EUROPEAN
COMMISSION

Brussels, 6.10.2020
SWD(2020) 356 final

COMMISSION STAFF WORKING DOCUMENT
Kosovo* 2020 Report

Accompanying the
Communication from the Commission to the European Parliament, the Council, the
European Economic and Social Committee and the Committee of the Regions
2020 Communication on EU Enlargement Policy
{COM(2020) 660 final} - {SWD(2020) 350 final} - {SWD(2020) 351 final} {SWD(2020) 352 final} - {SWD(2020) 353 final} - {SWD(2020) 354 final} {SWD(2020) 355 final}

*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.

EN

EN

Table of Contents
1.

INTRODUCTION.............................................................................................................. 3

1.1.

Context ......................................................................................................................... 3

1.2

Summary of the report ................................................................................................. 4

2.

FUNDAMENTALS FIRST: POLITICAL CRITERIA AND THE RULE OF LAW ............................ 7

2.1

Functioning of democratic institutions and public administration reform ................... 7

2.2.1

Democracy ................................................................................................................... 7

2.1.2

Public administration reform...................................................................................... 13

2.2

Rule of law and fundamental rights ........................................................................... 17

2.2.1

Judiciary and fundamental rights ............................................................................... 17

2.2.2

Justice, freedom and security ..................................................................................... 39

3.

Fundamentals first: economic development and competitiveness ............................. 51

3.1.

The existence of a functioning market economy ....................................................... 51

3.2.

The capacity to cope with competitive pressure and market forces within the Union
.................................................................................................................................... 58

4.

Good neighbourly relations and regional cooperation ............................................... 60

5.

NORMALISATION OF RELATIONS BETWEEN KOSOVO AND SERBIA ............................... 62

6.

European standards .................................................................................................... 63

6.1.

Free movement of goods ............................................................................................ 63

6.2

Movement of workers, services and right of establishment ....................................... 65

6.3

Free movement of capital ........................................................................................... 66

6.4.

Financial services ....................................................................................................... 67

6.5.

Customs ...................................................................................................................... 69

6.6

Taxation...................................................................................................................... 70

6.7

Competition ................................................................................................................ 72

6.8

Public procurement .................................................................................................... 73

6.9

Company law ............................................................................................................. 76

6.10

Intellectual property law ............................................................................................ 76

6.11

Social policy and employment ................................................................................... 78

6.12

Consumer and Health Protection ............................................................................... 81

6.13

Education and culture ................................................................................................. 83

6.14

Science and research .................................................................................................. 85

6.15

Trade issues ................................................................................................................ 87

6.16

Enterprise and industrial policy ................................................................................. 88
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6.17

Agriculture ................................................................................................................. 90

6.18

Food safety, veterinary and phytosanitary policy ...................................................... 91

6.19

Fisheries ..................................................................................................................... 92

6.20

Environment and climate change ............................................................................... 92

6.21

Transport policy ......................................................................................................... 95

6.22

Energy ........................................................................................................................ 96

6.23

Trans-European networks .......................................................................................... 98

6.24

Information society and media ................................................................................. 100

6.25

Financial control....................................................................................................... 101

6.26

Statistics .................................................................................................................. 103

ANNEX I – RELATIONS BETWEEN THE EU AND KOSOVO ......................................................... 106

2

KOSOVO
1.

INTRODUCTION

1.1.

Context

The EU-Kosovo Stabilisation and Association Agreement (SAA) has been in force since
April 2016. The European Reform Agenda (ERA) has continued to serve as a useful tool to
guide the implementation of EU-related reforms in the SAA context.
In July 2018, the Commission confirmed that Kosovo has fulfilled all visa liberalisation
benchmarks endorsed by the Council. The Commission continues to stand behind this
assessment. The European Parliament confirmed its support for the Commission’s proposal
for visa liberalisation. The proposal is pending in the Council and should be treated as a
matter of urgency.
During the reporting period, Kosovo lifted the 100% tariff on imports from Serbia and Bosnia
and Herzegovina, which had been imposed in November 2018, as well as all reciprocity
measures. This has allowed for a restoration in trade with Serbia and Bosnia and Herzegovina
and for the resumption of the EU-facilitated Belgrade-Pristina dialogue.
The Kosovo authorities continued to demonstrate publicly their commitment to advance on its
European path.
The COVID-19 pandemic is a global shock that has not spared the Western Balkans. It
represents an unprecedented burden on their health and social protection systems. The final
extent of its footprint in terms of loss of human lives and damage to the economies is still
difficult to assess, but early Commission estimates foresee a drop of between 4 and 6% of
Gross Domestic Product in the region. Thousands of citizens are at risk of losing their jobs,
and temporary government support measures (unemployment benefits, deferrals/waivers to
tax and social security contributions, etc.) have an important fiscal impact.
While the EU is itself heavily affected by the pandemic, it has spared no time and effort to
provide essential and unparalleled support to the Western Balkans. This includes financial
support of more than EUR 3.3 billion for countries in the region to address the immediate
health crisis and resulting humanitarian needs, as well as longer term and structural impact on
their societies and economies. Given the European perspective of the Western Balkans, the
EU is also treating the region as privileged partners by associating them with the Union’s
mechanisms and instruments. These include the Health Security Committee, Joint
Procurement Agreements, Union Civil Protection Mechanism, Solidarity Fund, consular
assistance in repatriation or exemption from temporary EU export restrictions of medical
equipment. These and other measures have provided immediate relief and are a clear message
of the EU’s political commitment towards the region.
In Kosovo, the government declared a public health emergency in March 2020 and introduced
containment measures and restrictions to prevent the spread of the virus. Measures were
gradually lifted from early May 2020. However, in response to increasing numbers of cases
from early June, the government reintroduced in mid-July several public health measures,
including obligatory wearing of facemasks, curfews and testing requirements for entry into
Kosovo. In August 2020, the Kosovo Assembly adopted a new Law on prevention and fight
against the COVID-19 pandemic, in order to provide a solid legal framework for the required
public health measures.
In order to mitigate the social and economic effects of the COVID-19 crisis, an initial
emergency package of EUR 180 million was adopted in April 2020 to provide support for
3

businesses, farmers and employees, additional social protection and assistance measures,
flexibility for loans and tax payments. On 30 July, the Kosovo Assembly endorsed an
Economic Recovery Programme which includes an additional EUR 185 million for the year
2020. On 14 August, the Assembly ratified the EU Macro-Financial Assistance loan
agreement worth EUR 100 million, which aims to help Kosovo limit the economic fallout of
the pandemic.
The European Commission recommended that emergency measures taken in the context of
the COVID-19 pandemic are proportionate, restricted to what is necessary and limited in time
so that rule of law and democratic and human rights standards are respected.
1.2

Summary of the report

As concerns the political criteria, the reporting period was marked by early legislative
elections, two changes of government and relatively long periods with only a caretaker
government in place. Due to this volatile political context and the necessary focus on the
pandemic response, there was overall limited progress on EU-related reforms in Kosovo.
Following the resignation of the then Prime Minister Ramush Haradinaj in July 2019, early
legislative elections took place in October 2019, with a higher turnout than for the previous
elections. The new Assembly was constituted in December 2019 and a new government
headed by Prime Minister Albin Kurti took office on 3 February 2020, with a stated
commitment to pursue EU-related reforms, foster economic development and the fight against
corruption and organised crime. However, this government was dismissed less than two
months after, by a no-confidence vote, following disagreements between the coalition
partners. The vote of no-confidence led to a political crisis, notably over the constitutional
procedures regarding the formation of a new government. After the Constitutional Court
clarified the issue, a new government led by Prime Minister Avdullah Hoti took office on 3
June 2020.
During the reporting period, the Assembly did not improve its overall performance as a forum
for constructive political dialogue and representation, as demonstrated notably by the frequent
lack of quorum. Under the new legislature, there have however been some improvements in
the organisation of its work. The Assembly should prioritise EU-related reforms and ensure
parliamentary best practices.
The legislative elections of October 2019 were overall well-administered and transparent, but
the vote-counting process exposed vulnerabilities. The campaign was competitive, except in
the Kosovo Serb areas where the campaign environment was marred by intimidation against
non-Srpska Lista candidates and supporters. Recurring election process shortcomings need to
be urgently addressed, in line with the recommendations of several EU election observation
missions.
The situation in the north of Kosovo remains challenging, in particular when it comes to
corruption, organised crime, and the conditions for freedom of expression.
There is some level of preparation in the area of public administration reform. During the
reporting period, limited progress was made in increasing transparency in the public
administration and of public procurement procedures. Implementation of the package of three
public administration reform laws adopted in February 2019 was stalled as a result of the
political situation and the request for constitutional review of the Law on salaries and the Law
on public officials. On 30 June 2020, the Constitutional Court declared the Law on salaries
unconstitutional in its entirety and ruled that the Law on public officials needs to be amended
for it to fully enter into force. The Law on organisation and functioning of the state
4

administration is fully in force and its implementation should continue. Weak central and
inter-ministerial coordination remains a challenge for the overall implementation of the
reform. During the reporting period, non-merit based recruitments remained a concern, while
inclusive and evidence-based policy-making was hampered by ad hoc decisions, often
influenced by special interests. Kosovo authorities need to ensure that the reform of the public
administration remains a priority and should build on the progress achieved so far.
Kosovo's judicial system is at an early stage of preparation. Some progress was achieved
with the partial implementation of rule of law related legislation including the Law on the
disciplinary liability of judges and prosecutors and the Law on mediation, and with the
advancement of the roll out of an electronic case management system and central criminal
record registry. The judiciary is still vulnerable to undue political influence. The ongoing
Functional Review of the Rule of Law Sector has provided a sound basis to reform and
modernise various aspects of the judiciary. The Kosovo authorities should now take this work
forward. The administration of justice remains slow and inefficient and rule of law institutions
need sustained efforts to build up their capacities. The COVID-19 pandemic limited the
holding of court hearings in Kosovo; yet the Criminal Procedure Code specifies that if no
hearings are held for 3 months, the trial has to re-start. An important number of criminal trials
(including high-profile ones) may be affected by this rule. Kosovo authorities should followup on this issue and take the necessary measures to ensure effective and efficient conduct of
justice. Kosovo is at an early stage/has some level of preparation in the fight against
corruption. Kosovo has made limited progress in this area, including on the investigation and
prosecution of high level cases, on the confiscation of assets as well as through the creation of
the Special Departments handling cases regarding high-level corruption (and organised crime)
in the courts. Final confiscations of assets and the overall capacity of the prosecution,
including as regards supporting staff, remain low. Corruption is widespread and remains an
issue of serious concern. There is a need for strong political will to effectively address
corruption issues, as well as a robust criminal justice response to high-level corruption. The
adoption of the revised Criminal Procedure Code is still pending, while the revision of
political party financing legislation was delayed.
Kosovo is at an early stage in the fight against organised crime. Progress has included
investigating and prosecuting high-level cases, recruiting additional staff for the special
prosecution office and training and awareness raising on the freezing of assets. However,
overall progress has been limited. There are still few financial investigations, final
confiscations of assets and final convictions. Measures are needed to strictly ensure there is no
political interference with operational activities of law enforcement bodies and the
prosecution. The situation in the north of Kosovo with regards to organised crime continues to
pose challenges for law enforcement agencies.
In July 2020 Europol and the Kosovo Police concluded a Working Arrangement. Kosovo was
the only partner in the Western Balkans without any structured and formalised cooperation
with Europol, which created a significant gap. The arrangement will constitute the basis for
enhanced cooperation between Kosovo Police, Europol and EU Member States, in particular
in addressing terrorism and extremism as well as organised crime.
Progress was made in the fight against terrorism, in line with the objectives set out in the EUKosovo implementing arrangement for the Joint Action Plan on counter-terrorism for the
Western Balkans, especially with regard to the rehabilitation and reintegration of foreign
terrorist fighters and their families. The Kosovo authorities need to be more effective in their
efforts to fight money laundering and the relevant law should be brought in line with EU
acquis and international standards.
5

The legal framework broadly guarantees the protection of human and fundamental rights in
line with European standards. However, the implementation of human rights legislation and
strategies is often undermined by inadequate financial and other resources, particularly at
local level, limited political prioritisation and lack of coordination. The large dependence on
foreign donors remains. The adoption of the Law on Child Protection fulfilled one of the
recommendations of last year’s report. More needs to be done to effectively guarantee the
rights of persons belonging to minorities, including Roma and Ashkali and displaced persons,
to ensure gender equality in practice, and to advance the protection of cultural heritage.
Kosovo has some level of preparation regarding freedom of expression, which is enshrined
in the Constitution. Kosovo benefits from a pluralistic and lively media environment. Rule of
law institutions need to continue efforts to follow-up on threats and attacks against journalists.
The public broadcaster remains vulnerable to political influence and a sustainable solution for
its funding still needs to be found.
The Kosovo authorities have made progress in managing both regular migration and mixed
migration flows. Kosovo activated its contingency plan due to the influx of asylum seekers
and irregular migrants. Its efforts should be continued and built on.
As regards the economic criteria, Kosovo is at an early stage and has made limited progress
in developing a functioning market economy. Robust economic growth continued in 2019, but
the difficult labour market situation and the lack of economic diversification remain a
challenge. While the government adhered to the fiscal rule in 2019, the composition of public
spending has further deteriorated. Decreasing capital spending, rising pressures related to nonpoverty-targeted social benefits and increasing public wages pose risks to public finances and
hinder private sector development. The business environment saw limited improvements.
Private sector development remains constrained by a widespread informal economy, a slow
and inefficient judiciary, a high prevalence of corruption and the overall weak rule of law.
Kosovo’s economic outlook started to deteriorate rapidly in spring 2020, as the COVID-19
quarantine measures disrupted the financial flows with diaspora. Kosovo is at an early stage
and has made limited progress in terms of capacity to cope with competitive pressure and
market forces in the EU. The quality of education remains a concern. Kosovo made some
progress in improving road infrastructure, but there are large gaps in railway and energy
infrastructure. Although investments in renewables are gradually increasing, Kosovo remains
reliant on a predominantly coal-based, outdated and unreliable energy production system.
Kosovo made some progress as regards the digitalisation of the economy. The economy’s
sectorial structure is shifting towards non-tradable activities, which weight on competitiveness
and growth of merchandise exports.
As regards good neighbourly relations and regional cooperation, Kosovo continued to
participate in most regional fora. In April 2020, the Kosovo government lifted the tariffs
imposed since November 2018 on imports from Serbia and Bosnia and Herzegovina and on 6
June all reciprocity measures were lifted. This has allowed for a restoration in trade with
Serbia and Bosnia and Herzegovina and for the resumption of the EU-facilitated BelgradePristina dialogue.
Regarding the normalisation of relations with Serbia, the EU-facilitated dialogue resumed
with high-level meetings on 12 and 16 July, and 7 September 2020. A number of expert level
meetings took place in Brussels. Kosovo needs to make further substantial efforts and
contribute to reaching a comprehensive legally-binding agreement with Serbia. Such an
agreement is urgent and crucial so that Kosovo and Serbia can advance on their respective
European paths.

6

As regards alignment with European standards, Kosovo has overall some level of
preparation. Legislative alignment has continued in some areas but implementation is often
weak. Good progress was made in the area of taxation, including as regards revenue
collection. Some progress was made in the area of free movement of goods, services and
capital, as well as on financial services, public procurement and competition. Some progress
was also made in the area of energy, notably with energy efficiency measures in the public
sector and a gradual increase of investments in renewable energy sources. Limited progress
was achieved in addressing environmental issues. No progress was made in the area of
education and the quality of education needs to be improved considerably. Overall, Kosovo
needs to improve its administrative capacity and coordination, across all sectors, to ensure
effective implementation of the EU acquis.
2.

FUNDAMENTALS FIRST: POLITICAL CRITERIA AND THE RULE OF LAW

2.1

Functioning of democratic institutions and public administration reform

2.2.1 Democracy
The reporting period was marked by early legislative elections, two changes of government
and relatively long periods with only a caretaker government in place. The elections of
October 2019 were competitive (except in Kosovo Serb areas), but the vote-counting process
exposed vulnerabilities. The governing coalition that resulted from these elections collapsed
after a no-confidence vote less than two months after taking up office, leading to a political
crisis in the middle of the COVID-19 pandemic and to the formation of a new government.
The Assembly has continued to function during the pandemic crisis, albeit in a reduced mode.
Two local by-elections were postponed due to the pandemic. Due to the volatile political
context and the necessary focus on the pandemic response, there was overall limited progress
on EU-related reforms during the reporting period.
Elections
The early legislative elections of October 2019 were overall well-administered and
transparent, but the vote-counting process exposed vulnerabilities, in particular in the
handling of complaints. The campaign was competitive, except in the Kosovo Serb areas
where the campaign environment was marred by intimidation against non-Srpska Lista
candidates and supporters. Kosovo's electoral process needs to be further strengthened by
effectively addressing long‑ standing weaknesses throughout the electoral cycle. Recurring
systemic problems with the election process, which were already identified by EU election
observation missions in 2014, 2017 and 2019, need to be addressed by the Assembly and
other institutions. The legal framework governing campaign and political party financing
remains in need of substantial amendments in line with Venice Commission guidance and
best international practice.
Following the resignation of former Prime Minister Ramush Haradinaj in July 2019, early
legislative elections were held on 6 October.
The elections were called with the longest possible notice of 45 days after the dissolution of
the Assembly, as provided by the Constitution. Voter turnout was 44.5% (compared with 41.3
% in 2017). The two opposition parties Vetëvendosje and Democratic League of Kosovo
(LDK) became the largest parties in the Assembly with 29 and 28 seats respectively, having
won 26.27% and 24.55% of the vote. The Democratic Party of Kosovo (PDK) won 24 seats
(21.23%), the pre-electoral coalition of the Alliance for the Future of Kosovo (AAK) and the
Social Democratic Party (PSD) won 13 seats (11.52%) and the pre-electoral coalition of the
Social Democratic Initiative (Nisma), the New Kosovo Alliance (AKR) and the Justice Party
(PD) won 6 seats (5.00%), just passing the parliamentary threshold. Srpska Lista won all 10
7

seats reserved for the Serb non-majority community of Kosovo with 6.40% of the total vote.
The remaining 10 seats are shared between eight political parties representing other nonmajority communities.
Election preparations and election day itself were generally well-administered and transparent
and the EU Election Observation Mission has assessed the process positively. The campaign
was vibrant and competitive, allowing contestants to campaign freely in most parts of
Kosovo. However, there was a lack of competition in the Kosovo Serb areas and the
campaign environment was marred by intimidation, targeted at non-Srpska Lista Serb
candidates and supporters. Throughout Kosovo, cases of misuse of public resources and a lack
of transparency in campaign financing resulted in an uneven playing field. The credibility of
the post-election day counting and tabulation process was negatively affected by several
factors, most notably the inefficient handling of complaints by the Election Complaints and
Appeals Panel and controversial court decisions. These had an important impact on the final
election results – one ruling in particular enabled one of the pre-electoral coalitions (NISMAAKR-PD) to pass the parliamentary threshold narrowly – and significantly delayed their
certification. Long-standing weaknesses of the election process in Kosovo include the lack of
effective oversight and enforcement of political party and campaign finance,
underrepresentation of women in political party structures and elected office, deficient
electoral dispute mechanisms, voter list inaccuracies and deficiencies in the process of out-ofKosovo voting. Kosovo institutions need to address these challenges early on in the new
legislative period, in line with the EOM recommendations and in close collaboration with
international and local partners.
The joint initiative taken by the Kosovo Assembly caucus leaders in April 2019 to address
shortcomings and strengthen the electoral process in line with the recommendations of the
electoral observation missions led to the Assembly deciding to establish an ad hoc
parliamentary committee on this matter, involving local and international experts and
stakeholders. While this is a welcome step, no concrete steps have yet been taken by the
Assembly Committee. The new legislature should start this work without delay.
Women candidates did not receive equal financial or logistical support from their political
entities for their campaigns, and they rarely spoke at rallies. The media gave priority coverage
to male candidates. Among the 120 newly elected Members of Parliament, 39 are women.
Women remain underrepresented at all levels of participation and decision-making in political
parties, electoral administration, and central and local assemblies. There are still discrepancies
between the electoral legal framework, which mandates a 30% gender quota for the
Assembly, and the equal representation provision of the Law on Gender Equality (50%).
In 2019, 10 out of 11 members of the Central Election Commission (CEC) were appointed,
enabling the CEC to carry out its work. The CEC has to improve its internal organisational
structure with clear terms of references for each staff member in the secretariat and clear lines
of hierarchical responsibility in order to avoid quality control failures.
The legal framework and regulatory practice governing party and campaign finances does not
ensure complete reporting, timely disclosure, meaningful oversight or accountability for
irregularities (see the ‘Parliament’ section, below).
During the reporting period, two mayoral by-elections, in Podujevë/Podujevo and
Mitrovica/Mitrovicë North (in both cases triggered by the resignation of mayors after their
appointment as government members) were postponed due to the COVID-19 crisis.
Parliament

8

During the reporting period, the Assembly did not improve its overall performance as a forum
for constructive political dialogue and representation. This has continued to hamper its
legislative activity. However, under the guidance of the new Speaker, there has been some
improvement to the organisation of the Assembly’s work. The Assembly needs to address its
shortcomings and reinforce its functioning, notably by improving its regulatory framework,
including rules of procedures. The Assembly remained open during the pandemic crisis, while
putting in place sanitary protection measures.
Following the 6 October 2019 early elections, on 26 December 2019 the seventh legislature of
the Assembly of Kosovo was constituted. For the first time, the elected Speaker of the
Assembly is a woman. The Assembly has 120 deputies, including 10 representing the Serb
community and 10 representing other non-majority communities. Kosovo has a mandatory
quota of 30% of Assembly seats reserved for women.
On 3 February, the Assembly elected with a majority of 66 votes the new government headed
by Prime Minister Albin Kurti, based on a coalition between Vetëvendosje and LDK. Less
than two months after, on 25 March, the Assembly (with 82 votes) voted for the dismissal of
the government, based on a motion of vote of no-confidence initiated by then junior coalition
partner LDK. The coalition fell at a time of disagreements over the conditions for abolishing
the 100% tariff on goods from Serbia and Bosnia and Herzegovina (introduced by the
previous government), as well as regarding the handling of the COVID-19 pandemic.
The vote of no-confidence led to a political crisis, notably over the constitutional procedures
regarding the formation of a new government. Vetëvendosje considered that a new
government should only be formed after new elections. The party challenged, before the
Constitutional Court the President’s decree to mandate Avdullah Hoti (LDK) to form a
government. On 28 May, the Court validated the President’s decree, opening the way for the
election of the new government. The Assembly elected the new Hoti government with a
narrow majority (61 out of 120 votes), based on a coalition between LDK, AAK, Srpska
Lista, NISMA, and non-majority community parties.
During 2019, under the previous legislature, the Assembly’s efficiency was reduced due to
recurrent absence of deputies from Assembly proceedings and the irregular holding of plenary
sessions, with items dragging from one session to another. Due to the polarised political
environment, the lack of majority of the former ruling coalition, frequent boycotts by
opposition parties, the absence of ruling coalition members, the Assembly was frequently
unable to reach a quorum to adopt laws and make decisions. Frequent violation of the
Assembly rules of procedure, improper management of the plenary sessions and an inability
to use the ordinary/primary mechanisms to oversee the government’s work, were features of
almost every plenary session. In 2019, out of a total of 24 plenary sessions, only 6 were
regular (i.e. not of an extraordinary, special or solemn nature).
In 2020, the new legislature assumed its work in difficult circumstances due to the COVID-19
pandemic. The Assembly continued to meet, however in a reduced manner during several
months, applying public health prevention measures. Plenary sessions and committee
meetings took place without the presence of media and visitors; plenary sessions were live
streamed over the internet. In the first half of 2020, out of 16 plenary sessions, 7 were regular.
Since the vote of no-confidence, including after the election of a new government in June, the
Assembly has been marked by a lack of a stable majority, high political polarisation and
important delays in decision-making, including on issues of major importance related to the
COVID-19 crisis, such as the ratification of international financing agreements.

9

Under the new legislature, there has been some improvement in the management of plenary
sessions, resulting in better compliance with the rules of procedures. In May 2020, measures
were taken by the Assembly Presidency to improve financial control.
Parliamentary oversight of the executive as well as other institutions remains weak overall,
and the existing parliamentary instruments for oversight of the executive were not utilised.
For instance, the Assembly needs to strengthen the work of parliamentary committees and
create follow-up mechanisms to oversee the executive as well as other institutions. The
Assembly's Committee on Oversight of Public Finances reviewed the reports provided by the
Office of the Auditor General. However, there was no effective follow-up, showing that
coordination with other parliamentary committees needs to be improved. Although the
Parliamentary Committee on European integration carried out its work correctly, the
Assembly's capacity to monitor the compliance of new legislation with the EU acquis and to
ensure implementation remains limited.
As regards parliamentary inquiries, in June 2019, the Assembly adopted the inquiry
committee’s report on the illegal deportation of six Turkish nationals legally residing in
Kosovo, which found 31 violations, including serious breaches of human rights and legal
procedures. The prosecution followed up on some of those alleged violations by investigating
and indicting several police officials involved in the operation. Most other inquiry committees
did not finalise their work. The Assembly needs to build up specialist expertise to lend more
effective support to parliamentarians and committees.
The Ombudsperson Institution of Kosovo continued to promote, protect and uphold
fundamental rights and freedoms, to assist the Assembly in its oversight function. During the
reporting period, the Ombudsperson addressed 225 recommendations to public authorities, of
which only 71 received a response from institutions. The implementation by institutions of
recommendations remains stable. Furthermore, the Ombudsperson has used his mandated
powers to refer legislation adopted by the Assembly to the Constitutional Court.
The financing and expenditures of political parties and electoral campaigns remains nontransparent, the existing legal framework is largely unenforced, and most political parties
represented in the Assembly continue to exhibit serious weaknesses in internal financial
control. Political parties, oversight institutions and the CEC should assume responsibility for
ensuring transparency, accountability and effective use of enforcement mechanisms. The
Parliamentary Committee on Oversight of Public Finances has conducted formalistic audits of
parties' annual financial reports and political parties have provided campaign disclosure
reports. However, even clear violations and breaches of legal limits as well as unidentifiable
money flows have not been followed up by competent authorities. The CEC's Office of
Political Parties Registration and Certification continues to need significant strengthening,
additional capacity and legally guaranteed operational independence in exercising its
functions. Furthermore, better cooperation with other competent authorities, such as the
Auditor General, the Anti-Corruption Agency, the prosecution and tax authorities are crucial.
Legislative amendments, which were prepared by the government after consultation with the
Venice Commission and would have addressed many of the severe weaknesses in the current
legal framework, were not supported in the Assembly (under the previous legislative period)
and eventually withdrawn. The new government should work with the new legislature to
ensure that meaningful and substantial progress is made in this area, building on the work
done previously.

10

Governance
In an overall context of political instability, only limited progress was made in further
implementing European Reform Agenda (ERA) commitments and availing opportunities of
the Stabilisation and Association Agreement (SAA) during the reporting period. Kosovo
institutions should urgently reinvigorate the reform processes. Since March 2020, government
priorities have also been impacted by the COVID-19 pandemic. In April 2020, the caretaker
government, under the then outgoing Prime Minister Kurti, lifted the 100% tariff on goods
from Serbia and Bosnia and Herzegovina, while introducing gradual trade reciprocity
measures, later revoked by the successor government under Prime Minister Hoti. This has
allowed for restoration of trade with these two countries and paved the way for the resumption
of the EU-facilitated Belgrade-Pristina dialogue in July 2020.
The reporting period was marked with two changes of government and prolonged periods of
caretaker government. In July 2019, Prime Minister Ramush Haradinaj announced his
resignation, citing his summons by the Kosovo Specialist Prosecutor's Office. During the
second half of 2019, as political focus shifted to early elections, the Haradinaj government
continued to exercise routine functions in its role as caretaker government. During 2019,
overall limited progress was made in implementing commitments under the ERA and the
Economic Reform Programme (ERP). The government maintained overall financial and
budgetary stability, notably by increasing tax revenues and carrying out tax reforms.
However, it failed to improve the conditions necessary to address structural challenges
undermining private sector employment and did not bring forward educational reforms.
Furthermore, ad hoc decision-making that conflicted with stated reform objectives continued.
This included decisions with significant budgetary implications and non-merit-based
appointments. This further undermined overall public trust in government institutions.
Following the October 2019 legislative elections, the government led by Albin Kurti, based
on a coalition between Vetëvendosje and LDK, took office on 3 February 2020. It included 2
deputy prime ministers, 15 ministers and 31 deputy ministers. It was therefore significantly
smaller than the previous government, whose excessive size had become the subject of public
concern. Women representation in senior government positions increased: of 18 government
members, 5 were women.
The short-lived government led by then Prime Minister Kurti had put forward a programme
focused on the fight against corruption and organised crime and on economic development.
Several controversial decisions of the previous government under Ramush Haradinaj were
reversed (e.g. ad hoc increase of senior officials’ salaries, excise tax on tobacco, insufficiently
costed infrastructure projects). The government also dismissed the boards of several publiclyowned enterprises, on the grounds of irregularities and lack of performance identified in audit
reports, and replaced them with interim boards. Permanent board members will need to be
appointed following open, transparent and merit-based selection processes. More generally,
the governance of publicly-owned enterprises needs to be significantly improved. Shortly
after taking office, the Prime Minister Kurti’s government was faced with the COVID-19
pandemic and declared a public health emergency. The government introduced a number of
restrictive measures to prevent transmission of the virus, and adopted initial economic
emergency measures.
After the collapse of the coalition, in April 2020 the caretaker government under Albin Kurti
adopted a decision to lift the 100% tariff on goods from Serbia and Bosnia and Herzegovina,
while introducing gradual trade “reciprocity measures”, initially limited and implemented in
line with existing agreements. The measures were however significantly expanded on 30

11

May, before being completely revoked by the successor government of Prime Minister Hoti in
early June.
The government of Prime Minister Hoti, which took office on 3 June, adopted a programme
which prioritises the resumption of the dialogue with Belgrade and the post-COVID-19
economic recovery. The government of Prime Minister Hoti includes 4 deputy prime
ministers, 16 ministers and 46 deputy ministers. Out of 21 government members, 4 are
women. As the central institution in charge of the legal approximation process with the EU
acquis, the Ministry of European Integration coordinated the implementation of the SAA and
the fulfilment of ERA priorities and actions and prepared regular reports on ERA
implementation. The Ministry’s planning and monitoring of measures and activities has
improved. However, coordination, planning and monitoring of donor assistance needs to be
strengthened. The new government decided to dissolve the Ministry of European Integration
and to put EU coordination functions under the Office of the Prime Minister, under
institutional arrangements that are yet to be defined. It will be of critical importance that the
knowledge and expertise built up to coordinate all EU-related matters, the Stabilisation and
Association Agreement and EU financial assistance, is preserved.
Local government improved its performance and service delivery. However, significant
disparities between municipalities persist and human and financial resource constraints
continue to negatively impact municipalities’ ability to carry out their mandates. Municipal
assemblies have limited effective budgetary powers and exercise insufficient oversight over
municipal administrations, while excessive political influence over local administrations
weakens local governance. Legislative reforms are necessary to realign funding and
competences between central and local government and to create a specific grant for social
services. Apart from regular transfers in the form of a general grant, municipalities receive
significant funding for capital investments at the discretion of line ministries. In this context,
the Ministry of Local Government Administration’s creation of a municipal performance
grant, which puts in place non-politicised rules for grant disbursement, is a welcome step.
Other ministries should also develop ways to disburse their grants in a rule-based, fair and
transparent way.
Women remain underrepresented in local decision-making and there are currently no female
mayors in any of Kosovo's municipalities. Out of Kosovo's 38 mayors, 27 are from the
Albanian community, 10 from the Serb community and 1 is from the Turkish community. All
municipalities have fulfilled their obligation to appoint deputy mayors from non-majority
communities.
Civilian oversight of security services
As regards parliamentary oversight of security forces, there have been some improvements in
the work of the parliamentary committee on internal affairs, security and supervision of the
Kosovo Security Force and of the oversight committee for the Kosovo Intelligence Agency.
However, parliamentary oversight of security forces expenditure remains insufficient. The
Assembly’s Inquiry Committee on the illegal deportation of six Turkish nationals legally
residing in Kosovo, whose report was adopted in June 2019, found alleged wrongdoings by
Kosovo’s security institutions involved in the operation.
Civil society
The environment in which civil society operates continued to improve and government
authorities continue to make efforts to enhance the ability of civil society to contribute
meaningfully to policy development. However, further efforts are needed to enhance
transparency of public funding for civil society organisation.
12

An empowered civil society is a crucial component of any democratic system and should be
recognised and treated as such by public institutions. Civil society organisations (CSOs) in
Kosovo continue to play an important role in the democratic debate and in the design and
implementation of public policy. They play an active and critical role in promoting civil,
political, economic, social and cultural rights, and do so largely free from undue pressure by
Kosovo authorities.
The Law on freedom of association approved in April 2019 aligned the legal framework for
CSOs to the best international standards and practices.
The strategic framework for cooperation between the Kosovo government and civil society
for the 2019-2023 period was approved in February 2019 following extensive consultations
with CSOs and the general public. Based on this strategic framework, a new Government
Council for Cooperation with Civil Society was set up and started work in July 2019.
Public consultations launched by the central government are becoming more regular but
should be further improved with easier access to data and more regular feedback from public
authorities. Awareness and promotion of consultation platforms is crucial in order to broaden
the engagement of CSOs and citizens.
The transparency of CSOs’ public financing needs to be further improved. Despite some
improvements in the last two years, the limited capacity of both local and central authorities
to correctly implement new transparency and accountability standards means that the public
funding of CSOs remains at risk of corruption and conflicts of interest. Easy access to detailed
information regarding public funds disbursed to CSOs by any public body should be made
publically available. At the same time, access banking services is determined by the legal
framework for preventing money laundering and terrorism, which creates several limitations
to the financial viability of CSOs. The sectorial risk assessment of money laundering and
terrorist financing of the CSO sector needs to be comprehensively updated so that the
legislation can be revised to allow for a flexible approach to lower-risk CSOs (see section on
the fight against organised crime and section 6.3 on the free movement of capital).
More transparent and better harmonised procedures for CSOs’ public service are needed in
order to improve their financial viability. A comprehensive legal framework and favourable
tax regime for individual and corporate philanthropy should be considered. There should be
standard criteria and procedures for allocating public property and confiscated assets for use
by CSOs, and these should be implemented at central and local level.
Volunteering should be further promoted through dedicated programmes, and volunteer
standards and practices should be aligned with international standards. Work on a
comprehensive legal framework on volunteering has started.
2.1.2 Public administration reform
Kosovo has achieved some level of preparation in the reform of its public administration.
Limited progress was made in increasing transparency of the public administration and of
public procurement. Implementation of the package of three public administration reform
laws adopted in February 2019 stalled. Two of the laws, the Law on public officials and the
Law on salaries, were temporarily suspended by the Constitutional Court almost as soon as
they entered into force. The Court, in June 2020, declared the Law on Salaries
unconstitutional, while requiring amendments to the Law on Public Officials by the Assembly
for it to fully enter into force. Overall, weak central and inter-ministerial coordination
continues to hamper the implementation of cross-cutting reforms. Delays in harmonising
special laws with the Law on General Administrative Procedures continue to cause legal
uncertainty for citizens and businesses. The government should ensure that the public
13

administration reform remains a priority and follow on the reform efforts of the previous
government.
Instances of political influence on recruitments to senior civil service positions and nonmerit-based recruitments continue to undermine citizens trust in the public administration. Ad
hoc policy-making, in cases influenced by special interests, remained an obstacle for inclusive
and evidence-based policy-making. These issues were among the central concerns expressed
by citizens during the campaign for the legislative elections in October 2019. It is of utmost
importance that Kosovo institutions ensure integrity and transparency in recruitments in the
public service.
As last year's recommendations were not sufficiently mplemented, they remain valid. In the
coming year, Kosovo should in particular:
 make the necessary legislative amendments to the Law on public officials in line with the
Constitutional Court ruling, finalise outstanding sub-legal acts and start effectively
implementing the law;
 align contradictory special laws with the Law on General Administrative Procedures and
address the current backlog of administrative court cases;
 increase accountability in the public sector by implementing the action plan on the
rationalisation of agencies and creating a clear framework for managerial accountability
and the delegation of responsibilities in public institutions, in line with the new Law on
organisation and functioning of state administration and independent agencies;
 ensure full respect for merit-based recruitment and dismissal of public officials, especially
senior management.
Strategic framework for public administration reform
Progress in the implementation of the three public administration reform strategies slowed
down following the resignation of Prime Minister Ramush Haradinaj, due to lack of decisionmaking on key implementing legislation. Implementation of the 2016-2020 public financial
management reform strategy continued. The government continued to monitor
implementation of the strategies and published annual monitoring reports. Reporting
improved further. However, monitoring of the public administration reform strategies focused
primarily on the implementation of individual activities without a proper analysis of specific
results, which made real assessment of progress difficult. Further progress on linking strategic
priorities with government budgeting will improve both implementation and monitoring. Civil
society continues to monitor the government’s reform efforts. The lead central institutions are
working well together to efficiently coordinate the reform process and ensure an appropriate
monitoring and reporting system. There is a need to improve administrative data collection,
storage and quality control.
The Minister for Public Administration and the National Coordinator for State Reform in the
Haradinaj government demonstrated political support for the implementation of reforms.
However, during the political transition following the resignation of former Prime Minister
Haradinaj, such political commitment was lacking, which slowed down reforms. The Albin
Kurti government’s decision to decrease the number of ministries and therefore, merge the
Ministry of Public Administration with the Ministry of Internal Affairs further delayed
implementation of reforms. Under the new government, responsibilities for the public
administration reform remain within the Ministry of Internal Affairs, while the Deputy Prime
Minister has been put in charge of the overall political coordination of reforms, including the
public administration reform. It is important that the new government builds on the progress
14

already achieved and demonstrates commitment to and ownership of
administration reform.

the public

Policy development and coordination
The policy-making system, including for EU-related reforms, is complex and is currently
being reviewed, to better link strategic priorities with the budgeting process. A new national
strategic management framework is being developed, and will accompany the administrative
instruction on strategic planning, development and monitoring. The new framework aims to
reduce overlaps between sector strategies and should improve prioritisation and budget
planning, as well assimplify reporting. The Office of the Prime Minister has to ensure that
there is strong quality control and monitoring to support implementation.
Some aspects of inclusive and evidence-based policy and legislative development are in
place, though ad hoc policy-making persists, and in many cases is influenced by special
interests. The Office of the Prime Minister should take a stronger leadership role in ensuring
that regulatory and budgetary impact assessments and EU acquis alignment opinions are
systematically considered and addressed in adopted government decisions. Improved
administrative data collection and its systematic use for policy-making remain necessary
across the administration. Public consultations are organised regularly, but the minimum
standards for such consultations are not being followed consistently. In 2019, more than 82%
of all primary policy documents and draft laws were published for consultation on the web
portal. As the response rate from civil society and the public remains relatively low, the
government is making efforts to promote the use of the web-portal.
Public scrutiny of government work is improving with the increased availability of public
data on the government’s open data platform. By the end of 2019, 195 data sets were
published in the Open Data Portal. Consistent implementation of the new Law on access to
public documents should further improve the public’s ability to hold the government to
account. The government continued to make efforts to increase the possibility for civil
society to contribute meaningfully to policy design, monitoring and the evaluation of
government plans and programmes. Parliamentary scrutiny of the government remains
inadequate (see section 2.1.1 – Democracy).
Public financial management
The 2016-2020 Public Financial Management Reform Strategy sufficiently addresses the
most pressing challenges facing the government in this area. The 2019-2020 Action Plan is
well developed and includes detailed costing.
Work to improve the relevance of the medium-term expenditure framework linking national
development priorities and budget planning is ongoing.
Public procurement procedures are increasingly transparent. However, contract
implementation remains prone to irregularities and vulnerable to corruption. Domestic
revenue collection increased during 2019, albeit still falling short of budgeted projections.
(see also Chapters 5, 16, 29 and 32)
To improve budget transparency, the Ministry of Finance launched a regularly maintained
and well functioning ‘transparency portal’ containing budgetary information from central and
municipal level institutions. The government continues to publish the citizen-friendly budget.
However, the IT systems available in the Ministry of Finance and related bodies need to be
looked at further to ensure that they provide better integrated real time information on public
revenue and expenditure.

