis and are 
updated regularly. Progress was made in the use of administrative data sources, including for 
carrying  out  the  combined  methodology  of  the  population  census.  In  June  2022,  the  SSO 
started testing the new logical design of the Statistical Business Register. In October 2021, the 
administrative register of agricultural holdings was re-designed and its data regularly feed the 
Statistical  Farm Register. Thanks to the  census  operation, data  availability  and quality  have 
improved,  though  there  is  still  a  need  to  further  comply  with  new  requirements.  Data 
transmission to Eurostat further increased but remains incomplete. 

The  country  made  good  progress  on  macroeconomic  statistics.  The  SSO  continued  to 
improve the Excessive Deficit Procedure (EDP) tables in terms of coverage and consistency 
between  financial  and  non-financial  data.  The  SSO  transmitted  the  October  2021  EDP 
notification  for  North  Macedonia,  including  relevant  annexes.  Still,  coverage  of  EDP  and 
government  finance statistics supplied through the ESA 2010 transmission programme need 
to  be  further  expanded.  In  April  2022,  trade  by  invoicing  currency  (TIC)  statistics  were 
transmitted to Eurostat according to the latest EU requirements.  

The National Bank continued to transmit to Eurostat the annual financial accounts stock data 
(data  series  2013  –  2020)  and  advanced  in  preparation  of  experimental  quarterly  financial 
accounts  data  (stocks  and  flows),  and  annual  flows  data  (by  (sub)-sectors  and  financial 
instruments).  In  September  2021,  the  National  Bank  transmitted  to  Eurostat  more  detailed 
data  for  FDI  income  (by  activity  and  geographical  breakdown)  and  for  FDI  positions  and 
transactions (data with cross-tabulation by activities and geographical breakdown) for the year 
2020. 

On business statistics, good progress was made. On foreign affiliates statistics, data for 2019 
were published. In June 2021 and in June 2022, the SSO conducted the first and second pilot 
survey  on  International  Trade  in  Services  Statistics  (ITSS)  with  a  geographical  breakdown. 
Preliminary work to set up tourism satellite accounts (TSA) made good progress. 

61 

 
 
Very  good  progress  was  made  on  social  statistics.  Progress  made  for  the  census  of 
population, households, and dwellings in North Macedonia, which was conducted between 5-
30  September  2021,  is  particularly  relevant.  All  activities  planned  for  the  census  were 
completed  on  time  despite  challenges.  An  innovative  combined  census  method  of 
administrative  registers  and  field  enumeration  was  applied.  First  results  of  the  census  were 
published  in  March,  April  and  June  2022.  The  full  set  of  results  of  the  census,  including 
household data and geographical grid statistics are being published in batches. This is a major 
achievement:  up-to-date  data  on  population  is  essential  for  planning  and  implementing 
adequate  social,  demographic,  and  economic  policies  for  the  benefit  of  all  citizens.  Data 
transmission  of  the  survey  on  income  and  living  conditions  and  crime  statistics  has  been 
delayed due to shortage of staff. Progress was achieved in labour market statistics. Activities 
are under way to source data from the administrative registers for education statistics. 

In  the  area  of  agricultural  statistics,  the  SSO  has  started  preparations  for  the  agricultural 
census which was piloted in June 2022. The methodology is harmonised with EU standards. 
Data  for  fishery  statistics  aiming  at  alignment  with  EU  standards  were  produced  and 
published in June 2022. Statistics concerning organic production have improved. For forestry 
statistics, SSO has re-designed the survey of forest fires and published the data of the ad hoc 
survey in December 2021. 

In  the  area  of  energy  and  environment  statistics,  environmental  protection  expenditure 
statistics,  waste  statistics,  water  statistics,  and  environment-related  taxes’  statistics  were 
further aligned with the EU acquis. In October 2021, for the first time, the SSO reported data 
to  Eurostat,  including  compiled  Environmental  Protection  Expenditures  (EPEA)  tables  and 
quality reports with preliminary data compiled for Environmental Goods and Services Sector, 
Air  Emission  Accounts  and  Physical  Energy  Flow  Accounts.  The  compilation  of  tables  for 
environmental expenditure for the government is outstanding. Material flow accounts data are 
included.  The 
regularly 
comprehensiveness of energy balances needs to be increased with the inclusion of solar heat 
energy. The results of a sample survey for energy consumption in households were published 
in August 2021. 

flow  balances  are  not  yet 

reported,  although  material 

Chapter 32: Financial control 

Based  on  international  standards,  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. 

The country is moderately prepared in the area of financial control. Limited progress was 
achieved with the advancement of the internal control system and managerial accountability 
in budget users both on local and central level and the adoption of the new organic budget law 
in September 2022. The implementation of the public internal financial control (PIFC) policy 
paper  and  action  plan  has  been  negatively  influenced  by  the  COVID-19  pandemic  and  the 
limited capacity of key stakeholders. A new PIFC law is currently in parliamentary procedure. 
The  functioning  of  the  financial  inspection  is  still  not  sufficient.  The  independence  of  the 
State  Audit  Office  is  not  guaranteed  by  the  Constitution.  The  efficiency  of  parliamentary 
oversight of public funds management needs to improve. 

The  recommendations  from  last  year’s  report  remain  valid.  In  the  coming  year,  the  country 
should in particular:  

62 

 
 
  adopt the new PIFC law and methodological tools and start their implementation in order 
to  improve  transparency,  managerial  accountability  and  sound  management  of  public 
funds; 

  adopt the draft state audit office law which should enhance cooperation between the State 
Audit  Office  and  the  Parliament  and  improve  parliamentary  scrutiny  over  budget 
implementation and follow-up to the recommendations of the State Audit Office; 

  ensure the establishment and efficient functioning of the anti-fraud coordination network 
and  improve  the  prevention,  management  and  reporting  of  irregularities  affecting  EU 
funds. 

Public internal financial control 

The  PIFC  policy  paper  links  the  PIFC-related  priorities  of  the  2019-2022  public 
administration  reform  strategy  with  those  of  the  2018-2021  public  financial  management 
reform programme. The new 2022-2025 public finance reform programme continues to cover 
the  priorities  defined  in  the  PIFC  strategic  framework  and  the  PIFC  policy  paper.  During 
2021,  there  were  delays  in  the  implementation  of  these  strategies  due  to  the  COVID-19 
pandemic,  the  limited  capacity  of  key  stakeholders  and  delays  in  the  adoption  of  key 
legislation, including the organic budget law and the PIFC law. The organic budget law was 
finally adopted in September 2022. Reporting on the implementation of the PIFC policy paper 
has been integrated the 2021 Annual Monitoring Report of the public financial management 
reform programme. 

Despite  ongoing  work  to  provide  further  guidance,  the  efficient  implementation  of 
managerial accountability remains a challenge for budget users at central and local levels. 
Coherent  application  of  the  manual  on  managerial  accountability  is  yet  to  be  ensured.  The 
legal framework on internal control is broadly harmonised with international standards.  Its 
implementation needs to be further strengthened.  

Efficient functioning of the financial inspection is yet to be achieved. Further harmonisation 
of the legal basis is needed as well as the development and implementation of methodological 
tools, which will provide for sound financial management.  

Fragmentation  and  inadequate  staffing  of  the  internal  audit  function  undermine  its 
organisational  capacity  and  quality  assurance.  A  national  certification  system  for  internal 
auditors should be introduced. 

The  Central  Harmonisation  Unit  continued  to  provide  methodological  guidance  and  to 
coordinate  the  development  of  financial  management  and  control  and  internal  audit  in  the 
public sector. Its capacities remain insufficient, especially for monitoring and reporting on the 
functioning of the overall internal control system, which amounts to 1380 public entities. 

External audit 

The  State  Audit  Office  law  is  largely  harmonised  with  international  standards.  Further 
harmonisation  of  the  legal  framework  is  ongoing  in  order  to  ensure  an  improved  external 
audit function in the public sector and enhance the financial and operational independence of 
the State Audit Office. Its independence is not yet guaranteed by the Constitution. 

The State Audit Office carries out a compliance audit on the final government accounts of the 
core budget by June each year. In 2021, the audit coverage of the total audit expenditure was 
80%. The structure of audited expenditure includes expenditure covered with regularity audit 
for  an  amount  of  129.48  million  denars  (i.e.  53%),  expenditure  covered  with  performance 
audit  for  an  amount  of  61.84  million  denars  (i.e.  26%),  and  expenditure  covered  with 

63 

 
 
compliance audit for an amount of 2.42 million denars (i.e. 1%). The 2020 annual report on 
performed audits was adopted by the Parliament in March 2021 and published on the website 
of the State Audit Office. The quality of audit work can be considered sufficient.  In 2021, 
the Office issued 109 final audit reports, which were sent to Parliament for deliberation and 
published on the website of the State Audit Office. 

With  regard  to  its  institutional  capacity,  the  Office  has  continued  to  implement  the  2018-
2022  development  strategy  and  the  2020-2023  human  resources  management  strategy.  The 
number of staff in 2021 increased by 15 people. The State Audit Office’s budget for 2022 was 
approved  as  requested  and  compared  to  2019,  it  has  increased  by  49.59 %.  In  2022,  six 
additional  staff  members  will  be  recruited  as  per  the  2022  Annual  Employment  Plan  of  the 
State Audit Office.  

The State Audit Office continued the implementation of the annual plan for the professional 
development  and  training  of  state  auditors.  Progress  has  been  made  in  raising  public 
awareness of its activities, increasing the interest of the media, and implementing the 2020-
2023 Communication Strategy. 

As regards the impact of the audit work, the State Audit Office’s recommendations are not 
efficiently  implemented  by  the  auditees.  In  2021,  88%  of  the  audit  recommendations  were 
implemented. The cooperation between the State Audit Office and the Parliament continued 
to improve. However, parliamentary scrutiny over the budget preparation and implementation 
still  needs  to  be  further  enhanced.  Transparency  and  accountability  of  public  funds 
management has to be strengthened on the basis of efficient monitoring mechanisms both by 
the  executive  and  by  the  Parliament,  including  an  effective  follow-up  of  the  audit 
recommendations of the State Audit Office.  

Protection of the EU’s financial interests 

The national legislation remains largely harmonised with the EU Directive 2017/1371 on the 
fight against fraud to the Union’s financial interests by means of criminal law. The process of 
alignment the relevant EU acquis and amendments to the Criminal Code are in parliamentary 
procedure.  The  capacities  of  the  anti-fraud  co-ordination  services  (anti-fraud  coordination 
network)  at  the  Ministry  of  Finance  have  been  strengthened  and  it  currently  has  five 
employees. The legal basis for the establishment of the institutional framework of the system 
for  protection  of  the  EU  financial  interests  (anti-fraud  coordination  network)  has  been 
developed.  The  2022-2025  national  anti-fraud  strategy  and  the  related  action  plan  were 
adopted  by  the  government  in  June  2022.  The  national  authorities  reported  19  cases  of 
irregularities through the irregularity management system in 2021, out of which 18 cases were 
qualified  as  irregularities  and  1  case  as  suspected  fraud.  The  national  authorities  should 
continue their good cooperation with the European Commission on investigations. To ensure 
this, in particular, the independence of the judicial authorities from any public pressure should 
be ensured and the authorities should be provided with adequate modern equipment allowing 
them the proper discharge of their duties. 

Protection of the euro against counterfeiting 

As regards EU acquis alignment, national legislation is to some extent harmonised with the 
EU regulations defining the system for fight against counterfeiting of the euro. There has been 
limited progress in the reporting period. In 2021, the National Bank continued to improve its 
capacities  through  online  trainings  and  by  involving  experts  from  all  key  institutions.  The 
capacities of the Ministry of the Interior to prevent, detect and investigate criminal offences 
related  to  counterfeiting  money,  remain  limited.  An  electronic  system  for  exchange, 
processing, analysis and reporting of cases still needs to be established. 

64 

 
 
3. 

GOOD NEIGHBOURLY RELATIONS AND REGIONAL COOPERATION  

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

The country continued to participate in a number of regional cooperation initiatives, such as 
the Central European Free Trade Agreement (CEFTA), the Energy Community, the Transport 
Community,  the  South-East  European  Cooperation  Process  (SEECP)  and  the  Regional 
Cooperation Council. 18 

Following  the  May  2022  Foreign  Affairs  Council,  EU  foreign  ministers  held,  for  the  first 
time,  an  informal  exchange  of  views  with  Western  Balkans  counterparts.  The  EU  and 
Western Balkans Leaders Meeting on 23 June 2022 reaffirmed the EU perspective of the 
partners in the region and gave impulse to intensify the cooperation and integration agenda. 
Particular  focus  was  placed  on  the  integration  of  the  Western  Balkans  into  EU  measures  to 
reduce the negative impact  of the Russia’s aggression against Ukraine in terms  of food  and 
energy supplies and independence, as well as to support capacity building for cyber security 
and  the  social  agenda,  notably  involving  youth  in  the  economy.  The  meeting  was  also  an 
opportunity to discuss closer political cooperation, including foreign policy alignment of the 
Western Balkans with EU positions and restrictive measures. 

At the EU-Western Balkans summit in Brdo pri Kranju in October 2021, the six Western 
Balkans leaders reaffirmed their commitment to inclusive regional cooperation, strengthening 
good  neighbourly  relations  and  investing  more  decisive  efforts  in  establishing  the  Common 
Regional  Market.  The  summit  announced  a  range  of  concrete  deliverables  benefiting  the 
Western Balkans, including the first set of actions under the Economic and Investment Plan; 
the  pledge  to  boost  COVID-19  vaccination  rates;  the  path  towards  lower  roaming  costs;  an 
innovation  agenda for the Western Balkans;  green lanes to  reduce border waiting times and 
Transport Community action plans for smart transport and sustainable connectivity. 

The Common Regional Market, as agreed by the leaders of the Western Balkans at the 2020 
Berlin process summit in Sofia, is critical in increasing the attractiveness and competitiveness 
of the region. It will help North Macedonia 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.  A  number  of  important  decisions  to  facilitate  the  movement  of  workers 
remain  blocked.  It  is  important  that  all  parties  play  a  constructive  role  in  building  the 
Common Regional Market and deliver on their joint commitments set out in its action plan. 
Albania,  North  Macedonia  and  Serbia  seek  to  deepen  regional  cooperation  in  a  number  of 
areas, notably economic integration through the Open Balkan Initiative (OBI), implementing 
de facto some elements of the Common Regional Market on which no formal agreement has 
been reached  yet  between the parties.  Four OBI  summits  have been held over the reporting 
period.  

In  October  2021,  North  Macedonia  along  with  other  Western  Balkan  partners  endorsed  the 
action  plan  for  the  Green  Agenda  for  the  Western  Balkans,  which  aims  at  reflecting  the 
European  Green  Deal  and  contributing  to  the  sustainable  socio-economic  development  and 

18  North  Macedonia  also  participates  in  the  ‘Brdo-Brijuni  process’,  the  European  Common  Aviation  Area 
Agreement,  the  Regional  Initiative  for  Migration  and  Asylum,  the  Regional  School  of  Public  Administration 
(ReSPA),  the  European  Strategy  of  the  Adriatic  Ionian  Region  (EUSAIR),  the  Organisation  of  the  Black  Sea 
Economic Cooperation (BSEC), etc. North Macedonia has the status of observer in the Danube process. 

65 

 
 
 
                                                           
the  green  recovery  of  the  region  after  the  pandemic.  North  Macedonia  should  contribute  to 
successfully  implement  this  joint  regional  vision,  with  high  level  of  ambition,  putting 
sustainable  development,  resource  efficiency,  nature  protection  and  climate  action  at  the 
centre of all economic activities. 

In June 2022, the second meeting was held of the Prespa Forum for Dialogue on the future of 
the  Western  Balkans  in  the  contemporary  security  architecture,  including  with  the 
participation of regional stakeholders. The aim of the forum is to promote dialogue, regional 
cooperation and good neighbourly relations.  

The  country  generally  maintains  good  bilateral  relations  with  other  enlargement  countries 
and neighbouring EU Member States.  

Bilateral relations with Albania remained good, including with frequent high-level visits from 
both sides. The agreement between the government of North Macedonia and the Council of 
Ministers of Albania on mutual recognition of approvals for Authorised Economic Operator 
for  Security  and  Safety  (AEOS)  was  signed.  In  February  2022,  new  joint  border  crossing 
points between Albania and North Macedonia were opened. 

Relations between the country and Bosnia and Herzegovina continue to improve in terms of 
development  and  cooperation.  The  Foreign  Minister  met  the  deputy  chairwoman  of  the 
Council  of  Ministers  of  Bosnia  and  Herzegovina,  in  the  margins  of  the  Western  Balkans 
Foreign  Ministers  meeting  in  London  in  December  2021.  The  Prime  Minister  met  the 
chairman  of  the  Council  of  Ministers  of  Bosnia  and  Herzegovina  in  the  margins  of  the 
Investment Summit for the Western Balkans.  

Bilateral cooperation with Kosovo is very good and several meetings were held at the highest 
level.  The  Speaker  paid  an  official  visit  to  the  Assembly  of  Kosovo  in  March  2022.  The 
President of North Macedonia visited the KFOR Regional Command – West and the members 
of the contingent from North Macedonia.  

Bilateral  relations  with  Montenegro  remained  good.  The  ministers  for  information  society 
and administration and of education and science participated in the Fourth Digital Summit of 
the Western Balkans countries in Podgorica in October 2021. The Deputy Prime Minister for 
EU Affairs participated in the Balkan Integration Forum 2021 in Podgorica. The President of 
North Macedonia paid an official visit to Montenegro in April 2022. 

There  is  an  improvement  in  the  bilateral  cooperation  with  Serbia.  Two  meetings  were  held 
between  the  ministers  of  foreign  affairs  over  the  reporting  period.  An  Agreement  on  the 
establishment of cultural-information centres in Skopje and Belgrade was signed in February 
2022. The first meeting of the Committee for national minorities was held in February 2022. 
The Serbian Prime Minister visited North Macedonia in May 2022.  

During  the  reporting  period,  the  country  completed  several  activities  with  Türkiye.  The 
President  of  the  Grand  National  Assembly  of  Türkiye  visited  Skopje  on  two  occasions  and 
had  meetings  with  the  leadership  of  the  country.  The  Mayor  of  Skopje  participated  in  the 
Summit of Balkan Mayors in Istanbul, where she signed a Declaration on the cooperation of 
Balkan  cities.  During  the  visit  a  Memorandum  of  understanding  was  signed  between  the 
Academy  of  Judges  and  Public  Prosecutors  and  the  Judicial  Academy  of  Türkiye.  A 
memorandum of cooperation was signed in Ankara between the Directorate of Protection and 
Rescue  of  North  Macedonia  and  the  Agency  for  Disaster  Management  and  Emergency 
Situations  at  the  Ministry  of  Interior  of  Türkiye.  The  memoranda  of  understanding  and 
cooperation in the fields of forestry and water and the Agreement between the governments 
for cooperation in the field of the veterinary policy and food safety entered into the force at 
the beginning of 2022.  

66 

 
 
During the reporting period, relations with Bulgaria focused on overcoming pending bilateral 
issues,  which paved the  way for the start  of the  EU accession negotiation process.  Bilateral 
contracts  have  intensified,  including  with  several  high  level  visits  and  meetings.  The  two 
Prime Ministers met in Sofia, after the tragic bus accident in Bulgaria in November 2021. In 
January 2022, a joint session between the two governments was held in Sofia, during which 
working groups were formed, focusing on the economy, trade and innovation; infrastructure, 
transport  and  connectivity;  European  integration  and  green  policies;  culture,  science  and 
education; and an additional working group on other bilateral topics. Regular meetings of the 
working  groups  led  to  the  signature  of  several  cooperation  documents,  including  in 
agriculture, transport, entrepreneurship, education, youth and sports as well as tourism. There 
was  also  a  declaration  on  the  reduction  of  roaming  tariffs  between  the  two  countries.  The 
constitutional  courts  of  both  countries  held  a  meeting  in  Skopje  in  May  2022  and  signed  a 
memorandum  on  cooperation.  The  multidisciplinary  expert  commission  on  historical  and 
educational issues held several meetings during the reporting period. The second meeting of 
the  Joint  Intergovernmental  Commission  took  place  in  July  2022.  A  bilateral  protocol  from 
the  meeting  of  the  Joint  Intergovernmental  Commission  established  under  article  12  of  the 
Treaty of Friendship, Good Neighbourliness and Cooperation was signed in July 2022. 

Cooperation  with  Greece  has  intensified  in  areas  of  mutual  interest.  Working  and  expert 
groups were set up on fulfilling the obligations of the Prespa Agreement. The President of the 
country paid his first official visit to Greece in October 2021, where he met high-level Greek 
officials. The foreign minister met the alternate minister for European affairs of Greece after 
the  EU-Western  Balkans  summit.  The  seventh  meeting  of  the  joint  expert  committee  on 
archaeological, historical and educational issues was held in Athens. In May 2022, the Prime 
Minister attended a ceremony to mark the start of the construction of the liquefied natural gas 
terminal  in  the  Greek  city  of  Alexandroupolis,  together  with  the  Prime  Ministers  of  Greece 
and  Bulgaria  and  the  President  of  Serbia.  The  Foreign  Minister  of  Greece  visited  Ohrid  in 
June 2022 to participate in the Prespa Forum Dialogue. 

