COMMISSION STAFF WORKING DOCUMENT North Macedonia 2023 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 2023 Communication on EU Enlargement policy
Date: 2023-11-08
Institutions: Directorate-General for Neighbourhood and Enlargement Negotiations, European Commission
Subjects: North Macedonia, accession criteria, accession negotiations, pre-accession strategy, regional cooperation

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 8.11.2023  SWD(2023) 693 final  COMMISSION STAFF WORKING DOCUMENT North Macedonia 2023 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 2023 Communication on EU Enlargement policy                       {COM(2023) 690 final} - {SWD(2023) 690 final} - {SWD(2023) 691 final} - {SWD(2023) 692 final} - {SWD(2023) 694 final} - {SWD(2023) 695 final} - {SWD(2023) 696 final} - {SWD(2023) 697 final} - {SWD(2023) 698 final} - {SWD(2023) 699 final}  
 
 
Table of Contents 

1.  

INTRODUCTION ........................................................................................................................................... 3 
1.1.  
CONTEXT ....................................................................................................................................................... 3 
1.2.   SUMMARY OF THE REPORT .................................................................................................................... 3 
STATE OF PLAY OF THE ACCESSION NEGOTIATIONS ............................................................................................ 8 
1.3.  

2.  CLUSTER 1: THE FUNDAMENTALS OF THE ACCESSION PROCESS .......................................................... 8 
FUNCTIONING OF DEMOCRATIC INSTITUTIONS AND PUBLIC ADMINISTRATION REFORM....................................... 8 

2.1. 

2.1.1. 
Democracy ............................................................................................................................ 8 
2.1.2  Public administration reform .................................................................................................. 13 
2.2.  RULE OF LAW AND FUNDAMENTAL RIGHTS ..................................................................................... 17 
2.2.1  Chapter 23: Judiciary and fundamental rights ..................................................................... 17 
2.2.2  Chapter 24: Justice, freedom and security ............................................................................ 39 
2.3. ECONOMIC CRITERIA ................................................................................................................................. 54 
2.3.1. The existence of a functioning market economy ...................................................................... 54 
2.3.2. The capacity to cope with competitive pressure and market forces within the Union ............. 63 
2.4. PUBLIC PROCUREMENT, STATISTICS, FINANCIAL CONTROL .................................................................................... 67 

Chapter 5: Public procurement ........................................................................................................... 67 
Chapter 18: Statistics .......................................................................................................................... 69 
Chapter 32: Financial control .............................................................................................................. 71 

3.  GOOD NEIGHBOURLY RELATIONS AND REGIONAL COOPERATION .................................................... 74 
4. ABILITY TO ASSUME THE OBLIGATIONS OF MEMBERSHIP ...................................................................... 76 

CLUSTER 2: INTERNAL MARKET .................................................................................................................................. 76 
Chapter 1: Free movement of goods ................................................................................................... 77 
Chapter 2: Freedom of movement for workers ................................................................................... 79 
Chapter 3: Right of establishment and freedom to provide services .................................................. 79 
Chapter 4: Free movement of capital ................................................................................................. 81 
Chapter 6: Company law ..................................................................................................................... 82 
Chapter 7: Intellectual property law ................................................................................................... 83 
Chapter 8: Competition policy ............................................................................................................. 84 
Chapter 9: Financial services ............................................................................................................... 85 
Chapter 28: Consumer and health protection ..................................................................................... 87 

CLUSTER 3: COMPETITIVENESS AND INCLUSIVE GROWTH ............................................................................................. 89 
Chapter 10: Digital transformation and media ................................................................................... 89 
Chapter 16: Taxation ........................................................................................................................... 91 
Chapter 17: Economic and monetary policy ....................................................................................... 92 
Chapter 19: Social policy and employment ......................................................................................... 93 
Chapter 20: Enterprise and industrial policy ....................................................................................... 96 
Chapter 25: Science and research ....................................................................................................... 97 
Chapter 26: Education and culture ..................................................................................................... 98 
Chapter 29: Customs union ............................................................................................................... 100 

CLUSTER 4: THE GREEN AGENDA AND SUSTAINABLE CONNECTIVITY ........................................................................... 101 
Chapter 14: Transport policy ............................................................................................................. 102 
Chapter 15: Energy ............................................................................................................................ 103 
Chapter 21: Trans-European networks ............................................................................................. 105 
Chapter 27: Environment and climate change .................................................................................. 107 

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CLUSTER 5: RESOURCES, AGRICULTURE AND COHESION ............................................................................................. 109 
Chapter 11: Agriculture and rural development ............................................................................... 109 
Chapter 12: Food safety, veterinary and phytosanitary policy ......................................................... 111 
Chapter 13: Fisheries and aquaculture ............................................................................................. 112 
Chapter 22: Regional policy and coordination of structural instruments ......................................... 113 
Chapter 33: Financial and budgetary provisions ............................................................................... 115 

CLUSTER 6: EXTERNAL RELATIONS ............................................................................................................................ 116 
Chapter 30: External relations .......................................................................................................... 116 
Chapter 31: Foreign, security and defence policy ............................................................................. 117 
ANNEX I – RELATIONS BETWEEN THE EU AND NORTH MACEDONIA ........................................................................... 120 

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1.  

INTRODUCTION 

1.1.   CONTEXT 

The first intergovernmental conference on accession negotiations with North Macedonia took 
place in July 2022. At the same time, the first step in the accession negotiations process was 
taken with  the launch of the analytical  examination of the EU  acquis, the  ‘screening’. This 
has  progressed  smoothly.  North  Macedonia  continued  to  implement  the  Stabilisation  and 
Association Agreement and the joint bodies under the agreement met at regular intervals. 

The  EU  accession  negotiation  process  with  North  Macedonia  is  conducted  in  line  with  the 
revised  enlargement  methodology,  and  with  the  requirements  set  out  in  the  Negotiating 
Framework,  which  have  an  even  stronger  focus  on  the  fundamentals  (cluster  1)  of  the 
accession process. 

The  authorities  have  continued  to  demonstrate  and  to  declare  publicly  their  commitment  to 
advancing on their EU path. Now that the accession negotiations process has begun, the pace 
of EU-related reforms needs to pick up. 

North Macedonia has also fully aligned with the EU positions on Russia’s war of aggression 
against Ukraine, sending a strong signal of its strategic choice of EU accession and showing 
itself once more to be a reliable partner. In 2023, North Macedonia has played an active role 
in a complex geopolitical context during its term as chair of the Organisation for Security and 
Cooperation in Europe (OSCE). The impact  of Russia’s  war of aggression against Ukraine, 
including  high  energy,  commodity  and  food  prices  and  disruptions  in  supply  chains,  has 
weighed heavily on the economy and seriously affected vulnerable households and small and 
medium-sized enterprises. 

1.2.   SUMMARY OF THE REPORT1 

The  reporting  period  was  marked  by  the  start  of  the  EU  accession  negotiations  process, 
including  the  screening  process.  The  political  situation  remained  polarised,  which  had  an 
impact on the proper functioning of democratic institutions. 

On  the  political  criteria,  North  Macedonia  continued  its  efforts  to  strengthen  democracy, 
while  it  faced  significant  challenges  in  the  area  of  the  rule  of  law.  Overall,  the  legal 
framework  remains  conducive  to  the  holding  of  democratic  elections  in  North  Macedonia. 
However, no progress was made to address and implement the outstanding recommendations 
by  the  OSCE's  Office  for  Democratic  Institutions  and  Human  Rights  and  the  Venice 
Commission.  As  mentioned  repeatedly  in  previous  reports,  electoral  legislation  should  be 
comprehensively  reviewed  to  address  inconsistencies  in  a  timely,  inclusive  and  transparent 
manner. 

Parliament’s work was marred by political polarisation, which deepened further, delaying the 
adoption  of  many  reform  laws  and  important  appointments.  The  EU  accession  negotiation 
process requires broad consensus of major political parties. All parties need to start engaging 
in  a  constructive  and  inclusive  political  debate,  to  strengthen  the  role  of  Parliament. 

1  This  report  covers  the  period  from  June  2022  to  June  2023.  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.  It  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  scale  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, interim steps have also been used. 

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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  and  who  are  part  of  other  peoples,  such  as  Bulgarians. 
Excessive and sometimes inappropriate use was made of fast-track procedures and of the ‘EU 
flag’  procedure,  in  some  cases  due  to  the  lack  of  consultations  and  poor  planning  of  the 
legislative  calendar.  The  ‘EU  flag’  should  be  used  when  directly  linked  to  the  adoption  of 
laws whose main goal is aligning with the EU acquis, and not to short-cut public debate on 
important  issues.  Parliamentary  oversight  of  the  executive  was  regularly  exercised  through 
parliamentary questions to ministers. Parties should spare no efforts in meeting long-overdue 
commitments for internal reform dating from the third round of the ‘Jean Monnet Dialogue’ 
in  early  2020.  Work  continued  on  establishing  criminal  responsibility  for  those  who 
orchestrated  or  committed  violence  in  the  attack  on  Parliament  on  27 April 2017.  Prompt 
implementation of recommendations by the Group of States against Corruption is required to 
increase the transparency of funding for political parties. Parliament should ensure the timely 
review of the statutory reports sent to it by state agencies and bodies. 

Overall,  civil  society  organisations  (CSOs)  in  North  Macedonia  continue  to  operate  in  an 
enabling  environment.  However,  the  government  should  increase  its  efforts  to  mainstream 
civil  society  engagement  in  priority  areas  and  consultation  activities.  CSOs  should  play  an 
important  role in the reform process and be involved in decision-making processes. Existing 
legal and financial frameworks still need to be amended and implemented in practice, notably 
to provide consistent mechanisms for awarding public funding to CSOs. There is a need for 
the  Council  for  Cooperation  between  the  Government  and  Civil  Society  to  resume  its 
activities. 

The country needs  to  strengthen  its capacity for  parliamentary oversight  of the intelligence 
services. 

North  Macedonia  remains  moderately  prepared  in  terms  of  public  administration  reform. 
Limited  progress  was  made  in  the  reporting  period  with  the  adoption  of  the  new  public 
administration  reform  strategy  and  the  accompanying  action  plan  in  July  2023.  Despite 
having  started  the  process  five years  ago,  the  country  still  has  not  adopted  the  revised 
legislative framework for human resources management, which includes the revised Law on 
administrative servants, the Law on public sector employees and new legal provisions on top-
level management. The new framework should improve human resource management across 
the administration and help ensure merit-based recruitments, promotions, and dismissals at all 
levels,  including  senior  management.  Legislation  has  not  yet  taken  on  board  the  State 
Commission  for  the  Prevention  of  Corruption’s  recommendations  on  nepotism,  cronyism, 
and political influence in the recruitment of public sector employees and in the appointment 
of  members  of  supervisory  and  management  boards.  Improvements  in  accountability  in  the 
public  administration  are  undermined  by  the  failure  to  adopt  the  new  Law  on  state 
organisation.  There  are  ongoing  efforts  to  improve  delivery  of  services  to  citizens  and 
businesses. 

The  judicial  system  of  North  Macedonia  is  in  between  some  and  moderate  level  of 
preparation. There was no progress on the judiciary during the reporting period. The Judicial 
Council should strive to protect the integrity and independence of judges and institutions and 
should  resist  any  external  influence.  The  controversial  dismissal  of  the  President  of  the 
Judicial  Council  raised  concerns  about  undue  political  influence.  The  adoption  of  a  new 
judicial  reform  strategy  aimed  at  improving  the  performance  of  institutions  is  behind 
schedule. Progress on implementation of the human resource strategies for the judiciary and 
prosecution  services  was  limited.  The  lack  of  measures  to  address  the  impact  of  scheduled 

4 

 
 
retirements affected efficiency. Most promotions for higher courts faced further delays. Work 
continued  on  upgrading  the  automated  court  case  management  information  system  for 
random  distribution  of  cases  in  courts.  A  similar  system  was  introduced  in  the  Public 
Prosecutor’s Office. 

The  country  is  in  between  some  and  moderate  level  of  preparation  in  the  prevention  and 
fight  against  corruption.  No  progress  was  made.  Corruption  remains  prevalent  in  many 
areas and is an issue of concern. Delays and reversals in trials of high-level corruption cases 
increased, resulting in some cases in the expiration of the statute of limitations. The Criminal 
Code  was  amended  through  an  expedited  parliamentary  procedure.  The  maximum  legal 
penalties for specific corruption-related criminal offences were reduced, having implications 
on  the  application  of  the  statute  of  limitations  and  affecting,  halting  or  even  terminating  a 
large  number  of  high-level  corruption  cases,  including  from  the  former  Special  Public 
Prosecutor’s  Office  (SPO).  The  amendments  also  hamper  the  authorities’  ability  to 
investigate and prosecute such offences. This is a matter of serious concern. 

The  State  Commission  for  the  Prevention  of  Corruption  was  proactive  in  providing  public 
institutions  with  policy  guidance  on  preventing  corruption.  It  opened  several  cases,  but  its 
recommendations  need  to  be  followed  up.  Efforts  to  improve  the  functioning  of  the  SCPC 
should continue, especially by allocating additional funding for the recruitment of specialist 
staff. Additional human and financial resources 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.  

North Macedonia has some level of preparation in the fight against organised crime. Some 
progress was made during the reporting period. The country continues to have a good level of 
operational  cooperation  with  EU  Members  States,  non-EU  neighbouring  countries,  Europol 
and Eurojust. A new Law on money laundering and financing of terrorism entered into force 
in July 2022. Implementing legislation now needs to be drafted and adopted promptly. 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. North Macedonia needs to adopt and 
implement the necessary legislation to regulate the activity of the Asset Recovery Office. The 
capacity of the National Coordination Centre for the Fight against Organised Crime needs to 
be improved. Coordination remains crucial for all stakeholders involved in fighting organised 
crime, including between prosecutors and police.  

Some progress was made in the fight against terrorism and violent extremism in line with 
the objectives set out in the joint action plan on counterterrorism for the Western Balkans and 
the new bilateral implementing arrangement. The national strategies for countering terrorism 
(2023-2027) and countering violent extremism (2023-2027) were adopted in May 2023, with 
the related action plans. 

North Macedonia is on one of the main transit routes for migration movements. The country 
continues  to  play  an  active  role  in  the  management  of  mixed  migration  flows.  Efforts 
continued to ensure basic living conditions and services for all migrants in the country. There 
is,  however,  a  need  to  enhance  institutional  and  administrative  capacities  for  all  aspects  of 
migration  management.  More  staff  and  additional  material  and  technical  resources  are 
required  to  increase  capacity  to  a  satisfactory  level.  Systematic  registration  of  migrants  is 
needed, 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. A contingency plan to manage large migratory flows needs to be 
finalised  and  adopted.  The  Status  Agreement  for  operational  cooperation  in  border 
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management with the European Border and Coast Guard Agency (Frontex) entered into force 
on  1 April  2023,  allowing  the  launch  of  a  joint  operation  with  the  deployment  of  officers 
from  EU  Member  States  to  provide  support  with  border  control  and  the  management  of 
irregular migration and cross-border crime. 

The legal framework on the protection of fundamental rights is partially aligned with the 
EU  acquis  and  standards  on  fundamental  rights.  The  country  continues  to  meet  its  general 
obligations  on  fundamental  rights,  but  the  legislation  should  be  implemented  in  a  more 
systematic  manner.  Some  significant  amendments  to  the  Criminal  Code  were  adopted  in 
February  2023,  regulating  criminal  acts  of  gender-based  violence.  Parliament  should  make 
appointments  to  independent  and  regulatory  bodies  based  on  merit.  The  functional 
independence of human rights bodies must be guaranteed at all times. This means, amongst 
other  things,  allocating  sufficient  funds.  Services  for  victims  of  gender-based  violence  still 
need  reinforcement  and  proper  funding  to  meet  the  standards  laid  down  by  the  Istanbul 
Convention.  Persons  with  disabilities  continue  to  face  direct  and  indirect  discrimination, 
social  exclusion  and  barriers.  The  Ombudsman’s  Office  and  the  Commission  for  the 
Prevention and Protection against Discrimination signed a memorandum of understanding to 
formalise their coordination. The situation in prisons is still dire. The recommendations made 
by the European Committee for the Prevention of Torture on the treatment  of detained and 
convicted  persons  were  not  addressed,  which  is  a  matter  of  serious  concern.  Detention 
conditions should be improved with the utmost urgency. Special attention should be given to 
promoting  non-discrimination,  increasing  effectiveness  in  addressing  hate  crime  and  hate 
speech  and  strengthening  the  capacity  and  independence  of  institutions  in  charge  of 
protecting  the  rights  of  persons  belonging  to  minorities  or  communities.  The  Agency  for 
Community  Rights  Realisation  needs  to  receive  sufficient  funding  to  further  promote  the 
protection  of  minorities  and  the  implementation  of  the  national  ‘One  Society  for  All  and 
Interculturalism’  strategy. The capacity  of law  enforcement  and  criminal  justice officials  to 
effectively prevent and prosecute all instances of violence, hate crimes and hate speech needs 
to be enhanced. The external oversight mechanism for the police, including the prison police, 
is  still  not  fully  functional,  with  the  three  CSOs  representatives  still  to  be  selected  by  the 
Parliament.  The enacted amendments to the Law on civil registry pave the way to resolving 
cases of statelessness and fulfilling the country’s international obligations. 

North  Macedonia  is  in  between  some  and  moderate  level  of  preparation  in  the  area  of 
freedom of expression. Overall, it made limited progress. The general context is favourable 
to media freedom and allows for critical media reporting. The amended Criminal Code and 
Law on civil liability for defamation raised the overall level legal protection for journalists. 
However, a number of  attacks, threats  and some  intimidating  behaviour towards journalists 
were noted. Greater transparency is needed regarding media advertising by state institutions 
and  political  parties.  Reform  of  the  public  service  broadcaster  is  required  to  strengthen  its 
independence,  professional  standards  and  financial  sustainability.  Since  December  2018, 
Parliament  has  been  delaying  the  appointment  of  the  public  service  broadcaster’s 
programming  council  and  media  regulator’s  council.  Working  conditions  for  journalists 
remain challenging. 

On the economic criteria, North Macedonia has made some progress and is at a good level 
of preparation in developing a functioning market economy. In 2022, the economy was badly 
hit  by  the  fallout  from  Russia’s  war  of  aggression  against  Ukraine,  which  significantly 
slowed  down  its  post-COVID-19  recovery.  The  government  supported  households  and 
businesses  through  large-scale  energy  subsidies,  tax  reductions  and  targeted  direct  income 
support.  Owing  to  an  inflation-driven  boost  to  tax  income  and  under-execution  of  several 

6 

 
 
expenditure  categories,  the  general  government  deficit  remained  below  the  revised  target. 
Capital expenditure was raised significantly, but still fell short of the revised plan. The public 
debt  ratio  dropped  but  remains  significantly  above  pre-COVID-19  levels.  The  central  bank 
tightened its policy stance further in view of still elevated inflationary pressures, which began 
to  subside  gradually  towards  the  end  of  2022  and  beyond.  The  current  account  deficit  rose 
substantially as energy import prices surged, but external financing needs were met with the 
help  of  market-based  and  IMF  borrowing.  The  Organic  Budget  Law  (OBL)  adopted  in 
September  2022  provides  for  the  introduction  of  fiscal  rules  and  a  fiscal  council, 
strengthening fiscal sustainability. However, progress has been slow in implementing wider-
ranging  measures  to  improve  the  management  of  public  investment,  vital  for  underpinning 
the government’s plans for a sizeable increase in capital expenditure. The banking sector was 
resilient throughout the crises. The labour market showed some improvement, but structural 
problems persist, including high youth and long-term unemployment and a large gender gap. 
The  business  environment  continued  to  be  impeded  by  the  large  size  of  the  informal 
economy,  slow  progress  in  streamlining  parafiscal  charges  and  an  untransparent  and 
inefficient State aid regime. 

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 2022. The share of high-value products in exports 
increased further and trade openness surged to a record high. There was further progress  in 
improving vocational educational training, but major skills shortages persist relative to labour 
market  needs,  entailing  long  school-to-work  transitions.  These,  coupled  with  large  gaps  in 
transport  and  energy  infrastructure,  low  investment  and  low  innovation  funding,  are 
restricting  potential  growth.  Digitalisation  of 
the 
competitiveness of domestic businesses could be improved through a wider offering of public 
e-Services. 

is  advancing,  but 

the  economy 

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, 
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.  North  Macedonia made  good progress  on free movement of capital 
and  some  progress  on  financial  services  and  consumer  and  health  protection.  Limited 
progress  was  made  on  the  free  movement  of  goods,  rights  of  establishment  to  provide 
services. No progress was made on company law, intellectual property law and competition 
policy  and  freedom  of  movement  for  workers.  Overall,  more  progress  is  needed  in  the 
coming year in the areas covered by this cluster, to 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  digital  transformation  and  media, 
taxation,  social policy and employment, and enterprise and industrial policy. The country is 
in between a moderate and a good level of preparation in the area of economic and monetary 
policy.  It  has  a  good  level  of  preparation  in  the  areas  of  science  and  research  and  customs 
union. Some progress was made on taxation, economic and monetary policy, enterprise and 
industrial policy, science and research policy, social policy and employment. More efforts are 
needed,  however,  particularly  in  areas  where  limited  progress  was  made,  such  as  digital 
transformation and media, customs union, and education and culture. 

7 

 
 
On  cluster  4  on  the  green  agenda  and  sustainable  connectivity,  North  Macedonia  has  a 
good  level  of  preparation  on  trans-European  networks  and  some  level  of  preparation  on 
environment and climate change. The country is moderately prepared on transport and energy 
policy with some progress made on energy, particularly on regional gas interconnectors and 
on renewables. Substantial efforts are needed in areas where limited progress was achieved, 
such  as  transport,  trans-European  networks  and  the  protection  of  the  environment.  In  the 
upcoming  period,  the  country  needs  to  accelerate  implementation  of  the  Economic  and 
Investment Plan and of the Green Agenda for the Western Balkans2. 

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

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 on the common foreign 
and security policy. The country made some progress during the reporting period on common 
commercial  policy.  It  has  made  good  progress  by  maintaining  full  alignment  with  EU 
common foreign and security policy. By doing so, North Macedonia has shown itself to be a 
reliable partner, including at international level.  

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

1.3.   STATE OF PLAY OF THE ACCESSION NEGOTIATIONS 

Following  the  political  inter-governmental  conference on  accession  negotiations  with  North 
Macedonia  that  took  place  on  19  July  2022,  the  Commission  immediately  launched  the 
screening process, which is progressing smoothly. All sessions on Cluster 1 (Fundamentals) 
and  Cluster  2  (Internal  Market),  Cluster  3  (Competitiveness  and  Inclusive  Growth)  and 
Cluster  4  (Green  Agenda  and  Sustainable  Connectivity)  have  taken  place.  Explanatory 
sessions  on  Cluster  5  (Resources,  Agriculture  and  Cohesion)  and  Cluster  6  (External 
Relations) have  been completed and bilateral  sessions on these  are ongoing. The remaining 
screening meetings are scheduled until December 2023. 

2. 

CLUSTER 1: THE FUNDAMENTALS OF THE ACCESSION PROCESS 

FUNCTIONING OF DEMOCRATIC INSTITUTIONS AND PUBLIC ADMINISTRATION 

2.1. 
REFORM 

2.1.1.  Democracy 

The political situation remained polarised, which had an impact on the proper functioning of 
democratic institutions. 

2 COM(2020) 641 final 

8 

 
 
 
Elections 

Overall, the legal framework remains conducive to the organisation of democratic elections 
in  North  Macedonia.  However,  no  progress  was  made  over  the  reporting  period  to  address 
and  implement  the  outstanding  recommendations  by  the  OSCE’s  Office  for  Democratic 
Institutions  and  Human  Rights  (ODIHR)  and  the  Venice  Commission.  As  mentioned 
repeatedly  in  previous  reports,  electoral  legislation  should  be  comprehensively  reviewed  to 
address inconsistencies in a timely, inclusive and transparent manner. 

In  August  2022,  local  elections  took  place  for  the  Tetovo  municipal  council  and  mayoral 
elections  in  Centar  Zhupa  and  in  Mavrovo-Rostushe.  These  were  conducted  in  an  orderly 
manner. 

Concerning  the  legal  framework,  there  was  no  progress  in  addressing  or  implementing  any 
outstanding OSCE/ODIHR recommendations. 

In April 2023, the Ministry of Justice set up a working group on electoral reform tasked with 
implementing  outstanding  OSCE/ODIHR  recommendations  and  ideally  drafting  a  new 
Electoral  Code.  The  main  opposition  party  decided  not  to  take  part  in  the  working  group 
officially. The working group has yet to produce any significant outcome. A comprehensive 
review of legislation on the electoral process is needed to address existing inconsistencies and 
further  align  the  system  with  European  and  international  standards.  A  broad  consultative 
process  should  underpin  this  reform.  The  accuracy  of  the  electoral  register  should  be 
improved through systematic checks, reviews and data updates. 

Ahead  of  the  next  elections,  the  State  Election  Commission  needs  to  be  allocated  the 
necessary  resources  in  good  time,  so  that  it  can  carry  out  its  mandate  efficiently  and 
independently. 

Parliament 

Political polarisation in Parliament deepened further, delaying the adoption of many reform 
laws  and  important  appointments.  The  EU  accession  negotiation  process  requires  broad 
consensus of major political parties. All parties need to start engaging in a constructive and 
inclusive  political  debate,  to  strengthen  the  role  of  Parliament.  Excessive  and  sometimes 
inappropriate use was made of fast-track procedures and of the ‘EU flag’ procedure, in some 
cases due to the lack of consultations and poor planning of the legislative calendar. The ‘EU 
flag’ should be used when directly linked to the adoption of laws whose main goal is aligning 
with  the  EU  acquis,  and  not  to  short-cut  public  debate  on  important  issues.  Parliamentary 
oversight  of  the  executive  was  regularly  exercised  through  parliamentary  questions  to 
ministers. Parties should spare no efforts to implement long-overdue commitments to internal 
reform  dating  from  the  third  round  of  the  ‘Jean  Monnet  Dialogue’  in  early  2020.  Work 
continued  on  establishing  criminal  responsibility  for  those  who  orchestrated  or  took  part  in 
implementation  of 
the  violent  attack  on  Parliament  on  27 April  2017.  Prompt 
recommendations  by  the  Group  of  States  against  Corruption  is  required  to  increase  the 
transparency of funding  for  political  parties. Parliament should ensure the timely review of 
the statutory reports sent to it by state agencies and bodies. 

After  some  Members  of  Parliament  (MPs)  were  replaced,  the  number  of  women  MPs 
increased  from  50  to  51  out  of  120,  reaching  the  highest  percentage  ever  (42.5%).  The 
number of MPs from non-majority communities decreased (from 42 to 41 out of 120 (34%). 
The  Alliance  for  Albanians  joined  the  ruling  coalition  in  March  2023,  while  Alternativa 
moved to the opposition. See Governance. 

9 

 
 
Political dialogue in Parliament suffered from the lack of cross-party consensus, though the 
opposition  did  support  some  economic,  energy  and  social  measures.  Parliamentary  parties 
need to collaborate on the EU accession negotiation process and accelerate implementation of 
EU-related  reforms.  The  National  Council  for  EU  Integration  does  not  meet  frequently.  It 
held  only  three  sessions including  a  joint  one  with  the  Committee  on  EU  Affairs.  Decisive 
steps  are  needed  to  ensure  that  the  Council  fulfils  its  function  as  the  principal  vehicle  for 
advancing EU integration in Parliament. 

Persisting  polarisation  between  the  ruling  parties  and  the  opposition  prevented  Parliament 
from  functioning  properly.  The  main  opposition  party  VMRO-DPMNE3  actively  blocked 
parliamentary work, which was a significant obstacle to progress in Parliament’s legislative 
agenda.  Nevertheless,  it  did  participate  in  some  debates  on  important  issues  even  though  it 
abstained  from  the  vote,  for  example  on  ratification  of  the  Frontex  Status  Agreement. 
Following  government  coalition  reshuffle,  the  composition  of  parliamentary  bodies  was 
changed  to  proportionally  reflect  the  new  coalition  and  to  ensure  it  had  a  majority  in  key 
bodies. No consensus was reached on long-overdue important appointments. These concern 
two  new  judges  for  the  Constitutional  Court,  five  deputy  ombudspersons,  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 
Prevention  against  Discrimination.  It  is  imperative  that  appointments  to  these  positions  are 
based on merit and not on political grounds. 

The  law-making  process  would  benefit  from  more  efficient  planning  and  coordination 
between the ruling coalition and the opposition. From January 2022 to 15 June 2023, out of 
165 laws adopted, 51 were adopted by regular procedure, 86 under shortened procedure and 
28    concerned  ratification.  The  opposition  criticised  the  government  for  misusing  the  fast-
track  ‘EU  flag’  procedure  for  aligning  legislation  with  the  EU  acquis.  The  ‘EU  flag’ 
procedure was used, among other things, to amend the Criminal Code by introducing lower 
penalties  for  crimes  of  corruption,  and  to  amend  laws  on  labour  relations,  expropriation, 
urban planning, construction and highways to  be built (notably  road corridor VIII and Xd), 
despite  the  fact  that  the  amendments  did  not  generally  concern  the  alignment  of  existing 
legislation  with  the  EU  acquis.  The  use  of  ‘EU  flag’  procedure  must  be  consistent,  and 
clearly  linked  to  laws  aiming  primarily  at  aligning  national  law  with  the  EU  acquis. 
Comprehensive  consultations  should  consistently  take  place,  including  with  the  European 
Commission.  The  number  of  laws  adopted  by  shortened  procedure  increased  from  38  %  to 
58% at the expense of meaningful debate and inclusive legislative process. The use of fast-
track procedures should be limited. They should not be used to short-cut public consultation 
or  resolve  procedural  difficulties  in  the  legislature,  or  to  compensate  for  poor  planning  at 
government level. See 2.1.2. Public administration reform. 

Parliamentary  oversight  of  the  executive  continued  with  regular  sessions  for  parliamentary 
questions. The executive provided answers to 167 parliamentary written questions received in 
2022  and  the  first  quarter  of  2023.  Two  interpellations  were  not  considered  during  the 
reporting period – on the work of the Chairpersons of the Committee on Political System and 
Relations  among  Communities,  and  the  Committee  on  Elections  and  Appointments. 
Discussions in plenary and relevant committees on the 2021 annual reports from regulatory, 
monitoring and supervisory bodies were completed only early 2023. 

Implementation  of  the  commitments  made  during  the  third  round  of  the  ‘Jean  Monnet 
Dialogue’ in early 2020  remains  outstanding. These  include amending rules of procedure, 

3 Internal Macedonian Revolutionary Organisation – Democratic Party for Macedonian National Unity. 

10 

 
 
 
for example on the constitutive session, greater governmental oversight, public hearings, the 
parliamentary  calendar  and  procedures  for  ‘EU-flagged’  laws.  The  working  group  on  the 
‘Jean  Monnet  Dialogue’  convened  in  November  and  December  2022  and  in  June  and 
September 2023, and agreed on several aspects of the review of legislative procedures. The 
rules  of  procedure  should  be  adopted  without  further  delay  to  improve  the  functioning  of 
Parliament. 

As  regards  the  protection  of  human  rights  and  fundamental  freedoms,  the  permanent 
oversight committee remained inactive. The Women Members of Parliament Club organised 
the  first  ever  plenary  session  on  gender  issues  to  mark  its  20th  anniversary.  The  inter-party 
parliamentary  groups  on  youth;  on  lesbian,  gay,  bisexual,  transgender,  intersex  and  queer 
(LGBTIQ) persons; on persons with disabilities; on Roma4; and on environment successfully 
completed numerous activities, in close cooperation with relevant civil society organisations. 
Parliament and government committed to launch and achieve as a matter of priority relevant 
constitutional changes, with a view to including in the Constitution citizens who live within 
the borders of the state. 

A  working  group  tasked  with  preparing  constitutional  amendments  was  established  in 
April 2023. It was composed of 23 representatives from different political parties, including 
four  MPs  and  experts.  Opposition  parties,  including  VMRO-DPMNE  and  Levica,  did  not 
nominate  representatives.  The  working  group  unanimously  approved  and  submitted  a  draft 
initiative  proposing  amendments  to  the  government  in  May 2023.  On  18 July,  the 
government  adopted  the  initiative  for  constitutional  changes,  which  was  submitted  to 
Parliament.  The  draft  makes  provision  for  the  inclusion  of  six  further  communities  in  the 
preamble and in two articles of the Constitution, namely Bulgarian people, Croatian people, 
Montenegrin people, Slovenian people, Jewish people, and Egyptian people. On 18 August, a 
plenary session on the adoption of the initiative to amend the Constitution was held but was 
put on hold as the required two-third majority votes could not be ensured.   

In May, the Supreme Court rejected a request for a retrial of those convicted for the storming 
of Parliament on 27 April 2017. It dismissed, as unfounded, the request for an extraordinary 
re-examination of the verdicts of both the Criminal Court and the Court of Appeals.  

Action is needed to ensure the transparency of funding for political parties. Action should 
include  addressing  the  recommendations  made  by  the  Group  of  States  against  Corruption 
(GRECO).  (See  Chapter  23  –  Judiciary  and  fundamental  rights.)  Political  parties  should 
improve their internal democratic processes, including the transparency of elections to party 
bodies. 

Governance 

Since the first political intergovernmental conference opening EU accession negotiations with 
North Macedonia in July 2022, the institutions have mobilised significant resources to engage 
actively  in  the  screening  process,  which  is  proceeding  smoothly.  The  government  also 
increased its  efforts  to  communicate the practical  benefits  of EU  accession  for the citizens. 
The government needs to intensify its work to advance the EU reform agenda. Permanent and 
decisive steps are required to accelerate implementation of EU reforms and move forward in 
the EU accession negotiation process. Cross-party collaboration remains vital in this regard. 
The authorities should refrain from adopting ad hoc measures which are not in line with the 

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

11 

 
 
 
EU  acquis  and  European  standards.  Inter-ethnic  relations  remained  stable,  and  the  Ohrid 
Framework Agreement continued to be implemented. 

In March 2023, 65 MPs out of 120 supported the formation of the new government coalition. 
The ruling coalition is now composed of SDSM5, DUI6 and the Alliance for Albanians and is 
supported by several smaller political parties. In the government, 25% of ministers, 31% of 
deputy ministers, and 29% of state secretaries are women. Women held 15% of the executive 
positions in different government bodies and agencies. 

After the reshuffle, the key priorities of the government programme for 2022-2024 remained 
unchanged. These include sustainable economic growth,  social inclusion and human capital 
development, rule of law and good governance, promotion of democracy and freedom as well 
as NATO and EU integration. 

As  part  of  the  EU  accession  negotiation  process,  relevant  national  representatives, 
coordinated  by  the  Chief  Negotiator,  actively  participated  in  the  screening  meetings 
organised  by  the  Commission  starting  in  July  2022.  Building  on  the  experience  of  the 
screening  process,  North  Macedonia  needs  to  continue  strengthening  its  EU  negotiating 
structures  and  achieve  sound  coordination  among  line  ministries  and  institutions,  while 
further developing EU-acquis-related expertise across the public administration. 

The  inter-ethnic  situation  remained  calm  overall,  with  isolated  cases  of  tension  amid 
protests in the summer of 2022 against the proposals designed to remove the obstacles to the 
opening  of  EU  accession  negotiations.  The  Committee  on  Inter-Community  Relations 
continued to  foster the  multi-ethnic and multi-cultural  dimension of the society, notably by 
organising  intercultural  activities  among  students.  The  2001  Ohrid  Framework  Agreement, 
which fosters the multi-ethnic character of the society, continued to be implemented. 

There  was  limited  progress  as  regards  reform  of  local  self-government,  mostly  related  to 
fiscal  decentralisation. However, the  fiscal  benefits  deriving from  last  year’s amendment  to 
the Law on financing of local self-government units have not yet been felt by municipalities. 
The government should urgently improve the normative and financial framework in line with 
local  development  and  decentralisation. 
the  2021-2026  programme  for  sustainable 
Municipalities  have  continued  to  experience  severe  financial  difficulties  as  a  result  of 
inflation and increased energy costs. The government and the municipalities should consider 
setting  up  a  permanent  cooperation  mechanism  with  the  aim  of  reviving  interinstitutional 
dialogue between different levels of government, particularly in relation to the EU accession 
negotiations process. 

Civil society 

Overall,  civil  society  organisations  (CSOs)  in  North  Macedonia  continue  to  operate  in  an 
enabling  environment.  However,  the  government  should  increase  its  efforts  to  mainstream 
civil  society  engagement  in  priority  areas  and  consultation  activities.  CSOs  should  play  an 
important role in the reform process and be involved in decision-making processes. Existing 
legal and financial frameworks still need to be amended and implemented in practice, notably 
to provide consistent mechanisms for awarding public funding to CSOs. There is a need for 
the  Council  for  Cooperation  between  the  Government  and  Civil  Society  to  resume  its 
activities. 

5 Social Democratic Union of Macedonia 
6 Democratic Union for Integration 

12 

 
 
 
Civil society is a key component of any democratic system and is recognised as such by the 
state institutions. CSOs continue to operate in an enabling environment. They play a vital role 
in promoting and advancing human rights, the rule of law and stability, by being steadfast in 
their roles as watchdogs and seeking to take part in decision-making processes. CSOs need to 
be  consulted  on  draft  legislation  more  systematically  and  meaningfully.  The  role  of  civil 
society in the EU accession negotiation process needs to be strengthened. 

The  Council  for  Cooperation  between  the  Government  and  Civil  Society  is  still  the  main 
structural channel for consulting and involving civil society in policy dialogue and decision-
making. Budget allocations for the annual programme for cooperation with civil society were 
not reinstated in the supplement to the 2022 budget. This contradicts the policy aims of the 
strategy of cooperation with civil society 2022-2024. CSOs have boycotted the work of the 
Council  since  March  2022  as  a  result  of  the  government  decision  to  transfer  funds  for 
financing  of  CSOs  from  the  General  Secretariat  to  the  Ministry  of  Political  System  and 
Relations among the Communities. There is a need to rebuild trust and cooperation. The role 
of the Council and of the relevant unit within the General Secretariat of the government needs 
to be enhanced. 

Implementation of the strategy for cooperation with and development of civil society 2022-
2024  is  ongoing,  although  an  effective  monitoring  framework  is  needed  to  check  on  its 
implementation.  Local  authorities  need  to  be  more  proactive  and  to  develop  a  consistent 
approach to involving CSOs in policymaking at local level. 

Civilian oversight of the security/intelligence sector 

The  parliamentary  committees  that  oversee  the  intelligence  services  held  several  meetings, 
but further efforts are needed to improve their efficiency. 

The  Special  Department  for  investigation  and  prosecution  of  crimes  committed  by  persons 
with  police  powers  and  members  of  the  prison  police  is  operational.  However,  the  lack  of 
sufficient staff hampers its efficiency. 

The  civil  control  mechanism  is  composed  only  of  the  representative  of  the  Ombudsman’s 
Office.  Parliament  has  not  selected  the  civil  associations,  which  should  be  part  of  the 
mechanism. 

The  Council  for  Civilian  Supervision,  which  is  regulated  by  the  Law  on  interception  of 
communication,  has  not  been  set  up  in  practice.  In  July  2023,  Parliament  adopted 
Amendments to the Law necessary for operationalising the Council for Civilian Supervision.  

2.1.2.  Public administration reform  

North  Macedonia  is  moderately  prepared  in  the  reform  of  its  public  administration. 
Limited  progress  was  made  in  the  reporting  period  with  the  adoption  of  the  new  public 
administration  reform  strategy  and  the  accompanying  action  plan  in  July  2023.  Despite 
having  started  the  process  5  years  ago,  the  country  still  has  not  adopted  the  revised 
legislative framework for human resources management, which includes the revised law on 
administrative servants and the law on public sector employees and new legal provisions on 
top  level  of  management.  The  new  framework  should  improve  human  resources 
management across the administration and help ensure merit-based recruitments, promotions 
and dismissals at all levels, including senior management.  Legislation has not yet taken on 
board  the  State  Commission  for  the  Prevention  of  Corruption’s  recommendations  on 
nepotism, cronyism and political influence in the recruitment of public sector employees and 
in  the  appointment  of  members  of  supervisory  and  management  boards.  Improvements  in 

13 

 
 
 
accountability  in  the  public  administration  are  undermined  by  the  failure  to  adopt  the  new 
law  on  state  organisation.  There  are  ongoing  efforts  to  improve  delivery  of  services  to 
citizens and businesses.  

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

→  adopt and start implementing the revised law on administrative servants, the revised law 

on public service employees and the legal provisions on top management service; 

→  adopt and start implementing the law on state organisation and other related laws in line 

with the recommendations on the new organisation of state administrative bodies; 

→  ensure  full  implementation  of  the  law  on  general  administrative  procedures  by 
completing the digitalisation of institutions' registers and data exchange, and simplifying 
electronic procedures.  

Strategic framework for public administration reform 

The new 2023-2030 public administration strategy and its accompanying action plan were 
adopted  in  July  2023.  Several  actions  have  been  carried  over  from  the  previous  strategy 
without any mitigation measures proposed despite past challenges with their implementation. 
Measures planned for the first year of the 2022-2025 public financial management reform 
programme fell behind schedule due to delays in the adoption of key legislation. The high-
level  Public Administration Reform  Council met  once during the reporting period. There is 
insufficient  political  support,  leadership  and  supervision  of  reforms.  The  Ministry  of 
Information  Society  and  Administration  does  not  have  sufficient  human  resources  to  drive 
forward the reforms at technical level. National funding for the public administration reform 
strategy  and  the  public  financial  management  reform  needs  to  be  increased  as  key  reform 
activities are still largely dependent on donor support.  

Policy development and coordination  

A  legal  framework  and  institutional  structures  for  a  coherent  policymaking  system  are  in 
place.  However,  further  efforts  are  needed  to  clarify  the  responsibilities  of  policymaking 
institutions,  ensure  their  proper  functioning  and  streamline  reporting  lines.  Medium-term 
budgetary  planning  and  fiscal  policies  remain  consistent  with  the  government’s  strategic 
priorities. The central coordination and quality control role of the General Secretariat slightly 
improved, but remains insufficient. No regular update or reports on the implementation of the 
2021-2025 national programme for the adoption of the acquis have been forthcoming.  

Evidence-based policymaking and legislative development have been partially successful. 
However, certain pieces of adopted legislation, such as the Law on construction of corridors 
VIII and X-d, to be implemented by Bechtel Enka, conflict with parts of the legal framework 
and with international commitments. Many institutions have not yet digitalised their registers. 
The  sharing  of  administrative  data  needs  to  be  expanded  and  data  need  to  be  simplified  in 
order  to  better  inform  policymaking  and  new  legislation.  Regulatory  impact  assessments 
continued to be carried out only as a formality, rather than as an assessment of the potential 
impact of new laws. Efforts to improve the use and quality of regulatory impact assessments 
continued,  in  particular  for  budgetary  impact  assessment.  However,  the  Ministry  of 
Information  Society  and  Administration  has  insufficient  resources  to  ensure  effective  and 
consistent quality control.  

The national electronic consultation system is an inclusive one, enabling all stakeholders to 
participate in public consultations. However, it is not used to its full potential, in particular 

14 

 
 
by citizens and businesses. Quality control, feedback and follow-up to the public consultation 
process need to be improved. The share of laws adopted under shortened procedures went up 
to 58% 2022. These laws did not undergo a proper public consultation process and were not 
regularly accompanied by impact assessments. The quality of legislative drafting also needs 
to  improve.  Frequent  legislative  amendments  create  legal  uncertainty  and  impede  proper 
implementation. Abuse of the use of the ‘EU flag’ procedure continued. The ‘EU flag’ should 
only be used when directly linked to the adoption of laws whose main goal is aligning with 
the EU acquis (see 2.1.1 Democracy). 

Public  scrutiny  of  government  work  is  supported  by  regular  government  press  releases. 
However,  the  publication  of  the  agendas  and  minutes  of  government  sessions  was 
occasionally  delayed.  Documents  adopted  at  government  sessions  are  not  published 
consistently. Moreover, the government has failed to publish annual reports on its work for 
the years 2020, 2021 and 2022.  

Public financial management 

In  June  2022,  the  government  adopted  a  new  public  financial  management  reform 
programme for 2022-2025. The programme is  made up of eight pillars. In April 2023, the 
government  published  the  first  annual  monitoring  report  for  2022  and  draft  action  plan  for 
2023. This report revealed poor implementation and results, suggesting that planning needs to 
be more realistic. 

In September 2022, the Organic Budget Law (OBL) was adopted by the Parliament. The law 
provides a legal foundation for several key public financial management reforms, including 
strengthening medium-term budget preparation, reviewing budget classifications and putting 
in  place  an  Integrated  Financial  Management  Information  System.  The  OBL  also  aims  to 
make  the  fiscal  strategy  more  comprehensive  and  to  develop  a  broader  system  to  monitor 
fiscal  risks,  including  for  state-owned  enterprises  and  municipalities.  The  public  financial 
management  reform  agenda  has  gained  momentum  after  the  adoption  of  the  OBL  but 
progress is still slow in several key reform areas.  

The  Ministry  of  Finance  continued  to  improve  the  transparency  of  public  finance 
management by publishing data on the revenue and expenditure of public institutions, local 
governments and state-owned companies every quarter. The human resources capacity of the 
Ministry of Finance remains limited.  

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  increase  further  through  the  efficient  implementation  of 
the OBL. 

Public service and human resources management 

No  progress  was  made  on  the  adoption  of  the  long-awaited  revised  legislation  on 
administrative  servants  and  on  public  sector  employees,  or  on  the  new  legislation  on  top 
levels of management, aimed at ensuring merit-based recruitment and fair promotions and 
dismissals.  The  regular  amendments  to  the  laws  on  administrative  servants  and  on  public 
sector  employees  since  their  adoption  in  2014  have  led  to  an  inconsistent  application  of 
recruitment and promotion procedures across the public sector. Contradictory rules in the law 
on  internal  affairs  and  other  sectoral  laws  allow  employees  in  these  sectors  to  be  excluded 
from the scope of the law on administrative servants. Moreover, the administration still uses 
procedures to convert temporary or service employment contracts into permanent ones.  

15 

 
 
The supreme audit institution found irregularities and the misuse of the IT system for testing 
candidates  for  positions  in  the  public  administration.  The  performance  appraisal  system, 
although  established  on  paper,  is  still  not  systematically  used.  In  addition,  insufficient 
transparency on the grounds for dismissal of civil servants continues, and data on dismissals 
of  non-managerial  staff  is  lacking.  Proper  follow-up  to  the  recommendations  of  the  State 
Commission for Prevention of Corruption on improving public sector recruitment procedures 
should be ensured. The national authorities need to develop a retention policy for the public 
administration  in  order  to  avoid  further  losses  of  valuable  expertise  and  a  decline  in 
administrative  capacity.  A  large  number  of  vacancies  in  senior  ranks  were  not  filled  via 
competitive procedures (18 vacancies) but by appointing acting managers (40 appointments).  

The Ministry of Information Society and Administration is responsible for coordinating and 
monitoring human resources management across the public administration. The number of 
institutions  using  the  human  resources  management  information  system  has  increased. 
Reports from  individual state audit institutions indicate that some public service employees 
still receive a salary despite not having a formal assignment and without having to show up 
for work. Initiatives have been launched to revise the remuneration system to ensure more 
consistent  levels  of  pay  and  to  promote  mobility.  Some  institutions  have  developed  legal 
solutions allowing a unilateral increase of salaries for some staff categories. The practice of 
paying  salary  supplements  continued  under  the  2022  and  2023  budget  execution  laws. 
Nevertheless,  the  turnover  rates  of  staff  working  on  the  management  of  EU  funds  puts  in 
question the effectiveness of these measures.  

On 31 December 2022, women represented 56.29% of all public service employees according 
to the register of public sector employees, not including staff of institutions such as the army 
and law enforcement agencies. Concerns remain over the percentages applied in the formula 
of ‘BalancER’ - a human resources tool that determines the proportion of public employees 
from each ethnic group. The revised formula includes the non-resident population and does 
not  take into account  the percentage of citizens that have not  declared their ethnicity in  the 
census.  The  transfer  of  employees  from  the  Ministry  of  Political  System  and  Relations 
between  Communities  to  various  institutions  has  not  yet  been  completed.  Furthermore,  the 
ministry conducted a new recruitment procedure aiming to deploy the new recruits to various 
institutions. 

On professional development, there is still no centralised database of all training provided 
by the various institutions and projects. Integrity guidelines were developed at both central 
and local level. Whistle-blower legislation is in place, but  the protection of whistle-blowers 
needs to be improved. According to the annual report of the State Commission for Prevention 
of  Corruption,  the  institutions  reported  24  instances  involving  whistle-blowers  in  2022  and 
sent 10 reports directly to the State Commission.  

Accountability of the administration 

The  reorganisation  of  central  government  institutions,  which  aims  to  streamline  the 
institutional  framework,  eliminate  overlapping  powers,  improve  the  administration’s 
efficiency  and  improve  lines  of  accountability,  was  delayed  due  to  the  new  law  on  state 
organisation not yet being adopted. This also held back the reorganisation of the three pilot 
ministerial  systems.  Delegating  decision-making  authority  to  middle  management  remains 
limited both at central and local level. Continued efforts are needed to efficiently mainstream 
managerial accountability across the entire public administration (see chapter 32 - Financial 
control).  