15

Public service and human resource management
The legal framework for the merit-based recruitment, promotion, dismissal, and the
remuneration of civil servants improved with the adoption of the Law on public officials and
the Law on salaries in February 2019. However, application of the laws was suspended after
the Ombudsperson challenged them in front of the Consitutional Court. In June 2020, the
Court took its final decision on the application of the two laws, declaring the Law on salaries
unconsitutional and proposing further legislative amendments to the Law on public officials.
The merger of the Ministry of Public Administration into the Interior Ministry has delayed the
development of organisational capacities to manage the new system of public officials as set
out in the Law on public officials. Some secondary legislation, including the classification of
public officials, still needs to be finalised to fully implement the Law. .
Although the procedures for the recruitment of senior civil servants improved, political
influence over such appointments and dismissals remained a serious concern. Non-majority
communities remain underrepresented in central public institutions and women are still highly
underrepresented in senior positions in the civil service. The Independent Civil Service
Oversight Board, the autonomous appeals body tasked with ensuring compliance with
applicable civil service legislation, is currently not functional due to a lack of board members.
As a result, hundreds of complaints regarding employment disputes of civil servants and
candidates for admission to the civil service have not been reviewed. Cases are ending up in
courts instead.
The capacity of the Kosovo Institute for Public Administration with a limited budget and
ability to provide the necessary training remains weak, which continues to hamper the
recruitment process and professional development of civil servants. Performance
appraisals continue to have little impact on career development. This undermines the
implementation of the Law on public officials, in particular for the recruitment, initial training
and professional development of civil servants.
Also, line institutions’ human resources management units need to be improved. An
information system was set up to manage human resources, but not all modules are
operational and there is still no interoperability with the payroll system.
Although measures such as integrity plans are in place to promote integrity in the public
service, they are not systematically implemented across the administration. Implementation of
the Law on conflicts of interest remains patchy. Progress was made in the implementation of
whistle-blower protection rules with the appointmenmt of officers tasked with handling
whistle-blower complaints in over 175 public institutions. However, whistle-blowing
mechanisms and protection requirements now need to be strengthened in practice. Annual
reports on disciplinary measures taken against civil servants are being regularly published
(see section on the fight against corruption).
Accountability of the administration
Kosovo demonstrated its commitment to strengthening the lines of accountability in its
administration. Despite this commitment, however, there was no progress on implementing
the action plan on the rationalisation of agencies adopted in June 2018, due to the political
situation in Kosovo. Implementation of the Law on the organisation and functioning of public
administration and independent agencies which paves the way for a more efficient
administration respecting the principles of merit and transparency, is currently hampered by
the absence of approved implementing legislation. It is important that the implementing
legislation is effectively enforced throughout the administration once it is in place. Although
the new law introduces clearer administrative, budgetary and decision-making lines within the
16

administration, Kosovo still needs to make considerable further efforts to implement
managerial accountability, put in place better performance management mechanisms, and
delegate decision-making responsibilities within the public administration (see section 6.25 –
Financial control).
The independent oversight institutions, especially the Ombudsperson and the Kosovo
National Audit Office, continue to address citizens’ right to good administration. The
government should ensure more efficient implementation of their recommendations. The Law
on access to public documents was adopted in May 2019, thus ensuring citizens’ right to
access public information. The judiciary needs to increase its efficiency in handling
administrative dispute cases in order to support citizens’ right to administrative justice. The
Basic Court in Pristina still struggles with a large backlog of administrative cases as well as
many incoming minor offence cases. The backlog in administrative cases dropped from 1,511
cases in 2018 to 950 cases in 2019, but had by the end of June 2020 climbed back up to 1,415,
likely due to the courts only dealing with urgent cases during the COVID-19 pandemic.
Likewise, the Basic Court in Pristina received 301 minor offence cases while by the end of
June 2020 the number was at 1,705. . The liability of public authorities in cases of
wrongdoing and the right to seek compensation are affected by fragmented legislation. The
Law on general administrative procedures is not correctly enforced by the justice system. No
data is collected to monitor implementation.
Service delivery to citizens and businesses
Although the government promotes a user-oriented administration, there are weaknesses in
the leadership, policy direction and coordination of the overall reform process. Many
institutions continue to implement their own solutions alongside the central electronic
identification (eID) tools that are being developed. Ways to collect citizens’ and businesses’
feedback on the quality of service delivery still needs to be systematically developed. An
interoperability platform exists and is now functional but the quality of registered data needs
to improve for the platform to be useful. While legislation on equal access to services is in
place, it is not systematically applied.
Kosovo continued to make limited progress on the simplification of administrative
procedures. An inventory of laws with special administrative procedures now exists, but only
limited progress was made on aligning the sector laws with the Law on general administrative
procedures. Considerable efforts are needed both from the administrative justice sector and
the public administration to uphold the obligations and rights under the Law on general
administrative procedures.
2.2

Rule of law and fundamental rights

2.2.1 Judiciary and fundamental rights
Kosovo is at an early stage in/has some level of preparation for applying the EU acquis and
the European standards in this area. Some progress has been made, including in the
investigation and prosecution of some high-level corruption and organised crime cases and
with the partial implementation of some rule of law-related legislation concerning judiciary,
corruption and organised crime. Problems with the capacity of judiciary and prosecution
persist. As regards fundamental rights, strategies and policies need to be streamlined and
proper oversight provided. The government needs to take fundamental rights more seriously
and include it higher on the political agenda. Existing human rights mechanisms need to be
strengthened.

17

Functioning of the judiciary
Kosovo is at an early stage in developing a well-functioning judicial system. The
administration of justice remains slow and inefficient. Some progress was achieved in 2019.
As regards last year’s recommendations, the Law on disciplinary liability of judges and
prosecutors started being implemented efficiently. This work should continue. The roll-out of
an electronic case-management system and the establishment of a central criminal records
system have advanced well. The Kosovo Judicial Council and Kosovo Prosecutorial Council
have made efforts to implement the legislation relevant to their functioning, which entered
into force in early 2019. The ongoing Functional Review of the Rule of Law Sector has
provided a sound basis to reform and modernise various aspects of the judiciary. The
government should take this work forward. Work on the implementation of the Law on
Mediation has progressed, however some secondary legislation remains to be adopted. There
were cases of political interference in the judiciary. Rule of law institutions need sustained
efforts to build up their capacities. The COVID-19 pandemic limited the holding of court
hearings in Kosovo; yet the Kosovo Criminal Procedure Code provides that a trial has to restart after 3 months without any hearing. An important number of criminal trials criminal
trials (including high-profile ones) may be affected by this rule. Kosovo authorities should
follow-up on this issue and take the necessary measures to ensure effective and efficient
conduct of justice in Kosovo. Among the lessons learned from the crisis, it appears necessary
to have measures in place for the organisation and work of courts, including through IT
connections, as well as for communication of the judiciary with the wider public during states
of emergency.
In the coming year, Kosovo should in particular:
 continue to strengthen the capacity of judges, prosecutors and support staff, and improve
the court administration, in particular through the full roll-out of the National Centralised
Criminal Records System as well as the Case Management Information System
throughout Kosovo with the latter system able to perform random case allocation and to
provide reliable statistical data, in line with the European Commission for the Efficiency
of Justice (CEPEJ) methodology;
 finalise the work on the Functional Review of the Rule of Law Sector and put in place a
comprehensive sector strategy aiming at strengthening the independence, impartiality,
integrity, accountability as well as the overall capacity of judiciary and prosecution, with a
specific focus on fighting corruption and organised crime;
 step up efforts to reduce the backlog of cases, including by using alternative dispute
resolution tools and in particular mediation, the use of which should be properly financed
and promoted.
Strategic documents
The Kosovo Prosecutorial and Judicial Councils have adopted strategic plans and objectives
for judiciary and prosecution system. However, overall these documents only set the general
objectives and should be accompanied by detailed annual action plans for such objectives to
be actually met. Kosovo lacks a proper mechanism for inter-institutional coordination.
Kosovo institutions should have more effective mechanisms to ensure proper coordination of
the many rule of law programmes supported by various donors in order to avoid
inefficiencies, incoherence and duplication of efforts. Kosovo still has no comprehensive
strategy for the rule of law sector. The functional review of the rule of law sector, which is
expected to produce such a strategy, has stalled due to the parliamentary elections and change
in governments. The government should continue to support the drafting of a strategy in the
18

rule of law sector, including an action plan, prioritise the functional review and support
continuous work on its completion. Activity related to the Justice 2020 initiative was halted
when the Haradinaj government resigned in the summer of 2019.
Management bodies
The Kosovo Judicial and the Prosecutorial Council are the key bodies in charge of
ensuring the independence and impartiality of the judiciary and managing the judicial system
and careers of judges and prosecutors. Their composition and appointment procedures are
broadly in line with European standards.
The judiciary has elected its remaining members of the Kosovo Judicial Council. After some
delays, in August 2020, the Assembly also elected two members of the Judicial Council. One
position, a representative from the non-majority communities, remains open. Likewise, the
Assembly elected one member of the Kosovo Prosecutorial Council (representing the law
faculty). Two other members, out of 13, (representing the Bar Association and Civil Society)
have still not been appointed by the Assembly. The Assembly should ensure a full
constitution of both Councils, without delay.
Both Councils took steps to implement the 2018-2019 laws on the Judicial Council, the
Prosecutorial Council, courts and the disciplinary liability of judges and prosecutors. This
included adopting the necessary secondary legislation and setting up special departments
within the Basic Court of Pristina and Court of Appeals. The budget allocated to the Judicial
and Prosecutorial Councils was further increased in 2020, although the wage increase for
prosecutors and judges during 2019 put a strain on the budget leading to the unavailability of
a number of support positions. The Councils have made limited progress on making statistics
accessible to the public and other relevant interlocutors. More effort is needed, and the use of
these statistics by the Councils for policy analysis should be increased.
The formal process of integrating Kosovo Serb judges and prosecutors in the judicial system
was concluded in 2017. Continuous efforts are necessary to uphold provisions on composition
of panels for cases coming from Serb-majority municipalities, in particular in appeal, and to
ensure that judicial proceedings can be accessed in all official languages across Kosovo. The
number of qualified translators is insufficient, however, and poor translation of legislation
remains an issue. There is a problem of access to judgments and decisions, rendered by the
Serbian courts in Kosovo between 1999 and up until the integration of Serbian judges in
October 2017, and there is no procedure in place to implement the agreement providing for
the recognition of such judgements and decisions..
Independence and impartiality
The Constitution and legal framework provide clear safeguards for the independence and
impartiality of the judiciary. In order to ensure this in practice, more efforts are needed to
effectively shield the judicial system from undue pressure and interference. The Councils
should react more efficiently and actively in cases of alleged political interference in the
prosecution and the judiciary.
Under the existing legal framework, judges and prosecutors cannot be transferred without
their consent. The Regulation on Internal Organisation of Courts provides for random
allocation of cases, which is available through the case management information
system since mid-February 2020. However, in practice cases are not always randomly
assigned to either prosecutors or judges. A random assignment of all cases through the case
management information system is not yet possible as this system has yet to be fully
introduced in the justice system. High profile and sensitive cases are not always processed in
a timely manner.
19

Protective measures to ensure the safety of judges and prosecutors are the responsibility of the
two Councils. There were no new requests in 2019; one prosecutor was granted protection at
the beginning of 2020. Two other prosecutors are still under close protection granted earlier.
Accountability
Codes of ethics are in place for judges, prosecutors and attorneys. Continuous efforts are
needed to ensure effective implementation. The new Code of Ethics for prosecutors entered
into force in March 2019. As of July 2019, disciplinary procedures are conducted in
accordance with the 2018 Law on Disciplinary Liability of Judges and Prosecutors, which
provides for more robust and clear disciplinary mechanisms with set deadlines and a clear
division of powers and responsibilities. The Councils enacted the relevant secondary
legislation to implement this law in a timely manner.
Several disciplinary investigations against judges and prosecutors were conducted by the
respective panels. In the reporting period, the Judicial Council took immediate action to
suspend two judges who had been arrested on suspicion of having committed criminal
offences. One prosecutor was dismissed based on a proposal of the Prosecutorial Council.
Most of the other investigations resulted either in the decision that there was no violation of
the rules, or in the disciplinary measures of non-public written remarks and temporary
reductions of salary.
Although there has been some progress in the implementation of the legal framework on
disciplinary measures, efforts are still needed to ensure more consistent and effective
application of disciplinary proceedings against judges and prosecutors. This includes the
provision of reliable and accurate information on on-going and finalised disciplinary
proceedings carried out by both Councils.
Judges and prosecutors are obliged by law to declare their assets and gifts received, and to
report any possible conflict of interest to the Anti-Corruption Agency. In 2019, they all did
so in a timely manner.
Professionalism and competence
The Councils independently organise recruitment processes for judges and prosecutors on
the basis of merit-based criteria after which successful candidates are appointed by the
President for an initial three-year term. During the reporting period, 12 Basic Prosecution
Offices prosecutors were appointed. However, 27 vacancies for judges remain unfilled. The
Councils need to ensure that the evaluation and background checks of judges and prosecutors
have a clear legal basis and do not interfere in the private lives of judges and prosecutors.
The Councils are required to carry out performance evaluations of prosecutors and judges
with a permanent mandate every three years. In 2019, the Prosecutorial Council evaluated 90
prosecutors and the Judicial Council evaluated 74 judges. The results of the evaluation (95%
of prosecutors and 99% of judges with permanent mandates were rated ‘good’ or ‘very good’,
and none were rated ‘insufficient’) are in stark contrast to the public perception of
prosecutors’ and judges’ professionalism. The quality of performance evaluations conducted
by both Councils remains an issue, and there is no realistic, effective and systematic
evaluation based on clear criteria. The level of professionalism and competence, especially
of prosecutors, remains a matter of concern: some are inadequately trained and some are
unwilling to apply the training received and to take full responsibility for their cases.
Quality of justice
The Academy of Justice is responsible for delivering initial in-service training for judges and
prosecutors and the legal and administrative staff of courts, prosecution offices and both
20

Councils. It also provides training for the free legal professions. Further in-service training is
needed, including on values and professional skills. In particular in specialised areas such as
economic crime including money laundering, confiscation and public procurement,
mediation, the new provisions of the revised Criminal Code (including on domestic violence
and sexual harassment), and European Court of Human Rights case law, more work is needed.
Judicial education needs to play a more prominent role in the performance evaluation process.
Oversight and reporting lines of the Academy of Justice should be strengthened in line with
European best practices.
On jurisprudence, despite the adoption of sentencing guidelines by the Supreme Court, there
are still cases of lenient sentencing (in particular in the area of high-level corruption and
organised crime), with a prevalence of fines and suspended sentences. The 2018 Law on
Courts aims to increase transparency by making it obligatory for all courts to publish their
judgments on an accessible and searchable web portal within 60 days. Some progress has
been made but publications have not always been consistent or timely due to a lack of
resources. The prosecution offices publish relevant information on indictments on the website
of the State Prosecutor within 24 hours. The Academy of Justice maintains a database of
legislation, commentaries and other legal material accessible to all judges and prosecutors.
Following the appointment of 37 judges in January 2019 and 12 prosecutors in May 2019,
Kosovo now has 416 judges (137 women and 279 men) and 181 prosecutors (78 women and
103 men), which means around 23 judges and 10 prosecutors per 100,000 inhabitants.
According to the Council of Europe’s European Commission for the Efficiency of Justice
(CEPEJ), the European average is 21 judges and 11 prosecutors per 100,000 inhabitants.
Kosovo still has a low percentage of female judges and prosecutors in comparison with most
other European countries.
The initially approved budget for the judiciary (including prosecution, courts, the Academy
of Justice and the Correctional and Probation Service) was EUR 59.2 million in 2019 and
EUR 59.5 million in 2020 (up from EUR 48.9 million in 2018), or respectively 2.53% and
2.49% of the general budget (2.35% in 2018).
For e-justice tools, the implementation of the case management information system (CMIS)
is ongoing. The CMIS enables both judiciary and prosecution systems to process all cases
electronically, which will end manual registrations. Data for all parties in proceedings must be
correctly verified. Efforts are underway to connect the police information system to CMIS
(see section on the fight against organised crime). Continued commitment is needed to ensure
that the systems are used systematically and that the data entered is accurate, in particular so
that it is possible to automatically obtain reliable statistical data on the performance of the
judiciary and prosecution (in line with the recommendations and methodology of the CEPEJ).
Work on a central criminal records registry has shown very good progress with almost 100%
of cases and convicted people entered into the system. Verification of the real identities of
convicted people is ongoing. However, more commitment from the courts is needed to ensure
the system’s sustainability and full involvement of court staff. There is a tracking mechanism
for high-level corruption and organised crime cases; it currently includes 61 cases.
The mediation system has been operational since 2008. The new Law on Mediation, which
entered into force in September 2018, was followed up in April/May 2019 with both Councils
adopting the Regulation on Mediation for their respective organisations. Mediation clerks
were assigned in all basic courts and prosecution offices. In 2019, the courts referred 2,846
cases to mediation and prosecution offices referred 2,244 cases, a significant increase
compared with 2018. The 189 licensed mediators (67 women, 122 men), of whom 14 were
from the Serb-majority municipalities, solved 3,859 cases. Public awareness and familiarity
21

with alternative dispute resolution tools remains low. Several awareness-raising campaigns
and training activities were carried out in 2019. The mediation system needs further
strengthening, and this can be achieved through full implementation of the recently adopted
Law and allocation of a sufficient budget. Positive first steps on online mediation were started
in early 2020.
Efficiency
The efficiency of criminal justice is seriously hampered by shortcomings in criminal
legislation. The outstanding revision of the Criminal Procedure Code, which would address
many of the existing issues, remains to be adopted by the Assembly. The capacity of judges to
manage court proceedings efficiently needs to be significantly improved to avoid
unreasonably protracted proceedings and ultimately low-quality decisions. Judges do not
make full use of the tools available to them, such as the possibility to impose punitive and
disciplinary measures on parties absent at hearings. Frequent transfers of cases between
administrative bodies and basic and appeal courts further lengthen court cases and place
additional administrative burden on court officials. Scheduling conflicts, leading to the
absence of a judge or a prosecutor, means to a further amount of hearings fail. The
organisation of judges in fixed panels within the special departments should be avoided.
Overall, all this leads to long disposition times (i.e. the average time from filing an
indictment to receiving a judgment). Furthermore, these delays in proceedings, in
combination with a preference for detention over other restrictive measures, have led to cases
of overly long detention. In the reporting period, the Ombudsperson again received a high
number of complaints concerning delays in judicial proceedings. Authorities need to consider
introducing an effective judicial legal remedy to address such delays, including compensation.
There is a need to improve strategic planning, which also requires efforts to introduce reliable
statistical systems for the judiciary based on CEPEJ indicators, and to use the findings for the
management and policy-making purposes. Although the number of professional associates in
all Kosovo courts has increased in 2019, the number of legal staff directly assisting judges
and prosecutors is still insufficient. A number of vacancies remain open and not all positions
needed were budgeted in the 2020 budget.
The reform of the enforcement system, with which Kosovo passed in 2014 from court
enforcement to a combined system of private enforcement agents and courts, has been
generally successful. The introduction of private enforcement agents has shortened procedures
and raised the overall level of debt collection. The court run enforcement system still faces a
considerable backlog, however. Enforcement agents must be given easy access to public
registers pertaining to their work. Institutions are often not aware of the possibility to send
cases to the private enforcement agents, despite attempts at raising awareness.
Due to the COVID-19 pandemic, courts and prosecution offices have functioned with
significantly reduced capacities since mid-March 2020. However, on-duty staff still duly
process urgent actions (in line with applicable legislation). In order to address the risk of an
increased backlog of cases and cases reaching their statutory limitations, both the Kosovo
Judicial Council and the Kosovo Prosecutorial Council have developed emergency plans,
which also include measures to return to work and some virtual court hearings in individual
cases. The COVID-19 pandemic limited the holding of court hearings in Kosovo; yet the
Kosovo Criminal Procedure Code provides that a trial has to re-start after 3 months without
any hearing. An important number of criminal trials (including high-profile ones) may be
affected by this rule. Kosovo authorities should follow-up on this issue and take the necessary
measures to ensure effective and efficient conduct of justice in Kosovo. Among the lessons
learned from the crisis, it appears necessary to have measures in place for the organisation and
22

work of courts, including through IT connections, as well as for communication of the
judiciary with the wider public during states of emergency.
Domestic handling of war crime cases
The Kosovo Prosecutorial Council adopted the strategy on war crimes in February 2019, but
its implementation is severely hampered by political issues, a lack of resources and the lack of
international and regional cooperation. In the reporting period, the Kosovo Police arrested
seven people suspected of war crimes and several investigations were opened. Following two
acquittals in the beginning of 2019, in June 2019 the Basic Court of Prizren delivered the first
conviction for a war crime since the end of EULEX’s executive judicial mandate in June
2018. Significant concerns remain about the willingness to investigate, prosecute, judge and
effectively enforce convictions in war crime cases involving former Kosovo Liberation Army
members.
The Kosovo police introduced some reforms in this area, including the installation of a new
electronic war crimes database and a reconfiguration of the War Crimes Investigation Unit.
This constitutes significant progress in the field of case management, case building and case
analysis.
The Special Prosecution Office of Kosovo filed its first war crimes indictment only in May
2019. Its war crimes department continues to face significant challenges, after its workload
substantially increased with the various cases handed over by EULEX. The department
operates with only three prosecutors, which is not sufficient. There is a need for more training
and more support staff.
Mutual legal cooperation between Kosovo and Serbia in war crimes cases is extremely
limited. Cooperation with the United Nations International Residual Mechanism for Criminal
Tribunals in The Hague, which possesses a lot of evidence and prosecutorial know-how,
remains difficult due to status-related issues.
The Kosovo Specialist Chambers and Specialist Prosecutor's Office (SPO), set up to
investigate and prosecute allegations stemming from the 2011 Council of Europe Report,
which alleges serious violations of international law, stepped up their work with interviews of
dozens of potential witnesses and suspects. In February and April 2020, the SPO formally
notified the Specialist Chambers of his intent to initiate proceedings, subject to confirmation
of a pre-trial judge. On 24 June 2020, the SPO made public that the latter request concerns a
ten-count indictment, including against Kosovo President Hashim Thaçi and the leader of the
opposition party PDK, Kadri Veseli. In September, the SPO conducted several arrests. Full
cooperation with the Specialist Prosecutor’s Office and Specialist Chambers remains
essential. It is crucial that the Specialist Chambers and the Specialist Prosecutor’s Office are
able to continue to do their work independently, without any outside interference.
A working arrangement establishing cooperation between the Kosovo Specialist Chambers
and Specialist Prosecutor’s Office and Europol entered into force on 4 July 2020.
As from February 2018, victims can apply to the Government Commission on Recognition
and Verification of the Status of Survivors of Sexual Violence during the Conflict for
recognition and verification to receive individual benefits. By August 2020, 1,283 individuals
had submitted applications, of which 846 were accepted and 262 were rejected. The
timeframe of the law excludes those who suffered conflict-related sexual violence after 20
June 1999. Often, in addition to problems regarding access to justice, survivors of sexual
violence also face societal stigma. The legislation does not address this aspect.

23

Kosovo needs to develop an overarching strategy for transitional justice, including a
comprehensive approach to addressing its past. The preparatory team in charge of drafting a
normative act, which will serve as the basis for a future Truth and Reconciliation
Commission, met on a weekly basis throughout 2019. A round of consultations with civil
society, religious groups, legal professionals, former political prisoners, artists, organisations
advocating for missing persons, veterans and women victims of sexual violence during the
war was concluded in May 2019. The preparatory team should make sure that the future
Commission is a gender sensitive and inclusive body in which all Kosovo communities are
adequately represented. This Commission should enjoy cross-party support, in accordance
with EU and international standards. Other reconciliation initiatives are taking place as well.
In May 2019, the Kosovo Coalition for Reconciliation, led by three Kosovo civil society
organisations, started its activities. At the regional level, Kosovo maintained its participation
in the Coalition for the Commission tasked with establishing the Facts about All Victims of
War Crimes and Other Serious Human Rights Violations committed in the territory of the
Former Yugoslavia (RECOM).
Fight against corruption
Kosovo is at an early stage/has some level of preparation in the fight against corruption. In
the reporting period, limited progress was made, including on the investigation and
prosecution of high level cases, on the confiscation of assets as well as through the creation of
the Special Departments handling cases regarding high-level corruption (and organised crime)
in the courts. Additional special prosecutors have been recruited, but the overall capacity of
the prosecution, including as regards supporting staff, remains low. The revised Criminal
Procedure Code is still not adopted, while the revision of political party financing legislation
was delayed. Overall results achieved by prosecution and courts remain poor and final
confiscations of assets remain low.
Kosovo has partly followed some recommendations of the 2019 report (capacity of the special
prosecution office, partial implementation of legislation). Most of the recommendations
remain valid. Robust implementation of the previously revised legislation remains crucial.
Overall, corruption is widespread and remains an issue of serious concern. Despite efforts
made, there is a need for strong and continual political will to effectively address corruption
issues, as well as a robust criminal justice response to high-level corruption.
In the coming year, Kosovo should in particular:
 strengthen the efficiency of confiscation regime by promoting systematic use of both
extended and ‘regular’ confiscation by prosecution and police, by the creation of a
confiscation fund and by improving the sales process of sequestrated and confiscated
assets managed by Agency for the Management and Sequestrated and Confiscated Assets
(AMSCA);
 adopt the revised Criminal Procedure Code, including provisions on the suspension of
public officials indicted for corruption-related offences;
 ensure that the financial reports and campaign disclosure reports of political parties are
consistently published and audited, and sanctions applied for violations of relevant laws.
Amend the legal framework governing political party and campaign financing in line with
the opinion of the Venice Commission, to ensure effective enforcement, accountability
and transparency.
Track record

24

In July 2018, the European Commission confirmed that Kosovo had met the benchmark in its
visa liberalisation roadmap to strengthen the track record in the fight against organised crime
and corruption. These efforts should continue and the Commission will continue to actively
monitor the further development of this specific track record. The track record mechanism for
visa liberalisation, established in 2015 to monitor and coordinate high-level corruption and
organised crime cases includes 66 cases by July 2020. There have been 56 indictments so
far, of which 36 cases concern corruption and 20 cases concern organised crime. 13 cases had
a final verdict, out of which 8 ended with a (partially) guilty verdict, leading to 15 individuals
being convicted of corruption-related offences.
This track record was designed in the specific context of visa liberalisation benchmarks
Eventually, there should be one, comprehensive track record which covers all high-level cases
relating to organised crime and corruption. As such, the rules governing inclusion of cases
within this mechanism (standard operating procedures) should be revised to allow all cases
against high-level officials to be prioritised and be handled with the highest level of scrutiny
within a single comprehensive and overall track record.
Since it was set up, the Anti-Corruption Agency has sent more than 1,000 cases to the
prosecution, including more than 100 referrals in 2019. Of the 126 cases pending in 2019 (55
pending from previous periods, 71 new referrals in 2019), the prosecution has filed
indictments in 42 cases. There were 11 court decisions in 2019. Many of the reports submitted
by the Agency still suffer from poor quality. The prosecution should demonstrate more
willingness to pursue cases related to corruption.
In 2019, 419 new cases of criminal offences against official duty involving 896 individuals
were reported. There were 6 new cases related to corruption in public procurement and 502
new cases related to economic crimes.
Asset confiscation continues to be seen as only an auxiliary aspect of criminal proceedings
with insufficient focus and resources put into it. Although in general the institutional and legal
framework is in place and has been significantly improved with the entry into force of the
new Law on Extended Powers of confiscation in January 2019, this has not yet delivered
results. The concept of asset confiscation is poorly understood amongst prosecutors and
judges, including a restrictive interpretation of legal principles. The willingness to confiscate
assets is low. The prosecution remains the weakest link in this regard. It should improve its
technical shortcomings.
The total amount of confiscated assets remains low. Preliminary confiscation of assets fell
to EUR 8.7 million in 2019 (compared with EUR 28 million in 2018). The value of final
confiscation rose substantially (EUR 991,593) compared to 2018 (EUR 49,394), albeit in the
context of only one case. Furthermore, the Agency for the Management of Sequestrated and
Confiscated Assets (handling more than EUR 1.3 million in various assets in 2019) struggles
to manage the assets in its portfolio, partially due to the courts not allowing asset sales (it has
only managed to sell assets totalling EUR 74,166). Work on the creation of a Confiscation
Fund, which would allocate confiscated funds in part to law enforcement, prosecution and
courts and in part to social projects, has not progressed and should be taken up by the
government.
In 2019, almost 99% of the 4,819 officials obliged to submit annual declarations of assets
did so on time (only 60, less than 1.25%, failed to do so). The Anti-Corruption Agency has
974 officials under the full assets control procedure and more than 62 cases under
investigation for false declarations. In the reporting period, prosecution offices received a
number of cases on irregularities detected in asset declarations concerning 60 persons; the
cases of 60 people were solved during this same period. The system for declaring and
25

assessing the origin of property belonging to senior public officials remains incomplete. The
Agency still lacks tools and resources to verify asset declarations. The long-proposed
amendments to the relevant legislation, together with amendments to the Law on the AntiCorruption Agency remain to be adopted. Furthermore, these checks require closer
cooperation and the exchange of data with the police, the tax administration, the Financial
Intelligence Unit, the land registry and municipal authorities. An e-declaration system would
simplify filing and monitoring, increase transparency and decrease instances of human error.
In 2019, the Agency handled more than 167 cases of conflict of interest, of which 2 were
addressed using the minor offence procedure and 3 were sent for further criminal
investigation. In 26 cases, a conflict of interest was avoided.
Funding for political parties and campaign financing lacks transparency and the regulatory
framework remains inadequate. Overall, the regulatory framework does not ensure complete
reporting, timely disclosure, meaningful oversight or accountability for irregularities. Political
entities are required to submit campaign finance reports to the Central Election Commission
only within 45 days after election day, which does not facilitate transparency or oversight.
Furthermore, auditors are required to verify the content of financial reports submitted but not
to identify unreported income or expenditure, which limits the scope of oversight. Past
auditing reports identified inaccuracies in political party financial reports, but no sanctions
were imposed. Existing sanctions (mostly fines ranging from EUR 1,000 to EUR 5,000) are
not dissuasive or effective.
Institutional framework
There are 19 different anti-corruption institutions in Kosovo. Coordination between them
remains weak and therefore responsibilities frequently overlap. Strengthening interinstitutional coordination, including securing access to relevant databases, is key to effectively
fighting corruption in Kosovo.
Prevention measures
The Anti-Corruption Agency is responsible for preparing, monitoring and supervising the
adoption and implementation of the anti-corruption strategy and action plan. Its
responsibilities include: (i) supervising and verifying the asset declarations of state officials,
(ii) supervising and preventing conflict of interest cases and the acceptance of gifts, (iii)
deciding on restrictions on the performance of other activities, (iv) providing advice on the
implementation of the related laws and on anti-corruption issues, and (v) assisting public and
private sector institutions in developing codes of ethics. The Auditor-General, the tax
authorities, the customs authorities and the Financial Intelligence Unit also have inspecting
and auditing powers.
Training must be provided for staff of the main anti-corruption bodies, especially training on
risk assessment. The Academy of Justice has integrated the anti-corruption programme into its
training curriculum, including a specialised capacity building training programme on
combating corruption, sequestration and confiscation, public procurement and financial
investigation and money laundering. The existing trainings on asset confiscation need to be
better attended. Overall, more training is needed, especially on asset confiscation.
There is a continuous need to promote integrity in the public service as a tool for preventing
corruption and ensuring discipline. The Anti-Corruption Agency did not continue further
work on integrity plans for municipalities.
Law enforcement

26

Kosovo has specialised institutions for fighting corruption: the National Coordinator for
Combating Economic Crimes within the prosecutorial system and the Police Directorate for
the Investigation of Economic Crimes and Corruption, which maintains anti-corruption units
at police stations and headquarters.
The organisational restructuring of the Kosovo Police in February 2019 also brought changes
to the structure and staffing of the Economic Crime Directorate. The Anti-Corruption Task
Force operates as a specialised unit within the Kosovo Police Investigation Department and
aims to prevent, investigate and detect criminal offences against the economy and finances, as
well as any corruption. The police has been involved in some investigations of corruption
within the institutions of the Kosovo government and as a result, some high-profile cases have
been presented to the prosecution. Separately, a complex investigation using covert measures
has led to the indictment of two serving judges in two different regions. During the reporting
period, the number of financial investigators working on organised crime and corruption
investigations has increased. Financial investigations need to be carried out systematically,
independently and in parallel with the criminal procedure for corruption and organised crime
cases.
The quality of investigations and indictments still often remains insufficient. Despite some
progress, the Special Prosecution Office continues to suffer from a lack of sufficiently
specialised staff with the required level of training and competence to deal specifically with
financial and procurement cases. The Office still needs to be connected to the case
management information system; this is planned for 2020. It is still not fully staffed with 15
prosecutors out of a planned number of 18. The position of Chief Special Prosecutor, who
leads the Office, was vacant for nine months before a new Chief was appointed in December
2019. The Office has four prosecutors working in a new specialised section handling highlevel corruption cases. The Basic Prosecution Office in Pristina has a Special Unit for
Financial and Corruption cases, to which 10 prosecutors (3 from the General Department and
7 from the Serious and Organised Crime Department) are assigned. Each basic prosecution
office has a designated anti-corruption prosecutor.
Following their establishment by the new Law on Courts, special departments in the Basic
Court of Pristina and the Court of Appeals handle all cases of the Special Prosecution
Office, including corruption cases.
Legal framework
Criminal law provisions on corruption are generally in line with relevant European standards.
Due to status-related issues, Kosovo is not a party to international anti-corruption
conventions. This includes most notably the United Nations Convention against Corruption
and the Council of Europe’s Criminal Law Convention on Corruption. However, Kosovo has
made substantial efforts to align its legislation with these instruments.
The new Criminal Code, which entered into force in April 2019, harmonised several
provisions with European best practices and introduced the mandatory removal from office of
public officials convicted of corruption. Substantial amendments to the Criminal Procedure
Code, such as provisions on the suspension of public officials indicted for corruption, have an
important potential for the anti-corruption field, but they still remain to be adopted by the new
legislature. The new Law on Extended Powers of Confiscation entered into force in January
2019 and gives Kosovo prosecutors more effective tools, which should now should be used.
Although the Law on the Prevention of Money Laundering clearly stipulates that the
predicate offence does not have to be proven to retain a conviction on money laundering, this

27

principle still remains unclear to both judges and prosecutors. As a result, many stand-alone
money laundering cases are dismissed by the Special Prosecution Office.
The Law on the Prevention of Conflicts of Interest, revised in 2018, should be fully
implemented by the authorities. 659 senior public officials still occupy two or more posts,
with several officials holding as much as five posts simultaneously, in direct violation of the
law. Kosovo has no specific legislation on lobbying.
The Law on the Protection of Whistle-Blowers is broadly in line with international
standards, including the new EU legislation in this area. Officers tasked with handling
whistle-blowers’ complaints were appointed in over 175 public institutions, but the secondary
legislation detailing the procedure for such handling is yet to be adopted. Strengthened
whistle-blowing mechanisms and protection requirements still need to be implemented in
practice.
In 2019, the Assembly failed to adopt amendments to the legal framework on political
parties and election campaign finances prepared by the government after consultation of the
Venice Commission. Kosovo continues to need better functioning, more accountable, more
transparent and enforceable party finance and campaign finance legislation. The government
and Assembly should take this forward on the basis of the existing draft law.
Strategic framework
The anti-corruption strategy and action plan for 2018-2022, adopted by the government in
March 2018, were submitted to the Assembly only in October 2018 and have not yet been
approved. In parallel, the government started reviewing its strategic framework on anticorruption in the context of the functional review (see section on the functioning of the
judiciary). The government still needs to demonstrate genuine leadership, the ability to
practise advance planning and a willingness to allocate adequate resources to the fight against
corruption. A monitoring mechanism should be set up to regularly assess the impact of a new
strategy and action plan.
Fundamental rights
The legal framework guarantees the protection of fundamental rights and is in line with
European standards. The adoption of the new Law on Child Protection fulfilled one of the
recommendations of last year’s report. More needs to be done to promote and ensure full
implementation of human rights legislation and policies. The government’s coordination of
human rights and minority protection mechanisms, both at the central and local levels, needs
to improve and fundamental rights issues need to feature higher on the political agenda.
Human and financial resources are lacking and relevant authorities are still dependant on
donor support and guidance and need to assume greater ownership. Inter-ministerial
coordination mechanisms are often treated as a formality and have proven to be ineffective in
advancing human rights.
More efforts need to be undertaken to address recommendations of the 2019 report, which are
still applicable. In the coming year, Kosovo should in particular:
 re-assess and strengthen the efficiency and effectiveness of the mechanisms for the
coordination and implementation of human rights policies and strategies. Strengthen the
role of the anti-discrimination officers in ministries and municipalities;
 strengthen the implementation of the Law on Gender Equality and take concrete actions to
ensure the functioning of the shelters for victims of gender-based violence;
 adopt the Strategy for Return and Communities and ensure proper implementation of the
28

Strategy for the Inclusion of Roma and Ashkali1 communities in Kosovo society 20172021;
 adopt the Law on Cultural Heritage and the Law on Religious Freedom and ensure
consistent functioning of the Implementation and Monitoring Council. Advance protection
of cultural heritage by fully enforcing legislation on special protective zones and illegal
construction.
International human rights instruments form an integral part of Kosovo's legal framework
and are directly applicable, as provided for in the Constitution of Kosovo. Kosovo continued
to align its legislation with these instruments and maintained its practice of ad hoc reporting.
During the COVID-19 pandemic, public health measures involving restrictions of certain
fundamental rights were taken on the basis of the Law on prevention of infectious diseases.
Some of the measures were adapted after the Constitutional Court ruled that they were partly
unconstitutional. The Assembly eventually adopted in August 2020 a new law on preventing
and combating the COVID-19 pandemic, which provides a solid legal basis for public health
related restrictions of fundamental rights. As regards the economic and social consequences of
the COVID-19 pandemic, it is expected that women will be affected more severely, because a
larger part of them is employed in the informal economy and has in consequence no access to
the mitigating measures taken by the government. The Kosovo government actively protected
women victims of domestic violence during the outbreak of COVID-19, including with an
institutional campaign informing them of their rights, exemptions to restrictions of movement
and ensuring shelter for new cases. While special plans related to the pandemic were in place
for prisons, a number of infections among prisoners and correctional staff were reported
during August 2020.
On the protection and promotion of human rights, the implementation of human rights
legislation and oversight and coordination of existing human rights mechanisms remains a
challenge. Authorities are drafting an overarching human rights strategy for 2020-2024, a
process that has been delayed for a few years now. Any such strategy needs clear objectives,
timelines and clarity on the responsible institutions. Ministry Secretaries-General should be
empowered to advance fundamental rights policies at the central level and should improve
coordination with municipalities. The Office of Good Governance in the Prime Minister's
Office lacks proper human, financial and administrative resources to fulfil its broad mandate,
which includes drafting, implementing and overseeing policies in the areas of human rights,
good governance and anti-discrimination. It needs to play a more active part in strengthening
the role of anti-discrimination officers in municipalities and ministries; they need to have
clear reporting lines and be actively consulted and engaged in legal and policy drafting.
The Inter-Ministerial Coordination Group for Human Rights rarely meets and neither takes
decisions nor properly follows up on previous government commitments.
The Ombudsperson continues to play an important role in the promotion and protection of
human rights in central and local level institutions in Kosovo. It has further increased its
capacity to review cases and continued its efforts to increase awareness on human rights
protection and promotion. Implementation of the Ombudsperson’s recommendations by the
Kosovo institutions remains a challenge. The overall number of complaints received by the
Ombudsperson in 2019 was 2,014. Out of those, 943 have been opened for investigation, and
54 cases were opened ex officio. Law enforcement bodies and the judiciary need to become
more responsive in protecting society’s vulnerable groups, such as children, victims of
1

All these groups are considered under the wider ’Roma‘ umbrella term under the EU framework for National
Roma Integration Strategies.