4. 

ABILITY TO ASSUME THE OBLIGATIONS OF MEMBERSHIP  

CLUSTER 2: INTERNAL MARKET  

The  internal  market  cluster  covers:  free  movement  of  goods  (Chapter  1);  freedom  of 
movement  for  workers  (Chapter  2);  right  of  establishment  and  freedom  to  provide  services 
(Chapter  3);  free  movement  of  capital  (Chapter  4);  company  law  (Chapter  6);  intellectual 
property law (Chapter 7); competition policy (Chapter 8); financial services (Chapter 9); and 
consumer  and  health  protection  (Chapter  28).  North  Macedonia  is  moderately  prepared  in 
most  of  the  areas  covered  by  Cluster  2  on  internal  market,  namely  the  free  movement  of 
goods,  services  and  capital,  intellectual  property,  competition  policy,  financial  services  and 
consumer  and  health  protection.  The  country  has  achieved  a  good  level  of  preparation  on 
company law, although it is still at an early stage on freedom of movement for workers. In the 
reporting  period,  North  Macedonia  made  good  progress  on  free  movement  of  capital  and 
some  progress  on  company  law  and  on  financial  services.  No  progress  was  made  on 
competition policy. Overall, more progress is needed in the coming year in the areas covered 
by this cluster as it will feed into North Macedonia’s preparations to meet the requirements of 
the EU’s internal market. Work on this cluster is highly relevant for the development of the 
Common Regional Market.  

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.  

67 

 
 
North Macedonia is moderately prepared in the area of the free movement of goods. While 
some national legislation in this allows products to be traded freely, alignment remains to be 
ensured in many areas, not least where the EU acquis has been updated in recent years. There 
was no progress in implementing last year’s recommendations.  

Last  year’s recommendations have not been addressed and remain valid. In the coming year 
the country should, in particular:  

  complete alignment with the EU General Products Safety Directive;  

  complete  the  comprehensive  screening  to  ensure  compliance  with  Articles  34-36  of  the 

Treaty on Functioning of the European Union; 

  strengthen administrative capacity to enforce the legal framework. 

General principles  

The  country  has  set  up  the  institutional  framework  for  the  production,  distribution  and 
marketing of industrial products. However,  full  alignment with  the relevant  EU  acquis  is 
not yet in place as the Law on technical requirements and the by-laws to implement the Law 
on  general  product  safety  have  not  yet  been  adopted.  Further  alignment  of  the  national 
legislation with the EU acquis has commenced. 

Non-harmonised area 

The  follow-up  and  implementation  of  compliance  with  Articles  34-36  of  the  Treaty  on 
Functioning  of  the  European  Union  (TFEU)  is  ensured  by  the  Ministry  of  Economy. 
Screening  of  the  national  legal  framework  to  identify  cases  that  are  not  compliant  with 
Articles 34-36 and what to do to address this started at the beginning of 2022. 

Harmonised area: quality infrastructure 

The necessary institutional and legal structure for technical regulations, standards, conformity 
assessment,  accreditation,  metrology  and  market  surveillance  is  in  place.  A  new  horizontal 
strategy  for  development  in  the  area  of  free  movement  of  goods  is  yet  to  be  adopted.  The 
National  Standardisation  Institute  is  a  full  member  of  the  European  Committee  for 
Standardisation  (CEN)  and  European  Committee  for  Electro-technical  Standardisation 
(CENELEC), and participates in  the work of  relevant  EU standardisation  bodies.  It  adopted 
24 761 European standards as national standards and adopted 84 national standards. Its work 
follows the national Strategy for standardisation 2020-2022.  

In  June  2022,  there  were  19  active  conformity  assessment  bodies  for  calibration,  testing, 
medicinal  laboratories,  product  and  process  certification  and  inspection.  The  National 
Accreditation  Institute is a member of the International Accreditation Forum, the European 
Cooperation  for  Accreditation  and  the  International  Laboratory  Accreditation  Cooperation. 
However,  there  are  still  no  national  accreditation  schemes  for  the  certification  of  personnel 
and skills testing. 

The  Bureau  of  Metrology,  the  national  metrology  body,  is  an  official  member  of  the 
European  Association  of  National  Metrology  Institutes  and  the  General  Conference  on 
Weights  and  Measures.  The  capacity  of  the  Bureau  was  strengthened  with  new  technical 
equipment for several laboratories and the hiring of new technical staff, specifically trained to 
use the referenced equipment. 

During  2021,  the  main  body  responsible  for  market  surveillance,  the  state  market 
inspectorate,  devoted  a  significant  part  of  its  activities  and  inspectors  to  monitoring  the 
implementation  of  health-protection  measures  in  the  context  of  the  COVID-19  pandemic. 

68 

 
 
Nevertheless,  the  number  of  core  inspection  activities  increased.  In  2021,  473  inspections 
were performed under the general product safety law (up from 428 in 2020) and 131 under 
the  construction  products  law  (up  from  20  in  2020).  This  led  to  16  harmful  products  being 
taken  off  the  market.  The  inspectorate  has  278  employees,  but  an  insufficient  number  of 
licenced  inspectors  (171)  and  many  staff  are  close  to  retirement.  It  also  lacks  an  efficient 
software system to record inspection results and proper risk planning and management. 

Harmonised area: sectoral legislation 

In the area of  ‘new and global approach’ product legislation, the level  of alignment with 
the EU acquis remains low. No progress is reported in alignment to the EU acquis in the area 
of  machinery,  lifts,  low  voltage,  pressure  equipment,  portable  pressure  equipment, 
electromagnetic  compatibility,  personal  protective  equipment,  low  voltage,  gas  appliances, 
explosive  atmospheres,  pressure  equipment,  radio  and  telecom  equipment,  nor  on  toys  and 
medical  devices.  Eleven  implementing  legal  acts  to  align  with  the  EU  acquis  related  to 
general product safety have still not been adopted. In the construction sector, ten Eurocodes 
with 58 standards and 57 national annexes have not yet entered into force - their application 
remains voluntary up to 2023. 

The  national  legislation  under  the  ‘old  approach’  product  legislation  is  not  yet  aligned  to 
the current EU acquis on vehicles, medicines for human use or medicines for veterinary use. 
There  has  been  no  progress  on  the  alignment  and  implementation  of  the  EU  Regulation  on 
Registration,  Evaluation,  Authorisation  and  Restriction  of  Chemicals  (REACH),  on 
chemicals, classification, labelling and packaging of substances and mixtures (CLP), on good 
laboratory  practices  (GLP),  or  on  fertilisers  and  detergents.  The  administrative  capacity  in 
the area of firearms has not improved. 

On  procedural  measures,  the  Ministry  of  Economy  and  the  Standardisation  Institute  are 
responsible  for  the  notification  procedures  for  standards  and  technical  regulations.  Public 
authorities performing the relevant checks and supervision are in place and fully operational. 
The  licensing,  monitoring  and  control  systems  are  operational  for  businesses  dealing  with 
drug precursors and civil explosives. National legislation is designed to align with the EU 
acquis on returning cultural goods unlawfully removed from a Member State. There are no 
external  border  checks  rules  for  products  imported  from  non-EU  countries  on  conformity 
with product safety. 

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.  

North Macedonia is at an early stage of preparation in the area of freedom of movement of 
workers.  Over  the  reporting  period,  no  progress  was  made  to  address  last  year’s 
recommendations, which remain valid.  

In the coming period, North Macedonia should in particular: 

  continue to adapt the legal framework in line with the EU acquis on access to the labour 
market,  in  particular regarding non-discrimination on grounds of nationality against EU 
workers; 

  step up signature of agreements on social security coordination and health care insurance 
with  EU  Member  States  and  identify  administrative  measures  to  be  introduced  in 
preparation for future accession. 

69 

 
 
There was no progress in aligning the national legislation with the EU  acquis in the area of 
access  to  the  labour  market.  EU  citizens  still  have  no  access  to  posts  in  public 
administration, except some positions in the areas of health and education. Furthermore, some 
posts in the private sector may be occupied exclusively by citizens of North Macedonia. The 
Agency for employment issues various types of work permits for foreign workers following 
the annual quotas.  In 2021, North  Macedonia issued 755  work permits for foreign workers. 
There  are  still  no  activities  in  preparation  to  join  the  European  network  of  employment 
services (EURES) upon accession. 

No new agreements for bilateral coordination of social security systems, nor agreements for 
mutual  recognition  of  the  healthcare  services  were  concluded  in  the  reporting  period.  The 
country  has  23  bilateral  agreements  for  the  coordination  of  social  security  systems,  out  of 
which 13 in force with EU Member States, and 18 agreements for mutual health insurance, 12 
with  EU Member States. The  citizens may  use the  European  Health  Insurance  Card in  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. 

In  the  area  of  establishment  and  the  freedom  to  provide  services,  North  Macedonia  is 
moderately  prepared.  Limited  progress  was  made.  The  Point  of  Single  Contact  for 
services is available as an electronic platform and has been regularly updated. There were no 
developments  to  further  harmonise  with  the  EU  acquis  on  recognition  of  professional 
qualifications. In the coming year, North Macedonia should in particular: 

  increase the scope of information and online access to services available with the Point 

of Single Contact; 

  further  align  the  national  legislation  with  the  EU  acquis  on  postal  services,  including 
with  the  Postal  Services  Directive  and  with  the  Regulation  on  cross-border  parcel 
delivery; 

  align the national legislation with the EU acquis, in particular on mutual recognition of 

professional qualifications and services.  

On  the  right  of  establishment  and  freedom  to  provide  cross-border  services,  North 
Macedonia  continued  to  align  the  national  legislation  with  the  EU  Services  Directive.  The 
action  plan  to  address  non-compliance  of  sectoral  laws  was  updated  to  identify  provisions 
contrary to the Directive and in certain sectors, the relevant amendments  were adopted. The 
platform  (www.uslugi.gov.mk)  is  set  to  be  the  Point  of  Single  Contact  for  services  and  is 
regularly  updated  with  new  functionalities.  By  September  2022,  the  portal  contained 
information about 819 services for citizens and businesses, of which 203 allow e-application. 
The  national  public  administration  bodies  do  not  recognise  the  certifications  on  quality 
systems issued by companies registered in EU Member States. This hinders their freedom to 
provide  services  and  is  against  the  multilateral  agreement  for  the  mutual  recognition  of 
certifications. 

As  of  January  2022,  the  Law  on  Postal  Services  allows  the  full  liberalisation  of  the  postal 
services in the country as the universal postal service is no longer exclusive  authority of the 
Post  of  North  Macedonia.  In  September  2022,  there  were  45  postal  service  providers  with 
general  authorisations,  including  the  Post  of  North  Macedonia  as  the  designated  universal 
service provider on the  entire territory of the country. The  independence and administrative 

70 

 
 
capacities  of  the  postal  regulator,  as  well  as  the  capacity  of  the  Ministry  of  Transport  and 
Communications  to  deal  with  the  postal  sector,  need  to  be  strengthened.  The  Post  of  North 
Macedonia still needs to set up systems for accounting separation and net cost calculation in 
line  with  the  Postal  Services  Directive.  The  findings  of  the  audit  report  by  the  State  Audit 
Office  on  the  Post  of  North  Macedonia,  indicating  recurrent  irregularities,  were  not  yet 
addressed. 

No  progress  was  made  as  regards  the  mutual  recognition  of  professional  qualifications. 
The law on the recognition of professional qualifications designed to align with the EU acquis 
has  not  been  adopted  yet.  Legislation  still  needs  to  be  harmonised  with  the  EU  Directive 
2005/36/EC  to  comply  with  minimum  training  requirements.  The  list  of  the  regulated 
professions issued in  2019 has been withdrawn  by the authorities for further harmonisation. 
As  a  result,  a  transparent  list  of  all  regulated  professions,  including  their  justifications,  is 
missing  and  the  data  validation  in  the  electronic  register  has  not  been  completed.  The 
institutional capacity of the Ministry of Education and Science’s section dealing with mutual 
recognition of professional qualifications needs to be strengthened. 

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. 

North  Macedonia  is  moderately  prepared  in  the  area  of  free  movement  of  capital.  Good 
progress  was  made  in  further  alignment  with  the  EU  acquis,  both  through  the  adoption  of 
legislation on payment systems as well as through a new law to fight money laundering and 
financing of terrorism. There is  a need to  swiftly proceed with  implementing the legislation 
and further strengthening administrative capacity. In the coming year, the country should, in 
particular:  

  prepare  a  roadmap  with  actions  and  timelines  to  apply  EU  rules  in  the  area  of  free 

movement of capital, including acquisition of agricultural land; 

  start  implementing  new  legislation  on  payment  systems  and  services,  including  by 

adoption of secondary legislation; 

  implement  the  new  legislation  on  anti-money  laundering  and  financing  of  terrorism  in 

line with the EU acquis, including by adoption of implementing legislation.  

North  Macedonia  maintained  some  restrictions  on  capital  movements  and  payments.  For 
instance,  non-residents  cannot  acquire  agricultural  land.  In  that,  North  Macedonia  is  late  in 
implementing  its  obligations  under  the  Stabilisation  and  Association  Agreement.  There  is  a 
need to  finalise a roadmap to apply EU rules in  this area, in line with obligations under the 
Stabilisation and Association Agreement.  

In April 2022, the Parliament adopted the law on payment systems and services that aims to 
align  legislation  with  the  EU  acquis,  including  the  Second  Payment  Services  Directive,  the 
Electronic  Money  Directive  and  the  Payment  Accounts  Directive.  In  the  meantime,  the 
National Bank has advanced the preparation of the 20 relevant by-laws, through consultations 
with  the  stakeholders.  The  law  on  payment  systems  and  services  also  establishes  a  unified 
register  of  bank  accounts  under  the  Central  Registry  as  required  by  the  5th  Anti  Money 
Laundering (AML) Directive.  

In the fight against money laundering and the financing of terrorism, in June 2022 new 
legislation on the fight against money laundering and the financing of terrorism was adopted 

71 

 
 
that aims to align with the 5th AML Directive, including crypto-assets and to address FATF 
recommendations.  In  December  2021,  the  National  Council  for  Capital  Markets  set  up  a 
working  group led by the Ministry of Finance to regulate crypto-currencies. As indicated in 
the  legislation,  a  bank  account  registry  needs  to  be  established  by  December  2023.  The 
National Council for the prevention of money laundering adopted rules of procedures for the 
Moneyval on-site visit of September 2022. Overall, cooperation among institutions continues 
to  increase,  and  new  tools  have  been  set  up  to  ease  reporting  and  monitoring  of  suspicious 
transactions  based  on  a  risk  assessment  approach.  The  Financial  Intelligence  Office 
strengthened  its  analytical  capacity  for  data  processing  and  financial  analysis.  In  2021, 
obliged entities submitted 315 Suspicious Transactions Reports (292 in 2020). The Office sent 
92  reports  (35  in  2020)  of  money  laundering  and  terrorism  financing  cases  and  305 
notifications  (122  in  2020)  of  other  cases  to  the  law  enforcement  bodies.  As  a  result,  15 
people were indicted and 16 convicted for money laundering in 2021. (See also Chapter 23 - 
Judiciary and fundamental rights and Chapter 24 - Justice, Freedom and Security). 

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.  

The country has a good level of preparation in the area of company law. Some progress was 
made in bringing company legislation further in line with the EU acquis during the reporting 
period, in particular through adoption of a new Corporate Governance Code. Further progress 
is needed in the area of corporate accounting and statutory audit in line with recommendations 
below. 

In the coming year, North Macedonia should in particular: 

  further align with the EU company Law acquis, including on encouragement of long-term 

shareholder engagement; 

  adopt  legislation  on  accounting  and  on  audit  aligned  with  the  latest  EU  acquis  on 

corporate accounting and statutory audit; 

  strengthen the role of the Council for Advancement and Oversight of the Audit. 

On  company  law,  alignment  with  the  EU  acquis  is  well  advanced  on  the  formation, 
registration, merger and division of companies. The revised Corporate Governance Code is in 
force  since  October  2021;  its  application  is  mandatory  for  listed  companies,  in  accordance 
with  the  EU  Directive  on  the  annual  financial  statements,  consolidated  financial  statements 
and related reports of certain financial undertakings. Further alignment is necessary with the 
2019 EU acquis on the use of digital tools, cross-border operations, as well as with the rules 
on the encouragement of long-term shareholder engagement. 

On transparency, the listing rules of the country’s stock exchange are designed to be in line 
with the requirements of the Transparency Directive. 

On company reporting, the draft legislation on accounting still needs to be adopted, based on 
a  broad  consensus  with  the  Association  of  Accountants  and  the  relevant  Chamber  of 
Commerce.  International  financial  reporting  standards  apply  to  all  companies,  with  no 
reduced obligations for small and medium enterprises. In the area of non-financial reporting, 
the  legal  framework  remains  to  be  aligned  with  the  EU  acquis.  Adoption  of  the  draft 
legislation  on  audit,  investigations  and  sanctions,  is  also  outstanding.  The  visibility  and 
overall  performance  of  the  Council  for  Advancement  and  Oversight  of  the  Audit  remains 

72 

 
 
poor. Further efforts are required for the Council to  start  operating as a true and financially 
independent regulatory body. 

Chapter 7: Intellectual property law 

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

North Macedonia remains moderately prepared in this area. No progress was made and last 
year`s  recommendations  remain  valid.  Enhanced  efforts  are  needed  to  further  align  the 
legislation with the EU acquis in this area. 

In the coming year, North Macedonia should in particular: 

  further improve the legal framework on intellectual property, notably the collective rights 
management system, by aligning with the Collective Rights Management Directive, and 
industrial  property  rights,  by  aligning  with  the  Enforcement  Directive,  with  the  EU 
acquis on design and with the Trade Secrets Directive; 

  implement the Intellectual Property Strategy 2021-2026 and make operational the online 

information platform for law enforcement institutions to exchange data on IPRs. 

In the area of copyright and neighbouring rights, the adoption of the amendments to the law 
on  copyright  to  further  align  it  with  the  EU  acquis,  including  the  collective  rights 
management  system,  has  been  delayed.  The  relevant  IPR  unit  in  the  Ministry  of  Culture 
remains understaffed.  

As  for  industrial  property  rights,  the  State  Office  for  Industrial  Property  continued  its 
cooperation with the EU and international bodies. The strategy on industrial property rights is 
still  to  be  implemented  by  the  authorities  and  incorporated  in  the  new  law  on  intellectual 
property.  The  legislation  on  industrial  property  needs  to  be  aligned,  in  particular  with  the 
Enforcement Directive and the Trade Secrets Directive. 

On  enforcement,  the  information  platform  for  law  enforcement  bodies  to  exchange  IPR-
related data has been set up, but needs to become operational in order to provide full insight 
into the institutional handling of IPR infringements. The coordination body for the protection 
of intellectual property exists, but has yet to address the key challenges with regard to IPRs. 
The Customs Administration maintained its level of seizing counterfeit goods, coming mainly 
from Türkiye. 

Chapter 8: Competition policy 

EU rules protect free competition. They include antitrust rules against restrictive agreements 
between companies and abuse of dominant position, and also include rules on concentrations 
between companies which would significantly impede effective 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.  

The country is moderately prepared in the area of competition. No progress was made. The 
legislative  framework  remains  broadly  harmonised  with  EU  rules.  The  Commission  for  the 
Protection of Competition remains understaffed and continues to face budgetary constraints. 
The  enforcement  record  remains  low.  The  recommendations  from  last  year  were  not 
addressed and remain valid. 

73 

 
 
In the coming year, the country should in particular: 

  strengthen the administrative and financial capacity of the national competition authority; 

  increase the transparency of State aid granted by the government; 

  further align implementing legislation in the area of State aid and antitrust. 

Antitrust and mergers 

The legislative framework is broadly aligned with the EU acquis in the area of antitrust and 
mergers, but implementing legislation has yet to be aligned.  

On the institutional framework, the Commission for the Protection of Competition (CPC) is 
responsible for implementing the Law on the protection of competition. It can impose fines, 
propose  remedies  or  issue  an  opinion  if  competition  rules  are  breached.  The  CPC  may 
approve mergers, with or without conditions, or prohibit them. Its decisions are binding and 
can be subject to an appeal before the Administrative Court.  

The CPC continues to be understaffed, leading to a limited enforcement capacity. Its annual 
budget  remains  insufficient.  The  poor  capacity  of  the  CPC  as  well  as  of  the  courts  dealing 
with antitrust cases hinder proper enforcement.  

On  implementation,  the  number  of  merger  decisions  increased  from  60  in  2020  to  81  in 
2021, including decisions on small cases. The CPC adopted also five misdemeanour decisions 
including  one  on  abuse  of  dominant  position.  The  CPC  should  increase  on-site  inspections 
and  use  the  leniency  instrument  to  strengthen  enforcement.  There  is  still  a  need  for  further 
strengthening of the national courts to apply antitrust and merger rules and for further training 
of judicial professionals in these areas. 

State aid 

The legislative framework on State aid broadly reflects Articles 107 and 108 TFEU. The law 
on State aid and its implementing legislation need to be further aligned with the EU acquis. 
The State aid inventory still lacks transparency.  

On the institutional framework, the CPC is also responsible for implementing the  Law on 
State Aid. The Commission issues non-binding opinions and binding decisions on State aid. 
So far, the CPC has never exercised its power to investigate ex-officio an aid measure not duly 
notified.  Regarding  enforcement  capacity,  the  staff  of  CPC  dealing  with  State  aid  control 
(four in total) remains insufficient.  