16 

 
 
Legislation  on  scrutiny  by  independent  oversight  bodies,  in  particular  the  State  Audit 
Office and the Ombudsperson, is in place. There needs to be a more systematic follow-up to 
their findings and recommendations, both by the government in addressing shortcomings and 
preventing  further  irregularities  (see  e.g.  chapter  20  -  Enterprise  and  Industrial  Policy, 
chapter  25  -  Science  and  Research  and  chapter  15  -  Energy),  and  by  law  enforcement 
agencies in prosecuting offences. Citizens’ right to access public information is embedded 
in legislation. The proactive disclosure of information and datasets on official websites needs 
to  be  further  encouraged,  in  particular  at  local  level.  The  Agency  for  Protection  of  Free 
Access  to  Public  Information  processes  lodged  appeals  promptly  and  proactively  monitors 
information holders despite limited funding.  

The legal framework for citizens’ rights to good administration is in place, both as regards  
administrative  justice  and  judicial  review.  In  practice,  however,  administrative  disputes 
continue to face unreasonable delays. Appeal procedures are complex and lengthy, consisting 
of several appeal layers. There are repetitions of procedures, as most decisions are based on 
procedural  considerations  and  not  on  merit.  Delays  continue  to  occur  in  enforcing 
Administrative  Court  rulings  by  the  respective  institutions.  The  legislation  lays  down 
citizens’  rights  to  seek  compensation  and  the  liability  of  public  authorities  in  cases  of 
wrongdoing. 

Service delivery to citizens and businesses 

legislation  and  IT 

On  user-oriented  service  delivery, 
infrastructure  allow  most 
administrative services to  be offered both  online and offline  – through the national  e-portal 
for services, including facilities for people with special needs. The update of the portal with 
135 new services should be completed. Currently, the number of digital services available to 
citizens  is  symbolic  and mainly  consists of services that  are rarely  requested with  the most 
common  services,  such  as  issuing  of  personal  documents,  not  yet  available  online.  Even 
offline,  these  basic  services  have  deteriorated  with  additional  administrative  requirements 
from  citizens.  The  quality  of  data  in  the  population  register  needs  to  improve  as  it  is  the 
country's principal register. The legislation on an interoperability framework is not updated in 
line with the latest EU standards, while the tool itself is not used to its full potential by the 
relevant institutions, which is an obstacle for progress on provision of digital services.  North 
Macedonia  should  ensure  alignment  with  both  the  European  Interoperability  Framework  
(latest revision in 2017) and the Interoperable Europe Act (2022). 

No  progress  was  made  on  simplifying  administrative  procedures.  The  law  on  general 
administrative procedures is still not 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  effective  fight  against 
corruption are of paramount importance, as is the respect for fundamental rights in law and 
in practice. 

North Macedonia has in between some and moderate level of preparation to apply the EU 
acquis and European standards in this area. Overall, there was no progress on strengthening 
judicial independence and improving the legal framework for fundamental rights protection.  

17 

 
 
 
Functioning of the judiciary 

The  judicial  system  of  North  Macedonia  is  in  between  some  and  moderate  level  of 
preparation. There was no progress in the field of the judiciary during the reporting period. 
The  Judicial  Council  should  strive  to  protect  the  integrity  and  independence  of  judges  and 
institutions  and  should  resist  any  external  influence.  The  controversial  dismissal  of  the 
President  of  the  Judicial  Council  raised  concerns  about  undue  political  influence.  The 
adoption of a new judicial reform strategy is  behind schedule. It should aim to improve the 
performance of institutions. Progress on implementation of the human resources strategies for 
the  judiciary  and  prosecution  services  was  limited.  The  lack  of  measures  to  address  the 
impact of scheduled retirements affected efficiency. Most promotions for higher courts faced 
further  delays.  Work  continued  on  upgrading  the  automated  court  case  management 
information system (ACCMIS) for random distribution of cases in courts. A similar system 
was introduced in the Public Prosecutor’s Office. 

The Commission’s recommendations from last year have not been implemented and remain 
valid. In the coming year, the country should in particular: 

→  complete the implementation of 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 prepare the new strategy on judicial reform (2023-2027) without delay; 

→  revise the legislative framework and overall functioning of the Judicial Council to 

enhance its transparency and independence and step up the implementation of the human 
resources strategies for the judiciary and the prosecution; 

→  ensure that ACCMIS is fully functional and compatible with level of complexity of court 

cases and the method for assessing judges and presidents of courts. 

Strategic documents 

According to the 2022 assessment report on implementation of the judicial reform strategy 
(2017-2022), out of 227 activities, 140 have been fully implemented, 18 are ongoing, 14 are 
delayed,  43  require  continuous  implementation,  6 concern  legislative  measures  that  are 
pending in Parliament, and 6 were abandoned due to a change in the approach. The process to 
adopt  the  new  judicial  reform  strategy  for  2023-2027,  which  started  in  September  2022,  is 
delayed.  Implementation  of  the  Law  on  the  Public  Prosecutor’s  Office  continued.  Limited 
progress  was  made  in  implementing  the  strategies  for  human  resources  management  in  the 
courts and in the Public Prosecutor’s Offices. 

Management bodies 

There  are  serious  concerns  about  undue  external  influence  over  the  work  of  the  Judicial 
Council and judiciary. In November 2022, the President of the Judicial Council resigned to 
protest  against  alleged  attempts  to  exert  undue  influence  from  within  the  judiciary  and  the 
business community. The new President, who took office in December 2022, was demoted in 
April  2023  through  a  controversial  procedure,  raising  questions  about  respect  for  laws  and 
procedures. Civil society organisations and legal scholars condemned this unprecedented step 
and called on all members of the Council to resign. The demoted President continued to serve 
as  a  member  of  the  Council.  In  May,  she  filed  a  lawsuit  with  the  Administrative  Court 
challenging the legality of her demotion, and a criminal report with the Skopje Basic Public 
Prosecutor’s Office against some of her Judicial Council peers for misuse of official duty and 
authorisation. Two members of the Judicial Council, judges elected by their peers, resigned in 
June  2023.  One  explained  that  she  was  resigning  over  the  unlawful  and  non-transparent 

18 

 
 
demotion of the former President, and disagreement with some of the Council's stances. The 
other announced that he would contribute better if serving as a judge. In July, judges elected 
two new members, one of whom, a judge of the Supreme Court, resigned shortly afterwards 
citing personal reasons. Attempts by the new President to limit the presence of camera crews 
to  Council  sessions  ceased  after  interventions  of  several  CSOs  and  the  Judicial  Media 
Council.  According  to  the  Corruption  Risk  Assessment  of  the  Judiciary,  published  in  June 
2023, 72% of the judges interviewed either fully disagree (27%) or partially disagree (45%) 
that the Judicial Council effectively safeguards judicial independence. Only 26% agree. 

In  March  2023,  the  Constitutional  Court  annulled  two  articles  of  the  Law  on  the  Judicial 
Council, thus allowing all Council members, and not only those elected by Parliament, to be 
elected as president or deputy. The new President and his Deputy, elected in May and June 
2023, are both judges. In October 2022, the Judicial Council adopted a code of ethics for its 
members.  In  December,  the  Council  amended  its  rules  of  procedure  to  better  regulate 
procedures for determining the responsibility of a judge or a president of court. Transparency 
in the Council decision-making process should increase. 

In February and April 2023, prosecutors elected two new members to the Council of Public 
Prosecutors (CPP). Parliament, with a delay, elected two members of the CPP. In November 
2022, over 160 public prosecutors throughout the country, directly elected the new Head of 
the Public Prosecutor’s Office for Prosecuting Organised Crime and Corruption (OCCPPO), 
applying for the first time the 2020 Law on the Public Prosecutor’s Office and amendments 
to the Law on the CPP. The election did not help to build public trust in the transparency of 
the process, given that no qualifying criteria were set at the outset and serious concerns about 
possible external influence in the process were raised. The CPP improved its transparency by 
making sessions available on social media platforms but stills needs to provide reasoning for 
its  decisions.  The  media  have  regular  access  to  the  Council  but  limited  physical  space  in 
Council  sessions  is  a  constraint.  The  budget  allocation  for  the  Council  increased  but  it 
remains understaffed and lacks IT resources to perform its tasks effectively. 

Independence and impartiality 

Judicial independence is enshrined in the Constitution. Both the Judicial Council and the CPP 
need  to  act  decisively  to  promote  and  safeguard  the  independence,  integrity  and 
professionalism of judges and prosecutors. Further efforts are needed to increase transparency 
and prevent any attempt to exert undue influence or intimidation. The implementation of the 
Declaration  on  Open  Judiciary,  signed  in  March  2022  by  12 different  judicial  institutions, 
CSOs  and  professional  associations,  led  by  the  Supreme  Court,  continued  and  helped  to 
improve transparency in the judiciary. The Judicial Media Council adopted a two-year work 
plan  focusing  on  preparation  of  its  communication  strategy  and  conducted  training  on 
communication skills for 40 judges and courts’ spokespersons. Political actors should refrain 
from  publicly  commenting on judicial proceedings. The  Commission  for the supervision  of 
the functionality of the automated court case management information system carried out 
9 out of 19 supervisions planned for 2022. A system for electronic distribution of cases in the 
Public Prosecutor’s Office became operational  in  January 2023. Reliable statistical  data are 
needed  on  the  performance  of  the  judiciary  and  the  prosecution  service,  in  line  with  the 
recommendations  and  methodology  of  the  European  Commission  for  the  Efficiency  of 
Justice (CEPEJ) (a Council of Europe body). 

Accountability 

The Association of Judges' Advisory Body for Judicial Ethics received  no new requests for 
opinions. 

19 

 
 
In  2022,  the  Judicial  Council  received  72 requests  to  determine  the  responsibility  of 
144 judges or presidents of court. It dismissed 5 judges. The Judicial Council issued a written 
reprimand  to  2 judges  and  fined  a  court  president  and  a  judge.  The  CPP  dismissed 
1 prosecutor and, at their own request, ended the tenure of 2 prosecutors against whom it had 
to 
initiated  disciplinary  proceedings.  4 judges  were  dismissed  for  reasons  relating 
unprofessional  performance,  and  1 for  a  severe  disciplinary  offence.  According  to  opinion 
polls, public trust in the judiciary dropped to the lowest level ever (around 8%). 

In  2022,  the  State  Commission  for  the  Prevention  of  Corruption  issued  11 misdemeanour 
payment  orders  against  6 judges,  3 court  presidents  and  2 prosecutors  for  failing  to  submit 
asset declarations or reports on the change of their property status and interests. 

Professionalism and competence 

The Judicial Council elected four court presidents, two Supreme Court judges, two Court of 
Appeal  judges  in  Gostivar,  27 basic  court  judges  and  one court president.  The  Council 
assigned 17 judges to serve in different courts for a one-year period. Elections to the higher 
courts were further delayed by some attempts to interfere in the process of appointing judges 
and  by  the  lack  of  an  accredited  company  to  perform  psychological  and  integrity  tests  for 
candidate judges. 

The CPP appointed two prosecutors in the State Public Prosecutor's Office (PPO), four in the 
higher  PPOs,  two heads  of  basic  PPOs  and  two  new  prosecutors  to  the  Public  Prosecutor’s 
Office for Prosecuting Organised Crime and Corruption (OCCPPO). In 2022, a total of 5 574 
professionals  participated in  227 in-service training  sessions  organised by the Academy for 
Judges and Prosecutors. 

Quality of justice 

The  new  Law  on  the  Academy  for  Judges  and  Prosecutors,  adopted  in  June  2023 
maintained the Academy as the sole entry point to the judiciary and prosecution service, and 
heeded  the  European  Commission’s  recommendation  not  to  shorten  initial  training.  In 
anticipation of the adoption of the Law, the Academy informed the candidates for the ninth 
intake that the entry qualification exam scheduled for 29 May to 4 June would be postponed, 
as the new Law sets a different order for entry tests. 

The  57 graduates  from  the  seventh  intake  were  recruited  in  basic  courts  and  PPOs.  The 
Judicial  Council  published  a  vacancy  in  June  2023.  The  CPP  elected  18 prosecutors  and 
published a new vacancy. The Academy continued its active cooperation with the European 
Judicial Training Network and the Academy for European Law. The total budget for training 
initiatives in 2022 amounted to EUR 1.74 million, a 46.3% increase compared to the previous 
year. One interpreter was recruited. 

The  Supreme  Court  and  the  four  Courts  of  Appeal  contributed  to  the  consistency  of 
judgments  and  harmonised  court  practices.  They  focused  on  reviewing  high-profile  cases 
and cases of public interest. The Supreme Court, upon an initiative of its President, adopted a 
principled stance that all courts should publish their decisions, whether final or not, on their 
websites.  The  Court  also  adopted  a  principled  stance  on  the  direct  application  of  the 
Constitution  and  the  European  Convention  on  Human  Rights  in  appeals  procedures  against 
decisions of the Judicial Council on the dismissal of judges or court presidents. The Supreme 
Court adopted and published 17 additional principled legal opinions, stances and conclusions. 

At  the  end  of  2022,  there  were  409 judges,  (22.3  per  100 000 inhabitants)  61.3%  of  whom 
were female and 157 prosecutors (8.5 per 100 000 inhabitants), 55% of whom were female. 
According  to  CEPEJ,  the  European  averages  are  22.2 judges  and  18.8 prosecutors  per 
20 

 
 
100 000 inhabitants.  The  2022  budgetary  allocation  for  the  judicial  system  was  about 
EUR 83.5 million.  Scheduled  retirements  were  one  of  the  factors  driving  numbers  down: 
64 judges  and  16 prosecutors  retired  (48  retired  judges  and  11  prosecutors  in  2022).  It 
remains crucial 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 continued to implement the IT strategy. To recruit additional IT 
staff, the judiciary will have to offer working conditions comparable with those in the private 
sector. 

There are 46 licensed mediators. In 2022, a mediation agreement was reached in 397 out of 
918 cases,  and  121  are  ongoing.  The  relevant  chambers,  the  Academy  for  Judges  and 
Prosecutors  and  the  Association  of  Judges,  should  continue  to  promote  of  mediation  and 
other alternative dispute resolution methods. The body tasked with assessing and ensuring 
the quality of mediation is the National Council for Mediation, which is not yet functional. 

Efficiency 

Efficiency  of  the  judiciary  was  affected  by  the  Judicial  Council's  lateness  in  electing  new 
judges, and by limited progress in the implementing a human resources strategy in the courts, 
which would include setting up a new network of courts. 

The average clearance rate for the basic courts dropped from 100.8% to 97.8%. The number 
of unfinished cases under the old procedural laws increased. 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.  The  Constitutional  Court's 
decision  to  annul  two  articles  of  the  Law  on  salaries  and  emoluments  of  elected  and 
appointed persons resulted in an increase of salaries for judges and prosecutors. A systemic 
solution has yet to be found to the issue of salaries in the judiciary, considered inadequate. No 
steps  were  taken  to  reduce  the  overall  cost  and  duration  of  the  enforcement  process  (the 
bailiff’s services). 

Fight against corruption 

The country is in between some and moderate level of preparation in the prevention and 
fight against corruption. No progress was made. Corruption remains prevalent in many areas 
and  is  an  issue  of  concern.  Delays  and  reversals  in  trials  of  high-level  corruption  cases 
increased,  resulting  some  cases  in  the  expiration  of  the  statute  of  limitations.  The  Criminal 
Code  was  amended  through  an  expedited  parliamentary  procedure.  The  maximum  legal 
penalties for specific corruption-related criminal offences were reduced, having implications 
on  the  application  of  the  statute  of  limitations  and  affecting,  halting  or  even  terminating,  a 
large  number  of  high-level  corruption  cases,  including  from  the  former  Special  Public 
Prosecutor’s  Office  (SPO).  The  amendments  also  hamper  the  authorities’  ability  to 
investigate and prosecute such offences. This is a matter of serious concern.  

The  State  Commission  for  the  Prevention  of  Corruption  was  proactive  in  providing  public 
institutions  with  policy  guidance  on  preventing  corruption.  It  opened  several  cases,  but  its 
recommendations need to be effectively followed up on. Efforts to improve the functioning of 
the  State  Commission  for  the  Prevention  of  Corruption  should  continue,  especially  by 
allocating  additional  funding  for  the  recruitment  of  specialist  staff.  Additional  human 
resources and financial means should also be made available to the PPO, investigative centres 
and law enforcements units in charge of investigating corruption. The sectors most vulnerable 
to corruption require targeted risk assessments and dedicated actions.  

21 

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

→  enhance  implementation  of  the  national  strategy  for  the  prevention  of  corruption  and 

conflict of interests and properly implement GRECO’s recommendations; 

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

→  improve  its  track  record  in  high-level  corruption  cases  –  with  timely,  professional  and 
transparent  proactive  investigations,  prosecutions,  final  convictions  and  recovery, 
including confiscation of criminal assets, value-based confiscation, extended confiscation 
and third-party confiscation. 

Track record 

North Macedonia continues to investigate, prosecute and try corruption cases, including high-
level corruption cases. There are concerns about patterns emerging  from, but not limited to, 
several  cases  previously  dealt  with  by  the  former  Special  Prosecutor’s  Office  after  first-
instance  verdicts  have  been  delivered.  These  include  an  increasing  number  of  delays  and 
reversals,  resulting  in  the  expiration  of  the  statute  of  limitations  in  some  cases.  The  most 
frequent  reasons  for  postponement  include  the  absence  of  defendants  or  defence  counsel, 
prosecutors,  mainly  due  to  health  issues,  and  members  of  trial  panels,  when  these  are 
appointed  to  another  court.  Judges  must  proactively  and  efficiently  manage  their  cases  to 
ensure timely justice. Judicial accountability should be ensured in this respect. 

The  cases  of  the  former  Special  Prosecutor’s  Office  continued  to  be  tried  mostly  by  the 
Public Prosecutor’s Office for Prosecuting Organised Crime and Corruption (OCCPPO).  So 
far,  there  have  been  final  convictions  in  12 high-level  corruption  cases.  First-instance 
verdicts were issued in 37 high-level corruption cases. In the 27 former SPO cases to be tried 
by the OCCPPO, there have been final convictions in six cases while trials are ongoing for 
most  of  the  remaining  ones.  In  2022,  the  OCCPPO  opened  39 cases  of  alleged  corruption 
against 148 individuals and 6 legal entities. The September 2023 amendments to the Criminal 
Code are cause of serious concern because of their impact on former SPO cases, since a large 
part  of  the  cases  pertained  to  the  offences  whose  provisions  were  altered.  The  reduced 
statutes of limitations affect, halt or even lead to the termination, of a large number of cases. 
Since the amendments took effect mid-September, some former SPO case have already been 
terminated,  or  had  hearings  postponed  because  the  charges  were  no  longer  valid,  or  the 
statute of limitations had expired.  

In  2022,  12 investigations  were  opened,  charges  were  filed 
in  four cases  against 
20 individuals.  One  is  a  high-profile  case  against  a  former  Secretary  General  of  the 
Government, for abuse of an official position. 

In 2022, 16 first-instance judgments were handed down against 62 individuals. and 8 second-
instance judgments were issued against 40 individuals.  

In  2022,  35 criminal  sentences  were  passed  (compared  with  23  in  2021).  In  these  cases, 
six individuals  (14  in  2021)  were  sentenced  to  prison,  while  29  (nine  in  2021)  received 
suspended sentences.  

The  State  Commission  for  the  Prevention  of  Corruption  continued  to  fulfil  its  role  and 
opened several new cases. In 2022, the SCPC processed a total of 145 cases (106 in 2021) of 
alleged conflict of interest, of which 27 (17 in 2021) were initiated by the SCPC itself and 

22 

 
 
118 (89 in 2021) at the request of other parties. In 2022, 161 cases were closed (152 in 2021), 
of which 18 dated from 2019, 20 from 2020 and 53 from 2021. In 2022, a conflict of interest 
was  established  in  six cases  (two in  2021).  Initiatives  were  submitted  to  the  competent 
authority  calling  on  it  to  determine  responsibility,  resulting  in  two disciplinary  procedures. 
The SCPC issued opinions on 87 out of the 88 requests it received. In 2022, the SCPC found 
grounds for suspecting  breaches  of the Law on the prevention of corruption  and conflict  of 
interest, resulting in 37 misdemeanour payment orders (32 in 2021).  

The SCPC also submitted three requests to the SCPC Misdemeanour Commission to initiate 
misdemeanour  proceedings  against  public  officials.  As  regards  irregularities  in  asset 
declarations, in 2022, the SCPC issued 372 misdemeanour payment orders (86 in 2021), of 
which  367  related  to  fines  for  offences  committed  under  Article 82  of  the  Civil  Code,  and 
5 to failure to report an increase in property.  In January 2023, the SCPC adopted an annual 
plan to monitor property ownership and other interests, involving 21 officials: 5 prosecutors, 
5 judges, 6 MPs and 5 public office holders in the government. 

In  2022,  583 cases  of  corruption  were  initiated  (599  in  2021),  20  at  the  initiative  of  the 
SCPC (16 in 2021), and 563 based on reports submitted by third parties (583 in 2021). Of the 
cases  initiated,  560  were  addressed  (404  in  2021).  Of  the  cases  submitted  on  the  basis  of 
reports, the SCPC found grounds  for  suspected breaches  of the Criminal Code in  12 (11 in 
2021) and submitted initiatives to the public prosecutor in all 12 cases. The SCPC launched 
initiatives asking the competent authorities to ascertain  which officials were responsible for 
what breaches in 6 cases (5 in 2021). In addition, 12 recommendations and 2 indications were 
submitted  to  state  institutions  and  authorities  calling  on  them  to  take  specific  measures  in 
response to the circumstances ascertained. 

GRECO’s  Fourth  Round  Evaluation  Report on  the  prevention  of  corruption  in  respect  of 
Members  of  Parliament,  judges  and  prosecutors  contained  19 recommendations  for  North 
Macedonia.  In  its  report  on  implementing  these  recommendations,  GRECO  concluded  that 
nine of the 19 recommendations had been implemented (or dealt  with) satisfactorily, 9 had 
been partly implemented and 1 had not been implemented. In March 2023, North Macedonia 
submitted a situational report to GRECO on the measures taken to implement the remaining 
recommendations. 

The  Parliamentary  Committee  on  Issues  of  Rules  of  Procedure  and  Immunity  adopted  a 
training  curriculum  for  a  code  of  ethics  workshop  for  Members  of  Parliament,  as 
recommended by GRECO. 

In June 2023, GRECO  adopted the  second  compliance  report on preventing corruption and 
promoting integrity (as part of the Fifth Evaluation Round), which concluded that 13 of the 
23 recommendations had been implemented satisfactorily, 9 partially implemented and 1 not 
implemented. 

Institutional framework 

Preventive measures 

The  Law  on  the  prevention  of  corruption  and  conflict  of  interest  needs  to  be  fully 
implemented.  The  SCPC  continued  to  fulfil  its  role  in  providing  policy  advice  to  public 
institutions proactively. 

The  SCPC  needs  to  further  strengthen  its  capacity  to  instigates  initiatives  before  the 
competent authorities at its own initiative, identifying possible wrongdoings not yet reported 
in  the  media.  Too  often,  the  conclusions  of  the  SCPC  reports  are  not  followed  up  by  the 
institutions  concerned.  The  SCPC's  ability  to  verify  declarations  of  interest  and  asset 

23 

 
 
declarations  is  limited  because  the  data  is  not  systematically  cross-checked  with  the  data 
recorded  in  the  cadastre  (property  register)  or  held  by  other  relevant  institutions.  Cross-
checks  are  only  carried  out  on  the  asset  declarations  of  around  20 officials  a  year,  selected 
according to specific criteria. 

By  the  end  of  2022,  the  number  of  SCPC  staff  had  increased  from  34  in  2021  to  48 
(compared  with  the  64  planned).  The  2023  SCPC  budget  also  increased  by  approximately 
15% compared to the 2022 budget, mainly thanks to support from donors. Further action is 
needed to strengthen and support the SCPC, and to make sure it is adequately resourced. The 
SCPC  would  benefit  from  specialist  staff  with  investigative  experience,  for  more  effective 
verification of asset declarations. Furthermore, the SCPC should be strengthened to allow for 
an  exchange  of  information  with  neighbouring  countries.  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  for  whistle-
blowers and monitor implementation of the national strategy for the prevention of corruption. 
Software  enabling  communication  between  the  IT  systems  of  the  cadastre,  the  Revenue 
Service, the Ministry of the Interior and the central register must be operational on time and 
must  enable  more  effective  checks  of  asset  declarations.  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  guidelines  for  local  self-
government.  As of the  end of 2022, a total  of 85 institutions  had  signed an integrity policy 
and appointed contact persons on these issues (18 state bodies and public sector institutions 
and 67 local authorities). 

Training  on  integrity  was  organised  for  ministries,  state  bodies  and  local  authorities.  A 
training centre was set up within the SCPC. The SCPC is also working on software solutions 
for  trainings,  and  public  awareness-raising  campaigns  were  organised  on  integrity,  on 
whistle-blower protection, and more generally on the fight against corruption. 

In 2022, the Ministry of the  Interior  adopted its regular internal  anti-corruption  programme 
with an action plan and provided training on related topics for staff members. 

Law enforcement 

The  main  law  enforcement  institutions  dealing  with  corruption  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 the Interior. The OCCPPO inherited most of the former Special Prosecutor’s Office high-
profile  cases.  The  OCCPPO  has  not  yet  moved  to  its  new  premises.  Budget  and  staffing 
levels  are  still  insufficient  to  effectively  tackle  cases  of  corruption  and  organised  crime. 
Currently,  the  OCCPPO  is  working  with  14 prosecutors.  This  is  still  not  enough  given  the 
OCCPPO’s  wide  range  of  responsibilities.  There  are  4 investigators,  9 associates  and 
16 support staff assisting the prosecutors but no financial experts or analysts. The Office still 
lacks  strategic  planning  in  handling  investigations  and  cases,  which  affects  its  overall 
efficiency. The Office could be more efficient, if more specialisations were introduced and if 
resources were focused on the most complicated cases. 

At the end of 2022, the OCCPPO signed cooperation agreements with  the Central  Registry 
and  the  Real  Estate  Cadastre  Agency  allowing  it  direct  access  to  their  databases.  Similar 
agreements need to be concluded with the Association of Banks, the Ministry of the Interior 
and  the  Employment  Agency.  The  OCCPPO  should  increase  cooperation,  information-
sharing and follow-up to SCPC’s initiatives and recommendations.  

24 

 
 
The State Audit Office, investigative centre/judicial police in the PPO and the police all lack 
sufficient  resources  to  pursue  high-profile  cases.  Limited  and  partially  inadequate  technical 
equipment  and  facilities  remain  a  central  problem.  The  quality  and  efficiency  of 
investigations need to improve. Moreover, in many cases there is a need for investigations to 
be accompanied by parallel financial investigations into persons and companies suspected of 
involvement in wrongdoing. Limited use is made of freezing  and confiscation mechanisms. 
To  increase  the  number  of  financial  investigations,  the  prosecution  service  should  be 
allocated  appropriate  financial  and  human  resources,  the  relevant  institutions  should 
coordinate with each other more and have better access to integrated databases. 

The State Audit Office carries out ex post checks and publishes annual reports on its website. 
In November 2022, the  State Audit  Office  sent  the Public Prosecutor’s  Office two requests 
for  them  to  take  action  in  response  to  alleged  irregularities  which  came  to  light  during  the 
audit of two participants in the election campaign. No requests for public prosecutorial action 
were  submitted  following  the  audit  performed  on  political  parties’  financial  statements  and 
accounts.  The  State  Audit  Office  produces  quality  audit  reports,  in  which  it  identifies  key 
findings and gives appropriate recommendations, which the authorities should follow up on 
systematically. 

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  funding  can  be  provided  to 
political parties and managed correctly. The Electoral Code sets out the rules on the financing 
of electoral campaigns. The Law on free access to public information allows applicants to 
obtain information on the public financing of political parties. The Law on lobbying entered 
into force in June 2022. The Law extends the role of the SCPC adding the responsibility to 
keep  a  register  of  lobbyists  and  lobbying  organisations.  No  organisations  have  been 
registered  to  date.  The  Law  on  the  protection  of  whistle-blowers  still  needs  to  be  further 
aligned with the EU acquis.  

In  September  2023,  Parliament  adopted  amendments  to  the  Criminal  Code  through  an 
expedited  procedure,  which  prevented  the  comprehensive  consultations  with  domestic 
stakeholders and the European Commission prior to their adoption. Whilst some changes on 
strengthening confiscation measures can be considered as limited improvements, these should 
be  paired  with  strong  legal  and  procedural  safeguards,  as  well  as  functioning  tracing, 
freezing,  and  management  measures  for  an  effective  national  asset  recovery  system.  Other 
amendments, in relation to specific corruption-related criminal offences, are of concern since 
they reduce the maximum legal penalties, have implications on the statute of limitations, and 
delete  a  specific  category  of  offences,  notably  abuse  of  office  in  public  procurement.  In 
addition,  the  amendments  raise  serious  concerns  as  they  also  affect  the  applicable  criminal 
procedures, limiting the scope of investigations, and thus hampering the authorities’ ability to 
effectively prosecute high level corruption cases.  

Strategic framework 

Implementation  of  the  national  strategy  for  the  prevention  of  corruption  and  conflict  of 
interest (2021-2025) and the related action plan continues to proceed very slow, indicating an 
overall  lack  of  commitment  and  sense  of  ownership  from  the  institutions  concerned.  Only 
10% of the activities planned for 2022 were implemented in full, 35% are ongoing, 55% have 
not been implemented. This is a significant decrease from the previous year when 20% of the 

25 

 
 
activities planned for 2021 were implemented in full, 27% were ongoing and 59% were not 
implemented.  Parliament  has  yet  to  discuss  the  report  on  implementation  of  the  strategy  in 
2021 and the SCPC report on the 2021 local elections. 

Fundamental rights 

The legal framework on the protection of fundamental rights is partially aligned with the EU 
acquis  and  European  standards  on  fundamental  rights.  The  country  continues  to  meet  its 
general  obligations  on  fundamental  rights,  but  legislation  should  be  implemented  in  a 
systematic manner. Some significant amendments were made to the Criminal Code regulating 
criminal acts of gender-based violence. Parliament should make appointments to independent 
and regulatory bodies  based on merit.  The functional  independence of human rights  bodies 
must be guaranteed at all times. This means, amongst other things, allocating sufficient funds. 
Services for victims of gender-based violence still need improvement – and proper budgeting 
–  to  meet  the  standards  laid  down  by  the  Istanbul  Convention.  Persons  with  disabilities 
continue  to  face  direct  and  indirect  discrimination,  social  exclusion  and  barriers.  The 
Ombudsman’s  Office  and  the  Commission  for  the  Prevention  and  Protection  against 
Discrimination signed a memorandum of understanding to formalise their coordination. The 
situation in prisons is still dire. The recommendations made by the European Committee for 
the  Prevention  of  Torture  on  the  treatment  of  detained  and  convicted  persons  were  not 
addressed,  which  is  a  matter  of  serious  concern.  Detention  conditions  should  be  improved 
with the utmost urgency. Special attention should be given to promoting non-discrimination, 
increasing effectiveness in addressing hate crime and hate speech, strengthening the capacity 
and independence of institutions in charge of the protection of rights of persons belonging to 
minorities or communities. The Agency for Community Rights Realisation needs to receive 
sufficient funding to further promote the protection of minorities and the implementation of 
the  national  strategy  ‘One  Society  for  All  and  Interculturalism’.  The  external  oversight 
mechanism  for  the  police,  including  the  prison  police,  is  still  not  fully  functional,  with  the 
three CSOs representatives still to be selected by the Parliament. The enacted amendments to 
the Law on civil  registry pave the way to  resolving  cases  of statelessness  and fulfilling the 
country’s international obligations.  

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

→  address  the  dire  conditions  in  prisons  and  step  up  efforts  to  promote  alternatives  to 
incarceration and implement relevant recommendations on detention conditions, made by 
national and international institutions; 

→  allocate  the  necessary  resources  to  the  Commission  for  the  Prevention  and  Protection 

against Discrimination enabling it to fulfil its mandate; 

→  ensure proper implementation of the Law on civil registry in order to end statelessness. 

North  Macedonia  has  ratified  most  international  human  rights  instruments.  On 
20 March 2023,  Parliament  ratified  Protocol  No 16  to  the  European  Convention  for  the 
Protection  of  Human  Rights  and  Fundamental  Freedoms  allowing  the  highest  courts  to 
request  the  European  Court  of  Human  Rights  (ECtHR)  to  give  advisory  opinions  on 
questions of principle relating to the interpretation or application of the rights and freedoms 
established by the Convention. 

In  June  2023,  there  were  368 applications  pending  before  the  ECtHR,  which  delivered 
judgments  on  8 applications  and  found  breaches  of  the  European  Convention  on  Human 
Rights in 6 out of 7 cases (compared with 3 in 2022). Most of these related to the right to a 

26 

 
 
fair  trial,  the  right  to  liberty  and  security  and  the  protection  of  property.  In  the  reporting 
period,  there  were  354 new  applications  allocated  to  a  decision  body.  Currently,  there  are 
8 cases under enhanced supervision by the Committee of Ministers. 

In order for North Macedonia to fully benefit from its observer status in the European Union 
Agency for Fundamental Rights (FRA), it needs to develop a comprehensive monitoring and 
data  collection  system  in  order  to  assess  the  level  of  implementation  of  human  rights 
legislation,  policies,  and  strategies.  The  Ombudsman’s  Office  remains  the  central  body  for 
the  promotion  and  enforcement  of  human  rights.  Following  a  protracted  delay  in  the 
appointment, by Parliament, of five Deputy Ombudspersons, the Ombudsman withdrew the 
names proposed and a new vacancy was published in May 2023. The Office strengthened its 
cooperation with CSOs, including those dealing with the protection of rights of the child. Its 
budget increased by 0.9% compared to 2022. There were no new recruitments. In 2022, the 
Office  dealt  with  3 482 complaints  of  which  3 209  had  been  received  in  2022  and  273  had 
been  rolled  over  from 
initiated 
2 173 procedures. Violations were confirmed in 683 cases (31.43% of all cases). Amongst the 
Office’s  other  activities,  it  referred  120 cases  to  higher  instances  (17.57%  of  the  total)  and 
was still waiting for a response in 57 cases (8.35% of the total). 

the  previous  year.  Based  on 

the  Office 

these, 

Regarding  the  prevention  of  torture  and  ill  treatment,  North  Macedonia  still  needs  to 
implement the recommendations published by the European Committee for the Prevention of 
Torture (CPT) in 2021 and those from previous reports. 

The external oversight mechanism for the police, including the prison police, is still not fully 
functional,  with  the  three  CSO  representatives  provided  by  statute  still  to  be  selected  by 
Parliament. In 2022, the Ombudsman’s civil control mechanism acted on  11 complaints, up 
from  8 complaints  in  2021.  It  submitted  3 requests  to  the  PPO  to  initiate  a  procedure  for 
determining criminal responsibility, compared to 1 similar request sent in 2021. In one case, 
brought  before  the  Skopje  Basic  Criminal  Court,  a  police  officer  was  found  guilty  of 
harassment  when  on  duty.  In  2022,  the  relevant  section  in  the  PPO  opened  163 new  cases 
(criminal  charges)  against  299 individuals  with  police  powers  or  members  of  the  prison 
police  suspected  of  having  committed  criminal  offences.  All  reported  cases  must  be 
investigated  without  delay  and  safeguards  against  ill  treatment  by  the  police  must  be 
implemented  systematically.  There  needs  to  be  more  awareness  raising  about  the  external 
oversight  mechanism  for  the  police,  and  better  training  opportunities  to  promote  a  good 
understanding of the system. 

In  2022,  the  Department  for  Internal  Control,  Criminal  Investigations  and  Professional 
Standards  at  the  Ministry  of  the  Interior  handled  52 complaints  on  the  use  of  excessive 
physical  force  by  police  officers  (63 complaints  in  2021),  of  which  28  were  found  to  be 
ungrounded and 20 lacked evidence. Four criminal charges were filed with the PPO against 
6 police officers for ill treatment when on duty. In 2022, the prisons submitted 129 reports on 
the  use  of  coercion  against  sentenced  persons  to  the  Directorate  for  the  Execution  of 
Sanctions. 

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.  ECtHR  case  law  shows  that  poor  detention 
conditions can be considered grounds for a violation of Article 3 on prohibition of torture. In 
2022,  the  National  Preventive  Mechanism  made  18 visits  to  police  stations,  prisons, 
educational  correctional  institutions,  psychiatric  hospitals  and  places  where  foreigners  and 
asylum-seekers  are  accommodated  or  detained.  Issues  raised  in  the  previous  years  remain 
pending, especially the lack of appropriate working conditions for police officers and the lack 
27 

 
 
of adequate healthcare in prisons. In addition, the National Preventive Mechanism reported a 
worrying deterioration in security conditions in the Idrizovo closed ward. 

Although  infrastructure  was  renovated  and  improved  in  a  number  of  prison  facilities, 
conditions  in  parts  of  Idrizovo  prison  and  other  detention  facilities  of  the  prison  system 
remain  inhumane.  Reported  overcrowding  raises  additional  concerns  for  prison  population 
(2 476  persons  sentenced  and  detained  according  to  data  from  April  2023).  Renovating  the 
most derelict building in line with the CPT recommendations is a priority. 

The appointment of a new acting Head of the Directorate for the Execution of Sanctions and 
an  acting  Director  of  Idrizovo  prison  was  a  positive  step,  taking  account  of  their  relevant 
professional  backgrounds.  However,  the  requirements  of  the  2019  Law  on  executions  of 
sanctions for the selection of prison management were not consistently applied. 

Regular  inspections  of  prisons  should  continue.  Corruption  in  prisons  continues  to  be  a 
recurrent issue. In 2022, a plan for the prevention of corruption in the national prison system 
2022-26  was  adopted,  together  with  the  2023  annual  plan.  Despite  a  positive  effort  to 
incentivise medical staff working in prisons with a hardship allowance, the lack of adequate 
healthcare or measures to treat drug addiction in prisons remains an issue of serious concern. 

In  order  to  be  fully  implemented,  the  2021-2025  strategy  for  developing  the  prison  system 
requires funds, additional staff and political commitment. 

The probation system continues to develop, and the number of cases is increasing. In 2022, 
the total number of cases handled by the 11 probation offices increased to 475 (451 in 2021). 
Cooperation  should  continue  between  the  public  and  private  sector  and  civil  society,  and 
between  agencies.  Coordination  has  improved  between  probation  officers,  judges,  public 
prosecutors,  prison  staff  and  other  institutions  before  a  convict  is  released  and  this  should 
continue.  The  concentration  of  most  of  the  probation  cases  in  the  Skopje  Basic  Criminal 
Court of, highlights the need for training and awareness raising on the benefits of probation in 
other  courts  in  the  country.  No  progress  was  made  in  adopting  amendments  to  the  legal 
framework  regarding  alternative  sentences  and  alternative  procedures  to  increase  their  use. 
No meaningful progress was made in addressing 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, full alignment with the General Data Protection 
Regulation  is  needed.  Areas  requiring  alignment  are:  the  transfer  of  personal  data;  the 
independence of the Personal Data Protection Agency (PDPA); obsolete parts of old national 
laws that need to be repealed. The PDPA submitted amendments to the Law on personal data 
protection (LPDP). The country needs to adopt national legislation in line with the EU Law 
Enforcement Directive. 

Many sector laws  that contain provisions on the processing of personal  data  have yet  to  be 
harmonised with the LPDP. Additionally, the PDPA is not always consulted on sectoral laws 
or implementing legislation and its advice is not always taken on board. 

In  general,  data  controllers  do  not  implement  the  LPDP.  In  2022,  the  Agency  received 
19 notifications on breaches of personal data rules, compared with 1 notification in 2021. 

The  Agency’s  capacity  does  not  match  its  tasks  and  powers.  The  Agency  presently  works 
with only 21 staff among which there are only 5 supervisors and 1 IT specialist. The Agency 
is not fully autonomous financially. State funds allocated to the Agency are just sufficient to 
cover basic functions without any room for investment in staff professional development or 

28 

 
 
replacement of outdated vehicles and IT equipment. 

In  2022,  the  Agency  carried  out  170 supervisions  (compared  to  304  in  2021),  received 
300 complaints (540 in 2021), and issued reprimands in 10 cases (17 in 2021). The Agency 
issued  15 opinions  on  draft  laws  and  implementing  legislation.  The  Agency  delivered 
13 training sessions and held 19 coordination meetings with personal data protection officers, 
in  line  with  good  practice.  Recent  changes  in  the  Law  on  financial  companies  led  to  an 
increase in  the number of complaints. Due to  an inconsistency in  the Law, there have been 
complaints  by  citizens  about  the  misuse  of  personal  data  when  obtaining  ‘fast  loans’.  The 
Agency started to issue misdemeanour charges against some of the relevant companies. The 
Agency’s  annual  report  in  Parliament  revealed  that  genuine  consideration  and  follow-up  of 
recommendations was lacking. 

Thematic  supervision  on  the  interception  of  communications  involved  the  relevant 
institutions. Improvements are needed in the field of data protection in the electoral sector. 

In the absence of accurate data on the number of cybercrime attacks involving personal data 
violations and the number of indictments and final judgments regarding these cases, there is a 
public  perception  that  institutions  have  weak  capacity  or  commitment  to  prosecute  these 
cases. There is a strong need for further awareness raising and to foster a culture of personal 
data protection in all sectors. 

Freedom  of  thought,  conscience  and  religion  is  guaranteed  by  the  Constitution  and  is 
implemented  in  practice.  The  law  prohibits  discrimination  on  grounds  of  religion.  The 
Commission for Relations with Religious Communities and Groups is the main government 
body  responsible  for  cooperation  between  the  government  and  registered  religious 
communities and is encouraged to continue to foster inter-religious dialogue and cooperation 
between  the  religious  communities.  The  government  is  delaying  accreditation  of  religious 
secondary schools in the country, which prevents students with diplomas from these schools 
from accessing higher education. 

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

Freedom of expression 

North  Macedonia  is  in  between  some  and  moderate  level  of  preparation  on  freedom  of 
expression.  Overall,  it  made  limited  progress.  The  general  context  is  favourable  to  media 
freedom  and  allows  for  critical  media  reporting.  The  amended  Criminal  Code  and  Law  on 
civil liability for defamation raised the overall level legal protection for journalists. However, 
a number of attacks, threats and some intimidating behaviour towards journalists were noted. 
Greater transparency is needed regarding media advertising by state institutions and political 
parties. Reform of the public service broadcaster is required to strengthen its independence, 
professional  standards  and  financial  sustainability.  Since  December  2018,  Parliament  has 
been delaying the appointment of the public service broadcaster’s programming council and 
media regulator’s council. Working conditions for journalists remain challenging.  

The Commission’s recommendations from last year remain valid. In the coming year, North 
Macedonia should: 

→  revise the legal framework governing the media to bring it into line with the EU acquis 
and  European  standards,  in  particular  on  competition  and  state  aid  rules,  intellectual 
property rights, part of the EU Single Market; 

29 

 
 
→  step  up  implementation  of  the  strategy  to  reform  the  public  broadcaster  and  finalise 
appointments  for  the  public  service  broadcaster’s  programme  council  and  the  media 
regulator’s council; 

→  continue to promptly address all threats and acts of violence against journalists and ensure 

perpetrators are brought to justice. 

The  overall  environment  enables  freedom  of  expression  and  critical  reporting.  The  legal 
framework was strengthened: the amended Criminal Code and the Law on civil liability for 
defamation,  adopted  in  November  2022,  have  increased  legal  protection  for  journalists. 
Systemic  challenges  remain  to  be  addressed:  deep  media  polarisation,  physical  and  verbal 
violence  against  journalists,  working  conditions  for  media  workers,  especially  their  labour 
and  social  rights.  The  laws  encompassing  the  functioning  of  the  media  need  to  be 
implemented. Digital technologies and disruptions on the media market point to the need for 
a general strategy on reform of media in cooperation with all stakeholders. 

Intimidation of journalists 

In  2022,  the  Ministry  of  the  Interior  recorded  17 cases  of  attacks  against  journalists  and 
opened  investigations.  The  Association  of  Journalists  recorded  14 incidents  involving 
journalists, of which 4 involved physical attacks or illegal detention, and 11 involved verbal 
attacks,  threats  and  other  forms  of  intimidation.  The  Agency  for  Audio  and  Audiovisual 
Media Services and the media associations regularly condemned such incidents. In February 
2023,  Parliament  adopted  amendments  to  the  Criminal  Code  increasing  protection  for 
journalists  while  performing  their  professional  duties.  The  Public  Prosecution  Office  in 
Skopje  appointed  of  a  prosecutor  to  monitor  the  proceedings  in  response  to  attacks  on 
journalists. This is a positive development. The public prosecutor appointed has the authority 
to  monitor proceedings in  which journalists appear as injured parties, witnesses or reported 
persons while performing their work. The Ministry of the Interior appointed a contact person 
at  the  Department  of  Cybercrime  and  Digital  Forensics  making  it  easier  for  journalists  to 
report  incidents  involving  cyberbullying  and  other  online  threats  to  their  safety.  The 
authorities  need  to  ensure  impartial,  speedy  and  effective  investigations  in  bringing 
perpetrators  to  justice.  Politicians  and  public  officials  on  different  occasions  used 
unacceptable  language  against  journalists.  Online  harassment  and  verbal  attacks  continued, 
especially on social media, with an increase in cases against female journalists. Old cases of 
physical attacks against journalists remain unresolved. 

Legislative environment 

The  Law  on  audio  and  audiovisual  media  services  is  broadly  in  line  with  the  EU  acquis, 
following  the  legislative  changes  of  July  2023.  Furthermore,  the  legal  framework 
encompassing the functioning of the media needs to further improve, in line with EU acquis 
and  international  standards.  The  OSCE  ODIHR  recommendations  on  the  electoral  legal 
framework have still to be addressed. The concerns raised by media associations about state-
funded political advertising in the media need to be addressed in line with the EU acquis and 
European best practices. 

In November 2022, a group of parliamentarians proposed amendments to the Law on audio 
and audio-visual media services that impose, on the government and local authorities, duties 
to  organise  and  fund  public  interest  campaigns.  However,  the  media  regulator  and  some 
associations  of  journalists  criticised  the  proposals,  stressing  that  they  could  undermine  the 
independence  of  the  media  and  disrupt  the  media  market.  More  sustainable  solutions  are 
needed to support media viability. 

30 

 
 
In 2022, the government continued to reduce funding for the broadcasting sector. Parliament, 
once  more,  failed  to  appoint  new  members  to  the  Public  Service  Broadcaster’s  Programme 
Council and Media Regulator’s Council. The terms of office of the current members of both 
councils was extended until Parliament elects new members. 

Implementation of legislation/institutions 

In 2022, the media regulator continued its supervisory role over various forms of media and 
over illicit media concentration and ownership. The regulator continued to work with CSOs 
and media outlets to promote media literacy and human rights topics such as gender equality 
and respect for the rights of persons with disabilities by broadcasters. 

The financial stability and independence of the media regulator need to be strengthened. This 
is even more important since it received additional responsibilities following the alignment of 
the national legislation with the EU Audiovisual Media Services Directive.  

In  2022,  the  Council  of  Media  Ethics  received  78 complaints  about  breaches  of  ethical 
standards.  The  most  frequent  complaint,  accounting  for  49.37%  of  cases,  was  about 
violations  of  the  legal  provision  that  ‘the  journalist  should  publish  accurate  and  verified 
information’. Though hate speech is prohibited online and offline, it persists online. In 2022, 
the  association  of  journalists  expressed  particular  concern  about  hate  speech  and  insults 
directed at journalists and media workers by politicians and other public office holders. The 
number  of  defamation  and  insult  lawsuits  involving  journalists  was  more  than  double  the 
number for last year: 54 cases in 2022 against 20 in 2021. 

Public service broadcaster 

Reform of the public service broadcaster was further delayed. Despite the 2021 Law on audio 
and audiovisual media services, in 2022, the authorities once again used discretionary powers 
granted  by  law  to  cut  funding  to  the  broadcasting  sector.  Budgetary  fluctuations  create 
uncertainty in planning. The authorities need to provide sufficient and stable funding for the 
public broadcaster. No solution was found to settle the public service broadcaster’s old debts 
towards  state  institutions.  Further  efforts  are  needed  to  ensure  the  independence  and 
sustainability of the public broadcaster, both financially and legally. 

Economic factors 

The  COVID-19  pandemic,  Russia’s  war  of  aggression  against  Ukraine  and  the  global 
economic  and  energy  crises  created  additional  pressures  on  the  media  industry.  The 
authorities  supported  media  outlets  through  a  range  of  economic  measures,  including  a 
reduction in the broadcasting licence fee for radio and television for 2023. Media associations 
continued to raise concerns about media integrity and editorial independence, and indicated 
the need for an assessment of the impact of ownership concentration on media pluralism and 
editorial  independence.  They  also  pointed  to  the  risk  of  individuals  or  a  group  of  media 
owners  having  excessive  influence  on  media  outlets.  Further  support  is  needed  for  the 
development  of  professional  and  investigative  journalism.  Media  independence  should  be 
further safeguarded. 