29

gender-based violence, Roma, Ashkali, as well as other vulnerable communities. The
Assembly of Kosovo needs to take a more proactive role in the oversight of the
implementation of human rights legislation.
While the mandate of the previous Ombudsperson ended in July 2020, the selection process of
the new Ombudsperson was finalised end of September with the Assembly’s election of Naim
Celaj. New initiatives to address the needs of social services, which are key in various areas
related to fundamental rights, have been launched (see sections on social policy and public
administration reform).
On the prevention of torture and ill treatment, the situation remains satisfactory and the
Kosovo authorities have shown a sustained commitment to preventing these practices in all
circumstances. However, there have been some complaints to the Ombudsperson about the
incorrect treatment of prisoners by correctional staff in 2019 (15 individual complaints and
two cases openend ex officio). After investigation, 4 such cases were forwarded to the Police
Inspectorate for further action. Representatives of the National Preventive Mechanism (NPM)
regularly visit all places of deprivation of liberty in Kosovo. In 2019, the NPM carried out 86
regular and ad hoc visits to places of deprivation of liberty, including psychiatric and social
care institutions. In all cases, it received full cooperation, was granted rapid access to all
visited facilities, and was allowed to access all relevant documents. Its representatives were
able to speak privately with detainees, inmates and those placed in psychiatric and social care
homes. Kosovo should further strengthen ongoing efforts to provide adequate medical and
psychological support and rehabilitation to all victims of torture and other ill-treatment in
Kosovo. Efforts to address the recommendations issued by the European Committee for the
Prevention of Torture and Inhuman or Degrading Treatment or Punishment in 2015 are
ongoing (see section on the prison system).
The prison system continues to comply broadly with the UN Standard Minimum Rules for
the Treatment of Prisoners and with the European Prison Rules. There is no specific strategic
framework in place for the prison system. Prison conditions vary widely among the different
establishments of the Kosovo Correctional Service (KCS). More prisoners are now
accommodated in adequate facilities, although plans to close old facilities have not yet
materialised. Overcrowding is generally not a problem. While meaningful activities such as
rehabilitation programmes remain limited, the KCS has focused more on engaging prisoners
in work vocational training programmes and education. The Prison Inspectorate continues
working with a methodology based on the ‘Mandela rules’. Political pressure continued to
affect decisions on the categorisation of prisoners, which would allow for preferential
treatment of high profile prisoners. The planned amendments to the Law on the Execution of
Penal Sanctions should not compromise progress achieved by previous amendments
preventing such preferential treatment. Alternative sanctions and measures are possible and
are imposed mainly on juveniles. Many judges and prosecutors remain reluctant to impose
alternative measures to detention on adults.
On personal data protection, the law remains broadly in line with the EU General Data
Protection Regulation and the Law Enforcement Directive. It envisages compliance
inspections, which should be carried out. Finalising the process of appointing a commissioner
to lead the new Information and Privacy Agency – to be selected by the Assembly based on
merit and competences – is a crucial first step towards making the Agency operational. In
addition, the adoption of new, duly updated, implementing legislation that is aligned with the
EU acquis is necessary. Both of these steps are crucial in order to effectively implement the
legislation governing personal data protection and access to documents.

30

As regards the freedom of thought, conscience and religion, although there are legal
provisions in place, the Kosovo Assembly still needs to adopt the long outstanding Law on
Religious Freedom, incorporating the recommendations of the Venice Commission. The May
2016 final judgment by the Constitutional Court on the land dispute case involving the Visoki
Dečani monastery and Deçan/Dečane municipality, which confirmed the monastery’s legal
ownership of the land, remains unimplemented. Incidents of cemetery desecration across
different regions in Kosovo, targeting Orthodox, Muslim and Catholic graveyards, were
frequent in 2019. Such acts of vandalism show that more efforts are required from the Kosovo
Police, prosecution and judiciary to ensure the protection of religious sites.
----------------------------------------------------------------------------------------------------------------Freedom of expression
Kosovo has some level of preparation regarding freedom of expression. Kosovo benefits
from a lively and pluralistic media environment. The legal framework is mostly in line with
European standards. However, limited progress has been made in addressing the
recommendations of the previous report. Concerns remain regarding public smear campaigns
and threats against journalists. There are particular concerns regarding freedom of expression
in the north of Kosovo, including self-censorship.
Legal initiatives of the Assembly of Kosovo Committee on Public Administration, Local
Governance and Media (draft laws on the public broadcaster and on the Independent Media
Commission) lacked transparency. The public broadcaster remains vulnerable to political
pressure and influence. The lack of financial self-sustainability leaves media vulnerable
towards political and business interests. This is further amplified by the lack of information
and data on the final beneficiary of media ownership – provisions on this are still not
enshrined into law.
In the coming year, Kosovo should:
 further improve the response of the responsible institutions to physical attacks against
journalists, and other forms of pressure, including through better inter-institutional
cooperation;
 ensure sustainable funding for the public broadcaster in a manner which preserves its
independence;
 review the Law on the Independent Media Commission to update its competences,
including regarding audio-visual media in line with Audio-visual Media Services
Directive;
 increase availability of data on the audio-visual market, especially when it comes to media
ownership.
Intimidation of journalists
According to the Association of Journalists in Kosovo, there were 13 cases of verbal attacks
and three physical attacks against journalists in 2019 (similar level as 2018). In at least two
instances, high-level politicians were involved. While the overall number of threats and
attacks remained stable, according to the Kosovo Association of Journalists, there has been an
increase in derogatory statements and smears made by politicians and aimed at the media,
publicly undermining trust in journalistic reporting and the safety of journalists. Adjudication
of cases remains slow.

31

Legislative environment
The Constitution and legislation provide for freedom of expression and media freedom. In
general, media laws are in line with standards of the Council of Europe and the case law of
the European Court on Human Rights. Defamation and insults are a civil offence. The Law on
Protection of Journalistic Sources needs to be amended to clarify provisions related to court
decisions obliging journalists to declare a source, to be brought in line with European
standards and best practices.
The new whistle-blower legislation strengthens the protection of journalists’ sources, but the
Ministry of Justice is yet to draft the implementing legislation. The Law on Access to Public
Documents has been adopted, but implementation remains on hold until the Information and
Privacy Agency starts its work (see section on data protection).
The Assembly Committee on Public Administration, Local Governance and Media – the sole
body with the right of legislative initiative on issues related to freedom of expression and the
media – continued to operate in a non-transparent and non-inclusive manner, including as
regards the draft laws on the public broadcaster and the Independent Media Commission.
Building administrative capacity within the government to deal with freedom of expression
and media-related issues should be considered.
Implementation of legislation/institutions
The implementation of existing legislation remains insufficient. The Kosovo Press Council
acts as a self-regulatory body for print and online media, mainly by reacting to complaints.
The number of members is increasing and the Council’s financial sustainability is crucial. The
Independent Media Commission (IMC) does not have the power to licence and monitor
audio-visual media services online, although these were already covered by the Audio-Visual
Media Services Directive. The 2016 Code of Ethics for Media Service Providers, a legally
binding secondary legislation issued by the IMC, sets provisions for broadcasting in relation
to content, such as the need for balanced and unbiased news coverage. However, the IMC
only monitors content during election campaigns.
As regards the coverage of the October 2019 legislative elections, the EU Election
Observation Mission concluded that, in general, media were able to freely cover the elections,
but raised a number of issues such as the lack of effective oversight by the IMC during the
election campaign (see section on elections).
Public Service Broadcaster
The public broadcaster Radio Television of Kosovo (RTK) remains vulnerable to political
pressure and influence. In 2019, on two separate occasions, whistle-blowers publicly
denounced political influence on the public broadcaster. RTK’s shortcomings should be
addressed including non-merit-based recruitment, non-transparent remunerations, insufficient
sustainability of programmes in non-majority languages and poor online presence. To date,
the broadcaster remains directly state-funded, with its budget determined annually by the
Assembly. This undermines its independence, weakens its long-term sustainability and leaves
it prone to political influence.
A review of the current Law on RTK was launched in 2019. Steps should be taken to ensure
that appointment and dismissal procedures of members of the respective governing bodies are
transparent and inclusive and that the new law includes a realistic and sustainable funding
model for RTK. In 2019, legislative initiatives made by the Assembly to regulate online
media, including authorisation requirements for online news sites, were halted after a public
backlash.
32

Economic factors
The sector remains heavily dependent on donors and advertising, including from the
government and political parties. Media companies struggle to sustain themselves financially
through commercial means. Private broadcasters depend on other sources of funding and few
are able to operate without strong links to political and business interest groups. There is a
lack of data on the advertising market and financing remains largely non-transparent. There is
also no audience measurement system.
Information on media ownership structures, in particular for online media, remains unclear
and often fictitious, as most media do not provide information on their finances or real
ownership. Consequently, there is neither transparency nor a fair distribution of the sources of
financing among the media outlets and no way of knowing whether they are concentrated in
the hands of just a few people.
The negative impact of the COVID-19 crisis on the financial stability of media sector remains
one of the main concerns (including potential job losses), even if media professionals were
included in the initial financial package of the government intended to ease the economic
impact of the pandemic.
Professional organisations and working conditions
Associations of journalists have been active in condemning cases of threats and attacks
against journalists. They have kept up a constructive dialogue with the Kosovo Police and
have been vocal in defending journalists against political pressures. The working conditions
of media professionals and the implementation of labour laws in the newsroom remain a
concern. Many journalists work either with no contracts or only with service contracts. This
situation encourages self-censorship and makes journalists vulnerable to pressure.
(See also section 6.24 on information society and media)
----------------------------------------------------------------------------------------------------------------Freedom of assembly and association is guaranteed by the Constitution and generally
respected. A number of demonstrations took place during the reporting period. The Police
Inspectorate of Kosovo is investigating one case of police officers, in charge of providing
security for a high-level politician, allegedly using violence against a non-violent protester.
Individuals and legal entities have the right to establish an association without having to
register it, but most organisations decide to register in order to secure legal personality.
Issues of labour and trade union rights are further covered in section 6.11 on social policy
and employment.
On property rights, although the legislative and institutional framework governing the
resolution of conflict-related property claims is overall adequate, the reporting period marked
no real progress in implementing the 2017 strategy on property rights. The resolution of
conflict-related claims continues to be hampered by political obstacles. A revised law on the
Kosovo Property Comparison and Verification Agency (KPCVA) was prepared, but it was
not adopted by the Assembly. Provisions to ensure that property rights are fully realised, such
as the extension of the deadline for the voluntary rental scheme which expired in Spring 2018
(as recommended by the Ombudsperson), and the extension of the Agency's authority to
include execution of more than two evictions in order to stop continuous illegal re-occupation
of properties, need to be included. Judicial decisions, including Constitutional Court
decisions, on conflict-related property cases must be fully observed and swiftly implemented.
The Administrative Instruction on Demolition of Illegal Structures has been adopted in April
33

2020. This is a positive step in improving the implementation of decisions for demolitions as
legal remedy. After several years of stalemate, the KPCVA’s Property Claims Commission,
the first instance adjudication body to resolve the 2,782 conflict-related claims that are
pending, has been re-activated and completed its work as of May 2020, addressing all pending
cases. For 70 cases, the decision of the second instance Appeal Panel of the Supreme Court is
still pending. This Commission has started distributing allocated funds for the compensation
scheme; all 143 owners of former socially owned residential property have been
compensated.
Concerns about fraudulent property transactions and illegal transfers of ownership of
properties mainly belonging to displaced persons remain. Increased access to and publication
of key property data from the Kosovo Cadastral Agency could increase the public’s trust in
land and property transactions and improve land management. There has been limited
progress on the issue of 350,000 buildings constructed without a permit, through adoption of
necessary secondary legislation in July 2019 following the 2018 amendments to the Law on
the Treatment of Buildings Constructed without a Permit. Their legalisation process is
ongoing. As regards large-scale informal settlements, there is a continued lack of political will
to address the issue. In addition, women continue to face many challenges as regards property
ownership and inheritance despite the fact that, through a special measure, they can register
their real estate free of charge.
On non-discrimination, the Law on Protection from Discrimination is broadly in line with
European and international standards, but its implementation remains limited. Although it
sets out a general framework for preventing and combating discrimination, both rule of law
institutions and victims have difficulties in identifying situations in which its provisions can
be applied. A lack of data and case law prevents the police, prosecution and courts from
effectively preventing and responding to most forms of discrimination. 119 out of 2,014
complaints made to the Ombudsperson in 2019 related to discrimination. During the reporting
period, the Ombudsperson became a member of the European Network for Equality Bodies
(EQUINET). The establishment of an efficient data recording and a collection system on hate
crime, would enable their recognition and registration. The Kosovo Prosecutorial Council
continues to maintain a tracking mechanism on hate crimes. Hate speech against vulnerable
communities persists, especially on social media, and the police fails to respond to it on time.
Legislation and institutional mechanisms for equality between women and men are in line
with international and EU standards. Despite institutional efforts, women continue to face
discrimination in the labour market, access to finance, ownership of property and access to
justice. Women are underrepresented, especially in decision-making positions, both in private
and public institutions. Civil society organisations continue to play a critical role in
advocating for women’s rights and advancing gender equality. The Agency for Gender
Equality (AGE) plays a central role in advancing the principles of gender equality, and in
mainstreaming gender in institutions' policies and actions. The Kosovo programme for gender
equality (2020-2024) was adopted by the government in May 2020. AGE continues to train
civil servants on gender impact analysis, which is increasingly being used during the drafting
of legislation and policies. However, coordination with gender equality officers in the
ministries and municipalities needs to be strengthened. More coordination and stronger
leadership from the government as well as efforts across the institutions are needed to make
progress on implementing the Law on Gender Equality. Institutions need to improve their
collection, maintenance and transparent reporting of gender-disaggregated data.
Domestic violence continues to be the most prominent form of gender-based violence in
Kosovo. The legal and institutional framework in this area is largely in line with EU and
international standards. The amendments to the criminal legislation, which see domestic
34

violence as a stand-alone offense, entered into force in April 2019. However, the lack of case
law and lack of familiarity of judges and prosecutors with the new legislation resulted in its
slow application. Efficient prosecution and adjudication of cases (including appropriate
sentencing) remain limited. The Law on Domestic Violence needs to be aligned with the new
criminal code. In September 2020, the Assembly adopted an amendment to the Kosovo
Constitution that gives direct effect to the Council of Europe Convention on preventing and
combating violence against women and domestic violence (Istanbul Convention). This is a
positive step to guarantee fundamental rights, protect women’s rights and in the fight against
domestic violence.. The 2016-2020 strategy and action plan on protection against domestic
violence continue to be implemented. An integrated database for cases of domestic violence
has been created and is accessible to police, victim advocates, prosecutor, courts and social
workers at centres for social services. The authorities need to ensure sustainable funding for
the database. Reporting of domestic violence remains low, but has substantially increased in
2019 to 1,915 cases (an increase by 382 cases). Reported cases of domestic violence increased
slightly during the first semester of 2020, due to both the consequences of the COVID-19
pandemic and greater awareness of the issue. There has been limited progress in preventing
domestic violence and protecting and reintegrating victims, including adequate victims’
compensation. Sufficient budget should be allocated for centres of social work and victims’
advocates. The functioning of the eight shelters for victims of domestic violence and
trafficking in human beings is uneven mainly due to the lack of sustainable funding. A new
shelter in Zubin Potok opened in summer 2020, covering the four northern municipalities and
completing the network of protection institutions.
On the rights of the child, Kosovo’s legal framework is largely in line with EU and
international standards, but implementation remains limited. In June 2019, a new Law on
Child Protection was adopted by the Assembly. The law entered into force one year following
its publication. The main innovation is the establishment of a new integrated system of child
protection, at both central and local levels. The law also includes a formal prohibition against
corporal punishment. Authorities now need to adopt sub-legal acts and organise an awareness
raising campaign on the Law. A strategy and action plan on children’s rights 2019-2023 is in
force.
Kosovo does not host children in large residential institutions, and developed alternative care
solutions for children deprived of parental care. However, foster care for such children is not
possible in all municipalities and often does not meet internationally recognised requirements.
The social integration of children with disabilities remains a problem and many of them have
very limited access to social, health and educational services. In addition, authorities have
been inefficient in providing adequate care for street children and have failed to properly
address the issue. In 2019, the first day-care institution for street children was inaugurated in
Pristina. Begging and child marriage among Roma and Ashkali children is still prominent.
There is also a lack of services and programmes for the prevention and reintegration of child
victims of drug abuse. Overall, a considerable number of children in Kosovo are victims of
physical or psychological violence and efforts to prevent all forms of violence against
children remain insufficient.
The institutional framework for juvenile justice has significantly improved in recent years.
However, authorities should further strengthen the capacity of Kosovo institutions to sustain
the progress achieved in this area, including the implementation of the revised legal
framework and developed curricula.
On the rights of persons with disabilities, the existing legislation is following the most
recent international standards. A comprehensive new law on persons with disabilities has not
yet been adopted. Overall, authorities are not effectively implementing existing legislation,
35

including, the Law on Paraplegic and Tetraplegic Persons. The administrative instruction on
rehabilitation and supporting equipment for persons with disabilities also needs to be drafted
and adopted. The implementation of the Law on Blind Persons and the Law on Employment
(of which a part regulates the employment of people with disabilities in the public
institutions) is equally limited. A strategy for people with disabilities is in place but a new
action plan for the 2020-2023 period remains to be adopted. The National Council for People
with Disabilities has failed to meet for the past two years. People with disabilities in Kosovo
experience exclusion due to limited support and inadequate health and social services
Physical access to public buildings and transport also remains limited. Children with
disabilities are especially vulnerable (see above). Authorities should increase financial support
to scale up community-based social and health services and increase efforts to effectively
integrate people with disabilities into the educational system.
On the rights of lesbian, gay, bisexual, transgender and intersex (LGBTI) persons, the
Constitution protects against discrimination based on sexual orientation. During the reporting
period, the Advisory and Coordination Group on the LGBTI community developed a new
action plan 2019-2022. However, there is little will to implement this plan and no progress
has been achieved so far. At the initiative of the President, a new LGBTI action committee
with the involvement of civil society was set-up in January 2020. There is a strong need for
Kosovo to ensure full implementation of the existing anti-discrimination legal framework and
the 2019-2022 action plan. In October 2019, the third Pride Parade took place in Kosovo
without any incidents, and included high-level political participants. Despite these positive
developments, public awareness and general acceptance of the rights of LGBTI persons
remains low. There have also been incidents of hate speech towards the LGBTI community,
especially on social media. The recent amendments to the Criminal Code offer LGBTI
persons better legal protection; but cases of hate crime against LGBTI persons are still not
always properly investigated and brought to justice. During 2019, for the first time, the
prosecution of Kosovo initiated a case ex officio against an official of the Ministry of Justice,
on the grounds of hate speech against LGBTI persons. In 2019, the Courts in Kosovo ruled on
two cases of legal gender recognition (in first instance). Following one such case, the Civil
Registration Agency was obliged to legally recognise a person’s gender based on selfdetermination.
On procedural rights, those who are accused and suspected of crime and the victims of
crime are protected with procedural safeguards stipulated in the law. They have the right to
interpretation and translation, the right to information on their rights, the right to legal aid, and
the right to communicate with family members, employers and consular authorities. The
injured parties, however, often lack the capacity to protect and pursue their legal interests in
criminal proceedings, tend to receive insufficient legal information on their rights and are
rarely assisted during criminal proceedings by professional legal representatives. The level of
legal aid provision in practice is not adequate due to conflicting legislation, lack of public
awareness and different systems in place for providing free legal aid. In addition, there is no
system of quality assurance in the provision of legal aid. Out of 2,014 complaints received by
the Ombudsperson in 2019, 409 concerned the right to a fair trial within a reasonable time.
The Law on Crime Victim Compensation is broadly aligned with the EU Directive on
Compensation for Crime Victims. However, authorities should ensure that victims of crime
are duly informed about their rights and available protection, including the right to
compensation. Victims’ advocacy officers should increase the quality of services. A crime
victim compensation programme is operational since 2016. In 2019, the Commission
responsible for compensation received ten requests out of which six were approved and

36

compensated for the total amount of EUR 14,260. However, since August 2019 the
Commission has not been functional due to the expiry of the mandate of five commissioners.
Kosovo has well established mechanisms at the central and local level to protect minorities
and their rights. It also has an adequate legal framework and relevant strategies and action
plans. However, insufficient inter-institutional coordination, both at the central and local
levels, continues to undermine the effective delivery of services and implementation of the
applicable legislation. Implementation of minority related policy could advance if
coordination between the Office for Community Affairs (OCA) and the Advisory Office for
Good Governance (both work under the Prime Minister's Office) was more efficient. These
offices remain mainly project driven and donor dependent. Significant efforts are still required
to create the conditions for a truly multi-ethnic society, a lasting peaceful coexistence and
integration of all communities Kosovo-wide. These include creating a secure environment,
especially in areas where returnees live, that ensures access to property, personal
documentation, language rights, and adequate provisions for education, employment and
social welfare.
The Technical Working Group for the implementation of the recommendations based on the
Council of Europe’s Framework Convention on National Minorities (FCNM) set up by the
government met only once in 2019. The implementation of these recommendations remains
limited. The Consultative Council for Communities met regularly during the reporting period
and issued recommendations addressing specific community-related issues to relevant
institutions. However, from the 50 recommendations sent, only 8 have received a
response. There is still no government representative appointed to the Council. The Office of
Language Commissioner under the Prime Minister’s Office continues to work efficiently with
the aim of overseeing and overcoming the challenges posed by the limited implementation of
the Law on the Use of Languages, including efforts to improve translation and interpretation
into all official languages.
Kosovo is characterised by a growing trend towards monolingualism in one of the official
languages and the lack of platforms in which members from different communities can
interact is a matter of concern. Young people in particular are not exposed to each other’s
language or those of other local communities. Such a trend can only be countered in the
longer term via the education system. In non-majority communities, education at preuniversity levels continues to face challenges mainly due to the lack of textbooks in languages
of respective communities. Concerns remains over the provision of higher education in the
languages of minority communities, too. Employment of people from non-majority
communities in the public sector remains below the 10% threshold stipulated by relevant
legislation. Members of non-majority communities remain underrepresented in the civil
service at both the central and municipal levels.
While the overall security situation of minority communities remains stable and security
incidents are limited, such potentially ethnically motivated incidents proportionally affected
the Kosovo Roma and Ashkali community more compared to the previous reporting period.
There are also recurring incidents of property and livestock theft, which frequently affect
Kosovo Serbs, as well as other minority communities. Increased follow-up of such incidents
by judicial institutions is still needed. Further recruitment of police officers from non-majority
communities, as well as the strengthening of community policing is needed in order to
contribute to a strengthened perception of security among affected communities.
Security is a main prerequisite for the return and reintegration of refugees and displaced
persons. This number continues to diminish with a total of 191 people who have returned to
Kosovo in 2019. The decrease is partly due to the challenges refugees and displaced persons
37

face in fully exercising their rights and lack of conditions for sustainable return (see also the
sections on property rights and rights and protection of minorities). The Ministry for
Communities and Return needs to develop and adopt a new strategy for communities and
return covering the 2019-2023 period. The Inter-Ministerial Commission for Return and
Community Affairs, which should facilitate return and inter-community relations, did not
convene in 2019.
The situation of the Kosovo Roma and Ashkali communities has remained unchanged. The
implementation of the 2017-2021 strategy for the inclusion of the Roma and Ashkali
communities in Kosovo society has still not been systematically evaluated and its
implementation remains limited. Members of Kosovo Roma and Ashkali communities remain
among the most marginalised communities in Kosovo, hindered by poverty and
unemployment. Many of them have low levels of education and unemployment rates are high.
Additional efforts are needed to facilitate their labour market integration and combat informal
work. Members of these communities, in particular displaced persons and returnees, continue
to face dire living conditions. One of the main challenges in terms of housing for the Roma,
and Ashkali Internally Displaced Persons (IDPs) and returnees is the resistance of some
municipalities to allocate land and recognise tenancy or possession rights in informal
settlements to the families who lived there prior to the conflict. However, there are other
municipalities that have allocated land for housing purposes. In education, the number of
students from the Kosovo Roma and Ashkali communities in universities has been steadily
increasing over the past years. However, the pre-university learning centres, which remain
instrumental in supporting education for these communities, risk being closed down as a
result of the government’s failure to allocate the necessary funds for their continued
functioning. Roma and Ashkali communities face particular issues with access to health
insurance, too. There are still concerns about discrimination in health services. Some people
still face difficulties with civil documentation and personal identity documents, often linked to
return or repatriation. Kosovo needs to introduce measures and systemic solutions to address
the problem of unregistered births in these communities.
The government endorsed the Declaration of Western Balkans Partners on Roma Integration
within the EU Enlargement Process (Poznan Declaration), but only very limited follow-up
steps have been taken to implement it. The Roma Seminar conclusions are also yet to be
implemented.
On cultural rights, no developments were noted with regards to the draft Law on cultural
heritage during the reporting period. The Implementation and Monitoring Council remains the
only formal mechanism for dialogue between the Government and the Serbian Orthodox
Church (SOC), and has met regularly. In August 2020, the restart of the construction on the
Deçan/Dečani-Plav Special Protective Zone (SPZ) increased tensions between the SOC, the
municipality of Deçan/Dečani and the Kosovo Government. Construction works were halted
the same month, under direct order of the Kosovo Prime Minister, but tensions remain. There
were no further construction activities on the rehabilitation of the Lumbardhi riverbed. The
municipality of Prizren was proactive in removing several unpermitted structures within
Prizren’s historic centre, an SPZ. Some protected sites were demolished by individual
building owners, but the Prizren municipality and the Basic Court were efficient in
responding to such violations. The government should be more proactive in ensuring the
rights and protection of the SOC throughout Kosovo.
Interfaith relations between the SOC and the Roman Catholic Diocese became more strained,
after the Roman Catholic Diocese in Kosovo served a catholic mass on the ruins of the
controversial archaeological site within the Novo Brdo/Novobërdë’s SPZ, prompting a strong
reactions and condemnations from the SOC. The protection and promotion of cultural heritage
38

in Kosovo still remains weak and donor driven. Such projects require long-term financial
support in order to have a lasting impact.
2.2.2 Justice, freedom and security
Kosovo is at an early stage/has some level of preparation in this area. Some progress was
made, including on the fight against violent extremism through the management of a return
operation of foreign terrorist fighters and their families from the conflict zone. However, the
entry into force of several laws important to combatting organised crime has not yet led to
tangible results. Results achieved by prosecution and courts remain poor. Overall,
confiscation of assets remains low. The authorities continued to make progress in managing
regular and irregular migration, despite the unexpected increase in the number of irregular
migrants arriving to Kosovo.
Kosovo has only partly followed the recommendations of the 2019 report, namely the
recommendations related to violent extremism and on the National Centre for Border
Management, hence the other recommendations are repeated.
In July 2020, Europol and the Kosovo Police concluded a Working Arrangement. The
arrangement will constitute the basis for enhanced cooperation between Kosovo Police,
Europol and EU Member States.
In the coming year, Kosovo should in particular:
 adopt a protocol for the handling, storage and destruction of drug precursors and start to
effectively implement it;
 continue implementing programmes on rehabilitation and reintegration, inside and outside
the prison system by safeguarding coordination of pre-release and post-release processes,
and ensuring that the Reintegration Division of the Ministry of Internal Affairs, is fully
funded, staffed and trained;
 establish a Joint Threat Assessment Centre, including a threat level grading system on
terrorism related risks;
 fully implement the relevant action plan to make the National Centre for Border
Management fully operational, in order to strengthen inter-institutional and international
cooperation and coordination in the field of migration.
Fight against organised crime
Kosovo is at an early stage in the fight against organised crime. Limited progress was made
on the investigation and prosecution of organised crime cases. While the Criminal Code and
the Law on the extended powers of confiscation entered into force, this has yet to lead to
tangible results. Measures are needed to strengthen the prosecution as well as to ensure that
there is no political interference in the operational activities of all law enforcement bodies.
The situation in the north of Kosovo with regard to organised crime continues to pose
challenges for law enforcement agencies.
Kosovo has partly followed the recommendations of the 2019 report, namely on the training
and awareness raising regarding new legislation, including the one regarding confiscation,
capacity of the Special Prosecution Office, the intelligence-led policing, and partial
implementation of the laws adopted in 2018. Other recommendations however remain valid.
In addition to recommendations to strengthen confiscation of assets and to adopt the new
Criminal Procedure Code (see section on fight against corruption), in the coming year,
Kosovo should in particular:
39

 within the police, effectively implement the intelligence-led and community policing
approaches, including through the presence of officers at community level, enabling
confidence building and proactive policing;
 adopt standard operating procedures to run financial investigations in line with FATF
recommendations;
 further increase the capacity of the Special Prosecution Office investigating and
prosecuting high-profile organised crime cases, and provide training to strengthen their
capacity to conduct financial investigations, confiscate assets and effectively protect
witnesses.
Institutional set-up and legal alignment
Key institutions involved in the fight against organised crime include the Special
Prosecution Office and the newly established Special Department of the Basic Court and
the Court of Appeals in Pristina. The creation of the latter and staffing both with specialised
judges and prosecutors should ensure stronger centralisation and greater judicial specialisation
in response to serious crime.
The police has an organised crime directorate, complemented by specialised units at regional
level, and assisted by forensic units and the Kosovo Forensic Agency. The police’s
investigation department, with a total number of 567 personnel at central and regional level, is
responsible for the fight against organised crime. During the reporting period, the police has
undergone initial organisational restructuring, which has improved the operational
communication between the General Director and department directors. The restructuring has
increased the amount of officers at the regional and station level, which has resulted in more
capacity to prevent and fight crime at local level (e.g. a decrease in armed robberies). Kosovo
Police should continue with its reform programme under EU expert advice.
There were 471 police officers per 100,000 inhabitants in 2019, compared with 436 in 2018
and a 326 EU average in 2017 according to Eurostat. Police performance is affected by a
number of tasks that are not core police force tasks, such as providing security in low-risk
government buildings and infrastructure. Steps should be taken to correct this. The Kosovo
Academy for Public Safety provides a good level of initial and in-service training for police
and public security bodies.
Kosovo Customs, the Financial Intelligence Unit (FIU) and the tax administration are
responsible for monitoring and controlling the internal and cross-border/boundary flow of
goods, materials and capital that might be involved in any form of organised crime. The FIU
specifically assists with analysing and disseminating information on money laundering and
terrorism financing. It also has the capacity to freeze assets if it finds suspicious financial
transactions. Both Kosovo Customs and the FIU have generally performed well.
The police assigned two officers to the Asset Recovery Office within the Directorate for
Economic Crime Investigations. The Office has received limited requests so far and should be
better used by all relevant actors. Interoperable databases offer mutual access to police, tax
and customs services, which facilitates operational cooperation. The Kosovo Police
Information System (KPIS) is linked to all major databases (i.e. border management; civil
registry, vehicle registration, visa system, FIU). In one region, the KPIS is connected to the
Case Management Information System (CMIS), a pilot project which is yet to be rolled out
across Kosovo. The Kosovo Forensics Agency uses an upgraded biometric database since
February 2019.
The Civil Registry Agency is a key resource for personal data and identity management and
40

as such has an important role in supporting law enforcement and other public bodies with
citizens’ data. However, interconnections and accessibility between its central register and
rule of law institutions’ databases are not sufficiently regulated and are hindered by technical
challenges.
The main strategic framework is the 2018-2022 strategy and action plan against
organised crime. There are additional strategies and action plans in place on arms control;
the informal economy, money laundering and terrorist financing; terrorism; the prevention of
violent extremism; trafficking in human beings; narcotics; and cybersecurity. There is still a
need for better cooperation and coordination between all the institutions. The Special
Prosecution Office remains the weakest link in the fight against organised crime.
Due to status-related issues, Kosovo is not party to the major international instruments for
fighting against organised crime, such as the UN Palermo Convention against Transnational
Organised Crime and its Protocols, but it unilaterally applies these international principles in
its criminal legislation. Its legislation is largely compliant with international and European
standards.
The revised Criminal Code, which entered into force in April 2019 increases the number of
offences that can be prosecuted in the framework of organised crime, extends statutory
limitation periods for various serious crimes and provides for sufficiently dissuasive penalties
for corruption and organised crime offences. The revised Criminal Procedure Code, which
went partially through the Assembly procedure in 2019, remains to be adopted. The new Law
on Extended Powers of Confiscation is aligned with the EU acquis and has been in force
since January 2019 (see section on the fight against corruption).
Although work has started on addressing the flaws in the legal and institutional framework, no
changes to the Law on Money Laundering and Terrorism Financing have yet been
adopted to bring it fully in line with the EU acquis and international standards (see section 6.3
on the freedom of movement of capital).
Implementing legislation on the destruction of data adopted in January 2020 contributes to the
implementation of the Law on Interception of Electronic Communications. The process of
upgrading interception capacity in order to meet the evolving technological demands is under
way. Legislation on cybercrime is generally in line with the EU acquis. The new Law on
Cybersecurity, which incorporates relevant provisions from the existing Law on Preventing
and Fighting Cybercrime, has not yet been adopted. Legislation on trafficking in human
beings is broadly aligned with the relevant EU acquis, but implementation could be
improved, especially regarding the pro-active identification of victims, ensuring assistance
and support and increasing prosecution and conviction of perpetrators. Kosovo should adopt
its new 2020-2024 strategy and action plan against trafficking in human beings.
In April 2019, the police adopted the second-ever serious and organised crime threat
assessment (SOCTA) report for the 2016-2018 period. Annual strategic crime assessment
reports were also adopted. It is important that the threats identified are translated into
operational priorities backed up with adequate resources. Although the FIU has completed
work on the Kosovo-wide risk assessment on money laundering & terrorist financing (20142018), this has not yet been adopted by the government.
Implementation and enforcement capacity
Kosovo authorities for the first time reported on the total number of indictments and
convictions for the charge of ‘organised crime’ as defined in the United Nations
Convention on Transnational and Organised Crime. Two cases (involving six people)
41

received final convictions in 2019, while one case (involving five people) was sent for re-trial
by the Court of Appeals. Five cases, involving 60 people, received an indictment in 2019.
For the visa liberalisation-related track record in the fight against high level corruption and
organised crime, see the section on the fight against corruption.
As regards those organised crime-related cases currently not included in the aforementioned
track record, during the reporting period indictments were filed against 43 people, of which
five were found guilty of trafficking in human beings. In addition, ten persons were indicted
for and four found guilty of arms trafficking and nine were indicted for money laundering
(there were no final court decisions). Only a fraction of all cases involving trafficking in
human beings, trafficking in arms and money laundering also involve charges of organised
crime.
The police and the prosecution do not yet actively use all powers at their disposal to target
criminal networks and their economic support base, with cases seemingly involving one or
just a few individuals.
Sentencing policy in relation to organised crime remains erratic with courts not
systematically implementing the Supreme Court’s 2018 sentencing guidelines. The number of
unproductive court hearings remains an issue of concern, with judges often failing to use
the procedural tools at their disposal to secure the presence of parties and witnesses at the
trial. The low number of confiscated criminal assets is a key concern too. The number of
staff in the Special Prosecution Office remains insufficient (see section on the fight against
corruption). The institutions involved in the fight against organised crime need to set up and
use multi-disciplinary, joint investigation teams, where possible.
Police capacity for combating organised crime is adequate, but the police force remains
vulnerable to corruption and political pressure, which hinders the successful investigation of
organised crime. One way to increase the integrity of police officers and deter corruption
would be to widen the scope of asset declaration so that it includes not only senior
management positions, but also other lower, more exposed posts. Intelligence-led policing
remains weak across the organisation and related capacities need to be strengthened, including
the use of Tasking and Co-ordination Group processes. The strategic framework is under
review. There is a need for more specialised training sessions for all institutions involved in
fighting more complex organised crime. Closer day-to-day co-operation as well as a more
strategic approach to better plan investigations and divide of resources between the police and
the special prosecution is still needed.
Kosovo regularly exchanges information with Interpol via the United Nations Interim
Administration Mission in Kosovo (UNMIK). Kosovo’s application to join Interpol was
withdrawn from the General Assembly meeting in October 2019. A Working Arrangement
concerning strategic cooperation with Europol was concluded in July 2020. Kosovo should
now implement the working arrangement and make full use of the available possibilities for
cooperation. The Kosovo Police signed a protocol for establishing a joint task force with the
police from North Macedonia and cooperates with EU Member States on a bilateral basis,
including through joint investigation teams and exchange of information on civil and criminal
cases. The police has signed 93 international police cooperation agreements, including with
20 countries, a number of EU agencies and international organisations. During the reporting
period, the number of partners with which the Kosovo Police mutually exchanged liaison
officers increased from five to seven.
Effective implementation of witness protection mechanisms continues to face challenges, as
few potential witnesses have sufficient trust in Kosovo institutions’ ability to keep them safe.
42