Concerning  implementation,  the  CPC  issued  17  decisions  and  26  opinions  on  State  aid  in 
2021,  none  of  them  negative  or  conditional.  The  continuous  requests  for  opinions  and 
notifications of State aid submitted by ministries reflect rising awareness of the aid granting 
public bodies of the existence of State aid rules.  

Liberalisation 

Anti-trust  and  State  aid  rules  also  apply  to  state-owned  undertakings  and  undertakings 
entrusted  with  special  or  exclusive  rights,  except  when  applying  them  would  obstruct  the 
performance of the particular tasks assigned to them. There is no evidence of the existence of 
commercial monopolies within the meaning of Article 37 TFEU.  

Chapter 9: Financial services 

EU  rules  aim  to  ensure  fair  competition  between  financial  institutions  and  their  stability, 
namely  rules  on  banking,  insurance,  supplementary  pensions,  investment  services  and 

74 

 
 
securities  markets.  They  include  rules  on  authorisation,  operation  and  supervision  of  these 
institutions. 

In  the  area  of  financial  services,  the  country  is  moderately  prepared.  Some  progress  was 
made regarding partial alignment with the EU acquis on settlement finality and on securities 
and  investment  funds.  While  alignment  with  the  EU  acquis  is  well  advanced  on  the 
supervisory and regulatory framework for credit institutions, planned alignment in the area of 
insurance  and  capital  market  is  lagging  behind.  Implementation  of  long-term  Basel  III 
liquidity  standards  progressed.  Some  actions  were  taken  to  prevent  unfair  banking  practices 
and  promote  consumer  protection.  Last  year’s  recommendations  were  only  partially 
implemented. In the coming year, the country should in particular:  

  adopt the bank resolution law and implementing legislation and on that basis complete the 

designation of a bank resolution authority; 

  properly tackle and prevent unregistered and uninsured vehicles; 

  continue to address consumer protection and establish a financial Ombudsperson. 

On  banks  and  financial  conglomerates,  in  November  2021,  the  European  Banking 
Authority  acknowledged  the  European  Commission’s  decision  to  consider  the  supervisory 
and regulatory framework applicable to credit institutions in North Macedonia as equivalent 
to that applied in the EU. The capacities of the Ministry of Finance to licence and supervise 
financial companies and financial leasing providers needs to be reinforced. With an end 2021 
leverage ratio of 10.7%, banks hold a vast cushion above the EBA minimum requirement of 
3%.  Efforts  are  ongoing  to  develop  legal  provisions  on  bank  resolution  in  line  with  the  EU 
framework,  notably  the  Bank  Recovery  and  Resolution  Directive.  A  decision  of  the 
Constitutional Court in June 2021 revoked priority to the claims of the deposit insurance fund 
on  a  failed  bank.  The  law  on  deposit  insurance  and  the  banking  law  need  be  amended  to 
improve  deposit  insurance  and  to  address  the  concerns  raised  by  the  Constitutional  Court. 
Consumer protection was addressed through the new national strategy on financial education 
and financial inclusion, adopted in July 2021. The central bank set up a dedicated section on 
its website for consumer information. It issued guidelines on publication of standardised data 
on basic banking products by individual banks, aiming to prevent unfair banking practices. 

As  regards  insurance  and  occupational  pensions,  the  adoption  for  the  law  aligning 
legislation  with  the  Solvency  II  Directive  is  still  pending.  Legislation  that  authorises  the 
Ministry of Finance to set premiums for motor vehicle insurance, which is contrary to the EU 
acquis,  continues  to  be  in  place.  Data  on  insured  vehicles  is  inconsistent  and  no  systemic 
measures are taken to prevent uninsured driving. The 50 % limit on investing in non-domestic 
securities  by  pension  funds  is  not  in  line  with  EU  acquis  and  the  second  stage  of  the 
Stabilisation and Association Agreement. 

On financial market infrastructure, legislation adopted in April 2022 partially aligns with 
the Settlement Finality Directive. Alignment with the Financial Collateral Directive is still not 
complete.  In  February  2022,  a  financial  market  development  strategy  was  adopted  focusing 
on  expanding  the  supply  of  long-term  securities  and  increasing  demand  through  greater 
participation of households as well as domestic and foreign institutional investors.  

As  regards  securities  markets  and  investment  services,  the  law  on  investment  funds  was 
amended in July 2021. This law, as well as adopted implementing legislation on investment 
funds  and  on  securities  aims  to  advance  in  alignment  with  EU  acquis,  including  on 
undertakings  for  collective  investment  in  transferable  securities  (UCITS),  fund  mergers, 
master-feeder structures  and notification procedure. Legislation to further align with the EU 
acquis,  including  the  markets  in  financial  instruments  directive,  the  capital  requirements 

75 

 
 
Directive, as well as provisions on liquidity and solvency ratios for brokerage houses remains 
to be adopted. 

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

North  Macedonia  remains  moderately  prepared  in  this  area  of  consumer  and  health 
protection. Limited progress was made in the reporting period in regard to cancer reporting 
and cancer detection, but not on last year’s other recommendations, which remain valid. In 
the coming year, the country should in particular:  

  align the legal  framework with  the EU  acquis on consumer protection, and strengthen 

the operational structures serving consumer protection; 

  intensify efforts on tobacco control by effectively implementing the EU  acquis on this 

and by ratifying the Protocol to Eliminate Illicit Trade in Tobacco Products; 

  ensure  adequate  funding  and  specialised  knowledge  for  early  detection  of  cancer  and 

rare diseases based in data from the registers. 

Consumer protection 

There  was  no  progress  in  adopting  the  new  law  on  consumer  protection,  and  no  progress 
was reported on capacity building or public investment in this area, though some progress was 
made  in  aligning  the  national  product  safety  rules  with  the  EU  acquis.  The  next  three-year 
Consumer  Protection  Strategy  is  yet  to  be  adopted.  Inspections  by  the  State  Market 
Inspectorate  increased  in  the  reporting  period,  to  a  total  of  3  566  inspections.  The  web 
platform  providing  information  on  consumer  protection  still  needs  to  be  developed.  The 
mediation scheme continues to be expensive and difficult for consumers to access. 

In  2021,  the  Inspectorate  carried  out  473  inspections  under  the  general  product  safety  law 
(up from 428 in 2020) and 131 inspections under the construction products law (up from 20 in 
2020).  Following  these  inspections,  the  Inspectorate  withdrew  harmful  products  from  the 
market, mostly toys, lights, protective gloves, motorcycle helmet and children’s clothing. The 
Inspectorate  has  278  employees  but  has  an  insufficient  number  of  licenced  inspectors  (only 
171) and many staff are close to retirement. On non-safety-related issues further efforts are 
needed  to  define  the  guidance  and  procedure  for  consumers’  appeals  and  means  of 
compensation. 

Public Health 

The  health  sector  in  North  Macedonia  still  faces  losses  of  medical  staff,  as  nurses  and 
specialists, who are moving, either move to the private sector or leave to work abroad. This 
contributes  to  issues  accessing  specialists,  out-of-pocket  health  care  costs  remain  high,  and 
there  is  still  a  lack  of  professional  training  for  using  some  advanced  health  equipment.  The 
2021-2030 Health Strategy and its action plan is designed to address some of these issues and 
provide  high  quality,  efficient  and  effective  health  care,  including  community-based  health 
care. 

There was no progress on tobacco control. The institutional and legal setup is in place and is 
in line with the EU acquis, but it is not systematically implemented - smoking in public areas 

76 

 
 
and restaurants should be sanctioned in line with the EU acquis. North Macedonia has still not 
ratified the Protocol to Eliminate Illicit Trade in Tobacco Products. 

North Macedonia is partly aligned to the EU  acquis on communicable diseases. The 2019-
2023 National Strategy for control of antimicrobial resistance is in line with the conclusions 
of  the  Council  of  the  European  Union.  North  Macedonia  is  gradually  recovering  of  the 
COVID-19  pandemic,  and  the  number  of  positive  cases,  hospitalised  patients  and  fatalities 
decreased  constantly.  The  country  has  abolished  most  preventive  measures.  The  authorities 
report  that  75 %  of  the  population  has  recovered  from  COVID-19  and  consider  that  they 
gained  natural  immunity,  47 %  of  people  received  two  COVID-19  vaccine  doses,  and  7 % 
received  a  third  dose.  North  Macedonia  became  a  member  of  the  EU  Joint  Procurement 
Agreement  on  medical  countermeasures,  and  an  observer  in  the  EU  Health  Security 
Committee. It provides information to the Commission’s COVID-19 data collection system, 
and it nominated a correspondent to the European Centre for Disease Prevention and Control. 

There has been some progress on blood, tissues, cells and organs. The law on blood supply 
safety  is  in  line  with  the  EU  acquis.  There  is  no  plasma-collecting  centre,  and  no  plasma 
fractionation  plants,  though  plasmaphereses  are  performed  at  the  Institute  for  Transfusion 
Medicine. The number of transplantations performed again increased in 2021. A bone-tissue 
bank  has  been  established,  collecting  material  to  be  used  for  transplantation.  On  patients’ 
rights in cross-border healthcare national legislation is still not aligned with the EU acquis. 

On health inequalities, the programme for active healthcare allows several target  groups to 
access healthcare, including the Roma community, and people living in remote areas can get 
visits  by  doctors.  The  Ministry  of  Health  has  a  programme  for  people  with  HIV/AIDS  that 
provides funds for testing and basic monitoring tests, and antiretroviral therapy is available to 
all  diagnosed  patients.  However,  the  overall  budget  for  HIV/AIDS  prevention  was  cut  by 
40%,  threatening  the  treatment  of  people  living  with  HIV/AIDS  and  HIV/AIDS  prevention 
efforts. The main beneficiaries of these funds are non-governmental organisations that work 
directly with risk groups. The new strategy to combat HIV is yet to be not adopted Funding 
for  cancer  screening  remains  insufficient.  The  national  cancer  register  is  functional  and 
regularly  fed  with  new  data.  The  national  programme  for  early  detection  of  cancer  is 
operational.  On  medicines for human and veterinary use, national legislation needs  to  be 
further  aligned  with  the  EU  acquis.  The  national  strategy  2021-2030  covers  the  aspects  of 
mental health, health promotion, nutrition and physical activity. The national registers on 
rare diseases are operational, and the relevant definitions are in line with EU standards. 

CLUSTER 3: COMPETITIVENESS AND INCLUSIVE GROWTH  

Cluster  3  on  competitiveness  and  inclusive  growth  covers  the  following  chapters:  digital 
transformation and media (chapter 10); taxation (chapter 16); economic and monetary policy 
(chapter  17);  social  policy  and  employment  (chapter  19);  enterprise  and  industrial  policy 
(chapter  20);  science  and  research  (chapter  25);  education  and  culture  (chapter  26)  and 
customs union (chapter 29). Overall, North Macedonia is moderately prepared in most of the 
areas  covered  by  this  cluster.  It  has  a  good  level  of  preparation  in  the  areas  of  science  and 
research and in the customs union. Some progress was made in most of the areas covered by 
this  cluster.  Good  progress  was  made  in  the  area  of  economic  and  monetary  policy.  More 
efforts are needed, however, particularly in  areas where limited progress was made, such as 
digital transformation and media as well as education and culture.  

Chapter 10: Digital transformation and media 

77 

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

internal  market 

functioning  of 

the  smooth 

the 

North  Macedonia  is  moderately  prepared  in  the  area  of  digital  transformation  and  media. 
Limited progress was made during the reporting period. The number of electronic services 
provided  to  citizens  and  businesses  has  slightly  increased.  The  112  European  emergency 
number was officially introduced.  

As last year’s recommendations have been partially addressed, in the coming year the country 
should in particular: 

  finalise  and  adopt  the  long-term  information  and  communication  technology  (ICT) 
strategy;  align  national  legislation  with  the  European  Electronic  Communications  Code 
and  the  EU  Broadband  Cost  Reduction  Directive;  and  continue  efforts  to  align  national 
legislation with the EU Directive on Security of Network and Information Systems (NIS 
Directive)/ and the 5G toolbox; 

  strengthen  the  independence  and  capacity  of  the  media  regulator,  the  public  service 

broadcaster and the regulator on electronic communication;  

  improve  the  functioning  of  the  112  emergency  number  by  ensuring  adequate  human 

resources and improve communication among emergency services. 

During  the  reporting  period,  North  Macedonia  continued  to  successfully  participate  in  the 
Digital  Agenda  for  the  Western  Balkans  and  fully  implemented  the  Regional  Roaming 
Agreement, benefiting from the regional roaming-free zone since July 2021. Implementation 
of the 2019-2023 national broadband operational plan was further delayed. Implementation of 
the  2018-2022  national  cybersecurity  strategy  accelerated  and  the  112  European  emergency 
number  was  officially  introduced  in  the  country.  However,  the  communication  among 
emergency services is not yet adequate and human resources are not yet sufficient.  

to 

implement 

the  by-laws 

the  amendments 

On electronic communications and information technology, in 2021, 77.92 % of the total 
number of households had access  to  fixed broadband internet,  while nation-wide broadband 
coverage  was  99.48 %.  Mobile  broadband  take-up  was  75.83 %.  Access  to  ultrafast 
broadband  internet  was  2.32 %  of  the  total  number  of  households.  Steps  were  taken  by  the 
Agency for Electronic Communications to grant approvals for use of radiofrequencies for 5G. 
Frequencies  were  granted  in  2022  to  two  telecom  operators.  The  legal  framework  on 
electronic communications needs to be further aligned with the EU acquis. The regulator has 
adopted 
the  Law  on  Electronic 
Communications,  envisaging  new  responsibilities  for  the  regulator  with  regard  to  prior 
security approval for installation of 5G equipment by the telecom operators. The draft Law on 
Security  of  Networks  and  Information  Systems  has  not  yet  been  adopted.  The  Ministry  of 
Information Society and Administration needs to strengthen its capacities to drive the digital 
transformation.  Concerns  remain  over  the  independence  of  the  regulator  for  electronic 
communications.  The  Law  on  Electronic  Communications  and  the  Law  on  Audio  and 
Audiovisual  Media  Services  need  to  be  further  aligned  with  the  EU  acquis.  With  regard  to 
competitive safeguards, the Commission for Protection of Competition initiated a revision of 
the  tendering  procedure  for  5G  published  by  the  Agency  for  Electronic  Communications  in 
November  2021,  based  on  discounted  prices  for  the  potential  operator  entering  the  telecom 
market.  However,  a  few  months  later  the  Commission  needed  to  re-start  the  tendering 
procedure. 

to 

78 

 
 
North  Macedonia  has  yet  to  align  national  legislation  to  the  EU’s  Regulation  on  electronic 
identification  and  trust  services  for  electronic  transactions  in  the  internal  market  (eIDAS 
Regulation).  

Regarding digital transformation, the long-term information and communication technology 
(ICT) strategy (2021-2026) is still not adopted. The strategy for development of digital skills 
and a reference framework for digital literacy throughout the society should be developed and 
adopted.  Improving  digital  literacy  is  a  priority  under  the  education  strategy,  to  ensure  the 
digital transformation through a cross-cutting approach. 

The national e-portal for services has been upgraded. In 2021, the number of registered users 
and services registered on the e-portal slightly increased, but  further steps need to be taken. 
The interoperability system's utilisation is still impeded by a lack of communications software 
in  many  institutions,  as  well  as  a  lack  of  willingness  to  fully  exploit  its  capabilities.  To 
modernise  and  digitalise  the  public  sector,  more  efforts  and  better  cooperation  amongst 
institutions  are  still  required.  The  quality  of  data  in  the  population  register  needs  to  be 
improved and continuously verified with other registers.  

With regard to e-commerce, the National Bank reported 61% increase of Internet transactions 
by  citizens  in  the  first  semester  of  2021.  With  regard  to  statistical  performance  and  digital 
competitiveness, collection of data based on the Digital Economy and Society Index (DESI) 
indicators has been estimated to be available and fully aligned in 87 %.   

On  audio-visual  policy,  the  Parliament  further  delayed  the  appointment  of  the  members  of 
the media regulator and the public broadcaster councils, in accordance with the Law on Audio 
and Audio-Visual Media Services (LAAVMS). Media outlets continued receiving support as 
part of the measures aimed to alleviate the effects of the COVID-19 pandemic. 

The  allocation  of  state  funds  for  the  broadcasting  sector,  securing  the  budget  for  the  public 
service  broadcaster,  media  regulator  and  broadcasting  public  enterprise,  has  been  further 
reduced in 2021, reaching 0.59 % of the total revenues realised in the year preceding the fiscal 
year for which the amount is prescribed. The Public Service Broadcaster received additional 
funding,  thus  slightly  increasing  its  percentage.  LAAVMS  defines  a  gradual  increase  over 
time (up to 0,8 % in 2019; up to 0,9 % in 2020; 1 % as of 2021). However, the government 
keeps a discretionary right in distribution of the funds by conditioning the allocations not to 
impair the fair allocation of budget  funds and not  to  affect  the funds planned for all budget 
expenditures.  

The  Agency  for  Audio  and  Audiovisual  Media  Services  continued  to  be  proactive  in 
promotion  of  media  literacy,  gender  equality  in  the  media  programmes,  as  well  as  in 
condemning the pressure and threats on journalists and media outlets. Transparency of media 
ownership  is  a  legal  obligation  for  the  audio-visual  and  print  media.  The  media  regulator 
publishes the registers of the broadcasters and print media on its website. However, there are 
no legal obligations for online media with regard to media ownership.  In October 2021, the 
government  adopted  the  National  Strategy  and  Action  Plan  on  building  resilience  and 
confronting hybrid threats  (2021-2025).  These documents  include  a wide range of activities 
addressing challenges of disinformation and hybrid threats. The audio-visual sector continued 
to benefit from the country’s participation in the Creative Europe Media sub-programme with 
five projects supported in the period 2020-2021. 

Chapter 16: Taxation 

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

79 

 
 
North Macedonia is moderately prepared in the area of taxation. Some progress was made 
specifically in reducing the administrative burden for taxpayers and the VAT refund process. 
The  country  needs  to  further  improve  the  capacity  of  the  tax  administration  by  efficiently 
implementing  the  2021-2025  Tax  System  Reform  Strategy  and  to  ensure  an  effective 
automatic  exchange  of  tax  information  with  EU  Member  States.  North  Macedonia  is 
included  in  the  EU  list  of  non-cooperative  jurisdictions  for  tax  purposes  due  to  having  in 
place a preferential tax regime, which it committed to reform by the end of 2022.  

Recommendations of last year’s report were not fully implemented and remain valid. In the 
coming year, North Macedonia should in particular: 

  develop  a  new  integrated  IT  tax  system  for  the  Public  Revenue  Office,  improve  its 

compliance risk management and further extend e-services for tax payers; 

  start preparation for putting in place a mechanism for the effective implementation of the 
automatic exchange of tax information with EU Member States in line with the OECD 
Global Standard; 

  amend the Law on technological and industrial development zones by the end of 2022. 

On  indirect  taxation,  the  Law  on  VAT  was  amended  in  March  2022  to  allow  VAT 
exemption for essential products for consumption until 31 May 2022. Preferential VAT rate 
of 10 % was introduced for some energy products to alleviate the effects of high international 
energy prices. The application of a preferential VAT rate of 5 % for electricity for households 
was  extended  until  the  end  of  2022.  Delays  remain  in  the  VAT  refund  process,  although  it 
improved in 2021, with 55 % of claims refunded within the legal deadline. The Law on excise 
was  amended  in  March  2022  to  allow  for  reduction  of  excise  duties  on  gas  and  products 
derived  from  oil,  in  order  to  mitigate  the  impact  of  high  international  energy  prices  on  the 
final  consumers.  Implementing  regulation,  which  was  adopted  to  reflect  these  change, 
remained in force until 31 May 2022. 

There were no changes regarding direct taxation. A flat 10 % rate applies to personal income 
tax. Interests on savings and capital gains on securities remain exempt. The country still needs 
to align its legislation with the Merger Directive. 

On  administrative  cooperation  and  mutual  assistance,  North  Macedonia  has  signed  50 
double  taxation  agreements,  including  with  all  EU  Member  States,  except  Cyprus,  Greece, 
Malta  and  Portugal.  The  country  has  not  yet  committed  on  a  date  to  start  the  automatic 
exchange of financial account information as per the Organisation for Economic Co-operation 
and  Development  (OECD)  standard.  The  country  remains  dedicated  to  implement  the 
Inclusive Framework on Base Erosion and Profit Shifting (BEPS) minimum standards. North 
Macedonia has committed to amend its preferential tax regime in the free economic zones by 
the end of 2022, in the framework of the Forum on Harmful Tax Practices and the EU’s own 
efforts to promote tax good governance.  

Regarding operational capacity and computerisation, the Public Revenue Office still has to 
improve  its  business  processes,  implement  a  new  integrated  IT  tax  system,  develop 
compliance  risk  management  and  further  extend  e-services.  The  2021-2025  Tax  System 
Reform  Strategy  is  being  implemented.  The  Public  Revenue  Office  (PRO)  is  facilitating 
voluntary compliance by issuing pre-filled annual tax returns through the electronic personal 
tax platform. Implementation of the scheme for monetary inducement for customers to require 
invoices  and  tickets  on  their  purchases  continued,  with  the  aim  of  combating  the  informal 
economy. The PRO took part in joint inspections with other national bodies to identify unpaid 
tax liabilities and unregistered taxpayers to improve tax collection. 