In  November  2022,  a  group  of  MPs  submitted  amendments  to  the  Law  on  audio  and 
audiovisual media services to lift the ban on government advertising on commercial channels. 
Some  media  associations  oppose  this,  fearing  it  could  undermine  the  independence  of  the 
media and  disrupt  the media market.  Media associations continued to  express  concern over 
legal provisions enabling political parties to use state funding to advertise in the media and 
over  the  lack  of  transparency  of  party-political  advertising  generally  and  on  online  media 

31 

 
 
platforms in particular. In 2022, there were five daily newspapers, including two in Albanian. 
The authorities continued to support the print media with just over EUR 300 000 in funding. 

As required by law, the media regulator publishes a register of broadcasting and print media, 
including information on the number of employees and type of employment. The number of 
online media outlets is estimated at between 150 and 200. 

Internet 

Online media are not governed by any specific law. There is a shift in the advertising market 
towards digital, with growing threats from disinformation, breaches of intellectual rights, and 
a lack of transparency concerning paid political advertising. Certain online media outlets are 
subject  to  influence  from  political  figures.  Political  parties  are  not  obliged  to  disclose  their 
spending on social media campaigns. There is inadequate oversight regarding the utilisation 
of personal data for election campaign purposes. 

The  public’s  understanding  of  the  risks  of  disinformation  needs  to  be  improved  as  do  and 
media  literacy  skills  throughout  society.  Current  counter-disinformation  measures  are  not 
very effective.  

Stronger  self-regulation  is  needed  for  online  media,  in  particular  through  promotion  of  the 
registry  of  online  media  (promedia.mk)  and  the  development  of  professional  standards  for 
online journalism. With regard to access to information, the Agency for the Protection of Free 
Access  to  Public  Information  received  343 complaints,  of  which  195  were  predominantly 
from CSOs, while 148 complaints were filed by individuals. 

Freedom of artistic expression 

Freedom of artistic expression is broadly guaranteed. 

Professional organisations and working conditions 

In 2022, the Independent Trade Union of Journalists and Media Workers registered various 
breaches of labour rights, notably the high number of short-term or part-time contracts with 
no  health  and  social  insurance,  no  right  to  annual  leave,  unpaid  overtime  and  compulsory 
night  shifts.  Dialogue  with  the  government  needs  to  be  improved.  Advocacy  aimed  at 
improving working conditions in the media is hindered by economic challenges in the sector 
and  opposition  to  the  unionising  of  journalists.  Further  efforts  are  needed  to  protect 
journalists’  professional  and  labour  rights,  freedoms  and  security,  in  particular  by 
strengthening the legal framework for the work of unions. Many journalists  have no choice 
but  to  accept  precarious  contractual  arrangements.  This,  together  with  difficult  socio-
economic  conditions  in  the  sector,  contribute  to  a  culture  of  self-censorship  and  create 
opportunities for media owners to influence editorial policy. 

The Agency for Audio and Audio-visual Media Services launched a new specialised website 
on gender equality and media, aiming to serve as a resource centre for journalists. Analysis 
showed that there are too few women executives in the private media. Additional measures to 
promote gender equality in the media industry are needed. 

(See also Chapter 10 – Digital transformation and media) 

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

The right to freedom of assembly and association is guaranteed by the Constitution and the 
government  ensures  that  the  legislation  is  thoroughly  implemented.  The  country’s  legal 
framework  is  largely  aligned  with  its  international  obligations  in  terms  of  freedom  of 

32 

 
 
association.  Further  efforts  are  needed  to  implement  rulings  of  the  ECtHR  relating  to  the 
registration of associations. 

Following the amendments to the current Law on associations and foundations, introduced in 
November 2022, the Central Registry rejected the use of the names ‘Ivan Mihailov’ and ‘Tsar 
Boris III’, thus removing the two Bulgarian cultural associations in Bitola and Ohrid from the 
list  of  associations  and  foundations  that  are  allowed  to  legally  operate  in  the  country.  This 
followed an assessment by the Commission for the Uses of Names, which established that the 
naming of the two cultural clubs after controversial historical figures had triggered a reaction 
in society. The drafting of new legislation on associations and foundations should be subject 
to  a  broad  consultation  process  with  civil  society  and  concerned  stakeholders.    The  law 
should aim to apply the highest international standards and guidance in this area, including by 
consulting  the  Venice  Commission  prior  to  the  adoption  of  the  law,  in  line  with  the 
recommendation of the European Commission against Racism and Intolerance (ECRI). 

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

No significant progress was made with regard to property rights. Procedures remain lengthy 
and expensive, due to the lack of an efficient central institution and the lack of coordination 
between  institutions  dealing  with  these  rights.  There  was  no  progress  with  the  national 
strategy  on  property  rights.  At  municipal  level,  property  registers  are  not  regularly  updated 
and  are  still  kept  in  analogue  format.  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  covered  the  whole  country.  The  administrations  that  handle  restitution, 
compensation and legalisation processes still struggle to manage their caseload, mainly due to 
understaffing  and  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. 

Non-discrimination principles are enshrined in the Constitution and national legislation. The 
authorities  should  align  the  national  legal  framework  with  anti-discrimination  provisions, 
based  on  the  Law  on  promotion  and  protection  against  discrimination.  On  the  back  of  the 
2021-2026  strategy  for  equality  and  non-discrimination,  the  authorities  adopted  an  action 
plan  for  implementation  of  the  strategy,  accompanied  by  a  financial  forecast.  The 
Commission  for  the  Prevention  and  Protection  against  Discrimination  continued  to  be 
proactive,  despite  existing  logistical  and  financial  challenges.  The  Commission’s  annual 
budget was slightly higher than the previous year, but this is considered insufficient to enable 
the  Commission  to  perform  its  functions.  Among  the  issues  hindering  the  Commission’s 
work  are:  two  unfilled  commissioner  posts  (out  of  seven  in  total),  a  lack  of  financial 
independence, low numbers of administrative staff and some limitations in the current anti-
discrimination  Law.  Parliament  once  more  failed  to  agree  on  the  appointment  of 
commissioners, which affects the enforcement of the Law on the prevention of and protection 
against  discrimination.  The  lack  of  diversity  in  the  Commission,  notably  as  regards  gender 
and  persons  with  disabilities,  continues  to  attract  criticism  from  certain  commissioners  and 
civil  society.  Despite  existing  challenges, 
the  Commission  worked  on 
248 complaints  and  7 ex  officio  procedures  and  issued  two recommendations.  It  confirmed 
discrimination  in  30%  of  cases,  particularly  in  public  information  and  media  and  labour 
relations.  Based  on  its  wide-ranging  powers,  the  Commission  submitted  14 requests  for 
misdemeanour procedures. In response to a request made by the Commission, a court passed 
judgment confirming the discrimination findings. 

in  2022, 

33 

 
 
The legal framework on combating hate speech needs further improvements, in line with the 
European  Commission  against  Racism  and 
(ECRI)  General’s  Policy 
Recommendation  No 15  on  combating  hate  speech.  Furthermore,  the  country  should  fully 
address ECRI’s findings and recommendations in its sixth report of September 2023.   

Intolerance 

The  availability  of  official  data  on  hate  crime  remains  sporadic,  despite  efforts  by  the 
authorities  to  develop  a  recording  and  data  collection  framework.  A  civil  society  database 
continues  to  register  hate  crime  cases  successfully.  Among  law  enforcement  and  criminal 
justice  officials,  a  greater  capacity  to  prevent  and  prosecute  all  instances  of  violence,  hate 
crimes and hate speech is needed. Strengthening of the capacities and understanding of law 
enforcement officials and legal  experts is  needed,  as  part of a  wider effort  to  foster a more 
tolerant and non-discriminatory culture in society. 

In  October  2022,  49 members  of  the  National  Coordination  Body  for  Equality  and  Non-
discrimination  were  appointed.  The  Ombudsman’s  Office  worked  ex  officio  on  three cases 
and  received  76 complaints  on  grounds  of  discrimination  (43  in  2021),  predominantly 
concerning  work  and  labour  relations,  and  it  issued  16 opinions.  The  Ombudsman’s 
Department for Anti-Discrimination Protection remains understaffed. 

In 2022, the Ministry of the Interior opened investigations into 11 online crimes. CSOs report 
that  hate  speech  is  on  the  rise  in  the  country.  There  should  be  a  systematic  practice  of 
collecting data and addressing hate speech and hate crime. 

Some progress was made on promoting gender equality through further alignment with the 
Istanbul  Convention  on  Preventing  and  Combating  Violence  against  Women  and  Domestic 
Violence and developing a policy framework for integrating gender perspectives and aligning 
with the EU gender equality acquis. A national strategy for gender equality was adopted in 
July 2022, together with an action plan for 2023-2024. In February 2023, amendments were 
made  to  the  Criminal  Code,  regulating  criminal  acts  of  gender-based  violence,  including 
stalking  and  hate  crimes  based  on  gender  identity  and  gender  differences.  The  Ministry  of 
Defence continues to implement the operational plan for implementing the Second National 
Action Plan on the UN Security Council Resolution 1325 Women, Peace and Security (2020 
- 2025). However, there is no progress in implementing the objective on communication and 
capacity building for the implementation of Resolution 1325 at local level, including the local 
self-government  units  and the Association  of  the units of local  self-government. The cross-
institutional mechanisms for implementing and monitoring gender equality policy need to be 
strengthened  with  an  improved  structure,  technical  capacity,  adequate  funding  and  trained 
professionals in line with international standards. The Law on Gender Equality has not been 
adopted  yet.  This  is  largely  due  to  a  growing  anti-gender  movement  countrywide.  Anti-
gender  campaigns,  at  times  supported  by  local  government  officials,  religious  and  political 
leaders, raise serious concern. 

Implementation  of  the  Istanbul  Convention  remains  a  challenge.  While  the  Law  on  the 
prevention  of  and  protection  from  violence  against  women  and  domestic  violence  was 
adopted in 2021, the implementing legislation was not adopted. Implementation also suffers 
from  the  lack  of  adequate  funding  (including  for  the  National  Coordinative  Body  on 
Domestic Violence), effective operating procedures and programmes for the reintegration of 
victims of violence. 

Operational cross-institutional protocols are missing, and the police and health workers still 
struggle to assess the consequences of violence and respond to them. Victims of gender-based 
and domestic violence faced several challenges in accessing health services due to a lack of 
adequately  trained  staff  and  limited  accommodation  facilities.  CSOs  providing  services  for 

34 

 
 
victims outside the capital are still entirely dependent on donor funding. 

Persistent gender gaps exist also in employment and in labour force participation. Among the 
working  age  population,  46%  of  women  have  consistently  been  out  of  the  labour  force 
compared to 23.3% of men. The gaps are even wider for marginalised women. Roma women 
aged  between  40  and  44,  in  particular,  have  the  highest  unemployment  rate.  Women 
registered  as  individual  farmers  are  excluded  from  the  Law  on  health  insurance  when  it 
comes to compensation due to illness, workplace injury and absence due to pregnancy, birth 
and motherhood. 

In  addition,  50.5%  of  women  are  out  of  the  labour  force  because  of  their  caring 
responsibilities towards other people, compared to 1.7% of men. This shows that unpaid care 
work  directly  contributes  to  inequalities  in  women’s  participation  in  the  labour  force  and 
women’s exclusion more generally. The adoption of a draft Law on labour relations, which 
includes shared parental leave, and a Law on harassment at the workplace has been pending 
for a number of years now. 

The  lack  of  reliable  sex  disaggregated  data  across  sectors  is  a  significant  obstacle  to 
developing evidence-based policies  and proper  measures.  The  first  national  gender equality 
index, published in 2019, has not yet been updated. The relevant institutions lack the capacity 
and coordination needed for proper gathering and analysis of gender statistics. 

Various legislative, institutional  and policy measures protect  the  rights of the  child  in  line 
with  international  standards  and  EU  acquis.  However,  a  better  legislative  framework,  more 
funding  and  more  human  resources  are  needed  across  most  sectors.  Further  reforms  and 
better  interinstitutional  cooperation  are  needed  to  ensure  respect  for  children’s  rights  to 
education, health, protection from violence, non-discrimination, etc. 

The preparation of a national action plan for children was further delayed. North Macedonia 
still has no national body responsible for coordinating all policies relating to implementation 
of the UN Convention on Child Rights and the Optional Protocols. Family law provisions on 
adoption and marriage under the age of 18 fall short of international standards. This has to be 
addressed as a matter of urgency. The third optional protocol on communications procedure 
is  still  not  ratified.  In  2022,  252  complaints  were  filed  with  the  Ombudsman  related  to 
breaches of children’s rights, 12 of which concern children with disabilities. The Ombudsman 
issued  103 opinions,  which  were  accepted  in  87 cases.  Awareness  raising  is  needed  on  the 
possibility for children to file complaints themselves. Further action is needed to strengthen 
the  capacity,  in  particular,  the  human  and  financial  resources,  of  the  Ombudsman’s 
Department for the Rights of the Child and Persons with Disabilities. The Ombudsman also 
needs to be more independent and to have a stronger remit. 

Children need to be more involved in the making of policies related to or affecting children’s 
rights.  The best  interests  of the child should be  the primary consideration  when institutions 
devise policies relevant to children and this principle should be incorporated into all relevant 
laws  and  policy  documents.  Mechanisms  for  protecting  children  from  violence  need  more 
support, in the form of sufficient funding and implementation of the national strategy to end 
violence  against  children  (2020-2025).  To  ensure  a  cultural  shift  and  dismantle  the  social 
acceptance  of  violence  against  children,  appropriate  educational  support  for  parents  is 
needed, aimed at strengthening positive, non-violent parenting skills. Measures are needed to 
strengthen  the  child  protection  system  and  improve  the  collection  of  data  on  violence  and 
abuse,  both  online  and  offline.  There  is  currently  no  provision  for  specialised  therapy  and 
child-friendly  rehabilitation  for  children  who  are  victims  of  violence.  Reliable  and 

35 

 
 
comparable  data  disaggregated  by  age  and  sex  is  essential  for  the  implementation  and 
monitoring of the National Strategy on addressing violence against children. 

There is lack of up-to-date information on measures undertaken to combat child poverty and 
to assess the impact of the existing legal protection. Despite social protection measures aimed 
at  combating the socioeconomic consequences of COVID-19, further  efforts to  prevent  and 
mitigate  the  effects  of  child  poverty  are  needed.  Authorities  need  to  commit  to  making 
changes  to  the  social  protection  system  to  be  more  child-sensitive  and  based  on  a  child-
centred  service  delivery  model.  Cooperation  at  local  level  needs  to  improve  among 
stakeholders,  to  involve  child  rights  CSOs  and  children  themselves  in  decisions  that  affect 
them. The capacity of social work centres needs to be expanded, so that they can 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 efforts to include children with disabilities in regular schools 
and pre-schools. However, there are insufficient financial and human resources to implement 
the Law on primary education and the social model of disability assessment based on human 
rights.  Despite  improvements  in  the  legal  framework,  some  issues  remain,  relating  to  the 
collection  of  centrally  disaggregated  data  on  children  with  disabilities,  the  lack  of  suitable 
facilities,  the  lack  of  community  services,  and  prejudice.  This  leads  to  marginalisation  and 
discrimination  against  children  with  disabilities  in  terms  of  access  to  education,  health  and 
social  protection  services.  With  regard  to  children  without  parental  care,  community-based 
services and sub-regional centres for foster family assistance were made available throughout 
the  country  and  no  children  are  in  institutionalised  care.  However,  the  authorities  should 
continue to reform the child protection system in ways that would prioritise family placement 
for children over small group homes. 

The  authorities  identified  7 child  victims  of  trafficking  in  human  beings  in  2022.  More 
measures are needed to ensure effective support for vulnerable children, including protection 
from  sexual  exploitation.  The  authorities  need  to  set  up  training  programmes  on  children’s 
rights for all professionals. Continuing professional development training should be provided 
to judges and public prosecutors on issues such as discrimination based on disability, gender-
based violence against women, and violence against children. The National Action Plan and 
Strategy for the fight against trafficking in children (2021–2025) should be aligned with the 
Lanzarote Convention. 

The new Law on justice for children was adopted, in line with international standards and the 
EU acquis, including the Directive on procedural safeguards for children who are suspects or 
accused persons in criminal proceedings. 

The administration of child justice was enhanced by the adoption of a 2022-2026 strategy on 
justice  for  children  and  a  2022-2023  action  plan,  further  promoting  alternative  measures  to 
custody and children’s resocialisation. There is a need for concrete measures supporting the 
judicial training providers and all relevant  professionals’ bodies to  address  the rights  of the 
child  and  child  friendly  and  accessible  justice  in  their  activities.  Legislation  needs  to  be 
amended to find child-friendly solutions for educational correctional measures for girls. The 
educational  correctional  facility  in  Volkovija  hosts  only  young  males;  in  the  absence  of  a 
female  section,  there  is  no  long-term  provision  for  statutory  education  for  girls.  There  is  a 
need for regular monitoring and inspection of the educational correctional facility in Tetovo 
and Ohrid prison, to ensure that the authorities provide proper protection and other services 
for the children detained there. Access to justice and legal representation is still inadequate, 
as is the capacity of public officials involved with child victims, child witnesses and children 
36 

 
 
in conflict with the law. Juvenile justice professionals need to take a more consistently inter-
sectoral and streamlined approach to implementing the legal framework. 

The rights of persons with disabilities are constitutionally guaranteed and set out in greater 
detail in the Law on prevention and protection from discrimination. A number of other laws 
specifically regulating social policy and assistance are also relevant in this context. The new 
2023-2030 national strategy for the rights of persons with disabilities was adopted, along with 
the 2023-2025 action document. Rules were adopted for the functional assessment of children 
with  disabilities  according  to  the  international  classification  of  functioning,  disability  and 
health. The rules are in line with the Convention on the Rights of Persons with Disabilities 
(CPRD)  and  will  enable  assistance  to  be  given  based  on  children’s  individual  needs. 
Implementation  of  the  2018-2027  national  deinstitutionalisation  strategy  continues.  This 
involves a transition from institutional care to family and community-based care with support 
from  social  services.  The  national  coordination  body  for  the  implementation  of  the  CPRD 
consists of representatives from the relevant ministries and two representatives of CSOs for 
persons with  disabilities. A team  for monitoring implementation  has been incorporated into 
the Ombudsman’s Office. The new Law on primary education promotes the full inclusion of 
students  with  disabilities  by  transforming  special  schools  and  classes  into  learning  support 
centres. There are no more children with disabilities in large-scale social care institutions. To 
support the mainstreaming of education for children with disabilities, 725 education assistants 
are  now  employed,  covering  850 children.  A  number  of  adults  with  disabilities  are  being 
gradually rehoused in 57 newly established residential units for supported living. Home care 
and day-care services have also been set up. (see Chapter 19 – Social policy and employment 
for aspects related to social services, assistance and benefits). 

Negative stereotypes and hate speech against lesbian, gay, bisexual, transgender, intersex 
and  queer  (LGBTIQ)  persons  prevail  in  society.  There  was  no  progress  in  removing 
negative  stereotypes  and  hate  speech  toward  LGBTIQ  persons  from  textbooks,  nor  in 
adopting a national action plan for LGBTIQ as part of systematic promotion of equality and 
prevention  of  discrimination.  There  was  no  progress  in  implementing  the  ECtHR  judgment 
(January  2019)  concerning  legal  gender  recognition  by  amending  the  Law  on  the  civil 
registry. The legal framework does not allow for the official recognition of same-sex couples. 

No progress was made in investigating the attacks on the LGBTIQ support centre which took 
place  in  2012,  2013  and  2014.  Law  enforcement  agencies  did  not  pursue  the  investigation 
into the acts of vandalism on the office of an LGBTIQ organisation in Tetovo or into death 
threats against activists. The court in Strumica handed down a six-month prison sentence for 
an  attack  against  an  LGBTI  activist.  In  June  2023,  the  authorities  facilitated  the  successful 
organisation of a LGBTIQ pride parade. However, CSOs and LGBTIQ activists criticise the 
authorities  for  shrinking  the  space  for  CSOs,  especially  those  working  on  sexual  and 
reproductive rights. Growing anti-LGBTIQ rhetoric, at times involving political and religious 
figures,  has  led  to  increased  intolerance  and  hate-speech  within  society.  Serious  efforts  are 
needed to enable LGBTIQ persons to enjoy their rights. 

Concerning procedural rights, the country remains partially aligned with the EU acquis. The 
Law  on  compensation  for  victims  of  violent  crime  was  adopted  by  Parliament  and  entered 
into force in May 2023.  

The country has a solid network providing primary and secondary free legal aid to those 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 
37 

 
 
Ministry of Justice. Increasing numbers of requests were 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. Most of all, the authorities need to revise the eligibility criteria 
for legal aid in criminal proceedings (for mandatory defence, defence of indigent persons and 
representation of the interests of victims of crime). The budget allocated for legal aid in 2022 
amounted  to  EUR 616 304,  while  the  budget  implemented  amounted  to  EUR 521 612  (a 
0.7% increase compared with 2021). 

The  country  is  not  yet  aligned  with  the  European  Protection  Order  Directive.  Further 
amendments  are  needed  to  the  Law  on  criminal  procedure  to  ensure  alignment  with  the 
Victims’ Rights Directive (for instance, regarding the individual assessment of victims). The 
Law  on  the  payment  of  monetary  compensation  to  victims  of  violent  crimes  entered  into 
force  in  May  2023.  This  includes  victims  of  trafficking  in  human  beings.  The  authorities 
should also  take concrete steps to  adopt legislation in  line with  the Directive on procedural 
safeguards for children who are suspects or accused persons in criminal proceedings. 

As regards the protection of minorities, the authorities continued to partially implement the 
national  strategy 
to  promote  a  multi-ethnic  society,  ‘One  Society  for  All  and 
Interculturalism’.  However,  further  efforts  are  still  needed  to  ensure  sufficient  political 
support, coordination between relevant authorities, adequate funding and other resources, in 
order  to  promote  equal  opportunities  and  to  improve  social  cohesion  in  the  country.  The 
Language Implementation Agency and the Agency for Community Rights Realisation remain 
under-staffed and under-funded. There is a need for the training and recruitment of translators 
and interpreters. Further efforts are needed to strengthen the financial independence of these 
two institutions, which will enhance their ability to resist political influence. Representation 
of non-majority communities at  local  level  remains  poor. The authorities should implement 
the  recommendation  issued  by  the  Advisory  Committee  of  the  Framework  Convention  on 
National  Minorities  to  ratify  the  European  Charter  for  Regional  or  Minority  Languages, 
signed  in  1996.  The  authorities  need  to  organise  a  public  consultation  and  top  adopt  in  a 
timely manner a new strategy building on the concept of ‘one society and interculturalism’, 
for 2023-2025. 

There  was  some  progress  with  inclusion  of  Roma.  With  the  2022-2030  Roma  inclusion 
strategy now in place, the action plans were adopted in October 2023 covering anti-gypsyism, 
education,  employment,  social  care,  healthcare,  housing,  civic  registration  and  culture.  An 
adviser  to  the  Prime  Minister  overseeing  Roma  inclusion  issues  was  also  appointed  as  the 
National  Roma  Contact  Point.  Enrolment  of  Roma  children  in  kindergartens  increased 
slightly by 1.25% from 420 last year to 462. In the 2022/23 school year, 4 429 Roma children 
enrolled in the first grade of primary education and 202 children were identified by CSOs as 
not registered. The annual dropout rate for Roma children in primary schools is still relatively 
high. According to the Ministry of Education and Science, 93.17% Roma pupils remained in 
school  after  the  academic  year  2021/22,  while  6.83%  left.  89.08%  of  Roma  children  of 
school-leaving  age  successfully  completed  their  secondary  education.  The  employment  of 
35 Roma  education  mediators  is  a  positive  step,  while  segregation  in  schools  remains  a 
significant issue. There are no systematic measures in place to prevent irregular attendance or 
to  reintegrate  children  who  have  left  education,  or  systematic  enforcement  of  compulsory 
education at primary and secondary level as required by the law. 

Access 
to  preventive  and  curative  health  services,  reducing  mortality,  addressing 
discrimination and unequal treatment by health professionals and women’s health remain key 
challenges  in  the  field  of  Roma  healthcare.  There  is  a  slight  decrease  in  the  number  of 
unemployed Roma. Measures were introduced to target Roma individuals with low levels of 

38 

 
 
education and promote their inclusion in the labour market. 969 Roma were included in the 
Youth Guarantee scheme. A geographic mapping of Roma settlements in five municipalities 
identified areas where housing interventions are needed. Most Roma settlements are still not 
covered by urban plans.  The enacted  amendments to  the Law on civil  registry, the Law on 
Registering the Place of Residence and the Law on ID pave the way to resolving all known 
cases  of  statelessness  and  fulfil  the  country’s  international  obligations.  They  guarantee  the 
right of registration for children born in the territory of North Macedonia within 45 days of 
birth,  regardless  of  the  status  of  their  parents.  Ending  statelessness  can  have  a  significant 
positive impact on the affected Roma and society as a whole. 

Cases  of  discrimination  and  police  brutality  based  on  Roma  ethnicity  were  recorded, 
particularly against young Roma, girls and Roma in detention. Other barriers such as a lack 
of  digital  skills  and  access  to  technology  continue  to  prevent  Roma  people  from  fully 
enjoying their rights and accessing most services, most of which are now digital (healthcare, 
education, employment, social protection etc.). Additional efforts and resources are required 
to speed up inclusion of Roma, to tackle anti-gypsyism, discrimination and educational and 
spatial segregation, and to reduce inequalities with the rest of the population. The government 
is working on implementing the priorities identified in the Poznan Declaration and on priority 
measures  identified  in  the  EU  Roma  bilateral  seminars.  Overall,  while  progress  has  been 
made, further efforts are needed to fully promote inclusion and protection of Roma and tackle 
anti-gypsyism  and  discrimination,  including  multiple  and  structural  discrimination,  against 
Roma. Systematic participation, empowerment and capacity building are required. 

Citizenship rights 

In  December  2012,  North  Macedonia  amended  the  law  allowing  the  acquisition  of 
citizenship for special economic interests. The  scheme could  pose  migratory and security 
risks,  especially  given  the  different  criteria  for  granting  citizenship.  In  line  with  the 
Commission’s  recommendation  on  this  matter  in  its  sixth  report  under  the  visa  suspension 
mechanism, North Macedonia should refrain from systematically granting citizenship based 
on  special  economic  interest  (investor  citizenship  schemes),  as  such  schemes  pose  risks  as 
regards  security,  money  laundering,  tax  evasion,  terrorist  financing,  corruption  and 
infiltration by organised crime, and are incompatible with the EU acquis.  

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.  Cooperation  in  the  field  of  counterterrorism,  and  the  prevention  and  countering  of 
violent extremism was further upgraded by the new arrangement for the implementation of a 
joint action plan on counterterrorism. The national strategies for countering terrorism (2023-
2027) and countering violent extremism (2023-2027) were adopted in May 2023, along with 
the related action plans. Registration of migrants needs to be done 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. A contingency plan to manage large migratory flows needs to be finalised 
and adopted. The Status Agreement for operational cooperation in border management with 
Frontex entered into force on 1 April 2023. This made it possible to launch a joint operation 

39 

 
 
with  the  deployment  of  officers  from  EU  Member  States  to  provide  support  with  border 
control  and  the  management  of  irregular  migration  and  cross-border  crime.  Last  year’s 
recommendations  were  only  partially  addressed,  and  remain  valid.  In  the  coming  year,  the 
country should in particular: 

→ continue to proactively reform the structures responsible for fighting organised crime with 
a focus on increasing operational capacity and cooperation; 

→ ensure effective implementation  and monitoring of the  national  strategies for  countering 
terrorism (2023-2027), countering violent extremism (2023-2027) and of the joint action plan 
on counterterrorism; 

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

Fight against organised crime 

North Macedonia has some level of preparation in the fight against organised crime. Some 
progress  was  made  in  the  area  of  the  fight  against  terrorism  and  violent  extremism.  The 
country continues to have a good level of operational cooperation with EU Members States, 
non-EU neighbouring countries, Europol and Eurojust. A new Law on money laundering and 
financing of terrorism entered into force in July 2022. Certain forms of crime, such as money 
laundering and financial crimes still need to be addressed more effectively. 

The capacity of the National Coordination Centre for the Fight against Organised Crime needs 
to  be  improved.  Coordination  remains  crucial  for  all  stakeholders  involved  in  fighting 
organised crime, including coordination between prosecutors and police.  

Most  of  the  recommendations  from  last  year  remain  valid.  In  the  coming  year,  North 
Macedonia should in particular: 

→  improve  its  track  record  on  investigations,  prosecutions  and  rendering  convictions  in 
organised crime and money laundering cases with a focus on confiscation of proceeds of 
crime; 

→  adopt and implement the necessary legislation for an Asset Recovery Office; 

→  strengthen  human  and  financial  capacities  of  the  law  enforcement  agencies  investigating 

organised and serious crimes, financial crimes and money laundering. 

Institutional set-up and legal alignment 

The number of police officers increased in 2022, reaching 347.6 per 100 000 inhabitants (330 
in 2021), which is higher than the EU average of 335.3/100 000 (Eurostat, 2019-2021). 

Key  institutions  in  the  fight  against  organised  crime  include  the  specialised  police  units 
within  the  Ministry  of  the  Interior,  which  have  jurisdiction  and  competence  over  different 
types of organised crime and financial investigations. Medium-term priorities and objectives 
for  the  development  of  the  police  force  are  determined  in  the  Ministry  of  the  Interior’s 
strategic plan for 2022-2024. In 2022, 47% of the planned activities were implemented. 

In  2018  and  2019,  North  Macedonia  comprehensively  reformed  its  intelligence  services  in 
line with the findings of the report by the Senior Experts’ Group on Systemic Rule of Law 
Issues. The former Bureau for Security and Counterintelligence (UBK) was replaced by the 
National  Security  Agency  (NSA)  which,  contrary  to  its  predecessor,  is  no  longer  under  the 
authority of the Ministry of the Interior and does not have police powers. The NSA is located 

40 

 
 
 
within  the  premises  of  the  Ministry  of  the  Interior,  which  is  against  international  standards 
and continues to be a matter of concern. 

The  Operational  and  Technical  Agency  can  be  authorised  by  a  court  order  to  monitor 
communications  as  part  of  a  criminal  investigation  or  in  the  interests  of  state  security  and 
defence or as part of monitoring of mobile operators. It does not yet have its own independent 
premises and is located in a building owned by one of national telecommunications operators. 
The Agency has modernised its technical systems and started to digitalise the procedure for 
obtaining court orders. The mandate of the Director of the OTA expired in September 2023, 
leading to a gap in the functioning of the agency until the appointment by the Parliament of a 
new director. 

The  National  Coordination  Centre  for  the  Fight  against  Organised  Crime  (NCCFOC)  is 
operational but, to ensure its proper functioning, permanent staff should be recruited to cover 
positions  currently  filled  by  temporary  staff.  A  database  for  better  data  management  and 
software  for  information  analysis  have  been  developed  and  are  expected  to  be  fully 
operational before the end of 2023. 

There  are  three  structures  with  a  role  in  conducting  financial  investigations:  the  Financial 
Police Office within the Ministry of the Interior, responsible for financial crimes under police 
jurisdiction; the Financial Intelligence Office within the Ministry of Finance, responsible for 
intelligence analysis related to money laundering and terrorism financing; and the Sector for 
Control  and  Investigation  within  the  Customs  Administration,  responsible  for  investigating 
crimes within its jurisdiction. 

The Asset Recovery Office is part of the Unit for International Legal Assistance in the Public 
Prosecutor’s Office. Though preparations have been underway since 2021, the Office, is not 
yet regulated by law. and functions on the basis of standard operational procedures. 

Both  the  Ministry  of  Defence  and  the  Ministry  of  the  Interior  have  responsibilities  for 
cybercrime  and  cybersecurity.  The  army  is  also  developing  capacity  for  cyber  defence  and 
cooperates  with  international  organisations  in  the  field  of  global  cyber  security  and  hybrid 
threats.  The  Ministry  of  the  Interior’s  Sector  for  Computer  Crime  and  Digital  Forensics 
carries out investigations into cybercrime, using digital forensics. 

Regarding the legal framework, the Criminal Code is regularly updated to stay in line with 
EU and international standards. Its scope has been extended to criminalise activities such as 
trafficking  in  human  beings,  online  child  pornography,  drug  trafficking,  computer  crime. 
More  recently,  provisions  were  added  to  bring  the  Criminal  Code  into  line  the  Council  of 
Europe’s Convention on Preventing and Combating Violence against Women and Domestic 
Violence. 

The country is a signatory to the ‘Convention on Cybercrime on Enhanced Cooperation and 
Disclosure  of  Electronic  Evidence’  (Budapest  Convention).  North  Macedonia  signed  the 
Convention’s  second  additional  protocol  in  May  2022,  but  it  has  not  yet  been  ratified  by 
Parliament. 

North  Macedonia  is  implementing  a  wide  range  of  strategic  documents  concerning 
organised crime and other forms of serious crime, based on the corresponding EU strategies. 
These include: a national strategy against human trafficking and irregular migration together, 
accompanied by an  action plan (2021-2025), a  national  strategy against children trafficking 
(2021-2025), a national drug strategy (2021-2025), a strategy for building capacity to conduct 
financial  investigations  and  confiscate  property,  with  action  plan  (2021-2023),  a  national 

41 

 
 
strategy  for  control  of  small  arms  and  light  weapons,  with  action  plan  (2022-2024),  and  a 
national strategy for preventing money laundering and terrorism financing (2021-2023). 

In line with Europol methodology and policy, in 2022, the Ministry of the Interior prepared 
and  presented  a  ‘national  serious  and  organised  crime  threat  assessment  (SOCTA)  2021’. 
Launched at the beginning of 2022, it defines the priorities in the fight against organised and 
serious crime. 

Concerning trafficking in human beings, in compliance with the recommendations from the 
Group of Experts on Action against Trafficking in Human Beings, in November 2022, a Law 
on state compensation for victims of violent  crime was adopted, also covering the crime of 
human  trafficking.  In  March  2023,  the  Ministry  of  the  Interior  and  the  State  Labour 
Inspectorate  signed  a  cooperation  memorandum  at  the  initiative  of  the  National  Anti-
trafficking Commission, to strengthen cooperation on prevention, detection and suppression 
of  trafficking  in  human  beings  for  the  purpose  of  labour  exploitation,  and  to  ensure  timely 
protection of victims of labour exploitation and child victims of all forms of exploitation. 

Concerning small arms and light weapons, national legislation is not yet harmonised with 
EU  directives  and  regulations.  After  the  adoption  of  the  Law  on  Development,  Production 
and  Trade  in  Military  Goods,  implementing  legislation  was  finalised  in  2022.  The  Law  on 
Weapons  of  North  Macedonia  is  partly  aligned  with  Directives  2021/555(EU)  and  still 
pending  the  alignment  with  Implementing  Directive  2019/68  on  marking  of  firearms  and 
Implementing Directive 2019/69 on technical specification of alarm and signal weapons. The 
responsible  authority  is  the  Ministry  of  Interior.  There  is  a  national  commission  for  the 
control  of  weapons,  that  cooperates  with  the  relevant  national  authorities  (ministries  of 
interior,  defence,  justice,  finance  (customs  administration),  foreign  affairs,  and  agency  for 
sized and confiscated property (for the destruction of weapons).  

In the framework of the actions in Western Balkans within the EU Action Plan on firearms 
trafficking,  which  correspond  with  the  goals  of  the  Regional  Roadmap  to  better  control 
SALW in Western Balkans, North Macedonia improved the investigation and record keeping 
of  firearms  capacities  and  made  some  progress  with  limited  destructions  of  the  confiscated 
firearms  and  ammunition  and  surplus  ammunition.  Several  activities  related  to  the 
implementation  of  the  Roadmap  continued  to  be  limited,  including  awareness  raising, 
outreach and education on the dangers and risks related to the misuse, illicit possession, and 
trafficking  of  firearms/SALW,  as  well  as  reduction  of  illicit  firearms  through  legalization, 
voluntary surrender and deactivation. 

Concerning  child  sexual  abuse,  the  Cybercrime  and  Digital  Forensics  Section  liaises  with 
the Interpol I-24/7 Child Sexual Exploitation-ICSE network. 

Implementation and enforcement capacity 

In 2022, 21 investigations on organised crime groups were initiated involving a total of 102 
persons (compared with 17 investigations in 2021); of these, 13 are still ongoing (compared 
with 11 in 2021) and 8 were closed in 2022 (six in 2021), of which 1 was transferred and 1 
dismissed.  Seizure  measures  were  applied  in  nine cases.  27  individuals  were  indicted,  and 
eight verdicts  were  reached,  resulting  in  prison  sentences  or  suspended  sentences  with 
probation.  The  external  oversight  mechanism  is  being  implemented.  Within  the  Public 
Prosecutor’s  Office,  the  Special  Department  for  investigation  and  prosecution  of  crimes 
committed  by  persons  with  police  powers  and  members  of  the  prison  police  has  only  two 
investigators.  Two  posts  are  vacant.  In  the  reporting  period,  the  Department  registered 
183 cases against 299 individuals (135 in 2021), 25 verdicts were reached / penalties handed 
down, eight cases were transferred, and 74 cases were dismissed. 

42 

 
 
The  NCCFOC  is  operational,  and  its  role  and  activities  increased  in  2022.  All  institutions 
participating in NCCFOC nominated their representatives in 2022. The Centre: facilitates the 
exchange of data and information among the affiliated institutions; shares information among 
institutions  on  a  ‘need-to-know’  basis;  coordinates  activities  among  institutions  in  cases 
where  more  than  one  received  a  request  about  a  natural  or  legal  person;  and  supports  the 
international exchange of information, especially between police forces. 

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

The  country  participates  in  international  police  cooperation  activities  through  the  main 
cooperation channels (INTERPOL, Europol and the South-Eastern Law Enforcement Centre 
(SELEC)). The level of cooperation and exchange of information with Europol is good and 
increased in 2022. North Macedonia is participating in Europol analysis projects in the field 
of organised and serious crime and combating terrorism. The Ministry also provided input for 
the development of Europol’s EU serious and organised crime threat  assessment (SOCTA). 
In 2022, the relevant authorities participated in activities forming part of Europol’s analysis 
project ‘Hydra’, on Islamic terrorism. 

The  National  Central  Bureau  (NCB)  INTERPOL  Skopje  is  working  on  expanding 
INTERPOL I-24/7 communication system. Connectivity has been provided with some of the 
databases available in I-24/7. The national authorities and NCB INTERPOL are working to 
expand access to other databases in that system. 

In 2022, 1 887 new cases were opened in the International Police Cooperation Sector (1 429 
at NCB INTERPOL, 254 at Europol, 151 at Liaison Officers, and 53 at SELEC). Most cases 
concern the illegal drug trade, illegal arms trade, financial and computer crime, violent crime, 
motor  vehicles,  irregular  migration  and  human  trafficking,  computer  crime  and  missing 
persons. 

Operational  international  police  cooperation  with  neighbouring  countries  includes  Albania, 
Serbia,  Greece  and  Bulgaria,  and  has  been  conducted  through  established  channels:  NCB 
INTERPOL, Europol National Units, and SELEC. 

North  Macedonia  is  participating  in  the  European  Multidisciplinary  Platform  against 
Criminal Threats (EMPACT). In 2022, the country participated in 26 operational actions, and 
was  co-leader  of  one  operational  action  (part  of  the  operational  action  plan  (OAP)  on 
firearms). In 2023, North Macedonia has substantially increased its participation in EMPACT 
and  is  involved  in  98 operational  actions.  It  is  co-leader  of  four operational  actions  (two as 
part of the OAP on firearms trafficking, 1 as part of the OAP on migrant smuggling and 1 as 
part of the OAP on cocaine, cannabis and heroin trafficking). North Macedonia continued to 
participate in EMPACT joint action days.  

Cooperation  with  CEPOL  has  been  based  on  a  Working  Arrangement  since  2017.  In 
accordance with  the EU  strategic training  needs  assessment, 27 specialised/resident training 
courses were developed by CEPOL, the EU agency for law enforcement training, and were 

43 

 
 
attended by 150 representatives from the Ministry of the Interior in 2022. Law enforcement 
officers  also  participated  in  the  exchange  programme  training  organised  by  CEPOL.  It  is 
recommended that the authorities of North Macedonia, with the assistance of CEPOL, design, 
prepare and organise targeted training to address the priority training topics at national level 
as  follows:  Counter  Terrorism:  Prevent;  Counter  Terrorism:  Protect;  Counter  Terrorism: 
Respond; Firearms trafficking; and Environmental crime. 
Since 2014, an intelligence-led policing model has been implemented in the Ministry of the 
Interior’s  Public  Security  Bureau.  The  Ministry is  now  able  to  detect  current  needs  and  set 
strategic priorities and activities for each year, for greater efficiency in fight against organised 
and serious crime. 

The Financial Intelligence Unit conducted four financial investigations against 44 individuals 
and four entities in 2022. A total of nine law enforcement officers were assigned to the unit. 
There is still a need for additional technical equipment and other material. Access to several 
databases  was  provided  and  negotiations  are  underway  to  provide  access  to  the  cadastral 
(property) register database. 

The  Financial  Police  Office  (FPO)  currently  has  five positions  for  investigators  occupied, 
with four still vacant. A standard operating procedure for conducting financial investigations 
was  adopted  in  July  2022.  It  conducted  25 financial  investigations  in  2022.  The  FPO  has 
access  to  several  databases  of  other  institutions.  An  additional  database  is  currently  being 
developed  which  connects  the  FPO  database  to  those  of  the  Customs  Office,  the  Public 
Revenue Department and the Ministry of the Interior. 

The Sector for Control and Investigation within the Customs Administration initiated a total 
of 14 financial investigations against 22 individuals and nine legal entities in 2022. All eight 
available positions for executors in the service have been filled. The Customs Administration 
adopted a procedure for financial investigations in July 2022. 

In  May  2023,  the  Council  of  Europe's  Committee  of  Experts  on  the  Evaluation  of  Anti-
Money Laundering Measures and the Financing of Terrorism (MONEYVAL) discussed and 
approved a report regarding the country's technical compliance and effective implementation 
of  the  international  anti-money  laundering  and  combating  the  financing  of  terrorism 
(AML/CFT)  standards,  in  accordance  with  the  2013  Financial  Action  Task  Force  (FATF) 
methodology. According to the conclusions set out in the evaluation report published in July 
2023,  the  legal  framework  has  improved,  but  the  authorities  should  further  strengthen 
measures  to  combat  money  laundering,  the  financing  of  terrorism  and  proliferation,  in 
particular through investigations and prosecutions (see chapter 4). 

The Law on prevention of money laundering and financing of terrorism entered into force in 
July  2022.  The  Law  aims  to  align  with  EU  Directive  2018/843,  the  fifth  Directive  on  the 
prevention  of  the  use  of  the  financial  system  for  the  purposes  of  money  laundering  and 
the  revised  Financial  Action  Task  Force 
financing  of 
recommendations.  Additional  implementing  laws  deriving from  the  Law  need to  be  drafted 
and adopted. North Macedonia needs to align its legislation with Directive (EU) 2018/1673 
on combating money laundering by criminal law. 

terrorism  and 

to  address 

In  2022,  the  authorities  managed  to  freeze  assets  worth  around  EUR 40 million,  including 
cash,  land,  business  premises,  apartments,  shares  and  securities.  They  confiscated  assets 
worth some EUR 28 million. 

North  Macedonia  is  currently  implementing  its  national  strategy  against  human  trafficking 
and illegal migration. This is accompanied by an action plan and a national strategy against 
44 

 
 
trafficking in children – both covering 2021-2025. The Group of Experts on Action against 
Trafficking  in  Human  Beings  published  its  third-round  evaluation  report  on  North 
Macedonia. Recommendations were made to the authorities to address gaps and weaknesses 
in the legal framework and in other areas. To further align with the EU acquis, amendments 
to  the  legislative  framework  should  be  adopted,  including  on  the  referral  to  the  Centre  for 
Victims  of  Trafficking  in  Human  Beings  of  foreign  victims  of  trafficking  in  human  beings 
who cooperate with the authorities. Adequate avenues for compensation for victims should be 
provided. 

In 2022, 9 victims were identified as part of investigations and prosecutions of perpetrators of 
trafficking  in  human  beings.  Of  these,  8 were  victims  of  internal  trafficking  while  1 was 
exploited  abroad  (in  a  neighbouring  country).  As  a  result  of  the  investigations,  6 criminal 
charges were brought against 19 individuals for alleged trafficking in human beings offences. 

In  2022,  the  Ministry  of  the  Interior  filed  charges  against  210 individuals,  accused  of 
committing  199 crimes  involving  small  arms  and  light  weapons.  Moreover,  139 weapons 
were seized in 2022. Under the supervision of the State Commission for destroying weapons, 
270 seized weapons were destroyed in February 2023. 

Concerning  cybercrime,  in  2022,  the  authorities  registered  287 criminal  acts  constituting 
computer  crimes  under  the  Criminal  Code,  committed  by  220 perpetrators.  The  most 
common  computer  crimes  are:  ‘damage  and  unauthorised  entry  into  a  computer  system’, 
‘spreading  xenophobic  material  via  information  systems’,  ‘processing  and  use  of  a  false 
payment card’, ‘endangering safety’. 

Regarding online child sexual exploitation, the number of registered crimes in 2022 was 14. 
Of  the  reported  crimes,  eight  were  solved  and  eight perpetrators  were  identified.  The 
remaining  cases  are  being  investigated.  There  were  seven reported  cyber-attacks  against 
public institutions  and  public  infrastructure in  2022 and  11  against private institutions.  The 
Ministry  of  the  Interior’s  Sector  for  Computer  Crime  and  Digital  Forensics  participated 
actively in EMPACT. 

The Central Register has kept a register of beneficial owners since January 2021, but not all 
entities that are required to have provided the necessary information. 

In accordance with  the Law on  payment services  and  payment  systems,  a  single  register of 
accounts was set up and maintained by the Central Register. Infrastructure for the register is 
currently being constructed, and technical specifications have been defined for the software 
and  its  main  components.  It  is  expected  that  the  register  will  be  operational  by  the  second 
quarter of 2024. 

In the reporting period, witness protection measures were applied in 4 cases. 

Cooperation in the field of drugs 

Institutional set-up and legal alignment 

The  national  strategy  against  drugs  covers  the  period  2021-2025  and  is  being  implemented 
through a specific action plan.  The  National  Drugs Observatory was set  up in  2007,  but its 
operational capacity remains limited. It lacks resources to cope with its daily drug monitoring 
tasks.  There  is  still  no  national  early  warning  system  capable  of  connecting  with  relevant 
national bodies to enable fast exchange of information about illegal manufacturing and illicit 
trade on a national and international level. 

45 

 
 
The  European  Monitoring  Centre  for  Drugs  and  Drug  Addiction  has  had  technical 
cooperation  arrangements  with  North  Macedonia  since  2007.  The  focal  point  for  this 
cooperation is the Ministry of Health, which also cooperates with the International Narcotics 
Control Board, and United Nations Office on Drugs and Crime. 

National legislation on drugs, psychotropic substances and precursors does not comply with 
the EU acquis or international standards.  

Implementation and enforcement capacity 

There was a positive trend in the prevention of drug trafficking. A total of 749 crimes were 
detected in 2022 (compared with 701 in 2021), leading to criminal prosecution against 9 legal 
entities and 853 perpetrators (840 in 2021). Police action broke up 12 organised groups (10 in 
2021) with 46 members (36 in 2021). 

In  2022,  the  authorities  seized  2 561 kg  of  marijuana  and  8 723 kg  of  cannabis  stems 
(18 301 kg for both in 2021) from legal entities with licences for the cultivation of cannabis 
for  medicinal  purposes,  which  raises  concerns  about  deficiencies  in  the  system  for  legal 
cultivation. Law enforcement authorities need to gain tighter control over those entities and 
their activities, to prevent illegal activity and take effective measures against infringements. 

Regarding  international  police  cooperation,  throughout  2022  the  Ministry  of  the  Interior 
received  62 pieces  of  information  concerning  the  illegal  trafficking  of  drugs  through 
INTERPOL from EU and non-EU countries. The relevant police structures also maintained a 
good  level  of  cooperation  with  Europol,  with  481 messages  concerning  ‘illicit  drug 
trafficking’  exchanged  through  Europol’s  secure  information  exchange  network  application 
(SIENA) in 2022. In addition, 18 cases of illicit drug trafficking were opened as a result of 
exchanges of information through SELEC. 

Harm-reduction  activities,  one  of  the  main  pillars  of  the  country’s  drug  policy,  are 
implemented by local CSOs through a nationwide network of national focal points. 

Preparatory work was done on the register of drug users by the Institute for Public Health in 
cooperation with the Ministry of the Interior. The register now needs to be finalised. 

In  February  2023,  the  Agency  for  the  Management  of  Confiscated  Property  destroyed 
1 400 kg  of  confiscated  drugs  and  illegal  psychotropic  substances  following  a  final  court 
decision. 

Cooperation  with  Eurojust  continues.  Between  April  2022  and  February  2023,  North 
Macedonia was involved in 20 new cases at Eurojust – 17 as requested country and three as 
requesting  country.  Most  cases  related  to  money  laundering,  swindling  or  fraud.  North 
Macedonia’s acting Eurojust Liaison Prosecutor was actively engaged in facilitating ongoing 
investigations. 

Fight against terrorism 

Institutional set-up and legal alignment 

North  Macedonia  has  a  national  committee  for  countering  violent  extremism  and 
counterterrorism, but the draft rulebook for its work needs to be adopted. 

North  Macedonia’s  legislative  framework  is  broadly  aligned  with  the  EU  acquis  and 
international counterterrorism instruments and is sufficient for the prosecution of individuals 
suspected of committing or aiding terrorist activities or participating in foreign wars. 