A first witness has entered the Kosovo Witness Protection Programme in 2019 and three
persons were received for international temporary relocation. Kosovo police participates in
Europol’s Platform for Witness Protection Prosecutors and judges need training on how to
protect witnesses effectively.
The fight against money laundering and terrorist financing is not efficient enough to
produce convincing results. Money laundering is often not prosecuted as a standalone crime,
but in connection with other criminal offences, which slows down the overall criminal
procedure. There is a pressing need to foster prosecutors’ and judges’ better understanding of
the concept of money laundering and to improve specialisation in this field. During the
reporting period the FIU received a total of 1,017 suspicious transaction reports. There were
644 such reports in 2018, meaning reports have increased by 58%. In one notable case, FIU
intelligence analysis led directly to the conviction of two suspects and final confiscation of
nearly EUR 1 million. This is a positive first step which should be followed up on.
Overall, although the efficacy of financial investigations has improved at the police level, they
are still not systematically being conducted in parallel with criminal proceedings.
Inter-agency cooperation and coordination needs to improve significantly. An action plan has
been drafted to follow up on and implement the recommendations of recent expert reports
(based on the standards adopted by the Financial Action Task Force (FATF) and the
Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the
Financing of Terrorism (MONEYVAL) standards), but it still requires adoption (see also
section 6.3 on the freedom of movement of capital).
As regards arms trafficking, Kosovo is implementing its strategy in this area and the Law on
the Legalisation and Surrender of Weapons, Ammunition and Explosive Devices. A firearms
focal point in the police is fully operational and should serve as example of regional best
practice. A legalisation campaign for small arms and light weapons was carried out, with
1,573 legalisation requests approved. The Ministry of Internal Affairs has a database in which
it registers all arms imported into Kosovo. The involvement of organised and armed groups in
arms trafficking remains a serious concern.
Kosovo remains a country of origin, transit and destination of victims of trafficking in
human beings, notably for sexual exploitation. In 2019, 23 female victims and 3 male victim
were identified; 15 were under the age of 18. Cigarette and tobacco smuggling is present in
Kosovo but levels remain low. Kosovo cooperates with all relevant partners, including the
European Anti-Fraud Office (OLAF).
Progress was noted in the area of cybercrime, for the detection, traceability and prosecution of
cyber criminals. However, there are still issues to be addressed, such as the handling of
electronic evidence by people with insufficient knowledge and the limited availability of
cybercrime training for newly appointed judges and prosecutors.
A working arrangement with the EU Agency for Law Enforcement Training (CEPOL) has
been in force since 2017. Kosovo actively takes part in a number of activities. Where
possible, Kosovo should increase its involvement in the priorities of the EU policy cycle
(EMPACT) including the drafting of operational action plans and the participation in joint
action days.
Proactively fighting organised crime and corruption remains fundamental to countering
criminal infiltration of the political, legal and economic systems.
Cooperation in the field of drugs
Institutional set-up and legal alignment
43

Kosovo’s legal framework is broadly in line with European legislation, but enforcement
remains weak. The 2007 Law on Narcotic Drugs, Psychotropic Substances and Precursors
governs Kosovo’s policy on drugs. A comprehensive, revised draft law that is aligned with
more recent EU legislation, is ready for adoption. Drug-related offences are covered by the
Criminal Code. A coordination mechanism to prevent and fight drug trafficking and the abuse
of precursors is in place. In line with the 2018-2022 strategy and current action plan, a
National Drugs Observatory is operational, although with limited resources and a vacancy at
its head. Sustainable and routine collection of data on drugs should be ensured. Kosovo
should formally establish an early warning system including associated risk assessment
procedures and the subsequent control mechanism for adding new psychoactive substances to
its drug control legislation. Cooperation with the European Monitoring Centre for Drugs and
Drug Addiction (EMCDDA) continued, despite limited reports and the lack of a nominated
head of the designated focal point. Kosovo and the EMCDDA concluded working
arrangements in June 2020.
Implementation and enforcement capacity
Kosovo continues to be both a storage and a transit country, mainly for heroin and cannabis.
Overall, the volume drug seizures remain low: around 824,2 kg of marijuana, 7,7 kg of heroin
and 1,5 kg of cocaine were seized in 2019. Heroin seizures dropped significantly compared
with 2018, which is a concern.
Organised crime groups continue to play a dominant role in large-scale drug trafficking and
subsequent distribution in the EU. An increased regional effort and improved police
cooperation and coordination among all countries in the region is key to identifying and
dismantling the organised crime groups trafficking drugs. The prosecution service remains too
understaffed and insufficiently trained to efficiently deal with drug-related offences. In the
reporting period, 1,396 people were indicted for drug-related offences, investigations against
207 people were dismissed by the prosecution and 534 people were found guilty by the courts
(8 were acquitted). Secure storage has been set up for seized drugs awaiting destruction. A
protocol for the handling, storage and destruction of drug precursors remains necessary.
Educational and public awareness campaigns for the prevention of drug abuse are ongoing. A
24-hour drug abuse hotline, is available, and addiction treatment and methadone therapy is
being offered.
Fight against terrorism
Institutional set-up and legal alignment
A range of institutions are involved in combating terrorism, including the Office of the Prime
Minister, the Ministries of Internal Affairs, Justice and Foreign Affairs, the police, the Kosovo
Intelligence Agency, the Financial Intelligence Unit (FIU) and the prosecution service,
including the Special Prosecution Office. The post of Counterterrorism/countering Violent
Extremism (CT/CVE) Coordinator, appointed by the Haradinaj government, was abolished in
February 2020. In July 2020, the Government of Kosovo appointed Minister of Internal
Affairs as the National Coordinator for the Prevention of Violent Extremism and the Fight
against Terrorism. The newly appointed Coordinator should play a stronger role in interinstitutional coordination, with clarified structure and reporting lines.
Kosovo’s legal framework is mostly in line with the EU acquis and international instruments
on anti-terrorism, including criminalising the phenomenon of foreign terrorist fighters. The
Law on Combating Money Laundering and the Financing of Terrorism is still not fully in line
with EU and international standards, however (see sections on the fight against organised
crime and section 6.3 on the free movement of capital).
44

Kosovo has a strategy and action plan against terrorism (2018-2023) and a strategy and
action plan on the prevention of violent extremism and radicalisation leading to
terrorism (2015-2020). The strategy against terrorism is in line with the EU’s
counterterrorism strategy. A communication strategy to raise awareness and gain wider
support from stakeholders across society should be finalised and adopted.
In October 2019, the Kosovo authorities and the EU signed a bilateral Implementing
Arrangement for the joint action plan on counter-terrorism for the Western Balkans
covering 2019-2020. It identifies priority actions in the area of counter-terrorism cooperation
as well as prevention on countering violent extremism, and indicates EU support in this area.
Kosovo submitted its first implementation report on the Implementing Arrangement in May
2020.
Implementation and enforcement capacity
Kosovo continued to fight the threat of terrorism through measures to rehabilitate and
reintegrate returned foreign terrorist fighters, and their family members. From 2012 until
2016, an estimated 359 Kosovo citizens (257 men, 52 women and 50 children) left for conflict
zones in the Middle East, mostly as foreign terrorist fighters. 81 children were born in the
conflict zone. 242 Kosovo citizens have returned (124 men, 38 women, 80 children), 96 died,
and 102 remain in theatre (47 men, 9 women, 46 children). Out of the 242 returnees, 110 (4
men, 32 women and 74 children) were returned from the conflict zone as part of a controlled
government-organised operation led by the Inter-Institutional Committee for the Handling of
Violent Extremism. During the reporting period, the police initiated 16 new cases related to
terrorism, and arrested 43 suspects, including the 36 adults (32 female, 4 male) who were part
of the return operation in April 2019. Regarding the criminal offence of terrorism, prosecution
offices have received 16 new cases involving 25 people and therefore, in total, had 94 cases
involving 182 people ongoing in 2019. For 26 people an indictment was filed, while courts
found 9 people guilty and acquitted 3. Greater consistency of sentencing practices, for
offences related to terrorism and violent extremism, is needed. The establishment of special
departments within the Basic Court of Pristina, and within the Court of Appeals to handle
cases from the Special Prosecution Office, including terrorism cases, should make case
handling more effective.
Despite significant efforts, challenges in preventing and countering violent extremism and
radicalisation remain. Terrorist groups continue to find ideological support within Kosovo
and home-grown radicals continue to pose a risk, including by posting terrorist content on
social media and elsewhere online. In this context, it is of the utmost importance that the
existing strategies and action plans are continuously reviewed and revised based on current
risk assessments. The authorities should set up a Joint Threat Assessment Centre, including a
threat level grading system, in order to keep all agencies and the public better informed and to
improve operational responses, including as regards the protection of critical infrastructure.
Substantial progress was made on the rehabilitation and reintegration of foreign terrorist
fighters and their families returned from Syria/Iraq, but reintegrating families into society
is a long-term process and a challenge. To effectively address this challenge, the
Reintegration Division of the Ministry of Internal Affairs needs to be fully funded, staffed and
trained, including adequate financial resources and the detachment of specialised staff from
the health, education and social services. Civil society organisation need to be more involved,
too. Better coordination of pre-release and post-release processes for returned/repatriated
foreign terrorist fighters is needed to better align the efforts and programmes of the
Reintegration Division of the Ministry of Internal Affairs and the Kosovo Correctional
Service. The appointment, in March 2019, of a focal point for counter-terrorism and
45

countering violent extremism within the Kosovo Correctional Service to liaise with relevant
institutions and partners is a welcome step, but de-radicalisation and disengagement
programmes need to be intensified.
Kosovo is actively participating in the implementation of the Western Balkan Counter
Terrorism initiative (WBCTi).
Legal and irregular migration
Due the COVID-19 pandemic, close to 200 irregular migrants and refugees were stranded in
Kosovo when borders closed in March 2020. Preventive measures were introduced to protect
migrant population from the pandemic, including restriction of movement and quarantine for
incoming migrants. Kosovo has had to deal with more asylum seekers present in the Asylum
Centres and the situation was well managed (including living conditions, information sharing)
despite limited capacities, with EU-funded support through the United Nations High
Commissioner for Refugees (UNHCR), the International Organisation for Migration (IOM)
and other partners.
The EU, EU Member States and Kosovo cooperated closely on mutually repatriating their
citizens stranded due to COVID-19 related measures.
Institutional set-up and legal alignment
The Department of Citizenship, Asylum and Migration in the Ministry of Internal Affairs is in
charge of implementing migration policy. The Directorate for Migration and Foreigners in the
border police deals with irregular migrants. The legal framework is now largely in line with
the EU acquis. Several pieces of implementing legislation were adopted in the reporting
period.
Kosovo has signed readmission agreements with 24 countries, including 20 EU Member
States and members of the Schengen area. No new readmission agreements were signed in the
reporting period. There is no readmission agreement with the EU as a whole.
As the government has not yet adopted the strategy and action plan on migration for 20192023 it should revise the strategy to ensure that it reflects the main challenges Kosovo is
facing, in line with previous expert advice. The draft strategy was based on finalised
migration profiles, but did not build on the assessment and evaluation of the previous strategy.
The Government Authority on Migration is expected to take more proactive leadership role in
migration governance, coordination as well as in improving the monitoring mechanism for
implementing migration policies. The new statute for this body should further strengthen its
role and clarify its composition and function, but it has not yet been adopted.
Implementation and enforcement capacity
Kosovo is part of the Western Balkan migratory route. The number of migrants transiting
Kosovo has continued to rise since summer 2019 as in other parts of the region. A total of
2,027 migrants were intercepted entering Kosovo irregularly during 2019, an increase of
300% compared with 2018. The three main nationalities represented were Syrians, Iraqis and
Algerians. According to preliminary data, this trend has decreased somewhat in early 2020 –
possibly due to the COVID-19 pandemic. Providing proper care and security for the most
vulnerable groups of migrants remains a challenge.
A total of 13 people were detained in detention centre during the reporting period with an
average stay of 18 days. Although the return of third-country nationals continued to be
hindered by status-related issues in 2019, 472 people were returned (110 forced, 326 through
voluntary returns, 3 people through the assisted voluntary return scheme with the IOM and 33
46

deportations based on a court decision). In May 2019, Kosovo and IOM signed a
Memorandum of Understanding on Assisted Voluntary Return and Reintegration.
The border police lacks proper reception facilities to accommodate migrants at the borders,
before they are transferred to asylum or other centres. Due to a lack of biometric equipment,
registering migrants at the borders or police stations remains the main challenge.
Transnational smuggling networks that include Kosovo citizens facilitate secondary
movements of irregular migrants from entry points along the Western Balkan route. In 2019,
the police investigated 25 new cases of migrant smuggling in 6 police operations. In these
operations, 41 people were arrested, of which 30 Kosovo citizens. There were 15 criminal
reports filed to the prosecution. Unaccompanied minors from Kosovo itself (outside the
transitory migratory flows) are also a challenge. Authorities should step up efforts to fight
networks targeting this specific, vulnerable group.
Kosovo took a proactive and preventive approach to the rising number of migrants by revising
its contingency plan. Until summer 2019, Kosovo only had a reception facility for migrants
in Vranidoll/Vrani Do, with a capacity to host 70 people. Since then, based on the
contingency plan, this facility has been expanded to be able to offer an additional 200 places.
Work has begun to refurbish the Belvedere camp (capacity of up to 2,000 people).
Gaps in enforcement remain, in particular due to a lack of coordination between government
agencies. There have been considerable improvements in data management, analysis and
exchange, including the ability to produce periodical reports based on Eurostat templates.
However, regular data sharing on the total number of migrants transiting through Kosovo still
needs to be improved. The Asylum (Reception) Centre and Detention Centre for Foreigners
still lack sufficient specialised staff. Legal provisions are in place to uphold the fundamental
rights of irregular migrants and foreigners hosted in the centre. However, the centre is facing
structural issues, mainly relating to improper housing units, a lack of secure areas, a lack of
in-house medical facilities and a lack of adequate specialised supervisory staffing to ensure
basic rights and needs, especially psycho-social support. The border police needs further
capacity building in the area of protection-sensitive migration. Challenges remain as regards
communication between officials and irregular migrants and people in need of protection,
despite the possibility to share interpreters among countries of the region through the
Migration, Asylum and Refugee Regional Initiative. Qualified interpreters are needed to
service both the asylum and detention centres and the border police.
The readmission agreements with EU Member States and Schengen associated countries are
being implemented satisfactorily. The number of asylum requests made by Kosovo citizens in
both EU and Schengen associated countries has fallen steadily, from the peak of 73,240 in
2015 to 4,745 in 2018 and 3,520 in 2019. Mirroring the trend in asylum requests, the overall
number of Kosovo citizens readmitted has dropped from 18,789 in 2015 to 2,395 in 2018 to
1,536 in 2019 (1,162 forced and 374 voluntary). The return rate of Kosovo citizens ordered to
leave EU territory in 2018 was 58% and in 2019 it was 41%. While statistics show a drop in
the return rate, EU Member States have confirmed that Kosovo authorities continue to
cooperate well on readmission.
A sustainable reintegration process is in place in Kosovo, but remains complex, involving
many actors. Overall, there is a need for better inter-institutional coordination, including with
municipalities, as well as improved systemic monitoring and evaluation. The implementation
of Kosovo’s 2018-2022 reintegration strategy and action plan is ongoing and an updated twoyear action plan will be drafted in 2020. Following the de-centralisation of the reintegration
process, municipalities continue to face challenges in providing services with insufficient
budget allocations. During 2019, 5,237 people benefitted from sustainable reintegration
47

services provided by the Reintegration Fund. Further efforts are still needed to put in place a
gender-sensitive system that reaches the most vulnerable returnees (including Roma and
Ashkali) and focuses more on sustainable community assistance, including through services
such as training related to income generation. Many returnees still do not receive sufficient
information. The lack of a screening and referral tool for returnees makes it harder to identify
vulnerable people, including victims of trafficking.
Asylum
Institutional set-up and legal alignment
The institutions for handling asylum requests are in place, although they need to be further
strengthened to address capacity gaps, especially given the trend of increasing asylum
requests in 2019.
The legal framework on asylum is largely in line with the EU acquis. Key implementing
legislation was adopted in 2019, including the Regulation on Integration of Foreigners
(including asylum seekers, refugees, people under subsidiary and/or temporary protection and
stateless persons).
Implementation and enforcement capacity
In 2019, Kosovo recorded the largest number of asylum applications since 2010. It received
2081 applications, of which 44% from Syrians and 27% from Iraqis. This was a 300%
increase two years in a row, from 595 in 2018 and 147 in 2017. All applicants are duly
provided unhindered access to the asylum procedure. However, Kosovo is still mainly a
transit country. Most asylum requests are suspended, as applicants disappear without
completing the procedure. Nonetheless, some progress was noted in granting refugee status
to asylum-seekers, resulting in a total of 41 decisions by the end of 2019 (33 positive, 8
rejections).
The establishment of a fully effective and protection-sensitive migration management
system is still a work in progress. The assessment of claims based on merit, using an
analytical approach, needs further strengthening. The lack of biometric equipment affects the
efficiency of initial registration and further processing. Challenges persist in providing
information, interpretation services and legal aid as required by law. There is an agreement
with UNHCR to provide translation services. The integration system is at an early stage of
development, and requires the full attention and financial support of the relevant central and
local authorities. Authorities issue biometric ID cards and travel documents for refugees,
although with delays. As an example of good practice, detention of asylum seekers does not
occur in Kosovo, and in general detainees who do seek asylum are given the opportunity to be
transferred from the detention centre to the asylum centre.
The increasing numbers of asylum seekers challenged the reception capacities of the Asylum
Centre and capacity was increased with an additional 200 places (see section on legal and
irregular migration).
The European Asylum Support Office (EASO) cooperates with Kosovo through its regional
training activities.
Visa policy
Kosovo has yet to fully align its legislation with EU visa policy. It currently imposes visa
requirements on nationals of 88 countries, based on a 2013 government decision. The
visa-issuing authorities have the capacity to digitally collect biometric identifiers from visa
applicants, although the equipment needs upgrading. All granted visas and rejections are
48

registered in Kosovo’s visa information system. 16 Kosovo consulates issue visas. Challenges
with technical equipment were reported. During the reporting period, 20 visas with a validity
of 15 calendar days were issued at Kosovo’s borders/ boundaries.
The citizens of Kosovo remain the only ones in the Western Balkans that need a visa to travel
to the Schengen area. A visa liberalisation dialogue started in 2012. In July 2018, the
Commission confirmed that Kosovo had fulfilled all the benchmarks of the visa liberalisation
roadmap and recommended that the Council and European Parliament move forward with the
proposal for visa liberalisation. The Commission continues to stand behind its assessment of
July 2018. The European Parliament, in both the previous and current legislature, has voted in
favour of the Commission’s proposal, but the latter is still pending in the Council.
Schengen and borders
Institutional set-up and legal alignment
The National Centre for Border Management (NCBM) is one of the most important
elements of Kosovo’s capacity to effectively manage the security of its border/boundary. It
includes a Joint Intelligence Risk Analysis and Threat Assessment Unit, which collects,
analyses and disseminates information from and to the border authorities responsible for IBM:
police, customs, and the Food and Veterinary Agency. A major step forward in ensuring the
centre’s interconnectivity was taken with its connection to 16 databases. The centre is
designed to serve as a contact point for the real-time exchange of information and cooperation
between all border authorities and relevant institutions. However, to reach its full potential,
the NCBM action plan approved in February 2019 needs to be fully implemented.
The legislative framework for managing Kosovo’s borders/boundary is largely in line with
the EU acquis and international standards. A new 2019-2023 IBM strategy has been prepared
and is awaiting final government approval.
Implementation and enforcement capacity
The Border Department of the police is well staffed, with a total of 1,268 officers and
generally meets minimum EU standards for border controls. Notwithstanding the need for
further progress, there has been a notable improvement in the performance of border police
working at the border crossing points and also their knowledge of border procedures. There is
however a need for better strategic assessment and analyses of border-related risks, including
security, and for better cooperation with other border authorities. The Kosovo Police
Information System is linked to all border crossing points. The infrastructure at
border/boundary crossing points has improved and the Border Management System continues
to operate satisfactorily. However, its effectiveness still remains limited by the lack of
connection to important international networks such as Interpol’s I-24/7, due to status-related
issues.
Kosovo’s working arrangement with the European Border and Coast Guard Agency
(FRONTEX) enables close cooperation on irregular migration, cross-border crimes, border
security and overall border management, including the daily exchange of data. Kosovo
participates in the Western Balkan risk analysis network and in a number of other regional
exercises organised by FRONTEX. Inter-agency cooperation is good, but it could be further
improved as regards information exchange and joint risk analysis, even if Kosovo participates
in the Western Balkans Risk Analysis Network, led by FRONTEX.
A border police anti-corruption strategy is in place. During the reporting period, the Kosovo
Police Inspectorate arrested a total of 26 border police officers. In a major operation in the

49

north of Kosovo targeting organised smuggling across the border/boundary with Serbia, 22
border police officers were arrested.
As concerns cooperation in the region, Kosovo has concluded 23 IBM agreements. At the
end of 2018, Kosovo and Albania signed a cooperation agreement on simplified border
crossing procedures and joint border controls.
In January 2020, a new EU-funded joint border crossing point between Kosovo and North
Macedonia at Stancic-Bellanoc was opened, and will operate joint border controls. Two
common cross-border police cooperation centres with Albania and North Macedonia, as well
as a trilateral centre involving officers from Albania, Kosovo and Montenegro, remain in
operation. However, these centres are still not operating to their full potential and further
development is required, particularly with regard on the ‘real time’ exchange of information
and inter-connection between centres.
Interim IBM common crossing-points with Serbia continue to be operational. There has been
no progress in establishing the six permanent IBM common crossing points between Serbia
and Kosovo, as foreseen in the IBM agreement in the context of the EU-facilitated BelgradePristina dialogue (see section 5 on the normalisation of relations between Kosovo and
Serbia). Additional measures need to be taken to combat illegal crossings and related criminal
activities (including corruption), particularly along the border/boundary with Serbia.
Judicial cooperation in civil and criminal matters
While Kosovo is not party to most multilateral treaties governing mutual judicial cooperation,
it unilaterally applies internationally recognised treaty standards. Kosovo’s international legal
cooperation in criminal matters is based on the relevant 2013 law as well as on 28 bilateral
treaties. Four additional treaties entered into force in the reporting period: one with Czechia,
two with France and an extradition treaty with the USA. Co-operation with countries with
which Kosovo does not have bilateral agreements is based on the principle of reciprocity.
The legal framework for judicial cooperation in civil matters is still not consolidated, as the
law is still in the drafting phase. Work on a revision of the Law on Legal Cooperation in
Criminal Matters is ongoing, and this will clarify the text on a number of points.
In the reporting period, Kosovo issued 282 requests on civil matters and 175 requests on
criminal matters to EU Member States and received 369 and 372 responses respectively. It
received 412 requests on civil matters and 607 requests on criminal matters from EU Member
States and provided 222 and 149 responses respectively. The 2015 Procedures on Mutual
Legal Cooperation agreed between Belgrade and Pristina form the basis for judicial
cooperation between their judicial authorities. Most other countries that do not recognise
Kosovo have voluntarily accepted the facilitating role of the EU Special Representative in
Kosovo in the transmission of judicial requests (including those concerning extradition).
However, a lack of cooperation by some non-recognising states has in practice resulted in
cases of impunity. Due to status-related issues, Eurojust cases can currently only be opened
towards EULEX and UNMIK. No cases have been opened towards these entities since 2015.
All aspects of customs cooperation are now covered in section 6.5 on Customs.
Counterfeiting of the euro (criminal law aspects)
Kosovo is broadly in line with the EU acquis on the suppression of counterfeit currency, and
has set up competent authorities and procedures for dealing with counterfeit money. However,
the Criminal Code is only partially aligned with the EU Directive on the Protection of the
Euro and Other Currencies against Counterfeiting, and further alignment is necessary
including on altering money and import and export. Technical analysis of counterfeit money
50

(including euro banknotes and coins) in line with international standards is mainly carried out
by the Forensics Agency within the Ministry of Internal Affairs. The Agency has concluded
an agreement with the European Commission on further cooperation on exchange, assistance
and training for the protection of the euro against counterfeiting (the Pericles 2020
programme) (see section 6.25 on financial control).
3.

Fundamentals first: economic development and competitiveness

Table :

2011-16
average

2017

2018

2019

GDP per capita (% of EU-28 in PPS)
Real GDP growth

23.1
3.3

24.6
4.2

24.9
3.8

25.6
4.2

Economic activity rate of the population aged 15-64 (%), total
female
male

39.11)
1)
19.4
1)
58.5

42.8
20.0
65.3

40.9
18.4
63.3

40.5
21.1
59.7

Unemployment rate (%), total
female
male

31.3
37.8 1)
29.2 1)

1)

30.5
36.6
28.7

29.6
33.4
28.5

25.7
34.4
22.6

Employment (annual growth %)

2.72)

7.6

-3.4

5.2

Nominal wages (annual growth %)

2)

4.8

1.7

5.7

7.9

Consumer price index (annual growth %)
Exchange rate against EUR
Current account balance (% of GDP)
Net foreign direct investment, FDI (% of GDP)

2.0
1.0
-7.5
4.4

1.5
1.0
-5.4
3.3

1.1
1.0
-7.6
3.4

2.7
1.0
-5.8
2.9

General government balance (% of GDP)
General government debt (% of GDP)

-2.2
10.1

-1.3
16.6

-2.8
16.9

-2.9
17.5

Kosovo - Key economic figures

Notes :
1) average of 2012-2016
2) average of 2013-2016
Source: Kosovo statistics, World Bank and IMF

In line with the conclusions of the European Council in Copenhagen in June 1993, EU
accession requires the existence of a functioning market economy and the capacity to cope
with competitive pressure and market forces within the Union.
Economic governance has become even more central in the enlargement process in recent
years. The Commission’s monitoring takes place in two processes: the Economic Reform
Programme exercise and the assessment (see below) of compliance with the economic criteria
for accession. Every year, each enlargement country prepares an economic reform
programme (ERP), which sets out a medium-term macro-fiscal policy framework and a
structural reform agenda aimed at ensuring competitiveness and inclusive growth. The ERPs
are the basis for country-specific policy guidance jointly adopted by the EU and the Western
Balkans and Turkey at ministerial level in May each year.
3.1.

The existence of a functioning market economy

Kosovo has made limited progress and is at an early stage of developing a functioning
market economy. Robust economic growth continued in 2019, but the difficult labour market
situation and the lack of economic diversification remain a challenge. While the government
adhered to the fiscal rule in 2019, the composition of public spending has further deteriorated.
Decreasing capital spending, rising pressures related to non-poverty-targeted social benefits
51

and increasing public wages pose risks to public finances and hinder private sector
development. The business environment saw limited improvements. Private sector
development remains constrained by a widespread informal economy, a slow and inefficient
judiciary, a high prevalence of corruption and the overall weak rule of law. Kosovo’s
economic outlook started to deteriorate rapidly in spring 2020, as the COVID-19 crisis
disrupted the financial flows with diaspora.
In order to improve the functioning of the market economy, Kosovo should in particular:
 ensure fiscal space to support post-crisis recovery, by containing the wage bill and
respecting the cap on war veteran spending;
 improve financial oversight and accountability of state-owned enterprises;
 implement relevant business environment measures, in particular the simplification,
merging and abolishment of licences and permits;
 implement active labour market measures to support employment, increase labour force
participation and motivate workers to join formal employment.
Economic governance
Kosovo’s fiscal framework is challenged by the COVID-19 crisis and political
uncertainty, and lacks a stronger focus on supporting private sector-led growth. The
2020-2022 medium-term expenditure framework was drafted in line with the stabilityoriented fiscal rules2, but it did not take into account the implementation of the Law on
Salaries for public employees and fiscal risks related to transfers for specific groups. The
Constitutional Court declared the Law on Salaries as unconstitutional in June 2020, which
eliminated the risk of breaking the wage bill rule, but left Kosovo’s public sector without a
coherent wage grid. In contrast to continuously growing current spending, public investment
contracted in 2019, while improvements in the business environment were marginal. The
policy guidance jointly agreed at the May 2019 Economic and Financial Dialogue between
the EU and the Western Balkans and Turkey has seen limited implementation. The 2020-2022
Economic Reform Programme rightly identifies reform priorities, but substantial efforts are
needed for timely design and implementation of reforms. The 100% tariffs for all goods
imports originating in Serbia and Bosnia and Herzegovina were abolished in April 2020. In
2019, a free trade agreement between Kosovo and Turkey entered into force.
In order to mitigate the social and economic effects of the COVID-19 crisis, the caretaker
government headed by acting Prime Minister Albin Kurti adopted an emergency package of
EUR 180 million or 2.5% of 2019 GDP. The package provides support for the affected
businesses, formal and informal employment and social protection of the most vulnerable
households. To bridge the financing gap, Kosovo will receive EUR 100 million of MacroFinancial Assistance (MFA) from the EU, which complements the IMF emergency liquidity
loan (Rapid Finance Instrument, RFI) of EUR 51.6 million. Following the suspension of the
fiscal deficit rule for 2020-2022 by the new government, Kosovo adopted the revised 2020
budget targeting a deficit of 6.5% of GDP as per fiscal rule definition. The revised budget
includes an additional emergency provision of EUR 185 million for capital projects, bringing
2

The fiscal rule places a cap on the fiscal deficit of 2 % of forecast GDP, excluding capital projects financed by
privatisation proceeds and donors (‘investment clause’). This exemption for donor-financed investments can be
invoked until 2025, provided the public debt ratio remains below 30 % of GDP. As a part of the fiscal rule, the
wage bill rule provides that the increase in the public wage bill cannot exceed nominal GDP growth. The
government deposits used as fiscal buffers are legally required to stay at 4.5 % of GDP as long as the
government is using privatisation proceeds. The debt rule provides that public and publicly guaranteed debt
cannot exceed 40 % of GDP.

52

the economic recovery programme to a grand total of EUR 365 million.
Macroeconomic stability
Robust GDP growth since 2015 has not resulted in competitiveness gains and a shift to
higher value added activities. GDP growth in 2015-18 averaged 4.1%. In 2019, economic
activity expanded by 4.2% supported by strong growth in service exports, gross-fixed capital
formation and private consumption, the
Graph : Kosovo - Real GDP growth and
latter driven by large remittances from
contributions
10 % y-o-y
abroad, and by robust wage and credit
8
growth. The increase in investment was
6
4
mainly driven by private investment and
2
foreign direct investment (FDI) while
0
-2
public investment nearly stagnated. The
-4
-6
bulk of foreign investment was directed to
-8
low value added activities such as real
2014
2015
2016
2017
2018
2019
Priv. cons.
Gov. cons.
GFCF
estate
and
renting.
Economic
Stocks
Net exports
real GDP growth
Source: Macrobond, own calculations
diversification
advanced
slowly.
Merchandise exports remain dominated by
base metals and mineral products, which account for around 47.5% of total exports. Services
exports were expanding rapidly, mainly linked to travel services to the diaspora. The
dependence of Kosovo’s economy on financial flows from the diaspora, via tourism exports,
remittances and FDI, represents a key vulnerability in the context of COVID-19 crisis. The
pandemic-related recession in the EU and in Kosovo is taking a heavy toll on Kosovo’s
economy, with real GDP expected to contract by 5% in 20203.
Kosovo’s per capita GDP remains the lowest in the region. It stood at EUR 3,959 in
nominal terms in 2019, which is about 26.5% of the EU average4. Increasing public wages
together with substantial remittances contribute to high reservation wages and undermine the
development of the private sector, which is already suffering from weak competitiveness in an
international context. Inequalities remain widespread due to a large informal sector and high
inactivity rates, especially among women.
The current account deficit narrowed to 5.8% of GDP in 2019. The improvement was
driven by an improvement in trade balance, due to robust growth of export services to the
diaspora, and by moderate growth of
Graph : Kosovo - Current account selected
components and FDI
imports.
The
traditionally
large 20 % of GDP
6
merchandise deficit stood practically
10
3
unchanged at above 40% of GDP. Apart
0
0
from a positive balance of services trade,
-10
-3
the merchandise trade deficit was also
-20
-6
mitigated by remittances inflows (11.6%
-30
-9
of GDP). Due to pandemic-related
2015
2016
2017
2018
2019
Goods and services trade balance
Workers' Remittances balance
disruptions, the merchandise deficit
Current account balance (rhs)
Net FDI (rhs)
narrowed by 26% y-o-y in the first half of
Source: IMF and Central Bank of Kosovo*
2020, on the back of very large import
contraction (23%), while the surplus of service trade declined by 52%.
Net FDI inflows in 2019 and early 2020 were around 3% of GDP, in line with the
medium-term trend. While covering more than a half of the current account deficit, the bulk
3
4

IMF estimate.
IMF data.

53

of foreign investment went to non-tradable sectors such as real estate and renting activities. In
the first quarter of 2020, official reserve assets stood at 2.9 months of imports of goods and
services.
Consumer price inflation peaked in April-May 2019 and continued to ease towards the
end of the year. The key drivers were fuel and food prices, the latter were on an accelerating
trend in spring following the introduction of the 100% tariffs on goods imported from Serbia
and Bosnia and Herzegovina in late 2018. In the first five months of 2020 inflation was on a
declining trend, averaging 0.7%.
As in previous years Kosovo has preserved fiscal stability in 2019, but the trend of
increasing current spending raises concerns. In 2019 the budget balance has achieved a
small deficit (0.6% of GDP) as per the fiscal rule definition, which excludes some capital
spending, while the headline deficit was at 2.9% of GDP. Revenue grew by 7.2% on the back
of rising tax (6.3%) and non-tax (13.1%) revenues. A positive development in 2019 was the
reduction of the stock of tax debt. Current
Graph : Kosovo - Fiscal developments
expenditure increased by 9.8% due to
20
4 % of GDP
rapidly rising social transfers (11%),
15
2
especially due to the failure to reform
costly war veteran benefits. The recurring
10
0
under-execution of capital spending was
5
-2
particularly pronounced in 2019 due
0
-4
especially to the low implementation rate
2014
2015
2016
2017
2018
2019
of donor-financed projects. A positive
Primary balance (lhs)
Interest (lhs)
GG balance (lhs)
Public Debt (rhs)
development in 2019 was the reduction of
Source: IMF and MoF
the stock of tax debt. In response to
COVID-19, the new government adopted the revised 2020 budget in August, targeting a
deficit of 6.5% of GDP according to the fiscal rule. The budget includes a recovery package
of EUR 365 million, and a provision to use the bulk of liquidations proceedings (EUR 185
million) for capital projects, which would reduce the government reserve buffer to 3% of
GDP from 4.3% in 2019. The revised budget assumes a 3% contraction of GDP in 2020,
which is more optimistic than the forecasts of international financial institutions, and a 5%
contraction in government revenue, despite an 8% y-o-y fall in the first half of 2020. While
the public debt to GDP ratio was modest at 17.5% of GDP5 in 2019, the investor base is
narrow with more than 60% of domestic debt held by public institutions such as the Central
Bank and Kosovo’s pension trust fund. The revised budget projects public debt to reach
nearly 25% of GDP in 2020.
Fiscal governance made no progress. The projections of 2019 Medium Term expenditure
Framework assumed unrealistically high GDP growth rates, on the back of high capital
spending. A lack of progress with reforming the war veteran pension scheme and bringing its
costs into line with the legislated cap resulted in a recurring underestimation of current
spending in budget planning. The revised 2020 budget is also based on overly benign
assumptions.
The policy mix in 2019 was not sufficiently geared towards supporting strong private
sector-led growth, but the first reaction to COVID-19 was adequate. The emergency
package adopted in April 2020 in response to COVID-19, including temporary loosening of
fiscal and financial policies while targeting the most affected sectors including social and
health spending, was timely and appropriate. However, ongoing political uncertainty creates a
5

Kosovo’s public debt does not include its share of the former Yugoslavia’s debt, which the IMF has reclassified
as contingent liability.