80 

 
 
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. 

The  country  remains  moderately  prepared  in  the  area  of  economic  and  monetary  policy. 
Good  progress  was  made  as  the  Organic  Budget  Law  was  adopted,  providing  for  fiscal 
rules and a fiscal council. Furthermore, measures to counteract the socio-economic impact of 
COVID-19  were  implemented  and  short-term  measures,  aimed  at  mitigating  the  economic 
impact  of  the  war  in  Ukraine,  were  put  in  place.  On  monetary  policy,  alignment  of  the 
country’s legal framework with the EU acquis is at an advanced stage. On economic policy, 
alignment  is  only  partial  and  shortcomings,  including  public  investment  management, 
persist. Since the Commission’s 2021 recommendations were not fully implemented, in the 
coming year, North Macedonia should, in particular:  

  implement  the Organic  Budget  Law  which includes provisions for fiscal rules,  a fiscal 

council and a medium-term budgetary framework; 

  ensure the timely establishment of an independent fiscal council;  

  exclude  the  central  bank  from  the  scope  of  the  law  on  administrative  servants  and  the 

law on public sector employees to safeguard its full independence. 

On  monetary  policy,  the  alignment  of  the  country’s  legal  framework  with  the  EU  acquis 
continues to be at an advanced stage. In line with the objectives of the Eurosystem/European 
System of Central Banks, the central bank pursues price stability as its primary objective and 
supports  economic  growth  through  its  policies.  It  assumes  the  central  role  for  prudential 
supervision of the banking sector and acts as a guarantor of financial stability. The operational 
and  financial  independence  of  the  central  bank  is  provided  for  in  the  Law  on  the  National 
Bank.  However,  to  safeguard  the  central  bank’s  independence  in  its  key  statutory  tasks, 
including in staffing issues, in line with the Law, the central bank needs to be excluded from 
the scope of the law on administrative servants and from the law on public sector employees. 
Relatedly,  the  central  bank  should  be  able  to  conduct  internal  organisations,  employment 
plans,  and  transfer  of  employees  from  other  public  institutions  without  having  to  seek  the 
approval of the Ministry for Informatics Society and Administration or other ministries. 

Regarding  economic  policy,  North  Macedonia  adopted  in  September  2022  the  Organic 
Budget  Law  establishing  numerical  fiscal  rules for the general  government  deficit and debt, 
aiming  at  alignment  with  the  EU  Budgetary  Frameworks  Directive.  The  law  also  contains 
provisions for setting up an independent fiscal body to monitor compliance with the rules, as 
well as for a strengthened medium-term fiscal framework. Currently, the multi-annual Fiscal 
Strategy  provides  revenue,  expenditure  and  deficit  projections  for  a  5-year  horizon.  While, 
generally, these projections provide the basis for the annual budget of year t, frequent budget 
revisions  in  mid-year  often  require  substantial  adaptations  of  the  multi-year  fiscal  strategy. 
Hence,  the  government  revised  the  Fiscal  Strategy  2022-2024  in  December  2021,  after  the 
July  2021  budget  revision  had  rendered  the  original  fiscal  strategy,  adopted  in  June  2021, 
obsolete. The original 2022 budget was based on these assumptions, but had to be revised in 
May 2022, as a new set of fiscal support measures to mitigate the impact of higher energy and 
food prices on companies and households had to be accommodated, raising the deficit target. 
In  May  2022,  too,  the  government  adopted  the  Fiscal  Strategy  2023-2025.  It  is  based  on 
obsolete growth and inflation projections, and is unlikely to provide a plausible basis for the 
upcoming 2023 draft budget. Macroeconomic and fiscal projections are currently done at the 
Ministry of Finance. Upon implementation of the OBL, the new fiscal council is expected to 

81 

 
 
take over responsibility for projections for the preparation of the annual budget and the Fiscal 
Strategy. 

The availability and quality of excessive deficit procedure (EDP) statistics deteriorated in the 
April 2022 notification. The notification tables contained only the 2018-2020 data which had 
already  been  reported  in  October  2021.  Compliance  of  data  with  ESA  2010  is  lacking  in  a 
number of areas, such as the delimitation of the general government sector, which requires the 
reclassification of relevant public sector enterprises. The government publishes the amount of 
government guarantees to public sector enterprises, which constitute contingent liabilities for 
the government. 

The  2022-2024  Economic  Reform  Programme  (ERP)  was  submitted  on  time.  The 
macro-economic  framework  is  coherent  and  consistent,  while  overly  optimistic.  In  terms  of 
structural reforms, the focus is on green transition. The country has partially implemented the 
country-specific  policy  guidance  jointly  adopted  by  the  EU  and  the  Western  Balkans  and 
Türkiye at ministerial level in July 2021. Efforts to turn the ERP into a more policy relevant 
document to guide economic reforms consistent with other national plans and strategies need 
to continue. 

Chapter 19: Social policy and employment  

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

The  country  remains  moderately  prepared  in  the  area  of  social  policy  and  employment. 
Some progress was made with the further reduction of unemployment rate, an increase in the 
benefits  for  social  assistance  and  the  continuation  of  implementation  of  mitigating  socio-
economic measures to  address  the socio-economic impact  of the COVID-19 pandemic. The 
implementation of the Youth Guarantee scheme continued successfully in the entire country. 
The  implementation  of  the  new  Social  Protection  Act  resulted  in  a  slight  reduction  of  the 
poverty rate, which however still remains high.  

As  last  year's  recommendations  were  only  partially  implemented,  they  remain  valid.  In  the 
coming year, the country should in particular: 

  continue to implement labour market activation measures for young, long-term and low-
skilled  unemployed  people,  including  women,  persons  with  disabilities  and  Roma,  and 
ensure proper evaluation of the measures; 

  further improve the capacities of the State Labour Inspectorate to address issues related to 
occupational safety and health; develop a system for tracking of injuries and fatalities at 
work; and reinforce bipartite social dialogue between employers and workers; 

  establish  a  monitoring  and  evaluation  system  for  social  services  and  continue  the  social 

protection reform with stronger links to employment activation. 

With regard to labour law, amended legislation established a retirement age limit of 64 years 
and 15 years of service as cumulative conditions for termination of employment on the basis 
of the age of the employee. The Law on the Minimum Wage and Labour Law were amended 
with changes to the criteria and methodology for payment of the minimum wage resulting in 
increase of minimum  wage  from  1 April 2022, and establishing Sundays  as the weekly rest 
day  from  1  January  2022.  Work  is  ongoing  on  the  new  labour  law  with  discussion  on  not 
aligned  and  open  issues.  The  capacities  to  implement  labour  policies  and  legislation 
improved.  However,  they  remain  insufficient,  as  do  the  capacities  of  the  State  Labour 
Inspectorate (SLI), whose overall performance remains low. The SLI improved its capacities 

82 

 
 
by  additional  employment  of  twenty-five  inspectors  and  implementing  a  series  of  trainings: 
further improvement is needed in the field of occupational safety. The SLI performed 9,530 
inspections (6,308 in the field of labour relations and 3,222 in the field of OSH). There were 
135 heavy injuries, and 30 fatal cases. 

On health and safety at work, the government  adopted a Strategy for Occupational  Safety 
and  Health  2021-2025  and  Action  Plan  for  the  period  2021-2023  in  December  2021.  The 
preparation of a new law continued taking into account the impact of COVID-19 pandemic. 
The main challenge remains the inadequate application of the existing provisions contained in 
the  Labour  Law,  Occupational  Safety  and  Health  Law.  The  knowledge  of  employers  and 
employees of their respective rights and obligations is limited. The State Labour Inspectorate 
faced an increased number of requests due to the COVID-19 pandemic, including inspections 
related to working conditions.   

COVID-19 remains recognised as occupational disease only for workers in the health sector 
with a payment of full salary compensation if infected with the COVID-19 at the workplace. 
Workers from other sectors are not included in these provisions.  

The  functioning  of  the  tripartite  social  dialogue  at  the  national  and  local  level  is  refining, 
while  on  the  bipartite  level  it  is  still  lagging  behind.  The  adoption  and  enforcement  of 
collective  agreements  in  the  private  sector  is  poor.  Consultations  with  social  partners  took 
place  during  all  changes  in  labour  relations  including  preparations  of  the  new  labour  act. 
Workers’  confidence  in  trade  unions'  capacity  to  function  independently  has  not  improved. 
The  implementation  of  the  Law  on  the  peaceful  settlement  of  labour  disputes  is  not  yet 
implemented. Social partner’s capacities still need to  be strengthened. Provisions in  the law 
on  primary  education  and  the  law  on  secondary  education,  allowing  for  the  replacement  of 
striking  workers,  remain  unchanged.  Procedures  for  the  registration  of  trade  unions  and 
employers’  associations  in  the  Registers  remain  with  the  Ministry  of  Labour  and  Social 
Policy.  The  bipartite  social  dialogue  in  the  public  sector  resulted  in  the  conclusion  and 
restored respect of collective agreements, which is not the case in the private sector. 

On  employment  policy,  during  2021,  the  government  adopted  additional  packages  of 
temporary socio-economic measures supporting economy and employment, in order to tackle 
the  effects  of  continuing  COVID-19  pandemic.  The  Labour  Market  forecasting  model  was 
extended  to  cover  20  sectors  and  the  occupational  outlook  to  74  occupations.  The  National 
Employment Strategy 2021-2027 was adopted together with Employment Action Plan 2021-
2023. The implementation of measures on undeclared work under the 2018-2022 Strategy for 
the  Formalisation  of  the  Informal  Economy  continued.  The  Government  adopted  an  Action 
plan for 2021-2022. The Employment Service Agency’s capacity should be strengthened, in 
particular  in  order  to  better  deliver  on  active  labour  market  measures,  the  Youth  Guarantee 
Scheme, the newly adopted policy measures targeting the negative effects of COVID-19 and 
their monitoring, evaluation and impact assessment. 

The  unemployment  rate  is  at  15.2 %  in  Q4  2021,  the  lowest  level  since  the  country’s 
independence.  The  female  employment  rate  increased  by  0,5  pp  (48,6 %  of  the  15-64  year-
olds)  and  youth  (15-24  year-olds)  employment  decreased  0,3  pp  to  18,3 %  and  the  youth 
unemployment  rate  decreased  to  34,6 %  in  Q4  2021.  This  is  mainly  due  to  the  COVID-19 
crisis.  The  main  measure  addressing  youth  unemployment  continues  to  be  the  Youth 
Guarantee Scheme.  In 2021, more than 19 000  young people participated in  the programme 
with 41 % successfully finding employment or training opportunities. 969 Roma people were 
included in the Youth Guarantee, out of which 148 were employed in the period of 4 months. 
The  employment  of  Roma,  the  long-term  and  low-skilled  unemployed,  and  persons  with 

83 

 
 
disabilities is supported by the guaranteed minimum assistance scheme introduced by the Law 
on Social Protection. 

There is a moderate level of preparation for the participation in the European Social Fund. 
The  indirect  management  with  the  beneficiary  country  (IMBC)  projects  are  ongoing.  There 
was  no  progress  in  enhancing  capacities  within  state  bodies  to  ensure  their  readiness  to 
manage  the  ESF.  (See  also  Chapter  22  -  Regional  policy  and  coordination  of  structural 
instruments). 

Some progress was made in the field of social inclusion and protection. Implementation of 
the reforms deriving from the new law on social protection has progressed. There is a 45 % 
increase in the coverage of the beneficiaries of Guaranteed Minimum Assistance (GMA) and 
48,8 % in child protection system. 28 749 students from primary and secondary school used 
the  right  to  educational  allowance.  3 300  individual  activation  plans  were  prepared  for  the 
users of the GMA. An electronic exchange of information between employment services and 
social  protection  services  was  set  up.  The  2022–2032  National  Programme  for  the 
Development of Social Protection was prepared. The share of people living at risk of poverty 
or social exclusion slightly decreased in recent  years but still stands at a very high figure of 
32.6 % in 2020. The full-established monitoring and evaluation system for social services and 
proper centralised IT system to follow social assistance schemes is deficient. Decentralisation 
of social assistance remains moderate. 

Implementation of the 2018-2027 national strategy on de-institutionalisation has progressed. 
Resettlement of adults from institutional care to foster families or community-based housing 
continued.  The  government  adopted  the  new  Action  plan  for  implementation  of  the 
Deinstitutionalisation Strategy 2002-2024. Delivery  of services such  as  home care, personal 
assistance, supported living and respite care were established. The methodology for licensing 
and determination of social service costs was adopted and non-public social service providers 
were licensed. Citizens’ associations and private entities have been licensed as social services 
providers.  The  resettlement  of  the  beneficiaries  from  the  Special  Institute  Demir  Kapija 
continues  with  the  opening  of  15  new  residential  units  in  the  municipalities  of  Negotino, 
Veles, Demir Kapija and Skopje, some managed by private licensed service providers. 

On  equality  between  women  and  men  in  employment  and  social  policy,  there  is  a 
noticeable  gender  gap in the labour market.  In particular, the employment  rate for men was 
64.3 % compared with 45,5 % for women in 2021. Data on incidents of sexual harassment in 
the  workplace  or  a  system  to  investigate  such  are  not  available.  According  to  the  Law  on 
Health  Insurance,  women  need  to  work  at  least  six  months  with  the  same  employer  to  be 
entitled to maternity leave. Childcare and pre-school capacities increased during 2021 with 11 
new facilities opened, which should support women return to the workplace. In 2022, care and 
education are delivered in 77 public and 30 private kindergartens. An additional increase of 
capacities  is  required  in  particular  in  urban  areas.  Both  gender  stereotyping  and  the  gender 
pay gap persist.  

The Law on the Protection against Workplace Harassment has to be adopted and activities for 
ratification  of  the  2019  Violence  and  Harassment  Convention  of  International  Labour 
Organisation number 190 continued.  

On  non-discrimination  in  employment  and  social  policy,  the  comprehensive  legislative 
framework  is  in  place.  In  2021,  the  new  Commission  for  the  Prevention  and  Protection 
against  Discrimination  worked  on  167  complaints  (77  complaints  filed  to  the  former 
Commission for Prevention and Protection against Discrimination, with 90 complaints being 
submitted to the new Commission). The Commission found that there was discrimination in 
40  cases,  whereas  65 %  of  the  cases  referred  to  employment  and  labour  relations,  and  to 

84 

 
 
access to goods and services. The Ombudsman worked on 43 complaints for discrimination, 
out of which 22 cases in employment and labour relations, and six in the access to goods and 
services. (See also Chapter 23 — Judiciary and Fundamental Rights). 

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-sized 
enterprises (SMEs).  

The  country  is  moderately  prepared  in  this  area.  Some  progress  was  achieved  in 
implementing  measures  to  support  companies  in  mitigating  the  damaging  effects  of  the 
COVID-19 pandemic as well as inflationary pressures (especially in the area of energy) and 
supply  chain  disruptions  due  to  the  war  in  Ukraine.  Moreover,  some  efforts  were  made  to 
formalise  the  informal  economy.  Legislation  is  not  yet  fully  aligned  with  the  EU  Late 
Payment Directive. 

The Commission’s 2021 recommendations were not fully implemented. In the coming  year, 
the country should: 

  consolidate  the  institutional  structure  and  mandates  of  public  bodies  to  ensure  effective 

implementation, monitoring and evaluation of strategies and policy measures; 

  ensure  high  level  political  commitment  when  implementing,  assessing  and  renewing  the 
strategy and action plan for formalising the informal economy, with specific attention to 
its business environment component; 

  develop measures to increase competitiveness of domestic companies and their integration 

in global value chains, other than state aid. 

Enterprise and industrial policy principles are incorporated in several strategic documents 
under the competence of different national authorities. Nevertheless, the presence of several 
public  bodies  with  overlapping  and  conflicting  mandates  makes  the  institutional  set-up 
complex  and  resource  inefficient.  The  Economic  Growth  Plan  (EGP)  remains  the  country’s 
most  important  horizontal  list  of  measures.  The  Law  on  support  of  investments,  which 
provides  the  legal  framework  for  the  Plan,  was  amended  to  allow  for  more  flexibility  and 
increased grounds for state aid, in particular on large investments. The scope and objective of 
State  aid  granted  under  the  EGP  is  still  unclear  and  no  impact  assessment  of  State  aid  was 
made since its introduction.  

Most of the existing strategies lack proper evaluation mechanisms, indicators and systematic 
impact  assessment.  A  monitoring  and  evaluation  unit  in  the  Ministry  of  Economy  is  in  its 
early  stages.  In  addition,  the  country  still  has  no  strategy  for  attracting  foreign  investments 
and  promoting  innovation,  despite  various  programmes  implemented  by  the  Fund  for 
Innovation and Technological  Development.  A  Smart  Specialisation Strategy and an  Export 
Promotion Strategy, which helps  companies’ transition  to  higher value-added activities, still 
have to be adopted.  

The  impact  of  the  COVID-19  as  well  as  new  risks  stemming  from  Russia’s  invasion  of 
Ukraine,  including  high  energy,  commodity  and  food  prices,  combined  with  supply-chain 
disruptions,  have  exacerbated  existing  structural  challenges.  They  negatively  affected 
competitiveness and put significant additional burden on enterprises. Further to the six sets of 
measures to increase resilience of companies against the COVID-19 pandemic introduced in 
2021, the government adopted a EUR 400 million package in March 2022 to protect citizens 
from rising food and energy prices and to help companies to maintain liquidity. With the aim 

85 

 
 
to  support  economic  recovery  through  increased  investments  in  greening,  innovation, 
digitalisation and human capital, an acceleration plan was adopted in October 2021, targeting 
specifically private sector co-funding. 

Frequent  changes  to  the  regulatory  framework,  complex  administrative  procedures,  absence 
of  rules  in  para-fiscal  charges,  uneven  enforcement  of  business  regulations  and  skills 
mismatches  in  the  labour  market  remain  major  obstacles  to  doing  business.  The  linkages 
between  enterprises  and  other  innovation  actors  remain  very  weak.  In  October  2021,  the 
government adopted a new action plan for formalisation of the informal economy, following a 
report on implementation of the previous plan. On the basis of a published list of para-fiscal 
charges  along  with  their  value,  efforts  have  started  in  view  of  evaluating,  annulling, 
optimising  and  rationalising  these  charges,  which  could  also  help  the  formalisation  of  the 
informal  economy.  Efforts  continued  to  improve  the  national  e-services  portal,  which 
provides electronic services to citizens and companies. 

On  policy  instruments,  no  progress  was  made  in  further  aligning  the  Law  on  financial 
discipline to the EU Late Payment Directive, notably in the context of public bodies’ payment 
obligations. 

The  post-investment  bonuses  granted  to  companies  under  the  EGP  continue  potentially  to 
distort market competition. While the government approved seven projects of national interest 
according to the Law on strategic investments, the policy objective and discretionary power to 
award public funds for high budget investments under this law remains to be clarified.  

Commercial bank lending is still the main source of private sector financing and alternative 
finance  remains  limited,  also  due  to  an  insufficient  legal  framework  for  factoring  and 
microfinance. The Development Bank introduced a guarantee facility and a subsidised credit 
line for micro and small companies. North Macedonia expressed its interest to participate in 
the  Single  Market  Programme  (SMP).  Formal  negotiations  for  an  Association  Agreement 
started in March 2022 and are progressing. 

In  terms  of  sectoral  policies,  the  industrial  strategy  focuses  on  the  manufacturing  industry 
without  sectoral  prioritisation.  During  the  process  of  developing  a  smart  specialisation 
strategy, the following sectors were identified:  smart  agriculture and food industry, industry 
4.0  (encompassing  the  mechanical,  metal  processing  and  automobile  industry),  as  well  as 
smart buildings and materials. 

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,  especially  where  there  is  scientific  excellence 
and solid investment in research.  

The  country  has  a  good  level  of  preparation  in  the  area  of  science  and  research.  Some 
progress was made in the research and innovations capacities in both the public and private 
sector as new funds for innovations were distributed to private companies; the National Road 
Map  on  Research  Infrastructure  was  developed;  and  access  to  Horizon  Europe  and  the 
European Open Science Cloud was secured. In the coming year, the country should: 

  develop measures to promote Horizon Europe and other EU financing instruments in the 

area; 

  ensure sufficient financing of the Innovation Fund; 

  adopt 

the  Smart  Specialisation  Strategy  and  start  developing  measures  for 

its 

implementation. 

86 

 
 
Some  progress  was  made  to  align  with  European  standards  on  research  and  innovation. 
About 50 scientific and research projects of special national interest, or for the  development 
of laboratory resources, received some EUR 4 million of public funds. Since August 2021, the 
Ministry  for  Education  and  Science  has  been  actively  participating  in  the  work  of  the 
European  Open  Science  Cloud  Governance  Board.  Furthermore,  the  Faculty  of  Information 
Technology and Computer Engineering has been accepted as a member of the European Open 
Science  Cloud.  The  Fund  for  Innovations  and  Technological  Development  undertook  an 
evaluation  of  the  implementation  strategy  for  research  and  innovations  2015-2020.  Despite 
such developments, the investment in research and innovation is still low, at 0.38% of GDP. 
In particular, the participation by the private sector in overall research spending remains low, 
at 0.1 % of GDP. 