46 

 
 
National  strategies  for  countering  terrorism  (2023-2027)  and  countering  violent  extremism 
(2023-2027) were adopted in May 2023. These are  based on the four pillars of the UN and 
EU’s global strategies: prevention, protection, prosecution/enforcement and response. 

The  country  continues  to  implement  its  national  plan  for  the  re-integration,  re-socialisation 
and rehabilitation of returnees from foreign armies and members of their families. A variety 
of  activities  are  implemented  daily  in  the  work  with  foreign  terrorist  fighters  and  their 
families. 

In  December  2022,  the  European  Commission  and  North  Macedonia’s  Ministry  of  the 
Interior  signed  a  new  arrangement  for  the  implementation  of  a  joint  action  plan  on 
counterterrorism  for  the  Western  Balkans.  The  arrangement  upgrades  cooperation  on 
counterterrorism  and  action  to  prevent  /  counter  violent  extremism.  It  requires  national 
authorities to submit interim reports twice a year. 

Implementation and enforcement capacity 

North Macedonia submitted in July 2023 a first progress report on the implementation of the 
bilateral  arrangement.  for  the  implementation  of  the  Joint  Action  Plan  on  Counterterrorism 
for the Western Balkans. Implementation of the newly signed counterterrorism arrangement 
began with some priority activities, undertaken in accordance with the schedule. 

At  local  level,  measures  to  prevent  violent  extremism  and  terrorism  continue  to  be 
implemented  by  local  councils  for  prevention,  action  teams  in  community,  and  local 
multidisciplinary teams. Two additional local action teams were set up in November 2022 in 
Prilep  and  Struga.  Local  multidisciplinary  teams  now  operate  in  9 municipalities  –  Skopje, 
Kumanovo, Gostivar, Tetovo, Kicevo, Ohrid, Struga, Stip and Prilep – to provide support for 
returnees  and  their  families.  These  teams  work  in  coordination  with  social  service  centres. 
Greater  clarity  is  needed  around  the  division  of  powers,  tasks  and  responsibilities  between 
local  and  central  level,  for  better  cooperation  on  prevention  and  countering  of  violent 
extremism. The state needs to adopt additional legal provisions to legitimise and regulate the 
activities of local-level bodies. 

The  practice  of  handing  down  light  sentences  for  terrorism-related  offences  remains  a 
challenge  for  prevention  efforts,  and  more  effective  follow-up  is  required  for  convicted 
foreign terrorist fighters after they are released from prison. 

Radicalisation  in  prisons  remains  a  concern  despite  the  existence  of  a  strategy  on  the 
penitentiary system  (2021-2025) which  includes  provides  measures against radicalisation in 
prisons.  Online  radicalisation  should  be  addressed  effectively,  which  requires  better 
equipment and training, and human capacity building. 

No foreign terrorist fighters were repatriated in the reporting period. In 2022, five individuals 
were  indicted  for  allegedly  perpetrating  five separate  crimes  involving  ‘terrorism’  and 
‘participation in foreign paramilitary or para-police formations’. In 2022, 3 cases resulted in 
convictions  for  the  crime  of  ‘terrorism’,  of  which  two were  final  and  one under  appeal 
procedure. In comparison, court verdicts were passed against four repatriated foreign terrorist 
fighters and one person was indicted for terrorism in 2021. 

In 2022, the sector dealing with the fight against terrorism, violent extremism and radicalism 
located  within  the  Ministry  of  Interior  participated  in  Europol’s  analytical  projects  on  the 
fight against terrorism and financing for terrorism. A total of 387 messages were exchanged 
with  partner  services  from  other  countries,  through  SIENA,  Europol’s  counterterrorism 
platform. 

47 

 
 
The  Financial  Intelligence  Office  updated  indicators  for  the  recognition  of  suspicious 
transactions  potentially  linked  to  the  financing  of  terrorism  or  proliferation  financing.  In 
2022, a number of strategic analyses were adopted by the Head of the Financial Intelligence 
Office,  such  as  the  strategic  analysis  for  proliferation  finance,  a  strategic  analysis  for 
transactions  through  fast  money  transfer  services,  and  a  manual  to  facilitate  the  use  of 
practical indicators for identifying suspicious financial transactions. 

A memorandum for cooperation, coordination and exchange of information for effective and 
efficient application of the Law on restrictive measures was signed in September 2022 by the 
Minister of Interior, the Minister of Foreign Affairs, the Director of the Intelligence Agency, 
the  Director  of  the  Financial  Intelligence  Office,  the  Director  of  the  Agency  for  National 
Security  and  the  Public  Prosecutor.  Financial  restrictive  measures  were  introduced  for 
15 individuals  who  participated  in  foreign  armies,  police,  paramilitary  or  para-police 
formations outside North Macedonia. 

Additional multidisciplinary teams were set up within the state prison system to monitor the 
behaviour of inmates convicted of terrorism. 

Pre-release  standard  operating  procedures  and  post-penal  assistance  were  introduced  for 
radicalised convicts. 

Judicial cooperation in civil and criminal matters 

Progress regarding the legal framework for cooperation in civil and commercial matters was 
limited.  North  Macedonia  should  ratify  the  2005  Hague  Choice  of  Court  Convention, 
the   1996  Hague  Child  Protection  Convention,  the  2007  Hague  Child  Support  Convention 
and  its  Protocol  on  Applicable  law,  which  have  been  already  signed.  Furthermore,  the 
country  should  take  the  necessary  steps  to  ratify  the  2019 Hague  Convention  on  the 
Recognition  and  Enforcement  of  Foreign  Judgments  in  Civil  or  Commercial  Matters  (the 
‘Hague Judgments Convention’). 

The Ministry of Justice’s Criminal Department is currently understaffed, with just a head of 
department and four civil servants, out of a planned seven. 

In  2022,  there  were  789 incoming  and  220 outgoing  requests  for  mutual  legal  assistance  in 
civil  matters  (compared  with  429 incoming  and  141 outgoing  in  2021).  The  requests  are 
forwarded to the relevant authority within seven days. 

In 2022, there were 1 147 incoming and 824 outgoing requests for mutual legal assistance in 
criminal  matters  (compared  with  856 incoming  and  233 outgoing  requests  in  2021).  These 
cases have not been fully processed and the Ministry of Justice does not have accurate data 
on the number of ongoing procedures. 

Cooperation  with  Eurojust  continues.  The  Ministry  of  Justice  issued  Rules  on  cooperation 
between the State PPO,  the Ministry of Justice and Eurojust. These Rules are based on the 
2021 Law on international  legal  cooperation in  criminal  matters. North  Macedonia’s acting 
Eurojust Liaison Prosecutor was actively engaged in facilitating ongoing investigations. The 
procedure  for  selecting  a  permanent  Eurojust  Liaison  Prosecutor,  upon  a  call  published  in 
December 2022, is ongoing.  

In  October  2022,  the  European  Public  Prosecutor’s  Office  and  North  Macedonia’s  State 
Public Prosecutor’s Office concluded a working arrangement. 

48 

 
 
Legal and irregular migration 

Institutional set-up and legal alignment 

The  legal  framework  for  migration  is  largely  in  line  with  EU  standards.  The  state  of  crisis 
declared  at  the  country’s  borders  was  further  extended  until  the  end  of  December  2023, 
allowing for the continued deployment of the army. 

The Ministry of the Interior is the main operator in the field of migration. 

North  Macedonia  has  a  series  of  strategic  documents  in  place  on  migration:  the  2021-2025 
national  strategy  for  integrated  border  management  with  an  action  plan  for  implementation 
(2022-2025);  the  resolution  on  migration  policy  for  2021-2025;  the  2021  migration  profile 
and the 2019-2023 national strategy for cooperation with the diaspora. The new strategy for 
the integration of refugees and foreigners has been pending adoption since September 2021. 
A contingency plan to manage large migratory flows still needs to be finalised and adopted. 

North  Macedonia  participates  in  the  regional  Anti-Smuggling  Operational  Partnership  with 
the  Western  Balkans  launched  in  November  2022  to  support  law  enforcement  and  judicial 
cooperation  against  criminal  smuggling  networks  and  to  increase  border  management 
capacities. 

Implementation and enforcement capacity 

The country continued to  play an active role in  the management of mixed migration flows. 
Further  efforts  were made  to  ensure basic living  conditions  and services  for all migrants  in 
North  Macedonia.  However,  there  is  a  need  to  enhance  institutional  and  administrative 
capacities  for  all  aspects  of  migration  management  by  increasing  the  number  of  employees 
and by providing additional material and technical resources. As of April 2023, Frontex has 
been deployed and has provided operational support on the country’s southern border. 

The  strategic  framework  should  be  further  strengthened,  particularly  on  implementation  of 
support  measures.  While  registration  of  migrants  resumed  in  2021,  the  lack  of  adequate 
protection-sensitive  profiling  needs  addressing  as  a  priority.  Better,  more  systematic 
registration and protection-sensitive profiling is required. The fragmentation of tasks between 
the multiple institutions dealing with migration makes migration management less effective. 
Implementation of the in-depth assessment (masterplan) for North Macedonia developed by 
Frontex last year is still pending. 

The  readmission  agreements  and  implementing  protocols  signed  with  eight  EU  Member 
States  continue  to  be  implemented.  Four  additional  agreements  are  under  negotiation.  In 
addition, North Macedonia has bilateral readmission agreements with eight non-EU countries 
(six  further  agreements  are  being  negotiated).  Cooperation  with  neighbouring  countries 
continues to be satisfactory. However, there is room for more cross-border cooperation with 
neighbouring countries in implementing returns  and addressing trafficking in human beings 
and smuggling of migrants. 

irregular  movements 

through  North  Macedonia 

The  number  of 
increased,  with 
27 391 irregular  arrivals  in  2022  compared  to  20 874  in  2021.  Most  of  these  people  were 
travelling  from  Greece  towards  Serbia.  Nationals  of  Syria  (11 018),  Pakistan  (5 594)  and 
Morocco (2 541)  constituted  the largest  groups,  most of whom were  single males.  Irregular 
migrants in transit remain targets for organised criminal groups engaged in people smuggling, 
who often extort money and abuse the migrants in various ways. A new phenomenon in the 
Western Balkans is the misuse of North Macedonia´s visa-free regime by individuals coming 

49 

 
 
from  Türkiye,  Tunisia,  India,  Burundi  and  China,  among  others.  North  Macedonia  re-
introduced visa requirements for nationals of Azerbaijan, Botswana and Cuba. 

In  2022,  107 cases  of  smuggling  were  detected,  involving  1 454 migrants  (compared  with 
64 cases  involving  815 migrants  in  2021  –  an  increase  of  67.2%  and  almost  80% 
respectively).  The  number  of  migrants  smuggled  remained  high  and  combating  smuggling 
networks remains a priority. 

Regular reception capacity was unchanged and is appropriate to current needs. The arbitrary 
detention  of  persons  apprehended  in  irregular  movements  for  the  purpose  of  taking 
statements  as  evidence  before  the  Criminal  Court  remains  an  issue  of  concern.  The 
percentage  of  asylum  applications  registered  at  the  reception  centre  for  foreigners  in  Gazi 
Baba significantly increased to 62.5% in the first quarter of 2023, from just 8% in 2022. 

Since the attempt to build a new EU-funded reception centre for foreigners was blocked by a 
government  decision  in  October  2021,  no  improvements  have  been  made  in  the  existing 
reception  centre,  where  living  conditions  are  poor  and  basic  rights  are  not  respected.  The 
National  Preventive  Mechanism  within  the  Ombudsman  repeatedly  pointed  out  that  this 
facility does not  meet  the  required  standards  for  hosting persons with  restricted freedom  of 
movement.  The  detainees  do  not  receive  the  information  about  legal  remedies  they  would 
need to fully understand their legal status or the length of detention. 

Two  temporary  transit  centres  providing  short-term  housing  remain  operational  (Vinojug 
capable  of  housing  1 500 persons  and  Tabanovce  with  a  capacity  of  500).  However,  both 
transit  centres  are  unsuitable  for  longer  stays  and  the  legal  status  of  both  centres  breaches 
international standards. The lack of legal oversight over migrants’ freedom of movement in 
the Vinojug transit centre is also a major issue. 

the 

temporarily  hosted 

summer  of  2021,  North  Macedonia  has 

some 
Since 
791 evacuees/refugees from Afghanistan. By September 2023, 674 had been resettled. Since 
March 2022, North Macedonia has been hosting refugees from Ukraine. By September 2023, 
67  151  Ukrainians  have  arrived  in  North  Macedonia,  48  807  of  which  left  the  country.  By 
June  2023,  405 Ukrainians  had  received  temporary  residence  in  North  Macedonia  on 
humanitarian grounds. Under the Law on foreigners, temporary residence means the right to 
legally reside in the country for 1 year with the possibility of extension. 
There  are  235 Roma,  Askhali  and  Egyptian  individuals  from  Kosovo*  in  the  country, 
including  11  with  refugee  status,  64  under  subsidiary  protection  and  approximately  160 
whose protection status has ended. The individuals remain in a vulnerable situation due to the 
lack of legal status and insufficient access to basic rights. 

In  2022,  a  total  of  nine persons  were  assisted  with  voluntary  returns  to  their  countries  of 
origin within the assisted voluntary return and reintegration programme. 

Asylum 

Institutional set-up and legal alignment 

The  asylum  sector  in  the  Ministry  of  the  Interior  is  the  authority  responsible  for  asylum 
procedures. The Law on international and temporary protection is largely aligned with the EU 
acquis. However, efforts are still needed to improve information and counselling in detention 
facilities and at border crossings. Efforts are also needed to improve personal interview and 
border  procedures.  Further  efforts  are  needed  to  improve  working  rights  of  applicants  for 

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

50 

 
 
 
international  protection,  and  access  to  a  personal  identification  number  so  they  can  work, 
open  a  bank  account  and  manage  property.  Furthermore,  there  is  a  need  for  the  current 
legislation to provide alternatives to detention for  persons involved in irregular movements. 
Further  efforts  are  required  to  improve  delays  in  family  reunification  for  persons  under 
subsidiary  protection,  particularly  for  unaccompanied  minors.  Delays  can  be  counter  to  the 
principle of the best interest of the child. 

Under the Law on foreigners, persons who enjoy international protection can be granted long-
term  residence.  However,  they  must  still  present  proof  of  regular  income  and  a  registered 
place of residence to benefit from this provision. Given the vulnerability of some applicants, 
notably Roma people from Kosovo under subsidiary protection, there is a risk that the rights 
under  this  provision  remain  theoretical,  without  practical  implementation.  The  existing 
database on foreigners still needs to be upgraded with a new asylum module to provide a case 
management tool for processing asylum claims. There is no backlog of asylum cases. Most 
cases are discontinued due to the high rate of claim abandonment. 

Implementation and enforcement capacity 

Implementation of asylum procedures is not fully aligned with the EU acquis. Developing the 
asylum  authorities’  administrative  capacity  remains  a  challenge,  particularly  as  regards  the 
recruitment and retention of highly qualified and dedicated staff, which is a prerequisite for 
high-quality  administrative  processing  of  asylum  claims.  The  government  has  not  invested 
enough in improving the asylum system, for example by through funding, technical expertise 
and staff to fill specific roles. 

There  is  no  problem  with  access  to  the  asylum  procedure  and  asylum  claims  are  promptly 
registered  and  processed.  However,  the  quality  and  speed  of  asylum  decisions  remains  of 
concern.  Most  of  those  granted  subsidiary  protection  are  vulnerable  persons  and 
unaccompanied  minors.  Decisions  are  based  on  humanitarian  needs  but  without  proper 
consideration of the merits of the claim. The overall length of the entire asylum procedure is 
unreasonable; it may last for several years from initial registration of an asylum claim. 

The  Administrative  Court  and  the  High  Administrative  Court  take  decisions  on  procedural 
grounds  rather  than  on  the  merits  of  individual  asylum  claims.  The  cases  returned  to  the 
administrative authority  remain unchanged despite court rulings.  This  lengthens the asylum 
procedure,  without  providing  asylum-seekers  with  an  effective  remedy.  The  practice 
continued  of  holding  in-person  hearings  with  attorneys  and  asylum  officials  present  but 
without the asylum-seekers themselves. Although guaranteed by law, no procedure has been 
implemented to adequately cater for persons with specific needs. Furthermore, decisions on 
expulsion are made with no quality assessment, and without the necessary steps being taken 
to ensure that returning asylum-seekers will not be subjected to persecution in their country 
of destination. 

A  lack  of  personal  identification  numbers  for  asylum-seekers  and  persons  under  temporary 
protection remains unaddressed and is a critical gap in the legal protection of rights. 

Further  efforts  are  needed  to  ensure  that  the  children  of  asylum-seekers  are  provided  with 
proper educational services in accordance with the Law on primary education. There is a lack 
of national data on refugee and asylum-seeker children in primary and secondary education. 

In 2022, 168 asylum applications were submitted (compared with 100 applications in 2021), 
with most applicants coming from Syria (49%), Morocco (10%), Afghanistan (6%), Türkiye 
(5%) and Iraq (5%). The registration of asylum applications is not integrated, with different 
entities  within  the  Ministry  of  the  Interior  being  involved.  These  include  police  stations 

51 

 
 
where  applications  are first registered, reception  centres  and the Sector for Asylum. By the 
end  of  2022,  the  Sector  for  Asylum  had  conducted  14 asylum  interviews  (mostly  online), 
rejected  20 asylum  applications,  and  granted  no  form  of  international  protection  (refugee 
status has not been granted to anyone since 2016), while most decisions were written off due 
to  high  rates  of  absconding.  In  the  first  quarter  of  2023,  71 asylum  applications  were 
registered,  a  500%  increase  compared  to  the  same  period  in  2022.  Most  of  the  applicants 
came from Afghanistan, the Democratic Republic of the Congo, Pakistan and Syria. 

The  roadmap  for  cooperation  agreed  on  between  the  European  Union  Agency  for  Asylum 
and North Macedonia  for the  period October 2020–September 2022 remained an important 
tool  for:  strengthening  the  asylum  system,  particularly  for  persons  with  special  needs  and 
unaccompanied  minors;  strengthening  the  training  system  on  asylum  and  reception; 
increasing  the  quality  of  asylum  decisions;  and  strengthening  the  reception  system  for 
vulnerable migrants and unaccompanied minors. 

Visa policy 

The  national  visa  regime  is  largely  aligned  with  that  of  the  EU.  To  date,  only  Türkiye  is 
accessible  without  visa  for  North  Macedonia  but  not  for  the  EU.  In  January  2023,  North 
Macedonia  reintroduced  a  visa  requirement  for  nationals  of  Botswana  and  Cuba.  The 
decision  to  temporarily  allow  nationals  of  Azerbaijan  to  enter  North  Macedonia  without  a 
visa expired in March 2023 and was not extended. The Commission’s sixth report under the 
Visa  Suspension  Mechanism  of  20237  concluded  that  North  Macedonia  continued  taking 
action  to  address  the  Commission’s  previous  recommendations  and  recommended  North 
Macedonia to continue this good progress. North Macedonia has a high level of compliance 
with  International  Civilian  Aviation  Organisation  standards.  The  visa  sticker  meets  the  EU 
requirements. 

Schengen and external borders 

Institutional set-up and legal alignment 

The  legislative  framework  for  the  management  of  North  Macedonia’s  external  borders  is 
largely  aligned  with  the  EU  acquis.  The  Department  of  Border  Affairs  and  Migration  is  a 
specialised  unit  within  the  Ministry  of  the  Interior.  The  country  has  eight  border  crossing 
points.  The  border  police  are  structured  into  four  regional  centres,  within  which  police 
stations for border surveillance and border checks operate. North Macedonia has a National 
Coordination Centre for Border Management. 

A new integrated border management strategy for 2021-2025 was adopted in 2022. It aims to 
achieve  safe  and  open  borders  that  allow  fast  and  secure  transit  of  passengers  and  goods, 
while enabling effective measure to be taken against irregular cross-border activities. 

Implementation and enforcement capacity 

A  Status  Agreement  for  operational  cooperation  in  border  management  with  Frontex  was 
signed in October 2022, including a Macedonian language version. Following the entry into 
force of the status agreement on 1 April 2023, a North Macedonia 2023 joint operation was 
launched  on  19 April  with  the  deployment  of  110 officers  to  provide  support  for  border 
control  and  the  management  of  irregular  migration  and  cross-border  crime  along  the  entire 
border section with Greece. Reinforcing controls along North Macedonia’s borders will help 
increase security at the EU’s external borders. 

7 COM(2023) 730 final 

52 

 
 
 
Cooperation with the border services of Albania, Bulgaria, Kosovo8and Serbia is carried out 
in  accordance  with  the  Schengen  catalogue  of  recommendations  and  best  practice.  The 
following  agreements  were  signed  and  are  being  implemented:  Agreement  on  freedom  of 
movement  with  identity cards  (Western  Balkans);  Agreement  on  regulation  of  local  traffic; 
and  Agreement  on  systematic  prosecution  of  perpetrators  of  crimes.  In  2022,  a  total  of 
786 meetings and other contacts at all levels were held with these countries’ border services 
(compared  with  708  in  2021);  355 mixed  patrols  were  carried  out  (compared  with  96  in 
2021);  and  1 247 information  exchanges  took  place  through  the  Joint  Contact  Centres 
(compared with 1 988 in 2021). There are no mixed patrols with Greece and no Joint Contact 
Centre has yet been set up. 

In  2022,  85 disciplinary  procedures  were  conducted  against  police  officers  from  the 
Department  for Border Affairs and Migration and from  the four  regional  centres for  border 
affairs.  These  procedures  resulted  in  54 fines,  11 dismissal  decisions  and  one  warning; 
19 procedures  were  terminated.  In  2022,  an  investigative  procedure  was  launched  in  a  case 
established  in  2021  against  11 persons  for  criminal  offences  under  Articles 353  (abuse  of 
official position and authorisation) and 357 (receiving a bribe) of the Criminal Code, and in 
March  2023,  an  indictment  was  filed  against  five persons  for  the  crimes  of  criminal 
association and of receiving bribes and against one person for the crime of receiving a bribe. 

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

53 

 
 
 
 
 
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. 

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 2022, the economy was badly hit by the fallout 
from Russia’s war of aggression against Ukraine, which significantly slowed down its post-
COVID recovery. The government supported households and businesses through large-scale 
energy  subsidies,  tax  reductions  and  targeted  direct  income  support.  Owing  to  an  inflation-
driven boost to tax income and under-execution of several expenditure categories, the general 
government  deficit  remained  below  the  revised  target.  Capital  expenditure  was  raised 
significantly, but still fell short of the revised plan. The public debt ratio dropped, but remains 
significantly above pre-COVID-19 levels. The central bank tightened its policy stance further 
in view of still elevated inflationary pressures, which began to subside gradually towards the 
end  of  2022  and  beyond.  The  current  account  deficit  rose  substantially  as  energy  import 
prices surged, but external financing needs were met with the help of market-based and IMF 
borrowing. 

A new Organic Budget Law (OBL) provides for the introduction of fiscal rules and a fiscal 
council, considerably strengthening fiscal sustainability. However, progress has been slow in 
implementing  wider-ranging  measures  to  improve  the  management  of  public  investment, 
vital for underpinning the government’s plans for a sizeable increase in capital expenditure. 

54 

202020212022North Macedonia - Key economic figuresGDP per capita (% of EU-27 in PPS)1)37384242Real GDP growth 3.0-4.73.92.1Economic activity rate of the population aged 15-64 (%), total65.365.566.866.4      female52.354.055.154.3      male77.876.778.478.4Unemployment rate of the population aged 15-64 (%), total2)23.216.615.814.5      female22.916.113.812.6      male23.416.916.915.9Employment of the population aged 15-64 (annual growth %)2)2.7-0.5n.a.n.a.Nominal wages (annual growth %)3.28.35.711.1Consumer price index (annual growth %)0.51.23.214.1Exchange rate against EUR61.5761.6761.6361.62Current account balance (% of GDP)-1.4-2.9-3.1-6.0Net foreign direct investment, FDI (% of GDP)3.11.43.35.2General government balance (% of GDP)-2.8-8.0-5.4-4.5General government debt (% of GDP)39.451.951.851.1Notes: 1) Eurostat2) From Q1-2022, the Labour Force Survey is based on the results of the 2021 population census,     restricting comparability with previous year's data. In a first step, the Statistical Office has recently     revised 2021 data based on census data.Source: national sources2014-19 average 
 
 
The banking  sector was  resilient throughout the crises, and financial stability was bolstered 
by  progress  on  some  key  legislation.  The  labour  market  showed  some  improvement,  but 
structural  problems  persist,  including  high  youth  and  long-term  unemployment  rates  and  a 
large gender gap. The business environment continued to be impeded by the large size of the 
informal  economy,  slow  progress  in  streamlining  parafiscal  charges  and  an  opaque  and 
inefficient State aid regime. 

Last  year’s  recommendations  were  only  partly  implemented  and  remain  partially  valid.  To 
improve the functioning of the market economy, North Macedonia should in particular: 

→  provide targeted and temporary support to vulnerable households and firms to cushion the 
impact of the energy crisis, if needed, and at the same time start to phase out untargeted 
subsidies to the energy sector; 

→  adopt and submit to Parliament the next set of revenue-enhancing measures, in line with 

the tax system reform strategy; 

→  accelerate implementation of the public investment management action plan, in particular 
by  ensuring  the  new  Department  for  Public  Investment  Management  in  the  Ministry  of 
Finance becomes fully staffed and operational; 

→  strengthen  access  to  active  labour  market  measures,  in  particular  for  the  low-skilled 

unemployed and people in vulnerable situations. 

Economic governance 

The  government  provided  fiscal  support  to  help  the  economy  cope  with  rising  price 
pressures,  but  progress  on  important  reforms  was  slow.  While  phasing  out  the  broad-
based pandemic-related support measures adopted in 2020 and 2021, the government adopted 
two sets of – partially – better targeted and temporary measures in 2022, to ease the burden of 
high  food  and  energy  prices  on  households  and  small  business.  These  include  a  temporary 
reduction in the VAT rate on electricity for households, as well as sizeable subsidies for the 
state-owned electricity producer, ESM, which supplies the electricity to the universal supplier 
in the regulated market, to lower the price of electricity for its customers. It currently satisfies 
100 percent  of the demand of the  regulated market,  through government  decision. Through 
the  Law  on  financial  support  for  socially  vulnerable  categories  of  citizens  to  deal  with  the 
energy  crisis,  adopted  in  November  2022,  the  government  has  provided  targeted  direct 
income support. It also introduced temporary price caps on certain food products, which were 
lifted  on  1 June  2023.  The  new  Organic  Budget  Law,  enacted  by  Parliament  in  September 
2022, introduced fiscal rules and a fiscal council as well as an improved medium-term budget 
framework. However, progress has been slow in other key reform areas. Improvements to the 
management of public investment are hampered by staffing and IT issues. Some of the public 
revenue-enhancing tax reforms adopted by the government in December 2022, which aim to 
reduce  tax  exemptions,  were  stalled  in  Parliament.  The  new  legal  framework  for  public-
private  partnerships  (PPPs),  which  would  address  a  number  of  shortcomings  in  the 
management  of  PPPs  and  of  concessions,  has  yet  to  be  adopted  by  the  government.  The 
government  has  advanced  in  implementing  the  green  transition,  notably  by  adopting  major 
legislation to increase the use of renewable energies. 

The  policy  guidance  jointly  agreed  on  at  the  May  2022  Economic  and  Financial 
Dialogue  between  the  EU  and  the  Western  Balkans  and  Türkiye  has  been  partially 
implemented.  The  country  benefits  from  EU  budget  support  worth  EUR 80 million  to 
cushion  the  impact  of  energy  price  increases  on  households,  small  and  medium-sized 
enterprises  and  public  service  providers,  of  which  EUR 72 million  was  disbursed  in  March 

55 

 
 
2023.  In  November 2022,  the  country  received  the  first  EUR 110 million  tranche  from  an 
arrangement under the IMF’s Precautionary and Liquidity Line (PLL)9. On 12 July 2023, in 
view of the country’s large financing needs in 2023 and 2024, and following a request from 
the government, the Council and the European Parliament endorsed a Commission proposal 
for macro-financial assistance to North Macedonia of up to EUR 100 million.  

Macroeconomic stability 

GDP growth slowed, as the economy was 
hit  by  the  fallout  from  Russia’s  war  of 
aggression  against  Ukraine.  Following  a 
partial  recovery  from  the  recession  caused 
by  the  COVID-19  pandemic,  annual  GDP 
growth slowed down to 2.1% in 2022, from 
in  2021,  as  external  demand 
3.9% 
weakened,  disruptions 
in  global  supply 
chains persisted, and global food and energy 
prices  rose  rapidly.  Trade  dynamics  were 
buoyant,  but  the  rate  of  import  growth 
exceeded  the  export  growth  rate,  which  meant  that  external  trade  made  a  negative 
contribution to economic growth. Investment rose strongly, partly on account of the build-up 
of stocks of intermediate products and raw materials, as companies anticipated further price 
rises.  Private  consumption  growth  slowed  sharply  despite  being  bolstered  by  remittances 
from abroad and government support measures. While industrial production and construction 
output  declined,  the  service  sector  continued  its  post-COVID  trend  of  strong  annual 
increases.  In  the  first  half  of  2023,  annual  GDP  growth  dropped  to  1.6%  on  average. 
Convergence with EU income levels has been slow, with real GDP per capita increasing from 
37% of the EU-27 average in 2017 to 42% in 2022. 

on 

energy 

imports 

Reflecting the country’s large dependence on energy imports and surging import prices, 
the  external  position  deteriorated  in  2022.  The  current  account  deficit  rose  markedly  in 
2022,  to  6%  of  GDP  from  3.1%  in  2021, 
much above its average in the pre-COVID-19 
period  2017  to  2019  (1.5%).  This  rise  is 
accounted  for  by  a  widening  energy  trade 
deficit,  which  reflects  the  country’s  high 
dependence 
and 
skyrocketing  international  energy  prices.  In 
in  an  uncertain  environment, 
addition, 
companies  built  up  their  inventories  of 
imported production inputs.  Deterioration in 
the  energy  and  trade  balance  in  2022  was 
partly  offset  by  a  sizeable  increase  in  private  transfers  (remittances)  and  in  the  services 
surplus, helped by a rebound in tourism. In the first half of 2023, the merchandise deficit has 
narrowed  sharply,  in  annual  terms,  largely  reflecting  the  drop  in  energy  import  prices  and 
driving a large improvement in the current account balance. Foreign direct investment (FDI) 
inflows  recovered  after  a  fall  triggered  by  the  COVID-19  pandemic,  increasing  to  5.2%  of 
GDP  in  2022,  and  almost  covered  the  surging  deficit.  External  debt  amounted  to  84.3%  of 

9 The IMF’s first review of the PLL program has been delayed from April 2023, mainly as the IMF is  seeking more clarity on the fiscal 
implications of the (single-sourced) contract with the US-Turkish consortium Bechtel-Enka to build a EUR 1.6 billion (around 10 percent of 
GDP) highway section of Road Corridor 8/10d. 

56 

-12-8-4048201720182019202020212022Graph 3.1: North Macedonia -Real GDP growth and contributionsPriv. cons.Gov. cons.GFCFStocksNet exportsReal GDP growthSource: WiiW% y-o-y-12-9-6-3036-24-21-18-15-12-9-6-3036920182019202020212022Graph 3.2: North Macedonia -Current account selected components and FDI Workers' remittances balanceGoods and services trade balanceCurrent account balance (rhs)Net FDI (rhs)% of GDPSource: National Bank of North Macedonia and State Statistical Office   
 
 
GDP at end-2022 (+2.3 percentage points (pps) year on year), with long-term debt accounting 
for the bulk of the total (70%). The increase was largely due to a rise in private intercompany 
lending,  which  is  an  important  instrument  for  improving  liquidity  for  foreign-owned 
companies in the country. About 40% of total external debt is made up of intercompany loans 
and trade credits, which is a less risky and more flexible category of debt. 

Foreign reserves have more than recovered following pressures in the first half of 2022. 
Exchange markets dropped sharply in the first half of 2022 (-14% year on year at end-June 
2022),  mainly  on  account  of  increased  conversion  of  domestic  denar-denominated  savings 
into  euro-denominated  deposits,  surging  energy  imports,  and  high  external  debt  payments. 
Subsequently, however, the exchange markets stabilised, supported by a good tourism season 
in  2022,  external  market  borrowing,  including  a  EUR  250  million  private  placement  of 
government  securities  in  Germany  in  September  2022  and  a  EUR 500 million  Eurobond 
issuance  in  March  2023,  as  well  as  the  disbursement  of  the  first  instalment  from  an 
arrangement under the IMF’s Precautionary and Liquidity Line (PLL). Inflows from foreign 
direct  investment  surged  in  2022,  catching  up  after  a  pandemic-related  trough,  but  became 
more  muted  in  2023  so  far.  Foreign  reserves  declined  again  with  the  government’s 
redemption of the 2016 Eurobond in July 2023. At the end of August 2023, they stood higher 
by  26%  y-o-y,  corresponding  to  around  4  months  of  prospective  imports.  The  denar  has 
remained in a stable, de facto pegged exchange rate regime with the euro. 

Monetary  policy  was  appropriately  tightened  in  view  of  persistent  inflation.  Annual 
average inflation in 2022 was at a record high of 14.2%, driven by the global energy and food 
price shock. The annual inflation rate peaked at 19.8% in October 2022, which was more than 
in peer countries in the region, before abating gradually to reach 8.3% in August 2023. Core 
inflation, however, has remained persistent, reflecting the high transmission from the recent 
energy price hikes into core sectors of the economy such as industrial production, transport, 
and  hotels  and  restaurants.  Appropriately,  the  central  bank  continued  its  tightening  of 
monetary policy throughout 2022 and beyond. It raised the policy rate by 495 basis points in 
ten consecutive steps between April 2022 and August 2023, to 6.15%, thereby increasing the 
spread  to  the  European  Central  Bank  (ECB)  policy  rate.  Furthermore,  it  adjusted  reserve 
requirement  rates,  both  in  June  and  September  2022,  and  again  in  August  2023,  to  dis-
incentivize shifts into euro deposits, that were a significant factor behind the drop in foreign 
reserves  in  early  2022.  It  also  eased  reserve  requirements  for  bank  lending  for  renewable 
energy  projects.  A  2020  repo  line  from  the  ECB,  intended  to  provide  Euro  liquidity  to  the 
central  bank,  was  extended  in  2022.  Concerns  about  the  operational  independence  of  the 
central  bank  persist,  as  the  central  bank  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. 

An 
inflation-driven  boost  to  tax  revenue  and  under-execution  of  expenditure 
underpinned the lower-than-projected budget deficit in 2022. The fiscal deficit came in at 
4.5% of GDP, down from 5.4% in 2021 and remaining below the revised target of 5.3% of 
GDP adopted in the July 2022 budget revision. Central government revenue rose by 11.3% 
compared  with  2021,  driven  by  a  22.4%  surge  in  VAT  receipts.  Current  expenditure 
increased  by  6.9%  in  2022,  which  was  less  than  the  8.3%  increase  in  total  expenditure.  At 
89.2% of budget, implementation of capital expenditure was higher than the average for the 
previous 5 years. The government  has phased out  some untargeted support measures. VAT 
on electricity for households was raised from the reduced 5% rate to a still reduced 10% on 

57 

 
 
1 January 202310  and  was  normalised  to  the  standard  rate  of  18%  from  1 July.  Several 
expenditure categories, most notably transfers to the state-owned electricity company, ESM, 
and  capital  expenditure,  on  the  other  hand,  were  heavily  under-implemented  in  2022.  In 
January-July  2023  the  budget  deficit  stood  at  2.9%  of  the  projected  full-year  GDP,  with  a 
weak  performance  on  the  revenue  side  from  VAT,  in  particular.  In  July,  the  government 
raised  public  sector  wages  by  10%,  effective  from  September  2023,  and  subsequently 
adopted a budget reallocation in order to accommodate the additional expenditure within the 
initial  deficit  target  of  4.6%  of  GDP.    In  the  5 years  preceding  the  pandemic,  the  general 
government fiscal deficit declined 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. The revenue ratio has remained largely unchanged at a 
relatively  low  level  (2022:  30.6%)  in  the  past  5 years,  suggesting  the  need  to  take  further 
measures  to  increase  public  revenue.  The  expenditure  structure  remains  dominated  by 
transfers  to  the  pensions  fund  (2022:  28%  of  total  expenditure),  where  a  recent  policy 
reversal  back  to  linking  annual  pensions  increases  to  both  prices  and  average  wages,  has 
further exacerbated the financing pressures.  

ratio 

stabilised 

Inflation helped lower the public debt to GDP ratio in 2022 which however remains well 
above pre-pandemic levels.   After having  increased by some 10 pps to  more than 50%  in 
2020,  the  general  government  debt-to-
GDP 
in  2021,  and 
subsequently  posted  a  slight  decline  in 
2022  (-1.1 pps  year  on  year  to  50.9%  of 
GDP).  The  public  debt  ratio  dropped  by 
more  (-1.2 pps),  to  59.8%,  reflecting  a 
decrease  in  the  debt  of  public  enterprises. 
Still,  in  nominal  terms,  the  debt  stock 
gradually  increased  further  also  in  2022 
and in the first half of 2023. At the end of 
June  2023,  the  general  government  debt 
level was higher by 19.3% compared to end-21. The share of fixed interest rate debt in total 
debt remained high throughout 2022 (74% at end-year) but stood somewhat lower than one 
year  earlier  (-1.3 pps).  External  debt  accounted  for  some  60%  of  total  general  government 
debt at the end of 2022, the same as in 2021. Foreign currency debt, mostly denominated in 
euro (92% of total foreign currency debt), accounted for 76% of total debt (also unchanged 
year on year). The de facto exchange rate peg to the euro limits debt vulnerabilities stemming 
from  fluctuations  in  the  value  of  the  denar.  In  March  2023,  the  government  successfully 
issued  a  Eurobond,  its  ninth  since  2005,  for  EUR 500 million,  for  refinancing  the  2016 
Eurobond (EUR 450 million) repayment in July 2023. The country has a proven track record 
of timely debt repayments. 
The  fiscal  framework  has  been  strengthened  through  a  new  Organic  Budget  Law 
(OBL),  but  deficiencies  in  public  finance  management  remain.  In  September  2022, 
Parliament  passed  the  OBL,  which  provides  for  the  introduction  of  fiscal  rules  and  a  fiscal 
council  and  strengthens  the  medium-term  budget  procedure.  Key  provisions,  such  as  the 
fiscal  rules,  are  due  to  enter  into  force  in  2025.  Preparations  for  setting  up  the  new  fiscal 
council  are  advancing,  with  the  members  of  the  council  nominated  and  appointed  by 
Parliament in September 2023. However, the adoption of by-laws, which is necessary for the 
full  implementation  of  the  OBL,  is  not  progressing.  Furthermore,  shortcomings  in  revenue 

10 The planned increase from 5% to 10% had been postponed from July 2022 to January 2023. 

58 

020406080-9-6-303201720182019202020212022Graph 3.3: North Macedonia -Fiscal developmentsPrimary balance (lhs)Interest (lhs)CG balance (lhs)Public debt (rhs)Source: National sources% ofGDP 
 
 
collection  and  a  large  number  of  tax  exemptions  eroding  the  tax  base  hamper  a  potential 
increase  in  public  revenue  ratios.  In  December  2022,  the  government  adopted  tax  policy 
reform measures in the areas of personal income tax, corporate income tax, and value-added 
tax,  with  a  view  to  broadening  the  tax  base.  While  amendments  to  the  Law  on  Personal 
Income Tax entered into force in January 2023, amendments to the Law on Corporate Income 
Tax,  to  the  Law  on  Value  Added  Tax,  as  well  as  a  new  Law  on  the  Solidarity  Tax  were 
adopted by Parliament only in September 202311. Implementation of measures to improve the 
planning,  allocation  and  execution  of  public  investment  projects,  as  presented  by  the 
government in its 2021 Action Plan, is progressing only slowly, hampered by staff shortages 
and  IT  requirements.  The  government  set  up  a  dedicated  unit  for  public  investment 
management in the Ministry of Finance in December 2022, to ensure centralised oversight of 
public sector investment, but it still has to become fully operational. 

Fiscal risks are sizeable and not always well monitored. Risks to the government’s fiscal 
consolidation plans have increased, notably from the government’s March 2023 contract with 
the Bechtel-Enka consortium for the construction of part of Road Corridor 8/10d. The project 
is  expected to  cost  EUR 1.3 billion (10% of 2022 GDP) and  to  be completed over a 6-year 
period, with EUR 215 million (1.7% of 2022 GDP) earmarked in the 2023 budget. A special 
law  that  replaces  standard  public  procurement  rules  for  this  project  has  been  adopted  and 
enacted by Parliament. To solidify the fiscal cost and manage fiscal risks, in particular recent 
rises in construction costs and uncertain cost evolution of the project, the IMF requested the 
authorities to provide an independent due diligence study as a structural benchmark under the 
2022 precautionary and liquidity line for North Macedonia, which is delayed.  Further fiscal 
risks stem from expenditure arrears, which remain consistently above 3 percent of GDP, as 
well as from public sector wage growth, and the July 2023 decision by the government to link 
future rises in public sector wages to average wage growth, in addition to price developments. 
The  rising  pensions  bill  poses  further  risks  to  fiscal  sustainability,  also  exacerbated  by  the 
recent change in the indexation formula. The steep rise in minimum wages (+12% as of April 
2023), in line with the new methodology for alignment adopted in 2022, further impacts on 
general  wage  and  pension  developments.  Some  fiscal  risks,  such  as  contingent  liabilities 
arising from PPPs and other off-budget entities are not systematically reported to the central 
government12. 

The policy mix has been somewhat inconsistent, in addressing the challenges posed by 
the  cost-of-living  crisis  and  high  energy  imports,  but  financial  and  macroeconomic 
stability  was  secured.  Monetary  policy  was  appropriately  tightened  in  view  of  soaring 
inflation,  and  measures  to  promote  savings  in  domestic  currency  (‘denarisation’)  were 
stepped  up,  which  contributed  to  the  stability  of  the  exchange  rate.  Fiscal  support  to 
households  and  companies,  on  the  other  hand,  could  have  been  better  targeted  and  fiscal 
consolidation plans could be more ambitious, also in order to help monetary policy to contain 
inflation. Energy subsidies  remained large, against  the background of falling  market  prices. 
Furthermore, the government’s decision to revise the indexation mechanism of public wages 
and the minimum wage from 2024 is likely to fuel domestic price pressures and put at  risk 
fiscal consolidation plans. Further improvements in the fiscal framework, such as monitoring 
and  addressing  fiscal  risks  and  improving  public  investment  management,  would  make  a 

11 Furthermore, in August 2023, the government passed tax base-broadening amendments to the Excises Law, with parliamentary adoption 
still pending. These changes include the introduction of ad-valorem excise for cigars and cigarillos at 9 percent and the introduction of the 
new excise calendar that envisages a gradual increase of specific excises over time. 
12 There is a requirement in the new Organic Budget Law for the government to include a description of fiscal risks (at a 
minimum  those  pertaining  to  the  government’s  contingent  liabilities)  in  the  annual  fiscal  strategy;  and  for  the  Fiscal 
Council  to  assess  fiscal  risks  relating  to  various  public  entities,  including  public  enterprises  and  public-private 
partnerships. 

59 

 
 
 
significant  contribution  to  further  safeguarding  macroeconomic  stability  and  raising  the 
economy’s growth potential. 

Functioning of product markets 

Business environment 

Challenges  in  the  business  environment  are  undermining  the  competitiveness  of 
domestic companies, investment and global value chain integration.  North  Macedonia’s 
economy  relies  heavily  on  its  integration  in  global  value  chains,  in  particular  in  the 
automotive  sector,  with  export-destined  production  concentrated  among  a  few  firms.  The 
reliance  on  imported  inputs  makes  the  economy  vulnerable  to  external  shocks.  These 
competitive  pressures  are  exacerbated  by  low  productivity,  partly  stemming  from  a  lack  of 
skills and from sluggish adoption of innovation and new technology, as well as by a complex 
legal  and  regulatory  environment  and  the  large  informal  economy.  The  impact  of  the 
COVID-19  pandemic  and  Russia’s  invasion  of  Ukraine  has  intensified  these  structural 
challenges.  The  government’s  approach  to  simplifying  the  business  environment  is  not 
sufficiently systematic and consistent. 

The  government  has  progressed  somewhat  in  streamlining  the  array  of  parafiscal 
charges.  Activities  to  optimise,  consolidate  and  streamline  parafiscal  charges  are  ongoing. 
The government has tasked the Ministry of the Economy with coordinating the process, but 
the  decision  to  streamline  100 selected  parafiscal  charges  will  have  to  be  adopted  by  the 
government  as  a  whole.  Implementation  of  other  key  measures  to  improve  the  business 
environment is protracted, such as 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  duration 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.  Work  is 
ongoing  to  upgrade  the  e-portal  in  order  to  develop  a  more  user-oriented  service  delivery. 
The  number  of  registered  users  and  completed  services  on  the  portal  is  increasing,  but 
remains below expectations. Many of these services remain purely informational and cannot 
be fully performed online (OECD, 2022). 

Challenges  posed  by  the  large  informal  economy  are  not  addressed  in  a  decisive 
manner. The informal economy continues to present a major obstacle to business operations. 
According to IMF estimates, it likely accounts for as much as 38% of GDP13. The number of 
informal employees as a proportion of total  employees is estimated to have decreased from 
18.6%  in  2018  to  13%  in  2022.  Implementation  of  the  government’s  2018  Strategy  and 
Action  Plan  to  combat  the  informal  economy  remains  sluggish,  particularly  regarding  the 
formalisation of undeclared workers. In October 2022, to enable more efficient coordination 
between  relevant  institutions  and  stakeholders,  the  Ministry  of  Finance  took  over 
responsibility  for  preparing  the  new  2023-2027  Strategy  for  Formalisation  of  the  Informal 
Economy  with  an  Action  Plan  which  were  adopted  by  the  government  in  September  2023. 
The  government  adopted  tax  legislation  at  the  end  of  2022  to  strengthen  the  tax-paying 
culture and thereby fight the informal economy. 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 
The  transparency  and  efficiency  of  State  aid  remains  deficient.  Instead  of  tackling  the 

13 The IMF figure is at the upper range of estimates. 

60 

 
 
 
country’s underlying structural challenges and business environment issues, the government’s 
flagship  policy  to  attract  FDI  and  improve  domestic  firms’  competitiveness  relies  on 
providing various forms of State aid to businesses. The effects of State aid on efficiency and 
competition  have  not  yet  been  assessed.  The  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  powers  of  the  Commission  for  the  Protection  of  Competition  in  State  aid 
supervision.  The public information  provided by the government  on  State aid  to  companies 
remains incomplete and the criteria for the selection of beneficiaries are often unclear. 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.  There  is  no  strategy  for  properly  determining  priorities,  goals  and  policies  for 
investment activities in the country’s technological industrial development zones. 

Competition  in  the  energy  market  is  increasing.  While  the  energy  market  was  fully 
liberalised  in  2019,  almost  all  households  and  small  companies  remain  in  the  regulated 
electricity  market  being  provided  with  heavily-subsidized  electricity.  In  the  last  quarter  of 
2022,  24 639  consumers  (per  metering  point)  purchased  electricity  from  active  suppliers  in 
the open electricity market, according to mutually agreed (unregulated) prices. This makes up 
about  55%  of  the  market,  compared  to  some  53%  at  the  end  of  2019.  In  2022,  there  were 
18 electricity  suppliers  in  the  open  market  and  one  electricity  supplier  in  the  regulated 
electricity  market.  An  increasing  number  of  consumers  have  been  switching  electricity 
suppliers. In 2019, 2 350 consumers switched supplier. In 2020, that figure rose by 10.8% to 
2 603 consumers, in 2021 by a further 37.1% to  3 568 consumers and in 2022 by 11.7% to 
3 986 consumers. 

Privatisation and restructuring 

The public sector’s stake in the economy remains low. In 2022, the number of companies 
in full-state ownership declined by two, to 15, compared to the preceding years. The number 
of  companies  in  partial  ownership  decreased  by  one,  to  38,  most  of  these  with  a  state 
ownership  share  of  below  1%  of  issued  capital14.  The  total  value  of  state  ownership  in 
enterprises  was  unchanged,  at  about  10%  of  GDP.  There  are  currently  no  plans  for  further 
privatisations. 

Functioning of the financial market 

Financial stability 

Bank  capitalisation  and  profitability  have  improved  since  the  pandemic.  The  banking 
sector remained resilient throughout the recent crises. Banks’ capital adequacy ratio increased 
further  in  2022,  and  in  December  2022,  it  was  well  above  its  level  of  5 years  earlier,  far 
exceeding the regulatory minimum. Liquid assets accounted for over a third of total assets at 
end-2022 and covered more than half of short-term liabilities. At 12.2%, return on equity was 
above  its  pre-pandemic  level  at  end-2019  (11.7%).  The  proportion  of  loans  to  the  non-
financial  sector  which  were  non-performing  has  been  steadily  decreasing  since  the  end  of 
2013, to a record low of 2.8% at the end of 2022 (-0.2 pps year on year). However, financial 
diversification is progressing slowly, with banks still accounting for some 79.1% of financial 
sector assets at end-2021, only slightly lower than the end-2016 figure (84.7%). The share of 
foreign  equity  in  total  bank  equity  has  been  consistently  high  in  the  past  5 years,  at  about 

14  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  indicates  that  there  are 
88 SOEs, of which 35 are 100% owned by the government of North Macedonia. 