54

risk of delaying support to the private sector. In the medium-term heightened fiscal risks
persist due to high share of non-poverty-targeting social transfers e.g. the revised budget
entails 25% increase for subsidies and transfers as compared to the original 2020 budget. The
recurrent under-execution of capital investment hinders the enhancement of production base.
Recovery-related policies need to focus on growth-enhancing activities and on creating
conditions for private investment into higher value added sectors.
Functioning of product markets
Business environment
The gap between newly registered and terminated firms did not change. In 2019, the
difference between new (10,004) and terminated (1,769) firms stayed roughly the same
(8,235) as in 2018.
Progress has been made in streamlining business registration, but the private sector is
still struggling with burdensome administrative procedures such as a large number of
licenses and permits, costly and uncoordinated inspections and a high incidence of
corruption. The implementation of unique identifier number (UIN) for enterprises started in
February. The UIN should help to cut red tape for business while providing more
transparency and efficiency for the administration, as it will replace separate numbers for
different public services, e.g. VAT, customs, business and fiscal registration. A general
inspection reform is ongoing with the aim of reducing the number of (overlapping)
inspections from 36 to 15, but the new Law on inspections has not been adopted yet. The
central register for permits and licences is still being updated. The structural reorganisation of
the Kosovo Investment and Enterprise Support Agency (KIESA), aiming to support the
private sector and attract investment, is considerably behind schedule. The lack of a coherent
policy for industry development throughout the supply chain undermines the competitiveness
of SMEs.
Despite marginal improvements in several areas, Kosovo’s overall position in the World
Bank Doing Business ranking has deteriorated. It fell to the 57th place in 2019 from 44th a
year earlier, with the most problematic areas related to getting electricity, protecting minority
investors and obtaining construction permits, despite marginal improvement on the latter in
2019. Some improvements took place in the administration of tax refunds and customs
management. The adoption of the Law on voluntary mediation (2019) contributed to the
progress of contract enforcement.
The large informal sector (estimated at around 31% of GDP) negatively affects tax
revenue and creates unfair competition and undeclared employment. In May 2019,
Kosovo adopted a revised strategy and action plan for fighting informality in 2019-2023. The
plan anticipates better exchange of information between government institutions, lower
transaction costs for electronic payments and the provision of bank loans on the basis of tax
declarations. Qualitative and quantitative targets are expected to help monitor progress.
State influence on product markets
Kosovo’s state aid policy does not comply with EU rules and principles. Kosovo has yet
to meet its Stabilisation and Association Agreement (SAA) obligations on State aid schemes
and alignment with EU rules. The government lacks a coherent approach to State aid as well
as a comprehensive strategy and cost-benefit evaluations for aid and subsidies granted. Some
progress was achieved in bringing the procedures for notification of State aid closer to the EU
acquis and in staffing the state aid department. In March 2019 the Assembly elected the
members of the State Aid Commission, which is tasked with ensuring that any State aid
provided in Kosovo is compatible with the rules. However significant efforts are needed to
55

increase its capacity. So far, the bulk of State aid schemes were granted without any
notification. Regulations on the de minimis rule, horizontal and regional aid are still in the
process of drafting. Most publicly-owned enterprises remain reliant on public funding from
the budget or on subsidies. In March 2020, Kosovo has annulled the establishment of the
economic zone in Malisheva and the related expropriation of immovable property.
Privatisation and restructuring
Privatisation of socially-owned enterprises (SOEs) is advancing very slowly. The
Privatisation Agency (PAK) in 2019 sold 222 of 400 planned SOE assets to the value of
EUR32 million. As this number includes assets such as SOE-owned land and machinery, it is
difficult to judge how much the sale of assets contributed to the shift to more productive
structures. There is a lack of transparency in SOE financial reporting and recruitment. Since
the PAK board began operating, 48 of 589 SOEs have been put into liquidation, while 15
liquidation proceedings were concluded. In March 2020, the government has suspended all
activities related to the immovable property under the administration of PAK for an indefinite
period. In February-March 2020, the government dismissed several boards of Publicly Owned
Enterprises (POEs) due to poor performance, and replaced them with temporary boards. It is
important that the future new board members are appointed following open, transparent and
merit-based selection processes.
Functioning of the financial market
Financial stability
The financial sector continued to expand throughout 2019, while maintaining adequate
capitalisation and comfortable liquidity buffers. Profitability remained high, with return on
average equity standing at 18.9% for the banking sector, and 17.0% for micro-financial
institutions. In the insurance sector, in 2019 the return on average equity dropped to 1.0 %
compared from 6.3% in 2018 as the sector performed with a negative net profit of 2.8 EUR
million. The predominantly foreign-owned banking sector accounts for 65.5% of financial
system assets followed by pension funds, insurance and microfinance institutions with 27.4%,
2.8% and 4.3%, respectively. The ratio of non-performing loans reached a new record low of
2.0% in 2019. The ratio of banks’ regulatory capital to risk-weighted assets stood at 15.9%,
comfortably exceeding the regulatory minimum of 12%. Banks continued to be financed by
deposits, predominantly from households. The loan-to-deposit ratio declined to 77.6% in 2019
from 81.9% a year earlier, as deposit growth outpaced the expansion of loans. The Central
Bank of Kosovo (CBK) revoked the licence of one insurance company that was noncompliant with requirements on minimum level of capital. The CBK also revoked the licences
of one micro-finance institution and of one non-bank financial institution, reported to be
applying unfair banking practices. The amended Law on corporate income tax has eliminated
the 5% tax on gross premiums of insurance companies, which was due irrespective of profits
achieved. In reponse to COVID-19, the CBK in cooperation with the Bank Association of
Kosovo has postponed credit reimbursements by all borrowers until mid-June. The CBK also
applied regulatory forbearance on loan provisions and capital requirements on reprogrammed
loans.
Access to finance
Lending and financial intermediation have been expanding from a low base. Bank
lending expanded by 10% year-on-year in October 2019, facilitated by low interest rates, an
increase of deposits, improved contract enforcement, and guarantees extended by the Credit
Guarantee Fund for lending to micro, small and medium-size enterprises. In 2019, lending to
firms increased by 10.9% and to households by 11.2%. The average interest rate spread
56

declined to 5 percentage points (pps) in October 2019, from 5.6 pps the previous year,
pointing to improved competition for lending opportunities. Credit penetration, at around 40%
of GDP, is moderate by Western Balkan standards. The challenge is to channel savings,
including remittances, through the formal financial system into productive investment while
containing over-investment in real estate and the resulting vulnerabilities. Kosovo’s capital
market remains at an early stage of development. The main activities remain in the
government securities market, auctioned and recorded by the CBK.
Functioning of the labour market
Continuous economic growth has not led to significant employment gains. According to the
labour force survey, labour force participation has remained at around 40% since 2016,
(40.5% in 2019) while declines in the very high unemployment rate and gains in employment
were short-lived and followed seasonal patterns. The 2019 data suggest a bright spot in
Kosovo’s labour market as the unemployment rate fell to 25.7% from 29.6% one year earlier,
while the employment rate increased to 30% from 28.8% during the same period. This
improvement was partially driven by temporary jobs due to preparations for elections. The
wide gap between male and female employment rates (49% and 14% respectively) persisted.
Very high rates of inactivity (59.5%), in particular female inactivity (78.9%), and youth
unemployment (49.4%) suggest undeclared work and misalignment between education
outcomes and labour market needs. Emigration of skilled workers poses a significant
challenge to medium-term economic prospects. Active labour market policies, prequalification schemes and vocational training programmes remain inadequate to labour
market needs.
A number of structural obstacles, including high social transfers, creates disincentives to
join formal employment. Around 6% of GDP is allocated to social services, but only 0.5%
of this amount is linked to poverty and reduction of unemployment. The bulk is spent on
untargeted transfers for war veterans which undermines the soundness and fairness of the
social benefits system and motivates other
Graph : Kosovo - Labour market trends
50
(15-64 age group)
specific groups to request similarly
generous allowances. Relatively high
40
public wages reduce the attractiveness of
30
private-sector employment. The lack of
childcare and elderly care facilities hinders
20
female employment.
10

2013

2014

Participation rate
Employment rate

2015

2016

2017

2018

2019

Unemployment rate
Source: Kosovo Agency of Statistics

57

3.2.

The capacity to cope with competitive pressure and market forces within the
Union

Kosovo has made limited progress and is at an early stage in terms of capacity to cope
with competitive pressure and market forces in the EU. The quality of education remains a
concern. Kosovo made some progress in improving road infrastructure, but there are large
gaps in railway and energy infrastructure. Although investments in renewables are gradually
increasing, Kosovo remains reliant on a predominantly coal-based, outdated and unreliable
energy production system. Kosovo made some progress as regards the digitalisation of the
economy. The economy’s sectorial structure is shifting towards non-tradable activities
which weigh on competitiveness and growth of merchandise exports.
In order to support the economic recovery, improve competitiveness and sustain long-term
growth, Kosovo should in particular:
 improve the quality of vocational training and education at all levels and align the
curricula with labour market needs;
 increase energy efficiency incentives in the residential and private sectors;
 increase the share of renewables in power generation in a cost-efficient way;
 advance tailored financial and non-financial support for SMEs to support the resilience
to crisis, improve their competitiveness and export capacity.
Education and innovation
The poor performance of Kosovo's education system calls for urgent and comprehensive
action. Despite slight improvements in reading and mathematics as compared to 2015,
Kosovo scored amongst the worst performers in the 2018 OECD Programme for International
Student Assessment (PISA) assessment, ranking 3rd from the bottom. Low educational
attainment is to some extent correlated with low inclusion of children in preschool education
due to the urban-rural divide, extreme poverty and a lack of facilities. At pre-school level (0-5
years old) the enrolment rate is 14%, while at the pre-primary level (5 years old until
compulsory primary) it is 92.5%. For upper secondary education the enrolment rate stands at
86.8%, but there is a large gender gap, as the share of women without upper secondary
education is 23.4% higher than that of men. Public spending on education amounts to 4.7% of
GDP, which is below regional peers, while weak governance impedes reform progress in the
education system. Progress is slow on school reforms initiated since 2012, and is focused on
piloting new curricula in schools without preparing teachers or providing necessary learning
materials and physical conditions. Higher education might be negatively affected by the
removal of Kosovo’s higher education quality assurance body from the European Association
for Quality Assurance in Higher Education. Unemployment among university graduates is
very high at around 24%, while a quarter of Kosovo firms referred to inadequate skills as an
obstacle for doing business.
Kosovo’s research, development and innovation system is underdeveloped and
underfinanced. Public research spending is virtually non-existent. While the Law on research
and scientific activities envisages EUR 14 million in annual funding, the budget allocation in
2019 stood at only EUR 1.6 million. The Ministry of Innovation signed agreements with the
municipality of Ferizaj/ Uroševac and the University of Pristina to establish two innovation
and entrepreneurship centres which would bridge academia and the private sector.
Physical capital and quality of infrastructure
58

Kosovo continued to invest in road and railway infrastructure, but numerous challenges
remain in the transport sector. The Route 6-highway, linking Pristina with North
Macedonia has been completed and is open to traffic. The preparatory work on route 7 has
been completed, but the financing is yet to be secured. The Railway Route 10 rehabilitation
works, aimed at linking Kosovo with the wider European railway network have commenced
but have progressed slowly due to the lack of administrative capacity for project
implementation. The transport system still faces a number of challenges such as road safety,
inadequate road maintenance, and weak administrative capacity of regulatory institutions.
Progress was made in improving an unreliable and health-hazardous energy supply
which is a key bottleneck for Kosovo’s economic development. In April, the approval of
the connection agreement between the European Network of Transmission Systems Operators
of electricity (Entso-e) and Kosovo’s transmission system operator (KOSTT) marked a major
development towards Kosovo’s integration in regional energy networks. Once in force, the
agreement allows Kosovo to connect with Albania’s electricity grid through the 400kV
transmission line and load frequency control with Albania. Kosovo continued to explore
options to connect to gas pipelines with Albania and North Macedonia. The fate of the
proposed Kosova e Re 500 MW lignite power plant, including the financial implications,
remains unclear.
Despite some progress with renewables, the Kosovo energy sector remains heavily
reliant on coal. By the end of 2019, Kosovo registered 76 MW of hydropower, 34 MW of
wind and 10 MW of solar, marking a 6% annual increase in renewables’ capacities.
Electricity produced from renewables accounts for 5.5% of total production. Nevertheless,
there was no progress in shifting to competitive bidding to support renewable energy as
opposed to fixed feed-in tariffs. Progress on energy efficiency in the residential, public and
private sectors has been limited and energy tariffs are not yet cost reflective. Electricity prices
for households remain regulated and subsidised by public and commercial consumers. The
Energy Efficiency Fund, established in early 2019, is expected to begin operating in 2020.
The digitalisation of the economy is gradually advancing. Kosovo achieved the mid-term
targets of its 2013-2020 digital agenda, as the penetration of fixed broadband internet reached
93.3% and the number of mobile phone users stood at 115.7% of the population. Since 2018,
the Ministry in charge of economic development has been actively implementing a 5-year
project, aiming to bridge the urban-rural digital infrastructure divide, and investing in the
remote areas which are not attractive for private investors.
Sectoral and enterprise structure
The services, manufacturing and construction sectors continued to expand. These sectors
also employed the largest share of workers (nearly 50%) in 2019. The proportion of workers
employed in wholesale and retail trade reached 17.5% of the total, while the employment
share of construction (13.5%) overtook that of manufacturing (12.4%). The shares of trade
(16.0%) and construction (10.4%) in gross value added (GVA) were smaller than their
employment shares, suggesting low productivity, while manufacturing’s share of GVA stood
at 13.5%. The agriculture sector shows a diverging picture, with a declining share of GVA
(9.7% in 2019 compared to 12.8% a year before) and a slightly increasing employment share,
to 4.4% from 4.1%.
Kosovo’s private sector is dominated by micro-enterprises with limited potential for
productivity gains. Micro, small and medium enterprises account for 65% of total
employment, with micro-enterprises alone accounting for 36%. Nearly 96% of registered
companies had up to five employees. Difficulties in accessing finance weigh on the scaling-up
of existing firms. While the Kosovo Credit Guarantee Fund (KCGF) improves SMEs’ access
59

to finance, the operational costs of 2% represent a burden for smaller loan beneficiaries. A
further bottleneck is related to the shortcomings in property rights enforcement which make it
difficult for SMEs to use immovable property as collateral to obtain credit. In the context of
COVID-19 crisis, the KCGF and KIESA should urgently consider reviewing the application
and co-financing procedures so that more SMEs could benefit from the existing support
scheme.
Economic integration with the EU and price competitiveness
Graph : Kosovo - Exports of goods
60

Graph : Kosovo - Imports of goods

60

% of GDP

% of GDP

40

40

20

20

0

0
2011
EU

2012

CEFTA

2013
Other

2014

2015

2016

2017

2018

2011

2019

EU

2012

CEFTA

2013

2014

2015

2016

2017

2018

2019

Other
Source: WiiW

Source: WiiW

The EU is the main trading partner of Kosovo. In 2019, the EU accounted for 50% of the
total imports of goods. CEFTA’s share fell to only 14.3% as a direct result of the 100%
import tariffs imposed by Kosovo on goods originating from Serbia and Bosnia and
Herzegovina. Exports of goods to the EU reached 36% during 2019. CEFTA remains the key
market for Kosovo exporters (42.9% of the total), and the revocation of the tariffs had a
positive impact on restoring regional trade, but obstacles to free trade among CEFTA
members still persist, including political, tariff and non-tariff barriers.
The EU remains the main investor in Kosovo. In 2019 the increase of FDI inflow followed
the same pattern as in 2018, amounting to around EUR 272 million (around 4% of GDP). The
shares of Germany and Switzerland (two countries with large diasporas from Kosovo) stood
practically unchanged from the previous year at over 11.5% of the total each.
Led by growing imports and services exports, overall trade openness is gradually
increasing. While rising from 73% of GDP in 2014 to 85% in 2019, trade openness is below
regional peers where it is close to or exceeds 100%. The shares of exports and imports in
GDP stood at 29% and 56% in 2019. Despite their declining share, basic raw materials and
mineral products still dominated exports of goods, while exports of services consist to a large
extent of travel services to the diaspora.
4.

Good neighbourly relations and regional cooperation

Good neighbourly relations and regional cooperation represent an essential aspect of
Kosovo’s path towards the EU. They contribute to stability, reconciliation and a climate that
is conducive to addressing open bilateral issues and the legacies of the past.
Kosovo maintained its engagement in a number of regional cooperation initiatives, such as
Central European Free Trade Agreement (CEFTA), the Energy Community, the Transport
Community, the Regional Cooperation Council, RECOM and the Regional Youth
Cooperation Office (RYCO). During the reporting period, Kosovo chaired a number of
regional activities and events, such as the South-East European Cooperation Process
(SEECP), the RYCO governing board, the Western Balkans Fund and the Migration, Asylum,
Refugees Regional Initiative. Following its continued non-payment of its membership fees,
Kosovo's participation in the Regional School of Public Administration (ReSPA) was
supended in November 2019.
60

During the COVID-19 crisis, inclusive regional cooperation has proven to be essential. The
establishment of green lanes within the region has demonstrated the capacity of the region to
address common challenges swiftly and efficiently. Inclusive regional organisations – the
Regional Cooperation Council, the Transport Community, and the CEFTA – have been
instrumental in responding to the COVID-19 crisis. These achievements need to be turned
into sustainable improvements.
The December 2018 decision of the then Kosovo government to impose a 100% tariff on
imports from Serbia and Bosnia and Herzegovina continued to have political implications and
to hamper development of a regional economic area (REA) in the Western Balkans during
most of the reporting period. It also had implications on the functioning of CEFTA and other
regional initiatives. In Spring 2020, the Kosovo government lifted the tariff. This has allowed
for a restoration in trade with Serbia and Bosnia and Herzegovina.
Building on the results of the previous summits with the region, the Western Balkans summit
in Poznan in July 2019 focussed on strengthening regional cooperation in the fields of
economy and trade, the digital agenda, connectivity, security, fight against corruption,
promoting reconciliation and youth. The summit endorsed a number of achievements in these
fields, in particular the Clean Energy Transition Declaration signed in Podgorica, the
Regional Roaming Agreement signed in Belgrade, a substantial connectivity package and the
Roma Integration Declaration. It was also the occasion to kick-start the preparation of a
Green Agenda for the Western Balkans.
At the Zagreb Summit on 6 May 2020, EU and Western Balkans Leaders agreed that
deepening regional economic integration has to be a prominent part of recovery efforts of the
Western Balkans. Of particular importance will be the common regional market will be
critical in increasing the attractiveness and competitiveness of the region. It will help Kosovo
to speed up the recovery from the aftermath of the pandemic – notably to attract investors
looking for diversification of supply and shorter value chains. Such a common regional
market has to be inclusive, based on EU rules and built on the achievements of the regional
economic area multiannual action plan.
The unresolved fate of missing persons from the 1990s conflicts remains a humanitarian
concern in the Western Balkans. In April 2020, a total of 10,027 people are still missing as a
result of the conflicts in the region. Of these, 6,409 cases are related to the conflict in Bosnia
and Herzegovina, 1,974 to the conflict in Croatia and 1,644 to the conflict in Kosovo. 51
cases of missing persons related to the conflict in Croatia were resolved in 2019.The
resolution of the fate of 1,644 (84% men, 16% women) missing persons related to the conflict
in Kosovo and its aftermath continues to be hampered by a lack of new information on grave
sites. Only eight cases of missing persons were solved in 2019 on the basis of information
obtained from international archives. The ICRC-led Belgrade-Pristina Working Group on
Missing Persons met only once in May 2019. Kosovo’s Government Commission on Missing
Persons conducted assessment excavations in 29 locations. Although the inter-institutional
cooperation improved in the last two years, a more streamlined organisation would assist
Kosovo speaking with one voice on the issue of the missing persons, both in national and
regional discussions. The file holder at the Prime Minister Office, the director of the Kosovo
Commission for Missing Persons and the Kosovo representative to the Belgrade-Pristina
Working Group should be unified. Two regional meetings of the International Commission on
Missing Persons took place in 2019, during which efforts were made to produce a unified list
of missing persons.
Since 2017, the government has failed to take forward, including throught the necessary
legislation, the work on establishing a central register of missing persons and on the closure of
61

cases. A functional case management system is still not in place. The Institute of Forensic
Medicine and the Minister of Justice, after long delays, adopted the secondary legislation
needed for the restructuring of the Institute in July 2020. Some progress has been made in
building the Institute’s capacities in forensic anthropology.
Kosovo’s commitment to maintaining good and constructive bilateral relations in the region
was put under strain by the 100% tariff imposed on imports from Serbia and Bosnia and
Herzegovina, which was eventually lifted in Spring 2020.
Overall, Kosovo continues to have good relations with Albania. In July 2019, an agreement
on strategic and diplomatic cooperation was signed between the two governments aimed at
extending the mechanism of the joint diplomatic missions and economic diplomacy. Albania
continued to advocate for Kosovo’s full participation to regional processes. In 2019, Kosovo
and Albania signed a number of bilateral sectoral agreements (including on roaming,
simplified border crossing procedures, mutual recognition of driver’s licences).
Kosovo has maintained good relations with Montenegro. The Agreement on cooperation in
the context of the accession to the European Union was signed in March 2019. Montenegro
opened a consular office in Gjilan / Gnjilane.
Kosovo continues to enjoy overall good relations with North Macedonia. Kosovo’s political
leaders supported the implementation of the Prespa agreement as a positive contribution to
the stability of the region. Furthermore, in April 2019, an agreement between Kosovo and
North Macedonia on the mutual recognition of driving licenses entered into force. Police from
Kosovo and North Macedonia signed a protocol for establishing a joint task force. The longstanding rail border crossing protocols with North Macedonia for police, food safety and
veterinary should be finalised and signed without delay.
There has been no change in Kosovo’s formal relations with Bosnia and Herzegovina, which
does not recognise Kosovo’s independence. A reciprocal visa regime remains in place.
Relations continued to be negatively affected by Kosovo’s imposition of a 100% tariff on the
import of goods from Bosnia and Herzegovina in November 2018, eventually lifted in Spring
2020.
Kosovo has maintained good relations with Turkey. They continued their close political,
economic and cultural cooperation. A free trade agreement between Kosovo and Turkey
entered into force in July 2019.
5.

NORMALISATION OF RELATIONS BETWEEN KOSOVO AND SERBIA

In the framework of the EU-facilitated dialogue, the efforts aiming at concluding a fully
comprehensive and legally binding agreement between Serbia and Kosovo had been
interrupted since November 2018 following the decision by the Kosovo government to
impose customs tariffs of 100% on imported goods from Serbia and Bosnia and Herzegovina,
citing political and trade related grievances.
The decision taken by the Kosovo government to lift these tariffs and the reciprocity measures
by early June 2020 led to a restoration of the flow of goods with both Serbia and Bosnia and
Herzegovina. In April 2020, the Council appointed Miroslav Lajčák as EU Special
Representative for the Belgrade-Pristina Dialogue and other Western Balkan regional issues,
to assist High-Representative/Vice-President Josep Borrell in taking forward the
normalisation talks.
When it comes to the state of play on implementation of past agreement: the full
implementation of the justice agreement drawn from the April 2013 ‘First agreement of
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principles governing the normalisation of relations’ continues to require further efforts by
judicial authorities in Pristina.
Implementation of the 25 August 2015 Agreements has overall remained slow. No progress
has been made on the Association/Community of Serb majority municipalities and Kosovo
has yet to engage constructively in its establishment. Regarding the energy agreement
between Serbia and Kosovo, a new Connection Agreement between the Kosovo transmission
system operator and the European Network of Transmission System Operators (ENTSO-E)
has been approved. Serbia has not yet filed for the licensing of Elektrosever, but has
submitted a new business registration application that includes additional business activities
that it wishes to undertake in Kosovo. The works on the Mitrovica bridge are completed and
the bridge should be opened to vehicle traffic without further delay or obstructions.
As regards the Technical Dialogue Agreements (2011-2012), some are not or only partially
being implemented. Both sides need to remain committed to the continued implementation of
the agreement on representation and participation of Kosovo in regional forums. The issues
with the implementation of cadastre and university diplomas recognition agreements are yet
to be solved as are the licence plate related elements of the agreement on freedom of
movement. Serbia has yet to address the issue of re-located Serbian administrative customs
structures with Kosovo denomination that operate from within Serbia, and to cease the
issuance of documentation or affixing of stamps with denomination that contravenes the
related agreement. On IBM, the interim common crossing points with Kosovo continue to be
operational. There has been no progress in establishing the six permanent IBM common
crossing points between Serbia and Kosovo as stipulated in the IBM agreement. Serbia did
not engage constructively in starting the establishment of these crossing points on the Serbian
side (in Jarinje, Mucibabe, and Konculj). This led to a suspension of EU funds in July 2018.
Additional measures need to be taken by Serbia to close illegal crossings. The parties have
continued to largely comply with their respective obligations under the telecoms agreement
during the reporting period.
Requests for mutual legal assistance are in principle being processed.
Overall, Kosovo has remained engaged in the dialogue. The Kosovo government needs to
continue to uphold its commitments and continue implementation of past Dialogue
agreements. Kosovo needs to make further substantial efforts and contribute to the
establishment of a conducive environment to the conclusion of a legally binding agreement
with Serbia. The EU-facilitated dialogue resumed with a virtual high-level meeting on 12 July
2020, followed by high-level meetings in Brussels on 16 July and 7 September. A number of
expert level meetings took place in Brussels. Reaching a comprehensive, legally binding
agreement is urgent and crucial so that Kosovo and Serbia can advance on their respective
European paths.
6.

European standards

6.1.

Free movement of goods

The free movement of goods ensures that many products can be traded freely across the EU
based on common rules and procedures. Where products are governed by national rules, the
principle of the free movement of goods prevents these from creating unjustified barriers to
trade.

63

Kosovo has some level of preparation on the free movement of goods. It made some
progress during the reporting period by adopting implementing legislation on standardisation,
metrology and accreditation. Efforts were made on market surveillance in the area of product
safety. The administrative capacity of quality infrastructure institutions needs to be further
strengthened and their structural weaknesses addressed. As the recommendations in the
previous report were partly addressed and in the coming year, Kosovo should in particular:
 adopt implementing legislation on technical requirements for products and conformity
assessment;
 strengthen enforcement capacity of quality infrastructure, in particular in the area of
conformity assessment and market surveillance bodies;
 amend the law on chemicals in order to start implementing requirements of the European
Regulation on Registration, Evaluation, Authorisation and Restriction of Chemicals
(REACH).
General principles
In the context of the production, distribution and marketing of industrial products,
Kosovo took several steps to implement the Law on technical requirements for product and
conformity assessment. It adopted an administrative instruction on the designation of
conformity assessment bodies and a Regulation on the content and management of the
technical regulations register. The Law on general product safety needs to be aligned as
regards the “general safety requirement” and brought into line with other laws on product
safety. There is a need to raise businesses’ awareness of technical requirements. As a response
to COVID-19, upon joint initiative by the Permanent Secretariat of the Transport Community
and the CEFTA Secretariat, Kosovo, alongside all the other governments in the Western
Balkans has successfully implemented measures to facilitate the transport and trade of
essential goods within the region.
Non-harmonised area
Kosovo prepared an action plan on ensuring compliance with Articles 34-36 of the Treaty on
the Functioning of the European Union (TFEU) and this is ready for government adoption. No
technical regulations have been notified to date under the recently adopted Regulation on
the notification and exchange of information on technical regulations, conformity assessment
procedures and standards.
Harmonised area: quality infrastructure
The quality infrastructure legislation is partly aligned with the EU acquis. However, the
agencies’ administrative structure and professional capacities need to be further strengthened
in order to implement it.
The Kosovo Standardisation Agency adopted 251 European standards through licence
agreements with the European Committee for Standardisation/European Committee for
Electro-technical Standardisation (CEN/CENELEC). In October 2019, the Agency’s midterm (2020-2025) strategy and implementation plan were adopted.
Implementing legislation was adopted for the Law on accreditation. Kosovo’s accreditation
body should be enabled to manage its financial resources properly and ensure its
independence. Having failed to address several non-conformities on time, it needs to resume
work on its accession to relaunch the Multilateral Agreement of the European Cooperation for
Accreditation. There are currently 50 accredited conformity assessment bodies in Kosovo (35
test laboratories and 15 inspection bodies), but their capacities need to be strengthened.
64

The Kosovo Metrology Agency started implementing legislation designed to be in line with
the EU acquis on non-automatic weighing instruments and measuring instruments, but it
remained understaffed and underequipped to do so fully. The Agency is a liaison organisation
of the European Association of National Metrology Institutes (EURAMET).
Kosovo’s market surveillance legislation is designed to be aligned with the EU acquis. Interinstitutional monitoring improved thanks to additional resources and the launch of a publicly
accessible webpage (RAPEX-Kosovo), featuring Kosovo’s notifications on non-food products
posing serious risks to consumers, product safety news and information about major events in
the area of consumer safety. Market inspectorates act at both community and central level,
which makes coordination difficult.
In 2019, 105 product safety inspections identified 202 harmful products, including 4 types
with serious risks; all harmful products were permanently withdrawn from the market.
Harmonised area: sectoral legislation
On “new and global approach” product legislation, Kosovo aligned its legislation with the
EU acquis on machinery and protective personal equipment. The lack of capacity on the
quality infrastructure and in particular for market surveillance remains a challenge for
implementation.
On “old approach” product legislation and procedural measures, Kosovo aligned its
legislation with the EU acquis on pre-packed product and bottles as measuring containers.
The legislation on chemicals is not aligned with the EU acquis and requires significant
amendment if Kosovo is to implement the requirements of the EU Regulation on registration,
evaluation, authorisation and restriction of chemicals (REACH).
6.2
Movement of workers, services and right of establishment
Citizens of one EU Member State have the right to work in another Member State and must
be given the same working and social conditions as other workers. EU natural and legal
persons have the right to establish themselves in any Member State and to provide crossborder services. For certain regulated professions, there are rules on mutual recognition of
qualifications. Postal services are gradually being opened up to competition.
Kosovo remains moderately prepared for the free movement of workers, services and the
right of establishment. Limited progress was made during the reporting period. Kosovo still
needs to align its legislation with the EU acquis and start removing any identified barriers to
the right of establishment and freedom to provide services. It needs to establish a point of
single contact to allow providers and recipients of services to find all relevant information.
The postal sector needs to further open its market and deliver quality services to its citizens.
Kosovo needs to align legislation with the EU acquis on the mutual recognition of
professional qualifications. As most of last report’s recommendations have not been
addressed yet, Kosovo should:
 remove the identified barriers to the right of establishment and freedom to provide
services, by rolling out the action plan for the full implementation of the Law on services;
 align with the EU acquis on mutual recognition of professional qualifications;
 continue to align with the EU acquis on postal services and further open the postal market.
On the free movement of workers, between 1 February 2019 and 13 February 2020, the
Employment Agency issued 181 short-term work permits. Social security agreements with
Belgium and Switzerland entered into force in June and September 2019 respectively. Periods
65

of activity in those countries will be taken into account for entitlement to social security
benefits. Kosovo also initiated negotiations for social security agreements with the
Netherlands, Slovenia and Albania.
On the freedom to provide services, the roll-out of the 5-year action plan (adopted in 2018)
for the full implementation of the EU Services Directive did not start yet, pending the
establishment of an effective system to monitor the compliance of relevant sectoral legislation
with the Directive. This process requires a considerable coordination effort across a range of
line ministries, agencies, other public and professional bodies. The legal departments of the
relevant ministries should be strengthened to ensure successful alignment. Implementation of
the Directive would cut administrative burden for businesses and improve the free movement
of services.
The action plan on the establishment of a Point of Single Contact under the Services Directive
was adopted on 30 April 2020. It gives providers and recipients of services access to all
relevant information on activities covered by the Law on services. The collection and
processing of statistics on service activities should be improved and enable evidence-based
policy-making.
On the right of establishment, the Law on services requires companies wishing to do
business in Kosovo to register in the Kosovo business registry. Foreign companies are
allowed to provide services only if they establish an office in Kosovo.
The new Law on postal services in Kosovo, which entered into force in February 2019, is
partly aligned with the EU postal acquis, but not yet with the Regulation on cross-border
parcel delivery services. In April 2019, the postal regulator (Regulatory Authority of
Electronic and Postal Communications) adopted legislation on general authorisations of
market entry procedures for providers offering non-universal postal services. The postal
regulator, as an independent body, has started preparations for adopting a system for cost
accounting and net cost calculation of universal postal services. The activities of the postal
service providers are supervised, monitored and inspected by the postal regulator in the event
of regulatory violations and customers’ complaints. Kosovo started working on a new sectoral
strategy (2021-2025) for the full liberalisation of the postal services market.
There is no clear procedure for the mutual recognition of professional qualifications.
Kosovo has a Law on regulated professions, but has not adopted the necessary implementing
legislation.
Kosovo has yet to put in place operational procedures and training for the recognition of
professional qualifications. By law, the Ministry of Education, Science and Technology, the
State Examination Agency and the State Council for Regulated Professions, are responsible
for granting recognition of foreign professional qualifications, but the latter has not yet been
established.
The National Qualifications Authority accredits and validates international qualifications. A
joint working group on the recognition of professional qualifications was established in the
framework of regional cooperation. Kosovo started discussions on mutual recognition for
doctors of medicine, dentists, civil engineers and architects.
6.3

Free movement of capital

In the EU, capital and investments must be able to move without restriction and there are
common rules for cross-border payments. Banks and other economic operators apply certain
rules to support the fight against money laundering and terrorist financing.

66

Kosovo has some level of preparation in this area. The movement of capital remains
largely free in Kosovo, with no restrictions on foreign ownership or on investments in the
financial sector. Some restrictions remain for EU nationals acquiring real estate in Kosovo.
During the reporting period, some progress was made notably in the area of payment
services, with the entry into force of the Regulation on licencing and oversight of payment
system operators. The legislative framework on the prevention of money laundering and
terrorist financing still needs to be aligned with the EU acquis. Inter-institutional
cooperation to ensure proper investigation and prosecution of offences in that area should
be enforced. Although initial steps were taken, the recommendations of the previous report
remain valid. In the coming year, Kosovo should therefore:
 amend the Law on property rights to grant national treatment to EU nationals acquiring
real estate in Kosovo, in line with the SAA;
 increase efforts to fight economic and financial crime and align the Law on the
prevention of money laundering and terrorist financing with the EU acquis.
The movement of capital is largely liberalised and aligned with the EU acquis. The
execution of payments and money transfers is limited to banking and non-banking financial
institutions licensed by the Central Bank of Kosovo. Limited progress was made with the
drafting of an amendment to the law on property rights, to address the issue of real estate
acquistion by foreigners focusing on the rights of EU nationals.
A new Regulation on the licensing and oversight of payment system operators entered into
force in June 2019. It lays down conditions, requirements and procedures to grant licences to
payment system operators and supervise their security, efficiency and sustainability. In
addition, the Central Bank amended the Regulation on electronic payment instruments to
eliminate additional charges to bank card holders.
While work started on addressing flaws in the legal and institutional framework, Kosovo did
not adopt any changes to the Law on money laundering and terrorism financing. Changes
are needed to bring the Law fully into line with the EU acquis and international standards,
especially those of the Financial Action Task Force (FATF) and the Committee of Experts on
the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism
(MONEYVAL). More specifically, Kosovo needs to introduce additional sanctions for
terrorism financing, for beneficial owner identification and implementation on targeted
financial sanctions mechanisms, and identify and protect critical infrastructure. The
authorities should update the sectoral risk assessments with a more stringent methodology and
extend them to the sectors identified in the National Risk Assessment and the Kosovo Police’s
serious organised crime threat assessment. Interinstitutional cooperation in the fight against
economic and financial crime needs to be strengthened (see also section 2.2.2 - Justice,
freedom and security).
6.4.

Financial services

EU rules on banking, insurance, supplementary pensions, investment services and securities
markets aim to ensure fair competition between financial institutions and their stability,
namely rules. They include rules on their authorisation, operation and supervision.
Kosovo is moderately prepared in the area of financial services. Some progress was made
following the entry into force of Basel III framework related regulations on capital
requirements and risk management of banks and the alignment of the taxation of the insurance
sector with the remaining financial sectors. As the recommendations in the previous report
have not been fully addressed, in the coming year Kosovo should in particular:
67

 fully implement Solvency I measures and develop the roadmap for implementation of
Solvency II measures;
 further advance in implementation of the Basel III framework and review the legal
framework governing microfinance institutions and non-bank financial institutions in
accordance with the best practices;
 take immediate action to address the issue of uninsured, unregistered vehicles.
On banks and financial conglomerates, some additional progress was made in the area of
capital requirements and the risk management of banks, following the entry into force of
regulations on capital adequacy and leverage ration in line with the Basel III framework.
The bank’s capitalisation level remained stable and well above the required minimum capital
adequacy ratio of 12%. Kosovo has not yet established an independent recovery and
resolution authority. Amendments to the Law on banks to assign this function to the Central
Bank must ensure that the authority has functional independence. The Central Bank revoked
the licences of one micro-finance institution and one non-bank financial institution, on the
grounds of non-compliance with the regulatory framework; one of the institutions has
challenged the decision in court. Gaps in the legislation on micro-finance and non-bank
financial institutions should be adressed to ensure alignment with best practices. The Central
Bank took some measures on consumer lending price transparency. As of 2019, all credit
institutions have to use the standard European consumer credit information form for loan
applications, in order to ensure the adequate disclosure of credit information. Further work on
consumer protection against unfair banking practices will be needed.
In response to the COVID-19 emergency, the Central Bank and the Kosovo Banking
Association decided in Spring 2020 to temporarily suspend the payment of loan instalments
for businesses and individuals. The Central Bank also decided to apply regulatory forbearance
on loan provisions and capital requirements on reprogrammed loans. The July 2019 Law on
corporate income tax eliminates the 5% tax on gross premiums that insurance companies had
been paying, regardless of whether they are profitable, bringing their tax arrangements into
line with other financial sectors. In April, the Central Bank revoked the licence of one
insurance company, on the grounds of the latter’s inability to maintain minimum capital
requirements. Without being licenced by the Central Bank, foreign insurers are not allowed to
offer or take on direct insurance attached to a person, object or liability located in the territory
of Kosovo. Foreign institutions are treated like domestic undertakings, but still need to fulfill
additional criteria. In May, the Central Bank further implemented Solvency I measures by
amending the Regulation on the calculation of the minimum solvency threshold, capital
adequacy and guarantee fund for non-life insurers and adopting a Regulation on the
liquidation of insurers. Work should start on developing a roadmap for implementing
Solvency II measures. In November, the Central Bank, which is competent for licensing,
regulating and supervising insurance companies, went against the opinion of the Kosovo
Competition Authority and increased the risk premium on compulsory motor liability
insurance by 26%. The decision raised civil society concerns due to the additional financial
burden it puts on car owners. In January 2020, the Central Bank amended the Regulation on
the management of commissions and operational expenses of non-life insurers, reducing the
limit on accounting for operational costs from 35% to 24% of total costs. The Central Bank
did not take any immediate measure on price liberalisation of the insurance market.
The authorities have still not addressed the issue of uninsured and unregistered vehicles, and
the associated costs for the insurance sector. As Kosovo is still not covered by the ‘green
card’ system, insurance is required for foreign-registered vehicles entering Kosovo and
68

vehicles with Kosovo plates leaving Kosovo. This continues to represent a financial burden
for travellers (other than those from countries with which Kosovo has bilateral vehicle
insurance arrangements).
Some progress was made with the adoption and operationalisation of the manual on the onsite supervision of pension funds, but further alignment with the EU acquis is needed.
On securities markets and investment services, the market remains at an early stage of
development. Most activity focuses on the government securities market, auctioned by the
Central Bank. The Regulation on the repurchase of securities with the Central Bank (approved
in April 2019) enables repurchase of the securities between commercial banks on the
secondary market. It aims to help eligible banks to manage their liquidity efficiently in the
short term.
6.5.