The  country’s  performance  in  Horizon  Europe,  the  EU’s  Framework  Programme  for 
Research  and  Innovation,  has  continued  to  improve  (reaching  14  projects  with  EUR  2.8 
million  funding  in  2021).  The  International  Agreement  between  the  European  Union  and 
North  Macedonia  for  its  full  association  to  Horizon  Europe  was  signed  in  December  2021, 
with a retroactive effect as of 1 January 2021.Regarding the new European Research Area, 
the country’s research capacity has slightly improved, thanks to a public investment of about 
EUR  3.6  million.  However,  the  research  capacity,  compared  with  the  EU  average,  remains 
weak. The country signed a new agreement for cooperation in the field of education, science 
and  technological  development  with  China,  bringing  the  total  number  of  international 
agreements in this area to 27, out of which 11 are signed with EU Member States. However, 
funds  and  the  scope  of  cooperation  remain  modest.  The  national  roadmap  on  research 
infrastructure needs was finalised with support from the Regional Cooperation Centre 

On  innovation,  the  European  Innovation  Scoreboard  classifies  North  Macedonia  as  an 
‘emerging  innovator’  with  improved  performance,  according  to  EU  standards.  Since  its 
establishment in 2014, the Fund for Innovation and Technological Development has invested 
more than EUR 80 million public funds in about 800 companies to stimulate innovations and 
adoption of new technologies.  

The  preparation  for  the  Smart  Specialisation  Strategy  has  reached  the  final  phase  –  the 
entrepreneurial discovery process and should then be adopted and implemented. 

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.  

North  Macedonia  is  moderately  prepared  in  the  area  of  education  and  culture.  Limited 
progress was made in the reporting period, still impacted by the COVID-19 pandemic. The 
implementation of the 2018-2025 education strategy is slow, as is the development of a proper 
monitoring system.  

The  recommendations  of  last  year’s  report  were  only  partially  addressed  and  most  remain 
valid. In the coming year, North Macedonia should in particular: 

  adopt the Vocational Education and Training (VET) law and establish and operationalise 

the regional VET centres;  

  finalise and adopt the Law for Adult Education; 

87 

 
 
  improve  access  to  quality  education  for  all,  in  particular  children  with  disabilities  and 
children from Roma communities increase pre-school enrolment and continue improving 
support for teachers’ training and professional development. 

The  Law on Primary Education started to  be implemented in  the 2019-2020 academic  year, 
providing  a  basis  for  inclusive  and  quality  education  for  all.  According  to  the  Concept  for 
Primary Education, a new curriculum for students in the first four grades was adopted for the 
academic year 2021-2022. A significant number of trainings of teachers on the new curricula 
was conducted. 

The new VET law still has not been adopted. It emphasises work-based learning and the role 
of  five  regional  VET  (RVET)  centres  to  be  established  across  the  country,  expecting  to 
provide  specific  trainings  targeted  to  the  local  job  market  needs  in  coordination  with  the 
business community. RVET should also eventually become centres of excellence with major 
investments  carried  out  in  providing  support  to  schools.  A  campaign  was  developed  to 
promote  vocational  education  in  the  country  under  the  motto  “Learn  smart,  work 
professionally”.  Business  companies,  vocational  high  schools,  the  Chambers  of  Commerce 
and the Ministry of Education are supporting the development of a curriculum in schools with 
an increased number of  internships in  private companies. To this purpose, almost  100 dual-
education classes were opened, with an increased number of practical education supported by 
public  private  partnerships.  The  Law  for  Adult  Education  needs  to  be  adopted  urgently  and 
further clarity is needed on the next steps of the reform 

Public  spending  on  education  and  training  increased  slightly  to  3.76%  of  GDP  in  2021, 
which is still far from the EU average of 5%. After a period of budged reduction due to the 
pandemic, the 2021 education budget prioritised investment to improve the quality of primary 
and  secondary  education.  Although  some  progress  was  made  on  pre-school  education,  the 
overall  level  of  enrolment  remained  low,  especially  in  the  COVID-19  context.  Whereas  the 
EU Education and Training target for 2020 on early childhood education and care attendance 
is set at 95 %, only 45 % of children from 3-6 years of age in North Macedonia were enrolled 
in  licensed  early  childhood  education  institutions  in  2020-2021.  This  is  a  slight  increase 
compared to the previous year. In addition to expanding the capacities for inclusion of a larger 
number of children in pre-school education, efforts have been done to improve the quality of 
pre-school education. 

As  for  the  other  educational  levels,  90.8 %  of  children  were  enrolled  in  primary  education 
(90.6 %  male,  91%  females)  and  78.9%  in  secondary  education  (Females  79.8 %  Males 
78.1 %) in the 2020-2021 school year. The total amount is 71 811 students out of them 35 200 
females.  Significant  progress  was  made  in  boosting  VET  education  at  secondary  level:  the 
rate of student’s participation in the secondary VET system is marked by a constant increase: 
64% in 2021, compared to 62.1% in 2020 and 61.8% in 2019. In higher education, the overall 
enrolment remains low. The number of university students enrolled in the first year of studies 
has been declining in the last three years.  

In  2021,  the  main  testing  for  the  Progress  in  International  Reading  Literacy  Study  (PIRLS 
2021) was conducted. A database was sent to the International Association for the Evaluation 
of Educational Achievement (IEA) and has been approved. The State examination centre has 
participated in preparation of the regional report about the students’ achievements in PIRLS 
2021. Agreement for participation in the Teaching and Learning International Survey (TALIS 
2024) was signed. The  working  group in  the state examination centre for the  conduction of 
the study was created. 

88 

 
 
In the school  year 2021-2022, a concept for inclusive education was adopted, in accordance 
with the new Law on Primary Education: during this period, the special schools continued to 
operate as primary schools with resource centres, whose aim is to support the learning process 
of students with disabilities. In the academic year 2021-2022, 151 students with disabilities, 
who  are  included  in  regular  education  were  awarded  scholarship,  reaching  a  total  of  470 
students  under  this  project.  The  percentage  of  Roma  students  enrolled  in  higher  education 
institutions  has  increased  in  the  last  three  years  from  46 %  to  52 %.  For  the  academic  year 
2021-2022,  a  total  of  130  scholarships  were  awarded  to  Roma  students  from  public  and 
private higher education institutions and universities in the country. 

The professional exams for teachers in primary and secondary schools are implemented since 
school year 2020-2021, in accordance with the regulation. The new rule books clearly define 
the  obligations,  conditions  and  the  manner  of  the  realisation  of  the  internship  and  the 
professional exam, providing transparency to the entire selection process. 

The country continues to actively participate in the Erasmus+ programme and the European 
Solidarity  Corps,  as  a  programme  country.  Under  the  2021  call,  overall  118  projects  were 
awarded grants, including 22 projects in the Youth sector. It is forecasted that in 22 granted 
Youth projects, 615 youth participants, out of which 77 fewer opportunities participants will 
be involved. The forecasted figure of participants in  all awarded projects  under 2021 call is 
close to 2000. 

The proposals  amending the legal  framework on  culture  and protection  of cultural heritage 
have  been  withdrawn  from  the  parliamentary  procedure,  while  revision  of  the  national 
strategy  for  protection  of  cultural  heritage  was  further  delayed.  The  implementation  of  the 
2018-2022 national strategy for culture development has not been supported with appropriate 
budget  allocations.  The  disbursement  of  funds  under  the  annual  programme  for  projects 
continues  to  be  criticised  by  numerous  cultural  operators,  for  a  lack  of  transparency  in 
approval  of  the  grants.  The  functional  analysis  of  the  Ministry  of  Culture  and  specialised 
bodies, emphasised inter alia the need of reforms taking into consideration the new cultural 
practices, growth of cultural and creative industries, the impact of digital technologies. There 
is  a  need  for  further  strengthening  of  the  capacities  of  the  Ministry  of  Culture  and  other 
institutions, for the creation and management of cultural policies. There is a poor institutional 
response  and  inter-institutional  cooperation  in  the  protection  of  cultural  heritage  and 
prevention  of  illegal  constructions,  and  denationalisation  of  the  cultural  heritage  with 
‘particular  importance  status’,  such  as  Ohrid  and  the  Skopje  Old  Bazaar.  The  country’s 
cultural heritage is not sufficiently safeguarded and enhanced. The number of beneficiaries of 
the Creative Europe Programme continues to be satisfactory, with a total of 24 projects during 
the period 2020-2021. 

In  the  area  of  youth  policy  development,  the  Agency  for  Youth  and  Sports  maintains  a 
register of youth organisations in which 80 organisations have been registered since the entry 
into  force  of  this  measure.  The  agency  adopted  a  Rulebook  on  standardisation  of  Youth 
Centres  in  a  transparent  process  and  several  centres  have  been  created  in  the  country.  In 
addition,  the  agency  supported  the  opening  of  four  Youth  centres  providing  technical 
assistance and equipment. 

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  as  well  as  adequate  implementing  and 
enforcement capacity and access to the common computerised customs systems. 

North Macedonia has a good level of preparation in this area. Some progress was made 

89 

 
 
with  continuous  consolidation,  application  and  upgrade  of  IT  systems.  The  concept  of 
authorised economic operators (AEO) was further promoted. The Customs Administration 
implements  fully  paperless  environment  for  processing  customs  declarations  and  excise 
documents.  

Last  year’s recommendations were partially implemented. In the coming year, the country 
should, in particular:  

  continue  the  consolidation  and  full  application  of  its  IT  systems,  including  alignment 
with  the  Commission's  Multi-Annual  Strategic  Plan  (MASP)  modules,  ensure  their 
continuous upgrade, and business continuity; 

  ratify the Protocol on Elimination of Illicit Trade in Tobacco Products. 

The customs legislation is highly aligned with the EU acquis. The 2022 customs tariff was 
adopted  to  reflect  the  latest  changes  in  the  EU  Combined  Nomenclature.  The  Additional 
Protocol  5  on  trade  facilitation  was  implemented,  and  the  authorised  economic  operators 
(AEO) concept was further promoted. So far, 23 companies were AEO-certified. Agreement 
for mutual recognition of AEO was signed with Albania in December 2021 and the agreement 
with  Serbia  started  being  implemented.  North  Macedonia  is  yet  to  ratify  the  Protocol  on 
Elimination of Illicit Trade in Tobacco Products, signed in 2014.  

On  administrative  and  operational  capacity,  the  standards  of  professional  integrity  and 
anti-corruption  continued  to  be  applied  by  the  Customs  Administration.  A  comprehensive 
intelligence  and  information  system  in  support of  investigation  and  enforcement  is  in  place. 
Risk  management  was  systematically  applied  with  the  percentage  of  physical  controls  at 
6.3 % and documentary controls accounting for 18 % of all shipments in 2021. The CEFTA 
regional risk management strategy 2020-24 is being implemented. The Agreement to establish 
joint  border  controls  with  Albania  was  ratified  in  December  2021.  A  new  Strategy  for  ICT 
Development 2021-2025 was adopted, aiming to provide coordinated and timely development 
and  implementation  of  national  systems  with  those  of  the  EU.  The  System  for  Electronic 
Exchange  of  Data  (SEED+)  is  operational,  allowing  for  harmonised  work  of  the  agencies 
present at the borders, electronic exchange of data and greater transparency. 

An  inter-agency  cooperation  unit  (AIRCOP)  was  established  at  Skopje  airport,  aiming  at 
improved border control capacities focusing on high-risk passengers and air cargo.  

The  Customs  Administration  participated  in  three  international  operations  and  a  number  of 
projects, in cooperation with Europol and the World Customs Organisation (WCO), to combat 
illicit trade in drugs, counterfeit goods, medicines, medical devices and protective equipment, 
weapons,  explosives,  dangerous  waste,  cultural  goods  and  tobacco  products.  It  took  part  in 
‘STOP  II’  operation  led  by  the  WCO,  focused  on  prevention  of  import,  export  and  transit  of 
counterfeit  vaccines  and  medical  supplies  in  the  fight  against  COVID-19.  Cooperation  and 
exchange  of  intelligence  with  the  customs  agencies  from  the  wider  region  and  with 
international and regional organisations continued. 

CLUSTER 4: THE GREEN AGENDA AND SUSTAINABLE CONNECTIVITY  

The  cluster  on  Green  Agenda  and  sustainable  connectivity  covers:  transport  policy  (chapter 
14),  energy  (chapter  15);  trans-European  networks  (chapter  21);  environment  and  climate 
change  (chapter  27).  North  Macedonia  has  achieved  a  good  level  of  preparation  in  trans-
European networks.  The country is moderately prepared on transport policy and energy and 
has  achieved  some  level  of  preparation  on  environment  and  climate  change.  Some  progress 
was made in the areas of environment  and climate change. Substantial efforts are needed in 
the  areas  where  limited  progress  was  made  such  as  in  energy,  transport  policy,  and  trans-

90 

 
 
European networks. The country needs to accelerate the implementation of the Economic and 
Investment Plan and of the Green Agenda for the Western Balkans over the upcoming period. 

Chapter 14: Transport policy 

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

North  Macedonia  is  moderately  prepared  in  the  area  of  transport.  Limited  progress  was 
made  in  the  reporting  period.  The  transport  sector  still  lacks  administrative  and  operational 
capacity. Political commitment is still missing to deliver on necessary sectoral reforms.  

As the previous  year’s  recommendations were not  fully addressed, they  remain valid.  In the 
coming year, North Macedonia should, in particular: 

  strengthen  the  operational  and  administrative  capacity  of  the  inspection  bodies  and 

develop enforcement capacity to reduce fatalities on road and rail infrastructure; 

  implement  the  connectivity  reform  measures  on  rail  reform  and  open  the  rail  transport 
market, amend the national law to remove existing breaches of provisions of the Transport 
Community Treaty with regard to opening up the rail market, set up a national system to 
continuously  collect  data  on  road  crashes  and  finalise  pending  border-crossing 
agreements/protocols; 

  adopt legislation on intelligent transport systems (ITS) and combined transport, and make 
further efforts to produce a strategic framework to implement ITS and the core networks. 

On the general transport acquis, the key strategic documents for transport and its sub-sectors 
are  in  place.  No  progress  has  been  made  in  developing  the  action  plan  to  accompany  the 
2018-2030 National Transport Strategy. The operational and administrative capacities for all 
modes of transport remain weak and need urgent strengthening. The situation is impeding the 
proper implementation of the Green Agenda for the Western Balkans in the area of transport 
and  the  transition  towards  less  polluting  modes  of  transport.  The  law  on  air  and  railway 
accident  investigation  has  not  been  fully  implemented.  The  independent  rail  accident 
investigation body has still not been created. Continued progress is also needed to align with 
the  intelligent  transport  systems  (ITS)  directive  and  introduce  relevant  national  laws.  An 
overall strategy for ITS with accompanying resources is still missing.  

The legal framework for road transport is broadly aligned with the EU acquis but struggles 
to keep up with its evolution. The law on dangerous goods is harmonised with the EU acquis, 
but still no progress was made on the conformity assessment of the existing equipment for the 
transport of dangerous  goods. There has been no progress  towards  establishing an executive 
body for road traffic safety. The law for the creation of the Road Safety Agency still needs to 
be adopted. Further efforts are needed to align with the social and safety acquis. The national 
accident and investigation body still needs to be established with action plans on road safety 
inspection  and  an  audit  to  be  followed  up  and  implemented.  No  progress  was  made  to 
strengthen the enforcement and technical capacities of the state transport inspectorate. Further 
harmonisation  is  needed  on  penalties  for  infringing  the  European  agreement  on  the  work  of 
crews of vehicles engaged in international road transport (AETR). Approval of the five-year 
road and rail maintenance plan has been further delayed and road maintenance is still carried 
out inefficiently. Legislation on clean energy and energy efficient road transport vehicles and 
intelligent transport systems is not aligned with the EU acquis. 

91 

 
 
In  the  area  of  rail  transport,  the  main  requirements  of  the  EU  acquis  are  met  in  terms  of 
unbundling of infrastructure manager and the national operator. The new railway system has 
been  established  and  adopted.  In  the  railway  sector,  no  progress  was  made  in  deciding  the 
future  of  passenger  and  freight  operations.  Further  alignment  with  large  parts  of  the  single 
European railway area acquis has been delayed. North Macedonia should amend legislation to 
remove existing breaches of provisions of Transport Community Treaty regarding opening up 
of  rail  market  at  national  level.  The  rail  market  on  the  Orient  East/Med  corridor  remains 
closed.  Railway  safety  and  interoperability  legislation  has  been  adopted,  but  without  proper 
enforcement.  Strengthening  of  operational  capacities  of  the  railway  safety  directorate  is 
needed. There has been no progress in establishing the accident and investigation body. The 
agreement  on  cross-border  railway  cooperation  with  Greece  has  not  been  signed  while  the 
implementation  agreements  for  joint  controls  on  the  rail  border  crossing  with  Kosovo  were 
completed.  Some  progress  was  achieved  on  regional  cooperation  with  the  signature  of  a 
memorandum  of  understanding  by  Western  Balkans  infrastructure  managers  and  with  a 
Declaration on Rail at ministerial level.  

On  maritime  transport,  the  country  continues  its  participation  in  all  basic  transport 
conventions  of  the  International  Maritime  Organisation,  including  the  European  Maritime 
Safety Agency (EMSA). 

On  inland  waterway  transport,  North  Macedonia  is  aligned  with  most  of  the  EU  acquis, 
except  for  the  regulation  on  the  recognition  of  certification  and  transportation  of  goods  and 
passengers. There is no law on merchant shipping, as no goods are transported on the inland 
waterways.  The  country  continues to  participate  actively in  the  International  Commission  of 
the Sava River Basin, but not in the EU strategy for the development of the Danube Region. 
More efforts are needed in aligning with EU acquis on waterborne transport.  

In  the  area  of  aviation,  the  country  has  maintained  a  good  level  of  alignment  with  the  EU 
acquis  and  has  partially  aligned  with  the  aviation  safety  legislation.  Further  efforts  are  still 
needed to facilitate European Aviation Safety Agency standardisation inspections. 

On combined transport, progress is still needed in setting up a multimodal node near Skopje. 
There  has  been  no  progress  in  adopting  specific  legislation  aligned  with  EU  rules.  Progress 
needs to be made on adopting relevant legislation and setting up systems for electronic freight 
transport information exchange.  

Chapter 15: Energy  

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

The country is moderately prepared in this area. Limited progress was made, notably with 
the adoption of the National Energy and Climate Plan and investments in solar power plants 
on 31 May 2022.  In the  light  of the current  geopolitical  context, North  Macedonia needs to 
accelerate its transition to renewables and significantly reduce its dependencies on gas. 

As last year’s recommendations were not fully implemented, in the coming year the country 
should, in particular: 

  finish unbundling (certification) of the gas transmission system; 

  increase  the  number  of  staff  and  the  technical/engineering  capacity  of  the  Energy 

Department in the Ministry of Economy and the Energy Agency; 

  adopt and implement the energy efficiency implementing legislation. 

92 

 
 
  Utilise benefits in the Energy Community guarantees of origin and sign direct agreement 
with the service provider to use national electronic register for issuance, cancellation and 
trade of guarantees of origin, in line with the EU standards 

Concerning security of supply, it is necessary to assess the quantity of coal needed to ensure 
the  good  functioning  of  the  Bitola  thermal  power  plant,  including  investment  in  new 
resources.  The  state-owned  electricity  generation  company  ESM  should  improve  the 
operation and maintenance of the power generation facilities. The country has adopted a law 
on compulsory oil reserves and established the Compulsory Oil Reserves Agency. It adopted 
plans to release stocks in the case of an emergency. The oil stocks correspond to 54 days of 
average daily consumption.  

The construction of a new 400kV electricity transmission interconnector line with Albania is 
under  way.  Interconnection  capacities  on  the  border  with  Greece  and  Kosovo  are  allocated 
through  the  central  auction  office  in  Southeast  Europe  and  others  bilaterally.  The 
implementation  of  a  roadmap  for  coupling  with  Bulgaria  is  pending  the  establishment  of  a 
day-ahead  market  in  the  country.  On  gas  interconnections,  North  Macedonia  and  Greece 
Transmission  System  Operators  signed  a  cooperation  agreement  in  September  2021.  There 
have  been  delays  in  the  establishment  and  certification  of  independent  gas  transmission 
operators, as a pre-condition for the interconnector with Greece and diversification of energy 
sources. 

The country adopted a five-year program for the implementation of the Energy Development 
Strategy  and  an  integrated  National  Energy  and  Climate  Plan  was  adopted  in  May  2022. 
Considering the energy crisis, it becomes even more important for the government to increase 
its  administrative  capacity 
in  dealing  with  energy  policy,  strategic  planning  and 
implementation of actions in the relevant institutions. 

On the internal energy market, the national framework legislation is in line with the EU’s 
third  energy  package  in  gas  and  electricity.  The  electricity  and  gas  markets  are  open  for 
competition. The adoption of corresponding implementing legislation is well advanced.  

The electricity transmission and distribution network operators are unbundled in accordance 
with the EU acquis. Like last year, the gas transmission system operator is not yet unbundled 
in  line  with  the  third  energy  package.  Also,  the  Regulation  on  Wholesale  Energy  Market 
Integrity and Transparency (REMIT) regulation has not yet been approximated. 