61 

 
 
 
75%. 

The  legal  and  institutional  framework  for  ensuring  financial  stability  has  been 
strengthened. In July 2022, the new Financial Stability Law was enacted, giving the relevant 
authorities in the financial sector a legal mandate to develop and implement macroprudential 
measures  to  maintain  the  stability  of  the  financial  system.  The  Law  sets  up  the  Financial 
Stability  Council,  which  held  its  first  meeting  in  November  2022  and  submitted  the  first 
annual  financial  stability  report  to  Parliament  at  end-March  2023.  In  February  2023,  the 
Council  of  the  National  Bank  adopted  a  new  decision  on  the  credit  risk  management 
methodology, so as to strengthen the management of non-performing and restructured loans, 
due to enter into force on 1 January 2024. In August 2023, the National Bank’s  decision to 
increase the countercyclical capital buffer to 0.5%, adopted in July 2022, entered into force. 
The National Bank has already scheduled increases in the countercyclical buffers to 0.75 by 
2024Q2 and to 1% by 2024Q4. However, critical legislation including the Bank Resolution 
Law and the Deposit Insurance Law is not yet enacted by Parliament.  

Access to finance 

Growth  in  credit  to  the  private  sector  decelerated,  while  deposit  growth  remained 
robust.  Annual  growth  in  loans  to  households  and  non-financial  companies  has  also  been 
decelerating  since  autumn  2022,  with  corporate  loans  particularly  affected.  Lending  to 
nonfinancial corporations slowed down mainly on account of repayments of working capital 
loans linked to the surge in energy costs. Even so, over 2022 as a whole, private-sector credit 
growth  accelerated  by  3.8 pps  to  9.6%  year  on  year,  before  slowing  in  the  first  quarter  of 
2023  to  8.3%,  and  further  to  6.4%  in  the  second  quarter.  Foreign  exchange  loans  are 
contributing  most  to  the  annual  increases.  The  proportion  of  loans  that  were  foreign-
denominated rose by 0.8 pp year on year to 43.2% in the first quarter of 2023. The increase 
was  more  pronounced  in  the  corporate  sector,  partly  because  corporations  needed  extra 
liquidity  to  cover  their  energy  purchases.  Overall,  however,  the  currency  denomination  of 
domestic credit shifted further towards denar-denominated loans in the latter part of the year. 
While  household  demand  for  foreign  currency  deposits  strengthened  throughout  the 
pandemic and energy crises, deposits in national currency have rebounded since early 2023, 
supported by the central bank’s strategy of applying different reserve requirements for bank 
deposits  in  foreign  and  local  currency.  The  share  of  foreign  currency-denominated  in  total 
bank deposits amounted to 46.7% at the end of the first quarter 2023 (-0.7 pp year on year). 

Functioning of the labour market 

to 

The  labour  market’s  resilience  masks  persistent  structural  problems.  While  fiscal 
support to employers was gradually withdrawn in the second half of 2022, the labour market 
continued 
resilient.  The 
prove 
employment  rate  has  steadily  increased 
over  the  last  decade.  The  COVID-19 
pandemic interrupted this trend, but in the 
first  quarter  of  2023  the  employment  rate 
stood  above  the  pre-pandemic  level,  at 
56.5%.  For  2022  as  a  whole,  the  average 
unemployment rate (15-64 age group) was 
14.5%, compared with 15.6% in 2021. The 
labour  force  decreased  by  1.3%  year  on 
year,  with  the  bulk  of  the  drop  accounted 
for  by  women  (-2%,  compared  with  0.8%  for  men).  The  labour  market  participation  rate 
dropped  to  66.4%  in  2022  (-0.4 pps  year  on  year).  Young  people  in  particular  continue  to 
62 

 
 
face  obstacles  to  entering  the  labour  market.  In  2022,  the  government  adopted  a  new 
implementation plan to strengthen the Youth Guarantee which has been in place since 2018 
and which has contributed to a significant reduction in youth unemployment from 45.4% in 
2018 to a still high 32.5% in 2022. The rate of inactivity in the labour market is particularly 
high  for  women  and,  after  steadily  narrowing  between  2014  and  2019,  the  gender  gap 
widened for the third year in a row in 2022 (by 0.8 pps to 24.1 pps.), as the participation rate 
for  men  remained  stable  (at  78.4%),  while  it  dropped  for  women  (to  54.3%).  Long-term 
unemployment  stands  at  around  80%  of  total  unemployed,  largely  reflecting  an  entrenched 
skills  mismatch.  Spending  on  active  labour  market  policies  (0.3%  of  GDP  in  2022)  is 
relatively high in regional comparison, but lower than the EU average (0.6% of GDP). 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 
the  labour  market.  Average  gross  nominal  wages  rose  by  11.1%  in  2022,  with  the  annual 
increase accelerating to 14.3% on average in the first half of 2023. Real wage growth turned 
positive  as  of  April  2023  after  raising  the  minimum  wage  according  to  the  indexation 
mechanism that takes into account inflation and changes in average wages. The average tax 
wedge  is  regressive  at  the  bottom  of  the  income  distribution:  the  average  contribution  rate 
therefore takes a much higher share of low-wage earners’ total income. 

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 EU. Integration with the EU in trade and 
investment  remained  at  a  high  level  in  2022.  The  share  of  high-value  products  in  exports 
increased  further  and  trade  openness  surged  to  a  record  high.  There  was  further  progress 
towards improving vocational educational training  (VET), but major skills shortages persist 
relative  to  labour  market  needs,  entailing  long  school-to-work  transitions.  These,  coupled 
with  large  gaps  in  transport  and  energy  infrastructure  and  low  investment  and  innovation 
funding, are restricting potential growth. Digitalisation of the economy is advancing, but the 
competitiveness of domestic businesses could be improved through a wider offering of public 
e-services. 

As  the  2022  recommendations  have  not  been  fully  implemented  and  remain  mostly  valid, 
North Macedonia should in particular: 

→  adopt  the  new  Law  on  VET,  the  Law  on  secondary  education  and  the  Law  on  adult 
education, and increase financial and human resources to speed up reforms of the VET 
system; 

→  finish unbundling gas transmission systems, increase investment in new energy sources 
and  enhance  administrative  capacity  in  the  Energy  Department  of  the  Ministry  of 
Economy and the Energy Agency; 

→  adopt  secondary  legislation  under  the  Energy  Efficiency  Law  and  operationalise  the 
energy efficiency fund; adopt the Law on biofuels and the energy efficiency renovation 
strategy for buildings; and establish a renewable energy guarantee of origin scheme.  

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 well in terms of 
the  number  of  people  with  higher  education  qualifications,  curricula  are  not  well  suited  to 
equipping graduates with skills to match labour demand. State financial support for education 
63 

 
 
is insufficient and coordination between the education sector and businesses is weak. In 2022, 
public spending on education and training amounted to 3.7% of GDP, about the average of 
the preceding 5 years. This is below both the EU-level (5%) and peer-country averages, and 
impedes  implementation  of  the  2018-2025  education  strategy.  Moreover,  spending  is 
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 ranking15, 
compared to 2015, but the country still ranks in the lowest quartile. VET curricula have been 
under review since 2019 to align them with labour market needs. However, the government 
has not  yet  adopted  a new VET  Law with  a  focus on inclusion, labour market  needs and a 
new methodology of financing VET. The envisaged annual report on the implementation of 
the education strategy, which should include recommendations for a new formula for higher 
education  funding,  has  not  yet  been  published.  The  percentage  of  adults  participating  in 
learning was 2.6% in 2020, which is significantly below the EU-27 average of 10.8% (2021). 
Further  development  of  qualifications  is  key  to  bringing  medium-skilled  and  low-skilled 
people into the labour market. 

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 remains significantly 
below the EU average. Participation of the private sector in overall research spending remains 
particularly weak, at 0.1% of GDP. Allocations to the Fund for Innovation and Technological 
Development  and  its  programmes  have  increased,  but  their  effectiveness,  design  and 
methodology  could  benefit  from  an  independent  evaluation.  Links  between  businesses  and 
others  involved  in  innovation  are  very  weak.  To  overcome  the  lack  of  strategic  direction 
towards innovation, a smart specialisation strategy has yet to be adopted and implementation 
measures to be developed. 

Physical capital and quality of infrastructure 

Investment  spending  remains  moderate  despite  a  major  need  to  increase  physical 
capital.  Gross  capital  formation  (including  inventories)  rose  to  35%  of  GDP  in  2022 
(+1.8 pps year on year), exceeding its pre-COVID level (2019: 34.5%). Investment in fixed 
assets  (gross  fixed  capital  formation)  increased  steadily  in  the  5 years  to  2021  (latest  data), 
when  it  reached  22.5%.  This  is  above  the  average  of  21.9%  in  the  preceding  5  years,  and 
close to  the EU-27 average of 22.8% (2022).  Investment  in  construction  as  a percentage  of 
total investment in 2021 (55.2%) was down on its 5-year average (58.2%), while investment 
in machinery and equipment rose to 35.3% of total investment, above the average (32.8%). 
The share of private-sector investment in total investment remained steady in the 5 years up 
to  2021,  at  around  75%.  In  the  face  of  the  current  energy  crisis  and  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  is  progressing  slowly.  Road  transport  continues  to 
dominate  the  transport  sector.  There  is  limited  investment  in  other  means  of  transportation 
and no consistent and intelligent system for managing and controlling traffic. Relatively low-
quality  transport  infrastructure,  as  well  as  weak  trade  and  transport  logistics  continue  to 
present barriers for businesses. The joint electronic toll collection system between Serbia and 
North  Macedonia  has  become  operational,  facilitating  trade  and  travel  between  the  two 
countries. There has been some progress on upgrading major road sections to highway level. 
Work  has  started  on  Railway  Corridor  VIII, which  aims  to  link  North  Macedonia  with 
Albania and Bulgaria and will give the country’s companies an alternative export option via 

15 PISA is the OECD's Programme for International Student Assessment. 

64 

 
 
 
Albanian and Bulgarian ports. 

The  digitalisation  of  the  economy  continues  to  advance,  but  is  still  at  a  low  level 
compared  with  the  EU.  The  percentage  of  households  with  internet  access  at  home 
increased by 10.1 pps. between 2017 and 2021, to 83.6%. A fixed broadband connection to 
the internet is used by 88% of household users, and by 92% of  businesses with 10 or more 
employees,  but  smaller  companies  still  face  obstacles.  Of  the  total  number  of  enterprises, 
54.5%  had  a  website/homepage.  Overall,  there  is  a  particular  need  to  increase  access  to 
broadband, expand e-government services and develop digital skills. 

incentive 

investment 

is  taking  steps  to 

The  government 
in  energy  efficiency 
improvements in the public sector. The economy is characterised by high-energy intensity 
with low efficiency in energy production and consumption. North Macedonia is a contracting 
party to the Energy Community Treaty and its government has committed to reducing the use 
of  energy,  which  requires  substantial  investment.  Further  improving  energy  efficiency, 
including  in  residential  and  public  buildings,  is  also  important  to  lower  the  economy’s 
dependence on energy imports and to enable a reduction in fiscal subsidies for energy. Yet, 
implementation of the 2020 Law on Energy Efficiency and the adoption of by-laws is lagging 
behind. In order to support energy efficiency investments in the public sector, which has the 
greatest  potential  to  improve  energy  efficiency,  the  government  is  establishing  an  Energy 
Efficiency  Fund  (EEF).  At  the  end  of  2022,  the  government  decided  to  establish  the  EEF 
within the Development Bank. The legal and regulatory framework for its establishment and 
operationalisation  requires  amendments  to  the  Law  on  the  Development  Bank,  which  have 
been  adopted  by  the  Parliament  in  October  2023.  Rules  of  procedure  of  the  Fund  and  a 
project pipeline remain to be established. 

The  legal  framework  for  investment  in  renewable  energy  sources  was  improved. 
Electricity  generation  is  highly  dependent  on  coal,  and,  with  domestic  coal  reserves 
declining,  on  imports.  The  proportion  of  energy  from  renewable  sources  remains 
comparatively low, at 17.3% in 2021. The government plans to increase renewable energy to 
35-45% of energy consumption by 2040, to reduce the country’s high  reliance on imported 
liquid fuel and natural gas. In November 2022, Parliament enacted amendments to the 2018 
Energy  Law  incentivising  investment  in  renewable  energy  sources,  notably  solar  power. At 
the same time, the central bank began implementing a measure to encourage lending to the 
corporate sector to finance domestic electricity production projects from renewable sources.  

The distribution of natural gas remains limited. Meanwhile, the distribution of natural gas 
is  advancing,  as  an  intermediate  step  in  the  decarbonisation  process,  with  efforts  made  to 
enhance the transmission and distribution network. The natural gas market was liberalised in 
2015. The number of connected users remains limited; in 2022, it increased by 10% year on 
year, to 550. Similarly limited are the length of the transmissions network (+5% year on year 
to  210 km)  and  the  total  distributed  quantities.  Gas  accounts  for  some  11%  of  electricity 
production.  There  was  little  progress  in  the  unbundling  of  the  gas  transmission  system 
operator, now planned for end-2023. The work to connect to regional gas pipelines is making 
slow  headway.  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. 

Sectoral and enterprise structure 

The diversification of the economy continued after the pandemic. The economy’s output 
is  strongly  reliant  on  the  manufacturing  sector.  Services  and  trade  have  only  gradually 
increased their share in value added in recent years. Together, they accounted for some 66% 

65 

 
 
of total value added in 2022, about the same as  a year earlier, and up from 60.4% in 2016. 
The share of manufacturing decreased slightly for the second year in a row, to 14.6% of value 
added in 2022, having progressively gained ground in the pre-pandemic years. The share of 
construction  increased  somewhat,  in  annual  comparison,  in  2022,  to  6.2%,  reflecting  a 
recovery of investment after the pandemic, yet remaining below its average of 7% in 2017-
2021. After steadily dropping over a number of years, the share of agriculture remained at 9% 
of value added, as in 2021. 

Trade  and  services  increasingly  dominate  the  employment  structure.  In  employment, 
too, trade and services assume an increasingly important role, accounting for close to 60% of 
total employment in 2022, compared with 58.4% in 2021. The manufacturing sector’s share 
in total employment also rose in 2022, compared to the preceding year (+0.4 pps to 19.6 %), 
possibly reflecting in part the post-pandemic end of short working hour regimes and a pick-
up in production. The construction sector accounted for 6.5 % of all employment, as in 2021, 
and the share of agriculture dropped by 1.8 pps year on year, to 10%. 

Economic integration with the EU and price competitiveness 

Trade  openness  increased  steeply  as  both  exports  and  imports  surged.  The  economy 
posted  a  large  increase  in  trade  openness  (exports  and  imports  in  goods  and  services  as  a 
percentage  of  GDP)  in  2022,  to  a  record  high  of  171%  (2021:  148.5%,  2015-19  average: 
120%), which is by far the highest level in the Western Balkans. Trade values increased by 
more than nominal GDP in 2022, largely reflecting the steep rise in energy imports, but also a 
large  increase  in  export  values.  The  share  of  higher-value  added  products  in  the  export 
structure rose further in 2022, including chemicals (32% of total exports) and machinery and 
transport  equipment  (31%),  at  the  expense  of  traditional  exports  such  as  iron  and  textiles 
(below 20%). In 2022, the EU was the country’s most significant trading partner, accounting 
for 59.6% of total trade (78.3% of total exports compared with 77.3% in 2021 and 46.8% of 
total  imports  compared with  46.2% in  2021). As the second most important  trading  partner 
region,  the Central  European  Free Trade Agreement  accounted for 10% of total  trade,  with 
the share of exports slightly higher and the share of imports lower than in the preceding year 
(12.1%  of  total  exports  and  8.6%  of  total  imports).  EU  countries  also  remain  the  biggest 
investors in North Macedonia, accounting for some 50% of total FDI inflows in 2022 (2021: 
56%), but the EU-27 share in the total stock of direct investment has declined to 64% at end-
2021, compared to 66% in 2015. 

External  competitiveness  slightly  deteriorated.  In  2022,  the  real  effective  exchange  rate 
(REER) of the local currency appreciated by 2.1%, on an annual basis, due to an increase in 
the  nominal  effective  exchange  rate  in  relation  to  the  currencies  of  some  of  the  trading 
partner countries, with relative prices remaining stable. The rise in real wages coupled with 
stagnant  or  declining  productivity  erodes  price  competitiveness.  Nominal  unit  labour  cost 
rose by some 7% in 2022, reflecting the stark increase in nominal wages, while productivity 
66 

02040608010020152016201720182019202020212022Graph 3.5a: North Macedonia -Exports of goodsEUCEFTAOtherSource: WiiW% ofGDP02040608010020152016201720182019202020212022Graph 3.5b: North Macedonia -Imports of goodsEUCEFTAOtherSource: WiiW% ofGDP 
 
 
growth  remained muted. Over the last  5 years, the REER  of the  denar deflated by inflation 
has seen little change in either direction (on average a small appreciation of 1%).  Concerns 
over external competitiveness have increased as wage growth has accelerated, fuelled by the 
12% hike in minimum wages starting from April 202316. 

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.  

North  Macedonia  is  moderately  prepared  in  the  area  of  public  procurement.  Limited 
progress  was  made  in  the  reporting  period.  The  capacity  of  key  institutions,  contracting 
authorities and economic operators should be increased through continuous training. National 
authorities should introduce more effective anti-corruption measures across the procurement 
cycle. The direct award of the contract for the construction of Corridor VIII and X-d raises 
concerns as it exempts the project from applying the law on public procurement. 

The  recommendations  from  last  year’s  report  were  not  fully  implemented  and  therefore 
remain valid. In the coming year, the country should in particular: 

→  adopt the public-private partnership law and the law on concessions, to further align the 

legal framework in these areas with the EU acquis; 

→  improve coordination among key stakeholders and strengthen their capacity to implement 
the principles of transparency, free competition, equal treatment and non-discrimination; 

→  further increase the use of 'most economically-advantageous tender' (MEAT) criteria for 
the  award  of  contracts,  and  improve  the  monitoring  of  public  procurement  procedures 
through  reporting  and  efficient  follow-up  of  irregularities,  conflict  of  interest  cases  and 
fraudulent practices. 

Institutional set-up and legal alignment 

The  legal  framework  on  public  procurement  is  broadly  aligned  with  the  EU  acquis.  The 
practice of ‘blacklisting’ companies due to professional misconduct during the procurement 
phase continued, although this is not in line with EU rules. In 2022, 55 negative references 
were issued against 50 economic operators, of which 21 expired and nine were removed by 
the Public Procurement  Bureau. By  the end of 2022, 25 negative references  issued in  2022 
were active, as well as six negative references issued in 2018 and 2019. 

The  finalisation  and  adoption  of  the  Law  on  PPP  and  the  Law  on  concessions  are  still 
pending.  

In March 2023, the government approved a contract for the construction of highway sections 
along  Corridor  VIII  and  X-d.  The  contract  was  directly  awarded  to  an  international 
consortium  without  a  competitive  procedure  as  the  ad  hoc  Law  on  determining  the  public 

16 Public sector wages were increased by 10 percent in September 2023, in  addition to the linear increase as a 
result of the minimum wage increase in March 2023, as well as several seperate decisions granting larger wage 
increases  implemented  in  2023.  Higher  average  nominal  wages  accelerate  the  increase  in  pensions  under  the 
new indexation formula, thus creating additional demand pressures. 

67 

 
 
 
 
interest and the Law on nominating a strategic partner for the implementation of the project 
for  the  construction  of  infrastructure  Corridor  VIII  and  X-d  adopted  by  the  Parliament  in 
2021  exempts  the  project  from  the  application  of  the  law  on  public  procurement.  In  May 
2023,  the  Government  submitted  for  adoption  to  the  Parliament  legal  amendments  that  are 
necessary for the implementation of the project. These laws were labelled with the EU flag to 
fast-track the procedure although this was not an appropriate use of the procedure.   

The 2022-2026 public procurement strategy is under way. According to the first monitoring 
report of 2022, 68% of the activities have been fully implemented, 8% are ongoing and 24% 
were moved forward to 2023. The Public Procurement Bureau (PPB) continued to modernise 
and  improve  the  country’s  public  procurement  system  and  to  enhance  the  system's 
performance  and  functionalities.  However,  the  PPB's  capacity,  monitoring  and  control 
competencies need to be strengthened.  

The Public Procurement Bureau and Ministry of Economy continued activities to accede to 
the WTO Agreement on Government  Procurement  (GPA). On 7 June 2023, the Committee 
on Government Procurement decided on the accession of North Macedonia to the GPA. 

In  2022,  a  Memorandum  of  Understanding  to  exchange  information  and  standardise 
procedures  was  signed  between  the  Public  Procurement  Bureau,  the  State  Appeals 
Commission, the Commission for the Protection of Competition, the State Audit Office and 
the  State  Commission  for  Preventing  Corruption.  This  should  result  in  a  more  effective 
exchange of data and information with the objective of enhancing consistency and integrity in 
implementing the legal framework. 

The capacity of the Ministry of Economy, the Ministry that deals with concessions and PPPs, 
remains  limited.  In  2022,  only  one  new  agreement  establishing  a  PPP  was  concluded.  The 
PPP register and the register on concessions still need to be set up. 

The electronic system for public procurement is working efficiently. Despite the development 
of an e-marketplace platform and e-catalogues, procuring entities demonstrated little interest 
in using this system. In 2022, 70 small value procurements were concluded using e-market. 
Contracting  authorities'  annual  procurement  plans  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  2022,  the  public  procurement  market  amounted  to  8.6%  of  the  country’s  GDP  as 
compared to 11% in 2021. It represented25% of the state budget. The capacity of both central 
and local contracting authorities needs to be strengthened. 

On the award criteria used in public procurement procedures, the use of 'most economically-
advantageous tender' (MEAT) is still limited. In 2022, only 1 383 procurement notices out of 
22 901  applied  MEAT  criteria  (6.03%).  There  is  a  need  for  organisation  of  continuous 
training of contracting authorities on how to apply this criterion.  

Contract  award  and  implementation  monitoring  shows  that  the  use  of  negotiated 
procurement procedures (number of procedures) fell to 6.6% in 2022, from 8% in 2021.  An 
assessment  of  the  use  of  centralised  procurement  and  framework  agreements  by  the  Public 
Procurement Bureau is under way. The proportion of the overall value of public procurement 
awarded to SMEs increased to 57% in 2022 compared to 53% in 2021. Tender cancellation 
(number of procedures) increased to 31%  compared to 28.8% in 2021. In 2022 the average 

68 

 
 
number of bids accounted for three bids per tender procedure and approximately one third of 
contracts were awarded in tender procedures with a single bid. 

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

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

Efficient remedy system 

The  legislation  on  the  right  to  legal  remedy  is  broadly  aligned  with  the  EU  acquis.  The 
implementation capacity  of the State Appeals  Commission is  insufficient  for handling the 
number  of  appeals  (967  in  2022,  1 109  in  2021).  Additional  qualified  staff  are  needed  to 
ensure  timely  processing  of  the  appeals.  In  the  reporting  period,  83  complaints  were  filed 
against the decisions of the State Appeals Commission before the Administrative Court.  

On the prevention of corruption, the public procurement strategy includes measures to fight 
against  corruption  and  conflict  of  interest.  However,  the  follow-up  of  red  flag  reports 
published  on  the  PPB’s  website  is  insufficient.  The  country  should  improve  institutional 
coordination with  the  State Commission  for Prevention of Corruption  and law  enforcement 
institutions to follow up on the findings of red flag reports. 

Chapter 18: Statistics 

EU  rules  require  Member  States  produce  statistics  based  on  the  principles  of  professional 
independence, impartiality, reliability, transparency, and confidentiality. Common rules are 
in place 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  finalising  the  publication  of  the  population  census  data  in  December  2022. 
Improvements  are noted in most statistical areas and in aligning sectoral statistics with EU 
standards,  including  better  use  of  administrative  sources.  Continued  efforts  are  needed  to 
improve the scope and data quality underpinning macroeconomic and social statistics. 

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

→  carry out the agriculture census by June 2024; 

→  urgently  ensure  adequate  staffing  and  sufficient  financial  resources  for  the  State 

Statistical Office; 

→  continue  to  improve  macroeconomic  statistics,  notably  by  enhancing  consistency, 
timeliness and coverage of excessive deficit procedure and government finance statistics 
and  by  further  aligning  financial  accounts  and  quarterly  national  accounts  with  the 
European System of Accounts 2010 (ESA 2010). 

The statistical infrastructure has reached a high level of alignment with the EU acquis and 
international  standards.  In  February  2023,  the  government  adopted  a  new  programme  for 
statistical  surveys  for  2023-2027.  Another  main  statistical  producer  -  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. On quality management, in 2023 the State Statistical 
Office  (SSO)  introduced  an  internal  quality  audit  to  monitor  the  quality  of  products  and 
processes.  Human  resources  in  the  SSO  have  increased  only  slightly.  However,  the  SSO's 
69 

 
 
annual budget for regular operations increased by 9.4% in nominal terms in 2023 compared 
to 2022, reversing the previous 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 for the development 
of an employment register. In June 2022, the SSO started to test the logical design of the new 
national  statistical  business  register.  Overall  data  submission  to  Eurostat  has  further 
increased. 

The country made some progress on macroeconomic statistics. The SSO made very limited 
progress regarding the excessive deficit procedure (EDP) tables. The SSO transmitted EDP 
notification tables for North Macedonia to Eurostat in October 2022 and in April 2023. The 
latest  submission  included 2022 data  (i.e. for the first  time data  for t-1).  Significant further 
efforts are needed to improve the quality, consistency, coverage and timeliness of EDP tables 
and  government  finance  statistics  provided  through  ESA  2010  transmission  programme. 
Moreover, to comply with ESA 2010 rules on sector classification, it is needed to reclassify 
without further delay inside the government sector a large public company with a substantial 
impact on government deficit and debt . For the quarterly accounts, tables on GDP by income 
approach  were  compiled  and  sent  to  ESTAT  for  publication  in  August  2023  .  However, 
further  efforts  are  needed  to  ensure  the  completeness  and  quality  of  data  submitted  on 
quarterly national accounts. 

Trade  by  invoicing  currency  (TIC)  statistics  for  2022  were  submitted  to  Eurostat  in  March 
2023 in line with the latest European Business Statistics Regulation requirements. In October 
2022,  the  SSO  began  compiling  quality  reports  in  Eurostat's  European  Statistical  System 
metadata handling tool. It also compiled quality reports on detailed data for 2020 and on TEC 
data (trade by enterprise characteristics - TEC) for 2019. 2020 TEC data are fully harmonised 
with  the  Methodological  Manual  for  TEC  statistics.  In  January  2023,  these  data  were 
transmitted to Eurostat in SDMX format. 

The central bank continued to transmit annual financial accounts stock data to Eurostat (data 
series  2013-2021,  non-consolidated  balance  sheets  only)  and  to  prepare  experimental 
quarterly financial accounts data (stocks and flows), and annual flows data by sub-sector and 
financial instrument. It produced and disseminated external sector data in line with the latest 
6th BoP Manual (BPM6). 

On  business  statistics,  good  progress  was  made.  Regarding  inward  foreign  affiliates 
statistics, data for 2020 were published in December 2022. In June 2023, the SSO carried out 
a  third  pilot  survey  on  international  trade  in  services  statistics  by  geographical  breakdown. 
Work on tourism satellite accounts (TSA) was completed. In September 2022, the first TSA 
data  for  2019  was  published  and  submitted  to  Eurostat.  Based  on  the  European  business 
statistics  requirement,  the  structural  business  statistics  (SBS)  compilation  methodology 
improved, extending  the coverage of activities, and refining the calculation of the variables 
and  the  technical  format  for  the  data  transmission.  An  algorithm  for  calculating  the  basic 
variables for firms providing financial services was created and in October 2022, preliminary 
data  for  2021  was  sent  to  Eurostat.  In  March  2023,  the  final  business  data  for  2021  were 
published.  Work  is  under  way  to  set  up  a  'complex  enterprises'  statistical  unit.  Regarding 
business demography, in June 2022 the SSO provided Eurostat with the complete set of data 
for 2020 as required by the Regulation. 

Good progress was made on social statistics. The SSO published the 2021 population census 
data.  Based  on  this  census  data,  in  June  2023  the  SSO  produced  new  time  series  of  the 
population data at national level. Submission of the results of the survey on income and living 

70 

 
 
conditions  has  been  delayed  due  to  shortage  of  staff.  The  SSO  started  using  administrative 
registers  for  education  statistics.  Crime  statistics  data  for  2018-2021  were  submitted  to 
Eurostat  in  August  2023  .  In  summer  2022,  the  SSO  conducted  a  gender-based  violence 
survey. The results were submitted to Eurostat but metadata are missing and the data are not 
disseminated. Labour force survey micro data and the 2020 labour cost survey data were not 
submitted to Eurostat during the reporting period. 

Good progress is noted for agricultural statistics. In June 2022, the SSO carried out the pilot 
agricultural census. Preparations for the main agricultural census in 2024 need to be stepped 
up, including the legislative and budgetary framework. Data for fishery statistics were aligned 
to  EU  standards,  published  by  the  SSO  and  submitted  to  Eurostat  in  December  2022.  For 
forestry statistics, the SSO assessed the data sources for the compilation of forestry accounts.  

On  energy  and  environmental  statistics,  in  May  2023  monetary  environmental  accounts 
were  compiled  for  the  main  tax  categories  as  well  as  for  expenditure  on  environmental 
protection.  The  scope  of  the  environmental  goods  and  services  sector  accounts  was 
broadened.  Moreover,  physical  energy  flow  accounts  (PEFA)  were  compiled  for  each 
reference year between 2018 and 2020 using the 'PEFA builder'. Material flow accounts data 
were also regularly reported to Eurostat, although material flow balances are not yet included. 
The  inclusiveness  of  energy  balances  data  increased  thanks  to  the  inclusion  of  solar  heat 
energy. Data collection for energy statistics improved thanks to the re-design and reduction of 
number of statistical surveys for data collection. 

Chapter 32: Financial control 

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

The  country  is  moderately  prepared  in  the  area  of  financial  control.  Some  progress 
included the setting up of the Anti-Fraud Coordination Service Network, the adoption of the 
Organic  budget  Law  and  the  Law  on  inspection,  and  the  signature  of  a  Memorandum  of 
Understanding between the Parliament and the State Audit Office to strengthen follow-up on 
individual  audit  reports.  On  internal  control  and  managerial  accountability,  the  adoption  of 
the public internal financial control (PIFC) Law has been delayed for more than  two years. 
The  efficiency  of  financial  inspection  needs  to  be  strengthened.  The  independence  of  the 
State Audit Office is not yet guaranteed by the Constitution. The efficiency of parliamentary 
oversight of public funds and follow-up to audit recommendations needs to improve.  

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

→  adopt the new PIFC Law and related methodological tools and start to implement them to 
improve transparency, managerial accountability and sound management of public funds; 

→  adopt  the  draft  state  audit  Law  to  strengthen  the  State  Audit  Office’s  (SAO's) 
independence,  boost  cooperation  between  the  SAO  and  the  Parliament,  improve 
parliamentary scrutiny of individual audit reports and the follow-up of recommendations 
provided by SAO; 

→  ensure  the  efficient  functioning  of  the  Anti-Fraud  Coordination  Service  Network 
(AFCOS)  and  improve  the  prevention,  management  and  reporting  of  irregularities  that 
affect EU funds. 

71 

 
 
Public internal financial control 

PIFC  initiatives  are  included  under  pillar  VI  of  the  2022-2025  public  finance  reform 
programme. The implementation of the PIFC policy paper is included in the public financial 
management  reform  programme's  annual  monitoring  report  for  2022.  The  Organic  Budget 
Law  was  adopted  in  September  2022  after  a  long  delay  but  PIFC  reforms  continued  to  be 
undermined  due  to  delays  in  adoption  of  the  PIFC  law  and  limited  capacity  of  key 
institutions.  

The legal framework for internal control is broadly harmonised with international standards. 
Its implementation needs to be further strengthened. 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 and consistent application of the manual on 
managerial accountability is yet to be ensured.  

A  new  financial  inspection  Law  was  adopted  by  Parliament  in  January  2023  but  financial 
inspections are not yet working efficiently. This will require strengthening capacity, further 
developing methodological tools and ensuring their implementation.  

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

The Central Harmonisation Unit (CHU) continued to coordinate financial management and 
control  and  internal  audit  in  the  public  sector,  and  to  provide  methodological  guidance.  A 
new  unit  for  quality  check  on  the  financial  management  and  control  and  internal  audit 
operations  was  established.  However,  the  capacity  of  CHU  remains  insufficient.  CHU 
currently  has  eight  staff  for  monitoring  and  reporting  on  the  functioning  of  the  overall 
internal control system, which encompasses more than 1 300 public entities.  

External audit  

The  current  state  audit  Law  is  broadly  harmonised  with  international  standards.  The  new 
state  audit  Law  aimed  at  strengthening  the  public  sector's  external  audit  function  and 
increasing the SAO’s financial and operational independence - not yet guaranteed under the 
Constitution,  should  be  adopted.  The  SAO  carries  out  a  compliance  audit  on  the  final 
government accounts of the core budget by June each year. In 2022, the audit covered 82% of 
expenditure, which is an increase of 2% from last year. This included expenditure covered by 
the regularity audit for an amount of EUR 3 182 million EUR (i.e. 77%), expenditure covered 
by  the  performance  audit  for  an  amount  of  EUR 188  million  (i.e.  4%),  and  expenditure 
covered by the compliance audit for an amount of EUR 39 (i.e. 1%).  

The  2021  annual  report  on  the  audits  carried  out  was  adopted  by  the  Parliament  in  March 
2023  and  published  on  the  SAO’s  website.  Its  quality  was  deemed  sufficient.  In  2022,  the 
SAO  carried  out  the  full  audit  work  programme  consisting  of  188  audits,  including  171 
regularity  (financial  and  compliance)  audits,  10  performance  audits,  two  IT  audits  and  five 
compliance  audits.  Reports  were  sent  to  Parliament  for  deliberation  and  published  on  the 
SAO’s website.  The quality  of the audit reports is  acknowledged by local and international 
stakeholders. 

Regarding  its  institutional  capacity,  a  new  2023-2027  SAO  development  strategy  and 
related  action  plan  were  adopted  in  September  2022.  The  strategy  closely  aligns  with  the 
priorities  and  measures  set  out  in  2022-2025  public  financial  management  reform 
programme.  The  SAO  continues  to  work  on  the  2020-2023  human  resources  management 
strategy.  The  new  SAO  systematisation  act,  approved  in  December  2022,  provides  for  245 

72 

 
 
job posts, of which 114 or 46% are filled (104 audit staff, seven administrative support staff 
and  three  technical  staff)..  In  2022,  SAO  staff  increased  by  one  person.  The  SAO’s  2023 
budget was approved, and it has continued to implement the annual plan for the professional 
development and training of state auditors, to raise awareness of its activities among citizens 
and the media, and to implement the 2020-2023 communication strategy. 

On the impact of audits, in 2022 some actions were taken in response to 80% of the audit 
recommendations.  Cooperation  between  the  SAO  and  the  Parliament  continued  to  improve 
and  a  Memorandum  of  Understanding  between  the  two  was  signed  in  October  2022. 
Nevertheless, parliamentary scrutiny over budget preparation and implementation needs to be 
further enhanced. Transparency and accountability in the management of public funds needs 
to  be strengthened. This  will require efficient  monitoring mechanisms by the executive and 
the Parliament and the effective implementation of audit recommendations. 

To  combat  corruption,  PIFC  institutions  and  the  SAO  should  strengthen  cooperation  with 
anti-corruption/law  enforcement  institutions.  Moreover,  monitoring  systems  should  be 
strengthened  and  mechanisms  to  monitor  the  number  of  cases  investigated,  prosecuted  and 
subject to court resolutions as a result of internal audits or inspections should be developed. 

Protection of the EU’s financial interests 

Some  progress  was  made  in  2022  on  the  protection  of  EU’s  financial  interests.  The  legal 
basis  to  formally  establish  the  framework  for  the  protection  of  EU’s  financial  interests 
(AFCOS)  was  adopted  in  December  2022  and  AFCOS'  staff  has  been  extended  to  five 
employees.  National  legislation  is  broadly  aligned  with  the  EU  Directive  on  fighting  fraud 
affecting  EU’s  financial  interests  by  means  of  criminal  law.  Amendments  to  the  Criminal 
Code to further align it with the EU acquis were adopted by the Parliament in February 2023. 
The  national  2022-2025  anti-fraud  strategy  and  related  action  plan  were  adopted  by  the 
government in June 2022. The national authorities reported 85 cases of irregularities through 
the  irregularity  management  system  in  2022,  of  which  one  case  was  reported  as  suspected 
fraud. This is a further consolidation of the reporting trend of the last four years, which has 
seen a considerable improvement in comparison with previous years. The national authorities 
should continue their good cooperation with the European Commission on investigations.  

Protecting the euro against counterfeiting 

On  alignment  with  the  EU  acquis,  national  legislation  is  to  some  extent  aligned  with  EU 
regulations setting  out the system  for fighting euro  counterfeiting.  Progress in  the reporting 
period has been limited. The National Bank continued to improve its capacity by organising 
online  trainings  courses  and  by  involving  experts  from  all  key  institutions  in  capacity 
building. 

The  capacity  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 set up. 

3. 

GOOD NEIGHBOURLY RELATIONS AND REGIONAL COOPERATION 

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

North Macedonia maintained its engagement in a number of regional initiatives such as the 
Central European Free Trade Agreement, the Energy Community, the Transport Community, 
73 

 
 
the South-East European Cooperation Process and the Regional Cooperation Council. North 
Macedonia also actively participated in initiatives such as the Central European Initiative and 
the Centre for Security Cooperation. 

The  EU-Western  Balkans  Summit  in  December  2022  took  place  for  the  first  time  in  the 
region, in Tirana. The summit focused on the support to the region in the fields of energy and 
migration,  and  on  youth  cooperation,  roaming,  green  lanes  and  overall  progress  on 
implementing the Economic and Investment Plan. 

On  the  Common  Regional  Market,  a  political  breakthrough  was  achieved  at  the  Berlin 
Process  Summit  in  Berlin  in  November  2022,  where  leaders  adopted  three  mobility 
agreements respectively on higher education qualifications, on professional qualifications and 
on  free  movement  with  identity  cards.  North  Macedonia  has  ratified  all  three  mobility 
agreements  and  has  deposited  the  related  notification  instruments.  A  number  of  important 
decisions agreed at the technical level within CEFTA remain blocked.  

Overall, the country’s cooperation and  bilateral  relations with other enlargement countries 
and neighbouring EU Member States continued to evolve positively. 

Bilateral  relations  with  Albania  remained  good.  In  November  2022,  the  governments  of 
North  Macedonia  and  Albania  held  a  second  joint  session  in  Skopje,  during  which  the  two 
countries  signed  21 bilateral  agreements  and  memorandums  of  understanding  for  joint 
cooperation  in  a  number  of  areas,  including  security,  defence,  infrastructure,  energy, 
education, science and culture. Both governments agreed on three initiatives on Corridor VIII 
infrastructure of, the construction of a dry port in Struga, and the opening of the new Struga-
Pogradec  border  crossing  point.  Albania  and  North  Macedonia  will  also  set  up  joint 
investigation teams in the fight against organised crime. The countries also agreed to pursue 
cooperation  on  defence,  security,  digitalisation,  border  control,  improving  child  protection 
and the use of Albanian sign language in both countries. 

Relations between the North Macedonia and Bosnia and Herzegovina continue to be good. 
The  two  Foreign  Ministers  met  in  the  margins  of  the  meeting  of  the  Berlin  Process  and 
Foreign Ministers of the six Western Balkan countries in London. At the beginning of 2023, 
the  Foreign  Minister  of  Bosnia  and  Herzegovina  paid  an  official  visit  to  North  Macedonia. 
Several bilateral agreements are in place, including on cooperation on EU integration. 

Bilateral  cooperation  with  Kosovo  continues  to  be  intensive  and  constructive,  with  several 
meetings  held  at  the  highest  level.  The  President  of  Kosovo  visited  North  Macedonia  in 
April 2023. The Parliament of Kosovo set up a Group for Friendship with North Macedonia. 
The  Speaker  of  the  Parliament  of  Kosovo  paid  an  official  visit  to  North  Macedonia  in 
December 2022. In March 2023, the two Prime Ministers met in the margins of the Delphi 
Economic Forum. 

Bilateral relations with Montenegro  continued  to  be  good.  In  February  2023,  there  were 
comprehensive  political  consultations  between  the  Foreign  Ministries  of  both  countries  at 
State Secretary level, focusing on bilateral, EU and NATO-related issues. In February 2023, 
the President of North Macedonia met with the Prime Minister of Montenegro in the margins 
of  the  World  Economic  Forum  in  Davos.  The  Foreign  Minister  held  meetings  with  the 
President and Prime Minister of Montenegro in the margins of the Adriatic Charter meeting 
in March 2023. The two Prime Ministers met in the margins of the Delphi Economic Forum 
in March 2023. The two countries signed a Programme of Cooperation on culture for 2023-
2026. 

74 

 
 
Bilateral relations with Serbia are good. The two Prime Ministers met in the margins of the 
Munich  Security  Conference  and  the  Foreign  Ministers  met  twice  in  the  margins  of  other 
international  events.  In January 2023, the Serbian Defence Minister paid  an official  visit  to 
North Macedonia, and the two Ministers of the Interior signed a Protocol on border controls 
at  the  joint  Lojane-Miratovac  border  crossing  point.  In  March  2023,  the  Prime  Minister  of 
North  Macedonia  visited  Belgrade.  During  the  visit,  three  memorandums  of  understanding 
were signed on measures promoting the movement of persons and goods, cooperation in the 
mining and energy sector, and a project to establish an interoperable electronic road tolling 
system.  In  April  2023,  a  memorandum  of  understanding  on  cooperation  in  EU  integration 
was signed. 

Relations  with  Türkiye  are  good.  The  two  countries  celebrated  30  years  of  diplomatic 
relations.  The  Chairperson  of  the  Turkish  Grand  National  Assembly  paid  a  visit  to  North 
Macedonia in November 2022. In the wake of the devastating earthquake in the eastern part 
of Türkiye in February 2023, the government dispatched humanitarian aid, and soldiers and 
members of the Directorate for Rescue and Protection to provide aid.  In February 2023, the 
two countries signed a memorandum of cooperation on youth and sports. 

Relations  with  Ukraine  have  intensified  since  the  beginning  of  Russia’s  aggression.  North 
Macedonia  declared  support  for  Ukraine  as  a  priority  for  its  OSCE  Chairmanship  in  2023.  
North  Macedonia  supports  the  territorial  integrity  and  sovereignty  of  Ukraine,  condemning 
Russia’s  aggression  against  Ukraine.  North  Macedonia has  provided  humanitarian  and 
military assistance and is fully aligned with the EU’s package of restrictive measures against 
Russia.  North  Macedonia  and  Ukraine  have  agreements  on  trade,  the  protection  of 
investments,  culture,  education,  tourism,  transport  and  military  cooperation.  A  visa-free 
regime has been in place for short stays since 2019. 

Relations with Georgia  are good.  In his  capacity as incoming  OSCE Chairperson-in-office, 
North Macedonia’s Minister of Foreign Affairs met with his Georgian counterpart December 
2022. An agreement on culture is in place. 

Relations  with  Moldova  are  good.  North  Macedonia,  through  its  chairpersonship  of  OSCE 
follows the Transnistrian settlement process. In his capacity as OSCE Chairperson-in-office, 
North  Macedonia’s  Minister of Foreign  Affairs of travelled to  Chisinau  to address  some of 
the  challenges  Moldova  is  facing,  in  particular  the  situation  in  Transnistria.  Both  countries 
have agreements in place on transport, trade, customs, finance, medicine and health, police, 
foreign affairs and consular matters. There is no visa-free regime between both countries. 

During  the  reporting  period,  relations  with  Bulgaria  focused  on  the  next  steps  in  North 
Macedonia’s EU accession negotiations process and on the bilateral commitments under the 
Treaty  of  Friendship,  Good-Neighbourliness  and  Cooperation  and  its  Protocol.  North 
Macedonia  set  up  an  inter-ministerial  working  group,  chaired  by  the  Minister  of  Foreign 
Affairs,  to  coordinate  implementation  of  measures  provided  for  in  Protocol.  Thematic  sub-
groups  were  also  created  on:  hate  speech;  rehabilitation  of  victims  of  repression  from  the 
communist  period;  implementation  of  recommendations  adopted  by  the  Multidisciplinary 
Expert  Commission  on  Historical  and  Educational  Issues;  and  protection  against 
discrimination.  The  Multidisciplinary  Expert  Commission  on  Historical  and  Educational 
Issues  held  several  meetings  during  the  reporting  period.  In  October  2022,  the  President  of 
North  Macedonia  paid  an  official  visit  to  Bulgaria,  and  a  month  later  the  Foreign  Minister 
went  on  an  official  visit  to  Sofia.  In  October  2022,  the  two  Prime  Ministers  launched  the 
construction works on the eastern railway segment of Corridor VIII in North Macedonia at a 
ceremony  attended  by  several  ministers  from  both  countries.  In  December 2022,  the  two 
Foreign Ministers opened a bilateral business forum in Skopje. At the forum, four agreements 
75 

 
 
worth over EUR 3 million were signed by companies from both countries. Bilateral relations 
were  negatively  affected  by  statements  made  by  individual  politicians  and  by  several 
incidents, in particular those relating to Bulgarian cultural clubs, to celebrations of historical 
events and historical figures, football events and to the denial of entry of citizens, including 
Members  of  the  European  Parliament.  The  relevant  authorities  in  North  Macedonia  took 
some  steps  to  address  these  situations,  and,  where  necessary,  establish  accountability, 
including  by  launching  investigations  and  bringing  those  responsible  for  criminal  acts  to 
justice. Further efforts are needed to promote an atmosphere of dialogue and mutual respect. 

Cooperation  with  Greece  intensified,  particularly  in  key  areas  of  mutual  interest.  Progress 
was made on implementation of the Prespa Agreement and further efforts should continue in 
this  regard.  Several  meetings  were  held  at  Prime  Minister  and  Foreign  Minister  level.  In 
October  2022,  the  two  Prime  Ministers  met  in  the  margins  of  the  European  Political 
Community in Prague. In November 2022, the permanent mixed border commission held its 
10th meeting.  In  December 2022,  the  Foreign  Minister  of  North  Macedonia  paid  an  official 
visit to Greece, followed by a visit by the Deputy Prime Minister in charge of EU Affairs in 
January. The Greek Foreign Minister visited Struga in June 2023 to participate in the Prespa 
Forum Dialogue. The two countries intensified energy cooperation on the construction of the 
natural gas interconnector between North Macedonia and Greece. 

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 financial services and 
on  consumer  and  health  protection.  Limited  progress  was  made  on  the  free  movement  of 
goods, rights of establishment to provide services. No progress was made on company law, 
intellectual property law and competition policy and freedom of movement for workers.  

Overall, more progress is needed in the coming year in the areas covered by this cluster as it 
will  feed  into  the  preparations  of  North  Macedonia  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. 

North  Macedonia  is  moderately  prepared  on  the  free  movement  of  goods.  Although 
national legislation allows products to be traded freely, alignment with the latest EU  acquis 
needs to be intensified. Limited progress was made on last year’s recommendations by the 
76 

 
 
adoption  of  two  laws  to  align  with  the  EU  General  Products  Safety  Directive.  Most  of  last 
year’s recommendations therefore remain valid. 

In the coming year the country should, in particular:  

→  adopt  the  Law  on  market  surveillance  and  the  implementing  legislation  necessary  to 
complete  the  alignment  with  the  EU  General  Products  Safety  Directive,  and  start  to 
significantly increase the human resources that ensure market surveillance; 

→  prepare  and adopt a new action plan to  eliminate non-tariff barriers to  trade and ensure 
compliance  with  Articles  34-36  of  the  Treaty  on  Functioning  of  the  European  Union 
(TFEU); 

→  finalise and adopt a strategy for the free movement of goods to ensure further alignment 

of national legislation with the relevant EU acquis. 

General principles  

The  country  has  set  up  the  institutional  framework  for  the  production,  distribution  and 
marketing  of  industrial  products.  A  new  Law  on  technical  requirements  and  a  Law  on 
general  product  safety  designed to  align with  the relevant  EU  acquis were adopted,  but the 
relevant  implementing  legislation  has  not  yet  been  adopted.  A  new  Law  on  market 
surveillance also needs to be adopted.  

Non-harmonised area 

The follow-up  and implementation  of compliance with  Articles 34-36  TFEU is  ensured by 
the  Ministry  of  Economy.  The  Ministry  has  completed  a  screening  of  the  national  legal 
framework to identify areas not compliant with these articles. The drafting of an action plan 
for the elimination of non-tariff barriers to trade and to ensure compliance with Articles 34-
36 TFEU is under way. This should be completed, adopted, and implemented. 

Harmonised area: quality infrastructure 

The necessary institutional and legal structure for technical regulations, standards, conformity 
assessment,  accreditation,  metrology  and  market  surveillance  is  in  place.  The  National 
Standardisation  Institute  is  a  full  member  of  the  European  Committee  for  Standardisation 
(CEN) and the European Committee for Electro-technical Standardisation (CENELEC), and 
participates  in  the  work  of  relevant  EU  standardisation  bodies.  It  adopted  24 953  European 
standards as national standards and adopted 84 national standards.  