Customs

All Member States are part of the EU customs union and follow the same customs rules and
procedures. This requires legislative alignment, adequate implementation and enforcement
capacity and access to common computerised customs systems.
Kosovo is moderately prepared in the area of customs. Some progress was achieved as
the strategy and the action plan on fighting informal economy was adopted and Kosovo
continued to perform positively in enforcing customs measures, particularly for the
protection of intellectual property rights (IPRs). As the recommendations in the previous
report have not been fully addressed and in the coming year, Kosovo should in particular:
 adopt the revised Customs and Excise Code, so that it is aligned with EU legislation
and practices, including the minimum EU tobacco excise rate;
 continue implementing and regularly assess the strategy on fighting the informal
economy and its action plan and ensure coordination between Kosovo Customs and
law enforcement agencies in the fight against customs fraud;
 start to phase out the use of privately owned inland customs terminals and remove the
associated fees charged to exporters/importers, in accordance with EU customs
legislation.
In the area of customs legislation, only initial steps were taken to align the Customs and
Excise Code further with the Union customs code, as recommended in the previous report.
Due to status issues, there was no progress on Kosovo’s application to become an observer
under the Common Transit Convention. Kosovo applies the provisions of the Regional
Convention on Pan-Euro-Mediterranean preferential rules of origin, without having ratified it.
Kosovo Customs continue to participate in the systematic electronic exchange of excise data
among Western Balkan economies. The legislation on customs measures governing
intellectual property rights (IPRs) and export controls for cultural goods is aligned with the
EU acquis, but the legislation on drug precursors requires further alignment. As regards trade
facilitation, Kosovo Customs approved the first two authorised economic operators in October
and continued to improve its systems, procedures and administrative capacities in this area.
Inland customs terminals continue to be located in privately owned facilities, which charge a
fee for every truck entering to discharge customs obligations. Such fees are not in line with
the EU acquis and the SAA provisions and need to be abolished. Kosovo should start to phase
out the use of privately owned facilities and transform existing public locations, such as the
old part of Pristina Airport, into inland customs terminals.

69

Kosovo Customs maintains a reasonable administrative and operational capacity. In spite
of the 5% reduction on customs revenues from certain products as a result of implementing
the Stabilisation and Association Agreement, overall customs revenues increased by 4%.
Kosovo Customs management should continue improving administrative and operational
capacity, e.g. by recruiting and promoting staff on merit. Despite Kosovo Customs’ efforts
towards a paperless approach and an e-payments system, including voluntary declarations by
businesses that helped eliminate administrative barriers and lead to a streamlining of customs
clearance procedures, the number of business complaints against the administration’s
decisions has increased by 17% in 2019 when compared to the previous year. In July 2020,
Kosovo ratified the agreement to join the EU’s Customs 2020 programme that focuses on
implementing EU customs law and policy. Kosovo carried the blueprint to assess its readiness
and gaps in administrative and operational capacity against identified targets. It approved a
mid-term (2019-2023) customs strategy aimed at strengthening Kosovo Customs’ capacity,
modernising revenue collection and facilitating trade and the fight against tax evasion,
organised crime and other illicit activities.
Kosovo Customs’ performance in the fight against IPR infringements and illegal cross-border
activities, including the smuggling of goods such as narcotics and hazardous materials,
continues to improve. It approved its internal anti-corruption plan in April 2019, but further
efforts are needed to address corruption, including more investigations and more thorough
checks on asset declarations filled by customs officials.
The level of informality in the economy is still high and, despite initial steps by the customs
and tax administrations, further coordination efforts between relevant institutions and law
enforcement bodies are needed to fight the informal economy and customs fraud. The fiscal
division of the Basic Court in Pristina should take effective actions to reduce the backlog of
unresolved complaints against the customs administration.
A joint facility designed to simplify procedures and eliminate double controls at the
Vërmica/Vrbnica border crossing point between Kosovo and Albania has been operational
since May 2019. New premises at the Merdarë/Merdare and Mutivodë/Mutivode common
crossing points with Serbia are not fully operational yet (see section 5 – normalisation of
relations between Kosovo and Serbia). The Kosovo Customs office in the port of Durrës
(Albania) is fully functional.
6.6

Taxation

EU rules on taxation cover value-added tax, excise duties and aspects of corporate taxation.
They also deal with cooperation between tax administrations, including the exchange of
information to prevent tax evasion.
Kosovo has some level of preparation in the area of taxation. There was good progress
with the withdrawal of the decision on discriminatory excises on cigarettes, the adoption of
the Law on corporate income tax and with initial steps to reforming the organisational
structure of the Kosovo Tax Administration, improving business processes for debt
collection management, and introducing risk compliance in high risk sectors. In the coming
year, Kosovo should in particular:
 adopt the laws on personal income tax and on value added tax (VAT);
 continue implementing and regularly assess the strategy for combating the informal
economy, money laundering, financing of terrorism and financial crime (2019-2023);

70

 increase cooperation with the judiciary to ensure timely adjudication of tax evasion and
fraud cases, with emphasis on high risk sectors.
Good progress was registered in tax collection in 2019 with overall revenue collection up by
10.4% from 2018. In addition, there was significant progress on tax debt collection, up by
44.5%. However, due to the impact of the COVID-19 crisis, it is expected that in 2020
revenues will decrease substantially and public spending will increase. Domestic revenues
stand at 26% of GDP, a relatively low level in regional comparison, making Kosovo
vulnerable to shocks on imports and consumption. Kosovo should review its tax policy and
align its direct and indirect taxation legislation based on the recommendations of such review.
On indirect taxation, the VAT system is broadly aligned with the EU acquis. Kosovo applies
a standard 18% rate and a reduced 8% rate. The reduced rate is not applied to supplies and
imports of IT equipment. The Assembly has yet to approve the revised Law on VAT, which
ensures further harmonisation with the EU acquis and other tax legislation. Progress was
noted on reducing the average time of VAT refunds to 20 days, but there was no progress on
reducing the average time of VAT returns filing and on improving the taxpayer’s registry. No
progress was noted in aligning the VAT reimbursement for goods contained in the personal
luggage of travellers residing outside Kosovo with the relevant EU directives. As regards
excises, in February 2020, the government withdrew a decision on a discriminatory rate for
cigarettes, which was in clear violation of the EU-Kosovo Stabillisation and Association
Agreement. No action was taken to address the tax treatment of evaporation and other kinds
of material loss in the transportation, production or storage of excise goods. On direct
taxation, amendments to the Law on corporate income tax were adopted and entered into
force. The Law has a direct impact on the insurance market, by eliminating the 5% tax on
gross premiums that insurance companies had been paying irrespective of the level of profit.
An amendment to the Law on personal income tax to ensure harmonisation with other tax
legislation and remove contradictory provisions was not adopted.
On administrative cooperation and mutual assistance, double taxation agreements with
Austria and Switzerland entered into force, bringing the total number of agreements to 15.
Kosovo should consider adopting the standards enshrined in the OECD/Council of Europe
Convention on Mutual Administrative Assistance in Tax Matters. In July 2020, Kosovo
ratified the agreement with the EU to join the Fiscalis 2020 programme, which focuses on
improving the functioning of taxation systems by enhancing cooperation between
participating countries, their tax authorities and their officials.
On operational capacity and computerisation, the Kosovo Tax Administration adopted a new
organisational structure to improve its governance and service delivery. It should strengthen
its administrative and professional capacity, and ensure merit-based and transparent selection
processes. It adopted a medium-term action plan to reduce the large stock of tax debt through
more effective debt collection. It also adopted a strategy on improving the number and quality
of the audits. However, audit compliance processes and audit practices based on centralized
risk assessment processes need to be improved and the implementation of the strategy needs
to be properly monitored. To improve the quality of the tax register, stronger efforts are
required to formalise data sharing arrangements across agencies (Kosovo Tax Administration,
Kosovo Business Registration and Cadastre Agencies and the Credit Registry of the Central
Bank). The Tax Administration has developed a good taxpayer service focus, in particular
with the widespread use of e-filing and e-payment. It should continue to modernise its internal
IT platform and provide more electronic services. In 2019, tax evasion to the value of EUR
5.3 million was detected, down from EUR 7 million in 2018. The number of anti-tax evasion
operations fell to 176, from 306 in 2018. Tax evasion and informality continue to hamper the
71

economy and further efforts are needed, in particular on risk-based field inspections and interinstitutional cooperation. A modern compliance risk management methodology was
introduced in the high-risk construction sector. Allegations of serious tax fraud should be
investigated properly and the authorities should support the work of the law enforcement and
judicial bodies. The fiscal division of the Basic Court in Pristina should take effective action
to reduce the backlog of unresolved complaints against the customs administration.
6.7

Competition

EU rules protect free competition. These include antitrust rules against restrictive agreements
between companies and abuse of dominant position. They also include rules on
concentrations between companies which would significantly impede competition. EU rules
also set out a system of State aid control. Governments are only allowed to grant State aid if
restrictive conditions are met, with a view to prevent distortion of competition.
Kosovo is at an early stage/has some level of preparation on competition. Some progress
was made with the adoption of additional sub-legal acts by the Competition Authority,
including a strategic plan. Significant efforts are needed to further align with the EU acquis
by implementing legislation both in competition and State aid areas.
As recommendations from the previous report remain valid, Kosovo should in particular:
 ensure the functional capacity and operational independence of the competition and State
aid authorities and increase cooperation and coordination between all stakeholders,
including ministries, regulators and the judiciary;
 further align the legislative framework, specifically its implementing legislation, on both
competition and State aid and ensure its enforcement;
 fulfil SAA obligations by establising a comprehensive inventory of aid schemes and by
aligning these with State aid rules.
Antitrust and mergers
The legislative framework is partially in line with the EU competition acquis. Kosovo
should adopt legislation on the protection of competition to address gaps that hinder
implementation and enforcement. During the reporting period, Kosovo adopted administrative
instructions on technology transfer agreements and on specialisation agreements.
On the institutional framework, the Kosovo Competition Authority, as the responsible
institution to implement competition law, has powers to initiate investigations, conduct onsite inspections, impose fines and remedies and prohibit anti-competitive mergers. In 2019,
the Authority concluded memoranda of understanding in key sectors, with the Energy
Regulatory Office, Kosovo Railways, the Electronic and Postal Communications Regulatory
Authority, the Water Services Regulator and the Central Bank. However, cooperation and
coordination with government institutions, regulators and ministries should be strengthened
further. The Authority should also establish closer links with public procurement bodies to
follow-up individual public procurement cases. It has adopted its Strategic Plan for the period
2020-2023.
On its capacity to enforce competition, the Competition Authority has recruited two more
staff during the reporting period. However, its staff needs additional training to handle cases
more efficiently and implement competition rules effectively. The Authority is still expected
to coordinate better with sector regulators and relevant line ministries on issues such as
market definition, determining companies with significant market power, establishing
remedies ex ante or ex post, exchanging data, issuing advisory opinions and reporting
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potential infringements. Cooperation is currently insufficient to ensure correct enforcement of
competition rules in these sectors. The expertise of judges dealing with competition cases and
merger control should be improved by organising ad hoc trainings and other learning
initiatives. On implementation, during the reporting period, the Authority has issued 7
decisions and 10 professional opinions. Following an investigation in May 2020, the
Authority imposed its largest fine for a total amount of EUR 4 million to 14 companies in the
oil derivatives sector. It did not apply the leniency policy or conduct any dawn raids.
State aid
The legislative framework on State aid is largely in line with the EU acquis. The Law on
State aid broadly reflects Articles 107 and 108 TFEU. There are regulations in place on the
organisation and functioning of the State Aid Commission and on the criteria, form and
content of State aid notifications. Kosovo has developed State aid guidelines for ministries’
and other aid-granting bodies’ reporting on State aid schemes to the State Aid Department.
The de minimis aid implementing legislation was adopted by the government in January 2020.
However, it still needs to adopt implementing legislation, on general block exemption
regulations and services of general economic interest.
As regards the institutional framework, the State Aid Department as part of Ministry of
Finance, is responsible for assessing proposals for State aid, drafting assessment reports for
the State Aid Commission and updating the State aid inventory. Members of the State Aid
Commission were appointed in March and the Commission became operational in September
2019. Its capacity to enforce State aid rules remains limited.
On implementation, the State Aid Department prepared nine scheme assessment reports on
the basis of which the State Aid Commission issued four decisions. The SAA requires
Kosovo to establish a comprehensive inventory of State aid schemes, but it failed to do so by
the April 2019 deadline. The State Aid Department submitted a first overview of business
support schemes run by the main granting authorities. This inventory was updated by the State
Aid Commission in June 2019. Beyond this State aid inventory mapping, there has been no
substantive screening of existing schemes. Furthermore, there is a lack of engagement by
ministries and sectoral regulators in sharing information on support schemes. A number of
central and local aid measures, some involving large companies in various sectors (e.g.
telecommunications), have not been notified or properly investigated. Drafting of the regional
aid map is pending.
Liberalisation
Public undertakings are subject to the Law on competition and the Law on State aid. Kosovo
has monopolies of a commercial nature within the meaning of Article 37 TFEU. There is little
to no awareness of the possible application of State aid rules to the activities of publicly
owned enterprises. The Competition Authority's professional opinion on car homologation
still needs to be implemented.
In March 2020, services provided by Kosovo Telecom have been referenced to as of special
importance by government decision. The Competition Authority’s opinion concluded that this
decision may lead to forms of abuse of dominant position. Also, the case of Kosovo Post’s
direct agreements with public institutions placed competitors at a disadvantage. The
Administrative Court’s decision to annul Kosovo Post’s direct agreement was upheld on
appeal.
6.8

Public procurement

73

EU rules ensure that the public procurement of goods, services and works in any Member
State is transparent and open to all EU companies on the basis of non-discrimination and
equal treatment.
Kosovo has some level of preparation/is moderately prepared in public procurement.
Some progress in the area was recorded during the reporting period. Initial steps were taken
to revise Kosovo's legal framework and address the use of e-procurement and the improved
monitoring of contract implementation increasing transparency. Despite progress, public
procurement remains prone to irregularities and vulnerable to corruption during the
procurement process and contract implementation. To enforce procurement law, Kosovo
needs an efficient remedy system with sufficient capacity including a fully staffed board of
the Procurement Review Body (PRB). As most recommendations from the previous report
remain valid, in the coming year Kosovo should in particular:
 further align its legislation with the EU acquis on public procurement, including
concessions, and ensure proper implementation of the Law on public procurement;
 increase the capacity of all public procurement institutions and the cooperation between
them to ensure consistent implementation of the public procurement regulatory
framework;
 ensure that the PRB is fully operational, and that staff capacity limitations are addressed.
Institutional set-up and legal alignment
Kosovo's legal framework on public procurement is broadly aligned with the EU’s 2004
Directives but only partly aligned with the 2014 EU Directives on classical and utilities
procurement, including concessions. Kosovo took initial steps to bring the legal framework
into line with the EU acquis, by addressing gaps in the areas of e-procurement, the
implementation and monitoring of contracts and tender evaluation. It prepared implementing
legislation, including rules and guidelines to help contracting authorities manage procurement
and the award of contracts. New legislation adopted on defence and security procurement is
partially aligned with the EU acquis. All legal and financial instruments used for public
procurement and concessions, including inter-governmental agreements with third countries,
should reflect the principles of transparency, competition, equal treatment and nondiscrimination.
Kosovo has a strategy (covering 2017-2021) and an action plan (2017-2019) to improve the
public procurement system, but is still not assesing its implementation. The 2020-2021 action
plan is under preparation.
Kosovo has in place public procurement institutions in charge of the main functions of public
procurement. The Central Procurement Agency (under the Ministry of Finance) is reponsible
for centralised purchases. The Public Procurement Regulatory Commission (PPRC) is
mandated to monitor and coordinate public procurement, while contracting authorities
manage contract award and implementation. The PRB reviews public procurement decisions
and bidders’ complaints. Coordination between these bodies needs to improve. A lack of
continuous professional development adds to the shortcomings in procurement administration
in the public sector.
Implementation and enforcement capacity
Kosovo's public procurement market was estimated at 10.7% of GDP in 2019 (based on
preliminary data), compared to 9.4% in 2018. More public contracts were posted by
contracting authorities on the e-procurement platform in 2019: 12,461 public contracts
74

registered on the platform (2018: 12,412) and around 7,650 economic operators (2018: 6,000)
and 20,500 users (2018: 15,000).
From the monitoring of contract awards and implementation, 90% of contracts were
awarded through open procedure in 2019. 99.22% of public contracts were awarded according
to the lowest-price criterion with only 0.78% using the best-price-quality ratio in line with the
EU Directive on public procurement. Insufficient managerial accountability and quality
control throughout the public procurement cycle, and limited capacity to oversee and control
contract implementation and management, create risks of mismanagement and corruption.
The e-procurement platform enables stakeholders to monitor all procurement information, but
the modules on the management of awarded contracts and contractors’ performance
evaluation are still not working. Additional efforts are needed to ensure the interoperability
between the e-procurement system and other relevant government IT systems.
The capacity to manage public procurement processes varies between contracting
authorities. All authorities lack the capacity to draft proper technical specifications; this
undermines the quality, efficiency and transparency of the procurement cycle.
Kosovo has an average of five bidders per tender which reflects a good level of competition.
Most contracting authorities do not fulfil their legal obligation to publish public procurement
plans. Kosovo has a code of ethics for public procurement but compliance is not monitored.
There were no developments as regards integrity and conflicts of interest.
Related to the COVID-19 crisis, the PPRC issued guidance on urgent procurement procedures
in line with the flexibility provisions provided in public procurement legislation. In total, 130
contracts were signed in urgent procedure in March and April 2020 for a total amount of EUR
10 million. To mitigate the risks of fraud, it is especially important to maintain audit trails.
Posting all procurement information related to COVID-19 on government portals contributes
to enhanced transparency and trust.
The Anti-Fraud Unit (recently established within the National Audit Office) identified 26
cases of suspected fraud in the area of public procurement, up from 12 in 2018 (its first year
of operation). All 26 cases were submitted to the Prosecutor.
Centralised procurement is mandatory for 14 categories of goods and services, listed by the
Ministry of Finance and applies to agencies with fewer than 50 employees that are
accountable to the Assembly. However, only 16 (out of 165) contracting authorities carry out
procurement through the Central Procurement Agency. In 2019, they carried out 31
centralised procurement procedures. The Agency’s limited capacity to conduct proper market
research means that it does not secure the economies of scale expected from centralised
procurement. The Agency continues to be understaffed and is lagging behind in implementing
its procurement plan.
Efficient remedy system
The legislation on the right to legal remedy is broadly in line with the EU acquis.The PRB is
a quasi judicial body mainly tasked with reviewing complaints from bidders. In 2019, the
PRB had received 981 complaints and reviewed 535 appeals. To ensure transparency all
decisions are published on its official website. The implementation capacity of its board is
impaired by the fact that two of the five members still have to be appointed. It needs more
qualified staff, especially review experts and legal officials to deal with the increased number
of complaints from economic operators. Its decision-making lacks consistency and the quality
needs to be improved.

75

The introduction of the mandatory electronic submission of complaints on the e-procurement
platform is a positive development, as all complaints are now handled electronically. In
addition, the PRB has launched a revamped website that includes live streaming of its
sessions. This will allow for better analysis of decisions, the generation of statistical reports
and greater transparency of this institution.
6.9

Company law

The EU has common rules on the formation, registration and disclosure requirements of a
company, with complementary rules for accounting and financial reporting, and statutory
audit.
Kosovo has some level of preparation in the area of company law. Good progress was
made during the reporting period, with the adoption of implementing legislation in the area
of corporate accounting and audit and by establishing the Public Audit Oversight Board,
while several steps were taken to advance the implementation of the law on business
organisations, fostering a level playing field in the area. In the coming year, Kosovo should
pay particular attention to:
 further strengthen the institutional audit oversight structures and the professional
independence and objectivity of auditors and audit firms;
 ensure further alignment with EU company law acquis.
On company law, Kosovo took concrete steps to implement the Law on business
organisations. It adopted two secondary acts on business registration, a unique identification
number in the registration process and a fee calculation method, to reduce the administrative
burden on businesses and the administration. However, both acts still need to show their
benefit in cost and time savings for businesses. Kosovo started preparations to develop a first
corporate governance code. Further alignment with the EU company law acquis is needed,
inter alia as regards the minimum capital requirement, shareholder rights, company takeovers,
some aspects of cross-border mergers and of companies’ and foreign branches’ disclosure of
information. The Kosovo Business Registration Agency is responsible for online business
registrations and publications. However, the Agency does not publish company financial
statements or information on voluntary liquidation and bankruptcy proceedings. The
registration of a business can start electronically, but must be confirmed through a paperbased process. The Agency has concluded memoranda of cooperation with counterparts in
Albania and North Macedonia.
The Law on financial reporting on corporate accounting and auditing entered into force in
2019. Implementing legislation on licensing legal auditors and (domestic and foreign) audit
companies was adopted in July 2019. Administrative instructions on audit independence and
disciplinary measures were adopted in December 2019. The Law still needs to be aligned with
the relevant EU acquis on non-financial reporting. The Kosovo Council for Financial
Reporting (KCFR) adopted a methodology for public audit oversight structures and organised
staff training. In April 2019, the Public Audit Oversight Board (POB) was established as an
executive body of the KCFR. A sustainable financing solution to enable the POB to function
as the competent authority for public audit oversight, has yet to be found. Statutory auditors
and audit firms are required to apply the international standards on quality control and are
subject to public oversight by the POB. Ongoing training should be ensured for certified
auditors. Accounting associations and statutory auditors are required to submit a copy of their
code of ethics.
6.10

Intellectual property law
76

The EU has harmonised rules for the legal protection of intellectual property rights (IPR),
and for the legal protection of copyright and related rights. Rules for the legal protection of
IPRs cover for instance, patents and trademarks, designs, biotechnological inventions and
pharmaceuticals. Rules for the legal protection of copyright and related rights cover, for
instance, books, films, computer programmes and broadcasting.
Kosovo has some level of preparation in this area. Some progress was made by aligning the
legal framework on IPR with the EU acquis, adopting a National Strategy to Strengthen the
Copyright System and reducing the backlog of applications. However, the lack of cooperation
between policy-making and enforcement institutions continues to hinder effective
enforcement of intellectual property rights.
As recommendations from the previous report have only been implemented partly, in the
coming year, Kosovo should in particular:
 take concrete steps to increase the capacity and coordination of policy-making institutions
and law enforcement agencies to enforce intellectual, industrial and commercial property
rights and further align with the EU acquis;
 take adequate measures to fight counterfeit goods and digital piracy;
 raise awareness of the protection of industrial property rights.
Kosovo committed to guarantee, within five years of the entry into force of the SAA, a level
of protection of intellectual, industrial and commercial property rights equivalent to that
applied in the EU. Effective implementation of IPRs is hampered by an overall low level of
public awareness, still lengthy procedures for treating applications and limited enforcement,
which deters rights-holders from pushing charges. Primary and secondary legislation on
industrial property and copyrights require harmonisation.
On copyright and related rights, the Ministry of Culture, Youth and Sports adopted the
2019-2023 National Strategy for Strengthening the Copyright System in June 2019. Under the
strategy, the Ministry has appointed the members of a Task Force against Piracy and
Counterfeiting, including a representative from the State Prosecutor’s Office. A commission
for determining the fees to be paid by collective management organisations and cable
operators for the use of copyrighted material was established in July 2019. The fees are
expected to be approved in 2020.
On industrial property rights, Kosovo’s laws and administrative instructions are partly
aligned with most of the EU acquis. Further progress was noted with amendments to the Law
on patents adopted in July 2019. Legislation on patents, topographies and industrial design are
partly harmonised. New legislation is needed on trademarks, trade secrets, patents, industrial
design and integrated circuit topography.
The Agency for Industrial Property has made good progress in reducing the backlog of
applications for patents, trademarks and industrial designs. It recruited three new staff
bringing the total to 21. Its industrial property software was updated in line with the latest
version provided by the World Intellectual Property Organisation. Kosovo still needs to
develop a strategy for industrial property rights. In the last year, it set up a system for
geographical indications which is now ready to process applications.
The State Intellectual Property Council and the Task Force against Piracy and Counterfeiting
are the main bodies tasked with coordinating enforcement. Coordination between police,
customs and the market inspectorates needs to be strengthened. Market inspectors are still
held back in their work by the need for police approval before launching investigations. The
77

scale of IPR litigation in Kosovo is low due to a lack of prosecutors and judges with
specialised knowledge.
The main IPR issues reported by the Kosovo Police’s Unit for Economic Crimes, Corruption
and Cybercrime are online infringements, websites with infringing goods, broadcasting,
plagiarism and new trends in IP crime.
Capacity-building, cooperation with law enforcement bodies and awareness raising are still
needed if the Law on Customs Measures for the Protection of IPRs is to be implemented
effectively. All police and customs officers can act ex officio to prevent IPR infringements.
Statistics on IPR cases should be collected in a coordinated and systematic manner.
During 2019, Kosovo Customs initiated verification procedures in 379 cases for a value of
EUR 3,642,702. In cooperation with rights-holders they seized infringing goods for a value of
EUR 1,832,390, over 30 % more than in 2018. Substantially more counterfeit items were
destroyed.
6.11

Social policy and employment

EU social rules include minimum standards for labour law, equality, health and safety at
work and non-discrimination. They also promote social dialogue at European Union level.
Kosovo is at an early stage of preparation on social policy and employment. There was
limited progress during the reporting period, in particular on amending health and safety
regulations. The rate of fatal incidents at work decreased compared with last year.
As most of the previous recommendations have not been implemented, Kosovo should in
particular:
 continue to implement the 2018-2022 strategy for employment and social welfare, and
monitor results;
 amend and enforce the Law on labour in line with relevant EU acquis, in particular in
relation to non-discrimination in employment and parental leave;
 amend and adopt the Law on the Economic Social Council, enforce health and safety at
work rules and take measures to further reduce workplace accidents;
 ensure better targeting and delivery of social services in municipalities and of social
assistance schemes.
Kosovo needs to amend the Law on labour in line with the EU acquis, including EU rules on
non-discrimination in employment and social policy and maternity/paternity leave. Poor
implementation of the existing Law, particularly in the private sector, remains a concern.
Around 49% of children are registered as benefiting from social assistance, but only around
10% of children with special needs. As many as 10% of children in Kosovo are involved in
work, of whom 6.8% work in hazardous conditions, with the problem particularly evident
among the Roma and Ashkali communities.
Kosovo aligned its regulations with the EU directives on occupational health and safety at
work in 2019; it should now focus on their implementation, which remains limited. The
majority of workers are not covered by a health insurance or insurance against work-related
accidents or illnesses. The Labour Inspectorate made efforts to improve its capacity with an
increased number of inspections but this did not have a significant impact on the ground.
Non-compliance with health and safety measures, especially in some domains such as the

78

building sector, remain prevalent. There were fewer fatal accidents at work, with 11 fatalities
registered during the reporting period.
On social dialogue, the 2014 General Collective Agreement, expired in 2017 without having
been implemented. A new agreement is being negotiated. Amendments to the Law on the
Economic Social Council, aiming to improve its capacities, decision-making and overall
performance, have not yet been adopted. Public sector trade unions were relatively active over
the past year, in particular in demanding salary increases and organising social dialogue
trainings for local branches. The private sector unions are under pressure, with cases of
retaliation for industrial action, and generally less organised as a result.
On employment policy, the 2018-2022 Sectoral Strategy (Ministry of Labour and Social
Welfare) and the 2018-2020 Action Plan for Increasing Youth Employment remain key
documents. Although the targets were modest, a first assessment shows a low implementation
rate. Capacities for implementing, monitoring and evaluating of such strategies are still underdeveloped and heavily dependent on external support. For the next Sectoral Strategy, Kosovo
should ensure a more strategic approach, better mid-/long-term planning and realistic but
ambitious targets. The Employment Agency needs to significantly improve its monitoring
capacity and more human and financial resources. For the upcoming strategic cycle, Kosovo
should build internal capacity to devise and follow up strategic commitments on employment,
in close coordination with other policies (education, social inclusion, economic development,
innovation, etc.).
Kosovo continues to face structural labour market challenges stemming from rapid growth of
the working-age population not matched by sustained job creation, persistently low
participation of women and generally precarious employment opportunities (fewer than half
of the employees have permanent work contracts).
Education attainment is a key predictor of employment (and activation). The employment rate
is 62.2% among people with tertiary attainment but only 12.4% for those with low education.
Although women tend to attain higher education levels (e.g. over 40% active women hold
tertiary qualifications against 20% of active men), they remain under-represented in
employment and are predominantly employed in public sectors such as education and health.
Young people (15-24 years-old) remain most affected by unemployment and inactivity. In
2019, the proportion not in employment, education or training reached 32.7%. Youth
unemployment remains high (49.4%), particularly among women. Demographic pressures,
joblessness growth pattern, a propensity towards emigration and poor education outcomes are
key factors in the precarious position of young people in Kosovo.
The overall activity rate stood at 40.5% in 2019 (40.9% in 2018) and the employment rate
was still low at 30.1% (slight up from 28.8% in 2018). Unemployment was at 25.7% in 2019
down from 29.6%. It was higher among women, at 34.4% in 2019 (33.4% in 2018) and 22.6%
among men (28.5% in 2018). The employment rate for women was only 14% (slightly up
from 12.3% in 2018), compared to 49% for men (up from 45.3% in 2018). Improvements
were noted in the relative proportion of employees with long-term contracts (45.3% in 2019,
compared to 25.5% in 2018) and temporary contracts (54.7% in 2019 compared to 74.5% in
2018). The indicators that still give rise to most concerns are the high inactivity rate (59.5% in
2019) and youth unemployment (49.4% in 2019). Unemployment is even higher (over 90%)
in the Roma and Ashkali communities. Members of these communities usually work in the
informal sector, holding insecure, low-skilled and low-status jobs and few of them are
registered as unemployed. Self-employment stood at 21.6% in 2019.
The Employment Agency is the key body implementing employment policy in Kosovo. It
continued to consolidate its management and operational procedures and data management,
79

and to review and refine the portfolio of active labour market programmes. However, further
work is needed to improve its operational capacity. Some progress has been achieved in
improving the labour market information system but a fully-fledged standardised case
management system is still lacking. The number of registered unemployed people declined to
74,488, compared to almost 96,000 in 2018. Although half of the unemployed have a low
level of education attainment, they are under-represented among participants in the Agency’s
active labour market measures.
On social inclusion and protection, Kosovo needs to improve its targeting of the groups in
need. Overall spending on social protection amounts to 6% of GDP, but this is mostly for oldage and war veterans’ pensions; less than 0.5% of GDP is left for the social assistance scheme
(SAS). The SAS is the only programme that targets poverty reduction and that identifies
beneficiaries on the basis of household income and assets. It has many inbuilt features that
severely limit its poverty reduction impact for families with children and disincentivise
working-age family members, creating a substantive poverty trap. The Ministry for Labour
and Social Welfare drafted a concept document to address these issues through legal
amendments but work is at an early stage.
The municipalities did not allocate sustainable long-term financing for social services. An
initiative to earmark funding from the general grant for social services through changes in the
Law on local finance has been pending for many years. The Ministry for Labour and Social
Welfare, in cooperation with several municipalities, signed memoranda of understanding on
house building for families in need. Municipalities have not allocated sufficient funding for
temporary social housing, particularly for victims of domestic violence and trafficking.
Kosovo remains the poorest in the region, struggling with high levels of poverty and massive
unemployment. It is estimated that 18% of the population lives below the poverty line (EUR
45 per month) and 5.1 percent of the population below the extreme poverty line (under USD
1.90 per day). Young people and children from poor households, the socially vulnerable
(including members of the Roma and Ashkali communities) and people with disabilities, do
not enjoy equal access to vital health and education services due to financial barriers,
insufficient provision, parental disinterest, distance/transportation issues, and discrimination.
On non-discrimination in employment and social policy, Kosovo has not yet adopted
implementing legislation for the Law on protection from discrimination. The authorities must
address discrimination against women, particularly those belonging to minority groups,
especially as regards private sector recruitment. Discrimination against pensioners, especially
when it comes to social services, and persons with HIV/AIDS is another issue of concern. The
Ombudsperson report notes that the legal and institutional framework on discrimination has
not produced satisfactory results. The report examines in particular discrimination at work,
which is often difficult to prove, especially in the private sector. The Ombudsperson notes
that cases related to discrimination at work remain the same compared to previous years.
Institutions continue to perform poorly when it comes to processing and investigating cases of
discrimination.
On equality between women and men, gender-based discrimination is widespread in
recruitment, promotion, pay, contract length, maternity leave and sexual harassment at work.
Current regulations discourage the recruitment of women, particularly in the private sector.
Limited access to childcare and flexible working arrangements are also considered barriers in
this respect, as formal options for care beyond maternity leave are limited and family-friendly
work schedules are often not on offer. Other challenges faced by women are a lack of care for
the elderly, discriminations when it comes to access to property, and gender-based violence.
The situation is even more serious in rural areas.
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6.12

Consumer and Health Protection

EU rules protect consumers’ economic interests and in relation to product safety, dangerous
imitations and liability for defective products. The EU also ensures high common standards
for tobacco control, blood, tissues, cells and organs, patients’ rights in cross-border
healthcare, and serious cross-border health threats including communicable diseases, and
medicines for human and veterinary use.
Kosovo is at an early stage of preparation in this area. There was limited progress overall,
with some progress on previous recommendations by adopting implementing legislation for
the enforcement of the Law on consumer protection, and the government’s recognition of
independent consumer rights organisations, as well as strengthened inter-institutional
coordination. There was limited progress on health, notably with the partial introduction of a
basic health information system, and the establishment of free physician services in public
health care institutions.
In the coming year, Kosovo should:
 amend the Law on consumer protection to remove problematic articles and increase
awareness on consumers’ rights and traders’ obligations;
 allocate the necessary resources to allow implementation of the health sector reforms and
for strengthening of the health system including further roll-out of the electronic public
health information system;
 adopt and start to implement the health promotion and education strategy.
Consumer protection
Kosovo’s legislation is partly aligned with the acquis on consumer protection. In 2019, it
adopted 9 of the 11 sub-legal acts needed to implement the Law on consumer protection.
However, the Law does not comply with the EU acquis on mortgage credit and alternative
consumer dispute resolution. It requires products to be labelled with the flag of the country of
origin, which is not in line with the EU acquis, while technical issues prevent the application
of fines in case of non-compliance.
Enforcement of consumer rights protection continues to be limited, pending the reform of the
market inspectorate, but the addition of five independent consumer rights organisations to the
Consumer Protection Council enhanced transparency and dialogue with civil society. The
consumer rights portal was upgraded to facilitate the submission of complaints and provide
real time statistics. It needs to be further upgraded as awareness of consumers’ rights and
traders’ obligations remains low.
With regard to product safety, in May 2019 the Coordination Body for Market Surveillance
launched a publicly accessible webpage (RAPEX-Kosovo) to publish alerts on non-food
products posing serious risks to consumers, product safety news and consumer safety
information. In 2019, 202 dangerous products were withdrawn from the market.
The provision on general safety requirement in the Law on general product safety needs to be
amended.
As regards non-safety issues, the Law on consumer protection addresses consumers’
economic interests, but it cannot be properly enforced due to the pending reform of the market
inspectorate and weak consumer organisations. The Central Bank of Kosovo closed two
financial institutions on the grounds that they had violated the consumer credit rights and
obligations; one has contested the decision in court. Some steps were taken to consumer credit
81

agreements governed by the Central Bank, but more action is needed to address unfair
banking and consumer lending practices and to ensure consumer price transparency.
Public Health
In response to the COVID-19 outbreak, the government declared a public health emergency
in March 2020 and introduced containment measures, including curfews, bans on gatherings,
strict restrictions on movement, closure of schools and universities, closure of restaurants,
cafes and non-essential shops, suspension of public transport and closing of borders.
Measures were gradually lifted from early May 2020. However, in response to increasing
numbers of cases from early June, the government reintroduced in mid-July several public
health measures, including obligatory wearing of facemasks, curfews and testing requirements
for entry into Kosovo. On 14 August 2020, the Kosovo Assembly adopted a new Law on
prevention and fight against the COVID-19 pandemic, in order to provide a solid legal
framework for the required public health measures.
The pandemic has put Kosovo’s health system under significant strain. Healthcare workers
have been mobilised to increase the ability to treat COVID-19 patients and testing capacity.
Kosovo has positively responded to the EU’s offer to the Western Balkans to access several
key EU initiatives and instruments in the context of the COVID-19 response. Kosovo became
member of the Joint Procurement Agreement on medical countermeasures, as well as
observer in the EU Health Security Committee, which provides access to the EU Early
Warning and Response System. Kosovo is also providing the Commission’s data collection
system on COVID-19 and nominated a correspondent to the European Centre for Disease
Prevention and Control.
The EU secured EUR 5 million immediate support to provide medical equipment and
protective equipment to strengthen the capacity of the health-care system to fight COVID-19.
On public health policy, Kosovo has yet to introduce a universal health coverage scheme and
amend the Law on health insurance. It has not started to collect health premiums. The public
health information system is still not functional and implementation of the communication
strategy in support of the Law on health insurance has been further delayed. The growing
emigration of health workers has a detrimental impact on the health system.
The 2020 overall budget for the health sector has been increased with 6% compared to 2019.
The increase includes higher allocations for essential pharmaceuticals and for capital
expenditures.
There has been little progress on the health sector strategy. The scale of poverty means that
around one fifth of the population have very limited access to healthcare. Access to basic
healthcase is free, but spending on diagnostic services and medications is not reimbursed.
High reliance on private out-of-pocket expenditures (estimated at 40% of total medical costs)
mean that the economically most vulnerable have limited access to the health system.
Only 65% of annual public health needs are covered by public spending, which mostly cover
fixed costs, leaving less for direct patient costs (diagnosis, treatment and prevention). Health
financing continues to be based predominantly on historical expenditure rather than forwardlooking needs assessments. Institutional accountability has not increased and limited
incentives have been introduced to improve productivity, efficiency and quality in the health
sector. Positive steps on medicines for human use were the adoption of implementing
legislation on price regulation and approval of a new essential medicines list. The
pharmaceutical stock management module within the health information system is now
operational.
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Mental health services function as integrated services, with no notable developments in the
reporting period. The comprehensive Law on tobacco control (in force since 2013) is still not
implemented, because of a lack of political will and the poor performance of enforcement
authorities. The legislation on blood, tissues, cells and organs is not yet fully aligned with
the acquis. More human and financial resources are needed, and administrative and
monitoring capacity should be strengthened.
In the field of serious cross-border health threats, including communicable diseases,
immunisation coverage remains high with vaccination rates of over 93% reported among
school-age children. Kosovo started work on an action plan addressing recommendation from
a European Centre for Disease Prevention and Control technical assessment report, and
adopted a 2019-2022 strategic action plan on antimicrobial resistance.
Legislation on patients’ rights in cross-border healthcare is partially aligned with the
acquis. For specialised health services that are not available in Kosovo, patients can benefit
from the health insurance fund for health services abroad. Kosovo has bilateral agreements
with Albania, Croatia and Turkey on certain medical services. However, available funding
covers only 45% of the needs of the population and it was not increased in 2019.
There was some progres on the development and roll out across some health institutions of the
e-health information system based on the European core health indicators. The system and its
coverage should be expanded to support evidence-based health care policy. It currently
captures data on patient admissions, discharges and transfers, but further functionalities
(pathology, radiology, blood transfusion, vaccination and other interventions) should be
added.
The 2014-2020 cancer screening programme is ongoing. Although additional funding has
been provided for systematic screening for cervical and breast cancer, the cancer incidence
data needs improvement. The necessary resources should be allocated to allow proper
treatment and prevention. Health promotion and the prevention of non-communicable
diseases remains weak. Kosovo has not yet adopted a 2019-2021 strategy on health
promotion and education and made no progress on nutrition and physical activity.
As regards health inequalities, Kosovo does not provide universal health insurance and outof-pocket spending on health remains high. For economic reasons, an estimated 18% of the
population do not seek medical services in the event of illness. The situation of the Roma and
Ashkali communities remains a source of concern given their very low immunisation levels
and particular difficulties in accessing healthcare due to their difficult socio-economic
conditions. The distribution of information on public services and the incidence of
discrimination have not improved.
6.13