Third-party  access  to  the  natural  gas  infrastructure  is  in  line  with  the  EU  acquis,  but 
transparency  needs  to  be  improved.  Works  to  build  the  gas  transmission  pipeline  between 
Negotino–Bitola and Skopje-Tetovo-Gostivar are progressing. 

Wholesale gas prices are fully deregulated, but the market remains illiquid without a virtual 
trading point. 

The  Energy  Regulatory  Commission  (ERC)  is  functional  and  continued  to  demonstrate 
regulatory  independence.  The  Commission  for  Protection  of  Competition  did  not  carry  out 
any investigation in the energy sector.  

In  the  area  of  hydrocarbons,  the  law  on  mineral  resources  remains  to  be  aligned  with  the 
hydrocarbon licensing directive.  

The amended national renewable energy action plan is in line with the revised binding target 
of  23 %  of  energy  coming  from  renewable  energy  sources  by  2020  and  24 %  by  2025.  In 
2020, the country achieved only a 19.3 % share. The energy law is moderately aligned with 
the renewables energy directive.  

93 

 
 
Investments  in  hydropower  should  be  compliant  with  the  relevant  environmental  acquis. 
Optimising  balancing  services  and  investments  in  energy  transmission  and  energy  storage 
should be promoted to improve the integration of renewable energy sources into the grid. 

The capacity cap per type of renewable energy technology has to  be removed to  enable the 
achievement  of  the  2025  renewable  energy  targets.  An  electronic  system  for  issuing, 
transferring and cancellation of guarantees of origin is still not in place. Alignment with the 
EU acquis on the sustainability of biofuels is needed. Electricity prosumers are enabled with 
the  rulebook  on  renewables,  but  its  and  implementation  is  lacking  due  to  several 
administrative obstacles. 

The transition towards clean energy needs coordination, including a governance mechanism, 
an action plan and a monitoring mechanism for a ‘just transition’ process. This process should 
include mitigation of the negative social and economic impacts of the planned closure of coal-
fired power-plants in the respective regions. 

The fourth action plan on energy efficiency has been adopted in September 2021. The law on 
energy  efficiency  is  aligned  with  the  energy  efficiency  and  the  energy  performance  of 
buildings directives. However, there are no changes regarding the lacking implementation of 
current legislation. The adoption of implementing legislation also remains a challenge, due to 
limited human and technical capacity at the Energy Department of the Ministry of Economy 
and the Energy Agency.  

Financing incentives towards energy efficiency should be improved, including by setting up 
the energy efficiency fund. Municipalities are encouraged to take steps to fully respect their 
obligations to develop and implement energy efficiency programmes. 

For  nuclear  energy,  nuclear  safety  and  radiation  protection,  the  country  has  ratified  the 
relevant international conventions and is a full member of the European Community Urgent 
Radiological  Information  Exchange  system  (ECURIE).  The  government  adopted  a  national 
policy  for  radioactive  waste  management.  However,  there  is  still  no  long-term  and  safe 
radioactive waste storage facility in the country. 

Chapter 21: Trans-European networks 

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

North Macedonia has a good level of preparation in the area of transport networks. Limited 
progress was achieved during the reporting period, in particular in completing sector reforms.  

As last year’s recommendations were not fully implemented, they remain valid. However, the 
third  recommendation  on  the  Railway  Border  Crossing  Protocol  with  Kosovo  was  partly 
fulfilled. 

In the coming year, the country should in particular: 

  further  strengthen  the  operational  and  technical  capacity  of  all  management  and 
stakeholder  institutions  dealing  with  the  development  of  both  Trans-European  Transport 
(TEN-T)  and  Trans-European  Energy  (TEN-E)  networks,  and  harmonise  the  legal 
framework with the Trans-European Network Regulation; 

  mobilise sufficient resources to implement the Transport Community Treaty; 

  implement the final provisions of the Railway Border-Crossing Protocol with Kosovo. 

On  transport  networks,  the  country  continues  to  actively  participate  in  the  Transport 
Community Treaty (TCT) and in  its meetings.  All  the TCT action plans have been  adopted. 

94 

 
 
The authorities are encouraged to continue the cooperation under this treaty. Green corridors 
are functioning throughout the major corridors. 

Road  Corridor  X  is  functional  but  works  along  Corridor  X-d  remain  delayed.  The 
construction  of  the  rail  Corridor  VIII  towards  Bulgaria  is  facing  significant  delays  with  the 
selection of contractor(s) for phase I and II still not finalised and the procurement procedure 
for phase III (Kriva Palanka border with Bulgaria) accumulating significant delays, which is a 
source  of  concern  for  EU  funding.  Additional  and  urgent  efforts  are  needed  to  accelerate 
progress in all phases of this rail corridor and other priority sections of the core network for 
both rail and road. The staff retention policy by bodies involved in large investment projects 
remains  limited,  which  considerably  hampers  the  completion  of  strategic  projects.  The 
railway border-crossing agreement with Greece has not yet been adopted, while some actions 
have been taken to implement the remaining border-crossing protocol with Kosovo. Both are 
encouraged to be finalised without any further delay. Funding to build adequate infrastructure 
close to the Serbian border at the Tabanovce railway border station has still not been secured. 
Like last year, no progress was made on adopting five-year road and rail maintenance plans.  

On energy networks, the construction of a new 400kV electricity transmission interconnector 
line  Bitola-Elbasan  (Albania),  is  still  underway.  Technical  assistance  to  strengthen  the 
transmission  network  in  the  southeast  region  of  North  Macedonia  is  under  implementation. 
Works  are  ongoing  to  build  the  gas  transmission  pipeline  between  Negotino–Bitola,  and 
Skopje-Tetovo-Gostivar. 

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. 

The country has some level of preparation in this area. Some progress was made in nature 
protection  and  in  climate  change,  including  by  the  preparation  and  adoption  of  the 
management plan for Galichica National  Park. However, implementation  remains a concern 
in  all  sectors.  The  country  needs  to  considerably  step  up  ambitions  regarding  the  green 
transition, notably in the context of the Green Agenda for the Western Balkans.  

In the coming year, North Macedonia should in particular: 

  accelerate efforts for the reduction of air pollution at the local and national level and the 

reduction of point and diffuse pollution of freshwater resources; 

  enforce  measures  to  establish  a  regional  waste  management  system,  in  particular  in  the 

East and Northeast regions; 

  implement the Paris Agreement, including by adopting a climate Law, consistent with the 

EU 2030 framework. 

Environment  

On  horizontal  issues,  administrative  capacity  at  all  levels  remains  weak,  with  insufficient 
human  and  financial  resources  to  implement  and  enforce  legislation.  The  inspections 
performed have little impact. There is no improvement in implementation of Environmental 
Impact Assessments, with shortcomings especially in the public consultation processes and in 
the quality of the reports. Lack of transparency and access to information continues to be an 
issue. The law on environmental inspection and some amendments on the law on environment 
were adopted. Activities continued in the area of environmental liability. 

95 

 
 
On  air  quality,  amendments  to  the  law  on  ambient  air  quality  were  adopted  in  July  2021. 
Efforts to improve the air pollutant emission inventory continued. The 2021 Air Quality Plan 
for  Bitola  has  been  prepared.  The  2021  Air  Pollution  Reduction  Programme  and  the 
preparation  of  four  Air  Quality  Plans  have  been  launched  in  August  and  October  2022, 
together with five Cadastres of air pollutants. Despite the progress made, air quality remains a 
major concern in large cities. Two automatic monitoring stations for ambient air quality were 
installed  in  the  municipalities  of  Berovo  and  Prilep,  along  with  replacements  of  measuring 
instruments on several of the already existing monitoring stations. 

On  waste  management,  the  national  plan  for  waste  management  (2021-2031)  has  been 
adopted.  The  national  waste  prevention  plan  (2021-2027)  has  been  prepared,  but  not  yet 
adopted.  Activities  have  started  to  build  a  regional  waste-management  system  in  several 
regions.  The  launching  of  a  regional  waste-management  system  in  the  northeast  and  east 
regions has been further delayed due to the resistance of the municipality of Sveti Nikole to 
host  the  central  waste  management  facility.  Activities  for  the  closure  of  non-compliant 
landfills commenced in the East Region. Regional waste management structures are still not 
fully operational. Separate collection of waste streams and economic instruments to promote 
recycling,  reuse  and  waste  prevention  remain  limited.  The  preparatory  works  for  the 
rehabilitation of the small pond in OHIS site were finalised and the actual clean up started. 

On  water  quality  management,  work  to  align  with  the  EU  acquis  has  continued.  Limited 
progress was made towards implementing and enforcing existing legislation. The groundwater 
cadastre,  which  aims  to  better  manage  and  report  on  groundwater  resources,  is  in  the  final 
stage of development. River Basin Councils have been nominated but are not yet operational. 
No tangible progress was made towards finalising river basin management plans. No progress 
was made in the designation of areas sensitive to eutrophication. The government included the 
establishment  of  wastewater  collection  and  treatment  infrastructure  as  one  of  the  structural 
reform measures in the Economic Reform Programme 2022-2024. The speed of preparation 
and implementation of the remaining major projects remains a challenge.  

Good progress was made on nature protection. The draft law on nature protection, aiming at 
aligning with the Birds and Habitat directives is prepared. The total percentage of protected 
areas increased to 13.9% from the territorial state. Further progress made in the valorisation 
studies,  management  plans  and  development  of  national  red  lists.  Lake  Ohrid  together  with 
Studencisko Blato were included in the List of the Ramsar Convention.  

Activities for re-proclamation of the status of Mavrovo National Park need to be accelerated 
as a matter of priority in order to prevent further deterioration of its natural values.  

In  August  2021,  the  World  Heritage  Committee  gave  the  country  additional  two  years  to 
implement the UNESCO recommendations for the Natural and Cultural Heritage of the Ohrid 
Region.  The  implementation  of  recommendations  remains  insufficient  and  requires  stronger 
commitment and reaction from national and local authorities. In December 2021, the Standing 
Committee  of  the  Bern  Convention  adopted  a  decision  to  open  a  case  on  Emerald  sites  of 
Lake Ohrid and the Galichica National Park as a result of concerns raised about impact from 
uncontrolled infrastructure projects over the sites.  

On  industrial  pollution  and  risk  management,  the  law  on  industrial  emissions  is  still 
awaiting  adoption.  Deficient  environmental  impact  assessment  and  public  consultations, 
especially for B-type permits are of concern. There is no progress in polluter accountability, 
which  negatively  impacts  the  setting-up  of  a  system  to  prevent  industrial  and  chemical 
accidents.  More  efforts  are  needed  to  align  with  the  Seveso  III  Directive,  EU  Ecolabel 
regulations and environmental management audit system. 

96 

 
 
In the area of chemicals, no progress is registered in the risk assessment of harmful effects of 
chemicals on human health and the environment, and in the implementation of the measures 
outlined in  the readiness assessment report. Three new regulations  were adopted in  order to 
enable accelerated HCFC phase-out schedule.  

There was no improvement in the area of noise pollution in the reporting period.  

On civil protection, the new national strategy for protection and rescue for the period 2022-
2025  was  finalised.  As  regards  the  Union  Civil  Protection  Mechanism  (UCPM),  North 
Macedonia  is  a  participatory  state  already.  The  country  submitted  the  required  summary  of 
the national risk assessment in March 2022. Further steps were taken to finalise the technical 
connection  to  the  Union’s  Common  Emergency  Communication  and  Information  System 
(CECIS).  Wildfires  and  COVID-19  crisis  highlighted  the  need  to  strengthen  the  legal 
framework and institutional capacities of the civil protection authorities.  

Climate change 

The long-term strategy on climate action and its action plan were adopted in September 2021. 
Several documents were developed as a supporting tool for the implementation of enhanced 
nationally  determined  contribution.  The  work  to  update  the  greenhouse  gases  inventory 
continued,  as  did  the  activities  to  develop  the  platform  for  monitoring,  reporting  and 
verification.  The  National  Energy  and  Climate  Plan  was  adopted  on  31  May.  The  Law  on 
Climate Action remains to be adopted. Capacity remains weak, in terms of both human and 
financial resources, despite the efforts undertaken. 

CLUSTER 5: RESOURCES, AGRICULTURE AND COHESION  

Cluster  5  on  resources,  agriculture  and  cohesion  covers:  agriculture  and  rural  development 
(chapter 11); food safety, veterinary and phytosanitary policy (chapter 12); fisheries (chapter 
13);  regional  policy  and  coordination  of  structural  instruments  (chapter  22);  financial  and 
budgetary provisions (chapter 33). North Macedonia is moderately prepared in most areas of 
Cluster 5. It has achieved a good level of preparation in the area of food safety, veterinary and 
phytosanitary  policy  and  is  at  an  early  stage  of  preparation  in  financial  and  budgetary 
provisions.  Over  the  reporting  period,  some  progress  was  made  in  agriculture  and  rural 
development and in food safety, veterinary and phytosanitary policy. However, further efforts 
are needed, in particular in areas where limited or no progress was made such as in fisheries, 
financial  and  budgetary  provisions,  regional  policy  and  the  coordination  of  structural 
instruments. 

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. 

North  Macedonia  remains  moderately  prepared  in  the  area  of  agriculture  and  rural 
development.  Some  progress  was  made  during  the  reporting  period.  The  adoption  of  an 
overall  staff  retention  policy  by  the  government  benefited  the  IPARD  structures  and 
absorption of EU funds under the instrument for pre-accession for rural development (IPARD 
II)  improved.  Decoupling  direct  payments  and  transferring  the  farm  register  and  the  land 
parcel identification system (LPIS) to the paying agency remain to be achieved, as remains to 
adopt  a  legislative  framework  in  the  area  of  common  markets  organisation.  Qualified  staff 
need to be employed in the IPARD operating structure, according to a workload analysis. 

In the coming year, North Macedonia should in particular: 

97 

 
 
  ensure  additional  staff  resources  to  the  IPARD  operating  structure  and  expand 
implementation  of  the  IPARD  III  programme  to  make  full  use  of  available  funding 
opportunities; 

  progress in transferring the farm register and the land parcel identification system (LPIS) 
to the paying agency and prepare an Action Plan for the implementation of the National 
Strategy for Agriculture and Rural Development for the period 2021-2027; 

  adopt a legislative framework for the further alignment with the EU acquis in the area of 

direct payments and common market organisation. 

On  horizontal  issues,  a  temporary  staff-retention  policy  was  adopted  by  the  government 
which had a positive impact on the staff of the IPARD structures. The National Strategy for 
Agriculture  and  Rural  Development  for  the  period  2021-2027,  adopted  in  2021,  should  be 
complemented by an Action Plan and budgeting to ensure its proper implementation, with a 
monitoring and reporting system. A law aligning national support schemes to farmers with the 
EU acquis should be adopted. Controls for the implementation of cross-compliance standards 
have been enhanced.  

All elements for an integrated administration and control system (IACS) are in place and in 
accordance with the EU acquis. Area-based direct payments are determined by recordings of 
the  Farm  Register  and  land  parcel  identification  system  (LPIS).  Progress  has  been  made  to 
improve the data quality of the Farm Register. However, limited progress has been made on 
the  interoperability  between  the  Farm  Register  and  animal  identification  and  registration 
system  with  regard  to  the  quality  of  data  on  animals.  The  legislative  framework  for 
transferring the farmers’ register and the LPIS to the paying agency remains to be established. 
Development of the farm accountancy data network (FADN) on the basis of a representative 
sample  size  is  planned  from  2022.  Resources  need  to  be  increased  in  order  to  ensure  the 
sustainability  of  the  FADN  system  at  all  levels  of  data  collection,  quality  assurance  and 
reporting. North Macedonia needs to adopt an EU support project aiming at developing a new 
legislative framework, and aligning the farm advisory services with the EU acquis.  

On the Common Market Organisation (CMO), a Working Group has been established. A new 
Law on CMO aligning with the EU acquis should be adopted.  

On  rural  development,  good  progress  was  made  in  the  absorption  of  EU  funds  under  the 
Instrument  for  pre-accession  assistance  for  rural  development  (IPARD  II).  However,  the 
number  of  staff  in  the  Managing  Authority  and  IPARD  agency  needs  to  be  increased.  The 
IPARD III programme has been adopted and greater operational commitment is needed by the 
IPARD authorities to expand the number of measures available to farmers and rural areas to 
make use of the increased budget allocation under IPARD III.  

On quality policy, there is no progress in the implementation of the quality schemes and the 
administrative  capacities  remained  insufficient,  despite  the  sector  potential  for  traditional 
products  and  designation  of  origin.  Additional  efforts  are  needed  to  establish  the  legislative 
framework including for spirit drinks and to ensure protection of geographical indications in 
line with the EU acquis.  

As  regards  organic  farming,  the  legislation,  competent  authority,  control  bodies,  and  the 
accreditation and certification system are established and operational. A new law on organic 
production in line with the EU acquis needs to be adopted. Action to enhance the monitoring 
and  control  of  organic  certification  and  products  has  been  limited.  There  is  potential  for 
further  developing  the  sector  and  using  the  support  opportunities  under  the  IPARD  III 
programme.  

98 

 
 
Chapter 12: Food safety, veterinary and phytosanitary policy  

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

The country has a good level of preparation in the area of food safety and veterinary policy. 
Some progress was made, particularly on improving animal diseases and plant health control 
in the country.  

As not all recommendations from last year were implemented, in the coming year, the country 
should in particular: 

  further  align  the  legislation  on  official  control  with  the  new  EU  legislation  on  official 

controls;  

  strengthen capacities for data analysis in the Food Veterinary Agency; 

  implement actions to achieve sustainable use of pesticides. 

On  general  food  safety,  North  Macedonia  amended  the  Law  on  Food  Safety  with  the  EU 
acquis on official controls. The National Rapid Alert System for Food and Feed as well as the 
Agency’s  internal  audit  and  training  systems  are  operational.  The  Agency  is  performing  its 
work in line with quality management standards. The Food and Veterinary Agency has taken 
measures to protect consumers by resolving consumer complaints. 

On veterinary policy, the implementing legislation  on animal  welfare during slaughter was 
aligned  with  the  EU  acquis.  On  the  control  system  for  imports,  the  Food  and  Veterinary 
Agency  provides  regular  updates  on  the  safeguard  measures  of  imports  and  import 
requirements for live animals and animal products.  

The agency continued to align national legislation with the new EU acquis on animal health. 
Progress was made on control measures for animal diseases. Identified weaknesses related to 
data  collection,  verification  and  analysis  remain.  The  Agency  is  conducting  active 
surveillance  programme  for  classical  swine  fever,  African  swine  fever,  lumpy  skin  disease, 
rabies and diseases in aquatic animals, however, collection, verification and analysis of data 
should  be  improved.  The  agency  continued  implementing  the  monitoring  programme  on 
antimicrobial resistance. The 2022 national monitoring programme on control of residues of 
veterinary  medicinal  products  and  contaminants  in  live  animals  and  food  stuffs  of  animal 
origin is in line with the EU acquis on bovine, ovine/caprine, porcine, poultry, acquaculture, 
milk,  eggs,  wild  game  and  honey.  The  agency  continued  implementing  an  action  plan  on 
animal  welfare.  The  capacity  to  further  align  with  and  implement  the  EU  acquis  on  zoo-
technical issues needs to be improved. 

Some  progress  was  made  in  the  placing  of  food,  feed  and  animal  by-products  on  the 
market with the adoption of implementing legislation, aiming at aligning with the EU acquis. 
The  revised  law  on  animal  by-products  is  yet  to  be  adopted.  A  rulebook  on  the  maximum 
levels of pesticides in or on food of plant and animal origin was adopted.  

Some  progress  was  also  made  on  food  safety  rules.  Legislation  was  aligned  with  the  EU 
acquis on food additives, food contact materials and maximum levels for certain contaminants 
in foodstuffs. The agency continued implementing a program for monitoring of food safety, 
but the data needs to be further analysed. 

Regarding specific rules for feed, the legislation was aligned with the EU  acquis related to 
feed additives. The agency is implementing a programme for monitoring of feed safety.  

99 

 
 
Some progress  was made on  phytosanitary policy. The Phytosanitary Directorate regularly 
updates the list of harmful organisms in line with the new EU acquis and the country’s pest 
status. A catalogue for selected plant pests covering phytosanitary action, pest identity cards 
and survey protocols for quarantine pests has been published. The phytosanitary information 
system  is  used  as  a  platform  for  information  sharing  and  coordination  between  relevant 
authorities. The law on phyto-pharmacy is aligned with the EU acquis. However, the actions 
to achieve sustainable use of pesticides are not implemented. There is no reliable data on the 
pesticide use in the country, nor analysis on the risks and impacts of pesticide use on human 
health  and  the  environment.  The  phytosanitary  inspection  is  implementing  measures  to 
eradicate pests identified through the monitoring and control programmes. 

The  Law  on  genetically  modified  organisms  was  aligned  with  the  EU  acquis.  Production, 
placing on the market and import of genetically modified organisms food and feed is banned. 

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.  

The  country  is  moderately  prepared  in  this  area.  Limited  progress  was  made  over  the 
reporting  period  and  last  year’s  recommendations  remain  valid.  In  the  coming  year,  North 
Macedonia should in particular: 

  align  the  law  on  fisheries  with  the  EU  acquis  in  the  area  of  market  policy,  structural 

measures and State aid; 

  improve the data collection system and reporting; 

  establish a multi-annual programming of structural measures. 