By June 2023, North Macedonia had 19 active conformity assessment bodies for calibration, 
testing, medicinal laboratories, product and process certification and inspection. The Institute 
for  Accreditation  of  the  Republic  of  North  Macedonia  is  a  member  of  the  International 
Accreditation  Forum,  of  the  European  co-operation  for  Accreditation  (with  which  it  has 
signed  a  Multilateral  Agreement)  and  also  party  to  the  Mutual  Recognition  Agreement  of 
International  Laboratory  Accreditation  Cooperation  (ILAC).  It  ensures  the  accreditation 
procedures for testing, calibration and medical laboratories, product certification bodies, and 
inspection bodies. There is no national accreditation scheme for the certification of personnel 
and for 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.  It  has  well  equipped  calibration  laboratories  for  mass,  temperature 
and  relative  humidity,  length  and  angle,  pressure,  volume  and  flow,  time  and  frequency, 
electrical  quantities,  acoustics  and  vibration  and  one  laboratory  for  testing  the  quality  of 

77 

 
 
fuels.  All  accredited  laboratories  are  signatories  to  the  European  Accreditation  Multilateral 
agreement. 

The State Market Inspectorate (SMI) is the main market surveillance body, along with the 
State Technical Inspectorate and the State Sanitary Inspectorate. There is also a coordination 
body for market surveillance. In 2022, the SMI carried out 539 inspections under the general 
product safety law (up from 428 in 2021) and 168 under the construction products law (up 
from 20 in 2020). This led to  59 harmful products being taken off the market, in  particular 
textiles and toys. The Inspectorate has 257 employees, but an insufficient number of licenced 
inspectors  (151).  There  is  no  efficient  software  system  for  market  surveillance  document 
management in place, including for the recording of inspection results or proper risk planning 
and management. 

Harmonised area: sectoral legislation 

On  ‘new  and  global  approach’  product  legislation,  the  level  of  alignment  with  the  EU 
acquis remains low. No progress was made on aligning with the relevant EU  acquis during 
the  reporting  period.  Since  January  2023,  10  Eurocodes  with  58  standards  and  57  national 
annexes have become obligatory in the construction sector.  

National  legislation  is  not  yet  aligned  to  the  latest  EU  ‘old  approach’  product  acquis  on 
motor  vehicles,  two  or  three  wheeled  vehicles,  tractors  (agricultural,  forestry),  or  non-road 
mobile  machinery  emissions.  New  laws  on  these  products  aligned  with  the  relevant  EU 
acquis need to be adopted. No progress has been made on alignment with the EU acquis on 
chemicals,  including  the  Regulations  on  Registration,  Evaluation,  Authorisation  and 
Restriction  of  Chemicals  (REACH),  chemicals,  classification,  labelling  and  packaging  of 
substances  and  mixtures  (CLP),  good  laboratory  practices  (GLP),  and  fertilisers  and 
detergents. Administrative capacity in the area of firearms also remains insufficient. 

On  procedural  measures,  notification  procedures  for  standards  and  technical  regulations 
are  ensured  by  the  Ministry  of  Economy  and  the  Standardisation  Institute.  National 
legislation  is  partly  aligned  with  the  EU  acquis  on  returning  cultural  goods  unlawfully 
removed from a Member State. On drug precursors, import or export of these products has 
to be pre-approved, and is tracked by a national IT system, and legal entities are obliged to 
report to the authorities any suspicion of abuse of manufacturing, marketing, unusual orders, 
theft  or  any  other  illegal  activity  regarding  narcotic  drugs  and  psychotropic  substances.  On 
civil  explosives,  economic  operators  need  to  be  licenced  by  the  authorities  to  buy,  sell, 
import and export, and use these products, and an electronic system is in place to track the 
purchase, transfer, import, transit, and export of explosive for civil use. 

The  national  strategy  for  the  prevention  of  corruption  pointed  out  that  the  inspectorates 
responsible for market surveillance and product safety are vulnerable to corruption, and that 
they have unclear and overlapping powers, and inadequate staffing. 

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 for 
workers.  No  progress  was  made  in  addressing  last  year’s  recommendations,  but  the 
authorities  organised  capacity  building  activities  for  civil  servants  who  will  work  on  the 
European  network  of  employment  services  (EURES)  and  the  European  Labour  Authority 
(ELA).  

78 

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

→  strengthen  the  capacity  of  the  Employment  Service  Agency,  by  continuing  training 
activities,  and  further  align  legislation  and  exchange  of  good  practices,  in  line  with 
EURES and ELA regulations; 

→  continue to adapt the legal framework to the EU  acquis on access to the labour market, 
particularly to rules on non-discrimination on grounds of nationality against EU workers 
in all sectors; 

→  continue negotiating and concluding bilateral agreements on social security coordination 
and  healthcare  insurance  with  EU  Member  States  and  put  in  place  administrative 
measures to prepare for accession. 

No progress was made on aligning national legislation with the EU acquis on access to the 
labour market. Foreign workers entering the country require a work permit. The Agency for 
Employment issues several types of work permits for foreign workers in line with the annual 
quotas set out in the Law on employment of foreigners. EU citizens still cannot access public 
administration  posts  and  some  posts  in  private  companies  are  also  exclusive  to  citizens  of 
North Macedonia. In 2022, North Macedonia issued 800 work permits to foreign workers and 
334 during the first five months of 2023.   

Capacity  building  activities  for  public  servants  took  place  in  the  area  of  EURES  and  the 
European Labour Authority over the reporting period. 

No  new  agreements  for  bilateral  coordination  of  social  security  systems  or  for  mutual 
recognition  of  the  healthcare  services  were  concluded  in  the  reporting  period.  The  country 
has  23  bilateral  agreements  in  place  for  the  coordination  of  social  security  systems,  out  of 
which 13 are with EU Member States.  It also has 18 agreements in place for mutual health 
insurance, out of which 12 are with EU Member States.  

Citizens of nine EU Member States may use the European Health Insurance Card  and the 
Card  is  recognised  by  public  and  private  healthcare  institutions  in  the  country  that  have  a 
contract with the Fund for Health Insurance. 

The Employment Service Agency needs to adopt an integrity policy document strengthening 
the efforts to fight corruption. 

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. EU rules on postal  services focus on improving the quality of 
universal service, gradually opening the market to competition, and the establishment of an 
independent regulator.  

On  the  right  of  establishment  and  the  freedom  to  provide  services,  North  Macedonia  is 
moderately  prepared.  It  made  limited  progress  notably  on  alignment  with  the  Services 
Directive. The legislative framework in the areas of postal services and mutual recognition of 
professional qualifications remains to be aligned with the EU acquis. 

Last  year's  recommendations  remain valid.  In the coming year,  North  Macedonia should in 
particular:  

→  adopt  and  start  implementing  the  2024-2025  action  plan  to  ensure  that  sectoral  laws 

79 

 
 
comply  with  the  EU  Services  Directive,  and  increase  the  amount  of  information  and 
ensure online access to services under a Point of Single Contact;  

→  further align legislation with the EU acquis on postal services, including with the Postal 

Services Directive and with the Regulation on cross-border parcel delivery; 

→  align with the EU acquis on mutual recognition of professional qualifications, including 
Directive on recognition of professional qualifications and Directive on a proportionality 
test before adoption of new regulation of professions.  

On  the  right  of  establishment  and  freedom  to  provide  cross-border  services,  North 
Macedonia  continued  to  align  its  legislation  with  the  EU  Services  Directive  by  adopting 
amendments  to  the  Law  on  performing  accounting  activities  and  the  Law  on  mineral 
resources. A new 2024-2025 action plan to address non-compliance of sectoral laws is being 
prepared.  The  point  of  single  contact  (www.uslugi.gov.mk)  needs  to  be  developed  and 
upgraded to meet the requirements set out in the Services Directive. By September 2023, 238 
services  for  citizens  and  businesses  were  accessible  online  (applications  may  be  submitted 
electronically).  

In the area of postal services, national legislation is aligned with the 1997 and 2002 Postal 
Services  Directives  and  partly  with  the  2008  Postal  Services  Directive,  as  the  designated 
universal  service  provider  (the  Post  of  North  Macedonia)  still  has    the  exclusive  right  to 
provide  reserved  postal  services  until  31  December  2023.  The  Postal  Agency  is  the 
independent regulatory authority ensuring compliance with postal law and monitoring quality 
of  service  against  European  standards  for  universal  service  provision  in  North  Macedonia. 
There are currently one universal service provider and 33 other postal operators. In view of 
the near future  postal market opening to full competition, preparations are ongoing to set up 
systems  for  accounting  separation  and  net  cost  calculation  of  the  universal  service,  in  line 
with the Postal Services Directive. North Macedonia is preparing to align its framework with 
the Regulation on cross-border parcel delivery services. The Postal Agency  and the Ministry 
of Transport and Communications should ensure they have sufficient administrative capacity 
to monitor and enforce the new postal market rules. 

No progress was made on the mutual recognition of professional  qualifications. The law 
designed to align with the relevant EU acquis has not yet been adopted. National legislation 
still  needs  to  align  with  EU  Directive  2005/36/EC  to  comply  with  minimum  training 
requirements. A transparent list of all regulated professions and an electronic register are yet 
to  be  put  in  place.  The  institutional  capacity  of  the  Ministry  of  Education  and  Science’s 
section  dealing  with  the  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,  with  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 on further aligning national law with the EU acquis, with the adoption of 
a new law to fight money laundering and financing of terrorism and implementing legislation 
on  the  law  on  payment  systems  and  services.  There  is  a  need  to  swiftly  further  strengthen 
administrative capacity. In the coming year, the country should, in particular: 

80 

 
 
→  refine,  adopt  and  implement  the  roadmap  with  actions  and  timelines  for  applying  EU 
rules on the free movement of capital, including the acquisition of agricultural land; 

→  continue to implement the new law on payment systems and services, including through 
market entry of new payment services providers, contributing to a broader high quality 
set of secure payment services, and through advancing the establishment of the unified 
register of bank accounts; 

→  on  the  fight  against  corruption,  implement  the  new  legislation  on  prevention  of  money 
laundering and financing of terrorism in line with the EU acquis, including by adopting 
the implementing legislation and by upgrading the register of beneficial owners.  

North  Macedonia  maintained  some  restrictions  on  capital  movements  and  payments.  For 
example, the opening of a bank account abroad by residents is still subject to restrictions and 
authorisation.  The  same  conditions  apply  if  residents  want  to  receive  insurance  services 
abroad. Non-residents can still not acquire agricultural land. In this respect, North Macedonia 
is lagging on its obligations under the Stabilisation and Association Agreement. The country 
should further refine and begin to implement the roadmap for applying EU rules in this area, 
in line with obligations under the Stabilisation and Association Agreement. North Macedonia 
maintains  a  register  of  direct  investments  and  a  register  of  real  estate  investments  for  both 
non-residents investing in North Macedonia and residents investing abroad. The registries are 
largely for statistical purposes and transactions cannot be blocked for failing to be registered 
therein. 

In  January  2023,  the  law  on  payment  systems  and  services  entered  into  force.  Good 
progress  was made in  terms of alignment of national  legislation with  EU rules on payment 
services, as the National Bank adopted a significant number of implementing acts on payment 
institution licensing, e-money institutions and payment system operators, as well as on their 
oversight.  Moreover,  steps  were  taken  to  facilitate  the  comparison  of  fees  among  payment 
service providers. As required by the fifth Anti-Money Laundering (AML) Directive, the law 
on payment systems and services also plans for a unified register of bank accounts to be set 
up under the Central Registry.  

to  money 

The new Law on the fight against money laundering and the financing of terrorism that aims 
to align with the fifth AML Directive entered into force in July 2022. After the onsite visit of 
the Council of Europe’s Committee of Experts on the Evaluation of AML Measures and the 
Financing of Terrorism in September 2022, the Moneyval plenary adopted the fifth Moneyval 
report  in  May  2023.  In  this  report,  North  Macedonia  has  been  rated  compliant  or  largely 
compliant  in  28  of  40  FATF  recommendations.  Among  the  shortcomings  identified  are  a 
the 
modest  number  of  convictions  related 
proportionality,  dissuasiveness  and  effectiveness  of  pecuniary  sanctions,  the  data  quality  of 
the Beneficial Ownership Register, lack of sanctions for failures related to basic or beneficial 
ownership information, technical deficiencies on confiscation, lack of systematic approach to 
conducting  a  financial  investigation,  and  a  low  number  of  Suspicious  Transaction  Reports 
compared  to  the  to  the  risk,  context,  and  size  of  the  country.    The  Financial  Intelligence 
Office  prepared  ad  hoc  assessments  of  specific  trends,  such  as  money  laundering  threats, 
proliferation  financing  and  transactions  conducted  through  fast  money  transfer  service 
providers.  It  also  improved  its  IT  applications.  In  2022,  obliged  entities  submitted  258 
suspicious  transactions  reports  (315  in  2021).  The  Office  sent  44  reports  (92  in  2021)  of 
money laundering and terrorism financing cases and 159 notifications (305 in 2021) of other 
cases to law enforcement bodies. (See also Chapter 23 - Judiciary and fundamental rights and 
Chapter 24 - Justice, Freedom and Security). 

laundering,  concerns  about 

81 

 
 
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. No progress was 
made during the reporting period. The country needs to step up efforts to align its legislation 
with the EU acquis in this area. 

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

→  align  national  legislation  with  the  acquis  on  encouraging  long-term  shareholder 
engagement,  on  cross-border  conversions,  mergers  and  divisions  and  on  the  use  of 
digital tools and processes in company law; 

→  adopt legislation on accounting and on audit aligned with the latest EU acquis in these 
areas,  to  include  strengthening  the  role  and  capacity  of  the  Council  for  Advancement 
and Oversight of Audit. 

On company law and corporate governance, alignment with the Company Law Directive is 
well  advanced  on  the  formation,  registration  and  domestic,  mergers  of  companies.  The 
Central  Registry  provides  a  modern  one-stop-shop  system  where  company  registration  and 
the filing of documents - including financial documents - can be carried out fully online. In 
the future, the national business register should be technically ready to interconnect with the 
EU  Business  Registers  Interconnection  System.  The  2021  Corporate  Governance  Code  is 
only mandatory for listed companies that meet certain criteria. National legislation is broadly 
harmonised  with  the  EU  acquis  on  the  legal  forms  Societas  Europaea  and  European 
Economic Interest Grouping, while draft legislation to partially align with the EU acquis on a 
European cooperative society awaits adoption by Parliament. Further alignment is necessary 
with the EU acquis on cross-border operations (mergers, divisions, conversions), as well as 
with the rules on the encouragement of long-term shareholder engagement (2017 Directive), 
and 2022 Directive on gender equality on boards of directors.  

On company reporting, a draft Law on accounting, aimed at further alignment with the EU 
acquis in this area, is going through the adoption process. North Macedonia will need to align 
with  the  most  recent  acquis  (2022)  on  corporate  sustainability  reporting.  International 
financial  reporting  standards  apply  to  all  companies,  with  no  reduced  obligations  for  small 
and medium enterprises as provided for in the EU acquis. Although certain provisions of the 
acquis on transparency requirements for listed companies are already well reflected in current 
national  legislation,  further  alignment  is  needed  in  this  area.  Adoption  is  also  pending  of  a 
new  draft  law  on  audit,  aimed  at  reaching  greater  harmonisation  with  the  EU  acquis, 
including  the area of investigations and sanctions Currently, there is  no body with  ultimate 
responsibility  for  statutory  audit  oversight,  as  required  by  the  EU  Audit  Directive.  The 
visibility  and  overall  performance  of  the  Council  for  Advancement  and  Oversight  of  the 
Audit remains poor. Efforts are needed to ensure its independence. 

Chapter 7: Intellectual property law 

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

82 

 
 
North Macedonia remains moderately prepared in the area of intellectual property law. No 
progress  was  made  over  the  reporting  period.  Further  efforts  are  needed  to  align  the 
legislation with the EU acquis in this area. 

As last year's recommendations were not implemented, they remain valid. In the coming year, 
North Macedonia should in particular: 

→ 

→ 

→ 

further improve the legal framework on copyright and related rights, notably by aligning 
with the Directive on collective rights management and the Directive on orphan works; 

further improve the legal framework on industrial property rights, by aligning with the 
Directive  on  the  enforcement  of  intellectual  property  rights  and  with  the  Directive  on 
trade secrets; 

implement the 2021-2026 intellectual property strategy and make operational the online 
information  platform  for  law  enforcement  institutions  to  exchange  data  on  intellectual 
property rights. 

In the area of copyright and related rights, the adoption of the amendments to the Law on 
copyright  to  further  align  it  with  the  EU  acquis,  including  on  the  collective  rights 
management  system,  orphan  works  and  certain  permitted  uses  of  certain  works  and  other 
subject  matter  protected  by  copyright  and  related  rights,  for  the  benefit  of  persons  who  are 
blind, visually impaired or otherwise print-disabled remains delayed. North Macedonia is not 
yet  aligned  with  the  Directives  on  online  transmissions  of  broadcasting  organisations  and 
retransmissions of television and radio programmes (SatCab II Directive), on copyright and 
related  rights  in  the  Digital  Single  Market  (DSM  Directive).  The  relevant  intellectual 
property rights unit in the Ministry of Culture remains significantly understaffed.  

Regarding  industrial  property  rights,  the  State  Office  for  Industrial  Property  (SOIP) 
continued  its  cooperation  with  the  EU  and  international  bodies,  in  particular  with  the  EU 
Intellectual  Property  Office  (EUIPO).  The  SOIP  also  started  to  fully  use  EUIPO’s 
harmonised  database  of  products  and  services  for  the  registration  of  trade  marks.  North 
Macedonia needs to further align its legislation with the EU acquis in this area, in particular 
on patents, trade secrets, and the Directive on IPR enforcement.  

On  enforcement,  the  hardware  infrastructure  of  the  information  platform  for  exchanging 
IPR-related data, still needs to be made operational, in order to provide full insight into the 
institutional  handling  of  IPR  infringements.  The  coordination  body  for  the  protection  of 
intellectual property needs to step up its activity to address the key challenges related to IPR. 
Substantial work is needed on the overall enforcement of IPR. 

From January until the end of August 2023, there were 18 cases of suspected infringement of 
intellectual  property  rights  involving  22  380  pieces  of  43  trademarks  of  seized  goods. 
Violation of intellectual property rights was confirmed in 7 cases (for 9 588 pieces) involving 
12 international trade marks. 

Chapter 8: Competition policy 

EU rules protect free competition. They include antitrust rules against restrictive agreements 
between  companies  and  the  abuse  of  a  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. 

83 

 
 
The country is moderately prepared in the area of competition. No progress was made in 
the reporting period. The Commission for Protection of Competition (CPC) continues to face 
budgetary and capacity constraints. The enforcement record remains low. 

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

→ 

further align the legislative framework, in particular the implementing legislation in the 
area of State aid and antitrust, with the EU acquis. 

→  ensure full transparency of State aid granted by the authorities; 

→ 

strengthen  the  administrative  and  financial  capacity  of  the  national  competition 
authority. 

Antitrust and mergers 

The legislative framework is broadly aligned with the EU acquis in the area of antitrust and 
mergers, although parts of implementing legislation remain to be aligned.  

On  the  institutional  framework,  the  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 remains 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 undermines enforcement.  

On  implementation,  the  number  of  merger  decisions  increased  from  81  in  2021  to  101  in 
2022, including decisions on small cases. The CPC should increase onsite inspections and use 
the leniency instrument to strengthen enforcement. Further strengthening, including training 
of judicial professionals is needed on the application of antitrust and merger rules. 

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  CPC  issues  non-binding  opinions  and  binding  decisions  on  State  aid.  The 
enforcement capacity of CPC staff dealing with State aid control remains insufficient.  

Concerning  implementation,  the  CPC  issued  27  decisions  and  33  opinions  on  State  aid  in 
2022. No negative or conditional decisions were adopted by the CPC in the reporting period. 
One procedural order has been adopted on completion of procedure examining the existence 
of unlawful State aid. Increased awareness among aid-granting public bodies of the existence 
of State aid rules is reflected in the growing number of requests for opinions and notifications 
of State aid submitted by the ministries to the CPC.   

Liberalisation 

Antitrust  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. 

84 

 
 
Chapter 9: Financial services 

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

The  country  remains  moderately  prepared  in  the  area  of  financial  services.  Some  progress 
was  made  on  further  alignment  with  the  EU  acquis  on  banks  and  financial  market 
infrastructure,  namely  through  adoption  and  entry  into  force  of  new  legislation  on  payment 
services  and  payment  systems,  on  financial  stability,  on  credit  risk  management,  and  on 
disclosure  of  banks’  data  and  reports.  Alignment  with  the  EU  acquis  on  the  supervisory  and 
regulatory  framework  for  credit  institutions  and  financial  market  infrastructure  is  well 
advanced. Alignment in the area of insurance and capital market is still lagging behind, partly 
due  to  the  size  and  the  structure  of  the  market.  The  central  bank  organisational  set  up  was 
restructured  to  reflect  its  function  of  a  bank  resolution  authority.  The  continued  failure  to 
effectively tackle and prevent unregistered and uninsured vehicles is a concern. 

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

→  adopt  the  recovery  and  resolution  law  to  allow  for  the  possibility  to  design  a  bank 
resolution authority and amend the law on deposit insurance as well as the banking law to 
improve deposit insurance in line with EU requirements; 

→  advance with the preparation and adoption of key pieces of legislation that regulate capital 
markets,  namely  the  Law  on  financial  instruments  and  the  Law  on  prospectuses  and 
transparency of security issuers; 

→  address  gaps  in  alignment  with  the  revised  versions  of  Capital  Requirements  Regulation 
and  Directive,  notably  with  the  net  stable  funding  ratio  and  align  with  the  Solvency  II 
Directive, notably pillar 1 and pillar 3 of that Directive.  

On banks and financial conglomerates, North Macedonia adopted in February 2023 a new 
methodology  on  credit  risk  management  and  a  decision  on  disclosure  of  banks’  data  and 
reports,  partly  aligning  with  both  the  Capital  Requirements  Regulation  and  Directive.  The 
central  bank  restructured  its  organisational  set-up  by  establishing  a  new  department  for 
banking  regulation  and  bank  resolution,  separate  from  the  bank  supervision  sector.  Basic 
ratios of the banking sector continue to be well above the minimum requirements. The Law 
on  deposit  insurance  and  the  Banking  Law  have  not  yet  been  amended  to  improve  deposit 
insurance, including  to  introduce depositor preference, in  line with  EU requirements and to 
address the concerns raised by the Constitutional Court in June 2021 revoking priority to the 
claims of the deposit insurance fund on a failed bank. Neither the legislation nor the capacity 
of the Ministry of  Finance to  license and supervise financial  companies  sufficiently protect 
consumers  and  both  therefore  require  reinforcement.  Legislation  on  the  bank  resolution 
authority  (including  a  Law  on  bank  resolution  and  its  implementing  legislation  and 
amendments to the Law on the central bank and the Banking Law) is yet to be adopted. The 
legal  and  institutional  set-up  for  establishing  the  financial  Ombudsperson  is  yet  to  be 
finalised. Legislation aligning with the requirements of the Covered Bond legislation is yet to 
be implemented.  

On  insurance  and  occupational  pensions,  legislation  aligning  with  the  Solvency  II 
Directive  is  yet  to  be  adopted.  A  new  rulebook  on  life  insurance  was  issued  linked  to  the 

85 

 
 
investment risks an insured person undertakes when investing in shares via investment firms. 
Legislation still allows the Ministry of Finance to set premiums for motor vehicle insurance, 
which is contrary to the EU acquis. Data on the proportion of vehicles that are uninsured is 
available,  but  it  is  unclear  whether  these  vehicles  are  actually  in  circulation.  Based  on  the 
number  of  non-insured  vehicles  discovered  through  controls,  the  portion  of  uninsured 
vehicles  was  5.8%  in  2022.  No  systemic  measures  are  taken  to  prevent  uninsured  driving. 
The  50%  limit  on  investing  in  non-domestic  securities  by  pension  funds  is  still  in  place, 
contrary  to  the  EU  acquis  and  the  second  stage  of  the  Stabilisation  and  Association 
Agreement (SAA).  

On  financial  market  infrastructure,  provisions  of  the  new  Law  on  payment  systems  and 
services  aim  to  achieve  a  high  level  of  alignment  with  the  settlement  Finality  in  payment 
systems.  Provisions  of  the  acquis  related  to  securities  settlement  systems  still  need  to  be 
reflected in the domestic legislation of North Macedonia. The country’s legislation is not yet 
aligned with the Financial Collateral Directive and new legislation in this area remains to be 
adopted.  The  new  Law  on  financial  stability  adopted  in  August  2022  regulates  the  status, 
composition, tasks and functioning of the Financial Stability Committee, an interinstitutional 
body that monitors the financial system and foresees actions to prevent financial instability.  

As  regards  securities  markets  and  investment  services,  the  Securities  and  Exchange 
Commission  issued  legislation  on  the  issuance  and  registration  of  foreign  securities  on 
domestic markets, as planned under the second stage of the SAA. Legislation still needs to be 
further aligned with the EU acquis, including the Markets in Financial Instruments Directive, 
the Prospectus Regulation, and the Capital Requirements Directive, as well as provisions on 
liquidity  and  solvency  ratios  for  brokerage  houses.  Moreover,  North  Macedonia  is  still  to 
align  with  the  EU  acquis  with  respect  to  MiFIR  (Markets  in  Financial  Instruments  and 
Amending Regulation) and benchmarks. As regards investment funds, North Macedonia has 
adopted  legislation  to  align  with  the  Directive  relating  to  undertakings  for  collective 
investment in transferable securities but further alignment with the EU acquis is required in 
this area. Moreover, North Macedonia is still to align with the EU acquis with respect to the 
Directive  on  alternative  investment  fund  managers  and  the  Directive  on  the  cross-border 
distribution of undertakings for collective investment in transferable securities. 

On sustainable and digital finance, North Macedonia is not yet aligned with the EU acquis 
on taxonomy, nor on EU Climate Transition Benchmarks, EU Paris-aligned Benchmarks and 
sustainability-related disclosures for benchmarks. The National Bank has started working on 
the development of a Strategy for the management of climate-related risks, which will cover 
regulatory and supervisory activities, as well as activities related to monitoring the impact of 
these  risks  on  financial  stability.  As  part  of  the  Strategy,  North  Macedonia  adopted  a 
Decision  on  the  methodology  for  credit  risk  management  in  February  2023,  according  to 
which banks will be required to adequately incorporate the climate-related risks in their credit 
risk management from January 2025. Finally, the  country’s Stock Exchange has prepared a 
Guide  for  environmental,  social  and  governance  (ESG)  reporting  for  listed  companies,  in 
order to raise awareness among policy makers, regulatory and institutional investors. 

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 has rules for upholding patients’ rights in cross-border healthcare and in 
preparing for and responding to cross-border health threats. 

86 

 
 
In  the  area  of  consumer  and  health  protection  North  Macedonia  remains  moderately 
prepared.  Some  progress  was  made  on  addressing  last  year’s  recommendations,  by  the 
adoption of the new Law on consumer protection, which is designed to align with many items 
of  the  EU  consumer  acquis.  The  other  recommendations  remain  valid.  The  country’s  first-
ever liver transplantation was made. Many challenges remain to be addressed in the area of 
public  health,  notably  in  regard  to  tobacco  control,  and  the  availability,  scope  of  services, 
geographical distribution and funding of primary healthcare and on cancer screening could be 
improved. Alignment with EU health acquis remains incomplete. 

In the coming year, the country should in particular: 

→  adopt  and  start  to  implement  the  next  three-year  consumer  protection  strategy  and 

reinforce the capacity for market surveillance;  

→  intensify efforts on tobacco control by implementing the relevant EU  acquis effectively 

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

→  ensure  adequate  funding  and  capacity  to  ensure  the  early  detection  of  cancer  and  rare 

diseases based on data from the registers. 

Consumer protection 

The country adopted a new Law on consumer protection designed to align with several of 
the EU consumer acquis, including the acquis establishing rules on unfair terms in consumer 
contracts, unfair business-to-consumer commercial  practices, price indication  timeshare and 
long-term  holiday  product,  resale  and  exchange  contracts,  consumer  rights,  digital  content 
and services, and the sale of goods. The Law on consumer protection is also designed to be 
aligned  with  the  latest  changes  to  EU  consumer  acquis  introduced  by  Directive  (EU) 
2019/2161 on the better enforcement and modernisation of Union consumer protection rules 
and the EU acquis on liability for defective products (relevant to product safety – see below), 
though implementing legislation on this still needs to be adopted. National legislation is not 
yet  aligned  with  the  current  EU acquis  on package travel.  The law on consumer protection 
clearly  defines  the  responsibilities  of  the  physical  and  legal  commercial  bodies  towards 
consumers. The next three-year consumer protection strategy is yet to be adopted. The web 
platform  providing  information  on  consumer  protection  still  needs  to  be  developed.  The 
mediation scheme remains expensive and difficult for consumers to access.  

Some progress was also made in aligning national product safety rules with the EU acquis 
(see  above).  The  country  now  needs  to  adopt  the  implementing  legislation  necessary  to 
complete  the  alignment  with  the  EU  General  Product  Safety  Directive.  The  State  Market 
Inspectorate intensified inspections under the national Law on general product safety (500 in 
2022, up from 428 in 2021) and carried out 130 inspections under the Law on construction 
products.  The  Inspectorate maintained its good cooperation with  the  customs for  control  of 
harmful  products  on  the  market.  The  number  of  inspections  increased  to  4  838  in  the 
reporting period. The number of licenced inspectors (170) remains insufficient as many of the 
staff  are  close  to  retirement.  On  non-safety-related  issues  further  efforts  are  needed  on 
developing the guidance and procedure for consumers’ appeals and means of compensation.  

Public health 

Primary  healthcare  in  North  Macedonia  is  provided  free  of  charge.  However,  the 
availability,  scope  of  services,  geographical  distribution  and  funding  of  primary  healthcare 
could  be improved. During the reporting period,  the  e-health application  was  updated with 
new  functionalities  and  new  modules,  and  a  mobile  application  called  “MyHealth”  was 

87 

 
 
launched.  This  allows  patients  access  to  their  health  record,  including  what  medical 
examinations  they  have  had,  referrals  to  specialists,  prescriptions,  vaccines  received,  and 
relevant  certificates.  Certain  specialists  continue  to  be  lacking.  The  ratio  of  doctors  and 
nurses  per  100 000  inhabitants  continues  to  be  below  the  EU  average,  and  medical  staff, 
nurses and specialists continue to leave the public health sector to work either in the private 
sector or abroad. Out-of-pocket healthcare costs remain high, at 38%, constituting a barrier to 
equal access to healthcare. 

No  progress  was  made  on  tobacco  control.  Though  the  institutional  and  legal  setup  is  in 
place  are  broadly  aligned  with  the  EU  acquis  on  smoking  in  public  places,  it  is  not 
systematically  implemented  and  is  still  broadly  tolerated  and  unsanctioned,  especially  in 
restaurants and other facilities, even in some closed areas. Smoking in public areas should be 
penalised in line with the EU acquis, but this is not fully applied. North Macedonia has not 
yet  ratified  the  Protocol  to  Eliminate  Illicit  Trade  in  Tobacco  Products.  On  communicable 
diseases, the upgrade of the syndromic disease reporting system in real time was completed. 
On COVID-19, few preventive measures remain in place.  

Progress  was  made  on  blood,  tissues,  cells  and  organs.  The  number  of  performed 
transplantations continued to increase, including the first-ever liver transplantation. However, 
the country is yet to align with the acquis on patients’ rights in cross-border healthcare. 

On medicines for human and veterinary use, legislation was adopted, designed to align to 
the acquis on residues of pharmacologically active substances, residues of pesticides and the 
maximum levels  of individual contaminants in  and on food  from  animal origin. As regards 
cancer  screening,  the  first  report  on  the  National  Register  of  Malignant  Neoplasms  was 
published.  A  comprehensive  and  proactive  approach  on  cancer  screening  is  lacking,  and 
funding  for  cancer  screening  is  insufficient.  Following  public  pressure,  funding  for  rare 
diseases somewhat increased but not sufficiently to cover the costs for medical treatment of 
all registered patients. An online survey was done on drug abuse prevention, and there was 
awareness raising in schools on drug abuse and alcohol related harm reduction. There was 
no  progress  on  healthy  environments.  Some  efforts  were  made  with  regard  to  fighting 
health  inequalities,  particularly  for  people  living  in  poverty  and  people  living  in  remote 
areas, though these were led by international organisations and the non-governmental sector 
rather than by the health authorities. 

The  national  strategy  for  the  prevention  of  corruption  identified  the  health  sector  and 
inspectorates  as  vulnerable  to  corruption,  in  particular  as  there  are  no  effective  criteria  for 
determining the prices of health services or of medicines. Procedures for treatment abroad are 
non-transparent and not objective. The inspectorates responsible for market surveillance and 
product  safety  have  unclear  and  overlapping  jurisdictions,  and  inadequate  staffing.  Most  of 
the  anti-corruption  strategy  activities  in  the  health  area  have  not  been  carried  out. 
Strengthening  integrity,  asset  declarations  and  digitalisation  are  considered  key  tools  for 
preventing corruption. 

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. 
The country is in between a moderate and a good level of preparation in the area of economic 
88 

 
 
and monetary policy. It has a good level of preparation in the areas of science and research 
and in  the customs  union. Some progress  was made in  the  areas of taxation,  economic and 
monetary  policy,  enterprise  and  industrial  policy,  science  and  research  policy,  as  well  as 
social policy and employment. More efforts are needed, however, particularly in areas where 
limited  progress  was  made,  such  as  digital  transformation  and  media,  customs  union,  and 
education and culture. 

Chapter 10: Digital transformation and media 

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

internal  market 

functioning  of 

the  smooth 

the 

The  country  is  moderately  prepared  in  the  area  of  digital  transformation  and  media. 
Limited progress was made during the reporting period, consisting of a slight increase in the 
number  of  electronic  services  offered  to  citizens  and  businesses.  The  Law  on  audio-visual 
media was amended in order to align with the EU Directive on Audiovisual Media Services 
of 2018 in July 2023. North Macedonia joined the Digital Europe Programme in 2023. The 
services of the 112 European emergency number were further developed. 

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

→  finalise  and  adopt  the  long-term  information  and  communication  technology  (ICT) 
strategy;  finalise  and  adopt  the  national  cybersecurity  strategy  for  2023-2027;  align 
national  legislation  with  the  European  Electronic  Communications  Code,  the  EU 
broadband  cost  reduction  Directive;  the  EU  Directive  on  security  of  network  and 
information systems (NIS 2 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. 

The  country  continued  to  successfully  participate  in  the  Digital  Agenda  for  the  Western 
Balkans  and  benefit  from  the  regional  roaming-free  agreement.  In  line  with  the  2019-2023 
national broadband operational plan’s targets, 5G signal was expanded to Skopje. Authorities 
continued  to  carry  out  activities  included  in  the  2018-2022  national  cybersecurity  strategy. 
However,  there  is  need  for  better  coordination  and  interinstitutional  cooperation.  North 
Macedonia  needs  to  adopt  the  national  cybersecurity  strategy  for  2023-2027.  The  112 
European  emergency  number  services  increased  their  capacity,  but  communication  among 
emergency services and human resources need further improvement. 

On  electronic  communications  and  information  technologies,  in  2022,  75.57%  of  all 
households  had  access  to  fixed  broadband  internet,  while  nationwide  broadband  coverage 
with  30-100  Mbps  stood  at  82.84%  and  >100Mbps  at  63.1%.  Mobile  broadband  take-up 
increased  to  86.12%.  Only  2.53%  of  all  households  had  access  to  ultrafast  broadband 
internet.  Segregated data on access  to  internet  by schools, hospitals, enterprises, etc., is  not 
collected by the Agency for Electronic Communications. This Agency granted approvals for 
the  use  of  radiofrequencies  for  5G.  Telecom  operators  continued  to  invest  throughout  the 
country.  No  progress  was  made  on  aligning 
legal  framework  on  electronic 
communications with the EU acquis. The Broadband Competence Office publishes biannual 
reports on the broadband development in the country and the implementation of the National 

the 

89 

 
 
Operational  Broadband  Plan.  Authorities  need  to  align  national  legislation  with  the  EU 
Broadband Cost Reduction Directive.  

The alignment of national legislation with the EU Regulation on electronic identification and 
trust  services  for  electronic  transactions  in  the  internal  market  (eIDAS  Regulation)  was 
further delayed. Alignment with the Digital Services Acts and Digital Markets Act needs to 
be stepped up, to provide predictability for the business community. Amendments to the Law 
on  audio  and  audio-visual  media  services  were  adopted  on  18  July  2023,  thus  aligning  the 
legislation with the Audiovisual Media Services Directive. 

On  competitive  safeguards,  the  telecom  market  remains  predominantly  shared  by  the  two 
biggest mobile operators.  

transformation, 

information  and  communication 
Regarding  digital 
technologies strategy for 2021-2026 has not been adopted. The strategy's activities on digital 
skills development should be built upon and supported with specific measures. The country 
signed an association agreement to the Digital Europe Programme on 30 June 2023. 

long-term 

the 

The  national  regulator  promoted  cybersecurity  through  its  national  centre  responding  to 
computer  incidents.  Cyber-related  incidents  were  reported  in  145  entities  such  as  state 
institutions,  banking,  health,  energy,  transport  and  communications  organisations.  Better 
coordination  and 
is  needed  on  cybersecurity  and  on 
strengthening the National Cybersecurity Council’s capacity. State institutions need to further 
strengthen their cyber capacity and infrastructure. 

interinstitutional  cooperation 

The new law on security of networks and information systems,  needs to be adopted to align 
with the NIS and NIS2 Directives. The Ministry of Information Society and Administration 
needs  to  strengthen  its  capacity  to  drive  the  digital  transformation  and  media  reforms.  The 
full independence of the regulator for electronic communications needs to be ensured. 

The national e-portal for services has been upgraded. The number of institutions connected to 
the interoperability platform was increased, but the platform is not being used by most of the 
state  institutions  because  of  the  lack  of  communications  software.  To  modernise  and 
digitalise  the  public  sector,  more  efforts  and  better  cooperation  among  institutions  are  still 
required.  The  quality  of  data  in  the  population  register  needs  to  be  improved  and 
continuously verified with other registers. The number of digital services offered through the 
governmental  e-portal  remains  modest,  392,  mainly  consisting  of  services  that  are  rarely 
requested  and  used.  State  institutions  need  to  ensure  better  cooperation  in  advancing  the 
digitalisation of the government 96.940 users were registered on the national e-portal. 

With  regard  to  e-commerce,  online  shopping  increased.  On  statistical  performance  and 
digital  competitiveness,  the  collection  of  data  based  on  the  Digital  Economy  and  Society 
Index (DESI) indicators needs to be improved. 

On audio-visual policy, the Parliament failed to appoint new members of the media regulator 
and the public broadcaster councils, despite this being a precondition for accelerating media 
reforms. The Public Service Broadcaster received additional funding, thus slightly increasing 
its percentage. (See also the section: freedom of expression). In July 2023, the Law on audio 
and  audio-visual  media  services  was  amended  to  align  with  the  2018  EU  Directive  on 
Audiovisual Media Services. 

During  the  reporting  period,  the  Agency  for  Audio  and  Audio-visual  Media  Services 
continued to fulfil its legal obligations on the promotion of media literacy, to analyse gender 
equality  in  the  media  and  to  supervise  the  broadcasters.  The  media  regulator  publicly 
condemned  the  pressure  and  threats  on  journalists  and  media  outlets.  The  national  strategy 

90 

 
 
and  action  plan  on  building  resilience  and  confronting  hybrid  threats  (2021-2025)  includes 
measures  to  address  disinformation  and  hybrid  threats.  However,  efforts  to  combat 
disinformation  are  limited.  The  audio-visual  sector  continued  to  benefit  from  the  country’s 
participation in the MEDIA and cross-sectoral strands of the Creative Europe programme. 

Chapter 16: Taxation 

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

North  Macedonia  is  moderately  prepared  in  the  area  of  taxation.  Some  progress  was  made 
specifically  in  amending  its  preferential  tax  regime  in  the  technological  and  industrial 
development zones. As a result, North Macedonia was removed from the Annex II list of  the 
non-cooperative  jurisdictions  for  tax  purposes.  The  country  has  yet  to  start  the  automatic 
exchange of financial account information as per the Organisation for Economic Co-operation 
and Development (OECD) standard. 

As some of last year’s recommendations were not fully implemented, they remain valid. In the 
coming year, North Macedonia should in particular: 

→  develop a new integrated IT tax system for the Public Revenue Office  (PRO), improve its 

compliance risk management and the strategic reform process of the PRO; 

→  start preparations for putting in place a mechanism to implement the automatic exchange of 
financial  account  information  with  EU  Member  States  effectively,  in  line  with  the  OECD 
global standard. 

On indirect taxation, the VAT exemptions and preferential rates for essential products were 
removed at the end of 2022. A preferential VAT rate of 10 % was applied for some energy 
products to alleviate the effects of high international energy prices. The preferential VAT rate 
of 10% for electricity for households was applied until 30 June 2023. Delays still remain in 
the VAT refund process, as only 45% of the requests submitted in 2022 were refunded within 
the legal deadline of 30 days.  

There  were  some  changes  to  direct  taxation.  A  personal  income  tax  flat  rate  of  10%  was 
complemented with  a rate  of  15%  for income stemming from games of chance. Exemption 
from  taxation  on  interest  on  savings  and  from  taxation  on  capital  gains  on  securities  was 
abolished with the amendments to the Law on personal income tax, as of 1 January 2023. The 
country still needs to align its legislation with the Merger Directive. 

On  administrative  cooperation  and  mutual  assistance,  North  Macedonia  has  signed  49 
double  taxation  agreements,  including  with  all  EU  Member  States  except  Cyprus,  Malta, 
Portugal  and  Greece,  with  whom  negotiations  are  ongoing.  The  country  has  not  yet 
committed on a date to start the automatic exchange of financial account information as per 
the  OECD    standard.  The  country  remains  dedicated  to  implementing  the  Inclusive 
Framework  on  Base  Erosion  and  Profit  Shifting  (BEPS)  minimum  standards.  In  January 
2023, North Macedonia amended its preferential tax regime in the free economic zones, thus 
meeting  the  Forum  on  Harmful  Tax  Practices  and  the  EU’s  requirements  to  promote  good 
governance in the area of taxation.  

Regarding  operational  capacity  and  computerisation,  the  PRO  still  has  to  improve  its 
business  processes,  implement  a  new  integrated  IT  tax  system  replacing  the  current 
fragmented  IT  system,  develop  compliance  risk  management  and  continue  to  expand  e-
services. Work on the 2021-2025 tax system reform strategy continues. During the reporting 

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period, the Law on PRO was amended to allow for a more dynamic organisational structure 
to correspond with the ongoing IT modernisation process. A stronger monetary incentive for 
customers to request invoices on their purchases was introduced, 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 in  order to  improve tax collection. 
The PRO and the State Commission for  the Prevention of Corruption signed an Agreement 
on  data  exchange  and  cooperation.  The  PRO  is  obliged  to  provide  data  from  the  unique 
register of taxpayers to  the SCPC, in  accordance with  the Law on prevention of corruption 
and conflict of interest.  

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  is  in  between  a  moderate  and  a  good  level  of  preparation  in  the  area  of 
economic and monetary policy and some progress was made. A new Organic Budget Law 
was adopted by Parliament in September 2022 and the drafting of implementing legislation 
was initiated. The three members of the new Fiscal Council were  appointed by Parliament 
in September 2023. On monetary policy, alignment of the country’s legal framework with 
the EU acquis remains at an advanced stage. On economic policy, the information provided 
in  the  fiscal  strategy  has  been  enhanced  ,  but  alignment  with  the  EU  fiscal  framework  is 
only partial and shortcomings on the monitoring of the fiscal risks persist.  

In the coming year, North Macedonia should in particular: 

→  adopt implementing legislation to the Organic Budget Law with a view to fully applying 
fiscal  rules,  a  strengthened  medium-term  budgetary  framework  and  a  prudent 
management of fiscal risks; 

→  take  the  necessary  legislative  and  organisational  steps  to  enable  the  Fiscal  Council  to 

take up operations and assess the 2024 budget and the new fiscal strategy; 

→  exclude the central bank from the scope of the Law on administrative servants, the Law 

on public sector employees and the Law on the payroll system. 

On monetary policy, the alignment of the legal framework of North Macedonia with the EU 
acquis remains at an advanced stage. In line with the objectives of the European System of 
Central  Banks,  the  central  bank  pursues  price  stability  as  its  primary  objective.  The  central 
bank  also  supports  economic  growth  through  its  policies.  A  subordinate  objective  is  to 
contribute  to  safeguarding  a  stable,  competitive  and  market  oriented  financing  system. 
Monetary policy has been appropriately tightened in  response to  rising inflation. Continued 
vigilance  remains  important,  also  in  view  of  a  wide,  albeit  narrowing  inflation  differential 
with the euro area. The functional and financial independence of the central bank is provided 
for  in  the  Law  on  the  National  Bank.  There  is  a  need  to  maintain  the  central  bank’s 
independence in its key statutory tasks, including in staffing issues, in line with the Law. In 
that vein, the central bank needs to be excluded from the scope of laws which may affect its 
independence,  including  the  law  on  administrative  servants,  the  law  on  public  sector 
employees as well as the newly proposed public sector payroll law. The central bank should 
be able to  conduct  internal  organisations and  employment plans without having  to  seek the 
approval of the government. 

Regarding  economic  policy,  North  Macedonia  began  drafting  implementing  legislation  for 
the 2022 Organic Budget Law (OBL) in line with the EU Budgetary Frameworks Directive. 
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The new Law provides for numerical fiscal rules for the general government deficit and debt , 
the  establishment  of  an  independent  fiscal  council,  and  improvements  in  the  medium-term 
budgetary framework. The provisions of the new OBL should be swiftly implemented in full. 
The medium-term fiscal consolidation presented in the 2023-2027 Fiscal Strategy is reflected 
in  the  2023  budget,  supported  by  a  rules-based  budget  framework  under  the  new  Organic 
Budget  Law.  Preparations  have  advanced  on  setting  up  an  independent  Fiscal  Council  to 
monitor compliance with the rules and verify macro-fiscal projections, and the medium-term 
fiscal framework was strengthened within the 2024-2028 fiscal strategy which was adopted in 
June 2023. Limited progress was made on strengthening the monitoring of fiscal risks related 
to  state-owned  enterprises,  public-private  partnerships  and  local  government  units.  As 
envisaged  by  the  OBL,  there  is  a  need  to  develop  a  comprehensive  registry  of  state-owned 
enterprises and a methodology to assess related risks.  

The 2023-2025 Economic Reform Programme (ERP) was submitted on 1 February 2023. 
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 May 2022. The level 
of implementation of the policy guidance has improved compared to last year, notably due to 
progress  in  the  macro-fiscal  area.  The  ERP’s  macro-economic  framework  is  coherent  and 
consistent,  while  somewhat  optimistic.  For  structural  reforms,  the  focus  is  on  addressing 
properly-identified key structural challenges, including the green transition.  Implementation 
of  the  ERP’s  structural  reforms  measures  needs  to  improve,  as  it  has  been  affected  by  the 
limited capacity of public institutions and a focus on short-term measures to offset the energy 
crisis.  

Chapter 19: Social policy and employment  

EU rules in the social field include minimum standards for labour law, equality, health and 
safety  at  work  and  non-discrimination.  They  also  promote  social  inclusion  and  social 
protection, and social dialogue at EU level.  

The  country  remains  moderately  prepared  in  the  area  of  social  policy  and  employment. 
Some progress was made, notably on steadily reducing unemployment and increasing social 
assistance benefits. The Youth Guarantee scheme was implemented successfully throughout 
the country. The negative impact of the energy crisis was offset by the continuous application 
of social protection measures, ensuring that the poverty rate did not increase. 

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

→  continue to implement the Youth Guarantee as well as activation measures for vulnerable 

groups, and set up systems to properly evaluate the measures; 

→  enhance the capacity of the State Labour Inspectorate to better address matters related to 
occupational safety and health; develop a system for tracking and monitoring injuries and 
fatalities  at  work;  and  continue  to  reinforce  bipartite  social  dialogue  focusing  on 
collective  bargaining  and  to  strengthen  the  role  and  activity  of  social  partners  in  the 
private sector; 

→  finalise the set-up of a monitoring system, ensure proper evaluation of social services and 

continue the social protection reform with emphasis on employment activation. 

On labour law, extensive public consultations were held across the country on the yet-to-be-
adopted  new  law  on  labour  relations.  As  of  March  2023,  the  minimum  salary  increased  by 
approximately  12%.  The  capacity  to  implement  labour  policies  and  legislation  did  not 

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increase, and a reduction  in the number of competent  staff in  public institutions  was  noted. 
The capacity of the State Labour Inspectorate (SLI) is as insufficient as last year. The annual 
plan for individual professional development and training of labour inspectors is under way 
but capacity needs to be increased further, in particular in the area of occupational safety and 
health. The SLI signed a memorandum for cooperation with the Public Revenue Office and 
the Ministry of Interior to improve efficiency and cooperation for preventing irregularities in 
labour law, the fight against human trafficking and labour exploitation. 