Education and culture

The EU supports cooperation in education and culture through funding programmes and the
coordination of Member State policy through the open method of coordination. The EU and
the Member States must also prevent discrimination and ensure quality education for children
of migrant workers, including those from disadvantaged backgrounds.
Kosovo is at an early stage of preparation in the field of education and culture. There was no
progress over the past year and the quality of education needs to be improved considerably.
Since the previous report’s recommendations have not been addressed, in the coming year,
Kosovo should in particular:
 systematically apply quality assurance mechanisms at all education levels and improve
access to quality education at pre-school level and for disadvantaged groups;
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 finalise the implementation of the new curricular framework for basic education with
quality textbooks and by providing sustainable training to teachers;
 increase the provision of quality vocational education and training for professions in
demand;
 improve quality assurance in higher education by meeting the recommendations of the
European Association for Quality Assurance in Higher Education and revisting the
relevant legislation (such as the Law on higher education and the Law on Kosovo
Accreditation Agency).
Public spending on education did not increase, remaining at 4.7% of GDP. As a reaction to
the COVID-19 crisis, all schools in Kosovo were closed in March 2020 and remained closed
until the summer holidays. Online classes, based on instructions from the Ministry of
Education, Science, Technology and Innovation, are being provided for all levels of
education, from pre-school to higher education.
Enrolment in primary and lower secondary education is universal with 100% of children
attending grades 1 to 5 and 90.5% continuing to lower secondary school (grades 6 to 9).
86.8% of children attend secondary school (grades 9 to 12), which is close to the OECD
average. Despite an increase, only 6.2% of children aged 0-5 attend early childhood education
and care, well below the OECD average (over 87%) or the Education and Training 2020
targets (95%). Currently, there are only 44 public kindergartens, spread over 23 of the 38
municipalities. Government plans to increase this number are progressing very slowly. A
higher percentage of children above 5 years old (92.5%) attend early childhood education and
care (until compulsory primary education). The proportion of students in higher education
remains high, but the graduation rate is still low.
The quality of education remains poor. In the 2018 OECD Programme for International
Student Assessment (PISA), Kosovo again (as in 2015) ranked third from bottom. Kosovo
also participated in the 2019 Trends in International Mathematics and Science Study
(TIMMS), as well as in the 2021 Progress in International Reading Literacy Study (PIRLS).
The authorities launched a wide-ranging curriculum reform in 2012, focusing on students and
their competencies. While it was introduced to all schools in 2017, progress is hampered by a
lack of suitable textbooks, teaching materials and teacher training.
Kosovo continues to have a very high relative number of students (double the EU average). In
higher education, there are still many studying law and economics, but various business
surveys have identified skills shortage in the areas of IT and engineering. Teacher/student
ratios remain unfavourable to students (1:41 in public and 1:60 in the private universities).
Corruption and political interference remain significant problems at all levels of education,
particularly in higher education. Although there have been some improvements due to public
scrutiny, the recruitment and promotion of academic staff is mostly not merit-based and
scientific achievements, publications and performances are often overlooked. Insufficient
action was taken to address cases of academic misconduct and plagiarism.
Kosovo has not yet adopted the new Law on higher education that would strengthen
institutions’ autonomy and improve quality assurance and academic integrity.
The Kosovo Accreditation Agency’s membership of the European Association for Quality
Assurance in Higher Education (ENQA) was revoked in September 2019, following Kosovo’s
failure to adhere to the ENQA’s rules and standards. The Agency will have to wait for two
years until 2021 before it is eligible to reapply for membership. The Agency remains poorly
resourced, with only four members of staff, and the board’s decision to cut a vast number of
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programmes for not meeting the minimal accreditation criteria was met with undue criticism.
A new director was appointed in March 2020, after the Agency was managed by acting
directors for a number of years.
Half of all upper secondary students (almost 53 % in 2018/2019) choose vocational
education (VET) programmes. However, a huge proportion (97.4 %) of vocational education
graduates continue to enrol in higher education. The VET system lacks practical and applied
courses in most programmes and there is little cooperation between vocational schools and
business entities. Where such cooperation exists, it is facilitated mainly through donor and
private business projects. Teachers in VET centres have the necessary formal qualifications,
but are not provided with adequate professional development opportunities. In addition, there
is a lack of teaching materials and textbooks. There is still a discrepancy between the needs of
the labour market and education outcomes.
More efforts are needed to give children with disabilities access to quality education. In 2018,
75 new assistants qualifies for working with children/students with special needs, adding to a
first group of 54. Some 53 assistants were employed in 2019.
Measures should be taken to address the high dropout rate among Roma and Ashkali children,
e.g. supporting the work of the learning centres (mainly established and supported by donors).
It is largely thanks to the learning centres that enrolment rates in compulsory education have
increased among Roma and Ashkali children, and dropout rates have decreased. Although the
government promised to contribute to their funding, it has yet to allocate budgetary resources;
no funding was allocated for these centres in the 2020 budget. Efforts should be made to
tackle discrimination in universities and halls of residence.
Since 2015, 2,800 students and staff from Kosovo participated in Erasmus+ exchanges.
Kosovo institutions participated in 10 capacity-building projects in higher education (three as
coordinating partners).
On culture, Kosovo should maintain efforts to meet the standards of the 2005 UNESCO
Convention on the Protection and Promotion of the Diversity of Cultural Expressions. Kosovo
needs to progress on drafting the Law on cultural heritage, which should accurately reflect its
commitments under Annex V of the Ahtisaari Plan. The frequency of Implementation and
Monitoring Council meetings needs to be maintained in order to identify joint solutions to be
reached between Kosovo and the Serbian Orthodox Church. Cultural cooperation with Serbia
should be facilitated.
As regards Kosovo’s participation in the Creative Europe programme, in 2019, three
information sessions were organised in Pristina and Prizren to inform larger audiences about
co-financing opportunities, calls and application procedures under the programme; however,
without any successful project being funded in any action under the programme. A Creative
Europe desk for Kosovo was established.
On youth, Kosovo chaired the Governing Board of the Regional Youth Cooperation Office
(RYCO) in 2019 and two meetings were held.
Kosovo actively joined the fifth edition of the European Week of Sport (23-30 September
2019), under the framework of the Commission’s initiative “European Week of Sport Beyond
Borders”. Sport activities were organised across Kosovo.
6.14

Science and research

85

The EU provides significant support for research and innovation. All Member States can
benefit from the EU’s research programmes, especially where there is scientific excellence
and solid investment in research.
Kosovo is at an early stage of preparation for science and research. Limited progress was
made during the reporting period. In 2019, Kosovo improved its performance in Horizon
2020.
Since recommendations of the previous report were not fully addressed, Kosovo should in
particular:
 develop a strategic approach to the development, prioritisation and promotion of scientific
research and innovation and ensure higher government spending on research; seek to
stimulate investment from the private sector by completing a Smart Specialisation
Strategy;
 continue efforts on increasing participation in the EU’s Horizon 2020 programme;
 provide statistical data on numbers of researchers, percentage of GDP spent on research
and innovation, and performance related to the European Research Area priorities.
Kosovo’s research and innovation policy remains underdeveloped. The legal basis consists
of a Law on scientific research activities and a Law on scientific innovation, transfer of
knoweldge and technology. In both cases, many key provisions remain unimplemented,
including the requirement to develop a Kosovo-wide research programme. As a result, there is
no strategic approach to the development, prioritisation and promotion of research activities.
With the new government in place, a restructuring of governmental institutions took place
with innovation being included in the portfolio of the Ministry of Education, Science,
Technology and Innovation since February 2020.
Considering research infrastructures, Kosovo recently started to establish closer links to
GÉANT (Europe’s leading collaboration on network and e-infrastructure services), and a
support project is ongoing that aims to integrate Kosovo better in the activities of this research
infrastructure.
Kosovo started work on an R&D infrastructure map to collect country-level data on
laboratories and researchers.
A Smart Specialisation Strategy is being developed but it is still at an early drafting stage.
Innovation efforts, mainly driven by the private sector, are advancing and are well
coordinated with similar efforts in other countries.
The sector continues to be under-funded, with government research spending amounting to
only 0.1% of GDP, despite a 0.7% target mandated by law. The funding and efforts of the
Ministry of Education are geared to providing full or partial scholarships for students to study
abroad, mostly for master’s courses and only very few opportunities for PhD/postgraduate
research.
The quality of programmes preparing postgraduates for research careers is poor. Research is
not a priority for universities, with most of the funding allocated to teaching. Private and
public higher education institutions apply very uneven criteria for promotion based on
scientific research and publications. The exclusion of the Kosovo Accreditation Agency from
both the European Association for Quality Assurance in Higher Education and the European
Quality Assurance Register for Higher Education is a setback.

86

There was no progress on integration into the European Research Area. Kosovo needs to
submit reliable statistics to monitor progress in this field.
On framework programmes, Horizon 2020 has become the main international cooperation
programme for Kosovo allowing multi-country cooperation with EU Member States and
beyond.
Kosovo entities have participated 20 times to 18 collaborative actions, Marie SkłodowskaCurie actions and European Research Council actions of Horizon 2020, receiving EUR 2.5
million. Despite 2019 being by far Kosovo’s best year of participation with a success rate of
20.4% above the 12% overall Horizon 2020 average, its performance could still improve.
Actions have been taken in this respect, in particular, with the national contact points network
becoming fully operational, engagement through more training, better linking of researchers,
exchanges of best practice and mentoring with other countries. Kosovo needs to step up these
efforts.
Kosovo participates in the European Cooperation in Science and Technology (COST), which
enables researchers to participate easily in research and innovation meetings all over Europe.
6.15

Trade issues

The EU has a common trade and commercial policy towards third countries, based on
multilateral and bilateral agreements and autonomous measures.
Kosovo is at an early stage of preparation in this area. Some progress over the past year
was made in strenghtening the administrative capacity of the Ministry of Trade, however
efforts need to continue in view of Kosovos’s international and regional trade commitments.
During the reporting period, the 100% tariffs on goods imports originating in Serbia and
Bosnia and Herzegovina, which were in violation of the Central European Free Trade
Agreement (CEFTA), hampered the development of a regional economic area (REA) in the
Western Balkans. In April 2020, the tariffs were lifted and replaced by gradual trade
reciprocity measures, which were subsequently abolished by the new government in June.
The positive contribution of trade in services has partly offset Kosovo’s trade deficit, but the
increasing trade deficit in goods is a matter of concern. Kosovo has not been able to make full
use of the trade preferences of the Stabilisation and Association Agreement (SAA) with the
EU.
As not all recommendations from the previous report were implemented, Kosovo should in
particular:
 develop a trade policy to adress Kosovo’s growing trade deficit on goods and to expand
trade on services;
 ratify and implement CEFTA Additional Protocol 5 on trade facilitation, ratify and
implement Additional Protocol 6 on trade in services and appoint a negotiator and adopt a
mandate for the negotiation of Additional Protocol 7 on dispute settlement. Implement
other committments under the multi-annual action plan for the development of a regional
economic area (REA).
Kosovo is at an early stage of preparation for applying for WTO observer status. In this
context, a memorandum on foreign trade regime has been prepared, but not yet processed.
The overall volume of trade with the EU increased by 25% in 2019 and reached EUR 1.4
billion. Over the last 10 years, bilateral trade has grown considerably (by 111%) and the EU
remains Kosovo’s first trading partner, accounting for 47.5% of total trade (33% of total
exports and 49% of total imports of goods). Although the overall trade balance is strongly in
87

favour of the EU (reaching a surplus of EUR 1.15 billion in 2019), Kosovo’s exports to the
EU – though modest in absolute terms – increased by 34% in 2019, i.e. at a faster rate than
imports from the EU. However, a clear strategy and measures to improve its deficit on goods
is lacking. It remains essential that Kosovo focuses on strengthening competitiveness and
improving opportunities for Kosovo producers and exporters by making full use of trade
preferences granted under the SAA.
Following the adoption of a Law on trade safeguard measures, a dedicated commission was
trained and became operational. The Ministry of Trade worked on the development of a trade
policy document and laws on internal and external trade, aiming at putting a comprehensive
framework for domestic and international trade. The capacities of the ministry improved
further thanks to relevant training, but more progress is needed in light of Kosovo’s
international and regional trade commitments.
In April 2020, Kosovo lifted the 100% tariff on imports from Serbia and Bosnia and
Herzegovina that had been in place since November 2018 and were replaced by gradual trade
reciprocity measures (revoked in June 2020). The 100% tariffs went against Kosovo’s
obligations under CEFTA, were not in the spirit of the SAA and undermined regional
cooperation, including the Regional Economic Area. In addition to political tensions, they led
to a halt of imports from Serbia and Bosnia and Herzegovina. The measure was also
detrimental to the investment environment. The lifting of the 100% tariff has enabled the flow
of goods with both Serbia and Bosnia and Herzegovina to be restored.
Despite the impact of the 100% tariffs on trade, the CEFTA area has remained Kosovo’s main
export market, accounting for 43.2% of its total exports in 2019. Together with other parties,
Kosovo adopted CEFTA’s Additional Protocol 6 (trade in services) in December 2019 and
should proceed with its ratification. Kosovo also adopted the action plan for the establishment
of the Single Point of Contact as defined by the Services Directive, which includes the
establishment of the Contact Point for Services as stipulated in article 9.3 of CEFTA’s
Additional Protocol 6. These two mechanisms should serve the business community by
reducing trade barriers. Kosovo remains the only CEFTA party that has not ratified
Additional Protocol 5 (trade facilitation) and it needs to appoint a negotiator and adopt a
mandate for the negotiation of Additional Protocol 7 (dispute settlement mechanism).
In June 2019, Kosovo ratified its free trade agreement with Turkey (signed in 2013), which
provides for the phasing-out (over 10 years) of customs duties on a list of products and a
commitment to negotiate provisions on trade in services. There were no developments on the
November 2018 memorandum of cooperation with the European Free Trade Agreement
countries. In July 2019, Kosovo signed an Agreement on economic cooperation agreement
with the Czech Republic and in December a partnership, trade and cooperation agreement
with the United Kingdom (which can enter into effect once the UK ceases to be a party to the
EU-Kosovo SAA).
6.16

Enterprise and industrial policy

EU enterprise and industrial policy strengthens competitiveness, facilitates structural change
and encourages a business-friendly environment that stimulates small and medium-sized
enterprises (SMEs).
Kosovo remains moderately prepared in this area. Some progress was made in further
improving the business environment. There continues to be a need to further build up
administrative capacity and to ensure stronger inter-ministerial coordination. The
recommendations from the 2019 report were not fully implemented.
In the coming year, Kosovo should in particular:
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 adopt and start implementing a strategy to support Kosovo’s business environment and
industrial development;
 reorganise the Kosovo Investment and Enterprise Support Agency (KIESA) to improve its
support schemes and provision of advisory services to SMEs and add an investor aftercare
unit;
 enhance public-private sector dialogue through the National Council for Economic
Development and make this body effective.
Kosovo’s enterprise and industrial policy is characterised by a piecemeal approach with
poor inter-institutional coordination and no overall vision based on a solid needs assessment.
It still needs to adopt a strategy to improve the business environment and promote industrial
development and to earmark sufficient resources for its implementation and monitoring. The
capacity of the relevant Ministry to provide industrial policy advice is limited, even though
this should be its main function. The Kosovo Investment and Enterprise Support Agency
(KIESA) is responsible for implementing SME support programmes, attracting foreign direct
investment (FDI) and following up the Small Business Act recommendations. KIESA needs
reorganisation, but this is lagging behind, despite increased resource allocation in recent
years. There was no progress on setting-up a FDI after-care unit or redesigning the SME
support and advisory schemes. The National Council for Economic Development (a publicprivate sector dialogue platform tasked with addressing “doing business” priorities) has not
been able to contribute to the improvement of the business environment by eliminating
barriers, supporting firms and attracting FDI. The relevant Ministry received 22 applications
for the status of “strategic investor”, but only three passed the technical phase and have been
evaluated.
Kosovo made some progress on improving the business environment. In May 2019, it adopted
a new strategy (covering 2019-2023) to tackle the high informality levels. There was a further
reduction in the average time needed to set up a business, while the introduction of a unique
identifier number for companies should further help cut red tape and make the administration
more transparent and efficient. Despite improvements in the legislation on bankruptcy and
second chance, some challenges remain. Kosovo should develop an early warning system for
SMEs in financial difficulties with a view to initiating recovery measures. It should also
further reduce the average cost and duration of bankruptcy proceedings.
Despite improvements, Kosovo still lags behind in areas such as permits, access to electricity
and the protection of minority investors. It took legislative steps to rationalise the number of
inspection bodies and streamline procedures, but these have not been adopted yet. Further
efforts are needed to boost young people and women’s entrepreneurship through tailored
policies and measures to address key challenges, in particular access to finance, asset
ownership and skills. The rise in public sector salaries creates risks for competitiveness that
call for actions to raise productivity and open new business opportunities.
On access to finance, high collateral requirements remain a significant barrier to SME
borrowing, so the market continues to require the expansion of credit guarantees to support
loans. Kosovo continued to register a strong growth of credit to the private sector, reaching
10% in December (y-o-y) as credit standards eased, in particular due to Kosovo Credit
Guarantee Fund guarantees for lending to SMEs. The Fund recorded a 36.8% increase in its
SME loans portfolio between March and December. Kosovo should create satisfactory
conditions for investment and commercial disputes settlement. The current dispute resolution
system is characterised by unclear mandates and jurisdiction in the Basic Court of Pristina,
which leads to delays in resolution of disputes and hampers the quality and consistency of
89

decisions. A new commercial court is expected to process commercial cases more efficiently
and reduce the backlog, but it will also have implications for the entire judicial structure that
have yet to be properly assessed.
On enterprise and industrial policy instruments, organisations from Kosovo submitted four
applications to the COSME financed Enterprise Europe Network (EEN). One of them was
selected to represent the EEN in Kosovo. An agreement was signed with the Kosovo Credit
Guarantee Fund under the programme’s Loan Guarantee Facility, supporting SMEs’ access to
finance. Four organisations joined the COSME Erasmus for Young Entrepreneurs network.
6.17

Agriculture

The common agricultural policy (CAP) supports farmers and rural development. This
requires strong management and control systems. There are also common EU rules for
quality policy and organic farming.
Kosovo has some level of preparation on agriculture and rural development. Limited
progress was made overall, especially in the implementation of the annual agri-rural
development programmes and its evaluation, but progress on land consolidation and land
protection was insufficient.
As not all 2019 recommendations were carried out, In the coming year, Kosovo should in
particular:
→ perform a qualitative assessment of the effectiveness of the support measures provided
under the agriculture and rural development programme;
→ adopt the law on common market organisations;
→ take urgent, effective measures to stop the loss of agricultural land and implement the
legislation on spatial planning.
On horizontal agricultural issues, Kosovo’s institutional set-up includes the necessary
systems for the development and implementation of the agricultural and rural development
policy. The sector is affected by a predominance of small farms and fragmented arable land.
In 2019, the agricultural budget (direct payments and grants) rose to EUR 49.6 million. The
2020 budget for direct payments and rural development measures increased by 5 percent.
Additional positions were created in the Ministry of Agriculture. The Ministry adopted the
annual direct payments and rural development programme. It has yet to decouple direct
payments from production and to introduce cross-compliance measures. While internal audit
was strengthened, the lack of administrative capacity for evaluation, monitoring and
accounting within the Agency for Agricultural Development remains a challenge. Kosovo is
in the process of establishing an integrated administration and control system and upgrading
its land parcel identification system; it has already established farm accountancy data
network.
No progress was made in establishing common market organisations. The Ministry’s
legislative workplan provides the relevant Law to be drafted and adopted in 2020.
The agriculture and rural development programme was improved to a certain extent and now
includes support for small farmers. The system for monitoring and evaluating grants and
subsidies has still to be improved, and the impact and effectiveness of support measures under
the programme require assessment. The programme should be reviewed and updated to
improve the efficiency of investments in the sector (e.g. farms, primary food processing, rural
job creation, land consolidation, irrigation).
Progress on quality policy was limited. The legislation still has to be aligned with the EU
90

acquis and implemented.
Organic farming is governed by the 2018-2021 action plan for organic agriculture, with
certification by two international organisations (in the absence of a dedicated domestic
agency).
Progress on land consolidation and protection was insufficient. A more strategic approach is
needed on the latter. Kosovo still has to establish a clear action plan and a taskforce, involving
the Ministry of Agriculture and Rural Development, the Ministry of Environment and Spatial
Planning and local authorities, to address the steady loss and degradation of farm land.
6.18

Food safety, veterinary and phytosanitary policy

EU hygiene rules for food production ensure a high level of food safety. The rules ensure
animal health and welfare, the safety of food of animal origin and animal nutrition, the
quality of seed, plant protection material and protection against harmful organisms.
Kosovo has some level of preparation in the area of food safety, veterinary and
phytosanitary policy. Some progress was made in adopting standard operating procedures on
food and feed control at all stages and in developing annual and multi-annual control plans.
As not all 2019 recommendations were carried out, in the coming year, Kosovo should in
particular:
→ implement an integrated food control system, including by transfering inspectors from the
municipalities to the Food and Veterinary Agency;
→ select the operator for managing the rendering plant and animal by-product collection
system and put into operation the animal by-product collection and disposal system;
→ implement disease control and surveillance programmes and inform the European
Commission on the results.
Kosovo made some progress aligning the food and feed safety legislation, and developed
standard operating procedures for food and feed checks and controls. It drafted 19 laws and
secondary acts. It should draft various standard operating procedures and complete the legal
framework so that it is in line with the acquis. Kosovo should transfer inspectors from
municipalities to the Kosovo Food and Veterinary Agency to ensure consistent
implementation of food safety legislation and EU best practices.
The control system governing the production of poultry meat products intended for export to
the EU received a positive assessment, so Kosovo is placed on the list of countries approved
to export poultry meat products with raw material originating from the EU. Kosovo developed
new tests and is performing proficiency testing with EU reference laboratories, but has not yet
obtained an accreditation.
On veterinary policy, the Food and Veterinary Agency should continue to design and
implement a comprehensive disease monitoring and control system, in line with EU
legislation and World Organisation for Animal Health requirements. The long-term planning
and implementation of programmes to eradicate diseases that are endemic in Kosovo still
requires to be improved. The same applies to animal health controls at farm level and on the
transport of animals, transport at livestock markets and transport of stray animals. The
implementation of programmes in these areas is not satisfactory, with problems mostly due to
the lack of in-service training and education programmes for field veterinarians.
On animal health, a multi-annual animal disease control and surveillance programme is in
place. As part of regional efforts to control and eradicate rabies, the Agency resumed
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vaccination campaigns with EU support. However, it lacks funds and human resources, so
implementation of disease surveillance and control programmes is incomplete.
The system for the collection and disposal of animal by-products is not functional despite the
existence of a new, equipped rendering plant. The Agency is due to select an operator to
manage the rendering plant and the collection system in 2021.
No progress was made on animal identification and registration, where the under-reporting
of animal movements remains a challenge. The Agency has yet to adopt measures to enforce
the relevant regulation at the level of livestock markets, slaughterhouses and transport.
No progress was made on identifying basic cross-compliance measures in the areas of food
safety, animal health and welfare.
With regard to the phytosanitary matters, some progress was made on the completion and
harmonisation of the legal framework on plant protection products, fertilisers, plant
quarantine and seeds and plant breeders' rights. A total of 15 new administrative instructions,
four amendments to existing administrative instructions and two legislative amendments were
drafted. 15 standard operating procedures were developed for the implementation of the
administrative instructions and laws. The Agency should secure sufficient funding and human
resources to implement these legal acts, once adopted.
The Kosovo Institute of Agriculture (as the only scientific body supporting the phytosanitary
sector) should implement the quality assurance system and complete the accreditation of the
plant protection laboratory.
6.19

Fisheries

The common fisheries policy lays down rules on fisheries management, protects living
resources of the sea and limits the environmental impact of fisheries. This includes setting
catch quotas, managing fleet capacity, rules on markets and aquaculture and support for
fisheries and coastal communities.
Kosovo is still at an early stage of preparation in the area of fisheries. No progress was made
in the reporting period. Since none of the last reports’ recommendations were implemented, in
the coming year, Kosovo should in particular:
 further align its market policy with the acquis;
 establish an inventory of fish species.
Kosovo has no coastline, so the acquis on catch quotas, inspection and control is of limited
applicability. For its fisheries sector (which consists of aquaculture operations), it needs to
establish a market policy in line with the acquis, as well as an inventory of fish species and
stronger administrative capacity for policy management, inspection and control.
The Ministry of Agriculture grants subsidies to registered producers, but these are limited and
reflect neither the potential for jobs and exports nor the market value of the sector.
6.20

Environment and climate change

The EU promotes strong climate action, sustainable development and protection of the
environment. EU law contains provisions addressing climate change, water and air quality,
waste management, nature protection, industrial pollution, chemicals, noise and civil
protection.
Kosovo is at an early stage of preparation on environment and climate change. Limited
progress was achieved during the reporting period. There was some improvement on
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environmental reporting and air quality monitoring. Stronger political will is needed to
address environmental degradation and climate change challenges. Many of the
recommendations from the previous report are still pending. In the coming year, Kosovo is
encouraged to considerably step up ambitions towards a green transition and should in
particular:
 establish an effective water monitoring system, publish data and undertake urgent and
permanent measures to reduce air and water pollution;
 continue to increase the waste collection coverage, notably with the introduction of
separation of waste and recycling, introduce circular economy measures to reduce waste
and address the issue of illegal dumpsites;
 enforce legal provisions on environmental liability, damage and crime; implement the
polluter pays principle and create and start a permanent campaign for raising public
awareness on environmental protection;
 implement the climate change strategy and the action plan on climate change, prepare a
roadmap for alignment with the EU climate acquis and start the work on an energy and
climate plan, in line with the Energy Community requirements.
Environment
As regards horizontal issues, Kosovo should update and implement the 2011-2021
environment strategy. Insufficient funding and administrative capacity prevent the proper
implementation of the current strategic framework. The lack of alignment with the
Environmental Liability Directive undermines the effectiveness of environmental protection.
There has been some progress on strengthening Criminal Code provisions on environmental
crime, but they have remained ineffective to date. The environmental inspectorates lack the
capacity for effective enforcement. Implementation of the impact assessments law needs to be
considerably improved. Interinstitutional coordination and civil society involvement remains
limited. Awareness raising is mostly left to the international community and civil society
organisations. Some planned investments have been cancelled or postponed due to delays in
land allocation or a lack of resources for the operation and maintenance costs of
infrastructure.
Air quality continues to pose a major threat to health. The authorities failed to adopt and
implement measures to improve it, in particular trough emission reduction plan. The air
quality strategy is still not enforced. Uncontrolled pollution, notably from outdated thermal
power plants, household heating, traffic, industrial emission and the incineration of waste and
other toxic materials, calls for urgent action. Measures to enforce the ban on coal for heating
are not effective and subsidies should be introduced for other forms of heating. Air quality
plans have not yet been prepared for zones in which pollutants levels clearly exceed limit
values. There has been some progress on the real time monitoring of air quality.
The solid waste management system continues to be unsustainable. The legal framework is
partially aligned with the EU acquis, but secondary legislation is still needed on to extended
producer responsibility and the polluter pays principle. The Law on waste needs to be further
aligned with the Waste Framework Directive. Implementation is deficient and most waste
ends up in landfills that are not properly managed, or illegal. Despite efforts to get rid of
illegal dumpsites, they continued to proliferate (from 1,572 in 2017 to 2,529 in 2019) and
represent a serious public health risk, in particular due to hazardous waste and groundwater
contamination. Waste prevention and monitoring remain a challenge. The current collection
rate is 70% and less than 40% of solid waste is disposed of in managed facilities. Kosovo
93

should introduce legal and practical measures to reduce waste and increase recycling and
recovery in line with circular economy principles. Municipal waste management plans have
not been adopted by all municipalities. The 2013-2022 waste management strategy and action
plan are only partly reflected in local planning documents. The coal ash deposit lake operated
by the Kosovo Electricity Company and the Mirash landfill in Obiliq/Obilić should be
urgently and permanently closed and rehabilitated.
No progress was made on aligning water legislation with the EU acquis. Kosovo has a 20172036 water strategy, but the level of alignment with EU legislation remains very low. More
needs to be done to ensure the implementation the Law on water. Water resource monitoring
networks are still incomplete, in particular for groundwater, and water protection zones are
not being monitored or properly managed. Urgent efforts are required to ensure that the river
basin district authority becomes operational. No progress was achieved in preparing
management plans for all river basins. There was some progress on cooperation with
neighbouring countries on integrated water management and flood protection. Some progress
was achieved with the planning and construction of wastewater treatment plants. Tariff
collection needs to be improved and water losses to be reduced, especially commercial losses.
Dam safety and management are inadequate, as are flood risk mapping and prevention. A lack
of treatment facilities means that untreated sewage and discharge remain the main sources of
water pollution. Kosovo should identify agglomerations and sensitive areas, in line with the
Urban Waste Water Treatment Directive. Water reservoir dams management needs to be
improved to meet water demand, especially in the light of water stress resulting from climate
change. The cumulative effect of the construction of numerous small hydroelectric power
plants harms the environment.
The 2016-2020 action plan for biodiversity is only partially implemented. No progress was
made in the area of nature protection. Kosovo became a member of the International Union
for Conservation of Nature and extended protected area status to more of its territory. Yet,
those are polluted and poorly maintained. Kosovo has taken steps to start inventories and
mapping of natural habitats and biodiversity, but the designation of Natura 2000 sites is still at
a very early stage due to a lack of administrative capacity. Some progress on forestry was
made on planning and management, with the adoption of relevant secondary acts.
Deforestation and illegal logging remain problematic.
No developments were noted on alignment with the EU acquis on industrial pollution and
risk management, which remains at an early stage. Insufficient enforcement of legislation
and polluter accountability is hampering the setting-up of a system for preventing industrial
and chemical accidents. Hazardous mine waste, industrial discharge into rivers and industrial
dumpsites continue to pose serious threats to soil and water. No location has been established
for the future hazardous waste storage facility.
No progress was registered on chemicals, where alignment with the EU acquis remains at an
early stage. Kosovo is not party to the Rotterdam Convention and still needs to implement the
regulatory framework on the export and import of hazardous chemicals. It has not yet
established a helpdesk and a centre for the control of chemical poisoning.
Kosovo has no legislation on noise and there were no developments in this area.
Kosovo is not part of the Union Civil Protection Mechanism, but benefits from regional
civil protection programmes under the Instrument for Pre-Accession Assistance. Kosovo can
also benefit from certain tools under the Union Civil Protection Mechanism such as trainings,
exercises, prevention and preparedness projects and exchange of experts. It has not yet
established an operational centre and emergency communication system. The COVID-19
highlighted the need to strengthen the legal framework and institutional capacities as well as
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human and financial resources of civil protection authorities also with regard to health
emergencies. Kosovo is encouraged to participate more actively in the activities under the
Union Civil Protection Mechanism (UCPM), such as trainings, exchange of experts,
prevention and preparedness projects, exercises, peer reviews and advisory missions.
Climate change
Implementation of the climate change strategy is still at an early stage. Kosovo relies heavily
on coal and is not complying with the emission ceilings established under its National
Emission Reduction Plan (NERP).
Kosovo made no progress on aligning with EU legislation. It still has no climate change
adaptation strategy. The Council for the Environment and Climate Change and climate change
coordinator took no concrete measures to mainstream climate action or raise public
awareness, and there is little evidence of policies being aligned with climate change
objectives. Administrative capacity and awareness-raising need to be strengthened
considerably at all levels. The 2019-2028 climate change strategy and action plan are not
properly implemented.
Although Kosovo is not a signatory to the UN Framework Convention on Climate Change
and therefore does not have a nationally determined contribution under the 2015 Paris
Agreement, full implementation of its climate change strategy should serve as a guide to
achieving the objectives of the Agreement.
6.21

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.
Kosovo is at an early stage/has some level of preparation in the area of transport policy.
Limited progress was achieved, and further efforts are needed to strengthen the
administrative capacity for all transport modes. There was no progress in completing key
sector reforms and the 2019 recommendations remain valid. In the coming year, Kosovo
should in particular:
→ secure necessary resources and improve road safety by targeting the reduction of fatalities
and establish a system for continuous road crash data collection;
→ strengthen the capacity of the railway regulator and ensure its financial and operational
independence;
→ adopt legislation on the Intelligent Transport System (ITS) and develop a strategic
framework for the implementation of the ITS on core networks, ensuring sufficient capacity
and resources for its implementation;
→ pursue efforts to comply with the requirements under the first transitional phase of the
European Common Aviation Area agreement.
On general transport issues, Kosovo needs to maintain its active involvement in Transport
Community Treaty meetings. Kosovo’s key document in this area is the 2015-2025
Multimodal Transport Strategy and action plan need to be updated in line with recent trends
on the environment, greener transport projects and intelligent transport system (ITS). The
legal framework remains not aligned with the EU acquis on summertime arrangements, and
procedures and criteria for the award of public service contracts. There are master plans for
each transport mode, but administrative capacities and network maintenance remain weak.
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Kosovo’s investigation body for air and railway accident is independent from the regulatory
authority. However, it has not yet appointed a staff member in charge of investigating
railways accident. Further efforts are required to transpose the ITS Directive in full and
implement relevant domestic laws. Kosovo has yet to adopt an overall ITS strategy and
allocate resources for ITS.
On road transport, efforts are ongoing to update the legal framework in relation to road
safety audits, inspections and safety management. No progress was made on the adoption of a
5-year road maintenance plan. The implementation of legislation continues to face delays due
to a shortage of inspectors and qualified staff the Ministry of Infrastructure. Implementation
of the legislation on the transport of dangerous goods, including through checks, needs to be
improved. No progress was made on following up the CONNECTA report recommendations
establishing a country-wide road-crash data system nor on transposing EU acquis on
passengers’ rights. Kosovo is not a member of the Interbus Agreement. The introduction of
digital tachographs continues to be held back by the fact that Kosovo does not have access to
the associated digital infrastructure (country codes). Kosovo’s legal framework is partially
aligned with the EU acquis on common rules for access to the international road haulage
market. There was no progress on aligning legislation on clean and energy efficient road
transport vehicles or the development of an alternative fuel infrastructure.
Kosovo’s legislation on rail transport needs to be updated, in particular in relation to
accident investigation. It made no progress on the adoption of a 5-year rail maintenance plan.
Significant efforts are needed to rehabilitate and extend rail transport for both freight and
passengers. The fourth railway package has been partially implemented. The rehabilitation of
the rail route 10 is ongoing and a pre-feasibility study has been launched for the rehabilitation
of railway route 7. In November 2019, railway authorities signed the Declaration on European
Railway Safety Culture, which aims to raise awareness and promote a positive safety culture
throughout the industry. On air transport, Kosovo is part of the European common aviation
area and covered by the single European sky arrangements. The sector continues to face
challenges arising from the fact that Kosovo is not a member of several international civil
aviation organisations. The lack of revenue from upper airspace management continues to
constrain its ability to invest in training and infrastructure development. The Air Navigation
Service Agency and the Civil Aviation Authority face funding difficulties and staff shortages.
Infrastructure improvements at Pristina International Airport are ongoing, including a runway
extension and upgrade of the instrumental landing system.
Regarding aviation security, Kosovo is committed to fulfil EU requirements, international
standards and recommended practices to prevent “Acts of Unlawful Interference”.
No progress has been made on developing an intermodal transport strategy.
6.22

Energy

EU energy policy covers energy supply, infrastructure, the internal energy market,
consumers, renewable energy, energy efficiency, nuclear energy and safety, and radiation
protection.
Kosovo has some level of preparation in the field of energy. There was some progress in
this area, notably on alignment with the EU acquis and on the increase of renewable energy
investments. However, energy sector diversification is slow and Kosovo remains heavily
reliant on coal, which in addition to being a dominant greenhouse gases emission source,
causes serious health and environmental hazards. Kosovo needs a strategic focus on a
comprehensive green agenda, in line with EU goals, including a gradual shift from coal to
renewables and increased energy efficiency in all sectors.
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As recommendations from the previous report were only partially addressed, in the coming
year, Kosovo should:
→ finalise the environmental upgrade of Kosovo B thermal power plant and prepare for
decommissioning works of the Kosovo A thermal power plant;
→ operationalise the Energy Efficiency Fund and start implementing energy efficiency
projects in municipalities. Introduce energy efficiency incentives in residential and private
sectors;
→ update Kosovo’s energy strategy with a main focus on renewables, energy efficiency and
decarbonisation targets. Take measures to enable a cost-effective deployment of
renewable energy and introduce renewable energy auctions;
→ adopt a plan for the gradual adjustment of energy tariffs, reflecting expected increases in
costs, and including mitigation measures for vulnerable consumers.
Kosovo’s competitiveness continues to be undermined by its unreliable and undiversified
energy supply. The outdated power system relies on two old lignite thermal power plants
which account for around 90 % of its electricity production, but also for significant heavy air
pollution and environmental problems. The energy sector is the main source of greenhouse
gas emissions. The 2017-2026 energy strategy needs to be revised and steered towards
decarbonisation.
Some developments took place on security of supply. A new Connection Agreement between
the Kosovo transmission system operator (KOSTT) and the European Network of
Transmission Systems Operators for electricity (ENTSO-E) has been approved, but has not
yet entered into force. Its entry into force should lead to the operationalisation of the recently
built 400kV interconnection line between Kosovo and Albania, which has so far remained
dormant.
Despite investment and maintenance in the power transmission system, more focus is needed
on the reduction of losses in electricity distribution. There was no progress in aligning with
the EU acquis in the area of compulsory oil and petroleum reserves.
Kosovo is exploring possibilities for gas interconnectors with neighbouring countries. The
impact of a gas pipeline between Kosovo and Albania (Alkogap), based on the trans-Adriatic
Pipeline (TAP) project, has been assessed and a pre-feasibility study has been launvhed on a
gas pipeline from North Macedonia to Kosovo.
The internal energy market continues to be undermined by insufficient regional economic
integration.
The fate of the project to build a new 500 MW coal-based power plant (“Kosova e Re”) is
unclear, after the company selected by the Kosovo government to build the new plant
announced in March 2020 that it would not proceed with the project. Several aspects of the
project, including its potential impact on public finances, electricity prices for consumers,
biodiversity, climate change and the environment, as well as its compatibility with state aid
rules, had raised questions. The new government supports the project but there is no clarity on
timelines and financing options.
Works to enhance the environmental performance of Kosovo B thermal power plant started in
2020 and are expected to bring levels of gaseous emissions into line with the EU acquis.
Preparations are ongoing for the decommissioning of defunct units at Kosovo A. There is an
urgent need to find a location for the disposal of hazardous waste. The legal framework needs
to be aligned with the EU Directives on large combustion plants and industrial emissions. In
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27 March 2020, the Ministerial Council of the Energy Community found that Kosovo failed
to transpose these Directives.
Tariffs for households do not yet reflect costs. Wholesale prices in the electricity market are
fully deregulated, but the regulation of supply prices has again been extended. In view of the
expected upward price pressure, Kosovo needs to develop a programme to protect socially
vulnerable customers, in line with Energy Community requirements.
The Energy Regulatory Office has been without a chairperson for the last 3 years, and its
independence continues to be undermined by political interference.
There was some progress on renewable energy sources, notably an increase of new
investments, especially in wind and solar. By the end of 2019, Kosovo had registered 76 MW
of hydropower, 34 MW of wind power and 10 MW of solar power, for a total capacity of
around 120 MW. Works started on a new biomass heating plant. The development of small
hydropower plants faced strong public resistance due to concerns over their environmental
impact. New projects should comply with the EU acquis on concessions and the environment,
and take account of the impact on areas of high natural interest. Competitive bidding
procedures for renewable energy projects are undermined by the use of excessive fixed feedin tariffs by the Energy Regulatory Office. In January 2020, the Basic Court in Pristina
suspended the Office’s decision to raise the fixed feed-in tariffs for solar energy. Kosovo
should introduce renewable energy auctions and enable the cost-effective deployment of
renewable energy. While the legislation is partially aligned with the EU acquis, the electricity
market should be restructured to facilitate the integration of renewable energy generation.
There was no progress on meeting the requirements for the use of biofuels in transport. An
administrative instruction on biofuels and the adoption of a new Law on trade in petroleum
products and renewable fuels have been pending for over four years.
There was some progress on energy efficiency with the adoption of implementing legislation
on the energy performance of buildings and municipalities developing action plans. The
capacity to monitor the implementation of energy efficiency policy remains very limited.
Kosovo needs to bring into operation the monitoring and verification platform for energy
savings. Implementing legislation for the Law on energy efficiency, in particular the energy
efficiency action plan, is pending.
Kosovo should prioritise energy efficiency investments in residential buildings and the private
sector (which account for 50% of final energy consumption). The board of directors of the
new Energy Efficiency Fund was appointed in the reporting period.
There was limited progress on nuclear safety and radiation protection. The capacities of
the Nuclear Safety and Radiation Protection Agency remain weak and it has insufficient
financial resources to deliver on its mandate. Kosovo has still not found a solution for the
temporary storage of radioactive waste. No developments were noted on the monitoring of
radiation (e.g. from depleted uranium) and there is no radiological emergency plan. As an
example of international cooperation in this area, Kosovo is finalising a memorandum of
understanding for the management of radioactive waste with Montenegro.
6.23

Trans-European networks

The EU promotes trans-European networks in the areas of transport, telecommunication and
energy to strengthen the internal market and contribute to growth and employment.