As North Macedonia only has inland fishing in lakes and aquaculture, a large part of the EU 
acquis  on  fisheries  is  not  applicable.  The  national  legal  framework  is  however  not  keeping 
pace with changes to the EU’s common fisheries policy. 

Administrative capacities for resource and fleet management, and inspections and control 
of  fisheries  policy  remain  insufficient.  The  capacities  to  control  illegal,  unreported  and 
unregulated (IUU)  fishing in  line with  the EU requirements need to  improve. There was no 
progress on alignment of the national policy and legislative framework with the EU acquis in 
the  reporting  period.  North  Macedonia  has  yet  to  strengthen  its  policy  formulation, 
implementation  and  enforcement  capacities.  Overall  coordination,  including  with  the 
environment authorities regarding biodiversity protection needs to be strengthened. 

Structural  measures  are  insufficient  for  the  development  of  aquaculture  and  restoration  of 
fish  funds.  The  data  collection  system  for  fisheries  and  aquaculture  needs  to  be  further 
developed in line with the EU acquis.  

Alignment of the market policy and State aid with the EU acquis remains to be achieved and 
alignment with the EU Eel Regulation ensured. 

Cooperation meetings on the international agreements for fisheries management have been 
limited due to COVID-19 restrictions.  

Chapter 22: Regional policy and coordination of structural instruments 

100 

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

North Macedonia is moderately prepared in the area of regional policy and coordination of 
structural instruments. No progress was made over the reporting period. 

All of last year’s recommendations remain valid. In the coming year, the country should:  

  upgrade the institutional, administrative and technical capacity for the management of the 
EU funds by adopting an overall staff retention policy, strengthening the capacity-building 
mechanism,  improving  the  implementation  of  the  EU  and  audit  recommendations, 
aligning the management and control systems with the IPA III requirements, and improve 
the  dynamics  of  the  implementation  of  the  allocated  EU  funds,  particularly  for  the 
ongoing economic and investment plan flagships, such as railway and road corridor VIII 
and X, the waste water treatment plant in Skopje and the solar power plants Oslomej 1 and 
2 and Bitola; 

  strengthen  the  investment  policy  as  a  matter  of  urgency  by  streamlining  the  investment 
pipelines  on  the  ground  of  sound,  transparent  and  inclusive  methodology,  clear 
responsibilities  of  the  stakeholders,  viable  public-private  partnership  framework  and 
taking  into  consideration  the  overarching  priorities  and  principles  (green  deal,  energy 
independence and sustainability, no-one left behind principle); 

  accelerate the reforms in the areas of public finance management, environment, transport, 
energy and digital connectivity, and labour market having high impact on regional policy 
and  development;  enhance  the  decentralisation  process  through  a  credible  financing 
framework  for  municipalities,  and  strengthen 
the  policy  dialogue  on  regional 
development. 

Some  progress  was  made  on  the  legislative  framework  with  the  adoption  of  the  law  on 
financing  local  self-governments  and  Organic  Budget  Law.  The  key  laws,  multi-annual 
expenditure framework and programme-based budgeting and the law on the internal financial 
control system in the public sector are still to be adopted.  

The  Growth  Acceleration  Plan  (GAP)  promoted  in  October  2021  provides  a  strategic  and 
synergistic  framework  for  channelling  national,  EU  and  other  public  and  private  donors’ 
investment  in  the  regional  development.  It  further  improves  the  compliance  of  the  legal 
framework on public-private partnerships with the EU legislation.  

In  February  2022,  the  government  adopted  the  programme  for  the  implementation  of  the 
strategy for regional development,  allocating  about  EUR 1 billion for regional development 
for  the  period  2021-2024.  The  country  established  an  electronic  system  for  coordination  in 
planning,  implementation,  monitoring  and  evaluation  of  the  policy  for  balanced  regional 
development  “SiReRa”.  In  July  2022,  EU  funding  was  allocated  to  19  projects  addressing 
regional disparities. 

No  significant  progress  was  made  on  the  decentralisation  of  services  and  reorganisation  of 
competences between the central and the subnational level. 

The institutional framework for the management of the EU funds under IPA II is established 
but  its  performance  is  jeopardised  by  the  weak  administrative  capacity.  In  December  2021, 
the  Public  Enterprise  Railways  Infrastructure  (PERI)  was  integrated  into  the  operating 
structure  managing  the  EU  funds  under  the  IPA  II  multi-annual  programme  for  transport 
(2014-2020). In February 2022, the government adopted the action plan for establishment of 

101 

 
 
the financial management and control systems for IPA III, encompassing adjustments in the 
legal  framework,  organisational  set-up,  capacity  building  measures,  and  preparation  of  the 
request for entrustment of budgetary tasks. The implementation of this action plan is ongoing. 
Decisions on the appointment of institutions and bodies, responsible for implementing IPA III 
should be made, taking into account their future role in cohesion policy. 

The administrative capacity continues to deteriorate due to deficiency in the management of 
the human resources, lack of staff retention policy and weak training and on-the-job capacity-
building  function.  While  the  recruitment  plan  has  been  adopted  in  2020  and  further 
implemented,  it  cannot  compensate  for  the  high  staff  turnover  across  the  IPA  structures 
including at managerial  level.  Last  year, the structures for the management of the EU funds 
operated with less than 60 % of the accredited staff levels and with key managerial positions 
vacant. 

The  low  staffing  levels  across  IPA  structures  continue  to  put  pressure  on  the  established 
financial  management  and  control  systems  and  to  negatively  affect  the  quality  of 
procurement, evaluation, contracting, control, monitoring and implementation functions. The 
low staffing levels  and weak administrative capacities across  IPA structures cause delays in 
the implementation, particularly of the IPA II multi-annual programme for environment and 
transport  (2014-2020)  under  indirect  management,  which  is  at  high  risk  of  substantial  de-
commitment  of  funds.  The  delays  in  the  implementation  of  all  flagship  projects  is  still  an 
issue  of  serious  concern.  The  capacities  of  the  indirect  management  structures  need  to  be 
further strengthened in order to ensure efficient and timely contracting and implementation of 
IPA programmes, and to be able to operate in an ex-post control environment. 

Progress  was  made  on  programming  of  IPA  III,  reflected  in  the  government’s  adoption  of 
the strategic response to the IPA III Programming Framework, the completed programming of 
IPA  2021,  and  the  advancement  in  programming  of  IPA  2022-2023.  North  Macedonia 
continues to improve the sector policy dialogue and the strategic planning process, which is 
key  for  programming  of  EU  funds.  The  Public  Financial  Management  (PFM)  Reform 
Programme  was  adopted  in  June  2022.  The  adoption  of  other  key  sector  strategies,  such  as 
public administration reform, should be ensured.  

North  Macedonia  continues  to  gain  experience  in  programming  and  implementation  of 
regional  policy  territorial  cooperation  through  the  participation  in  cross  border  cooperation 
and  transnational  and  interregional  cooperation  programmes.  Equally,  North  Macedonia 
participates  in  the  EU  Strategy  for  the  Adriatic  Ionian  Region  (EUSAIR),  which  promotes 
cooperation and synergies among the participating EU and non-EU countries.  

Progress was achieved in monitoring and evaluation. In December 2021, North Macedonia 
adopted  the  performance  assessment  framework,  establishing  officially  the  sector  indicators 
and their targets until 2027, and serving as an instrument to monitor, measure, visualise and 
communicate the country’s progress  in  implementing sector  reforms. The country improved 
the quality of the annual  IPA report, the participation in  the IPA and SAA committees, and 
the monitoring of the conclusions of the EU-North Macedonia bilateral dialogues. However, 
the  implementation  of  the  conclusions  needs  to  improve,  since  at  average  only  50 %  of  the 
agreed conclusions are implemented. The role of NIPAC and the line ministers on respecting 
the commitments has still to be strengthened. 

The National Anti-Fraud Strategy for Protection of Financial Interests of the European Union 
2022-2025 was adopted in June 2022. The system for protection of the EU financial interest 
still needs to be enhanced with the adoption of the legal grounds for the operation of the Anti-
Fraud  Coordination  Service  (AFCOS)  encompassing  the  decree  on  the  structure  and  the 
decision on establishment of the AFCOS network. 

102 

 
 
The internal and external audit functions are in place. The capacity of the Audit Authority has 
strengthened  through  training,  capacity  building,  and  strengthened  cooperation  with  OLAF. 
The  Audit  Authority  continues  to  perform  to  a  good  standard,  following  sound  audit 
methodology  and  good  audit  coverage.  However,  the  implementation  of  the  findings 
identified  through  the  completed  regular  (systems,  operations  and  accounts)  and  follow-up 
audits continues to be less than 50 %, which is an issue of concern. 

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  resource  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.  

Preparations  under  this  chapter  are  at  an  early  stage.  Limited  progress  was  achieved. 
National  accounts  and  GNI  calculations  were  further  aligned  and  customs  declarations  and 
excise  documents  are  fully  electronically  processed.  The  institutional  set-up  needed  for  the 
efficient functioning of the own resources system is yet to be established. 

Since the recommendations from last year’s report were not fully implemented, in the coming 
year, the country should: 

  further improve the legal basis for the own resources system; 

  strengthen  the  administrative  capacities  and  co-ordination  mechanisms  among  key 

stakeholders in the system. 

Limited progress  was made on the specific own  resources administrative  conditions,  as laid 
down  in  the  own  resources  regulations.  Some  progress  was  made  in  reducing  the 
administrative burden for taxpayers and the VAT refund process. The measures to fight and 
reduce  tax  evasion,  fraud  and  informal  economy,  as  well  as  to  improve  internal  control  in 
public  sector,  are  yet  to  be  efficiently  applied.  Progress  was  made  in  aligning  national 
accounts  and  GNI  calculations.  Customs  declarations  and  excise  documents  are  fully 
electronically  processed  and  progress  was  made  in  the  reporting  period  with  continuous 
consolidation,  application  and  upgrade  of  IT  systems  (for  further  information,  see 
developments under chapter 16 — Taxation, chapter 18 — Statistics, chapter 29 — Customs 
union and chapter 32 — Financial control). 

With  regard  to  traditional  own  resources,  initial  capacity  building  on  accounting  and 
revenue  allocation  processes  as  per  the  EU  provisions  on  A  and  B  accounts  has  started. 
Progress  was  made  on  building-up 
the  customs  administration’s  operational  and 
administrative  capacities  for  enforcement  of  national  legislation  and  procedures,  accounting 
management and IT services, as a basis for the establishment of the traditional own resources 
system.  The  concept  of  authorised  economic  operators  (AEO)  was  further  promoted.  A 
detailed analysis of the current  process  of the customs administration for recording customs 
debt and customs duties in its IT system has been elaborated.  

Concerning VAT, the Tax System Reform Strategy 2021-25 continues to be implemented. In 
addition,  a  2022  strategic  action  plan  2022-24  was  elaborated.  Its  implementation  is 
monitored quarterly by an established working group (See further information under Chapter 
16 – Taxation). 

With  regard  to  the  administrative  infrastructure,  further  efforts  are  needed  in  order  to 
ensure the timely and efficient functioning of the process of calculation, collection, payment 

103 

 
 
and control of own resources as well as to improve reporting and co-ordination mechanisms 
among all bodies involved. 

CLUSTER 6: EXTERNAL RELATIONS  

Cluster  6  covers:  external  relations  (chapter  30)  and  foreign,  security  and  defence  policy 
(chapter 31). North Macedonia is moderately prepared in the area of external relations and has 
reached a good level  of preparation with  regard to  the common foreign and security policy. 
The country has made limited progress  during the reporting period on common commercial 
policy. North Macedonia has made very good progress by fully aligning with the EU common 
foreign  and  security  policy,  following  Russia’s  invasion  of  Ukraine.  By  doing  so,  North 
Macedonia has shown it can be a reliable partner.  

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.  

The  country  is  moderately  prepared  in  the  area  of  external  relations  and  made  limited 
progress over the last year. North Macedonia continued its good cooperation with the EU, 
including within the World Trade Organisation (WTO), and the implementation of CEFTA 
protocols.  However,  North  Macedonia  during  the  reporting  period  introduced  export 
restrictions  on  a  number  of  products  without  presenting  sufficient  justifications,  nor 
following the procedures set out in the SAA. These decisions should be revoked, and North 
Macedonia  should  abstain  from  taking  unilateral  trade  measures  without  justification  and 
prior  consultation  with  the  Commission,  in  line  with  its  commitments  in  the  SAA.  The 
institutional  capacity  to  fully  participate  in  the  EU  commercial,  development  and 
insufficient.  Last  year`s  recommendations  were  partially 
humanitarian  policies 
implemented. 

is 

In the coming year, the country should in particular: 

  remove remaining unjustified trade restrictions; 

  establish a legal framework covering international cooperation and development policy 
as  well  as  humanitarian  aid  towards  non-EU  countries  in  line  with  EU  policies  and 
principles; 

  further  complete  implementation  of  CEFTA  Protocol  6  on  trade  in  services,  and 

conclude and adopt CEFTA Protocol 7 on dispute settlement. 

On common commercial policy, North Macedonia continued to coordinate its positions and 
align closely its policies with those of the EU, including within the WTO, and is supporting 
the WTO reform. The provisions of the Trade Facilitation Agreement are fully applied and the 
National  Committee  on  Trade  Facilitation  met  twice  in  2021.  There  was  no  progress  in  the 
negotiations  for  accession  to  the  WTO  Agreement  on  Government  Procurement.  The 
administrative  capacity  of  the  Ministry  of  Economy,  in  charge  of  trade  policy,  should  be 
further  strengthened.  In  March  2022,  the  government  introduced  quantitative  restrictions 
prohibiting  the  export  of  sunflower  oil,  wheat,  barley,  maize  and  wheat  flour,  justifying  it 
with critical shortages of essential products on the domestic market in the light of the war in 
Ukraine.  These  restrictions  were  lifted  in  May  2022.  However,  in  July  2022,  North 
Macedonia  re-introduced  the  export  restrictions  on  wheat,  wheat  flour  and  sunflower  seeds 
and extended these restrictions to certain types of wood. In each case, insufficient evidence of 
a  shortage  was  provided  and  the  Commission  was  not  notified  or  consulted  in  advance  as 
required  under  the  SAA.  In  October  2022  the  Government  decided  to  lift  the  export 

104 

 
 
restrictions on wheat, wheat flour and sunflower seeds. The remaining export restrictions on 
certain  types  of  wood  should  be  removed  without  delay  unless  sufficient  justification  is 
presented.  

North  Macedonia  continued  to  participate  actively  in  CEFTA  and  chaired  its  activities  in 
2021.  The  country  has  committed  to  implement  the  action  plan  for  the  development  of  a 
common  regional  market  among  the  Western  Balkan  countries.  The  implementation  of 
Additional  Protocol  6  on  services  is  underway.  The  country  took  an  active  role  in 
implementing the green corridors, ensuring an uninterrupted flow of essential goods at the key 
border crossings with the neighbouring countries. The amended free trade agreement between 
North  Macedonia  and  CEFTA  countries  was  ratified  in  December  2021,  replacing  the 
protocol  concerning  the  concept  of  originating  products  and  methods  of  administrative 
cooperation. 

The system for export control of dual-use goods and technologies is functional. The country 
has prepared amendments to its framework law on dual-use export controls in order to align it 
with EU Regulation 2021/821 on control of exports, transfer, brokering, and transit of dual-
use  goods  and  technologies.  Outreach  is  performed  regularly  to  inform  the  industry  about 
legislative changes. 

39 bilateral agreements with third countries (BITs) are in force, of which 19 are with EU 
Member States. The country is working on updating the existing model agreement for BITs.  

There  was  no  progress  in  development  policy  and  humanitarian  aid.  The  country  is 
encouraged  to  establish  a  policy  framework  in  the  areas  of  development  and  international 
cooperation,  as  well  as  humanitarian  aid,  towards  non-EU  countries  in  line  with  applicable 
EU policies and principles. 

Chapter 31: Foreign, security and defence policy 

Member  States  must  be  able  to  conduct  political  dialogues  in  the  framework  of  foreign, 
security  and  defence  policy,  align  with  EU  statements,  take  part  in  EU  actions,  and  apply 
agreed sanctions and restrictive measures. 

North  Macedonia  has  reached  a  good  level  of  preparation  in  the  area  of  common  foreign, 
security  and  defence  policy.  Very  good  progress  was  made  during  the  reporting  period,  as 
the country aligned fully with the EU common foreign and security policy following Russia’s 
invasion  of  Ukraine.  Participation  in  EU  crisis  management  missions  and  operations  was 
stepped up. In the coming year, the country should in particular: 

  Maintain full alignment with the EU common foreign and security policy. 

Regular  political  dialogue  on  foreign  and  security  policy  issues  between  the  EU  and  the 
country  continued,  including  through  active  engagement  of  North  Macedonia  in  the  EU- 
Western  Balkans  informal  CFSP  Dialogue  at  political  directors’  level.  The  institutional 
framework  enabling  the  country’s  participation  in  the  common  foreign  and  security  policy 
and, respectively, the common security and defence policy is in place. 

On  the  common  foreign  and  security  policy  (CFSP),  the  country’s  alignment  rate  with 
relevant High Representative statements on behalf of the EU and Council Decisions reached 
100 %  in  February  2022  (compared  to  96 %  in  2021).  This  clearly  confirms  the  country’s 
strategic  orientation  towards  the  EU.  Following  Russia’s  invasion  of  Ukraine,  the  country 
immediately aligned fully with the EU restrictive measures on Russia and Belarus, including 
the  outstanding  sanctions  imposed  following  the  illegal  annexation  of  Crimea.  The 
government  continues  to  implement  the  EU restrictive measures.  North  Macedonia expelled 
eleven  Russian  diplomats  and  on  at  least  two  occasions  refused  overflight  permission  to 

105 

 
 
Russian  government  planes.  North  Macedonia  also  aligned  with  all  the  EU  statements 
submitted  at  international  organisations  (UN,  OSCE  and  Council  of  Europe),  including  the 
EU  position  in  UNGA  when  voting  on  resolutions  regarding  Russia’s  aggression  against 
Ukraine and its  humanitarian impact. North  Macedonia voted for suspension  of the Russian 
Federation from the UN Human Rights Council. 

North Macedonia maintains a bilateral immunity agreement with the United States, granting 
US citizens exemptions from the jurisdiction of the International Criminal Court. In doing 
so, the country does not comply with the EU common positions on the integrity of the Rome 
Statute  or  with  the  related  EU  guiding  principles  on  bilateral  immunity  agreements.  
Alignment with the EU position is therefore needed. 

On  conflict  prevention,  North  Macedonia  continued  the  implementation  of  the  2018 
Regional Roadmap for a sustainable solution to the illegal possession, misuse and trafficking 
of small arms and light weapons, and their ammunition in the Western Balkans.  

On non-proliferation, North Macedonia participates in some, but not all, international export 
control arrangements and instruments on non-proliferation. It participates in the Proliferation 
Security Initiative and the Hague Code of Conduct. The country is committed to meeting the 
requirements  to  join  the  Wassenaar  Arrangement.  The  country  chaired  the  Multinational 
Advisory Group of the Centre for Security Cooperation (RACVIAC) until October 2021. 

North  Macedonia  continued  to  actively  cooperate  with  international  organisations,  while 
joining the EU in supporting the decision to suspend, and later expel, Russia from the Council 
of  Europe.  As  2023  Chairman-in-Office  of  the  OSCE,  North  Macedonia  joined  Poland  and 
Sweden in the OSCE Troika from January 2022 and assumed the Chairmanship of the OSCE 
Mediterranean Partnership for Cooperation Group.  

In terms of security measures, the law on Classified Information, based on the 2013 Council 
Decision,  is  in  force.  By-laws  regulating  the  inspection  supervision  of  work  with  classified 
information  are  in  place  since  2019,  while  those  on  personal  security  were  adopted  in  July 
2022.  Agreements  on  the  exchange  and  mutual  protection  of  classified  information  were 
signed with Greece and the US in 2021 and are being negotiated with Belgium, Portugal and 
Norway. 

The country continued to actively participate in  EU crisis management operations under the 
common  security  and  defence  policy  (CSDP),  notably  EUFOR  ALTHEA  in  Bosnia  and 
Herzegovina.  North  Macedonia  participates  in  the  military  training  mission  in  the  Central 
African  Republic  (EUTM  RCA).  In  February  2022,  North  Macedonia  signed  the  Note  of 
Accession  to  the  Technical  Agreement  on  the  establishment  of  an  EU  Multinational  Battle 
group  with  Greece  as  framework  Nation  and  the  participation  of  Bulgaria,  Cyprus  and 
Romania (HELBROC BG). 

North  Macedonia  maintained  a  presence  in  a  number  of  NATO-led  missions  including 
‘KFOR’  in  Kosovo.  In  May  2022,  North  Macedonia  hosted  the  NATO  Swift  Response  22 
exercise  involving  4 500  personnel  from  eight  allied  countries.  The  country  continues  to 
participate in the United Nations Interim Force in Lebanon (UNIFIL) operation. 