On health and safety at work, the 2021-2025 strategy for occupational safety and health and 
2021-2023 action plan remain valid. The main challenge remains the inadequate application 
of  the  provisions  of  the  existing  Law.  Employers'  and  employees'  knowledge  of  their 
respective  rights  and  obligations  on  health  and  safety  at  work  remains  limited  whereas  the 
capacities of labour inspectorates need to be further increased. However, the national award 
on  health  and  safety  has  raised  awareness  among  employees.  The  SLI  carried  out  24 965 
inspections  (16 026  on  labour  relations  and  8 939  on  occupational  safety  and  health). 
Shortcomings and irregularities were identified in 38% of the inspections, mainly resulting in 
warnings (3 202). 

On social dialogue, social partners engaged in constructive tripartite social dialogue both at 
national  and  local  level.  The  level  of  their  involvement  in  policy  development  and  policy 
change  is  inconsistent,  representing  a  significant  challenge  .  In  July  2023,  a  new  collective 
agreement  for  public  sector  employees  was  signed  between  unions  and  authorities.  The 
bipartite social dialogue continues to face challenges due to poor adoption and enforcement 
of  collective  agreements  affecting  workers'  rights  and  job  security.  Measures  to  encourage 
collective  bargaining  and  strengthen  the  role  of  social  partners  in  the  private  sector  are 
insufficient. Overall implementation of the Law on the peaceful settlement of labour disputes 
remains poor, with  only five recorded cases  of successful amicable resolution in  2022. The 
capacity of social partners remains low, affecting the efficiency of social dialogue.  Overall, 
more strengthening of social dialogue and promoting collective bargaining in both the public 
and private sectors is required including from the authorities.  

On employment policy, the labour market forecasting model was extended to 11 additional 
descriptions,  bringing  the  number  of  occupations  covered  to  85.  The  2021-2027  national 
employment strategy and the 2021-2023 employment action plan remain valid. Measures to 
tackle  undeclared  work  included  in  the  2018-2022  strategy  for  the  formalisation  of  the 
informal  economy  continued.  Authorities  adopted  the  strategy  for  the  formalisation  of  the 
informal  economy  2023-2027  along  with  the  Action  Plan  for  the  period  2023-2025  in 
September 2023. Active labour market measures and the reinforced Youth Guarantee scheme 
are  currently  not  sufficiently  monitored,  evaluated  and  assessed.  The  Employment  Service 
Agency is under-staffed.  

The  employment  rate  (aged  20-64)  in  Q4-2022  was  61.8%  for  the  whole  population.  The 
unemployment  rate  decreased  further  to  13.7 %  in  Q4-2022.  The  female  employment  rate 
increased  by  3.2%  (51.8%  of  15-64  year-olds).  Youth  (15-24  year-olds)  employment 
remained at  18.3% and  youth  unemployment decreased to 31.8% in Q4-2022, compared to 
34.9%  in  Q4-2021.  The  main  measure  addressing  youth  unemployment  remains  the  Youth 
Guarantee  scheme.  A  new  plan  for  implementing  the  2023-2026  Youth  Guarantee  was 
adopted  by  the  authorities  in  March  2023.  In  2022,  more  than  20 000  young  people 
participated  in  the  scheme,  with  43%  of  them  successfully  finding  employment  or  training 
opportunities.  969  Roma  people  participated  in  the  scheme,  out  of  which  148  found 
employment.  

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On  participation  in  the  European  Social  Fund,  it  is  important  to  ensure  that  state  bodies 
have the necessary capacity to manage the indirect management with the beneficiary country 
system. (See also Chapter 22 - Regional policy and coordination of structural instruments). 

Progress was made on social inclusion and protection and on minimising the impact of the 
pandemic  and  energy  crises.  Additional  subsidies  were  introduced,  ensuring  more 
comprehensive  coverage  for  people  in  need.  Guaranteed  minimum  assistance  (GMA)  was 
extended to reach 35 748 households. In addition, 31.7% of GMA recipients benefited from 
the child allowance and  21.2% from  education allowances. Coordinators  were appointed to 
facilitate  communication  between  employment  services  and  social  work  centres,  and 
guidelines for supporting individual activation plans were developed. The 2022-2032 national 
programme for the development of social protection was adopted along with a roadmap for 
future improvements. The new 2023-2030 strategy for rights of persons with a disability and 
the  2023-2025  action  document  are  yet  to  be  adopted.  The  software  for  integrating  cash 
benefits and social protection services needs to become operational. The decentralisation of 
social  assistance  remains  at  a  moderate  level.  The  accessibility  of  public  services  such  as 
socio-health, employment, vocational education, and in particular specialised services for the 
people  with  disabilities  and  Roma,  remained  limited.  The  employment  of  Roma,  the  long-
term and low-skilled unemployed, and people with disabilities is supported by the guaranteed 
minimum assistance scheme introduced by the Law on social protection. 

As part of the national strategy on de-institutionalisation a total of 57 residential units were 
made  functional  by  June  2023,  providing  living  support  to  children  and  adults  with 
disabilities. The number of children under the age of 18 in institutional care remained stable. 
The  adoption  of  a  methodology  for  licensing  and  calculating  social  service  costs  enabled 
services such as home care, personal assistance, supported living, and respite care to be set up 
and improved. A total of 85 civil society organisations and private providers of social service 
assistance are now available to serve the diverse needs of individuals.  

On  non-discrimination  in  employment  and  social  policy,  a  comprehensive  legislative 
framework is in place. However, the Law on promotion and protection against discrimination 
needs to fully align with EU anti-discrimination provisions. 53.5% of the cases on which the 
Commission  for  the  Prevention  and  Protection  against  Discrimination  worked  referred  to 
employment and labour relations. (See also Chapter 23 - Judiciary and fundamental rights). 

On equality between women and men in employment and social policy, the gender gap in 
the labour market remains. In particular, the employment rate for men was 56.3% compared 
to 38.3% for women in 2021. Furthermore, 55.5% of women are inactive compared to 33.3% 
of men. Data on and a monitoring system for incidents of sexual harassment in the workplace 
are still not available. Some progress was made with the adoption of the 2023 programme for 
social  security  support  for  women  in  agriculture,  entitling  women  with  'insured  individual 
farmer'  status  to  maternity  benefits  for  the  first  time.  Childcare  and  pre-school  capacity 
increased  during  2022  with  the  opening  of  seven  new  institutions  and  10  facilities  within 
public  institutions.  Childcare  facilities  increased,  reaching  a  total  of  36 125.  Childcare 
capacity needs to be increased in urban areas in particular. The gender pay gap persists and 
authorities need to produce reliable data monitoring the gap. The 2022 Labour Force Survey 
indicated that the gap is a result of the fact that women are mostly concentrated in low-paying 
sectors  and  positions.  The  average  net  wage  for  men  in  2021  was  2.6%  higher  than  the 
average net wage, while the average net wage for women was 3.9% lower than the average 
net wage.  

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The work to prepare the Law on the prevention and protection against workplace harassment 
continued  while  the  ILO  convention  190  –  2019  Violence  and  Harassment  was  adopted  in 
June 2023.  

Chapter 20: Enterprise and industrial policy  

EU 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  the  area  of  enterprise  and  industrial  policy.  Some 
progress  was  made  on  last  year's  recommendations  and  entailed  measures  to  increase  the 
competitiveness  of  domestic  companies.  Recommendations  from  last  year  therefore  remain 
largely valid and in the coming year, the country should, in particular:  

→  consolidate  the  institutional  structure  and  mandates  of  public  bodies  and  increase  the  

effectiveness of industry and enterprise  policy measures; 

→  adopt and start  implementing the export promotion strategy; 

→  start  implementing  the  new  2023-2027  strategy  for  formalising  the  informal  economy, 

with an action plan, and ensure high-level political commitment. 

Enterprise  and  industrial  policy  principles  are  incorporated  in  numerous  strategic 
documents  under  the  competence  of  different  national  authorities.  Overall  coherence  and 
coordination is lacking in this area. Overlapping and conflicting mandates continue to make 
the  institutional  set-up  complex  and  resources  inefficient.  To  address  this  issue,  the 
government adopted a plan to consolidate part of the administrative structure, with merging 
some institutions and integrating others into the Ministry of Economy. However, the plan is 
yet  to  be  implemented  (see  also  the  section  on  public  administration  reform).  Progress  in 
implementing the 2022-2026 growth acceleration plan is slow.  

The  State  Audit  Office  identified  shortcomings  in  measures  for  tourism,  for  companies 
affected  by  COVID-19,  the  operation  of  the  Fund  for  Innovations  and  Technological 
Development  as  well  as  in  the  Directorate  for  technological  zones  (see  also  the  section  on 
Accountability of the administration and chapter 32 – Financial Control).    

The  dialogue  with  chambers  of  commerce  through  the  joint  platform  continued  throughout 
the  reporting  period.  The  conduct  of  stakeholder  consultations  though  is  irregular  (see  also 
sections  on  Economic  Criteria  and  Public  administration  reform).  Legislation  related  to 
companies is frequently amended without an adjustment period for companies. 

The business environment was negatively affected by several factors, such as an increase in 
the  minimum  wage  and  in  some  para-fiscal  charges.  There  was  some  progress  against 
informal business activities: a methodology to streamline para-fiscal charges was developed 
and  taxation  got  somewhat  less  distortive.    The  2023-2027  strategy  for  formalising  the 
informal  economy  and  an  action  plan  2023-2025  were  adopted  in  September  2023. 
Cooperation  of  SMEs  in  innovation  activities  and  ICT  training  by  enterprises  require  more 
attention to reverse an unfavourable development over the past years. The export promotion 
strategy, targeting the internationalisation of domestic companies is still to be adopted.  

On policy instruments, in April 2023, North Macedonia signed the Association Agreement 
for the participation in the EU Programme “Single Market Programme”.   

Amendments to the Law on financial discipline to further align with the EU Late Payments 
Directive were adopted in June 2023. Nevertheless, still some key issues need to be clarified, 

96 

 
 
for  example  the  criteria  of  calculation  of  the  payment  periods  or  the  right  to  the  flat  fee 
compensation.  

The Development Fund was established in 2022 and the mechanism for the functioning of the 
Hybrid Strategic Green Investment Fund has been put into operation for support to export of 
innovations and to European Green Deal practices. To mitigate the effects of the energy crisis 
and  high  inflation,  the  government  introduced  support  measures  that  should  be  better 
targeted. Numerous policy measures based on grants to companies are in place, but  as they 
have  the  potential  to  distort  market  competition  and  incentivise  informal  business  while 
lacking transparency, they need to undergo an in-depth evaluation.  

In terms of sectoral policies, as a first step towards developing a circular economy roadmap, 
the Ministry of Economy completed the mapping of the circular economy potential. 

Chapter 25: Science and research  

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

The  country  has  a  good  level  of  preparation  in  the  area  of  science  and  research.  Some 
progress was made on strengthening the research and innovation capacity of the public and 
private sector by increasing the budget for science, by developing the yet to be adopted smart 
specialisation  strategy  and  through  the  country’s  continuous  improvement  in  the  Horizon 
Europe participation. Some of last year's recommendations remain valid.  

In the coming year, the country should: 

→  increase investment in research in line with the new European Research Area priorities; 

→  develop  dedicated  measures  aiming  to  promote  and  increase  participation  in  Horizon 

Europe and other relevant EU financing instruments in this area; 

→  adopt 

the  smart  specialisation  strategy  and  start  developing  measures  for 

its 

implementation. 

Some progress was made to align with European standards on research and innovation. The 
budget for science in 2022 and 2023 has been increased significantly compared to 2021 (to 
approximately EUR 3.5 million from EUR 1.3 million). However, investment in research and 
innovation continues to remain low, at 0.38% of GDP, while the participation of the private 
sector in the overall research is even lower, at 0.1% of GDP.  

The country’s participation in Horizon Europe, the EU’s framework programme for research 
and innovation, has continued to increase, reaching for 2022 (according to data availability at 
publication  date),  10  projects  with  EUR  4  million  funding,  surpassing  the  whole  2021 
performance. Authorities need to strengthen their participation in the new European Research 
Area  and  in  the  new  European  Innovation  Agenda.  No  progress  is  noted  on  the  European 
Charter  for  researchers,  the  Code  of  Conduct  for  the  recruitment  of  researchers  and  the 
number of  HR  Excellence in  Research logos issued  over the  reporting period. The national 
technology transfer roadmap has not yet been developed.  

On innovation, the European Innovation Scoreboard classifies for a second consecutive year 
North  Macedonia  as  an  ‘emerging  innovator’  marking  however  an  increase  in  its  score 
performance from 45.6% in 2022 to 46.3% of the EU average in 2023. In 2022, the Fund for 
Innovation  and  Technological  Development  committed  nearly  EUR 16.5 million  to  support 

97 

 
 
innovation and research in 209 private companies. Τhe Fund’s efforts to intensify synergies 
between businesses and academia need to continue to increase prioritising the facilitation the 
green and digital transitions. The Fund needs to comply with the findings of the State Audit 
Office’s  compliance  audit  report,  issued  in  December  2022.  Authorities  should  further 
support  the  academia-business  cooperation.  The  European  Institute  of  Innovation  and 
Technology  (EIT)  announced  that  in  the  2023  EIT  higher  education  initiative,  two  higher 
education  institutions  from  North  Macedonia  were  selected  for  funding  as  full  partners  of 
large consortia.  

The  smart  specialisation  strategy,  the  main  policy  document  for  innovation  and  research 
with  clear  sector-specific  priorities,  has  not  been  adopted  yet,  providing  a  safeguarded 
framework for an efficient use of research and innovation funds.  

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 with the adoption and introduction  of guidelines 
and programmes to strengthen inclusiveness and promote green skills. The implementation of 
the 2018-2025 education strategy continued to be slow, as did the development of a proper 
monitoring system. The adoption of key legislation was further delayed.  

The  recommendations  of  last  year’s  report  remain  valid.  In  the  coming  year,  North 
Macedonia should in particular: 

→  finalise and adopt the Law on secondary education and the Law on vocational education 

and training and set up and operationalise the regional VET centres; 

→  adopt the Law for adult education; 

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

The 2018-2025 strategy for education is the main document governing the education sector, 
but  its  monitoring  mechanisms  are  not  well  defined.  Targets  and  indicators  need  to  be 
improved to allow a proper evaluation of the implementation of the reforms. Authorities need 
to strengthen coordination among institutions in developing legislation, ensuring a conducive 
institutional environment able to deliver its implementation.  

The new law on VET which is essential for the VET reform is yet to be adopted. Its adoption 
is  also  needed  to  enforce  the  role  of  the  country's  five  regional  VET  (RVET)  centres.  A 
cooperation  scheme  is  in  place  between  business  companies,  vocational  high  schools,  the 
Chambers  of  Commerce  and  the  Ministry  of  Education  to  support  students’  internships  in 
private  companies.  Approximately  100  dual-education  classes  opened  under  this  scheme, 
supported by public-private partnerships.  

The  Law  for  adult  education  has  not  yet  been  adopted.  The  Bureau  for  Development  of 
Education  continued  its  activities  for  the  Concept  for  primary  education  by  preparing 
curricula  for  primary  grade  6,  based  on  the  national  standards,  including  green  skills 
provision. 

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In  November  2022,  the  Ministry  of  Education  and  Science  adopted  the  'Concept  for 
secondary  adult  education'  to  help  improve  quality  of  life  for  citizens  and  enable  social 
development.  

Public  spending  on  education  and  training  decreased  slightly  to  3.71%  of  GDP  in  2022 
(3.98% in 2021), which is still far below the EU average of 5%. Although some progress was 
made  on  pre-school  education,  the  overall  level  of  enrolment  remained  lower  than  the 
regional  and  EU  standards,  especially  for  Roma  children.  Whereas  the  EU  education  and 
training target on early childhood education and care attendance is set at 96%, only 42% of 3-
6  years-olds  were  enrolled  in  licenced  early  childhood  education  institutions  in  2022.  In 
addition to expanding capacity to extend pre-school education to more children,  the quality 
of pre-school education was increased. 

96.63% of children were enrolled in primary education (of which 51.46% were boys, 48.54% 
were girls) and 85.59% in secondary education (of which .49% were girls, 51% were boys) in 
the  2021/2022  school  year.  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 3 years.  

Although North Macedonia has taken steps toward the digital transformation of its education 
and training system and digital skills are addressed throughout primary and secondary either 
cross-subject or through the subject of informatics, authorities need to continue to strengthen 
efforts towards effective, coherent and inclusive digital transformation of the education and 
training systems in North Macedonia, including the capacity of the systems to develop digital 
skills.  

The country had engaged in international assessments of the education system (TALIS 2022, 
PISA  2022)  during  the  reporting  period.  North  Macedonia  is  not  taking  part  in  ICILS 
(International  Computer  and  Information  Literacy  Study).  The  country  continued  to 
participate in the European Education Area (EEA) Working Groups 2021 - 2025.  

The  National  Agency  for  Erasmus  organised  and  supported  more  than  100  activities  and 
events  targeted  at  young  people.  The  number  of  participants  in  funded  youth  exchange 
projects was 465 in 2022 (compared to 294 in 2020).  

North  Macedonia  continued  to  participate  in  Erasmus+  and  the  European  Solidarity  Corps 
and    participated  also  in  the  call  for  proposals  for  the  European  universities  initiative,  with 
one  university    winning  a  grant  as  part  of  a  successful  alliance.  North  Macedonia  is 
participating in the European Education Area working groups 2021-2025.  

With  regard  to  inclusion,  a  modified  programme  for  students  with  complex  needs  was 
launched in October 2022. The Bureau for the Development of Education prepared guidelines 
for developing and implementing a modified curriculum for primary students with complex 
needs.  The  Bureau  also  developed  two  training  modules  for  inclusive  school  teams,  and 
courses were conducted online. The number of Roma educational mediators increased further 
to reach 40, up from 35 in 2021, making their services available to 28 municipalities, up from 
26  in  2021.  In  higher  education,  authorities  granted  135  scholarships  to  Roma  students. 
During the reporting period 450 scholarships were granted to children in primary education to 
support inclusiveness   

On culture and the protection of cultural heritage, a new national strategy for 2023-2027 on 
the development of culture needs to be developed by the Ministry of Culture, ensuring also 
the appropriate budget allocations. The annual budget allocations for culture have decreased 
steadily in the last 3 years. Reforms following the recommendations of the functional analysis 

99 

 
 
of  the  Ministry  of  Culture  and  specialised  bodies  were  further  delayed.  The  Ministry  of 
Culture and other relevant institutions need to strengthen their capacity to create and manage 
cultural policies based on sound public administration principles. In September 2023 Skopje 
was recommended to become the European Capital of Culture for 2028.  

Further efforts are needed to reinforce institutional response and interinstitutional cooperation 
to protect cultural heritage and prevent illegal constructions. This includes the protection of 
cultural  heritage  sites  of  ‘particular  importance’,  such  as  lake  Ohrid  and  the  Skopje  Old 
Bazaar. The country’s cultural heritage is not sufficiently safeguarded.  

North  Macedonia  continued  to  fully  participate  in  the  Creative  Europe  programme's  media 
and  cross-sectoral  strands.  Authorities  amended  the  national  legislation  in  order  to  align  it 
with the 2018 Audio Visual Media Directive, which is a prerequisite for country’s continuous 
participation  in  the  programme.  The  number  of  beneficiaries  of  the  Creative  Europe 
programme remains satisfactory.  

In  the  reporting  period  authorities  developed  the  national  youth  strategy  for  2023-2027, 
which is yet to be adopted.  

In  October  2022,  North  Macedonia  signed  the  Council  of  Europe’s  Convention  on  the 
Manipulation  of  Sports  Competitions  (Macolin  Convention),  which  calls  on  public 
authorities  to  cooperate  with  sports  organisations,  betting  operators  and  competition 
organisers to prevent, detect and penalise the manipulation of sports competitions.  

With  regard  to  transparency,  the  State  Educational  Inspectorate  in  cooperation  with  the 
Bureau  for  the  Development  of  Education,  is  responsible  for  the  implementation  of  the 
national  curricula  and  supervises  the  implementation  of  the  relevant  legislation  in  all 
educational institutions.  

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. Limited progress was made 
on  consolidation,  application  and  upgrade  of  IT  systems  while  the  Concept  of  authorised 
economic  operators  (AEO)  was  further  promoted,  including  through  regional  cooperation 
initiatives among the customs administrations of the WB6 countries. The implementation of 
the  New  Computerised  Transit  System  Phase  (NCTS)  Phase  5  is  facing  delays.  North 
Macedonia has yet to ratify the Protocol on Elimination of Illicit Trade in Tobacco Products. 

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

→  implement the New Computerised Transit System Phase 5; 

→  continue  the  consolidation  and  full  application  of  its  IT  systems,  including  alignment 
with  the  Commission's  Multiannual  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 2023 customs tariff was 
adopted  to  reflect  the  latest  changes  in  the  EU  Combined  Nomenclature.  The  CEFTA 
Additional  Protocol  5  on  trade  facilitation  was  implemented,  and  the  authorised  economic 

100 

 
 
operators  (AEO)  concept  was  further  promoted.  So  far,  27  companies  have  been  AEO-
certified.  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  are  consistently  applied.  A  comprehensive  intelligence  system  in  support  of 
investigation and enforcement is in place. Risk management is applied systematically with the 
percentage of physical controls at 5.9 % and documentary controls accounting for 15.7 % of 
all shipments in 2022.  

Revenues  collected  by  the  Customs  Administration  increased  by  15%  compared  to  2021, 
totalling close to EUR 2 billion. The one-stop control with Serbia was implemented and the 
one-stop system was also established at the man border crossing with Albania in August 2023 
.  The  digitalisation  of  customs  procedures  continued  and  a  green  customs  declaration  was 
introduced,  enabling  import  and  export  procedures  to  be  completed  in  one  hour,  fully 
paperless. The 2021-2025 strategy for ICT development, aimed at coordinating the alignment 
of national  systems with  those of the EU,  was implemented.  The implementation of NCTS 
Phase  5  is  facing  delays.  The  System  for  Electronic  Exchange  of  Data  (SEED+)_is 
operational, ensuring harmonised work of the agencies present at the borders. 

The number of seizures  doubled compared to  the previous year, with  114 seizures  in  2022, 
including drugs, as well as foreign currency, gold and undeclared excise goods  . Cooperation 
and  exchange  of  intelligence  with  the  customs  agencies  from  the  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); and environment and climate 
change (chapter 27).  

North  Macedonia has achieved a good level  of preparation in  trans-European networks and 
some  level  of  preparation  on  environment  and  climate  change.  The  country  is  moderately 
prepared  on  transport  and  energy  policy  with  some  progress  made  in  the  area  of  energy, 
particularly on regional gas interconnectors and on renewables. Substantial efforts are needed 
in areas where limited progress was achieved, such as transport, trans-European networks and 
environment.  The  country  needs  to  accelerate  the  implementation  of  the  Economic  and 
Investment Plan and of the Green Agenda for the Western Balkans in 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. 

The country is moderately prepared in the area of transport. Limited progress was made in 
the  reporting  period  in  all  transport  modes  though  there  was  a  partial  alignment  with  the 
aviation  safety  legislation.  The  sector  inspection  bodies  still  lack  administrative  and 
operational capacity. Political commitment is still missing to deliver on necessary rail sectoral 
reforms.  

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

101 

 
 
 
→  ensure  qualified  operational  and  administrative  capacity  of  the  inspection  bodies  and 
develop their enforcement capacity to reduce deaths on the road and on rail infrastructure;  

→  implement  the  connectivity  reform  measures  on  rail  reform  and  open  the  rail  transport 
market,  amend  national  law  to  remove  breaches  of  provisions  of  the  Transport 
Community  Treaty  on  opening  up  the  rail  market,  and  finalise  pending  border-crossing 
agreements/protocols; 

→  adopt and implement legislation on intelligent transport systems (ITS).  

On the general transport acquis, the key strategic documents for transport and its sub-sectors 
are in place. Limited progress has been made in developing the action plan to accompany the 
2018-2030 national transport strategy. Preparation of the national ITS strategy has progressed 
but it has not yet approved  and national laws are still not aligned with the ITS Directive. 

The operational and administrative capacity for all modes of transport is still lacking and no 
effort  has  been  made  to  strengthen  them.  The  result  of  this  situation  is  the  ineffective 
implementation  of  the  Green  Agenda  for  the  Western  Balkans.  The  law  on  air  and  railway 
accident  investigation  has  still  not  been  fully  implemented.  The  independent  rail  accident 
investigation body has  still  not  been created. Larger cities should develop  sustainable urban 
mobility  plans,  which  respect  environmental  and  social  standards,  following  best  EU 
practices.  Further  efforts  are  needed  to  align  with  the  acquis  on  public  passenger  transport 
services by rail and by road. 

Although  North  Macedonia  is  actively  engaged  in  the  work  of  the  Transport  Community, 
there was limited progress on the implementation of the Transport Community Treaty action 
plan and elements of the smart and sustainable mobility strategy for the Western Balkans. 

The  legal  framework  for  road  transport  is  broadly  aligned  with  the  EU  acquis  and  no 
progress was made during the reporting period. The Law on dangerous goods is aligned with 
the EU acquis, but there is still no legal entity appointed to conduct a conformity assessment 
on the existing equipment for the transport of dangerous goods. The executive body for road 
traffic  safety  has  still  not  been  set  up  as    the  law  has  not  been  adopted.  Further  efforts  are 
needed  to  align  with  the  social  and  safety  acquis.  The  national  accident  and  investigation 
body  still  needs  to  be  set  up.  Similarly,  no  action  plans  on  road  safety  inspection  and  audit 
have  been  adopted  and  implemented.  The  scope  and  the  quality  of  the  road  safety  statistics 
have  been  improved  though  additional  steps  are  required  to  align  fully  with  the  EU  acquis. 
Enforcement  and  the  technical  capacity  of  the  State  Transport  Inspectorate  remain  weak. 
Penalties for infringing the European agreement on the work of crews of vehicles engaged in 
international road transport (AETR) still lack harmonisation. The five-year road maintenance 
plan has not been published since 2017; road maintenance is still carried out inefficiently and 
needs  to  be  improved.  More  efforts  are  needed  to  align  with  the  EU  acquis  on  road 
infrastructure safety management and minimum safety requirements for tunnels in the trans-
European  road  network.  Legislation  on  clean  energy  and  energy  efficient  road  transport 
vehicles is not aligned with the EU acquis. 

On  rail  transport,  the  main  requirements  of  the  EU  acquis  are  met  in  terms  of  the 
unbundling  of  the  infrastructure  manager  and  the  national  operator.  Further  alignment  with 
large parts of the single European railway area acquis continue to be delayed. The rail market 
is yet to be opened at domestic level. Amended railway safety and interoperability legislation 
was  adopted  in  2016,  but  lacks  proper  enforcement.  Preparations  for  strengthening  the 
operational  capacity  of  the  Railway  Safety  Directorate  have  started.  There  has  been  no 

102 

 
 
progress  in  setting  up  an  accident  and  investigation  body.  The  agreement  on  cross-border 
railway cooperation with Greece is yet to be finalised.  

In the area of maritime transport, North Macedonia, as a landlocked country, participates 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, but 
not  with  the  Regulation  on  the  recognition  of  certification  and  transportation  of  goods  and 
passengers.  The  country  does  not  participate  in  the  EU  strategy  for  the  development  of  the 
Danube  Region  but  continues  to  contribute  actively  in  the  International  Commission  of  the 
Sava  River  Basin.  More  efforts  are  needed  in  aligning  the  legislation  with  common  rules 
applicable to the passengers by inland waterway. 

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  was  made  and  technical  experts  have  started  work  on 
setting up a multimodal node near Skopje. The specific legislation is partially aligned with EU 
rules. Progress needs to be made on adopting relevant legislation and setting up systems for 
electronic freight transport information exchange. 

North Macedonia should increase efforts to align with and implement  EU passenger rights 
legislation.   

Chapter 15: Energy  

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

North Macedonia is moderately prepared in the area of energy. Some progress was made 
in  regional  gas  interconnectors  and  on  renewable  energy,  with  investments  in  solar  power 
plants.  As  the  energy  crisis  has  demonstrated,  North  Macedonia  needs  to  accelerate  its 
transition towards green energy and reduce its dependence on gas and coal.  

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

→  ensure  coherent  energy  policy,  improve  governance  and  institutional  capacity  in  the 
energy sector and improve strategic investment programming and accelerate the transition 
towards green energy in accordance with the Green Agenda for the Western Balkans and 
the  national  energy  strategy,  as  well  as  update  and  implement  the  national  energy  and 
climate  plan-NECP),  in  line  with  the  2030  Energy  Community  climate  and  energy 
targets; 

→  adopt and implement the energy efficiency implementing legislation; 

→  complete  the  unbundling  (certification)  of  the  gas  transmission  systems  operators  and 

foster market development and regional market integration; 

The  government  adopted  a  national  energy  action  plan  in  December  2022,  which  includes 
measures to mitigate the socio-economic impact of the energy crisis in North Macedonia, as 
well as a review of the energy sector's strategic, institutional and legislative framework. The 
action  plan  formed  the  basis  for  a  policy  dialogue  on  the  EU  Energy  Support  Package  (of 
EUR 80 million). 

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The need for a coherent  and coordinated energy policy became even more evident with the 
energy  crises.  The  government  should  increase  its  administrative  capacity  for  dealing  with 
energy policy, strategic planning and investments in the energy sector.  

Concerning  security  of  supply,  the  energy  crises  have  demonstrated  the  country's 
dependence  on  coal  and  the  need  to  accelerate  the  transition  towards  green  energy.  Both 
Bitola  and  Oslomej  thermal  power  plants  were  operating  on  coal  from  limited  domestic 
resources and imports. The lack of availability of coal for the Bitola thermal power plant still 
needs to be urgently addressed, by investment in new renewable resources. The Compulsory 
Oil  Reserves  Agency  adopted  a  2023-2025  action  plan  for  the  formation  of  mandatory 
reserves to release stocks in the case of an emergency. The oil stocks correspond to at least 53 
days of average daily consumption.  

The construction of a new 400kV electricity transmission interconnector line with Albania is 
under  way.  An  electricity  day  ahead  market  has  been  established  and  the  market  coupling 
with Bulgaria is progressing while the establishment of the intra-day market is still pending. 
On  gas  interconnections,  the  government  has  finalised  the  initial  design  phase  for  the 
construction of an interconnection line with Greece and has drawn up feasibility studies for a 
line to Serbia and to Kosovo. 

Concerning  the  internal  energy  market,  the  national  framework  legislation  is  in  line  with 
the  EU’s  third  energy  package  in  gas  and  electricity,  and  the  country's  electricity  and  gas 
markets  are  open  for  competition.  However,  the  transposition  and  implementation  of  the 
newly adopted electricity integration package is pending. 

The  electricity  transmission  and  distribution  network  operators  have  been  unbundled,  in 
accordance  with  the  EU  acquis.  The  gas  transmission  system  operator  has  not  yet  been 
certified  as  required  by  the  third  energy  package.  Amendments  to  the  Energy  Law  were 
adopted, transposing  the Regulation  on  wholesale  energy market  integrity and  transparency 
(REMIT) and the TEN-E regulations.  

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 
Skopje, Tetovo, and Gostivar are progressing. The tendering process for awarding a public-
private partnership for gas distribution system is ongoing.  

Wholesale  gas  prices  are  fully  deregulated;  however  the  market  remains  illiquid,  without  a 
virtual trading point. All contracts are concluded bilaterally, on a monthly and yearly basis. 

The  Energy  Regulatory  Commission  is  functional  and  has  continued  to  demonstrate 
regulatory independence. The Commission for  the  Protection of Competition  carried out  an 
investigation concerning the sales of electricity to the universal  supply company. The State 
Audit Office has conducted several audits in relation to the energy crises and the operators. 
The electricity transmission system operator must address the findings of the 2016 and 2023 
audit reports and improve their operations. 

In the area of  hydrocarbons, the Law on mineral  resources remains  to  be aligned with  the 
Hydrocarbon-Licensing Directive. 

On  renewable  energy,  the  Renewable  Energy  Directive  (REDI)  remains  to  be  transposed. 
The amended Energy Law makes the adoption of the national energy climate plan (NECP) a 
legal  obligation  for  the  country, replacing  the  renewable  energy sources  (RES) action  plan. 
The  NECP  sets  the  target  for  the  share  of  renewable  energy    sources  in  gross  final 
consumption of energy in 2030 at 38%, and the indicative target for 2023 at 26%. The share 
of  RES  in  the  gross  final  energy  consumption  for  2022  was  18.8%.    Investments  in 

104 

 
 
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. An upgrade of 
the grid system is necessary. 

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  cancelling  guarantees  of  origin  is  not  in  place.  Electricity  prosumers  are 
supported  by  the  rulebook  on  renewables,  and  implementation  should  be  enhanced.  The 
procedures for the installation of photovoltaics on buildings is complicated and an obstacle to 
new investments. 

The  Government  adopted  a  Just  Transition  roadmap  and  a  coordination  mechanism  for 
governing and monitoring, in June 2023. The transition towards clean energy should include 
measures  mitigating  the  negative  social  and  economic  impacts  of  the  planned  phase-out  of 
coal-fired power plants in the concerned regions. 

The  Law  on  energy  efficiency  is  aligned  with  the  Directive  on  energy  efficiency  and  the 
Directive  on  the  energy  performance  of  buildings.  Following  the  latest  amendments  to  the 
Energy Efficiency Directive, the update of the Law on  energy efficiency is under way. The 
implementation of the current legislation has not improved. Energy performance certification 
requirements  for  buildings  are  not  applied  according  to  the  legislation.  The  adoption  of 
implementing legislation remains a challenge due to the limited human and technical capacity 
at the Energy Department of the Ministry of Economy and the Energy Efficiency Agency.  

The structure of the energy efficiency fund is being set up. 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, North Macedonia has ratified 
the  relevant  international  conventions  and  is  a  full  member  of  the  European  Community 
Urgent Radiological Information Exchange system (ECURIE). There is still no long-term and 
safe  radioactive  waste  storage  facility  in  place.  The  capacity  of  the  Radiation  Safety 
Directorate needs to be strengthened. 

On nuclear safeguards, upon accession, the existing systems of accountancy and control of 
nuclear  materials  in  North  Macedonia  would  need  to  be  adapted  to  accommodate  for  the 
safeguard provisions (chapter 7) of the Euratom Treaty. 
Chapter 21: Trans-European networks 

transport, 
The  EU  promotes 
telecommunication and energy to strengthen the internal market and contribute to growth and 
employment. 

trans-European  networks 

the  areas  of 

(TENs) 

in 

North Macedonia has a  good level of preparation in the area of trans-European  networks. 
Limited progress was achieved during the reporting period. However, the required legislative 
process  was  not  completed,  in  particular  the  action  plans  to  implement  the  Transport 
Community Treaty.   

As last year’s recommendations were not fully implemented, they remain valid. 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 

105 

 
 
(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 and achieve 

the goals and deadlines set out in the action plans; 

→  implement the final provisions of the Railway Border-Crossing Protocol with Kosovo and 
urgently  accelerate  progress  on  completing  rail  Corridor  VIII  phase  III  (Kriva  Palanka 
border with Bulgaria).  

On transport networks, further efforts are needed to achieve the goals and deadlines.   

Investments in the sector should be based on feasibility studies conducted in line with EU best 
practices, and should apply transparent procurement procedures. The staff retention policy by 
bodies involved in large investment projects remains limited, which considerably hampers the 
completion of strategic projects. 

In  May  2023,  North  Macedonia  signed  a  high-level  understanding  with  the  European 
Commission updating the TEN-T maps. The amended maps for the new European Western 
Balkans  Corridor  will  be  part  of  the  revised  TEN-T  Regulation,  which  is  currently  being 
discussed  by  co-legislators.  Road  Corridor  X  is  functional,  but  works  along  Corridor  X-d 
have accumulated additional delays. Contracts have been signed for the construction of four 
highway  sections  along  Corridors  VIII  and  X-d.  The  construction  of  the  rail  Corridor  VIII 
towards  Bulgaria  started  in  November  2022  with  two  new  contractors  for  phase  I  and  II 
respectively,  but  the  preparation  of  the  tender  documentation  for  phase  III  (Kriva  Palanka 
border  with  Bulgaria)  has  accumulated  significant  delays.  Additional  and urgent  efforts  are 
needed  to  accelerate  progress  on  rail  Corridor  VIII  and  other  priority  sections  of  the  core 
network  for  both  rail  and  road.  Amendments  to  accelerate  construction  of  four  highway 
sections along Corridors VIII and X-d were adopted in May 2023 by using the ‘EU flag’ fast-
track procedure, although this was not an appropriate use of the procedure. North Macedonia 
is  expected  to  respect  the  obligations  stemming  from  the  Stabilisation  and  Association 
Agreement as well as to keep aligning with the EU acquis during the accession negotiation 
process.  

To  date,  no  agreement  has  been  reached  on  establishing  the  Kremenica-Neos  Kafkasos 
railway  border-crossing  with  Greece.  Finalising  the  mutual  border  agreement  and  ensuring 
the railway line becomes fully operational are key. Funding to build adequate infrastructure 
close  to  the  Serbian  border  at  the  Tabanovce  railway  border  station  has  still  not  been 
completely secured. No progress was made on adopting five-year road and rail maintenance 
plans.  

the  construction  of  a  new  400kV  electricity 

On  energy  networks, 
transmission 
interconnector  line  Bitola-Elbasan  (Albania),  is  still  under  way.  Technical  assistance  to 
strengthen  the  transmission  network  in  the  south-eastern  region  of  North  Macedonia  is 
ongoing.  Works  are  also  ongoing  to  build  the  gas  transmission  pipeline  between  Negotino 
and  Bitola,  and  Skopje,  Tetovo  and  Gostivar.  The  development  of  a  natural  gas  inter-
connector  between  North  Macedonia  and  Greece,  a  flagship  project  in  the  Economic  and 
Investment Plan (EIP) for the Western Balkans, is a priority to enable security of gas supply 
in North Macedonia and is progressing well. 

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, 

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waste  management,  nature  protection,  industrial  pollution,  chemicals,  noise  and  civil 
protection. 

North  Macedonia  has  some  level  of  preparation  in  this  area.  Overall,  there  was    limited 
progress during the reporting period.  In the waste management sector, the first national plan 
for  waste  prevention  was  adopted.  On  nature  protection,  the  management  plans  for  Shara 
Mountain  and Osogovski Mountains were adopted. Implementation in all sectors needs to be 
strengthened to keep up with developments in the EU acquis. North Macedonia is encouraged 
to  take  further  steps  towards  the  green  transition,  notably  under  the  Green  Agenda  for  the 
Western Balkans. 

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

→  implement  concrete  measures  to  reduce  air  pollution  at  local  and  national  level  and  to 

reduce point and diffuse pollution of freshwater resources; 

→  make operational the regional waste management system in the eastern and north-eastern 
regions; implement the Paris Agreement, including by adopting a Climate Law, consistent 
with the EU 2030 framework, and by adopting the national adaptation plan.  

→  strengthen  significanly  the  administrative  and  inspection  capacities,  and  implement 

structural reforms in all the sectors covered under this Chapter. 

Environment  

the  environment  was  amended 

On  horizontal  legislation,  North  Macedonia  needs  to  intensify  the  work  to  achieve  full 
alignment  with  the  cornerstone  Directives  on  Environmental  Impact  Assessment  and 
Strategic  Environmental  Assessment.  This  negatively  impacts  all  other  environmental 
sectors, infrastructure investments and overall public participation and perception.  The Law 
on 
the 
construction/reconstruction  of  new  installations  for  heavy  and  polluting  industries  less  than 
five kilometres from a settlement or a nature protected area. The country has not yet aligned 
with the Directive on environmental liability and the Directive on environmental crime. The 
lack of specialised staff and weak institutional and administrative capacity are  undermining 
quality control and the performance of environmental impact assessments.  

introduce  a  ban  on 

in  July  2022 

to 

Whilst air pollution remains a major concern in large cities, limited progress was made on air 
quality  monitoring  and  no  legislative  developments  on  air  quality  were  made  during  the 
reporting  period.  The  automatic  monitoring  network  continued  to  be  maintained  and  was 
upgraded with  a new station operating in  Ohrid.  The cadastres for air emission  for Kicevo, 
Kocani,  Stip,  Kavadarci,  Gevgelija  and  Prilep  were  finalised  in  2022  While    the  ones  for 
Veles, Tetovo, Gostivar and Struga are still under development. Air quality plans have been  
approved for Gostivar Municipality in February 2023 and by the Municipality of Kumanovo 
in December 2022. 

In the area of  waste management, the first (2022-2028) national plan for waste prevention 
was adopted in September 2022, setting out regulatory, policy and practical measures to be 
taken by various stakeholders across the public and private sectors.  

The process for closing non-standard landfills in the eastern regions is ongoing. The use of 
plastic bags has decreased by 80% since their ban by end-2021 was introduced. A system set 
up by collective operators for the extended producer responsibility (EPR) scheme comprising 
public utilities and licenced private operators for the separate collection of plastic, paper and 
glass from households and businesses is operational, but capacity is limited. Activities aimed 

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at  further  improving  the  EPR  system  have  begun.  Nevertheless,  implementation  remains  a 
significant challenge in the waste management sector. 

North Macedonia needs to continue efforts to align national legislation with the EU acquis on 
water quality management. In February 2023, the 2023 water management programme was 
adopted  for  the  design  and  construction  of  new  -  and  maintenance  and  improvement  of 
existing  -  public  facilities  for  water  supply  and  regulation  of  watercourses.  The  legal  and 
policy framework for integrated water management aligning with the water acquis is largely 
in  place.  However,  the  slow  pace  of  implementation  and  enforcement  is  an  overwhelming, 
systemic  weakness.  Some  progress  was  made  on  increasing  the  very  low  level  of  funding. 
The  contract  for  the  major  construction  project  of  the  Skopje  wastewater  treatment  plant 
(WWTP) was signed in April 2023 and that of the major construction project of the Kichevo 
sewerage  network  was  signed  in  January  2023.  To  tackle  water  pollution  the  Urban 
Wastewater Treatment Directive (UWWTD)-related legislation needs to be implemented. No 
progress  was  made on  completing  the  implementing  rules  and regulations,  including  on the 
designation of areas sensitive to eutrophication. 

On nature protection, the process of designating Studenchishko Blato, Matka Canyon, Lake 
Ohrid and Belchisko Blato as protected areas has yet to be concluded. The management plans 
for Shara Mountain (and the Osogovski Mountains have been adopted and aim to strengthen 
the protection of these areas. The Law on nature, designed to align with the requirements of 
the EU Habitat and Wild Bird Directives, needs to be adopted. The national funds available 
for  nature  protection  have  been  increased  but  are  still  far  from  sufficient.  The  lack  of 
sustainable  financing  and  of  administrative  capacity  to  manage  protected  areas  remain  a 
major challenge. 

Activities  to  identify  potential  Natura  2000  sites  continued  throughout  the  country.  Initial 
steps were taken to digitalise the system for issuing permits, promoting information exchange 
and  cooperation  to  facilitate  the  implementation  of  CITES.  Progress  was  made  on  cross-
border  cooperation  for  the  protection  of  Prespa  Lake  during  meetings  of  the  Prespa  Park 
Management Committee and the Water Management Working Group. 

The implementation of UNESCO recommendations on the natural and cultural heritage of the 
Ohrid  region  remains  insufficient.  The  Secretariat  of  the  Bern  Convention  carried  out  a 
mission  in  connection  with  the  open  file  “Alleged  negative  impacts  on  Ohrid  Lake  and 
Galichica National Park - candidates for Emerald areas”, due to infrastructure development. 

In July 2023the EU and North Macedonia signed the agreement on the country's participation 
in  the  LIFE  programme.  Joining  the  LIFE  programme  will  allow  North  Macedonia  to 
participate in the various environmental protection activities, including support for nature and 
biodiversity and climate action.  

On industrial pollution and risk management, the law on industrial emissions is yet to be 
adopted  and  there  have  been  no  developments  on  integrated  permitting.  North  Macedonia 
should  align  with  the  Seveso  III  Directive,  the  EU  Ecolabel  Regulation  and  the  EU  Eco- 
Management and Audit System. 

No significant developments have been made in the area of chemicals and of noise pollution 
in the reporting period.  

On  civil  protection,  the  European  emergency  call  number  E  112  has  been  available  to  
people  across the country since February 2022. Furthermore, the fleet of firefighting planes 
was  serviced  and  new  firefighting  equipment  was  acquired.  North  Macedonia  signed  the 
revision of the administrative arrangement with the Union Civil Protection Mechanism. 

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Despite its longstanding participation in the system, no progress has been made in linking the 
national  emergency  communication  system  to  the  European  Commission's  Common, 
Emergency, Communication and Information System (CECIS) or in better defining the  role 
of  the  national  coordinator  for  the  National  Platform  on  Disaster  Risk  Reduction.  The  new 
national protection and rescue strategy for 2022-2025 is yet to be adopted. The country needs 
to take concrete steps to introduce a mandatory training programme for all territorial, fire and 
rescue/civil protection staff. 

Climate change 

The national energy and climate plan (2021-2030) was adopted in June 2022  but the Law on 
climate  action  is  yet  to  be  adopted.  The  fourth  National  Communication  to  the  UN 
Framework Convention on Climate Change was adopted in February 2023.  

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  and 
aquaculture (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  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,  fisheries  and  aquaculture  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  regional  policy  and  the 
coordination of structural instruments and financial and budgetary provisions.  

Chapter 11: Agriculture and rural development  

The EU’s common agricultural policy supports farmers and ensures Europe’s food security. 
It  helps  tackle  climate  change  and  the  sustainable  management  of  national  resources; 
maintains rural areas and landscapes across the EU; and keeps the rural economy alive by 
promoting jobs in farming, agri-food industries and associated sectors. This requires strong 
management and control systems. There are also common EU rules for marketing standards, 
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,  notably  with  the 
preparation  of  the  2021-2027  action  plan  for  the  national  strategy  for  agriculture  and  rural 
development,  including  budgeting  for  support  measures  under  the  2023-2027  national 
programme for the development of agriculture.  

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

→  ensure transfer of the farm register and the land parcel identification system (LPIS) to the 

paying agency; 

→  adopt a legislative framework to further align with the EU acquis on areas such as support 

payments, common market organisation and farm advisory services; 

109 

 
 
 
→  improve  the  administrative  capacity  in  the  instrument  for  pre-accession  assistance  for 
rural  development  (IPARD) operating structures to  ensure  robust  implementation of the 
IPARD III programme. 

On horizontal issues, an action plan for the 2021-2027 national strategy for agriculture and 
rural development (NSARD) was prepared. Its alignment with the action plan on the Green 
Agenda for the Western Balkans needs to be ensured. The financing of the NSARD has been 
budgeted under the 2023-2027 national programme for the development agriculture and rural 
development  and  nearly  80%  of  the  funds  are  allocated  to  direct  support  measures.  North 
Macedonia  continued  a  policy of complex coupled schemes of direct  support to  farmers.  A 
new e-application system for direct support has simplified the application process and control 
system.  The  new  Law  for  agriculture  and  rural  development  has  been  prepared.  North 
Macedonia needs to align its national support measures to the EU acquis. Solutions for long-
term staffing and for the premises of the paying agency, remain to be found. 

All  elements  of  the  integrated  administration  and  control  system  (IACS)  are  in  place  and 
comply with the EU acquis. However, data transfers and the inter-operability of the various 
elements need to be improved. The area-based payments continue to be determined based on 
the  land  parcel  identification  system  (LPIS).  New  orthophoto  maps  are  to  be  acquired  and 
updates  to  the  LPIS  completed  in  2023.  The  legislative  framework  for  transferring  the 
farmers’ register  and LPIS to  the  Paying  Agency is  still  pending.  On the farm accountancy 
data network (FADN), a new plan for selecting representative agricultural holdings has been 
prepared  ensuring  the  expansion  of  the  sample  for  data  collection.  Additional  human  and 
financial resources are essential to ensure the sustainability of the FADN system. Efforts are 
underway to develop the farm advisory services in line with the EU acquis.  

Little  progress  was  made  on  further  aligning  with  the  common  market  organisation 
(CMO). Legislation in this area remains to be adopted. Development of a school schemes for 
fruit and vegetables continued in 2023.  

On rural development, good progress was made in absorbing EU funds under IPARD II. By 
the end of 2022, payments to recipients reached around EUR 42 million. It is critical that the 
IPARD authorities improve the disbursement of funds in 2023 to avoid the decommitment of 
the remaining IPARD II funds and to support the thorough implementation of the IPARD III 
funds for which entrustment was granted by the European Commission Overall, the capacity 
and staff retention of the IPARD authorities needs to be strengthened. No significant progress 
has been made in aligning national rural development policy with the EU acquis.  

On quality policy, progress in implementing quality schemes has been limited but 2023 saw 
some  developments  in  the  registration  process  for  a  number  of  products.  The  legislative 
framework,  including  on  spirit  drinks  remains  to  be  fully  aligned  with  the  EU  acquis. 
Administrative capacity remains insufficient, despite the sector's potential.  

As  regards  organic  farming,  the  legislation,  competent  authority,  control  bodies,  and 
accreditation  and  certification  system  are  in  place.  A  new  law  on  organics  further  aligning 
with EU acquis remains to be adopted and actions to enhance the monitoring and control of 
organic certification and traceability of organic products can be intensified. Efforts should be 
made to further develop the sector, making use of the support available under the IPARD III 
programme.  