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In the area of trans-European networks (TENs), Kosovo has some level of preparation.
Some progress was achieved, notably by implementing parts of the Transport Community
Treaty and the Regional Roaming Agreement. However, many of the recommendations of the
previous report are still pending, therefore the 2019 recommendations remain valid. In the
coming year, Kosovo should in particular:
 proceed with harmonising the legal framework with the TEN-T and TEN-E acquis.
Implement the pending connectivity reform measures and strengthen institutional and
administrative capacities for the implementation of strategic infrastructure projects;
 improve the capacity of the Regulatory Authority of Electronic and Postal
Communications to enforce telecommunications market regulations;
 sign the pending Railway Border Crossing Protocol with North Macedonia.
On transport networks, Kosovo needs to maintain its active involvement in Transport
Community Treaty meetings. The authorities are encouraged to step up their efforts and
intensify cooperation in the framework of the Treaty. The development of the trans-European
Transport Network (TEN-T) is covered in Kosovo’s 2015-2025 multimodal transport strategy
and a 5-year action plan. As in previous years, interinstitutional capacity to implement
infrastructure projects was very limited. Kosovo should complete priority projects on the
extension of the core and comprehensive TEN-T, but also earmark sufficient resources for the
maintenance of existing networks. It should reactivate the work of the National Investment
Council and channel projects through a single project pipeline. As a reaction to the COVID19 pandemic, green corridors were established and are functioning effectively throughout the
major corridors.
Kosovo continued to develop its transport infrastructure, with the completion in May 2019 of
the route 6 motorway, part of the Orient East/Med corridor linking it with North Macedonia.
However, the project was criticised for a lack of transparency and excessive costs. Financing
has not been secured for the works on route 7 between Pristina and Merdarë/Merdare. Works
were completed on the border crossing point between Stançiq/Stančić (Kosovo) and
Belanovce/Bellanoç (North Macedonia). The construction works for railway route 10 started
in July 2019, but are advancing more slowly than expected. Progress was made on the rail
border crossing protocols with North Macedonia, these should be finalised without further
delay. Some progress was achieved on the opening of the rail market. No progress was made
on the adoption of the five-year road and rail maintenance plan. Current and future
infrastructure investments need to comply with EU standards on public procurement, state aid
and environmental impact assessment, and be based on cost/benefit analyses carried out in
line with EU best practices.
On energy networks, Kosovo made progress on market integration. Kosovo’s and Albania’s
transmission system operators signed in December 2019 a bilateral agreement to establish a
joint control block. However, the new 400kV transmission line and load frequency control
with Albania cannot become operational until the Entso-e/KOSTT connection agreement
enters into force. The impact of the Alkogap gas pipeline between Kosovo and Albania
deriving from the Trans-Adriatic Pipeline (TAP) project was assessed and a pre-feasibility
study was launched on a gas pipeline from North Macedonia. Kosovo remains heavily
dependent on carbon intensive infrastructure and needs to develop its regional connections to
unlock the potential of a broader green agenda and regional integration.
On telecommunications networks, no progress was made on strengthening the institutional
capacity of the Electronic and Postal Communications Regulatory Authority. Kosovo engaged

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constructivelly in the implementation from 1 July 2019 of a regional roaming agreement,
aimed at substantially reduce roaming charges within the region.
6.24

Information society and media

The EU supports the smooth functioning of the internal market for electronic
communications, electronic commerce and audio-visual services. The rules protect consumers
and support universal availability of modern services.
Kosovo has some level of preparation in the area of information society and media. The
legislative framework is mostly in place and there was limited progress on implementation.
Kosovo also advanced with the implementation of the 2013-2020 Digital Agenda and the
Regional Roaming Agreement. A sustainable solution for the funding of the public
broadcaster still needs to be adopted. As in previous years, the Independent Media
Commission did not move forward with the process of switching from analogue to digital
television.
Last report’s recommendations have not been addressed. In the coming year, Kosovo should
in particular:
 ensure that telecoms and media regulators are given adequate resources to fulfil their
mandates independently and develop a solution for the sustainable funding of the public
service broadcaster;
 implement number portability to ensure effective use of numbering resources and
fostering competition;
 free the first digital dividend / liberate frequencies;
 revise the Law on the independent media commission so as to increase the availability of
data on the audio-visual sector and extend the regulator’s regulatory, monitoring and
enforcement powers.
As regards electronic communications and information and communication technologies
(ICT), there was no improvement in the financial and organisational independence of the
Electronic and Postal Communications Regulatory Authority. The Kosovo Agency for
Statistics (KAS) continued to publish data on the use of ICT. According to a survey, 93.2% of
households had access to the internet (unchanged from 2018). Some 91.2% accessed the
internet through fixed connections (a 1 percentage point increase from 2018), while the
number accessing the internet through mobile connections increased by 15 percentage points,
to 39.6%. Data on companies’ ICT use show that 97.1% of businesses with more than 10
employees used the internet, but only 11.4% made sales online and 19% made purchases
online.
In 2019, the telecoms regulator approved several important regulations, including a
Regulation on market analysis, which is in line with the main principles of the EU regulatory
framework. The authorities should ensure that markets are genuinely competitive – the key to
this is number portability (enabling customers to switch operators while retaining the same
number), without which numbering resources cannot be used effectively.
The public institutions are obliged only to use services provided by the publicly owned
operator, Kosovo Telecom; this puts private providers at an unfair competitive disadvantage
(see section 6.7 Competition Policy).
Kosovo continues to implement its 2013-2020 digital agenda. Following some initial delays,
the new dialling code (+383), is now fully operational. The regulator reviewed pricing
100

policies for frequency allocation (currently used for mobile telephony services), the new
frequency allocations and annual fees, resulting in major cost reductions for all categories.
The authorities implemented the Regional Roaming Agreement, signed in April 2019.
As regards the information society, Kosovo continued to work on alignment with the
Electronic Identification, Authentication and Trust Services Regulation, the Directive on the
Security of Network and Information Systems and the Broadband Cost Reduction Directive.
The computer security incident response team (set up in 2014) remains understaffed. Kosovo
is working to get its e-government portal up and running in order to deliver electronic services
to citizens and businesses.
On audio-visual policy, the Independent Media Commission (IMC) once again failed to
make any progress in switching off analogue TV. Kosovo needs to speed up the digital
switchover in full transparency and in line with EU standards. The Law on the IMC gives it
sufficient regulatory, enforcement and monitoring powers to ensure pluralism and
competitiveness in the market, but no market analysis has been done in recent years. Also,
partly due to a lack of information on media ownership and the distribution of advertising
funds, the IMC does not impose effective sanctions on broadcasters. The IMC needs adequate
staffing and funding to exercise its existing powers independently, but its powers should also
be extended to online audio-visual media (e.g. Catch up TV, video on demand and web TV).
Radio Television of Kosovo (RTK) remains directly state-funded, with its budget determined
annually by the Assembly; this undermines its editorial independence and leaves it prone to
political influence. The RTK Law should be amended in line with best practice on sustainable
funding and so as to ensure the transparent and professional selection of its board members.
6.25

Financial control

The EU promotes the reform of Kosovo governance systems to improve managerial
accountability, sound financial management of income and expenditure, and external audit of
public funds. The financial control rules further protect the EU’s financial interests against
fraud in the management of EU funds and the euro against counterfeiting.
Kosovo has some level of preparation in the area of financial control. Some progress was
made with the adoption of secondary legislation on public internal financial control (PIFC), as
well as of a methodology on reporting on internal control systems by the Central
Harmonisation Unit. However, Kosovo still needs to develop a comprehensive PIFC Policy
Paper with a particular focus on the definition and implementation of managerial
accountability. High level political support is needed for the implementation of PIFC at all
levels of administration. The functioning of internal control and audit and the timely
implementation of internal and external audit recommendations should be improved. The
recommendations from last year were only very partially implemented.
In the coming year, Kosovo should in particular:
 develop a comprehensive PIFC Policy Paper focusing on definition and implementation of
managerial accountability;
 define the accountability lines within and between public institutions through adequate
implementation of the Law on the organisation and functioning of the state administration
and independent agencies, and its secondary legislation;
 ensure more systematic and timely implementation of external audit recommendations.

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Public internal financial control
The strategic framework for public internal financial control (PIFC) is broadly in place but
the PIFC Strategy expired at the end of December. Kosovo should start work on a
comprehensive PIFC Policy Paper with a particular focus on the definition and
implementation of managerial accountability. Furthermore, it should align the strategic
framework for PIFC, public administration reform and public financial management in order
to have an efficient system for effective strategic management, coordination, monitoring and
reporting of the reforms.
Kosovo should make further efforts to embed managerial accountability in the
administrative culture. The Regulation on financial management and control clarified the
rules for delegating responsibilities, however in practice it is still under-used and managerial
accountability is limited by a primary focus on compliance rather than performance.
Throughout public sector management there is a need to establish individual performance
objectives linked with the organisational objectives set out in institutional plans and strategy
documents. In addition, the practical implementation of the concept of managerial
accountability needs to be embedded in a coherent way across the central and local level.
There is only a limited delegation of authorities and responsibilities by the management level,
which continues to be strongly centralised. The Law on the organisation and functioning of
the administration and independent agencies should clarify the lines of accountability within
and between institutions and agencies. Implementation of the action plan on the
rationalisation of agencies, which is aimed at reducing the high number of (semi-)
independent agencies and introducing better supervision and reporting lines, has stalled since
the government resignation in July (See section on Public Administration Reform).
The legal framework on internal control is harmonised with international standards. Since
the entry into force of the PIFC Law in April 2018, three out of its four secondary acts have
been adopted. These concern the internal audit function, the internal audit committee, and the
framework and basic rules of financial management and control for all public sector entities,
following the Committee of Sponsoring Organizations of the Treadway Commission (COSO)
principles. Risk management as well as reporting on irregularity management needs to be
strengthened and a risk-based approach to the selection of cases is under preparation.
Internal audit practice focuses mostly on compliance with rules and procedures and the
administrative capacities of internal audit units at central and local level are still limited. Most
internal audit units submit strategic and annual audit plans as required, but quality assurance
should be further implemented.
The Central Harmonisation Unit (CHU) monitored six public sector entities specifically for
the quality of their financial management and control. The Minister of Finance adopted in
2019 a methodology on monitoring and annual reporting for public-sector entities’ internal
control systems. The CHU prepares an annual report on the implementation of PIFC on the
basis of replies to self-assessment questionnaires and its own quality reviews. Its
recommendations should be more evidence-based and more systematically implemented.
External audit
Kosovo’s constitutional and legal framework provides for the functional, organisational and
financial independence of the National Audit Office in line with the standards of the
International Organisation of Supreme Audit Institutions, which the Office joined on 1
January 2020.
The Office’s institutional capacity increased further to 170 staff, of whom 141 are audit
staff. It is implementing its 2018-2021 strategic development plan, which includes objectives,
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performance indicators and a monitoring framework. It has recently established an Anti-Fraud
Unit currently staffed by one official.
The Office introduced audit quality control and assurance procedures and continued to
implement a certification programme for auditors. It finalised 15 performance audit reports,
compared to 13 in 2018 and 11 in 2017. Even if there is an ongoing effort, the Office
undertakes mainly regularity audits and the number of performance audits should continue to
increase. In order to improve the impact of audit work, especially at local level, the Office
worked with civil society organisations, to organise municipality-level public debates on the
audit recommendations. According to its 2018 annual report, the proportion of fully
implemented recommendations rose from 34% to 39%. While its cooperation with the
Assembly committees has improved, the Assembly should more systematically follow-up its
recommendations. The Office should also continue its communication effort to strengthen its
overall image.
Protection of the EU’s financial interests
The degree of alignment with the acquis in this area still needs to be determined. Kosovo has
no anti-fraud coordination service to facilitate effective coordination, cooperation and
exchange of information with the Commission. The European Anti-Fraud Office (OLAF) has
an administrative agreement with the Kosovo Police to ensure cooperation and the timely
transmission of information and cooperation in cases relating to alleged fraud and other illegal
activities affecting the financial interests of the EU.
Protection of the euro against counterfeiting
The degree of alignment in this area needs to be determined. Kosovo has designated
competent authorities and established procedures for dealing with counterfeit money. The
Law on the Central Bank prohibits the circulation of counterfeit money and a Regulation on
cash operations lays down rules and procedures for financial institutions operating in Kosovo.
The Commission has a cooperation agreement on coins with the Kosovo Agency on
Forensics. Kosovo also participates in the actions of the Pericles 2020 programme.
6.26

Statistics

EU rules require that Member States are able to produce statistics based on professional
independence, impartiality, reliability, transparency, and confidentiality. Common rules
govern the methodology, production and dissemination of statistical information.
Kosovo has some level of preparation in the area of statistics. Some progress was made in
improving the methodology for data collection following Eurostat recommendations and with
the ratification of the amended law on statistics. Communication between statistical
institutions improved slightly but coordination at technical level and the use of available
administrative data sources need to be upgraded. Alignment of sectorial statistics with
European standards saw very little improvement during the reporting period. There was also a
very modest increase of statistical products.
As not all 2019 recommendations were carried out, in the coming year, Kosovo should in
particular:
 ensure the implementation of the amended law on statistics;
 improve statistical governance and coordination between the main statistical institutions;
ensure better access to and use of available administrative data sources;
 intensify preparations for the next population census scheduled for 2021 by ensuring
adequate resources and full coverage of the territory.
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Kosovo’s legislation on statistical infrastructure is broadly in line with the European
Statistics Code of Practice. Kosovo should enforce recent amendments to the Law on statistics
by preserving the lead role of the Kosovo Agency of Statistics (KAS) and improving
statistical governance. Communication between statistical institutions improved somewhat:
KAS recently signed memoranda of understanding with the Civil Registry Agency, the
Ministry of Health and Kosovo Police. However, Kosovo should enhance coordination at
technical level and access to and use of available administrative data sources. KAS should do
more to follow up the Eurostat peer review recommendations, particularly by improving costeffectiveness, quality management and relations with data users. It took on more staff, but still
needs to improve the efficiency of its internal processes and delegation of managerial
responsibilities. Its current premises are inadequate. Data transmission to Eurostat continues
to improve. Despite improvements in its web-based dissemination of statistics, KAS needs to
create closer relations with data users and academics. Kosovo continues to use the European
classification of economic activities (NACE Rev.2), but has not improved in the use of other
European classifications. It regularly updates its registers (on agriculture, business and
schools/education), but the population register still needs significant improvements ahead of
the forthcoming census.
On macroeconomic statistics, Kosovo has made limited improvements; further alignment
with the European system of accounts (ESA 2010) is ongoing. KAS shortened the time taken
to produce annual and quarterly national accounts, but it suffers from methodological
inconsistency and changes are not adequately explained. Annual and quarterly sector
accounts, supply/use tables and regional accounts are not regularly compiled. It does not issue
fiscal notifications and complies only marginally with the ESA 2010 transmission table.
Monthly statistics for trade in goods and annual figures for trade in services are submitted to
Eurostat. The Central Bank’s balance of payments data are broadly in line with the acquis.
Government finance statistics are published on a quarterly basis. The harmonised index of
consumer prices is based on EU standards (ECOICOP) but is still not published by Eurostat
due to problems of aggregation consistency. Several surveys for compiling purchasing power
parities are missing.
Structural business statistics and some short-term statistics are partially in line with the
acquis, but their availability is limited and they are not broken down between public and
private investments or by sector. Industry statistics are produced broadly in line with the
relevant regulation, but no construction or service sector statistics are available. The
construction cost index is produced on a quarterly basis. Industry statistics (PRODCOM
survey) for 2018 were finalised and published. Foreign affiliates statistics are not available.
Tourism statistics and transport statistics do not yet comply with the acquis. Statistics on
research and development and innovation are not produced on a regular basis, but the
information and communication technologies statistics for households and enterprises are now
published regularly.
In the area of social statistics, only demographic statistics are broadly in line with the acquis.
Preparations for the upcoming 2021 population census have been hampered by insufficient
financial resources and territorial coverage. Due to the COVID-19 pandemic, the government
postponed the pilot census that was to be conducted in April 2020 and which is a necessary
preparatory step ahead of the general census. Statistics on income and living conditions (EUSILC) are produced annually and data collection methods improved, but EU-SILC 2018
results were not published. Social protection and labour market statistics are only partial.
Kosovo carries out regular annual and quarterly labour force surveys and the publication
timeframe has improved. It still does not produce the labour cost index, structure of earnings
data or job vacancy statistics. It produces partial education statistics, albeit not according to
104

international classification standards (ISCED 2011), but no vocational training statistics.
Public health and crime statistics are not yet in line with EU standards.
As regards agricultural statistics, KAS publishes annual crops, livestock production and
orchard statistics. The agricultural holding survey is produced regularly and in line with the
acquis. The farm structure survey was not conducted in 2019 (due to resource limitation) and
was postponed for after the general census. Agricultural price indices and economic accounts
are produced on a regular basis. Supply balance sheets and the agriculture labour index are
not yet produced.
Kosovo’s energy and environment statistics are partially in line with the acquis. KAS
brought forward the publication of energy balance results and sent more statistical products to
Eurostat, but the energy and environment statistics require further improvement. Energy
consumption statistics for the residential, services and transport sectors are collected, but the
results are not published. Monthly data and the monthly share of renewables are not sent to
Eurostat. The lack of updated energy efficiency indicators continues to be an obstacle to
reporting on energy savings. Waste and water statistics are produced regularly. Greenhouse
gas emission statistics are collected but not published regularly. Kosovo does not yet provide
other environmental statistics, such as air emissions accounts, environment related taxes by
economic activity, environmental protection expenditure and material flow balances.

105

ANNEX I – RELATIONS BETWEEN THE EU AND KOSOVO
In April 2016, the EU-Kosovo Stabilisation and Association Agreement (SAA) entered into
force. The SAA constitutes the first contractual relationship between the EU and Kosovo. It is
a comprehensive agreement that provides a framework for political dialogue and covers
cooperation in a wide variety of sectors, including justice and home affairs, trade, education,
employment, energy, environment and a range of other policy areas. Three Stabilisation and
Association Council meetings and four cycles of subcommittee meetings took place since
2016. Kosovo also participates in the ministerial dialogue between the economic and finance
ministers of the EU and the candidate countries, where joint recommendations are adopted.
The most recent meeting was held in May 2020.
To guide reforms under the implementation of the SAA, the Commission and Kosovo adopted
in November 2016 the European Reform Agenda (ERA) for Kosovo. The Agenda outlines
priority actions in the fields of good governance and the rule of law, competitiveness and
investment climate, and employment and education. Since 2012, the Commission has issued
five reports on Kosovo's progress towards visa liberalisation (the most recent in June 2018).
In July 2018, the Commission confirmed that Kosovo has met the two outstanding
requirements, thus fulfilling all benchmarks set out in the Visa Liberalisation Roadmap. The
European Parliament has voted in support of the Commission proposal. The proposal is
pending in the Council.
The bilateral EU support for Kosovo under the Instrument for Pre-accession Assistance
(IPA II) in 2014-2020 amounts to EUR 573 million. The 2019 and 2020 action programmes
include an EU contribution amounting to EUR 176.6 million. The assistance is implemented
under direct management by the EU Office in Kosovo, as well as through budget support
operations on public administration reform and public financial management.
As part of the response to the COVID-19 pandemic, EUR 5 million have been refocused for
urgent medical equipment and EUR 62 million for socio-economic recovery measures under
IPA II. Kosovo will also receive up to EUR 100 million in loans for macro financial
assistance. Furthermore, Kosovo benefits from the IPA multi-country and regional
programmes and participates in three cross-border cooperation programmes
Kosovo and Europol have concluded a working arrangement in July 2020. The arrangement
will constitute the basis for enhanced cooperation between Kosovo Police, Europol and EU
Member States, in particular in addressing terrorism and extremism as well as organised
crime.
On 17 July 2017, the Council approved the Framework Agreement between the EU and
Kosovo on the general principles for the participation of Kosovo in EU programmes. In
2018, Kosovo joined the Erasmus+, COSME, Europe for Citizens and Creative Europe
programmes. In 2020, Kosovo joined the Customs 2020 and Fiscalis 2020 programmes.
The Kosovo Specialist Chambers and Specialist Prosecutor's Office, established to
investigate and prosecute allegations stemming from the 2011 Council of Europe Report,
which alleges serious violations of international law, continued their work.
Since 2008, the European Rule of Law Mission in Kosovo (EULEX) has been assisting
Kosovo authorities in establishing sustainable and independent rule of law institutions.
EULEX was granted a one-year technical mandate extension (July 2020-July 2021) during the
COVID-19 pandemic. The Mission continues to undertake monitoring activities and has
limited executive functions.

106

To date, according to the government, Kosovo has been recognised by 114 countries,
including 23 EU Member States.
During the reporting period, the UN Secretary-General continued to provide regular updates
on the implementation of the UN's mission in Kosovo (UNMIK). He notably welcomed the
peaceful transition of power after the legislative elections in October 2019, and encouraged
the swift resumption of the EU-facilitated Dialogue.
The NATO-led Kosovo Force (KFOR) has continued to help ensure a safe and secure
environment in Kosovo. In August 2020, it had 3 419 personnel.

107

STATISTICAL DATA (as of 03.04.2020)
Kosovo
Basic data
Population (thousand)
Total area of the country (km²)
National accounts

No
te
1)
No
te

Gross domestic product (GDP) (million euro)
GDP (euro per capita)
GDP per capita (in purchasing power standards (PPS))
GDP per capita (in PPS), relative to the EU average (EU-27 = 100)
Real GDP growth rate: change on previous year of GDP volume
(%)
Employment growth (national accounts data), relative to the
previous year (%)
Labour productivity growth: growth in GDP (in volume) per person
employed, relative to the previous year (%)
Unit labour cost growth, relative to the previous year (%)
**3 year change (T/T-3) in the nominal unit labour cost growth
index (2010 = 100)
Labour productivity per person employed: GDP (in PPS) per person
employed relative to EU average (EU-27 = 100)
Gross value added by main sectors
Agriculture, forestry and fisheries (%)
108

2007

2014

2015

2016

2017

2018

2 127
10 908

1 821be
10 908

1 805e
10 908

1 772e
10 908

1 784e
10 905

1 799e
10 905

2007

2014

2015

2016

2017

2018

:
:
:
:
:

5 568
3 070
:
:
1.2

5 807
3 250
:
:
4.1

6 070
3 410
:
:
4.1

6 414
3 580e
:
:
4.2

6 726
3 740e
:
:
3.8

:

:

:

:

:

:

:

:

:

:

:

:

:
:

:
:

:
:

:
:

:
:

:
:

:

:

:

:

:

:

:

14.3

12.6

13

11.4

8.9

Industry (%)
Construction (%)
Services (%)
Final consumption expenditure, as a share of GDP (%)
Gross fixed capital formation, as a share of GDP (%)
Changes in inventories, as a share of GDP (%)
Exports of goods and services, relative to GDP (%)
Imports of goods and services, relative to GDP (%)
Gross fixed capital formation by the general government sector, as a
percentage of GDP (%)
Business

No
te

Industrial production volume index (2015 = 100)
Number of active enterprises (number)
Birth rate: number of enterprise births in the reference period (t)
divided by the number of enterprises active in t (%)
Death rate: number of enterprise deaths in the reference period (t)
divided by the number of enterprises active in t (%)
People employed in SMEs as a share of all persons employed
(within the non-financial business economy) (%)
Value added by SMEs (in the non-financial business economy)
(EUR million)
Total value added (in the non-financial business economy) (EUR
million)

109

:
:
:
:
:
:
:
:
:

19.4
7.3
59.0
102.9
23.2
2.5
22.5
51.2
:

20.8
8.4
58.2
100.9
25.8
1.8
21.9
50.4
:

21.5
8.1
57.4
100.0
25.5
1.6
23.7
50.9
:

21.8
9.9
56.9
97.5
27
1.4
26.7
52.5
:

21.8
10.8
58.5
99.7
28.1
1.4
26.4
55.6
:

2007

2014

2015

2016

2017

2018

:
:
:

:
31 420
9.0

:
35 472
11.7

:
33 274
9.2

:
34 355
8.7

:
31 028p
:

:

5.3

8.3p

15.8p

:

:

:

76.6

78.3

78.5

78.8

78.4p

:

:

:

:

:

:

:

:

:

:

:

:

Inflation rate and house prices

No
te

Harmonised consumer price index (HICP), change relative to the
previous year (%)
**Annual change in the deflated house price index (2015 = 100)
Balance of payments

No
te

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)

110

2007

2014

2015

2016

2017

2018

4.4

0.4

-0.5

0.3

1.5

1.1

:

:

:

:

:

:

2007

2014

2015

2016

2017

2018

-213.9
-1 354.4
112.2
186.3

-384.6
-2 058.6
459.9
113.8

-497.3
-2 109.3
457.1
92.6

-481.4
-2 290.8
638.8
74.5

-383.2
-2 464.2
793.5
126.6

-508.8
-2 737.7
855.8
113.1

842.0

1 100.3

1 062.4

1 096.1

1 161.0

1 260.0

245.1

291.2

201.9

204.2

195.8

:

:

-5.4

-6.3

-7.8

-7.5

-7.1

:

11.5

6.0

6.8

28.7

38.5

431.0

123.8

271.8

177.2

212.0

:

9.7
:

27.3
:

37.1
:

42.7
:

43.4
:

:
:

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

No
te

***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

No
te

Gross external debt of the whole economy, relative to GDP (%)
Gross external debt of the whole economy, relative to total exports
(%)
Money supply: M1 (banknotes, coins, overnight deposits, million
euro)
Money supply: M2 (M1 plus deposits with maturity up to two years,
million euro)
Money supply: M3 (M2 plus marketable instruments, million euro)
Total credit by monetary financial institutions to residents
(consolidated) (million euro)
111

440.7

151.2

308.8

220.0

255.4

:

:

:

:

:

:

:

37.0
26.0

3.5
8.5

-0.7
6.9

-1.3
3.8

-1.8
9.9

:
:

2007

2014

2015

2016

2017

2018

:
0.0
26.1
19.1

:
10.6e
26.3
27.1

:
13.1e
29.6
28.0

:
14.6e
:
:

:
16.6e
:
:

:
17.1e
:
:

2007

2014

2015

2016

2017

2018

:
:

31.2
:

33.3
:

33.2
:

32.6
:

:
:

:

:

:

:

:

:

:

:

:

:

:

:

:
892.1

:
1 956.8

:
2 101.9

:
2 338.9

:
2 629.5

:
2 939.2

**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 (%)
2)
Deposit interest rate (one year), per annum (%)
2)
Euro exchange rates: average of period (1 euro = … national
currency)
Trade-weighted effective exchange rate index, 42 countries (2005 =
100)
**3 year change (T/T-3) in the trade-weighted effective exchange
rate index, 42 countries (2005 = 100)
Value of reserve assets (including gold) (million euro)

:
:
:
:
14.60
3.30
1

:
:
:
:
10.61
1.11
1

:
:
:
:
8.32
0.90
1

:
:
:
:
7.47
1.01
1

:
:
:
:
6.83
1.04
1

:
:
:
:
6.65
1.31
1

100

102

102

102

103

104

:

0.9

0.4

0.1

0.7

2.5

652.0

645.0

706.4

605.1

683.4

:

No
te

2007

2014

2015

2016

2017

2018

1 576
147
-1 429
:

2 538
325
-2 214
107.2

2 635
325
-2 309
107.1

2 789
310
-2 480
100.6

3 047
378
-2 669
107.3

3 347
368
-2 980
97.9

43.5
37.1

29.8
42.0

32.3
41.6

22.3
42.4

22.0
42.3

27.4
42.7

2007

2014

2015

2016

2017

2018

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

No
te

112

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

No
te

Economic activity rate for persons aged 20–64: proportion of the
population aged 20–64 that is economically active (%)
*Employment rate for persons aged 20–64: proportion of the
population aged 20–64 that are in employment (%)
Male employment rate for persons aged 20–64 (%)
Female employment rate for persons aged 20–64 (%)
Employment rate for persons aged 55–64: proportion of the
population aged 55–64 that are in employment (%)
Employment by main sectors
Agriculture, forestry and fisheries (%)
Industry (%)
Construction (%)
Services (%)
People employed in the public sector as a share of total
employment, persons aged 20–64 (%)
People employed in the private sector as a share of total
employment, persons aged 20–64 (%)

113

12.4

10.1be

9.2e

8.4e

8.2e

10.3e

11.1

:

9.7

8.5

9.7

:

:
:

:
:

:
:

75.9p
81.6p

:
:

:
:

2007

2014

2015

2016

2017

2018

:

47.7

42.8

44.0

49.0

46.6

:

31.3

29.1

32.3

34.4

33.2

:
:
24.6

48.4
14.5
29.8

44.9
13.2
27.2

49.9
14.6
29.6

54.0
14.6
32.7

52.6
14.1
31.5

14.6
14.1
6.6
64.7
:

2.6
17.7
10.9
68.8
31.4s

2.3
18.7
9.5
69.5
32.6

4.2
18.0
11.5
66.3
30.8

4.4
17.4
12.9
65.3
28.4

3.5
14.3
11.9
70.3
30.8

:

68.6s

67.4

69.2

71.6

69.2

Unemployment rate: proportion of the labour force that is
unemployed (%)
Male unemployment rate (%)
Female unemployment rate (%)
Youth unemployment rate: proportion of the labour force aged 15–
24 that is unemployed (%)
Long-term unemployment rate: proportion of the labour force that
has been unemployed for 12 months or more (%)
Unemployment rate for persons (aged 25–64) having completed at
most lower secondary education (ISCED levels 0-2) (%)
Unemployment rate for persons (aged 25–64) having completed
tertiary education (ISCED levels 5-8) (%)
Social cohesion

No
te

Average nominal monthly wages and salaries (national currency)
Index of real wages and salaries (index of nominal wages and
salaries divided by the inflation index) (2010 = 100)
GINI coefficient
Poverty gap
*Early leavers from education and training: proportion of the
population aged 18–24 with at most lower secondary education who
are not in further education or training (%)
Standard of living

No
te

114

43.6

35.3

32.9

27.5

30.3

29.4

38.5
55.2
70.0

33.1
41.6
61.0

31.8
36.6
57.7

26.2
31.7
52.4

28.5
36.4
52.7

28.3
33.3
55.4

16.2

26.1

23.8

18.0

21.7

17.2

:

44.0

45.5

29.6

32.5

35.8

:

17.1

17.4

15.6

23.4

16.8

2007

2014

2015

2016

2017

2018

:
:

482
:

510
:

519
:

528
:

558
:

:
:
:

:
:
16.5

:
:
14.5

:
:
12.7

:
:
12.2

:
:
9.6

2007

2014

2015

2016

2017

2018

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

No
te

Density of railway network (lines in operation per thousand km²)
Length of motorways (kilometres)
Innovation and research

No
te

Public expenditure on education relative to GDP (%)
*Gross domestic expenditure on R&D relative to GDP (%)
Government budget appropriations or outlays on R&D (GBAORD),
as a percentage of GDP (%)
Percentage of households who have internet access at home (%)
Environment

No
te

*Index of greenhouse gas emissions, CO2 equivalent (1990 = 100)
Energy intensity of the economy (kg of oil equivalent per 1 000
euro GDP at 2010 constant prices)
Electricity generated from renewable sources relative to gross
electricity consumption (%)
115

68.7

129.7b

156.1

146.8

153.6

155.9

:

464.3

487.8

545.0

553.1

927.1

:
:

:
:

:
:

:
:

1.2
0.0

:
:

2007

2014

2015

2016

2017

2018

:
0

30.9
78

30.9
80

30.9
98

30.9
108

30.9
119

2007

2014

2015

2016

2017

2018

:
:
:

3.7
:
:

4.5
:
:

4.6
:
:

4.4
:
:

4.5
:
:

:

:

:

:

88.8

93.2

2007

2014

2015

2016

2017

2018

:
:

:
447.9

:
489.5

:
503.8

:
458.9

:
445.3

:

4.0

3.6

6.2

4.4

7.8e

Road share of inland freight transport (based on tonne-km) (%)

:

:

:

:

:

:

2007

2014

2015

2016

2017

2018

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)

1 426
0
1 251
0
595
2 049
4 835

1 605
0
1 342
0
603
2 217
5 436

1 804
0
1 536
0
697
2 524
6 119

2 016
0
1 640
0
638
2 704
5 982

1 793
0
1 412
0
769
2 569
5 918

1 822
0
1 428
0
757
2 585
:

No
te
Agricultural production volume index of goods and services (at 3)
producer prices) (2010 = 100)
Utilised agricultural area (thousand hectares)
4)
5)
6)
Livestock numbers: live bovine animals (thousand heads, end of 5)
period)
6)
Livestock numbers: live swine (thousand heads, end of period)
5)
6)
Livestock numbers: live sheep and live goats (thousand heads, end 5)
of period)
6)
Raw milk available on farms (thousand tonnes)
6)

2007

2014

2015

2016

2017

2018

81.8

115.5

100.0

116.9

112.4

108.3

410.4

416.3e

410.8

416.7

417.0

419.5

321.6

269.8e

258.5

265.0

259.7

258.7

39.6

46.0e

44.2

42.3

41.1

40.2

151.8

234.3

224.1

212.0

210.7

209.8

:

:

:

375.7

331.6

324.6

Energy

No
te

Agriculture

116

Harvested crop production: cereals (including rice) (thousand 5)
tonnes)
6)
7)
Harvested crop production: sugar beet (thousand tonnes)
Harvested crop production: vegetables (thousand tonnes)
5)
6)

294.8

464.6

443.6

562.9

477.9

441.8

0
104.1

0
141.8e

:
145.2

:
186.5

:
181.7

0
155.4

Source: Eurostat and the statistical authorities in Kosovo
: = not available
b = break in series
e = estimate
p = provisional
s = Eurostat estimate
u = low reliability
* = Europe 2020 indicator
** = Macroeconomic Imbalance Procedure (MIP) indicator
*** = The government deficit and debt data of enlargement countries are published on
an "as is" basis and without any assurance as regards their quality and adherence to
ESA rules.
Footnotes
1)
2)
3)
4)

The change of the total area between 2016 and 2017 reflects measurements made
by the Kosovo Cadastral Agency.
2014: includes disbursement fee charged by banks.
2015-2018: 2015 = 100.
Including agricultural common land.
117

5)
6)
7)

2014: data from the 2014 agriculture census.
2014-2018: results for four municipalities in the north of Kosovo which did not
participate in the census/surveys are estimated.
Excluding rice.

118