North  Macedonia  completed  the  EU’s  hybrid  risk  survey  with  the  objective  of  identifying 
systemic  vulnerabilities  and  streamlining  the  assistance  provided  by  the  EU  in  this  field. 
Based on the EU’s recommendations from the survey, the government adopted  the National 
strategy on building resilience and addressing hybrid threats (2021-2025), together with an 
Action Plan in December 2021.  

106 

 
 
ANNEX I – RELATIONS BETWEEN THE EU AND NORTH MACEDONIA 

North Macedonia has been participating in the Stabilisation and Association process since 
1999. The Stabilisation and Association Agreement (SAA) with the EU, signed in 2001, sets 
the  framework  for  relations  with  the  EU,  including  political,  economic  and  technical 
dialogues.  Experts  met  in  seven  Sub-committees  and  one  Special  Group,  according  to 
schedule.  

North  Macedonia  is  a  candidate  country  since  2005,  with  consecutive  recommendations  by 
the European Commission to open accession negotiations since 2009. On 26 March 2020, the 
European Council endorsed the Council’s decision to open accession negotiations with North 
Macedonia. The first Intergovernmental Conference took place on 19 July 2022, following the 
approval by the Council of the Negotiating Framework. The Commission started immediately 
the screening exercise. 

Visa liberalisation for citizens of North Macedonia travelling to the Schengen area has been 
in  force since December 2009. A readmission agreement has been in  force since 2008. The 
Commission’s  August  2020  fourth  report  under  the  visa  suspension  mechanism  concluded 
that North Macedonia continues to meet the visa liberalisation benchmarks. 

North  Macedonia  has  reached  100%  alignment  with  EU  common  foreign  and  security 
policy  positions  and  declarations  over  the  reporting  period.  North  Macedonia  continued  to 
actively  participate  in  EU  crisis  management  missions  and  operations  under  the  common 
security and defence policy. 
Under the Instrument for Pre-accession Assistance 2021 – 202719 (IPA III), a first financing 
decision  of  EUR  90.45  million  was  adopted  at  the  end  of  2021,  providing  support  for  EU 
accession and post-COVID-19 recovery, and enhancing the country’s reforms in the areas of 
rule  of  law,  fight  against  corruption  and  organised  crime,  protection  of  environment, 
sustainable  economic  development  and  facilitating  the  trade  with  the  EU.  This  first  set  of 
programmes,  complemented  by  a  significant  package  of  multi-country  programmes  and  the 
rural development programme IPARD III, provide a significant contribution to kick-start the 
implementation of the Economic and Investment Plan for the Western Balkans and the Green 
Agenda.  North  Macedonia  participates  also  in  cross-border  cooperation  programmes, 
transnational cooperation programmes and Union Programmes.  

The  new  activities  will  build  on  and  add  to  the  on-going  programmes  under  IPA  II  (2014-
2020), which are still providing significant support for the social and economic development 
of the country and contribute to key reforms. On the fundamentals, the ongoing EU assistance 
advanced the digital  transformation  of the country, putting  in  place the first almost  70 fully 
automated public e-services for citizens and businesses and continues to back up the reforms 
in  the  areas  of  rule  of  law,  public  administration  and  public  finance.  In  addition,  the  civil 
society and private sector benefits  of important  EU support providing opportunities to  grow 
and  develop  in  a  favourable  environment.  Significant  EU  financial  assistance  has  been 
allocated  to  North  Macedonia  for  protecting  the  environment  and  boosting  the  connectivity 
with the EU transport systems.  

The  EU  provided  substantial  support  to  North  Macedonia  in  fighting  COVID-19  from  the 
start of the pandemic and mobilised a substantial financial response package of around EUR 
230 million including in macro-financial assistance, for immediate medical needs and socio-
economic  response  to  the  pandemic,  which  has  created  an  incentive  for  investment  and 

19 OJ L 330, 20.9.2021  

107 

 
 
                                                           
growth, providing businesses with the opportunity to become sustainable and relevant in the 
European economic context.  

The  Commission  set  aside  EUR  70  million  in  grants  from  IPA  II  for  the  Western  Balkan 
partners to reimburse the Member States for the resale of doses they obtained under the EU 
Advance Purchase Agreements with  COVID-19  vaccine producers,  as well as equipment to 
facilitate the vaccine campaigns, of which North Macedonia received EUR 8.2 million., North 
Macedonia  has  received  almost  780  000  vaccines  as  donations  from  EU  Member  States,  or 
via  re-sales  by  EU  Member  States  fully  funded  by  the  EU  grant,  and  is  in  the  process  of 
purchasing  further  EMA  authorised  COVID-19  doses  bilaterally  using  the  grant.  It  has  also 
received over 200 000 via the COVAX initiative, which is significantly supported by the EU 
(COVAX also ensured the delivery of some of the doses donated by EU Member States).  

108 

 
 
 
 
 
 
STATISTICAL DATA (as of 01.09.2022) 

North Macedonia 

Basic data 

Population (thousand) 

Total area of the country (km²) 

Note 

2009 

2016 

2017 

2018 

2019 

2020 

2 049 s 

2 071 s 

2 074 s 

2 075 s 

2 077 s 

2 076 s 

1) 

25 436 w 

25 436 w 

25 436 w 

25 436 w 

25 436 w 

25 436 w 

National accounts 

Note 

2009 

2016 

2017 

2018 

2019 

2020 

Gross domestic product (GDP) (million national currency) 

414 622 

594 795 

618 106 

660 878 

692 683 

655 931 p 

Gross domestic product (GDP) (million euro) 

6 767 

9 657 

10 038 

10 744 

11 262 

10 635 p 

GDP (euro per capita) 

3 300 e 

4 660 e 

4 840 e 

5 170 e 

5 422 sw 

5 122 psw 

GDP per capita (in purchasing power standards (PPS)) 

8 313 e 

10 511 e 

10 786 e 

11 391 e 

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 (%) 

34.6 

-  0.4 

4 

-  5 

: 

: 

45 

12.0 

15.4 

6.5 

37.3 

2.8 

2 

1 

: 

: 

44 

10.6 

19.7 

8.0 

36.8 

1.1 

3 

-  2 

: 

: 

43 

9.1 

20.5 

7.5 

37.6 

2.9 

0 

3 

: 

: 

: 

38.1 

3.9 

2 

2 

: 

: 

45 

45 

: 

: 

-  6.1 p 

: 

: 

: 

: 

: 

9.8 

21.5 

6.2 

9.4 

20.8 

6.5 

9.8 p 

19.7 p 

6.2 p 

66.2 s 

61.8 s 

62.9 s 

62.6 s 

63.4 s 

64.1 ps 

95.8 

24.6 

1.1 

82.3 

24.4 

8.1 

81.6 

22.5 

9.7 

80.1 

20.0 

12.2 

79.5 

21.0 

13.2 

83.9 p 

22.1 p 

6.9 p 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Exports of goods and services, relative to GDP (%) 

Imports of goods and services, relative to GDP (%) 

Gross fixed capital formation by the general government sector, as a percentage of GDP (%) 

Business 

Industrial production volume index (2015 = 100) 

Number of active enterprises (number) 

32.8 

54.4 

: 

2009 

89.1 

50.7 

65.5 

: 

2016 

103.4 

55.1 

69.0 

: 

2017 

103.6 

60.4 

72.8 

: 

2018 

109.2 

62.4 

76.2 

: 

2019 

113.2 

58.9 p 

71.9 p 

: 

2020 

102.4 

Note 

56 131 w 

55 469 w 

55 359 w 

58 231 w 

58 765 w 

57 853 w 

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) (%) 

17.6 w 

10.3 

11.4 

9.3 

9.2 

7.7 

8.8 

6.8 

9.2 

12.1 

76.0 sw 

75.4 sw 

74.3 sw 

74.1 sw 

73.7 sw 

Value added by SMEs (in the non-financial business economy) (EUR million) 

2 101 sw 

2 607 ps 

2 698 sw 

2 895 sw 

3 215 s 

: 

: 

: 

: 

Total value added (in the non-financial business economy) (EUR million) 

3 343 w 

4 031 p 

4 252 

4 579 

4 878 

4 575 w 

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) 

Note 

2009 

-  0.1 d 

: 

2016 

0.2 d 

: 

2017 

2.1 d 

: 

Balance of payments 

Note 

2009 

2016 

2017 

2018 

2.3 d 

: 

2018 

-  7.1 

2019 

0.7 d 

: 

2020 

1.2 d 

: 

2019 

2020 

-  368.3 

-  366.2 

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 (%) 

: 

: 

: 

: 

: 

: 

: 

: 

-  275.5 

-  102.9 

- 1 812.9 

- 1 787.9 

- 1 736.2 

- 1 948.8 

- 1 804.7 

340.7 

377.0 

370.9 

335.7 

426.5 

-  383.9 

-  397.5 

-  450.7 

-  519.6 

-  411.5 

1 580.6 

1 705.6 

1 808.9 

1 764.4 

1 423.4 

90.8 

-  1.9 

22.2 

112.8 

-  2.0 

42.0 

109.1 

-  1.3 

51.6 

43.2 

-  1.5 

39.8 

110.0 

-  2.3 

38.4 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net balance (inward - outward) of foreign direct investment (FDI) (million euro) 

136.9 w 

316.9 w 

180.0 w 

603.7 w 

363.3 w 

154.7 w 

Foreign direct investment (FDI) abroad (million euro) 

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

8.1 w 

: 

21.6 w 

13.6 w 

1.8 w 

7.2 w 

10.4 w 

35.5 w 

0.4 

27.2 

46.7 w 

31.3 w 

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

145.0 w 

338.4 w 

181.7 w 

614.1 w 

398.8 w 

201.4 w 

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

181.4 w 

162.5 w 

86.0 w 

290.4 w 

220.2 

42.3 w 

**Net international investment position, relative to GDP (%) 

-  53.4 w 

-  57.7 w 

-  58.0 w 

-  56.2 w 

-  57.3 pw 

-  64.9 w 

Year on year rate of change in gross inflow of remittances (in national currency) from migrant 
workers (%) 

2.8 sw 

2.0 sw 

1.9 sw 

1.9 sw 

: 

: 

Public finance 

Note 

2009 

2016 

2017 

2018 

2019 

2020 

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

-  2.6 w 

-  2.7 w 

-  2.7 w 

-  1.8 w 

-  2.0 w 

-  8.1 w 

General government gross debt relative to GDP (%) 

Total  government revenues, as a percentage of GDP (%) 

Total government expenditure, as a percentage of GDP (%) 

23.6 w 

31.0 w 

33.6 w 

Financial indicators 

Gross external debt of the whole economy, relative to GDP (%) 

Note 

2009 

55.9 sw 

39.9 w 

28.5 w 

31.2 w 

2016 

74.7 s 

39.4 w 

29.1 w 

31.8 w 

2017 

73.4 s 

40.4 w 

28.6 w 

30.4 w 

2018 

73.0 s 

40.7 w 

29.2 w 

31.2 w 

2019 

72.4 s 

51.2 w 

28.5 w 

36.7 w 

2020 

80.3 ps 

Gross external debt of the whole economy, relative to total exports (%) 

176.4 w 

146.7 w 

133.8 w 

121.4 w 

117.0 w 

136.3 w 

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) 

2) 

2) 

2) 

892.3 bw 

1 867.8 w 

2 053.3 w 

2 436.7 w 

2 857.4 w 

3 314.2 w 

3 078.9 bw 

4 395.9 w 

4 564.2 w 

5 103.4 w 

5 609.3 w 

6 215.5 w 

3 296.6 bw 

5 240.6 w 

5 480.3 w 

6 072.6 w 

6 571.1 w 

7 070.9 w 

Total credit by monetary financial institutions to residents (consolidated) (million euro) 

2 959.2 w 

4 632.0 w 

4 883.0 w 

5 237.6 w 

5 552.3 w 

5 791.4 w 

**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 (%) 

: 

: 

: 

3) 

4) 

4) 

6.01 w 

10.00 w 

: 

6.9 w 

1.9 w 

7.6 w 

12.2 w 

6.1 w 

: 

: 

1.02 w 

4.25 w 

0.25 w 

: 

: 

1.01 w 

3.75 w 

0.25 w 

: 

: 

0.99 w 

3.00 w 

0.15 w 

: 

: 

1.00 w 

2.75 w 

0.15 w 

: 

: 

1.00 w 

2.00 w 

0.15 w 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Euro exchange rates: average of period (1 euro = … national currency) 

61.276 

61.596 

61.575 

61.512 

61.506 

61.675 

Trade-weighted effective exchange rate index, 42 countries (2015 = 100) 

**3 year change (T/T-3) in the trade-weighted effective exchange rate index, 42 countries 
(2015 = 100) 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

Value of reserve assets (including gold) (million euro) 

4) 

1 597.5 w 

2 613.4 w 

2 336.3 w 

2 867.1 w 

3 262.6 w 

3 359.9 w 

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) 

Note 

2009 

3 637 

1 937 

2016 

6 177 

4 390 

2017 

6 825 

5 007 

2018 

7 676 

5 873 

2019 

8 463 

6 424 

2020 

7 599 

5 781 

- 1 700 

- 1 786 

- 1 818 

- 1 804 

- 2 040 

- 1 818 

Terms of trade (export price index / import price index * 100) (number) 

5) 

96.9 sw 

96.6 sw 

95.3 sw 

94.9 sw 

: 

Share of exports to EU-27 countries in value of total exports (%) 

Share of imports from EU-27 countries in value of total imports (%) 

60.5 s 

53.3 s 

78.8 s 

51.3 s 

79.7 s 

52.8 s 

80.3 s 

52.9 s 

78.5 s 

50.8 s 

Demography 

Note 

2009 

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 

Note 

Economic activity rate for persons aged 20–64: proportion of the population aged 20–64 that 
is economically active (%) 

*Employment rate for persons aged 20–64: proportion of the population aged 20–64 that are 
in employment (%) 

Male employment rate for persons aged 20–64 (%) 

Female employment rate for persons aged 20–64 (%) 

Employment rate for persons aged 55–64: proportion of the population aged 55–64 that are 
in employment (%) 

2.3 

11.7 

72.3 

76.7 

2009 

70.1 

47.9 

58.4 

37.1 

34.6 

2016 

1.2 

11.9 

73.4 

77.5 

2016 

69.6 

53.3 

63.7 

42.5 

40.7 

2017 

0.7 

9.2 

74.1 

77.9 

2017 

70.3 

54.8 

65.6 

43.7 

41.4 

2018 

0.8 

5.7 

74.6 

78.8 

2018 

70.4 

56.1 

66.6 

45.2 

42.7 

2019 

-  0.3 

5.6 

74.7 

78.6 

2019 

71.5 

59.2 

69.7 

48.4 

45.1 

: 

77.5 s 

46.3 s 

2020 

-  3.2 

5.7 

72.2 

76.7 

2020 

70.5 

59.1 

68.9 

49.0 

45.7 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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 
(%) 

6) 

27.0 w 

16.6 s 

23.1 s 

7.2 s 

53.0 s 

23.5 w 

16.2 s 

23.3 s 

7.2 s 

53.2 s 

23.2 w 

15.7 s 

23.9 s 

7.4 s 

52.9 s 

23.1 w 

13.9 s 

24.1 s 

7.0 s 

55.0 s 

23.2 w 

12.0 s 

23.9 s 

6.9 s 

57.1 s 

24.4 w 

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) (%) 

73.0 w 

76.5 w 

76.8 w 

76.9 w 

76.8 w 

75.6 w 

32.2 

31.8 

32.8 

55.1 

26.3 

37.5 

17.9 

23.7 

24.4 

22.8 

48.2 

19.1 

28.8 

17.6 

22.4 

22.8 

21.8 

46.7 

17.4 

25.6 

17.1 

20.8 

21.3 

19.9 

45.4 

15.5 

23.1 

16.6 

17.3 

16.5 

18.4 

35.6 

12.4 

23.7 

13.3 

16.4 

16.7 

15.9 

35.7 

12.4 

21.4 

12.9 

Social cohesion 

Note 

2009 

2016 

2017 

2018 

2019 

2020 

Average nominal monthly wages and salaries (national currency) 

19 957 w 

22 342 w 

22 928 w 

24 276 w 

25 213 w 

27 182 w 

Index of real wages and salaries (index of nominal wages and salaries divided by the inflation 
index) (2016 = 100) 

99 w 

100 w 

101 w 

106 w 

109 w 

116 w 

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 (%) 

: 

: 

16.2 

34 

32.9 

9.9 

32 

37.3 

8.5 

32 

37.7 

7.1 

31 

32.0 

7.1 

31 

34.9 

5.7 

Standard of living 

Note 

2009 

Number of passenger cars relative to population size (number per thousand population) 

137.0 

2016 

190.0 

2017 

194.0 

2018 

200.0 

2019 

205.0 

2020 

207.0 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of mobile phone subscriptions relative to population size (number per thousand 
population) 

Mobile broadband penetration (per 100 inhabitants) 

Fixed broadband penetration (per 100 inhabitants) 

7) 

7) 

7) 

948.4 w 

989.9 w 

968.3 w 

935.9 w 

924.8 w 

896.8 w 

: 

: 

57.4 w 

61.1 w 

60.9 w 

65.1 w 

66.1 w 

18 w 

19 w 

19 w 

22 w 

23 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 
(%) 

Note 

2009 

1) 

27.5 sw 

251 

Note 

2009 

: 

8) 

0.20 sw 

: 

2016 

26.9 s 

259 

2016 

: 

0.44 

: 

2017 

26.9 s 

259 

2017 

: 

0.35 

: 

2018 

26.9 s 

287 

2018 

: 

0.36 

: 

2019 

26.9 s 

335 

2019 

: 

0.37 

: 

2020 

26.9 s 

335 

2020 

: 

0.38 

: 

Percentage of households who have internet access at home (%) 

42.0 

75.0 

74.0 

79.0 

82.0 

79.0 

Environment 

Note 

2009 

2016 

2017 

2018 

2019 

*Index of greenhouse gas emissions,  CO2 equivalent (1990 = 100) 

9) 

Energy intensity of the economy (kg of oil equivalent per 1 000 euro GDP at 2015 constant 
prices) 

81.8 w 

362.2 

80.1 w 

113.0 w 

79.5 w 

118.7 w 

290.0 

293.0 

267.1 

283.8 

274.6 

Electricity generated from renewable sources relative to gross electricity consumption (%) 

15.5 

24.1 

24.8 

24.8 

23.8 

23.5 

Road share of inland freight transport (based on tonne-km) (%) 

89.0 w 

96.9 w 

96.4 w 

97.2 w 

96.7 w 

96.9 w 

Energy 

Note 

2009 

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) 

1 608 

0 

1 293 

0 

2016 

1 121 

0 

745 

0 

2017 

1 166 

0 

849 

0 

2018 

1 148 

0 

800 

0 

2019 

1 160 

0 

860 

0 

2020 

996 

0 

684 

0 

Net imports of all energy products (thousand TOE) 

1 274 s 

1 590 s 

1 553 s 

1 513 s 

1 664 s 

1 645 s 

2020 

: 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross inland energy consumption (thousand TOE) 

Gross electricity generation (GWh) 

2 817 

6 828 

2 706 

5 630 

2 763 

5 600 

2 592 

5 607 

2 862 

5 870 

Agriculture 

Note 

2009 

2016 

2017 

2018 

2019 

Agricultural production volume index of goods and services (at producer prices) (2010 = 100) 

93.6 w 

112.2 w 

99.9 w 

111.8 w 

105.4 w 

2 599 

5 346 

2020 

: 

Utilised agricultural area (thousand hectares) 

1 014.4 

1 267.1 

1 266.0 

1 264.1 

1 264.6 

1 270.5 

: 

: 

: 

: 

605.7 

0.0 

648.8 

255.0 

203.0 

255.0 

202.0 

256.0 

196.0 

219.0 

136.0 

222.0 

164.0 

825.0 s 

832.0 s 

844.0 s 

771.0 s 

726.0 s 

477.4 

640.9 

0.0 

810.0 

462.2 

447.7 

0.0 

769.6 

478.5 

598.3 

0.0 

792.9 

456.1 

563.1 

0.0 

772.7 

461.1 

578.8 

0.0 

794.2 

Livestock numbers: live bovine animals (thousand heads, end of period) 

Livestock numbers: live swine (thousand heads, end of period) 

Livestock numbers: live sheep and live goats (thousand heads, end of period) 

Raw milk available on farms (thousand tonnes) 

Harvested crop production: cereals (including rice) (thousand tonnes) 

Harvested crop production: sugar beet (thousand tonnes) 

Harvested crop production: vegetables (thousand tonnes) 

Source: Eurostat and the statistical authorities in North Macedonia 

: = not available 

  b = break in series 

  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)  Data is harmonised with the surface area in the Register of territorial units that is maintained by Agency for Real Estate Cadastre, as the official source of the surface areas of 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
the territorial units in the country. 

2)  From 2009: compiled in accordance with the IMF Monetary and Financial Statistics Manual and Compilation Guide, 2016. 

3)  Data cover bilateral over-night transactions. The interest rates are calculated as weighted averages. 

4)  End of year (31 December). 

5)  Laspeyres unit value index. 2015 = 100. 

6) 

In the public sector are included data: Other (mixed, collective, state, undefined) 

7)  Source: Agency for electronic communications (AEC). 

8)  Total expenditures for R&D as published in statistical reviews for R&D activity. 

9)  Part of the greenhouse gas inventory prepared in the context of the Fourth National Communication (UNFCCC).