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Chapter 12: Food safety, veterinary and phytosanitary policy  

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

North Macedonia has a good level of preparation in the areas of food safety, and veterinary 
and phytosanitary policy. Some progress was made over the reporting period, particularly in 
fighting  animal  diseases,  plant  health  control  and  implementing  pest  eradication  measures 
based on phytosanitary monitoring programmes results.  

The Commission’s recommendations from last year were not met and therefore remain valid. 

In the coming year, North Macedonia should in particular: 

→  adopt the draft laws on food safety, official controls and the new Law on animal health; 

→  strengthen capacity for data analysis in the Food Veterinary Agency; 

→  implement measures on the sustainable use of pesticides. 

On general food safety, amendments to the Law on food safety and a new Law on official 
controls  have  been  prepared  but  are  yet  to  be  adopted.    The  national  rapid  alert  system  for 
food  and  feed  and  the  Food  and  Veterinary  Agency’s  internal  audit  and  training  systems 
continued  to  operate  efficiently.  The  Agency  continued  to  perform  its  work  in  line  with 
quality management standards and 566 consumer complaints were received and resolved in 
2022. 

On  veterinary  policy,  a  new  Law  on  animal  health,  aimed  at  aligning  with  the  new  EU 
animal  health  legislation,  is  yet  to  be  adopted.  The  Food  and  Veterinary  Agency  provides 
regular updates on safeguard measures for imports and import requirements for live animals 
and animal products.  

Progress was made on control measures for animal diseases. The Agency  has an active and 
passive surveillance programme in place for various diseases, but the collection, verification 
and  analysis  of  data  remains  insufficient.  The  Agency  continued  implementing  the 
monitoring  programme  on  antimicrobial  resistance.  The  2023  national  monitoring 
programme on control of residues of veterinary medicinal products and contaminants in live 
animals  and  foodstuffs  of  animal  origin  is  in  line  with  the  EU  acquis  on  bovine, 
ovine/caprine,  porcine,  poultry,  aquaculture,  milk,  eggs,  wild  game  and  honey.      The  new 
Law on zoo-technics was adopted in April 2023. The capacity to align with and implement 
the EU acquis on zoo-technical issues remains 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 has been adopted.  

Some  progress  was  also  made  on  food  safety  rules.  The  legislation  was  amended  in 
December  2022  to  align  with  the  EU  acquis  on  specific  requirements  for  microbiological 
criteria for food. The Agency continued implementing a programme to monitor food safety, 
but the data is to be further analysed. 

Regarding  specific  rules  for  feed,  the  legislation  was  aligned  with  EU  requirements  for 
processed  proteins,  and  with  procedures  for  sampling  and  laboratory  testing.  The  Agency 
continued to implement a programme to monitor feed safety and the Agency collected 90% 
of the 500 planned feed samples.  

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Some progress was made on phytosanitary policy. The Phytosanitary Directorate regularly 
updated the list of harmful organisms in line with the new EU acquis and the country’s pest 
status. The phytosanitary monitoring programme  for plant health was implemented, and the 
phytosanitary information system further developed. The Law on phyto-pharmacy is aligned 
with  the EU  acquis. However,  measures  on the  sustainable use of pesticides  have not  been 
implemented. Substantial work is still necessary to collect reliable data on national pesticides 
use  and  its  impact  on  human  health.  The  phytosanitary  inspection  body  continued  to 
through  monitoring  and  control 
implement  measures 
programmes. 

to  eradicate  pests 

identified 

The Law on genetically modified organisms was aligned with the EU acquis.  

Chapter 13: Fisheries and aquaculture 

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 control and inspection, rules on markets and 
aquaculture  and  support  for  fisheries  and  coastal  communities.  Further,  it  promotes  a 
sustainable aquaculture.  

North  Macedonia  is  moderately  prepared  in  the  area  of  fisheries  and  aquaculture.  In  the 
reporting  period,  some  progress  was  made  in  aligning  marketing  standards,  structural 
measures and State aid with the EU acquis.  

Some  recommendations  from  last  year’s  report  were  not  fully  implemented.  In  the  coming 
year, North Macedonia should in particular: 

→  adopt  the  Law  on  fisheries  and  aquaculture  and  the  implementing  legislation  on 
marketing standards, consumer information,  traceability and producer’s organisations  as 
well as a national strategy on aquaculture; 

→  improve the data collection system and reporting, such as establishing a data framework 
for  collection  of  fisheries  and  aquaculture  data,  integration  of  all  data  sources  and 
analysis; 

→  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.  Progress  was  made  in  aligning  the  national  legal 
framework  with  the  preparation  of  a  new  Law  on  fisheries  and  aquaculture.  A  new  law  on 
fisheries and aquaculture including relevant EU provisions on marketing standards, structural 
support and state aid, is yet to be adopted.  The adoption of a multi-annual national strategy 
dedicated to aquaculture is pending. 

The institutional framework for fisheries policy, inspections and control has been set up, but 
administrative  capacity  for  resource  and  fleet  management,  and  inspections  and  control 
remains  insufficient  although  the  acquis  on  catch  quotas,  inspection  and  control  is  only 
partially applicable due to lack of a coastline in the country. The Fisheries and Aquaculture 
Unit  in  the  Ministry  for  Agriculture  is  understaffed.  Some  progress  was  made  on  capacity 
building, with intensive training courses organised. However, human resources for fisheries 
management  and  the  control  of  IUU  fishing  need  to  be  further  improved  in  line  with  EU 
requirements.  

North  Macedonia  should  carry  out  activities  to  raise  the  public's  awareness  about  illegal, 
unreported  and unregulated fishing  and its legal  consequences.  Specific attention should be 
given to preventing the illegal fishing of protected species and European eel. 

112 

 
 
The  annual  budget  for  structural  measures  is  insufficient  for  developing  aquaculture  and 
restoring  fish  stocks.  The  government  should  increase  structural  support  and  prepare  a 
multiannual financial and policy programme to address the sector's needs. The data collection 
system for fisheries and aquaculture needs to be further developed in line with the EU acquis. 
Interinstitutional coordination with the environment authorities needs to improve. 

Alignment  of  the  Market  policy,  structural  support  and  State  aid  as  well  as  alignment 
with the EU Eel Regulation is still outstanding due to the pending adoption of the new Law 
on fisheries and aquaculture.   

No cooperation meetings on the international agreements for fisheries management of the 
transboundary  lakes  took  place  in  2022.  Greece  and  North  Macedonia  applied  a  regular  
synchronised fishing ban at the Dojran lake each year. Cooperation meetings with Albania for 
the management of Ohrid lake fish stocks were held in June 2023.  

Chapter 22: Regional policy and coordination of structural instruments 

Regional  policy  is  the  EU’s  main  tool  for  reducing  regional  disparities  and  investing  in 
sustainable  and  inclusive  socio-economic  growth.  It  is  operating  through  “shared 
management”  between  the  Commission  and  EU  Member  States.  The  implementation  of 
cohesion  policy  programmes  requires  appropriate  administrative  capacity  on  programme 
and project level, the establisment of systems of sound financial management and control and 
also the fulfilment of other EU acquis elements such as environmental or public procurement 
legislation.  

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

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

→  upgrade  its  institutional,  administrative  and  technical  capacity  to  manage  EU  funds  by 
adopting  an  overall  staff  retention  policy,  strengthening  capacities,  improving  the 
implementation  of  EU  and  audit  recommendations,  aligning  management  and  control 
systems with the Instrument for Pre-Accession Assistance (IPA) III requirements; 

→  strengthen investment policy as a matter of urgency by streamlining investment pipelines 
underpinned  by  sound,  transparent  and  inclusive  methodology,  clear  responsibilities  of 
the stakeholders and a viable public-private partnership framework; 

→  enhance  the  decentralisation  process  through  a  credible  financing  framework  for 

municipalities and strengthen policy dialogue on regional development. 

No progress was made on the legislative framework, but basic principles remain broadly in 
line  with  EU  acquis  on  public  procurement,  public  finance  management,  regional  and 
municipal  development,  equal  opportunities  and  non-discrimination,  environmental 
protection,  transport  connectivity  and  energy  transition.  The  strategic  framework  was 
strengthened with the adoption of new strategies on public procurement and gender equality, 
and the national energy action plan. No significant progress was made on the decentralisation 
of services and reorganisation of competencies between the central and the subnational level. 

The institutional framework for the management of EU funds under IPA III is being further 
aligned with IPA III requirements in view of its future role in EU cohesion policy. However, 
the  performance  of  the  existing  and  new  institutional  set-up  for  multiannual  operational 
programmes is jeopardised by weak administrative capacity. 

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Weaknesses persist  in  the administrative capacity of key  institutions  managing  EU funds. 
The lack of a national staff retention policy,  shortcomings in human resources management 
and exceptionally high staff turnover across the IPA structures remain key concerns. Overall, 
the structures managing EU funds operated last year with 79% of the optimal staff levels and 
with  key  managerial  positions  vacant.  Progress  with  the  IPA  training  centre  was  modest, 
taking  the  form  of  new  furniture,  IT  and  media  equipment.  Training  plans  were  developed 
and  effective  training  of new  IPA  practitioners  began.  However,  the  training  centre  is 
understaffed  and  a  roster  of  trainers  has  not  been  established.  North  Macedonia  needs  to 
implement  the  government's  August  2022  decision  on  setting  up  a  roster  of  trainers  and 
developing a training methodology effectively.  

The financial management and control systems are functioning, but are under pressure due 
to staffing challenges. This continued to negatively affect actions under indirect management 
by  the  beneficiary  country.  At  the  end  of  2022,  EU  funds  for  a  total  of  EUR  24.8  million 
were  decommitted  under  the  IPA  II  multiannual  programme  for  environment  and  transport 
(2014-2020), while the risk of further substantial decommitment remains high. To address the 
critical  shortcomings  and  to  be  able  to  operate  in  an  ex-post  control  environment,  North 
Macedonia has stepped up the reorganisation of the financial and control systems for the new 
operational programmes under IPA III. Further efforts are needed to address the EU and audit 
recommendations  on  staff  management  and  retention  policy,  procurement  and  contract 
planning, internal audit function and quality assurance.  

The Financial Framework Partnership Agreement on the implementation  of  IPA  III  entered 
into force. The programming of IPA 2022 and IPA 2023 was completed and advances were 
made  in  the  programming  of  IPA  2024  and  operational  programmes  for  2024-2027.  The 
sector policy dialogue, which supports strategic planning and programming, weakened in the 
last year as reflected by the infrequent meetings of the sector working groups. 

North Macedonia continues to gain experience in regional policy and territorial cooperation 
programming and implementation through its participation in cross-border, transnational, and 
interregional  cooperation  programmes,  including  the  EU  Strategy  for  the  Adriatic  Ionian 
region.  

On monitoring and evaluation, North Macedonia actively participates in the IPA and sector 
monitoring  committees,  however  only  30%  of  the  jointly-agreed  conclusions  have  been 
implemented.  The  lack  of  political  steer,  the  weak  interinstitutional  coordination  and  the 
weak central reporting and monitoring function of the office of the national IPA coordinator 
negatively affects the timeliness and quality of IPA reports.  

Internal  and  external  audit  functions  are  in  place.  However,  internal  audit  needs  to  be 
strengthened to  better support the functioning  of  the management  and control systems.  The 
delay in adopting the new Law on public internal financial control is concerning. The Audit 
Authority  continues  to  perform  well  and  follows  sound  audit  methodology  with  good  audit 
coverage. The new 2023-2025 audit strategy was adopted in November 2022. However, the 
operational  and  technical  capacity  of  the  Audit  Authority  is  undermined  by  staffing 
challenges. The implementation of the audit findings by the auditees remains  very low. Out 
of 96 findings from previous audits, 23 were closed in 2022, representing an implementation 
rate of 24%, which is a serious concern. 

As regards anti-corruption, in line with the new Organic Budget Law, in December 2022, the 
government  adopted  the  decree  on  setting  up  the  anti-fraud  coordination  service  (AFCOS) 
network, which is the backbone of the system for protecting EU’s financial interests in North 
Macedonia.  The  AFCOS  network  is  now  fully  operational.  In  addition,  the  institutions 

114 

 
 
managing EU funds implement a financial management and control system accredited by the 
Commission, which is under the scrutiny of an external audit body and Commission services.  

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.  

The country is at an early stage of preparation in this chapter. Limited progress was made 
during the reporting period. North Macedonia reports national accounts data according to the 
ESA  2010  (European  System  of  Accounts)  methodology,  however  further  improvements 
regarding the complete and timely transmission of annual national accounts are needed. The 
institutional  set-up  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  in  the  areas  of  taxation 

(VAT), customs union, financial control and statistics; 

→  strengthen administrative capacity and coordination mechanisms among key stakeholders 

in the own resources system. 

North Macedonia made limited progress on the administrative conditions  for own resources                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
laid  down  in  the  relevant  Regulations,  on  reducing  the  administrative  burden  for  taxpayers 
and  on  the  VAT  refund  process.  Measures  to  fight  and  reduce  tax  evasion,  fraud  and  the 
informal  economy,  as  well  as  to  improve  internal  control  in  public  sector  are  yet  to  be 
efficiently  applied.  North  Macedonia  continued  its  efforts  to  align  its  legislation  with  ESA 
2010  standards  but  further  efforts  are  needed  to  improve  compliance  with  the  ESA  2010 
methodology.  All  customs  declarations  and  excise  documents  are  processed  electronically 
and progress continued in the reporting period on consolidation, application and upgrade of 
IT systems (for further information, see chapter 16 - taxation, chapter 18 - statistics, chapter 
29 - customs union and chapter 32 - financial control). 

On  traditional  own  resources,  progress  was  made  on  consolidation,  application  and 
upgrading  IT  systems.  The  Customs  Administration  is  fully  paperless,  processing  customs 
declarations  and  excise  documents  electronically.  The  digitalisation  of  customs  procedures 
continued  with  the  introduction  of  a  'green'  customs  declaration,  with  import  and  export 
procedures being completed in 1 hour.   

Concerning VAT, the 2021-2025 tax system reform strategy is still ongoing. In April 2023, 
the Public Revenue Office published the strategic plan for 2023-2025. On indirect taxation, 
the VAT exemptions and preferential rates for essential products were removed at the end of 
2022.  A  preferential  VAT  rate  was  introduced  for  some  energy  products  to  alleviate  the 
effects  of  the  significant  global  increase  in  energy  prices.  The  preferential  VAT  rate  for 
electricity for households ceased to be applied on 30 June 2023. Delays remain in the VAT 
refund process. (See chapter 16 - taxation). 

With  regard  to  the  administrative  infrastructure,  further  efforts  are  needed  to  ensure  the 
timely and efficient calculation, collection, payment and control of own resources as well as 

115 

 
 
to improve reporting and coordination mechanisms among all bodies involved. This is needed 
upon accession to the EU.  

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  on  the  common  foreign  and  security  policy.  The  country  made 
some progress during the reporting period on common commercial policy. It has made good 
progress  by  maintaining  full  alignment  with  EU  common  foreign  and  security  policy.  By 
doing so, North Macedonia has shown itself to be a reliable partner, including at international 
level. 

Chapter 30: External relations 

The EU has a common 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.  

North Macedonia is moderately prepared in the area of external  relations and made  some 
progress  in  the  reporting  period.  The  country  continued  to  cooperate  closely  with  the  EU, 
including within the World Trade Organization (WTO), and to implement CEFTA protocols. 
Trade  restrictions  on  certain  products  were  removed  or  expired  by  the  end  of  2022.  Its 
institutional  capacity  to  fully  participate  in  EU  commercial,  development  and  humanitarian 
policies is still insufficient. Last year’s recommendations were partially implemented. In the 
coming year, the country should in particular: 

→  further implement CEFTA Additional Protocol 6 on trade in services, and conclude and 

adopt Additional Protocol 7 on dispute settlement; 

→  set up a legal framework covering international cooperation and development policy and 

humanitarian aid towards non-EU countries in line with EU policies and principles. 

On common commercial policy, North Macedonia continued to coordinate its positions and 
align its policies with those of the EU, including within the WTO, and is supporting the WTO 
reform. The country completed the certification process for the Services Domestic Regulation 
in the WTO framework. The provisions of the Trade Facilitation Agreement are fully applied 
and  the  National  Committee  on  Trade  Facilitation  met  twice  in  2022.  On  7  June  2023  the 
WTO  Government  Procurement  Agreement  (GPA)  members  decided  to  accept  North 
Macedonia to the GPA.   

The  administrative  capacity  of  the  Ministry  of  Economy,  the  Ministry  in  charge  of  trade 
policy,  should  be  further  strengthened.  Quantitative  restrictions  on  the  export  of  certain 
products, introduced in March 2022, were either removed or expired by the end of 2022.  

North  Macedonia  continued  to  participate  actively  in  CEFTA  and  has  committed  to 
implement  the  2021-2024  Common  Regional  Market  (CRM).  Three  agreements  related  to 
CRM implementation - freedom of movement with identity cards, recognition of professional 
qualifications and recognition of academic qualifications - were ratified by the Parliament in 
April 2023. The implementation of Additional Protocol 6 on services is under way.  

The  system  for  export  control  of  dual-use  goods  and  technologies  is  operational.  In  June 
2023, the government adopted an updated list of dual-use products in order to align with the 

116 

 
 
EU  Regulation  on  control  of  exports,  transfer,  brokering  and  transit  of  dual-use  goods  and 
technologies.  

North Macedonia has 38 bilateral investment treaties with third countries (BITs) in force, 
of  which  18  are  with  EU  Member  States.  The  country  is  updating  the  existing  model 
agreement  for  BITs.  The  amended  free  trade  agreement  between  North  Macedonia  and 
Ukraine  was  ratified  in  April  2023,  further  liberalising  trade  in  food  and  agricultural 
products. 

No  progress  was  made  on  development  policy  and  humanitarian  aid.  The  country  is 
encouraged  to  set  up  a  policy  framework  on  development,  international  cooperation  and 
humanitarian aid, in line with EU policies and standards. 

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  action,  and  apply 
agreed sanctions and restrictive measures. 

North Macedonia has a good level of preparation in the area of common foreign, security 
and  defence  policy.  Good  progress  was  made  during  the  reporting  period,  as  the  country 
maintained full  alignment  with  EU common  foreign  and security policy, including  with the 
EU  restrictive  measures  following  Russia’s  war  of  aggression  against  Ukraine.  North 
Macedonia continued to participate in EU crisis management missions and operations under 
the common security and defence policy. 

In the coming year, the country should in particular:  

→  maintain full alignment with EU common foreign and security policy. 

→  make further efforts to close space for foreign interference and information manipulation, 
including  disinformation, and take actions towards building  societal  resilience against it 
and other forms of hybrid threats.    

Political  dialogue  on  foreign  and  security  policy  continued  between  North  Macedonia  and 
the  EU,  including  through  regular  dialogues  on  foreign  and  security  policy  at  all  levels.  In 
April  2023,  North  Macedonia  participated  in  the  ninth    EU-Western  Balkans    meeting  of 
Political Directors. In March 2023, North Macedonia participated at ministerial level  at the 
first  Schuman  Security  and  Defence  Forum  and  in  May  2023  in  the  working  lunch  with 
members of the Foreign Affairs Council. The institutional framework enabling the country’s 
participation  in  the  common  foreign  and  security  policy  and  the  common  security  and 
defence policy is in place. The country subscribes to the global strategy for EU’s foreign and 
security policy and the Strategic Compass for Security and Defence. 

On common foreign and security policy (CFSP), the country’s alignment rate with relevant 
High  Representative  statements  on  behalf  of  the  EU  and  relevant  Council  Decisions  has 
remained  at  100%.  This  included  all  EU  restrictive  measures  targeting  following  Russia’s 
war  of  aggression  against  Ukraine.  This  is  a  strong  signal  of  the  country’s  strategic 
commitment to its EU path. North Macedonia also aligned with all EU statements submitted 
at  international  organisations,  including  co-sponsoring  the  resolution  adopted  at  the  UN 
General Assembly Emergency Special Session on Ukraine on 23 February 2023. The country 
continues  to  implement  the  EU  restrictive  measures,  with  the  Law  on  restrictive  measures 
providing  the  legal  framework  for  introducing  and  monitoring  the  restrictive  measures, 
including  economic  ones.  The  authorities  should  continue  to  strengthen  their  capacity  to 
implement  and  enforce  the  sanctions  in  place.  As  there  is  no  direct  legal  effect  of  aligning 

117 

 
 
with  EU  restrictive  measures,  a  new  legal  act  must  be  adopted  by  government  decision  for 
every  new  measure  or  amendment,  creating  a 
time  gap  between  alignment  and 
implementation. 

Reflecting the strained  relations with  Russia, the visa agreement between the two countries 
was terminated taking effect in January 2023 and the license to work of the Honorary Consul 
of Russia in Bitola was withdrawn. 

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 needed. 

On conflict prevention, North Macedonia took over as OSCE Chair in January 2023 for the 
duration of one year. In his capacity as OSCE Chairperson-in-Office, the Minister of Foreign 
Affairs  of  North  Macedonia    visited  Georgia,  Azerbaijan  and  Armenia  in  April  2023  and 
Serbia and Kosovo in May 2023. In March 2023, North Macedonia provided a venue for a 
High-level  Dialogue  meeting  in  Ohrid  between  the  President  of  Serbia  and  the  Prime 
Minister of Kosovo, convened by HRVP Borrell. North Macedonia continued supporting EU 
measures and documents on conflict prevention.  

On non-proliferation, North Macedonia continued to implement the 2018 regional roadmap 
for a sustainable solution to the illegal possession, misuse and trafficking of small arms and 
light  weapons  and  their  ammunition  in  the  Western  Balkans,  and  adopted  a  2022-2024 
national strategy and action plan for the control of small arms and light weapons in October 
2022.  

North Macedonia participates in some, but not all, international export control arrangements 
and instruments. 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 Law on the prohibition of the development, production, storage and use of 
chemical  weapons  implements  the  obligations  of  the  Chemicals  Weapons  Convention  and 
provides for the establishment of the cross-sector Committee charged with its administrative 
implementation.  

North  Macedonia  continued  its  active  cooperation  with  international  organisations.  Its 
priorities in the UN are in line with important EU priorities, including on security, protection 
of human rights and the climate, countering violent extremism, implementing the resolution 
on  women,  peace  and  security,  promoting  the  role  and  participation  of  women  and 
strengthening  the  role  of  youth.  The  second  national  action  plan  on  the  implementation  of 
UNSC  1325  is  monitored  by  a  working  group  which  published  its  second  report  in  April 
2023.  In  January  2023,  the  country  assumed  the  position  of  Chair  of  the  Organisation  for 
Security and Co-operation in Europe (OSCE) with a focus on human security. Since then, it 
has been actively promoting European standards and values and seeking to meet the threats 
arising from Russia’s war of aggression against Ukraine. In 2023, North Macedonia assumed 
the  chairmanship  of  the  US-Adriatic  Charter.  In  March  2023,  Albania,  North  Macedonia, 
Kosovo and Montenegro launched the informal ‘Western Balkan QUAD – 100% alignment 
with EU CFSP’ a platform aimed at facilitating their full alignment with the EU’s CFSP.  

On  security  measures,  the  Law  on  classified  information,  based  on  the  2013  Council 
Decision, is in force. Implementing legislation is in place on the inspection and supervision of 
work involving classified information and on personnel security. North Macedonia continued 

118 

 
 
to  implement  its  security  of  information  agreement  with  the  EU  on  procedures  regarding 
exchange of classified information.  

Regarding  the  common  security  and  defence  policy  (CSDP),  the  country  continued  to 
actively participate and contribute substantially to EU crisis management operations, notably 
EUFOR ALTHEA in Bosnia and Herzegovina. North Macedonia participates in the military 
training mission in the Central African Republic (EUTM RCA) and in the EU Battle Group 
HELBROC  BG  with  one  platoon.  North  Macedonia  takes  part  in  the  EPF  Balkan  Medical 
Task Force assistance measure.  North Macedonia participated in  the Dynamic Employment 
of  Forces  to  Europe  for  NATO  Deterrence  and  Enhanced  Readiness  2023  Exercise  and 
maintained  a  presence  in  NATO-led  missions  ‘KFOR’  in  Kosovo,  NATO  Mission  Iraq 
(NMI) and in the Enhanced Forward Presence in the Baltic (eFP). The country continues to 
participate in the UN Interim Force in Lebanon operation with three army personnel. During 
the reporting period, North Macedonia provided significant military equipment to Ukraine. 

North  Macedonia  takes  part  in  the  European  Peace  Facility  Balkan  Medical  Task  Force 
assistance  measure  and  is  a  beneficiary  of  an  assistance  measure  for  the  army  of  North 
Macedonia. 

The  country  has  begun  the  procedure  to  join  the  European  Centre  of  Excellence  for 
Countering Hybrid Threats, located in Helsinki. The country was the target of a sustained 
campaign of hoax bomb threats to schools and critical infrastructure for 5 months starting in 
October  2022.  The  authorities  classified  these  events  as  a  hybrid  threats.  As  a  result  of  the 
attacks, the Council for  the Coordination of the  Security-Intelligence Community  set  up  an 
operational  team  for  cybersecurity  and  hybrid  threats,  which  is  managed  by  the  Public 
Security Bureau of the Ministry of Interior. 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. 

119 

 
 
 
ANNEX I – RELATIONS BETWEEN THE EU AND NORTH MACEDONIA 

North  Macedonia  is  a  candidate  country  since  2005.  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  launched  the 
screening process on the same day. 

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 and 
in  force  since  2004,  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. The Stabilisation and Association Council took place in March 
2023 in Skopje.  

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  fifth  report  under  the  visa  suspension  mechanism  concluded  that  North 
Macedonia continues to meet the visa liberalisation benchmarks.  

North Macedonia has maintained its full alignment with EU common foreign and security 
policy over the reporting period. Substantial participation in EU crisis management missions 
and operations continued. 

Under  the  Instrument  for  Pre-accession  Assistance  2021  –  2027  (IPA  III)17,  the  first 
financing  decision  of  EUR  90.45  million,  adopted  at  the  end  of  2021,  provides  support  for 
EU acession 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 trade with the EU. The second financing 
decision  of  EUR  72.5  million  was  adopted  at  the  end  of  2022,  providing  support  for  the 
country’s  reforms  in  the  areas  of  border  and  migration  management,  public  administration, 
environment, health, social protection and gender equality and to back-up the EU accession 
process. At the EU-WB Summit in Tirana in December 2022, the Commission put forward an 
Energy Support Package of EUR 1 billion for the Western Balkans to address immediate, 
short-term, and medium-term needs in the region in the context of the energy crisis and of the 
Russian war of aggression against Ukraine. Following this announcement, a EUR 80 million 
budget support programme for North Macedonia was adopted at the end of 2022 to cushion 
the  energy  price  increase  to  SMEs  and  vulnerable  households  and  to  accelerate  the  energy 
diversification.  

These  programmes,  complemented  by  a  significant  package  of  multi-country  programmes 
and  the  EUR  97  million  rural  development  programme  (IPARD  III),  provide  a  significant 
contribution to the implementation of the Economic and Investment Plan for the Western 
Balkans and the Green Agenda. North Macedonia benefits from complementary support for 
civil  society and migration management.  North  Macedonia participates also  in  cross-border 
cooperation programmes, transnational cooperation programmes and Union Programmes.  

The  new  activities  complement  the  on-going  programmes  under  IPA  II  (2014-2020). 
Progress was achieved on the implementation of  IPA II, which is still providing significant 
support  for  the  social  and  economic  development  of  the  country  and  contribute  to  key 

17 OJ L 330, 20.9.2021 

120 

 
 
 
 
structural reforms. On the fundamentals, the ongoing EU assistance continued to back up the 
reforms in the areas of rule of law, public administration and public finance and advanced the 
fight against corruption. With EU assistance, the reorganisation of state institutions at central 
level  was  launched  and  the  digital  transformation  of  the  country  advanced,  with  230  fully 
automated  public  e-services  for  citizens  and  businesses  put  in  place.  The  EU-supported 
Youth Guarantee benefitted over 9 400 young people in the regions facing the highest youth 
unemployment and schooling was improved for Roma children and children with disabilities. 
Significant EU financial assistance has been allocated to North Macedonia for protecting the 
environment  and  boosting  the  connectivity  with  the  EU  transport  systems,  including  State 
Road  A2  Kumanovo-Stracin  (Corridor  VIII)  and  the  new  expressway  section  Gradsko-
Drenovo (Corridor X). Media, civil society and private sector continue to benefit of important 
EU assistance providing opportunities to grow and develop in a favourable environment. The 
EU support for the private sector benefitted over 5 000 companies, created over 1 300 new 
jobs and secured over 15 000 jobs in risk, 70% of which in eco-friendly business. 

The Western Balkans Investment Framework (WBIF) has supported North Macedonia in 
the amount of EUR 296.7 million provided as IPA III grants for flagship projects in the area 
of clean energy, environment and climate, and sustainable transport. 

On  12  July  2023,  in  view  of  the  country’s  large  financing  needs  in  2023  and  2024,  and 
following a request from the government, the Council and the European Parliament endorsed 
a  Commission  proposal  for  macro-financial  assistance  to  North  Macedonia  of  up  to 
EUR 100 million. Payments can follow, provided conditions attached to this assistance have 
been adequately respected. 

The  Council  of  the  European  Union  adopted  an  assistance  measure  under  the  European 
Peace Facility worth EUR 9 million to the benefit of the army of North Macedonia, which 
will  help  its  capacity  to  maintain  and  enhance  operating  standards  to  participate  in  EU 
military  CSDP  missions.  The  proposed  support  will  include  logistics,  medical  equipment, 
communication  and  information  systems,  intelligence  capacities,  chemical,  biological, 
radiological and nuclear (CBRN), engineering and training equipment.  

The EU provides support via IPA and the Foreign Policy Instrument to  strengthen Western 
Balkans  partners’  resilience  to  face  hybrid  threats  including  cyber  and  foreign  information 
manipulation and interference. 

121 

 
 
 
 
 
STATISTICAL DATA (as of 31/08/2023) 
North Macedonia 

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

National accounts 
Gross domestic product (GDP) (million national currency) 
Gross domestic product (GDP) (million euro) 
GDP (euro per capita) 
GDP per capita (in purchasing power standards (PPS)) 
GDP per capita (in PPS), relative to the EU average (EU-27 = 100) 
Real GDP growth rate: change on previous year of GDP volume (%) 
Employment growth (national accounts data), relative to the previous year (%) 
Labour productivity growth: growth in GDP (in volume) per person employed, relative to the 
previous year (%) 
Unit labour cost growth, relative to the previous year (%) 
**3 year change (T/T-3) in the nominal unit labour cost growth index (2015 = 100) 
Labour productivity per person employed: GDP (in PPS) per person employed relative to EU 
average (EU-27 = 100) 
Gross value added by main sectors 
Agriculture, forestry and fisheries (%) 
Industry (%) 
Construction (%) 
Services (%) 
Final consumption expenditure, as a share of GDP (%) 
Gross fixed capital formation, as a share of GDP (%) 
Changes in inventories, as a share of GDP (%) 
Exports of goods and services, relative to GDP (%) 
Imports of goods and services, relative to GDP (%) 
Gross fixed capital formation by the general government sector, as a percentage of GDP (%) 

Note 

1) 

Note 

2010 
2 053 s 
25 436 w 

2010 
437 296 
7 108 
3 460 e 
8 597 e 
34.5 
3.4 
-  4 
7 

: 
: 
46 

11.7 
17.9 
6.5 
63.9 s 
93.8 
23.1 
1.3 
39.8 
58.1 
: 

2017 
2 074 s 
25 436 w 

2017 
618 106 
10 038 
4 840 e 
10 787 e 
36.8 
1.1 
3 
-  2 

: 
: 
43 

9.1 
20.5 
7.5 
62.9 s 
81.6 
22.5 
9.7 
55.1 
69.0 
: 

2018 
2 075 s 
25 436 w 

2018 
660 878 
10 744 
5 170 e 
11 389 e 
37.6 
2.9 
0 
3 

: 
: 
45 

9.8 
21.5 
6.2 
62.6 s 
80.1 
20.0 
12.2 
60.4 
72.8 
: 

2019 
2 077 s 
25 436 w 

2019 
692 683 
11 262 
5 420 e 
11 881 e 
38.0 
3.9 
2 
2 

: 
: 
44 

9.4 
20.8 
6.5 
63.4 s 
79.5 
21.0 
13.2 
62.4 
76.2 
: 

2020 
2 076 s 
25 436 w 

2020 
669 280 
10 852 
5 240 e 
11 349 e 
37.8 
-  4.7 
-  7 
2 

: 
: 
47 

9.8 
19.8 
6.0 
64.3 s 
82.8 
21.6 
8.3 
57.8 
70.5 
: 

2021 
2 069 s 
25 436 w 

2021 
720 414 p 
11 688 p 
5 672 sw 
: 
: 
3.9 p 
: 
: 

: 
: 
: 

8.4 p 
19.6 p 
6.3 p 
65.8 ps 
83.7 p 
22.5 p 
9.7 p 
66.2 p 
82.3 p 
: 

Business 
Industrial production volume index (2015 = 100) 
Number of active enterprises (number) 
Birth rate: number of enterprise births in the reference period (t) divided by the number of 
enterprises active in t (%) 
Death rate: number of enterprise deaths in the reference period (t) divided by the number of 
enterprises active in t (%) 

Note 

2010 
84.7 
56 740 w 
16.1 w 

2017 
103.6 
55 359 w 
9.2 

2018 
109.2 
58 231 w 
8.4 b 

2019 
113.2 
58 765 w 
8.5 

2020 
102.4 
58 570 w 
8.0 

2021 
103.9 
59 122 pw 
: 

12.9 

7.7 

7.6 b 

8.4 p 

7.3 p 

: 

122 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
People employed in SMEs as a share of all persons employed (within the non-financial 
business economy) (%) 
Value added by SMEs (in the non-financial business economy) (EUR million) 
Total value added (in the non-financial business economy) (EUR million) 

77.8 sw 

74.3 sw 

74.1 sw 

73.7 sw 

73.9 sw 

75.0 psw 

2 399 sw 
3 641 w 

2 698 sw 
4 252 

2 895 sw 
4 579 

3 215 s 
4 878 

3 154 sw 
4 643 w 

3 528 psw 
5 089 pw 

Inflation rate and house prices 
Consumer price index (CPI), change relative to the previous year (%) 
**Annual change in the deflated house price index (2015 = 100) 

Balance of payments 
Balance of payments: current account total (million euro) 
Balance of payments current account: trade balance (million euro) 
Balance of payments current account: net services (million euro) 
Balance of payments current account: net balance for primary income (million euro) 
Balance of payments current account: net balance for secondary income (million euro) 
Net balance for primary and secondary income: of which government transfers (million euro) 
**3 year backward moving average of the current account balance relative to GDP (%) 
**Five year change in share of world exports of goods and services (%) 
Net balance (inward - outward) of foreign direct investment (FDI) (million euro) 
Foreign direct investment (FDI) abroad (million euro) 
of which FDI of the reporting economy in the EU-27 countries (million euro) 
Foreign direct investment (FDI) in the reporting economy (million euro) 
of which FDI of the EU-27 countries in the reporting economy (million euro) 
**Net international investment position, relative to GDP (%) 
Year on year rate of change in gross inflow of remittances (in national currency) from migrant 
workers (%) 

Public finance 
General government deficit / surplus, relative to GDP (%) 
General government gross debt relative to GDP (%) 
Total  government revenues, as a percentage of GDP (%) 
Total government expenditure, as a percentage of GDP (%) 

Financial indicators 
Gross external debt of the whole economy, relative to GDP (%) 
Gross external debt of the whole economy, relative to total exports (%) 
Money supply: M1 (banknotes, coins, overnight deposits, million euro) 
Money supply: M2 (M1 plus deposits with maturity up to two years, million euro) 
Money supply: M3 (M2 plus marketable instruments, million euro) 

Note 

Note 

Note 

Note 

2010 
1.1 d 
: 

2010 
: 
: 
: 
: 
: 
: 
: 
: 
156.9 w 
3.6 w 
: 
160.5 w 
103.9 w 
-  51.1 w 
2.8 sw 

2010 
-  2.4 w 
24.1 w 
30.2 w 
32.6 w 

2010 
57.8 sw 
150.5 w 
973.4 w 
3 318.2 w 
3 659.6 w 

2017 
2.1 d 
: 

2017 
-  78.3 
- 1 787.3 
374.7 
-  397.5 
1 731.8 
112.8 
-  1.7 
41.9 
180.0 w 
1.8 w 
7.2 w 
181.7 w 
87.3 w 
-  58.0 w 
1.9 sw 

2017 
-  2.7 w 
39.4 w 
29.1 w 
31.8 w 

2017 
73.4 s 
133.8 w 
2 053.3 w 
4 564.2 w 
5 480.3 w 

2018 
2.3 d 
: 

2018 
22.4 
- 1 736.2 
370.9 
-  450.7 
1 838.4 
109.1 
-  1.1 
51.6 
603.7 w 
10.4 w 
0.4 
614.1 w 
291.2 w 
-  56.2 w 
1.9 sw 

2018 
-  1.8 w 
40.4 w 
28.6 w 
30.4 w 

2018 
73.0 s 
121.4 w 
2 436.7 w 
5 103.4 w 
6 072.6 w 

2019 
0.7 d 
: 

2019 
-  334.7 
- 1 948.8 
335.7 
-  519.6 
1 798.0 
43.2 
-  1.2 
38.5 
363.3 w 
35.5 w 
27.2 
398.8 w 
220.2 
-  57.3 w 
: 

2019 
-  2.0 w 
40.7 w 
29.2 w 
31.2 w 

2019 
72.4 s 
117.0 w 
2 857.4 w 
5 609.3 w 
6 571.1 w 

2020 
1.2 d 
: 

2020 
-  318.0 
- 1 803.6 
423.7 
-  411.5 
1 473.4 
110.0 
-  1.9 
38.0 
154.7 w 
46.7 w 
31.3 w 
201.4 w 
42.3 w 
-  63.6 w 
: 

2020 
-  8.1 w 
51.2 w 
28.5 w 
36.7 w 

2020 
78.7 s 
136.3 w 
3 314.2 w 
6 215.5 w 
7 070.9 w 

2021 
3.4 d 
: 

2021 
-  366.4 
- 2 370.3 
495.9 
-  521.3 
2 029.4 
138.5 
-  3.0 
25.4 
387.5 w 
83.0 w 
59.7 
470.5 w 
449.7 
-  62.0 pw 
: 

2021 
: 
: 
: 
: 

2021 
81.9 ps 
123.7 pw 
3 605.5 w 
6 864.0 w 
7 703.7 w 

123 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total credit by monetary financial institutions to residents (consolidated) (million euro) 
**Annual change in financial sector liabilities (%) 
**Private credit flow, consolidated, relative to GDP (%) 
**Private debt, consolidated, relative to GDP (%) 
Interest rates: day-to-day money rate, per annum (%) 
Lending interest rate (one year), per annum (%) 
Deposit interest rate (one year), per annum (%) 
Euro exchange rates: average of period (1 euro = … national currency) 
Trade-weighted effective exchange rate index, 42 countries (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) 

3 148.7 w 
: 
: 
: 
3.78 w 
5.50 w 
: 
61.519 
: 
: 

4 883.0 w 
1.9 w 
: 
: 
1.01 w 
3.75 w 
0.25 w 
61.575 
: 
: 

5 237.6 w 
7.6 w 
: 
: 
0.99 w 
3.00 w 
0.15 w 
61.512 
: 
: 

5 552.3 w 
12.2 w 
: 
: 
1.00 w 
2.75 w 
0.15 w 
61.506 
: 
: 

5 791.4 w 
6.1 w 
: 
: 
1.00 w 
2.00 w 
0.15 w 
61.675 
: 
: 

6 277.8 w 
12.9 w 
: 
: 
0.88 w 
1.75 w 
0.15 w 
61.636 
: 
: 

2) 
3) 
3) 

3) 

1 714.5 w 

2 336.3 w 

2 867.1 w 

3 262.6 w 

3 359.9 w 

3 643.3 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) 
Terms of trade (export price index / import price index * 100) (number) 
Share of exports to EU-27 countries in value of total exports (%) 
Share of imports from EU-27 countries in value of total imports (%) 

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

Labour market 
Economic activity rate for persons aged 20–64: proportion of the population aged 20–64 that 
is economically active (%) 
*Employment rate for persons aged 20–64: proportion of the population aged 20–64 that are 
in employment (%) 
Male employment rate for persons aged 20–64 (%) 
Female employment rate for persons aged 20–64 (%) 
Employment rate for persons aged 55–64: proportion of the population aged 55–64 that are 
in employment (%) 
Employment by main sectors 
Agriculture, forestry and fisheries (%) 
Industry (%) 

124 

Note 

4) 

Note 

Note 
5) 

5) 

5) 
5) 
5) 

5) 
5) 

2010 
4 137 
2 535 
- 1 602 
98.6 sw 
63.7 s 
50.0 s 

2010 
2.5 

7.6 
72.9 
77.2 

2010 
70.3 

48.1 

58.4 
37.5 
34.2 

: 
: 

2017 
6 825 
5 007 
- 1 818 
95.3 sw 
79.7 s 
52.8 s 

2017 
0.7 

9.2 
74.1 
77.9 

2017 
70.3 

54.8 

65.6 
43.7 
41.4 

2018 
7 676 
5 873 
- 1 804 
94.9 sw 
80.3 s 
52.9 s 

2018 
0.8 

5.7 
74.6 
78.8 

2018 
70.4 

56.1 

66.6 
45.2 
42.7 

2019 
8 463 
6 424 
- 2 040 
95.3 sw 
78.5 s 
50.8 s 

2020 
7 599 
5 781 
- 1 818 
102.4 sw 
77.5 s 
46.3 s 

2019 
-  0.3 

5.6 
74.7 
78.6 

2019 
71.5 

59.2 

69.7 
48.4 
45.1 

2020 
-  3.2 

5.7 
72.2 
76.7 

2020 
70.5 

59.1 

68.9 
49.0 
45.7 

16.2 s 
23.3 s 

15.7 s 
23.9 s 

13.9 s 
24.1 s 

12.0 s 
23.9 s 

2021 
9 647 
6 969 
- 2 678 
: 
77.1 s 
46.2 s 

2021 
-  5.1 

4.6 
71.1 b 
75.5 b 

2021 
70.5 w 

59.5 w 

69.5 w 
49.2 w 
44.9 w 

11.5 w 
23.9 w 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Construction (%) 
Services (%) 
People employed in the public sector as a share of total employment, persons aged 20–64 
(%) 
People employed in the private sector as a share of total employment, persons aged 20–64 
(%) 
Unemployment rate: proportion of the labour force that is unemployed (%) 
Male unemployment rate (%) 
Female unemployment rate (%) 
Youth unemployment rate: proportion of the labour force aged 15–24 that is unemployed (%) 
Long-term unemployment rate: proportion of the labour force that has been unemployed for 
12 months or more (%) 
Unemployment rate for persons (aged 25–64) having completed at most lower secondary 
education (ISCED levels 0-2) (%) 
Unemployment rate for persons (aged 25–64) having completed tertiary education (ISCED 
levels 5-8) (%) 

5) 
5) 
6) 5) 

: 
: 
27.0 w 

7.2 s 
53.2 s 
23.2 w 

7.4 s 
52.9 s 
23.1 w 

7.0 s 
55.0 s 
23.2 w 

6.9 s 
57.1 s 
24.4 w 

6.8 w 
57.7 w 
25.6 w 

5) 

5) 
5) 
5) 
5) 
5) 

5) 

5) 

73.0 w 

76.8 w 

76.9 w 

76.8 w 

75.6 w 

74.4 w 

32.0 
31.9 
32.3 
53.7 
26.6 

37.9 

19.3 

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 

15.7 w 
16.4 w 
14.6 w 
36.4 w 
12.5 w 

22.8 w 

11.3 w 

Social cohesion 
Average nominal monthly wages and salaries (national currency) 
Index of real wages and salaries (index of nominal wages and salaries divided by the 
inflation index) (2016 = 100) 
GINI coefficient 
Poverty gap 
*Early leavers from education and training: proportion of the population aged 18–24 with at 
most lower secondary education who are not in further education or training (%) 

Standard of living 
Number of passenger cars relative to population size (number per thousand population) 
Number of mobile phone subscriptions relative to population size (number per thousand 
population) 
Mobile broadband penetration (per 100 inhabitants) 
Fixed broadband penetration (per 100 inhabitants) 

Infrastructure 
Density of railway network (lines in operation per thousand km²) 

Length of motorways (kilometres) 

Innovation and research 
Public expenditure on education relative to GDP (%) 
*Gross domestic expenditure on R&D relative to GDP (%) 

Note 

2010 
20 553 w 
101 w 

2017 
22 928 w 
101 w 

2018 
24 276 w 
106 w 

2019 
25 213 w 
109 w 

2020 
27 182 w 
116 w 

2021 
28 718 w 
119 w 

: 
: 
15.5 

32 
37.3 
8.5 

32 
37.7 
7.1 

31 
32.0 
7.1 

31 
34.9 
5.7 

: 
: 
4.6 w 

2010 
151.0 
1 098.2 w 

2017 
194.0 
968.3 w 

2018 
200.0 
935.9 w 

2019 
205.0 
924.8 w 

2020 
207.0 
896.8 w 

2021 
260.0 
902.7 w 

: 
: 

2010 
27.5 sw 

251 

2010 
: 
0.22 sw 

61.1 w 
19 w 

2017 
26.9 s 

259 

2017 
: 
0.35 

60.9 w 
19 w 

2018 
26.9 s 

287 

2018 
: 
0.36 

65.1 w 
22 w 

2019 
26.9 s 

335 

2019 
: 
0.37 

66.1 w 
23 w 

2020 
26.9 s 

335 

2020 
: 
0.37 

67.6 w 
23 w 

2021 
26.9 s 

335 

2021 
: 
: 

5) 

Note 

7) 

7) 
7) 

Note 
1) 

Note 

8) 

125 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Government budget appropriations or outlays on R&D (GBAORD), as a percentage of GDP 
(%) 
Percentage of households who have internet access at home (%) 

: 

: 

: 

: 

: 

: 

46.1 

73.6 

79.3 

81.6 

79.4 

83.7 

Environment 
*Index of greenhouse gas emissions,  CO2 equivalent (1990 = 100) 
Energy intensity of the economy (kg of oil equivalent per 1 000 euro GDP at 2015 constant 
prices) 
Electricity generated from renewable sources relative to gross electricity consumption (%) 
Road share of inland freight transport (based on tonne-km) (%) 

Energy 
Primary production of all energy products (thousand TOE) 
Primary production of crude oil (thousand TOE) 
Primary production of solid fuels (thousand TOE) 
Primary production of gas (thousand TOE) 
Net imports of all energy products (thousand TOE) 
Gross inland energy consumption (thousand TOE) 
Gross electricity generation (GWh) 

Agriculture 
Agricultural production volume index of goods and services (at producer prices) (2010 = 100) 
Utilised agricultural area (thousand hectares) 
Livestock numbers: live bovine animals (thousand heads, end of period) 
Livestock numbers: live swine (thousand heads, end of period) 
Livestock numbers: live sheep and live goats (thousand heads, end of period) 
Raw milk available on farms (thousand tonnes) 
Harvested crop production: cereals (including rice) (thousand tonnes) 
Harvested crop production: sugar beet (thousand tonnes) 
Harvested crop production: vegetables (thousand tonnes) 

Source: Eurostat and/or the statistical authorities in North Macedonia 

Note 
9) 

Note 

Note 

2010 
99.8 w 
358.4 

15.8 
89.0 w 

2010 
1 607 
0 
1 194 
0 
1 268 s 
2 881 
7 260 

2010 
100.0 w 
1 120.6 
: 
: 
: 
: 
547.8 
0.0 
741.7 

2017 
113.0 w 
293.0 

24.8 
96.4 w 

2017 
1 166 
0 
849 
0 
1 553 s 
2 763 
5 600 

2017 
99.9 w 
1 266.0 
255.0 
202.0 
832.0 s 
462.2 
452.9 
0.0 
769.6 

2018 
79.5 w 
267.1 

24.8 
97.2 w 

2018 
1 148 
0 
800 
0 
1 513 s 
2 592 
5 607 

2018 
111.8 w 
1 264.1 
256.0 
196.0 
844.0 s 
478.5 
605.3 
0.0 
792.9 

2019 
118.7 w 
283.8 

23.8 
96.7 w 

2019 
1 160 
0 
860 
0 
1 664 s 
2 862 
5 870 

2019 
105.4 w 
1 264.6 
219.0 
136.0 
771.0 s 
456.1 
569.6 
0.0 
772.7 

2020 
: 
270.1 

23.5 
96.9 w 

2020 
992 
0 
685 
0 
1 648 s 
2 596 
5 347 

2020 
108.8 w 
1 270.5 
222.0 
164.0 
726.0 s 
461.1 
585.5 
0.0 
794.2 

2021 
: 
268.2 

21.5 
96.8 w 

2021 
877 
0 
552 
0 
1 822 s 
2 678 
5 506 

2021 
: 
1 268.8 
178.0 
186.0 
709.0 s 
389.2 
568.9 
0.0 
798.0 p 

: = 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 

126 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
* = 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)  Data cover bilateral over-night transactions. The interest rates are calculated as weighted averages. 
3)  End of year (31 December). 
4)  Laspeyres unit value index. 2015 = 100. 
5)  The new IESS regulation has not been implemented 
6) 
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). 

In the public sector are included data: Other (mixed, collective, state, undefined) 

127